Evening star., 1932-08-16
FORT SEES RELIEF
FOR HOME OWNERS
New Mortgage Loan Bank to
Ease Stringency and Pro-
mote Building.

American home owners who are
now unable to negotiate real estate
loans through commercial banks be-
cause economic conditions demand that
such banks maintain liquid financial
status will find relief and aid in the
operations of the new Federal Home
Loan Bank, Franklin w. Fort, chair
man of the Home Loan Board, said
in a National Radio Forum speech,
broadcast by the National Broadcast
ing Co. network last night.
Outlining the Home Loan Bank
structure as guest speaker Of the weekly
forum arranged by The Washington
Star, Mr.. Fort pointed out that its
principal function will be to relieve
stringency in the home mortgage mar
ket. Commercial banks, insurance
companies and other large financial
organizations in times of economic
stress prefer short-tirne notes and loans
easier to liquidate than the home mort
gage type, Mr.. Fort said. The Home
Bank, he indicated, will seek to serve
the home owners who need money for
taxes, repairs, application to existing
debts and other emergencies, and are
unable to obtain funds at usual sources.
Basis of Aid Stated.
Operating on the conservative basis
of $500 real estate security to each
500 worth of debentures issued, the
Home Loan Bank will be able to assist
Americans in saving and improving
their real estate investments, Mr.. Fort
said, and at the same time will give
stimulus to home building and home
ownership.
The complete text of Mr. Forts ad-
dress follows:
THE Federal Home Loan Bank Is
the youngest baby of the Government
of the United States. The law bringing
it into being was signed by President
Hoover on July % The board was
named on August and sworn in last
Tuesday. The other members are Ma
than Adams, president of the First Ma
tional Bank of Dallas, Tex; DR.. John
M. Cries of Rosewood, Ohio, who, as a
member of the Department Of Com
merce, has worked for IL years toward
the setting up of the sysetm; William
E. Best of Pittsburgh and H. Morton
Bodfish of Chicago, who are, respectively,
president and executive manager of the
United States Building and Loan
League. We have not yet been able to
get settled in Offices and our steno-
graphic force has just been engaged.
Meanwhile we have received some thou
sands of letters and kilograms, which it
has been absolutely impossible to an
swer. Consequently, I am very grateful
to The Washington Evening Star for
this opportunity to explain to the Ma
ton at large the purposes and structure
of the law and the hope and aspira-
tons with which we are tackling its
administration.
Idea Conceived in 1921.
"The idea of establishing national
system to assist in the financing Of the
construction and purchase Of small
homes first took form when President
Hoover was appointed Secretary of Com
merce in 1921. One of his first acts
was to invite DR.. Cries, then associated
with the Harvard School Of Business
Administration and now a member of
this board, to join the Department Of
Commerce to make the necessary stud
les. In 1880, as President, Mr.. Hoover
organized Conference on Home Build
ing and Home Ownership, and the pres
ent law is the result.
Perhaps it will make its true pur-
port and its operations clearer If spend
a minute or two explaining certain
phases of our American system of bank
ing and money lending. Roughly, our
State and national banks and trust
companies which accept deposits SUBJ
ject to being withdrawn on demand-on
which deposits they pay little or no in
terest-invest most Of their funds in
notes due at early dates or on demand.
This they must do in order to have
source from which to get money quickly
If their depositors call for 1t. Through
their loans to business men they finance
the needs Of merchants and manufac-
turers who wish to buy goods or pay
labor.
Explains Reserve System.
'In order to make it easier for a bank
to supply the funds it might need to
loan for these purposes or to meet the
demands Of depositors, the Federal Re
serve system was set up about Is years
ago. This system consists Of IL banks
located in IL major cities. Their func-
tion Is to buy or rediscount, as it Is
called, certain types Of the notes held
by member banks so as to give these
banks more cash to loan to business
men or pay to depositors. The stock
in the Federal Reserve Banks Is all
owned by State end national banks, but
the control Of their operations and pol
icy is in the hands of Federal Re-