Full text of Federal Home Loan Bank Review : March 1937, Vol. 3 No. 6

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Vol. 3

<§aOfce

No. 6

FEDERAL
HOME LOAN BANK

REVIEW
MARCH
1937

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




Federal Home Loan Bank Review

TABLE OF CONTENTS
Page

The Schenectady plan

183

An example of neighborhood maintenance

185

Insurance of joint accounts and trust accounts

187

Appraisal methods and policies

190

Administrative rulings, Board resolutions, and Counsel's opinions

193

Indexes of small-house building costs

198

Monthly lending activity of savings and loan associations

200

Residential construction activity and real-estate conditions

202

January index of foreclosures in large urban counties
Federal Home Loan Banks

202
208

Interest rates on advances to member institutions

208

Growth and trend of lending operations

209

Federal Savings and Loan System

210

Federal Savings and Loan Insurance Corporation

212

Home Owners' Loan Corporation

214

Subscriptions to shares of savings and loan associations

214

Summary of operations of the Reconditioning Division

214

Foreclosure cases dispatched and properties acquired

215

Directory of member, Federal, and insured institutions added during January-February....

217

SUBSCRIPTION PRICE OF REVIEW
THE FEDERAL HOME LOAN BANK REVIEW is the Board's medium of communication with member mstitutions 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 THE BUREAU OF THE BUDGET

127333—37




1

Federal Home Loan Bank Board
JOHN H. FAHEY, Chairman
WILLIAM F. STEVENSON

T. D. WEBB, Vice Chairman
F. W. CATLETT

H. E. HOAGLAND

OFFICERS OF FEDERAL HOME LOAN BANKS
BOSTON:
B. J. ROTHWELL, Chairman; E. H. WEEKS, Vice Chairman; W. H. NEAVES, President;
H. N. FAULKNER, Vice President; FREDERICK WINANT, JR., Secretary-Treasurer; L. E.
DONOVAN, Secretary.

NEW YORK:
GEORGE MACDONALD, Chairman; F. V. D. LLOYD, Vice Chairman; G. L. BLISS, President; F. G.

STICKEL, JR., Vice President-General Counsel; ROBERT G. CLARKSON, Vice President-Secretary;
DENTON C. LYON, Treasurer.
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. WEST, Chairman; E. C. BALTZ, Vice Chairman; O. K. LAROQUE, President-Secretary;

G. E. WALSTON, Vice President-Treasurer; Jos. W. HOLT, Assistant Secretary.
CINCINNATI:

H. S. KISSELL, Chairman; L. A. HICKMAN, Vice Chairman; W. D. SHULTZ, President; W. E.
JULIUS, Vice President; A. L. MADDOX, Treasurer; DWIGHT WEBB, JR., Secretary.
INDIANAPOLIS:

F. S. CANNON, Chairman-Vice President; S. R. LIGHT, Vice Chairman; FRED T. GREENE, President;
B. F. BURTLESS, Secretary-Treasurer.
CHICAGO:

H. G. ZANDER, Chairman; MORTON BODFISH, .Vice Chairman; A. R. GARDNER, President; JOHN
BARD WICK, JR., Vice President; E. H. BURGESS, Treasurer; CONSTANCE M. WRIGHT, Secretary.

DES MOINES:
C. B. ROBBINS, Chairman; E. J, RUSSELL, Vice Chairman; R. J. RICHARDSON, President-

Secretary; W. H. LOHMAN, Vice President-Treasurer; J. M. MARTIN, Assistant Secretary;
A. E. MUELLER, Assistant Treasurer.
LITTLE R O C K :

J. GILBERT LEIGH, Chairman; W. C. JONES, JR., Vice Chairman; B. H. WOOTEN, President;

H. D. WALLACE, Vice President-Treasurer; J. C. CONWAY, Secretary.
TOPEKA:

W. R. MCWILLIAMS, Chairman; G. E. MCKINNIS, Vice Chairman; C. A. STERLING, President-

Secretary; R. H. BURTON, Vice President-Treasurer.
PORTLAND:
F. S. MCWILLIAMS, Chairman; B. H. HAZEN, Vice Chairman; C. H. STEWART, President;
IRVING BOGARDUS, Vice President-Treasurer; W. H. CAMPBELL, Secretary; MRS. E. M.

SOOYSMITH, Assistant Secretary.
Los ANGELES:
C. H. WADE, Chairman; D. G. DAVIS, Vice Chairman; M. M. HURFORD, President; F. C. NOON,




Secretary-Treasurer.

The Schenectady Plan

T

HE people of Schenectady, New York,
are apparently determined that the future development of their city shall not be
dictated by chance. They have a comprehensive plan which has been developed by
the City Housing Authority and which gives
effect to the city plan. As the details are
worked out and become ready to be put into
effect, they are taken before the City Council
for appropriate action. This plan has been
designed not only to guide future expansion
but to cure existing evils. Slums, blight,
and congestion will be removed and the
land put to new uses which will be both
socially and economically more desirable.
This comprehensive plan has been evolved
with full awareness of the necessity for
coordination between the long-time city
plan, and the long-time regional, State, and
Federal plans. It is based on the New York
State Municipal Housing Authorities Law
and will need the Federal financial assistance recently made available.
The Schenectady plan is composed of
five principal parts. Particular emphasis
has been placed on the necessity for keeping slum clearance separate from low-cost
housing. They are of course closely integrated but are to be financed as separate
projects. The elements of the Schenectady
program are as follows:
1. Clearance and rehabilitation of slums.
2. Low-rent housing.
3. Rehabilitation of blighted area.
4. Creation of a belt of municipally
owned land on the periphery of the city.
5. Provision for a continuous record,
both social and economic, of the city. This
will include a real-property inventoryIn January 1934, the State of New York
passed the Municipal Housing Authorities
Law. The City Council of Schenectady was
quick to take advantage of this law; one
March 1937




month later, in February, they authorized
the creation of a Housing Authority. After
its organization the Schenectady Housing
Authority immediately made plans to get
the financial assistance offered by the Federal Government. Its applications for
funds for both low-cost housing and slum
clearance were made in cooperation with
the New York State Board of Housing and
were based on the city plan prepared
by Harlan Bartholomew about 10 years
earlier.
CLEARANCE AND REHABILITATION OF SLUM
AREA

As REGARDS its slum area, Schenectady has
a problem common to many metropolitan
districts; only 10 percent of the total slum
area is fit for re-use as a housing site. The
remaining 90 percent has to be cleared of
its unsightly and unsafe dwellings and
some other use found for it. Schenectady
set itself the further restriction that the
new use of this land must be noncompetitive with private business, must be productive, and must constitute a public use.
The slum area of Schenectady covers
about 100 acres of ground all of which is
located in the main business and industrial
section of the city. The re-use of this land
was conditioned by the public needs for
that area. The principal re-uses are for:
Automobile parking areas, a consolidated
bus terminal, a consolidated truck terminal, a secondary public market, and the
coordination of the railroad freight terminals of the city in one area.
It will be seen that these uses are almost
wholly concerned with solving traffic problems of one kind or another. Every city
has the same problem before it: How to
transport workers and goods to and from
congested central areas.
183

Emphasis has been centered on traffic
relief in Schenectady as the result of traffic and parking surveys covering a period
of three years. One of the findings of this
survey was that at the period of greatest
accumulation, 7,702 automobiles were in
the downtown area. Unfortunately, in that
area there is parking space for only 2,700
automobiles. The resulting problem is
obvious.
As a part of the program, it is proposed
that as soon as the parking areas on the
slum land are completed, all curb parking
will be prohibited.
This will apply to
busses as well as to private cars. In addition to clearing the streets of curb parkers
the plans include street broadening to further facilitate traffic flow. Parking in the
public areas will be subject to a 15-cent
charge with free transfer privileges to any
other area and good until 6: 30 P. M. It
has been estimated that this charge will
produce adequate revenue to pay for all capital charges, maintenance and operation.
The revenue will be pledged to secure
bonds which will be further secured by a
first mortgage. Four of these pairing
areas will be operated by the Housing Authority and the fifths is proposed to be
leased to the General Electric Company.
All the other projects are expected to be
self-supporting and self-liquidating and
will be operated by the Authority.
In addition to the low charge for parking,
another service is planned in the form of
locker keys so that the owner of an automobile who parks it while he goes shopping
can request delivery of the goods purchased to "Locker No. 5 at Such-and-Such
Parking Place." Such delivery would be
easily made, and, of course, free. The
purpose here is to relieve the congestion
which, it is believed, chokes off millions of
dollars worth of retail trade. One estimate of the loss of retail trade resulting from traffic congestion is $20,000,000
annually.
The Schenectady City Housing Authority
finds that the slum area which it is attack184




ing resulted from an original zoning provision for too much commercial area in a
much older city plan. That plan contemplated a considerably more rapid growth
than the city experienced. The surplus
commercial area eventually degenerated
into a slum area that increased fire risks
with consequent increases in fire insurance
rates. The present plan contemplates a
considerable saving in fire insurance costs
through the slum clearance.
The result of these operations would dehouse about 180 families. Most of this
number are owners who will buy or build
in other sections of the city. The Authority, has, with the assistance of the city,
forced demolition on sanitary grounds.
The small number of families occupying
this large area is due to the fact that the
greater part of the structures had been already declared unfit for use and were unoccupied. The total cost of the slum
rehabilitation projects is estimated at
$2,265,000.
On the small habitable area of slum land
the Authority is now erecting low-cost
dwellings with the aid of the Housing Division of the Public Works Administration.
For this purpose the Division allocated
$1,500,000. The plans call for nine structures. The land has been cleared and the
foundations built for three of this number.
And although there have been delays and
the plans have had to be redesigned to
lower the cost, it is expected that construction will start during early 1937.
LONG-TIME LAND PROGRAM

the most interesting phase of the
Schenectady city plan is the projected program for land use in blighted and open
areas. This program is pioneering. It
should be watched by everyone because it
affords an empirical basis for judgment of
the most advanced theories for city rehabilitation.
The possession of foreclosed properties
by the city is the lever by which the long-

PERHAPS

(Continued on page 197)

Federal Home Loan Bank

Review

An Example of Neighborhood Maintenance

D

ALLAS, Texas, presents one of the
most interesting tests of the theory of
maintaining a high standard for a large
neighborhood (in order to protect the value
of the individual houses and lots) to be
found in the United States today. Special
rather than usual conditions prepared the
way for this test; therefore, a brief review
of the record will be of interest.
Dallas, like many other municipalities, is
not confined within the city limits. What
we shall discuss is the real Dallas that
spreads for miles beyond its city limits.
Indeed, there are separate incorporated
municipalities directly adjoining Dallas so
that the stranger could not possibly know
when he had passed from one into the
other. For the purposes of this discussion
all of these become part of the metropolitan center that must be considered an
entity.
The population of this metropolitan area
increased 58 percent during the decade,
1920-30, according to the U. S. Census. This
was its period of most rapid growth although the increase in population had long
been steady. For example the U. S. Census
reports for 1910 a population of 120,000;
and for 1930, 310,000.
The period of most rapid growth coincides with the development of large, new
oil fields in various parts of Texas, and
greatly stimulated prosperity and productivity within the enormous trade territory
of the city. It is not accounted for by a
few, large, local industries. This point is
important because there was an interesting
disproportion between the increase in local
wage earners and the number of persons
coming from farms, ranches, and especially
very small towns, bringing newly acquired
March 1937




capital, and seeking the educational and
social advantages of a large city. These
people were accustomed to owning their
own homes and expected to do so in Dallas
and its environs. A very large proportion
of them were in the market for building
sites rather than homes already constructed. They wanted large lots and some
assurance in the form of restrictions and
zoning that other construction in the neighborhood would be of high standard. As a
result of this demand for space, hundreds
of acres of neighboring farm and pasture
land became city additions. The growth,
as is usual under such circumstances, was
mainly in one direction; in this case, north.
Not narrowly north in a thumblike projection, but broadly, more in the shape of a
whole hand. At its tip, the projection of
the residential section was about thirteen
miles from the business center of Dallas
proper.
While probably not unique, this was certainly something unusual as to area of
zoned and restricted residential development.
Restrictions are not new and neither is
zoning but Dallas got the full benefit of the
experiences (often disappointing) of numerous older cities. Moreover, it applied
the lessons of this experience to a new
territory large enough to give restrictions
and zoning a better than fair chance to
show their value.
A large proportion of the new homes was
of brick or stone. The period during which
they were constructed was one marked by
new conceptions of the possibilities of residential architecture. None of the atrocious
architecture of the eighties and nineties had
marred this open prairie land. It began
185

with the best. There were no out-moded
public service facilities to be torn up and
replaced at great expense. The newcomers
began at the grass roots. The builders
were not thinking primarily of real-estate
values because very few of these buyers
and builders expected to sell their properties. Social values were their guide.
Then came the depression. A few official
figures will suffice to show what it did to
residential construction. According to the
record of building permits for the city
proper 11,000 new family dwelling units
were provided in 1930; this dropped to 1,000
in 1931; to 950 in 1932; to 300 in 1933; rose
to 304 in 1934; and to 329 in 1935. Since
then the increase has been impressive.
Thousands of incomes were sharply reduced and many of the owners of the new
homes lost both income and capital. Realestate values were reduced, of course, and
the real-estate market almost disappeared.
Maintenance of many of these homes was,
perforce, neglected. But they had been for
the most part well constructed in the first
place and damage was relatively quite
small. These houses offered no expensive
fringe of shoddy, gingerbread decoration
to the sun and rain and sleet. With lawns
and trees trimmed they kept their excellent appearance. With the restrictions and
the zoning rules they could not fall victims
to encroaching retail enterprises or hand
laundries or dry cleaning establishments
or three or even five or six times during the
Scores of these houses changed hands two
or three or even five or six times during the
depression. But the restrictions and the
zoning survived, and with them the high
quality of the neighborhood. This test is the
more interesting because protection of market value was not the original purpose of
the safeguards. Consideration for social
values brought the restrictions and the
zoning into being.

186




Finally the depression ended. Dallas has
been prosperous for more than a year.
What happened to this large and new residential district as better times returned?
Well, it resumed growing and its values
were restored with amazing rapidity.
There remains a comparison to be made
with much older sections of Dallas that
basked in glory before anyone thought
much about the preservation of entire
neighborhoods from deterioration. The
once envied homes of those relatively small
neighborhoods, if they were blighted during the depression, have not recovered their
values. They go on deteriorating. Their
only hope is that industry or commerce
will claim them or the ground on which
they stand for new uses.
HERE IS AN EXCELLENT ADVERTISEMENT.

ONE CASTLE:
NOT for rent!
& Bedroomt; bath; living room; dining
room; kitchen; modern lighting; plumbing, heating, refrigeration; garage.
Just * normal American home!
Yet, where, amid all the catties of Europe, can you find a*
much comfort and convenience?
Inside the house is a telephone. Radio. Washing machine.
Dainty glass and china. Spotless linen. Fluffy towels. A hundred
and one articles of furniture and decoration that make life pleasant and agreeable... that make the American home the envy of
the world.
American "castle-dwellers" have long learned what to buy for
the inside of the home, but are at a Ion as to how to properly
finance, plan and mpervum contraction.
Hundreds of home owners have turned to us for guidance in
these matters.
It is our business to keep posted . . . to be ready to assist in
securing the best construction... proper d e s i g n . . . an assurance
of the carrying out the detail of the plan! and specifications, by
constant supervision during construction.
WE CAN HELP YOU, TOO—WHETHER THE PROBLEM
IS NEW CONSTRUCTION—REFINANCE—OR THE PURCHASE OF A HOME.
WE MAKE F. H. A. LOANS

FIRST FEDERAL SAVINGS & LOAN
ASSOCIATION OF GLENDALE
117 Etut Broadway

Douglat 274

Federal Home Loan Bank

Review

Insurance of Joint Accounts and Trust
Accounts

I

N CONNECTION with the insurance of
joint accounts and of trust accounts
(under the provisions of Section 1 of the
Rules and Regulations for Insurance of
Accounts) many insured institutions have
made inquiries as to the scope of the insurance of joint accounts and trust accounts.
So that there may be a better understanding, the following analysis, with illustrations, has been prepared by the Legal Department of the Federal Savings and Loan
Insurance Corporation:
Without prejudice of the rights and without modification of the duties of the Insurance Corporation with respect to the settlement of insurance in accordance with law,
the following illustrations are given of the
insurability by the Federal Savings and
Loan Insurance Corporation of individual,
joint, and trust accounts in a single insured
institution. On the date of default of an
insured institution, the status of ownership
of an insured account is determined in accordance with the investment contract and
the law of the State in which the contract
is made, as affected by the law of the State
or States having jurisdiction over the activities of the contracting parties. Ownership,
as so determined, will control the settlement of insurance pursuant to Title IV of
the National Housing Act.
JOINT ACCOUNTS W I T H A RIGHT OF
SURVIVORSHIP

or not a particular account is a
joint account depends upon the investment
contract and the law of the State governing
the contract between the joint owners. In
WHETHER

March 1937




the following examples, it is assumed that
a joint account with the right of survivorship, and not a tenancy in common, is created by an investment by two or more persons in an account designated as held by
two or more persons "as joint tenants".
To create by contract a joint account with
a right of survivorship, when permitted by
State law, the certificates evidencing the
investment should certify that, for example, John Doe and Richard Roe, as joint
tenants, with a right of survivorship and
not as tenants in common hold the account.
A, B, and C may, at the same time, hold
the following accounts in a single insured
institution and each account will be insured by the Federal Savings and Loan Insurance Corporation up to $5,000:
Account No. 1: A
Account No. 2 : R
Account No. 3 : C
Account No. 4: A, R, and C
as joint
tenants
Account No. 5: A and R as
joint tenants
Account No. 6: A and C as
joint tenants
Account No. 7: R and C as
Joint tenants

A holds such account and is the
member.
R holds such account and is the
member.
C holds such account and is the
member.
A, R, and C hold such account
and are deemed one member
as though they formed a partnership.
A and R hold such account and
are deemed one member as
though they formed a partnership.
A and C hold such account and
are deemed one member as
though they formed a partnership.
R and C hold such account and
are deemed one member as
though they formed a partnership.

The insurance statute limits the insurance to any one insured member in any one
insured institution to $5,000. An insured
member of an insured institution may be
187

either an individual, a partnership, an association, or a corporation. Under the Rules
and Regulations for Insurance of Accounts,
a joint account is insured as a partnership
account and the joint holders of such account constitute one member as though
they were a partnership. In regard to the
joint accounts mentioned above, a different
member of the institution holds each such
joint account on the basis stated, to wit:
A and B constituting a single member is a
different member from A and C constituting a single member. But there is no difference, for insurance purposes, between
Account No. 5, above, and "B and A as
joint tenants." One member, namely, A
and B as though they formed a partnership,
holds both accounts; and insurance on the
aggregate amount of money invested in
these two accounts will be limited to $5,000.
It is to be noted, however, that if all the
joint holders of a joint account die except
one, the joint account would cease to exist
and the individual account which would
remain in its stead would be treated in the
same manner as any other individual account; i. e., if the survivor already held an
individual account of $5,000, his total insurance would be limited to $5,000 regardless of how many individual accounts such
individual holds. But until there is a death
or the joint account is otherwise terminated, the insured status of a joint account
is on the partnership basis.
A husband and a wife as joint tenants
with a right of survivorship create a tenancy by the entirety. It would be well for
the certificate of investment to state the
marital relationship.
The laws of each State should be examined to be sure that the investment contract for a joint account creates under State
law the legal relations intended by the
parties.
An association proposing to open a joint
account with a right of survivorship should
protect itself by obtaining a written agreement signed by the joint account holders
that the association is authorized to act
188




without further inquiry in accordance with
writings bearing the signature of any one
of the joint account holders and that any
one of the joint account holders who shall
first act shall have power to act in all matters related to the membership in the association or with regard to the joint account,
whether the other person or persons jointly
owning the account be living or not. Such
an agreement should authorize the association to pay the withdrawal or repurchase
or redemption value of such joint account
in whole or in part to any one of the joint
account holders who shall first act, and that
any such payment or a receipt or acquittance signed by any one of the joint account
holders shall be a valid and sufficient release and discharge of the association.
TRUST ACCOUNTS

IT IS also to be noted that insured accounts
may be held in trust. Since the beneficiaries and not the trustees of trust accounts are the real insured parties in interest, for the purpose of insurance, the
beneficiaries and not the trustees are insured. Under the Rules and Regulations
for Insurance of Accounts, one trustee may,
therefore, hold as trustee any number of insured accounts for any number of disclosed
beneficiaries provided the accounts of such
beneficiaries are carried separately. If
there is but one individual, association, or
corporation that is the beneficiary of the
trust, the account is insured as an individual, association, or corporation account respectively; and if there are joint owners
with the right of survivorship, who are
beneficiaries of a trust account, the account is insured as a partnership account.
Further to illustrate this matter, a trust account entitled "X as trustee for A" is insured as an individual account on the same
basis as Account No. 1, above, would be
insured; likewise, the trust account entitled
"X as trustee for A, B, and G as joint tenants" is insured as a partnership account
on the same basis as Account No. 4, above,
would be insured. The maximum insurFederal Home Loan Bank

Review

ance on the aggregate amount of money
invested in Account No. 1, above, and "X
as trustee for A" would be $5,000. For insurance purposes, the beneficial interest in
both of such accounts is held by the same
person, namely, by A. Likewise, the maximum insurance on the aggregate amount of
money invested in Account No. 4, above,
and "X as trustee for A, B, and C as joint
tenants" would be $5,000. For insurance
purposes, the beneficial interest in both of
such accounts is held by the same persons,
namely, by A, B, and C as though they
formed a partnership.
For insurance purposes, there is no difference between different accounts held by
the same person whether absolutely or
beneficially under a trust; and the total insurance to any one member, irrespective
of how many different accounts such member holds (either absolutely or beneficially
under a trust or trusts) in any single insured institution, is limited to $5,000.
Therefore, if A holds Account No. 1, above,
in which account A has invested $4,000,
and if A also holds some other account in
this same institution in which account A
has invested $3,000, the maximum insurance on the $7,000 so invested is $5,000.
The laws of some States contain special
provisions with regard to trust accounts in
savings and loan associations and each insured institution should provide for obtaining appropriate special agreements
required or permitted by such special
provisions of State law if the association
proposes to take advantage thereof in
connection with issuing trust accounts.
ACCOUNTS HELD BY TENANTS IN COMMON

in common hold by several and
distinct titles, with unity of possession. No
privity of estate exists between them. The
qualities of their estates may be different
and their interest in the account may be
unequal. Each tenant in common is, for
insurance purposes, a different member of
an insured institution. Subject to the limitation that the total insurance which any
TENANTS




(Continued on page 192)

189

March 1937
127333—37

insured member may have in any one insured institution is an aggregate amount
not in excess of the $5,000, whether the insured member has one or more insurable
accounts, the interest of a tenant in common in such an account is insured to the
same extent as it would have been had the
value of his interest in such amount been
represented by a separate account. Example: A and B hold an account of $10,000
as tenants in common and A's undivided
interest in such account is $4,000 and B's
undivided interest is $6,000. If A holds no
other account, his undivided interest of
$4,000 would be insured. If A holds another account of $2,000, A's total insurance
would be $5,000, $1,000 of the $4,000 undivided interest in the account held as a
tenant in common or $1,000 of the individual account of $2,000 being uninsured.
Whether or not B holds any other account
in the association his total insurance would
be $5,000.
In order that the records of each insured
institution will show the amount of insurance of each tenant in common, if any, the
following records are necessary: When and
if an account for tenants in common is
opened, each tenant in common must certify in writing either the dollar amount of
undivided interest of each tenant in common in such account or must certify the
proportion which the undivided interest of
each tenant in common bears to the whole
account. Whenever additional payments
are made on such account held by tenants
in common, a signed statement must be obtained from the person making such payment as to whether such payment increases
the undivided interest of such tenant in
common or of another tenant in common
or increases the undivided interest of each
tenant in common in the proportion fixed
by the prior certificate of each of the tenants in common stating the proportion of
the account each tenant in common holds.
To create a teenancy in common the certificate of investment should certify that

2

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

T

HE value of improved real property
is dependent upon the future benefits
it offers. One of the most important of
these is the ability to produce income which
is variable according to the type of property and its use. This article will deal with
the value of this particular future benefit.
The method of determining its value is a
process of capitalization which means the
determination of the present worth of a
series of future incomes. For example,
assume that an investor buys a $1,000 bond,
bearing 5-percent interest, and maturing in
20 years. What he has actually bought is
a claim to an income of $50 per year for
20 years, and a lump sum of $1,000 at the
end of that time. What is that claim worth
to him? It depends upon the rate at which
he discounts the future, or his rate of "time
preference", as the economist expresses it.
What is the $50 which he will receive a
year from today worth to him now? If it
should be $47.62, then his rate of discount
would be 5 percent, as that sum at 5-percent
interest would amount to $50 at the end of
the year. The present worth of the whole
series of future incomes can be determined
by discounting them, for the proper lengths
of time, by this rate. This analysis of
capitalization, however, is based upon the
assumption that the bond will be worth
the full amount of the original investment
at the expiration of the 20-year period and
the income remain constant during that
period. The application of the capitalization principle to real property is somewhat
different because the principal may not be
a fixed asset and the income may be variable.
190




There are two general forms of capitalization which are known as the "net
method", used primarily for the investment
or income type of property, and the "gross
method", which may be used for the type
of properties having other amenities than
income alone.
NET CAPITALIZATION METHOD

T H E capitalization of net income is dependent upon the predicted future gross
income, less carrying charges and operating
expense, which is known as the "net income". The present value of any property is based on the net income which it
is expected to produce in the future and
the estimated value of the lot at the expiration of the useful life of the improvement. Past income is not a basis for calculation, but is an indication of the expected
future income. The net income is established by deducting from the gross income
the expenses and carrying charges over the
same period of years; these expenses and
carrying charges are the amounts to be
expended for taxes, maintenance, depreciation, insurance, management, loss for vacancies, and utilities, such as light, power,
and water.
Having determined the net income, the
probable number of years it will continue,
and the value of the lot when the building
has been removed, the appraiser must next
decide what rate of capitalization he should
use. The proper one is the rate which investors in property of that type commonly
expect and demand. If they will not invest in property unless the price is such
that they will receive 6-percent net return,
Federal Home Loan Bank

Review

then that becomes the prevailing rate of
capitalization. It varies with different
localities and with different types of property. In general, it varies inversely with
the supply of investment funds and the
security of real-estate values. Ample funds
and a high degree of security result in a low
capitalization rate, and vice versa.
This capitalization method is best suited
to the use of professional appraisers and to
the appraising of income-producing properties. Its logical basis when applied to
income-producing property is unassailable
but it involves a thorough knowledge and
wide experience on the part of the one
making the analysis in the operation and
management of this type of property. It is
not considered to be a fair method of capitalizing the income of small residential
properties, for they are not bought and sold
on the basis of the income which they produce.
GROSS CAPITALIZATION METHOD

THE gross capitalization method may be
used very successfully in estimating the
value of rental for small-income properties,
provided sufficient consideration is given to
the hazards involved in establishing the
capitalization rate.
Every careful student of real-estate values
knows that the capitalization rate varies
with different kinds of property and in
different communities. Generally the rate
is higher for property which is subject to
a rapid rate of depreciation. With such
property the rent is high in proportion to
the value because the rent includes a considerable allowance for
depreciation.
Thus a lower rate may be used for properties occupied by the owners or by a high
class of tenants, as compared to properties
occupied by a poor class of tenants which
would cause rapid depreciation and present
a greater hazard to the property and the
income. A cheaply built house may for a
period of years rent for as much as a well
constructed one, but its sale value is considerably less, which difference can be
March 1937




taken into account by using a higher capitalization rate for the cheaper house.
The fair capitalization rate for any particular piece of property depends upon a
number of factors. The first thing that
must be considered is the rate of return demanded by investment capital on any ordinary secure investment. The effect of all
the various hazards involved in this particular investment in comparison with the
hazards of the ordinary secure investment
must be given due consideration.
It might be well to enumerate some of
the hazards of the ordinary residential
property, which are abnormal depreciation
of the improvements, downward trend of a
neighborhood causing a rapid decrease in
income, loss of rents by vacancies, loss of
income through poor collections, abnormally high or low carrying charges. Any
one of these may materially affect the capitalization rate for the property. For example, invested capital might demand 6percent return on an ordinary investment
which is not subject to any special hazard
other than the ordinary market and economic conditions. However, because of the
existence of one or more of the abovementioned hazards, which are prevalent in
real property investment, it would be necessary to return a gross of considerably
more than 6 percent in order to give the
investor an average fair return on his
money.
If the appraisal is being made for the
purpose of determining the present market
price, the current gross rental is used as a
basis for capitalization. If, however, the
purpose is toj determine the value upon
which a long-term mortgage loan may
safely be made, the average rental is used
as a basis for capitalization. The establishment of an average of the past rentals,
projected into the future, may be comparatively safe. If the appraisal is being made
during a period of depression when rents
are abnormally low, the use of the average
rental would indicate a higher value for
the property than would the current rental.
191

This contention assumes that within the
next few years rents and sale prices will
rise to their former levels. This assumption may be invalidated, however, by a continuing decline or by the maintenance of a
new low level of realty values- Therefore,
during a period of depression the higher
value indicated by the use of the average
of past rentals, rather than the current
rental, should be accepted only if it is well
supported by other evidences of value. On
the other hand, it is the part of conservatism during a period of high prices to use
the average of past rentals rather than the
current rental, as the probable decline of
prices will thereby be anticipated.
The appraiser should be sure that the
rental used as a basis of capitalization represents the true rental of the property,
neither too high nor too low, as judged by
the prevailing standards of the community.
The rent that a tenant who has some freedom of choice in the matter may be reasonably expected to pay is the fair basis for
capitalization. In the great majority of
cases, however, this will be the same as the
rent actually paid, as the rental market is
usually a competitive one. If the property
has not been rented in recent years, or possibly never, its rental value must be determined by comparing it with similar properties which are rented.
The gross capitalization method of estimating value is subject to much the same
criticism that was advanced against the

comparative method of establishing market
price. It considers only present and past
rentals, whereas the value of the property
is really dependent upon future rentals. It
can be dependable only to the extent that
the former correctly forecast the latter.
This method is most applicable to lowand medium-priced residences. It is usually difficult to ascertain the proper ratio
for high-priced properties, for they are not
usually rented- Moreover, in the relatively
few cases in which they are rented, there is
not likely to be any one prevailing ratio
between the rental and the value of the
property, because there are too few such
cases to establish a stabilized market.
The methods of capitalizing the income
from small residential properties have
been only fairly accurate, either on a net
or gross basis. The amenities involved in
the ownership of small residential properties are an indeterminate factor and cannot be capitalized. These amenities must
be represented by a reduced rate of return
on the investment, the amount of which is
controlled by the amenities afforded to any
particular owner. This does not mean that
capitalization of income from this type of
property has no place in the estimating of
appraised value—it is beyond a doubt a
very valuable study because any property,
even though occupied by the owner, is always a potential rental property whose
value is dependent in part upon the income
which it will produce.

Insurance of Accounts

of one joint accountholder, if that be permissible under State law and deemed desirable by the insured institution. In any
event, upon execution of an application for
such a joint account, the tenants in common
should be required to stipulate expressly in
what manner and by what signatures the
association is to be released in connection
with such joint account.

(Continued from page 189)

John Doe and Richard Roe as tenants in
common hold the account.
Associations which propose to open joint
accounts held by tenants in common should
require such tenants in common to sign
necessary agreements to provide for the release of the association upon the signature

192




Federal Home Loan Bank

Review

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

DIVIDENDS—Payment of, on inactive
share accounts. Fed. Charter K, Sec. 9.
An inactive share account, within the
meaning of Section 9, Charter K, for Federal savings and loan associations, is one,
the participation value of which is $5 or
less, upon which no payments have been
made and upon which no application for
repurchase has been filed during the six
months period for which dividends are to
be declared. See A-B-C Book, C-138,
dated February 9, 1937.
BONDS FOR OFFICERS, DIRECTORS,
AND EMPLOYEES—ON "DIFFERENT BASIS." Fed. Regulation. Sec.
12; Ins. Regulation Sec. 15.
The provision of Section 12 (b) of the
Rules and Regulations for Federal Savings
and Loan Associations, (Section 15 (b) of
the Rules and Regulations for Insurance
of Accounts) that, under circumstances
therein named, "The Board may approve
a bond on a different basis" does not contemplate the approval of fidelity bonds in
lesser amounts than those provided by Section 12 (a) of the Rules and Regulations
for Federal Savings and Loan Associations
and by Section 15 (b) of the Rules and Regulations for Insurance of Accounts. See
A-B-C Book, A-139, dated February 4,1937.
DIVIDENDS—Payments of, on share accounts repurchased. Fed. Charter E,
Sees. 7,10; Fed. Charter K, Sees. 9, 12.
Charter E (Sec. 7) and Charter K (Sec.
9) provide for the declaration and payment
March 1937




BOOK OPINION

of dividends as of June 30 and December
31 of each year. Charter K expressly provides that all dividends shall be declared
as of said dates. That is the correct construction also of Charter E. Charter E
(Sec. 10) and Charter K (Sec. 12) provide
that dividends upon a share account to the
extent of the amount of the application to
repurchase all or part thereof, shall be discontinued while such share account remains upon the repurchase list. Unless a
repurchase application and payment is
made on June 30 or December 31, dividends may not be paid on shares repurchased to the date of repurchase. The
appropriate method of calculation of dividends when part of a share account has
been noticed for repurchase is set forth expressly in Section 9 of Charter K. Such
formula for the calculation of dividends is
also applicable to Charter E. (Full text of
opinion in A-B-C Book, C-140, dated February 17, 1937.)
POWERS OF ASSOCIATION—Investment
in "Other securities". Charter E, Sec.
11, Charter K, Sec. 13.
A Federal savings and loan association,
whether it operates under either Charter E
or Charter K, cannot legally invest in securities other than obligations of, or obligations guaranteed as to principal and
interest by, the United States, obligations
of Federal Home Loan Banks, and stock of
a Federal Home Loan Bank. As yet the
Federal Home Loan Bank Board has not
approved any other types of securities for
193

investment by such association and cannot legally approve any other types of security for investment by such associations
unless Section 5 of the Home Owners' Loan
Act of 1933 is amended to give the Federal Home Loan Bank Board this authority.
Other securities, which have been legally
acquired by a converted association before
such conversion or which are legally acquired in a salvage operation, but which
are not legal investments for a Federal savings and loan association, can be held for
a reasonable time and, in a salvage operation, can be exchanged for any other securities. When such securities are once sold
for cash, proceeds of such sale must be
used for the purposes and in the manner
provided for in the association's charter
and by-laws. See A-B-C Book, C-141,
dated February 18, 1937.
POWERS OF FEDERAL ASSOCIATION—
Purchase of real estate. Fed. Charter
E, Sec. 18; Fed. Charter K, Sec. 3.
The power to purchase real estate by a
Federal association operating under Charter E or Charter K is found in the provision
in each of such charters permitting such an
association to do such things as may be
incidental to or necessary for the accomplishment of the objects and purposes of
its incorporation, which are to promote
thrift and to provide for the sound and
economical financing of homes in the community to be served. Such associations
also have power to wind up, dissolve,
merge, consolidate or reorganize in the
manner provided by law and the rules and
regulations made thereunder. Each proposed purchase of real estate must be consistent with the objects, purposes, and
powers of the association and must be
incidental to or necessary for the accomplishment of such objects and purposes.
The following real-estate purchases are
legal: (1) an office building within the
charter limitations; (2) at a foreclosure or
analagous sale if the association has a lien
or claim on such real estate; (3) a pur194




chase and concurrent sale when the purpose is to provide the funds for home or
other real-estate financing within the limitations which affect real-estate loans; (4)
real estate acquired in satisfaction of a
debt, or in connection with salvaging the
value of other property, or in exchange for
other real estate owned; (5) the purchase,
approved by the Federal Home Loan Bank
Board, of all or part of the assets (including real estate) of another institution. See
A-B-C Book, C-145, dated February 19,
1937.
POWERS OF FEDERAL ASSOCIATION—
To operate safe deposit vaults. Fed.
Charter E, Sec. 18; Fed. Charter K,
Sec. 3.
The power of any Federal association to
operate a safe deposit vault business can
be found only in the provision in its charter
permitting it to do such things as may be
incidental to or necessary for the accomplishment of the objects and purposes of
its incorporation, which are to promote
thrift and to provide for the sound and
economical financing of homes in the community to be served. Each proposed operation of safe deposit vaults must be tested
as to its consistency with the objects and
purposes of the association and it must be
incidental to or necessary for the accomplishment of such objects and purposes.
The conduct of a safe deposit vault business as incidental to the promotion of
thrift must be deemed remote to such object and not incidental to such purpose
unless there be no other means available
within the community of satisfying a substantial and existent demand on the part
of the members for such services. See
A-B-C Book, C-147, dated February 19,
1937.
POWERS OF FEDERAL ASSOCIATION—
To organize a subsidiary. Fed. Charter E, Sec. 18; Fed. Charter K, Sec. 3.
The power of any Federal association to
organize a subsidiary corporation can be
Federal Home Loan Bank

Review

found only in the provision in its charter
permitting such association to do such
things as may be incidental to or necessary
for the accomplishment of the objects and
purposes of its incorporation, which are to
promote thrift and to provide for the sound
and economical financing of homes in the
community to be served. Any Federal
association also has power to wind up, dissolve, merge, consolidate or reorganize in
the manner provided by law and the rules
and regulations made thereunder. Each
proposed organization of a subsidiary corporation must be consistent with the objects, purposes and powers of the association and must be incidental to or necessary
for the accomplishment of such objects and
purposes. If the business to be transacted
by such subsidiary corporation is lawful
business to be conducted by the association
and the use of a subsidiary corporation to
conduct such lawful business is necessary
or so much more advantageous as to be
almost necessary, the organization of the
subsidiary corporation would be legal. See
A-B-C Book, C-146, dated February 19,
1937.
MORTGAGE LOANS—Commissions to directors, officers, employees of a Federal Association, prohibited. Fed. Reg.
39 (c).
Commissions to directors, officers or employees for writing insurance on the security underlying loans of a Federal association are not prohibited by Fed. Reg. 39 (c).
An insurance premium is a proper initial
charge in connection with the making of a
loan under the Regulations. See A-B-C
Book, C-144, dated February 19, 1937.
RESERVE ACCOUNTS (other than reserve
for bonus) of Federal associations, required transfers to, Fed. Charter E, Sec.
7; Fed. Charter K, Sec. 9; Fed. Reg. 33,
46; Ins. Reg. 11 (a), 11 (c).
A Federal association operating under
Charter E must transfer at each dividend
date to its reserve account an amount
March 1937




equivalent to 5 percent of the earnings for
that period after provision for expenses,
until said reserve account is equal to 5 percent of the total amount paid in on its
shares (including credited dividends), and
if at any time said reserve account is below
said 5 percent such credits shall thereafter
be made until such account is brought back
to said 5 percent. Unless it has designated
its charter reserve as its Federal insurance
reserve account, such association must also
during each calendar year credit to its Federal insurance reserve account an amount
equal to at least three-tenths of 1 percent of
the aggregate of its insured accounts at the
beginning of such calendar year. Such
credit shall be made until such reserve account shall equal an amount at least 5 percent of all insured accounts, and if at any
time said reserve account is below said 5
percent annual credits shall thereafter be
made until said reserve account is brought
back to said 5 percent. Any such association
which has so designated its charter reserve
as its Federal insurance reserve account,
must transfer to such reserve account during each calendar year, an amount equal
to at least three-tenths of 1 percent of the
aggregate of its insured accounts at the
beginning of such calendar year, or credit
thereto at each dividend date an amount
equal to at least 5 percent of the earnings for
that period (after provision for expenses),
whichever is greater. Such credits shall
be made until such reserve account shall
equal an amount at least 5 percent of all
insured accounts or 5 percent of the total
amount paid in on its shares (including
credited dividends), whichever amount
shall be the greater, and if at any time said
reserve account is below such greater
amount, such annual credits shall thereafter be made until such account is brought
back to such greater amount.
A Federal association operating under
Charter K must maintain the Federal insurance reserve account by sufficient credits
on each dividend date, and, if and whenever its aggregate reserves, including the
195

Federal insurance reserve but excluding
bonus reserve, are not equal to 10 percent
of its share capital, shall transfer, at each
dividend date, to reserves (other than bonus
reserve) a credit equivalent to at least 5
percent of its net earnings for that period
or three-twentieths of 1 percent of the aggregate of its insured accounts at the beginning
of such calendar year, whichever amount is
greater.
Every Federal association shall maintain
a reserve for uncollected interest equivalent to all interest in default more than 90
days and interest on all loans shall be accrued monthly. The Board may require
that a special reserve be set up equal to
the depreciation in value of the assets of a
Federal association. See A-B-C Book,
C-148, dated February 19, 1937.
MORTGAGE LOANS—Prepayment of, Fed.
Charter E, Sec. 12; Fed. Charter K,
Sec. 14; Fed. Reg. Sec. 40.
1. Under Section 12 of Charter E, a borrower is given a right to pay off his loan
before maturity in whole, but not in part,
in which event the association is privileged
to charge interest on the unpaid balance
before such prepayment, not exceeding 90
days beyond the date of such prepayment.
Such an association may waive the collection of such penalty interest. Neither the
charter nor the rules and regulations require that the loan contract make provision
for charging such penalty interest. Charter
E is silent with respect to the right of a
borrower to make a partial prepayment of
a loan. Such subject is, therefore, controlled solely by the principles of contract
law, i. e., any such association may accept
from borrowers partial prepayments on account of their loans upon such terms as it
negotiates with such borrowers.
2. A borrower from an association operating under Charter K has a right under
Section 14 thereof to make prepayments on
account of his loan which prepayments prepay the loan in whole or in part. Such prepayments may be made without penalty
196




except that when any such prepayment of
all or any part of a loan equals or exceeds
20 percent of the original principal amount
of the loan, such association is privileged
under said Section 14 to charge interest in
an amount equal to not more than 50 days'
interest on the amount of such prepayment; provided, however, such loan contract makes provision for charging such
penalty interest. However, such association may waive the collection of such penalty interest.
3. If an association operating under
either Charter E or Charter K incorporates
into a loan contract a provision whereby
the stipulated rate of interest may be increased three years or more after date of the
loan on at least four months' written notice
to the borrower, the loan contract shall also
contain a provision that in the event of such
an increase in the stipulated rate of interest, the borrower may prepay the loan
within such notice period without the payment of any additional interest or any other
penalty. (Full text of opinion, A-B-C
Book, C-149, dated February 17, 1937.)
CHARTER E—Disposition after amendment by Charter K. Fed. Charter K,
Sec. 6.
A Federal association which has obtained
Charter K as an amendment to Charter E
should retain the original Charter E issued
to it because Section 6 of Charter K requires that outstanding share accounts created under Charter E shall continue to be
known and treated as provided in Charter
E until exchanged for investment or savings
share accounts. See A-B-C Book, C-151,
dated January 16,1937. The Board has informally indicated that it did not desire the
surrender of Charter E to it. The Governor recommends that each such association
make a notation on Charter E : "This charter has been amended by the issuance of
Charter No.
(Exhibit K of the Rules
and Regulations for Federal Savings and
Loan Associations) by the Federal Home
Loan Bank Board on
19
"
Federal Home Loan Bank

Review

VOTING RIGHTS OF MEMBERS—Proxies
(Limitation) Fed. Charter E, Sec. 4;
Fed. Charter K, Sec. 4.
Members of association operating under
Charter K may vote by proxy as they may
vote in person. The use of proxies by
members of associations operating under
Charter E is limited by Section 4 of such
Charter, so that no one individual, acting
as proxy for one or more members, may

cast more than 10 percent of the total vote
eligible to be cast in the election. The
granting of a proxy to vote under Charter
K is not limited by any rules other than
those of the Common Law affecting the
granting of powers of attorney generally.
A proxy, as any other power of attorney, is
revocable by the maker at will. See A-R-C
Rook, C-150, dated January 8, 1937.

Schenectady Plan

The city now plans to make good use of
them. As the Mohawk River constitutes the
western boundary of the city, the possession of these plots by the Authority will
set up a municipal land reserve in an almost
continuous belt about the city. Thus the
Authority will be in a position, working
with the City Planning Commission, to direct scientifically the future growth of the
city.
In a recent article, Mr. Miles R. Frisbie,
Executive Director of the Schenectady Municipal Housing Authority, and Mr. F. W.
Fisch, its Chief Engineer, emphasize the
timeliness of present-day city planning as
follows:
"To this Authority it seems that the new
laws, making possible this accumulation of
municipal lands in the hands of housing
authorities, offers an opportunity of significant potentialities for municipal planning and city rehabilitation."
In view of the steadying effect of rational
planning on mortgage investments, the effort Schenectady is making will be of keen
interest to savings and loan associations.
Ry providing a real property survey and
other statistical information, the city helps
financing institutions ascertain true mortgage risk; by guarding residential values
through reconstruction it measurably
lessens mortgage risk.

(Continued from page 184)

time land program can be executed. The
city obtains these properties by foreclosing
delinquent tax liens and acquiring a valid
court title to them. Negotiations are being
made for the Housing Authority to take
over these foreclosed properties. These
properties are located principally in two
sections: the blighted areas on the edge of
slums, and the improved but uninhabited
areas on the outskirts of the city.
Replanning for residences will start in
the blighted areas. These areas are fortunately located; the blighting effect is produced by the proximity of slums and the
age of the houses, most of which are frame.
With the removal of the slum menace the
incentive to further blight will be partially
eliminated. The Authority, with the assistance of the projected long-term Federal
and State programs, proposes to clear these
areas gradually, to replan them, and make
them available for private rebuilding. It
is felt that once they are cleared and replanned private capital will flow into their
reconstruction.
Out of the total of 4,096 parcels of land
subject to foreclosure, 3,955 are located in
six periphery wards. These are parcels
which were improved at the cost of the
taxpayer but which were never occupied.

197

March 1937
127333—37




(Continued on page 215)

3

Indexes of Small-House Building Costs
have been principally due to materials
costs. Labor costs rose in only 5 out of the
23 cities.
The largest increase of 9.4 percent, or 1.9
cents per cubic foot, was reported by Philadelphia, Pennsylvania. Memphis, Tennessee, reported an increase of 7.3 percent;
San Diego, California, of 6.7 percent; and
San Antonio, Texas, of 6.3 percent.
Comparing costs for February between
cities we find the highest costs reported by

B

ETWEEN November 1936 and February 1937 the costs of building the same
typical 6-room house increased in all but
1 of the 23 cities making comparable reports for the two periods. Reports from 1
city showed no change in building costs;
reports from 2 cities showed increases of
less than 1 percent; and reports from the
remaining 20 cities showed increases of
more than 1 percent. These general, and
in some cases drastic, increases in costs

Total costs and cubic-foot costs of building the same standard house in representative cities in specific months ]
NOTE.—These figures are subject to correction.
[Source: Federal Home Loan Bank Board]

Total building cost
Federal Home Loan Bank Districts, States, and cities

1937

1936

Febru- Novem- August
ary
ber
No. 3—Pittsburgh:
Delaware:
Wilmington. ,
Pennsylvania:
Harrisburg..
Philadelphia.
Pittsburgh. .
West Virginia:
Charleston..
Wheeling

Cubic-foot cost

May

1937

1936

Febru- Febru- Novem- August
ary
ber
ary

May

February

$5,406 $5, 258 $5, 259 $5, 290 $5, 213 $0. 225 $0. 219 $0. 219 $0. 220 $0. 217
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

.236
.228
.257

.225
.209
.247

.225
.205
.226

.227
.203
.225

.224
.191
.228

5,696
5,846

5,696
5,763

5,564

5,477

5,476

.237
.244

.237
.240

.232

.228

.228

i The house on which costs are reported is a detached 6-room home of 24,000 cubic-feet volume. Living room, dining room, kitchen, and
lavatory on first floor; 3 bedrooms and bath on second floor. Exterior is wide-board siding with brick and stucco as features of design. Best quality
materials and workmanship are used throughout.
The house is not completed ready for occupancy. I t includes all fundamental structural elements, an attached 1-car garage, an unfinished cellar,
an unfinished attic, a fireplace, essential heating, plumbing, and electric wiring equipment, and complete insulation. I t does not include wall-paper
nor other wall nor ceiling finish on interior plastered surfaces, lighting fixtures, refngerators, 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.

198




Federal Home Loan Bank

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reported a total cost of $5,267 and Memphis
of $5,462.
Special attention is called to the description of the standard house on which costs
are obtained, appearing as a footnote to
the accompanying table. It should be emphasized that the costs reported do not
represent the cost of building a completed
house in any of the cities. The purpose of
the reports is rather to give a true picture
of movements of costs within each city and
a reliable comparison of costs among all
reporting cities.

Reno, Nevada, with $6,360, or 26.5 cents per
cubic foot. San Francisco was second with
$6,319. Both Cleveland and Columbus in
Ohio, as well as Pittsburgh, Pennsylvania,
reported costs in excess of $6,000.
Lowest costs were reported by Little
Rock, Arkansas, with $5,195, or 21.6 cents
per cubic foot. Although showing an increase in cost over the previous period of 3
percent and 7 percent respectively, Nashville and Memphis, Tennessee, were still
among the cities of lowest costs. Nashville

Total costs and cubic-foot costs of building the same standard house in representative cities in specific

months—Continued
Total building cost
Federal Home Loan Bank Districts, States, and cities

1937

1936

Febru- Novem- August
ary
ber
No. 5—Cincinnati:
Ohio:
Cleveland
Columbus
Tennessee:
Nashville
No. 9—Little Rock:
Arkansas:
Little Rock
Louisiana:
New Orleans
Shreveport
Mississippi:
New Mexico:
AlbuouerQue
Texas:
Dallas
San Antonio
No. 12—Los Angeles:
Arizona:
California:

Nevada:

March 1937




Cubic-foot cost
1937

1936

Febru- Febru- Novemary
ary
ber August

May

February

$5,849 $5, 748 $5, 932 $5, 827 $5, 809 $0. 244 $0. 239 $0. 247 $0. 243
6,163 6,056 6,008 5,990 5,843
.257
.252
.250
.250
6,052 5,778 5,850 5,529 5,522
.252
.241
.244
.230

$0.242
.243
.230

May

5,462
5,267

5,092
5,094

5,080
5,096

5,120
5,089

4,841
5,030

.228
.219

.212
.212

.212
.212

.213
.212

.202
.210

5,195

5,136

5,202

5,215

5,215

.216

.214

.217

.217

.217

5,601
5,468

5,395

5,124

5,075

5,075

.233
.228

.225

.214

.211

.215

5,607

5,412

5,365

5,333

5,319

.234

.225

.224

.222

.222

5,948

5,827

5,779

5,625

5,625

.248

.243

.241

.234

.234

5,968
5,893
5,884

5,641
5,759
5,538

5,641
5,759
5,532

5,618
5,883
5,532

5,464

.249
.246
.245

.235
.240
.231

.235
.240
.231

.234
.245
.231

.228

5,885

5,843

6,032

6,112

6,044

.245

.243

.251

.255

.252

5,800
5,698
6,319

5,489
5,338
6,222

5,301
5,177
6,151

5,239
5,198
6,017

5,316
5,225

.242
.237
.263

.229
.222
.259

.221
.216
.256

.218
.217
.251

.221
.218

j 6, 360

6,354

6,313

6,324

6, 097

.265

.265

.263

.263

.254

199

Monthly Lending Activity of Savings
and Loan Associations

D

Districts the number and volume of loans
and the purposes for which they were
made. For the United States as a whole,
the reporting associations made mortgage
loans on 1- to 4-family nonfarm homes to
11,256 borrowers in the amount of $27,419,700. In January the largest proportion
of these loans was made for the purchase
of homes. Of the total volume, 35.2 percent went for this purpose. New construction accounted for 32.2 percent, refinancing
for 26.9 percent, and reconditioning for 5.9
percent.

URING January, 2,491 savings and
loan associations reported total new
loans made for all purposes of $30,561,100.
These associations represented every State
except Nevada, as well as Hawaii and the
District of Columbia. The number of reporting associations actually making loans
during the month was 1,928. The combined assets of all associations (for the
most part as of January 31, 1937) were
$2,417,064,400.
The accompanying table breaks down by
States and by Federal Home Loan Bank

Monthly lending activity and total assets as reported by 2,U91 savings and loan associations in January 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 January according to purpose
Mortgage loans on 1- to 4-family nonfarm homes
Number of 1
associates
Federal Home Loan
Bank Districts and
States

Construction

Home purchase

1

Refinancing and
reconditioning *

Loans for all
other
purposes

Total loans,
all purposes

Amount
Sub- Reporting
Nummitting loans
ber
reports made
2,491

UNITED STATES . . . .

Amount Number Amount

Number

Total
assets
Jan. 31,
1937'

Recon- NumReNum- Amount
financing ditionber Amount ber
ing

1,928 2,796 $8,828.4 3,699 $9,663.8 4,761 $7,370.7 $1,556.8 2,425 $3,141.4 13,681 $30,561.1 $2,417,064.4

138

121

173

731.0

240

733.0

362

590.1

139.5

183

226.3

958

2,419.9

252,918.6

Massachusetts...
New Hampshire.
Rhode Island. . .

29
21
68
11
5
4

25
13
64
11
4
4

52
9
82
6
18
6

195.0
21.3
425.5
13.3
64.5
11.4

18
21
132
20
40
9

63.1
61.0
444.7
28.8
115.3
20.1

55
42
201
17
35
12

139.6
60.3
267.3
22.3
65.9
34.7

8.3
7.1
104.5
3.7
8.8
7.1

6
20
99
22
30
6

13.0
11.1
131.1
36.3
25.4
9.4

131
92
514
65
123
33

419.0
160.8
1,373.1
104.4
279.9
„ 82.7

23,722.9
12,245.5
175,088.2
13,457.2
25,319.6
3,085.2

No. 2—New Y o r k . . .

272

170

199

717.7

203

718.5

252

528.3

9oT8

128

115.7

782

2,177.0

353,347.3

138
134

61
109

18
181

131.1
587.4

48
204

130.4
397.9

13.7
83.1

20
108

13.5
102.2

125
657

352.8
1,824.2

132,872.8
220,474.5

235

131

70

64.1
39
653.6 j 164
179.9 200

512.2

136

246.6

68.0

66

58.6

472

1,065.3

99,449.5

7
208
20

6
108
17

3
48
19

4.4
140.7
34.8

11
176
13

35.0
434.3
42.9

4
102
30

8.5
192.5
45.6

0.8
56.2
11.0

12
39
15

6.8 1
40.6 j
11.2 !

30
365
77

55.5
864.3
145.5

6,134.0
83,093.8
10,221.7

No. 1—Boston

No. 3—Pittsburgh...
!
Pennsylvania....
West^Virginia. ..

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.
« . . - .
»
j
m
s
Because many refinancing loans also involve reconditioning it has been found necessary to combine the number of such loans, though amounts
are shown separately.
,
, ,
•
J I _ L
. . . .
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.
» Assets are reported principally as of Jan. 31, 1937.

200




Federal Home Loan Bank

Review

Monthly lending activity and total assets as reported by 2,491 savings and loan associations in January
1937—Continued
[Source: Monthly reports from savings and loan associations to the Federal Home Loan Bank Board]
Loans made in January according to purpose
Mortgage loans on 1- to 4-family nonfarm homes
Number of
associates
] federal Home Loan
Bank Districts and
States

Construction

Alabama
District of Columbia
Florida
North Carolina..
South Carolina .
No. 5—Cincinnati. . .
Ohio
No. 6—Indianapolis..

No. 7—Chicago

Loans for all
other
purposes

Refinancing and
reconditioning

Total loans,
all purposes

Amount
Sub- ReportNuming
mitting loans
ber
reports made

No. 4—Winston-

Home purchase

1

Amount Number Amount

484 $1,535.6

541 $1,720.1

Number

Recon- NumReNumfinancing dition- ber Amount ber
ing

641 $1,043.5 $176.5

287

Total
assets
Jan. 31,
1937

Amount

$323.2 1,953 $4,798.9 $218,981.7

250

213

15

11

15

21.3

8

16.4

22

22.7

5.7

9

11.3

54

77.4

4,168.7

12
46
41!
39
40
32
25

12
43
38
22
37
29
21

80
116
63
29
86
61
34

418.9
460.8
112.7
117.5
186.9
140.9
76.6

181
50
63
67
87
44
41

878.1
178.2
111.3
200.1
167.7
96.7
71.6

103
81
120
44
127
72
72

299.0
136.2
178.9
86.5
141.4
83.3
95.5

29.6
26.0
12.9
11.2
54.9
11.0
25.2

74
41
32
12
77
16
26

41.3
111.7
22.4
15.3
72.7
20.1
28.4

438
288
278
152
377
193
173

1,666.9
912.9
438.2
430.6
623.6
352.0
297.3

103,286.3
19 534 5
12,700.0
29,121.5
24,636.5
8,868.1
16,666.1

358

277

359

1,138.5

717

1,992.3

782 1,176.4

367.2

317

429.6 2,175

5,104.0

469,781.7

50
275
33

33
212
32

38
229
92

108.8
843.4
186.3

40
648
29

115.3
1,816.5
60.5

92
554
136

147.1
852.4
176.9

31.8
271.8
63.6

23
274
20

28.5
193
370.3 1,705
30.8
277

431.5
4,154.4
518.1

32,418.4
423,635.0
13,728.3

149

129

171

514.6

310

543.8

474

518.3

108.8

195

237.8 1,150

1,923.3

187,663.0

100
49

89
40
192

74
97

146.8
367.8

372.4
171.4

303
171

326.1
192.2

81.0
27.8

137
58

138.5
99.3

749
401

1,064.8
858.5

104,953.4
82,709.6

116

298.3

235
75
266

745.6

470

916.3

134.5

199

306.3 1,051

2,401.0

176,949.0

230
36

630.3
115.3

390
80

801.3
115.0

107.4
27.1

139
60

232.7
73.6

820
231

1,958.1
442.9

133 053 5
43,895.5

253
190
63

143
49

61
55

186.4
111.9

179

135

146

480.6

148

317.8

308

463.4

86.1

196

304.4

798

1,652.3

115,642.2

North Dakota...
South D a k o t a . . .

46
46
68
14
5

39
34
51
3

22
49
71
1
3

65.1
165.1
245.8
1.8
2.8

62.2
87.0
146.3
18.3
4.0

55
123
116
10
4

55.7
197.7
196.9
10.3
2.8

15.8
31
29
40.9
25.3 121
3.3 1 11
4
0.8

35.1
182.8
68.8
16.1
1.6

153
232
367
33
13

233.9
673.5
683.1
49.8
12.0

20,481.4
27,926.1
58,659.1
7,139.5
1,436.1

No. 9—Little Rock...

250

202

272

722.5

45
31
59
11
2
320

626.4

358

458.5

148.6

230

289.2 1,180

2,245.2

138,119.3

34
51
21
9
87

21
59
19

New Mexico
Texas

38
66
26
12
108

37
113
18
10
142

53.0
291.8
25.8
13.0
242.8

58
71
34
20
175

38.1
128.9
35.5
29.1
226.9

23.6
48.4
5.3
5.1
66.2

44
66
205

168

48.3
166.3
24.0
13.9
470.0

45.8
115.8
21.8
7.9
97.9

360
309
91
40
580

208.8
751.2
112.4
69.0
1,103.8

9,179.6
67,234.4
4,421.3
3,008.2
54,275.8

No. 10—Topeka

173

144

142

385.1

274

600.5

305

372.3

86.2

292

383.3 1,013

1,827.4

147,478.6

Kansas

28
67
30
48

22
54
23
45

115.4
123.2
58.7
87.8

30
85
46
113

74.9
154.6
123.4
247.6

44
94
67
100

55.6
127.5
69.6 !
119.6

8.2
31.0
18.9
28.1

15
91
88
98

12.9
116.3
103.7
150.4

122
320
224
347

267.0
552.6
374.3
633.5

10,625.3
49,876.9
38,783.4
48,193.0

109 J

98

164

343.3

183

358.3

339

479.6

69.3

152

214.8

838

1,465.3

67,012.6

8
12
23

8
10
19

115
15

16.5
34.8
27.4
11.2
234.5
33.9

35
17
55
23
200
9

59.3
8.3
87.1
33.6
280.3
11.0

6.3
16.2
7.7
1.4
37.0
0.7

30
12

45
9

27.2
24.5
46.2
37.9
185.9
21.6

9
20
19

47
11

2
92
9

21.3
17.7
11.0
1.1
144.0
19.7

91
65
105
41
495
41

130.6
101.5
179.4
85.2
881.7
86.9

4,656.2
9,400.1
7 580 2
6 813 6
34,958.6
3,603.9

125

116

17
16
24
11
88
8
500

1,781.3

297

795.3

334

577.4

75.3

180

252.2 1,311

3,481.5

189,720.9

2
122

2
113

9
484

4
287

7

4.8
562.1
0.0
10.5

1.5
72.3
0.0
1.5

o

1

10.4
763.2
0.0
21.7

3
329

1

40.2
1,714.5
0.0
26.6

0.0
16
252.2 1,280
0.0
o
0.0
15

56.9
3,364.3
0.0
60.3

1,011.4
188,325.8
0.0
383 7

Illinois
No. 8—Des Moines..
Iowa
Minnesota

No. 11—Portland....
Idaho
Oregon
Utah

No. 12—Los Angeles.

Hawaii

March 1937




33 |
50
23
36

o
6

2

95

J_

1800
0

201

Residential Construction Activity and
Real-Estate Conditions

T

HE index of residential construction
as measured by building permits
granted in all cities of 10,000 and more
population decreased between December
1936 and January 1937 from 38 percent
to 30 percent of the 1926 base of 100. These
figures have been adjusted for seasonal
variation. The adjusted index for January
1936 was 21 percent (chart 2).
In January 1937 the estimated number
of family dwelling units authorized in
these cities was 10,036, involving an estimated cost of $38,417,700. These figures
represent an increase over January 1936 of
42 percent in the number of units and 24
percent in the estimated cost.
During January there was a large increase in the proportion of 1-family and

2-family dwellings authorized as compared
to December 1936 and January 1936. Buildings containing one or two families accounted for 72 percent of the total number
authorized and for 78 percent of the total
cost. In December, 37 percent of the total
number were multifamily dwellings and
in January 1936, 42 percent.
FORECLOSURES AND OTHER REAL-ESTATE
CONDITIONS
CHART 2 pictures the movement of residential construction, industrial production,
real-estate foreclosures, and housing rentals. The first two are adjusted for seasonal variation. All of these activities are
shown in comparison to a base line of 100
for the year 1926. The accompanying brief

CHART I.—NUMBER AND COST OF FAMILY DWELLING UNITS FOR WHICH PERMITS WERE GRANTED, BY MONTHS. IN CITIES
OF 10,000 OR MORE POPULATION; 1937 COMPARED WITH SELECTED PERIODS
{Source: Federal Home Loan Bank Board. Compiled from residential building permitsreported to U. S. Department of Labor]
NUMBER OF UNITS PROVIDED

COST OF UNITS PROVIDED

!£ 16
80.000

( /
1936

"7H'
-

/

60.000

/

f
%

j

/

\s

f

/
../

/ ' • •

•

•

n.—

30.000

5 A VG.
i r

~J,

... ——-

***«»,, N
10.000

202




/
.

7

50.000

/

*

/

60.000

40.000

a.? / - i 5

/

A /£

30.000

*''

^
~ i

^

— /
/

Federal Home Loan Bank

20.000
10.000

Review

BUILDING ACTIVITY BY FEDERAL HOME LOAN
BANK DISTRICTS AND STATES

2 shows that the States of New York
and California continue to authorize a
greater volume of building activity than
any other States. The former authorized
2,495 family dwelling units, a majority of
which are of the multifamily type; and the
latter 2,177 units, which are principally
1- or 2-family dwellings. They both show
a 62-percent increase in number over the
same month a year ago.
TABLE

Dec. 1936

Jan. 1936

Rentals
Foreclosures

30
107
81
221

Percent
change

Residential construction..

38 - 2 1
112 - 4
81
0
268 - 1 8

21
91
73
287

Percent
change

[1926=100]
Jan. 1937

table gives the story of the charts in percentages of this base.
The preliminary index of foreclosures in
78 large urban counties reached its lowest
point since early 1930 by declining from 268
in December to 221 in January. The decline
was due principally to sharp decreases in
the large cities of the New England and
Middle Atlantic States, which have been
responsible for the eratic fluctuations in
the index during recent months.
This decline of 18 percent compares with
a normal seasonal decline of 4 percent in
January. The index for January 1937 was
23 percent below the index for January
1936 when the index stood at 287.
Out of 77 counties which reported for
January, 29 reported increases over December, 45 reported declines, and in 3 cities
the number was unchanged. Twenty-three
cities reported increases in January 1937
over January 1936 while 54 reported
declines.

+43
+ 18
+ 11
— 23

CHART 2.—COMPARISON OF RESIDENTIAL REAL-ESTATE CONDITIONS AND INDUSTRIAL PRODUCTION IN THE UNITED STATES
(1926=100)
1

11

RE! IDEN' riAL <SONS!,
(NUM BER OF FAMILY DWEL RUCT ION
ADJU STEOt

460

REAL ESTATE FORECLOSURES 1
IN

1

SEVENTY-EIGHT LARGE URBAN COUNTIES

LING W ITS)

r

i

|i»

\
\

N

1

V

300

250

200

150

100

11926

»)

C E - F E O •RAL HO I E LOAN IANK BOi RO
( H I DERT. 0 F LABOR RECORD

1927

1928

1929

1930

1991

INDUST

w

ft

Sj

. /

SOUI C E - F E O

1927

A041

STCD

AV

1933

1934

1935

1936

1937

March 1937



1929

1927

1928

1929

1930

1931

1932

1933

1934

1935

1936

1937

1

HOU SING RENT ALS

N
UCTIO

>\
\

A J

/

rV

A /

V

SOU! C E - - N A T ONAL IN USTRIAL C O N F E I ENCE BO I R D (CON VERTED

RAL RE ERVE B ARD (CO V E R T E 0 TO I 9 t « BASE)

1928

1926

CE.- FEDERAL HOME LOAN RANK BOARD (COUNTY REPX RTS)

,/

\

1926

1932

1
RIAL PROD

"

r^

soui

1930

1931

1933

1334

I9M

1938

1937

1927

1928

1929

1930

1932

1933

o i t z t a ASE)

1934

1935

1936

203

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 January 1937l

[Source: Federal Home Loan Bank Board. Compiled from residential building permits reported to U. S. Department of Labor]

Number of family units
provided

Total cost of units (000 omitted)

Average cost of family
units

Type of structure
January January Percent
change
1937
1936
All housekeeping dwellings.... 10, 036
Total 1- and 2-family dwell7,176
ings
6,447
1-family dwellings
642
2-family dwellings
2
87
Joint home and business
3-and more-family dwellings . 2,860

7,063

January
1936

January
1937

+ 4 2 . 1 $38, 417. 7 $30, 953. 9

4,121 + 74.1
3,762 + 71.4
324 + 98.1
35 + 148.6
2,942
-2.8

30,150. 8
28, 343. 7
1, 501. 3
305.8
8, 266. 9

Percent January January Percent
change
1937
1936
change
+ 24.1

$3, 828

$4, 383

-12.7

17, 073. 6 + 76.6
16, 065. 5 + 76.4
889.3 + 68.8
118.8 + 157.4
13, 880. 3 - 4 0 . 4

4,202
4,396
2,338
3,515
2,891

4,143
4,271
2,745
3,394
4,718

+ 1.4
+ 2.9
— 14.8
+ 3.6
-38.7

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 January 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 dwellin gs

All 1- and 2-family dwellings

of family Estimated cost (thou- Number of family Estimated cost (thouFederal Home Loan Bank Districts Number
dwelling units
sands of dollars)
dwelling units
sands of dollars)
and States
January January
1937
1936
UNITED STATES

10, 036

January
1937

January
1936

7,063 $38, 417. 7 $30, 953. 9

January January
1936
1937
7,176

January
1937

January
1936

4,121 $30,150. 8 $17, 073. 6

686

208

3, 221. 6

1, 210.1

513

204

2, 773. 6

1, 203. 4

114
24
479
15
54
0

61
3
114
4
26
0

654.0
61.5
2, 265. 5
43.7
196.9
0.0

349.8
7.1
762.6
5.0
85.6
0.0

114
16
317
15
51
0

61
3
110
4
26
0

654.0
47.5
1, 838. 5
43.7
189.9
0.0

349.8
7.1
755.9
5.0
85.6
0.0

2,682

1,747

9, 791. 2

7,183. 0

926

430

4, 408. 2

2,135. 0

187
2,495

98
1,649

1, 277. 6
8, 513. 6

629.8
6, 553. 2

176
750

98
332

1, 234. 6
3,173. 6

629.8
1, 505. 2

No. 3—Pittsburgh

454

186

2, 230. 7

1, 402. 5

406

182

2,105. 6

1, 398. 5

Delaware

16
399
39

0
168
18

111.4
1, 933. 3
186.0

0.0
1, 337. 9
64.6

16
362
28

0
168
14

111.4
1, 859. 9
134.3

0 0
1, 337. 9
60 6

1,466

859

4, 444. 2

2, 768. 2

1,094

614

3, 632. 4

2,168. 9

85
404
422
90
154

35
347
253
33
43

134.5
1, 321. 8
1, 334. 5
211.4
528.4

47.6
1, 293.4
784.8
110.2
147.1

85
96
403
90
154

35
110
249
33
43

134.5
629.7
1, 298. 8
211.4
528.4

47 6
712 4
770 5
110 2
147.1

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

West Virginia
No. 4—Winston-Salem
Alabama
District of Columbia
Florida
Georgia.

204



Federal Home Loan Bank Review

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

TABLE

All 1- and 2-family dwellings

All residential dwellings

of family Estimated cost (thou- Number of family Estimated cost (thouFederal Home Loan Bank Districts Number
sands of dollars)
dwelling units
sands of dollars)
dwelling units
and States
January January
1936
1937

January
1937

January
1936

January January
1936
1937

January
1937

January
1936

N o . 4.—Winston-Salem—Contd.
North Carolina
South Carolina
Virginia

136
63
112

56
49
43

, $398. 2
131.1
384.3

$137.1
117.1
130. 9

128
44
94

52
49
43

$387.6
102.5
339.5

$133.1
117.1
130.9

No. 5—Cincinnati

379

1,225

1,987.6

8,373.3

347

179

1,871.1

939.3

Tennessee

25
263
91

33
1,149
43

100.0
1,675.5
212.1

110.0
8,187. 6
75.7

25
235
87

27
109
43

100.0
1, 564. 4
206.7

99.0
764.6
75.7

No. 6—Indianapolis

495

177

2, 708. 2

989.1

492

177

2, 706. 8

989.1

69
426

22
155

290.0
2, 418. 2

77.3
911.8

66
426

22
155

288.6
2, 418. 2

77.3
911.8

307

80

1, 792. 6

408.8

250

80

1, 594. 9

408.8

Illinois
Wisconsin

228
79

28
52

1, 446. 7
345.9

183.2
225.6

184
66

28
52

1, 275. 6
319.3

183.2
225.6

No. 8—Des Moines
Iowa
Minnesota
Missouri
North Dakota
South Dakota

183
27
59
94
0
3

160
19
36
103
0
2

774.2
153.2
255.2
359.7
0.0
6.1

675.3
74.0
185.4
409.6
0.0
6.3

168
27
44
94
0
3

152
11
36
103
0
2

721.4
153.2
202.4
359.7
0.0
6.1

647.3
46.0
185.4
409.6
0.0
6.3

No. 9—Little Rock
Arkansas
Louisiana
Mississippi
New Mexico
Texas

827
16
127 1
126
32
526

2, 014. 4
723
47.9
19
420.3
40 i
124. 7
8
14
92.4
642
1, 329.1

1, 885. 8
78.6
101.1
40.0
48.4
1, 617. 7 1

795
16
127
119
32
501

651
19
36
8
14
574

185
36
26
8
115

756. 8
158. 4
116. 6
38.0
443. 8

664. 0
182. 9
90.8
30.2
360.1

193
39
29
5
120

181
32
26
8
115

747. 8
158. 4
107. 6
38.0
443. 8

662. 0
180. 9
90.8
30.2
360.1

141 1
11 1
18
37

531.3 1
8.3

449.7 1

142 1

126 1

517.3 J
3.3
2.0
274. 4
20.9
193. 7
23.0

427.4

Kentucky *

Ohio

Indiana
Michigan
No. 7—Chicago

No. 10—Topeka
Colorado
Kansas
Nebraska
Oklahoma

1

197

1

39
33
5
120

No. 11—Portland
Idaho
Montana
Oregon

1

153

Utah
Washington
Wyoming
No. 12—Los Angeles
Arizona
California
Nevada
1

6
2
74
8

59
4

66
2

2, 207
30
2,177
0

1, 372
14
1, 357
1

2.0
280. 4
20.9
196. 7
23.0 |

27.4
29.0
146. 4
22.4
214. 7
9.8

3
2
70
8

55
4

8, 164. 9 1 4, 944.1 1 1,850
35.7
102. 8
27
1, 823
8, 062.1
4, 903. 4
0
5.0
0.0

11 1
14
37
7
55
2

1, 925. 8
1, 736. 3
47.9
78.6
420.3
91.9
40.0
116.1
48.4
92.4
1, 249.1 1 1, 477. 4

27.4
23.0
146. 4
22.4
198. 4
9.8

1,145 1 7,145. 9 1 4, 357. 6
14
35.7
94.3
1,130
7, 051. 6
4, 316. 9
5.0
1
0.0

January 1937 estimated for Kentucky.

March 1937




205

CHART 3 . — R A T E OF R E S I D E N T I A L B U I L D I N G I N T H E U N I T E D STATES A N D I N EACH FEDERAL HOME LOAN BANK D I S T R I C T ,
BY MONTHS

Represents the estimated number of family dwelling units provided per 100,000 populution; based upon building permit
records for all cities of 10,000 or more inhabitants
[Source: Federal Home Loan Bank Board. Compiled from reports to U. S. Department of Labor]
01STR1CT \- BOSTON

DISTRICT 2 -NEW YORK

OISTRICT 3-PITTSBURGH

DISTRICT 4-WINSTON SALEM

TH
l _ r ^

fl937

k.

^

1931-35 AV&-^~~'\
^-1931-35 AVG

TBTTiTilTBT
DISTRICT 5-CINCINNATI

TITTTTTSTnT

innnTiiTi

UTOTiTUTI

DISTRICT 7 -CHICAGO

DISTRICT 8-OES MOINES

DISTRICT 6-INDIANAPOUS

60
50
40
CO

30 z
*-l936

V

20
10

—-*" "*

<

*~-/93/-35~AVG~'

L_.

TiTTilTiTglg
DISTRICT 9 - U T T L E ROCK

DISTRICT IQ-TOPEKA

DISTRICT 11-PORTLAND

i m

H43B&S8

0

DISTRICT 12-LOS ANGELES
S~/93G 1

60

\(I937

50

40

«

30 z

rO.
-r-v"

L—r~ L^_

'-\1931-35 AVG'

irrnnnnis

206



20

I jf -_J
\93f-35

\rf93?

AVG

n

~-

10

-^tip^^z

^/93/-35 AVG. l " " L -

FsirnnTiTi
UNITED

I B H I343BS88

IBiii343B8&8

STATES

Federal Home Loan Bank Review

Chart 3 compares graphically the rate of
building (as distinguished from volume of
building) among Federal Home Loan Bank
Districts. This chart has been revised
somewhat from that presented in previous
issues of the REVIEW. It now shows for
each Bank District the rate of building
during the current year, the rate during
1936, and the 1931-35 average rate. The
United States average, instead of being included in the chart for each District, is

shown separately and has been extended to
show the monthly rate of building since the
beginning of 1930. This revised chart
should be increasingly useful as the trend
of construction over a long period of time
is at once evident.
For the first month of 1937, Los Angeles
was far in the lead with 52 units per 100,000
population. Winston-Salem was second
with 29 units, Little Rock third with 25
units, and New York fourth with 20 units.

The Mail Bag

insurance companies, trust companies, and
generally the mortgage lenders as a group.
It seems quite clear to me that a sound and
simple organization of property owners in
a given neighborhood area whose program
is designed to reach the conditions which
collectively effect values would provide a
basis for membership and support that
would reach the sound economic incentives
of such mortgage owners.
Such an organization to be worthy of
such support implies among other things,
a full-time central office in the district with
some individual of intelligence and understanding to provide a clearance point for
receiving and handling the concerns of the
district about itself. The program would
include performance of the public services,
administration of zoning, health, police,
fire, vice, street-cleaning, ash and garbage
removal, parkway planting and the like, efforts at demolition, vacant lot care, recreational facilities, and generally to do what
might be, or could be done, if the individual
were a sort of city manager, or were an
agent of a single property owner who
owned the entire territory.
Merely stating the need, and pointing out
the degradation which is constantly going
on without implementing the program is
helpful, but does not influence.
Will your Journal undertake to do this
job?

T

HE following letter has been received
by the editor of the REVIEW from Mr.
G. O. Fairweather, Assistant Treasurer of
The University of Chicago.
Dear Sir:
The REVIEW contains articles of great interest and significance, particularly those
relating to neighborhood conditions and
the effect upon the value of a piece of
property due to the manner in which these
conditions are controlled.
We are trying to put into effect here in
a number of neighborhoods, local organizations of property owners who will undertake as best they can among themselves and
in cooperation with the public authorities
to provide that type of control. The purpose is to see why blight sets in and what
can be done to control it, and to determine
what the actual relations are between blight
and the responsibilities of the public authorities and of the property owners.
As your articles point out, the interest
of the property owner in this subject is
identical with the interest of the mortgage
lender, with only some slight variation in
the degree of interest.
In particular, I should like to see some
effort made at extending the pointed suggestions in these articles so as to engage the
interest of the non-resident owners of
mortgages and properties that have been
translated from a mortgage interest into
title ownerships. This would include the
March 1937




*

*

*

*

*

The answer is "Yes".
207

Federal Home Loan Banks

T

HE first month of 1937 saw the addition of 10 institutions to the list of
members of the 12 Federal Home Loan
Banks, bringing the total number to 3,770
with assets of over three billion dollars.
All member institutions borrowed $6,570,000
during January and repaid $8,225,000. As a
TABLE

result, the balance of loans outstanding decreased $1,656,000. This is the first time
that net advances outstanding have decreased since March of 1935.
No changes in the interest rates of the
Banks were reported for January.

1.—Interest rates, Federal Home Loan Banks: rates on advances to member institutions]

Federal Home Loan Bank

1 Boston
?, New York

3 Pittsburgh

4.
5 Cincinnati
6 Indianapolis
7 Chicago
8 Des Moines
9. Little Rock
10. Topeka
11. Portland

1?. Los Angeles

Rate in
effect on

Feb. 1

Type of loan

Percent
3

All advances. All 10-year advances made after Jan. 15, 1937 shall be written
at 3 percent for 2 years, with the right to increase the interest rate to not
more than 4 percent for 8 years thereafter.
All advances for 1 year or less. This rate shall be applicable to balances out3
standing on Jan. 1, 1937.
3M All advances for more than 1 year shall be written at 4 percent, but interest
collected at 3 % percent during 1937.
All advances for 1 year or less. All advances for more than 1 year are to be
written at 4 percent, but until further notice credit will be given on all outstanding advances for the difference between the written rates of 5, 43^, or
4 percent and 3J^ percentum per annum.
sy2 All advances, with the provision that the interest rate may be increased to not
more than 4J^ percent after 30-days written notice.
All advances.
3
All secured advances.
3
All unsecured advances, none of which may be made for more than 6 months.
All secured advances are to be written at 3J^ percent, but interest collected at 3
3
percent.
All unsecured advances.
3-33^ On all advances up to $1,000,000, the interest rate shall be 3J^ percent. If the
balance of loans outstanding to any one member equals or exceeds $1,000,000,
the interest rate thereon shall be at the rate of 3 percent.
3
All advances.
3
Do.
3
All advances to members secured by mortgages insured under Title II of National
Housing Act.
33^ All advances for 1 year or less. All advances for more than 1 year are to be
written at 4 percent, but interest collected at 33^ percent so long as shortterm advances carry this rate.
3
All advances.

1
On May 29, 1935, the Board passed a resolution to the effect that all advances to non-member institutions upon the
security of insured mortgages, insured under Title II of the National Housing Act, "shall bear interest at rates of interest
one-half of 1 per centum in excess of the current rates of interest prevailing for member institutions."

208




Federal Home Loan Bank

Review

TABLE 2.—Growth and trend of lending operations
Members

Month

December
December
December
December

1932
1933
1934
1935

Balance
Loans ad- Loans adRepayoutstand- Borrowing
vanced
ments
vanced
2
Estimated
(cumu(monthly) (monthly) ing at end capacity
(000
of month
Number assets i (000 lative) (000
(000
(000
omitted)
(000
omitted)
omitted)
omitted)
omitted)
omitted)
119
2,086
3,072
3,460

000
000
000
000

$837
90, 865
129, 545
188, 675

$837
7,132
2,904
8,414

$889
3,360
2,708

$837
85, 442
86, 658
102, 795

3, 250, 000

193, 746
197, 530
202, 041
207, 878
215, 085
226, 645
235, 152
242, 983
252, 559
262, 046
268, 460
281, 933

5,071
3,784
4,511
5,836
7,207
11, 560
8,507
7,830
9,576
9,487
6,414
13, 473

5,065
3,642
4,095
3,222
2,258
3,895
4,993
4,714
5,027
4,313
4,094
5,333

102,
102,
103,
105,
110,
118,
122,
125,
129,
134,
137,
145,

288,502

6,570

8,225

143,745

$217,
2, 607,
3, 305,
3, 020,

1936
January
February
March
April
May
June
July
August
September
October
November
December

3,495
3,516
3,538
3,581
3,604
3,640
3,659
3,678
3,707
3,729
3,745
3,760

3, 300, 666

1937
3,770

800
942
358
972
922
587
101
218
767
941
261
401

$869, 000
869, 000
869, 000
869, 000
911, 000
911, 000
973, 000
973,000

1

Estimates of assets are brought up to date semiannually.
Based upon the amount for which the members may legally obligate themselves, or 50 percent of their net assets,
whichever is lower.
NOTE.—Allfigures,except loans advanced (monthly) and repayments, are as of the end of the month.
2

Directors Who Direct
favorable comment h a s r e s u l t e d
from the following advertisement:

MUCH

CITIZENS FEDERAL SAVINGS AND
LOAN ASSOCIATION OF CLEVELAND,
CLEVELAND, OHIO
The Directors of this Association are
Five have been members of the Board from the incorporation
in April, 1921; several more were elected
the following year. One hundred and
sixty-nine years of service are represented
By the directorate. In 1936, twelve regular
meetings of the Board were held and
MEN W H O DIRECT.

twenty meetings of the Executive Committee. The attendance record follows:
David Aitken, Sr. (11)
'A. F. Allen
(27)
Raleigh F. Andrie (10)
*Ansel E. Beckwith (32)
'Robert A. Bishop
(19)
James Craig
( 8)
* George J. Fischer (30)
'Geo. E. Hagenbuch (32)
'Ralph D. Hartman (28)
Z. W. Kobylanski (12)
Chas. P. Leininger ( 9)
'John H. Pinard
(30)
'Earl Ross
(31)
Edw. L. Sweeting
(11)
'Adolph D. Wiese
(25)
*Members of the Executive Committee.

March 1937




209

Federal Savings and Loan System

D

URING January, 16 operating Statechartered savings and loan associations were granted Federal charters. This
brought the total number of Federal savings
and loan associations to 1,228 as no new
associations were chartered during the
month. As of January 31, the approximate
assets of all Federals were $819,500,000.
Reports from 1,065 savings and loan associations were received for December
1936 and January 1937. The activity of
these associations, which is shown in table
2, closely parallels that of the State-chartered insured associations analyzed on page
213.
Both private share investments and repurchases increased heavily, the former by
77 percent and the latter by 143 percent.
Yet in spite of this activity the number of
private share accounts remained almost
stationary at about 640,000 and the amount
paid in on private subscriptions increased
$12,569,800.
In spite of a 24-percent decrease in the
mortgage loans made during January as
compared to December, share subscriptions
by the Home Owners' Loan Corporation
increased 2.7 percent or $3,870,400. However, at the end of January borrowed
money outstanding was 4.8 percent less
than at the beginning of the month. This
was due principally to a decrease of $1,901,000 in Federal Home Loan Bank advances.
Of the total volume of mortgage loans
made during January, 33.4 percent went for
new construction, while home purchase
accounted for 26.8 percent and refinancing
for 26.7 percent. Only 4.6 percent of total
loans made were for the reconditioning of
homes.
At the end of January the 1,065 reporting
associations had $733,567,100 in assets.
Here is an interesting advertisement in
which a State and a national bank welcome
210




i new Federal savings and loan association:
QUESTION:

WHAT IS
A FEDERAL
Savings 6* Loan

ASSOCIATION?
ANSWER:

It is a mutual, local thrift institution based
on time-tested principles. It is operated
under Federal Charter and strict Federal
supervision. It offers INSURED SAFETY
for your funds with reasonable dividends.
Its funds are loaned to home-owners, secured by first mortgages on their homes...
repaid in small monthly installments, with
interest. All officers and employees are adequately bonded.

* INVEST WISELY *

We Endorse
AS A MEDIUM OF SAFE INVESTMENT THE
SHARES
OF

FORT BEND FEDERAL SAVINGS & LOAN
ASSOCIATION
The shares of this association are
INSURED against loss on each individual account up 1

$5000.00
By the Federal Savings & Loan Insurance Corporation of Washington,
D.C.

FIRST NATIONAL BANK
ROSENBERG STATE BANK
W. W. WARD, Secretary

PHONE 233

Federal Home Loan Bank

Review

TABLE

1.—Monthly operations of 1,065 identical Federal savings and loan associations reporting during
December 1936 and January 1937
December
1936

639, 902

640, 655

Percent
+ 0.1

$445, 600, 800
143, 380, 200

$458,170, 600
147, 250, 600

+ 2.8
+ 2.7

588, 981, 000

605, 421, 200

+ 2.8

11, 509, 600
4,161, 600

20, 377, 000
10,102, 400

+ 77.0
+ 143.0

7, 331, 700
5, 317, 400
5, 093, 000
1,188, 200
1, 830, 700

5, 295, 400
4, 254, 900
4,241,600
725, 400
1, 343, 700

-27.7
-20.0
-16.7
-39.0
-26,6

20, 761, 000
544,107,100

15, 861, 000
552, 411, 400

-23.6
+ 1.5

54, 796, 000
2, 475, 800

52, 895, 000
1, 644, 800

-3.5
— 33.6

57, 271, 800

54, 539, 800

—4.8

728, 565, 900

733, 567,100

+ 0.7

Share liability at end of month:
Private share accounts (number)
Paid on private subscriptions
Treasury and H. 0 . L. C. subscriptions
Total
Private share investments during month
Repurchases during month
Mortgage loans made during month:
a. New construction
b. Purchase of homes
c. Refinancing
d. Reconditioning
e. Other purposes
Total
Mortgage loans outstanding end of month
Borrowed money as of end of month:
From Federal Home Loan Banks
From other sources
Total
Total assets, end of month

TABLE

2.—Progress in number and assets of Federal savings and loan associations
Number at specified dates

New
Total

March 1937




Change
December
to January

January
1937

Approximate assets

Dec. 31,
1933

Dec. 31,
1934

Dec. 31,
1935

Dec. 31,
1936

57
2

481
158

605
418

645
567

59

639

1,023

1,212

Jan. 31,
1937

Dec. 31,
1936

Jan. 31,
1937

645 $168, 772,148 $168, 237, 955
583 622, 670, 122 651, 230, 522
1,228

791, 442, 270

819, 468, 477

211

Federal Savings and Loan Insurance
Corporation

D

URING the period January 15 to February 15, the share accounts of 32
savings and loan associations wrere insured
by the Federal Savings and Loan Insurance
Corporation. At the end of that time there
was a total of 1,632 insured associations
with combined assets, as of the latest obtainable date, of $1,217,760,429. These associations represent approximately 1,350,000 individual shareholders.
TABLE

Applications received between January
15 and February 15 totaled 27 associations
with assets as of the date of application of
$37,843,306. The largest number received
was still from associations operating under
State charters. This group submitted 13
applications while Federal savings and loan
associations which had converted from
State associations submitted 12 and new
Federals submitted 2.

1.—Progress of the Federal Savings and Loan Insurance Corporation—Applications received
and institutions insured
APPLICATIONS RECEIVED
Cumulative number at specified dates

Assets (as of date of application)

Dec. 31, Dec. 31, Dec. 31, Jan. 15,? Feb. 15, Jan 15, 1937
1935
1937
1934
1936
1937
State-chartered associations
Converted F. S. and L. A
New F. S. and L. A
Total

53
134
393

351
480
575

671
620
651

671
628
651

580

1,406

1,942

1,950

684
640
653

$801, 846, 800
616, 852, 433
14, 590, 601

Feb. 15, 1937
$812, 240, 679
644, 244,194
14, 648, 267

1,977 1,433, 289, 834 1,471,133,140

INSTITUTIONS INSURED *

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

Cumulative number at specified dates

Number of
shareholders

Assets

Share and
creditor
liabilities

Dec. 31, Dec. 31, Dec. 31, Jan. 15, Feb. 15,
1936
1937
1937
1934
1935

Feb. 15,
1937

Feb. 15, 1937

Feb. 15, 1937

645, 611
606, 088
105, 674

$500, 061, 945
601, 382,450
116, 316, 034

$441, 691, 858
556, 281, 660
113, 780,152

4
108
339

136
406
572

382
560
634

398
565
637

451

1,114

1,576

1,600

417
579
636

1,632 1, 357, 373 1, 217, 760, 429 1, 111, 753, 670

1
Beginning May 15,1936,figureson 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 Dec. 31 each year.

212




Federal Home Loan Bank Review

ACTIVITIES OF REPORTING ASSOCIATIONS

FOR the two months December 1936 and
January 1937, comparable reports were received from 198 insured State-chartered
associations with combined assets of $342,088,800 at the end of January.
During January as compared to December the share investments of these reporting
associations increased rapidly. However,
there was a large decrease in the volume of
mortgage loans made. The former rose,
during January, 111.5 percent and was accompanied by a 158-percent increase in repurchases. Heavy repurchases and investments always follow the semiannual declaration of dividends. But in spite of such
heavy withdrawals the number of private
share accounts increased .4 percent and the
volume paid in .7 percent.
TABLE 2.—Monthly

The mortgage loans made in January by
these 198 State associations were apportioned as follows: 34.6 percent was used
for new construction and reconditioning;
33.4 percent for home purchase; 20.2 percent for refinancing; and 11.8 percent for
other purposes.
During January additional funds were
received through H. O. L. C. subscriptions
in the amount of $1,290,000. It is interesting that this sum is larger than the net
increase in mortgage loans outstanding
during the same period. In contrast, the
advances from the Federal Home Loan
Banks and from other sources of credit decreased 8.8 percent. The total borrowed
money as of the end of the month was
$15,585,900.

operations of198 identical insured State-chartered savings and loan associations reporting
during December 1936 and January 1937
December 1936 January 1937

Change
December
to January

371, 381

372, 695

Percent
+0.4

$259, 942, 800
12, 732, 700

$261, 648, 900
14, 022, 700

+0.7
+ 10.1

272, 675, 500

275, 671, 600

+ 1.1

Private share investments during month
Repurchases during month

4, 315, 400
3, 317, 200

9,135, 400
8, 560, 300

+ 111.5
+ 158.0

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

1, 573, 400
2, 020, 400
944,100
319, 600
688, 000

1, 207, 200
1, 371, 900
830,100
219,100
487, 600

— 23.2
-32.1
-12.1
-31.5
— 29.1

5, 545, 500
225, 014, 900

4,115, 900
225, 953,100

— 25.8
+ 0.4

14, 751, 000
2, 334, 600

13, 583,400
2, 002, 500

-7.9
-14.2

17, 085, 600

15, 585, 900

-8.8

345, 845, 000

342, 088, 800

-1.1

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

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

March 1937




213

Home Owners' Loan Corporation
TABLE

1.—H. 0. L. C. subscriptions to shares of savings and ban associations—Requests and subscriptions
Uninsured State-chartered members of
t h e F . H. L. B.
System

Federal savings and
loan associations

Insured State-chartered associations

Total

Number
Number
Number
Number
Amount
Amount
Amount
Amount
(cumu- (cumulative)
(cumu- (cumulative)
(cumu- (cumulative)
(cumu- (cumulative)
lative)
lative)
lative)
lative)
Requests:
Dec. 31,1935
June 30, 1936
July 31, 1936
Aug. 31, 1936
Sept. 30, 1936
Oct. 31, 1936
Nov. 30, 1936
Dec. 31,1936
Jan. 30,1937
Feb. 20, 1937
Subscriptions:
Dec. 31, 1935
June 30, 1936
July 31, 1936
Aug. 31, 1936
Sept. 30, 1936
Oct. 31, 1936
Nov. 30, 1936
Dec. 31,1936
Jan. 30,1937
Feb. 20, 1937
1

i

27
60
66
70
71
76
82
89
97
97

$1,131, 700
2, 506, 700
2, 826, 700
2, 740, 700
2, 789, 700
3,114, 910
3, 500, 710
3,845,710
4,105, 910
3,730,910

2
21
27
33
38
44
41
45
46
49

100, 000
689, 000
1, 069, 000
1,144, 000
1, 312, 000
1, 647, 200
1, 547, 200
1, 688, 000
1, 738, 000
1,528,200

1
|
|
1

33 $2,480, 000
130 10, 636, 200
150 11, 856, 200
172 14,134, 900
192 15, 478, 900
229 17, 846, 400
253 19, 403, 900
279 , 21, 016, 900
297 21, 921, 900
309 22,781,900

553
1,478
1,642
1,824
2,026
2,260
2,430
2,617
2,746
2,835

24
118
134
150
171
212
236
262
280
299

474 17, 766, 500
1,392 52, 817,100
1,558 59, 055, 800
1,683 65, 387, 500
1,903 75,155, 600
2,182 88, 362, 300
2, 332 94, 478, 600
2, 538 104,477,400
2, 663 109,493,700
2,753 114,289,700

1, 980, 000
9, 636, 600
10, 873, 700
12,158, 700
13, 671, 400
16,629,900
17,718,900
19,455,900
20,741,900
21,721,900

$21,139, 000
56,880,600
63,173,400
72,325,700 1
80,414,200
92,123, 400
99, 524, 200
108, 591, 900
113, 794, 300
118,851, 800

613
1, 668
1,858
2,066
2, 289
2, 565
2,765
2,985
3,140
3,221

$24, 750, 700
70, 023, 500
77, 856, 300
89, 201, 300
98, 682, 809
113, 084, 710
122, 428, 810
133,454, 510
139, 822,110
145,364,610

500
19, 846, 500
1,531
63,142, 700
1,719
70, 998, 500
1,866
78, 690,200
2,112
90,139, 000
2,438 106, 639, 400
2,609 113, 744, 700
2,845 125,621,300
2,989 1 131,973,600
3,101 137,539,800

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

TABLE

2.—Reconditioning Division—Summary of all reconditioning operations through Feb. 17, 1937 :
Total contracts awarded
Period

Number
June 1, 1934 through Jan. 13, 1937
Jan. 14, 1937 through Feb. 17, 1937
Grand total through Feb. 17, 1937

Total jobs completed

Cases
received *
Amount

Number

Amount

750, 615
6,903

411,134 $79, 081, 244
1, 095, 868
6,456

403,136
5,870

$76, 704, 535
1, 039, 556

757, 518

417, 590

80,177,112

409, 006

77, 744, 091

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.

214




Federal Home Loan Bank

Review

TABLE

3.—Foreclosure cases dispatched to State Counsel and properties acquired by the Home Owners9
Loan Corporation l

Period

Foreclosure
cases dispatched to
State Counsel

Prior to 1935
Jan. 1 through June 30
July 1 through Dec. 31

Properties
acquired by
voluntary
deed and
foreclosure *

35

9

535

114
983

1935
3,900

1936

January
February
March
April
May
June
July
August
September
October
November
December
January
Grand total to Jan. 31, 1937

324
447
605
669
964

1,281
1,544
3,190
4,365
4,688
8,113
8,016
8,203
7,278
6,265
4,808
5,514
4,992

1,440
1,380
1,802
2,420
3,664
3,042
3,338
3,059

72, 727

24, 260

1
Figures prior to 1936 are as of the month in which the action took place. Subsequent figures are as of the month
in which
the action was reported in Washington.
2
Does not include 11,065 properties bought in by H. O. L. C. at foreclosure sale but awaiting expiration of the redemption period before title and possession can be obtained.
In addition to the total of 24,260 completed cases, 109 properties were sold at foreclosure sale to parties other than the
H. O. L. C , and 3,470 cases have been withdrawn due to payment of delinquencies by borrowers after foreclosure
proceedings have been entered.

Resolutions of the Board

EXHIBIT M

(Continued from page 197)

FORM OF CERTIFICATE OF MEMBERSHIP

I.—AMENDING THE FORM OF CERTIFICATE OF MEMBERSHIP IN FEDERAL
SAVINGS AND LOAN ASSOCIATIONS

Certificate No
*
2
This certifies that
is a
member of the undersigned and holds a
*
share account of the undersigned, subject to
Home Owners' Loan Act of 1933, the charter and
bylaws of the undersigned.
Witness the authorized signature (s) of officer or
employee this
day of
,
19

The Board adopted the following resolution on January 23:
Be it resolved, That pursuant to authority
vested in the Federal Home Loan Bank Board
by subsection (a) of Section 5 of Home Owners' Loan Act of 1933 (12 U. S. C. 1464 (a))
Exhibit M annexed to the Rules and Regulations
for Federal Savings and Loan Associations is
hereby amended to read as follows:

March 1937




FEDERAL SAVINGS AND LOAN ASSOCIATION.
(Authorized Signature)
For footnotes see page 216.

215

II.—AMENDING THE RULES AND REGULATIONS FOR FEDERAL SAVINGS
AND LOAN ASSOCIATIONS
On February 4 the Board passed the following resolution:
Be it resolved, That pursuant to authority
vested in the Federal Home Loan Bank Board by
subsection (a) of Section 5 of Home Owners'
Loan Act of 1933 (12 U. S. G. 1464 (a)) the third
sentence of Section 34 of Rules and Regulations
for Federal Savings and Loan Associations be
amended to read as follows:
"Within thirty days after December 31 of each
year two copies shall be forwarded to the Federal Home Loan Bank of w h i c h the association
is a member, one copy of w h i c h shall thereupon
be transmitted by the Bank to the Governor of
the Federal Home Loan Bank System."

III.—AMENDING THE RULES AND REGULATIONS FOR FEDERAL HOME
LOAN BANKS
The Board adopted the following resolutions on February 10:
Be it resolved, That pursuant to authority
vested in the Federal Home Loan Bank Board by
Section 17 of the Federal Home Loan Bank Act
(12 U. S. G. 1437), Section 41 of the Rules and
1

Certificates should be numbered consecutively by type or otherwise. See Section 7 of
Charter (Exhibit K ) . An investment share account may be represented by a separate certificate not contained in a share account book. A
savings share account shall be represented by a
share account book in the front of w h i c h shall
be a certificate. A borrower shall receive a loan
account book in the front of w h i c h shall be a
certificate. Section 8 of the bylaws requires each
certificate of membership to be manually signed
by an authorized person.
2
Enter the name of the investor or borrower.
3
Enter "$
investment" or "savings"
or "loan from." If the words "loan from" are
entered, strike the w o r d s "share accounts of."

216




Regulations for Federal Home Loan Banks is
hereby amended by striking p a r a g r a p h (7)
thereof; that Section 42 thereof is hereby
amended by striking p a r a g r a p h (8) thereof; and
that Section 43 thereof is hereby amended by
striking p a r a g r a p h (8) thereof.
Be it resolved,
That pursuant to authority
vested in the Federal Home Loan Bank Board
by Section 17 of the Federal Home Loan Bank
Act (12 U. S. C. 1437), p a r a g r a p h (4) of Section
32 (c) of the Rules and Regulations for Federal
Home Loan Banks is hereby amended to read
as follows:
"(4) Advances on the security of home mortgages or obligations of the United States w i t h a
maturity of not to exceed one year, w h i c h are
made to members may be deemed investments
in compliance with Section 11 (g) of the Act."
Be it resolved, That pursuant to authority
vested in the Federal Home Loan Bank Board by
Section 17 of the Federal Home Loan Bank Act
(12 U. S. C. 1437), p a r a g r a p h (7) of Section 42
of the Rules and Regulations for Federal Home
Loan Banks is hereby amended to read as follows :
"(7) Regulations: The Banks may make advances to members on the security of home mortgages as provided in Section 10 of the Act, for
periods not to exceed ten years; provided that
advances for periods exceeding one year shall
be repaid at least 10 percent annually on a
monthly or quarterly amortization basis, unless
other terms of repayment are authorized by the
Board."
Be it resolved, That pursuant to authority
vested in the Federal Home Loan Bank Board by
Section 17 of the Federal Home Loan Bank Act
(12 U. S. C. 1437), p a r a g r a p h (7) of Section 43
of the Rules and Regulations for Federal Home
Loan Banks is hereby amended to read as follows:
"(7) Regulations: Banks may make advances
to members on the security of obligations of the
United States as provided in Section 10 of the
Act, for periods not to exceed ten years; provided
that advances for periods exceeding one year
shall be repaid at least 10 percent annually on a
monthly or quarterly amortization basis, unless
other terms of repayment are authorized by the
Board."

Federal Home Loan Bank

Review

Directory of Member, Federal, and Insured Institutions
Added during January-February
L—INSTITUTIONS ADMITTED TO MEMBERSHIP IN THE FEDERAL HOME LOAN BANK
SYSTEM BETWEEN JANUARY 18, 1937, AND
FEBRUARY 19, 1937 x
(Listed by Federal Home Loan Bank Districts, States,
and cities)
DISTRICT NO. 1
MASSACHUSETTS :
Framingham:
Framingham Co-operative Bank, 58 Howard Street.
Hyde Park:
Hyde Park Co-operative Bank, 172 River Street.
DISTRICT NO. 3
PENNSYLVANIA :
Philadelphia:
Corona Building & Loan Association, 263 East
Duval Street.
Stephen Girard Savings, Loan & Building Association, 604 West Oxford Street.
Pittsburgh:
City-County Building & Loan Association, 503
Peoples East End Bank Building.
DISTRICT NO. 5
OHIO:
West Jefferson:
West Jefferson Building & Loan Company.
DISTRICT NO. 6
INDIANA :
Wabash:
Home Loan & Savings Association.
MICHIGAN :
Jackson:
Ben Franklin Savings & Loan Association.
DISTRICT NO'. 7
ILLINOIS :

Martinsville:
Martinsville Loan & Building Association.
Milwaukee:
Pulaski Building & Loan Association, 2616 North
Holton Street.
Racine:
Belle City Building & Loan Association.
DISTRICT NO. 8

WISCONSIN :

MINNESOTA :

Montevideo:
Montevideo Building & Loan Association.
DISTRICT NO. 12

CALIFORNIA :

Los Angeles:
Hollywood Building & Loan
Santa Monica Boulevard.

Association,

7877

1
During this period 1 Federal savings and loan association was admitted to membership in the System.

March 1937




WITHDRAWALS FROM THE FEDERAL HOME LOAN
BANK SYSTEM BETWEEN JANUARY 18, 1937, AND
FEBRUARY 19, 1937
ILLINOIS :

Bloomington:
Bloomington Savings & Loan Association, 113
South College Avenue.
KANSAS :
Independence:
Guaranty Savings & Loan Association.
KENTUCKY:
Covington:
Economy Building Association, 429 Madison Street
MARYLAND :
Baltimore:
Ellwood Permanent Building Association, 3100
East Fairmount Avenue.
OREGON :
Salem:
Mutual Savings & Loan Association, 142 South
Liberty Street.

II.—FEDERAL SAVINGS AND LOAN ASSOCIATIONS CHARTERED BETWEEN JANUARY 18,
1937, AND FEBRUARY 19, 1937
DISTRICT NO. 1
Boston:
Edward Everett Federal Savings & Loan Association, 701 Columbia Road (converted from Edward Everett Co-operative Bank).
Brockton:
Montello Federal Savings & Loan Association of
Brockton, 825 North Main Street (converted from
Montello Co-operative Bank).
Security Federal Savings & Loan Association of
Brockton, 40 Legion Parkway (converted from
Security Co-operative Bank).
Foxborough:
Foxborough Federal Savings & Loan Association,
2 School Street (converted from Foxborough Cooperative Bank).
Natick:
Natick Federal Savings & Loan Association, 28
Main Street (converted from Natick Co-operative
Bank).
Somerville:
Middlesex Federal Savings & Loan Association, 405
Highland Avenue (converted from West Somerville Co-operative Bank).
Worcester:
Equity Co-operative Federal Savings & Loan Association, 22 Elm Street (converted from Equity
Co-operative Bank).
Home Co-operative Federal Savings & Loan Association, 22 Elm Street (converted from Home
Co-operative Bank).
Independent Co-operative Federal Savings & Loan
Association of Worcester, 390 Main Street (converted from Independent Co-operative Bank).
Worcester Co-operative Federal Savings Association, 22 Elm Street (converted from Worcester
Co-operative Bank).

MASSACHUSETTS :

217

NEW YORK:

DISTRICT NO. 2

New York:
Bankers Federal Savings & Loan Association, 25
Broad Street (converted from Bank Clerk's Cooperative Building & Loan Association).

WEST VIRGINIA:

DISTRICT NO. 3

Moundsville:
First Federal Savings & Loan Association of
Moundsville (converted from American Building
& Loan Association).

GEORGIA :

III.—INSTITUTIONS INSURED BY THE FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION BETWEEN JANUARY 18,1937, AND
FEBRUARY 19, 1937 *

DISTRICT NO. 4

NEW YORK:

PENNSYLVANIA:

Rome:
Citizens Federal Savings & Loan Association of
Rome, 503 Broad Street (converted from Citizens
Building & Loan Association).

NORTH CAROLINA:

Mooresville:
Mooresville Federal Savings & Loan Association.

SOUTH CAROLINA:

Georgetown:
First Federal Savings & Loan Association
Georgetown, 112 St. James Street.
DISTRICT NO. 5

of

OHIO:

Marysville:
Union County Federal Savings & Loan Association of Marysville, 109 South Main Street (converted fiom Union County Savings & Loan Company).
DISTRICT NO. 6

INDIANA :

Bloomington:
Workingmen's Federal Savings & Loan Association,
121 East Kirkwood Avenue (converted from
Workingmen's Building, Loan-Fund & Savings
Association).

MICHIGAN :

Kalamazoo:
First Federal Savings & Loan Association of Kalamazoo, 346 West Michigan Avenue (converted
from Peoples Savings Association).
DISTRICT NO. 10

KANSAS:

Parsons:
First Federal Savings & Loan Association of
Parsons, 1909 Main Street (converted from Parsons Building & Loan Association).
DISTRICT NO. 11

UTAH:

Salt Lake City:
First Federal Savings & Loan Association of Salt
Lake City, 78 South Main Street (converted from
Fidelity Building & Loan Association).
DISTRICT NO. 12

HAWAII :

Honolulu:
First Federal Savings & Loan Association of
Hawaii, 929 Fort Street (converted from Mutual
Building & Loan Society of Hawaii, Limited).

CANCELATIONS OF FEDERAL SAVINGS AND LOAN ASSOCIATION CHARTERS BETWEEN JANUARY 18, 1937,
AND FEBRUARY 19, 1937
MASSACHUSETTS :

Worcester:
Equity Co-operative Federal Savings & Loan Association, 22 Elm Street (consolidation with
Worcester Co-operative Federal Savings & Loan
Association, Worcester, Massachusetts).
Home Co-operative Federal Savings & Loan Association, 22 Elm Street (consolidation with
Worcester Co-operative Federal Savings & Loan
Association, Worcester, Massachusetts).

TENNESSEE :

Clinton:
Clinton Federal Savings & Loan Association.

DISTRICT NO. 2

West New Brighton:
Prudential Savings & Loan Association, 810 Forest
Avenue.
DISTRICT NO. 3

Bradford:
Tuna Valley Building, Loan & Savings Association,
79 Main Street.
Grove City:
Grove City Building & Loan Association, 150 South
Broad Street.
Imperial:
Montour Valley Savings, Building & Loan Association, Imperial State Bank Building.
Philadelphia:
Westmoreland Building & Loan Association, Corner Fifteenth & Tioga Streets.
DISTRICT NO. 4

MARYLAND :

Baltimore:
American National Building & Loan Association of
Baltimore City, 1024 West Baltimore Street.
DISTRICT NO. 5

OHIO:

Ashtabula:
Ashtabula County Building & Savings Company,
4617 Main Street.
Cincinnati:
Trade Union Savings & Loan Association, 1420
Walnut Street.
Cleveland:
Lincoln Heights Savings & Loan Company, 2247
Professor Street.
Columbiana:
Home Savings & Loan Company.
Fostoria:
Ohio Savings & Loan Association, Corner Main &
Tiffin Streets.
DISTRICT NO". 6

MICHIGAN :

Jackson:
Ben Franklin Savings & Loan Association.

DISTRICT NO. 7
Milwaukee:
Concordia Building & Loan Association, 1100 West
National Avenue.

WISCONSIN:

MINNESOTA :

DISTRICT NO. 8

Montevideo:
Montevideo Building & Loan Association.
Owatonna:
Steele County Building & Loan Association, Schoen
Building.
DISTRICT NO. 10

KANSAS:

Lawrence:
Douglas County Building & Loan Association, 739
Massachusetts Street.
Osborne:
Osborne County Building & Loan Association.

CALIFORNIA :

DISTRICT NO. 12

Chino:
Chino Building & Loan Association, 652 " D " Street.
Sonora:
Sonora Guarantee Building-Loan Association, 408
Washington Street.

WEST VIRGINIA:

Wheeling:
First Federal Savings & Loan
Wheeling, 29 Eleventh Street.

218




Association

of

1
During this period 19 Federal savings and loan associations were insured.

Federal Home Loan Bank

Review

• . S. COVERNHKNT MIHTIN* OFFICE:It37

FEDERAL HOME LOAN BANK DISTRICTS

i BOUNDARIES OF FEDERAL HOME LOAN BANK OISTRICTS
FEDERAL HOME LOAN BANK CITIES.