Two-Year Sentence

In the press gallery of the House of Representatives sat the towering portly owner of the Houston Chronicle. He was availing himself of his prerogatives as a publisher, but he was not present on any journalistic mission. In fact, Chairman Jesse Jones was present for the perfectly good reason that he wanted to see on what terms his Reconstruction Finance Corp. would be given a new lease on life. Neither Mr. Jones nor any one else had any doubt that the one Recovery agency which has been an unquestionable success in its field would be continued beyond the date on which the law said it was to go out of business.

Ten days before Mr. Jones had reported satisfactory RFC accomplishments: Authorized were 20,316 loans to 10,589 borrowers for a total of $5,555,000,000.

Actually lent was $3,860,000,000 (exclusive of purchases of preferred stock in banks and insurance companies), of which $2,364,000,000 or 61% had been repaid.

Purchase of $1,202,000.000 of preferred stock, capital notes and debentures of banks was authorized.

Smallest loan sanctioned: $500. Biggest: $175,000,000 (to First National Bank of Detroit).

Of the loans made to 914 banks that subsequently closed, all have been repaid.

Interest and dividends collected and accrued amount to $65,000,000 more than the corporations' expenses, not counting $16,000,000 interest on relief loans to States (which Congress has forgiven).

As Chairman Jones listened in the House Press Gallery, he heard fellow Democrats on the floor denounce the RFC as a tool of the bankers, heard Republicans champion it as the salvation of the country. No G.O.Partisan forgot for a moment that it was President Herbert Hoover who had the RFC created in January 1932, and who, by proclamation, continued it for a second year. When Franklin Roosevelt became President, he scorned this Old Deal agency for many a month, allowed it to lapse almost out of sight. When he finally got around to coordinating it into his recovery program, he discovered it was one of the most useful agencies at his command. In 1934 he got Congress to continue it for a third year and last week Mr. Jones was watching the House renew its charter for two years more.

With less than twelve hours to go before RFC's life was up at midnight, the House and Senate got together, passed the necessary bill. Jesse Jones went to the White House to see it signed. When he emerged he told newshawks it was all over until February 1937.

"What did the President say?" they asked.

"I believe," said satisfied Mr. Jones, "he said something about how he would like to have it a five-year sentence instead of two.."

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