Evening star., 1934-05-15
Loans to Industry.

Intent upon aiding private industry
with increased credit, the Senate has
passed the Glass bill authorizing the
loaning Of approximately $3.50, 0,00G, 900
through the Federal Reserve System.
To it the Senate added a proposal
that loans to private industry should
be made also by the Reconstruction
Finance Corporation, making another
S250,000, 900 available. When the leg
islation shall have been finally enacted
into law, very sizable fund will
have been created to help business
stage further comeback. The COM
plant has been that, with the banks
literally bursting with surplus funds,
industry has not been able to obtain
the money necessary for enlargement
and extension. Either the banks have
been afraid to take chance or the
industrialists themselves have been
unwilling to step forward while con-
ditions were uncertain. 1t now re-
mains to be seen whether these Gov
ernment and semi-G Government agen-
cies will use better judgment than the
bankers in extending credit to indus
try, and also whether industry will
be willing to take advantage of the
offer.
Before the Senate passed the credit
to-induStry bill it adopted an amend
ment offered by Senator Black of Ala
bama making it unlawful for any
Government official, Federal, State,
county or municipal, and for any
member of a national State or county
political organization to seek to in
fluence in any way" any agent or
officer of the Reconstruction Finance
Corporation in making loans to in
dustry. If any such influence were
exerted or attempted to be exerted.
the person or corporation seeking the
loan would be disqualified. The plain
purpose of the amendment is to disbar
politics when it comes to having the
Government loan the taxpayers money
to private industry. There is, it
appears, no way to prohibit the Re-
construction Finance Corporation it.
self from looking at proposed loans
from a political point of view. In
the end, it is quite clear, there must
be some determining power, some
agency which shall act upon applica-
tions for Government loans. But the
Senate has gone on record as oppos-
ing the practice of senatorial influence
to obtain loans for their constituents.
Senator Black, in support of his
amendment, estimated that $4,000
900 900 in loans would be applied for,
with only s25o,00O,00o available from
the r. F. C. He preferred, he said
that the loans should be made by the
r. F. C. after a careful study of the
merits of the proposals submitted.
The Black amendment was not
adopted without opposition. Sena-
tors resented, they said, the imputa-
ton that they would seek to obtain
loans for their clients, using their po-
litical influence for the purpose. It
was. they added. an insult to the
Senate, to place this amendment in
the bill Insult or no, there the
amendment stands. And it will be
extremely interesting to see how it
works out, provided the House ac-
cepts it and it is written into law.
Persons who wished jobs, contracts
and whatnot from the Government
have become accustomed to run to
their Representatives and Senators
in Congress They have come to be-
lieve that such political influence was
a sine qua non-and too often it
has been just that thing. When
they have not gone to their Repre-
sentatives in Congress these appli-
cants for preferment have sought to
obtain the influence of members of
the national political committees,
State committees, etc. Under the
Black amendment this kind of in
fluence also is barred. If the loan
of Government funds to industry IS
an innovation, decidedly the Black
amendment is equally a new de-
rt11ro