Evening star., 1940-02-16


has now been discovered to be in
itself one of the most far-reaching
weapons of economic coercion the
country has ever known.
The Reconstruction Finance Corp.
has had since it's inception in 1882
q reputation for being business
like. efficient and well-Ynanaged
banking institution. Indeed, it has
been conducted like a bank in its
lending operations. Nobody has
ever accused the r. F. c. of using
high-handed tactics or of allowing
its lending power to be used as a
club over American businesses.
But somehow or other the in
sidious influence of New Deal cru
sading which so often follows the
Machiayellian theory of the end
justifying the means has crept into
the management Of the r. F. c.,
. for, in q moment of evident thought
lessness, an arrangement was en-
tered into whereby disbursements
of funds would be withheld from
any companies which happen to
have been accused by the National
Labor Relations Board of violating
the Wagner law.
Taxpayers Money Used as Club.
It is true that when the arrange
ment was entered into last year
between the r. F. G. and the Labor
Board, the House committee investi-
eating the Labor Board had not yet
made its sensational revelations
demonstrating that the board con-
nives with employe organizations in
the framing of charges and cases,
and keeps up an intimacy with the
litigants on the employe side, which
has shaken the public's confidence
In the board.
But the fact that the r. F. G. or
the Treasury or any other agency
of the Government would in
formally and in secret enter into a
blacklisting arrangement by using
taxpayers money as a club over the
management of American enter
prises indicates how far gone is the
radical preachment inside the
bureaus and boards of the Govern
ment.
Amazing Development.
There could not be the slightest
objection to the withholding of
Government favors to any one con-
victed of a crime or any business
convicted in court of law of court
violation, but the idea that a board
which Is in itself judge, jury and
prosecutor and is. on questions of
law. at least, subject to review by
Federal courts, should be the in
fuential force in causing the r. F.
c. to hold up loans which other
wise might be made is an amazing
development which might we'll en-
gage the attention of the Congress.
What it amounts to, Of course, is
q sort of blackmail, because If q
company needs a loan badly and
has some labor difficulty in which
1t is the victim of frame-up charges,
the company does not dare to ap-
peal to a Federal court from the
board decision, but must obey at
once in order to get the funds it
needs from the r. F. c.
Congress never intended that the
lending authority should be a puni-
tive power, though many New
Dealers look upon every power of
Government as somehow related to
their sociological reforms.
New Deal Grievances.
If the principle embodied in the
blacklisting deal entered into by the
r. F. G. and the labor board is ac-
cepted as valid it means that any
time any one in the New Deal has
q grievance against a company ap-
plying for loan, the R. F. G. must,
In sense, be Influenced by the OBJ
lection. Thousands of commercial
banks will not feel happy hereafter
II they feel that the r. F. c., which
owns their preferred stock, can at
any time clamp down on them some
secret governmental power not au-
thorized by the statute but insisted
upon by the New Deal radicals.
The R. F. c. has so long enjoyed
such a reputation for independence
that many people who have ad-