Evening star., 1932-08-05
Detroit Granted 100000
as $10,000,o0O PennsyI.
vania Plea Is Denied.
OHIO GETS 1852, ,662,
ILLINOIS $3,000,000
Chairman Pomerene Explains Rigid
Policy Requiring Emergency
Demand for Aid.
BY the Associated Press.

BY the Associated Press.
The Reconstruction Finance Corpora-
ton is showing anything but free-hand-
ednes5 in administering the $500, 900. 900
voted by Congress for direct relief in
the States.
1t sticks to the position that the
Federal fund should be used only to
supplement all possible State and local
aid. On this premise. it turned down
Gov. Pinchot's request for $4,000, 900
fer Pennsylvania.
But the corporation has granted three
loans, satisfied as to the urgency of the
need and with the recapitulation OF
money already spent, and likely will
approve more
1t allowed Illinois $4,000, 900 on a
showing that Sl8, 8,750 900 Of relief bonds
mad been sold and spent and that re-
lief agencies in the State soon would
have to close without Federal aid. Ohio
got S052,662 for use in four counties
and only yesterday sl,80O,000 was ad-
vanced to Detroit for emergency needs
pending further development Of local
programs.
Available Immediately.
In each instance, the money was
made available '1mmediately'-mea
ing that the borrowers could get it
within two or three days, as soon as
necessary routine as completed.
The corporation reiterated its an
Eounced policy when it said, anent the
Pennsylvania application, that the
Legislature OF Pennsylvania and its
several subdivisions have not done their
full duty with respect to the furnishing
Of funds for relief purposes
The statement by Chairman Pom
creme said corporation directors would
delay further action until we know
what the Legislature will do for the
relief of its own people"
In making the first loan-that TO
1llinoiS-the board announced that
the corporation will expect all States
to meet their needs to the greatest ex-
tent possible from their public and pri-
vate sources and call upon the corpo-
ration only as a last resort to sup
plement their own efforts"
The money provided would not be
sufficient to meet the situation other
wise, it was added
The corporation has not yet made
known the procedure under which
other than the destitution relief loans
are to be made. This still is being
worked on
The law requires that all destitution
loans must be made TO the Governors
of the States This oflcial can bor-
row for any given city or other polit-
ical subdivision and the officers of the
cities or subdivisions can sign the
notes The Governors signature also,
however. is required.
Advances of Last Six Months.
For the last six months the corpora
ton has been advancing money to
banks and railroads This work still
IS going on although not at the earlier
speed.
The last available figure showed
loans of $542. 1881 to banks; $52,-
484, ,923 to building and loan associa-
tions; S63 ,465, 500 to insurance COM
panies; 1922 ,440 to agricultural credit
corporations; S1,270,000 to joint stock
land banks; S6,594,586 to live stock
credit corporations; $73,600000 to
mortgage loan companies; S405,000,000
to credit unions, and $2l3,882,7 ,724 to
railroads.
The loan to Detroit was made at the
request of the Governor Of Michigan.
The amount is made available to the
city CT Detroit at this time" the cor
poration said, ito enable the city to
meet the immediate emergency and to
give time for the development Of fur
ther State and municipal relief plans"
The statement said supporting data
accompanying the application indicated
the city was unable to dispose Of ST.
800 900 of a $4,000, 900 bond issue for
welfare purposes and that it would be
impossible for the State to act in time
to meet the emergency.
The Public Welfare Department was
described as operating on credit since
last March and having S2,650,O0O Of
unpaid bills.
View on Pennsylvania.
In rejecting the Pennsylvania appli-
cation, Chairman Pomerene said.
1T is our belief that on proper show
ing we should extend some relief to the
State of Pennsylvania, but 1t must be
borne in mind that we have funds in
trusted to our board which are to be
expended, not in lieu of State or local
relief, but to be supplemental thereto,
if, when and as necessary.
After full hearing we feel per-
suaded that the Legislature of Penn
sylvania and its several political sub
divisions have not done their full duty
with respect to furnishing funds for re-
lief purposes"
The boards decision came after a
conference with Pinchot, three CT his
cabinet officers and six members of the
State Legislature. They joined the
Governor in asking an immediate loan
OF Sl0,O00,000 and a sum ultimately to
total $4,000 900.
S35,GOO,000 LOAN ASKED.