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79th Congress, 1st Session
House Document No. 206
TWELFTH ANNUAL REPORT OF THE FEDERAL
HOME LOAN BANK ADMINISTRATION
LETTER
FROM
THE COMMISSIONER OF FEDERAL HOME LOAN
BANK ADMINISTRATION
TRANSMITTING
THE TWELFTH ANNUAL REPORT OF THE FEDERAL
HOME LOAN BANK ADMINISTRATION FOR THE PE
RIOD JULY 1, 1943, THROUGH JUNE 30, 1944, COVERING
THE OPERATIONS OF THE FEDERAL HOME LOAN
BANKS, THE FEDERAL SAVINGS AND LOAN ASSOCIA
TIONS, THE FEDERAL SAVINGS AND LOAN INSURANCE
CORPORATION, THE HOME OWNERS' LOAN COR
PORATION, AND THE UNITED STATES
HOUSING CORPORATION
MAY 28, 1945.-Referred to the Committee on Banking
and Currency and ordered to be printed
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1945
LETTER OF TRANSMITTAL
NATIONAL HOUSING AGENCY,
FEDERAL HOME LOAN BANK ADMINISTRATION,
Washington, D. C., May 24, 1945.
The SPEAKER OF THE HOUSE OF REPRESENTATIVES,
Washington, D. C.
MY DEAR MR. SPEAKER: I am sending you herewith the Twelfth
Annual Report of the Federal Home Loan Bank Administration for
the period July 1, 1943, through June 30, 1944, covering the opera
tions of the Federal Home Loan Banks, the Federal Savings and Loan
Associations, the Federal Savings and Loan Insurance Corporation,
the Home Owners' Loan Corporation, and the United States Housing
Corporation.
Again this year, as a wartime economy, we have substantially
curtailed the text of the report and have had it multilithed in our own
duplicating section. The attached copy is one of a very limited
number which have been prepared in compliance with instructions
contained in Budget Circulars No. 379 and No. 389.
Sincerely yours,
JOHN H. FAHEY, Commissioner.
In
CONTENTS
Page
I. The year in retrospect---------- ---------------------------1
Servicemen's Readjustment Act---------------------------1
Residential construction and the real-estate market----------2
Residential conistruction------------------------------2
Building costs ------------------------------------2
Foreclosures
-------------------------------2----Real-estate overhang----------------------------.---2
Mortgage finance and savings--------------------- -------3
Home-mortgage lending in 1943----------------------3
Home-mortgage debt --&
5--------------------------Private savings7-------------------------------------7
II. Federal Home Loan Bank Administration- --------------------9
Administrative expenses of the Bank Administration---------9
III. Federal Home Loan Bank System---------------------------10
Sale of war bonds----------------------------------------10
Lending activity of regional banks-------------------------10
Members' deposits -------------------------------------11
Debenture financing ------------------------------------11
Financial statements------------------------------------12
Interest and dividend rates-------------------------------13
Examination and supervision------------------------------14
Administrative expenses ---------------------------------14
IV. Savings and loan associations--------------------------------16
Number and assets---------....
------------------------------16
Operations in a wartime economy--------------------19
Lending operations---------------------------------19
Increased strength of savings and loan associations--------.....
20
Financial operations---------------------------------------20
Balance sheet---------------------------------------20
Growth in liquidity_---------------------------------20
Statement of operations--------------------------------21
Federal Home Loan Bank Districts-----------------------21
V. Federal Savings and Loan Insurance Corporation----------------22
Insured institutions -------------------------------------22
Operations of the Insurance Corporation---------------------22
Insurance settlements-----------------------------------24
Operations of insured institutions in default-----------------25
VI. Home Owners' Loan Corporation-----------------------------26
General operations-------------------------------------26
Status of accounts-------------------------------------28
Accounts terminated-------------------------------29
Mortgage and vendee accounts ------------------------29
Properties acquired, including those subject to redemption29
Property accounts--------------------------------30
Reconditioning-------------------------------31
Appraisals--------------------------------...
31
Financial statements -----------------------------------31
War housing activities-----------------------------------32
Programming-----------------------------------32
Applications for conversion------------- ------------32
Production-------------------------------------------32
Cost--------------------------------------------32
VII. United States Housing Corporatio----------------------------33
List of exhibits-----------------------------------------------35
Exhibits_-----------------------------------------------------37
V
TWELFTH ANNUAL REPORT OF THE FEDERAL
HOME LOAN BANK ADMINISTRATION
I. THE YEAR IN RETROSPECT
The war continued to be the primary influence affecting the national
economy during the fiscal year 1944. Throughout the year, the na
tional effort was devoted to the operation of the war-production
machine which had been created in previous years. Because of this
tremendous effort, the national income increased to the highest level
in the Nation's history while, at the same time, there was a serious
interruption in the production of such durable consumers' goods as
houses, automobiles, and refrigerators.
This situation has caused inflationary pressure on real-estate prices.
Among the indications of this are reports of serious wartime increases
in appraised valuations, high loan ratios, and inadequate amortization
schedules.
Because of the importance of these changes, the Federal Home Loan
Bank Administration for several years has studied the effect of infla
tion on the operation of home-financing institutions. As a result of
this study, the Federal Home Loan Bank System formulated the
following five-point program to serve as a basis from which to develop
a realistic policy for future lending activity:
1. To focus public attention on existing conditions and developing
trends in real estate and mortgage lending.
2. To urge the development of realistic and adequate safeguards
by all home-mortgage lenders.
3. To assist the members of the Federal Home Loan Bank System
in establishing and maintaining such safeguards through organized
and sustained programs.
4. To cooperate with and solicit and secure the support of State su
pervisory officials and State and National trade organizations in the
home financing field.
5. To offer full cooperation to all organized groups of home-mort
gage lenders so that there may be a planned and agreed attack on the
over-all problem.
SERVICEMEN'S READJUSTMENT ACT
On June 22, 1944, Uongress passed the Servicemen's Readiustment
Act of 1944, commonly known as the GI bill. This act provided,
among other things, for guaranties of loans to servicemen for the pur
pose of purchasing homes. Because of the influence which this may
have on building during the immediate postwar period, savings and
loan associations took an active interest in the bill and cooperated in
its preparation. The associations have engaged actively in promoting
such loans and the first loan made under the bill to enable a veteran of
World War II to purchase a home was made by a Federal savings and
loan association.
2
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
RESIDENTIAL CONSTRUCTION
AND THE REAL-ESTATE MARKET
Residential construction.-Duringthe fiscal year 1944 there was a
decline in residential construction from the preceding fiscal year which
was the first during which the War Production Board's Order L-41
limiting construction had been in continuous operation. This is
shown by the table of new nonfarm dwelling units presented as
Exhibit I of this report.
The number of nonfarm dwelling units completed during the fiscal
year 1944 was approximately 247,000 as compared with 391,700
during the 1943 fiscal year and 652,100 during the 1942 fiscal year.
.Of the 247,000 units built during the fiscal year 1944, a total of 69,248,
or 28 percent, were publicly financed as housing for essential war
workers. This represents a sharp drop in publicly financed units
from the fiscal year 1943 when more than half of the total construction
was built from public funds.
Building costs.-The wholesale price index of building materials,
as reported by the Bureau of Labor Statistics, was 129.4 in June
1944. This represented an increase of 5.9 points in the index during
the fiscal year 1944 as compared with an increase of only 0.6 points
during the fiscal year 1943.
This rise in the wholesale cost of building materials was reflected
in the Federal Home Loan Bank Administration's index of labor and
material costs for constructing a standard six-room frame house in
selected cities. Retail material prices, as reflected in this index, rose
from 123 on June 30, 1943, to 130.7 on June 30, 1944.
In contrast to the fiscal year 1943, when labor costs rose more
rapidly than material costs, the rise in labor costs during the fiscal
year 1944 was much less than the rise in material costs. The index
of the cost of labor to build the standard six-room house increased
from 134.3 on June 30, 1943, to 137.5 on June 30, 1944. During the
same period, the index of total building cost, which includes both
labor and materials, rose from 126.8 to 133. Exhibit 2 presents
these indexes monthly for the 1943 and 1944 fiscal years.
Foreclosures.-The growing strength of the real estate market in
recent years is demonstrated by the decrease in nonfarm foreclosures
as shown in the following table:
Number of nonfarm foreclosures
Fiscal year:
1941--------------------------------------------------69,
169
1942-------------------------------------------------49,890
1943------------------------------------------------------33,402
*1944-------------------------------------------------------20,710
This decrease in forclosures was shared by each of the 12 Federal
Home Loan Bank Districts and by every State except Connecticut and
North Dakota. The Bank District reflecting the smallest improve
ment was the Boston District and even in that District, foreclosures
during the 1944 fiscal year declined more than three-tenths from
those of the previous year. Exhibit 3 presents the number of non
farm real-estate foreclosures during the last two fiscal years, by
Federal Home Loan Bank Districts and by States.
Real-estate overhang.-The estimated book value of residential real
estate owned by operating savings and loan associations, commercial
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
3
banks, mutual savings banks, life insurance companies, and the
Home Owners' Loan Corporation decreased from $946,371,000 on
December 31, 1942,1 to $550,115,000 at the close of the calendar year
1943, or by 41.9 percent. This compares with a similar decline of
27.2 percent during the preceding calendar year. Of the $396,256,000
decrease during the calendar year 1943 in real estate owned by insti
tutional lenders, $127,372,000 was effected by the Home Owners'
Loan Corporation alone. Because of this decrease, the residential
real estate owned by the HOLC declined from $221,512,000 to
$94,140,000 during the reporting period, a decline of 57.5 percent.
This percentage decrease was greater than that accomplished by any
type of private institutional lender.
Of the private institutional lenders, the savings and loan associa
tions, as in previous years, led in the rate of disposition of real estate.
Their holdings declined from $202,686,000 on December 31, 1942, to
$113,304,000 on December 31, 1943, a decrease of 44.1 percent.
Mutual savings banks and commercial banks followed closely with
decreases of 43.3 and 42.1 percent, respectively. As in the preceding
year, the smallest percentage decline of real estate held by institu
tional lenders was that of the life-insurance companies, with a decrease
of 27.9 percent. The amount of residential real estate owned by
financial institutions is shown in exhibit 4.
This rapid reduction in residential real estate held by financial
institutions strengthens the real-estate market because these insti
tutionally owned properties are either actively or potentially a
threat to the stability of the market. Real-estate holdings of mort
gage lenders have now been reduced so greatly that the properties
still held are largely those which, because of obsolescence, local con
ditions, or other reasons are unusually difficult to sell.
MORTGAGE FINANCE AND SAVINGS
Home mortgage lending in 1943.-During the calendar year 1943,
$3,183,000,000 of new mortgage loans was estimated to have been
written on nonfarm one- to four-family dwellings as compared with
$3,155,000,000 during 1942 and $3,810,000,000 during 1941. The
decrease in 1'942 was caused in large part by the decrease in new
building resulting from the order of the War Production Board limiting
construction. This construction-limitation order would have caused
an even greater decline in mortgage lending activity if new loans
made to finance home purchase had not expanded.
Exhibit 5 presents figures for the mortgage loans written by each
of the major lending groups during the years 1931 to 1943. It will
be noted that throughout this entire period, savings and loan asso
ciations ranked first each year except for the years of maximum
HOLC lending. In fact, the savings and loan associations represented
the major support of, the home-mortgage market during the period
before the Home Owners' Loan Corporation commenced operations.
This is evident from the following table showing the estimated volume
of mortgage loans made during thedepression years of 1932 and 1933:
1 These figures on real-estate overhang, together with some others throughout the report, are not available
on a fiscal-year basis and have, therefore, been presented on a calendar-year basis.
73144-45--2
4
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
Type of lender
..
.......
Savings and loan associations-----------------.
..
....---------------------------..
Insurance companies- .
Mutual savings banks----------------------------------
1932
..-----------------$543, 000, 000
....-------------- 54,000,000
150, 000, 000
-------
Commercial banks and their trust departments-- -------------------Home Owners' Loan Corporation.------------------------------------..........-------------------Individuals and others ....
170, 000, 000
175,000,000
Total...............------------------------------------------------.....1,092,000,000
1933
$414, 000,000
10,000,000
99, 000.000
110, 000,000
132, 000 000
100,000,000
865, 000,000
During 1943, savings and loan associations wrote 37.2 percent of
all new residential loans made. The total of $1,184,000,000 of home
mortgages written by the associations in 1943 represented an increase
of 12.7 percent over 1942. In contrast, other private institutional
lenders wrote a smaller volume in 1943 than in 1942.
Insurance companies in 1943 placed $272,000,000 of new mortgages.
This represented a 27.3-percent decline from the volume written in
1942. Commercial banks and their trust departments wrote $515,
000,000, or 15 percent less than in 1942, and mutual savings banks
wrote $120,000,000, or 7.7 percent less than in 1942. The experience
of "individuals and others" was more favorable inasmuch as they,
like the savings and loan associations, wrote a larger volume of new
mortgages in 1943 than in 1942. Their total of $1,038,000,000 of new
loans in 1943 represented an increase of 8.8 percent over the volume
of $954,000,000 for 1942.
The general lending activities of the Home Owners' Loan Cor
poration ended in 1936. Since that date, the Corporation has been
liquidating. In order to carry on this liquidation, it is necessary for
the Corporation to take purchase-money mortgages to finance the
sale of properties which it has been forced to acquire. In addition,
the Corporation makes advances to borrowers to enable them to pay
taxes, make essential repairs, and to make payments for similar
purposes. During 1943 this activity by the Corporation totaled
$54,000,000 as compared with $40,000,000 during 1942. Of the
$54,000,000, approximately $50,000,000 represented purchase-money
mortgages. The increase in 1943 resulted from the Corporation's
success in selling most of its remaining real estate.
Mortgage lending can be studied on a fiscal-year basis by means
of the mortgage-recording data collected for several years by the
Bank Administration. Although recordings cannot be taken as an
accurate measure of new lending, because they include changes in
existing mortgage contracts as well as new mortgage lending, never
theless, recordings give a valuable picture of trends in mortgage
financing and in the activity of the different types of lending insti
tutions.
Mortgage lenders throughout the country recorded 1,385,487 non
farm mortgages of $20,000 or less in the total amount of $4,334,549,000
during the fiscal year 1944. In comparison, 1,237,396 mortgages were
written in the amount of $3,639,814,000 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.
REPORTP FEDERAL HOME LOAN BANK ADMINISTRATION
5
Home mortgage debt.-The total nonfarm home mortgage debt con
tinued during the calendar year 1943 the decline started during the pre
ceding year. The total outstanding mortgage debt on one- to four
family dwellings was $19,512,000,000 on December 31, 1943, a reduction
of $396,000,000 from the total of $19,908,000,000 outstanding the year
before. This decrease compares with a decline of $187,000,000 during
1942. The decline in mortgage debt results from the accelerated rate
of repayment made possible by higher incomes and from the fact that
new lending was largely for home purchase and refinancing. Because
new loans for these purposes are frequently accompanied by the
cancellation of previous mortgages, such new loans usually do hot
cause a great increase in total mortgage debt.
In 1942 the decline in mortgage debt was entirely accounted for by
the decrease in the outstanding mortgages of the Home Owners' Loan
Corporation which were reduced by $210,000,000 during that year.
In fact, if the mortgage portfolio of the Corporation is disregarded, the
combined total debt held by all other lenders increased during the
calendar year 1942.
During the calendar year 1943, the Home Owners' Loan Corporation
was again the most important factor in causing the decrease in mort
gage debt. Of the total decrease of $396,000,000, $229,000,000 repre
sented the decline in outstanding mortgages of the Corporation. How
ever, for the first time in several years, the outstanding mortgage debt
held by other lenders declined also. The greatest change was that of
"individuals and others," whose mortgages decreased by $250,000,000.
Smaller declines were recorded by mutual savings banks (whose mort
gages decreased $40,000,000 in amount), by commercial banks (with a
decline of $30,000,000), and by savings and loan associations (which re
mained virtually unchanged with a decline of $2,000,000).
In 1943, as in the preceding year, insurance companies increased
their mortgage holdings substantially, the increase being $155,000,000
in 1943 as compared with $279,000,000 in 1942. It will be noted that
insurance companies experienced the only major increase in mortgage
debt held during 1943, while their volume of new mortgages written
during that year declined substantially. At the same time, "individ
uals and others" increased their volume of new loans written, but suf
fered a substantial decline in outstanding mortgage loans. This ap
pears to be a reflection of the fact that a substantial portion of the new
loans written by individuals and others were purchased by insurance
companies.
On December 31, 1943, savings" and loan associations held $4,
554,000,000, or 23.3 percent, of the total mortgage debt. Accordingly,
the associations held a greater portion of the debt than any other in
stitutional lenders. The mortgages held by the savings and loan asso
ciations were exceeded only by those of the miscellaneous group, which
includes individual lenders and others, which held 31.3 percent of the
mortgage debt. A-survey of the estimated home-mortgage debt from
1931 to 1943 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 following table:
UREPORT
FEDERAL HOME LOAN BANK ADMINISTRKI TON
Estimated balance.,of outstanding mortgage loans on nonfarm 1- to 4-fatmily dwellings
[Millions of dollars]
Dec. 31
Percent
change
Type of mortgagee
1942556
2, 255
2,700
2, 480
1, 567
6, 350
$4, 554
2, 410
2,660
2, 450
1, 338
6, 100
119, 908
19,512
Savings and loan associations-----------------------------------'1$4,
Insurance companies--------------------------------------------Mutual savings banks ----------------------Commercial banks --------------------------------------------Home Owners' Loan Corporation--------------------------------Individuals and others-----------------------------------------Total---------------------------------------------------
1943
(2)
+6. 9
-1.56
-1.2
-14 6
-3A
-2.0
I Revised.
2 Less than 0.05 percent.
Two opposite trends marked the growth in volume of mortgage
loans since the middle of the decade of the thirties. During the
period from 1935 to. 1943 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 PHA-insured mortgage loans on nonfarm 1- to
4-family dwellings
[Millions of dollars]
Type of mortgagee
1935
1943
Increase
Savings and loan associations--$16
$322
$306
Life-insurance companies --------------------------------------------6
1,282
1, 276
Mutual savings banks ----7---------- ------------------------------5
302
297
Commercial banks --------------------------------------66
1, 737
1. )71
Home Owners' Loan Corporation-------------------- --- --- ---------Individuals and others --------------------------------------- ------2
-355
53
Total ------------------------------
---------------------------
95
3,998
3903
It will be noted that during this period there was a total increase of
almost $4,000,000,000 in these insured mortgages. Most of the
increase was effected by life-insurance companies and by commercial
banks, both of -which types of organizations were faced with the
problem of investing billions of dollars of new savings. Through the,
use of P11A-insured mortgages, thiese banks and insurance companies
were enabled to invest large sums in the home-mortgage market
without having the intimate knowledge of local conditions which
previously was necessary on the part of home-mortgage lenders.
In contrast, uninsured home-mortgage loans decreased by nearly
$2,000,000,000 during the satme period. This decrease, and its dis
tribu ,tionamong the different types of lenders, is'shown in the following
table:I
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
Estimated balance of outstanding uninsured mortgage loans on 1- to 4-family nonfarm
homes
[Millions of dollars]
Type of mortgagee
1935
Savings and loan associations ..--------------------------$3, 277
Life-insurance companies- .-------------.
------------1, 275
Mutual savings banks---------------------....------------2,845
Commercial banks --------------------.1, 123
Home Owvners' Loan Corporation--------------------..-----2, 897
Individuals and others
-------------------5, 998
Total
.-----------.---------------------
17,415
1943
change
$4, 232
+$955
1,128
-147
2, 358 -487
713
-410
1, 338
-1, 559
5, 745
-253
15,514
change
+29.1
-11.5
-17. 1
-36. 5
-53. 8
-4. 2
-1, 901
It can be seen from this table that despite the increasing prosperity
from 1935 to 1943, all types of lending institutions except savings
and loan associations gradually withdrew their support from the
uninsured mortgage market. Lenders other than savings and loan
associations decreased their holdings of uninsured mortgages by
almost $3,000,000,000. This was partly offset by an increase of
$1,000,000,000 of such mortgages by savings and loan associations.
It was shown previously that the savings and loan associations
represented the major private support of the home-mortgage market
during the depression. This, together with the support of the unin
sured mortgage market by the associations during the last' decade,
indicates that one of the major functions performed by the savings
and loan associations has been to provide the continuous, support of
the home-mortgage market needed during periods of depression and
prosperity in order to encourage home ownership. Savings and loan
associations are qualified to perform this function because of their
intimate knowledge of local conditions.
Private savings.-The long-term savings of individuals continued
during 1943 the rapid increase of previous years. The following table
shows for the last few years the increase in savings represented by
accounts in savings and loan associations, life insurance policies,
savings deposits in banks, postal savings, and United States savings
bonds:
Increase in savings in selected media
Calendar year:
1941 ----------------------------------------------1942------------------------------------------------8,
1943------------------------------------------------
$3, 907, 000, 000
881,000,000
15, 383, 000, 000
The gain during 1943 in each of the selected savings media is shown
iii the following table. The distribution of long-term savings from
1936 through 1943 and an explanation of the source of these figures.
are presented in exhibit 8.
8REPORT
FEDERAL HOME LOAN BANK ADMINISTRATION
Volume of long-term private-savings in selected savings media
[Millions of dollars]___________
Increase
Dec. 31-
Life-insurance companies-----------------------------Mutual savings banks--------------------------------Insured commercial banks----------------------------Savings and loan associations--------------------------Postal savings ---------------------------------------:24-percent postal-savings bonds -------------------------United States savings bonds--------------------------Total ------------------------------------------
1942
1943
$29, 043
10, 621
13,820
4, 910
1,417
84
10, 526
70,421
$30, 567
11, 707
16, 572
5, 464
1, 837
83
19, 574
85,804
Amount
$1,524
1,086
2752
554
420-1
-9, 048
15,383
Percent
5. 2
10. 2
19.98
11. 3
29. 6
-1. 2
86 0
21.8
The greatest single increase in private savings was that repre
sented by the investment in United States savings bonds. The
$9,048,000,000 increase in investment in these bonds during 1943
was almost three-fifths of the gains in total savings represented by
-the table. The next most rapid increase was that of $420,000,000,
or 29.6 percent, in postal-savings bonds.
During the calendar year 1943, the net increase in savings placed
in savings banks, insured commercial banks, and savings and loan
associations was almost one-half the net increase in United States
savings bonds as compared with the preceding year when the increase
in'{he savings held by these institutions was approximately one-sixth
of the increase in savings in United States savings bonds. Insured
commercial banks led the banking group in rate of growth, the savings
held by these banks increasing 19.9 percent during the year. Savings'
held by savings and loain associations increased 11.3 percent and
deposits in mutual savings banks increased 10.2, percent.
Life-insurance companies, which during 19-42 led banks and savings
and loan associations in rate of growth, had the lowest rate of growth
during 1943, with an increase in private investments of $1,524,000,000,
or 5.2 percent, ov-er the previous year.
During the first half of 1944, private savings continued the rapid
increase of 1943. United States savings bonds continued to absorb
the greatest proportion of these savings as is indicated by the fact that
outstanding savings bonds increased in value from $19,574,000,000 on
December 31, 1943, to $24,750,000,000 on June 30, 1944, producing an
increase of $5,176,000,000 during the first 6 months of 1944. These
figures do not include sales of F and G bonds, some of which are sold
to individuals.I
Savings held by insured commercial banks increased by $1,972,
000,000 during the first 6 months of 1944 to a total'of $18,544,000,000.
Savings in mutual savings banks increased by $721,000,000 during
the same period, while the savings held in insured savings and loan
associations increased $349,000,000 from $3,574,000,000 on December
31, 1943, to $3,923,000,000 on June 30, 1944. Postal savings in
creased by $251,000,000 during thefirst 6 months of 1944,
Savings by private individuals throughout the Nation have reached
an all-time high. This, of course, has been made possible by 'the
increase in incomes resulting from war production, while-. limitations
on production for civilian use have reduced the flow of goods which
can be purchased with the augmented income. Smch a situation
insures-that an unprecedented tol_ ofL avins-wilbeavaiableafte
II. FEDERAL HOME LOAN BANK ADMINISTRATION
Under the provisions of the First War Powers Act, 1941, the
President of the United States, by Executive Order No. 9070, dated
February 24, 1942, placed all Government agencies relating to urban
housing under a newly created National Housing Agency, under the
direction of an Administrator. The Federal Home Loan Bank Ad
ministration is one of the three principal units designated by the
President's Executive order to comprise the National Housing Agency.
Pursuant to the terms of this Executive order, the Federal Home Loan
Bank Administration, under the direction of a Commissioner, exer
cises the functions, powers, and duties which the Federal Home Loan
Bank Act, as amended, conferred upon the former Federal Home
Loan Bank Board.
The major components of the Federal Home Loan Bank Adminis
tration are the Federal Home Loan Bank System, the Federal Savings
and Loan Insurance Corporation, and the Home Owners' Loan Cor
poration. Functions relating to the United States Housing Corpo
ration, which was formed during the last war for the purpose of housing
workers in congested war-industry areas, have been administered in
the Federal Home Loan Bank Administration since 1942.
In the performance of its functions, the Federal Home Loan Bank
Administration receives recommendations from the Federal Savings
and Loan Advisory Council, which is authorized to confer with it on
general business conditions and on ;special conditions affecting the
Federal Home Loan Banks and their members and the Federal Savings
and Loan Insurance Corporation. Two meetings of this council,
which was created by an amendment to the Federal Home Loan
Bank Act, were held during the fiscal year. A list of the members
who served during these meetings is presented as exhibit 12.
ADMINISTRATIVE EXPENSES OF THE BANK ADMINISTRATION
The Federal Home Loan Bank System of the Federal Home Loan
Bank Administration, the Home Owners' Loan Corporation, and the
Federal Savings and Loan Insurance Corporation are each entirely
self-sustaining and obtain no funds by any appropriation out of the
United States Treasury. The amount of their administrative ex
penses is authorized annually, based on a budget submitted in the
customary manner through the Bureau of the Budget and the Con
gress. Services performed by any one of these organizations for the
others are paid for by the organization receiving these services. This
practice is common in the Federal Government and legal provision
for loans of personnel on a reimbursable basis are made by statute.
Exhibit 13 presents the number of employees in the major components
of the Federal Home Loan Bank Administration during the period
from 1939 to 1944.
III. FEDERAL HOME LOAN BANK SYSTEM
The growth in number and assets of the member institutions of the
Federal Home Loan Bank System during the fiscal year 1944 is shown,
by Bank Districts and by States, in exhibit 15. A summary of the
number and approximate assets of member institutions, by type, as
of June 30, 1943, and June 30, 1944, is presented in the following tabu
lation:
Number and assets of member institutions of the Federal Home Loan Bank System,
June 30, 1943, ard June 30, 1944
[Dollar anmounts in millions]
June 30, 1943
Number
June 30, 1944
Assets
Number
Net change
Assets
Number
Assets
Savings and loan associations'
Federal associations----
1, 468
$2,426
1,465
$2,881
-3
+$455
sociations.-------Uninsured member associations----
916
1, 305
1, 449
1, 374
992
1, 214
1, 696
1, 385
+36
-91
+247
+11
-58
State-chartered insured member as
All member associations ------------.
3, 729
5, 249
3, 671-
5, 962
Savings banks----------------------Insurance companies ----------------
22
23
429
367
22
21
464
414
-2
+35
+47
All member institutions- ...-----------.
3,774
6, 045
3, 714
6,840
-60
+795
Other member institutions.
+713
0
SALE OF WAR BONDS
During the fiscal year 1944, the member institutions of the Bank
System devoted great efforts to the purchase of war bonds for their
own account and to the sale of these war bonds to the public. Be
cause the Fifth War Loan drive covered the months of June and July
1944, figures for wax-bond purchases are available for the 13-month
period ending July 31, 1944, rather than for the 12 months of the
fiscal year. During this 13-month period, reporting member institu
tions purchased $1,124,709,000 of war bonds for their own account,
and sold $625,181,000 of war bonds to the public. The proportion of
the assets of these reporting member institutions invested in Govern
ment obligations rose from 11.4 percent on June 30, 1943, to 23 per
cent on July 31, 1944.
LENDING ACTIVITY OF REGIONAL BANKS
Outstanding advances of the Federal Home Loan Banks totaled
$128,277,546 on June 30, 1944, or 42.2 percent more than the total of
$90,191,577 outstanding on June 30, 1943. During the fiscal year
1944, the Federal Home Loan Banks advanced $222,500,866 to member
institutions, an increase of 130.9 percent over advances during the
fiscal year 1943. The $96,346,313 advanced in the latter year was
smaller than the total of advances in any year since 1939.
10
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
11
During the reporting period, $184,414,896 of advances was repaid.
Repayments during the fiscal year 1944 were less than advances.
This was in contrast to the preceding reporting period when repay
ment of advances totaled more than twice the new advances made.
From the beginning of operations through June 30, 1944, the Federal
Home Loan. Banks advanced $1,247,781,080. ' Of this $1,119,503,534
was repaid.
During the fiscal year 1944, the ratio of short-term advances of 1
year or less to total outstanding advances continued to increase.
Such advances rose from 41.6 petcent of all advances on June 30,
1942, to 51.3 percent on June 30, 1943, and to 75.8 percent on June
30, 1944. The proportion of secured advances to all advances in
creased from 70.1 percent on June 30; 1943, to 82.7 percent 1 year
later. Exhibit 16 contains detailed information reflecting the various
changes in advances made by the Federal Home Loan Banks during
the fiscal year 1944, together with a summary of lending activity in
previous years.
No borrower from the Federal Home Loan Banks was more than 30
days delinquent on such indebtedness as of June 30, 1944. Also, no
member borrower was in liquidation at that time. During the fiscal
year 1944, as in previous years, the indebtedness of Federal savings
and loan associations constituted the larger part of the outstanding
advances of the Federal Home Loan Banks. Of the outstanding ad
vances of the Banks on June 30, 1944, $84,600,000, or 66 percent, was
to 395 Federal savings and loan associations. As of the same date,
advances totaling $34,200,000 were outstanding to 346 insured State
chartered member associations and advances totaling $9,500,000 were
outstanding to 115 uninsured State-chartered member institutions.
The effective interest rates of the Banks on advances to members
remained in large part unchanged during the fiscal year 1944. 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 17 gives the effective interest rates
charged on advances by each of the Federal Home Loan Banksas of
July 1, 1944.
MEMBERS
DEPOSITS
There was a decrease in total deposits of members in the Federal
Home Loan Banks from $29,262,275 on Jure 30, 1943, to $21,388.,388
on June 30, 1944. Practically all of this decrease was in the time
deposits of members, inasmuch as demand deposits .are already at a
low level. Interest may be paid by the Federal Home Loan Banks on
time deposits remaining for 30 days or more, at rates established by
the board of directors of each Bank, within ranges fixed by the Fed
eral Home Loan Bank Administration. As of June 30, 1944, all of
the Federal Home Loan Banks were paying inte;est on members' time
deposits at the rate of one-half of 1 percent per annum.
DEBENTURE FINANCING
The total amount of consolidated Federal Home Loan Bank deben
tures outstanding son June 30, 1944, was $58,000,000, an increase of
$23,000,000 6ver the consolidated debentures outstanding 1 year
73144-45---3
12
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
before. Up to the close of n,, yo , covered by this report, a ready
market has been found for the sale of consolidated Federal Home Loan
Bank debentures. As has been true from the first, every issue offered
in financing the cash requirements of the 12 Federal Home Loan Banks
has promptly been oversubscribed. Consolidated Federal Home Loan
Bank debentures, which represent the joint and several obligations
of all Federal Home Loan Banks, are not guaranteed by the United
States Government either as to principalor interest. It is the policy
of the Federal Home Loan Bank Administration to issue such deben
tures only when the'cash available in the 12 Federal Home Loan Banks
is deemed insufficient to meet their anticipated requirements. The
total debentures issued by the Banks from the beginning of operations
to June 30, 1944, aggregated $551,500,000, of which $493,500,000 had
been retired and/or refunded at maturity, thereby leaving $58,000,000
of debentures outstanding, as indicated previously.
FINANCIAL STATEMENTS
Exhibit 18 presents a statement of condition of the 12 Federal Home
Loan Banks both on an individual and on a consolidated basis. kThe
largest change indicated for the fiscal year 1944 by this statement is
the increase of more than $38,000,000 in outstanding advances to
member institutions. In addition, the Banks increased their holdings
of cash by almost $8,000,000 aid had almost $8,000,000 of deposits
withdrawn.
Operating funds were obtained by the Banks primarily from the
following three sources. The investments of the Banks were decreased
by almost $23,000,000; there was an increase of $23,000,000 in out
standing debentures; and the Banks received about $6,500,000 from
the sale of stock. The increase during the- fiscal year 1944 of
$6,514,500 in stock in the Federal Home Loan Banks owned by mem
ber institutions is 66 percent more than the increase of $3,929,200
during the preceding fiscal year.
The Federal Home Loan Bank stock owned by the United States
in the name of the Reconstruction Finance Corporation remained
unchanged at $124,741,000. The Federal Home Loan Bank Act
provides that
After the amou at 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 per centum of all sums thereafter paid
in as capital until allsuch capital stock held by the United States is retired at par.
The capital stock structure of the 12 Federal Home, Loan Banks on
June 30, 1944, is summarized in the following table:
Capital:
Capital stock (par):
Members (fully paid)
-------------Members (partially paid) -------------------------
$61, 234, 600
1, 000
61, 235, 600
250
Total -------------------------------------------Less unpaid subscriptions-----------------------------
61, 235, 350
124, 741, 000
U. S. Government, now owned by RFC (fully paid)-
Total paid in on capital stock--
-
185, 976, 350
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
13
Surplus:
Reserve as required under sec. 16 of the act
Reserve for contingencies
--
------
10, 438, 348
7, 063, 921
Total surplus------------------------------------Undivided profits-------------------------------------Total surplus and undivided profits ---------
$8, 046, 194
2, 392, 154
--
Total capital -----------------------------------
17, 502, 269
203, 478, 619
The change in the reserves and undivided profits of the Federal
Home Loan Banks during the reporting period is as follows:
June 30, 1943
Reserve required by see. 16 of act -------------------------Reserve for contingencies ---------- ------Undivided profits -----------------Total -----
-
-----
--------
--
-----
--
$7, 292, 016 39
$8, 046, 193. 63
-
2,170,531.03
6, 680, 848 96
2, 392,154. 21
7, 063, 921.17
16,143, 396 38
17, 502, 269 01
------_-----------------
----
--- -
---
June 30, 1944
A study of the surplus and undivided profits of the Federal Home
Loan Banks for the fiscal year 1944 is given in exhibit 19.
A statement of the profits and losses of the Federal Home Loan Banks
for the fiscal year 1944 will be found in exhibit 20. During the year
the consolidated gross income of the Banks totaled $5,634,042, repre
senting a slight decrease as compared with $5,823,440 for the 1943
fiscal year. However, there was an even greater decline in operating
expenses which were down from $2,052,912 during the 1943 fiscal year
to $1,842,413 for the 1944 fiscal year. As a result, there was a small
rise in the net income of the Banks which, during the reporting period,
was $3,770,886 as compared with $3,669,550 during the preceding
fiscal year.
The Federal Home Loan Banks declared a total of $2,096,846 of
dividends during the reporting period. This compares with $1,897,436
declared during the 1943 fiscal year. Of the dividends paid during
1944, $1,429,485 was paid to the Reconstruction Finance Corporation
and' $667,361 to member institutions. The $2,096,846 of dividends
paid during the current reporting period is an increase of 10.5 percent
over the dividends paid during the fiscal year 1943. The cumulative
amount of dividends paid by the 12 Federal Home Loan Banks from
the beginning of operations through June 30, 1944, was $22,406,973.
Of this, $16,956,560 was paid on the stock subscribed by the United
States Government and $5,450,413 Was paid on stock owned by
member institutions.
INTEREST AND DJVIDyND RATES
For many years there has been a downward trend in interest rates
which has been reflected in the interest rates of mortgage loans and
in the dividends paid on the shares of savings and loan associations.
A study of the financial records of all member savings and loan asso
ciations of the Bank System indicated that the average yield on mort
gage loans held by these associations declined from 5.77 percent in
1942 to 5.58 percent in 1943. The ratio of dividends paid to average
share capital outstanding decreased from 3.08 percent in 1942 to 2.85
percent in 1943.
14
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
The mortgage interest mentioned above represents the average rate
on the, present mortgage portfolio of these associations. The rates for
new mortgage loans will average somewhat less than the rates for
outstanding mortgages.
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 has expanded as have the cases to be
reviewed by the chief supervisor's office and the supervisory agents.
In addition to the annual supervisory examination or examination
audit of approximately 2,500 insured institutions, the Examining
Division makes an examination or examination-audit of every appli
cant for insurance of accounts.
ADMINISTRATIVE
EXPENSES
The Federal Home Loan Bank System of the Federal Home Loan
Bank Administration obtains its funds with which to defray its
administrative expenses by semiannual assessments upon the Federal
Home Loan Banks, by reimbursements representing the costs of serv
ices rendered to the Federal Savings and Loan Insurance Corporation
and the Home Owners' Loan Corporation, and by fees collected from
the institutions in whose behalf examination expenses have been in
curred. Since expenses falling within the latter category constitute
the major portion of the administrative expenses of the Federal Home
Loan Bank System of the Federal Home Loan Bank Administration,
and thereby represent the greater portion of the approved budget, it
follows that the greater portion of administrative expense funds are
obtained from the institutions in whose behalf examining services are
rendered.
Expenses of the Bank System's Examining Division, which con
stitute the major portion of the Bank System's authorized operating
budget, are reimbursed by the institutions examined. During the
fiscal year 1944, total receipts of the Federal Home Loan Bank
System of the Federal Home Loan Bank Administration amounted
to $1,418,105 as compared with $1,357,747 for the previous fiscal
year. In addition, a cash balance of $409,119 was carried over at
the beginning of the fiscal year 1944. Administrative- disbursements
during the 1944 fiscal year totaled $1,538,008 as compared with
$1,302,002 during the previous fiscal-year period. This increase in
,disbursements was due principally to a new Federal Home Loan
Bank Administration policy in allocation of over-all expenses, result
ing in payment for space occupied by the Bank System and payment
for a portion of the costs of operating various administrative and
service departments carried on the pay roll of the Home Owners'
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
15
Loan Corporation, but rendering services to all the component
agencies of the Bank Administration. The cash balance as of June
30, 1944, was $289,216.
There is attached as exhibit 14 a statement reflecting the adminis
trative obligations, by types, incurred by the Federal Home Loan
Bank System of the Federal Home Loan Bank Administration during
the fiscal years 1943 and 1944.
The actively employed personnel of the Federal Home Loan Bank
System of the Federal Home Loan Bank Administration totaled 284
at the close of the reporting period. Of this total, 216 employees
constituted the staff of the Examining Division.
IV. SAVINGS AND LOAN ASSOCIATIONS
The construction and purchase of residential real estate in the
United. States are financed largely from the accumulated savings of
the American people. Most of the savings used in this way are first
accumulated in savings and loan associations, mutual sa vings banks,
life-insurance companies, and commercial banks.
,The Federal Home Loan Bank System is a central credit reserve
system for the first three types of thrift and home-financing institu
tions. The Federal Home Loan Bank Administration performs addi
tional functions for savings and loan associations. Many of the
associations are Federal savings and loan associations, chartered and
supervised by the Bank Administration. The Federal Savings and
Loan Insurance Corporation, another of the component units of the
Bank Administration, insures all Federal associations and such State
chartered associations as apply for and qualify for insurance.
NUMBER
AND
ASSETS
From the following table it can be seen that the total resources of
member savings and loan \associations of the Federal Home Loan
Bank System have been increasing rapidly.
Assets
[Thousands of dollars]
Date
All member
and
savings
loan asso-
ciations,
June
June
June
June
June
June
June
30,
30,
30,
30,
30,
30,
30,
- - 1938
-----------1939 ---1940 ----------------------------------------1941---------1942
----------------1943------------1944 ---------------------
$3, 704, 259
3, 935, 641
4, 232, 681
4, 626,920
4, 885, 049
5, 249,414
5,962, 319
All Statechartered
insured
associations
All Federal
associations
$769, 827
899, 654
983, 367
1,131, 625
1, 255, 307
1, 454,'920
1, 702, 292
$1, 210, 744
1, 439, 988
1,725, 817
2, 028,138
2, 205, 921
2,426,079
2, 881, 276
Uninsured
nonmember
associations
I
$2,113, 806
1, 943,049
1,957,681
I, 292, 245
1,170,926
1, 061,147
1,001,640
1Estimated.
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, 1944, these
associations held total assets of $5,940,000.
' During the fiscal year 1944, the total assets of all member associa
tions increased by $712,905,000. Of this increase, $455,197,000 repre
sented the growth of 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,
experienced an increase of $247,372,000 in total assets. In contrast
to the increase in assets of those associations, which are members of
the Federal Home Loan Bank System, the savings and loan associa
tions which are not members of the System continued to decrease in
number and assets.
The number of savings and loan associations in the Federal Home
Loan Bank System has declined slightly from the maximum reached
in 1938. The decline, which has taken place despite the increase in
16
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
17
total assets, has been' caused largely by mergers and consolidations.
The change in the number of savings and loan associations is presented
in the following table:
Number
All member
savings and
loan assodiations
Date
Date
June
June
June
June
June
June
June
30,
30,
30,
30,
30,
30,
30,
1938-------------------1939
------------------1940
------------------------------1941
--------------1942--------------------------------1943 ----------------1944 ------------
All Statechartered .m- -All Federal
sured associ- associations
ations
3,909
3, 897
3,865
3, 798
3, 772
3, 729
3, 671
681
790
816
861
910
960
996
1,337
1,380
1,421
1,452
1,464
1, 468
1, 465
Uninsured
nonmember
associations I
5,651
4, 474
4, 007
3, 341
3,101
2, 757
2, 530
LEstimated.
The number of member associations decreased from 3,729 at the
beginning of the 1944 fiscal year to 3,671 at the close of the year, a
net decrease of 58 associations. The decline resulted from the ter
mination of membership of 91 associations, while 33 associations
were admitted to membership in the System. Of the terminations,
51 were caused by merger, consolidation, or sale of assets to other
member institutions, actions which did not result in the complete
withdrawal of the assets held by these institutions. The number of
applications for membership pending on June 30, 1944, was 12 as
against 37 on June 30, 1943.
The number of State-chartered insured associations continued
during the 1944 fiscal year the steady growth characteristic of recent
years. During the reporting period there was a net increase of 36
State-chartered insured associations.
Partly as a result of wartime conditions, the number of Federal
savings and loan associations has stabilized. These associations
decieased by three during the 1944 fiscal year, which partly offset
the increase of four during the previous year. The decrease of 3
was the result of 16 additions and 19 terminations. Of the 19 termi
nations, 14' vvere of Federal associations which merged with other
Federal associations. In addition, three Federal associations went
into voluntary liquidation and there were two instances of sale of
assets.
Of the 16 associations to which new Federal charters were granted,
I was a newly organized association, and the remaining 15 were con
verted State associations.
The change in the average size of savings and loan associations
may be seen from the following table:
Average size of associations
Date
June
June
June
June
June
June
June
30,
30,
30,
30,
30,
30,
30,
1938
1939------------------1940
1941
1942
1943_
1944
1 Estimated.
All member
savings and
All Statechartered
loan associa-
insured asso-
tions
ciations
$947, 623
1, 009, 916
1,095,131
1,218,252
1, 295, 082
1, 407, 727
1, 624,168
$1,130, 436
1,138, 803
1, 205,107
1,314, 315
1, 379, 458
1, 515, 542
1, 709,129
'
All Federal
associations
$905, 568
1, 043, 470
1,214, 509
1,396,789
1, 506, 777
1, 652, 642
1, 966, 741
Uninsured
ninember
associations
$374, 059
434, 298
488, 565
386, 784
377, 596
384, 892
395,905
18
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
The average size of member associations of the Bank System has
increased by 71.4 percent since June 30, 1938. This increase has been
the result of the increase in total resources and the slow decrease in
numbers. This rapid growth in the size and financial strength of
individual member associations is a promising fact 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 local
ities 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
average 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 117.2 percent
since 1938 as compared with an increase of 51.2 percent for all State
chartered insured associations. All member associations have had an
increase in average size since 1938 of 71.4 percent. In comparison,
the net increase in average size for uninsured nonmember associations
has been only 5.8 percent since June 30, 1938.
Probably the most important factor in causing this increase in the
total assets of savings and loan associations has been the continued
large flow of private share capital to these associations. New share
investments and repurchases of share capital during the 1944 fiscal
year proceeded at the rate indicated in the following table:
[Thousands of dollars]
Newshare in- Repurchases
vestments
-epurcases
Net increase
Net incr
Ratio of re
purchases to
new invest
ments
Percent
All member savings and loan associations ----All State-chartered insured associations-----All Federal associations -Uninsured nonmember associations
----
1Uninsured
$1, 534,417
453, 633
848,150
157, 733
$852, 895
262, 759
431, 530
114,,712
$681, 522
190,874
416, 620
43, 021
55 &
57 9
50 9
72. 7
members and nonmembers estimated.
As will be seen from the table, a smaller proportion of new share
investments is offset by repurchases by Federal associations than by
either the State-chartered insured associations or by all member savings
and loan associations.
This continued influx of private share capital, together with the
difficulty of finding suitable iew investments, enabled member asso
ciations during the reporting period to retire much of their Govern
ment share investments. By authorizations of Congress in 1933, 1934,
and 1935, the United States Treasury invested $49,300,000 and the
Home Owners' Loan Corporation, during the years 1935 through 1942,
invested $223,856,710 in savings and loan associations to increase the
funds available for home financing. -During the 1944 fiscal year, the
outstanding balance of these investments was reduced from $119,
887,410 to $51,256,050. Outstanding advances from the Federal
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
19
Home Loan Banks increased during the same period from $90,191,577
to $128,277,546, an increase of $38,085,969 in comparison with the
decrease of $102,453,359 during the preceding fiscal year.
OPERATIONS IN
A WARTIME ECONOMY
Lending operations.-Because of the construction limitation order
of the War Production Board, new residential construction hqs been
severely limited. The construction of new homes is now-limited largely
to the war housing required by workers migrating to war-production
centers and defense areas.
As a result, construction loans are now at a low level. During the
reporting period, construction loans by member savings and loan
associations totaled $114,705,000, which was not greatly different
from the figure for the preceding year. Reconditioning loans also
were almost unchanged in amount.
New loans made by member associations, by purpose
Purpose of loan
July 1, 1942, to July 1, 1943, to
June 30, 1943
June 30, 1944
308, 000
580, 000
017, 000
070, 000
559, 000
$114, 705, 000
849, 336, 000
147, 366, 000
27,186,000
81.570, 000
+2.1
+55. 7
-. 4
-6. 5
+34.7
895, 534,000
1, 220,163,000
+36. 2
$112,
Construction-------------------------545,
-------------------------------------'Home purchase
Refinancing-----------------------------------------148,
29,
Reconditioning..--------------------------------------60,
Other purposes-------------------------------------
Total-------..
-----------
----------------------
Percent
change
Loans made tp finance the purchase of homes continued during the
fiscal year 1944 the increase characteristic of recent years. For the
fiscal year 1944, loans for home purchase totaled $849,336,000 as com
pared with $545,580,000 during the 1943 fiscal year. Because of this
increase in loans for home purchase, these loans accounted for 69.6
percent of all loans by member institutions during the fiscal year 1944
as compared with 60.9 percent during the fiscal year 1943 and 44.9
percent in 1942. This shift in the purpose for which loans have been
made during the last few years is shown in exhibit 9. '
Despite the heavy volume of mortgage lending during 1942 and
1943, lending during these years did not cause any addition to the
total outstanding home-mortgage debt. During the calendar year
1940, when $3,290,000,000 was loaned by all lenders on one- to four
family dwellings, there was a net increase of $27 in outstanding mort
gages for every $100 of new loans. In 1941, new loans increased to
$3,810,000,000, and there was a net increase of $26 in outstanding
loans for every $100 of new loans. However, in 1942 and 1943,
despite the fact that total new loans of $3,155,000,000 and $3,183,
000,000, respectively, were not much below the total amount loaned
during 1940, there was a decrease of $6 in outstanding loans for each
$100 of new loans made during 1942 and $12 during 1943.
The two most important reasons why the home-mortgage debt is not
now increasing, despite the volume of home mortgages made, are the
rapid repayment of mortgage loans at the present time made possible
by high incomes and also the shift in mortgage lending from construc
tion loans to home-purchase loans. Loans for the latter purpose,
73144-45---4
20
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
which represent an increasing proportion of the total, are frequently
offset in large part by the cancellation of existing mortgages. The
same is true of refinancing loans.
Increased strength of savings and loan associations.-During the
calendar year 1943, the assets of reporting member savings and loan
associations of the Federal Home Loan Bank System increased from
$5,025,451,000 to $5,538,600,000.- Liquid assets increased even more
rapidly. Cash increased about $51,000,000 to a total of about
$387,000,000. Holdings of United States Government obligations
increased from $259,678,000 to $738,648,000. / Because of the great
increase in cash and Government securities held by member asso
ciations, these holdings on December 31, 1943, were 24 percent of
total private repurchasable capital as compared with 14.5 percent for
December 31, 1942, and 9.4 percent for the preceding year. The
increase in assets and liquidity, together with the disposition of the
real-estate overhang, discussed previously, has increased the'ability of
the member associations and of the Federal Home Loan Bank System
to meet postwar problems and to serve the public.
FINANCIAL OPERATIONS
Balance sheet.-The combined balance sheet for all member savings
and loan associations for the calendar years 1942 and 1943 is presented
in exhibit 10. During the 1943 calendar year, the assets of State
chartered insured associations increased from 26.7 percent of the total
for all member associations to 28 percent; the assets of Federal savings
and loan associations increased from 45.7 percent of the total to 47.2
percent.
For all member savings and loan associations, holdings of first
mortgage loans, including interest and advahces, increased from
$3,989,514,000 to $4,047,693,000 during the 1943 calendar year, an
increase of 1.5 percent. The first-mortgage loans held by Federals
savings and loan associations increased by 3.3 percent during this
period, while those held b y State-chartered insured associationhs
increased by 7 percent.
There was a 44.3 percent decline from $124,752,000 to $69,512,000
in the real estate owned by member associations during the calendar
year 1943. The rate of decrease was practically the same for Federal
(42.2 percent) as for State-chartered insured associations (41 percent).
Growth in liquidity.-Growth in liquidity is indicated by the fact
that the cash held by all nmember savings and loan associations
increased from $336,281,000 to $387,229,000, an increase of 15.2
percent. Cash held by Federal savings and loan associations in
creased 12.8 percent, while the greatest percentage increase was
experienced by cash holdings of all State-chartered insured member
associations, 27.8 percent. Holdings of United States Government
obligations by member associations increased rapidly during the year.
For all member associations, the growth was from $259,678,000 to
$738,648,000, or 184.4 percent. For State-chartered insured asso
ciations the increase was 174.2 percent, while the most rapid growth
was that of Federal savings and loan associations, whose holdings of
United States Government obligations rose 215 percent.
On the capital and liability side of the ledger, private repurchasable
shares of member savings and loan associations increased 14.4 percent
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
21
compared with an increase of 19.9 percent for Federal savings and
loan associations, and 19.6 percent for State-chartered member
insured associations. Advances from the Federal Home Loan Banks
and other borrowed money decreased from $142,682,000 on December
31, 1942, to $127,017,000 a year later, a drop of 11 percent.' The
advances ,and borrowings of Federal savings and loan associations
remained almost unchanged during the year, experiencing a drop of
only 2 pqrcent, while the advances and borrowings of insured State
chartered associations decreased by 17.1 percent.
General reserves, undivided profits, and surplus held by all member
savings and loan associations rose from $368,401,000 on December 31,
1942, to $409,928,000, a year later. However, because of the increase
in total assets, 'general reserves, undivided profits, and surplus in
creased only from 7.3 percent of total assets.to 7.4 percent during the
calendar year. For both Federal savings and loan associations and
State-chartered insured associations, there was little change in
geneial reserves, undivided profits, and surplus considered as a
percentage of total assets.
Statement of operations.-The combined statement of operations for
all reporting member associations, Federal associations, State
chartered insured associations, and State-chartered uninsured associa
tions is presented in exhibit 11. For the 3,681 reporting member
savings and loan associations, gross operating income to-taled
$255,051.211. Of this, 86.94 percent was obtained as interest from'
mortgage loans. For State-chartered insured associations, the per
centage was 85.13 percent; for Federal associations, 87.94 percent;
and for uninsured State-chartered associations, 87.11 percent. The
proportion of income obtained from mortgage loans decreased slightly
from earlier years because of the fact that the associations are holding
a large proportion of assets in the form of Government securities.
Of net income received, 70.26 percent was paid out as dividends by
the reporting member associations. State-chartered insured associa
tions paid 70.60 percent of net income as dividends, State-chartered
uninsured associations paid 73.83 percent, and Federal associations
paid 67.83 percent, the'smallest percentage of net income as dividends.
Approximately one-fourth to three-tenths of net income was trans
ferred to reserves and undivided profits.
FEDERAL
HOME
LOAN
BANK
DIETR1CTS
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 a Federal Home Loan Bank is located. Each Bank makes credit
and deposit facilities available to associations within its District. The
names and addresses of the 12 Federal Home Loan Banks and the area
served by each are given in exhibit 12. The operations of these banks
are discussed in detail in chapter III.
V. FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION
The fiscal year 1944 completed the first decade of the existence of
the Federal Savings and Loan Insurance Corporation. The Corpo
ration was created in 1934 by title IV of the National Housing Act
in order to restore and maintain public confidence in savings and loan
associations through the protection of savings up to $5,000 for each
investor. As a result, the steady flow of savings into these institu
tions has provided a considerable amount of the funds available for
home-mortgage lending in this country. It is apparent that the
principle of insurance of accounts has received wide public acceptance.
INSURED INSTITUTIONS
During the fiscal year 1944 the number of savings and loan asso
ciations insured by the Federal Savings and Loan Insurance Corpor
ation increased from 2,428 to 2,461. During the same period, the
total assets of these insured&institutions rose from $3,880,999,000 to
$4,583,568,000 and the number of investors protected by insurance
of accounts increased from 3,494,100 to 3,837,500. The increase in
the number and assets of insured associations, by Federal Home Loan
Bank Districts and by States, is given in exhibit 21. The operations
of insured savings and loan associations have been discussed previ
ously in chapter IV.
OPERATIONS OF THE INSURANCE CORPORATION
The Federal Savings and Loan Insurance Corporation's statement
of condition as of June 30, 1944, is presented in exhibit 22. On that
date, total assets were $151,631,510 compared with $143,249,154 one
year before. On June 30, 1944, reserves and surplus amounted to
$49,279,605, an increase of $7,872,642 from the total of $41,406,963
on June 30, 1943. The surplus and reserves on June 30, 1944, in
cluded a special reserve for contingencies of $27,000,000, which is
equivalent to the total cumulative dividends since June 30, 1935, on
the capital stock of the Corporation. In order to provide a cushion
against future losses, the Corporation has followed the practice of
building up surplus and reserves as rapidly as possible.
The insured account liability of the Corporation increased from
$3,124,640,000 on June 30, 1943, to $3,746,414,000 on June 30, 1944.
In the event of liquidation, the assets of an insured association must
be used to .pay creditor obligations before being applied upon share
account liability. If the creditor obligations are included with the
insured account liability of the Corporation, the total on June 30,
1943, was $3,237,364,000, increasing to $3,934,276,000 on June 30,
1944.
For each dollar of capital, reserves, and surplus of the Corporation,
there was a potential liability of $26.36 on June 30, 1944. However,
it is inconceivable that the total amount of this potential liability
22
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
23
might ever become real. In the event of payment of insurance, the
Corporation becomes subrogated to the amount of each insured
account up to $5,000 and consequently the recovery from the proceeds
of the assets of the institution in default reduces the loss to ,the
Corporation.
The Federal Savings and Loan Insurance Corporation derives its
income from the premiums paid by insured institutions, from admis
sion fees paid by associations newly entering the System, and from
interest on investments. All income received in excess of the Cor
poration's expenses is allocated to reserves. The losses of the Cor
poration from its insurance operations are charged to these reserve
accounts.
During the fiscal year 1944, the Corporation earned $4,245,151 of
premiums compared with $4,000,101' during the preceding fiscal year.
The premium paid annually by each insured institution represents
one-eighth of 1 percent of the accounts of its insured members plus
all creditor obligations. Admission fees, which are computed on the
basis of 4 cents for each $100 of the total amount of the institution's
accounts of an insurable type plus all obligations to its creditors,
amounted to $13,465 during the 1944 fiscal year compared with
$37,151 during the previous fiscal year.
The investment income of the Corporation during the reporting
period Was $3,277,125 as compared with $3,556,881 during the pre
ceding year. The decrease in interest earnings resulted from lower
rates of interest on securities obtained by the Corporation as a result
of a redistribution of its investment portfolio. Profits from the sale
of securities during the 1944 fiscal year were $1,133,888. The aggre
gate income of the Corporation from these sources and from minor
miscellaneous items totaled $8,669,635 during the fiscal year 1944,
compared with $9,655,650 during the preceding fiscal year.
The major reason for this decrease is that during the fiscal year
1943' the Insurance Corporation deemed it advisable to sell certain
securities having an early call date and invest the proceeds in United
States Treasury bonds running for a longer term. As a result, the
profit from the sale of securities during the fiscal year 1943 was larger
than normal and accordingly there was a decrease in aggregate income
during the fiscal year 1944.
The administrative expenses of the Corporation rose from $293,448
during the fiscal year 1943 to $425,667 during, the fiscal year 1944.
This increase in administrative expenses was due principally to a
new policy of the Federal Home Loan Bank Administration in
allocating expenses, which resulted in payment for space occupied by
the Insurance Corporation and payment for a portion of the costs of
operating various administrative and service departments carried on
the pay roll of the Home Owners' Loan Corporation, but rendering
services to all the component agencies of the Bank Administration.
The Corporation's nonadministrative expenses during the reporting
period were $26,974. If the administrative and nonadministrative
expenses are deducted from gross income, the resulting net income of
the Corporation during the 1944 fiscal year was $8,216,994.
On June 30, 1944, the Corporation actively employed a total per
sonnel of 53. 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
24
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
Administration on a reitnbursable basis and does not have to maintain
such departments of its own. At the present time, the Corporation
is able to maintain its administrative expenses at a figure lower than
the, interest income from its invested reserves.
INSURANCE SETTLEMENTS
Congress established the Federal Savings and Loan Insurance
Corporation to bring about a greater degree of stability in savings
and loan operations by spreading the loss risk according to accepted
insurance principles. It was to be expected that a certain number
of problem cases would develop, for in any insuring operation losses
are as much a part of normal operations as premium income.
In the first decade of existence of the Federal Savings and Loan
Insurance Corporation, 37 insured associations experienced difficulties
requiring study. After careful analysis by the Corporation, it was
found that 3 of these associations required no financial assistance
and these associations continued normal operations. Of the remain
ing 34 associations, 27 received net cash disbursements from the
Corporation aggregating $5,109,003.80. These disbursements were
made to prevent default by the associations. To arrive at the fore
going figure for net cash settlements, total recoveries of $142,017,
received through June 30, 1944, have been deducted from gross dis
bursements. On June 30, 1944, there were additional contingent
commitments of |$80,265.75 still outstanding to 2 of these 27
associations. Of these associations which had received contributions
from the Corporation, 18 continued operations as separate units; 6
merged with other insured institutions; and 3 subsequently liquidated
voluntarily, paying all investors in full. The remaining 7 of the 34
associations have been declared in default and placed in liquidation.
Final losses which will be sustained by the Insurance Corporation
from contributions and commitments made on or before June 30,
1944, and from insured associations placed in liquidation before that
date will total an estimated $5,918,692.
Analysis of the difficulties encountered by the 34 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 34 cases. Outright dishonesty on
the part of association employees or breach of trust on the part of
management accounted for the difficulties experienced by the remain
ing 12 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 and analysis of the condition of the association,
the Corporation determines whether it will prevent a declaration of
default or whether it will permit the association to be liquidated. A
declaration 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 1944 the Corporation had used
only the last method of assistance.
Whenever an insured association is declared in default and is placed
in liquidation, the Corporation makes prompt determination of the
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
25
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
insured account up to $5,000, at his option, either (1), a new insured
account in an insured institution not in default, in an amount equal
to the insured account so transferred, ori (2) the amount of his account
which is insured, as follows: 10 percent in cash, 45 percent in nego
tiable noninterest-bearing debentures of the Corporation due within
1 year from the date of the default, and 45 percent in such debentures
due wvithin 3 years from the date of default.
Practically all the insured investors in each of the seven insured
associations which have been placed in liquidation have elected to
accept the first method of settlement; i. e., a new account in a normally
operating insured association. To date, less than one-fifth of 1
percent of the claims settled have been paid by the cash and deben
ture method. As of June 30, 1944, 99.7 percent of the estimated
dollar amount of the insured claims in all insured associations placed
in liquidation had been settled. This involved issuance of n ew share
accounts by other insured institutions amounting to $6,673,666.38,
and payment by cash and debentures in the amount of $13,200.
During .the fiscal year 1944, the Corporation extended financial aid
in the form of contributions, or payments made on contingent com
mitments previously authorized, in the total amount of $329,618.81.
OPERATIONS OF INSURED INSTITUTIONS IN
DEFAULT
During the fiscal year 1944, no insured association was placed in
receivership. Of the seven insured associations previously placed in
receivership, one was terminated during the fiscal year 1943 and one
during the fiscal year 1944, leaving five in receivership on June 30,
1944. The Corporation, through its subrogation of insured accounts,
has an equivalent claim to the proceeds from the assets of all insured
institutiqns in liquidation. 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'the active receiver.
Exhibit 24 presents comparative statements of condition and opera
tion for the associations in receivership on June 30, 1944. The
liquidations are progressing favorably. These comparative statements
indicate that during the fiscal year 1944, partial liquidating dividends
were declared in the five receiverships which were still in force at the
end of the year. For the receivership terminated during the year, a
final liquidating dividend of 23.376 percent was declared, 'increasing
the total dividends for this receivership to 93.376 percent, which
represents the total recovery by the Corporation from this association.
It is estimated that the Corporation will recover, from the five associa
tions still in liquidation, an amount aggregating approximately 89
percent of the funds disbursed in paying insurance to the insured
imembers of these associations.
VI. HOME OWNERS' LOAN CORPORATION
GENERAL
OPERATIONS
The Home Owners' Loan Corporation from June 13, 1933, through
June 12, 1936, refinanced the mortgage loans of 1,017,821 home
owners, all of whom were in financial distress and in danger of losing
their homes. Some of these home owners, despite the Corporation's
great efforts, were unable to work out of their difficulties. However,
as a result of the activities of the Home Owners' Loan Corporation,
then and since, more than 4 out of every 5 of these owners were
enabled 'to save their homes. In other words, foreclosure of their
homes was averted for more than 800,000 American families in what
was undoubtedly the greatest emergency program on record in support
of home ownership.
The mortgage loans made by the Corporation originally totaled
$3,093,451,321. The Corporation, in servicing these loans was forced
to advance supplementary amounts, primarily to make funds avail
able to pay delinquent taxes. The Corporation's investment was also
increased because of the necessity of foreclosing on some of these
properties, which resulted in the capitalization of delinquent interest
and taxes, foreclosure and acquisition costs, and reconditioning ex
penses. Through June 30, 1944, the total of these advances and
capitalizations was $394,204,939. At that time, therefore, a gross
cumulative investment of $3,487,656,260 had resulted from the Cor
poration's lending program to aid American home owiiers.
The efforts of the HOLC since June 12, 1936, have been devoted
to the liquidation of its affairs as orderly and as economically as
possible. The Corporation's success in this endeavor may be noted
from the following facts:
By June 30, 1944, the Home, Owners' Loan Corporation had com
pleted almost two-thirds of its liquidation. On that date, the balance
of mortgage loans, vendee accounts, and property accounts was
$1,256,'169,310, a decrease of $376,282,629, or 23.1 percent, from the
total of $1,632,451,939 at the beginning of the reporting period.
The fact that of the cumulative gross investment of $3,4,87,656,260,
all but $1,256,169,310 had been liquidated on June 30, 1944, means
that the liquidation of the Corporation was 64 percent completed at
that time. The following table summarizes the reduction in operating
assets:
$3, 093, 451, 321
Original amount loaned--------------_------------------Subsequent advances to borrowers, net additions included in
394, 204, 939
-------___capitalized value of properties, etc
Original loans plus advances, capitalized additions, etc_ _
Outstanding on June 30, 1944:
Mortgage loans and advances
----$847, 179, 749
Vendee accounts, advances, and unposted
advances------------------------- -372,
926, 075
Property acquired and in process of acquisi
36, 063, 486
tion----------------------_---
3, 487, 656, 260
Total outstanding----------------------
___-_
1, 256, 169, 310
Net reduction in operating assets ---------
____-
2, 231, 486, 950
26
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
27
In 1935 Congress authorized the Home Owners' Loan Corporation
to invest in the share capital of savings and loan associations in order
to stiiaulate the home-mortgage market. Through June 30, 1943,
the cumulative investment made in savings and loan associations by
the Corporation was $223,856,710. This investment is being reduced
rapidly. The total of $108,403,410 remaining on June 30, 1943, was
reduced to $46,529,250 one year later. Dividends received from these
share investments have, of course, been available to offset part of
the loss from the properties taken over by the Corporation. For the
period through June 30, 1944, these dividends aggregated $42,350,351.
Because of the liquidation of debtor and property accounts and
retirement of investments in savings and loan associations, the Cor
poration has been able to reduce its bonded indebtedness substan
tially. The Corporation's outstanding unmatured bonds at the end
of the fiscal year 1944 amounted to $1,334,904,000, a reduction of 61.7
percent from the $3,489,453,550 bonds issued for value.
The Home Owners' Loan Act of 1933, as amended, requires that all
payments upon principal of loans made by the Corporation shall,
under regulations made by the Corporation, be applied to the retire
ment of the bonds of the Corporation. Certain other receipts, such as
amounts received by the Corporation as a result of the repurchase of
shares purchased by it in savings and loan associations, are also applied
to bond retirement. The total applied to the retirement of bonds
through June 30, 1944, was $2,090,036,930. Funds in this amount
have been deposited with the Treasurer of the United States and have
been used to retire bonds or are available for future retirements, as
shown in the following table:
Disposition of funds allocated (through June 30, 1944) to Bond Retirement Fund
Applied to retirement of bonds ---------------------$2, 090, 036, 930. 46
Deposited for matured bonds on which interest has ceased-_
64, 399, 675. 00
Available for future retirement of unmatured bonds-------38, 165. 11
Gross amount deposited in Bond Retirement Fund-Balance due Retirement Fund for June 1944 deposited in July
1944---------------------------------- ------------
2, 154, 474, 770. 57
1, 280,883. 24
Total applicable to bond retirement----------------2, 155, 755, 653. 81
During the fiscal year 1944 the Corporation carried out an impor
tant bond refinancing operation which resulted in a substantial reduc
tion in interest charges. The series A bonds of the Corporation was
a 3 percent series maturing in 1952 and, callable May 1, 1944. This
entire series was called in May 1944. Of the total, $146,577,775 was
retired by funds available for that purpose and the remainder was
repaid from funds obtained by the issuance at the same time of
$632,000,000 of series S bonds at 1 percent. This resulted in a net
interest reduction of 2 percent on the $632,000,000 of refinancing and
of 3 percent on the $146,577,775 of bonds which were repaid. Of the
series S bonds issued for refinancing purposes, the Corporation repaid
$52,000,000 during the remainder of the 1944 fiscal year. In addition,
during the reporting period, the Corporation repaid the $196,000,000
of 1 percent series Q bonds which were still outstanding at the
beginning of the period.
Largely because of the refinancing of the series A bonds by the
series S bonds during the fiscal year 1944, the average interest rate on
73144-45---5
28
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
the outstanding bonds of the Corporation (exclusive of bonds on which
interest has ceased) decreased from 2.118 percent on June 30, 1943, to
1.283 percent on June 30, 1944.
Personnel and also administrative expenses have been sharply re
duced by the Corporation. Personnel was reduced from 3,319 on
June 30, 1943, to 2,532 on June 30, 1944, a reduction of 787, or 23.7
percent. During the-reporting period, administrative expenses were
$9,078,615 as compared with $10,711,749 during the 1943 fiscal year,
a reduction of 15.2 percent.
During the reporting period, 11 field stations were closed by the
Corporation. As of June 30, 1944, the HOLC operated eight regional
offices and eight field stations. These stations are established strate
gically at points of loan concentration where their presence permits
economies in travel time and expense which more than offset the small
cost of operating the field stations. Collection facilities are main
tained in seven of the field stations.
Within- the continental United States the Corporation's loan ac
counts can be serviced and supervised readily and at low cost. In
Hawaii, however, the number of accounts and outstanding balances
became too low to warrant the direct cost of continuing the local office
with the supervisory and overhead expenses involved. Because of the
distance from the mainland, it appeared impracticable to manage these
accounts from the nearest regional office in San Francisco. For this
reason the Hawaiian loans were completely liquidated by May 1944
when the outstanding loans were transferred to a group of local savings
and loan associations for the remaining principal and interest and a
1 percent premium. At that time the investment had been reduced to
less than one-fourth of the original amount. The Corporation's expe
rience in the islands had been exceptional in that there had been little
delinquency 'and no foreclosures.
The Independent Offices Appropriation Act of 1944 required the
preparation of a plan for the liquidation of the Home Owners' Loan
Corporation at the earliest practicable date and for the submission of
this plan to Congress by February 1, 1944. In addition, a progress
report on the Corporation's liquidation was to be submitted to Con
gress semiannually during the 1944 fiscal year. In accordance with
these requirements, reports were submitted to Congress on January
31, 1944, August 3, 1944, and February 5, 1945.
STATUS
OF ACCOUNTS
The HOLC made loans to 1,017,821 individuals during its 3 years
of lending operations. Because of divisions of property, partial sales
of properties owned, and other reasons, the number of accounts was
increased to a total of 1,019,768 as of June 30, 1944. On that date,
these accounts were divided as follows:
Accounts terminated-----------------------------------------Original mortgage loans-_ ------------------------------------Vendee accounts ----------------------------------------------Properties owned and in process of acquisition -----------------Total--------------------------------
-----------
372,
499,
142,
5,
863
238
208
459
1, 019, 768
This table indicates that these accounts fall into three major
groups-those which have been terminated, those which represent
outstanding debtor accounts, and those which represent property
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
29
owned. These will be discussed separately in the three following
sections.
Accounts terminated.-A total of 372,863, or more than one-third
of the 1,019,768 accounts, have been terminated. Of the accounts
terminated, payment in full of mortgage loans accounted for 324,766;
payment in full of vendee accounts caused 33,842 terminations;
cash sales of acquired properties accounted for 13,937 terminations
charge-offs accounted for 242 terminations; and 76 accounts were
terminated through consolidations. Of the 372,863 accounts termi
nated, 110,772 were terminated during the fiscal year 1944 alone.
Mortgage and vendee accounts.-There was a total of 641,446 mort
gage and vendee accounts outstanding on June 30, 1944. Of these,
211, 369 had been extended in accordance with the Mead-Barry Act
of 1939, which provided for extensions of amortization periods, in
justifiable cases, up to 25 years from the date of execution of the
mortgage held by the Corporation.
On June 30, 1944, four-fifths of the HOLC's outstanding accounts
were paid on schedule; this compares with 37 percent in 1936 and 53
percent in 4'939. Experience has been gratifying with the quarter
million loans extended from 15 up to a maximum of 25 years, begin-/
ning in 1939 under authorization of the Mead-Barry Act. When
the extensions were granted, all these borrowers were behind in their
payments. On June 30, 1944, 73 percent were paying exactly on
schedule. Many foreclosures and (resultant losses to the HOLC
have been averted through these extensions which cut down required
monthly payments by more than 40 percent.
The Home Owners' Loan Corporation, from the beginning of its
operations, adopted the practice of servicing its loans individually,
thus permitting the Corporation to discover causes of trouble and to
take action to avoid foreclosure. As part of this servicing program,
the Corporation holds funds to pay taxes and insurance, collected
from borrowers on a systematic monthly installment basis. This
procedure assists borrowers to avoid tax difficulties and has also
resulted in economies in the Corporation's administrative expenses by
eliminating the necessity for searching tax records to determine
whether delinquencies exist. During the 1944 fiscal year, the propor
tion of such accounts was increased from 56.2 percent of outstanding
loan accounts to 61.2 percent.
Properties acquired, including those subject to redemption.-The
HOLC acquired, from the time it commenced operations until June
30, 1944, 197,263 properties as a result of foreclosures, abandonments,
etc. In addition, the Corporation on June 30, 1944, held 417 prop
erties which had been acquired but were still subject to redemption.
Of the Corporation's property acquisitions, 193,750 were of properties
covered by original mortgage loans. Of the 1,017,821 original
mortgagors, all of whom faced loss of their properties under the conditions prevailing from 1933 to 1936, 824,071, or 81 percent, were
saved from foreclosure through the operations of the Home Owners'
Loan Corporation.
During the reporting period, 930 properties were acquired as com
pared with 2,118 during the fiscal year 1943. During the fiscal year
1944, the Corporation disposed of 21,512 properties as compared with
14,075 during the fiscal year 1943. Whereas net property acquisi
tions during the reporting period represented a decrease of 56.1 per-
30
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
cent from the preceding reporting period, there was an increase of
52.8 percent in properties disposed of by the Corporation.
Property accounts.-The foregoing figures indicate that the HOLO
during the fiscal year 1944 was successful in disposing of most of its
remaining 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
June
June
June
June
Properties owned or in process of acquisition
30, 1941---------------------------------------------------30, 1942----------------------------------------------37,
------------------------------30, 1943 ------30, 1944
---------------------
49,419
998
26,041
5,459
From the beginning of operations until June 30, 1944, the HOLC
acquired and had available for sale a total of 197,263 properties, of
which it had disposed of 192,221, or 97.4 percent. These figures do
not include 417 properties acquired but still subject to redemption.
If these latter properties are included in the total acquisitions, the
Corporation had disposed of 97.2 percent of all properties acquired.
At the close of the fiscal year 1944, the 'combined capital value of
properties which the Corporation owned or to which the Corporation
was in process of acquiring title was $36,063,486 as compared with
$191,298,828 on June 30, 1943, and $262,307,276 on June 30, 1942.
Sale of Corporation-owned properties through June 30, 1944, had
resulted in a total cumulative loss, including brokers' commissions
and selling costs, of $319,135,606. Other losses, which included
principal arid interest losses on mortgage loans and vendee accounts,
properties charged off, fire and other hazards, and fidelity and casualty
losses,-amounted to $1,208,116. This increased total losses from all
sources, cumulative through the close of the fiscal year 1944, to
$320,343,722.
As of June 30, 1944, cumulative net income before provision for
losses totaled $213,464,280. After deducting this, the Corporation's
losses in excess of its earnings as of June 30, 1944, were $106,879,442.
The loss figure given above on properties sold includes brokers' com
missions, selling costs, and the difference between the actual sales
prices and the capitalized value shown on the Corporation's books.
Capitalized value includes the unpaid principal value of the foreclosed
loan, delinquent interest and taxes, foreclosure and acquisition costs,
and reconditioning expenses. In other words, a large part of the
book losses reflects the cost of leniency to borrowers who eventually
had to be foreclosed.
The HOLC endeavors to sell its acquired properties as promptly
as possible. Pending sale, most of these properties are rented. At
the close of the fiscal year 1944, properties owned by the Corporation
contained 9,095 rental units, of which 1,761 units were not available
for rental because these were in process of repair, held vacant for sale,
or adversely occupied. The remaining 7,334 units were available
for rental and 6,246, or 85.2 percent, of these were rented.
The Corporation's gross operating income during the 1944 fiscal
year from the rental of properties was $7,533,006. Gross expenses
for rented and unrented properties, not including' interest and ad
ministrative expenses, was $6,388,238. During the year, therefore,
the Corporation's net operating income from property was $1,144,768.
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION"
31
On a cumulative basis from the beginning of operations until June
30, 1944, net operating income from properties owned by the Cor
poration was $25,718,946.
RECONDITIONING
Reconditioning activities of the Corporation are undertaken to
restore its properties and properties on which it has mortgages to a
condition of normal habitability. The Corporation, because of the
decrease in property acquisitions and in its real estate accounts, has
been able to reduce its reconditioning operations. This is shown by
the following table which indicates the number and total cost of re
conditioning operations completed during each of the last three fiscal
years:
Total
cost
Fiscal year
Number of
cases
1942.----------..........----------------------------------.
21,687
$9,174,051
1943...........
..-------------------------------------------------------------1944 --------------------------------------------------------------
10,836
3,093
4,69,428
1, 41,161
APPRAISALS
Pronounced changes in property valuations under war conditions
require the Corporation to continue making appraisals of its prop
erties and to review appraisals previously made. The decrease in
property accounts, and those in process of acquisition, has resulted
in a reduction in the number of appraisals. During the fiscal year
1944, appraisals and reviews completed totaled 25,867 as comipared
with 28,513 during the preceding fiscal year and 37,125 during the
fiscal year 1942. Appraisals and reviews completed between the
beginning of liquidation on June 12, 1936, and June 30, 1944, totaled,
524,270.
FINANCIAL STATEMENTS
Exhibit 25 of this report presents the balance sheet of the Home
Owners' Loan Corporation for June 30, 1944. As a result of the
Corporation's progress in liquidation, total assets decreased 19.9
percent during the reporting period.
Statements of income and expense for the fiscal year 1944 aInd for
the period from the beginning of operations through June 30, 1944,
are shown in exhibits 26 and 27, respectively. Operating and other
income for the fiscal year 1944 totaled $71,339,093. Total expenses,
including interest on bonded indebtedness, amounted*to $47,713,019,
leaving a net income before provision for losses of $23,626,074. After
allowance for the reserves necessary to meet future estimated losses,
the Corporation's deficit for the fiscal year 1944 amounted to $16,
506,809.
In comparison, operating and other income for the fiscal year 1943
amounted to $92,861,703. Total expenses, including interest on
bonded indebtedness, for, the same period, was $60,752,270, leaving
a net income for 1943, before provision for losses, of $32,109,432.
After allowance for the reserves necessary to meet estimated future
losses, the Corporation's deficit for the fiscal year 1943 amounted to
$8,116,595.
32
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
WAR HOUSING ACTIVITIES
Because of its extensive experience in reconditioning properties,
the Home Owners' Loan Corporation was requested by the National
Housing Agency to operate the publicly financed part of the wartime
conversion program of the Homes Use Service. The Corporation acted
simply to supervise the program and all of the Corporation's expenses
were reimbursed to it. After the close of the 1944 fiscal year, the
operation of the programn was transferred to the Federal Public
Housing Authority.
This conversion program was announced in October 1942 and con
version activities were started shortly thereafter. , The results
aphieved under this program are summarized in the following
paragraphs:
Programing-ThroughJune 30, 1944, 52,743 units had been pro
gramed for publicly financed conve4 sion by the National Housing
Agency. These units were scattered over 232 areas in 42 States.
Applications for conversion.-A total of 44,521 applications for
conversion were received by the Home Owners' Loan Corporation
during the fiscal year 1944. From these, 9,123 leases have been
executed for properties that will make available 47,451 units. Appli
cations pending disposition in the various stages total 311, and the
remaining 35,087 cases have been rejected or withdrawn. Possession
has been secured in 8,714 of the properties leased, and 46 are awaiting
possession.
Production.-Therewere 8,694 conversion contracts awarded during
the fiscal year 1944, covering the construction of 46,265 housing units.
Of these) 35,385 have been completed.
Cost.-The average cost per unit, estimated at the time of applica
tion, was approximately $1,662. A recent comparison with actual
costs indicates that this is a fairly accurate figure. Some increase in
cost is expected in the future because of the addition of repairs and
equipment not contemplated in the original estimates.
VII. UNITED STATES HOUSING CORPORATION
Under Executive Order No. 9070 of February 24, 1942, functions
relating to the United States Housing Corporation are now being
administered in the Federal Home Loan Bank Administration. The
United States Housing Corporation, which is near complete liquida
tion, was created in 1918 during World War I for the purpose of pro
viding housing for workers in congested war-production centers.
Congress was requested to authorize the Federal Home ,Loan Bank
Administration to use $173,000 of the special deposit account held
with the Treasurer of the United Stales in the name of the Corporation
to wind up the affairs of the Corporation. This request was granted
on July 2, 1942.
At the close of the reporting period, with few exceptions, all of the
Corporation's remaining properties were involved in litigation which
has delayed the completion of its liquidation. In the meantime,
appropriate steps have been taken to protect the Corporation's invest
ment in these properties.
The Corporation's income and expense statement for the period
March 1, 1942, to June 30, 1944, is as 4follows:
Income from rents, stipulation payments, and miscellaneous items - $322, 195. 37
Operating expenses- -------------------------------------61, 738. 91
9, 404. 54
Net losses from liquidation ----------------------------Net income for period-------------------------------251, 051. 92
The Corporation had for disposal on February 28, 1942, a total of
518 parcels of real estate, including 60 vacant lots, most of which were
in litigation. Of these parcels, 74, including 25 vacant lots, were
disposed of during therperiod March 1, 1942, to June 30, 1944, leaving
a total of 444 properties on hand on June 30, 1944, for liquidation.
33
LIST OF EXHIBITS
THE YEAR IN
RETROSPECT
Page
1. Estimated number of new nonfarm dwelling units, by,
source of funds and type of structure, fiscal years 1942,
1943, and 1944 --------------------------------2. Indexes of total building cost, and of cost of materials and
labor used in construction of standard six-room frame
house, fiscal years 1943 and 1944--------------------3. Nonfarm real-estate foreclosures, by Federal Home Loan
Bank Districts and by States, fiscal years 1943,and 19444. Selected figures on residential real estate owned by finan
cial institutions, December 31, 1942, and December 31,
1943--------------------------------------------5. Estimated volume of mortgage loans originated on non
farm one- to four-iamily dwellings, by type of lender,
1931 through 1943---------------------------------6. Estimated recordings of nonfarm mortgages of $20,000 or
less, by type of mortgagee, fiscal year 1944-----------7. Estimated balance of outstanding mortgage loans on non
farm one- to four-family dwellings, 1931 through 1943 8. Changes in selected types of individual long-term savings,
December 31, 1936, through December 31, 1943 ------SAVINGS AND LOAN
37
37
38
39
39
40
42
42
ASSOCIATIONS
9. New loans made by member associations, by purpose,
fiscal years 1942, 1943, and 1944--------10. Combined statement of condition for all reporting savings
and loan members of the Federal Home Loan Bank
System, by type of association, as of December 31, 1942,
and December 31, 1943----------------------------11. Consolidated statement of operations for 3,681 reporting
member savings and loan associations of the Federal
Home Loan Bank System, for the year ended December
1943------------------------------------
43
44
45
FEDERAL HOME LOAN BANK ADMINISTRATION
12. Members of the Federal Savings and Loan Advisory Coun
cil, during the meetings held in the fiscal year 1944 ---13. Federal Home Loan Bank Administration-Number of
employees, 1939 to 1944 ---------------------------
35
47
47
36
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
FEDERAL HOME LOAN BANK SYSTEM
Page
14. Statement of receipts and disbursements of the Federal
Home Loan Bank System of the Federal Home Loan
Bank Administration during the fiscal years 1943 and
1944-----------------------------------------15. Number and estimated assets of member institutions,
June 30, 1943, and June 30, 1944 ---------------------16. Advances and repayments for the periods indicated, and
the balance of advances outstanding at the close of such
periods --------------------------------------17. Interest rates charged member institutions on new ad
vances as of July 1, 1944 --------------------------18. Federal Home Loan Banks-Statement of condition as of
June 30, 1944 ------------------------------------19. Federal Home Loap Banks-Analysis of surplus and undi.
vided profits for the fiscal year ended June 30, 1944_-20. Federal Home Loan Banks-Statement of profit and loss
for the fiscal year ended June 30, 1944----------------
47
48
49
50
51
54
56
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION
21. Number and assets of all insured associations, by Federal
Home Loai Bank Districts and by States, June 30, 1943,
and June 30, 1944
22. Statement of condition as of June 30, 1944 ------23. Income and expense statement for the period July 1, 1943,
through June 30, 1944 -------------------------24. Statements of condition and operation for insured institu
tions in receivership, June 30, 1944 - ----------------HOME OWNERS'
63
64
LOAN CORPORATION
25. Balance sheet as of June 30, 1944 --------------------26. Statement of income and expense for the fiscal year 1944 - 27. Statement of income and expense from the beginning of
operations, June 13, 1933, to June 30, 1944 ------------
60
62
66
68
68
EXHIBITS
EXHIBIT
1.--Estimated number of new nonfarm dwelling units, by source of funds
and type of structure
Private
Total non- --u
farm
Sfar
1-family
Fiscal year 1942, total.----..
Public
famly
family 5
652,100
430, 409
23, 838
43, 714
154,139
161, 586
' 06, 327
94, 804
67, 692
8,013
5, 573
5, 288
4,964
13, 474
10, 842
10, 933
8,465
28, 327
12, 858
27,475
85,479
391, 651
155, 532
14, 905
24, 385
196, 829
94, 600
96, 900
118,105
53,132
36, 695
26, 932
38, 773
3, 235
3, 976
2, 689
5,005
7, 521
4,488
4, 527
7,849
30, 712
51, 741
83, 957
30,419
47. 029
135,809
16, 396
25, 576
69, 248
76,145
73, 681
48,925
48, 278
37, 361
33, 243
31,107
34,098
5, 662
4, 410
2,703
3, 621
9, 561
7, 693
3, 523
4, 799
23, 561
28, 335
-11, 592
5, 760
.---- -
.
2-family 1
--------211,400
Third quarter, 1941...Fourth quarter, 1941
...----------...
135, 600
....
-----138, 500
First quarter, 1942- -.---------.
166, 600
Second quarter, 1942....
Fiscal year 1943, total
..-.-------
lic
-
-------. .
Third quarter, 1942-----------------Fourth quarter, 1942----First quarter, 1943---------------Second quarter, 1943----------82,046
Fiscal year 1944, total-2--------Third quarter, 1943----------Fourth quarter, 1943------------First quarter, 1944 --.
----------------Second quarter, 1944---
1Includes
1- and 2-family dwellings with stores.
2 Includes multifamily dwellings with stores.
Source: Division of GConstruction and Public Employment, Employment and Occupational Outlook
Branch, Bureau of Labor Statistics, U. S. Department of Labor.
EXHIBIT 2.-Indexes of total building cost, and of cost of materials and labor used in
construction of standard 6-room frame house
[Average month 1935-39=1001
PPeriod
MateLabor
rialsrials
Fiscal year 1943:
1942-July --------121. 2
August -----121.2
September--121.5
October -----121.6
November--121.5
December ---121.4
1943-January-- 121.5
February-----121.9
March---....----122.0
April .-----121.8
May----------. 122. 2
June----------.....
123.0
128.5
129.4
130. 2
130. 2
130. 2
130. 7
130.9
132. 5
133.0
,133.4
134. 2
134.3
Total
123.7
124.0
124 4
124. 5
124.4
124. 5
124.7
125. 5
125. 7
125. 7
126. 2
126.8
Period
Mate-
Labor
Fiscal year 1944:
1943-July---------123.7
August ..-----123.4
September--124.4
October .....-----126.0
November ..--126. 8
December ..--127.6
1944-January-..
127.8
February -----128.8
March--------129.1
April----....----129. 7
May----------130.3
June
----130. 7
134.3
134.2
133.8
135.0
135.6
136.0
136.1
136. 5
136.8
137.0
137. 3
137.5
Source: Division of Operating Statistics, Federal Home Loan Bank Administration,
37
Total
127.3
127.1
127. 6
129.1
129. 8
130. 5
130.6
131.4
131. 7
132. 2
132. 7
133. 0
38
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT 3.-Nonfarm real-estateforeclosures, by FederalHome Loan Bank Districts
and by States
Number, year
Number, year
ending June 30--
Bank District and State
United States-.....
No. 1-Boston-----....
Connecticut -------Maine---------Massachusetts ----New HampshireRhode Island ...--.
Vermont----...-----.
No. 2-New York- ....-New Jersey-.....-New York----------
No. 3-Pittsburgh .....
Delaware------------......
Pennsylvania......----West Virginia ---.
No. 4-Winston-Salem -
Florida -----
Georgia-------Maryland---------North Carolina _--South Carolina---Virginia-------------.......
....
No. 5-Cincinnati-----
33,402
20, 710
No. 7-Chicago ........
3, 511
2,452
-30. 2
556
463
,2, 098
171
183
40
624
285
1,324
89
101
29
+12 2
-38.4
-36.9
-48 0
-44.8
-27. 5
8, 340
5,515
-33.9
1,592
6, 748
905
4, 610
-43.2
-31.7
-38.0
5, 724
3, 535
-38.2
86
5,142
496
38
3, 207
290
-55.8
-37.6
-41.5
4, 017
-43. 1
2, 286
529
77
727
492
613
614
188
777
211
65
408
278
390
357
81
496
-60.1
-15.6
-43.9
-43.5
-36.4
-41.9
-56.9
-36.2
-40.7
2, 920
1, 731
Kentucky-----Ohio-----Tennessee----------
421
1, 683
816
222
980
529
-47. 3
-41.8
-35.2
No. 6-Indianapolis--
853
405
-52.5
426
427
218
187
-48.8
-56.2
Indiana--------Michigan -------..
1,897
1,121
-40.9
1, 242
655
791
330
-36.3
-49.6
No. 8-Des Moines---
1,949
1,277
-34.4
Iowa...----------------
Minnesota---------..
Missouri--.....-------North Dakota-..South Dakota------
210
345
1,161
90
142
105
198
796
94
84
-50.0
-42.6
-31.4
+4.4
-40.8
No. 9-Little Rock ....--
1,165
649
-44.3
113
275
146
31
600
55
177
59
21
Illinois -------..........
Wisconsin----------
Arkansas----- ...
Louisiana --------Mississippi ---New Mexico .....------Texas -------......
No. 10-Topeka .....----Colorado---------Kansas-----------Nebraska---------Oklahoma--------No. 11-Portland......-Idaho .-----------...........
Montana.....----..--Oregon-------------
Utah.--------
Washington ..---------..
Wyoming---..---_
No. 12-Los Angeles---..
Arizona
------California -----......
Nevada-.---_----
337
-51.3
-35.6
-59.6
,-32.3
-43.8
1, 179
799
-32. 2
198
270
426
285
124
109
424
142
-37.4
-59. 6
-0.5
-50.2
340
170
-50.0
24
39
96
32
128
21
10
39
40
9
64
8
-58.3
0.0
-58.3
-71.9
-50.0
-61.9
1,508
770
-- 48.9
48
1, 456
23
744
3
4
Source: Division of Operating Statistics, Federal Home Loan Bank Administration.
Percent
Bank District and State endingJune
1943
1930- Percent
change
1943 1944
I
Alabama----------District of Columbia
ending June 30-
30-Percene
ndingJune
1943
1944
change
1943 1944
-52. 1
-48.9
-25.0
39
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT 4.-Selected figures on residentialreal estate owned by financial institutions,
Dec. 31, 194g, and Dec. 31, 1943
[Amounts in thousands of dollars]
Dec. 31
Decrease during 1943
Type of institution
1942
Savings
1943
Amount
Percent
--------------and loan associations 1--..
Mutual savings banks 3-------------------------..
Commercial banks 4........................
Life-insurance companies 5-----------------------
2 $202, 686
2 142, 111
85,000
295,062
$113, 304
80, 605
49,248
212,818
$89, 382
61, 506
35, 752
82, 244
44 1
43.3
42 1
27 9
Totali private------------------------------------------Home Owners' Loan Corporation 6-------------
2 724, 859
221,512
455, 975
94,140
268, 884
127,372
37. 1
57 5
2 946, 371
550, 115
396,256
41 9
Grand Total -------------------------------.-.
-
1 Estimate based on reports of operating associations received by the Federal Home Loan Bank Ad
ministration.
2 Revised.
3 Estimate based on reports from the Comptroller of the Cunency and State supervisory authorities.
4 Based on repoits 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.
EXHIBIT 5.-Estimated volume of mortgage loans originatedon nonfarm 1- to 4-family
dwellings, by type of lender
[Millions of dollars]
Type of lender
1931 1932 1933 1934 1935
1936 1937 1938 1939
1940
1941
1942
1943
Savings and loan associa
tions --------------- $892 $543 $414 $451 $564 $755 $897 $798 $986 $1, 200 $1, 379 $1, 051 $1,184
Insurtance companies
169
54
10
16
77
140 232 242 274
324
371
374
272
Mutual savings banks- _
350 150
99
80
80
112
133
171
130
100 120 105
120
Commercial banks and their
trust departments -----364 170 110
110 264 430, 500 560 610
689
798
606
515
Home Owners' Loan Cor
I poration ------------------ ----132 2, 263 583
128
27
81 151
143,
63
40
54
Individuals and others 1- 400 175 100 150 443 605 723 669 740 2801 21,028 2954 1, 038
Total-------------
2,175 1,092
865 3, 070 2, 011 2,158 2,499 2, 455 2, 873 23, 290
23, 810 23, 155
3,183
Includes fiduciaries, mortgage, title, and real-estate companies, construction companies, philanthropic
and educational institutions, fraternal orgam7ations, State and local governments, etc.
2 Revised.
Source: Division of Operating Statistics, Federal Home Loan Bank Administration.
40
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
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REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
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42
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT 7.-Estimated balance of outstanding mortgage loans on nonfarm 1- to
4-family dwellngs,
[Millions of dollars]
Type of mortgagee
1931
Savings and loan associations ,------------$5, 890
Insurance companies ---------------------1, 775
Mutual savings banks
3, 375
Commercial banks ----------2,145
Home Owners' Loan Corporation
---------------Individuals and others------------------7, 500
Total---------------------------
20, 685
Type of mortgagee
------Savings and loan associations ----Insurance companies-- ----------------------------Mutual savings banks---------------------Commercial banks-------------------------------------Home Owners' Loan Corporation
Individuals and others
-------------------
1932
1933
1934
1935
1936
$5,148
1,724
3, 375
1,995
7, 000
$4, 437
1,599
3, 200
1, 810
132
6, 700
$3, 710
1, 379
3, 000
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
6,180
19,242
17,878
17,857
17, 510
17,225
17,344
1938
1939
1940
1941
1942
$3, 555
1, 320
2, 670
1,600
2, 169
6, 332
$3, 758
1, 490
2, 680
1,810
2,038
6, 440
$4, 084
1,758
2, 700
2,095
1,956
6, 510
$4, 552' 2 $4,556
1,976
2, 255
2, 730
2. 700
2, 470
2, 480
1, 777
1,567
6, 590
6, 350"
17, 646
18,216
19, 103
20, 095
2
Total---------------------------------------
19,908
1937
1943
$4,554
2,410
2,660
2, 450
1,338
6,100
19,512
1
For detailed explanation of preparation of these estimates, see footnotes to exhibit 10 of Ninth Annual
Report of Federal Home Loan Bank Board.
2 Revised.
Source: Division of Operating Statistics, Federal Home Loan Bank Administration.
EXHIBIT 8.-Changes in selected types of individuallong-term savings, Dec. 31, 1936,
to Dec. 81, 1943
[In millions of dollars]
1936
1937
1938
1939
1940
1941
1942
1943
Per
cent
1942-43
Total ------------Life insurance companies 2
Mutual savings banks 3 _
Insured commercial banks 4
Savings and loan associa
tions
-- -------------Postal savings 6------------21/ percent
Postal Savings
7
bonds -----------------Savings
States
United
_bonds 8s.
$46, 428 $49,109 $51,144 $54,190 $57, 633 $61, 540 1i$70,421 $85, 804
+21
8
19, 133
10.013
11, 491
20, 510
10, 126
12,100
21,858
10, 235
12, 196
23, 381
10,481
12, 622
25, 025
10,618
13,062
26,877
10,490
13, 261
29, 043
10,621
13, 820
30, 567
11,707
16, 572
+5. 2
+10. 2
+19. 9
3,926
1, 291
4, 011
1, 303
4,035
1, 286
4,092
1, 315
4,-304
1, 342
4,685
1, 392
5,464
1, 837
83
+11.3
+29. 6
\
-1.2
19, 574
+86. 0
99
95
92
90
87
85
14,910
1, 417
I 1
84
475
964
1, 442
2, 209
3,195
4, 750
10, 526
I Revised
2 Estimated accumulated savings inm nited States life-insurance companies. Represents reserves plus
unpaid dividends and surplus to policyholders, except that deduction is made of policy notes and loans
and net deferred and unpaid premiums. Source, The Spectator.
3 Deposits. Source: The Month's Work, published by tne National Association of Mutual Savings
Banks.
4 Deposits evidenced by savings passbooks for insured commercial banks; 1943 figure estimated. Source;
FDIC.
5 Estimated private investments in savings and loan associations, including deposits and investment
securities. Series revised to exclude shares pledged against mortgage loans. Source. Federal Home Loan
Bank Adminstration.
-,Due, depositors, outstanding principal and accrued interest on certificates of deposit, outstandcng sav
Source Post Office Department.
ings stainps, and unclaimed deposits
7 Excludes such bonds held by the Postal Savings System'. Source: Treasury Daily Statements and
Post Office Department
8 Current redemption value. From May 1, 1941 includes War Savings bonds, series E.
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
43
EXHIBIT 9.-New loans made by member associations, by purpose
[Thousands of dollars]
i
i
-
Fiscal year 1942-.... _.-..
September 1941 -----December 1941 -----.--March942-June 1942- .. ..
Fiscal year 1943 ...-. -
..--.
September 1942- .------December 1942 -.....
March 1943 -----------June'1943_------- ---Fiscal year 1944 ............
September 1943 .----December 1943----.--March 1944 .... _........
June 1944-
Construetion
Total
Period
I
-
Home
purchase
RefinancRecondiing
- tioning
1-
I
I
-
I
Other
l
$1, 063, 445
$311,039
$477,193
$152,561
$43,503
$79,149
333,463
281,379
206, 667
241, 936
116,481
87,222
58, 924
, 48, 412
138,334
123,426
88, 454
126, 979
42,088
38,614
33, 675
38, 184
14,184
11,613
8, 125
9, 581
22,376
20,504
17, 489
18, 780
895, 534
112,308
545, 580
148,017
29,070
60, 559
239,077
201, 228
181,486
273, 743
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
6, 778
15, 711
14, 293
13,882
16, 673
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
44
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT 10.-Combined statement of condqtion for all reportzng savings and loan
members of the Federal Home Loan Bank System, by type of association, as of
Dec 831,1943, and Dec. 31, 1942
[In thousands of dollars]
All members
Insured State
chartered
Federals
Uninsured State
chartered
Balance-sheet items
1942
1943
1942
1943
1942
1943
1942
1943
ASSETS
First mortgage loans (in
cluding interest and ad
vances)
3, 989, 51414, 047, 693 1,859,892 1,920, 73 1,031, 495' 1,103,944: 1,098,127 1,023,014
Junior mortgage liens (in
cluding - interest and ad
512
vances)
'2,061
1, 645
482
703
520
851
643
Other loans (including share
3, 514
loans)
4, 144
3,960
4,839
8,149
17, 132
12, 617
5,143
57, 792
52, 245
162, 349 141,422
58, 239'
51,269
37, 908
Real estate sold on contract-.
46, 317
124, 752
36,910
21,344
36, 737
21, 658
26,510
Real estate owned ---------69, 512
51, 105
Federal Home Loan Bank
28, 204
56, 024
24, 523
12, 926
15, 288 ,' 12,494
12, 532
49, 943
stock -----U. S Government obliga
tions -----75, 161 206, 077
----259, 679 738,649 119,124 375, 201
157, 370
65, 393
Other investiments (includ
3, 386
23, 112
13, 015
25,07C
4.054
10, 588
ing accrued interest) - ---8,470
8, 669
183, 75
Cash on hand and in banks336, 281 387, 229
162, 933
93,140 119, 054
80, 208
84, 425
Office building (net) ---20,83C
21,547
13, 649
13, 644
47, 272
46,85C
12,793
11,659
Furniture,
fixtures,
and
3, 422
1, 564
2,808
1, 757
844
6, 077
5, 216
equipment (net) --------898
1. 728
7, 27(
2,301
2,392
1, 713
3, 258
2, 554
6,674
Other assets
------------------- -------I.
____________________---------Total assets ------5, 025, 451 5, 538, 600 2, 296, 441 2, 616, 054 1, 340, 947 1, 551, 275 1, 388, 063 1, 371, 271
LIABILITIES AND CAPITAL
U. S. Government invest
ment (shares and deposits)
167, 902
Private reputchasable shares- 3, 746, 191
Mortgage pledged shares 125, 682
Deposits and investment
350, 955
certificates ----------Advances from Federal Home
Loan Banks
131, 152
---Other borrowed money -11, 530
Loans in process -----29, 556
Advance payments, by bor
22, 455
rowers------------------21, 805
Other liabilities ---Capital, permanent reserve
25, 841
or guaranty stock
____.__
Deferred credit to future op
14, 894
erations_-----Specific reserves------8,411
246, 836
General reserves ----676
Bonus on shares
------Undivided profits and sur
121, 565
plus-------------------Total liabilities
capital --------.
112,057
54, 454
136,136
1, 884,808 2, 259, 962
5,705
4, 324
31, 605
14, 872
161
860, 497 1,036, 551 1,000, 886 1, 014, 035
99, 451
20, 526
17, 876
89,857
378,555
279
72
231, 772
270, 305
118,904
108,178
107,869
19,148
37,508
83, 776
4,458
15,782
74,386
12,111
21,651
32,043
3,036
9, 273
25, 696
3,402
13, 292
15, 333
4,036
4, 501
7, 787
3, 635
2, 565
26,082
21,200
10, 778
10,387
12,544
9,517
6, 863
7, 269
8,092
7, 455
4, 814
4,149
5,446
4,228
25,509-----------------
21,963
21,450
3, 878
4,059
12,513
7,480
273,591
877
6,020
4,221
83,787
532
5,161
3, 675
98, 310
587
4, 641
2,122
77,033
136
3, 642
2,119
90, 298
113
4, 233
2, 068
86,016
8
3, 710
1, 686
84,983
177
136, 337
49,772
59, 300
32,168
36, 112
39, 625
40,925
and
Number of reporting associ
ations---------------------
69,326
1,310, 548
, 025,451 5, 538, 600 2,296, 441 2, 616, 054 1, 340, 947 1, 551, 275 1, 388, 063 1, 371, 271
3, 737
3,701
1,464
1,466
927
974
1, 346
1, 261
REPORT FEDERAL HOME LOAN BANN ADMINISTRATION
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REPORT, FEDERAL HOME LOAN BANK ADMINISTRATION
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REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
47
EXHIBJT 12.-Federal Home Loan Bank Administration-Members of the Federal
Savings and Loan Advisory Council, during the meetings held in the fiscal year
1944
Federal Home Loan Bank District
Boston
-------------.-..
New York---_
---Pittsburgh----------Winston-Salem ___.___
Do
------------Cincinnati -----Do
---. -----.--Indianapolis ------- ---------- ------Chicago -------...--------
Do------
--------
Des Moines-------------Do
--------------Little Rock --..- ------Topeka ------------------Portland -----------.-------Los Angeles.-----------------------Do .--------
-Elected or
appointed
Member
I--
-
'
Raymond P. Harold
Francis V D. Lloyd
James J. O'Malley-Horace S. Haworth
J. F. Stevens ---R. P Dietzman iW. Megrue Brock -____
Walter Gehrke ----C. W. Reulmng
A. G. Erdmann-E A Purdy-------C. R. Mitchell----J. J. Miranpe --George E. McKinnis
T. M. Donahoe -----David G. Davis ---C. A. Carden -------
---------------------------------------------------------------------------------
Elected.
Do.
Do.
Appointed.
Elected
Appointed.
Elected.
Do.
Appointed.
Elected.
Appointed.
Elected.
Do.
Do.
Do.
Appointed.
Elected.
1 Deceased; Harry S. Kissell was appointed for the remainder of the term.
EXHIBIT
13.-Federal Home Loan Bank Administration-Number of employees
Date
July
July
July
July
July
June
1, 1939---------------------------..
1, 1940-----------------------------1, 1941 ._--_.
--.--..
-.--1, 1942
1, 1943-..----------------------------...
.
30, 1944--------.
.
------------... .---------
Federal
Home
Loan
Bank
System
Home Owners' Loan
Corporation
Federal
Savings
and Loan
TTotal
Insurance
Corporation
359
398
451
359'
299
284
Home
office
39
47
56
74
60
53
Field
1, 318,
1,274
1,256
1,026
750
581
9, 689
8,569
6, 508
4,202
2, 569
1, 951
11, 405
10,288
8,271
5,661
3, 678
2, 869
EXHIBIT 14.-Federal Home Loan Bank System of the Federal Home Loan Bank
Administration-Statement of receipts and disbursements during the fiscal years
19483 and 1944
[Cash basis]
July 1, 1942, to July 1, 1943, to
June 30, 1943
June 30, 1944
Balance at beginning of fiscal year----------------------..------
$353, 374 06
Receipts
Federal Home Loan Banks
-----------------------Home Owners' Loan Corporation------ ---------Federal Sa Vings and Loan Insurance Corporation
----------------------------------Examining receipts
Miscellaneous refunds__-------------------------------Reimbursement for conservators' expense
Sale of material ------------------------------Refund from Treasury Department
----------------Refund from Federal Loan Agency------------------------------Refund from National Housing Agency
Total receipts---------------------------------------------Total cash and receipts----------
-----
300, 000
0
103,678
918, 321
27,991
3, 600
8
0
4,148
0
1, 357, 74
00
01
39
37
29
00
29
35
1,711,121 411
$409,119.12
350,000
27,957
75, 702.
953, 477
6, 662
0
446
1,826
216
1, 814
00
44
99
51
90
00
41
73
84
1,418,104 82
1,827,223 94
48
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT 14.-Federal Home Loan Bank System of the Federal Home Loan Bank
Administration-Statement of receipts and disbursements during the fiscal years
1943 and 1944-Continued
[Cash basis]
July 1. 1942, to July 1, 1943, to
June 30, 1943
June 30, 1944
Disbursements
Salaries -----------------------------Supplies and materials---------------------Newspapers and periodicals -----------------Communications -----------------Travel
Transportation of things
--Printing and binding -----------------------Other contractual services ------------------Rents and utilities
Equipment (furniture and fixtures)--------/ Transferred to administrative expenses
National Housinm Agency
Treasury Department------------------Total disbursements-------
--
--------- 409,-119 12
289,216.311
7,064 00
1,000 00
-
Balance at end of fiscal year-
EXHIBIT
----------1,302, 002. 29
$1,010,073 817
6, 805 1I9
317. 51)5
114, 481 8( }
202,155411
355 4( 9
2,802 4c9
189,195 5 3
69, 230 3( i
135 94
4
42, 454 0(
0
0
1,538, 007. 6t 3
$1, 059, 584. 99
5, 697 70
117 00
10,732 64
------ ---166,758.35
328 87
7, 632 10
---------.--------------13,598 10
26, 820 48
-----------2, 668.06
15.-Federal Home Loan Bank System-Number and estimated assets of
member nittutions,Jime.80, 1943,
dJune 80, 1944
Assets of members (in
Number of members
1943
----
--
United States_
-
_____________-
thousands of dollars)
--------------- 1-
Bank District and States
I
-
1944
-----
1943
1944
I-----
3, 714
---------------------------
3,774
$6,045,016
$6,840, 241
---------------------------
237
51
23
132
21
5
5
236
51
22
132
21
5
5
958,698
162,611
25,077
636, 588
81,165
47,129
6,128
1,045,816
188, 154
29,891
678,494
88, 701
53,851
6,725
370
I
236
134
359
1
223
136
617, 595 1 ,
243, 269
374, 326
694,444
272, 511
421,933
No. 3-Pittsburgh--Delaware--------Pennsylvania
West Virginia---
477
7
443
27
453
7
419
27
320,199
3, 440"
292, 163
24, 596
370, 224
3,965
340, 588
25,671
No 4-Winston-Salem ..
Alabama
District of Columbia
Florida ------Georgia
Maryland
North Carolina
South Carolina -..--Virginia-------------
414
412
27
22
50
55
63
112
44
39
801, 848
905. 344
24, 961
172, 467
103, 964
53,606
96, 822
240, 850
48, 611
60, 567
29, 074
188, 579
126,802
62, 578
113, 259
264, 313
53, 495
67, 244
No. 5-Cincinnati ----Kentucky -----Ohio----------------Tennessee
564
78
450
36
561
75
450
36
992, 895
88, 102
864, 981
39,812
1,117, 746
96, 725
975, 364
45, 657
No 6--Indianapolis
Indiana -----------Michigan
---
220
162
58
221
163
58
360, 448
216, 841
143,607
399, 626
236, 606
163,020
No 7-Chicago
455
454
500, 018
578, 852
343
112
341
113
374, 669
125, 349
444, 093
134, 759
No. I-Boston--__
Connecticut
Maine--------Massachusetts
New Hampshire
Rhode Island-Vermont
---------------- --------------------------------------------------------------------------------------------------------------------------------------------
No. 2-New York.
New Jersey
New York -------
Illinois
Wisconsin
_
-------------------
28
21
50
56
63
113
44
39
-
.
,
49
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT 15.-Federal Home Loan Bank System-Number and estimated assets of
member institutions,June 30, 1943, and June 30, 1944-Continued
Number of members
Assets of members'(m ,
thousands of dollars)
Bank District and States
1943
No. 8-Des Moines
----------- -------.-----------------------Io,*
. Minnesota-------------------------------Missouri
North Dakota-------------South Dakota ----------No 9-Little Rock -----------------..---.
Arkansas -------.----------------------------..
Louisiana ----------------------Mississippi
-------------New Mexico -----------------------------Texas----------------No. 10-Topeka ---------------------------Colorado----Kansas--------------------------------------Nebraska ------------------------Oklahoma-------__
No. 11-Portland...
1944
244
1944
$281, 627
61, 706
85, 231
116, 293
13, 732
4,665
414,491
23,103
100,762
29, 642
7, 909
253 075
202, 654
38, 274
61, 487
29, 688
73 205
$322 968
128
8
14
26
10
59
10
1
165
207, 901
9, 527
13,177
42, 689
23, 750
111,452
6, 761
545
386,642
249, 708
12,645
14, 507
50-,772
29,652
133, 859
7, 526
747
3
156
1
5
8, 131
370, 523
904
7, 084
73
72
43
104
13
11
280
41
67
26
14
132
214
39
92
31
52
43
100
13
10
278
40
67
26
14
131
209
39
87
31
52
_,_ I
___ i
130
Idaho---------------------------------------8
Montana
---------------------14
---------------------------.
Oregon26
Utah --------------10
Washington ---------- ----------------------61
-----------------Wyoming
10
Alaska------------------------------------1
------------------------No. 12- Los Angeles
169
...------------------------------------Arizona
..
3
California-------------------------------160
Nevada -------------------------------------1
-------------------------Hawaii
5
Source
1943
238
69, 266
105, 070
128,115
15, 844
4,673
456,834
22,405
110,030
32, 409
8, 524
283,466
221, 885
41, 276
66, 912
32, 842
80,855
._._ ___
476, 794
9, 654
457, 755
1, 109
8, 276
Division of Operating Statistics, Federal Home Loan Bank Administration
EXHIBIT 16.-Federal Home Loan Banks-Advances and repaymentsfor the periods
indicated, and the balance of advances outstanding at the close of such periods
Period
Fiscal year:
1933
------------1934 -----------1935 ---------------------------1936
1937 --------------1938-1939 ------------1940 ------------1941-- ---------------------1942 ------------1943 ----- --------1943-July--------------August
September --------October
----November___
December - --------------------1944-January ----------February
M arch ---------------------------April .----.
---------May -- ----------June -------------------------Total, fiscal year 1944---Grand total through June 30, 1944-
alance out
epayments
Repayments..standing
Advances
$48, 894, 602
62, 871, 970
36, 683, 308.
78,195, 224
114,287,052
105, 432,157.
76, 659,074
108, 009, 901
142, 875, 563
155, 025,046
96, 346, 312
41
22
61
32
41
95
62
23
45
83
85
$1, 230, 772
25, 387,445
42, 599, 148
38, 840, 900
65, 817, 003
76, 264, 107
103, 922, 448
119, 574, 417
130, 375, 220
132, 277, 500.
198,799, 671
82
72
52
50
85
15
88
17
91
65
97
$47,663, 829.59
85,148, 354 09
79, 232, 514 18
118, 586, 838 00
167, 056, 886 56
196, 224, 937. 36
168, 961, 563 10
157, 397, 047 16
169,897, 389 70
192, 644, 935 88
90,191, 576. 76
18,650,247
3, 672, 355
56, 501, 281
8, 299,165
5, 093,156
12, 626, 090
28, 948, 700
13, 280, 099
3,189, 871
3, 467, 657
3, 938, 933
64, 833, 307
50
00
16
68
38
89
00
00
50
00
33
50
17, 300, 521
13, 847, 347
7, 502, 543
11, 980, 753
15,420,817
18,914,072
24, 452, 446
13, 690, 386
17, 965, 244
20, 200, 926
14, 978, 243
8,161, 591
41
79
61
84
75
02
74
60
25
51
55
52
91, 541, 302
81, 366, 310
130, 365, 047
126, 683, 459
116, 355, 798
110,067,816
114, 564, 070
114,153, 782
99, 378, 409
82, 645, 140
71, 605, 830
128, 277, 546
222. 500, 864 94
184,414,895 59
1, 247, 781, 079 84
1, 119, 503, 533 73
I
I_
85
06
61
45
08
95
21
61
86
35
13
11
50
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT 17.-Federal Home Loan Banks-Interest rates charged member instztu
ftons on new advances as of July 1, 1944
Federal Home Loan Rat e in
Bank
effect
Boston -
---- --"
1 i4% Short-term advances amortized within 1 year, or secured by Government
2
New York-
--
-
Pittsburgh
-----
2Y
1
2
'2
12
2
Winston-Salem -Cincinmnati -....----
Indianapolis .----
3
2
12
2
1
2
2
2Y,
Chicago -------.-...
1
2
214
3
Des Moines -------
1Y
2
Little Rock ------
Topeka..........------
Portland.........-------
2Y
2
1
2Y2
1
2
2
Los Angeles-------
Types of advances
3
1
2
2Y2
bonds ,
On advances for 5 years, for defense housing purposes, not exceeding 10
percent of member's assets, amortized at not less than 5percent quarterly.
All other advances.
Short-term advances amortized within 1 year.
Long-term advances
Short-term secured advances for purchase of Government securities during
war loan drives
Advances for 5 years with amortization of 10 percent per annum, payable
quarterly, for purpose of repurchasmg HOLC and Treasury share in
vestments.
All other advances.
All advances
On advances not exceeding 1 year secured by (1) obligations of or guaranteed
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.
On advances not exceeding 6 months.
On advances not exceeding 1 year, but m excess of 6 months.
On long-term advances for the first year of the note.
On long-term advances beginning with the second year from the date of
the note.
Short-term advances amortized in equal monthly installments.'
On 1-year unamortized advances for purpose of repurchasing share invest
ments made by HOLC or Treasury, or,purchase of Treasury obligations.
1
Short-term advances amortized by not less than 2Y percefit quarterly.
All other advances.
1
Advances must not exceed 10 percent of member's assets.
On secured advances not exceeding 6 months, without amortization re
quirement, for purchase of Government bonds. Such advances, to
getber 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.
Advances exceeding L year.
All advances
On secured advances not exceeding 6 months, without amortization re
quirement, for purchase of Government bonds during Fifth War Loan
drive.
,All other advances.
On advances not exceeding 4 months to purchase Government securities
during Fifth War Loan drive, such loans to be collateralized by such
securities; renewable at 2 percent if bond secured or 3 percent if mortgage
secured.
Advances collateralized by Government obligations.
Effective for the month of July 1944 on advances for retiring Treasury or
HOLC investments on an unsecured basis, with maturity not to exceed
6 months. Renewals to be on secured basis.
All other advances.
On 1-year secured advances for purchase of Government bonds.
On secured advances for purchase of obligations of United States or in an
amount equal to the purchase price or par value, whichever is less, of
oblIgations of the United States purchased since Jan. 1, 1942. (Fore
going advances limited to $100,000 or 25 percent of line of credit, which
ever is greater.)
All other advances.
1 Rates on advances to nonmembers are
more.
Y
percent higher, except Cincinnati which charges 1 percent
51
REPORT FEDE13AL HOME, LOAN BANK ADMINISTRATION
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61
-REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
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62
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT 22.-Federal Savings and
Loan Insurance Corporation-Statement of
condition
June 30, 1944
June 30, 1943
ASSETS
Cash in U. S. Treasury:
Special deposit account-...---------------------------------Available for:.
Administrative expenses:
1942-----------------------------------------1943 ...------------------------------------------------1944
-----------------------------------------------Employees' bond allotment account-----------------------------Withholding tax account---- -----------------------------------
$950, 478 02
2,571
7,106
30,472
2,339.
7,402
$961, 578. 82
95
98
25
79
60
2,443. 91
4,093.83
0
1,196 10
2,611.50
1,000,371 59
971, 924.16
Accounts receivable:
Insurance premiums:
Payments due------.
...........-------------------------------------9, 721. 54
Payments deferred .
1,167, 313.19
..........------------------Admission fees due .......---.......----------------------------------------------....
Due from receiver for institutions in liquidation --------------------1, 652. 53
Liquidating dividends receivable on subrogated accounts in insured
0
institutions .-----------------------------------------------Miscellaneous---------------------------------------------345 60
13, 740 75
1, 025, 363. 71
2,531. 04
3,029.84
1, 179,032. 86
1,051,609.41
146, 782, 000 00
20,408. 51
137, 062, 500. 00
225,092. 33
146, 802,408. 51
137, 287, 592 33
Investments:
United States Government obligations and securities fully guaran
teed 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 ......................----------........................---------------------
118 44
6,825. 63
181,977 89
110,861.49
3,169, 558.02
701, 838. 57
4, 556, 070. 06
728,903.45
2,467,719 45
3,827,166 61
151, 631, 510 30
143, 249,154.00
00
79
60
67
75
4,622 58
1,196.10
2,611.50
55. 67
0
111,701.81
8, 485.85
2, 232,858.78
7, 344.42
1,833,487.08
217. 63
2, 240, 203. 20
1,833, 704. 71
100,000,000.00
100,000,000.00
22, 279, 605 29
17, 406, 963. 44
27,000, 000. 00
24, 000, 000.00
49, 279, 605. 29
41,406,963. 44
151, 631, 510. 30
143, 249,154. 00
LIABILITIES AND CAPITAL
Liabilities:
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--......---------..
----------------------------
-----Reserve fund as provided by law-------------------,(The Corporation estimates losses of $2,515.33 ($2,711.46) 1 on
in institu
insured accounts aggregating $19,975.50 ($21,020.71)
tions in default, pending settlement or not claimed.)
------------------Special reserve for contingencies-------.....
Total liabilities and capital----------...
---------------------
21,638
2, 339.
7,402
55.
80,265.
1 As of June 30, 1943.
NOTE.-At June 30, 1943, a contingent liability of $366,944.76 existed due to commitments in connection
with the prevention of default in insured associations.
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
EXHIBIT
63
23.-Federal Savings and Loan Insurance Corporation-Income and
epense statement
July 1, 1943
through
June 30, 1944
Income:
Insurance premiums earned...----------------------------Admission fees earned ------------------------------------Interest earned on U. S. Government obligations and securities
fully guaranteed by United States---------...
-----------------Miscellaneous-----------------------............................ --------------------------
July 1, 1942
through
June 30, 1943
$4,245,150. 52
13, 464. 87
$4,000,101.27
37,150. 76
3, 277, 125. 47
6. 20
3, 556,880. 66
19. 65
7, 535,747. 06
7, 594,152.34
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
106,189 014, 985. 00
175, 376. 68
3,221. 63
6 87
3,527. 08
0
271.38
10,059. 82
- 707. 50
401.40
98,056.84
0
1,819. 00
425, 666.98
293, 44. 20
25,438. 77
632.11
60
69. 00
31,957. 68
845. 39
14. 73
311.76
263.64
5,093. 03
122. 91
32.00
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 HOLC------------------------------Administrator's office, NHA--..---------------------------------
Nonadministrative expenses:
Personal services-------------------------------------------Travel
-----------------------------------------------------Transportation of things .-------------------------.........................................------------------.
Communication services- ..---.......................------------------------------------.............
Printing and binding-------------------------.......................-------------------............
Other contractual services------..
--------------------- ----------Supplies and materials------------------------------------------Equipment .
-------------------------------------------------
833. 72
0
0
26, 974. 20,
38, 641.14
Net income from operations-----------............-----------..........-----..---
7,083,105.88
7, 262,063.00
Nonoperating charges and credits:
Profit on sale of securities----------------------------------Commission on gale of securities..------------------------------------
1,133, 887. 93
0
2, 069,779. 08
8,281.25
1,133, 887. 93
2, 061, 497.83
8, 216, 993.81
764. 48
9, 323, 560. 83
152.83
Net income...............................--------------------------------------------.........8, 217, 758. 29
9, 323, 713.66
Net income for period.......------.....................--------------------Adjustment of net income for prior years...........................--------------------------
RECONCILIATION OF RESERVES AND SURPLUS
Balance at beginning of fiscal year---------.....................---------------------$41, 406, 963. 44
'
e
Additions:
Recoveries on contributions to insured institutions -----------------39, 643.16
Allocation of income to special reserve for contingencies-------..
-----3,000, 000. 00
Allocation of income to reserve fund as provided by law-----------.
-5, 217, 758 29
Adjustment of allowance for losses on subrogated shares----------25, 362. 37
Adjustment applicable to unsettled insurance claims ...----------------0
Total.......---........................................---------------------------...........
Deductions:
Approved contributions to insured institutions-------------------Allowance for losses on subrogated shares ---------------------------Transfer to liability for unsettled insurance claims account........--------Charge-off of uncollectible accounts receivable.......................
----------
Balance at end of fiscal year.......................................
$32, 665,904. 50
71,378.18
'3, 000, 000. 00
6, 323, 713. 66
0
.04
8,282,763. 82
9, 395, 091. 88
49,689, 727. 26
42, 060,996. 38
409,884. 56
182.40
0
55. 01
638,466. 82
15, 536. 93
29.19
0
410,121.97
654,032. 94
49, 279, 605. 29
41, 406,963., 44
64,
REPORT FEDERAL HOME LOAN BANK ADMJINISTRATION
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66
REPORT FEDERAL HOME LOAN BANK) ADMINISTRATION
EXIHIBIT 24.-FederalSavings and Loan Insurance Corporation-Statements of con
dition and operationfor insured institutions in receivership,June 30, 1944-Con.
STATE ASSOCIATIONS
CONDENSED COMPARATIVE STATEMENTS OF CONDITION
Wapakoneta Building & Sav
ings Co., Wapakoneta6 Ohio
Date of re-ceivership
Sept. 15, 1941
A
A
fJn
0
1o9Jne30
14
ASSETS
Mortgage loans---------------------------------------------------$303, 492 68
$5, 689. 74
Share loans --------------------------------------------------------700.00------------Real estate sold on contract-----------------------------------------66, 639 36
587. 91
Real estate owned-------------------------------------------------561,712. 85------------Cash and investments----------------------------------------------44, 402.98
53, 683. 71
Furniture, fixtures, and equipment ------------------------------------549.13
549. 1&~
Other assets - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Total--------------------------------------------------
----
467,497 00
60, 510.49
LIABILITIES AND CAPITAL
Secured claims of creditors/ ------------ :----------------------------Unsecured claims of creditors----------------------------------------Loans in process---------------------------------------------------Other liabilities ----------------------------------------------------Surplus----------------------------------------------------------Shares purchased by FS&LIC-------------------------------------Other share account claims-----------------------------------------Total---------------------------------------
7------------------
56, 498.96.............-1,926. 22.............
-3,000.00.............353. 53
3. 99,
130,026.22
14,855.19
---------------63, 435.94
435, 744. 51
1,925. 75
467,497.00
60, 510.49,
CONDENSED STATEMENTS OF OPERATION
Fiscal year
ended June 30,
1944
Cumulative
Sept. 15, 1941,
through June
30, 1944
Gross income_ -----------------------------------------------------Less gross expense --------------------------------------------------
$3, 511. 36
4, 566. 47
$25, 965.82
14,854.39,
Net income --------------------------------------------------
31,055. 11
11, 111.43
3 Loss.
NOTE.-The Ohio State Building and Loan Department is the receiver for the above institution.
EXHIBIT 25.-Home
Owners3' Loan Corporation-Balancesheet as of June 30, 1944
ASSETS
Mortgage loans, vendee accounts and advances, at present face value----------------- $1, 220,105,824.06
Interest-receivable ----------------------------------------------------------------3, 257, 263. 28
Property:I
Owned---'-------------------------------------------------$34, 889, 758.01
1, 173, 728.35
In proqess of acquiring title------------------------------------____________
Less reserve for losses --------
7-------------------
-----------------------------
1
36,063,486.36
1, 259,426,573. 70,
26,431,418.82'
m-------------------1, 232,995, 154.88
Total----------------------------------------------Investments, at cost:
Federal Savings and Loan Insurance Corporation (entire capital)-- $100, 000, 000. 00
Savings and loan associations:
Federal chartered------------ --------------- $35, 590, 150.00
State chartered-----------------------------10.939, 10.0
452p50. 0
15, 000,000.%Ot
U., S .Treasury bonds (borrowers' special depos its), at face value--1
161, 529, 250.00,
Bond Retirement Fund:- Cash (including $64,399,675 deposited with U. S. Treasury for-
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION
67
EXHIBIT 25.-Home Owners' Loan Corporation-Balancesheet as of June 80, 1944
Continued
ASSETS-Continued
Cash:
Operating funds (includes $1,280,883 24 payable to Bond Retirement
Fund in July 1944, and $11,030,206.70 deposited by borrowers, em
ployees, and NHA lessors (see contra))..
....
- ....-----------. $34, 307,195. 97
NHA homes conversion program, conversion fund (see contra) -18, 709, 433. 47
Special funds held by U. S. Treasury for payment of interest coupons
(see contra)1, 360, 707. 74
Special funds, Federal tax withheld (see contra)--------------288, 838 40
S$54,
Fixed assets:
Home office lanfd and building, at cost--.------------------------2,987, 819. 93
Furniture, fixtures, and equipment, at ost---------------------1, 800, 303.98
Total
----------------------------------------- 4, 788,123.91
Less reserve for depreciation.................................--.--------------------------------2, 225, 880 04
666, 175. 58
243.87
Other assets:2,562,
Accounts receivable------------------------...................---------------Less reserve for uncollectible accounts receivable-.............---------------......
209, 681.90,
31, 231.53
178, 450. 37
Mineral and oil rights-----.... -----------------------------------6.00
S-
Deferred and unapplied charges:
Unapplied property costs and expenses--.---------....
--------------47.00
Miscellaneous..-----------------------------------50, 803. 23
S-50,850.23
Total assets
------------------------------------------------------
178,450
37
178,456 37
1, 516,419, 971 04
LIABILITIES AND CAPITAL
Bonded indebtedness (guaranteed as to principal and interest by the
United States, except $148,500 of unpaid matured 4-percent bonds
guaranteed as to interest only):
2
Bonds outstanding, not matured ------............--- --------- $1, 334, 904, 000. 00
Bonds matured-on which interest has ceased.......------------------64, 399, 675. 00
Accounts payable:
Interest due July 1, 1944, and prior thereto (see contra) -----------1, 360, 707 55
Vouchers payable..-------------------------------------------1,924.69
Insurance premiums------------------------------------------181, 691.96
Commissions to sales brokers....-----....................--------------------------133,127.72
Special deposits:
By borrowers------..................-------------.......-------.......------------24, 782, 051.51
66, 700.92
By employees------...............--------------------------...........................--------Lessors' deposits, NHA, homes conversion program.----------..
1,181, 454.27
Federal tax withheld (see contra)---------------------------288,838. 40
Miscellaneous .....----- ---------------------------------- -122, --606.38
Accrued liabilities:
Accrued interest on bonded indebtedness -----------------------Other accrued liabilities ...--------------------------------------
943, 630. 06
165, 862.81
1,399, 303, 675.00
28, 119,l0o. 40
1,109, 492. 81
Liability for special funds held: NHA, homes conversion program-------------------18, 709, 433. 47
Deferred and unapplied credits:
Unamortized premium on bonds sold -----------------------------594, 740 73
Miscellaneous----................-------- ---------------..... .......----------------.......1,894,386. 41
S--------2, 489,127.14
Reserves:
Fidelity and casualties--------------------------------............-----525, 469 20
Fire and other hazards-------------------------------------250, 000.00
-775,469.20
Capitalstock less deficit:
Capital stock:
Authorized, issued and outstanding----------...
------------- 200, 000,000. 00
Losses in excess of net earnings------.............-------- 3 $106,879, 441. 96
Reserve for future losses
..............---------- 4 27, 206, 888. 02
134, 086, 329. 98
65,913, 670. 02
Total liabilities and capital----------........---------------------------1, 516, 419,971.04
2
Total bonded indebtedness shown includes unmatured bonds, which are guaranteed as to principal
and interest by the United States, as follows:
12-percent bonds due June 1, 1947-------- ------------------------------$754, 904,000
1-percent bonds due June 30, 1945------------------------------------ 580, 000, 000
3
The figure shown above reflects the Corporation's actual losses sustained in the sale of its acquired prop
erties; on mortgage loans and other losses; on fire and other hazards; and on fidelity and casualties in excess
of its cumulative net earnings.
4 The reserve for losses is being accumulated at an annual rate which, on the basis of careful estimates,
will approximate the total losses which may be sustained in the liquidation of mortgage loans, interest and
property. The figure shown above reflects the reserves which have been provided to-date for such future
losses.
NOTE.-Except for property transactions which are recorded on a cash basis, major items of income and
expense are recorded on an accrual basis. Therefore, no asset value has been recognized with respect to
uncollected rentals or prepaid taxes, nor liability for accrued taxes.
68
REPORT FEDERAL HOME LOAN BANK ADMINISTRATION,
EXHIBIT 26.-Home Owners' Loan Corporation-Statementof income and expense
for the fiscal year 1944 o
Operating and other income:
Interest:
Mortgage loans and advances....-------------------------------..$43, 356,125.95
Vendee accounts arid advances----------... ----------------------------------------.. 16,820, 511.02
Total-----------
-------------
Special investhents--....
........-----------------------
----- 60,176,636.97
417, 611.80
------------------------------------------------------
Total....------------------------.................--------------------------- 60,594248.77
Property income-...-----------------------------7, 533,006.15
Dividends received from savings and loan associations ...------------------------ 2, 285, 940.47
Miscellaneous........----------------................------------...--------------------.......
925, 897.79
Total income.....--
----------........----------.............
-------...
71,339,093.18
Operating and other expenses:
Interest on bonded indebtedness--------...................----------------...........--------------....
32,172, 656.68
204,390.17
------------------------------.....
Less amortization of premium on bonds sold ..----...
Administrative and general expenses:
Administrative expenses:
Current fiscal year-----------------------------------------------------------First preceding fiscal year ...---------------....
---------------------------...
All other fiscal years...----......------------------------------------------General expenses..........................-----------------------------------------------------Property expense---------..
Total expenses.-------
.
..................---------------------------....
31,968, 266. 51
9,078,615.05
58, 613.08
1364 72
219,651.01
6, 388, 238. 35
.................---------------------...-----------. 47, 713, 019. 28
Net income before provision for losses which may be sustained in the liquidation of
assets........................................................------------------------------------------------------------
23,626,073.90
Provision for losses:
On mortgage loans, interest and property--------------------------------------------- 40,000, 000. 00
For fidelity and casualties-----------.................------------------..----.....------------------30, 583. 37
For fire and other hazards...............................-------------------------------------------------89,760. 50
12,902.76
For uncollectible accounts receivable- .....------........................--------------------------------.......
Total-----------.............................------------.....--------------.............---------------------
40,133, 246.63.
Loss for fiscal year-------------........................................------------------------------......--------
16, 507,172.73
1 Net credit.
EXHIBIT 27.-Home Owners' Loan Corporation-Statement of income and expense
from the beginning of operations June 13, 1933, to June 30, 1944
Operating and other income:
Interest:
$946, 473, 701 16
Mortgage loans and advances .......--...............-------..-------------80,011,162 20
Vendee accounts and advances-----...................----------------------......
1,026,484,863 36
Special investments---.............-----........---------------------------........649, 099 83
Total.....................................------------------------------------------------------- $1,027,133, 963 19
..
.....
..--------------......
.
... ...----------... 137, 544,171 45
Property income
3,035, 326.09
Dividends received, Federal Savings and Loan Insurance Corporation.------------42,350,351.00
Dividends received from savings and loan associations ....---.....-------------------------5,282,425. 85
Miscellaneous..............................................----------------------------------------------------1,215,346,237 58
Total .............-------------------.....................................----------------------------------------.......
Operating and other expenses:
........--------------------------- $617,832, 520.12
Interest on bonded indebtedness
1,024,125 70
Less amortization of premium on bonds sold----------........ .----------Amortization of discount on refunded bonds...................--------------------Administrative and general expense-------..................-------------------.......
Property expense.........----........-----------.......................----------------------
616, 808, 394 42
7,147, 710.28
266,100, 627. 96
111, 825, 225 35
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
$346,137,153 25
------------with Board resolution of Nov. 15, 1938)--------..
1, 276, 328 40,
For fidelity and casualties.......----.......-------------................---------------867, 493.00
For fire and other hazards ..-----------------------------------For uncollectible accounts receivable.....................-------------13,871.33
---------
1,001,881,958 OL
213, 464,279. 57
348, 294, 845.98
REPORT/ FEDERAL HOME LOAN BANK ADMINISTRATION
69
EXHIBIT 27.-Home Owners' Loan Corporation-Statement of income and expense
from the beginning of operations June 18, 1933, to June 30, 1944-Continued
Loss for period June 13, 1933, to June 30, 1944--..-.....------..........--------------------.----Add unlocated payments-------..
--------.--------------------$33,780.04
Less
Unidentified payments ..
..----------------------- $13,819 43
Repayments unallocated-unidentified difference - -....- 14,197.04
28,016.47
$134,830, 566.41
5, 763.57
Deduct surplus adjustment, reserve against fire and other hazards..-----------------Deficit at June 30, 1944--........
---------------------..
0
------------.........
134,836,329.98
750,000.00
134,086, 329. 98
@FedFRASER