Evening star., 1934-03-22
|CRED|T BANK PLAN.
|H|TSHEAR|NGS SNAG.
Roosevelt Proposal Meets
Opposition in Both
Committees.
BY the Associated Press.

By the Associated Press.
A stirring of opposition to Presi-
dent Roosevelt's new credit bank plan
became apparent today in both the
Senate and House Banking Commit
tees.
Opinions were In conflict in both
groups, also, as to whether the pro-
posal by the President and Federal
Reserve Board, for a system of IL
banks to pour new capital into "medi-
um-sized" businesses, or the Recon-
struction Finance Corporation plan
for it to loan direct to industry. would
prove more suitable.
Chairman Fletcher of the Senate
Committee referred both proposals,
aimed at approximately the same end,
to subcommittee for study. He said:
If the Federal Reserve credit bank
set-up is created there may not be
need for the r. F. c. plan. or vice
versa"
Glass Opposes System.
Senator Glass, former Secretary
Of the Treasury and a recognized
banking authority. was represented as
one Of those opposed to creation of
the l2-bank system.
The Virginian and other members
of the Senate Committee were said
to object strongly to the proposed
method of capitalizing the bank plan
Treasury purchase from the Federal
Reserve banks of $4,000, 900 of stock
of the Federal Deposit Insurance Cor
poration.
Some Reserve bank members waged
bitter fight against originally sub
scribing for this deposit corporation
stock and some members of the COM
mittee professed privately to see in
the credit bank proposal move spon-
sored by the Reserve banks to regain
this capital.
Favor r. F. c. Authority.
At least one member of the House
Banking Committee also voiced the
belief that the r. F. c. should be
given authority to make direct loans
to small concerns.
The committee yesterday approved
two bills extending r. F. c. powers,
however: one to permit loans through
export banks to finance foreign trade,
and the other to permit the corpora
ton to accept new security in the re-
organization of railroads.
Almost the full membership of the
committee attended an executive ses-
sion at which the legislation was dis
cussed Jesse H Jones. r. F. c.
chairman, participated.
Jones reiterated to reporters later
that there was no conflict between
the two private credit plans, asserting
the R. F. C. proposal was temporary.
while the Reserve Board plan was
permanent
The latter was submitted to Con-
gress Monday by President Roosevelt
with letter recommending it. The
President has not expressed his view
on the R. F. C. proposal.
R.. F. G. Would Own Stock.
Jones explained the foreign trade
bill would permit the R F. C. to own
all the stock both common and pre-
ferred. in any export banks now set
up or hereafter created to finance
foreign trade
The two banks already created, he
said, have been established with the
use OF public works funds, which
were needed elsewhere. He said no
new banks were now contemplated,
but the bill would give authority for
them if they were desired
The railroad reorganization bill
would permit the R. F. C. to agree 10
the reorganization of railroads on the
same terms as other creditors and
compromise its claim to the same ex-
tent.
Jones said only IA rail loans by the
corporation we're in default and prob
ably not all of them would be in
volved-
Our railroad loans. generally
speaking, are in good shape" Jones
said. He added the last survey showed
that on these loans the collateral
held by the R. F. c. was less than
$50, 100000 short of covering them.