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diet &L (rh &£t 7 C O M EXTENSION OF RECONSTRUCTION FINANCE CORPORATION The Joint Resolution of June 30, 1947 extended the life of the RFC to June 30, 1948 • It also revised and consolidated the RFC statutes. The RFC can now exercise four general credit powers, as follows: (1) lend to or purchase the obligations of business enterprises, (2) lend to financial institutions, (3) lead to or purchase the securities of municipalities or public agencies to finance specific public projects, and (4) sake disaster loans up to $25 million outstanding at one time. The total amount of the four kinds of financing granted after June 30, 1947 and outstanding at one time is limited to |2 billion. Except for the disaster loans, such credit can be granted qnly if it "is not otherwise available on reasonable terms.11 As before, loans may be made either directly or in participation with lending institutions, but the report of the House Committee says the act "terminates the existing authority for blanket participation in bank loans." The act leaves in effect an earlier statute that provides a one year limitation on disbursements following a commitment to make a loan, and also one providing, in effect, that loans shall mature not later than January 31, 1955• The language of the latter provision is not entirely clear, but the committee reports indicate that the intention was to retain it as such a limitation. The act repealed several RFC powers, including the authority t© purchase preferred stock (and capital notes and debentures) of banks, to purchase stock of insurance companies, to make foreign loans, to supply capital to other Government agencies, to create subsidiary corporationsr and to "purchase" loans guaranteed or insured under the Servicemen1 s Readjustment Act. Under its general powers listed above, the RFC can still make business loans that are guaranteed or insured under the Servicemen1s Readjustment Act, and it can lend %o financial institutions on either business or home loans that are so guaranteed or insured. The repeal of the authority to "purchase" such loans was apparently due to the fact that, as stated in the report of the House Committee, the RFC was "purchasing such loans without recourse which has the effect of allowing the original lending institution to refinance the loan on a 100 percent basis with the Government." The RFC Mortgage Company and the Federal Loan Agency were dissolved, and their assets, liabilities and records were transferred to RFC. The Federal National Mortgage Association was not dissolved. The 0. S. Commercial Company was continued until June 30, 1948. Under the Joint Resolution <?f June 30, 1945, the Defense Plant Corporation, Defense Supplies Corporation, Metal Reserve Company, and Rubber Reserve Company had already been dissolved and their functions were being exercised by RFC. The new law continues these RFC functions, "but only with respect to programs, projects, or commitments outstanding on June 30, 194-7*11 The report of the House Committee said that this would continue certain "essential" programs "such as the continued operation of the Texas City tin smelter, the production of synthetic rubber, certain defenseplant operations, and the continuation of a limited number of strategic and critical-materials programs . • • until Congress has had an opportunity to determine what the policy of the Government should be with respect to each." FSsek 7/23/47
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