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September 4., 1934 Dr. Viner Mr. Secies Re: Proposed consumer credit b i l l of National Ll Credit Associa i s ^rob&biy • plfcO* in our financial I ,V>r institutions that will provide for port : or radiscountlng of tumiiHMH creait >er, not only II of unlocking certain frozen c r credit but also as l paMNMOt lid to •U.biisiii.rvnt of fT€ e.ecoE2iOustions to consumers and to H LOfMMBt o f i I IX dicing p m tieess. In ordtr thfci -• -uouiiting f a c i l i t i e s ba ^..de avail :. xiaaedi&tely will /robably r* ill finni limn)til WM&st&nce and 1 see no reason why tfiis should not be e yroper ui>e for ft. F. C, funus. If eiitimatos "upon the shrinkage in tbi VolmM of M M H cr a i t B MT thi -esKion -licbl^ i t would M M ireble for p f t m iOM tii. ter attesipt b to obtain a iaore nonMkl voluae of sucn credit, A fuiiaing of exiBting debt voald I 9 relievo pres sure of liquia^tion • na fa—d off oOosible bsnkraptcies. Also i t would enable business concerns to carry larger amo,nito of eonoujser credit if ^retient frozen craait were iiniwrtrwi. If redise^uuting f t c i vere offeree >.ouiu be 3 gre^.t r incentive to offer creoit flltiffl to constiaiers ana if financea properly would l«sd to a d increase in tne supply of ^ioney in the country. co.:33arcial banks woula probably be morv. viiling to HIEI advances to i n s t i t u t i o n s of t h i s type provided they are soundly c^.-it-ulised. Considering the small voiuiae of acceptable loan applications from business firsaB ;:.n^ the \&Tg9 fohmM of m m resexv | -;, lu by banks, iliOTil to O M Kr creait mdi<COUtttlag agenci«3 offer a field O O t thut t ...s of the country uiight ;.>rufitably exploit. Of course the ;T i s not eligible for rediscount at tue Fea^ i,l ec d t>iis t al^iit :-ove MMMklt of I ceter: ^nt. So far as tne pr»S«at b i l l i i concerned i t i • I i t is too obviously for the iMMtflt of UM ./rtisent creaitoro r^ta^r toen t l ; oo&soMfW • » t any b i l l Mist i o n t y i t t a M y tr« in p i c t u r e to receive y.c. ministration • l l probt-bly too . I itllB^d in bhll b i l l , and " . li -ily no profit aliov, . to tlM wuo uso thfl fftOilltlet oi thMl in • t i t u t i o n s . k tent tive mpOiil ui^ht be : fa.ee value of the lotms V:i;cri :re turned over to the corporations % Laercriant creaitors should not be paid out in f u l l but that I 15$ deferred credit should be held b;? the corporation to protect i t agai&st , . i Lo ^s from the consumers failure to • i l r 1 Tutu twenties ai 34 T% ."-•'•.id off the Deferred credit* would Hum > U > I crdcitorr vfac b d reciiscoLinted or sola paper to tje iviGtitutioo.K. B w much rtrtttl o .;1G be silovfed on these fancis woulu ue^crici upon : -ofits of tUe lsatitM* tioxi but yroi>ably tuere SHOUIQ bm I iv-tiisr low Li&xiiiium that M f bt -id Q , that if | raflti ippinr consumers thfful<! benefit by obtaining lower i n t e r e s t uacu^gyB. Vhat ^-rcentage shoula bm kept M dafarrvd creait l i of course d i f f i c u l t to say but i t M W to afl that i t wouic, M k bottar to start oat with a fifur* like 15% wuich wouia be relstivoiy ah-_n md then as new iftaiM art offered to the i n s t i t u t i o n s in the future tnere migiit be a . revision wnicn would p«2Vlt the E ?• €• to require U sore o r ley to remain with the i n s t i t u t i o n a M exoarisnee in losaes i s a obtain^Q. Uunough actual operation* The ; : . tm C.*s contr.lb .tion to DTQ~ ferreci stock suoulci be h a to secure acieqiic 1 In regard to the ;.nanage:ient of these i n s t i t u t i o n s i t might bo a l l right to have the director* eppolated ay the bmitmen who would ht.ve voting rights in proportion to the amount of defer . ta v ich. they have with tne i n s t i t u t i o n s , However, the R« F. C* ahcmld have the power of tiaatflfitimi and supervision of the i n s t i t u t i o n s ~.n& aboold iee that loscea are promptly ch.fe.rged off md that the :u.ndlin . of the i n a t l tiitiotu; i s t5uch that coi-.sum'ars are given the advii^taga of ai lov as