Evening star., 1932-07-17
Vast Expansion of Federal Government
In the Field of Finance. and Credit

our European governmental debtors
must be regarded as further enlarge
ment of the. loaning activities OF the
Government at Washington. Our debt
ors in Europe are permitted 10 keep
for one year the money which in that
year they were dCe to pay to us; but
they have been obliged to promise TO
pay 1t to us in annual installmentS
later on, and they have been obliged
to promise also that for the temporary
, use of the money they will pay us in
terest at the rate OF per cent per
annum.
For the financing Of loans on homes
and for the financing of new home
construction. this Congress. in its clos
ing hours, with presidential approval,
empowered the Federal Government to
make advances which may amount TO
SIPS 100000 to new home loan rediS-
count banks.
To the State governments, under the
second Reconstruction Finance Corpora
ton bill, $300,000,000 will be advanced
for unemployment distress relief pur-
poses. This money is supposedly to be
returned to the Federal Government
with 3 per cent INTEREST," through
deductions in subsequent years from
Federal appropriations for the construc-
tion Of State roads.
! Similarly, In the second Reconstruc-
| ton Finance Corporation bill. there is
an additional advance Of S120 900 900
/ to the State governments specifically
for highway construction and this sum
also is supposedly TO be returned to the
Federal Government through deductions
! from subsequent Federal appropriations
for road building.
| All sums to this point mentioned are
small however. in comparison with the
sums dedicated by this Congress TO the
maintenance Of the solvency Of solvent
! banks and to the furtherance Of con-
! struction activities that can demon
| strate themselves to be self -hquidat-
ing" or "self-supporting" in operation.
| *
! The resources originally authorized
for the Reconstruction Finance Corpora
| amounted to S2,000,00 900. Deducting
| the 5000 900 900 destined to agriculture
and the 5000 600 900 destined to closed
| banks, there remained 81 soc, ,000,0 to
/ be used as loans for the help Of solvent
banks-and to be used in incidental
! quantities for the help Of railroads in
/ meeting their financial obligations.
To this 81 600 900 900 designed pri-
marily for loans for banking solvency
]
Finance Corporation bill adds $500
! 100000 designed primarily for loans 10
local governmental and private corpora
/ tions for enterprises having self-liQui4
dating character and having a public
or quasi-pubic intention. These new
loans will be to States. counties, cities,
/ port authorities, tunnel companies, and
| multitude of other local public and
| private bodies. These bodies will be ex-
/ pected to repay the loans with interest.
x
| In total this Congress has authorized
the Federal Government to become .
| lender of money in amounts reaching
| almost S4,500.000.000. 1t becomes quite
! clear that the administrator prime
| conception of relief" by the Federal
| Government at this time is through
! Federal credit. Gov. Roosevelt, as the
/ Democratic candidate for the presidency.
has committed himself to Federal re
| lief" which shall be. he says larger and
better The contest between Gov.
Roosevelt and President Hoover on this
point will certainly be a contest on q
large financial scale.
Copyright. 1927