Evening star., 1941-10-26
Jesse Jones Guards
Defense Finoneing
By OUen l.. Scott.

The dollar-a-year men who came to
Washington one year ago to run this
countrys armament program gradually
are packing their bags and moving home.
They guessed wrong on the size OF the
defense job, while the New Deal group
guessed right, and they're paying the
penalty for mistaken judgment.
With this night won, the official group
that believes the United States will be
forced to strain every muscle to win the
present war is looking around for other
situations to attack. In recent days their
eyes have rested on Jesse Jones and the
defense agencies that he directs. Tell
tale hints are dropped that maybe Mr..
Jones is not getting the money that he
commands into use fast enough.
Jesse Jones is Federal loan admins
traitor and as such Is in command Of vast
Federal Government banking operations.
Among other things, he commands the
Reconstruction Finance Corp, the De-
fense Plant Corp, the Metal Reserves Co.,
the Rubber Reserve Co. and number Of
other corporations. He has outstanding
for defense purposes total Of loans and
commitments amounting to s4.50o 900 coo.
But, while this overall figure is very
impressive, some officials point out that
the figure Is made up largely Of COM
mltments to spend some time In the fu-
ture and very secondarily of cash actu-
ally flowing out The cash outgo OF this
phase of the defense program has been
running at the rate Of about s50000.000
a month, as contrasted with a flow OF
more than 81 900, 900 900 month in other
defense activities.
On the surface it seems that something
might be wrong. A glance under the sur
face discloses what really is happening.
Mr. Jones Is found to be carrying on q
very difhcult banking operation AS one
important phase Of his activities he is
engaged in financing the construction Of
defense plants. His commitments In this
field amount to about s., 900 900 900. That
is a larger total of plant than was con-
structed in the entire first World War.
Much Of this plant Is tied In with pri-
vately owned plant and contracts cover
ing its construction and operation in
volve long negotiations and intricate
agreements.
For example: O. P NJ decides that
the country should have 10000 900 more
tons of steel capacity to cost about ST.
250,000 600 The announcement is made
and the public Immediately assumes that
the facilities for producing this steel will
spring into being overnight. Actually.
the problem only starts with the an
nouncement.
Jesse Jones gets the job of financing
construction of the needed plant. He
could create a new steel company buy a
corn field and start building an entirely
from the established industry. This is a
high-cost operation and one that would
take long time to carry out. although
the dollars could flow faster and in
larger quantities. Or, Mr.. Jones could
work out deal with existing companies
to expand their facilities at lower cost
and with the prospect of more speedy
production and better production in the
end.
To work out deal is time consuming
and difficult matter. A private company
may start the bargaining with the pro-
posal that the Government construct for
it the most modern plant in the world to
be operated during the emergency and
then to become the companys property
afterward at no cost to it. Mr.. Jones' if
he wanted, could make that sort OF deal.
However. he insists upon a bargain that
protects the Governments investment
during and after the emergency period
This ilsistence takes time at the start,
but in his opinion it yields results in the
end. and is the only fair thing from the
taxpayers viewpoint.
In other words, Mr.. Jones isn't throw
ing away the peoples money. He is
making big deals, at a rapid rate. that
will result in the rapid construction Of
plants to produce the war materials that
this country is seeking.
second phase Of the operations car
ried on by Jesse Jones concerns the
building Of stockpiles Of vital raw mate
rials.
Here his operations extend around the
world. AS matters stand today, Mr..
Jones will buy any metals offered for sale
by any Latin American nation. He Is
buying the Turkish chrome that Hitler
tried to buy. He is taking the entire rub
ber output of the Dutch East Indies His
rubber purchases are so large that before
many months the present restrictions on
private use of rubber will be relaxed. He
is bringing tungsten out Of China in large
and growing amounts.
However, once again Jesse Jones is
insisting that the United States be given
fair deal in any purchase. He insists
upon a price that is reasonable. AS a
buyer who is in the market with more
than 81 900, 900 900 to spend for raw ma
terials. Mr.. Jones is in a position to see
that the price is fair.
In word, Jesse Jones regards his
function as that Of big banker and big
businessman who is out for quick results,
but who refuses to waste his money
His belief is that Congress and the
President and the country want to follow
that kind Of policy instead of a policy
devoted to.spending merely for the sake
Of showing on paper that large totals Of
dollars are spent Unless the spending
Is done with care and consideration, the
paper figures Of expenditures may be
startling, but the results in terms of