The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-06-07
DOZEN CREDIT
BANKS URGED
AS TRADE AID
BiIIion-DoIIar System Would
Make Loans to Small
Industrial Groups.

% y otf tVPS-uUitufd y tNspHptf AtttHHld
WASHINGTON, June dis
appointed by the limited issuance OF
Government loans under legislation
of a year ago. groups representing
small industrialistS and business
men are bombarding Congress with
appeals for passage of the Kopple-
mann bill. which would create a
billion-dollar system of intermediate
credit banks.
The measure embodieS recon-
mendations of DR.. Theodore N.
Becknlan, expert on wholesale dis
tribution for the Census Bureau.
1t would establish a credit corpora
ton with branches in the u Fed
eral Reserve cities for rediscount-
ing and making direct loans to
small and medium-sized CONNER
cial and industrial establishments.
At hearings before the House
Banking and Currency Committee,
DR.. Beckman has been a leading
supporter of the bill.
Fears Business Failures
Rep. Kopplemann Cd, Conn.,,
author Of the bill, contends that
last years act providing for direct
loans by the RFC and the Federal
Reserve Banks has been a failure
and that many of the businesses it
was designed to aid will be forced
to close unless the government
comes to the rescue.
AT the present rate of lending
it would take five years to use the
$3.50 100000 authorized in the orig
inal industrial loan bill" said Kop-
plemann. They will not need help
five years from today many of
them will be beyond help five
months from today"
The corporation proposed in his
bill would be empowered to issue
notes, debentures or bonds up to
ST ,OO0,oOO,O00 with individual loans
limited to 100000. 1t would be
capitalized at $100,000,000, the
shares to be held by the Treasury,
which also would be permitted to
buy the corporations obligations.
These would be guaranteed by the
government both as to interest and
principal. Interest would not ex-
coed 4 per cent.
Loans Up to IS Per Cent
The corporation would be per-
mitted to rediscount or purchase
commercial paper from Federal or
state-chartered lending institutions
maintaining separate departments
for industrial loans, and would
make direct loans to industrial firms
and businesses up to rs per cent Of
the value of warehouse receipts,
real estate, plant equipment or other
collateral.
The discounting privilege would be
limited to twice the paid-in cap
ital and surplus of the lending in
stitution. Loans or rediscounts
would be made for periods of six
months to five years, with a five
year renewal privilege.
The corporations rediscount rate
would be limited to not more than
L 2 pei LCilb VI 4l4LCICoI OlI ITO
and lending institutions would be
restricted from charging interest in
excess of 2 per cent of the redis-
count rate. On direct loans, the
corporations interest rate would ba
from 1 to per cent in excess of the
rediScount rate.
Costs charged by the corporation
incidental to making loans or re-
discounts would be graduated from
2 per cent on loans up to $25, 900
IL per cent on loans from S25, 900
to $4,000; 1 per cent from $4,000
to 100000 and u per cent on larg-
er loans.
The bill vests control of the COR
poration in board of nine presi-
dental appointees, none of whom
could hold office in any institution
engaged in banking or mortgage
lending.