Relief at Last

Last week President Hoover had a Relief Bill he could sign. Speaker Garner had his Masses v. Classes campaign issue. The needy had what the White House would have denounced last year as a $300,000,000 Federal "dole." Reconstruction Finance Corp. had an increase of $1,800,000,000 in its capital. Private industry and individuals had an oblique chance to borrow from the Government. Taxpayers had a peephole through which to identify R. F. C. borrowers. And the country at large had a four-month rest from Congress.

Passage of the revised relief bill took five days, compared with five weeks spent on the bill President Hoover vetoed fortnight ago because, at Speaker Garner's insistence, it opened the R. F. C. to individual loans. The new measure, largely a duplicate of the original Wagner bill, contained the following principal provisions:

1) $1,500,000,000 for R. F. C. loans to States, counties, municipalities or other public agencies to finance self-liquidating public works like toll bridges, tunnels, water works, slum removals.

2) $300,000,000 in R. F. C. loans to States for direct relief to the jobless, distributed on basis of need but no State to get more than 15%.

3) $322,000,000 for a discretionary public works program, to be undertaken by the Treasury if & when it has the money. This program may never get off paper into stone and steel.

In the Senate Virginia's Glass got an amendment tacked on the bjll providing that "the Federal Reserve Board, by a vote of not less than five members, may authorize any Federal Reserve Bank to discount any individual or corporation paper eligible for discount after it has been determined that the borrower has been unable to obtain credit accommodation." This amendment meant that individuals and private industries could borrow directly from the Federal Reserve if member banks into which Reserve credit had been pumped refused to make loans. But so hedged about with restrictions was this authority for Reserve lending that Speaker Garner shrugged it off as a meaningless gesture compared with his own political plan for R. F. C. loans to all-comers.

Slapping at Charles Gates Dawes, whose Chicago bank got an $80,000,000 loan shortly after he resigned the R. F. C. presidency (TIME, July 4 & 18), the Senate forbade any advance to any institution with which any onetime R. F. C. director had been connected in the preceding year.

A House amendment, invented by Speaker Garner and sponsored by Representative Rainey of Illinois, the white-tufted Democratic floor leader, startlingly proposed that the R. F. C. report to Congress each month the names of borrowers, the amount and interest rate of each loan. Because all Government reports to Congress traditionally become public records, such a proposal could mean nothing less than full publicity for R. F. C. activities. When this amendment came to a House vote, the balloting stood 169-to-169. For the first time this session Speaker Garner had the satisfaction of breaking the tie, putting the publicity amendment into the bill.

Banks throughout the land were aghast at the idea of having their R. F. C. loans broadcast, thus revealing their uncertain condition. The R. F. C. was bitterly opposed. President Hoover summoned Senate conferees to the White House to hear R. F. C. officials explain how public confidence would be rocked by exposing borrowers in the Press. Declared the President : "The responsibility for whatever might happen must necessarily rest upon Congress."

"We're perfectly delighted to have the responsibility!" exclaimed Speaker Garner. "The Democrats are always willing to work publicly and in the open while the Republicans do so in secrecy. . . . The President said he was looking for a panic just around the corner. If it comes, he'll have this publicity feature as an excuse to offer the country."

For two days the publicity provision deadlocked the conference. The House flatly refused (172-to-150) to back down even if it meant no relief bill at all. Finally, assured that the President would not veto the measure, and comforted by individual opinions that the clause did not necessarily mean full publicity, the Senate gave ground, the bill passed. Representative Rainey, Speaker Garner's legislative handyman, summed up Democratic opinion on relief thus: "We're going to give President Hoover what he asked for and if it doesn't do the trick, God help him in November."

All that remained for the R. F. C. to do, before it embarked on this new phase of relief, was to raise $1,800,000,000 in cash, either by selling its own securities or appealing to its financial godmother, the U. S. Treasury.

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