Evening star., 1932-07-07

y
| Iowing failure of White House
conferences to reach compro-
| misc with congressional propo-
nents of the Wagner Garner rehel
measure, follows: -
IT regret that the conferences In
endeavor to arrive at basis OF a Work-
able relief bill old not succeed: IL Is
eli +he more regrettable since the de-
! Hberations this morning made IL clear
that ii was possible to harmonlze con-
| f1icting views. and so reach an agree
nnent were 1t not for the inslstence OF
the Speaker on one point Inc plll as
rpported bv the conferees provloes.
First, provision for expanoIng uile
borrowing authority OF the EeCo1iSoi @ So u.. -
ton Corporation by Sl'ooo,oou'oeo, o,t 70
| Iin,Iidating construction projects OF
nIibIc and semi-publc character 10 IN
crease employment. .... .ho+
Second Speaker Garner insists tnat
| the corporation shall also make loaIls
| 10 any individual any private corpora
ton any partnership, any State, or any
municipality on any conceivable klno OF
security and for any concelVapIe pun
! pose. .s ~, +ha
: Reconstruction Corporation OF SluO,=
OOO. 600 for the President, 10 pe us
posed of either as charity OF as loans, 10
and one of $500, 100000 to be Ioaileo " "
state governments who are unaple 10
| fnance themselves to care for distress
| but such loans to be apporuonea among
the states on a per capita OASIS Oh
Fourth. s322, 900 900 Of additional
public works beyond the ,0uo'Voo {
! IF construction work now proVlded lor
! in the budget.
The Fatal Difficulty.
"As to the first provision, the Re
construction Corporation authority 10
make loans today is practically lmlteo
| to institutions under State ana Feoeral
| regulation: that is, banks, savings
banks. building and loan associations,
| agricultural credit corporations allo M
| railways 1t Is serving 70 proteee tne
| credit structure of the Nation, whose
coIlanse would mean the complete dls-
eeter to all and the savings OF all the
neonle that directly or indirectly are IN
he safekeeping of the great fiduclary
| institutions. savings banks, insurance
| ronnanies. building and loan assocla-
| tions. that is, the whole people.
.The provision to finance 1850, ,o00,-
| mn self lf-nuuidating construction prof.
ects for relief of unemployment com
prised part Of the proposals hao al
! ready made to the Congress.
| oThe fatal difficulty is the Speaker S
| insistence upon provision that loans
| should also be made to individuals, prl-
vate corporations partnerships, states
| and municipalities on any conceivaDie
security and for every purpose, Sucn
an undertaking by the United StateS
| Government makes the Reconstruction
/ CORPORATION the most gigantic banKlng
| ara nawnbroking business in all his
| tory. oo
aThere are 48 States and $4,000 mu-
nicipalities who could under its terms
| dump their responsibilities upon tne
Federal Government. The purpose TO
| take care of unemployment distress IN
| such centers is provided for in the pro-
nosals of EMPLOYMENT and loans TO the
| States. The Speakers proposal IN no
| sense contributes to relieve such ols-
tress. 1t would compel the ReeonStruc-
| ton Corporation to attempt TO oeal
with millions of people in terms OF nun
dreds of thousands OF small ana large
loans 1t would result IN dumping =
| vast amount of doubtful private and
| corporation debts on the Federal Treas
ury to no national purpose OF releVlng
unemployment It would require the
| extension of branch Offices in every
town and county in the United States
and set up a huge bureaucracy aole 10
dictate the welfare of millions OF people,
and at the will of its agents deal favor
and disaster among them. No group
| of seven men can so organize as not
| to discriminate unfairly between COM
petitive enterprises. There Is no pooy
| of men who could physically administer
such gigantic project. The board OF
| the Reconstruction Corporation, except
one absent member, informs me unan-
| imously that the making OF loans to
! individuals is totally unworkable. 1t
would undermine Federal credit and
| bring a vast increase In unemployment.
Impossible Task.
i 81 wish to emphasize what 1t means
Such proposal means that the Recon
| struction Finance Corporation Is 10
| take over an impossible task ana most
difficult part of the banking business
| that is to deal with the doubtful credits
in the whole United States. To carry
out such a purpose it would be neces-
| sary. as I have said. for the board OF
seven men to set up branch banks IN
practically every community and o
| direct their operations from Washing
ton. It would be dependent upon men
in these thousand branches. The tass
! of organization and Of finding compe-
| tent personnel would not be matter
| of months but of years. From an or
| ganization and administrative stand
| point it is self-evident that the pro-
posal Is impossible Of execution, anc
huge losses and great scandals mus
inevitably result from any attempt tc
do so.
ANY attempt to carry out such 9
law under these circumstances mus
mean the squandering Of hundreds o.
millions of dollars Of public funds. Tht
board would be flooded with HUNDREDS
of thousands of applications. There
would be serious interference, II not
complete breakdown, of the vital ac-
tivities it Is now carrying on undei
high pressure. And there will be dis
appointment on the parts of hundreds
and thousands of individuals and thou
sands Of businesses who will have beer
led to believe that the credit OF th'
United States Government was mace
available for their individual purposes
There will be inevitable determinations
The organization would be subject U
predatory corporations and Interests
everywhere.
Aside from the utter impracticabil
ity of the proposal, no funds, or TOTALLY
inadequate funds. are provided for tn
making of these loans. The bill as ]
came from the Senate provided for in
creasing the authority Of the Recon
struction Finance Corporation to Dor
row by 81 500 100000 for certain SELF
liquidating construction projects emu
merated in the bill Presumably tn
Senate did not provide more than
thought was necessary for these pur
poses. Not one penny is to be adde'
for the making Of these individual prl
vate. corporation and public loans.
other words. the Reconstruction Cor
poration is to be charged with dut,
which is impossible. to carry out II
| practice. and it is to be furnished will