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Vol. 5
jlm*
No. 1
*1I1L
FEDERAL
HOME LOAN BANK
REVIEW
OCTOBER
1938
ISSUED BY
FEDERAL HOME LOAN BANK BOARD
WASHINGTON D . C .
CONTENTS
FEDERAL
HOME
FOR OCTOBER
SPECIAL
1938
ARTICLES
Page
Sixth anniversary of the Federal Home Loan Banks
460
Seasonal variations in the residential construction index
Obtaining the cooperation of your members
Lower dividend rates and increased private investments
465
469
472
LOAN
BANK
STATISTICS
Residential construction and home-financing activity
REVIEW
Published monthly by the
FEDERAL HOME L O A N
BANK BOARD
John H. Fahey, Chairman
T. D. Webb, Vice Chairman
F. W. Catlett
W. H. Husband
FEDERAL HOME LOAN
BANK SYSTEM
Residential construction
Indexes of small-house building costs
Foreclosures
Mortgage-lending activity of savings and loan associations
Federal Savings and Loan System
Federal Home Loan Bank System
Federal Savings and Loan Insurance Corporation
474
476
477
477
477
478
478
479
Statistical tables
Nos. 1, 2: Number and estimated cost of new family dwelling units . . .
No. 3: Indexes of small-house building costs
Nos. 4, 5: Estimated lending activity of all savings and loan associations. .
No. 6: Index of wholesale price of building materials
No. 7: Monthly operations of Federal and State-chartered insured associations
480
480
482
484
485
486
No. 8: Institutions insured by the Federal Savings and Loan Insurance
Corporation
Nos. 9, 12, 13: Home Owners' Loan Corporation
Nos. 10, 11: Federal Home Loan Bank System
486
487
487
FEDERAL SAVINGS AND LOAN
ASSOCIATIONS
FEDERAL SAVINGS AND LOAN
INSURANCE CORPORATION
HOME OWNERS' LOAN
CORPORATION
w
REPORTS
Resolution of the Board
Directory of member, Federal, and insured institutions added during AugustSeptember
479
489
SUBSCRIPTION PRICE OF REVIEW. The 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 $1.60; single copies, 15 cents. Subscriptions should be sent to and copies ordered from Superintendent
of Documents, Government Printing Office, Washington, D. C.
APPROVED BY THE BUREAU OF THE BUDGET.
96780—38-
THE SIXTH ANNIVERSARY OF
THE FEDERAL HOME LOAN BANKS
OCTOBER 15, 1938
9
T H E Federal Home Loan Bank Act was approved on July 22, 1932. Within the short
space of a few weeks, the members of the Federal
Home Loan Bank Board were appointed and the
many pressing details of initial organization were
completed. On October 15, 1932, less than three
months after the approval of the Act itself, the 12
Federal Home Loan Banks were formally opened for
business. There had been earlier attempts to
organize a national system of banks which would
provide a permanent reservoir of home-mortgage
credit. Economists and students of finance in the
years immediately following the Armistice had seen
the need for such a national financial structure to
supply urban home-mortgage credit. The Federal
Reserve System had been in existence since 1913, and
the Federal Land Banks since 1916, so that commercial and agricultural credit were already organized on a national scale. The development of a
national reserve system of home-mortgage credit was
a logical complementary step.
In spite of the efforts of those who recognized the
necessity for such a reserve system, it was not until
the creation of the Federal Home Loan Banks that
the thrift and home-financing institutions in the
country, standing at that time as isolated units, were
at last given the opportunity to join together in the
membership of a national reserve banking system in
the home-mortgage field. For that reason, the
beginning of active operations by the Federal Home
Loan Banks was indeed significant: it marked the
end of a tradition that home-mortgage finance was
solely a local problem, in no way intimately connected with the national credit structure.
During the six years that the Federal Home Loan
Banks have been in operation, the use which has
been made of their facilities has confirmed the judgment of the many leaders who advocated the establishment of such a national credit reservoir. The
Federal Home Loan Bank System has taken its
place in the financial structure of the country, helping to maintain economic stability. The 12 Banks
and their members are a national organization,
460
lessening the disturbances to the national economy
arising from unusual expansions and contractions in
home-building activity and home-mortgage credit.
Member institutions use the Bank System's credit
facilities to maintain and to expand their lending,
and to protect themselves against sudden withdrawals of funds. Through its power to issue
debentures, the Bank System can call upon the
general credit resources of the country to meet the
needs of its members. In addition to supplying
credit, the Bank System helps to equalize the distribution of home-mortgage credit throughout the
country. Funds can be transferred from areas of
heavy supply and little demand to those localities
where home-mortgage funds are most needed.
T H E CONSOLIDATED STATEMENT OF CONDITION OF
THE FEDERAL H O M E LOAN BANKS
In reviewing the progress of the Federal Home
Loan Bank System during these six years, it is necessary to differentiate between the 12 Federal Home
Loan Banks themselves and their 3,956 member
institutions. The consolidated statement of condition of the Federal Home Loan Banks, published in
the August R E V I E W , is shown in Table 1 on a percentage basis for each of the fiscal years from 1933
through 1938 to reflect major operating trends since
organization.
ASSETS
Total assets of the 12 Federal Home Loan Banks
have risen from $53,125,000 on June 30, 1933, to
Figures or* Millions of Oollors
$265,750,000 on June 30, 1938. A rapid glance at
the percentage distribution of assets in Table 1 shows
that at the present time roughly three-quarters of
the assets of the Federal Home Loan Banks consist
of advances to member institutions. In other words,
the Federal Home Loan Banks are fulfilling their
Federal Home Loan Bank Review
primary function of providing their member thrift
and home-mortgage institutions with additional
funds by means of advances which supplement local
capital, thus increasing the ability of members to
serve their communities and giving them an opportunity to widen their lending activities.
During these six years the Federal Home Loan
Banks have advanced a total of $446,000,000 for these
purposes. At the end of 1937, advances outstanding
had reached a record level of $200,000,000. Despite
declines in subsequent months, on June 30, 1938,
the balance of advances outstanding was $196,000,000, as home building activity continued its resistance
to the declines which were generally displayed during
these months in other businesses. The accompanying chart shows pictorially the trend of advances and
repayments by months and the balance of advances
outstanding from December 1932 through June 1938.
As the balance of advances outstanding has
increased, member institutions have been increas-
ingly inclined to borrow funds on a long-term basis.
This means that member institutions are following
the sound financial principle that long-term investments such as amortized home-mortgage loans should
be made with long-term funds. On June 30, 1933,
the amount of advances for terms of not more than
one year was nearly twice as great as the amount of
long-term advances. As the following table shows,
on June 30, 1938, for every dollar loaned to members
for terms not exceeding one year, the Federal Home
Loan Banks had loaned three dollars for periods up
to 10 years.
Percentage of long-term and short-term advances to
members as of June 30, 1938
Year
Longterm
Shortterm
1933
1934__
1935
1936
1937
1938
36.6
68.0
64.4
63.0
70.8
76.0
63.4
32.0
35.6
37.0
29.2
24.0
ADVANCES AND REPAYMENTS BY MONTHS AND
BALANCE OF ADVANCES OUTSTANDING
8
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03
2
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o
D
z
o
-J
DEC.
JUNE
1933
OEC.
JUNE
1934
OEC.
JUNE
1935
DEC.
JUNE
1936
DEC.
JUNE
1937
DEC.
JUNE
1938
DEC.
DIVISION Of RESEARCH AND STATISTICS
FEDERAL HOME LOAN BANK BOARD
WASHINGTON, DC.
October 1938
461
' The growing credit requirements of members during recent years are not evidenced alone by the increasing total of advances outstanding. There has
been an increase in the number of borrowing members as compared with non-borrowing members in
the System. The ratio of borrowing members to
total membership was 54.6 at the close of the fiscal
year 1935; 63.6 at the end of June 30, 1936; 67.3 at
June 30, 1937; and 67.8 at June 30, 1938. Interest
rates on advances have been kept low. As of June
30, 1938, interest rates charged on advances to members ranged from 3 percent to 3% percent, with consequent savings in interest charged to borrowers
from member institutions.
Another important item among the assets of the
Federal Home Loan Banks is the total of cash and
investments (obligations of, or guaranteed by, the
United States). Both of the primary asset elements
of liquidity have shown significant increases in
proportion to total assets since June 30, 1933, when
cash and investments amounted to 9.76 percent of
total assets. On June 30,1938, cash and investments
amounted to 25.88 percent of total assets. During
the same period, due to the increased liquidity of the
Banks, advances outstanding dropped from 89.72
percent to 73.84 percent of total assets, although
there was a substantial increase in the dollar amount
of advances outstanding.
JUNE 30,1933
5.2
JUNE 30,1938
68 8
Figures ore Millions of Dollars
G4SW....MB
INVESTMENTS...}
Table 7.—Percentage distribution of asset, liability and capital items of the Federal Home Loan Banks,
computed on a consolidated basis
ASSETS
Cash
Investments.
Total cash and investments
Advances outstanding
(For not more than one year).
(For more than one year)
Accrued interest receivable
Deferred charges
Other assets
Total assets
LIABILITIES AND CAPITAL
Liabilities:
Deposits of members
Deposits of applicants
Accrued interest payable
Dividends payable
Accounts payable
Premiums on debentures
Consolidated debentures outstanding
Total liabilities
Capital:
Paid in on capital stock:
U. S. Government._.
Members
Total paid in capital
Surplus:
Reserve Section 16 of Act.
Undivided profits
Total capital
Total liabilities and capital_
1
June 30,
1938
June 30,
1937
June 30,
1936
June 30,
1935
June 30,
1934
June 30,
1933
Percent
12.92
12.96
Percent
4.06
10.79
Percent
4.45
9.87
Percent
17.89
10.64
Percent
5.00
12.32
Percent
8.89
0.87
25.88
73.84
(24. 00)
(76. 00)
0.24
0.04
0.00
14.85
84.82
(29. 20)
(70. 80)
0.30
0.03
0.00
14.32
85.34
(37. 00)
(63.00)
0.32
0.01
0.01
28.53
71.06
(35. 60)
(64. 40)
0.39
0.01
0.01
17.32
82.04
(32. 00)
(68.00)
0.41
0.05
0. 18
9.76
89.72
(63. 40)
(36. 60)
0.35
0.05
0. 12
100. 00
100. 00
100. 00
100. 00
100. 00
100. 00
7.48
0.04
0. 14
0.32
0.00
0.03
28.79
7.61
0. 10
0.06
0.28
0.00
0.00
12.54
6. 88
0.09
0.01
0.33
0.01
0.00
0.00
3.35
0.00
0.00
0.49
0.00
0.00
0.00
1. 18
0.00
0.00
0. 24
0.00
0.00
0.00
2.33
0.00
0.00
0.00
0.00
0.00
0.00
36.80
20.59
7.32
3.84
1.42
2.33
46.93
13.84
61. 19
16.01
71.49
19.01
73.22
20.83
78.48
18.60
80. 88
16.89
60.77
77.20
90.50
94.05
97.08
97.77
1.26
1.17
1.22
0.99
1.20
0.98
1.02
1.09
0.54
0.96
63.20
79.41
92.68
96. 16
98.58
97.67
100. 00
100. 00
100. 00
100. 00
100. 00
100. 00
0.00
0. 10
1
Deficit.
462
Federal Home Loan Bank Review
The entrance of the Bank System into the private
money market through the issuance of consolidated
debentures has also increased the creditor liabilities
of the Federal Home Loan Banks and the higher
proportion of liquidity shown in the consolidated
statement of condition for June 30, 1938, reflects
the allowance made in the liquidity program of the
Banks to cover debenture issues. As long as the
Banks had funds available from uncalled Treasury
subscriptions to capital stock it was not deemed
necessary for each Bank to maintain a liquidity
reserve in excess of the legal requirements in the form
of cash and securities, but with the initiation of
independent financing in 1937, the reserve policy of
the Banks was altered to conform to the changed
conditions.
CAPITAL
The sources of funds which may be advanced to
members are the capital stock of the Federal Home
Loan Banks, debentures, and deposits of member
institutions in the Banks.
To provide the initial capital for a national
home-mortgage reserve system the Congress authorized the Treasury to subscribe to the capital of the
Federal Home Loan Banks up to a total amount of
$125,000,000. On June 30, 1938, the paid-in
Treasury subscription amounted to $124,741,000.
Member institutions had paid in $36,771,000,
making the total paid-in capital stock of the Federal
Home Loan Banks $161,512,000.
Figures are Millions of Dollars
PRIVATE FUNDS W FEDERAL
HOME LOAN BANKS.
GOVERNMENT FUNDS IN FEDERAL HOME LOAN
WM
BANKS...XZ&A
The accompanying bars show that the ratio of
Government funds to private funds invested in the
Federal Home Loan Banks was greater than 4 to 1
at the end of the fiscal year 1933. Since that time,
the proportion of Government funds has decreased
steadily until on June 30, 1938, the total of private
funds (deposits, subscriptions paid in by members
on capital stock, and consolidated debentures) was
greater than the total amount of Government
investment in the Federal Home Loan Bank System.
(Neither the deficit on June 30, 1933, nor the surplus and undivided profits on June 30, 1938, were
October 1938
taken into consideration in computing the Government and private investments on those dates.)
This increase of private funds was due to the
augmented purchase of stock in the Banks by member institutions, to mounting deposits by members
in the Banks, and to the sale of consolidated debentures of the Bank System. As a result of the sale
of consolidated debentures in the private money
market, capital had decreased from more than 90
percent of combined assets to slightly over 63 percent on June 30, 1938.
The Federal Home Loan Bank Act provided that
each Federal Home Loan Bank must carry to a
reserve account semiannually 20 percent of its net
earnings until the reserve account showed a credit
balance equal to 100 percent of the paid-in capital.
This reserve account has increased steadily each
year in relation to total resources and amounted
to $3,363,000 or 1.26 percent of total capital and
liabilities on June 30, 1938. Undivided profits had
also increased to a total amount of $3,106,000.
Total capital stock, reserves, and undivided profits
of the 12 Federal Home Loan Banks amounted to
$167,981,000 on June 30, 1938, a gain of more than
$11,000,000 during the fiscal year. The annual
dividend rate on the average capital stock of the
12 Banks for the fiscal year averaged 1.57 percent.
Since the beginning of operations the 12 Banks have
declared dividends amounting to $10,297,000.
LIABILITIES
Chiefly because of the increase in member deposits
and because of the issuance of consolidated debentures, liabilities of the Federal Home Loan Banks
increased from 2.33 percent of combined resources
on June 30, 1933, to 36.8 percent on June 30, 1938.
During the fiscal year ending June 30, 1936,
deposits of member institutions doubled in relation
to total liabilities and capital and have been maintained at these higher levels, now standing at 7.48
percent.
Until the middle of 1937 the capital stock of the
Federal Home Loan Banks was sufficient to meet
the demands of members for advances. In April
1937 the Bank System arranged to offer its first
issue of consolidated debentures to private investors. Up to July 1, 1938, five issues of these debentures have been offered, amounting to a total of
$142,700,000, of which two issues amounting to
$52,700,000 were repaid at maturity.
The debentures were favorably accepted in the
463
GROWTH OF MEMBERSHIP AND RESOURCES OF THE
FEDERAL HOME LOAN BANK SYSTEM
FIGURES AS OF JUNE 30
ESTIMATED ASSETS
NUMBER OF
(Millions ofDollors)
MEMBER INSTITUTIONS
private money market. Each of the offers was
heavily oversubscribed, thus establishing the issues
of the Federal Home Loan Banks in an extremely
favorable position. The following table summarizes the debenture issues of the Federal Home Loan
Banks.
Debenture issues of the Federal Home Loan Banks
Number of
series
Apr.
July
Dec.
Apr.
July
A*
Bi
C
D
E
1
Date of issue
1, 1937
1, 1937
1, 1937
1, 1938
1, 1938
Maturity
Apr.
July
Dec.
Apr.
July
Amount
1, 1938 $24, 700, 000
1, 1938 28, 000, 000
1, 1940 25, 000, 000
1, 1943 23, 500, 000
1, 1939 41, 500, 000
Interest
rate
Percent
2
2
1
Series A and B have been repaid.
On July 1, 1938, the total amount of debentures
o u t s t a n d i n g was $90,000,000. Of this t o t a l ,
$41,500,000 was offered for a term of one year and
$48,500,000 for terms of more than one year.
M E M B E R S H I P OF THE FEDERAL H O M E LOAN BANK
SYSTEM
The progress shown in the operations of the 12
Federal Home Loan Banks in the preceding analysis
of the consolidated statement of condition has resulted from the progress by the membership of the
Federal Home Loan Banks. At the present time,
the 3,956 member institutions hold total assets
amounting to $4,308,000,000. Nearly every community in the country is now actively served by one
or more member thrift and home-financing institution.
( The accompanying bar chart shows the continuous
growth in the membership and resources of the
Federal Home Loan Bank System during the past
six years. The members of the Federal Home Loan
Banks are institutions of the savings and loan type,
mutual savings banks and insurance companies,
engaged in making long-term home-mortgage loans.
The importance of these member institutions in
the field of home-mortgage finance has been demonstrated. It is estimated that since 1933 about
40 percent of the amount of all home-mortgage loans
written annually by private financial institutions
(including savings and loan associations, commercial
banks, exclusive of trust departments, savings banks,
and insurance companies) has been loaned by these
464
1933
1934
1936
1936
1934
1935
1936
1937
OIVtStON Or RESEARCH AND STATISTICS
FEDERAL
LOAN BANK BOARD
U. HOME LOAM
WASHINGTON, P C
member institutions of the Federal Home Loan Bank
System. At present, savings and loan associations
constitute the great majority of the membership.
Since the size of the average loan made by member
savings and loan associations is much smaller than
that of other financial institutions, it will be seen
that the number of homes financed by the members
of the Bank System has greatly exceeded the aggregate number financed by all nonmember financial
institutions during these four years.
In the savings and loan field itself, the member
institutions of the Bank System play an increasingly
important part. During the calendar year 1937, it
is estimated that member savings and loan associations loaned 75 percent of the total amount loaned
by all savings and loan associations in the country.
At the end of the calendar year 1937, member
institutions of the Bank System are estimated to
have held home-mortgage loans in an amount of
$2,230,000,000, or 25 percent of the estimated total
amount of home-mortgage loans held by all private
institutional lenders on that date. During 1937,
however, these member institutions made 1+0 percent
of the total amount of new home-mortgage loans made
by all private institutional lenders—$623,590,000
o u t of t h e e s t i m a t e d t o t a l of $1,559,000,000.
T H E F U T U R E R O L E or THE FEDERAL H O M E LOAN
BANK SYSTEM
An important result of the operations of
Federal Home Loan Bank System during these
years has been the development throughout
country of sound and more uniform policies for
the
six
the
the
(Continued on p. 488)
Federal Home Loan Bank Review
SEASONAL VARIATIONS IN THE
RESIDENTIAL CONSTRUCTION INDEX
The basic seasonal pattern for residential construction is
eight months of building, four months of slack times. Specific
data for representative areas indicate the extent to which
climatic and geographic differences, as well as custom, affect
this problem, one of current interest t? all mortgage lenders.
• J f D U R I N G the past eight years of low activity
seasonal movements in the building of residential structures have been largely eclipsed by erratic
fluctuations.
During the depression years, residential building for the United States as a whole fell as
low as 4 percent of the 1926 level, while in many
communities it virtually ceased. Hence, any recorded construction project of any size introduced
into the series a sharp increase which was followed
by a corresponding slump during the following
month. The fundamental seasonal tendencies were
further obscured by the fact that at this low level
the series was extremely sensitive to waves of
optimism and pessimism so that, to the casual
observer, practically no order existed in the residential construction field.
When the effect of random fluctuations is eliminated from the residential building data for purposes
of comparative analysis, and an average computed
for each month, a high degree of regularity appears
in the resulting "normal" seasonal curve for the
United States as a whole. The graph superimposed
SEASONAL VARIATION IN RESIDENTIAL CONSTRUCTION IN THE UNITED STATES
DEC.
JAN.
FEB.
MAR
APR.
MAY
JUN.
JUL.
AUG.
SEP.
OCT.
NOV
DEC.
upon the map of the United States indicates that
the volume of residential construction generally
reaches the lowest level in January and February.
During March and April, the seasonal curve turns
sharply upward as the spring building season gets
under way—the highest activity being recorded in
April and May. Throughout the summer residential construction tapers off, followed by a minor
Table 7.—Seasonal indexes of residential construction activity in selected areas
[Source: Federal H o m e Loan Bank Board.
Based upon building permits issued as reported to the U. S. D e p a r t m e n t of Labor
[Average m o n t h = 100]
N e w England
N e w Jersey. _
Ohio
Minnesota
Colorado. _
Washington
Florida
North Carolina
Tennessee
Missouri
Louisiana
Texas
California _
October 1938
_
_
_
_ __
_
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
54
50
57
41
52
68
95
77
59
50
79
99
79
29
53
55
37
73
75
94
72
80
72
106
99
83
66
114
104
80
121
130
108
118
102
125
126
113
116
115
114
116
129
141
128
108
139
120
125
121
109
118
131
111
126
137
121
130
104
115
113
130
113
105
117
131
111
125
132
121
105
108
109
102
115
100
100
105
132
120
129
111
118
96
122
105
138
107
100
106
99
127
100
123
136
111
109
108
111
140
120
99
109
106
110
112
120
114
116
117
91
106
110
125
112
96
108
125
118
107
121
95
102
105
110
121
103
92
111
105
Nov. Dec.
103
113
81
103
85
84
85
84
78
78
94
81
87
78
85
58
59
47
56
72
54
37
48
59
74
78
465
SEASONAL VARIATION IN RESIDENTIAL CONSTRUCTION
AND APPROXIMATE TEMPERATURES BY MONTHS
IN SELECTED AREAS
CONSTRUCTION — —
TEMPERATURE—
—
FLORIDA
Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
|40l
1
1
1
T
r
1
1
r^
r1
1
.90°
Dec. Jan. Feb. Mar. Apr. May
Jun. Jul. Aug. Sep. Oct. Nov. D«c.
BASED ON BUILDING P E R M I T S - U . S. DEPT. OF LABOR
466
rally in the fall which precedes the sharp retrenchment during the winter months.
The pattern described above is typical of that
indicated for building construction in the selected
areas which have been studied individually—the
shaded portion of the United States map—although
many variations are shown among the several
States. Areas generally scattered over the country
have been chosen in order that individual analyses
may be made which are representative of varied
climates and building practices.
The charts on the following pages illustrate the
tendency for the seasonal variations in building
activity among the individual States to correlate
fairly well with the temperature changes for selected
cities among the respective States. The Northern
States which show sharp rises in temperature from
the frigid winter months to midsummer, also tend to
indicate drastic seasonal upswings in the volume of
residential construction from winter to spring or
summer. For example, in St. Paul the temperature
rises from an average of 13 degrees in midwinter to
72 degrees in July—an increase of nearly 60 degrees;
while the construction of residences in Minnesota
rises nearly 300 percent from the February low to the
May high level. On the other hand, most of the
Southern States that were observed showed less variation in temperature throughout the year, accompanied by a correspondingly low seasonal range in
construction activity. The same tendency is observed in California where the temperature, as
measured by monthly averages, varies only 12
degrees during the year, while the seasonal index of
residential building indicates a rise of but 50 percent
from the lowest month to the peak level for the year.
In each of the States studied, as well as in the
United States as a whole, the lowest level in the
volume of residential building occurs in the winter
months, while the peaks in construction occur in
the various States at different months, ranging from
March in some Southern States to July and August
in certain Northern areas (Table 1). During the
winter season the building of residences falls to an
extremely low ebb for several months in most of the
States observed, but the recovery is rapid in the
spring, and the bulk of the construction business is
spread out over about eight months in the majority
of the States. This tendency may indicate that cold
weather is considered to be a more common deterrent
Federal Home Loan Bank Review
to favorable construction conditions than hot
weather, except in the most Southern areas where
the summer slump is very pronounced.
The Department of Labor, in a survey made by a
special agent who interviewed leaders of the construction industry in various cities, found that, in the
opinion of these leaders, sharp seasonal fluctuations
in the building of large projects, including apartment
houses, was no longer necessary. According to the
views of architects and builders in the North, even
operations which are most adversely affected by
freezing temperatures could be easily accomplished
without excessive cost. 1
"The architects and contractors no longer need to
be educated as to the practicability of winter construction work. The amount of winter operations
in the construction industry, however, will be determined by the extent toward which the general
public, and particularly the prospective builders,
are educated to the safety, feasibility, and desirability of building in the off season."
However, the Department of Labor found that,
"In the construction of smaller buildings, and particularly of the smaller houses, the season of the
year is still an important factor The opinion of
architects and builders in this field was more or less
divided. Some favored winter operations in all
buildings, while others were opposed to winter work
on houses as uneconomical and more or less hazardous . . ."
Those authorities interviewed by the Department
of Labor in the two Southern cities of Atlanta and
New Orleans agreed that the most important factor
causing seasonal fluctuations in those areas was the
established custom of having but one "moving
date" in each city, which occurs in the autumn.
Thus, as the builder finds it difficult to rent at any
other time of the year, he plans his projects so they
will be ready for occupancy by fall. Hence, for
several months after the standard lease date very
little building is done, and the winter remains the dull
season despite the fact that in general the cooler
months offer more favorable weather and cheaper
labor than is available in the present building season.
An intense advertising and publicity campaign
was carried on in Chicago from 1928 to 1933, under
the sponsorship of the Chicago Keal Estate Board,
with the cooperation of renting agents, moving
i Handbook of Labor Statistics, 1936 Edition, p. 224.
CONSTRUCTION «
TEMPERATURE—
NEW
Dec. Jon. Feb. Mar. Apr. Moy
NEW JERSEY
»40
j
AVG
N*
V
*
60
40 1
* * J~, *""
70
"X
V
N
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80
60
\
V
40
OHIO
160
J- 1
140
y
*Cmm
120
^
^jr^
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/ /
AVG.
\
/•
^
Nfc ^
i
50
\N
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80°
"1
(20
1
—
ENGLAND
Jua Jul. Aug. Sep. Oct. Nov. Pea
_.l
40
MINNESOTA
140
;
120
/
AVG
60
20
<p
>rj
< \
\
/ /• •
r
/
/
80
40
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140
120
80]
_^_ - 3 ^
! ^
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140
y
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J 60
450
•••'
4 40
\ \ 130
wASHf N6TC>N
^j^
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80
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60
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N
\s NLdT
s
/ y
_^gy
M
**^
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1
^
1
Div! of Research & Statistics
Federal Home Loan Bank Board
60Jy^~
Dec Jan. Feb. Mar. Apr. May
Jurt. Jul
Aug. Sep Oct
x*i
Nov. Dec.
BASED ON BUILDING PERMITS-U. S. DEPT. OF LABOR
467
October 1938
96780—88
SEASONAL VARIATION IN RESIDENTIAL CONSTRUCTION
AND APPROXIMATE TEMPERATURES BY MONTHS
IN SELECTED AREAS
2
companies, and various community organizations.
The peak leasing loads around M a y 1 and October
1 were drastically cut and in 1930 it was estimated
that property owners had saved one and one-half
million dollars. If the savings accruing to tenants,
agents, and utility companies were added, the
estimated saving would total about 10 million dollars. The success of the Chicago campaign demonstrates that public psychology, which is such an
important factor in creating winter recessions, can
be altered.
ADVANTAGES OF Y E A R - R O U N D CONSTRUCTION
Programs designed to correct seasonal variations
in residential construction have often been considered by many interested groups. If the peaks
and valleys of building activity were leveled off,
tremendous direct and indirect savings would accrue: to labor, for they would be more sure of continuous employment and a larger gross annual income; to contractors, for their equipment and
organizations would be put to continuous productive use; to owners, for they would get the benefits of earlier rentals and savings of interest and
taxes on idle investments; to buyers, for the building
costs of their homes would be lower without any
seasonal exaggeration; to material manufacturers,
transportation units, and mortgage lenders.
The reasons for seasonal fluctuations in building
activity are probably more emotional and traditional
than practical. The charts showing the seasonal
variation in residential construction in many different areas throughout the entire country illustrate
the fact that the bulk of construction business is
spread out during eight months and that even within
this active 8-month period itself, there are precipitous rises and declines. The data show that custom,
as well as climate, is an influential factor in determining building activity. In some areas, the mean
temperature never falls below 55 or 60 degrees, yet
the seasonal pattern of residential construction is
very similar to that existing in more northerly areas
where the temperature during the winter months is
well below freezing. The seasonal upswings and
declines in building, it is true, are more drastic in
those areas where sharp changes in temperature
are the rule, b u t all regions of the country studied
follow more or less closely the fundamental pattern of
eight months of building, four months of slack times.
In the R E V I E W for January
1937, the
article
"Winter Construction'' pointed out that mortgage
468
lenders have the same common interest as owners
and builders in smoothing out the peaks and valleys
of the building industry. The holder of a mortgage
has a special interest in seeing that the building
which constitutes the physical security for his loan is
not constructed at unduly high prices due to seasonal
fluctuations in building activity. Encouragement
of winter construction by lending institutions will
not only enable their borrowing members to build
at lower labor and material costs but will also
relieve the staff of the lending institution from some
of the pressure which currently arises from the fact
that the lending season is dictated by the building
season. Since increased winter construction is not
held in check by practical causes but rather by public psychology in many areas, lending institutions,
through their position as sources of credit for building, can exert a substantial influence in lengthening
the present 8-month construction period to a full
year and thus in stabilizing building activity itself.
A Refinancing Program in New York
•
T H E Federal Home Loan Bank of New York
recently announced a program to make available
millions of dollars for the purchase of mortgages still
held by the closed mortgage guaranty companies
and similar institutions in liquidation in New York
City. Through the 70 member institutions of the
Federal Home Loan Bank in the metropolitan area,
funds totalling $65,000,000 can be directed immediately to the purchase of these mortgages. These
funds will also be used to make new mortgage loans
to purchasers of foreclosed real estate now held by
the liquidating agencies.
The program is offered in cooperation with the
State Insurance Department, the State Banking
Department, the State Mortgage Commission, and
the trustees appointed by the Courts for the various
mortgage certificate issues. Its benefits are believed
to be threefold: it will enable the holders of mortgage
certificates to get back a substantial percentage of
their investment at an earlier date; it will help to
bring about the return of a normal mortgage market,
which is necessary before a normal real estate market
can be restored; and it will provide a practical means
for home owners to transfer their indebtedness, which
in many cases is written on a straight mortgage
basis, from the liquidating agencies to home-financing institutions providing a monthly payment plan
of amortization.
Federal Home Loan Bank Review
OBTAINING THE COOPERATION
OF YOUR MEMBERS
Associations describe their experience
in developing
new business
through the aid of their investors and borrowers,
•
A F E W months ago the Federal Home Loan
Bank Board, through its Public Relations
Department, sent a questionnaire, "The Hunt for
Facts", to a number of member associations which
had made outstanding progress during 1937. In
response to 20 selected questions they were asked to
tell what means of advertising and other promotional
effort they had found most productive. The purpose
was to obtain ideas and formulae which might be
used for the benefit of all.
Some 290 replies came in, many in detail. They
represent the opinions of executives of both small
and large associations, broadly distributed in communities of all sizes in almost every State. After the
mass of material on hand has been collated, digested
and summarized, it will be placed at the disposal of
member institutions.
One of the most important questions asked was:
"What methods are best to enlist cooperation of your
members?" Many of the managers made definite
response to this question. It is generally agreed in
the industry that, beyond the immediate circle of
directors, officers and employees, the body of members
forms the logical nucleus for growth of the organization. Projecting this to a national scale, we see that
there are nearly six million investors and borrowers
in member associations, a potential army of salesmen
and saleswomen for sound thrift and home-financing
units. The premise is equally true for the large institution and for the small, although in those of lesser
size, there is, of course, more opportunity for the
staff to know the members personally. The cost of
such a form of advertising is relatively small.
As with the other points discussed in the questionnaire, there was a wide divergence of expression on
how best to stimulate membership cooperation. A
surprising number of associations had made little
aggressive effort in this direction. One thought,
however, which ran thread-like through the replies,
October 1938
was that because of the mutual nature of savings
and loan institutions constant cultivation of the
support of investors and borrowers affords an
opportunity for expansion that is found in almost no
other line of business.
BUILDING GOODWILL OF M E M B E R S
Although the replies to this question are not
suitable for statistical analysis, a number of conclusions can be drawn from them. The foundation
stones on which to build an active goodwill of members, it was brought out, are: (1) courtesy, (2) dissemination of informative material to members so
that they will have a thorough understanding of the
work of the association, and (3) direct solicitation of
their aid by the institution. These three factors
appear to be inseparable in any program directed
toward substantial growth of an association through
the medium of its membership.
Several managers took pains to point out that
courtesy is more than a matter of mere politeness,
a casual greeting, and a bored smile. I t comprehends a genuine interest in the member as a friend
and one of the owners of the business, not simply as
"an account" on the books. I t adds the personal
touch, calls the member by name, lets him know
that his call is appreciated. I t bespeaks promptness
and keen attention at the desk and window. I t
implies that the officers of the association are readily
accessible to the members. If a member's patience
is tried by a long wait in line, a brief and cheerful
apology will restore his good humor. As a word,
"service" is perhaps worn threadbare but there is
no substitute.
"Make the customer feel important", wrote one
secretary. Another association printed 11 suggestions for tellers to follow in handling callers. I t
treated clearness and modulation of voice, tactful
469
identifications, pleasant greetings, and the avoidance
of argument or a superior attitude. Included were:
"Our rules for doing business may seem strange to the
average person. Bear this in mind when making explanations that may seem technical", and "Never forget that the customer is the person creating the salaries
for everyone in the association/' Another manager
said, "Courtesy is what retains our old accounts."
ACCUEATE AND D E T A I L E D INFORMATION
TO M E M B E R S
SUPPLIED
Associations reported many channels for conveying a more complete understanding of their work to
members. They act on the theory t h a t if the member is familiar with the workings of his institution he
is in a position to tell his brother-in-law, his grocer,
or the worker at the next lathe all about it. A
North Carolina secretary wrote, "Fully explain what
you have to sell in order that they may intelligently
lay facts before anyone desiring investment."
The first aim of an association is education on the
historic importance of savings and loan in American
life and home finance. Often persons who have
been members for years have no conception of the
nation-wide scope and significance of savings and
loan. Such enlightenment is followed by a description of the attractive features of the modern investment and loan plans. The guiding policies of the
association are explained clearly.
Informative material tells why the association is
sound and safe and what sort of loans it makes. I t
emphasizes the mutual nature of savings and loan,
which distinguishes it from so many other types of
business. I t fosters the saver's pride as part owner
of a thriving financial institution with a voice in its
management. Older associations relate their long
history of usefulness. The necessity and wisdom of
maintaining large reserves is made plain. The
member learns how the dividend rate is determined,
the purpose of appraisals and why one type of
property deserves a lower interest rate and larger
loan than another. If the institution is eligible for
the investment of trust funds, he becomes acquainted
with t h a t selling point. "A well-conducted association has nothing to hold back from its members",
declared a secretary. "Management should tell
them what it is doing and why, and what are the
plans for the future."
The member is impressed with the fact that his
association is a recognized asset to the community,
encouraging sensible thrift, creating new homes, new
business, and expanded employment.
470
MAINTAINING CONTACT W I T H
MEMBERS
Most associations make effective contact with
their members at dividend time, sending them a
financial statement and a review of the institution's
record. Some employ the occasion to urge members
to tell their friends of the advantages of such investment. Quotations from secretaries follow:
"We take our shareholders into our confidence and
let them know about the operation of the association. . . . These letters were productive of very
good results"; "We keep all our present members
informed. . . . Expressing appreciation for their
cooperation, further request t h a t they induce their
friends to become members. This letter is mailed
two or three times a year."
"Well-written letters to present and old customers
and dormant accounts get results"; " . . . a semiannual 'pep' letter discussing general features of our
progress and urging them to inform their friends.
We also try to be of every possible service to our
members in a multitude of ways in order to enlist
their goodwill. . . ."; "Convince them that their
savings and loan association is a mutual and coopertive organization and that each member is a 'spoke
in the wheel' or a 'link in the chain' . . . when
sending out announcements of dividends"; "Always
refer to them as members in correspondence and
conversation—always refer to the association as
their institution".
From a large Federal in New England: "Constant
letters and booklets reminding them t h a t as the
association succeeds so do they. . . ."; from California: "Mail them a complete and easily understood financial statement. . . . " ; "We keep in
close touch with both investing and borrowing members monthly by mailing to them information . . . ."
" . . . frequent statement or reports on our progress,
gotten up in simple, understandable form"; "We do
not hesitate to ask them for help in obtaining new
prospects for loans and investments".
"Giving them booklets to leave with their friends";
"Goodwill established . . . both our investors and
borrowers go out of their way to recommend us. . . .";
"Letters at each dividend date . . . giving details
of operations and telling them what they are getting
appears to be the only one they actually pay real
attention t o " ; "Keep them posted on your growth
in assets and membership, but be sure you convey
the idea that their account is important. . . .";
"They seem glad to comply with reasonable requests
Federal Home Loan Bank Review
for cooperation"; "Promptness in handling all
transactions including withdrawals".
The following brief letter brought many valuable
prospects:
To SHABEHOLDERS:
As a shareholder, you are vitally interested in the success
of your association. This success can only be continued by
your interest in helping secure new shareholders and the
securing of new loans on residential property in
.
Year by year, for the past 25 years the bond of confidence
between the membership of our association and its officers
has grown steadily until today the oneness of purpose is evidenced in making
one of the outstanding building and loan associations in the State.
We want to go further and to serve many more shareholders as savers and borrowers. To this end, won't you who
have enjoyed the benefits of our association take the time to
send us the names and addresses of five or more persons who
should be interested in having a copy of our new leaflet,
"How Much Shall I Save and How Shall I Save It ?" (Copy
enclosed.)
Your assistance in sending a list of names by return mail
will be appreciated. Your name will not be mentioned
without your consent. A self-addressed envelope is enclosed.
No postage necessary. Thanks.
Sincerely yours,
, President.
One association wrote that it is planning to reproduce clippings of several of its exceptionally good
newspaper stories and enclose them with letters to
members in order to illustrate its progress and the
recognition given to it by the press.
To maintain contact with members, many associations utilize house organs either of their own creation or those sold by service organizations. One
association recommended a booklet prepared by the
institution itself and published quarterly.
The enterprising president of a large and growing
institution clipped a Washington news story on the
financial progress of the Federal Savings and Loan
Insurance Corporation and mailed it in facsimile to
his members. His message on the same page said,
"As an investor in this association, whose accounts
are insured, I feel you would be interested in having
this article brought to your attention . . . ."
Meetings are often relied on to arouse member
interest, especially annual meetings of shareholders,
sometimes accompanied by a banquet. One secretary replied, "Annual or semiannual dinner with free
feed and invitations to the whole membership. A
first-class speaker, then an appeal for new savings.
Having a group of three or four hundred people
together gives a splendid chance to sell the association and its aims." SInsist that they attend the
shareholders' meetings", said another. "Tell them
October 1938
about the association and treat them with every
consideration"; "Through special group meetings",
was the reply of a third.
The importance of enlisting the cooperation of
women, who constitute a large proportion of the
typical membership, was emphasized by one association.
The executive of an Eastern association which
made a remarkable record of progress gets his best
results through his borrowers. "As a source of new
business, there is nothing like a satisfied borrower,"
he said. "He will bring you new investors and applicants for loans without much urging. His interest
and willingness arise from the appreciation of the
simplicity and economy of his direct-reduction loan.
When the mortgagor has a book showing the exact
amount of his indebtedness and the application of
his payments to interest and principal, with no
mystery as to credits or debits, he is well pleased
and will be glad to talk to his friends."
Geographical Distribution of Member
Institutions
•
A R E C E N T study made by the Federal Home
Loan Bank Board revealed that the member
home-financing institutions of the Federal Home
Loan Bank System are located in 1,963 cities and
towns in the United States. These 1,963 communities have a population of 58,590,902, which
comprises 85 percent of the estimated total populations of 69,000,000 in all urban areas of the United
States. Since most of these thrift and home-financing institutions can make loans within a wide radius
of their offices, it is believed that almost the entire
nonfarm area of the country is now being served by
member institutions.
The 3,960 member institutions of the Federal
Home Loan Bank System are located in all of the 48
States and Hawaii, Alaska and the District of Columbia. They include 3,913 savings, building and
loan associations, cooperative banks, homestead
associations, 38 insurance companies and nine mutual
savings banks. The total assets of these institutions are more than $4,308,000,000.
The Winston-Salem Bank District has the largest
number of cities—246—in which are located member
institutions. The Cincinnati Bank District has the
second largest number, 223; and the New York Bank
District is third with 217.
471
LOWER DIVIDEND
RATES AND INCREASED
PRIVATE INVESTMENTS
The experience of 11 insured savings and loan associations, located in a
large urban area in the midwest, in attracting a substantial and increasing volume of private investment at dividend rates not in excess of 3 per
centum per annum is of particular current significance.
•
T H E R E have been many indications in recent
months that the careful investor will not refuse
to save, even though the prospective return on his
investment is lower than has been customary in
former years, provided that he is satisfied as to the
safety of his funds. Certainly this theory is borne
out by a current study made by the Federal Home
Loan Bank Board of 11 insured savings and loan associations in a large urban area in the midwest,
where these insured associations hold more than
two-thirds of the assets of all active savings and
loan associations.
During the first six months of 1938, nine of the 11
insured savings and loan associations in this area
showed a greater net increase in private investment
than during the entire 12 months of 1937. More
than that, all 11 associations recorded a greater dollar amount and a greater percentage of gain in private
investments during this 6-mouth period than during
the preceding six months.
The significance of these gains, from the viewpoint
of the present discussion, lies in the fact that during
the entire period in which the increases were registered, the semiannual rate of dividend on shares
remained static at 1% percent.
The trend in dividend rates paid by savings and
loan associations has been downward in recent years.
This has followed as a direct result of the downward
movement in the general structure of all interest
rates. As interest rates on home-mortgage loans
have steadily decreased, savings and loan associations
have reduced the rate of dividends paid upon invested capital in order to maintain a spread between
operating income and dividend payments sufficient
to meet operating costs and to build up adequate
reserves.
472
Although such studies as have been made have
indicated that there is no direct relation between a
high dividend rate and a steady flow of funds into a
savings and loan association, member institutions in
general are interested in obtaining more data on the
results of lower dividend policies over a period of
years. The experience of the 11 insured associations,
as shown by a study made by the Office of the
Governor of the Federal Home Loan Bank System,
is a distinct contribution to the meagre data in this
field.
ANALYSIS OF THE T R E N D S IN P R I V A T E INVESTMENT
The following table shows that five of these associations recorded a net increase in private investment of more than $100,000 during the first six
months of 1938.
Net increases in dollar amount of private investment during
first six months of 19S8
Number of
associations
$20,000-$49,999
$50,000~$99,999
$100,000-$199,999
$200,000-$299,999
Over $300,000
4
2
2
1
2
Likewise, five associations showed a percentage
gain of more than 30 percent during this same period.
Percent increases in private investment during first six months
of 1938
Number of
associations
Under 10 percent
10 percent to 20 percent
20 percent to 30 percent
30 percent to 40 percent
Over 40 percent
1
2
3
2
3
Federal Home Loan Bank Review
DIVIDEND POLICIES
Table 1 shows that this trend of increased private
investment is not a phenomenon of any single
6-month period. Four of these associations have
been insured for more than three years; five have
been operating as insured associations for more than
two years; and only two have an operating experience as insured associations of less than two years.
Moreover, from the date of issuance of the certificate
of insurance until the present time, the basic dividend
policy of all 11 associations has been to declare a
semiannual dividend at a rate not in excess of 1%
per centum per annum.
Four associations increased the amount of private
capital invested in each semiannual period from the
date of insurance. Three associations recorded a
single 6-month period in which private investment
decreased slightly before net increases in private
capital were shown. One association showed no
gain in private capital invested for two 6-month
periods; two associations experienced a decrease for
three successive semiannual periods; and one association recorded a net gain in private investment
only after five successive declines. The record as a
whole is impressive: 7 out of 11 associations were
able to attract a substantial and increasing volume
of investment with a maximum of a single 6-month
period after insurance of share accounts in which no
gain was recorded.
The gains have accelerated. At the end of the
first six months of 1935 there were two insured associations which were able to make comparisons with
the preceding 6-month period, and of these, one
showed a net increase and one a decrease in private
capital. During the last six months of 1937, 10 out
of 11 reported a net gain in private capital invested,
and during the first six months of 1938, all 11 of the
associations were attracting an increasing volume
of private funds.
How
W E R E T H E S E R E S U L T S OBTAINED?
In spite of the fact that the dividend rate of these
associations has been maintained at the level of
3 per centum per annum, a rate lower than that
paid by several competing institutions, the public
has left invested funds with these associations, and
has brought additional investments to them. I t is
impossible to analyze all the individual factors
which have contributed toward the maintenance of
this steady flow of private funds into these institutions. However, three different cooperative advertising campaigns have been conducted to acquaint
the public with insurance of share accounts, with the
inherent soundness of the home-mortgage loans in
which the associations invest the private capital
entrusted to them, and with the various other safeguards which a savings and loan association can
offer to the investor.
The experience of these insured associations confirms the results of other studies in many different
parts of the country. Associations can successfully
attract a sufficient volume of private capital at
lower dividend rates than generally prevail today.
In order to succeed, however, they must inform the
investing public of the many attractive features of
their investment and savings plans.
Table 1.—Trends in private capital invested in 11 insured savings and loan associations in a large
mid western urban area
[Source: Office of the Governor, Federal Home Loan Bank System]
Association
Percent increase ( + ) or decrease^—) in private investment
Number of
during 6-month period ending:
Basic semi- months from
annual divi- date of insurdend rate ance to June June 30, Dec. 31, June 30, Dec. 31; June 30, Dec. 31, June 30,
30,1938
1935
1935
1936
1936
1937
1937
1938
Percent
A
B
C
D
E
F
G
H
I
J
K
IK
VA
1/2
IK
.
1/2
1/2
1/
_
1/2
1/2
1/2
Semiannual dividend rate: V/\ percent.
October 1938
47
+ 2.8
47 + 166. 7 +1 114. 2
45
-8.9
-7. 1
41
-7.9
35
35
33
30
28
21
17
__ _
+4.4
-16.0
+ 38.5 + 165.0
-8.4
-4.5
+ 11.6 + 15.0
+ 41.5 + 62. 1
*-3. 4
+ 1.2
-12.6
-2.0
-21.9
-2.0
+ 3.4
+ 15.7
+ 42.8
-1.2
+ 23.6
+ 39.9
+ 10.5
-0.1
-1. 1
+ 11.0
-11.8
+ 14.4
+26.6
+ 2.2
+ 27.0
+ 26.8
+ 8.1
+ 3.3
+ 4.6
+7.4
-1.9
+2.7
+ 50. 0
+ 38. 9
+ 9. 3
+ 45. 9
+ 38. 2
+ 26. 5
+ 16. 5
+ 44. 7
+ 22. 3
+ 14. 1
+ 24.7
(
473
SUMMARY OF MOST SIGNIFICANT POINTS IN RESIDENTIAL
CONSTRUCTION AND HOME-FINANCING ACTIVITY
I. Business in general rallied strongly during August for the first time in 1938.
A. First marked rises of the year occur in manufacturing employment, pay rolls, industrial production, machine tool orders.
B. Trend of national income payments upward, foreshadowing increased consumer purchasing.
C Volume of business activity still substantially below August 1937 level despite increases.
II. Residential construction index for August at highest monthly level since 1929 (February 1937 alone excepted),
A. Current recovery in residential building continues general: rate of building increased during August as compared with July
in eight Federal Home Loan Bank Districts.
B. All Southern areas recorded 1938 high levels of building activity in August.
HI. Building Costs: upward trend indicated by August reports from the Southwest, Ohio, Kentucky and Tennessee not evidenced by September
reports from other sections of the country. Decreases in costs general throughout the Southeast and in Illinois and Wisconsin.
A. In relation to January 1936 levels, material costs are now 5 percent higher, and labor costs 15 percent higher.
B. Wholesale prices of building materials steady, except lumber prices, which showed a marked increase for first time since
early 1937.
IV. Mortgage lending activity of savings and loan associations in August showed definite improvement for the first time this year*
of loans advanced, contrary to usual seasonal trend.
Volume
V. Real estate market:
A. Rentals: unchanged from July.
B. Foreclosures: rose slightly and contra-seasonally.
RESIDENTIAL
ACTIVITY '
BUILDING
600
1
J
500
400
AND SELECTED
1926*100
FACTORS
600
500
400
1
1
fV^|
/
300
INFLUENCING
L
300
*FORL "CLOSLWES'
200
200
100
90
80
70
60
50
/ " WUSIN >G
1
•
•-•••^ifniimvii^ * „
•r**"-«•-«...
"•*
'^..^.**..~
•^i
p=-..
^^_
• \
i
BUILDING
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Division of Research & Statistics
Federal Home Loan Bank Board
1 M 1 1i n n
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1929
11 111 1 1 ! I I )
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1930
1 1 1 1M
J
1931
M)
I 1 1 1 1!
J
1932
1J IJ. L 1.1 1 1 1 1 1 1.1 .1LI. 1 1M i l l
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1933
1935
1934
1 I.I. 1.111.1.1.
Source-.- I. Federal Home Loan Bank Board (County Reports)
2. U. S. Dept. of Labor (Converted to 1926 Base)
3. Federal Home Loan Bank Board (U. S. Dept. of. Labor Records)
474
! I I I I 1 1 1 1 1 1 I I 1 M 1 I I I I 1 1 1 1 1 It 1 I I 1 1 1
J
J
1937
1938
1936
* Includes correction for New York City because
of irregular conditions arising from inception
of new building code.
Federal Home Loan Bank Review
RESIDENTIAL CONSTRUCTION and HOME-FINANCING ACTIVITY
•
GENERAL business rallied strongly in August
from the depressed level of the early summer
months. While the seasonally corrected index of
the volume of residential construction has risen
fairly steadily since the latter part of 1937, indexes
of manufacturing employment, pay rolls and production indicated their first significant rises during
the year in August. Machine tool orders, usually a
sensitive index of increasing business activity, increased sharply in August from July. The index of
machine tool orders in August was the highest since
last December and stood more than one-third above
the monthly average for the first half of 1938.
The residential construction index stood in August
at a level higher than any month since 1929 with
the single exception of February 1937. This index
has been corrected for normal seasonal variations
and was adjusted earlier in the year to compensate
for the sharp fluctuations occasioned by the introduction of a new building code in New York City.
ESTIMATED
IN
It is notable that the volume of business activity
remains substantially below the level of a year ago,
yet residential construction activity now stands well
above the level of August 1937. During July the
seasonally corrected index of national income payments advanced 1 percent and interrupted a downward movement which had extended over a period
of 10 months. The Survey of Current Business
regards this index as a reliable guide to the trend of
consumer income because of its inclusive character.
Therefore, the upward movement in the index of
national income payments is significant because
it foreshadows a probable increase in consumer
purchasing.
Rentals on homes remained at the same level in
August as was indicated for the preceding month,
according to the National Industrial Conference
Board index, while only fractional increases occurred
in the composite index of building material prices.
Lumber costs accounted for practically all of the
NUMBER AND COST OF FAMILY D W E L L I N G U N I T S
A L L C I T I E S OF 1 0 , 0 0 0 OR MORE P O P U L A T I O N
PROVIDED
(Source: Federal Home Loan Bank Board. Compiled from residential building permits reported to U. S. Dept. of Lobor)
NUMBER OF UNITS
30
PROVIDED
COST OF UNITS PROVIDED
30
1
28
28
26J
26
24
24
1938
22
22
20
18
16
14
120
120
110
110
100
100
90
90
1937
x\
20
\1
-U'y
18
1937
80
60
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14
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475
increase in the composite index for August—this
being the first month in which the price of lumber
has risen significantly since early in 1937. During
August there was a more than seasonal increase in
the movement of forest products reflecting in part
the relatively favorable volume of residential building. Plumbing and heating supplies and brick and
tile recorded fractional declines.
Trends in the cost of material and labor used in the
construction of the standard 6-room frame house have
diverged widely during the past year, as indicated
by the accompanying chart. Material prices, which
rose sharply from the close of 1936 to the summer
months of 1937, have tapered off since then, and by
August of this year practically all of the advance in
material prices made from the beginning of 1937 to
the peak had been cancelled. Labor wages, which
increased rapidly from the early months of 1936
until July of last year, have leveled off somewhat,
showing only fractional rises since that time. The
cost of labor now stands about 15 percent above
January 1936, while material prices are only 5 percent higher than at that time. The peak of material
costs was reached in August 1937, when the index
stood at 112.1; in August of this year, the index
had fallen to 104.9. The index of labor costs during
this same period rose from 114.2 to 115.1
[1926=100
August
1938
Residential construction l
Foreclosures (metro, cities)
Rental index (N. I. C. B.)
Building material prices
Manufacturing employment 2
Manufacturing pay rolls 2 2
Average wage per employee
38.5
159.0
85.5
89.4
84.8
74.2
87.5
July
19o8
34.2
153.0
85.5
89.2
80.8
68.1
84.3
Percent August Percent
change 1937 change
+12.6
+3.9
0.0
+0.2
+5.0
+9.0
+3.8
23.0
176.0
86.7
96.3
107.7
104.3
96.8
+67.4
—9 7
-1.4
—7 2
-21.3
—28 9
-9.6
1
Corrected for normal seasonal variations.
2 Revised series.
Foreclosures, which have been diminishing in number over the past three years, indicated a rise in
August, although the normal seasonal movement
from July to August is slightly downward.
Lending activity of savings and loan associations
rose from July to August, although there is normally
a seasonal decline in this period. This is the first
month of this year in which definite signs of improvement were evident, as the increases earlier in the
year were apparently seasonal in nature. The
improvement during August was shared by all loanpurpose classifications, and in total loans for each
type of institution; associations in each of the 12
Federal Home Loan Bank Districts participated in
the accelerated lending activity evidenced last month.
Residential Construction
•
TREND OF MATERIAL AND LABOR COSTS
FOR CONSTRUCTING A STANDARD FRAME HOUSE
UNITED STATES
[[Source: Federal Home Loon Bank Board. Based on building costs published monthly in F.H.L.B. Review!,
130i
130
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In comparing the building material price index of
the United States Department of Labor with that of
the Federal Home Loan Bank Board standard house
it must be pointed out that the former index is of a
more general character, and considerable weight is
given in its computation to cement, brick, tile, and
structural steel prices. The standard house is of
frame construction, therefore no structural steel and
relatively little concrete, brick, and tile go into its
construction. Hence, it is interesting to note that
the two indexes, despite the differences in method of
computation, agree as to the significant trends in the
building material field.
476
D U R I N G August, over 21,100 family dwelling
units were provided by building permits issued
in communities having 10,000 or more population.
This represents a rise of 8,500 units or 68 percent, as
compared with a year ago.
The volume of such residential building activity
in August increased nearly $29,000,000 or 58 percent
from the same month of last year.
Through August of this year, 140,100 dwelling
units have been provided. Of this total, 89,200
units or 64 percent were of the 1 and 2 family type.
In the first eight months of 1937 nearly as many
units were built in structures housing 1 or 2 families
(85,900) as in the same period of this year. However, these units amounted to 72 percent of the total
because of the relatively small number of multifamily structures built last year. The increase in
number of multifamily units in 1938 was attributable to the unusual conditions in New York City
where a new building code has been instituted,
causing a rush of applications for permits in the
early months of this year.
Residential construction indicated increases in
August as compared with July in eight of the Federal
Home Loan Bank Districts, while the New England
Federal Home Loan Bank Review
area showed practically no change (see chart on page
483). The New York and Portland Districts registered sharp declines in August from the unusually
high levels recorded in July. On the other hand,
new high levels for activity during 1938 were recorded
in half of the Federal Home Loan Bank Districts
including all of the Southern areas.
The highest rate of activity for the month of
August (76 units per 100,000 population) occurred
in the Los Angeles District while the Chicago
District was lowest with less than 10 units.
From Table 2 on page 480 it may be seen that
nearly all of the States reported more units built in
August than during the corresponding month of last
year; rises in the total cost of these units from August
1937 were also widespread, except in the Boston
District where all States except Connecticut and
Rhode Island indicated declines.
The Department of Labor reports that during the
first half of 1938, the number of dwelling units provided in 65 out of the 94 cities having a population
of 100,000 or over was higher than the number provided during the corresponding period of any year
since 1929.
The number of family dwelling units provided in
communities of 10,000 population or over during the
first eight months of 1938 increased over the same
period of last year in only four Districts; the New
York District was first with a rise of 78 percent due
to the unusual conditions prevailing in New York
City. Thus, although total units during the January-August period in the United States indicated
an increase of 17 percent from a year ago, when
New York City is deducted a decline of 1 percent is
shown for the rest of the country.
ERRATUM
A correction received as the R E V I E W goes to press
indicates that the estimated cost of multifamily units
for the Borough of Queens, New York City, was
erroneously reported in July at $51,089,800, instead
of $15,089,800 which is the correct amount; hence,
the cost of 3-or-more-family dwellings in the United
States, as indicated on Table 1, amounted to
$32,621,500 in July, and the cumulative J a n u a r y August total was $164,754,300. The July estimate
for the cost of all residential dwelling units in New
York State, as corrected, is $33,083,000 (Table 2,
September R E V I E W ) , while the cost of all units in
the United States in July, indicated in the chart on
page 475 of the current issue, is $82,248,400 on the
corrected basis.
October 1938
Indexes of Small-House Building Costs
[Table S]
•
P R I C E S of materials used in the construction
of the standard 6-room frame house continued
downward in most of the cities reporting for September, while labor rates for the group increased
slightly. A net decline in total cost of the house
from June occurred in all but seven of the 27 reporting communities. This trend is not similar to that
shown for the group reporting last month, when 10
out of 23 cities evidenced rises. The reports of these
two series cannot be directly compared as entirely
different sections of the country were surveyed.
Reports for July indicated that increases in costs
were general throughout the Southwest, and in
Ohio, Kentucky, and Tennessee, but that costs were
continuing to decrease in the Pittsburgh and Los
Angeles Bank Districts. Reports for August showed
that decreases in costs were general throughout the
Southeast and in Illinois and Wisconsin, while costs
in New England and in the Topeka Bank District
moved less uniformly.
Foreclosures
•
FORECLOSURES in metropolitan areas increased in August to 159 percent of the average
month of 1926 as compared with 153 percent in
July (revised). This represents an increase of 3.9
percent which compares unfavorably with the normal
seasonal decrease of 0.1 percent.
As compared with the same month of last year,
foreclosures in metropolitan communities declined
9.7 percent in August. During the January-August
period of this year the foreclosure index was 22.8
percent less than for the first eight months of 1937.
Increased foreclosure activity was shown in 41 of
the 82 reporting communities, while 37 indicated
decreases, and four no change.
Mortgage-lending Activity of Savings
and Loan Associations
[Tables 4 and 5]
•
ON the basis of a special survey recently conducted by the Division of Research and Statistics, the lending activity estimates of the Federal
Home Loan Bank Board have been revised. The
survey on which these new estimates are based is
477
believed to have a more comprehensive coverage
than any study previously made on the volume of
mortgage financing by savings and loan associations. 1
New mortgage loans were estimated at $74,700,000
for the month of August by savings, building and
loan associations. Of this total, loans for the purchase of homes amounted to $23,800,000, and home
construction loans totaled $22,600,000. Hence, 62
percent of all loans written by all institutions were
for these purposes.
Contrary to the usual changes from July to August,
loans of savings and loan institutions increased during this period in 1938 by 10 percent. Each of the
five "purpose" classifications shared in this rise—
construction loans advancing $3,500,000 or 18 percent from July.
Each of the three institutional types—Federals,
State members, and nonmembers—indicated increases over July in total volume of lending activity.
However, the rise in the amount of commitments
made by State members was not as great as with the
other classes. Although new highs for the year
were reached in August by loans of Federals and nonmembers, the State member class had not yet
regained the losses incurred in July. As compared
with a year ago, loans by institutions of this latter
class registered a decline, in contrast to slight gains
in the remaining types.
Lending activity increased from July to August
for savings and loan associations in each of the 12
Federal Home Loan Bank Districts; however, in
half of these areas declines from the same month of
last year were recorded.
Federal Savings and Loan System
[Table 7]
D U R I N G the month of August, seven newly
converted and one newly chartered Federal associations were approved by the Board for membership
in the Federal Home Loan Bank System; however, as
a merger took place between two Federals the net
growth of the Federal Savings and Loan System
was seven institutions. There were 11 approved
Federals which had not as yet been insured on
August 31. Total assets of all approved Federals
increased $10,500,000 from July to $1,233,200,000 as
of the end of August.
New private investments in shares of Federals
amounted to $7,700,000 more than repurchases during August, according to reports received from 1,289
reporting associations. This rise in the volume of
private repurchasable capital was supplemented by a
net increase of over $100,000 in the amount of investment by the Home Owners' Loan Corporation. The
combined investment of United States Treasury and
the Home Owners' Loan Corporation in these institutions stood at $211,000,000 as of the end of
August.
Progress in number and assets of Federal savings
and loan associations
Number
July
31,
1938
New
Converted
639
707
Aug.
31,
1938
Approximate assets
July 31, 1938 Aug. 31, 1938
640 $306, 594, 000 $315, 079, 000
713 916, 109, 000 918, 107, 000
Total. - . 1,346 1,353 1, 222, 703, 000 1, 233, 186, 000
Federal Home Loan Bank advances outstanding to
the 1,289 reporting institutions under Federal charter
amounted to $93,000,000, a decline of nearly
$2,000,000 in August, while money borrowed from
other sources rose $400,000.
Mortgage lending activity for the construction of
homes increased 20 percent from July in the reporting sample. Each of the other classes of loans
indicated significant rises, although there is a normal
seasonal decline for each loan classification. A total
of $26,100,000 was loaned during the month of
August, resulting in a net increase of $12,900,000 in
the volume of loans outstanding, after taking into
consideration repayments on loans.
•
i Further information regarding the revised method for computing these estimates, as well as the revisions by type of association and according to loan purposes, may be obtained from the Editor of the REVIEW.
478
Federal Home Loan Bank System
[Tables 10 and 11]
•
ADVANCES by the Federal Home Loan Banks
during August were at a lower level than daring
July and were less than one-half of the amount of
new advances made during August 1937. Repayments during August showed a marked decrease over
the exceptionally heavy July total, but for the second
consecutive month total repayments exceeded the
total amount of new advances. Consequently, the
balance of advances outstanding declined to $189,418,000 on August 31, 1938. This total is, however,
Federal Home Loan Bank Review
approximately $14,000,000 greater than the balance
of advances outstanding on August 31, 1937.
The cumulative total of new advances for the
first eight months of 1938 is still much less than the
amount advanced during the same period in 1937, as
Table 11 shows, and is slightly less than the cumulative total of advances for the same period in 1936.
The cumulative total of repayments, in contrast, is
greater than in 1937, and nearly twice as great as in
1936.
Five of the Federal Home Loan Banks made a
greater amount of advances during August than
during July. Repayments were greater in August
than in July in only four Bank Districts. The
balance of advances outstanding showed small increases in the Pittsburgh, Chicago, Des Moines, and
Topeka Districts. The Topeka Bank showed the
greatest monetary and percentage increases in outstanding advances and the Cincinnati Bank showed
the greatest monetary and percentage decreases.
Long-term advances on August 31,1938 represented
79.1 percent of the total advances outstanding.
This is a significant increase over the relationship
between long and short-term advances at the end of
August 1937, when long-term advances constituted
only 71.4 percent of the total outstanding. On
August 31, 1938, the Federal Home Loan Banks had
advances outstanding to two out of every three
members. The number of borrowing members constituted 66.5 percent of the 3,960 institutions which
represented the total membership of the Federal
Home Loan Bank System on that date.
August, 13 associations with assets of $3,800,000
were insured.
Applications for insurance were received during
August from 35 savings and loan associations having
total assets of about $24,200,000. All but two
insurance applications came from State-chartered
associations.
Comparable reports for July and August received
from 1,888 identical insured associations indicated
that new mortgage loans made were $4,000,000
greater in August than in the previous month.
The greater part of this gain is attributable to
construction loans. During August an increase of
$8,000,000 occurred in private repurchasable capital,
with each of the Bank Districts except Indianapolis
and Topeka contributing towards this growth.
Total assets of the Insurance Corporation at the
end of August amounted to $114,925,218, an increase
of $387,000 over the preceding month and a gain of
almost $5,200,000 from August 1937. Total income
from insurance premiums and admission fees ($181,
200) was $40,000 greater than in August 1937 and
expenditures showed an increase of almost $10,500.
Net income for the first two months of the current fiscal
year amounted to $894,000, an increase of $105,000
over the first two months of the 1938 fiscal year.
Total investments owned by the Corporation,
including premiums less discounts on investments,
had a book value on August 31 of slightly more than
$113,000,000. At that time the market value of
these securities exceeded the book value by almost
$6,500,000.
INTEREST RATES
A change in the rate of interest on advances to
members has been announced by the Federal Home
Loan Bank of Portland. On and after October 1,
1938, all advances shall be written and collected at
sy2 per centum per annum.
Federal Savings and Loan Insurance
Corporation
[Tables 7 and 8]
•
T H E 2,041 savings and loan associations insured
on August 31, 1938, had total assets of $2,007,000,000. I n these institutions the savings of 1,989,200
investors were protected. Total share and creditor
liabilities amounted to $1,816,000,000, while the
potential risk of the Insurance Corporation in these
institutions approximated $1,423,000,000. During
October 1938
Resolution of The Board
AMENDMENT TO RULES AND REGULATIONS FOR THE
FEDERAL HOME LOAN BANK SYSTEM, REGARDING
MEMBERSHIP APPLICATIONS:
Approved September
13, 1938.
Paragraph d of Section 3.002 * of the Rules and
Regulations for the Federal Home Loan Bank System was amended by the Federal Home Loan Bank
Board by adding the following sentence at the end:
The effective date of the membership of an applicant, if
the application is approved, shall be the date set forth in the
resolution of the Board approving the membership, or, in the
event the resolution contains no effective date, the membership shall become effective upon the date the resolution
approving the membership is adopted by the board.
i Since copies of recodified Rules and Regulations for Federal agencies may
not as yet be available to all readers, the old number is listed for the convenience
of the readers:
Section 3.002: Section 25.
479
Table 7.—Number and estimated cost of new family dwelling units provided in all cities of 10,000
population or over, in the United States
[Sources: Federal Home Loan Bank Board.
l
Compiled from residential building permits reported to U. S. Department of Labor
[Amounts are shown in thousands of dollars]
N u m b e r of family units provided
January-August
totals
Monthly totals
August
1938
July
1938
T o t a l cost of units
August
1937
1938
1937
August
1938
13, 150 11, 707 9,426 81, 368 78, 566 $52,
678 7, 196 6,556 2,
742
1,044
627
95
741
80
116
6,816 9,131 2,402 50, 942 34, 028 22,
1-family dwellings
2-family dwellings
Joint home a n d business 2
3-and-more family dwellings
January-Augus t
totals
M o n t h l y totals
July
1938
665. 2 $47,
850. 1 2,
338.8
300. 3 68,
August
1937
162. 3 $38,
141. 8 1,
322.8
621. 5 8,
1938
717. 0 $321,
18,
866. 6
2,
408. 1
373. 0 200,
1937
208. 9 $343,
776. 2 18,
190. 4
2,
754. 3 115,
931. 8
035. 2
738. 9
712. 7
21, 126 21, 660 12, 601 140, 133 119, 891 78, 154. 4 118, 248. 4 49, 364. 7 542, 929. 8 480, 418. 6
T o t a l residential
1
Estimate is based on reports from communities having approximately 95 percent of the population of all cities with population of 10,000 or over.
2
Includes 1- and 2-family dwellings with business property attached.
Table 2.—Number and estimated cost of new family dwelling units provided in all cities of 10,000
population or over in August 1 9 3 8 , 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]
[Amounts are shown in thousands of dollars]
All 1- a n d 2-family dwellings
All residential dwellings
N u m b e r of family dwelling units
Federal H o m e Loan Bank Districts a n d
States
U N I T E D S T A T E S __
N o . 1—Boston_ _
_
Connecticut-_
M a i n e . _.__
Massachusetts _ _
New H a m p s h i r e _ _
R h o d e Island
V e r m o n t __
No. 2—New Y o r k .
_ _
i_
New Jersey
New York
No. 3 — P i t t s b u r g h
Delaware
Pennsylvania.West Virginia.
480
_ ___
_
_ _
i
!
!
E s t i m a t e d cost
August
1938
August
1937
August
1938
August
1937
21, 126
12, 601 $78, 154. 4 $49, 364. 7
N u m b e r of family dwelling units
E s t i m a t e d cost
August
1938
August
1937
August
1938
August
1937
14,310
10, 199 $55, 854. 1
$40, 991. 7
785
684
3, 255. 9
3, 298. 2
762
666
3, 187. 9
3, 257. 3
179
57
392
42
110
5
177
43
325
31
95
13
861.9
142.7
1, 695. 4
73.6
459.5
22.8
836.3
147. 1
1, 741. 4
87.4
430.2
55.8
179
57
369
42
110
5
174
40
313
31
95
13
861.9
142.7
1, 627. 4
73.6
459.5
22.8
827.8
137.1
1, 719. 0
87.4
430.2
55.8
7,057
1,954
26, 260. 1
9, 701. 2
1,682
1,113
7, 260. 1
5, 243. 8
254
6, 803
206
1, 748
1, 375. 4
24, 884. 7
1, 269. 2
8, 432. 0
254
1,428
202
911
1, 375. 4
5, 884. 7
1, 236. 2
4, 007. 6
789
691
3, 715. 7
3, 616. 6
738
585
3, 543. 4
3, 213. 0
5
665
119
1
541
149
26.0
3,245.1
444.6
13.0
3,039.2
564.4
5
614
119
1
498
86
26.0
3, 072. 8
444.6
13.0
2, 884. 1
315.9
Federal Home Loan Bank Review
Table 2.—Number and estimated cost of new family dwelling units provided in all cities of 10,000
population or over in August 1938, by Federal Home Loan Bank Districts and by States—Cont'd.
All 1- a n d 2-family dwellings
All residential dwellings
Federal H o m e Loan B a n k Districts a n d
States
No. 4—Winston-Salem
_ _ _
Alabama
_ . __
District of Columbia
Florida
Georgia-_
Maryland _
N o r t h Carolina
South Carolina
Virginia
No. 5—Cincinnati
Kentucky
Ohio—.
Tennessee--
_-_
N o . 6—Indianapolis
Indiana._
Michigan
- _-
No. 7—Chicago
Illinois.
Wisconsin. _
_ _
No. 8—Des Moines
Iowa
Minnesota
Missouri
North Dakota
South D a k o t a
No. 9—Little Rock
Arkansas
Louisiana
Mississippi
New Mexico
Texas
No. 10—Topeka
Colorado
Kansas
Nebraska
Oklahoma- _
_ _
_ _
__
_.
_
__
No. 11—Portland
Idaho
_
Montana.
Oregon _
U t a h . . . ___ _
Washington
Wyoming
No. 12—Los Angeles
Arizona.
California
Nevada
October 1938
._
_
__
_
N u m b e r of family dwelling units
August
1938
August
1937
2,260
N u m b e r of family dwelling units
E s t i m a t e d cost
August
1938
August
1937
1,998
6, 899. 7
130
493
497
189
345
339
90
177
113
739
382
160
144
301
68
91
915
137
630
148
E s t i m a t e d cost
August
1938
August
1937
August
1938
August
1937
5, 841. 1
1,682
1,126
5, 793. 8
3, 901. 2
294.3
2, 054. 7
1, 646. 1
452.0
694.5
777.4
251.2
729.5
232.0
2, 002. 1
1, 145. 8
344. 7
546.2
1, 009. 7
176.8
383.8
125
215
463
181
151
304
87
156
101
112
313
160
125
166
64
85
281.8
1, 257. 7
1, 555. 7
443. 2
585.5
736. 1
247.2
686.6
221. 6
784. 1
1, 015. 2
344. 7
526. 2
470. 3
170. 3
368.8
911
144
624
143
4, 041. 8
440.3
3, 101. 8
499.7
3, 872.
469.
3, 001.
402.
6
1
4
1
849
133
568
148
821
129
549
143
3, 824. 3
432.8
2, 891. 8
499.7
3. 602.
437.
2, 773.
391.
1,450
292
1, 158
994
314
680
6, 754. 6
1, 149. 8
5, 604. 8
4, 169. 9
1, 077. 3
3, 092. 6
1,430
283
1,147
983
308
675
6, 687. 5
1, 120. 2
5, 567. 3
4, 136. 3
1, 064. 8
3, 071. 5
665
387
278
583
340
243
3, 177. 8
1, 978. 4
1, 199. 4
2, 923. 2
1, 804. 4
1, 118. 8
641
376
265
583
340
243
3, 105. 3
1, 951. 9
1, 153. 4
2, 923. 2
1, 804. 4
1, 118. 8
911
233
308
286
24
60
600
138
216
192
17
37
3, 284.
884.
1, 209.
1, 022.
73.
95.
6
8
4
2
1
1
2, 213. 5
486.2
878. 0
722. 9
54.0
72.4
873
227
308
254
24
60
590
138
216
185
14
37
3, 198. 0
870.7
1, 209. 4
949. 7
73. 1
95. 1
2, 197.
486.
878.
711.
48.
72.
0
2
0
9
5
4
1,812
48
245
149
45
1,325
1,153
55
111
99
37
851
4, 953. 1
116. 9
799. 3
237.2
171. 4
3, 628. 3
2, 893. 8
145.6
335.3
190. 5
101.0
2, 121. 4
1,724
48
237
100
45
1,294
1,087
48
99
90
34
816
4, 736. 6
116.9
767. 1
169. 9
171. 4
3, 511. 3
2, 740.
137.
297.
165.
94.
2, 046.
8
1
6
7
0
4
612
143
143
81
245
453
108
119
62
164
1, 897. 3
507.6
363.5
268. 1
758. 1
1, 332. 0
308. 2
292. 9
206.4
524.5
574
138
113
81
242
393
72
103
54
164
1, 848. 5
492.6
331.8
268. 1
756.0
1, 244.
260.
269.
190.
524.
7
2
6
4
5
557
21
45
138
92
232
29
430
9
67
96
66
177
15
1, 874. 8
56.8
135.8
497.3
310.4
767.6
106.9
1, 323. 6
30.9
135.5
376. 1
215.8
511.4
53.9
539
17
45
132
92
224
29
414
9
55
96
62
177
15
1, 853. 2
54.8
135.8
491.3
310. 4
754.0
106.9
1, 302.
30.
116.
376.
213.
511.
53.
6
9
5
1
8
4
9
3,313
45
3,257
11
2, 150
44
2,093
13
12, 039. 0
264.4
11,726.0
48.6
8, 179. 0
156. 4
7, 972. 6
50.0
2,816
45
2,760
11
1,838
41
1,784
13
10, 815. 5
264.4
10, 502. 5
48.6
7, 228.
146.
•7, 032.
50.
9
4
5
0
9
7
6
6
481
Table 3.—Cost of building the same standard house in representative cities in specific months1.
NOTE.—These figures are subject to correction
[Source: Federal Home Loan Bank Board]
Total cost
Cubic-foot cost
1938
Sept.
No. 1—Boston:
$0. 242
Hartford, Conn
.234
New Haven, Conn
.221
Portland, Me
Boston, Mass _ __
.262
Manchester, N. H
.226
Providence, R. I
_
.246
Rutland, Vt___ _ _ _ _ _ _ ___ __
.231
1937
Sept.
1937
1938
1936
Sept.
$0. 264
.246
.242
.278
.242
.247
.244
$0. 234
.231
.219
.249
.228
.232
.223
$5, 807
5,620
5,307
6,298
5,431
5,910
5,547
March
June
Sept.
2
$5, 659
5,616
2
5, 526
2
6, 079
2
5, 392
5,933
2
5, 676
2
Sept.
Dec.
$5, 823 2 $6, 076
5,771 2 5,832
2
5, 708
5, 543
6,601
6,191
2
5,601
5, 440
6,000
5,991
5,846
5,739
2
$6, 346
5,903
5,796
6,667
5,814
5,929
5,844
1936
Sept.
$5, 626
5, 544
5,245
5,984
5,478
5,577
5,359
No 4—Winston-Salem:
Birmingham, Ala__ _ _ _
Washington, D. C
Tampa, Fla _
West Palm Beach, Fla
Atlanta, Ga _ _ _ _
Baltimore, Md
Cumberland, Md _ _ _
Asheville, N. C
Raleigh, N. C
Columbia, S. C__ __
Richmond, Va_
Roanoke, Va__
_ _
.244
.243
.231
.242
.211
.206
.230
.212
. 221
.203
.215
.221
.253
2.251
.238
.269
.227
. 224
.237
.232
2.210
.226
.249
.207
.216
.228
.236
.203
.222
2.212
.215
. 196
.203
2
. 195
5,857
5,833
5,545
5,806
5,063
4,955
5,511
5,090
5,298
4,868
5, 169
5,299
No. 7—Chicago:
Chicago, 111
Peoria, IU_
Springfield, 111
Milwaukee, Wis
Oshkosh, Wis
_
.299
.284
__
.282
.270
.284
.240
.246
.251
.256
.283
.260
.271
2.222
.235
6,767
6,469
6,812
5,752
5,907
No. 10—Topeka:
Denver, Colo
Wichita, Kan
Omaha, Neb
Oklahoma City, Okla
__
_
__ __
.274
.282
.254
6,569
6,464
6,562
6,625
6,762
6,084
__
.242
.243
.255
.243
.232
.227
5,808
5, 827
5,814
5,840
5,841
5,850
6, 111
5,975
5,850 t 5, 838
5,568
5,449
_
2
2
2
2
2
2
6,068
5, 989
5, 608
6,166
5,207
4,983
5,535
5, 194
5,430
4,776
5,249
5, 268
6,935
6,695
6, 965
5, 754
6,040
6,068
5, 988
5, 666
6,260
5,190
5, 105
5,603
5,408
5,444
4,755
5,337
2
5, 269
6,068
2
6, 019
2
5, 578
6,393
5,267
5, 171
5,643
5,410
5,515
4,860
5,370
2
5, 198
7,021
6,700
6, 961
5, 800
6,040
7,226
6,705
2
2
2
2
2
6, 023
6,027
2
2
6,068
6, 019
5,717
6,461
5,458
5,386
5,696
5,669
4,874
5,326
5, 099
2
2
7, 178
6,807
2
6, 024
6, 144
2
5,566
5, 034
5,414
5, 985
4,957
5, 185
5,482
5, 168
4,698
4,871
4, 677
6,786
6,243
6,502
5, 326
5,630
1
The house on which costs are reported is a detached 6-room home of 24,000 cubic feet volume. Living room, dining room,
kitchen, and lavatory on first floor; 3 bedrooms and bath on second floor. Exterior is wide-board siding with brick and stucco
as features of design. Best quality materials and workmanship are used throughout.
The house is not completed ready for occupancy. It includes all fundamental structural elements, an attached 1-car garage,
an unfinished cellar, an unfinished attic, a fireplace, essential heating, plumbing, and electric wiring equipment and complete
insulation. It does not include wall-paper nor other wall nor ceiling finish on interior plastered surface, lighting fixtures, refrigerators, water heaters, ranges, screens, weather stripping, nor window shades.
Reported costs include, in addition to material and labor costs, compensation insurance, 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.
2
Revised.
NOTE FOR CHART ON FACING PAGE:
A new building code in New York City, effective January 1938, caused an unusual spurt of applications for permits which
threw the United States total out of balance. The dotted line shows that total excluding New York City for December 1937
and January and February 1938.
482
Federal Home Loan Bank Review
RATE OF RESIDENTIAL BUILDING IN ALL CITIES OF 10,000 OR MORE POPULATION
REPRESENTS THE ESTIMATED NUMBER OF PRIVATELY FINANCED FAMILY DWELLING UNITS PROVIDED PER 100,000 POPULATION
Source: Federal Home Loon Bank Board. Compiled from Building Permits. reported to U.S. Department of Labor.
FEDERAL HOME L
1
eu
DISTRICT 2
NEW YORK
DISTRICT 4
WINSTON SALEM
DISTRICT 3
PITTSBURGH
o
DISTRICT i
BOSTON
o
\jr-W8
o
o
h
MT-^LJI—
30
1931-35 AV&
rP
F LJ
20
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10
1
W-/9J&"
_rJ^}^21931-35 Ave. -)
1
1931-33 AVS-)
i
_J
,
"L-x.._.
~r~'
> OCT NCV DEC
DISTRICT 8
DES MOINES
I. FEB. MAR. APR. MAY
JUN. JUL AU& SEP OCT NOV
^ - J
DEC
Y*-I937
+r
DISTRICT 12
LOS ANGELES
4=i
FEB. MAR. APR MAY
JUN. JUL. AUS. SEP
OCT. NOV. 0£C.
I FEB MAR. APR. MAY
1931-33 AVC."J'L...
JUN. JUL. AUC
SEP. OCT
NOV
DEC
UNITED STATES AVERAGE
1 9 3 0 - 1938
v A-J
Pn
r
\
1
J
CHVISKW OF RESEARCH ANO STATISTICS
FEDERAL HOME LOAN BANK BOARO
1 1 1 1 t
1 1 1 I
October 1938
1 1 1 1 1 1 1 1 1 1 1 1 1 1
' • ' ' • • • ' ' ' •
1 1 1 1 1 1 1 I.I i.
' I ' '
\ /
^ T J
Excux>iN6 new ram arr^\
set note on facing page
1
J
r
r
1—1-1 1 1 1 1-1
483
Table 4.—Estimated volume of new lending activity of savings and loan associations/ classified by
district and type of association l
[Amounts are shown in thousands of dollars]
New loans
Federal H o m e Loan Bank District a n d t y p e of association
Aug.
1938
United S t a t e s : T o t a l
_
Federal
State m e m b e r
Nonmember
District 1:
District 2:
District 3 :
District 4:
District 5:
District 6:
District 7:
District 8:
Total
Federal _ _
State m e m b e r . _
Nonmember
_
$74,
26,
29,
18,
_ __ _
__ _
_
_.
_
_
_
_ _
-
Total
Federal
_
S t a t e member _
Nonmember. _
Total
Federal
State member
Nonmember
_
_
______
__
_____..
_ _
_ _
_ _
_ _ _ _ _ _ _
Total___
__ _
Federal
S t a t e member
Nonmember.
_
_
_
_
Total.
Federal._
State member
Nonmember
___
_ _
Total
Federal
State member
Nonmember
_ _
_ _
__
_
__
. . .
Total.
_ _
Federal _ _ _ _ _
S t a t e m e m b e r __
Nonmember
_
Total.
Federal
_
State member _
Nonmember
Total.
__
Federal
State member .
Nonmember. _
District 10: T o t a l .
_
Federal
State member
Nonmember
_
_
_.
__
_ _ __
_
District 9:
__
_ _
_
_ _
_
_ _
_ _,
District 1 1 : Total
._ .
...
Federal
_ _ _ _ _ _ _ _
State member
Nonmember _
_
District 12: T o t a L .
_____
_ _
Federal
State member
_
Nonmember,
1
_ _
_ _
_
_
709
858
506
345
July
1938
Percent
Percent
increase, New loans, increase,
Aug. 1938 Aug. 1937 Aug. 1938
over
over
Aug. 1937
July 1938
017
768
334
915
-3
0
—9
+ 2
+ 2
-4
0
+ 13
7,007
1,808
3,271
1,928
+ 2
+ 11
+ 1
-6
6,969
1,879
1,828
3,262
+ 6
+ 12
+ 1
+ 6
7,333
1,733
1,836
3,764
+ 1
+ 21
0
-8
5,281
1, 115
1,404
2, 762
5,263
1, 132
1,390
2, 741
0
-2
+ 1
+ 1
5,516
1,071
1,998
2,447
-4
+ 4
-30
+ 13
11,366
3,615
4,555
3, 196
9,927
3,289
4,996
1,642
+ 14
+ 10
-9
+ 95
10, 857
3,576
4,880
2,401
+ 5
+ 1
-7
+ 33
11,546
4,603
5,144
1,799
10, 166
3,808
5,016
1,342
+ 14
+ 21
+ 3
+ 34
13, 660
5,022
6, 182
2,456
— 15
-8
-17
-27
3,616
1,768
1,569
279
3,206
1,551
1,368
287
+ 13
+ 14
+ 15
-3
3, 752
1,664
1,715
373
-4
+ 6
-9
-25
7,413
2,511
2,904
1,998
6,467
2, 121
2,884
1,462
+ 15
+ 18
+ 1
+ 37
7,981
2,568
3,953
1,460
-7
-2
-27
+ 37
4,739
1,958
1,529
1,252
4,222
1,629
1,501
1,092
+ 12
+ 20
+2
+ 15
4, 771
1,971
1,398
1,402
—1
—1
+9
-11
4,105
1,544
2,419
142
3,302
1,463
956
883
2,699
1,485
871
343
4,041
1,619
2,231
191
2,980
1,264
987
729
+ 2
-5
+ 8
-26
+ 11
+ 16
-3
+ 21
3,539
1,338
2,096
105
4,011
1,797
1,014
1,200
+ 16
+ 15
+ 15
+ 35
-18
-19
-6
-26
2,318
1,126
778
414
5,076
2,327
2,669
80
+ 16
+ 32
+ 12
-17
+ 21
+ 16
+ 13
+ 439
2,693
1,549
1,042
102
5,897
2,671
2,949
277
0
-4
-16
+ 236
+ 4
+ 1
+ 2
+ 56
639
823
973
843
+ 10
+ 13
+ 2
+ 24
7, 128
2,003
3,312
1,813
7,004
2,078
3,325
1,601
7,381
2,096
1,838
3,447
6, 133
2,697
3,005
431
$67,
23,
28,
14,
$77,
26,
32,
17,
Revised.
484
Federal Home Loan Bank Review
Table 5.—Estimated volume of new loans by all savings and loan associations, classified according to
purpose and type of association l
[Amounts are shown in thousands of dollars]
T y p e of association
Purpose
Mortgage loans on homes
Period
1937
January-July
August
Construction
Home
purchase
Refinancing
Loans for
all other
Recondi- purposes
tioning
$234, 102
141, 034
21, 082
$326, 627
198, 025
28,011
$180, 804
111,336
15, 362
$62, 143
36, 791
5, 147
$92, 901
54, 005
7,415
14, 896
11,334
11,293
14, 391
15, 772
15, 281
13, 885
13, 194
14, 701
3,409
3,662
4,953
5,683
5,416
5,211
5,397
5,528
6,891
7,352
8, 170
8,648
8,059
8,443
8,028
8,072
1938
12, 572
11,669
16, 648
17, 710
19, 400
19, 892
19, 096
22, 575
January
February
March
April
May
June
July
August
16, 117
21,
25,
24,
25,
21,
23,
056
494
123
636
924
833
Volume of loans
Total
loans
$896, 577
541, 191
77, 017
49,
50,
65,
73,
72,
73,
67,
74,
102
093
218
307
279
067
639
709
Federals
State
members
Nonmembers
$307, 278
188, 915
26, 768
$379, 284
229, 904
32, 334
$210, 015
122, 372
17, 915
16,
17,
23,
26,
24,
26,
23,
26,
781
520
356
107
721
310
823
858
20,
22,
27,
30,
31,
30,
28,
29,
879
073
835
238
196
350
973
506
11,442
10, 500
14, 027
16, 962
16, 362
16, 407
14, 843
18, 345
Revised.
Table 6.—Index of wholesale price of building materials in the United States
[1926=100]
[Source: U. S. D e p a r t m e n t of Labor]
All building m a terials
Brick a n d
tile
91.3
93.3
95.9
96.7
97. 2
96.9
96.7
96.3
96.2
95.4
93.7
92.5
89.7
91. 0
91.8
94.9
95.0
95.0
95.4
95.5
95.0
93.4
92.9
92. 0
95.5
95.5
95.5
95.5
95. 5
95.5
95.5
95.5
95.5
95.5
95.5
95. 5
91. 8
91. 1
91.5
91.2
90.4
89.7
89.2
89.4
91.8
91.5
91. 1
90.4
90.5
90.6
90.7
90.6
95. 5
95.5
95.5
95.5
95.5
95.5
95.5
95.5
+ 0. 2 %
-7.2%
-0. 1 %
-5.1%
0.0%
0.0%
Cement
Paint and
paint materials
Plumbing
and
heating
Structural
steel
93.0
99.0
102. 1
103.0
103. 0
102.2
101.3
99.5
99.0
97.3
94.8
93. 8
83.7
83.4
83.9
83.9
83.7
83.6
83. 9
84. 1
84.6
84.2
81.5
80. 2
77. 1
77.4
77.6
78.7
78. 7
78.7
78.7
78. 8
80.6
80. 6
79.6
79.6
104.7
104.7
112.9
114.9
114.9
114.9
114.9
114.9
114.9
114.9
114.9
114.9
92.9
95.0
98.9
99.9
101.3
101.1
101.0
101.0
100.8
100.2
98.7
96.9
92.6
91.0
91.3
91. 1
89.3
88.7
88. 8
90.2
80. 1
79.2
82.2
81.4
80.9
80. 1
80.5
80. 5
79.6
79.6
78.9
77.2
77.2
77.2
79.5
79.2
114.9
114.9
114.9
114.9
114.9
113.0
107.3
107.3
95.8
95.3
94.8
94.8
94. 1
93.3
91.2
91.3
0. 0%
-4.3%
-0.4%)
+ 0.5%!
0. 0 %
-6.6%
Lumber
Other
1937
January
February
March
April
May
June
July
August
^September
October
November
December
1938
January
February
March
April
May
June
July
August
Change:
Aug. 1938-July 1938.
Aug. 1938-Aug. 1937
October 1938
+ 1.6%
-9.3%
+ 0. 1 %
-9.6%
485
Table 7.—Monthly operations of 1,289 identical Federal savings and loan associations and 599
identical insured State-chartered savings and loan ssociaations reporting during July and August
1938
[Amounts are shown in thousands of dollars]
1,289 Federals
July
599 insured State members
Change
July to
August
August
July
August
Percent
Share liability at end of month:
Private share accounts (number)__ __ _
Change
July to
August
Percent
1, 017, 544
1,031,813
+ 1.4
760, 168
$752, 696. 5
Paid on private subscriptions __
Treasury and H. 0 . L. C. subscriptions-- 210, 932. 1
$760, 357. 3
211,037.2
$509,
459. 9
2
33, 706. 7
$510,
304. 1
2
33, 807. 1
+ 0. 2
+ 0.3
963, 628. 6
971, 394. 5
+ 1.0
0)
+ 0.8
543, 166. 6
544, 111. 2
+ 0. 2
34, 219. 0
21, 526. 6
19, 544. 4
11,827.8
-42. 9
-45. 1
16, 756. 7
16, 085. 9
9, 062. 1
8, 191. 2
-45.9
— 49. 1
8, 364. 4
6, 508. 1
4, 835. 0
1, 414. 6
1, 854. 5
10, 058. 3
7, 029. 2
5, 180. 9
1, 601. 6
2, 213. 6
+ 20.3
+ 8.0
+ 7.2
+ 13.2
+ 19.4
3, 088. 0
2, 907. 6
1, 874. 5
693.7
1, 165. 9
3, 679. 9
3, 233. 4
1, 805. 9
707. 6
1, 304. 8
+ 19. 2
+ 11. 2
-3. 7
+ 2. 0
+ 11. 9
22, 976. 6
925, 080. 6
26, 083. 6
938, 003. 7
+ 13.5 1
9, 729. 7
+ 1.4
487, 906. 7
10, 731. 6
490, 794. 4
+ 10. 3
+ 0.6
95, 007. 9
2, 253. 6
93, 046. 2
2, 672. 9
-2. 1
+ 18.6
36, 053. 5
3, 374. 0
34, 930. 8
3, 346. 1
-3. 1
-0. 8
97, 261. 5
95, 719. 1
-1.6
39, 427. 5
38, 276. 9
-2. 9
+ 1.1 1 694, 962. 8 1 697, 762. 5
+ 0.4
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
___
Total_-_
___ __ __ __ __
Mortgage loans outstanding end of month- _ _
Borrowed money as of end of month:
From Federal Home Loan Banks. __ __
From other sources
__
!
Total
1, 172, 159. 9 1, 185,087.9
Total assets, end of month _ _ _
1
2
761, 535 J
+ 0.2
Less than 0.1 percent.
Includes only H. O. L. C. subscriptions.
Table 8.—Institutions insured by the Federal Savings and Loan Insurance Corporation
1
[Amounts are shown in thousands of dollars]
State-chartered associations. _
Converted F. S. and L. A
New F. S. and L. A__ ___ _
Total...-
Cumulative number at specified dates
Number of
investors
Assets
Private
repurchasable
capital
Dec. 31, Dec. 31, Dec. 31, Dec. 31, July 31, Aug. 31,
1938
1937
1938
1935
1936
1934
Aug. 31,
1938
Aug. 31,
1938
Aug. 31,
1938
4
108
339
136
406
572
382
560
634
566
672
641
451
1, 114
1,576
1,879
2
3
691
700
638
2,029
699
702
640
921, 600
800, 900
266, 700
$780, 477
910, 968
315, 079
2,041
1, 989, 200
2, 006, 524
4
$571, 021
628, 085
158, 900
5
1, 358, 006
i Beginning Dec. 31,1936, figures on number of associations insured include only those associations which have remitted premiums. Earlier figures include all associations approved by the Board for insurance.
* In addition, 7 Federals with assets of $12,374,000 had been approved for conversion but had not been insured as of July 31.
* In addition, 1 new Federal with assets of $11,000 had been approved for membership but had not been insured as of July 31.
< In addition, 11 Federals with assets of $7,139,000 had been approved for conversion but had not been insured as of August 31.
* According to revised estimates, private repurchasable capital amounted to $624,642,000 on July 31, 1938.
486
Federal Home Loan Bank Review
Table 9 . — H . O . L. C subscriptions to shares of savings and loan associationsRequests and subscriptions1
Uninsured State-chartered members of Insured State-chartered Federal savings and loan
associations
associations
the F. H. L. B.
System
Requests:
Dec. 31, 1935
Dec. 31, 1936
Dec. 31, 1937
Jan. 31, 1938
Feb. 28, 1938
Mar. 31, 1938
Apr. 30, 1938
May 31, 1938
June 30, 1938
July 31, 1938
Aug. 31, 1938
Subscriptions:
Dec. 31, 1935
Dec. 31, 1936
Dec. 31, 1937
Jan. 31, 1938
Feb. 28, 1938
Mar. 31, 1938
Apr. 30, 1938
May 31, 1938
June 30, 1938
July 31, 1938
Aug. 31, 1938
1
2
Number
(cumulative)
Number
(cumulative)
Number
(cumulative)
Amount
(cumulative)
Number
(cumulative)
27
89
112
113
106
2
100
2
95
2
89
91
2
82
82
$1, 131, 700
3, 845, 710
5, 357, 210
5, 382, 210
5, 197, 210
2
4, 992, 210
5, 062, 210
2
4, 772, 210
4, 972, 210
2
4, 471, 010
4, 471, 010
33
279
666
675
692
711
739
761
774
799
813
$2, 480, 000
21, 016, 900
43, 490, 020
44,055,020
44,816,020
45, 975, 130
47,324,670
48, 424, 670
49, 318, 670 !
50, 684, 870
51, 618, 370
553 $21, 139, 000
2, 617 ' 108, 591, 900
4,324 187, 015, 400
4,342 187, 668, 400
4,360 188, 535, 900
4,368 188, 885, 900
4,382 189, 693, 900
4,399 190, 528, 900
4,418 191, 375, 900
4,434 192, 202, 900
4,443 192, 616, 900
613 $24, 750, 700
2,985 ' 133, 454, 510
5,102 235, 862, 630
5,130 237, 105, 630
5, 158 238, 549, 103
5,179 239, 853, 240
5,216 242, 080, 780
5,249 243, 725, 780
5,283 245, 666, 780
5,315 247, 358, 780
5,338 248, 706, 280
24
262
564
573
582
596
613
632
642
1, 980, 000
19, 455, 900
36, 331, 270
36, 843, 270
37, 073, 270
37, 714, 270
38, 590, 570
39, 566, 310
39, 876, 310
40, 155, 310
40, 405, 310
17, 766, 500
474
2,538 104, 477, 400
3,997 168, 762, 300
4,009 169, 035, 300
4,024 169, 670, 300
4,033 170, 057, 800
4,039 170, 147, 800 !
4,049 170,772,800
4,058 1 170,995,300 1
4,065 171,300,300
4,072 171,532,800
19, 846, 500
500
2,845 125, 621, 300
4,601 206, 619, 570
4,622 207, 404, 570
4,642 ! 208, 234, 570
4, 662 1 209, 173, 070
4,681 210,064,370
4, 707 211,465,110
4,726 211,997,610
4, 739 212,556,610
4, 753 213, 039, 110
Amount
(cumulative)
Amount
(cumulative)
Amount
(cumulative)
!
2
45
40
40
36
2
33
2
29
2
26
26
2
25
25
100, 000
1, 688, 000
1, 526, 000
1, 526, 000
i 2 1, 491, 000
I 2 1, 401, 000
1, 326, 000
! 2 1, 126, 000
12 1, 126, 000 1
1, 101, 000 1
1, 101, 000
649
656
Refers to numbers of separate investments, not to number of associations in which investments are made.
Reduction due to insurance or federalization of associations.
Table 10.—Federal Home Loan Bank advances
to member institutions by Districts
Table 11.—Lending operations of the Federal
Home Loan Banks
[Thousands of dollars]
Federal Home Loan
Banks
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
Total
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
Total _.-
October 1938
[Thousands of dollars]
Advances
outstanding at end
of August
1938
Advances
made
during
August
1938
Advances
made
during
July 1938
$128
425
634
675
257
152
351
359
268
501
172
372
$199
521
533
1, 182
469
288
353
247
233
395
238
286
$8, 107
17, 191
17, 461
18, 077
26, 371
11, 897
32, 519
14, 863
10, 561
11, 645
6,557
14, 169
4, 294
4,944
189, 418
Period
Advances
monthly
Repayments
monthly
Balance
outstanding at end
of month
1936
January-August
August
$54, 308
7,830
$31, 884
4,714
$125, 218
80, 338
11, 116
50, 131
5,080
175, 607
50, 419
4,294
61, 096
6,768
189, 418
1937
January-August
August
1938
January-August
August
487
Table 12.—Properties acquired by H . O . L.
through foreclosure and voluntary deed 1
Number
Period
Prior to 1935
1935: Jan. 1 through
July 1 through
1936: Jan. 1 through
July 1 through
1937: Jan. 1 through
July 1 through
1938: January
February
March
April
May_
June
July
August
June
Dec.
June
Dec.
June
Dec.
Table 73.—Reconditioning Division—Summary
of all reconditioning operations of H . O . L. C.
through August 3 1 , 1 9 3 8 l
30
31
30
31
30
31
114
983
4,449
15, 875
23, 225
26, 981
4,807
4,339
4,961
4,851
4,695
4,733
4,056
3,886
June 1, 1934
through
July 31,
1938
Aug. 1,
1938
through
Aug. 30,
1938
Cumulative
through
Aug. 30,
1938
107, 964
Cases received 2
955, 699
11,951
967, 650
Contracts awarded:
Number.
586, 380
598, 345
11, 965
Amount
$112,727,228 $2, 841, 230 $115, 568, 458
Jobs completed:
575, 361
Number,
12, 339
587, 700
Amount
$108, 528, 337 $2,801,411 $111,329,748
1
Does not include 14,408 properties bought in by H. 0. L. C.
at foreclosure sale but awaiting expiration of the redemption
period before title in absolute fee can be obtained.
In addition to the 107,964 completed cases, 595 properties
were sold at foreclosure sale to parties other than the H. O. L.
C. and 14,648 cases have been withdrawn due to payment of
delinquencies - by borrowers after foreclosure proceedings
were authorized.
Figures for periods from July 1, 1936, to current month
have been revised.
X
A11 figures are subject to adjustment. Figures do not include 52,269 reconditioning jobs, amounting to approximately
$6,800,000, completed by the Corporation prior to the organization of the Reconditioning Division on June 1, 1934.
2
Includes all property management, advance, insurance,
and loan cases referred to the Reconditioning Division which
were not withdrawn prior to preliminary inspection or cost
estimate prior to April 15, 1937.
Federal Home Loan Banks
Public understanding of the purposes of the
Federal Home Loan Bank System has grown steadily
during the six years the Banks have been in existence. In all sections of the country, the general
public has seen the important part which member
institutions have taken in financing homes and in
promoting sound habits of thrift. Increasing public
knowledge of these services, and recognition of their
value, is shown by the favorable reception given by
private investors to the consolidated debentures
issued by the Federal Home Loan Banks, and by the
steadily growing interest in the activities of the Banks
and their members displayed by the newspapers
and magazines throughout the country.
Increasing public interest and recognition means
not only that the Federal Home Loan Bank System
is steadily increasing its usefulness, both nationally
and locally, but it also means t h a t in the future, even
more than today, the ability of each member institution to serve its own community will be enhanced
by the prestige which membership in the Federal
Home Loan Bank System carries in the public mind.
Grand total to Aug. 31, 1938
(Continued from p. 464)
operation of home-financing institutions. Interest
charges to borrowers have been substantially reduced.
Savings and investment plans have been widely
adopted which any investor can accept as both safe
and understandable, thus encouraging the growth of
private thrift to provide funds for home-financing.
Many member institutions are cooperating in the
development of the Federal Home Building Service
Plan to provide a complete and supervised construction service for prospective home owners. The importance of the cooperation of member institutions
in the development of a plan of technical control in
small house building can be appreciated in view of
the fact that during the fiscal years 1937 and 1938
construction and reconditioning loans made up
approximately 35 percent of the total dollar amount
of loans made by members of the Federal Home
Loan Bank System.
488
Federal Home Loan Bank Review
Directory of Member, Federal an<
Insured Institutions
Added during August—September
I. INSTITUTIONS ADMITTED TO MEMBERSHIP
IN THE FEDERAL HOME LOAN BANK SYSTEM
BETWEEN AUGUST 16, 1938, AND SEPTEMBER
15, 1938
(Listed by Federal Home Loan Bank Districts, States, and cities)
DISTRICT NO. 2
N E W JERSEY:
Millington:
Millington Building & Loan Association.
Union City:
Palisade Building & Loan Association, 349 New York Avenue.
N E W YORK:
Utica:
Cornhill Building & Loan Association, Deveroux & Charlotte Streets.
DISTRICT NO. 3
PENNSYLVANIA:
New Brighton:
Beaver County Building & Loan Association, 823 Third Avenue.
Radnor:
Radnor Building & Loan Association.
Wayne:
Wayne Building & Loan Association.
DISTRICT NO. 5
OHIO:
Cincinnati:
Anderson Ferry Building & Loan Company, 4400 Liston Avenue.
South Side Loan and Building Company, 1805 Powers Street.
Newark:
Licking County Building & Savings Company, 42 North Third Street.
DISTRICT NO. 7
ILLINOIS:
Berwyn:
Olympic Building & Loan Association, 6211 West Cermak Road.
Calumet City:
Calumet City Building & Loan Association, Box 29.
Chicago:
Alliance Building & Loan Association, 5315 Fullerton Avenue.
WITHDRAWALS FROM THE FEDERAL HOME LOAN BANK SYSTEM
BETWEEN AUGUST 16, 1938, AND SEPTEMBER 15, 1938
ILLINOIS:
Chicago:
Ben Franklin Building <fc Loan Association, 1814 South Ashland Avenue
(voluntary withdrawal).
Niles:
Village of Niles Building & Loan Association (voluntary withdrawal).
MARYLAND:
Baltimore:
Homewood Savings & Loan Association, 138 West Twenty-fifth Street
(voluntary withdrawal).
Linwood Building & Loan Association of Baltimore City, Incorporated,
2545 Eastern Avenue (voluntary withdrawal).
Walbrook Park Permanent Building Association of Baltimore City, 3118
West North Avenue (removal from membership).
MICHIGAN:
Detroit:
National Loan & Investment Company, 1250 Griswold Street (sale of
assets to Surety Savings & Loan Association* Detroit, Michigan).
MISSISSIPPI:
Winona:
Winona Building & Loan Association, North Front Street (voluntary
withdrawal).
N E W JERSEY:
East Orange:
Hollywood Building & Loan Association, 131 Main Street (transfer of
stock to Triumph Building & Loan Association, East Orange, New
Jersey).
Summit:
Overlook Building & Loan Association, 401 Springfield Avenue (merger
with Summit Building & Loan Association, Summit, New Jersey) -1
VIRGINIA:
Richmond:
Virginia Building & Loan Company, 302 East Grace Street (voluntary
withdrawal).
1
After the merger, the Summit Building & Loan Association changed its name
to Summit-Overlook Building & Loan Association of Summit, New jersey.
October 1938
II. FEDERAL SAVINGS AND LOAN ASSOCIATIONS
CHARTERED BETWEEN AUGUST 16, 1938, AND
SEPTEMBER 15, 1938
DISTRICT NO. 3
PENNSYLVANIA:
Philadelphia:
New Southwark Federal Savings & Loan Association, 916 Walnut Street
(converted from New Southwark Building Association).
Pittsburgh:
Security Ten Cent Federal Savings & Loan Association, 506 South Main
Street (converted from Security Ten Cent Loan Association of Pittsburgh, Pennsylvania).
West End Federal Savings & Loan Association, 506 South Main Street
(converted from West End Building & Loan Association of Pittsburgh) .
Wayne:
First Wayne Federal Savings & Loan Association, 114 Audubon Avenue
(converted from Wayne Building & Loan Association).
Radnor Federal Savings & Loan Association, 114 Audubon Avenue (converted from Radnor Building & Loan Association).
Wilmerding:
Air Brake Federal Savings & Loan Association, 204 Westinghouse Avenue (converted from Air Brake Building & Loan Association).
DISTRICT NO. 5
KENTUCKY:
Covington:
Suburban Federal Savings & Loan Association of Covington, 1829 Madison Avenue (converted from Suburban Perpetual Building & Loan
Association).
Owensboro:
First Home Federal Savings & Loan Association, 216 West Third Street
(converted from United Savings & Building Association).
OHIO:
Cleveland:
Orleans Federal Savings & Loan Association of Cleveland, 3649 East
Ninety-third Street (converted from Orleans Building & Loan Association) .
D I S T R I C T NO. 9
TEXAS:
Beaumont:
Home Federal Savings & Loan Association of Beaumont, 471 Pearle
Street (converted from Home Building & Loan Association).
D I S T R I C T NO. 10
KANSAS:
Topeka:
Capitol Federal Savings & Loan Association, 534 Kansas Avenue (converted from Capitol Building & Loan Association of Topeka).
DISTRICT NO. 12
CALIFORNIA:
Whittier:
Quaker City Federal Savings & Loan Association, 117 South Greenleaf
Avenue (converted from Mutual Building & Loan Association of
Whittier).
CANCELATIONS OF FEDERAL SAVINGS AND LOAN ASSOCIATION CHARTERS BETWEEN AUGUST 16, 1938, AND SEPTEMBER 15, 1938
CALIFORNIA:
San Diego:
Bay City Federal Savings & Loan Association (merger with First Federal
Savings & Loan Association of San Diego, California).
III. INSTITUTIONS INSURED BY THE FEDERAL
SAVINGS AND LOAN INSURANCE CORPORATION
BETWEEN AUGUST 16, 1938, AND SEPTEMBER
15, 1938
DISTRICT NO. 3
PENNSYLVANIA:
Trevose:
Trevose Building & Loan Association, Corner Street & Brownsville
Roads.
DISTRICT NO. 4
FLORIDA:
Pensacola:
Mutual Building & Savings Association, 33 West Garden Street.
NORTH CAROLINA:
Canton:
Canton Building & Loan Association, 23 Academy Street.
DISTRICT NO. 5
KENTUCKY:
Owensboro:
First Home Federal Savings & Loan Association, 216 West Third Street.
OHIO:
Cleveland:
Saint Hyacinth's Savings & Loan Association, 2968 East Sixty-first
Street.
Cleveland Heights:
Ivanhoe Savings Company, 1838 Coventry Road.
Trenton:
Trenton Building & Loan Association, Box 293.
489
DISTRICT NO. 6
MICHIGAN:
Dearborn:
Dearborn Savings & Loan Association, 924 Mason Street.
D I S T R I C T NO. 7
ILLINOIS:
Belleville:
Greater Belleville Building & Loan Association, 18 East Washington
Street.
Berwyn:
Olympic Building & Loan Association, 6211 West Cermak Road.
Chicago:
Alliance Building & Loan Association, 5315 Fullerton Avenue.
Amerikan Building Loan & Homestead Association, 1824 West Fortyseventh Street.
Cragin Building & Loan Association, 2300 North Lorel Avenue.
A Study of Mortgages Recorded
•
T H A T a home-financing institution will find
accurate current information on mortgages
recorded in its community to be a valuable yardstick as a check of operations and as an index of the
activity of other types of lending institutions was
stressed in the widely-read article, "Cooperation in
the Collection of Mortgage D a t a " in the July issue
of the R E V I E W . The Serial Federal Savings and
Loan Association of New York has recently conducted a comprehensive survey of the 10,000 mortgages filed in Nassau and Queens Counties from
January 1 to July 30, 1938. They found that in
Nassau County 26 percent of the mortgages by
number were made by individuals, 21 percent by
commercial banks, 18 percent by savings and loan
associations, 8 percent by savings banks, 5 percent
by insurance companies, and 22 percent by others.
In Queens County they found similar relationships
between the different types of lenders: 25 percent of
total mortgages by number were made by commercial banks, 22 percent by individuals, 17 percent by
savings banks, 14 percent by savings and loan associations, 3 percent by insurance companies and 19
percent by others. Practically all of the mortgages
made during this 7-month period were of the type
that savings and loan associations would ordinarily
make. Only three percent of the mortgages in each
county involved an amount in excess of $10,000.
The survey not only revealed the proportion of the
total mortgage loans which savings and loan associations were making in these two counties and the
current trend, but it also showed significant movements in the interest rates currently charged on these
490
mortgage loans. Since the first of the year the Serial
Federal found that there had been a pronounced
decrease in the average of the interest rates on the
mortgages filed. (In many cases the interest r a t t
was not recorded, b u t a definite trend in interese
rates was found to exist in the average of all of the
interest rates which were obtainable from the
records.)
This study of mortgages recorded by the Serial
Federal Savings and Loan Association has created
wide interest in mortgage-lending circles in the
New York area. The Division of Research and
Statistics of the Federal Home Loan Bank Board
will be glad to send forms to be used in making mortgage recordings, together with complete instructions,
to anyone wishing to make similar studies of the
mortgages recorded in his county. The only request
of the Division is that a copy of the recordings be
returned to Washington in a postage-paid envelope.
Any institution cooperating in this project will be
sent a summary of the recording data available as
well as a break-down of data on communities comparable to its own.
Sponsorship of Better Low-Cost
Home Design
•
The Union Co-operative Federal Savings and
Loan Association of Pittsfield, Massachusetts,
has offered a prize of $100 for the best designed lowpriced house built in Pittsfield during 1938. The
house must be one built in the period between April
1, 1938, and December 1, 1938, and financed by the
association. I t must not cost more than $6,000,
including the lot; it must have at least four rooms
and not more than six; must be located within the
city limits; and occupied by the owner. The award
will not be presented until M a y 31, 1939, thereby
giving an opportunity to builders who did not start
until the latter part of this season to grade the lots,
seed the lawns, and complete the landscaping. The
design of the interior and exterior of the house will be
taken into consideration when awarding the prize,
and also the grading and landscaping of the lot.
Federal Home Loan Bank Review
V. t . «OVER*MENT PRINTING OFFICE: ItSS
FEDERAL HOME LOAN BANK DISTRICTS
«•
$
BOUNDARIES OF FEDERAL HOME LOAN BANK DISTRICTS
FEDERAL HOME LOAN BANK CITIES.
OFFICERS OF FEDERAL HOME LOAN BANKS
BOSTON
B.
CHICAGO
J. R O T H W E L L , C h a i r m a n ; E . H . W E E K S , Vice C h a i r m a n ; W . H .
NEAVES,
President;
H.
N.
FAULKNER,
Vice P r e s i d e n t ;
FREDERICK
M O R T O N B O D F I S H , Vice C h a i r m a n ;
BARDWICK,
A. R . G A R D N E R , P r e s i d e n t ;
J R . , Vice P r e s i d e n t - T r e a s u r e r ;
CONSTANCE
W I N ANT, J R . , T r e a s u r e r ; L . E . D O N O V A N , S e c r e t a r y ; P . A. H E N D R I C K ,
S e c r e t a r y ; L A U R E T T A Q U A M , Assistant T r e a s u r e r ;
Counsel.
WOOD, Counsel.
NEW
GEORGE
MACDONALD,
YORK
V.
DES
D.
L L O Y D , Vice
UNGARO &
SHER-
MOINES
C. B . B O B B I N S , C h a i r m a n ; E . J . R U S S E L L , Vice C h a i r m a n ; R . J . R I C H A R D -
G. L . B L I S S , President; F . G . STICKEL, J R . , Vice President-General
SON, President-Secretary; W . H . LOHMAN, Vice President-Treasurer;
J. M . M A R T I N , Assistant Secretary; A. E . M U E L L E R , Assistant
Treasurer; E . S. T E S D E L L , Counsel.
R O B E R T G.
F.
JOHN
WRIGHT,
Chairman;
Counsel;
Chairman;
M.
C L A R K S O N , Vice P r e s i d e n t - S e c r e t a r y ;
DENTON
C. L Y O N , T r e a s u r e r .
PITTSBURGH
LITTLE ROCK
E . T . T R I G G , C h a i r m a n ; C . S. T I P P E T T S , Vice C h a i r m a n ; R . H . R I C H ARDS, P r e s i d e n t ;
G.
R.
PARKER,
Vice
President;
H.
H.
GARBER,
J . G I L B E R T L E I G H , C h a i r m a n ; W . C . J O N E S , J R . , Vice C h a i r m a n ; B . H .
W O O T E N , P r e s i d e n t ; H . D . W A L L A C E , Vice P r e s i d e n t ; W . F . T A R V I N ,
Secretary-Treasurer; R . A. CUNNINGHAM, Counsel.
Treasurer; J . C . CONWAY, Secretary; W . H . C L A R K , J R . , Counsel.
WINSTON-SALEM
TOPEKA
G . W . W E S T , C h a i r m a n ; E . C . B A L T Z , Vice C h a i r m a n ; O. K . L A R O Q U E ,
President-Secretary; G. E . W A L S T O N , Vice President-Treasurer; J o s . W .
H O L T , Assistant S e c r e t a r y ; R A T C L I F F E , H U D S O N & F E R R E L L , Counsel
W . R . M C W I L L I A M S , C h a i r m a n ; G . E . M C K I N N I S , Vice C h a i r m a n ;
C. A. STERLING, President-Secretary; R . H . B U R T O N , Vice PresidentTreasurer; J O H N S. D E A N , J R . , General Counsel.
CINCINNATI
PORTLAND
T H E O . H . T A N G E M A N , C h a i r m a n ; W M . M E G R U E B R O C K , Vice C h a i r m a n ;
WALTER
D.
DWIGHT
WEBB,
SHULTZ,
President;
J R . , Secretary;
W.
A.
E.
L.
JULIUS,
MADDOX,
S T E T T I N I U S & H O L L I S T E R , G e n e r a l Counsel; R .
Vice
President;
Treasurer;
B . JACOBY,
TAFT,
Assigned
F . S. M C W I L L I A M S , C h a i r m a n ; B . H . H A Z E N , Vice C h a i r m a n ; F . H .
JOHNSON,
President-Secretary;
IRVING
BOGARDUS,
Vice
President-
Treasurer; M r s . E . M . SOOYSMITH, Assistant Secretary.
Attorney.
Los
INDIANAPOLIS
F . S. C A N N O N , Chairman-Vice President; S. R . L I G H T , Vice C h a i r m a n ;
FRED T.
G R E E N E , President; B . F . BURTLESS,
Secretary-Treasurer;
JONES, HAMMOND, BUSCHMANN & GARDNER, Counsel.
ANGELES
C. H . W A D E , C h a i r m a n ; D . G . D A V I S , Vice C h a i r m a n ; M . M . H U R FORD, P r e s i d e n t ; C . E . B E R R Y , Vice President; F . C . N O O N , SecretaryTreasurer;
VIVIAN
SIMPSON,
P A T R I C K , General Counsel.
Assistant
Secretary;
RICHARD
FITZ-
@FedFRASER