Evening star., 1934-09-28
CREDIT EXPANSION.
MOVES LAUNCHED.
Treasury and R. F. c. Act
to Aid Industries and
Real Estate.
~ the Associated Press.

credit for industry and real estate
building were made yesterday by the
Governments two largest financial
agencies-the Treasury and the Re-
construction Finance Corporation.
Chairman Jones of the r. F. C.,
after conference with President
Roosevelt, announced the President
had approved plan whereby the big
lending corporation would buy pre-
ferred stock and capital notes of trust
companies that specialize in mortgage
loans with view to encouraging these
institutions to rebuild the mortgage
market.
At the same time Secretary Morgen-
thau, in special meeting Of chairmen
of the Industrial Advisory Committees
of the IL Federal Reserve Banks. urged
more speed in the handling of
industrial loan applications. These
committees are supposed to make
recommendations to the banks on such
applications.
Seeks to Restore Mortgage Market
At a press conference, after his visit
to the White House, Jones issued a
formal statement saying the r. F. c.
wanted to encourage the organization
of privately owned trust companies
that would engage especially in the
mortgage loan business.
He said he did not expect the Gov
eminent corporation to put much
money into the undertaking. but that
it was the purpose Of the move to
encourage private institutions to help
restore the mortgage market to normal.
He pointed out that existing trust
companies are banks, and under most
laws banks cannot engage in long
term mortgage business.
Winthrop W. Aldrich. chairman Of
the Chase National Bank, was said by
Jones to have become interested in
the plan and was furthering it in New
York City.
This movement" Jones said, has
the hearty Endorsement Of President
Roosevelt, and if taken advantage of
by patriotic people of means, who are
able to furnish the common capital of
such trust companies and provide
capable management, considerable en-
ployment will be created and business
generally stimulated, to say nothing
of the people who will be directly
helped by such loans"
Real Estate Held Asset.
Jones said the Nations greatest
single asset is real estate, and just
because a few big centers were over
built and many of the buildings i'm
providently financed is no reason why
real estate, or real estate securities,
should be forever condemned"
Real estate in some form," he
added, CONSTITUTES the savings and
investments Of very large percentage
of our citizenship and these invest
ments should be preserved as far as
1t is possible to preserve them with
out loss to the Government" He out
lined the purposes Of the move as
follows:
First. To provide mortgage money
for new construction with a view to
increasing employment and stimu-
lating structural material markets.
Second. To enable distressed own
ers Of mortgages, whether whole mort
cages. split mortgages or mortgage
certificates, to borrow reasonably upon
these mortgages at fair interest rates
and not be forced to sell at sacrifice
prices.
Third. To enable borrwers to re-
finance mortgages where the value
and /or income of the mortgaged prop
erty and the ability Of the borrower to
meet interest and principal payments
will support the mortgage.
Fourth. To assist in the preServa-
tion and reorganization of distressed
properties for the protection Of mort
gage bonds or certificates, including
second mortgages and equities. where
the holder has a real chance of saving
his property"
Expects Low Interest Rates.
Jones said he expected interest rates
from 412 to 6 per cent, and added:
Many mortgages that can be made
by such trust companies can be in
sured by the mutual mortgage insur-
ance fund operated by the Federal
housing administrator, and to that
extent will complement the activities
Of the Federal Housing Administra-
ton"
He pointed out that there were
many kinds of properties, mortgages
on which could not under the law
be insured by the Housing Admins
tration, such as apartment houses
over $4,000, Office buildings, hotels,
factories, warehouses and the like, but
said mortgages on such properties
could be made on perfectly sound
basis"
1T is the desire of President Roose-
welt. and the directors Of the r. F. C.
in this further way" he said. "to as
sist business temporarily, by provid-
ing mortgage money where it can be
done on a sound basis and without
cost to the taxpayer"
Meeting Held Significant.
Especial significance was attached
to the meeting of the Industrial Ad-
visory Committee chairmen, particu-
larly in view Of the slowness Of loan
making under the $280,000,000 five
year industrial loan fund authorized
by the last Congress.
Actual Federal loans to industry
under this fund have amounted to
less than 100000, while commit