The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-01-05
Presidents Reconstruction
Measure Leaps First
of Hurdles.
ASSAILED BY M'FADDEN
"Opens Treasury Back
Door, Says Hoover Foe:
Loan Brides Hinted.
~ LnLtcd Press

dDlb LepDIl OH Inc 3H,UOU,UUU Recon-
etruction Finance Corporation, Rep
resentatiye McFadden (Rep., Pa
today launched bitter offensive
against President Hoovers measure
before the house finance committee.
McFadden, former chairman of
The committee, said the corpora
lion actually would open the back
door to the treasury by taking over
The duties originally assumed by the
S5OO,000,000 National Credit Cor
.poration formed last spring by
bankers to meet financial emer-
gencies.
McFadden's attack came during
committee questioning of Eugene
Meyer, federal reserve board COVER
nor, on the practicability of the
proposed legislation, with Meyer
urging quick action.
Present at Farley
"As you know McFadden said,
Il was present at the White House
conference last summer at the time
announcement of the national
credit corporation was made. At
that time it was assumed this cor
poration would be competent to
handle the situation.
Now, observe, that after three
months of operation that corporation
is asking only 10 per cent of the
subscriptions pledged by the banks
that joined"
Meyeh da observed earlier that
the National Credit Corporation re-
Gently asked $50,000000 from sub
scribers, butt commented that this
does not indicate the enter amount
Of the credit corporations work.
Not Very Active
There has been a general impress
sion that the National Credit Cor
poration has not been very active, :"
McFadden continued.
! am asking you whether the
bankers who formed it did not hold
of to avoid the responsibility and
let it be taken by the reconstruc-
ton corporation, which is the pub
lie generally, and which actually is
opening the back door to the treas
ury."
THAT is not my impression"
Meyer said.
Meanwhile, hints of irregular
practices and even bribery found
their way into testimony at the SEN
ate finance committees investigation
of foreign loans, but stoutly we're
denied by Clarence Dillon, the wit
ness, as far as Dillon, Read 81 Co,
international bankers, are concerned.
Asks About Bride
Senator Hiram johnson (Rep.,
CALI asked Dillon whether the
minister of finance of Bolivia had
been accused of accepting a $40,0 900
bride in connection with a loan in
which Dillon, Reed & Co. partic-
ipated. Dillon said he did not
know.
Dillon denied his company COM
peted for South American loans,
saying, "we declined to bid and car
ried on all negotiations directly with
the governments. Otto Kahn of
Kuehn. Loeb &, Co., testified Monday
there was keen competition.
Both domestic and foreign groups
with outstanding bonds are buying
up their obligations whenever they
have the cash, in the present low
market, Dillon asserted.
German borrower, he named par
ticularly. as being engaged in this
operation. Senator johnson replied.
that is impossible because we had
to give the Germans A moratorium.
Il am speaking of German indus
trial concerns Dillon answered.
There is no moratorium for them"
Secretary of Navy Adams today
personally Endorsed the Vinson bill
calling for construction of 100 new
warships over a period of ten years
at a cost of S616 100000.
Waits Hoover Approval
Adams told the house naval af-
fairs committee the navy depart
ment officially would indorse the
measure when and if it is approved
by President Hoover and the budget
bureau. He added that he person
ally favored the bill
The house naval affairs commit
tee today voted unanimously TO in
veStiate rumored defects in the new
navy dirigible Akron.
The investigation was asked by
Representative McClintic Dem.
Okla)
Representative George Huddles-
ton Dem, Ala) told the senate I'M
employment relief committee today
that thousands Of men, women and
children were suffering because OF
unemployment conditions in Biz
mingham, and that the situation
there was filled with dynamite"
Favors Federal Aid
Huddleston said that you can't
expect people to be reasona BILE
under these conditions and they are
resentful against every one in pub
lie office" He favored federal ap-
preparations for unemployment re-
lief.
The Democratic tariff bill TODAY
was assured right of way over all
other legislation in ne house.
The rules committee approved a
resolution under which the tariff
measure will be the continuing
business Of the house from the time
II is brought to the floor until it is
disposed Of.
The house ways and means COM
mittee was scheduled to begin hear
ings on the tariff at 2 p. m.