Evening star., 1932-08-30
R.E. c. STIMULUS
I TOLD BY JONES
Director Details Work oi
Body in National Radio
Forum Broadcast.
Icontinued From First Page.)

O--e--N OAAA
with the advice and consent Of the
Senate
Originally, the governor of the Fed
erRl Reserve Board and the farm loan
commissioner were also ex-officio mem
bers. but Congress amended the act,
eliminating these two.
THE directors took the oath CT Office
on February 2, and started work.
The first order of business was the
creation of a Nationwide organization
to make loans to meet emergencies. In
addition to the general Office i'll Wash
ington, the corporation has 80 agencies.
or branches, throughout the United
States.
In passing the act, Congress named
the Federal Reserve banks as fiscal
agents of the corporation. This was
wise provision for the reason that it
made available to the Reconstruction
Finance Corporation the facilities of
the Federal Reserve banks. which are
custodians of all notes, collateral and
securities on which the corporation
lends money, and the funds are all dis
bursed and repaid at and through these
Federal Reserve banks.
In most cases. the Reconstruction
Finance Corporation pays nominal
rent to these Federal Reserve banks.
Also, 1t has the benefit of the private
wire service of the Federal Reserve Sys-
tenn. This wire service and these IA
cilities enable the corporation to act
with more dispatch in meeting emer-
gency situations than otherwise would
be possible.
Proves Very Helpful.
while there is no affiliation, or joint
management, between the Reccnstruc-
ton Finance Corporation and the Fed
eral Reserve banks, this provision of
Congress has proven extremely helpful
to the corporation, as well as a source
OF economy to the Government
Each branch of the r. F. c. is in
charge of manager, employed and
paid by the corporation. In every in
stance the manager is aided by local
advisory committee composed of bank
ers and business men in the particular
locality. These committeeman are
named by the directors of the r. F. c.
and serve without compensation.
"An loans to banks, insurance COM
panies, mortgage loan companies, agri-
cultural credit corporations, live stock
associations, building and loan associ-
ations and joint stock land banks
are made at the agencies and the
collateral is held there and the money
disburSed and repaid there. Loans to
railroads, The farm loan banks and Fed
eral intermediate credit banks are made
at Washington
Applications for loans are made at
these branches. and after the manager
and his Advisory Committee make
thorough examination of the collateral
offered, and the purposes of the loan,
the application Is sent to washington
with a full description of the collateral,
together with an explanation concern
ing the reasons for the loan, the public
interest involved. etcetera.
"At Washington the application is re-
examined by special examiner and a
review committee. This examiner, and
the committee, acting separately review
all of the facts pertaining to the loan
and make their recommendations to the
directors of the corporation; So the ap-
plication comes to the board with the
recommendation of the local manager
and the Local Advisory Committee, OF
a special examiner at washington and
a review committee at washington, and
Is allowed or disallowed by the board.
In this way the directors are able to act
with fair degree of intelligence, both
as to the collateral offered and the pub
lie interest involved.
Approval Necessary.
"All applications for loans must be
approved by the legal department be-
fore the proceeds are disbursed, and, OF
course, all loans must be fully and ade-
uuately secured. This is provision OF
the law and not one of policy adopted
by the board.
while loans are granted for speci-
fed time, they may be repaid at the
convenience of the borrower with inter-
est to date of payment. No advance IN
terest is collected.
1T is the purpose of the corporation
and the genuine desire Of the directors
to provide credit. as far as 1t may DO SO
under the act, where credit Is neeoeo'
where a coed purpose can be served
men put to work and business and trade
stimulated; the objective being to aid
in reconstructing not only the general
economic conditions CT the country, but,
as far as possible, the state of mind OF
those who are in need of credit.
In my opinion, there has been too
much reluctance on the part of banks,
trust companies, insurance companies,
etc. to borrow for the purpose OF re-
lending, net alone from the Reconstruc-
ton Finance Corporation but from any
source Most banks have been en-
OCdNU1lllb W SNt do 3lAhAd 90 POoSA1AN'
some of them tco much so for the
general good. Financial institutions live
by lending money, and while it is not
my intention to criticize banking inSti-
tutionS or other money-lending agencies
for too conservative policy. Congress
created this great corporation to enable
them to help those who need to borrow.
Just before adjournment Congress
broadened the activities Of the corpora
ton so that more people and more in
stitutions could get credit and relief
through it, and while We are not per-
mitted to lend directly to individuals
specified in the act, we are making
credit available to many institutions
that in turn can lend to individuals and
industry in general.
Outlines Personnel.
II should like to say something about
the perSonnel-the men who are direct
ing the affairs of the corporation.
The board of directors as now con-
stituted includes Mr.. Ogden Mills, Sec
retary Of the Treasury, and, in his alb
sence, Mr.. Arthur A. Ballantine, Under
secretary of the Treasury; former Sena-
tor Atlee Pomerene of Ohio, chairman
Mr.. Charles A. Miller of New York,
PRESIDENT; Mr.. Gardner Cowles of Des
Moines, Iowa; Mr. Harvey Couch OF
Arkansas, Mr.. Wilson Mccarthy of Salt
Lake City and myself.
The board is very well diversified
geographically. politically, in professions
In experience and in temperament.
The managing force is composed oi
bankers and bank examiners. drawn
from both national and State banking
men experienced in live stock, agri'
culture and building and loan lending
railroad experts, attorneys and account
ants. They have been selected because
of their experience and their qualifica-
tions to fill the places they occupy anc
they are fairly representative of the bes
men in their various lines.
For the managing force would sa,
that, In 40 years Of business experience
I have never seen q body of men NOR,