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FEDERAL HOME LOAN BANK REVIEW SEPTEMBER 1938 ISSUED BY FEDERAL HOME LOAN BANK BOARD WASHINGTON D . C . CONTENTS FOR SEPTEMBER - 1938 SPECIAL FEDERAL HOME Page Home-mortgage investments of life insurance companies Reserve accounts and management An analysis of the building cost index 428 432 435 A Texas house designed for the Federal Home Building Service Plan 439 LOAN BANK REVIEW Published monthly by the FEDERAL HOME LOAN BANK BOARD John H. Fahey, Chairman T, D. Webb, Vice Chairman F. W. Catlett W. H. Husband ARTICLES STATISTICS Residential construction and home-financing activity 440 Residential construction 442 Housing rentals Indexes of small-house building costs 442 443 Foreclosures Mortgage-lending activity of savings and loan associations 443 443 Federal Savings and Loan System Federal Home Loan Bank System 444 444 Federal Savings and Loan Insurance Corporation 445 Statistical tables Nos. 1, 2: Number and estimated cost of new family dwelling units No. 3: Indexes of small-house building costs . . . 446 446 448 Nos. 4, 5: Estimated lending activity of all savings and loan associations . . 450 No. 6: Index of wholesale price of building materials No. 7: Monthly operations of Federal savings and loan associations . . . No. 8: Monthly operations of State-chartered insured associations . . . . No. 9: Institutions insured b y the Federal Savings and Loan Insurance 451 452 452 Corporation FEDERAL HOME LOAN BANK SYSTEM FEDERAL SAVINGS AND LOAN ASSOCIATIONS 453 Nos. 10, 11, 12: Home Owners' Loan Corporation 453 Nos. 13, 14: Federal Home Loan Bank System 454 REPORTS FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION HOME OWNERS' LOAN CORPORATION i IP Membership of the Federal Savings and Loan Advisory Council Resolutions of the Board Directory of member, Federal, and insured institutions added during J u l y August Announcement of directors Index of Volume 4 — F E D E R A L H O M E L O A N B A N K REVIEW 434 455 455 456 457 SUBSCRIPTION PRICE OF REVIEW. The FEDERAL HOME LOAN BANK REVIEW is the Board's medium of communication with member institutions of the Federal Home Loan Bank System and is the only official organ or periodical publication of the Board. The REVIEW will be sent to all member institutions without charge. To others the annual subscription price, which covers the cost of paper and printing, is $1. Single copies will be sold at 10 cents. Outside of the United States, Canada, Mexico, and the insular possessions, subscription price is $1.60; single copies, 15 cents. Subscriptions should be sent to and copies ordered from Superintendent of Documents, Government Printing Office, Washington, D. O. APPROVED BY THE BUREAU OF THE BUDGET. 91960—38 1 HOME-MORTGAGE INVESTMENTS OF ^ LIFE INSURANCE COMPANIES' The increasing participation in the urban home-mortgage field by life insurance companies during 1937 is analyzed in this article to show current major trends. • A STUDY recently completed by the Division In spite of improving trends in home-mortgage of Research and Statistics of the Federal Home lending, life insurance companies found that there Loan Bank Board reveals that life insurance comwas no appreciable improvement during 1937 in the panies are expanding their investments in urban market for home property which they acquired home mortgages more rapidly than in any other type through foreclosure. Although they were able to of mortgage loan and that they are in a position to dispose of the same amount of home property in 1937 shift $4,000,000,000 to the mortgage field when and as in 1936, the volume of acquisition of home propif investments there become sufficiently attractive. erty during 1937 was nearly as great as in 1936. Thus, it may be inIn contrast, the trend in ferred, life i n s u r a n c e disposal of all types of companies will probably acquired real estate was NOTICE participate to an increasupward. FEDERAL HOME LOAN BANK ing extent in the urban It is known that life REVIEW INDEX h o m e - m o r t g a g e field, insurance c o m p a n i e s although during the last finance approximately The Index of Volume 4, Federal Home decade they have been one-sixth of the total real Loan Bank Review (October 1937-Seprelatively uninterested in estate mortgage debt of tember 7938), is published at the back this particular form of the country. Until the of this issue beginning on page 457. investment. development of annual surveys by the Federal Specifically, the study Home Loan Bank Board, shows that life insurance however, information as to their types of mortcompanies invested 3.27 times as much money in gage lending was available only in the form of a new mortgage loans upon nonfarm homes in 1937 rough division between farm and nonfarm real estate. as in 1935, the year in which the first substantial The present study goes further and permits an upturn in their new urban home-mortgage lending analysis of the nonfarm home-mortgage holdings occurred. Moreover, an increasing proportion of of the companies. (For the purpose of this study, total new mortgage investments by these companies home property is defined as nonfarm homes of is secured by home property. 1- to 4-family units, extended to include joint This is evident from the fact that new homehome and business structures which are primarily mortgage loans in 1937 increased 248 percent over residential.) 1935, whereas new mortgage investments of all The increasing volume of new home-mortgage kinds by life insurance companies increased only 158 lending comes as part of the general improvement percent. As a result of this marked trend, new which is taking place in the position of life insurance home-mortgage loans, which made up 28 percent of companies in the mortgage-financing field, as is total new mortgage loans in 1935, increased to nearly evident from Table 1. After a steady decline for 38 percent of the total in 1937. several years, the balance of total mortgage loans * The estimates in this article were prepared by the Division of Research and outstanding began to rise in 1937. Total new Statistics of the Federal Home Loan Bank Board and are based upon the answers to a special questionnaire from 80 life insurance companies which held approximortgage loans have increased substantially each mately 95 percent of all life insurance company assets on Dec. 31,1937. Table 3 year since 1935. lists the most important statistics from this survey. 428 Federal Home Loan Bank Review total mortgage loans outstanding of life insurance companies at the end of 1937, however, amounted to only 20 percent of their total assets. From 1926 to 1928 these loans represented 43 percent of life insurance company assets. During these intervening years, liquid assets (principally U. S. bonds) have risen steadily and at the end of 1937 reached unprecedented proportions, thus taking up much of the slack which resulted from the decline in mortgage investments. If and when mortgage investments become sufficiently attractive, life insurance companies could shift at least $4,000,000,000 to the real estate mortgage field without even closely approaching the 43 percent ratio of 1926-1928. NEW MORTGAGE INVESTMENTS: 1937 [Table S—Section III] 1936 492.941 1937 353.6 fe*?-^: 718.674 Figures are millions of dollars NON-FARM HOMES.. FARM PROPERTY..M&1 Volume in 1937, expressed as percentage of 1936 volume Percent Type of mortgage loan Home Urban commercial Farm Total 348 232 194 258 In other words, life insurance companies made more than two and a half times as great a volume of total new mortgage loans in 1937 as in 1935 but the volume of home-mortgage loans was nearly three and a half times as great, while the volume of urban commercial loans and of farm-mortgage loans was less than two and a half times the 1935 volume. Mortgages on urban commercial properties, such as hotels, office buildings, and large apartment buildings continued to account for the bulk of insurance company mortgage investments. The accompanying table, giving the proportion of new mortgage loans of each category to total loans for the years 1935, 1936, and 1937, shows that urban commercial loans constitute roughly one-half of current new mortgage investments of life insurance companies. URBAN COMMERCIAL. 1935 Percent 1936 Percent 1937 Percent 27.9 16.8 55. 3 32.0 14.2 53. 8 37.6 12.7 49. 7 100.0 100.0 100.0 Type of mortgage loan This bar chart shows that total new mortgage loans made by life insurance companies during 1937 amounted to $713,000,000, an amount 45 percent greater than the $493,000,000 total made in 1936. The following tabulation shows the increasing emphasis which is currently placed upon homemortgage lending: Home property Farm Urban commercial It is significant that farm-mortgage loans and urban commercial loans continue to make up an Table 1.—Estimated home property items and estimated total real estate items of all life insurance companies, 1933-1937 [Source: Division of Research and Statistics, Federal Home Loan Bank Board] [Thousands of dollars] Unpaid balance of mortgage loans Year 1933 1934 1935 1936 1937 1 Nonfarm homes * Total $1, 766, 661 1, 505, 195 1, 319, 000 1, 264, 000 1, 278, 918 $6, 719, 781 5, 811, 565 5, 404, 000 5, 178, 000 5, 254, 779 Real estate owned outright (excluding office buildings and land contracts) New mortgage loans made Nonfarm homes * Nonfarm homes * $190, 275, 300, 302, 298, 623 451 308 427 634 Total $864, 255 1, 180, 102 1, 651, 862 1, 805, 537 1, 784, 715 $74, 819 145, 910 244, 607 Total $276, 086 492, 941 712, 674 Real estate disposed of Nonfarm homes * Total $49, 381 $148, 290 73, 141 194, 008 71, 475 227, 426 Does not include (Item 2a, Table 3) joint home and business structures primarily residential. September 1938 429 increasingly smaller proportion of the total and that home-mortgage loans have increased from 27.9 percent of the total in 1935 to 37.6 percent in 1937. The average size of a new home-mortgage loan made in 1937 was $5,654, somewhat smaller than the average loan of $5,831 in 1936. MORTGAGE LOANS OUTSTANDING: 1937 [Table 8—Section J] K c^Non-Farm Homes ^ * 26A % Farm Property ^S\ 17.1% Urban Commercial^/ 56.5% Total mortgage loans outstanding, after a steady decline each year since 1931, rose $77,000,000, or 1.5 percent during 1937, to $5,254,779,000, or about 20 percent of total resources. The circle chart shows the percentage distribution of the loans outstanding at the end of 1937. Home-mortgage loans outstanding, which have remained at a ratio of approximately 25 percent of total mortgages for the past three or four years, likewise have declined steadily in amount during recent years. The reports for 1937, however, showed a reversal of this trend: mortgages held on home properties by life insurance companies increased $85,000,000, or about 6 percent from the end of 1936. (A^#ry large proportion of this increase was due to the rise recorded for the item "joint home and business structures—primarily residential". Table 3 shows irregular changes between the two years for subitems (a) and (b) under this heading which apparently indicate a shifting of amounts between the two items due to incomplete reporting in previous schedules.) Farm mortgages made up the only major category of loans outstanding which declined during 1937. The decrease amounted to $46,000,000, and brought farm mortgages to a point about 5 percent below the preceding year. This is a continuation of the trend which has been well-defined during the past 10 years. Since 1927, the balance of farm mortgage loans outstanding has decreased each year, dropping from 15 percent of total assets at the end of that year to 3.4 percent of assets at the end of 1937—a 59-percent drop for the 10-year period. Mortgages on urban commercial properties were the most substantial contributing factor to the rise shown during 1937 for total mortgage loans outstanding. REAL ESTATE: [Table 8—Sections II and IV] NON-FARM HOMES [Source: Division of Research and Statistics, Federal Home Loan Bank Board] [Amounts are shown in thousands of dollars] Value of real estate acquired during year Year 1935 1936 1937 Ratio of real estate acquired to balance of mortgages of the same type outstanding at beginning of period Homes All properties Homes $76, 368 76, 401 75, 468 $620, 050 347, 683 206, 604 Percent 5. 1 5.7 5.8 All properties Percent 10.7 6.4 4.0 41.96% FARM PROPERTY URBAN COMMERCIAL Table 2.—Estimates of real estate acquired by all life insurance companies during 1935, 1936, and 1937 1937 78.12% UNPAID BALANCE ON MORTGAGE LOANS-. REAL ESTATE OWNED.. These three bars show the relationship existing between each type of real estate owned by life insurance companies and the total insurance company interest in that type of real estate—the unpaid balance of mortgage loans plus the value of the real estate owned outright. Nonfarm home property displays the most favorable relationship, with farm property definitely making the poorest showing. The amount of real estate owned by life insurance companies through foreclosure declined more than 1 percent during 1937 from the amount held at the end of the preceding year, thus reversing for the first time the steady upward climb of this account in the past few years (Section II). This decline was due primarily to an 11-percent decrease in the amount of farm property owned. Urban commercial property owned showed an increase of nearly 8 percent during Federal Home Loan Bank Review Type of real estate owned nonfarm home property owned remained practically stationary in amount. Although farm property in 1937 bettered its relationship to total real estate owned, the farm element is still relatively large since mortgages on this type of property represent only about 17 percent of all mortgages outstanding, yet farm property at the end of 1937 made up 36 percent of the total amount of real estate owned by life insurance companies. At the end of 1937, the real estate which life insurance companies owned outright was classified in the following proportions of the total: Percent of tota I Nonfarm home Farm Urban commercial 17. 1 36.3 46. 6 100.0 No decline in real estate owned would have been recorded during 1937 had it not been for "real estate sold on contract" as a medium of disposition. This account showed increases during 1937 of 32 percent for all types of property and of 81 percent for homes. Real estate owned outright decreased $21,000,000 (Continued on p. 456) Table 3.—Estimated total amount of real estate investments by all life insurance companies of the United States as of Dec. 31,1937, and Dec. 31,1936 x [Source: Federal Home Loan Bank Board. Estimated by the Division of Kesearch and Statistics from data reported by 80 (including the 34 largest) life insurance companies, possessing assets amounting to about 95 percent of those of all companies. Since all reporting companies did not report all items, some estimates are based on reports for companies holding between 54 percent and 95 percent of all assets] [Amounts are shown in thousands of dollars] Amount Type of property securing investment Dec. 31, 1936 $1,278,918 $1,264,000 +1.2 $4,483 $4,621 110,629 74,321 2,895,056 895,855 41,000 161,000 2,770,000 942,000 2.1 1.4 55.1 17.1 0.8 3.1 53.5 18.2 +169.8 -53.8 +4.5 -4.9 14,537 8,652 70,284 5,737 16,633 53,276 55,342 5,740 5,254,779 5,178,000 100.0 100.0 +1.5 298,634 302,427 16.7 16.7 -1.3 _ 6,850 194,236 637,460 647,535 2,347 89,555 682,493 728,715 0.4 10.9 35.7 36.3 0.1 5.0 37.8 40.4 +191.9 +116.9 -6.6 -11.1 _ 1,784,715 1,805,537 100.0 100.0 -1.2 244,607 145,910 34.3 29.6 +67.6 6,654 5,831 23,807 20,661 333,169 90,430 11,831 15,281 249,921 69,998 3.3 2.9 46.8 12.7 2.4 3.1 50.7 14.2 +101.2 +35.2 +33.3 +29.2 7,818 7,895 55,882 6,154 49,091 64,750 72,970 5,436 712,674 492,941 100.0 100.0 +44.6 71,475 73,141 31.4 37.7 -2.3 5,182 5,639 3,283 24,555 44,161 83,952 776 2,910 45,010 72,171 1.5 10.8 19.4 36.9 0.4 1.5 23.2 37.2 +323.1 +743.8 -1.9 +16.3 21,742 37,777 38,301 6,819 6,867 29,100 42,382 6,464 227,426 194,008 100.0 100.0 +17.2 . Total unpaid balance of mortgage loans.II. Real estate owned outright: • 1. Nonfarm homos (1 to 4 fa mi If AS) Total real estate owned outright _ Ratio to total Dec. 31, 1937 I. Unpaid balance of mortgage loans * on: 1. Nonfarm homes (1 to 4 families)3.. _ 2. Joint home and business structures (1 to 4 family units): a. Primarily residential _ b. Primarily commercial ._ 3. Other nonfarm property * 4. Farm property.. _ 2. Joint home and business structures (1 to 4 family units): a. Primarily residential b. Primarily commercial.. 3. Other nonfarm property 4. Farm property Average loan 1937 1936 Percent Percent 24.4 24.3 Percent change 1937 6,036 1 14,241 42,830 64,948 8,282 1936 6,812 28,277 92,611 54,252 8,423 B III. New mortgage loans made during the year on: 1. Nonfarm homos (1 to 4 fami lifts) 2. Joint home and business structures (1 to 4 family units): a. Primarily residential b. Primarily commercial.. 3. Other nonfarm property 4. Farm property _ Total new mortgages made during year . IV. Real estate disposed of during the year: 7 1. Nonfarm homes (1 to 4 families) 2. Joint home and business structures (1 to 4 family units): a. Primarily residential „ b. Primarily commercial 3. Other nonfarm property 4. Farm property. Total real estate disposed of during year - _ — 1 Certain estimates in this report vary somewhat from estimates released by the Federal Home Loan Bank Board in the March 1938 REVIEW. In explanation, this sample included a larger number of institutions, and the sample information was as of Dec. 31,1937, whereas in the earlier tabulation it was as of September 1937. a Excludes real estate owned outright, properties owned subject to redemption, and properties sold under contract. 1 All purely residential structures containing not more than four family units. *5 Includes residential or joint home and business structures that contain five or more family units. Includes all properties held for investment, such as special housing developments; excludes all properties held subject to redemption, those sold under contract, offices and other properties used in carrying on the business. • Includes amount disbursed for refinancing of mortgages previously held by other institutions, and amount of increase involved in refinancing mortgage loans by same7 institution. Excludes recasting of loans representing no change in outstanding principal balance. Includes all properties sold under contract or otherwise even though title may not have passed in the first instance. September 1938 431 RESERVE ACCOUNTS AND MANAGEMENT3 This article, the first in a series, analyzes the various types of reserves used in savings and loan associations. Later articles will discuss reserve requirements under the various State laws and under Federal regulations, and will analyze the experience of associations of different sizes, confronted with radically different operating problems, in reaching a satisfactory reserve policy. • EVENTS of recent years have clearly demonstrated the importance of reserves in the financial structure of modern savings and loan associations. Adequate reserves provide a cushion against unusual losses and contingencies. In addition, they permit greater flexibility of management policies in meeting the problems arising from changing conditions. For example, the management of an association with adequate reserves, since it can operate on a narrower margin, can take steps to meet competition in interest or dividend rates. For what purposes should such reserves be established? How large should they be? To what extent can regulatory legislation protect institutions and the investing public by requiring the setting up of such reserves? Historically, it may be recalled that the recognition of the importance of reserves is a fairly recent innovation among savings and loan institutions. Early building societies were organized for the sole purpose of providing each member with a mortgage loan. When that function had been performed, their lives ended. Until the actual termination of the association, no earnings were distributed, and consequently all losses were taken from a common fund. With the development of the perpetuating type of savings and loan association, however, regulatory laws were placed on the statute books. In these early laws there was little recognition of the fact that savings and loan associations should set up reserves. Many States limited the size of the reserves by law. The legal supervision of associations began with the requirement that regular reports of their activities must be sent to State officials. Finally, examinations were made compulsory. Meanwhile, the need for reserve accounts for savings and loan associations gradually was acknowledged, but the deci432 sion to establish reserves was frequently left to the association's own board of directors. In later years, a few States led the way in requiring more adequate reserves in the savings and loan associations under their supervision. It was not, however, until recently that the adequacy of reserve funds was given the serious consideration it merited. This resulted partly from progressive statutes passed by various States and partly from new Federal regulations. Hand in hand with the development of such types of progressive legislation came the rapidly changing attitude of the management of savings and loan associations toward reserves. In earlier days, minimum statutory reserve requirements were generally considered the maximum necessary. As management participated in the discussion and formulation of new minimum reserve requirements, both in Federal regulations and in State enactments, the feeling grew that legal reserves were in reality only the minimum requirements, to be augmented as earnings permitted and judgment dictated. The growth in reserves became a definite measure of progress and development. Progressive management emphasized to association members that the surplus of earnings left and transferred to reserves, after paying operating expenses and dividends on savings funds, was a reflection of good management and resulted in building a stronger institution. T H E NEED FOR RESERVES Current discussion of reserve problems shows general agreement on the necessity of providing specific reserves for depreciation against all assets declining in value. In this way losses may be charged directly to the period in which they are incurred, and thus no undue burden falls upon any particular operating period. Federal Home Loan Bank Review ^ p t e q u a t e specific reserves for depreciation of office building, furniture and fixtures, equipment, real estate, securities, or any other assets that have declined in value, will promote confidence in the management of the institution on the part of the investing public. When such reserves have been set up the financial statement will show clearly the approximate value of assets. I t is true that realization of assets may bring more or less than this approximate value, but such value is as close to the actual realization as the use of scientific methods and good judgment makes possible. If an institution is to avoid impairment of capital when unforeseen losses occur, general reserves must be established. The decisions of management can not always prevent loss to the institution, and general reserves enable an association to absorb losses which may occur through errors in judgment. Also, there are losses resulting from contingencies over which the institution has no control. Among these are those caused by fluctuations of the business cycle, and other national factors, as well as local conditions of industrial activity, employment, shifting property values, or other unusual circumstances. Such factors also will result at times in losses greater than those which were anticipated in building up specific reserves for the depreciation in value of assets. I t is frequently the practice to consolidate specific and general reserves, calling the consolidated reserve a general reserve. This fusion tends to conceal the identity or type of losses which the reserves are intended to cover. As a consequence, the investor is handicapped in determining the wisdom or soundness of the reserve policy. Also, he may receive the impression that all assets are stated at their realizable value and that the entire reserve constitutes a protection against an impairment of capital resulting from losses which cannot be anticipated. As far as the actual protection to the shareholder is concerned, the question of earmarking specific reserves or merging them into a lump sum is of little consequence, assuming that the total amount is the same. The major point at stake is the presentation of a financial statement which reflects the bases upon which the reserves are determined and what they are intended to cover. Specific reserves give the investor a more accurate picture of particular asset items. T Y P E S OF KESERVES Today management becomes more and more concerned with the problem of reserves. This has been brought about largely as a result of the experiSeptember 1938 ences arising out of the recent general economic depression. Associations with adequate reserves were able to withstand losses, and continue to earn a satisfactory return on invested capital. Those institutions which had not established adequate reserves found it necessary to reduce or discontinue dividends, and in some cases an impairment of capital resulted. What types of reserves should be established and how shall management determine the minimum necessary for adequate protection against the many risks of loss? The present article treats the different types of reserves which good management today commonly establishes. Later articles will discuss the statutory reserve requirements of the different States and under Federal regulations and will draw upon the experience of various associations confronted with radically different operating problems. Reserves may be classified as either "specific" or "general". I t is commonly accepted practice today for management to establish a specific reserve for the depreciation of assets in order to recognize and make allowance for normal declines in value, due to deterioration and obsolescence. Such a reserve is established against the association's office building and built up at rates determined by experience. A similar reserve is also established against normal depreciation of furniture, fixtures, and equipment, including automobiles owned by an association. Normal depreciation for this type of assets is not based solely upon usage, since the factor of anticipated replacement for modernization enters. Constant improvements may require replacement, even though the assets still are usable. Since property acquired by foreclosure is reconditioned, if necessary, and then placed on the market for sale, ordinary depreciation reserves need not be established against it. When such property has been held for a period of time, however, it has been shown to be the best practice to recognize normal deterioration. In addition to this factor, there are always the risks of declining neighborhood standards, market fluctuations, and other conditions. These may so affect the value of the property that the association will realize upon sale an amount less than the value at which it has been carried on the books. Since the amount of such depreciation of owned real estate can be approximated by appraisal, a specific reserve may be provided in an amount equal to the difference between the book value and the appraised value. Other specific reserves are also commonly established by management today. A reserve for uncol433 lected interest is becoming recognized as desirable. In the case of junior liens, the best judgment of many successful managers has been that unless the association also holds the first lien, the junior liens should be offset by a full reserve. GENERAL R E S E R V E S Although management can establish reserves to protect the institution against losses which may be foreseen with reasonable accuracy, no business manager can anticipate the future so clearly as to provide specifically against all items of loss. His only means of protecting against them is to establish general reserves. Where specific reserves have been set up, general reserves represent a margin of safety to the shareholders over and above all anticipated losses. They include such accounts as the "Federal insurance reserve" required of all insured institutions, "reserve for contingencies", and legal or statutory reserves, after specific reserves have been provided for known or anticipated losses, or assets have been written down to appraised value by charges to such general reserve accounts or to undivided profits. MAINTENANCE OF P R O P E R R E S E R V E S Two fundamental factors have greatly influenced the development of the reserve policy of savings and loan associations: (1) State statutes have been enacted and Federal regulations adopted, creating minimum reserve requirements; (2) Management has recognized the fact that these are minimum reserve requirements and has attempted to clarify and to improve the existing concept of reserves both for the benefit of the institution and for its shareholders. Today, adequate reserves assist management in maintaining a regular rate of return to investing members by eliminating the necessity of using current earnings to cover losses which may have resulted from transactions which occurred in prior operating periods. The question of what constitutes adequate reserves, however, is still open to debate. Rapidly growing associations often need more than the minimum required reserves to afford proper protection to their shareholders. On the other hand, the establishment of too large reserves will temporarily limit the rate of return on investment and withhold earnings which properly should go to investors. A sound reserve policy helps an association to create confidence among the investing public; yet 434 the law can set only minimum standards. " ^ J s impossible to establish statutory reserve requirements which will be satisfactory for all sections of the country and which will be adaptable to all sorts of operating conditions. The maintenance of adequate reserves, both specific and general, is the responsibility of management. Membership of the Federal Savings and Loan Advisory Council • T H E Federal Home Loan Bank Board announced the names of the members of Federal Savings and Loan Advisory Council for fiscal year 1938-1939. Representatives elected the 12 Federal Home Loan Banks are: has the the by Boston: Raymond P. Harold, Worcester Cooperative Federal Savings and Loan Association, Worcester, Massachusetts. New York: LeGrand W. Pellet, The Building and Loan Association, Newburgh, New York. Pittsburgh: James J. O'Malley, First Federal Savings and Loan Association of Wilkes-Barre, Wilkes-Barre, Pennsylvania. Winston-Salem: George W. Bahlke, Progress Building Association, Baltimore, Maryland. Cincinnati: Herman F. Cellarius, San Marco Building and Loan Association, Cincinnati, Ohio. Indianapolis: William C. Walz, Huron Valley Building and Savings Association, Ann Arbor, Michigan. Chicago: Morton Bodfish, United States Building and Loan League, Chicago, Illinois. Des Moines: L. A. Boyles, Yankton Building and Loan Association, Yankton, South Dakota. Little Rock: I. Friedlander, Gibraltar Savings and Building Association, Houston, Texas. Topeka: George E. McKinnis, First Federal Savings and Loan Association of Shawnee, Shawnee, Oklahoma. Portland: Frank S. McWilliams, Fidelity Savings and Loan Association, Spokane, Washington. Los Angeles: Harold B. Starkey, Bay City Building and Loan Association, San Diego, California. Members of the Council appointed by the Federal Home Loan Bank Board are: Ernest T. Trigg, National Paint, Varnish and Lacquer Association, Philadelphia, Pennsylvania. Joseph H. Soliday, Franklin Savings Bank, Boston, Massachusetts. Paul F. Good, Attorney, Lincoln, Nebraska. Will C. Jones, Jr., The Murray Company, Dallas, Texas. Charles T. Fisher, J r , National Bank of Detroit, Detroit, Michigan. David G. Davis, Raphael Weill & Company, San Francisco, California. Federal Home Loan Bank Review AN ANALYSIS OF THE BUILDING COST INDEX This article, fourth and last in a series, analyzes the cost of materials and labor used in building the standard house. Based on the building cost index published monthly in the REVIEW, it covers 24 cities, located in four Federal Home Loan Bank Districts, reporting in February, May, August, and November. • T H E introductory article of this series on the building cost index appeared in the M a y R E V I E W and indicated the trend of material and labor costs for the United States as a whole. Although material costs rose throughout 1936, a sharp increase took place between October 1936 and May 1937 which accounted for a large part of the increase in total costs. The rise in labor costs has been steadier but with some acceleration during the same 7-month period. The peaks both in material and labor costs were reached during the summer of 1937. Since that time labor costs have remained relatively stable. Material prices have fallen steadily since last autumn. Lumber was the principal contributor to the sharp rise in material costs in 1937 in the majority of the cities studied. Subsequent declines in the cost of lumber eventually offset this increase. With the exception of masons' supplies, costs in the other material groups showed substantial increases during 1937 in each of the 12 Federal Home Loan Bank Districts. If one accepts the theory that the prospective home owner can purchase a home costing not more than two and one-half times his annual income, the family with an income of $2,500 a year could afford a home similar in design to the standard house which is used as the basis for the building cost index. The cost of the semi-completed standard house averages around $6,000, according to the index for the majority of the reporting cities. I t must be emphasized that the house is not completed ready for occupancy nor do reported costs include the cost of land. (See the footnote to Table 3, page 448 for a brief explanation of the basis of the index.) In using the cost index as a guide, one may obtain an idea of the size and type of home which can be built for the money in the individual areas by study- September 1938 91960—38 ing the descriptive article on page 353 of the July R E V I E W in connection with the statistical data for the city under consideration. GEOGRAPHIC VARIATIONS IN MATERIAL AND LABOR COSTS Throughout this series of studies, a wide variation has appeared in the cost of both materials and labor in the reporting cities. For instance, the 1937 average cost of lumber was highest among cities of this cycle in Pittsburgh, where over $2,340 was estimated as necessary to provide studding, millwork, finished lumber, and miscellaneous items such as insulation. This high cost is probably due largely to the inaccessibility of timber in the Pittsburgh area (see Table 2 on page 436). The cost of lumber in Little Kock, on the other hand, was only $1,660, lower than in any other reporting community in this group and $680 less than the amount allotted for lumber in Pittsburgh. The nearby stands of timber in the South, much of which is inexpensive Southern pine, could account for such a wide spread. 435 Table 1.—Average cost of materials and labor used in constructing a standard 6-room frame hous^jly reporting periods [Includes reporting cities in Pittsburgh, Cincinnati, Little Rock , and Los Angeles Federal Home Loan Bank Districts] 1937 1936 Feb. Aug. May Nov. Feb. May 1938 Aug. Nov. Feb. $1, 733 $1, 742 $1, 762 $1, 781 $1, 920 $1, 994 $2, 027 $1, 978 $1, 912 Total lumber May $1, 890 312 571 641 209 306 574 650 212 309 584 656 213 308 594 666 213 335 637 724 224 352 663 750 229 347 680 767 233 337 665 748 228 313 642 732 225 307 645 713 225 Masons' materials Hardware Painters' materials 647 93 83 651 92 85 656 92 86 655 91 86 660 94 88 670 102 93 660 102 94 662 101 92 660 101 88 652 103 86 Total heating and plumbing 655 666 679 688 700 735 731 725 709 696 Heating supplies Plumbing supplies 258 397 262 404 269 410 274 414 277 423 289 446 286 445 283 442 277 432 277 419 Total materials. 3,211 3,236 3,275 3,301 3,462 3,594 3,614 3,558 3,470 3,427 1,537 1,587 1,609 1,634 1,679 1,758 1,809 1,812 1,811 1,801 Unfinished lumber Millwork Finished lumber.. Miscellaneous items Total labor _-_ Table 2.—Cost of materials and labor used in constructing a standard 6-room frame house, Federal Home Loan Bank Districts and cities—Average month of 1936 and 1937 Lumber Federal Home Loan Bank Districts and cities 1936 AVERAGE—all reporting cities No. 3—Pittsburgh Wilmington, Del Harrisburg, Pa Philadelphia, P a Pittsburgh* Pa Charleston, W. Va ... . . . No. 5—Cincinnati Lexington, K y Louisville, K y Cincinnati, Ohio Cleveland, Ohio Columbus, Ohio Memphis, Tenn Nashville, Tenn No. 9—Little Rock Little Rock, Ark New Orleans, La Jackson, Miss.__ Albuquerque, N . Mex Dallas, Tex Houston, Tex San Antonio, Tex_ No. 12—Los Angeles Phoenix, Ariz Los Angeles, Calif San Diego, Calif— San Francisco, Calif. Reno, Nev 436 m 1937 i Masons' materials 1936 1937 $663 1 1936 Heating and plumbing supplies Painters' materials Hardware 1937 1936 1936 1937 1937 Total materials Total labor 1936 1937 1936 1937 $1,756 $1,978 $100 $85 $92 $674 j $723 $3,259 $3,556 $1,597 $1,764 1,760 2,030 632 1 641 1 89 93 82 86 624 | 678 3,187 3,528 1,555 1,749 1,714 j 1,850 ' 1, 514 2,023 1,699 1 1,871 2,108 1,878 2,344 1,949 636 1 608 617 686 614 j 646 601 614 713 633 82 93 95 91 91 1 93 99 94 89 80 87 80 76 87 86 87 82 86 91 633 631 610 592 655! 706 672 646 646 718 3,145 3,269 2,916 3,468 3,139 3,400 3,561 3,319 3,883 3,480 1,519 1,546 1,410 1,656 1,643 1,622 1,613 1,767 1,949 1,793 1,719 1,923 613 635 j 80 1,696 1 1,706 1,736 1,845 1,838 ! 1,571 , 1,641 1,861 1,839 1,940 2,122 2,056 1,774 1,867 680 1 616 j 631 569 556 604 632 704 631 635 i 591 584 629 670 90 86 1 79 65 79 80 78 1,776 1,986 704 717 1,580 1,792 1,749 1,782 1,853 1,683 1,993 1,660 2,144 1,808 2,015 2,155 1,893 2,225 681 667 705 898 589 706 683 677 686 758 875 623 712 689 1,773 1,993 657 1,842 1,690 1,636 1,806 1,891 2,110 2,021 1,886 1,965 1,983 756 548 623 675 685 $653 $92 j 84 1 91 81 92 655 703 3,148 3,444 1,623 1,818 122 99 83 71 90 90 88 82 77 76 82 81 85 84 99 86 87 93 90 92 96 728 643 658 680 610 635 628 750 699 708 728 707 689 643 3,276 3,128 3,180 3,241 3,164 2,975 3,070 3,536 3,354 3,453 3,605 3,527 3,274 3,464 1,172 1,608 1,920 2,124 1,698 1,436 1,402 1,338 1,944 2,138 2,275 1,884 1,745 1,400 101 111 89 94 718 765 3,388 3,673 1,469 1,580 113 78 107 97 89 108 117 113 89 119 108 103 117 129 87 77 85 95 95 99 88 92 82 93 106 102 92 93 730 679 718 757 660 842 638 764 721 853 766 670 885 699 3,191 3,293 3,364 3,629 3,286 3,438 3,519 3,306 3,722 3,631 3,872 3,653 3,699 3,835 1,355 1,281 1,358 1,731 1,637 1,584 1,336 1,282 1,453 1,543 1,927 1,637 1,665 1,553 650 100 103 87 93 691 738 3,308 3,577 1,784 1,960 744 534 602 679 692 117 106 87 81 111 109 115 94 86 113 92 i 82 84 79 99 99 90 91 87 100 785 650 688 666 668 843 709 711 710 717 3,592 3,076 3,118 3,307 3,454 3,905 3,469 3,384 3,527 3,605 1,713 1,585 1,659 1,927 2,036 1,870 1,730 1,990 2,058 2,154 1 Federal Home Loan Bank Review O eie highest cost of the combined total materials last year was reported in Phoenix, probably due largely to high transportation charges since lumber and cement are not readily available and there is almost no manufacture of such items as hardware, paint, and heating and plumbing supplies. The high average cost of materials in Albuquerque (another fairly inaccessible city) is traceable principally to top prices for masons' and painters' materials. The highest labor costs reported for 1937 came from Cleveland—a total of $2,275. Memphis recorded the lowest total material cost among the reporting communities ($3,274); all material prices were comparatively low. Little Rock, which reported the next lowest material costs due to low lumber prices, also recorded the lowest labor costs—$1,280, or nearly $1,000 less than the estimated total expenditure for labor in Cleveland. TRENDS IN MATERIAL AND LABOR COSTS Costs within the reporting group of cities rose by quarterly periods in each of the material classifications until May 1937 (Table 1, facing page). Lumber was the only item to show a significant increase in prices during the May-to-August interval in 1937, while each of the other groups leveled off. By May of this year, however, lumber costs had tumbled below the level reported for February 1937. Each of the other material price groups, except hardware, has fallen since the middle of last year. Average labor costs for the 24 cities rose steadily until November of last year. For the following two reporting periods, February and May, very slight declines were shown. From 1936 to 1937, total material costs rose significantly in all of the 24 reporting communities. Increases in the total labor cost were registered in all but three of the cities. The current national trend in material and labor costs is shown in the chart on the following page. The index of material costs, which stood at 109.6 in December 1937, fell to 105.7 in July, while the index of labor costs during this same period rose from 114.0 to 114.8. A study of the trend of the total cost of the standard house in the 24 cities between May and August of this year is presented on page 443 of the i 'Residential Construction and Home-financing Activity'' section of this issue of the REVIEW. In using the data in this section, it must be remembered that allow- September 1938 PERCENT INCREASE OVER 1936 IN 1937 MATERIAL AND LABOR COSTS for constructing a standard six-room frame house in 4 selected Federal Home Loan Bank Districts (Source: Division of Research S Statistics, Federal Home Loan Bank Board) DECREASED) 5 5 O I I I I I I I INCREASE (%) 10 I 15 t i l l T~I—i—r LUMBER 3 5 9 12 I I MASONS' MATERIALS 2 3 i- 5 = • a> 5 12 i3 1 5 2 12 3 5 9 12 TOTAL LABOR +12.0 + 76 + 9.9 I 5 I I I i 1 1 1 ! O 5 r i T l i l t 10 15 ances have been added to material and labor costs for insurance, overhead, and profit to the builder. 437 TREND OF MATERIAL AND LABOR COSTS FOR CONSTRUCTING A STANDARD FRAME HOUSE UNITED STATES AND FEDERAL HOME LOAN BANK DISTRICTS [Source: Federal Home Loan Bank Board. Based on building costs published monthly in F.H.L.B. Review] lour U Nl T l i D S>VXT Ei l9rtL \C\J\ 120 X UJ o z ^" •^ I lOr LABOft^j -J...L.J:.A. "1" ^ I ! ' 1 I 1 „, f MATERIALS (HtUHMH^*1 ioo[ x ^ UJ 1 MO o 100 J an.1936 OC 90fcJ—i bd bdbdb d b= J F M A M J J A S O N D J F M A M O J A S O N D J F M A M J J A S O N D 1936 1937 1938 90 130 C i l l i ^ Q l O K ^ I L O K Z Q : UJ < O U k l < 3 U l b ) < 3 U j O 2 "> ( 0 0 2 - > t f ) 0 2 - » ( 0 '35 1936 1937 1938 130 ri"-<:nsicIN N / 120 ••..ty _ MO 100 I/ LPeb 1936 -/ 00 90 b=±d= bdb= 1936 1937 1938 1936 1938 1937 '35 1936 1937 [T3 - •T OF>EI<A »••• x* / / i~ S S •** mr1 •*. / 100 L*/ **. i Zta?. / S J 5 - / bd1 — [^J .. .4 1 i a 3 A 5 i » 0 9 t 1937 '35 00 U . a E < t Z b u S < 2 u . Z 1936 1937 1938 wi t nh M MS3n 1938 5 0 1938 Federal Home Loan Bank Review A TEXAS HOUSE DESIGNED FOR USE UNDER THE FEDERAL HOME BUILDING SERVICE PLAN This well-planned small house illustrates one of the basic objectives of the Home Building Service Plan: it is locally designed, pri* marily for local use, thus assuring a house adapted to the conditions peculiar to the specific locality. For example, ventilation is facilitated by the large ridge ventilator at the apex of the hip roof. Construction Exterior finish Ceiling height Cubic feet Approved for use under the Federal Home Building Service Plan September 1938 Designed by F. TALBOTT Frame and masonry. Wood siding and brick. 8'-0". 74,336. WILSON—Architect—Houston, Texas 439 SUMMARY OF MOST SIGNIFICANT POINTS IN RESIDENTIAL ^ CONSTRUCTION AND HOME-FINANCING ACTIVITY I. Residential construction has recovered most of the ground lost in 1937 declines. A. Rise in the residential building index due partly to significant drop in cost of building (declining building material prices and relatively stable labor costs). B. More houses provided by permits in cities of 10,000 population and over in first seven months of 1938 than in same period of 1937. (1938: 119,007 residential units. 1937: 107,290 residential units.) C. Current recovery in residential building is general: two-thirds of the States provided more houses in July 1938 than in July 1937. D. July residential building permits show contra-seasonal resistance to decline. II. Improved real estate market evident: building material prices continue their decline. Savings and loan associations indicate generally improved position in owned real estate. A. Rentals: Rentals on identical occupied homes have risen steadily during 1938]but rentals under new contracts have fallen steadily— an increased incentive for tenants to move. B. Foreclosures continue downward: first seven months of 1938, 24 percent less than in the same period in 1937. C. Owned real estate of member savings and loan associations constituted a lower percentage of assets at end of 1937 than end of 1936. Survey of 1,700 insured savings and loan associations shows decline of over 1 percent in book value of real estate held during first six months of 1938. III. Volume of mortgage lending by savings and loan associations shows no strong tendency to rally as yet. July decline, moreover, was seasonal. IV. Building costs: for the first time in 12 months the index of small'house building costs indicated a rise in August in a relatively high proportion of reporting communities. This is significant, since it follows July reports which indicated a halt in decreases in building costs and a leveling off. The Southwest and Ohio, Kentucky, and Tennessee led the movement of increased building costs among reporting communities in August. RESIDENTIAL BUILDING ACTIVITY AND SELECTED INFLUENCING FACTORS 1926*100 600 500 40 0 j 1/ 1 0 300 600 500 400 1 Tv^T *FORL "CLOSLIRES' 300 200 200 4\ BUHDING I00 90 80 70 60 50 -f~-] r£---^ I'-rnr-r*"-*-. 1 J.-.,-J • * * » » » . = ^ ?*»*^-3L_J —ii-|.,...~,...r —->•„ 1 1 '••. 40 WUSIh G REN TALS* ..••••J 30 —_4~ 1 /--..L/"~~ p"*"*-| MATERIAL PR/Ci \ 1 x^"' 1 .--IV 1MANUF1 1 ACTOR*WS PA)'ROLLi •••• \y 20 ^—«-— r ' l—== * v7 f \ /** \r* \>\ \^\~s fR£ SIDEN 1AL C 1NSTR ICTION 3 100 90 80 70 60 50 40 t 30 20 J 10 9 8 7 6 5 4 s/\ 3 Division of Research & Statistics Federal Home Loan Bank Board 1,1.1 f 1 i i i 11 I,I i i i I 1 1 LI 1 1 Li 11 1 1 IM I , i l 1 111 1 1 H I M 1 1 1 1I I1 I I I 1 1 I I 1 1 I I 11 1 1 1 1i 1i i i i 1 i i i i i 1 i t n i 1 i n i i 1 i t i t i J J J 0 J J 0 0 4 0 0 0 0 J 0 J 0 J J 1937 1934 1936 1938 1933 1935 1929 1931 1932 1930 Mill Source:- I. Federal Home Loan Bank Board (County Reports) Z. U. S. Dept. of Labor (Converted to 1926 Base) 3. Federal Home Loan Bank Board (U. S. Dept. of. Labor Records) 440 * Includes correction for New York City because of irregular conditions arising from inception of new building code. Federal Home Loan Bank Review RESIDENTIAL CONSTRUCTION and HOME-FINANCING ACTIVITY • THE declining trend of building material prices during the past year has been accompanied by a relatively stable labor market, resulting in a significant drop in the total cost of building. The economies that may be obtained in constructing a house at the current cost level are probably responsible to a great extent for the increased activity evidenced in residential building so far this year (see chart on opposite page). Activity for July in the field of home construction had risen to a level nearly double that recorded during the low month of October 1937, as indicated by the seasonally corrected index. During recent months the various indexes of manufacturing conditions (production, employment, and pay rolls) have steadied considerably after the sharp recession recorded last fall. However, no definite signs of an upward movement in these series are as yet evident, although the volume of residential building has recovered most of the ground lost by the declines of last year. The relatively favorable position that the owners of rental properties have held during the past year has been an important factor contributing to the improved real estate market. In the face of rather rapid declines in building costs, rents paid on occupied dwellings have continued to increase. Speculative builders and many potential home owners realize that a shortage of adequate and habitable quarters has accumulated during the depression years, and that unless another major depression occurs the pressure caused by the demand for new housing facilities must be relieved somewhat in the next few years. With relatively high rents being received in recent months, and with lower construction costs, many more residential units have been built than last year when a much higher capital outlay was necessary to provide a new house. The trend in the number of new foreclosures has been definitely downward during the past few years. This favorable movement indicates a return of confidence to the real estate market, and is in itself a ESTIMATED NUMBER AND COST OF FAMILY DWELLING UNITS PROVIDED IN ALL CITIES OF 10,000 OR MORE POPULATION (Source: Federal Home Loan Bank Board. Compiled from residential building permits reported to U. S. Dept. of Labor) NUMBER 30 1 1 OF U N I T S PROVIDED COST 30 1 28 28 26 26 24 24 OF U N I T S 90 1 22 1 r 22 100 118 90 / 1 i938 80 1938 vj PROVIDED i 100 80 J > z 70 I 70 20 20 18 18 1937 1937 o ^y 60 16 14 14 50 50 12 12 1 10 6 1 • 2 J •"*•" I ?J/-J 5 AV 8. 30 8 6 ••- --" ^«. N \ 20 te±/ k. 4 10 2 0 September 1938 / 40 10 A931-3 5 AVG. i T ^* * W 16 8 1 60 // *'' <° Ir 30 ^ ! ° r > 7) U) •+ \J 20 10 Division of Research ft Statistics Federal Home Loan Bank Board 1 1 1 11 L__ 441 factor in reducing the current accumulation or "overhang" on the market. Adequate statistics regarding the sale of foreclosed properties by financial institutions are not available, but a survey of over 1,700 insured savings and loan associations indicates a decline of over 1 percent from December 1937 to June of this year in the book value of real estate held. [1926=100] Residential construction i Foreclosures (metro, cities) Rental index (N. I. C. B.)_ Rentals (Labor Dept.)-Building material prices Manufacturing employment Average wage per employee July 1938 June 1938 34.2 154.0 85.5 31.5 177.0 85.6 69.4 89.7 74.9 64.8 86.5 89.2 75.4 65.1 86.3 Percent change +8.6 -13.0 -0.1 -0.6 +0.7 +0.5 -0.2 July 1937 22.0 214.0 86.0 J 67.2 96.7 100.1 97.1 97.0 Percent change +55.5 -28.0 -0.6 -7.8 -24.7 -33.0 -11.0 i Corrected for normal seasonal variations. > As of June 1937. The volume of mortgage loans made by savings and loan associations has not as yet shown any strong tendency to rally in response to the increased construction activity. However, the total loans made by this type of institution in July were only 16 percent below the same month of last year, while during the months of April, May, and June of this year declines of 19 percent were recorded from the corresponding months of 1937. Residential Construction • THE total number of family dwelling units provided in communities of 10,000 population or over increased 5,000 units in July from June due to a sudden spurt in the construction volume for New York City in the latter month. As this unusual rise is not typical of the situation for the country as a whole, the index has been computed with New York City excluded as in previous months. Latest reports as the REVIEW goes to press indicate that approximately one-third of the units for which building permits were issued in New York City in July were attributable to low-cost housing projects in Queens and Brooklyn under the supervision of the United States Housing Authority. With residential building permits for the city of New York subtracted from the total, the residual number of family units in July (13,870) remained practically unchanged from the preceding month. However, as there is normally a decline in construction activity from June to July, the index which has been corrected for this typical seasonal recession indicated an increase of 9 percent. The total number of 1- and 2-family homes for 442 which permits were issued during the January-^Sly period of this year were slightly less than dining the corresponding period of 1937. Due to irregularities in New York City the number of multifamily units during the first seven months of 1938 increased by nearly 40 percent over the same months of last year. The chart on page 449 indicates the rate of construction activity among the various Federal Home Loan Bank Districts expressed in terms of the number of units provided per 100,000 population. The Los Angeles District has built at a rate in excess of that indicated for other Districts, except for the highly erratic New York District, so far this year. In July, the Los Angeles District provided 65 units for every 100,000 persons, while the Chicago District which is consistently among the areas with lowest activity, reported a rate of only 9 units. Total construction activity in July was above the same month of last year in nine of the 12 Federal Home Loan Bank Districts. In none of the three remaining areas (Boston, Cincinnati, and Topeka) was the drop in the rate of building significant. Table 2 on page 446 offers a comparison of the volume of new residential construction among the various States. Two-thirds of the States, scattered over the country, had a higher volume of home building during the month of July than in the same month of 1937, both in the number of units constructed and in the estimated cost of those units; hence, the current recovery in the residential building field is in no way restricted to a small area. Housing Rentals in The accompanying chart indicates recent trends the rentals received on occupied dwellings as I N D E X E S OF R E S I D E N T I A L RENTALS (7) Rentats~(National Industrial Conference Board) (2) Rentals on Identical Occupied Dwellings (Deportment of Labor) 19 2 6 - I G 0 (Convert<8d) 120 100 ^•m •/^ ••.. / * *%. & N id •• • yf ifi z > 60 7 / V ^ -\ 40 Federal Home Loan Bank Keview i^lbrted to the U. S. Department of Labor, compared with rentals quoted to the National Industrial Conference Board by cooperating agencies. Since the latter index is intended to reflect trend of rentals for newly tenanted structures as well as for occupied structures, it is naturally more sensitive to current changes in the rental market than is the index of the Department of Labor for rents actually received from an identical group of occupied dwellings. A comparison of the indexes indicates that while the Department of Labor index of rentals on identical occupied homes has risen steadily so far this year, the index which is more quickly responsive to rental market changes has fallen steadily during this same period. These diverse trends may indicate that the incentive for tenants to move has been increased during recent months due to a declining rental market for new contracts which is partially reflected in the National Industrial Conference Board index, while there has .been no corresponding reduction in the average rental for those tenants who do not move. Many of the families that move are prospective home owners, and this increased turn over probably contributes to the rise in residential construction. Indexes of Small-house Building Costs [Table S] FOR the first time since a year ago, quarterly reports received in August indicated upward movements in building costs in a relatively high proportion of the reporting communities. Of the 23 cities reporting quotations on the cost of constructing a standard 6-room house, 10 indicated rises in August over the May reporting period; increases of over $200 being recorded by Columbus, Ohio, and Dallas, Texas. All reporting cities for which comparisons between May and August are available in the Cincinnati District showed increases in costs, and costs were generally higher throughout the Little Rock District. Decreases in costs were recorded for all reporting cities in the Pittsburgh and Los Angeles Districts, with the exception of Reno, Nevada. The analysis of the building cost index which is presented on page 435 describes the trends in cost among various material groups in comparison with labor costs in those communities reporting for the Pittsburgh, Cincinnati, Little Rock, and Los Angeles Districts. Foreclosures • THE index of real estate foreclosures in metropolitan communities for July 1938 was 154 as compared with 177 for the previous month. This decrease of 13.0 percent compares very favorably with the seasonal decrease of 6.6 percent. In comparison with the same month of last year, July foreclosures in metropolitan communities declined 28.0 percent. For the first seven months of 1938 the index showed foreclosures to be 24.2 percent less than for the first seven months of 1937. Of the 82 communities reporting for both June and July, 60 showed decreases from June, while 20 indicated increases, and 2 no change. Mortgage-lending Activity of Savings and Loan Associations [Tables 4 ^nd 5] • IN July, the volume of new mortgage commitments of all savings and loan associations was 7 percent below the level of the preceding month—a seasonal decline as evidenced by the experience of these institutions during the past two years. A total TOTAL LOANS MADE BY ALL SAVINGS AND LOAN ASSOCIATIONS UNITED STATES-BY MONTHS MILLIONS OF DOLLARS • September 1938 J F M A M J J A S O N 0 1 J F M A M J J A S 0 N Dl J F M A M J J A S O N D 1936 I 1937 I 1938 443 lending volume of $59,400,000 in July compares unfavorably with the level of $70,700,000 reported during the same month of last year. As compared with the corresponding months of 1936, however, each of the first seven months of this year has indicated a rise in the total lending activity of all types of savings and loan associations. During the January-July period of this year, total loans by Federal and State-member institutions decreased 16 percent from the volume of loans made during the same time in 1937, while those of nonmembers declined 18 percent. A 2-year comparison of lending activity indicates that so far this year loans of Federal savings and loan associations stand about one-third higher than during the corresponding 1936 period, while those of State members have increased one-eighth, and nonmember loans have fallen off one-sixth in two years. Home purchase loans in July dropped sharply, leading the declines of other types of loans. Through July 31, cumulative loans for the purchase of homes this year amounted to only three-quarters of the volume recorded during the same period in 1937, while each of the other loan classifications indicated a far better showing. Federal Savings and Loan System Progress in number and assets of Federal savWQs and loan associations Number June 30, 1938 New Converted 638 706 July 31, 1938 Approximate assets June 30, 1938 July 31, 1938 639 $301, 242, 000 $306, 594, 000 707 912, 632, 000 916, 109, 000 T o t a l . . . 1,344 1,346 1, 213, 874, 000 1, 222, 703, 000 Reporting Federals indicated a new investment of $34,000,000 during July as compared with withdrawals of $21,300,000. As a result, of these operations and because of the reinvestment of declared dividends, private repurchasable capital increased $14,700,000. These 1,279 institutions reported an increase of 19,100 shareholders during July, bringing the total to 1,017,000 with an average investment of $744. The investment of the H. O. L. C. and the United States Treasury declined $124,000 during the month while Federal Home Loan Bank advances dropped $3,300,000. Lending activity for this identical group of Federals showed decreases among all classes of loans. However, the volume of loans outstanding increased $10,300,000 during July. [Table 7] • IN July, three additional associations were converted from State to Federal charter, while one new association was chartered by subscription to shares. Offsetting these increases in Federal membership were the cancelations of membership of two former associations. At the end of July, a total of 1,346 Federal institutions remained in the System. Of these, seven converted and one newly chartered associations had been approved for membership, but had not as yet paid their initial insurance premium. Total assets of all Federals increased $8,800,000 during the month of July to a total of $1,223,000,000. Most of this rise was accounted for by the accession of new members instead of by growth within previously existing Federals. Total assets of the 1,279 Federals reporting in both June and July increased less than $500,000 as compared with rises of $15,000,000 during the two preceding months. This apparent slowing-down of the growth among Federal savings and loan associations is due to the closing of accounts and the declaration of dividends at the end of the fiscal period. 444 Federal Home Loan Bank System [Tables IS and U] • ADVANCES by the Federal Home Loan Banks during July declined almost $10,000,000 from the unusually high figure for advances in June. In every Bank District advances in July were less in amount than in June. Total advances during July of $4,944,000 represented less than one-half the amount of new advances made in July 1937. Only the Pittsburgh and Topeka Banks have advanced a greater amount during the first seven months of 1938 than during the corresponding period in 1937. Although advances were at a low level during July, repayments were exceptionally heavy, a repetition of the condition that existed last January. The volume of total repayments was greater than in July 1937. In every Bank District, except Indianapolis and Chicago, repayments were greater during July than during June. Federal Home Loan Bank Review ^ s a result of new advances which amounted to $4,944,000 and repayments which totaled $9,277,000, the balance of advances outstanding at the end of July was reduced to $191,892,000, a decline of more than $4,000,000 since June 30. Increases in the balance of advances outstanding during July were recorded only in the Pittsburgh, Indianapolis, and Topeka Districts. Three Banks, namely, Pittsburgh, Chicago, and Topeka, have increased the amount of advances outstanding over December 31, 1937. CHANGES IN INTEREST RATES The Federal Home Loan Bank of New York has announced a reduction in interest rates. As of September 1, interest rates on short-term advances will be 2% per centum per annum, with amortization in equal monthly installments. Interest rates on long-term advances will be 3 per centum per annum. These new low rates will apply to the unpaid balances of advances outstanding at that date, and to all advances made after that time until further notice. The Federal Home Loan Bank of Little Rock has announced that it will write all new advances and will renew present advances upon the request of members at a contractual interest rate of 3 per centum per annum. Federal Savings and Loan I nsurance Corporation [Tables 8 and 9] • THERE were 2,029 savings and loan associations insured on July 31, 1938. These institutions, in which 1,960,200 investors' savings are protected, had total resources of $1,982,000,000, and private repurchasable capital of $1,344,048. The potential liability of the Federal Savings and Loan Insurance Corporation in these associations was $1,415,000,000 at the end of July. During July only 16 institutions were granted insurance which compares with 27 in June, 25 in May, and 21 in April. Applications were received during July from 27 associations having total assets of $20,604,000. Twenty-three applicants were State-chartered institutions of which 10 were not affiliated with the Bank System. Reports from 1,869 identical insured associations for the months of June and July 1938 show that mortgage loans made during July ($32,600,000) were almost $3,500,000 less than in June. Loans for September 1938 every purpose were lower in July than in the previous month. Only the Indianapolis District reported greater total lending activity in July than in June. A gain of $17,300,000 in private repurchasable capital occurred in July, with every one of the Bank Districts sharing in the advance. Total resources of the Insurance Corporation increased almost $500,000 during July and exceeded $114,500,000 at the end of the month. Investments were $200,000 greater than at the end of June and almost $5,000,000 larger than on July 31, 1937. The $113,053,842 of investments owned by the Corporation have a present market value of almost $119,600,000. The excess of market value over book value is over $6,500,000. Vacancies: 1938 • THE Survey of Current Business, in its August issue, states that residential vacancies moved upward in many cities in the first half of 1938, reversing the movement from 1933 to 1937. During these preceding five years, vacancies in cities making surveys dropped from an average of 8 or 9 percent to about 2 or 3 percent. The trends and vacancy levels differ widely from city to city. Kansas City and Boston revealed the highest vacancy ratio in the 1938 figures with over 6 percent of the residential units unoccupied. The lowest vacancy ratios reported were 1 percent in Ann Arbor, Michigan, and Davenport, Iowa. Vacancy appears to be generally lower in single houses than in multifamily houses, but when the vacancy ratio for the city is low the disparity tends to narrow. The article summarizes and tabulates vacancy statistics for the period 1930-1938 in all cities making two or more vacancy surveys. A second table permits a comparison of vacancy ratios by types of dwelling units for this same period in some 20 cities. "Along with construction costs, rents, costs of ownership, and other factors, the number of vacancies in a given area is of great importance in determining the outlook for residential construction/' the article points out. Analysis of vacancy data revealed that "the vacancy situation, while susceptible to some degree of measurement both on a national scale and by comparison and analogy among cities, is essentially one for local investigation and analysis. It is highly desirable that local interests should sponsor this type of activity." 445 Table 1.—Number and estimated cost of new family dwelling units provided in all cities of 10, Ob population or over, in the United States * [Source: Federal Home Loan Bank Board. Compiled from residential building permits reported to U. 8. Department of Labor] [Amounts are shown in thousands of dollars] Number of family units provided Monthly totals Total residential Private housing Public housing * __ . Monthly totals January-July totals January-July totals 1938 1937 9,060 632 67 1,993 68,218 6,152 511 44,126 69,140 $47,162.3 $48,265.1 $38,507.0 2,141.8 5,878 2,552.3 1,747.1 646 322.8 265.2 347.6 31,626 68,621.5 10,299; 6 8,276.2 July 1938 June 1938 July 1937 1-family dwellings 2-family dwellings Joint home and business * 3- and-more-family dwellings Total cost of units July 1938 June 1938 July 1937 11,707 742 80 9,131 12,121 978 86 3,284 21,660 16,469 11,752 119,007 107,290 118,248.4 61,464.6 21,660 0 16,469 0 11,636 116 119,006 1 103,681 118,248.4 3,609 0.0 61,464.6 0.0 1938 1937 $268,543.7 15,926.1 1,851.6 178,454.0 $305,214.8 16,168.5 2,330.8 107,339.7 48,795.5 464,775.4 431,053.9 48,190.4 605.1 464,772.0 3.4 414,730.1 16,323.8 i Estimate is based on reports from communities having approximately 95 percent of the population of all cities with population of 10,000 or over. J Includes 1- and 2-family dwellings with business property attached. * Includes only Government-financed low-cost housing project units reported by U. S. Department of Labor. Table 2.—Number and estimated cost of new family dwelling units provided in all cities of 10,000 population or over, in July 1938, by Federal Home Loan Bank Districts and by States [Source: Federal Home Loan Bank Board. Compiled from residential building permits reported to U. S. Department of Labor] [Amounts are shown in thousands of dollars] All 1- and 2-family dwellings All residential dwellingJS Federal Home Loan Bank Districts and States UNITED STATES.- No. 1—Boston Connecticut Maine Massachusetts New Hampshire Rhode Island Vermont No. 2—New York New Jersey No. 3—Pittsburgh Delaware Pennsylvania West Virginia No. 4—Winston-Salem Alabama District of Columbia Florida Georgia 446 Number of family dwelling units July 1938 July 1937 21, 660 11, 752 788 852 169 84 368 31 125 11 Estimated cost July 1938 July 1937 Number of family dwelling units July 1938 July 1937 Estimated cost July 1938 July 1937 9,759 $49, 626. 9 $40, 519. 3 665 3, 254. 9 3, 358. 1 166 84 308 31 125 11 154 27 344 34 98 8 868.0 255.8 1, 500. 3 127.7 462.7 40.4 784.2 88.6 1, 917. 1 130.6 405.2 32.4 9, 691. 8 1,552 1,067 6, 929. 4 5, 617. 8 2, 039. 1 69, 083. 0 1, 278. 1 8, 413. 7 287 1,265 192 875 1, 353. 2 5, 576. 2 1, 243. 1 4, 374. 7 670 3, 742. 6 3, 375. 2 690 601 3, 199. 4 3, 219. 5 2 615 327 8 526 136 18.0 2, 862. 2 862.4 36.4 2, 914. 6 424.2 2 587 101 8 502 91 18.0 2, 801. 5 379.9 36.4 2, 868. 9 314.2 1,651 1,526 5, 783. 0 5, 111. 2 1,464 1,239 5, 228. 0 4, 411. 1 115 301 409 177 134 120 322 352 210 119 258.8 1, 277. 0 1, 366. 3 537.1 522. 1 296.3 1, 319. 8 1, 227. 3 481.7 504.4 111 223 372 177 134 120 146 298 196 115 246.3 1, 067. 5 1, 216. 8 537.1 522.1 296.3 839.8 1, 095. 7 475.5 501. 1 $118, 248. 4 $48, 795. 5 12, 529 3, 397. 2 3, 909. 5 725 158 27 521 34 98 14 876. 1 255.8 1, 634. 5 127.7 462.7 40.4 794.7 88.6 2, 449. 1 130.6 405.2 41.3 9,149 1,679 71, 122. 1 480 8,669 201 1,478 944 Federal Home Loan Bank Review Tf^le 2.—Number and estimated cost of new family dwelling units provided in all cities of 10,000 population or over, in July 1938, by Federal Home Loan Bank Districts and by States—Con. [Amounts are shown in thousands of dollars] All residential dwellings Number of family dwelling units Federal Home Loan Bank Districts and "States July 1938 July 1937 All 1- and 2-family dwellings Estimated cost July 1938 July 1937 Number of family dwelling units July 1938 July 1937 Estimated cost July 1938 July 1937 No. 4—Winston-Salem—Continued. North Carolina South Carolina Virginia 220 87 208 224 64 115 $655. 4 304.1 862.2 $614. 5 184.0 483.2 204 79 164 193 60 111 $625. 6 285.5 727.1 $552. 2 174.0 476.5 No. 5—Cincinnati 869 988 3, 862. 9 4, 466. 6 756 746 3, 380. 3 3, 342. 6 126 585 158 124 736 128 357.4 3, 008. 9 496.6 359.2 3, 701. 7 405.7 126 486 144 116 502 128 357.4 2, 535. 8 487. 1 349. 7 2, 587. 2 405.7 1,352 870 6, 246. 8 3, 805. 3 1,315 827 6, 102. 8 3, 664. 5 307 1,045 234 636 1, 174. 4 5, 072. 4 889.5 2, 915. 8 273 1,042 230 597 1, 039. 4 5, 063. 4 877.0 2, 787. 5 No. 7—Chicago 625 552 3, 220. 2 2, 774. 3 572 539 2, 950. 2 2, 727. 2 Illinois Wisconsin. 355 270 308 244 1, 977. 5 1, 242. 7 1, 672. 2 1, 102. 1 355 217 304 235 1, 977. 5 972.7 1, 651. 8 1, 075. 4 No. 8—Des Moines 759 573 2, 943. 0 2, 061. 9 737 528 2, 856. 6 1, 967. 4 Iowa Minnesota Missouri North Dakota South Dakota 185 276 230 27 41 146 157 225 21 24 675.5 1, 181. 8 919.4 82.4 83.9 492.6 633.4 838.7 65.5 31.7 180 276 213 27 41 146 157 185 16 24 648.4 1, 181. 8 860.1 82.4 83.9 492. 6 633.4 757.2 52.5 31. 7 No. 9—Little Rock 1,471 1,062 3, 872. 5 2, 851. 5 1,398 995 3, 716. 5 2, 716. 4 63 177 66 50 1, 115 49 109 100 34 770 142.8 475.3 127.3 132.4 2, 994. 7 105.2 353.0 146.9 94.5 2, 151. 9 63 173 54 42 1,066 42 109 79 34 731 142.8 461.3 107.5 119.4 2, 885. 5 100. 1 353.0 115. 3 94.5 2, 053. 5 458 478 1, 545. 7 1, 517. 2 429 403 1, 503. 9 1, 310. 3 124 95 60 179 109 108 82 179 413.7 275.2 235.3 621.5 393.8 325.7 273.5 524.2 102 88 60 179 69 96 68 170 374.7 272.4 235.3 621.5 272.8 309.2 247.0 481.3 767 485 2, 534. 5 1, 414. 9 465 471 1, 533. 5 1, 393. 8 20 46 106 78 497 20 14 62 94 82 218 15 72.4 130.7 408.6 259.3 1, 579. 0 84.5 54.8 155.1 335.1 270.2 543.6 56. 1 20 46 106 78 195 20 14 54 94 76 218 15 72.4 130.7 408.6 259.3 578.0 84.5 54.8 145. 1 335. 1 259. 1 543.6 56. 1 2, 827 2,017 9, 977. 9 7, 816. 1 2,426 1,678 8, 971. 4 6, 790. 6 49 2, 761 17 27 1,981 9 169.3 9, 740. 9 67.7 123.0 7, 654. 5 38.6 41 2,368 17 27 1,642 9 159.3 8, 744. 4 67.7 123.0 6, 629. 0 38.6 Kentucky Ohio__ Tennessee No. 6—Indianapolis Indiana Michigan Arkansas Louisiana Mississippi New Mexico Texas No. 10—Topeka Colorado Kansas Nebraska Oklahoma No. 11—Portland Idaho Montana Oregon Utah Washington Wyoming No. 12—Los Angeles Arizona California Nevada September 1938 . _ M 447 Table 3.—Cost of building the same standard house in representative cities in specific months *& NOTE.—These figures are subject to correction [Source: Federal Home Loan Bank Board] Total cost Cubic-foot cost 1938 1938 Aug. 1937 Aug. 1936 Aug. $0. 246 .237 .226 .270 .246 .252 $0. 242 .250 .249 .283 .262 .271 .222 .241 .264 .267 .247 .236 .212 No. 9—Little Rock: Little Rock, Ark New Orleans, La Jackson, Miss Albuquerque, N. Mex„. Dallas, Tex Houston, Tex San Antonio, Tex No. 12—Los Angeles: Phoenix, Ariz Los Angeles, Cal San Diego, Cal San Francisco, Cal Reno, Nev No. 3—Pittsburgh: Wilmington, Del Harrisburg, Pa Philadelphia, Pa Pittsburgh, Pa Charleston, W. Va Wheeling, W. Va No. 5—Cincinnati: Lexington, Ky Louisville, Ky Cincinnati, Ohio Cleveland, Ohio Columbus, Ohio Memphis, Tenn Nashville, Tenn „.. - 1936 1937 Aug. May Feb. Nov. Aug. $0. 221 .233 .207 .242 .227 $5, 898 5,682 5,416 6,487 5,905 6,042 $5, 914 5,839 5,560 6,718 5,951 6,287 $5, 914 5,817 5,531 6,512 6,218 $5, 811 5,823 5, 755 6,719 6,240 6,636 $5, 811 5, 995 5, 972 6, 786 6, 282 6,503 ».238 .253 2 .272 .291 .268 .242 .229 2.218 .226 2.248 .257 .236 .213 .213 5,325 5,789 6, 346 6,404 5,919 5,671 5,090 2 5, 322 5,722 2 2 2 .215 .263 .253 .277 .251 .250 .252 .217 2.251 .254 .279 .253 .257 .260 .217 *.216 .224 .257 .235 .239 .231 5,150 6,310 6,079 6,648 6,024 5,993 6,055 5,164 5,164 2 6, 294 2 6, 279 6,111 6,061 2 6, 611 6,586 2 5, 801 2 5,888 5,981 6,058 6,099 .266 .238 .243 .264 .273 .283 .250 .256 .269 .278 .254 .220 .228 .250 .263 6,392 5,704 5,834 6,329 6, 560 6,567 6, 695 5,723 5, 874 6,098 5,855 6,345 ; 6,363 6,550 6, 634 5,688 5,661 5,024 8 2 5, 392 5,861 6, 432 6, 569 5,687 5,652 5,144 2 2 2 5, 604 5,970 6, 464 6, 863 6,097 5,800 5,476 5,186 6, 229 5,968 6,646 6,068 6,143 6,228 6, 741 5, 926 6,184 6, 375 6, 666 2 2 5, 702 6,083 6, 520 6,981 6,429 5,804 5,504 5,208 6, 028 6,086 6,690 6,068 6,162 6,231 6, 802 i 6,001 1 6,144 6, 452 6, 666 Aug. $5, 309 5,584 4,962 5,816 5,458 2 5, 223 5,424 5, 962 6,165 5,659 5,115 5,120 2 2 5,202 5,173 5,373 6,169 5,634 5,733 5, 535 6,088 5,285 5, 468 5, 999 6, 313 1 The house on which costs are reported is a detached 6-room home of 24,000 cubic feet volume. Living room, dining room, kitchen, and lavatory on first floor; 3 bedrooms and bath on second floor. Exterior is wide-board siding with brick and stucco as features of design. Best quality materials and workmanship are used throughout. The house is not completed ready for occupancy. It includes all fundamental structural elements, an attached 1-car garage, an unfinished cellar, an unfinished attic, a fireplace, essential heating, plumbing, and electric wiring equipment and complete insulation. It does not include wall-paper nor other wall nor ceiling finish on interior plastered surface, lighting fixtures, refrigerators, water heaters, ranges, screens, weather stripping, nor window Shades. Reported costs include, in addition to material and labor costs, compensation insurance, an allowance for contractor's overhead and transportation of materials, plus 10 percent for builder's profit. Reported costs do not include the cost of land nor of surveying the land, the cost of planting the lot, nor of providing walks and driveways; they do not include architect's fee, cost of building permit, financing charges, nor sales costs. In figuring costs, current prices on the same building materials list are obtained every 3 months from the same dealers, and 2current wage rates are obtained from the same reputable contractors and operative builders. Revised. NOTE FOR CHART ON FACING PAGE: A new building code in New York City, effective January 1938, caused an unusual spurt of applications for permits which threw the United States total out of balance. The dotted line shows that total excluding New York City for December 1937 and January and February 1938. 448 Federal Home Loan Bank Review Q RATE OF RESIDENTIAL BUILDING IN ALL CITIES OF 10,000 OR MORE POPULATION REPRESENTS THE ESTIMATED NUMBER OF PRIVATELY FINANCED FAMILY DWELLING UNITS PROVIDED PER 100,000 POPULATION Sourct: Ftdtrol Homo Loon Bonk Boord. Compiled from Building Ptrmitt rtporttd to US. Dtportmtnt of Labor. ""' DISTRICT I BOSTON FEDERAL | HOME LOAN BANK DISTRICTS OISTRICT 2 NEW YORK DISTRICT 3 PITTSBURGH DISTRICT 4 WINSTON SALEM L-7«9* h LJ b** ^/M-JSAVA 1—\ I. H M AFW HAT JUN. JUL. A t * . » OCT WOV DEC DISTRICT 8 DES MOINES JAN. F E l M M AFA MAY , . «UC 9 9 OCX MOM OEC DISTRICT 12 LOS ANGELES mmJ U-1937 =tr ocx NOV oca JAHFULMMtAntMAY J M . JUL. A U t t £ R OCT N K BBC. UNITED STATES AVERAGE 1930-1938 70 60 50 40 A^ Lr Pn JU iH. J BKiuom mr r M * c/rrVM / DIVISION OF RESEARCH ANO STATISTICS FEDEML HOME LOAN BANK BOAKO 1 1 1 1 1 1 1 1 I 1i L l 1 l 1 1,1 l ,1 1 1 r 1 1 1 1 1 1 1 I 1 , .1l . l Ut„ September 1938 i i i i I I i i i ,1 1 11 \ 1,1 M i l 1 1 1 1 1 1 1 1 11 11 1 ^ an 1,1 1,1 1 1 1 11 not* on facing pog$ 1 1,1.1 1 1 ,1 1 1 1,1 1 1r r (r to rz D 30 20 10 I i i t I I „ I ,i, t.i—i, 1 0 449 Table 4.—Estimated volume of new lending activity of savings and loan associations/ classified^/ District and type of association [Amounts are shown in thousands of dollars] Percent increase, July 1938 over July 1937 New loans, July 1937 June 1938 Percent increase, July 1938 over June 1938 $59, 400 23, 900 26, 309 9,191 $63, 536 26, 310 27, 414 9,812 -7 -9 -4 -6 $70, 674 28, 693 31, 799 10, 182 -16 -17 -17 -10 District 1: Total Federal State member Nonmember 6,386 2,078 3,098 1,210 6,779 2,211 3,361 1,207 -6 -6 -8 0 7,982 2,376 3,806 1,800 -20 -13 -19 -33 District 2: Total Federal State member Nonmember 5,424 1,879 1,692 1,853 5,917 2,217 1,599 2, 101 -8 -15 +6 -12 6,096 2,013 1,692 2,391 -11 -7 0 -23 District 3: Total Federal State member Nonmember 3,149 1,132 1,151 866 3,592 1,159 1,529 904 -12 -2 -25 -4 3,742 1,235 1,475 1,032 -16 -8 -22 -16 District 4: Total Federal State member Nonmember 9,106 3,289 4,644 1,173 8,667 3,524 4,202 941 + 5 -7 + 11 + 25 9,480 3,833 4,548 1,099 -4 -14 +2 +7 7,934 3,808 3,954 172 8,391 4,328 3,811 252 -5 -12 +4 -32 11, 171 5,254 5,577 340 -29 -28 -29 -49 New loans Federal Home Loan Bank District and type of association July 1938 United States: Total Federal. State member Nonmember District 5: Total Federal State member Nonmember _ District 6: Total Federal State member Nonmember 3,246 1,551 1,345 350 3,072 1,449 1,353 270 +6 +7 -1 +30 3,587 1,672 1,689 226 -10 -7 -20 + 55 District 7: Total Federal State member Nonmember 5,057 2,121 2,603 333 5,688 2,721 2,575 392 -11 -22 +1 -15 7,379 2,458 4,147 774 — 31 -14 -37 -57 District 8: Total Federal State member Nonmember 4,182 1,629 1,488 1,065 4,591 1,911 1,493 1, 187 -9 -15 0 -10 4,918 2,193 1,731 994 — 15 -26 -14 +7 District 9: Total Federal State member Nonmember 4,209 1,619 2,207 383 4,665 1,560 2,820 285 -10 +4 -22 + 34 3,920 1,549 2,204 167 +7 +5 0 + 129 District 10: Total Federal State member Nonmember 2,939 1,264 950 725 3,998 1,711 1,157 1,130 -26 -26 -18 -36 3,651 1,670 919 1,062 -20 -24 +3 -32 District 11: Total Federal State member Nonmember 2,868 1,126 782 960 2,971 1,269 970 732 -3 -11 -19 +31 3,066 1,659 1,186 221 -6 -32 -34 + 334 District 12: Total Federal State member Nonmember 4,900 2,404 2,395 101 5,205 2,250 2,544 411 -6 +7 -6 -75 5,682 2,781 2,825 76 — 14 — 14 -15 + 33 450 Federal Home Loan Bank Review COCDcOCOCOCDCOcOCOCOcOOO t o t o CO Cn Ox Cn px px ^ H * J-» CD O t O ^ O C n ^ O O c O O O O M CO CO CO CO CD CD CD O O O O H * •—* •—' •qOCntfM- _)0000C C O ^ J t O O O O O * — COCDCDOCD tO CO »—00 0 0 CO 0 0 l-*H-'H-»»-»H-*H*H-*H-'l—if-»00 COCOOOOOOOCOCOCOCO p O O p p H H H M j O G O ^ I s S H CO CD CO CO CO CO CD H - COtfa>.^ M*- Ox Ox H MCO M COCOCOCOCOOCOCOCDCO'sJM M CO O CD CO CO CO CD H ^S5 M O>O5O)Q00M,slMMO5^H Ox tO tO tO O O O O COOOOOOOOOOOOOOMMS toentooi—cooMcoco^^i p^^^^cococococococo CO^^MOOCOCD 00 00 00 00 <I 00 O O n t O O O cn H-co •&> to to H* QOOOCOOCnCOtOOOHOO 0 0 M 0 3 K W O O § COCOCOCOCOOOOOOCOCO COrf^MCDcOH-'bOCOCOIsDcOCO CnCnCnCnCnCnCnCnCnCnCnCn Cn Cn Cn Cn Ox Ox Cnr 00 00 00 CO CO CO CO 00 00 CO •— »— (-- tO CO CD CO CO CD CD CO CD CO CO CO CO CnCnCnCnCnCnCnCnCnCnCnCn CD CO CO CO CO O CO Cn Cn Ox en Cn Cn Cn to ^tf»>to en H-1 oo CDCOCOCOCOCOCOCDCDCOCOCO tococnooooMOcncoi-* CnMrf^tOCOMCOtOMCDCOCO CO CO 0 0 00 CD CD CO CO CD CD CO 00 3^ 5^ 5^ ag « c mmmmt M COrf^^ ffa» rfa» ^ 09 o § *fi*g£&2* Opt O O I I O O H-CO H-Cn *"P 1+ COM top O O PP oo o I ( r*p CD CO CO oo &&• ?<? coco £1£L P "* KB r-J M* CD O 05 t-- oo o en co H-* H^ co1 i—l Cn en en «<l «<i t- t o en M CO O O co^oocooooo OMKtnOOOOO co^o-aoooen to to to to to H* H- co co M i-i co en <i O M W O C J J tooo 0 0 > — M O O H - 4 to to to to to H-1 h- rf* en H-* O i 00 t o »-* OCOCOtOOCD^ O O t O M W O N ) jOjW^tOJsS^en^O^H- O H-to • ^ Cnrf^O J CD CD M bO I—CO 0 0 O 0 0 rfi. 00MO5MMCOC7I ^^^^j>3j>o.to 00 CO CO 00 ^ J CO O oo o co < i co oa en OtCOtOtO^^M J--JJ0JJO5OJS3JDP i—»cnO oo^co toen-<i pop t-»o»-* < l i£* HCOO<I CO en rfs* H-*CO o to to co t o ^ r co tooo CD t o en O^ICn (--en tO PPJN3 ^h-tO oooco H- tO toto<i £*QOpx ^1—00 CD COCO H- t O O to t o c o to i-tCO ^OOOjvI tooo o o o o en to to CnOCO too en oo to M^OO j^^top ^enoo h-'COCO rf^COOO ji^wp OOOOi Orf^Hl-*l-'00 tO Cn O H - O O O Q 00 C O M l-1 00 GO ^ p p o CD COO) <rtoco eno^r <i<ico Cn Ox O H*OCn Jf^J-a^cn P CO O 8 <° So C-H«H oato^ ^lOOO rf^tOCD Mcooa CO<I CO tO CO HCOO KtCDH- Pi»,p CO<| ^Orf^ ^ ^ c o tOCnCn tOrf^ jl^^^D OiCOCO OXICO 00 CD CO cOOOi COCnO H^^CD CO O O CO Ox O CO Cn t0O5 £* tO C O O CO Cnrf*i-* O tO rf* toenoo 00 hf^Cn CO Cn I—' I-* t O tooo pj^rjo D CD P CO 1 <I •—to tOCOGi CD CO 00 M tO H bD H K K <i ox oo o <i o <r H- CO CO O tO tO CD -<l H - CO CO < l 0 0 O r C,CH o 1? S o cw ft •g 5 CD so : CD CD o >d 8& o o o no «".. p g* p O 0 Go tr1 o o o OS § cT CD 0Q o o CD o -3 Table 7.—Monthly operations of 1,279 identical Federal savings and loan associations r e p o ^ g during June and July 1938 June Share liability at end of month: Private share accounts (number) Paid on private subscriptions Treasury and H. 0 . L. C. subscriptions Total Private share investments during month Repurchases during month Mortgage loans made during month: a. New construction b. Purchase of homes c. Refinancing d. Reconditioning e. Other purposes _ ^ Total Mortgage loans outstanding end of month Borrowed money as of end of month: From Federal Home Loan Banks From other sources Total ___ Total assets, end of month 1 July Change June to July 998, 169 1, 017, 270 Percent + 1.9 $741, 635, 200 206, 885, 100 $756, 371, 000 206, 761, 100 + 2. 0 -0. 1 948, 520, 300 963, 132, 100 + 1. 5 17, 548, 500 5, 987, 100 34, 007, 500 21, 254, 100 + 93. 8 + 255. 0 8, 561, 000 7, 304, 800 5, 124, 300 1, 698, 300 2, 274, 300 8, 250, 800 6, 385, 000 4, 806, 200 1, 425, 300 1, 885, 800 -3. 6 -12. 6 -6.2 -16. 1 -17. 1 24, 962, 700 908, 960, 700 22, 753, 100 919, 273, 700 + 1. 1 96, 077, 500 2, 283, 500 92, 790, 500 2, 075, 100 -3.4 -9. 1 98, 361, 000 94, 865, 600 1, 168, 775, 000 1, 169, 273, 900 -a 9 -3. 6 1 C) Less than 0.1 percent. Table 8.—Monthly operations of 590 identical insured State-chartered savings and loan associations reporting during June and July 1938 July June 719, 178 726, 525 Percent + 1.0 $496, 921, 300 36, 078, 500 $499, 453, 000 36, 283, 700 +0. 5 + 0. 6 532, 999, 800 535, 736, 700 +0.5 _> 8, 416, 300 6, 119, 700 16, 436, 600 14, 961, 700 + 95.3 +144. 5 __ 3, 400, 800 3, 731, 200 1, 938, 200 660, 500 1, 333, 400 3, 111, 900 2, 984, 000 1, 894, 000 743, 100 1, 112, 600 -8. 5 -20.0 — 2. 3 + 12.5 — 16.6 11, 068, 100 481, 615, 600 9, 845, 600 484, 149, 000 -11. 0 +0.5 37, 404, 000 3, 594, 200 36, 246, 600 3, 160, 000 -3. 1 — 12. 1 40, 998, 200 39, 406, 600 — 3. 9 688, 938, 000 684, 868, 500 -0. 6 Share liability at end of month: Private share accounts (number) Paid on private subscriptions H. O. L. C. subscriptions _ .. __ _ Total Private share investments during month Repurchases during month __ Mortgage loans made during month: a. New construction b. Purchase of homes c. Refinancing d. Reconditioning e. Other purposes _ __ _. Total Mortgage loans outstanding end of month Borrowed money as of end of month: From Federal Home Loan Banks From other sources Total Total assets, end of month 452 Change June to July ._ _. __ Federal Home Loan Bank Review Table 9.—Institutions insured by the Federal Savings and Loan Insurance Corporation 1 Cr [Amounts are shown in thousands of dollars] Cumulative number at specified dates Number of investors Assets Private repurchasable capital Dec. 31, Dec. 31, Dec. 31, Dec. 31, June 30, July 31, 1934 1936 1938 1938 1937 1935 July 31, 1938 July 31, 1938 July 31, 1938 State-chartered associations^ > __ Converted F. S. and L. A New F. S. and L. A Total 4 108 339 136 406 572 382 560 634 566 672 641 451 1,114 1,576 1,879 2 678 698 638 2,014 $771, 817 * 903, 735 306, 583 $562, 236 629, 548 152, 300 2,029 1, 960, 200 1, 982, 135 1, 344, 084 691 *700 4 638 907, 400 794, 800 258, 000 4 1 Beginning Dec. 31, 1936, figures on number of associations insured include only those associations which have remitted premiums. iDarlier figures include all associations approved by the Board for insurance. 2 In addition, 8 Federals with assets of $5,517,000 had been approved for conversion but had not been insured as of June 30. 1 In addition, 7 Federals with assets of $12,374,000 had been approved for conversion but had not been insured as of July 31. 4 In addition, 1 new Federal with assets of $11,000 had been approved for membership but had not been insured as of July 31. Table 7 0 . — H . O . L. C. subscriptions to shares of savings and loan associations— Requests and subscriptions * Uninsured State-chartered members of the F. H. L. B. System ! Requests: Dec. 31, 1935 Dec. 31, 1936 Dec. 31, 1937 Jan. 31, 1938 Feb. 28, 1938 Mar. 31, 1938 Apr. 30, 1938 May 31, 1938 June 30, 1938 July 31, 1938 Subscriptions: Dec. 31, 1935 Dec. 31, 1936 Dec. 31, 1937 Jan. 31, 1938 Feb. 28, 1938 Mar. 31, 1938 Apr. 30, 1938 May 31, 1938 June 30, 1938 July 31, 1938 Insured State-chartered associations Federal savings and loan associations rr^+^i J Number Amount (cumu- (cumulative) lative) Number (cumulative) Amount (cumulative) Number (cumulative) Amount (cumulative) Number (cumulative) 27 89 112 113 106 2 100 2 95 2 89 91 2 82 $1, 131, 700 3, 845, 710 5, 357, 210 5, 382, 210 5, 197, 210 2 4, 992, 210 5, 062, 210 2 4, 772, 210 4, 972, 210 2 4, 471, 010 33 279 666 675 692 711 739 761 774 799 $2, 480, 000 21, 016, 900 43, 490, 020 44, 055, 020 44, 816, 020 45, 975, 130 47, 324, 670 48, 424, 670 49, 318, 670 50, 684, 870 553 2,617 4,324 4,342 4, 360 4,368 4,382 4,399 4, 418 4, 434 $21, 139, 000 108, 591, 900 187, 015, 400 187, 668, 400 188, 535, 900 188, 885, 900 189, 693, 900 190, 528, 900 191, 375, 900 192, 202, 900 613 2,985 5,102 5,130 5,158 5,179 5,216 5,249 5,283 5,315 $24, 750, 700 133, 454, 510 235, 862, 630 237, 105, 630 238, 549, 103 239, 853, 240 242, 080, 780 243, 725, 780 245, 666, 780 247, 358, 780 2 45 40 40 36 2 33 2 29 2 26 26 2 25 100, 000 1, 688, 000 1, 526, 000 1, 526, 000 1, 491, 000 2 1 , 401, 000 2 1 , 326, 000 2 1 , 126, 000 1, 126, 000 2 1 , 101, 000 24 262 564 573 582 596 613 632 642 649 1, 980, 000 ! 19, 455, 900 ! 36, 331, 270 36, 843, 270 i 37, 073, 270 37, 714, 270 38, 590, 570 39,566,310 39,876,310 40, 155, 310 474 2,538 3, 997 4,009 4, 024 4, 033 4, 039 4, 049 4, 058 4, 065 17, 766, 500 104, 477, 400 168, 762, 300 169, 035, 300 169, 670, 300 170, 057, 800 170, 147, 800 170,772,800 170, 995, 300 171, 300, 300 500 2,845 4,601 4,622 4,642 4,662 4,681 4,707 4,726 4,739 19, 846, 500 125, 621, 300 206, 619, 570 207, 404, 570 208, 234, 570 209, 173, 070 210, 064, 370 211, 465, 110 211, 997, 610 212, 556, 610 1 Amount (cumulative) 1 1 2 Refers to numbers of separate investments, not to number of associations in which investments are made. Reduction due to insurance or federalization of associations. September 1938 453 Table 11.—Properties acquired by H . O . L. C through foreclosure and voluntary deed 1 Number Period Prior to 1935 1935: Jan. 1 through June 30 July 1 through Dec. 31 1936: Jan. 1 through June 30 July 1 through Dec. 31 1937: Jan. 1 through June 30 July 1 through Dec. 31 1938: January February March April May June July Grand total to July 31, 1938 9 114 983 4,449 15, 646 23, 459 26, 899 4,811 4,334 4,906 4,870 4,767 4,701 4,130 104, 078 Table 12.—Reconditioning Division—Summ^ of all reconditioning operations of H . O . L. C. through July 3 1 , 1938 x June 1, 1934 through June 30, 1938 Cases received 2 Contracts awarded Number Amount Jobs completed: Number Amount 944, 476 July 1, ICumulative 1938 through through July 31, July 31, 1938 1938 11, 225 955, 701 12, 064 574, 327 586, 391 $110, 246, 570 $2,483,350 $112,729,920 12, 566 562, 723 575, 289 $106, 090, 336 $2,382,105 $108,472,441 1 Does not include 15,516 properties bought in by H. O. L. C. at foreclosure sale but awaiting expiration of the redemption period before title in absolute fee can be obtained. In addition to the 104,078 completed cases, 577 properties were sold at foreclosure sale to parties other than the H. O. L. C. and 14,270 cases have been withdrawn due to payment of delinquencies by borrowers after foreclosure proceedings were authorized. 1 All figures are subject to adjustment. Figures do not include 52,269 reconditioning jobs, amounting to approximately $6,800,000, completed by the Corporation prior to the organization of the Reconditioning Division on June 1, 1934. 2 Includes all property management, advance, insurance, and loan cases referred to the Reconditioning Division which were not withdrawn prior to preliminary inspection or cost estimate prior to April 15, 1937. Table 13.—Federal Home Loan Bank advances to member institutions by Districts Table 14.—Lending operations of the Federal Home Loan Banks [Thousands of dollars] Advances made Advances made Federal Home Loan Banks during July during June 1938 1938 Month No. No. No. No. No. No. No. No. No. No. No. No. 1—Boston 2—New York 3—Pittsburgh. 4—Winston-Salem 5—Cincinnati 6—Indianapolis 7—Chicago 8—Des Moines 9—Little Rock 10—Topeka 11—Portland 12—Los Angeles Total 454 $199, 000. 00 521, 000. 00 533, 007. 35 _ 1, 182, 500. 00 469, 500. 00 288, 400. 00 352, 500. 00 247, 000. 00 232, 750. 00 395, 350. 00 237, 500. 00 285, 500. 00 $420, 700. 00 705, 400. 00 892, 400. 00 1, 790, 400. 00 956, 400. 00 549, 500. 00 2, 304, 000. 00 1, 314, 686. 00 924, 000. 00 1, 462, 200. 00 728, 650. 00 2, 798, 115. 86 4, 944, 007. 35 14, 846, 451. 86 1936 January-July.. July 1937 January-July.. July 1938 January-July.. July Advances monthly Repayments monthly Balance outstanding at end of month $46, 477 8,507 $27, 171 4,993 $122, 101 69, 221 10, 221 45, 051 7,707 169, 571 46, 125 4,944 54, 327 9,277 191, 892 Federal Home Loan Bank Review ^ D I S T R I C T NO. 4 Resolutions of the Board AMENDMENT FEDERAL TO R U L E S A N D REGULATIONS SAVINGS APPROVAL AND REQUIREMENT LOAN SYSTEM, REGARDING MARYLAND: FOR THE REPEALING REQUESTS FOR Baltimore: Raspeburg Building & Loan Association, Incorporated, 5718 Belair Road. DISTRICT NO. 5 OHIO: Mount Sterling: Security Building & Loan Company, 23 North London Street. DISTRICT NO. 6 F I E L D EXAMINATIONS A N D APPRAISALS OF APPLICANTS Approved August 24, 1938; effective upon filing for publication in the Federal Register. FOR CONVERSION: The third sentence of Section 102.020* of the Rules and Regulations for the Federal Savings and Loan System which reads as follows was repealed: After consideration by an executive officer of the Federal Home Loan Bank of the District in which the applicant is located, by the district examiner, and by the chief examiner, any member of the Board may approve such request, and, if approved, a field examination or appraisal, or both, will then be made by the Board. AMENDMENT INSURANCE QUIREMENT TO RULES AND REGULATIONS OF ACCOUNTS REPEALING REGARDING FIELD APPROVAL EXAMINATIONS FOR REAND APPRAISALS OF APPLICANTS FOR INSURANCE OF AC- COUNTS: Approved August 24, 1938; effective upon filing for publication in the Federal Register. The third sentence of sub-paragraph (4) of Paragraph d of Section 201.002* of the Rules and Regulations for Insurance of Accounts, which reads as follows, was repealed: A member of the Board shall approve or disapprove such request, and, if approved, a field examination and appraisal will then be made by the Examining Division. •Since copies of recodified Rules and Regulations for Fedeial agencies have not yet been distributed, the old code numbers are listed for the convenience of readers. Section 102.020: Section 20. Section 201.002: Section 2. Directory of Member/ Federal, and Insured Institutions Added during July-August I. INSTITUTIONS ADMITTED TO MEMBERSHIP IN THE FEDERAL HOME LOAN BANK SYSTEM BETWEEN JULY 16, 1938, AND AUGUST 15, 1938 * (Listed by Federal Home Loan Bank Districts, States, and cities) DISTRICT NO. 1 INDIANA: Worthington: Greene County Building Savings & Loan Association. DISTRICT NO. 7 ILLINOIS: Springfield: Springfield Homestead Association, 402 Ridgely-Farmers Building. DISTRICT NO. 8 MISSOURI: Jefferson City: Hub City Building & Loan Association, 131 East High Street. DISTRICT NO. 10 OKLAHOMA: Clinton: Clinton Building & Loan Association. DISTRICT NO. 12 CALIFORNIA: Modesto: El Portal Building-Loan Association, 927 Eleventh Street. Palo Alto: Home Building & Loan Association, 545 Ramona Street. WITHDRAWALS FROM THE FEDERAL HOME LOAN SYSTEM BETWEEN JULY 16, 1938, AND AUGUST 15, INDIANA: Decatur: Decatur Savings & Loan Association, 119 South Second Street (cancelation of membership). KANSAS: Kansas City: Provident Building, Loan <fe Savings Association of Kansas City, Kansas (merger with Anchor Building, Savings & Loan Association, Kansas City, Kansas). Paola: Home Savings & Loan Association (voluntary withdrawal). MARYLAND: Baltimore: Acme Savings & Building Association of Baltimore City, 1210 East Monument Street (voluntary withdrawal). Homeland-Willow Building Association, Incorporated, Corner York Road & Homeland Avenue (cancelation of membership). Jackson Square Loan & Savings Association of Baltimore City, 2018 Orleans Street (voluntary withdrawal). Madison Square Permanent Building Association of Baltimore City, 1030 North Central Avenue (voluntary withdrawal). N E W YORK: Port Richmond: Port Richmond Co-operative Savings & Loan Association (merger with Northfield Building Loan & Savings Association).1 PENNSYLVANIA: Darby: Darby Building & Loan Association, Darby Trust Building (voluntary withdrawal). East Stroudsburg: East Stroudsburg Building & Loan Association, 93 South Crystal Street (voluntary withdrawal). Philadelphia: Alvin Building & Loan Association, Southwest Corner Broad & Federal Streets.' Progressive Home Building & Loan Association of Philadelphia, Southwest Corner Broad & Federal Streets.3 Square Deal Building & Loan Association, 517 Perry Building.8 TEXAS: Dallas: Dallas Homestead & Loan Association, 1117 Praetorian Building (cancelation of membership). II. FEDERAL SAVINGS AND LOAN ASSOCIATIONS CHARTERED BETWEEN JULY 16, 1938, AND AUGUST 15, 1938 DISTRICT NO. 3 CONNECTICUT: Willimantic: Willimantic Building & Loan Association, 666 Main Street. MASSACHUSETTS: Chicopee Falls: Chicopee Falls Co-operative Bank, 20 Broadway. DISTRICT NO. 3 PENNSYLVANIA: Philadelphia: Alvin Progressive Building & Loan Association, 517 Perry Building. South Philadelphia Building & Loan Association Number 2, 2101 South Nineteenth Street. i During this period 2 Federal savings and loan associations were admitted to membership in the System. September 1938 BANK 1938 PENNSYLVANIA: Philadelphia: Alvin Progressive Federal Savings & Loan Association, 517 Perry Building (converted from Alvin Progressive Building & Loan Association). Pottsville: Greater Pottsville Federal Savings & Loan Association, 115 Mahantongo Street (converted from Greater Pottsville Building & Loan Association). 8 Northfield Building Loan & Savings Association, after the merger, changed its name and address as follows: Northfield Savings & Loan Association, 221 Richmond Avenue, Port Richmond, New York. 3 These three associations consolidated into the Alvin Progressive Building & Loan Association, Philadelphia, Pennsylvania, which became a member and was then converted to a Federal. 455 DISTRICT NO. 4 MARYLAND: Baltimore: Pearl Street Federal Savings & Loan Association, 30 Pearl Street (converted from Pearl Street Perpetual Savings & Loan Association of Baltimore City). Kaspeburg Federal Savings & Loan Association, 5718 Belair Road (converted from Raspeburg Building & Loan Association, Incorporated). DISTRICT NO. 12 CALIFORNIA: Pomona: Pomona First Federal Savings & Loan Association, 260 South Thomas I Street (converted from Pomona Mutual Building & Loan Association). CANCELATIONS OF FEDERAL SAVINGS AND LOAN ASSOCIATION CHARTERS BETWEEN JULY 16, 1938, AND AUGUST 15, 1938 ARIZONA: Phoenix: Phoenix Federal Savings & Loan Association, 116 North First Avenue (merger with First Federal Savings & Loan Association of Phoenix, Phoenix, Arizona). III. INSTITUTIONS INSURED BY THE FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION BETWEEN JULY 16, 1938, AND AUGUST 15, 1938 DISTRICT NO. 1 CONNECTICUT: Enfield: Thompsonville Building & Loan Association, 25 Pearl Street. DISTRICT NO. 3 PENNSYLVANIA: Philadelphia: . „ . # . Clearfield Federal Savings & Loan Association, 7300 Frankford Avenue. DISTRICT NO. 5 OHIO: Barnesville: *i Peoples Building & Loan Company, 113 West Main Street. Cleveland: Third Federal Savings & Loan Association of Cleveland, 6875 Broadway. DISTRICT NO. 6 MICHIGAN: Port Huron: Citizens Federal Savings & Loan Association of Port Huron, 525 Water Street, 18 White Block. DISTRICT NO. 7 ILLINOIS: Chicago: Pulaski Building Loan & Investment Association, 1303 North Ashland Avenue. DISTRICT NO. 8 IOWA: Osage: ome Savings & Loan Association, Cleveland Building. DISTRICT NO. 9 TEXAS: Taylor: Taylor Building & Loan Association. Announcement of Directors • THE Federal Home Loan Bank Board has recently announced the appointment of W. Waverly Taylor, President of Waverly-Taylor, Inc., Washington, D. C , as Public Interest Director for the Federal Home Loan Bank of Winston-Salem. Walter J. L. Ray, Vice President-Secretary, Standard Savings and Loan Association, Detroit, Michigan, was elected Director-at-Large for the Federal Home Loan Bank of Indianapolis. 456 Insurance Companies ® (Continued from p. 431) during 1937 and real estate owned subject to redemption decreased $29,000,000. Against these decreases was a net increase of $48,000,000 in the amount of real estate contracts. Acquisitions of real estate by life insurance companies were declining during 1937 although more so in the aggregate of all types of property than in the instance of homes alone. Table 2 shows the experience of life insurance companies during the past three years. It is evident that all types of property collectively displayed a stronger position than homes taken as a group. The value of home properties acquired in 1937 equaled 5.8 percent of the home mortgages outstanding at the beginning of the year and was only 1 percent less than the net amount foreclosed upon in 1936. In contrast, the value of all types of properties taken over in 1937 amounted to only 4 percent of the total mortgage balance at the beginning of the year and was 41 percent below the net amount acquired in 1936. life insurance companies were not only forced to acquire a relatively larger proportion of homes than of other types of real estate during 1937 but they likewise found that it was nearly as difficult to dispose of home property in 1937 as in 1936. Home property in the amount of approximately $75,000,000 was disposed of during 1937—an increase of only 1 percent over 1936 (Section IV). However, the total amount of properties moved during 1937 was 17 percent greater than the amount shifted during 1936, due to the fact that there was particular improvement in the market for farms and for primarily commercial joint home and business structures. Of the total amount of real estate disposed of, homes accounted for 33 percent in 1937 and 38 percent in 1936. Urban commercial property made up 30 percent of the total in 1937 as against 25 percent in 1936, while farm property remained approximately stationary at 37 percent in both of these years. The apparent conclusions to be reached from this survey are that life insurance companies are finding the urban home-mortgage field increasingly desirable for the investment of their funds. Moreover, it is evident that there is a growing demand for lending for the purchase and construction of urban homes, with adequate funds available to finance a major building boom. Federal Home Loan Bank Review © INDEX OF VOLUME 4 FEDERAL HOME LOAN BANK REVIEW For the convenience of readers in finding references the pagination of each issue of Volume 4 is as follows: Volume 4 No. No. No. No. No. No. 1—October 2—November 3—December 4—January 5—February 6—March 1-38 39-74 75-110 111-150 151-194 195-230 A-B-C Book Opinions: see end of index Advertisements: by FSLA, 123; dividend, 3, 82Advertising: analysis of results of, 84-; dividend check and direct mail, 83-; examples of window displays and outdoor, 362-; problem of institutional advertising, 84-; results of window displays, 385; types of display, 363-; use of newspapers for, 82Advertising, cooperative: in Greater Cleveland Area, 323; in Little Eock, 324; in Minneapolis-St. Paul, 324; in New Orleans, 324; in New York City, 323; in Oklahoma City, 322; "Insured Savings Week" in New Orleans, 2; trends in cooperative campaigns, 325; outdoor campaigns, 365 " Analysis of the Building Cost Index": (series of articles with tables and charts) 272-, 353-, 395-, 435-; analysis of material and labor costs, 274-, 353-, 395-, 435-; material-labor ratio, 273; plan of standard house, 354-; trend of costs, 354-, 395-, 437; yearly averages by cities, 384-, 398Appraisals: "Bibliography on Urban Real Estate Appraisal", 86; "Catalog of Urban Real Estate Appraisal Data Sources", 85-; "Survey of Rural Real Estate Appraisal Sources", 86; "Valuation of Real Estate with Special Reference to Farm Real Estate", 86 Balance sheets, clear and understandable: examples of, 283-; results of use of, 285 Bellman, Sir Harold, 371 Budgets: comparison of budget with actual operations during 1937,319; experience of manufacturing industries and financial institutions with, 241-; for savings and loan associations, 247, 277-; illustrative budgets, 277-; operating ratios, 320; place of, in business management, 240-; preparation, installation, and adjustment of, 279, 316-; sample operating budget for a savings and loan association, 317; theory underlying budget practice, 240Building costs, indexes of: monthly analysis of small-house building costs in selected cities with table is published in each issue; also see "Analysis of the Building Cost Index" Building cycle, in Chicago, 245Building society experience in England, 371Bureau of Foreign and Domestic Commerce: "Construction Activity in the United States, 1915-1937", 393-; Market Research Division, estimates on retail sales, 265 Bureau of Standards: see National Bureau of Standards Business reviews, development of local real estate statistics by, 287Central Housing Committee: Joint Committee on Appraisal and Mortgage Analysis, 85-; Sub-Committee on Law and Legislation: study of title examination and proof, 112-; uniform mechanic's lien act, 232-; uniform real estate mortgage and foreclosure law, 40Codification of rules and regulations of Federal agencies, 426 Constitutionality of FSLA, 348Construction: (analysis of current residential construction and real estate conditions with tables is published in each issue) cooperation in England in construction industry, 352; costs of, in England, 352; costs of, lowered by cooperation, 47; estimate of, in U. S., 393-; income of employees in, 270; need for supervised, 400-; standards of, in England, 352 Contractual arrearages: 120-; recording, 121Cover, Dr. John H., study of home financing in relation to business fluctuations by, 245Credit unions, investments in share accounts of FSLA, 242Debentures: fifth issue of, by FHLB, 373; fourth issue of, by F H L B , 265; third issue of, by FHLB, 93 Default, settlement of insurance upon, 268Deficiency judgments, 45 Delinquency, contractual, 120Design value in low-cost housing, 4 Directors, F H L B : announcement of election of, 129-, 456; appointments of Public Interest, 202-, 456; chairmen and vice-chairmen designated, 202- September 1938 Volume 4 Page No. No. No. No. No. No. 7—April 8—May 9—June 10—July 11—August 12—September Page 231-270 271-306 307-346 347-386 387-426 427-458 Directory of member, Federal, and insured institutions is published in each issue Dividends, announcement of: analysis of advertising results, 84; dividend checks and direct mail advertising, 83; effective advertising, 82-; use of newspapers for, 82 England: Building Industries National Council, 47, 352; Building Societies Association, 352; building society experience in, 371-; determination of wage rates in, 352; home ownership in, 371; mortgage conditions in, 351-; National Joint Council for the Building Industry, 352; standards of construction in, 352 Evans, Randolph, A. I. A., house design by, 5 Farm Security Administration, street and house plans for Greendale, Wis., 199Federal credit unions: investments in share accounts of FSLA, 242-; number of, by States, 244 Federal Home Building Service Plan: cooperation of architects, financing agencies and builders, 47; effect of home-financing practices on neighborhood stability, 199-; "Home Selector", 360-; house built under, 86-; house design by T. A. Flaxman, 401; need for supervised construction, 400-; plan similar to standard house, 355; "Portfolio of Small Homes", 360-; Texas house plan, 439 Federal Home Loan Banks: (summary of growth and lending operations with tables is published in each issue; table of interest rates charged, condensed consolidated statement of condition, consolidated statement of condition, consolidated statement of profit and loss, and table of dividends paid or declared are published semiannually, February and August; condensed consolidated statements of condition compared for 1937,1936,1935 is published in February issue; combined statement of condition for all members is published in August issue) announcement of election of directors, 129-, 456; appointments of Public Interest directors, 202-, 456; chairmen and vice-chairmen designated, 202-; fifth issue of debentures, 373; fourth issue of debentures, 265; Little Rock public relations program, 1-; third issue of debentures, 93 FHLB, Rules and Regulations, amendments to: bonuses or gratuities to officers and employees, 148; examinations and appraisals, 148 Federal Saving and Loan Advisory Council, 1938-1939 membership of, 434 Federal savings and loan associations: (analysis of growth and operations of Federals with tables is published in each issue) constitutionality of, upheld, 348-; credit union investments h), 242-; nominal and effective interest rates, 48-, 76-; problem of real estate owned by, 308-; variable interest rates, 48-, 76FSLA, Rules and Regulations, amendments to: application procedure for lending privilege under NHA Amendments of 1938, 228-; fidelity bonds, 108; field examinations and appraisals, 455; maximum insured loan permitted, 228; permission to Charter K Federals to purchase, make, and sell FHA insured loans* 227-; power to sell loans, 321; purchase requests, 305; sale and servicing of loans, 227; surety bonds, protection by, with respect to operation of safe deposit business, 227; Treasury share subscriptions, 72; voluntary repurchases of full-paid income shares, 305 Federal Savings and Loan Insurance Corporation: (analysis of operations with table, and analysis of operations of reporting insured State-chartered associations with table are published in each issue) admission fee, 373; four years of progress, 357; how insurance protects institution, 357; income of, 357; operating expense of, 357; record of insured institutions, 357; settlement of insurance upon default, 268-; State legislation and the insurance program, 17FSLIC, Rules and Regulations, amendments to: borrowing power, 227; defini tion of "account of an insured member", 268; determination of amount of insured account, 268; fidelity bonds, 109; field examinations and appraisals, 455; monthly reports, 268 Federal Savings and Loan System: analysis of growth with tables is published in each issue "Financial Survey of Urban Housing", 81 First FS&LA of Washington, D. C , instructions for office personnel, 394 Flaxman, T. A., house design by, 401 457 Foreclosures: index of foreclosures in 78 large urban counties is published in each issue Foreclosures, HOLO: (monthly table on properties acquired is published in each issue) average time and cost, by States, 43-; cost and type of action, by States, 42 Oreendale, Wis., Farm Security Administration housing project, 200Home building, an example of coordinating technical research in, 15Home financing, in relation to business fluctuations, 245Home-mortgage debt, nonfarm: 388; estimated amount outstanding, 390-; estimated annual loan volume, 392; estimated private long-term debts, 389Home Owners' Loan Corporation: (monthly tables on properties acquired, investments in securities of thrift institutions, and operations of the Reconditioning Division are published in each issue) examples of experience in reconditioning owned real estate, 312-; experience in examining and proving title, 112HOLC, Rules and Regulations, amendments to: purchase requests, 305; voluntary repurchases of HOLO investments, 305 Home ownership, in England, 351"Home Selector", a new method of presenting home designs, 360Homestead tax exemption, 6"Housing Market", review of, 280Income of employees in finance and construction, 270 Industrial production: index of industrial production is published in each issue Insurance: see Federal Savings and Loan Insurance Corporation "Insured Savings Week", in New Orleans, 2 Interest rates: causes of decreased interest rates, 77-; comparison of Federal Reserve Bank member nominal interest rates with FSLA effective interest rates, 80; comparison of non-insured and FHA insured loan, 79; general structure of, 78-; loan classification or rating sheets, 70; nominal and effective, charged by FSLA, 48-, 76-; variable, 48-; variable, in relation to loan classification, 124Labor costs of the standard house, analysis of, 274-, 353-, 395-, 435Life insurance companies, investments of, 204-, 428Little Rock, FHLB of, public relations program, 1Loan classification, in relation to variable interest rates: 124-; borrower risk, 128; property and neighborhood risk, 125Loan classification sheets: experience of associations with, 70,124-; sample, 126Low-cost housing, 4 Market for homes in 1938, estimated, 399 Material costs of the standard house, analysis of, 274-, 353-, 395-, 435Mechanics' lien laws: 232-; discussion of proposed uniform act, 235-; priority of liens, 233; regulation of payments by owner to contractor, 233-; results of, 232-; right to, and extent and duration of, a lien, 233; uniform mechanics' lien act, 234Mortgages and foreclosures: 40-; average time and cost, by States, 43-; deficiency judgments, 45; diversities of State laws, 41; effect on lending policies, 42; HOLC foreclosure costs and type of action, by States, 42; redemption period, 44; uniform foreclosure, 44; uniform statutory mortgage, 44 Mortgage loans: investments of life insurance companies in, 428; model docket for, 237-; nominal and effective interest rates on, 48-, 76Mortgage loan dockets, 237Mortgage recordings: cooperation in collection of, 358-; sample monthly report of nonfarm, 359; value of local compilation of, 304 National Appraisal Forum, 16, 85 National Bankruptcy Act, mortgage debts under revised, 373 National Bureau of Standards, coordinating technical research in home building, 15National Housing Act Amendments of 1938: 196-; Title I, 196; Title II, 196-; Title III, 198 Nonfarm home-mortgage debt in U. S., 388Pay rolls: index of manufacturing pay rolls is published in each issue Public relations program, FHLB of Little Rock, 1Real estate: acquired by life-insurance companies, 430; examples of HOLC experience in reconditioning owned, 312-; investments by life-insurance companies, 431; problem of institutionally owned, 308-; reconditioning of, 11-; reconditioning owned, 311-; trends in, for all FHLB member institutions, 310 Reconditioning: examples of HOLC experience in, 312-; owned real estate, 311-; real estate, 11Reconditioning Division: monthly table of operations is published in each issue Reed, Earl H., house design by, 355 Rentals: index of rentals is published in each issue Reserves: accounts and management, 432-; general, 434; maintenance of proper, 434; need for, 432-; types of, 433 458 Resolutions of the Board: (also see FHLB, FSLA, FSLIC, and HOLC and Regulations, amendments to) amending Form 1, application for i ship, 36; Federal Home Building Service Plan, 148; investments by HOLC in securities of savings and loan associations, 73; loans on small apartment houses, application for permission to make by FSLA, 108; tenants by the entirety, forms for, 321 Retail sales, 265 "Review of 1937", economic conditions and business activity in, 152- (entire February issue is a year-end statistical number) Savings and loan associations: (analysis of monthly lending activity with tables, chart comparing construction loans by, with building activity, and tablev giving loans made by all, are published in each issue) budgets for, 247,277-, 316; cooperative advertising, 322; home-mortgage loans made and held by, 392; nominal and effective interest rates, 48-, 76-; preparation and adjustment of budgets for, 316-; problem of real estate owned by, 308-; variable interest rates, 48-, 76-; window displays and outdoor advertising for, 362Schreier and Patterson, house design by, 87 Share insurance and State legislation, 17Shreveport, First FS&LA of: plan of house financed by, 401; supervised construction service, 400Small-house design by Randolph Evans, A. I. A., 5 "Standard house", plan of, 354State legislation: annual reports by New Jersey associations, 285; credit unions, 242-; insurance of share accounts, 17-; land title registration laws, 112-; mechanics' lien laws, 232-; mortgage and foreclosure laws, 40-; title examination and proof, 112Tax exemption, homestead, 6Texas house, plan of, 439 Title examination and proof: costs of, 112-; experience of HOLC, 112-; experience of large lending institutions, 117-; methods of, 112-; time element in, 112T. I. B. M. series, Bureau of Standards, 15 Torrens system, land title registration, 112United States Circuit Court of Appeals, decision on constitutionality of FSLA, 348University business reviews, development of local real estate statistics by, 287Vacamcies, reports on, during 1937,306 Wilson, F. Talbott, house design by, 439 Wisconsin, First FS&LA of, U. S. Circuit Court of Appeals' decision, 348Zoning and planning progress, 46A-B-C BOOK OPINIONS Accounts: unclaimed, 71; payments by check, 227 Advances: prepayment on notes for, 105; to nonmembers on large-scale mortgages insured by FHA, 105; valuation of real estate for purposes of, 105 Borrowing power, insured institutions, 106 Commissions, on sale of accounts, right of insured institutions to pay, 72 Creditor liabilities, definition of, 267 Directors: qualification of, 399; removal of, by board of directors, 72 Dividends, retention of, on shares repurchased, 36 FHA insured mortgages, advances to nonmembers secured by, 106 Fidelity bonds, 227 First lien, what constitutes a, 107 Home mortgage, defined, 106 Loans: approval of, 227; real estate, 71 Mortgage loans: advances to nonmembers on large-scale FHA insured, 105; home mortgage defined, 106; improved real estate, 163; payment by check, 227; penalty on, 71; prepayment of, 71; what constitutes a first lien, 107 Notes, advances to member, prepayment, 105 Office building, location of, and investment in, 105 Officers, right to hold two offices, 106 Powers of FSLA: incidental and implied, 266; office building, purchase of, 105 Real estate: book value of owned, 107-; improved, 163; loans, 71; office building, purchase of, 105; valuation of, for purposes of advances, 105 Sale of accounts, commissions on, right of insured institutions to pay, 72 Share accounts: retention of dividends on shares repurchased, 36; use of term "savings" as descriptive of, and in advertising, 71 Federal Home Loan Bank Review V. S. GOVERNMENT PRINTING OFFICE: 1938 FEDERAL HOME LOAN BANK DISTRICTS YOB* ——BOUNDARIES OF FEDERAL HOME LOAN BANK DISTRICTS O FEDERAL HOME LOAN BANK CITieS. OFFICERS OF FEDERAL HOME LOAN BANKS CHICAGO BOSTON B. J. ROTHWELL, Chairman; E . H . W E E K S , Vice Chairman; W . H . NEAVES, President; H. N. FAULKNER, Vice President; FREDERICK W I N ANT, J R . , Treasurer; L . E . D O N O V A N , Secretary; P . A. H E N D R I C K , Counsel. MORTON B O D F I S H , Vice Chairman; A. R. G A R D N E R , BARDWICK, J R . , Vice President-Treasurer; President; CONSTANCE M. JOHN WRIGHT, Secretary; LAURETTA Q U A M , Assistant Treasurer; UNGARO & S H E R WOOD, Counsel. NEW DES YORK MOINES Chairman; C. B . B O B B I N S , Chairman; E . J. R U S S E L L , Vice Chairman; R. J. R I C H A R D - G. L. B L I S S , President; F . G. STICKBL, J R . , Vice President-General SON, President-Secretary; W . H . LOHMAN, Vice President-Treasurer; J. M . M A R T I N , Assistant Secretary; A. E . MUELLER, Assistant Treasurer; E . S. TESDELL, Counsel. GEORGE MACDONALD, Counsel;' R O B E R T Chairman; F . V. D. LLOYD, Vice G. CLABKSON, Vice President-Secretary; DENTON C. L Y O N , Treasurer. PITTSBURGH LITTLE ROCK E . T . TRIGG, Chairman; C. S. T I P P E T T S , Vice Chairman; R. H . R I C H ARDS, President; G. R. PARKER, Vice President; H. H. GARBER, J. GILBERT L E I G H , Chairman; W . C. J O N E S , J R . , Vice Chairman; B . H . W O O T E N , President; H . D . WALLACE, Vice President; W . F . T A R V I N , Secretary-Treasurer; R. A. CUNNINGHAM, Counsel. Treasurer; J. C. CONWAY, Secretary; W. H . CLARK, J R . , Counsel. WINSTON-SALEM TOPEKA G. W. W E S T , Chairman; E . C. BALTZ, Vice Chairman; O. K . L A R O Q U E , President-Secretary; G. E . WALSTON, Vice President-Treasurer; Jos. W. H O L T , Assistant Secretary; RATCLIFFE, H U D S O N & F E R R E L L , Counsel. W. R . MCWILLIAMS, Chairman; G. E . M C K I N N I S , Vice Chairman; C. A. STERLING, President-Secretary; R. H . BURTON, Vice PresidentTreasurer; JOHN S. D E A N , JR., General Counsel. CINCINNATI PORTLAND T H E O . H . T A N G E M A N , Chairman; W M . M E G R U E BROCK, Vice Chairman; WALTER D. DWIGHT WEBB, SHULTZ, President; W. J R . , Secretary; A. E. JULIUS, |L. M A D D O X , Vice President; Treasurer; T A F T , STETTINIUS & HQLLISTER, General Counsel; R. B . JACOBY, F. S. MCWILLIAMS, Chairman; B . H . HAZEN, Vice Chairman; F . H. JOHNSON, President-Secretary; IRVING BOGARDUS, Vice President- Treasurer; Mrs. E . M . SOOYSMITH, Assistant Secretary. Assigned Attorney. Los ANGELES INDIANAPOLIS F . S. CANNON, Chairman-Vice President; S. R. LIGHT, Vice Chairman; F R E D T . G R E E N E , President; B . F . B U R T L E S S , J O N E S , HAMMOND, BUSCHMANN & G A R D N E R , Secretary-Treasurer; Counsel. C. H . W A D E , Chairman; D . G. D A V I S , Vice Chairman; M . M . H U R FORD, President; C. E . BERRY, Vice President; F . C. N O O N , SecretaryTreasurer; VIVIAN SIMPSON, PATRICK, General Counsel. Assistant Secretary; RICHARD FITZ-
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