Evening star., 1933-10-01

Treasury Is concerned, through 81
professors but passed on to all CO
Home owners Loan Corporation. the
Farm Credit Administration, the Agr1-
cultural Adjustment Administration.
The r. F. C.. however, goes far be-
yond these limits. 1t is the great credit
exuansion agency of the Government.
It has loaned hundreds Of millions OF
dollars to banks, to railroads, to lnSur-
ance companies. 1t Is prepared TO loan
money to manufacturers and retailers
to pay processing taxes levied by the
Government to aid agriculture. And.
Furthermore. it is prepared to loan the
banks a million dollars at per cent
interest with the understanding that
the banks will lend this money to en-
ployers to meet pay roll and other re-
ouirements under the N. R. A. codes,
and to aid in the expansion OF business.
The capital structure OF this benevo-
lent corporation is approximately S.
800 900 900. When the corporation
needs money to turn over to the bOr-
rowers it goes to the Federal Treasury,
gives it's notes for the required amount
and has the money transferred to the
/, borrower. The notes have back OF them
the securities. property or other assets
of the borrowers.
This R. F. c. has done tremendous
business. 1t had made cash advances
of S2.958, BAL .679 10 from the commence
ment of its operations, February 2,
1882, to September l of this year. Re
payments of loans have totaled S799.-
787619e5. The biggest slice went to
banks and trust companies. amounting
to more than $l,277 000, 900. and Incl
dentally. the largest repayments nave
been from the banks and trust COM
panies. totaling $3.50. .420, ,304. The rail-
roads were second largest class OF Dor
rowers from the R. F. c.. absorbing
more than 1881 900, 600. of which some
$50 ,O00, 900 has been repaid.
Interest on Loans.
When the Reconstruction Finance
Corporation gets money from the Treas
ury it paws interest thereon at the rate
of az per cent. The money is loaned
to the customers of the corporation Tor
VARYING rates of interest. but higher
rates than it pays the Treasury. For
, example. the R. F. c. has been charg-
ing all financial institutions. banks,
trust companies, insurance companies
mortgage companies. etc. Az per cent,
and the railroads have had to pay D
ner cent for their money from the K
F G. Closed banks have been able
to get loans from the r. F. T. at =
per cent. The interest rate to hnanclal
institutions. under the N. Il. A. orNe'
is to be cut to 4 per cent. .
If the R. F. c. can conduct Its ousi.
,, ness without making great losses; IL II
its loans, in other words, are eenefaily
! Maid up the corporation-which is the
hn
have profit. On the other hand, II
the loans are not paid up. the COY
ernment will be left owning big STAKE
in many financial institutions OF the
country, not to mention the railroads,
and many of the industries-lf the
nlans for advances to Industries tnem-
selves go through.
out of the business of making loans
and the interest received thereon tne
r F C. is paying for its own aomln-
istration. Here in Washington the
R F C.. domiciled in the building Whlch
once was the home of the Department
of Commerce, has about 1,l00 ot1cers
and employees. Another l,l0O employees
are scattered through the country, ior
the corporation has 80 loan agencies
outside of Washington, covering every
section of the country.
The capital stock Of the Reconstruc-
ton Corporation is S5C0,0oo'ooo' SUP.
scribed by the Federal Government. II
was originally authorized to issue and
have outstanding at one time not more
than three times the amount OF Its
capital stock in notes. debentures and
bonds This authorization was, how
ever. increased to six and three-f1fths
times its capital stock. and there nave
been subsequent changes in the total
amount that it may have outstanding
Congress Action Needed.
One of the first jobs that Congress
;s Ukely TO tackle when it returns to
Washington will be the passage OF
measure authorizing the R. F. c. TO
| make loans beyond January %. next,
the date on which its lending authority
expires.
The Public Works Administrator mas
allocated up to date ST 900. .OOO.Ooo lot
public works of many kinds IN all parts
of the country. Still the demand IS ior
more and more speed IN putting tnlS
money to work. especially in the states
and m,1nicipalities. The major part OF
the sum already allocated is for Federal
construction projects, including. for ex-
ample. S239 100000 for the construction
of new vessels for the Navy.
The national recovery act created at
one swoop the N r. A. and the p. w. A.,
and the appropriation authorized. total-
ing $4,000 100000, covers also the cosI
of administering both these govern
mental agencies Here in washington
the Public Works Administration mas
some 700 employees. Out in the states
there are State boards, with three mem
hers each, a total of 144 members.
These board members are paid at per
diem rate of $40, plus SIS If travenng,
when they are working. Then there are
10 regional advisers, each paid S6,Ooo
a wear. The effort has been to Keep
down salaries in the Public Works Ad,
ministration. and no one Is allowed
more than $4,000 a year.
The N r. A. has In the nelgnoor.
hood of 1.0C0 officials and employes at
work in Washington. Its work Is ex-
banding. Code after code Is pelng
adnnted And already the N. R. A. is
setting up an organization to see that
fhr prcvisions of the codes are nveo
un TO bv those who sign them. Codes
for the big basic industries. inciuding
steel textiles. oil. coal and AUTOMOBILES
aer already in operation.
The projectors of the N. p. A. have
in mind meeting the emergency Whlcn
demands more Jobs and higher wages
with their corollary, higher prices.
This is the immediate task. But there
is clearly further intent; to bring
about a greater measure OF soclal
Justice" This means a general re-
formation of the old conditions under
which capital and labor have 1ought
for their own hand for generations
Critics of the N R. A. insist that what
the administration should tackle is the
emergency. leaving the plans for new;
permanent system of industrial social
juctice to be worked out at later date.
The supporters of greater measure
of Justice to the workers-Wlth q
greater distribution OF the earnings OF
industry-contend that if more normal
conditions are restored the demand for
social justice" will get scant hearing
Their intention is to strike while the
iron is hot: while conditions are such