In beginning, I want emphatically to absolve my employers from any responsibility for these remarks. The New York Reserve Bank has, in characteristic fashion, given me unlimited access to the files and to the men who were active in 13b lending during its heyday in the thirties, but has imposed no restriction on the use I have chosen to make of the results. My observations actually grow out of a joint effort by Professor Malcolm Urquhart of Queens University in Canada, and myself. We will share authorship of a monograph on this same subject to be submitted later this year to the National Bureau of Economic Research, and it is only because this paper was requested on very short notice that I have prepared it alone, before we had fully agreed on the implications of our findings. My major conclusions, after more than a year of study in the dossiers of some 250 of the small concerns which applied for Reserve Bank aid in the thirties, can be put very briefly. The increasingly diverse and exacting requirements for successful management -calling for technical know-how, precise internal cost accounting, effective sales techniques (based on market analysis and forecasting), plus skillful handling of the flow of cash through a business are making it more and more difficult for the principals in smaller businesses to do their job effectively. The counterpart of that development for the credit institution is likely to be added responsibility at three stages in the lending process: (1) the operating performance of the applicant in the pre-loan period; (2) the credit investigation and decision to lend; and (3) the servicing of outstanding loans. I propose to pass over much of the description of the 13b program itself, and to deal with these concerns as a limited set of case histories in the pathology of smaller business. It is quite possible that many of the concerns I have studied merely represent the normal crop of failures, en route to extinction. The fact that nearly all of them had survived for at least ten years, and that their average life had been nearly twenty years at the time they came in for assistance, does suggest, however, that they may indicate some continuing characteristics of typical small business.