Evening star., 1938-03-27

| AOOht mOnth ago President
| Roosevelt Tescinded curtalment
order OF last october and authorized
r. F. C. Chairman Jones to resume
making loans to business and in
duStrtdl firms. especially loans that
Uould maintain or increase en-
| ployment.
Resumption OF lending by r. F. C.
| IS seen as utctory for Chairman
Jones and Treasury officials.
By the Associated Press.
The administration asked Congress
yesterday to authorize a virtually un-
limited program Of Government loans
to business and a resumption of self
! llquldating loans to public bodies.
The administrations proposal would
enable the Reconstruction Finance
Corp to make business loans on a
| long-term basis, meeting directly the
complaint of many business men that
such credits were not available.
The r. F. c. would be given power
also to buy securities of private cor
porations. opening the way for capital
loans for expansion and new con-
| structlon. Small businessmen have
complained to the Government that
capital for those purposes was diff
cult to obtain except in large quanti-
| ties
Making public a letter from Jesse
Jones, r. F.. c. chairman. requesting
that the new authority be granted.
Senator Glass. Democrat. of Virginia.
| chairman of the Senate Appropriations
Committee, said he already had in
troduced legislation designed to carry
out the administrators recommended
| tions.
Mr.. Jones said in his letter that
President Roosevelt had authorized
him to make the request.
Would Eliminate Limitations.
| Under existing law, the r. F. c. is
prohibited from making loans matur-
ing later than January 81, 1945. The
total OF all private loans outstanding
cannot be more than $500, ,00O. 900.
Both restrictions would be eliminated
under the administration proposal.
The new provision would empower
the r. F. c. to purchase the securi-
ties and obligations of and to make
loans to, any business enterprise when
capital or credit, at prevailing rates
for the character of loan provided for,
is not otherwise available"
The corporation would be restricted
only by its judgment as to the SOL
vency of the borrower ana the sound
ness of the loan.
1t would be required to determine
that the loan or security was Of ma
ture reasonably to assure retirement
or repayment
The corporation would be permitted
to lend money to States, municipali-
ties and other public agencies for prof.
ects authorized by Federal State or
municipal law.
Under the Emergency Relief Act of
1882. the R. F.. c. was authorized to
make such loans. but the authority
was rescinded when P. W. A. was
established. Subsequently P. w. A.
authority for such loans was taken
away also.
Reasonable Safety"
Mr.. Jones told Senator Glass he had
no estimate OF the amount of money
that could be lent to public bodies.
adding:
| 1t is character of Government
lending that promotes work and that
can be done with reasonable safety"
He forecast there would be no net
loss from the corporations presen
investment in such projects.
A Banking and Currency Subcom-
mittee already has conducted hearing7
on proposal by Senator Pepper
Democrat, of Florida to set UP a sepa-
rate agency empowered to lend Fed
eral funds to business through a sys-
tenn of regional banks.
In writing to Senator Glass. Mr..
Jones said the legislation he proposed
would give us somewhat broader pow-
ers in financing business and industry
where credit is not otherwise avail
able"
He added the proposal would per
nit us to take securities maturing over
longer period than the law now
provides. and will enable us to meet
| ->SASAAoeC uSAAAaAiuo VI UuSllleSS
for any reason are not being supplied
from private sources"
He told Senator Glass no new bor-
rowing power would be needed by the
corporation
Loans Total 1899 .s67,4S7.
Mr.. Jones reported that under the
R. F. C.'s previous authority to make
-liquidating loans to public agen-
cies, the corporation had authorized
loans of S399,967 ,487.36 and had
bought 1850 separate issues from P.
W. A., aggregating s60O,437 7,873.76.
He said that s491, ,568, ,666.86 of the
securities had been sold at a premium
Of $13,841 ,863.84 and the r. F. C. was
continuing their sale as "the market
will. in our opinion, absorb them to
the best advantage"
| OF industrial loans made to date
to 2,377 borrowers. totaling sl97.-
413,04l. approximately II per cent
were for $4,000 or less: Is per cent
from $4,000 to $4,000; 20 per cent
from $4,000 to $25,000; 18 per cent
from s25,oOO to $4,000; IA per cent
from $4,000 to 100000; 7 per cent
from $100, 1000 to 100000; per cent
from 100000 to $4,000 and a little
more than l per cent for s5O0,000 or