Evening star., 1932-07-10
NEW RELIEF BILL
MAY Be TAKEN Up
Would Create Exchange Cor
poration and $500 to $500
for JobIeSs Family Heads.

The new relief bill recently intro
duced in Congress by Senator Costigan,
Democrat, of Colorado, and Represent
ative La Guardia, Republican, of New
York, designed to provide emergency
financing facilities for unemployed
workers, may be given further consider
alton before the present session ends.
AS explained by Donald R. Richberg,
who took part in preparation of it, the
measure would provide Immediately a
purchasing power of from $500 to $500
to unemployed heads of families to
cover the necessities of life for the next
six months.
Costigan, chairman of the Senate
Subcommittee to which the bill was re-
ferred, was considering yesterday
whether further hearings would be held,
but definite time was not announced.
According to Richberg, who is counsel
for the Railway Labor Executives As
sociation, the bill is not the product of
any one individual organization, but
represents study by many economists
lawyers, bankers, civic and industrial
organizations.
For Exchange Corporation.
The measure would create a United
States Exchange Corporation, similar in
function to the Reconstruction Finance
Corporation, but having for its purpose
putting credit behind purchasing power
instead of behind productive power.
The first task of the corporation
would be to make, within 80 days,
survey of the existing demands upon
essential industries for the necessities of
life which are not beng satisfied be-
cause Of lack of purchasing power
This would be done in order to deter
mine the character and volume Of
purchases which would result from es-
tablishing a credit of $500 each for I'M
employed heads of households and the
maximum increases OF employment
which could be produced in response to
such purchasing power.
As explained by Mr. Richberg, the
bill provides that, on the basis Of this
survey, the corporation would arrange
through local agencies to extend credits
to cover six months necessary pur-
chases for unemployed heads of house
holds in amounts not exceeding $500
for an individual. plus 500 for each de-
pendent, but not exceeding a total OF
$500 for each household
Credit would be extended to appli-
cants signing notes for repayment on
or before 10 years after date, with low
but increasing rate of interest," per
cent the first year. 2 per cent the Sec
ond year, per cent the third year and
4 per cent thereaftr.
Certificates of Credit.
Payments would be made for goods by
such notes accompanied by correspond
ing credit certificates signed by local
agents Of the exchange corporation.
The credits would be allotted to States
either in accordance with population or
the need for relief If the total re-
quests for credit exceed $4,000, 600 900,
reductions in amounts allotted to the
States would be made proportionately.
Borrowers employed during the life OF
the exchange corporation would agree,
and their employers would be required,
to deduct 10 per cent of wages to be
paid to the corporation until the notes
have been satisfied
The bill defines conditions under
which credits to meet charitable relief
needs could be extended to State or
municipal relief agencies. The bill would
authorize the exchange corporation TO
issue notes, debentures and bonds to the
amount of not more than five times its
initial capital of $500 ,000, 900, thus pro-
viding total revolving fund of approx
mately S3,000,000,000.