Evening star., 1932-10-16
FORT GRAT|F|ED
AS S12BANKS OPEN
Home Loan Institutions in
Full Swing, Reports From
Managers Say.

Chairman Franklin w. Fort of the
Federal Home Loan Board last night
expressed satisfaction over the inaugu-
ration of the chain Of IL regional banks
Of the system. which opened their doors
in various sections of the country yes
terday morning. and at the same time
he sounded a warning that loans on
home mortgages on excessive real es-
tate valuation could not be expected.
Officers of the IL banks reported to
headquarters here that the institutions
were in full swing and ready to receive
applications for loans on small home
mortgages. Each institution reported it
began official life without ceremony.
IT want to express my very deep ap-
probation of the devotion and drive
that has been shown by the directors in
all of the bank districts in accomplish
ing the almost impossible task Of organ
izing and opening on such short no.
tice," Chairman Fort said.
Money Is Ready.
There no longer exists" he added,
"any reason why the ordinary mort
gage lending institution in any section
of the country should not promptly
proceed to make sound home loan
mortgages, as the home loan banks are
ready to furnish them with money
with which to do SO.
"Of course, this does not mean loans
can be made on excessive valuation OF
real estate or excessive percentage OF
the value, nor in cases where the own
ers cannot possibly carry the property.
But it should now be possible to get
any loan which would be procurable
in times of normal business"
The system is designed primarily to
permit commercial companies holding
mortgages to rediscount them, making
more money available to increase mort
cages. The mortgages to be taken are
limited to those on homes valued at
not more than $4,000.
Capital is S134, 1000, 600.
Since September IA, the banks have
had subscription books open to afford
member institutions opportunity to
contribute capital. The total capitali-
zation for the system is s134 100000
and what was not taken locally is to
be subscribed by the Treasury up to
$125 100000.
The board reported last night that
reports of the stock subscriptions are
coming into headquarters here, but II
is expected that it will be several days
before final figures will be available
The board was advised by officials OF
Salem, N c., which will take care OF
the Washington area, that Hugh Cor
don, jr., of Miami, Fla, has accepted
the position of executive vice president
of the institution Mr.. Gordon will be
the ranking salaried official
Confirmation that Washington finan-
cial institutions have oversubscribeC
their stock quota in the fourth district
institution, which is capitalized at s10.-
900 900. was made yesterday by Presi.
dent Harry King of the Washington
Chamber of Commerce. which body has
been acting as the local clearing house
for the system.
Baltz in Charge.
The subscription campaign here ha'
been under supervision of Edward c
Baltz, vice chairman of banks board
and the stock quota was 100000. Tota
subscriptions received was S493,000 OF
about 25 per cent in excess Of the
quota, according to Mr. King.
The list of institutions subscribing
included the American Building Asso
citation. District Building g. Loan AS
sociation, Eastern Building & Loan AS
sociation, Fidelity Building g. Loar
Association, National Permanent Build
ing Association, Northeast Building AS.
sociation. Oriental Building Association
Perpetual Building Association and thu
Washington Permanent Building Asso
citation.
In making this list available, Mr.
King issued the following statement:
The chamber wishes to correct the
impression that stock subscriptions from
eligible institutions will not be received
after the end of the initial month!
subscription period which ended yes
terday The subscription books are still
open and will continue so until further
notice. Mr.. Baltz has stressed this point
stating that all eligible local institu
tions have signified their intention O.
becoming members of the Federal HON,
Loan Bank System.
Under the provisions of the Fedora
home loan act the subscriptions paic
in by Washington institutions entitl,
them to borrow from the central banl
up to II times the amount of their cash
subscriptions. Thus a total subscrip
tion of $50,000 would enable local mort
gage bankers to borrow s6,000,000 i
the whole cost of such stock had beer
paid. In most instances, however, tn,
stock will be paid for in four quarterl,
installments and the IL times rule
in every instance. will apply only II
the actual amount of cash paid in fol
stock"