Evening star., 1951-04-08
Truman Plan for RFC
Faces More trouble;
Senate Vote Near

President Truman's S proposed re-
organization of the Reconstruc-
tion Finance Corp faced mount
ing opposition as the Senate
moved toward a vote this week
and opponents got heavy ammu-
milton from former President
Hoover yesterday.
sSenator Byrd, Democrat of Vir-
ginia. sponsor of a bill to END
the agency, gave out letter ir
which Mr.. Hoover favored aboli-
ton.
advocates Of the President s
Han were jolted earlier in the
week when the Expenditures Com
r3ittee urged passage of a resolu-
ton to reject the proposal. In
the 7-to-6 vote. Senator Robert
son, Democrat of Virginia, sided
With Republican members.
This indicated that the Presi-
dents recommendation which
narrowly sQueaked through the
House last month might be killed
in the Senate this week. 1t would
automatically go into effect April
20 unless rejected by 49 votes or
more. At least three Democrats
are set to vote against the plan
but its Democratic advocates are
counting on one or two Republi-
cans for support.
Fulbright Leads Fight.
- Leading the fight for approva,
of the Presidents plan is Senator
Fulbright, Democrat, of Arkansas
who has been a severe critic OF
the agency. A Banking subcom.
mittee of which he is chairman
brought out evidence of political
influence and other shortcomings
in the operation of RFC.
The subcommittee may hold
further hearings Wednesday OF
Thursday to look into new charges
by Senator Tobey. Republican
of New Hampshire. He informed
the subcommittee in closed session
he had reliable reports that efforts
involving some "big names" were
made to upset the inquiry into
RFC. Senator Tobey told report
ers yesterday he is ready to &c
ahead" and testify publicly.
The subcommittee, meanwhile
is turning over to the Expendi-
lures Investigating subcommittee
a considerable amount of material
for full-scale of surplus ship
deals and other activities men
toned in the course of the hear
ings on RFC.
Hoover is Powerful Foe.
The letter from Mr.. Hoover
who was President when RFC was
created as an emergency lending
agency in the depression, was re-
garded as powerful support of the
Republican drive not only to de-
feat the Truman proposal but to
put RFC out of business.
Recalling that the government
tai reorganization commission he
headed three years ago was unable
to agree on abolition of RFC, Mr.
Hoover declared: 81 favored gabo-
lition and do yet
The commissions report, he re-
called, warned that direct lend
ing by the Government to persons
and enterprises opens up danger
Gus possibilities of waste and IA
voritism" and Invites political
and private pressure, or even cor
yuption.'
Reviews Had Been Urged.
The report. Mr.. Hoover stated
urged congressional review of RFC
powers taking into account the
problems of economy, efficiency
and integrity"
It also suggested that Congress
restrict RFC landing powers ir
non-emergency periods and put
strict limits ION direct loans in or.
der to insure that normal chan
nels of credit are utilized to the
maximum extent possible or, al.
Tentatively. provide for the guar.
antee of loans made by private
or other established agencies"
A further recommendation oi
the commission was that RFC
now an independent agency, be
placed under the Treasury De-
partment with general supervision
vested in the Secretary of the
Treasury, Mr.. Hoover wrote.
Main features of President
Truman's reorganization plan are
that the present five member
board of directors would be re.
placed by a single administrato.
and that a special board be estab-
lished to act on loan polics
matters.