FINANCE FOR INDUSTRY

Dominion, Volume 27, Issue 147, 19 March 1934, Page 9

FINANCE FOR INDUSTRY

Government May Enter Banking Business UNITED STATES PLAN Opposition From Federal Reserve Board By Telegraph.—Press Assn.— Copyright. (Received March 18, 6.30 p.m.) Washington, March 16. The Reconstruction Corporation Finance Bill sent to Congress to-day will put the Government into banking business on an unprecedented scale. Loans will be made ot concerns employing a minimum of 10 persons, will have maturities not exceeding five years and will be contingent on an increased employment of labour. The concerns can build up reserves before repaying their indebtedness and the measure is otherwise designed to “meet every legitimate credit requirement of large and small industrial and commercial concerns.”

•.The legislation would grant power to. perform complete banking functions. President Roosevelt has long held tlie view that private banks were not adequately meeting the demand of business concerns for credit, and he is prepared to put Government agency directly in competition with them by allowing the granting of loans oil industry to individuals. Later in the day a i" tlier anomalous situation developed' when it was revealed that the Federal Reserve Board strongly opposed the corporation’s measure, and that it has forwarded, to Congress a measure of its own which provides for an industrial intermediate credit bank in each Federal Reserve District with a total of 300,000,000 dollars provided by congressional appropriation. The banks will be empowered to make loans either direct to industry or through the commercial banks for five years. Critics of the corporation plan pointed out that whereas the corporation was an integral part of the Government’s new system, the banks would be supervised bv tlie semi-independent and “bank-minded” Federal Reserve Board. A mysterious touch was given the whole matter when President Roosevelt. informed press correspondents that he knew nothing about the corporation’s measure. It is felt here that a quarrel is brewing between the corporation and the Reserve Board, M r - HM. Morgentliau, Acting-Secretary to the Treasury, supporting the latter.