Evening star., 1955-03-14
Hoover Commission
Urges CurtaiIment Of
Government Loans


The Hoover Commission says
It believes private enterprise
should be allowed to take over
many of the Governments ex-
tensive lending and loan guar
antee-insurance activities SUBJ
ject to continued Federal con-
troll.
The commission headed by
former President Hoover stressed
the idea of combined private
Government operation last night
in recommending a broad re-
organization" of the 104. Fed
eral lending, insuring and guar
anteeing agencies.
The group urged in a report
to Congress that some Of these
agencies be abolished. 1t called
for an increase in charges to
make the remaining units self
supporting.
Such a reorganization, the
commission estimated, would
mean the Treasury could re-
capture about $6,250.000,000 in
capital funds. Furthermore, it
said the step would mean an an
nual saving to the Government
of about 5000 million.
Now Total S244 Billion
According to the report, Fed
eral loans. guarantees and in
surance now total $244 billion.
Among the agencies whose
functions the commission tagged
for transfer to private enterprise
were the Federal Housing Ad-
ministration and the Rural Elec-
trification Administration. The
FILA insures loans for home buy
ers. The REA lends money to
co-operatives to build facilities
to provide electric and telephone
service to rural areas.
One recommendation almost
certain to arouse controversy
called for an end of Government
price support loan to farmers
The commission suggested IN
stead that the Government enter
into crop purchase contracts at
support levels. The farmer then
could choose whether to sell his
crop to the Government or to
private parties.
The commission asserted that
the proposed changeover would
free the Government of handling
thousands of small loans, but
would not alter the farmers
price support protection. 1t said
the farmer could use a Gov
ernment crop purchase contract
as backing for a private bank
loan.
Holifield Dissents
One member of the commits
sion, Representative Holifleld,
Democrat, of California, entered
a strong dissent, contending the
recommendations-if put into
force-"would make it harder
for American citizens to buy
homes or to get loans for their
farms or businesses"
Mr.. Hohfield said the commits
sions recommendations point
in the direction of tighter agri-
cultural credit, a slowing down
of housing construction, restrlc-
tions on the rural electrification
program, and limitations on
other direct or indirect aids pro-
vided by the Federal Govern
ment.
One of the commissions sug-
geStions drew the objections of
5 of the groups II members,
1t was a proposal that Congress
take away the Export Import
Banks authority to make short
term loans like those made by
commercial banks.
See Foreign Policy Peril
Among the dissenters were At
torney General Brownell and
Defense Mobilizer Arthur S.
Flemming, who contended the
plan might harm United States
foreign policy.
The commission said these
amounts could be recovered by
reorganizing the following agen-
cies to make them self-support-
ing and to merge them into the
private enterprise system:
Banks for Co-operatives, $3.50
million; Federal intermediate
Credit Banks, $62 million; Fed
eral National Mortgage Associa-
ton, $2.233, 100000; rural elec-
triflcation administration, ST.
09l 100000.
The commission said that liQ-
uidation of the following agen-
cies would result in these saw
ingS:
Twelve production credit cor
porations, SAG million; Export
Import Bank S1,428,192,000; Ag-
ricultural Marketing Act revolv-
ing fund, $50 million; Federal
Farm Mortgage Corporation SIG
million; loans for college hous-
ing, $155,751 600.