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House Document No. 763

78th Congress, 2d Session

ELEVENTH ANNUAL REPORT OF THE FEDERAL
HOME LOAN BANK ADMINISTRATION

LETTER
FROM

AGENCY,
THE COMMISSIONER, NATIONAL HOUSING
FEDERAL HOME LOAN BANK ADMINISTRATION
TRANSMITTING

THE ELEVENTH ANNUAL REPORT OF THE FEDERAL
HOME LOAN BANK ADMINISTRATION FOR THE PE
RIOD JULY 1, 1942, THROUGH JUNE 30, 1943, COVERING
THE OPERATIONS OF THE FEDERAL HOME LOAN
BANKS, THE FEDERAL SAVINGS AND, LOAN ASSOCIA
TIONS, THE FEDERAL SAVINGS AND LOAN INSURANCE
CORPORATION, THE HOME OWNERS' LOAN COR
PORATION, AND THE UNITED STATES
HOUSING CORPORATION

NOVEMBER 14, 1944.-Referred to the Committee on Banking
and Currency and ordered to be printed




UNITED STATES
GOVERNMENT PRINTING
WASHINGTON : 1944

OFFICE




LETTER OF TRANSMITTAL

NATIONAL HOUSING AGENCY,
FEDERAL HOME LOAN BANK ADMINISTRATION,
OFFICE OF THE COMMISSIONER,

Washington, D. C., October 30, 1944.
The SPEAKER OF THE HOUSE OF REPRESENTATIVES,

Washington, D. C.
MY DEAR MR. SPEAKER: ,I am sending you herewith the Eleventh
Annual Report of the Federal Home Loan Bank Administration for
the period July 1, 1942, through June 30, 1943, covering the operations
of the Federal Home Loan Banks, the Federal Savings and Loan
Associations, the Federal Savings and Loan Insurance Corporation, the
Home Owners' Loan Corporation, and the United States Housing
Corporation.
Again this year, as a wartime economy, we have substantially cur
tailed the text of the report and have had it multilithed in our own
duplicating section. The attached copy is one of a very limited
number which have been prepared in compliance with instructions
contained in Budget Circulars No. 379 and No. 389.
Sincerely yours,
JOHN

H.

FAHEY,

Commissioner.

For sale by the Superintendent of Documents, U. S. Government Printing Office
Washington 25, D. C. - Price 15 cents




II




CONTENTS
Page

---------------------------I. The year in retrospect
Residential construction and the real-estate market -1-------Residential constructionBuilding costs----------------Real-estate market-------------Real-estate overhang ------------------------------------------------Mortgage finance and savings
Home-mortgage lending in 1942Home-mortgage debt---------------------------------Private savings------------------------------------II. Savings and loan associations----------------------------------Number and assets ----------Operations in a war-time economy ----------------------------------- ---Lending 'operations ----------------------Service to the, public---Increased strength of savings and loan associations - - - - - Financial operations--------------Balance sheet-------------------------------------Statement of operations -----------------------------III. Federal Home Loan Bank Administration ------------------Administrative expenses of the Federal Home Loan Bank
Administration - ------------------------------------IV. Federal Home Loan Bank System-----------------------------Lending activity of regional banks ------------------------Members' deposits ---------------------------------------Debenture financing
--------------------------------Financial statements -----------------------------V. Federal Savings and Loan Insurance Corporation __------20
----------------------Insured institutions ------Operations of the Insurance Corporation -------------------Insurance settlements ----------------------------------Operations of insured institutions in default- -------------------------------VI. Home Owners' Loan Corporation ---------------------------------------General operations
/Status of accounts ---------------------------------------Accounts terminated-------------------------------Mortgage and vendee accounts -----------------------Properties acquired, including those subject to redemption Property accounts----------------------------------Reconditioning---_
-----------------------------------Appraisals- -------------------------------------------Financial statements ---------------------- /-----------War housing activities----------------------------------Programing -----------------------------------Applications for conversion- -------------------------Production---------------------------------------Cost ---------------------------------VII. United States Housing Corporation ---------------------------List of exhibits--------------- --- -- %
Exhibits----------- -----------------------




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33

ELEVENTH ANNUAL REPORT OF THE FEDERAL
HOME LOAN BANK ADMINISTRATION
I. THE YEAR. IN RETROSPECT
During the fiscal year 1943, the war overshadowed all other influ
ences affecting economic trends. The national effort was devoted in
creasingly to war production. By the end of the reporting period,
expenditures for war activities amounted to more than $7,000,000,000
a month./
This tremendous effort absorbed the output of millions of American
workers, -many of whom migrated to the centers of war production.
War-housing needs rose. requiring action by the housing agencies-con
solidated under the National Housing Agency.
At the same time, incomes of American workers increased to the
highest levels in the history of the Nation. As the result of growing
shortages of civilian goods, and the monetary requirements of the Fed
eral Government, a large portion of these- incomes was either invested
in War bonds or otherwise permitted to accumulate as savings.
However, these increased incomes are being used in part to purchase
real estate. Because of the demand for homes by war workers'who
need quarters in centers of war production, and who have more pur
chasing power available than ever before, there i§ inflationary pressure
on real-estate prices. Thi's upward pressure on prices, coupled with
the fact that lending institutions have difficulty in finding satisfactory
investment outlets, results in a temptation to make inflated loans
based on appraisals reflecting temporary market conditions. This may
develop a situation which could become a menace and interfere with
the prompt resumption of home building after the war.
RESIDENTIAL

CONSTRUCTION

AND THE REAL ESTATE MARKET

Residential construction.
-The fiscal year 1943 was the first full year
during which the War Production Board'Ef Order L-41 limiting con
struction had been in continuous operation. As, might be expected,
there was a substantial decline in residential construction. This is
shown by the table of nonfarm dwelling units presented as exhibit -1
of this -report.I
During the Lisal year 1943, the number of nonf arm dwelling units
completed was approximately 391,700, compared with 652,100 during
the 1942 fiscal year and-697,900 during the 1941 fiscal year. The de
cline during the, reporting period represents the first important inter
ruption in the trend of new residential construction, which has' been
rising steadily since-the depression of 1932_"033.
Much of the war housing is temporary construction or is located in
places where there may be no great demand for it after the war. Such
construction cannot be financed privately, and this portion of war




2

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

housing must necessarily be publicly financed. Because of the increase
in publicly financed construction and the decline in private construc
tion, publicly financed units built during the fiscal year 1943 exceeded
privately financed units for the first time. During the reporting period
publicly financed nonfarm dwelling units totaled 196,885 as compared
with 154,139 during 1942 and 106,672 during 1941.
Building costs.-In June 1943 the wholesale price index of building
materials, as reported by the Bureau of Labor Statistics, was 123.5,
which was up only fractionally from the index for June of 1942. The
index, computed for each month of the past fiscal year, ranged only
from 122.6 to 123.5.
This stability in the cost of building materials, which probably
resulted from the imposition of price ceilings, is reflected in the Fed
eral Home Loan Bank Administration's index of labor and material
costs for constructing a standard six-room frame house in selected
cities. During the reporting period retail material prices, as reflected
in this index, rose from 121.2 to 123.0.
Labor costs, however, rose more rapidly than material costs. The
index of the cost of labor to build the standard six-room house increased
from 127.8 in June of 1942 to 134.3 in June of 1943. For this reason
the index of total building cost rose from 123.5 to 126.8 during the
same period. Exhibit 2 presents these indexes monthly for the 1942
and 1943 fiscal years.
Real-estate market.-The strength of the real-estate market during
the fiscal year 1943 was demonstrated by the decrease in nonfarm
foreclosures, which were estimated to be 33,402, compared with 49,890
during the 1942 fiscal year and 69,169 during the 1941 fiscal year.
Foreclosures during thq 1943 fiscal year were less than half those
during 1941.
The improvement was general throughout the Nation, being shared
by each of the 12 Federal Home Loan Bank Districts and by every
State except Nevada, where the total number of properties foreclosed
was so small that the general trend may have been overshadowed by
random fluctuations. Even in New York, the Bank District reflecting
the smallest improvement, foreclosures during the 1943 fiscal year
declined one-fourth from those of the previous year. The number of
nonfarm real-estate foreclosures during the last 2 fiscal years, by
Federal Home Loan Bank Districts and by States, is presented in
exhibit 3.
Real-estate overhang.-During the calendar year -1942, the latest
12-month period for which data are available, the estimated book
value of residential real estate owned by operating savings and loan
associations, commercial and mutual savings banks, life insurance
companies, and the Home Owners' Loan Corporation decreased 27.5
percent from $1,387,165,000 to $1,005,893,000, a larger percentage
reduction than that for the previous year. This reduction was due
to increased demand resulting from industrial expansion, rising family
incomes, and movement of war workers at a time when the supply of
new homes was curtailed through the stopping of all but war housing
projects.
Liquidation of real estate held by mortgage lenders has been so
rapid in recent years that the total held on December 31, 1942, was
little more than one-third of that held by these lenders 4 years before.
In 1942, as in the previous year, savings and loan associations led all




REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

3

types of lenders in disposing of real estate owned. During the, year
the holdings of such associations declined from $327,620,000 to
$203,819,000, a decrease of 37.8 percent. The holdings of mutual
savings banks and of commercial banks decreased by 33.3 and 33.0
percent, respectively. For the Home Owners' Loan Corporation,
the reduction in real estate owned was 19.3 percent. The smallest
percentage decline, 17.6 percent, was shown by the life insurance
companies, which now hold more residential real estate than any other
class of lender. Figures for the residential real estate owned by
financial institutions are presented in exhibit 4.
In the Northeastern States the problem of the real-estate overhang
is especially, acute. Most of the small amount of real estate now
owned by the Home Owners' Loan Corporation, for example, is now
concentrated in these States. The concentration of the problem for
savings and loan associations is indicated by the fact that these associ
ations in New Jersey and Pennsylvania own more than one-third of
the real estate owned by the entire savings and loan industry at the
close of 1942, although only about 10 percent of the outstanding mort
gages were located in these two States.
However, the widespread extent of improved conditions is shown by
the fact that residential real estate owned by savings and loan associ
ations was reduced in each of the Federal Home Loan Bank Districts
during 1942. The decrease ranged from 12.4 percent in the Los
'Angeles and 14.3 percent in the Portland regions to 43.4 percent in the
Chicago and 46.0 percent in the Boston Districts.
The rapid reduction in, properties held by financial institutions
means that these institutions will be better prepared to finance housing
demands in the post-war period. Also, the real-estate market will
then be in a healthier condition because it will be freed in most locali
ties from the depressing influence of institutionally owned properties
which are either actively or potentially a threat to the stability of the
market. Real-estate holdings of mortgage lenders have now been
reduced so greatly that the properties still held are largely those which,
because of obsolescence, local conditions, or other reasons are unusually
difficult to sell.
MORTGAGE

FINANCE AND

SAVINGS

Home mortgage lending in 1942.-The volume of new mortgage-loans
written on nonfarm one- to four-family dwellings was estimated to be
$3,082,000,000 during the calendar year 1942. This compared with
$3,768,000,000 during 1941 and $3,270,000,000 during 1940. The
drop in 1942 was caused in large part by the decrease in new building
resulting from the order of the War Production Board limiting
I
construction.
The decline in mortgage lending activity would have been even
greater had not loans made to finance home purchases expanded. The
migration of workers to war centers where many were forced to buy
homes because of inability to rent, and the higher incomes which
encouraged many families to buy homes, resulted in a large volume of
lending to finance real-estate sales.
Figures for the mortgage loans written by each of the major lending
groups are presented in exhibit 5 It will be noted that savings and
loan associations as a group ranked first, writing more than a third of
64952---44---2




4REPORT

OF FEDERAL; HOME LOAN BANK ADMINISTRATION

all mortgages originated in 1942. Mortgages written by the associa
tions totaled $1,051,000,000 during the year, a decline of 23.8 percent
from the total of $1,379,000,000 for the previous 'year.
Similar declines were experienced -by the mutual savings banks,
which wrote $130,000,000 of mortgages, or 24 percent less than in 1941,
and by the commercial -banks, which, with their trust departments,
wrote $606,000,000, or 24.1 percent less than in 1941. The experience
of "individuals and others" was more favorable, their new mortgage
loans declining only 10.6 percent to a total of $881,000,000. Lending
activity credited to the Home Owners' Loan Corporation during 1942
was $40,000,000, a decrease of 36.5 percent from 1941. This amount
represents the estimated total of purchase-money-mortgages given
by the Home Owners' Loan Corporation to purchasers of- the Corpo
rations' properties, together with advances to enable the Corporation's
borrowers to pay taxes, make essential repairs, etc.- The decline from
1941 to 1942 was caused by a reduced volume of'sales of its real estate,
due to the smaller inventory of Home Owners' Loan Corporation
properties and by a lowervolume of advances to borrowers. The only
lenders who, as a group, originated more loans in 1942 than in 1941
were the life insurance companies which wrote $374,000,000 of loans
in 1942, up'slightly from the $371,000,000 of the preceding year.
.A study can be made of mortgage lending on a fiscal-year basis, by
means of the nortgage-recording data collected for -several years by
the Bank Administration. Although recordings cannot be taken as an
accurate measure of new lending, because they include changes, in
existing mortgage contracts as well as new lending, nevertheless,
recordings give a valuable picture of trends in mortgage financing and
in the activity of the different types of lending institutions.
During the fiscal year 1943, mortgage lenders throughout the
country -recorded 1,237,396 nonfarm mortgages of $20,000 or less in
the -total amount of, $3,639,814,000. This compares with 1,537,314
mortgages in the amount of $4,519,573,000 during the preceding fiscal
year. A breakdown of the figures, by types of lenders and by Federal
Home Loan Bank Districts -and by States, is griven-in exhibit 6.
Home-mnortgage debt.-After 5 years of continuous expansion, the
nonfarm home-mortgage debt registered a decrease in the calendar
year 1942. On December 31, 1942, the aggregate outstanding debt
on one- to four-family dwellings was $19,917,000,000, at reduction of
$178,000,000 from the $20,095,000,000 outstanding 1 year previous.
This decrease compares with an increase of $992,000,000 during 1941.
The decrease in 1942 was caused in part by an acceleratUed rate of
repayment-made possible by highter incomes, and in part by the fact
that new lending was largely for purposes of home purchase and
refinancin~g.' New loans for these purposes do not cause -a great
increase in the total mortgage debt inasmuch as these loans are
frequently accompanied by the cancelation of previous mortgages.
Construction loans, which do represent a net addition to the total
mortgage debt, decreased substantially in volume during the year.
The outstan ding mortgages of the-Home Owners' Loan Corporation
were reduced by $210,000,000, or 12 percent during the calendar year
1942. Accordingly, if the mortgage portfolio of the Corporation is
disregardedsthe com Ied otalof al1oter lnder incease




5

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

$30,000,000. An insignificant increase in outstanding mortgages was
noted for savings and loan associations and commercial banks. -The
major gain was effected by insurance companies, which increased
their mortgage portfolios by 14 percent, or $279,000,OQO.
Savings and loan associations retained their prominent position in
the home-mortgage field, as is indicated by the fact that these insti
tutions on December 31, 1942, held $4,565,000,000, or 22.9 percent of
the total mortgage debt. The loans held by such institutions were
exceeded only by those of the miscellaneous group, which held 31.9
percent of the mortgage debt. The following table summarizes the
debt held by each type of mortgagee at the end of the last 2 calendar
years. A survey of the estimated home-mortgage debt from 1929 to
1942 is presented in exhibit 7.
Estimated balance of outstanding mortgage loans on nonfarm 1dwellings

to 4-family

[Millions of dollars]
December 31
Per----------cent

Type of mortgagee
1941

1942

Operating savings and loan associations-------------------------$4, 552
Insurance companies---------------------.-------------------1,
976
2, 730
Mutual savings banks ....--------------------------------------Commercial banks------------------------------------------2, 470
Home Owners' Loan Corporation------------------------------1,777
6, 590
Individuals and others------------------------------------Total......................................----------------------------------------.......------20,095

$4, 565
2, 255
2, 700
2, 480
1, 567
6, 350

+0.3
+14.1
-1. 1
+0.4
-11.8
-3.6

19,917

-0.9

Private savings.-Additions to total long-term savings of individu
als during 1942 were more than twice as great as the largest annual
increase during the last 22 years. The increase in savings represented
by accounts in savings and loan associations, life-insurance policies,
savings deposits in banks, postal savings, and United States savings
bonds is estimated at $8,921,000,000 for 1942, as compared with $3,
907,000,000 for 1941. Total long-term savings in these selected forms
are estimated to have been $70,461,000,000 on December 31, 1942, or
about three and one-half times the 1920 total.
The following table indicates the gain during 1942 in each of the se
lected savings media. The distribution of long-term savings from 1935
through 1942 and an explanation of the source of these figures are pre
sented in exhibit 8.
Volume of long-term private savings in selected savings media
[Millions of dollars]
December 31--

Increase
Amount

Percent'

1941
Life insurance companies------------.------------------Mutual savings banks --- ----------...-----. ...
-Insured commercial banks ----------------.-..-----

Savings and loan associations -----------------------------Postal savings .
.
.
.
.. ...
.
.
21 percent postal-savings bonds
-----United States savings bonds--...-------------........
--......
Total----------- ----------.--.......--




--

1942

$26,877
10,490

$29,043
10,621

$2, 166
131

8.1
1.2

13,261

13,820

559

4. 2

4,685
1,392
85
4,750

4, 950
1,417
84
10,526

265
25
-1
5,776

5. 7
1.8
-1.2
121.6

61,540

70,461

8,921

14.65

6

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

The investment in outstanding United States savings bonds (not
including series F and G) represented, by far the greatest single
increase in private savings. The $5,776,000,000 increase in invest
ment in these bonds during 1942 was greater than the amount held in
such form on December 31, 1941. Next in importance were the
life-insurance companies, which received $2,166,000,000, an increase
of 8.1 percent over the previous year. Savings bonds and life-insur
ance companies absorbed 89 percent of the net additions to savings
invested in'the media studied.
Savings and loan associations led the banking groups in rate of
growth, the savings held by the associations increasing 5.7 percent
during the year. Deposits in insured commercial banks increased
4.2 percent. Postal savings and deposits in mutual savings banks
increased 1.8 and 1.2 percent, respectively, while there was a small
decrease in funds invested in postal savings bonds.
Private savings continued the same trend during 1943. United
States savings bonds continued to absorb the greatest proportion of
these savings, as is indicated by the fact that outstanding savings
bonds increased in value from $10,526,000,000 on December 31, 1942,
to $14,895,000,000 on June 30, 1943. The increase of $4,369,000,000
during these 6 months compared with the increase of $5,776,000,000
during the whole of 1942. These figures do not include sales of F and
G bonds, some of which are sold to individuals.
The investment in savings bonds during the first 6 months of 1943
did not 1reduce the rate at which funds flowed to private financial
institutions. Savings deposits held by mutual savings banks rose
from $10,620,958 000 on December 31, 1942, to $11,104,707,000 on
June 30, 1943. The increase of $483,749,000 during these 6 months
was more than three times as great as the increase for the entire year
1942. During the first 6 months of 1943, insured savings and loan
associations experienced an increase of $287,524,000, or 9.6 percent,
in private share capital, as compared with $138,733,000, or 5.3 percent,
during the same period of 1942. Postal savings increased by $160,120
000, or 11.3 percent, during the first 6 months of 1943, as compared
with $1,163,000, or less than one-tenth of 1 percent in the first 6 months
of 1942.
Savings by private individuals throughout the Nation have reached
an all-time high. This, of course, has been made possible by the
increase in incomes resulting from war production, while limitations
on production for civilian use have reduced the flow of goods which
can be purchased with the augmented income. Such a situation
insures that an unprecedented total of savings will be available after
the war. These savings may be used to satisfy the desire for new
housing that will undoubtedly exist when millions of servicemen and
war workers resume normal civilian life.




II. SAVINGS AND LOAN ASSOCIATIONS
Funds used in this country to finance building and ownership of
homes are derived largely from savings accumulated through the
thrift of the American people. In part, savings are made available
by direct loans from those who have done the saving. However, the
greater portion of the savings used to finance homes are first collected
by savings and loan associations, mutual savings banks, life insurance
companies, and commercial banks.
For the first three types of institutions the Federal Home Loan
Bank System operates as a central credit reserve system. For savings
and loan associations, the Bank Administration performs additional
functions. Many of the associations are Federal savings and loan
associations, chartered and supervised by the Federal Home Loan
Bank Administration. Federal associations, and some of the State
chartered associations, are insured by the Federal Savings and Loan
Insurance Corporation, another of the component units of the Bank
Administration.
NUMBER AND ASSETS

In recent years the total resources of member savings and loan
associations of the Federal Home Loan Bank System, as well as of
insured State and Federal associations, have been increasing rapidly,
as is evident from the following table.
Assets
[Thousands of dollars]

Date

June 30, 1938 --------------------------June 30, 1939--------------------------------June 30, 1940 --------------------------------June 30, 1941 ------- -----------------June 30, 1942
----------- -----------------June 30, 1943------- --------------------

All member
savings and
loan associations
$3, 704,259
3,935,641
4,232,681
4,626, 920
4,885,049
5.249,414

All State /
All Federal
chartered
insured asso- associations
iations
$769 827
899 654
983,367
1, 131,625
1,255, 307
1,454, 920

$1, 210, 744
1,439,988
1,725, 817
2.028,138
2,205, 921
2,426, 079

Uninsured
associationsmember
associations
$2,113, 806
1,943,049
1,957,681
1,292, 245
1,170,926
1,061,147

Estimated.
NOTE -Figures for State-chartered insured associations m this and the following tables include a few in
sured associations which are not members of the Federal Home Loan Bank System
On June 30, 1943,
there were 4 of these associations with total assets of $5,665,000

During the fiscal year 1943 the total assets of all member associa
tions increased by $364,365,000; the increase was $220,158,000 for Fed
eral savings and loan associations and $199,613,000 for the insured
State-chartered savings and loan associations. An-outstanding trend
in recent\ years has been the rapid decrease ,in the number and re
sources of that group of savings and loan associations which are not
members of the Federal Home Loan Bank System.
Membership of savings and loan associations in the Federal Home
Loan Bank System, after an initial period of rapid increase, reached its




8

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

high point in 1938. Since that time, despite the increase in total assets,
the number of member associations has decreased slowly because of
miergers and consolidations. This is illustrated by the following table:
Number
All member All Statechartered
savings
and loan
insured
associations associations

Date

June
June
June
June
June
June

30,
30,
30,
30,
30,
30,

1938---------------------------.---------3, 909
1939 ...------------------------------------..........
3,897
1940---------..
------------.....---------------3,865
1941----------..----....
----------------------3,798
1942----------------.......... --------------------3,772
1943-------------------------------------3,729

681
790
816
861
910
960

All Fed- Uninsured
nonmember
eral
eaassoassoci
ciations
ations
1,337
1,380
1,421
1,452
1,464
1,468

5,651
4,474
4,007
3,341
3,101
2,757

I Estimated.

On June 30, 1943, the number of member associations was 3,729, as
compared with 3,772 a year previous. The net decrease of 43 resulted
from 53 admissions to membership and 96 terminations. Of the
terminations, 44 were caused by merger, consolidation, or sale of assets
to other member institutions, actions which did not result in the com
plete withdrawal of the assets held by these institutions. On June 30,
1943, 37 applications for membership were pending as against 56 on
June 30, 1942.
In contrast to the slow decrease in the number of member associa
tions, State-chartered insured savings and loan associations continued
during the 1943 fiscal year the steady growth in number which was
characteristic of recent years. The increase of 50 insured State
chartered associations during the reporting period resulted from the
granting of insurance to 53 associations and the termination of insur
ance of 3 insured institutions.
The number of Federal savings and loan associations increased
slightly. Such associations increased by 4 during the 1943 fiscal year,
compared with 12 the previous year and 31 2 years before. The net
increase of 4 was the result of 23 additions and 19 terminations. Of
the 23 additions, 2 were newly organized associations and 21 were
converted State associations. The 19 terminations occurred as the
result of 17 mergers, 1 involuntary liquidation, and 1 instance of
dissolution and sale of assets.
Nonmember institutions are decreasing rapidly in number as well
as in total resources. There has been little net change in the average
size of these nonmember institutions over the last 5 years, as shown in
the following table:
Average size of associations

Date

June 30,
June 30,
June 30,
June30,
June 30,
June 30,

1938 -_1939 - --------------------------1940 1941 -11942
1943--_
--

'Estimated.




All member
All Statesavings and chartered in- All Federal
loan associa- sured associa- associations
tions
tions
$947, 623
1, 009,916
1,095,131
1, 218, 252
1, 295,082
1, 407, 727

$1, 130, 436
1,138, 803
1, 205, 207
1, 314, 315
1, 379, 458
1,515, 542

$905, 568
1,043,470
1,214, 509
1,396, 789
1, 506, 777
1, 652, 642

Uninsured
nonmembr
associations
$374, 059
434, 298
488, 565
386, 784
377, 596
384,892

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

9

Because of the increase in total resources of member institutions
since June 30, 1938, and the slow decrease in numbers, the average
size of member institutions increased by 48.6 percent. The growth
and increasing importance of the System, therefore, appear largely due
to the fact that the individual member institutions are growing rapidly
in size and financial strength.
The Congress, in providing for the establishment of Federal savings
and loan associations, contemplated, first, that these associations
would provide adequate thrift and home-financing facilities for locali
ties which lacked such facilities and, second, anticipated that a group
of home-financing institutions, operating with the highest standards
and practices, would be developed under Federal charter. The aver
age size of the Federal savings and loan associations is growing more
rapidly than that of other member associations. In 1938 the Federal
savings and loan associations, with an average size of $905,568 (see
table) were smaller than either the State-chartered insured associa
tions (average size of $1,130,436), or all member associations of the
System (average size of $947,623). In contrast, on June 30, 1943, the
average size of Federal savings and loan associations was $1,652,642,
or more than the average for either State-chartered insured associa
tions ($1,515,542) or for all member associations ($1,407,727).
The increase in total assets of savings and loan associations resulted
from the continued large flow of private share capital to such associa
tions. During the 1943 fiscal year new share investments and re
purchases of share capital proceeded at the rate indicated in the fol
lowing table. Of the flow of new share investments to savings and
loan associations, a smaller proportion is offset by repurchases by
Federal associations than by either the State-chartered insured or all
member associations.
[Thousands of dollars]

Ratio of re

New share
invest-

ments

All member savings and loan associations . ...------------. $1,221,468
349, 843
All State-chartered insured associations --------- ------663,428
All Federal associations- ..--------------------------178, 552
Uninsured nonmember associations ------------------

Repur-

chases
mets

$721, 918
211, 733
345,861
133,888

Net in-

crease

$499, 550
138,110
317, 567
44,664

purchases

to new in
vestments
Percent
59.1
60. 5
52.1
75.0

1 Estimated.

As a result of this new private share capital, a high rate of repay
ment of outstanding mortgages, and the difficulty of finding suitable
investments, member associations during the 1943 fiscal year retired
a substantial amount of their Federal Home Loan Bank advances, and
Government share investments. By authorizations of Congress in
1933, 1934, and 1935, the United States Treasury invested $49,300,000
and the Home Owners' Loan Corporation invested $223,856,710 in
savings and loan associations in order to increase the funds available
for home financing. During the reporting period the outstanding
balance of these investments was reduced from $186,512,410 to
$119,887,410, a decrease of $66,625,000. Outstanding advances from
the Federal Home Loan Banks decreased from $192,644,936 on June
30, 1942, to $90,191,577 a year later, a decline of $102,453,359.




10

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION
QPERATIQNS IN

A WARTIME

ECONOMY

Lending operations.-The war has had ani important influence on
the lending operations of savings and loan associations. The con
struction limitation _order of the War Production Board, effective on
April 8, 1942, greatly reduced new construction after that date. Most
residential construction since then 4as been confined to war housing
required by workers migrating to war-production centers and defense
areas.
This situation naturally resulted in a rapid decrease in construction
loans. During the fiscal year 1943, the first entire annual period in
which the limitation was effective, construction loans by member
savings and loan associations totaled $112,308,000, as against $311,
039,000 during 1942 and $389,559,000 during 1941. Loans of this
type were 63.9 percent less during the fiscal year 1943 than during the
previous year. Reconditioning loans likewise decreased, undoubtedly
by reason of the same restrictions. During 1943 loans for recon
ditioning purposes amounted to $29,070,000, as compared with
$43,503,000 the year before.
New loans made by member associations, by purpose
July 1, 1941, to
June 30, 1942

Purpose of loan

Cdnstructin....
...------------------.
------------------...
Home purchase
...-------------------------------------.
Refinancing
----------------------------------------Recohditioning
-------------------------------------Other purposes .
.....--------------------------------------Total.---------------------------------

-------

July 1, 1942, to
June 30, 1943

Percent
change

$311, 039, 000
477, 193, 000
152, 561, 000
43, 503, 000
79, 149, 000

$112, 308, 000
545, 580, 000
148, 017, 000
29,070, 000
60, 559, 000

-63
+14
-3.0
-33
-23

9
3

1, 063, 445, 000

895, 534, 000

1-15

8

2
5

The large decrease in construction loans and smpller decreases in
loans for refinancing, reconditioning, and other purposes were offset
in part by the increase in loans made to finance the purchase of homes.
Loans for this purpose aggregated $545,580,000 during 1943, as com
pared with $477,193,000 during 1942 and $388,376,000 during 1941.
The growth in loans for home purchase was the natural accompani
ment of the purchase of homes by war workers and others with rising
incomes. As a result of the increase in loans for home purchase, at
a time when loans for other purposes were decreasing, such loans
acc9unted for 60.9 percent of total loans by member institutions in
the fiscal year 1943, as compared with 44.9 percent in 1942, and
35.8 percent in 1941. The changes in the purposes for which loans
were made during the last few years are shown in exhibit 9.
Mortgage loans are still made in substantial volume. However,
in contrast with conditions existing a few years ago, present lending
is not resulting in any addition to the total outstanding mortgage
debt. During the calendar year 1940, when $3,270,000,000 was
loaned on one- to four-family dwellings by all types of lending insti
tutions, there was-a net increase of $27 in outstanding mortgages
for every $100 of new loans. -In 1941 new loans increased to $3,768,-,
000,000, and there was a net increase of $26 in outstanding loans
for every $100 of new loans. However, in 1942, despite the fact that
total new loans of $3,082,000,000 were not much below the total




REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

11

amount loaned during 1940 there was a decrease of $6 in outstanding
loans for each $100 of new loans made during the year.
Undoubtedly, the two most important reasons for this sharp
reversal were (1) the fact that mortgages ar3 now being repaid at a
rapid rate because of higher incomes and (2) the shift in mortgage
lending from construction loans to loans for home purchase. New
loans made for home purchase, which represented such a large pro
portion of the total during 1942, are frequently offset in large part
by the cancelation of existing mortgages. The same is true of re
financing mortgages.
Reduction in the outstanding total of mortgage loans, together
with the continued flow of savings funds toward financial institutions,
has resulted in a competitive market for mortgage loans. With lend
ing institutions competing for good loans in order to invest their
funds, there is danger that lending standards will be lowered. For
this reason it is more than ever important that lending institutions
at the present time place emphasis on accurate appraisals and careful
analysis of risk in making loans. 1
Service to the public.-The increase in the private share capital of
savings and loan associations and the stagnation in their total of
outstanding mortgage loans, both of which have already been dis
cussed, represent important investment problems for savings and loan
associations. Funds now being received by these associations are,
of course, invested largely in United States bonds in furtherance of
the war effort. Insured savings and loan associations increased their
holdings of such bonds from $70,852,000 on June 30, 1942, to $376,
177,000 on June 30, 1943.
Increasedstrength of savings and loan associations.-Savingsand loan
associations arenow in a strong position. By the end of 1942 the
assets of reporting member savings and loan associations of the Federal
Home Loan Bank System passed the $5,000,000,000 mark for the first
time. Liquid assets increased markedly during 1942. Cash increased
approximately $58,000,000 to a total of more than $336,000,000, while
United States Government obligations increased approximately
$185,000,000 to a total of about $260,000,000. As a result, cash and
Government securities held by member associations on December 31,
1942, were 14.5 percent of total private repurchasable capital, as com
pared with 9.4 percent for the previous year and 8.5 percent for 1940.
The strength of member associations of the System was also increased
by the repayment of borrowed funds and by the disposition of the
real-estate "overhang" discussed previously. In addition, the growth
in average size, of member associations is making it possible for an
increasing number of them to 'obtain full-time experienced manage
ment and to operate in ground-floor quarters of a type that will
promote the prestige of the System and increase public confidence.
These conditions are all improving the ability of the member asso
ciations and of the Federal Home Loan Bank System to meet post-war
problems. With the disappearance of the real-estate overhang, and
the increase in resources, liquidity, and borrowing power, the ability
of the savings and loan associations to serve the public is growing
rapidly.
1 For a more extensive discussion of this subject, see the article, Lending Policies in a Competitive Market
on page 323 of the August 1943 issue of the Federal Home Loan Bank Review.
64952-44-




3

12

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION
FINANCIAL OPERATIONS

Balance sheet.-The continued financial growth of member savings
and loan associations is reflected in the consolidated balance sheet as of,
the close of the calendar years 1941 and 1942, contained in exhibit 10.
From a study of this balance sheet, it will be noted that the total assets
of member savings and loan associations increased from $4,797,758,000
on December 31, 1941, to $5,025,451,000 at the end of 1942. During
the same period the assets of all State-chartered insured associations
increased from 24.7 percent of the total for all member associations to
26.7 percent; the assets of Federal savings and loan associations in
creased from 45.1 percent of the total to 45.7 percent. The greater
proportion of assets held by State-chartered insured savings and loan
associations is due not only to the growth in size of the individual asso
ciations, but also to the insurance of previously uninsured associations.
First-mortgage loans, including interest and advances, held by all
member savings and loan associations grew from $3,788,190,000 on
December 31, 1941, to $3,863,832,000 a year later, a growth of 2
percent. The rate of growth of first-mortgage loans held by the Fed
eral savings and loan associations was approximately the same.
However, first mortgage loans held by all State-chartered insured
associations increased from $921,661,000 to $1,010,969,000, or 9.7
percent during the year.
Real estate owned by all member associations declined from
$189,429,000 to $124,752,000 during the calendar year, a decrease
of 34.2 percent. Real estate owned by State-chartered insured asso
ciations and by Federal savings and loan associations declined by 30.8
and 28.8 percent, respectively.
Growth in liquidity is indicated by the fact that the cash held by
all member savings and loan associations increased from $278,696,000
to $336,281,000, or 20.7 percent. Cash held by Federal savings and
loan associations advanced 19 percent, while the greatest percentage
increase was experienced by cash holdings of all State-chartered
insured associations-33.5 percent. Holdings of United States Gov
ernment obligations by member associations increased severalfold
during the year. For all member associations the growth was from
$75,244,000 to $259,678,000, or 245 percent. For State-chartered
insured associations the increase was 268 percent, while the most rapid
growth was that of Federal savings and loan associations, whose
holdings of United States Government obligations rose 378 percent.
On the capital and liability side of the ledger the private repurchas
able shares of member savings and loan associations increased 10 per
cent, compared with an increase of 13 percent for Federal savings and
loan associations and 19 percent for State-chartered insured associa
tions. Advances from Federal home-loan banks and other borrowed
money decreased from $239,226,000 for all member savings and loan
associations on December 31, 1941, to $142,682,000 a year later, a
drop of 40.4 percent. Advances and borrowings of Federal savings
and loan associations arid of insured associations decreased by com
parable percentages during the year.
General reserves and undivided profits and surplus held by all
member savings and loan associations went from $327,594,000 6n
December 31, 1941, to $368,400,000 a year later. This represented
an increase from 6.8 percent of total assets to 7.3 percent of total assets




REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

13

during the calendar year. The growth was more rapid ,for Federal
savings and loan associations and for State-chartered insured associa
tions. The general reserves and undivided profits of Federal savings
and loan associations increased from 5.1 percent of total assets on
December 31, 1941, to 5.8 percent of total assets on December 31,
1942. For State-chartered insured associations, the similar increase
was from 7.6 to 8.1 percent during the calendar year.
Statement of operations.-A consolidated statement of operations
for all reporting member associations, State-chartered insured asso
ciations, and Federal associations is presented in exhibit 11. For
the 3,722 reporting member savings and loan associations, gross oper
ating income totaled $255,328,422. Of this, 88.55 percent was ob
tained as interest from mortgage loans. For State-chartered insured
associations the percentage was 85.57, while 90.65 percent of the gross
income of Federal savings and loan associations was obtained as
interest from mortgages.
Of net income received, 70.65 percent was paid out as dividends by
the reporting member associations. State-chartered insured associa
tions paid 71.26 percent of net income as dividends' and Federal asso
ciations paid 68.70 percent, the smallest percentage of net income as
dividends. Approximately three-tenths of net income was trans
ferred to reserves and undivided profits.




IIL FEDERAL HOME LOAN BANK ADMINISTRATION
Under the provisions of the First-War Powers Act, 1941, the Presi
dent of the United States, by Executive Order No. 9070, dated
February 24, 1942, placed all Government agencies relating to urban
housing under a newly created National Housing Agency, under the
direction of an Administrator. The Federal Hom'e Loan Bank
Administration is one of the three pfincipal units designated by the
President's Executive Order to comprise the National Housing Agency.
Pursuant to the terms of this Executive Order, the Federal Home Loan
Bank Administration, under the direction of a Commissioner, con
tinues to exercise the functions, powers, and duties which the Federal
Home Loan Bank Act, as amended, conferred upon the former Federal
Home Loan Bank Board.
The major components of the Federal Home Loan Bank Adminis
tration are the Federal Home Loan Bank System, the Federal Savings
and Loan Insurance Corporation, and the Home Owners' Loan Cor
poration. Functions relating to the United States Housing Corpora
tion, which was formed during the last war for the purpose of housing
workers in congested war-industry areas, have been administered in
the Federal Home Loan Bank Administration since 1942.
In the performance of its functions, the Federal Home Loan Bank
Administration receives recommendations from the Federal Savings
and Loan Advisory Council, which is authorized to confer with it on
general business conditions and on special conditions affecting the
Federal Home Loan Banks and their members and the Federal Savings
and Loan Insurance Corporation. Two meetings of this Council.
which was created by an amendment to the Federal Home Loan Bank
Act, were held during the fiscal year. A list of the members of the
Council as of June 30, 1943, is contained in exhibit 12.
ADMINISTRATIVE

EXPENSES OF THE FEDERAL HOME LOAN BANK

ADMINISTRATION

The Federal Home Loan Bank Administration obtains its operating
funds by assessments upon the Federal Home Loan Banks, charges
made for services rendered to the Federal Savings and Loan Insurance
Corporation and the Home Owners' Loan Corporation, as well as
from fees received for the examination of home-financing institutions.
Expenses of the Administration's Examining Division, which con
stitute the major portion of the Administration's authorized operating
budget, are reimbursed by the institutions examined. During the
fiscal year 1943 total receipts of the Federal Home Loan Bank Ad
ministration amounted to $1,357,747, as compared with $1,608,790
for the previous fiscal year. In addition, a cash balance of $353,374
was carried over at the beginning of the fiscal year 1943. Adminis
trative disbursements during the same two periods aggregated
14




REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

15

$1,302,002 (1943) and $1,495,375 (1942), respectively. The cash
balance as of June 30, 1943, amounted to $409,119. Exhibit 13
presents detailed information with respect to administrative receipts
and disbursements for the last 2 fiscal years.
The personnel of the Federal Home Loan Bank Administration
(Federal Home Loan Bank System) totaled 319 at the close of the
reporting period. Of this total 233 employees constituted the staff
of the Examining Division. Exhibit 14 contains a summary of
personnel, by departments, as of June 30, 1942, and June 30, 1943.




IV. FEDERAL HOME LOAN BANK SYSTEM
The Federal Home Loan Bank System entered upon the second
decade of its existence during the fiscal year 1943. The number and
assets of member institutions at the close of the previous and present
fiscal years are reflected by Federal Home Loan Bank Districts and by
States in exhibit 15. The following tabulation reflects the total
number and approximate assets of member institutions of the Federal
Home Loan Bank System as of June 30, 1942, and June 30, 1943:
Number and assets of member institutions of the Federal Home Loan Bank System,
June 30, 1942, and June 30, 1943
[Dollar amounts in millions]
June 30, 1942
Number
Savings and loan associations:
Federal associations - -_.
--State-chartered insured member asso
ciations -----.--.. ..
Uninsured member associations ----.

Assets

.
June 30, 1943

Number

Assets

Net change
Number

Assets

1, 464

$2, 206

1,468

$2, 426

+4

+$220

906
1,402

1, 250
1,429

956
1,305

1, 449
1, 374

+50
-97

+199
-55

All member associations...
-------..
3, 772
Other member institutions:
Savings banks------------------------17
Insurance companies- ...
----------------..
26

4,885

3, 729

5, 249

-43

+364

341.
418

22
23

429
367

+5
-3

+88
-51

5, 644

3, 774

6, 045

-41

+401

All member institutions- ..

....

3,815

•

Lending activity of Regional Banks.-FederalHome Loan bank ad
vances outstanding on June 30, 1943, aggregated $90,191,577, or 53
percent less than the total advances of $192,644,936 outstanding at
the close of the previous year. Advances made by the Federal Home
Loan Banks to member institutions during the fiscal year 1943 aggre
gated $96,346,313, the smallest amount advanced during any year since
1939. On the other hand, repayments reached a new peak of
$198,799,672. From the beginning of operations through June 30,
1943, the Federal Home Loan Banks have made total advances of
$1,025,280,215, of which $935,088,638 was repaid.
Advances outstanding to members which, as already indicated,
totaled $192,644,936 on June 30, 1942, declined thereafter to March
31, 1943, when such advances reached $78,606,524, the lowest amount
outstanding at the end of any month since May 1935. The increase
during April 1943 of $8,762,476 in advances outstanding was almost
offset by a decline of $8,137,641 during the month of May. An
increase of $10,970,217 during June resulted in outstanding advances
as of June 30, 1943, totaling $90,191,577.
The ratio of short-term advances of 1 year or less to total advances
outstanding continued to increase during the fiscal year 1943. On
June 30, 1943, short-term advances represented 51.3 percent of total
advances outstanding, as compared with 41.6 percent at the close of
the previous fiscal year. Lower interest rates charged by several of
16




REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

17

the Federal Home Loan Banks on short-term advances, together with
a reducedo demand for long-term money on the part of member insti
tutions, may be considered as the principal reasons for this trend.
There was but little change in the ratio between secured and unsectired
advances during the fiscal year 1943. Exhibit 16 contains detailed
information reflecting the various changes in advances made by the
Federal Home Loan Banks during the fiscal year 1943, together with a
summary of lending activity in previous years.
As of June 30, 1943, no borrowers from the Federal Home Loan
Banks were more than 30 days delinquent on such indebtedness. As
of that date, one member borrower in liquidation was indebted to a
Federal Home Loan Bank in the amount of $6,427, the entire amount
of which was represented by unmatured principal installments. This
indebtedness was amply secured by home mortgages pledged with the
lending Bank, the estimated value of which was $22,083, and a statu
tory lien on such borrowing member's stock in the Federal Home Loan
Bank having a paid-in value of $3,000.
As in previous years, the indebtedness to the Federal Home Loan
Banks of Federal savings and loan associations constituted the larger
part of the Banks' outstanding advances. On June 30, 1943, 386
Federal associations accounted for advances of $56,600,000, or 62.7
percent of the outstanding advances of the Banks on that date. As
of the same date the outstanding advances to 254 insured State
chartered members totaled $22,500,000, while the outstanding ad
Svances to uninsured State-chartered member institutions totaled
$11,100,000.
During the fiscal year 1943 a majority of the Banks amended their
effective interest rates on advances to members and modified the
limitations placed upon advances. In general, the changes which
were made resulted in decreases of one-half of 1 percent in the interest
rates affected. Rates of interest on advances to members are estab
lished by the board of directors of each Bank, within the range estab
lished by the Federal Home Loan Bank Administration, which at
present permits a maximum of 3 percent. Exhibit 17 reflects the
effective interest rates charged on advances by each of the Federal
Home Loan Banks as of July 1, 1943.
Members' deposits.-Total deposits of members in the Federal
Home Loan Banks increased to the extent of $1,500,000 during the
fiscal year 1943. During this period members' time deposits increased
$5,000,000, which increase, however, was offset by a decrease of
$3,500,000 in 'demand deposits. This shift from demand to time
deposits may be attributed to a lack of demand upon the members for
home loans, thus enabling them to place excess funds on a time
deposit basis with the Federal Home Loan Banks. The fact that mem
bers' deposits did not reflect a greater increase during the year may be
attributed to their large purchases of Government securities and the
retirement of investments made by the United States Treasury and
the Home Owners' Loan Corporation in the shares of member insti
tutions. Interest may be paid by the Federal Home Loan Banks on
time deposits remaining for 30 days or more, at rates established by
the board of directors of each Bank, within ranges fixed by the Federal
Home Loan Bank Administration, which permit the payment of
interest on such deposits up to 2 percent per annum. As of June
30, 1943, 11 of the Federal Home Loan Banks were paying interest on
members' time deposits at the rate of one-half of 1 percent per annum.



18

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

Debenture financing.-At the beginning of the fiscal year 1943
cthe total amount of consolidated Federal Home Loan Bank debentures
outstanding aggregated $91,500,000. As of June 30, 1943, the con
solidated debentures outstanding totaled $35,000,000. Up to the
close of the year covered by this report a ready market has been found
for the sale of consolidated Federal Home Loan Bank debentures and
no difficulty has been encountered in thus financing the cash require
ments of the 12 Federal Home Loan Banks. Consolidated Federal
Home Loan Bank Debentures, which represent the joint and several
obligations of all Federal Home Loan Banks, are not guaranteed by the
United States Government either as to principal or interest. It is
the policy of the Federal Home Loan Bank Administration to issue
such debentures only when the cash available in the 12 Federal
Home Loan Banks is deemed insufficient to meet their anticipated
requirements. From the beginning of operations to the close of the
current fiscal year, the total debentures issued aggregated $363,200,000,
of which $328,200,000 was retired and/or refunded at maturity,
resulting in the balance of $35,000,000 outstanding, as above indicated.
Financial statements.-A statement reflecting the condition of the
12 Federal Home Loan Banks, on an individual and consolidated basis,
will be found in exhibit 18. The primary change reflected in such
statement may be said to be the net repayment of advances by mem
bers aggregating $102,453,359, hereinbefore referred to. The funds
thus made available as the result of these repayments, together with
available cash on hand at the beginning of the fiscal year 1943, en
abled the Federal Home Loan Banks to reduce their outstanding deben
ture liability to the extent of $56,500,000, and to make a net invest
ment of approximately $85,600,000 in Government securities during
the fiscal year 1943. These changes' primarily accounted for the
decline in cash of the Federal Home Loan Banks from $47,300,000 on
June 30, 1942, to $14,800,000 on June 30, 1943. The Federal Home
Loan Banks increased their investments in obligations of, or guaranteed
by, the United States from $69,367,915 on June 30, 1942, to
$154,931,939 on June 30, 1943.
There was an increase of $3,929,200 in stock in the Federal Home
Loan Banks owned by member institutions during the fiscal year
1943, which compares favorably with the increase of $4,249,450
reflected during the preceding fiscal year. The amount of stock in
the Federal Home Loan Banks owned by the United States (Recon
struction Finance Corporation) remains unchanged at $124,741,000.
The Federal Home Loan Bank Act provides that
after the amount of capital of a Federal Home Loan Bank paid in by members
equals the amount paid in by the Secretary of the Treasury * * * such
bank shall apply annually to the payment and retirement of the shares of the
capital stock held by theUnited States, 50 per centum of all sums thereafter
paid in as capital until all such capital stock held by the United States is retired
at par.

The increase in stock owned by member institutions in one of the
Federal Home Loan Banks would indicate that, if the previous trend
of purchases of stock by members continues, that Federal Home Loan
Bank will soon be in position to begin retiring the stock owned by the
Reconstruction Finance Corporation in such bank, pursuant to the
above-quoted provision in the act. The following tabulation reflects
the capital stock structure of the 12 Federal Home Loan Banks as of
June 30, 1943:




REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

19

CAPITAL

Capital stock (par):
Members (fully paid) -----------------Members (partially paid) --Total ----------------------------------Less unpaid subscriptions - ---------------------

$54, 627,
157,
54, 784,
64,
54, 720,

300.00
600. 00
900. 00
050. 00
850. 00

U. S. Government, now owned by Reconstruction Finance
Corporation (fully paid)-------------------124, 741, 000. 00
Total paid in on capital stock179, 461, 850. 00
Surplus:
Reserve as required under sec. 16 of the Act---------------Reserve for contingencies ----------------------Total surplus ------Undivided profits
Total surplus and undivided profits ---------Total capital

---------------------------

7, 292,
2, 170,
9, 462,
6, 680,
16, 143,

016. 39
531. 03
547. 42
848. 96
396. 38

195, 605, 246. 38

A comparison of, reserves and undivided profits of the Federal
Home Loan Banks as of June 30, 1942, and June 30, 1943, is reflected
in the following tabulation:
June 30, 1942
-------------------------Reserve required by see. 16 of Act---------Reserve for contingencies-------------------------------------------------------------..-------------------------Undivided profits---..
Total..---

---------------...------------------------.

June 30, 1943

$6, 505, 036 53
1, 792, 157 47
5, 808, 727 26

$7, 292,016. 39
2,170, 531 03
6, 680, 848.96

14,105, 921. 26

16,143, 396. 38

The Federal Home Loan Banks have consistently maintained higher
reserves and undistributed earnings than required by statute. As
of June 30, 1943, the total earned surplus was 221 percent of the legal
reserve requirements. An analysis of the surplus and undivided
profits of the Federal home-loan banks for the period covered by this
report is presented in exhibit 19.
A statement of profit and loss of the Federal Home Loan Banks for
the fiscal year 1943 will be found in exhibit 20. The consolidated
gross income of the Banks during the year aggregated $5,823,440, as
compared with $6,559,202 for the previous fiscal year. This decline
of $735,762 was largely the result of repayment of advances during
the fiscal year 1943. Operating expenses of the 12 Banks declined
from $2,212,090 during the previous fiscal year to $2,052,912 during
the 1943 fiscal year. The net income of the Federal Home Loan Banks
for the fiscal year 1943 aggregated $3,669,550, a decrease of 14.4
percent from the net income of $4,285,630 reported during the pre
ceding fiscal year. Dividends declared by the Federal Home Loan
Banks during the year covered by this report aggregated $1,897,436.
Of this amount $1,339,582 was paid to the Reconstruction Finance
Corporation and $557,854 to member institutions. The total amount
of dividends paid )during the current year, $1,897,436, represents a
reduction of 14.3 percent as compared with the amount of dividends
($2,213,701) declared by the Banks during the preceding fiscal year,
From the beginning of operations through June 30, 1943, the 12 Fed
eral Home Loan Banks have declared dividends totaling $20,310,127,
of which $15,527,075 was paid on stock subscribed by the United
States Government and $4,783.,052 was applicable to stock owned by
the member institutions.
64952-44-




4

V. FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION
The Federal Savings and Loan Insurance Corporation was created
in 1934 by title IV of the National Housing Act, with the primary
objective of safeguarding small savings in order to restore and main
tain public confidence in thrift and home-financing institutions, to
facilitate and stabilize home-mortgage lending by reviving and main
taining the flow of private money into savings and loan associations,
and to bring about a greater degree of stability in savings and loan
operations by spreading the risk of loss according to accepted insurance
principles. During the existence of the Corporation of almost a
decade, the wisdom of the Congress in providing for insurance of
accounts of investors in savings and loan associations has b3come
increasingly evident. The gratifying growth of the number of insured
institutions and of their resources testifies to the public acceptance
of the principle of insurance of accounts.
Insured institutions.-The number of savings and loan associations
insured by the Federal Savings and Loan Insurance Corporation
increased from 2,374 to 2,428 during the fiscal year 1943. Total
assets of insured institutions increased from $3,461,228,000 to $3,880,
999,000 during the same period. Detailed information showing the
progress in the number and assets of insured associations by F3 deral
Home Loan Bank Districts and by States is presented in exhibit 21.
Operations of insured savings and loan associations have been dis
cussed previously in chapter II.
Operations of the Insurance Corporation.-Thestatement of condi
tion of the Federal Savings and Loan .Insurance Corporation as of
June 30, 1943, is given in exhibit 22. Total assets on that date were
$143,249,154, as compared with $134,371,152 a year previous. Re
serves and surplus on June 30, 1943, amounted to $41,406,963, as
compared with $32,665,905 on June 30, 1942. Included in reserves
and surplus as of June. 30, 1943, is a special reserve for contingencies,
in the amount of $24,000,000, which is equivalent to the amount of
cumulative dividends since June 30, 1935, on the capital stock of
the Corporation. The Corporation, since its inception, has followed
the practice of building its surplus and reserves as rapidly as possible,
recognizing that any insuring operation Tequires an adequate cushion
against future losses.
The insured liability of the Insurance Corporation, representing
the total of all insured accounts up to $5,000 each, plus all creditor
obligations of insured associations, totaled $3,237,364,000 on June 30,
1943, as compared with $2,772,012,000 at the close of the 1942 fiscal
year. In terms of the relationship of liability to resources of the
Corporation, there was on June 30, 1943, for each dollar of capital,
reserves, and surplus of the Corporation, a potential liability of
$22.89.
Income of the Federal Savings and Loan Insurance Corporation is
derived from annual premiums paid by insured institutions, from
admission fees paid by associations newly entering the System, and
20



REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

21

from interest on investments. All income over and above expenses
is allocated to reserves, and losses of the Corporation in connection
with insurance settl3ment cases are charged to these reserve accounts.
Premium income earned during the fiscal year 1943 totaled
$4,000,101, as compared with $3,534,952 for the preceding reporting
period. The annual premium paid by an insured institution equals
one-eighth of 1 percent of all accounts of its insured members plus its
creditor obligations. Admission fees, charged on the basis of 4 cents
for each $100 of the total amount of the institution's accounts of an
insurable type plus all obligations to its creditors, totaled $37,151
during the 1943 fiscal year as compared with $27,502 in the preceding
period.
The Insurance Corporation's investment income from July 1, 1942,
to June 30, 1943, amounted to $3,556,881. Profits from the sale of
securities totaled $2,061,498. This figure is larger than normal
because of the fact that, during the fiscal year 1943, the Insurance
Corporation deemed it advisable to dispose of certain securities having
an early call date and invest the proceeds in United States Treasury
bonds running for a longer term. Including miscellaneous items, the
aggregate income of the Corporation totaled $9,655,650 during the
reporting period, an increase of $2,480,650 when compared with the
preceding year.
The Corporation's administrative expenses amounted to $293,448
during the period under review. Nonadministrative expenses totaled
-$38,641. After deduction of these administrative and nonadminis
trative expenses from gross income, the net income of the Corporation
during the 1943 fiscal year amounted to $9,323,561, as against
$6,817,203 the year previous. A detailed statement of income and
expense for the fiscal year 1943 will be found in exhibit 23.
Total personnel actively employed by the Corporation on June 30,
1943, numbered 67. The Corporation is able to operate efficiently
with this small staff because, under a cooperative arrangement, it is
able to utilize the various service divisions of the Federal Home Loan
Bank Administration on a reimbursable basis and does not have to
maintain such departments of its own. At the present time the
Corporation is able to maintain its administrative expenses at a figure
lower than the interest income from its invested reserves.
Insurance settlements.-Congress established the Federal Savings
and Loan Insurance Corporation to bring about a greater degree of
stability in savings and loan operations by spreading the loss risk
according to accepted insurance principles. It was to be expected
that- a certain number of problem cases would develop, for in any
insuring operation losses are as much a part of normal operations as
premium ircome.
During 9 years of operation 36 insured associations have experi
enced difficulties requiring corrective action by the Insurance Cor
poration. In 2 of these cases the Corporation determined after
careful study that no financial assistance was necessary. These
associations have continued normal operations. In 25 of the remain
ing 34 cases the Corporation made net cash disbursements aggregating
$4,819,028.15 to prevent default. Recoveries received through June
30, 1943, in the amount of $102,373.52, have been deducted from gross
disbiffsements to arrive at the foregoing figure for net cash disburse
ments. Additional contingent commitments to 4 of these associations




22

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

were still outstanding on June 30, 1943, in the amount of $208,489.11.
Of the 25 associations which had received cofitributions from the
Corporation as of June 30, 1943, 17 have continued operations as
separate units; 5 have merged with other insured institutions; and
3 have subsequently liquidated voluntarily, paying all investors in
full.
Seven institutions have been declared in default and placed in
liquidation. Also, at the close of the fiscal year 1943 the Insurance
Corporation was studying one association to determine whether or not
some form of corrective action should be taken and had made a
commitment of $158,455.65 to another association to prevent a declara
tion of default.
It is estimated that the final losses which will be sustained from the
contributions and commitments made by the Insurance Corporation
on or before June 30, 1943, and from insured associations placed in
liquidation before thtat date, will total $5,940,771.85.
Analysis of the difficulties encountered by the 34 associations with
which the Corporation has dealt indicates that adverse econjomic
conditions, coupled with weak management, are by far the most
important causes of institutional difficulties. These 2 factors were
responsible for losses in 22 of the 34 cases. Outright dishonesty on
the part of .association employees or breach of trust, on the part of
management accounted for the difficulties experienced by the re
maining 12 institutions.
Upon receipt by the Corporation of information that an insured
institution is threatened with default, the Corporation makes a
preliminary analysis of the condition of the association and of the
various factors-which caused the problems of the association.
If, thereafter, the case is certified to the Corporation as an insurance
case, the Corporation, after further consideration of. information
concerning the association, determines either that it will propose to
prevent a declaration of default of the institution, or that it will not
interpose to prevent liquidation. Under the statute the Insurance
Corporation has authority- to prevent the default of an insured insti
tution or to restore an insured institution in default to normal opera
tions by means of a loan, contribution, or purchase of assets. The
Corporation had not at the close of the fiscal year 1943 made a loan to
prevent default of an insured institution nor had it purchased assets
from an insured institution. It is possible that one or both of these
methods of preventing default or removing impairment of insured
institutions may be employed in connection with future loss cases.
Whenever an insured association is declared in default and is placed
in liquidation, the Corporation makes prompt determination of the
insured members of the association and makes available to each in
sured member, upon surrender and transfer to the Corporation of his
insured account, at his option, either (1) a new insured account in an
insured institution not in default, in an amount equal to the insured
account so transferred, or (2) the amount of his account which is
insured, as follows: 10 percent in cash, 45 percent in negotiable non
interest-bearing debentures of the Corporation due within 1 year from
the date of the default, and 45 percent in such debentures due within
3 years from the date of default.
Practically all the insured investors in each of the seven insured
associations which have been placed in liquidation have elected to




REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

23

accept the first method of settlement, i. e., a new account in a nor
mally operating insured association. To date, less than one-fifth of
1 percent of the claims settled have been paid by the cash and deben
ture method. As of June 30, 1943, 99.69 percent of'the estimated
dollar amount of the insured claims of all insured associations placed
in liquidation had been settled. This involved issuance by other
insured institutions of new share accounts amounting to approxi
mately $6,672,000, and payment by cash and debentures in the amount
of $13,200. During the fiscal year 1943 the Corporation extended
financial aid in the form of contributions, or payments made on con
tingent 'commitments previously authorized, in the total amount of
$638,466.82.
Operations of insured institutions in default.-No insured association
was placed in receivership during tle fiscal year 1943. Of seven
insured associations previously placed in receivership one was ter
minated during the reporting period, leaving six in receivership on
June 30, 1943. Four of these six associations are Federal savings and
loan associations for which the Insurance Corporation is acting as
receiver. The other two are State-chartered associations in liquida
tion under a State Building and Loan Department. The Corporation,
through its subrogation of insured claims, has a major claim to the
proceeds from the assets of all irisured institutions in liquidation
and takes an active interest in the liquidation of State-chartered
institutions.
Comparative statements of condition and operation for the associa
tions in receivership on June 30, 1943, are shown in exhibit 24. The
liquidations are progressing favorably. As shown by the comparative
statements, partial liquidating dividends were declared in five receiver
ships to June 30, 1943. A final liquidating dividend of 47.6 percent
was declared in the liquidation of one very small receivership con
summated prior to such date, which represents the total recovery by
the Corporation in this case. It is estimated that the Corporation, in
the six cases still in liquidation will recover an amount aggregating
approximately 89 percent of the funds disbursed in the payment of
insurance to insured members thereof.




VI. HOME OWNERS' LOAN CORPORATION

GENERAL OPERATIONS

During the 3 years from June 13, 1933, through June 12, 1936, the
Home Owners' Loan Corporation refinanced the mortgage loans of
1,017,821 individuals, all of whom were in financial .distress and in
danger of losing their homes. Mortgage loans made by the Corpo
ration originally totaled $3,093,451,321. In servicing these loans it
was found necessary to advance supplementary amounts, primarily
to make funds available to pay delinquent taxes. The Corporation
also found it necessary to foreclose on some of the properties, thus
increasing the Corporation's investment through the capitalization of
delinquent interest and taxes, foreclosure and acquisition costs, and
reconditioning expenses. These advances and capitalizations through
June 30, 1943, aggregated $390,596,585. Accordingly, the gross cu
mulative investment resulting from the Corporation's lending program
to aid American home owners reached a total of $3,484,047,906 at the
end of the 1943 fiscal year.
Since June 12, 1936, the major responsibility of the Home Owners'
Loan Corporation has been to liquidate its affairs as orderly and as
economically as possible. The success of the Corporation's efforts to
carry out this liquidation as promptly as possible may be noted from
the following facts:
Before the end of the fiscal year 1943 the Home Owners' Loan Cor
poration had completed more than half its liquidation. The total
balance of mortgage loans, vendee accounts, and property accounts
was reduced from $1,938,195,197 at the beginning of the 1943 fiscal
year to $1,632,451,939 at the end of the year, a decline of $305,743,258,
or 15.8 percent. The decrease from the cumulative gross investment
of $3,484,047,906 to $1,632,451,939 on June 30, 1943, means that the
liquidation of the Corporation was 53.1 percent completed at the end
of the reporting period. The reduction in operating assets, is sum
marized in the following table:
Original amount loaned------------------------------------ $3, 093, 451, 321
Subsequent advances to borrowers, net additions included in
390, 596, 585
capitalized value ,of properties, etc_ ----------------------Original loans plus advances, capitalized additions, etc .

3, 484, 047, 906

Outstanding on June 30, 1943:
Mortgage loans and advances----------$1, 081, 052, 506
Vendee accounts, advances, and unposted
360, 100, 605
advances -------------------------Property acquired and in process of acqui
191, 298, 828
sition-----------------------------Total outstanding------------------------------

1, 632, 451, 939

Net reduction in operating assets------------------

1, 851, 595, 967

24




REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

25

Investments by the Home Owners' Loan Corporation in the share
capital of savings and loan associations were reduced rapidly during
the 1943 fiscal year. In 1935 Congress' authorized these investments
to stimulate the home-mortgage market. The cumulative invest
ment by the Corporation in savings and loan associations through
June 30, 1943, was $223,856,710. Of this investment, $115,453,300
has been retired, reducing the net investment on June 30, 1943, to
$108,403,410. 'More than half of the retirement was effected during
the 1943 fiscal year alone.
Liquidation of debtor and property accounts and retirement of
investments in savings and loan associations have permitted the
Corporation to reduce its bonded indebtedness. Outstanding bonds
of the Corporation decreased from a peak of $3,047,046,575 on May
31, 1936, to $1,735,509,700 on June 30, 1943. The Home Owners'
Loan Act of 1933, as amended, requires that all payments upon prin
cipal of loans made by the Corporation shall, under regulations made
by the Corporation, be applied to the retirement of the bonds of the
Corporation. Certain other receipts, such as amounts received by
the Corporation as a result of the repurchase of shares purchased
by it in savings and loan associations, are also applied to bond retire
ment. The total applicable to the retirement of bonds through
June 30, 1943, was $1,762,151,899. Funds in this amount have been
deposited with the Treasurer of the United States and have been
used to retire bonds or are available for future retirements, as shown
,in the following table:
Disposition of funds allocated (through June 80, 1943) to bond-retirementfund
Applied to retirement of bonds----------------------------Deposited for matitred bonds on which interest has ceased-..
Available for future retirement of unmatured bonds ---------Gross amount deposited in bond-retirement fund-..---.
Balance due retirement fund for June 1943 deposited in July
1943 -----------------------------------------..

$1, 753, 830, 905
6, 027, 900
100, 867
1, 759, 959, 672
2, 192, 227

Total applicable to bond retirement.------------------1, 762, 151, 899

The Corporation's major bond repayments during the 1943 fiscal
year were made on the Q series of outstanding bonds. This was a
1-percent series issued in the total amount of $560,000,000. The
series Q bonds were redeemable at the option of the Home Owners'
Loan Corporation and bore a maturity date of July 1, 1943. During
the fiscal year 1943, $364,000,000 of these bonds were redeemed by
the Corporation. The remaining $196,000,000 still outstanding on
July 1, 1943, were extended for 1 year to July 1, 1944. Because of
the redemption of 1-percent bonds during the reporting period, the
average interest rate on the outstanding bonds of the Corporation
(exclusive of bonds on which interest had ceased) increased from 1.928
percent on June 30, 1942, to 2.118 percent on June 30, 1943. This
increase in the interest rate during the fiscal year 1943 was more
than offset during the next fiscal period by the refunding at a lower
interest rate of a large bond issue which was callable in 1944.
The Corporation has reduced personnel and administrative ex
penses. During the 1943 fiscal year, personnel was reduced from
5,228 to 3,446. Administrative expenses during the 1943 fiscal year
were $10,711,749, as compared with $15,498,908 during the previous




26

REPORT OF FEDERAL HOME LOAN-BANK ADMINISTRATION

year, a decline of 30.9 percent. Twenty field stations and the last
remaining State office were closed during the reporting period. The
Corporation on June 30, 1943, had 8 regional offices and 19 field
stations. These stations are established strategically at points of
loan, concentration where their presence permits economies in travel
time and expense which more than offset the small cost of operating the
field stations. Collection facilities are maintained in only 7 of the
field stations.
STATUS

OF

ACCOUNTS

During its 3 years of lending operations, the Home Owners' Loan
Corporation made 1,017,821 mortgage loans. Because of divisions
of property, partial sales of properties owned, and other reasons, the
number of accounts was increased to a total of 1,019,725 as of June
30, 1943. On that date, these accounts were divided as follows:
Accounts terminated ------------------------------------------Original mortgage loans ----------------------------------Vendee accounts
--------------Properties owned ---------------Properties in process of acquisition
Total-------------------------------------------------

256, 091
597, 455
139, 238
24,935
1, 106
1,019,725

From a study of this table, it is obvious that these accounts fall into
three major groups-those which have been terminated, those which
represent outstanding debtor accounts, and those which represent
property owned. These will be discussed separately in the three
following sections:
Accounts terminated.-Of the 1,019'725 accounts, 256,091, or ap
proximately one-fourth, have been terminated. Payment in full of
mortgage loans caused 227,261 terminations, payment in full of
vendee accounts totaled 17,975, cash sales of acquired properties
accounted for 11,449 terminations, charge-offs accounted for 224, and
82 accounts were terminated through consolidations.
Mortgage and vendee accounts.-On June 30, 1943, the Corporation
had 736,693 mortgage and vendee accounts. Of these, 228,266 had
been extended in accordance with the Mead-Barry Act of 1939, which
provided for extensions of amortization periods, in justifiable cases,
up to 25 years from the date of execution of the mortgage held by
the Corporation.
The Home Owners' Loan Corporation, from the beginning of its
operations, adopted the practice of servicing its loans individually,
thus permitting the Corporation to discover causes of trouble and to
take action to avoid foreclosure. This service is now especially im
portant because, in view of the loss of thousands of the Corporation's
best mortgages, by payment in full or refinancing, it is important to
maintain or improve the quality of the remaining mortgages if
eventual losses are to be kept low.
As part of this servicing program the Corporation holds funds to
pay taxes and insurance, collected from borrowers on a systematic
monthly installment basis. This procedure assists borrowers to avoid
tax difficulties and has also resulted in economies in the Corporation's
administrative expenses by eliminating the necessity for searching
tax records to determine whether delinquencies exist. During the
1943 fiscal year the proportion of such accounts was increased from
53.3 to 56.2 percent of outstanding loan accounts.




REPORT OF FEDERAL HOME LOAN BANI ADMINISTRATION
K

27

Properties acquired, including those subject to redemption.-From
the time it commenced operations until June 30, 1943, the Home
Owners' Loan Corporation acquired, as a result of foreclosures, aban
donments, etc., 195,643 properties. In addition, on June 30, 1943,
1,107 properties were acquired but were still subject to redemption.
Of the total acquisitions, 193,025 were of properties covered by original
mortgage loans. Of the 1,017,821 original mortgagors, all of. whonm
faced loss of their properties under the conditions prevailing from
1933 to 1936, 824,795, or 81 percent, were saved from foreclosure
through the operations of the Home Owners' Loan Corporation.
Net property acquisitions during the fiscal year 1943 were 2,118,
compared with 5,408 during the fiscal year 1942. The rapid decline
during recent years in the property acquisitions of the Home Owners'
Loan Corporation is evidence of the stronger financial position of the
majority of the Corporation's borrowers.
Property accounts.-Efforts of the Home Owners' Loan Corporation
to dispose of foreclosed properties met with further success during the
fiscal year 1943 despite the fact that most of the remaining properties
were located in sections receiving relatively little benefit from war
conditions. On June 30, 1943, the Corporation owned or was
acquiring title to 26,041 properties. This compared with 37,998 on
June 30, 1942, and 49,419 on June 30, 1941. The Corporation was
therefore reducing its properties by approximately 1,000 a month.
From the commencement of operations until June 30, 1943, the
Corporation acquired and had available for sale a total of 195,643
properties, of which 87.2 percent had been sold. This does not
include 1,107 properties acquired, but still subject to redemption. If
these properties are included, the Corporation had sold 86.7 percent
of all properties acquired. On June 30, 1943, the combined capital
value of properties which the Corporation owned or of which the
Corporation was in process of acquiring title was $191,298,828, as
compared with $262,307,276 on June 30, 1942, and $318,734,001 on,
June 30, 1941.
Sale of Corporation-owned properties through June 30, 1943, had
resulted in a total cumulative loss, including brokers' commissions
and selling costs, of $254,041,277, Other losses, which included
principal and interest losses on mortgage loans and vendee accounts,
properties charged off, fire and other hazards, and fidelity and casualty
losses, amounted to $1,039,356. This increased total losses from all
sources, cumulative through June 30, 1943, to $255,080,636.
During the same period, cumulative net income before provision
for losses totaled $189,838,206. After deducting this, the Corpora
tion's losses in excess of its earnings as of June 30, 1943, were
$65,242,430. The loss figure given above on properties sold includes
brokers' commissions, selling costs, and the difference between the
actual sales prices and the capitalized value shown on the Corpora
tion's books. Capitalized value includes the unpaid principal value
of the foreclosed loan, delinquent interest and taxes, foreclosure
acquisitions, and reconditioning expenses. In other words, a large
part of the book losses reflects the cost of leniency to borrowers who
eventually had to be foreclosed.
The Home Owners' Loan Corporation endeavors to sell its acquired
properties as promptly as possible. Pending sale, most of these
64952-44---5




28

REPORT OF FEDERAL -HOME LOAN BANK ADMINISTRATION

properties are rented. On June 30, 1943, properties owned by the
Corporation contained 36,846 rental units. Of these, 3,408 units
were not available for rental because these were in process of repair,
held vacant for sale, or adversely occupied. The remaining 33,438
units were available for rental, and of these 31,110, or 93 percent, were
rented.
During the 1943 fiscal year the Corporation's gross operating income
from the rental of properties was $16,768,486. Gross expenses for
rented and unrented properties, not including interest and adminis
tive expenses, was $11,550,908. During the year, therefore, the
Corporation's net operating income from property was $5,217,578.
On a cumulative basis from the beginning of operations until June
30, 1943, net operating income from properties owned by the Cor
poration was $24,574,178.
Reconditioning.-Reconditioning activities of the Corporation are
undertaken to restore its properties and properties on which it has
mortgages to a condition of normal habitability. Because of the
decrease in property acquisitions and in its real-estate* accounts, the
Corporation has been able to reduce its reconditioning operations.
This is shown by the following table, which indicates the number and
total cost of reconditioning operations completed during each of the
last 3 fiscal years.
Fiscal year
1941.
1942 .
1943 .

...

Numberof
cases

-----.....---....
.........
......
...
.....
..------------------------------------------------------------.......-------------------------------------------------------------

35,982
21,687
10,836

Total cost
$11,653,483
9,174,051
4,369,428

Appraisals.-Pronounced
changes in property valuations uinder war
conditions require the Corporation to continue making appraisals of its
properties and to review appraisals previously made. However, the
decrease in the real-estate account and in acquisitions has permitted a
reduction in the number of appraisals. Appraisals and reviews
completed during the 1943 fiscal year total 28,513, compared with
37,125 in 1942 and 60,264 in 1941. Appraisals and reviews completed
between the beginning of liquidation on June 12, 1936, and June 3.0,
1943, totaled 504,110.
FINANCIAL

STATEMENTS

The balance sheet of the Home Owners' Loan Corporation for June
30, 1943, is given in exhibit 25 of this report. Progress of liquidation
is reflected by the fact that total assets have decreased 15.6 percent
during the 1943 fiscal year. The largest declines occurred in the
mortgage loan, property, and investment accounts. On the liability
side of the balance sheet there was a decline in bonded indebtedness.
Statements of income and expense for the fiscal year 1943 are shown
in exhibit 26, and for the period from the beginning of operations
through June 30, 1943, are shown in exhibit 27. . For the fiscal year
1943 operating and other income total $92,861,703. Total expenses,
including interest on bonded indebtedness, amounted to $60,762,889,
leaving a net income before provision for losses of $32,098,813. After
allowance for the reserves necessary to meet estimated future losses,




REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

29

the Corporation's deficit for the fiscal year 1943 amounted to
$8,127,841. In comparison, operating and other income for the fiscal
year 1942 amounted to-$106,359,213. Total expenses, including
interest on bonded indebtedness, for the fiscal year 1942 amounted
to $83,875,427, leaving a net income for 1942, before provision for
losses, of $22,483,786. The Corporation's deficit for the fiscal year
1942 after allowance for the reserves necessary to meet estimated
future losses amounted to $17,850,866, as compared with the 1943
deficit of $8,127,841.
WAR-HOUSING

ACTIVITIES

Because of its extensive experience in reconditioning properties, the
Home Owners' Loan Corporation was directed by the National Hous
ing Agency to operate the publicly financed part of the conversion
program of the Homes Use Service. The Corporation acted simply to
supervise the program and all of the Corporation's expenses were
reimbursed to it. After the close of the 1944 fiscal year the operation
of the program was transferred to the Federal Public Housing
Authority.
This conversion program was announced in October 1942 and con
version activities were started shortly thereafter. The results
achieved under this program are summarized in the following para
graphs:
Programming.-Through
June 30, 1943, 54,873 units had been pro
grammed for publicly financed conversion by the National Housing
Agency. .These units were scattered over 201 areas in 42 States.
Applications for conversion.-A total of 30,485 applications for
conversion were received by the Home Owners' Loan Corporation
during the fiscal year 1943.. From these, 3,726 leases have been
executed for properties that will make available 16,600 units. Appli
cations pending disposition in the various stages total 6,779, and the
remaining 19,980 cases have been rejected or withdrawn. Pos
session has been secured in 2,996 of the properties leased, and 730 are
awaiting possession.
Production.-Therewere 2,117 conversion contracts awarded during
the fiscal year 1943, covering the construction of 8,949 housing units.
Of these, 7,828 have been completed.
Cost.-The average cost per unit, estimated at the time of appli
cation, is approximately $1,520. A recent comparison with actual
costs indicates that this is a fairly accurate figure. Some increase in
cost is expected in the future because of the addition of repairs and
equipment not contemplated in the original estimates.




VII. UNITED STATES HOUSING CORPORATION
Under Executive Order No. 9070 of February 24, 1942, functions
relating to the United States Housing Corporation are now being
administered in the Federal Home Loan Bank Administration. The
United States Housing Corporation, which is in liquidation, was
created in 1918 during World War I for the purpose of providing
housing for workers in congested war-production centers. Congress
was requested to authorize the Federal Home Loan Bank Adminis
tration to use $173,000 of the special deposit account held with the
Treasurer of the United States in the name of the Corporation to
wind up the affairs of the Corporation. This request was granted
on July 2, 1942.
With few exceptions, all of the Corporation's properties are involved
in litigation which has delayed the completion of its liquidation.
In the meantime, appropriate steps have been taken to protect the
Corporation's investment in these properties.
The Corporation's income and expense statement for the period
March 1, 1942, to June 30, 1943, is as follows:
$187, 771
Income from rents, stipulation payments, and miscellaneous items ---Operating expenses --------------------------------------25, 756
---4, 792
------------------------------Losses from liquidation __
Net income for period-

---------------------------------

157, 223

The Corporation had for disposal on February 28, 1942, a total of
518 parcels of real estate, including 60 vacant lots. Of these parcels,
18, including 2 vacant lots, were disposed of during the period March
1, 1942, to June 30, 1943, leaving a total of 500 properties on hand
on June 30, 1943, for liquidation.
30




LIST OF EXHIBITS

THE YEAR IN RETROSPECT
Page

1. Estimated number of new nonfarm dwelling units, by source
of funds and type of structure, July 1940 to June 1943-_
2. Indices of total building cost, and of cost of materials and
labor used in construction of standard six-room frame
house, fiscal years 1942 and 1943 ------------ -_--3. Nonfarm real-estate foreclosures, by Federal Home Loan
Bank Districts and by States, fiscal years 1942 and 1943_
4. Selected figures on residential real estate owned by financial
institutions, December 31, 1941, and December 31, 1942
5. Estimated volume of mortgage loans originated on non
farm one- to four-family dwellings, by type of lender,
1930-42 ---------------------------------------6. Estimated recordings of nonfarm mortgages of $20,000 or
less, by type of mortgagee, fiscal year 1943-----------7. Estimated balance of outstanding mortgage loans on non
farm one- to four-family dwellings, 1930-42 ----------8. Changes in selected types of individual long-term savings,
December 31, 1935, to December 31, 1942---------SAVINGS

33
33
34
35
35
36
38
38

AND LOAN ASSOCIATIONS

9. New loans made by member associations, by purpose,
fiscal years 1941, 1942, and 1943--------------------10. Combined statement of condition for all reporting savings
and loan members of the Federal Home Loan Bank
System, by type of association, as of December 31, 1941,
and December 31, 1942----------------------------11. Consolidated, statement of operations for 3,722 reporting
member savings and loan associations of the Federal \
Home Loan Bank System, by type, for the year ended
December 1942- ---------------------------------

39

39

41

FEDERAL HOME LOAN BANK ADMINISTRATION

12. Members of the Federal Savings and Loan Advisory Council
as of June 30, 1943
13. Statement of receipts and disbursements of the Adminis
tration during the fiscal years 1942 and 1943 ---------14. Comparative statement reflecting, by offices, the number of
Administration employees as of the close of the fiscal
years 1942 and 1943--------------- ----------------




31

44
44
45

32

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION
FEDERAL HOME LOAN BANK

SYSTEM
Page

15. Number and estimated assets of member institutions, June
-30, 1942, and June 30, 1943 ------------------------16. Advances and repayments for the periods indicated, and
the balance of advances outstanding at the close of such
periods ----------------------------------------17. Interest rates charged member institutions on advances, as
of July 1, 1943-------------------------- --------18. Federal Home Loan Banks-Statement of, condition as of
June 30, 1943 ------------------------------------19. Federal Home Loan Banks-Analysis of surplus and un
divided profits for the fiscal year ended June 30, 1943--20. Federal Home Loan Banks-Statement of profit, and loss for
the fiscal year ended June 30, 1943---------------54
FEDERAL SAVINGS AND LOAN

INSURANCE

45
46
47
48
52

CORPORATION

21. Number and assets of all insured associations, by Federal
Home Loan Bank Districts and by States, June 30,1943 _
22. Statement of condition as of June 30, 1943 -------------23. Income and expense statement for the period July 1, 1942,

58
60

through June 30, 1943----------------------------

61

24. Statements of condition and operation for insured institu
tions in receivership, June 30, 1943------------------

62

HOME OWNERS'

LOAN CORPORATION

25. Balance sheet as of June 30, 1943---------------------26. Statement of income and expense for the fiscal year 1943 27. Statement of incomeand expense from the beginning of
operations, June 13, 1933, to June 30, 1943----------




65
66
67

EXHIBITS
EXHIBIT 1.-Estimated number of new nonfarm dwelling units, by source of funds
and type of structure, July 1940 to June 1943
Private
Period

Total non-

Fiscal year 1941, total- --

2-family 1

28, 424

60, 317

' 106, 672

7, 451
6, 166
6,195
8, 612

12, 607
14, 144
15, 966
17, 600

17, 738
34, 379
22, 297
32, 258

3 43, 714

3 154,139

502, 487

171, 600
58, 100
145,100
223,100

133,
103,
100,
164,

3652,100

3 430,409

3 23, 838

400
600
500
600

161, 586
106, 327
3 94, 804
3 67, 692

8, 013
5, 573
3 5, 288
4, 964

--------

3391, 700

3 155, 525

Third quarter, 1942-- ----------------...

94, 600

53,132

396, 900
Fourth quarter, 1942---------..........------First quarter, 1943------------------3 118, 200
82, 000
Second quarter, 1943- .-------..... ---------....
...

336, 695
3 26, 969
3 38, 729

Fiscal year 1942, total----------

--------

Third quarter, 1941----------------- 211,
135,
Fourth quarter, 1941---------..
----------------3 138,
First quarter, 1942--------....
166,
Second quarter, 1942- .---- ----------Fiscal year 1943, total----------......

famly

804
411
642
630

697, 900

-----

Third quarter, 1940------ -- ---------------Fourth quarter, 1940-..--------First quarter, 1941------------------Second quarter, 1941-----------------

Public

I
1-family

/

13,
10,
10,
3 8,

474
842
933
465

28, 327
12, 858
3 27, 475
85, 479

3i14,905

3 24, 385

8196, 885

3, 235

37, 521

33,976
2, 689
5,005

34,488
4, 527
7, 849

330, 712

3 51, 741
3 84, 015
3 30,417

1 Includes 1- and 2-family dwellings with stores.
multifamily dwellings with stores.

*2Includes

3 Revised.
Source: Division of Construction and Public Employment, Employment and Occupational Outlook
Branch, Bureau of Labor Statistics, U. S. Department of Labor.

EXHIBIT 2.-Indices of total building cost, and of cost of materials and labor used
sn construction of standard 6-room frame house
[Average month 1935-39= 100]
Period

Materials

Labor

Total

Fiscal year 1942.
1941-July-----------.........
110.7
August--------112 6
September-.....
114. 4
October-----..
---.. 116 0
November-......
116 9
December- ....
117. 7
1942-January-........
118 6
February----......
119.3
March-----.......---120 0
April
..---------..
120 5
May-----...........
121.0
June...........-----121.3

119 3
120 0
120 7
123 3
123. 9
124. 2
124. 5
125.0
126 0
125. 9
126.4
127.8

113.6
115 1
116 5
118 5
119 2
119 9
120-6
121 2
122 0
122 3
122 8
123 5

Period

Fiscal year 1943:
1942-July-------.........----..
August-------.....
September --.....
October .
-November......
December ....-----1943-January ...-----February---March--------April--------May--------...
-June ....-----------.....

Mate- Labor
rials

121 2
121 2
121 5
121.6
121. 5
121.4
121 5
121.9
122.0
121.,8
122 2
123.0

128 5
129 4
130. 2
130 2
130 2
130. 7
130 9
132 5
133.0
133. 4
134 3
134.3

Source: Division of Operating Statistics, FederalHome Loan Bank Administration.




33

Total

123.7
124.0
124. 4
124. 5
124 4
124. 5
124.7
125.5
125.7
125 7
126 2
126.8

34

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

EXHIBIT 3..-Nonfarm real-estateforeclosures, by Federal Home Loan Bank Distuicts

and by States

Bank District and State

Number, year
ending June 30- Percent
-_ change
1942

United States ...-

1943

49, 890

33,402

5, 748

3, 511

-38

9

Connecticut--------

921
557
3, 698
196
287
89

556
463
2, 098
171
183
40

-39
-16.
-43
-12
-36
-55.1

6
9
3
8
2

11, 151

8, 340

-25.2

2, 343
8,808

1, 592
6, 748

-32 1
-23.4

No. 2-New York----.
New Jersey--------New York .-------

No. 3-Pittsburgh...Delaware----------Pennsylvania- -West Virginia

-----

-33.0

No. 7-Chicago-..--- .

8, 176

5, 724

-30.0

190
7, 449
537

86
5, 142
496

-54 7
-31.0
-7.6

5, 686

4, 017

Illinois ....----Wisconsin --------No. 8-Des Moines---

Iowa

----..

Minnesota----Missouri -- _-North Dakota-South Dakota ---No. 9-Little RockArkansas------..
.-Louisiana- _-Mississippi ----New Mexico-------Texas -----

Alabama----------District of Columbia
Florida..-----Georgia- ___-_--Maryland-...----_North Carolina----South Carolina----Virginia ....---------

545,
141
1, 159
646
1, 009
881
339
966

529
77
727
492
613
614
188
777

-2.9
-45.4
-37
-23
-39
-30.3
-44
-19.

3
8
2
5
6

4,762

2,920

-38. 7

Kentucky-....- ____
Ohio ----Tennessee....-------

712
2,662
1, 388

421
1,683
816

-40.9
-36 8
-41.2

No. 6-Indianapolis ....----

1, 524

853

-44

667
857

426
427

-36.1
-50. 2

No. 5-Cincinnati-----

Indiana..--- ------.
Michigan------------.....

3, 062

1, 897

-38.0

1, 934
1, 128

1, 242
655

-35. 8
-41.9

3,159

1, 948

-38.3

348
508

210

1,951
180
172

345
1, 161
90
142

-39.7
-32. 1
-40.5
-50 0
-17.4

1,851

1,165

-37.1

199
405
282

0

Colorado--..---Kansas -----.....
Nebraska------Oklahoma-----..-No. 11-P6rtland .....
Idaho --------------....
Montana ------Oregon....
. ......
Utah-------Washington _---Wyoming--------..
No. 12-Los Angeles....
Arizona-.--...---C alihfornia-------Nevada ------------

73
892

113
275
146
31
600 .

-43 2
-32.1
-48.2
-57.5
-32.7

1, 855

1, 179

283
564
472

198
270
426
285

-30.0
-52. 1
-20.5
-39.6

639

340

-46.8

44
92
153
76
235
39

24
39
96
32
128
21

-45.5
-57.6
-37.3
-57.9
-45 5
-46 2

2, 277

1, 508

-33.8

90
2, 184
3

48
1, 456
4

-46.7
-33.3
+33.3

536

Source: Division of Operating Statistics, Federal Home Loan Bank Administration.




1943

-29.4

No. 10-Topeka---..

No. 4-Winston-Salem--.

Number, year
endming June 30- Percent
change
1942

No. 1-Boston .........
Maine-------------Massachusetts-----New Hampshire-Rhode Island---Vermont-----------..

Bank District and State

-36.4

35

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

EXHIBIT 4.-Selected figures on residential real estate owned by financial institutions,

Dec. 31, 1941, and Dec. 31, 1942
[Amounts in thousands of dollars]
December 31---

Type of institution

Decrease during 1942
-

---

1941
Savings and loan associations 1Mutual savings banks 4
----Commercial banks 5---------

------

---.

2 $327,620

-

Amount

8 $203,819

$123,801

37.8

300,000
127,000

200,000
85,000

100,000
42,000

33.3
33.1

1, 112,557

783,881

328,676

29.5

274, 608

221, 512

53,096

19.3

1, 387,165

1, 005,393

381, 772

27.5

-------2

Life-insurance companies 6
--------Total, private-----------

----

1942

---

-

-------------------

Home Owners' Loan Corporations 7---

2 357, 937

--.

2

--.......----

Grand total--------...................------------------------...

295,062

Percent

62,875

17.6

1 Estimate based on reports of operating associations' received by the Federal Home Loan Bank
Administration.
2 Revised.
3 Preliminary.
4 Estimate based on Month's Work and reports of the Comptroller of the Currency and of the Federal
Deposit Insurance Corporation.
6 Based on reports of the Comptroller of the Currency and of the Federal Deposit Insurance Corporation.
Excludes trust departments, but includes an allowance for investments and other assets indirectly repre
senting bank premises or other real estate.
8Estimate of the Federal Home Loan Bank Administration based on a questionnaire survey of the
largest life-insurance companies. Excludes company-built housing projects.
7Capital value.

EXHIBIT

5.-Estimated volume of mortgage loans originated on nonfarm 1- to
family dwellings, by type of lender

4

[Millions of dollars]
Type of lender

1930

1931 11932 1933 1934 1935, 1936 1937 1938 1939

1940

1941

1942

Savings and loan associa
-- $1,262 $892 $543 $414 $451 $564 $755 $897 $798 $986 $1,200 $1,379 $1,051
tions--------------400 169
54
10
16
77 140 232 242 274
324 1
371
374
Insurance companies ------..
484 350 150
99
80
80 100 120 105 112
133
171
130
Mutual savings banks -- .
Commercial banks and their
689
798
606
trust departments----670 364 170 110 110 264 430 500 560 610
Home Owners' Loan Cor
poration ----.----.---...
132 2, 263 583 128
27 - 81 151 1 143
63
40
Individuals and others i2
720 400 175 100 150 443 605 723 669 740
781 1 986
881
Total---........-----.-----......

3,536 2,175 1,092

865 3, 070 2, 011 2, 158 2, 499 2, 455 2,873

13,270

13, 768 3,082

I Revised.
2 Includes fiduciaries, mortgage, title, and real estate companies, construction companies, philanthropic
and educational institutions, fraternal organizations, State and local governments, etc.
Source: Division of Operating Statistics, Federal Home Loan Bank Administration.




36-

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION
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38

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

EXHIBIT 7.-Estimated balance of outstanding mortgage loans on nonfarm 1- to

4-family dwellings 1
[Millions of dollars]
Type of mortgagee

1930

Savings and loan associations-------------$6, 402
Insurance companies----------. ---------1, 732
Mutual savings banks------------------3, 300
Colmimercial banks
----------2,425
Home Owners' Loan Corporation ------------.... __,_

Individuals and others------- ------------ 7,400

1931

1932

$5, 890 $5, 148 $4, 437
1, 775
1, 724
1, 599
3, 375
3, 375
3, 200
2, 145
1,995
1,810
-_____,_-----132

1934

1935

$3, 710
-1, 379
3, 000
1,189
2, 379

$3, 293
1,281
2, 850
1,189
2,897

1936
$3, 237
1, 245
2, 750
1, 230
2, 763

----- 21, 259

Type of mortgagee

7, 500

7,000

6,700

6, 200

6,000

6,000

20,685

19,242

17,878

17,857

17,510

17,225

1937

Total----------------------

1938

1939

1940

1941

$3, 555
1, 320
2, 670
1, 600
2,169
6, 332

$3,758
1, 490
2, 680
1, 810
2, 038
6, 440

$4,084 2$4, 552
1, 758 2 1, 976
2, 700
2, 730'
2, 095
2,470
1, 956
1, 777
6, 510
6, 590

$4, 565
2, 255
2, 700
2, 480
1, 567
6, 350

17, 646

18, 216

19,103 220, 095

19, 917

Savings and loan associations -------------------$3,420
Insurance companies--------------------- ------ 1, 246
Mutual savings banks-----------------------2, 700
Commercial b'anks----------------------------1, 400
Home Owners' Loan Corporation-----------------2, 398
Individuals and others
------------------------6,180
Total.--

1933

---------------------------

17, 344

1942

1For detailed explanation of preparation of these estimates, see footnotes to exhibit 10 of Ninth Annual
Report of Federal Home Loan Bank Board.
Revised.
Source: Division of Operating Statistics, Federal Home Loan Bank Administration.

EXHIBIT 8.-Changes in selected types of indivzdual long-term savzngs Dec. 31, 1935,
to Dec. 31, 1942
[In millions of dollars]
Percent
1935

Total-----------Life insurance companies 1
Mutual savings banks 2..
Insured commercial banks 3
Savings and loan associa
tions 4
--------Postal savings 6 -------2V percent postal savings
--bonds?
United States savings
bonds 8------

1936

1937

1938

1939

1940

1941

1942

$43, 536 $46,428 $49, 109 $51,144 $54,190 $57,633 $61, 540 $70,461

change,
1941-42'
+14.5

17, 542
9,829
10, 575

19,133
10,013
11,491

20, 510
10,126
12,100

21, 858
10, 235
12,196

23, 381
10,481
12, 622

25, 025
10, 618
13,062

26, 877
10,490
13,261

29, 043
10, 621
13,820

+8.1
+1.2
+4.2

4,104
1, 229

3, 926
1, 291

4,011
1, 303

4,035
1, 286

4, 092
1, 315

4, 304
1, 342

4, 685
1, 392

5 4, 950
1, 417

+5.7
+1.8

104

99

95

92

90

87

85

84

-1.2

153

475

964

1, 442

2, 209

3,195

4, 750

10, 526

+121.6

1Estimated accumulated savings in, United States life insurance companies. Represents reserves plus
unpaid dividends and surplus to policyholders, except that deduction is made of policy notes and loans and
net deferred and unpaid premiums. Source: The Spectator.
2 Deposits. Source: The Month's Work, published by the National Association of Mutual Savings
Banks.
3 Deposits evidenced by savings passbooks for insured commercial banks. Source: Federal Deposit
Insurance Corporation.
4
Estimated private investments in savings and loan associations, including deposits and investment
securities. Series revised to exclude shares pledged against mortgage loans. Source: Federal Home Loan
Bank Administration.
5 Preliminary.
6 Due depositors; outstanding principal and accrued interest on certificates of deposits, outstanding savings,
stamps, and unclaimed deposits. Source. Post Office Department.
7 Excludes such bonds held by the Postal Savings System. Source: Treasury Daily Statement /and Post
Office Department.
8 Current redemption value; from May 1, 1941; includes War Savings bonds, series E.




REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

39

EXHIBIT 9.-New loans made by member associations,by purpose
[Thousands of dollars]
Home
purchase

Refinancing

Reconditioning

Other

$1, 084, 866

$388, 376

$168, 201

$49, 396

$89, 334

106, 948

43, 800

91, 198
79, 091
112, 322

95,381
84, 653
80, 723'

127, 619

39. 132
39, 110
46, 159

14, 153
11,627
9, 515

14, 101

23, 388
21, 404
20,126
24,416

311, 039

477, 193

152, 561

43, 503

79, 149

333, 463
281, 379
206, 667
241, 936

116,481
87, 222
58, 924
48, 412

138, 334
123, 426
88, 454
126, 979

42, 088
38,614
33,675
38, 184

14, 184
11,613
8, 125
9, 581

22, 376
20, 504
17, 489
18, 780

895,534

112, 308

545, 580

148, 017

29,070

60, 559

239, 077
201, 228
181, 486
273, 743

-----

$389, 559

283, 670
248, 014
228, 565
324, 617

1, 063, 445

Fiscal year 1941 -------

39, 233

135, 807
118, 594
108, 828
182, 351

38, 631
35, 048
33, 755
40, 583

9,695
7, 282
5,315
6, 778

15,711
14, 293
13, 882
16, 673

September 1940-------------December 1940 ----------------March 1941
----------June 1941
Fiscal year 1942
September 1941-------------December 1941--------------------------March 1942
June 1942 -------------------Fiscal year 1943

Construc
tion

Total

Period

--------

September 1942-------------December 1942-------------March 1943-------------June 1943--------------------

26, 011
19, 706
27>358
I

I

I

I

10.-Combined statement of condition for all reporting savings and loan
members of the Federal flome Loan Bank System, by type of association, as of
Dec. $1, 1942, and Dec. 31, 1941

EXHIBIT

[In thousands of dollars]
All members

Federals

Insured State
chartered'

Uninsured State
chartered

Balance-sheet items
1941

1942

1941

1942

1941

1942

1941

1942

ASSETS

First-mortgage- loans (in
cldifing ihterest and ad
$3,918,967 $3,989,514 $1,827,901 $1,859,892 $938,858 $1,031,495 $1,152,208$1,98,127
vances)------------------Junior-mortgage loans (in
cluding interest and ad
512
2,985
2, 066
570
823
703
1,592
851
vances)-----------------Other loans (including share
4, 144
29, 577
17, 132
8, 396
5, 463
4, 839
15, 718
8,149
loans) _-----.-------57, 792
173, 598 162,348
62,118
58, 895
58, 239
52, 585
46, 317
Real estate sold on contract189, 429 124, 752
36, 910
53,119
36, 737
51,819
84, 491
51,105
Real estate owned---------Federal Home Loan Bank
stock ---------------------

U. S. Government obliga
tions--------------------Other investments (includ
ing accrued interest) -----Cash on hand and in banks Office building (net) -------Furjiiu,re, fixtures, and
equipment (net)---------Other assets -------Total assets ------

47, 553

49, 943

23,070

24, 523

11,659

,12,926

12,824

12,494

75, 244

259, 678

24, 944

119,124

20,424

75,161

29, 876

65, 393

21, 039
278, 696
47, 229

23,112
336, 281
47, 272

3, 114
136, 935
20, 342

4, 054
162, 933
20, 830

7, 285
69, 766

10, 588
93,140

13, 649

10, 640
71,995
13, 514

8, 470
80, 208
12,793

5, 293
8, 148

6,077

2, 988
2,128

3, 422
2, 305

1, 421
2,171

1, 757
1,713

3,849

884

898
3, 258

7, 276

13, 373

4, 797, 758 5,025,451 2,164, 325 2, 296, 441 1, 183, 257 1, 340, 947 1, 450,176 1,388,063

LIABILITIES AND CAPITAL

U. S Government invest
ment (shares and depos
195, 692 167, 902 159, 266 136, 136
36, 208
31, 605
218
161
its)------------------Private repurchasable shares 3, 416, 075 3, 746, 191 1, 668, 292 1, 884,808 724,945 860,497 1, 022, 838 1,000, 886
130, 777 125, 682
7, 596
5, 705
pledged shares --17, 197
20, 526 105,984
99, 451
Mortgage
Deposits and investment
331,926 350,955
222
279 201,301 231,772 130,403
118,904
certificates
from Federal
Advances
217, 881 131,152 143,588
83, 776
49,273
32, 043
25,020
15,333
Home Loan Banks-----21, 345
11, 530
6, 442
4, 458
5, 545
3, 036
9, 358
4, 036
Other borrowed money- ---66, 786
29, 556
39, 338
15, 782
17, 859
9, 273
9, 589
4, 501
Loans in process----------Advance payments by bor
17,620
22, 4558,415
10, 7781
-----5,546
6,863
3,659
rowers .----4,814
20,8261
21,805
9,737
10, 387
7,269,
4,337
6, 7521
4, 149
Other liabilities - ---- -




40

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

EXHIBIT 10.-Combined statement of condition for all reporting savings and loan
members of the Federal Home Loan Bank System, by type of association, as of
Dec. 31, 1942, and Dec. 31, 1941-Continued
[In thousands of dollars]
All members

Federals

Insured Statechartered

Uninsured State
chartered

Balance-sheet items
1941

1942

1941

1942

1941

1942

1941

1942

LIABILITIES AND CAPITAL
continued
Capital,' permanent -reserve
or guaranty stock---------$26, 519
Deferred credit to future op
erations
.---------16, 044
Specific reserves
...-----------8,050
General reserves ---------211, 337
Bonus on shares ------------623
Undivided profits and sur
plus-----....-------- ------ 116,257

$25, 841--------....... ........-------.

$21,967

$21,963

$4, 552

$3, 878

14,894
8,411
246, 836
676

$6,650
3, 793
69, 955
493

$6,020
4, 221
83, 787
532

4, 448
2,079
63, 016
125

4,641
2, 122
77, 033
136

4,946
2, 178
78, 366
5

4, 233
2,068
86, 016
8

121, 565

40, 538

49, 772

26,996

32,168

48, 723

39, 625

Total liabilities and
capital ---------.....
4, 797, 758 5, 025, 451 2,164, 325 2,296, 441 1,183, 257 1, 340,947 1, 450,176 1, 388, 063

Reporting associations---......




Number Number Number Number Number Number Number Number

3, 771

3, 737

456

1,464

878

927

1,437

1, 346

41

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION
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44

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

EXHIBIT 12.-Federal Home Loan Bank Administration-Members of the Federal
Savings and Loan Advisory Council, as of June 30, 1943
Federal Home Loan Bank District

Elected or
a ointed

Name

ymond P. Harold--------.------------Elected.
Boston---------R---------------------New York------------------------Francis V. D. Lloyd-----------------------Do.
Do.
Pittsburgh--------------------- James J. O'Malley--- -------------------- Appointed.
Winston-Salem- ------------------- Horace S. Haworth- ..---------.. ---------------- Elected.
Do--------------------------- J. F. Stevens-----------...
Cincinnati-----------------------R. P. Dietzman------------------------- Appointed.
Do--------------------------- W. Megrue Brock......------.....------------- -Elected.
Indianapolis----------------- ------ Walter Gehrke .......---------------------------Do.
Chicago------------------------------- C. W. Reuling----...-------------..------ Appointed.
Do---------------- A. G. Erdmann------------------------Elected.
Des Moines-----------------------E. A. Purdy--------.........-------------------Appointed.
Do--------------------------- C.R Mitchell---------..........---------------Elected.
Little Rock----------J. J. Miranne----------------------------Do.
Do.
-------------- George E. McKinnis----------....
------------Topeka----------Portland-------------------------T. M. Donahoe---------....-----------------Do.
Los Angeles-----------------------David G. Davis ------------------------ Appointed.
------ -------- Elected.
Do-------........------------------- C. A. Carden------------.....

EXHIBIT 13.-Federal Home Loan Bank Administration--Statementof receipts and
disbursements of the Administration during the fiscal years 1942 and 1943
July 1, 1941, to July 1, 1942, to
June 30, 1942
June 30, 1943
Balance at beginning of fiscal year

--------------------------------

$239, 959.02

$353, 374.06

Receipts:
Assessments upon
Federal Home Loan Banks -----------------------------300,000 00
300,000.00
Home Owners' Loan Corporation__---------------- -----------18,438.92
0
Federal Savings-and Loan Insurance Corporation --------197, 209.17
103,678 01
Examining receipts
....
..
...---------------------------------------1, 072, 269. 54
918, 321.39
Miscellaneous refunds
---------------------------------------17, 627. 41
27, 991. 37
Reimbursement for conservators' expense-------------------------2,359. 78
3, 600 29
Sale of property-------............-------------------------------------163.10
0
Sale of material------------.......----------....
9.01.
8.00
Refund from Treasury Department------- -----------------------712.69
0
' 0
4,148 29
Refund from Federal Loan Agency --------------------------------Total receipts-------------------------------------------1, 608, 789. 60

1,357, 747.35

1, 848, 748 62

1, 711,121.41

--------Total cash and receipts .---...-----------..----------...

Disbursements:
1,146, 029. 60
.
..
......------------------------------------------------Salaries
12,823 96
------------------Supplies and materials--------------------- 95. 73
Newspapers and periodicals---------------------------- --------20,673.34
Communications-------------------------------------------225,551 10
--------------------------------------------------Travel
--1,033 50
Transportation of things-----------------------------------16, 380.42
--------------Printing and binding-------------------------25,901.68
Photographing and duplicating--------------------------------28,894 67
Rents------------------------------------------------7,960. 56
Equipment, furniture, and fixtures------------------------------Transferred to administrative expenses:
6,600.00
Federal Loan Agency-------------------------------------0
------------National Housing Agency-----...-----------------3, 430.00
Treasury Department--------------------------------------

1,059, 584.99
5,697. 70
117 00
10,732.64
-66,758.35
328.87
7, 632.10
13, 598.10
26,820.48
2, 668.06
0
7,064.00
10,
000.00

Total disbursements----------------------------- ------

1,495, 374. 56

1, 302, 002. 29

Balance at end of fiscal year ...-----------------------------

353, 374.06

409,119.12




45

REPORT OP FEDERAL HOME LOAN BANK ADMINISTRATION

EXHIBIT 14.-Federal Home Loan Bank Administration-Comparativestatement

reflecting, by offices, the number of Administration employees as of the close of the
fiscal years 1942 and 1943
1942
Offices of the Board Members --..---Office of the Commissioner-----------

1942

1943

1 --...
3

Office of the Governor:
10
Governor's immediate office ...
35
Office of the Comptroller-------..
29
Office of the Chief Supervisor- ...
Review and Analysis Section ..-------------74
Total, Governor's office------.....

3
9
27
23
4

1943

8
Office of the Secretary.....--------------14
-- ..
4
Office of Public Relations----------8
5
Division of Operating Statistics ..
7
11
Legal Department........---------------9 ---Review Committee- ..-------------Examining Division:
Washington office------------...8
Field-----------------------299

63
S----

8
225

Total, Examining Division--...

307

233

Grand total--------....---------

431

'319

EXHIBIT 15.-Federal Home Loan Bank System-Number and estimated assets

of member institutions, June 30, 1942, and June 30, 1943
Assets of members

Number of members
[Inthousands of dollars]
_______
_________139
1

Bank District and State

1942

United States...........--------............----..

1943

1942

1943

3, 815

3,774

$5,643, 970

$6, 045, 016

No. 1-Boston......-------......-----...------------

232

237

902,904

958, 698

Connecticut ------------Maine
------------Massachusetts---New Hampshire
Rhode Island--------------------------------------Vermont-------

50
22
130
21
5
4

51
23
132
21
5
5

144,370
20,234
613, 538
77,522
41,641
5,599

162,611
25,077
636,588
81,165
47,129
6,128

No. 2-New York-------------------------------New Jersey----------------

No. 4--Winston-Salem. -------------...

493,060

617,595

236
134

162,618
330,442

243,269
374, 326

477

297, 528

320, 199

7
/454
27

Delaware------------------------------------Pennsylvania ---------------West Virginia- ..---...---.......------------------

370

488

New York---------------------------------No. 3-Pittsburgh --------------

375
'245
130

-------

7
443
27

3,269
269, 902
24,357

3,440
292,163
24,596

415

414

738,819

801,848

Alabama -----------------------District of Columbia---.....
Florida .------Georgia--Maryland --------------North Carolina-----------------------------------------South Carolina .
Virginia----

28
21
50
56
6"
114
44
39

28
21
50
56
63
113
44
39

23,142
161,881
95, 232
47,068
84, 664
227,280
41,876
57,676

24,961
172,467
103,964
53,606
96.822
240,850
48,611
60, 567

....

579

564

946, 952

992,895

-----............
Kentucky ----OhioTennessee ...---------------------------------

87
453
39

78
450
36

101, 232
804,110
41,610

88, 102
864,981
39,812

218

220

315,550

360,448

160
58

162
58

189, 063
126,487

216, 841
143,607

454

455

480,620

500,018

341

343

354,535

374, 669

113

112

126,085

125,349

No. 5-Cincinnati.....------------....

No. 6-Indianapolis--------..... ---------Indiana.
Michigan ------------------

-------

No. 7-Chicago---------------------------------Illinois----Wisconsin----




--------------------

-----

46

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

EXHIBIT 15.-Federal Home Loan Bank System-Number and estimated assets
of member institutions, June 30, 1942, and June 30, 4943-Continued
NumberAssets
Number of members

of members
[In thousands of dollars]

Bank district and State

246

1943

1942

1943

1942

$281, 627

244

$266,326

73
43
104
13
11

56,755
75,474
110,501
12,583
11,013

61,706
85,231
116,293
13,732
4,665

280

392,124

414,491

41
22,227
Arkansas-------------------------------------.........
41
67
101,260
Louisiana ---------------------------------67
27,313
26
26
Mississippi-----------------------------------..
7,098
New Mexico.................-------------------14
14
132
234,226
Texas...................................--------------------------133

23,103
100,762
29,642
7,909
253,075

No. 8-Des Moines------------------------------................

Iowa ......................--------------------73
42
Minnesota-----------------------------------........................
Missouri.................--.----------------------- ..---106
---.....
-..
13
North Dakota.......--------12
South Dakota ---------..... --------...
.....-----

No. 9-Little Rock........

No. 10-Topeka -

-------------..

281

223

No. 11-Portland ------------...
Idaho................---------------------------Montana -----------------.......
Oregon....------------------.......----------...--....
...
Utah .. ............-----------------........
Washington. ----------------.................
Wyoming ...........------------------------------------..
Alaska--------------------------------------No. 12-Los Angeles.......---.........------------------------..
Arizona ----.........
.......----------------..
California -------------------...
Nevada .......----.....--.--------............--------------Hawaii..........................-----------------....

214

196,665

202,654

39
99
32
53

39
92
31
52

36,946
60,429
28,226
71,064

38,274
61,487
29,688
73,205

130

Colorado--------........................--------------..-------------Kansas ....
.-----------............
Nebraska----.......................--------------------------..Oklahoma--...----------------------------

130

180,407

207,901

8
14
27
10
60
10

8
14
26
10
61
10

1

8,863
12,469
37,846
20,037
94,385
6,352

1

9,527
13,177
42,689
23,750
111,452
6,761

455

545

174

169

433,015

386,642

3
164
2
5

3
160
1
5

6,870
419,458
926
5, 761

8,131
370, 523
904
7,084

Source: Division of Operating Statistics, Federal Home Loan Bank Administration.

EXHIBIT 16.-FederalHome Loan Banks-Advances and repayments for the periods
indicated, and the balance of advances outstanding at the close of such periods

Fiscal year:
1933- .---1934 -------1935...------......--------------..

Repayments

Advances

Period

-

$48, 894. 602 41
62,871,970 22
36,683,308.61
78,195,224.32
114,287,052 41
105,432,157 95
76,659,074 62
108,009,901 23
142,875, 563 45
155,025,046 83

1942-July
August-----------------------------------September-------------------------------October..-------------------------------November------------------------------December ----....----------------..

7,931,272 79
4,263,924. 36
4, 157, 05Q.91
5,689,951 00
4,011,358 52
18,209,462.95

-----------

1936- ------------------------------1937 -----------------1938-------------------1939----------------------1940
-----------------1941-4-------1942--..---------------

-------

$1,
230,77282
25, 387, 445 72
42, 599,148 52
38,840,900 50
65,817,003.85
76,-264,107 15
103,922,448.88
119,574,417 17
130,375,220 91
132,277, 500 65

Bsandi

$47,663,829. 59
85,148, 354 09
79,232, 514.18
118,586,838 00.
167,056,886 56
196,224,937 36
168,961,563.10
157,397,047.16
169,897,389 70
192,644,935 88

1




26,982,912 17
17,656,010 27
19,606,
274.18
19,065,022.42
13,502,695 02
10,882,510.73

173,
160,
144,
131,
121,
129,

593, 296 f0
201, 210. 9
751,987. S2
376, 915. C0
885, 579. 40
212, 531.62

47

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

EXHIBIT 16.-FederalHome Loan Banks-Advances and repayments for the periods
indicated, and the balance of advances outstanding at the close of such periods
Continued
"
Repayments

Advances

Period

1943-January ------------------February----------------March----.
-----April
-----------------May
-------------------------June
Total, fiscal year 1943 --

-96,

Grand total through June 30, 1943 .------

$11, 807, 843
1, 239, 791
1, 531, 654
16, 727, 828
2,710,420
18, 065, 755

50
00
47
03
00
32

346, 312 85
1, 025, 280, 214 90

Balance out
standing

$27,621,167
19, 015, 468
18, 548, 659
7, 965, 351
10,858,061
7, 095, 537

$113, 399, 207
95,6 23, 529
78, 606, 524
87, 369, 000.
79, 221, 359
90, 191, 576

79
96
56
86
07
94

198, 799, 671 97

33
37
28
45
38
76

------

935, 088, 638.14 --------

EXHIBIT 17.-FederalHome Loan Banks-Interest rates charged member institutions
on advances, as of July 1, 1943 1
Federal Home Loan
Bank

Rate in
effect
I---

Types of advances
I----------

-------

Percent
Boston----------Boston ..

New York- .
Pittsburgh --------

Winston-Salem --Cincinnati --- -----

Indianapolis

Chicago ------------

Des Moines..---Little Rock...--Topeka ... ----Portland--- -------

Los Angeles

.----

--

1Y Short-term advances amortized within 1 year, or secured by Government
bonds
'On advances for 5 years, for defense-housing purposes, not exceeding 10
2
percent of member's assets, amortized at not less than 5 percent quarterly.
21/ All other advances.
Short-term advances amortized within 1 year.
21/o
Long-term advances
S1> Short-term advances for purchase of Government bonds.
Ad vances for 5 years with amortization of 10 percent per annum, payable
2
quarterly, for purpose of retiring Government investments in stock.
3
All other advances.
All advances.
2
12 On advances not exceeding 6 months, for purchase of United States securi
ties or for the retirement of members' securities owned by the Home
Owners' Loan Corporation or the U. S. Treasury.
2Y All other advances.
On advances not exceeding 6 months.
11
On advances not exceeding 1 year, but in excess of 6 months.
2
On long-term advances for the first year of the note.
2
On long-term advances beginning with the second year from the date of
the note.
2
11, Short-term advances amortized in equal monthly installments.
2
For a 6 months' period ending Dec 31,1943, on 1 year unamortized advances
for purpose of repurcha-mg share investments made by the Home Owners'
Loan Corporation or Treasury, or purchase of Treasury obligations. 2
1
24 Short-term advances amortized by not less-than 2 2 percent quarterly.
All other advances.
3
2 Advances not exceeding I year.
212 Advances exceeding 1 year.
All advances.
2
Do.
212
Advances not exceeding 90 days, when collateralized by Government obli
2
gations (no restrictions on renewals).
Advances not exceeding 6 months for purpose of retiring Government in
2
vestments m stock, effective during July only.
3
All other advances.
Secured advances not exceeding $50,000 or 10 percent of member's line of
2
credit; whichever is greater, for purchase of Government obligations.
2Y2 All other advances.

SRates on advances to nonmembers are
of 1 percent higher
I Advances must not exceed 10 percent of member's assets.




-,-------

48N-

REPORT OF FEDERAL HOME- LOAN BANK ADMINISTRATION
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60

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

EXHIBIT 22.-Federal Savings and Loan Insurance Corporation, Washington,
D: C.-Statement of condition, June 30, 1943
ASSETS
Cash in U. S. Treasury:
Special deposit account----------....-----------.-----------------.......--....
Available for:
Administrative expenses:
1942-------.
------------------------------$2,443.91
1943_ -------....
--------4,093.83
Employees' bond allotment account----------------------------------Victory tax account--------------------------------------.. ---Accounts receivable:
Insurance premiums:
Payments due---------------------------------$13, 740.75
Payments deferred--------------------------- 1, 025, 363. 71
Admission fees due_------------------------------ -----------Due from receiver for institutions in liquidation ---------------------Miscellaneous----------------------------Liquidating dividends receivable on subrogated accounts in insured
institutions---------------------------------------------------

$961, 578.82

6, 537. 74
1,196. 10
2,611. 50

1, 039, 104.46
2, 531.04
3, 029.84
6, 825.63
118 44

1, 051, 609. 41

Investments:
U. S. Government obligations and securities fully guaranteed by the
United States (par value)
----------------137, 062, 500. 00
Net unamortized premium and discount on investments .--------------- 225, 092.33
Accrued interest on investments----------------------------..------------..
Subrogated accounts in insured instititions in liquidation--_-------------- $4, 556, 070 06
Less allowance for losses
------------------------------------------728,903.45
Total assets ..---...

137, 287, 592.33
110, 861.49
,

.........-----------.---------------..

Deferred income:
Unearned insurance premiums--------------------------------.
1,833, 487.08
217.63
Prepaid insurance-premiums--------------------------------------Capital:
Capital:
Capital stock- p o
...-----------------------------. 100,000,000.00
- -

3, 827, 166. 61
143, 249, 154. 00

LIABILITIES AND CAPITAL 1
Liabilities:
Estimated expenses incurred and not billed at close of fiscal year --------$4, 622. 58
Employees' war savings bond allotments-_
-------------------1, 196.10
Victory tax withheld from salaries of employees-------------2, 611.50
Unsettled insurance claims------------- -------------------------55 67

Reserve fund as provided by law. --..----------------

$971, 924. 16

8, 485 85
1,833, 704. 71

17,406,963.44

(The Corporation estimates losses of $2,711.46 on insured accounts
aggregating $21,020.71 in institutions in default, pending settlement or
not claimed.)
Special reserve for contingencies -----------------.------------24, 000, 000.00

141,406,963.44

Total liabilities and capital-- .----.
---------------------- ---- 143, 249,154.00
1A contingent liability of $366,944.76 exists due to commitments in connection with the prevention of
default in insured associations.




REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT

61

23.-Federal Savings and Loan Insurance Corporation-Income and
expense statement for the period July 1, 1942, through June 30, 1943

Income:
$4,000,101.27
Insurance premiums earned ------------------------------------.....----37, 150. 76
Admission fees earned_
Interest earned on U. S. Government obligations and securities fully
3, 556, 880. 66
guaranteed by the United States------------------------------------19.65
--------------------------------------------Miscellaneous
---$7,594,152. 34
Administrative expenses:
$175,376.68
Personal services--------------------------3,221.63
----------Travel
6. 87
-------------------Transportation of things - -3, 527.08
Communication services-------------------------------------271.38
Printing and binding --------------------- 10, 059. 82
Other contractual services--------------------------------Supplies and materials -------------------707. 50
401.40
Equipment -------------------------------------------------Services rendered by Federal Home Loan Bank Administra-,
98,056.84
---------------------tion -------------- ------1,819.00
Administrator's Office of National Housing Agency_ -------Total administrative expenses
------------------------------Nonadministrative expenses:
Personal services-------_
---------------------------- $31, 957. 68
845.39
Travel ----- -.----------- ------------------------------14.73
Transportation of things --------------------------------311.76
Communication services --------------------------Printing and binding------ -- -------------263.64
5,093.03
Other contractual services----------- --------------------122. 91
Supplies and materials-------------------------------------32.00
Equipment..---.. ---....--------.-----------Total nonadministrative expenses

293, 448. 20

38, 641.14

------------------------------..-----

332,089. 34

------------------------.
Net income from operations ..-Nonoperating'charges and credits:
Profit on sale of securities----------------------------------Commission on sale of securities-----------------------------------------

$2, 069, 779.08
8, 281.25

Net income for period ----------------------------------------------Adjustment of net income for prior years -------------------------------------

-------------- ------

9,323, 560. 83
152 83

------

9, 323, 713.66

Net incoime

--------.-

...--------------------.
-----------------

-

7,262,063.00

2,061,497. 83

--

DISTRIBUTION OF NET INCOME
To special reserve for contingencies ---To reserve fund as provided by law
Total---------------------------------9,




----------------------------------------------------------------------...

3, 000,000. 00
6,323,713.66
323, 713. 66

62

REiPORT OF FEDERAL HOME LOAN BANKE

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65

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

sheet as of June 80, 1943
EXHIBIT 25.--Home Owners' Loan Corporation-Balance
ASSETS
Mortgage loans, vendee accounts, and advances, at present face value------------------- $1,441,153,110.68
---------3,764,871.44
Interest receivable
.......--- ..................
..
.........-------------------------Property:
Owned .- -----.---------

..

.------ $187,952,362. 67

--

In process of acquiring title--------------------------------------

3,346,465.66
------

1 191,298,828.33

1,636,216,810.45
51,588,736.90
....-----------------------------------------------------

Less reserve for losses ............

Total
.................----------------------------------------------------------- 1,584,628,073.55
Investments, at cost:
Federal Savings and Loan Insurance Corporation (entire capital)-.. $100,000,000.00
Savings and loan associations:
Federal-chartered--- -------------------- $85,184,450 00
State-chartered--------------------------.23,218,960.00
A
108,403,410. 00
U. S. Treasury bonds (borrowers' special deposits), at face value ... 9,984,000.00
218,387,410 00
Bond retirement fund
Cash (including $6,027,900 deposited with U. S. Treasury for retirement of matured
6,128,767.04
bonds)
-----------------------------------------------------------/

Cash:

Operating funds (includes $2,192,226.96 payable to bond-retirement
fund in July 1943, and $14,811,383.90 deposited by borrowers and
employees-see contra)

-----------

-

-----

$39,631,823.49

National Housing Agency-Homes conversion program-Conversion
--------------------------------------- 38,497,497.12
fund (see contra)
Special funds held by U. S. Treasury for payment of interest coupons
.. ---.
....------------------------ --- 1,624,691.36
(see contra) --Fixed assets:
-----------Home office land and building, at cost-------------....
Furniture, fixtures, and equipment, at cost ---......---------------------Total-----------------------Less reserve for depreciation-----------

---------------------4,815,098.35
---------------------,199,145.84
2

Other assets:
Accounts receivable--..
----------------------------------.....-------------------Less reserve for uncollectible accounts receivable
S-394,662.50
Deferred and unapplied charges:
Unapplied property costs and expenses----------------------------Miscellaneous------

-------------------

Total assets__-- -.

2,615,952. 51

412,991.27
18,328.77
48.00
161,050. 59

--------

79,754, 011.97

2,987,819.93
1,827, 278.42

161,098. 59

------------------------------ 1,892,069,976.16

LIABILITIES AND CAPITAL
Bonded indebtedness (guaranteed as to principal and interest by the
United States, except $165,125' of unpaid matured 4-percent bonds
guaranteed as to interest only)
2Bonds outstanding, not matured

... -

-

...---..

Bonds matured, on which interest has ceased ..----------

. $1, 729, 481,800.00

--------

Accounts payable
Interest due July 1, 1943, and prior thereto (see contra) ....-------Vouchers payable..---------------------------------------------Insurance premiums -------------------Commissions to sales brokers.....---------..----------------------Special deposits"
By borrowers
..-----------..-----------------------By employees _---

-

-----------

Victory tax withheld--....----------------Miscellaneous
---.......----..-----..

6,027,900.00

1, 735, 509,700.00

1, 624, 691.36
4,153. 68
204, 487.97
50, 655.85
24, 610, 329.90
81,032. 50

-----

-Accrued liabilities
Accrued interest on bonded indebtedness ----------------------Other accrued liabilities-----------...
------------------------

------

104, 021.50
56, 884.37
4, 836, 519.67
190, 310.44

26, 736, 257. 13

5,026,830.11

Liability for special funds held: National Housing Agency-Homes
38,497,497.12
conversion program....------------...............---------------------------------------1
Property owned and property in process of acquiring title are stated at values represented by unpaid
balances of loans and advances; unpaid interest to date of foreclosure sale or judgment; foreclosure costs;
net charges prior to date of acquisition and permanent additions; imtial repairs and reconditioning subse
quent to acquisition. Unpaid interest included in these values amounts to $9,200,360.28.
2
Total bonded indebtedness shown includes unmatured bonds, which are guaranteed as to principal and
interest by the United States, as follows:
3-percent bonds due May 1, 1952 .--- -------.-----------------$778, 577,775
1 h-percent bonds due June 1, 1947...
---_-- 754,904,025
.-------------------------1-percent bonds due July 1, 1944- .
. . . . . . .......
.
196,000,000




66

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

EXHIBIT 25.-Home Owners' Loan Corporation-Balance sheet as of June 30,
1943-Continued
LIABILITIES AND CAPITAL-Continued
Deferred and unapplied credits:
Unamortized premium on bonds sold -------------------------------Miscellaneous....-------------------------------------------------Reserves:
Fidelity and casualties --Fire and other hazards--------

- ------------------

Capital stock less deficit:
Capital stock
Authorized, issued, and outstanding
-Losses in excess of net earnings - ------Reserve for future losses ----------

-------------

$65, 242, 430 53
452, 337, 090 50

$799, 130 90
2, 331, 728 33
248, 074 28
500, 279 32
-

$3,130, 859. 23
748,. 353.60

200, 000, 000 00
117, 579, 521 03
-

82,420, 478.97,

.-.-------------------------- 976 16
1,892, 069,
Total liabilities and capital ----3 The figure shown above reflects the Corporation's actual losses sustained in the sale of its acquired
properties; on mortgage loans and other losses; on fire and other hazards; and on fidelity and casualties in
excess of its cumulative net earnings.
4 The reserve for losses is being 'accumulated at an annual rate which, on the basis of careful estimates,
will approximate the total losses which may be sustained in the liquidation of mortgage loans, interest, and
property. The figure shown above reflects the reserves which have been provided to date for such future
losses.
NOTE.-Except for property transactions which are recorded on a cash basis, major items of income and
expense are recorded on an accrual basis. Therefore, no asset value has been recognized with respect to
uncollected rentals or prepaid taxes nor liability for accrued taxes.

EXHIBIT 26.-Home Owners' Loan Corporation-Statement of income and expense
for the fiscal year 1943
Operating and other income:
Interest
$54,110, 771. 71
Mortgage loans and advances--------------------------------------------------------------------------------------------- 16,429,292 83
Vendee accounts and advances
Total -Special investments

-------------------------------- 70,540,064 54
29,426. 22
------------------------------------------

70, 569, 490 76
Total------------------------------Property income -----------------------------------------------------16, 768, 486.01
4,729, 649.00
Dividends received from savings and loan associations--------------------------794,077 12
Miscellaneous
-----------------------------------------------------Total income_

--------------------------

-----------------------

Operating and other expenses
Interest on bonded indebtedness------------------------Less amortization of premium on bonds sold-------------------------------------------

92,861,702 89
38, 579, 608 77
203.830. 80

38,375,777.97
Administrative and general expenses:
Administrative expenses:
10, 711,748 73
-----------------Current fiscal year-----------------123, 261.45
------------------------------------- -----First preceding fiscal year
124,458.18
-.------ ------------- ------------All other fiscal years
272, 174.03
--- -.
-------,----General expenses--------------- ---11, 550, 908. 39
- ----------------- --------------------------Property expense
Total expenses----------------------------

-------

60, 762,889.49

Net income before provision for losses which may be sustained in the liquidation of
---....------------------- 32,098,813.40
---------------------------------assets
Provision for losses:
-------------------- 40,000,000.00
On mortgage loans, interest, and property -------------41,018 51
For fidelity and casualties---------------------------------------184,667 00
For fire and other hazards----------------------------------------------------968. 57
-----------------------------------------For uncollectible accounts receivable
40, 226,654.08
Loss for fiscal year_ -I Net credit.




---- ---------------------

8,127,840 68

REPORT OF FEDERAL HOME LOAN BANK ADMINISTRATION

67

EXHIBIT 27.-Home Owners' Loan Corporation-Statementof income and expense
from the beginning of operations, June 13, 1933, to June 30, 1943
Operating and other income:
Interest:
Mortgage loans and advances---........................-----------------------.... $903,117,575.21
Vendee accounts and advances---------..........-------------- ----- 63, 190, 651.18
966, 308,226.39
231,488. 03
$966, 539, 714.42
Property income ----130,011,165. 30
Dividends received-Federal Savings and Loan Insurance Corporation. ----3,035, 326.09
Dividends received from savings and loan associations------------------40,064,410. 53
Miscellaneous--------------------------------------------------------...
4,356,528.06
Special investments---------..................-----------------------------

Total ------------------------------------------------- 1, 144,007, 144.40
Operating and other expense:
Interest on bonded indebtedness----------------------------$585,659,863. 44
....----------------------819, 735. 53
Less amortization of premium on bonds sold-584, 840,127. 91
Amortization of discount on refunded bonds-....-------------------- 7,147, 710. 28
---------------- 256, 744,113. 54
Administrative and general expense----------....
105,
....
.....--.....----------------------- 436, 987. 00
...
.........-----------Property expense_
Net income before provision for losses which may be sustained in the liquidation of
assets
----------------------------------------------------------Provision for losses:
On mortgage loans, interest, and property (computed in accordance
with Board Resolution of Nov. 15, 1938)-------...-------------- $306,137,153. 25
1,245,745.03
For fidhlity and casualties-..-------------------------------777, 732. 50
For fire andother hazards------------------------------------968. 57
For uncollectible, accounts receivable ..-------------------------------......-----------Loss for period June 13, 1933, to June 30, 1943 ........
------------Add unlocated payments-----------------------------$13,455. 65
-----------Less: Unidentified payments
Repayments unallocated-unidentified difference - 14,197.04

---33,780.04

954, 168, 938. 73
189,838,205.67

599
308 161 35
118,323,393.68

27.652, 69
6,127.35

Total

-

--------------------------------------------

118,329,521.031

Deduct surplus adjustment-reserve against fire and other hazards-------------------

750,000.00

Deficit at June 30, 1943.---------------------------------------------------.

117, 579, 521.03




0


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102