Evening star., 1932-02-14
The Biggest Bank in the World
BY FREDERIC J. HASKIN.

The biggest bank in the world has
opened its doors for business.
The Reconstruction Finance Corpo-
ration, sponsored by President Hoover,
has begun functioning almost before
the ink has dried on the presidential
, signature approving the organic act OF
| Congress which created it. II there Is
! such thing as pulmotor Tor the re-
vival of trade and industry this colos-
! sal experiment will demonstrate that
| fact. II the scheme does not work, the
| icea that any government can inf1u-
erce the trend of economic develop
ments will have received a severe set
| back. Government ownership and con-
troll will have been administered a de-
feat and private initiative will have
been indicated as the sole reliance of
a distressed people.
This, in brief, is the situation from
the point of view OF observers at Wash
ington who have seen many schemes,
both public and private. tried and fail.
Never before has any government
gone into peace-time adventure on SO
| tremendous a scale. The Congress has
provided for the incorporation of the
Reconstruction Finance Corporation,
with ultimate resources OF the unprece-
dented sum Of 100000, 900. This is
as much as the famous first Liberty
Loan, the largest single bond issue ever
! fioated by any government up to the
World War. The capital stock Of the
corporation has been fixed at $780,
100000. BY authority Of Congress the
Treasury of the United States has sub
scribed to the whole Of this stock and
made the money available to the Or
| ganiZation.
The whole theory Of the Reconstruc-
| tc hot fhnr
shall be sponsored and backed by the
force of the Federal Government itself
financial body SO powerful that busi-
ness timidity shall vanish. With no
private ends to serve, but designed to
dlspel the shadows of business doubt
and bring fresh confidence to harassed
bankers and business men, including
the farmers, it is expected that the
corporation will lubricate the wheels OF
industry and give that impetus, that
shove which the country needs.
Capital Instantly Available.
| The speed with which important
legislation has been enacted has been
! in itself, heartening gesture There
| has been very little partisan wrangling
over the creation of this huge mother
ing financial body. Half a billion in
cash. the amount of the corporations
ness is being done. In addition, the
law provides that the corporation may
raise an additional sum equal to three
times its capital for the purpose of
carrying out the terms of the act. This
will mean that an additional 81, $780,
900 900 will become available.
To raise this money the corporation
is authorized, with the approval of the
Secretary of the Treasury, to issue evi-
dences Of Indebtedness in the form Of
notes. bonds. debentures, or otherwise.
to run five years and be redeemable
earlier at the option Of the board OF
directors.
Some realization OF the magnitude
Of this peace-time operation may be
acquired from a recollection Of the
/ fact that when the War Finance Cor
poration was set up. as an emergency
measure. $500 900 600 was provided for
its revolving fund When the Govern
ment assumed control and operation OF
the entire transportation system OF the
United States, as another war measure,
$500 OO00 900 was provided for its re-
volving fund Now for peace-time re-
construction a sum equal to those two
vast funds combined. has been pro
vided-and then doubled. Two billion
dollars!
Only the first quarter of these re-