Evening star., 1939-07-22
BY the Associated Press,

ulIy 'tuS OeeN COOL 70 proposal.
By the Associated Press.
Jesse H. Jones, the Federal loan
administrator, has advised the Sen
ate Banking Committee that the Re-
construction Finance Corp. is going
to have plenty of losses" on the loans
it already has made to business.
An unrevised record of Mr.. Jones'
testimony on President Roosevelt's
new lending bill was circulated
among committee members today.
The printed text showed the former
Il. F. c. chairman was asked by Sem
ator Townsend, Republican, of Della
ware whether the lending agency had
made all business loans which were
in any way eligible"
we think we have" Mr.. Jones
answered. I'VE are not infallible. We
make plenty of mistakes and plenty
of bad loans. We will have a very
substantial percentage of losses on
our business loans"
THE liberality of the policy is 60
ing to show up in the losses you
take?" interjected Senator Adams,
Democrat, of Colorado.
Yes" Mr.. Jones responded. I'VE
are going to have plenty of losses"
Jones Ashamed" to Tell.
Senator Adams then asked
whether the losses would run as
high as 10 to 20 per cent" and Mr..
Jones replied: II am ashamed to tell
you what think it will be. It will be
plenty"
Mr.. Jones testified that the r. r.
G. was currently foreclosing on $12,-
900 OF industrial loans and that
1t would take very heavy loss" on
the transaction.
If anybody makes loans on more
liberal basis than we are making
them now" he added, they will be
grants-they will not be loans"
The r. F.. C.. declined today to
estimate how much it might lose
on business loans The latest finan-
clal statement showed it had made
5508 such loans, totaling $3.50 1885,
262, since February, 1898. Banks
later took up $7,923,427 of these.
In addition, banks had participated
in business loans to the extent of
$63, TBS, ,720. An r. F. C. official said
no figures showing the average loss
on business loans were available.
while Mr.. Jones committee tes-
timony disclosed the r. F. c. would
lose on business loans, letter he
sent to President Roosevelt earlier
this week brought out that on its
total transactions, including all
types of loans, the corporation
actually was making money.
(Resigning as r. r. c. chairman
to become Federal loan admins
traitor, Mr.. Jones wrote that the
agency had sound assets sufficient
to pay all of its debts and return
to the Treasury the entire capital
stock invested in it, with something
in addition"D
The committee before which Mr..
Jones testified made net reduction
OF 100000 in Mr.. Roosevelt's
81 800 100000 lending program yes
terday. and then turned down an
amendment by Senator Maloney,
Democrat, of Connecticut to add
$500 900 .0O0 for public works grants
to States and $4,000, 900 for Federal
public works projects.
The net reduction in the measure
resulted from a $3.50 900 900 slash in
the s750,oO0,000 toll roads program,
a $3.50 ,0O0 900 cut in the $500 900 900
railroad equipment proposal, and the
addition of $90000,OOO for reclama-
ton projects in the West.
The committee rejected a PROPOSAL
by Senator Maloney to prevent use
OF any OF the loan fund for Govern
ment-flnanced competition with
private utility plants, but it adopted
an amendment by Senator Barkley,
Democrat, of Kentucky, who intro
duced the bill, to prevent loans for
any project which would be "in sub
stantial competition" with private
enterprise.
Senator Barkley, the majority
leader, said the committee probably
would complete action on the bill
To-Day and that, if it did, Senate
consideration would begin Monday.
He added, however. that it was
doubtful whether Congress could
adjourn by the end of next week.
Mr.. Jones testimony before the
Banking Committee indicated he
thought a proposal to broaden r..
r. c. authority to insure loans to
business was not essential, although
ne has said it might have a good
enect IN calling attention of business
TO what the corporation already is
able to do in this direction. The
oroadened authority, urged by SEN
ator Mead, Democrat. of New York
(See T,ENnTNCs De-.