Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FOURTH ANNUAL REPORT of the FEDERAL HOME LOAN BANK BOARD covering operations of the FEDERAL HOME LOAN BANKS SAVINGS AND LOAN DIVISION THE HOME OWNERS' LOAN CORPORATION FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION for the period July 1, 1935, through June 30, 1936 JANUARY 25, 1937.-Referred to the Committee on Banking and Currency and ordered to be printed UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON : 1937 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Copies of this publication may be procured from the Superintendent of Documents, U. S. Government Printing Office Washington, D. C., at 20 cents per copy Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis LETTER OF TRANSMITTAL FEDERAL HOME LOAN BANK BOARD, Washington, January 25, 1937. The SPEAKER OF THE HOUSE OF REPRESENTATIVES. SIR: Pursuant to the requirements of section 20 of the Federal Home Loan Bank Act, we have the honor to submit herewith the fourth Annual Report of the Federal Home Loan Bank Board for the period July 1, 1935, to June 30, 1936, inclusive, covering the op erations of the Federal Home Loan banks, the Savings and Loan Division, the Home Owners' Loan Corporation, and the Federal Sav ings and Loan Insurance Corporation. Respectfully, JOHN H. FAHEY, Chairman, T. D. WEBB, WILLIAM F. STEVENSON, FRED W. CATLETT, H. E. HOAGLAND, Members. III Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis CONTENTS Page Foreword -------------- ------------------------------------ 1-3 The Federal Home Loan Bank Board----------------------------- 5-12 The Legal Department------------------------------ -------- 7-8 The Personnel Department--------------------------------------- 8 Examining Division------------------------- ----- 8-9 Appraisal Department ----------------------------- ----- 9-10 The Review Committee------------------------------------------ 10 The Division of Research and Statistics------------------------ 10 The Department of the Financial Adviser ------------ -- 10 The Department of the Budget Officer------- -------- 11 The Department of the Director of Public Relations -- -------- 11 The Department of the Secretary------ -------------- --- 11 The Home Building Service Plan-----------------------12 Participation in Exhibits--- ---------- ----- ----- 12 The Federal Home Loan Bank System-------------------- 13-20 Subscription to Stock of Federal Home Loan Banks---------- 15 Advances of the Federal Home Loan Banks ------------------ 15-16 Loans of Member Institutions--------- ------------ 16 Borrowing capacities of members June 30, 1936-------- 16-18 Financial Operations of the Federal Home Loan Banks--.------ 18 Other Activities------------- ------- 18-19 Federal Savings and Loan Advisory Council ---- ------------ 19-20 Bank Presidents' Council---------- ---------------- --- 20 Savings and Loan Division ------- ------------- 21-26 Authorization --------------------------- 21 Creation of the Division----- ---------- ------------- 21 Work of the Division-- -------------------- 21-22 Results Obtained------ --------- --------- 22-23 A. Charters to new organizations ------- ------------ 22 B. Charters by conversion --- -- - ---------- 23 C. Insurance of accounts------ ----------------- 25 D. Home Owners' Loan Corporation investments------ --- 25 Enabling Legislation ------------------------------ 26 Personnel ---- --------------------------------- 26 Receipts and Disbursements--------------- 26 Federal Savings and Loan System------------------- 27-28 The Home Owners' Loan Corporation------ ----------------- 29-41 Loans to Home Owners----------- ------------------- 29 Eligibility ------- _---------------------------- 29 Loan limits-------------------- ------------ 29 Terms and interest rate--- -- --------------------- - 30 Types of financial assistance provided_--------- ------ 30 Home Owners' Loan Corporation assistance noncompetitive -- 30 Loan applications-------- ----------------------- 30 Loan-closing operations------ ------- ----------- - 31 Appraisals-- - ----------------------- -- 31 Reconditioning---- ---------------- --------------- 31 Bonds Issued, Retired, and Outstanding--_------- -------- 31 Management --- --------------- ------ - -------- 32 Servicing and Collection of Loans ----- ------------------ 32-35 Establishment of regional offices------ ------------- -- 32 Collections from borrowers ------------------------ 34 Loan-servicing division - - ---------------------- - 34 Property management --------- - ----------------- 34 Addition to home office building --- ----------------- - 35 v Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis VI CONTENTS The Home Owners' Loan Corporation-Continued. Page Comptroller's Division --- ----------------------- 35-36 Organization --------------------------- 35 Accounting section-------------------------------,-- 36 Treasurer's section------ --------------------- 36 Insurance section------------------------ 36 Purchase and supply section------ -------------------- 37 Legal Department-------------- --------------- 37-39 Organization--------------------------- 37 Advisory-- ----------------------------------- ------- 37 Litigation division --------------------------------- 38 Servicing division ------ ---------------------- ----- 38 Personnel Department------- --------- -------- -------- 39 Auditing Department----------------------- 39L-40 Mortgagee Rehabilitation Division------------- ---- 40 Summary of Fiscal Operations --------- --------------- 41 Bonds --------------------- -------------- 41 ,Disposition of bonds and commitments issued, capital stock, and realized income--------------------- 41 Loans ------- ---------------------- 41 Liquidation----------------------------------------- 41 Properties------------------- 41 Income and expenses----- - --------------------- 41 Federal Savings and Loan Insurance Corporation ----- ------ 42-48 Standards and Procedure------ - ------------------ 42-44 Events of the Year-- ------------ -- -- -- ----- 44 Growth of insurance------ -------------------- 45-46 Future developments and problems------- -------------- 47 Corporation's balance sheets, income, and employees------- 47-48 Exhibit I. List of member institutions F. H. L. B. System------------ 48-107 II. Number of member institutions, shares subscribed, balance advances outstanding, number borrowers by districts and States ----------------------- 108-109 III. Advances and repayments from inception to June 30, 1936- 109-110 IV. Interest rates by districts------ ---------------- - 110 V. Combined financial statement of members----- --------- 111 VI. Financial statement of System --- ---------------- 112-115 VII. Profit and loss statement- - ---------------- 116-118 VIII. Analysis of surplus and reserves of banks ----------- 119-120 IX. Home Owners' Loan Corporation investments in savings and loan associations by States--------------------- 120-121 X. Number of charters, shareholders, assets, investments, bank advances, and loans outstanding in Federal savings and loan associations-------------- ---------- 121-123 XI. Summary of loans by Federal savings and loan associations by States-----_-------------------- 124 XII. Summary of reconditioning operations by Home Owners' Loan Corporation ------------ ------ 125-127 XIII. Home Owners' Loan Corporation bond transactions -- ----- 127 XIV. Property under jurisdiction Property Management Division- 128 XV. Personnel, number of employees--------------------------- 128 XVI. Personnel-------------------1--- -129 XVII. Disposition of proceeds of capital stock, bonds, and earnings, Home Owners' Loan Corporation_------------- - 130 XVIII. Progress of the Federal Savings and Loan Insurance Corpo ration, by States, June 30, 1935, to June 30, 1936------ 130 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FOURTH ANNUAL REPORT OF THE FEDERAL HOME LOAN BANK BOARD THIS REPORT EMBRACES THE FOUR ACTIVITIES DIRECTED BY THE FEDERAL HOME LOAN BANK BOARD The economic crisis which began in 1929 resulted in the disclosure of certain inherent fundamental weaknesses in the Nation's home financing structure. As a result of fear and reduced income the public ceased investing in home-financing institutions, and funds available for such financing almost disappeared. At the same time investors in these institutions, and in particular in those of the sav ings-and-loan type, withdrew, or endeavored to withdraw, their funds. As these thrift funds were invested in long-term home financing, the associations were unable to meet the demand. To re lieve this situation and to prevent its recurrence in the future, Con gress in 1932, by the Federal Home Loan Bank Act, created a reser voir of credit from which home-financing institutions might secure funds to meet the reasonable withdrawal requests of their investors and supplement the savings ordinarily received from individual citi zens to meet the home-financing needs of their communities. The Federal Home Loan Bank System was thus designed to stabilize and strengthen the agencies promoting private thrift and individual home ownership. It is prepared to extend to private home-financing in stitutions the same type of credit upon essentially the same terms and conditions as those institutions extend to individual borrowers.