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FEDERAL
HOME
LOAN
BANK
Vol.
12, No. 10
Washinston, D. C
JULY J946
IN THIS ISSUE
Financial Requirements of the V E H P
The Trend of Member Association Assets DurNfi the W a r
Thrift and Mortgage Financing Operations of Banks
W h o Holds the Backlog of Savings?
FEDERAL HOME LOAN BANK
m
Contents
Page
F I N A N C I A L REQUIREMENTS O F THE
EMERGENCY H O U S I N G P R O G R A M
m No. 10
THE TREND O F MEMBER
DURING THE W A R
VETERANS1
285
ASSOCIATION
ASSETS
289
W H O HOLDS THE BACKLOG OF SAVINGS?
295
THRIFT A N D M O R T G A G E F I N A N C I N G
OF BANKS
298
OPERATIONS
JULY 1946
The Federal Home Loan Bank Review
is published monthly by the Federal
Home Loan Bank Administration under
the direction of a staff editorial committee. This committee is responsible
for interpretations, opinions, summaries,
and other text, except that which appears in the form of official statements
and signed articles.
Communications concerning material
which has been printed or which is desired for publication should be sent to
the Editor of the Review, Federal Home
Loan Bank Building, Wellington 25,
D. C
The Federal Home Loan Bank Administration assumes no responsibility for
material obtained from sources other
than itself or other instrumentalities of
the Federal Government.
STATISTICAL D A T A
New family dwelling units
Building costs
Savings and loan lending
Mortgage recordings
Gl Lending
F H A activity
Federal Home Loan Banks
Insured savings and loan associations
Share investments and repurchases
310-311
311-312
312-313
313-314
314
314
314
315
315
REGULAR DEPARTMENTS
News notes
Worth repeating
Election and appointment of board of directors in F H L
Bank of San Francisco
.
Monthly survey.
Directory changes of member, Federal and insured institutions
Amendment to Rules and Regulations
284
294
302
305
309
309
Contents of this publication are not copyrighted
N A T I O N A L HOUSING AGENCY
Wilson W. Wyatt,
Administrator
FEDERAL HOME LOAN BANK
ADMINISTRATION
John H. Fahey, Commissioner
SUBSCRIPTION P R I C E OF REVIEW.—A copy of the R E V I E W is sent to each member and insured i n s t i t u t i o n w i t h o u t charge. To others t h e a n n u a l subscription price,
which covers the cost of paper and printing, is $ 1 . Single copies will be sold a t 10
cents. Outside of the United States, Canada, Mexico, and the insular possessions, subscription price is $1.60 ; single copies, 15 cents. Subscriptions and orders for individual copies should be sent with remittances to t h e Superintendent
of
Documents,
Government Printing Office, Washington 25, D. C.
APPROVED BY T H E BUREAU OF T H E BUDGET
Th,
REVIEW-
Brief
Financial requirements of the Veterans*
Emergency Housing Program
N H A estimates indicate t h a t more t h a n $16 billion will be required
to finance the V E H P — $ 1 3 . 8 billion for p e r m a n e n t lending, a n d $2.5
billion for constructions loans in 1946 a n d 1947, plus additional funds
to cover construction t o be completed in 1948. Non-program
demands are expected to t o t a l about $13 billion.
Almost half of this t o t a l m a y be realized by r e p a y m e n t s of the outstanding mortgage debt. An unprecedented two-year rise of $15.2
billion is expected in the residential mortgage debt. F r o m roughly
$26 billion at the end of 1945, t h e net increase m a y bring t h e t o t a l t o
$31.4 billion at the close of 1946 a n d $41.2 billion by t h e end of 1947.
T h e potential resources of t h e home financing industry indicate
a d e q u a t e capacity to meet these requirements through three major
channels: individual savings invested in mortgage lending institutions;
liquid assets currently held a n d potential direct investments by
individuals; a n d secondary credit facilities of the F H L B System.
[Page 285.}
The trend of member association assets
during the war
Assets of savings and loan m e m b e r s of the F H L B System increased
almost 60 percent during t h e war a n d stood at nearly $7.7 billion a t
last year-end; net additions t o savings accounts totaled $2.8 billion.
Almost half of both of these gains occurred in 1945. The average size
of member associations went above t h e $2-million m a r k .
A most significant shift in asset structure was t h e addition of $2
billion to Government bond holdings which a t the close of last year
equaled more than one-fourth of t o t a l assets. In four years, mortgage
loans outstanding rose $900 million, b u t repayments within 3 percent of
the 1941-1945 average balance o u t s t a n d i n g indicated a nearly complete
turnover in this portfolio.
Government investments were substantially reduced; t o t a l borrowed
money rose $86 million. Reserves a n d undivided profits went up 63
percent which maintained the prewar reserve ratio. [Page 289.}
Who holds the backlog of savings?
Although wartime savings of the American public reached an unprece d e n t e d volume—$130 billion by t h e end of 1945—over half are
owned by only 10 percent of t h e population, while a quarter of t h e
people hold no liquid assets at all. T h e majority of spending units
have no checking or savings accounts b u t nearly two out of three
own some savings bonds. This concentration of personal savings is
bound t o have significant repercussions on postwar spending p a t t e r n s .
[Page 295.]
M a y highlights
NHA estimates of VEHP progress
through May 31 indicate 406,000
units actually under way. This is 34
percent of 1946 goal. Conventional
construction accounted for two out of
every three units, with conversion
of existing dwellings and re-use of
war housing making up most of the
balance.
Construction costs continued to increase, with a 1-percent gain registered by b o t h the F H L B A s t a n d a r d
house index and the BLS series for
wholesale building materials. Gains
during past few m o n t h s have been a t
an accelerated rate.
N e t inflow of private savings into
all s a v i n g s a n d l o a n a s s o c i a t i o n s
a m o u n t e d to $100 million—the largest for any m o n t h in 1946.
Repurchase ratios continued to be about
10 points above last year's levels.
New mortgage lending by these institutions totaled $360 million, bringing t h e 1946 aggregate to almost $1.5
billion. Lending during the past
three months—March, April and
May—has been at an annual clip of
better than $4 billion. M a y loans
for new construction were nearty half
again as great as the prewar high.
Total mortgages of $20,000 or less
recorded by all lenders were approaching the rate of $1 billion a
month; May total, $964 million.
Termination of labor-management
difficulties during M a y and early
J u n e brought peace and relative quiet
to the production scene for t h e first
time in several m o n t h s . T h e Federal Reserve industrial production
index went down 5 points during
May, b u t June output was probably
the best so far this year.
Savings and toon lending
May 1941-1946
$400
18
Thrift and mortgage financing operations of banks
I n general, 1945 accentuated wartime trends in insured commercial
and m u t u a l savings b a n k s . Assets, Government bond holdings and
private savings soared t o new highs. However, a slight decline was
noted in t h e rate of savings in t h e last half of last year.
Residential mortgage loan portfolios of insured commercials increased for the first t i m e since 1942, while m u t u a l savings banks
showed their smallest wartime decline in this respect. Real estate
owned by b o t h types of b a n k s again dropped sharply. [Page 298.}
July 1946
nn
rSH
1941
1942
1943
1944
I94S
1946
F.Rt.B.A.
283
Building materials bottlenecksjattacked
Bottlenecks in the lumber and
steel industries were the targets of
two recent CPA moves. Action in
these cases is expected to increase
construction lumber reserves by 4
billion feet, hardwood flooring by 270
million feet annually, and to counteract the effects of recent work stoppages in steel and coal.
In amending PR 33, the CPA extended Government control to the
production of all sawmills and increased the amount of each mill's
and distributor's reserves. In addition, it raised the quantities of
construction and hardwood flooring
lumber which distributors and manufacturers can receive, and changed
the kinds of orders for which lumber,
millwork and hardwood flooring can
be sold.
The second action which will apply
to the third quarter of 1946 established an emergency distribution
system for steel. This new plan provides for certified orders to be given
preference in production and shipments by steel mills and warehouses.
These orders, certain of which may
be self-certified while others require
CPA authorization, are to insure that
the steel will be used in the manufacture of specified critical items.
Housing products which may be selfcertified are: pressed steel bathtubs;
sinks and lavatories; warm air and
floor furnaces; furnace pipe, fittings
and duct work; and steel registers
and grills.
F H A loans on existing
properties continued
Under the authority of an Act of
Congress signed by the President on
July 1, the Federal Housing Administration will be able to continue insuring mortgages on existing homes.
Public Law 480 amends Section
203 (a) of the National Housing Act
by removing both the termination
date and the limitation of insurance
on existing homes to 35 percent of all
insurance.
In commenting on the new Act,
the FHA Administrator stated that
this year the volume of FHA mortgage insurance on existing homes has
been larger than ever before.
Home research
center established
Plans for a new home research
center to help solve building problems
HOUSING CONSTITUTES OR PROVIDES APPROXIMATELY:
OF ASSESSED VALUATION OF
ALL URBAN PROPERTY
SUBJECT TO LOCAL
PROPERTY TAXATION
284
have been approved by the board of
trustees of the University of Illinois.
Covering a four-block area of the
Urbana campus, the new project
would consist of a $400,000 demonstration center and production yard
surrounded by three blocks of test
houses. The plans for the center
were developed under the University's Small Homes Council.
The demonstration center and
production yard will permit applied
experiments which are impossible in
the fixed surroundings of individual
research homes. Here, for such
purposes as photography or demonstration, a home can be built with
cutaway sections, or without a roof.
Full-size structural elements such as
actual kitchens or farmhouse work
rooms can be built, tested and displayed in the center. It will include
facilities for short courses and related
activities of interest to builders,
dealers, contractors, workers and the
general public.
Among the individual test houses
around the demonstration plant will
be homes for technical research and
some for family occupancy for
studies involving typical use. Research will cover such fields as
materials, construction, operation,
landscaping and block layouts.
Vacancy ratio almost
non-existent
Only 803,000 habitable dwelling
units were on the sales or rental
market last November, according to
a study made by the Bureau of the
Census at the request of the National
Housing Agency. This represented
a vacancy ratio of 2 percent for the
country at large, but only 1 percent
in urban areas. Furthermore, locality surveys made since that time
indicate that the total vacancy percentage is even less today.
A breakdown by type of locality
shows that 716,000 of these available
units were in nonfarm areas, 252,000
in urban places, 464,000 were rural
nonfarm dwelling units and 87,000
rural-farm vacancies.
Federal Home Loan Bank Review
FINANCIAL REQUIREMENTS OF THE VETERANS'
EMERGENCY HOUSING PROGRAM
Home financing institutions face the challenging prospect of
providing $16 billion in mortgage money if the VEHP goal of
2,450,000
privately
owned homes is met.
The outstanding
debt on residential properties may jump more than 50 percent
by the end of 1947.
•
T H E greatest housebuilding surge this nation
has ever known is now under way. To assure
the construction of 2,700,000 homes to provide
shelter for returning servicemen and their families,
all sectors of the construction world, the architect
and the land developer, the builder and subcontractor, the journeyman and his helper, the
mortgage lender and the material producer are
all setting their sights, preparing their programs
and rolling up their sleeves. Provisions have
been made under the Veterans' Emergency Housing Program to facilitate and integrate the efforts
of these private individuals and institutions by
breaking existing bottlenecks and by anticipating
those which may arise in the course of the program.
Top priority has been given to expansion of
production of critical building materials and construction labor supply. However, it has generally
been assumed that the supply of mortgage funds
will be adequate to provide for the needs of the
program as well as non-program requirements.
Estimates of the volume of funds necessary for
mortgage purposes during the next two years,
prepared by the Economics and Housing Finance
Branch of the Office of the Administrator, National
Housing Agency, in general, support this impression. There is some probability, however, that as
home construction gets into full stride several
frictional spots may develop which will present a
challenge to the home financing industry.
New construction under VEHP
Compared with recent years, the volume of
home mortgage investments needed to meet the
target of the program is indeed staggering. Of
the goal of 2,700,000 new units established under
this housing program, 200,000 will be temporary
re-use units financed with public funds, 50,000 will
be provided by trailers, and 2,450,000 units are
expected to be financed by private funds amounting to $13.8 billion for permanent mortgages
July 1946
alone. In deriving the estimate for new construction under V E H P it was assumed that the
average value of all dwelling units constructed
under the program will be about $6,500 and the
average mortgage $5,850, or 90 percent of the
value of the property. A large volume of these
homes will undoubtedly be financed with 100percent GI loans, and a smaller number of units
purchased with a down payment or without debt.
Rental housing units may be constructed under
the reactivated FHA Title VI allowing 90-percent
financing, or with conventional loans.
Related to the requirements for permanent
loans on new construction is the amount necessary
to finance the construction itself. I t is estimated
that the entire program will require in excess of
$11 billion in construction loans, but because of
the repayment of these funds upon completion of
the dwellings or conversion to long-term mortgages, a revolving fund of $2.5 billion should
suffice. The average monthly requirement dur-
PROGRESS OF THE VEHP
406,000 units started account for 34 percent of 1946 goal of 1,200,000
Number
started
Type of unit
Total
New conventional . . _
Prefabs
Temporary re-use—_ _
Conversions- .
_
Trailers
_.
_
_
__ _.
._
._
406,000
_ •
- -
i 268, 000
2 10,000
s 69, 000
__ . . . ___ ._ ___
_
_
4 47, 000
5 12, 000
1
Data are from Bureau of Labor Statistics, based on building
permits.
May figures are preliminary.
2
Based on preliminary results of NHA survey of prefab manufacturers' production.
a Data furnished by Federal Public Housing Authority. Starts
are measured in quota units. The total quota units are somewhat
less than the total number of living accommodations since 2 dormitory units represent 1 quota unit.
* Data from Federal Housing Administration. Priority authorizations adjusted to allow for estimated number of authorizations not
resulting in conversion starts and the time lag between authorization
and
construction start.
5
Factory shipment data as obtained from U . S . Bureau of Census.
Includes preliminary NHA estimate for May.
285
TOTAL
MS
RESIDENTIAL
MORTGAGE DEBT
OUTSTANDING
AT YEAR END, 1929-1945
PROJECTED^
I
— _ . . /
ESTIMATED
1
1
]I
Q\
!
I
I
I
I1
I
I1
I
l _ l
I1 ,„I
1,
i
!
I
I '
1929
I93t
1933
1935
1937
1939
1941
1943
1945 1947
SOW?CC>-J92S-W44, Surw of Carrmt 8ti$in**s, Sept. « » 5
'..;??^i^iiKiiNMMMi»lfnnt1«Hi
'' ''~
I945-I94?j Economics and Housing Finance 8raneh,N.H.A.
:>:*WmmWilil!i&*# »*m tommatl»mi^
ing the course of 1946 and 1947 is somewhat less
than $2 billion, while the amount of construction
loans outstanding at the end of 1946 and 1947 is
estimated at $2.1 and $2.2 billion, respectively.
The gross financial requirement for the total
program is then $13.8 billion for permanent
lending plus $2.5 billion for construction loans, a
sum of $16.3 billion. The requirements for 1946
and 1947 amount to $4.9 billion and $10.5 billion,
or $15.4 billion for both years. These annual
estimates include permanent loans required during
the year and construction loans outstanding at
year-end, but omit the volume of permanent
mortgages needed for 450,000 units begun in 1947
but not completed until the following year.
Non-program requirements
In addition to the VEHP, consideration must
be given to the non-program demands on financial
resources. In 1946 roughly $730 million worth of
permanent mortgages will be placed on units
begun in 1945. In addition, data for the first four
months of the year indicate that approximately
$8.3 billion in mortgages may be issued during the
full year 1946 to finance the purchase of existing
homes, to refinance existing mortgages, and to
provide for reconditioning and other purposes.
Because of the anticipated decline in transfer of
existing homes as the completion of new dwelling
units hits full stride, the financial requirements in
1947 for existing dwellings is expected to be
approximately one-third less than the 1946 estimate, or in the vicinity of $5.5 billion.
Thus, during 1946 and 1947, total program and
non-program mortgage lending for residential purposes is estimated at $14 and $16 billion, respec286
tively, or an aggregate of $30 billion. Almost half
of this amount may be realized by repayments on
the outstanding mortgage debt. This is a combination of normal amortization and prepayments
together with abrupt termination of outstanding
mortgages brought about by sales transactions and
refinancing. Sustained high incomes and a large
volume of refinancing will bring mortgage repayments in 1946 to a level 40 percent above the
previous year, according to indications observed
during the first four months. However, in 1947
repayments are expected to return to a level
approximating that of 1945.
If the balance of the need is met, the total
residential mortgage debt of the nation will increase $15.2 billion in two years, an unprecedented
rise. From roughly $26 billion at the end of 1945,
the net increase in mortgage debt will bring the
outstanding total to $31.4 billion at the end of
1946 and $41.2 billion by the end of 1947.
In order to view the anticipated increase in
residential debt in proper perspective, it is important to relate it to the entire debt structure.
In 1930 the ratio of residential mortgage debt to
the total net public and private debt outstanding
was approximately 16 percent. The 1946-1947
increase in residential mortgage debt should be
measured against a greatly increased base of
total debt which now stands in the vicinity of
$400 billion. When the 1947 estimate of $41.2
billion outstanding in residential mortgages is
related to this figure, the mortgage volume does
not appear unduly high.
Capacity of industry to meet requirements
Judging from the potential resources of the
home financing industry, the over-all capacity
to meet the requirements will be forthcoming.
Essentially there are three major channels through
which funds can flow into the mortgage market:
(1) the net increase in savings of individuals
deposited in lending institutions; (2) liquid
assets currently held by these institutions and
potential direct investments by individuals; and
(3) the secondary credit facilities of the F H L
Bank System.
Despite the expectation that national income
during the next two years will be sustained at
least at the 1945 level of approximately $160
billion, the amount saved by individuals is expected to decline. During the latter half of the
1930's the increase in savings by individuals in
Federal Home Loan Bank Review
savings and loan associations, mutual savings
banks, insured commercial banks and life insurance companies averaged about $2 billion
annually. During the war years the increase of
savings in these institutions rose sharply, adding
$6.3 billion in 1943, $10.1 billion in 1944, with
preliminary figures for 1945 showing at least an
equal increase.
The net amount of savings placed with mortgage
lenders during this and the coming year will be
conditioned by several factors. The accumulated
demand for consumer and consumer durable goods
may, if prices are not too high and production
adequate, modify traditional expenditure patterns
and absorb much of the funds which would otherwise flow into savings. Another divertive factor
is the resurgence of investment in the stock market
and venture enterprises. The proportion of total
savings deposited with mortgage lenders will be
further conditioned by the rate of return offered
by these institutions in competition with alternative outlets for savings, including the purchase
of Government bonds through the payroll deduction plan. At this point it is difficult to anticipate
the annual increase in 1946 and 1947, but it may
safely be assumed to fall well below the $10 billion
for 1944 and substantially above the annual increase of $2 billion for 1935-1939. It must be
remembered that only part of these funds will
flow into mortgages, for some of these financial
institutions, particularly commercial banks, ordinarily invest only a small portion of their funds in
home financing.
In addition to savings, liquid assets represented
by cash and United States Government securities
accumulated in lending institutions constitute a
second source of mortgage funds. Of course, it
cannot be assumed that more than a fraction of
these amounts will even be potentially available
for investment in mortgages, but they nevertheless
give some indication of magnitude. On one hand,
extensive cash holdings will be required for the
anticipated high level of business activity, while
on the other, the possibilities of reducing U. S.
Government holdings are limited.
However,
different types of institutions hold different relationships to the mortgage market which affect
their long-term asset composition.
At the end of 1945 operating savings and loan
associations held approximately $3 billion in cash
GROSS RESIDENTIAL MORTGAGE FINANCING
REQUIREMENTS DURING 1946 AND 1947 —
1947-
10,5
OTHER
V.E.H.R
5,5
OTHER
TOTAL $29.9 Billion —
of which about one-half
will be met out of repayments
on existing debt
•111
TOTAL $14.7 Billion-
I
l—and the remainder will be added
[
to the outstanding mortgage debt
9.8
DIVISION OF OPERATING STATISTICS
FEDERAL HOME LOAN BANK ADMINISTRATION
July 1946
TOTAL $15.2 Billion—'
287
and Government securities while only 60-65
percent of their assets were in the form of mortgage
loans. Under ordinary conditions a substantially larger proportion of their assets is invested in
mortgages, nearly all of which are on 1- to 4-family
residential properties. The likelihood of conversion of U. S. bond holdings into mortgages is
greatest for this type of institution.
Insured commercial banks hold $113 billion in
liquid assets, b u t because of the predominantly
commercial character of this type of institution,
only a small proportion of these liquid assets can
be expected to be converted into mortgages.
At the end of June 1945, life insurance companies held in excess of $19 billion in cash and
U. S. Government bonds, and about $6.8 billion in
real estate mortgages. In recent years several of
the larger companies have made direct investments in large-scale rental projects and have
thereby played a greater role in financing residential properties than the mortgage data alone
would indicate. The potential increase in mortgage investments by life insurance companies can
be gauged by the fact that their present mortgage
portfolio represents only 20 percent of total assets
while it comprised 40 percent in the late twenties.
Cash and "Governments" held by mutual
savings banks at the end of 1945 totaled more
than $11 billion. Their real estate loans amounted to $4.2 billion of which approximately 60 percent were on 1- to 4-family homes. " M u t u a l s "
operate in 17 states, but their activities are concentrated predominantly in New England and the
Middle Atlantic area.
Individuals have always been an important
element in the mortgage market. In the past
two years this group recorded an average of $1.3
billion of mortgages on nonfarm properties.
Although there are no specific data on the amount
of liquid assets held by those individuals interested
in making mortgage loans, they can be expected
to participate to the extent of approximately $1
billion annually, at least in the next two years.
The third principal source of funds is represented
by the potential credit facilities of the Federal
Home Loan Bank System. This nationwide
system of 11 regional Banks, with 3,700 members
having total assets of more than $9 billion, provides
a reserve credit mechanism for home mortgages
paralleling the role of the Federal Reserve System
in the field of commercial credit and the Farm
Credit Administration in the agricultural field.
288
Summary
Although, it is not possible to draw up a precise
statement of funds available to meet the home
financing needs of 1946 and 1947, nevertheless
these estimates indicate a real challenge to the
supply of credit in the residential mortgage market as the emergency building program approaches
its climax in 1947. Whether these funds will be
forthcoming depends upon the success of the
V E H P on the all-important production front, the
removal of construction cost uncertainties and
developments in the general capital market.
However, the use of the FHA firm commitment
in large volume under the revised Title VI operation and the maximum $4,000 guaranty under the
GI Bill, will undoubtedly go a long way toward
activating hesitant mortgage funds.
Although from a national viewpoint potential
mortgage funds appear adequate, geographic dislocations may occur as the program develops.
This contingency can be met by the utilization of
the existing facilities of the Federal Home Loan
Bank System, the Federal National Mortgage
Association, and of the Reconstruction Finance
Corporation. In addition, the R F C Mortgage Company is collaborating with the Veterans' Administration in the formulation of plans for the establishment of a secondary market for GI home loans.
Through these instrumentalities it will be possible
to channel funds into areas where the local resources are not sufficient to meet the increased
volume of current demands.
In the final analysis, mortgage credit competes
for funds in the general money market. All indications point to competition from other sources,
although the stabilization and possible reduction
of the Federal debt will remove one of the alternative investment outlets. Periods of prosperity
are almost invariably times of rapid capital formation. General industrial expansion will not
only compete for credit but will also draw heavily
for equity capital expansion. In view of the large
volume of reserve bank credit in the commercial
banking system and the wide scope of operations
open to the Federal Reserve System and R F C ,
an acute shortage of money should be avoidable.
The next two years will offer mortgage lenders of
all types unparalleled opportunities for portfolio
expansion. Outstanding mortgages are expected
to increase over 50 percent during this period, the
most rapid increase in the mortgage lending
(Continued on p. 302)
Federal Home Loan Bank Review
THE TREND OF MEMBER ASSOCIATION ASSETS
DURING THE WAR
Comparing
the combined
balance
sheet of all member
savings
and loan associations at the end of 1941 and 1945 reveals the
extensive changes in operation
during the war.
Significant
shifts were also noted during the past year.
•
D U R I N G the war the total assets of all savings and loan members of the Federal Home
Loan Bank System increased 60 percent, growing
from approximately $4.8 billion at the end of 1941
to almost $7.7 billion at the close of 1945. This
growth paralleled the trend shown by nearly all
types of financial institutions during this period as
the nation accumulated the greatest volume of
liquid assets in its economic history.
The net additions to savings accounts in these
member associations during the four-year period
totaled $2.8 billion—more than double the increase of the previous four years. On the other
side of the balance sheet, however, the institutions
were having difficulty in finding outlets for these
incoming funds through their normal investment
channels. The result was an unprecedented rise
in their Government bond accounts.
Despite their rapid rate of growth and lower
rates of return on investment portfolios, the member associations were able to keep pace in the
building of reserves and entered the postwar
period with a slightly higher ratio of reserves to
total assets than prevailed at the beginning of the
war.
That significant shifts took place during the
past year is evident from the fact that this 12month period accounted for well over one-half
of the net addition to mortgage loan accounts
since December 1941. More than a billion
dollars was added to savings accounts. Further,
the rate of asset growth during the past year was
the highest during the entire period and made up
44 percent of the four-year gain. For the first
time the average size of member associations was
above the $2 million mark—$2,100,000 at the end
of 1945, compared with $1,757,000 a year previous.
All in all, the war provided an opportunity for
"tightening the belt" in preparation for the nation's postwar housing program. The effectiveness of these measures is demonstrated by the
lead which savings and loan associations have
July 1946
taken in the financing of GI loans for veterans
and their wholehearted support of the Veterans'
Emergency Housing Program. With an active
campaign for additional savings to supplement
their already liquid position, savings and loan
members of the Bank System are ready to play an
important role in the financing of new home construction and the purchase of existing properties.
Details of the 1941-1945 changes
The condensed balance sheets on pages 292-293
show the trend of principal asset and liability
items from December 31, 1941 through the end
of last year. On the asset side, probably the most
significant shift was the creation of a Government
bond portfolio, which by the close of 1945
amounted to more than one-fourth of total assets.
Savings and loan members of the Bank System
added more than $2 billion of these securities to
an account which amounted to only $75 million
at the time we entered the war. Cash on hand and
in banks increased by more than one-third, reaching a total of $384 million on December 31, 1945.
The net gain in mortgage loans outstanding
from 1941 to 1945 was just over $900 million.
289
Combined statement of condition of all savings and loan members
NOTE: Percentage figures show the ratio
BALANCE SHEET ITEM
BOSTON
COMBINED
Number o f members
3,658
NEW
218
PITTSBURGH
YORK
WINSTON-SALEM
359
437
405
$598,758,170
66.79%
2,011,725
0.22%
1,072,286
0.12%
431,858
0.05%
7,115,700
0.79%
240,248,980
26.80%
1,610,591
0.18%
39,561,805
4.41%
4,443,886
0.50%
611,912
0.07%
584,059
0.07%
ASSETS
advances) $ 4 , 8 2 3 , 4 1 7 , 5 0 3
62.79%
14,813,251
O t h e r l o a n s (including share loans) _ _ _
_ _
0.19%
R e a l e s t a t e s o l d on c o n t r a c t
,
92,623,882
1.21%
18,278,727
R e a l e s t a t e owned
0.24%
71,819,895
F e d e r a l Home Loan Bank S t o c k
,
0.94%
TJ. S . Government o b l i g a t i o n s
2,181,169,251
28.39%
28,759,987
O t h e r I n v e s t m e n t s (including accrued
interest)
0.37%
383,896,226
Cash on h a n d and I n b a n k s
5.00%
53,601,631
O f f i c e b u i l d i n g (net)
.__
0.70%
4,579,360
F u r n i t u r e , f i x t u r e s , and e q u i p m e n t (net)
0.06%
8,534,211
0ther assets
,_.
0.11%
$529,441,263
69.47%
2,391,570
0.31%
139,012
0.02%
913,592
0.12%
5,737,865
0.75%
181,153,533
23.77%
3,544,236
0.47%
32,784,436
4.30%
3,471,529
0.46%
174,047
0.02%
2,372,959
0.31%
$527,463,146
62.57%
1,845,497
0.22%
6,394,465
0.76%
5,929,250
0.70%
6,944,100
0.82%
233,517,261
27.70%
4,829,781
0.57%
49,155,349
5.83%
5,105,196
0.61%
795,659
0.10%
1,039,492
0.12%
$338,490,560
72.07%
1,633,893
0.35%
2,966,822
0.63%
1,269,948
0 .27%
4,351,400
0.93%
90,003,816
19'. 16%
279,105
0.06%
27,275,563
5.81%
2,665,504
0.57%
403,391
0.09%
304,919
0.06%
$7,681,493,924
100.00%
$762,124,042
100.00%
$843,019,196
100.00%
$469,644,921
100.00%
$896,450,972
$
$
$
$
$
F i r s t m o r t g a g e l o a n s (including
interest
and
To t a l a s s e t s
100.00% 1
L I A B I L I T I E S AND C A P I T A L
U. S . Gove rnmen t
,_
Private repurchasable c a p i t a l
Mortgage p l e d g e d s h a r e s
A d v a n c e s from F e d e r a l Home Loan Bank
_
O t h e r b o r r o w e d money
Loans i n p r o c e s s
Other l i a b i l i t i e s
Permanent,
r e s e r v e or guaranty s t o c k
Deferred c r e d i t s to future
Spec!fie
.
operations
reserves
General r e s e r v e s
Undivi ded pro f i t s
T o t a l L i a b i l i t i e s .and C a p ! t a l _
290
.
20,820,970
0.27%
6,509,029,236
84.73%
83,689,173
1.09%
189,982,114
2.47%
134,751,848
1.76%
109,605,174
1.43%
560,000
0.07%
635,684,145
83.41%
36,057,129
.4.73%
12,896,870
1.69%
11,676,500
1.53%
3,388,732
0.45%
5,863,445
0.69%
719,563,247
85.35%
12,495,164
1.48%
15,592,204
1.85%
28,397,641
3.37%
2,042,206
0.24%
5,809,316
0.69%
56,877,076
0.74%
26,411,696
0.34%
8,418,199
0.11%
5,328,887
0.70%
8,845,286
0.12%
359,619,686
4.68%
284,861
0.04%
34,252,695
4.49%
1,123,520
0.14%
31,688,509
3.76%
173,443,466
2.26%
21,942,775
2.88%
19,525,237
2.32%
$ 7 , 6 8 1 , 4 9 3 , 9 24
100.00%
$762,124,042
100.00%
-
51,448
0.01%
-
918,707
0.11%
$843,019,196
100.00%
231,200
0.05%
397,618,274
84.66%
12,555,284
2.67%
15,629,712
3.33%
2,494,778
0.53%
3,422,153
0.73%
4,572,782
0.97%
-
258,848
0.06%
853,687
0.18%
25,485,546
5.43%
6,522,657
1.39%
$469,644,921
100.00%
1,731,000
0.19%
765,773,986
85.42%
8,284,507
0.92%
16,466,650
1.84%
21,345,868
2.38%
13,907,978
1.55%
5,326,534
0.60%
7,478
0.00%
996,556
0.11%
1,080,414
0.12%
40,764,819
4.55%
20,765,182
2.32%
$896,450,972
|
100.00%
Federal Home Loan Bank Review
of the Federal Home Loan Bank System, December 3 1 , 1945
of the items listed to total assets
CINCINNATI
$
812,123,968
56.60%
1,097,987
0.08%
7,353,654
0.51%
3,515,873
0.24%
13,430,400
0.94%
500,261,651
34.87%
6,838,463
0.48%
74,892,035
5.22%
14,000,038
0.97%
445,799
0.03%
794,128
235
458
220
558
PORTLAND
TOPEIA
LITTLE ROCK
DES MOINES
CHICAGO
INDIANAPOLIS
169
127
206
266
LOS ANGELES
$257,443,652 ' $488,865,590
64.15%
52.30%
1,633,949
679,500
0.21%
0.14%
21,568,795
26,728,944
2.83%
5.43%
2,841,834
705,182
0.37%
0.14%
7,933,400
7,951,200
1.04%
1.61%
189,633,732
167,810,478
24.88%
34.09%
3,320,441
1,045,297
0.44%
0.21%
40,946,894
24,347,634
5.37%
4.95%
3,843,011
4,824,552
0.51%
0.98%
535,711
356,286
0.07%
0.07%
1,005,647
380,273
0.13%.
0.08%
$266,460,766
63.71%
504,203
0.12%
4,215,465
1.01%
910,750
0.22%
5,542,500
1.33%
117,883,899
28*19%
1,215,782
0.29%
17,596,124
4.21%
2,946,356
0.70%
185,283
0.04%
751,629
0.18%
$233,809,848
71.92%
1,218,194
0.37%
1,015,587
0.31%
431,766
0.13%
2,713,330
0.83%
67,637,042
20.81%
2,064,181
0.64%
14,079,296
4.33%
1,734,780
0.53%
182,482
0.06%
209,765
0.07%
$182,484,527
67.74%
247,312
0.09%
5,270,286
1.96%
562,050
a . 21%
2,292,200
0.85%
65,078,703
24.16%
584,933
0.22%
10,202,141
3.79%
2,316,685
0.86%
151,461
0.05%
201,048
0.07%
$152,776,628
44.30%
613,617
0.18%
14,279,638
4.14%
199,932
0.06%
2,152,400
0.62%
153,230,026
44.43%
2,531,280
0.73%
15,274,817
4.43%
3,275,817
0.95%
312,784
0.09%
258,413
0.07%
$435,299,385
65.61%
935,804
0.14%
1,618,928
0.24%
566,692
0.09%
5,655,400
0.85%
174,710,130
26.33%
895,897
0.14%
37,780,132
5.69%
4,974,277
0.75%
424,545
0.06%
631,879
0.10%
J
0.06%
1
$1,434,753,996
100.00%
$492,272,998
100.00%
$762,129,004
100.00%
$418,212,757
100.00%
$325,096,271
100.00%
$269,391,346
100.00%
$344,905,352
100.00%
$663,493,069
100.00%
$
$
$
$
$
$
$
$
1,057,025
0.07%
1,244,305,641
86.73%
3,935,792
0.27%
16,149,868
1.13%
17,514,406
1.22%
16,575,734
1.16%
8,798,791
0.61%
15,702,197
1.09%
1,944,971
0.14%
• 1,145,262
0.08%
69,862,047
4.87%
37,762,262
2.63%
$1,434,753,996
100.00%
July 1946
850,000
0.17%
429,821,231
87.31%
644,468
0.13%
11,444,262
2.33%
5,001,196
1.02%
2,662,365
0.54%
2,773,622
0.56%
60,000
0.01%
1,186,369
0.24%
956,203
0.19%
23,749,480
4.83%
13,123,802
2.67%
$492,272,998
100.00%
1,396,662
0.18%
619,795
0.08%
43,866,835
5.76%
10,284,673
1.35%
33,000
0.01%
364,425,266
87.14%
1 , 6 6 7 , 544
0.40%
17,008,580
4.07%
5,735,500
1.37%
5,378,026
1.29%
2,302,952
0.55%
16,100
0.00%
302,587
0.07%
436,059
0.10%
16,244,603
3.89%
4,662,540
1.11%
$762,129,004
100.00%
$418,212,757
100.00%
1,687,100
0.22%
629,076,534
82.54%
4,603,984
0.61%
34,238,286
4.49%
7,410,353
0.97%
18,421,308
2.42%
10,523,474
1.38%
682,000
0.21%
271,699,998
83.58%
1,056,076
0.32%
7,247,288
2.23%
4,997,315
1.54%
2,942,264
0.90%
3,380,112
1.04%
770,700
0.24%
144,751
0.04%
572,388
0.18%
23,330,304
7.18%
8,273,075
2.54%
$325,096,271
100.00%
601,000
0.22%
229,944,089
85.36%
1,219,134
0.45%
2,650,753
0.99%
4,449,775
1.65%
4,975,753
1.85%
2,638,791
0.98%
676,667
0.25%
379,271
0.14%
429,168
0.16%
15,922,655
5.91%
5,504,290
2.04%
$269,391,346
100.00%
2,643,100
0.77%
298,310,025
86.49%
396,080
0.11%
5,863,051
1.70%
12,183,000
3.53%
4,332,877
1.26%
1,590,238
0.46%
1,115,354
0.32%
339,729
0.10%
505,764
0.15%
10,492,373
3.04%
7,133,761
2.07%
$344,905,352
100.00%
4,882,100
0.74%
522,806,800
78.80%
774,011
0.12%
34,794,590
5.24%
13,545,516
2.04%
31,555,778
4.76%
3,831,577
0.58%
8,063,200
1.21%
498,300
0.07%
838,165
0.13%
23,959,820
3.61%
17,943,212
2.70%
$663,493,069 |
100.00%
291
This compares with an increase of more than $1.3
billion in the preceding four-year period. Considering that the volume of new mortgage lending
by member associations during the war was almost
40 percent greater than in the years 1938 through
1941, this points up the high rate of mortgage
repayment and rapid turnover of loan portfolios
which characterized the war years. Loan repayments during the four years came within 3 percent
of the average balance of loans outstanding from
1941 through 1945. This indicates that a nearly
complete turnover of loan portfolios occurred during
the war.
The process of liquidating the real estate owned
account was virtually completed with the elimination of nine-tenths of the balance shown at the
end of 1941. At the start of the war these properties accounted for almost 4 percent of total
association assets, but the $18 million remaining
on the books at the close of last year amounted to
less than one-fourth of 1 percent of total resources
of these institutions.
O n the credit side of the ledger
The 74-percent increase in funds invested by
the public in all member associations during the
past four years amounted to $2.8 billion, to bring
the total of savings accounts in excess of $6.5
billion. The gain of the war years was considerably more than twice the additions to savings
in these institutions from 1938 through 1941—a
comparable length of time.
The flow of funds permitted still further repayment of monies invested by the Treasury and the
Home Owners' Loan Corporation during the early
years of the Bank System. Almost $175 million
of these Government funds were repaid, leaving
a balance of only $21 million. This was less than
one-tenth of the original amount invested by the
Government.
While the total borrowed money at the end of
1945 was $86 million greater than at the start of
the war, all of this increase occurred last year.
More than $200 million was added to the
reserve and undivided profits accounts of member
associations during the four-year period. The
63-percent increase was slightly higher than the
rate of gain in total assets so that the reserve
ratios prevailing at the start of the war were
maintained in spite of the substantial growth
which took place.
Mortgage loans retained their position as the
dominant asset throughout the war, although their
relation to total assets dropped steadily from 82
percent in 1941—the post-depression high—to a
low of 63 percent at the end of 1945. Counter-
Combined statement of condition for member savings and loan associations
[Dollar a m o u n t s are s h o w n in t h o u s a n d s ]
D e c . 31,
1945
Balance sheet i t e m
D e c . 31,
1944
Dec. 31,
1941
C h a n g e D e c e m b e r 31, C h a n g e D e c e m b e r 31,
1944 to D e c e m b e r 31, 1941 to D e c e m b e r 31,
1945
1945
Dollar
amount
Percent
Dollar
amount
Percent
ASSETS
F i r s t mortgage loans
O t h e r loans
R e a l estate sold on c o n t r a c t
R e a l estate o w n e d
F e d e r a l H o m e L o a n B a n k stock
TJ. S. G o v e r n m e n t obligations
Other investments
C a s h on h a n d a n d in b a n k s
Office b u i l d i n g (net)
F u r n i t u r e , fixtures a n d e q u i p m e n t (net)
Other assets.
.
._.
=, 823, 418
14, 813
92, 624
18, 279
71,820
!, 181,169
28, 760
383,896
53. 602
4,579
8,534
T o t a l assets
$4, 273, 721
12, 002
116,747
36,827
62, 251
1,490, 747
22, 976
347, 348
47, 807
4,891
7,445
;3, 918, 967
32, 562
173. 598
189,429
47, 553
75, 244
21, 039
278, 696
47, 229
5,293
8,148
+$549, 697
+ 2 , 811
-24,123
- 1 8 , 548
+ 9 , 569
+690, 422
+ 5,784
+ 3 6 , 548
+ 5 , 795
-312
+1,089
6, 422, 762
4. 797, 758 + 1 , 258, 732
35, 529
5, 500, 972
103, 446
126, 882
63, 527
35,134
52, 279
25, 936
10,311
7,543
313,610
147, 593
195, 692
-14,708
!, 748,001 +1,008,057
130, 777
-19,757
217,881
+63,100
21, 345
4-71,225
+74, 471
66, 786
+ 4 , 598
39,069
+476
26, 519
-1,893
16,044
+ 1 , 302
8,050
+ 4 6 , 010
211,337
+25,851
116, 257
+$904, 451
+12.9
+23.4
- 1 7 , 749
-20.7
- 8 0 , 974
-50. 4
-171,150
+15.4
+24,267
+ 4 6 . 3 + 2,105,925
+25.2
+ 7 , 721
+10.5
+105, 200
+12.1
+ 6 , 373
-6.4
-714
+14.6
+386
+19.6
+23.1
-54.5
-46.6
-90.4
+51.0
+ 2 , 798. 8
+36.7
+37.7
+13.5
-13.5
+4.7
+ 2 , 8 8 3 , 736
+60.1
-41.4
-174,871
+ 1 8 . 3 + 2 , 761,028
-19.1
-47,088
-27.899
+49.7
+ 112.1
+113,407
+212. 0
+ 4 2 , 819
+8.8
+17,808
+1.8
-107
-18.4
- 7 , 626
+17.3
+795
+ 14.7
+148, 283
+17.5
+57,187
-89.4
+73.7
-36.0
-12.8
+531. 3
+64.1
+45.6
-0.4
-47.5
+9.9
+70.2
+49.2
LIABILITIES AND CAPITAL
U . S. G o v e r n m e n t i n v e s t m e n t
P r i v a t e r e p u r c h a s a b l e capital
M o r t g a g e pledged shares
A d v a n c e s from F e d e r a l H o m e L o a n B a n k s
O t h e r borrowed m o n e y
L o a n s in process
O t h e r liabilities
P e r m a n e n t , reserve or g u a r a n t y stock
Deferred credits to future operations
Specific reserves
General reserves
U n d i v i d e d profits
T o t a l liabilities a n d capital
292
20, 821
\, 509,029
83, 689
189, 982
134, 752
109, 605
56, 877
26, 412
8,418
8,845
359, 620
173,444
6, 422, 762
4,797,758
+1,258,732
+19.6
+2,883,736
+60.1
Federal Home Loan Bank Review
Percentage distribution of balance sheet items for all savings and loan members of the Federal
Home Loan Bank System, 1945 and 1944
All savings a n d
loan m e m b e r s
Federal
I n s u r e d state
Uninsured state
B a l a n c e sheet i t e m
3,658
3,656
1,464
1,004
995
1,187
1,197
Percent
62.79
0.19
1.21
0.24
0.94
28.39
0.37
5.00
0.70
0.06
0.11
Percent
66.54
0.19
1.82
0.57
0.97
23.21
0.36
5.41
0.74
0.08
0.11
Percent
60.81
0.17
0.93
0.18
0.99
30.96
0.13
4.97
0.70
0.07
0.09
Percent
65.13
0.14
1.40
0.41
1.03
25.61
0.10
5.27
0.73
0.10
0.08
Percent
62.48
0.18
1.48
0.26
0.90
27.99
0.66
5.21
0.68
0.06
0.18
Percent
66.14
0.15
2.38
0.62
0.93
22.51
0.65
5.66
0.77
0.08
0.11
Percent
68.19
0.27
1.50
0.35
0.86
22.55
0.60
4.77
0.71
0.03
0.17
Percent
70.17
0.35
2.01
0.87
0.89
18.79
0.55
5.39
0.75
0.04
0.19
100.00
100.00
100.00
100. 00
100. 00
100. 00
100. 00
100. 00
0.27
84.73
1.09
2.47
1.76
1.43
0.74
0.34
0.11
0.12
4.68
2.26
0.55
85.65
1.61
1.97
0.99
0.55
0.82
0.40
0.16
0.12
4.88
2.30
0.41
85.49
0.06
3.50
2.24
1.67
0.69
0.90
87.26
0.10
2.83
1.44
0.59
0.78
0.10
0.12
3.76
1.96
0.14
0.12
3.80
2.04
0.22
84.41
0.52
2.07
1.67
1.51
0.91
1.03
0.11
0.11
5.24
2.20
0.39
85.08
1.17
1.77
0.55
0.71
0.97
1.21
0.18
0.12
5.66
2.19
83.29
4.48
0.45
0.67
0.69
0.63
0.25
0.13
0.12
6.20
3.09
82.79
5.51
0.35
0.56
0.23
0.71
0.27
0.19
0.10
6.28
3.01
100.00
100.00
100.00
100.00
N u m b e r of m e m b e r associations
ASSETS
F i r s t m o r t g a g e loans _
O t h e r loans (including share loans)
R e a l estate sold on c o n t r a c t
R e a l estate o w n e d
F e d e r a l H o m e L o a n B a n k stock
U . S. G o v e r n m e n t obligations
O t h e r i n v e s t m e n t s (including accrued i n t e r e s t ) . _
C a s h on h a n d a n d in b a n k s
Office b u i l d i n g (net)
F u r n i t u r e , fixtures a n d e q u i p m e n t (net)
O t h e r assets
T o t a l assets
1,467
LIABILITIES AND CAPITAL
U . S. G o v e r n m e n t i n v e s t m e n t
P r i v a t e r e p u r c h a s a b l e capital
M o r t g a g e pledged shares
A d v a n c e s from F e d e r a l H o m e L o a n B a n k s
Other borrowed money
L o a n s in process
O t h e r liabilities
P e r m a n e n t , reserve or g u a r a n t y stock
Deferred credits to future operations
Specific reserves
General reserves
U n d i v i d e d profits
T o t a l liabilities a n d capital
balancing this trend was the rise in importance of
the Government bond portfolio which rose from
less than 2 percent to 28 percent of total assets
during the same period. The cash account was
maintained at about the same level proportionately, accounting for 5 percent of total assets.
As previously pointed out, real estate owned
dropped from 4 percent to less than one-fourth
of 1 percent.
On the liability side the ratio of private savings
rose from 78 percent to a level of almost 85 percent
of total resources. The ratio of borrowed money
dropped slightly—from 5 to 4 percent. Reserves
and undivided profits inched upward from 6.83
percent to 6.94 percent of total assets.
Changes during 1945
Assets of all member associations rose a billion
and one-quarter dollars during 1945—the largest
gain for any single year. Of this amount, $690
million was reflected in their Government bond
holdings and $550 million in first mortgage loans.
Other gains included $37 million in cash on hand
and $10 million in Federal Home Loan Bank stock
owned by the member institutions. There were
declines of $ 19 million in real estate owned and $24
million in real estate sold on contract.
July 1946
100.00
100. 00
Percentagewise, these changes were: Government bonds, up 46 percent; mortgage loans, up 13
percent; F H L B stock, up 15 percent; cash, up 11
percent; real estate owned, down 50 percent; and
real estate sold on contract, down 21 percent.
Total assets were up almost 20 percent in the 12month period.
The increase of just over $1 billion in private
savings in 1945 was the most striking detail in
changes shown by liabilities and capital accounts.
About $72 million was added to reserves and undivided profits accounts. Borrowed money was up
$134 million. The higher rate of new lending
activity was reflected in a $74-million jump in
loans in process. Repayment of Home Owners 7
Loan Corporation and Treasury investments in
these institutions during the year amounted to
almost $15 million.
The ratio of Government bonds increased from
23 to 28 percent of total assets during 1945.
Mortgage loans were down 4 points to 63 percent.
The ratios of real estate owned, real estate sold on
contract, F H L B stock and cash on hand all
showed small declines.
No account on the credit side of the balance
sheet showed a change of as much as one percentage point in relation to total resources.
293
* * * WORTH REPEATING * * *
BIG DREAMS: " W e h a v e not required t h a t new houses be markedly
b e t t e r t h a n old houses. We h a v e
been content if t h e new house h a d a
few superficial cliches of improvement t h a t were popular a t t h e time
the house was built . . . I t is m y
considered opinion, after m a n y years
of observing and evaluating houses,
t h a t 9 9 % of t h e newly built houses
could have been at least 2 0 % b e t t e r
if t h e y h a d been more thoughtfully
a n d intelligently planned. And a t
no extra cost. T h a t is a n o t h e r way
of saying t h a t a lot of people failed
to get t h e greatest good out of their
money because they failed to d r e a m
big enough d r e a m s . "
Elizabeth Gordon, Editor,
House Beautiful, May 1946.
LET'S BE REALISTIC : " H o m e ownership should be considered less in
terms of sugar-coated romance, nostalgia and sentimentality and more
in terms of satisfying demands of t h e
family budget and t h e h u m a n welfare. ''
Earl S. Johnson, University
of Chicago, Practical Home
Economics, May 1946.
POTENTIAL MARKET: " C o n s t r u c t i o n c o s t s are recognized as t h e critical problem hindering b o t h t h e adeq u a t e production of housing a n d t h e
equitable distribution of t h e available
supply . . . Stated in approximate
terms, t h e potential m a r k e t for new
housing doubles for each $1,000 t h a t
t h e cost of housing is reduced below $5,000. So far, there has not
been enough building in these lower
price ranges to meet either t h e needs
of families or t h e opportunities of the
large m a r k e t . "
Clarence W. Farrier, National
Housing Agency, Journal of
Housing, May 1946.
SKILLFUL LENDER: " N o absolute protection exists against t h e economic
risks of a capitalistic economy. T h e
skill of the mortgage lender is determined by his ability t o conduct his
business in such a m a n n e r t h a t he
avoids or reduces t h e economic risks
which sometimes defy prediction.
T h a t is not an easy task. I t embraces a twofold responsibility to
himself a n d to t h e borrower. The
294
lender not only should make a safe
loan from his standpoint, b u t also a
loan which will prove helpful to t h e
borrower and which the borrower has
a good chance of liquidating."
L. Douglas M e r e d i t h , National Life Insurance Co.,
Insured Mortgage Portfolio,
First Quarter 1946.
A COST OF WAR: " T h e great
housing shortage t h a t now plagues
nearly every u r b a n community in
t h e nation represents one of t h e real
costs of war. Though t h e United
States escaped destruction by b o m b
and shell, t h e economic and social
forces which t h e war set in motion
were equally effective in creating an
enormous deficit of living accommodations."
Samuel J. Dennis, Bureau of
Foreign and Domestic Commerce, Dun's Review, June 1946.
DILEMMA: " T h e lender of institutional funds faces a terrible dilemma.
He must decide whether to m a k e
loans on this basis, depending upon
the Government g u a r a n t y , or to
refuse to depart from t h e standards
of practice t h a t have been ingrained
in institutional lenders since time
immemorial. If he chooses the first
alternative, he moves in t h e direction
of larger and larger dependence upon
a Governmental participation in his
business; if he chooses t h e latter, he
finds it difficult to reconcile his conscience."
Ernest M. Fisher before the
Regional Savings and Mortgage
Conference of the American
Bankers
Association,
Des
Moines, la.
WHY SAVINGS BONDS? " B y diverting into savings bonds t h e excess
monies held by the people we fight
inflation by transferring t h e Government debt to t h e individual as an
investor a n d lay the groundwork for
future prosperity by assuring business a power supply of savings which
can and will be released by individuals according to their desire to buy
goods through regular channels of
industry when legitimate business
men will have goods to sell at fair
prices and at fair profits."
Lewis
man,
U. S.
News
E. Pierson, State ChairSavings Bond Division,
Treasury, in Association
Bulletin, June 14, 1946.
SERVICE: " T h e Congress deliberately
placed upon t h e lenders' shoulders
t h e burden of seeing t h a t t h e veterans
are not afforded credit under conditions carrying certain assurance of
failure; in other words, for seeing
t h a t they are extended credit, t h e
G o v e r n m e n t guaranteeing or insuring a portion thereof, only where the
conditions are such as t o afford reasonable assurance of success.
That
spells service of a high order."
Edward E. Odom, Veteran's
Administration, before 26th
annual conference of the National Association of Mutual
Savings Banks.
THE BOOKSHELF
Although inclusion of title does not
necessarily mean recommendation by
the REVIEW, the following recent publications will be of interest.
THE ECONOMICS
OF
HOUSING.
Laura M. Kingsbury.
1946. 177
p p . $2.50.
Columbia University
Press, 2960 Broadway, New York 27,
N.Y.
THE BOOK OF HOUSES.
John
P. Dean and Simon Breines. Crown
Publishers, 419 F o u r t h Ave., New
York, N . Y. 1946. 144 p p . $2.00.
HOUSES
FOR
VETERANS—NO
CASH DOWN: by Brendon Shea
in The Atlantic Monthly, J u n e 1946.
YOUR
BUILDING
CODE:
By
Miles L. Colean. F e b r u a r y 1946.
29 p p . National C o m m i t t e e on
Housing, Inc., One Madison Avenue,
New York 10, N . Y. 350.
REBUILDING
OUR
COMMUNITIES: By Walter Gropius.
Paul
Theobald, Chicago, 1945. 61 p p .
$1.75.
THE KEY TO YOUR NEW
HOME:
by Lewis Storrs, Jr. $2.75. Whittlesey
House, 1946
YOUR
HOME
TOMORROW:
96
p p . 1945. $1.50. I n d u s t r i a l P u b lications, Inc., 59 E. Van Buren St.,
Chicago 5, 111.
REMODEL
FOR
VETERANS:
A
HANDBOOK FOR DEALERS, CONTRACTORS AND FINANCIAL INSTITUTIONS,
1946. Federal Housing Administration, Washington 25, D. C.
Federal Home Loan Bank Review
WHO HOLDS THE BACKLOG OF SAVINGS?
The Division of Program Surveys, Department of Agriculture, at
the request of the Federal Reserve Board, has conducted a comprehensive national survey of liquid asset holdings, spending and
saving which sheds new light on a hitherto unknown factor in our
economy.
This first report summarizes the major findings.
•
D U R I N G the war American people saved
a larger portion of their income than ever
before and accumulated unprecedented amounts
of liquid assets, primarily in U. S. Savings Bonds
and in savings and checking accounts. The
extent of these funds and the purposes for which
they will be used in the next few months and
years—together with the intentions of consumers
to continue savings programs now under way—will
have fundamental effects upon our postwar
economy.
To obtain factual information on the distribution of these personal holdings—estimated at $130
billion at the end of 1945—and on the uses that
people expected to make of them under current
conditions, the Board of Governors of the Federal
Reserve System requested the Division of Program
Surveys of the Bureau of Agricultural Economics,
Department of Agriculture, to undertake a national interview survey in the first quarter of 1946
of a selected sample of the population. 1 Information was obtained on 1945 income and changes in
income during the year, on liquid assets at the
start and end of the year, and on 1945 savings and
changes in savings during the year. In addition,
questions were asked to determine the attitudes of
those interviewed toward savings, their intended
use of asset holdings and their likely purchases of
consumer durable goods, houses and other assets.
The manner in which such purchases would be
financed as well as prospective savings programs
were also studied.
cent of these liquid assets. A quarter of the
spending units have no bonds or bank deposits
at all, and another quarter own only 3 percent of
the aggregate personal holdings in these forms.
(A "spending unit" is defined as all persons living
in the same dwelling and belonging to the same
family who depend on a common or pooled income
to meet their major expenses.)
Because of this concentration, the effect on the
postwar economy of the personal liquid assets
accumulated during the war will depend in the
main on how a relatively small part of the population decides to use its holdings.
Although in 1945 the concentration of income
was somewhat less pronounced than before the
war, about 30 percent of the spending units of
the nation saved nothing out of 1945 income.
Most of the money which was saved during the
past year was put away by a small proportion of
the people.
People's expressed intentions for 1946 indicate
that several billion of liquid assets will be used for
WHO HOLDS THE LIQUID ASSETS?
1945
TOP 10% OF SAVING UNITS HOLD 60% OF LIQUID ASSETS
oooooo
NEXT 20% HOLD 27%
| g|ooa
M a j o r findings
The personal holdings in U. S. savings bonds,
checking accounts and savings accounts, which
represent the bulk of the wartime savings of
individuals, are concentrated in a relatively small
segment of the population. Ten percent of the
spending units in the United States own 60 per1
National Survey of Liquid Asset Holdings, Spending, and Saving, Division
of Program Surveys, Bureau of Agricultural Economics, Department of
Agriculture, Washington, D. C. This article presents the highlights of Part I
of the report prepared by the Division of Program Surveys, and. summarized
in the June issue of the Federal Reserve Bulletin.
July 1946
NEXT 20% HOLD 10%
WHILE 50% HOLD ONLY 3%
Sb.
Jb.
Jb-
-5>-
_- ,
~ 1 £ £ m\r\
EACH SYMBOL REPRESENTS
10%
SOURCE - Oept. of Agriculture and Federal Reserve Board
295
consumption and investment during this year.
But, just as before the end of the war, most people
consider their liquid assets as earmarked for
long-range purposes and not available for current
expenditures. Therefore, they intend to finance
most of their planned expenditures, including
those for durable goods and houses, out of current
income or by borrowing.
According to people's present expectations,
they will save considerably less in 1946 than they
did last year, even if incomes are good. Those
who accounted for most of the 1945 savings expect
to save much less this year. Some of them plan
to spend income for large items not previously
available, and some feel that higher prices will
compel them to spend more for living expenses.
Some of the details
The answer to the question of who holds the
liquid assets may be found in several ways. The
survey reveals that the amounts of liquid assets
held by different spending units differ greatly.
One-fourth of the reporting units had no liquid
assets at all. Others (29 percent) had less than
$500 in total liquid assets and the influence of
these on the national economy would be negligible.
About one out of five spending units had $2,000
or more.
The majority of spending units had no checking or savings accounts. On the other hand,
nearly two out of every three reported some
holdings of U. S. savings bonds.
Statistics on the 1945 savings support the conclusion that the higher the income the greater
the proportion of savings. For example, the top
1945 Concentration of income, saving and
liquid asset holdings
Total for each class as percentage
of
national total 1
Spending units by percentage
classes
Top:
10 per cent
20 percent
30 percent
40 per cent
50 per cent
Bottom 50 percent.
Money
income
Gross
saving 2
Liquid
x\Tet
asset 3
saving 2 holdings
Percent
29
45
58
69
78
22
Percent
53
72
84
92
97
3
Percent
60
82
96
105
HI
-11
Percent
60
77
87
93
i The table shows the percentage of the national totals accounted for by the
10 percent of the income receivers with the highest incomes, the 10 percent of
the savers with the highest saving, and the 10 percent of the liquid asset
holders with the largest holdings, and so on for other percentage classes.
The spending units with the highest income are not necessarily those with
the highest saving or asset holdings, so that different individual units may be
included
in each percentage class.
2
Gross saving comprises all individual positive saving (income in excess of
expenditures), while net saving is positive saving less dissaving (expenditures
in 3excess of income).
Excluding currency.
296
fifth of the spending units received 45 percent*of
the 1945 money income; but, this same fraction
accounted for almost three-quarters of the liquid
asset holdings.
In summarizing the analysis of the distribution
of personal liquid asset holdings, the report
studies the effects of action taken by many small
holders as compared with the effects of action
taken by a few large holders. I t appears that
even if 50 percent of all spending units decided
to use all their liquid assets, but these were the
poorest units, only small amounts of money—3
percent of all personal liquid assets—would be
involved. On the other hand, a simultaneous
decision on the part of the small percentage of
spending units which hold large amounts of liquid
assets to use these resources would be of great
importance.
Intended use in 1946
" Let's take your war bonds—do you think
you'll use any of your bonds for any purpose
during 1946? How about your savings account?"
These and other similar questions were used to
draw out expenditure plans for the current year.
The survey showed that the majority of holders
of each type of liquid asset do not intend to draw
upon these assets in 1946. Unforeseen emergencies may change these resolutions, but at present
only 8 percent of the holders of savings bonds and
one-quarter of the holders of savings and checking accounts feel sure that they will use some of
these assets.
Estimating the total amount of liquid resources
that will be used presented certain difficulties, so
questions were framed to gauge the probable
expenditures for specific purchases of certain consumer durable goods and housing. Projecting the
survey results proportionately for the total population, it is estimated that from 2.6 to 3.5 million
people want to build or buy houses; from 3.6 to
5.4 million people want to buy cars; and 9.9 to
13.7 million people want to buy other consumer
durable goods. These current plans furnish valuable clues concerning the extent of consumer
demand during the year.
Those surveyed were asked how much they
expected to spend for these purchases. The average for houses (old and new) was just over $5,000;
for cars, $1,100; and for other consumer durable
goods, $320. By applying these average amounts
to the estimated number of prospective buyers, it
Federal Home Loan Bank Review
may be estimated that in 1946 people plan to
spend $4 to $6 billion for cars, $3.2 to $4.4 billion
for other consumer durables and from $13 to $17.5
billion for nonfarm houses.
People plan to finance their purchases primarily
out of current income or by borrowing. I n the
case of consumer durables (including cars) about
a quarter of the proposed expenditure would come
from existing liquid asset holdings, around twofifths from current income, and roughly one-third
from borrowing. I n the case of housing, on the
other hand, where about a quarter of expenditure
would also come from liquid assets, only one-sixth
would come from current earnings, and almost
three-fifths from borrowing. I t is noteworthy,
however, that nearly two-fifths of the people who
expect to buy houses felt they could finance the
venture without drawing on bonds and savings
accounts.
Although it was difficult to estimate closely the
total amount, it appeared that people plan to
draw out of their liquid assets between $2 and
$2.7 billion for durable goods (including automobiles) and from $3 to $4 billion for housing during
during 1946. The net decrease in liquid asset
holdings will probably be smaller than indicated
by these amounts, for some of the money withdrawn for the intended purchases will be replaced
during the course of the year.
Savings in 1945 and 1946
I n 1945, about one-sixth of the spending units
lived beyond their incomes. The amounts they
withdrew from previous assets for consumption
purposes amounted to more than 12 percent of
the amounts saved by the other spending units,
thus reducing the aggregate net increase in savings.
Among those who did save, many put aside such
small amounts that the combined totals were not
significant from the point of view of the national
economy. At the other extreme, the top 10 percent of all spending units accounted for more than
half of the 1945 savings. I n summary: out of
every 100 spending units, 70 were able to save
something out of their 1945 income, 13 about
broke even and 17 used previous savings for current expenditures.
How much will the American people save in the
current year? This question is of primary importance to home financing institutions who look
to the continued inflow of money in savings accounts as a source of funds for financing home
July 1946
700632—46-
Saving expectations in 1946
[Percentage of all spending units except farmers]
A m o u n t s saved in 1945
E x p e c t e d t o save i n 1946
Over
$1,000
M o r e t h a n in 1945
About t h e same
Less t h a n in 1945_ _
N o definite expectation
N o t ascertained.
$200 t o
$999
$1 t o
$199
Nothing
Percent Percent Percent Percent
17
19
25
22
32
32
27
49
34
27
19
_ .
13
13
16
_.
16
4
9
13
__ __
13
Total.
100
100
100
100
All
spending
units
Percent
21
34
19
15
11
100
construction. The accuracy of the estimates
depends, of course, on how fully the people are able
to realize their present expectations. Changes in
incomes or prices and other unforeseen circumstances may materially affect individual savings
programs. Nevertheless, the projection of the
trend of past savings may be made more realistic
if people's intentions in this direction are known.
Of all spending units, 21 percent expected to
save more in 1946 than they did last year and an
almost equally large group said they would save
less this year. One-third indicated that they
would probably save about the same amount.
These figures take on added significance, however,
if these intentions are related to the amounts of
money which these people saved during 1945.
Among those who saved $1,000 or more last year
(and it must be remembered that these accounted
for 70 percent of the 1945 net savings), 34 percent
expected to save less this year contrasted with only
17 percent who would be saving more.
Considering the contribution of the various
groups to total savings, the report concludes that
the American people as a whole expect to save less
in 1946 than they saved in 1945 and that t h e
difference may be substantial.
Further reports to come
Parts I I and I I I of the survey will be available
soon and will be digested in the R E V I E W . They
will analyze the relation of liquid asset holdings to
income, occupation, age, place of residence and
motives in saving.
The story of the scientific basis upon which the
survey was conducted is in itself an interesting
chapter, as well as the evaluation of the reliability
of the findings. These aspects are covered in
copies of the full report which are available from
the Division of Program Surveys, Bureau of
Agricultural Economics, Department of Agriculture, Washington 25, D . C.
297
THRIFT AND MORTGAGE FINANCING
OPERATIONS OF BANKS
The 1945 year-end statements of insured commercial and mutual
savings banks round out the picture of wartime trends in their
thrift and mortgage financing activities. The changes reported
during last year provide some clues to probable future developments in these fields.
•
T H E first effects of reconversion, which got
under way only in the latter part of 1945,
were reflected in varying degrees in the experience
of insured commercial banks and mutual savings
banks, For the most part, the year brought a
continuation of the trends evident since Pearl
Harbor. Assets of both groups soared to new
highs, as did Government bond portfolios. Real
estate owned dropped to all-time lows. Private
savings entrusted to these institutions reached
unprecedented volumes but it is significant to
note that the last half of the year saw a small
decline in the rate of this increase. Mortgage
financing activity increased to the extent that the
loan portfolios of insured commercial banks
showed the first gain in three years. While the
mortgage holdings of mutual savings banks declined again, the rate of this contraction was
smaller than in recent years.
The following analysis, together with that of
sayings and loan members of the Bank System
which is presented in this issue, shows that the
same general patterns prevailed in these three
important segments of the thrift and home financing industry.
cial banks more than doubled—going from $76.8
billion to $157.6 billion. During this period,
U. S. Government obligations have become the
most important single type of bank asset, on the
basis of an increase from 21 percent of aggregate
assets in 1941 to 56 percent last year. Simultaneously, wartime conditions have made it impossible for real estate loans to maintain their
prewar position in relation either to total loans or
to total assets. As a result, the former ratio
dropped from 6.5 percent to 2.7 percent, while the
latter declined from 4.2 to 2.1 percent.
Insured commercial banks
Although data in this article are confined to
those commercial banks which are insured by the
Federal Deposit Insurance Corporation (as carried
in the annual reports of that agency), the figures
tell the story for all commercial banks. The
institutions covered represent about 98 percent
of total industry assets, real estate lending and
time deposits of individuals, partnerships and
corporations.
As a background for the specific analysis of the
thrift and real estate operations of these banks, the
following gives some idea of what the war years
brought in terms of the general position of the
industry. Between December 31, 1941 and the
close of 1945, total assets of all insured commer298
Federal Home Loan Bank Review
However, 1945 marked the turning point in the
recently decreasing volume of residential real
estate mortgage loans of insured commercial
banks. For the first time since 1942 an annual
increase was recorded, based on the stepping-up
of home building activity added to an already active
sales market. The total outstanding at the end
of 1945—$3.3 billion—was $175 million, or 5.5
percent, above 1944 and represented a record
amount of loans secured by residential real estate.
I n the " defense" year of 1941 the total portfolio
aggregated only $3.2 billion. Thus, in spite of
adverse wartime conditions, over $100 million was
added to total residential loans outstanding.
The improved condition shown last year was
general throughout the country when insured commercial banks in all F H L B Districts showed
advances in residential mortgage holdings in
contrast to only four during 1944. However,
there was wide disparity in the rates of gain, with
little geographical pattern discernible. The accompanying table shows the dollar amounts of
increases which, percentagewise, ranged from less
than 1 percent in Pittsburgh and San Francisco
to 27 percent in the Little Rock area. The 1944
gain varied between 0.5 percent in Chicago and
9 percent in Des Moines.
Residential loans outstanding reported by states
in the San Francisco region—$889,685,000—was
by far the greatest for any Bank District. At
the other end of the scale, Topeka showed the
smallest amount—$51,908,000.
This pattern
showed no shift on a long-time basis inasmuch
as these two Districts were top and bottom in 1941.
However, at that time their portfolios totaled
$893,283,000 and $33,982,000, respectively.
Only in Pennsylvania, the District of Columbia
and California did the residential mortgage loan
portfolio of all insured commercial banks decline
during 1945. I n the two former areas the drop
was less than that registered in 1944; California
reported $11 million less in mortgage loans outstanding at the end of last year than in 1944 when
the decrease had been about $5 million.
Real estate overhang
Available figures do not permit analysis of the
volume of residential real estate owned by insured
commercial banks. However, according to F D I C
reports, the book value of "real estate other than
bank premises" declined 88 percent from the
$263 million shown in 1941. At the end of last
July 1946
Residential mortgage holdings and time deposits of insured commercial banks, 1 945
[Thousands of dollars]
R e s i d e n t i a l mortgage
loans
Federal Home Loan
Bank
District
a n d state
D e c . 31,
1945
$3,330,266
U N I T E D STATES
Connecticut
Maine
Massachusetts. _
New Hampshire
Rhode Island
Vermont
475,816
New York
N e w Jersey _New York
J
P i t t s b u r g h . . __
-
Delaware _ _
Pennsylvania
West Virginia
Winston-Salem...
Alabama
District of Columbia.__
Florida
___
Georgia .
Maryland
N o r t h Carolina
S o u t h Carolina
_ _i
Virginia
_ _ _
Cincinnati
Kentucky
Ohio __
Tennessee
Indianapolis _ . .
Michigan.
Chicago.—
Illinois
Wisconsin
Des Moines
.
Iowa
Minnesota
Missouri
North Dakota
South D akota..
Little Rock
1
Arkansas
Louisiana..^
Mississippi
N e w Mexico
Texas
;
|
Topeka
14,852
289, 382
55, 496
28, 625
136, 687
10,754
36, 768
21,052
5,026,492
943,938
343,038
600, 900
519. 373
313, 985 j
2, 599
2, 754, 760
54,128 1
2,474,677
-1,674
225,955
3,614 1
659 1
8,800
456, 666
53, 907
229,122
21,700
2,183, 653
476,360
16, 221
30, 018
14,338
32,179
39,889
19, 568
7,319
69, 590
2,567
- 2 , 297
636
6, 619
2,070
4, 475
1,213
6, 417
226,386
203,139
259,916
277, 086
388,631
282, 620
73, 525
472, 350
49, 560
36,193
71,627
64, 441
72, 501
77, 379
16, 701
87, 958
299, 707
13,845
2, 689,466
563, 596
26, 733
250,701
22, 273
2, 477
6,838
4, 530
189,148
2,144, 805
355, 513
36, 467
443, 937
83,192
284,541
33,829
2,530,987
515,841
94,835
189,706
4,066
29,763
706,551
1,824,436
151,081
364,760
237,454
21,161
3,201,984
702,271
143,703
93,751
14,254
6,907
2,159,889
1,042,095
460,021
242,250
252, Q94
23,071
1,831,834
388,620
47,714
69.335
126,487
3,284
5,274
5,116
6,228
10,680
137
910
433. 203
685,548
571,141
77,475
64,467
84,244
149,864
119,201
19,123
16,188
73,232
15,454
861,373
203,930
7,813
14,072
9,613
6,499
35,235
1,800
1,842
2,537
2,280
6,995
84,266
237,239
113,879
35,810
390,179
19,669
58,281
24,542
10,050
91,388
51,908
7,754
546,380
117,526
2,313
2,312
497
2,632
5,713
6,035,465
1,208,940
1,207
—11,312
518
1,212
899
2,623
1,687
8,874
5
79,010
4,681,594
80,779
81,215
43,982
349,070
155,846
524, 662
39,307
18,678
915,731
18,965
19,335
10,416
68,778
30,630
118,025
8,382
|
S a n Francisco
1
889,685 I
_
6,009 1
7,128
7, 724 j
14,913
13, 595
7,557
15,843
:_.
_ .
339,607 1
173, 089
724,358
60, 223
191, 224
126,267
6, 765 1
245
452
173
1,094
225,638
250, 178
Colorado
Kansas
Nebraska
Oklahoma
Arizona
California
Idaho
_
Montana
Nevada
Oregon
Utah....
Washington
Wyoming
1,614,768
14,738
1,740,811
3,285,681
11, 542
268,877
33, 556
I
Change
d u r i n g 1945
+$174,716 $29, 277,162 +$5,929, 778
63,317 1
13, 042
80, 000
8, 328
21, 355
36,680
J
D e c . 31,
1945
Change
d u r i n g 1945
222, 722
Boston
T i m e deposits
12,147
771,798
8,966
4,822
6.743
14,042
25,368
41,428
4,371
!
196,946 1
129,975
122,444
97,015
46,047
28,028
26,284
17,167
299
year this account totaled only $31 million after
being more than cut in half during 1945. At the
close of 1944 the value of owned real estate was
$64 million. These data, interpreted in the light
of the known experience of other types of lending
institutions, indicate that a substantial drop
undoubtedly has occurred in the residential overhang of insured commercial banks.
Time deposits of insured commercial banks
One of the outstanding developments in the
early postwar period has been the continuation of
the exceptional volume of private savings. Predictions of a decline in the rate of savings because
of reconversion problems materialized only on a
very small scale during early postwar months.
Insured commercial banks, in common with
other types of thrift institutions, shared in last
year's record volume. The time deposits of individuals, partnerships and corporations went up
nearly $6 billion, or 25 percent. On December 31,
1945, they stood at $29.3 billion which was 93
percent above the $15.1 billion reported at the
end of 1941.
I n spite of the fact that these figures show total
time deposits, the overwhelming proportion of
these funds represent the savings of individuals.
At the end of June 1945, the only recent date for
which a breakdown is available, the time deposits
of individuals represented 94 percent of all the
time deposits which were held by insured commercial banks.
The dollar amount added to these savings deposits last year was greater than the 1944 increase,
while the rate of gain was only fractionally less—
25.4 last year and 25.8 percent in 1944. However,
the change from war to reconversion was not
without effect on the thrift patterns of the American people. I t is significant to note that both the
dollar and the percentage gains in the last half of
the year were slightly less than during the J a n u a r y June period. Both on the basis of this trend and
current industrial developments as they affect our
wage-price structure, it seems reasonable to believe
that the high-water mark in the rate of individual
savings has been passed.
All F H L Bank Districts and every state
appeared in the increase column last year, with
a somewhat narrower gap between the extremes
than had been the case in 1944. States in the
San Francisco region again showed the greatest
dollar volume of savings as well as the greatest
300
dollar increase, up $1.2 billion to $6 billion, while
the Topeka area remained last in both respects
with an increase of $117.5 million. These amounts
were all in excess of those shown in 1944. The
Topeka gain represented the largest percent increase among Bank Districts (31 percent) while
the Boston District, where savings went up 22
percent, had the smallest proportionate increase.
The range among the states was 39 percent in
New Mexico to 19 percent in Delaware.
Mutual savings banks
Mutual savings banks also finished the war in
a generally strengthened position. Between the
year of Pearl Harbor and that of V J D a y they
had increased their assets by over $5 billion, or
44 percent, from $11.8 billion to $17 billion.
During last year alone the gain amounted to
$2 billion, or 14 percent above 1944. The same
war-induced expansion that characterized the
Government bond portfolios of other financial
institutions was apparent among mutual savings
banks as the dollar volume of these securities rose
from $3.6 billion to $10.6 billion. I t is interesting
to note that last year's $2-billion gain corresponded
almost exactly to that shown by total assets. The
1941 year-end statement of condition showed t h a t
"Governments" represented 30 percent of total
assets, while by 1944 the percentage had risen to
56 and last year was 63 percent, which was higher
than that of either insured commercial banks or
savings and loan associations.
Real estate owned
The real estate owned by these institutions
dropped 92 percent during the war and at the end
of 1945 amounted to less than $37 million. Favorable conditions which characterized the real estate
market last year permitted a 63-percent decline
from $99 million carried on the books at the end
of 1944. Expressed as a percentage of total
assets, this account had shrunk from 3.8 percent
in 1941 to 0.2 percent last year. In 1945, only
Vermont showed as much as 1 percent of assets
represented by owned real estate. Trends in the
principal asset items of these institutions are
illustrated in the accompanying chart.
I t is impossible to tell the exact position of
residential mortgage holdings of mutual savings
banks inasmuch as there is no breakdown by type
of property. Therefore, figures (year-end reports of
the National Association of Mutual Savings
Banks) include all outstanding real estate loans.
Federal Home Loan Bank Review
DISTRIBUTION OF
MUTUAL SAVINGS BANKS' ASSETS
1941-1945
PERCENT
70
REAL ESTATE
MC7RTGAGE LOANS
|
GOVERNMENT
BONDS
60
y ^
i
50
'
RAILROAD AND
PUBLIC UTILITY BONDS
STATE a MUNICIPAL
BONDS
CA SH
OTHER REAL ESTATE
nB
^^
SOURCE:
Naf'l Assn of Mutual Savings Banks.
The war years brought a continuation of the
downward trend in the total of real estate mortgage loans held by these institutions. Whereas
at the close of 1941 mortgages totaled $4.8 billion
and represented 41 percent of assets, by last yearend these holdings had shrunk to $4.2 billion, or
only 25 percent of all resources.
In contrast to the experience of insured commercial banks and savings and loan associations,
1945 did not show a reversal of this trend. On
December 31, 1945, loans secured by real estate
totaled $4.2 billion after a drop of $96 million.
The 2-percent decrease last year, the smallest
percentage drop experienced during the war years,
brought to 12 percent the total decline since 1941.
Except for Vermont, this downward trend was
general in all 17 states in which mutual savings
banks operate. In that state, real estate holdings
represented 36 percent of total assets last year in
contrast to 35 percent at the close of 1944.
Savings
The extent of mutual savings bank thrift operations during the war is illustrated by the fact that
between December 31, 1941 and the close of 1945,
over a million new depositors were added to the
July 1946
books and total savings increased by better than
$4.8 billion. Last year's statement of condition
showed an aggregate of $15.3 billion in this account, representing a gain of $2 billion, or 15
percent, in 12 months. This rate of advance was
1 percent above that shown in 1944, but again,
as in the case of insured commercial banks, the
greater part of this increment came in the first
half of the year. This slight trend away from
wartime savings was even more evident in the
number of accounts. During the July-December
period, the total number of depositors decreased
in five states, although an over-all gain for the
year was recorded.
Increases in the volume of savings were, however, general throughout all " m u t u a l " states.
New York and Massachusetts, already the leaders
in savings volume, continued to show the greatest
dollar gains. These increases amounted to $1
billion and $295 million, respectively, which was
considerably in excess of the advances recorded in
those states in 1944.
On the basis of last year's activities, the average
for all types of deposits was $907 compared with
$817 in 1944. In 1941 this average amounted to
$666.
Standards Tightened for Priority
Housing
•
TWO important steps were taken during June
to provide additional protection for the
veteran who buys or rents a home built under the
Veterans' Emergency Housing program: minimum
property standards were established, and provision
made for the inspection of new construction.
Under the " H H Minimum Property Requirements," sales and rental housing built with
priority assistance will be required to conform to
minimum space, arrangement and construction
standards. Aside from site and neighborhood
provisions, these standards are identical with
FHA standards under the National Housing Act.
Regulations were also amended to require home
builders to submit detailed plans and specifications
in applying for priorities and to provide for
inspection of housing under construction with
priority assistance. Two inspections will be
made: when the dwelling is "roughed in," and
when it is substantially completed. The inspections will be limited to compliance with plans and
specifications.
301
V E H P Fi nancmg
{Continued from p. 288)
history of this nation. For this reason, it is more
important than ever that the mortgage lender
proceed with full understanding of the economic
climate in which the loans are being made and
without sacrificing public responsibility. I t is
common knowledge that many questionable practices have been adopted by some; practices which
not only cast shadow on all lenders, but which are
potential dangers to the entire mortgage structure.
There is not need to enumerate them here. Every
active lender comes into contact with them in a
competitive market and they have been discussed
at trade association meetings and in the press. If
a sound mortgage system is to be maintained in
this period of unprecedented demand, lenders must
exercise self-discipline and at the same time fulfill
their obligation to the prospective home-owning
veteran.
Community Action on VEHP
•
BY mid-June, Mayor's Emergency Housing
Committees had swung into action in more
than 340 cities. In these communities, which
cover 90 percent of the country's major population
centers, groups including representatives of the
local government, builders, materials dealers and
manufacturers, real estate operators and mortgage
lenders, labor, veterans, minority, religious, civic,
public interest and consumer organizations were
already at work on the Veterans' Emergency
Housing Program.
A recent summary of reports received in the
office of the Housing Expediter show, among
others, these specific approaches to the problem:
Rochester, New York—revised its building code
to permit erection of prefabricated homes and sold
50 city-owned lots at a nominal price for this
purpose.
Portland and Eugene, Oregon—set up a "pool"
for recording all building materials in the area so
that builders might speedily locate dealers who
could supply their needs.
Cedar Rapids, Iowa—employed an architect to
draw plans for conversion of 42 buildings. Five
veterans' organizations united in a project to buy
60 surplus K F C grain bins for conversion into
$3,000 homes.
302
Lorain, Ohio—-worked with purchasing agents
of industrial concerns to expedite materials
through legitimate channels for allocation to local
builders.
In addition, sites for temporary housing have
been provided by numerous localities, while other
cities have undertaken revisions of building codes
to bring them into line with present emergency
conditions.
" Generally speaking," Mr. Wyatt said, "reports
indicate this phase of the V E H P is off to a good
start in most sections of the country."
New Board of Directors for
San Francisco
B
T H E appointment of four public interest
directors and the election of eight other directors for the Federal Home Loan Bank of San
Francisco have been announced by Harold Lee,
Governor of the Bank System. Their terms of
office will commence August 1.
Public interest directors: Ben A. Perham, president, Perham Fruit Compam^, Yakima, Washington; C. W. Leaphart, Dean of the Law School,
Montana State University, Missoula, Montana;
L. H. Hoffman, president, Hoffman Construction
Company, Portland, Oregon; William A. Davis,
president, First Federal Savings and Loan Association, Oakland, California.
Directors at large: Guy E. Jaques, Portland Federal
Savings and Loan Association, Portland, Oregon;
R. J. Fremou, Western Montana Building and
Loan Association, Missoula, Montana.
Class A directors: Roy E. Hegg, San Diego Federal
Savings and Loan Association, San Diego, California; Fred J. Bradshaw, American Savings and
Loan Association, Salt Lake City, Utah.
Class B directors: Douglas H. Driggs, Western
Savings and Loan Association, Phoenix, Arizona;
L. C. W7etzel, First Federal Savings and Loan
Association, Walla Walla, Washington.
Class C directors: Worth D. W'right, First Federal
Savings and Loan Association, Idaho Falls, Idaho;
I. W. Dinsmore, Rawlins Federal Savings and
Loan Association, Rawlins, Wyoming.
Mr. Perham was selected to serve as chairman
and Mr. Davis as vice chairman of the new board
of directors. The elected members are from eight
of nine states in the San Francisco Bank District.
Federal Home Loan Bank Review
Rents in the United States, 1929-1944
•
B E T W E E N 1929 and 1944 the relative
importance of rent as a component of gross
national product declined significantly, according
to a study published recently by the National
Income Unit of the Bureau of Foreign and
Domestic Commerce.
Total rent payments
dropped from 11.1 percent of gross national
product in 1929 to 6.5 percent in 1944.
The country's economic output as measured by
gross national product fell almost 45 percent from
1929 to 1934, while in this same period total rents
dropped approximately 35 percent. By 1940,
gross national product had almost regained its
1929 position but rents lagged 15 percent below
the earlier year. Although both items continued
to move upward through 1944, rents advanced
only about 35 percent while the gross national
product doubled.
Distortions in the national economy due to war
prevented total rents from rising as much as they
normally would in the face of such increased
over-all activity. Government requirements absorbed nearly half of the national product and
private construction, had to be sharply curtailed.
In addition, total rents were-held down by rent
controls in areas of residential shortages.
Over the 15-year period covered by the study,
gross rental payments by tenants showed considerable variation.
In 1929 aggregate rents
approximated $11 billion, but by 1933 were down
to $7 billion. Recovering to $10 billion by 1941,
total rents progressed to an all-time record of
almost $13 billion in 1944.
Some significant shifts in the relative importance
of components making up the aggregate rentals
were noted by the Bureau. Comparatively resistant to cyclical influences, the nonfarm housing
portion accounted for 44 percent of the total in
1929; 51 percent in 1933 and 46 percent in 1944.
As the accompanying chart shows, farm rents
experienced both the sharpest decline and the
greatest recovery.
gories likewise exerts a telling influence on rental
totals. The effectiveness of this factor is closely
related to vacancy rates and the proportion of
owner occupancy.
On an index of 1929=100, the Bureau reported
that the total nonfarm housing rents rose to 119
by 1943. The gain after 1940 accrued from the
strengthening of average rents and from a growth
in the number of tenant-occupied dwellings as
most of the privately constructed and all the
temporary war housing was channeled into the
rental markets during the early days of the war.
That trend seems to have been decisively reversed
after 1943, with the emphasis shifting to home
ownership as revealed by sample surveys in 122
cities, conducted jointly since September 1944 by
the Bureau of Labor Statistics and the Bureau of
the Census. (See "Wartime Increases in Home
Ownership/' F H L B R E V I E W , June 1946.) The
sharp rise in residential real estate prices—spawned
and fed by acute shortages of housing, wartime
building restrictions, rent controls but no ceilings
on real estate sales prices—acted as a powerful
magnet to draw rental housing into the extremely
profitable sales market.
Individuals received almost two-thirds of the
total rents paid between 1929 and 1944. As is
usual, this type of landlord collected about threefourths of all residential rents and nearly sixtenths of both farm and "other" rents. Business
landlords as a group received one-half as much
in rental payments as individuals collected.
Factors affecting housing rents
Rental rates, especially for residential properties,
play a primary role in determining rental totals,
rising or falling with the economic temperature of
the nation. Going rates, however, characteristically trail general conditions since rates are usually
subject to advance contracts. Over a period of
time the number of properties in different cateJuly 1946
303
RESIDENTIAL BUILDING ACTIVITY AND SELECTED INFLUENCING FACTORS
INDEX
/935-/939= 100
—1— 1
BY YEARS
INDEX
BY MONTHS
1—I—1
550
1—1—1—1
ADJUSTED FOR SEASONAL VARIATION
500
500
Y
450
450
j
400
400
350
350
H
300
300
i
i
250
rA^
PRIV. CONSTRUCTION*
I a 2 FAMILY DWELL. UNITS
(FED. HOME LN. BK. ADM.)
. ( U . S . D E P T O F LABOR-)
200
^
L A^-1
A
v
.*f -
250
/ *
200
1 1 1
^SVGS S LN LEND. .
150
PRIV. CONSTRUCTION-rJ
100
50
JSNONFARM
LLL
^ ~\
i
FORECLOSURES
i
i
i
|
i 11 i i l r i h i 1. 11 i i 1i i 1 i iJ - L _LL J _ L
300
i — i — i — i — i — i — i — i — r
ADJUSTED FOR SEASONAL VARIATION
piNC. &AYMTS.
250
/*
INDUSTRIAL PRODUCTK ON-**/
200
I t - t U . K t S t K V t BUAKUi
250
«^P-
» ^ ^%V
INDUS'L.
/.
200
PROD.=r\
/ f ••* . . « . . "*\
##
N *i. k*J
150
150
ICO ME PA YMENTS
J
100
J.S.C)EPT. OF 30MH<ERC i)
,^v
^ •*;
50
"jg?
v»
tSA
(J.S. [)EPT
:MP
MFC.
.0/
OF l.ABO R)
100
• ••"*J*P
"v*
,»*^
11
1930*31 '32 '33 '34 '35 '36 '37 '38 '39 *40 *4I '42 '43 '44 '45 *46
DEPARTMENT STORE SALES
300,
EMPLOY.*"*!
,
1
1935 - 1 9 39 = 1 0 0
,
BILLIONS
,
CONSUMER
1944
CREDIT
.LI. J_L J_L J_i
1945
INDEX
J_L
1946
-U
50
CONSUMERS' PRICE INDEX
1401
$8 I
1 9 3 5 - 1 9 3 9 = 100
A
A
AM
t
Aw^M* /yv
100
i iiniiih i iiliiliihi
1943
1944
304
i
1945
lllllllllll
QliilnliiliiliiliiLl
1944
• Inlnl.
1945
••••I
111111111
1944
100
Federal
Home
1945
Loan Bank Review
( ( ( ( ( ( M O N T H L Y
BUSINESS CONDITIONS—May
production lowest in four months
With the whole field of industrial relations
considerably calmer than for many months,
settlement of the coal and railway strikes was
followed by a quick recovery of the industries
affected. The end of the prolonged dispute in
the copper industry and the successful outcome of
maritime difficulties further brightened the outlook
for increased industrial activity. As the R E V I E W
went to press, the farm machinery disputes were
the major unresolved labor-management problems. Material shortages and the uncertain fate
of over-all price control had been counteracted
as disturbing elements, to some extent, by the
upward revision of many individual price ceilings.
Industrial production as a whole declined
somewhat in May. For that month, the Federal
Reserve Board's seasonally adjusted index was
down to 160 percent of the 1935-1939 average,
against 165 percent in April and 168 in March.
The expansion of industrial production following
the settlement of various wage disputes pointed to
June activity surpassing the March level.
As a direct result of the mine strike, total
production of bituminous coal in the first five and
one-half months of 1946 amounted to only 210
million tons compared to 274 million tons in the
same period last year. Steel production during
the last week in June was back to 87 percent of
capacity although it had been perhaps more
adversely affected by the coal and rail troubles
than any other major industry. The previous
shortage of steel accentuated by the latest interruptions of production led the CPA to set up an
emergency system of distribution for the third
quarter of 1946, with special allotments for
critical housing and farm machinery production.
Index
[1935-1939 = 100]
May
1946
April
1946
Percent
change
H o m e construction (private) 1
R e n t a l index (BLS)__
B u i l d i n g m a t e r i a l prices
Savings a n d loan lending i
Industrial production *
M a n u f a c t u r i n g e m p l o y m e n t *_._
Income p a y m e n t s 1
_
-
239.4
108.4
142.7
477.9
160.0
141.0
240.2
256.7
108.4
141.3
465.2
r
165. 0
r
139.1
r 236.4
-6.7
0.0
+1.0
+2.7
-3.0
+1.4
+1.6
r
Revised.
i Adjusted for normal seasonal variation.
July 1946
May
1945
65.2
108.3
131.0
215.7
225.0
164.5
241.9
Percent
change
+267. 2
+0.1
+8.9
+ 121.6
-28.9
-14.3
-0.7
S U R V E Y >> >> >>
The upward movement of ceiling prices is reflected in the steady rise in the Department of
Labor's general index of prices of twenty-eight
basic commodities in primary markets. Registering an 8-point gain between April 30 and June 21,
the index on that date was 198.1 (August 1939=
100).
The general level of department store sales remained high during May, standing about onethird above comparable figures for last year.
Displaying the usual seasonal pattern, such sales
made a slight recovery after the relatively sharp
post-Easter decline.
Money in circulation rose to $28,118,000,000
in May to exceed the $28-billion mark for the
first time since December. Although a seasonal
expansion may be expected in May, the increase
this year was probably greater because the May 30
holiday was followed by the first Saturday bank
closing in eastern states.
Slightly more than half a million persons were
added to the civilian labor force during May, the
Bureau of the Census reported. Since employment increased somewhat more than additions to
the labor force, unemployment dropped fractionally. Agricultural pursuits claimed most of the
new workers.
BUILDING ACTIVITY—Permit totals
down 5,000 units from April
Construction totals for May were approximately
5,000 units below the previous month and 10,000
under the peak reached in March of this year on
the basis of building permits reported to the
Bureau of Labor Statistics, U. S. Department of
Labor. Permits issued in all nonfarm areas of the
country aggregated almost 73,000 units, of which
69,000 were to be privately financed and less than
4,000 were Government financed.
Cumulative figures for the first five months of
this year indicate the substantial progress which
has been made in the resumption of home building.
Permits have been taken out or contracts awarded
for almost 325,000 units of which 300,000 are to
be private construction. This is equal to an
annual rate of nearly 800,000 units for total construction and well over 700,000 for the private
305
in these comparisons were more marked than
advancing material costs with the result that these
components had reached 152.3 and 139.2, respectively, in May. At the year-end they stood at
147.3 and 135.2.
Wholesale prices, as reflected in the Department
of Labor combined index, also advanced 1 percent
during May. Plumbing, heating and structural
steel were the only components not contributing
to this gain which brought the over-all index to
142.7. The increase since last May has amounted
to 8.9 percent, and again, as in the case of the index
for the standard house, most of this rise (7 percent)
has taken place since the first of the year.
[TABLES 3, 4 and
5.]
MORTGAGE LENDING—May
volume
more than doubled in 1 9 4 5 comparison
portion. This year will see the highest volume of
home building since 1928. Already the 1946 yearto-date figures for private construction are above
the annual totals for any of the past three years.
The above permit data do not reflect the substantial number of additional housing units being
provided through the conversion and modernization of existing dwellings. I t is estimated thatwell over 50,000 have already been added to the
supply through this channel. [TABLES 1 and 2.]
B U I L D I N G C O S T S - U p w a r d trend
accentuated in M a y
Reflecting recent price and wage adjustments,
May residential building costs showed a slight
acceleration in their long-term advance. The
total cost index for the standard six-room frame
house stood at 143.5 percent of the 1935-1939
average after a rise of 1 percent during the month.
The gain since May 1945 amounted to almost
5 percent, of which over half of the rise has occurred
since the first of the year. Increasing labor charges
Savings and loan associations have continued to
chalk up successively higher records in lending
volume for each month so far in 1946. At no
previous time, at least since the boom of the
1920's, had total loans of these institutions topped
$200,000,000 in any one month, but each of the
first five months of this year has been well in
excess of this figure.
From a total of $188,000,000 in December 1945,
the over-all lending volume of associations has
climbed steadily to the level of $361,000,000 in
May, and further rises are to be expected.
Construction loan volume is now expanding
more rapidly than any other class. The $62,000,-
Construction costs for the standard house
[Average m o n t h of 1935-1939 = 100]
Element of cost
Material
Labor
Total
306
Mav
1948
PerApril
cent
1946 change
PerMav
cent
1945 change
139. 2 138. 0 -f 0. 9 133. 4 + 4. 3
152. 3 150. 3 + 1.3 143. 8 + 5.9
143. 5 142. 1 + 1.0 136. 8 + 4. 9
Federal Home Loan Bank Review
New mortgage loans distributed by purpose
[Dollar a m o u n t s are shown in t h o u s a n d s |
Purpose
Construction
Home purchase.
Refinancing
Reconditioning _
Other purposes._
Total
May
1946
$62,
243,
24,
6,
24,
April
1946
189 $53, 202
458 235, 877
451 24, 882
954 6,796
246 22, 242
Percent
change
+ 16.
+ 3.
-1.
+ 2.
+ 9.
May
1945
9 $13,
2 120,
7 15,
3 3,
0 10,
032
244
887
396
520
Percent
change
+ 377.
+ 102.
+ 53.
+ 104.
+ 130.
2
5
9
8
5
361, 298 342, 999 + 5. 3 163, 079 + 121. 5
000 loaned for this purpose in May represented a
hew top figure for any month on record; this was
nearly half again as great as lending in July of
1941—-the prewar high.
Although not rising at anywhere near the rate
shown by construction loans, money advanced for
purchasing existing homes continued to dominate
the lending pattern for savings and loan associations. During May, home purchase loans increased but 3 percent, while loans for home construction rose 17 percent. Still, two-thirds of
total lending during May was for purchase of
homes, while only about one-sixth of the aggregate went for the construction of new homes.
[TABLES 6 and
7.]
the average size of all mortgages of $20,000 or less
has risen as much during the nine months since
VJ Day as during the preceding four years.
Mutual savings and commercial banks and trust
companies have shown the greatest percentage
gains during the first five months of the year.
Recordings of mutual savings banks were up
153 percent; banks and trust companies, 136
percent. Other increases were: savings and loan
associations, 94 percent; "other" mortgagees, 67
percent; insurance companies, 64 percent; and
individuals, 49 percent. [TABLES 8 and 9.]
Mortgage recordings by type of mortgagee
[Dollar a m o u n t s are shown in millions]
Cumulative
May
T y p e of lender
1946
amount
Savings and loan associations _
Insurance companies- _
Banks, t r u s t companies
M u t u a l savings banks_
Individuals
Others
Total
Percent
1946
change
(5
from months)
1945
$333 + 93. 2
39 + 81. 1
241
52
187
112
964
+ 165.
+ 173.
+ 48.
+ 93.
1
2
8
9
+ 97. 9
$1, 364
157
916
180
823
431
Percent
of
total
35. 2
4. 1
23.
4.
21.
11.
7
6
3
1
3, 871 100. 0
MORTGAGE RECORDINGS—Monthly
volume nears billion-dollar mark
The level of mortgage financing activity continued to rise during May. The estimated
$964,000,000 of nonfarm mortgages of $20,000 or
less recorded during the month represented an
advance of 9 percent over the preceding month
and was almost double the May 1945 volume.
Quite contrary to the usual seasonal pattern—a
downward trend during the late autumn and
winter months—the monthly volume of real estate
financing has risen substantially in every month
since the end of the war, with the exception of
December and February.
The increased volume of new construction has
of course played a dominant role in boosting mortgage activity to the current high level. However,
of perhaps equal importance in producing this
rise has been the increased turnover of existing
properties coupled with a steady advance in real
estate prices. Although not a refined indicator
of real estate prices, it is of interest to note that
July 1946
F H L B SYSTEM—Outstanding advances
rose $2.7 million
The rising volume of mortgage lending by member savings and loan associations was again reflected in a high volume of advances made by the
Federal Home Loan Banks. The May total of
$33.7 million was almost three times as much as
the previous record for that month (1937). I t
was over five times the volume advanced in May
1945 and more than a third again as great as the
total of April advances. All Banks participated
in this stepped-up activity during the reporting
month, with San Francisco showing the largest
dollar increase and New York the smallest.
Repayments during May totaled $17 million, a
record for that month and over twice the amount
received in the same 1945 period. However, May
receipts this year were $5 million below the April
figure. The Boston, Pittsburgh, Chicago, Des
Moines and Topeka Banks reported higher vol307
umes of repayments during the month, which were
more than offset, however, by the declines shown
in the remaining six districts.
These operations resulted in an increased total of
advances outstanding at the end of the reporting
period. The balance of $173 million was $17 million more than the amount shown at the end of
April. All Banks contributed to this gain, with
the largest increment occurring in Cincinnati
where the amount outstanding rose $2.7 million.
San Francisco and Winston-Salem also showed
gains in excess of $2 million, while only the Boston,
Des Moines and Topeka Banks added less than
$1 million to their total Bank advances outstanding.
On the basis of preliminary figures available as
the R E V I E W went to press, it seems probable that
the June balance of advances outstanding exceeded
the $200-million mark. [TABLE 12.]
INSURED ASSOCIATIONS—Operations
continued at high level
Assets of all insured savings and loan associations stood at almost $6.6 billion at the end of
May—up approximately $130 million during the
month. The number of insured institutions
reached 2,488 which was two more than at the
end of April.
Current operations continued at record levels.
New mortgage loans totaled $286 million, the
highest monthly volume yet registered and 6
percent above the previous reporting period.
The gain in private savings accounts ($82 million)
was the largest so far this year, bringing the total
private repurchasable capital to $5.6 billion.
The May repurchase ratio was down somewhat
from April in line with seasonal trends, but was
still 11 points above the same month of last
year. [TABLE 13.]
Progress in number and assets of Federals
[Dollar amounts are shown in thousands]
Number
Class of
association
New
Converted
Total__
308
Approximate assets
M a y 31, April 30,
1946
1946
633
838
1,471
M a y 31,
1946
April 30,
1946
632 $1, 457, 552 $1, 429, 801
837 2, 746, 505 2, 688, 275
1.469
4, 204, 057 4, 118,076
Federal associations
The 1,4^1 Federally chartered savings and loan
associations had assets of $4.2 billion at the end
of May. This compared with 1,466 institutions
having assets of $3.3 billion a year previous. New
mortgage loans of these associations during the
reporting month were 7 percent higher than the
April total but nearly 150 percent above those in
May 1945. Their private share capital accounts
were up $54 million during the month.
SHARE CAPITAL—Net Sain
almost $100 million
The net inflow of private savings into all savings
and loan associations during May was the largest
for any month so far this year and was 24 percent
greater than in the same month of last year.
This resulted from new investments of approximately $247 million and withdrawals of $148
million. The ratio of repurchases to new investments during the month of May was 60 percent in
contrast to 51 percent in the same 1945 period.
This follows the trend of the past several months
when higher repurchase ratios have been noted.
During the first five months of this year, new
share capital investments in all associations
amounted to $1,294 million, or nearly $437
million in excess of money withdrawn. Insured
associations accounted for more than four-fifths
of the activity and of the net inflow of share
investments.
The net inflow of share capital thus far in 1946
has fallen considerably behind the rising volume
of lending activity. New loans by all savings
and loan associations from January through May
were estimated at close to $1.5 billion. The net
gain in loan portfolios was, of course, considerably
less than this figure but it is believed to be well
above the $437-million gain in share capital.
[TABLE
14.]
Gl Home Loan Data
A new statistical series on the volume of
GI home loans appears for the first time on
page 314. This table, based on weekly reports of the Veteran's Administration, will
be shown regularly in Table 10. The information on savings bonds, formerly carried
in Table 10, will be published quarterly in
the future.
Federal
Home
Loan Bank Review
<&Hfc
§H f e
f
DIRECTORY
I* CHANGES
&$
"ive
•
M a y 16—May 3 1 , 1946
Key to changes
*Admission to membership in Bank System.
* t e r m i n a t i o n of membership in Bank System.
#Federal charter granted.
01nsurance certificate granted.
NEW YORK DISTRICT
N E W JERSEY:
Princeton:
^Princeton Savings and Loan Association, 20 Nassau Street.
WINSTON-SALEM DISTRICT
ALABAMA:
Dothan:
*0Dothan Federal Savings and Loan Association, 107 South Foster Street.
FLORIDA:
Jacksonville:
*0Jacksonville Federal Savings and Loan Association, 1520 Hendricks
Avenue.
Quincy:
#Quincy Federal Savings and Loan Association.
Tavares:
**Lake County Federal Savings and Loan Association of Tavares,
1 Broad St., N E .
CINCINNATI DISTRICT
OHIO:
Columbus:
**The Lilley Building and Loan Company, 150 East State Street.
INDIANAPOLIS DISTRICT
MICHIGAN:
Port Huron:
**Port Huron Loan and Savings Association, 505 Water Street.
CHICAGO DISTRICT
ILLINOIS:
Ed wards ville:
* Clover Leaf-Home Building and Loan Association, 406 National Bank
Building.
Edwards ville:
**Clover Leaf Loan, 406 National Bank Building.
Amendment to Regulations
FHLBA
Bulletin No. 62
AMENDMENT TO THE RULES AND REGULATIONS FOR
THE FEDERAL SAVINGS AND LOAN SYSTEM RELATING
TO HEARINGS HELD BY THE FEDERAL HOME LOAN
BANK ADMINISTRATION.
(Adopted and
effective
June 28, 1946.)
Section 202.29 of the Rules and Regulations for
the Federal Savings and Loan System has been
amended by adding the following sentence:
In any hearing held by the Federal Home Loan Bank Administration,
including all hearings under the Rules and Regulations for the Federal
Savings and Loan System, the officer presiding is hereby empowered to
require and to administer oaths and affirmations as to any witnesses there
offering testimony.
This procedural action became effective upon
filing with The Federal Register on June 28, 1946.
July 1946
PI in N<
ear rlan
INorway
R E C O N S T R U C T I O N in Norway is off to a
good start under the Five Year Reconstruction
Plan drawn up soon after the Germans withdrew
in 1944. Directing the program is the Ministry
of Supply and Reconstruction which must approve
plans before building can commence. I n order to
meet immediate needs without prejudicing the
execution of the long-range opportunity of providing modern and improved cities, only temporary dwellings are now being built. Many of Norway's cities were leveled during the occupation
and 100,000 housing units were lost.
Two types of structures are currently being provided to fill the gap—barracks and "bardstueres."
These bardstueres are designed now to bunk 16
people and are heated by tile stoves. As housing
conditions improve, the bunks will be removed
and the house will contain three rooms, a kitchen
and bath.
As quickly as a city's reconstruction plans are
approved, permanent construction can get under
way. Of the 100,000 new permanent dwellings to
be provided, it has been estimated that 20 to 40
percent will be prefabricated, many two-story or
two-family, semi-detached units. Since the Germans left, three new prefab factories have been
started in Norway. As soon as possible these will
turn from bardstueres to the production of quality,
permanent houses.
Shortages in labor are more serious than those
in certain materials. For instance, in spite of bad
usage by the Germans, enough fine forests remain
to provide well over the 6 million cubic feet estimated as the annual lumber need. For this program, the labor force is short 15,000 men. Building trades men are also lacking so, under the
Five Year Plan, schools offering short courses in
these trades are being established.
Financing for the housing program has been
provided through the establishment of a Housing
Bank. This agency, already in operation, finances
up to 100 percent of the building costs for lowrent dwellings.
An example of over-all city improvement is
Hammerfest, northernmost port of the country,
which was practically leveled. As a result of new
city planning, rubble from bombings is being used
to fill in the peninsulas which act as breakwaters,
and residential sections of the city will be separated
from business and industrial areas.
309
Table 1 . — B U I L D I N G A C T I V I T Y — E s t i m a t e d number of new family dwelling units provided
in all urban areas in M a y 1946, by Federal Home Loan Bank District and by state
[Source: lT. S. Department of Labor]
T o t a l u r b a n residential construction
Federal H o m e L o a n
B a n k District a n d s t a t e
May
1946 P
Apr.
1946'
May
1945
May
1946 P
Apr.
1946 r
J
|
771
3,033
5,710
320
1,335
37
18
370
625
6
31
12
290
80
571
38,384
3,228
2, 451
338
1,523
325 1
73
2,461
176
157
36
352
105
1,629
89
237
39
35
6
86
3
208
213
73
948
96
157
36
298
99
1.027
89
237
39
74
3
202
4,022
3,860
386
2,667
3,013
301
1,337
],293
2,729
1,636
2,224
94
292
966
1,701
1,007
2,006 |
90
211
309
1,028
2,774
2,984
123
2,433
2,320
97
22
2,457
295
43
2, 502
439
2
85
36
22
2,128
283
43
1,897
380 1
6,026
6,009
1,289
5,449
700
332
1,315
874
827
869
294
815
815
217
1,394
768
662
1,126
224
803
107
83
540
161
8
162
49
179
666
240
1,171
850
818
798
262
644
3,353
3,064
1,149
353
2,364
636
301
2,094
669
Indianapolis
3,366
Indiana
Michigan
859
2, 507
Connecticut
Maine
Massachusetts
.
New Hampshire
R h o d e Island
Vermont.
_.
N e w York
N e w Jersey
New York . .
Pittsburgh .
.
Delaware
Pennsylvania
_
..
Winston-Salem
l,-.789 1
May
1945
3,847
12, 650
Boston.._
1
May
1945
Apr.
1946 r
5,576
51,128
STATES
May I
1946 P
10,451
46,993
UNITED
41,571
Apr.
1943'
May
1946 P
May
1945
|
1
3- a n d more-family dwellings
1- a n d 2-fan:ily dwellings
i
Public residential construction
P r i v a t e residential c o n s t r u c t i m
35
6
112
1,223
-
1,428
54
6
507
85
18
340
366
141 J
4
81
18
263
261
213
26
80
451
2
59
36
249
12
205
8
26
80
400 1
51 j
5,196
1,176
323
319 1
113
254
494
775
143
1,276
702
642
715
198
745
103
59
509
145
8
154
49
149
4
30
40
42
24
97
2,509
2,809
52
826
271
284
1,609
616
301
1,853
655
4,061
1,085
2,975
3,897
1,222
2,839
253
832
847
2,128
1,218
2,679
3,170
3,509
717
2,855
2,172
998
2,396
1,113
405
312
2,769
3,774
611
1,210
611
201
136
..
77 1
92
107
74
118
4
24
31
16
9
29
8
74
20
49
8
58
30
797
247
255
72
597 1
280
44
490
263 1
16
211
20
241
14
8
56
8
53
544
280
1,025
50
'48
60
341
229
796
12
38
4
44
24
36
34l
2,845
542
241
536
75
1,950
905
1,841
1,004
358
184
222
19
475
61
47
28
412
2,692
3,433
396
77
149
16
893
1,610
822
192
257
25
266
62
23
36
569
1,188
598
201
136
867
1,570
630
183
183
25
250
62
23
36
42
22
13
40
100
9
16
5,534
6,854
2,202
5,319
5,516
2,155
165
288
47
218
406
411
140
4,359
308
1,359
400
87
4,700
88
618
132
56
1,308
148
406
398
140
4,227
296
432
357
67
4,364
88
618
128
56
1,265
20
13
12
29
43
4
132
204
43
2,683
2,604
751
2,030
1,970
687
67
58
64
586
576
1,245
554
273
611
853
617
393
741
628
538
253
611
602
470
237
661
351
137
53
146
51
16
21
7
10
20
64 1
566
230
140
146
60
San Francisco... . . .
10,068
11,958
4,198
7,932
8,783
2,955
1,473
1,437
195 1
663
1,738
1,048
Arizona
California . .
Idaho.
Montana
NevadaOregon
Utah__
_
Washington . . .
156
6,967
393
164
141
561
231
1,310
145
186
7,899
411
160
370
1,041
625
1,172
94
132 1
3, 299
60
50
33
198
55
348
23
102
5, 522
226
144 i
141
542
215
974
66
138
5,696
349
146
257
768
313
1,025
91
117
2,099
60
38
33
198
51
340
19
6
1,389
1,267
15
152
48
56
167
48
936
62
1,048
Alabama
District of C o l u m b i a
Florida.._ . . . .
. . .
Georgia.
_ .
Maryland
N o r t h Carolina
S o u t h Carolina
. . .
Virginia
Cincinnati
.
Kentucky.
Ohio.../
Tennessee
Chicago
..
._
._
Illinois.
_
Wisconsin .
•
... .
...
..
....
.
. _
...
.
Des Moines.
Iowa
___
_
Minnesota
Missouri _
North Dakota
South Dakota
.
.
Little Rock.
Arkansas . .
Louisiana. . . .
Mississippi
N e w Mexico
Texas
. . .
Topeka .
Colorado . .
Kansas . . . .
Nebraska
Oklahoma
p Preliminary.
310
.
r
_
415
137
53
146 1
37
24
66
362
26
116
116
74 j
128
100
74
80
48
100
192
26
92
74
20
19
16
12
11
14
11
47
28
67
3
50
1,050
50
898
20
132
20
12
4
8
4
324
68
102
226
284
80
Revised.
Federal Home Loan Bank Review
Table 2 . — B U I L D I N G A C T I V I T Y — E s t i m a t e d number and valuation of new family dwelling units
[Source: U. 8. Department of Labor.
Dollar amounts arc shown in thousands!
P e r m i t ^ aluation
N u m b e r o ' family dwelling unit s providee
P r i v a t e co n s t r u c t i o n
P r i v a t e construction
Period
Total
construction
Total
] -fan lily
2-family
3- a n d
more
family
Total
Public
construc- construction
tion
Total
1-family
2-family
3- a n d
moref am ily
Public
construction
Nonfarm
$131,619
290, 984
249, 479
209,109
12,002
28,368
41, 505
$998,983
$867, 364
$759,817
$28,515
$79,032
70,690
65, 097
55, 461
2, 957
6,679
5, 593
244, 614
227, 425
203,540
7,039
16,846
17,189
67, 400
56, 568
48, 434
3,467
4,667
10, 832
203, 090
174, 196
150, 451
10,173
13, 572
28, 894
18, 700
22, 300
23 300
20, 400
21,800
29, 800
31, 400
29, 100
16, 535
20, 412
19, 948
20,154
21,800
29, 775
31,400
29,100
14, 735
18,711
17, 3,77
18,364
19,665
26, 696
28, 229
25,116
978
619
823
668
888
929
1,146
1,426
822
1,082
1,748
1,122
1,247
2,150
2,025
2, 558
2,165
1,888
3, 352
246
61, 391
73,528
79, 991
74, 903
80,094
124,532
129,195
127, 065
55, 697
68, 288
70, 881
74,162
80,094
124, 294
129,195
127, 065
50, 082
63, 228
62, 511
67, 887
72, 280
111,861
117, 642
112,467
3, 254
2,092
2,811
2,244
3,306
3,779
4,379
4,912
2,361
2,968
5,559
4,031
4,508
8,654
7,174
9,686
5.694
5, 240
9,110
741
1946: J a n . - M a y
324, 554
299,501
266, 587
11,595
21,319
25, 053 1, 353, 972 1,305,513 1,184, 064
46,118
75, 331
48, 459
January..
February
March
Aprilr _
May
43, 300
48,100
82, 800
77, 500
72, 854
39,121
43, 357
76, 909
70,954
69,160
34, 792
38, 704
68, 460
64,236
60, 395
1,395
1,889
2,751
2,671
2,889
2,934
2, 764
5,698
4,047
5,876
4,179
4, 743
5,891
6, 546
3, 694
169,837
193, 414
363,153
327, 447
300, 121
162, 304
185, 048
352, 043
313,189
292, 929
147,800
169,036
316, 856
286, 437
263, 935
5, 222
6,969
11,953
10,991
10, 983
9,282
9,043
23, 234
15, 761
18,011
7,533
8,366
11,110
14, 258
7,192
183, 700
155,715
120, 070
9,818
25,827
27, 985
660,171
571, 928
473,533
24, 543
73, 852
88, 243
43,885
39, 405
30,967
2,388
6,050
4,480
158,915
145,133
123, 626
5,959
15,548
13, 782
44, 414
39, 065
31, 324
3, 278
4,463
5, 349
147,044
132,859
110, 032
9,786
13, 041
14,185
12, 650
13,626
15,913
13, 059
14,619
19, 496
20, 417
19, 256
11, 222
11,988
12, 956
12,915
14, 619
19, 496
20, 417
19, 256
9,517
10, 437
10,464
11, 206
12, 567
16, 582
17, 421
15, 494
934
550
782
626
845
857
1,069
1,241
771
1.001
1,710
1,083
1,207
2,057
1,927
2,521
1,428
1,638
2,957
144
46, 789
52, 643
59, 830
54,800
60,133
91,114
93, 953
95, 040
43, 019
48,186
51,682
54, 262
60,133
91,114
93, 953
95, 040
37, 672
43, 551
43,520
48,199
52, 537
79,194
82, 944
80, 639
3,158
1,940
2,707
2,138
3,197
3, 551
4,134
4,275
2,189
2, 695
5,455
3,925
4,399
8, 369
6, 875
10,126
3, 770
4,457
8,148
538
1946: J a n . - M a y
216,738
193,865
162, 288
11,094
20,483
22,873
977,492
933, 273
815,544
44, 577
73,152
44, 219
January,
February
March
Aprilr
May
30, 097
33,126
55, 394
51,128
46. 993
25, 918
28, 503
50,066
45, 418
43, 960
21, 786
24, 072
41, 785
39,000
35, 645
1,309
1,792
2,683
2,571
2,739
2,823
2,639
5,598
3,847
5,576
4,179
4, 623
5,328
5,710
3,033
126, 519
140,019
262, 740
234,163
214,051
118,986
131,886
252, 537
221, 754
208,110
105, 098
116, 568
217, 388
195. 969
180,521
4,947
6,659
11,749
10, 689
10.533
8,941
8,659
23,400
15, 096
17, 056
7,533
8,133
10, 203
12, 409
5, 941
1941: J a n . - M a y
1945: J a n . - M a y
May
J une
July
.
August
September
October
- -
25
238
Urban
1941: J a n . - M a y
May-
...
1945: J a n . - M a y
May
June
July
August
September
November
r
_. _ _
__
Revised.
Table 3 . — B U I L D I N G C O S T S — I n d e x of wholesale prices of building materials
[Source: U. S. Department of Labor. 1935-1939=100; converted from 1926 base]
All building
materials
Period
Lumber
Paint and
paint materials
Plumbing
and heating
Structural
steel
Other
129.2
110.6
105.8
171.5
128.7
121.4
103.5
111.4
_.
121.8
122.1
122.9
122.8
123. 7
126.8
128.4
128.4
109.1
109.1
109.1
109.1
109.3
109.6
109.9
110.3
171.9
172.5
172.7
172.9
172.6
172.8
173.2
175.7
130.8
130.7
130.4
131.9
132.3
132.3
132.4
132.5
121.4
121.7
121.7
122.7
124.8
124.8
124.8
124.8
103.5
103.5
103.5
103.5
103.5
103.5
103.5
103.5
112.6
112.8
112.8
112.8
113.0
113.1
114.0
114.5
_
. _
- . _ ._ . . . .._ __
.... .
134.0
135.0
139.5
141.3
142.7
128.7
128.7
129.2
132.0
132.6
111.0
111.4
112.3
112.4
112.6
176.5
178.3
186.6
190.9
192. 1
132.5
132.5
132.5
132.8
133. 0
124.8
124.9
124.9
132.4
132. 4
103.5
109.7
115.9
115.9
115.9
115. 3
115.9
121.4
122.0
125 1
+1.0
+8.9
+0.5
+8.9
+0.2
+3.2
+0.2
+1.7
0.0
+9.1
0.0
+12.0
+2 5
+11 1
.
..
.
Percent change:
M a v 1946-April 1946
M a y 1946-May 1945
Cement
131.0
131.1
131.2
131. 5
131.8
132.1
132.5
133.4
1944: M a y
1945: M a y
June..
July
August -_ __
September
October
November
December
1946: January
February
March
April
May
Brick and
tile
+0.6
+11.8
Table 4 . — B U I L D I N G COSTS—Index of building costs for the standard house
[Average month of 1935-1939=100]
M aterial
L a b o r . _ __
Total
r
April
1946
May
1946
E l e m e n t of cost
Mar.
1946
Jan.
1946
Feb.
1946
i Doc.
i 1945
Nov.
1945
Oct.
1945
Sept.
1945
Aug.
1945
July
1945
June
1945
May
1945
139.2
152.3
138.0
150. 3
r 137. 1
148.8
' 136. 3
148.3
135. 5
147.8
135.2
147.3
135. 0
147.1
134.6
146.1
134.1
145.9
133.9
144.4
133.8
144.0
133.5
143.9
133.4
143.8
143. 5
142.1
141. 0
' 140. 3
139.6
139.2
139.0
138.4
138.0
137.4
137.2
137.0
136. 8
Revised.
Table 5 . — B U I L D I N G COSTS—Index of building costs in representative cities
l
[Average month of 1935-1939=100]
1945
1946
1944
1943
1942
1941
1940
June
June
June
June
June
Federal H o m e Loan B a n k District a n d city
June
Boston:
Hartford, Conn_.
Portland, M e . . . .
Boston, Mass
M a n c h e s t e r , ISi. H
Providence, R. I
Winston-Salem:
B i r m i n g h a m , Ala___
W a s h i n g t o n , D . C__. . __
Atlanta, Ga
_
Baltimore, M d
___•
Richmond, Va
.__
___
__
_. _
__
.__
_._
__
_ _____
_ _
__
__ __ ___ _ __
Chicago:
Chicago, 111
Milwaukee, Wise
Topeka:
D e n v e r , Colo
W i c h i t a , K a n s _ ___
__
Omaha, Nebr
___ _
O k l a h o m a C i t y , Okla
_
__
_____
__ .__
Mar.
Dec.
Sept.
June
144.1
164.8
140.8
132.9
151.4
137. 5
153.8
137.9
r 129. 5
147.6
137.9
153.5
134.2
128.0
i46.0
137.3
152.5
133.6
127.1
142.7
136.8
152. 5
133. 6
127.1
142.4
135.1
148.2
132.8
120.0
138.6
128.2
134.7
126.9
114.3
128.7
128.6
122.9
123.9
108.4
120.7
114.4
109.4
112.4
101.5
111.8
135.6
159.2
158.0
162.7
145.8
132.0
' 153.1
153.5
156.8
136.7
127.6
150. 4
151. 7
155.8
135.9
127.4
144.5
148.3
152.7
133.8
127.4
144.5
145.7
150.5
133.5
126.5
141.4
142.5
148.8
130.2
118.8
133.4
130.1
141.3
120.7
115.8
127.4
122.7
128.7
115.1
107.1
111.3
113.9
114. 5
106.5
98.1
104.3
96.5
103.9
95.7
124.8
155.1
121.8
148.1
117.2
146.9
115.3
145.8
112.6
144.4
112.0
142.3
109.5
131.5
106.7
124.4
99.9
114.3
99.2
108.4
136.5
140.2
142.4
165.2
132.1
138.1
140. 5
162.3
129.1
137.3
139.9
153.3
127.3
136.8
137.3
151.5
128.2
136.7
137.3
151.4
122.5
134.4
133.3
149.4
112.9
129.0
126.3
133.3
112.2
125.5
125.5
127.7
103.5
114.7
111.8
119.4
96.8
105.9
106.4
108.8
:
103.1
98.9
104. 0
98.1
105. 2
r Revised.
1
For complete explanation of these data, see Statistical Supplement to April 1946 REVIEW.
Table 6 . — M O R T G A G E LENDING—Estimated volume of new home mortgage loans by a l l
savings and loan associations, by purpose and class of association
[Thousands of dollars]
Class of association
P u r p o s e of loans
Period
Reconditioning
L o a n s for
all o t h e r
purposes
Total
loans
State
members
Nonmembers
Construction
Home purchase
Refinancing
$95,243
$1,064,017
$163,813
$30,751
$100,228
$1,454,052
$669,433
$648,670
$135,949
49, 016
387, 424
64, 259
11, 393
38,346
550, 438
251, 377
244, 634
54, 427
7, 338
98, 872
14,415
2,967
8,931
132, 523
59, 229
60,141
13,153
180,550
1,357, 555
196,011
40, 736
137,826
1,912,678
911, 671
836,874
164,133
January-May
36,832
493, 870
73, 300
12, 768
49, 854
666, 624
312, 751
293, 591
60, 282
May
June
July
August
September.
October
November.
December.
13,032
17, 567
17,658
20,730
16,375
23,985
24,481
22, 922
120, 244
116,798
112, 761
120, 557
113,103
135, 224
135,685
129, 557
15,887
17,147
15,622
17,146
16,786
18, 751
19,411
17, 848
3,396
3,364
3,351
3,971
3,980
4,857
4,487
3,958
10, 520
12,435
11,007
11,259
12,189
13, 562
14,095
13,425
163,079
167,311
160,399
173, 663
162,433
196,379
198,159
187, 710
75,607
79,603
76,355
82,197
77,321
95,815
96,709
90,920
71,921
74, 219
70, 264
75,644
70, 642
84,819
85,804
81,891
15, 551
13,489
13, 780
15, 822
14,470
15, 745
15,646
14,899
222, 455
981, 891
114, 750
27,968
99, 757
1,446, 821
737, 783
606, 628
102, 410
30,807
30,866
45, 391
53, 202
62,189
145,342
154, 219
202, 995
235,877
243, 458
21,372
19,801
24,244
24,882
24,451
3,803
4,217
6,198
6,796
6,954
15, 518
16,416
21,335
22, 242
24, 246
216,842
225,519
300,163
342,999
361, 298
109,146
111, 927
155,960
174, 468
186, 282
92,103
97,305
123,945
143,114
150,161
15, 593
16, 287
20, 258
25,417
24.855
1944.
January-May May.
1945.
Federals
1946
January-May
January._
February.
March
April
May
312
Federal Home Loan Bank Review
Table 7.—LENDSNG—Estimated volume of
new loans by savings and loan associations
Table 8.—RECORDINGS—Estimated nonfarm mortgage recordings, $20,000 and under
[Dollar a m o u n t s are sh o w n in t h o u s a n d s ]
C u m u l a t i v e new loans
(5 m o n t h s )
saw loans
Federal Home Loan
Bank District and
class of association
May
1946
April
1946
MAY 1946
[Thousands of dollars]
Mav
1945
1946
1945
Percent
Change
!
Savings Insur- Banks
and
and
ance
trust
loan
comassoci- panies companies
ations
Federal H o m e
Loan Bank
District and
state
U N I T E D STATES —
Federal _ . . _
State member
Nonmember—
.
Federal
State member
Nonmember
737, 783 312, 751 +135. 9
606, 628 293, 591 +106. 6
102, 410 60, 282 + 6 9 . 9
186, 282 174, 468
150,161 143,114
24, 855 25,417
75, 607
71, 921
15, 551
25, 556
23, 098
11, 782
89, 855
43, 434 +106. 9
11, 797
11, 563
2,196
10, 231
10, 866
2,001
4,940
5,242
1,600
41, 364
40, 473
8,018
17, 746 + 1 3 3 . 1
20, 524 + 9 7 . 2
5,164 + 5 5 . 3
38, 578
35, 522
17, 680
141, 299
63, 811 + 1 2 1 . 4
16, 713
17,168
4,697
14, 723
14, 901
5,898
6,263
7,990
3,427
57, 665
62, 966
20, 668
Boston
C o n n e c t i c u t - __
Maine,-Massachusetts _
New
Hampshire _ __ .
Rhode Island,Vermont
New York
New York-_
Federal-.
State m e m b e r
Nonmember
Pittsburgh
Federal
State member
Nonmember-..
...
...
28, 533
27, 037
14,989
112,011
15,123
9,027
4,383
14, 269
8,326
4, 442
6,655
5,272
3,062
58, 393
34, 578
19, 040
52, 656
Winston-Salem
Federal--State member
Nonmember
Cincinnati
_
Federal - State member
Nonmember
Indianapolis
Federal.
State member
Nonmember
Chicago
Other
Indimortviduals gagees
Total
$361, 298 $342, 999 $163, 079 $1, 446, 821 $666, 624 +117.0
U N I T E D STATES
Boston
Mutual
savings
banks
. _
46, 782
22, 334 +158. 2
30,141 +108. 9
11, 336 + 8 2 . 3
56, 773
+97.3
26,124 +123. 5
19,911 + 7 3 . 7
10, 738 + 7 7 . 3
19, 868
203, 647
83, 227 +144. 7
44, 450 +159. 5
34, 206 + 1 1 6 . 9
4,571 +208. 2
30, 347
18, 556
3,753
27,104
16, 302
3,376
10,433
8,366
1,069
115, 366
74,195
14, 086
55, 267
55,815
27, 445
232, 273 110, 245 +110. 7
25, 540
27, 248
2,479
25, 422
27, 457
2,936
11, 963
13, 673
1,809
106, 287
115,338
10, 648
47, 829 +122. 2
54, 849 + 1 1 0 . 3
7,567 + 4 0 . 7
21, 472
21, 566
9,475
88,123
38,116 + 1 3 1 . 2
12, 780
8,212
480
12, 334
8,782
450
5,149
3,860
466
50,428
35, 471
2,224
20, 010 +152. 0
16,150 + 1 1 9 . 6
+13.7
1,956
37,560
36, 028
17, 982
149, 629
17,095
18,892
1,573
16, 964
17, 546
1,518
7,555
9,124
1,303
67, 458
75, 040
7,131
31, 787 + 1 1 2 . 2
37, 535 + 9 9 . 9
6,152 + 1 5 . 9
21, 843
21,190
9,157
87, 583
39,116 +123. 9
12, 622
6,518
2,703
12, 222
6,816
2,152
4,951
3,151
1,055
48, 878
28, 862
9,843
19, 784 + 1 4 7 . 1
14,183 +103. 5
5,149 + 9 1 . 2
17, 607
17, 081
7,276
75,450
33,184 +127. 4
8,039
9,377
191
8,197
8,630
254
3,405
3,751
120
37,198
37,457
795
16, 311 + 1 2 8 . 1
16, 423 + 1 2 8 . 1
450 + 7 6 . 7
18,192
16, 262
7,682
75, 973
34, 916 + 1 1 7 . 6
11,006
5,116
2,070
8,882
5, 301
2,079
4,050
2,257
1,375
43, 872
23, 493
8,608
18, 543 +136. 6
10, 380 +126. 3
5,993 + 4 3 . 6
44,034
42, 618
19, 743
190, 978
88, 328 +116. 2
25. 220
18i 484
330
24,120
18,187
311
10, 243
9,235
265
110, 874
78, 755
1,349
47, 833 + 1 3 1 . 8
39, 289 +100. 5
+11.9
1,206
75, 474
N e w Jersey
New York
Des Moines _
Federal
State member
Nonmember-.,
Little Rock
Federal
.
State m e m b e r
Nonmember
__
Topeka.
Federal
State member
Nonmember.. .
.
San Francisco
Federal.
State m e m b e r
Nonmember
July 1946
29,716
1,012
11,827 25,017
10, 685
5, 308
83, 565
4,071
935
21, 491
681
34
277
5,408 4,897
538 1,243
4, 389 15, 917
3,645
631
4,811
2,033
72
2, 653
20, 735
3, 453
49,538
729
2,152
338
20
1,252
1,116
592
548
774
276
51
482
17
2,828
5,612
1,399
27, 525
2,493
19, 728 21,392
26, 571
5,974
21,551
731
1,762
6,280 1,494
13,448 19, 898
6,107
20, 464
3, 285
6, 783
23, 871
83,906
248
1,068
176
10,068 107, 777
26, 893
2,917
25,157
1,613
11, 900
7,261
75, 741
D e l a w a r e , . - _.
Pennsylvania-.
W e s t Virginia --
376
24, 722
1,795
173
2,201
543
343
21,941
2,873
154
1, 459
453
10, 277
1,170
121
6,881
259
1, 620
67,481
6,640
Winston-Salem-_
30, 619
4,960
12,155
588
23,129
6,332
77, 783
1,304
545
997
1,530
872
5,248
4,928
5,067
3,651
8,542
2, 808
718
3,601
435
2,084
232
294
636
233
501
1,050
2,055
2,226
2,501
778
805
1,743
588
2, 542
8,076
1,895
2,356
1,658
952
4,120
500
1,510
1,186
451
560
468
785
9,455
18, 792
9.190
14, 732
6, 440
3,176
10,750
1,272
10,388
1,272
0
651
8,595
1,142
285
3,181
5,871
Pittsburgh
Alabama
D i s t r i c t of Columbia
-.
Florida.Georgia
Maryland
N o r t h Carolina.
S o u t h CarolinaVirginia
61,711
3,867
27, 213
Kentucky
Ohio___
Tennessee
5,297
54, 583
1,831
757
1,935
1,175
2,295
22, 219
2,699
Indianapolis
22, 803
4,254
24,837
2
6,273
5,828
63, 997
Indiana
Michigan
13, 333
9,470
1,759
2,495
9,595
15, 242
2
2, 511
3,762
1, 510
4,318
28, 710
35, 287
_
40, 013
1,768
14, 766
38
12,834
16, 216
85, 635
_..
31, 493
8,520
1,329
439
9,237
5,529
38
8,210
4,624
14,871
1, 345
65,140
20, 495
640
9,101
10, 803
62, 878
1,453
2,776
4,480
208
184
1,047
3,585
6,057
108
6
12, 494
21, 258
26,823
1,438
865
Cincinnati
Chicago
_
Illinois-Wisconsin
9,337 113, 788
9,285
91, 785
12,718
+98.3
20,499
3,858
17, 977
Iowa _
Minnesota
Missouri
North Dakota _
South D a k o t a -
4,776
7,991
6,544
790
398
380
1,314
2,097
46
21
4,838
4,952
7,645
286
256
Little Rock__ _._
18, 336
6,387
6,604
14, 421
10, 509
56, 257
Arkansas
LouisianaMississippi
N e w Mexico- __
Texas
1,280
5,564
868
307
10, 317
276
668
276
37
5,130
962
394
624
199
4,425
801
3,034
783
394
9,409
82
1,402
320
22
8,683
3, 401
11, 062
2,871
959
37, 964
Des M o i n e s
Federal.- _ .
State member
Nonmember
$333,192 $38, 862 $241,330 $51,851 $187, 311 $111,892 $964,438
640
16, 435
1,619
7,241
9,305
4,932
39, 532
Colorado
Kansas
Nebraska
Oklahoma
2,872
5,635
1,693
6,235
198
243
521
657
1,821
2,876
655
1,889
4,456
1,436
715
2,698
1,528
1,596
152
1,656
10,875
11, 786
3,736
13,135
San Francisco
38, 642
5,727
73,825
Arizona
California
IdahoMontana
Nevada
Oregon
Utah--:
Washington
Wyoming
1,027
24, 302
1,185
768
221
2,575
1,359
6,898
307
93
4,309
69
63
23
419
201
516
34
1,303
58, 720
623
630
318
1,640
1,689
8,479
418
T o p e k a . _ _._
.
-
1,289
187
1,102
52, 704
25, 298 197, 485
3,292
42,100
601
589
804
2,193
385
2,302
438
183
5,898
20, 202 149, 633
171
2,654
21
2,071
45
1,411
1, 055
8,069
3,939
305
3,279 22, 576
1,234
37
313
Table 9 . — M O R T G A G E RECORDINGS—Estimated volume of nonfarm mortgages recorded
[Dollar a m o u n t s are s h o w n in t h o u s a n d s ]
Savings a n d loan
associations
Insurance
companies
j B a n k s and t r u s t
M u t u a l savings
j
companies
;
banks
Individuals
O t h e r mortgagees
All mortgagees
Period
Total
Percent
$2,009,707
1945- —
January-May
May
June
July
August
September
October
November
December
35.7
703, 619
172,421
176,051
169, 784
181,156
172, 551
207.006
205,100
194,440
34.0
35.4
36.1
36.2
37.0
37.2
37.2
36.6
36.9
1,364,112
220, 420
217, 621
277,408
315, 471
333,192
35.2
34.8
35.2
36.2
35.6
34.6
Total
Percent
$244,432
Total
Percent!
$1,091,021
4.6
4.4
4.5
4.3
4.2
4.1
4.0
4.1
4.2
4.1
4.2
4.2
4.1
3.8
4.0
Total
I Percent
19. 4 j $216,!
Total
3.9 $1,402,103
91,
91
90,
93
91.
110,
114,
110,
18.8
18.7
18.8
19.2
19.1
19.7
19.9
20.5
21.0
71,103
18,981
18,572
18,062
18,488
18,472
23, 711
23,310
25, 264
915.880
139,126 j
140,890 I
180,656 j
213,878 i
241,330 j
23.7
21.9
22.8
23.6
24.1
25.0
179, 994
24,401
24, 973
33,914
44,855
51,851
Percent
24.9
Total
Percent
$658, 945
11.7
Total
Percent
$5, 623,190
100.0
551, 981
125,849
121,800
116,964
120, 015
111,384
131, 590
130, 986
117,383
26.7
25.8
25.0
24.9
24.5
24.0
23.7
23.4
22.2
258,
57
57,
54,
56,
51,
60,
63,
57,
12.5
11.8
11.8
11.5
11.4
11.0
10.9
11.3
10.9
2, 069, 837
487,435
487,041
469,269
489,389
464,157
555,893
560,180
527,424
100. 0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
822, 693
151,601
140,477
162,986
180,318
187,311
21.3
23.9
22.7
21.3
20.3
19.4
430, 924
71,633
68,703
79,926
98, 770
111,892
11.1
11.3
11.1
10.4
11.1
11.6
3,870, 557
634,117
618, 763
765,973
887,266
964, 438
100.0
100.0
100.0
100.0
100.0
100.0
1946
January-May
January
February
March
April
May
156,954
26, 936
26,099
31,083
33,974
38, 862
4.6
3.9
4.0
4.4
5.1
5.4
Table 1 0 . — G l L E N D I N G — H o m e Loans 1
Table 1 1 . — F H A — H o m e mortgages insured 1
[Dollar a m o u n t s are s h o w n in t h o u s a n d s ]
[ P r e m i u m p a y i n g ; t h o u s a n d s of dollars]
T o t a l loans reported closed
and disbursed2
N o . of
applications and
reports
Cumulative through
May
May
May
May
May
June
June
June
June
3.
10
17
24
31
7..
14
21
28
166, 311
176,128
187, 290
199, 230
209, 334
221, 212
233, 533
246,201
257,986
Title I I 2
Title V I
(603)
Period
New
A m o u n t of
guaranty
and insurance
Number
119. 834
121, 635
124, 885
129, 300
133, 972
140, 334
148, 462
157,004
165,737
Prineinal
a m o u n t of
loan
$564, 482
573,775
588, 014
611, 561
634, 812
670, 297
712, 281
756, 782
804,907
$249, 292
253, 562
261, 440
272, 240
283, 948
299, 903
320. 568
341, 997
364,514
1
Records of V e t e r a n s ' A d m i n i s t r a t i o n .
2 T o t a l s do not i n c l u d e 43,270 loans acted u p o n a n d a p p r o v e d for loan
closing. T h e i r dollar volume, e s t i m a t e d at $210,000,000, b r o u g h t the aggregate
p r i n c i p a l of G I h o m e loans to a b o u t $1,015,000,000 on J u n e 28.
1945: M a y
June
July
August
September
October
November.
December
1946: J a n u a r y
February
March
April
Mav
__
_.
...
Existing
T o t a l insured a t end
of period
$80
374
347
666
968
1,228
1,777
1,965
$22. 272
18,841
18, 207
17, 286
15,165
18, 606
18, 887
18,051
$23, 707
20, 413
19. 056
14, 992
12,634
15, 253
10, 779
11, 383
$6, 262,025
6,301,653
6,339, 263
6, 372, 207
6, 400,974
6, 436,061
6, 467, 504
6,498,903
3,095
3,728
3,760
3,570
4,406
24, 275
20, 006
24,346
24,160
26, 389
11, 293
7,508
6,273
7,853
9,700
6, 537, 566
6, 568,8086,603,187
6,638, 770
6, 679, 265
1
Figures r e p r e s e n t gross i n s u r a n c e w r i t t e n d u r i n g t h e period a n d do n o t
t a k e a c c o u n t of principal r e p a y m e n t s on p r e v i o u s l y insured loans.
2 Figures since J a n u a r y 1946 are e s t i m a t e d .
Table 1 2 . — F H L B A N K S — L e n d i n g operations and principal assets and liabilities
[ T h o u s a n d s of dollars]
Lending operations,
M a y 1946
P r i n c i p a l assets, M a y 31, 1946
Federal H o m e Loan Bank
Advances
B o s t o n . . _._
Pittsburgh
Winston-Salem
Indianapolis
Chicago
Des Moines
L i t t l e Rock
Topeka
S a n Francisco
. . . ._
__
._
._
._
_ - . _. __
-
_ _
__
_
__
$1,874
2,599
3,056
3,128
3,641
2,103
4,736
2,651
1,777
1,021
7,128
Repayments
Advances
outstanding
$1, 338
1,081
1,397
1,006
890
537
3,427
1,818
170
279
4,938
$12, 617
10,879
18, 206
16, 939
18, 693
12,492
34,130
11,974
8,039
4,904
23, 796
Cash i
Government
securities
CaDital a n d p r i n c i p a l liabilities,
M a y 31, 1946
Capital 2
Debentures
Member
deposits
T o t a l assets
M a y 31.
1946 i
$1, 496
1,585
1,497
1.440
2,016
1,720
2,676
243
461
765
3,497
$9,484
32, 394
9,521
4,122
26,183
15, 421
4,393
12,165
9,623
8,547
19, 589
$20,716
29,188
17, 972
19, 790
29,170
15, 661
25,135
15,000
13,102
11,203
27, 314
10,000
2,500
5,000
8,000
12, 500
8, 500
5,000
2,000
11, 500
$971
15,850
1, 329
281
12, 985
6,068
3,695
975
102
580
8,206
$23, 651
45,057
29, 335
22, 579
47, 206
29, 742
41, 350
24, 491
18, 212
14, 289
47, 050
$2,000
M a y 1946 ( c o m b i n e d total)
33, 714
16,881
172, 669
17, 396
151, 442
224, 251
67,000
51,042
343, 002
A p r i l 1946
24, 462
21, 858
155,836
21, 303
162, 216
223, 078
67,000
50, 351
340, 569
M a y 1945
6,307
7,423
50, 924
23, 475
271,929
211, 303
50,000
86, 359
347,994
i I n c l u d e s i n t e r b a n k deposits.
314
2
C a p i t a l stock, s u r p l u s a n d u n d i v i d e d profits.
fee/era/ Home Loan Bank Review
Table 1 3 . — I N S U R E D A S S O C I A T I O N S — P r o g r e s s of institutions insured by the FSLIC
[Dollar a m o i m t s are s h o w n in thousands]
Number
of associations
Period a n d class
of association
ALL
Total
assets
Operations
Federal
Home
N e w priLoan
New
Private
B a n k ad- m o r t g a g e vate inrepurvestvances
loans
chases
ments
GovernP r i v a t e rem e n t bond p u r c h a s a b l e
capital
holdings
Government
share
capital
$4,678,335
4, 786,912
4, 840, 292
4,913,879
4,981,869
5, 055, 073
5,109,101
5,219,910
$28, 751
28, 751
23,499
23, 378
23, 367
23, 367
23, 366
23, 366
$44, 597
124,465
114,469
105, 344
92, 618
79,497
88, 304
185, 210
$121, 808
126,824
121, 572
131, 239
122,098
150,000
151,335
144,664
$130,182
163,156
196,944
156,189
146,290
163, 628
147,022
180, 352
$62,980
56, 279
144, 932
83, 357
77, 855
91, 668
92,650
71, 777
48 4
34 5
73 6
53 4
53.2
56 0
63.0
39.8
5,299, 668
5,361,314
5,432,080
5, 507,923
5, 589, 795
20,165
19, 374
19, 373
19,373
19, 358
163, 559
154,835
144, 111
145, 744
159, 546
169,107
174, 954
238, 268
268, 705
285, 613
283, 487
182,679
198,176
198.896
196,993
205, 537
122,099
129, 573
123,265
116,370
72 5
66.8
65.4
62 0
59 1
2,988,435
3,058, 683
3, 089,026
3,137,136
3,182,465
3, 231,187
3,271,317
3, 348, 567
22, 616
22, 616
18,138
18,069
18,058
18,058
18,058
18,058
29, 089
97,940
90, 017
81,805
71, 252
58, 694
62,153
137,839
75, 607
79,603
76, 355
82,197
77, 321
95,815
96, 709
90,920
85,977
106, 770
129,958
102,190
96,180
108,252
97, 373
120,195
40,063
33, 601
100, 301
55,016
51, 428
59,925
59,023
44, 352
46 6
31 5
77.2
53 8
53.5
55.4
60.6
36.9
3, 395,108
3,435,482
3, 481, 382
3, 532, 406
3, 586, 501
15,250
14, 540
14, 539
14,539
14, 539
124,242
118, 501
109,213
106, 599
115, 009
109,146
111,927
155,960
174, 467
186, 282
190, 748
122,452
132,145
132, 092
130, 551
144,388
82,173
86,471
81, 241
78,013
75 7
67.1
65 4
61.5
59.8
1, 689, 900
1, 728, 229
1, 751, 266
1, 776, 743
1, 799, 404
1,823,886
1,837, 784
1,871, 343
6,135
6,135
5,361
5,309
5,309
5,309
5,308
5,308
15, 508
26, 525
24,452
23, 539
21, 366
20, 803
26,151
47, 371
46, 201
47, 221
45, 217
49,042
44, 777
54,185
54, 626
53, 744
44,205
56,386
66,986
53,999
50,110
55, 376
49, 649
60,157
22,917
22, 678
44,631
28, 341
26, 427
31, 743
33,627
27, 425
51.8
40.2
66.6
52 5
52.7
57.3
67.7
45.6
1, 904, 560
1,925,832
1,950, 698
1,975,517
2.003, 294
4,915
4,834
4,834
4,834
4,819
39, 317
36, 334
34,898
39,145
44, 537
59, 961
63, 027
82, 308
94, 238
99, 331
92,739
60,227
66,031
66, 804
66,422
61.149
39,926
43,102
42,024
38, 357
65.9
66.3
65.3
62.9
57.7
N e t first
mortgages
held
Gash
$3, 433, 871
$282,911
$1, 585,708
3, 572, 964
303,195
1, 607,844
3, 763,128
307, 712
1,839,008
4, 051, 583
279, 543
1, 792,418
Repurchase
ratio
INSURED
1945- M a y
June
July
September
December.
1946' J a n u a r y
March
2,469
2,471
2,473
2,475
2, 476
2.476
2,474
2,475
$5, 292,169
5, 549, 563
5, 594,461
5, 666, 351
5, 725.962
5, 797, 238
5, 878,098
6,148,230
2,477
2,481
2,485
2,486
2,488
6,204,954
6, 274,832
6, 359,998
6,462,376
6, 592, 552
1,466
1,465
1, 467
1,469
1,467
1,466
1,466
1,467
3, 337, 648
3, 528,027
3,552,154
3, 595,087
3, 632,197
3, 676, 401
3, 732, 490
3,923, 501
1,467
1,468
1,469
1,469
1, 471
3,955, 391
3,999,837
4, 050, 719
4,118,076
4, 204,057
1,003
1,006
1,006
1,006
1,009
1,010
1.008
1,008
1,954,521
2, 021, 536
2,042, 307
2,071, 264
2, 093, 765
2,120, 837
2,145, 608
2,224,729
1,010
1,013
1,016
1,017
1,017
2,249, 563
2, 274,995
2, 309, 279
2,344, 300
2, 388, 495
,
FEDERAL
1945: M a y
June
July
.
September
D e c e m b e r . . _.
1946* J a n u a r v
February
March
._
_ _
May
2,164, 653
178, 377
1,052, 668
2, 255, 283
178,411
1,067, 837
2, 382,101
194,678
1,213, 609
2,571,919
169,884
1,175,285
.1,269,218
104,534
533,040
1,317,681
124, 784
540,007
1, 381, 027
113,034
625,399
1,479,664
109, 659
617,133
STATE
N
111
1Q45- M a v
September
December
1946: J a n u a r v
February.
March
May
._
Table 1 4 , — S A V I N G S — S a v i n g s and loan share investments and repurchases, M a y 1946
[Dollar a m o u n t s are s h o w n in t h o u s a n d s ]
I n s u r e d associations
All associations
1945: J a n u a r y - M a y
New
investments
Repurchases
Net
inflow
$887, 982
$500, 459
$387, 523
January
February
March
April
May
56.4
New
investments
Repurchases
Net
inflow
$723, 388
$387, 201
$336,187
50.6
38.6
73.6
53.1
51.6
59.1
64.6
42.4
May
June
July
August
September
October
November
December
1946: J a n u a r y - M a y .
Repurchase
ratio
1, 293, 583
334, 961
220, 469
243,363
248,077
246, 713
857, 032
244, 619
150, 656
158, 627
155,455
147, 675
436, 551
90, 342
69, 813
84, 736
92,622
99, 038
66.3 1,060,211
65.2
62.7
59.9
283,487
182, 679
198,176
198,896
196. 973
205,
122,
129,
123,
116,
537
099
573
265
370
U n i n s u r e d associations
Repurchase
ratio
53.5
New
investments
Repurchases
$164, 594
$113, 258
Net
inflow
$51, 336
68.8
48.4
34.5
73.6
53.4
53.2
56.0
63.0
39.8
31, 902
41,287
46,417
40, 052
48,533
39,149
37, 024
43, 533
363, 367
65.7
233, 372
160,188
73,184
1.6
77,950
60, 580
68,603
75,631
80, 603
72.5
66.8
65.4
62.0
59.1
51, 474
37, 790
45,187
49,181
49, 740
39,082
28, 557
29, 054
32,190
31, 305
12, 392
9,233
16,133
16,991
18, 435
75.9
75.6
64.3
65.5
62.9
19,111
22, 589
34, 251
20, 908
22,651
28,153
26, 231
23,193
12, 791
18,698
12,166
19,144
25, 882
10,996
10, 793
20, 340
July 1946
Repurchase
ratio
59.9
54.7
73.8
52.2
45.7
71.9
70.8
53.3
315
U. S. GOVERNMENT PRINTING OFFICE: 1 9 4 6
@FedFRASER