Evening star., 1932-08-23
House Committee Chairman
lnterprets Reaction of Ma
ton to New Policy.
DEPOSITORS' CONFIDENCE
DECLARED STRENGTHENED
Effect on Dawes Bank in Chicago
Held Illustrative of Peoples
Practical View.
By the Associated Press.

BY the Associated Press.
Chairman Steagall of the House
Banking Committee today expressed the
belief that publicity given loans to
banks by the Reconstruction Corpora
ton would in virtually all instances
have a beneficial effect on depositors
Of borrowing institutions.
The Alabama Democrat said that
many banks that have let it be known
that they have borrowed from the Re-
construction Corporation have re-estab-
ished themselves in public confidence"
Il have personal knowledge of bank
ing institutions making known that
they had secured loans from the Re-
construction Corporation and the reac-
tion has been favorable" he said. "The
publicity Of leans has had restorative
effect in most instances.
Chicago Case Cited.
"The most notable instance is that OF
Charles G. Dawes, former president of
the Reconstruction Corporation. When
his Chicago bank needed money he
rushed into print to advise the public
of the fact that the Reconstruction
Corporation had authorized a loan of
S85,000000. He wanted every depositor
to know that he could come and draw
out his money"
the Dawes bank had needed only about
a third of the amount Of the loan
authorized.
Loans to Sound Banks.
Where originally there had been fears
that this publicity-given by South
Trimble, clerk Of the House of Repre-
sentatives, under a clause in the new
relief law-would undermine conf
dence in the borrowing banks. there
was disposition to point out that
these banks had to be by requirement
of law, in fundamentally good condi-
ton.
From this point Of view, publication
of their Government borrowing could
be viewed as evidenced by the banks
stanchness.
Ready to Blame Democrats.
The administration, which had op-
posed the publicity, maintained a
watchful attitude, fully ready to blame
the Democratic control of the House
for the legislation If bad results should
follow.
The report given out yesterday, COW
ering the brief period from July 81,
when the relief bill became law, to
August /, showed 437 loans totaling
S45,057,5 $50, Of which $32 $50, 180 was
to banks A quick denial by the Bank
of American National Trust & Savings
Association at San Francisco that 1t
had received $3,800,000 listed as loan
made to it. drew attention to a dis
closure by the report that loans total
ing 1928 1892 599 have been authorized
but not drawn upon by the borrowers.
This figure Is for the entire period since
the corporation began functioning.
Banks Left Much Unused.
OF the total; banks and trust COM
panies were debited with $118,681, $40
which they had not found it necessary
to draw from the Reconstruction
Finance Corporation. The big Califor-
mia bank, through A. P. Giannini, chair
man of the board, said that since appli-
cation for the loan was made 'condi-
tions changed for the better and we
decided we did not need the money"
It appeared likely many other banks
had decidedly similarly. OF the re-
naming money undrawn much was
allotted to railroads, which receive it
only as needed for retirement Of bond
issues or expenditures for improvements.