Evening star., 1932-11-30
BANKING PRESSURE
0NR. T. c. RELIEVED
Chief Activities Shifting Now
to Loans of Self -Liqui-
dating Type.
BY CHARLES r. sPEARE.


Special Dispatch to the Star.
NEW YORK, November 80. - The
pressure on the Reconstruction Finance
Corporation for loans in behalf Of banks
and trust companies has been materially
relieved in the last few months. In its
place the last report of this Govern
ment agency indicates that It's activity
Is new more along the line of advancing
funds to -nquidating projects
In the balance sheet of the corpora
tion just published, as Of October 81
self-l -liqliidating loans, the proceeds Of
which have not yet been disbursed, are
set up as Sl34, 633,5o0. This amount
compares with 1901 662, ,926 for all loans
granted but not yet drawn on. Loans
actually checked out, less repayments
which approximate $500, 200, 900, aggre-
gate 81 .05e, ,663,192.
OF such loans the largest item. name
" s576,o10,o24, has been used in sus-
tanning the credit of the financial in
stitutions of the country. The next i'm
portant item is that of S24l, ,43l 1924
charged against the railroads. Then
there are such amounts as s79.024, ,585
to the building and loan associations;
about $56 1000, 600 for insurance COM
panies, $l4, 800, 900 for the Federal Land
Banks, $9,323,657 for live stock credit
corporations. $2,685,80l for agricultural
credit corporations and sl,421 ,242 for
joint stock land banks.
Pleas Later Withdrawn.
The largest repayments on loans ad-
vanced have been made by the banks
and trust companies: the smallest, in
proportion to the loans given by the
n ~ q hu fhn ,raif
able part Of the report of the corpora
tion for October Is taken up with tables
indicating loans to banks and trust
companies building and loan associations
and other institutions that, in emer-
gencies, made applications for loans to
the r. r. c. but were able to weather
the crisis on their own resources and
nave consequently withdrawn or can
celed al or part Of the aid that had
been granted them. A large portion of
the repayments by the banks and trust
companies have been made out Of the
liquidation Of securities and commercial
loans.
Among the -liquidating projects to
receive assistance from the r. r. C. in
October, the largest were for the pur-
pose OF bridge building. There were sew
eral OF considerable size in the South
west for irrigation purposes, while, nu-
merically, those identified with the de-
velopment OF water works held first
place. The rate of interest at which
the self-liquidating loans have been Sc
cured Is, In most cases, either 5 per
cent or per cent. Only two were pur-
chased by the r. r. c. at a discount.
These were the irrigation loans which
were bought at 80 for 5la per cent
issue and at the same price for one with
q per cent coupon.
Rate Is Maintained.
The rate of interest on a majority
OF the railroad loans Is still maintained
at 6 per cent, although two Of the car
riers-the Baltimore 6 Ohio and the
New York. New Haven 81 Hartford
Last month secured loans at per cent,
as the proceeds of these loans were to
be used in giving employment in the
repair OF equipment. Loans to States
are on 8 per cent interest basis.
There Is continued objection on the
part Of corporation borrowers, particu-
l7rlv to the rates charged by the
r. r. c., inasmuch as Government bor-
rowing to supply the funds for such
loans has been possible In the last six
months from 3h per cent to consider
ably lower figures. This week the Gov
eminent has been able 10 sell 91-day
bills on q discount basis equivalent to
an interest rate Of only o.13, with the
demand for this paper so great that the
S100, 10000 issue was twice covered
Interest earned by the r. F. C. since
its inception amounts to $12,874,026.
The balance sheet OF the r. r. c. on
october 81 shows. on the liability side,
capital stock of $500 000, 900 and $675.-
000. 600 In series A 3b per cent notes
The board Of directors of the cor
poration has now authorized the issu-
ance Of $1,000, 100000 3h per cent
notes, which cancel the original S675,-
600, 900 and leave margin of $685.
900 900, which will be purchased by the
Secretary Of the Treasury as the needs
Of the corporation compel the acquiring
OF additional funds.
(fyapvricht fQg9l