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Show MANY members of the Congress are again worried about a return re-turn of the so-called "hard money" policy of the Elsenhower administration adminis-tration which was Inaugurated early In 1952 and then quickly abandoned as the nation's economy began to spiral downward. The return to this "hard money" policy was heralded by these factors: fac-tors: The unannounced boost In interest in-terest rates from 3 to 5 on disaster loans to farmers; the Federal Seserve Board's recent boost in rediscount rates to private banks; and. the attempt of the Treasury Department to carry out the provisions of the Hoover Commission report on Government Gov-ernment lending agencies. The Hoover report, if carried clatiu. composed of the largest j New York City banks. As of today the cost of borrowing money Is at the highest rate since early 1053 and at a time when not only small business, but large corporations are seeking trenien dous amounts ranging into the billions for expansion of facilities and inventory And Interest rates are still going up The United States Treasury, the highest credit risk in the world was paying only about H"o interest on 90-day loans in 1954. Today it is paying over 1V4 for the same loan And at the same time some government bonds are as low as 89, or 11 points under ar. ripe for purchase by the money interests who hulrt them for par or over, and sell out, would undermine or eliminate the lending and insuring activities of federal agencies, placing such lending in the hands of private banks at higher Interest rates. It would cripple the Rural Electrification Electrifi-cation Administration, place all price support loans of the Commodity Com-modity Credit Corporation In the hands of private banks, and interest in-terest rates on all these. Including the Federal Housing Administration, Administra-tion, the Home and Housing Administration Ad-ministration and the Veterans Administration, would be governed by recommendations of . New York bankers. As a matter of tact, according to Representative Wright Patman, of Texas, the Hoover Commission report carries out the same recommendations made about two years ago by the New York Clearing House Asso- With interest rates on commercial commer-cial loans so high, banks are turn lng more to consumer credit loans Today consumer credit debt stands at well over $30 billions on installment install-ment sales. A recent survey of banks shows this class of loans now accounts for about 22 of their total loans, something they wouldn't touch a few years ago And the survey showed 30 cents out of every dollar of gross income earned from bank loans comes today frrm installment credit loans. In the meantime the Congress Con-gress is wrestling with about 73 loopholes in the tax code which was rewritten in 1954, some of them costing the federal Treasury billions of dollars And by strange coincidence all these tax loopholes were In favor cf the big Income earners. |