"A Decent Burial"

Should the Reconstruction Finance Corp. be abolished? Arkansas Democrat J. William Fulbright, whose Senate banking subcommittee is now investigating RFC (TIME, April 24), last week found somebody who thinks so: Texas Banker Jesse H. Jones, head of RFC for 13 years after the agency was first set up in 1932.

Wrote Jones to the subcommittee: "I think [RFC] should be given a decent burial, lock, stock & barrel. None of the emergency conditions which prompted [its] creation exists today. When the Government finances business, it is competing with private enterprise from which it gets much of its income. When it finances improvident business, it takes from the profits of competing business, gets no taxes from the improvident, and loses on its loan.

"Excuses are found to make loans, and in large amounts, that under no circumstances can be justified. [RFC] is being prostituted when making such loans as the Kaiser-Frazer [$44 million], Lustron [$37.5 million], Texmass [$10 million] and Waltham Watch Co. [$6 million]."

In the Texmass loan, said Jones, "it appears that several million dollars of this loan is to be used in making payments on loans now held by large life insurance companies [and] banks. If the loans are good, the insurance companies and banks would want to keep them. If they are bad, they should not be unloaded on the Government."

After RFC approved the $6,000,000 loan to closed-down Waltham Watch Co. last year, RFC's New England .Regional Director John J. Hagerty resigned his $10,330-a-year job to become Waltham's president at $30,000 a year. Despite RFC's help, Waltham again stopped ticking two months ago, and laid off its 1,231 employees. Last week Hagerty was back on RFC's payroll at $10,330 a year and wearing a more impressive title than before: special assistant to RFC's board of directors.

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