Evening star., 1931-11-14

Following is the text of President
Hoover's announcement that he would
ask Congress to establish a system of
home loan discount banks to relieve
banking institutions dealing in these
securities and to speed home build
ing:
IT shall propose to Congress the es-
tablishment of a system of home loan
discount banks for four purposes:
81. For the present emergency pur-
pose of relieving the financial strains
upon sound building and loan associa-
tions. savings banks, deposit banks and
farm loan banks that have been giving
credit through the medium of small
mortgage loans upon urban and farm
properties used for homes. Thereby to
relieve presSures upon home and farm
owners.
- To put the various types Of in
stitutions loaning on mortgage in
position to assist in the revival Of home
construction in many parts Of the
country and with its resultant increase
in employment.
IS. To safeguard against the repeti-
ton of such experiences in the future.
a. For the long-view purpose of
strengthening such institutions in the
prom otion of home ownership, particu-
larly through the financial strength
thus made available to building and
lCdn dSSOClaLlOtlS.
The immediate credit situation has
for the time being in many parts Of the
country restricted severely the activitl@
of building and loan associations, de-
posit banks including country banks
and savings departments, savings banks
and farm loan companies in such
fashion that they are not only not able
to extend credit through new mort
cages to home and farm owners, but
N,zI.. k<x1 hi Azx-
cages or give consideration to those in
difficulty with resultant great hard
ships: to borrowers and a definite de-
probation of real estate values in the
areas where such pressures exist.
Construction Diminishes.
"a considerable part of our unem-
ployment is due to stagnation in resi-
Dental construction 1t is true there
has been some overbuilding in certain
localities in the boom years But even
in these localities the inevitable need
is obscured by the tendency of the
population to huddle temporarily duf
to unemployment The real need
steadily accumulates with increasing
population and will become evident and
insistent as we come out of the de-
preston. The high importance Of resi-
Dental construction as a matter OF
that more than 100000 individual
homes are erected annually in normal
times which with initial furnishing
contribute more than two billions to
our construction and other industries.
This construction has greatly dimin-
ished. It's revival would provide for
employment In the most vital way. AS
a people we need at all times the en-
couragemept of home ownership, and
q large part Of such action is only
possible through an opportunity to OBJ
tain long-term loans payable In INSTALL
ments. It Is urgently important, there
fore; that we provide some method for
bringing into continuing and steady
action the great facilities Of such OF
these great national and local loaning
concerns as have been under pressure
and should provide against such dim
culties in the future.
1.-THE farm mortgage situation pre-
Sents many difficulties to which this
plan would give aid.
"I have consulted with representa-
tives of the various groups granting
credit on mortgage leans for the home
and farm as well >as Government ON
cials and. other, economic agencies, and
as q practical solution from the va
rious needs and the various ideas ad-
vanced I propose the following general
principles for the creation of an insti-
tuition for such purpose:
"(a), That there be established IL
home loan discount banks df neces-
eary) one in each Federal Reserve dis
trict under the direction of q Federal
Home Loan Board.
"(b1 The capital of these discount
banks shall be initially Of minimum
Of TO 80 million as may be de-