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Vol.3 FEDERAL HOME LOAN BANK REVIEW JANUARY 1937 ISSUED BY FEDERAL HOME LOAN BANK BOARD WASHINGTON D.C. Federal Home Loan Bank Review TABLE OF CONTENTS Page The potential real-estate boom 107 Appraisal methods and policies 110 New charter says "Go ahead" 114 Winter construction 116 How long will the house live? 118 Federal Home Building Service Plan 121 Indexes of small-house building costs 125 Monthly lending activity of savings and loan associations 127 Residential construction activity and real-estate conditions 129 November index of foreclosures in large urban counties 129 Federal Home Loan Banks 134 Growth and trend of lending operations 134 Interest rates on advances to member institutions 135 Federal Savings and Loan System 136 Federal Savings and Loan Insurance Corporation 138 Home Owners' Loan Corporation 140 Subscriptions to shares of savings and loan associations 140 Summary of operations of the Reconditioning Division 140 Foreclosures authorized and properties acquired 141 Directory of member, Federal, and insured institutions added during November-December. 142 SUBSCRIPTION PRICE OF REVIEW T H E 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 BUDGET 114887—37 1 Federal Home Loan Bank Board JOHN H. FAHEY, Chairman WILLIAM F. STEVENSON T. D . W E B B , Vice Chairman F. W. CATLETT H. E . HOAGLAND OFFICERS OF FEDERAL HOME LOAN RANKS ROSTON: B. J. ROTHWELL, Chairman; W. H. NEAVES, President; H. N . FAULKNER, Vice President; FREDERICK W I N A N T , J R . , Secretary-Treasurer. NEW YORK: GEORGE MACDONALD, Chairman; G. L. BLISS, President; F. G. STICKEL, JR., Vice President- General Counsel; ROBERT G. CLARKSON, Vice President-Secretary; DENTON C. LYON, Treasurer. PITTSBURGH: E. T. TRIGG, Chairman; R. H. RICHARDS, President; G. R. PARKER, Vice President; H. H. GARBER; Secretary-Treasurer. WINSTON-SALEM : G. W. WEST, Chairman; O. K. LAROQUE, President-Secretary; G. E. WALSTON, Vice PresidentTreasurer; Jos. W. HOLT, Assistant Secretary. CINCINNATI: H. S. KISSELL, Chairman; W. D . SHULTZ, President; W. E. JULIUS, Vice President; A. L. MADDOX, Treasurer; D WIGHT W E B B , JR., Secretary. INDIANAPOLIS: F. S. CANNON, Chairman-Vice President; FRED T. GREENE, President; B. F. BURTLESS, Secretary- Treasurer. CHICAGO: H. G. ZANDER, Chairman; A. R. GARDNER, President; HAROLD WDLSON, Vice President; E. H. BURGESS, Treasurer; CONSTANCE M. WRIGHT, Secretary. DES MOINES: C. B . ROBBINS, Chairman; R. J. RICHARDSON, President-Secretary; W. H. LOHMAN, Vice President-Treasurer; J. M. MARTIN, Assistant Secretary; A. E. MUELLER, Assistant Treasurer. LITTLE ROCK: J. GILBERT LEIGH, Chairman; B. H. WOOTEN, President; H. D . [WALLACE, Vice President- Treasurer; J. C. CONWAY, Secretary. TOPEKA: W. R. MCWILLIAMS, Chairman; C. A. STERLING. President-Secretary; R. H. BURTON, Vice President-Treasurer. PORTLAND: F. S. MCWILLIAMS, Chairman; C. H. STEWART, President; IRVING BOGARDUS, Vice President- Treasurer; W . p L CAMPBELL, Secretary; M R S . E. M. SOOYSMITH, Assistant Secretary. Los ANGELES: C. H. WADE,JChairman; M. M. HURFORD, President; F. C. NOON, Secretary-Treasurer. The Potential Real-Estate Boom 4 RE we to have another real-estate ^ \ b o o m ? Many experienced operators believe that it has already started. Opinions differ as to when it will reach its crest, and whether it will be followed by quick recession of market values with consequent losses or "freezing". Fully realizing that accurate prediction must necessarily be partly chance, it is nevertheless of some value to examine the known factors bearing upon the real-estate market. The mortgage lender must be guided by his opinion of the future; he has no choice about indulging in prophecy since it is one of his inescapable functions. Therefore, he must ask whether we are in a boom, how long it will last, and how high it will send market values. The REVIEW has sought the opinions of various well informed persons who feel very certain of the accuracy of their deductions. It is not the function of the REVIEW to bring in a verdict as to which of these opinions it considers best supported. On the contrary, an effort has been made to present each opinion clearly and vigorously, so that the reader may be the better able to weigh its value in relation to the facts with which he, personally, has to deal. On the affirmative side, discussion of the potential real-estate boom may appropriately be opened by Roy Wenzlick, author of the widely known pamphlet, "The Coming Boom in Real Estate". Mr. Wenzlick lists the following factors in substantiation of his position: 1. Business conditions are better. 2. New building has not kept pace with demolition and increased population. 3. Occupancy is already high and recovery is just starting. January 1937 4. New building will necessarily lag behind demand. Therefore, we may expect a sharp upturn in rentals soon. 5. This higher rental return will minimize foreclosures and further advance prices. 6. Mortgage money from private sources is now plentiful and will become more so. 7. As prices advance on existing buildings they will reach reproduction cost and the real building boom will develop. It is his opinion that the boom has already started and will reach its peak in the early 1940's. This is borne out graphically by a chart showing the fluctuations in real-estate activity and foreclosures in greater St. Louis. The chart, made by Real Estate Analysts, Inc., of which Mr. Wenzlick is president, covers the period from 1875 up to the beginning of 1936. It reveals that real-estate activity has followed very definite cycles of about 17 years duration. Mr. Wenzlick contends that because of the length of each cycle, the average individual cannot base his judgments on experience. That accounts for much of the emotional attitude that affects people during the extremes and it is a contributing cause of the cycles themselves. Mr. Wenzlick and all of the others make their predictions on the premise that world conditions will remain stable. A general war, for example, would make any predictions impossible. The opinion of an economist who specializes in building and loan operation and land economics follows: "The more I study Wenzlick's opinions, the more I am convinced that his book is not based on a complete study of the factors 107 involved and that it is, to some extent, based on a dogmatic belief that, because the real-estate prices have followed more or less well defined cycles in the last 30 years, they will continue to behave in the next 5 to 10 years in a manner similar to their behavior in the last cycle. At the outset it must be stressed that there are dwelling house properties all over the United States which, even if Wenzlick's forecast were true as far as he intends it to be, would not benefit by the 'coming boom'. Fully one-tenth and possibly a larger fraction of American dwelling house properties are in a class whose prices will not be controlled by the general trend. They can be demonstrated to be exceptions. "Undoubtedly, the existence of real-estate price cycles gives a strong basis for believing that the cycle behavior will be repeated, but we must go deeper into the question of price changes than the mere superficial charting of prices, and must study the basic economic laws which operated to make real-estate prices behave as they did. "At least two new important factors not present in previous cycles have entered the situation today which I believe have received inadequate study. These are: (1) high taxes on homes range, in some States, as high as 4 and 5 percent of market value; (2) increasing numbers of people, because of high taxes, are living in trailers which are literally houses on wheels, in order to escape the burden of State taxes. The important question of whether or not costs of State and municipal governments can operate to head off or delay 'the coming boom in real estate' has not been fully studied." A practical business man of long experience in the building and loan field says: "I think Wenzlick is conservative. The present indications are for an increase in urban real-estate values in the course of the next three or four years that will average something like 70 percent. It will be uneven, of course, as to localities. "The factors promoting the boom are plenty of cheap money, longer terms of 108 amortization, and rising national income. There is a housing shortage now and a growing sense of obsolescence; people are in the mood for more modern houses even if the present home is sound. In the next four years, the impression of obsolescence, whether real or imaginary, will be more important than the housing shortage in promoting construction. "There is grave danger that the present boom will be no more sound than any of those in the past. It will depend upon how much sense the lenders use in appraising, after values begin rising more rapidly. At present, the lenders are showing considerable common sense. The question is: Will they continue to do so? "Another real danger is the possibility that the same old 'jerry-building' game will start again as values rise. If it does, there will subsequently be a crash." A second economist says: "On the whole, I think that Mr. Wenzlick's analysis of the factors which create a base for a real-estate boom is well stated and sound. It must be recognized, however, that real estate cannot be taken to a distant market; therefore, conditions in one community may differ greatly from general conditions. "Because of the difference in local conditions I do not think that recovery will be uniform. There is more mis-held real estate today than in any other period of the Nation's history and in communities where a substantial part of the real estate is held by lending institutions, the recovery will be slower than in those localities where this condition does not exist. Recovery in general business is by no means uniform throughout the Nation. The Southwest is undoubtedly 12 to 18 months ahead of the Northeast section of the country in general business recovery and this condition will be reflected in real-estate recovery. "Due to labor conditions (a new factor in recovery and certainly a very important one), decentralization of large industries is indicated. This will have a retarding effect Federal Home Loan Bank Review on those cities which are now the homes of certain large industries. In the other direction, manufactured obsolescence (new materials) will be a great stimulation to building. This factor is being greatly underestimated. "I have hope that real-estate taxes in the future will be more fairly assessed. Overall limitation of real-estate taxation is gaining momentum. Over half of the States have either accomplished real-estate tax limitation or have organized aggressive campaigns to accomplish it. Further growth of sales taxes is indicated and this should help real estate. "Our present long-term real-estate mortgages will cushion the sharp break in realestate prices after the peak of the boom has been reached." A man who has been in the real-estate business since 1914 and who has had extensive experience in appraisal makes the following comments: "Mr. Wenzlick states the history of realestate activity with such fidelity to fact and familiarity with experience, that no practical realtor can fail to agree with his general statements. However, we do not know how far the Government will go in efforts to solve the housing problem, or how far and how fast private enterprise will go in this same field. In the relatively small details of accuracy of time projection and speed of trend, Mr. Wenzlick may be at fault, but the fault will be within the limitations and definitions he has set for himself. "If, as we are told, however, history repeats itself, Mr. Wenzlick's book can be accepted as an authoritative treatise, needing, of course, a common sense translation of its projections to any local situation. No rule has ever been devised, nor any forecast ever been made, which eliminated the necessity January 1937 for personal judgment related to specific situations. "That a boom will come again is certain. That it will be caused by factors which Mr. Wenzlick has discussed is just as certain. As a matter of fact, developments forecast by Mr. Wenzlick have already occurred, and are reported in practically every magazine or trade publication devoted to homefinancing and building statistics. "One factor that might seriously retard recovery of the real-estate market would be the dumping of large parcels of foreclosed properties on the market. This has not happened and there is good reason to believe that it will not happen. The various and numerous agencies charged with the responsibility of liquidating foreclosed properties are showing commendable wisdom and restraint. Their course is already a strong influence sustaining and encouraging recovery." Discussing only the dangerous elements in the predicted boom, a banker well acquainted with the real-estate field said: "We now have in this country stronger centralized control over credit than ever before. The original purposes of that control was to check depression; there is no reason, however, why the same machinery cannot be used to stop a run-away boom. The fact that we never have stopped a runaway boom causes many persons to make their calculations without considering such a possibility. I think that a sincere effort will be made to level off the business cycles and keep the peaks and valleys from reaching proportions that mean disaster and suffering. I am convinced that this can be done, and I believe that the men charged with the responsibility of controlling our credit are equally confident. I am, therefore, optimistic." 109 Appraisal Methods and Policies This is the third in a series of articles. 4 N ESSENTIAL step in the appraisal of f\^any residential property is the apJ praisal of the neighborhood and of the economic background of the community. The value of building sites and, to a lesser extent, of the improvements upon them is largely a social value. That is to say, their value is derived from the social and economic environment in which they exist. Why is land in one section of a city valued at $10 per front foot, while in another section the value is $1,000? Or why may there be a similar difference between the price of a piece of land a century ago and its price today? Obviously it is not due to any difference in the land itself and only in a very small degree to improvements that may have been made upon the land. It is the result of the growth and development of the community in which the land exists, the increase in population, the establishment of new industries, the addition of new transportation facilities, and a host of other such changes. Since real-estate values are so directly dependent upon the neighborhood and the surrounding community, the impossibility of arriving at sound appraisals by considering each piece of property as an isolated unit is readily apparent and needs no emphasis. Every appraiser takes into consideration to some extent neighborhood and community influences, but all too often only in a vague, haphazard way. The neighborhood and the community should be studied and analyzed as care110 fully and systematically as the particular residence which is being appraised. This analysis does not need to be repeated, of course, with each separate property appraisal. Rather it should be a continuous process. The alert appraiser is constantly watching for changes and developments that will affect property values in the community as a whole or in particular neighborhoods. The appraiser who is thoroughly "on the job" will thus undertake a particular appraisal with a large part of the task already completed. ECONOMIC BASIS OF THE COMMUNITY BY THE community is meant here the town or the city and surrounding suburban territory, or what is commonly termed the metropolitan area or district. Property values in any community depend upon the income of the people of that community. The source and stability of the income are thus important factors for the appraiser to consider. Is the income derived from the exploitation of a depleting natural resource, as is the case with mining, lumber, and oil towns? If so, some time in the future the income wdll decline and perhaps vanish and property values will dwindle away. The appraiser must form some estimate as to how soon this is likely to take place. Is the town or city chiefly a trading or commercial center? If so, what about the source and stability of the income of the territory which it supplies? Towns in the Federal Home Loan Bank Review drought-stricken areas of the Middle West have suffered along with the farmers of that territory, as their income has come from the same source. Is the community's income derived from industrial production? In such a case, is it predominantly from one industry or from a number of well-diversified sources? Are the industries declining, expanding, or wellstabilized? All such questions have a bearing upon property values in the community. Various objective indications of the economic well-being of a community are usually available to the appraiser. Population figures are one of the most significant items to note. A declining population is almost certain to result in declining property values. If the population has been rapidly increasing, a slackening of the rate of increase is sometimes sufficient to react upon realty values, as they may have come to be based on the assumption that the rapid increase would continue indefinitely. Trade, industrial, and financial statistics are also significant data for the appraiser. The volume of output of local industries, the number of employees, bank assets, daily bank clearings or debits to individual accounts; all such statistics that are available should be collected and studied. Comparisons of local data with that from other cities or from the country as a whole may be helpful in understanding local conditions. Of more direct significance to the appraiser are the real-estate data that are available in most cities, such as building permits issued, mortgages filed, canceled or foreclosed, and realty sales. In many towns and cities annual real-estate surveys are conducted by interested organizations that are of great value in revealing the trend of the market. The prediction of the economic future of a community is admittedly a very difficult problem but it is one which the appraiser cannot avoid. Since the value of any prop- January 1937 erty is an estimate of the present worth of the future income which it will yield, appraisal necessarily involves prediction. If the appraiser does not make his own predictions upon the basis of his own analysis, he is simply adopting, perhaps unconsciously, the blind, unreasoning predictions of the general public. Some large mortgage-lending institutions have excluded whole communities and areas from their lending territory because of their uncertain economic future. A local association operating under such conditions cannot refuse to lend entirely unless it wishes to liquidate and go out of business, which perhaps in some cases might be the wisest policy. But assuming that the association wishes to continue as a going concern, the opinion of the appraiser as to the economic future of the community should reflect itself both in the appraisals and the length of time for which loans are made. IMPORTANCE OF THE NEIGHBORHOOD IN APPRAISING IN RECENT years there has been an increasing realization of the importance of giving proper consideration to the effect which the physical, social, and economic environment of a property has upon its value. One of the most common and serious errors in appraising is the attempt to evaluate a property as an isolated unit. In stressing this point, one of the leading appraisers of the country has declared: "The competent appraiser does not reach his conclusion by valuing land, concrete, lumber, labor, and brick by themselves, but by the evaluation of environing factors, trends of growth, stability of districts, taxation and assessment burdens, historical backgrounds, and the effectiveness of purchasing power. His investigations must include the social and income level, the results of wise or unwise zoning or deed restrictions, the sufficiency and cost of utilities and transportation." 111 The value of any residential property depends upon its appeal as a place in which to live and make a home. A large part of this appeal is derived from the character of the neighborhood in which the property is located. Accordingly, the neighborhood must be studied as a part of the appraisal process. This study should be of a twofold nature, both a comparison and a forecast. The appraiser should carefully analyze and compare the neighborhoods of his territory to determine their relative desirability in terms of dollars. As he is making the appraisal as the basis of a long-term loan, he is also compelled to make a forecast of the neighborhood trend. Suggestions for standards and methods to be used in making a neighborhood survey and analysis are to be found in the series of articles in the REVIEW, beginning in August 1935, concerning "Neighborhood Standards as They Affect Investment Risk", in the article "Security Maps for Analysis of Mortgage Lending Areas", in the issue for August 1936, and also in the Underwriting Manual of the Federal Housing Administration. The remainder of this article will discuss some of the significant neighborhood factors which an appraiser should take into consideration in appraising any property. UNITY OF THE NEIGHBORHOOD A NEIGHBORHOOD that is an entity in itself, that has geographical, social, and economic boundary lines that distinctly separate it from adjoining sections, is most impervious to deteriorating influences. If two neighborhoods almost imperceptibly merge into one another, it is almost certain that the quality of the better neighborhood will be affected adversely by its close contact with the poorer. Distinct boundary lines, such as arterial highways, streams, or ravines help to preserve the unity and quality of a neighborhood. A neighborhood should have a fairly high degree of self-sufficiency. Its residents 112 should be able to supply most of their everyday, recurring needs within the neighborhood itself. This requires adequate shopping, recreation, amusement, church, and school facilities. A certain degree of uniformity within a neighborhood is conducive to its unity. Social differences so great as to create a gap between the members of a community are undesirable, as a wholesome community spirit cannot flourish in such an atmosphere. Neither can the most attractive physical appearance be presented if there are too great differences between the houses of the neighborhood. A $25,000 home built in a district of $5,000 homes immediately becomes an economic misplacement, and is subjected to severe penalties in the process of evaluation. PHYSICAL CHARACTERISTICS OF THE NEIGHBORHOOD THE topography of a neighborhood is frequently an important factor in determining its desirability. A flat, low section may be subject to floods, fog, mosquitoes, or oppressive humidity. Hillside locations may offer an undue exposure to the elements, in some cases, and protection against them in others. In general, the topography should be such that it provides good drainage, free circulation^ of air, availability of sunshine, and accessibility to other sections. Numerous other physical characteristics of the neighborhood should be noted, such as the street plan, the size and dimensions of the lots, the amount of trees and shrubbery, and the condition of the alleys. All such factors that affect the utility or appearance of the neighborhood should be considered in its rating. PUBLIC UTILITY AND MUNICIPAL SERVICES IT SHOULD be an invariable rule to lend only on property in a neighborhood or subdivision in which necessary utilities have been installed and are immediately available, Federal Home Loan Bank Review except in towns or villages where such services do not exist. Occasionally a poorly financed subdivider attempts to secure the funds necessary for the installation of the utilities from the first payments on the lots. The future of a subdivision in such a condition is so very uncertain that it should be definitely rejected as suitable loaning territory. The quality or reliability of the utility services offered sometimes varies with different sections of a city. In particular, the gas and water pressure in some neighborhoods is so low that in periods of heavy use the supply becomes very inadequate. Such a condition is an inconvenience and in the case of low water pressure increases the fire hazard. Suburban areas frequently have different utility rates than the city proper and in some instances the difference is sufficient to affect real-estate values. For example, a difference in utility bills of $10 per year, if capitalized at the rate of 5 percent, would cause a difference in value of $200. That is to say, under those conditions a purchaser could afford to pay $200 more for the property which was subject to the lower rates. The adequacy of the sanitary and storm sewers is an important factor in neighborhood rating. The flooding of basements with every heavy rainfall appreciably lessens the value of the property so affected. Since a neighborhood cannot be wholly self-sufficient it should have adequate means of transportation to the main business and shopping center and to other sections of the city. The adequacy of the transportation facilities available must be judged in relation to the needs of the community. A neighborhood in which the residents belong to the lower-income groups has a greater need of public transportation facilities than does a more wealthy section. In a community of expensive homes, the residents may depend almost entirely upon their automobiles and have little need of a streetcar or other common carrier. However, even in such a case, the problem of RESTRICTIONS ON THE USE OF THE PROPERTY T H E zoning, building, and deed restrictions to which a property is subject should be carefully investigated by the appraiser. A building and zoning ordinance should provide for: (1) the most profitable use of the property, (2) reasonable restrictions upon the type of building, and (3) a proper proportion between the land area and the building. Ordinances that accomplish these results are favorable factors in the valuation of the property. Not infrequently, however, especially in rapidly developing communities, the ordinances prevent property from being devoted to its highest use or throw it open to deteriorating influences. If they have been drawn with but little study of the actual needs of the city or of its probable future development or if they run counter to the normal development of the community or do not have strong public approval, the chances are they will be nullified by lack of enforcement or by legal change. Deed restrictions are commonly less easily changed and more readily enforced than zoning regulations and so, if properly drawn, offer more effective protection than the latter. The importance and value of legal restrictions vary with the type of community. Greater importance should be attached to them in large or rapidly growing communities than in small or well-established centers. TAXES, ASSESSMENTS, AND INSURANCE RATES As TAXES are one of the costs of ownership, their amount is one of the factors which determine the value of property. If they have been fairly well stabilized for a period of years, realty values will have become adjusted to them and the appraiser need concern himself only with possible (Continued on page 120) 113 January 1937 114887—37 servant transportation may render the services of a common carrier highly desirable. 2 New Charter Says "Go Ahead" I N THE December issue of the REVIEW, an outline was presented of principal points wherein the new charter and regulations for Federal savings and loan associations differ from the old. An explanation of the basic reasons for these changes may be of interest. They were suggested primarily by the belief that the time is ripe to encourage greater growth, or, more specifically, larger units. The savings and loan field has been hampered from the beginning by a tradition that quite small units are so natural as to be almost inevitable. Yet this has never been conducive to strength, nor to the greatest service. At its peak the building and loan industry commanded total resources of about $10,000,000,000, a fact which few persons realized for the simple reason that a large majority of the individual associations were small. Many of them were entirely too small to perform their function adequately in the communities they served. The new charter and regulations, viewed as a whole, are intended to serve as a "go ahead" signal; to clear the way for the greater growth that is so obviously possible as the national income rises. How will this purpose be effected? First, by a simplification of procedure and terms so that the thrifty citizen will have a clearer understanding of what the local savings and loan association is offering him. Second, by a simplification of procedure and terms regulating the lending operations so that a larger measure of control rests in the local management, without sacrificing any of the fundamental principles of supervision that 114 are wholesome and necessary. The purpose has been to eliminate only the "strait-jacket" regulations, and to qualify and reduce the ones that have been demonstrated to be somewhat too obstructive relative to their instructive value, since the latter was all that was ever desired, and all that has constructive value. Under the head of simplification for the purpose of attracting investors, the most important change is a reduction from four types of investment to two types. All of the descriptive terms of the various types of investment are puzzling to the ordinary investor and the fewer the better provided they serve to offer what he wants. Two are deemed sufficient. Next, there is the simplification of terms. For years it has been recognized that the reference to "stock" in thrift associations is undesirable. It has been detrimental to growth and popular favor. Therefore, in the new charter a different concept of the shares has been employed, and all reference to stock or stock subscription has been eliminated. Investments, or savings, are now "share accounts", and are evidenced by passbooks with membership certificates attached, or by certificates only. Control by the membership is retained by giving each member one vote for each $100 or fraction thereof invested in the association. In the broad search t h a t ' has been in progress for three years to uncover and examine every practice that has acted as an impediment to growth, it was found that the system of fines, fees, and forfeitures had left a trail of dissatisfied investors. Even Federal Home Loan Bank Review in cases where an honest effort had been made to acquaint the customer with all of the terms of his contract, he was still left puzzled, and sometimes bitter. As an additional incentive to growth and a bar to future misunderstandings a clause was inserted in the new charter prohibiting any penalty for becoming, remaining, or ceasing to be a member of the association. It is not anticipated that this elimination of penalties will affect the savings as longterm investments, and it is definitely thought that such an assurance of equality of treatment will be reflected in goodwill. It was agreed that management should be given as much freedom of action as possible in determining internal policies. For example, restrictions as to which officer or how many should sign membership certificates, checks, etc. are eliminated and the board of directors is given power to act with freedom on such matters. Other similar, restrictive features are either broadened or eliminated entirely to the end that management will have, under the new charter and by-laws, an opportunity to display versatility and initiative. However, even with these obstacles to the attraction of funds removed, the association still must compete in the open market for loans against all other lenders. The purpose of the new charter is to give at least equality and such advantages as are possible, consistent with sound mortgage policy. This broad, general purpose is evidenced by the variety of mortgage loan plans authorized by the new charter, and the lending power granted a Federal association under its terms. One of the anticipated results of the growth that should be stimulated by the new charter and regulations is the earning power that will give management a new dignity. There is need to attract the high- January 1937 est type of ability by offering real careers. The savings and loan field requires ability of a specialized type. Without study this ability is not developed. But the rewards have, in entirely too many institutions, not justified the effort to become a specialist. That fact has always been one of the weakest points in the" building and loan set-up. There is such a definite field for this type of thrift and lending institution, however, that inability to pay adequate wages for management is unreasonable. The remedy is larger units. And the means to build larger units is simplification of procedure and terms; more flexibility for management; in short, the ability to attract more money, and the power to lend it in broader markets on more equitable, competitive terms. THIS ADVERTISEMENT OF THE GEM CITY BUILDING AND LOAN ASSOCIATION IS REPRINTED BECAUSE IT IS AN EXCELLENT EXAMPLE OF VIGOROUS PUBLICITY. Continued Progress— Twenty-two Hundred new accounts have been opened at our office within the past year—and Two Million Dollars of new money received from individual shareholders. During this period eight hundred loans have been made to home owners amounting to about two million dollars. Our insured accounts provide Security, Profit, and Convenience for the investment of Savings, —and Home Owners find our loan service complete, simple and economical. Our service is based on the experience, of fortynine years of operation and we invite your account either as borrower or shareholder. I j I ; j Gem City Bldg. & Loan Assn. "100% Safety—Since 1887" 6 North Main Resources Orer Thirteen Millions ot Dollars 115 Winter Construction W ITH the revival of building activity, it is pleasing to note that the campaign for more winter construction is again receiving attention. Encouraging progress had been made during the 1920's toward acquainting the public with the advantages of off-season construction, but the efforts in this direction quite naturally diminished during the depression period. Now it is time to renew this educational campaign. Human beings, like the birds, think of building in the early spring. The birds, however, are more practical since they also occupy their nests during the early spring. As a rule, human beings do not. They merely make a beginning toward the creation of new homes. If they wish to occupy their new homes during the early spring, the time for building is during the winter. The reasons for spring construction are emotional and traditional, rather than practical. The spring months of the year do not bring especially favorable weather conditions. If these were the principal consideration, the late summer and early fall would be better seasons for building. As a matter of fact, the ancient difficulties in the way of winter construction have been completely overcome, and this fact should be made a matter of common knowledge. Precautions against frost damage to masonry and concrete are now well known to the building industry. Indeed, winter construction has already been so well tested that the lessons of experience are now written into numerous building codes. That phase of the subject scarcely requires discussion. What is vastly more important to the prospective home builder is a clear under116 standing of the financial and other direct advantages in avoiding the rush season. We already confront a mild shortage of skilled labor in the building trades with a certainty that it will increase. No such shortage exists during the off-season. It will be wise for us to recall that during 1928 and 1929 many builders found it necessary to pay extra for materials or labor or both in order to complete their jobs on schedule. Not only did that disturbing factor enter to upset previous estimates of costs but in many instances work had to be abandoned for indefinite periods, due to lack of facilities, or to excessive costs. We may be approaching another such period. If so, it would be absurd not to be foresighted since the remedy is clear, and well known to be feasible. If material on the general subject of winter construction is desired for use in your local newspapers, it is available. The newspapers have always been willing to cooperate in educating the public on this subject. If you do not know where to get such material, write to the FEDERAL HOME LOAN BANK REVIEW for information. Seasonal fluctuations in building activity constitute a principal cause of unduly high prices, and unpredictable prices, both of which are a sore trial to all concerned. Serious delay in the completion of a job assumes the form of additional expense even though prices for labor and materials should not change. The working time is a dead period; the bulding begins to earn only after it is occupied. And this fact is of importance to the holder of a mortgage. Lenders, therefore, have the same common interest as owners and builders in leveling Federal Home Loan Bank Review building industry merely steps into line the peaks and valleys of the building inwith numerous other American businesses. dustry. The electrical industry has opened vast new Under present conditions there is a lendmarkets for its output by offering lower ing season dictated by the building season. night rates for power. The plant has to be During the rush months, appraisers, inworking anyway to supply light; it might spectors, indeed the entire organization, just as well be working at something nearer must work under pressure. And this is folcapacity. Likewise telephone service has lowed by entirely too large a portion of the to be maintained during the night; lower year when there is not enough work to night rates for long keep the staff busy. distance calls level Nevertheless the off t h e daytime staff must be main(Plan to peak to some extained, just as cartent and cut down penters m u s t eat the loss from exduring their i d l e cessively low activm o n t h s . The anIJOUTI komt, ity during the offswer to this problem peak period. The has always been to automobile indusearn enough during bty bu'dWtng. now, \p\xtt <jet try, b y changing the busy season to the date when the carry the burden of lowai lohon. and matentai ca&ti new models appear, the idle season. For If you wait until Spring, you will find a shortage of labor—plus higher buildhas had remarkmany decades n o Own the ing material costs, and perhaps higher able s u c c e s s in other solution was Home You home-financing costs. Pay For! achieving, almost possible. But with Come in soon and browse thru our comi m m e d i a t e ly, a an easy remedy at plete library of homes at your leisure steadier distribu—you will derive much inspiration for hand every effort your new home. tion with conseshould be made to Our Home Building Service department quently wholesome employ it. offers an expert supervisory service that H'AVo effects upon employco-ordinates our financing services with •nd up, As winter condepending ment. you, your architect and your contractor.. struction increases— on desirability Let us show you how we can help you A building conand it certainly will build NOW. tractor once gave a do so—we s h a l l vivid exposition of eventually confront snvinGS nnn toon nssocinnon the fundamentals of a problem in apthis whole subject 46 Y«ar« of Stability • 17th »t Stout • Keystone 7165 • Denver praisal that may be by asking the prostated briefly as folprietor of a 1-man lows : A b u i l d i n g much he would charge constructed during April, May, and June barber shop how contract for 1,000,000 cost $10,000. It could have been constructper shave on a ed during the preceding winter for approxishaves. The barber, after considering the mately 10 percent less and it probably subject, answered: "If you want them one could be constructed during the coming right after the other for eight hours a day winter for the same amount. What is it until I finish the contract, I'd let you have really worth, from the point of view of the them for seven cents apiece. But if you lender? want them all at the same time, I'd say, off In facing the problem of unreasonably hand, about $20 apiece; and then I'd probacute seasonal fluctuations in activity, the ably lose money." BUILD TftADt MAK* January 1937 117 How Long Will the House Live? T struction cost might seriously affect the life expeclancy^ of the structure. It might also affect the size of the room, or its convenience, or its appearance and desirability. There was fairly general agreement that it would not be easy to save even this small sum in construction costs, granting a willingness to skimp. Assuming then, that the construction should first be sound as to plan, materials, and workmanship, without too much penny-pinching economy, how long may it reasonably be expected to last? Certainly the house must live longer than the mortgage or the whole project becomes unsound. At this point enters the question of whether the buildings will be obsolete after 20 or 30 years even though still firmly weather-proof. In other words, do styles in housing change in such a manner as seriously to affect their mortgage value? Some of the housing projects discussed in Philadelphia carry mortgages that are to be amortized in 30 to 50 years. There is the hope of more 50- and even 60-year mortgages. Housing officials are asking for them with the firm conviction that they are sound, and are endeavoring to convert private capital to this view. Their argument is certainly worth considering; again, let it be added, because it has some bearing upon all housing, and the financing thereof. The general trend is toward longer term mortgages for the individual home owner also. The argument for half-century amortization as a sound financial operation may be summarized as follows: 1. The principles of good housing seem scarcely to change at all; such evolution as is unmistakable covers centuries rather 118 Federal Home Loan Bank HE reasonable life expectancy of wellplanned and soundly constructed housing was a subject of prime importance in the discussions at the convention of the National Association of Housing Officials in Philadelphia early in December. While these officials were mainly concerned with the larger housing projects comprising many residential units, the fundamental problem of life expectancy is not greatly different as it applies to all sorts of housing. For that reason, the views of these experienced persons will be of broad general interest. No less than the individual home owner or the individual lending agency holding a mortgage, the housing authorities, working on a large scale, have to consider the soundness of the security based upon residential construction. If it is not sound, they cannot hope to raise money. This problem becomes acute for them because low interest rates and amortization over relatively long periods of time constitute the main hope for cheaper housing; and they are concerned almost exclusively with housing for persons in the lower income bracket. They have found that cheaper materials and cheaper methods of construction are not as helpful as low interest rates and long-time amortization. This may be astonishing to persons of limited experience. One might readily assume that major economies would come in the costs of construction, rather than the financing. However, some of the experts who discussed this subject pointed out that a difference of $100 in the cost per room of a dwelling unit would mean, in terms of rent, a saving of only a few cents per month. At the same time, this saving of $100 in con- Review than decades. This contention is documented by citing examples of good housing in Tidewater, Virginia, and New England. Special reference is made to houses that are 200 years of age, or older, and are as desirable today as when new. 2. For a clear understanding of this point, it is essential to draw a definitive line between the house, itself, and "the gadgets". The latter term was used to include all modern conveniences, among them plumbing which is, after all, not so very new. But in relation to a house upwards of 200 years of age, plumbing, of course, is new. One of the architects said that modern plumbing is about the only major revolutionary development in housing during the past two centuries, and he points out that it can be installed in a sound structure of any age. Likewise electrical fixtures and central heating can be installed. 3. The house, considered entirely separately from the "gadgets", should have rooms of a proper size for the uses for which they are intended. And these rooms should be conveniently arranged with reference to each other. There should be ample light and ample ventilation. It goes without saying that the roof and walls and floors should be firm. What we are dealing with here, mainly, is the problem of whether the house will become obsolete in spite of its excellent condition. To this question, the experts answer with an emphatic "No!" Some of them will even go so far as to say that the basic principles for comfortable dwelling construction are not greatly different from what they were in ancient Rome. 4. The architectural lines of a building that pleased the eye a century ago are still pleasing. They can vary greatly but if they were ever good they will remain good. For example, persons most familiar with the California bungalow type of frame construction will readily see the beauty of a Dutch colonial house in New Jersey although the two vary greatly. For the purposes of this discussion we completely leave January 1937 out of account all shoddy or ugly buildings. It was pointed out that there are many excellent dwellings in this country more than 100 years of age that are eagerly purchased while others half that old are permitted to crumble to decay because they were ugly at every period of their existence. The contention that is of greatest importance here is that this verdict of ugliness rests not upon fickle changes of fashion or fad but upon basic concepts that remain reliable to guide us for the future. Fad and fashion generally lead to what is called "gingerbread" decoration. Simple lines stand the test of time far better. 5. The reasonable size of rooms designed for occupancy by human beings scarcely changes at all. If one attempts economy by cutting down floor space or number of rooms, there is just as much danger of producing an undesirable house now as at any time in the past. If the space is generous it constitutes luxury now just as always in the past. Light and air remain essential, and in just about the same quantity. In other words, the house, itself, has fixed standards by which its present and prospective values may be judged. If these standards are met, the house is a good risk for a loan, and the amortization period can be estimated with reference to the life expectancy of the materials. In the foregoing five points the reader will note that there is no reference to neighborhood deterioration. That is because the sort of housing specifically under discussion in Philadelphia would constitute its own neighborhood. The speakers had in mind housing projects of hundreds or even thousands of dwelling units. The individual would have to take into consideration as a separate matter the question of the neighborhood. But it is none the less interesting to have the opinion of thoughtful and experienced persons that styles in good housing are a negligible factor with no re119 lation whatever to styles in millinery or haberdashery. Evolution is slow and basic principles remain. In connection with this discussion of basic principles, it will not be amiss to remind the reader of the ancient theory that when any article, whether a house or a ship or a tool, is excellently designed to meet the purposes for which it is to be used, it will have beauty. One need not worry unduly about the latter. The ugly ship is quite likely to be hard to handle in the water, and slow. The early automobile was of ridiculous appearance; likewise it was not a very good automobile. The same can be said of the early steam railway locomotives. They caused the populace to laugh then, no less than we now laugh at a picture of one. They were not very good locomotives. On the other hand, when Brooklyn Bridge was completed those who had dreamed it, and planned it, and constructed it, were amazed at its beauty. All they had been trying to do was build a good bridge. They succeeded, and it turned out to be a beautiful bridge as well. That was the public's opinion in 1876, and there has been no change in the verdict. Appraisals property values. An excessive number and amount of tax delinquencies are disturbing factors in the real-estate situation, as they are likely to lead to foreclosures and forced sales. Special assessments differ from taxes in that they affect only a particular section of a city and are levied for a definite period of time and for a definite amount. Therefore they have a direct and easily calculable effect upon the relative property values in the different sections. The net income from the property is decreased by the amount of the assessment as long as it is in effect, with a corresponding effect upon the value. In some cases each individual property is made security for an entire bond issue and cannot be released from the special assessment lien until the entire debt is canceled. Such a situation, of course, greatly reduces the credit value of the property. Insurance costs are rarely large enough to affect materially the value of property but occasionally neighborhoods differ sufficiently in respect to fire hazards and fire protection to make an appreciable difference in insurance rates, with some slight effect on property values. (Continued from p. 113) future changes in the rate. Occasionally, property in one section of a city will be valued for tax purposes at more nearly its full worth than in other sections; separately incorporated suburbs frequently have tax rates considerably different from those of the city proper. Where such differences exist they should be taken into consideration by the appraiser. Taxes in themselves tend to decrease the value of the property by the capitalized amount of the tax, although the benefits derived from the expenditure of the tax revenues may partially or wholly counteract this decline. The general financial condition of the city will generally presage any immediate change in the tax policy. If the trend of expenditures has been steadily upward, if the budget is chronically unbalanced, if the indebtedness is heavy, the probable result will be an increase in taxes, a reduction of municipal activities or the charging of new or increased fees for certain services, such as garbage collections and water supply, all of which will adversely affect 120 Federal Home Loan Bank Review Federal Home Building Service Plan T HE Federal Home Building Service Plan, approved September 25, 1936, by the Federal Home Loan Bank Board, is now in operation in three cities and will be functioning shortly in seventeen more. The nature of the Plan calls for local organization and it, therefore, cannot be installed on a national scale instantly. The program operates essentially as a cooperative service between local lending agencies and local architects and technicians for the benefit of the home builder with only such control by the Federal Home Loan Banks and the Federal Home Loan Bank Board as is necessary to insure that the service offered will be competent. The Plan was described in detail in the January and April 1936 issues of the B E VIEW. Briefly, it proposes to equip members of the Federal Home Loan Banks, at their option, to offer home builders a positive means of obtaining good design and sound construction through the use of a complete home building service. The service comprises advice on sound financing by the member institution, and technical advisory and supervisory facilities supplied by cooperating architectural groups and experienced technicians. The objectives of the Plan can be visualized best if examined from the point of view of the prospective home builder. Let us assume that he comes to the office of a member association to seek advice and discuss a loan. He may have no definite type of house in mind or he may bring a sketch indicating the sort of house he wants. The manager of the association would have on hand a variety of plans for small houses that had been supplied by the local smallJanuary 1937 114887—37 house architectural service as suitable to local conditions. In all probability, the prospective borrower would find among these plans one that met his needs. At any rate, he ought to find one requiring only very slight changes to give him exactly what he desires. Before final commitment for a loan is made, the architect supplies complete working drawings and specifications, and definite cost figures determined by competitive bidding from qualified contractors. Here, it will be observed, is the machinery for bridging the gap between an inquiry and a loan, quickly and easily. Or, if the prospective home builder brings in complete plans and specifications, the technical service can check the adequacy of design and specifications, and furnish independent supervision of construction. Many member institutions heretofore may have hesitated to make contruction loans because of lack of facilities to handle these technical determinations. It may do so with reasonable safety when the project is worked out under home-building service procedure; but if not desiring to make a construction loan, at least it can arrange to handle the mortgage loan at the conclusion of construction. In many localities, particularly in the larger cities, the majority of small houses may be built for sale by speculative or operative builders. Usually the lending institution has no part in such an operation until a mortgage loan is requested for the home buyer. Action on such loan must be determined from examination and appraisal of the finished building without knowledge gained from independent technical inspection during construction. It is 121 3 too late to insist upon minimum technical standards if they have not been observed; on the other hand, if the operative builder had built under the guidance of the Home Building Service, the lending institution could be dealing with a known product. Obviously, the member institution should be interested in introducing the Plan into local home building practice, and can do so by offering the most favorable lending terms on houses conforming to the Home Building Service standards. The Home Building Service includes not less than six field inspections by a competent architect or qualified technical supervisor while the house is in course of construction. The contract will be drawn, in unmistakable terms, to cover what is specified in the plans and specifications. The house will not be accepted until, on final inspection, the architect approves it. Even before considering a contract, however, the architect will advise the prospective home builder as to the suitability of the proposed house to the lot on which it is to stand. To summarize: The home builder is offered a complete advisory and supervisory service by a competent architect. This, he should always have had, but generally has been reluctant to pay the fee. Naturally, such a service by outstandingly competent men must be charged for. The fee for this service for a $5,000 house has been established in several areas from $125 to $150. It is proposed to include that fee in the investment on which the loan is computed. ADVANTAGES TO THE LENDING INSTITUTION NOW, let us examine the reasons why a member association should offer such a service. First, the security for the loan is the house; the lending agency has precisely the same interest as the home builder in seeing that the latter gets what he pays for. Second, it may safely be assumed that uncounted thousands of persons do not build homes because they regard it as a hazardous venture. The Home Building Service 122 should remove a large part of the hazard. Therefore, it should greatly increase business. The cost to the member association depends very largely upon the amount it chooses to spend for promotion. That decision rests entirely with each association. In order to install the Plan with complete directions covering every phase of its operation, the member association will require certain manuals and other material. The total cost of all of this material will not exceed $25. There are no other costs. Next, let us look at the Plan from the point of view of the architect. His profession has had a distressingly small part in the construction of homes costing less than $7,500. Incidentally, this special or limited service is not intended or offered for homes costing more than that amount. Beyond question, one of the principal reasons for the unsatisfactory nature of small-house construction in this country is and always has been the fact that the American public does not adequately appreciate architectural service. The architects realize that there is great need to remedy this situation; hence their cooperation in the Home Building Service Plan. How T H E PLAN IS INSTALLED A MEMBER institution desiring to install the Home Building Service communicates with its Regional Bank. It is initially furnished with the necessary information about the service. Then after the required technical facilities are made available, the institution is supplied an Operating Guide describing the installation, promotion and operation of the Plan, and is given assistance in such installation. The Federal Home Loan Bank of any region upon receiving an inquiry for the Service from a member institution, or desiring to promote the development of the Service in a particular locality, communicates with the appropriate Reconditioning Supervisor of the Home Owners' Loan CorFederal Home Loan Bank Review poration. This field representative will have first-hand information about the availability of the required technical facilities in that area. The Regional Bank will thus be able to advise its lending institutions as to when and through whom the Plan may be inaugurated. If desired, an employee of the Bank can discuss the Plan with the member institution, or a representative of Washington headquarters or a suitable field representative will do so. The Regional Bank will be requested to qualify member institutions desiring to operate under the Plan, on the basis of ability to handle the program successfully and to promote the use of the technical service by home builders, as is required by the resolution of the Board. The Board approved the use of distinguishing insignia to differentiate operations under this Plan from those under other programs. GENERAL DEVELOPMENT OF THE PLAN institutions have long recognized that the safety of mortgage security is as dependent upon attractive design, proper materials and sound construction as upon the borrower's ability to repay the loan. Prior to 1930, a few scattered lending institutions began to make available construction supervisory facilities to borrowers and to give preference to loans where the construction had been so supervised. Further impetus was given this movement by the endorsement of "Supervised Construction" (as providing a practical and effective means of insuring better building) by the United States Building and Loan League in its 1930 convention. From 1930 to 1933, lenders witnessed a deflation in values and loss of equities unprecedented in their experience. The increased use of the long-term mortgage heightened the importance of more permanent security behind the home mortgage. Increased publicity on the deleterious effects of jerry-building focused the attention of LENDING January 1937 the industiy upon the need for a means of insuring better home design and construction, and with the initiation, by the Reconditioning Division of the Home Owners' Loan Corporation, of a system of technical supervision, lenders and others had an actual demonstration of the practicability of such a system on a wide scale. The Presidents' Council of the Federal Home Loan Bank System, meeting in May 1935, recognized the need for a positive correction of poor design and shoddy construction, and urged the formation of a specific plan of action providing not only for supervision of construction but also for adequate advisory services to be rendered to the home-owner borrower by qualified technicians during the development stages of the home project. In October 1935, the outline of such a specific plan was presented to the Regional Banks of the Federal Home Loan Bank System. Simultaneously, it was placed before the Housing Committee of the American Institute of Architects and, in December 1935, received endorsement by the directors of the Institute, who, in turn, urged local chapters to establish special technical facilities for the small-house field. The response to the article in the January 1936 issue of the REVIEW and a subsequent questionnaire sent to member institutions indicated widespread interest in the program and a desire for its further development. In the intervening eight months, the Plan has been tested in operation and improved. With the benefit of experience, specific details of the Plan were determined and approved by the Board on September 25,1936, as previously mentioned. CONSUMER INTEREST in several cities in which the essential elements of the Home Building Service have been offered point definitely to favorable acceptance by the home-building public. Although the Plan was directed at prospects whose home plans were in the RESULTS 123 initial stages, it was found that it stepped up construction loans on advanced projects—where plans or specifications were ready for submission for construction loans. Furthermore, it has become evident that this service tends to reduce the percentage of rejections among advanced projects which fail of acceptance because of poor design or inadequate specifications, since the architectural service provides a means for correcting deficiencies of a purely technical nature. In New York City, a group of architects, organized as a result of the Home Building Service Plan but operating through newspaper advertising supported by a large realestate operator, received 15,000 inquiries from its initial advertising campaign. These advertisements stressed the value of architectural service and guarantees of sound construction. The Pacific First Federal Savings and Loan Association, operating its own home building service program embodying similar services, reports marked interest by home builders in Tacoma and Seattle, Washington. An advisory and supervisory service organized by a group of Boston architects and offered through member institutions of the Bank System in that area was well received. A more recent development is a contemplated promotional effort by these cooperating member institutions in conjunction with the Boston Federal Home Loan Bank which is expected to place the advantages of the program before the public in an effective manner. T H E technical service required under the Home Building Service Plan is being developed wherever possible under the sponsorship of the organized architectural profession, including local chapters of the American Institute of Architects, and State or local organizations of registered architects. Since each of the 67 A. I. A. chapters is being urged to establish special service for the small-house field, there may be ultimately approximately this number of organized services, located in the key population centers. Such central organizations, however, will be interested in arranging technical service throughout an extensive area, possibly of an entire State. Service in localities surrounding the key centers will be arranged for by the central group through members of the architectural societies in such localities or through competent technicians, such as are now serving the Home Owners' Loan Corporation or other governmental agencies on a fee basis. In this way, the Home Building Service may be offered by all member institutions, whether located in large or small localities. The program provides a new means of competing with other types of mortgage lenders. It represents new goods on the counter to stimulate mortgage lending and to preserve the mortgage market of thrift and home-financing institutions. Finally, the Plan will promote home ownership and confidence in thrift and home-financing institutions. "CATCHING Up With Housing" is the title of a recently published book by Carol Aranovici and Elizabeth McCalmont. Organized for quick reference, its function is that of a handbook for those who need factual material on housing at their finger- tips. The book covers such subjects as: Government in housing, history of housing, community planning, housing management, etc. It is published by the Beneficial Management Corporation, 15 Washington Street, Newark, New Jersey. 124 ESTABLISHMENT OF GROUPS TO RENDER TECHNICAL SERVICES LOCALLY Federal Home Loan Bank Review Indexes of Small-House Building Costs B ETWEEN September and December the cost of building the same typical 6-room house went up 1 percent or more in 15 of the 26 cities making comparable reports for the two periods. In 3 cities the costs went down 1 percent or more and in 8 cities costs remained the same or the change was less than 1 percent. With the publication of these figures, the first year of operation of the index for this group of reporting cities has been completed. It is now possible to compare the trend in building costs in these cities since December 1935. Although the earlier figures were at first subject to the errors of organization, these errors have been largely eliminated and the reports adjusted to the same base as the latest figures. The largest increase of 10.3 percent, or 2.1 cents per cubic foot, was reported by Baltimore, Maryland, reversing the cost movement in this city between June and September. This increase was due to a rise in the cost of both materials and labor. Washington, D. C, for the same reasons, reported an increase of 8.1 percent. Costs in Roanoke, Virginia, rose 5.3 percent and in Atlanta, Georgia, 5.2 percent. In contrast to the rise in Roanoke, building costs in Richmond, Virginia, decreased 3.1 percent principally due to labor costs. Oshkosh, Wisconsin, and Boston, Massachusetts, dropped 1.8 percent and 1.6 percent respectively. Comparing costs in December between cities, we find the three Illinois cities reporting the highest costs, Chicago being in the lead with a cost of 28.4 cents per cubic foot. Springfield was second with 27.6 cents and Peoria third with 26.3 cents. Other cities with costs above 25 cents were Denver, Milwaukee, and West Palm Beach. At the other end of the scale, lowest costs were registered in the Southeastern States. Asheville, North Carolina, reported a cost of 19.8 cents per cubic foot; Columbia, South Carolina, of 20.0 cents; and Richmond, Virginia, of 20.3 cents. Total costs and cubic-foot costs 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 Decem- Septem- June ber ber No. 1—Boston: Connecticut: Hartford Rhode Island: Vermont: January 1937 1936 1935 Decem- Septem- June March December ber ber March December $5, 768 $5, 589 $5, 657 $5, 647 $5, 655 $0. 240 $0. 233 $0. 236 $0. 235 .235 .228 .231 5,636 5,468 5,544 5,509 .230 Maine: Portland Massachusetts: Worcester New Hampshire: 1935 1936 Federal Home Loan Bank Districts, States, and cities Cubic-foot cost 5,252 5,781 5,245 5,876 . 5,132 5,124 5,773 5,727 5,545 5,467 5,633 5,577 5,305 5,305 5,462 5,496 5,329 $0. 236 5,103 .219 .219 .214 .214 .213 5,780 5,895 5,699 .241 .245 .241 .239 .241 .246 .237 5,416 5,467 .231 .228 .228 .226 .228 5,531 5,574 .235 .232 .229 .230 .232 5,329 5,337 .221 .221 .222 .222 .222 (See footnote on p. 126) 125 Total costs and cubic-foot costs of building the same standard house in representative cities in specific months—Continued Total building cost 1935 1936 Federal Home Loan Bank Districts, States, and cities Decem- September ber June Cubic-foot cost 1936 1935 March Decem- Decem- Septem- | June ber ber ber March December No. 4—Winston-Salem: Alabama: $5, 073 $5, 013 $5, 059 $5, 002 District of Columbia: Washington Florida: Tampa West Palm Beach Georgia: Atlanta Maryland: Baltimore Cumberland North Carolina: Asheville Raleigh South Carolina: Columbia Virginia: Richmond Roanoke No. 7—Chicago: Illinois: Chicago Peoria Springfield Wisconsin: Milwaukee Oshkosh No. 10—Topeka: Colorado: Denver Kansas: Wichita Nebraska: Omaha Oklahoma: Oklahoma City $0. 211 $0. 209 $0. 211 $0. 208 $5, 569 5,150 4,973 4,918 4,850 $0. 232 .215 .207 .205 .202 5,500 6,038 5,483 5,974 5,360 5,911 5,379 5,889 5,895 .229 .252 .228 .249 .223 .246 .224 .245 .246 5,150 4,897 4,889 4,854 4,849 .215 .204 .204 .202 .202 5,401 5,491 4,899 5,482 4,909 5,424 4,427 5,4^9 4,543 5,358 .225 .229 .204 .228 .205 .226 .184 .226 . 189 .223 4,762 5,197 5,148 4,768 5,061 4,778 5,070 4,791 4,967 .198 .217 .214 .199 .211 .199 .211 .200 .207 4,804 4,697 4,712 4,634 4,505 .200 .196 .196 .193 . 188 4,870 5,014 5,026 4,760 5,026 4,843 4,964 4,544 5,062 4,491 .203 .209 .209 .198 .209 .202 .207 .189 .211 . 187 6,825 6,312 6,625 6,745 6,331 6,459 6,639 6,420 6,459 6,608 6,212 6,459 6,498 .281 .264 .269 .277 .267 .269 .275 .259 .269 .271 6,451 .284 .263 .276 6,081 5,555 5,838 5,658 5,540 5,612 5,386 5,502 5,357 .253 .231 .243 .236 .231 .234 .224 .229 6,105 6,133 6,047 6,098 ,254 .256 .252 .254 5,290 5,192 5,164 5,164 5,200 .220 .216 .215 .215 217 5,601 5,578 5,582 5,582 5,554 .233 .233 .233 .233 231 5,486 5,449 5,561 5,282 5,215 .229 .227 .232 .220 217 269 .223 1 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 on first floor; 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. I t includes all fundamental structural elements, an attached 1-car garage, an unfinished cellar, an unfinished attic, a fireplace, essential heating, plumbing, and electric wiring equipment, and complete insulation. I t does not include wall-paper nor other wall nor ceiling finish on interior plastered surfaces, lighting fixtures, refrigerators, water heaters, ranges, screens, weather stripping, nor window shades. i Reported 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, financing charges, nor sales costs. In figuring costs, 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. 126 Federal Home Loan Bank Review Monthly Lending Activity of Savings and Loan Associations D URING November, 2,537 savings and loan associations representing every State, the District of Columbia, and Hawaii, reported total new loans made for all purposes of $38,065,200. The number of reporting associations actually making loans during November was 2,017, while 520 reported no loans made. Combined assets of all reporting associations (for the most part as of November 30, 1936) were $2,466,661,300. The accompanying table breaks down by States and by Federal Home Loan Bank Districts the number and volume of loans and the purposes for which they were made. For the United States as a whole, the reporting associations made mortgage loans on 1- to 4-family nonfarm homes to 14,453 borrowers in the amount of $34,193,700. Analyzing these nonfarm home loans by purpose, we find that new construction and home purchase each accounted for 32.6 percent of the total volume, while refinancing accounted for 27.2 percent and reconditioning for 7.6 percent. The number of associations reporting their monthly lending activities continues to represent a regrettably small proportion of the industry. The value of a complete picture of current lending activities as a means of increasing public respect of and goodwill towards the savings and loan business is generally admitted. Associations are, therefore, urged to cooperate in making this complete picture available. Monthly lending activity and total assets as reported by 2,537 savings and loan associations in November 1936 [Source: Monthly reports from savings and loan associations to the Federal Home Loan Bank Board] [Dollar amounts are shown in thousands of dollars] Number of associations Loans made in November according to purpose Mortgage loans on 1- to 4-family nonfarm homes Federal Home Loan Bank Districts and States Sub- Reporting mitting loans reports made Construction Home purchase ! Refinancing and2 reconditioning Amount Num- Amount Num- Amount Number ber ber UNITED STATES . . . . No. 1—Boston 2,537 144 Refinancing Total assets Nov. 30, 1936 3 Num- Amount Num- Amount ber ber Reconditioning 2,017 3,473 $11,188.6 4,456 $11,123.1 6,524 $9,262.5 $2,619.5 2,314 $3,871.5 16,767 $38,065.2 $2,466,661.3 127 240 942.4 424 1,294.1 633 789.1 392.3 157 221.7 1,454 3,639.6 266,687.9 501.4 172 104 160.1 824 2,293.9 92 99.2 209 453.3 53 131.7 24,196.5 12,968.8 192,271.5 9,507.2 24,434.5 3,309.4 260.7 12.6 526.5 24.7 102.6 15.3 27 28 268 18 74 9 75.4 52.2 885.4 27.6 229.9 23.6 71 60 367 37 69 29 120.3 79.6 437.5 24.1 63.5 64.1 27.2 15.7 310.2 12.3 24.1 2.8 10 0 72 26 42 7 167 285 1,065.2 291 1,000.0 373 699.9 153.2 217 403.3 1,166 3,321.6 378,605.8 63 104 30 255 118.2 947.0 49 242 129.7 870.3 57 316 92.1 607.8 44.2 109.0 67 150 213.3 190.0 152,994.1 225,611.7 Connecticut Maine Massachusetts New Hampshire. . Rhode I s l a n d . . . . Vermont 31 23 74 8 3 5 27 16 70 7 2 5 No. 2—New Y o r k . . . . 290 161 129 New Jersey New York Loans for all Total loans, all other purposes purposes 65 16 117 11 24 8 17.8 0.0 134.3 10.5 33.2 25.9 203 597.5 963 2,724.1 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, whether 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. . . . . , . , , . „ f 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. m 3 Assets are reported principally as of Nov. 30, 1936. A few reports have been submitted as of the first of the year 1936. January 1937 • 127 Monthly lending activity and total assets as reported by 2,537 savings and loan associations in November 1936—Continued Number of associations Loans made in November according to purpose Loans for all Total loans, all purposes other purposes Mortgage loans on 1- to 4-family nonfarm homes Federal Home Loan Bank Districts and Sub- Reporting States mitting loans reports made Construction Home purchase Total assets Nov. 30, 1936 Refinancing and reconditioning NumNum- Amount Number Amount ber ber Num- Amount Num- Amount ber ber Amount ReconRefinancing ditioning 581 $1,316.7 $105,625.0 50.0 932.3 334.4 4,205.0 87,414.4 14,005.6 790.4 2,539 6,632.2 224,153.4 232 140 89 $230.1 235 $578.1 196 $284.0 $115.5 61 $109.0 West Virginia 6 202 24 4 116 20 1 53 35 0.8 165.3 64.0 14 182 39 42.1 467.4 68.6 2 128 66 0.0 146.1 137.9 1.1 79.1 35.3 2 44 15 6.0 74.4 28.6 No. 4—Winston-Salem 274 247 575 1,993.9 512 1,245.3 1,157 2,245.8 41.7 28 61.3 272.4 161.4 102.0 346.0 168.3 60.1 73.8 No. 3—Pittsburgh 15 17 District of GoFlorida North Carolina... South Carolina... No. 5—Cincinnati.... No. 6—Indianapolis.. No. 8—Des Moines. .. North Dakota South Dakota No. 9—Little Rock. . . Mississippi Texas No. 10—Topeka 128 71.8 61.0 35.2 23.9 99.4 23.4 37.3 57 31 30 14 66 19 61 249.4 198.7 36.4 32.5 78.6 31.5 59.8 13,412.2 588 2,538.4 320 1,125.0 297 474.3 336 747.9 487 749.5 188 321.8 232 421.6 90,968.5 17,886.7 11,220.4 33,220.8 30,546.1 9,042.9 17,855.8 547.0 542.8 173.3 147.8 262.8 148.4 130.1 355 287 373 1,334.6 966 2,654.1 911 1,228.7 435.9 351 572.0 2,601 6,225.3 458,130.9 137 645 129 156.6 868.6 203.5 84.9 331.2 19.8 60 275 16 65.2 383 799.8 476.1 1,942 4,897.8 527.7 276 30.7 44,502.1 400,684.5 12,944.3 54 266 35 46 214 27 40 230 103 138.9 983.8 211.9 146 792 28 354.2 2,238.1 61.8 162 147 230 698.7 368 600.9 641 600.8 209.6 207 271.0 1,446 2,381.0 194,118.1 110 52 96 51 114 116 247.8 450.9 296 72 456.4 144.5 476 165 363.3 237.5 160.1 49.5 112 95 128.8 142.2 998 1,356.4 448 1,024.6 107,988.5 86,129.6 266 213 199 544.2 332 908.2 600 898.1 307.3 158 243.0 1,289 2,900.8 196,414.1 197 69 153 60 93 106 231.8 312.4 261 71 672.7 235.5 492 108 722.8 175.3 257.5 49.8 128 30 150.1 92.9 974 2,034.9 315 865.9 137,545.2 58,868.9 177 147 146 420.4 177 340.2 428 561.6 130.6 168 216.4 919 1,669.2 101,007.8 38 33 58 10 8 29 64 36 8 9 56 42 58 14 7 101.1 84.9 121.0 25.7 7.5 95 145 152 22 14 92.2 205.4 230.9 19.2 13.9 21.6 52.3 32.5 18.8 5.4 48 30 71 15 4 27.0 104.1 64.3 18.1 2.9 228 281 317 59 34 311.0 644.5 578.6 95.6 39.5 18,486.6 25,850.3 47,619.0 7,035.2 2,016.7 250 200 350 876.1 333 702.8 390 347.9 168.8 159 235.4 1,232 2,331.0 135,559.2 40 56 26 15 113 35 48 17 12 88 45 63 20 12 210 98.7 j 35 180.3 142 16 22.7 14 17.2 557.2 126 53.7 394.1 13.4 20.2 221.4 58 78 32 12 210 37.1 44.7 17.8 23.7 224.6 23.4 61.7 9.3 0.5 73.9 37 53 8 6 55 175 255.8 336 788.9 76 64.7 44 67.1 601 1,154.5 9,413.7 64,478.1 3,773.6 3,145.7 54,748.1 159 134 201 6237l 302 580.9 342 350.6 119.3 237 324.1 1,082 1,998.0 122,085.5 25 43 24 42 27 37 69 68 84.1 102.1 237.8 199.1 38 86 70 108 75.2 126.6 142.2 236.9 54 87 90 111 54.9 78.2 76.4 141.1 13.6 43.4 35.5 26.8 22 45 75 95 100 246 605.1 i 215 455.1 126.1 151 ? 37 20 54 29 99 7 1 ! 421 1,397.8 101 161.1 113 127.4 148 197.7 196 140.4 62 58.4 89 120.6 253.7 91 67 124 80 38 127 73 47 71 8 25 9 49 10 No. 12—Los Angeles.. 103.5 11 46 38 40 43 29 25 108 Utah 17 12 47 41 48 46 34 29 29 55 31 I 44 No. 11—Portland 295 4.8 43 64 74 136 98 34 35 48 39 69 13 8! Iowa 19 356.8 42.4 27 19 407 155 | 7J 22 8 46 1 10 69.1 ! 197.8 129.9 13.8 9.8 466 616.2 74.3 50.6 153.3 92.6 211.8 22.5 22 17 30 24 111 11 19 32.9 24 50.3 62.3 | 96 36 60.0 228.3 280 11 21.3 13.7 19.4 156.5 47.1 371.6 7.9 1,854.8 301 763.4 387 639.8 104.1 34.9 8 528 1 1,811.3 3.8 2! 4.8 1 o 0.0 | 65 747.2 320 1 0.0 1 16.2 75.6 560.8 0.0 3.4 0.0 0 102.1 151 2.0 ! 2 0.0 0 120 1 108 ( 5 3 9 1 116 l 2 1 104 1 2 293 0 8 8.7 i 22.1 16.3 7.1 66.4 5.5 11 16 36 10 74 4 153 42.9 108.1 1.5 5.5 77.4 24.0 75.4 78.2 146.5 141 255 304 382 251.8 I 425.7 570.1 1 750.4 ! 11,003.4 28,002.5 36,266.1 46,813.5 245.6 1,078 2,048.1 79,064.0 7.5 20.7 92.4 15.1 105.2 4.7 4,235.2 6,680.0 18,722.3 9,647.7 36,543.7 3,235.1 89 77 216 99 564 33 137.1 163.1 | 480.8 1 221.9 983.3 61.9 239.6 1,380 3,601.7 205,209.6 0.0 73 110.5 1 678.2 237.6 1,292 3,459.0 202,971.3 2.0 5 7.8 149.2 0.0 10 24.4 1,410.9 Federal Home Loan Bank Review Residential Construction Activity and Real-Estate Conditions T HE index of residential construction, as measured by building permits granted in all cities of 10,000 and more population, increased from 25 percent of the 1926 base of 100 in October to 27 percent in November (chart 2). These figures have been adjusted for seasonal variation. The estimated number of family dwelling units authorized in the cities covered was 13,920 in November, involving an estimated cost of $55,384,800 (table 1 and chart 1). This represents a decrease from October 1936 of 8.1 percent in the number of units and of 7.7 percent in the estimated cost. But they are 64.5 percent above the number authorized in November 1935 and 72.3 percent above the estimated cost. The proportion of total residential construction going for multifamily dwelling units increased slightly in November. Dur- ing October, buildings containing 3- and more-family units represented 29 percent of the total number authorized while in November they represented 31 percent. One- and 2-family dwellings constituted the remaining 69 percent in November. The average cost of authorized 1-family dwelling units increased only 1 percent from $4,087 in November 1935 to $4,129 in November 1936. Multifamily units, on the other hand, increased 8.8 percent to $3,643 in November 1936. As a result, the difference in cost between these two types is less than $500. FORECLOSURES AND OTHER REAL-ESTATE CONDITIONS 2 pictures the movement of residenconstruction, industrial production, CHART tial CHART I . — N U M B E R A N D COST OF F A M I L Y D W E L L I N G U N I T S FOR W H I C H P E R M I T S W E R E GRANTED, BY MONTHS, OF 10,000 OR MORE P O P U L A T I O N ; 1936 COMPARED W I T H SELECTED PERIODS [Source: Federal Home Loan Bank Board. IN CITIES Compiled from residential building permits reported to U. S. Department of Labor] COST OF U N I T S PROVIDED NUMBER OF U N I T S PROVIDED 30 30 28 28 26 26 to 24 24 z 22 22 => 20 100,000 100,000 90.000 90,000 1936 1936 to 7V 80,000 80.000 * < -* 70.000 70.000 -» 20 O 18 a 60,000 60,000 ° 16 16 to o 14 14 * 12 12 50,000 < x. -19 ?5... o x 8 •- 6 —IS. 4 t~"^ ++* 1——f—• /£ 32-3A A j r^ — """"*••/. 2 10 / \ V- ^ / 30.000 8 6 1 —" **-. January 1937 20,000 (O 40.000 «\ Y Hi fS-i 4 A (S < \ \ N 30.000 «* , 10.000 10,000 XJ o z / S / ^-« 4 N 2 O O • 40,000 O 129 base. Residential construction and industrial production are adjusted for seasonal variation. The preliminary index of foreclosures in 78 large urban counties declined from 259 real-estate foreclosures, and housing rentals. All of these activities are shown in comparison to a base line of 100 for the year 1926. The following brief table gives the story of the charts in percentages of this TABLE 1.—Number and estimated cost of new family dwelling units provided in all cities of 10,000 population or over, in the United States, in November 1936 * [Source: Federal Home Loan Bank Board. Compiled from residential building permits reported to U. S. Department of Labor] Number of family units provided Type of structure Novem- Novem- Percent ber ber change 1936 1935 All housekeeping dwellings... 13, 920 . 8,463 Total 1- and 2-family dwell9,621 ings 5,153 8,828 1-family dwellings 4,696 710 2-family dwellings 408 Joint home and business 2 83 49 3,310 3- and more-family dwellings. 4,299 Total cost of units (000 omitted) Average cost of family units November 1936 November 1935 Novem- Percent Percent November ber change change 1936 1935 + 64.5 $55, 384. 8 $32,143. 9 + 86.7 + 88.0 +74.0 +69.4 +29.9 39, 724. 3 37, 649. 2 1, 833. 7 241.4 15, 660. 5 21, 059. 5 19, 725. 9 1,102. 3 231.3 11, 084. 4 + 72.3 $3, 979 $3, 798 +4.8 + 88.6 + 90.9 + 66.4 +4.4 +41.3 4,129 4,265 2,583 2,908 3,643 4,087 4,201 2,702 4,720 3,349 + 1.0 + 1.5 —4.4 -38.4 + 8.8 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. 2 Includes 1- and 2-family dwellings with business property attached. CHART 2.—COMPARISON OF RESIDENTIAL REAL-ESTATE CONDITIONS AND INDUSTRIAL PRODUCTION IN THE UNITED STATES (1926=100) 1 R E A L ESTATE FORECLOSURES I RES IDEN riAL <:ONSI RUCT ION IN 1 SEVENTY-EIGHT LARGE URBAN COUNTIES | i . (NUM BER OF FAMILY OWEL LING UK ITS) STED f^\ 1 \ 300 1 \ 250 \ 200 150 IOO : SOUP C E - F E D •RAL HO it LOAN IANK SO* RO (u.a OEPT. 0 F LASOR RECORD s) 1926 j 1927 1920 1929 1930 1 1931 1932 1933 1934 1935 1936 1937 T r" 1 r — — i 1 SOURCE - F E D E R A L HOME LOAN RANK BOARD (COUNTY REPC RTS) I9Z6 1927 1928 1929 IN DUST RIAL P R 0 0 JCTIC N 1930 1931 1932 1933 1934 1935 1936 1937 1936 1937 HOU SING RENT ALS AOJt S T E O . / ^ V \ sour C E : - F E D 19*26 1927 i R A L RE ERVE •1926 130 1929 J v v-iAv A^V/ r\ / / • ( ARD (CO» V E R T E D TO l » 2 « • A S E ) 1930 1931 1932 1933 CE - N A T ONAL IN USTRIAL CONFER ENCE 1934 1935 1936 1937 1926 1927 1928 1929 1930 1931 90 kRD (CON VERTED 1932 1933 0 IStC 1934 • ASE) 1935 Federal Home Loan Bank Review in October to 235 in November. This fall of 9 percent is in contrast to a normal seasonal rise of 3 percent. The number of foreclosures in November 1936 was 21 percent below November 1935. During the first 11 months of 1936, foreclosures were 26 percent below the corresponding period in 1935. Out of the 78 counties included in the index, 27 showed increases in foreclosures between October and November, 50 reported decreases, and in 1 city the number was unchanged. petitors are the District of Columbia with 928 units and Texas with 823 units. Chart 3 compares graphically the rate of building (as distinguished from volume of building) among Federal Home Loan Bank Districts. In rate of building, Los Angeles reached a new high with 56 units per 100,000 urban population. Winston-Salem was second with 44 units and Little Rock and Topeka tied for third with 36 units. [1926=100] Nov. 1936 Series BUILDING ACTIVITY BY FEDERAL HOME LOAN BANK DISTRICTS AND BY STATES 2 reveals that New York and California are far in the lead in the number of dwelling units authorized. In November, the former accounted for 2,764 units, and the latter for 2,308 units. The nearest com- TABLE TABLE Residential conIndustrial production Rentals l Oct., PerNov. cent 1936 change 1935 27 25 107 80 235 101 80 259 +8 +6 0 -9 Percent change 17 + 59 90 72 297 + 19 + 11 -21 Pre liminary. 2.—Number and estimated cost of new family dwelling units provided in all cities of 10,000 population or over, in November 1936, 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] All 1- and 2-family dwellings All residential dwellings Federal Home Loan Bank Districts and States Number of family dwelling units Estimated cost (thousands of dollars) Number of family dwelling units Estimated cost (thousands of dollars) November November November November November November November November 1935 1936 1935 1936 1935 1936 1936 1935 UNITED STATES 13, 920 8,463 $55, 384. 8 $32,143. 9 9,621 5,153 $39, 724. 3 $21,059. 5 751 446 3, 877. 0 2, 373. 3 627 441 3, 442. 7 2, 351.4 188 55 375 31 79 23 115 23 243 12 48 5 1, 111. 6 183.4 2, 031. 2 110.8 373.8 66.2 609.7 85.4 1, 441. 7 33.7 179.3 23.5 182 40 291 31 79 4 115 18 243 12 48 5 1,101. 6 156.1 1, 686. 2 110.8 373.8 14.2 609.7 63.5 1, 441. 7 33.7 179.3 23.5 3,038 2,729 11, 800. 0 10, 111. 8 1,170 742 5, 390.1 3, 541. 2 274 2,764 237 2,492 1, 650.1 10,149. 9 1, 359.6 8, 752. 2 237 933 199 543 1, 525. 2 3, 864. 9 1, 271. 6 2,269. 6 No. 3—Pittsburgh 591 267 2, 982.4 1, 305. 7 529 244 2, 845. 0 1, 258. 7 Delaware Pennsylvania West Virginia 33 456 102 3 231 33 124.5 2,487. 7 370.2 18.0 1,170.4 117.3 33 416 80 3 212 29 124.5 2, 392. 3 328.2 18.0 1,141.4 99.3 No. 1—Boston Connecticut Maine Massachusetts New Hampshire Rhode Island Vermont No. 2—New York New Jersey New York January 1937 131 2.—Number and estimated cost of new family dwelling units provided in all cities of 10,000 population or over, in November 1936, by Federal Home Loan Bank Districts and by States—Continued TABLE All residential dwellings Federal Home Loan Bank Districts and States Number of family dwelling units All 1- and 2-family dwellings Estimated cost (thousands of dollars) Number of family Estimated cost dwelling units (thousands of dollars) November November November November November November November November 1935 1936 1936 1936 1935 1935 1936 1935 2,197 99 928 421 122 175 235 123 94 1,175 31 456 204 112 74 146 75 77 $7, 283. 7 204.9 3, 576. 8 1, 305. 9 268.4 587.9 712.0 299.7 328.1 $3, 248. 8 48.2 1, 263.1 637.1 264.7 248.6 296.9 194.1 296.1 1,277 91 157 371 119 175 200 85 79 754 31 105 200 88 69 135 58 68 $4, 329. 7 186.9 887.7 1,186. 9 265.2 587.9 657.3 244.2 313.6 $2,406.6 48.2 595. 6 623.1 186. 6 238.2 279.4 156.1 279.4 954 104 741 109 888 33 817 38 5,169. 8 812.7 4, 075. 5 281.6 4, 302. 3 132.5 4,119. 8 50.0 460 54 297 109 247 33 176 38 2, 265. 4 252.7 1, 731.1 281.6 1, 232. 6 132.5 1, 050.1 50.0 678 143 535 348 71 277 3, 513. 0 600.5 2, 912. 5 1, 777. 6 282.8 1, 494. 8 675 143 532 316 66 250 3, 503. 0 600.5 2, 902. 5 1, 719. 0 280.7 1, 438. 3 Wisconsin 527~ 300 227 253 106 147 2, 974. 6 1, 938. 6 1, 036. 0 1, 291. 8 684.6 607.2 503~ 296 207 244 102 142 2, 887. 4 1, 916. 9 970.5 1, 261. 0 675.1 585.9 Missouri North Dakota South Dakota 483 124 166 170 7 16 322 67 131 94 10 20 1, 741. 4 432.8 686.2 569.4 16.5 36.5 1, 287. 2 253.4 555.8 409.1 6.6 62.3 454 99 166 170 7 12 318 67 131 94 10 16 1, 664. 3 362.2 686.2 569.4 16.5 30.0 1, 283 6 253.4 555.8 409. 1 6 6 58 7 1,182 47 147 138 27 823 518 34 39 26 10 409 2, 958. 4 160.1 417.0 228.6 60.9 2, 091. 8 1, 402. 7 52.9 179.5 112.4 23.5 1, 034.4 1,079 47 135 100 23 774 484 15 39 26 10 394 2, 731.1 160.1 382.0 177.3 54.9 1, 956. 8 1 347 31 179 112 23 1 000 723 103 101 345 174 195 41 51 29 74 2, 836. 6 387.2 251.8 1, 613.1 584.5 602.5 144.2 160.9 117.9 179.5 411 192 41 48 29 74 1, 377. 3 594 0 337.2 251.8 208.8 579.5 144 2 152 4 117 9 179.5 428 16 31 91 56 217 17 190 14 28 26 34 78 10 1, 452. 0 547.8 43.5 50.5 102.0 104.6 211.2 36.0 387 172 8 28 26 22 78 10 1, 349. 5 43.1 89.1 345.2 148.9 652.9 70.3 523.8 16 31 91 43 189 17 2,368 1,132 10 1,118 4 8, 795. 9 162.0 8, 548. 3 85.6 3, 892. 4 2,049 41 1,993 15 999 10 985 4 7, 938. 8 District of Columbia Florida Maryland North Carolina. South Carolina Ohio No. 7—Chicago jsjo. 9—Little Rock Louisiana Mississippi New Mexico N 0 # jo—Topeka Colorado Kansas Nebraska Oklahoma No. 11—Portland Idaho Montana Oregon Utah Washington Wyoming No. 12—Los Angeles Arizona Calfornia Nevada 132 45 2,308 15 43.1 89.1 345.2 166.9 737.4 70.3 28.5 3, 839. 4 24.5 79 101 61 170 157.5 7, 695. 7 85.6 6 5 5 4 5 7 25.5 50.5 102 0 98.6 211.2 36 0 3, 540. 0 28.5 3, 487. 0 24 5 Federal Home Loan Bank Review CHART 3.—RATE OF R E S I D E N T I A L B U I L D I N G I N T H E U N I T E D STATES A N D I N EACH FEDERAL HOME LOAN BANK BY MONTHS DISTRICT, Represents the estimated number of family dwelling units provided per 100,000 population; based upon building permits records for all cities of 10,000 or more inhabitants [Source: Federal Home Loan Bank Board. Compiled from reports to U. S. Department of Labor] - L E G E N D 1935 1936 U.S. AVERAGE 1936 - BOSTON DISTRICT 1 DISTRICT 2 - N E W YORK _ DISTRICT 3 - P I T T S B U R G H OISTRICT 4 - W I N S T O N SALEM 60 60 50 40 I936> r—I 30 W..T—"> r-H 20 1 *-—] r 19367p •—• 10 —-«—» 1 * i I '—1 1—• —ijj M935 1 A ' J F M A M J J A S O N D DISTRICT L J - ^H935 [^ J F M A M J J A S O N D DISTRICT 6-INDIANAPOLIS J FM.AM.J OISTRICT J A S 0 N 0 7-CHICAGO J F M A M J J A S O N D DISTRICT 8 - P E S MOINES 60 60 50 50 to.40 z 5-CINCINNATI r^-p %n- 30 20 10 P tft 30 20 10 H935 0 J F M A M J J A S O N D DISTRICT 9 - L I T T L E ROCK J F M A M J J A S O N D DISTRICT I O - T O P E K A J FMAMJ DISTRICT JASOND 11-PORTLAND J F M A M J J A S O N D DISTRICT I 2 - L 0 S 0 ANGELES 60 60 50 50 40 40 w t936y 30 20 C? 7 i_r, 1—' I m C 'l93pL— 10 0 JFMAMJJASOND January 1937 z J F M A M J J A S O N D J F M A M J J A S O N D ! 1935; z J FM AM J J A S O N 0 30 <0 z 20 10 0 133 Federal Home Loan Banks D URING November, the 12 Federal Home Loan Banks made advances amounting to $6,414,000. This was $3,000,000 less than they advanced during the previous month but was still above the amount advanced in November 1935. Repayments remained at about the same level during November as during October so consequently the increase in the balance outstanding during the later month was only $2,320,000. In November, 16 institutions were made members of the Federal Home Loan Banks, bringing the total to 3,745. TABLE INTEREST RATES ON ADVANCES TO MEMBERS Two Banks reported changes in their interest rates to be effective in January. The Boston Bank changed its rate on all 10year advances. The interest rate charged for such advances, made after January 15, 1937, will be written at 3 percent for two years, with the right to increase the interest rate to not more than 4 percent for eight years thereafter. The New York Bank reduced its rate on advances for one year or less from S1/^ percent to 3 percent with the general provision 1.—Growth and trend of lending operations Balance RepayLoans Loans outstand- Borrowing ments advanced advanced at end capacity 2 (cumula- (monthly) (monthly) ing of month (000 Estimated tive) (000 (000 (000 omitted) (000 assets i (000 omitted) omitted) omitted) omitted) omitted) Members Month Number December December December December 1932 1933 1934 1935 119 2,086 3,072 3,460 $217, 000 2, 607, 000 3, 305,000 3, 020, 000 $837 90, 865 129, 545 188, 675 $837 7,132 2,904 8,414 $889 3,360 2,708 3, 250, 000 193, 746 197, 530 202, 041 207, 878 215, 085 226, 645 235,152 242, 983 252, 559 262, 046 268,460 5,071 3,784 4,511 5,836 7,207 11, 560 8,507 7,830 9,576 9,487 6,414 5,065 3,642 4,095 3,222 2,258 3,895 4,993 4,714 5,027 4,313 4,094 $837 85,442 86, 658 102, 795 1936 January February March April May June July August September October November 3,495 3,516 3,538 3,581 3,604 3,640 3,659 3,678 3,707 3,729 3,745 102, 800 102, 942 103, 358 105, 972 110, 922 118, 587 122,101 125, 218 129, 767 134,941 137,261 $869, 000 869,000 869, 000 869,000 911,000 911, 000 1 2 Estimates of assets are brought up to date semiannually. Based upon the amount for which the members may legally obligate themselves, or 50 percent of their net assets, whichever is lower. NOTE.—All figures, except loans advanced (monthly) and repayments, are as of the end of month. 134 Federal Home Loan Bank Review that amortization was to be in equal monthly installments. On all advances for more than one year, it retained the written rate of 4 percent and extended for the year 1937 the provision that interest on such advances should be collected at 3 % percent. It required, as a general policy, that these TABLE long-term advances be repaid in equal quarter-annual installments and that all advances "may be repaid in advance of maturity in whole or in part at the option of the borrowing institutions." These rates are applicable to all balances outstanding on January 1, 1937. 2.—Interest rates. Federal Home Loan Banks: rates on advances to member institutions l Federal Home Loan Bank 1. Boston 2. New York Rate in effect on Jan. 1 Percent 3 3 3M 3. Pittsburgh &A 4. Winston-Salem *A 5. Cincinnati.... 6. Indianapolis... 3 3 3 7. Chicago VA 3-3^ 8. Des Moines... 9. Little Rock. . . 10. Topeka 11. Portland 12. Los Angeles.. 3 3 3 3^| Type of loan All advances. All 10-year advances made after Jan. 15, 1937 shall be written at 3 percent for 2 years, with the right to increase the interest rate to not more than 4 percent for 8 years thereafter. All advances for 1 year or less. This rate shall be applicable to balances outstanding on Jan. 1, 1937. All advances for more than 1 year shall be written at 4 percent, but interest collected at 3% percent during 1937. All advances for 1 year or less. All advances for more than 1 year are to be written at 4 percent, but until further notice credit will be given on all outstanding advances for the difference between the written rates of 5, 4J^, or 4 percent and VA percentum per annum. All advances, with the provision that the interest rate may be increased to not more than 4*A percent after 30-days written notice. All advances. All secured advances. All unsecured advances, none of which may be made for more than 6 months. All secured advances are to be written at 3A percent, but interest collected at 3 percent. All unsecured advances. On all advances up to $1,000,000, the interest rate shall be ZA percent. If the balance of loans outstanding to any one member equals or exceeds $1,000,000, the interest rate thereon shall be at the rate of 3 percent. All advances. Do. All advances to members secured by mortgages insured under Title II of National Housing Act. All advances for 1 year or less. All advances for more than 1 year are to be written at 4 percent, but interest collected at 3J^ percent so long as shortterm advances carry this rate. All advances. 1 On May 29,1935, the Board passed a resolution to the effect that all advances to non-member institutions upon the security of insured mortgages, insured under Title II of the National Housing Act, "shall bear interest at rates of interest one-half of 1 per centum in excess of the current rates of interest prevailing for member institutions." January 1937 135 Federal Savings and Loan System D The total share liability of the 1,080 reporting Federals was $581,232,900 at the end of November. Of this amount, $442,625,200 was subscribed by private investors, and $138,607,700 by the Treasury and the Home Owners' Loan^ Corporation. During the month the net increase in H. O. L. C. subscriptions was $8,337,000. The outstanding obligations of these associations to the Federal Home Loan Banks at the end of the month was $52,764,800 or 1.9 percent more than at the end of October. They also borrowed $2,027,300 from other sources. URING November, 1,080 reporting Federal savings and loan associations with assets of $726,683,900 made $18,943,500 in mortgage loans. This was 16.7 percent or $3,813,700 less than they loaned during October. This seasonal drop in mortgage lending was accompanied by a similar drop of 12.3 percent in private share investments during the month. The summary of the activities of these 1,080 associations for each month, as shown in table 2, reveals that although the reduction in mortgage lending has been general in all of the categories listed, mortgage loans outstanding increased 2.3 percent during November to $544,129,800 at the end of the month. Analyzing the mortgage loans of these associations according to the purposes for which they were made, new construction accounted for 33.9 percent in dollar volume, home purchase for 28.1 percent, refinancing for 24.4 percent, reconditioning for 6.1 percent, and other purposes for 7.5 percent. TABLE N E W CHARTERS GRANTED charters were granted to 14 savings and loan associations during November. Two of these associations were newly organized, the remaining 12 having converted from State charter to Federal charter. On November 30, 1936, there were 1,206 Federals with assets of $727,534,633. FEDERAL 1.—Progress in number and assets of Federal savings and loan associations Approximate assets Number at specified dates New Converted Total 136 Dec. 31, 1933 Dec. 31, 1934 Dec. 31, 1935 Oct. 31, 1936 Nov. 30, 1936 Oct. 31, 1936 57 2 481 158 605 418 643 549 645 561 $116, 952, 726 576, 694, 716 $142, 577, 810 584, 956, 823 59 639 1,023 1,192 1,206 693, 647,442 727, 534, 633 Nov. 30, 1936 Federal Home Loan Bank Review TABLE 2.—Monthly operations of 1,080 identical Federal savings and loan associations reporting during October and November 1936 October November Change October to November 619, 698 626, 966 Percent + 1.2 $439, 417, 500 130, 270, 700 $442, 625, 200 138, 607, 700 +0.7 + 6.4 569, 688, 200 581, 232, 900 +2.0 Private share investments during month Repurchases during month 8,172,400 5, 574,100 7,164, 300 5, 040, 300 — 12.3 -9.6 Mortgage loans made during month: a. New construction b. Purchase of homes c. Refinancing d. Reconditioning e. Other purposes 7, 735, 200 6, 468, 300 5, 685, 300 1, 399, 900 1, 468, 500 6, 419, 800 5, 322, 900 4, 623, 900 1,157, 600 1, 419, 300 — 17.0 — 17.7 — 18.7 — 17.3 -3.4 22, 757, 200 532, 063, 900 18, 943, 500 544,129, 800 -16.7 +2.3 51, 762, 400 1, 950, 900 52, 764, 800 2, 027, 300 +1.9 +3.9 53, 713, 300 54, 792,100 +2.0 711, 886, 600 726, 683, 900 + 2.1 Share liability at end of month: Private share accounts (number) Paid on private subscriptions Treasury and H. 0. L. C. subscriptions Total 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 The Mail Bag UR Certificate of Insurance was issued July 11 and our assets have grown from $570,432 on July 1 to $575,638 on October 1, an increase of over $5,200. Although we have had only a few months' experience with insured accounts, we have already been rewarded by the receipt of many new accounts while others have reopened closed accounts and many present depositors have taken advantage of this new security by depositing funds in their accounts. Despite the withdrawals we experienced, most of which we feel were very much needed funds and which would have been withdrawn sooner had they not been restricted, our deposits have increased more than $13,000 from July 1 to October 1. At least 75 percent of this increase can be attributed to new funds. It is indeed a pleasure to know that this institution is again functioning as a going savings O January 1937 and loan company and we are only too glad to be able to say that the insurance of accounts is mainly responsible for this change for the better. * * * * * Conditions here have been rather unusual. In case it has not been called to your attention, this institution was taken over for liquidation by the State under Clause 687-21 on February 15, 1934. Two dividends of 10 percent each were paid by refinancing mortgages through the H. O. L. C. A movement was then started to reorganize the institution, and as the plans progressed we applied for the insurance of accounts based on the reorganization plan. The plans provided for cancelation of all outstanding stock and that all depositors accept a voluntary write-down of 15 percent of the amount of their original deposit. Slightly over (Continued on p. 141) 137 Federal Savings and Loan Insurance Corporation B During the same 30-day period, 26 Statechartered associations, 11 converted Federal savings and loan associations, and 2 newly organized Federals submitted applications for insurance. These 39 associations had assets at the time of application of $26,773,654. For the two months, October and November, 171 insured State-chartered savings and loan associations sent in comparable reports of their activities (table 2). These associations on November 30 had $254,669,600 in assets. They represented ETWEEN November 15 and December 15, 1936, the share accounts in 30 savings and loan associations were insured by the Federal Savings and Loan Insurance Corporation. Sixteen of these 30 associations operate under the charter of the State in which they are located; 13 are Federal savings and loan associations converted from State charter; and 1 is a newly organized Federal association. As of December 15, there were 1,540 insured associations with assets of $1,131,800,000 and representing 1,272,000 shareholders (see table 1). TABLE 1.—Progress of the Federal Savings and Loan Insurance Corporation—Applications received and institutions insured APPLICATIONS RECEIVED State-chartered associations Converted F. S. and L. A New F. S. and L. A Total Cumulative number at specified dates Assets (as of date of application) Dec. 31, Dec. 31, Nov. 15, Dec. 15, 1935 1936 1936 1934 Nov. 15, 1936 Dec. 15, 1936 53 134 393 351 480 575 631 601 646 657 612 648 $776,194, 579 594, 083, 796 14, 408, 499 $793, 325,461 603, 703,143 14, 431, 924 580 1,406 1,878 1,917 1, 384, 686, 874 1, 411, 460, 528 INSTITUTIONS INSURED State-chartered associations Converted F. S. and L. A New F. S. and L. A Total Cumulative number at specified dates Number of shareholders Assets Share and creditor liabilities Dec. 31, Dec. 31, Nov. 15, Dec. 15, 1934 1935 1936 1936 Dec. 15, 1936 Dec. 15, 1936 Dec. 15, 1936 593,102 575, 714 103, 789 $451, 597, 354 565, 641, 554 114, 638, 763 $399, 697,291 523, 022,409 112,217, 996 1,540 1, 272, 605 1,131, 877, 671 1, 034, 937, 696 4 108 339 136 406 572 331 545 634 451 1,114 1,510 347 558 635 1 Beginning May 15,1936,figureson number of associations insured include only those associations which have remitted premiums. Earlierfiguresinclude 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 will be brought up to date after June 30 and December 31 each year. 138 Federal Home Loan Bank Review 51 percent of the total number of insured State-chartered associations but had approximately 57 percent of the total assets. The trend in activity between these two months has been generally downward: share investments dropped 7 percent and mortgage loans 16.6 percent. A decline is characteristic of the fall season. The continued growth of these associations is reflected in the increase in their share liability between the two reporting months. In November, the total share liability was $149,377,000—an increase of one million dollars over October. Private investors have subscribed to 93 percent of the total amount, and the Treasury and Home Owners' Loan Corporation to the remaining 7 percent. During November, the H. 0. L. C. increased its subscriptions in the shares of these associations by $895,000. Although, as has been mentioned, private share investments were TABLE 2.—Monthly 7 percent less in November than October, their drop was offset by a decrease of 20 percent in repurchases. As of the end of November Federal Home Loan Bank advances outstanding to these associations were $10,746,900. This was 3.6 percent more than at the end of October. During the same month, money borrowed from other sources decreased 4.2 percent. The decrease in the volume of mortgage loans made in these two months has been general except in regard to loans for refinancing which increased 4.2 percent. Of the total loans made during November, 29.4 percent went for new construction, 35.6 percent for purchase of homes, 20.4 percent for refinancing, 5.8 percent for reconditioning, and 8.8 percent for other purposes. At the end of November the total mortgage loans outstanding was $166,955,200. operations of 171 identical insured State-chartered savings and loan associations reporting during October and November 1936 October November Change October to November 273, 581 280, 259 Percent +2.4 $139,178,000 9, 096, 900 $139, 385,100 9, 991, 900 +0.2 +9.9 148, 274, 900 149, 377, 000 +0.7 Private share investments during month Repurchases during month 2, 823, 300 2, 941, 400 2, 621, 700 2, 353, 600 -7.1 -20.0 Mortgage loans made during month: a. New construction b. Purchase of homes c. Refinancing d. Reconditioning e. Other purposes 1, 435, 400 1, 569, 000 754,100 322, 800 549, 900 1,134, 600 1, 376, 700 785, 700 223, 400 341, 700 -21.0 -12.2 +4.2 -30.8 -37.8 4, 631, 200 166, 068, 000 3, 862,100 166, 955, 200 -16.6 +0.5 10, 372, 600 2, 315, 700 10, 746, 900 2, 218,100 + 3.6 -4.2 12, 688, 300 12, 965, 000 +2.2 252, 690, 900 254, 669, 600 +0.8 Share liability at end of month: Private share accounts (number) Paid on private subscriptions Treasury and H. O. L. G. subscriptions Total 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 January 1937 139 Home Owners' Loan Corporation TABLE 1.—H. 0. L. C. subscriptions to shares of savings and loan associations—Requests and subscriptions] Uninsured State-chartered members of the F. H. L. B. System Insured State-chartered associations Federal savings and loan associations Total Number Number Number Number Amount Amount Amount Amount (cumu- (cumulative) (cumu- (cumulative) (cumu- (cumulative) (cumu- (cumulative) lative) lative) lative) lative) Requests: Dec. 31, 1935 June 30, 1936 July 31, 1936 Aug. 31, 1936 Sept. 30, 1936 Oct. 31, 1936 Nov. 30, 1936 Dec. 19,1936 Subscriptions: Dec. 31, 1935 June 30, 1936 July 31, 1936 Aug. 31, 1936 Sept. 30, 1936 Oct. 31, 1936 Nov. 30, 1936 Dec. 19, 1936 1 $1,131, 700 2, 506,700 2, 826, 700 2,740, 700 2, 789, 700 3,114, 910 3, 500, 710 3, 705, 710 27 60 66 70 71 76 82 88 i 2 100, 000 21 689,000 27 1,069,000 33 1,144, 000 38 1, 312, 000 44 | 1, 647, 200 | 41 1, 547, 200 43 1, 603, 000 33 130 150 172 192 229 253 273 $2, 480, 000 10, 636, 200 11, 856, 200 14,134, 900 15, 478, 900 17, 846, 400 19, 403, 900 20, 866, 900 24 118 134 150 171 212 236 247 1, 980,000 474 17, 766, 500 500 9, 636, 600 1,392 52, 817,100 1,531 10, 873, 700 1,558 59, 055, 800 1,719 12,158, 700 1, 683 65, 387, 500 1,866 13, 671, 400 i 1,903 75,155, 600 2,112 16, 629, 900 i 2,182 88, 362, 300 2, 438 17,718,900 2, 332 94, 478, 600 1 2,609 18,321,600 2,469 100, 764, 300 2, 759 553 $21,139, 000 1,478 56, 880, 600 1,642 63,173,400 1,824 72, 325, 700 2,026 80, 414, 200 2,260 92,123, 400 2,430 99, 524, 200 2,578 107, 064, 400 613 1,668 j 1, 858 2,066 2,289 2,565 2,765 2,939 $24, 750, 700 70,023, 500 77, 856, 300 89, 201, 300 98, 682,^800 113, 084, 710 122,428,810 131, 637, 010 19, 846, 500 63,142, 700 70, 998, 500 78, 690, 200 90,139, 000 106, 639,400 113, 744, 700 120, 688, 900 1 Refers to number of separate investments, not to number of associations in which investments are made. TABLE 2.—Reconditioning Division—Summary of all reconditioning operations through Dec. 9, 1936 ] Total contracts awarded Period Cases received 2 Number June 1, 1934 through Nov. 11, 1936 Nov. 12, 1936 through Dec. 9, 1936 Grand total through Dec. 9, 1936 Amount Total jobs completed Number Amount 739, 111 5,871 400, 656 $77, 297, 361 5,022 825, 362 391,973 5,410 $74, 696, 637 994, 615 744, 982 405,678 397, 383 75, 691, 252 78,122, 723 1 2 All figures are subject to correction. Includes all cases referred to the Reconditioning Division whether applications from borrowers during period these were being received, property management cases, insurance loss cases, and miscellaneous reconditioning. NOTE.—Prior to the organization of the Reconditioning Division on June 1,1934, the Corporation had completed 52,269 reconditioning jobs amounting to approximately $6,800,000. 140 Federal Home Loan Bank Review T A B L E 3.—Foreclosure cases dispatched to State Counsel and properties Loan Corporation l Period Prior to 1935 acquired by the Home Owners9 Foreclosure cases dispatched to State Counsel Withdrawn and suspended cases2 Properties acquired by voluntary deed and foreclosure • 35 Jan. 1 through June 30 July 1 through Dec. 31 1935 1936 January February March April May June July August September October November Grand total to Nov. 30, 1936.. 535 3,900 7 189 114 983 1,281 1,544 3,190 4,365 4,688 8,113 8,016 8,203 7,278 6,265 4,808 28 49 59 87 145 116 249 335 1,375 1,114 624 324 447 605 669 964 1,440 1,380 1,802 2,420 3,664 3,042 62, 221 4,377 17, 863 1 Figures prior to 1936 are as of the month in which the action took place. Subsequent figures are as of the month in which the action was reported in Washington. 2 Due to payment of delinquencies by borrowers after foreclosure proceedings had been entered. 8 Does not include 6,848 properties bought in by H. O. L. G. at foreclosure sale but awaiting expiration of the redemption period before title and possession can be obtained. In addition to the total of 17,863 completed cases, 77 properties were sold at foreclosure sale to parties other than H. 0. L. G. Mail Bag (Continued from p. 137) 90 percent of the depositors accepted this voluntary write-down and the institution was reorganized on this basis. It was opened on an unrestricted basis. The insurance of accounts was largely instrumental in making the reorganization possible, and the reaction of the depositors to the insurance since reorganization has been splendid. Our total assets at the date of reorganization was $719,000 and although we are unrestricted, to date our total withdrawals have been approximately $34,500, and we have had new deposits and redeposits totaling $6,300. Under the circumstances we consider the withdrawals very satisfactory and due entirely to the fact that the shares are now insured. While the amount of new accounts opened has not been large, yet they are due entirely to the confidence which has been restored by the insurance. * * * * * I have just finished reading your article regarding the renovation of dwelling houses and I feel that it contains some excellent material. January 1937 I am the secretary of a building and loan association that has had to take back several properties during the depression. During 1933 and 1934 we decided to sell a few properties in order to secure some ready cash. The houses were painted with attractive colors on the outside, decorated throughout with soft neutral colors on the inside, all floors were sanded and refinished with the best grade of varnish obtainable, all woodwork was cleaned and varnished, all electric fixtures were replaced with modern fixtures, the bathrooms were modernized and made to look attractive. In fact, each house was renovated just as I would want it to be if I were going to live in it myself. Although the houses were from 15 to 20 years old many of the prospective purchasers thought they were new places until I told them otherwise. After adding the cost of renovation to the original cost of the houses, we were able to sell them at a profit of from 15 to 20 percent for cash during a period when it was almost impossible to sell real estate. I don't believe in renovating a house in a halfhearted manner. If you are going to renovate it at all, do a complete job of it. 141 Directory of Member, Federal, and Insured Institutions Added during November-December I.—INSTITUTIONS ADMITTED TO MEMBERSHIP IN THE FEDERAL HOME LOAN BANK SYSTEM BETWEEN NOVEMBER 16, 1936, AND DECEMBER 19, 1936 * (Listed by Federal Home Loan Bank Districts, States, and cities) DISTRICT NO. 9 LOUISIANA : Opelousas: St. Landry Homestead Association, 121 West Landry Street. TEXAS : Georgetown: Georgetown Building & Loan Association. Seguin: Seguin Building & Loan Association. Winnsboro: Winnsboro Building & Loan Association. DISTRICT NO. 1 MASSACHUSETTS : Boston: Trimount Co-operative Bank, 73 Tremont Street. DISTRICT NO. 2 NEW YORK: Long Island City: . . Central Permanent Bulding & Loan Association, 37-11 Thirtieth Street. DISTRICT NO. 3 PENNSYLVANIA: Philadelphia: . _ _ ^T x, Banater Building & Loan Association, 1621 North Fifth Street. Old Hickory Bulding & Loan Association of the City of Philadelphia. 3080 Frankford Avenue. South Broad Street Building & Loan Association of Philadelphia, Corner Broad & Federal Streets. DISTRICT NO. 4 DISTRICT NO. 10 NEBRASKA : Wymore: Wymore Bulding & Loan Association. OKLAHOMA : El Reno: Investors Building & Loan Association of El Reno. DISTRICT NO. 11 MONTANA : Billings: Federal Building & Loan Association. Butte: United States Building & Loan Association, 79-81 West Park Street. WASHINGTON : Seattle: Provident Savings & Loan Association, 3318 WhiteHenry-Stuart Building. DISTRICT NO. 12 HAWAII : SOUTH CAROLINA: Hartsville: . . Palmetto Perpetual Building & Loan Association. DISTRICT NO. 5 OHIO : Bucyrus: Peoples Savings & Loan Company, Sandusky Street. Cincinnati: Conservative Savings & Loan Company, 404 East Fifth Street. Westerville: Home Savings Company. DISTRICT NO. 6 INDIANA : Shelbyville: Union Building Association, 23 West Washington Street. South Bend: Industrial Savings & Loan Association of South Bend, 207 South Main Street. Honolulu: Honolulu Building & Loan Association, Limited, 1025 Alakea Street. WITHDRAWALS FROM THE FEDERAL HOME LOAN BANK SYSTEM BETWEEN NOVEMBER 16, 1936, AND DECEMBER 19, 1936 MARYLAND : Baltimore: Lakeland Building & Loan Association, Hollins Ferry Road. Madison & Bradford Street Permanent Building Association, 901 North Patterson Park Avenue. Reliance Loan & Savings Association, Corner Patterson Park Avenue & Fayette Street. IL—FEDERAL SAVINGS AND LOAN ASSOCIATIONS CHARTERED BETWEEN NOVEMBER 16, 1936, AND DECEMBER 19, 1936 DISTRICT NO. 7 DISTRICT NO. 1 ILLINOIS : Chicago: General Pulaski Building & Loan Association, 13420 Brandon Avenue. Peru: Edgar County Building & Loan Association. 1 During this period 2 Federal savings and loan associations were admitted to membership in the System. 142 MASSACHUSETTS : Brookline: Brookline Federal Savings & Loan Association, 1318 Beacon Street (converted from Coolidge Cooperative Bank). Whitman: Mutual Federal Savings & Loan Association of Whitman, 570 Washington Street (converted from Whitman Co-operative Bank). Federal Home Loan Bank Review PEN N SYLVANIA : DISTRICT NO. 3 Philadelphia: Second Federal Savings & Loan Association of Philadelphia, 1533 Orthodox Street (converted from Thomas E. Coale Building & Loan Association) . VIRGINIA : DISTRICT NO. 4 Richmond: Richmond Federal Savings & Loan Association, 1100 Travelers Building. TEXAS: Cisco: Cisco Federal Savings & Loan Association (consolidation with First Federal Savings & Loan Association of Breckenridge, Breckenridge, Texas). III.—INSTITUTIONS INSURED BY THE FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION BETWEEN NOVEMBER 16, 1936, AND DECEMBER 19, 1936 1 DISTRICT NO. 2 DISTRICT NO. 5 KENTUCKY : Newport: Clifton Federal Savings & Loan Association of Newport, Corner Tenth & Monmouth Streets (converted from Clifton Loan & Building Association of District of Clifton, Campbell County, Kentucky). Somerset: Somerset Federal Savings & Loan Association, First National Bank Building. Stanford: Lincoln County Federal Savings & Loan Association of Stanford (converted from Lincoln County Building & Loan Association). OHIO: Delphos: Citizens Federal Savings & Loan Association of Delphos, 153 West Third Street (converted from Citizens Building & Loan Association). Wellsville: Central Federal Savings & Loan Association of Wellsville, 601 Main Street (converted from Central Building & Loan Company). INDIANA : DISTRICT NO. 6 Evansville: North Side Federal Savings & Loan Association, 207 North Main Street (converted from North Side Savings & Loan Association). Fort Branch: Fort Branch Federal Savings & Loan Association (converted from Fort Branch Building & Loan Association Number Eight). Mishawaka: Peoples Federal Savings & Loan Association, 112 Lincoln Way Street (converted from People's Building & Loan Association). MICHIGAN : Charlotte : Eaton County Federal Savings & Loan Association, 316 East Lovett Street. COLORADO: DISTRICT NO. 10 Denver: Denver Federal Savings & Loan Association, 338 Fifteenth Street (converted from Denver Building & Loan Association). CALIFORNIA : DISTRICT NO. 12 Oakland: Alameda County Federal Savings & Loan Association, 1801 Franklin Street. San Mateo: Peninsula Federal Savings & Loan Association, 235 Second Avenue (converted from Peninsula Building & Loan Association). CANCELATIONS OF FEDERAL SAVINGS AND LOAN ASSOCIATION CHARTERS B E T W E E N NOVEMBER 16, 1936, AND DECEMBER 19, 1936 CALIFORNIA : Culver City: First Federal Savings & Loan Association of Culver City, 10859 Oregon Avenue (charter canceled because of failure to complete organization). INDIANA : South Bend: Fourth Federal Savings & Loan Association of South Bend, 122 North Main Street (consolidation with First Federal Savings & Loan Association of South Bend, South Bend, Indiana). TENNESSEE : McMinnville: First Federal Savings & Loan Association of McMinnville (consolidation with Murfreesboro Federal Savings & Loan Association, Murfreesboro, Tennessee). January 1937 NEW YORK: Herkimer: Herkimer Co-operative Savings & Loan Association, 110 Park Avenue. New York: American Co-operative Savings & Loan Association, 1123 Broadway. Enterprise Savings & Loan Association, 1123 Broadway. DISTRICT NO. 3 PENNSYLVANIA: Philadelphia: Arthur P. Keegan Building & Loan Association, 1532 Point Breeze Avenue. First Italo-American Building Association of Philadelphia, 924 West Passyunk Avenue. James Martin Building & Loan Association, 507 East Tulpehocken Street, Germantown. WEST VIRGINIA: Charleston: West Virginia Building & Loan Association, 226% Capitol Street. Fairmont: Marion County Building & Loan Association, 309 Monroe Street. DISTRICT NO. 4 MARYLAND : Baltimore: Premier Building Association of Baltimore City, 2880 Hillen Road. SOUTH CAROLINA: Columbia: Standard Building & Loan Association, 1211 Washington Street. DISTRICT NO. 5 KENTUCKY: Covington: Star Permanent Building Association of Covington, Ky., 271 Pike Street. OHIO : Coshocton: Home Building, Loan & Savings Company, 401 Main Street. Glandorf: Glandorf German Building & Loan Company. DISTRICT NO. 6 INDIANA : Frankton: Frankton Building & Loan Association. Kentland: Kentland Building & Loan Association. Michigan City: Michigan City Loan & Building Association, 311 Franklin Street. Princeton: Peoples Building, Loan & Savings Association of Princeton, Indiana, 219 West Broadway. DISTRICT NO. 8 SOUTH DAKOTA: Lemmon : Lemmon Building & Loan Association. DISTRICT NO. 9 TEXAS: Mesquite: Mesquite Building & Loan Association. 1 During this period 15 Federal savings and loan associations were insured. 143 DISTRICT NO. 10 OKLAHOMA: Woodward: W o o d w a r d B u i l d i n g & L o a n Association, 914 Main Street. n m T m r T NO 11 m M m u «u. ±i WASHINGTON : Spokane: Citizens Savings & L o a n Society, 126 W a l l Street. 144 DISTRICT NO. 12 CALIFORNIA: L O S Angeles: Great W e s t e r n B u i l d i n g & L o a n Association, 328 West N i n t h Street. S o u t h e r n California B u i l d i n g & L o a n Association, street. 431 W e s t Fiftn Whittier: M u t u a l B u i l d i n g & L o a n Association of W h i t t i e r , 117 Greenleaf Avenue. Federal Home Loan Bank Review U. S. GOVERNMENT PRINTING OFFICE: 1937 FEDERAL HOME LOAN BANK DISTRICTS _ • BOUNDARIES OF FEDERAL HOME LOAN BANK DISTRICTS. FEDERAL HOME LOAN BANK CITIES.
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