Evening star., 1932-08-22
HOME LOAN BANKS
LAUNCHING TO GET
FULL COOPERATION
Directors Report Assurances
in All Sections After In
dividuaI Trips.
SITES TO BE CHOSEN
PROBABLY THIS WEEK
Week Spent in Survey of Possibili-
ties of Disposing of Stock
for Capital.

Directors Of the Federal Home Loan
Bank Board returned to Washington to-
day after individual Investigations in
various sections and reported they had
received assurances of full cooperation
from all quarters in launching the new
bank system.
At the same time. Franklin W. Fort,
chairman, said the board probably
would designate locations of the 8 to
IL districts for the new systems bank
ing institutions, during this week.
Mr.. Fort explained that the cities in
which Federal Home Loan Banks will
be established will be pamed at the
same time the board makes public 10
cations of the districts. He said none
OF the districts, as yet, had been fully
determined upon.
The chairman, William e. Best OF
Pittsburgh, and H. Morton Bodfish of
Chicago, said they had spent the latter
part Of last week surveying possibilities
OF disposing of stock to provide capital
for the various banks.
Delighted With Reaction.
Each member reported today he was
delighted with the general reaction"
in the section which he visited. Mr..
Fort, returning from Boston, said he
found the reaction on New England
extremely favorable in some respects"
He reported that Gov. John G. Win
ant of New Hampshire called on him
at Boston and promised his hearty sup
port. Representatives of savings banks,
loan associations and insurance com
panieS throughout New England and
New York assured him of help to the
limit" he said.
Mr. Pact co,rJaJ o1,k Rt1
in Pennsylvania and Ohio, while Mr..
Bodfish discussed the matter in South
ern States.
Mr.. Fort said the board had found
snags in the way of the systems func-
tioning at full force in many States.
In New York and Massachusetts, laws
prevent the building and loan asSocia1
tions, known as cooperative banks; in
surance companies and savings banks
from investing in stocks of the home
loan banks.
Laws to Be Changed.
In New Jersey, he explained, the in
surance companies are prevented from
subscribing, while other States have
similar laws which must be changed
before the banking system can get into
full swing.
The chairman said in Massachusetts,
and some other States special sessions
Of the Legislature probably would amend
the laws to make the participation pos
sible, while in other States amendments
would be sought in the Winter sessions
OF the Legislatures.
In the meantime, he continued, the
Treasury in some instances would have
to subscribe the full minimum capital
stock for the regional banks, which
could be returned after the laws were
amended to permit the local interests
to subscribe for stock.
Among the callers at the boards Of
flee in the Commerce Department Build
ing today was Senator Goldsborough,
Democrat. Maryland. who urged Chair
man Fort to establish a regional bank
at Baltimore. The chairman said he did
not give Senator Goldsborough any en-
couragement.
Method in Picking Sites.
Without holding hearings on the
numerous applications of cities for the
establishment of the banks, the board
plans to settle the location question
largely on the amount of capital stock
subscribed in the different areas.
Under the law, the board is required
to open its subscription books for the
sale of capital stock for 80 days after
the banks are designated Each bank
must have minimum capital of $5,-
100000. Only in the event members
Of the banks fail to subscribe the full
amount is the board to draw upon the
SIPS, 100000 appropriated for the pur-
pose under the Reconstruction Cor
poration.
Chairman Fort desires that home
building associations, savings banks, in
surance companies and similar institu-
tions guarantee that the initial stock
shall be subscribed before the banks are
designated.
The districts cannot be the same as
Federal Reserve banks districts because
the law prohibits splitting of States.
Not less than eight or more than II
banks may be designated.