Mr. GRATZ. They cut it down to $200. On that $200, tax was paid. Senator MUNDT. Because you failed to submit your expense account, it meant that Brother Boyle didn't have to pay it to you, and the Federal Government paid that $200 to you. Mr. GRATZ. In that year I pointed out to the tax people that I had a lot of expenses in connection with my Government employment. We had a lot of out-of-town people whom we took out to dinner, and there was no way of being reimbursed for that. I had a lot of expenses in connection with my work. They lumped it all and made me pay the difference. Senator MUNDT. I am not saying you did wrong or the Internal Revenue Bureau did wrong. I am translating what happened. The $200 was allowed. That was money that Mr. Boyle would have paid to you. Mr. GRATZ. I pointed out that I had expenses as a top official in RFC, for which I couldn't be reimbursed, involving taking people to lunch, et cetera. Senator MUNDT. Government officials cannot do that anyhow. We found that out. Senator HOEY. Mr. Gratz, thank you very much. Mr. GRATZ. Thank you. Senator HOEY. I will put in here, as part of the record, an extract from the minutes of a meeting of the Board of Directors of the Reconstruction Finance Corporation held September 18, 1950. This is a resolution adopted by that Board. One of the Senators asked that it be included in the record. (The resolution referred to above was marked "Exhibit No. 44," and may be found in the appendix on p. 1251.) Senator HOEY. The committee will now take a recess until called together again. No further hearings will be held immediately. (Whereupon, at 5:05 p. am., the meeting was adjourned.) Business-Printing of business forms, especially the fanfold and snap-out type where carbon paper is interleafed with paper. These forms are used by a large number of commercial firms and by the Government. Employment-At present 376. No increase anticipated from loan. 1 In event the directors are disinclined to approve a refunding loan of the above amount, the borrower requests consideration of an additional loan in the amount of $125,000. Maturity requested-December 1, 1956. Efforts made to obtain requested loan from banks or other sources—Application for loan was submitted to the First National Bank, St. Louis, Mo., but bank declined the loan, giving as reason that borrower's financial condition as reflected by its statement did not warrant any further extension of credit. Participation-None. Previous action-Application for $548,219.50 was declined by directors on January 13, 1949. Basis for reconsideration-Borrower has requested that application be subImitted for the Directors' reconsideration. As indicated above, borrower would also like consideration on basis of additional loan of $125,000 if Directors are disinclined to approve an additional and refunding loan of $548,219.50. Purpose Refund existing RFC (SWPC loans). Pay W. E. Heller & Co., inventory loan__ Requested $158,219.50 101, 747.50 Repurchase accounts receivable from W. E. Heller & Co.- 149, 768.66 138, 483.94 Total 548, 219. 50 Recommendation: Agency manager: Decline. Review committee: Decline. As alternative proposal borrower has suggested loan of $125,000 to mature in 1 year, purposes to be as follows: To retire mortgage on buildings used by borrower, mortgage held by Balance, working capital_. Total__. Recommendation: Agency manager: Decline. Requested $42, 000 83,000 125,000 Review committee: Decline. Agency advisory committee recommends.-Decline loan $548,219.50; no advice re loan of $125,000. Agency review committee recommends.—Decline loan $548,219.50 and alternative loan of $125,000. Agency examiner recommends.-Decline loan of $548,219.50. Washington Examiner Brodie recommends.-Decline both loan of $548,219.50 and alternative loan of $125,000. Small Business Division recommends.—A refunding and additional loan of $500,000 or an additional loan of $80,000 for working capital, with preference for refunding and additional loan of $500,000. Status of outstanding loans.-The following is status of outstanding SWPC loans transferred to RFC under Executive Order 9665: Loan No. 2: Purchase machinery and equipment--Collateral now held-[000 omitted]: 1, 671, 000 40, 776 $594 Total Machinery and equipment: Cost__ Net book value. Appraised value_ Loan value___ 348 1478 1167 1 For details see attached memorandum of RFC Engineer M. M. Repass, covering his inspection of Feb. 2 and 3, 1947. (Agency gives appraised value as $528,000 and loan value of $141,000.) Guaranty: Personal guaranty of R. J. Blauner, vice president and general manager, and wife. Guaranty is secured by a mortage on the bank and building occupied by the borrower, subject to a first mortgage in the amount of $42,734.70 held by Neimeyer Estate. Land and buildings, as indicated in Mr. Repass' report, are appraised at $247,500 and in his opinion have a loan value of $119,586, or $76,852 in excess of the outstanding first mortgage. Collateral offered for new loan ($548,219.50).—In addition to the above collateral borrower also proposes: 1. To assign current accounts receivable, in the amount of $250,000, of which around $149,800 are to be repurchased from Heller & Co., assignment to be on basis of 80-percent loan value. 2. Pledge of inventory (acceptable carbon paper and paper) with value of $177,000, advances to be made at 65 percent of its value. To recapitulate collateral on above basis: Collateral offered for alternative loan of $125,000.-Upon payment of $42,000 to retire balance owing on first mortgage on land and buildings, R. J. Blauner and his wife have agreed to accept common stock of the borrower in exchange for the property. Borrower then proposes to execute a first lien to the RFC. No mention is made of the fact that the RFC already, through the secured guaranty of the Blauners, has a lien on these properties subject to the existing first mortgage. Financial statement as of October 31, 1948 (cents omitted).— Maturity requested-December 1, 1956. Efforts made to obtain requested loan from banks or other sources-Applica tion for loan was submitted to the First National Bank, St. Louis, Mo., but bank declined the loan, giving as reason that borrower's financial condition as reflected by its statement did not warrant any further extension of credit. Participation-None. Previous action-Application for $548,219.50 was declined by directors on January 13, 1949. Basis for reconsideration-Borrower has requested that application be submitted for the Directors' reconsideration. As indicated above, borrower would also like consideration on basis of additional loan of $125,000 if Directors are disinclined to approve an additional and refunding loan of $548,219.50. Purpose Refund existing RFC (SWPC loans). Pay W. E. Heller & Co., inventory loan.... Requested $158, 219.50 101, 747.50 Repurchase accounts receivable from W. E. Heller & Co-- 149, 768. 66 138, 483.94 Total 548, 219.50 Recommendation: Agency manager: Decline. Review committee: Decline. As alternative proposal borrower has suggested loan of $125,000 to mature in 1 year, purposes to be as follows: Requested To retire mortgage on buildings used by borrower, mortgage held by $42,000 Agency advisory committee recommends.-Decline loan $548,219.50; no advice re loan of $125,000. Agency review committee recommends.-Decline loan $548,219.50 and alternative loan of $125,000. Agency examiner recommends.-Decline loan of $548,219.50. Washington Examiner Brodie recommends.-Decline both loan of $548,219.50 and alternative loan of $125,000. Small Business Division recommends.-A refunding and additional loan of $500,000 or an additional loan of $80,000 for working capital, with preference for refunding and additional loan of $500,000. Status of outstanding loans.-The following is status of outstanding SWPC loans transferred to RFC under Executive Order 9665: |