Full text of Federal Home Loan Bank Review : October 1941, Vol. 8 No. 1

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HOME
LOAN
BANK




'.iWx-M-fi

Washington, October 1941

CONTENTS

FOR

OCTOBER

f 941

ARTICLES

FEDERAL

HOUSING PRIORITIES

GO INTO EFFECT

Caution in construction loans—Behind t h e scenes of t h e Priorities B o a r d — " G r a d u a t e d r a t i n g s " for housing—A glimpse of t h e
critical materials list—Procedure under t h e priorities system—
Probable effects on residential building activity and mortgage
lending.

HOME

SAVINGS A N D L O A N A S S O C I A T I O N S — O N T H E A I R !

LOAN

SAVINGS R I S E I N V O L U M E A N D SIGNIFICANCE

6

Survey within a survey—General characteristics of 1940 prog r a m s — H o w t o get excellent results as told by those who do—
Checking on t h e quality of results—Basic conclusions.

li

New emphasis on thrift—Peak volume of private savings in 1940
—Shifts in t h e first six m o n t h s of 1941—Recent experience of
savings and loan associations.

BANK

C E N T R A L I Z E D A P P R A I S A L S A S A L E N D I N G SAFEGUARD

15

Basic t h o u g h t s behind t h e New Orleans Central Appraisal Bureau—Establishment of t h e Bureau—Outline of t h e procedure—
Loans for new construction—Physical organization and facilities
—Experience t o d a t e .

REVIEW

THE

REAL-ESTATE OVERHANG—BACK TOWARD

MONTHLY

Published Monthly by the

FEDERAL HOME L O A N
BANK BOARD

John H, Fahey, Chairman
T, D. Webb, Vice Chairman
F. W. Catiett
W. H. Husband
F, W. Hancock, Jr.

FEDERAL HOME LOAN
BANK SYSTEM
FEDERAL SAVINGS AND LOAN
ASSOCIATIONS
FEDERAL SAVINGS AND LOAN
INSURANCE CORPORATION
HOME OWNERS' LOAN
CORPORATION

NORMAI

19

$520,000,000 net reduction in 1940—Holdings of t h e principal
mortgage lenders—Problem areas still exist—Further improvem e n t in 1941.

SURVEY

Highlights a n d s u m m a r y

23

General business conditions

24

Residential construction

24
25

Building costs
New mortgage-lending activity of savings and loan associations
Mortgage recordings
Foreclosures
Federal H o m e Loan Bank System
Federal savings a n d loan associations
Federal Savings and Loan Insurance Corporation

STATISTICAL

25
26
26
27
27
27

TABLES

New family dwelling units—Building costs—Savings and loan lending—Mortgage
recordings—Total nonfarm foreclosures—HOLC properties—Insured savings
and loan associations—Federal H o m e Loan B a n k a d v a n c e s — G o v e r n m e n t inv e s t m e n t s in savings and loan associations—Private long-term savings . . . 28-35

REPORTS
A p p o i n t m e n t of Public I n t e r e s t Director

Vol. 8

No. 1

F r o m t h e m o n t h ' s news
Directory of member, Federal, and insured institutions added during A u g u s t September

9
10
36

SUBSCRIPTION PRICE OF R E V I E W . 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,
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APPROVED BY T H E BUREAU OF T H E B U D G E T
418450—41
1




HOUSING PRIORITIES GO INTO EFFECT
The introduction of housing priorities last month brings the building
and home-financing industries face to face with the stern realities of
our national emergency. A discussion of the working mechanism of
this Government control and of the problems raised by its application
to housing will be of interest to savings and loan executives and
directors.
•

ON September 22, a priorities system for critical
building materials, announced earlier this year,
went into effect. This measure adds construction
to the ever growing list of industries in which shortages impose severe controls of civilian consumption,
designed to make certain that preference is given to
the first need: defense. To every element in the
far-flung organization of American housing, including
mortgage-lending institutions, this decisive step
brings home the fact that our country has rapidly
taken leave of "business as usual.'' I t emphasizes
that no single group in the Nation can escape the
toil of adjustments, the self-denial, and the pinches
that are the inevitable marks of a war economy.
CAUTION IN CONSTRUCTION LOANS

As a practical matter, the introduction of priorities
requires great caution on the part of savings and loan
associations in the handling of commitments and
loans for new construction or reconditioning. Many
institutions still seem to act on the assumption or on
builders' assurances that materials for a particular
job are available, and proceed with the payment of
construction loan installments without having made
certain that all critical materials are set aside for the
job or that priority certifications have been obtained.
If structures started without definite guarantees as
to the supply of critical materials cannot be completed, serious difficulties are likely to arise, and
every mortgage lending institution should protect
itself against losses from investment in ghost houses.
First of all, savings and loan executives will do
well to keep in mind that priority assistance is given
only for construction in designated defense areas,
under limitations presently to be described. Policies
in regard to nondefense housing may be announced
in the near future and will probably solve the vexing
problems of nondefense building under construction
and needs for maintenance and repair. Second, the
lack of even one single critical material can jeopardize
2




the whole construction job. For instance, if a fire
pot cannot be obtained, the furnace is useless, and
without a workable furnace the house is uninhabitable.
B E H I N D THE SCENES OF THE PRIORITIES BOARD

What are priorities, and how do they work? The
mechanism of this war-time instrument of Government control is so shrouded in technicalities that it
is difficult " t o see the forest for the trees." Yet,
priorities are becoming such a determining factor in
every line of business that a basic understanding of
their function is needed to assure maximum cooperation between those who administer them and those
whose business they affect. A simple illustration
may help to clarify at least the fundamental aspects
of priorities.
Let us imagine two large piles, one of raw materials—all kinds of raw materials from fields, forests,
and mines—and another of finished products—
products from looms, furnaces, benches, and assembly lines—for military and civilian consumption.
For each of these enormous piles the Office of Production Management encourages a maximum supply
with primary emphasis on materials essential to
national defense.
Standing near these piles with his records of
inventory is the Director of Priorities. By his side
are groups who compete for their use. One group
at the time of each selection is given first choice.
T h a t group is the Army and Navy Munitions Board,
and its requirements are rated A-l, A-la, A-lb, and
on down the alphabet. These requirements are large
and diverse, running the long gamut of military
needs for men, ships, guns, planes, and munitions
which are to be supplied from our international
arsenal. That group having first choice calls for
ever increasing quantities. I t has never had enough.
Our very existence as a free people requires that its
demands for supplies be met. So the civilian conFederal Home Loan Bank Review

sumers stand by while the military group takes
more and more away from the normal channels of
use.
When other groups step up to obtain their supplies
they take what is left. But in the taking they proceed one by one in the order of established preference.
This order of preference is determined by the Supply
Priorities and Allocation Board. Under the now
established procedure, housing for defense workers
ranks in the category with tools and plants, second
only to guns, tanks, planes, and munitions. In the
technical language of the priority system, defense
housing receives preference ratings beginning with
A-2 and running through A-9.
The Army and Navy critical list is made up by
the Army and Navy Munitions Board. Priority
ratings for its requirements are fixed once a month.
The allocations of critical materials to defense
housing and other defense needs of equal preference
rating follow the Munitions Board's allocations and
are likewise determined monthly. However, officials
in charge of priorities emphasize that the possession
of a preference certificate is in itself no guarantee
that the material is available.
" GRADUATED R A T I N G S " FOR HOUSING

Priority ratings for the construction of housing in
defense areas will be graduated. The highest ratings within the indicated range will be given to
projects under construction as of September 1, 1941 *
in order that such projects may be completed without difficulty. The same top ratings are to be
granted to remodeling and rehabilitation. This
gives recognition to the sound principle that reconditioning of existing dwellings to provide additional
housing facilities should, to the fullest practicable
extent, be favored over new construction. Existing
houses can be made suitable at much less expense
in time, money, and materials than is required for
new construction, and they can supply additional
family units without increasing the need for installation of public utilities and community services.
Priorities of lower preference ratings are to be
given to new construction for rent. Still lower ratings will be extended to new construction for sale, on
the assumption that the principal need of defense
workers is for rental accommodations. In addition
to the type of construction, preference ratings will
also take into account its urgency in point of time.
i Structures started between September 1 and September 22, when the rating
procedure went into effect, are classified as "new construction."

Oc/o£>er 1941




It is important to keep in mind that priority ratings at the present moment relate only to specific
critical materials and manufactured products included in a " Defense Housing Critical List of Materials" issued by the Office of Production Management. If a house, or anything else, can be built
without these critical materials by the use of substitutes or otherwise, there is no restriction. Priorities are designed to give preference to defense needs
and not essentially to restrict nondefense activities,
although inevitably in some quarters they will have
that effect.
Only in cases where the entire supply of a critical
material or product is preempted by priorities and
defense needs, does the priority ruling become a
restriction on nondefense activities. For many
scarce materials, preferential defense needs will tend
to curtail but not eliminate supplies available for
nondefense users; in such cases allocations of residual
supplies will be made over and above defense requirements.
A

GLIMPSE

OF

THE

CRITICAL

MATERIALS

LIST

In contrast to World War I when strict control of
new building was prompted by severe shortages of
lumber and transportation facilities, the present
scarcity in the line of building materials is chiefly
in metals. This is evident from a glance at the major
headings in the above-mentioned list of critical
materials, which read:
Steel and iron
Plumbing and gas distribution systems
Heating and ventilation equipment

Household equipment
Land development
items
Electrical

The purpose of this list is to eliminate the use of
critical materials for certain construction purposes
or to reduce it to the absolutely necessary minimum.
For example, preference ratings will not be granted
for lighting fixtures made of aluminum and solid
brass or bronze but copper and brass plating will be
permitted. The use of ferrous metal lath is limited
to fire-resisting partitions, ceilings and soffits, to
wall tile bed base, and where gypsum lath or gypsum
plaster is not permitted.
In several instances, priority ratings for critical
materials are to be given only in the case of multifamily structures. This applies, for instance, to steel
stairs and rails, to certain electrical accessories, and
to incinerator hardware and fittings made of ferrous
metal. Important to builders and home purchasers
3




DEFENSE HOUSING AREAS
DEFENSE HOUSING PROJECTS WITHIN NORMAL COMMUTING DISTANCE FROM THE PLACES INDICATED ARE
ELIGIBLE FOR AN "A' PRIORITY RATING, EXCEPT WHERE FURTHER RESTRICTIONS ARE IMPOSED.

^Q

"**er

*««6s t o

*"«•«>>

{•SAN QjEcr,

•LIT^L0f>ARK

{

•^ACK£TTV(LLVANAN;^0ER0
VICTORIA

SEPTEMBER 22, 1941

in the Eastern Seaboard area is the provision that
housing in this section of the country, even if it
meets the other requirements for preferential treatment, will receive no priority ratings for oil burners.
PROCEDURE

UNDER

THE

PRIORITIES

SYSTEM

The Governor's Office of the Federal Home Loan
Bank Board has sent to all savings and loan associations in the country, members as well as nonmembers, a detailed outline of the procedure under
which applications for priority ratings will be processed. I t suffices here to say that applications,
after clearance through the local office of the Federal
Housing Administration, are to be submitted to the
local representative of the Defense Housing Coordinator and the Director of Priorities. If the application has proper clearance as to location, need, and
types and amounts of critical materials required in
construction, it is passed upon finally by the local
representative of the Director of Priorities who
alone has the right to issue priority certificates.
Assurances have been given that the clearance
through local FHA offices will be in no way conditioned upon or connected with mortgage insurance
by the Federal Housing Administration.
For privately financed defense housing construction, the preference rating is given to the builder.
The builder can extend the rating by executing a
copy and serving it on his suppliers who, in turn, can
extend the rating to their own suppliers in the same
fashion.
By the use of so-called "project ratings", the Division of Priorities can assign one rating which can be
used to secure delivery of critical materials included
in the list and which will go into any one defense
housing project.
Another provision, already reported in the R E VIEW, bears repetition because it governs largely the
type of housing provided under priority rules. A
price of $6,000 including land is to be the ceiling on
defense homes built under priority rules for sale, and
a monthly charge of $50 for shelter rent will be the
upper limit for units placed on the rental market.
These price limits, which will only in extreme circumstances be modified, apply not only to new structures but also to houses under construction on the
key date of September 1. Higher priced buildings,
even if located in defense areas, will generally fall
under the "civilian program," yet to be formulated.
Preference ratings will be granted only to construction designed for defense workers, and a list has
October 1941




been issued designating 275 areas in which defense
housing projects will receive " A " priority ratings.
I t is in these areas that residential construction in
the immediate future will be concentrated. The
places included in the locality list are shown on the
accompanying map.
PROBABLE

EFFECTS

ON

RESIDENTIAL

BUILDING

ACTIVITY AND MORTGAGE LENDING

The Office of Production Management has tentatively approved the granting of " A " priority
ratings to 200,000 privately financed family units
which qualify as defense housing, in addition to
100,000 family units financed by public funds. An
earlier estimate of defense requirements by the
Housing Coordinator placed the number of privately
financed dwelling units needed in defense areas for
the fiscal year 1942 at 400,000, plus 125,000 units to
be provided with public funds. The lower allotment by the OPM does not necessarily imply that
private activity in defense areas will be cut in half,
since its over-all allocation is for an unspecified
period and is subject to revision.
However, the proportions of public and private
construction envisaged under the priority system
presage a considerable shift toward publicly financed
building within the total. In the fiscal year ended
June 30, 1941, public housing accounted for 17 percent of the aggregate number of new nonfarm dwelling units built in the United States. Under priority
rules, one-third of the contemplated total for defense
areas is allocated to Government-sponsored housing.
Another type of shift will take place in the geographic distribution of residential building because
high preference ratings will be restricted to the designated defense areas—to the detriment of communities
in nondefense regions. Furthermore, the terms
under which priorities are granted will result in an
even greater preponderance of lower priced dwellings
than was noticeable during the past few years.
In addition to the probable reduction of private
building activity, therefore, housing priorities will
have considerable effect on the type and location of
housing to be produced during the emergency.
Difficulties in nondefense construction are certain
to increase. I t would be presumptuous, however, to
assume that nondefense construction will be entirely
impossible. Large quantities of basic building materials such as lumber, brick, and cement, not on
present critical lists, are available. These, plus
{Continued on p. llj)
5

SAVINGS AND LOAN ASSOCIATIONS—ON
THE AIR!
Radio advertising by savings and loan associations has almost doubled
in the past three years. Data from this year's Business Promotion
Survey and a special analysis of 29 institutions which reported "excellent" results from their 1940 radio campaigns provide new information
on this increasingly important phase of savings and loan business
promotion efforts.
•

Savings and loan advertising through the medium
of radio has continued to grow in the favor of
association officers and directors and, on the basis of
the most recent annual Business Promotion Survey,
approximately one out of every five member institutions is sponsoring various types of broadcasts. In
all, 278 associations reported spending almost
$300,000 for radio programs during 1940. Special
questionnaire returns from those institutions reporting "excellent" results of their radio advertising
indicate the types and other characteristics of programs which, in the opinion of executives, reveal the
reasons for their success.
A searching analysis of the combined experience of
the large group of savings and loan radio advertisers
makes it possible to separate and sift out many of the
factors which either singly or in combination contribute to the ultimate success of individual associations with radio advertising. Briefly, the elements
which branded the results of one series of programs as
"excellent" in contrast with others bringing "good",
"fair", or even "unsatisfactory" returns may be
summarized by the following generalizations:
—greater expenditures for radio, both in actual
dollars and in proportion to total advertising
expenditure;
—radio advertising used continuously over
longer periods of time throughout the year;
—greater number of broadcasts each week
during the course of the campaign;
—broadcasting at hours of the day when more
members of radio families are likely to be at
home and available for listening; and
—more infrequent use of spot announcements
and greater use of news programs or other
types of broadcasts requiring from 5 to 15
minutes of air-time per program.
This special analysis of radio advertising is, in
fact, one phase of the annual Business Promotion
Survey of the Public Relations Department. From
6




information released earlier on the results of this
Survey, we learned that 278 associations, or almost
22 percent of the 1,281 institutions which returned
the questionnaire forms, were using radio advertising
during 1940. However, for the purposes of this
current study it was felt advisable to eliminate those
associations which spent less than $100 for broadcasts: an arbitrary dividing line chosen because any
amount below $100 would be clearly insufficient for
giving this type of advertising an adequate trial.
After this, there remain 197 associations which
spent a total of $287,000 for radio programs during
1940—an average of almost $1,500 for each institution. This was equal to about one-quarter of their
total individual advertising expenditures amounting
to slightly more than $6,000 per association. I t is
interesting to note that this $6,000 average is more
than three times as large as the average individual
advertising expenditure for all institutions included
in the Business Promotion Survey.
Further confirmation of the fact that our present
group of 197 radio advertisers were among the most
active associations in respect to the development of
new business during 1940 is indicated by their higher
ratio of business promotion expenditures to gross
operating income. More than 4 percent of their
operating revenues was spent for advertising and promotional activity and this may be contrasted with a
ratio of 2.7 percent for all reporting institutions.
GENERAL CHARACTERISTICS OF 1940

PROGRAMS

To facilitate ferreting out those elements which
distinguish a highly productive radio series from one
resulting in only mediocre or poor response, the
schedules were classified on the basis of the quality
of results: those which reported "excellent" or "good"
response were designated as successful; those indicating only "fair" or "unsatisfactory" returns made
up the second or unsuccessful group; and the third
classification is made up of those institutions which
Federal Home Loan Bank Review

failed to register any opinion as to the merit of their
broadcasts.
The most pertinent characteristics of the radio
programs are summarized in the table on this page.
One important difference distinguishes this table
from the one presented in a similar form last year. 1
In our present study almost two out of every three
associations were included in the "successful" group,
whereas on the basis of 1939 expenditures somewhat
less than one-half of the radio users were in this
category. There seems to be little doubt, in view of
the relative constancy of most other items in the
1939 and 1940 reports, that this improvement of
indicated results comes about through the elimination
of those associations which spend less than $100 for
air-time during the year, and justifies to a large
extent the establishment of a minimum figure for a
fair test of radio advertising.
URBAN

TEN TYPICAL
URBAN FAMILIES

NUMBER HAVING

FIRST RADIO

RADIO

OWNERSHIP

If Iff ffflffffff
BBHBH flBBB

SECOND RADIO I X I B Q l
AUTO RADIO

H

from radio advertising during 1940. A splendid
response to this second query has now made it possible for all member associations to benefit by the
personal views of those managing officers who found
definite advantages in this type of business promotion.
As might have been expected, nearly all laid particular emphasis upon the regularity with which
their programs were produced—an essential characteristic for success regardless of the medium employed. As one executive expressed it, " W e feel
that it keeps our name before the public, and realize
that there is too large a portion of the people who are
not familiar with the services offered by savings and
loan associations."
Two associations in the Southwest section of the
country attributed their fine results to the definite
civic character of their radio programs. One of the
managing officers wrote, " O u r experience has convinced us that a program that has a definite public
service in it obtains a better reception than any other
class of program." This institution has just completed a summer series in the interest of safety on
the highways and in cities. This was a 30-minute
Characteristics of the 1940 radio programs of 197
savings and loan associations spending
$100 or more for radio during
the year

M

The American way of life definitely includes owning a radio, judging by statistics
which reveal that 9 out of 10 families living in American cities now possess one or
more radio sets. More than 1 out of 4 have two or more home sets; 1 out of 5 also
has an auto radio. Geographically, the highest concentration of ownership is
on the Pacific coast, and in the big cities. The bigger the community, the higher
the degree of radio ownership.

Characteristic

N u m b e r of associations

Once again it is evident that those associations
which reported satisfactory results from the use of
radio for promotional efforts spent more money,
devoted more of their total advertising expenditures,
ran longer campaigns, longer individual programs,
and produced them more frequently. All of this is
demonstrated b y the factual data in the table.
How

TO G E T EXCELLENT RESULTS AS TOLD BY
THOSE W H O Do

To get at the real story behind successful programs,
a special questionnaire was sent to each of the 29
executives who indicated having had excellent results
i See "Radio Advertising by Savings and Loan Associations/ FEDERAL
HOME LOAN BANK REVIEW, October 1940, page 2.

Ocfobzr 1941




All
reporting
associations

Classification b y results
Successful

UnsucN o t recessported
ful

116

66

15

Average expenditure for
radio during t h e year
$1, 458 $1, 992

$566

$1, 256

Ratio of radio advertising
to t o t a l association a d vertising expense_
Average duration of t h e
campaign
Average length
gram _

. 197

24.3%

28. 4 % 14. 6 % 16. 4 %

•35. 1
weeks

41. 2
weeks

24.4
weeks

31. 2
weeks

8.9
min.

9.3
min.

6. 9
min.

11. 9
min.

of pro-

Weekly frequency:
Percent having programs 5 or more days
per week
Percent having p r o grams once a week

44. 7 % 47. 1 % 38. 1 % 5 0 . 0 %
35. 1 % 30. 6 % 4 7 . 3 %

25.0%

presentation on Sunday afternoon and received the
approbation of the State Highway Patrol Service as
well as local civic groups, resulting in a considerable
amount of favorable publicity for the association.
Another institution relates the success which it has
had with a 15-minute biographical sketch of some
prominent citizen "who has contributed much of his
time and money to the development of our city."
News broadcasts are so much in demand today
that by many a definition they would also be classed
as a public service. Six out of the 29 associations
reporting excellent results were using this type of
program. "We have found," writes the secretary of
a Northwestern Ohio association, "after using both
transcribed programs and news that, at the present
time, a daily news broadcast creates the best audience
for the amount of money that we are able to spend.
We have tried to locate our news broadcast as close
to a national hook-up as possible and to limit the time
to five minutes. This gives us an opening and closing

commercial with about four minutes of outstanding
news. . . . "
Tying in local script with outstanding national
programs is, of course, a highly desirable element in
the use of spot announcements and several executives
corroborated the advantage of a time just prior to a
nation-wide news broadcast. The advertising agent
for an Oregon association says, "We pick our time
with great care and are particularly happy about the
time at 9 P. M. preceding a very popular 15-minute
newscast." Unfortunately, most other radio advertisers are also aware of the desirability of these
spots, and an association just starting out in announcements of this type may not be able to secure
such periods because of previous commitments by
the station.
One other type of program apparently has splendid
opportunities for success in spite of the limited
areas for its application. Judging from the experience
of two Midwestern institutions, foreign language

Facts from the Files on Radio Advertising
Radio is by far the most measured of all advertising media. I t has been subjected to research
calipers almost continuously from its inception and as a result much is known about the economic and
social habits of the listening public.
Nine out of ten families living in American cities now own one or more radio sets, and 98.5 percent of these families have their sets in working order ready to turn on. More than 1 out of 4 families
have two or more home sets; 1 out of 5 also has an auto radio. Significantly, 99.5 percent of the
high-income urban families own radios. Even more significant, however, is the fact that more than
3 out of 4 low-income families own radios, and that 6.3 percent of these low-income radio owners have
two or more sets.
Intensive study has established the fact that 17 out of every 20 radio families in American cities
listen sometime during each day. Apparently the economic status of the family has little effect
on their habit of turning to the radio, for one percentage point covers the spread between the
top and lowest "economic-thirds." Furthermore, income also has little effect on how much they
listen each day.
A more important influence on the use of the radio is the size of the community in which the
family lives. Generally speaking, the smaller the community, the greater the percentage of families
who listen sometime during the day. As for the amount of listening, it is greatest in medium-sized
communities, with small towns taking a close second. But even in cities over 250,000 population,
set-using families average 4 hours and 33 minutes a day listening to the radio!
—Condensed from the study of the broadcasting industry conducted by
Crossley, Incorporated. Published March 1941 by the National Association of Broadcasters.

8




Federal Home Loan Bank Review

broadcasts can accomplish a specific objective in
reaching a particular portion of a city's population
which is a logical prospect for the services of the
association arranging for the program. One of these
associations broadcasts in Polish, the other in Lithuanian, but both are agreed that the results have been
highly satisfactory in acquainting listeners with the
facilities of their institutions.
CHECKING ON THE QUALITY OF R E S U L T S

One of the specific inquiries on the special questionnaire was directed toward methods of verifying the
results from radio advertising. From the standpoint
of advertising technique, it is evidence of a sound
basic approach to business promotion efforts to discover that a substantial number of these 29 institutions were making direct and effective checks on the
productiveness of their broadcast periods.
One association in Texas reports that it has on
several occasions made a survey of the listening
audience in its city by using a number of persons on
the telephone who call assigned numbers and ask
the person who answers if he or she has been listening
to the radio, and if so, to what program. And they
added, "We were surprised to find such good
results!"
Another institution related that, "We have tested
our audience by offering small cardboard banks to
the listeners upon receipt of a written request. We
had over 300 requests for banks through one broadcast." Still another writes, "Nearly every new
customer mentions hearing our association on the air.
We have accounts from Maracaibo, Venezuela, to
Vancouver, British Columbia; in 154 towns in our
State and in 15 neighboring States, and three foreign
countries—all of which have been brought in through
the radio."
Some idea of the lasting qualities of a particular
program may be gathered from the statement made
recently by the secretary of a Southern association
who says, "We still have folks come in and say that
they heard us on the radio last winter."
Perhaps the most common way of verifying the results of radio advertising—as well as any other business promotion program—is embodied in a plan which
requires all officers and personnel permitted to receive savings and investment accounts to ask each
new investor what prompted him or her to make the
investment in that association. This naturally provides a complete record of the effectiveness of each
medium which the institution is using.




On the basis of the special analyses of radio advertising by savings and loan associations conducted
during the last two years, there are certain broad
generalizations which can logically be made. If an
association is to be successful with radio advertising,
it requires careful consideration of several factors in
advance of money expenditure.
First of all, an association should be so situated
as to have at its disposal in its locality first-class
means of radio communication in a technical sense.
Then, the association should be convinced of the
necessity of continuing its broadcasts over a period
sufficiently long to gain some cumulative effect,
choose the type of program that will appeal not so
much to the general public as to the most logical
market for the specialized services it has to offer.
Next, it should make certain that the individual
broadcast time is fully adequate for this type of
program; that the broadcast takes place frequently
enough to avoid losing the momentum previously
gained; and that it is scheduled for those days of the
week and hours of the day when most savings and
loan prospects are likely to be at home or in their cars
and available for listening.
And finally, and by no means the least important
point for an association to consider, is to arrange
some method—the simpler the better—by means of
which both inquiries and new clientele originating
directly or indirectly from the radio advertising can be
definitely accredited to this medium and whereby, at
suitable periods, a definite relationship can be easily
established between the number and quality of results and the radio expenditures. Such data are not
only valuable in gauging the progress of the radio
campaign from week to week and month to month,
but after the first year provide a yard stick of accurate experience which will prove most helpful in
planning and judging future radio activity.

Appointment of Public Interest Director
•

T H E appointment of Mr. John Phillips as
Public Interest Director of the Federal Home
Loan Bank of Little Rock was recently announced.
Mr. Phillips, who will serve the unexpired portion
of a four-year term ending December 31, 1942, retired some time ago from the cotton brokerage firm
of Goodlette & Company in Memphis, Tennessee,
and now resides in Lake Providence, Louisiana.
9

October 1941
418450—43

BASIC CONCLUSIONS

2

«

«

FROM THE MONTH'S NEWS

REMINISCENT: " H o u s i n g is a commodity
of universal use, t h e supply of which
cannot speedily be increased. Despite
t h e steps t a k e n to assure a d e q u a t e housing
for defense, we are already confronted
with rent increases ominously reminiscent
of those which prevailed during t h e
World War. This is a development t h a t
m u s t be arrested before r e n t profiteering
can develop t o increase t h e cost of living
a n d to damage t h e civilian m o r a l e . "
President Franklin D. Roosevelt, Message to Congress,
July 31, 1941.

DEFENSE BONDS: "The purchase of defense bonds for the portfolios of our own
institutions is an important responsibility
because of the great need for having as
large a volume of these government
issues as possible absorbed by other than
the commercial banking institutions,
that is, out of saved funds, either individual or institutional."
Paul Endicott, American Savings and Loan News, August
1941.

OBJECTIVE: "It is an avowed governmental aim that the national emergency
shall not become a source of private
enrichment. As far as business is concerned, this aim is being pursued with a
thoroughness that leaves little room for
doubt as to its broad realization."

THE TEST: "What is sure is that we have
now really said goodbye to business as
usual, and that we are entering upon a
period of most unusual business, characterized by shortages for civilian use of
all sorts of things that we are accustomed
to have and to get without worrying
about them. Perhaps these may not
prove to be the times that try men's
souls, but they are surely going to be
times that will try and will test American
patriotism."
Business Bulletin, Cleveland
Trust Company, July 15,1941.

10




»

" W e have been talking about inflation for a long time as if it were
a threat remote from our daily lives. I t is a distant threat no longer.
We are facing it now, and we must deal with it at once. If we are
selfish or shortsighted in facing this issue, the consequences mayhaunt us and our children for years. But if we look at the problem
with clear vision and firm resolve, we can beat this thing."
The Hon. Henry A. Morgenthau,
Jr., Secretary of the Treasury,
Sept. 9, 1941.

The responsibilities of victory

" We must not fail this time as we failed after 1918. The responsibilities of victory are far greater than those of defeat. If we had
honestly assumed those responsibilities in 1919 there would have
been no need for 1939 or for the long arduous years which we now
face. Our way of life, our conceptions of government must offer
more, spiritually and materially, than any competing system now
and in the future. . . . We shall have in this hemisphere the greatest manufacturing plant the world has ever seen. . . . The utilization of that tremendous productive capacity is a problem and an
opportunity—an opportunity to create more and more customers
as well as more and more products."
Wayne Chatfield Taylor, Under
Secretary of Commerce, Sept. 17,
1941.

PROGRESS ^OF CREDIT UNIONS, 1936-1940
NUMBER

Abner H. Ferguson, Freehold,
August 1941.

»

Inflation threatens

The Guaranty Survey, Aug. 25,
1941.

REHABILITATION: " T h i s m a t t e r of t h e
rehabilitation of these blighted areas is
so all i m p o r t a n t t h a t future appraisals
of this generation m a y be measured by
t h e m a n n e r in which we deal with it.
E v e n if it takes decades to finish t h e job
properly we shall have accomplished m u c h
if we only m a k e a sound s t a r t . "

»

MEMBERSHIP

3.0]

r

W,FEDERAL-]-^IV/»u A DTrornl

l/V/l

111

1

2.5

LOANS MADE

300

1

UJ2.0

a
s

IP

360

& 13
•J
d 1.0
2

as

1936

1938

1940

1936

(938

1940

1936

H i l l 1P40

Source:- U& Department of Labor
The chart above presents the growth of credit unions in number, membership, and amount of loans in
the years 1936 through 1940. Both State and Federally-chartered unions have participated in the rapid
expansion during the past five years although growth of the latter has far exceeded that of the State institutions in the period. Total share capital at the end of 1940 amounted to nearly $212,000,000.
Monthly Labor Review, August 1941.

Fee/era/ Home Loan Bank Review

SAVINGS RISE IN VOLUME AND SIGNIFICANCE
The Federal

Home Loan Bank Board's statistics on long-term

in selected types of institutions and investments indicate
ing business activity

increas-

and larger family incomes have resulted in a rising

volume of funds set aside for a "rainy
importance

that

savings

day/9

This is of

in view of the defense savings campaign

particular

which, in turn,

is giving new emphasis to the soundness of thrift.

•

T H E philosophy of thrift, the basis on which
savings and loan associations were founded and
have been operating for 110 years, has assumed new
significance since the United States launched its
gigantic armament program. The prosecution of
this program calls for a maximum volume of savings
to aid in the financing of war production which is
making this country " t h e arsenal of democracy/'
and to avert the danger of inflation, the bogey of
the past seven or eight years, which is now becoming
a real threat.
Individual consumer incomes have been increasing
rapidly as a result of the defense effort. If all of this
money were spent for current purchases at the same
time that the urgent need for defense materials exerts
pressure on our productive capacity, demand would
outstrip supply, a vicious spiral of price increases
would be set in motion, and a serious inflation would
be sure to engulf our economic system. Along with
other measures, the absorption of a growing portion
of consumers' purchasing power through savings is
one of the foremost methods of avoiding runaway
prices, and the Treasury, by embarking on its savings
campaign, has lost no time in applying this method.
N E W EMPHASIS ON T H R I F T

The new emphasis on savings may be of great
long-range importance to savings and loan associations because it will help to make the mass of the
people more thrift-minded. Moreover, savings and
loan associations, as trustee institutions whose main
business activity is the management and investment
of billions of dollars accumulated by small savers,
have a vital stake in the combat against inflationary
tendencies. While it is true that no group in the
Nation profits from inflation in the long run except
the "three horsemen, the speculator, the profiteer,
and the hoarder/' it is equally true that the saver and
the mortgage-holder are among those who would
suffer most from excessive price increases because
October 1941




This chart illustrates the unusually steady upward trend in the total volume
of long-term savings represented by life insurance policies, savings deposits in
banks, private capital in savings and loan associations, United States savings
bonds, and postal savings. Within the past two decades the aggregate of these
types of savings has almost trebled in volume.

their claims are fixed in terms of the dollar regardless
of the dollar's buying power. In addition to the
patriotic motive that impels them to do their utmost
in the promotion of the defense savings campaign,
savings and loan associations have, therefore, an
added incentive to help make the Treasury program
a success.
In view of the topical importance of thrift at the
present time, current data on the volume of savings
are particularly pertinent because they may give at
least some indication of the Nation's capacity to save.
The Federal Home Loan Bank Board has for several
years compiled statistics on private long-term savings
accumulated in certain types of institutions and investments which serve as the main reservoirs of
thrift for the average individual saver. These
statistics include savings in banks, savings and loan
associations, life insurance policies, postal savings,
and United States savings bonds. Although they
do not claim to comprise all savings, these compilations are a guide in measuring the year-to-year
trends in those types of savings which the present
Treasury program attempts primarily to tap.
I!

P E A K VOLUME OF PRIVATE SAVINGS IN

1940

The 1940 gain in savings represented by investments in savings and loan associations, life insurance
policies, savings deposits in banks, postal savings,
and United States savings bonds was $3,500,000,000—the largest annual net increase in the past
decade and an all-time high with the exception of the
boom years of 1925 and 1926. This brought the
total volume of funds accumulated in these types
of institutions and investments to $58,000,000,000.
The net growth in 1940 represents a rise of almost
15 percent over the 1939 figure of $3,000,000,000,
reflecting the higher pitch of business activity, larger
employment, and increasing family incomes as the
defense program got under way. Comparing 1940
with 1938, the increment during the past year in
these types of savings was as much as 75 percent in
excess of the gain recorded two years ago, illustrating
the well-known fact that savings increase more than
proportionately when national income is on the
upgrade.
Of the $3,500,000,000 gain in savings during 1940,
life insurance companies accounted for $1,644,000,000
and United States savings bonds for almost a full
billion. Insured commercial banks which are re-

sponsible for the overwhelming proportion of savings
deposits in all commercial banks gained $440,000,000;
savings and loan associations, $221,000,000; and
mutual savings banks, $137,000,000. Changes in
postal savings accounts were insignificant.
On a percentage basis the rise in outstanding
United States savings bonds was once again the
largest, 45 percent. The second largest percentage
increase was scored by life insurance companies
which gained 7 percent. Savings and loan associations held third rank with a 5-percent rise. Insured
commercial banks, postal savings, and mutual savings
banks followed in that order.

PERCENT CHANGE OF PRIVATE INVESTMENT
IN SAVINGS AND LOAN ASSOCIATIONS
BY CLASS OF ASSOCIATION-CALENDAR YEAR 1940
% DECREASE
10
5
O

PERCENT
5
10

INCREASE
15
20

25

ALL MEMBERS

FEDERALS

INSURED-STATE

NONINSURED-STATE

Table 7.—Private long-term savings in 1940
NONMEMBERS

[Amounts are shown in millions of dollars]
Change
T y p e of savings

Dec. 3 1 , Dec. 31,
1939
1940

Dollars

Percent

7.0
Life insurance companies 1
$25, 025 $ 2 3 , 3 8 1 $1, 644|
440|
3.5
I n s u r e d commercial b a n k s 2 __ 13, 062 12, 622
3
137
1.3
10, 618 1 0 , 4 8 1
M u t u a l savings b a n k s
Savings a n d loan associa4
221
4, 412
4, 633
5.0
tions
2,209
986
3, 195
44. 6
U n i t e d S t a t e s savings b o n d s 5 _
6
1, 342
2. 1
1,315
27
P o s t a l savings
90
- 3 -3.3
2y2% P o s t a l Savings b o n d s 7_
87
Totals

57, 962 54, 510 3, 452

6.3

i Estimated accumulated savings in U. S. life insurance companies. Represents
reserves plus unpaid dividends and surplus to policyholders, except that deduction is made of policy notes and loans and net deferred and unpaid premiums.
Source:
Spectator Life Insurance Year Book.
2
Deposits evidenced by savings passbooks. Assets and Liabilities of Insured
Commercial Banks, reports of FDIC.
3 Deposits. Source: The Month's Work, published by National Association of
Mutual Savings Banks.
* Estimated private investments in operating savings and loan associations,
including deposits, investment securities, guaranty stock, and shares pledged
against mortgage loans. Source: Federal Home Loan Bank Board. The 1939
figure is revised. The 1940 figure is preliminary.
5 Current redemption value. Source: Treasury Daily Statement.
6
Balance to credit of depositors. Source: Post Office Department.
7
Source: Treasury Daily Statement. Excludes such bonds held by the Postal
Savings
System.
8
Does not include savings invested in credit unions, uninsured commercial
banks, trust funds, and other miscellaneous, unclassified sources.

12




The 5-percent increase in private savings invested in savings and loan associations during 1940 was the net result of markedly different trends in the various
classes of institutions. Foremost among these trends, which are indicated in the
above chart, is the 10-percent gain of member associations of the Federal Home
Loan Bank System compared with a 10-percent decline registered by nonmember associations.

Within the savings and loan industry, the trends
in private savings again showed substantial variations among the various classes of institutions, as
indicated in the chart on this page. Member institutions of the Federal Home Loan Bank System,
which includes the large majority of active operating
associations, increased their private resources by
$335,000,000, or more than 10 percent, during the
year. I n contrast, private investments in nonmember savings and loan associations declined
$120,000,000, or close to 10 percent. Within the
membership of the Bank System, Federal savings
and loan associations continued to show the most
rapid growth, adding $270,000,000, or almost 24
percent, to their private capital during 1940. Statechartered insured associations registered a good
Federal Home Loan Bank Review

increase of approximately 15 percent, while uninsured State members experienced a decline of over
3 percent in private capital.
SHIFTS IN THE F I R S T S I X M O N T H S OF

Table 2.—Net changes in selected types of private
long-term savings.l
[First six months of 1941 compared with same period in 1940]
[Thousands of dollars]
1941

2
United States savings bonds
$797, 302
Insured savings and loan associations.. 247, 672
Insured commercial banks
44, 707
Postal savings
-2,427
Mutual savings banks
-11,535

1940
$695, 819
208, 627
132, 325
14, 000
109, 153

1
For sources, see Table 1. Insured savings and loan associations: Private
repurchasable capital as reported to the Federal Home Loan Bank Board.
2 From May: Defense Savings Bonds, Series E.

United States savings bonds outstanding recorded
the largest dollar increase during the first six months
of the current year—$797,000,000—which is in part
due to the results of the defense savings campaign
begun in May 1941. This figure was more than
$100,000,000 in excess of the funds invested in this
popular type of Government bond during the first
half of 1940.1 Current sales of defense savings
bonds Series E continue to be far in excess of sales
of " b a b y bonds" in comparable periods of 1940.
For the first five months of the defense savings
drive, from May through September, Treasury cash
1
Of the three series of defense savings bonds issued since May, only Series E is
included in this article. Series F and G are primarily designed for institutional
and large individual investors and are therefore not in the same category as the
types of savings included in the Bank Board's regular statistics.

Octobzr 1941




ALL INSURED SAVINGS AND LOAN ASSOCIATIONS
Comparison of first 6 months of 1940 and 1941

1941

Savings statistics for the first six months of 1941,
while incomplete, reveal several significant shifts
among the various types of institutions and investments. Savings deposits in mutual savings banks
and postal savings showed small declines in contrast
to the gains registered in the corresponding period
of 1940. Private capital invested in insured savings
and loan associations rose $247,672,000, a gain of
almost $40,000,000 over the increase shown for the
same period of last year. Savings deposits in
insured commercial banks increased almost $45,000,000 but this was considerably below the figure for
the first six months of 1940. Sales of life insurance
policies, as reported by the Life Insurance Sales
Research Bureau, were somewhat above the volume
for the first six months of 1940.

Type of savings

RATIO OF REPURCHASES TO NEW INVESTMENTS

The repurchase ratio represents the percentage of new investments absorbed
by repurchases during each monthly period. With the exception of June, the
repurchase ratio during the first 6 months of 1941 was higher than in the corresponding period last year. The shaded bars indicate repurchase ratios in 1941,
and the dotted bars show those for 1940.

receipts from sales of Series E bonds totaled
$572,216,000 compared with sales of " b a b y bonds"
in the amount of $287,345,000 during the same interval of 1940.
With the intensification of the defense savings
campaign necessitated by the ever-widening scope
of the defense effort, an increasing proportion of
individual savings will undoubtedly be siphoned into
Treasury coffers, but at the same time the total
volume of savings is likely to expand further so long
as unemployed go back to work and national income
rises. As a result, the flow of savings into private
institutions may be expected to continue on a reasonably high level along with mounting purchases of
defense bonds by the public, although the various
types of institutions may be affected in different
ways. As an antidote against inflation, any savings
process has, of course, an important function in our
present economic situation.
R E C E N T E X P E R I E N C E OF SAVINGS AND LOAN
ASSOCIATIONS

Thus far savings and loan associations have
experienced but little change in the operation of
their capital accounts, to judge from the monthly
over-all statistics available for insured institutions.
Comparing the first six months of 1940 and 1941,
new investments in these institutions showed con13

sistent growth. As would be expected, repurchases
were likewise up as the volume of private capital
outstanding increased. The ratio of repurchases
to new investments, however, was about 10 percent
higher in the first half of 1941 than in the corresponding interval of 1940.
During the first half of the current year, 57 percent
of the new money received by insured associations
was absorbed by repurchases, while in the corresponding period of 1940 repurchases were equivalent to
approximately 53 percent of new investments. In
each of the first six months during this year, with
the exception of June, the ratio of repurchases to
new investments was higher than in the corresponding month of 1940. The differentials are not large
enough t o . permit any general conclusion, but the
capital accounts of savings and loan associations will
bear close scrutiny in the coming months for indications of a change in the flow of funds into and out
of these institutions, which may guide executives in
their operating policies.

A Med ium for Customer Contacts
•

SAVINGS and loan executives are constantly
on the lookout for new and different media to
use in public relations work with new prospects and
existing members. Recently, the National Association of Housing Officials and the American Public
Health Association have assembled a comprehensive
collection of pamphlets and publications which might
easily be the basis for a highly useful gift especially
for new borrowers or for loan prospects.
The collection, known as the "Tenants' Homemaking Library," is made up of more than 35 individual publications and an extensive list of supple-




mentary references. Twenty-eight of the pamphlets
have been prepared by experts of the Department
of Agriculture and the Department of Labor, and
the remainder by private companies. Among the
subjects included in the portfolio are: the physical
upkeep of the home; purchase and use of household
textiles; food and family budgeting; control of insects; preventing accidents and fire; first aid and care
of the sick; child care and guidance; and recreation.
The entire cost of assembling a library such as the
one pictured below is estimated at approximately
$2.00. A complete list of the publications and their
cost may be obtained from the National Association
of Housing Officials, Chicago, Illinois.

Housing Priorities
(Continued from p. 5)
economies in the use of scarce materials and a wider
utilization of acceptable substitutes, may make it
possible to maintain at least a minimum volume of
needed construction in nondefense areas.
If the imposition of priorities should temporarily
cripple nondefense housing, home-financing institutions will to some extent find other investment outlets in the various types of nonconstruction loans
which have always absorbed a large portion of their
total lending volume. In addition to home-purchase
and refinancing mortgages, lending for reconditioning and alterations may obtain a major place in
their loan programs. By cultivating this class of
loans they will not only help to make additional
housing units available in defense areas at small cost,
but will perform a useful service in the improvement
of the communities in which they operate.
With the slowing up of new construction lending,
many institutions will have a fine opportunity to
solidify their position and to prepare for the inevitable adjustments which lie ahead. They can clean
out their real-estate accounts and strengthen their
reserve position. Such actions may lack the thrill
and enthusiasm of rapid expansion but they will be
a substantial contribution to the soundness of thrift
institutions.
In the meantime, the restriction of normal residential building activity may tend to store up a
reservoir of housing demand which will help to
bridge the gap when war production can be permitted
to stop and consumers once more will be free to satisfy their needs without restraint. Then, housing
will again occupy its place as one of the foremost
peace-time industries.
Federal Home Loan Bank Review

CENTRALIZED APPRAISALS AS A LENDING
SAFEGUARD
Six years ago, savings and loan associations in New Orleans started
a novel enterprise in the field of appraisal practices. They established a Central Appraisal Bureau as a means of assuring adherence
to uniformly sound real estate valuations. A discussion of the background, organization, and experience of this institution provides food
for thought for executives in other communities.
•

ONE cornerstone of successful operation in the
savings and loan industry is the proper evaluation of the security underlying mortgage loans.
Shifts from the mortgage loan account to that labelled
"Real Estate Owned/' and losses in the sale of
foreclosed properties, may well have their origin in
hasty and faulty appraisals, or in overvaluations
prompted by loan competition. Turning this observation to constructive use, savings and loan associations in New Orleans six years ago devised a new
method of tackling the appraisal problem. They
divorced the making of appraisals from individual
association management and turned this vital and
highly specialized service over to a central bureau,
organized and operated by the local associations
for the sole purpose of performing the appraisal
function.
Successful operation of the Central Appraisal
Bureau in New Orleans over a number of years
suggests that this method may advantageously be
studied by savings and loan executives in other
communities. Despite many improvements in appraisal technique, and although "curbstone" valuations by association appraisal committees have
largely been replaced by the employment of professional appraisers, the problem of finding a sound,
completely unbiased basis for appraisals remains ever
present. Likewise, it would be presumptuous to
assert that competition has entirely ceased to enter
into the making of appraisals, and any step which
would help to prevent the recurrence of disagreeable
experiences in the past deserves scrutiny by those
guiding the policies of thrift and home-financing
institutions. This is particularly applicable at the
present time when mortgage lenders and appraisers
are faced with the vexing problem whether to ignore
or account for increasing building costs and a generally rising market in current valuations of real
property.
October 1941




BASIC

THOUGHTS B E H I N D THE N E W
CENTRAL APPRAISAL B U R E A U

ORLEANS

The Central Appraisal Bureau in New Orleans
was organized in August 1935 in the wake of a
community-wide savings and loan rehabilitation
program conducted by the State supervisory authority with the cooperation of the Federal Savings and
Loan Insurance Corporation. This program provided for a broad solution of the savings and loan
problems in the community by mergers, reorganizations, liquidation of weak institutions, and eventual
insurance of accounts for all remaining operating
associations.
However, probing the factors which were responsible for the need for such a program, leaders in this
community singled out faulty appraisal policies
which resulted in overlending as one major cause of
the weaknesses brought to light during the depression, and they set out to remedy this situation.
By detaching the process of appraising real estate
security from management where it might be subjected to extrinsic influences, they attempted to
minimize the effects of "loan shopping" and "loan
competition" on property valuations and to arrive
at uniformly sound appraisals as a basis for mortgage
lending. Behind this plan was, of course, the realization of the fact that unsound appraisal practices of
only one or a few associations may well jeopardize
the position of the other local institutions and eventually destroy all the benefits reaped from the community program.
ESTABLISHMENT OF THE BUREAU

The Central Appraisal Bureau began operation
immediately following the insurance of accounts of
13 savings and loan or "homestead" associations.
The membership today consists of 32 institutions,
including every operating association in the city.
\S

APPRAISEMENT
NAME OF ASSN.

„..

stabilizing regulations. As a practical matter, the
success of the Bureau is undoubtedly due in part
to the support which it has received from the State
supervisory authorities.
The initial membership fees in the Bureau were
based on asset size and ranged from $25 for associations having assets of $300,000 or less to $300 for
those with assets of $3,000,000 or more. Monthly
membership fees today, based also on asset size, run
from $5 to $10. I n addition to these costs, fees
ranging from $5 to $15 are charged for t h e individual appraisals.

REQUEST
Ma

New Orleans, La.,

13

y

»

To CENTRAL A P P R A I S A L BUREAU

25500

Dear Sirs:—Please visit and appraise, at or e the property below described:
APPOINTMENT.....

___

J

..1715 A. Street

L
Rpinir

!

Measuring
Lot depth

m
m

43
ft. front o
11? ft., front on ...r.

Institutional I

residential |

I ooed F T " !

populated sparsely \_ m
persons of low |

\ local shopping center

. I apartment |
J PO°r I

fair

1 medii

I trend-down |

X_j "built up I I

j middle f

high |

I

I rooming house
|

J oood I

4 . STREET

T I garage I

Zone |.

I gravel l x

Quality-paved I I

6. P U B L I C U T I L I T I E S

9. REPAIRS NECESSARY

I

x l quality frame ~|

I

I mud I

I curbing I

1 gas [ X

I

I electricity 1

* 1 telephone

P H

One-story frame single contains 4 rooms and bath.

per

Vacant will rent for I $

12. LOT SIZE

| new I

j

| Estimated | $ 37.50er
I per I

Pfl 110

mo.

|

I

Readily salable l~X~l slow I

43

«3
>

None- new house

Rented, actual I $

11. MARKETABILITY

I below I

The following items affect the value of property

8. DESCRIPTION OF PROPERTY

REVENUE

| remodeled I

I mud I

I brick |

Sewer 1 X I water I X

7. U N D E S I R A B L E FACTORS

10.

I old I

above IL
II above

-rl Distance from adjacent bldgs. f

Quality-paved I

5. S I D E W A L K

OUTLINE OF THE PROCEDURE

I inhabited by;

1 class.

o others in neighborhood,
neighborhood, favorable
favorable II X
I

driveway I

, r»

CERTIFICATE OF APPRAISEMENT

transportation lines I 3 bj~l schools 15 b l
NEIGHBORHOOD

St
erected thereon being

-dwelling, containing
*
rooms with outbuildings. The same is now occupied by
•jaaaat at a monthly rental of$

:e to city center I Stall

2.

St.

I difficult I

I

| Value I $ 7W.W |

13.

V A L U E As is 1$ 4 3 5 0 . 0 0

14.

LOAN AMOUNT A N D TERM RECOMMENDED

I if repaired 1$

1
Amount I

Rfl

% I term I

20

[years.

15. OTHER RECOMMENDATIONS

Date of this report

May 1 4 ,

1941

Q

•

^

^lyL^rUji

Although the organization was originally established by the voluntary agreement of the participants,
its permanency and effectiveness were strengthened
by the enactment of a statute in 1936 which authorizes the State supervisory authority to have any
real estate mortgaged or owned by an association
evaluated by appraisers selected by the Bank
Commissioner and paid for by the institution.
In addition, the law of Louisiana stipulates that
homestead and building and loan associations are
authorized to make loans only under such plans as
are approved b y the State banking department.
Since the department will not approve any lending
plan unless it provides that no loan will be granted
for an amount in excess of 80 percent of the value of
the property as determined by the Central Appraisal
Bureau, the investing public is aware that every
association in the city is operating under these
16




The services of the Bureau are available only to
member institutions. T h e members are required
(1) to obtain its appraisal of every property submitted
to the association as collateral for a loan, (2) to submit all plans and specifications of new building for
appraisal and approval, (3) not to make a loan for a
term longer than twenty years, (4) nor in excess of
80 percent of the determined appraisal value of the
property.
Upon receiving an application for a loan on an
existing structure, the association transmits a request
in duplicate for the appraisal. The form forwarded
contains the municipal number of the property
offered as collateral, indications of area and boundaries, type of existing improvements, type of occupancy, and present monthly rent. The request is
given a file number by the Bureau and the forms are
processed thereafter b y number. T h e appraiser
making the valuation, for obvious reasons, h a s no
knowledge of the identity of the association or the
loan applicant.
Following the initial valuation, the information
and recommendations gathered are given to a
second technician who revisits the property, checks
the original appraisal, and recommends approval or
disapproval of the data and values contained therein.
The appraisal system itself has been developed along
the lines of HOLC practices. The forms used,
excerpts of which appear in the accompanying illustrations, have been formulated b y the Bureau's
personnel and are approved b y some of the best
authorities in the United States as outstanding in
the appraisal field.
Should an appraisal made b y the Bureau be contested by the member association, it is submitted
to the manager for further review and inspection.
If this does not prove satisfactory to the applicant,
Federal Home Loan Bank Review

the management committee may submit the appraisal
to a fee appraiser at the expense of the member association. To qualify as an arbitrator, an appraiser
must be a member of the American Institute of Real
Estate Appraisers. Since the inception of the
Bureau less than 20 appraisals have been contested
and of these, only two-thirds were altered in any way.
In no case was the value revised more than 10 percent.
LOANS FOR N E W CONSTRUCTION

In the case of applications for loans to finance new
construction, the applicant is required to furnish
complete plans and specifications which are sent to
the Bureau with the usual forms. Upon receipt,
these plans are checked to determine whether the
proposed construction is properly designed from the
standpoint of structure, zoning, and building code
requirements. The site is appraised and recommendation made as to the suitability of the particular
design for the location. The plan is then analyzed
for determination of costs.
Construction supervision is also available from the
organization. Offered to home purchasers through the
medium of members, supervision of the erection as
it progresses is supplied at a cost of 1 percent of the
contract price. The Bureau is authorized to supervise construction of homes built under the Registered Home Service of the Federal Home Loan
Bank Board. One of the reasons why this supervisory service was introduced by the Bureau was
to secure more sound collateral for loans members
might be called upon to make at some future date.

Daily calls are made to the Office of the Recorder
of Conveyances and all sales and leases are noted
in the office records.
The operations of the office are handled by a
manager, assistant, statistician, seven appraisers,
and a clerical staff. Three savings and loan executives elected by and from the membership serve as
a board, on a rotating basis, employing personnel,
handling complaints, and establishing general policies
of the organization. Appraisers employed by the
Bureau are required to have educational backgrounds
in architecture or engineering and to work first as
statisticians, then to accompany senior appraisers
until they are thoroughly trained in evaluation
methods after which they become junior and finally
senior appraisers. Junior appraisers now trained
are required to attend yearly courses of the American
Institute of Real Estate Appraisers.

PHYSICAL ORGANIZATION AND FACILITIES

The equipment of the organization indicates the
comprehensive coverage the Bureau has of real
estate values in New Orleans. Included in its files
are appraisals and supplementary data on 34,600
pieces of real estate representing a value in labor
alone of $125,000. A map of the city, scaled 150
feet to the inch and mounted on plywood, aids
greatly in the valuations. Symbols on each plot
indicate data filed concerning its sale and lease
record, mortgages recorded, and previous appraisals
made. Other maps detail area, type, and outline of
construction on all lots throughout the city, average
annual income by block, zoning regulations, and
location of transportation lines, surfaced streets,
churches, schools, and shopping centers. Perusal of
the maps discloses whether or not comparative data
for any specific appraisal are on hand in the files.
October 1941
418450—41—2




17

E X P E R I E N C E TO D A T E

The general reaction to the New Orleans program
has been exceedingly good. Behind it, of course, is
the feeling that the institutions are using tools
designed to correct the particular problems with
which they had been confronted in the past. Confidence in the savings and loan program itself has
therefore been strengthened. Shareholders feel their
funds are invested in loans on properties appraised
by a capable agency which is not subject to outside
influences, having no contact with the borrower and
approaching the entire appraisal process in an
unbiased manner.
The public in general recognizes the advantages
of the Bureau as a reliable evaluator of property.
Many prospective home purchasers will not enter
contracts unless the property is appraised by the
Central Appraisal Bureau. Until a recent ruling
that loan applicants be not given the appraisal
figures, a number of home buyers in the city applied
for loans with member associations, paid the appraisal fees, and went no further with their applications after obtaining the Bureau evaluations which
they used solely as standards of value for the purchase and independent financing of the property.
There have been several instances where an
excessive price for a piece of property was voluntarily
reduced by the vendor after a Bureau appraisal
which rendered the purchaser unable to obtain a
loan from an association sufficient to finance the
purchase of the property.
Contractors erecting structures which are subject
to valuations by the organization are in general
agreement with its work since a stabilized operation
of the associations benefits the entire buildingindustry. For this reason, they appreciate the
importance of the Appraisal Bureau despite the
general tendency on the part of contractors everywhere to elicit liberal evaluations.

Consolidated Annual Report of British
Buildi ng Societies
•

T H E official summary of 1940 operations of the
British Building Societies, published in the July
issue of the "Building Societies' Gazette" confirms
the observations made on a sample basis in the April
R E V I E W , page 223. On the whole, the consolidated
statement of these institutions for the year 1940
shows a remarkable stability in the face of grim
wartime conditions,
\l




The greatest divergence from normal operations is
found in the volume of new business done in the
period. New mortgage loans totaled only £21,217,612, or approximately $85,000,000, compared
with the previous year's advances of £94,548,477,
while money coming into the institutions from share *
subscriptions and deposits declined 40 percent.
Most of the principal balance sheet items show
gratifying strength and there are few notable changes
in the financial picture of the institutions. Total
assets of all societies decreased only 2.2 percent from
the record high of a year ago. Total mortgage holdings were down less than 4 percent but they were
still 6.5 percent higher than in the last normal peace
year (1938). Increasing liquidity and a shift from
mortgage financing to government and other investments are indicated in the 12-percent rise of the
investment account and a 26-percent increase of
11
other assets" last year. The effort to attain a
bulwark against uncertainity is notable also in a 3.8percent rise in the " Balance of Profits and Reserve"
over last year's figure.
The decline in new share subscriptions and deposits during the year, reflecting stringent taxation
measures and the effort of the Government to divert
private savings into government security channels,
caused little loss in the aggregate of shares and
deposits as total liabilities to shareholders declined
only 1.2 percent during 1940, while liabilities to
depositors were reduced 6.4 percent. The number
of shareholders and depositors decreased less than 3
percent in the period.

Item

1940

1939

Share
subscriptions
and deposits received during year_ £62, 140, 964 £103, 216, 677
Advances on m o r t gages during year__
21, 217, 612
94, 548, 477
Management
expenses
3, 984, 404
3, 418, 944
T o t a l assets
Total mortgage assets
T o t a l investments
Liabilities to shareholders
__
Liabilities to depositors
_. _ .
Balance of profit and
reserves
_ _.

Percent
increase
or decrease

-39. 8
-77. 6
-14. 2

756, 242, 391

773, 156, 084

-2. 2

677, 782, 988
54, 243, 592

705, 599, 266
48, 355, 696

-3. 9
+ 12. 2

552, 226, 359

559, 120, 870

-1. 2

142, 254, 862

151, 962, 174

-6. 4

45, 554, 567

43, 888, 280

+ 3. 8

NOTE.-—The British pound is currently quoted at about
$4.03.
Federal Home Loan Bank Review

THE REAL-ESTATE OVERHANG—BACK TOWARD
NORMAL
Recent estimates of the volume of residential real estate owned by
financial institutions indicate that the "overhang" has ceased to be
a serious problem, except in a few areas.
During 1940 the book
value of residential properties held by the principal mortgage lenders
was reduced by as much as 22 percent.

•

IN these days in which numerous new problems
confront the management of mortgage lending
institutions, it is a comforting fact that one of the
most serious problems of the past few years, the disposition of repossessed real estate, is nearing solution.
The Bank Board's 1940 estimates of the volume of
residential properties held by the principal mortgage
lenders indicate a continued substantial reduction in
this nonliquid asset, and present real-estate market
conditions promise further improvement. Barring
unforeseen events, the real-estate "overhang" in
most parts of the country should reach normal proportions in the near future.
The liquidation of the property holdings of mortgage lenders has implications reaching far beyond the
status of these institutions themselves. For the
institutions, the removal of the "real estate owned 7 '
account from their books means, of course, a cleaner
balance sheet, the elimination of a "slow," depreciating, and in many cases non-earning asset, and
strengthened confidence on the part of the investing
public. Also, as management and sales efforts for
the owned real estate diminish in importance, executives will be free to concentrate on the more indigenous tasks of mortgage lending institutions.
Further than that, however, real-estate conditions
as a whole are apt to benefit as the pressure of a
supply of billions of dollars worth of institutional
property holdings is lifted. For the past six or
seven years, this pressure has retarded the recovery
of the real-estate market as " F o r Sale" posters appeared on a large number of dwellings previously
foreclosed by mortgage lenders. The rapidly progressing transfer of such properties into the hands of
individual owner-occupants is undoubtedly a step
toward sounder real-estate conditions.

associations, life insurance companies, and the Home
Owners' Loan Corporation declined from $2,402,000,000 to $1,882,000,000 during the year 1940.
This was a reduction of $520,000,000, or 21.6 percent,
and reflected a considerable acceleration in the sale
of real estate owned as well as a low rate of new
property acquisitions through foreclosure or deed.
In the preceding year, the net decline in the residential real-estate overhang held by the same classes
of institutions had been $344,000,000 or 12.5 percent.
All-in-all, the book value of residential properties
owned by these types of mortgage lenders dropped
$864,000,000 during the past two years, or the equivalent of one-third of the holdings at the end of 1938.
Reliable estimates on the same basis are unavailable for earlier years since bank report forms prior
to 1938 did not separate residential real estate owned
from other types of properties held. However, on
the basis of sample studies it is reasonable to assume
PERCENT DECLINE OF RESIDENTIAL REAL ESTATE
HOLDINGS BY PRINCIPAL MORTGAGE LENDERS
BASED ON BOOK-VALUE OF REAL ESTATE OWNEO
SAVINGS
AND LOAN
ASSNS.
1939 1940

LIFE
INSURANCE
COMPANIES
1939 1940

MUTUAL
SAVINGS
BANKS
1939 1940

COMMERCIAL
BANKS
1939 1940

H.O.L.C.
1939 1940

H-IOH

a--20

-30

$520,000,000

N E T REDUCTION IN

1940

The estimated book value of residential real estate
owned by operating banks and savings and loan
October 1941




This chart shows the progress in the disposition of real estate held by the major
mortgage lending institutions, for the years 1939 and 1940. Each type of institution shows a larger percentage reduction of the real estate account for 1940 than
for the preceding year. The totals for all institutions are indicated by the
broken lines.

19

that the peak holdings of residential properties by
banks, savings and loan associations, life insurance
companies, and the HOLC were in the neighborhood
of three to four billion dollars and that the present
volume represents a reduction of close to one-half
from this high level.
Even now, available estimates of the residential
real-estate overhang, while measuring fairly accurately the trend from year to year, reflect only one
important portion of the total volume of repossessed
properties in the hands of mortgage lenders. These
estimates exclude the real estate foreclosed and owned
by individuals, closed banks and other closed institutions, mortgage companies, trust departments of
commercial banks, and fiduciaries and endowments.
Nor do they comprise the property holdings of tax
authorities, which acquired real estate through tax
sales. If these holdings were added to the known
figures, the residential real-estate overhang would
exceed by a considerable margin the estimates
presented in this article.

the residential real-estate owned with the volume of
residential mortgages held by each type of institution
(right hand column of the table). For all of the
principal private mortgage lenders, the real-estate
overhang at the end of 1940 was equivalent to 11.4
percent of their total residential mortgage portfolio.
This is far from being a "normal" ratio b u t it
indicates at least that progress toward normalcy is
now within reach. The proportion of real estate
owned to mortgages held was 15.4 percent for life
insurance companies, 12.4 percent for savings and
loan associations, 11.2 percent for mutual savings
banks, and 6.3 percent for commercial banks.
The real estate owned by the HOLC was equal
to 17.3 percent of its outstanding mortgage holdings.
This does not appear to be an unduly large ratio
when it is considered that the original loans of the
HOLC were made to distressed borrowers and that
the Corporation's lending activity was discontinued
in 1936, which stopped, of course, the further growth
of the mortgage portfolio.

HOLDINGS OF THE PRINCIPAL MORTGAGE LENDERS

PROBLEM AREAS STILL E X I S T

The table on page 21 shows the estimated volume
of residential real-estate holdings for each of the
principal mortgage lenders for the year-ends from
1938 through 1940. During this period, savings and
loan associations registered the largest percentage
decline in real estate owned. Commercial banks
likewise accomplished a rapid reduction of their residential property holdings. Mutual savings banks
disposed of their real estate at a lower rate than
either of the foregoing types of institutions, which
may be explained by their large holdings of apartment
houses, the market for which in recent years has
been less favorable than sales prospects for 1- and
2-family dwellings, and by the concentration of
their property in the Northeast where the demand
for real-estate has been sluggish. Life insurance
companies showed relatively slow progress in the
sale of repossessed property during 1939 but recorded
a substantial net decrease in holdings during 1940.
The data for the HOLC are influenced by this Corporation's loan extension program, instituted in
the fall of 1939, which entailed a large reduction of
foreclosure activity during 1940. This, coupled with
a continued high volume of property sales, resulted
in a 27 percent decline in real estate owned as compared with 5.5 percent in 1939.
The significance of the present overhang problem
is perhaps most adequately measured by comparing

While it is correct to state that from the standpoint of the country as a whole the residential
real-estate overhang is no longer an acute problem,
this is not equalty true for all sections of the United
States. In a few Northeastern States, particularly
Massachusetts, New York, New Jersey, and Pennsylvania, the volume of real estate owned is still excessive even if the heavy urbanization and the general
concentration of nonfarm mortgages in this area are
taken into account.. The real-estate depression struck
these states with greater force than the rest of the
country, with the result that foreclosures and property acquisitions were particularly heavy, and the
subsequent market recovery was slower than in many
other areas, making the rapid sale of repossessed
real estate more difficult.
The concentration of real estate owned in the
Northeastern section of the country is demonstrated
by the fact that each of the principal types of mortgage financing institutions holds a large portion of
its owned property in the four States of Massachusetts, New York, New Jersey, and Pennsylvania.
In 1940, about 87 percent of the properties owned by
mutual savings banks and 73 percent of real estate
held by the HOLC were located in these States. For
insured commercial banks, the corresponding ratio
was 70 percent, and for savings and loan associations,
58 percent. Of the 1- to 4-family nonfarm homes

20




Federal Home Loan Bank Review

Estimated volume of residential properties held by selected financial institutions
[Amounts are shown in thousands of dollars]
Decrease during year
Dec. 31,
1940

T y p e of institution

Dec. 3 1 ,
1939

Dec. 31,
1938

1940

Amount

Savings a n d loan associations
Life insurance companies 2
M u t u a l savings b a n k s 3
Commerical banks 4_

1

T o t a l private holdings
H o m e Owners' Loan Corporation
T o t a l real estate owned

$510,
443,
400,
190,
5

000
400
000
000

$680,
563,
450,
245,

800
500
000
000

$890,
576,
500,
290,

320 $170, 800
280 120, 100
50, 000
000
000
55, 000

1939
Percent

Amount

Percent

25. 1 $209, 520
12, 780
21. 3
11. 1
50, 000
22.4
45, 000

23.5
2.2
10.0
15.5

Real est a t e as
a percent of
mortgage
holdings,
Dec. 3 1 ,
1940

6

12.
15.
11.
7
6.

4
4
4
3

1, 543, 400
338,277

1, 939, 300
462, 230

2, 256, 600
488, 997

395, 900
123, 953

20.4
26. 8

317, 300
26, 767

14. 1
5. 5

11. 4
17.3

1, 881, 677

2, 401, 530

2, 745, 597

519, 853

21.6

344, 067

12. 5

12.2

1

Estimate based on reports of operating associations, received by the Federal Home Loan Bank Board, Figures for 1940
are preliminary.
2
Estimate of the Federal Home Loan Bank Board based on a questionnaire survey of the largest life insurance companies.
3
Based on the reports of the Comptroller of the Currency and "Month's Work." It is estimated that about 65 percent
of the4 total real estate owned by mutual savings banks is residential.
Based on the reports of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. The estimate
excludes trust departments, but includes an allowance for investments and other assets indirectly representing bank premises or
other5 real estate.
Capital value.
6
Total real estate owned as a percent of total mortgage holdings.
7
Ratio reported for insured commercial banks.

owned by life insurance companies, 44 percent was
concentrated in these four States.
The liquidation of the real estate overhang in this
Northeastern section is still a formidable task.
Although the dollar volume of real estate owned by
financial institutions in the Northeastern States
declined during 1940, it did not drop as rapidly as in
the rest of the country. In other words, while the
real-estate overhang problem in this area is not as
acute as it was in 1939, the relative concentration of
the overhang in these four States is now greater
than it was before. Mortgage-lending institutions
operating in this region still have a formidable task
before them in reducing their real-estate accounts to
normal proportions.
F U R T H E R IMPROVEMENT IN

1941

While comprehensive current data are not yet
available, scattered reports indicate further progress
toward the disposition of real estate owned during the
year 1941. This is evidenced, for example, by a
15.5-percent decline in the book value of properties
owned by a comparable group of insured savings and
loan associations for the first six months of this year,
and by a 10.5-percent reduction in the dollar amount
Ocfobzr 1941




of HOLC holdings during the same period. Favorable
economic conditions in defense areas have stimulated
the transfer of institutionally owned real estate into
individual ownership, and as defense activity appears
to be concentrated along the Northeastern Seaboard,
this should help to normalize the situation in some
of the States in which the overhang has been heaviest.
Also, if and when priorities for building materials
enforce a contraction of new residential construction,
sales prospects for existing structures may be
expected to improve.
On the other hand, continuous sales efforts will be
necessary in order that the remaining real estate
owned by financial institutions may be speedily
liquidated. I t cannot be overlooked that in many
cases properties still owned by mortgage lenders
constitute what may be called the "hard core" of
the overhang, that is, real estate which because of
obsolescence, neighborhood characteristics, lack of
repair, or for other reasons is more difficult to sell
than the average type of property. Only if management applies itself energetically to this toughest part
of the job, can the "real estate owned" account on
the books of mortgage lenders be reduced to negligible
proportions.
21

RESIDENTIAL
INDEX

BUILDING ACTIVITY
BY YEARS

300

AND SELECTED INFLUENCING

1935-1939-100

FACTORS

BY MONTHS

INDEX

300

250

250

200

:

>NU/"

(

iNTS ?
100
90
80

\
S\

r-A

150

^ I Y
\t

^ ^Js^l
^

ET

70

_y
.^

-

150

2

*, n t
.•^.vf-^SSSl^^sass^^ ••—••••—••••

INCOME PAYMENTS(4)<£\

N

200

-_

^

RESIDENTIAL CONSTRUCTION^

100

r

^~ BUILDING MATERIAL
\
1 PRIC.F<1(3)

J&*'"/l

90
80
i

^

70

'

k-

60

F(ORECLOSUR

^ SVC>s. a LOAN
J
L
ENDIhiQ(6)

50

(5) S

60
50

(ALL NC)NFARM)

40

40

30

30

20

20

10

SOURCE.: (1)
(2)
(3)
(4)
(5)
(6)

1930 '31

M,LLIONSLOANS BY

'32

Monthly data for FORECLOSURES, INCOME
PAYMENTS, RESIDENTIAL CONSTRUCTION,
and SAVINGS 6 LOAN LENDING are
adjusted for seasonal variation

F EDERAL HOME t.OAN BANK BOARD (U.S Departnlent of L abor records)
N ATIONAL INDUS!rRIAL C(3NFERE MCE BO/i RD
U. S. DEPARTMENlr OF LA BOR
U. S. DEPARTMENlr OF coMMERCE
F EDERAL HOME _OAN B/i NK BOARD
F EDERAL HOME LOAN B;WK BOARD

1

'33

'34

'35

'36

ALL SAVINGS ft LOAN ASSNS.

'37

'38

MILLI0NS

'39

'40

1939

F.H.L.B. ADVANCES OUTSTANDING

!1
!
i

$240
220

1940

LLL.
s
\
-Zsfr~

>9<

1

"^

1940^

180

X^

,
H94f/

^y
° 1 $193 9

10

1941

MILLIONS MORTGAGE RECORDINGS-ALL LENDERS
$500

200

160

_i. i

i i

'41

40^

--•LJ—"

t^v

S*I939

-o-

oj^y
j

140
120
100
JAN.

INDEX COST OF STANDARD SIX-ROOM HOUSE

INDEX
1501

FEB. M A R APR. MAY

JUN. JUL. AUG. S E P

WHOLESALE COMMODITY PRICES
1935-1939 = 100

JAN.

OCT. NOV. DEC.

INDEX

160

FEB. MAR. APR. MAY

JUN. J U L . AUG. S E P

OCT NOV.

INDUSTRIAL PRODUCTION
1935-19 39=100

~Z7
N J I I I I I I I I

22




Federal Home Loan Bank Review

« « «

M O N T H L Y

S U R V E Y

» » >>

Highlights
/. The volume of residential construction has not yet been seriously affected by material shortages which caused the introduction of priorities
on September 22.
A. The number of privately financed dwelling units on which construction was started during August was down 15 percent from
July but was still 9 percent above the level of August last year.
B. Public construction, increasing from 4,754 units in July to 7,421 in August, offset some of the decline in private activity with
the result that the index of total construction volume receded only 8 percent from the previous month.
II. Building costs continued to rise along with the general increase in prices.
A. Wholesale prices of building materials, according to the U. S. Department of Labor index, jumped another 2 percent during
August and are now 13 percent higher than last year.
B. Costs involved in the construction of the standard house increased 1 percent during the month. In seven of the 28 cities currently
reporting, building costs for this house have risen more than $1,000 during the past year.
III. Mortgage-financing activity in August was somewhat lower than in July, but recordings during the first eight months of this year totaled
more than $3,000,000,000—a
gain of 17 percent over 1940.
A. Recordings of mortgages of $20,000
or less in August were 3 percent below the July figure.
B. New mortgage loans made by all savings and loan associations in 1941 through August totaled $920,000,000—up
16 percent
from last year.
IV. Real-estate foreclosures which had already reached a low level last year continued to decline as real-estate conditions improved under
the stimulating influence of the defense program.
Foreclosures during August registered an unusual decline of 12 percent.
V. General business conditions were characterized by sharp price advances on a broad front while the volume of industrial production
leveled off.

Summary
•

T H E introduction of priorities, discussed in
detail in the lead article of this issue, characterizes better than anything else the current
business situation. A growing number of industries
are facing a rapid change from surpluses to shortages,
or a shift from a buyers' market to a sellers' market.
Under these conditions, priorities or some sort of
rationing become inevitable to assure the right of
way for defense needs. Building priorities, while
improving the prospects for builders and lenders on
lower- and medium-priced structures in defense
areas, will force other segments of the industry into
restricted operations which must be recognized and
anticipated.
Thus far, the trend in the total volume of new
residential construction has not been seriously
influenced by the shortages which are responsible
for the necessity of building material priorities.
The chart on page 22 reveals that the residential
construction index, which has been adjusted for
normal seasonal movements, has fluctuated throughout this year at approximately double the level
established during the 1935-1939 base period, or
about 15 percent above the average month of 1940.
Private construction in August was almost 9 percent
above the same month of last year.
October 1941




Expansion of mortgage-financing activity likewise has continued without check. As indicated by
mortgage recording statistics, the first 8 months of
this year have witnessed a new high in mortgage
transactions, involving $3,000,000,000 or 17 percent
more than in the corresponding period of 1940.
Real estate foreclosures in August registered an
unusual drop of 12 percent from July and, from all
available information on record, the foreclosure
index (adjusted for seasonal variations) has now
reached the lowest level for any month within the
past 15 years. Since October 1940 when the
defense boom gathered momentum the decline in
foreclosures has been as much as 32 percent. Improved business conditions, housing shortages in
[1935-1939=100]

T y p e of index

R e s i d e n t i a l construction *___
Foreclosures (nonfarm) i
R e n t a l index ( N I C B )
B u i l d i n g m a t e r i a l prices
Savings a n d loan lending *__.
Industrial production i
Manufacturing employment
M a n u f a c t u r i n g p a y rolls *___
Income payments i

August
1941

July
1941

201.4
33.4
108.6
117.8
P 179. 9
P 161. 0
P 134. 6
P 181. 5
P 128.1

218.6
37.3
108.3
115.1
186.2
<• 1 6 0 . 0
r

136.4
"• 185. 4
132.3

Percent August Percent
change
1940
change
-7.9
-10.5
+0.3
+2.3
-3.4
+0.6
-1.3
-2.1
-3.2

185.1
48.0
106.5
104.2
160.2
121.0
109.2
121.9
113.3

+8.8
-30.4
+2.0
+13.1
+12.3
+33.1
+23.3
+48.9
+13.1

p = p r e l i m i n a r y . r = r e vised
1
Adjusted for n o r m a l seasonal v a r i a t i o n .

23

many defense areas, and greater demand for real
estate have been canceling much of the mortgage
delinquency so that foreclosures have become less
and less necessary. Counterbalancing distress in
nondefense areas which are losing population has
not yet become evident.

General Business Conditions
•

MEASURES to combat inflation marked developments along the economic front during the
past few weeks. Following the passage of a comprehensive Federal tax bill which is expected to direct
about $3,550,000,000 into Treasury coffers, and the
tightening of consumer installment credit reported
last month, the Board of Governors of the Federal
Reserve System announced that reserve requirements of member banks will be raised to the statutory
limits on November 1. Excess reserves of member
banks, which are a potential source of credit inflation,
will thereby be reduced from about $5,200,000,000 to
$4,000,000,000. Plans for a more general program of
credit control are under consideration and Congressional hearings on a far-reaching price control bill are
under way.
In the meantime, sales of Defense Savings Bonds—
another anti-inflation measure—continue in considerable volume. September receipts, including all of the
three issues E, F, and G, totaled $232,327,000 compared with $265,606,000 in August, and cumulative
sales from May through September were $1,504,410,000. The number of savings and loan associations
participating in the Defense Savings campaign has
been steadily increasing and stood at 1,417 on
September 1.
That concerted efforts against inflationary tendencies are warranted was again confirmed by the
behavior of prices. During the four weeks ended
September 20 the wholesale price index of the
Department of Labor increased another 1.7 percent
and reached a level 17.8 percent above a year ago.
Market prices of 28 basic commodities have risen as
much as 44 percent during the past year. Consumers'
prices have shown the usual lag behind wholesale
prices but the Labor Department's index of living
costs in large cities registered a rise of 7.5 percent
from the beginning of the war through August 15.
Farm products and foodstuffs are among those commodities showing the highest percentage increases.
While it is true that some of the cost factors entering into prices are responsible for this upward move24




ment in the price level, forward buying is another
element not to be overlooked. The Cleveland Trust
Company in its September Bulletin states that
"protective purchasing is the ailment from which
American industry is suffering," and adds t h a t
manufacturers' inventories are now the highest on
record, both in dollar value and physical volume.
As anticipated, industrial activity in August
entered into a more static phase after the sharp
advances made during the past year. The Federal
Reserve Board's seasonally adjusted index of industrial output increased from 160 to 161 percent of
the 1935-1939 average. These figures reflect a
revision of the index to broaden the coverage of war
production which is now of such paramount importance in the aggregate industrial activity. Characteristically, the August output of durable manufactured goods which include most of the military
products amounted to twice the average volume of
the base period, 1935-1939. On the other hand,
nondefense industries such as silk manufacture were
forced into a sharp curtailment of activity and others
are facing the same prospect. Automobile output for
the first five months of the 1942 model year has been
restricted to 67.8 percent of the production volume
during the corresponding period of last year.

Residential Construction
[Tables 1 and 2]
•

A P P R O X I M A T E L Y 41,800 dwelling units were
constructed throughout urban areas of the United
States in the month of August—3,500 units or 8 percent less than in the previous month. Since little
variation is normally expected in the late summer
months, the seasonally adjusted index of residential
building activity also receded 8 percent to a level of
201 (average of 1935-1939 = 100).
Privately financed construction declined 15 percent
during the month of August, thus reversing the upward trend which has been in evidence for the year to
date. Multifamily dwellings accounted for the
greatest proportion of this decrease by registering a
drop of 62 percent from the peak July level. The
number of single-family homes placed under construction declined 7 percent from July. The relatively unimportant 2-family category was the only
one to register a gain, which amounted to 9 percent
during the July-to-August interval.
New residential structures sponsored by governmental agencies—most of them now designed to
Federal Home Loan Bank Review

supply the emergency needs of workers in defense
areas—totaled 7,421 during August as compared with
4,754 in July. Throughout the first eight months
of this year, the curve of public building has shown a
sawtooth pattern reflecting the various steps taken
to convert blueprints into actual construction for
the provision of additional housing facilities for
defense workers.
Each of the classifications of residential building
has so far in 1941 exceeded by a considerable margin
the 8-month cumulative figures of 1940. Under the
stimulus of the present requirements in areas of
concentrated war industries, new Governmentfinanced structures have displayed the most favorable
trend in this comparison by rising 54 percent during
the year to date. Dwellings built by private enterprise have meanwhile increased about 19 percent
over the number of building permits granted during
January-August 1940.

Building Costs
[Tables 3, 4, and 5]
•

COSTS involved in the construction of a standard six-room frame house continued to rise in
August with a gain of 1.1 percent over July. T h e
August index was 15 percent higher than the average
month of 1935-1939 and 13 percent above August
1940. Labor costs in connection with building the
standard house rose 0.6 percent in August which
places the labor index 20 percent above the 1935-1939
level. The cost of material used in this dwelling
rose 1.5 percent in August and is now 12 percent
above the average month of 1935-1939.
A majority of the 28 cities currently reporting
costs involved in the construction of a standard sixroom frame house showed cost increases, which in 12
cases were a t least $300 during the period June to
September. Total costs since September 1940 have
risen more than $1,000 in Hartford, New Haven,
Birmingham, Atlanta, Baltimore, Columbia (South
Carolina), and Oshkosh (Wisconsin).
In line with current increases in the cost of supplies
necessary for building the standard house, the index
of wholesale building material prices showed pronounced gains. During July the index increased 2
percent above June, and the August figure showed a
similar advance. As in the summer and autumn
months of 1940, lumber prices are now rising rapidly,
while most other wholesale material costs are showing
more moderate gains.
October 1941




Construction costs for the standard house
[Average month of 1935-1939=100]
Percent August Percent
change 1940 change

August
1941

July
1941

Material- _
Labor _

112. 4
120.0

110. 7
119.3

+ 1.5
+ 0. 6

101.4
103. 6

+ 10. 8
+ 15. 8

Total

114. 9

113. 6

+ 1.1

102. 1

+ 12. 5

Element of cost

New Mortgage-Lending Activity of
Savings and Loan Associations
[Table 6]
•

T H E seasonally adjusted index of mortgage
lending by savings and loan associations declined
during August for the first time since February of
this year. However, despite the reduction of 3
percent from July, the current index stood 12 percent
higher than in August of 1940 and 80 percent in
excess of the average month of t h e 1935-1939
base period.
TOTAL

LOANS

MADE BY ALL SAVINGS AND LOAN ASSOCIATIONS

UNITED S T A T E S - B Y
BY

TYPE

OF ASSOCIATION

MONTHS

SEP.
P

DOLL

DEC

PRELIMINARY

CUMULATIVE - AS OF AUGUST 3 EACH YEAR

400

350
300

250

200

150

too

50

O

11I" 1
11 1- l
1

1II 1 ll
III

Jl_l l_l
1939

1940

FEDERALS

1|

1941 P

• •1
1939

1940

STATE-CHARTERED

Hi
II
-li
_JLI
|

1941 ^

MEMBERS

1939

|

i •i

1940

l94|/>

NONMEMBERS

25

On the basis of the dollar volume of new mortgage
loans made, State-chartered members of the Federal
Home Loan Bank System showed a rise of 2 percent
during the month of August, while Federal savings
and loan associations registered an increase of 1
percent. These favorable movements over July
were, however, nullified by a 15-percent contraction
in new lending operations of nonmember institutions,
so that the total for the entire savings and loan
field decreased slightly in contrast to the usual
seasonal expansion during August.
During the first eight months of this year, approximately $920,000,000 was provided in new mortgage
loans by savings and loan associations throughout
the country; this represents an improvement of 16
percent over the loan volume shown for the same
1940 period and constitutes a new peak level for
the past decade.

Mortgage Recordings
[Table 9]
•

T H E volume of nonfarm mortgages of $20,000
or less recorded during August was 3 percent
lower than in July, but 14 percent above the figure
for August 1940. The estimated dollar amount
involved in recorded transactions was $430,705,000.
All classes of mortgagees shared in the decline from
the previous month, and the proportion for each
class of lender to the total showed only fractional
changes. Also, the reduction was fairly general
throughout the country, with eight of the 12 Federal
Home Loan Bank Districts reporting a lower

The preparation of this issue coincided
with the transfer of several sections of the
Division of Research and Statistics to New
York. For this reason, some of the current
data usually reported in this section were not
available this month. Statistics regularly
carried in tables 7, 8, and 12 were omitted.
August data included in other tables are
preliminary and subject to revision.
The gaps left in the statistical section of
this issue will be filled next month and
arrangements are being made to assure the
usual coverage of current data as speedily as
possible.

volume of mortgage recordings than in the previous
month.
During the month, the volume of mortgages
recorded this year passed the $3,000,000,000
mark—up 17 percent from the corresponding period
of last year. In this 8-month comparison mutual
savings banks, insurance companies, and individual
mortgagees scored more than average gains. Savings
and loan associations as well as banks and trust
companies were just in line with the average increase
while the miscellaneous group "other mortgagees' 7
lagged behind.

Foreclosures
[Table 10]
•

Mortgage recordings by type of mortgagee
[Amounts are shown in thousands of dollars]

Type of lender

Savings and loan associations
_ __
Insurance companies
Banks, trust companies _
Mutual savings banks __
Individuals
Others
Total _

26




PerPercent Percent Cumula- cent
of
change of Aug. tive retotal
from
1941
cordings
July amount (8 months) record1941
ings

-2. 4
-0. 5
-2.9
-9.0
-1.5
-4.4
-2. 8

$989, 529
258, 901
766, 749
135, 967
510, 750
429, 713

32.0
8.4
24.8
4.4
16.5
13. 9

100.0 $3,091,609

100. 0

32.3
8. 6
24. 5
4.5
16.3
13.8

R A R E L Y within recent years has the volume of
nonfarm real-estate foreclosures shown a monthto-month decline so favorable as that for last
August. The estimated number of foreclosures was
4,271 or 12 percent lower than that recorded for
July. The decrease normally expected for this
month is only 2 percent.
Participating in this unusual drop were all Federal
Home Loan Bank Districts with the exception of the
Des Moines region where an increase of 4 percent
occurred. Of the 48 States and the District of
Columbia, 34 showed decreases, 12 increases, and
three, including the District of Columbia, registered
no change.
So far this year the number of foreclosure cases
was 20 percent lower than that recorded for a like
period in 1940. AH Federal Home Loan Bank
Federal Home Loan Bank Review

Districts shared in this improvement, with the
Boston, Cincinnati, Indianapolis, Little Rock, and
Portland areas making a better than average showing. Only in four States, Vermont, Florida, Kansas,
and Arizona, was foreclosure activity higher than
last year, and in two of them (Vermont and Arizona)
the number of cases in foreclosure was negligible.

Federal Home Loan Bank System
[Table IS]
•

All of the Federal Home Loan Banks, with the
exception of Cincinnati and Portland, reported
an increase over July in the amount of advances
outstanding. The two decreases were negligible—
$9,000 and $83,000, respectively. This almost
universal increase in lending operations raised the
total balance of advances outstanding to $172,628,000, a new high for the year and an increase
of approximately 3 percent over the outstanding
advances at the end of August 1940. Six Banks—
Boston, Indianapolis, Chicago, Little Rock, Portland, and Los Angeles—had larger amounts of advances outstanding than on August 31, 1940.
The total of new advances made during August was
almost $2,000,000 below the July figure. On the
other hand, repayments were over $8,000,000 lower
than in July.
The largest monthly advances were recorded by
the Chicago Bank—$1,678,000. The Los Angeles
Bank, however, showed the largest gain made during
August over July—an increase of $306,000. New
York reported a rise of $274,000 in the amount of
new advances. The Cincinnati, Indianapolis; Chicago, Topeka, and Portland regions also registered
increases over July. The other five Districts showed
decreases in new advances ranging from $332,000 in
Pittsburgh to $1,080 in Winston-Salem.
The membership of the Bank System showed a
net gain of one by reason of eight admissions and
seven withdrawals, with the result that there were
3,836 member institutions at the end of August.
These institutions held total assets in the amount
of $5,325,000,000.

Federal Savings and Loan Associations
•

SINCE the dividend date of July 1, Federal
savings and loan associations have repurchased
Treasury investments in the amount of $2,387,100,
with the result that Treasury investments outstandOctober 1941




ing are now down to $21,283,800, or almost onehalf of the balance two years ago. Because of the
increased need for private funds in home-financing
institutions to assist in the defense housing program,
the President has withdrawn his previous request for
the complete retirement of Treasury investments in
Federals.
Assets of all Federals in the United States expanded
by some $24,000,000 during the month of August;
associations which were originally organized as
Federal savings and loan associations accounted for
$8,000,000 of this amount, while those Federals
which have been converted from State-chartered
institutions displayed a growth of $16,000,000.
Progress in number and assets of Federals
[Amounts are shown in thousands of dollars]
Number
Class of association

New
_„
C o n v e r t e d . __
Total

Aug.
31,
1941 *>

July
31,
1941

Approximate assets

July 31,
1941

Aug. 3 1 ,
1941 p

640
819

639
817

$635, 648
1, 415, 737

$627, 402
1, 397, 618

1,459

1,456

2, 051, 385

2, 025, 020

p Preliminary.

Federal Savings and Loan
Corporation

nsurance

•

A survey of trends in the principal balance sheet
items of an identical group of 2,159 insured
savings and loan associations has recently been
prepared by the Division of Research and Statistics.
This study includes all reporting associations which
were insured during the entire year ending June 30,
1941 without undergoing any major financial reorganization.
Mortgage holdings in the identical insured institutions expanded 17 percent during the twelve
months period, on the crest of an extremely active
real estate market, while this same condition proved
favorable to the net disposal of 24 percent of real
estate holdings as of June 30 of last year. Cash
and Government obligations together increased 22
percent and indicated the increased emphasis which
is being placed on liquidity.
(Continued on p. 86)
27

Table h—Estimated number and valuation of new family dwelling units provided in all urban areas
of the United States, August 1941
[Source: U. S. Department of Labor]
[Amounts are shown in thousands of dollars]
N u m b e r of family dwelling units
January-August
totals

Monthly totals

T y p e of construction

August
1941

July
1941

P e r m i t valuation

August
1940

1941

January-August
totals

M o n t h l y totals

July
1941

August
1941

1940

August
1940

1941

1940

34, 392 40, 570 31, 630 265, 656 223, 807 $133, 216 $154, 672 $113, 276 $993, 373 $804, 949

P r i v a t e construction '
1-family dwellings
2-family dwellings *._ _
3-and-more-family d w e l l ings 2 _ _
Public construction.

29, 411 31, 636 26, 283 209, 589 176, 088 120, 385 129, 283
2,221
1,912
2,430
16, 513 12, 988
5,798
6,327

99, 330
5,015

838, 552 671, 803
42, 244 32, 677
112, 577 100, 469

2,551

6,713

3,435

39, 554

34, 731

6, 504

19, 591

8,931

7,421

4,754

5,288

48, 817

31, 755

28, 445

17, 372

15, 633

160, 982

93, 975

Total u r b a n c o n s t r u c t i o n . 41, 813 45, 324 36, 918 314, 473 255, 562 161, 661 172, 044 128, 909 1,154, 355 898, 924
1
2

Includes 1- and 2-family dwellings combined with stores.
Includes multifamily dwellings combined with stores.

Table 2.—Estimated number and valuation of new family dwelling units provided in all urban areas,
in August 1 9 4 1 , by Federal Home Loan Bank District and by State
[Source: U. S. Department of Labor]
[Amounts are shown in thousands of dollars]
All p r i v a t e 1- a n d 2-family dwellings

All residential dwellings

Federal H o m e Loan B a n k District
and S t a t e

N u m b e r of family
dwelling units

P e r m i t valuation

N u m b e r of family
dwelling units

P e r m i t valuation

August
1941

August
1940

August
1941

August
1940

August
1941

August
1940

August
1941

41, 813

36, 918

$161, 661

$128, 909

31, 841

28, 195

$126,711

$104, 345

4,314

2,219

18, 146

8,878

1,913

1,620

9, 122

6,914

985
65
877
72
182
38

12, 098
285
4,853
200
661
49

3,895
217
3,608
264
706
188

609
76
1,018
59
139
12

458
65
813
72
178
34

3,255
220
4,783
200
615
49

2,097
217
3,462
264
696
178

3,534

3,518

15, 531

14, 352

2,633

2,594

12, 202

11, 206

New Jersey _
N e w York _

1,313
2,221

943
2,575

5,939
9,592

4,029
10, 323

1,063
1, 570

830
1,764

4,912
7,290

3,690
7, 516

N o . 3—Pittsburgh

5,446

1,573

22, 423

6,675

2,302

1,507

9,872

6, 500

24
1,324
225

178
21, 008
1,237

96
5,774
805

36
1,932
334

20
1,274
213

178
8,503
1, 191

84
5, 635
781

U N I T E D STATES

N o . 1—Boston.
Connecticut. _
Maine.
Massachusetts __
New Hampshire
Rhode Island
Vermont __
..
N o . 2—New York

Delaware
Pennsylvania
West Virginia

28




_

_.

.

.. _
_- -_

2,933
102
1, 053
59
155
12

36
5,062
348

August
1940

Fee/era/ Home Loan Bank Review

Table 2.—Estimated number and valuation of new family dwelling units provided in all urban areas,
in August 1 9 4 1 , by Federal Home Loan Bank District and by State—Continued
[Amounts are shown in thousands of dollars]
All p r i v a t e 1- and 2-family dwellings

All residential dwellings

Federal H o m e Loan Bank District
and State

N u m b e r of family
dwelling units

P e r m i t valuation

August
1941

August
1940

7, 658

$21, 077

738
1, 185
1, 426
1,260
1, 149
647
228
1,025

1,057
4,380
3,712
1,329
3, 115
1,814
874
4,796

3, 144

2,425

13, 415

650
2,056
438

265
1,752
408

2,009
10, 192
1,214

3,253

3,350

879
2,374

N o . 7—Chicago

August
1941

August
1940

6,628
523
1, 160
1,070
638
1,010
576
329
1,322

N o . 5—CincinnatiKentucky
Ohio
Tennessee-

N u m b e r of family
dwelling units

P e r m i t valuation

August
1941

August
1940

August
1941

August
1940

$23, 036

4,611

3, 997

$15, 155

$12, 8 4 ^

1,515
3,918
4,757
2,984
3,918
1,706
589
3,649

507
241
851
617
1,003
519
196
677

486
256
932
528
458
514
224
599

1,032
1,495
3,211
1,308
3,101
1,658
489
2,861

944
1,349
3,454
1, 161
1,524
1, 358
582
2,471

9,949

2,480

2, 154

11, 322

9, 090

630
8,358
961

223
1,836
421

265
1,503
386

580
9,543
1, 199

630
7,522
938

14, 382

13, 389

3,237

2,795

14, 340

11,737

1,319
2,031

3,323
11,059

4,470
8,919

869
2,368

795
2, 000

3,289
11, 051

2,899
8, 838

2,268

1,797

12, 010

8, 388

2,237

1,756

11,915

8, 263

IllinoisWisconsin.

1,575
693

1, 191
606

9,011
2,999

5,956
2,432

1,557
680

1, 168
588

8,952
2,963

5,871
2, 392

No. 8—Des Moines

1,877

1,853

7,373

6,543

1,798

1,820

7,184

6,422

544
673
512
57
91

477
727
525
52
72

2, 123
2,924
1,832
229
265

1,754
2,438
1,945
204
202

521
660
473
53
91

472
727
505
44
72

2,083
2,885
1,730
221
265

1, 739
2,438
1,875
168
202

3,290

4, 193

9, 198

10, 784

2,973

2,658

8,375

6, 750

397
488
328
150
1,927

194
347
422
145
3,085

1, 109
1,534
504
404
5,647

474
942
940
324
8, 104

173
481
320
146
1,853

194
343
230
141
1,750

452
1,528
496
397
5,502

474
937
355
314
4, 670

1,432

~~1,290

4,278

3,756

1,401

1, 165

4,229

3, 559

294
372
247
519

406
233
192
459

952
852
845
1,629

1, 124
621
627
1,384

282
353
247
519

339
218
157
451

930
825
845
1,629

1,011
602
57^
1, 373

1,451

1,439

4,981

4,433

1,367

1,291

4,772

4, 105

119
103
348
209
619
53

121
124
393
203
539
59

382
343
1,177
679
2,228
172

295
317
1,189
681
1,738
213

88
100
317
202
607
53

110
116
306
200
506
53

293
342
1,090
662
2,213
172

283
309
968
676
1, 675
194

5, 176

5,603

18, 847

18, 726

4,889

4,838

18, 223

16, 956

112
5,003
61

239
5,317
47

106
4,726
57

89
4,702
47

352
17, 689
182

233
16, 552
171

No. 4—Winston-Salem _ .. .

_

Alabama .
. _ .. .
District of C o l u m b i a . _ .
Florida.- _
_
______
Georgia _..
Maryland.. _
N o r t h Carolina
South CarolinaVirginia._
__ .

N o . 6—Indianapolis.
IndianaMichigan

__

IowaMinnesotaMissouri __
N o r t h D a k o t a __
South D a k o t a
N o . 9—Little Rock
Arkansas Louisiana _
Mississippi-New Mexico
Texas _ _
N o . 10—Topeka
Colorado
KansasNebraska
OklahomaNo. 11—Portland
Idaho__
MontanaOregon
U t a h - __
Washington _
Wyoming
No. 12—Los Angeles
ArizonaCalifornia.
Nevada

October 1941




_ _

_______

363
18, 298
186

513
18, 042
171

29

NEW RESIDENTIAL CONSTRUCTION IN ALL URBAN AREAS
ALL PRIVATELY FINANCED I AND 2 FAMILY DWELLINGS
Source: Federal Home Loan Bank Board. Compiled from Building Permits reported to U S . Deportment of Labor
FEDERAL HOME LOAN BANK

»-BC)STON

DISTRICTS

4 -WINSTON SALEM

3 -PITTSBURGH

2 - NEW YORK

|

1

j

>

1941^
19410,

194

1941^

_^

%

"H

y

\i

1940..

^V
*>-

.. AUG- SEP OCT NOV DEC

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Federal Home Loan Bank Review

Table 3.—Cost of building the same standard house in representative cities in specific months

l

NOTE.—These figures are subject to correction
[Source: Federal Home Loan Bank Board]
T o t a l cost

Cubic foot cost
Federal H o m e Loan B a n k
District a n d city

No. 1—Boston:
Hartford, Conn__
New H a v e n , Conn_ _
Portland, Me
Boston, Mass__
Manchester, N . EL_- _
Providence, R. I
R u t l a n d , Vt
N o . 4—Winston-Salem:
Birmingham, Ala
Washington, D . C
T a m p a , Fla__ _
W. Palm Beach, Fla
Atlanta, Ga
Baltimore, M d _
Cumberland, Md__
Asheville, N . C
Raleigh, N . C
Salisbury, N . C__
Columbia, S. C - _ _
Richmond, Va
Roanoke, Va
_
N o . 7—Chicago:
Chicago, 111
Peoria, 111. __
Springfield, 111
Milwaukee, W i s .
Oshkosh, Wis__
No. 10—Topeka:
Denver, Colo__
Wichita, Kan__
Omaha, N e b

1940

1940

Sept.

Sept.

Sept.

June

Mar.

$0. 299
.297
.226
.297
.245
.273
.263

$0. 245
.245
.220
.270
. 226
.255
.226

$7, 166
7,131
5,424
7, 122
5,884
6,554
6,316

$6, 615
6,650
5,424
6,986
5,882
6,355
2
5, 917

$6, 424
6,288
5,369
6,760
5, 801
6,281
5,880

.289
.257
.260
. 280
.256
.257
.261
.241
.254
. 209
.245
. 248
.251

.222
.246
.238
.256
.203
.205

6,927
6, 170
6,231
6,727
6,138
6, 180
6,264
5,779
6,088
5,013
5,876
5,944
6, 034

6,494
6, 173
6, 152
6,373
5,984
6,157
6,006
5,708
5,502
5, 168
5,719
5,600
5,936

.324
.320
.327
.271
.268

.285
.296
.299
.230
.226

7,783
7,686
7,838
6,500
6, 431

.279
. 252
. 259

.255

6,686
6,058
6,218

__

__
_ _

.

1941

1941

_
_ _

.206
.217
. 189
. 195
.206

.246

1939

1938

1937
Sept.

Dec.

Sept.

Sept.

Sept.

$6, 201
6, 118
5,274
6,667
5,749
6,226
5,443

$5, 881
5,869
5,277
6,489
5,421
6, 122
5,428

$5, 836
5,673
5,254
6,336
5,332
5,949
5,354

$5, 807
5,620
5,307
6,298
5,431
5,910
5,547

$6, 346
5,903
5,796
6,667
5,814
5,929
5,844

6,392
6,236
6, 155
6, 550
5,846
6,088
6, 058
5,752
5,478
4,716
5,540
5,570
6,021

6,087
6,416
6,027
6,731
5,537
5,659
5,832
5,320
5,246
4,493
5,453
5,420
5,714

5, 332
5,894
5,717
6, 156
4,882
4,914

5, 150
5,737
5,579
5,703
4,792
4,706
5,477
4,855
4,853
4,645
4,721
4,982
5, 155

5,857
5,833
5,545
5,806
5,063
4,709
5,511
5,090
5,298
4,744
4,868
5,057
5,087

6,068
6,019
5,717
6,461
5,458
5, 128
5,696

7,371
7,288
7,463
6, 117
6,029

7,093
7,267
7,463
5,988
5,975

6,900
7, 158
7,415
5,875
5,814

6,841
7,110
7, 168
5,527
5,431

6,768
6,639
6,778
5,261
5,484

6,805
6,469
6,812
5,071
5,486

6, 456
6, 058
2 6, 287

6, 500
5,790
6, 148

6,327
5,716
5,968

6,131

6,276
6,005
5,942

6,569

2

2
2

2

2

4,941
5, 197
4,536
4,679
4,949

5,914

5,808

5,669
4,718
4,874
5,326
5,010
7, 178
6,807
5,295
5,711
6,762
5,680
6,111

1
The house on which costs are reported is a detached 6-room home of 24,000 cubic feet volume. Living room, dining room, kitchen, and lavatory on first floor; three
bedrooms and bath on second floor. Exterior is wide-board siding with brick and stucco as features of design. Best quality materials and workmanship are used
throughout.
The house is not completed ready for occupancy. It includes all fundamental structural elements, an attached 1-car garage, an unfinished cellar, an unfinished attic,
a fireplace, essential heating, plumbing, and electric wiring equipment, and complete insulation. It does not include wall-paper nor other wall nor ceiling finish on interior
plastered surface, lighting fixtures, refrigerators, water heaters, ranges, screens, weather stripping, nor window shades.
Reported costs include, in addition to material and labor costs, compensation insurance, and allowance for contractor's overhead and transportation of materials
plus 10 percent for 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 three months from the same dealers, and current wage rates are obtained from
the same
reputable contractors and operative builders.
2
Revised.

Table 4.—Index of building costs for the standard house
[Average month of 1935-1939 = 100]
Aug.
1941

July
1941

June
1941

May
1941

Apr.
1941

Mar.
1941

Feb.
1941

Jan.
1941

Dec.
1940

Nov.
1940

Oct.
1940

Sept.
1940

Aug.
1940

112.4
120. 0

110.7
119.3

109.2
118.6

108.8
117.0

108.7
116. 1

108.0
115.3

107.8
115. 1

106.6
114. 5

105.9
112.5

104.6
109.8

103.4
106.9

101.9
104.8

101.4
103. 6

T o t a l cost- 114.9

113.6

112.4

111.6

111.2

110.4

110.2

109.3

108. 1

106.4

104.6

102.9

102. 1

Element of cost

Material
Labor

October 1941




31

Table 5.—Index of wholesale price of building materials in the United States
[1935-1939 = 100]
[Source: U. S. D e p a r t m e n t of Labor]
All building m a t e rials

Period

Brick a n d
tile

Cement

Lumber

Paint and
paint materials

Plumbing
a n d heating

Structural
steel

Other

1939: August

100. 1

99.6

100.2

100. 3

100. 9

104. 2

103.5

96.8

1940: August
September
October
November
December

104.2
106.8
109.2
110. 4
110.9

99.2
99.3
99.3
99. 3
100.3

99.4
99.4
99.5
99.7
99.8

109.6
119.3
127.4
130.8
132.3

103.5
103.4
104.3
105.4
105.0

105.8
105.8
105.8
105.8
105.8

103.5
103.5
103.5
103.5
103.5

101.0
101. 1
101.4
101.9
102.2

1941: J a n u a r y
February
March
April
May
June
July
August

111.2
110.9
111.1
111.8
112. 1
112.8
115. 1
117.8

100. 5
100.6
100.7
100.9
101. 1
101.8
103.7
104.7

99.7
99.7
99.7
99.9
100.4
100. 9
101. 1
101. 1

131.9
130.5
130.0
130.0
130. 1
131.0
136.2
142.0

106.6
106.5
107.5
109. 1
109.8
111.0
112.6
114.7

105.8
108.0
108.8
109.0
109.0
109.2
109.3
114.0

103.5
103.5
103.5
103.5
103.5
103.5
103.5
103.5

102.6
102.6
103.0
103.7
104. 1
104.8
106.4
108.0

+ 2.3%
+ 13.1%

+ 1.0%
+ 5.5%

0.0%
+ 1.7%

+ 4.3%
-29.6%

+ 4.3%
+ 7.8%

0.0%
0.0%

+ 1.5%
+ 6.9%

Change:
Aug. 1941-July 1941.
Aug. 1941-Aug. 1940

-1.9C

Table <5.—Estimated volume of new home-mortgage loans by all savings and loan associations, by
purpose and class of association
[Thousands of dollars]
Purpose of loans

Class of association

Period

1939
January-August
August
1940
January-August
A u g u s t - - -_
September _ .
October
November
__
December— . ^

Construc- H o m e pur- Refinancing
chase
tion

Reconditioning

Loans for
all other
purposes

Total
loans
Federals

State
members

Nonmembers

$400, 337

$396, 041

$190, 005

256, 555
634, 166
40, 645
95,038 I

253, 325
37, 340

124, 286
17, 053

509, 713

483, 499

206, 367
137,
20,
19,
19,
15,
14,

$301, 039

$339, 629

$182, 025

$59, 463

$104,227

190, 400
29, 863

216, 666
32, 282

119,723
17, 005

39, 080
5,909

68, 297
9,979

398, 632

426, 151

198, 148

63, 583

113,065

254, 989
42, 488
39, 417
41,610
32, 584
30, 032

279,
40,
40,
40,
33,
31,

093
567
947
771
875
465

136,
17,
15,
16,
14,
14,

809
762
483
840
441
575

42, 427
6,079
6,283
5,756
4,869
4,248

76,966
10, 726
9, 645
9, 423
8, 798 1
8,233

790,284
117,622
111,775
114,400
94,567
88,553

338,
50,
46,
48,
38,
37,

315
305
480
307
896
715

314,
46,
45,
46,
40,
36,

415
807
988
224
143
729

27,
30,
41,
48,
54,
55,
55,

809
283
784
311
781
993
682

13,
14,
16,
16,
18,
17,
16,

645
204
903
905
506
891
816

3,784
3,573
4,765
6,368
5,930
5,633
6,022

8, 540
7, 787 1
8,460 1
10,361
10,761
9, 916
9,534

» 918, 128
80,440
82,330
105, 162
120, 631
130, 953
133, 640
132, 972
» 132, 000

» 393,
34,
35,
45,
51,
55,
57,
56,
* 57,

543
360
645
365
371
396
542
564
300

» 386,
33,
35,
43,
50,
54,
54,
55,
* 57,

179
947
301
947
956
495
857
676
000

$986,383

1, 199, 579

554
510
307
869
528
109

1941
January—August _
January
February
_ _
March
April. _
May
June
July
_ __
August- _
v

26,
26,
33,
38,
40,
44,
44,

662
483
250
686
975
207
918

1

9 138, 406
12, 133
11, 384
15, 850
18, 304
21, 062
21,241
20, 732
» 17, 700

Preliminary.

32




Federal Home Loan Bank Review

ESTIMATED VOLUME

OF

NONFARM MORTGAGES RECORDED, BY TYPE OF MORTGAGEE
(Based on mortgages of $20,000

SAVINGS AND LOAN ASSOCIATIONS

and less)
INDIVIDUALS

BANKS AND TRUST COMPANIES
3LLAF

OF DOLLARS

/i

100

1940

V

"V

JQx

1941
80

S

1939-^

1941

Q^"*-//

S

-1940

vj

r -^

^--1939

20

JAN.'FEB.

MAR APR

MAY JUN. JUL

AUG. SEP. OCT. NOV. DEC

JAN.

F E B . MAR. APR. MAY. JUN. JUL.

AUG. SEP. OCT.

NOV. D E C

JAN.

FEB. MAR A P R . MAY. J U N . J U L . AUG. S E P

OTHER MORTGAGEES

MUTUAL SAVINGS BANKS

INSURANCE COMPANIES

OLLA

OF DOLLARS

OCT. NOV D E C

*s

6oL
/ 9 4 / ^ ^ f / ^ ( j^-^L

A**£j£r</

tvL

i^J

^Jj(\940

1^>-^i

^1939

^ /

JAN.

FEB. MAR. APR. MAY J U N . J U L . AUG. SEP

OCT.

PERCENTAGE

NOV. D E C

JAN.

FEB. MAR

APR MAY.

JUN. JUL

AUG. SEP. OCT. NOV. D E C

DISTRIBUTION OF MORTGAGES RECORDED, BY
(Based on dollar

BANKS AND TRUST COMPANIES

INSURANCE COMPANIES

MUTUAL SAVINGS BANKS




FEB. MAR. APR. MAY

J U N . JUL. AUG. SEP. OCT. NOV. DEC

TYPE OF MORTGAGEE

amount)

SAVINGS AND LOAN ASSOCIATIONS

1941

JAN.

INDIVIDUALS

OTHER MORTGAGEES

Table 9.—Estimated volume of nonfarm mortgages recorded, by type of mortgagee
[Amounts are shown in thousands of dollars]
Savings a n d
loan associations

Insurance
companies

Banks a n d
trust
companies

Mutual
savings
banks

Individuals

All
mortgagees

Other
mortgagees

Period

Number:
1940: August
September. _
October
November..
December. _

Percent

Percent

Total

Percent

46,
45,
48,
39,
37,

706
595
145
180
984

34.7
35.5
34.8
33.5
32.8

6,525
6,091
6,977
5,816
5,736

4 . 8 29, 137 21. 6
4 . 7 27, 924 2 1 . 7
5 . 0 31, 202 2 2 . 5
5 . 0 25, 988 2 2 . 3
4 . 9 25, 837 2 2 . 3

4,298
4,257
4,548
4,024
3,847

5,523
4,753
5,651
6,583
7, 190
7,655
7,602
7,457

5.0
4.4
4.5
4.7
4.8
5.2
5.0
5. 1

22. 1
22. 1
21.6
21.6
21.4
22. 1
21.4
21. 1

3,392
2,985
3,571
4,512
5,258
5,437
5,469
5,012

Total

Total

24, 204
23,711
26, 820
30, 065
32, 148
32,769
32, 343
30, 925

Total

1941: J a n u a r y
F e b r u a r y ___
M a r c h . . _.
April
May
June...
July
August x
Amount:
1940: August
September._
October
November._
December. _

34,
34,
42,
48,
52,
50,
51,
50,

459
909
496
266
802
393
882
587

31.4
32.6
34.2
34.6
35. 1
36.0
34.4
34.5

$121,
117,
125,
102,
98,

979
928
009
267
765

32.4
33.0
32.2
31.2
30.2

$31,
29,
33,
27,
28,

839
401
818
900
666

8 . 4 $93, 931 2 4 . 9 $15, 903
8.2 89, 051 2 4 . 9 15, 566
8 . 7 98, 462 2 5 . 3 16, 826
8 . 5 82, 971 2 5 . 4 15, 122
8 . 8 83, 426 2 5 . 5 14, 918

1941: J a n u a r y
F e b r u a r y . _.
March
April
May
June.— —
July
August1

89,
91,
113,
129,
143,
139,
142,
139,

996
182
574
348
770
647
695
317

29.3
30.7
32.6
32.5
33.0
32.4
32.2
32.3

27,
23,
27,
32,
35,
37,
37,
37,

691
716
842
313
635
372
262
070

9.0
8.0
8.0
8. 1
8.2
8.7
8.4
8.6

1

78,
74,
86,
98,
107,
107,
108,
105,

977
526
178
076
151
827
555
459

25.7
25. 1
24.7
24.6
24.6
25. 1
24.5
24.5

12,
11,
14,
16,
19,
20,
21,
19,

931
662
016
888
705
503
080
182

Percent

Combined
total

Percent

Total

Percent

3 . 2 30, 858
3 . 4 28, 164
3 . 3 30, 635
3 . 4 27, 507
3 . 3 27, 823

22.9
21.9
22. 1
23.6
24.0

17,
16,
16,
14,
14,

178
391
975
239
680

1 2 . 8 134, 702
1 2 . 8 128, 422
1 2 . 3 138, 482
12.2 116,754
1 2 . 7 115, 907

100.0
100.0
100.0
100.0
100.0

3. 1
2.8
2.9
3.2
3.5
3.7
3.6
3.4

26.0
25.7
25.0
24.2
23.4
23.4
23. 6
24. 1

13,
13,
14,
16,
17,
16,
18,
17,

617
303
666
305
769
970
180
334

12.4
12.4
11.8
11.7
11.8
11.5
12. 0
11. 8

109,
107,
124,
139,
150,
147,
151,
146,

689
144
194
525
342
837
110
596

100.0
100.0
100.0
100.0
100.0
100.0
100. 0
100.0

4 . 2 $56, 770 15. 1 $56,
4 . 4 52, 936 14. 8 52,
4 . 3 59, 124 15. 2 55,
4 . 6 51, 504 1 5 . 7 47,
4 . 6 51, 964 1 5 . 9 48,

394
636
734
621
885

15.0 $376,
1 4 . 7 357,
14. 3 388,
14.6 327,
15.0 326,

816
518
973
385
624

100. 0
100.0
100.0
100.0
100.0

44,
43,
47,
55,
59,
57,
61,
59,

154
335
624
972
864
487
991
286

14.3
14. 6
13.6
14. 1
13.7
13.4
14.0
13. 8

307,
296,
348,
398,
435,
430,
443,
430,

640
863
880
305
961
216
039
705

100.0
100.0
100.0
100.0
100.0
100.0
100.0
100. 0

4.2
3.9
4.0
4.2
4.5
4.8
4.8
4.5

Total

28,
27,
30,
33,
35,
34,
35,
35,

53,
52,
59,
65,
69,
67,
71,
70,

494
483
990
794
175
613
634
281

17.5
17.7
17. 1
16.5
16.0
15.6
16. 1
16. 3

891
442
646
708
836
380
456
391

Per
cent

Preliminary estimate

Table 10.—Estimated nonfarm real estate foreclosures, by size of county

Table 11.—Property operations of the H ome
Owners' Loan Corporation

C o u n t y size (dwellings)
Period

U. S.
total

Less
than
5,000

5,000- 20,000- 60,000
and
19,999 59,999
over

1940: J a n . - A u g
August
September
October
November
December

51, 240 5,290
595
6, 128
539
6,294
618
6,305
603
5,832
635
5,639

7,590 10, 674 27, 686
1,338 3 , 3 6 0
835
1,355 3,382
1,018
897 1,319 3,471
1,343 3,054
832
1,103 3,082
819

1941: J a n . - A u g
January
February
March _ _
April
May.
_._ _
June
July.
August.

41, 046 4 , 4 3 7
607
5,474
526
4,950
621
5,650
587
5,445
630
5,375
630
5,047
437
4,834
399
4,271

6,295
800
789
870
853
837
727
741
678

8,801 2 1 , 5 1 3
1, 180 2 , 8 8 7
1,009 2,626
1, 191 2 , 9 6 8
1, 119 2 , 8 8 6
1,236 2 , 6 7 2
1, 149 2 , 5 4 1
959 2 , 6 9 7
958 2,236

Period

1940: August
September
October
November
December

1941: J a n u a r y . _ _ _ _
February
March
.__ _ ...
April
May
... _
June
July
August
1

34




_

Number
of p r o p erties
on h a n d a t
end of
month

Number
of p r o p erties
acquired J

Number
of p r o p erties
sold

1,758
1,701
1,719
1,728
1,580

3,691
3,619
3,886
3,253
2,706

58,
56,
54,
52,
51,

524
598
433
878
722

1,638
1,340
1,327
1,226
1,080
1,270
803
780

2,425
2,223
2,369
2,464
2,458
2,296
1,788
1,793

50,
49,
48,
47,
46,
44,
43,
42,

865
940
856
588
170
922
933
807

Includes reacquisitions of properties previously sold.
Federal Home Loan Bank Review

Table

Table 13.—Lending operations of the Federal
Home Loan Banks

[Amounts are shown in thousands of dollars!

[Thousands of Dollars]

Boston
New York
Pittsburgh.
Winston-Salem
Cincinnati
Indianapolis __
Chicago __ _
Des Moines
Little Rock_
Topeka_
Portland _
Los Angeles
Total

Advances
outstandAd- Repay- ing,
vances m e n t s August
31,1941

Repayments

Advances

$805
1,259
1, 109
1,615
693
361
1,678
573
723
525
395
1, 136
10, 872

Treasury

July 1941

August 1941
Federal H o m e
Loan Bank

14.—Government investments in savings
and loan associations *

$113 $1, 457
985
650
698 1,441
859 2,695
702
679
171
314
1, 198 1,420
250 1, 170
458 1,213
133
421
479
242
679
830

$357
946
945
2,908
966
708
2,340
894
906
384
1,508
1,757

T y p e of operation
Federals

Federals 2
Oct. 1935-August 1941
Applications:
Number
Amount _
Investments:
Number
__ _
A m o u n t __ __ _ _
Repurchases
_ _
N e t outstanding investments
August 1941
Applications:
Number _ _
A m o u n t . __
Investments:
Number
Amount
Repurchases. _

$9, 325
18, 055
16, 140
20, 617
15, 597
10, 812
28,411
14, 834
8,505
8,319
6,499
15, 514

6,390 12, 867 14, 619 172, 628

J a n - A u g . 1941 _ _ 81, 514 110,378
6,030
12, 209
August 1940
76, 863 89, 775
J a n . - A u g . 1940 _
7,768
9,885
August 1939
50, 473 89, 845
J a n . - A u g . 1939 -

H o m e Owners' Loan
Corporation

168, 401
159, 470

State
members

Total

1,862
4, 668
993
5, 661
$50,401 $209, 296 $65, 857 $275, 153
4, 22,0
739
1, 831
4, 959
$49, 300 $176, 935 $45, 564 $222, 499
$28, 016 $38, 597 $9, 391 $47, 988
$21, 284 $138, 338 $36, 173 $174, 511

0
0
0
$1,

°l
058

2
$200

0
0

2
$200

1
0
$50
0
$5, 834 $1, 098

1
$50
$6, 932

1

Refers to number of separate investments, not to number of associations in
which
investments are made.
2
Investments in Federals by the Treasury were made between December 1933
and November 1935.

Table 15.—Changes in selected types of private long-term savings
[Amounts are shown in thousands of dollars]
A m o u n t s sold during m o n t h
Period
Life insurance J

U.S.
savings
bonds 2

1940: A u g u s t . . . ._ _ _ $528, 330 $53, 359
503, 427 47, 122
September. _ _
October. _ _
573, 504 52, 221
November _ _
505, 474 50, 080
December _ _
596, 534 82, 207
1941: J a n u a r y _ _
February. _
March
April
_
May
June
July__
August

522,
537,
598,
597,
604,
594,
582,
581,

762
557
217
203
162
164
292
170

189,
120,
131,
61,
101,
102,
145,
117,

276
680
961
968
581
517
274
603

A m o u n t s o u t s t a n d i n g a t end of m o n t h

Insured
U. S. savings
savings
bonds 4
and loans3
$51,
46,
53,
49,
65,

025
203
982
990
586

$3,
3,
3,
3,
3,

008,
043,
084,
123,
194,

137
626
021
036
793

127,
65,
64,
65,
57,
61,
103,

490
384
633
947
755
448
886

3,
3,
3,
3,
3,
3,
3,
4,

371,
480,
598,
647,
758,
853,
992,
102,

135
040
546
249
822
297
095
528

Change: Last 6 m o n t h s .
i Life Insurance Sales Research Bureau. Face amount of policies sold, excluding group insurance.
* U. S. Treasury Daily Statement. Cash sales, including unclassified sales.
From May 1941: Defense Savings Bonds, Series E. (May figure is revised).
3 New private investments; amounts paid in as reported to the FHLBB.
* U. S. Treasury Daily Statement. Current redemption value. From May
1941: Defense Savings Bonds, Series E.

October 1941




+ 17.89%

Postal
savings5

$1,
1,
1,
1,
1,

297,
295,
295,
298,
304,

1, 313,
1, 317,
1, 319,
1, 317,
1, 310,
1, 304,
1, 306,
1, 308,

Mutual
savings
banks 6

Insured
commercial
banks7

Insured
savings
a n d loans *

476
$2, 059, 097
432
2, 085, 410
859
2, 114, 831
429
2, 143, 360
382 $10, 617, 759 $13, 062, 315 2, 202, 135
954
794
959
102
027
041
807
839

- 0 . 68%

10, 606, 224

13, 107, 022

- 0 . 11%

+ 0. 3 4 %

2,
2,
2,
2,
2,
2,
2,

262,
296,
323,
354,
379,
433,
449,

692
225
041
239
856
513
807

+ 8. 2 7 %

* IT. S. Post Office Department. Outstanding principal, represented by certificates of deposit, excluding accrued interest, outstanding savings stamps, and
unclaimed
deposits. Figures for the last two months are preliminary.
6
Month's Work. All deposits.
78 FDIC. Time deposits evidenced by savings passbooks.
Private repurchasable capital as reported to the FHLBB.

35

Federal Savings and Loan Insurance
Corporation

DISTRICT NO. 3
PENNSYLVANIA:

Philadelphia:
East Allegheny Avenue Building Association, 664 East Allegheny
Avenue.
D I S T R I C T NO. 4

GEORGIA:

(Continued from p. 27)
Indicative of the confidence which the investing
public is placing in insured savings and loan associations is the growth of 17 percent in private capital
of the 2,159 institutions. Government investment
continued to be replaced by funds of individual
savers, with most repurchases of Government funds
being volunteered by the institutions themselves.
Reserves continued to grow in excess of the principal
risk for which they are provided, namely, real estate
owned.
A total of 2,319 savings and loan associations,
with assets of $3,185,800,000, were protected by the
Federal Savings and Loan Insurance Corporation
at the end of August of this year—a growth of 71
institutions and $443,500,000 in resources over the
same month of 1940.
At the end of August, the Insurance Corporation
had accumulated reserves of approximately $30,000000 and a surplus of $622,000.
Progress of an identical group of 2,159 insured
associations

Winder:
First Federal Savings and Loan Association of Winder, Broad and
Athens Streets.

NORTH CAROLINA:

Clyde:
Clyde Building and Loan Association.

OHIO:

DISTRICT NO. 5

Georgetown:
Safety Building and Loan Company, Duffy Building.
ILLINOIS:

D I S T R I C T NO. 7

East Alton:
The Citizens Building and Loan Association of East Alton, Illinois.
Peoria:
Peoria Loan and Homestead Association, 1211 South Adams Street.
WITHDRAWALS FROM THE FEDERAL HOME LOAN BANK SYSTEM BETWEEN AUGUST 16 AND SEPTEMBER 15, 1941
ILLINOIS:

Chicago:
J. I. Kraszewski Building and Loan Association, 1811 South Ashland
Avenue (liquidation).
N E W JERSEY:

Camden:
The Argonne Building and Loan Association, First Camden National
Bank Building, Broadway and Cooper Streets (member's request).
East Orange:
Apex-Sagamore Building and Loan Association, 84-86 Eaton Place
(member's request).
Trenton:
The Prospect Building and Loan Association, Prospect Street and
Pennington Avenue (member's request).

PENNSYLVANIA:

Oil City:
Home Savings and Loan Association of Oil City, 20 East First Street
(member's request).
Philadelphia:
Ark Building and Loan Association, 1437 West Venango Street (voluntary liquidation).
Integrity Federal Savings and Loan Association, 4723 North 15th Street
(merger with Founders-Oxford Federal Savings and Loan Association).

Fiscal Year 1941
[Amounts are shown in thousands of dollars]
June 30,
1941

Item

June 30,
1940

Dollar
change

Percent
change

II. FEDERAL SAVINGS AND LOAN ASSOCIATIONS
CHARTERED BETWEEN AUGUST 16 AND SEPTEMBER 15
DISTRICT NO. 2
N E W YORK:

Total assets
._
First mortgages held (net). .
Real-estate owned
_
C ash and government obligations
Private repurchasable capital
Government investment- _
Reserves and undivided profit
Private investors

_.

$2, 959,149 $2, 601, 541 $+357, 608
2,402, 522 2, 050, 272 +352, 250
115,971
153, 318 -37, 347
211,839
173,408
+38,431
2, 279,154 1, 940, 270 +338,884
197,911
229,050
-31,139
166,834
147,187
+19, 647

+13.7
+17.2
-24.4
+22.2
+17.5
-13.6
+13.3

_ _ 2, 789, 697 2,487, 638 +302, 059

+12.1

New York:
Washington Heights Federal Savings and Loan Association.
DISTRICT NO. 3

PENNSYLVANIA:

Philadelphia:
East Allegheny Avenue Federal Savings and Loan Association, 664 East
Allegheny Avenue (converted from East Allegheny Avenue Building
Association).

CANCELATION OF FEDERAL SAVINGS AND LOAN ASSOCIATION
CHARTER BETWEEN AUGUST 16 AND SEPTEMBER 15
N E W JERSEY:

Directory

of Member, Federal, and

Roseland:
Roseland Federal Savings and Loan Association (merger with the First
Federal Savings and Loan Association of Montclair, New Jersey).

Insured Institutions
Added during August-September
I. INSTITUTIONS ADMITTED TO MEMBERSHIP IN
THE FEDERAL HOME LOAN BANK SYSTEM BETWEEN AUGUST 16 AND SEPTEMBER 15, 1941
DISTRICT NO. 2
N E W JERSEY:

III. INSTITUTIONS INSURED BY THE FEDERAL
SAVINGS AND LOAN INSURANCE CORPORATION
BETWEEN AUGUST 16 AND SEPTEMBER 15, 1941
DISTRICT NO. 4
MARYLAND:

Annapolis:
First Federal Savings and Loan Association of Annapolis, 200 Lee Building, Church Circle.

Paterson:
Totowa Savings and Loan Association, 451 Union Avenue.

N E W YORK:

Highland:
Highland Savings and Loan Association, Main Street.

36




DISTRICT NO. 9
TEXAS:

Gilmer:
Gilmer Building and Loan Association, 216 Buffalo Street.

Federal Home Loan Bank Review
U. S . GOVERNMENT PRINTING O F F I C E : 1 9 4 J

OFFICERS OF FEDERAL HOME LOAN BANKS
CHICAGO

BOSTON
B.

J. ROTHWELL, Chairman; E . H . W E E K S , Vice Chairman; W . H i
NEAVES,

President;

WINANT,

Treasurer; L. E .

H.

N.

FAULKNER,

Vice

DONOVAN,

President;

Secretary;

P.

FREDERICK

GARDNER,

HENDRICK,

Treasurer; CONSTANCE M . W R I G H T , Secretary; UNGARO & SHERWOOD,

A.

NEW
MACDONALD,

NUGENT

President;

FALLON,

Chairman;

YORK
F.

V.

President; R O B E R T

LLOYD,

G. CLARKSON,

Vice

H . C.

JONES,

C. B . R O B B I N S , Chairman; E . J. R U S S E L L , Vice Chairman; R. J. RICHARD-

Vice President;

son, President-Secretary; W . H . LOHMAN, Vice President-Treasurer;
J. M. M A R T I N , Assistant Secretary; A. E . MUELLER, Assistant Treasurer;

Treasurer; F . G§

EMMERT, JAMES, N E E D H A M & L I N D G R E N , Counsel.

PITTSBURGH

LITTLE ROCK

T . TRIGG, Chairman; C. S. T I P P E T T S , Vice Chairman; R. H .
President;

G.

R.

MOINES

Chairman;

STICKEL, JR., General Counsel.

ARDS,

D O M E I E R , Vice President;

DES
D.

D E N T O N C. L Y O N , Secretary; H . B . D I F F E N D E R F E R ,

E.

J. P .

Counsel.

Counsel.

GEORGE

C. E . BROUGHTON, Chairman; H . G. ZANDER, JR., Vice Chairman; A. R.

PARKER,

Vice

President;

H.

H.

RICH-

GARBERI

Secretary-Treasurer; R. A. CUNNINGHAM, Counsel.

W. C . JONES, J R . , Chairman; W . P . GULLEY, Vice Chairman; B . H .
WOOTEN, President; H . D . WALLACE, Vice President-Secretary; J. C.
C O N W A Y , Vice President; W . F . T A R V I N , Treasurer; W . H . CLARK, J R . ,

Counsel.

WINSTON-SALEM
H. S. HAWORTH, Chairman; E . C. BALTZ, Vice Chairman; O. K.
L A R O Q U E , President-Secretary; G. E . W ALSTON, Vice President-Treasurer; J o s .

W.

HOLT,

Assistant

Secretary;

T.

SPRUILL

THORNTON,

Counsel.

TOPEKA
P. F. GOOD, Chairman; R o s s THOMPSON, Vice Chairman; C. A. STERLING,
President-Secretary; R. H . BURTON, Vice President-Treasurer; JOHN
S. D E A N , JR., General Counsel.

CINCINNATI
R.

P.

DIETZMAN,

Chairman;

V M . MEGRUE

BROCK,

Vice

WEBB,

J R . , Secretary; A. L. M A D D O X ,

Treasurer; T A F T ,

STETTINIUS

& HOLLISTER, General Counsel.

F R E D T . G R E E N E , President; G. E . OHMART, 2nd Vice President; J. C«
Secretary-Treasurer;




JOHNSON,

President-Secretary;

IRVING

BOGARDUS,

Vice

President-

HAMMOND,

DUSEN-

BERY, Counsel.

H. B . WELLS, Chairman; F . S. CANNON, Vice Chairman-Vice President;

D E V A U L T , Counsel.

B E N A. PERHAM, Chairman; B E N H . HAZEN, Vice Chairman; F . H.
Treasurer; Mrs. E . M . J E N N E S S , Assistant Secretary; V E R N E

INDIANAPOLIS

MORDEN,

PORTLAND

Chairman;

W A L T E R D . SHULTZ, President; W . E . J U L I U S , Vice President; D W I G H T

BUSCHMANN,

KRIEG

&

Los ANGELES
D . G. D A V I S , Chairman; A. J. EVERS, Vice Chairman; M . M . H U R FORD, President; C. E . BERRY, Vice President; F . C. N O O N , SecretaryTreasurer; VIVIAN SIMPSON, Assistant Secretary.