Jesse Jones's Friends

Big Jesse Jones, self-made First Citizen of Texas, went to Washington in February 1932 to be a Democratic director of Herbert Hoover's Reconstruction Finance Corp. Under pinchpenny Chairman Atlee Pomerene, RFC dwindled in power and prestige until by March 1933 it had hit bottom. Two months later Jesse Jones took over as chairman and RFC's great days began. He conducted himself and his huge money-lending business so well, with such level-headed liberalism, that it became easily the public's favorite New Deal agency, and he perhaps Washington's favorite administrator. Just how popular he was it remained for the U. S. Senate to demonstrate last week.

RFC's lending power, its vital function, was due to expire Jan. 31. Its great days were gone with the emergency which called it into being. For a year it had been chiefly winding up its affairs, collecting old loans, making few new ones.* But President Roosevelt wanted its lending powers, and those of four subordinate credit agencies,** extended to June 30, 1939. A bill to that effect was reported out by the Senate Banking & Currency Committee.

Three days prior, the President had sent to Congress his program for governmental reorganization. Vastly vexed by this Presidential move was Virginia's Harry Flood Byrd, not only because he had been about to take the spotlight with a reorganization plan of his own, but also because the President's program failed to encompass the economies which the Vir ginia Senator champions. The. RFC extension bill gave him his first chance to trans late his displeasure into action. He rose in the Senate to object.

It was neither the agency nor its chair man to which he objected, Senator Byrd explained. For them he had nothing but praise. But the Brookings Institution had calculated that the Government could save $30,000,000 per year by consolidating its credit agencies. One item in the Institution's program was transfer of RFC's as sets to some other agency as soon as its lending activities had ceased. Since reorganization should begin to take effect by July 1938, Senator Byrd proposed an amendment extending RFC only to that date.

Warm, like-minded friends are Virginia's junior Senator and its senior Senator, Carter Glass. But one day in 1928 a Texas businessman-admirer of Statesman Glass visited Harvard's Business School, found no portrait of its namesake in the School's Glass Hall, promptly had one painted. Soon afterward the two men met, and ever since Carter Glass and Jesse Jones have been the stanchest of friends, the warmest of mutual admirers. Senator Glass calls Chairman Jones the ablest administrator in Washington. First of this month he moved from Washington's Raleigh Hotel, where he has lived for 22 years, to an apartment on Jesse Jones's floor in the Mayflower. Last week in the Senate the old but still peppery Virginian uprose to refute his junior colleague's argument.

He, too, would be against the bill, said Senator Glass, if he thought it would waste "one single dollar." He did not, and he wanted RFC extension. He wanted it chiefly, he frankly proclaimed, because Jesse Jones was RFC's chairman.

The Byrd amendment was promptly voted down, 52-23. Passage of the bill by unanimous consent remained a formality. Majority Leader Robinson demanded a record vote. The smashing result of 74-1 for RFC was less a rebuke to Senator Byrd, everyone agreed, than it was a rare tribute to Jesse Jones from 74 of his admiring friends.

*As Chairman Jones reported last week, RFC has, in round numbers, loaned $6,300,000,000 to private borrowers, recovered $4,300,000,000. Profits of $150,000,000 were expected to cover any losses on the $1,970,000,000 outstanding. To relief and other govern mental agencies RFC had loaned $3,000,000,000 recovered only $1,000,000,000. Asserting that most of RFC's Government notes were uncollectable, Senator Byrd last week pointed out that the Treasury carried them on its books as assets. Only explanation of this procedure that any official had been able to give him was: "To avoid large totals in the regular appropriation bills."

**Commodity Credit Corp., Export-import Bank, Electric Home & Farm Authority, RFC Mortgage Corp.

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