Evening star., 1932-07-11
Text of Veto Message
President States Reasons for Disappearing ''Emer-
gency Relief and Construction Act of 1882"
as Passed by Both Houses.

quately secured to discharge their loans
and to demand the money from the
Government through the Reconstruct
ton Corporation. The organization
would be constantly subjected to con-
spiracies and raids of predatory inter-
ests, individuals and private corpora
tions. Huge losses and great scandals
must inevitably result. 1t would mean
the squandering of hundreds Of millions
Of public funds to be ultimately borne
by the taxpayer.
Fifth. The bill provides only the
funds to the corporation which the
Senate with reason deemed the mini
mum necessary to aid construction prof.
ects and to cover loans to the States in
aid of distress. There is, therefore, no
provision in the bill for any sum Of
money for the purpose Of these miscel-
laneous loans. The corporation would
thereby be charged with duty impoS-
sible to carry out in practice with no
additional funds with which to make
loans unless the unemployment projects
and the loans to the States are aban-
doned or seriously curtailed and the
fundamental purpose of the legislation
defeated.
Sees Threat to Credit.
"Sixth-Under the new obligations
upon the Reconstruction Corporation
to finance the additional construc-
ton activities and loans to the
States IN addition to its present activ-
tiles, 1t will be necessary for the cor
poration to place over $4,000, ,000, 900 of
securities. 1t can place these securities
only because the credit of the United
States Is pledged to secure these obliga-
tions. To sell any such vast amount Of
securities at time like this is a diff
cult enough task. strong as is the credit
of the United States, without having
the credit of the Government under
mined by the character of use to which
it Is directed that these moneys should
be applied AS long as obligations of
the corporation are based on wholly
sound securities for SELF -liquidating pur-
poses, of which early repayment is as
Sured. there Is no burden upon the tax
payer. There is an assurance of a
Strengthening Of the economic situa-
tion. But If the funds of the corpora
tion are to be squandered by making
loans for the purpose here referred to,
it will be at once evident that the
credit Of the Government Is being mis-
used and it is not too much to say
that II such a measure should become
a law it further weakens the whole
economic situation by threatening the
credit of the United States Government
with grave consequences Of disaster to
our people.
Conclusion.
This proposal violates every sound
principle of public finance and of gov
ernment. Never before has SO danger
GUS a suggestion been seriously made
70 hnfO hoc cn
much power for evil been placed at
the unlimited discretion of seven in
dividuals.
In view of the short time left to
the Congress for consideration Of this
legislation and of the urgent need for
sound relief measures, the necessity Of
which I have on several occasions
urged upon the Congress, I recon-
mend that compromise should be
reached upon terms suggested by men,
bers Of both houses and both parties,
and that the Congress should not ad-
Journ until this is accomplished. Such
compromise proposal should embrace:
First: Title I of H. r. 12445, the
act now under consideration, covering
provisions for loans to States in amount
of $300,000000 for the care of distress
in States where needed.
NSSSAAo. AASAC 4A4 Va dSt, Will
the provision made applicable to all
parts of the title except for roads and
trails, that such works shall not be
initiated except on certificate of the
Secretary of the Treasury that the
funds necessary are available and can
be obtained without interferences with
the current financing operations of the
Government.
Third: That there should be sub
stituted for Title II the substance Of
the provisions in the substitute bill in
troduced by Senator Wagner and passed
by the Senate. or Senate bill 1922. in
troduced by Senator Barbour or Sec
ton 4 of the substitute bill introduced
by Representative Hawley. Among them
they provide not only loans for con-
struction work of projects of self
liluidating character, but also essential
aids to agriculture.
"Fourth-That the corporation be
authorized to increase it's issue of capi-
tai by 81 800 100000 for these purposes.
With the utmost seriousness I urge
the Congress to enact a(relief measure,
but I cannot approve the measure be-
fore me, fraught as it is with possi-
bilities of misfeasance and special priv
ileges, so impracticable of administra-
ton, so dangerous to public credit and
SO damaging to our whole conception
OF governmental relations to the people
as TO bring far more distress than it
will cure"