Word: loans
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Dates: during 1950-1959
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...that RFC has a new and vigorous boss, a lot of skeletons are coming out of the closet. Last week, Administrator W. Stuart Symington opened the door on what looked like the biggest, ugliest skeleton of all: RFC's $87 million loan to the Baltimore & Ohio Railroad, largest ever given to any U.S. railroad, during the regime of Jesse Jones. In the last eight years, the B. & 0. has paid back only $6,800,000, although the road is fat with profits. (Other roads have paid back 80% of their RFC loans...
...went into bankruptcy again in 1944, at a time when its net profits for the four previous years were $117 million, highest in the B. & O.'s 120-year history. The railroad claimed it was forced into bankruptcy because it couldn't afford to pay its RFC loan. Senator Tobey charged that the bankruptcy was "collusive and irregular" because the road, with RFC's knowledge, had put on a poor mouth by juggling its cash. It had siphoned off $31.5 million to pay off bonds long before they were due, had underestimated its earnings for the following...
After the second bankruptcy, B. & O. General Solicitor Cassius Clay (an ex-RFC lawyer), resigned in disgust, was joined by another B. & O. lawyer. Said 'lay after he quit: the loans were a "gigantic steal," a "frame-up" and a "fraud." The bankruptcy, said the Tobey report, did more than postpone payment of the loan. It enabled the railroad to convert the notes held by RFC into non-salable bonds, hence left RFC with a frozen loan rather than a live claim on the B. & O.'s assets. Once converted, RFC's collateral Dehind its loans...
...early 1950 John U. Monro '34 was named to head a Financial Aid Center, which now integrates scholarship, employment, and loan aid to the men who have been admitted...
...Home Owners' Loan Corporation went out of business last week. Started in 1933, when mortgages on U.S. homes were being foreclosed at the rate of 1,000 a day, HOLC refinanced 1,017,821 mortgages, managed to save 80% of the homes for the original owners. The corporation has not made a loan since 1936, has spent 15 years tending its mortgages, made money in the process. Last week, HOLC made a farewell gift to the U.S. Treasury: its $13,800,000 cash surplus...