Evening star., 1934-05-15
INDUSTRIAL LOANS
AGREEMENT MADE
House Banking Committee
Generally Will Approve Sen
ate Bill Tomorrow.
BY the Associated Press.

The House Banking Committee
agreed today to approve tomorrow
with a number of amendments, the
Senate bill authorizing both the Fed
eral Reserve Board and Reconstruc-
tion Finance Corporation to make
loans to small industries.
No action was taken, however, on
the administration bill to postpone
for a year Inauguration of the per-
manent Federal Deposit Insurance
plan, although ]. F. T. O'Connor
controller of the currency, made 6
personal plea for the legislation.
1t was understood the committee
wound take up this bill after it fin
ished with the industry loan measure
When reported to the House tomor'
row, the amended Senate bill will au.
thorize the R. F. C. to make industry
loans up to $500, 200. 900 instead ol
$3.50 ,000, 900 as approved by the Senate
Provision Eliminated.
It will not carry the provision ir
the Senate bill under which Fedora
Reserve banks, to raise capital fol
industry loans, would be allowed Il
sell to the Treasury $4,000, 900 ii
Federal Deposit Insurance Corpora
ton stock which they now hold.
The House committee will decide
tomorrow whether the Federal Reserve
banks should be limited to $l40 ,000, ,00t
or $3.50 ,000, 900 in the amount of in.
dustry loans they make.
The Senate bill placed the maxi.
mum for reserve banks at $3.50, ,000, 900
The committee also approved tht
Steagall bill. under which States may
tax national banks at rates no higher
than those now charged against STATE
banks. Under present laws. nationa
banks have been exempted from STATE
taxation.
O'Connor gave four reasons for urg.
ing that the temporary plan be ex.
tended. They were:
!. Ninety-seven per cent Of all de-
positors already are insured.
2. Under the present temporary
plan a man and wife may have de.
posits up to $500 insured 100 pei
cent in the same bank by carrying
separate accounts.
3. Many States will have to enact
additional laws before their banks car
qualify for membership in the perma.
nent fund.
4. An attempt to raise temporary
insurance from S2,500 to $4,000, as !.
proposed by some House committee
making the $4,000 limit permanent
and there is no evidence that thi!
should be the permanent limit of in
surance.
The bill was passed by the Senat,
yesterday after series Of votes thai
closed R. F. C. Golfers to other pro-
posals and forbade political considera
tions from playing a part in LOAF
negotiations.
Individuals desiring loans through
the r. F. c. would apply to its regiona
Offices Terms of the collatera
offered would be fixed by the r. +
c. Board in Washington.
Provide "Reasona BILE Loans"
Under the Federal Reserve section
Of the bill, borrowers would apply a
the Federal Reserve Bank in thei
district, if they had been unable t.
obtain credit through the usual bank
ing channels. The bill provides tn
loan would have to be on reason
able and sound basis"
First, however. they would seek tn
f1ve-year credit from their own banker
who could discount the note with tn
Federal Reserve Bank by taking a
per cent Of the risk
Rejected amendments would hav'
permitted loans to municipalities or
tax anticipation warrants, 20-yeal
loans to municipality owned power
plants and more liberal loans on col
lateral furnished the R. F. c. by
closed banks.
The most sharply worded debate
was drawn by the anti-politics amend
ment offered by Senator Black, Demo
crat, of Alabama, though it finally
went through without a record vote
Subsequently a motion to reconsider
the vote by which it was adopted
entered by Senator Clark, Democrat
of Missouri was beaten, 80 to 81.
Black said he wanted to take Con-
gressmen and Senators out of the