Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-01-19
BANKERS OPPOSE
PUBLICITY CLAUSE
Ask That Section Be EIimi.
mated From Reconstruct
ton Bill.
BY DAVID LAWRENCE.

Bankers in various parts of the coun-
try have telegraphed to Washington
urging that the so-called publicity pro-
vision of the Senate bill creating the
/ Reconstruction Finance Corporation be
eliminated in conference. lest the cor
poration be handicapped at the very
start of its operations.
1t is argued that banks will not apply
for loans if the amount and nature of
+ these transactions are to be made pub
lie, the objection being that the very
resort to the corporation may be inter-
preted in local circles as sign of weak
ness, and hence provide a loss of the
very confidence the new legislation is
designed to maintain.
Report Called For.
The Senate measure contains the fol-
| lowing provision, which was not in
cluded in the House bill:
! The corporation shall submit quar-
! terly to the President and to the Senate
and House of Representatives Cor the
secretary of the Senate and the clerk
of the House, If those bodies are not in
session. full and detailed report of its
activities and expenditures, together
with statement showing the condition
OF any funds administered by it, includ-
ing statement of the volume of loans
or other transactions entered into I'M
der this act during the period covered
by the report, the names of the persons,
financial institutions or corporations
with whom contracts of loans or other
! transactions were entered into, and the
amount involved in each case Such
reports shall, when submitted, be printed
as public documents"
Contrary to Practice.
support in the Senate side of the Capt.
tol, being sponsored by Senator La
Toilette of Wisconsin, The protesting
bankers say they have no objection to
the listing of the information and its
submission as confidential document
to the controller of the currency or
some other designated officer of the
legislative or executive branch of the
Government, but that the making pub
lie of any private loans is contrary to
banking practice, and would inevitably
prevent the Reconstruction Corporation
from functioning.
The National Credit Corporation
cane cropper on a clause which was
little considered at the time of it's for
nation. namely, the provision which
required local clearing houses to assume
liability for loans. While this was
stipulation made by the bankers them
selves, 1t Illustrates how single barrier
may block the smooth functioning of
the whole financial structure
Run Actually Started.
The fact that banks had to submit
their requests to local clearing houses
meant virtually making it public, be-
cause the directors of many institutions
had TO be consulted before liability could
be assumed. In some cases word would
leak out that bank was applying for
accommodations at the National Credit
Corporation, and this was locally con-
strued to mean the borrowing bank was
in difficulties. III one instance it is
claimed run actually was started.
Unless the application for a loan Is
guarded better than in the case of the
National Credit Corporation, which had
no publicity provision whatsoever fears
are expressed that the great hopes
pinned in the Forthcoming operations
of the Reconstruction Corporation will
not be realized
The expectation is that some cham,
in the publicity provision will be m
when the bill is amended in confereul
though the fate of the whole measure
rests on the removal OF such clauses as
would open up private loans to public
inspection.
Copyright, 1922