Evening star., 1932-07-11
Continued From First Page.)

ment through construction of sound
-liquidating or income-prooucine
projects.
IS. Authorization to the corporation
to undertake to finance exports OF
agricultural products and to make loans
to institutions on the security Of agri-
cultural commodities In order to assure
the carrying of normal stocks and the
orderly marketing of these commodl-
ties.
a. To increase authority Of the cor
poration to issue securities by further
$780, 100000
THE bill now under consideration
consists of three titles, of which shall
first refer to Title I and Title III:
Title 1 Amended.
Title i.
"As this title has been amended, II
now stands in accord with my recon-
endation.
This portion of the measure pro-
poses to expend 1922 100000 on public
works. I have expressed myself at
various times upon the extreme unde-
STABILITY Of increasing expenditure on
non productive public works beyond the
C0.000,000 of construction already In
the budget. 1t is an ultimate burden
upon the taxpayer. 1t unbalances the
budget after all our efforts to attain
that object. 1t does not accomplish
the purpose in creating employment for
which 1t Is designed, as is shown by the
reports of the technical heads OF the
bureaus concerned that the total annual
direct employment under this program
would be less than 100000 out of the
100000 unemployed. Strongly as
feel that this departs from sound public
finance, and that it does not accomplish
the purpose for which 1t is instituted
I am not prepared for this reason alone
to withhold my assent to the bill pro-
vided there is proper provision that
Except for expenditure on public roads
which is deductable from future appro-
priations, together with park and forest
roads and trails) these works should
not be initiated except on certificate
of the Secretary of the Treasury that
the monies necessary for such expendi-
ture are available, or can be obtained
without interference with current
financing operations Of the Government
The expression Of this principle in the
present bill Is not in this form and
is not adequate.
little II. This title Is the major ex-
tension Of the authority Of the Recon-
struction Finance Corporation. The
creation of the Reconstruction Finance
Corporation itself was warranted only
as a temporary measure to safely pass
a grave national emergency which
would otherwise have plunged us into
destructive panic in consequence Of the
financial collapse in Europe. Its pur-
pose was to preserve the credit struc-
ture Of the Nation and thereby protect
every individual in his employment. his
farm, his bank deposits, his insurance
policy, and his other savings. all of
which are directly or indirectly in the
Of the great flduciary in
stitutions. It's authority was limited
practically to loans to institutions which
are under Federal or State control or
regulation and affected with public in
terest. These functions were and are
in the interest of the whole people.
Widening Of Activities.
"Our problem now is to further widen
the activities of the Reconstruction
Corporation in the field OF employment
and to further strengthen agriculture
IN SUCH ldsolllVil 90 WALL oSiA-
eft the whole people as will not dam
age any part of the people and confer
no special pr. f1eges upon any OF the
people.
so far as those portions of the pro-
posed extension of authority to the
provide authorization tenn
porarilv to finance self-liquidating works
up to the sum Of $500 100000, it is in
accord with my recommendations. The
section dealing with agricultural relief
does not provide for loans to sound
institutions upon the security OF agricul-
tural products in order to assist in
production and finance of normal hold
ings and stocks of these commodities
and thus aid in the orderly marketing
of agricultural products so sorely needed
at the present time. Such action would
contribute to improve price levels OF
farm products.
There are several secondary oojec-
tions to this title with which I will not
trouble the Congress, because my major
objection to the measure. as now
formulated, lies in the inclusion of an
extraordinary extension of authority to
the Reconstruction Corporation to make
loans to individuals, to trusts, estates
partnerships, corporations public or
uuasi-publicor private), to associations,
Joint stock companies, States. political
subdivisions of States, municipalities,
or political subdivisions thereof" The
following objections are directed to this
particular provision.
"First-This expansion Of authority
of the Reconstruction Corporation
would mean loans against security for
any conceivable purpose on any con-
ceivable security to anybody who wants
money. 1t would place the Government
in private business in such fashion
as to violate the very principle of pub
lie relations upon which we have
builded our Nation. and renders inse-
cure it's very foundations Such action
would make the Reconstruction Cor
poration the greatest banking and
institution of all his
Capitalization of banking and finance
to which the American people have
been properly opposed for the past 100
years. The purpose Of the expansion
is no longer in the spirit of solving n
great major emergency, but to estab-
lish a privilege whether 1t serves q
great national end or not.
"Second-One of the most serious OBJ
jections is that under the provisions
of this bill those amongst 10000 munic-
ipalities and the different States that
have failed courageously to meet
their responsibilities and to balance
their own budgets would dump
their financial liabilities and problems
upon the Federal Government. All
proper and insuperable difficulties they
may confront in providing relief for
distress are fully and carefully met
under other provisions in the bill.
Miscellaneous Loans Hit.
Third. The board of directors Of the
Reconstruction Corporation inform me
that miscellaneous loans
under this provision are totally imprac-
ticaole and unworkable. It would be
necessary to set up huge bureaucracy,
to establish branches In every county
and town in the United States. The