Evening star., 1945-02-21
Postwar Jobs Bill
with Wallace Ideas
'Confronts Congress
BY the Associated Press.

By the Associated Press.
Regardless of what political fu-
ture befalls Henry A. Wallace, Con-
gress will be called on to act on a
major principle in his proposed pro-
gram for $4,000. 900 postwar jobs.
Chairman Spence said today he
soon will call public hearings before
the House Banking Committee on q
bill authorizing the Federal Reserve
System to guarantee financing in
stitutions against loss on loans made
to business enterprises The Gov
ernment would assume up to 80 per
cent of the risk.
Mariner S. Eccles, chairman of
the Federal Reserve Board, has sub
mitted to the committee a state
ment noting that this type of loan
has been used in financing war pro-
duction under the "V-loan" program.
He said "the guaranteeing of such
loans by the reserve banks would not
be competitive with the private
banking system in any way"
Antedates Wallace Nominat ton.
This suggestion for postwar busi-
ness financing antedates the nom
ination Of Mr.. Wallace to be Secre-
tary of Commerce. The Banking
Committee considered similar legis-
lation last fall, but never completed
its hearings.
Mr.. Spence said the proposal
originated in the Baruch-H Hancock
report on planning for the postwar
reconversion period.
In the Senate Banking Commit
tee, Senator Taft, Republican, of
Ohio is leading a move to pare
down the monetary powers Congress
granted the executive branch of
the Government in depression days.
He suggested amendments might
be attached to pending Federal re-
serve legislation to eliminate au-
thority:
l. To issue Federal Reserve Bank
notes which require no reserves
whereas Federal Reserve notes re-
quire reserves. About 5000 900 900
of hank notes have been issued un-
der this authority granted in the
Emergency Banking Act of 1888.
Would Drop Greenback Authority.
2. For the Treasury to issue
50 900 ,000,0 in "Greenbacks." No
use has ever been made of this
authorization.
Mr.. Eccles told Senator Taft at
committee hearings yesterday that
he would have no objection to such
amendments.
Mr.. Wallace, in outlining his
plans for a 10000, ,000- job program
before the Senate Commerce Com
mittee January 25, during consid-
Grafton of his nomination as Com
merce Secretary, said:
IT propose that the Government
guarantee the lender against any
special and abnormal risks which
may be involved in achieving our
objective. This will provide new and
expanding industry with plenty of
private credit at reasonable inter-
est rates.
Through this program we will
merely be extending to the financing
of old and new business the prin-
ciples which have proved so sue
cessful in our experience with the
V-loans, T-loans and Federal Hous-
ing Administration loans.
20 Billion of New Investment.
"As matter of fact a compra-
hensive investment program of this
character could make possible $20,-
000, 100000 of new private invest
ment each year"
Storm clouds already were gath
ering around the proposal that the
Federal Government back loans
made by banks and other lending
institutions. 4
Representative Wolcott, Repub-
lican, of Michigan, ranking Repub-
lican on the Banking Committee,
said this might be the first step
f1u,o vI tho. c<>cio 1;1o fi1v, ~ c,,o~a;tD