Evening star., 1932-01-24
S125,o]0,o)D READY
FOR BUSINESS AID
Hoover Signs Bank Measure
as House Passes $500, ,000,-
600 Reconstruction Bill.

worked with President Hoover yesterday
to put the new Reconstruction Finance
Corporation into operation within a
week or 10 days.
With virtually unpreced 2nted dis
patch, the House voted without debate
to appropriate the initial S500,0O0ooo
for the collosal credit expansion agency.
The President signed legislation .ex-
panding the capital of Federal Farm
Land banks by $l25,0Oo 900, the third
step in his business relief program, and
came to an understanding with Demo-
cratic leaders on two of the three mem
berS VINO remain to be appointed direc-
tors Of the Reconstruction Corporation.
Since the Senate was not in session
and therefore unable to confirm the
aprointiVe directors or concur in the
basic appropriation, Mr.. Hoover de-
ferred his appointments until tomorrow.
Suggestions and assurances Of support
came to him from all parts of the coun
try, it was said, and the projected estab-
lishment of a large new Government
agency brought thousands Of appliCa
tions for jobs, both in person and by
letter, and also many volunteers from
high places in the business world.
Should Reassure Investors.
The President. upon signing the
Federal Farm Land Bank bill, said
Il am glad to sign the third of our
reconstruction measures-that provid-
ing additional capital to the Federal
Land Banks 1t should (a) reinforce
the credit of the Federal Farm Land
Bank system and reaSsure investors in
Land Bank bonds; (b) thus enable the
banks to obtain capital for farmers at
reasonable rates; and Co above all
bring relief and hope 20 many bor-
roWerS from the banks VINO have done
their honest best, but because of cir
cumstances beyond their control have
been unable temporarily to make the
grade"
The President lists the intergovern-
mental debt moratorium ratification
and the Reconstruction Corporation
act as the first two steps in his relief
program.
No time was lost i'll recruiting the
large organization that will be required
for the business of directing new credit
into trade channels. Subject to the
approval Of the full board, Gen. Charles
G. Dawes president, and Eugene Meyer,
chairman Of the board of the corpora
blOIl, OSHbdGlfely NlJIl u VIEW
to taking so much as possible of the
organization from the old War Finance
Corporation. The two officials were in
conference much of yesterday with each
other and with Andrew W. Mellon,
Secretary of the Treasury, and Ogden
L. Mills, Undersecretary OF the Treasury.
Confers with Democrats.
In line with his statement that he
would consult Democratic leaders on
the selection. of the three Democratic
members of the Reconstruction Board
of seven, the President considered a list
Of Is possibilities, with Senator Joseph
T. Robinson of Arkansas. Democratic
leader of the Senate; Speaker John N.
Garner of Texas, and Senator Carter
Glass, Democrat of Virginia, one time
Secretary of the Treasury.
While the conferees would divulge few
details of the meeting at the White
House and the Presidents tentative Sc
lections were unannounced, Jesse H.
Jones of Houston, Tex, one time flnan-
cisl secretary of the Democratic Ma
tional Committee, was believed to head
the list.
Bernard M. Baruch of New York
one-time head of the War Industries
Board, who had been prominently men
toned to. head the new corporation,
eliminated himself. At the same time
he pledged whole-hearted support for
the project and was quoted as having
said yesterday that tine opportunities
for good are absolutely unlimited If the
plan is wisely administered and cou-
pied with balancing Of the budget"
Baruch Supports Hoover.
Mr.. Baruch, an outstanding leader of
end contributor to the Democratic party,
was represented to be standing with
President Hoover in resisting all inter
pretations of the Reconstruction Cor
poration plan as inflationary Leaders
took the stand that there was a vast
difference between the European infla-
ton through currency expansion and
shrinking of the gold standard and the
present American plan toeexpand credit
by advancing funds to established in
stitutions unable to get adequate credit
from banks under present conditions.
II was maintained that credit wisely
distributed should be capable of recon-
Cling the present oversupply of crops
and production with the fact that many
citizens are hungry and homeless.
Restricted by law to making loans
"fully and adequately secured. to inter
state railroads, banks, trust companies,
building and loan associations, insur-
&IlCB CDIlDdllltS, li1OA IEhBN 'So'A SCA''f1
nies. credit unions, Federal land banks,
Joint stock land banks, Federal inter
mediate credit banks, agricultural credit
corporations and live stock credit cor
porations the corporation, If responsive
to the administration plans, will help
only such as are able to help them
selves It will not waste its resources
on projects that seem hopelesSly GRIP
pied, though undoubtedly prepared 70
lake longer chances than do the average
banks.
Expansion Hoped For.
IT is hoped that eligible institutions
with more liberal credit will be en-
couraged to expand their operations
and thus stimulate business. 1t is q
gigantic attempt to drive away the
fear Of tighter money, and to inspire
the confidence which is necessary 70
break the contraction Of credit which
is retarding industry.
Under the new law. the Finance Cor
roration has authority to inspect any
confdential information in possession
of the Government, such as income tar
returns, concerning applicants for
loans. Applicants must also produce
any information and records about
their business which the corporation
REQUESTS. Oficials Of the corporation
are bound by law to keep names OF
all applicants and borrowers secret, not
to pass on any loans concerning bust
ness in which they are even indirectly
Interested and are under penalties not
to use anv information obtained fol
purposes Of speculation or other per,
soral profit. Otherwise they have the
bYoe dest discretion in deciding whether
to make loans or not. There is nC
opY,col frorn their decision.
The corporation's operations will bt
started with the $500. 900 900 Fedora
appropriation. Although empowered t
ouadruple this amount by issuing bond'
and other securities, guaranteed by thu
Government, the corporation is expected
to raise the additional money. by salt
of such securities to the public, onl!
II and as needed.