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Vol.4
No. 3
FEDERAL
HOME LOAN BANK
REVIEW
DECEMBER
1937
ISSUED BY
FEDERAL HOME LOAN BANK BOARD
WASHINGTON D.C.
CONTENTS FOR DECEMBER . 1937
BANK
SPECIAL ARTICLES
Page
Nominal and effective interest rates
Publication of the Financial Survey of Urban Housing
Announcement of dividends: An occasion for effective advertising
Building a modern appraisal plant
A house built under the Federal Home Building Service Plan
76
81
82
85
86
STATISTICS
Published monthly by the
FEDERAL HOME L O A N
BANK BOARD
John H. Fahey, Chairman
T. D. Webb, Vice Chairman
William F. Stevenson
F, W. Catlett
W. H. Husband
FEDERAL HOME LOAN
BANK SYSTEM
FEDERAL SAVINGS AND LOAN
ASSOCIATIONS
FEDERAL SAVINGS AND LOAN
INSURANCE CORPORATION
HOME OWNERS' LOAN
CORPORATION
Residential construction and home-financing activity
88
Indexes of small-house building costs
90
Monthly lending activity of savings and loan associations
90
Federal Savings and Loan Insurance Corporation
92
Federal Savings and Loan System
92
Federal Home Loan Bank System
93
Statistical tables
94
Nos. 1, 2: Number and estimated cost of new family dwelling units
94
No. 3: Indexes of small-house building costs
97
Nos. 4, 5, 6, and Supplemental Charts A, B: Estimated lending activity of
all savings and loan associations
91, 98
No. 7: Monthly lending activity of reporting savings and loan associations . 100
No. 8: Index of wholesale price of building materials
101
No. 9: Institutions insured by the Federal Savings and Loan Insurance
Corporation
102
No. 10: Monthly operations of State-chartered insured associations
102
No. 11: Monthly operations of Federal savings and loan associations . . . . 103
Nos. 12, 13: Federal Home Loan Bank System
103
Nos. 14, 15, 16: Home Owners' Loan Corporation
104
REPORTS
Administrative rulings, Board resolutions, and Counsel's opinions
105
Directory of member, Federal, and insured institutions added during OctoberNovember
110
SUBSCRIPTION P R I C E OF REVIEW. The FEDERAL HOME LOAN BANK REVIEW is the Board's medium of communication with member institutions of the
Federal Home Loan Bank System and is the only official organ or periodical publication of the Board. The REVIEW will be sent to all member institutions without
charge. To others the annual subscription price, which covers the cost of paper and printing, is $1. Single copies will be sold at 10 cents. Outside of the United States,
Canada, Mexico,.and the insular possessions, subscription price is $1.40; single copies, 15 cents. Subscriptions should be sent to and copies ordered from Superintendent
of Documents, Government Printing Office, Washington, D. C.
APPROVED BY T H E BUREAU OF T H E B U D G E T .
30149—37
1
NOMINAL AND EFFECTIVE
INTEREST RATES
•
THE
FEDERAL H O M E LOAN B A N K R E V I E W
has
been studying for some time the trends in costs
of mortgage money in the belief that it is now possible
to make a more comprehensive survey of effective
interest rates charged for home-mortgage loans than
has ever before been available. There have never
been completely accurate figures on effective interest
rates for the country as a whole, but the study made
by the R E V I E W shows that there are figures which are
reliable enough to give a clear indication of the
trend in interest rates.
In the November issue, the R E V I E W made a summary analysis of the actual decrease in the cost of
home-financing funds to borrowers from savings and
loan associations that has taken place since the establishment of the Federal Home Loan Bank System in
1932. As the second in a series of articles dealing
with the general structure of interest rates, the
R E V I E W now presents a study of the significance of
the decline in effective home-mortgage interest rates
which has taken place during the past five years.
I t is essential to establish clearly first of all the
basic difference between a nominal and an effective
interest rate. A nominal interest rate, as its name
implies, is the interest rate which is named in the
mortgage loan contract. I t is the interest rate which
the borrower contracts to pay. However, a nominal
interest rate in most cases does not represent accurately the actual cost to the borrower of the mortgage
money which he obtains. If, for example, an initial
loan fee, service charge or commission is paid by the
borrower, he is actually paying interest during the
life of the loan at a rate in excess of the nominal rate
specified in the contract. If the borrower contracts
to pay interest upon the face amount of his loan,
although by his principal repayments he constantly
reduces the original amount of his indebtedness, he
is paying an effective interest rate which is greater
than the nominal rate specified in his contract.
76
An effective interest rate, on the other hand, represents the total cost to the borrower of the mortgage money during the entire life of the loan. An effective interest rate includes the ordinary interest charge
named in the contract, plus any loan fee or initial
service charge, averaged over the life of the loan.
Table 1 will make clear the distinction between a
nominal and an effective interest rate. Table 1
shows the increase caused by payment of an initial
loan fee in the nominal rate of interest paid by a
borrower over the life of the loan. The loan-term
in the example is 139 months, written at a nominal
interest rate of 5 percent. For a non-insured, directreduction loan, the effective rate of interest is 5 percent if no initial loan fee is charged, 5.2 percent if a
loan fee of 1 percent is charged, and 5.5 percent if
a loan fee of 2% percent is charged.
For a mortgage loan insured under Title I I of the
National Housing Act, also written at a nominal
interest rate of 5 percent for a term of 139 months,
the effective interest rate without any loan fee is 6.3
percent because of the payment of an annual service
charge of one-half of 1 percent upon the decreasing
balance, and of one-half of 1 percent annual insurance
premium upon the face amount of the loan.
If the loan fees permitted under the Rules and
Regulations of the Federal Housing Administration
are charged, the effective rate of interest is further
increased. An initial loan fee of 1 percent on an
existing loan, or of 2% percent on a new loan, will
increase the effective interest rates to 6.5 percent
and 6.8 percent, respectively.
Few people realize how great the difference may
be between effective and nominal interest rates. I t
follows that few people know how great a decrease
there has been in the cost of home mortgage money
supplied on long-term amortized loans by the savings
and loan associations of this country. Table 2 is
highly significant for the reason that the rates which
Federal Home Loan Bank Review
it shows are effective interest rates and therefore do
represent total cost to the borrower during the entire
life of the loan. The trends which are shown in
Table 2 consequently reflect actual decreases in the
cost of home mortgage money to borrowers.
The figures in Table 2 for effective interest rates
charged by savings and loan associations in 1931 are
not completely representative. They are based
upon voluntary replies of over 1,200 savings and
loan associations to questionnaires sent out in
September 1931 requesting information on their
current lending practices. The interest rates have
been computed to represent actual cost to the borrower during the life of the loan and are therefore
effective interest rates. The figures used for Federal
savings and loan associations in 1936 are also effective
interest rates. They represent total cost to borrower on loans made during 1936 by Federal savings
and loan associations.
These qualifications of figures in Table 2 should
be kept in mind, but they should not be allowed to
obscure the greatest significance of Table 2—the
trend of effective interest rates which is shown.
In 1931 when the national average effective interest
rate to savings and loan association borrowers was
8 percent, the Federal Home Loan Bank System had
not been created. The average effective interest
rate charged by savings and loan associations ranged
from a low of 6.2 percent or 6.4 percent in New
England and Middle Atlantic States to such high
points as 15.3 percent in Tennessee, 12.5 percent in
Alabama, or 11.6 percent in New Mexico. Iowa
and Louisiana were the only States west of the
Mississippi where effective interest rates were not
8 percent or more.
Table 2 conclusively answers the question: What
has been the course of the trend in effective interest
rates since 1931? With the establishment of the
Federal Home Loan Bank System in 1932 and the
introduction of other stabilizing factors in home
mortgage finance, effective interest rates definitely
turned downward. By the end of 1936, this steady
downward trend had reduced the national average
effective interest rate to 6.3 percent for Federal savings and loan associations.
This is the most significant fact about the trend of
interest rates. I t means that in 1936, four years after
the Bank System came into being, its member Federal savings and loan associations were charging
average effective interest rates which were lower than
the 1931 average effective interest rates for all reporting savings and loan associations, by from 1.0
December 1937
percent to 2.6 percent in all of the 12 Bank Districts,
except in the Boston and New York Federal Home
Loan Bank Districts. I n those two Districts,
abundance of capital had always kept interest rates
relatively low and the decreases were only 0.8 percent
and 0.9 percent, respectively. Federal savings and
loan associations in Tennessee reduced the 1931
effective interest rate from 15.3 percent to 6.3 percent. I n Alabama, the average rates charged by
Federal associations were 6.9 percent—a reduction
of 5.6 percent from the former prevailing rate of 12.5
percent.
Most striking of all, in 1931, every State west of
the Mississippi, except Iowa and Louisiana, had
average effective interest rates of 8 percent or more.
In 1936, there were no States west of the Mississippi
where the average effective interest rate charged by
Federal savings and loan associations was in excess
of 7.3 percent.
Further, there was not a single reporting State
which did not show a decrease in the effective interest
rates charged by Federal savings and loan associations in 1936, in comparison with the effective interest rates charged by savings and loan associations
reporting in 1931. The declines ranged from a
minimum of 0.3 percent in Eastern States to a
maximum varying between 3 percent and 9 percent
in the South and West.
CAUSES OF DECREASED I N T E R E S T K A T E S
There are a number of significant factors which
underlie this trend of decreasing rates charged by
savings and loan associations over the country as a
whole. A major cause of lower interest rates has
certainly been the general adoption and use by
savings and loan associations of the direct-reduction
type of loan. The savings and loan associations
were the first institutions in this country to make a
regular practice of lending home mortgage funds for
long terms. The savings and loan associations were
also the leaders in the movement which has become
increasingly general in recent years, towards the use
of the long-term amortized loan known as the
direct-reduction plan. Under this plan the principal
amount of the mortgage indebtedness decreases
each month and the borrower pays interest only
upon this constantly diminishing balance.
At the time of enactment of the Home Owners'
Loan Act in June 1933, the Federal Home Loan
Bank Board was authorized to charter Federal
savings and loan associations, and the use of the
77
direct-reduction loan plan was made mandatory for
such institutions. I t therefore came about that
Federal associations were steadily building the
volume of their direct-reduction loans at the same
time that the Home Owners' Loan Corporation was
making more than one million direct-reduction
loans at 5 percent interest in all parts of the country.
As a result, a much wider understanding of the
simplicity and convenience of this type of loan plan
was promoted, and the direct-reduction method of
loan repayment began to come into general use,
with increasing emphasis placed upon lower interest
rates.
The direct-reduction loan plan is now being used
by more and more associations. A comparison of
the direct-reduction loan plan with the shareaccount sinking-fund plan which was extensively
used in earlier years shows that under a directreduction loan, the effective interest rate is definitely
established at the time the contract is made between
the institution and the borrower. Under the
sinking-fund plan, it is impossible to determine at
the time the loan is granted what the effective
interest rate during the entire life of the loan will be.
Over a period of years, experience has shown that,
in the aggregate, the direct-reduction plan tends to
reduce the cost of money to the borrower, for the
reason that under no circumstances can the borrower
be required to pay interest upon any amount other
than the current unpaid balance of his indebtedness.
A second major cause of decreased interest rates
charged by savings and loan associations has been
the existence of the Federal Home Loan Bank System
itself. The creation of the Bank System provided
a central reservoir of credit from which advances
were made to members to supplement local homefinancing funds when the demand for home mortgage loans in a community exceeded the supply of
local available capital. Because these additional
funds were available from the Federal Home Loan
Banks, the economic isolation of the member homefinancing institutions, and their complete dependence upon an inadequate supply of local capital was
ended. The fact that members of the Bank System
are assured today of credit on either short-term or
long-term advances at rates of interest as low as 3
percent has contributed substantially to the markedly greater reductions in interest rates in the South
and West. As the preceding analysis of Table 2
showed, greatest decline in effective interest rates
has taken place in those areas of our country where
rates in the past have always been the highest.
78
T H E G E N E R A L STRUCTURE OF I N T E R E S T R A T E S
I t is not possible to give a comprehensive analysis
of even the major causes for the pronounced decline
in effective interest rates charged by savings and
loan associations without making it apparent that
this trend is a reflection of the comparable downward
movement of the whole general structure of interest
rates. For this reason, the trend is affected by the
same general influences which have been operative
throughout the money market itself. Interest rates
as an entire structure have moved downward, and
the reduction in effective interest rates by savings
and loan associations is one part of this entire
movement.
I t is true that long-term and short-term interest
rates have displayed striking differences in behavior.
Brookings Institution has pointed out that the high
rate structure of short-term interest rates fell
rapidly throughout 1930. Interest rates on call
loans and commercial paper, as well as over-thecounter rates, were sharply reduced in that year,
and have since declined to even lower levels. Longterm interest rates, on the other hand, not only held
comparatively steady in 1930, but reached extraordinarily high levels in 1931-33. Since 1933, longterm rates have fallen, but they still remain at levels
far above short-term rates. This is not a new characteristic, however, for the same tendency for shortterm rates to fluctuate much more violently than longterm rates was observed in pre-war business cycles.
One effect of the decline in the whole interest rate
structure is evident from the R E V I E W ' S study of the
single field of effective home mortgage interest rates.
Prevailing interest rates charged by the principal
different types of lenders upon urban residential
property have leveled off, and are grouped within
a much narrower range than in the past.
For example, although it is difficult to make an
exact comparison of interest rates charged by
savings and loan associations with those charged by
commercial banks on urban residential loans, we
can approximate the comparative trends by keeping
two important facts firmly in mind.
The first is that the interest rates reported for
commercial banks are nominal, not effective, rates
since they do not include loan fees, commissions, or
special charges. Illustrations have already been
given of the effect of such commissions upon the
effective interest paid by a borrower during the life
of a loan. The figures for savings and loan associations are effective interest rates, and include loan fees.
Federal Home Loan Bank Review
In many cases, the loan fee or initial service charge
includes the entire cost to the borrower of title
search, appraisal, recording, and the other services
rendered in loan closing.
The second fact is that the interest rates reported
for commercial banks are the interest rates charged
principally upon straight mortgage loans which
represent well over 50 percent of total urban home
mortgage loans held by this type of institution.
These loans are usually made for a term of three to
five years. Because they require no amortization
of principal during the life of the loan, the borrower,
unless he has saved the face amount of the loan, may
be forced to pay renewal charges which materially
increase his interest burden. On the other hand,
savings and loan associations make amortized loans
which run often for terms of 12 to 20 years, at the
end of which time the loan is fully repaid.
As a basis for the comparison made in Table 3, we
take the most common rates charged on the largest
volume of urban residential loans on October 1, 1936
by country bank members of the Federal Reserve
System. The source is a table on page 298 of the
Federal Reserve Bulletin for April 1937. The Federal
Reserve Bulletin points out that "the figures shown in
the table are probably fairly typical, not only of rates
charged on the largest volume of loans by all banks,
but also of those charged largest number of borrowers," so that these figures may be taken as an approximation of the nominal interest rates actually prevailing on the largest volume of urban residential loans
made by all member banks of the Federal Reserve
System.
Since the commercial bank rates are reported by
Federal Reserve Districts, they were compared in
Table 3 with the average effective interest rates of
Federal savings and loan associations located in areas
closely corresponding to those Districts. The result
of this comparison was to show that the most
common nominal interest rates charged by commercial banks range from 6 to 8 percent, and that the
average effective interest rates charged by Federal
savings and loan associations range from 5.7 to 6.7
percent, in the respective Federal Reserve Districts.
December 1937
In three of the Districts (Boston, New York, and
Dallas) the average effective Federal savings and
loan rate is lower than the average nominal rate of
the commercial banks. In four of the remaining
Districts (Atlanta, Minneapolis, Kansas City, and
San Francisco) the Federal savings and loan association average effective rate lies between the spread
of 6 to 8 percent given for the nominal rates of the
banks, and in every case is closer to the lower rate given.
In the West the banks charge an average nominal
interest rate of as much as 8 percent. Money rates
have always been relatively high in these areas. I t is
particularly interesting to note, therefore, that the
average effective interest rate charged by Federal
savings and loan associations in any Federal Reserve District is in no case as high as 7 percent.
The comparison is, of course, only a rough index
of the tendency for the structure of home mortgage
interest rates to shift within the larger movement
of the whole interest rate structure, since nominal
interest rates are here contrasted with effective
interest rates. This point is well illustrated by the
fact that for no Federal Reserve District is the average effective interest rate of Federal savings and loan
associations more than 0.7 percent greater than the
corresponding nominal bank rate. This slight difference would be completely absorbed by even a small
loan fee or initial service charge.
Table 1.—Comparison of a non-insured loan and
a F. H. A . insured loan, both written for terms
of 139 months, to show the increase in nominal
interest rates caused by initial loan fees
Effective rates
Direct-reduction
mortgage loan
Non-insured
Insured under Title
II of N. H. A
Nominal
rate of
interest
No
initial
charge
1-per- 2H-percent
cent
loan fee loan fee
Percent
5.0
Percent
5.0
Percent
5.2
Percent
5. 5
5.0
6.3
6.5
6.8
79
Table 2.—Effective interest rates charged in 1936
Table 3.—Comparison of nominal interest rates
by Federal savings and loan associations and in
charged by member Banks of the Federal Reserve
1931 by savings and loan associations
System with effective interest rates charged by
Federal savings and loan associations: both on
[Sources: 1931—Based upon special reports submitted to the Finance Committee
of the President's Conference on Home Building and Home Ownership.
1936—Annual reports to the Federal Home Loan Bank Board]
Federal
Savings
Change
savings
and loan
1931 to
and loan
Federal Home Loan Bank Districts and States associa1936
tions
associations
1931
1936
Percent
8.0
Percent
6.3
Percent
-1.7
6.5
6.2
8.2
6.6
' -0.8
-0.3
-2.2
-1.0
6.8
5.7
5.9
6.0
5.6
5.0
6.0
6.6
6.4
5.7
5.7
-0.9
-0.7
8.0
7.8
10.2
6.1
6.1
6.2
-1.9
-1.7
-4.0
8.1
12.5
9.0
9.9
6.4
6.9
6.6
6.8
6.0
6.0
6.2
6.1
-1.7
-5.6
-2.4
-3.1
-0.5
-2.3
-2.1
6.1
6.2 1
6.0
6.3
-2.0
-2.2
-1.5
-9.0
7.4
7.8
7.1
6.3
6.4
6.2
-1.1
-1.4
-0.9
_
_ __
7.4
7.4
7.4
6.4
6.5
5.9
—1.0
-0.9
-1.5
.
8.7
7.1
9.1
8.7
9.8
9.8
6.3
6.2
6.1
6.7
6.9
7.0
-2.4
—0.9
—3.0
—2.0
-2.9
—2.8
9.7
9.5
7.5
9.7 1
11.6
10.5
6.9
7.2
6.0
7.2
6.6
7.2
-1.8
—2.3
— 1.5
—2.5
—5.0
—3.3
9.4
10.5
9.1
8.0
10.2
7.0
6.5
7.1
5.9
7.3
-2.4
—4 0
—2.0
—2.1
-2.9
9.0
8.9
8.5
10.3
8.8
8.9
8.2
6.4
6.5
6.5
6.6
6.7
6.2
6.8
-2.6
—2 4
—2.0
—3.7
—2.1
—2.7
—1.4
8.8
10.0
8.8
6.7
6.0
6.7
7.0
—2.1
—4 0
—2.1
UNITED STATES
District No. 1__Connecticut
Maine
Massachusetts
New Hampshire^
Vermont
~
District No. 2
New York
District No. 3__
Pennsylvania
West Virginia
_
District No. 4__
Alabama
Florida
Georgia
Maryland
North Carolina..
_
_
_
._
6.5
8.5
8.2
Virginia
District No. 5__
Kentucky
Ohio
Tennessee
8.1
8.4
7.5
15.3
_.-
District No. 6
Indiana
Michigan.
District No. 7
Illinois.Wisconsin
_
_
Iowa
Minnesota
Missouri
North Dakota
South Dakota
_
_
District No. 9
Arkansas
Louisiana
Mississippi
New Mexico
Texas
_
_
_
_.
_
!
District No. 10
Colorado
Kansas..
Nebraska
Oklahoma
District No. 11
Idaho
Montana
Oregon
Utah
Washington
Wyoming.
District No. 12
Arizona
California
Hawaii
1
1
_
_
_
_
_
_
80
1
urban residential loans
NOTE.—Commercial bank rates are nominal interest rates,
and include no loan fees or initial service charges. Federal
savings and loan association rates are effective interest rates,
and include all loan fees and initial service charges.
CommerFederal
cial bank
savings
members
and loan
of F. R. association
System
Federal Reserve District
-0.8
Prevailing Prevailing
effective
nominal
interest
interest
1
rate2
rate
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
1—Boston
2—New York
3—Philadelphia
4—Cleveland
5—Richmond
6—Atlanta
7—Chicago
8—St. Louis_
9—Minneapolis
10—Kansas City _
11—Dallas
12—San Francisco
Percent
__
__
6
6
6
6
6
6-8
6
6
6-8
6-8
8
6-8
Percent
5.7
5.8
6. 1
6. 1
6. 1
6. 6
6. 2
6. 6
6. 5
6. 7
6. 6
6. 5
1
2
Federal Reserve Bulletin, April 1937.
Based on annual reports of Federal savings and loan associations. Because
Federal Reserve Districts cut State lines, the rates for Federal savings and loan
associations are grouped in the nearest approximation of Federal Reserve
Districts.
Federal Home Loan Bank Eeview
Publication of
The Financial Survey
of Urban Housing
•
IN 1934 a comprehensive study was undertaken
of the financial and economic aspects of residential properties in 52 representative American
cities. This study, known as the Financial Survey
of Urban Housing, covered intensively a selected
sample of properties in each locality which were also
covered by the general inventory and physical
description of the Real Property Inventory. The
data were collected and tabulated as a Civil Works
Administration project. As the results of this
project became available, they were used extensively
by the various Government departments concerned
with housing.
According to the introduction of this book: "Information was obtained on the size, age, and materials of the structures; also on value or rent, the cost
and method of acquisition of homes; the amount,
sources, interest rate, and other terms of any credit
secured by the property; and the extent of delinquency of rents or loans. Other factors studied
related to the family occupying the dwelling unit,
the number of persons living there, total income of
the family, the amount of income in wages or salary,
and the proportion of time employed."
December 1937
To show the effects of the depression on such
factors, this information was collected, wherever
possible, for the years, 1930, 1933, 1934.
The Financial Survey of Urban Housing was the
first extensive study which has ever been made of
residential properties. It has revealed the value to
the mortgage lender of a thorough knowledge of real
estate conditions which can only be acquired by
specific studies of local conditions.
Detailed statistics for 22 of the 52 cities together
with summary tables for all cities have been prepared
in book form for general distribution. The cost of
this book, bound in buckram, is $3.25, payable to
the Superintendent of Documents, Government
Printing Office, Washington, D. C.
Because the information tabulated in this book
will be particularly valuable to the mortgage lender
located in the cities analyzed, they are listed below.
These 22 cities have been selected with great care to
be representative of the whole area in which they
are located and, consequently, the results should
also be of general interest.
Portland, Me.
Richmond, Va.
Worcester, Mass.
Wheeling, W. Va.
Providence, R. I.
Atlanta, Ga.
Syracuse, N. Y.
Birmingham, Ala.
Trenton, N. J.
Oklahoma City, Okla.
Cleveland, Ohio
Dallas, Tex.
Indianapolis, Ind.
Butte, Mont.
Peoria, 111.
Casper, Wyo.
Minneapolis, Minn.
Salt Lake City, Utah
Des Moines, Iowa
Seattle, Wash.
Wichita, Kans.
San Diego, Calif.
Announcement of Dividends:
A n Occasion For Effective Advertising
•
M O R E and more it is becoming recognized that
good advertising policies are a definite responsibility of management. Effective advertising for
home mortgage lending institutions is always a
difficult problem, however, since they are not retail
establishments, selling so many bars of soap, or so
many boxes of matches. Their problem is the difficult one of merchandising not selected commodities,
but of merchandising an institution itself. Good
advertising must above all sell to the public the
financial institution and the services which it
renders.
Good institutional advertising should have continuity. What is more, the advertising program
should be regarded as an integral part of the institution's public relations. Therefore, a well planned
advertising program will a t all times attempt to
educate the public not only in a better understanding
of the particular institution, b u t also of thrift and
home financing in general.
Upon the occasion of the payment of dividends,
the institution has an opportunity to dramatize its
services and its value to a community as a t no other
time in the year. I n particular, it is a time when
thrift can be emphasized effectively. I t is thrift
which is the basis of all home financing, and an
institution must succeed in attracting the savings of
its community by the creation of confidence and
public interest if it is to fulfill its basic responsibilities
as a home-financing institution. The association
may customarily think of savings in terms of "new
money" with which to make additional loans, but
the service which the institution is performing is
much more fundamental than this. When it adds
new savings accounts or increases old ones, the
institution is fostering the habit of thrift, and it is
this habit which alone can assure the continued
progress of home financing itself.
U S E OF NEWSPAPERS
The first general consideration of the official
responsible for the institution's advertising will be,
" W h a t type of advertisement shall I place in the
newspapers?" As a general rule, home-financing
institutions still find that the newspaper is the most
effective means of reaching the public. On this and
82
the following pages, several different types of effective
newspaper dividend advertising are reproduced.
The type employed by the Minnesota Federal
Savings and Loan Association is in the direct tradition of dignified institutional advertising. One of
its very good features is the listing of the officers
and the directors of the association, together with
their affiliations in local business. A second distinct
type of newspaper advertising is the advertisement
used by the Charleston (West Virginia) Federal
Savings and Loan Association, which is effective
both because of its unusual cut and its striking lead.
A third type might combine emphasis upon the
safety of investment with a short account of the
association's record over a period of years, stressing
uninterrupted dividend payments and similar outstanding facts. A fourth type of newspaper advertisement which has proved effective is the publication of the institution's statement of condition.
Such publication tends to identify the advertiser
more completely in the public mind with other leading financial institutions of the community. Such a
balance sheet can be made very effective by incorporating enough explanation of the different
items composing the balance sheet to make it
MORE THAN 5,000 INVESTORS
Are Helping Us Celebrate Our Fifteenth Birthday
By.Sharing in the
$108*919*35
At the rate of
\
/Q
distributed as Dividends
per annum on
June 30, 1937
John F. Scott
President
J. C. Enright
Vice President
President, Qid Fashioned Millers, Inc.
Thos. E. Good
Vice President
President, St. Paul Union Stockyards Co.
H. C. Lindquist
Vice President
W. Beaupre' Eldredge
Secretary
C. H. Ohm
Treasurer
Jennings L. O'Connor . . . . Director
County Treasurer, Renville County
Lee F. Warner
Director
Treas.-Genl. Mgr., McGill-Warner Co.
E. C. Lundquist
Director
President, WUlmar Federal Sav. & Loan Ass'n.
Robert at Fifth, Saint Paul, CE. 0731
7th at Marquette, Minneapolis, AT. 3264
RESOURCES OVER TEN MILLION DOLLARS
Federal Home Loan Bank Review
^v?^
FOUNDERS of FORTUNES
WERE THOSE PIONEERS WHO LEARNED EARLY
TO SAVE.
OUR ASSOCIATION OFFERS YOU SAFETY PLUS INCOME
This Association Will Pay
Dividends at the Rate Of
NftXa$S3XKiX89&MXM(X8M
4%
TO ALLITS INVESTMENT SHAREHOLDERS THIS YEAR
Th» safety of *ach account ii fully insured up to $5,000.00 by tho Federal
Saving* and Loan Insurance Corporation, an instrumentality of the Federal
Government, this corporation has a capital of $100,000,000 subscribed by the
Government. In addition to its capital the above corporation is building a
substantial reserve fund from annual premiums paid in by all insured institutions such as ours. Moreover, the privilege of insurance is extended only
to well-managed, fiancially sound mutual thrift institutions who are able to
meet the strict eligibility requirements of the Federal Savings and Loan
Corporation and comply with its regulations.
Charleston Federal Savings
and Loan Association
804 KANAWHA STREET
MEMBER FEDERAL HOME LOAN BANK SYSTEM
readily understandable even to the average layman.
The October 1937 issue of the R E V I E W contains a
fifth example of dividend announcement for newspaper use in the cooperative advertisement run by a
group of Little Rock savings and loan associations.
Essential elements in newspaper advertising of
this type are the rate of dividend declaration, the
total amount of dividends distributed, and the
number of investors receiving these dividends.
Where a dividend record has
been uninterrupted over a period
of years, or where the past earning record has been outstanding,
these facts should be briefly but
vividly presented. Moreover,
because the prevailing dividend
rates of member home-financing
institutions of the Bank System
are equal to or higher than the
yield on most other investments
of comparable safety, safety
December 1937
30149—37
factors should be stressed as a background to the
statement of earnings. Such factors of this kind
include the value of the real property securing the
loans which make up the association's portfolio,
membership in the Bank System, or insurance of
investors' accounts.
The manager's job is not finished when he has
prepared the copy for his newspaper advertisements.
He has a good newspaper story of general reader
interest in the mere fact that the institution has paid
dividends. If this story is properly developed from
the angle of news and not of mere propaganda, the
newspapers in general will be glad to print it. One
means of securing the proper reader interest in such
stories is to write a lead paragraph, linking the payment of dividends by the institution with the general
economic progress of the community, pointing out,
for example, that the payment of a number of consecutive dividends is proof of sustained business
activity in that community. Another point of community interest which could be emphasized is the
fact that the dividends paid by the association
represent earnings of the association paid to a
specified number of local investors, and that these
earnings resulted from loans extended to local
residents for financing a stated number of homes in
that city during the past year. In such newspaper
stories it is also valuable to emphasize additions to
reserves, or to discuss the advantages of Federal
Home Loan Bank System membership to the association and to its members, or to bring out the protection afforded each investor through the Insurance
Corporation.
DIVIDEND CHECKS AND D I R E C T M A I L ADVERTISING
In addition to newspaper advertisements and
stories, however, there are many other good forms
of advertising open to an association at dividend
time. The shareholders of an association are its
83
most loyal supporters, and the dividend check which
vide the continuity which will carry it through to
is sent to them can be made an effective advertising
completion. Unless there is also some provision
medium. The specimen check utilized by the
for observing and carefully checking the results
Calcasieu Building and Loan Association emphasizes
obtained from the different types of advertising and
the fact that it is a dividend payment and
publicity which are employed, the insticarries a picture of a home, together with
tution will be no better fitted to determine
What Concern
the insigina of the Bank System and the
what advertising media to use on a subHere Has Always
Insurance Corporation. The specimen
sequent occasion. Moreover, proper balPaid Dividends?
check used by the Gibraltar Savings and
ance in an advertising program can only
Who H a s Received Nearly
Building Association, which was reprobe determined on a basis of trial and
3 Millions in Cash?
duced in the August 1936 R E V I E W , is
error.
There must therefore be a means
WHO ARE ITS 14
ELECTED DIRECTORS?
another excellent example of the use
of tentatively checking the results which
How M a n y People Would
of this type of personal advertising
newspaper, radio, direct mail, and other
Yon Say That It Is
Now Helping?
medium.
methods produce, if the most successful
DID YOU KNOW—
The Calcasieu Building and Loan
media are to receive just emphasis.
M a n y associations have found that an
Association has never failed to p*\
a semi-annual dividend to tt»
Shareholders
on
January
1st
and
A good method of checking is to make a
enclosure sent with the dividend check is
July 1st of each year since it
opened its doors for business on
tactful effort to obtain information from
more effective in reaching a large proporJuly 1. 1909?
DID YOU KNOW—
This
Association
has
paid
a
dlvteach
investor or loan applicant when he
tion of the mailing list than any other form
dend on a basis of 4% per annum,
from July 1. 1936 to January 1
comes
to the association's office as to what
of direct mail advertising. The Calcasieu
19377
DID YOU KNOW—
directly
influenced him to bring in his
This
Association
from
July
Building and Loan Association sends out
L 1909 to January 1. 1931 paid
in dividends to its Shareholders
savings
or
his loan application. Some
its dividend check in an attractive folder
the mm of $2,729,406.94?
DID YOU KNOW—
associations
maintain a special form, listof a type employed by many financial inShares in this Association are
insured against loss up to $5.00000
ing
the
different
types of publicity they
through
the
Federal
Savings
and
stitutions, and uses the interesting slip enLoan Insurance Corporation, an
instrumentality of the Federal Govemploy,
on
which
each
employee is required
closure in question-and-answer form, part
ernment?
DID YOU KNOW—
to
check
the
medium
which most influEvery
loan
in
our
files
is,
secured
of which is reproduced on this page, which
by Vendor's Lien and First Mortgage on Real Estate?
enced
the
customer.
has attracted a large amount of comment.
DID YOU KNOW—
This Association has assisted
Personal letters directed to shareholders,
thousands of people in owning
In addition to thorough and consistent
their homes?
DID
YOU KNOW—
understandable statements of condition,
efforts
made to check an association's own
You could borrow from this Association, secured by Act of Venor other forms of "stuffers", have all been
advertising campaign, it is equally impordor's Lien and Mortgage on Real
Estate and repay same on basis of
$100 per month per $100 00 of the
employed successfully. Other associatant to observe and study the publicity
amount borrowed which includes
payment on principal and 6 4 %
tions have made use of original and atprograms carried on by other financial
interest on the unpaid balance of
the loan and will retire interest
and principal in 12 years?
tractive folders. A Minnesota institution
institutions, whether competitors or not.
DID YOU KNOW—
This Association Is assisting
sends out a 4-page leaflet, with a photoMany large institutions have devoted
some 1500 people In owning
their homes at this time?
DID YOU KNOW—
graphic front cover which shows its presmuch
time and money to the general
Every dollar we loan is spent locally for material and labor?
ident in the act of handing a dividend
problem of institutional advertising, and
DID YOU KNOW—
The Board of Directors and
check across his desk, under the caption,
the Management welcome apmuch can be learned from a study of
plications for loans on homes
and are pleased to assist each
"Here is your dividend check from the
their general methods. Advertising which
and every one in owning a
home, repairing or remodeling
. . . association." The Gibraltar Savtheir present home? The Manis
effective enough to divert funds from
agement will welcome inquiries
as to investment in stock In
ings and Building Association sends out
an association, or to reduce the use made of
this Association as well as inquiries for loans under our diits dividend checks with a neat heavy
rect reduction plan or under
its services, should be studied with equal
the F. H. A. plan.
CALCASIEU BUILDING AND
paper sheet to which is attached a postagecare whether the successful competitor is
LOAN ASSOCIATION
702 Ryan Street
free business reply card, upon which the
Lake Charles. Louisiana
in the same or in a quite different field.
shareholder may list the names of friends
Analysis of the reasons for its effectiveness
who might be interested in making investwiJl often disclose successful methods for
ments in the association. The sharethe association itself to follow.
holder also declares his own interest in
making additional investments. In this
T H E GENERAL PROBLEM OF INSTITUway a select prospect list is continually built up.
TIONAL ADVERTISING
ANALYSIS OF ADVERTISING R E S U L T S
I t is not enough simply to decide upon an advertising program, approve the appropriation, and pro84
All advertising must, of course, be adapted to
local conditions which will vary substantially in
(Continued on page 109)
Federal Home Loan Bank Review
BUILDING A MODERN
APPRAISAL PLANT
•
THE lending institutions in the field of home
mortgage finance are increasingly concerned
with the necessity for the maintenance of current
records on such influences as population trends, industrial activity, neighborhood trends, and many
other local and national factors which affect the
value of the real property underlying their loans.
The appraisers for these institutions, whether they
are a committee composed of directors and officers,
or professional valuators retained on a fee basis, or
professional appraisers employed as regular salaried
personnel, would like at all times to be familiar
with such trends and statistics. In many cases,
however, the valuators are discouraged by what
seems to be the vastness of the field which confronts them and the mass of unorganized information of all kinds which is available. They find it
hard to make the careful selection of materials which
will permit them to work effectively in their appraisal
laboratory.
Managers of home-financing institutions can now
bring to the attention of their appraisers the results
of recent research carried on in this field to simplify
the problems. In 1937, recognizing the complexity
of the data in the appraisal field, the Central Housing
Committee appointed a Joint Committee on Appraisal and Mortgage Analysis to coordinate the
efforts of both governmental and non-governmental
agencies interested in valuation and mortgage finance. The Committee was composed of six representatives of three governmental agencies (Farm
Credit Administration, Federal Housing Administration, and Federal Home Loan Bank Board) and six
representatives from three private agencies (American Institute of Real Estate Appraisers, National
Association of Housing Officials, and Society of
Residential Appraisers). As a result of its study, the
Joint Committee planned the National Appraisal
Forum which was held in Washington, November 19
and 20. The Forum was built about the general subDecember 1937
ject of "Appraisal Data—Their Social and Economic
Significance". At the Forum the Joint Committee
presented information as to the nature of available
real estate appraisal data. The participants in the
Forum discussed the social and economic importance of such data and attempted to determine what
types of necessary real estate appraisal data are
lacking, so that a definite program of research to
supply this need might be formulated. All matters
relating to valuation principles and methods were
excluded.
At the Washington meeting of the National Appraisal Forum the participants discussed these
problems under the leadership of nationally known
figures in the field of real estate valuation, economics,
and home mortgage finance. As an integral part
of the Forum, the Joint Committee distributed four
catalogs of real estate appraisal data sources.
Two of these catalogs deal primarily with the
appraisal of urban real estate, and two are devoted
to the appraisal of farm real estate. These catalogs
are not only carefully outlined according to subject
matter, but complete the picture by telling where a
given article may be obtained or referred to, by
listing the purchase price when known, and by supplying brief annotations to describe the content of
each article.
"The Catalog of Urban Real Estate Appraisal
Data Sources" does not deal with publications relating to appraisal principles or techniques, but lists
the different sources of other information valuable
to real estate appraisers under six major classifications: economic background and environment; income and expense; land use; physical property;
population; and real estate market. Any one
wishing to include in his appraisal library an authoritative source of such vital statistics as lives of
structures, tax statistics, fluctuations in labor supply,
and so on, will find in this catalog a broad listing of
relevant items.
85
To be used with this catalog is a "Bibliography
on Urban Real Estate Appraisal'' which indicates
the scope of appraisal literature concerning urban
real estate in this country in comprehensive fashion.
It does not touch the field of foreign appraisal literature. The bibliography includes publications relating to appraisal principles or techniques, and groups
its material under six main headings. First, there
is a general section listing appraisal and related
bibliographies. This is followed by sections headed,
respectively: appraisers; appraisal technique; improved property valuation; land valuation; and
valuation factors.
Two bulletins were also distributed which deal
primarily with farm real estate valuation. "A Survey of Rural Real Estate Appraisal Data Sources"
analyzes the main sources of data, such as government agencies, libraries, bibliographies, and lists of
publications, of interest in rural appraisal and
mortgage analysis, but does not attempt, except by
recording a few references to be taken as an example
of the form in which a complete catalog could be
compiled, to give specific data sources of use to appraisers of rural property. The Bureau of Agricultural Economics contributes "Valuation of Real
Estate with Special Reference to Farm Real Estate",
which entirely supersedes and brings up to date its
earlier bibliography with the same title. This is a
combination of select references to published material
on the valuation of real estate in this country. It
contains a section devoted entirely to urban valuation and general methods, but the emphasis is upon
valuation of farm real estate.
Individuals and mortgage-lending institutions
which have found it difficult to build and maintain a
modern appraisal plant will find that these catalogs
are of great value to them in giving quickly a comprehensive view of published material on the wide
variety of subjects with which the competent valuator today must be familiar.
NOTE: For further information regarding these catalogs, inquiries should be
directed to the Editor of the REVIEW.
A House Built Under
the Federal Home
Building Service Plan
•
ON the opposite page is a picture of a small
house built under the Federal Home Building
Service Plan. This house is located in College
Heights, Maryland, a few miles outside of "Washington, D. C.
The project was initiated and developed through
the Federal Home Building Service Department of
a local savings and loan association which is a member of the Federal Home Loan Bank System. This
lending institution handled all the details for the
owners, safeguarding their interests by attending to
all the details involved in house construction.
One of the primary provisions of the Federal
Home Building Service Plan is that the house be
designed by an architect or approved technician.
This house was planned by the architectural firm of
Schreier and Patterson, and is one of the multiple-use
86
designs of the Federal Home Building Service Plan.
However, the duties of the architects did not end
with the design. They also supervised construction
to insure sound workmanship and good materials.
The attractiveness and convenience of this house
plan are evident. The six rooms are well centered
on a stair hall with a bedroom and bath forming a
wing at the back. All the rooms have cross ventilation. The porch is located on the southeast corner
of the house and is consequently sheltered from the
afternoon sun. The connecting porch between the
house and garage, besides tying the design together,
acts as a passage between the drying yard and the
outside basement stairs to the laundry.
NOTE: Information concerning working drawings of the plan shown on the
opposite page may be procured by writing to the Editor of the REVIEW.
Federal Home Loan Bank Review
HOUSE BUILT UNDER
THE FEDERAL HOME BUILDING SERVICE PLAN
Architects—Schreier & Patterson, Washington, D. C.
December 1937
87
RESIDENTIAL CONSTRUCTION and HOME-FINANCING ACTIVITY
•
ALTHOUGH the peak of building costs was
reached early in the summer, the general public
did not become fully aware of the sharply rising
costs until recent months. Newspapers and other
news sources are now assigning more and more
weight to high costs as the cause of the present
slump in building, and it is to be expected that many
builders will therefore delay operations until a more
favorable time. Other factors which must be considered, however, are still favorable to an increase
in building. A major factor is that, although the
coming of winter may defer the revival of building
until next year, the pressure of an acute shortage of
dwelling units which are actually needed must
eventually force a renewal of construction activity.
RESIDENTIAL
BUILDING
ACTIVITY
Another favorable sign is the definite confirmation of
a decrease in building costs, now very clearly pointed
out by the returns from the building cost index for
November.
The index of residential construction, based on
1926=100 and covering the total number of family
dwelling units provided in all cities of 10,000 population or over and adjusted for normal seasonal variation, dropped from 21.9 in September to 17.6 in
October. This is the lowest point of the index since
December 1935, and represents a volume of building
only 53 percent of that in March of this year.
In the cities of 10,000 and more population, 10,652
dwelling units at a total cost of $40,592,100 were
authorized in October. In October 1936, 15,148
AND
SELECTED
INFLUENCING
FACTORS
1926-100
600
500
400
600
500
400
TL^•^v^T
300
*FORL 'CLOSLIRES'
300
200
200
WUSIh 6 REN TALS*
100
90
80
70
60
50
40
— " * * * " ' - " 1
.
rr- **v?
r
.tt±»..~
.•
~ —>
"-—-••••* • • . ; - - J —
~f- 1
T~r—
r^»~^ '
11
J
1
"
'••.
— •'
I /••"•••!./
.•••-J
4
BUILDI VG MA 'ERIAL PRICt
J^rJJ
. f'L
.1
1 .•-
—..tfffl
J
•I*
p"-,,",i
m
J
J,—,^<c—•
._... p" |
AV 1MANUF1
1
ACTURt'NG PA>'ROLLS
••••
\y
30
*
V/
•**«*—
100
90
80
70
60
50
40
1
20
20
ARE SIDEN VAL
j
30
i ' '
D
' '
' 'II111
' i ' ' '
J
0
1929
'
'1 1
' 1' 1' 1'
1111' '1 '
' ' ' '
J
1930
D
11111' ' 'Mi i i l•' l '
J
D
1931
' ' ' '
1 ' 1' ' 1' 'I IM
' ' M
' ' !'
J
D
1932
' '
C
">NSTRICTION 3
J
1
1' ' 1' ' 11
11' ' 1' '1' 1,1' • 1' 1' 'J ' 11
' ' 1
i ' 1' '1I' 1
' ' 1
' ' 1' 1
'1' 1
' ' 1' '1II
' 1
' 1
' ' II
' ' 1
' ' 1
' ' 1' '111111
' 1
' i ' i ' II111
i ' ' ' ' ' 1
' i 1
' ' 1
' '1
' '1
' '1
1i » 1' •II
J
0
J
0
J
0
J
0
J
0
J
0
1934
1933
1935
1937
1938
1936
i '
|
Source:- 1. Federal Home Loan Bank Board (County Reports)
2. U. S. Dept. of Labor (Converted to 1926 Base)
3. Federal Home Loan Bank Board (U. S. Dept. of Labor Records)
88
Federal Home Loan Bank Review
such units were authorized and in September 1937,
12,162 units. In spite of the general drop in building, 1-family dwellings constitute about the same
proportion of total private building this October as
last October: over 70 percent. In October last
year Government-financed low-cost housing projects
bolstered total building by 1,372 units; whereas, in the
same month this year only 2 units were authorized.
In spite of the recession in building this year, the
number of units provided in the first 10 months
remains above the number provided in the same
months of 1936. So far, 142,705 dwelling units
have been provided in 1937—a far cry from the
750,000 dwelling units a year estimated as necessary
to overcome adequately the existing shortage.
The wholesale price of building materials index,
which reached its peak for 1937 in May, has fallen
slightly in each succeeding month. The largest
decline of the index in any one month, up to October,
had been only 0.4 percent. The index for the month
of October, however, shows a decrease of 0.8 percent
in the price of all building materials. There was
no type of building material on which the wholesale
price increased during October, and a decrease of
1.7 percent was shown for both the wholesale price
of brick and tile, and of lumber. The price of
ESTIMATED
lumber has declined each month since May, but this
is apparently a normal reaction from the sudden
sharp rise which took place in the first three months
of 1937.
The general level of all building material prices,
although reflecting these declines, stood 9.3 percent
above the general level in October 1936.
[1926=100]
Residential construction 1
Foreclosures (metro, cities)
Rental market (NIOB)
Rent (Labor Dept.)
Cost of living (Labor Dept.)
Building material prices
Manufacturing employment
Manufacturing payrolls
Average wage per employee
Oct.
1937
Sept. Percent
1937 change
Oct.
1936
17.6
177.0
88.0
21.9
180.0
87.4
67.8
82.9
96.2
100.8
96.5
95.7
25.1
259.0
79.7
*64.3
»80.4
87.3
95.5
85.8
89.8
95.4
99.1
96.6
97.5
-19.6
-1.7
+0.7
-0.8
-1.7
+0.1
+1.9
Percent
change
-29.9
—31.7
+10.4
+9.3
+3.8
+12.6
+8.6
1
Corrected for normal seasonal variations.
2 As of September 1936.
The index of real estate foreclosures in metropolitan communities declined from 180 in September
to 177 in October. This means that for the third
consecutive month the index did not exceed the
average for 1928. The decline of less than 2 percent
between these two months is favorable when we consider that normally there is no change between
September and October. Kises and recessions ap-
NUMBER AND COST OF FAMILY DWELLING UNITS PROVIDED
IN ALL CITIES OF 10,000 OR MORE POPULATION
(Source: Federal Home Loan Bank Board. Compiled from residential building permits reported to U. S. Dept. of Labor)
NUMBER OF UNITS PROVIDED
30
30
28
28
26
26
COST OF UNITS PROVIDED
100
100
90
x
24
2 41
1937
22
80
V
1
70
20
\y
18
19 36_
22
1936
20
90
1937
70
60
18
16
16
14
14
12
112
50
i
10
1
8
6
/
30
4 ^^*
8
1 Vi.
6
X !
^
O1
0
December 1937
k.
10
2
a)3/-3
Y
20b
4
2
40
40
10
1 931-3 5 A VS.
~i
T
50
.
+
/'
•
•«•«
5 AV £
T
u
30
-%.„
...
^
^s
>
\
20
to
89
In view of the decline in volume of building, it
was to be expected that the rate of building, i. e.,
the number of family dwelling units provided per
100,000 population, also declined. In September,
19.4 units per 100,000 were authorized; in October,
17.0 units were authorized.
Only one Federal Home Loan Bank District could
report a significant increase in the rate of building
between these two months. In the Little Rock District the rate rose from 32.4 units to 35.7 units.
The Los Angeles Bank District continues to report
greater activity than any other section of the country
in spite of an almost continuous decrease in rate since
the first part of this year. In October, 42.7 dwelling
units were built in this area for each 100,000 of
population.
building costs from August levels. In Dallas and
Reno, there was no change in building costs reported.
Only four cities reported increases in costs, and
only in Wheeling and in New Orleans, where the
increases amounted to 2 percent or more, was the
fluctuation marked.
The greatest decrease in costs occurred in Columbus, Ohio, where a decline of 6.2 percent since
August dropped the cost of the standard house from
$6,536 to $6,134. This more than absorbed the
increase reported by Columbus for the period May
to August, which was the largest percentage increase
for any reporting city at that time, and was due
primarily to labor rates.
The lowest total cost was again reported by Little
Rock, Arkansas, where costs have remained relatively stable since February 1936. In August,
Little Rock was the only city in this group reporting
a cost of under 22 cents a cubic foot. In spite of
the decreases in November, Little Rock retains this
distinction, with Nashville, at 22.8 cents, remaining
its closest rival.
Indexes of
Monthly Lending Activity of
Small-House Building Costs
Savings and Loan Associations
[ Table 3 ]
[Tables 4> 5> #> <wd 7 and Supplemental Charts A
and B]
peared rather scattered geographically. The index
stood 32 percent below the level of October 1936,
when the figure was 259.
RATE OF BUILDING
•
THE first signs of a definite halt in rising building costs appeared in July when half of the
reporting cities returned costs which had either
remained stable over the 3-month period from April
to July, or which showed slight decreases. This
tendency for building costs to level off was confirmed
by the reports of the other two groups of cities in
August and September.
In October, the group of cities which in July first
gave signs of the levelling off of costs furnished further evidence pointing to a definite decrease in building costs.
In November, the second group of cities in this
cycle submitted a report definitely confirming this
downward trend by percentage declines of greater
magnitude. Estimates of building costs reported
by 25 cities in November showed decreases of 2
percent or more from August in 7 cities, and declines
of 1 percent or more in 5 other cities. The decline
in building costs was attributable for the most part
to slight decreases in the price of materials, since
labor costs remained practically stationary. Nineteen out of the 25 cities reported a decrease in
90
•
THE present home-financing and building slump
has aflfected the volume of savings and loan lending not only in loans for new construction but in all
other categories as well. The estimated total mortgage loans by all types of savings and loan associations dropped from $66,411,000 (revised) in September to $63,621,000 in October, a continuation of
the steady decline which started in June.
Supplemental Chart A, on the facing page, clearly
shows this trend. The bars for each month are
divided by type of institution. For October, the
Federal savings and loan associations were responsible
for 38 percent of total lending, the State-chartered
members of the Federal Home Loan Bank System
for 46 percent, and the nonmember savings and loan
associations for 16 percent. This chart represents
graphically the figures of Table 5 on page 98.
Supplemental Chart B shows the distribution of
new mortgage loans made by all savings and loan
associations during the last two years. Most conspicuous is the gradually increasing proportion of
loans which have been made for home purchase. In
Federal Home Loan Bank Review
LENDING ACTIVITY OF SAVINGS AND LOAN ASSOCIATIONS
SUPPLEMENTAL CHART A
VOLUME OF NEW LOANS BY TYPE OF ASSOCIATION
80
60
o
40
o
o
r
r
>
20
Jaa Feb. Mac
Ape May Jua JuL
1936
MONTHLY
Aug. Sep. Oct
Nov. Dec Jaa Feb Mar. Apr
May Jua JuL
1937
SUPPLEMENTAL CHART B
DISTRIBUTION OF NEW LOANS BY
Aug. Sep. Oct
w
Nov. Dec
PURPOSE
I00r-T
100
,i
i
80
80
60
60
HOME
PURCHASE
40
o
m
^ \
40
20
20
Jaa
Feb. Mar. Apr. May
Aug. Sep. Oct
Nov Dec. Jaa
Feb. Mar. Ape May
Jua Jul. Aug. Sep. Oct
1937
Nov Dec.
91
December 1937
30149—37
Jua Jut
1936
3
January 1936, only 26.3 percent of the total went for
this purpose while in October 1937 the proportion
was 35.3 percent. Also noteworthy is the almost
constant percentage of loans for new construction.
About 27 percent of all savings and loan lending has
been for this purpose during the past year in spite of
the drastic fluctuations in residential construction.
HOME CONSTRUCTION LOANS MADE BY ALL SAVINGS AND LOAN
ASSOCIATIONS COMPARED WITH HOME BUILDING ACTIVITY
1201
1120
110
100
100
90
90
80 r
z
o
70
70
60
60
50]
50
401
40
r
o
0)
-J
d
30
— TOTAL HOME CONSTRUCTION LOANS8>
30
20
NON-MEMBERS
20
10
J F M A M J J A S O
1936
Of the total estimated lending by all associations
in October, 26.9 percent went for new construction,
35.3 percent for home purchase, 20.0 percent for
refinancing, 7.1 percent for reconditioning, and 10.7
percent for other purposes.
Federal Savings and Loan Insurance
Corporation
[Tables 9 and 10]
THE trend in savings and loan activity this fall
seems to be a slowing-up of investment activity
and a rather drastic reduction of mortgage lending.
The 352 reporting insured State-chartered institu92
Federal Savings and Loan System
J F M A M J J A S O N O
1937
0 Estimated for all cities of 2J500 or more population based on building
permits for I & 2 family dwellings reported to U.S. Department of Labor.
© Estimated for alt active associations by Federal Home Loan Bank Board
•
tions reflect this trend. Their total share l i a b i l i ^
in November remained almost stationary as compared with September, being bolstered slightly
by increased H. O. L. C. share subscriptions. Their
mortgage lending during the month, on the other
hand, decreased almost a million dollars to $7,042,900.
But as was true of Federal associations, this reduction was not sufficient to affect adversely the size of
their loan portfolio. Mortgage loans outstanding on
October 31 amounted to $317,682,400, a two and onehalf million dollar rise during the month.
The volume of loans for both new construction and
home purchase fell most drastically during October.
They both fell almost 20 percent but were still the
two largest categories for which loans were made.
Home purchase loans accounted for 36.8 percent of
all loans made, new construction for 23.7 percent,
while refinancing amounted to 17.2 percent of the
total and reconditioning to 7.3 percent. Loans for
purposes other than those listed were the only group
which increased over September. Consequently,
they represented 15.0 percent of total loans; whereas,
last month they represented only 11.8 percent.
On October 31, there were 1,839 insured savings
and loan associations of all types. Of this number
541 were State-chartered associations, 11 more than
at the beginning of the month; 653 were Federal
savings and loan associations converted from Statechartered associations, an increase of 8; and 645
were newly organized Federals, an increase of 1.
[Table 11]
•
THE volume of loans made each month by reporting Federal savings and loan associations
has been declining steadily during the summer and
shows no signs of slackening. In June, 1,181 reporting Federals made $30,000,000 in mortgage loans
during the month. In October, the latest reporting
month, 1,211 Federals made only $23,000,000 in new
loans.
The same group of Federal savings and loan associations loaned $25,000,000 in September. In none
of the cateogries for which loans are made, listed in
Table 11, has lending increased between these two
latest reporting months, but the balance of loans outstanding increased 1.8 percent. Thus, lending
activity by these associations has been slowing down
but it has not yet reached the point where there is any
danger of actual shrinkage of loan portfolios.
Federal Home Loan Bank Keview
O l n October, 33.8 percent of total loans were made
for new construction, and 6.4 percent for reconditioning. This portion of Federal activity is directly
related to the building industry. Of other lending,
32.8 percent went for home purchase, 19.9 percent
for refinancing, and 7.1 percent for other purposes.
In contrast to the unfavorable drop in mortgage
lending, the rate at which funds were flowing into
the reporting associations increased somewhat.
Almost 10 percent more private funds were invested
during October than during September, and 11.0
percent less was withdrawn.
Progress in number and assets of Federal savings
and loan associations
Number
Sept.
30,
1937
New
Converted
Total-
650
657
Oct.
31,
1937
Approximate assets
Sept. 30,1937 Oct. 31, 1937
649 $222, 636, 578 $242, 460, 483
662 777, 683, 581 800, 597, 235
1,307 1,311 1, 000, 320,159 1, 043, 057, 718
At the end of October, the share liability of these
1,211 reporting Federals amounted to $806,692,100
of which $206,666,200 had been subscribed by the
Treasury and the Home Owners' Loan Corporation.
On the same date, their assets amounted to over
$1,002,536,600, an increase of 1.3 percent during
the month.
which advanced three times as much in October as
in September. The Pittsburgh Bank doubled its
advances. The volume of advances by all the other
Banks either changed very slightly between these
two months or declined.
No changes in interest rates charged by the Banks
were reported up to the time of going to press.
T H E THIRD ISSUE OF DEBENTURES
On November 16, the Federal Home Loan Banks
announced the public offering of a third consolidated
debenture issue. This new issue of $25,000,000 of
3-year 2 percent Consolidated Debentures, Series C,
was the first public financing ever undertaken by
the Federal Home Loan Banks with a maturity
exceeding one year. This offering sold at a price of
$100% and was immediately oversubscribed, as were
the previous issues.
The two issues of 1-year debentures offered publicly
in April and July amounted to $52,700,000. The
first and second offerings, though 1-year debentures,
had slightly less than 11 months to maturity from the
date of issuance and carried coupon rates of 1% percent and IK percent, respectively. The 3-year
debentures offered in November bring aggregate
sales of Federal Home Loan Bank issues to a total of
$77,700,000. These Series C Consolidated Debentures are due December 1, 1940, and were priced to
yield about 1.87 percent.
A
Federal Home Loan Bank System
[Tables 12 and IS]
•
FOR the second consecutive month, advances by
the 12 Federal Home Loan Banks decreased,
paralleling the slackening in mortgage-lending activity witnessed during this summer and fall. But
advances in October amounted to $8,991,000 and
repayments to $4,461,000, leaving a net increase
which raised the balance of loans outstanding to a
new high of $184,041,000.
Only 2 of the 12 Banks advanced over one million
dollars in October. They were the Winston-Salem
and the Los Angeles Banks. The greatest increase
in advances was reported from the New York Bank
December 1937
secondary effect of the Federal
Home Building Service Plan
•
AN association in the Middle West finds that the
Home Building Service Plan attracts many
people who are financially unable to build a new
home. These people are naturally disappointed
when the financial advisor tells them that he cannot
recommend that they build under the Plan. But
they are not sent away disappointed; the association
holds several properties which it has reconditioned
and is holding for sale. The prospect is shown these
properties which are naturally lower in price than
a new dwelling. He understands how much easier
his financial obligation will be if he buys one of them
than if he builds, and, consequently, a sale is often
made.
93
Table 1.—Number and estimated cost of new family dwellins units provided in all cities of
10,000 population or over, in the United States *
[Source: Federal Home Loan Bank Board. Compiled from residential building permits reported to U. S. Department of Labor]
Total cost of units (thousands of dollars)
Number of family units provided
January-October
totals
Monthly totals
Type of structure or agency
Oct. 1937 Sept. 1937 Oct. 1936
1-family dwellings
2-family dwellings
Joint home and business 2
3- and more-family dwellings
__
Total residential
Private housing
Public housing •
January-October
totals
Monthly totals
Oct. 1937 Sept. 1937 Oct. 1936
1937
1936
81,133 $32,146.6 $37,783.6 $41,704.6
2,092.8
6,220
1,690.5
2,291.7
311.6
693
258.0
404.5
7,538.0 15,978.1
45,055
6,497.0
1937
1936
9,078
896
113
2,075
9,900
768
87
4,393
95,564
8,150
928
38,063
10,652
12,162
15,148
142,705
133,101
40,592.1
48,017.8
60,087.1
569,028.5
10,650
2
12,162
0
13,776
1,372
139,094
3,611
119,109
13,992
40,557.2
34.9
48,017.8
0.0
54,982.9
5,104.2
552,659.3 461,036.1
16,369, 2 73,354.3
7,920
698
74
1,960
$413,862.0 $348,389.2
22,017.4
17,123.2
3,401.4
2,503.8
129,747.7 166,374.2
534,390.4
1
Estimate is based on reports from communities having approximately 95 percent of the population of all cities with population of 10,000 or over.
* Includes 1- and 2-family dwellings with business property attached.
Includes only Government-financed low-cost housing project units as reported by U. 8. Department of Labor.
3
Table 2.—Number and estimated cost of new family dwelling units provided in all cities of 10,000
population or over, in October 1937, by Federal Home Loan Bank Districts and by States
[Source: Federal Home Loan Bank Board. Compiled from residential building permits reported to U. S. Department of Labor]
[Amounts are shown in thousands of dollars]
All residential dwellings
Federal H o m e Loan
Bank
Districts and States
Number of family
dwelling units
October
1937
U N I T E D STATES
10, 652
No. 1—Boston
Connecticut
Maine
Massachusetts -'.
N e w Hampshire
Rhode Island
Vermont
No. 2 — N e w York
N e w Jersey
N e w York
No. 3—Pittsburgh
Delaware
Pennsylvania West Virginia.. No. 4—Winston-Salem
Alabama
District of Columbia
Florida
Georgia
Maryland.North Carolina
South Carolina
Virginia
94
__
October
1936
All 1- and 2-family dwellings
Estimated cost
October
1937
October
1936
15, 148 $40, 592. 1
$60, 087. 1
Number of family
dwelling units
October
1937
8,692
October
1936
Estimated cost
October
1937
10, 755 $34, 095. 1
October
1936
$44, 109. 0
584
724
2, 706. 8
3, 568. 5
577
712
2, 703. 3
3, 513. 5
155
31
275
15
99
9
214
50
347
21
81
11
700.8
110.2
1, 420. 7
49.7
386.4
39.0
1, 064. 7
139.7
1, 976. 6
55.9
280. 1
51.5
155
31
268
15
99
9
202
50
347
21
81
11
700.8
110.2
1, 417. 2
49.7
386.4
39.0
1, 009.
139.
1, 976.
55.
280.
51.
1,745
3,439
7, 791. 7
14, 335. 3
933
1,352
4, 310. 6
5, 936. 0
182
1,563
352
3,087
1, 063. 0
6, 728. 7
1, 758. 9
12, 576. 4
182
751
283
1,069
1, 063. 0
3, 247. 6
1, 548. 9
4, 387. 1
628
723
2, 841. 8
3, 542. 2
500
650
2, 542. 5
3, 239. 1
9
503
116
6
630
87
46.6
2, 467. 7
327.5
38.0
3,198. 7
305.5
9
383
108
6
571
73
46.6
2,189. 9
306.0
38. 0
2, 960. 3
240.8
1,354
2,172
4, 426. 0
6, 738. 4
1,051
1,384
3, 598. 5
4, 456. 2
72
340
357
122
122
177
75
89
648
344
414
169
109
257
106
125
312.6
1, 283. 2
1, 195. 0
251.2
421.5
463.8
140.0
358.7
1, 883. 5
1, 448. 0
1, 255. 5
262.0
437.7
694.6
270.8
486.3
72
111
298
122
122
173
64
89
99
172
387
159
106
238
106
117
312.6
618.2
1, 055. 0
251.2
421.5
454.8
126.5
358.7
197. 2
1, 013. 5
1,168. 9
251.8
430. 7
660. 6
270. 8
462. 7
7
7
6
9
1
5
Federal Home Loan Bank Review
Table 2.—Number and estimated cost of new family dwelling units provided in all cities of 10,000
population or over, in October 1937, by Federal Home Loan Bank Districts and by States—Continued
[Amounts are shown in thousands of dollars]
All 1- and 2-family dwellings
All residential dwellings
Federal Home Loan Bank
Districts and States
Number of family
dwelling units
October
1937
October
1936
Estimated cost
October
1937
October
1936
Number of family
dwelling units
October
1937
October
1936
Estimated cost
October
1937
October
1936
$2, 932. 1
$3, 052. 0
No. 5—Cincinnati
702
1, 464
$3, 149. 2
$6, 372. 3
645
628
Kentucky
Ohio
Tennessee
95
500
107
107
480
877
281. 1
2, 575. 3
292. 8
384. 3
2, 630. 9
3, 357. 1
95
443
107
91
417
281. 1
2, 358. 2
120 1 292. 8
333. 8
2, 403. 4
314.8
No. 6—Indianapolis
834
817
3, 449. 4
4, 285. 0
800
792
3, 363. 6
4, 187. 0
203
631
146
671
686.1
2, 763. 3
618. 3
3, 666. 7
203
597
146
646
686. 1
2, 677. 5
618. 3
3, 568. 7
502
596
2, 551. 2
3, 178. 6
469
577
2, 386. 3
3, 136. 2
Illinois
Wisconsin
274
228
285
311
1, 563. 2
988.0
1, 793. 7
1, 384. 9
247
222
266
311
1, 399. 9
986.4
1, 751. 3
1, 384. 9
No. 8—Des Moines
501
663
1, 826. 2
2, 308. 6
451
647
1, 729. 2
2, 271. 4
Iowa
Minnesota
Missouri
North Dakota
South Dakota
121
207
137
21
15
131
196
284
20
32
434.9
799.6
482.1
62.6
47.0
419.8
769.5
993.8
56.2
69.3
121
165
129
21
15
131
196
268 !
20
32
434.9
719.6
465. 1
62.6
47.0
419. 8
769. 5
956. 6
56. 2
69. 3
No. 9—Little Rock
1,183
1,199
2, 890. 7
2, 962. 0
1,002
1,115
2, 426. 1
2, 882. 6
31
94
74
52
932
46
132
67
64
890
68.4
246.9
108. 1
128.6
2, 338. 7
136.0
362.6
120.0
164.4
2, 179. 0
31
81
74
44
772
46
124
57
57
831
68.4
223.6
108. 1
113.6
1, 912. 4
136. 0
354. 1
101. 7
150. 4
2, 140. 4
No. 10—Topeka
418
487
1, 209. 3
1, 811. 5
386
385
1, 169. 8
1, 348. 7
Colorado
Kansas
Nebraska
Oklahoma .
100
111
49
158
75
102
71
239
292.6
299.4
171.4
445.9
293.9
387.4
244.8
885. 4
80
103
49
154
75
92
71
147
262. 6
293.4
171.4
442.4
293. 9
347. 4
244. 8
462. 6
369
500
1, 163. 5
1, 495. 7
346
439
1, 100. 5
1, 402. 5
18
47
83
71
136
14
58 |
58
107
70
197
10
18
47
60
71
136
14
46
37
107
62
177
10
67.7
106.4
219. 1
219. 1
440.7
47.5
148. 9
88. 2
417. 9
208. 3
493. 7
45. 5
2, 074
5, 832. 6
8, 683. 8
52
2, 008
14
94. 1
5, 645. 5
93.0
202. 8
8, 390. 7
90. 3
Indiana
Michigan
No. 7—Chicago
Arkansas
Louisiana
Mississippi
New Mexico.
Texas
.
-
No. 11—Portland
Idaho
Montana.. _
Oregon
Utah
Washington
Wyoming
No. 12—Los Angeles.
Arizona
California.
Nevada
December 1937
-
67.7 (
106. 4
282. 1
219. 1 1
440. 7
47.5
170. 9
127. 2
417. 9
215. 3 1
518. 9
45.5
1, 832
2, 364
6, 586. 3
9, 489. 0
1, 532
28
1, 790
14
52
2, 298
14
94. 1
6, 399. 2
93.0
202. 8
9, 195. 9
90.3
28
1, 490
14
1
95
RATE OF RESIDENTIAL BUILDING IN ALL CITIES OF 10.000 OR MORE POPULATION
Represent* the estimated number of family dwelling unite provided per KXXOOO population.
[Source: Federal Home Loan Bank Board.
FEOERAL
DISTRICT
DISTRICT
I-BOSTON
2-NEW
Compiled from Building Permits reported to U S . Department of Labor.]
HOME
LOAN
BANK
DISTRICTS
YORK
DISTRICT
OISTRICT 4-WINSTON SALEM
3-PITTSBURGH
rl936
_Tl ,
1
rtTl
'
*- 1
f Li^j
r
j
I
,
-—T
s-1931-35 AVG.
1
—i
1
i
S J 3 S 3 3 3 3 S 8 S
DISTRICT
DISTRICT
5-CINCINNATI
6-IWDIANAPOLIS
DISTRICT
§ S
DISTRICT 8 - D E S MOINES
7-CHICAGO
FU
IF Jl Y— ~ ~L
r
<-l93l-33
DISTRICT 9 - L I T T L E
l
AV6
«
01 STRICT
ROCK
IQ-TOPEKA
DISTRICT
11-PORTLAND
60
50
30
r—
- i
1 Ja^i
r
^
J
20
l*37y
f 1931-35 AV&
n,_*
•I93J-3S AVG.
10
L_
^
1
\_r U
1]T
1^-J=
L
~[£>"
fi937
M-l
i Is h
h
§i s
iSsSsi?3!j{8i
UNITED
hi~
H
u.
r
*_--f
<
2
a
<
1
<
S
,
, SI93I-35
AVa
a s §
</>
o
S S S
z
STATES
_n
rWJ^V
^-
yx^
_r
Lr
§
96
n
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a
2
I
S
I
i
8
3
Federal Home Loan Bank Review
Table 3.—Cost of building the same standard house in representative cities in specific months *
NOTE.—These figures are subject to correction'
[Source: Federal Home Loan Bank Board]
Total building cost
Cubic-foot cost
Federal Home Loan Bank
Districts, States, and cities
No. 3—Pittsburgh:
Delaware:
Wilmington
Pennsylvania:
Harrisburg
Philadelphia
Pittsburgh
West Virginia:
Charleston
Wheeling
No. 5—Cincinnati:
Kentucky:
Lexington
Louisville
Ohio:
Cincinnati
Cleveland
Columbus
Tennessee:
Memphis
Nashville
No."9—Little Rock:
Arkansas:
Little Rock
Louisiana:
New Orleans
Mississippi:
Jackson
New Mexico:
Albuquerque
Texas:
Dallas
Houston
San Antonio
No. 12—Los Angeles:
Arizona:
Phoenix_
California:
Los Angeles
San Diego
San Francisco
Nevada:
Reno
_
Nov.
1937
Nov.
1936
Nov.
1937
Aug.
1937
May
1937
Feb.
1937
Nov.
1936
Aug.
1936
May
1936
$0. 242
$0. 219
$5, 811
$5, 784
$5, 737
$5, 406
$5, 258
$5, 259
$5, 290
$5, 213
.251
.238
.280
.225
.209
.247
6,031
5,720
6,715
6,186
5,948
6,781
6,186
5,944
6,730
5,668
5,483
6,179
5,408
5,010
5,920
5,405
4,929
5,433
5,439
4,870
5,405
5,371
4,584
5,474
.263
.285
.237
.240
6,312
6,836
6,350
6,704
5,857
5,696
5,846
5,696
5,763
5,564
5,477
5,476
.235
.245
.218
.227
5,635
5,883
5,721
6,066
5,887
6,111
5,223
5,456
5,237
5,338
5,120
5,326
4,993
5,384
.279
.284
.256
.239
.259
.241
6,689
6,827
6,134
6,711
6,981
6,536
6,321
6,756
6,352
5,849
6,320
6,052
5,748
6,213
5,778
5,932
6,165
5,850
5,827
6,147
5,529
5,809
6,028
5,522
.240
.228
.212
.212
5,748
5,476
5,752
5,504
5,704
5,421
5,462
5,267
5,092
A 094
5,080
5,096
5,120
5,089
4,841
5,030
.216
.214
5,186
5,208
5,285
5,195
5,136
5,202
5,215
5,215
.259
.225
6,204
6,027
5,911
5,601
5,395
5,124
5,075
5,075
.249
.225
5,981
6,112
5,849
5,607
5,412
5,365
5,333
5,319
.277
.243
6,653
6,744
6,358
5,948
5,827
5,779
5,625
5,625
.256
.252
.260
.235
.242
.231
6, 147
6,047
6,250
6,147
6,073
6,284
6,143
6,391
6,284
5,968
5,935
5,884
5,641
5,809
5,538
5,641
5,809
5,532
5,618
5,933
5,532
5,464
.279
.243
6,706
6,814
6,742
5,885
5,843
6,032
6,112
6,044
.243
.259
.266
.229
.233
.259
5,833
6,218
6,375
6,001
6, 181
6,452
6,015
6,141
6,407
5,800
6,137
6,319
5,489
5,581
6,222
5,301
5,361
6,151
5,239
5,381
6,017
5,316
5,385
.278
.265
6,677
6,677
6,641
6,360
6,354
6,313
6,324
6,097
Feb.
1936
i The house on which costs are reported is a detached 6-room home of 24,000 cubic feet volume. Living room, dining room, kitchen, and lavatory onfirstfloor;
3 bedrooms and bath on second floor. Exterior is wide-board siding with brick and stucco as features of design. Best quality materials and workmanship are used
throughout.
The house is not completed ready for occupancy. It includes all fundamental structural elements, an attached 1-car garage, an unfinished cellar, an unfinished
attic, afireplace,essential heating, plumbing, and electric wiring equipment, and complete insulation. It does not include wall-paper nor other wall nor ceiling finish
on interior plastered surface, lightingfixtures,refrigerators, water heaters, ranges, screens, weather stripping, nor window shades.
Keported costs include, in addition to material and labor costs, compensation insurance, an allowance for contractor's overhead and transportation of materials,
plus 10 percent for builder's profit.
Reported costs do not include the cost of land nor of surveying the land, the cost of planting the lot, nor of providing walks and driveways; they do not include
architect's fee, cost of building permit,financingcharges, nor sales costs.
Infiguringcosts, current prices on the same building materials list are obtained every 3 months from the same dealers, and current wage rates are obtained from
the same reputable contractors and operative builders.
December 1937
97
Table 4.—Estimated volume of new loans by all savings and loan associations, classified
according to purpose 1
[Thousands of dollars]
Mortgage loans on homes
Month
Loans for all Total loans,
other pur- all purposes
poses
Refinancing Reconditioning
Construction
Home purchase
$16, 806
$22, 217
$13, 569
$4, 994
$6, 171
11, 884
13, 084
18, 251
22, 098
20, 600
21, 628
20, 283
19, 342
17, 942
17, 114
14, 510
16, 629
22, 007
27, 381
28, 831
28, 696
24, 934
23, 172
24, 277
22, 494
10, 643
11, 405
15, 502
15, 811
15, 113
15, 905
14, 668
14, 382
2,583
2,667
3,915
4,949
4,862
5,069
4,472
4,339
4,691
4,527
4,794
5,298
6,501
7,261
7,016
7,369
6,317
6,026
6,582
6,791
1936
October
1937
January
February
March
April
May
June
July
August
September
October
1
12, 919
12, 695
$63, 757
44, 414
49, 083
66,176
77, 500
76, 422
78, 667
70, 674
67, 261
66, 411
63, 621
1937 data are on a revised basis.
Table 5.—Estimated volume of new loans by all savings and loan associations, classified according
to type of association 1
[Amounts are shown in thousands of dollars]
Volume of loans
Month
Total
October
January
February
March
April
May
June
July
August
September
October
1936
1937
Federal
State
members
Percent of total
Nonmembers
Federal
State
members
Nonmembers
$63, 757
$23, 914
$27, 519
$12, 324
38
43
19
44, 414
49, 083
66, 176
77, 500
76, 422
78, 667
70, 674
67, 261
66, 411
63, 621
17, 543
19, 360
27, 829
32, 915
30, 998
31, 577
28, 693
26, 768
26, 189
24, 539
18, 671
21, 509
28, 325
33, 153
34, 616
35, 221
31, 799
29, 866
29, 673
29, 020
8,200
8,214
10, 022
11, 432
10,808
11, 869
10, 182
10, 627
10, 549
10, 062
40
39
42
42
41
40
41
40
39
38
42
44
43
43
45
45
45
44
45
46
18
17
15
15
14
15
14
16
16
16
1937 data are on a revised basis.
98
Federal Home Loan Bank Review
Table 6.—Estimated volume of new lending activity of savings and loan associations, classified by
District and type of association x
[Amounts are shown in thousands of dollars]
New loans
Federal Home Loan Bank District and type of
association
October
1937
September
1937
Percent
increase,
Oct. 1937
over Sept.
1937
0
+ 3
+ 5
- 18
5
- 6
+ 13
6,820
749
3,628
2,443
0
+ 108
6
- 23
5, 110
1,770
1, 630
1, 710
+ 3
+ 8
7
-+ 6 1
5,309
1,988
1,593
1,728
1
4
+ 10
7
3,555
1, 116
1, 284
1, 155
3,807
1, 084
1, 450
1,273
- 7
+ 3
-11
- 9
3,145
841
1,001
1,303
+
+
+
-
8, 755
3, 402
4,243
It HO
8,472
3,495
3,907
1,070
+
+
+
3
3
9
4
8,868
3,212
4,152
1,504
1
+ 6
+ 2
- 26
10,323
4,745
5,293
385
3,760
1,775
1,582
403
6,139
2,236
3,387
516
4,474
1,644
1,456
1,374
3,737
1,286
2,191
260
3,640
1,439
993
1,208
2,381
1,248
929
204
4,756
2, 181
2,517
58
11, 295
5,223
5,580
492
3,745
1,678
1,720
347
6,183
2,511
3,208
464
4,664
2,026
1,217
1,421
4,116
1,304
2,414
398
3,981
1,690
1,192
1,099
3,039
1,494
1,011
534
5,224
2,429
2,715
80
- 9
- 9
- 5
-42
0
+ 6
- 8
+ 16
- 1
-11
+ 6
+ 11
> -4
-19
+ 20
-3
- 9
- 1
- 9
-35
- 9
-15
-17
+ 10
-22
-16
- 8
-62
-9
-10
-7
-28
9,956
4,751
4,364
841
4,227
1,495
2,237
495
5,536
2,100
2,824
612
4, 128
2, 100
1, 109
919
3,590
1,298
1,775
517
4,038
1,354
974
1,710
2,955
1,665
1,208
82
5,185
2,361
2,654
170
+
$66,411
26, 189
29,673
10, 549
6,830
1,561
3,395
1, 874
4
6
2
5
6,775
1, 485
3,629
1,661
+
+
l
5,271
1,906
1, 750
1,615
District 3: Total
Federal
State member
Nonmember
District 4: Total
Federal
State member
Nonmenber
J
District 1: Total
Federal
State member
Nonmember
District 2: Total
Federal
State member
Nonmember
District 5: Total
Federal
State member
Nonmember. _ _
District 6: Total
Federal
State member.
Nonmember
District 7: Total
Federal
State member
Nonmember
District 8: Total
Federal
State member
Nonmember
District 9: Total
Federal
State member
Nonmember
District 10: Total
Federal
State member
Nonmember
District 11: Total
Federal
State member
Nonmember
District 12: Total
Federal
State member
Nonmember
1
_
__
__
__.
__ _
.
Percent
increase,
Oct. 1937
over Oct.
1936
$63, 757
23, 914
27, 519
12, 324
$63,621
24, 539
29, 020
10, 062
-
United States: Total
Federal
State member
Nonmember
New loans,
October
1936
13
33
28
11
4
0
+ 21
- 66
- 11
+ 19
- 29
- 19
+ H
+ 6
+ 20
- 16
+8
-22
+ 31
+ 50
+ 4
1
+ 23
- 50
- 10
+ 6
+ 2
- 29
- 19
- 25
- 23
+ 149
-8
-8
-5
-66
1937 data are on a revised basis.
December 1937
99
Table 7.—Monthly lending activity and total assets as reported by 2,689 savings and loan
associations in October 1937
[Source: Monthly reports from savings and loan associations to the Federal Home Loan Bank Board]
[Amounts are shown in thousands of dollars]
L o a n s m a d e i n O c t o b e r according t o p u r p o s e
N u m b e r of associations
M o r t g a g e loans o n 1- t o 4-family n o n f a r m h o m e s
Federal Home Loan Bank
Districts a n d States
Construction
Home purchase1
Sub- Reporting
mitting
r e p o r t s loans
made
Refinancing a n d reconditioning a
L o a n s for all
other purposes
T o t a l loans, all
purposes
Number
Number
Total
assets
O c t . 31,
1937 3
Amount
Number
Amount
Number
Number
Amount
Refinancing
Reconditioning
Amount
Total
number of
savings
and
loan
associations4
Amount
2,689
2,284
4,082 $12,944.4
6,224 $15,705.6
7,246 $9,421.4 $3,081.7
3,196 $4,362.5
20,748 $45,515.6 $2, 700,226.3
10,020
1,225
1,038
426
1,131
881
272
2,504
1,356
222
7,914.9
4,493. 7
535.8
3,008
2,667
549
7,666.0
6,880.2
1,159.4
3,490 4,667.9 1,503.9
3,162 4,297.3 1,295.7
456.2
594
282.1
1,362 1,656.7
1,433 2,063.6
642.2
401
10,364 23.409.4 1,013,634.2
8,618 19.030.5 1, 361,045.0
3,075.7
1,766
325,547.1
1,305
2,588
6,127
152
136
244
851.3
586
1,899.5
28
21
86
8
5
4
22
16
81
8
5
4
57
14
113
17
39
4
201.0
27.4
405.9
41.2
169.5
6.3
34
42
387
25
85
13
284
182
306
1,149. 5
150
134
65
117
12
294
53.1
1,096.4
N o . 3—Pittsburgh
231
158
130
Delaware
Pennsylvania
W e s t Virginia
6
202
23
5
132
21
4
60
66
N o . 4—Winston-Salem
285
250
17
12
48
45
53
44
39
27
15
12
42
37
43
43
35
23
N o . 5—Cincinnati
388
Kentucky
Ohio
Tennessee
60
292
36
U N I T E D STATES
Federal
State member
Nonmember
_
_
N o . 1—Boston
Connecticut
Maine
Massachusetts
New Hampshire
Rhode Island
Vermont
N o . 2—New Y o r k
N e w Jersey
New York
_._
_.
Alabama
D i s t r i c t of C o l u m b i a
Florida
Georgia
Maryland
N o r t h Carolina
_._
S o u t h Carolina
Virginia
j
N o . 6—Indianapolis
Indiana
Michigan
N o . 7—Chicago. .
.
.
Illinois
Wisconsin.
.
N o . 8—Des M o i n e s
Iowa
Minnesota
Missouri
North Dakota
South Dakota
__
587
739.2
304.4
316
423.7
1,733
4,218.1
309,765.6
367
127.0
83.6
1,316.4
40.4
291.7
40.4
29
44
402
39
64
9
76.6
61.3
463.8
40.8
86.5
10.2
1.7
13.0
229.8
15.0
34.1
10.8
22
13
235
23
22
1
12.6
4.8
353.0
11.9
37.3
4.1
142
113
1,137
104
210
27
418.9
190.1
2,768.9
149.3
619.1
71.8
18,686.6
12,106.9
242,404. 6
7,226.8
26,475.5
2,865.2
53
42
219
30
9
14
369
1,275.8
264
508.7
186.8
216
221.7
1,155
3,342.5
330,001.0
1^787
73
296
214.3
1,061.5
35
229
44.2
464.5
22.5
164.3
30
186
57.6
164.1
150
1,005
391.7
2,950.8
113,201. 5
216,799. 5
1,498
289
357.0
256
628.4
237
295.7
107.4
109
119.3
732
1,507.8
99,696. 7
2,520
15.0
191.6
150.4
18
202
36
51.0
508.0
69.4
3
172
62
2.0
217.1
76.6
0.7
72.6
34.1
22
53
34
15.2
71.9
32.2
47
487
198
83.9
1,061. 2
362.7
4,041.1
82,200. 2
13,455. 4
42
2,410
68
603
2, 243.9
648
1,635,0
1,071
20
75
137
74
41
117
93
46
33.9
651.1
638.7
163.0
128.3
247.2
222.0
159.7
61
63
62
44
182
115
46
75
70.4
299.8
176.2
75.7
525.5
219.2
94.5
173.7
358
558
1,810.2
1,392
3,812.8
1,278
55
270
33
87
362
109
256.8
1, 322.6
230.8
190
1,159
43
448.1
3,286.4
78.3
1,917.2
405.5
340
506.0
2,662
6, 707.6
248,182.9
1,287
28.9
28
481 1,384.6
83.7
78
51.8
82
79.3
54
172
129.7
95
55.2
81
104.0
5.9
99.8
50.1
52.7
16.7
68.8
77.6
33.9
14
80
4,7
45
42
66
18
28
11.5
58.3
152.5
44.1
85.4
86.2
21.2
46.8
123
699
324
245
319
470
252
230
150.6
2,493. 6
1,101.2
387.3
835.2
751.1
470.5
518.1
5, 728. 5
106,998.5
27.574.1
14,623.3
29,216.3
29,269.8
14.421.2
20,351.2
42
29
102
62
693
188
79
92
1,551.0
543.5
587
877.0
3,815
8, 594. 5
535,337.3
975
192
192.6
1,005 1,274. 5
81
83.9
78.4
428.4
36.7
95
461
31
87.0
734.4
55.6
564
2,987
264
1,062.9
7.046.3
485.3
55,189.2
462, 617. 7
17, 530.4
186
733
56
200
187
369
947.6
607
1,166.8
798
581.8
328.3
307
345.9
2,081
3.370.4
229,911. 5
376
142
581
134
53
203
166
469. 7
477.9
518
89
924.8
242.0
633
165|
410.8
171.0
253.7
74.6
213
94
224.3
121.6
1,567
514
2,283.3
1,087.1
130,878. 5
99,033.0
303
73
2761
233
232
702. ll
537
1,465.7|
697 1,124.9
304.5,
222
308.8
1,688
3,906.0
214,313.6
1,072
206
70
173
60
115
117
401.8
300.3|
447
90
1,211.9
253.8
592
105
986. 7
138.2
259.2
45.3
172
50
229.6
79.2
1,326
362
3,089.2
816.8
164, 798.3
49,515.3|
864
208
185
160
229
738.4|
295
622. ol
493
682.8
163.9
185|
187.5|
1,202|
2,394.6
115,789.9
442
47
47
70
14
7
44
42
58
54
97
55
12
11
153.9
368.0
163.3
34.9
18.3
79
101
82
28
5
130.8
255.6
187.7
44.5
3.4
143
151
147
30
22
170.1
203.4
257. 5
30.4
21.4
44.5]
41.9
51.7
10.5
15.3
44
48
60
29
4
53.4
71.4
37.3
14.6
10.8
320
397
344
99
42
7
552. 7|
940.3
697. 5
134.9
69.2
22, 382. 5|
34,232.6
49, 563.8
7,001. 7
2,609.3
99
76
225
24
18
1 Loans for home purchase include all those involving both a change of mortgagor and a new investment by the reporting institution on a property already built,
wnetner new or old.
2
Because many refinancing loans also involve reconditioning it has been found necessary to combine the number of such loans, though amounts are shown separately
Amounts shown under refinancing include solely new money invested by each reporting institution and exclude that part of all recast loans involving no additional
investment by the reporting institution.
3
Assets are reported principally as of Oct. 31,1937.
< Number of members as of Oct. 31,1937. Number of nonmembers as reported for year 1936 adjusted for conversion through Oct. 31,1937, except for Maryland and
Illinois where the number of nonmembers is estimated.
100
Federal Home Loan Bank Review
Table 7.—Monthly lending activity and total assets as reported by 2,689 savings and loan
associations in October 1937—Continued
[Amounts are shown in thousands of dollars]
Loans made in October according to purpose
N u m b e r of associations
Mortgage loans on ] - to 4-family nonfarm homes
Refinancing and reconditioning
Federal H o m e Loan B a n k
Districts and States
Construction
Sub- Reporting
mitting
loans
reports m
ade
Arkansas
Louisiana
Mississippi
N e w Mexico
Texas
N o . 10—Topeka
Colorado
Kansas
Nebraska
Oklahoma
N o . 11—Portland
Idaho
Montana
Oregon
Utah....
Washington
Wyoming
Alaska
__
N o . 12—Los Angeles
Arizona __
California
Nevada
Hawaii
__
Total
assets
Oct. 31,
1937
Total loans, all
purposes
Amount
Number
N o . 9—Little Rock
Loans for all
other purposes
H o m e purchase
Number
Amount
272
237
422 $1,110.5
41
72
29
11
119
35
68
25
7
102
40
117
19
17
229
83.4
363.9
32.7
56.0
574.5
186
162
269
34
67
35
50
25
61
29
47
118
8
17
24
7
51
10
1
Number
Refinancing
Amount
Reconditioning
NumNumAmount
ber
ber
Amount
506 $1,039.3
533
$442.7
$258.1
301
$515.5
50
216
23
6
211
84.1
505.1
21.2
13.5
415.4
58
172
56
9
238
30.2
186.3
34.5
4.5
187.2
26.7
114.7
14.4
3.3
99.0
65
135
8
6
87
77.6
275.6
8.7
11.2
142.4
213
640
106
38
765
302.0
1,445.6
111.5
88.5
1,418. 5
768.8
514
993.1
478
477.6
173.8
316
382.3
1,577
2,795.6
35
72
43
119
106.9
179.4
129.3
353.2
72
158
128
156
155.5
272.4
226.5
338.7
74
142
113
149
104.2
106.5
100.9
166.0
18.8
66.6
40.5
47.9
25
76
99
116
33.8
89.3
101.9
157.3
206
448
383
540
419.2
714.2
599.1
1,063.1
ai3
250
639.8
224
464.6
391
414.5
172.2
164
255.2
1,029
8
16
24
7
47
10
1
24
34
61
21
103
7
0
43.7
91.2
155.4
81.1
256.0
12.4
0.0
16
18
42
18
110
20
0
23.3
44.8
79.7
50.6
226.2
40.0
0.0
23
47
106
20
186
8
1
25.1
25.5
124.1
26.0
206.7
7.1
0.0
8.4
35.5
56.8
17.5
42.9
7.1
4.0
16
15
28
13
86
6
0
17.2
15.1
46.4
32.0
132.9
11.6
0.0
79
114
237
72
485
41
1
112
108
470
1,625.3
290
702.6
419
685.3
133.3
133
219.6
3
107
1
1
3
103
1
1
18
446
4
2
46.2
1, 569. 4
5.4
4.3
4
282
0
4
5.3
683.3
0.0
14.0
40
373
2
4
66.0
608.3
0.0
11.0
0.9
130.1
1.7
0.6
1
130
0
2
1.5
215.0
0.0
3.1
*
Total
number of
savings
and
loan
associations
$163,615.0
409
10,835.5
85,009.7
4,964. 2
2,711.7
60,093.9
66
89
50
22
182
164,828.3
381
19, 560.2
50,514.0
42,446.4
52,307. 7
63
152
90
76
1,946.3
97,426. 7
185
117.7
212.1
462.4
207.2
864.7
78.2
4.0
5,715. 2
11,438.0
23,290.0
8,243.0
44, 584.2
4,066.4
89.9
13
26
38
21
72
14
1
1,312
3,366.1
191,357.8
219
63
1,231
6
12
119.9
3, 206.1
7.1
33.0
1,872.3
187,189.0
678.2
1, 618.3
4
198
5
12
1,762 $3,366.1
_
Table 8.—Index of wholesale price of building materials in the United States
[1926=100]
[Source: U. S. Department of Labor]
All build- Brick and
ing matile
terials
October 1936
January
February
March
April
May
June
July
August
September
October
1937
Cement
Lumber
Paint and
paint
materials
Plumbing Structural
and
steel
heating
Other
87.3
88.3
95.5
86. 1
80.2
76.6
97. 1
90.4
91.3
93.3
95,9
96.7
97.2
96.9
96.7
96.3
96.2
95.4
89.7
91.0
91.8
94.9
95.0
95.0
95.4
95.5
95.0
93.4
95.5
95.5
95.5
95.5
95.5
95.5
95.5
95.5
95.5
95.5
93.0
99.0
102. 1
103.0
103.0
102.2
101.3
99.5
99.0
97.3
83.7
83.4
83.9
82.9
83.7
83.6
83.9
84. 1
84.6
84.2
77. 1
77.4
77.6
78.7
78.7
78.7
78.7
78.8
80.6
80.6
104.7
104.7
112.9
114.9
114.9
114.9
114.9
114.9
114.9
114.9
93.9
95.0
98.9
99.9
101.3
101. 1
101.0
101.0
100.8
100.2
- 0 . 8%
+ 9.3%
-1.7%
+ 5.8%
0.0%
0.0%
-1.7%
+ 13.0%
- 0 . 5%
+ 5. 0%
0.0%
+ 5.2%
0.0%
+ 18.3%
- 0 . 6%
+ 10.8%
Change:
Oct. 1937-Sept. 1937
Oct. 1937-Oct. 1936_
December 1937
101
Table 9.—Institutions insured by the Federal Savings and Loan Insurance Corporation *
Cumulative number at specified dates
Number of
shareholders
Assets
Share and
creditor
liabilities
Dec. 31, Dec. 31, Dec. 31, Sept. 30, Oct. 31,
1937
1936
1935
1934
1937
Oct. 31,
1937
Oct. 31,
1937
Oct. 31,
1937
$599, 202, 799
727, 063, 343
165, 942, 590
$522, 351, 298
664, 984, 772
155, 568, 488
State-chartered associations
Converted F. S. and L. A
New F. S. and L. A
Total
4
108
339
136
406
572
382
560
634
530
645
644
541
653
645
451
1,114
1,576
1,819
1,839
743, 909
682, 163
133, 239
1, 559, 311 1, 492, 208, 732 1, 342, 904, 558
1
Beginning Dec. 31, 1936, figures on number of associations insured include only those associations which have remitted
premiums. Earlier figures include all associations approved by the Board for insurance.
Number of shareholders, assets, and share and creditor liabilities of insured associations are as of latest obtainable date and
w ill be brought up to date after June 30 and December 31 each year.
Table 10.—Monthly operations of 352 identical insured State-chartered savings and loan associations
reporting during September and October 1937
September
Share liability at end of month:
Private share accounts (number)
Paid on private subscriptions
H. O. L. C. subscriptions
Total
Private share investments during month
Repurchases during month
Mortgage loans made during month:
a. New construction
b. Purchase of homes
c. Refinancing
d. Reconditioning
e. Other purposes
.
Total
Mortgage loans outstanding end of month
Borrowed money as of end of month:
From Federal Home Loan Banks
From other sources
Total
Total assets, end of month
102
_•
__
__
October
Change September to
October
482, 511
483, 031
Percent
+ 0. 1
$338, 396, 900
24, 936, 800
$338, 093, 700
25, 895, 800
-0. 1
+ 3.9
363, 333, 700
363, 989, 500
+ 0. 2
5, 608, 000
6, 410, 600
5, 924, 400
6, 373, 600
+ 5.6
-0.6
2, 076, 200
3, 221, 600
1, 251, 600
532, 000
948, 400
1, 664, 700
2, 594, 600
1, 211, 700
514, 800
1, 057, 100
8, 029, 800
315, 129, 200
7, 042, 900
317, 682, 400
— 12. 3
+ 0. 8
20, 373, 700
2, 270, 300
20, 791, 900
2, 151, 600
+ 2. 1
-5. 2
22, 644, 000
22, 943, 500
+ 1.3
461, 634, 100
463, 923, 400
+ 0. 5
-19.
-19.
-3.
-3.
+ 11.
8
5
2
2
5
Federal Home Loan Bank Review
Table 11.—Monthly operations of 1,211 identical Federal savings and loan associations reporting
during September and October 1937
September
Share liability at end of month:
Private share accounts (number)
Paid on private subscriptions
Treasury and H. 0 . L. C. subscriptions
Total
Private share investments during month
Repurchases during month
Mortgage loans made during month:
a. New construction
b. Purchase of homes
c. Refinancing
d. Reconditioning.
e. Other purposes
,.
Total
Mortgage loans outstanding end of month
Borrowed money as of end of month:
From Federal Home Loan Banks
From other sources
Total
Total assets, end of month
Table 12.—Federal Home Loan Bank advances
to member institutions by Districts
Change September to
October
October
802, 821
813, 200
Percent
+ 1.3
$594, 644, 700
204, 699, 100
$600, 025, 900
206, 666, 200
+ 0. 9
+ 1.0
799, 343, 800
806, 692, 100
+ 0. 9
12, 445, 500
9, 198, 400
13, 664, 700
8, 185, 800
+ 9. 8
-11.0
8, 355, 200
8, 111, 500
5, 122, 000
1, 631, 300
1, 828, 800
7, 852, 100
7, 618, 100
4, 636, 700
1, 499, 900
1, 649, 200
-6.0
-6. 1
-9. 5
-8. 1
-9. 8
25, 048, 800
769, 116, 500
23, 256, 000
782, 846, 300
-7.2
+ 1.8
81, 453, 400
2, 827, 400
84, 481, 900
3, 071, 700
+ 3. 7
+ 8. 6
84, 280, 800
87, 553, 600
+ 3.9
989, 658, 900
1, 002, 536, 600
+ 1.3
Table 13.—Lending operations of the Federal
Home Loan Banks
[Thousands of dollars]
Federal Home Loan Banks
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
1—Boston
2—New York
3—Pittsburgh
4—Winston-Salem
5—Cincinnati
6—Indianapolis
7—Chicago __ _8—Des Moines
9—Little Rock
10—Topeka
11—Portland.
12—Los Angeles
Total
December 1937
Advances
made during
Oct. 1937
Advances
made during
Sept. 1937
$603, 300. 00
963, 200. 00
859, 486. 84
1, 244, 150. 00
923, 000. 00
471, 900. 00
660, 910. 00
761, 808. 00
408, 400. 00
527, 800. 00
491, 800. 00
1, 075, 500. 00
$547, 700. 00
317, 500. 00
465, 000. 00
1, 776, 140. 00
1, 160, 900. 00
354, 000. 00
1, 178, 689. 28
1, 049, 542. 00
420, 000. 00
418, 700. 00
468, 200. 00
1, 174, 000. 00
8, 991, 254. 84
9, 330, 371. 28
Repayments
monthly
Balance
outstanding at end
of month
Month
Loans advanced
monthly
December 1935
June 1936
December 1936
$8, 414
11, 560
13, 473
$2, 708
3,895
5,333
$102, 795
118, 587
145, 401
6,570
4,260
8,591
9,640
12, 170
17, 769
10, 221
11,116
9,330
8,991
8,2?5
6,800
7,077
6,214
4,825
4,203
7,707
5,080
5,426
4,461
143* 745
141, 205
142, 719
146, 146
153, 491
167, 057
169, 571
175, 607
179,511
184, 041
January
February
March
April
May
June
July
August
September
October
1937
103
Table 14.—H.
O . L. C. subscriptions to shares of savings and loan associations—Requests
and subscriptions l
Uninsured State-chartered members of
the F. H. L. B.
System
Number
(cumulative)
Requests:
Dec. 31, 1935
Dec. 31, 1936
June 30, 1937
July 31, 1937
Aug. 31, 1937
Sept. 30, 1937
Oct. 31, 1937
Subscriptions:
Dec. 31, 1935
Dec. 31, 1936
June 30, 1937
July 31, 1937
Aug. 31, 1937
Sept. 30, 1937
Oct. 31, 1937
1
Insured State-chartered associations
FederalI savings and
loan associations
Number
Amount
(cumu(cumulative) lative)
Amount
(cumulative)
Number
(cumulative)
Amount
(cumulative)
Tv*+«i
Number
(cumulative)
Amount
(cumulative)
27
89
125
125
126
126
127
$1, 131, 700
3, 845, 710
5, 400, 710
5, 655, 210
6, 007, 210
6, 082, 210
6, 192, 210
33
279
473
515
586
623
639
$2, 480, 000
21, 016, 900
32, 873, 600
35, 410, 100
39, 633, 420
41, 510, 420
42, 148, 470
553
2,617
3,669
3,838
4,088
4,217
4,255
$21, 139, 000
108, 591, 900
159, 298, 600
166, 884, 100
177, 603, 700
182, 523, 000
184, 052, 200
613
2,985
4,267
4, 478
4,800
4,966
5,021
$24, 750, 700
133, 454, 510
197, 572, 910
207, 949, 410
223, 244, 330
230, 115, 630
232, 392, 880
2
45
63
52
48
47
48
100, 000
1, 688, 000
2, 381, 000
1, 934, 000
1, 926, 000
1, 901, 000
1, 931, 000
24
262
440
465
492
510
535
1, 980, 000
19, 455, 900
30, 283, 600
31, 176, 600
32, 950, 600
33, 675, 720
34, 954, 770
474
2,538
3,509
3,647
3,742
3,849
3,918
17, 766, 500
104, 477, 400
150, 368, 400
155, 917, 000
159, 511, 500
164, 226, 200
166, 447, 700
500
2,845
4,012
4,164
4,282
4,406
4,501
19, 846, 500
125, 621, 300
183, 033, 000
189, 027, 600
194, 388, 100
199, 802, 920
203, 333, 470
Refers to number of separate investments, not to number of associations in which investments are made.
Table 15.—Properties acquired by H . O . L. C
through foreclosure and voluntary deed l
Period
Prior to 1935
1935: Jan. 1 through
July 1 through
1936: Jan. 1 through
July 1 through
1937: January
February
March
April
May
June
July
August
September
October
June
Dec.
June
Dec.
Table 16.—Reconditioning Division—Summary of
all reconditioning operations of H . O . L. C
through Nov. 1 5 , 1 9 3 7 *
Number
30
31
30
31
Grand total to Oct. 31, 1937.
9
114
983
4,449
15, 646
3,059
3,290
4,143
3,887
4,472
4,608
4,476
4,298
4,657
4,409
June 1,
1934,
through
Oct. 15,
1937
Cases received 2
Contracts awarded:
Number
Amount
Jobs completed:
Number
Amount
848, 849
Oct. 16,
1937,
through
Nov. 15,
1937
10, 759
Cumulative
through
Nov. 15,
1937
859, 608
484, 438
10, 664]
495,102
$92, 287, 016,$1, 959, 115 $94, 246, 131
11, 612]
473, 241
484, 853
$88, 593, 747 $1, 787, 961 $90, 381, 708
62, 450
1
1
Does not include 21,272 properties bought in by H. O. L. C.
at foreclosure sale but awaiting expiration of the redemption period before title in absolute fee can be obtained.
In addition to the 62,450 completed cases, 347 properties
were sold at foreclosure sales to parties other than the H. O.
L. C. and 7,899 cases have been withdrawn due to payment
of delinquencies by borrowers after foreclosure proceedings
were authorized.
104
All figures are subject to adjustment. Figures do not
include 52,269 reconditioning jobs, amounting to approximately $6,800,000, completed by the Corporation prior to the
organization of the Reconditioning Division on June 1, 1934.
2
Includes all property management, advance, insurance,
and loan cases referred to the Reconditioning Division which
were not withdrawn prior to preliminary inspection or cost
estimate prior to Apr. 15, 1937.
Federal Home Loan Bank Review
Administrative Rulings, Board Resolutions, and
Counsel's Opinions
Digest of A-B-C Book Opinion
ANY member may obtain from a Federal Home Loan Bank a copy of any administrative ruling, Board resolution, or the complete
text of any opinion of the Legal Department of the Board, the digest of which is printed in the REVIEW. " A " indicates administrative rulings by the Governor; " B " indicates resolutions of the Board; and " C " indicates Counsers opinions. In requesting
any such copy, its A-B-C Book reference number and date, as given in parentheses at the end of each of the following digests,
should be cited. Copies of the A-B-C Book itself are not available for distribution.
POWERS OF FEDERAL ASSOCIATIONS—Office
build-
ings, purchase of.
R E A L ESTATE—Office building, purchase of.
O F F I C E BUILDING—Location of, and investment in.
Fed. Charter E, Sec. 11; Fed. Charter K, Sec. 3 ;
Fed. Regs. 45, 46.
1. Charter K, Section 3, empowers a Federal savings and
loan association to invest in an office building or buildings for
the transaction of the association's business without obtaining
Board approval, provided the amount so invested does not
exceed the sum of its undivided profits and reserve accounts.
If the association owns the building in which it is now situated,
but wishes to purchase another building in the same locality
and immediate vicinity and move its office to the new building,
it may do so without obtaining Board approval, provided the
total amount invested in both buildings does not exceed the
sum of its undivided profits and reserve accounts. Both
buildings could be carried on the association's books until
satisfactory disposition could be made of the old building. In
purchasing real estate for office purposes, if the association
intends to move any office from its immediate vicinity or from
the location fixed by its charter, or intends to establish a
branch office, prior approval of the Board thereto is necessary
under the provisions of Federal Regulation 45 before the
purchase of such real estate would be an investment for office
purposes.
2.1 The words "undivided profits and reserve accounts'' as
used in Charter K, Section 3, and Charter E, Section 11, as a
measure for determining the amounts a Federal association
may invest in real estate whereon there is, or may be, erected
a building or buildings for the transaction of the business of an
association, mean, at any given date, the sum of the following:
(a) The aggregate amount of all reserves for losses, and
such portion of income collected in advance as is not subject
to refund, but excluding any contra reserve required to be
set up as a condition for conversion or pursuant to Section
46 of the Federal Regulations; and
(b) The amount of the undivided profits account of the
association, to-wit, the accumulation of transfers on previous dividend dates to the undivided profits account, less
amounts declared as dividends out of the amounts remainng from previous periods in the undivided profits account.
(As to powers of Federal associations with respect to investments in real estate, see paragraph 1 of A-B-C Book Opinion,
1
Paragraph numbered 2 added Oct. 12, 1937.
December 1937
C-145, entitled "Powers of Federal Associations—Purchase
of Real Estate".)
(A-B-C Book, C-055, May 20, 1937)
ADVANCES—Valuation of real estate for purposes of.
F. H . L. B . Act, Sees. 10 (a), 10 (b); Bank Reg.,
Sec. 42 (10).
The value of real estate, for the purpose of determining
the maximum amount that may be advanced on the security
of a home mortgage under Section 10 (a) (2) or Section 10 (a)
(3) of the Federal Home Loan Bank Act, must be based
upon the value of such real estate as of the time such advance
is made by the Federal Home Loan Bank. Such value shall
be established by such evidence as the Federal Home Loan
Bank deems appropriate and sufficient.
(A-B-C Book, C-166, June 28, 1937)
ADVANCES TO NONMEMBERS—Large scale mortgages
insured by F . H. A.: F . H. L. B . Act, Sec. 10 (b);
Bank Reg. 47.
Pursuant to the provisions of Section 10 (b) of the Federal
Home Loan Bank Act and the provisions of Bank Regulation 47, a Bank may make advances upon collateral consisting
of large scale mortgages, provided such mortgages have
been insured by the Federal Housing Administrator, pursuant
to the provisions of Section 207 of the National Housing Act
(12 U. S. C. 1713), when the mortgagee seeking the advance
(1) is not a member of the Bank, (2) is a corporation, (3)
is subject to inspection and supervision of a Governmental
agency, and (4) its principal activity in the mortgage field
consists of lending its own funds. Advances on such collateral are not subject to the provisions and restrictions of
the Federal Home Loan Bank Act, but can be made only
upon the security of mortgages which, pursuant to the provisions of said Section 207 of the National Housing Act and
the Rules and Regulations of the Federal Housing Administrator, have been insured by such Administrator.
(A-B-C Book, C-165, July 17, 1937)
NOTES—Advances to members, prepayment.
Kegs. 42 (7), 43 (7) (b).
Bank
A Federal Home Loan Bank is authorized to accept at any
time payment on the principal of notes held by it for advances
made in an amount in excess of payments required by the
note and to waive the next succeeding payments of principal
due in an aggregate amount not exceeding such payment of
principal, even though the note does not expressly provide
for such prepayment.
(A-B-C Book, C-164, August 20, 1937)
105
HOME MORTGAGE—Defined.
F. H. L. B. Act, Sec. 2
(6).
Any instrument given to secure advances which makes any
real estate described therein, with or without the necessity
of a change of possession, specific security (either by reserving
title to such real estate or by creating a lien thereon, or by
any other method) for the performance of any legal duty or
the payment of any obligation either present or to arise in
the future, is a "mortgage" within the meaning of the Federal
Home Loan Bank Act, as amended, provided such instrument
is commonly used to secure advances in the community where
the institution is located and provided the instrument is of
such nature that the institution, in the event of a default,
could subject such real estate to the satisfaction of such legal
duty or obligation with at least the same priority accorded a
first lien in the community where the institution is located.
Any such mortgage upon a fee simple interest in real estate
or a leasehold interest in real estate (1) under a lease for not
less than 99 years which is renewable or (2) under a lease for
a period of not less than 50 years to run from the date such
mortgage was executed, on which real estate there is located
a dwelling or dwellings for not more than four families, is a
"home mortgage" within the meaning of the Federal Home
Loan Bank Act, as amended. The term "home mortgage"
as used in Section 2 (6) of the Bank Act was not intended by
Congress to be confined to instruments which are technically
mortgages. Congress intended that this term have a much
broader meaning, for Section 2 (6) of the Bank Act provides
that the term "home mortgage . . . shall include, in addition
to first mortgages, such classes of first liens as are commonly
given to secure advances on real estate by institutions authorized under this Act to become members, under the laws of
the State in which the real estate is located, together with the
credit instruments, if any, secured thereby." The generality
of such language shows an obvious intent on the part of Congress to include all types of instruments which are commonly
given to secure advances on real estate.
(A-B-C Book, C-080, September 29, 1937)
OFFICERS—Two offices, right to hold. Fed. Charter
E, Sec. 5; Fed. Charter K, Sec. 5; Fed. Bylaws
('33), Sec. 6; Fed. Bylaws ('34, '35), Sec. 7.
The same person may not hold more than two offices in a
Federal association. The following two offices may simultaneously be held under Charter E or Charter K of a Federal
association or any of the bylaws approved by the Board in
Federal Regulations: secretary and treasurer, vice president
and secretary, vice president and treasurer.
(A-B-C Book, C-100, September 29, 1937)
POWER—Insured institutions.
Ins.
Regs. 9-A, 22; H. O. L. Act, Sec. 5 (b); Fed. Charter
K, Sec. 8; Fed. Charter E, Sec. 14; F. H. L. B. Act,
Sees. 10, 10 (b); Bank Regs. 42 (7), 43 (7), 47 (6).
BORROWING
1. Insurance Eegulation 9-A, effective October 1, 1937,
applies both to Federal and State-chartered institutions
whether insured prior or subsequent to its adoption, the right
to amend, alter, or repeal insurance regulations having been
reserved to the Federal Savings and Loan Insurance Corporation by insurance regulations, as originally promulgated and
106
continuing in effect to the date of this opinion. If on October
1, 1937, an insured institution had already borrowed, in
accordance with legal provisions then in effect, more than the
limitations of this section permit, such insured institution has
not violated this section but may not thereafter borrow until
it may do so within the limitations of this section. The section expressly provides that a subsequent reduction in the
amounts paid in and credited on withdrawable or repurchasable shares, share accounts, certificates of deposit, and investment certificates do not cause prior borrowings, which were
made in accordance with this section, to be deemed a violation
of this section.
2. The maximum amount which an insured institution may
borrow within the limitations of this section must be determined by reference to the statutes (State or Federal) under
which the insured institution operates, its charter and bylaws
and State or Federal regulations to which it is subject. A
Charter K Federal association is authorized by Section 8 of
Charter K to obtain aggregate advances of not more than an
amount equal to one-half of its share capital on the date of
the advance. It has no power to obtain aggregate advances
from any source other than a Federal Home Loan Bank of
more than an amount equal to 10 percent of its share capital
on the date of the advance. Section 9-A is slightly more
liberal than the limitations upon borrowing power imposed
by Charter K, which must be observed. A Charter E Federal
association is authorized by Section 14 of Charter E to obtain
aggregate advances of not more than an amount equal to
35 percent of its share capital on the date of the advance.
It has no power to obtain aggregate advances from any source
other than a Federal Home Loan Bank of more than an
amount equal to 10 percent of its share capital on the date of
the advance. Such provision of Charter E, which must be
observed, is more restricted than the provisions of this section. The charter or bylaws or State law or regulations
under which a State-chartered insured institution operates
may limit the power to borrow more than the provisions of
this section, in which event such provisions must be observed
and this section is not a limitation upon the power to borrow
of such State-chartered institutions. If, in accordance with the
statutes under which the insured institution operates, its
charter and bylaws and regulations to which it is subject,
the borrowing power of an insured institution exceeds the
limitations of this section, such insured institution may not
borrow an aggregate amount exceeding one-half the amount
paid in and credited on withdrawable or repurchasable shares,
share accounts, certificates of deposit and investment certificates, whether or not its withdrawable or repurchasable
securities have been pledged to such institution by the holders
thereof. Not more than an amount equal to one-tenth of
the amount paid in and credited on withdrawable or repurchasable shares, share accounts, certificates of deposit and
investment certificates may be borrowed by an insured institution in loans with a maturity of one year or less from
the date of the borrowing from sources other than a Federal
Home Loan Bank. Sections 10 and 10 (b) of the Federal
Home Loan Bank Act and Bank Regulations 42 (7), 43 (7),
and 47 (6) authorize a Federal Home Loan Bank to make
advances to members or to nonmember mortgagees (approved
under Title II of the National Housing Act) for periods not
exceeding 10 years from the date of the advance and require
such loans to be amortized approximately 10 percent per year.
Federal Home Loan Bank Keview
Other lending institutions do not generally make such longterm amortized loans to insured institutions. Long-term
borrowing upon such an amortized basis is safer than shortterm borrowing which is repayable on an unamortized basis.
This explains the purpose behind the limitation upon borrowings with a maturity of one year or less to one-tenth of the
amounts paid in and credited on withdrawable or repurchasable shares, share accounts, certificates of deposit, and investment certificates.
(A-B-C Book, C-060-1, October 12, 1937)
MORTGAGE LOANS—What constitutes a first lien.
H . O. L. Act, Sec. 5 (c); Fed. Charter E , Sec. 11;
Fed. Charter K, Sec. 13; F . H. L. B. Act, Sees. 10
(a), 10 (b); Bank Reg. 42.
Loans on the security of first liens, as used in Section 5 of
Home Owners' Loan Act of 1933, Section 11 of Federal Charter E, and Section 13 of Federal Charter K, are loans upon the
security of any instrument (whether a mortgage, deed of
trust, or land contract), which instrument makes the real estate
described therein, with or without the necessity of a change of
possession, specific security (either by reserving title to such
real estate or by creating a lien thereon, or by any other
method) for the performance of any legal duty or the payment
of any obligation, either present or to arise in the future, provided the instrument is of such nature that, in the event of a
default, the real estate described in such instrument could be
subjected to the satisfaction of such legal duty or obligation
with the same priority as a first mortgage or a first deed of
trust in the jurisdiction where the real estate is located.
The term "first liens" wherever used in Home Owners' Loan
Act of 1933, the Rules and Regulations for Federal Savings
and Loan Associations, and in the charters and bylaws of
Federal associations, when referring to the security which a
Federal association is required to take when making loans on
improved real estate, should always be construed as hereinabove defined. Federal associations are required, by Section
5 (a) of Home Owners' Loan Act of 1933, Federal Regulations,
and their charters, to pursue the best practices of local
mutual thrift and home-financing institutions throughout the
United States. Such institutions, in their lending practices,
lend upon deeds of trust, upon mortgages (whether such mortgages under the law of the State of the operation constitute a
lien or a title), and upon other types of instruments (such as
land contracts and bond for title) designed to charge real
estate as security for obligations. These associations were
intended to operate throughout the United States, and the
term "first liens" is clearly intended not to be interpreted as
referring to the technical form of instrument, but to refer to
the dignity of the instrument which a Federal association
should obtain to secure obligations to it. The power of a
Federal association to lend its funds under Section 5 (c) of
Home Owners' Loan Act of 1933, Federal Regulations, and
its charter is a grant of power not only to lend money, but to
sell or otherwise dispose of real estate securing the purchase
price thereof by a mortgage, deed of trust, or any other instrument creating such a first security for the association upon
such real estate, and to enter into any other transaction which
results in the creation of an obligation to the association which
is secured by such a first security upon improved real estate,
either by the execution or assignment and delivery of an
instrument which creates such a first security.
December 1937
Provided a Federal association obtains such a first security
upon improved real estate as security for an obligation to it,
and such first security and the loan secured thereby comply
with the provisions and limitations of the Federal association's
charter and bylaws, and the statutes and regulations under
which it operates, such loan may be made to any person,
whether the person is the owner of the improved real estate, a
mortgagee of such improved real estate, or any other person,
provided the person is legally empowered to, and does, give
as security for the obligation, such a first security upon
improved real estate.
Any such instrument is eligible as security for an advance
from a Federal Home Loan Bank under the provisions of
Section 10 (a) of the Bank Act, when (1) the home mortgage
loan secured by it does not have more than 20 years to run to
maturity, (2) the amount due on the home mortgage loan at
the time of the advance does not exceed $20,000 in amount,
and (3) unless the amount of the debt secured is less than
50 percent of the value of the real estate securing the home
mortgage loan at the time the loan was made, the loan is not
past due more than six months at the time it is presented as
security for such an advance (Federal Home Loan Bank Act,
Section 10 (b), Bank Regulation 42), provided the instrument
is a home mortgage as defined in Section 2 (6) of the Federal
Home Loan Bank Act. For a further definition of "home
mortgage", as used in the Bank Act, see A-B-C Book Opinion,
C-080, entitled "Home Mortgage—Defined", in this issue of
the REVIEW.
(A-B-C Book, C-043-1, October 19, 1937)
R E A L E S T A T E OWNED—Book
value of.
Fed. Reg.
46.
Federal Regulation 46 prohibits a Federal association from
carrying real estate on its books for a sum in excess of the
total amount invested by the association on account of such
real estate. The regulation authorizes the inclusion of advances, costs, and improvements on accbunt of real estate in
the total amount invested by the association, but does not permit the inclusion in the amount invested of accrued but uncollected interest on the loan secured by such real estate
which has been acquired by foreclosure. If the extent that
it has depreciated in value be charged off, the books of the
association must reflect such charge-off. Under the regulation a Federal association may, therefore, capitalize real estate
owned at a sum not in excess of the total amount invested on
account of such real estate by the association, less any depreciation in value required by the Board to be charged off.
The total amount invested by an association on account of
any real estate owned is the cost of acquisition of such real
estate, plus the cost of improvements. When not acquired
through foreclosure, the cost of acquisition of the real estate is
clearly determined by the consideration paid and the expenses
of acquisition, which are easily determined, being usually in
the nature of sales commissions, if payable by the association.
If acquired through foreclosure, the cost to the association of
acquiring title to the real estate is the sum of the unpaid principal of the obligation owing to the association which was
secured by such real estate (including advances on account of
taxes or insurance premiums which, under the terms of the
obligation were added to the principal thereof, but excluding
accrued but uncollected interest), plus all expenses of the
association incurred in acquiring title to such real estate by
107
foreclosure, for example, the cost of title search, recording,
conveyancing, taxes paid to date of acquisition of title to
obtain title by foreclosure, and court costs. To the total cost
of acquisition of real estate as so determined, either by foreclosure or otherwise, may be added the total amount thereafter invested by the association on account of such property.
Such investments on account of real estate after acquisition
are generally described as improvements. All expenditures
on real estate for replacements, renewals, betterments, alterations and additions, which increase the value of the real
estate, other than expenditures incurred for repairs and upkeep of such real estate, are investments for improvements
which may be added to the amount invested to acquire title,
in establishing the total amount invested in real estate which,
under the regulation, may be capitalized. The regulation
does not require prior approval by the Federal Home Loan
Bank Board or any supervisory officer of such determination
of the total amount invested by the association which may
be carried on the books of the association, although such determination is subject to supervisory review. As to real
estate which was acquired by foreclosure, accrued but uncollected interest upon the obligation foreclosed may not be
capitalized under the regulation because such interest is not
an investment by the association on account of such real
estate, but is an item of anticipated income which has not
been received.
(A-B-C Book, C-053, November 1, 1937)
Resolutions of the Board
PROVISION
OF
APPLICATION
FORM
FOR
FEDERAL
SAVINGS AND LOAN ASSOCIATIONS WISHING TO MAKE
LOANS IN AMOUNTS NOT IN EXCESS OF 60 PERCENT OF
THE VALUE OF SMALL APARTMENT HOUSES: Adopted
November 4, 1937.
Whereas, Subsection (b) of Section 39 of the Rules and
Regulations for Federal Savings and Loan Associations permits Federal savings and loan associations to make loans in
amounts not in excess of 60 percent of the value of small
apartment houses when the members of a Federal association
at a legal meeting have authorized such loans and after
approval by the Board of such lending practice for such
association; and
Whereas, application in form satisfactory to the Board must
be made for approval of such lending practice: Therefore
Be it resolved, That any Federal savings and loan association
desiring to make loans in amounts exceeding 50 percent of the
value of small apartment houses may make application in the
following form for approval of such lending practice:
In support of our petition, we submit the following:
(1) A map showing the pertinent characteristics of the
specific areas in which the association desires to make such
loans.
(2) Evidence as to the use of and demand for 4- to 12-family
apartment houses in such areas.
(3) A full description of appraisal and property analysis
methods used by this association in connection with small
apartment house lending.
(4) Evidence of the ability of the association to make and
service such loans, including evidence of the ability of at least
one employee of the association based upon his training and
experience efficiently to analyze each such loan and to manage
the property if the mortgage is foreclosed.
Wherefore, petitioner prays that its application be approved
by the Board.
By
(President)
[SEAL]
By
(Secretary)
I,
, hereby certify that I am
the duly elected, qualified, and acting secretary of the abovenamed association and that the foregoing petition was submitted at a legal meeting of the members of said association
held on the
day of
, 19
,
and was legally adopted at said meeting; a quorum being
present. Said petition has been properly executed by the
duly authorized officers of the petitioner, and I submit this
certificate under my signature as secretary and under the
official seal of the institution.
I further certify that there were
shares eligible to
vote at such meeting; that
shares were present in
person; that
shares were present by proxy; that
shares voted in favor of and
shares voted against the
resolution as shown by the records of the institution.
[SEAL]
(Secretary)
A M E N D M E N T TO T H E
"
R U L E S AND R E G U L A T I O N S F O R
FEDERAL SAVINGS AND LOAN ASSOCIATIONS, REGARD-
ING FIDELITY BONDS: Adopted November 1, 1937;
effective immediately.
The Board amended subsection (a) of Section 12
by changing the last two sentences to read as
follows:
FEDERAL HOME LOAN BANK BOARD,
"The original bond shall be kept in the home office of the
association, and a true copy thereof shall be filed with the
Federal Home Loan Bank of which the association is a member. Each such bond shall contain clauses, in form approved
by the Board, empowering the Federal Home Loan Bank, in
case of any loss covered by such bond, to give notice thereof
to the surety within the periods limited therefor in such bond,
and requiring the surety to notify the Federal Home Loan
Bank before cancelation of such bond."
Washington, D. C.
The undersigned association respectfully petitions for
approval of its lending on small apartment houses in an
amount exceeding 50 percent of the value of such security in
accordance with subsection (b) of Section 39 of the Rules
and Regulations for Federal Savings and Loan Associations.
To comply with this amendment, the Board, on
the same date, added the following clauses to the
fidelity bond provided for in subsection (a) of Section 12 of the Rules and Regulations for Federal
Savings and Loan Associations:
4
'APPLICATION FOR PERMISSION TO MAKE LOANS ON SMALL
APARTMENT HOUSES IN AN AMOUNT EXCEEDING 50
PERCENT OF THE VALUE OF SUCH SECURITY
108
Federal Home Loan Bank Review
"Anything in the attached bond to the contrary notwithstanding, it is hereby understood and agreed that in cases of
any loss covered by the attached bond and discovered either
by the (insert 'employer', 'insured', or 'obligee') or the
Federal Home Loan Bank of
after the effective date of this rider, the said Federal Home
Loan Bank is empowered to give notice thereof to the (insert
'company', 'underwriter', or 'surety') within the periods
limited therefor in the attached bond."
"No cancelation or termination of this bond in its entirety,
whether by the (insert 'employer', 'insured', or 'obligee') or
the (insert 'company', 'underwriter', or 'surety'), shall take
effect prior to the expiration of 10 days from the receipt by
said Federal Home Loan Bank of written notice of such cancelation or termination, unless an earlier date of cancelation
or termination is approved by the said Federal Home Loan
Bank."
A M E N D M E N T TO T H E R U L E S AND REGULATIONS FOR
INSURANCE
OF
ACCOUNTS,
REGARDING
FIDELITY
Adopted November 1, 1937; effective
immediately.
The Board amended subsection (a) of Section 15
by repealing the last sentence thereof and by substituting the following:
BONDS:
"A true copy of such bond shall be filed with the Federal
Home Loan Bank of which such insured institution is a member or, if such insured institution is not a member, then with
the Federal Home Loan Bank of the District in which such
insured institution is located, as agent for the Corporation,
and either the original of such bond or a true copy thereof
shall be kept in the principal office of such institution. In
the event such insured institution is subject to State supervisory authority, such bond shall contain a clause, in form
approved by the Corporation, requiring the surety to notify
such Federal Home Loan Bank before cancelation or termination of the bond. In the event the insured institution
is not subject to State supervisory authority, the bond shall
contain clauses, in form approved by the Corporation, empowering such Federal Home Loan Bank, in the case of any
loss covered by such bond, to give notice thereof to the surety
within the periods limited therefor in such bond and requiring
the surety to notify such Federal Home Loan Bank before
cancelation or termination of the bond."
To comply with this amendment, the Board, on
the same date, approved the following clause to be
used in connection with the fidelity bonds required
to be obtained by State-chartered insured institutions subject to State supervisory authority:
"No cancelation or termination of this bond in its entirety,
whether by the (insert 'employer', 'insured', or 'obligee') or
the (insert 'company', 'underwriter', or 'surety'), shall take
December 1937
effect prior to the expiration of 10 days from the receipt by
the Federal Home Loan Bank of
of written notice of such cancelation or termination, unless
an earlier date of cancelation or termination is approved by
the said Federal Home Loan Bank."
Also, for Federal savings and loan associations and
State-chartered insured institutions nat subject to
State supervisory authority, the following clauses, to
be used in connection with the required fidelity
bonds, were approved:
"Anything in the attached bond to the contrary notwithstanding, it is hereby understood and agreed that in case of
any loss covered by the attached bond and discovered either
by the (insert 'employer', 'insured', or 'obligee') or the Federal
Home Loan Bank of
after the
effective date of this rider, the said Federal Home Loan Bank
is empowered to give notice thereof to the (insert 'company',
'underwriter', or 'surety'), within the periods limited therefor
in the attached bond."
"No cancelation or termination of this bond in its entirety,
whether by the (insert 'employer', 'insured', or 'obligee') or
the (insert 'company', 'underwriter', or 'surety'), shall take
effect prior to the expiration of 10 days from the receipt by
said Federal Home Loan Bank of written notice of such
cancelation or termination, unless an earlier date of cancelation or termination is approved by said Federal Home Loan
Bank."
Advertising
(Continued from p. 84)
different parts of the country. However, the important thing which association managers are gradually learning from past advertising experience is the
fact that home-financing institutions have the same
general problem as other financial institutions.
Public understanding of the services which they supply cannot be obtained by the same types of advertising which are used to promote the sale of ordinary
retail commodities. For this reason such an event
as announcement and payment of dividends constitutes one of the few regular opportunities which an
institution will have in a year to present in a vivid
and dramatic way the particular message which it is
trying to give its own community.
109
Directory of Member, Federal, and Insured Institutions
Added during October-November
I. INSTITUTIONS ADMITTED TO MEMBERSHIP IN
T H E FEDERAL HOME LOAN BANK SYSTEM BETWEEN OCTOBER 16, 1937, AND NOVEMBER 15,
1937 1
(Listed by Federal Home Loan Bank Districts, States, and cities)
DISTRICT NO. 1
CONNECTICUT:
Waterbury:
Waterbury Savings Bank, 14 Center Street.
DISTRICT NO. 3
PENNSYLVANIA:
Aliquippa:
Woodlawn Building & Loan Association, 385 Franklin Avenue.
DISTRICT NO. 4
GEORGIA:
LaGrange:
Home Building & Loan Association, 206 Truitt Building.
II. FEDERAL SAVINGS AND LOAN ASSOCIATIONS
CHARTERED BETWEEN OCTOBER 16, 1937, AND
NOVEMBER 15, 1937
D I S T R I C T NO. 1
MASSACHUSETTS:
Boston:
Metropolitan Federal Savings & Loan Association, 80 Federal Street
(converted from Metropolitan Co-operative Bank).
D I S T R I C T NO. 4
MARYLAND:
Baltimore:
Lafayette Federal Savings & Loan Association of Baltimore City, 1651
West North Avenue (converted from Lafayette Perpetual Building
Association of Baltimore City).
Hagerstown:
First Federal Savings & Loan Association of Hagerstown, 114 West
Washington Street (converted from Hagerstown Building & Loan
Association, Incorporated).
MAKYLAND:
Hagerstown:
Hagerstown Building & Loan Association, Incorporated, 114 West Washington Street.
DISTRICT NO. 5
OHIO:
Cleveland:
St. Hyacinth's Savings & Loan Association, 2968 East Sixty-first Street.
D I S T R I C T NO. 8
MISSOUEI:
Sedalia:
Sedalia Savings & Loan Association, 110 West Third Street.
DISTRICT NO. 10
KANSAS:
DISTRICT NO. 12
CALIFORNIA:
Los Angeles:
Occidental Life Insurance Company, 756 South Spring Street.
WITHDRAWALS FROM THE FEDERAL HOME LOAN BANK SYSTEM
BETWEEN OCTOBER 16, 1937, AND NOVEMBER 15, 1937
ALABAMA:
Decatur:
New Morgan Building & Loan Association, 508 Bank Street (removal
from membership).
MARYLAND:
Baltimore:
Assurance Permanent Loan & Savings Association of Baltimore City,
1644 East Baltimore Street (removal from membership).
Conway Street Building Association No. 1, 726 Washington Boulevard
(removal from membership).
Mayflower Savings & Loan Association, 21 South Broadway (removal
from membership).
Purity Building Association, 2612 East Fairmount Avenue (removal from
membership).
N E W JERSEY:
Nutley:
Franklin Building & Loan Association, 244 Chestnut Street (voluntary
withdrawal).
NORTH CAROLINA:
Cornelius:
Cornelius Building & Loan Association (voluntary withdrawal).
OHIO:
Cincinnati:
Citizens Building Association No. 2, 915 Clark Street (voluntary withdrawal).
* During this period 1 Federal savings and loan association was admitted to
membership in the System.
Alliance:
Industrial Federal Savings & Loan Association of Alliance, 20 Public
Square (converted from Industrial Savings & Loan Association).
TENNESSEE:
Humboldt:
Home Federal Savings & Loan Association of Humboldt (converted from
Home Savings & Loan Association).
CANCELATIONS OF FEDERAL SAVINGS AND LOAN ASSOCIATION
CHARTERS BETWEEN OCTOBER 16, 1937, AND NOVEMBER
15, 1937
MARYLAND:
Kansas City:
Inter-State Building & Loan Association, 717 Minnesota Avenue.
110
D I S T R I C T NO. 5
OHIO:
Baltimore:
Hopkins-Homestead Federal Savings & Loan Association, 2628 Harford
Avenue (charter canceled on account of merger with Belair-Hopkins
Federal Savings & Loan Association, Baltimore, Maryland).
III. INSTITUTIONS INSURED BY THE FEDERAL
SAVINGS AND LOAN INSURANCE CORPORATION
BETWEEN OCTOBER 16, 1937, AND NOVEMBER
15, 19371
D I S T R I C T NO. 3
PENNSYLVANIA:
Ambridge:
Economy Savings & Loan Association, 828 Merchant Street.
Monessen:
Monessen Home Building & Loan Association, 100 Sixth Street.
D I S T R I C T NO. 4
NORTH CAROLINA:
Rocky Mount:
New Home Building & Loan Association, 119 Tarboro Street.
Spray City:
Home Building & Loan Association, Boulevard Street.
D I S T R I C T NO. 5
OHIO:
Bedford:
Bedford Savings & Loan Company, 686 Broadway.
D I S T R I C T NO. 7
ILLINOIS:
Chicago:
Hoyne Building, Loan & Homestead Association, 2301 West Cermak
Road.
D I S T R I C T NO. 8
MISSOURI:
Sedalia:
Sedalia Savings & Loan Association, 110 West Third Street.
i During this period 9 Federal savings and loan associations were insured.
Federal Home Loan Bank Review
U. S . GOVERNMENT PRINTING O F F I C E : 1 9 3 7
FEDERAL HOME LOAN BANK DISTRICTS
_
•
BOUNDARIES OF FEDERAL HOME LOAN BANK OISTRICTS
FEDERAL HOME LOAN BANK CITIES.
OFFICERS OF FEDERAL HOME LOAN BANKS
BOSTON
B. J. ROTHWELL, Chairman; £ . H. WEEKS, Vice Chairman; W. H.
NEAVES, President; H. N. FAULKNER, Vice President; FREDERICK
WINANT, JR., Treasurer; L. E. DONOVAN, Secretary.
NEW
YORK
CHICAGO
MORTON BODFISH, Vice Chairman; A. R. GARDNER, President; JOHN
BARD WICK, JR., Vice President; E. H. BURGESS, Treasurer; CONSTANCE M. WRIGHT, Secretary,
DES
MOINES
GEORGE MACDONALD, Chairman; F. V. D. LLOYD, Vice Chairman;
G. L. BLISS, President; F. G. STICKEL, JR., Vice President-General
Counsel; ROBERT G. CLARKSON, Vice President-Secretary; DENTON
C. LYON, Treasurer.
C. B. ROBBINS, Chairman; E. J. RUSSELL, Vice Chairman; R. J.
RICHARDSON, President-Secretary; W. H. LOHMAN, Vice PresidentTreasurer; J. M. MARTIN, Assistant Secretary; A. E. MUELLER,
Assistant Treasurer.
PITTSBURGH
E. T. TRIGG, Chairman; C. S. TTPPETTS, Vice Chairman; R. H. RICHARDS, President; G. R, PARKER, Vice President; H. H. GARBER,
Secretary-Treasurer.
J. GILBERT LEIGH, Chairman; W. C. JONES, JR., Vice Chairmans
B. H. WOOTEN, President; H. D . WALLACE, Vic© President; W. F.
TARVIN, Treasurer; J. C. CONWAY, Secretary.
WINSTON-SALEM
TOPEKA
G. W. WEST, Chairman; E. C. BALTZ, Vice Chairman; O. K. LAROQUE,
President-Secretary; G. E. WALSTON, Vice President-Treasurer;
Jos. W. HOLT, Assistant Secretary.
W. R. Me WILLIAMS, Chairman; G. E. MCKINNIS, Vice Chairman;
C. A. STERLING, President-Secretary; R. H. BURTON, Vice PresidentTreasurer.
LITTLE ROCK
PORTLAND
CINCINNATI
T. H. TANGEMAN, Chairman; W. D . SHULTZ, President; W. E. JULIUS,
Vice President; A. L. MADDOX, Treasurer: DWIGHT WEBB, JR.,
Secretary.
INDIANAPOLIS
F. S. CANNON, Chairman-Vice President; S. R. LIGHT, Vice Chairman;
FRED T. GREENE, President; B. F. BURTLESS, Secretary-Treasurer.
F. S. McWILLIAMS, Chairman; B. H. HAZEN, Vice Chairman; F. H,
JOHNSON, President-Secretary; IRVING BOGARDUS, Vice PresidentTreasurer; Mrs. E. M. SOOYSMITH, Assistant Secretary.
Los ANGELES
C. H. WADE, Chairman; D. G. DAVIS, Vice Chairman; M. M. HURFORD, President; C. E. BERRY, Vice President; F. C. NOON, Secretary-Treasurer; VIVIAN SIMPSON, Assistant Secretary.
@FedFRASER