Evening star., 1952-12-30
KFCs Future Looks Dim
But 1t May Be Saved
Quick Republican Decision
Appears the Only Woy
The Political Mill
By Gould Lincoln

One of the high policy decisions
which the Republicans must make when
they take over the Government next
month is whether the Reconstruction
Finance Corp. is to be abolished. Under
existing law, the RFC lives until 1856.
But the advocates of economy and pri-
vate business are after it. A bill to elimi-
nate the agency, which since it's creation
in 1882 has dealt in billions of dollars of
Government loans and has financed
many Government-controlled corpora
tionS, is expected to be introduced soon
after Congress meets. A similar bill was
defeated in the Senate by only two votes
during the present 82d Congress.
Both Senator Byrd Of Virginia, Demo-
crat. and Senator Bricker of Ohio, Re-
publican, have said they will renew
their efforts to abolish the RFC. Senator
Byrd. commenting that the agency was
created to meet an emergency growing :
out of the depression in 1882, said that
he believed that there was no longer
any need for it; that private capital
and banking could and would take care
of any loans that should be made. He
added that if the Republicans meant
what they said about returning to the
American system of private business
and about taking the Government out
OF business, this was a step which could
be taken without delay and without
harm. The Government, he added, Is
deeply engaged in private business,
growing out of policy of the last
20 years, which has sought to teach
the American people that the Govern
ment can do their business for them
and should do it.
"It's one step the new administra-
ton can take which will indicate to the
people that it intends to live up to its
promises of Government economy and
of private enterprise rather than Gov.
ernment bureaucracy" the Virginia Sen
ator said.
Results of Inquiry.
An inquiry two years ago into the con-
duct of the RFC, by Senate subcom-
mittee headed by Senator Fulbright Of
Arkansas, developed the mink coat"
and political preference scandals in the
agency. 1t forced a reorganization of
the agency, after the scandals had cut
close to the White House. Ever since,
Senators like Byrd and Bricker have
demanded that the agency be elimi-
mated, contending that it has long since
served its purpose and that any deserv-
ing project can get all the money it
needs today from private banking and
business sources. They say, too, that
If emergency arises again, Congress can
quickly restore the agency or similar
one.
The RFC has lived q score of years.
1t was established during the Hoover
administration to provide business loans
that private banks were not able to
grant. 1t was to last for 10 years, but
later was extended through June, 1856,
Up to last September, the RFC approved
approximately $4,000 business loans, to-
falling $5.5 billion. When World War II
came along, the RIGS powers were ex-
tended to cover programs for synthetic
rubber, aluminium products and other
scarce materials. It handled billions of
dollars more of loans. It's time head.
Jesse Jones. recently published a book
entitled $50 Billion Dollars" giving a
complete history of the organization
while under his direction as chairman
Of the board.
Record of Senate Votes.
A survey by Congressional Quarterly
shows that of the SO Senators in the
AACW ooO NOuSIcSS, o( nave previously
voted on this question of continuing the
RFC. In the past "A have wanted to
keep the agency alive, while 43 have
favored doing away with it. Some of
them took their stand for or against the
agency while members of the House.
One freshman Senator, w. Stuart SYM
lngton Of Missouri, Democrat was for
time RFC administrator, after the
reorganization in 1851. He is for re-
tanning it. Nine "uncommitted fresh
men Senators" seem to hold the fate of
the agency in their hands, They are
Price Daniel, Texas Democrat, and Re-
publicanS Kuchel of California, Barrett
OF Wyoming, Cooper of Kentucky, Girls
void of Nebraska, Goldwater of Arizona.
Payne of Maine. and Purtell and Bush
OF Connecticut. If the holdover Sena-
tors vote as they did in the past, the
outlook for the RFC is decidedly not
bright. Only prompt decision by the
Eisenhower administration to fight
elimination of the agency seems likely
to save it.