Evening star., 1951-10-29
Defense Firms
Acknowledging
FCBorrowers
Funds for Luxury
Jobs Halted Since
Symington Took Over
By Robert K. Welsh

nave cauSeQ major Snlft IN Re-
construction Finance Corp. lend
ing activities.
Loans approved by RFC from
last May 7 to October under
Defense Production Act authority
amounted to 68,505, TAB, a survey
showed today. That is by far the
largest total for any class of loans
at this time. 1t exceeds by al
most $40 million the total of or
dinary business loans by the agen-
cy during that period.
Under the Defense Production
Act, RFC and several other Gov
ernment agencies can make loans
+ to private business enterprises Ito
expedite production and deliveries
or services to aid in carrying out
Government contracts for pro-
curement of materials or per-
formance of services for the ma
Itional defense Such loans may
be made for expansion of plant
capacity. development of techno-
logical processes. production of
essential materials, and Simlla.
projects.
400 Business Loans.
Since w. Stuart Symington be-
came administrator last May 4
following an agency shakeup and
Senate subcommittee disclosures
of abuses. RFC approved 1880
loans, as of October l. Those to-
tailed $156,4l1.292, of which ap-
proximately $2,5 million repre-
sented participation by private
banks.
The 1880 overall figure is con-
lsiderably smaller than the loans
in corresponding periods of recent
years. although exact comparisons
were not readily available today.
There were 400 business loans
totaling $40, ,181,25l during the
five months. The number, total
and average size of those loans
also we're substantially smaller
than for such loans in the past.
Most of the business loans were
approved for small companies
eager to convert to some kind of
defense work.
Policy Changed in May.
Another main factor in the drop
in the number and amount of busi-
ness loans, officials explained, was
a policy change ordered by Mr..
Symington last May. That put an
end to loans for such projects as
swank hotels or to applicants who,
in RIGS opinion. could get credit
from private sources.
There were only 81 loans by
RFC from May through Septem-
Der under Defense Production Act
provisions. But % are currently
lin the works" at the agency. An
other 274 are awaiting determina-
ton by the Defense Production
Administration or the Agriculture
Department as to whether they
come within the class of such
loans.
Those applications have been
coming at such a rapid clip that
RFC. with its rubber and tin pro-
grams as we'll as lending activities,
is taking an increasingly prom
inent part in the defense effort,
agency spokesmen commented.
Mr. Symington remarked sew
eral days ago that this indicates
RFC occupies d necessary place
in the national economy and
should not be scrapped despite
abuses brought to light in con-
gressional inquiries.
Other Totals Listed.
Besides the RFC loans granted
under the production act and in
the business loan classification,
the totals of other approvals dur
ing the five months period in
cluded:
Catastrophe loans, $11 ,206, ,292:
public agency loans, $7,518.000;
and India emergency food aid pro-
gram, $40 million.
Practically all the catastrophe
loans were in connection with the
Missouri and Kansas floods last
summer. OF the total for State or
local public agencies. more than
81 million was loaned the CITY,
owned Cleveland Transit Co. in
addition to an earlier loan.
The trend in loans under the
Defense Production Act could lead
to an increase over the RFC loan
figures for the past fiscal year,
despite the falling off of business
loans, officials noted.
RFC approved 2,7O2 loans total
ing 1901 ,349.014 during the fiscal
year which ended last June 80.
During the 1850 fiscal year it ap-
proved 5,506 loans totaling $685.
639,671.
Most Of the 1880 approvals to-
falling $156,411,292 in the five
months prior to October / this
year were after the start of the
current fiscal year July /.