INQUIRY INTO THE OPERATION OF THE RECONSTRUCTION FINANCE
CORPORATION AND ITS SUBSIDIARIES UNDER SENATE RESOLUTION 132

HEARINGS

BEFORE A

SPECIAL SUBCOMMITTEE OF THE

COMMITTEE ON BANKING AND CURRENCY

UNITED STATES SENATE

EIGHTIETH CONGRESS

FIRST SESSION

ON

S. Res. 132

A RESOLUTION FOR AN INQUIRY INTO THE OPERATION

OF THE RECONSTRUCTION FINANCE COR-

PORATION AND ITS SUBSIDIARIES

69127

PART 1

DECEMBER 3, 11, AND 12, 1947

Printed for the use of the Committee on Banking and Currency

:

UNITED STATES

GOVERNMENT PRINTING OFFICE

WASHINGTON: 1948

COMMITTEE ON BANKING AND CURRENCY

CHARLES W. TOBEY, New Hampshire, Chairman

ROBERT F. WAGNER, New York
BURNET R. MAYBANK, South Carolina
GLEN H. TAYLOR, Idaho

J. W. FULBRIGHT, Arkansas

C. DOUGLASS BUCK, Delaware
HOMER E. CAPEHART, Indiana
RALPH E. FLANDERS, Vermont
HARRY P. CAIN, Washington
JOHN W. BRICKER, Ohio

JOSEPH R. MCCARTHY, Wisconsin

E. V. AVERY, Acting Clerk

A. WILLIS ROBERTSON, Virginia
JOHN J. SPARKMAN, Alabama

CONTENTS

Statement of—

Page

Eccles, Marriner S., Chairman, Board of Governors, Federal Reserve

System.

126

Goodloe, John D., Chairman, Board of Directors, Reconstruction

Finance Corporation___

31

Herz, Theodore, Assistant Director of the Corporation Audits Division,

General Accounting Office-

100

8

McGarrigle, J. Cyril, in charge of financial analysis for the sub-

committee..

Munzall, Daniel, Jr., associate counsel for the subcommittee_

Snyder, John W., Secretary of the Treasury, accompanied by Edward

F. Bartelt, Fiscal Assistant to the Secretary; Thomas J. Lynch,

Acting General Counsel; and George C. Haas, Director of Technical

Staff, Treasury Department.

Stevens, Lewis M., Counsel and executive director for the subcom-
mittee__

Whelan, Joseph A., associate counsel to the subcommittee_

Exhibits:

Exhibit 1. Senate Resolution 132 [to investigate the operations of the

RFC and its subsidiaries], Eightieth Congress, first session_____

Exhibit 2. Public Law 132 [to extend the succession, lending powers,

and the functions of the RFC], Eightieth Congress, first session

Exhibit 3. Descriptions of the Legislative Authorizations to RFC.

Exhibit 4-A. Consolidated balance sheet_

Exhibit 4-C. Unrecovered costs, etc., nonlending activities for na-

168-169

Exhibit 4-B. Net income from lending activities, and net income

from war-damage insurance program.

170

tional defense, war, and related purposes. -

171

Exhibit 4-D. Notes to financial statement..

172

Exhibit 5-F. Banks and other financial institutions__

Facing page 180

Exhibit 6-A. RFC direct business loans-28 borrowers account for

82 percent of the unpaid balance -

180

Exhibit 6-B. RFC investment in railroads-active loans

181

Exhibit 6-C. RFC purchase of securities from PWA-15 projects

account for 91 percent of the total unpaid balance...--

181

Exhibit 6-D. RFC loans to self-liquidating projects-10 projects

account for 97 percent of the total unpaid balance..

Exhibit 6-E. RFC loans to drainage etc. districts-15 borrowers

account for 49 percent of the unpaid balance__.

Exhibit 6-F. RFC loans and investments in national banks—56 per-

cent of the remaining investment is concentrated in 11 banks...

Exhibit 6-G. RFC loans and investments in State banks-60 percent

of the remaining investment is concentrated in 21 banks.

Exhibit 6-H. RFC participation in bank loans-principal RFC par-

ticipations.

182

182

182

183

183

Exhibit 7-A. RFC loans to business enterprises-graph of authoriza-

tions, disbursements, repayments and other deductions..

Exhibit 7-B. Table in explanation of exhibit 7-A...

Exhibit 7-C. RFC loans to business enterprises other than national

defense graph of authorizations, disbursements, repayments and

other deductions..

184

185

186