The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-07-09
URGE BILL FOR
u. S. LOANS To
FAMILY HEADS
Costigan Measure Backers
Seek Substitution for
4 Relief Report.
BY RUTH FINNEY
Times stan Writer

senate Democratic ranks badly di-
vided as to approval of the relief
conference report, including the
Garner plan for unlimited govern
ment loans, an attempt may be
made at caucus today to enlist
support for the Costigan relief bill
as substitute.
Immediate study of this measure
will be urged as a solution Of the
vexing problems still standing be-
tween congress and adjournment,
including the various forms of re-
| lief proposed and the bonus issue.
While the bill has been pending
before the senate only a short time,
and its provisions are not widely
known, its sponsors believe consid-
Grafton OF it now will expedite
rather than delay adjournment.
They may suggest a short recess
of congress, to enable committees to
scrutinize the bill for action later
in the summer, rather than pro-
tracted debate on the conference re-
port, supported by Speaker John N.
Garner and so Objectionable to part
of the senate and to President
Hoover.
Loans Direct to~Needy
Such a course is being strongly
urged by the railroad labor organ
izations which originated the bill.
The Costigan plan proposes gov
eminent loans direct to needy heads
of families, rather than to corpora
tons and individuals employing
workers.
However, it provides for credit in
the form of food or clothing rather
than cash, to be secured by individ-
ual notes, and assignment OF 10 per
cent of future salaries,
Donald Richberg, attorney for
the railway labor executives assc-
citation, explains the proposal, now
before the senate manufacturers
committee, as follows;
I'VE have seen the difficulty of
financing new employment to create
purchasing power. This bill before
you reverses the process. 1t proposes
/ to finance new purchasing power,
and thereby to create new employ
ment.
Credit Up to $500
"It creates a United States Elk
change Corporation designed to put
credit behind purchasing power in
stead of behind production. The
secretaries of commerce and labor
will be members of the board of di-
rectors with six other directors APP
pointed by the President, and an adj
visory council representing the diff
ferent economic interests of the
country.
1.-THE corporation will give credit
to unemployed persons, not exceed
ing $500 to family. with which to
purchase the necessities Of life for
the next six months.
Persons getting this credit sign
notes promising to pay it on or be-
fore ten years, and assigned 10 per
cent of their wages when employed
to apply on the loan.
mo loans are made for anything
but necessities and these can be
bought only from agencies which
will accept the credit certificates of
the corporation at faceavalue.
How It Would Work
Suppose the bill becomes law, the
machinery is set up, and John
Smith, with wife and three chill
dren but no job, wishes to get his
$500 credit.
First, he goes to the local agency
and establishes himself as a mar
ried man with three children en-
titled to credit. Then he fills out
the budget forms showing what he
needs for the next six months.
Next, he is given credit certif1-
Gates for the required amount and
blank notes. The note authorizes
Johns employer, if he gets a job, to
pay 10 per cent of his wages to the
United States Exchange Corpora
ton.
Armed with credit certificates,
budget form and notes, John goes to
the grocery store and buys his sup
plies. He fills in a note for the
amount needed, and pays his bill
with this and credit certificates to !
the same amount.
Risk Taken Is Small
''The retail grocer who has filled |
Johns order pays his own bill to
the wholesaler with the same GER
tif1cateS and notes. The wholesaler, I
when he has accumulated enough |
of these, turns them in to the local |
branch of the exchange corpora
-tion. and receives in return the |
same value in bonds of that cor
poration which, of course, practi- |
cally are government bonds.
ITO put it in nutshell, Uncle
Sam indorses John Smiths note.
The dealer risks nothing. The risk
Uncle Sam takes is small, and well
worth taking.
Payment in full by 800 900 rail-
road workers waiting call is prac-
tically certain, and also by the I'M
paid teachers of Chicago and other
cities.
| llen tl6re are the veterans |
with their adjusted compensation
certificates due at future date. |
With them it is practically a mat
ter of cashing these certificates.
Defaults can not possibly reach |
the amount we will have to pay in
direct relief if something like this
is not done.
MY firm conviction is that we
shall lose less under this plan than
on Reconstruction Finance Cor
poration loans"
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