Government: Hail & Farewell

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To U.S. businessmen's surprised pleasure, the Federal Government made two moves last week to get out of competition with private business.

¶ The Reconstruction Finance Corp. finally decided that its grandiose venture into prefabricated housing was a dismal flop. It began foreclosure proceedings against Lustron Corp., after sinking $37.5 million of public funds into Lustron's scheme to produce low-cost enameled-steel dwellings on an assembly line. Lustron actually produced only 2,200 houses, repaid not a cent in interest or principal on RFC's loan. By foreclosing, RFC admitted, it could not hope to recoup much more than 5¢ on the dollar.

¶ The Commerce Department began steaming out of the riverboat business as fast as it could go. Secretary of Commerce Charles Sawyer welcomed bids for the Government-owned, World War I-spawned Inland Waterways Corp., which operates a fleet of some 260 freight barges and 21 towboats on the Mississippi, Missouri and Warrior Rivers. Though the corporation hauled a record 2,900,000 tons of cargo in fiscal 1949, it lost $1,065,000, has not shown a profit in a decade. Last week, a syndicate of 14 private companies offered to lease the barge lines but made no bid for Inland's terminal facilities, would not promise to modernize its equipment. Secretary Sawyer turned the companies down. But still anxious to get the U.S. out of the barge business, he urged them to make a better offer.