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Vol. 6
tsMamk
No. 8
FEDERAL
HOME LOAN BANK
REVIEW
MAY
1940
ISSUED BY
FEDERAL HOME LOAN BANK BOARD
WASHINGTON D.C.
CONTENTS
FEDERAL
HOME
LOAN
BANK
REVIEW
Published monthly by the
FEDERAL HOME L O A N
BANK BOARD
John H. Fahey, Chairman
T. D. Webb. Vice Chairman
F. W, Catlett
W. H. Huiband
F. W. Hancock, Jr.
FEDERAL HOME LOAN
BANK SYSTEM
FEDERAL SAVINGS AND LOAN
ASSOCIATIONS
FEDERAL SAVINGS AND LOAN
INSURANCE CORPORATION
FOR
MAY
1940
SPECIAL ARTICLES
Residential neighborhoods: Their structure a n d growth
Dividend rates of savings a n d loan associations
T h e t h i r d a n n u a l " H u n t for F a c t s " — P a r t 2
T h e effect of t h e war upon British building societies
Significant trends in t h e home-financing and savings operations of insured institutions during 1939
Registered homes built under t h e Federal H o m e Building Service Plan . . . .
Page
250
255
256
259
262
266
STATISTICS
Residential construction and home-financing activity
General business conditions
Foreclosures
Residential construction
268
270
270
270
Small-house building costs
New mortgage-lending activity of savings a n d loan associations
Mortgage recordings
Federal Savings a n d Loan System
Federal Savings and Loan Insurance Corporation
271
271
272
272
273
Federal H o m e Loan Bank System
273
Statistical tables:
Nos. 1, 2: N u m b e r and estimated cost of new family dwelling units. . . .
No. 3: Small-house building costs
Nos. 4, 5: E s t i m a t e d lending activity of all savings and loan associations . .
No. 6: Index of wholesale price of building materials
No. 7: Monthly operations of Federal a n d State-chartered insured associations
No. 8: Institutions insured by t h e Federal Savings a n d Loan Insurance
Corporation
No. 9: Lending operations of t h e Federal H o m e Loan Banks
No. 10: Government investments in savings a n d loan associations . . . .
Nos. 11, 12: H o m e Owners' Loan Corporation
Nos. 13, 14: Mortgage recordings
274
276
278
279
280
280
281
281
281
282
REPORTS
HOME OWNERS' LOAN
CORPORATION
F r o m t h e m o n t h ' s news
Directory of member, Federal, a n d insured institutions added during MarchApril
261
284
Resolutions of t h e Board
285
SUBSCRIPTION PRICE OP REVIEW. The FEDERAL HOMB LOAN BANK REVIEW is the Board's medium of communication with member
institutions of the Federal Home Loan Bank System and is the only official organ or periodical publication of the Board. The RIVIBW
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 $1.60; single copies, 15 eents. 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.
226095—40
1
RESIDENTIAL NEIGHBORHOODS: THEIR
STRUCTURE AND GROWTH
What is the pattern of residential neighborhoods in
American cities, and in what directions do they
move? A recent study of real property surveys suggests general principles and techniques for use by
mortgage lenders in analyzing their own cities.
|
AN outstanding development in photography
in recent years has been infra-red technique,
producing pictures with perfect clarity even on
cloudy days for distances of several hundred miles.
Similarly, mortgage lenders are striving to develop
a technique which will pierce the haze of economic
uncertainties and more clearly portray the risks
involved in making a residential loan to run for 15
to 25 years into the future.
Basis for important advances towards such a
technique have been the various real property
surveys, making available within the past five years
a vast storehouse of information about the structure
of more than 200 American cities. From such
data, a scientific analysis of city structure is slowly
being made, and tools are being devised and tested
to guide mortgage-lending policies.
A recent study of the real property surveys by
Dr. Homer H o y t x is of particular interest to savings
and loan associations and other mortgage lenders
because it suggests how to acquire an intimate
understanding of the character of residential neighborhoods and the forces that have created them as
they are and that are constantly exerting pressures
to change them in any American city. Even for
those cities for which no real property survey has
yet been made, techniques are described which will
make possible generalizations on city structures
and growth.
T H E STRUCTURE OF RESIDENTIAL NEIGHBORHOODS
Although a city may appear to the observer in an
airplane as a chaotic jumble of structures, without
any orderly pattern, three steps can be taken to
differentiate and relate its integral parts. First, by
use of land survey, land coverage, and settled area
i "The Structure and Growth of Residential Neighborhoods in American
Cities", by Dr. Homer Hoyt, Principal Housing Economist of the Federal
Housing Administration, upon which this article is based, may be obtained from
the Superintendent of Documents, Government Printing Office, Washington,
D. C , for $1.50.
250
maps, the shape of the entire community is revealed.
By examining the city as a unit, one determines the
ground plan, the pattern of streets, the increase in
the amount of vacant land from the center to the
periphery. The hundreds of thousands of separate
buildings form various types of patterns around the
central business area like a scattering of iron filings
about a magnetic core.
As a second step, land use maps are consulted.
They make it clear that structures devoted to different functions are segregated in definite areas. Residential areas are set apart, and tend to be distributed in a certain definite way with respect to commercial and industrial districts.
Once the shape of the city and the internal pattern of the different types of structures have been
determined, the third step—and the most important
for mortgage lenders—is to analyze the characteristics of the different residential sections. For the 177
cities for which data by blocks have been tabulated
in real property surveys, Dr. Hoyt suggests an intensive technique which permits the delineation of numerous types of neighborhoods.
In brief, using the real property survey, eight or
more factors significant of the quality of housing
are tabulated for each city block. Such factors might
include average rental for the block, percentage of
total dwelling units that are owner-occupied, percentage of structures needing major repairs, percentage of structures less than 15 years old, etc. Plotting
these figures in each city block on a map then reveals
a definite series of patterns. Dwelling units that are
similar in rental, or in age, or similar with respect to
other indicators of quality of housing, tend to be
concentrated in certain areas. This is shown in the
section of the block data map for Richmond reproduced on the facing page.
In making intensive studies of Richmond and other
cities for which data had been tabulated by blocks
and transferred to maps, it was found that a number
Federal Home Loan Bank Review
Block data map—Section of Richmond, Virginia—1934
[Source: U. S. Department of Commerce, "Richmond Real Property Inventory, 1934"; Federal Housing Administration,
Division of Economics and Statistics]
Thefiguresin each block of this section of a map of Eichmond are factors revealing the housing conditions in that block. Listed from top to bottom in each block
are: (1) average rental of the dwelling units; (2) total number of residential structures; (3) percentage of total number of residential structures less than 15 years old;
(4) percentage of total number of dwelling units that are owner-occupied; (5) percentage of total number of residential structures that need major repairs; (6) percentage
of total number of structures used for commercial purposes; (7) percentage of total number of dwelling units that have no private bath; (8) percentage of total number
of residents that are nonwhite.
The basicfiguresfor each block are derived from the real property survey for the city. Such a map shows the general pattern of neighborhoods, and helps the
mortgage lender to recognize and interpret trends which may change the character of neighborhoods. Dwelling units that are similar in rental, in age, in condition,
or similar with respect to other indicators of quality of housing, tend to be concentrated in certain areas. Note how few of the structures in the lowest rental blocks are
in good condition, or are owner-occupied. In the better-grade areas, structures are newer, there are more owner-occupants, and dwellings are generally in good condition.
May 1940
251
of characteristics of the quality of housing were associated and tended to fall in the same general
areas of the city. For example, in ascertaining
the areas where the worst housing conditions prevailed in Kichmond, factors indicating poor housing
(less than $15 average monthly rent, 75 percent of
structures 35 years old or more, 25 percent of structures in poor condition, and 50 percent or more
nonwhite occupancy) tended to concentrate in homes
in low-rent blocks. As average block rent increased,
these factors became less prevalent.
Similar results were found in other cities, leading
to the development of a simple alternative technique
which can be used in analyzing residential neighborhoods in cities where block data from real property
surveys are not available. Essence of this technique
is the fact that average rent of dwelling units in a
block reflects the housing characteristics of that
block: both those which can be measured (like age
and condition of structure) and those more difficult
to evaluate (such as style of architecture, topography,
and accessibility).
Stressing the fact that rent is the basic tool which
may be used for rough analysis where other data
are lacking, the monograph points out that this
alternative technique is not so flexible and not so
accurate as one developed from real property surveys, where a judicious selection of the required
factors for measurement permits the description of
numerous types of neighborhoods. However, rent is
an absolute figure and an average block rental can be
readily computed. I t is the only characteristic used
in measuring quality of housing about which much
information is available concerning the past, as well
as the present. For all these reasons, Dr. Hoyt's
conclusion is that "patterns of rent may be fully
relied upon to serve as a guide to the structure of
residential neighborhoods."
The average rent of dwelling units in a block can
be quickly ascertained on a sample basis, either from
a door-to-door survey or by use of records of rental
units handled through real estate agents. High,
low, and intermediate rental areas may be defined
for sections of the city including a number of blocks,
making possible a quick analysis of city structure
and comparison of the extent and location of the
various rental areas in a short time.
T H E PATTERN OF RESIDENTIAL AREAS IN THE CITY
I n determining mortgage-lending policies, the
pattern of the distribution of rent areas within the
252
city is most important of all. Although each urban
center has a pattern that is to a certain extent
unique, study of the maps of 142 cities reveals that
in every city there are one or more clusters of blocks
in which average rents paid for residences are highest.
These high-rent areas, although of extremely limited
extent, are peaks: all other rent areas slope upward
towards them.
The rental area map of Trenton, New Jersey,
developed from maps showing rents by individual
blocks, groups blocks of similar rents in relatively
homogeneous areas, bringing out in sharp relief the
location of the main rental sections and the gradation
downward from the high-rent poles, with successive
areas of lower and lower average rents.
I t has been suggested in the past that rental areas
fall into a series of concentric circles, with a gradation
of rents upward from the center to the periphery in
all sections of the city. Rental area maps, however,
conform to a pattern of sectors. In no city examined
was the concentric circle pattern observed. Rather,
there is an upward gradation of rents in the one or
more sectors in which the highest rental area is
located, and there are also low-rent sectors in which
there is no increase in rents as one goes from the
center to the periphery of the city.
Some conclusions of fundamental importance with
respect to main tendencies of city structure can be
summarized from these rental area maps:
1. The highest rental neighborhood is in every
case located in one or more sectors on the side of the
city, and in most cases on the periphery.
2. High-rent areas may form wedges extending in
certain sectors along radial lines from the center to
the periphery (as in Dallas, Providence, Indianapolis)
or may fall into rectangular or circular segments on
the periphery of one sector (Des Moines, Peoria,
Jacksonville).
3. Intermediate rental areas tend to surround the
highest rental neighborhoods, or to adjoin them on
one side.
4. Intermediate rental areas are sometimes found
on the periphery of sectors of the city other than
those in which highest rental neighborhoods are
located; they then represent peak rental neighborhoods of the lower grade sectors (Atlanta, Minneapolis).
5. Low-rent areas extending from the center to
the edge of settlement on one side or in certain sectors
are found in practically every city (Trenton, Oklahoma City, Knoxville, Seattle are examples). One
or more sectors thus acquire a low-rent character,
Federal Home Loan Bank Review
Average rents in residential areas, Trenton, New Jersey—1934
[Source; U. S. Department of Commerce, "Trenton Real Property Inventory, 1934"; Federal Housing Administration, Division of Economics and Statistics]
LESS THAN
$10.00
$10.00
$50.00
TO $19.99
U S
$20.00 TO $29.99 I
$30.00
TO
OR
MORE
CENTRAL BUSINESS DISTRICT
PUBLIC PROPERTY
IN USE
$49.99 \
By grouping blocks of similar rents in relatively homogeneous areas, this rental area map brings out in sharp relief the location of the main rental sections in Trenton,
and shows that the other rent areas slope upward towards the peak represented by the high-rent pole. The map also illustrates the general principle that the high,
intermediate, and low-grade areas tend to move out from the center of the city in definite sectors. Of prime importance to mortgage lenders is the fact that the outward shift of the best residential neighborhood to the rim of the city leaves behind a zone in which rentals are declining and mortgage risks increasing. By making loans
on properties in the forefront of the movement of the better-grade areas, the mortgage lender is well protected against loss from declining neighborhood trends.
and in these sectors there is no tendency for rents to
increase as one leaves the center and approaches the
periphery.
THE
GROWTH
OF
KESIDENTIAJJ
NEIGHBORHOODS
To know the present pattern of distribution of
residential neighborhoods in the city is vital to
mortgage lenders, but this in itself is not enough for
sound long-term lending. The structure of the city
does not remain static, and the pattern of neighborhoods changes as the city grows. A knowledge of
the dynamic forces which produce shifts in the
boundaries of existing types of neighborhoods is
therefore extremely valuable, especially in cities of
rapid growth, where sudden transitions occur in
the land uses or residential occupancy of an area.
May 1940
One general conclusion advanced in this study is
that "the speed with which a residential area of a
given type shifts to a new location appears to vary
with the rate of population growth of the city".
Whenever a large number of new people enter a
city, factories may invade residential areas, newcomers of different standards of living may hasten
changes in the characters of neighborhoods, and the
building of new homes to take care of added population causes a shifting and filtering process that
profoundly affects every neighborhood in the city.
In the relatively static city, on the other hand,
the pattern of land uses and neighborhoods remains
unchanged for long periods of time. For example,
comparing Charleston, South Carolina, and Charleston, West Virginia—two cities that were approximately the same size in 1930—we find that from
253
1900 to 1930, the population of the South Carolina
city increased 11.6 percent. The fashionable residential area still remains near the location established over 100 years ago. Room for expanding the
high-grade home area was obtained by filling in
land on the Ashley River, a few blocks from the
sites of the first mansions. In contrast, in Charleston, West Virginia, where population gain was nearly
six-fold from 1900 to 1930, the fashionable neighborhoods moved eastward, with two new sections
developed, one across the river on the heights. The
present high-grade areas occupy districts a mile or
more from the point of origin.
A second general conclusion is t h a t population
growth itself depends on the forces which will tend
to attract industries or trade, or make a given city
a favorable spot for recreation. Therefore, in order
to estimate the future rate of movement of a neighborhood, these economic forces must be analyzed.
If they hold promise of increased economic opportunities, population will grow, and will tend to
anticipate major changes in building activity by a
year or two. When population increase stimulates
a building boom, cities tend to add successive rings
of new residential structures by a series of spurts,
with solid rows of new homes being erected on the
fringe of the city, b u t with few houses constructed
in old neighborhoods even where vacant lots are
available.
When population increase and new building in any
city cause the settled area to expand, the question
of prime interest to the home owner or the mortgage
lender is: In what direction will the city grow and
what areas will be affected?
Unfortunately, there is no series of real property
surveys that will permit an exact comparison of
rental areas at different time intervals. I t is a fact
that high-rent neighborhoods in American cities have
been moving outward, for most of these fashionable
sections today are located in outlying parts of the
city beyond the areas occupied by houses at a relatively recent period.
Use of "dynamic factor'' maps, constructed from
evidence gleaned from old inhabitants as to location
of rental extremes in the city at time intervals a
number of years apart, reveals a fundamental principle of neighborhood growth: "If one sector of a
city first develops as a low-rent residential area, it
will tend to retain that character for long distances
as the sector is extended through process of the
city's growth." I n the same way, a high-rent area
established in another sector of the city will tend to
254
expand within that sector, and now high-rent areas
will establish themselves in the outward extension
of the sector.
Since movement of the high-rent area tends to
pull the growth of the entire city in the same direction, the principle that high-rent neighborhoods
follow a definite path in one or more sectors of the
city is fundamental to analysis. Sometimes the
high-rent pole jumps to new areas on the periphery
of the city (as Shaker Heights in Cleveland or Coral
Gables in Miami) but usually these new areas are
in the line of growth of the original sector.
In all of the cities examined, the high-rent area
originated near the retail and office center. Direction and pattern of future growths tended to be
governed by some combination of these considerations:
1. Progress along established lines of travel or
toward another existing nucleus of buildings or
trading centers.
2. Progress toward high ground and along water
fronts not used for industry.
3. Growth toward the section of the city with
free, open country beyond the edges.
4. Growth toward homes of the leaders of the
community.
5. Development along the fastest existing transportation lines.
6. Paralleling the trend of movement of office
buildings, banks, and stores. (These usually follow,
rather than lead, the movement of the high-rent
neighborhood.)
Intermediate rental groups tend to occupy the
sectors in each city adjacent to the high-rent area.
New growth of these middle-class sections takes
place on the periphery of the city near high-grade
areas, or sometimes at points beyond the edge of
older middle-class sections.
Occupants of houses in the low-rent categories
tend to move out in bands from the center of the
city mainly by filtering up into houses left behind by
high-income groups, or by erecting shacks on the
periphery—usually in the extension of a low-rent
sector.
DEVELOPMENT OF INDIVIDUAL C I T Y STUDIES
The general conclusions and techniques suggested
by Dr. Hoyt's monograph should assist savings and
loan associations and other mortgage lenders in
improving their own studies of residential neighbor(Continued on p. 258)
Federal Home Loan Bank Review
DIVIDEND RATES OF SAVINGS AND LOAN
ASSOCIATIONS
•
A RECENT study indicated that until the end
of 1938 there was no great evidence that dividend rates were moving down generally in the savings
and loan industry.1 Examination of dividend rates
of savings and loan associations during the first half
of 1939 led to the conclusion that a more pronounced
downward trend appeared to be in the making last
year.
As yet, figures covering dividend rates of the entire
membership of the Bank System at the December 31,
1939 declaration period are not available. However,
there are reports from five of the 12 Federal Home
Loan Banks which indicate that the downward
movement was continued throughout the latter
half of 1939.
Although these reports do not constitute a representative sample of the membership of the Federal
Home Loan Bank System, they are straws which
indicate the direction in which the wind is blowing.
SUMMARY OF REPORTS
For example, the 64 Federal associations in the
State of New York during the last six months of 1939
reported six reductions in dividend rates and no increases. This followed 12 reductions and no increases
during the first six months of the year. As a result,
on December 31, 1939, no Federal association in
New York or New Jersey was paying dividends at a
rate higher than 3K per centum per annum. The
number of Federals declaring dividends at rates of
2% percent or less on December 31, 1939 was 26, two
more than at the close of June 1939 and 15 more than
on June 30,1938. Although the major change during
the first half of the year was the general reduction
among the Federals in the metropolitan New York
area to a 2K-percent rate on June 30, 1939, the reductions in dividend rates which took place during the
latter half of the year were mainly in the sections of
the State outside of the metropolitan area. In his
seventh annual report, the President of the Federal
Home Loan Bank of New York stated: "Many savings, building and loan associations have brought their
rates of return on savings down to a 3-percent level,
and there is a definite trend to a 2^-percent scale,
t "A Trend in Dividend Rates?", FEDERAL HOME LOAN BANK REVIEW.
November 1939, p . 38.
May 1940
particularly in the larger centers. Until there is
some change in basic economic conditions, it is my
opinion that this trend will continue. The managements of such institutions as are resisting this trend
apparently do not realize that in order to maintain
rates paid on savings above the market, they must
inevitably maintain their mortgage interest rates
above the market, thereby limiting their investment
field to the less desirable and higher risk mortgages/'
*< (Reports from the Federal Home Loan Bank of
Indianapolis reveal that although 3 percent was the
lowest dividend rate paid by member savings and
loan associations for the year 1939 in the Sixth
District, more than half (125) of the 213 members
paid this rate.
Evidence of a downward trend in rate paid by
members in Illinois and Wisconsin during 1939 is
found in the following excerpt from the annual report
of the Federal Home Loan Bank of Chicago: "In
face of this plentiful and easy money condition, the
trend of dividend rates has continued downward.
A number of institutions reduced annual rates to
3 percent and 3% percent June 30 and others followed
December 31. For instance, by common agreement
all savings and loan associations in Milwaukee
County, whose accounts are insured, are now upon
a uniform annual rate of 3 percent. In the main,
experience has shown that money can be attracted
and held at these lower rates and there are no signs
on the business horizon to indicate that there will
be any stiffening of either dividend or loan rates in
1940."
The Federal Home Loan Bank of Des Moines
reported that the average numerical rate of dividend
paid on savings in Federal associations in the Eighth
District for the year 1939 was 3.60 percent—a slight
reduction from the rate paid by these institutions in
1938. For the first six months of 1939 the average
numerical rate was 3.62 percent, moving downward
to 3.59 percent for the last half. Many of the larger
Federals in this District are in the lower dividend
brackets. In view of this fact, weighted averages
were computed to give effect to the dollar amounts
of private share capital on which the various rates
were paid and credited.
(Continued on p. 287)
255
THE THIRD ANNUAL "HUNT FOR FACTSII
PART 2
This second article, based on analysis of replies from
one out of every three members of the Bank System,
gives the national picture of business promotional expenditures during 1939 by savings and loan associations.
•
O F F I C E R S and directors have a primary interest in the answers to three questions about the
business development programs of savings and loan
associations during 1939: How much did these
reporting members spend? How did they allocate
their funds among the different forms of promotion
and advertising? What tangible results, in the
form of new mortgage loans and new private share
capital, did they obtain?
This article discusses the national pattern in
terms of these three questions. Later articles will
explore the trends in each Bank District, and by
size of association, to establish yardsticks enabling
an institution to compare its own promotional
activity in 1939 with the record of other associations
of similar size in its District, in neighboring Districts,
and in the country as a whole.
H o w M U C H D I D T H E S E ASSOCIATIONS S P E N D ?
Analysis of the third annual " H u n t for F a c t s "
questionnaire reveals that 1,222 members reported a
grand total of $2,303,284 spent last year for various
types of business promotion—$1,885 for each institution in the survey. The average reporting association had assets of $1,490,000 on December 31, 1939,
and a gross operating income of $76,000 for the
calendar year 1939. T h e expenditure for business
promotion of $1,885 per association amounted to
2.48 percent of gross operating income, and to oneeighth of 1 percent (0.127 percent) of total assets as
of the end of 1939.
These averages conceal wide variations in the
size and range of business promotion expenditures.
Actual dollar disbursements varied from the maximum of $46,614 reported b y an association in the
Northwest to a low of $2.00.1
These variations are made strikingly clear when
we look a t the actual distribution of the number of
reporting members b y the size of their 1939 business
promotion expenditures. This distribution is summarized in the following table, in which the outstanding facts are that only 9 percent of the members
spent $5,000 or more last year, that 30 percent spent
between $1,000 and $4,999, and that 61 percent
devoted less than $1,000 to business development.
I t is evident that although these disbursements in
total are large, running into several million dollars,
the typical savings and loan association is operating
on a limited budget for promotion—in the majority
of cases, less than $1,000 a year. Under such condiTable 7.—Distribution of 1,222 member savings
and loan associations/ according to amount of
business promotion expenditure in 1939
1939 business promotion expenditure groups
Over $5,000
$2,500 to $4,999
$2,000 to $2,499
$1,500 to $1,999
$1,000 to $1,499
$500 to $999
$250 to $499
$100 to $249
Under $100
_ .
Cumulative
Percent of
percent of
reporting as- reporting
associations
sociations
8. 92
10.89
4.00
6.06
9.33
15.30
14.40
16.20
14.90
8. 92
19. 81
23. 81
29. 87
39. 20
54. 50
68. 90
85. 10
100. 00
tions, it is all the more important for them to study
their markets, to apportion their funds among the
different media in accordance with the results that
they have checked and proven from earlier merchandising programs. I n brief, where funds are limited,
it is vital to make every advertising dollar count
by assuring its investment in productive forms of
promotion. 2
2 Recent articles in the FEDERAL H O M E LOAN BANK REVIEW describing
i The analysis of business promotion expenditures in this article is confined to
the 1,222 members that reported disbursement of some funds for this purpose in
1939, and excludes 39 members that returned schedules showing no promotional
spending last year.
256
methods of allocating funds for business promotion and testing results of programs are: "Savings and Loan Cooperative Advertising—Part 2," March 1940,
p. 190; "Customer Analysis as a Guide in Advertising," November 1939, p. 46;
and "Fingerprinting the Advertising Dollar," September 1939, p. 377.
Federal Home Loan Bank Review
There is a growing conviction that carefully
planned public relations programs produce results,
and that the merchandising of the services of savings
and loan associations is steadily becoming a more
important factor in their daily operation. Evidence
of this belief is found in successive increases in the
average amount allocated to business development.
In the current survey, actual business promotion
expenditures were reported by 1,222 associations for
1939, by 1,005 members for 1938 as well, and by
1,058 that estimated the figure for 1940. Although
the samples are not identical, the coverage is sufficiently broad to give a fairly close approximation
of the trend toward larger disbursements. Total
promotional spending per association averaged
$1,776 in 1938, $1,885 in 1939, and was estimated
at $2,068 for 1940. The $109 increase in the average
amount disbursed during 1939 represented a 6.1-percent gain over the preceding year, and the estimated
increase of $183 per association for 1940 would be a
9.7-percent expansion of the 1939 average figure.
We know from these statistics how much the
reporting members spent. The second step is to
ID
NEWSPAPERS
$974,351
&E& I
(2)
RADIO
$217,473
determine how these funds were used. Approximately 90 cents out of every dollar expended for all
forms of business promotion was used by associations
to advertise their own institutions and individual
services. Of the remaining 10 cents, 3 cents was
invested in cooperative advertising, and 7 cents
went to pay solicitors and for other miscellaneous
and undesignated uses. The actual dollar figures are:
Association individual advertising
$2, 065, 655
Association cooperative advertising
76, 370
Solicitors
126, 239
Miscellaneous
35, 020
Total business promotion expenditure
2, 303, 284
The following discussion is concerned solely with
analysis of the 90 cents out of every dollar that associations spent for individual advertising, issued exclusively under the name of the association. The
summary tabulation (Table 2) is the national picture
of the number of associations using each of the 12
media, and the relative proportion of association individual advertising expenditure devoted to each
classification.
(3)
PRINTED MATERIAL
$ 185,935
20.2%
MISC. ADVERTISING
$163,505
54.9%
(12)
COIN BANKS
$130,123
MOTION PICT THEATERS
$ 6,224
6.5%
km
OUTDOOR BULLETINS
$102,519
CAR a OTHER CARDS
$22,904
|
4.3%
1(10)
ILLUMINATED SIGNS
$36,719
PUBLICATIONS
$62,223
37.8%
16.6%
HOUSE ORGANS
$74,456
11.6%
OFFICE DISPLAYS
$ 89,223
52.2%
Only four out of the 12 different classes of advertising media which were tabulated in this survey were used by more than half the reporting members: newspapers,
miscellaneous, printed material, and office displays. Publications were used by nearly 40 percent of the members, while one association in every four employed coin
banks, and one member out offivelisted radio. The otherfivemedia were used less frequently: the range was from 18 percent in the case of outdoor bulletins to 4 percent for car and other cards. The bars in this chart indicate the percentage of reporting associations using each medium.
May 1940
226098—40
257
2
Table 2.—Distribution of association individual
advertising expenditures for 1939, according
to advertising medium
Associations
using medium
Medium
Number
Newspapers
1,150
Radio
247
655
Printed material
670
Miscel. advertising
294
Coin banks
213
Outdoor bulletins
637
Office displays
142
House organs - _
461
Publications
203
Illuminated signs
53
Car and other cards-_
79
Motion pictures
Total
Percent
Adver- of total
tising
adverPercent expenditising
of total
ture
expendnumber
iture
of associations
94.3 $974, 351
20.2 217, 473
53. 7 185, 935
54.9 163, 505
24. 1 130, 123
17.5 102, 519
52.2
89, 223
74, 456
11.6
62, 223
37.8
36, 719
16.6
22, 904
4.3
6,224
6.5
47. 2
10. 5
9.0
7.9
6. 3
5.0
4.3
3.6
3.0
1.8
1. 1
0.3
2,065,655
100.0
Examining Table 2, we find that approximately
47 cents of the association's dollar for individual
advertising was spent in newspapers in 1939, 11 cents
for radio, 9 cents for printed material, 8 cents for
miscellaneous advertising, 6 cents for coin banks,
and 5 cents for outdoor bulletins. The remaining
14 cents was divided among the other six media,
with no classification receiving more than 4 cents
out of every dollar.
One fact stands out: the favorite advertising
medium of savings and loan associations is still the
newspaper. More than nine out of every 10 associations used newspapers to reach prospective
borrowers and investors, and they spent almost
half of their total advertising funds for this purpose.
One-twelfth of the members in the survey devoted
their entire association individual advertising expenditure to newspapers last year.
Comparing the results of the 1939 survey with
those for 1938, one finds few major changes in the
rankings of the different media. Addition of two
new categories, publications and coin banks, in the
1939 " H u n t for F a c t s " resulted in a more accurate
analysis and an accompanying reduction in the
disbursements listed as miscellaneous. The most
pronounced upward shift in expenditure was for
radio advertising, which accounted for 10.5 cents out
of every dollar spent in 1939, as compared with 8.1
cents in 1938. There was no increase noted, how258
ever, in the proportion of total members using the
air waves.
We have now blocked in the rough outlines of the
national picture, showing how much reporting members spent and how they used their promotional
funds. The question which remains to be answered
is, "Were these programs productiveV
Since the effectiveness of advertising programs is
usually measured in terms of growth, executives will
want to know how much new private share capital
these associations received and the dollar volume
of their new mortgage loans.
Analysis of the record of 1,110 associations that
reported their total volume of new business in 1939
reveals that they made $357,890,000 in new mortgage loans—more than one-third of the total amount
of mortgage loans estimated to have been made by
all savings and loan associations last year. They
received $300,421,000 in new private share capital.
For the average association, this represented new
loans of $322,423 and new investments of $270,649.
Kelating the aggregate promotional expenditures
of this group of associations ($2,190,000) to their
total volume of new business ($658,311,000) we find
that for every dollar of new business these associations placed on their books, only one-third of 1 cent
was spent for promotion.
Although this is a modest expenditure for the
purpose of creating new business in comparison with
the amounts spent in other fields, it cannot be emphasized too strongly that if all associations were
using scientific techniques to assure maximum productiveness, the cost could be still lower to obtain
the same results, or greater results could be obtained
for the expenditure of the same amount of money.
Neighborhood Trends
{Continued from p. 254)
hoods in their communities. Of greatest interest is
the fact that growth of the high-rent neighborhoods
is the key to future changes in other residential
areas. Since this growth continues in the same
direction for a long period of time, mortgage lenders
can predict with some accuracy the basic movement
even for a number of years into the future. Determination of the rate and general direction of this
growth will help in estimating the risk involved in
making a long-term mortgage loan in any particular
residential neighborhood.
Federal Home Loan Bank Review
THE EFFECT OF THE WAR UPON BRITISH
BUILDING SOCIETIES
Building societies, English counterparts of the American
savings and loan association, have been operating
for more than eight months under war conditions.
This is the first of two articles describing some of
the difficulties which management has encountered.
•
T H E month of May usually signifies the peak
of home-construction and home-financing activity in the United States, and normally embodies the
same connotation throughout the British Isles.
May 1940, however, will mean little more to the
building industry or financial institutions of Great
Britain than any other month since the first weeks
of September 1939 when hostilities in the longthreatened European war actually began.
The restrictions subsequently imposed in England
upon normal living conditions have brought building operations almost to a complete standstill.
Only those buildings that were near completion and
required materials that were still available were
finished, and practically no new construction has
been undertaken except for the purposes of defense
or furthering the war.
Primary reason for the dearth of building has
been the stringent Government regulations regarding the use of building materials. Although apparently there are ample supplies of most materials
(lumber is the outstanding exception) the Ministry
of Supply has exercised rigid inventory controls
and special permits must be obtained for the use of
practically all products. Another contributing factor has been the lowered incomes of many families
which do not permit the assumption of increased
debt-loads. Further, housing built with the financial assistance of public authorities has been drastically curtailed under instructions from the Government.
These factors have all tended to create a situation
which, in the opinion of many British building authorities, may have serious consequences. They
have thrown into unemployment thousands of
skilled and unskilled workers whose only means of
livelihood is through the building industry. Similar
circumstances during the War of 1914-1918 led to
a general disintegration of the whole industry and
resulted in a serious shortage of housing facilities.
May 1940
The Building Industries National Council has
expressed "the immediate need for the industry as
a whole to be brought into consultation with the
Government to assist in the organisation of the
building programme, and to ensure consideration of
the industry's position."
Perhaps the most discouraging element in the
construction outlook, however, is one which would
prevail even though there were no restrictions upon
the use of building materials. I t is difficult for
anyone to think about building a new home or
dwelling of any type when there exists the possibility
that it may be blown to bits even before it has been
occupied. The problem of compensation for war
damage to properties, then, is of extreme significance
to every owner and particularly to the English
building societies.
W A R DAMAGE TO PROPERTIES
The backbone of the English building society
system, as of the savings and loan industry in this
country, is its huge investment in mortgages secured
by real estate—more than 90 percent of total assets.
Consequently, eventualities which endanger the
properties securing these loans are of vital concern
not only to the property-owner, but to the mortgageholder and to the individuals whose savings have
been invested in this type of security. Contemplation of the threatened widespread air bombardments has prompted the managers and directors of
the societies to petition the Government concerning its policy of compensation for damage resulting
from war action.
The position taken by the Government on the allimportant point has not been entirely satisfactory
to lending institutions and owners who are primarily
interested in preserving the security and safety of
their investments. Briefly, the Government proposes to pay compensation only after the end of
259
hostilities "in the light of the country's financial circumstances at that time, and of the total damage
suffered." Payments will be linked to the material
costs and property values in March 1939, and all
claims will be met on that basis, regardless of the
actual cost of repairs which must be made within a
reasonable time after the damage occurs.
Because the provisions of this scheme have seemed
vague and indecisive to many Englishmen, numerous
attempts have been made to set up private mutual
benefit arrangements whereby the property owners
contribute to a common pool out of which those
suffering losses are paid. Even these plans have
now been placed under the careful supervision and
regulation of one of the Government bureaus. I t
is the Government's contention that voluntary or
compulsory contributory programs discriminate
against the property owners, whereas the responsibility for such damage should be shared by the community as a whole.
Fortunately, the large number of mortgages and
broad geographical distribution of the properties
which secure them tend to diversify and minimize
the amount of risk for the individual society. For
the owner-occupant or real-estate speculator, however, the insecurity of present provisions for war
damage has a detrimental effect on values and presents a definite barrier to the sale of properties.
THE
EFFECT
UPON
THE
NORMAL
FUNCTIONS OF
BUILDING SOCIETIES
Turning to the conventional functions of the building societies—making mortgage loans, securing their
repayment, accepting savings deposits and investments, and paying withdrawal requests upon notice
—it would seem that most of these are being performed with a regularity which approaches normalcy.
The exception, which is obvious from the discussion
of the stalemate in construction, is the granting of
mortgage loans. New advances are limited almost
entirely to those arising out of the buying and selling
of existing properties and refinancing activities.
There were many projects in the "consideration"
stage at the outbreak of the war, and as a general
rule such commitments were followed through where
materials were available.
MORTGAGE REPAYMENTS
With the economic livelihood of mortgagors completely upset by war conditions, the problem of loan
repayments becomes an increasingly important ele260
ment in the operation of these societies. Borrowers
who have been drafted, or whose incomes have been
drastically reduced, are finding it difficult to adhere
to amortization schedules arranged previously under
normal circumstances.
"The treatment of the borrower in war-time is a
matter of great importance," said the President of an
association of building societies. "Every manager,"
he continued, "could tell of instances of almost unbelievable distress directly due to war conditions,
mostly arising in small businesses of one kind or
another, but there is the larger field where men serving in the forces have suffered a reduction in income,
and they must be the subject of our utmost consideration. . . . The task of deciding what is fair is not
always easy, but there is a very remote chance of any
society suffering vital damage by leaning to the generous side, when in doubt."
In addition to this attitude of management, the
British Government has taken several positive steps
to provide material assistance for the civilian population as well as those engaged in actual war work.
The Military Service Committee has made possible
the granting of a special allowance to enlisted men
amounting to as much as £2 per week (approximately $8 to $10) which may be applied directly to
the payment of rent or mortgage interest. Also, a
special act of Parliament [The Courts (Emergency
Powers) Act, 1939] places specific limitations on
foreclosure and repossession procedures where it can
be shown that "the debtor is unable to pay the debt
or perform the obligation by reason of circumstances
directly or indirectly attributable to the war."
The experience of the societies to date, as evidenced by printed reports, would not indicate that
payment arrearages have been accumulating at
much more than a normal rate. One explanation
for this may lie in the fact that the majority of persons directly involved in the war thus far have not
been "householders", but as the older age groups
are called to service, delinquencies may tend to
appear.
INVESTMENTS AND WITHDRAWALS
"Nervous funds" are usually a problem for all
financial institutions in crisis times, but the record
of the building society group during the first few
months of the war would seem to be an exception.
Several organizations reported that the volume of
withdrawals and notices during the last part of 1939
(Continued on p. 287)
Federal Home Loan Bank Review
«
«
FROM THE MONTH'S NEWS
ADVERTISING: "Budgets for this purpose
will be increased by 30 percent of American banks, according to a questionnaire
sent out by the Financial Advertisers
Association. Of the remainder, 65 percent will operate under the same appropriations. Only 5 percent will decrease
their budgets for the year."
The Month's Work, March 1940.
REEXAMINE: "Good low-cost housing,
available to much lower incomes than we
now reach, need not wait upon a long,
drawn out research program. What we
need most is to reexamine tools that are
now available and to use them more
intelligently."
Raymond V. Parsons, Survey
Graphic, February 1940.
TAKE A LEAF: "The modern savings
and loan association is taking a leaf from
the merchandising of successful retailers
in that it is endeavoring to have on its
shelves loan plans that will meet the needs
of all the desirable borrowers in the
community."
J. C. Morden, Stockholders'
meeting of the Federal Home
Loan Bank of Indianapolis,
Mar. 21, 1940.
STATISTICS: " . . . investment in housing
represents one-fourth of the national
wealth, and the Federal Government has
an interest of approximately $10,000,000,000 in the form of loans, commitments, or guaranties, in that field. Yet
this is one branch of our national economy
where reliable statistical information is
sorely lacking."
Excerpt from the 1939 Majority
Reports of the House and
Senate Committees on the
Census. Housing Legal Digest,
February 1940.
FRENCH CONFIDENCE: " P r e l i m i n a r y
statements of the operations of ordinary
savings banks for 1939 . . . are particularly encouraging as a proof of the confidence of small savers in the destiny of
France. For the period August 16 to
October 15, withdrawals exceeded deposits by 1,800,000,000 francs, but from
October 16 to the end of the year each
half-month showed an excess of deposits.
For the year as a whole, deposits exceeded
withdrawals by about 234,000,000,000
francs."
La Situation Economigue et
Financiere, Jan. 26, 1940.
(Quoted in Weekly Review of
Periodicals, Federal Reserve
System, Mar. 12, 1940.)
May 1940
» » »
Construction in suburban areas
". . . to a larger extent than formerly was the case, the construction of single-family houses is taking place in suburban areas and
beyond city limits. While, to some degree, this may be attributed
to the increasing influence of the automobile upon our social and
economic life, a substantial cause is the desire to avoid the increasingly heavy taxation on city real estate. I t should be noted that
one of the effects of this trend is to depress the already stagnant
market for the older houses in the cities."
Annual report of the President of the Federal
Home Loan Bank of New York.
Population and building
" 'In spite of the fact that our population in 1949 will be growing at
the rate of barely one-third the rate of the decade of the 'twenties,
nevertheless more people of home-owning age will be looking for
homes in 1949 than in 1925, the year of our greatest building boom/
The reason for this is that these people will have been born in the
decades of the 'tens and 'twenties of this century when the birth
rates were very much higher than they are today or than they will
be in 1949."
W. C. Bober, National City Bank
Letter, April 1940.
Business trends—1939
"Though still short of their 1937 positions, manufacturers' 1939
sales were more than 57 billion dollars, 18 percent higher than in the
previous year; wholesale dollar volume increased to 21% billion dollars, a gain of 7 percent; and retail sales were approximately 38 billion
dollars, 7 percent greater than in 1938." (See chart below.)
The value of inventories in all three of these fields increased during
1939, very largely as a result of a rapid building-up during the second
half of the year. Retailers reported a net increase of only 3 percent
in value of their stocks; manufacturers' inventories registered a 9percent net gain; and wholesalers increased their stocks by 11 percent
during the year, the report said.
Dun's Review, March 1940.
SALES AND INVENTORY TRENDS - INDEX NUMBERS
MANUFACTURING, WHOLESALING AND RETAILING,
1
1
1
(1935 = 100)
INVFWTnmFS
(JAN. 1,193 6=100)
• • _ •
1936
1937
RETAILING
1938
1939
1
t/j
^
1935
1935-1939
1
1936
1937
1938
WHOLESALING
1935
1936
1937
1938
MANUFACTURING
261
SIGNIFICANT TRENDS IN THE HOME-FINANCING
AND SAVINGS OPERATIONS OF INSURED
INSTITUTIONS DURING 1939
Statistical information on the trends in operations of commercial
banks in the field of residential real estate is available this year for
the first time. These data, together with similar material for
savings and loan associations, are presented in this article.
•
W I T H I N the last two years, considerable
progress has been made in broadening the base
of statistical information in the field of residential
construction and home financing. A little more than
a year ago, the Division of Research and Statistics
of the Federal Home Loan Bank Board initiated
its study of the monthly volume of mortgage recordings by each type of mortgagee in all parts of
the country. During last month, the Nation's first
complete census of housing was begun. When these
returns are assembled, tabulated, and analyzed, they
will provide an entirely new source of basic data.
One of the most recent additions to this field of
statistics resulted from revisions in the call reports
required of all commercial banks insured by the
Federal Deposit Insurance Corporation. Effective
as of December 31, 1938, these new forms redefined
the loan classifications of banks largely in terms of
the purposes for which the credit was extended and
also added a break-down of the real estate assets
according to the type of property. Figures for the
end of 1939 have been made available during the past
month and these, when compared with the 1938
year-end reports, make possible for the first time a
study of the significant trends in the home-financing
as well as savings operations of these financial institutions. To complete the picture for insured institutions, a similar analysis has been prepared for
1,978 insured savings and loan associations which
reported in both 1938 and 1939.
Cognizance must be taken, however, of the variation in the scope of the institutions included in this
report to evaluate properly the significance of all
figures. The deposits of commercial banks which
offer insurance of accounts include more than 95
percent of the deposits of all commercial banks.
Insured savings and loan associations, on the other
hand, account for only about 45 percent of the
assets of all operating savings and loan associations.
262
The group of 1,978 insured institutions used in this
study includes all associations which reported
throughout the entire year which were not affected
by mergers or consolidations.
T R E N D S IN PRIVATE SAVINGS IN INSURED
INSTITUTIONS
Although there was a net decrease of 124 in the
number of insured commercial banks during 1939,
their total dollar volume of savings deposits * rose
more than $426,000,000. These funds were invested
in 13,535 institutions on December 30, 1939, and
represented an average dollar increase over 1938 of
approximately $40,000 per bank. 2 Private repurchasable capital in 1,978 insured savings and loan
associations at the end of 1939 totaled $1,622,000,000,
a net gain of almost $255,000,000 in the 12-month
period. The average dollar increase per msured
savings and loan association equaled $129,000, reflecting the smaller number of these institutions.
On the basis of the net increment in the total
dollar amount of savings held, commercial banks led
in seven of the 12 Federal Home Loan Bank Districts, but the group of insured associations showed
larger gains in the Boston, New York, Cincinnati,
Little Rock, and Topeka regions. To compensate
for the difference in the number of the two types of
msured institutions, the shaded maps on the opposite page indicate the average dollar increase per
unit in each State. For the United States as a whole,
savings in the average insured commercial bank at
the end of 1939 totaled $932,600; in the insured
savings and loan association, $820,200.
i The savings deposit figures used in this article refer to the time deposits of
individuals, partnerships, and corporations as evidenced by savings passbooks.
They exclude certificates of deposit, Christmas savings and similar accounts,
and open accounts.
2
Total savings deposits in 13,659 insured commercial banks at the end of 1938
amounted to $12,195,956,000—an average of $892,900 per bank. On December
30, 1939, there were 13,535 insured commercial banks with savings deposits of
$12,622,325,000—an average of $932,600.
Federal Home Loan Bank Review
DOLLAR INCREASES IN LONG-TERM SAVINGS, BY STATES FOR 1939
— AVERAGE PER INSURED INSTITUTION •
c
$ 25,000
1 $ 25,000j
$ 50,000
3 $50,0001
$100,000
| $100,0001
$200,000
I OVER
I $200,000
NSURED SAVINGS AND LOAN ASSOCIATIONS
NSURED COMMERCIAL BANKS
To indicate gains in long-term savings during 1939, total savings at the end of 1938 and 1939 were divided by the number of insured institutions on those
dates. Increases in the averages were then plotted on the maps above. This means that in Ohio, for example, private share capital invested in the average
insured association rose $154,000. Savings deposits in the average insured commercial bank increased $48,000
May 1940
263
Table 1.—Changes in residential loans outstanding during 1 9 3 9 ]
[Amounts are shown in thousands of dollars]
Insured commercial banks
Federal Home Loan Bank District
United States
No. 1—Boston
No. 2—New York
No. 3—Pittsburgh
No. 4—Winston-Salem
No. 5—Cincinnati
No. 6—Indianapolis.-.
No. 7—Chicago
No. 8—Des Moines
No. 9—Little Rock
No. 10—Topeka
No. 11—Portland
No. 12—Los Angeles. _
Possessions
Actual dollar volume
Percent
change
Insured savings and loan associations
Average dollar change
per bank
Actual dollar volume
+ $247,099
+ $180, 280
+ 7.5
+ $15.0
- 1 , 755
-10,046
+ 9,896
+ 17,800
+ 12,805
+ 22, 943
+ 29,778
+ 20,836
+ 5,734
+ 3,414
+ 8,540
+ 60,052
+ 283
-0.8
-2.4
+ 3.2
+ 11.5
+ 4. 9
+ 14.2
+ 29.8
+ 19. 7
+ 12.7
+ 13.5
+ 19.0
+ 10.3
+ 19.7
-1.0
-1.4
+ 9.2
+ 12. 1
+ 10.5
+ 27. 1
+ 22.3
+ 10.2
+ 4.5
+ 2.7
+ 20. 1
+ 281. 0
+ 70. 7
+ 15,566
+ 24,770
+ 11,319
+ 37,348
+ 32,684
+ 10,896
+ 26,431
+ 21, 737
+ 19,975
+ 11,467
+ 12, 103
+ 22,413
+ 390
Percent
change
Average dollar change
per association
-16.4
+ $124. 9
+ 19.0
+ 17.5
+ 21.5
+ 30. 1
+ 9.4
+ 11. 1
+ 20.9
+ 23.2
+ 14. 1
+ 14.7
+ 16.8
+ 15.3
+ 17. 8
+ 288. 2
+ 195.0
+ 83.8
+157. 6
+ 108.5
+ 72.6
+ 129.6
+ 146.9
+ 78.0
+ 81.3
+ 114. 1
+ 194. 9
+ 97.6
i In studying Tables 1 and 2, attention is again called to the fact that it was impossible to obtain an identical sample of institutions for the insured commercial banks.
Inasmuch as the total number of insured institutions decreased during the year, it is possible that the totals for commercial banks may be understated in certain areas.
Reduction of the figures to an average per institution tends to minimize the influence of this factor.
T H E MORTGAGE-LENDING PATTERN
Total investments of insured commercial banks in
residential real estate loans amounted to almost $2,600,000,000 at the end of 1939. This was an increase
of $180,000,000, or about 7.5 percent over the previous
year-end balance. Approximately one-third of this
gain was registered by banks in the Los Angeles
Federal Home Loan Bank District as is evident from
Table 1. Indications of the trends in the Indianapolis and Los Angeles Districts were apparent almost
from the start of the development of the mortgagerecording statistics last year. The chart on page 149
of the February R E V I E W demonstrated the dominant
position of the banks and trust companies in the
mortgage-financing business in these areas during
1939.
Although the aggregate mortgages held at the end
of 1939 by the group of insured savings and loan
associations ($1,755,000,000) was less than that of
the banks, the net increase during the year was
somewhat larger. The balance of first mortgage
loans was up almost a quarter of a million dollars
and showed a 16.4-percent improvement over 1938
totals. Reflecting again the difference in the number of institutions, this signified a $125,000 increase
for each insured savings and loan association, as
against a $15,000 rise for the average commercial
bank. Table 2 shows by States and Federal Home
264
Loan Bank Districts the amount of residential real
estate loans outstanding at the end of last year for
each type of institution, and also indicates the change
from the previous year's balance.
T H E LIQUIDATION OF O W N E D R E A L E S T A T E
Many people have estimated the "residential
overhang" in this country to be approximately
$4,000,000,000. If this be true, then it can be said
that only about one-twelfth of it is held by commercial banks insured by the F D I C and savings and
loan associations by the FSLIC. Residential properties owned by operating insured commercial banks
at the end of 1939 amounted to slightly less than
$182,700,000, while the total for the group of 1,978
insured savings and loan associations in this study
was just over $150,000,000. The total real estate
owned by insured savings and loan associations at
the end of 1939 was equal to 8.55 percent of their
outstanding mortgage loans. For insured commercial banks, the comparable ratio was 7.03 percent.
On a "per institution" basis, the average real estate
holdings of insured commercial banks amounted
to $13,500; of the average insured savings and loan
association, $75,900.
Net reductions in residential real estate holdings
of these banks during 1939 equaled $40,700,000,
or about 18 percent of the balance at the end of
Federal Home Loan Bank Review
1938. Almost 40 percent, or two-fifths, of this
decrease was attributed to the State of New Jersey.
I t is not likely, however, that all of this property was
completely removed from the "overhang" position.
Extensive reconstruction activities were carried on
in New Jersey by the F D I C last year and a part of
this decline is probably due to changes in the status
of banks from an operating to a non-operating
classification during the time that their assets are
being liquidated.
The net reduction in real estate owned by the
savings and loan group reached almost $25,500,000—
14.5 percent of the holdings at the close of the previous year. The net dollar volume of dispositions
exceeded that of the commercial banks in five out of
the six Midwestern and Southwestern Federal Home
Loan Bank Districts (Des Moines was the exception).
The Cincinnati region showed the largest dollar decrease with the Indianapolis District next in line.
The Portland District was the only one to show an
increase (up 1.1 percent), and this was due primarily
to a 4.5-percent rise of savings and loan real estate
holdings in the State of Washington, although the
total increase amounted to only $40,000.
SUMMARY
The year 1939 was marked by increases in the
volume of long-term savings and mortgage loan investments of these insured institutions. The net
increase in the mortgage loans outstanding of insured
savings and loan associations was equal to 97 percent
of the net gain in their private repurchasable capital
accounts. The corresponding ratio for insured commercial banks was slightly above 40 percent. This
relationship is the natural result of the investment
programs of commercial banks: mortgage loans ordinarily make up only a small portion of the broad
and diversified field of loans and securities in which
they invest. Both types of institutions indicated
substantial improvement in their real estate owned
positions—liquidating approximately one-sixth of the
aggregate total holdings at the start of the year.
With this new source of data, and -with complete
information for members of the FederaljHome Loan
Bank System and for all savings and loan associations
when it is available, it is to be hoped that some day
it will be possible to prepare complete summaries of
the operations of all types of institutions operating
in these important phases of American economic
life—commercial banks, savings and loan associations, mutual savings banks, insurance companies,
andtheHOLC.
[Amounts are shown in thousands of dollars]
'
Federal Home Loan Bank
District and State
UNITED STATES
_
No. 1—Boston
Insured commercial
banks
Dec. 30,
1939
Change
during
1939
Dec. 30,
1939
Change during 1939
$2,596,999
+$180,280
211,685
-1,755
97,593
+15,566
-1,716 1
+415
- 3 , 250
+468
+1,041
+1,287
13,565
791
73,966
6,408
837
2,026
+2,995
+237
+10,921
+629
+319
+465
52,127
14,258 1
94,336
7,151
24,009
19,804
Connecticut
Maine
Massachusetts
New Hampshire
Rhode Island
Vermont
Insured savings and
loan associations
$1,754,981 1 +$247,099
401,794
-10,046
165,915
+24,770
New Jersey
New York
171,926
229,868
-6,693
-3,353
17,234
148,681
+721
+24,049
No. 3—Pittsburgh
319,182
+9,896 |
64,048
+11,319
Delaware
Pennsylvania
West Virginia
10,970
276,669
31,543
-333
+8,606
+1,623
268
48,797
14,983
+149
+9,036
+2,134
No. 4—Winston-Salem
172,935
+17,800
161,628
10,369
32,659
12,956
20,723
33,291
12, 340
4,353
46,244
+1,102
+3,636
+1,462
+2,378
+2,412
+1,367
+160
+5,283
272,583
+12,805
380,954
+32,684
30,306
225,811
16,466
+1,436
+11,963
-594
47,420
312,114
21,420
+4,187
+25,236
+3,261
184,752
+22,943
109, 222
+10,896
70,540
114,212
+7,709
+15,234
75,269
33,953
+5,465
+5,431
No. 2—New York
1
Alabama
District of Columbia
Florida
Georgia..
Maryland
_
North Carolina
South Carolina
Virginia
__.
No. 5—Cincinnati
Kentucky.
Ohio
_
Tennessee
_
No. 6—Indianapolis...
Indiana...
Michigan
6,328
20,710
31, 263
22,915 I
25,159 i
17,843
20, 340
17,070
1
,
,
3
r
+37,348
+1,215
+5,727
+8,677
+4,087
+5,751
+3,854
+3,956
+4,081
129,866
+29,778
152,710
+26,431
Illinois
Wisconsin
82,494
47,372
+18, 576
+11,202
127,321
25, 389
+22,493
+3,938
No. 8—Des Moines
126,437
+20,836
115, 515
, +21,737
,
30, 743
29,402
60,406
1,958
3,928
+5,638
+5, 587
+8,817
-83
+877
14,608
40,488
54, 532
3,830
2,057
+3, 502
+10,068
+7,420
+435
+312
51,035~
5,742
12,813
6,643
2,684
23,153
+5,734
+659
+2, 519
-30
+154
+2,432
161,981
11,937
70,192
5,166
4,192
70,494
+19,975
+1,846
+5,828
+1,006
+556
+10, 739
No. 10—Topeka . . ,
Colorado
Kansas
_
Nebraska
Oklahoma
28,665 j
9,335
9,188
3,592
6,550
+3,414 j
+1,760
+585
+909
+160
89, 590
19,686
22, 641
6,417
40,846
+11,467
+4,046
+1,802
+917
+4, 702
No. 11—Portland
Idaho
Montana
Oregon
Utah
Washington
Wyoming
53,464
4,457
2,656
9,712
13,708
20,495
2,436
+8,540
+1,326
+262
+723
+1,159
+4,803
+267 1
84,241
+12,103
4,957 1
+460
6,816
+472
12,728
+2,354
11,366
+1,313
45,540
+6,822
2,834 1
+682
No. 7—Chicago
Iowa
Minnesota..
Missouri
North Dakota
South Dakota
...
No. 9—Little Rock
Arkansas
Louisiana
Mississippi
New Mexico
Texas
No. 12—Los Angeles
Arizona
California
Nevada
Possessions
i
_
_
642,883 1 +60,052
7,264
+967
631,597
+57,878
4,022 1 +1,207
168,996 1
3,213
165,783
+22,413
+957
+21,456
+283
2,588 1
+390
1,718
265
May 1940
226096—40
Table 2.—Total residential mortgage loans outstanding at the end of 1939
REGISTERED HOMES BUILT UNDER
THE HOME BUILDING SERVICE PLAN
•
WILL the security outlast the mortgage? This
is the question that mortgage lenders are asking
today as applications for construction loans with
terms of 15 to 25 years become more numerous.
To this important question the Bank Board's
Federal Home Building Service Plan is providing
affirmative answer, for it is bringing to the smallhouse field an architectural advisory and construction
supervisory service which simplifies and strengthens
the lending institution's procedure of handling construction loans. The result of adequate supervision
of construction is definite safeguards for underlying
mortgage security.
Equally advantageous to home owners, the Plan's
architecturally approved designs, the technical supervision of construction and the "Certificate of Registration' ' which is awarded upon the house's completion, all are finding acceptance in the small-house
market where the Plan has been made available
through local lending institutions.
266
tEFT
BE
o R
Is l T ( H N|LL
ZV-Q"
This 2-bedroom small house represents one of the minimum cost dwellings
approved, built, and registered under the Home Building Service Plan. Construction cost of this house at Kalamazoo, Michigan, was approximately $2,500,
with a lot cost of an additional $200. The cost of construction includes the nominal architectural fees incidental to the service. Construction was of wood frame
with wide siding. Stone and Wagner, Inc., of Kalamazoo, were the architects.
It was financed by the First Federal Savings and Loan Association of
Kalamazoo.
Federal Home Loan Bank Review
Two registered homes recently built illustrate the
flexibility and variety of the Plan's portfolio of small
houses, which now contains over 425 approved
designs, with a price range of $2,500 to $7,500. In
addition, the Home Building Service Plan has approved 292 home designs for local use. The photograph of the attractive small house built in Kalamazoo, reproduced on the opposite page, is an
example of the introduction of architectural planning
into the small-house field for families of moderate
incomes. Construction cost of this 2-bedroom small
house was approximately $2,500.
At the top of this page is another home, built from
an approved design and registered under the Home
Building Service Plan. This attractive St. Paul
house offers an unusually spacious L-shaped, combined living-dining room. Plenty of windows supply
good light and cross-ventilation throughout. Good
planning and simple structural form assume an
attractive and liveable dwelling. A highly desirable
feature is the large playroom with an open fireplace
in the full basement.
Design sheets for these houses are available to
lending institutions, approved by the Bank Board to
offer the Plan, upon request.
May 1940
One of the most desirable features of this 4-room frame house is the large DlayfaSS&E1?!."1 ° p e nr f0iVr ?l pd l a , bc et ll n t hwesf tua.inrbasement.
Laundry, heatingand storaje
^ n f t h a Ae° n0use
S c !f?o r l e t^ a °,d a COvers - Sloping quarters are isolated from the
£L,o?I
ff
?
^
»
£
.
ed
passage
affords
sheltered access to the
o
£E^gJ a t 0ar m yr 0wx el ma t a?teer - 8 This$ attractive house was built in St. PauT MinneSnSrf L £ . %
f *^ ?'2°°', ^elusive of land. The exterior finish is
wood siding, the ceiling height eight feet. It was designed by Santo & Selles
267
SUMMARY OF RESIDENTIAL CONSTRUCTION
AND HOME-FINANCING ACTIVITY
I. Highlights of 1940*s first quarter:
A.
B.
C.
D.
E.
General business conditions: increased export trade.
Industrial production down 19.6 percent from December all-time high.
Residential construction: 1-family dwellings, up 5.5 percent/ total, up 2.8 percent over first-quarter 1939.
Savings and loan mortgage lending: 3-month total 22 percent higher than a year ago. Total volume:
$230,000,000.
Building costs: no significant trends in evidence.
Material prices slightly higher than in 1939, but labor rates a shade lower.
Foreclosures: new post-depression lows established.
Totals 29 percent below the same period last year.
II. The 50-percent increase in building of 1- and 2-family homes during March was partially offset by a 13-percent
family units. Result: total residential construction volume failed to keep pace with usual seasonal change.
III. March mortgage recordings totaled $300,000,000,
a 6-percent gain over March
decline in multi-
1939.
A. Recordings by savings and loan associations during March increased $19,000,000—more
by all other institutional lenders.
than the combined increase reported
B. Increase of $20,000,000
in new mortgage loans of savings and loan associations during March:
recorded by loans for reconditioning.
greatest percentage
gain
IV. Fractional reduction in cost of building a standard house reported in March.
Building materials: wholesale price index in March was
4 percent above August 1939/ dealers' prices of building materials were only 2 percent above.
V. After three months of successive declines, there was a slight increase in foreclosures during March,
normal for the period.
RESIDENTIAL
BUILDING ACTIVITY
AND SELECTED
although the rise was less than
INFLUENCING FACTORS
1926' 100
600
1929
268
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
Federal Home Loan Bank Review
RESIDENTIAL CONSTRUCTION and HOME-FINANCING ACTIVITY
•
SAVINGS and loan associations are continuing
as one of the predominant factors in the entire
field of home financing. Nearly one-third of all
mortgages of $20,000 and under now being recorded in
nonfarm areas of the United States are originated by
these mutual home-financing and thrift institutions.
Banks and trust companies, which are their nearest
competitors, are recording slightly more than onequarter of the total.
In spite of the pressure of excess funds for which
other lenders are seeking sound and profitable investment outlets, savings and loan associations during
the first quarter of this year increased their volume
of new mortgage recordings over the opening months
of 1939 more rapidly than did any other segment of
the home-financing structure.
Nearly two-thirds of all loans made by savings
and loan associations in current months are for the
purchase or construction of homes. This proportion
has been increasing slowly, but fairly steadily, since
the depression when home owners through necessity
placed more emphasis on repairing their properties,
on meeting current operating expenses, and when
occasion arose on refinancing their loans.
Single-family home building activity during the
first quarter of this year was somewhat higher than
in the corresponding period of 1939, while a decline
has been noted in apartment house construction
over this same period.
Expansion in the area of conflict in Europe, with
the increased use of military and non-military supplies and equipment, again raises the question
whether there will be diversion of materials and
labor from the building industry which in coming
months may raise building costs.
To date no evidence of such increases is evident.
During the past four months dealers' prices of building materials used in home construction have re-
ESTIMATED NUMBER AND COST OF FAMILY DWELLING UNITS PROVIDED IN ALL CITIES OF 10,000 OR MORE POPULATION
Source: Federal Home Loan Bank Board. Compiled from residential building permits reported to U.S. Dept. of Labor
MILLIONS
THOUSANDS
OF UNITS
COST
NUMBER
20
9k
JAN.
FEB.
MAR.
APR
MAY
JUN.
JUL.
AUG.
CONSTRUCTION LOANS MADE BY ALL SAVINGS 8
MILLIONS
OF DCM-LARS
30
25
15
OCT.
NOV.
DEC.
v
%
MAR.
APR.
MAY
JUN.
JUL.
AUG.
SEP
OCT
NOV.
DEC.
FEDERAL HOME LOAN BANKS
ADVANCES OUTSTANDING AT END OF MONTH
200
""**-«.
.--*'*
'^79
\
35
180
N
160
/
c
140 \94t
10
^4
?
S
1939
^
120
5
ftC.
FEB.
220
\
N
JAN.
MILLIONS
OF DCH.LARS
>
s: V
DEC.
LOAN ASSOCIATIONS
1939-*y/
^I94L
[ 20
SEP
too
JAN
FEB.
May 1940
MAR.
APR
MAY
JUN.
JUL.
AUG.
SEP
OCT
NOV. DE:cj
1
DE C
JAN.
FEB.
MAR
APR.
W \Y
JlJN.
JlJL.
AUG.
SEP
OCT.
~N0V. ~ " w.0!
269
[1926=100]
Type of index
Residential construction i
Foreclosures (metro, cities)...
Rental index ( N I G B ) . .
Building material prices
,
Industrial production i_
Manufacturing employmentManufacturing pay rolls
Average wage per employee..
Mar.
1940
Feb.
1940
Percent
change
45.8
104.0
85.5
93.3
95.4
99.1
93.9
94.8
57.1
99.0
85.5
93.2
101.0
99.7
93.7
94.0
-19.8
+5.1
0.0
+0.1
-5.5
-0.6
+0.2
+0.9
Mar.
1939
42.3
157.0
85.0
89.8
90.8
92.8
84.0
90.5
Percent
change
+8.3
-33.8
+0.6
+3.9
+5.1
+6.8
+11.8
+4.8
i Corrected for normal seasonal variation.
mained remarkably steady, while corresponding labor
costs have declined slightly in this period. Paint
materials and plumbing are the only building material groups on which the U. S. Department of Labor
has reported sizeable rises in wholesale price during
the November-to-March period.
tion". This would indicate that inventories are not
getting any larger, although there is still the possibility that for a time production may lag behind consumption to equalize the effect of recent months
when the opposite condition prevailed.
Income payments, a guide to consumer purchasing
power, have also declined during the first quarter of
the year from December levels. They are considerably above the levels of last summer, however, and
if maintained at the volume of the last three months
would yield an annual total of about $72,000,000,000—equal to the 1937 payments.
Wholesale commodity prices continued to recede
gradually during March. Building material prices
were almost unchanged, but during the second week
of April dropped to the lowest point of the year
(92.8). This compares with 90.1 in the second week
of last September.
General Business Conditions
•
ALTHOUGH the rate of decline was slowing, the
first quarter of 1940 ended with industrial
activity still on the downgrade. After a 7-month
climb through December to the highest levels since
1929, production began to dwindle almost as rapidly
as it had risen. By the end of March, the seasonally
adjusted Federal Reserve index had declined almost
20 percent from the December peak to a level similar
to that of August 1939.ffApril is also likely to show
a slight recession, judging from reports for the first
three weeks of the month.
Exports continued to play an important part in
the current level of business activity. Merchandise
shipped during the first three months of this year
totaled more than a billion dollars—a substantial
improvement over the levels of a year ago. The
rise has been highly concentrated in iron and steel
mill products, metal-working machinery, nonferrous
metals, aircraft, industrial chemicals, and unmanufactured cotton, but the total of other exports during
February was 21 percent above the same month of
1939. Shipments to the Northern European countries—Norway, Sweden, Denmark, and Finland—
which will now be restricted because of the extension
of war operations amounted to $20,000,000 in March,
or approximately 6 percent of the total volume.
Aside from foreign trade influences, the key to
business prospects in the immediate future seems to
lie in inventories. Accumulations were smaller in
February than in January, and in the opinion of
Federal Reserve economists, "it appears likely that
consumption currently is at least as large as produc270
Foreclosures
•
REAL estate foreclosures in metropolitan communities were 29 percent less for the first quarter
of this year than for the same period a year ago.
This represents a substantially greater decline than
that shown between the first quarterly periods of
1938 and 1939.
Although March foreclosure activity was 5 percent above that for the short month of February,
the movement is favorable in light of the normal
seasonal rise of about 14 percent. This advance
brought the index (1926 = 100) from 99 for February
to 104. In relation to the corresponding month of
last year, this March was 34 percent lower in foreclosure activity.
Of the 83 communities reporting for both February and March, 52 showed increases and 27 showed
decreases, while four indicated no change from
February.
Residential Construction
[Tables 1 and 2]
•
ACTIVITY among builders of 1- and 2-family
homes increased approximately 50 percent from
February to March in line with the usual seasonal
change experienced by total residential construction
in this period. This rise, however, was partially
offset by a drop of 13 percent in the building of
apartment units, so that total family dwelling units
placed under construction averaged only 21 percent
higher in March than in the preceding month.
Federal Home Loan Bank Review
Due to the failure of total residential building
volume to grow in March to the extent that it
normally does, the seasonally adjusted index which
is compiled from these figures dropped 20 percent
from February, thus counteracting the unusually
large increase shown in the previous month. The
March index, however, stood 8 percent above the
same month of 1939.
Nine of the 12 Federal Home Loan Bank Districts
had higher residential building volume in March
than in February, with no particular geographical
concentration of increases by States. Approximately
one-half of all residential building during March in
communities of 10,000 population or over was located
in the Los Angeles, New Tork, and Winston-Salem
Districts which together contain only about 36 percent of the total population located in cities of similar
size in the country as a whole.
Small-House Building Costs
[Tables S and 6]
•
COSTS involved in the construction of a
standard 6-room frame house receded fractionally
in March due to a slight drop in the material price
element. In comparison with the corresponding
month of last year, however, material prices charged
by dealers have increased over 1 percent in contrast
to a decline of 2 percent in labor rates.
Wholesale building material prices reported by
the U. S. Department of Labor rose much more
rapidly than dealers' costs from the outset of the
European War in September through December of
1939. Since the close of the year both of these
series have remained fairly stationary, but the
wholesale index for March was still 4 percent above
the August 1939 level as compared with a net rise of
only 2 percent in the dealers' price series.
Among the 25 communities reporting cost estimates
for a standard 6-room frame house in April, declines
in total cost of $100 or more during the preceding
quarter were reported in only two cities (Atlantic
City, New Jersey, and Casper, Wyoming). No
city reported an increase of this magnitude during
the past quarter year. There was no pronounced
concentration of rising and falling prices within
geographical areas. (See Table 3, page 276.)
New Mortgage-Lending Activity of
Savings and Loan Associations
[Tables 4 and S]
•
M A R C H lending activity was up nearly
$20,000,000, or 26 percent, from the February
total for all savings and loan associations. This
rise was seasonal in nature and was distributed among
all classes of associations and loan-purpose groups.
Greatest acceleration was shown in loans for reconditioning, which rose over 35 percent during the
month. As may be seen in the following table, the
refinancing group was the only one not rising at
least 26 percent in March.
Savings and loan associations made nearly
$230,000,000 in new loans during the first three
Construction costs for the standard house
[Average month of 1936=100]
Element of cost
Mar.
1940
Feb.
1940
Percent
change
Mar.
1939
Material-_
Labor
104. 4
110.3
104.5
110. 3
-0. 1
0.0
103.0
112.4
+ 1.4
—1 9
106.4
106.5
-0. 1
106. 1
+ 0.3
Total
May 1940
Percent
change
271
New mortgage loans distributed by purpose
[Amounts are shown in thousands of dollars]
March
1940
Purpose
Construction
Home purchase
Refinancing
Reconditioning
Other purposes
Feb.
1940
$26, 711 $20, 152
32, 168 25, 389
16, 769 14, 590
4,657 3,437
10, 063 7,954
Percent March Percent
change 1939 change
+
+
+
+
+
32.5 $21, 254
26.7 24, 705
14.9 14, 871
35.5 4,211
26.5 8,337
+25.7
+ 30.2
+ 12.8
+ 10.6
+ 20.7
90, 368 71, 522 + 26.3 73, 378 + 23.2
Total
months of this year—a 22-percent increase over the
same 1939 period. Although each class of loan
picked up in volume during the opening quarter of
1940, home-purchase loans have been the leaders
in the rise, followed closely by loans for new construction.
Among the different classes of associations, each
of which has improved its lending activity in comparison with the opening months of 1939, Federal
savings and loan associations indicated the greatest
gains. During the first quarter of this year, Federal
and State-member savings and loan associations
each accounted for about 40 percent of total loans
made.
New loans of all savings and loan associations in
the Chicago District were nearly 40 percent higher
in the first quarter of 1940 than in the corresponding
period of last year. This was the greatest expansion
of lending activity recorded in any District. Smallest
gains were shown by associations in the Little Rock
and Topeka areas, where lending volume rose 1
percent and 7 percent, respectively, over the first
three months of 1939.
Mortgage Recordings
in the advance. This increase, however, was well
under the rise of 32 percent occurring in the February-to-March period of 1939. Moreover, the
gain reported by each type of lender from February
to March was below that which occurred between
these same months last year. Savings and loan
associations accounted for more than $19,000,000
of the February-to-March increase, an amount
greater than the combined increase reported by all
other institutional lenders.
Nonfarm home mortgages recorded during the
first quarter of this year amounted to $818,731,000,
a gain of 12 percent over mortgage-financing activity
in the same period in 1939. All types of mortgage
lenders contributed to this rise, with increases ranging from 22 percent for mutual savings banks to 6
percent for banks and trust companies. Expanding
their volume of recordings during the first three
months of 1940 by $42,668,000 over the same period
in 1939, savings and loan associations accounted for
almost half of the increased business shown by all
mortgagees.
Mortgage recordings by type of mortgagee
[Amounts are shown in thousands of dollars]
Type of lender
PerPercent
PerCumuchange cent
lative cent of
of
from March record- total
Febings (3 record1940 months)
ruary amount
ings
1940
Savings and loan associations
+ 25. 1
Insurance companies
+ 8. 1
Banks, trust companies. _ + 21.9
+ 11.2
Mutual savings banks
+ 13.8
Individuals
+ 7.1
Others. _ _ _
Total- _. _- ._ . + 17.5
32.0 $247, 899
7.7
66, 423
25.2 204, 057
30, 548
3.5
17.2 144, 955
14,4 124, 849
100.0
30. 3
8.1
24. 9
3.7
17. 7
15.3
818, 731 100.0
[Tables 13 and 14]
•
DURING March, $300,420,000 of nonfarm
mortgages of $20,000 or less were recorded,
representing an increase of almost $17,000,000 or 6
percent from March 1939. All lenders except life
insurance companies participated in this rise, although with the exception of the increases shown by
savings and loan associations (16 percent) and mutual
savings banks (14 percent) the gains were relatively
small.
March mortgages recorded were 17.5 percent greater
than in February, with all types of lenders sharing
272
Federal Savings and Loan System
[Table 7]
•
THE accelerated lending activity of Federals
during March, in which all purpose classifications
participated, was responsible for a sharp rise in the
outstanding loans of these institutions. An identical
group of 1,371 Federal associations reported total
new loans of $37,400,000 in March. The balance of
mortgage loans outstanding increased by $19,300,000,
Federal Home Loan Bank Review
Progress in number and assets of Federal savings
and loan associations
[Amounts are shown in thousands of dollars]
Number
Type of
association
Mar.
31,
1940
Approximate assets
Feb.
29, Mar. 31, 1940 Feb. 29, 1940
1940
632
773
$465, 319
1, 158, 934
$454, 772
1, 143, 242
Total. __ 1,410 1,405
1, 624, 253
1, 598, 014
New
Converted
632
778
indicating repayments of principal during the month
of approximately $18,100,000. (See Table 7, page
280.)
Private repurchasable capital invested in this
group of Federals rose $19,200,000, or approximately
equal to the net growth in their mortgage portfolios.
This indicates that the flow of funds through Federals
is in balance, with funds being received through repayment of mortgages and from new share investments at the same rate that money is being disbursed
for loans on mortgage security and for repurchases of
share capital.
Federal Home Loan Bank advances outstanding in
Federally chartered savings and loan associations
receded by $4,800,000 in March in the comparable
reporting group, while the balance of funds borrowed
from other sources was reduced by $100,000.
Five more associations were operating as converted
Federals at the close of March than at the end of
February, bringing the total to 778; associations
organized by subscription to shares remained at 632.
The 1,410 members of the Federal System at the end
of March had assets of $1,624,000,000.
Federal Savings and Loan Insurance
Corporation
[Tables 7 and 8)
•
BY the end of March, 2,217 savings and loan
associations with assets of $2,580,000,000 had
their 2,528,000 accounts covered up to $5,000 each
under this system of Federal share insurance; total
private investments in insured associations amounted
to $1,929,000,000 at that time.
Reserves of $22,155,000 have been accumulated by
the Federal Savings and Loan Insurance Corporation
May 1940
since its inception in 1934. Sources of these funds
are primarily insurance premiums, admission fees,
and interest on investments, less expenses of administration and examination. As of the close of
March, the potential liability of the Corporation,
which includes all private capital up to $5,000 per
investor plus total creditor obligations of all insured
associations, amounted to $1,947,000,000.
Federal Home Loan Bank advances to insured
savings and loan associations continued in March
the decline started at the turn of the year. A net
of nearly $6,000,000 was repaid during March
by 2,110 comparable reporting associations, despite
the fact that funds were being loaned on mortgage
security in amounts greater than were being returned
through the repayment of loans and the investment
of new capital. (See Table 7, page 280.)
Federal Home Loan Bank System
[Table 9]
•
AT the end of the first three months of 1940,
the balance of advances outstanding of the 12
Federal Home Loan Banks had dropped to $137,642,000. This was a decrease of $43,671,000 since
the beginning of the year and resulted in bringing
the balance of advances outstanding to the lowest
point reached since November 1936. However,
advances totaling $10,772,000 for these three months
were slightly greater than those during the same
period last year, and repayments, which amounted
to $54,443,000, were only approximately $8,000,000
greater. More than one-half of the repayments was
received during the month of January following the
high volume of advances (a total of $18,724,000)
made during December for year-end dividend and
withdrawal demands.
Advances during March 1940 amounted to $4,375,000, and repayments totaled $11,248,000, which
caused a decrease of $6,873,000 in the balance of
advances outstanding. Advances during March
increased more than $2,000,000 over the preceding
month's volume and were slightly greater than during March of last year, while repayments were
approximately $3,000,000 less than in February
and were also less than the volume received for the
same month of last year.
Although every Bank District, with the exception
of Portland, reported repayments greater than
advances during the month, eight of the Banks
(Continued on p. 287)
273
Table 7.—Number and estimated cost of new family dwelling units provided in all cities of 10,000
population or over in the United States 1
[Source: Federal Home Loan Bank Board. Compiled from residential building permits reported to U. S. Department of Labor]
[Amounts are shown in thousands of dollars]
Number of family units provided
Jan.-Mar.
Monthly totals
Type of dwelling
Mar.
1940
Feb.
1940
Total cost of units
Monthly totals
totals
Mar.
1939
1940
1939
Mar.
1940
16, 283 10, 779 14, 842 35, 334 33, 484 $61,
1,154 1,000 1,092 2,920 2,462
2,
188
93
65
42
147
7,780 8,960 7, 294 23, 319 23, 924 24,
1-family dwellings
2-family dwellings
Joint home and business 2
3-and-more family dwellings
Mar.
1939
Feb.
1940
500. 3 $41,
720. 1 2,
215.4
082. 6 28,
Jan.-Mar. totals
689. 4 $58,
266. 1 2,
272.0
029. 6 23,
1940
755. 4 $135,
782. 5
6,
379.0
517. 3 74,
1939
112. 7 $130,
809. 6
6,
664.8
523. 5 75,
896. 4
249. 9
719.5
228. 7
25, 259 20, 804 23, 321 61, 720 60, 058 88, 518. 4 72, 257. 1 85, 434. 2 217, 110. 6 213, 094. 5
Total residential
1
Estimate is based on reports from communities having approximately 95 percent of the population of all cities with population2 of 10,000 or over.
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 March 1940, by Federal Home Loan Bank District and by State
[Source: Federal Home Loan Bank Board. Compiled from residential building permits reported to U. S. Department of Labor]
[Amounts are shown in thousands of dollars]
All residential dwellings
Number of family
dwelling units
Federal Home Loan Bank District
and State
Mar.
1940
U N I T E D STATES
-
No. 1—Boston
N o . 2—New York__
_
23, 321 $88, 518. 4 $85, 434. 2
17, 479
Mar.
1939
Mar.
1940
Mar.
1939
16, 027 $64, 435. 8
$61, 916. 9
2, 783. 8
635
537
2, 997. 6
2, 537. 8
__
__
__ _
_ _ __
__ _
_- _ _ _ _ _
- -
449
12
361
27
115
8
219
11
250
12
115
0
1, 958. 5
35.0
1, 491. 4
80.5
532. 1
21.6
982. 6
31.4
1, 274. 9
21. 8
473. 1
0.0
224
12
249
27
115
8
157
11
242
12
115
0
1, 1 1 1 . 0
35.0
1, 217. 4
80.5
532. 1
21.6
755. 4
31.4
1, 256. 1
21.8
473. 1
0.0
4,067
4,941
15, 976. 9
19* 108. 8
1,507
1,747
6, 958. 1
7, 634. 5
434
3,633
475
4,466
1, 961. 1
14, 015. 8
1, 639. 8
17, 469. 0
361
1,146
285
1,462
1, 702. 9
5, 255. 2
1, 375. 3
6, 259. 2
1,048
1, 333
4, 636. 6
5, 924. 3
983
1, 171
4, 454. 6
5, 385. 8
1
945
102
22
1,190
121
10.0
4, 219. 5
407. 1
141.0
5, 329. 3
454.0
1
884
98
13
1,040
118
10.0
4, 042. 5
402. 1
71.0
4, 864. 3
450. 5
3,942
3,452
11,914.2
10, 787. 9
2,474
2, 151
7, 814. 2
7, 350. 9
211
523
685
145
897
943
395.5
2, 101. 4
2, 336. 5
274.4
3, 482. 6
2, 921. 5
186
232
629
145
341
584
336. 4
1, 326. 9
2, 260. 5
274.4
1, 893. 1
1, 950. 3
-___
Alabama
-_ - - - - - —District of Columbia __ __
Mar.
1940
4, 119. 1
No. 3—Pittsburgh
274
Mar.
1939
Estimated cost
607
__
N o . 4—Winston-Salem
Mar.
1940
Number of family
dwelling units
972
N e w Jersey
N e w York
Delaware
Pennsylvania
West Virginia
Estimated cost
_____
_
Connecticut.Maine
_
MassachusettsN e w Hampshire
Rhode Island-Vermont
25, 259
-
Mar.
1939
All 1- and 2-family dwellings
Federal Home Loan Bank Review
Table 2.—Number and estimated cost of new family dwelling units provided in all cities of 10,000
population or over, in March 1940, by Federal Home Loan Bank District and by State—Contd.
[Amounts are shown in thousands of dollars]
All 1- and 2-family dwellings
All residential dwellings
Number of family
dwelling units
Federal Home Loan Bank District
and State
Mar.
1940
No. 4—Winston-Salem—Contd.
Georgia
Maryland
North Carolina __ _South Carolina
Virginia
1,207
5, 334. 3
5, 156. 4
1,035
862
4, 252. 1
3, 858. 4
121
950
136
343.8
4, 319. 6
670.9
351.5
4, 430. 5
374.4
126
653
256
121
605
136
301.8
3, 279. 4
670.9
351.5
3, 132. 5
374.4
2,051
1,952
8, 477. 4
8, 868. 4
1,725
1,498
7, 362. 4
6, 935. 9
622
1,429
581
1,371
2, 270. 5
6, 206. 9
2, 447. 4
6, 421. 0
317
1,408
305
1,193
1, 208. 5
6, 153. 9
1, 168. 9
5, 767. 0
818
810
4, 090. 7
4, 033. 6
773
663
3, 974. 0
3, 604. 9
632
186
521
289
3, 315. 3
775.4
2, 953. 7
1, 079. 9
608
165
517
146
3, 257. 6
716.4
2, 939. 7
665. 2
845
771
2, 982. 2
3, 065. 4
728
689
2, 694. 6
2, 755. 4
263
184
363
16
19
195
189
355
9
23
863.8
809.9
1, 228. 5
38.8
40.2
740.5
947.8
1, 298. 4
26.2
52.5
228
172
293
16
19
195
147
315
9
23
829.1
745.0
1, 040. 5
38.8
41.2
740.5
752.8
1, 183. 4
26.2
52.5
__
3,231
2,183
8, 649. 3 I 6, 414. 5
2,393
1,898
5, 870. 1
5, 290. 2
_
_ _ __ „
__
_- _-
107
1,067
279
66
1,712
63
229
183
62
1,646
222.7 1
3, 523. 0
476.2
182.9
5,
4, 244. 5
113.8
544. 2
271. 6
189. 7
295. 2
103
319
274
66
1,631
51
215
172
57
1,403
213.5
880. 1
471. 1
182.9
4, 122. 5
102.3
512.8
266.3
178. 7
4, 230. 1
_-
1,052
733
3, 377. 0
2, 385. 9
733
671
2, 421. 5
2, 301. 4
215
161
379
297
199
159
77
298
638. 5
444. 3
1, 321. 0
973.2
593.
468.
290.
1, 033.
1
8
6
4
192
141
103
297
152 1
148
77
294
2, 170. 6
890
607
3,180.6
2, 046. 5
36 !
72 !
241
126
19
396
11
44
141
115
275
21
126.4
170.6
885.9
455.4
84.7
1, 457. 6
30.0
94. 4
499. 0
430. 8
899. 6
92. 7
3,603
3, 533
12, 456. 0
12, 215. 2
251. 4
215. 5 87
14,521.3
14,380.9
3, 497
94.4 1
138. 2
19
59
3,445
29
234.4
12, 127. 2
94.4
208 5
11 868 5
138. 2
J
1,404
__ _
-_
No. 8—Des Moines
Iowa
Minnesota
Missouri
North Dakota
South Dakota
__ __
_
_
No. 9—Little Rock
Idaho
Montana
Oregon
Utah
Washington
Wyoming
_ __
__ _ _
-_
_ _ _ _
_ __
_.
1, 186
_
1
._ . .
._
May 7940
40
308 !
270
140
19
409
!
664 j 4, 093. 6
11
44
160
129
289 !
31 j 1,
132. 4
960. 4
940. 4
475. 4
84.7
500. 3
4, 643 1 4 , 6 6 8 I 14, 867. 1
No. 12—Los Angeles
Arizona
California. _
Nevada. —
Mar.
1939
$668. 2
785.7
634.7
283.9
860.6
_.
N o . 11—Portland
Mar.
1940
$595. 7
1, 085. 2
859.9
398.3
951. 3
Indiana
Michigan
Colorado
Kansas
Nebraska
Oklahoma
Mar.
1939
220
247
275
126
213
224
398
399
129
317
No. 6—Indianapolis.-
No. 10—Topeka
Mar.
1940
326
304
350
186
261
648
1,013
403
190
269
144 1
1,004
256
Arkansas
Louisiana
Mississippi _
N e w Mexico
Texas
Mar.
1939
$675. 8
1, 074. 3
924.4
286.0
1, 148. 9
_
-.
Kentucky
Ohio
Tennessee
Illinois
Wisconsin
Mar.
1940
Mar.
1939
Estimated cost
$1, 426. 0
3, 343. 2
931.2
404.6
975.8
No. 5—Cincinnati _. __
N o . 7—Chicago._
Number of family
dwelling units
Estimated cost
__
_
1
99
4, 525
19
64
4, 575
29
30.0
94.4
540. 5
456. 6
921. 4
127. 7 |
14,734. 6 _
609. 5
416. 7
422. 1
973.2
536.
442.
290.
1, 031.
1
8
6
9
275
Table 3.—Cost of building the same standard house in representative cities in specific months 1
NOTE.—These figures are subject to correction
[Source: Federal Home Loan Bank Board]
Cubic-foot cost
Federal H o m e Loan B a n k
District a n d city
T o t a l cost
1940
1940
Apr.
N o . 2—New Y o r k :
Atlantic City, N . J _ .
$0. 253
Camden, N . J
.248
Newark, N . J_
.238
.237
Albany, N . Y
__
.238
Buffalo, N . Y
.233
W h i t e Plains, N . Y
1939
1939
Apr.
1938
Apr.
Apr.
Jan.
Oct.
July
Apr.
$0. 239
.237
. 231
.233
.236
.229
$6, 084
5,956
5,708
5,682
5,703
5,580
$6, 262
5,942
5,705
5,619
5,683
5,600
$6, 272
5,829
5,654
5,602
5,914
5,538
$5, 867
5,574
5,492
5,522
5,607
5,433
$5, 745
5,676
5,536
5,585
5,662
5,501
1937
Apr.
1936
Apr.
5,722
5,556
$6, 546
5,873
5,658
5,717
5,836
5,906
$5, 806
5, 157
5,093
5, 162
5, 354
5,535
$5, 688
5,427
m
No. 6—Indianapolis:
Evansville, I n d
Indianapolis, I n d
South Bend, I n d . _
Detroit, Mich
G r a n d Rapids, Mich
.255
. 229
.246
.243
.230
.240
.249
.229
.255
.243
6,110
5,486
5,898
5,822
5,515
6,116
5,582
5,804
5,816
5,490
6,095
5,725
5,848
5,935
5,672
5,897
5,956
5,553
6, 118
5,824
5,750
5,966
5,506
6, 118
5,834
5,770
5,812
5,567
6,026
5,911
5,816
5,836
6,040
6 , 05 5
5,541
5, 570
5,458
5,538
5,265
5,118
No. 8—Des Moines:
Des Moines, Iowa__ _
D u l u t h , Minn_
St. Paul, Minn
K a n s a s City, Mo__
St. Louis, M o
F a r g o , N . Dak__
Sioux Falls, S. D a k
.264
.258
.271
. 250
.255
.244
.257
.261
.250
.274
.248
.252
.236
.259
6,342
6,188
6,497
5,998
6,114
5,847
6, 168
6,339
6,198
6,525
6,022
6, 159
5,863
6,099
6,303
6,043
6,550
5,960
6,052
5,841
6,051
6,287
6,000
6,548
6, 116
5,959
5,605
6,016
6,275
5,995
6,569
5,959
6,053
5,655
6,210
6,139
6,195
6,539
5,730
6, 122
5,868
6, 196
6,399
5,898
6,371
5,787
6,597
5,985
5,995
6,032
5, 616
5,233
5,304
6,064
5, 542
5,665
No. 11—Portland:
Boise, I d a h o __ - Great Falls, Mont— - _.
P o r t l a n d , Oreg
Salt Lake City, U t a h
Seattle, Wash _
_ __
Spokane, Wash
Casper, Wyo
-
. 261
.288
.223
. 251
.265
.263
. 261
.257
.293
.212
.251
.263
.254
. 272
6,253
6,906
5,351
6,014
6, 357
6,310
6,263
6,220
6,956
5,345
6,035
6,315
6,313
6,435
6, 112
6,887
5,283
5,998
6,310
6,282
6, 594
6,161
6,932
5, 132
6,016
6,255
6, 114
6, 522
6, 161
7,035
5,098
6,026
6,304
6,089
6,532
5,848
7, 137
5,081
5,961
6,428
6,545
6,486
6,128
7,023
5,829
5,923
6,623
6,543
6,382
5, 648
6,508
5, 234
5,707
5,624
5,892
1
The house on which costs are reported is a detached 6-room home of 24,000 cubic feet volume. Living room, dining
room, kitchen, and lavatory on first floor; three bedrooms and bath on second floor. Exterior is wide-board siding with brick
and stucco as features of design. Best quality materials and workmanship are used throughout.
The house is not completed ready for occupancy. It includes all fundamental structural elements, an attached 1-car
garage, an unfinished cellar, an unfinished attic, a fireplace, essential heating, plumbing, and electric wiring equipment, and
complete insulation. It does not include wall-paper nor other wall nor ceiling finish on interior plastered surface, lighting
fixtures, refrigerators, water heaters, ranges, screens, weather stripping, nor window shades.
Reported costs include, in addition to material and labor costs, compensation insurance, and allowance for contractor's
overhead and transportation of materials, plus 10 percent for builders' 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 three months from the same dealers,
and current wage rates are obtained from the same reputable contractors and operative builders.
276
Federal Home Loan Bank Review
RATE OF RESIDENTIAL BUILDING IN ALL CITIES OF 10.000 OR MORE POPULATION
REPRESENTS
THE ESTIMATED
NUMBER
OF PRIVATELY
Source: Federal Home Loan Bank Board.
FEDERAL
DISTRICT I
BOSTON
FINANCED
FAMILY
DWELLING
UNITS
PROVIDED
PER 100,000
POPULATION
Compiled from Building Permits reported to U S Department of Labor.
HOME
LOAN
BANK
DISTRICTS
DISTRICT 3
PITTSBURGH
DISTRICT 2
NEW YORK
DISTRICT 4
WINSTON SALEM I
r>939
n I
,94oJ
^J~~^
I
JAN FEB. MAR. APR MAY
JUN. JUL. AUG SEP OCT. NOV DEC.
DISTRICT 10
TOPEKA
LITTLE ROCK
mc
DISTRICT II
PORTLAND
I940>.
r—
r!939
&
FU4
.
1
1
J
-J
1931-35 AVG.
(193
W93/-35 AVG.
(-1931-35 AVG.
r""«~'~i.L...
,
r—'
:
.......
*. FEB. MAR. APR. MAY JUN. JUL. AUG. SEP OCT. NOV. BEC
JAN. FEB. MAR. APR. MAY JUN. JUL. AUG. SEP. OCT. NOV. DEC
UNITED
JAN FEB. MAR. APR "*Y
JUN JUL. AUG. SEP OCT NOV t
STATES AVERAGE
1931 - 1 9 4 0
Pl/xrv r
^ ^-J-UV^ jj
rT"L_
5
r
1931
1932
1933
1936
1937
1938
EXCLUDING NEW YORK CITY—
SEP
May 1940
OEO.
_J
I
I
I
L_
277
Table 4.—Estimated volume of new mortgage lending activity of savings and loan associations classified
by District and type of association
[Amounts are shown in thousands of dollars]
New loans
Federal Home Loan Bank
District and type of
association
March
1940
February
1940
Cumulative new loans (3 months)
Percent
Percent
change, New loans, change,
Feb. 1940 Mar. 1939 Mar. 1939
Percent
to
to
1940
1939
change
Mar. 1940
Mar. 1940
23. 2
28.3
21. 1
16.4
$228,834
96,035
91, 162
41, 637
$187,254
73,003
77,386
36,865
5,270
1,597
2,382
1,291
+ 15.0
+ 29. 1
+ 23.6
-18.2
18, 080
6,347
8,430
3,303
14,576
4, 148
6,911
3,517
+ 24.0
+ 53.0
+ 22.0
-6. 1
14.0
12. 1
19.9
11.2
5,713
2,095
1,544
2,074
+ 13.6
-11.3
+ 29.6
+ 26.9
19, 164
6,064
5,341
7,759
16,300
5,349
4, 146
6,805
+
+
+
+
+ 15.3
+ 42.9
+ 32.7
-12. 1
6,059
1,459
1,791
2,809
+ 19.3
+ 99.9
-1.3
-9.3
18, 905
6,713
4,457
7,735
14, 483
3,427
4,130
6,926
+ 30.5
+ 95.9
+ 7.9
+ 11.7
10, 048
5,013
3,844
1,191
+
+
+
+
35.8
27. 1
41.0
55.2
9,771
3,938
4,261
1,572
+
+
+
+
39.6
61.9
27.2
17.6
33, 988
15, 950
13, 402
4,636
26, 214
10, 150
11, 171
4,893
+29.7
+ 57. 1
+ 20.0
-5.3
15, 627
5,647
7,824
2, 156
11, 639
4,167
5,902
1,570
+
+
+
+
34. 3
35.5
32.6
37.3
12, 821
5,255
5,900
1,666
+ 21.9
+ 7.5
+ 32.6
+ 29.4
36, 791
13, 540
17, 858
5,393
30, 947
12, 032
14, 767
4, 148
+
+
+
+
18.9
12.5
20.9
30.0
District No. 6: Total
Federal
State member.
Nonmember. _
4,227
1,836
2,179
212
3,878
1,812
1,791
275
+ 9.0
+ 1.3
+ 21.7
-22.9
3,309
1,515
1,571
223
+27.7
+ 21.2
+ 38.7
-4.9
11, 443
5,249
5,450
744
8,965
4,214
4,221
530
+
+
+
+
27.6
24.6
29.1
40.4
District No. 7: Total
Federal
State member.
Nonmember..
10, 096
3,695
4,165
2,236
7, 153
2,699
3,209
1,245
+
+
+
+
41. 1
36.9
29.8
79.6
6,820
2,418
3,049
1,353
+
+
+
+
48.0
52.8
36.6
65.3
24, 130
8,803
10, 385
4,942
17, 398
5,870
7,661
3,867
+
+
+
+
38.7
50.0
35.6
27.8
District No. 8: Total
Federal
State member.
Nonmember..
5,232
2,444
1,508
1,280
3,819
1,805
1,226
788
+
+
+
+
37.0
35.4
23.0
62.4
4,348
2,033
1,406
909
+ 20.3
+ 20.2
+ 7.3
+ 40.8
12, 793
5,775
3,899
3,119
10, 229
4,598
3,443
2,188
+
+
+
+
25. 1
25.6
13.2
42. 6
District No. 9: Total
Federal
State member.
Nonmember. _
5,300
2,276
2,812
212
4,248
1,618
2,387
243
+ 24.8
+ 40.7
+ 17.8
-12.8
5,089
2,081
2,766
242
+ 4.1
+ 9.4
+ 1.7
-12.4
13, 357
5,458
7,313
586
13, 177
5,454
7,056
667
+ 1.4
+ 0.1
+ 3.6
-12.1
District No. 10: Total
Federal
State member.
Nonmember- _
4,526
2*505
973
1, 048
3,326
1,748
782
796
+
+
+
+
36. 1
43.3
24.4
31.7
4,187
2,189
1,028
970
+ 8.1
+ 14.4
-5.4
+ 8.0
10, 757
5,690
2,452
2,615
10, 098
4, 817
2, 824
2, 457
+ 6.5
+ 18.1
-13.2
+ 6.4
D i s t r i c t N o . i l : Total
Federal
State member.
Nonmember. _
3, 604
2, 234
1, 182
188
2,577
1,643
889
45
+ 39.9
+ 36.0
+ 33.0
+ 317. 8
2,720
1,619
1,014
87
+32. 5
+ 38. 0
+ 16.6
+ 116. 1
8,452
5,299
2,827
326
6, 356
3,755
2, 263
338
+33.0
+ 41.1
+ 24.9
-3.6
District No. 12: Total
Federal
State member.
Nonmember. _
8,328
4,393
3,707
228 •
6,713
3,503
3,120
90
+ 24. 1
+ 25.4
+ 18.8
+ 153.3 1
7,271
3, 612 |
3, 412
247 I
18, 511
9, 189
8, 793
529
+ 13.3
+ 21.3
+ 6.3
-9.5
368
241
484
643
$71, 522
29, 786
28, 941
12,795
+26.3
+ 28.4
+ 26. 1
+ 22.3
$73, 378
29,811
30,124
13, 443
District No. 1: Total
Federal
State member.
Nonmember. -
6,063
2,062
2,945
1,056
6,155
2,079
2,790
1,286
-1.5
-0.8
+ 5.6
-17.9
District No. 2: Total
Federal
State member.
Nonmember_ .
6,491
1,859
2,001
2,631
5,694
1,658
1,669
2,367
+
+
+
+
District No. 3: Total
Federal
State member .
Nonmember. -
7,231
2,916
1,767
2,548
6,272
2,041
1,332
2,899
District No. 4: Total
Federal
State member.
Nonmember. .
13, 643
6,374
5,421
1,848
District No. 5: Total
Federal
State member.
Nonmember_ -
United States:
278
Total. _
Federal
State member.
Nonmember. .
$90,
38,
36,
15,
+
+
+
+
+ 14.5
+21. 6
+ 8.6
-7.7
20, 974
11, 147 1
9,348 1
479
+
+
+
+
22.2
31.5
17.8
12.9
17.6
13.4
28.8
14.0
Federal Home Loan Bank Review
Table 5.—Estimated volume of new loans by all savings and loan associations, classified according to
purpose and type of association 1
[Amounts are shown in thousands of dollars]
Type of association
Purpose of loans
Total
loans
Mortgage loans on homes
Period
Construc- Home pur- Refinanction
ing
chase
Reconditioning
Loans for
all other
purposes
Nonmembers
Federals
State
members
$797, 996 i $286, 899
$333, 470
$177, 627
$220, 458
$265, 485
$160, 167
$58, 623
$93,263
40, 889
16, 648
52, 069
21, 056
37, 018
14, 391
12, 024
4,953
22,413
8, 170
164,413
65,218
57, 657
23, 356
70, 787
27, 835
35, 969
14, 027
1939
301, 039
339, 629
182, 025
59, 463
104,227
986,383
400,337
396, 041
190, 005
Jan.-Mar
March
April
May
June
July__
AugustSeptember
October
November
December
1940
Jan.-Mar
53, 380
21, 254
23, 727
26, 646
29, 919
26, 865
29, 863
27, 854
29, 255
26, 607
26, 923
61, 326
24, 705
29, 903
31, 289
32, 228
29, 638
32, 282
31, 367
33, 383
30, 434
27, 779
39, 171
14, 871
15, 384
15, 687
17, 123
15, 353
17, 005
16, 021
15, 835
15, 445
15, 001
11, 193
4,211
4,974
6,069
5,802
5,133
5,909
5,544
5,784
4,720
4,335
22, 184
8, 337 i
9,437 !
9,432
9,082
8, 183
9,979
8,946
9,040
8,870
9,074
187,254
73,378
83,425
89,123
94, 154
85, 172
95, 038
89, 732
93, 297
86, 076
83, 112 1
73, 003
29, 811
33, 400
36, 358
39, 094
34, 055
40, 645
37, 090
37, 854
34, 785
34,053
77, 386
30, 124
32, 562
35, 426
36, 465
34, 146
37, 340
36, 989
37, 847
34, 671
33, 209
36, 865
13, 443
17, 463
17, 339
18, 595
16, 971
17, 053
15, 653
17, 596
16, 620
15, 850
66, 351
79, 596
45, 358
11,549
25,980
228, 834
96, 035
91, 162
41, 637
January
February
March___
1
Revised figures
19, 488
20, 152
26, 711
22, 039
25, 389
32, 168
13, 999
14, 590
16, 769
3,455
3,437
4,657
28, 008
29, 786
38,241
25, 737
28, 941
36, 484
13, 199
12, 795
15, 643
1938
Jan.-Mar
March
_
7,963 J
66, 944
71,522 i
7,954 1
10,063 1 1
90,368 I 1
for 1936, 1937, and for the first 10 months of 1938 appear on p. 93 of the December 1938 issue.
Table 6.—Index of wholesale price of building materials in the United States
[1926 = 100]
[Source: U. S. Department of Labor]
Period
All buildand
ing mate- Brick
tile
rials
Cement 1
Lumber
Paint and Plumbing
paint ma- and heat- Structural
steel
ing
terials
1938: March.
91.5
91. 1
89.8
91.3
82.2
78.9
114.9
1939: March
April
May
June
July
August
SeptemberOctober
November.
December.
89.8
89.6
89.5
89.5
89.7
89.6
90.9
92.8
93.0
93.0
92.5
93.0
91.7
91. 1
90.6
90.5
91.0
91.5
91.6
91.6
91.5
91.5
91.5
91.5
91.5
91.3
91.3
91.3
91.3
91.3
92. 1
91.5
91.2
90.7
91.8
91.8
93.7
98.0
98.3
97.8
81.5
81.3
81.6
82.4
82.2
82. 1
84.7
85.7
84.9
85.5
79.3
79.3
79.3
79.3
79.3
79.3
79.3
79.3
79.3
79.3
107.3
107.3
107.3
107.3
107.3
107.3
107.3
107.3
107.3
107.3
1940: January. _
February.
March
Change:
Mar. 1940-Feb. 1 9 4 0 . . .
Mar. 1940-Mar. 1939_._
93.4
93.2
93.3
91.6
91.2
90.4
91.4
91.4
91.2
97.6
97.6
97.8
87.2
86.8
87.2
79.3
79. 1
81.0
107.3
107.3
107. 3
+ 0. 2%
+ 0. 1%
- 0 . 9%
- 0 . 2%
+ 2. 4%
0.0%
+ 0. 5%
-2.3%
+ 2. 1%
0.0%
- 0 . 3%
+ 3. 9%
+ 6.2%
+ 7.0%
1
Based on delivered prices at 48 cities and introduced into the calculation of the Bureau's general indexes of wholesale
prices beginning with March 1939.
May 1940
279
Table 7.—Monthly operations of 1,371 identical Federal and 739 identical insured State-chartered
savings and loan associations reporting during February and March 1 9 4 0 1
[Amounts are shown in thousands of dollars]
1,371 Federals
739 insured State members
Type of operation
March
Share liability at end of month:
Private share accounts (number) . _
Total
March
February
Change
February
to March
1, 475, 497
Percent
+ 1.1
970, 945
966, 894
Percent
+ 0.4
$1, 175, 251. 7 $1, 156, 068. 2
192, 680. 2
192, 680. 2
+ 1.7
0.0
$697,
864. 3
2
38, 837. 1
$693,
072. 6
2
38, 762. 1
+ 0. 7
+ 0.2
1, 491, 406
Paid on private subscriptions.
Treasury and HOLC subscriptions
Change
February
to March
February
1, 367, 931. 9
1, 348, 748. 4
+ 1.4
736, 701. 4
731, 834. 7
+ 0. 7
Private share investments during month
Repurchases during month
34, 935. 1
15, 920. 8
36, 278. 5
15, 746. 6
-3.7
+ 1. 1
14, 692. 2
10, 173. 2
14, 770. 5
9, 698. 8
-0.5
+ 4. 9
Mortgage loans made during month:
a. New construction
____
b. Purchase of homes.. _ _
c. Refinancing _
___
d. Reconditioning.
_ __ _
__ _
e. Other purposes- _
_
_ _ _ _ _
14, 286. 2
11,260.6
7, 487. 8
1, 492. 2
2, 919. 8
11,056.6
8, 431. 6
6, 544. 3
1, 044. 4
2, 189. 4
29.2
33.6
14. 4
42. 9
33.4
5, 155. 5
5, 931. 8
3, 341. 9
866.4
1, 922. 5
4, 123. 0
4, 393. 6
2, 676. 4
529.7
1, 804. 9
+ 25.0
+ 35.0
+ 24.9
+ 63. 6
+ 6. 5
37, 446. 6
Total
Mortgage loans outstanding end of month. _ 1, 292, 302. 7
29, 266. 3
1, 273, 023. 9
+ 28.0
+ 1.5
17, 218. 1
660, 044. 0
13, 527. 6
652, 110.4
+ 27.3
+ 1.2
73, 120. 6
3, 362. 3
77, 942. 6
3, 463. 4
-6.2
-2.9
28, 922. 9
2, 755. 1
29, 711. 4
3, 009. 0
-2.7
-8.4
76, 482. 9
81, 406. 0
-6.0
31, 678. 0
32, 720. 4
-3.2
1, 592, 146. 8
1, 569, 683. 5
+ 1.4
907, 735. 6
901, 194. 4
+ 0.7
Borrowed money as of end of month:
From Federal Home Loan Banks. _ _
From other sources _ _ _ _ _ _
Total -_ __
_ _
Total assets, end of month
1
2
+
+
+
+
+
The total of 2,110 associations represents 95 percent of all insured institutions operating during February.
Includes only HOLC subscriptions.
Table 8.—Institutions insured by the Federal Savings and Loan Insurance Corporation
[Amounts are shown in thousand of dollars]
Cumulative number at specified dates
Number of
private
investors
in repurchasable
shares *
Assets
Private
repurchasable
capital
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Feb. 29, Mar. 31,
1940
1940
1939
1938
1936
1937
Mar. 31,
1940
Mar. 31,
1940
Mar. 31,
1940
808
777
632
1, 013, 200
1, 094, 000
421, 200
$953, 118
1, 158, 675
465, 319
$730, 953
887, 173
310, 875
2,217
2, 528, 400
2, 577, 112
1, 929, 001
Type of association
State-chartered associations
Converted Federals
New Federals
Total
...
382
560
634
566
672
641
737
723
637
799
763
634
1,576
1,879
2,097
2,196
2
809
772
632
2,213
3
1
This series revised to agree with schedules submitted each month by insured institutions. Private investors in repurchasable 2shares in insured State-chartered members numbered 931,600 in June 1939; no other association type revised.
In addition, 1 Federal with assets of $237,000 had been approved for conversion but had not been insured as of Feb. 29.
* In addition, 1 Federal with assets of $259,000 had been approved for conversion but had not been insured as of Mar. 31.
280
Federal Home Loan Bank Review
Table 9.—Lending operations of the Federal
Home Loan Banks
[Amounts are shown in thousands of dollars]
[Thousands of dollars]
Federal Home
Loan Banks
Boston
New York
Pittsburgh.
Winston-Salem
Cincinnati
Indianapolis
Chicago
Des Moines
Little Rock
Topeka
__
Portland
Los Angeles
Total
$64
553
336
633
213
686
239
232
210
116
335
758
$539
1, 102
781
1,381
1,471
980
1,417
1, 195
451
662
149
1,120
4,375 11,248
Jan.-March 1940.
March 1939
Jan.-March 1939March 1938. __ _
Jan.-March 1938.
February 1940
Advances
outstandAdRepay- ing,
Repay- Advances ments vances ments Mar. 31,
1940
March 1940
10, 772
3,898
9, 155
4,901
12, 694
Table 10.—Government investments in savings
and loan associations 1
$22
506
264
424
91
12
315
75
60
56
37
149
$703
1,379
715
2,423
2, 159
612
948
1,018
1,048
991
527
1,761
$4, 838
18, 600
13, 830
12, 135
13, 906
8,756
21, 394
12, 681
7,046
8,475
4,303
11, 678
2,011 14, 284 137, 642
54, 443
12, 899
46, 384
9,293
29, 663
161, 614
Home Owners' Loan
Corporation
Treasury
Type of operation
State
members
Federi Federals
als 2
Oct. 1935-Mar. 1940:
Applications:
Number
Amount
Investments:
Number
Amount
Repurchases
Net outstanding investments
Total
5,577
4, 607
1, 862'
970
$50, 401 $200, 592 $63, 039 $263, 631
4,914
723
4, 191
1, 831
$49, 300 $175, 635 $44, 448 $220, 083
$15, 158, $13, 158 $4, 071 $17, 229
$34, 142 $162, 477 $40, 377 $202, 854
March 1940:
Applications:
Number
Amount
Investments
Number
Amount
Repurchases
o
3
$70
3
$100
6
$170
0
o
o
o
0
3
$75
$215
3
$75
$215
0
183, 125
0
1
Refers to number of separate investments, not to number
of 2associations in which investments are made.
Investments in Federals by the Treasury were made
between December 1933 and November 1935.
Table 11.—Summary of operations of H O L C
Reconditioning Division through Mar. 3 1 , 1 9 4 0 1
Table 12.—Properties acquired by H O L C through
foreclosure and voluntary deed *
Type of operation
Cases received
2
Mar. 1,
June 1, 1934
Cumulative
1940
through
through
through
Feb. 29, 1940 Mar. 31, Mar. 31, 1940
1940
1, 132, 500
7,158
1, 139, 658
Contracts awarded:
735, 581
4,308
731, 273
Number._ __ _
Amount.
$147, 708, 814 $1, 019, 197 $148,728,011
Contracts completed:
730, 549
4,078
726, 471
Number
Amount
$145, 478, 697 $1, 062, 965 $146, 541, 662
H:1 All figures are subject to adjustment. Figures do not
include 52,269 reconditioning jobs, amounting to approximately $6,800,000, completed by the Corporation prior to the
organization of the Reconditioning Division on June 1, 1934.
3
Includes all property management, advance, insurance,
and loan cases referred to the Reconditioning Division which
were not withdrawn prior to preliminary inspection or costestimate prior to Apr. 15, 1937.
May 1940
Period
Prior to 1935
1935: Jan. 1 through Dec. 31
1936: Jan. 1 through Dec. 31
1937: Jan. 1 through Dec. 31
1938: Jan. 1 through Dec. 31
1939: Jan. 1 through June 30
July
August
September
October
__
November._
December
_
1940: January. _ _
February._
_
March
___
Number
_
___
___
_
Grand total to Mar. 31, 1940
_
__
_ __
__ _
9
1,097
20, 324
50, 206
50, 919
19, 509
2,773
2,857
2,590
2,445
2,356
1, 800
1,567
1,311
1,657
161, 420
i Does not include 9,296 properties bought in by HOLC at
foreclosure sale but awaiting expiration of the redemption
period before title in absolute fee can be obtained.
In addition to the 161,420 completed cases 926 properties
were sold at foreclosure sale to parties other than the HOLC
and 24,784 cases have been withdrawn due to payment of
delinquencies by borrowers after foreclosure proceedings were
authorized.
28!
Table 13.—Summary of estimated nonfarm mortgage recordings/ $20,000 and under, during
March 1940
(Am o u n t s
Federal
Home L o a n
Bank
District
and
State
Savings * loan
associ at ions
Number
UNITED STATES
No.
(--Boston.
_
Amount
1n s u r a n c e
companies
Number
38,734 $96,244
__
_
shown
a re
in
thousands
Banks and
Mut u a l
t rust companies savings banks
Amount Number
Amount
4,631 $23,084 24,288 $75,650
of
dolla rs)
Other
mortgagees
Indiv iduaIs
Number Amount Number
Amount
N u m b e r j Amount
7,806
206
1,180
740
2,778
1,415
4,563
1,387
3,364
825
2,607
225
255
1,622
151
159
93
777
500
5,256
465
522
286
47
13
119
II
10
6
304
46
683
58
53
36
222
ME
270
34
78
21
953
297
l»069
121
264
74
313
183
727
73
74
45
1,101
288
2,576
229
228
141
399
124
655
65
104
40
1,015
252
1,653
156
193
95
219
55
417
40
69
25
835
88
1,258
117
237
72
1,911
5,400
238
1,494
1,405
5,627
952
4,511
2,334
5,526
895
1,016
2,585
2,815
113
125
697
797
811
594
3,496
2,131
70
881
338
4,173
1,013
1,321
2,372
3,154
No. 3—Pittsburah
2,383
6,674
201
1,011
1,974
6,231
135
467
1,660
Del aware
59
2,062
262
157
5,939
578
32
143
26
175
695
141
58
1,430
486
274
5,031
926
26
102
7
98
364
5
106
1,352
202
6,150
13,928
672
2,786
2,176
5,850
28
137
303
489
830
698
862
1,753
384
851
462
2,249
2,255
1,161
2,013
3,227
628
1,933
73
32
234
110
26
114
32
51
298
249
917
468
141
376
112
225
195
79
292
405
243
332
217
413
502
499
634
807
757
956
560
1,135
6,321
17,156
501
2,520
2,853
8,575
1,012
4,950
359
2,330
14,047
779
98
297
106
356
1,734
430
425
1,886
542
1,196
6,351
1,028
84
2,732
5,301
490
2,347
2,612
7,074
1,973
759
3,448
1,853
185
305
803
1,544
879
1,733
2,093
4,981
3,094
8,276
258
1,430
1,293
2,241
853
6,216
2,060
193
.65
1,017
413
783
510
2,699
5,692
404
2,080
812
817
899
94
77
1,613
2,009
1,709
265
96
109
169
94
9
23
579
814
594
34
59
3,059
329
1,036
200
83
1,411
7,107
623
2,888
344
182
3,070
660
23
80
30
3,117
67
411
116
527
2,531
5,278
202
338
677
507
1,009
833
1,199
1,021
2,225
19
61
59
63
1,796
3,905
107
160
411
195
856
67
222
350
891
427
1,828
187
3,553
76
3,460
17
No. 2—New York
New Jersey
New York
West Virainia
No. 4—Winston-Salem.
_
Alabama
D i s t r i c t of Columbia
Georgia
Maryland
North Carolina
South Carolina
No. 5 - - C i n c i n n a t i
Ohio
No. 7--Ch icaao
No. 8--Des Moines
Minnesota
North Dakota
South Dakota
No. 9 — L i t t l e Rock
No.
No.
10—Topeka
II—Portland
_
Idaho
Utah
-
Amount
per
capita
Total
Number | Amount
2,823 $10,543 27,658 $51,596 13,655 L&43,303 ! l l l , 7 8 9 | $300,420 1
2,505
Connect icut
Maine
Massachusetts
New Hampshire
Rhode Is.land
j
_
7,078J
l,425J
745
3,810
374
494
230
4,985
1,471
12,495
1,146
1,497
704
1,264 1 4,865
8,103j
27,423
550
7I4|
1,946
2,919
3,452
4,65l|
11,434
15,989
3,690
892
3,043
7,245|
21,116
202
3,155
333
24
775
93
117
2,804
122
305
5,864
1,076
1,023
17,988 j
2,105!
4,641
7,277
2,039 1
5,093
15,706
35,071
482
216
755
711
358
920
539
660
651
681
1,826
636
853
1,017
439
1,174
231
273
406
113
201
427
102
286
543
1,134
1,090
246
470
789
93
728
1,284
1,069
2,517
2,037
1,718
3,546
1,27*
2,456
4,812
6,722
3,318
4,371
6,365
1,832
5,195
3,849
13,165
34,995
28|
137
84~j
293
1,682
2,602
1,724
293
209
1,179
294
250
2,094
258
80
659
205
2,211
985 1 1,433
1,824
9,055
2,286
4,337
26,730
3,928
30
41
1,022
1,703
646 j 2,192
7,532
18,658
30
41
402
620
566
1,137
218
428
513
1,679
3,687j
3,845
7,464
11,194
4,670
8
18
1,472
3,465
1,036
4,704
7,16li
22,563
2,996
1,674
1
7
2
16
661
811
1,826
1,639
842 1 4,136
16,193
6,370
1,859
4,061
23
69
2,367
4,164
572
424
725
72
66
1,172
908
1,783
94
104
416
509
1,328
71
43
684
921
2,413
70
76
r47
174
886
61
5|
2,523
824
107
87
96
70
464
2,115
212
209
226
250
1,218
2,139
201
290
217
129
1,302
3,927
316
731
307
196
2,377
813
859
2,151
1,714
80
221
240
272
120
324
49
366
277
712
179
983
648
300
173
593
281
906
1,380
3,087
16
21
68
48
128
57
87
219
134
409
,90
51
194
303
687
55
313
121
336
716
1,459
142
1,347
194
119
458
170
320
86
9,721
518
3,400
6,313
23,431
181
9,500 1
40
8
508
2
22
138
3,373 ! 6,145
422
22,915
94
L
5
1
30
23
149
69
444
8
25
141
419
5,893
2,26 ij
$3.25
22,298 1
3.28
2.35
3.03
2.85
2.23
2.85
—___——
2.92
1.35
5.33
2.05
1.64
1.88
9.89
5.65
2.23
3.14
4 05
2.23
3,53
3.02
4.74
2.80
3*08
2.76
194
568
4,721
2,4401
1,273
3,972
8,625
20,038
323
536
2,897
189
27
2,056
2,116
3,932]
307
214
4,371
5,257
9,396
652
362
2.93
3.15
3.74
2.30
1.20
1,375
85 |
194
100
II
985
4,327
152
684
220
30
3,241
8,057
745
1,687
643
293
4,689
20,593
1,370
4,923
1,213
658
12,429
1.86
3.87
1.87
2.49
3.58
2,409
861
2,179
6,167
12,830
1,085
364
223
737
204
161
103
393
670
381
224
904
1,329
1,523
891
2,424
1,987
671
2,057 [ 5 , 6 2 4
204
227
713
264
453
126
88
13
166
30
352
22
495
138
364
40
578
1,305
52
746 t
1,205
2,484
44 1
230
11,482 1 1,049
770
288
10,541
5,541
|
64 1
'71
27
1,016
J
6
4,415
17,326
2,945
2,877 !
1,887
5,121
2.44
3.10
3.91
2.45
2.38
3.73
12,386
934
825
2,762
1,593
5,773
499
3.64
2.48
3.78
4.06
4.59
3.27
52,449
537
1,463 1
68
4,332 16,670
50,661
15 J
119 1
325 1
4.34
10.02
4.36
1
Based upon county reports submitted through the cooperation of savings and loan associations, the U. S. Savings and Loan League, the Mortgage
Bankers Association, and the American Tit le Assoc iation.
282
Federal Home Loan Bank Review
Table 14.—Estimated volume of nonfarm mortgages recorded, by type of mortgagee
[Amounts are shown in thousands of dollars]
Savings and
loan associations
Insurance
companies
Mutual
savings
banks
Banks and
trust
companies
Individuals
Other
mortgagees
All
mortgagees
Period
Total
Percent
Number:
1939: March*
April
May
June
July
August. _ _
September..
October
November. _
December
1940: January *
February i__
March
34, 002
38, 167
43, 648
43, 655
41, 048
44, 224
41, 946
42, 091
38, 671
38, 018
30, 005
31,015
38, 734
32.4
34.5
34.8
34. 1
34.6
35.3
35.6
34.6
33.3
33.6
31.3
32.8
34.7
4,498
5,240
6,009
6,335
5,946
6,014
5,352
5,636
5,443
5,694
4,392
4,240
4,631
Amount:
1939: March*
April
May
June
July
August
September. _
October
November. _
December. __
1940: January *
February i__
March
83, 268
94, 857
109, 652
113, 479
105, 890
112, 516
104, 548
105, 229
98, 889
95, 724
74, 711
76, 944
96, 244
29.4
31.2
31.4
31.5
32. 1
32.6
33.0
31.6
30.4
30.2
28.4
30. 1
32.0
23, 143
26, 839
29, 922
30, 017
29, 777
30, 796
28, 086
28, 503
28, 286
28, 990
21, 989
21, 350
23, 084
1
Total
Percent
Total
Percent
4.3
4.7
4.8
4.9
5.0
4.8
4.5
4.6
4.7
5.0
4.6
4.5
4.2
23, 553
22, 768
25, 658
26, 779
22, 860
24, 750
23, 627
25, 589
24, 594
24, 433
21, 061
20, 110
24, 288
22.4
20.6
20.4
20.9
19.3
19.7
20.0
21.0
21.2
21.6
22.0
21.2
21.7
2,522
2, 978
3,825
3,524
3,909
3,908
3,924
3,718
3,994
3,692
2,675
2,548
2,823
8.2
8.8
8.6
8.3
9.0
8.9
8.9
8.6
8.7
9.2
8.4
8.4
7.7
74, 099
73, 320
85, 417
89, 563
74, 960
80, 0.49
74, 577
84, 678
80, 484
80, 971
66, 342
62, 065
75, 650
26. 1
24.1
24.4
24.8
22.7
23.2
23.5
25.4
24.7
25.6
25.3
24.3
25.2
9,264
10, 108
12, 195
12, 048
13, 679
13, 844
13, 470
12, 966
14, 571
13, 550
10, 520
9,485
10, 543
Total
Total
Percent
Total
Percent
Combined
total
Percent
2.4
2.7
3.0
2.8
3.3
3. 1
3.3
3.0
3.5
3.2
2.8
2.7
2.5
27, 198
28, 441
30, 904
30, 710
30, 209
31, 174
29, 055
29, 577
27, 955
27, 034
24, 884
24, 193
27, 658
25.9
25.7
24.6
24.0
25.4
24.9
24.7
24.3
24. 1
23.9
25.9
25.6
24.7
13, 187
12, 976
15, 560
17, 002
14, 693
15, 339
14, 009
15, 195
15, 336
14, 370
12, 844
12, 548
13, 655
12.6
11.8
12.4
13.3
12.4
12.2
11.9
12.5
13.2
12.7
13.4
13.2
12.2
104, 960
110,570
125, 604
128, 005
118,665
125, 409
117,913
121, 806
115, 993
113, 241
95, 861
94* 654
111, 789
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
3.3
3.3
3.5
3.3
4.2
4.0
4.2
3.9
4.5
4.3
4.0
3.7
3.5
50, 625
55, 667
59, 453
58, 967
58, 056
58, 826
53, 018
53, 909
52, 183
49, 677
48, 026
45, 333
51, 596
17.8
18.3
17.0
16.4
17.6
17.0
16.7
16.2
16. 1
15.7
18.3
17.7
17.2
43, 216
43, 560
52, 815
56, 794
47, 621
49, 549
43, 457
47, 794
50, 699
47, 629
41, 095
40,451
43, 303
15.2
14.3
15. 1
15.7
14.4
14.3
13.7
14.3
15.6
15.0
15.6
15.8
14.4
283,615
304,351
349,454
360,868
329,983
345,580
317, 156
333, 079
325, 112
316, 541
262, 683
255, 628
300, 420
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Percent
Revised.
Directory of Member, Federal, and
Insured Institutions
I. INSTITUTIONS ADMITTED TO MEMBERSHIP IN
T H E FEDERAL HOME LOAN BANK SYSTEM BETWEEN MARCH 16 AND APRIL 15, 1940
DISTRICT NO. 1
VERMONT:
Middlebury:
Middlebury Co-operative Savings & Loan Association.
D I S T R I C T NO. 5
OHIO:
Portsmouth:
The Commercial Building & Loan Company, 843 Gallia Street.
DISTRICT NO. 7
WISCONSIN:
Milwaukee:
Consolidated Savings & Loan Association, 212 West Wisconsin Avenue.
First Bohemian Savings & Loan Association, 1872 North Twelfth Street.
Sherman Savings & Loan Association, 2800 West Center Street.
Sterling Savings & Loan Association, 707 North Broadway.
DISTRICT NO. 12
CALIFORNIA:
San Jose:
Nucleus Building & Loan Association, First & Santa Clara Streets.
284
WITHDRAWALS FROM THE FEDERAL HOME LOAN BANK
SYSTEM BETWEEN MARCH 16 AND APRIL 15,
1940
MARYLAND:
Baltimore:
North Gay Street Permanent Building Association No. 1 of Baltimore
City, 737 North Gay Street (voluntary withdrawal).
MISSOURI:
Kansas City:
Missouri Valley Savings & Loan Association, 909 Baltimore Avenue
(liquidation and transfer of 15 shares of Bank stock to First Federal
Savings & Loan Association of Kansas City).
WISCONSIN:
Milwaukee:
Residence Park Building <fe Loan Association, 3418 West Fond du Lac
Avenue (voluntary withdrawal).
Sterling Savings, Loan & Building Association, 707 North Broadway
(voluntary withdrawal).
II. FEDERAL SAVINGS AND LOAN ASSOCIATIONS
CHARTERED BETWEEN MARCH 16 AND APRIL
15, 1940
D I S T R I C T NO. 3
PENNSYLVANIA:
Bristol:
First Federal Savings & Loan Association of Bucks County, 118 Mill
Street (converted from The Merchants & Mechanics Building Association) .
Philadelphia:
Allegheny Avenue Federal Savings & Loan Association, 1847 Allegheny
Avenue (converted from The Alleghany Avenue Building & Loan
Association).
Rochester:
Rochester Federal Savings & Loan Association, 361 Brighton Avenue
(converted from Rochester Building & Loan Association).
Federal Home Loan Bank Review
PENNSYLVANIA— Contd.
Willow Grove:
Willow Grove Federal Savings & Loan Association, 75 North York Road
(converted from Willow Grove Building & Loan Association).
DISTRICT NO. 4
NORTH CAROLINA:
Charlotte:
First Federal Savings & Loan Association of Charlotte, 119 West Fourth
Street (new association).
DISTRICT NO. 5
OHIO:
Marion:
Home Federal Savings & Loan Association, 116 South Main Street (converted from The Home Building, Savings & Loan Company;.
DISTRICT NO. 7
WISCONSIN:
Milwaukee:
Green Bay Avenue Federal Savings & Loan Association, 3346 North
Green Bay Avenue (converted from Green Bay Avenue Mutual
Building & Loan Association).
III. INSTITUTIONS INSURED BY T H E FEDERAL
SAVINGS AND LOAN INSURANCE CORPORATION
BETWEEN MARCH 16 AND APRIL 15, 1940
DISTRICT NO. 2
N E W JERSEY:
Ridgewood:
The Ridgewood Building & Loan Association, 27 North Broad Street.
DISTRICT NO. 5
KENTUCKY:
HopkinFville:
Hopkinsville Federal Savings & Loan Association, First City Bank
Building.
OHIO:
Celina:
The Mercer County Building & Loan Association Company, 130 West
Market Street.
Marion:
Home Federal Savings & Loan Association, 116 South Main Street.
DISTRICT NO. 7
WISCONSIN:
Milwaukee:
Consolidated Savings & Loan Association, 212 West Wisconsin Avenue.
First Bohemian Savings & Loan Association, 1872 North Twelfth Street.
Sherman Savings & Loan Association, 2800 West Center Street.
Sterling Savings and Loan Association, 707 North Broadway.
Resolutions of the Board
A M E N D M E N T TO R U L E S A N D R E G U L A T I O N S FOR
INSUR-
A N C E OF ACCOUNTS, RELATIVE TO METHOD OF
PAYMENTS TO EACH INSURED MEMBER IN EVENT OF
DEFAULT: Adopted April 8, 1940; effective April 10,
1940.
In order to provide for prompt settlement of insurance in the event of a default by an insured institution, the Board of Trustees of the Federal Savings
and Loan Insurance Corporation amended Insurance
Regulation 301.19 (b) by striking from the third
sentence the words "15 daysV' This eliminates a
waiting period after notification and enables insured
members to come in at once and receive their new
share accounts or cash and debentures.
On April 22, 1940, the Federal Home Loan Bank
Board and the Board of Trustees of the Federal
Savings and Loan Insurance Corporation adopted
resolutions changing the amendatory provisions of
the Regulations for the Federal Savings and Loan
System, for Insurance of Accounts, and for the Federal Home Loan Bank System. The revisions to
May 1940
both the Federal Regulations and the Insurance
Regulations are similar and provide that, unless a
later date is set in the amendment itself, all amendments will become effective upon filing with the
Federal Register. The changes made in the Bank
System Regulations place the amendatory provisions
on a parity, except for minor variations, with those of
the Federal and Insurance Regulations.
AMENDMENT TO RULES AND REGULATIONS FOR
FEDERAL SAVINGS AND LOAN SYSTEM, RELATIVE TO
AMENDATORY PROVISIONS: Adopted April 22, 1940;
effective April 24, 1940.
Paragraphs (a) and (c) of Section 201.2 of the
Rules and Regulations for the Federal Savings and
Loan System were amended as follows, and a new
paragraph (f) added to the section:
(a) Reservation of right to amend. The Board expressly
reserves the right to amend (including the right to alter or
repeal) these rules and regulations in whole or in part.
(c) Minor, procedural, or emergency amendments. Any
amendment deemed to be of a minor, procedural, or emergency
character may be adopted by the Board without complying
with the requirements of paragraphs (b) and (d) hereof.
(f) Effective date. Every amendment of these rules and
regulations shall be effective as soon as it has been filed with
the Division of the Federal Register and a copy made available
for public inspection as provided in the Federal Register Act
(49 Stat. 500, 44 U. S. C. Sup. Ch. 8A) unless a later effective
date shall be expressed in the resolution adopting such amendment.
AMENDMENT TO RULES AND REGULATIONS FOR
INSURANCE OF ACCOUNTS, RELATIVE TO AMENDATORY
PROVISIONS: Adopted April 22, 1940; effective April
24, 1940.
Paragraphs (a) and (c) of Section 301.22 of the
Rules and Regulations for Insurance of Accounts
were amended as follows, and a new paragraph (f)
added to the section:
(a) Reservation of right to amend. The Board expressly
reserves the right to amend (including the right to alter or
repeal) these rules and regulations in whole or in part.
(c) Minor, procedural, or emergency amendments. Any
amendment deemed to be of a minor, procedural, or emergency character may be adopted by the Board without
complying with the requirements of paragraphs (b) and (d)
hereof.
(f) Effective dote. Every amendment of these rules and
regulations shall be effective as soon as it has been filed with
the Division of the Federal Register and a copy made available for public inspection as provided in the Federal Register
Act (49 Stat. 500, 44 U. S. C. Sup. Ch. 8A) unless a later
effective date shall be expressed in the resolution adopting such
amendment.
AMENDMENT TO RULES AND REGULATIONS FOR FEDERAL HOME LOAN BANK SYSTEM, RELATIVE TO AMENDATORY PROVISIONS: Adopted April 22, 1940; effective
April 24, 1940.
285
Section 8.3 of the Rules and Regulations for the
Federal Home Loan Bank System was amended to
read as follows:
Sec. 8.3. Amendments—(a) Reservation of right to amend.
The Board expressly reserves the right to amend (including
the right to alter or repeal) these rules and regulations in
whole or in part.
(b) Minor, procedural, or emergency amendments. Any
amendment deemed to be of a minor, procedural, or emergency
character may be adopted by the Board without complying
with the requirements of paragraphs (c) and (d) hereof.
(c) Thirty-day notice of major amendments not of an emergency character. No amendment deemed to be major affecting a matter of general principle or policy, and not of an
emergency character, will be adopted by the Board until at
least 30 days have elapsed after the proposed amendment has
been mailed to each member of the Federal Savings and
Loan Advisory Council and to the president of each Bank.
A copy of each such proposed amendment shall be filed with
the FEDERAL HOME LOAN BANK REVIEW and shall be pub-
lished in the next available issue of such REVIEW.
(d) Hearings on regulations. After receipt of the written
requests therefor to the Secretary to the Board of at least
seven members of the Federal Savings and Loan Advisory
Council, or of at least four of the Banks (accompanied by
certified resolutions of the boards of directors thereof), or
of at least 25 members of the Federal Home Loan Bank
System (accompanied by certified resolutions of the boards
of directors thereof), the Board will fix a time and place for
a hearing on a proposed amendment or upon an existing
regulation to which petitioners object. The Secretary to
the Board will give written notice of the time and place of
such hearing to all the members of the Federal Savings and
Loan Advisory Council, to the president of each of the Banks,
and to each of the members of the Federal Home Loan Bank
System which requested such hearing. If such requests for
such hearing have been received before 30 days have elapsed
from the date such proposed amendment was mailed to each
member of the Federal Savings and Loan Advisory Council
and to the president of each of the Banks, the Board will not
take final action upon the proposed amendment prior to
such hearing. The filing of a request for a hearing upon an
existing regulation to which petitioners object shall not
suspend the operation of such regulation. Any member of
the Federal Savings and Loan Advisory Council, any Bank,
or any member of the Federal Home Loan Bank System
may, prior to the date of such hearing, file with the Secretary
to the Board a written brief regarding the proposed amendment or existing regulation involved; in addition thereto,
such member of the Federal Savings and Loan Advisory
Council, such Bank, or such member of the Federal Home
Loan Bank System may appear in person at such hearing
before the Board or may be represented at such hearing by
any of its directors, officers, employees, agents, or attorneysat-law; and may offer evidence and examine witnesses.
(e) Recommendations and representations at hearings by
persons other than those requesting hearing. No hearing upon
a proposed amendment or existing regulation to which the
petitioners object will be confined to persons requesting such
hearing; but each such hearing will be open to any interested
persons or to representatives of any Bank or member of the
Federal Home Loan Bank System. Recommendations of
286
other persons or institutions that may be affected, or from an
organized trade association, may be filed with the Secretary
to the Board either prior to or during any hearing, and such
persons, institutions or associations may appear in person a t
such hearing before the Board or may be represented at such
hearing by any of their directors, officers, employees, agents,
or attorneys-at-law; and be entitled to be heard.
(f) Effective date. Every amendment of these rules and
regulations shall be effective as soon as it has been filed with
the Division of the Federal Register and a copy made available for public inspection as provided in the Federal Register
Act (49 Stat. 500, 44 U. S. C. Sup. Ch. 8A) unless a later
effective date shall be expressed in the resolution adopting
such amendment.
PROPOSED AMENDMENT
PROPOSED AMENDMENT TO RULES AND REGULATIONS
FOR FEDERAL HOME LOAN BANK SYSTEM, RELATIVE
TO ADOPTION OF BUDGETS AND EMPLOYMENT AND
COMPENSATION OF OFFICERS, ETC.
The proposed amendments of subsection (b) of
Section 2.4, and subsection (a) of Section 2.5 and a
proposed amendment to Section 4.4 of the Kules and
Regulations for the Federal Home Loan Bank System are as follows:
1. The word "semi-annual" is deleted from subsection (b) of Section 2.4.
2. There is inserted between the third and fourth
sentences of subsection (a) of Section 2.5 the following:
The board of directors of each Bank shall adopt appropriate
resolutions annually showing the contemplated compensation
of officers, counsel or attorneys, including any proposed
changes in compensation and any contemplated appointments and compensation of any additional officers, counsel or
attorneys to be effective during the next calendar year. Such
resolutions shall be forwarded to the Governor so as to reach
him not later than October 1. The Board will, for each
Bank, either approve or disapprove, in whole or in part, such
proposed compensation of existing officers, counsel and attorneys, including any changes therein, and any contemplated
appointments of additional officers, counsel or attorneys, and
the Governor shall advise the Bank of the action of the Board
relating to it.
3. Section 4.4 is revised to read as follows:
SEC. 4.4. Budgets.—Each Bank shall prepare and submit
to the Governor for the Board's approval a budget of operations in the manner and according to the procedure prescribed
in its bylaws. Each budget shall set out in detail the compensation and expenses of directors and compensation of
officers, counsel and attorneys. Each Bank shall submit to
the Governor with its budget a certificate signed by its president as to the compliance by each of its officers, counsel, attorneys, and employees with the provisions of subsection (a) of
Section 2.5 of these Rules and Regulations, and (a) properly
certified copy of the resolutions of its board of directors
electing officers, counsel and attorneys required by said subFederal Home Loan Bank Review
section (a). The Board will either approve the budget as submitted by each Bank or approve such budget with such adjustments therein as to it appear proper, provided that the
Board will not disapprove any item set forth in such budget
for compensation of officers, counsel or attorneys which shall
have been theretofore approved by it. The budget of each
Bank as approved by the Board shall become the budget of
such Bank for the ensuing calendar year. However, a Bank
may at any time adopt and request the Board's approval of
such further changes in its approved budget as in its opinion
may appear desirable or necessary; and upon approval of any
such amendment by the Board, such Bank shall be operated
within such amended budget.
This proposed revision will not be approved until
at least 30 days after the mailing date to the Advisory
Council.
Dividend Rates
(Continued from p. 255)
For the year ending December 31, 1939, the
weighted average dividend rate paid by all Federal
associations on share accounts was 3.34 percent.
This reflects the fact that 56 Federal associations in
this District paid dividends at an annual rate of
3K percent or less during 1939 as compared with
47 associations in 1938.
During the year 1938 the average numerical dividend rate of all Federal associations in the Topeka
Federal Home Loan Bank District remained constant at 3.8 per centum per annum. Examination
of the statements of individual Federal associations
in this District reveals that during 1938 there were
three slight increases in dividend rates and only one
reduction. During 1939, however, the average rate
dropped from 3.73 percent for the first half to 3.67
percent for the last six months. During the year
there were 12 reductions and only two increases.
One of these associations placed an increase in effect
on June 30, 1939 but a reduction was made to the
original level on December 31.
Federal Home Loan Bank System
{Continued from p. 273)
evidenced a leveling off in the downward trend of
advances outstanding. Every Bank except Chicago
had a greater volume of advances for March than
during the previous month, and eight Banks received
a smaller volume of repayments.
The average monthly balance of advances outstanding for the year 1939 was $169,038,769—
May 1940
approximately $20,000,000 less than that for 1938.
Advances outstanding at the close of the first quarter of 1940 constituted 81.4 percent of the average of monthly advances outstanding for the year
1939. The New York Bank alone continues to have
advances outstanding in excess of its 1939 average.
During the month of March, six institutions were
added to the membership of the Bank System and
seven were eliminated, which resulted in a net
decrease of one member and brought the total
membership on March 31,1940, to 3,912.
INTEREST RATES
The Federal Home Loan Bank of Boston recently
announced the following reduction in interest rates
on advances to member institutions: on long-term
advances (amortized within 10 years), a 2%-percent
rate; and on short-term (amortized within one year),
a 1%-percent rate. These rates became effective
April 15, 1940, for all new advances; and effective
May 1, 1940, all advances outstanding will carry
these rates.
British Building Societies
(Continued from p. 260)
was actually smaller than in the Munich crisis of
September 1938. This indicates, they believe, that
barring unforeseen changes in dividend rates or income tax provisions, the bulk of the investment will
remain throughout the duration of the war.
Withdrawals have been generally heavier than
normal, however, and the societies are requiring full
notice of withdrawals as prescribed by their rules,
but are following the usual practice of paying out on
demand the smaller sums required for current needs.
A certain amount of new money is being received
although the total is less than might be expected if
conditions were normal. These new funds, together
with the mortgage loans repayments, have been
used largely to reinforce the liquidity position because
management has been severely handicapped ;by the
lack of favorable opportunities to re-invest these
new savings.
One reason for the falling off of new investments, it
is said, has been the desire on the part of the average
man to observe that particular financial creed which
would be most beneficial to the Government in its
efforts to win the war. The justification of his
position in depositing regularly small amounts of
money in a savings account had been subject to con287
siderable question. A recent speech by Lord Stamp,
Chief Economic Adviser to the Government and
President of one of the largest British building
societies, has outlined the status of the war-time
saver and outlined his contribution to the war effort.
T H E IMPORTANCE OF T H R I F T IN W A R - T I M E
" I t is the duty of the individual man," said Lord
Stamp, "to save as much as possible and to consume
just what is necessary to his needs from day to day."
He emphasized the fact that the important thing is
saving, and it matters little what channels the
savings flow through if eventually they reach the
coffers of the Government to be utilized for national
purposes. Presumably, it is the concern of building
societies to see that the money is put to its best uses
on the way through.
The position of the building societies has been
clarified greatly by this expression of the Government views. The Building Societies Gazette, official
publication of their Association, in reporting this
pronouncement indicated that " . . . the building
societies have no cause to apologise for the continuation of their operations in war-time. Their
investors have the assurance of the man who is
largely responsible for shaping the economic policy
of the country that, apart from the direct contribution of the movement to the war effort by way of
war loan, their money is being properly applied to
national uses when it flows through the normal
channels of their everyday business. Such a judgment virtually silences the controversy over the
place of thrift in the life of a country fighting for
its existence under modern conditions."
spread between the building permit valuation and
the contract price of 1-family houses in 1938 was 16
percent. The selling price of a completed dwelling in
these communities averaged 42 percent more than
the value declared at the time a permit was obtained.
The ratios for the individual cities are illustrated
graphically in the chart in this column which shows
the contract and selling prices expressed as a percentage of the building permit reported. Variations
from city to city may be accounted for in part, says
the report, " . . . by differences in the building ordinances, in their enforcement, in the uses to which
tax assessors put the information filed in permit
applications, and in many other local practices of
both city officials and builders. In Washington,
D. C , for example, the average ratio of contract
price to permit valuation was among the lowest, but
the ratio of selling price to permit valuation was next
to the highest of the eight cities."
Statistics on the contract prices of the dwellings in
this study were obtained from contractors and operative builders, and estimates from this latter source
were based on construction cost, excluding profit and
overhead. Injio case was the value of land included.
The selling prices, on the other hand, included profit
and overhead, sales commissions, land, and all other
items making up the total cost to the purchaser.
Permit Valuations vs. Price of Houses
•
T H E estimated cost of a house as reported in
its building permit is seldom representative of
the actual contract or selling price of the completed
structure. This is a fact which has long been recognized by those who work with building permit data
and estimates have been made at frequent intervals
to determine the amount of variance in these figures.
I t is apparent from the latest report of a study of
these differences published in a recent issue of the
Monthly Labor Review,1 that the variations are influenced greatly by local conditions. The survey,
which covered eight large cities in various parts of
the United States, revealed that on the average the
i Monthly Labor Review, U. S. Department of Labor, Vol. 49, No. 4.
288
Federal Home Loan Bank Review
FEDERAL HOME LOAN BANK DISTRICTS
^ow
•—•BOUNDARIES OF FEDERAL HOME LOAN BANK DISTRICTS
$
FEDERAL HOME LOAN BANK CITIES.
OFFICERS OF FEDERAL HOME LOAN BANKS
BOSTON
CHICAGO
B. J. ROTHWELL, Chairman; E . H . W E E K S , Vice Chairman; W . H .
C. E . BROUGHTON, Chairman; H . G. ZANDER, JR., Vice Chairman; A. R.
NEAVES,
President; H .
N.
FAULKNER,
Vice President;
FREDERICK
G A R D N E R , President; J. P . D O M E I E R ,
Vice President; H . C . J O N E S ,
W I N A N T , J R . , Treasurer; L . E . D O N O V A N , Secretary; P . A. H E N D R I C K ,
Treasurer; CONSTANCE M . W R I G H T , Secretary; UNGARO & SHERWOOD,
Counsel.
Counsel.
NEW
GEORGE
MACDONALD,
YORK
D.
LLOYD,
Vice
MOINES
C. B . B O B B I N S , Chairman; E . J. R U S S E L L , Vice Chairman: R. J. R I C H A R D -
G. L . B L I S S , President; F . G. STICKEL, J R . , Vice President-General
SON, President-Secretary; W . H . LOHMAN, Vice President-Treasurer;
J. M . M A R T I N , Assistant Secretary; A . E . MUELLER, Assistant Treasurer.
Counsel; R O B E R T
V.
DES
Chairman;
C
Chairman; F .
G. CLARKSON, Vice President-Secretary;
DENTON
L Y O N , Treasurer.
PITTSBURGH
LITTLE ROCK
E . T . T R I G G , Chairman; C. S. T I P P E T T S , Vice Chairman; R. H . R I C H -
W. C . JONES, J R . , Chairman; W . P . GULLEY, Vice Chairman; B . H .
W O O T E N , President; H . D . WALLACE, Vice President-Secretary; J. C .
ARDS,
President;
G.
R.
PARKER,
Vice President;
H.
H.
GARBER,
Secretary-Treasurer; R. A. CUNNINGHAM, Counsel.
CONWAY, Vice President; W. F. T A R V I N , Treasurer; W . H . CLARK, J R . ,
Counsel.
WINSTON-SALEM
TOPEKA
E. C. BALTZ, Vice Chairman; O. K . L A R O Q U E , President-Secretary; G. E .
WALSTON, Vice President- Treasurer; Jos. W. HOLT, Assistant Secretary*
P . F . GOOD, Chairman; G. E . M C K I N N I S , Vice Chairman; C. A. STERLING,
President-Secretary; R. H . BURTON, Vice President-Treasurer; JOHN
S. D E A N , J R . , General Counsel.
CINCINNATI
PORTLAND
V M . M E G R U E BROCK, Vice Chairman; W A L T E R D . SHULTZ, President;
W . E . J U L I U S , Vice President; D W I G H T W E B B , J R . , Secretary; A. L.
M A D D O X , Treasurer; T A F T , STETTINIUS & HOLLISTER, General Counsel.
F. S. MCWILLIAMS,'Vice Chairman; F . H. JOHNSON, President-Secretary;
IRVING
BOGARDUS,
Vice President-Treasurer; Mrs. E . M . J E N N E S S ,
Assistant Secretary.
INDIANAPOLIS
H. B . W E L L S , Chairman; F. S. CANNON, Vice Chairman-Vice President;
F R E D T . G R E E N E , President; G. E . OHMART, 2nd Vice President; J. C .
Los ANGELES
D . G. D A V I S , Chairman; A . J. E V E R S , Vice Chairman; M . M . H U R FORD, President; C. E . B E R R Y , Vice President; F . C. N O O N , Secretary-
M O R D E N , Secretary-Treasurer; J O N E S , HAMMOND, BUSCHMANN & G A R D -
Treasurer;
NER, Counsel.
PATRICK, General Counsel.
VIVIAN
SIMPSON.
Assistant
Secretary;
RICHARD
FITZ-
@FedFRASER