The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-12-24
One Half of One Per Cent
Slash Expected to
Help Business.
HUNT MORE REDUCTIONS
Future Policy of More Lib
eraIity on Building
Projects Seen.
BY LEO R. SACK
Times STAFF Writer

WASHINGTON, Dec. 24.-The
Reconstruction Finance Corporation
today presented two Christmas gifts
to the American people.
l. 1t reduced interest rates on all
classes of loans one-half of l per
cent.
2. It agreed upon future policy
of more llberality in authorization
Of Self-liquidating loans.
The reduced interest rate prob
ably will be the forerunner of other
reductions within the next feV
months, and it paves the way for q
future policy whereby rates on self
liquidating projects will be revised
downward as financial conditions
justify
The R. F. G. agreed upon the two
new polices in the hope of stimu-
lating a business revival and of
putting more punch into the recon-
struction drive which was supposed
to follow the establishment of the
ST 300, 900, 900 fund for self liquidat-
ing construction purposes.
Cut All Loans Interest
Formal announcement OF the
lowered rates, which officials hope
will Offset the criticism that R. F. C.
interest rates are too high, may be
made today. The policy was agreed
upon after prolonged discussions be-
tween directors and with business
men and officials outside of the cor
poration.
Existing rates now vary from 3
per cent for state relief loans to 6
per cent. Closed banks pay 5 per
cent; operating banks 512 per cent:
state, municipal and private self
liquidating projects 6 per cent, and
railroad and assurances companies
6 per cent.
The one-half of / per cent reduc-
ton means an annual saving of
$4,000, 900 to present R. F. C. Dor
rowerS, and the corporation believes
1t Will stimulate new borrowings for
construction purposes.
Loans to Be LiberaIized
The determination to liberalize
construction loans results from con-
1erences of the directors following
a dinner conference between Direc-
tor Harvey c. Couch, in charge of
the Self-liquidating division, and
Senators Robert F. Wagner IN. Yo
and Robert La Toilette (Wis.).
Both senators have been critical
Of the policies of the r. F. C. and
both feel that the directors have
STUCK too close to the letter of the
law IN authorizing loans.
They feel that the corpora ton
has been too conservative. and as a
result has not executed the will OF
congress when it authorized
81 300 100000 last spring as a means
OF breaking the depression.
Couch Disappointed, Too
Couch told the senators that he.
too, is disappointed with results ac-
complished heretofore, but he felt
that the corporation has been re-
strlcted by the letter of the law,
which clearly defines that self
liquidation means just that.
This has restricted the class of
applications upon which the cor
poration can act, with the result
that only s145, 1863 500 has been
loaned, a sum, according to Couch,
that merely scratches the sur
face"
Before leaving for Arkansas to
spend the Christmas vacation, Mr..
Couch ordered an extensive investi-
cation of prospective loans in all
parts of the country, not only for
bridges and public works, but for
public markets, housing develop
mentS, schools, stadiums and other
worthy projects which will fill a
community and sectional need.