Evening star., 1939-07-18
Lending
Continued From First Page.)

borrowing power OF the United
States Housing Authority, is in sep
arate legislation.
Secretary Morgenthau told the
committee he did not wish to pre-
dict that the Government will suffer
no loss on any of the various fea-
lures" of the program, but said the
projects had been selected because
of "a high probability of repay
mentS"
Mentioning huge sums of idle
money in the banks and low interest
rates, the Secretary said:
In times like the present, it there
fore becomes the Government S
function to act as catalytic agent
to bring together investors who are
willing to lend their savings at rates
of interest low enough and borrowers
who are able and willing to employ
funds for productive purposes.
"A low rate of interest, if effec-
lively utilized, constitutes one of the
most potent weapons our economic
system has developed for stimulat-
ing business activity - y.
Puts Men and Capital to Work.
1T is this principle of low interest
rates which is utilized in the bill
before you. The Government is
bringing together idle funds and
borrowers who are unable to borrow
under existing circumstances. 1t
does more than that
1T creates the additional incen-
tive for lenders to lend and for the
borrowers to borrow by giving the
stamp of approval and adminiStra-
tive assistance to useful and paying
enterprises which otherwise would
not be undertaken at this time. Thus
men and capital now unemployed
are put to work.
1T is an economic loss to permit
investment funds to lie unused when
they could be used in productive ef-
fort But that loss is trivial in COM
pariSon with the permanent and ir-
reparable economic loss of allowing
men of many skills to be idle when
there is useful work that they could
be doing"
Meanwhile, it was reported au-
thoritatively that President Roose-
velt advised his legislative lieuten-
ants yesterday he was anxious to
have the lending bill enacted at this
session.
Senator Barkley expressed the
view it could be approved promptly
In some form.
There was mounting opposition to
several features of the bill. Chair
man Wheeler of the Senate Inter-
state Commerce Committee sharply
criticized provision under which
the r. F. c. could buy up to $780,
100000 of railroad equipment and
lease it to the carriers. The roads
would rent the equipment for a pc
riod of years and then would receive
title to it.
If we start this leasing of rail-
road equipment" Senator Wheeler
said, the utilities will be here ask
Ing the same thing. Every other
industry in distress and the farm
ers who want new tractors. harrows
and plows will come, too. Ultimate
~ ~ WOuiu COSI Illt Government
untold billions"
Senator Norris, independent, of
Nebraska, an administration sup
porter, said he would oppose the
railroad leasing provision, and Sen
ator Harrison, Democrat, of Missis-
slppl asserted there was no chance
that the lending program could be
enacted in its present form.
Senator McKellar, Democrat, of
Tennessee, an administration adher-
ent, indicated opposition to the pro-
vision to lend s750,0OO,OOO for self
iquidating toll roads and bridges.
Support for the entire lending
program was voiced yesterday by
Jesse H. Jones, who took the
oath as Federal lending admin
1strator. AS head of the new con-
solidated agency, Mr.. Jones will re-
tain general supervision over the
r. F. c., but he was succeeded as
chairman of the latter by Emil
Schram, board member.
Mr.. Jones said the lending bill
should be passed before Congress
adjourns because it would take sew
eral months for much of the pro-
gram to get under way.