The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-07-17
BILLIONS DUE
TO FLOW BACK
into TREASURY
Value of Securities for
Recovery Advances Put
at S6,5OO.OOO.OOO.

81 6oripps-Hocarf Newspaper AHjqncs
WASHINGTON. July I7.-Repub-
hcans, figuring up the cost Of the
Roosevelt recovery program, have
mace much Of the loans and au-
E1orizatiOn fo- loans on various
projects o. which the most recent
IS the giant housing program.
In fairness these loans must be
segregated from the other New
Deal outiays. for they are in large
degree recoverable. II IS anticipated.
From experience with the War FL
nance Corporation, predecessor of
the Reconstruction Finance COrpOr-
alton, Republicans found liquidation
Of such investments not only sue
Cessful but actually profitable.
Republicans must have consid-
cred government loans a good risk,
for II was they who set up the Re-
Construction Finance Corporation
as a means Of bolstering the nation S
financial structure.
Billions Staked in Loans
In the budget submitted to con-
gress last January II was estimated
that the book value Of assets held
as security for government loans was
100000. IN his final report
20 the house. Chairman James P.
Buchanan of the appropriations
committee estimated additional
commitments had raised this figure
to about S6.5OO.OOO 600.
He pointed out that the public
debt was S20,934 600 900 when the
Roosevelt administration took Office
on March 4, 1888. It was run up
higher by the deficit of the last
Hoover year when the fiscal year
ended four months later. The antici-
pated figure of the public debt on
June 30, 1885, is S31.834 900 900
which would mean an increase of
S1O,9OOOOO,OOO in two years of the
Roosevelt administration.
"Deducting from this figure the
estimated book value of assets held
as security for loans of Sc. 500.0000 COO,
there remains an increase in the
public debt during this period not
offset by these assets Of S4.400OOO, =
900, which. if not otherwise repre-
sented by investment in govern
ment property. might properly be
charged off against recovery" Mr..
Buchanan said.
This increase represents the cost
of feeding and clothing and giving
temporary jobs TO the unemployed
Of aiding farmers in distress, of ad-
ministrative costs in various recov-
cry agencies. The administration
counts it money well spent in Civ
ing new life and hope to millions
of Americans who were destitute
or nearly so when Mr.. Roosevelt
entered the White House.
The Reconstruction Finance Cor
pOratiOn, since its creation in the
Hoover administration. has ad-
advanced a total of $3.50. 100000
This includes 81. 437 900 900 to other
government agencies and for direct
relief to the destitute. The loans
have gone 10 banks. railroads, fed
eral agricultural banks of all sorts,
to farmers for crop loans, and to
the Home Owners Loan Corpora
ton which is seeking to ease the
mortgage debit.
Billion and a Half Repaid
Already S1.517.OOO,OOO has been
repaid and the RFC expects to re-
cover a large part of the balance.
One advance Of 100000, 900 to the
federal emergency relief admins
tratiOn for direct aid to the unem-
0lOyed it can not recover. This was
ordered by congress. It can not
recover all of an early 100000, 900
advance to states for relief. though
it hopes to get back a large part of
this through rebates out of federal
highway allotments to the states.
the method OF repayment provided
by congress.
The RFC Will be with lis a long
time The liquidating process Will
take years. But so did that of the
War Finance Corporation. which
was created in 1918 to provide credit
for war agencies. was revived to
make loans to agriculture. and now
sixteen years afterward Is in the
process of final dissolution at the
hands Of a couple of treasury Off
Gals. It lent $500 OOO. 900 and turned
in a profit of s65.OOO,OOO to the
treasury.
Scope BrOadened
President Roosevelt found the
RFC in operation when he took
charge. He broadened its scope to
fit in with the functions of other
agencies in stimulating business
and industry. These included the
public works program. the reflnanc-
ing and guarantee of home and
farm mortgages. and the like. Re-
Gently the RFC has begun to make
direct loans to industry.
Economists generally agreed that
a kickoff" such as the government
provided through its lending
agencies was absolutely necessary
TO start the forces Of economic re-
covery-and they said this with full
knowledge of the cost. Industry
and finance are singing the praises
Of the newest phase of the RooSe-
welt progTam-encourag ement OF
housing construction-even as Re-
publican campaign speakers are
complaining about the cost Of re-
cOvery.
In amaSSing debts through out
. ~r~~srnH ~~-r-~