Evening star., 1934-06-26
POLITICS FEARED
|NR.F.C. LENDING
Blue Eagle Boycott May Re-
suit in DiCtation OF
New Policy.
BY DAVID LAWRENCE.

4QeTe , I'll OIO Saying eAIoe AAoAASy
talks" Well, it is beginning to talk
very influentially, now that the Re-
construction Finance Corporation has
decided to include considerations
other than adequate security and
credit in the awarding of loans to
industries and firms which cannot
get credit at the banks.
Although Congress did not specify
It, the r. F. c. has decided it will not
lend any money except to firms or
businesses which have the Blue Eagle.
The original national industrial re-
covery act did not contain any pro-
vision for a Government boycott of
any kind. Indeed. the very words of
the act forbade any discrimination.
Yet, the. Blue Eagle campaign was
started by executive order, and now
the r. F. c., which has done
marvellous job in handling credits
thus far, finds itself tied hand and
foot by the executive order which
created the Blue Eagle.
Executive Legislation.
When Congress passed the law CIV
ing authority for Government money
to be loaned to industry, there was
no consideration given to anything
else but credit requirements. The ad-
dition of the Blue Eagle factor is
just a piece of legislation by an
executive organization, which was not
contemplated by Congress.
As a practical matter, of course,
very few companies in America are
not entitled to the Blue Eagle, SO
it is doubtful whether the R. F. C.'s
stipulation will work any hardship
But the principle back of the regula-
ton is significant. If the R. F. C.
can insist that a borrower comply
with the NJ R. AS ideas. it could
subject the borrower to other con-
ditions which might amount to sup
port of other new deal policies.
1t is a short step from requiring
compliance with the N. r. A. to
insisting upon approval Of the new
deal as a whole, and that could mean
a political influence in the disburse-
ment of funds Already the opponents
tics has had much to do with the
ALLEGATION of Government funds.
Under Treasury Fire.
The administration has taken cog
nizance of such charges in prosecut-
ing those who tried to arrange for
relief funds on the basis of po-
litical affiliation and those who tried
to influence mortgage exchanges un-
der the Home Owners Loan Corpora
ton in the same way. The collec-
ton of campaign funds by politically
appointed officials of the Govern
ment has come under fire by the
Treasury, but the removed Detroit
official continues as Democratic ma
tional committeeman, fully recog-
nized by Postmaster General Farley
on all matters of patronage in Michi-
gan.
The potentialities of the Govern
ment as lending agency are rather
extensive as they may relate to party
politics. Applications for loans prob
ably will be assisted by political lead
ers in varikus parts of the country.
The r. F. g. itself forbids the pay
ment OF any bonus or commission to
anybody for services in obtaining an
r. r. C. loan, but the political lead
ers generally will look upon the latest
regulation Of the r. F. c. with respect
to the Blue Eagle as meaning some
thing else besides credit considera-
tionS are involved.
May Get Preference.
Hence, the applicant who says his
support Of the new deal has been un-
qualified and that he has complied
with the N. r. A., places himself in
a position to ask that, with the linn
tied amount of funds available, pref
erence be given him rather than some
opposition party.
Officials of the r. F. c. naturally
deny any such intention. Their stip-
ulation that money can be loaned
only to those flying the Blue Eagle,
they say, is in accordance with the
executive order of the President and.
whatever the Presidents policy is, the
r. F. G. must obey.
Mr.. Roosevelt, however, made the
original stipulation, with reference to
the award of Government contracts
on public works projects, at a time
when support of the N. R. A. was
considered a paramount issue, espe-
cially since the idea did not originate
until after Congress adjourned in
1888.
Now, however, there has been time
for Congress to ratify the Blue Eagle
boycott if it chose. Indeed, prominent
Senators have said publicly they did
not think it was a violation of the
national industrial recovery act in
any sense to ignore the Blue Eagle
The r. F. C.'s latest rule indicates
the lending of money is regarded as
governmental favor rather than the
disbursement of funds on adequate
credit security-a precedent of far
reaching implications.
(Copyrisht 1934O