The Wilmington morning star. [volume] (Wilmington, N.C.) 1909-1990, 1944-08-10
Federal Corporations

For nearly TWO years the JOHN OolIlHl1ttee
on Reduction of Nonessential Federal Expen-
ditures, of which Senator Harry F. Byrd Of
Virginia is chairman has been making study
Of government corporations.
I'm a report to congress for release to the
public the committee states that there are A
government owned corporations with iabil-
ties of l6 IL billions of dollars, covered by
assets the value of which will not be known
for years to come. These corporations possess
borrowing power of 80 billions of dollars, plus
outstanding loans of IL billions. They are
operating at current operating expense Of
nearly 1O3 millions of dollars. The corpora
lions employ 10000 officials and employees,
who are scattered all over the world. All
figures are as of the fiscal year ended June
80, 1s43
So intensive was the investigation with re-
spect to government owned corporations that
the information gathered was too volunimous
to include in the 50 page report The commit
tee held numerous hearings in order to deter
mine what programs were being carried out
by the government in utilizing the corporate
form, and it also sought the opinions Of ex-
F perts in the field of corporations.
Some of these corporations, notably the Re-
construction Finance Corporation and those
functioning u n e the Coordinator of Inter-
american Affairs are world wide in scope,
and for the most part are handling billions Of
dollars without current control by congress-
treasury, Bureau of the Budget, or General
Accounting Office
Government corporations seem to have been
created with little thought as to their advan-
tages or disadvantages; some have been set
up without capital stock, and others have been
established with the idea or even the expressed
intention to up all capital in carrying out
their purpose The net proprietary interest of
the government in all it's corporations expand
ed from two billions, seven hundred millions
In 1888 to fourteen billions, eight hundred mil
lions in 1943 Most Of these corporations are
perpetual, to be wound up only when dis
Solved
Government corporations to a great degree
do business in competition with private enter
prise. They encroach upon and compete with
business, with business under serious disad-
eminent credit at low rates of interest; free
dom in some instances from federal state and
local taxation on property and securities, ex-
cept taxes on real estate; they also enjoy
the privilege of penalty mail and other con,
cessions similar to those enjoyed by regular
federal agencies. Add to these the prestige Of
government agency, and business meets
IN invincible competition.
There is no effective over all control. Alone
or in certain groups, these corporations are
autonomous. There has been growing indie
pendence on the part of the corporations to
resist attempts of the General Accounting Of
flee to audit their accounts; and on the other
hand, this office has failed to press its rights
Ii this matter under Executive order 6549
1.-THE conclusions of the joint committee were
."A great diversity in creation and organiza
ton of government corporations is noted
1.-The lack generally, Of over all control
current control by congress, Treasury ane
General Accounting office should have imme
diate attention.
'Some corporations carry on extra corpor
ate functions to an important extent-paymen
Of subsidies, price supports, buying and selling
ut loss.
Corporations were largely created to NEE
crisis or emergency.
The corporate form is entirely too free