Evening star., 1933-01-24

GOVERNMENT LOAN
ACCOUNT IS LARGE
Extension of Credits Through
R. F. c. During Past
Year Is Reviewed.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, January 24-The ex-
tent to which the Government, either
directly or through the Reconstruction
Finance Corporation, has been absorb
ing the credit requirements Of private
borrowers in the past year Is indicated
In the figures Of public loans authorized
during 1882 and now compiled in detail.
The total Of such loans made to cor-
porations and foreign governments, as
we'll as to municipalities and to farm
loan agencies, amounted to $1,72l, ,392.-
656 last year. In 1891 the same bor-
rowers received over $4,000, ,0oo, 900, in
1880 total loans were $7,677, 900, 900, in
the boom year of 1929 they exceeded
$11, SOC, 100000, and in 1928 were ap-
proximately 10000, ,000, 900.
Money Market Competition
The competition In the money market
between the Government and private
corporations has been one reason for
the sharp decrease in the offerings OF
new corporation securities in the past
IL months. Treasury loans. both Of
short and moderate term maturities.
have absorbed much Of the idle capital
available for reinvestment. On the
other hand the credit position of the
corporations and municipalities that
have been compelled to borrow has been
Of such q quality that they could not
sell their securities in the open market.
To them, and to financial institutions,
the Reconstruction Finance Corpora
ton has rendered accommodations In
the amount Of approximately $780,
C00,000.
AS an illustration of the difference
between borrowing from the Recon-
struction Finance Corporation and di-
rectly from the public, let US take the
case of the railroads. More than 100
loans have been made to them by the
Reconstruction Finance Corporation,
aggregating 1895 100000. They have
received additional amounts from the
Railroad Credit Corporation. To these
sums must be added $357 900 900 which
the railroads in the last year have been
granted in the form of private loans by
their bankers. In the same IL months
their issues Of long and short term
bonds and notes publicly offered
amounted to only $6l ,00o, 900. There
were no sales of stock.
Had 1t not been for the public utili-
ties there would have been only a
nominal amount of new capital pub
licly placed last year. The power and
light companies were responsible for
nearly IS per cent Of all Of the corpora
ton financing the sum Of which was
less than s645 900 900. In 1929 invest
ment trusts issued s2,223000,000 of
stock, while the total amount of such
stock in 1881 and in 1882 was less than
$6,O00,000 Industrial and manufac-
turing companies three years ago
f1oated securities Of q par value Of ST.
$1,000, 900 and about half that amount
in 1890, but were only able to sell
publicly in 1882 a total Of $4,000, 900
in bonds and stocks.
Loans to Cities
There has not been the same ratio
of decline in foreign government, mu-
nicipal and farm loan issues as in those
of corporations, as their securities have
had better public reception. Although
the Reconstruction Finance Corporation
last year advanced nearly 100000, 900
to municipalities, this group was able
to borrow publicly $40 900 900. or a
third less than In 1881 and little more
than half the amount in 1890. Farm
loan issues. however. brought out last
year were larger than in either of the
two previous years, while Canadian
government loans In 1882 were $685.
0O0,0 900 compared with $50 900 in
1881. There have been no other foreign
government loans than those to Canada
tcopyrisht. 1897