Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-03-25
RAIL LOAN PASSED
WITH RELUCTANCE
|. c. C. Questions Wisdom of
Large Credit for Mis-
souri, Pacific.
BY the Associated Press.

BY the Associated Press.
The Reconstruction Finance Corpora
ton has caused the Interstate Com
merce Commission to approve, with
some reluctance" an additional loan OF
$12.8o000 to the Missouri Pacific Rail-
road Co.
The approval will take care Of, among
other things, half of a loan of ST., 700,-
600 held by the New York banks, which
j. p. Morgan & Co. had notified the
carrier must be paid on April /. Later
however, the banks agreed to carry hall
the loan until October ! and the board
of directors of the Finance Corporation
voted loan of $3.50, 900 for this pur-
pose, subject to approval Of the COM
mission.
The commissions decision recited in
full the resolution of the Finance Cor
poration.
Unconvinced on Policy.
I'VE are taking the action here with
some reluctance" said the commission
I'VE are not convinced that the Recon-
struction Finance Corporation should
be expected to take up banks loans of
this character.
we yield our own views to those OF
law. Is charged by Congress with
responsibility for determining the
question"
The Finance Corporation resolution
was adopted March Is, the same day
on which President Hoover called
Balthaser H. Meyer, chairman of the
finance division of the Interstate Com
merce Commission; Charles @. Dawes
president of the Reconstruction Corpo-
ration, and other Government financial
experts, and Is leading railroad execu-
tives into conference.
After stating that "in the opinion q
this board all existing uncertainty as tt
the disposition of the April maturitie.
of the Missouri Pacific Railroad Co. /!
detrimental to the general credit situa.
ton OF the railroads" the corporation
sesolution said:
Conditions Outlined.
Resolved, That subject to the ap-
proval Of the Interstate Commerce
Commission this board authorize loan
to the Missouri Pacific Railroad Co. to
the extent Of $3.50, 900, which amount
is so per cent Of said railroad COM
panys bank loans maturing April /,
1892, on condition that the holders of
the balance Of said bank loans agree
to an extension of the payment Of said
balance of $5,85O,0o0 to a date not
earlier than October /, 1892, and on
further condition that there is de-
livered to this corporation as collateral
security for said loan one half of the
collateral now held as security for said
Sill 100000 Of bank loans and such ad-
ditional security, if any, as may be
recommended by the Interstate Com
merce Commission or as to this boarc
may hereinafter seem advisable; and b,
/ it further
Resolved, That the secretary of thi.
corporation be directed to forward {
| copy of this resolution to the Interstate
| Commerce Commission"
| Although j P. Morgan g. Co. wa
named by the Missouri Pacific in cor
| reSpondence with the commission a.
having spoken for the holders of tn,
bank loans the decision disclosed tina
they were held jointly by j. P. Morgan
& Co., Kuhn, Loeb & Co. and tn,
Guaranty Trust Co. of New York
The bankers who hold the loans ar,
bankers for the carrier" said the com
mission in commenting las such the,
have prof1ted largely In handling 1t!
financing in the past.
Point to Past Profits.
ut is often represented to us tina
the relation Of banker to railroad
is very valuable to it because of tn,
banking assistance so rendered avail
able in time Of stress, that a railroad
can afford to compensate It's banker
| Continued on Page s. Column IL