The Washington times., 1936-12-01
u. 5. AGENCIES
LENDING LESS,
REPORT SAYS

NEW YORK, Dec. latter
four years of increases, Govern
ment lending is showing a Sus'
tanned decline, says Banking, Off
cial publication of the American
Bankers Association.
For four years, from the estab
lishment of the Reconstruction
Finance Corporation in February,
1882, until the spring of the cur
rent year, the aggregate volume
of loans outstanding by Govern,
ment-oWned or Government-Spon'
Sored agencies grew almost with
out interruption from month to
month, the publication says, add
ing:
Money owned these agencies
most of them set up to COM
bat emergencies of depression
by farmers, hOme-OwnerS, mu-
inequalities, corporations, and
other classes of borrowers
reached the staggering sum Of
$9,OOO,OOO,O0O. or barely $4,000
100000 less than all the loans
held by Federal Reserve men,
Der banks, exclusive of inter-
bank and open market loans.
Bank loans during the same
period had dropped steadily.
PRIVATE LOANS RISE
I'm the last few months, how
ever, the situation has altered
materially. Not only have banks
and other private lending insti-
buttons reported an increasing
volume of new lending, but for
the first time in four years there
has been a sustained decline in
the outstanding volume of loans
by Government agencies.
ThiS drop in current lending
by these agencies has become so
marked that repaymentS on ex-
listing loans are more than off.
setting new loans, on the whole.
This chang dates back to a COM
binatiOn of circumstances: Cessa-
ton of lending by the Home
Owners Loan Corporation on
June Is, large repayments by
financial institutions to the Re
construction Finance Corpora
ton, and continued improvement
in the farm real estate situation
which enabled the Federal land
banks and the land bank COM
missioner to curtail their new
lending still more sharply.
"The greatly revised operating
status of many of these agencies
is significant both to the Govern
ment itself and to private lend.
ing institutions which have felt
or feared the competition Of
depreSsiOn-bOrn Federal OrganiZa-
tiOnS.
For one thing, the Treasury
is now recovering, in the net, on
its so-called recoverable assets
those assets which have long
been pointed to as making a
large part of the recent increase
in the public debt more apparent
than real"
TREASURY BENEFITS
The Treasury benefits also be
cause its contingent liability on
Government-guaranteed obi 6 a.
tons of these agencies is now be-
ing reduced for the first time it is
pointed out. At the end of Septem'
Der, the total amount of Govern
ment-guaranteed obligations out
S landing was $4,667 900, 600
against the peak of $4,719,O00, 000
at the end of July. This was the
first real decline since the Treas
ury initiated these guarantees in
1882, although so far the decline
is restricted to retirement of Home
Owners Loan Corporation bonds,
the report says.
The decline in lending opera
tons has been especially apparent
it is noted, in agencies established
to meet the emergency in agricul
tural and urban real estate. This
shrinkage of lending applies also
to the Federal land banks which.
the publication deserves, al
though in existence for 20 years,
we're practically powerless to cope
with the situation until Congress
revived them with large new sub
scriptions to their capital in 1882,
Money Markets
NEW YORK, Dec. G.N.SD.-Bank-
ers' acceptance market remained quiet,