Evening star., 1934-11-26
NEW DEAL LOANS
TOTAL I BILLIONS
U. S. Expects to Recover
Most of 1t, With Interest
Paying Costs.
BY the Associated Press.

BY the Associated Press.
With five big agencies handing out
the cash, New Deal money lending
reached the point today where Amer
ican citizens owe the Federal Gov
ernment nearly seven billion dollars.
A survey of the principal emergency
credit agencies showed loans outstand-
ing to public and private enterprise
totaled $6,946, ,069,897. Only the fu-
ture will determine when the flow Of
money will stop.
AS security, Uncle Sam holds every
thing from corn in cribs and mort
cages on individual homes to bank
and railroad bonds. The interest
covered range from to 6 per cent
and the obligations spread over terms
from months to 80 years.
Recovery Is Expected.
The official expectation is that most
of the money would be recovered, with
interest at least paying the admin
istrative costs of the lending job.
The total, however, does not include
relief expenditures, which the Gov
ernment classes as "irrecoverable
loans" nor money spent on strictly
Federal projects designed to create
employment.
In the words of w. I. Myers, gov
ernor of the Farm Credit Administra-
ton:
The true test Of any credit system
isn't in putting the money out. It's
in getting it back"
But the rapidity with which the
repayments were being made brought
expressions Of pleasure from some
officials charged with placing Govern
ment loans.
Hasty Payment Not Wanted.
Only recently Reconstruction Corp.
officials made a public plea to private
borrowers not to be in too great a
hurry to liquidate their indebtedness
to the Government Their point was
that the money should be used SO as
to create more demand for goods and
labor.
The R. F. c. had been repaid more
than two and a quarter billion dol
lars, or almost half of the entire four
and half billion it had loaned out
side of advances to Government
agencies and for relief since it began
functioning in February, 1882.
On these transactions, it had shown
a profit of almost 100000, ,0O0 1t ex-
pected to do little better than
break even" in the long run. It's
profits came from the difference be-
tween the per cent it paid the Treas
ury for money 1t used and the 4 to 6
per cent it charged.
Billion Still on Hand.
With $l,280,168, ,2O6 in outstanding
loans october 81, the r. F. c. still
had more than a billion dollars avail
able for legitimate borrowers, includ-
ing banks, railroads, insurance COM
panies, credit agencies and other
financial institutions.
Largest holder of outstanding loans
was the Farm Credit Administration
A total of s2,715, ,901 ,691 was due it
for loan aids to agriculture placed
through the Federal land banks, the
land bank commissioner, the Federal
credit associations and regional agri-
cultural credit corporations.
Interest charges here were AZ to 5l1a
per cent on mortgages from months
to 80 years.
Save in the hard-hit drought areas,
loan repayments we're described IS
very satisfactory.
Two Billions Owed H. o. L. C.
Two billion dollars was owed the
Home Owners Loan Corp. by mort
gagged property holders.
There we're 650000 borrowers with
average loans of $1,000.
These home owners had IS years
to pay off on the amortization princi-
pie at rates Of to per cent.
Exclusive of outright grants, the
Public Works Administration had out
standing approximately s750,000,0 900
in loans to non-Federal public bodies
and private corporations.
Bonds Secure Loans.
It's loans were secured By bonds,
which draw from to S per cent
and ordinarily extend to the useful
life of the project" In many cases,
however, the loans were limited to 10
to Is years.
Commodity Credit Corp. loans to
corn and cotton farmers aggregated
S200000,000, more than $l60,000,000
of the total being for cotton.
These loans are secured by corn and
cotton held on farms and their object
was to enable the grower to market
his produce in orderly fashion.
The Government lends SIS cents
bushel on corn at an interest rate of
about per cent and IL cents lint
pound on cotton.