Evening star., 1939-06-23
Giant Loan Program
Causes No Surprise
In Wall Street
Recent Reports Had Set
Even Larger TotoI
To Aid Recovery
" the Associated Press.

~ the Associated Press.
NEW YORK, June 23.-Wall Street
gave scarcely a nod yesterday to
President Roosevelt's proposal of a
$3,860, 100000 program to stimulate
business through self -liquidating
projects and low-cost housing de-
velopments.
Reports trickled in over the finan-
cial tickers that some congressional
leaders were "astounded" at the
dollar size of the plan. But not
Wall Street.
Evidently Congressman don't read
newspapers" one broker said. New
lending plans had been hinted all
along
The Presidents proposal, rather
than startling the financial COM
munity by its size, really fell under
expectations. Reports have been
going the rounds that it might be
$4,000, 100000 outright spending the
President had in mind-rather than
only s3,860, ,000, 900 lending strung out
over as much as seven years on
SSAiAS W PSo S1 pIOJCCtS.
Rail Plan Studied.
What took the eye of Wall Street
circles first was the part of the
proposal dealing with railroad equip
ment. The President suggested
creation of Government authority
to buy railroad locomotives, freight
cars and other rolling stock and
lease them to the car-riderS, with
the Government retaining title. The
plan called for Ultimate expenditure
OF around $50,000,000 for such equip
ment, with 100000 900 to be spent
In the II months beginning July l
and the rest spread out over a num-
Der of years.
The Presidents plan was made
public just as brokers were giving a
second reading to morning news
papers, which carried stories stating
class railroads in the first five
months of this year placed in service
I'LL new freight cars, contrasted
with 5,786 in 1898. The stories also
mentioned II new steam locomotives
were placed in service in the first
five 1889 months, contrasted with
los in the like period last year.
New equipment buying generally has
been pretty slow since the depres-
sion.
New steam locomotives cost
around 100000 or more each. New
freight cars cost around S2,5O0.
Traffic men admit it's hard to get
tn
ment expenditures. Board members
are still cycling the heavy losses put
down on railroad ledgers during de-
preston years.
Equipment Needed.
Executives agree, however, that
the increased efficiency the carriers
have been striving for to pare op-
Grating expenses probably could be
achieved quickest and easiest by re-
equipping lines with modern rolling
stock. Many locomotives now in
service are 20 to 80 years old. They
eat up coal faster and generate far
less motive power than the modern
engines now being built.
But would the railroads lease new
equipment from the Government If
the Government bought it and put
it up for hire? That's the big aues-
ton pondered.
Would the railroads lease new
equipment in preference to using the
locomotives and cars they now own.
which for many years have handled
passengers and freight adequately
without serious shortages of cars?
You can lead horse to water,
but can you make him drink? par
ried railway executive when asked
whether he thought the carriers
would freely lease Government
owned equipment if it was provided.
Effects to Come Slowly.
Under the plan only $870,000,000
of the S3,860 100000 would be dis
bursed in 1910, with the remainder
flowing out in from two to seven
years. Because of the proposed
relatively slow long-term trickle of
the S3,860, ,000, 900 into projects, COM
pared with past boosting
spend-lend pump printing" and the
overnight $2,491 100000 soldiers
bonus distribution in 1886, most
financial circles were of the opinion
the loans, If approved by Congress,
would only mildly stimulate general
business at any given time in the
seven-year period.
You couldn't expect the stock
market to run wild over merely
proposal" said a broker. After all,
It's only a proposal so far Congress
hasn't even considered it yet"
Average Milk Sales