(d) Small business and competition.

A rising birth rate for small business, and a favorable environment for its growth, are not only economic necessities but also important practical demonstrations of opportunity in a democratic free society.  A great many veterans and workers with new skills and experience will want to start in for themselves.  The opportunity must be afforded them to do so.  They are the small businessmen of the future.

Actually when we talk about small business we are talking about almost all of the Nation’s individual businesses.  Nine out of every ten concerns fall into this category, and 45 percent of all workers are employed by them.  Between 30 and 40 percent of the total value of all business transactions are handled by small business.

It is obvious national policy to foster the sound development of small business.  It helps to maintain high levels of employment and national income and consumption of the goods and services that the Nation can produce.  It encourages the competition that keeps our free enterprise economy vigorous and expanding.  Small business, because of its flexibility, assists in the rapid exploitation of scientific and technological discoveries.  Investment in small business can absorb a large volume of savings that might otherwise not be tapped.

The Government should encourage and is encouraging small-business initiative and originality to stimulate progress through competition.

During the war, the Smaller War Plants Corporation assisted small concerns to make a maximum contribution to victory.  The work of the Smaller War Plants Corporation is being carried on in peacetime by the Federal Loan Agency and the Department of Commerce.  The fundamental approach to the job of encouraging small concerns must be based on: 

1.  Arrangements for making private and public financial resources available on reasonable terms.

2.  Provision of technical advice and assistance to business as a whole on production, research, and management problems.  This will help equalize competitive relationships between large and small companies, for many of the small companies cannot afford expensive technical research, accounting, and tax advice.

3.  Elimination of trade practices and agreements which reduce competition and discriminate against new or small enterprises.

We speak a great deal about the free enterprise economy of our country.  It is competition that keeps it free.  It is competition that keeps it growing and developing.  The truth is that we need far more competition in the future than we have had in the immediate past.

By strangling competition, monopolistic activity prevents or deters investment in new or expanded production facilities.  This lessens the opportunity for employment and chokes off new outlets for idle savings.  Monopoly maintains prices at artificially high levels and reduces consumption which, with lower prices, would rise and support larger production and higher employment.  Monopoly, not being subject to competitive pressure, is slow to take advantage of technical advances which would lower prices or improve quality.  All three of these monopolistic activities very directly lower the standard of living—­through higher prices and lower quality of product—­which free competition would improve.