Evening star., 1932-04-05
Declares Congress May Re-
sort to Currency Initiation
for Protection.
MISSOURI PACIFIC LOAN
OF S12,SOO,O00 CITED
Finance Corporation Advance Was
Moral Violation of Terms
of Act, He Says.

The powerful banking interests" OF
the country received sharp warning
today from Senator Capper, Republican.
OF Kansas, that Congress might re-
sort to currency imitation as a means
OF compelling them to cease "nisusinp"
present relief legislation to "nrotect
their own position
He charged that the big financial
institutions, working through the Re
construction Finance Corporation. had
deceived" Congress and BETRAYED" the
country.
senator Capper, a recognized ad-
mInlstratlon supporter, took the bank
ers 10 task IN radio address broad
cast over the Columbia System TODAY.
Cites Missouri Pacific Loan.
He said he had particular reference
to the $l2,800,000 loan by the Finance
corporation to the Missouri Pacific
railroad, which was used to pay one
nan OF the roads bank loans, matur-
ing last Friday.
Nearly one-half of this loan went In
three financial institutions, internationsi al
bankers, in fact-Morgan g. Co, Kuhn.
Loeb q Co. and the Guaranty Trllsf
20, Senator Capper said.
mat banking loan by the big finan-
ciaI institutions was made at a time
When the dollars purchasing power was
nlucn lower than it is today. In other
WORDS, the Finance Corporation reached
INTO the Federal Treasury and gave
these banking firms dollars worth at
least 80 per cent more in purchasing
power than the dollars they loaned the
Isnroad in the first place. This in ad-
dition to the interest they received.
I say the loan was unjustihed, con-
trary TO public policy and a moral vio-
iatlon OF the terms Of the Reconstruc-
ton Finance Corporation act"
Senator Capper said the purpose of
this act and other relief measures was
to ALLOW q reasonable imitation of the
currency to raise basic commodity
prices"
Charges Bank Hoarding.
Apparently the big financial insti-
tutions are only using the acts to pro-
tect their own position" the Senator
continued. They take money from
the Federal Treasury and pay of their
own loans with that money. It was
also expected that money being boarded
would come out Of boarding. Well,
individuals have responded to the ef-
fort but apparently the big bankers
have not. They are taking Treasury
money to pay of their own OBLIGATIONS
and still boarding their own deposits.
Now I am not an alaru1ist, nor a
Red, nor an enemy of business. Nor
am I an advocate Of cheap money.
But 1t Is only fair to call the atten-
ton Of the country to the fact that
under the Constitution the Congress has
the power to initiate the currency If it
desires. L financial institutions and
leaders should thwart the desires Of
Congress and the country for reason
able currency imitation, so that debtors
and taxpayers can pay interest and
taxes in dollars somewhere near the
purchasing value of the dollars of three
years ago-if finance insists upon using
the remedial measures already enacted
to enrich the big banking interests from
The public treasury, and continue the
defiation of agriculture, labor and in
dustry-Congress still has some power
1t can exercise"
Senator Capper then pointed out
that there is pending in the House the
Patman bill for payment of soldiers
bonus certificates. This, he said, 4
would put $4,000, 100000 in circulatigd,
and cheaper the dollar, perhaps, too
much
He said, however, that it would not
surprise him in the least to see the Pat
man bill, or some similar measure, pass
both Houses of Congress if financial
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