Evening star., 1932-07-07
HOover's Statement
President Bla,nes Speakers Insisfence One Point
For Failure of Conference on
Relief Bill.


available to the Reconstruction Finance
Corporation were increased from Sz,Oo0,-
600 goo to $4,000 900, 600. OF this the
corporation must borrow $500 'oOU,OO0.
| The corporation can only borrow sucn
sum because its debentures are guar
| teed by the United States, or. IN otner
words because the credit Of the United
States is pledged to secure its obnga-
| tions. To sell any such vast amount
| of securities at a time IKE TINS Is
difficult enough task. strong as tne
| credit Of the United States Government
/ But it can only be done. ana cone Will
out danger to breakdown OF the CIeuIt
of the Government, if the purposes 1or
! which the funds are to be used are
| economically sound and If the loans De
made under such safeguards that they
will be repaid. in order that the trans
/ action viii not constitute charge on
| the general fund of the Treasury ana
| the taxpayers. But If these 1unos are
| to be sutIandered by the making OF
| loans for every conceivable purpose,
with inadeuate safeguards, 1t VIII al
once become evident that the credlt OF
the Government is being misused.
Threatens Credit of U. S.
I'VE have sought during these diff
cult times to maintain as a pillar OF
unassailable strength the credit OF the
United States Government. 1t is not
too much to say that the measure pro-
posed and insisted upon, even TO tne
extent of 6efeat Of relief legislation py
the Speaker of the House threatens tne
credit of the United States Government
and disaster to our people. me pro-
posal violates every sound principle OF
public finance and of government.
MY objection to the second proposal
Of placing S100,000,000 at the oisposai
of the President was that the FeoeraI
Government should not make direct
such responsibility should not be placed
| on the President. A further objection
is that the $500, 1000, 900 OF loans to
| States were allocated on a populauon
| basis. or 81 .66 per capita. A large part
! of the States are able to take care OF
| their own and to finance their relief
needs, and probably three-fourths OF
| the total amount would be unused by
| such States, or, alternatively, there
would be every pressure upon State
! officials to demand the money even
/ though there was no need.
''The funds asSignable to States Where
there is acute need would, when re-
duced to the per capita OF the people
! suffering from unemployment IN those
! acute areas amount to less than S1O
per person for whole year. The ap-
parent large sums discussed would raise
| false hopes, would tend to destroy
charity and uncermine local and gov
ernmental contributions to the needy IN
! several times the amount which would
! be made available. Furthermore, loans
are to be made to States solely on the
| certificate of the Governor and ad-
ministered solely by him. There Is no
precaution that the funds are to be
| administered under the ordinary checks
and supervisions of the State govern
ments or Federal Government. To
allocate such large sums to public
official without restriction or the neces-
| sity of proper accounting and auditing
/ is unheard Of
LAS to the third point-that IS, the
| provisions to spend additional 1922
| 100000 on public works-my objections
were that the cost of these works ulti-
mately comes frcm the taxpayer and
will produce a deficit in the budget by
| Just the amount expended; that 1t dis
| cards to the winds every effort made
to balance the budget. Many of the
works designed are remote from centers
| of unemployment. The technicians OF
! the Government state that 1t would
! give curing Jne year an average AllSCt
| employment to less than 100000 out Of
a total of 100000 unemployed.
Can't Accept Terms.
"It was, however, possible to reach a
, fair adjustment of the proposal as To
| $500, 900 900 loans to the States which
may be unable to relieve distress and
to protect the Treasury In large meas
ure in the matter of the 1922 900 900
of nom productive public works. We
are in agreement in the provision OF
temporary loans by the Reconstruction
Corporation to finance $500, ,000,0 900
of productive construction work for the
unemployed
There is unquestioned need for the
! passage of legislation to take care Of
unemployment and such cases of desti-
| tuition as the resources Of the States
are unable to meet. I have recon-
mended such legislation While I am
| determined that there shall be relief
legislation at this session of Congress,
I cannot accept the proposal up to now
insisted upon by Speaker Garner as a
condition to securing his support for /
do not propose to further increase un-
employment by such disastrous action
as is now proposed through jeopardiz-
ing the whole credit of the Government
and laying our people open to every
kind Of injustice and loss"