Mcallen Daily Monitor

A WASHINGTON DAYBOOK
By HERBERT PLUMMER
WASHINGTON, Jan. 8. - Many "new dealers" are more concerned than they care to admit publicly over the problem of Uncle Sam's collecting from delinquent borrowers. They believe it is no longer an academic question.
It is estimated that more than seven billions of dollars of government credit have been pumped into banks, insurance companies, railroads, building and loan associations, and to business men, home owners, farmers and others.
The very serious question has presented itself of what the government is to do if these borrowers cannot pay interest on their loans. Some have defaulted already. Others are expected.
U. S. Has Railroad
The RFC has had the novel experience of being offered the private business of one man who could not meet his obligations. This agency already has taken over operating control of a railroad 232 miles long in the west.
When the Denver and Rio Grande couldn't scrape up enough money to pay the interest on a loan to complete its portion of the Moffat line through the Rockies, it turned over control to the government.
This had the effect of putting Uncle Sam back in the railroad business for the first time since the World war.
With hundreds of millions already lent to the railroads, some of which have defaulted, many expect increased pressure to push the government further into operation of these lines.
Holding The Bag ?
The railroads are not the only ones in difficulty.
The RFC has placed a man of its own choosing at the head of a bank to whom it extended credit. HOLC is being urged to take steps against defaulting borrowers on mortgage loans.
The argument is being advanced that unless something is done to the delinquents now the situation probably will get out of hand. Others will get the idea, it is argued, that nothing will be done to them if they fail to pay, and the government will be left holding the bag.
Many fear the government is heading toward the situation in which private banks now find themselves. In the course of years of lending these banks gradually came into control of large blocks of real estate, industries and other private enterprises.
A builders' survey shows fewer new homes with two baths. With Repeal here, obviously no extra bathtub is needed for home-made gin.
The New Deal is winning greater respect in Europe, but critics of the Administration will insist they never understood America over there, anyway.