Evening star., 1932-11-02
HOME LOAN BANK
CONTROLLERPOST
IS GIVEN BURKL|N
Members of New Board Deny
Congress Will Be Asked
to Add Capital.
APPOINTEE is NOW
POWER TREASURER
1924, ,OO0,00O capitalization for Re-
gional Banks of System May
Be Requested.

simultaneously with announcement
today that r. Reyburn Burklin Of this
city had been appointed controller of
the Home Loan Bank system, men,
bers of this new Federal board denied
current reports that legislative recon-
mendations would be submitted by them
to the coming Congress to strengthen
the organizations capitalization re-
quirements in an effort to get new
members.
Burklin is now treasurer of the Fed
eral Power Board and at one time was
an examiner for the Federal Reserve
Board and secretary-treasurer OF the
War Finance Corporation.
It was said he would start on his
duties at once 1t is believed that i'm
mediately after he gets his staff organ
lied. the Treasury will be called on to
subscribe approximately S124,000,00O
for capitalization of the systems IL
regional banks.
The new bank act specifies that in
the event sufficient capitalization is not
raised among eligible members of the
system, the Treasury could be called
on to subscribe up to sl25,000,000 Of the
S1340OO0G0 minimum capitalization.
Check Up in Progress.
Members of the board said a check
up of the stock subscription books,
which were closed October IA. one day
before the banks were opened, was not
vet completed, but indications were
that the eligible building and loan as
sociations life insurance companies and
savings banks had subscribed approx
mately S9500,0O0.
1t was stated that 600 out of 1000
building and loan associations in the
United States bought stock. Board
members declined. however, to reveal
the number of life insurance compa-
nies end savings banks that have ac-
quired stock 1t is understood in relia-
BILE circles that this total was small.
Board members refused to comment
on the reports circulated TO-DAY that a
revision by Congress would be necessary
in order to get the system functioning
properly They denied it was intention
at the present time to seek the reported
change.
Originally it was hoped, after opening
tie bank business In the middle Of last
month, to relieve emergency cases in
short order Now 1t is feared that some
thine may elap5e before many loans
can be made as direct aid to home
owners.
In official circles here, it was be-
lieved congressional action may be
necessary to liberalize the law so it may
carry out the original purposes, but con-
fidence was expressed that the system,
even as constituted, will ease the home
mortgage situation and change this type
Of investment from frozen to liquid
asset.
Under the law, as long as the Govern
ment participates in the financing OF
the banks, direct loans may be made to
home owners on sound mortgages where
the prospective borrower is unable to
obtain credit accommodations else
where. This places a weapon in the
hands of the banks that might force
the building and loan associations and
others dealing in home loan mortgages
to liberalize their policies on loans to
home owners. 1t is pointed out that
should the institutions fail to make
loans on adequate security, the home
loan banks could extend the credit di-
rectly at rates lower than those norm
ally charged by the usual lending
agencies.
In regard to the 1000 building and
loan associations becoming members,
H. Morton Bodflsh. a member Of the
board, said this was highly significant,
because it represents just that many
associations whose managements want
to cooperate in a movement that is
designed to be helpful.
They have come in, cash in hand, In
q period when cash is hard to get; 1t
Is one Of the finest things have seen.
and we here recognize it as portending
well for the future of the system" he
added.
The board, Mr.. Bodfish said. has not
called on the Treasury for funds yet be-
cause 1t does not know how much it
will need. The Federal fund will be
requested, however as soon as the ac-
counting systems are installed in the
IL banks and actual approval of bor-
rowing applications has started.
Mr. Bodfish added that some Of the
banks will be ready to make loans ahead
OF the rest, but he felt that it was
inadvisable to name the dates for the
reason that included in the details of
organizations are some that may cause
unexpected delays.