Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-01-10
KENT PLAN TOAD
TRADE IS OUTLINED
Proposal Made by R. F. c,
President Would Step Up
Output to 1927 Level.
BY the Associated Press.


NEW YORK, January 10.-The Fred
T.. Kent plan for economic recovery, de-
scribed yesterday in Washington by c.
A. Miller, president of the Reconstruct
ton Finance Corporation, as one that
comes nearest to solution" of present
conditions, calls for resumption of In
dustrial operations on the scale pre-
vailing in 1927.
ANY losses that might be sustained
by industry in stepping up production
to 1927 levels would be met by the
Federal Government.
The plan, as outlined in a report OF
the Commerce and Marine Commission
of the American Bankers Association.
of which Kent was chairman, would be
prosecuted through the r. F. c., with
banks throughout the country acting as
agents.
The individual banks would canvass
their industrial clients for information
as to how much money they would need
to resume operation on 1927 scale,
how many workers would be re-em-
ployed, how much more raw material
would be purchased. and the character
and quantity Of the increased pro-
duction.
Data Co-ordinated by r. F. C.
This information would be co-ordin-
ated, through the Federal Reserve
banks, by the Reconstruction Corpora
ton. Armed with the data, which
would give it composite picture of
industrial conditions throughout the
country, the corporation then would
decide whether to proceed with the plan.
II 1t were deemed advisable to do So
and II authority, were obtained from
Congress, the corporation would proceed
to direct the banks to make loans to
their industrial clients, with a guar
antee against loss. flor such proportion
OF the loan as was not covered by the
sale OF the increased production"
Each loan made would carry an
agreement on the part Of the borrower"
the report said, ito employ a certain
specified number of additional men. to
buy raw materials necessary to produce
It's regular products and to pay the
loan at maturity, provided such prod
uctS were sold at prices sufficient to
cover the cost. Further. that in lieu
OF the insurance to the industry carried
IN the guarantee of the Reconstruction
Finance Corporation, the borrower
would pay the corporation so per cent
OF any profits that his company might
make through the sale of the pro-
Before any loan was undertaken the
metnoo OF accounting would be agreed
upon between the industry and its
banks acting under instructions from
the corporation. This would be FEAST
pie as was proved during the war when
tne Government made arrangements to
pay cost plus for production. The
banks would, from this business. receive
paper eligible for rediscount with the
Federal Reserve Banks. Consequently
1t Is scarcely to be expected that the
corporation would be compelled to adj
vance any funds except in a very small
way In special cases"
Markets Necessary, -
The plan Is predicated on the theory
that industry cannot be expected to
employ men more nearly to its capacity.
BUY raw materials and process goods
unless 1t has confidence in its ability to
find markets for its production" -. :
The one thing, therefore. required to
set the wheels Of industry In motion, -
the report said. sis confidence that
there will be markets"
The report said buyer confidence
would be restored by the re-employ-
ment Of men now idle. Declaring that
II the plan were put in operation men
would be positively employed in pro-
duction throughout the United States"
the report said this would have the
following effects:
Greater expenditure on their part
than II they were receiving doles: in
creastng confidence on the part of the
people because their friends and neigh
bors who had been out of work were
being ~re-employed (this would stirnu-
late their own consumption); allevia-
ton OF the unrest which results in the
development of unfortunate political
forces leading to unsound legislation"
Increased production would stimulate
transportation and employment in the
raw material fields, the report con-
tinued. adding:
The progression of operations under
the plan represents conditions under a
natural return from depression
wherein the confidence Of this, that
and the other industry in its ability to
md markets Is justified, and produc-
tion and business begin to work toward
normal conditions"
Inc plan, described as having been
approved by 831a per cent Of the hun
dreds OF industrialists who examined 1t.
was presented "as one that should not
be carried out unless the only alterna-
tive should be the dole" Its purpose.
however, the report said, was to re-
establish industry in a way that would
result In the least possible cost to Gov
eminent and leave no scar Of legisla-
ton after its need was over
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