The Wilmington morning star. [volume] (Wilmington, N.C.) 1909-1990, 1945-10-06
The RFC
By ARTHUR KROCK


Foreign Economic Administration the State
Department grabbed operating fragments of
the FEA which have added general merchan-
dising to diplomacy and high policy-making,
the functions to which the Department should
be limited: Before that, the State Department
also acquired the remnants of the Office of
War Information and parts OF the Office of
Strategic Services-it is not yet certain which
and how many-which add equally incongru-
Gus duties to those normally assigned to the
Secretary of State and, with respect to the
OSS, risky as well.
But when the FEA was broken up wiser
counsels prevailed with the President to the
extent that he made certain transfers to the
Reconstruction Finance Corporation which re-
store to the RFC all the functions it had prior
to July IS, 1913, except direction of the Ex-
port-Import Bank. The President returned to
their original and logical authority the Rub
Der Development Corporation. created to pro-
duce and procure rubber in South America,
the United States Commercial Company, the
Federal agent to purchase critical and strate.
gic materials abroad the Petroleum Reserves
Corporation, organized to develop foreign oil
sources, and the power to buy abroad all
materials except food.
These units President Roosevelt took from
the RFC when he removed the Vice Presi-
dent Mr.. Wallace, as head of the Board
of Economic Warfare, abolished the board and
formed the Office of Economic Warfare, later
FEA.
Mr. Wallace had openly and bitterly attack
ed the then Secretary OF Commerce Jesse
H: Jones, who, as Federal Loan Administra-
tor also, was the directing force of the RFC.
Mr.. Jones replied in kind, and the President S
move was to end the quarrel. But to appease
Mr.. Wallace and his supporters he clipped the
RFC so that it could not be said that he had
decided the row wholly for Mr.. Jones, who
remained as Secretary of Commerce and Fed
eral Loan Administrator.
The President said there was mot sufficient
time to investigate and determine where the
truth lies in your conflicting versions, and
that he had therefore decided to put all the
economic warfare units in one basket and new
hands. But in so doing he performed an am
putation on the RFC. And President Truman
has now fitted back all but one of the missing
members.
The DEW and its successor, the FEA re-
tanned the BEW's authority to direct the RFC
to supply funds for certain of its operations,
and in the opinion of many, this perpetuated a
bad arrangement under which many millions
had been spent by Missionaries and social-eco-
nomic planners in an attempt to force their
political philosophy on other nations, The Gov
eminent entered into contracts which have
been assailed as unbusinesslike, and engaged
in costly experiments which, it was urged,
did not aid the war program.
These examples are cited by the critics:
While the BEW had authority to require the
RFC to provide funds, it conceived what is
known as the cryptostegia program which was
supposed to provide source Of natural rub
Der. But though over 81 millions were spent
in planting this weed in Haiti, no rubber, it is
asserted was obtained.
The RFC, on the direction Of the BEW
bought millions of dollars worth of machinery
for use in the production of mica and quartz
crystals in Brazil without determining in ad-
vance whether the Brazilian industry could be
mechanical. 1t then developed according to
the charges, that the industry could not be
thus converted. But the machinery had been
bought and shipped. and the further charge
is that it rusted in storage and on the docks.
When the BEW's authority to issue direc-
tives to the RFC, the only Federal agency
with business experience, went to the OEW-
FEA (of which Leo T. Crowley was made
Administrator, he put a check-rein on the
policies which were responsible for the
charges listed above and many others. But
some OF the authors and executors of those
policies went over to the FEA, and Mr..
Crowley had a hard job of policing them. It
is improbable they will get through the RFc
screening process, which was devised by Mr..
Jones to keep out Missionaries and is still be-
ing used by that agency.
The RFC has now come almost full cycle
from the date of July Is, 1913, when Presi-
dent Roosevelt stripped it Of these units so
that Mr.. Jones also would seem to undergo
some public reproof for his part in the quar-
rel with Mr.. Wallace. That was thought to be
good politics, with 1914 coming on and Mr..
wallace candidate for denomination as Vice
president, backed by the radical supporters
OF the administration. In the opinion of the
Presidents political management these
elements must be held in line if the party
ticket was to be elected, whether or not the
Vice President was on it, That reasoning help
ed to assure the transfers from the RFC which
nave now been restored by Mr.. Truman, act
ing on the advice of close students of the
governments business structure who do not
think in terms or politics.
The action sustains hope that In due course
the President will take from the State De-
partnent some of the incompatible duties
which it sought and he has assigned to it,
New York Times
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