Show x I ROUND MERRY I Scuttles Loans to Small Firms By DREW PEARSON VASH WASHINGTON Last Last w wee week c e k the Reconstruction Finance corporation corporation corporation cor cor- Issued an Inconspicuous routine announcement stating that Its its- B P A program would expire Jan 22 To most people this meant noth nothing ng To thousands thousands thousands thou thou- sands of little businessmen throughout f the country however however however how how- ever It meant the difference between between between be be- tween prosperity and the op op- op- op To people Inside the R F C furthermore it represented one orie of the cleverest rush Jobs of maneuvering in re recent recent recent re- re cent R F C history Two Republican Republican Re Re- publican R F C commissioners taking advantage of two Democratic Democratic Demo Demo- cratic absences abrogated the theR theR R F C plan to guarantee 75 15 of 01 bank loans to small business up to In the last r year these support loans to small business have been en the most Important loans the theR R F C h has s made Here is the Inside story of at what wha happened Charles Henderson R F C chairman airman 1 and generally considered considered considered consid consid- ered a 8 friend of small business was absent In California George Allen another Democrat and a a staunch h champion of small business busi busl- business ness ness resigned effective Jan 16 John Goodloe nominated mated to take his place as a Democratic commissioner commissioner commissioner com com- missioner had not been confirmed confirmed confirmed con con- firmed by the senate This left the R RF F C on Jan 17 the the day after Allen resigned in in control of f three men two men two Republicans and one orie Democrat On that date also the two con congressional gressional committees es on small business had not yet been gan ed Both have staunchly championed R F b C loans to small mall business but since the new congress congress congress con con- gress began the two committees have been in the throes of re re- re organization tion Big B Ban Banker a a k e r Viewpoint on Viewpoint On Jan 17 therefore one day after Allen resigned and before the small email business business' committees committe s on Capitol hill could get going Commissioner Henr Henry T. T Bodman moved to drop the B P A program program program pro pro- gram In other words the blanket par participation agreement agreement agree agree- ment whereby the RF C automatically automatically automatically auto auto- underwrote 75 of loans which a bank extends to a small business Com Commissioner Bodman's Badman's background background background back back- ground Is the a National Bank of Detroit on one of the most powerful powerful powerful pow pow- erful financial institutions of the automobile capital Behind It are the Fisher brothers of Fisher body ody fame tame and d General Motors They are also linked with the Bankers Trust and the Guaranty Trust in New York This group represents big Ig business business business busi busi- ness and generally speaking docs does not favor loans to small business So with two Democratic commissioners commissioners commissioners com com- missioners absent Detroit banking banking banking bank bank- ing friend Bodman moved to end the B PA program Democratic Commissioner Henry Mulligan opposed G GOP 0 P Commissioner Harvey Gunderson went along with Bodman though Bodman-though though without enthusiasm The Republicans incidentally had the unofficial blessing of Democratic Secre Secretary Secretary tary of the Treasury Snyder And that was how the R F C maneuvered to take one of its most significant steps of the past two years For since the B P A program was put into effect in March 1945 the 1915 the R F C Chad Chad had lent small business a total of or a a flow of f caps capi capital tal which could n not t help b but t have a tremendous impact on the country Financial Squeeze Play Play Here Here Is how the R F C program for aiding small business operated If for tor instance a small operator operator operator opera opera- tor of ot a a petroleum derivatives plant in Maryland went to his local bank and asked for a loan the b bank probably would say Your legal limit is but well we'll ask our affiliated affiliated af af- af- af banks if they'll participate particIpate participate pate with us and make it The small town bank would then query larger banks in Baltimore Baltimore Baltimore Bal Bal- R Richmond hm nd and washington Washing washing- ashington ton to get takers for the remaining remaining remaining remain remain- remain remain- ing And the larger banks seeing that the petroleum was vas competing with Shell Standard Texaco Sunoco and other big companies probably would reply Your competition tion Is too strong Actually the real reason for tor turning down the loan might bethe be bethe bethe the bigger bigge banks' banks ties I s with larger petroleum companies When and If the bigger banks turned down the loan however the small bank could go to the theR theR R F C and be certain of lOt underwrIting underwriting underwriting under under- writing the remaining 75 Following last weeks week's R F C vote however this is no longer possible Capital At Chaff Chaff At his latest cabinet meeting President Truman Truman Tru man gave instructions on how to get along with the new Republican Republican Re Re- publican congress t I He told his cabinet members not to fight the new congress but to Ins insist Jt upon justice B Be courteous careful and cooperative he advIsed advised advised ad ad- but stand up for your rights Of Ot late incidentally the president has seemed much more confident President Truman may have hav to put up a help wanted 81 sign Il outside the White House Hes He's offering a a Job paying a year and no Income tax which Is more than his own net Income but t the e Job is going be begging The vacancy is head of the world bank bank rec recently bank recently occupied by Euene Eugene Eugene Eu Eu- gene ene I Meyer Mever So far tar Truman has had no takers |