Rail Loans Unsnarled

President Hoover took a hand at straightening out what was threatening to become a serious snarl within Reconstruction Finance Corp. over railroad loans. The trouble started when banks showed a tendency to call their short-term credits to the carriers and leave the full burden of relief up to the R. F. C. Estimates of the relief needed by railroads ran as high as a billion dollars for 1932 alone. Reports were current that President Dawes was willing to have R. F. C. assume this full financial load with no stickling over collateral, whereas Board Chairman Meyer felt that the banks should not "pass the buck'' to the Government but continue their credit assistance to the roads. That there was nothing personal in this rift of R. F. C. opinion was evidenced when, after a board meeting, Mr. Dawes slapped Mr. Meyer on the back and exclaimed: ''Gene, you're a brick!"

But the carriers fussed & fumed as uncertainty held up 300 million dollars' worth of their R. F. C. loan applications. President Hoover summoned President Dawes, talked with Chairman Meyer, then held an hour-long conference with 13 rail executives representing such roads as the Pennsylvania, Chesapeake & Ohio, Louisville & Nashville, Northern Pacific, Missouri Pacific, Southern, Union Pacific, New York, New Haven & Hartford, Baltimore & Ohio and New York Central. Lips sealed, the railroaders emerged from the President's office looking glum and anxious. Next day, having arranged a compromise between Messrs. Dawes & Meyer for rail relief, the President cheerfully announced: 1) The roads' financial problem is "of smaller dimensions than has been generally believed or reported." 2) Between three and four hundred millions, and not a billion, will be required to help them through the year. 3) Of this, Railway Credit Corp. will supply a minimum of $50,000,000.* 4) "It is assumed that many bank loans will be continued in the normal way." 5) "Recourse to the Reconstruction Finance Corp. by the railroads will be much less than was originally thought."

P: Swiss Minister Marc Peter presented to President Hoover Sculptor Ernest Durig. Sculptor Durig presented to President Hoover a plaster bust of George Washington so large (seven feet high) it had to be left outside on the White House lawn. Asked the puzzled President: "What shall we do with it?" Representative Sol Bloom, director of the George Washington Bicentennial Commission, was summoned to find an answer.

P: By his signature President Hoover last week made law an immigration act excluding all alien instrumental musicians from the U. S. as "artists," unless they were of "distinguished merit and ability."

P: The President signed a joint resolution instructing the I. C. C. to study the effects of a six-hour day for railway labor.

P: Representing the U. S. Junior Chamber of Commerce, Harlan Miller called on the President to enlist his aid in getting out 50 million voters for this year's election (total 1928 vote: 36,879,414). The plan involves a system of State quotas and proclamation by Governors.

*When R. C. C.'s pool was authorized by the Interstate Commerce Commission, it was estimated that $100,000,000 would flow into it from increased freight rates. Traffic declines halved the estimate.

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