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80th Congress, 1st Session
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House Document No. 44
THIRTEENTH ANNUAL REPORT OF THE
FEDERAL HOME LOAN BANK
ADMINISTRATION
LETTER
FROM
COMMISSIONER, NATIONAL HOUSING AGENCY,
FEDERAL HOME LOAN BANK ADMINISTRATION
TRANSMITTING
THE THIRTEENTH ANNUAL REPORT OF THE
FEDERAL HOME LOAN BANK ADMINIS
TRATION FOR THE PERIOD JULY 1,
1944, THROUGH JUNE 30, 1945
JANUARY 3, 1947.-Referred to the Committee on Banking and Currency
and ordered to be printed
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1947
LETTER OF TRANSMITTAL
NATIONAL HOUSING AGENCY,
FEDERAL HOME LOAN BANK ADMINISTRATION,
Washington 25, D. C., September 26, 1946.
The
SPEAKER,
House of Representatives,
Washington, D. C.
MY DEAR MR. SPEAKER: Transmitted herewith is the Thirteenth
Annual Report of the Federal Home. Loan Bank Administration,
covering reports of all its constituent units, the Federal Home Loan
Bank System, the Federal Savings and Loan Insurance Corporation,
the Home Owners' Loan Corporation, and the United States Housing
Corporation for the fiscal year 1945.
Sincerely yours,
JoHN H. FAHEY,
Commissioner.
III
CONTENTS
Page
1
I. The year in retrospect---------------------------------------2
Servicemen's Readjustment Act of 1944-----------------4
Residential construction and the real-estate market ------4
Residential construction----------------------------4
Building costs-------------------------------------4
Foreclosures----- ----------------------------------5
5---------------------Real-estate overhang-5
Mortgage'finance and savings----------------------------5
-----------Home mortgage lending in 1944------7
Home mortgage debt--------------------------------9
Private savings------------------------------------11
II. Federal Home Loan Bank Administration-----------------------11
Organization of the administrative department -------------12
Administrative expenses --------------------------------Personnel of the Bank Administration----------------------12
13
III. Federal Home Loan Bank System -------------------------Sale of war bonds-------------------------------------13
13
Lending activity of regional Banks ------------------------14
Members' deposits-------------------------------------15
Debenture financing-----------------------------------15
Financial statements- -----------------------------------17
-----------------Interest and dividend rates------------17
Examination and supervision -----------------------------17
Administrative expenses --------------------19
IV. Savings and loan associations --------------------------------19
Federal Home Loan Bank Districts ---------------------19
Number and assets------------------------------------22
-------------Operations in a wartime economy-Lending operations--------------------------------22
Financial operations------------------------------------23
23
Balance sheet-------------------------------------Statement; of operations
-----------------------23
V. Federal Savings and Loan Insurance Corporation -----------------25
Insured institutions---------------------------------25
25
Operations of the Insurance Corporation---------------Insurance settlements
-----------------------27
Operations of insured institutions in default ------------29
VI. Home Owners' Loan Corporation ----------------------------30
General operations-------------------------------------30
32
Status of accounts -------------------------------------Accounts terminated-- ------32
Mortgage and vendee accounts -----------------------32
Properties acquired, including those subject to redemption 33
Property accounts--------------------------------33
Financial statements-----------------------------34
VII. United States Housing Corporation-----------------------------36
List of exhibits----------------------------------------------37
Exhibits ----------------------------------------------39
THIRTEENTH ANNUAL REPORT OF THE FEDERAL
HOME LOAN BANK ADMINISTRATION
I. THE YEAR IN RETROSPECT
During the fiscal year 1945, as in previous years, the war continued
to be the primary influence affecting the national economy. How
ever, one of the Nation's two major antagonists surrendered in May
and the other in September. The influence of the approaching end of
hostilities was foreshadowed in the last quarter of the fiscal year.
Residential construction reached its lowest wartime point during
the reporting period. Each of the first three quarters of the 1945
fiscal year in turn established a new record for the smallest amount of
residential construction during the wartime period. However, the
War Production Board's Construction Limitation Order L-41 was
relaxed in some important respects at the close of May 1945. The
effects of this step and of the relaxation in priorities for building which
occurred about the same time were quickly apparent.
The number of new nonfarm dwelling units started increased from
its lowest wartime point of 29,400 in the third quarter of the fiscal
year 1945 to 60,300 in the last quarter. The number of units started
during the last quarter of the reporting period was one-fourth greater
than the amount started during the corresponding quarter of the
previous fiscal year.
The rise in construction continued after the close of the reporting
period. In July 1945 for the first time since October 1943 there were
more than 4,000,000 persons employed in construction. In October
of 1945 the Construction Limitation Order L-41 was terminated.
Higher incomes during the wartime period, the movement of
workers to large urban areas, and wartime restrictions on building
have caused tremendous upward pressure on real-estate values. The
prices of residential properties rose in nearly every section of the
country and there was pressure on lending institutions to increase
loans made to finance the growing volume of home purchases.
Because of the uncertainty of future real-estate prices, the Federal
Home Loan Bank Administration emphasized the danger of these
conditions and urged the adoption of adequate safeguards by home
mortgage lenders. This action put member institutions of the Bank
System on notice of inflationary trends and gave our supervisory
authorities warning that greater vigil must be exercised to avoid a
spiral of overvaluation and overlending.
Through the regional banks of the Federal Home Loan Bank System,
our lending institutions are being cautioned to refrain from follow
ing blindly the rising market and cautiously resist the pressure to
push their loans up to the maximum permissible percentage of value.
In view of the accumulated savings in the hands of buyers, our mem
2
FEDERAL HOME LOAN BANK ADMINISTRATION
ber institutions are encouraged, in their relationship to prospective
borrowers, to require that they make larger than normal down pay
ments on current purchases and heavier than normal payments in
the early stages of amortization so that later, when income and eco
nomic conditions may be less favorable, the dangers of loss of property
through foreclosure may be minimized.
SERVICEMEN'S READJUSTMENT ACT OF 1944
Promptly after the Servicemen's Readjustment Act of 1944 became
a law on June 22, 1944, the officials and staff of the Federal Home Loan
Bank Administration initiated arrangements to set in motion the
necessary machinery within the Federal Home Loan Bank System
4o expedite and effectively assist in the proper administration of the
provisions relating to home loans to returning war veterans.
The Federal Home Loan Bank Administration realized the obvious
intent of the Congress that every veteran made eligible under such
legislation for the benefits thereof should have available to him in
every community, through established lending sources, readily
obtainable financing on liberal, economical terms, for financing the
purchase, construction, or reconditioning of a home. In order to
accomplish this effectively and to provide ample funds in the large
volume which it was anticipated would be required soon, it was
obvious that enabling facilities must be available to all types of
mortgage lenders for participating in the program.
The Federal Home Loan Banks and their member institutions,
together with other public and private home-financing agencies, placed
their services at the disposal of the Veterans' Administration for the
purpose of aiding in the prompt accomplishment of the objectives of
the law. Various committees, comprising some of the members of
the Federal Savings and Loan Advisory Council, presidents of the
Federal Home Loan Banks, the United States Savings and Loan
League, and the National Savings and Loan League, came to Wash
ington at the invitation of the Federal Home Loan Bank Commissioner
to advise with the officials and staff of the Federal Home Loan Bank
Administration in their deliberations on the subject. Numerous
conferences were also .held with officials of the National Housing
Agency and the Federal Housing Administration. The chief objective
of these discussions was the development of operating regulations
which would enable thrift and home-financing institutions to make
GI loans promptly and efficiently, in order to afford veterans the full
advantages contemplated by the act. As a result, regulations and an
operating plan were agreed upon, representing the consensus of
opinion of the several committees.
Another objective of the Federal Home Loan Bank System was that
of meeting the pressing need for an educational program whereby all
available information could be given to officers, directors, and em
ployees of savings and loan associations throughout the country,
enabling them to advise home-seeking veterans intelligently and
accept their applications for loans.
Upon adoption by the Veterans' Administration the operating
regulations were transmitted by the Federal Home Loan Bank Ad
ministration to the Federal Home Loan Banks and their member insti
tutions, accompanied by a letter urging immediate study thereof and
FEDERAL HOME LOAN BANK ADMINISTRATION
3
the initiation of plans for the making of GI loans. A summary of
such regulations was also printed in the official monthly publication
of the Federal Home Loan Bank Administration.
Acting under its statutory authority as the supervisory body for
federally chartered home-financing institutions (Federal savings and
loan associations) the Federal Home Loan Bank Administration pro
ceeded to make the necessary arrangements to enable such institutions
lawfully to make loans under the act. On October 19, 1944, the
regulations for Federal associations were so amended as to provide a
mechanism by which such associations could make loans up to 100
percent of value- in transactions bearing the guaranty undei the law.
A liberalizing amendment to operating regulations was also issued
by the Federal Savings and Loan Insurance Corporation, for'the
institutions whose accounts it insures.
In the meantime, through the efforts of State supervisors and trade
organizations in the savings and loan field-local, State, and na
tional-steps were taken toward obtaining the necessary powers,
chiefly by legislation, for State-chartered associations to participate
in the GI loan program. As the result of these efforts, enabling laws
have been passed in many State legislatures.
On December 7, 1944, the Veterans' Administration published a
Hand Book for Lenders-Home Loans, copies of which were mailed
by the Federal Home Loan Bank Administration to the Federal Home
Loan Banks and all member institutions. Leaders and recognized
groups in the home-financing industry, alert to the need for making
local institutions thoroughly familiar with the regulations and pro
cedures for GI loans, vigorously entered into an educational drive.
Through local and sectional meetings, question and answer sessions,
and many articles and news letters in the trade press, information
concerning the meaning and intent of the act, and the application
of the regulations were widely disseminated. The field officers of the
Veterans' Administration generously and efficiently assisted in this
educational program.
As exponents of home ownership and specialists in the problems of
financing, savings and loan associations were eager to support the
loan program for veterans. So effective were their preparations in
some areas that associations soon became recognized as sources of
information, not only by veterans and their families but by all interests
concerned in home construction and 'the making -of loans. Many
savings and loan associations issued their own pamphlets explaining
to veterans how to apply for loans and the considerations which should
guide thcm in the purchase or construction-of a home. Thus, head
way was made on a wide scale in providing safeguards for both bor
rowers and lenders and in dissipating widely held misconceptions of
the benefits conferred by the law. Large numbers of associations
embarked on a campaign of secondary education by explaining the
GI bill to their many thousands of individual members through
circulars, house organs, or letters. Other associations have sponsored
meetings for the information of the general public or assigned speakers
to other gatherings.
In view of their whole-hearted cooperation and diligent attention
to the special conditions surrounding the making of GI home mortgage
loans, it was not long before savings and loan associations began to
make such loans. The first mortgage under guaranty of the Veterans'
H. Doc. 44, 80-1---2
4
FEDERAL HOME LOAN BANK ADMINISTRATION
Administration was completed by a member savings and loan asso
ciation located in Washington, D. C. It is conservatively estimated
that of an approximate total of $170,000,000 of GI home loans made
through November 30, 1945, 85 percent of such loans were con
summated by savings and loan associations.
RESIDENTIAL CONSTRUCTION AND THE REAL-ESTATE MARKET
Residential- construction.-Residential construction during the re
porting period continued the decline, which started with the issuance
of the War Production Board's Construction Limitation Order L-41,
in the spring of 1942. This is shown by the table of new nonfarm
dwelling units presented as exhibit 1 of this report.
Dciring the fiscal year 1945 the number of nonfarm dwelling units
started was approximately 161,500, compared with 247,000 during the
1944 fiscal year and 391,700 during the 1943 fiscal year. The decline
was greater in publicly than in privately financed units. The number
of publicly financed units decreased from 196,829'in the 1943 fiscal
year to 69,248 in the 1944 fiscal year and 25,573 in the 1945 fiscal year,
a decrease of 87.0 percent in the 2-year period. The corresponding
decline in privately financed units was from 194,871 in the 1943
fiscal year to 177,752 in the 1944 fiscal year and 135,927 in the 1945
fiscal year, a decrease of 30.2 percent during these 2 years.
Building costs.-The wholesale price index of building materials as
reported by the Bureau of Labor Statistics was 131.1 in June 1945,
which represented an increase of 1.7 points during the fiscal year 1945
as compared with an increase of 5.9 points during the fiscal year 1944.
The Federal Home Loan Bank Administration's index of labor and
material costs for constructing a standard six-room frame house rose
during the same period. Retail material prices as reflected in this
index rose from 131.4 on June 30, 1944, to 133.5 1 year later. The
rise in labor costs was even more rapid, from an index of 139.4 at the
beginning of the reporting period to 143.9 1 year later. Most of the
change occurred during the first half of the 1945 fiscal year. The index
of total building cost, which includes both labor and material, increased
from 134.1 to 137.0 during this period. Exhibit 2 presents these
indexes monthly for the 1944 and 1945 fiscal years.
Foreclosures.-One indication of the growing strength of the real
estate market in recent years has been the rapid decrease in nonfarm
foreclosures. This is shown in the following table:
Number of nonfarm foreclosures
Fiscal year:
1941------------------------------------------------------69,
1942------------------------------------------------------1943--------------------------------------------------------33,
1944--------------- ------------------------------1945--------------------------------------------------
169
49, 890
402
20, 710
16, 142
Foreclosures during the 1945 fiscal year decreased 22.1 percent as
compared with the preceding year. The greatest proportionate
decreases occurred in such Western States as Idaho (where foreclosures
dropped 90.0 percent),-Montana (a decrease of 84.6 percent), Nevada
(636.7 percent), Iowa (63.8 percent), and Minnesota (61.1 percent).
The Federal Home Loan Bank Districts which experienced the greatest
decrease in nonfarm foreclosures were the Des Moines district (where
foreclosures declined 43.8 percent) and the Portland district (36.5
percent). Exhibit 3 presents the number of nonfarm real estate fore-
FEDERAL HOME LOAN BANK ADMINISTRATION
5
closures during the last two fiscal years by Federal Home Loan Bank
Districts and by States.
Real estate overhang.-The residential real estate owned by lending
institutions, once an important factor in the real-estate market, has
become alipost negligible. The estimated book value of residential
real estate owned by operating savings and loan associations, com
mercial banks, mutual savings banks, life insurance companies, and
-the Home Owners' Loan Corporation decreased from $553,780,000 on
December 31, 1943, to $255,292,000 1 year later, a decrease of 53.9
percent. Of the decline of $298,488,000 during the calendar year 1944
in real estate owned by institutional lenders, $83,439,000 was effected
in the real-estate holdings of the Home Owners' Loan Corporation
alone. By the end of the 1944 calendar year, the real-estate holdings
of the HOLC had been reduced to $10,701,000 and the Corporation
was becoming a negligible factor in the total of residential real estate
owned by financial institutions. The decrease of 88.6 percent during
the year in the real estate owned by the Corporation was greater than
that of any type of private institutional lender.
Despite the liquidation in institutionally owned real estate which
has occurred in recent years, each type of private institutional lender
decreased its real-estate holdings proportionately more during the
calendar year 1944 than in the previous reporting period. The most
rapid decrease, that of the mutual savings banks, resulted in the real
estate owned by the banks being reduced from $80,605,000 to
$36,398,000. This was a decline of 54.8 percent compared with the
decrease of 43.3 percent during the preceding calendar year. Com
mercial banks and savings and loan associations followed with de
creases of 51.0 and 48.4 percent, respectively, in their real-estate
holdings. As in preceding years', the smallest percentage decrease of
real estate held by institutional lenders was that of the life-insurance
companies, with a decrease of 41.9 percent. The amount of residen
tial real estate owned by financial institutions is shown in exhibit 4.
The real-estate market has been strengthened substantially by this
rapid reduction in the residential real estate held by private institu
tional lenders, which is -either actively or potentially a threat to the
stability of the market. However, 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 1944.-A total of $3,830,000,000 of new
mortgage loans is estimated to have been written during the calendar
year 1944 on nonfarm one- to four-family dwellings. This compares
with $3,183,000,000 during the 1943 calendar year and $3,155,000,000
during the 1942 calendar year. The volume of new mortgage loans
in 1944 was slightly greater than in prewar 1941 and was the largest
volume of home mortgages written since 1929. This increase in the
volume of new mortgage loans occurred because a greater proportion
of existing houses were sold. A large volume of new mortgages was
needed to finance these purchases of existing homes. The amount
required was increased by inflationary price trends.
Exhibit 5 presents figures for the mortgage loans on one- to four
family nonfarm homes written by each of the major lending groups
during the years 1932 through 1944. Throughout this entire period,
6
FEDERAL HOME LOAN BANK ADMINISTRATION
savings and loan associations ranked first each year except for 1934
and 1935, the years of maximum HOLC lending. It will be noted
that savings and loan associations represented the major support of
the home mortgage market during the critical depression years before
the Home Owners' Loan Corporation commenced operations. In
1932 and 1933, for example, of the $1,825,000,000 of nonfarm home
mortgages written by all lenders except the Home Owners' Loan Cor
poration, which was just starting operations, $957,000,000, or 52.4
percent, of the loans were written by savings and loan associations.
During 1944 savings and loan associations wrote $1,454,000,000 of
new residential loans, or 38.0 percent of the total written during the
year., These mortgages made in 1944 represented an increase of
22.8 percent over 1943. This was a greater proportionate increase
in new loans written than for any other private institutional lender.
The "individuals and others" were the only mortgage lenders who
during the 1944 calendar year experienced a greater proportionate
increase in new mortgage loans written than did the savings and loan
associations. The new mortgage loans written by this group of
lenders increased in 1944 by 25.6 percent over the volume for 1943.
Gains made by mutual -savings banks and commercial banks and
their trust departments followed the savings and loan associations.
Each, during the 1944 calendar year, wrote 16.7 percent more residen
tial loans than in the previous year. Insurance companies followed
with an increase of 10.3 percent. These placed a total of $300,000,000
of residential loans during the 1944 calendar year.
The general lending activities of the Home Owners' Loan Corpo
ration ended in 1936, since when the Corporation has been liquidating
its loans and assets. In order to carry on this liquidation, it is neces
sary for the Corporation to take purchase money mortgages to finance
the sale of properties which it has beep forced to acquire. In addition,
when necessary, the Corporation makes advances to borrowers to
enable them to pay taxes or fire-insurance premiums or to make
essential repairs.
During the calendar year 1944, such purchase money mortgages and
advances by the Corporation totaled $31,000,000 as compared with
$54,000,000 during the calendar year 1943. This decrease resulted
largely from the fact that the Corporation has sold almost all of its
real estate and the acceptance of purchase money mortgages has
declined sharply.
On a fiscal-year basis, mortgage lending can be studied by means of
the mortgage-recording data which have been collected for a number of
years by the Federal Home Loan Bank Administration. Although
recordings cannot be taken as an absolute measure of new lending,
because they include changes in existing mortgage contracts as well as
new'mortgage 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 1945, mortgage lenders throughout the
Nation recorded 1,519,482 nonfarm mortgages of $20,000 or less in the
total amount of $4,991,680,000. In comparison, 1,385,487 nonfarm
mortgages of $20,000 or less were written in the amount of $4,334,
549,000 during the preceding fiscal year. Exhibit 6 presents a break
down of these figures, by types of lenders and by Federal Home Loan
Bank Districts and States.
7
FEDERAL HOME LOAN BANK ADMINISTRATION
Home mortgage debt.-Duringthe calendar year 1944 there was a con
tinuation oL the wartime decrease in the total outstanding nonfarm
home .mortgage debt. The high point in nonfarm home mortgage
debt was reached in 1941, the year which ended with Pearl Harbor.
At the end of that year the total outstanding mortgage debt on one- to
four-family dwellings was $20,095,000,000. Since then, this total has
been declining. During 1944, the nonfarm home mortgage debt de
creased from $19,542,000,000 to $19,528,000,000. This decrease of
only $14,000,000 compares with a decline of $366,000,000 in 1943 and
$187,000,000 in 1942. As in previous years, the Home Owners' Loan
Corporation was the most important factor in the drop in home mort
gage debt in 1944, when its outstanding balance of mortgages de
creased by $247,000,000. If the mortgage portfolio of the Corporation
is disregarded, the combined total debt held by all other lenders in
creased by $233,000,000.
The greatest increase in holdings of home-mortgage debt during
the calendar year 1944 was that of the savings and loan associations,
from $4,584,000,000 to $4,799,000,000, or by $215,000,000. In terms
of the total home-mortgage debt, the associations during the year
increased their holdings from 23.5 percent of the aggregate to 24.6
percent, and at the close of the year held a greater portion of the debt
than any other institutional lender. The mortgages held by the
savings and loan associations were exceeded only by those of the
miscellaneous .group which includes individual lenders and others.
At the end of the year these held 31.7 percent of the mortgage debt..
The miscellaneous group increased their holdings of mortgage debt
during the year by $100,000,000, which increase was seconi only to
the savings and loan associations, The insurance companies also
experienced an increase in home-mortgage holdings. Their holdings
rose from-$2,41C,000,000 to $2,458,000,000, or by $48 000,000.
All other institutional lenders experienced a decrease in holdings of
nonfarm home-mortgage debt. - The greatest decrease, other than
that of the Home Owners' Loan Corporation, was that of the fnutual
savings banks, whose holdings of home mortgages decreased from
$2,660,000,000 to $2,570,000,000, or by $90,000,000. The commer
cial banks had a decrease from $2,450,000,000 to $2,410,000,000.
A survey of estimated home-mortgage debt from 1932 to 1944, is
presented in exhibit 7. The debt held by each type of mortgagee at
the end of the last two calendar years is summarized in the follow
ing table:
Estimated balance of outstanding mortgage loans on nonfarm 1- to 4-family
dwellings
[Millions of dollars]
Dec. 31
Type of mortgagee
1943
Savings and loan associations-----------------------------------.
Insurance companies---------------------- -----------------Mutual savings banks -------------------------------- -Commercial banks---- ------------- --------------------Home Owners' Loan Corppration------------------------------Individuals and others ----------------------------------
Total----1 Revised.
-----------------
----------------------
1i4, 584
2,410
2,660
2, 450
1,338
-1944
Percent
4, 799
2,458
2, 570
2,410
1,091
6,100
+4. 7
+2.0
-3.4
-- 1, 6
-18. 5
6, 200
+1.6
119,542
19,528
-. 1
8
FEDERAL HOME LOAN BANK ADMINISTRATION
During the last 10 years there have been two opposite trends in
the volume of home-mortgage loans. From 1935 to 1944, there was
a substantial increase in the volume of mortgages insured by the
Federal Housing Administration. This increase and its distribution
by type of lender is shown in the following table.
Estimated balance of outstanding FHA-insured mortgage loans on nonfarm 1- to
4-family dwellings
[Millions of dollars]
Type of mortgagee
1935
Savings and loan associations------------....
.......---------------------------Life-insurance companies ..----------------------------------------Savings banks --...._---.---------------------Commercial banks .-----------------..
-
Home Owners' Loan Corporation .
Individuals and others.-----.
Total...---..
----
16
-6
5
66
------------------
---..
--.-- -
-
1944
Increase
347
1, 369
360
1,725
331
1, 363
355
1,659
-----------------
2
345
343
-----------
95
4,146
4,051
--------------------
From this table it can be seen that during this period there was a
total increase of more than $4,000,000,000 in insured mortgages.
Most of this increase was due to substantial investments made by
life-insurance companies and commercial banks, both of which types
of organization had to meet the problem of profitable use of large
increases in new savings. Prior to 1934, when marketable FHA
insured mortgages began to appear, life-insurance companies and
commercial banks had proportionately small investments in home
mortgages. With the advent of FHA, both life-insurance companies
and commercial banks increased their total holdings of insured mort
gages and their purchases of mortgages made initially by other types
of lenders. As is clear from the table, during the period when insured
home mortgages were increasing, there was an opposite trend in
uninsured mortgages, as is shown in the following table:
Estimated balance of outstanding uninsured mortgage loans on 1- to 4-family
nonfarm homes
tMillions of dollars]
1935
Type of mortgagee
Private:
3,277
1,275
2,845
1,123
------------Savings and loan associations--------Life-insurance companies .----------------------------------------------------------------Savings banks
------------------Commercial banks ---------------
Total public and private.-----..
,------------...----
-
4,452
1,089
2,210
685
Dollar
Percent
+1,175
-186
-635
-438
+35.9
-14.6
-22.3
-39.0
5,855
-143
-2.4
14,518
2,897
14,291
1,091
-227
-1,806
-1.6
-62.3
17,415
15,382
-2,033
-11.7
Individuals and others-----------------------------------5,998
Total private-----------------------------------------Public: Emergency relief financing 1------------
1944
1For a period of 3 years from June 13, 1933, through June 12, 1936, the Home Owners' Loan Corporation
took over from individuals and lending institutions more than a million delinquent loans having a refinanced
value in excess of $3,000,000,000. Of these, approximately 292,000 loans were made in 1935 and the first half
of 1936, for about $896,000,000. Inasmuch as these loans were made by an instrumentality of the Federal
Government, they, ol course, were not insured by the FHA and should be considered in a separate category
from loans made by private institutions whether insured or uninsured.
9
FEDERAL HOME LOAN BANK ADMINISTRATION
Despite increasing prosperity from 1935 to 1944, all types of lend
ing institutions except savings and loan associations gradually with
drew from the uninsured mortgage market. Lenders other than
savings and loan associations decreased their holdings of uninsured
mortgages by more than $3,000,000,000. This was offset to a sub
stantial degree by an increase of $1,175,000,000 of such mortgages by
savings and loan associations. Savings' and loan associations,I as
shown previously, represented the major private support of the
home-mortgage market during the depression.. This, together with
their readiness to continue and expand the writing of uninsured mort
gages during the last decade, indicates that one of the major functions
performed by the savings and loan associations has been to provide
continuous support of the home-mortgage market during periods of
depression and prosperity and regardless of special inducements such
as mortgage insurance. Throughout their history, dating back more
than 100 years, savings and loan associations have specialized ini
making loans on single and two- to four-family homes in urban and
nonfarm areas.
Private savings.-During 1944 the long-term savings of individuals
continued the rapid increase of previous years. The increase in
savings held in savings and loan associations, life-insurance policies,
savings deposits in banks, postal savings, and United States savings
bonds during the last few years is shown in the following table:
Increase in savings in selected media
Calendar year:
1941-----------------------------------------1942_--------------------------------__
1943 -----------------------------------------------1944-------------------------------
_
$4, 390,
9, 061,
15, 731,
20, 227,
000,
000,
000,
000,
000
000
000
000
A breakdown of the 1944 gain showing the increase in each of the
selected saivings media is presented in the following table. The dis
tribution of long-term savings from 1937 through 1944 and an explana
tion of the sources of these figures are presented in exhibit 8.
Volume of long-term private savings in selected savings media
[Millions of dollars]
Dec. 311943
Life-insurance companies ...------------------------------Mutual savings banks ..----------------------------Commercial banks --------------------------------Savingsand loan associations-------------------------Postal savings ----------------------------------
2 ,-percent postal savings bonds-.--------------------United States savings bonds --------------------------Total----I Revised.'
-----------------------
Increase
1944
31, 256
11, 707
116,864
5, 494
1,837
Amount
34,100
13, 332
21, 728
6, 305
2, 342
Percent
2, 844
1, 65
4,864
811
505
9.1
13.9
28.8
14.8
27. 5
83
82
-1
-1. 2
19, 574
29,153
9, 579
48. 9
86,815
107,042
20,227
23.3
10
FEDERAL HOME LOAN BANK ADMINISTRATION
As in the last few years; the greatest single increase in private
savings was that represented by the investment in- United States
savings bonds. The $9,579,000,000 increase in these bonds during
1944 was almost half of-the gain in total savings represented by the
table. During the year, the outstanding volume of United States
'savings bonds increased by 48.9 percent.
The next most rapid increase was that of 28.8 percent in deposits in
insured commercial banks. This was followed closely by an increase
of 27.5 percent in postal savings. Savings and loan associations
increased their holdings of savings by 14.8 percent and mutual savings
banks had a similar increase of 13.9 percent.
Private savings continued this rapid increase during the first half of
1945. United States savings bonds continued to absorb the greatest
proportion of these savings. This is indicated by the increase in out
standing savings bonds from a value of $29,153,000,000 on December
-31, 1944, to $32,682,000,000 on June 30, 1945, thus producing an
increase of $3,529,000,000 "during the first 6 months of 1945. 4These
figures do not include sales of F and G bonds, some of which are sold
to individuals.
Savings held by insured commercial banks increased almost as
rapidly during the first 6 months of 1945 as did savings bonds. The
Savings in insured commercial banks during this period increased from
$21,728,000,000 to $24,803,000,000, or by $3,075,000,000. - During the
same period, savings in mutual savings banks increased by
$1,046,000,000 and savings in insured savings and loan associations
rose by $453,000,000, from $4,334,000,000-to $4,787,000,000. Postal
savings increased by $318,000,000 during the first 6 months of 1945.
Savings by private individuals throughout the Nation have attained
an all-time high. This was caused by the increase in incomes resulting
from war production at a time when limitations on production for
civilian use have reduced the flow of goods which can be purchased.
Now that wartime restrictions are being rapidly eliminated, an
unprecedented total of savings -are available for purchases. Part of
these savings undoubtedly will be used to satisfy the pent-up desires
and need for new housing as millions of demobilized servicemen, war
workers, and others resume normal peacetime life.
II. FEDERAL HOME LOAN BANK ADMINISTRATION
The President of the United States, by Executive Order No. 9070,
dated February 24, 1942, established a National Housing Agency
under the direction of an Administrator. All Government agencies
relating to urban housing were placed in this organization. Tle
President's Executive order 4esignated the Federal Home Loan Bank
Administration as one of the three principal units which would
comprise the National Housing Agency. The Executive order
specified that the Bank Administration, under the direction of a
Commissioner, is to exercise the functions, powers, and duties which
the Federal Home Loan Bank Act, as amended, conferred unon the
former Federal Home Loan Bank Board.
The Federal Home Loan Bank System, the Federal Savings and
Loan Insurance Corporation, and the Home Owners' Loan Corpora
tion are the major components of the Federal Home Loan Bank
Administration. In addition, functions relating to the United States
Housing Corporation, which was formed during World War I for the
purpose of housing workers in congested war-industry areas, have
been administered in the Federal Home Loan Bank Administration
under the same Executive order of the President. During the 1945
fiscal year the final liquidation of the United States Housing Corpora
tion was completed by the Federal Home Loan Bank Administration.
In perfoirming its functions, the Federal Home Loan Bank Adminis
tration receives recommendations from the Federal Savings and Loan
Advisory Council. This Council, which was created by an amend
ment to the Federal Home Loan Bank Act, is authorized to confer with
the Federal Home Loan Bank Administration on general business
conditions and on special conditions which affect the Federal home
loan banks and their members and the Federal Savings and Loan
Insurance Corporation. Two meetings of this Council were held
during the 1945 fiscal year. A list of the members who served during
these meetings is given in exhibit 9.
ORGANIZATION
OF THE ADMINISTRATIVE
DEPARTMENT
As mentioned above, the major components of the Bank Adminis
tration are the Federal Home Loan Bank System, the Federal Savings
and Loan Insurance Corporation, and the Home Owners' Loan Cor
poration. Part of the personnel of the Federal Home Loan Bank
Administration render services to more than one of these agencies.
Before the 1945 fiscal year, most of this persbnnel was employed by
the Home Owners' Loan Corporation, which billed the Federal Home
Loan Bank System and the Federal Savings and Loan Insurance Cor
poration for the work performed for each of these by these employees
of the Home Owners' Loan Corporation.
11
H. Doe. 44. 80-1-----
12
FEDERAL HOME LOAN BANK ADMINISTRATION
On July 1, 1944, the Federal Home Loan Bank Administration
established an Administrative Department. The personnel which
served all three major components ,were transferred to this Depart
ment.
ADMINISTRATIVE
EXPENSES
The Federal Home Loan Bank System, the Home Owners' Loan
Corporation, and the Federal Savings and Loan Insurance Corpora
tion are each entirely self-sustaining and obtain no funds by any
appropriation out of the United States Treasury. The amount of
their administrative expenses is authorized annually, based on a
budget submitted in the customary manner through the Bureau
of the Budget to the Congress.
The expenses of the Administrative Department of the Federal
Home Loan Bank Administration are met by contributions from the
Home Owners' Loan Corporation, the Federal Home Loan Bank
System, and the Federal Savings and Loan Insurance Corporation.
The expenses are borne by these three organizations in proportion to
the time devoted by the Administrative Department to each. The
amount received by the Administrative Department from each of
these three agencies during the fiscal year 1945, together with the
disbursements of the Administrative Department are given in exhibit
10.
PERSONNEL OF THE BANK ADMINISTRATION
The number of employees in the major components of the Federal
Home Loan Bank Administration during the period from 1939 to 1945
is given in exhibit 11 attached. It will be observed that the total
number of employees of the Bank Administration decreased from
2,860 on July 1, 1944, to 2,211 on July 1, 1945. This decrease resulted
from the rapid liquidation of the assets of the Home Owners' Loan
Corporation.
III. FEDERAL HOME LOAN BANK SYSTEM
During the fiscal year 1945, the Federal Home Loan Bank System
experienced the most rapid growth in assets of any period in the history
of the System. The growth in assets of member institutions from
June 30, 1944, to June 30, 1945, by Bank Districts and by States, is
shown in exhibit 12. The following tabulation presents a summary of
the change in the number and approximate assets of member institu
tions, by type, during the reporting period.
Number and assets of member institutions of the Federal Home Loan Bank System,
June 80, 1944, and June 30, 1945
[Dollar amounts m millions]
June 30, 1945
June 30, 1944
Number
Savings and loan associations
Federal associations .---------------State-chartered insured member asso
__-------------.-.
ciations ......-Uninsured member associations-._-_
Number
Assets
Number
0
Assets
+$647
1,465
$2, 881
1,465
$3, 528
992
1, 214
1,696
1, 385
1,002
1,189
2,015
1,471
+10
-25
+319
+86
-15
+1,052
5,969
3,656
7.014
22
21
464
414
25
15
567
389
3,714
6,840
All member associations....-------------3,671
Other member institutions.
Savings banks-----------------Insurance companies..-------.----All member institutions-....----........
Assets
Net change
3,696
7,970
+103
-25
+3
-6
+1, 130
-18
SALE OF WAR BONDS
Throughout the war, the member institutions of the Bank System
have devoted much time to the sale of war bonds to the public. In
addition, a substantial portion of the funds of these institutions have
been invested in war bonds. Because the Fifth War Loan drive
covered the months of June and July 1944, while the Seventh War
Loan drive covered the period April to July 1945, inclusive, figures
for war-bond purchases are available for the 12-month period ending
July 31, 1945, rather than for the 1945 fiscal year.
Reporting member institutions purchased $1,242,353,000 of war
bonds for their own account during this 12-month period and, at the
same time, sold $343,588,000 of war bonds to the public. The pro
portion of the assets of all reporting member institutions which were
invested in Government obligations rose from 23 percent on July 31,
1944, to 30.2 percent on July 31, 1945.
LENDING
ACTIVITY
OF REGIONAL
BANTS
On June 30, 1945, the Federal Home Loan Banks had $131,665,985
of advances outstanding. This was only slightly greater than the
total of $128,277,546 one year before. During the fiscal year 1945, the
13
14
FEDERAL HOME LOAN BANK ADMINISTRATION
Federal Home Loan Banks advanced $232,947,723 to member institu
tions, an increase of 4.7 percent over the total advances made during
the previous reporting period.
Although advances during the 1945 fiscal year were only slightly
greater than the total for 1944, the repayments of $229,559,284 for
the fispal year 1945 were 24.5 percent greater than the total for 1944.
Throughout the entire period of their operations to June 30, 1945, the
Federal Home Loan Banks advanced $1,480,728,803. Of this $1,349,
062,818 had been repaid at the close of the fiscal year 1945.
The ratio of short-term advances of 1 year or less to total out
standing advances continued, during the fiscal year 1945, the increase
which had characterized previous years. These advances rose from
51.3 percent of all advances on June 30, 1943, to 75.8 percent on June
30, 1944, and to 88.7 percent on June 30, 1945. The proportion of
secured advances to all advances was practically unchanged at the
end of the 1945 fiscal year, being 82.6 percent on June 30, 1945, com
pared with 82.7 percent 1 year previous. The advances made by
the Federal Home Loan Banks during the fiscal year 1945 are shown
in exhibit 13, together with a summary of lending activity for previous
years.
The Federal Home Loan Banks had no borrowers who were more
than 30 days delinquent on their indebtedness as of-June 30, 1945.
Moreover, no member borrower was in liquidation at that time.
During the reporting period, as in previous years, the indebtedness
of Federal savings and loan associations represented the greater pro
poition of the outstanding advances of the Federal Home Loan Banks.
On June 30, 1945, the outstanding advances of the banks were divided
as follows:
Federal savings and loan associations -------------------------- $98, 000, 000
Insured State-chartered associations --------------------------- 26, 500, 000
5, 100, 000
Uninsured State-chartered associations ------------------------Insurance companies----------------------------------------2, 100, 000
During the reporting period, the effective interest rates of the
banks for advances to members remained largely unchanged. Rates
of interest on advances to members are established by the board of
directors of each Bank, within the range established by the Federal
Home Loan Bank Administration, which at present permits a maxi
mum of 3 percent. Exhibit 14 gives the effective interest rates
charged on advances by each of the Federal Home Loan Banks as of
July 1, 1945.
MEMBERS'
DEPOSITS
Deposits of members and applicants for membership in the Federal
Home Loan Banks increased from $21,388,388 on June 30, 1944, to
$45,370,629 one year later. Both time and demand deposits increased
sharply. Because demand deposits were at an already low level, the
percentage increase was greater in these demand deposits, which rose
from 11.4 percent of members' deposits on June 30, 1944, to 21.8
percent on June 30, 1945.
The Federal Home Loan Banks pay interest on time deposits remain
ing 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. On June 30, 1945, the New York and Los Angeles
FEDERAL HOME LOAN BANK ADMINISTRATION
15
banks were paying interest on members' time deposits at the rate of
1 percent per annum, while all of the other banks were paying interest
at the rate of one-half of 1 percent. In addition to the latter, the
Pittsburgh, Cincinnati, and Indianapolis Banks offered a 6-month
time deposit service bearing three-fourths of 1-percent interest per
annum.
DEBENTURE
FINANCING
On June 30, 1945, there was $50,000,000 of consolidated Federal
Home Loan Bank debentures outstanding. This was a slight decrease
from the total of $58,000,000 at the beginning of the 1945 fiscal year.
These consolidated Federal Home Loan Bank debentures represent the
joint and several obligations of all the Banks and are not guaranteed
by the United States Government either as to principal or interest.
It is the policy of the Bank Administration to issue such debentures
only when the cash available in the 12 Federal Home Loan Banks
is deemed insufficient to meet anticipated requirements. Since the
beginning of operations, the Banks have issued an aggregate of
$624,000,000 of debentures. Of these, $574,000,000 has been retired
and/or refunded at maturity, thereby leaving $50,000,000 of deben
tures outstanding, as indicated previously.
FINANCIAL
STATEMENTS
A statement of condition of the 12 Federal Home Loan Banks both
on an individual and on a consolidated basis is presented in exhibit 15.
The largest change which is shown by this statement for the fiscal year
1945 is the increase of $28,000,000 in the United States Government
obligations held by the Banks. In addition, deposits by members in
the Banks increased approximately $24,000,000.
Additional funds which were obtained by the Banks during the 1945
fiscal year were primarily from two sources. The most important
was represented by the increase of $24,000,000 in members' deposits.
In addition, the capital stock and surplus of the Banks increased by
approximately $10,000,000. The $34,000,000 received in this way
was used (1) to purchase $28,000,000 of Government obligations,
(2) to decrease outstanding debentures by $8,000,000, and (3) to in
crease outstanding advances to members by $3,000,000, which resulted
in a $5,000,000 decreas9 in cash during the period.
For the first time since the formation of the Federal Home Loan
Banks there was a decrease during the fiscal year 1945 in the Federal
Home Loan Bank stock owned by the United States in the name of the
Reconstruction Finance Corporation. 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
Banks shall apply annually to the payment and retirement of the shares of the
capital stock held by the United States, 50 percent of all sums thereafter paid
in as capital until all such capital stock held by the United States is retired
at par.
During the 1945 fiscal year the, outstanding stock in the Federal
Home Loan Banks increased by $7,736,050, which was 18.8 percent
more than the increase of $6,514,500 during the preceding fiscal year.
With this increase in the outstanding stock of the Banks, the stock
16
FEDERAL HOME LOAN BANK ADMINISTRATION
owned by member institutions in the Federal Home Loan Bank of
Indianapolis became greater than the stock owned in that Bank by
the United States. Consequently, in conformity with the statutory
provision, $231,100 of the stock owned by the United States in the
Federal Home Loan Bank of Indianapolis was retired on January
2, 1945.
On January 2, 1946, there will be a further retirement of stock in
the Indianapolis Bank because of the increase during the calendar
year 1945 in the stock owned in the Bank by member institutions.
As of June 30, 1945, the stock holdings of member institutions had
increased to the point where $270,200 would have to be used in 1946
to retire stock in the Indianapolis Bank owned by the United States.
This amount will be increased to approximately $500,000 because of
the purchase of Bank stock by members during the second half of the
calendar yeaKr 1945.
In addition, shortly after the close of the fiscal year 1945, purchases
by member institutions of stock in the Federal Home Loan Bank of
Cincinnati had reached the point where some of the stock in this Bank
owned by the United States would have to be retired on January
2, 1946.
The capital structure of the 12 Federal Home Loan Banks on June
30, 1945, is summarized in the following table:
Capital:
Member institutions (subscribed) ---------------------Less: Unpaid subscriptions ---------------------------
$69, 207, 500. 00
5, 000. 00
Total---------------------------------------------69, 202, 500. 00
U. S. Government-now owned by RFC (fully paid)---- 124, 509, 900. 00
Total paid in on capital stock------------------------193, 712, 400. 00
Surplus:
Reserve as required under sec. 16 of the act------------Reserve for contingencies-----------------------------Und
8, 915, 670. 72
2, 733, 815. 34
Total surplus--------------------------------------11, 649, 486. 06
ided profits- ---------------------------------------- 8, 053, 133. 48
Total surplus and' undivided profits- ----------------
19, 702, 619. 54
Total capital--------------------------------------
213, 415, 019. 54
During the fiscal year 1945, the reserves and undivided- profits of
the Federal Home Loan Banks increased to the following:
June 30, 1944
Reserve required by sec. 16 of act------------....------------------Reserve for contingencies
--------------------------------------------------------------------Undivided profits..----.
Total---
-----------------------------------------
June 30, 1945
$8, 046,193 63
2,392,154. 21
7,063,921.17
$8, 915, 670. 72
2, 733, 815.34
8, 053,133. 48
17, 502,269.01
19,702,619.54
Exhibit 16 presents a study of the surplus and undivided profits of
the Federal Home Loan Banks for the fiscal year 1945.
The profits and losses of the Federal Home Loan Banks for the fiscal
year 1945 are shown in exhibit 17. The consolidated gross income of
the Banks during the year totaled $6,379,141, an increase of 13.2
percent from the consolidated gross income of $5,634,042 during the
FEDEIRAL HOME LOAN BANK ADMINISTRATION
17
previous fiscal year. Operating expenses also increased but to a
lesser extent than income. During the fiscal year 1945, operating
expenses were $2,017,145 as contrasted with $1,842,413 during the
previous reporting period. After allowance for nonoperating charges,
total consolidated expenses increased from $1,863,156 during the
fiscal year 1944 to $2,031,756 one year later. As a result, the net in
come of the Banks rose from $3,770,886 during the 1944 fiscal year to
$4,347,385 during the 1945 fiscal year, or by 15.3 percent.
During the 1945 fiscal year, the Federal Home Loan Banks declared
a total of $2,121,580 of dividends, slightly more than the $2,096,846
declared during the preceding fiscal year. Of the dividends paid
during 1945, $1,380,395 was paid to the Reconstruction Finance Cor
poration and $741,185 to member institutions. Since the beginning
of their operations through June 30, 1945, the 12 Federal Home Loan
Banks have paid a total of $24,528,554. Of this, $18,336,955 was
paid on the stock subscribed by the United States and $6,191,599
was paid on stock owned by member institutions.
INTEREST
AND
DIVIDEND
RATES
During the reporting period there was a continuation of the down
ward trend in interest rates which has resulted in a reduction in the
interest rates of mortgage loans and in the dividends paid on the
shares of savings and loan associations. The financial records of all
member savings and loan associations of the Bank System indicated
that the average yield on mortgage loans held by these associations
decreased from 5.77 percent in 1942 to 5.58 percent in 1943, and to
5.48 percent in 1944. Similarly, the dividends paid by the associa
tions decreased from 3.08 percent of average outstanding share capital
in 1942 to 2.85 percent in 1943 and to 2.63 percent in 1944.
EXAMINATION
AND
SUPERVISION
The Congress has charged the Federal Home Loan Bank Adminis
tration with the responsibility of examining and supervising Federal
savings and loan associations. Examinations of insured State
chartered associations in most instances are conducted jointly with
the respective State departments, and the supervision of these insti
tutions is conducted cooperatively with those departments.
It will be observed, therefore, that since the number and assets of
associations whose accounts are insured by the Federal Savings and
Loan Insurance Corporation have been steadily increasing, the work
of the Examining Division, the Chief Supervisor's Office, and the
Supervisory Agents has expanded.
In addition to the annual supervisory examination of approxi
mately 2,500 insured institutions, the Examining Division makes an
examination of every applicant for insurance of accounts.
ADMINISTRATIVE
EXPENSES
Funds to defray the administrative expenses of the Federal Home
Loan Bank System are obtained by semiannual assessments upon the
Federal Home Loan Banks, by reimbursement of the cost of services
rendered to the Federal Savings and Loan Insurance Corporation
18
FEDERAL HOME LOAN BANK ADMINISTRATION
and the Home Owners' Loan Corporation, and by fees collected from
the institutions in whose behalf examination expenses have been
incurred. Expenses falling within the latter category represent the
greater portion of the administrative expenses of the Federal Home
Loan Bank System. It follows that the greater portion of adminis
trative expense' funds are obtained from the institutions in whose
behalf examining services are rendered.
During the fiscal year 1945, total receipts of the Federal Home
Loan Bank System were $1,539,481 as compared with $1,418,105 in
the preceding fiscal year. A cash balance of $289,216 was carried
over at the beginning of the fiscal year 1945. During the reporting
period, disbursements for administrative expenses totaled $1,549,101
as compared with $1,538,008 in the preceding reporting period. On
June 30, 1945, the cash balance was $279,597.
A statement reflecting the administrative obligations, by types,
incurred by the Federal Home Loan Bank System during the fiscal
years 1944 and 1945 is presented in exhibit 18.
Actively employed personnel of the Federal Home Loan Bank
System totaled 324 on July 1, 1945. Of this total, 217 employees
were on the staff of the Examining Division.
IV. SAVINGS AND LOAN ASSOCIATIONS *
In the United States, funds to build and buy homes are derived
largely from the savings of the American people. The greater portion
of the savings used for this purpose are first accumulated in savings
and loan associations, mutual savings banks, life-insurance companies,
and commercial banks.
For the first three of these types of thrift and home financing
institutions, the Federal Home Loan Bank System acts as a. central
credit reserve system. The Federal Home Loan Bank Administration
performs additional functions for savings and loan associations. The
Bank Administration, for example, charters' and supervises the
Federal savings and loan associations. One of the component units
of the Bank Administration is the Federal Savings and Loan Insurance
Corporation which insures the safety of investments in all Federal
associations and such State-chartered associations as apply and
qualify for insurance.
FEDERAL HOME LOAN BANK DISTRICTS
There are 12 Federal Home Loan Banks.
For purposes of the
Federal Home Loan Bank System the Nation has been divided into
12 Federal Home Loan Bank Districts in each of which is located a
Federal Home Loan Bank.
The Banks make credit and deposit
facilities available to associations within their Districts.
The names
and addresses of the 12 Federal Home Loan Banks and the area served
by each are given in exhibit 19. The operations of these Banks have
been discussed in the previous chapter
NUMBER AND ASSETS
The savings and loan associations which are members of the Federal
Home Loan Bank System have been increasing rapidly in total
resources, as shown in the following table:
Assets
[Thousands of dollars
Date
Date
June
June
June
June
June
June
June
June
30, 1938----------------------------30,1939----------------------------30, 1940----------------------------30, 1941----------------------------30, 1942..............---------------------------30, 1943-----...........-----------------------30,1944----------------------------30, 1945.-----------------------------
All member
savings and
loan associations
All Statechartered
insured associations
All Federal
associations
3,704,259
3,935,641
4,232,681
4, 626, 920
4,885,049
5,249, 414
5,962,319
7.013,906
769,827
899,654
983, 367
1, 131,625
1,255,307
1,454, 920
1,702,292
2,021,536
1,210,744
1,439,988
1,725,817
2,028,138
2,205,921
2,426,079
2,881,276
3,528,027
Uninsured
nonmember
o
r
as c
2,113,806
1,943,049
1,957, 681
1,292, 245
1,170,926
1,061,147
1,001,640
1.016, 706
I Estimated.
NOTE.-Figures for State chartered insured associations in this and the following tables include 4 insured
associations which are not members -of the Federal Home Loan Bank System
On June 30. 1945. these
associations held total assets of $6,394,100
*As here used the term "savings and loan assoeiations" mincludes cooperative banks and homestead
associations.
19
H. Doc. 44, 80-1---
20
FEDERAL HOME LOAN BANK ADMINISTRATION
Total assets of all member associations increased during the fiscal
year 1945 by $1j051,587,000, or 17.6 percent. Of the increase,
$646,751,000 represented the growth in Federal savings and loan
associations. Insured State-chartered savings and loan associations,
including the four which are not members of the Federal Home Loan
Bank System, increased by $319,244,000 in total assets. Federal
associations grew more rapidly than did other types. For example,
their growth during the reporting period was 22.4 percent compared
with a growth of 18.8 percent for all State-chartered insured associa
tions.
Uninsured savings and loan associations which are not members of
the Bank System have been decreasing in total resources for several
years. During the reporting period, however, uninsured nonmember
associations reversed this trend. However, the growth was limited to
$15,066,000, or 1.5 percent.
Although total assets of members of the Federal Home Loan Bank
System have increased substantially, the number of member savings
and loan associations has declined from the maximum which was
attained in 1938, largely because of mergers and consolidations. The
decrease in number of associations since June 30, 1938, is shown in the
following table:
Number
All member
All State
and
savings
loan associations
chartered
insured
associations
All Federal
associations
nonmsember
associations I
1938------------------------ ----------......
3, 909
1939----------------------------------........3,897
1940--------...........------------------------3, 865
1941---------------------------------3,798
1942---------------.----------------3,772
1943----------------------------------3,729
1944-----------------------------------3,671
1945---------------------------------3,656
681
790
816
861
910
960
996
1,006
1,337
1,380
1, 421
1,452
1,464
1,488
1,465
1,465
5,651
4, 474
4,007
3,341
3,1'01
2,757
2, 580
2,624
Date
June 30,
June 30,
June 30,
June 30,
June 30,
June 30,
June 30,
June 30,
1 Estimated
During the 1945 fiscal year the number of member associations
decreased from 3,671 to 3,656 as a result of the termination of member
ship of 42 associations, while only 27 were admitted to membership in
the System. The number of State-chartered insured associations
continued the growth characteristic of recent years with a net increase
of 10 State-chartered insured associations.
The number of Federal savings and loan associations has stabilized,
in part because of wartime conditions. During the 1945 fiscal year,
the 7 Federal associations which withdrew were exactly balanced
by 7 additional Federal associations, the total number remaining
unchanged at 1,465. Of the seven associations to which new Federal
charters were granted, all were of the converted type. The folowing
table shows the change in the average size of savings and loan associa
tions in recent years.
21
FEDERAL HOME LOAN BANK ADMINISTRATION
Average stze of associations
All member
savings
loanand
Date
associations
June
June
June
June
June
June
June
June
30,
30,
30,
30,
30,
30,
30,
30,
All State-Uninsured
chartered
All Federal
insured
associations associations
nonmember
assocatons
associations
1938 .-----------------------------$947, 623$1, 130, 436
$905, 568 '
1939-----------..
-----------------1,009,916
1,138,803
1,043, 470
1940 ...............................----------------------------..
1,095,131
1, 205,107
1, 214, 509
1941----------------------------1,218,252
1,314,315
1,396,789
1942----------------------------1, 295, 082
1,379,458
1, 506, 777
1943-------... ---------------1,407, 727
1, 515, 542
1,652,642
1,709,129
1,966, 741
1944-------------..---------------1,624,168
1945----------...
........------------------1,918, 464
2,009,479
2,408, 210
$374, 059
434, 298
488, 5651
386,784'
377, 596
384,892
395,905
387,464
1 Estimated
Since June 30, 1938, the average size of member associations has
increased by 102.5 percent. This increase was caused by the rapid
increase in total resources and a slow decline in numbers. The rapid
growth in the size and financial strength of individual member asso
ciations promises well for the future of the Federal Home Loan Bank
System. In comparison, it will be seen that there has been little
net change since 1938 in the average size of nonmember uninsured
associations.
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 Federal savings and loan associations is growing more
rapidly than that of other member associations. The average size of
all Federal savings and loan associations has increased 165.9 percent
since 1938 as compared with an increase of 77.8 percent for all State
chartered insured associations and an increase of 102.5 percent for
member associations. In comparison, the net increase in average
size for uninsured nonmember associations has been only 3.6 percent
since June 30, 1938.
The major reason for the increase in total assets of savings and loan
associations has been the continuous and substantial flowof private
share capital into these associations. During the reporting period,
new share investments and repurchases of share capital proceeded at
the rate indicated in the following table:
iThousands
of dollarsl
New share
investments
1
All member savings and loan associations ....
All State-chartered insured associations---......
Al Federal associations....-------.....----.---------............
nonmember associations 1---..........----
Wiinsured
1Uninsured members and nonmembers estimated.
1, 928, 932
575, 624
1, 102, 032
159,154
Repurchases
Net increase
1,002, 522
300, 950
536, 682
104,155
926, 410
274, 674
565, 350
54,999
Ratio of re
purchases to
new invest
ments
Percent
52.
52. 3
48. 7
65.4
@
22
FEDERAL HOME LOAN BANK ADMINISTRATION
It will be observed that less than half of the new share invesfments
in Federal associations were offset by repurchases during the report
ing period. This proportion of new share investments offset by re
purchases was smaller for Federal associations than for either State
chartered insured associations or all member savings and loan
associations.
Member associations have used the private share capital which they
have received in part to retire the greater portion of their Govern
nent share investments. By authorizations of Congress in 1933,
1934, and 1935, the United States Treasury invested $49,300,000 .in
Federal savings and loanq associations; and the Home Owners' Loan
Corporation invested $223,856,710 in savings and loan associations.
These investments were used to increase the funds available for home
financing during the depression period. The outstanding balance of
these investments had been reduced to $51,256,050 at the beginning
of the reporting period. During the 1945 fiscal year, the outstanding
'balance was further reduced to $28,887,450, of which $2,654,500 repre
sented Treasury investment and $26,232,950 represented HOLC
investment.
OPERATIONS
IN
A WARTIME
ECONOMY
Lending operations.-In order to make labor and materials avail
able for the war effort, the War Production Board limited the con
struction of new homes largely to the war housing required by workers
anigrating to war-production centers and defense areas. Because of
this, new residential construction was severely limited during the war
and reached its low point during the 1945 fiscal year.
In consequence, construction loans made by member savings and
loan associations decreased from $114,705,000 during the 1944 fiscal
Lyear to $89,438,000 during the 1945 fiscal year. This decline of 22
percent in construction loans contrasted with an increase in every
tother category of home loans made by these associations. This can
be seen from the following table:
New loans made by member assocations, by purpose
of 6an
Purpose
Purpose of l6an
July 1, 1943, to July 1, 1944, to
June 30, 1944
June 30, 1945
Percent
change
$114, 705,000
----------------------------Construction--------...
849, 336,000
Home purchase....-------------------------------------147, 366,000
----------------------------------------Refinancing
Reconditioning..........--------------------------------------27,186,000
81, 570,000
----------------------------------Other purposes....---
$89, 438,000
1,065,605,000
164,137,000
28,987,000
105, 764,000
-22.0
+25. 5
+11.4
+6.6
+29. 7
1, 220,163,000
1,453,931,000
+19. 2
Total-------.......-..
............-----------------------------
During the fiscal year 1945, loans made to finance the purchase of
homes continued the rapid increase of recent years, moving up by
more than one-fourth over the previous reporting period to a total
of $1,065,605,000. These loans represented 73.3 percent of all home
leans made by member institutions during the fiscal year 1945.
This compared with 69.6 percent in the fiscal year 1944 and 60.9
percent in the fiecal year 1943. Exhibit 20 presents this shift in the
purpose for which mortgage loans have been made during the last
few years.
FEDERAL HOME LOAN BANK ADMINISTRATION
FINANCIAL
OPERATIONS
Balance sheet.-In exhibit 21 is presented the combined balance
sheet for all reporting member savings and loan associations for the
calendar years 1943 and 1944. During the 1944 calendar year, the
assets of State-chartered insured associations increased, as a percent
age of the total for all member associations, from 28 to 28.4 percent.
The assets of Federal savings and loan associations rose from 47.2
percent of the total to 49.3 percent.
As a result of the increased volume of new loans made, which has
been discussed previously, holdings of first-mortgage loans, including
interest and advances, by all member savings and loan associations
increased from $4,047,693,000 to $4,273,720,000 during the 1944
calendar year, an increase of 5.6 percent. The first-mortgage loans
held by Federal savings and loan associations increased by 7.4 percent
during this period, while those held by State-chartered insured associa
tions increased by 9.1 percent.
Real estate owned by member associations during the calendar
year 1944 declined by 47.0 percent from $69,512,000 at the beginning
of the year to $36,827,000 at the end of the year.
Cash held by all member savings and loan associations dropped
from $387,229,000 at the end of the 1943 calendar year to $347,348,000
1 year later, a decrease of 10.3 percent. Cash held by Federal savings
and loan associations decreased 9.1 percent in comparison with a
decline of 13.4 percent on the part of State-chartered insured associa
tions. Holdings of United States Government obligations continued
the rapid increase of recent years. For all member associations, the
growth was from $738,648,000 to $1,490,747,000, or 101.8 percent.
For State-chartered insured associations, the increase was 99.0 percent,
while the most rapid growth-was that of Federal savings and loan
associations whose holdings of United States Government obligations
r6se 116.2 percent.
The private repurchasable shares of member savings and loan
associations increased 17.3 percent compared with an increase of
22.3 percent for Federal savings and loan associations and 18.6 percent
for State-chartered member insured associations. Advances from
Federal Home Loan Banks and other borrowed money increased from
$127,017,000 on December 31, 1943, to $190,409,000 one year later, or
by 49.9 percefit. The advances and borrowings of Federal savings
andloan associations increased by 56.4 percent during the year, while
the advances and borrowings of State-chartered insured associations
increased by 44.9 percent.
For all member savings and loan associations, general reserves,
undivided profits, and surplus rose from $409,928,000 at the beginning
of the 1944 calendar year to $461,203,000 at the end of the year.
Despite this 12.5 percent increase, general reserves,,undivided profits,
and surplus decreased from 7.4 percent of total assets to 7.2 percent
during the calendar year. The reason for this was that total assets
were increasing more rapidly than were general reserves, undivided
profits, and surplus.
Statement of operations. -The combined statement of operations
for all reporting member associations, Federal associations, State
chartered insured associations, and State-chartered uninsured asso
ciations is presented in exhibit 22. The gross operating income of the
24
FEDERAL HOME LOAN BANK ADMINISTRATION
3,652 reporting member savings and loan associations totaled
$269,897,946. Of this, 84.14 percent was obtained as interest from
mortgage loans. For State-chartered insured associations, the per
centage was 82.84 percent; for Federal savings and loan associations,
83.97 percent; and for uninsured State-chartered associations, 86.07
percent. The proportion of income obtained from mortgage loans
continued to decrease slowly because of the fact that the asso6iations
are holding an increasing proportion of assets in the form of Govern
iment securities.
Of net income received, 70.47 percent was paid out as dividends by
the reporting member associations. State-chartered insured asso
ciations paid 71.31 percent of net income as dividends and State
chartered uninsured associations paid 75.29 percent. Federal asso
ciations paid 67.30 percent, the smallest percentage of net income as
dividends, thus permitting, comparatively, the largest transfers from
net earnings to reserves and undivided profits.
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. The purpose of
the Corporation was to encourage thrift and increase the volume of
savings in savings and loan associations through the protection of
such accounts up to $5,000. It is significant that proportionately the
savings of insured associations have increased more rapidly than
similar accounts in any other class of institutions and substantially
more funds are being provided by them for home mortgage lending.
From the flow of such funds'into the insured savings and loan associ
ations, it is apparent that the principle of insurance of accounts has
received wide public acceptance.
INSURED
INSTITUTIONS
The number of savings and loan associations insured by the Federal
Savings and Loan Insurance Corporation increased from 2,461 on
June 30, 1944, to 2,471 on June 30, 1945. The total assets of these
insured institutions rose from $4,583,568,000 to $5,549,563,000 during
the same period, while the number of investors protected by insurance
of accounts increased from 3,837,500 to 4,226,900. Exhibit 23 pre
sents the increase in the number and assets of insured associations
by Federal Home Loan Bank Districts and by States during the fiscal
year 1945. The operations of insured savings and loan associations
have been discussed previously in Chapter IV.
OPERATIONS
OF THE INSURANCE
CORPORATION
The statement of condition of the Federal Savings and Loan
Insurance Corporation as of June 30, 1945, is presented in exhibit 24.
Total assets on that date were $160,262,497 compared with $151,631,
510 one year before. At the end of the 1945 fiscal year the reserves
and surplus of the Corporation totaled $57,492,779, an increase of
$8,213,174 from the total of $49,279,605 at the beginning of the year.
On June 30, 1945, the surplus and reserves included a special con
tingency reserve of $30,000,000, which is equivalent to total cumula
tive dividends since June 30, 1935, on the capital stock of the Federal
Savings and Loan Insurance Corporation. This stock is held by the
Home Owner's Loan Corporation. The Federal Savings and Loan
Insurance Corporation has followed the practice of building surplus
and reserves as rapidly as possible to provide a cushion against future
losses.
That portion of a savings account which is m excess of $5,000 is not
insured. It is of interest to note that the percentage of insured
26
FEDERAL HOME LOAN BANK ADMINISTRATION
accounts to total accounts in insured associations has been increasing
steadily for the last few years. This is shown in the following table:
Ratio of insured savsng to gross savings
Fiscal year-
Gross savings
(share
liability)
Less accounts
in excess of
$5,000
1941-----------------------------------1942----------------------------------1943------ --------------------1944 ....................--- ---------------1945 ..--...........................------------------------.........
$2,664,793,000
2,944,986,000
3,414,154,000
3,992,731,000
4,830,699,000
$370,793,000
372,045,000
289,514,000
246,317,000
265,478,000
Amount insured (share
liability)
$2,294,000,000
2,572,941,000
3,124,640,000
3,746,414,000
4,565, 221,000
Percent
insurance
savings
86.09
87.37
91.52
93.83
94. 50
The total insured account liability of the Corporation -increased
from $3,746,414,000 on June 30, 1944, to $4,565,221,000 one year later.
In the event of liquidation, the assets of an insured association must be
used to pay creditor obligations before being applied upon share ac
count liability. If the creditor obligations are included with the
insured account liability of the Corporation, the total potential lia
bility on June '30, 1944, was $3,934,276,000, which increased to
$4,819,728,000 on June 30, 1945.
There was a potential liability of $30.60 on June 30, ,1945, for each
dollar of capital, reserves, and surplus of the Corporation. Not only
is it inconceivable that the total potential liability would ever become
an actual obligation but it should also be observed that in the event of
default the Corporation becomes subrogated to each account up to
$5,000. Because of this claim against the assets of insured institutions
in default any loss will be determined by the results of liquidation. To
date only seven insured members have been placed in liquidation and
the original estimated loss amounted to approximately $757,983, or
8.23 percent of the assets of the associations being liquidated. The
record of liquidation to this point indicates that the actual loss will be
nearer 4.16 percent of the assets.
The income of the Federal Savings and Loan Insurance Corporation
is obtained from admission fees, premiums paid by insured institutions,
and from interest on investments. All income received which is in
excess of the Corporation's expenses is allocated to reserves. The
losses of the Corporation from its insuring operations are charged to
these reserve accounts.
The Corporation earned insurance premiums totaling $5,080,796
during the fiscal year 1945 compared with $4,245,151 during the
preceding fiscal year. These premiums represent one-eighth of 1
percent each year on the accounts of the insured members of each
insured institution, plus all creditor obligations. Admission fees
totaled $6,528 during the 1945 fiscal year compared with $13,465
during the preceding fiscal year. Admission fees are computed 6n the
basis of 4 cents for each.$100 of an institution's accounts of an in
surable type
During the reporting period, the Federal, Savings and Loan Insur
ance Corporation received $3,549,465 from investments, compared
with $3,277,125 during the preceding year. The aggregate income of
the Corporation from these sources and from minor miscellaneous
items totaled $8,637,040 during the 1945 fiscal year, compared with
FEDERAL HOME LOAN BANK ADMINISTRATION
27
$8,669,635 during the 1944 fiscal year. The decrease was caused by
the fact that during the 1944 fiscal year the Insurance Corporiation
had a profit of more than $1,000,000 from the sale of securities.
The Corporation'st administrative expenses during the fiscal year
1945 totaled $430,191, which represented only a slight increase from
the total of $425,667 during the previous fiscal year. During the
reporting period, the Corporation's nonadministrative expenses were
$25,524. If the administrative and nonadministrative expenses are
deducted from gross income, the resulting net income of the Corpora
tion for the 1945 fiscal year was $8,181,325. The income and expense
of the Corporation for the 1944 and 1945 fiscal years is given-in
exhibit 25.
On July 1, 1945, the Corporation actively employed a total person
nel of 52. 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 dwn. At the present time, the Corporation
is able to maintain its administrative expenses at a figure lower thanL
the interest income from its invested reserves.
INSURANCE SETTLEMENTS
Insurance of accounts results in bringing about a greater degree of
stability in savings and loan operations by spreading the loss risk
according to accepted insurance principles. A certain number of
problem cases must arise in doing so, for losses are as much a part of
any normal insuring operation as is premium income.
In its 11 years of operation, 38 insured associations have experienced
difficulties requiring study by the Federal Savings and Loan Insurance
Corporation. The Corporation, after careful analysis, found that
three of these associations required no financial assistance and these
associations therefore continued normal operations. Of the remaining
35 associations, 28 received gross cash settlements from the Corpora
tion aggregating $5,374,125. These disbursements were used- to
prevent default of insured associations. Total recoveries of $183,862
were received by the Corporation through June 30, 1945. Accord
ingly, the net cash disbursements of the Corporation were $5,190,263.
Additional contingent commitments of $54,148 were still outstanding
on June 30, 1945, to one of these 28 associations.
Of the associations which have received contributions from the
Corporation, 19 continued operations as separate -units, 6 have
merged with other insured institutions, and 3 subsequently liquidated
voluntarily, paying all investors in full.. The remaining 7 of the 35
associations have been declared in default and placed in liquidation.
It is significant that the 19 associations which continued as inde
pendent units showed an increase in assets from approximately $51,
683,000 as of the dates of impairment to $78,172,500 as of June 30,
1945. Such progress reflects the substantial character of the results
of cash settlement and the benefits resulting from the avoidance of
liquidation.
It is estimated that the final losses which will be sustained by the
Insurance Corporation from contributions and commitments made
H. Doc. 44, 80-1-
5
28
FEDERAL HOME LOAN BANK ADMINISTRATION
on or before June 30, 1945, and from insured associations placed in
liquidation before that date will total $5,887,127.
Analysis of the difficulties encountered by the 35 associations with
which the Corporation has dealt indicates that adverse economic
conditions, coupled, with weak management, are by far the most
important causes of institutional difficulties. These two factors were
responsible for losses in 22 of the 35 cases. Outright dishonesty on
the part of association employees or breach of trust on the part of
management contributed to the difficulties experienced by the remain
ing 13 institutions.
The Corporation is authorized by statute to adopt several courses
of action with respect to an insured association which is in difficulty.
After careful study of the condition of the association, the Corpora
tion determines whether it will act to prevent a declaration of default
or whether it will permit the association to be liquidated. A declara
tion of default can be prevented by the Insurance Corporation either
by purchasing doubtful assets from the association, by making a
loan, or by means of a contribution to the institution in difficulty.
Through the close of the fiscal year 1945, the Corporation had used
only the last method of assistance.
To protect its subrogated rights, the Corporation takes an active
interest in the liquidation of State-chartered insured institutions,
while, in the liquidation of Federal savings and loan associations, the
value of the subrogated rights is safeguarded by virtue of its position
as active receiver.
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 the amount of their insured
accounts. The Corporation then makes available to each insured
member, upon surrender and transfer to the Corporation of his in
sured account up to $5,000, at his option, either (1) a new insured ac
count 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 nego
tiable 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.
Almost without exception, insured investors in the seven insured
associations which have been placed in liquidation elected to accept
the first method of settlement; that is, a new account in a normally
operating insured association. Less than one-fifth of 1 percent of the
claims settled have been paid with cash and debentures. Of the-esti
mated dollar amount of insured claims in all insured associations
placed in liquidation, 99.73 percent had been settled by June 30, 1945.
This involved issuance of new share accounts by other insured in
stitutions amounting to $6,675,224 and payment by cash and deben
tures in the amount of $13,200. The Corporation extended financial
aid in the form of contributions or payments on contingent commit
ments previously authorized in the total amount of $123,104 during
the fiscal year 1945. During the same period, the Corporation had
recoveries totaling $41,845 as a result of payments previously made.
FEDERAL HOME LOAN BANK ADMINISTRATION
29
OPERATIONS OF INSURED INSTITUTIONS IN DEFAULT
No insured associations were placed in receivership during the
fiscal year 1945. Of the seven insured associations previously placed
in receivership, the receivership of two had been terminated by the
beginning of the 1945 fiscal year. A third receivership, that of the
Wapakoneta Building & Savings Co., Wapakoneta, Ohio, was vir
tually terminated during the year, and therefore is not included in
exhibit 26, although the receiver has not yet been discharged. Com
parative statements of condition of the remaining four associations in
receivership are presented in exhibit 26.
The liquidations are progressing favorably. During the fiscal
year partial liquidating dividends were declared in three of the four
receiverships for which figures are presented in exhibit 26. The re
ceivership of the Wapakoneta Building & Savings Co., Wapakoneta,
Ohio, during the fiscal year paid a liquidating dividend, probably the
final dividend, of 13.5 percent, increasing its total dividends to
98.5 percent.
VI. HOME OWNERS' LOAN CORPORATION
GENERAL OPERATIONS
In the period from June 13, 1933, through June 12, 1936, the Home
Owners' Loan Corporation loaned $3,093,451,321 to refinance the
mortgage loans of 1,017,821 individuals, all of whom were-in danger
of losing their homes. Because of the financial conditions prevailing
then and later, some of these home owners, despite the Corporation's
efforts, were unable to work out of their difficulties. However, the
Corporation's activities, since the beginning of its existence, have
enabled more than 800,000 American families to avoid foreclosure in
an unprecedented emergency program to support home ownership.
Because of the necessity of foreclosing on some of these properties,
the Home Owners' Loan Corporation's original investment was in
creased by the capitalization of delinquent interest and taxes, fore
closure and acquisition costs, and reconditioning costs.- In addition,
the Corporation was forced to advance supplementary amounts in
servicing these loans, primarily to make funds available to pay delin
quent taxes. The total of these advances and capitalizations through
June 30, 1945, was $396,085,258. The Corporation's lending program
for the support of American home ownership had, therefore, resulted
by that time in a gross cumulative investment of $3,489,536,579.
Since the end of the HOLC lending period on June 12, 1936, the
Corporation's efforts have been devoted to the liquidation of its
affairs as economically as possible. On June 30, 1945, the balance of
mortgage loans, vendee accounts, and property accounts was
$969,227,207, a decrease of $286,942,103, or 22.8 percent, from the
balance of $1,,256,169,310 at the beginning of the reporting period.
Of the $3,489,536,579,grosg cumulative investment, $2,520,309,371,
or 72.2 percent, had been liquidated at the end of the 1945 fiscal year.
The reduction in these assets is summarized in the following table:
Original amount loaned-------------------------------- $3, 093, 451, 321. 01
Subsequent advances to borrowers, net additions included in
396, 085, 257. 59
capitalized value of properties, etc--------------------Original loans plus advances, capitalized additions, etc_--Outstanding on June 30, 1945:
Mortgage loans and advances ------- $647, 023, 618. 82
Vendee accounts, advances, and un
posted advances----------------317, 591, 713. 75
Property acquired- and in process of
4, 611, 874. 54
acquisition----------------------
3, 489, 536, 578. 60
Total outstanding-----------------------------
969, 227, 207. 11
Net reduction in mortgage and property assets__
2, 520, 309, 371. 49
In order to stimulate the home-mortgage market, Congress, in 1935,
authorized the Home Owners' Loan Corporation to invest in the share
capital of savings and loan associations. The cumulative investment
80
31
FEDERAL HOME LOAN BANK ADMINISTRATION
made by the Corporation in such associations by the end of the 1945
fiscal year was $223,85&,710. The total of $46,529,250 of this invest
ment which remained outstandinig at the beginning of the 1945 fiscal
year was reduced to $26,232,950 one year later. The Corporation has
received dividends from these investments which have been available
to offset part of the loss from the properties which the Corporation
has had to take over. Cumulatively to June 30, 1945, these dividends
aggregated $43,339,222.
The Corporation has used the funds received from the liquidation
of debtor and property accounts and retirement of investments in
savings and loan associations to-reduce its bonded indebtedness.
The outstanding unmatured bonds of the Corporation at the end of
the fiscal year 1945 totaled $1,009,982,000. This represented a reduc
tion of 71.1 percent from the total of $3,489,453,550 of bonds which
had been issued for value.
All payments upon principal of loans made by the Corporation
miust, in accordance with the Home Owners' Loan Act of 1933, as
amended, be applied to retire the Corporatioh's bonds. The Corpora
tion also applies to bond retirement certain other receipts such as
amounts received as a result of the repurchase of shares in savings
and loan associations. The total applied to the retirement of bonds
through June 30, 1945, was $2,469,022,830. Funds in this amount.
have been deposited with the Treasurer of the United States and have
been used or are available for use to retire bonds as shown in the
following table:
Disposition of funds allocated (throughJune 30, 1945) to bond-retirementfund
$2, 469, 022, 830. 4(6
Applied-to retirement of bonds-_ ----------------------Deposited for matured or called bonds on which interest has
10, 317,775. 00
ceased--------__ -----------------------------------86. 334. 35
Available for future retirement of unmatured bonds -----Gross amount deposited in bond-retirement fund-_
Balance due retirement fund for June 1945 deposited in July
1945--------------------------------------Total applicable to bond retirement--
2, 479, 426, 939. 81
_----_---------2,
1,
, 958. 79
481, 027, 898. 60
The most important refinancing operation carried out by the Home
Owners' Loan Corporation during the fiscal year 1945 was represented
by the issuance of $754,000,000 of 1 percent series T bonds, the pro
ceeds of which were used to refinance the 1% percent series M bonds.
Repayments made by the Corporation on the series S bonds reduced
the outstanding bonds of this series from $580,000,000 on June 30,
1944, to $255,982,000 on June 30, 1945.
The average interest rate on the outstanding bonds of the Corpora
tion (exclusive of bonds on which interest has ceased) was reduced
during the year largely because of the refinancing of the series M
bonds. At the beginning of the fiscal year 1945, the average interest
rate was 1.283 percent, while at the end of the year the rate on all
outstanding unmatured bonds was 1 percent.
The Corporation has reduced personnel and administrative expenses
rapidly in recent years. The total personnel of the Corporation was
reduced from 2,397 employees on July 1, 1944, to 1,746 one year later,
a reduction of 27.2 percent.
32
FEDERAL HOME LOAN BANK ADMINISTRATION
Administrative expenses were $6,903,051 during the current report
ing period compared with $9,078,615 during the preceding period,
a reduction of 24 percent.
Three field stations were closed by the Corporation during the 1945
fiscal year. On June 30, 1945, the HOLC operated eight regional
offices and five field stations. These stations were 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 operation. Collection facilities are maintained in
four of the five field stations.
STATUS OF ACCOUNTS
During the 3 years of lending operations, the Home Owners'
Loan Corporation made loans to 1,017,821 individuals. The cumu
lative number of accounts had increased to a total of 1,019,788 as of
June 30, 1945, because of -divisions of property, partial gales of prop
erties owned, and other reasons. On that date, these accounts were
classified as follows:
--Accounts terminated --------------Original mortgage loans
-----------Vendee accounts ----------------------------------------------Properties owned and in process of acquisition ----------------
486, 392
405, 508
126, 987
901
Total--------------------------------------------------1,019, 788
It will be observed that these accounts are of three major types
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 cumulative number of 1,019,788
accounts, 486,392, or almost one-half, have been terminated. Pay
ment in full of original mortgage loans accounted for 418,144 of the
accounts terminated. Of the remainder, payment in full of vendee
accounts caused 53,008 terminations; cash sales of acquired properties
accounted for 14,865 terminations;-charge-offs of mortgage loans and
vendee accounts caused 227 terminations; and 148 accounts were
terminated through the charge-off or consolidation of property
accounts. Of the 486,392 accounts terminated, 113,529 were termi
nated during the fiscal year 1945 alone.
Mortgage and vendee accounts.-A total of 532,495 mortgage and
vendee accounts were outstanding at the end of the reporting period.
Of these, 189,704 had been extended in accordance with the Mead
Barry Act of 1939 which provided that amortization periods could
be extended in justifiable-cases up to 25 years from the date of execu
tion of the mortgage held by the Corporation.
At the end of the fiscal year 1945, 80 percent of the Corporation's
outstanding accounts were paid on schedule. Experience has been
gratifying with the loans which were extended from the original 15
up to a maximum of 25 years, beginning in 1939 under authorization
of the Mead-Barry Act. When the extensions were granted, all of
these borrowers were behind in their payments. On June 30, 1945, of
the 185,551 outstanding mortgage loans which had been extended,
138,956, or 74.9 percent, were paid on schedule. Of the 4,153 out
standing vendee accounts which had been extended, 3,063, or 73.8
33
FEDERAL HOME LOAN BANK ADMINISTRATION
percent were paid on schedule. Many foreclosures with resultant
losses to the Corporation have been averted through these extensions
which cut down required monthly payments.
From the beginning of its operati6ns, the Home Owners' Loan
Corporation has been following the practice of servicing its loans
individually.. This permitted the Corporation to locate causes of
trouble and to take action to avoid foreclosure. As part of this serv
icing program, the Corporation collects funds from borrowers on a
monthly installment basis and holds these funds for the payment
of taxes and insurance. This procedure assists borrowers to avoid tax
difficulties and has the advantage to the Corporation that it reduces
administrative expenses by eliminating the necessity for searching tax
records to determine whether delinquencies exist. The proportion
of such accounts increased from 61.7 percent of outstanding loan
accounts at the beginning of the 1945 fiscal year to 65.5 percept at
the end of the year.
Properties acquired, including those subject to redemption.-Fromthe
time that it commenced operations until June 30, 1945, the Home
Owners' Loan Corporation acquired 197,921 properties as a result of
foreclosures, abandonments, etc. In addition to these, the Corpora
tion held 191 properties on June 30, 1945, which had been foreclosed
or acquired subject to redemption. Of the Corporation's property
acquisitions, 194,083 were of properties covered by original mortgage
loans. - Accordingly, it can be said that, of the 1,017,821 original
mortgagors, all of whom faced loss of their properties under the
conditions prevailing from 1933 to 1936, 823,738, or 80.9 percent,
were saved from foreclosure through the operations of the Home
Owners' Loan Corporation.
The properties acquired during the 1945 fiscal year totaled 432 as
compared with 930 during the previous fiscal year. During the
reporting period, the Corporation disposed of 4,990 properties as
compared with 21,512 during the fiscal year 1944.
Property accounts.-The Home Owners' Loan Corporation has
succeeded in selling practically all of its acquired properties. The
rapid decrease in the number of properties which the Corporation
owned or to which it was acquiring title is shown in the following table:
Properties owned or in process of pcquistzon
June 30, 1941 -------------49, 419
June 30, 1942---------------37, 998
June 30, 1943---------------26,041
June 30, 1944--------------June 30, 1945 ---------------
5, 459
901
Of the 197,921 properties which the Corporation acquired and-had
available for sale, it had disposed of 197,211, or 99.6 percent up to
June 30, 1945. During the last few years the combined capital value
of properties which the Corporation owned or to which the Corporation
was in process of acquiring title decreased as in the following table:
Capdtal value of properties owned or ,n process of acqusiton
June 30, 1942---------$262, 307, 276
June 30, 1943-_-------191, 298, 828
June 30, 1944-------June 30, 1945---------
$36, 063, 486
4, 611, 875
As of June 30, 1945, sale of Corporation-owned properties had
resulted in a total cumulative loss, including brokers' commissions and
selling costs, of $334,335,775. In addition to these losses, other losses
34
FEDERAL HOME LOAN BANK ADMINISTRATION
which included principal and interest losses on mortgage loans and
vendee accounts, properties charged off, fire and other hazards, and
fidelity and casualty losses, etc., amounted -to $1,313,715. As a
result, total book losses from all sources cumulative through the close
of the fiscal year 1945 totaled $335,649,490.
As of June 30, 1945, the Corporation had earned a cumulative net
income of $243,319,544, before provision for losses. After deducting
these earnings, the Corporation's losses in excess of its net earnings
as of June 30, 1945, were $92,329,946. This compares with losses in
excess of net earnings as of June 30, 1944, in the amount of
$106,879,442. Accordingly, the total losses after deducting net in
come were reduced by $14,549,496 during the fiscal year 1945.
The loss figures for properties sold include brokers' commissions,
selling costs, and the difference between the actual sales prices and
the capitalized value shown on the Corporation's books. Capitalized
value inclides the unpaid principal of the foreclosed loans, delinquent
interest and taxes, foreclosure and acquisition costs, and recondition
ing costs. This indicates that a large part of the book losses reflects
the cost of leniency to borrowers who eventually had to be foreclosed.
Although the Corporation sells its acquired properties as promptly
as possible, some time may elapse before buyers can be found for
specific properties. Pending sale, therefore, most of these properties
are rented. On June 30, 1945, properties owned by the Corporation
contained 1,420 rental units, of which 294 were not available for rental
because they were in the process -of repair, held vacant for sale, or
adversely occupied. The remaining 1,126 units were available for
rental and of these, 863, or 76.6 percent were rented.
For the 1945 fiscal year, the Corporation's gross operating income
from rental of properties was $938,446. Gross expense for rented
and unrented properties, not including interest and administrative
expenses, was $956,104. For the year, therefore, the Corporation
had a net operating deficit from property of $17,658. From the
beginning of operations until June 30, 1945, net operating income
from properties owned by the Corporation wgs $25,701,288.
Financialstatements.-The balance sheet of the Home Owners'
Loan Corporation for June 30, 1945, is presented in exhibit 27.
During the reporting period, as a result of the Corporation's progress
in liquidation, total assets decreased 24.4 percent. Exhibits 28 and
29, -respectively, present statements of income and expense for the
fiscal year 1945 and for the period from the beginning of operations
through June 30, 1945. Operating and other income for the fiscal
year 1945 totaled $52,409,449. Total expenses, including interest on
bonded indebtedness, decreased to $22,554,185 for the reporting
period. This left a net income of $29,855,264 before provision for
losses. After allowance for the reserves necessary to meet future
estimated losses, the Corporation's net income for the fiscal year 1945
was $27,997,417. The difference between this figure-and the net
reduction of $14,549,496 mentioned previously is accounted for by a
reduction in the reserve balance for future losses.
In cpmparison, operating and other income for the fiscal year 1944
was $71,339,093. Total expenses including interest on bonded in
debtedness for the same period were $47,713,019, leaving a net income
for the fiscal year 1944, before provision for losses, of $23,626,074.
FEDERAL HOME LOAN BANK ADMINISTRATION
35
After allowance for the reserves necessary to meet estimated future
losses, the Corporation had a loss of $16,507,173 for the fiscal year
1944.
During the fiscal year 1945, the Corporation's gross income con
tinued the decline of previous years, due to the rapid reduction of
the assets of the Corporation. However, partly because of refunding
operations, which decreased substantially the interest on the Cor
poration's bonded indebtedness, expenses decreased even more rapidly
than gross income. - Accordingly, the Corporation's net income, before
provision for losses, increased during the year. In addition, because
the Corporation has now liquidated most of its properties, it was
possible to reduce the provision for losses on mortgage loans, interest,
and property. As a result, only $1,800,000 was set aside for this pur
pose during the fiscal year 1945, as compared with the $40,000,000
set aside during the fiscal year 1944. The remaining balance of this
reserve for future losses decreased from $27,206,888.02 to $13,758,
633.27 during the 1945 fiscal year.
The netincomeof the Corporation, after provision for losses, changed
from a deficit of $16,507,173 during the fiscal year 1944 to a net income
of $27,997,417 during the fiscal year 1945. At the beginning of the
1945 fiscal year the Corporation had a deficit of $134,086,330 as a
result of its unpreced6nted program to save the Nation's home owners
from foreclosure. The Corporation's net income of $27,997,417
during the reporting period, plus an adjustment of $333.05 for un
identified payments, reduced this deficit to $106,088,580 as of June
30, 1945.
VII. UNITED STATES HOUSING CORPORATION
The United States Housing Corporation was created in 1918 during
World War I for the purpose of providing housing for workers in
congested war production centers. Under Executive Order No. 9070
of February 24, 1942, the task of finally liquidating the affairs of that
Corporation which was transferred to the Federal Home Loan Bank
Administration has now been completed. At the close of the reporting
period, all of the Corporation's remaining properties had been sold,
and all assets and known claims had been liquidated. The Corpora
tion had a cash balance on June 30, 1945, which has been covered into
the Treasury of the United States.
A final report on the United States Housing Corporation will
presently be submitted to the Congress. This final report sum
marizes the history of the United States Housing Corporation since its
formation and its liquidation by the Federal Home Loan Bank
Administration.
36
LIST OF EXHIBITS
Page
1. Estimated number of new nonfarm dwelling units started,
fiscal years 1943, 1944, and 1945 --------------------39
2. Indices of building costs for the standard frame house,
39
fiscal years 1944 and 1945 -----------------------3. Number of nonfarm real estate foreclosures, by Federal
Home Loan Bank Districts and States, fiscal years 1944
40
and 1945---------------------------------------4. Residential real estate owned by selected institutions, De
41
cember 31, 1943, and December 31, 1944 ------------5. Estimated volume of mortgage loans made on one- to four
41
family nonfarm homes, by type of lender, 1932-44 -----6. Nonfarm mortgages of $20,000 or less recorded during fiscal
year ending June 30, 1945, by Federal Home Loan Bank
42
Districts and States- ------------------------------7. Estimated balance of mortgage loans outstanding on one- to
four-family nonfarm homes, 1932-44, by type of mort
44
gagee------------------------------------------8. Estimated long-term savings of individuals in selected in
44
stitutions, 1937-44-_ -------------------------------9. Members of the Federal Savings and Loan Advisory Coun
45
cil during the meetings held in the fiscal year 1945 -----10. Statement of receipts and disbursements of the adminis
trative department of the Federal Home Loan Bank
45
Administration, fiscal year 1945---------------------11. Number of employees of the Federal Home Loan Bank
45
Administration, July 1, 1939, to July 1, 1945 --------12. Number and estimated assets of member institutions of the
Federal Home Loan Bank System, June 30, 1944, and
June 30, 1945-------------------------------------46
13. Federal Home Loan Banks-Advances and repayments for
the fiscal years 1933 to 1944, and the balance of advances
47
outstanding at the close of each fiscal year-----------14. Interest rates charged member institutions on new ad
48
vances, July 1, 1945---------------------------- --15. Statement of condition of the Federal Home Loan Banks as
49
of June 30, 1945----------------------------------16. Analysis of surplus and undivided profits of the Federal
52
Home Loan Banks for the fiscal year ended June 30, 194517. Statement of profit and loss for the fiscal year ended June
54
30, 1945, of the Federal Home Loan Banks ----------18. Statement of receipts and disbursements of the Federal
Home Loan Bank System during the fiscal years 1944
and 1945----------------------------------------58
37
38
FEDERAL HOME LOAN BANK ADMINISTRATION
Page.
19. Names and addresses of the Federal Home Loan Banks and
the area served by each-------------------8---20. New mortgage loans made by member savings and loan
associations, by type of loan, fiscal years 1943, 1944, and
1945---------------------------------59
21. Combined statement of condition of member savings and
loan associations, as of December 31, 1943, and December
31, 1944
-------------------------------------60
22. Combined statement of operations of member savings and
loan associations for the year ending December 31, 1944.
61
23. Number and assets of all insured associations as of June 30,
1944, and June 30, 1945 --------------------------63
24. Statement of condition of the Federal Savings and Loan
Insurance Corporation as of June 30, 1945, and June 30,
1944--------------------------------------------66
25. Income and expense statement of the Federal Savings and
Loan Insurance Corporation for the period July 1, 1944,
through June 30, 1945, and July 1, 1943, through June 30,
1944 --1944------------------------------------------67 -67
26. Statements of condition and operation for insured institu
tions in receivership, June 30, 1945 -----------------68
27. Balance sheet of the Home Owners' Loan Corporation as of
June 30, 1945 ------------------------------------70
28. Statement of income and expense of the Home Owners'
Loan Corporation for the fiscal year 1945 -----------71
29. Statement of income and expense of the Home Owners'
Loan Corporation from the beginning of operations, June
13, 1933, to June.30, 1945---------------------------72
EXHIBITS
EXHIBIT 1.-Estimated number of new nonfarm dwelling units started
Private
TotalPub
m
Fiscal year 1943, total
Public
m
nonfarm
1-family
2-family 1
fmy2
...........------
391, 700
155, 581
14,905
24,385
196,829
Third quarter, 1942 ..
---------Fourth quarter, 1942-----------------First quarter, 1943
-------Second quarter, 1943-----.
...-------.
94, 600
96, 900
118,100
82,100
53,132
36, 695
26,927
38,827
3, 235
3,976
2,689
5,005
7, 521
4,488
4,527
7,849
30,712
51, 741
83,957
30, 419
247,000
135,780
16,396
25,576
69248
76,100
73,-700
48, 900
48,300
37,316
33, 262
31,082
34,120
5, 662
4,-410
2, 703
3,621
9,61
7, 693
3,523
4, 799
23, 561
28,335
11, 592
5, 760
Fiscal year 1945, total-------------------
161,500
116, 609
8,402
10,916
25, 573
Third quarter, 1944----------......---------
38, 600
27, 781
2, 253
2,893
5,673
Fourth quarter, 1944------.....------------.......
33, 200
First quarter, 1945-------------------......
29, 400
Second quarter, 1945- ...........---------------60, 300
21, 628
22,800
44,400
2,049
1, 600
2,500
2,323
2, 200
3, 500
7,200
2,800
9,900
Fiscal year 1944, total--------Third quarter, 1943--------------Fourth quarter, -1943- ---..-------------First quarter, 1944----------.................--------Second quarter, 1944 ..
.......--------------
1Includes 1- and 2-family dwellings with stores.
SIncludes multifamily dwellings with stores.
Source: Division of Constructiont and Public Employment, Employment and Occupational Outlook
Branch, Bureau of Labor Statistics, TJU.S. Department of Labor.
EXHIBIT -2.-Indicesof building costs for the standard frame house
[1935-39=100]
Period
Fiscal year 1944:
1943-July------..----.
Auaust --..-..September ...October
--November-....
December ..1944 -January
....February --..
March-------.
April----------...
May----------...
June
...---------
Materials
Labor
123.1
123.8
124. 5
126.1
127. 2
128.1
128.8
29.4
129.8
130.4
130. 9
131.4
133.9
134. 1
134.3
135.3
135.7
136.9
137.3
137.6
138.2
138.9
139. 2
139.4
Total
126.7.
127.3
127.8
129.1
130.1
131.0
131. 7
132 1
132.6
133 2
133.7
134.1
Period
Materials
Labor
Total
Fiscal year 1945:
1944-July _-----131.6
August - _132.1
September .
132.2
October---132. 2
November --132.4
December--132. 5
1945-January--__
132. 5
February--132.8
March -----133.1
April ------133.2
May-----......----. 133.4
June-----.. ----.
133.5
139.8
139.9
140.8
141.4
142.8
-143.0
143.3
143.4
143.8
143 8
143.8
143.9
134.3
134.7
135.0
135.3
135.9
136.0
136.1
136.3
136.7
136.8
136.8
137.0
Source: Prepared by Division of Operating Statistics, Federal-Home Loan Bank System, Washington,
D.C.
39
FEDERAL HOME LOAN BANK ADMINISTRATION
40
EXHIBIT
Federal Home Loan Bank
District and State
3.-Number of nonfarm real estate-foreclosures
Fiscal y ear end
ing Ju ne 30-
Percent
change
1944
1945
United States .....
20,710
16, 142
...----
2,452
1, 657
624
285
1,324
89
101
29
,372
307
869
37
46
26
-40.4
+7.7
-34.4
-58.4
-54.5
-10.3
No. 2-New York .--
5,515
4,091
-25.8
New Jersey-------New York--...--.
905
4,610
619
3,472
-31.6
-24.7
Fiscal year end
Federal Home Loan Bank
ing June 30- Perceht
District and State
-------change
1944
1945
_fI
No. 1-Boston
Connecticut-........
Maine---------Massachusetts-----New Hampshire--.
Rhode Island-----..----Vermont-_
No. 3-Pittsburgh- ...
Delaware. -----Pennsylvania ------....
West Virginia ---No. 4-Winston-Salem-Alabama .------District of Columbia
----Florida
Georgia ------Maryland---------North Carolina ----South Carolina - -.
Virginia .....-No. 5--Cincinnati.
....
Kentucky.........---Ohio-----Tennessee ------_-No. 6-Indianapolis .Indiana----------Michigan-------...
-
-22.1
-
32
.4
3,535
2,881
-18. 5
38
3, 207
290
40
2,646
195
+5.3
-17.5
-32.8
2,286
1, 797
-21.4
No. 7-Chicago-..........
1,121
730
-34.9
791
330
525
205
-33.6
No. 8-Des Moines-......
1, 277,
718
-43.8
,Iowa .......--------Minnesota---------....
Missouri---North Dakota-.......
South Dakota-.....-----
105
198
796
94
84
38
77
488
70
45
-63.8
-61.1
649
478
-26.3
55
177
-59
21
337
38
102
48
9
281
-30.9
799
854
Illinois
----Wisconsin----------
No. 9-Little Rock -Arkansas---------...
Louisiana------Mississippi-...----.New Mexico -----Texas..- --------No. 10-Topeka-.........
Colorado-............
124
Kansas.------------109
Nebraska --------..
424
Oklahoma ..--------142
211
65
408
278
390
357
81
496
236
49
325
126
471
270
80
240
1,731
1,737
+0.3
222
980
529
188
692
857
-15.3
-29.4
+62.0
No. 12-Los Angeles ----
405
505
+24.7
Arizona-_ ---
218
187
208
297
-4.6
+58.8
+11.8
-24.6
-20.3
-54.7
+20.8
-24.4
-1.2
-51.6
No. 11-Portland-..--
170
Idaho---------Montana...--.......-------Oregon_ ------Utah
------Washington-.........
Wyoming.--.------
-----
California----------..
Nevada.-------------
10
39
40
9
64
8
109
44
623
78
108
1
6
27
8
61
5
-37.9
-38.7
-25.5
-46.4
-42.4
-18.6
-57.1
-16.6
+6.9
-12.1
-59.6
+46.9
-45.1
-36.5
-90.0
-84.6
-32.5
-11.1
-4. 7
-37.5
770
586
-23. 9
23
744
3
12
573
1
-47.8
-23.0
-66.7
41
FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT 4.-Residential real estate owned by selected institutions
[Amounts in thousands of dollars]
Decrease during
1944
44
Dec.31ec.
Type of institution
..
. ...
1943
Savings and loan associations 1--..----------- -----Mutual savings banks 3.....-----------------------------
2 $116, 969
80,605
49, 248
212, 818
-Commercial banks ..-------------------------------Life-insurance companies
5-----------------------------
Total, private....--------------------------8 - - - - - - - - - - - - - - - - - - - -Home Owners' Loan Corporation . .
1944
-
2459,640
94,140
2553, 780
Grand total-----.......----.----------........------........--------...
/
Amount
Percent
$60,383
36, 398
24,132
123,678
$56, 586
44, 207
25,116
89,140
48.4
54.8
51.0
41.9
244, 591
10, 701
215,049
83,439
46.8
88.6
255, 292
298,488
53.9
1 Estimate based'on reports of operating associations received by the Federal Home Loan Bank Admin
istration.
2 Revised.
3 Estimate based on reports from the Comptroller of the Currency and State supervisory authorities.
4 Based on reports of the Comptroller of the Currency and of the Federal Deposit Insurance Corporation.
Excludes trust departments of commercial banks.
5 Estimate of the Federal Home Loan Bank Administration based on a questionnaire survey of the largest
life-insurance companies. Excludes company-built housing projects.
6 Capital value.
.
Source Prepared by the Division of Operating Statistics, Federal Home Loan Bank System, Washington,
D. C.
EXHIBIT 5.-Estimated volume of mortgage loans made on 1- to 4-family nonfarm
homes, by years, 1932-44
[In millions of dollars]
Type of lender
Savings and loan associa
tions ---------Insurance companies ------Mutual savings banks -Commercial banks and
their trust departments-Home Owners' Loan Cor
poration
..------Individuals and others i
1932 1933 1934 1935 1936 1937 1938
1939
1940
1941
1942
1943
1944
$543 $414 $451 $564 $755 $897 $798 $986 $1,200 $1,379 $1,051 $1,184 $1,454
54
10
16
77 140 232 242 274
324
371
374
272
300
150
99
80
80 100 120 105 112
133
171
130
120
140
170
110
264
430
500
560
610
689
_1322, 263
175 100 150
583
443
128
605
27
723
81
669
151
740
143
63
801 1,028
Total -------------- 1,092
110
798
606
515
601
40
54
31
954 1,038 1,304
865 3,070 2,0112,158 2,4992,455 2,873 3,290 3,810 3,155 3,183 3,830
1
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.
42
FEDERAL HOME LOAN BANK ADMINISTRATION
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44
FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT'
7.-Estimated balance of mortgage loans outstanding on 1- to 4-familyj
nonfarm homes,
[In millions of dollars]
Type of mortgagee
1932
1933
1934
1935
1936
1937
1ma3
$3, 710
1,379
3000
1,)189
2, 379
6, 200
$3.,293
1, 281.
2,850
1, 189
2, 897
6,000
$3.,237
1, 245
2, 750
1, 230
2, 763
6, 000
$3, 420
1,246
2, 700
1,400
2,398
6,1180
$3,555
1,320
2,670
1,600
2,169
6, 332
17,878
17, 857
17,510
17,225
17, 344
17,646
1939
1940
1941
1942
1943
$4,084
1,758
2,700
2, 095
1,956
6,510
$4, 552
1,976
2, 730
2,470
1, 777
6,500
$4, 556 1$4,584
2, 255
2,410
2, 700
2,660-.
2, 480
2,450
1,567
1,338
6, 350
6, 100
$4, 799
19, 103
20,095
19, 908 119,542
19,528
Savings and loan associations --------------- $5.,148 $4, 437
Insurance companies---------------------1,724
1, 599
Mutual savings banks--------------------3,375
3, 200
Commercial banks-----------------------1,995
1,810
Home Owners' Loan Corporation---------- -------- -112
Individuals and others -----------7.000
6, 700
Total--------------------
--------- 19, 242
Type of mortgagee
Savings and loan associations---------------------$3, 758
Insurance companies ----------------------------1,490
Mutuial savings banks --------------------------- _2, 680
Commercial banks ------------------------------1,810
Home Owners' Loan Corporation ------------------2,038
Individuals and Others ----------- ---------------6, 440
Total--------------------
------------------
18, 216
1944
2,458
2,570
2,410
1,001
6,200
For detailed explanation of preparation of these estimates, see footnotes to exhibit 10 of Ninth Annual
Report of Federal Home Loan Biaik Board
I Revised.
Source. Division of Operating Statisties, Feaiural Home Loan Bank Administration
EXHIBI1T 8.-Estimated long-term savings of individuals in selected institutions
[In millions of dollars]
1937
Total------------
1938
1939
1940
1941-
1942
194
Percent
change
1943-44
1944
$49, 109 $51, 144 $54, 190 $57, 633 '$62, 023 1$71,'084 1$86, 815 $107, 042
Life insurance compa
nies 9--------------20,510
Mutual savings banks 3_
10, 126
Insured commercial
banks---------------..12, 100
Savings and loan associations5---------------4,011
Posal-avigs --1, 303
2V2% postal savings
bonds7------------95
United State.5 Savings
Bondss ---------------964
21, 858
10, 235
-I
1%,196
23, 381
10. 481
4,035
1,/246
4,092
1,315
92
1,442 1
12, 622
25,025
10,6181
IY
90
2209
+23.3
393
10,.490
1 29,610
10,621
'31, 256
11,707
34, 100
13, 332
+9. 1
+13.9
13,261
1 13,916
'16,864
21,728
+28.8
4,93041 I4,652
1,3421 1,392
4.910
3,417
'5,491
1, 837
6, 305
2,.342
+14.8
+27.5
83
82
-1.2
19,5741 29,1531
+48.9
13,0621
87
3,195 1
i127,
85
475
84
10,5261
1 Revised.
2 Estimated accumulated savings in United States life insurance companies. Represents reserves plus
dividends unpaid and left to accumulate and surplus to policyholders, except that deduction is made of
policy notes and loans and net deferred and unpaid premiums. Source: The Spectator.
3'Deposits. Source- The Month's Work published by the National Association of Mutual Savings
Banks.
4 Deposits evidenced by savings passbooks for insured commercial banks Figures since 1942 are estimated.
I-Ik
Source: FDIC
5Estimated privateinvestinents in savings and loan associations including deposits and investment se~iuri
ties., Excludes shares pledged against mortgage loans. Source: Federal Home Loan Bank Administration.
6Due depositors; outstanding principal and accrued interest on certificates of deposit, outstanding
sayings stainps; and unclaimed deposits. -Source: Post, Office Department.
Source- Treasury Daily Statements and
7 Excludes such bonds held by the Postal Savings System
Post Office Department.
8Currenit redemption value. From May 1, 1941, includes War Savings bonds, series E.
Prepared by the Division of Operating Statistics, Federal Home Loan Bank- System
45
FEDERAL HOME LOAN BANK ADMINISTRATION
9.-Federal Home Loan Bank Administration-Members of the Federal
Savings and Loan Advisory Council duringthe meetings held in the fiscal year 1945
EXHIBIT
Elected or
Member
Federal Home Loan Bank District
appointed
Boston--------------------------Raymond P. Harold----------........................------------ Elected.
Do--------.................---------------------..
oseph H. Soliday------...........------------------........
Appointed.
New York------------------------- J Alston Adams------------------------- Elected.
Pittsburgh----------.--------------- -James J. O'Malley--------------------------Do.
Do---------------------------------- Charles S. Tippetts----------------------- Appointed.
Winston-Salem-------------------- Fi ank Muller, Jr.------------------------Elected.
Cincinnati- ................--------..........-------------W. Megrufe Brock------------------------Do.
Indianapolis---------------------- Walter Gehrke ................-----------------------------....
Do.
-------.. Appointed.
Do---------------------------------- Herman B. Wells ..........-----------------......
Chicago------..........------------------------- Arthur G. Erdmann.........................------------------- Elected.
Des Moines---.....................------------......
Roy W Larsen-------......................--------------------.........
Do.
Little Rock------------........................--------------J.J. Miranne------------.................................-----------------Do.
Do--- ----..--------------Ben H. Wooten-------------------------Appointed.
Topeka----------------------------- Ray H. Babbitt...-- --------------------Elected.
Do--------.----------------- William M. Jardine----------------------- Appointed.
------Elected.
Portland-------------------------Keith Powell ---Do---------------------------S. S. Selak 2-------Do
Do
Los Angeles---------------------- J. K. Baillie-----------------------------Do-----------------------David G. Davis.....-.................--------------..----...
Appointed.
i Resigned Jan 8. 1945
' Vice Powell
EXHIBIT 10.-Federal Home Loan Bank Adminstraton (Administrative Depart
ment) statement of receipts and disbursements, fiscal year 1945 (cash basis)
0
Balance at beginning of 1945 fiscal year...---.......................-----------------------------------------Receipts by sources*
Contributions
Home Owners' Loan Corporation-----.......---------------- $163,144.00
Federal Savings and Loan Insurance Corporation..-------------------103,933.00
Federal Home Loan Bank Administration (System)---...---..--------139,867.00
Collection from United States Treasury---- --------------------------356.16
Miscellaneous refunds ...........................................-------------------------............
244. 29
Total receipts-------...........----.......................-----................------------------------------.....
$407, 544. 45
Disbursements:
Salaries
----------------------------------------------------. $301, 714. 45
Communications...------------------...---------------------.....
3,893.90'
Rents and utilities---------.------------------.
------------33, 902 25
Other contractual services---.------..
-------------------------------.
1,835 72
Supplies and materials- .....--- ---...------------------------1,038.27
Total disbursements---.............................................................------------------------------
342,384.59
Balance at close of 1945 fiscal year..---------------........................------------------------------ 65,159.86
1
Prior to July 1, 1944, the activities of the Administrative Department of the Federal Home Loan Bank
Administration were not segregated, but were grouped with the over-all activities of the Federal Home Loan
Bank Administration This Department now operates under a separate budget
EXHIBIT 11.-Federal Home Loan Bank Administratton-Number of employees
Federal
July 1
Adminis
Administrative
Department
1939--..........--------------------------------1940 -----------...................----------...............-------1941.....------------------....
1942.--...--------------------------------1943 -----------------------............................---------1944-..........................------------------------95
1945----------------................---------89
Federal
Home
oan
Bank
System
359
398
451
359
299
315
324
Home Owners' Loan
Corporation
Savings
Loal
and
ansduranc
Corpora Home ofce
Field
Field
Home offie
tion
39
47
56
74
60
53
52
1,318
1,274
1,256
1,026
750
464
335
9,689
8, 569
6,508
4,202
2, 569
1, 933
1,411
Total
11,405
10,288
8,271
5,661
3,678
2,860
2,211
46
FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT 12.-Federal Home Loan Bank System-Number and estimated assets of
member institutions June 30, 1944, and June 30, 1945
of members
Number
Numer
of members (in
Assets
thousands
of dollars)
Federal Home Loan Bank District and States
1944
1945
1944
1945
, 3,714
13, 696
$6, 840, 241
$7,969,978
No. 1-Boston-----.-----..................--------------------
236
239
1,045, 816
1, 203, 256
Connecticut--------------.........................--------------Maine-----------------------------........----........
Massachusetts---------------------------------New Hampshire---.
Rhode Island---------------------------Vermont-----....... ..............---------------------------
51
22
132
21
5
5
52
22
134
21
5
5
188,154
29, 891
678,494
88, 701
53,851
6,725
240,494
28,185
763, 234
99, 272
63,975
8,096
359
361
694,444
842,765
223
136
221
140
272, 511
421, 933
325, 208
517, 557
453
442
370, 224
441, 092
7
419
27
7
408
27
3,965
340,588
25, 671
4,65&
408,175
28, 261
412
410
905,344
1,024,646
27
22
50
55
63
112
44
39
27
23
50
55
62
110
44
39
29,074
188,579
126.802
62,578
113,259
264, 313
53 495
67, 244
33,593
215,974
166, 573
81,424
130,264
260, 730
61, 794
74, 294
561 I
559
1,117, 746
1, 309.868
75
450
36
75
449
35
96, 725
975, 364
45,657
111, 422
1,141,433
57. 013
21
221
399,626
461,464
163
58
162
59
236,606
163, 020
273,191
188, 273
454 1
457
578, 852
691, 543
341
113
343
114
444, 093
134, 759
539, 804
151, 739
238
235
322,968
377, 047
72
42
98
13
10
69, 266
105, 070
128, 115
15, 844
4, 673
80, 645
130, 349
140, 270
20, 006
5, 777
June 30, 1944
June 30, 1945
3, 671
22
21
3, 656
25
15
3,714
3,696
United States....................----------...--------------...............-----
-------------------
No. 2-New York---------..
..........---------------------------New Jersey
New York--------------................---------------No. 3-Pittsburgh-------------..............................-------------Delaware ----.....--..-----------.......................-----------------------------Pennsylvania-------------.....
West Virginia--------------------------No. 4-Winston-Salem ------
------.......
...................---------------------------------Alabama
District of Columbia------------------------Florida.......----------------------------------.....---------------------...
Georgia----------------Maryland-----------.........---------------------...---------North Carolina.-------------South Carolma ------------------------------Virginia -------------------------------No. 5-Cincinnati-------------------------------Kentucky--------------...............--------------....-------------------Ohio
..........
Tennessee-----------------------------------No. 6-Indianapolis-----------------------------Indiana-------...-----------------------------------------------------Michigan----No 7-Chicago .......------------........----------------Illinois----------------Wisconsin-- --------------No 8-Des Moines
--.........-------------------------
-------------------
Iowa---------------------------------------........Minnesota-------.........----------------------------.------------Missouri
North Dakota
.---------------.
South Dakota -__----_-------------------------
72
43
100
13
10
The numbe ot members, by type oi mstitution, was as follows*
Savings and loan associations-----------------------------------------Savings banks.......................................--------------------------------------------------------Life insurance companies------------..........................................---------------------------------Total....---.---------------------------------------------------.............................................
47
FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT 12.-Federal
Home Loan Bank System-Number and estimated assets of
member institutions June 30, 1944, and June 30, 1945-Continued
ofmembers
Number
of members
Number
Assets of members (in
thousands of dollars)
Federal Home Loan Bank District and States
1944
No. 9-Little Rock-----------------.............................---------------Arkansas-------------..... -------------------------Louisiana -------------------------------------Mississippi ....------------------------------------New Mexico----.....................---------- ---.............
Texas------------------.........................--------------.......
No 10-Topeka----------....................---------------------.........
278
271
$456, 834
$463, 332
40
67
26
14
131
40
66
25
14
126
22, 405
110, 030
32, 409
8, 524
283, 466
24, 526
114,175
12, 994
9, 510
302, 127
209
207
221,885
254, 036
39
86
30
52
41, 276
66, 912
32, 842
80, 855
47, 844
77, 160
35, 487
93, 545
128
249,708
311,824
10
1
8
14
26
10
59
10
1
12, 645
14, 597
50,772
29, 652
133, 859
7, 526
747
16, 721
15, 817
62, 442
36, 301
170, 724
8,907
912
165
166
476,794
589,105
3
156
1
5
3
157
1
5
9, 654
457, 75
1,109
8, 276
16, 503
561, 58
1,305
9, 739
--------------39
Colorado .........................----------------------87
Kansas .............-------------.....................-------------------31
.....
Nebraska-----------.......................---------------.....
52
Oklahoma.......................-------------------------------------...........
128
No. 11-Portland----------------...........................-------------------
-....
Idaho ............---------- - --..................--..Montana ........................-----------------..............
------------Oregon .........................-----------------...............
...........................-------------------------------------------Utah
-----Washington---......................--------------------.............
Wyoming .....................................-------------------------------------Alaska----------------------....------------------No. 12-Los Angeles-------------- -----------------Arizona--------------------............................-------------------......
California--------------------------------------Nevada ........--------------------------...........................-------------Hawaii----------..........-------------............................-----------------
1945
1944
1945
8
14
26
l
Source Division of Operating Statistics. Federal Home Loan Bank System
EXHIBIT
13.-FederalHome Loan Banks-Advances and repayments for the periods
indicated, and the balance of advances outstanding at the close of such periods
Period
Advances
Repayments
Fiscal year
$48,894, 602. 41
1933-----------------------194 ...------------------------------------62, 871,910 22
36, 683,308 61
195 ....------------------------------------1936--------------------...................---------------78, 195, 22432
1937-----------------------------------114,287, 052 41
1938 ...................................------------------------------------105,432, 157. 95
1989------------------........................------------------76,659,074.62
1940---------.....................-----------------...............
108,009,901.23
1941.....------------------------ -----------142, 875, 563. 45
155, 025,046. 83
1948...-----------------------------------1943------------------------------------96, 346,312.85
1944-------------------....................----------------222, 500,864. 94
$1,230, 772. 82
25,387, 445 72
42, 599,148. 52
38, 84G,900. 50
65,817,003.85
7, 264,107. 15
108, 922, 448. 8
119, 574, 417. 7
180, 375,220. 9
132g277, 500. 65
198,799, 71. %7
184,4,895. 59
28,481,100. 00
1944-July----------------------------------August--------------..........................-----------------4,071,930.00
6, 992, 758. 33
September.......------------------------4,180,989.99
October----------------- -------------30, 736,883. 50
November------------------ --...-----47,131, 991. 74
December----------------------------10,946,300. 00
1946-January -----------------------------1, 534,125. 00
-----------.
February--2, 769, 888. 00
March.--------------------------------3,060,980. 00
April.--------------------------------6,36,764. ()
May--------------------------------86,734,2.84
June----------------------------------
20,640,8. 62
26, 516, 04.94
25,465, 647.30
18, 868, 64. 81
10, 872,000. 62
16,947, 26. 28
35, 783, 245. 44
28, 09,753.80
20, 881, 743. 95
12, 079, 02. 50
7,423,464.75
5,991,733.27
Total, fiscal year 1945--........----.....
----Grand total through Jute 30, 1945-._
238,947,723.40
1,480,728,803. 24
Balanceoutstand
229,550, 284.28 ----
$47, 663, 829. 59
85, 148,354 09
79, 232, 514. 1
118,586, 838.
167,056, 886.56
194 224,937. 36
16, 961, 563. f0
1506397, 47: 16
1 897,389 70
192, 644, 95. 88
90,191, 576. 76
128, 277, 546.11
166,118,012.49
113,673, 877. 55
95, 200, 988. 68
80, 513,330 7
-100,378, 213. 64
130, 562, 949.1It
105, 726, 003.
79,170,374.86
61,058, 518. 91
52,040,416.41
50,923,15.66
131,665,985.23
.---
--
1, 349, 062,81. 01------------------
.
48
PEDERAL
HOME
LOAN BANK ADMINISTRATION
EXHIBIT 14.-Interest rates charged member ensttutionson new advances July 1, 1945
Federal Home
Loan Bank
Rate in
effectyp
Type of advance
advance
Percent
Short-term advances amortized within 1 year, or withomu amortization
1
when 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.
On advances for 5 years for GI loans, such advances to be amortized at a
2
rate of 5 percent quarterly
All other advances.
New York---------On short-term advances
2Y On long-term advances.
Pittsburgh ---------.
On secured advances not to exceed 6 months for the purchase of Govern
1
ment securities during war-loan drives with bimonthly amortization of
33 percent.
Secured
advances up to 5 years with quarterly amortization of 2% percent
2
for purpose of repurchasing HOLC share investments
On
advances
up to 5 years, advances exceeding 1 year to be collateralized
2
and amortized 2 percent quarterly. Within certain limits unsecured
advances may be made for a term not to exceed 1 year
3 All other advances
Wmston-Salem
2 All advances.
Cincinnati--------On advances not exceeding 1 year secured by (1) obligations oi01or guaran
1
teed by the Government, (2) other acceptable collateral, advances so
secured not to exceed current redemption price of series F and G savings
bonds held by member
All
other advances
2
Indianapolis.-------1/Y On advances not exceeding 6 months.
On
advances not exceeding 1 year, but in excess of 6 months.
2
On long-term advances.
2
Ohicago- -------..---On short-term advances amortized m equal monthly, quarterly, or semi
1
annual installments, such advances must not exceed in the aggregate 10
percent of the gross assets of borrowing member.
On short-term advances which exceed 10 percent of member's gross assets
or which are unamortized
On long-term advances.
3
Des Moines-------On secured advances not exceeding 6 months, without amortization require
1
ment, for purchase of Government bonds. Such advances, together with
other type of short-term advances to a member shall not exceed 40 percent
of its line of credit.
Advances not exceeding 1 year.
2
Advances exceeding 1 year.
2
Little Rock--------All advances
2
oth a------------- Do.
PortF lnd-.-----collaterahzed by Government obligations.
22 Advances
On unsecured advances not exceeding 6 months, for the retirement of
Treasury or HOLO moneys during the month of July 1945. renewal of
such loans to be on a secured basis.
All other advances.
3
Los Ange es-----On
1 year secured advances to replace funds invested m Government se
U%
curities between Jan. 1, 1942, and Apr. 1, 1945, payable quarterly (total
obtainable limited to purchase price or par value, whichever is less, o,
securities purchased).
On 6 months secured advances for purchase of Government securities or to
replace funds so invested since Apr. 1, 1945, payable quarterly (total ob
tainable limited to purchase price or par value, whichever is less, of se
curities purchased). (Foregoing advances limited to $100,000, or 60
percent of line of credit, whichever is greater)
All other advances.
Boston.-------------
NoTE.-Rates on advances to nonmembers are 2 percent higher, except Cincinnati which charges 1
percent m(e.
/
Order 397t4, Mar. 15, 1945: Effective Apr. 1, 1945, all advances made by a Bank for the purpose of enabling
member institutiobs to participate in war-loan drives and/or purchase Government securities through sub
seAtiptn, or oth~swise, shliall be on a short-term or amortization basis fully repayable within periods not
exceeding 6 months
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58
FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT 18.-Federal Home Loan Bank System of the Federal Home Loan
Bank Administration-Statement of receipts and disbursements during the fiscal
years 1944 and 1945
[Cash basis]
Fiscal, 1944
Balance at beginning of fiscal year--..-------------.......--------------Receipts, by sources.
Treasury appropriation-----------------------------------------Home Owners' Loan Corporation------------------------------Federal Savings and Loan Insurance Corporation-----------------Fees, Examining Division and Review Committee----------------National Housing Agency----------------------------------------Administrative Department, Federal Home Loan Bank Administra
tion---.........--------------------------------------------------...................
Federal Works Agency--........-- -------------------------------Department of Justice--..........................................-----.....--------Miscellaneous refunds----------------.......................----------------------........
Federal Home Loan banks....................------........----------------------------...........
Sale of material...----------------------------------------------Refund from Treasury----------.......................------------------------------............
Refund from Federal Loan Agency.------------------ -------------Refund from National Housing Agency .....................--------------------------Total receipts ........----................................---------------..--------------......
Total cash and receipts-----------............---........................------- ------------
$409,119.12
$289, 216.31
0
27,957 44
75, 702.99
953, 477 51
0
0
1,669.70
121,902.82
961, 958.06
565.32
0
0
0
6,662 90
350, 000.00
446 00
1,826 41
216 73
1,814.84
802.17
868.99
344. 15
540. 52
450,000.00
85 00
0
0
744.74
1,418,104.82
1,827,223.94
1,539, 481.47
1,828,697. 78
Disbursements
Salaries
-----------------------------------------------1,010,073 87
Supplies and materials--...
----------------------------------6,805 19
Communications...-------------------------------------14,481 80
Travel
-------------------------------------------------202,155 41
Transportation of things--------...
-------------------------------355 49
Printing and binding- ............................................
---------------------------------------2,802 49
Other contractual services....----------------------189,195 53
Rents and utilities ...-----------------------------------------69,230 36
Equipment, furniture, and fixtures--------------------------------135 94
Periodicals and newspapers -------------------317.55
Repayment to Home Owners' Loan Corporation and Federal Sav
ings and Loan Insurance Corporation ..........-----------------------------0
Transferred to administrative expenses
Federal Loan Agency assessments-----------------------------0
National Housing Agency assessments -----------42, 454 00
Administrative Department, Federal Home Loan Bank Admm
istration.........---------------------------..........................---------------------...............
0
Total disbursements---------....................---------------------Balance at end of fiscal year....................---------.......------......
Fiscal, 1946
1,057,830. 01
8,022 33
11,407 89
193,946 48
485.52
746.63
44,059. 21
63, 578 98
433 40
271.08
0
0
28,452.00
139, 867.00
1,538,007 63
1, 549,.100.53
289,216 31
279,597. 25
EXHIBIT 19.-Names and addresses of Federal Home Loan Banks and area served
by each
Name and address
Area served
Connecticut.
Maine.
Massachusetts.
New Hampshire
Rhode Island.
Vermont.
Federal Home Loan Bank of New York, 165 Broadway, New York 6 N. Y-........ New Jersey
New York.
Puerto Rico.
Virgin Islands.
Federal Home Loan Bank of Pittsburgh, 1510 Clark Bldg., 7th St. and Liberty Ave., Delaware.
Pittsburgh 22, Pa.
Pennsylvania.
West Virginia
Federal Home Loan Bank of Winston-Salem, Reynolds Bldg., Winston-Salem 3, Alabama.
N. C
District of Columbia.
Florida
Georgia.
Maryland.
North Carolina
South Carolina.
Virginia.
Federal Home Loan Bank o' Cincinnati, Chamber of Commerce Bldg., Cnmemnati,
Kentucky.
2, Ohio
Ohio.
Tennessee.
Federal Home Loan Bank of Boston, 111 Devonshire St., Boston 9, Mass--------.........
59
-FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT
19.-Names and addresses of Federal Home Loan Banks and area served
by each-Continued
Name and address
Area served
Federal Home Loan Bank of Indianapolis, 614 GuarantyBldg., Indianapolis 4,
Ind.
Federal Home Loan Bank of Chicago, 105 West Monroe St., Chicago 3, Ill ---Federal Home Loan Bank of Des Moines, Des Moines, Bldg., Des Moines 9, Iowa,
Federal Home Loan Bank of Little Rock, 623 Main St., Little Rock, Ark ---
-
Federal Honme Loan Bank of Topeka, National Bank of Topeka Bldg., Topeka,
Kans.
Federal Home Loan Bank of Portland, 608 Pacific Bldg., Portland 4, Oreg--------
Federal Home Loan Bank of Los Angeles, 311 South Spring St., Los Angeles 13,
Calif.
Indiana.
Michigan.
Illinois.
Wisconsin.
Iowa.
Minnesota.
Missouri.
North Dakota.
South Dakota.
Arkansas.
Louisiana.
Mississippi.
New Mexico.
Texas.
Colorado.
Kansas.
Nebraska.
Oklahoma.
Alaska.
Idaho.
Montana.
Oregon.
Utah.
Washington
Wyoming.
Arizona.
California.
Hawaii.
Nevada.
EXHIBIT 20.-New mortgage loans made by member savings and loan associations
[In thousands of dollars]
Total
Period
Fiscal year 1943, total - ---
Home purchase
Refinancingm
Reconditionmg
ng
-148,017
Other
895, 534
112, 308
545, 580
29, 070
60, 559
Third quarter, 1942 - - Fourth quarter, 1912 -------First quarter, 1943 -- -Second quarter, 1943--------
239,077
201, 228
181,486
273, 743
39,233
26, 011
19, 706
27, 358
135,807
118, 594
108, 828
182, 351
38,631
35, 048
33, 755
40, 583
9,695
7, 282
5, 315
5, 778
15,711
14,-293
13, 882
16, 673
Fiscal year 1944, total---------
1,220,163
114,705
849, 336
147, 366
27,186
- 81, 570
313, 694
282,133
265, 384
358,952
32, 315
24, 732
27, 705
29,953
216, 798
194, 716
179, 962
257,860
39, 205
-35,, 558
32 965
39, 638
7, 684
6,842
5, 059
7,601
17, 692
20, 285
19, 693
23,900
1, 453, 931
89, 438
1, 065, 605
164,137
28, 987
105, 764
362,131
331, 636
319, 484
440, 680
20,134
15, 598
14, 036
39, 670
8, 012
6,464
5, 743
8, 768
23, 686
24, 308
26, 476
31,294
Third quarter, 1943 -------Fourth-quarter, 1943 ------First quarter, 1944 Second quarter, 1944_---Fiscal year 1945, total ---------Third quarter, 1944--------Fourto quarter, 1944------First quarter, 1945 -------Second quarter, 1945 -------
.
Construetion
270,
245,
235,
314,
386
858
009
352
39, 91.3
39. 108
38 220
46, 596
Source. Division of Operating Statistics, Federal Home Loan Bank System.
60
FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT 21.-Combined statement of condition of member savings and loan asso
ciations, as of Dec. 31, 1943 and 1944
[In thousands of dollars]
All member asso
ciations
1944
1943
Number of reporting asso
ciations.-----------------.
3, 701
ASSETS
I
3,656
_Federal associa
tions
1943
1, 466
1944
Insured State as
sociations
1943
974
1,464
1944
995
Uninsured State
associations
1943
1944
1, 261
1,197
First mortgage loans ....------ 4, 047, 693 4, 273,720 1,920, 735 2, 063, 038 1, 103, 944 1, 204,765 1,023, 014 1, 005, 917
Other loans (including share
loans) ------------------14, 262
12,002
4.442
4, 297
2, 698
5,786
4, 034
5,007
Real estate sold on contract..
141,422 116,748
28, 866
52,245
44, 447
51, 269
43, 435
37, 908
21,344
Real estate owned -------69, 512
13,011
21, 658
11,355
12,461
36,827
26, 510
Federal Home Loan Bank
56, 024
28, 204
32, 524
15, 288
17, 012
12, 532
62,251
12,715
stock --------------------U. S. Government obliga
tions-------------------738,648 1,490,747 375,201 811, 288 206, 077 410,018 157, 370 269,441
Other investments (includ
25,070
3, 271
ing accrued interest) -----3, 386
13,015
11., 822
7,884
22.977
8, 669
Cash on handl and m banks119, 054
103,044
77, 276
387, 229 347.348 183, 750 167, 028
84, 425
Office building (net)--..
21, 547
13, 644
10, 725
14,117
22, 965
46, 850
11, 659
47,807
Furniture, fixtures, and
3,003
1,370
equipment (net)---------..
1, 564
517
5,216
4,890
2,808
844
....---------2, 642
1,728
/2,
554
2,828
Other assets.....
6, 674
2,392
1,975
7,445
Total assets----------
5.538,600 6,422,762 2,616,054 3, 167, 514 1, 551, 275 1, 821,611 1, 371, 271 1,433, 637
LIAPILITIES AND CAPITAL
U. S. Government invest
ment -----------------Private 1 repurchasable
---------...
shares Mortgage pledged shares, - Advances
from
Federal
i Home Loan Banks ----
Other borrowed money ---Loans m process...--Advance payments by bor
rowers-------------------.....----Other liabilities 2..
Permanent reserve or guar
anty stock -------....
Deferred credit to future
operations ---------Specific reserves -----.........---General reserves --------Undivided profits and sur
plus
-------------....
69, 326
35, 529
54,454
28, 393
14, 872
7,136
4, 689,103 5,500,973 2,260,034 2, 764, 077 1, 306, 856 1, 549, 892 1,122, 213 1, 187, 004
21, 262
3,145
17,876
89, 8o7
79, 038
112, 057 103,445
4,324
107,869
19, '148
37, 508
126,882
63, 527
35,134
74,386
12, 111
21,651
89, 680
45, 605
18, 757
25,696
3,402
13, 292
32, 175
9, 981
13,038
7, 787
3, 635
2, 565
5,027
7,941
3,339
26,082
22,077
30,109
22, 169
12, 544
10,104
14, 180
10,496
8,092
7, 568
9, 235
8,273
5, 446
4,405
6, 694
3,400
25, 509
25,936
21,450
22,073
4,059
3, 863
12, 513
7,480
273, 591
,10,312
7,543
313,610
5,161
3,675
98,310
4, 302
3,876
120,344
3, 642
2,119
90, 298
3,265
2, 206
103, 215
3, 710
1, 686
84, 983
2, 745
1, 461
90,051
136, 337
147, 593
59, 300
64,659
36, 112
39,860
40,925
I
-
~
43,074
---------
Total liabilities and
capital............---------- 5, 538,6006, 422, 762 2, 616, 054 3,167, 514 1, 551, 275 1, 821, 611 1, 371,271 1,433, 637
1 Includes deposits and investment certificates.
2 Includes bonus on shares.
Source: Division of Operating Statistics, Federal Home Loan Bank System.
61
]IFEDERAL HOME LOAN BANK ADMINISTRATION
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66
FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT 24.-FederalSavings and Loan Insurance Corporation-Statementof
condition
June 30, 1945
ASSETS
Cash in U. S. Treasury:
Special deposit account---.....---------------.--.
-----..
$1,567,001.28
Available for
Administrative expenses'
1942._-------.--------------------------------------------0
1943-............------------------------------.
7,099 84
1944--------------------------------------------------------9,680 90
51,764 63
1945 -------------------------------------------------633 87
Employees' bond llotment account-------------------------------7,462 40
----------------------------------Withholding tax account
Accounts receivable:
Insurance premiums:
----Payments due -........-- -------------------------------Payments deferred....---------- -----------------------------Admission fees due ------------------------------------------------Due from receiver for institutions in liquidation .--------------Miscellaneous--------------------------------------------------
Investments:
U. S. Government obligations and securities fully-guaranteed by
------- -United States-(par value)----- Net unamortized premium and discount on investments- ----------
Accrued interest on investments -----------------------------------Subrogated accounts in insured institutions in liquidation-.....--.--...------Less: Allowance for losses----------------------------------------
Total assets ------------------------------------
-----
LIABILITIES AND CAPITAL
Liabilities
Accounts payable--------------------------------Estimated expenses incurred and not billed at close of fiscal year------------.
Employees' War Savings bond allotments------------Employees' withholding tax-- ------------------------------------------Unsettled insurance claims ----------Undisbursed commitments for contributions to insured institutions -
Deferred income
------------------------------Unearned insurance premiums
Prepaid insurance premiums---------------------------------------
Capital:
Capital stock
June 30, 1944
$950, 478. 02
2,571
7,106
30,472
-0
2,339
7,402
95
98
25
79
60
1, 643,642 92
1,000,371.59
14,712 39
1,391,001 96
128 38
1,771 73
11,574.01
9,721.54
* 1,167,313 19
0
1, 652 53
345.60
1,419,188 47
1,179,032 86
155,462,000 00
21, 100.74
146,782,000 00
20,408 51
155,483,100 74
146,802,408 51
163,034.76
181,977 89
2,169,'049 66
615,519 87
3, 169, 558 02
701,838.57
1,553, 529. 79
2,467, 719.-45
160,262, 496 68
151, 631,510.30
10, 719.44
34, 536 42
633 87
7, 462 40
55 67
54, 148. 10
0
21, 638.00
2, 339 79
7,402 60
55 67
80, 265. 75
107,555 90
111, 701.81
2, 661, 738 95
"422. 60
2, 232,858. 78
7,344.42
2,662, 161 55
2, 240, 203 20
100,000,000 00
-100,000,000. 00
----------------------------Reserve fund as provided by law.....
27,492, 779 23
22, 279. 605.29
(In instifutions in default the Corporation estimates a loss of
$2,127.40 [$2,496 98] 1 on insured accouhts, aggregating $18,418 07
'
[$19,975 50] 1 pending settlement or not claimed.)
--------------------Special reserve for contingencies..--------
30,000,000 00
27, 000,000. 00
------------------------------------------
Total, liabilities and capital-----------.......-------------------1 As of June 30, 1944
57,492, 779. 23
49, 279, 605. 29
160, 262, 496. 68
151, 631, 510. 30
FEDERAL HOME LOAN BANK ADMINISTRATION
67
EXHIBIT 25.--FederalSavings and Loan Insurance CorporationIncome and Expense
statement
July 1, 1944
through
June 30, 1945
Income
Insurance premiums earned.............---------.........---------------------.. .$5,
Admission fees earned-------------------------------------Interest earned on U. S. Government obligations and securities fully
guaranteed by United States ---------------------------.
.
Miscellaneous
--------------------------------------------
Administrative expenses:
Personal services --------------------------------------Travel
.....
------------------------------------..---------------........
Transportation of things-----------------------------------------Communication services-------------------------------------Rents and utility services---------------------------------Printing and binding -------- _
..--- -----_
-------------Other contractual services----------------------------- ------Supplies and materials......---------------------------------------------------..----------------------------Equipment ---Services rendered by FHLBA ..--------------------------------Services rendered by Administrative Department, FHLBA ..---Services rendered by HOLC----------------------------------Administrator's office-NHA ... ....
------------Administrator's office-NHA-Penalty mail------------------------
Nonadministrative expenses.
Personal services
------------------------------------------Travel _
-------------------------.
..
Transportation of things-- -------------------------------------Communication services-----------..........---------------..-------------.......
Other contractual services-- ----------------------------------Supplies and materials------------------------------------------
July 1,,1943
through
June 30, 1944
080, 795 63
6, 527. 75
$4,245,150.52
13,464.87
3, 549,465. 28
251.11
3, 277,125. 47
6. 20
8, 637,-039 77
7, 535,747. 06
159,465. 39
2,536 32
2. 63
2, 745. 81
14, 233 44
684.53
10,062 32
741 82
5, 347-62
129, 643 75
92, 695.00
4, 681 56
6, 249 00
1,102 00
177, 572.08
3, 453.79,
299. 26
4, 770. 46
23,389. 58
381. 77
5, 244. 30
594. 44
278.-90
98, 508.39
0
106,189 01
4, 985. 00
0
430,191.19
425, 666 98
21,441. 53
1,303. 08
2. 80
110. 67
2, 654 33
11 30
25, 438. 77
632,11
.60
69. 00
833. 72
0
25, 523.71
26,974.20
Net income from operations -----------------------------------.
Nonoperating charges and credits: Profit on sale of securities ....----------
8, 181,324. 87
0
7,083,105. 88
1,133,887. 93
Net income for period.--------- ----------------------------Adjustment of net income for prior years----------------------------
8,181,324. 87
672. 09
8, 216,993.81
764. 48
8,181,996 96
8, 217, 758. 29
Net income---------------------- --------------------------
RECONCILIATION OF RESERVES AND SURPLUS
Balance as of June 30, 1944--......---.................--------------------.....----------------$49,279, 605. 29
Add:
Recoveries on contributions to insured institutions -----------------$41,845.39
Allocation of income to special reserve for contingencies -----------3,000,000 00
Allocation of income to reserve fund as provided by law-----------5 181,996. 96
Adjustment of allowance for losses on subrogated shares ---..---- ---86,606 45
Adjustment of undisbursed commitments for contributions ........-------13, 562 95
8, 324, 011.75
Total------------------------------------------------------Deduct:
Approved contributions to insured institutions -------------------110,550.06
Allowance for losses on subrogated shares-...------------------------287. 75
Balance as of June 30, 1945-----------------------------................-------................
57, 603,617.04
110,837.81
57,492,779.23
68
FEDERAL HOME LOAN BANK ADMINISTRATION
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70
FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT 27.-Home Owners' Loan Corporation-Balancesheet as of June 30, 1945
ASSETS
Mortgage loans, vendee accounts and advances, at present face value--------------------$964,615,332.57
Interest receivable-------------------------------------------------------------2, 546, 217. 24
Property
Owned
----------------$4,143, 695 49
In process of acquiring title -----------------------------------468,179 05
S4, 611, 874. 54
Total- -----------.--------.
.
Less reserve for losses --------------------------------------------
-----------.
-
971, 773, 424. 35
990, 904 26
Total ----------------------------------- -. -------Investments, at cost:
Federal Savings and Loan Insurance Corporation (entire capital)
$100, 000, 000 00
Savmgs and loan associations
Federalchartered ------------$20,096, 450 00
State chartered _
- 6,136, 500 00
958, 782, 520 09
-
-12,
26, 232, 950. 00
U. S. Treasury N percent certificates of indebtedness (borrowers'
special deposits) at face value-
15, 000, 000 00
Bond "retirement fund: Cash (including $10,317,775 00 deposited with
- U. S. Treasury for retirement of matured bonds)----------------------Cash:
Operating funds (includes $1,600,958 79 payable to bond retirement
fund in July 1945, and $8,210,580.47 deposited by borrowers and
employees (see contra)) ------------------------------------------$26,
NHA homes conversion program-Conversion fund (see contra) - - Special funds held by U. S. Treasury for payment of interest coupons
(see contra) --------------------------------------Special funds-Federal tax withheld (see contra)-----------------Special funds held by U. S. Treasury for refunding of 1% percent
series M bonds called as of June 1, 1945----------------5,
Fixed assets.
Home office land and building, at cost Furniture, fixtures, and equipment at cost
Total--
-
..
-.
-
.. -
10, 404, 109. 35
907, 047 81
109,194 83
713, 098 03
159,653.28
939, 925 00
33, 828, 918. 95
--
2, 987, 819 93
1, 423, 527. 68
---------
-------
4,411,347.61
1, 902, 812 38
Less reserve for depreciation--------------------------
2, 508, 535 23
Other assets
Accounts receivable- .......-----------------Less reserve for uncollectible accounts receivable- ...---------------Total------------------------------------------------Mineral and oil rights--.-------------------------------------Treasury bonds accepted as repayments (to be retired in July 1945).
Deferred and unapplied charges ...
141, 232, 950.00
---......
208, 787. 34
53, 220. 36
.
155, 566 98
8.00
200. 00
----------------------------------------------
Total----..........................--------..............--.........-------.......------------.....-......-----
155,774.98
26,398.61
1,146,939, 207. 21
LIABILITIES AND CAPITAL
Bonded Indebtedness (guaranteed as to principal and interest by the
United States, except $129,875 of unpaid matured 4 percent bonds
guaranteed as to interest only):
Bonds outstanding,' not matured-...--...---------------------- $1,009,982, 000.00
Bonds matured, on which interest has ceased--------16, 257,700.00
------
Accounts payable:
Interest due July 1, 1945, and prior thereto (see contra) --------------------------------Vouchers payable .-Accrued payroll-_-__--------------------Insurance premiums ...---------------------------------------------Commissions to sales brokers-----------------.............------Special deposits:
By borrowers.........--------------------------------------------ly employees -------------------------------------------Federal tax withheld (see contra)-...-.----------------------Miscellaneous.................------------------------------------------........--
1,026,
I.
- 239,
- I 700.00
- -713,091.33
3, 579. 57
185,647.59
82, 478.81
11,976. 25
23,195,169.30
15,411.17
159, 653. 28
33, 112. 50
Accrued liabilities------------------------------------------------------Liability for special funds held:
$106,239.12
NHA, homes conversion program.....-------------- -------------Accrued payroll_---- --------------------------------------2,955. 71
244001-19.80
136, 771.24
109,194. 83
Deferred and unapplied credits ---- _
------------------------------------1,374,271.86
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; initial-repairs and reconditioning subsequent
to acquisition. Unpaid interest included in these values amounts to $211,005.32.
FEDERAL HOME-LOAN BANK ADMINISTRATION
71
EXHIBIT 27.-Home Owners' Loan Corporation-Balance sheet as of June 30,
1945-Continued
LIABILITIES AND CAPITAL-continued
Reserves:
$517,729.01
Fire and other hazards ...........------------------..................-------------------Fidelity and casualties....--....-------.........------------------------------250,000. 00
- -
Capital stock less deficit:
Capital stock:
Authorized, issued and ouitstanding .-- --------------------2 $92,329,946. 26
Losses in excess of net earnings----- -------13, 758, 633. 27
Reserve for future losses---------........----------...
-
$767,729.01
200,000, 000.00
106,088,579. 53
93, 911,420. 47
1,146, 939, 207. 21
2The 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; andlon fidelity and casualties in
of its cumulative net earnings.
excess
3
The reserve for losses is being accumulated at axate which, on the basis of careful estimates, will approx.
imate 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 28.-Home Owners' Loan Corporation-Statementof income and expense
for the fiscal year 1945
Operating and other income:
Interest:
Mortgage loans and advances--------... ----------------..........------------Vendee accounts and advances---------...........------..........................-------------------------Total.---------------------...................--....................................----------------------------------Special investments- ...--.......-------------------..........................---------------------.
Total-------------49,
Property income
$33, 464,077. 72
15,671,932.71
49,136,010.43
131,332.09
267, 342. 52
-----------------------------------------------------
Dividends received from savings and loan associations----------------------------Miscellaneous----------------------------------------------------Total income..
----.-
938,446.35
988,871.08
1, 14, 789. 49
------------ -------------------- 52,409,449.44
Operating and other expenses:
Interest on bonded indebtedness----------------15,106,378,13
Less-amortization of premium on-bonds sold-------------------------------594, 740. 73
Total14,
511,
637.
40
Total--.- ------------------------------------------------------14,511,637.40
Administrative
and general expenses:
Administrative expenses:
Current fiscal year ------------------------------------------ 6, 903,050 61
First preceding fiscal year ........-------------------------------------------47, 319. 01
All other fiscal years ---- - ----------------------------------------2 5, 813. 23
General expenses---------------------------------------------------J141, 887. 27
Property expense--------------------------------.-----------------956,104.14
Total expenses ----------------------
---------------
22, 554,185.20
Net income before provision for losses which may be sustained in the liquidation of assets-. 29, 855, 264. 24
Provision for losses:
On mortgage loans, interest, and property ---------------------------------- 1,800,000.00
For fidelity and casualties---------------------------------------------22, 098. 51
For fire and other hazards-----------------------------13,759 -50
For uncollectible accounts receivable--....----- -------------------------------.
21, 988.83
Total--
....----.....
-----------------------------------.............----.
1, 857, 846.84
Net income for-fiscalyear after provision for losses--..-------------..............
----------27, 997, 417.40
1 Includes write-off of the balance of unamortized premium on 11 percent series M bonds called for re
demption as of June 1, 1945.
2 Net credit.
72
FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT 29.-Home Owners' Loan Corporation-Statement of income and expense
from the beginning of operations June 18, 1933, to June 30, 1945
Operating and other income:
Interest:
.
$979,937,778.88
.---------------.
Mortgage loans and advances------......
95, 683,094.91
Vendee accounts and advances -..--------------...-------------.............
.
: .
.----------------------Total
.......--.
Special investments ...-----------------...............---------------------
1, 075,620, 873.79
780,431.92
Total------......................-----------------.................------------------.....
$1, 076,401, 305.71
Property income -.....
..
..-----------------------------138,482,617.80
Dividends received, Federal Savings and Loan Insurance Corporation ---------3, 035,326 09
Dividends received from savings and loan associations
.-----------------..-----43,339, 222 08
Miscellaneous .........-----.---------------------------------------6,497, 215. 34
Total....
-----------------------------------------Operating and other expenses'
------.
Interest on bonded indebtedness ------- -----Less amortization of premium on bonds sold- ..----.....-------.....--......
Total -------------------------Amortization of discount on refunded bonds-- ..-----.-Administrative and general expenses -----------------------Property expense ........--------------.. ------.. ---...---
.
.
1, 267, 755, 687.02
$632,938, 898. 25
1, 618, 866.43
631, 320,031.82
7,147, 710 28
273, 187, 071 62
112,781, 329.49
1,024,
436, . 21
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)---------------------- $347, 937,153. 25
1, 298, 426-91
For fidelity and casualties---------------------------------------/881,252 50
For fire and other hazards.-----------------------------------35, 860.16
For uncollectible accounts receivable.-----------------------------
243, 319, 543. 81
Loss for period June 13, 1933, to June 30, 1945 ---.
-------Add unlocated payments .------------------------------------Less:
------$14,152.48
Unidentified payments ----------Repayments unallocated-unidentified difference-. 14,197.04
106,833,149.01
350,152, 692. 82
$33, 780. 04
28, 349. 52
5, 430. 52
Deduct surplus adjustment, reserve against fire and other hazards..-...............-------------------
106, 838, 579. 53
750, 000 00
Deficit at June 30, 1945......------------------------------------------------
106, 088, 579. 58
0
@FedFRASER