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money back promptly at any time by selling his loan to the Federal Reserve Bank.
To prevent abuse of this privilege my bill provides that such loans must have a maturity of not more than ten years, be so sound that they are reasonably sure to be repaid, made to a business enterprise which could not get the money from other usual sources atid must be for types of business which are necessary for our military defense or for essential civilian requirements. No single borrower could obtain more than $10C,000 under this plan.
This means that worthy loans to small business could be made by local bankers (who would be reasonably cautious since they could lose 10 percent or more on the deal) without any government agency entering into the original transaction. But the banker will have the encouragement of sharing the risk the Federal Reserve Banks and will know that his money is not “frozen” for a long period if he needs it.
This method of financing small business would be without expense to the federal government whereas the R.F.C. is now operating at a loss,
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