Word: lustron
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Congressional tempers had really burned over such loans as the $6 million to wobbly Waltham Watch Co.; $37.5 million to the now bankrupt Lustron Corp.; $10.1 million to Texmass Petroleum Co., which used 81% of the money to bail out creditors; and $975,000 to Reno's Mapes Hotel, which gets a big part of its income from a thriving gambling concession. Congressional probers had found that 50% of all RFC business loans had gone down the drain of shaky companies instead of being used to finance new ventures...
...Washington gossiped that RFC's inept management had not been the only reason for the President's head chopping, especially since some of RFC's biggest blunders (e.g., Lustron) had been made under White House pressure. Another probable cause was the fact that both Gunderson and Hise had opposed Truman's plan to transfer RFC to the Commerce Department. Furthermore, Gunderson had bucked Truman's plans to aid small business with federal loans; Gunderson thought that a cut in taxes would help far more...
When both the depression and war had vanished, RFC, in its $6.5 million new Washington office building, kept lending away: to Henry Kaiser ($188 million), the now bankrupt Lustron Corp., the foundering Waltham Watch Co. (which later hired an RFCman as president). It also decided to prop up gasoline stations, country stores, restaurants, plumbers and a host of small businessmen. Though it made some curious loans, it claimed an overall profit of $560 million during its existence...
...story of bankrupt Lustron Corp. neared its end last week, as far as RFC was concerned. It took possession of Lustron's machinery, equipment, patents and trade name, bought at public auction the week before for $6,000,000. (RFC already owned the plant.) By selling the assets off, RFC thought it might get back a little of the $37.5 million it had poured into Lustron. But at week's end Lustron creditors started a fight to get a cut of the assets. It looked as if the squabble over Lustron's bones might drag...
...other news of Lustron's doings, see NATIONAL AFFAIRS...