Evening star., 1934-06-22
FORD BAN EXTENT
BRINGS NEW ROW
Official Opinion Varies on
Products Purchase by
u.s.. Loan Takers.
ny the Associated Press.

ny the Associated Press.
Diverse opinions were expressed to-
day by Reconstruction Finance Cor
poration officials as to whether direct
Federal loans to industry could be
used for purchasing Ford products
Chairman Jones expressed belief
that regulations imposed at the re-
quest of the N. r. A. do not bar pur-
chases from Henry Ford.
Il do not see," he told reporters,
"how this could keep any one from
buying q Ford car If he wants to-
Other corporation officials. however,
told inquirers to ask the N. r. A. for
an Interpretation of the regulation.
On its face, the regulation would
bar expenditure of money borrowed
from the corporation with any firm
which does not comply fully with N,
r. A. codes.
Ford Willing to Sign.
This would include the Ford in
dustries, but It was stated unofhcially
that there was an understanding that
Ford Is willing to sign a certificate of
compliance In specific cases and that
this has been held suficiert to meet
N. r. A. regulations.
The corporations rule covering the
N. R. A. includes executive order 6646
issued by the President on March IA
under which the controller general
has held that purchases by Govern
ment departments from Ford or any
Of his agents are barred despite the
fact the agents may be complying
with codes.
The r. F. c. yesterday began direct
lending to industry under recently
enacted legislation. 1t has $3.50, ,ooo,-
900 for this purpose.
s5oo,eoe Already Lent.
Chairman Jones said the corpora
ton board during the day approved
approximately s5O0,0Oo worth of IN
dustrial loans. He would not disclose
names Of borrowers. .
The corporation plans to spread its
pool Of s580,000, 900 for this purpose
as widely as possible through partiei-
patton in such loans by the Federal
Reserve banks and ordinary banks.
Jones said industrial advisory boards
would be formed In each place where
the corporation had loan once and
that these committees would assist in
examining loans 1t is planned to
end the lending program in January.
The loans made yesterday were to
concerns which have had applications
with the corporation some time under
the community mortgage company
plan.
Jones said each had been given the
option Of taking a direct loan or or
ganizing mortgage company to han
die the loans for a group Of business
houses.
Applications Here Banned,
Applications for industrial loans
must be made in the district in which
the factory or business is located. The
corporation has loan agencies in 80
cities corresponding with the Federal
Reserve Bank cities or cities fhere
there Is Reserve Bank branch. No
application will be received directly at
Washington.
The maximum loan any company
may receive from the corporation is
$500, 900 and the maximum period for
which loans will be made is five years.
Prevailing bank rates Of interest for
the type Of loan applied for viii be
charged.
Loans are to be made for working
capital and similar purposes with the
idea primarily in view Of creating en-
ployment. Money cannot, except in
exceptional cases, be borrowed to pay
debts. Construction loans viii be
made only when new construction Is
necessary to enable the borrower to
operate more effectually.