Evening star., 1951-03-16
Why Keep the RFC?

II the Reconstruction Finance Corporation
is to be kept alive, the reorganization plan
advocated by the President, and which has
survived a Republican attack in the House, is
clearly desirable.
Under this plan the five-man board of
directors would be abolished and all RFC opera
tions would be placed under single admins
traitor. Senator Fulbright, whose subcommittee
has been letting a little light into some of the
darker RFC corners, favors this change. The
single administrator system. he says, is "the
best method of preventing or at least minimiz-
ing the conditions now being revealed in our
hearings"
When this matter comes before the Senate,
however, that body should give very careful
consideration to the desirability of aboshing
the RFC. Certainly this should be done If the
reorganization would do no more than minimize
the disgraceful practices which have been
exposed by the Fubright committee. And even
if the change would prevent such practices,
which is doubtful, it is hard to see wherein the
public interest would be served by continuing,
in period of imitation, a Federal agency that
was created to meet need born of deep eco
nomic depression, and whose economic influence
in these changed times probably is definitely
harmful
When Herbert Hoover asked Congress to set
was in the grip of a paralyzing depression.
Normal sources of credit had dried up or had
been cut off. The need of Federal assistance
was Self-evident. STILL even so, Mr.. Hoover
urged that the proposed RFC Should be placed
in liquidation at the end of two years" But
the familiar pattern has been followed. Twenty
years later, when cheap, easy and abundant
credit is our greatest source of economic danger
the administration wants to maintain as
going concern an agency which has outlived
its usefulness, and which has become kind of
happy hunting ground for those who want to
finance dubious ventures with public funds.
The Hoover Commission task force which
studied the RFC strongly urged that it be abol-
ished. The full commission did not adopt this
recommendation, although it frowned on many
of the things the RFC had been doing. Senator
Byrd has taken up the task force proposal, how
ever, and has served notice that he will seek
the abolition of the agency, which he regards as
being not only useless in these times, but which
also serves as workshop for get-rich-quick
political predators''
The most meritorous argument that can
be made for continuing the RFC is that the
agency, if kept alive on standby basis, might
serve some useful purpose If conditions should
change. But experience has shown that Federal
agencies, especially agencies with money to lend
do not sit quietly by waiting for change of
economic climate. If the money is there the
smart operators will be after it. And the chances
are that they will always be able to get it, by
one device or another, regardless of whether any
public interest is served in the process. Sena-
tor Fulbright's statement indicates that this is
true, and in The Stars judgment the RFC
should be liquidated quickly as possible unless
better arguments can be made for its continu-
ance than have been heard to this time.