Full text of Federal Home Loan Bank Review : June 1937, Vol. 3 No. 9

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Vol. 3

£KSGfe.

No. 9

FEDERAL
HOME LOAN BANK

REVIEW
JUNE
1937

ISSUED BY
FEDERAL HOME LOAN BANK BOARD
WASHINGTON D.C.




Federal Home Loan Bank Review

TABLE OF CONTENTS
Page

Three years of share account insurance
Insurance Corporation admission fee
A New England home
The new Accounting Guide for Federal Savings and Loan Associations
Home ownership and income
Appraisal methods and policies
Administrative rulings, Board resolutions, and Counsel's opinions
Residential construction and home-financing activity
Indexes of small-house building costs
Monthly lending activity of savings and loan associations
Federal Savings and Loan Insurance Corporation
Federal Savings and Loan System
Federal Home Loan Bank System
Statistical tables
Number and estimated cost of new family dwelling units
Rate of residential building
Indexes of small-house building costs
Estimated lending activity by all savings and loan associations
Monthly lending activity of reporting savings and loan associations
Wholesale price of building materials
Institutions insured by Federal Savings and Loan Insurance Corporation
Monthly operations of State-chartered insured associations
Monthly operations of Federal savings and loan associations
Federal Home Loan Bank System
H. O. L. C. subscriptions to shares of savings and loan associations
Properties acquired by H. O. L. C
H. O. L. C. Reconditioning Division
Directory of member, Federal, and insured institutions added during April-May

283
287
289
290
293
297
301
302
304
304
306
306
306
308
308
310
311
312
314
315
316
316
317
317
318
318
318
319

SUBSCRIPTION PRICE OF REVIEW
T H E FEDERAL HOME: LOAN BANK REVIEW is the Board's medium of communication with member institutions of the Federal Home Loan
Bank System and is the only official organ or periodical publication of the Board. The REVIEW will be sent to all member institutions without
charge. To others the annual subscription price, which covers the cost of paper and printing, is $1. Single copies will be sold at 10 cents. Outside of the United States, Canada, Mexico, and the insular possessions, subscription price is $1.40; single copies, 15 cents. Subscriptions should
be sent to and copies ordered from Superintendent of Documents, Government Printing Office, Washington, D. C.




APPROVED BY T H E BUREAU OF T H E BUDGET

Federal Home Loan Bank Board
J O H N H . FAHEY, Chairman
W I L L I A M F . STEVENSON

T . D . W E B B , Vice
F . W. CATLETT

Chairman
H . E . HOAGLAND

OFFICERS OF FEDERAL HOME LOAN BANKS
BOSTON:
B. J. ROTHWELL, Chairman; E . H . W E E K S , Vice Chairman; W . H . NEAVES, President; H . N .
FAULKNER, Vice President; FREDERICK W I N ANT, J R . , Secretary-Treasurer; L. E . DONOVAN,

Secretary.
N E W YORK:
GEORGE MACDONALD, Chairman; F . V. D . LLOYD, Vice Chairman; G. L. BLISS, President;

F . G. STICKEL, J R . , Vice President-General Counsel; ROBERT G. CLARKSON, Vice PresidentSecretary; D E N T O N C. LYON, Treasurer.
PITTSBURGH:

E . T . TRIGG, Chairman; C. S. TIPPETTS, Vice Chairman; R. H . RICHARDS, President; G. R.
PARKER, Vice President; H . H . GARBER, Secretary-Treasurer.
WINSTON-SALEM :

G. W. W E S T , Chairman; E . C. BALTZ, Vice Chairman; O. K. LAROQUE, President-Secretary;
G. E . WALSTON, Vice President-Treasurer; J o s . W . HOLT, Assistant Secretary.
CINCINNATI:

H . S. KISSELL, Chairman; L. A. HICKMAN, Vice Chairman; W. D . SHULTZ, President; W. E .
J U L I U S , Vice President; A. L. MADDOX, Treasurer; DWIGHT W E B B , J R . , Secretary.
INDIANAPOLIS:

F . S. CANNON, Chairman-Vice President; S. R. LIGHT, Vice Chairman; F R E D T . G R E E N E , President; R. F . RURTLESS, Secretary-Treasurer.
CHICAGO:

H . G. ZANDER, Chairman; MORTON RODFISH, Vice Chairman; A. R. GARDNER, President; J O H N
RARDWICK, J R . , Vice President; E . H . RURGESS, Treasurer; CONSTANCE M . W R I G H T , Secretary .

DES MOINES:
C. R. ROBBINS, Chairman; E . J. RUSSELL, Vice Chairman; R. J. RICHARDSON, PresidentSecretary; W. H . LOHMAN, Vice President-Treasurer; J. M . MARTIN, Assistant Secretary;
A. E . MUELLER, Assistant Treasurer.
LITTLE

ROCK:

J. GILBERT L E I G H , Chairman; W. C. JONES, J R . , Vice Chairman; R. H . W O O T E N , President;

H . D . WALLACE, Vice President-Treasurer; J. C. CONWAY, Secretary.
TOPEKA:
W. R. MCWILLIAMS, Chairman; G. E . M C K I N N I S , Vice Chairman; C. A. STERLING, PresidentSecretary; R. H . RURTON, Vice President-Treasurer.
PORTLAND:
F . S. MCWILLIAMS, Chairman; R. H . HAZEN, Vice Chairman; C. H . STEWART, President;
IRVING ROGARDUS, Vice President-Treasurer; W. H . CAMPBELL, Secretary; M R S . E .

M.

SOOYSMITH, Assistant Secretary.
Los ANGELES:
C. H . W A D E , Chairman; D . G. DAVIS, Vice Chairman; M . M . HURFORD, President; F . C. N O O N ,




Secretary-Treasurer.

Three Years of Share Account Insurance

T

HE mutual principle on which the early
building and loan associations were formed
enabled the savings of a community to be devoted
to the construction of its homes. The principles
of mutuality and local responsibility, in times
when each community was comparatively selfsufficient from an economic point of view, provided the thrifty with an opportunity for secure
investment and the home builder with loans at
reasonable rates.
With the growth of a more complicated economic and financial system, however, it became
apparent that these principles should be extended
if this mutual system of home financing with local
responsibility was to be adequately protected
against widespread financial and industrial uncertainties. The principles of local thrift and cooperation were sound, and needed only to be developed
on a wider basis in order to serve their established
functions in home financing. To help develop a
mutual system of protection for mutual thrift
institutions was the purpose of the Federal
Savings and Loan Insurance Corporation, which
will complete the third year of its existence on the
anniversary of the National Housing Act, June 27.
The Federal Savings and Loan Insurance Corporation was set up to safeguard and promote the
function of encouraging thrift investment through
a mutual system of insurance of savings. To
this end, its policies were established in accordance
with the particular needs of the savings and loan
association in mind.
T H R E E NEEDS

T H E first of these needs is to attract the investment of local savings. The second is to lend funds
at rates attractive to borrowers, yet sufficient to
provide adequate dividends to investors. The
third is to command the technical information and
services, as well as the credit reserves, that can
come only through a nation-wide system, without
June 1937




sacrificing the principles of local enterprise and
responsibility so essential to the mutual thrift,
home-financing institution.
To help the association meet the first of these
needs, the Federal Savings and Loan Insurance
Corporation insures the safety of all withdrawable
share accounts and credited dividends of the
institutions which apply for such protection and
meet its standards. By providing such security,
it offers the strongest inducement for savings.
Leading economists today point out that the rate
of return is much less important as an inducement
to saving than is the guarantee of safety. The
strongest answer to the damaging effects on confidence wrought by the depression is a nation-wide
system of mutual insurance, supported by the
Federal Government.
CONFIDENCE RESTORED

T H E psychological effect of share account insurance, numerous officials of insured institutions
have testified, is of tremendous value to the association in establishing the confidence of potential
investors. "Our withdrawal list melted away
with astonishing rapidity. . . . We know that insurance alone was responsible. . . . After our
first newspaper announcement . . . we noticed
an immediate increase in the number of people
making payments on their old accounts. . . .
Many remittances are sent to us by absolute
strangers who have heard of our insured shares."
Such comments are supported by the fact that
the 1,693 institutions insured by April 30 had
assets of $323,000,000 in excess of their aggregate
assets at the respective dates of their insurance
by the Federal Savings and Loan Insurance
Corporation. In view of the fact that savings
and loan associations in general had no marked
increase in assets during the same period, and the
fact that the change from the share-account to
the direct-reduction loan tended to diminish
283

the assets of many insured associations, this
growth is doubly impressive.
Insurance of share accounts for the savings and
loan association is not a development that is entirely unrelated to the general trend in national
financial affairs. Commercial banking lost a great
measure of public confidence during the recent
depression, and regained it largely through mutual
support of banks under the system of the Federal
Deposit Insurance Corporation. Mutual institutional insurance was so successful in renewing
confidence in the commercial banking structure of
the country that it was followed by two distinct
innovations in the field of urban home financing,
both of which were instituted by the National
Housing Act.
The restoration of confidence in commercial
banks by the guarantee of the Federal Deposit
Insurance Corporation attracted deposits in greater
volume than the demand for loans absorbed, and
Congress adopted a measure to encourage the
use of these funds for home financing. By Title
II of the National Housing Act, it provided a
Federal system of insurance of individual mortgages, in order to permit the commercial banks to
ASSETS

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handle long-term mortgage loans with greater
freedom and liquidity.
By Title IV of the same National Housing Act,
however, it gave the savings and loan associations
of the country a similar opportunity to serve both
the investing and the borrowing public. By
setting up the Federal Savings and Loan Insurance
Corporation, it made it possible for these institutions, which offered long-term investors the
prospect of a reasonable dividend rate, to provide
them with complete security as well. It is significant that the type of insurance provided by the
Federal Savings and Loan Insurance Corporation
contemplates a service to the individual with funds
to invest or deposit different from the service furnished by the Federal Deposit Insurance Corporation. The latter type of protection provides for
the liquidity of funds in institutions which usually
offer a comparatively small return, or none at all,
on deposits. The insurance furnished by the
Federal Savings and Loan Insurance Corporation
provides for complete safety combined with the
moderate return demanded for long-term savings,
and with a measure, but not a complete degree, of
liquidity. The savings and loan association is

INSURED

ASSOCIATIONS

1 1

i 1Y
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PRLSEN T

4 SSI •TS*

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I SEP OCT NOV DEC. JAN FEE MAR A P R M A Y J U N . J U L A U 6 S E P 0 C T N 0 V 0 E C JAN FEB MAR APR MAY JUN. JUL AUG SEP OCT NOV DEC JAN FER MAR. APR MAY JUN JUL. AU& SEP OCT NOV. DEC
TH"U
1934
1935
1936
AUG
* Estimate based upon current reports from approximately 9 0 V . of all insured associations.

284




Federal Home Loan Bank Review

thereby furnished with the type of protection
most likely to appeal to the thrifty individual who
wants moderate dividends on long-term savings.
The security that the Federal Savings and Loan
Insurance Corporation provides for the lending
institution extends beyond its own share accounts.
It gives the investors in each association the confidence that is necessary to prevent heavy withdrawal or repurchase demands; it thereby protects that association from the necessity of
suddenly liquidating its real property or its loans;
and thus it tends to prevent the depression in
property values that is so damaging to the homeloan business as a whole. Especially because of
its connection with the services of the Federal
Home Loan Banks, which provide a reservoir of
credit in case of emergency, the Corporation's
protection in this way helps to prevent the basic
trouble that has been so damaging to lending
institutions in the past, rather than merely
offering to pay investors in insured institutions
for damage that may be done.
PREMIUM REASONABLE

respect to the second need of the savings
and loan association, that for an adequate spread
between dividend and lending rate, it is essential
that any premium paid for protection be a
reasonable one. The difficulties inherent in computing the proper premium for the type of insurance are considerable. When the Insurance
Corporation was set up, there were no accurate
records of past experience in building and loan
associations with respect to the aggregate dollar
volume of losses sustained, or the shrinkage in
assets in liquidating institutions. On the basis of
reasonable estimates on each of these phases of
the problem over both good and bad years,
however, a careful check was made into the
probable future losses in institutions eligible for
insurance by the Federal Savings and Loan
Insurance Corporation.
After these figures were computed, it was considered sound policy to give the insuring institutions the benefit of a far more favorable premium
rate than would be estimated merely from comparing aggregate liabilities with the anticipated
mortality rate and ratio of asset shrinkage among
lending institutions. There are two reasons for

WITH

June 1937




this saving in lowered premiums that is passed on
to the insured institution. The first is the
"cushion" of uninsured liabilities, such as surplus,
undivided profits, reserves, and the investments
exceeding $5,000 in single share accounts. Since
these liabilities are not insured, allowance was
made for deducting them in estimating the necessary premium rate. The second reason for the
low premium rate is the allowance made for the
reduction of risk by the factors of selection and
supervision. It was estimated that by careful
selection of institutions to be insured, and by a
certain degree of supervision, the mortality rate
and the expectation of asset shrinkage could be
diminished by about one-half.
For a premium set at such a favorable rate,
savings and loan associations are obtaining a large
degree of protection for their share accounts,
which results in a great inducement to the investment of savings. Of the total number of shareholders in insured institutions, 98 percent are completely protected by the Federal Savings and Loan
Insurance Corporation. The overwhelming majority of shareholders who hold investments of less
than $5,000 is, of course, responsible for this high
percentage.
LOCAL RESPONSIBILITY

T H E third need of the savings and loan association is to command the technical information and
services, such as insurance, that can come only
through a nation-wide system, without sacrificing
local enterprise and responsibility. With this
desire for local responsibility the Federal Savings
and Loan Insurance Corporation is in complete
agreement. The regulations which it makes are
only those necessary to provide the minimum requirements for the safety of insured associations.
Special arrangements are made for the gradual
compliance, when an institution is insured, with
the general standards favored by the Corporation.
An applicant for insurance will not be rejected
because it has outstanding certificates of deposit,
savings accounts, or other securities on which it
has contracted for a definite rate of return or a
definite maturity, although the Corporation places
restrictions on the issuance of such securities thereafter. An institution when insured may continue
to make loans on real estate situated within the
285

territory in which it was operating when the Cor-^
poration was set up, although restrictions are
placed on its subsequent operations in other territory more than 50 miles from its principal office.
Institutions are not required to issue identical
forms of securities, although all forms of certificates, passbooks, or other investment contracts
must be approved by the Corporation to make sure
that they comply with sound principles of management.
Examinations of insured institutions are conducted by the same staff that examines Federal
associations and members of the Federal Home
Loan Bank System. The System's Examining
Division cooperates whenever possible with the
examiners of the State in which the institution is
operating, in order to minimize the cost. The
standards of eligibility for insurance of accounts
are the solvency of the applicant, the sufficiency
of its earnings as a going concern, the safety of its
financial policies and their consistency with economical home financing, its ability to pay withdrawals or repurchases in a normal manner within
a reasonable time, and the safety and competence
APPLICATIONS

of its management. All of these standards are
merely those necessary to safeguard the Corporation's reserves which protect the other insured
institutions.
Supervision by the Corporation is not merely
restrictive in its nature. It is to its interest to
protect each institution that it insures, and in
special cases it may seek to prevent default or to
take steps to restore institutions that have defaulted. Above all, the Corporation is interested
in promoting sound management policies and has
been partly responsible for the widespread improvement in recent years. Neither the Federal
Home Loan Banks nor the Federal Savings and
Loan Insurance Corporation, in protecting savings and loan associations and providing them
with a credit reservoir and insurance reserves,
take away any of the local responsibility, or hamper any of the desirable local enterprise, that make
the thrift home-financing institution so valuable
to the nation. The function of the Federal Savings and Loan Insurance Corporation is not to
interfere with local management and to detract
(Continued on next page)

RECEIVED AND ASSOCIATIONS
(CUMULATIVE)

INSURED

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JUN. SEP OCT. NOV. DEC JAN. FEB MAR. APR. MAY JUN. JUL AUG. SEP OCT. NOV DEC JAN. FEB MAR APR MAY J UN. JUL. AUG. SEP OCT NOV. DEC JAN FEB. MAR. APR MAY JUN. JUL. AUG. SEP OCT NOV DEC
THRJU
1934
1935
1936
1937

286




Federal Home Loan Bank Review

Insurance Corporation Admission Fee

T

HE payment of premiums by institutions
insured by the Federal Savings and Loan
Insurance Corporation will cease whenever the
Corporation's reserve fund becomes equal to 5
percent of the insured accounts and creditor obligations of all insured institutions. For this reason, it is necessary to adjust the cost of admission
so that institutions obtaining insurance after considerable progress has been made toward completing this reserve will pay an equitable admission
fee while obtaining permanent protection.
The Act which established insurance of share
accounts clearly recognized this principle. The
National Housing Act, as Amended, provides that
any applicant for insurance after the first year of
operation of the Corporation "shall pay an admission fee based upon the reserve fund of the Corporation, which, in the judgment of the Corporation, is an equitable contribution."
F E E R I S E S YEARLY

T H E admission fee charged during the second
year was accordingly set at $200 for each million
dollars of all accounts of an insurable type and
creditor obligations of the applicant. I t was
increased to $300 per million for the third year.
During the fourth year, which will begin on June
28, 1937, the fee will be $400 per million, the
Board of Trustees of the Corporation has decided.
The fees, which are added to the receipts from
premiums to build up the reserve fund, had
amounted on May 15 to a total sum of $95,601.72.
More than half of this total, or $57,232.23, had
been collected since the previous July 1. It is
(Continued from preceding page)

from personal responsibility, but to make sure that
mistakes of individuals will not destroy the savings
of others, and that the failure of one organization
will not deflate mortgage values and discredit the
savings and loan association as an institution.
June 1937




obvious that admission fees are adding a progressively greater amount to the Corporation's
reserves.
COMMON BENEFITS

T H E Board of Trustees, in setting up an equitable admission fee for the coming year based upon
the reserve fund, was faced with a complex problem. The Corporation's reserve fund, at the end
of April, was $1,967,407.47. Newly admitted
institutions will benefit from this fund, in that
they will have to pay premiums for a shorter
period, before the required amount in the reserve
fund is reached, than institutions already insured.
Institutions now insured, on the other hand, will
benefit from the admission of additional institutions because of the consequent increase in the
stability and prestige of the insurance system and
the diversification of its potential liabilities.
Because of the mutual benefit resulting from the
admission of new members, an equitable admission
fee must not be computed simply by a mathematical computation, increasing the fee established
during the first year in direct proportion to the
increase in the reserve fund. Such a rigid mathematical formula would result in an admission fee
for the coming year more than three times as
high as that recently established by the Board.
The new admission fee goes into effect on June
28. All applications for insurance in the office
of the Insurance Corporation in Washington, or
in a Federal Home Loan Bank, or in the mails
addressed to a Bank, by midnight on June 27, will
make it possible for the applicant to take advantage of the admission fee of $300 per million.
That the provision of such mutual protection
meets a vital need is evidenced byTthe steady
growth of the Federal Savings and Loan Insurance
Corporation. It began operations late in 1934,
and grew by May 15,1937, to include 1,704 mem(Continued on p. 319)

287

SMALL HOUSE ARCHITECTURAL ASSOCIATES
OF MASSACHUSETTS

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FIRST-FLOOR PLAN

SECOND-FLOOR PLAN

NO. 105
288




Federal Home Loan Bank Review

A New England Home

T

H E a characteristics of New England homebuilding customs and traditions, modified to
meet contemporary living requirements, are exemplified in the design prepared by the Small
House Architectural Associates of Massachusetts,
and reproduced on the opposite page.
The Small House Architectural Associates, in
cooperation with the Federal Home Loan Bank
of Boston, have had prepared a portfolio of smallhome designs which are offered to prospective
home builders through cooperating member institutions. These designs form one element of
the technical advisory and supervisory service
now available to home builders in the Boston area
under the direction of a competent architectural
group. Design No. 105, a frame story-and-a-half
house with four principal rooms, has been chosen
for publication in the REVIEW as a typical example from the portfolio of small-home designs.
The design of a small home involves as careful
planning as that required for a more imposing
structure, if economy and efficiency are to be
obtained. Efficiency has to do with providing
good circulation which means that direct connection from one part of the house to another is
possible. In this plan it is noted that from the
kitchen every section of the house can be reached
with a minimum number of steps.
DINING SPACE SEPARATE

T H E plan suggests a separation for dining space
by decorative china cases in the space allocated
for the kitchen. In small-home design this is a
means of economy and frequently meets with
favor. Dining can be accommodated conveniently, however, at the end of the large living room.
Each principal room has cross ventilation, and
garden terraces and porches can easily be added a t
some future time.

June 1937
146647—37-




Until a new formula for living has been devised
and accepted, this small-house design offers in its
simple structural lines and straight-forward plan
maximum usefulness at minimum expense. Allowing for a full basement, 8' ceiling height on first
floor and V 6 " ceiling height on the second floor,
the cubage approximates 16,000 cubic feet.
CAREFUL PROPORTIONS

the point of view of design the success of
the* plan is dependent upon the proportions of the
windows and dormers, the pitch of the roof, the
architectural detail of the entrance, the colors
selected and, last but not least, the quality of the
craftsmanship. The workmanship and integrity
of the builder in interpreting the plans, however,
is essential not only to provide attractive design,
but to insure structural soundness. Without
sound construction in those unseen parts of a
structure such as foundations, structural framing,
roughing-in by the mechanical trades, and proper
flashing, the building in time will prove unsatisfactory. In the progress of a construction program competent technical supervision can be very
helpful in assuring adequate protection.
Other designs in the portfolio include satisfactory plans for five- and six-room homes showing
different room arrangements as well as a variety
of exterior architectural treatments. In the foreword to the portfolio the cooperating architectural group states: "The accompanying designs
will be supplemented by others as needed to suit
the requirements of owners as they develop."

FROM

EDITOR'S NOTE: Plans for a typical home in each of

several regions of the United States, as prepared by
architectural groups, cooperating under the Federal Home
Building Service Plan, will be reproduced in forthcoming
numbers of the FEDERAL HOME LOAN BANK REVIEW.

289

The New Accounting Guide for Federal
Savings and Loan Associations

T

HE effect of cooperation between private and
governmental organizations in promoting im
proved savings and loan practices is illustrated by
the Accounting Guide for Federal Savings and
Loan Associations, recently published by the
Federal Home Loan Bank Board. The Guide,
which was prepared in the office of the Governor
of the Bank System, outlines for Federal associations the accounting practices by which they may
most efficiently conform to standard methods of
accounting and reporting.
In the early days of the savings and loan association, there was less need for cooperative relationship between such institutions in different
localities because there was less interdependence
in our general financial system. But today the
development of our financial system has led
mutual home-financing institutions to consolidate
and advance their position by cooperation through
trade associations, and through the credit reserve
and other facilities of the Federal Home Loan
Bank Board. A standard system of accounting,
presenting a uniform picture yet allowing reasonable freedom in accounting detail, is a basic
necessity for such cooperation.
DIVERSITY OF FORMS

the Federal Home Loan Bank Board tried
to develop a reporting form for its member institutions that would harmonize with State requirements, it found the diversity of reporting forms
required by the 48 States a serious handicap. It
became necessary for each member to make out
two different sets of reports, one for the Bank
System and one for the State. To remedy this
situation and make reporting more generally
uniform, State building and loan supervisors, the
United States Building and Loan League, and
representatives of the Federal Home Loan Bank
Board cooperated to provide a standard report
WHEN

290




form and urged its adoption by all States. The
Federal Home Loan Bank then adopted it for
reports from their members.
It was recognized from the beginning that a
standard form of reporting could not be truly
effective without a standard method of keeping
books. The American Savings and Loan Institute, to provide a uniform but flexible method of
accounting for all savings and loan associations,
prepared its "Standard Accounting Manual",
which has been adopted by many institutions
throughout the country.
As specific questions arose in connection with
the accounts of Federal associations special
Accounting Bulletins were issued by the Board to
answer them. In this way a large body of useful
accounting information was collected. In order to
coordinate this information with the revised
procedures required by the new Charter and the
new Rules and Regulations for Federal associations, and to present it in compact and convenient
form, the Accounting Guide was prepared. This
Guide suggests a uniform system that is in
harmony with that proposed by the American
Savings and Loan Institute.
CONTENTS OF THE GUIDE

T H E first part of the new Guide under the title,
"Classification of Accounts", is in the form of a
list of general ledger accounts. This list is divided into: (1) asset accounts, (2) capital and
liability accounts, (3) income accounts, and (4)
expense accounts. The numbers and titles are in
agreement with the Standard Chart of Accounts
of the Standard Accounting Manual. This permits the insertion of any account needed for the
operation of any particular association.
All the items in the classification are then
treated in some detail. Both the proper charges
and credits to individual ledger accounts, and the
proper procedure during or at the completion of
Federal Home Loan Bank Review

any transaction are described. The Guide is
clear and explicit enough to serve as a layman's
source book of proper accounting practice.
DETAILED ANALYSIS

this discussion, there follows a detailed
analysis of many special accounting problems
directly related to Federal savings and loan associations. One such problem, for example, is
the handling of bonuses on share accounts. The
Guide quotes from both the old and new Federal
charters (E and K), and clearly sets forth the
pertinent passages in the Rules and Regulations
for Federal Savings and Loan Associations, with
regard to such bonus plans. Throughout the
Guide, suggestions as to accounting practice are
accompanied by quotations of pertinent passages from legislation or regulations. In this way
it presents in convenient form the fundamental
reasons for specific recommendations.
Many of the chapters, however, are less concerned with specifically Federal problems, and
more directly related to general savings and loan
practice. For example, under "Computation of
Dividends", the Guide outlines several procedures
for recording dividend calculations. To illustrate
these calculations, it reproduces sample shareaccount ledger cards for both investment share
accounts and savings share accounts. A large
table for calculating dividends from date of investment to the next semiannual dividend date is
also included. If the dividends are to be calculated
at the end of each semiannual period on a dollarmonth basis without accrual, another procedure
is followed, and the Guide gives a list of monthly
equivalents of common dividend rates to facilitate
calculations.
The same detailed method of presentation is
also followed with regard to interest charges. The
vital difference between the effective rate and the
nominal rate of interest is emphasized. A table
shows the extent to which premiums, both gross
and installment, increase the effective interest
rates. The soundness of making the nominal
rate the same as the effective rate is stressed.
Premiums and other loan fees and commissions,
charged for the purpose of covering recurrent costs
arising in connection with the loan, often have
been misunderstood by borrowers and caused ill
AFTER

June 1937




will to associations. To compensate for the elimination of subsidiary charges, however, the
Accounting Guide describes the adoption of a
variable interest rate plan (which was analyzed
in the May and June 1936 issues of the R E V I E W ) .
If loan fees are charged, however, Federal savings and loan associations are shown what calculations are necessary to make certain that the
effective rate of interest is within the limits set by
the Federal Home Loan Rank Act, and to pro-rate
any gross fee to earnings over a reasonable period
of time.
One of the greatest difficulties facing building
and loan accountants is the variety of loan types
that they must handle. In discussing the directreduction loan, which eliminates many bookkeeping difficulties, the Guide gives sample
mortgage-loan ledger cards with detailed explanation, and discusses many particular problems
such as advance payments, delinquencies, and
reserves for uncollected interest. Share account
sinking fund loans, straight loans, share loans, and
second-mortgage loans are also discussed in their
more limited relationships to Federals.
TAXES AND INSURANCE

with servicing loans, an entire
chapter is devoted to the difficult problem of
handling the payment of taxes and insurance
premiums on mortgaged property. In the past
many associations have left payment of taxes to
the borrower. This practice has often resulted in
a considerable period of delinquency with a consequent loss of security for the institution as taxes
have a prior claim over any other kind of lien.
The Guide explains the plan of monthly tax
collection by the association to insure payment
and gives several alternative methods of recording
this on the books of the association. It also
illustrates a simple method of handling loans
insured by the Federal Housing Administration.
An innovation in handling loans has been introduced in the Guide to clarify and simplify
procedure. Under t h e ' 'Loans in Process'' chapter,
a method is developed for accurately recording the
closing of loans and for the handling of construction loans in accordance with sound practice. To
facilitate the making of reports, the Guide also
advocates the adoption of a "Register of Loans
I N CONNECTION

291

Made." Loans are entered in the register at the
time they are set up on the books of the association.
The association will be more than repaid for the
trouble involved in this small additional bookkeeping when it makes an analysis of loans for monthly
reports.
ACCOUNTING FUNCTION

SUCH suggestions to facilitate reporting indicate
the essential function of an accounting system.
Its purpose is to record, for the benefit of the
public, members, directors, management, and
supervisory authorities, the association's financial
condition. The general public will obviously not
desire to inspect the books of the association in
detail. It must depend for its information on
summaries in the form of monthly, semiannual, or
annual reports. The accounting system should
therefore facilitate the preparation of these reports,
and at the same time provide checks against
innocent mistakes or fraudulent practices.
When the Federal Home Loan Bank Board
proposes through the Accounting Guide a1 standard system of accounting for Federal associations,
it does not imply that associations are expected
to use the same type of ledgers, journals, or account books, nor that they are to follow even
similar manual practices. It is obvious that the
requirements of a small association are not those
of a large association. In the past, needless expense and confusion have often occurred when
growing associations found it necessary to revise
their accounting systems. Many newly organized
associations have adopted what they considered
entirely satisfactory systems of accounting, only
to find them inadequate as the volume of their
business grew* The Accounting Guide provides
a system adaptable to the individual needs of
both large and small associations.
An accounting system should not be a burden
to the management. On the contrary, it should

292




be a very useful tool, revealing the association's
financial position and the trend of its share account
investment and mortgage lending. When the
accounting system of one savings and loan association differs from that of other associations its
manager must be content with the record of past
activity within his single institution. If standard
accounting practices are adopted and standard
reports are made, however, he has a valuable
basis of comparison with others. The efficiency
of the manager depends in part on his knowledge
of the monthly, weekly, or even daily progress of
the association, and his ability to forecast its position in future mortgage-lending activity. In
order to have such knowledge and ability, it is
helpful for him to adapt his own accounting system to the practices of similar lending institutions.
E X P E N S E REDUCED

ONE aim of the system set forth in the Guide is
the reduction of expense to the association.
Besides facilitating the making of reports, the
Guide eliminates confusing elements in order to
reduce, in the long run, the cost of examination
and auditing.
Just as a clear and adequate system of accounting enables an association to state its position
clearly to its shareholders, so a standard system
of accounting would enable all savings and loan
associations to describe their services more clearly
to the country as a whole. Without an accurate
statistical picture of savings and loan operations,
which can be compiled only from comparable
accounts of individual institutions, both private
organizations and governmental authorities are
handicapped in the services they can render. The
Accounting Guide describes in clear detail the
bookkeeping practices by which Federal associations can most easily and efficiently present a
comparable picture of their operations.

Federal Home Loan Bank Review

Home Ownership and Income
This article, dealing with cities of about 300,000 population, is the second of a series discussing home ownership and
income in cities of various sizes.

T

H E greater tendency of wage-earning families than of other occupational groups to own
their homes as soon as they become financially able
to do so, and the tendency of all families to live in
better homes when owning than when renting, are
two general trends that were apparent in the study
of metropolitan home ownership and income, as
illustrated by data on Chicago, presented in the
May REVIEW. In spite of the considerable differences between a metropolis and the city of about
300,000 population, the same general trends become apparent when we consider two sample
cities of the latter size.
Portland, Oregon, and Denver, Coloriado, may
be taken as fair samples of the large city. Neither
is close enough to a metropolis to be dominated by
a stronger economic unit. Neither depends exclusively on a single industry. Studies of carefully selected groups of families in these two cities
will therefore be of value to the savings and loan
association in a city of comparable size. The
general trends relating to home ownership that
such studies discover are of course of direct concern to all home-financing institutions.
SPECIFIC TYPES COVERED

article is based on data collected by the
Bureau of Labor Statistics for the Study of Consumer Purchases, in which several Federal agencies
are cooperating. The Study answers questions
about the incomes and expenditures of families of
specific types, rather than merely of "average"
families. The home-financing institution can
therefore obtain from this Study information
about families in its potential market, excluding
those families in which it has relatively little
interest. All data on Portland and Denver given
in this article were gathered in 1935 and 1936 and
refer only to those native white families that include both husband and wife.
The median income of relief and non-relief
families thus selected at random in Portland and
THIS

June 1937




Denver is lower than that for Chicago. Half of
Portland's families had an annual income of
$1,497 or more, while Denver's median family
had a $1,527 income.
In spite of the more modest income levels, more
than twice as great a proportion of non-relief
Proportion of home owners to all families in Portland
and Denver, classified by income and occupational
groups
Non-relief native white families with both husband and wife, 1935-1936
[Based on a random sample of 40 percent in Portland, and 20 percent
in Denver]
[Source: U. S. Bureau of Labor Statistics, Urban Study of Consumer
Purchases]

Percent of home owners

Income group

Portland, Oregon:
Total non-relief
Under $500
$500 to $1,000..
$1,000 to $1,500
$1,500 to $2,000
$2,000 to $3,000
$3,000 to $5,000
$5,000 and over.
Denver, Colorado:
Total non-relief
Under $500
$500 to $1,000..
$1,000 to $1,500
$1,500 to $2,000
$2,000 to $3,000
$3,000 to $5,000
$5,000 and over.

All
occu- Wage Cleriearnpacal
ing
tions

Busiand
professional

50.6
54.0
38.4
41.7
47.1
62.3
64.7
77.4

48.2
42.5
32.0
41.1
53.2
67.2
67.9
71.4

46.8
29.8
28.7
37.2
40.8
59.3
68.9
76.5

54.4
50.0
48.7
44.0
43.2
59.9
62.1
77.8

41.3
33.8
29.6
31.8
34.7
51.8
57.4
71.3

36.1
23.9
21.7
31.4
36.6
61.7
61.5

37.5
28.6
23.6
22.9
30.8
50.4
55.4
81.8

47.1
30.0
42.9
37.5
34.6
44.9
57.4
70.2

families in these cities owned their homes as in the
metropolis, Chicago. In Portland, 50.6 percent
of families were home owners; in Denver, 41.3
percent. As in Chicago, families in higher income
groups are more likely to own their homes. In
Portland, 38.4 percent of families with incomes
293

between $500 and $1,000 are home owners, as
compared with 77.4 percent of families with
incomes of more than $5,000. (Denver's comparable figures are 29.6 percent and 71.3 percent.)
In each case, the proportion rises steadily from
the $500 income level up, and the sharpest
increase in home ownership comes at the $2,000
level.
In these two cities, as in Chicago, there is a
clear tendency for wage-earning families, in
greater proportion than other families, to own
their homes whenever it is economically practicable. Other groups, which have higher average
incomes, in general have a higher proportion of
home owners. But at most specific income levels
the wage earner is more likely than the business
and professional man or the clerical employee to
have a home of his own. Even more significant is
the fact that the marked rise in the percentage of
home ownership with wage-earning families comes
at the $1,000 or $1,500 income level, rather than at
$2,000, as with other groups. The wage earner
will undertake home ownership, it seems, on a
lower income than the so-called "white collar"
groups.
WAGE-EARNER MARKET

SINCE 41.2 percent of all Portland families and
36.6 percent of all Denver families are wage
earners, it would be reasonable to infer that
homes within their financial reach would find
a ready sale. This possibility adds emphasis in
the moderately large city, as in the metropolis, to
the opportunities existing in the lower-cost
residential market.
As in the Chicago survey, the Bureau of Labor
Statistics, in computing the effective income rather
than the nominal money income of families in
Portland and Denver, added to the money income
of home owners the amount by which the net
rental value of their homes exceeded the expense
of home ownership. After deducting interest,
taxes, and repairs from the rental value of the
owned home, the Bureau added the remainder
to each family's net money income. The result
was to increase the total family income figures
for all home owners by 5.2 percent in Portland
and 5.7 percent in Denver. As the REVIEW
pointed out last month, this computation does
not take into account the depreciation in the
294




investment in a home nor the interest on that
investment. The risk involved in fluctuations
in neighborhood values, and the cost to the home
owner of services occasionally covered by the
rental payments must also be taken into account
in comparing rental and ownership.
OWNED HOMES BETTER

T H E home owner, in the moderate-size city as
in the metropolis, puts back into the home at
least the amount that it saves hini in rental
payments. The accompanying graphs show how
the home owners in each income class have homes
worth more than those occupied by renting
families of comparable incomes. The rental
values of homes occupied by their owners was
calculated by checking carefully the owners' estimates against the rents paid for homes of the
same size and type in the same neighborhood.
This tendency of the home owner to obtain
superior standards of shelter is even more significant, with relation to money income, than the
graphs show. This is true because many families
have been placed by reason of home ownership
in a higher income category than their money
income would place them, and the chart indicates
that they may frequently have homes better
than those of renting families in a higher-income
group.
This tendency does not mean the same thing for
every home owner. For one, it may mean an individually and socially desirable expenditure to provide wholesome surroundings for his family. For
another, it may mean a misplaced investment in a
depreciating neighborhood, or the thoughtless
assumption of obligations far beyond his power to
meet. In general it illustrates the extent of the
American family's desire to invest its savings in a
home, and thus indicates that the home-financing
business has a special opportunity and a special
obligation.
In the city of 300,000, as compared with the
metropolis, the burden of rents is much lighter on
all families, and the relief is naturally felt to a
greater extent by the lower-income groups, than
in the metropolis. No group in either Portland
or Denver with an income of $1,000 or more
paid for rent more than 23.5 percent of its income,
which was the general average in Chicago. This
Federal Home Loan Bank Review

is true in spite of the higher level of Chicago incomes. The accompanying table shows how the
proportion of income spent for rent decreases for
the higher income groups, and how the proportion
may vary between cities.

extent from financial necessity rather than preference. As renting families receive higher incomes,
they show a more marked preference for singlefamily homes rather than apartments, data on both
cities indicate.

Proportion of Effective Family-Income Spent for Rent:
Family Income

$750-$l,000
$1,000-11,250
$1,250-11,500
$1,500-$1,750
$l,750-$2,000
$2,000-$2,250
$2,250-$2,500

Denver
(percent)

Portland
(percent)

HOUSING PROBLEM VARIES

22. 2
18. 8
17. 0
16. 2
15. 6
14. 7
14. 5

29. 0
23. 5
20. 4
19. 0
17. 2
16. 6
15. 3

T H E Study of Consumer Purchases, by separating its data on native white families including both
husband and wife from those on other types of
families, presents the savings and loan association
with a more accurate picture of its most likely
customers. By compiling and presenting data on
other types of families as well, it shows how complex the housing problem of the country is, and
how it may vary in different regions. For example,
the Bureau of Labor Statistics has presented data
on native negro families, including both husband
and wife, in Atlanta, Georgia. The following data
are on families of this type, and were collected
during 1935 and 1936. Atlanta's white families
have a considerably higher median income than
those in either Denver or Portland, nearly as high
as those in New York or Chicago, preliminary figures compiled by the Study of Consumer Purchases
show. For this reason, the statistics on negro families in that city show how the housing problem
may be confused rather than clarified by statistics
on ' 'average" incomes and rents.

In both cities, the accompanying tables show,
wage earners at all income levels pay less rent in
proportion to their incomes than families in either
of the other groups. In Denver the highest proportion is paid by business and professional families, but in Portland their proportion generally is
equaled by that of clerical families at corresponding income grades.
The general preference for the detached singlefamily home is shown by data on both cities. In
Denver, 92.7 percent, and in Portland, 97.3 percent
of all home-owning families live in detached singlefamily homes. The renting families naturally include a greater proportion of apartment dwellers,
and 24.1 percent of Portland's renting families,
and 26.3 percent of those in Denver, live in apartments. But they choose apartments to some

VALUE OF RENTED AND OWNED HOMES COMPARED WITH
OCCUPANTS* ANNUAL INCOME
(SOURCE:* Bureau of Labor Statistics - Consumer Purchase Studies)
PORTLAND, ORE.

DENVER, COLO.
50
45
HI WES

40

01VNED*

35

s
4*

**

S

mo
r-q

oo
ow

O.M.

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•OO

O O
Ort

O O
•OO

earn

•or*

^Q

~* ~*
EFFECTIVE

June 1937




-eg

O O
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O.cvi
egevj

ANNUAL FAMILY

O O
IOO

cum
CVJOl

INCOME

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OIO
IOW*

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-f **ONES
R ENTED

20
15

O O
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alio

O O
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lOf-,

~" ~* — —
EFFECTIVE

O O
IOO
*•-<*

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O O
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O.CJ,
MCM

ANNUAL FAMILY

O O
IOO
M lO
CMM

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O O
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MiO

O O
O O
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lOlO

INCOME

295

One-half of Atlanta's negro families have an
income of $604 or less, and 80 percent of them are
either on relief or have an income of less than
$1,000. (One-quarter of all these families are on
relief.) Wage-earning families, making up 64.9
Rent paid in Portland and Denver by renting
families, classified by income and occupational
groups
Non-relief native white families with both husband and wife, 1935-1936
[Based on a random sample of 40 percent in Portland, and 20 percent
in Denver]
[Source: U. S. Bureau of Labor Statistics, Urban Study of Consumer
Purchases]

Amount of average monthly
rent

Income group

All
occupations

Wage
earning

Clerical

Business
and
professional

In direct contrast to the general trends disclosed
by the survey of native white families in large
cities, the tendency among Atlanta negro families
is for the wage-earning family, in spite of the fact
that its income is higher than that of other negro
families, to prefer renting to home ownership. In
the $500-$l,000 income group, only 12.4 percent
of wage-earning families own their homes, while
42.0 percent of business and professional families,
and 22.4 percent of clerical families, are home
owners. Wage earners among the Atlanta negro
families, as among other groups referred to in this
study, pay the lowest rents in each income category. The average monthly rents for non-relief
families in each occupational group are as follows:
business and professional, $14.20; clerical, $13.80;
and wage-earning, $11.30. To meet the needs
of the lower groups among these families, either
private or public housing must reach extremely
low rent levels.
TRENDS SIMILAR

Portland, Oregon:
Under $500
$500 to $1,000
$1,000 to $1,500
$1,500 to $2,000
$2,000 to $3,000
$3,000 to $5,000
$5,000 and over
Denver, Colorado:
Under $500
$500 to $1,000
$1,000 to $1,500
$1,500 to $2,000
$2,000 to $3,000
$3,000 to $5,000
$5,000 and over

$22. 30 $17. 60 $24. 80 $27.10
16.60 13.40 17.20 18.00
16.10 14.50 18.60 18.10
18.50 16.50 20.90 20.60
22.70 19.50 24.70 24.80
27.90 22.50 30.20 29.80
36.50 29.10 35.60 38.00
52.90
51.40
27.40
19.10
18.00
22.40
27.10
33.10
44.60
64.00

20.40
16.00
16.50
19.80
23.40
27.30
30.90

28.80
24.80
19.70
24.40
28.90
33.30
42.30
50.20

35.00
21.80
22.70
25.80
29.30
35.60
47.40
65.30

percent of the non-relief total, have higher
incomes than the general average, since their
median income is $718.

296




T H E native white families covered by the Study
of Consumer Purchases in the two cities of
300,000 population discussed in this article show
general tendencies similar to those of comparable
families in the metropolitan city which was the
subject of our article last month. Although the
different conditions in the two types of cities
caused variations in the actual figures, it seems
to be true that the urban wage earner, making up
the backbone of our cities' population, is most
strongly inclined toward home ownership. To
help him secure a home within his financial reach,
protected from influences that will cause its
depreciation in value, is a challenging opportunity for the home-financing institutions in our
large urban centers.

Federal Home Loan Bank Review

Appraisal Methods and Policies
This is the eighth in a series of articles.

D

EPRECIATION is a problem with which
the appraiser is always concerned, regardless of the method of appraising which he is
using. With the comparative method, he must
reduce the relative depreciation of various properties to monetary terms. With the capitalization method, depreciation is a factor in the
determination of the capitalization ratio and
also of the future income of the property. With
the cost-of-replacement-less-depreciation method,
the appraiser must arrive at an estimate in terms
of dollars of the deduction to be made because of
depreciation.
As the term is used in this article, depreciation
means the amount by which the value of the
property as a whole is less than the value of the
lot plus the cost of reproduction of the new house.
The causes of depreciation may be placed in three
general categories—physical, functional, and
economic.
PHYSICAL DEPRECIATION

depreciation is that which is due to the
actual physical wear and tear on the improvements. It may be unit or composite in its nature.
Unit deterioration affects only one particular
part of the house, such as a leaking roof or a
broken window. Deterioration of this sort usually
offers no difficulty to the appraiser. It generally
can be repaired readily and the depreciation
allowance can be considered to be equivalent to
the cost of repairing.
Composite deterioration refers to the general
physical decline of the house, due to age, use, and
weathering. It is true, of course, that with proper
construction and maintenance such deterioration
can be largely prevented or nullified, and a house
may be in as good condition a century or two
after it was built as it was originally. There is in
the little village of Winkal, in Germany, a house
which is said to be the oldest in that country,
since it has been occupied continuously for 13
centuries. If such longevity were the rule, the
PHYSICAL




FUNCTIONAL DEPRECIATION
FUNCTIONAL depreciation refers to the loss of
value from causes inherent in the structure itself.
Not infrequently a newly constructed house is not
worth its reproduction cost because of mistakes
in its planning, designing, or location. If the
exterior architecture of the house is obviously
unsuited to its environment, it will lessen its
value. A house of Spanish design in a community
of Colonial style homes would probably not find a
very ready market. If the size and shape of the
house are not suited to the lot, or if it is improperly
placed upon it, its salability, and therefore its
value, will be impaired.
The floor plan of the house should not depart
too far from current conventional requirements.
It should be remembered that the wife usually
has an important voice in the selection of a home
and that apparently small differences in the planning of a house may make a great difference in its
convenience and utility from her point of view.
Improper location of doors and windows may interfere greatly with the interior decoration of the
house. Inadequate cupboard and shelf space in
the kitchen and closet space in the bedrooms will
give any house a considerable handicap in the
sales or rental market. The relative size of the

297

June 1937
146647—37

rate of composite deterioration would be so small
that it could be disregarded. But in America, for
various reasons, we have not generally designed
our houses for such permanence. We accept
deterioration and depreciation as being a natural
part of the economic process. We take it for
granted that a point is reached in the life of every
house at which it becomes more desirable to let
the forces of deterioration operate unchecked than
to oppose them by repairs and maintenance expenses. Therefore, it is necessary in appraisal
practice to assume that a house will have a definitely limited period of economic usefulness and to
estimate how much of that period yet remains.

3

rooms is a factor of some importance. A bathroom of a size that would be adequate for a small
cottage would not be regarded as satisfactory in a
much larger house.
The style and taste in which a house is finished
and decorated have a great effect upon its immediate salability. If there are only mistakes which
can be remedied at small cost, such as a kitchen
finished in a wrong color scheme, they need not
bulk large in the appraiser's final evaluation. If,
however, it is necessary to install new lighting
fixtures throughout the house, or to change the
bathroom equipment, in order to correct the mistakes of poor or eccentric taste, the cost of so
doing may necessitate a considerable reduction
in the value of the property. A life-size picture in
vitreolite of "September Morn" in a bathroom,
cited by a Chicago appraiser as a true case,
probably would not appeal to the average home
purchaser.
In general, a house should possess the features,
the equipment, and the degree of fineness of finish
which purchasers in its price class customarily
expect to find. A slate or tile roof would probably
add little or nothing to the sale value of a modest
home of a type in which plain asphalt rolled roofing is customary, while asphalt roofing on an
expensive modern home would be so out-of-place
as to justify a depreciation reduction. A second
bathroom in a low-cost home would certainly not
increase the market value by the amount of its
cost, but the lack of it in a high-priced home
would probably lessen the value by much more
than the cost.
TREND TO MODERNISM

T H E trend toward modernism in architecture
offers appraisers an increasingly important and,
one may say, perplexing problem. The appraiser should not handicap progress and improvement in home designing by adopting an attitude
of undue conservatism. But he must realize
that in a period of transition a great deal of
experimentation is necessary and a great many
mistakes inevitable. It would require a prophetic
vision, indeed, to foresee the attitude in 10 or 15
years of the home-buying public towards some of
the present-day experiments in house designing
and planning. Savings and loan institutions
298




probably would be well advised to leave the
financing of extreme adventures in modernism to
other agencies and to place conservative appraisals
on the less extreme forms that have not yet proven
themselves to be more than a passing fad.
COMMON MISTAKES

the most common mistakes in the
planning of a house are those of over-improvement, under-improvement, and misplaced improvement. Over-improvement frequently results when
a man of considerable means builds a house
in his home community, for his own use, without
regard to its resale or investment value. A few
years ago in an Ohio city a house was built under
such conditions that, with the site, cost almost
$200,000. Within two years it became necessary
to sell the property and the highest price that
could be obtained, after considerable sales effort,
was less than one-fourth of the cost. Regardless
of the bargain that could be secured, there was
no one in the community who was willing and
who could afford to pay more than that. Less
extreme examples of over-improvement can be
found in almost every community. It is a safe
generalization for appraisers to follow that houses
that are conspicuously better than their neighbors
will not have a market value in proportion to their
cost.
The same principle holds true when the overimprovement is not conspicuous but is more or
less concealed in the quality of construction.
If a house has a 13-inch brick wall when 9-inch is
customary for the neighborhood, or has 2 x 12
joists instead of 2 x 8, and other features accordingly, the appraiser should make some allowance
for the high quality of construction but not an
amount fully equal to its cost. People who can
afford to buy a high-priced house usually prefer
to live in a neighborhood with others of the same
financial status.
From one point of view, both over-improvement
and under-improvement are simply the result of
unbalanced proportioning between the value of
the house and the value of the lot. In the case
of the former, the house is too costly in relation
to the lot; in the latter, the situation is reversed*
As a general rule, to which there may be exceptions, of course, the ratio of the value of the house
AMONG

Federal Home Loan Bank Review

to that of the lot should not be less than 3 or 4 to
1 and not more than 7 or 8 to 1.
Under-improvement is sometimes intentional,
not the result of errors in judgment. This is
frequently the case in rapidly developing neighborhoods or cities, where real-estate values are
greatly increasing. The owner of a $6,000 house
built on a lot that was worth $1,000 at the time
will not immediately remove the house and erect
a more costly one if the lot should increase in
value to $5,000. In all probability this will
eventually be done, but it may well be not until
some years later.
A misplaced improvement is one whose function
is obviously not suited to its location as, for example, a single-family residence entirely surrounded by business properties. As with underimprovements, such cases are often the result of
the rapid development of a community. Sometimes, though, they are the consequence of
mistakes of judgment in overestimating the growth
of a community, as was the case with a large hotel
which was expected to become the center of a
popular seaside resort, but has since been
practically abandoned.
CHOICE OF LOCATION

N O T infrequently, however, misplaced improvements are due to poor judgment in selecting the
location for a particular type of property. A
California appraiser cites a case in which a proposed improvement of this sort was prevented by
the good judgment of an association in refusing
to finance it. The would-be borrower was proposing to erect a 4-family building, costing $15,000,
on a lot valued at $5,000. In the appraisal process
it was found that the proposed location was in a
commercial district, on a heavy traffic artery, not
far from a railroad crossing. In the opinion of the
appraiser, the possible income from the property,
which was the best test to apply to it, would not
justify a valuation of more than $10,000, or half
the actual cost of replacement.
The degree of functional depreciation chargeable
to an improvement is a matter of locality as well
as of time. If a community is growing rapidly,
so that new houses embodying the latest styles
and improvements are being erected in great numbers, the value of the older ones may be adversely
June 1937




affected. In a community with a stationary population, as in many rural villages and towns in
which relatively few new houses are built, the
force of comparison in creating dissatisfaction
with the old is much weaker. Thus an 1890 style
of architecture or out-of-date bathroom equipment
may require much less reduction for functional
loss in some communities than in others.
ECONOMIC DEPRECIATION

of improvements is often caused by
forces outside the property itself. This type of
depreciation is, therefore, classed as economic. It
is necessary then that full consideration be given
the neighborhood in all appraisal practice. This
feature has been stressed in preceding articles in
this series. Houses are frequently worth less than
their cost of replacement because the neighborhood in which they are located has declined in
public esteem since they were built. In some cases
this decline is due to unfavorable changes in the
neighborhood environment, such as the erection of
an industrial plant nearby or the encroachment of
an undesirable social class. In some cases it is
simply the result of the development elsewhere of
newer, more modern residential sections.
A California appraiser, in discussing the problem, declared: "Our best residential section seems
to enjoy the distinction for about 10 years and
then the best section is somewhere else."
A word of caution: When the appraiser is
dealing with fine homes, he should look beyond
replacement value and consider the general quality of the district. Prices and values decline
rapidly in the formerly fashionable area as soon
as public opinion believes that some other spot is
the smart place to live.
Existing neighborhood depreciation is usually
easy to recognize, although the exact monetary
allowance that should be made for it in a particular
appraisal may be difficult to decide. The appraiser, however, is concerned not only with
existing conditions in the neighborhood but also
with what it is going to be during the ensuing 10
or 15 years. He must search for and weigh
carefully every evidence of future depreciation.
Improvements on properties in the course of
transition to a higher use are subject to economic
depreciation and there are occasions when a charge
DEPRECIATION

299

as high as 100 percent is justified even though the
physical life is by no means exhausted.
METHODS OF ESTIMATING AMOUNT OF
DEPRECIATION

U P TO this point we have considered the types and
causes of depreciation with which the appraiser
should be familiar. The next question that naturally arises is: "By what method or upon what
basis shall the amount of the depreciation in terms
of dollars and cents be determined?"
The answer depends in large part upon the nature
and cause of the depreciation. If it is of such a
sort that it can be remedied by repairs or remodeling, as can be done with unit physical deterioration, it can be laid down as a general principle that
the depreciation allowance at the maximum should
not exceed the cost of making the necessary
changes. The same principle may be occasionally
applied in cases where errors have been made in
locating or planning the house.
An experienced savings and loan appraiser has
furnished an interesting illustration of this. He
was called upon to appraise a house that was
placed 10 feet farther back from the street line
than all the other houses in the neighborhood, and
was for that reason much less desirable. He saw
that this defect could be remedied by building a
sun porch on the front of the house, and that the
value of the house would thereby be increased by
much more than the cost of the improvement.
Accordingly the house was appraised on this basis.
Similarly, functional depreciation, especially of
equipment and finishing, may be remedied and the
cost of so doing may be taken as the measure of
the depreciation. Antiquated lighting and plumbing fixtures may be replaced and even the exterior
modernized in some cases at a cost considerably
less than the consequent increase in the value of
the property.
If, however, the house is in an advanced stage
of physical deterioration or if the neighborhood is
definitely declining or is in a stage of transition to
commercial or some other use, expenditures for
reconditioning beyond those necessary to keep
the house in use may not be advisable. Depreciation in such cases must be estimated upon some
basis other than the cost of remedying it. Even
where certain items of depreciation may profitably
300




be remedied, general depreciation frequently
exists which cannot be estimated upon a cost of
repair or replacement basis.
Because of the common American experience
that residential structures have an existence of
only a few decades, general depreciation is usually
estimated upon the basis of the age of the building and its probable future remaining life. To
furnish a guide in making such estimates, a number
of studies have been made of the average length of
life of various classes of residential buildings. One
such study, made by a special committee of the
National Association of Real Estate Boards in
1928 and 1929, resulted in the following estimates:
For 1-family dwellings—50 years for masonry construction; 33'/3 years for frame construction.
For 2-, 3-, or 4-family dwellings—42 years for fireproof
steel or reinforced concrete; 38 years for masonry
with slow-burning frame construction; 30 years for
frame.
For row houses—45 years for fireproof steel or reinforced concrete; 40 years for masonry with slowburning frame; 35 years for masonry with frame
interior; 30 years for frame.

While such estimates are useful as guides, it
should be emphasized that they are only guides
and do not relieve the appraiser of the work of
estimating for himself the probable effective age
of the building which he is appraising. He should
take into consideration the quality of the original
construction, the state of repair and maintenance,
and the degree of obsolescence.
ECONOMIC L I F E

hardly be pointed out that it is the
effective age or remaining economic life of the
dwelling, and not the possible physical life, with
which the appraiser is concerned. The physical
condition of a house may be such that it could
reasonably be expected to continue in use for 13
years longer, but the appraiser may be confident
that within 5 years it will be demolished to make
place for a commercial structure.
A number of different arithmetic methods for
the determination of depreciation, based upon the
life expectancy of the building, are in common use.
The simplest of these, but also the one most open
to criticism, is the straight-line method. This
method assumes that the value of the property declines by the same percentage each year of its
I T NEED

(Continued on p. 307)

Federal Home Loan Bank Review

Administrative Rulings, Board Resolutions,
and Counsel's Opinions
DIGEST OF A-B-C

BOOK OPINION

ANY member may obtain from a Federal Home Loan Bank a copy of any administrative ruling, Board resolution, or the
complete text of any opinion of the Legal Department of the Board, the digest of which is printed in the REVIEW. "A"
indicates administrative rulings by the Governor; " B " indicates resolutions of the Board; and " C " indicates Counsel's
opinions. In requesting any such copy, its A-B-C Book reference number and date, as given in parentheses at the end
of each of the following digests, should be cited. Copies of the A-B-C Book itself are not available for distribution.
SHARE ACCOUNTS—Rights preserved to owners of.

Fed. Charter E, Sees. 4, 7; Fed. Charter K,
Sees. 4, 6.
Section 6 of Charter K provides that outstanding share
accounts created pursuant to a previous charter (Charter
E) shall continue to be known and treated as provided in
Charter E at the time each such share account was created,
until a holder of any such outstanding share account has
voluntarily consented to exchange such outstanding share
account for either an investment share account or a
savings share account issued under Charter K. Any such
holder has a right to request such exchange. All of the
rights of the holders and subscribers of share accounts
issued under Charter E continue in full force and effect
as they were at the time such shares were issued, except
as such rights may have been modified by the mutual
agreement of the association and the holder of any such
shares.
(A-B-C Book, C-161, April 21, 1937)

on prepayment of
FHA insured. Fed. Charter E, Sec. 12;
Fed. Charter K, Sec. 14.

MORTGAGE LOANS—Penalty

The limitations contained in Section 12 of Charter E
and Section 14 of Charter K with respect to penalty charges
in connection with prepayments on mortgage loans relate
solely to additional interest or similar charges which are
to be retained by the mortgagee. Federal associations
operating under either charter may comply with the requirement of the Federal Housing Administration that
mortgage loans which are to be insured by it must provide
for a charge equivalent to 1 percent of the original principal
amount of a mortgage loan for the privilege of prepaying
such loan in full. Such charge is an insurance premium,
and not a penalty imposed by a lender upon a borrower
for the privilege of prepaying a loan.
(A-B-C Book, C-149-2, April 1, 1937)

June 1937




on, to directors,
officers, and employees. Fed. Charter E,
Sec. 11; Fed. Charter K, Sec. 13; Fed.
Reg. 39 (c).

MORTGAGE LOANS—Limitation

The Federal charter prohibits an association from lending to an officer, director, or employee on home property
unless the home property is owned and occupied by the
officer, director, or employee. If an attorney is a director
or an officer, the limitation applies. An attorney or other
person is not an employee merely because he renders legal
or other services to an association. If paid solely on a fee
basis, he is not an employee. If paid on a retainer basis
(not in fact in lieu of salary), he is not an employee. If
paid on a salary or a salary retainer basis, he is an employee.
If an attorney or other person renders legal or other services during regular fixed hours, and remuneration is measured directly by the number of working hours on a weekly
or monthly routine basis, remuneration is in fact a salary
and the recipient is an employee. If an attorney or other
person renders legal or other services on his own time free
from control of his working hours by the association, and
remuneration is not measured directly by the number of
working hours but rather by quantity or quality of services
rendered, remuneration is in fact not a salary but is a fee
or retainer. Persons serving an association solely on a
commission basis are not employees.
(A-B-C Book, C-155, April 22, 1937)

Resolutions of the Board
adopted during the past month,
the Federal Home Loan Bank Board amended the
Rules and Regulations for Federal Savings and
Loan Associations and for Insurance of Accounts.
On May 12, the Board amended subsection (a) of
B Y RESOLUTIONS

(Continued on p. 307)

301

Residential Construction and HomeFinancing Activity
in April 1936; foreclosures in large urban counties,
although 3 percent higher than in March, were
still 21 percent lower than a year before; and the
steady rise of manufacturing pay rolls, by 4 percent in a month and 36 percent in a year, indicated that fluctuations in family incomes were all
in favor of residential construction.
The fact remained, however, that figures for all
cities of 10,000 or more population, adjusted for
seasonal variations, showed that home building in
April, although still well above corresponding
figures for the previous year, had declined by
11 percent as compared with March. In actual
number of family units provided, as measured

W

ITH the general trends in family incomes,
rental levels, and foreclosures favoring the
building of homes, residential construction in April
again showed a marked rise as compared with the
same month during the previous year. An important factor unfavorable to home building, however,
was the steady increase in the cost of home building
and building materials. The Federal Home Loan
Bank Board index showed a marked rise in the total
cost of building a typical home, and the Bureau of
Labor Statisticsfiguresindicated a considerable increase in the wholesale cost of building materials.
The level of rentals in April was 1 percent
higher than in March, or 12 percent higher than

RESIDENTIAL BUILDING ACTIVITY
AND SELECTED INFLUENCING FACTORS; 1926 TO DATE
1926 •100
1000
900
800
700

900
800
700
600
500
400

°
Ai

400

'V

300

vJ'ro REC LOS URES'

s\

V \- • v V

200

100 -s^*
90
80
70

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err

HOC SIN 9 REN7 ALi

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4 0

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30

g

7~—

WIL DIN 9 A ATE RIA

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i

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MA WE ACT IRII IC f ATA OL, S*

\

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J J

20

^ **
1y

}RL SID EM J74*. CO 1ST WC TIO f'
10
9
8

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if

7
6
5

| \j

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rr

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I

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0

M

J
S
1926

D

M

J 5
1927

O

M

J S
1928

D

M

J S
1929

D

M

J S
1930

O

M

J S
1931

D

M

J S
1932

D

M

J

S
1933

0

M

J S
1934

0

Dl\>ISIO N C F fi ESE AR 7H AND ST ATli TIC 9
1
1
1
M J S 0 M J S 0 M J S 0
1935
1936
1937

SOURCE:- | Federal Home Loan Bank Board (County Reports)
2 U. S. Dept. of Labor (Converted to 1926 Bate)
3 Federal Home Loon Bank Board (U.S. Dept. of Labor Records)

302




Federal Home Loan Bank Review

by the number of building permits issued,
April had declined, by comparison with March,
from 19,962 to 19,920. The rate of residential
building, as measured by the number of dwelling
units provided per 100,000 population, declined
during the month in 6 of the 12 Federal Home
Loan Bank Districts.
Apartment houses, according to figures for April,
are showing a more rapid rate of construction as
compared with 1936 than other types of dwellings.
Whereas 45.2 percent more dwelling units were
being provided in 1-family dwellings in April 1937
than in April 1936, the corresponding percentage
of increase for apartment units was 142.5, Table 1
shows.
RENTAL INDEX

T H E fact that rentals have been maintaining a
steady level or actually increasing since early in
1934, as shown in the chart on page 302, does much
to explain the rise in home building since that time.
These two upward trends significantly came somewhat later than the rise in manufacturing pay rolls,
showing that residential construction improved as
soon as general confidence in continued or increasing income was assured. A comparison of two
widely used indexes of rental levels of wage earners
and low-income families, in the chart on this page,
adds particular meaning to these tendencies.
The rental figures compiled by the National Industrial Conference Board tend to indicate the
market rental for dwelling units. Those prepared
by the Department of Labor tend to indicate the
FLUCTUATIONS

—

IN RESIDENTIAL

K
(S \

= r

J

RENTALS

/

rental on all dwelling units, whether on the market
or occupied continuously by the same tenants.
The tendency to leave rents unchanged as long as
the same tenants remain makes the latter figures
somewhat less sensitive to changes in the general
economic situation. The relationship between
these two sets of figures has an interesting relationship with the rate of residential construction.
From 1926 through 1933, renting families could
often get lower rents by moving to other dwellings.
While they remained in the same homes, the rents
tended to remain the same, although the market
level of rentals was dropping. Under these conditions, there was little inducement to build homes
for occupancy or for rent. Since 1934, however,
the renting family seeking a change in location
frequently meets with a demand for higher rent,
and is naturally more likely to consider buying a
home. The chart shows how the market level of
rentals has been rising farther and farther above
the general rental levels of all tenants since early
in 1934, when home building began its steady
climb upward.
FORECLOSURES

T H E index of foreclosures in metropolitan communities increased from 230 in March to 238 in
April. This rise of 3 percent may be compared
with the normal seasonal decline of nearly 1 percent during that month. As far as the long-term
trend is concerned, however, foreclosures are still
decreasing, as the index for April was 21 percent
below the index for April 1936, which stood at 302.
The slight increase over the past month was by
no means uniform among the 78 communities
reporting for April. Of this number, 35 reported
increases in the number of foreclosures, 39 reported
decreases, and 4 reported no change.
[1926=100]

N

PerApr. Mar. Percent Apr.
cent
1936 change
1937 1937 change

i

1

i The NICB index is based on the average rents of houses and apartments of 4 or 5 rooms, with bath, unheated (except in a few instances
where heated apartments are the prevailing type) of the kind occupied
by wage earners. The basic data are obtained from renting agencies
on rentals paid for newly rented properties, and hence the rent index
reflects
the trend of "market" rents.
8
The Department of Labor index is compiled from quotations on
rentals received for identical occupied dwellings.

June 1937




Residential construction1 32
Foreclosures
238
84
Rentals
97
Building materials
Manufacturing pay rolls. 101

36
230
83
96
97

-11

19

+ 3 302
+ 1 75
+ 1 86
+4 74

+68
-21
+ 12
+ 13
+ 36

* Adjusted for seasonal variation.

303

A factor unfavorable to the continued increase
in residential construction is the rise in the wholesale price of building materials. The prices of
lumber and of structural steel are higher than in
1926, it is shown in Table 8. All materials listed
except cement show increases in price over the
year prior to April 1937, with the rise in the general level of all building materials amounting to
12.8 percent. Cement prices went up earlier and
now stand at about the 1929 level.

Indexes of Small-House Building
Costs
the rise in the cost of both materials
and labor, the index of small-house building costs
rose in all of the 23 cities on which reports have
been received for both February and May 1937.
(Table 3.) The reports for the previous cycle
(January-April) showed cost of materials as by far
the major factor in a general increase. The increases in the February-May cycle, while still due
in a greater degree to the cost of materials, show
the effect of a rise in the cost of labor. The rise in
cost of materials is substantiated by Table 8,
which reports wholesale prices of building materials as compiled by the Department of Labor.
The largest increase in the Bank Board's index
was reported for Phoenix, which rose 15 percent
REFLECTING

from $5,885 to $6,742. Pittsburgh, Harrisburg,
and Shreveport followed with increases of 9 percent. San Diego was the only city to report an
increase of less than 1 percent.
Comparing data from various cities, we find
that the highest costs were reported by Cleveland
and Phoenix, each with a cost of 28.1 cents a cubic
foot, and by Pittsburgh, with a cost of 28.0 cents.

Monthly Lending Activity of Savings and Loan Associations
ESTIMATES of the lending activity of all savings
and loan associations in the United States, in
addition to the usual statistics on the monthly
lending activity of savings and loan associations
reporting to the Federal Home Loan Bank Board,
are presented by the FEDERAL HOME LOAN BANK
REVIEW for the first time in this issue.

All associations, during the first quarter of 1937,
increased their lending activity by more than a
third by comparison with the same period in 1936.
Federal associations, which were more numerous
during the latter quarter year, lead with an increase in their aggregate volume of new loans by
more than two-thirds.
The increase in the volume of lending was
accounted for principally by the increase in loans
for construction or home purchase. Construction

N U M B E R A N D COST OF F A M I L Y D W E L L I N G UNITS FOR W H I C H P E R M I T S W E R E G R A N T E D , BY
MONTHS, I N C I T I E S OF 10,000 OR MORE POPULATION; 1937 COMPARED W I T H SELECTED PERIODS
[Source: Federal Home Loan Bank Board. Compiled from residential building permits reported to U. S. Department of Labor]

NUMBER

30

OF UNITS PROVIDED

30

COST

100,000

OF UNITS PROVIDED

100.000

28

90.000

90.000
26
24

1937

2

1936

20

50,000

1

,/

60.000

16
14
12

/

40.000

10
19

/
/

30.000

31-3 5 A VG
-r

8

—^
~" ——» """" ^

*

i

70.000

~7T ,

1

1

80,000

22

18

^
\

i 937

6

20.000

19 36
r—

"7
\ /

•*-

80,000

<£

40,000

o

30.000

tn

20.000

I

/

L

/

N

/

/

y
19

Y

•

"** >—

s
4

J/-C 5 A VG.

*»** - - -y. - ^ . . . ^
s\

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10.000
2
0
O

J

F

304




M

A

M

J

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0
0

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F

M

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J

A

S

O

N

0

Federal Home Loan Bank Review

loans in April 1936 by all savings and loan associations amounted to approximately $11,251,000,
and in April 1937, to $22,512,000. The corresponding increase in loans for home purchase was
from $15,296,000 to $27,849,000.
Tables 4 and 5 give information in detail about
the total lending activity for each of the first four
months of 1937, as compared with those of 1936,
for each of the various types of loans and types of
institutions. Table 6 gives statistics on the
increase in lending activity by each type of institution in each Bank District, for the first quarter of
1937 as compared with the first quarter of 1936.
METHOD OF COMPUTING ESTIMATES
T H E S E estimated figures, which will be continued

monthly, have been computed on the basis of
the reports of lending activity submitted to the
Federal Home Loan Bank Board each month
by about 2,500 associations. These reports
were received, in March 1937, from institutions
with assets amounting to about 94 percent of the
assets of all active Federals, 71 percent of the
assets of all active State-chartered member institutions, and about 40 percent of the assets of all
active nonmember institutions. Institutions with
assets totaling about 67 percent of those of all
active associations are thus covered by the reports.
The assumption on which these estimates are
based is that in any District, active institutions
of a certain type (i. e., Federal, State-member,
or nonmember) which fail to report have been
making new loans at the same rate in relation to
the volume of their assets as have reporting associations of the same type. For example, if the
assets of all nonmember associations in a certain
District amounted to $300,000,000, and nonmember associations with assets of $100,000,000
sent in reports, it is assumed that they made onethird of the total volume of loans by nonmember
associations. Estimates are made separately
for each of the five types of loans.
ASSETS ESTIMATED

THIS method depends, of course, on a computation of the assets of all active associations of each
type. Since the assets change substantially from
month to month, a certain amount of estimation
is required to obtain this information. Complete
records of assets of all associations, however, are
available annually. The same assumption is
made in estimating total monthly changes in
June 1937




assets that is used in estimating lending activity:
that figures for non-reporting institutions of a
certain type in a certain District will fluctuate at
the same rate as those for reporting institutions.
Let us suppose, for example, that identical reporting State-member associations in a certain District
have assets at the end of 1936 amounting to
$50,000,000, while all State-member associations
there have assets totaling $100,000,000. If the
reporting associations increase their assets 2 percent during January 1937, it is assumed that all
associations in the group have assets amounting to
$102,000,000 at the end of that month.
These figures are checked and revised in
accordance with information received by the
Federal Home Loan Bank Board regarding the
formation of new Federal associations, the conversion of State-member institutions, and changes
in the membership of the Bank System.
The assets of active savings and loan associations have been estimated for quarterly periods
from the end of 1935 through the first part of
1937. The following figures show the fluctuations
in assets of active institutions of the various types
between the last quarter of 1935 and the first of
1937. The figures are given in millions of dollars,
and reflect changes in the number of the various
institutions as well as in their activity.
Federals
State members
Nonmembers
Total

December
1935
$492
1, 934
1,470

March
1937
$891
2, 043
1,145

3, 896

4, 079

It was necessary, in compiling these estimates,
to determine what proportion of total assets were
inactive, since only active associations were
included. For this purpose estimates were obtained from the Presidents of the Federal Home
Loan Banks, and the District Examiners. It was
foujid that State-chartered member associations
with assets of $525,000,000, or 21 percent of the
total assets of all such institutions, are inactive.
Nonmember associations with assets of $1,422,000,000, or 54 percent of all such associations'
total assets, are inactive. No Federal associations
are known to be inactive.
The data on the lending activity of savings and
loan associations compiled directly from the
reports submitted are presented in Table 7.
305

Federal Savings and Loan
Insurance Corporation
BETWEEN April 15 and May 15 the Federal Savings and Loan Insurance Corporation added 29
institutions to its list of members, Table 9 shows.
Of this number, 15 operate under State charters,
9 are Federal savings and loan associations converted from State associations, and 5 are newly
organized Federals. As of May 15, there were
1,704 insured institutions with 1,449,178 shareholders and $1,382,432,158 in assets.
As may be seen from Table 10, the 293 insured
State-chartered associations reporting, loaned 12.5
percent more during April than during March—
increasing the total mortgage loans outstanding
at the end of April 2.6 percent to $267,822,100.
By far the largest volume of this increase was
accounted for by loans made for home purchase,
which increased 32 percent. The only type of
loans to show a decrease between March and April
was loans for refinancing.
Although private share investments during
April amounted to $4,985,600, and were 3 percent
greater than those during March, the amount of
private subscriptions decreased slightly. This was
due to the volume of repurchases, which increased
0.2 percent over March.
The need for additional funds to meet an increasing volume of mortgage lending is shown in
the borrowing from other institutions. These
associations by April 30 had borrowed $14,853,600
from the Federal Home Loan Banks and $2,234,900 from other sources. They also received additional funds through H. O. L. C. subscriptions,
which increased 8.8 percent during April, and
amounted to $19,921,700 at the end of the month.

Federal Savings and Loan System
FEDERAL savings and loan associations devoted
41 percent of their mortgage lending during April
to the construction of new dwellings and the reconditioning of existing dwellings, according to
reports summarized in Table 11. This represents
an increase of approximately 17 percent over the
funds advanced for these purposes during March,
and indicates that Federal associations are supporting their share of spring construction. Of
the remainder of their loans, 30 percent went for
the purchase of homes, 21 percent for refinancing,
and 8 percent for other purposes. At the end of

306




April the 1,168 reported Federal savings and
loan associations had mortgage loans outstanding in the amount of $652,556,500. This was
equal to 75 percent of their assets.
An interesting contrast to the activity of the
reporting Federal savings and loan associations
is provided by the 293 reporting insured Statechartered savings and loan associations. The latter made a larger volume of loans for the purchase
of homes during April than for new construction
and reconditioning. Home purchase represented
39 percent of their total loans; new construction
and reconditioning represented 32 percent; refinancing, 18 percent; and other purposes, 11 percent.
Progress in number and assets of Federal savings
and loan associations
Number
Mar. 31,
1937
644
605

New
Total

1,249

Approximate assets

Apr. 30,
1937

Mar. 31, 1937 Apr. 30, 1937

646 $169,262,020
611 682,901,485
1,257

852,163,505

$192,186,619
701,445,293
893,631,912

Share investments of $12,000,000 during April
were reported by Federal associations. This was
3 percent more than was invested during March,
and the increase was accompanied by a 6.4-percent decrease in repurchases. The amount paid
in on private subscriptions increased $5,000,000,
and on H. 0 . L. C. subscriptions $10,000,000.
During the month two Federals were organized
and six were converted from State-chartered
institutions, bringing the total number to 1,257
as of April 30, 1937. Their combined assets
amounted to $893,600,000.

Federal Home Loan Bank System
T H E continued improvement in the real-estate
market and in residential building has increased
the demands of member institutions for Federal
Home Loan Bank funds. During April, advances
to members by all Banks totaled $9,640,000 and
repayments $6,214,000, resulting in an increase of
$3,427,000 in the balance of loans outstanding.
Table 12 shows the proportion of these total
advances made by each of the Banks over 4-week
periods. It is significant that the fluctuation in
the volume of advances corresponds to the change
in the rate of building in most Districts, as is
shown in Chart 4. For example, in the Los Angeles District a rate of building of 78 dwelling
Federal Home Loan Bank Review

units per 100,000 population is accompanied by a
large volume of advances. The slight drop in the
rate of building between March and April also
corresponds to a slackening off in the volume of
advances. All but three of the Districts show
some correlation between advances and rate of
building. It must be borne in mind, however,
that the size of the District and the number of
associations served is the most significant factor
in the volume of advances.
The Directors of the Cincinnati Bank, at a
meeting on Apil 16, revised the blanket 3-percent
rate charged on all advances to members. The
new rate will affect all loans made on or after
May 15, 1937. Advances for one year or less will
carry a rate of 3% percent; advances for more
than one year will be written at 3}£ percent but
collected at 3% percent until further notice. Up
to June 1 no other Banks had reported a change
in rates during May. During April, 37 mortgagelending institutions were added to the list of members, bringing the total to 3,836.

Administrative Rulings, E t c .
(Continued from p. 301)

Section 15 of the Rules and Regulations for Insurance of Accounts, regarding the bonding of officers,
by adding the following:
A true copy of such bond shall be filed with the Federal
home loan bank of the district in which such insured
institution is located, as agent of the Corporation, and
either the original of such bond or a true copy thereof shall
be kept in the principal office of such institution; and such
bond shall contain, unless contrary to applicable law, a
clause, in form approved by the Corporation, requiring the
surety to notify such Federal home loan bank and the
State supervisory authority before cancellation of the bond.

On May 12, the Roard amended Section 8 of the
Rules and Regulations for Federal Savings and
Loan Associations as follows:
Section 8. Upon receipt of a petition for charter, a
hearing will be conducted in accordance with section 29
hereof except as otherwise therein provided.

In amending Section 29, regulations regarding
such hearing are given in detail.
Subsection (d) of Section 42 of the Rules and
Regulations for Federal Savings and Loan Associations, regarding the purchase and sale of mortgages, was amended by the Roard, on May 12, to
read as follows:
(d) The purchase and sale of mortgages shall not constitute the major activity of a Federal association. No

June 1937




Federal association which holds a mortgage or other instrument securing a debt which is a first lien upon real estate
and which simultaneously holds one or more additional
mortgages or other instruments securing a debt and constituting liens inferior to the first lien upon the same real
estate, shall sell or otherwise dispose of any such mortgage
or other instrument, unless it shall simultaneously sell or
otherwise dispose of all mortgages or other instruments
constituting inferior liens upon the same real estate.

Also on May 12, the Roard amended subsection
(2) of Section 12 of the Rules and Regulations for
Federal Savings and Loan Associations, regarding
the bonding of officers, by striking the last three
sentences and substituting the following:
The original bond shall be kept in the home office of
the association, and a true copy thereof shall be filed with
the Federal home loan bank of which the association is a
member. Each such bond shall contain clauses, in form
approved by the Board, empowering the Federal home
loan bank, in the case of any defalcation covered by such
bond, to give notice to the surety of loss, file any claims in
connection therewith, and bring any action at law or in
equity to enforce such bond, all in accordance with the
terms of such bond, and requiring the surety to notify the
Federal home loan bank before cancellation of the bond.

The following amendment to Section 4 of the
Rules and Regulations for Federal Savings and
Loan Association, regarding surety bonds, was
approved by the Roard on May 13 :
Such bond shall name the Federal home loan bank of
the district in which the proposed association is to be
located as obligee, and shall be delivered to such Federal
home loan bank.

Appraisal Methods and Policies
(Continued from p. 300)

existence. Thus, if a building had an estimated
life of 50 years, depreciation would be calculated
at 2 percent per year.
An obvious point of criticism of this method is
its assumption that depreciation occurs at a uniform rate. It is a matter of common experience,
not only with houses but with many other kinds
of goods, that in terms of market value depreciation is much more rapid during the earlier years,
while the property is new.
Tables showing the rate of depreciation under
various conditions and calculated by the different
methods are available to the appraiser in most of
the appraisal manuals. All such mathematical
aids, however, should be used by the appraiser
only as a guide in arriving at his final decision.
Each particular property which is appraised offers
a problem which must be studied by itself.
307

TABLE

1.—Number and estimated cost of new family dwelling units provided
in all cities of 10,000
population or over, in the United States, in April 1937 l

[Source: Federal Home Loan Bank Board.

Compiled from residential building permits reported to U. S. Department of Labor]

Average cost of
family units

Total cost of units
(000 omitted)

Number of family
units provided
Type of structure
April
1936

April
1937
All housekeeping dwellings....
Total 1- and 2-family dwellings
1-family dwellings
2-family dwellings
Joint home and business2
3- and more-family dwellings..

19, 920
14, 067
12, 812
1,128
127
5,853

April
1937

Percent
change

April
1936

Percent
change

12, 098 + 64.7 $79, 791. 2 $48, 580. 2 +64.2
9,684 + 4 5 . 3 60, 992. 8 41, 785. 8 +46.0
8,822 +45.2 57,137. 6 39, 341. 6 +45.2
2,185. 6 + 55.2
790 + 4 2 . 8
3, 391. 5
258.6 + 79.3
72 +76.4
463.7
2,414 + 142.5 18, 798. 4
6, 794. 4 + 176.7

April
1937
$4, 006
4,336
4,460
3,007
3,651
3,212

April
1936
$4, 016
4,315
4,459
2,767
3,592
2,815

1
Estimate is based on reports from communities having approximately 95 percent of the population of all cities with
population
of 10,000 or over.
2
Includes 1- and 2-family dwellings with business property attached.

TABLE

2.—Number and estimated cost of new family dwelling units provided in all cities of 10,000 population
or over, in April 1937, by Federal Home Loan Bank Districts and by States
[Source: Federal Home Loan Bank Board.

Compiled from residential building permits reported to U. S. Department of Labor]

All residential dwellings
Federal Home Loan Bank Districts
and States

Number of family Estimated cost (thou- Number of family Estimated cost (thoudwelling units
sands of dollars)
dwelling units
sands of dollars)
April
1937

U N I T E D STATES

All 1- and 2-family dwellings

19, 920

April
1936

April 1937 April 1936

12, 098 $79, 791. 2 $48, 580. 2

April
1937
14, 067

April
1936

April 1937 April 1936

9,684 $60, 992. 8 $41, 785. 8

894

674

4, 763. 2

3, 374. 0

829

579

4, 562. 4

3,153. 8

215
62
466
21
124
6

121
33
369
20
126
5

1,123. 8
210.8
2, 723. 0
53.9
621.9
29.8

598.6
100.9
2, 128. 2
59.6
453.7
33.0

199
56
429
21
118
6

121
26
315
20
92
5

1, 091. 9
198.8
2, 579.1
53.9
608.9
29.8

598.6
97.3
1, 981. 6
59.6
383.7
33.0

5,387

2,698

21, 061. 4

10, 821.1

1,594

1,268

7, 794. 9

6, 303. 9

502
4,885

312
2,386

2, 560. 2
18, 501. 2

2, 021. 7
8, 799. 4

288
1,306

312
956

1, 846. 2
5, 948. 7

2, 021. 7
4, 282. 2

No. 3—Pittsburgh

925

769

4, 820. 9

4, 245. 8

898

747

4, 746. 0

4, 213. 7

Delaware
Pennsylvania
West Virginia

8
761
156

14
680
75

37.0
4,168. 8
615.1

89.9
3, 865. 4
290.5

8
757
133

14
668
65

37.0
4, 157. 3
551.7

89.9
3, 850. 4
273.4

2,247

1,607

7, 469. 8

5, 500.1

1,712

1,219

6,125.1

4, 554. 4

145
557
464
237
227
296
127
194

57
531
357
108
122
179
85
168

263.2
2, 365. 4
1, 560. 2
578.5
910.7
772.5
353.1
666.2

91.8
2,189. 6
1, 037. 6
284.5
478.2
577.9
234.1
606.4

125
223
440
191
224
240
119
150

57
234
309
108
122
167
72
150

215.0
1, 429. 2
1, 494. 9
534.5
906.7
653.7
326.1
565.0

91.8
1, 464. 8
952 3
284.5
478 2
557.9
180.1
544.8

No. 1—Boston
Connecticut
Maine
Massachusetts
New Hampshire
Rhode Island
Vermont
No. 2—New York
New Jersey
New York

No. 4—Winston-Salem
Alabama
District of Columbia
Florida
Georgia
Maryland
North Carolina
South Carolina
Virginia

308




Federal HomeLoan Bank Review

TABLE

2.—Number and estimated cost of new family dwelling units provided in all cities of 10,000 population
or over, in April 1937, by Federal Home Loan Bank Districts and by States—Continued
All residential dwellin gs

Federal Home Loan Bank Districts
and States

All 1- and 2-family dwellings

Number of family Estimated cost (thou- Number of family Estimated cost (thoudwelling units
dwelling units
sands of dollars)
sands of dollars)
April
1937

April
1936

April 1937 April 1936

April
1937

April
1936

April 1937 April 1936

1,426

517

6, 040. 2

2, 789. 7

904

484

4, 201. 8

2, 689. 9

149
732
545

80
356
81

392.2
3, 843. 6
1, 804.4

273.7
2, 292. 3
223.7

137
620
147

80
326
78

372.2
3, 406. 3
423.3

273.7
2, 193. 8
222.4

1,127

707

5, 736. 2

3, 650. 4

1,124

701

5, 734. 2

3, 635. 4

260
867

95
612

1,121. 8
4, 614. 4

378.0
3, 272.4

260
864

95
606

1,121. 8
4, 612. 4

378.0
3, 257.4

974

524

5, 433. 9

2, 828. 4

913

519

5, 289. 0

2, 810. 4

Illinois
Wisconsin

522
452

273
251

3, 415. 7
2, 018. 2

1, 720. 9
1,107. 5

499
414

273
246

3, 355.1
1, 933. 9

1, 720. 9
1, 089. 5

No. 8—Des Moines

786

653

3, 083. 7

2, 250. 4

753

609~

3, 009.1

2,160.4

Iowa
Minnesota
Missouri
North Dakota
South Dakota

214
228
283
27
34

134
192
275
9
43

891.6
969.9
1, 055. 3
90.0
76.9

428.8
717.9
994.6
24.2
84.9

204
213
279
23
34

129
170
258
9
43

853.0
951.9
1, 045. 3
82.0
76.9

422.9
681.9
946.5
24.2
84.9

No. 9—Little Rock

1,343

917

3, 914. 3

2, 640. 4

1,234

901

3, 688. 8

2, 606.4

37
149
110
50
997

33
97
70
38
679

113.9
539.3
215.8
127.0
2, 918. 3

66.5
298.5
181.2
100.6
1, 993. 6

30
125
102
50
927

33
97
70
38
663

99.5
483.9
206.3
127.0
2, 772, 1

66.5
298.5
181.2
100.6
1, 959. 6

757

498

2, 701. 9

1, 689. 0

667

490

2, 489. 2

1, 670.3

233
171
104
249

108
104
72
214

907.2
558.1
350.2
886.4

426.8
333.8
268.2
660.2

174
150
100
243

104
104
72
210

770.2
501.4
344.2
873.4

410.8
333.8
268.2
657.5

724

401

2, 441. 7

1,186. 6

654

339

2, 322. 9

1, 087. 9

37
98
217
71
277
24

31
65
66
40
179
20

108.6
231.3
835.8
334.6
846.5
84.9

79.5
172.9
254.2
124.8
487.9
67.3

27
78
201
71
262
15

20
53
66
34
154
12

88.6
206.3
809.8
334.6
812.7
70.9

61.3
161.9
254.2
106.8
457.9
45.8

3,330

2,133

12, 324. 0

7, 604. 3

2,785

1,828

11, 029.4

6, 899. 3

48
3,266
16

26
2,097
10

172.0
12, 027. 3
124.7

95.0
7, 464. 3
45.0

44
2,725
16

26
1,792
10

158.0
10, 746. 7
124.7

95.0
6, 759. 3
45.0

No. 5—Cincinnati
Kentucky
Ohio
Tennessee
No. 6—Indianapolis
Indiana
Michigan
No. 7—Chicago

Arkansas
Louisiana
Mississippi
New Mexico
Texas
No. io—Topeka
Colorado
Kansas
Nebraska
Oklahoma
No. 11—Portland
Idaho
Montana
Oregon
Utah
Washington
Wyoming
No. 12—Los Angeles
Arizona
California
Nevada

June 1937




309

RATE OF R E S I D E N T I A L

B U I L D I N G I N T H E U N I T E D STATES A N D
LOAN BANK D I S T R I C T , BY M O N T H S

IN

EACH F E D E R A L

HOME

Represents the estimated number of family dwelling units provided per 100,000 population; based upon building permit records for all cities of
10,000 or more population.
[Source: Federal Home Loan Bank Board. Compiled from reports to U. S. Department of Labor]
DISTRICT 4-WINSTON SALEM

DISTRICT 3-PITTSBURGH

DISTRICT 2-NEW YORK

DISTRICT I-BOSTON

a

fl936

bȣ
fl936

h"

6^~
1931-35

if I I i 1 = 1

AVG

1

-r r i "- v -..,-..,
K

TfJTITiJJJJI
DISTRICT 6-INDIANAPOHS

QISTRICT 5-CINCINNATI

1931-35 AVG

'<---

J

O

~L.
d

Q. (-

>

DISTRICT 8-OES MOINES

DISTRICT 7-CHICAGO

QISTRICT 12-LOS ANGELES
'*~-/93'-35

I B M I 343fiSi8

I 5 1 I 1 ? i 3 D! 8

80

h

**£

70

DISTRICT 11-PORTLAND

DISTRICT 10-TOPEKA

DISTRICT 9-LITTLE ROCK

AVG"1

60

c1936
r—i

50

L

«

40 z

,

J=Q-

30
•—•

1 j—•
[

^

"^

'931-35

n

310




1931

1934

5
2

3
UJ
=»
to
1935

u
o

i

% i
1936

ij

SEP

i i i i

DEC

DEC

SEP

MAR

3 JUN.

i §* a
i i t § i i % si 1932

5 JUN

-T ^

^-1

1930

r—

J V Jf

r'Vn,jV

L
c

0

STATES

MAR

aoljJ

10

i m i * 33BS&8

UNITED

30

20

1_„

^1931-35 AVG

AVG ""!__

ITITTTiTTTTI

I § 1 i 1 I i i Si g £8

y*—r

Federal Home Loan Bank Review

TABLE

3.—Indexes of building costs of the same standard house in representative cities in specific months 1
NOTE.—These figures are subject to correction.
[Source: Federal Home Loan Bank Board]

Cubic-foot cost
Federal Home Loan Bank Districts,
States, and cities

No. 3—Pittsburgh:
Delaware:
Wilmington
Pennsylvania:
Harrisburg
Philadelphia
Pittsburgh
West Virginia:
Charleston
No. 5—Cincinnati:
Kentucky:
Lexington
Louisville
Ohio:
Cincinnati
Cleveland
Columbus
Tennessee:
Memphis
Nashville
No. 9—Little Rock:
Arkansas:
Little Rock
Louisiana:
New Orleans
Shreveport
Mississippi:
Jackson
New Mexico:
Albuquerque
Texas:
Dallas
Houston
San Antonio
No. 12—Los Angeles:
Arizona:
Phoenix
California:
Los Angeles
San Diego
San Francisco
Nevada:
Reno

Total building cost

May
1937

May
1936

May
1937

$0,239

$0,220

$5, 737

.258
.248
.280

.227
.203
.225

.248

February 1936

Febru- Novem- August
ary 1937 ber 1936
1936

May
1936

$5,406

$5, 258

$5, 259

$5, 290

$5, 213

6,186
5,944
6,730

5, 668
5,483
6,179

5,408
5,010
5,920

5,405
4,929
5,433

5,439
4,870
5,405

5, 371
4,584
5,474

.228

5,957

5,696

5,696

5,564

5,477

5,476

.245
.255

.213
.222

5,887
6,111

5,223
5,456

5,237
5,338

5,120
5,326

4,993
5,384

.263
.281
.265

.243
.256
.230

6,321
6,756
6,352

5,849
6,320
6,052

5,748
6,213
5,778

5,932
6,165
5,850

5,827
6,147
5,529

5,809
6,028
5,522

.238
.226

.213
.212

5,704
5,421

5,462
5,267

5,092
5,094

5,080
5,096

5,120
5,089

4,841
5,030

.220

.217

5,285

5,195

5,136

5,202

5,215

5,215

.246
.248

.211

5,911
5,961

5,601
5,468

5,395

5,124

5,075

5,075

.244

.222

5,849

5,607

5,412

5,365

5,333

5,319

.265

.234

6,358

5,948

5,827

5,779

5,625

5,625

.256
.266
.262

.234
.247
.231

6,143
6,391
6,284

5,968
5, 935
5, 884

5,641
5,809
5,538

5,641
5,809
5,532

5,618
5,933
5,532

5, 464

.281

.255

6,742

5, 885

5,843

6,032

6,112

6,044

5,239
5,381
6,017

5,316
5,385

6,324

6,097

!

|

.251
.256
.267

.218
.224
.251

6,015
6,141
6,407

5, 800
6, 137
6, 319

5,489
5,581
6,222

5,301
5, 361
6,151

.277

.263

6,641

6, 360

6,354

6, 313

1
The house on which costs are reported is a detached 6-room home of 24,000 cubic feet volume. Living room, dining room, kitchen, and
lavatory on first floor; 3 bedrooms and bath on second floor. Exterior is wide-board siding with brick and stucco as features of design. Best quality
materials and workmanship are used throughout.
The house is not completed ready for occupancy. I t includes all fundamental structural elements, an attached 1-car garage, an unfinished cellar,
an unfinished attic, a fireplace, essential heating, plumbing, and electric wiring equipment, and complete insulation. It does not include wall-paper
nor other wall nor ceiling finish on interior plastered surfaces, lighting fixtures, refrigerators, water heaters, ranges, screens, weather stripping, nor
window shades.
Reported costs include, in addition to material and labor costs, compensation insurance, an allowance for contractor's overhead and transportation of materials, plus 10 percent for builder's profit.
Reported costs do not include the cost of land nor of surveying the land, the cost of planting the lot, nor of providing walks and driveways;
they do not include architect's fee, cost of building permit, financing charges, nor sales costs.
In figuring costs, current prices on the same building materials list are obtained every 3 months from the same dealers, and current wage rates
are obtained from the same reputable contractors and operative builders.

June 1937




311

TABLE

4.—Estimated volume of new loans by all savings and loan associations, classified according to
purpose
[Thousands of dollars]
Mortgage loans on homes
Month

1936
January
February
March
April
1937
January
February
March
April
TABLE

Construction

Home
purchase

Refinancing

$155, 463
7,089
7,027
9,725
11, 251

$188,637
9,298
9, 680
11, 920
15,296

$152,
10,
10,
12,
15,

12,170
13, 275
17, 938
22, 512

14, 859
16, 648
22,323
27,849

Loans for
all other
purposes

Reconditioning

067
265
845
842
728

$50, 618
2,691
3,229
3,677
4,703

10, 641
11, 611
15, 768
16, 398

2,585
2,727
3,959
5,070

Total
loans, all
purposes

$627, 623
35, 338
36, 467
46, 638
53, 391

$80, 838
5,995
5,686
8,474
6,413

45,
49,
66,
79,

5,018
5,601
6,582
7,548

273
862
570
377

5.—Estimated volume of new loans by all savings and loan associations, classified according to type
of association
Volume of loans (thousands of dollars)

Total
$627, 623
35, 338
36, 467
46, 638
53, 391

1936
January
February
March
April
1937

January
February
March
April
TABLE

45, 273
49, 862
66, 570
79, 377

Federal

State
members

Percent of total

Nonmembers

Federal

$228, 896 $275, 972 $122, 755
11, 764
16, 436
7,138
12,105
15, 206
9,156
15, 310
19, 776
11, 552
17, 740
25, 497
10,154
17, 762
19, 580
28,147
33, 301

19,
22,
28,
34,

311
068
401
644

8,200
8,214
10, 022
11, 432

State
members

Nonmembers

36.5
33.0
33.0
33.0
33.0

44.0
47. 0
42.0
42. 0
48. 0

19.5
20.0
25.0
25. 0
19.0

39.0
39.0
42.0
42.0

43. 0
44. 0
43.0
44.0

18.0
17.0
15.0
14.0

6.—New lending activity of savings and loan associations, classified by District and type of
association
New loans (thousands of dollars)
Full year
1936

United States: Total
Federal
State member
Nonmember
District 1: Total
Federal
State member
Nonmember

312




Percent increase first
quarter 1937
First quarter First quarter over first
1936
1937
quarter 1936

$627, 623
228, 896
275, 972
122, 755

$118, 443
39,179
51,418
27, 846

$161, 705
65, 489
69, 780
26,436

+ 37
+ 67
+36
—5

62, 015
8,040
31,143
22, 832

10, 512
1,271
4,876
4,365

14, 672
4,168
6,179
4,325

+40
+ 228
+ 27
—1

Federal Home Loan Bank Review

TABLE

6.—New lending activity of savings and loan associations, classified by District and type of
association—Continued
New loans (thousands of dollars)
Full year
1936

District 2: Total
Federal
State member
Nonmember

557
224
395
938

$7, 412
3,317
1,873
2,222

$10, 870
4,063
2,760
4,047

+47
+22
+47
+82

District 3: Total
Federal
State member
Nonmember
District 4: Total
Federal
State member
Nonmember

30, 218
7,734
11, 880
10, 604
92, 938
30, 264
43, 291
19, 383

5,782
1,020
2,679
2,083
19, 498
5,104
7,703
6,691

8,671
2,167
2,805
3,699
21,175
8,460
9,360
3,355

+ 50
+ 112
+5
+78
+9
+66
+22
— 50

District 5: Total
Federal
State member
Nonmember

91, 236
43, 305
41, 625
6,306

16, 763
7,054
8,561
1,148

26, 826
12,149
13, 320
1,357

+60
+ 72
+ 56
+ 18

District 6: Total
Federal
State member
Nonmember

36,346
12,459 I
18, 822
5, 065

7,147
1, 671
3,803
1, 673

8,855
3,936
4,026
893

+24
+ 136
+6
—47

District 7: Total
Federal
State member
Nonmember

55, 580
19, 646
28,760
7,174

9,363
3,152
4,805
1,406

16, 300
5,906
9,190
1,204

+74
+87
+91
— 14

District 8: Total
Federal
State member
Nonmember

42,
18,
13,
10,

424
781
046
597

7,865
3,303
2,467
2,095

8,753
4,118
2,763
1,872

+ 11
+25
+ 12
— 11

District 9: Total
Federal
State member
Nonmember

39, 908
13, 569
20, 394
5,945

8,630
2,813
4,449
1,368

9,690
3,637
4,945
1,108

+ 12
+ 29
+ 11
— 19

District 10: Total
Federal
State member
Nonmember

42, 488
14, 545
12,108
15, 835

9,018
3,078
2,694
3,246

10, 233
3,871
2,735
3,627

+ 13
+26
+ 2
+ 12

District 11: Total
Federal
State member
Nonmember

30, 598
16, 917
12, 580
1,101

5,582
2,659
2,456
467

8,911
5,096
3, 376
439

+60
+ 92
+ 37
—6

District 12: Total
Federal '.
State member
Nonmember

52,
24,
24,
2,

16,749
7,918
8,321
510

+54
+67
+ 65
—53

June 1937




$51,
19,
17,
14,

Percent increase first
quarter 1937
First quarter First quarter
over first
1936
quarter 1936
1937

315
412
928
975

10, 871
4, 737
5,052
1, 082

1
|
1
I

313

TABLE

7.—Monthly lending activity and total assets as reported by 2,738 savings and loan associations
in April 1937
[Source: Monthly reports from savings and loan associations to the Federal Home Loan Bank Board]
[Dollar amounts are shown in thousands of dollars]
Loans made in April according to purpose
Number of
associations

Federal Home Loan
Bank Districts and
States

Mortgage loans on 1- to 4-family nonfarm homes

Construction
Submit- Reporting
ting
loans
reports made

Home purchase 1

Federal
State m e m b e r . . . .
Nonmember
No 1—Boston
Maine
Massachusetts
New Hampshire. .
Rhode Island
Vermont
No. 2—New York
New Jersey
New York
No. 3—Pittsburgh
Pennsylvania
West Virginia....
No. 4—Winston-Salem

Number

Amount

1,090 3,031 10,843.5 3,717
914 1,676 5,939.7 3,266
868.7 660
331 282

9,593.1 4,366 6,657.0 1,713.3 1,330 2,549.6 12,444 31,356.5 869,959.5
8,790.7 3,351 5,181.3 1,360.4 1,711 2,270.4 10,004 23,542.5 1,449,316.7
525.7 418.0 439
600.7 2,089 3,857.3 398,608.0
1,444.2 708

149

139

1,175.3

474

1,561.7

663

1,192.8

320.8

316

409.7 1,709

4,660.3

318,245.8

31
21
80
10
3
4

26
17
80
9
3
4

60
7
152
6
26
5

239.7
10.2
803.6
13.1
101.9
6.8

34
30
287
32
75
16

147.4
60.9
964.1
69.3
253.2
66.8

75
76
393
36
67
16

182.5
140.6
720.1
39.0
93.0
17.6

19.6
16.7
252.7
11.6
16.1
4.1

29
9
176
48
42
12

198
23.5
122
8.0
237.9 1,008
122
72.4
210
32.7
35.2
49

612.7
236.4
2,978.4
205.4
496.9
130.5

25,082.5
12,299.4
238,486.3
13,530.9
25,588.3
3,258.4

322

199

332

1,337.7

378

1,259.9

400

731.9

231.6

219

232.9 1,329

3,794.0

419,981.0

181
141

83
116

36
296

156.8
1,180.9

75
303

263.9
996.0

53
347

72.1
659.8

33.1
198.5

63
156

227
68.2
164.7 1,102

594.1
3,199.9

178.873.1
241,107.9

218

150

118

414.1

336

885.3

232

326.0

78.4

73

90.5

759

1,794.3

94,049.7

7
136
89

4.4
224.4
97.2

2.6
42.7
33.1

6
38
29

4.6
51.2
34.7

23
546
190

39.7
1,454.3
300.3

4,433.8
78,332.0
11,283.9

1,607.7 1,087 2,139.3

345.4

353

600.0 2,844

7,187.4

236,364.1

256

4
191
23

4
125
21

1
90
27

1.0
362.5
50.6

9
282
45

299

266

754

2,495.0

650

27.1
773.5
84.7

16

32

41.3

24

45.2

North Carolina...
South Carolina. . .
Virginia

108
121
115
48
159
101
70

650.3
568.9
272.0
247.1
319.5
196.1
199.8

36
66
65
159
154
55
91

149.5
242.5
117.7
443.5
292.1
119.3
197.9

No 5—Cincinnati. . . .

389

352

632

2,547.0 1,951

5,463.7 1,496

59
295
35

53
268
31

55
462
115

171.6 214
2,105. 9 1,687
50
269.5

188

177

264

1,134. 2

870

No. 6—Indianapolis...

Recon- Numdition- ber Amount Number
ing

2,335 4,989 $17,651.9 7,643 $19,828.0 8,425 $12,364.0 $3,491.7 3,480 $5,420.7 24,537 $58,756.3 $2,717,884.2

10
40
47
43
49
34
27

Ohio

Refinancing

Total
assets
April 30,
1937 3

1,178
1,067
493

10
48
47
60
49
35
31

Co-

Total loans, all
purposes

2,738

19

Alabama
District of
lumbia
Florida
Georgia

Loans for all
other purposes

Amount
Num- Amount Num- Amount
ber
ber

UNITED STATES

Refinancing and2 reconditioning

803.5

664

54.0

14.3

15

14.8

112

169.6

5,666.4

320 1,190.8
218.9
96
164.2
137
115.6
72
150.0
235
70.7
73
175.1
113

48.4
57.2
48.7
25.9
100.7
19.2
31.0

66
41
29
40
98
20
44

39.6
159.0
53.1
73.4
128.1
60.2
71.8

530
324
346
319
646
249
318

2,078.6
1,246.5
655.7
905.5
990.4
465.5
675.6

96,859.6
21,910.3
13,350.6
34,453.1
32,664.0
9,950.7
21,509.4

1,729.3

696.9

635

1,297.2 4,714 11,734.1

510,573.5

237.2
564.1 247
4,800.5 1,109 1,339.5
152.6
140
99.1

128.9
531.8
36.2

131.4
614
98
513 1,127.8 3,771
38.0
24
329

1,233.2
9,905.5
595.4

47,076.5
448,459.0
15,038.0

653.9

356.6

298

360.3 2,096

3, 308. 5

210, 419. 8

477.0
176.9

299.2
57.4

235
63

247.1 1,600
113.2
496

2,125. 9
1,182. 6

125, 099. 7
85, 320. 1

41

136
52

129
48

117
147

268.7
534.8

536
128

833.9
300.3

712
158

No. 7—Chicago

286

241

298

1,125. 2

723

2, 279. 5

789

1, 342. 9

476.7

247

398.9 2,057

5, 623. 2

209, 709. 2

Illinois

203
83

171
70

157
141

583.9
541.3

589
134

1, 878. 0
401.5

640 1,111.7
231.2
149

398.4
78.3

196
51

317.7 1,582
81.2
475

4, 289. 7
1, 333. 5

145, 733. 5
63, 975. 7

182

161

208

630.8

403

944. 1

574

691.8

195.0 ~148

183.1 1,333

2, 644. 8

99, 463.1

47
47
66
15
7

40
44
59
12
6

24
82
64
25
13

83.7
289.5
178.2
57.7
21.7

88
133
159
15
8

166.0
335.1
399.0
27.5
16.5

123
208
189
38
16

137.5
237. 2
249.4
57.7
10.0

264
471
453
101
44

443.2
1, 023. 8
924.5
192.2
61.1

15, 984. 1
29, 258. 7
43, 084. 6
8, 746. 0
2, 389. 7

No. 8—Des Moines. . .
Iowa
Missouri
North Dakota
South D a k o t a . . . .

35.8
69.4
56.2
24.5
9.1

29
48
41
23
7

20.2
92.6
41.7
24.8
3.8

1
Loans for home purchase include all those involving both a change of mortgagor and a new investment by the reporting institution on a property
already
built, whether new or old.
2
Because many refinancing loans also involve reconditioning it has been found necessary to combine the number of such loans, though amounts
are shown separately.
Amounts shown under refinancing include solely new money invested by each reporting institution and exclude that part of all recast loans
involving
no additional investment by the reporting institution.
3
Assets are reported principally as of Apr. 30, 1937.

314




Federal Home Loan Bank Review

TABLE

7.—Monthly lending activity and total assets as reported by 2,738 savings and loan associations
in April 1937—Continued
[Dollar amounts are shown in thousands of dollars]
Loans made in April according to purpose
Number of
associations

Federal Home Loan
Bank Districts and
States

Mortgage loans on 1- to 4-family nonfarm homes

Submit- Reporting
ting
loans
reports made

Loans for all
other purposes

Total loans, all
purposes

Amount
Num- Amount Num- Amount
ber
ber

No. 9—little Rock. . .

Refinancing and reconditioning

Home purchase

Construction

Number

Refinancing

Recon- Numdition- ber Amount Number
ing

Total
assets
April 30,
1937

Amount

268

241

517 $1, 448. 0

565 $1, 212. 9

639

40
70
28
13
117

38
65
24
12
102

47
126
29
16
299

117.9
434.2
53.9
37.7
804.3

63
236
27
15
224

98.9
588.4
50.3
32.0
443.3

94
155
48
17
325

93.6
199.2
33.6
10.6
356.0

21.2
102.3
24.4
7.5
94.2

45
103
14
9
100

38.1
248.6
9.8
14.3
157.7

249
620
118
57
948

369.7
1, 572. 7
172.0
102.1
1, 855. 5

9, 935. 8
73, 715.1
5,128. 3
3, 340. 5
59, 579 6

$693. 0 $249. 6

271

$468. 5 1,992 $4, 072. 0 $151, 699. 3

190

171

318

1,114. 4

620

1, 319. 2

485

543.6

181.8

388

544.9 1,811

3, 703. 9

157, 576.1

Colorado
Kansas

30
71
40
49

28
61
35
47

77
76
54
111

347.2
218.2
229.5
319.5

100
162
153
205

232.8
300.9
281.9
503.6

71
131
121
162

101.2
104.0
114.4
224.0

27.5
59.7
53.5
41.1

34
99
144
111

117.1
116.7
151.0
160.1

282
468
472
589

825.8
799.5
830.3
1, 248. 3

18,142.1
44, 623. 3
44, 723. 7
50, 087. 0

No. 11—Portland

116

110

404

1,133. 0

420

908.1

555

991.2

196.2

216

382.3 1,595

3, 610. 8

85, 437. 5

9
12
28
8
49
10

9
11
25
7
48
10

40
31
94
40
189
10

84.3
81.2
257.7
146.5
541.6
21.7

29
23
85
33
235
15

47.7
43.9
222.8
76.3
477.5
39.9

32
25
98
46
335
19

28.4
23.1
352.0
104.1
462.6
21.0

16.5
8.7
42.1
4.9
114.1
9.9

20
8
22
15
147
4

23.1
12.8
97.4
38.2
202.7
8.1

121
87
299
134
906
48

200.0
169.7
972.0
370.0
1, 798. 5
100.6

5, 554 2
6, 405.1
22,158. 0
8, 913. 7
40, 716. 7
1, 689. 8

131

128

888

3, 427. 9

459

1,251.7

635 1, 328. 3

162.7

316

452.4 2,298

6, 623. 0

224, 365.1

2
126
1
2

2
123
1
2

12
870
3
3

42.5
3, 356. 4
7.3
21.7

7
447
0
5

13.2
1, 218.1
0.0
20.4

104.0
39
590 1, 204. 8
0.0
2
19.5
4

0.8
159.1
1.7
1.1

3
311
1
1

61
2.9
448.6 2,218
0.5
6
0.4
13

163.4
6, 387. 0
9.5
63.1

1, 389 1
221,192. 7
159.7
1, 623. 6

No. 10—Topeka

Idaho
Oregon
Utah

No. 12—Los Angeles..
Arizona
Nevada
Hawaii

TABLE

8.—Index of wholesale price of building materials in the United States
[1926=100]
[Source: U. S. Department of Labor]

All
building
materials
April 1936
1937
January
February
March
April
Change April 1937 from:
March 1937
April 1936

June 1937




Brick
and
tile

Cement

Lumber

Paint and Plumbing Structural
and
paint
steel
materials
heating

Other

85.7

89.0

95.5

83.2

79.3

73.8

92.0

89.1

91.3
93.3
95.9
96.7

89.7
91.0
91.8
94.9

95.5
95.5
95.5
95.5

93.0
99.0
102.1
103.0

83.7
83.4
83.9
82.9

77.1
77.4
77.6
78.7

104.7
104.7
112.9
114.9

93.9
95.0
98.9
99.9

+ 0.8%
+ 12.8%

+ 3.4%
+6. 6%

0.0%
0.0%

+ 0.9%
+ 23.8%

0.0%
+ 5.8%

+ 1.4%
+ 6.6%

+ 1.8% + 1.0%
+ 24.9% + 12.1%

315

TABLE

9.—Institutions insured by the Federal Savings and Loan Insurance Corporationx

State-chartered associations.
Converted F. S. and L. A . .
New F. S. and L. A
Total

Cumulative number at specified dates

Number
of shareholders

Assets

Share and
creditor
liabilities

Dec. 31, Dec. 31, Dec. 31, Apr. 15, May 15,
1937
1937
1936
1935
1934

May 15,
1937

May 15, 1937

May 15,1937

456
606
642

688, 515
628, 286
132, 377

$539, 385, 750
677, 513, 703
165, 532, 705

$473, 029, 077
619, 820, 070
155, 216,833

1,704 1,449,178 1, 382, 432,158

1, 248, 065, 980

4
108
339

136
406
572

382
560
634

441
597
637

451

1,114

1,576

1,675

1
Beginning Dec. 31, 1936, figures on number of associations insured include only those associations which have
remitted premiums. Earlier figures include all associations approved by the Board for insurance.
Number of shareholders, assets, and share and creditor liabilities of insured associations are as of latest obtainable
date and will be brought up to date after June 30 and December 31 each year.

TABLE

10.—Monthly operations of 293 identical insured State-chartered savings and loan associations
reporting during March and April 1937
March

Share liability at end of month:
Private share accounts (number)

April

Change
March to
April

Percent
0.0

434, 046

434, 270

$294, 413, 700
18, 310,100

$294, 248, 600
19, 921, 700

— 0.1
+8.8

312, 723, 800

314,170, 300

+ 0.5

Private share investments during month
Repurchases during month

4, 840, 500
5, 290, 400

4, 985, 600
5, 300, 200

+ 3.0
+ 0.2

Mortgage loans made during month:
a. New construction
b. Purchase of homes
c. Refinancing
d. Reconditioning
e. Other purposes

2, 516, 900
2, 730, 900
1, 737, 200
378, 000
934, 500

2, 542, 800
3, 603, 700
1, 711, 600
469, 000
1, 005, 900

+ 1.0
+ 32.0
— 1.5
+ 24.0
+ 7.7

8, 297, 500
261,103,100

9, 333, 000
267, 822,100

+ 12.5
+ 2.6

14, 360, 400
2, 111, 000

14, 853, 600
2, 234, 900

+ 3.4
+ 5.9

16, 471, 400

17, 088, 500

+ 3.7

392, 960,100

397, 219, 200

+ 1.1

Paid on private subscriptions
H. 0 . L. C. subscriptions
Total

Total
Mortgage loans outstanding end of month
Borrowed money as of end of month:
From Federal Home Loan Banks
From other sources
Total
Total assets, end of month




Federal Home Loan Bank Review

TABLE 11.—Monthly operations of 1,168 identical Federal savings and loan associations reporting during

March and April 1937
March

Share liability at end of month:
Private share accounts (number)
Paid on private subscriptions
Treasury and H. 0 . L. G. subscriptions

714, 954

Percent
-f 1.0

$518, 413, 900
167, 338, 500

$523, 694, 400
177, 536, 900

+ 1.0
+ 6.1

685, 752, 400

701, 231, 300

+ 2.3

11, 874, 400
7, 372, 800

12, 242, 500
6, 904, 900

+ 3.1
— 6.4

9, 206, 800
7, 705, 700
6, 356, 500
1, 459, 700
1, 840, 500

10, 815, 800
9, 511, 400
6, 612, 000
1, 705, 000
2, 540,100

+ 17.4
+ 23.4
+4.0
+ 16.8
+ 38.0

26, 569, 200
630, 679, 900

31,184, 300
652, 556, 500

+ 17.4
+ 3.5

58, 920, 300
1, 764, 400

60, 622,100
1, 816, 700

+ 2.9
+ 3.0

60, 684, 700

62, 438, 800

+ 2.9

840,132, 400

863, 775, 200

+ 2.8

Private share investments during month
Repurchases during month
Mortgage loans made during month:
a. New construction
b. Purchase of homes
c. Refinancing
d. Reconditioning
e. Other purposes
Total
Mortgage loans outstanding end of month
Borrowed money as of end of month:
From Federal Home Loan Banks
From other sources
Total
Total assets, end of month

Bank advances to member institutions
b-week periods

Federal Home Loan Bank

No. 1—Boston
No. 2—New York
No. 3—Pittsburgh
No.
No.
No.
No.
No.
No.
No.

5—Cincinnati
6—Indianapolis
7—Chicago
8—Des Moines
9—Little Rock
10—Topeka
11—Portland
Total

June 1937




Advances
made between Apr.
3 and Apr.
30

Loan
during

TABLE 13.—Trend of lending operations of the
Federal Home Loan Banks
[000 omitted]

Advances
made between Mar.
13 and Apr.
3

$331, 400
411, 000
626, 404
1, 214, 300
1, 404, 575
459, 500
1, 008, 212
238, 300
574, 500
338, 900
952, 925
1, 373, 646

$485, 200
520, 500
404,100
789, 860
847, 450
455, 850
683,180
562,400
379, 500
344, 500
1,120, 500
1, 526, 317

8, 933, 662

8,119, 357

Change
March to
April

708,101

Total

TABLE 12.—Comparison of Federal Home

April

Month

December 1935

Loans ad- Repay- Balance outments
standing at
vanced
monthly monthly end of month

$8, 414

$2,708

$102, 795

11, 560
13, 473

3,895
5,333

118, 587
145, 401

6,570
4,260
8,591
9,640

8,225
6,800
7,077
6,214

143, 745
141, 205
142, 719
146,146

1936
June
December
1937
January
February
March
April

317

TABLE

14.—H. 0. L. C. subscriptions to shares of savings and loan associations—Requests and
subscriptions l
Uninsured State-chartered members of Insured State-chartered associations
the F . H. L. B.
System

Federal savings and
|
loan associations

Number
Number
Number
Amount
Amount
(cumu(cumu- (cumulative)
(cumu- (cumulative)
lative)
lative)
lative)
Requests:
Dec. 31, 1935
Dec. 31, 1936
Jan. 30, 1937
Feb. 28, 1937
Mar. 31, 1937
Apr. 30, 1937
May 20, 1937
Subscriptions:
Dec. 31, 1935
Dec. 31, 1936
Jan. 30, 1937
Feb. 28, 1937
Mar. 31, 1937
Apr. 30, 1937
May 20, 1937
1

27
89
97
99
109
114
120

$1,131,
3, 845,
4, 105,
3, 762,
4, 230,
4, 515,
5, 090,

700
710
910
910
710
710
710

33
279
297
317
356
393
418

$2,
21,
21,
23,
25,
27,
29,

480, 000
016, 900
921, 900
341, 900
622, 800
568, 800
709, 300

2
45
46
50
55
57
60

100,
1, 688,
1, 738,
1, 553,
1, 828,
2, 031,
2, 156,

000
000
000
200
200
000
000

24
262
280
300
322
363
388

1, 980,
19, 455,
20, 741,
21, 746,
23,159,
25, 468,
27, 093,

000
900
900
900
400
800
800

Amount
(cumulative)

Total

Number
Amount
(cumulative) (cumulative)

553
2,617
2,746
2,874
3,061
3,281
3,407

$21,139, 000
108, 591, 900
113, 794, 300
120, 320, 300
130, 816, 500
142, 234, 000
147, 529, 000

613
2,985
3,140
3,290
3,526
3,788
3,945

$24, 750, 700
133, 454, 510
139, 822,110
147, 425, 110
160, 670, 010
174, 318, 510
182, 329, 010

474
2,538
2,663
2,771
2,928
3,132
3,277

17, 766,
104, 477,
109, 493,
115,156,
122, 545,
133, 132,
140, 253,

500
2,845
2,989
3, 121
3,305
3,552
3,625

19, 846,
125, 621,
131, 973,
138, 456,
147, 533,
160, 632,
169, 503,

500
400
700
200
700
700
200

500
300
600
300
300
500
000

Refers to number of separate investments, not to number of associations in which investments are made.

TABLE

15.—Properties acquired by voluntary deed
and foreclosure by the H. 0. L. C.
Number

Period
Prior to 1935
1935: Jan. 1 through June
July 1 through Dec.
1936: Jan. 1 through June
July 1 through Dec.
1937: January
February
March
April

30
31
30
31

Grand total to Apr. 30,1937
1

9
114
983
4,449
15, 646
3,059
3,290
4,143
3,887
35, 580

Figures prior to 1936 are as of the month in which the
action took place. Subsequent figures are as of the month
in which the action was reported in Washington.
2
Does not include 16,355 properties bought in by
H. O. L. G. at foreclosure sale but awaiting expiration of
the redemption period before title and possession can be
obtained.
In addition to the total of 35,580 completed cases, 185
properties were sold to parties other than the H. 0 . L. C.
and 4,526 cases have been withdrawn due to payment of
delinquencies by borrowers after foreclosure proceedings
have been entered.

318




16.—Reconditioning Division—Summary of
all reconditioning
operations ofH. 0. L. C. through
May 15, 1937l

TABLE

|June 1,1934,| Apr. 16,
1937,
through
through
Apr. 15,
May
15,
1937
1937
Cases received 2 . . .

771, 362

12, 505

Cumulative
through
May 15,
1937

783, 867

Contracts awarded :
Number
428, 509
8, 622
437,131
$82, 423, 682 $1, 330, 922 $83, 754, 604
Amount
Jobs completed:
Number
Amount

428, 701
419, 900
8,801
$79, 711, 427 $1, 024, 676 $80, 736,103

1
All figures are subject to correction. Figures do not
include 52,269 reconditioning jobs, amounting to approximately $6,800,000, completed by the Corporation prior
to the organization of the Reconditioning Division on
June 1, 1934.
2
Includes all property management, advance, insurance,
and loan cases referred to the Reconditioning Division
which were not withdrawn prior to preliminary inspection
or cost estimate.

Federal Home Loan Bank Review

Three Years of Share Account
Insurance
(Continued from p. 287)

ber institutions with 1,449,178 shareholders and
total assets aggregating $1,382,432,158.
Insurance of share accounts is, of course, compulsory for all Federal savings and loan associations, whether newly organized or converted from
established institutions. It is made available to
State-chartered associations as well, and all three
types of institutions have participated in its
benefits. As might have been expected, Federal
associations were in overwhelming majority among
those institutions insured during 1934 and 1935.
During 1936 and up to May 15, 1937, however,
more State-chartered than Federal associations

applied and were admitted. Nearly half of the
shareholders now protected by insurance are in
State-chartered institutions.
The success of the Federal Savings and Loan
Insurance Corporation has been due partly to
careful and economical management, partly to
to the effective way in which its policies have
been integrated with those of the other agencies
connected with the Federal Home Loan Bank
Board, and partly to the way in which it has
enabled the savings and loan association, with
its time-tested virtues of local enterprise and
mutual responsibility, to meet the challenge of
rapidly changing business and financial conditions. With its first three difficult years behind
it, it now stands ready to make its services available to an increasing number of the thrift and
home-financing institutions of America.

Directory of Member, Federal, and Insured Institutions
Added during April-May
I.—INSTITUTIONS ADMITTED TO MEMBERSHIP
IN THE FEDERAL HOME LOAN BANK SYSTEM
BETWEEN APRIL 19, 1937, AND MAY 15, 1937 *
(Listed b y Federal H o m e Loan Bank Districts, States, and cities)
DISTRICT NO. 1
MASSACHUSETTS :

Brookline:
Brookline Co-operative Bank, 5 Harvard Street.
Leominster:
Mutual Co-operative Bank.
Westfield:
Westfield Co-operative Bank, Park Square.
Woburn:
Woburn Co-operative Bank.

OHIO:

Cincinnati:
Central Fairmont Building & Loan Company, 1939 Harrison
Avenue.
Cleveland:
D o a n Savings & Loan Company, 407 Park Building.
Delaware:
People's Building & Loan Association, 41 N o r t h Sandusky
Street.
D I S T R I C T NO. 6
INDIANA:

Hammond:
First Polish Building, Loan & Savings Association of H a m m o n d , 4525 H o h m a n Avenue.
Hartford C i t y :
Rural Loan & Savings Association.
Martinsville:
H o m e Building Association, E a s t Morgan Street.
MICHIGAN:

Dearborn:
Dearborn Savings & Loan Association, 924 Mason Street.

DISTRICT NO. 2
N E W JERSEY:

Ramsey:
Trust Building & Loan Association, 70 E a s t M a i n Street.
DISTRICT NO. 3
PENNSYLVANIA :

Philadelphia:
E a s t Indiana A v e n u e Building & Loan Association, 1730
Land Title Building.
Milestown Building & Loan Association, 509 Independence
Avenue.
Pittsburgh:
Iron & Glass Building & Loan Association of Pittsburgh, Pa.,
2116 Carson Street.

DISTRICT NO. 7
ILLINOIS: ,

Chicago:
Lstibor Building & Loan Association, 3856 West
sixth Street.

Sheboygan:
Sheboygan Mutual Savings, Loan & Building Association, 4 2 0
N o r t h Eighth Street.
DISTRICT NO. 8
SOUTH

DAKOTA:

Lemmon:
L e m m o n Building & Loan Association.

DISTRICT NO. 4
MARYLAND:

Baltimore:
William Street Permanent Loan & Savings Association #2 of
Baltimore City.
W y m a n Park Building Association of Baltimore, Corner
Guilford Avenue & Twenty-eighth Street.
DISTRICT NO. 5
KENTUCKY:

Ashland:
Ashland Loan & Building Association, 323 Fifteenth Street.
H o m e & Savings Building Association, 3 3 2 - 3 3 4 Fifteenth
Street.
1
During this period 4 Federal savings and loan associations were
admitted t o membership in t h e System.

June 1937




Twenty-

WISCONSIN:

DISTRICT NO. 9
ARKANSAS:

Little Rock:
National E q u i t y Life Insurance Company.
TEXAS:

San Angelo:
Security Building & Loan Association, 40 W e s t Beauregard
Street.
Waco:
Amicable l i f e Insurance Company.
D I S T R I C T N O . 12
CALIFORNIA.:

Porter ville:
Porterville Mutual Building & Loan Association, 418 N o r t h
M a i n Street.

319

WITHDRAWALS FROM THE FEDERAL HOME LOAN BANK
SYSTEM BETWEEN APRIL 19, 1937, AND MAY 15, 1937
CALIFORNIA:

Whittier:
Quaker City Building & Loan Association, 109 E a s t Philadelphia Street (transfer of stock t o Mutual Building & Loan
Association of Whittier).
FLORIDA:

JacksonvilleJacksonville Loan & Insurance Company, 307 S t . James
Building (transfer of stock to Jacksonville Federal Savings
& Loan Association).
INDIANA:

Michigan C i t y :
Merchants Building & Loan Association.
OHIO:

Maple Heights:
Maple Savings & Loan Company, 1 5 7 5 r B r o a d w a y Street.
VERMONT:

St. Johnsbury:
St. Johnsbury Co-operative Savings, Building & Loan Association.

II.—FEDERAL SAVINGS AND LOAN ASSOCIATIONS CHARTERED BETWEEN APRIL 19, 1937,
AND MAY 15, 1937
DISTRICT NO. 1
MASSACHUSETTS :

Boston:
Suffolk Co-operative Federal Savings & L o a n Association of
B o s t o n , 44 Bromfield Street (converted from Suffolk C o operative B a n k ) .

PENNSYLVANIA:

DISTRICT NO. 3

Hanover:
First Federal S a v i n g s & L o a n Association of Hanover, 1 1 6
B r o a d w a y (converted from H o m e Building & Loan Association).
Pittsburgh:
F o r t P i t t Federal Savings & L o a n Association, 707 E a s t Ohio
Street (converted from Fort P i t t Building & Loan Association of Pittsburgh, Pa.)
DISTRICT NO. 4
D I S T R I C T OF COLUMBIA:

Washington:
First Federal Savings & L o a n Association of Washington,
N a t i o n a l Press Building.
FLORIDA:

Clewiston:
Clewiston Federal Savings & Loan Association (converted
from Clewiston H o m e Building Association).
Lake W o r t h :
Lake W o r t h Federal Savings & Loan Association.
MARYLAND:

Baltimore:
Belair-Hopkins Federal Savings & Loan Association, 2 3 3 1
E a s t Federal Street (converted from Belair Building Association, Incorporated).
Homeseekers' Federal Savings & Loan Association, 115 W e s t
Saratoga Street (converted from Homeseekers' Loan &
Building Association).
Hopkins-Homestead Federal Savings & Loan Association,
2628 Harford A v e n u e (converted from Hopkins H o m e s t e a d
& Building Association).
KENTUCKY:

DISTRICT NO. 5

Carrollton Federal Savings & Loan Association (converted
from C a r r o " t o n Building & Loan Association).
OHIO:

Defiance:
First Federal Savings & Loan Association of Defiance, 3 2 4
Clinton Street (converted from Northwestern Savings &
Loan C o m p a n y ) .
TENNESSEE:

,

Elizabethton:
.
. .
Elizabethton Federal Savings & Loan Association.
DISTRICT NO. 6

INDIANA:

,

Williamsport:
.
. .
Warren C o u n t y Federal Savings & Loan Association (conv e r t e d from Warren C o u n t y Building, Loan Fund & Savings
Association).
D I S T R I C T NO.?

ILLINOIS:

Chicago:
Security Federal Savings & Loan Association of Chicago, 8 8 6
M i l w a u k e e A v e n u e (converted from Slovak Building &
Loan Association "Kirvan").
Paris:
.
._
Paris Federal Savings & Loan Association, 110 E a s t Court
Street (converted from Paris Savings & Loan Association).

320




D I S T R I C T N O . 10
KANSAS:

Coffeyville:
First Federal Savings & Loan Association of Coffeyville.
D I S T R I C T N O . 12
CALIFORNIA:

San

Jose:
First Federal Savings & Loan Association of San*" Jose, 2 4
N o r t h First Street (converted from Reserve Building &
Loan Association).

NEVADA:

Las Vegas:
Las Vegas Federal Savings & L o a n Association (converted
from M u t u a l Building & L o a n Association of Las Vegas,
Nevada).

CANCELATIONS OF FEDEBAL SAVINGS AND LOAN ASSOCIATION CHARTERS BETWEEN APRIL 19,1937, AND MAY

15, 1937
IOWA:

Waterloo:
Waterloo Federal Savings & L o a n Association.

III. INSTITUTIONS INSURED BY THE FEDERAL
SAVINGS AND LOAN INSURANCE CORPORATION BETWEEN APRIL 19, 1937, AND MAY 15,
1937 1
DISTRICT NO. 2
N E W JERSEY:

Hasbrouck Heights:
Polifly Building & Loan Association, 232 Boulevard.
N E W YORK:

Mariners Harbor (Staten Island):
Northfield Building-Loan & Savings Association, 2944
Richmond Terrace.
Monticello:
Sullivan C o u n t y Savings & Loan Association, 246 Broadway.
DISTRICT NO.5
OHIO:

Bucyrus:
Peoples Savings & Loan Company, Sandusky Street.
Cleveland:
Security S a v i n g s & Loan Company, 1200 Huron R o a d .
DISTRICT NO.6
INDIANA:

Butler:
Peoples Savings & Loan Association of D e K a l b
Indiana, 100 N o r t h Broadway.

County,

DISTRICT NO.7
WISCONSIN:

Milwaukee:
E a s t Side M u t u a l Building & Loan Association, 2906 N o r t h
Oakland Avenue.
Wauwatosa:
Suburban Building & Loan Association, 6604 W e s t N o r t h
Avenue.
DISTRICT NO.8
MISSOURI:

Farmington:
St. Francois C o u n t y Building & Loan Association, 13 W e s t
Liberty Street.
Liberty:
Clay C o u n t y Building & Loan Association, 6 W e s t Franklin
Avenue.
D I S T R I C T N O . 10
COLORADO:

Salida:
Salida Building & Loan Association, 130 S o u t h " F " Street.
D I S T R I C T N O . 11
WASHINGTON:

Aberdeen:
Grays Harbor Savings & Loan Association, 300 E a s t W i s h k a h
Street.
D I S T R I C T N O . 12
CALIFORNIA:

Santa Maria:
Santa Maria Guarantee Building-Loan Association, 102 W e s t
Church Street.
1
During this period 14 Federal savings and loan associations were
insured.

Federal Home Loan Bank Review
U. S. GOVERNMENT PRINTING OFFICI: 19*7

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