The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-12-21
Big BANKS GET
LIONS SHARE
OF R. F. c. AID
Small Institutions Ignored,
G. 0. P. Leaders Benefit,
Writer Charges.
HOOVER IS CENSURED
Public MiSIed in Belief That
Needy Firms Given
Help, Says Flynn.
BY HERBERT LITTLE
Times STAFF Writer

WASHINGTON, Dec. 21.-Dis-
closing totals of loans made by the
Reconstruction Finance Corporation
to large banks during it's secret op-
erations early this year, John T.
Flynn, in the January Harpers' mag
azine, today charges the Hoover ad-
ministration with misleading the
public into accepting utterly false
impressions" that the publics money
went into small banks.
Flynn lists r. F.. c.. authorizations
aggregating $155,000,OO0 to the
Charles F. Dawes and A. P. Clan
mini banks, and adds, certainly no
citizen could have guessed that such
vast public sums were made avail
able to just two banks, from the
Presidents pronouncements about
helping little banks and not big
ones"
The article upbraids Hoover for
statements emphasizing that most
of the loans went to little" towns.
Goes to Big Banks
It states that the loans went to
big banks, and cites Akron, o., as
one Of Hoover's little" towns, where
the First Central Trust Company,
of which Harvey Firestone Jr., was
a director, was authorized to borrow
$19,OOO,OOO.
Here" says Flynn, 'is what
actually happened. The R. F. C.
in those five months authorized
$642, 100000 in loans to 5000 banks.
But 1851 900 600 of this sum, or more
than 40 per cent, went to banks in
just seven large cities. Chicago
alone got $1O5,00O,0OO; San Fran
cisco, $65,OOO,OO0; Cleveland, $27,-
OOO 900"
Flynn lists other loan authorize
lions as follows $12,27200 to the
Guardian Trust Company of Cleve-
land, of which AtleSs Pomerene.
now R. F. G. chairman, was a di-
rector; $7,402,345 to the Baltimore
Trust Company, of which Republi-
can Senator Goldsborough was vice
chairman; $14,000,00O to Union Trust
Company of Cleveland, of which
Joseph R. Mutt, Republican party
treasurer, was chairman of the board
up to June Is; $12,983, 900 to the
Union Guardian Trust Company,
Detroit, of which Roy D. Chaplin,
now secretary of commerce, was a
director.
Big Railroads Benefit
Analysing the railroad loans made
by the R. F. c., Flynn asserts that
$156, 100000 of 1854 100000 went to
roads controlled by three groups,
the MorganS, the Van Sweringens,
and the Pennsylvania railroad. Of
sample" $187OOO,O 900 of the rail-
road loans traced to their final pay
ment, Flynn finds only $50, O0O, 900
actually loaned to pay interest or
maturities on bonds held by in
surance companies and savings
banks-which were supposed to
benefit from the R. F. c. loans.
One large fire insurance company,
the Globe and Rutgers, got $70OO,-
900, and Flynn. recalls that it was
the head of this company, E. G.
Jameson, was "the big-hearted
patriot who handed out $4,000 to
Bishop Cannon in 1923 to carry Vir-
ginia for Hoover and the Lord"
The lesson of all this, according
to Flynn, is that governmental
secrecy is a dangerous thing, and
that the veil of secrecy should be
lifted from the R. F. C.'s early
operations.
Those who supply the funds for
governments and the blood for wars
have right to know what is being
done with their money and their
lives" he says