Taps for RFC

Of all the alphabetical agencies set up during the Great Depression, none had a bigger job than the Reconstruction Finance Corp. Created under President Hoover, it lent billions of dollars to shore up shaky banks, railroads and other key institutions. Its Depression-fighting mission accomplished, RFC lived on in World War II as the Government's most powerful and versatile financial weapon. When it became obvious that Japanese aggression would cut off the U.S. from Malayan natural-rubber supplies, RFC set up and operated the nation's huge synthetic-rubber program. It organized stockpiling of strategic materials and pre-emptive buying to keep them out of the hands of the Axis. When President Franklin Roosevelt's goal of 50,000 planes a year appeared impossibly high, partly because of a shortage of aluminum for air frames, it was RFC that handled the expansion of U.S. aluminum production. At war's end RFC financed food buying for the starving peoples in liberated areas; it also organized a secondary market for home mortgages, which kept the U.S. veterans' housing program going.

But as often happens when no real work remains to be done, RFC fell on evil ways after its reconversion tasks were completed. Private lenders complained bitterly to Congress that RFC was making many questionable business loans as political favors. Snake farms, luxury hotels and fancy gambling halls applied to-RFC for loans, and got them. In the latter days of the Truman Administration, congressional investigators unraveled before the nation's scandalized eyes a network of influence-peddling that led in and out of the White House offices, the RFC and the halls of Congress. Finally, in 1953, Congress ordered RFC to make no further loans and to wind up those it had outstanding.

Two months ago President Eisenhower ordered RFC to shut up shop as of the close of the 1956-57 fiscal year. Last week, with only about 100 employees remaining of the 12,000 it had in its prime--and only $80 million worth of loans unrepaid of $50 billion authorized--RFC took down the bronze name plate over its rented office quarters in Washington, turned its remaining assets over to other Government agencies, and passed out of existence. RFC, taking it all in all, had had a wondrously successful career.

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