Letter Authorizing the Reconstruction Finance Corporation to Finance Commodity Loans.

My dear Jesse:

There have been under consideration, as you know, Commodity Credit Corporation loans, including corn loans, aggregating approximately $85,000,000. I have decided to recommend to Congress as soon as it meets, legislation which will provide the Commodity Credit Corporation with ample capital and with authority to raise the funds necessary for its operations through the sale of its own obligations. This legislation should authorize annual appropriations to be made available to the Corporation to cover any impairment of its capital as shown by an appraisal of its assets from year to year. Under this plan each year's budget will reflect the losses, if any, sustained by the Corporation.

This year's budget, as revised by my summation of October 18, contains an estimate of $100,000,000 for the Commodity Credit Corporation, which should be adequate to cover the needed capital for the fiscal year 1938. Pending this legislation, it will be necessary for the Reconstruction Finance Corporation to provide for these loans in an aggregate of not to exceed $85,000,000, the loans to be made by the Commodity Credit Corporation, as in former years, with a definite commitment from the Reconstruction Finance Corporation to provide the Commodity Credit Corporation with the necessary funds. These loans should only be made under regulations prescribed by the Secretary of Agriculture with my approval.

When the legislation referred to has been enacted, the Reconstruction Finance Corporation will be relieved of this temporary commitment and reimbursed for any advances made thereunder.

Honorable Jesse H. Jones,

Reconstruction Finance Corporation,

Washington, D.C.