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CLC •••••••••••••••••••••••••••• RECONSTRUCTION FIN ANC E CORPORATION (IN LIQU IDAT ION) OF C,'\LIFORNLJ l!NIVERS:TY t0c: r,,.,,.,.. --., FEB 17 1~55 U~tt,-.K 'i CO'..tf. r,ues. ROfl' l REPORT TO Tl-IE CONGRESS JUNE 30, 195_. •••••••••••••••••••••••••••• LIQUIDATION OF RFC LOANS, SECURITIES AND COMMITMENTS September 28, 1953 through June 30, 1954 Number Business loans and securities: Loans sold outright __________________ _ 69 Securities of business enterprises sold __ 2 Lo~ns _sold subject to deferred parti77 c1pat1on ---------------------------Loans prepaid through refinancing six months or more before maturity ___ _ 217 Loans prepaid in full by borrowers six months or more before maturity ___ _ 273 Loans transferred to loan pool _______ _ 2,848 Loans paid in full according to agreed terms and reductions by normal re222 payments --------------------------Cancellation of commitments _________ _ 41 Reductions through foreclosure proceed111 ings, etc. --------------------------Total reduction in business loans, securities and commitments ____ _ Amount (In thousands) 3,860 Less: RFC retained interest in loan pool -------------------------------- $ 9,346 25,292 19,197 17,441 3,781 73,243 50,274t 9,516 3,610t 211,700 26,200 Net reduction in business loans, securities and commitments ____ _ 3,860 185,500 Other securities sold and retired: Financial institutions __________________ 23 Railroads ----------------------------Public agencies _______________________ 3 127 Reduction in other securities ______ 153 122,100 Total Reduction __________________ 4,013 $307,600 15,200t 73,300t 33,600t t Includes amounts representing partial retirements, etc. Corresponding figures in the ''Number" column refer only to loans and securities fully retired. Digitized by Google TABLE OF CONTENTS Page Summary of Liquidation of RFC Loans, Securities and Commitments __________________________________ Inside Cover Letter of Transmittal __ .____________________________________ 2 RFC Liquidation Act --------------------------------------- 5 Reorganization Plan No. 2 of 1954 --------------------------Policies in Liquidation of RFC Assets ________________________ 6 6 Progress in Liquidation of RFC Assets: Summary Statement-----------------------------------Business Loans and Securities --------------------------Securities of Railroads---------------------------------Public Agency Securities -------------------------------Financial Institutions ----------------------------------Summary of Securities Sold or Retired __________________ 8 10 15 17 18 18 Acquired Collateral ------------------------------------- 18 RFC Loans and Securities Transferred to Other Government Agencies ----------------------------------------------- 20 Organization and Personnel --------------------------------- 20 Financial Condition ---------------------------------------- 22 Financial Statements: Balance Sheet _________________________________________ 24-25 Statement of Net Income from Lending Activities________ 27 Liquidation of Assets of Terminated World War II Programs__ 28 Production Programs --------------------------------------- 29 Statement of Accountability to U. S. Treasury ________________ 31 List of Borrowers with Actual or Potential Liability of $100,000 or More---------------------------------------- 32 RFC Background _____________________________ Inside Back Cover Digitized by Google Letter of transmittal: To: The President The President of the Senate The Speaker of the House of Representatives I have the honor to submit herewith a report on the liquidation of the Reconstruction Finance Corporation. Submission of this report, as required by the RFC Liquidation Act, completes my duties as Administrator of the Corporation. The duty of completing the liquidation of RFC and winding up its affairs was assumed by the Secretary of the Treasury on July 1, 1954, as provided by the RFC Act. This report also includes the Corporation's financial statements for the fiscal year ended June 30, 1954, submission of which is required under the provisions of the RFC Act. The RFC Liquidation Act provided for the transfer from RFC of the Government's programs for the production of synthetic rubber, tin and abaca fiber. By Executive Order 10539, the President transferred the synthetic rubber and tin programs to the Federal Facilities 1\dtrtinisera c..«r• \:c... -eiefts and the abaca fiber program to the General Services Administration, all effective at close of business on June 30, 1954. Separate reports will be submitted on the operations of these programs by RFC for the fiscal year ended June 30, 1954, in accordance with the provisions of the respective statutes under which these production programs have been continued. The lending programs formerly conducted by RFC under the provisions of the Federal Civil Defense Act of 19 50 and the Defense Production Act of 1950, were transferred to the Secretary of the Treasury effective September 28, 1953, in compliance with the provisions of the RFC Liquidation Act. Under the provisions of Reorganization Plan No. 2 of 1954, certain assets were transferred from RFC to the Export-Import Bank of Washington, the Federal National Mortgage Association_, and the Small Business Administration. ·Each of the agencies to· which RFC assets were Digitized by Google transferred had similar assets acquired under continuing programs. Thus, the Reorganization Plan facilitated the orderly and expeditious liquidation of RFC's affairs. The RFC Liquidation Act terminated the Corporation's lending authority effective September 28, 1953. On that date, the Government's investment in RFC loans, securities and commitments amounted to $769,500,000. This included assets amounting to $178,100,000 which were to be transferred under the provisions of Reorganization Plan No. 2 of 1954. As a result of aggressive liquidation policies, the amount of the Government's investment in the remaining RFC loans, securities and commitments had been reduced from $591,400,000 to $283,800,000 by June 30, 1954. The liquidation of RFC is being carried out expeditiously under the general policy of securing the highest possible return on the Government's investment. Respectfully submitted, ~ .. ,., ... ~-· ~-~ Laurence B. Robbins Administrator September 15, 1954 Digitized by Google Digitized by Google REPORT TO Tl-IE CONGRESS June 30, 1954 Enactment of the Reconstruction Finance Corporation Liquidation Act (Public Law 163-83rd Congress, approved July 30, 1953) instituted the final phase in the history of this Government agency. A brief summary of RFC's functions and activities since its organization on February 2, 1932, will be found inside the back cover of this report. The RFC Liquidation .A.ct The principal provisions of the RFC Liquidation Act, as amended, were that: 1. The authority of RFC to make new loans be terminated effective September 28, 1953; 2. The liquidation of RFC assets and the winding up of its affairs be carried out as expeditiously as possible; 3. The lending program conducted under Section 409 of the Federal Civil Defense Act of 1950 be transferred to the Secretary of the Treasury effective September 28, 1953; 4. The lending program conducted under Title III of the Defense Production Act of 1950, as amended, be transferred by the President effective September 28, 1953. (This was transferred to the Secretary of the Treasury by Executive Order 10489) ; 5. The programs for the production of synthetic rubber, tin and abaca fiber be transferred from RFC to agencies named by the President, not later than the close of business June 30, 1954. (In Executive Order 10539, the President named the Federal Facilities Corporation, organized under the Secretary of the Treasury, to receive the synthetic rubber and tin programs, and General Services Administration to receive the abaca fiber program). 5 Digitized by Google Reorganization Plan Mo. 2 of 1954 In order to facilitate the orderly and rapid liquidation of RFC, Reorganization Plan No. 2 of 1954 was adopted effective at the close of June 30, 1954. Under this plan, the functions of liquidating certain assets held by RFC were placed under the jurisdiction of agencies responsible for similar continuing programs. The transfers effected under the Plan were as follows: 1. To the Export-lmport Bank of Washington: The functions relating to: (a) the loan made by RFC to the Republic of the the Philippines under Section 3 of the Joint Resolution of August 7, 1946; (b) the loans made by RFC to the Government of Ecuador and the Newfoundland Railway of St. Johns, Newfoundland; (c) the capital stock of the Banco de Borracha (now known as the Amazon Credit Bank, Belem, Brazil) ; (d) all foreign bonds and securities acquired by RFC in the liquidation of its lending programs. · 2. To the Small Business Administration: The functions relating to loans made by RFC to victims of floods or other catastrophes. 3. To the Federal National Mortgage Association: The functions relating to mortgages held by RFC which were made or acquired under the authority of the RFC Mortgage Company or the Defense Homes Corporation. Policies Followed in Liquidation of RFC Assets In the liquidation of RFC the primary objective is to recover all funds invested in the Corporation's assets as rapidly as possible and with maximum protection to the Government and the taxpayers. This policy may be defined more specifically as it relates to the following three general categories of RFC assets in liquidation: 6 Digitized by Google 1. Loans: These assets are loans evidenced by borrowers' notes secured by liens on real or personal property. Practically all of the remaining loans were made to borrowers engaged in business pursuits. The policy is to sell these loans to private interests at full face value or to arrange for private refinancing, always with the consent and cooperation of the borrower. 2. Securities: These assets consist of the capital stock or bonds of corporate entities. For the most part, the securities held by RFC were issued by railroads, financial institutions and political subdivisions of states and territories. There were, however, a few instances in which RFC acquired the securities of corporations engaged in activities normally classed as business enterprises. Wherever organized markets exist for the securities held by RFC, it is the policy to dispose of such holdings on the basis of the market price providing (1) that the market price bears a reasonable relationship to the value of the security and, (2) that the discount involved, if any, is reasonable in relation to the cost of the Government funds invested and the speculative risk of holding the issue to maturity. In cases where there is no organized market for these securities, the determination of a justifiable selling price for any issue is based upon a balancing of factors, including on the one hand the Congressional mandate to liquidate expeditiously together with the desirability of prompt return of funds to the Treasury, and on the other hand, the current and potential yield from the security in relation to the costs of administration and interest on Government funds invested. 3. Acquired Collateral: These assets consist of real and personal property, notes and accounts receivable and other assets acquired by the Corporation under foreclosure and other proceedings in the liquidation of loan indebtedness. As these assets become available for sale, they are disposed of to private interests. The method of disposal is influenced by the location, nature, size and condition of the assets, and selling expense in relation to the value of the property. Generally, acquired collateral is sold by 7 Digitized by Google advertised sale, either at auction or through submission of sealed bids. The general policy in the sale of collateral is to sell each acquired property promptly with the maximum dollar return to the Government. PROGRESS IN LIQUIDATION OF RFC ..usm With the termination of the Corporation's authority to make new loans on September 28, 1953 an aggressive program was inaugurated to achieve expeditious liquidation of RFC's assets. The table below summarizes the results of the program during the period from September 28, 1953 to June 30, 1954: . RFC Loans, Securities and Commitments * (In millions of dollars) outstan~ Sept. 28, 19 ~ Amount Business Enterprises: RFC portfolio _____ RFC equity - pool loans ------ 4,628 $395.5 Net Reduction 1n Portfolio No. Amount ~ Amount 3,860 $211.7 768 $183.8 (26.2) 26.2 f:n~ -4,628 - -395.5 - -3,860 - -185.5 - -768 210.0 Railroads (including securities accepted in reorganization at lower of cost or appraised value) __ 14 83.8 3 73.3 11 10.5 Financial institutions 35 45.5 23 15.2 12 30.3 297 66.6 127 33.6 170 33.0 Public agencies (ineluding securities accepted in payment of indebtedness) ------------- 4,974 $591.4 4,013 $307.6 961 $283.8 • Excludes commitments in deferred parUcipaUon IOIIIIS. 8 Digitized by Google A summary analysis of the reductions effected during this period is provided on the inside front cover of this report. Major accomplishments were as follows: .. 1. A loan pool was organized to which were transferred more than 2,800 business loans amounting to $73,000,000. Servicing of the loans was arranged with banks throughout the nation. A majority interest in the pool was purchased by banks and other private investors. The proceeds provided an immediate return of $47,000,000 to the Government. 2. Prior to June 30, 1954, 146 business loans amounting to more than $28,000,000 were sold to private lending institutions at face value. The sale of 18 additional loans amounting to $3,400,000 was authorized with consummation anticipated shortly after June 30, 1954. 3. Largely through negotiations with banks and borrowers, 217 loans amounting to more than $17,000,000 were retired six months or more in advance of maturity through refinancing arrangements with private sources of credit. 4. Through vigorous loan administration, 273 loans amounting to $3,700,000 were paid in full six months or more in advance of their maturity dates. 5. More than $144,000,000 was returned to the Government through the sale and retirement of security issues. Concomitant with the reductions made in RFC's holdings of loans and securities, there have been reductions in the cost of administration. All regional offices have been closed. The nation-wide organization formerly maintained by the Corporation has been reorganized into a small compact staff geared to effective liquidation, centralized in Washington. In the ensuing pages of this report there will be found a detailed discussion of the progress made in liquidating each category of loans and securities held by RFC on September 28, 1953. 9 Digitized by Google Business Loans and Securities The most complex task confronting the Corporation was the liquidation of its business loan portfolio. On September 28, 1953 there were 4,628 business loans and commitments outstanding which totalled $395,500,000. Not only was the heaviest investment found in this class of assets, but the major portion of the Corporation's administrative costs was incurred in servicing this large number of loans scattered throughout the nation. The loans varied in size from a few with outstanding bal~nces of less than $100 to one loan of $48,400,000. Fewer than 100 of the loans had balances exceeding $500,000. In approximately 3,000 cases, the amount due RFC was less than $25,000. Disposal of Smaller Business Loans Through RFC Loan Pool Plan-In order to dispose of the smaller business loans, RFC and a committee of bankers cooperated in the creation of the RFC Loan Pool. Under this plan, the RFC sold to banks and private investors Certificates of Interest, each representing an undivided share of the loans in the pool. The certificates, bearing interest at the rate of 3½% per annum, were purchased by nearly 1,000 banks and private investors. As of February 28, 1954, 2,848 loans were selected for the pool. All but two of these had outstanding balances under $500,000. The aggregate amount of the unpaid balances was $73,243,000. The sale of Certificates of Interest resulted in the immediate return to the Government of $47,165,000. The servicing of the loans in the pool has been taken over by banks located in or near the borrowers' communities. This has relieved the Corporation of the largest part of its administrative task and has made it possible to close the RFC regional offices and conduct the remaining liquidation activities from Washington. One of the objectives in placing the pool loans in the hands of local bankers for servicing was to re-establish a close relationship between RFC borrowers and private banks. It was anticipated that this step would result in the early refinancing of most of the loans placed in the pool. The validity of these expectations has been borne out by the fact that 441 of the pool loans had been repaid in full by June 30, 1954, most of which were refinanced by banks. Repayments on pool loans totalled $14,000,000 during the 10 Digitized by Google four months period from February 28 to June 30, 1954. Principal repayments are applied each month to reduce the outstanding amount of the Certificates of Interest. Special mention should be made of the cooperation and assistance generously given by the banks of the country in setting up the pool, in subscribing to the Certificates of Interest, and in taking over the servicing of the pool loans. Without this assistance, the Corporation's organization and administrative costs could not have been substantially reduced nor could the liquidation program have made nearly as much progress. Disposal of Larger Business Loans by Negotlatlons--The disposal of the larger business loans presented problems different from those faced in the disposal of smaller loans. The size of the outstanding balances and the varying provisions of the loan agreements made it necessary that the disposal of these loans be undertaken through individual negotiations. Continuing efforts have been made since the beginning of RFC's liquidation either to sell the larger business loans to private financial institutions or to secure private refinancing for them. Both borrowers and bankers have cooperated in these efforts and, through June 30, 1954, negotiations have resulted in the sale or prepayment through refinancing of 363 business loans, with a return to the Government of nearly $46,000,000. In no instance was the sale or refinancing of a loan made on a basis to which the borrower objected. In every case the Corporation received face value. There were 69 instances where banks made outright· purchases of RFC loans, and 77 cases where loans were sold on a deferred participation basis. Loans totalling 217 were retired six months or more in advance of maturity through other refinancing arrangements. Sale of Securities of BusiDess Enterprise&-On September 28, 1953, there remained two instances in which RFC held the securities of business enterprises. In both of these cases-Reynolds Metals Company and Steep Rock Iron Mines, Ltd.the securities held by RFC were sold in the market. The securities of Reynolds Metals Company were sold in January, 1954. At that time the Corporation held Reynolds serial 4% mortgage bonds with a par value of $20,991,600 due 11 Digitized by Google annually to 1967. After exhaustive efforts to develop investor interest in order to obtain the best possible price, the issue was sold to private interests for $20,357,187, representing a price of 95 and accrued interest of $415,167. The securities of the Steep Rock Iron Mines, (a Canadian corporation) having a par value of $4,300,000, were sold to private interests in February, 1954, at par plus accrued interest. Other Loan RetlremenJa-RFC borrowers have aided materially in the efforts to liquidate the Corporation's business loan portfolio by retiring their loans in advance of maturity. There were 273 loans for $3,781,000 which were retired six months or more in advance of maturity during the nine month period ended June 30, 1954. Also, there were approximately 250 loans on which final payment was made or commitments cancelled during this period. These repayments and cancellations, together with funds received in partial and installment repayments, have accounted for a further reduction of $60,000,000 in the Corporation's business loans and commitments. Of this amount, $28,000,000 represented repayments made on the indebtedness of Kaiser Motors Corporation. Deferred Participations ln Bank L~Throughout the period in which RFC was engaged in lending to business enterprises, a substantial portion of all loans authorized was under deferred participation arrangements. A participation agreement, executed by RFC and the bank actually disbursing a loan, provides that RFC will purchase, upon demand by the lending bank, an agreed percentage of the unpaid balance of the loan. It has been the experience of the Corporation that demand for RFC to purchase its participation is made in only a small percentage of the cases. On September 28, 1953, there were outstanding 1,676 deferred participation agreements representing a potential liability to the RFC of $26,400,000. By June 30, 1954, the number and amount of the outstanding deferred participation agreements had been cut in half, with 860 agreements outstanding representing a potential liability of $12,200,000. In effecting this reduction, the RFC was called upon to purchase its agreed percentage in only 15 instances. It is not expected that the Corporation will be requested to 12 Digitized by Google purchase its percentage in more than a small number of the remaining cases. Remalnlng Portfolio of RFC Business Loan&-On June 30, 1954, there remained in RFC's business loan portfolio 768 loans amounting to $184,000,000. Of this total, $145,000,000 (79%) was made up of loans to 17 borrowers, each of whom had loans outstanding of $1,000,000 or more. The loans of three of the borrowers accounted for $102,000,000 (55%) of the total. These three borrowers were: Lone Star Steel Company$48,400,000 (in addition to a Defense Production loan of $37,000,000); Detroit Steel Corporation- $35,766,000; and Carthage Hydrocol, Inc.-$17,748,000. Arrangements have now been consummated whereby the indebtedness of Carthage Hydrocol will be liquidated. The Stanolind Oil and Gas Company has acquired all the stock of the company and has agreed to assume the obligation to RFC. With respect to Lone Star Steel Company and Detroit Steel Corporation, several investment houses have expressed interest, and there is every reason to believe that with some improvement in general conditions in the steel industry, both loans can be refinanced. Of the remaining 14 loans with balances of $1,000,000 or over, there were seven loans considered as problem cases which will require continued servicing by RFC. In the other cases, the loans are considered good and it is expected that within a reasonable period of time, arrangements can be made to dispose of most, if not all, of them by sale or refinancing. More than ninety-five percent of the number of business loans in the portfolio on June 30, 1954 had individual unpaid balances of less than $500,000. The major problem of liquidating the remaining portfolio lies in the administration and servicing of this residue of smaller business loans. As in the case of the larger loans, energetic efforts are being made to sell these loans to private :financial institutions. Where such sales can not be consummated, arrangements are made if possible to secure servicing of the loans by local banks, thus relieving RFC of continued overhead and other administrative costs in servicing loans widely scattered geographically. By June 30, 1954, approximately 175 of these loans had been placed with local banks for servicing. In the course of time, it is expected that most of the loans so placed will be refinanced by the servicing banks. 13 Digitized by Google Approximately 60% of this portfolio of smaller loans are delinquent or present other servicing problems which complicate the program of liquidation. In some cases, foreclosure proceedings have been instituted and in many other cases, foreclosure appears to be an eventuality. A list of all borrowers having RFC loans with unpaid balances of $100,000 or more on June 30, 1954, is included at the end of this report. The liquidation of RFC's business loans and commitments discussed in the preceding pages is shown on the chart below. BUSINESS LOAMS AMD COMMITMENTS * MILLION OOl.U.RS 450 _ _ _ ~ UNO[ R $500,000 40 0 - $500,000- $1 ,000,000 ~ t1,ooo,ooo • t 10,ooo,ooo m OVER $ 10 ,000,000 300 200 100 SEPTEMBER 28, 1953 JUNE 30, 1953 •ucwors ~ UNO(lt HCTlON soz, DI'& JUNE 30, 195 4 ANO COMlfrTIIENTS FOIi OUUUlt[O l'AlltTIC1,aTtONI. Business Loans Made Under Section 302-Defense Production Act - Under the provisions of the RFC Liquidatio:m Act and Executive Order 10489, the function of making loans under Section 302 of the Defense Production Act was transferred to the Secretary of the T!easury. This transfer was effected as of the close of business on September 28, 1953, at which time there were 200 loans and commitments outstanding in the amount of $266,662,000. The RFC, acting for the Secretary of the Treasury, administered these functions until June 30, 1954, under the 14 Digitized by Google direction of the Administrator, who was appointed Special Assistant to the Secretary of the Treasury for this purpose. Efforts to dispose of these loans were made in the same way as in the case of loans authorized under the RFC Act. During the nine month period ended June 30, 1954, 22 of these loans, amounting to $16,900,000 were sold to private interests. Further reductions in the portfolio were accounted for by partial and final repayments. On June 30, 1954, the portfolio of defense loans consisted of 125 loans and commitments outstanding totalling $234,893,000. Loans and commitments to three borrowers make up most of the total. These are: San Manuel Copper Corporation$94,000,000; White Pine Copper Corporation-$62,808,000; and Lone Star Steel Company-$37,000,000. The last named loan was made in conjunction with the loan of $48,400,000 authorized under the RFC Act. Securities of Railroads On September 28, 1953, the RFC held the notes and securities of eight railroad companies amounting to $83,784,000. Included in that total was $6,600,000 represented by securities accepted in reorganizations of companies indebted to RFC. By June 30, 1954, this portfolio had been reduced to $10,461,000 and included the notes and securities of five railroad companies. The efforts which have been made to dispose of the railroad obligations held by RFC have included attempts at public sale, negotiations with the railroads and private investment institutions, and direct sales in organized markets. During the nine months ended June 30, 1954, these efforts were successful in the following instances: and Ohio Railroad Company: The 4% collateral trust bonds of this company, due January 1, 1965, amounted to $64,585,000 when they were sold by RFC in June, 1954. Since the RFC held the entire issue of these bonds there was no organized market in which they could be sold. In March, 1954, they were offered to the public at a sealed bid sale, but only one bid, which was at a price of 85½, was received for the entire block. This was rejected as being unrealistic in relation to the value of the securities. Discussions were continued 1. Baltimore 15 Digitized by Google with the railroad company and investment groups, and after a thorough exploration of all possibilities a competitive proposal from one of the investment houses was accepted, providing for a purchase of $4,585,000 of the bonds at par plus accrued interest by the railroad company and purchase of the remaining $60,000,000 at 95 plus accrued interest by the investment house for resale at a small commission to investing institutions. This sale produced a very satisfactory average price of approximately 95%. 2. Erie Railroad Company: During the reorganization of the Erie Railroad, the RFC acquired $10,571,000 principal amount in 4½% income mortgage bonds, Series A, due January 1, 2015. These bonds were carried on the Corporation's books at $5,948,960. In October and November of 1953, the Corporation sold them to private investors and received $7,716,830, which was slightly above the quoted market price on the days of sale. 3. Bangor and Aroostook Railroad Company: The RFC held 4% collateral trust bonds of this company, due July 1, 1961, with a par value of $1,675,000. After an effort had been made to dispose of these holdings at a public sale, negotiations resulted in the sale of a refunding issue by the company. The proceeds from the sale of the refunding issue were used to retire RFC's holdings at par plus accrued interest. 4. Central of Georgia Railroad Company: During the reorganization of this railroad, the RFC acquired various securities which were carried on the books of the Corporation at $52,033. The bonds acquired have been sold for $64,670. The Corporation still holds 711 shares of the preferred stock of this company with a par value of $100 a share. The railroad obligations remaining for liquidation on June 30, 1954 were as follows: Par or Stated Value (RFC Investment) Meridian and Bigbee Railroad Company ______ _ $1,332,626 Georgia & Florida Railroad ___________________ _ 1,610,957 New York, Ontario & Western Railroad _______ _ 2,248,000 Tennessee Central Railway Company _________ _ 6,007,960 71,100 Central of Georgia---------------------------- 16 Digitized by Google Public Agency Securities On September 28, 1953, the Corporation held, or was committed to purchase, a total of $66,550,000 in 297 issues of the obligations of political subdivisions of states and territories. One of the means undertaken to dispose of RFC's public agency security holdings was by advertised sale. Sealed bids were invited for 171 lots amounting to $9,284,000. This offering was advertised in :financial newspapers of nationwide circulation, and was circularized to more than 1,900 municipal bond dealers, insurance companies, and other potential purchasers. The bids were opened on November 17, 1953, and were disappointing. Out of 98 lots for '.Which bids were received, offers for only 39 lots, having a par value of $1,600,700, were acceptable. The bids accepted amounted to $1,492,982 plus accrued interest. Since then a sustained effort has been made to dispose of the remaining securities by negotiated sale. Revised lists of all public agency securities held by RFC have been widely circularized to investment dealers and other interested parties. The effectiveness of this sales program is demonstrated by the fact that on June 30, 1954, the outstanding securities and commitments had been reduced to 170 issues with an aggregate principal amount of $32,960,000. The negotiated sales have resulted in prices greatly in excess of the bids submitted at the advertised public sale. The largest issue of public agency securities sold was $28,885,000 of 4% bonds issued by the City of Cleveland, Ohio, Transit Authority. Sale of this issue was made as the result of intensive negotiations over an extended period of time and finally competitive bidding. The interest rate of 4% on these bonds is below the rate carried by other large transit bond issues. For this reason, it was anticipated that the Cleveland Transit bonds would have to be marketed at a discount. The bonds were sold for $28,426,795, representing a price of 97.6359 and accrued interest of $224,662, which exceeded earlier expectations. Almost two-thirds of the total of $32,960,000 outstanding at June 30, 1954, is made up of one issue of $20,791,000 for the construction of a hydro-electric project in Pend Oreille County in the State of Washington. It is expected that this project will be completed early in 1955 and that the bonds can be sold to advantage either before or soon after that time. 17 Digitized by Google The 170 issues held on June 30, 1954, are the residue from a total of more than 6,200 issues, aggregating over $1,300,000,000. Those remaining are generally of less marketable quality than the issues which have been sold; in fact, 30 of the issues are in default. Efforts to liquidate the balance of the securities are being continued with the int.ention of obtaining the maximum possible return on the Government's investment. Financial Institutions The securities of financial institutions held by RFC consisted mainly of preferred stock and debentures. On September 28, 1953, these holdings amounted to $45,500,000 and included the issues of 35 institutions, of which all but two were banks. Where the banks have been unable to retire these securities out of their earnings, the Corporation has endeavored to assist them in working out other plans, through obtaining new capital or otherwise, to enable them to pay their obligations to the Government. Since September 1953, these efforts have resulted in the retirement of 23 issues amounting to more than $15,000,000. On June 30, 1954, the RFC held the preferred stock or debentures of 10 banks and trust companies. All of the institutions whose securities are held are presently in operation. The amount of the securities held on June 30, 1954, was $30,341,000. Almost 90% of this amount was represented by the securities of three banks. Summary of Securities Sold or Retired A net reduction of more than $147,000,000 was effected in the Corporation's holdings of all types of securities during the nine month period ended June 30, 1954. The chart on the opposite page reflects the progress made in disposing of the various types of securities held. .Acquired Collateral As the result of foreclosure proceedings, or other actions taken in the liquidation of the affairs of those indebted to the Corporation, the RFC continually acquires various items of 18 Digitized by Google r eal and personal property. These items cannot be sold until expiration of the period during which the former owners may redeem them. During the fiscal year ended June 30, 1954, the Corporation acquired collateral in the settlement of 80 loans. The appraised value of this collateral was $3,304,000. Sales and other dispositions were made during the year in 114 cases involving property appraised at $3,450,000. The acquired collateral held by RFC on June 30, 1954, was appraised at $2,452,000 and represented 98 cases of loan liquidation. Of these, 47 cases with property appraised at $1,071,000 were available for sale. The remainder includes properties presently under lease and those for which the redemption period has not expired. In addition to the properties acquired, the Corporation holds $4,000,000 in notes and accounts receivable arising from the liquidation of loans and sales of acquired property. In disposing of its acquired collateral, the Corporation endeavors to act promptly and to secure the highest possible return to the Government. SECURITIES HELD BY RFC MILL ION OOlLA RS 200 . - - - - - - - - - - - - - - - - - - - - - - - - - - - - , $221,134,000 $221,285,000 JUNE 30, 1953 SEPTEMBER 28, 1953 JUNE 30, 1954 19 Digitized by Google RFC Loans and Securities Transferred to Other Govemment Agencies Under Reorganization Plan No. 2 of 1954 The following table shows the loans, securities and commitments which have been transferred to other Government agencies. For the most part, these assets were of such nature that their disposal to private interests either was precluded or could better be accomplished by merging them with the portfolios of similar assets held by the agencies to which they were transferred. The reductions shown in these holdings between September 28, 1953, and June 30, 1954, are attributable primarily to repayments received. RFC Loans, Mortgages and Commitments Tran~ferred to Other Govemment Agencies (In mlllions of dollars) OUtstandinj Sept. 28, 19 No. Amount Disaster loans (Small Business Administration) __________ outstanding June 30, 1954 No. Amount Net Reduction in Portfolio No. Amount 3,605 $ 18.3 366 $ 3.1 3,239 $ 15.2 Direct, insured and partially guaranteed mortgages (Federal National Mortgage Association) ------ 15,594 69.5 556 5.2 15,038 64.3 :purchase money mortgages (Federal National Mortgage Association) ------ 4 42.3 0.8 4 41.5 Republic of the Philippines (ExportImport Bank of Washington) 1 48.0 6.0 1 42.0 19,204 $178.1 922 == = $15.1 = 18,282 $163.0 = = Organization and Personnel Administration of large numbers of loans and other assets scattered throughout the nation requires an extensive organization. If the liquidation of RFC's assets had been approached under a policy of holding all loans and securities to maturity, a large administrative organization would have been required over a period of many years. However, the 20 Digitized by Google success of the program of placing RFC's assets in the hands of private financial institutions has made it possible to achieve very substantial savings in overhead and administrative costs. The establishment of the RFC Loan Pool has been particularly important in reducing administrative costs. Under this plan, the servicing of the hundreds of small loans included in the pool has been moved from RFC personnel to banks located in or near the borrowers' communities. Shortly before passage of the RFC Liquidation Act, the Corporation was operating through a field organization of eight regional loan agencies and 26 branch offices. Immediately after the passage of the act, all of the branch offices were closed except one in Alaska and one in Puerto Rico. Throughout the balance of fiscal year 1954, the liquidation activities were carried on from the two field branches, the eight regional offices, and the central office in Washington. Effective J uly 1, 1954, all of the regional offices were closed and the remaining activities centralized in the Washington Office. The present reduced organization will steadily be contracted further, and will be kept to the minimum necessary NUMBER OF RFC EMPLOYEES AND AN NUAL RATE OF ADMINISTRATIVE EXPENSES Employees 2,&00.--------------, ltUMI Ut Expenses MILL ION OOI.L AIIS 20 2/)00 1,000 ~00 o ......._......__ 0 JANUARY I, J ULY I, JANUARY I, J ULY I, JAN UARY I, JANUARY I, JULY I, JANUARY 1, JULY I, 1953 1953 195~ 1954 1955 1953 19 53 1954 1954 JANUARY I, 1955 JEstlmoted) ( Eatlmoted ) 21 Digitized by Google to accomplish the liquidation of RFC's remaining assets in the most efficient and economical manner possible. The savings in administrative costs resulting from the actions taken with respect to the Corporation's organization are outlined in the chart on page 21. Financial Condition On pages 24 to 27, inclusive, appear statements showing the financial condition of the Reconstruction Finance Corporation as of June 30, 1954, the income and expenses of the Corporation for the fiscal year ended June 30, 1954, and an analysis of the Corporation's accumulated net income. The RFC Act, as amended, requires that the Corporation pay over to the Secretary of the Treasury, as miscellaneous receipts, all amounts by which the Corporation's accumulated net income exceeds $250,000,000 and reasonable reserves for uncollectibility of outstanding loans and investments. Under these provisions, the amount to be paid into the Treasury in fiscal year 1955 will be $34,288,000. During fiscal year 1954, the Corporation paid into the Treasury $180,000,000 representing proceeds of the production and wartime liquidation programs, and $1,200,000 representing proceeds of the liquidation of the Smaller War Plants Corporation. It is expected that all amounts borrowed by RFC from the Treasury will have been repaid prior to September 30, 1954, and that no future borrowings will be required. 22 Digitized by Google FINANCIAL STATEMENTS 23 Digitized by Google RECONSTRUCTION Flt1NANCE CORPORATION BALANCE J SHEET June JO. t, 1954 ------------.AIHh------------ -----------Liabilities----------- Remaining for Llquldallon-J11De 30. 1954 Loam. HCUritiH and nla!ed ncei•ah!N: Business loans ---------------------- $181,310,131 Equity in business loan pool {Loans--$59,124,338)-Note B ____________ _ 26,199,788 9,866,917 Railroads --------------------------------Financial institutions _____________________ _ 30,341,089 24,296,891 Public agencies ---------------------------272,014,816 Accrued interest and dividends ___________ _ 3,626,063 694,875 Other related receivables -----------------276,335,754 38,300,000 $238,035,754 Reserve for losses ---------------------------- Other auets: Assets acquired in liquidation of loans and securities-at lower of cost or appraised values ----------------------------------Securities accepted in reorganization of railroads--at lower of cost or appraised values Miscellaneous accounts and notes receivables Furniture and fixtures, less reserve for depreciation ------------------- 6,319,636 604,816 248,378 255,694 Caab -------------------------------- Total remaining for liquidation ________ _ '1,428,524 163,766,046 $409,230,324 LlabllltiN under lencllng progrum: 473,398 Accounts payable ------------------------- $ Trust and deposit accounts _______________ _ 1,295,331 $ 1,768,729 lleaen•s For employees' accrued annual leave _______ _ For losses under deferred participation in bank loans------------------------------ 1,288,896 Equity of U. S. Gonmmenh Notes payable to U. S. Treasury, including accrued interest ------------------------Dividends payable ------------------------Funds held for contingencies in liquidation of terminated wartime programs _________ _ Capital stock ----------------------------- 6,'163,932 34,288,019 Surplus: Unreserved ----------------------------Reserved for contingencies ______________ _ Total remaining for liquidation _______ _ 325,091 1,613,98'1 13,795,65'1 100,000,000 250,000,000 1,000,000 405,847,608 $409,230,324 Transfers to Other Government AgenclN-June 30. 1954 Loam. mortgages IIDcl other auets: Loan to Republic of the Philippines (Export-Import Bank of Washington) _____ _ Disaster loans and related receivables, less reserve for losses (Small Business Administration) -------------------------------Direct, insured and guaranteed mortgages, and related receivables (Federal National Mortgage Association) ------------------Equity in net assets of Defense Homes Corporation (Federal National Mortgage Association) ----------------------------Furniture and fixtures, less reserve for depreciation ----------------------------Cub-Production programs -----------------Total transfers -----------------------Total -------------------- LiabllltiN under transferred programs: 42,000,000 Accounts payable -------------------------Trust and deposit accounts-Note C _______ _ 13,669,836 Reserve for employees' accrued annual leave __ 29,394 3015,1541 158,012 64,'111,167 Equity of U.S. Go"Nrnment: 27,307,358 22,919 147,711,280 33,100,000 180,811,280 $590,041,604 Notes payable to U. S. Treasury ___________ _ Funds transferred for operations of production programs --------------------------Total transfers -----------------------TotaL __________________ _ 14'1,318,333 33,100,000 Google Digitized by 180,418,333 180,811,280 $590,041,604 See Notes to Balance Sheet on Page 26 24 Digitized by 334,9315 Google 25 NOTES TO BALANCE SHEET: NOTE A-Assets shown on the balance sheet represent those pertaining to the Corporation's lending activities, segregated as to (1) those remaining for liquidation at June 30, 1954; and (2) those transferred to other Government agencies at the close of business June 30, 1954, pursuant to the RFC Liquidation Act as implemented by Executive Order and Reorganization Plan No. 2 of 1954. The unliquidated assets relating to the production programs and terminated World War II programs are shown in statement on page 31. Non: B-RFC's equity ($26,199,788) in the business loan pool is subject to the terms of an "RFC Loan Pool Agreement" which provides that principal collections shall be applied first to reduction in Certificates of Interest to the extent that the aggregate unpaid amount thereof exceeds 50% of the total unpaid principal of current pool loans after which such collections shall be distributed equally to the RFC and certificate holders. RFC's interest in the current pool loans shall not be reduced to less than $15,000,000 until payment in full of the unpaid amount of, and interest on, all Certificates of Interest. NoTE C-ln addition to the liabilities reflected by the balance sheet, the Corporation is responsible for funds collected from mortgagors for the payment of taxes, insurance, etc., by servicing institutions. At June 30, 1954, such funds amounted to $1,393,498, all of which was on deposit with commercial banks covered by F .D.I.C. insurance. NOTED-The balance sheet amounts do not include commitments undisbursed at June 30, 1954, as follows: for direct and immediate participation loans to industrial and commercial enterprises$2,544,208; for deferred participations in bank loans$12,189,815; for loans sold subject to deferred participation$15,949,837; for loans to political subdivisions of states and territories-$8,607,400; and for disaster loans transferred to Small Business Administration at the close of business June 30, 1954$501,831. 26 Digitized by Google Reconstruction Finance Corporation STATEMENT OF NET INCOME FROM LENDING .ACTIVITIES Fiscal Year Ended June 30, 1954 INCOME: Interest and dividends earned on loans, securities, etc.: Business enterprises _________________ _ $12,996,460 3,007,673 Railroads institutions --------------------------Financial ________________ _ 1,073,780 Political subdivisions of states and ter1,197,511 ritories ---------------------------Other loans, mortgages and receivables 4,317,624 $22,593,048 Income from properties and securities acquired in liquidation of loan indebtedness, including _______________________ securities of reorganized_ railroads-net Income from equity in net assets of Defense Homes Corporation _________ _ Commitment fees ____________________ _ Fees on loan participation agreements __ Premiums and other income ___________ _ 2,249,708 700,208 68,797 256,613 417,307 3,692,633 26,285,681 INTEREST ARD OTHER EXPENSES: Interest on: Funds borrowed from U. S. Treasury __ Funds held for U. S. Treasury _______ _ Administrative expenses _______________ _ Service fees on mortgages -------------Guarantee fees and other expenses _____ _ Fees and expenses of liquidation of loans, etc. --------------------------------Net income before provisions for losses PROVISIONS FOR LOSSES _____________ _ Net income 2,767,700 1,077,608 5,506,504 326,364 14,261 137,334 9,829,771 16,455,910 869,282 ------------------ $15,586,628 ANALYSIS OF ACCUMULATED NET INCOME Unreserved Reserved for Contingencies Accumulated net income-June 30, 1953 __ $601,272,470 $24,200,000 Income for Fiscal Year 1954, as above ____ 15,586,628 Adjustments applicable to prior fiscal years 279,358 Reserved for contingencies ______________ 23,200,000 (23,200,000) 640,338,456 1,000,000 Less: Dividends paid or payable to U. S. Treasury ------------------------- 390,338,456 Balance-June 30, 1954 __________________ $250,000,000 $ 1,000,000 27 Digitized by Google LIQUIDATION OF .ASSETS OF nRMINATED WORLD WAR II PROGRAMS The Corporation is continuing the liquidation of assets acquired under terminated World War II programs. The assets remaining for liquidation are the residue from the extensive programs undertaken by the Corporation's World War II subsidiaries. The assets held for liquidation on June 30, 1954, were carried on the Corporation's books at $24,600,000. This includes $1,700,000 transferred to the Export-Import Bank of Washington under Reorganization Plan No. 2 of 1954. The character of the remaining assets is shown in the table below: Carry1n1 Value (In mtWom of dollan) June 30, Ram•Jnlng for liquldailon 111153 Note of Kaiser Motors Corporation _____ Property, plant and equipment: Under lease ____________________ $2.8 Held for disposal by G.S.A. -----------Conditional sales contracts _____________ Land grant freight claims ______________ Other receivables ________________ June 30, 1954 $12.3 1.9 0.1 1.5 5.0 1.5 3.9 4.3 2.2 2.1 Transferred to Export-Import Bok Capital stock, Amazon Credit Bank ______ 1.2 Loan to Newfoundland Railway Company 0.6 Advance to Government of Ecuador ______ 0.1 1.2 0.4 0.1 The above note of Kaiser Motors Corporation was previously held by ·the General Services Administration and was acquired by RFC in the transaction which resulted in the payment by Kaiser Motors of $28,000,000 on its indebtedness to RFC. During fiscal year 1954, the Corporation collected $2,600,000 on land grant freight claims. The development of additional land grant freight claims is being continued, with the expectation that all claims will have been developed and filed before the close of fiscal year 1955. Llquidallon of Smaller War Plants Corporation -By Executive Order 9665, the assets of the Smaller War Plants Corporation were transferred to RFC for collection or disposal. On June 30, 1954, the unliquidated assets of this program amounted to $1,600,000. This includes ten loans, with unpaid balances of $1.1 million, four properties valued at $94,350, and notes, contracts, deficiency judgments, and other receivables appraised at $287,800. 28 Digitized by Google In addition, there remain two outstanding loans made by banks in which the Government has a deferred commitment to purchase- a portion of the unpaid balance. The contingent liability on these loans amounted to $13,829 on June 30, 1954. The assets of the Smaller War Plants Corporation have been reduced to a point where the remaining assets are not marketable. Further liquidation of these assets is being continued on a work-out basis. PRODUCTION PROGRAMS The RFC has had responsibility for three production programs involving commodities essential to national defense and the civilian economy. These programs are synthetic rubber, tin and abaca fiber. The RFC Liquidation Act provided for the transfer of the production programs from RFC to agencies to be named by the President. By Executive Order 10539, the President transferred, effective at close of business on June 30, 1954, the synthetic rubber and tin programs to the Federal Facilities Corporation, and the abaca fiber program to the General Services Administration. Complete, separate reports on the operations of these programs by RFC for flscal year 1954 will be submitted to the Congress as required by the provisions of the respective statutes under which these production programs have been continued. Highlights of the operation of these programs are reviewed below: Synthetic Rubber: During fiscal year 1954, operation of the Government's plants was continued at the level required to fill industry's requirements for synthetic rubber. At the same time the Corporation cooperated in every way with the Rubber Producing Facilities Disposal Commission in the program to dispose of the plants to private industry. Production of synthetic rubber in fiscal year 1954 totalled 591,000 long tons. The cost of producing this quantity of synthetic rubber was $230,000,000. Sales of synthetic rubber to industry during the year amounted to 558,000. long tons, for which $277,900,000 was received. The operations of the synthetic rubber program during fiscal year 1954 produced a net income of $41,800,000, after allowing for administrative expenses, depreciation, and interest on Government funds invested in the program. 29 Digitized by Google Tin: Deliveries of tin to the national stockpile were completed during fiscal year 1954, and world tin supplies were adequate for current consumption requirements. Plans were made, therefore, to discontinue production of tin at the Texas City, Texas, smelter by June 30, 1954. However pending a review of the nation's tin situation, the Congress in July, 1954, adopted S. Con. Res. 79 which called for continuation of the program in fiscal year 1955. During fiscal year 1954, 32,507 long tons of tin metal were produced at the smelter. The cost of this production was $77,659,576. In addition, under commitments made with foreign tin producing countries, the Corporation purchased 13,828 long tons of tin metal at a cost of $35,567,229. All of the tin metal produced and purchased was sold at net operating cost to the General Services Administration for stockpiling purposes. Abaca Fiber: Under the provisions of the Abaca Production Act of 1950, the Corporation has carried on the production of abaca fiber on plantations located in Costa Rica, Guatemala, Honduras and Panama. The Act provides for continuation of the program until March 31, 1960, unless earlier termination is directed by the President or the Congress. Under the terms of a Presidential directive, the area under cultivation of abaca was limited to a total of 20,100 acres. During fiscal year 1954, a total of 25,185,850 pounds of abaca fiber was produced on the Government's Central American plantations. The cost of this production was $5,998,261. The national stockpile requirements for abaca fiber have been filled, except for rotation requirements. Therefore, the fiber produced on the Government's plantations has been offered for sale to industrial users. Market conditions in fiscal year 1954 were such that sales of only 14,016,636 pounds for $2,466,378 were accomplished. This resulted in a net loss of $2,577,231. At the end of June 1954, the unsold inventories of fiber held in the program amounted to 14,339,900 pounds. The cost of producing the fiber in this inventory was $3,470,482. 30 Digitized by Google Reconstruction Finance Corporation STATEMENT OF ACCOUNTABILITY TO U.S. TREASURY June 30, 1954 Total Accountabfllty ASSETS HELD (Bi depreciated or appraised values): Cash working funds held by agents or in transit _____ $ 1,489,176 Loans and accrued interest ________________________ 56,156,008 2,002,217 Accounts receivable from U. S. Government agencies_ Accounts receivable-other _________________________ 26,219,538 Inventories ---------------------------------------- 91,336,331 Property, plant and equipment ______________________ 161,125,810 Other assets -------------------------------------471,378 Deferred charges ---------------------------------2,450,027 1,969,574 17,709,308 91,336,331 159,156,320 $ 2,052 14,008,546 32,643 8,510,192 Smaller War Plants Corporation $ 568,597 Defense Homes Corporation $41,578,865 38 1,969,490 89,192 382,186 2,450,027 274,108,684 24,612,115 950,821 41,578,865 21,197,172 27,307,358 20,658,503 419,711 82,685 36,273 27,307,358 Total liabilities ------------------------------- 48,504,530 20,658,503 419,711 82,685 27,343,631 Net investment exclusive of funds held ________________ Cash funds held by RFC for program requirements ____ 292,745,955 46,895,657 253,450,181 33,100,000 24,192,404 13,373,127 868,136 422,530 14,235,234 Total accountability June 30, 1954 ______________ 339,641,612 Less: Net investment transferred to other governmental organizations as of the close of business June 30, 1954 ------------------------------------------- 302,421,850 286,550,181 37,565,531 1,290,666 14,235,234 286,550,181 1,636,435 Net assets remaining for liquidation by RFC __________ $ 37,219,762 - $ 1,487,124 Terminated World War II Programs Liabilities ------------------------------------------Equity of RFC in net assets of DHC __________________ Total assets held ------------------------------- 341,250,485 w Production Programs $35,929,096 14,235,234 $1,290,666 NOTE: Legal actions 1n which the Corporation ls a party defendant and other clalms against the Corporation relating to llquldation of national defense, war and reconversion activities involve contingent llabfll ties estimated at $12,000,000. Reconstruction Finance Corporation BORROWERS WITH ACTUAL OR POTENTIAL LIABILITY OF $100,000 OR MORE AT JUNE 30, 1954 BUSINESS LO.ANS RFC RFC PORTFOLIO Amount Alabama Alabama Grain Elevator Company, Mobile __ $ 1,272,000 Munro-Van Helms Company, Talladega______ 136,000 Arizona Copper Cities Mining Company, Miami _____ _ 7,500,000 California California Art Tile Corporation, Richmond __ Case Swayne Company, Inc., Santa Ana _____ _ Ensher, Alexander & Barsoom, Inc., Sacramento -----------------------------Hickmott Canning Company, Antioch ______ _ Langley Corporation, San Diego ___________ _ Oriental Foods, Incorporated, Los Angeles ___ _ Oxnard Canners, Inc., Monterey ___________ _ Pacific Grape Products Company, Modesto __ Roach, Hal Studios, Inc., Culver City _______ _ Wells All Steel Products, North Hollywood __ 801,115 110,000 529,058 160,560 199,220 236,157 1,079,283 117,098 Colorado National Alfalfa Dehydrating & Milling Company, Lamar----------------------------Rock Wool Insulating Company, Pueblo ___ _ 278,250 153,665 Connecticut Horle Arms Company, Deep River _________ _ New Haven Clock & Watch Company, New Haven ----------------------------------Delaware Price, W.W., Company, Inc., Smyrna _______ _ District of Columbia Dunbar House, Inc., Washington ___________ _ Mayfair Extension, Inc., Washington _______ _ Windsor Company, Washington ____________ _ Florida Hendry Corporation, Rattlesnake ___________ _ (Participation Purchased-Gross $114,996) Laris Painting, Inc., Green Cove Springs ____ _ Ruffe, Inc., Miami ------------------------- 32 Digitized by Google 178,850 114,100 153,000 1,206,745 162,614 648,772 288,743 891,811 68,997 206,052 117,529 RFC Portfolio (continued) RFC Florida (continued.) Amount Steel Products, Inc., Dania __________________ $ Weissinger, E. L., Lumber Company, Inc., Jacksonville ------------------------------ 299,344 146,081 Idaho Shore Club Lodge, Inc., Boise ______________ _ 109,050 Illinois Calumet Heat Treating Corporation, Chicago Dormeyer Industries, Chicago ______________ _ Galesburg Soy Products Company, Galesburg Martin, H. S., & Company, Evanston _______ _ Mosow Screw Company, Waukegan _________ _ Richter Spring Corporation, Chicago _______ _ Scholle Chemical Corporation, Chicago _____ _ South Water Building Corporation, Rockford __ South Water Machinery Corporation, Rockford 108,869 127,750 404,000 500,000 332,000 123,200 101,915 658,781 1,999,063 Indiana Gary Paper Mills, Inc., Gary _______________ _ Stadler Packing Company, Inc., Columbus ___ _ Vincennes Packing Corporation, Vincennes __ 426,000 318,442 205,613 Iowa Chandler Machine Products Company, Cedar Rapids ----------------------------------Davenport Besler Corporation, Davenport ___ _ Postville Packing Company, Postville _______ _ 128,000 595,741 118,400 Kentucky Green River Steel Corporation, Owensboro __ Harvest Furniture Manufacturers, Louisville __ 3,556,126 103,396 Maine Portland Copper & Tank Works, Portland ___ _ 133,333 Maryland Quality Meat & Provision Company, Baltimore Massachusetts Borden, R., Mills Corporation, Fall River ___ _ Hayward Woolen Company, Whittinsville ___ _ River Mills Corporation, Fall River ________ _ Waltham Watch Company, Waltham _______ _ 100,771 716,955 739,367 188,476 1,248,921 Michigan Camfield Manufacturing Company, Grand ----------------------------------HavenSteel Detroit Corporation, Detroit __________ _ 213,278 35,766,000 33 Digitized by Google RFC Portfolio (continued) RFC Amount Michigan (continued.) Douglas Tool Company, Detroit ____________ $ 188,686 Hammond Standish & Company, Detroit ___ _ 226,543 Kaiser Motors Corporation, Willow Run ____ _ 5,057,894 Mlsalssippl Dismuke Tire & Rubber Company, Clarksdale Missouri American Fixture & Manufacturing Company, St. Louis --------------------------------Montana H. S. Engine Company, Billings ______________ 146,250 1,341,489 105,205 Nebraska Wilson, C. C., Inc., Omaha _________________ _ 117,306 Nevada Copper Canyon Mining Company, Battle Mountain -------------------------------Mapes Hotel Corporation, Reno ____________ _ 117,105 578,587 New Hampshire Faulkner & Colony Manufacturing Company, 260,180 Keene-----------------------------------New Jersey National Tool & Manufacturing Company, 157,514 Kenilworth ------------------------------Pantasote Company, Passaic _______________ _ 494,953 Seaboard Refractories Company, Perth Amboy 187,650 New York Carthage Hydrocol, Inc., New York _________ _ 17,748,595 Deep Water Terminals, Inc., Brooklyn ______ _ 653,500 Hercules Food Service Equipment, Inc., 165,355 Brooklyn --------------------------------Kamen Soap Products Company, Inc., New 188,604 York ------------------------------------Meseck Towing & Transportation Company, 121,972 New York-------------------------------Meyerstein, Anthony M., Inc., Brooklyn _____ _ 173,853 Quigley Company, New York _______________ _ 130,831 Schenectady Railway Company, Schenectady__ 70,055 (Participation Purchased-Gross $116,758) Segal Lock & Hardware Company, Inc., New York ------------------------------------- 1,439,324 Soya Corporation of America, New York ___ _ 126,121 Utica Structural Steel, Inc., Utica ___________ _ 166,472 Vollmer Transportation, Inc., Amsterdam ___ _ 116,258 34 Digitized by Google RFC Portfolio (continued) RFC Amount North Dakota Newtown Water Sewage Utilities, Newtown __ $ 141,666 Ohio Concrete Masonry Corporation, Elyria ______ _ Dubuque Stamping & Manufacturing Company, Toledo-----------------------------------Firth Machine & Tool, Inc., Fostoria _________ _ Fischer Industries, Inc., Cincinnati _________ _ Green Ball Bearing Company, Cleveland ___ _ Tyson Bearing Corporation, Massillon _____ _ Yeager Company, Akron ___________________ _ 153,846 104,444 134,975 104,888 590,554 772,539 Oklahoma Community Hotel Company, Norman _______ _ Lawton Community Hotel, Inc., Lawton _____ _ 285,000 600,000 Oregon Oregon Fibre Products, Inc., Pilot Rock ___ _ Snellstrom Lumber Company, Eugene _____ _ 3,100,000 450,000 Pennsylvania International Felt Corporation, Philadelphia__ Whitehouse Paper Company, Philadelphia ___ _ 220,438 200,000 Tennessee Rose, D. M., & Company, Knoxville _________ _ 122,744 123,903 Texas Graham Hoeme Plow Co., Inc., Amarillo ___ _ 366,840 Jay Bee Manufacturing Company, Tyler _____ _ 127,202 254,151 Limestone Products Company, Inc., Cleburne Lone Star Steel Company, Dallas ___________ _ 48,440,485 Page, Holland, Austin ______________________ _ 150,309 Texas City Refining Company, Texas City ___ _ 3,192,066 Texas Frozen Foods Corporation, Harlingen __ 623,355 Texas Consolidated Oils, Dallas _____________ _ 8,539,672 Virginia Colonnas Shipyard, Inc., Norfolk ___________ _ 81,600 (Immediate Participation-Gross $108,800) Nebel, 0., Hosiery Corporation, Verona _____ _ 114,215 Stuart Gardens Corporation, Newport News __ 189,472 Virginia Lincoln Corporation, Marion _______ _ 365,413 Washington Arlington Lumber & Plywood Company, 128,414 Arlington--------------------------------Bellingham Canning Company, Bellingham __ 143,500 Bolinger Orchards, Methow ________________ _ 51,545 (Participation Purchased-Gross $114,545) 35 Digitized by Google RFC Portfolio (continued) RFC Amount Washington (continued) Columbia Packing Company, Snohomish ____ $ (See Deferred Participations in Bank Loans and Disaster Loans) Evans Lumber & Box Company, Inc., Seattle__ Resinweld Plywood, Inc., Tacoma __________ _ Seidelhuber Steel Rolling Mills, Inc., Seattle__ 17,264 458,037 126,750 760,000 Weat Vlrglnla Kelly Foundry & Machine Company, Elkins __ West Virginia Steel & Manufacturing Company, Huntington ________________________ _ 138,000 2,803,287 Alaska Alaska Plywood Company, Juneau _________ _ Matanuska Valley Lines, Inc., Anchorage ___ _ Usibelli Coal Mine, Inc., Healy Forks _______ _ 488,833 121,600 485,000 Puerto Rico Santurce Building Company, Inc., Santurce __ 289,868 Virgin Islands Morningstar Hotels, Inc., St. Thomas _______ _ Virgin Isle Hotel, Inc., St. Thomas _________ _ 122,945 292,000 LOANS INCLUDED IN RFC LOAN POOL Unpaid Loan Balance Alabama Belcher Olon Lumber Company, Brent ______ $ Kleins Dairy Products, Cullman ___________ _ McCullough Industries, Inc., Birmingham ___ _ 177,344 144,490 227,000 Arkansas Alma Canning Company, Alma _____________ _ American Radio & Television Company, North Little Rock -----------------------------Arkansas Printing & Lithographing Company, Little Rock ------------------------------Dillard Properties Company, Inc., Texarkana __ Farmers Soybean Corporation, Blytheville __ Jack Tar of Arkansas, Inc., Hot Springs_____ _ McCoy Couch Furniture Manufacturing Company, Benton---------------------------Wilson Soya Corporation, Wilson __________ _ 147,103 143,787 138,248 117,224 128,649 460,000 145,981 260,000 California Associated Iron & Metal Company, Oakland __ Crenshaw Hospital, Los Angeles ___________ _ Franco Italian Packing Company, Terminal Island ------------------------------------ 36 Digitized by Google 199,960 144,000 103,076 Loam lnclucled in RFC Loaa Pool (continuecl) California (continued) un:B:1i!ii:m Hi Shear Rivet Tool Company, Los Angeles __ $ 206,467 Macy & Company, Red Bluff ________________ 138,257 Minder, J. W., Chain & Gear Company, Los 178,993 Angeles ---------------------------------Sylmar Packing Corporation, Los Angeles __ 148,142 United Centrifugal Pumps, Oakland _______ _ 161,645 West Coast Packing Company, Long Beach __ 273,500 Colorado Arvada Packing Company, Arvada _________ _ Landers Packing Company, Denver _______ _ Pepper Packing Company, Denver _________ _ 112,289 334,217 227,624 Florida Florida Foods, Inc., Belle Glade ___________ _ Smith, I. H., Company, Jacksonville ________ _ Tampa Marine Company, Inc., Tampa _____ _ 141,250 271,974 150,000 Georgia Metal Arts · Manufacturing Company, Inc., AtlantaIndustries, ---------------------------------Stevens Inc., Dawson ___________ _ 102,000 196,829 Illinois Anderson, A. F., Iron Works, Chicago _______ _ Roberts & Oake, Inc., Chicago _____________ _ 119,853 236,932 Indiana Heinold Elevator Company, Kouts _________ _ Hoosier Crown Corporation, Crawfordsville __ 106,667 111,528 Iowa Sioux Industries, Inc., Sioux City ___________ _ 222,000 Kentucky Modern Welding Company, Inc., Owensboro __ Owensboro Sewer Pipe Company, Owensboro Russell Fork Coal Company, Inc., Elk Horn City-------------------------------------Massachusetts Dehydrating Process Company, Boston _____ _ Eastern Container Corporation, Springfield __ Harvey Whipple, Inc., Springfield ___________ _ Hayward-Schuster Wool Mills, Inc., Douglas Monument Mills, Inc., Housatonic __________ _ Phaneuf Hospital, Inc., Brockton ___________ _ Point Judith Dehydrating Process Company, Boston ----------------------------------- 253,125 173,335 365,000 100,000 225,346 147,671 196,856 453,000 176,340 142,000 37 Digitized by Google Loam Included In RFC Loan Pool (continued) Michigan Lippmans Tool Shop, Company, Detroit ______ $ Marine Steel & Welding Company, River Rouge-----------------------------------McCarthy, F. J., Inc., Cadillac _____________ _ Michigan Abrasive Company, Detroit _______ _ Stainless Ware Company of America, Walled Lake ------------------------------------- 105,900 127,165 118,412 142,470 238,469 Misaiaslppl Dixie Pine Products Company, Hattiesburg __ Fernwood Industries, Fernwood ___________ _ 284,473 261,294 New Jersey Hamersley Manufacturing Company, Garfield Oliver Manufacturing Supply Company, Rahway ---------------------------------Theobald Industries, Kearny _______________ _ Woburn Chemical Corporation, Kearny _____ _ 104,000 181,947 191,481 191,820 New York Bush, Clinton G., Company, Huntington Station ----------------------------------General Textile Mills, Inc., New York _____ _ Gioia Macaroni Company, Inc., Buffalo _____ _ Jamestown Sterling Corporation, Jamestown Mason, Au & Magenheimer, Inc., Mineola ___ _ McLaughlin Millard Company, Inc., Dolgeville Staten Island Rolladium, New Dorp _________ _ 228,000 109,228 114,500 211,246 374,356 141,215 123,598 North Carolina Jacks Cookie Company, Charlotte ___________ _ Kalmia Dairy, Inc., Hendersonville _________ _ Ramseur Furniture Company, Ramseur ____ _ Runnymede Mills, Inc., Tarboro ___________ _ 112,450 168,999 150,600 122,904 North Dakota Union Hospital Corporation, Mayville _______ _ 123,517 Ohio Braun Brothers Packing Company, Troy ____ _ Davey Compressor Company, Kent _________ _ Imperial Glass Corporation, Bellaire _______ _ Lockwood, L.B., Company, Cleveland _____ _ Martin Brothers Box Company, Toledo _____ _ 618,646 185,537 251,744 163,696 156,739 Oklahoma Stilwell Canning Company, Stilwell _______ _ 38 Digitized by Google 122,500 Loam ID.c:lwlec:I in RFC Loan Pool (continued) Oregon Lamb Weston, Inc., Weston------------------ $ Union Fisherman's Co-operative Packing Company, Astoria ---------------------------Webster, Roy, Orchards, Hood River _______ _ 136,445 165,475 110,225 PeDDSYlvanla Dodge Cork Company, Inc., Lancaster _____ _ Mcinnes Steel Company, Corry ___________ _ Reichard Coulston, Inc., Bethlehem ________ _ York Shipley, Inc., York ___________________ _ 103,085 118,652 364,948 224,896 Tennesaee Gordons, Inc., Johnson City _______________ _ (See Deferred Participation in Bank Loans) McAllester Hosiery Mill, Inc., Chattanooga __ Polston Flooring Manufacturing Corporation, Lafayette -------------------------------- 45,819 265,747 127,461 Texas Borger Hotel Corporation, Borger _________ _ Civic Hotel Corporation, Odessa ___________ _ Elsa Canning Company, Inc., Elsa ___________ _ (See Deferred Participation in Bank Loans) Henningsen Lamesa, Inc., Lamesa __________ _ Patio Foods, Inc., San Antonio _____________ _ Port Fuel Company, Inc., Brownsville _____ _ Raymondville Compress & Warehouse Company, Dallas -----------------------------Smyth, R., Grain Company, Aledo _________ _ Southern Maid Bakeries, Inc., Waco _______ _ Southwest Fertilizer & Chemicals Company, El Paso---------------------------------- 271,608 460,000 27,625 106,139 106,000 113,401 107,288 112,352 139,282 217,833 Virgin.la Draper, V. M., Manufacturing Company, Inc., Martinsville ------------------------------ 135,580 Washington Columbia Veneer Company, Kalama _______ _ 146,000 Weat Virginia Demuth Glass Works, Inc., Parkersburg ___ _ 128,650 Wlaconsln Menominee Sugar Company, Green Bay ___ _ 128,000 39 Digitized by Google Loam Included in RFC Loan Pool (continued) Unpaid Loan Balance Alaska North Star Enterprises, Anchorage __________ $ Westward Corporation, Anchorage _________ _ 124,398 220,557 Puerto Rlc:o Central Monserrate, Inc., Manati ___________ _ Central Eureka, Inc., Hormigueros _________ _ Corporacion Azucarera Sauri & Subira, Inc., Ponce ------------------------------------ 221,158 105,040 192,625 DEFEBRED PARTICIPATIONS IN BANE LOANS RFC Alabama Amount Haas Davis Packing Company, Inc., Mobile __ $ Huntsville Brick & Tile Co., Inc., Huntsville__ (Gross $102,382) Southeastern Metals Company, Birmingham__ 142,500 76,788 197,400 California Hovden Food Products Corporation, Monterey Pacific Tile & Porcelain Company, Paramount (Gross $114,000) Walti Schilling & Company, Santa Cruz _____ _ (Gross $100,000) 152,438 57,000 60,000 Illinois Soldwedel, F. H., Company, Pekin _________ _ (Gross $130,686) Turner Manufacturing Company, Chicago 90,989 175,872 Kentucky Fulton Ice Company, Inc., Fulton _________ _ (Gross $118,750) 89,063 Maine Plastics Materials Corporation, South Windham (Gross $104,720) 62,832 Nebraska Farm Fertilizers, Inc., Omaha ______________ _ New Jersey Borden Metal Products Company, Elizabeth __ (Gross $126,265) Russell Stanley Corporation, Woodbridge ___ _ (Gross $151,350) 108,750 63,133 75,675 40 Digitized by Google Defernd Partlc:lpatiom In BUik Loam (conilnued) RFC Amount North Carolina Bouligny, R., H., Inc., Charlotte ______________ $ Davis, W. A., Milling Company, High Point__ (Gross $169,535) 295,926 69,509 Ohio Sekely Industrial Tool Company, Salem (Gross $110,722) & Manufacturing 66,433 Oregon Pendleton Can & Frozen Foods Company, Pendleton -------------------------------(Gross $112,500) 84,375 Pennsylvania Hanlon & Wilson Company, Wilkinsburg ___ _ York & Foster, Inc., Union City ___________ _ (Gross $112,500) 126,349 67,500 Tennessee Gordons, Inc., Johnson City ________________ _ (Gross $55,000-See Loans Included in RFC Loan Pool) 41,250 Texas Elsa Canning Company, Elsa ---------------(See Loans Included in RFC Loan Pool) 150,000 Washington Bellingham Cold Storage Company, Bellingham ------------- ----------------------Columbia Packing Company, Snohomish ___ _ (See RFC Portfolio and Disaster Loans) Cowlitz Dairymen's Association, Kelso _____ _ Jordan Baking Company, Tacoma __________ _ (Gross $103,389) Pacific Waxed Paper Company, Seattle _____ _ (Gross $161,091) Upland Winery, Sunnyside _________________ _ (Gross $117,272) 152,037 22,328 109,192 51,694 96,655 87,954 Wl■c:onaln Simplex Machine Tool Corporation, Milwaukee 165,369 41 Digitized by Google LOA.NS SOLD SUBJECT TO DEFERRED PARTICIPATION RFC Amount Arkansas Owosso Manufacturing Company, Benton ___ $ 315,761 California Miller Dial & Name Plate Company, Los Angeles --------------------------------Pacific States Steel Corporation, Niles _____ _ Sugarman Lumber Company, Cloverdale ___ _ 136,796 844,076 1,224,000 Connecticut American Standard Products Company, Hartford-------------------------------------- 153,900 District of Columbia Marjorie Webster Junior College, Washington Young Men's Christian Association, Washing- 124,235 ton--------------------------------------- 181,480 Florida Srf!s~~Fae~~~~-~-:_~~~-~~~~~--=~~~~!~ 144,619 Georgia Warren Company, Atlanta _________________ _ 337,053 Illinois Gateway Engineering Company, Chicago ___ _ Solo Cup Company, Chicago _______________ _ 222,615 432,173 Indiana American Tractor Corporation, Churubusco __ 170,636 Kentucky Louisville Builders Supply Company, Louisville-------------------------------------- 403,733 Massachusetts A. & P. Corrugated Box Corporation, Lowell 1,037,547 Michigan Active Tool Manufacturing Company, Detroit Federal Industries, Inc., Detroit ___________ _ Rudy Manufacturing Company, Dowagiac ___ _ 301,198 128,745 132,603 Minnesota Cornelius Company, Minneapolis ___________ _ 158,843 Missouri McPike, Inc., Kansas City ~----------------42 Digitized by Google 170,698 Loam Sold Subject lo Deferred Participation (continued) RFC Amount New Jersey Essex Rubber Company, Trenton ____________ $ 126,635 Ohio Aeronca Manufacturing Corporation, Middletown------------------------------------Butcher & Hart Manufacturing Company, Toledo ----------------------------------Gussett Boiler & Welding, Inc., Canton _____ _ 116,550 186,923 193,442 Oregon Roseburg Lumber Company, Roseburg _____ _ 502,400 Pennsylvania France Packing Company, Philadelphia ____ _ 279,365 Texas Alford Refrigerated Warehouses, Dallas ___ _ West Texas Warehouse Company, Lubbock __ 2,511,000 127,229 Washington Everett Plywood & Door Corporation, Everett Mount Baker Plywood, Inc., Bellingham ___ _ Wakefields Deep Sea Trawlers, Seattle _____ _ 267,503 131,581 139,500 WiscoDBln Fall River Canning Company, Fall River ___ _ 242,280 RAILROADS Georgia Georgia & Florida Railroad Company, Augusta 1,610,957 Mississippi Meridian & Bigbee Railroad Company, Meridian --------------------------------- 1,332,626 New York New York, Ontario & Western Railway Company, New York _________________________ 2,248,000 Tennesaee Tennessee Central Railway Company, Nashville-------------------------------------- 6,007,960 43 Digitized by Google PUBLIC AGENCIES RFC Amount Alabama Cherokee, Town of, Cherokee --------------- $ Columbiana, Town of, Columbiana _________ _ 135,125 235,000 ArkllllSU Danville, City of, Danville ------------------ 109,400 Colorado Yampa Reservoir Irrigation District, Yampa __ (Par Value $117,000) 93,600 Florida Santa Rosa Island Authority, Escambia _____ _ 1,172,000 Illinois Chicago Board of Education, Chicago _______ _ (Par Value $183,529) Robbins Village of Cook County, Robbins __ 27,529 1,135,000 Kentucky Middlesboro, City of, Middlesboro _________ _ 198,000 Michigan Community Hospital Association, Battle Creek 116,400 Ml880url Excelsior Springs, City of, Excelsior Springs __ 186,760 Montana Billings Bench Water Association, BiUings __ Cartersville Irrigation District, Cartersville __ Cove Irrigation Company, Billings _________ _ 167,600 125,000 108,000 Nebraska North Loup River Public Power & Irrigation District, Ord ------------------------------ 176,400 New York Jewish Memorial Hospital, New York _____ _ 174,600 North Carolina Kure Beach, Town of, Kure Beach _________ _ 260,000 South Carolina Maryville and Bay View Water District, Georgetown ------------------------------ 150,000 T8DD.88see Tracy City, Town of, Tracy City ___________ _ 195,000 44 Digitized by Google Public .AgandN (c:olliiDued) RFC Amount Texu Alvord, City of, Alvord --------------------- $ Ellis County Levee lmprovernnt District No. 3, 200,000 144,100 Ferris -----------------------------------Galveston, City of, Galveston ______________ _ 1,100,000 Howe, City of, Howe ______________________ _ 100,000 Kaufman County Levee Improvement District No. 4, Crandall --------------------------163,000 Red Bluff Water Power Control District, Pecos 1,181,050 Stonewall County Water Control District, 312,000 Aspermont ------------------------------Wuhington Public Utility District No. 1, Pend Oreille County ----------------------------------- 20,791,000 FINANCIAL INSTITUTIONS New Jersey Commonwealth Trust Company, Union City __ 2,223,746 Trust Company of New Jersey, Jersey City __ 14,077,314 West Hudson National Bank, Harrison _____ _ 901,000 New York First Bank & Trust Company, Utica ________ _ 9,183,800 Vermont Orleans Trust Company, Newport _________ _ Valley Savings Bank & Trust Company, North Troy ------------------------------------Vermont Savings Bank, Brattleboro ________ _ 228,000 112,500 3,500,000 DISASTER California First Congregational Church, Bakersfield ____ _ First Christian Church, Bakersfield _________ _ St. Paul Episcopal Church, Bakersfield _____ _ 105,000 150,000 100,000 Florida South Dade Farms, Inc., Homestead _______ _ 345,000 ICllDSU Kansas Service Grocers, Kansas City _______ _ Kansas City Market Company, Inc., Kansas City ------------------------------------Kelly, J. R., Cooperage Company, Kansas City Midwest Cold Storage & Ice Corp., Kansas City 137,356 125,000 100,750 376,531 45 Digitized by Google Diauter (continued) RFC Amount Mluourl Central Realty, Inc., Kansas City ____________ $ Farm Belt Fertilizer and Chemical Co., Kansas City-------------------------------------Inter State Oil Company, Kansas City ____ _ National Manufacturing Company, Kansas City Western Mercantile Company, Kansas City __ 308,468 104,000 236,875 147,500 158,387 Pennsylvania Jeannette Glass Company, Jeannette _______ _ 132,966 Washington Columbia Packing Company, Snohomish ____ _ (See RFC Portfolio and Deferred Participations in Bank Loans) 64,543 SMALLER WAR PLANTS CORPORATION Mississippi Standard Millwork & Supply Company, Jackson ---------------------------------- 162,873 Montana Jardine Mining Company, Jardine __________ _ 558,332 New York Pitz Foundry, Inc., Brooklyn _______________ _ 115,658 Pennsylvania McGann Manufacturing Company, Inc., York 198,190 FOREIGN LOANS Newfoundland Newfoundland Railway, St. Johns __________ _ 427,098 Philippine Islands Republic of the Philippines _________________ 42,000,000 PURCHASE MONEY MORTGAGES District of Columbia Fairmac Corporation, Washington __________ _ 34,960,588 Meridian Hill Hotel Company, Washington __ 2,191,070 Veterans Co-operative Housing Association, Washington------------------------------- 3,760,652 Washington Bremco, Inc., Bremerton ___________________ _ 46 Digitized by Google 621,324 Digitized by Google Digitized by Google RFC Background The Corporation was created by Act of Congress approved January 22, 1932, primarily for the purpose of establishing a secondary source of credit to· aid in the stabilization of the nation's financial institutions. The Corporation was organized and began operations on February 22, 1932. In its early years, the Corporation's major function was to provide credit to agriculture, commerce, and industry through loans to banks and other financial institutions, insurance companies, agricultural agencies and railroads. The Congress later broadened the functions of the Corporation by including authority to purchase the capital stock of banks, insurance companies, agricultural credit corporations, and national mortgage associations. Authority was also given to RFC to make loans to business enterprises, mining interests, agricultural improvement districts, disaster victims and public school authorities, and to assist in financing the construction of public works. During the national defense and war periods, beginning in 1940, the Congress further augmented the Corporation's functions by giving it new responsibilties in connection with the national defense program. These functions included financing of plant conversion and construction, providing war production facilities, acquiring critical and strategic materials, making payments to producers under several direct subsidy programs and administering the war damage insurance program. These diversified responsibilities, except for defense lending, were conducted through subsidiary corporations. By legislation approved June 30, 1947, the Corporation's lending powers were substantially curtailed and its wartime functions were terminated, except with respect to the programs for the production of synthetic rubber, tin, and abaca. The lending activities thereafter were confined to business enterprises, including railroads and air carriers, financial institutions, political subdivisions of states and territories, and disaster victims. These authorities remained substantially unchanged until enactment of the RFC Liquidation Act. During the first 10 years of its existence, the RFC invested over $3,400,000,000 in approximately 7,000 banks in order to aid in resolving the critical banking situation then existing. Through loans and purchases of securities totalling $145,000,000, the RFC assisted in stabilizing the finances of more than 100 insurance companies. RFC lending included aid to the nation's railroads through loans or purchases of their securities amounting to more than $1,100,000,000. Financing of projects undertaken by municipalities and other public agencies was accomplished primarily by purchases of securities and totalled approximately $1,300,000,000. More than $69 million was disbursed by RFC to over 30 thousand disaster victims. Through its lending subsidiaries, the RFC authorized the purchase of 500,000 home mortgages for which $2,200,000,000 was disbursed. In the field of business lending, the Corporation approved 64,000 loans to business enterprises, including 23,000 loans made by banks in which RFC participated on a deferred basis. In all, during 21 years and 8 months of RFC lending, more than $12 billion was disbursed· in RFC's lending programs. On September 28, 1953, when the Corporation's lending authority ended. there remained to be liquidated nearly $800,000,000 in outstanding loans, securities, and commitments. Digitized by Google