Evening star., 1951-02-19
Truman Asks Reorganized RFC
With One Man Replacing Board
Of S. Other Sweeping Changes
Loan Agency Left
Independent in
New Proposal
By Joseph A. Fox

President Truman today sent to
Congress sweeping reorganiza-
tion plan for the Reconstruction
Finance Corp. under which the
present five-member board of di-
rectors would be abolished and
responsibility placed in the hands
of a new single administrator.
While the President had re-
submitted the names of the RFC
directors to the Senate, after as
sailing the investigation of the
agency by a Senate Banking sub
committee as Jasmine" he had
said that he had another reor-
ganization plan for the agency in
the works. He had indicated.
however, he would make another
effort to have it placed under the
Commerce Department, saying it
belonged there. The proposal to
continue it as an independent
agency represents a reversal of
his position.
The reorganization plan comes
Just ahead of a hearing Wednes-
day to air charges that a White
House aide and others have
exerted influence on the multi
billion dollar lending agency.
Sets Up Policy Board.
The Presidents plan provides
for the establishment of a FIVE
member loan policy board which
Mr. Truman said in a message
would promulgate general poll
cies which shall govern the grant,
ing and denial of applications for
financial assistance by the cor
poratien."
The loan policy board would be
composed of the following officio
members: the new administrator
as chairman, and the deputy ad-
ministrator as vice chairman, plus
the Secretaries of Treasury and
Commerce and a fifth member
who would be nominated by the
President and confirmed by the
Senate.
The President forwarded the
new reorganization plan to Con-
gress. after a lengthy fight which
has seen the Senate refuse to act
on five nominees for the RFC
board and in the face of charges
that the board has been sub
jected to outside influence STEM
ming to the White House.
Review System Provided.
In setting up the new organi-
zation the President provided that
all applications for loans or other
financial assistance in excess Of
100000 must go to a board of
review which in turn will make
its recommendations to the ad-
ministrator.
Board of review would be
created for individual cases with
five members designated by the
administrator from RFC per-
Sonnel.
The presidential order pre-
scribes that whenever any loan
or purchase of obligation shall be
approved or declined in any case
wherein the board of review has
recommended otherwise, the ad-
ministrator shall place in the
records of the corporation a men,
orandum setting forth his reasons
for granting or denying the f1nan-
cial assistance involved"
80 Days to Reject 1t.
The President submitted the
reorganization plan under general
authority under which it would
become effective in so days unless
turned down by Congress.
Earlier the President had been
rebuffed on a reorganization plan
that would have put the RFC
under the Commerce Department.
In a message accompanying a
copy of the executive order, the
President said that the admins
traitor would be executive head of
the administration with major
responsibility and authority over
the administration of the Govern
ment programs carried out by the
corporation"
The President said also that
the new plan will assure all loan
applications are handled in &C
cordance with established policy
and that it will provide additional
safeguards on loans and make for
better cooperation with other
Government agencies.
Sees Help for Small Business.
The President stressed that the
participation of the Secretary of
Commerce in the revamped ma
chinery would be important be-
cause that official administers
most of the Governments pro-
grams for non-f1nancial aids to
business.
He felt that it would also be
(See RFC, Page A-30