(Immediate Release) (P-99)

RECONSTRUCTION FINANCE CORPORATION

WASHINGTON

September 29, 1932

The following is taken from an article written by Gardner Cowles, Director of the Reconstruction Finance Corporation, for the October issue of Review of Reviews. The facts in this article as follows may be used as a general press release as if coming directly from Mr. Cowles, as of this date:

"After more than seven months of operating in an effort to relieve the credit situation in the United States, it is possible to make some measure of the accomplishments of the Reconstruction Finance Corporation in assisting banks, insurance companies, and other financial institutions. It is still too soon to tell the whole story. There is more than a hope that the turn in the road is before us. There are many who believe that the Reconstruction Finance Corporation has hastened the approach to that better time.

"Most of the loans by the Corporation heretofore have been made to banks. The average loan has been made to banks situated in towns with a population of 3,000 people. The average bank loan is $35,000. Approximately 70 per cent of the borrowing banks--about 3,300 of them--are located in towns of 5,000 population or less.

"Large loans to large financial institutions have been made by the Reconstruction Finance Corporation. As was said before, in making these large loans the Corporation has been enabled to be of assistance to more people in a single action than in the case of many lesser loans to smaller institutions.

"As an evidence of improved conditions in the financial world, there can be offered the information that the demands upon the Reconstruction Finance Corporation have decreased materially in recent weeks. In the five weeks preceding July 30, applications for 1521 loans were received from banks, insurance companies, building-and-loan associations, and other financial institutions. In the five-week period ending September 3, 1222 applications from institutions of this type came to the Corporation. Improvement in the financial world is indicated by the above figures, an average decline of sixty applications each week.

"Evidence of the improvement is further found in the total amount of money applied for by these institutions in these two periods. In the five-week period which ended July 30, the Corporation was asked to lend a total of $346,511,000 to banks and other financial institutions, not including railroads. In the five-week period which ended September 3, the Corporation was asked to lend far less than half that sum, or a total of $148,515,000.

"The work of the Reconstruction Finance Corporation is far from completed. Its Directors are faced every day with problems just as difficult of solution as those which confronted them the day before. They will arrive at decisions which may not prove to have been the correct decisions. They may make mistakes. They are charged with a responsibility which is literally staggering in its magnitude, but they will do their best.

"May they have the support and confidence of all fair-minded people!"