Evening star., 1938-04-15
NEWP. WA. SET-UP
SEEN IN SPENDING
Agency May Incorporate
and Borrow Billion From
the Public.
BACKGROUND

BACKGROUND
Sir months OF slackening busi-
ness has brought administration to
point OF relying aneto on public
spending for principal economic
tonic. Expansion OF credit through
desterilisation of gold and reduc-
tion OF Federal Reserue REQUIRE
ments also calculated to speed cir
culdtion OF money
Hy the Associated Press.
A new Government corporation may
be formed to finance the public works
portion of the administrations new
spending program
The long-idle P. w. A.. it was learned
today, may incorporate and borrow di-
rectly from the public its ST 900, 900 900
share.
AS one alternative, P. w. A. could
borrow the money from the Recon-
struction Finance Corp, which in turn
would sell securities. If P. w. A. chose
to issue its own securities, the R. F. c..
presumably would buy them first and
resell them to the public.
The P. w. A. billion. for needed
public improvements" would be let out
on long term, no-intereSt loan basis
or in the form of As per cent grant
s5 per cent interest-bearing loan The
borrowing agencies would have their
choice.
Other Phases Proposed.
-Four other phases of public works
proposed by President Roosevelt we're:
l. Three hundred million dollars to
enable the United States Housing Au-
thority to undertake immediate con-
struction of additional slum- clearance
projects.
2. One hundred million dollars to be
added to previously recommended Fed
eral highway aid
3. Thirty-seven million dollars to be
added to the S630O0,OO0 previously
recommended for flood control and
reclamation.
4. Twenty-Five million dollars to be
eoded to expenditures previously
planned for Federal building construc-
ton.
The Housing Authority definitely is
scheduled to finance its own way on its
own securities
Ihe r, F. c., meanwhile, may resort
10 selling Its own securities to finance
It's potential sl,5OO,0OO, 900 business
Lending program. The R. F. c. re-
Gently has been borrowing from the
Treasury instead of the public.
Seek to Hold Down Debt.
These direct borrowing methods Of
nclals said, were intended to minimize
the increase of the direct Treasury
debt currently at s37,56O, 900 900.
Although R. F. C. securities, for
instance, are guaranteed by the Treas
ury, they are regarded only as con-
ungent liabilities that is, the Treas
ury hopes r. F. c. will collect back
enough on its loans to retire the Sc
curities without any Treasury help.
III his radio address, as in his mes
eas' W congress, Cne PRESIDENT de-
scri oed his recovery recommendations
as falling into three categories.
FIRST he said, Il asked for certain
appropriations which are intended to
Keep the Government expenditures for
work relief and similar purposes dur
ing the coming fiscal year at the same
rate OF expenditure as at present.
That includes additional money for
the Works Progress Administration,
additional funds for the Farm Sc
curlty Administration. additional al
lotments for the National Youth Ad-
mlnlstration and more money for the
CIVILIAN Conservation Corps, in order
shat 1t can maintain the existing num-
Der OF camps now in operation"
He estimated that these appropria-
lions made necessary by increased
unemployment" would cost about ST.
25o,OO0,O00 more than the figure he
had given Congress in January.