Evening star., 1951-06-01
Washington Lawyer
Named 10 investigate
|RFC Loans 10 B. 60.
By Robert K. Walsh


Joseph j. Smith, jr.. a Washing
ton attorney, was chosen today by
Reconstruction Finance Corp. Adj
lministrator w. Stuart Synington
to study that agency's loans to
the Baltimore g. Ohio Railroad.
The Senate Banking Committee,
meanwhile, gave out a proposed
report prepared in 1947 and highly
critical Of the loans that totaled
I$87 million between 1882 and 1899.
Released under the signature Of
Senator Tobey, Republican, of
New Hampshire and not as a conn
Imittee-approved document, the
report urged that the whole his
tory Of the loans be referred to the
Justice Department for further in
lquiry and possible prosecution. It
charged the RFC and the company
with "collusive and irregular deal
lings."
Mr.. Symington said at news
conference that he is in no posi-
ltion to comment on any aspect
lof. these loans because II just
don't know what the facts are. !"
He explained that he requested
Justice Department assistance in
continuing an inquiry that was
started several months ago by
lRFC directors whom he recently
replaced.
May Take Several Months.
Mr.. Smith will examine the
legal phases of the B. g. o. loan
record and report directly to him.
Mr.. Synington announced. The
study might take several months
and probably will include inter-
views with some present or former
officials of the agency and the
railroad, he added.
Mr.. Smith, a member Of the law
firm of Hogan & Harrison, is a
special counsel to the Federal Re-
serve Board in its proceeding in
the Transamerica Corp. He was
chief counsel Of the Federal Trade
Commission in charge of appellate
work from 1941 through 1945. He
lis a native Of Meridian. Miss, and
Ia graduate of the University Of
Alabama and Harvard Law School.
In other moves today Mr.. Sy-
mington:
/. Issued a list of principles
and procedures" to guide all agen-
icy officials in acting on loan ap-
Iplications. This policy statement
set methods of determining wheth-
Ier loans would be In the public
interest, anti-infiationary. and as
sist in the production Of goods
and services necessary for mill
tary and essential civilian require
mentS.
Loan Information Disclosed.
2. Reported that between May
n. the day he took Office. and
May % the RFC approved 119
loans totaling $500, 1926. All
Except nine of those loans were
flor amounts under $100, 900. RFC
turned down 70 loan applications
Itotaling $10.159. .697.98 during that
period.
3. Made public complete list
Iof loan applications granted dur
ling those weeks. and announced
that similar information will be
available every Wednesday here
after. Data on rejected loan ap-
iplications will not be given out.
4. Appointed Nathaniel Royal
as RFC deputy controller. Mr..
Royal. has been with the agency
since 1898. He was assistant con-
troller from 1947 to last March
when he became acting controller
following the resignation Of VIII
lard E. Unzicker.
Much of the Senate committees
proposed report leaked out in re-
lcent weeks Senator Tobey. who
was chairman in 1947. frequently
has made public statements crit
|icizing many features of the loan
arrangement on which the rail-
road still owes about $76 million.