THE R.F.C. AND THE PRESIDENT

John T. Flynn writes a timely article in the January issue of Harper's describing the destination of the millions of dollars loaned by the Reconstruction Finance Corporation for the aid of banks and railroads. Mr. Hoover, on signing the bill said: "It (The R.F.C.) is not created for the aid of big industries and big banks. It is created for the support of the smaller banks." And yet, as Mr. Flynn reveals, the greater part of the money was loaned to large banks. Shortly after Mr. Dawes had resigned as the head of the R.F.C. ninety millions were loaned to his bank in Chicago. Mr. Hoover immediately defended this action; it would help smaller banks. Eighty percent of the neighborhood banks in the whole city of Chicago already have closed.

Four hectic years have revealed the weaknesses of the banking system in the United States. Mr. Mills blamed the first thousand failures on England's leaving the gold standard. Yet not one of England's banks failed despite her impoverished condition. That the R.F.C. helped certain banks there is no doubt, but Mr. Hoover's statements have been mislaying. The small banks were not helped to the extent that he claimed. Mary a former staunch Republican realizes the, fatuousness of having trusted the departing administration. Audacity and insincerity comparable to Tammany's might have provoked admiration, but puerile blunders, too blatantly so to be successfully concealed have evoked merely contempt.

Whether Mr. Hoover concealed the intricate of the development of his prodigious ideas because he believed the public might not comprehend certain moves, or whether he did so because he was doubtful of their success is of little importance. It is the secrecy which has been involved in the workings of the Reconstruction Finance Corporation that has caused disfavor. When Mr. Roosevelt and his colleagues cuter the White House, they will have an opportunity to be as secretive as the out going administration. Mr. Roosevelt can appoint a commission to continue the investigation of the dishonesty in New York City politics. But eddy though the people do not expect him to act thus. They await his promised "new deal." May he start it by showing that he has enough confidence n his projects to make them public.