R. F. C. Outgo

BOARDS & BUREAUS

Cornerstone of the relief program on which President Hoover is seeking reelection is the $3,800,000,000 Reconstruction Finance Corp. Nominally controlled by non-partisan Democrats, R. F. C. is the pride of most Republican stumpsters. Last week campaign orators were supplied with some mouth-filling figures when R. F. C. reported to the country on its first seven months' operation (to Sept. 1).

During this period R. F. C. lent $1,182,734,958. exclusive of advances for direct relief and self-liquidating projects, to 513,231 borrowers. Principal debtors and the amount obtained by each group:

507,632 Farmers $ 64,201,989

4,324 Banks 784,214,459

391 Bank Receivers 39,290,150

643 Building & Loan Associations 80,343,033

79 Insurance Companies 71,822,700

49 Railroads 243,073,392

R. F. C. also authorized $226,101,268 loans which, up to the date of the report, had not yet been drawn. Repaid loans totaled $150,890,897.

Out of its $300,000,000 fund for direct relief R. F. C. up to Oct. I had advanced $34,455,171 to 25 States, nine counties, three cities. Chief borrowers:

Illinois $14,000,000

Wisconsin 3,000,000

Pennsylvania 2,500,000

Ohio 2,337,000

Louisiana 2,104,928

Missouri 853,958

Colorado 847,600

King County, Wash 675,000

Detroit 1,800,000

Since Oct. 1 additional relief loans have been made as follows: Pennsylvania $3,342,183; Kansas, $450,000: North Carolina, $815,000; Florida, $333,715: West Virginia, $213,891; Texas, $110,000.

Seven self-liquidating public projects were the recipients of $121,584,620 in R. F. C. loans:

San Francisco Bay bridge $62,000,000

Metropolitan Water District of

Southern California $40,000,000

Mississippi Bridge at New Orleans 13,000,000

Middle Rio Grande Flood-Control District 5,784,000

Madison, S. Dak. (municipal power plant) 105,000

Ogden, Utah (water works) 645,620

Prescott, Ariz, (water works) 50,000

No slum elimination loans have yet been made.

A widespread suspicion existed that R. F. C. had made this accounting to the country to thwart further publication under the law of its month-to-month activities. When Clerk South Trimble of the House of Representatives released R. F. C.'s July report (TIME, Aug. 29). the corporation's directors were greatly dismayed. Late last month Chairman Atlee Pomerene submitted his August report to Clerk Trimble, begged him to hold it in confidence. "The publication of the July report," wrote Democrat Pomerene to Democrat Trimble, "caused serious embarrassment to a number of borrowers. It gave rise to much unjust criticism, resulted in withdrawals from some banks. Other banks which intended to apply to the corporation for loans have refused to do so because they felt that publicity would do them great harm. . . . The board hopes that in a spirit of cooperation you will help it by refraining from publication which is fraught with so much harm to borrowers."

After a week's thought Clerk Trimble decided he had no legal choice in the matter. He released the August figures. July's publication, he found, "did not have the bad effect upon the banks as predicted."

During August, the report showed, R. F. C. authorized loans of $186,209,310, of which $50,000,000 was for cotton stabilization and $13,931,669 for direct relief. Banks were given credits of $85,057,605. Their names filled more than a solid page of newsprint. Most borrowings occurred in Iowa, Pennsylvania, Wisconsin. Most loans were small sums to small banks in small towns. Big loans authorized:

Baltimore's Union Trust of Maryland $12,500,000

Detroit Trust 3,000,000

Highland Park (Mich.) State Bank 2,000,000

Greensboro's North Carolina Bank & Trust 6,500,000

George D. Harter Bank, Canton, Ohio 1,750,000

Cleveland's Union Trust 2,000,000

Bank of Pittsburgh National Association (receiver) 2,730,000

Chattanooga's First National 1,060,000

West End Building & Loan, Newark, N. J 2,483,331

Houston's Federal Land Bank 3,000,000

Wabash Ry. (receivers) 4,575,000

One feature of R. F. C. financing discreetly soft-pedaled in Washington is that all advances are added to the Public Debt but kept out of the current deficit account. The Treasury has given R. F. C. $1,075,000,000 ($500,000,000 in capital stock, $575,000,000 in notes) which in turn has been financed by sale of Federal securities to the public. Today the Public Debt stands at $20,718,000,000 compared with $15,922,000,000 on June 30, 1930. Presumably repayment of R. F. C. loans after the Depression will cut the Public Debt by the amount of Treasury advances to R. F. C.

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