The Bush administration’s economic rescue plan has been unfairly labeled a corporate bailout, but if the plan fails, there will be “wholesale bank failures,” the head of a large investment brokerage firm said Tuesday.

“Banks don’t have the cash to make loans today,” James D. Weddle, managing partner of St. Louis-based Edward Jones, told local clients and financial advisers during a meeting at The Chattanoogan hotel. “The only people who can get loans are the ones who don’t need it.”

Members of Congress made the proposal a “political football” on Monday when they rejected the $700 billion economic bailout bill, said Mr. Weddle, who predicted some form of the plan will be approved.

“It will be; it must be,” he said.

Banks, not corporate executives, are the intended beneficiaries of the Treasury Department’s plan to save mortgage-related assets, Mr. Weddle said.

The government may not make a profit on the plan, but the effort would provide crucial liquidity to the market. The version of the plan that Congress voted down had good safeguards and federal oversight, he said.

The government’s recent takeover of Fannie Mae and Freddie Mac was necessary since the companies held about half of the nation’s mortgages, Mr. Weddle said. The companies did not work because of their hybrid nature in which they had implied government backing but also had stockholders.

The economic crisis began with lenders providing easy f inancing to home buyers who could not afford to repay the loans, he said, which were repackaged as securities and sold to investors. Speculation abounded on the likelihood of the securities defaulting.

The Edward Jones executive said the country is in a bear market, but the economy will recover, noting that there have been 12 recessions since 1945.

Nationwide, 30 percent of houses have no mortgages and only 8 percent of houses with a mortgage are in default. Recovery is possible, with early indictors including the peaking of gold prices, the strengthening of the dollar against world currencies and oil’s dropping below $100 a barrel on Monday, he said. On Tuesday, oil rose $4.27 to settle at $100.64.

Tunnel Hill, Ga., residents Tina and Kevin Kellogg were among the roughly 400 clients and Edward Jones advisers attending the speech.

Mrs. Kellogg said she was not worried about the family’s investments, but rather whether her daughter can borrow enough to attend college. The couple said they oppose President Bush’s economic bailout plan.

“I think (executives) are trying to fatten their pockets,” Mr. Kellogg said.

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