Evening star., 1937-03-31
CROWLEY EXPECTS
j. S. CREDIT CURB
Favors Letting Commercial
Banks Resume-F. n. A,
Quits Repair Field.
~ the Associated Press,

~ the Associated Press,
Chairman Leo T. Crowley Of the
Federal Deposit Insurance Corp. said
today the Government should step out
Of the money Lending business ~ rap
idly ~ commercial banks are prepared
TO enter 1t.
He made this comment - the Fed
eral Housing Administration arranged
to close down tonight its half-billion-
dollar business Of insuring home mod
srniEation and repair loans
Its bigger business OF insuring nav
home construction, now in = boom
phase, will continue.
Expira ton Of powers to insure loans
for home repair will terminate the
emergency portion OF the housing pro-
gram. The Home Owners Loa Corp,
set up in 1888 TO save homes from
foreclosure. stopped its loaning activi-
ties last year and Is being liquidated.
$685., 900 in Loans Insured.
Up TO March 20 \ total Of 1899 S04
home repair loans asgregating S533,-
1927, ,492 had been insured by Fl A.
The loans were made by $40 banks
and other private financial institu-
tions
The insurance has cost the Govern
ment so far an estimated Sl5,000,000,
of which 34.769, $50 was the net loss
in paying claims on defaulted loans
and the balance WAS cost OF operation.
Crowley asserted that all Federal
lending agencies probably will be glad
to cooperate with chartered banks In
Withdrawing from credit activities"
President Tom K. Smith OF the
American Bankers Association said
recently the organization Is making
studies to serve rs basis for nego-
tiation with Government officials on
the curtailment of this activity.
Would Aid Smaller Banks.
Restriction Of Federal lending. Crow
ley said, would be especially beneficial
to smaller banks which are encoun-
tering difficulties in finding invest.
ment channels for idle funds.
Citing that the Reconstruction Fl.
nance Corp. already has curtalled
lending, Crowley said 1T is on its way
out"
In the farm credit field, he said the
Federal land bank system should bs
retained for any future emergencies.
Meanwhile, hscal authorities said
the Treasury may urge revision OF the
81 900 900 900 Wagner housing bill IN
an effort to keep next years expendi-
lures close to budget estimates.
The measure is being studied by
Treasury experts. Their findings prob
ably will be transmitted soon TO Sec
retary Morsenthau.
Low Rent Projects Are Idea.
Under the bill, offered by Senator
Wagner, Democrat of New York, a
United States Housing Authority
would make loans and grants TO local
agencies for low-rent building projects.
Funds would be provided through
s5l ooo, 900 appropriation, transfer OF
available money from the Public Works
Administration and borrowing.
Ofiicials said the Treasury study IL
centering on provisions which would
enable the Housing Authority to run
up . 5000, 1000, 900 debt, through the
issuance of Government-gu
obligations. in the hscal year ending
June 80. 1888 Aggregate borrowing
could be increased to $1,000, 900 900
after July l, 1910
Although no alternative has been
devised, informed persons said, con-
sideration is being given to scaling
down borrowing authority Unless this
were done or new revenue provided,
they asserted the legislation would
knock President Roosevelts budget out
Of kilter.