Evening star., 1932-07-23
HOME LOAN LAW
FILLS. OUT PROGRAM
Most Major Points in PreSi.
dents Rehabilitation Plan
Are Granted.
Continued From First Page.)

constitute the Federal Home Loan
Board.
The Presidents recommendations last
December 8 and what Congress, includ-
ing the Democratic House, did about
them line up like this:
Mr.. Hoover asked more money for
Federal land banks; Congress voted
$l25,OOO,0 ,0OO
He proposed increased taxes; Congress
passed a measure to raise $1118, 100000
more.
He wanted the Reconstruction FL
nance Corporation; Congress established
1t with a S3,8O0,O00,00O fund
He asked economy; Congress voted to
cut expenditures S150,000 900 by spe-
cial bill, and the Senate set up COM
mittee to study the question during the
Summer; all appropriations were re-
duced under the budget estimates.
Direct Gifts Disapproved.
He wanted to make more paper eligi-
bic for discount by Federal Reserve
banks; the bill sponsored by two Demo-
crats-Senator Glass of Virginia and
Representative Steagall of Alabama
did that.
He asked rejection of the dole; di-
rect gifts by the Federal Government
10 INDIVIDUALS were llOI dppIOV0U
He suggested the use of Federal Re-
serve funds to liberate funds in failed
banks; Congress did not grant that, al
though the House passed bill to guar
anty deposits in national banks.
He wanted to avoid general tariff
revision; no general revision was at
tempted. but Democrats sent to him for
a veto their bill for changes.
He proposed changes in railroad
laws: several measures to that end are
pending in both houses.
He sought adjustment of antitrust
laws to remove injustices; Congress has
not granted that.
He urged additional Federal regula-
ton of interstate power transmission;
Congress failed to act.
He opposed additional veterans ex-
penditures, Congress approved bill to
liberalize bonus certificate loans. but
turned down cash payment of the bonus
and set up a special committee to study
veterans benefits during the recess.
He wanted a general overhaul Of
banking laws; the Glass bill pending in
the Senate is drawn to accomplish that
purpose.
He sought authority to consolidate
governmental activities; limited power
to do that was granted in the economy
bill
The text Of the Presidents statement
IN signing the home loan bill follows:
Il have today signed the home loan
bank bill. This institution has been
created on the general lines advocated
by me in statement to the press on
November 13 last. 1t is the outcome Of
the national conference on home owner
ship, which represented every part of
the country. Its purpose is to estab-
lish series of discount banks for hcme
mortgages, performing a function for
home owners somewhat similar to that
performed in the commercial field by
the Federal Reserve Banks through their
discount facilities.
Have Triple Security.
There are to be 8 to II such banks
country with a total capital Of S125,-
100000 to be initially subscribed by the
Reconstruction Finance Corporation.
Building and loan associations, savings
banks, insurance companies, etc, are
to be eligible for membership in this
system. Member institutions are re-
quired to subscribe for stock of the
home loan banks and to absorb gradu-
ally the capital and they may bcrrow
from the banks upon their notes to be
secured by the collateral of sound home
mortgages.
The home loan banks are in turn to
obtain the resources required by them
through the issue of debentures and
notes. These notes have back of them
the obligation of the members, the
mortgages pledged as securities Of such
obligations and the capital of the home
loan bank themselves. The debentures
and notes thus have triple security.
The creation of these institutions
t,v,N IN ant n 4
business except in the initial work Of
the Reconstruction Finance Corporation,
and the setting up of the board in
Washington to determine standards Of
practice. The cost of this board in
Washington is to be paid by the home
loan banks and the banks are to be
owned and run by their members. In
effect, it IS using the good Offices OF
the Government and the Reconstruction
Finance Corporation to set up cooper
ative action among these member in
stitutions to mobilize their credit and !
resources. There are several thousand
institutions eligible for membership.
The purpose of the system Is both
to meet the present emergency and to
build up home ownership or more IA
vorable terms than exist today The
immediate credit situation has for the
time being in many parts OF the coun-
try restricted the activities OF build
ing and loan associations, savings banks
and other institutions making loans for
home purposes, in such fashion that
they are not only unable to extend |
credit for the requirement OF new
:. homes, but in thousands OF instances
they have been unable to renew exist |
ing mortgages with resultant fore |
closures and great hardships.
"A considerable part OF our unem-
ployment is due to stagnation in resi-
dental construction. There has been |
overbuilding in certain localities in |
boom years, but there has been far less I
than normal construction of new homes !
for three years in pace with the increase |
of population and there Is thus short !
age which, while now obscured by pres
ent budding. will become evident with |
the first stage of recovery. Nearly 2oo,- |
600 new homes are erected annually IN !
normal times which with initial fur
nishing contribute $4,000, 100000 to con-
struction and other industries. A sur |
vey by the Department of Commerce |
shows that there are localities in which |
there Is today an immediate demand
for homes amounting from $500, 900, 900
to $500, 900 900 which could be under /
taken at once if financing were avail |
able. Thus the institution should serve |
to Immediately increase employment.
I'm the long view, We need at all |
times to encourage ownership and for |
such encouragement it must be possible |
for home owners to obtain long term |
loans payable in installments. These |
institutions should provide the method |
for bringing into continuous and steady |
action the great home loaning associa-
tions which are so greatly restricted !
due to present pressures.
Initiation Fear Secuted.
There was attached to the bill by |
the Congress a rider for the limited ex- !,
tension of the old national bank cur
rency. I am advised by the Treasury |
that in the practical working of this |
provision it will not result in imitation. |
The controller of the currency informs