The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
vol. 3
gmEmt
No. 1
FEDERAL
HOME LOAN BANK
REVIEW
OCTOBER
1936
ISSUED BY
FEDERAL HOME LOAN BANK BOARD
WASHINGTON D.C.
Federal Home Loan Bank Review
TABLE OF CONTENTS
Page
Collection of taxes and insurance premiums by the mortgagee
1
Sample operating budgets for savings and loan associations
5
Duties of the managing officer of a savings and loan association
7
Indexes of small-house building costs
Method of calculating building volume
10
10
Monthly lending activity of savings and loan associations
15
Residential construction activity and real-estate conditions
17
August index of foreclosures in large urban counties
Federal Home Loan Banks
17
22
Growth and trend of lending operations
25
Interest rates on advances to member institutions
26
Federal Savings and Loan System
27
Federal Savings and Loan Insurance Corporation
29
Home Owners' Loan Corporation
31
Subscriptions to shares of savings and loan associations
31
Foreclosures authorized and properties acquired
31
Summary of operations of the Reconditioning Division
32
Changes in Public Relations Department of the Federal Home Loan Bank Board
32
Directory of member, Federal, and insured institutions added during August-September..
33
SUBSCRIPTION PRICE OF REVIEW
T H E FEDERAL HOME LOAN BANK REVIEW is the Board's medium of communication with member institutions of the Federal Home Loan Bank
System and is the only official organ or periodical publication of the Board. The REVIEW will be sent to all member institutions without charge.
To others the annual subscription price, which covers the cost of paper and printing, is $1. Single copies will be sold at 10 cents. Outside of the
United States, Canada, Mexico, and the insular possessions, subscription price is $1.40; single copies, 15 cents. Subscriptions should be sent to
and copies ordered from Superintendent of Documents, Government Printing Office, Washington, D. G.
APPROVED BY THE BUREAU OF THE BUDGET
Federal Home Loan Bank Board
JOHN H. FAHEY, Chairman
WILLIAM F. STEVENSON
T. D . W E B B , Vice Chairman
F. W. CATLETT
H. E. HOAGLAND
OFFICERS OF FEDERAL HOME LOAN BANKS
BOSTON:
B. J. ROTHWELL, Chairman; W. H. NEAVES, President; H. N . FAULKNER, Vice President;
FREDERICK W I N ANT, JR., Secretary-Treasurer.
NEW YORK:
GEORGE MACDONALD, Chairman; G. L. BLISS, President; F. G. STICKEL, JR., Vice President-
General Counsel; ROBERT G. CLARKSON, Vice President-Secretary; DENTON C. LYON, Treasurer.
PITTSBURGH:
E. T. TRIGG, Chairman; R. H. RICHARDS, President; G. R. PARKER, Vice President; H. H. GARBER; Secretary-Treasurer.
WINSTON-SALEM :
IVAN ALLEN, Chairman; O. K. LAROQUE, President-Secretary; G. E . WALSTON, Vice President-
Treasurer; Jos. W. HOLT, Assistant Secretary.
CINCINNATI:
H. S. KISSELL, Chairman; W. D . SHULTZ, President; W. E. JULIUS, Vice President; A. L. MADDOX,
Treasurer; T. DWIGHT W E B B , JR., Secretary.
INDIANAPOLIS:
F. S. CANNON, Chairman-Vice President; FRED T. GREENE, President; B. F. BURTLESS, Secretary-
Treasurer.
CHICAGO:
H. G. ZANDER, Chairman; A. R. GARDNER, President; HAROLD WILSON, Vice President; E . H.
BURGESS, Treasurer; CONSTANCE M. WRIGHT, Secretary.
DES
MOINES:
C. B. ROBBINS, Chairman; R. J. RICHARDSON, President-Secretary; W. H. LOHMAN, Vice President-Treasurer; J. M. MARTIN, Assistant Secretary; A. E. MUELLER, Assistant Treasurer.
LITTLE ROCK:
J. GILBERT LEIGH, Chairman; B. H. WOOTEN, President; H. D . WALLACE, Vice President-Treas-
urer; J. C. CONWAY, Secretary.
TOPEKA:
C. B. MERRIAM, Chairman; C. A. STERLING, President-Secretary; R. H. BURTON, Vice PresidentTreasurer.
PORTLAND:
F. S. MCWILLIAMS, Chairman; C. H. STEWART, President; IRVING BOGARDUS, Vice President-
Treasurer; W. H. CAMPBELL, Secretary; M R S . E . M. SOOYSMITH, Assistant Secretary.
Los
ANGELES:
C. H. W A D E , Chairman; M. M. HURFORD, President; F. C. JNOON, Secretary-Treasurer.
Collection of Taxes and Insurance
Premiums by the Mortgagee
D
ELINQUENT taxes have reduced
many first mortgages to the position
of junior liens. Taxes are a prior claim and
when unpaid they reduce and endanger the
equity of the mortgage holder. In fact, a
lending institution probably runs less risk
from mortgage delinquencies than from tax
delinquencies. One savings and loan official has stated: "In my opinion more homefinancing institutions came to grief during
the depression period through failure to
watch the tax situation on its mortgage
loans than from any other cause." In many
communities borrowers who were well able
to pay their taxes did not do so because of
nonpayment by their neighbors. Tax delinquency can spread like a contagious disease. It is a common temptation for taxpayers to think they can meet their payments more readily next year than now.
They almost invariably find that the delinquency has increased, rather than solved,
their problems.
Because of the attitude of tax officials in
many States in recent years, taxpayers have
been allowed to accumulate delinquencies
for a number of years before being pressed
for payment. Such a situation is almost
certain to create trouble for mortgage institutions. Should the borrower find that the
accrued taxes plus the unpaid principal on
his loan amount to more than the value of
the property, the chances are that he will
hand over the property, with its tax debt,
to the mortgagee. What can happen when
a mortgage institution has a number of such
borrowers is well illustrated by the experience (referred to in an earlier issue of the
October 1936
of a large savings and loan association, situated in a Middlewestern State,
which the depression forced into liquidation. This association took over properties
on which it had loaned approximately
$2,000,000, only to find that the unpaid taxes
and assessments exceeded both the value of
the properties and the balance of the principal outstanding on the loans. The association had no alternative but to turn the
properties over to the city in settlement of
tax claims and write off a $2,000,000 loss.
REVIEW)
TAX COLLECTION BY THE MORTGAGEE
SELF-INTEREST requires that the mortgagee
should know at all times the tax situation
of each piece of property on which it has
made a loan. It should keep a record of the
amount of taxes assessed and of their payment. In order to secure this information,
many institutions require the borrower to
submit his receipted tax bills. Others go
directly to the tax records. If the institution is a large one it may be desirable to
employ a tax-service agency to do this.
In recent years, however, an increasing
number of home-financing institutions that
make long-term amortized loans have
adopted the policy of paying the taxes on
behalf of the borrower and collecting from
him in advance on a monthly basis. Such
a plan has great merit from the point of
view of the lender and of the borrower
alike. It is certainly the surest and probably the least costly method of protecting
the lender against the troubles arising from
a large accumulation of delinquent taxes.
It makes the payment of taxes easier and
1
less burdensome for the borrower. It enables him to include taxes in his monthly
budget of fixed payments, so that the taxes
cease to be a heavy extra burden.
The plan has been tried long enough and
by a sufficient number of institutions, operating under different methods, to prove
that it is practical and can be operated
successfully by virtually all types of institutions making long-term home loans amortized on a monthly basis. It should be
recognized, however, that any institution
adopting such a plan will probably at first
encounter some difficulties, make some mistakes, and possibly meet with some opposition from its borrowers. But the benefits
will more than compensate for the trouble
and expense incurred.
Under the plan, the mortgagee collects as
a part of the regular monthly payment an
amount equal to one-twelfth of the estimated amount of taxes and assessments
for the current year. Some institutions
using the plan also collect the insurance
premiums in the same way. As property
insurance policies are usually written and
paid for on a 3-year basis, an amount equal
to one thirty-sixth of the premium is collected as a part of each monthly payment.
Where the tax rate varies from year to
year and cannot be forecast, the problem
may be somewhat complicated.
Some
mortgagees have met this situation by requiring a monthly payment large enough so
that in all probability it will provide sufficient funds. If a surplus remains after the
taxes and insurance have been paid, this
may be made the basis for a reduction in
the charge for the next year.
POSSIBLE ACCOUNTING METHODS
principal methods have been developed of using and accounting for these
monthly prepayments as they are received.
The first method can be used only by institutions that employ the direct-reduction
plan for the repayment of loans. Under
this method, the amount included in the
monthly payment which is allotted to taxes
THREE
2
and insurance, instead of being accumulated, is applied each month to the reduction of the principal. The principal is thus
for a period of months reduced more rapidly than it otherwise would be. However,
when the taxes and insurance premiums become due, the association pays them and
adds the amount to the unpaid balance of
the loan. It should be noted that the net effect of thus canceling the monthly prepayment of taxes and insurance against the
principal is to allow the borrower interest
on the prepayment at the same rate he is
paying on his loan. The result to the borrower is the same as if he were to put the
prepayments in some form of savings account, in which they would draw the same
rate of interest that he pays on the loan,
and then used the accumulated savings to
pay the taxes and insurance when due.
The following illustration has been used
by one of the old but progressive savings
and loan associations of the country to demonstrate to its borrowers the advantage of
this plan. The illustration assumes that a
borrower has secured a loan of $4,000, at
6-percent interest, repayable under the direct-reduction plan in monthly instalments
of $40, with taxes and insurance on the
property amounting to $120 annually. At
the end of the first year he will owe $3,753.31
on the principal, in addition to the taxes and
insurance that will be due. If the borrower,
however, has been paying $10 per month
into a separate savings account, bearing interest at 6 percent, compounded semiannually, he will have at the end of the year
$123.32. After paying his taxes and insurance he will have $3.32 remaining, which,
if applied to the principal of the loan would
reduce it to $3,749.99.
Now let us assume that instead of following the above plan, the borrower has paid
$50 per month on his loan, with the association paying his taxes and insurance and
adding it to the unpaid principal. At the
end of the year, the principal would be reduced to $3,749.97, practically the same
amount as in the other plan. However, as
Federal Home Loan Bank
Review
a matter of convenience, the second method
would be preferable. Instead of making
two payments each month, one on his loan
and one to his savings account, and having
the trouble of paying his tax and insurance
bills himself, he makes a single regular
monthly payment to the association and
everything else is taken care of for him.
In this illustration it has been assumed
that the borrower would receive the sam(
rate of interest on his savings account that
he pays on his loan. If the rate received
were less than the rate paid, as it practically always would be, he would find that it
is slightly more profitable, as well as more
convenient, to include the necessary amount
for taxes and insurance premiums in his
regular monthly payment to the mortgagee,
rather than to establish a separate savings
account. If he should receive only 2-percent interest, instead of 6 percent, the difference in the above illustration would
amount to $2.22.
The greatest difficulty in the use of this
plan lies in educating the borrowers to
understand it. When, at tax-paying time,
the borrower sees that his unpaid principal
is increased by the amount of the taxes,
which he thinks he has already paid by the
tax allowance in his regular monthly payment, he may think that he is being cheated
in some way. The only way to avoid this
difficulty is by a very careful explanation
of some such illustration as that given.
T H E SHARE-ACCOUNT METHOD
SOME savings and loan associations have
preferred to require the borrower to subscribe for one or more shares, depending
upon the amount of his taxes and insurance
premiums. The monthly payment for taxes
and insurance is then credited to this share
account and when taxes or insurance bills
fall due, they are charged to it. In effect,
this amounts to repurchase of the share or
shares.
From the borrower's point of view, this
method has three possible disadvantages as
compared with the direct-reduction plan.
October 1936
In the first place, the borrower does not receive as favorable a rate of return on his payments, as the dividend rate he receives on
his shares will not be as high as the interest
rate he is paying on his loan. Also, if the
association charges a withdrawal or repurchase fee, the charges to the share account
for payment of taxes or insurance are subject to it, since such charges are, in effect,
repurchases. Furthermore, if the association should go upon a deferred basis for
repurchase of its shares, the account might
not be available when needed and the borrower might find himself called upon to
pay his taxes and insurance premiums himself. The fact that he had already paid the
necessary amount to the association would
not relieve him of his obligation to the taxing authorities.
These drawbacks are believed to be sufficient to render the share-account method
of collecting taxes and insurance premiums
unsatisfactory. This plan is, therefore, not
recommended.
T H E SPECIAL-ACCOUNT METHOD
THE third method of handling advance payments by borrowers is to set up a separate
account under the major-control account
in the general ledger. This account is entitled "Advance Payments by Borrower for
Taxes and Insurance." These funds may
be deposited in a separate trust account in
order to insure their availability when payments are due. It should be pointed out,
however, that though payment on time is
assumed under this method, the borrower
receives no return on his advance payments. The method is easy to explain to
borrowers and the records are clear.
The direct-reduction plan would seem to
be preferable for those institutions that can
make use of it. Officers of mortgage institutions that have used the plan have described it as the fairest and most satisfactory solution of this vexing problem.
Any particular association, however, will
have to adopt the plan that is best suited to
its own methods and to the needs and atti
tude of its borrowers. The Savings and
Loan Division of the Federal Home Loan
Bank Board has stated, "We are much more
interested in the monthly collection of taxes
and insurance by Federal associations than
we are in the particular plan that may be
4
adopted for the recording of such collections. The mortgage-loan history of the
past few years brings out only too clearly
the desirability of protecting the interests of
the mortgagees by advance collection of
taxes and insurance."
Federal Home Loan Bank
Review
Sample Operating Budgets for Savings
and Loan Associations
T
HE more competition a business has to
meet the greater is its need for careful
cost accounting. Savings and loan associations no longer have the spread they once
had between the income they receive and
the price they must pay for money. Insofar as it conduces to more efficient operation, this is a salutary situation. In any
event, interest in the costs of operation is
growing among savings and loan associations of all sizes.
The question of how much an association
of a given size can afford to spend for over-
head is especially important to the many
new Federal associations that have begun
operations in recent years. In an attempt
to provide a practical guide, the Federal
Home Loan Bank of New York has prepared sample operating budgets for associations with assets ranging from $200,000 to
$5,000,000. The accompanying table gives
the budgets suggested for associations of
five different sizes.
The reproduction of these budgets in the
REVIEW must not be understood to mean
that they represent a recommendation of
Sample operating budgets for Federal savings and loan associations with assets ranging from $250,000 to
$5,000,000
Association wi th assets of—
$250,000
$1,000,000
$500,000
Percent
Percent
Percent
Amount of gross Amount of gross Amount of gross
income
income
income
Gross income (6 percent of assets)
Operating expenses:
Compensation
Rent, light, and heat
Furniture and fixtures
Advertising
Office supplies, printing, postage, and
Insurance and bond premium
Federal insurance premium
Audit and examination
Organization dues
Other
Total
Net income
Distribution of profits:
Bonus on shares
Legal reserves (5 percent of net income).
Federal insurance reserves (0.3 percent
of insured accounts)
Dividends (3 percent of assets)
Total
Surplus to undivided profits
October 1936
$15,000
100.0 $30,000
100.0 $60,000
$5,000,000
$2,500,000
Amount
Percent
of gross
income
100.0 $150,000
Amount
Percent
of gross
income
100.0 $300,000
100.0
2,290
835
500
450
15.2
5.6
3.3
3.0
5,100
900
500
900
17.0
3.0
1.7
3.0
6,600
1,800
500
1,800
11.0
3.0
0.8
3.0
14,500
3,400
1,000
4,500
9.7
2.3
0.7
3.0
25,000
6,000 1
1,000
9,000
8.4
2.0
0.3
3.0
100
100
332
150
71
63
0.7
0.7
2.2
1.0
0.5
0.4
100
200
625
200
99
135
0.3
0.7
2.1
0.7
0.3
0.4
300
450
1,246
400
142
124
0.5
0.8
2.1
0.7
0.2
0.2
3,200
1,000
3,125
1,250
381
3,244
2.1
0.7
2.1
0.8
0.2
2.1
5,000 i
1,500 1
6,250 j
2,500
708
6,542
1.7
0.5
2.1
0.8
0.2
2.2
4,891
32.6
8,759
29.2
13,362
22.3
35,600
23.7
63,500
21.2
10,109
67.4
21,241
70.8
46,638
77.7
114,400
76.3
236,500
78.8
300
525
2.0
3.5
550
1,095
1.8
3.7
1,050
2,400
2,500
5,720
1.7
3.8
5,000
11,825
1.7
3.9
750
7,500
5.0
50.0
1,500
15,000
5.0
50.0
3,000
30,003
1.7
4.0
5.0
50.0
7,500
75,000
5.0
50.0
15,000
150,000
5.0
50.0
9,075
60.5
18,145
60.5
36,450
60.7
90,720 [
60.5
181,825
60.6
10.3
10,188 [
17.0
23,680
15.8
54,675
18.2
1,034
6.9
3,096 |
5
the Board. They are presented merely as
the results of careful studies by competent
students of the subject. Obviously, no sample budget can fit every association of the
same size. The variations in salaries and
rentals between one city and another and
even between districts in the same city preclude finality. Estimates based on experience, however, must be of value to any institution as a check on its own operations.
For purposes of the table, gross income
has been arbitrarily assumed to be 6 percent
of assets. All expenses and distribution of
net income to dividends, insurance, and reserves are shown as percentages of gross
income as well as in dollars. As an association grows, of course, the margins become
more substantial. The proportion of gross
income required for major items of expense
falls off rapidly. For instance, the $5,100
assigned to compensation in a $500,000 association represents 17 percent of gross
income, whereas the $25,000 assigned in a
$5,000,000 association represents only 8.4
percent. As the New York Bank points out,
6
this merely confirms the desirability of energetic campaigns to get new business.
Larger assets and larger income permit
much larger expenditures on such essential
aids to success as advertising. Yet the
proportion of gross income so expended
remains the same.
In the organization of any new association, it is expected that the managing officer
will make a contribution of his time in anticipation of ultimate adequate compensation. It seems clear from the table that no
association with assets of less than one-half
million dollars can pay the salaries necessary to retain competent personnel. The
New York Bank emphasizes the fact that a
competent and experienced executive, serving full time and with no other business
interests, is essential to the success of any
savings and loan association. If it is to meet
the thrift and home-financing needs of its
community, an association should also have
its own independent office and observe
designated office hours.
Federal Home Loan Bank
Review
Duties of the Managing Officer of a
Savings and Loan Association
This is the second in a series of articles.
T
HE managing officer of a savings and
loan association combines the duties of
a production manager and of a sales manager. He must direct an organization making and servicing loans and he must sell
his association's lending facilities and investing facilities to the public. The mere
juxtaposition of these diverse tasks emphasizes the need of the business for men
of exceptional ability.
To obtain funds, that is, to sell an investment in his association to the public, the
managing officer must do three things: (1)
he must have a good product; (2) he must
make it look attractive; and (3) he must
convince the public of its merits. Recent
events have conspired to render all these
tasks more difficult for savings and loan
associations in general than they have been
in the past. Such steps as the insurance
of the liquidity of deposits in commercial
banks and the issuance of savings bonds by
the Government create new and powerful
appeals for the saved dollar. A widespread
decline in interest rates on home mortgages
has made it difficult for savings and loan
associations to pay the high dividend rates
on which they formerly placed heavy reliance to attract investors. At the same
time, the savings and loan business in many
communities must combat an overhang of
public suspicion engendered by the inability of some associations to meet promised withdrawals during the years of distress. If a savings and loan association is
to attract and retain its share of the community's savings, the managing officer must,
October 1936
97873—36
therefore, devote more effort and talent to
the task than has heretofore been necessary. He must make use of all the aids
to sale of shares that are available.
A GOOD PRODUCT
To THE saving public, a good investment
must be first of all a safe investment. The
results of a survey made by the American
Savings and Loan Institute a few years ago
bore out) the experience of all financial institutions that investors demand primarily
safety. A managing officer can usually provide safety by making sound mortgage
loans and liquidating them efficiently. The
resultant record of solvency is an association's best asset. Even with such an asset,
however, a manager's sales problem will be
much simplified if he can offer share insurance to the investing public. Such insurance constitutes a reassuring stamp of
safety which even strangers, to the institution can recognize and accept. Furthermore, it is a protection against unreasoning
panics and "runs", which in the past have
closed even the soundest institutions.
Second only to safety, the investor demands availability of his savings. The inability of savings and loan associations to
promise to repurchase shares on demand
presents the managing officer with a very
delicate problem. The experiences of the
depression bear witness to the evil effects
of failing to inform investors clearly that
they may not be able to get their savings
on demand. On the other hand, many in7
2
vestors will be alienated if they feel there
is any uncertainty about the availability of
their funds. The solution is complete
frankness and a thorough explanation of
the nature of an investment in a savings and
loan share. Every investor, when he first
starts an account, should be informed of his
legal repurchase rights. He should be informed of the association's policy with regard to repurchase fees or retention of dividends, if any. At the same time, of course,
the manager should be in a position to point
to the association's liquid reserves—both
those in its own vaults and those in the Federal Home Loan Banks—to indicate the
probable ability of the association to meet
normal repurchases. The same policy of
frankness and of reserves should hold true
for maturities as for repurchases.
The third attribute of a good investment
is the rate of return upon it. Managers of
savings and loan associations were once
able to rely principally upon this attribute
in selling their shares to the public. As we
have already pointed out, it is partly because they can do so no longer that they
must now devote more energy and care to
the sale of shares. Dividend rates, interest
rates charged on loans, and operating expenses are all interdependent parts of the
same problem. Interest rates must be low
enough to attract good loans, dividend rates
must be sufficient to pay the investor a reasonable return, and the spread between
them must be enough to build up proper
reserves and to pay the costs of efficient
operation. Keeping all these factors in
proper balance without resorting to
financial juggling demands a competent
manager.
AN ATTRACTIVE PRODUCT
AN INVESTMENT may be safe, liquid, and
profitable and yet fail to attract investors.
It may not meet the specific needs of the
saving public in a given community. For
instance, where income is intermittent as in
an agricultural community, instalment-payment shares are obviously at a disadvan-
8
tage. Where the population consists of
wage earners, full-paid income shares will
be in little demand. It is the manager's
business to study the potential market for
his product and to provide the product that
will have the largest sale.
It may be that the community is not "savings-conscious." Thrift is a habit which
requires example, precept, and practice and
which can lapse in a community as well as
among individuals. The aggressive manager of a savings and loan association will
keep himself informed on the volume of
savings currently put aside in his community. He will watch the growth of all
types of thrift institutions, compare the
growth of his own association with that of
others, and compare the savings record of
his community with those of similar communities. If his community shows up
unfavorably in this comparison, the manager will have the double duty of making
attractive thrift in general as well as the
particular form of thrift on which his
association depends.
CONVINCING THE PUBLIC
task of education merges into that of
advertising the association and its product.
People will not buy that with which they
are unfamiliar. The market survey conducted by the American Savings and Loan
Institute in 1934 indicated how little the
public knew about savings and loan shares
as an investment opportunity compared
with competitive types of investment. Of
the people interviewed, only 9.2 percent
would have recommended an investment in
savings and loan associations, whereas 28.7
percent would have recommended an investment in insurance, 27.7 percent, an
investment in United States bonds, and 24.9
percent, an investment in savings banks.
There seems no question that the savings
and loan business as a whole and most associations individually have so far missed
a chance to tap a much larger share of the
public's savings through their failure to
advertise and publicize their business. The
THIS
Federal Home Loan Bank
Review
objective of advertising and publicity is to
build up goodwill based on knowledge.
The means are varied and their full use
requires varied abilities in the managing
officer. Advertising through the usual media—newspapers, direct mail, radio, posters, leaflets, window displays—is essential
to every institution that expects to grow to
a size adequate to maintain a suitable staff
and function efficiently. Such advertising
is a specialized job. It should be carried out
as a fully rounded campaign and, if financially possible, with professional advice.
To get the right kind and the deserved
amount of publicity for his association, the
managing officer must depend largely on
his own efforts, initiative, and contacts.
Facts and current achievements constitute
the sole basis of legitimate publicity. What
the association does to help the community
in taking care of the community's savings
and in financing the community's homes is
of vital interest to the community. The responsibility of the managing officer is to see
that these facts are periodically given to the
press. A clear and comprehensive statement of condition will help tremendously.
The savings and loan business has always
depended largely on word-of-mouth advertising. Such advertising is, of course, invaluable. It begins with the contacts estab-
October 1936
lished with the public by the manager and
his staff. The manager should make sure
that the public receives prompt, intelligent,
and friendly service in all its contacts with
the association. He, himself, should represent the association in community activities,
and should make a good appearance and
speak well. It is almost traditional in this
country for the banker to be a leader in
community life. If savings and loan associations are to grow in public esteem and
consequently to gain a greater share of
public savings, their officers must also
merit and accept community leadership.
In concluding this discussion of the duties
of a managing officer in connection with
the securing of funds for the association, it
should be pointed out that the manager
must sometimes reject investments. He
should hesitate to accept short-term investments. To accept funds that he knows may
be withdrawn at any moment is to accept a
liability. Such funds are of no value to an
institution lending its money on long-term
mortgages. Also, there are times in the
business cycle or in the development of individual communities when the wise manager will place a limit on new investments
or stop them altogether. Too much money
prior to the depression tempted many institutions to make unwise loans.
9
Indexes of Small-House Building Costs
B
EGINNING with this issue the date
assigned each group of reports on the
cost of building the same typical 6-room
house in selected cities will be moved back
one month. This has been found necessary
in order to make the date of the published
reports coincide more closely with the date
the figures are compiled in the field. Thus,
in the table published in this issue, reports
are listed for December 1935, March, June,
and September 1936, rather than for January, April, and July 1936, as they were in
the July issue.
Between June and September the building cost of the standard house went up 1 percent or more in 10 of the 27 cities making
comparable reports for the two periods. In
5 cities the costs went down 1 percent or
more and in 12 cities costs remained the
same or the change was less than 1 percent.
The largest increase of 5.4 percent, or 1.2
cents per cubic foot, was reported by Milwaukee, Wisconsin. Washington, D. C, reported an increase of 3.6 percent; Tampa,
Florida, and Boston, Massachusetts, of 2.3
percent; and Portland, Maine, of 2.2 percent. The city registering the greatest drop
was Roanoke, Virginia, in which the cost of
construction fell 2.9 percent. Following it
were Oklahoma City, Oklahoma, with 2.0
percent; New Haven, Connecticut, and
Peoria, Illinois, both with 1.4 percent; and
Hartford, Connecticut, with 1.2 percent.
Comparing costs for September between
cities we find that Columbia, South Carolina, reported the lowest cost with $4,697,
or 19.6 cents per cubic foot, but was closely
followed by Roanoke, Virginia, with $4,705,
which is also 19.6 cents per cubic foot.
Baltimore, Maryland, and Atlanta, Georgia,
were tied for third with 20.4 cents.
10
At the other end of the scale, the three
cities reporting from Illinois lead the list,
Chicago being first with 27.7 cents a cubic
foot and Springfield and Peoria following
with 26.9 cents and 26.4 cents respectively.
These and Denver, Colorado, are the only
cities reporting costs above 25 cents a cubic
foot.
Special attention is called to the description of the standard house on which costs
are obtained, appearing as a footnote to the
accompanying table. It should be emphasized that the cubic-foot costs reported do
not represent the cost of building a completed house in any of the cities. The purpose of the reports is rather to give a true
picture of movements of costs within each
city and a reliable comparison of costs
among all reporting cities.
METHOD OF CALCULATING BUILDING VOLUME
THERE are in use throughout the country
several methods of computing the cubicfoot volume of buildings. Unfortunately,
not all the methods will produce identical
results when applied to any given building.
To insure uniformity in the reports from its
appraisers and reconditioning inspectors,
the Home Owners' Loan Corporation has
adopted the method of measuring volume
which is illustrated in the accompanying
cuts. This same method is used in determining the volume of the typical house on
which the Board's indexes of small-house
building costs are based. It is believed
that an explanation of the method used will
increase the value of the indexes to
appraisers.
The cubic content is considered to be the
actual area inclosed within the outer sur-
Federal Home Loan Bank
Review
face of the outside walls and between the
outer surface of the roof and a distance 6
inches below the finish floor of the basement. Bay windows, dormers, and porches
with walls and sash are allowed the full volume contained therein. Open porches are
allowed one-third volume as indicated in
section D of chart 1.
Total costs and cubic-foot costs of building the same standard house in representative cities in specific months '•
NOTE.—These figures are subject to correction.
[Source: Federal Home Loan Bank Board]
Cubic-foot cost
Total building cost
No. 1—Boston:
Connecticut:
Hartford
New Haven
MainePortland
Massachusetts:
Boston
Worcester
New Hampshire:
Manchester
Rhode Island:
Providence
Vermont:
Rutland
No. 4—Winston-Salem:
Alabama:
Birmingham
District of Columbia:
Washington
Florida:
Tampa
West Palm Beach
Georgia:
Atlanta
Maryland:
Baltimore
Cumberland
North Carolina:
Asheville
Raleigh
South Carolina:
Columbia
Virginia:
Richmond
Roanoke
1935
1936
Federal Home Loan Bank Districts,
States, and cities
1936
1935
December
September
June
March
$5, 647
5,524
$5, 655
$0. 233
.228
$0. 236
.231
$0. 235
.230
$0. 236
5,115
5,106
5,103
.218
.213
.213
.213
5,773
5,780
5,895
5,699
.246
.241
.239
.241
.246
.237
5,416
5,467
.228
.228
.226
.228
5,531
5,574
.232
.229
.230
.232
5,329
5,337
.221
.222
.222
.222
September
June
March
$5, 589
5,462
$5, 657
5,538
5,227
5,905
December
5,727
5,467
5,577
5,305
5,462
5,496
5,329
5,073
5,013
5,059
5,002
.211
.209
.211
.208
5,150
4,973
4,918
4,850
.215
.207
.205
.202
5,483
5,904
5,360
5,911
5,379
5,889
5,895
.228
.246
.223
.246
.224
.245
.246
4,888
4,880
4,845
4,849
.204
.203
.202
.202
4,899
5,482
4,909
5,424
4,427
5,419
4,543
5,358
.204
.228
.205
.226
.184
.226
.189
.223
5,148
4,752
5,061
4,763
5,070
4,791
4,967
.214
.198
.211
.198
.211
.200
.207
4,697
4,712
4,634
4,505
.196
.196
.193
.188
5,026
4,705
5,026
4,843
4,964
4,544
5,062
4,491
.209
.196
.209
.202
.207
.189
.211
.187
1
The house on which costs are reported is a detached 6-room home of 24,000 cubic-feet volume. Living room, dining room, kitchen, and lavatory on first floor; 3 bedrooms and bath on second floor. Exterior is wideboard siding with brick and stucco as features of design. Best quality
materials and workmanship are used throughout.
The house is not completed ready for occupancy. I t includes all fundamental structural elements, an attached 1-car garage, an unfinished
cellar, an unfinished attic, a fireplace, essential heating, plumbing, and electric wiring equipment, and complete insulation. I t does not include
wall-paper nor other wall nor ceiling finish on interior plastered surfaces, lighting fixtures, refrigerators, water heaters, ranges, screens, weather
stripping, nor window shades.
Reported costs include, in addition to material and labor costs, compensation insurance, an allowance for contractor's overhead and transportation of materials, plus 10 percent for builder's profit.
Reported costs do not include the cost of land nor of surveying the land, the cost of planting the lot, nor of providing walks and driveways;
they do not include architect's fee, cost of building permit, financing charges, nor sales costs.
In figuring costs, current prices on the same building materials list are obtained every 3 months from the same dealers, and current wage rates
are obtained from the same reputable contractors and operative builders.
October 1936
11
Total costs and cubic-foot costs of building the same standard house in representative cities in specific
months—Continued
Total building cost
No. 7—Chicago:
Illinois:
Chicago
Peoria
Springfield
Wisconsin:
Milwaukee
Oshkosh
No. 10—Topeka:
Colorado:
Denver
Kansas:
Wichita
Nebraska:
Omaha
Oklahoma:
Oklahoma City
12
1935
1936
1935
1936
Federal Home Loan Bank Districts,
States, and cities
Cubic-foot cost
September
June
March
Decem- September
ber
$6, 651
6,331
6,459
$6, 639
6,420
6,459
$6, 608
6,212
6,459
$6,498
5,838
5,658
5,540
5,612
5,386
5,502
6,133
6,047
6,098
5,163
5,164
5,164
5,578
5,582
5,582
5,554
5,449
5,561
5,282
5,215
December
June
March
6,451
$0.277
.264
.269
$0. 277
.267
.269
$0. 275
.259
.269
5,357
.243
.236
.231
.234
.224
.229
.256
.252
.254
.215
.215
.215
.217
.233
.233
.233
.231
.227
.232
.220
.217
5,200
Federal Home Loan Bank
$0. 271
.269
.223
Review
METHOD OF CALCULATING B U I L D I N G V O L U M E
Depth W » Width L * Length H
All i n l i n e a r f e e t .
GAfcLfc.
[N9
TYPICAL EXAMPLE
Height
ftOOP-
JoDMfca
£
f<K*ATTiC f L O O R . - ^ N J
B. MAIN STRUCTURE: Pull Volume-LxWxH
Bottom 1st Floor Joists to top
of Ceiling Joists.
Example;
Length - 28•
Width - 26•
Height - 19•
28x26x19 z 13.832 <cu ft
j
f |N« CfclLlHG
f<N' f - L O O f t . - }
"^r
flN* CctLlNC
&AY
C« ATTIC -Full Volume - LxWxH
WINDOW
Top of Ceiling Joists to
Average Height of Roof
Example:
Length - 28•
Width - 26•
Height - 4i» (i of height to
roof peak)
28x26x4i - 3276 cu ft
flH» f L O O P . - 3
fLOOR.
JOISTS
m
N*
EXTERIOR PORCH
/~FlH« &A3tM£.WT fLOOR
fROST t l M f J M
5 CLCTIO N
I
Wit
tes
"vm
h
Q
WIOTHV
01
ft
*
r ^
26'0M
f-Looo.
j
PLAN
Open - Part Volume1
LxWxHxl/3
Length • 26•
Width - 8»
Height - 12*
26x8x12x1/3 * 832 cu ft
Note: The proportion of full
volume taken depends upon
the type of construction
and its cost*
E. BAY WINDOW - Full Volume - LxWxH
Length - 7 1
Width - 2i»
Height - 8»
7x2jx8 s 140 cu ft
F. OPEN OUTSIDE AREAWAY - Full Volume
Length • 6»
Width - 4 1
Height - 4» 6x4x4 s ;96 cu ft
LzNorti
m
A# BASEMENT: Full Volume - LxWxH
Height Measured from finished
surface of basement floor to
bottom of 1st floor Joists plus 6»
Length - 28 •)
Width - 26«)28x26x7 * 5096 cu ft
Height - V )
•&£*\
G. DORMER - Full Volume - £ £ £ £
Measurements to be made as shown
on Diagram
Length - 8«
Depth - 4*
Height - 5» 8x4x5
80 cu ft
2
H. SUMMARY
5096 + 13*832 + 3276 + 832
t 140 •+ 96 + 80 - 23,352
October 1936
13
CALCULATING VOLUME OF DIFFERERENT ROOF TYPES
GAMBREL ROOF
CUBIC CONTENT
WxLxHxg
3
£upPt&./iDt ATTIC fboon pot5]
l£
WIDTH
FLOOR Jo 1515
PYRAMID ROOF
CUBIC CONTENT
WIDTH
WxLxH
3
MANSARD ROOF
CUBIC CONTENT
[(WxL)+(W«xL» )|xi!
2
GABLE ROOF
CUBIC CONTENT
WxLxH
Wi&TH
See illustration on
reverse side*
CONNECTING GABLE ROOF
H = HEIGHT FROM UPPER SIDE
OF ATTIC JOIST TO TOP OF RIDGE
CUBIC CONTENT SAME AS FOR
GABLE ROOF PLUS VxLxH
6
HIP ROOFS
FIGURE SAME AS FOR GABLE ROOF AND DEDUCT WxLxH FOR SINGLE HIP:
DEDUCT WxLxH FOR DOUBLE HIP.
6
3
14
Federal Home Loan Bank
Review
Monthly Lending Activity of Savings and
Loan Associations
D
URING August, 2,685 savings and loan
associations representing every State,
the District of Columbia, and Hawaii, reported total new loans made for all purposes of $41,372,000. The number of reporting associations actually making loans
during the month was 2,148 while 537 reported no loans made. Combined assets
of all reporting associations (for the most
part as of August 31, 1936) were $2,460,940,500.
The accompanying table breaks down by
States and by Federal Home Loan Bank
Districts the number and volume of loans
and the purposes for which they were
made. For the United States as a whole,
the reporting associations made mortgage
loans on 1- to 4-family nonfarm homes to
16,365 borrowers in the amount of $36,899,700. Analyzing these nonfarm home loans
by purpose, we find that 33.5 percent of
the total volume went for new construction. Home purchase accounted for 33.3
percent, refinancing for 25.5 percent, and
reconditioning for 7.7 percent.
The number of associations reporting
their monthly lending activities continues
to represent a regrettably small proportion
of the industry. The value of a complete
picture of current lending activities as a
means of increasing public respect of and
goodwill towards the savings and loan business is generally admitted. Associations
are, therefore, urged to cooperate in making this complete picture available.
Monthly lending activity and total assets as reported by 2,685 savings and loan associations in August 1936
[Source Monthly reports from sayings and loan associations to the Federal Home Loan Bank Board]
[Dollar amounts are shown in thousands of dollars]
Loans made in August according to purpose
Number of
associations
Mortgage loans on 1- to 4-family nonfarm homes
Federal Home Loan
State
Submit- Reporting
ting
loans
reports made
UNITED STATES
2,685
Construction
Home purchaseJ
Refinancing and
reconditioning a
Loans for all
other purposes
Total loans all
purposes
Amount
Num- Amount Num- Amount
ber
ber
Number
Total
assets
Aug. 31,
1936 »
ReconReNumfinanc- dition- Number Amount ber Amount
ing
ing
2,148 3,954 $12,335.7 5,170 $12,295.2 7,241 $9,416.4 $2,852.4 2,803 $4,472.3 19,168 $41,372.0 $2,460,940.5
149
133
198
771.6
516
1,487.2
491
701.3
238.1
199
317.3 1,404
3,515.5
264,310.9
Massachusetts....
New Hampshire..
33
18
78
10
4
6
28
13
74
9
4
5
44
15
104
11
16
8
147.0
37.1
502.1
27.6
47.2
10.6
25
48
334
24
67
18
77.1
82.0
1,011.0
51.8
216.3
49.0
63
55
271
39
47
16
182.1
49.0
340.2
32.0
60.7
37.3
18.7
28.2
156.0
13.3
18.3
3.6
10
11
111
19
36
12
8.5
5.0
200.9
39.1
38.0
25.8
142
129
820
93
166
54
433.4
201.3
2,210.2
163.8
380.5
126.3
24,030.3
10,860.1
190,440.8
10,073.6
25,090.0
3,816.1
No. 2—New York...
289
166
345
1,306.0
294
993.8
353
520.5
190.8
200
189.3 1,192
3,200.4
316,280.5
168
121
65
101
29
316
85.3
1,220.7
35
259
101.7
892.1
89
264
122.6
397.9
44.0
146.8
27
173
180
41.9
147.4 1,012
395.5
2,804.9
122,960.1
193,320.4
New York
1
Loans for home purchase include all those involving both a change of mortgagor and a new investment by the reporting institution on a property 2already built, whether new or old.
Because many refinancing loans also involve reconditioning it has been found necessary to combine the number of such loans, though amounts
are shown separately.
Amounts shown under refinancing include solely new money invested by each reporting institution and exclude that part of all recast loans
involving no additional investment by the reporting institution.
» Assets are reported principally as of Aug. 31, 1936. A few reports have been submitted as of the first of the year.
October 1936
97873—36—
15
Monthly lending activity and total assets as reported by 2,685 savings and loan associations in August 1936Continued
[Source: Monthly reports from savings and loan associations to the Federal Home Loan Batik Board]
[Dollar amounts are shown in thousands of dollars]
Loans made in August according to purpose
associations
Mortgage loans on 1- to 4-family nonfarm homes
Federal Home Loan
Bank District and
State
Submit- Reporting
ting
loans
1 reports made
No. 3—Pittsburgh..
Pennsylvania
|
1
No. 4—Winston-Salem
District
of
Co-
Florida
North Carolina...
South Carolina...
No. 5—Cincinnati..
Ohio
No. 6—Indianapolis.
Indiana
No. 7—Chicago.,
No. 8—Des Moines.
Iowa
North Dakota
South D a k o t a . . . .
No. 9—Little Rock..
Arkansas
Louisiana.
Texas
No. 10—Topeka....
No. 11—Portland...
Utah
Washington
Wyoming.
No. 12—Los Angeles.
Hawaii
i
,„ 1
lv7
Refinancing and
reconditioning
Construction
Loans for all
other purposes
Home purchase
Total loans all
purposes
Amount
Number
Amount Number Amount
Number
ReReconNumfinanc- dition- Number Amount ber
ing
ing
$361.2 $100.6
Total
assets
Aug. 31,
1936
Amount
$1,316.8 $123,197.3
267
152
78 !
$215.3
260
$570.9
274
42
$68.8
654
6
237
24
4
127
21
o
0.0
138.8
76.5
6
199
55
17.0
464.9
89.0
2
197
75
1.2
247.8
112.2
1.0
80.5
19.1
3
34
5
3.5
61.3
4.0
11
476
167
22.7
993.3
300.8
4,381.8
106,619.1
12,196.4
289 <
258
695
2,277.8
536
1,235.5
955
1,318.5
372.2
486
1,343.4 2,672
6,547.4
233,603.8
17
15
26
55.5
63.2
33
51.5
9.5
14
13.8
112
193.5
13,982.4
16
49
42
46
52
32
35
16
44
39
35
51
28
30
88
172
74
51
138
73
73
540.3
823.7
133.6
206.1
235.8
130.8
152.0
34
78
77
109
87
23
89
153.6
190.6
159.2
288.5
139.2
50.4
190.8
184
127
135
63
193
51
169
377.0
180.9
187.2
89.0
158.3
40.5
234.1
61.3
77.1
46.3
26.5
83.0
17.9
50.6
224
34
34
27
75
26
52
946.3
107.6
31.2
49.4
118.9
24.8
51.4
530
411
320
250
493
173
383
2,078.5
1,379.9
557.5
659.5
735.2
264.4
678.9
100,627.8
15,184.7
11,214.8
32,093.2
29,390.8
7,874.7
23,235.4
379
307
459
1,507.5
973
2,567.0 1,125 1,544.9
216.2
2,283.0
67.8
616.2
46
1
32
39 !
56
289
34
46
229
32
46
290
123
156.6
1,129.0
221.9
93
839
41
163
149
228
564.3
365
471.1
351
435.5 2,908
6,526.0
473,476.8
213.1
176
792 1,113.7
218.1
157
67.9
360.8
42.4
62
274
15
377
36.4
375.4 2,195
336
23.7
690.2
5,261.9
573.9
42,086.7
420,016.2
11,373.9
672
440.2
277.8
212
297.1 1,477
2,195.6
176,915.3
210.4
67.4
122
90
122.8 1,024
453
174.3
1,244.3
951.3
102,656.2
74,259.1
187.3
377.0
277
88
417.8
198.4
518
154
306.0
134.2
207
59777
430
l7l48T9
823
1,401.1
322.4 ^ 1 9 1
200T0 1,651
3,670.1
203^804.1
90
117
279.9
317.8
333
97
862.2
286.7
654 1,125.1
276.0
169
231.3
91.1
161
30
154.2 1,238
413
45.8
2,652.7
1,017.4
142 043 0
61,761.1
156
205
600.4
287
616.2
602
733.1
190.3
185
258.4 1,279
45
34
59
12
6
50
68
59
17
11
121.1
241.9
182.7
35.8
18.9
89
75
91
18
14
168.0
171.1
203.2
61.4
12.5
144
210
185
40
23
96.4
326.9
264.3
27.7
17.8
54.6
70.7
35.5
23.3
6.2
36
39
81
22
7
260
216
392
1,013.1
443
861.1
499
454.2
219^4
211
40
61
26
12
121
34
54
21
8
99
44
87
26
17
218
88.8
282.6
40.7
32.1
568.9
40
178
23
15
187
50.5
433.2
26.7
28.3
322.4
73
131
60
9
226
49.2
161.9
20.6
14.1
208.4
29.7
69.3
29.1
2.2
89.1
22
95
26
5
63
175
147
233
606.0
405
730^2
496
512.5
181.0
33
68
30
44
26
55
24
42
44
63
40
86
141.5
127.8
125.2
211.5
55
117
100
133
125.3
181.1
170.1
253.7
63
150
145
138
91.6
128.5
132.0
160.4
13.4
63.3
47.8
56.5
111
104
313
764.1
250
493.5
478
626.8
7
11
25
7
51
10
7
10
21
7
50
9
45
20
69
29
143
7
109.6
54.4
169.6
91.7
320.3
18.5
21
32
35
21
132
9
47.5
69.8
85.2
50.1
221.9
19.0
43
27
104
47
236
21
53.3
17.5
161.1
55.3
317.1
22.5
141
131
601
2,lllT9
411
974.7
473
2
135
2
2
2
125
2
2
6
588
0
7
18.3
2,070.5
0.0
23.1
2
402
4
3
6.9
942.8
15.2
9.8
7
455
0
11
114
49
105
44
107
121
280
229
201
79
160
69
182
53
43
62
17
7
2,398.4
94,964.3
319
392
416
97
55
486.2
926.7
753.3
171.8
60.4
21,657.4
23,013.4
40 767 3
7,618.6
1,907.6
37973 1,545
2,927.1
134,733.8
29.1
237.9
31.2
5.3
75.8
179
491
135
46
694
247.3
1,184.9
148.3
82.0
1,264.6
8,540.8
65,603.0
4,208.4
1,944.6
54,437.0
324
412.0 1,458
2,441.7
137,768.3
18
81
111
114
27.1
104.0
142.2
138.7
180
411
396
471
398.9
604.7
617.3
820.8
10,079.8
40,828.9
40,154.6
46,705.0
179.7
179
263.4 1,220
2,327.5
77,454. !•
17.9
19.6
51.2
17.3
62.6
11.1
13
13
43
2
105
3
13.4
18.0
92.2
3.3
134.2
2.3
122
92
251
99
616
40
241.7
179.3
559.3
217.7
1,056.1
73.4
3,896.8
9,493.7
17,983.4
5,991.3
36,984.9
3,104.3
802.1
109T0
223
30775 1^,708
4,305.5
224,431.0
14.9
764.3
0.0
22.9
0.0
106.0
0.0
3.0
0
214
4
5
0.0
15
292.0 1,659
3.7
8
12.1
26
40.1
4,175.6
18.9
70.9
533 8
221,718!4
826 0
1,352.8
46.1
116.1
67.6
23.6
5.0
Federal Home Loan Bank
Review
Residential Construction Activity and
Real-Estate Conditions
T
HE index of residential construction,
as measured by building permits
granted in all cities of 10,000 and more
population, fell off in August to 28.9 percent of the 1926 base of 100. This figure
has been adjusted for seasonal variation.
The adjusted index for July was 37.9 percent (charts 1 and 2).
The estimated number of family dwelling units authorized in the cities covered
was 15,811 in August, involving an estimated cost of $65,645,500 (table 1). These
figures represented an increase over August
1935 of 97.4 percent in the number of units
and 117.2 percent in estimated cost.
August also witnessed a drop in the high
proportion of multifamily dwelling units
which has characterized building activity in
recent months. Buildings containing 3- and
more-family units accounted for only 36 percent of total residential construction
whereas 1- and 2-family dwellings con-
stituted 64 percent. The ratio in July was
almost 50-50.
The average cost of 1-family dwelling
units authorized in August was $4,141, remaining practically unchanged from the
average cost in August 1935, whereas the
average cost of multifamily units jumped 55
percent from $2,815 in August 1935 to $4,371
in August 1936. The average cost of such
multifamily units was 8.8 percent greater
in August 1936 than in July 1936.
FORECLOSURES AND OTHER REAL-ESTATE
CONDITIONS
CHART 2 pictures the movement of residential construction, industrial production,
real-estate foreclosures, and housing rentals. All these activities are shown in comparison to a base line of 100 for the year
1926. The following brief table gives the
story of the charts in percentages of this
base. It is notable that rentals, as measured by the National Industrial Conference
CHART I.- -NUMBER AND COST OF FAMILY DWELLING UNITS FOR WHICH PERMITS WERE GRANTED, BY MONTHS,
IN CITIES OF 10,000 OR MORE POPULATION; 1936 COMPARED WITH SELECTED PERIODS
[Source: Federal Home Loan Bank Board.
30 r
1
Compiled from residential building permits reported to U . S. Department of Labor]
NUMBER OF U N I T S PROVIDED
1
1
1
1
,
1
1
1
1
,
130
28
28
26
26
<o
24
24
z
3
22
22
100,000 I
1
1
COST OF U N I T S PROVIDED
1
1
1
1
1
1
1
1
1
1100,000
90,000
1936
80,000
70,000
V
20
20
a
<
191'£
70,000 -*
~*~** i
18
o
w
o
z
16
16
|4
14
12
12
<
«
19 ?5
10
J^_
3
o
x
•-
8
19 3P-3*
6
4
YJ>*
>
<,"
A VG
,
""-S
""" - —
40,000
ir
/
"^/
^
7
v
\
—'- ***. — ^
^-^
/
^ /
/9s
20,000
4
2
40,000 o
19 35
„.-.-
\
V
N
S2-2, 4 A (1
20,000 x
J.
lOjOoofr^J-grv
•V
2
0D
J
F
October 1936
M
A
M
A
S
p
N
0
P
J
F
M
A
M
J
^
A
^
O
N
P
17
Board, continued the unbroken rise which
began in 1934, reaching 78.3 percent of the
1926 base of 100.
The preliminary index of foreclosures in
78 large urban counties dropped sharply
from 279 in July to 259 in August, the lowest
point since 1931. The drop brought the August index 29 percent under the figure for
August 1935. For the first eight months of
1936, foreclosures were 27.9 percent below
the corresponding period of 1935. Out of
the 78 urban counties included in the index,
35 reported a greater number of foreclosures in August than in July, 41 reported
a lower number, and in 2 cities, the number
was unchanged.
BUILDING ACTIVITY BY FEDERAL HOME LOAN
BANK DISTRICTS AND STATES
TABLE 2 reveals that, as in June and July,
New York is far in the lead in the number
of dwelling units authorized in August. It
accounted for 3,065 units. California was
second with 2,101; Tennessee was third with
1,218, most of which were multifamily
units; Texas, fourth; and New Jersey, fifth.
Chart 3 compares graphically the rate of
building (as distinguished from volume of
building) among Federal Home Loan Bank
Districts. In rate of building, the Los Angeles District again took a commanding lead
with 51 units per 100,000 urban population.
Winston-Salem was second with 41 units,
and New York dropped back to fifth place.
[1926=100]
Residential
con-
Industrial
pro-
Rentals
Foreclosures
1
Per- Aug.
PerJuly
cent
cent
1936 change
1935 change
Aug.
1936
Series
28.9
1
37.9 - 2 3 . 7
*99.2 99.2
78.3 77.1
259. 0 279.0
14.6 + 97.9
0 80.6 + 23.1
+ 1.6 70.6 + 10.9
- 7 . 2 365.0 - 2 9 . 0
Preliminary.
CHART 2.—COMPARISON OF RESIDENTIAL REAL-ESTATE CONDITIONS AND INDUSTRIAL PRODUCTION
IN THE UNITED STATES
(1926=100)
11
11
1
1
REAL ESTATE FORECLOSURES 1
r
RES IDEN1 IAL <SONS! RUCT ION
(NUM BER
OF F A M I L Y D W E L L I N G
A0JU STEO
UA
ITS)
SEVENTY-EIGHT
IN
LARGE
URBAN
COUNTIES
1
| t »
3SO
300
SE
250 o
200
sour C E - F E D
(U.9
:RAL
HE LOAM IAHK t O « RD
0 f LABOR RECORD s)
MO
DEPT
1930
RTS)
1932
1994
1933
1936
1926
1927
1926
1929
1930
1926
1927
1928
1929
1930
1931
1932
1933
1932
1933
1934
1935
1936
1937
1935
1936
1937
1r
1
1
1934
"l
IN... . RIAL PROD UCTI0 N
DUST ADJU S T E O
AV
, /
\
>\
v,
V/
•OUR C E - r E 0
I92B
1927
•RAL
RE
1928
18
A r\\l 1\j
/
v
ERVE B ARD (CO V E R T E 0 TO I t Z C BASE)
1929
1930
1931
1932
1933
1934
1935
Federal Home Loan Bank
Review
CHART 3 . — R A T E OF R E S I D E N T I A L B U I L D I N G I N T H E U N I T E D STATES AND I N EACH FEDERAL HOME LOAN
BANK DISTRICT, BY MONTHS
Represents the estimated number of family dwelling units provided per 10,000 population; based upon buildingpermit records for all cities of 10,000 or more inhabitants.
[Source: Federal Home Loan Bank Board. Compiled from reports to U. S. Department of Labor]
- L E G E N D -
1935
1936
U.S. AVERAGE
DISTRICT
I-BOSTON
DISTRICT 2 - N E W
YORK
1936.
DISTRICT 3 - P I T T S B U R G H
DISTRICT 4 - W I N S T O N
SALEM
60
60
50
40
30
20,
10
0
J F M A M J J A S 0 N D
DISTRICT
5-CINCINNATI
J F M A M J J A S 0 N D
DISTRICT
6-INDIANAPOLIS
J F M A M J J A S O N D
DISTRICT
7-CHICAGO
J F M A M J J A S O N D
DISTRICT 8 - D E S
MOINES
60
50
50
n
40
30
1 —
1
—F=»
\—
—
'
20
L
I" 19360 F"
Ji=-r
JFMAMJ
f
1936-br1
^- 9 3 5
J A S 0 N 0
DISTRICT 9 - L I T T L E
ROCK
J F M A M J J A S 0 N 0
DISTRICT
10-TOPEKA
J FMAMJ
DISTRICT
JASOND
11-PORTLAND
J F M A M J J A S O N D
DISTRICT 1 2 - L O S
ANGELES
60
50
40
30
i^h^
J
I93!K
20
10
JFMAMJ
October 1936
JASOND
JFMAMJJASOND
J FMAMJ
JASOND
JFMAMJJASOND
0
TABLE
1,—Number and estimated cost of new family dwelling units providedl in all cities of 10,000
population or over in the United States, in August 1936
[Source: Federal Home Loan Bank Board. Compiled from residential building permits reported to U. S. Department of Labor]
Average cost of family
units
Total cost of units (000
omitted)
Number of family units
provided
Type of structure
August
1936
August Percent
1935
change
All housekeeping dwellings.. 15, 811
Total 1- and 2-family dwell10,179
9,425
1-family dwellings
668
2-family dwellings
2
86
Joint home and business . . .
3- and more-family dwellings. 5,632
8,010
August
1936
August
1935
Percent August
1936
change
+ 97.4 $65, 645. 5 $30, 224. 5 + 117.2
6,616 +53.9
6,172 + 52.7
394 +69.5
50 + 72.0
1,394 + 304.0
41, 030. 7
39, 031.1
1, 743.1
256.5
24, 614. 8
26, 301. 0 + 56.0
25,162. 2 + 55.1
1, 024. 3 +70.2
114.5 + 124.0
3, 923. 5 + 527.4
August Percent
1935
change
$4,152
$3, 773
+ 10.0
4,031
4,141
2,609
2,983
4,371
3,975
4,077
2,600
2,290
2,815
+ 1.4
+ 1.6
+0.3
+ 30.3
+55.3
1
Estimate is based on reports from communities having approximately 95 percent of the population of all cities
with2population 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 August 1936, by Federal Home Loan Bank Districts and by States
[Source: Federal Home Loan Bank Board. Compiled from residential building permits reported to U. S. Department of Labor]
All residential dwellings
Federal Home Loan Bank
Districts and States
Number of family
dwelling units
August
1936
UNITED STATES
15, 811
August
1935
All 1- and 2-family dwellings
Estimated cost
(thousands of dollars)
August
1936
August
1935
8,010 $65, 645. 5 $30, 224. 5
Number of family
dwelling units
August
1936
10,179
August
1935
Estimated cost
(thousands of dollars)
August
1936
August
1935
6,616 $41, 030. 7 $26, 301. 0
965
455
4,493.1
2, 257. 8
643
438
3, 223.1
2, 222. 2
434
62
346
30
90
3
100
22
250
20
57
6
1, 911. 3
147.1
1, 984. 2
81.2
355.3
14.0
443.0
82.1
1,465. 3
56.2
176.7
34.5
147
51
330
22
90
3
100
22
233
20
57
6
744.6
118.5
1, 934. 6
56.1
355.3
14.0
443.0
82 1
1, 429. 7
56.2
176. 7
34 5
3,853
1,828
18,117. 2
6, 809. 7
1,279
842
5, 622. 3
3 917 4
788
3,065
216
1,612
4,113. 8
14, 003. 4
1, 266. 0
5, 543. 7
261
1,018
216
626
1, 483. 4
4,138. 9
1, 266. 0
2 651 4
No. 3—Pittsburgh
831
510
4, 560.4
2, 255. 8
537
435
2, 872. 6
1, 950. 6
Delaware
Pennsylvania
West Virginia
16
743
72
12
423
75
78.4
4, 220.1
261.9
48.0
1, 948. 7
259.1
16
453
68
12
354
69
78.4
2, 544. 3
249.9
48 0
1, 652. 6
250 0
2,048
1,124
7, 025. 8
3, 996. 8
1,326
986
4, 599. 2
3, 733. 5
106
583
466
142
123
201
298
129
108
280
234
120
82
150
51
99
173.7
2,163. 4
1, 326. 9
415.8
526.7
535.0
1, 362. 0
522.3
387.3
1, 378. 8
693.4
281.7
353.1
414.9
165.8
321.8
101
189
398
126
119
193
82
118
108
184
225
120
78
121
51
99
148.7
1,198. 4
1,170. 0
298.6
518.7
520.7
238.6
505.5
387.3
1,199. 3
676.6
281.7
338.1
362.9
165.8
321.8
No. 1-Boston
Connecticut
Maine
Massachusetts
New Hampshire
Rhode Island
Vermont
No. 2—New York
New Jersey
New York
No. 4—Winston-Salem
Alabama
District of Columbia
Florida
Georgia
Maryland
North Carolina
South Carolina
Virginia
—
20
—
Federal Home Loan Bank Review
2.—Number and estimated cost of new family dwelling units provided in all cities of 10,000
population or over, in August 1936, by Federal Home Loan Bank Districts and by States—Continued
TABLE
All 1- and 2-family dwellings
All residential dwellings
Number of family
dwelling units
Federal Home Loan Bank
Districts and States
Estimated cost
(thousands of dollars)
Number of family
dwelling units
Estimated cost
(thousands of dollars)
August
1936
August
1936
August
1935
$1, 634. 3
667
319
$3, 092. 6
$1, 602. 3
386.5
2, 557.1
5, 339. 2
139.0
1, 304. 0
191.3
95
436
136
34
213
72
349.5
2,419.1
324.0
134.0
1, 277. 0
191.3
328
3, 867. 7
1, 706. 9
785
328
3, 844. 2
1, 706. 9
167
631
64
264
669.7
3,198. 0
238.3
1,468. 6
167
618
64
264
669.7
3,174. 5
238.3
1,468. 6
642
335
2, 993.4
1,464. 7
579
324
2, 843. 9
1, 431. 6
Illinois
Wisconsin
305
337
123
212
1, 667.0
1, 326.4
628.9
835.8
291
288
123
201
1, 603. 5
1, 240. 4
628.9
802.7
No. 8—Des Moines
673
530
2,183. 6
1, 889. 5
649
511
2,132. 6
1, 857. 6
Iowa
Minnesota
Missouri
North Dakota
South Dakota
148
206
237
32
50
104
154
206
36
30
476.9
814.0
772.1
71.9
48.7
357.5
620.0
734.3
100.0
77.7
134
206
227
32
50
104
154
191
32
30
430.9
814.0
767.1
71.9
48.7
357.5
620.0
711.4
91.0
77.7
No. 9—Little Rock
1,189
920
3, 097. 0
2, 473. 7
1,097
891
2, 949. 8
2, 423. 3
46
144
68
51
880
17
57
65
16
765
114.8
517.4
156.4
117.4
2,191. 0
52.9
191.0
201.6
47.4
1, 980. 8
46
144
68
48
791
17
57
60
16
741
114.8
517.4
156.4
111.4
2, 049. 8
52.9
191.0
193.8
47.4
1, 938. 2
434
275
1, 409. 2
867.7
407
267
1, 351. 7
849.7
102
116
56
160
37
62
51
125
435.8
373.2
187.3
412.9
180.1
153.2
158.5
375.9
94
107
56
150
37
62
51
117
415.8
355.7
187.3
392.9
180.1
153.2
158.5
357.9
August
1936
August
1935
331
$8, 282. 8
111
479
1,218
38
221
72
798
August
1936
August
1935
No. 5—Cincinnati
1,808
Kentucky
Ohio
Tennessee
No. 6—Indianapolis.. ."
Indiana
Michigan
No. 7—Chicago
Arkansas
Louisiana
Mississippi
New Mexico
Texas
No. 10—Topeka
Colorado
Kansas
Nebraska
Oklahoma
August
1935
No. 11—Portland
[
414
316
1, 278.1
958.6
379
313
1, 213. 2
948.9
Idaho
Montana
Oregon
i
47
63
84
50
159
11
13
28
8
16
239
12
149.0
132.6
305.6
156.0
489.0
45.9
34.7
77.3
26.8
48.7
713.4
57.7
34
50
84
50
150
11
10
28
8
16
239
12
116.0
113.1
305.6
156.0
476.6
45.9
25.0
77.3
26.8
48.7
713.4
57.7
2,156
1,058
8, 337. 2
3, 909. 0
1, 831
962
7, 285. 5
3, 657. 0
42
2,101
13
34
1,023
1
194.6
8, 076. 2
66.4
137.9
3, 768.1
3.0
42
1, 776
13
34
927
1
194.6
7, 024. 5
66.4
137.9
3, 516.1
3.0
Utah
Washington
Wyoming
No. 12—Los Angeles
Arizona
California
Nevada
October 1936
21
Federal Home Loan Banks
O
CTOBER 15, 1936 marks the fourth
anniversary of the opening of the
Federal Home Loan Banks. Some measure both of their success and of their present healthy condition is given in the accompanying charts. Chart 1 shows combined gross income, expenses, and net income of the 12 Banks by months during
1935 and 1936. The overhead of the Banks
remains relatively constant with the result
that any increase in gross income such as
has taken place during the last year results
in a practically parallel increase in net income. For the month of August 1936, the
combined gross income of the 12 Banks was
$383,801.39. Their combined expenses, including the Federal Home Loan Bank
Board's assessment, totaled $103,197.00,
leaving a net profit of $280,604.39.
It is perhaps worthy of note that this increase in growth and net income has been
coincident with a lowering of interest rates
on advances made by the Banks to member
institutions. The Banks have been oper-
FEDERAL HOME LOAN BANK SYSTEM
CHART 2 . — A D V A N C E S , REPAYMENTS, AND
CHART I.—GROSS
INCOME, EXPENSES, AND NET
INCOME
BALANCE O U T S T A N D I N G
(BY MONTHS)
(BY MONTHS)
450
15
13
\
GRt
?ss //ICC
ME
/ /
*Z> 1 2
B 4LANCE
{RIGHT
<o
PAYME
Z
\\
300
1
\
Ni
rr
INC hOA E
1
u
cc
1
(O
Ul
o
9
1 "
t
\
SES S)
\
\ %%«•' '
•
°
22
J\
\
11\
1
6
X
5
CO
z
«
60
<^
\\
1
4
t
1
1
1
\
\\ I /i
%
\ t1
1
1
1
/1
\
1
l
I
'4 l
1
1
V \
\
1
«
J
-I
o
60 o
1
*%
\
\\
70
/
1
h\
<o
1
\
Jt_ •.PA YML-NT 5
0
~
f
y
\
I
2
J F M A M J J A S O N D J F M A M J J A
1935
1936
\
\
MILLI
(!
A<
90
AD VAI ICE S
S T
NC FH LB B
/
\
\
o
r or*9L EX PEi tst S
4
10
<
J
_i
o
o
*
/
u.
1
1
1
1
OUTSTANDING
HAND SCALE)
\ i
t
<
1
1
% */
\
J
.-*
J
F
M
A
M
J
J
A
O N D J
F
M
A
M
J
Federal Home Loan Bank
J
A
Review
TABLE
1.—Comparison of the actual building and loan membership of the Federal Home Loan Bank
System with all building and loan associations, by Federal Home Loan Bank Districts
All building and loan associations x
District
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
Number
as of
Aug. 31,
1936
Number
Assets
U N I T E D STATES
10, 597
$5, 928,156, 000
1—Boston
2—New York
3—Pittsburgh
4—Winston-Salem
5—Cincinnati
6—Indianapolis
7—Chicago
8—Des Moines
9—Little Rock
10—Topeka
11—Portland
12—Los Angeles
368
1,808
2,788
1,383
976
451
1,103
490
443
386
188
213
564, 250,
1, 297, 641,
792,136,
413, 959,
884, 715,
300, 561,
583, 877,
223, 076,
216, 022,
268, 044,
109, 679,
274, 191,
Member building and loan
associations
000
000
000
000
000
000
000
000
000
000
000
000
Assets *
$3,122, 042, 000
. 3, 666
280, 888,
476, 580,
231, 770,
213, 231,
686, 704,
239, 811,
320, 535,
131, 836,
142, 497,
150, 499,
76, 622,
171, 062,
157
408
527
425
517
175
457
222
264
220
130
164
000
000
000
000
000
000
000
000
000
000
000
000
Proportion
Proportion
of assets
of member
of member
building and building and
loan associa- loan assotions to all
ciations to
building and assets of all
loan asso- building and
ciations
loan associations
Percent
34.61
Percent
52.66
42.66
22.62
18.90
30.66
52.97
38.80
41.43
45.51
59.59
57.25
69.15
77.00
49.78
36.73
29.26
51.51
77.62
79.79
54.90
59.10
65.96
56.15
69.86
62.39
Latest available figures.
TABLE
2.—Comparison of the actual savings bank membership of the Federal Home Loan Bank System
with all savings banks, by Federal Home Loan Bank Districts
All mutual savings banks *
Member mutual savings
banks
Number
Number
as of
Aug. 31,
1936
District
U N I T E D STATES
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
1—Boston
2—New York
3—Pittsburgh
4—Winston-Salem
5—Cincinnati
6—Indianapolis
7—Chicago
8—Des Moines
9—Little Rock
10—Topeka
11—Portland
12—Los Angeles
1
As of Dec. 31, 1935.
October
1936
Assets
Assets
1
Proportion
of member
mutual
savings
banks to
all mutual
savings
banks
Proportion
of assets of
member
mutual
savings
banks to
assets of all
mutual
savings
banks
554 $11, 212, 393, 000
8
$154, 477, 000
Percent
1.44
Percent
1.38
356
158
9
13
3
5
4
1
3, 659,113, 000
6, 320, 272, 000
620, 937, 000
231,152, 000
125, 767, 000
23, 253, 000
4, 354, 000
67, 315, 000
7
0
0
0
0
0
1
0
151, 879, 000
0
0
0
0
0
2, 597, 000
0
1.97
0
0
0
0
0
25.00
0
4.15
0
0
0
0
0
59.66
0
4
1
58, 660, 000
101, 564, 000
0
0
0
0
0
0
0
0
ated economically. In spite of the low
rates charged on advances, they had up to
August 31, 1936, set aside reserves aggregating $1,677,255. They had paid dividends
totaling $1,072,233 to their members as well
as dividends totaling $4,308,250 to the Federal Government. They had also accumulated a total unallocated surplus of $1,906,976.
Chart 2 pictures the advances, repayments, and balance outstanding by months
over the same 1935-1936 period. As of
August 31, 1936, the balance of loans outstanding had risen to an all-time high of
$125,217,759.53. During the month, advances to member institutions totaled
$7,830,488.60 while $4,713,861.22 was repaid
by member institutions.
ACTUAL AND POTENTIAL MEMBERSHIP
T H E membership of the Federal Home Loan
Bank System as of August 31, 1936, is compared with all savings and loan associations,
savings banks, and insurance companies in
tables 1, 2, and 3. It is, of course, not correct to assume that all institutions of these
TABLE
3.—Comparison of the actual insurance company membership of the Federal Home Loan Bank
System with all insurance companies, by Federal Home Loan Bank Districts
All insurance companies1
District
UNITED STATES
1—Boston
2—New York
3—Pittsburgh
4—Winston-Salem
5—Cincinnati
6—Indianapolis
7—Chicago
8—Des Moines
9—Little Rock
10—Topeka
11—Portland
12—Los Angeles
Member insurance
companies
Proportion
Proportion
assets of
of member ofmember
insurance
insurance
companies
companies
to all
to assets of
insurance
insurance
companies all
companies
Number
as of
Aug. 31,
1936
Assets as of
Dec. 31,1935
857 $24, 412, 981, 000
4
$16, 660, 000
Percent
0.47
Percent
0.07
4, 293, 667, 000
13, 386, 080, 000
1, 373, 055, 000
533, 049, 000
753, 400, 000
418, 968, 000
1, 622, 216, 000
905, 331, 000
279, 063, 000
394, 501, 000
90,135, 000
363, 511, 000
0
0
1
1
0
0
0
0
1
0
1
0
0
0
4, 744, 000
8, 708, 000
0
0
0
0
1,129, 000
0
2, 079, 000
0
0
0
1.47
1.10
0
0
0
0
1.54
0
5.00
0
0
0
0.35
1.63
0
0
0
0
0.40
0
2.31
0
Number
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
types may become members of the System
for not all of them can meet the requirements.
The Bank System has drawn its membership principally from building and loan
associations. Of the 10,597 associations reported in existence, 3,668 had joined the
System by August 31. Member institutions
represented only 34.61 percent in number of
all building and loan associations, but they
possessed 52.66 percent of all assets. It is
interesting to note the growth which has
taken place since the previous publication
of these tables in the November 1934 issue
of the REVIEW. At that time, member building and loan associations represented 26.66
percent in number and held 41.86 percent of
the assets of all associations.
Another indication that the Bank System
includes the stronger institutions in its
membership is given by a comparison of the
average gross assets. Thus, whereas the
average building and loan association has
gross assets of $560,000, the average member institution has gross assets of $850,000.
72
136
68
91
57
40
105
101
65
77
20
25
Assets
1
As of December 1934. All life insurance companies, and those fire, marine, and casualty companies carrying
mortgage loans as shown by Best's Insurance Companies, are included.
24
Federal Home Loan Bank
Review
As has been previously pointed out in the
the Federal Home Loan Bank System provides a credit reservoir for institutions which finance urban homes. As the
business of building and loan associations is
almost entirely of this sort, their use of the
System has been more immediate and extensive than that of either savings banks or
insurance companies, whose
financing
activities are much more diversified. The
extent to which savings banks and insurance companies have accepted the privileges and responsibilities of membership is
indicated in tables 4 and 5.
REVIEW,
COMBINED STATEMENT OF CONDITION OF THE
FEDERAL HOME LOAN BANKS
this issue the REVIEW ceases the regular monthly publication of the "Combined
Statement of Condition of the Federal
Home Loan Banks." Since the current
activities of the Banks which are of the
most general interest are recorded in the
monthly table on growth and lending operations, it has been decided to publish the
combined statement of condition twice a
year. The February issue will show condition of the Banks as of the end of the
year and the August issue will show their
condition as of June 30.
WITH
CHANGES IN GROWTH TABLE
4 on growth and trend of lending
operations shows some slight revisions from
tables previously published in the number
and assets of member institutions as of specific dates. Hitherto, the number of members reported have represented the institutions approved by the Federal Home
Loan Bank Board for membership. It has
been decided to correct the figures to show
instead the number of members as reported
TABLE
TABLE
at each date by the 12 Federal Home Loan
Banks. In view of the fact that assets of
member institutions change monthly and
can, therefore, only be estimated, it has
been decided to report them only at the
semiannual periods nearest the dates on
which members make their annual or semiannual reports.
No changes were made in interest rates
on advances to member institutions during
the month.
4.—Growth and trend of lending operations
Balance
RepayLoans
Loans
outstand- Borrowing2
ments
advanced advanced
at end capacity
(cumula- (monthly) (monthly) ing
(000
of month
Estimated
(000
(000
tive)
(000
omitted)
(000
assets l (000 omitted) omitted) omitted)
omitted)
omitted)
Members
Month
Number
December
December
December
December
1932
1933
1934
1935
119
2,086
3,072
3,460
$217, 000
2, 607, 000
3, 305, 000
3, 020, 000
$837
90, 865
129, 545
188, 675
$837
7,132
2,904
8,414
$889
3,360
2,708
$837
85, 442
86, 658
102, 795
193, 746
197, 530
202, 041
207, 878
215, 085
226, 645
235,152
242, 983
5,071
3,784
4,511
5,836
7,207
11, 560
8,507
7,830
5,065
3,642
4,095
3,222
2,258
3,895
4,993
4,714
102, 800
102, 942
103, 358
105, 972
110, 922
118, 587
122,101
125, 218
1936
January
February
March
April
May
June
July
August
3,495
3,516
3,538
3,581
3,604
3,640
3,659
3,678
3, 250, 000
$869, 000
869, 000
869, 000
1
Estimates of assets are brought up to date semiannually.
Based upon the potential stock holdings and the legal borrowing capacity of member institutions.
NOTE.—All figures, except loans advanced (monthly) and repayments, are as of the end of month.
2
October 1936
25
TABLE
5.—Interest rates, Federal Home Loan Banks: rates on advances to member institutions 1
Federal Home Loan
Bank
1 Boston
2.
3. Pittsburgh
4. Winston-Salem
5.
6. Indianapolis
7 Chicago
8.
9.
10 Topeka
11 Portland
12. Los Angeles
Rate in
effect on
Oct. 1
Type of loan
Percent
All advances.
3
3 ^ All advances for 1 year or less.
3% All advances for more than 1 year shall be written at 4 percent, but interest collected
at 3% percent during 1936.
3 ^ All advances for 1 year or less. All advances for more than 1 year are to be written
at 4 percent, but until further notice credit will be given on all outstanding
advances for the difference between the written rates of 5, 4%, or 4 percent and
3J^ per centum per annum.
3 ^ All advances, with the provision that the interest rate may be increased to not
more than 4}£ percent after 30-days written notice.
All advances.
3
All secured advances.
3
3/ 2 All unsecured advances, none of which may be made for more than 6 months.
All secured advances are to be written at 3% percent, but interest collected at 3
3
percent.
3/ 2 All unsecured advances.
3-3/ 2 On all advances up to $1,000,000, the interest rate shall be 3% percent. If the
balance of loans outstanding to any one member equals or exceeds $1,000,000,
the interest rate thereon shall be at the rate of 3 percent.
All advances.
3
Do.
3
All advances to members secured by mortgages insured under Title II of National
3
Housing Act.
All advances for 1 year or less. All advances for more than 1 year are to be written at
3/2
4 percent, but interest collected at 3J4 percent so long as short-term advances
carry this rate.
All advances.
3
1
On May 29, 1935, the Board passed a resolution to the effect that all advances to nonmember institutions upon
the security of insured mortgages, insured under Title II of the National Housing Act, "shall bear interest at rates of
interest one-half of 1 per centum in excess of the current rates of interest prevailing for member institutions."
26
Federal Home Loan Bank Review
Federal Savings and Loan System
F
EDERAL savings and loan associations
in August again set a new peak in the
volume of mortgage loans made. One
thousand and ninety-five reporting associations loaned $21,043,000.
Comparable reports of monthly operations for both July and August were received from 1,025 identical Federal savings
and loan associations. The summary of
their activities for each month is shown in
table 2. These associations made $20,060,000 in new mortgage loans during August,
which is 1.6 percent more than they made
during the unusually active month of July.
As a result of their August activity, they
registered a net increase of 3 percent in the
business on their books.
Analyzing the mortgage loans of these
1,025 associations according to the purposes
for which they were made, new construction accounted for 36.2 percent in dollar
volume, the highest proportion devoted to
this purpose since Federals began operations. Loans for home purchase represented 26.3 percent and loans for reconditioning 5.9 percent of the total loans made.
Loans for refinancing were 25.6 percent.
To meet this heavy demand for funds for
mortgage loans, the 1,025 Federal associations increased their net borrowings from
the Federal Home Loan Banks by $1,320,200
during August. This sum brought the total
of Bank advances outstanding to these associations to $45,162,100. During the same
month, share subscriptions by the Home
Owners' Loan Corporation
increased
$6,832,700. At the end of August, Treasury
and Home Owners' Loan Corporation subscriptions in these associations together
amounted to $108,954,000. As of the same
date, private shareholders had paid in
$413,199,200 on their shares.
The reporting associations received 45
percent less in new private share investments in August than in July. Monthly
repurchases declined 33 percent during the
same period.
N E W CHARTERS GRANTED
Federal charters were granted to 12 associations during the month of August.
Three of these associations were newly organized while the remaining 9 were formerly State-chartered associations that
converted to Federal charter. Table 1,
however, shows a net increase of only 10
associations, due to cancelation during the
month of the charters of 2 recently
organized associations.
TABLE 1.-—Progress in, number and assets of Federal savings and loan associations
Approximate assets
Number at specified dates
Dec. 31, Dec. 31, Dec. 31, July 31, Aug. 31, July 31,1936
1936
1936
1934
1933
1935
New
Converted
Total
October 1936
Aug. 31,1936
57
2
481
158
605
418
645
520
646
529
$116, 884, 603
555, 669, 387
$116, 946, 803
558, 637, 745
59
639
1,023
1,165
1,175
672, 553, 990
675, 584, 548
27
TABLE
2.—Monthly operations of 1,025 identical Federal savings and loan associations reporting during
July and August 1936
July
Share liability at end of month:
Private share accounts (number)
Paid on private subscriptions
Treasury and H. 0 . L. C. subscriptions
Total
Private share investments during month
Repurchases during month
Mortgage loans made during month:
a. New construction
b. Purchase of homes
c. Refinancing
d. Reconditioning
e. Other purposes
Total
Mortgage loans outstanding end of month
Borrowed money as of end of month:
From Federal Home Loan Banks
From other sources
Total
Total assets, end of month
28
August
Change
July to
August
579, 920
580, 908
Percent
+0.2
$412, 427, 000
102,121, 300
$413,199, 200
108, 954, 000
+0.2
+ 6.7
514, 548, 300
522,153, 200
+ 1.5
13, 594, 200
10, 876, 000
7, 480, 900
7, 279, 700
-45.0
-33.1
6, 599, 800
5, 562, 700
4, 722, 900
1, 305, 200
1, 550, 700
7, 264,100
5, 268, 700
5,139, 800
1,181, 000
1, 206, 400
+ 10.1
-5.3
+ 8.8
-9.5
— 22.2
19, 741, 300
465, 681, 500
20, 060, 000
479, 616, 500
+ 1.6
+ 3.0
43, 841, 900
2, 264, 600
45,162,100
2, 047, 300
+ 3.0
-9.6
46,106, 500
47, 209, 400
+2.4
634, 377, 700
646, 233, 800
+ 1.9
Federal Home Loan Bank
Review
Federal Savings and Loan Insurance
Corporation
B
ETWEEN August 15 and September 15
share investments in 38 savings and
loan associations received the protection of
insurance by the Federal Savings and Loan
Insurance Corporation. Of the 38 associations, 22 operate under State charter, and 9
recently converted from State to Federal
charter. The remaining 7 are newly organized Federal savings and loan associations. The addition of these institutions
brought the total number of insured savings and loan associations as of September
15 to 1,446, with combined assets of approximately $979,754,589 and with 1,125,818
shareholders.
During the same monthly period, applications for insurance were made by 56 associations with assets of $26,876,742. During
the past year the Corporation has received
an average of 48 applications each month.
Progress of the Federal Savings and Loan Insurance Corporation—Applications received and institutions
insured
APPLICATIONS RECEIVED
Cumulative number at specified dates
Assets (as of date of application)
Dec. 31, Dec. 31, Aug. 15, Sept.15,
1936
1936
1934
1935
Aug. 15, 1936
State-chartered associations
Converted F. S. and L. A
New F. S. and L. A
Total
Sept. 15, 1936
53
134
393
351
480
575
547
567
634
578
585
641
$712, 327,118
574, 515, 594
14, 074, 846
$728,196, 394
585, 264, 565
14, 333, 341
580
1,406
1,748
1,804
1, 300, 917, 558
1, 327, 794, 300
INSTITUTIONS INSURED 1
Cumulative number at specified
dates
Number
of shareholders
Dec. 31, Dec. 31, Aug. 15, Sept. 15, Sept. 15,
1936
1934
1935
1936
1936
State-chartered associations
Converted F. S. and L. A
New F. S. and L. A
Total
4
108
339
136
406
572
268
517
623
451
1,114
1,408
Assets
Share and
creditor liabilities
Sept. 15, 1936
Sept. 15, 1936
475, 766
566, 939
83,113
$372, 399, 459
530, 520, 018
76, 835,112
$327, 688, 915
486, 915, 826
75,104,170
1,446 1,125, 818
979, 754, 589
889, 708, 911
290
526
630
1
Beginning May 15, 1936, figures on number of associations insured include only those associations which have
remitted premiums. Earlier figures include all associations approved by the Board for insurance.
Number of shareholders, assets, and share and creditor liabilities of insured associations are as of latest obtainable
date and will be brought up to date after June 30 and December 31 each year.
October 1936
29
RESERVES OF THE INSURANCE CORPORATION
As OF August 31, 1936, after only two years
of operation, the Federal Savings and
Loan Insurance Corporation had reserves
amounting to $4,532,174.35. This protection
to investors in insured associations is, of
course, in addition to the $100,000,000 of
capital stock subscribed by the Home Owners' Loan Corporation. The statement of
the Corporation as of August 31, 1936,
follows:
Statement of the Federal Savings and Loan Insurance Corporation as of the close of business on
Aug. 31, 1936
ASSETS
Cash
$237, 676. 67
Accounts and other receivables
365, 644. 05
Investments—U. S. Government and
H. O. L. C. bonds
103, 336, 500. 00
Accrued interest
1, 036, 863. 43
Deferred charges—premium on bonds
purchased
56, 235. 68
Total assets
105, 032, 919. 83
LIABILITIES
Accounts payable
16, 719. 28
Deferred income—unearned premiums,
etc
484, 026. 20
Capital and surplus
104, 532,174. 35
Total liabilities
105, 032, 919. 83
REPORTS FROM INSURED ASSOCIATIONS
that investors in savings and loan
associations are becoming increasingly "in-
EVIDENCE
30
surance-minded" is furnished by an Ohio
association, which writes as follows:
The outstanding fact that we cannot overlook
in our experience w i t h our patrons since announcing insurance, is the small amount of cash,
relatively speaking, that it has required to meet
the needs of our shareholders. Our association
was on notice for five years. We fully expected
three times as much cash to go out when we
lifted our restrictions than was actually needed.
I am satisfied that the public is insuranceminded. We have had numerous examples of
the effect of insurance on individual patrons.
For instance, one of our investment certificate
holders had steadfastly declined to either accept
reduced interest on his original certificate or
permit us to exchange that original certificate to
a reduced interest basis and had better than
$9,000 invested w i t h us. He had allowed his
interest to accumulate to more than $1,000 to
prevent the rewriting of his original certificate
on a lower interest-paying rate and had simply
ignored our request to sign a conversion agreement. However, after our charter had been received, we wrote him to come in and advised him
that we had a check ready for him for all or
p a r t of his account, whichever he wanted. He
was well-informed as to insurance of his account up to $5,000 and indicated that he would
leave that amount with us and take a check for
the balance and would bring in his certificates
in a few days. A few days elapsed, and when
he came in, he had come to the conclusion that,
if he could obtain insurance on his account up
to $5,000, he could also feel safe in leaving his
entire account, w h i c h he did. He added almost
$1,000 to his principal investment.
Federal Home Loan Bank
Review
Home Owners' Loan Corporation
TABLE 1— H. 0. L. C . subscriptions to shares of savings and loan associations—Requests and subscriptions*
Uninsured State-chartered members of
the F. H. L. B.
System
Insured State-chartered associations
Federal savings and
loan associations
Total
Number Amount (cu- Number Amount (cu- Number Amount (cu- Number Amount (cu(cumu- mulative)
(cumu- mulative)
(cumu- mulative)
(cumu- mulative)
lative)
lative)
lative)
lative)
Requests:
Dec. 31, 1935
June 30, 1936
July 31, 1936
Aug. 31, 1936
Sept. 21, 1936
Subscriptions:
Dec. 31, 1935
June 30, 1936
July 31, 1936
Aug. 31, 1936
Sept. 21, 1936
1
27
60
66
70
71
$1,131, 700
2, 506, 700
2, 826, 700
2, 740, 700
2, 864, 700
33
130
150
172
181
$2, 480, 000
10, 636, 200
11, 856, 200
14,134, 900
14, 603, 900
553 $21,139, 000
1,478 56, 880, 600
1,642 63,173, 400
1,824 72, 325, 700
1,951 77, 501, 700
613
1,668
1,858
2,066
2,203
$24, 750, 700
70, 023, 500
77, 856, 300
89, 201, 300
94, 970, 300
2
21
27
33
34
100, 000
689, 000
1, 069, 000
1,144, 000
1,178, 000
24
118
134
150
165
1, 980, 000
9, 636, 600
10, 873, 700
12,158, 700
13, 246, 400
474
1,392
1,558
1,683
1,851
500
1,531
1,719
1,866
2,050
19, 846, 500
63, 142, 700
70, 998, 500
78, 690, 200
87, 778, 000
17, 766, 500
52, 817,100
59, 055, 800
65, 387, 500
73, 353, 600
Refers to number of separate investments, not to number of associations in which investments are made.
TABLE
2.—Foreclosures authorized and properties acquired by the Home Owners' Loan Corporation l
Period
Foreclosures
authorized
Foreclosures
stopped 2
Properties
acquired by
voluntary
deed and
foreclosure 8
35
Prior to 1935
1935
Jan. 1 through June 30
July 1 through Dec. 31
1936
January
February
March
April
May
June
July
August
Grand total to Aug. 31, 1936..
535
3,900
7
189
114
983
1,281
1,544
3,190
4,365
4,688
8,113
8,016
8,203
28
49
59
87
145
116
249
335
324
447
605
669
964
1,441
1,380
1,802
43, 870
1,264
8,738
1
Figures prior to 1936 are as of the month in which the action took place. Subsequent figures are as of the month
in which
the action was reported in Washington.
2
Due to payment of delinquencies by borrowers after foreclosure proceedings had been entered.
3
Does not include 2,829 properties bought in by H. O. L. G. at foreclosure sale but awaiting expiration of the redemption period before title and possession can be obtained.
In addition to the total of 8,738 completed cases, 46 properties were sold at foreclosure sale to parties other than
H. 0 . L. G.
October 1936
31
TABLE 3.—Reconditioning Division—Summary
of all reconditioning operations through Sept. 17, 1936
Total contracts awarded
Period
Number
June 1, 1934 through Aug. 13, 1936 2
Aug. 14, 1936 through Sept. 17, 1936
Grand total through Sept. 17, 1936
Total jobs completed
Cases received 1
Amount
Number
Amount
111, 767
7,154
392,151 $75, 867, 796
3,629
987, 391
373, 916
9,873
$69, 993, 241
2, 291, 417
724, 921
395, 780
76, 855,187
383, 789
72, 284, 658
1
Includes all cases referred to the Reconditioning Division whether applications from borrowers during period these
were2 being received, property management cases, insurance loss cases, and miscellaneous reconditioning.
The figures for this period are subject to correction.
NOTE.—Prior to the organization of the Reconditioning Division on June 1, 1934, the Corporation had completed
52,269 reconditioning jobs amounting to approximately $6,800,000.
Changes in Public Relations Department
of the
Federal Home Loan Bank Board
T
HIS issue of the FEDERAL HOME LOAN
BANK REVIEW concludes the editorship
of John R. Ellingston, who has directed its
publication for the past two years. Mr.
Ellingston has resigned to resume independent writing, particularly on the subjects of housing and home financing.
32
On Tuesday, October 6, Howard Acton, of
New York, assumed his duties as Director
of Public Relations for the Board, the position formerly held by George Dock, Jr.
Beginning with the preparation of the
November issue, Chester T. Crowell, of
Washington, assumes the editorship of the
FEDERAL HOME LOAN BANK REVIEW.
Federal Home Loan Bank
Review
Directory of Member, Federal, and Insured
Institutions
Added during August-September
I._INSTITUTIONS ADMITTED TO MEMBERSHIP IN THE FEDERAL HOME LOAN BANK
SYSTEM BETWEEN AUGUST 24, 1936, AND
SEPTEMBER 19, 1936 *
(Listed by Federal Home Loan Bank Districts, States, and
cities)
MASSACHUSETTS :
DISTRICT NO'. 1
Avon:
Avon Co-operative Bank, 27 Robbins Street.
Whitman:
Whitman Co-operative Bank.
DISTRICT NO. 2
NEW YORK:
Herkimer:
Herkimer Co-operative Savings & Loan Association,
100 Park Avenue.
Norwich:
Chenango Co-operative Savings & Loan Association
of Norwich, N. Y., 11 South Broad Street.
DISTRICT NO. 3
PENNSYLVANIA :
Millvale:
Millvale Building & Loan Association of Millvale
Borough, 510 Grant Avenue.
Philadelphia:
Greene & Logan Building & Loan Association, 5203
Germantown Avenue.
New Concordia Building Association, 1728 South
Broad Street.
Thirty-Sixth Ward Building & Loan Association,
Corner Twenty-seventh & Wharton Streets.
DISTRICT NO. 5
OHIO :
Ashtabula:
Ashtabula County Building & Savings Company,
4617 Main Street.
Dayton :
Dayton Building Association.
Glandorf :
Glandorf German Building & Loan Company.
Lynchburg :
Home Builders Association, Farmers Exchange Bank
Building.
Toledo:
United Savings & Loan Association, 228 Superior
Street.
DISTRICT NO. 6
INDIANA :
Fort Branch:
Fort Branch Building & Loan Association Number
Eight.
DISTRICT NO. 7
ILLINOIS :
Chicago:
King Zygmunt the First Building & Loan Association, 1758 West Forty-eighth Street.
West Highland Building & Loan Association, 1432
West Seventy-ninth Street.
Workmen Building & Loan Association, 2703 West
Forty-seventh Street.
Mackinaw:
Mackinaw Building, Loan & Homestead Association.
WISCONSIN :
Appleton:
Home Building & Loan Association of Appleton, 200
First National Bank Building.
Milwaukee:
North Avenue Savings, Building & Loan Association, 3709 West North Avenue.
IOWA:
DISTRICT NO. 8
Des Moines:
Home Savings & Loan Association, 900 Grand
Avenue.
* During this period 8 Federal savings and loan associations were admitted to membership in the System.
October 1936
WASHINGTON :
DISTRICT NO. 11
Spokane:
Citizens Savings & Loan Society, 126 Wall Street.
CALIFORNIA :
DISTRICT NO. 12
Los Angeles:
Southland Building-Loan Association, 670 North
Robertson Boulevard.
Redlands:
Redlands Building-Loan Association, 2 North Fifth
Street.
WITHDRAWALS FROM T H E FEDERAL H O M E LOAN
B A N K SYSTEM BETWEEN AUGUST 24, 1936,
AND
SEPTEMBER 19,
1936
KENTUCKY:
Bellevue:
Home Savings, Loan & Building Association, 217
Fairfield Avenue.
Fort Thomas:
Highland Building & Loan Association, 16 North
Fort Thomas Avenue.
MARYLAND:
Annapolis:
Annapolis & Eastport Building Association, Church
Circle.
Baltimore:
Raspeburg Building & Loan Association, 5718 Belair
Road.
MICHIGAN :
Birmingham:
Oakland Building & Loan Association, 243 East
Maple Avenue (consolidated with Birmingham
Federal Savings & Loan Association).
MISSISSIPPI :
Tunica:
Tunica Building & Loan Association, First East
Avenue & Harris Street.
OHIO :
Cincinnati:
Clinton Loan & Building Company, 415 Clinton
Street (partial consolidation with Business Men's
Federal Savings & Loan Association).
PENNSYLVANIA:
Philadelphia:
Citizens Building & Loan Association of Philadelphia, 4115 Lancaster Avenue.
Pittston:
Pittsfon Building & Loan Association, No. 1, 49
South Main Street.
II.—FEDERAL SAVINGS AND LOAN ASSOCIATIONS CHARTERED BETWEEN AUGUST 24,
1936, AND SEPTEMBER 19, 1936
RHODE ISLAND:
DISTRICT NO. 1
Providence:
First Federal Savings & Loan Association of Providence, 111 Westminster Street.
DISTRICT NO. 3
PENNSYLVANIA:
Philadelphia:
Penn Federal Savings & Loan Association of Philadelphia, Northeast Corner Broad & Locust Streets
(converted from Southwark Building & Loan Association).
DISTRICT NO. 4
SOUTH CAROLINA:
Greenville:
Fidelity Federal Savings & Loan Association, 1
Pendleton Street (converted from American Building & Loan Association).
DISTRICT NO. 5
OHIO :
Alliance:
Midland Federal Savings & Loan Association, 37
South Arch Avenue (converted from Midland
Savings & Loan Company).
Lima:
First Federal Savings & Loan Association of Lima,
207 West High Street (converted from Mutual
Savings & Loan Company).
33
INDIANA :
DISTRICT NO. 6
Evansville:
Union Federal Savings & Loan Association of Evansville, 10 North Sixth Street (converted from Union
Building & Loan Association).
ILLINOIS :
DISTRICT NO. 7
East St. Louis:
St. Clair Federal Savings & Loan Association, Corner
Broadway & Main Street (converted from St.
Clair Building & Loan Association).
Shelby ville:
First Federal Savings & Loan Association of Shelbyville (converted from People's Mutual Loan Association).
DISTRICT NO. 11
IDAHO :
Nampa:
Home Federal Savings & Loan Association of
Nampa, 121 Twelfth Avenue, South (converted
from Home Building & Loan Association of
Nampa).
DISTRICT NO. 2
NEW YORK:
Lancaster:
Lancaster Savings & Loan Association, 10 West
Main Street.
DISTRICT NO. 3
PENNSYLVANIA:
Ambler:
Ambler Building & Loan Association, Knight Building.
Carmichaels:
Home Building & Loan Association of Greene
County, High Street.
Darby:
Sharon Building Association of the County of Delaware, Corner Ninth & Main Streets.
DISTRICT NO. 4
DISTRICT OF COLUMBIA:
Washington:
Brookland Building Association, 1001 G Street,
Northwest.
Eastern Building & Loan Association of Washington,
D. C, 336 Pennsylvania Avenue, Southeast.
DISTRICT NO. 5
CANCELATIONS OF FEDERAL SAVINGS AND LOAN
ASSOCIATION CHARTERS B E T W E E N AUGUST
24,
1936, AND SEPTEMBER 19,
1936
KENTUCKY:
CALIFORNIA :
OHIO:
Berkeley:
University Federal Savings & Loan Association of
Berkeley, 2122 Shattuck Avenue (charter canceled
by reason of dissolution and transfer of assets to
Community Federal Savings & Loan Association
of Berkeley).
O'HIO :
Bowling Green:
First Federal Savings & Loan Association of Bowling Green (failure to complete organization).
OKLAHOMA :
Elizabethtown:
Elizabethtown Building & Loan Association, 102
West Dixie Avenue.
Cincinnati:
East Walnut Hills Building & Loan Company,
2725 Woodburn Avenue.
Cleveland:
Cleveland Savings & Loan Company, 515 Euclid
Avenue.
Toledo:
United Savings & Loan Association, 228 Superior
Street.
DISTRICT NO. 6
Muskogee:
First Federal Savings & Loan Association of
Muskogee, 437 West Broadway (consolidated with
Phoenix Federal Savings & Loan Association).
MICHIGAN :
Seattle:
Founders Federal Savings & Loan Association of
Seattle, 515 Union Street (consolidated with
Northern Federal Savings & Loan Association of
Seattle).
NEW MEXICO:
WASHINGTON :
HI._INSTITUTIONS INSURED BY THE FEDERAL SAVINGS AND LOAN INSURANCE
CORPORATION BETWEEN AUGUST 24, 1936,
AND SEPTEMBER 19, 1936 x
CONNECTICUT:
DISTRICT NO. 1
Shelton:
Shelton Building & Loan Association, Incorporated,
480 Howe Avenue.
34
Kalamazoo:
Kalamazoo Building & Savings Association, 216 East
Michigan Avenue.
DISTRICT NO. 9
Carlsbad:
Carlsbad Building & Loan Association.
Roswell:
Chaves County Building & Loan Association.
Equitable Building & Loan Association, 107 West
Third Street.
Roswell Building & Loan Association, 117 West
Third Street.
DISTRICT NO. 11
UTAH:
Salt Lake City:
State Building & Loan Association, 61 West South
Temple.
1
During this period 13 Federal savings and loan associations were insured.
Federal Home Loan Bank Review
U. S. GOVERNMENT PRINTING OFFICE: 1936
FEDERAL HOME LOAN BANK DISTRICTS
•—BOUNDARIES OF FEDERAL HOME LOAN BANK DISTRICTS.
&
FEDERAL HOME LOAN BANK CITIES.
@FedFRASER