Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-01-08
R. F. c. GRANTS 9D7
BUILDING LOANS
Distribution of Funds Is
Noted in Report-Jersey
Heads List.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, January TN the re-
port of the Reconstruction Finance
Corporation, covering its operations from
the date of its inception in February
to the end of November, 1t was shown
that GOT loans. aggregating about $685.
100000. had been authorized to S26
building and loan associations. or this
amount something over $50 600, 900 had
been disbursed in cash, So, 273, 900 with
drawn or Cancelled and about $4,000 900
repaid.
An analysis of the geographical dis
tribution of these loans indicates that,
of the total of 826 associations assisted
by the Reconstruction Finance Corpora
ton, FOG were in New Jersey, l59 in
Ohio, CT in Wisconsin. So in Illinois, 81
in North Carolina. % in Arkansas, Is
in California, 81 in Louisiana, IS in
Pennsylvania, 20 in New York, 10 in
Texas and IS in West Virginia. As
sociations in other States that were
aided range from 2 to Is.
Summer Demand Greatest.
The New England States of Maine,
Massachusetts, New Hampshire, YER
mont and Rhode Island were apparently
not applicants for aid, but assistance
was given to six associations in Con-
necticut
The period when relief was most
generally demanded by the building and
loan associations was between June
and August. This conceded with the
high point of the year for bank failures.
In July and August aid was given to
140 associations in each month, in Sep
TENDER to los. in october to 81 and In
November to 61 In the same time the
applications of banks for loans de-
creased over so per cent. There is
undoubtedly some relation between the
apparent lifting of pressure on both
classes CT financial institutions. 1t has
been intimated that not few OF the
loans to the building associations by the
Reconstruction Finance Corporation
were used to liquidate loans from banks.
In a majority of instances the diff
culties of the building and loan as
sociations have been most acute in
those parts of the country where there
was an active real estate boom and an
overbuilding of residences and apart
ments in the period after the war.
This era Of intense speculation in real
estate was accompanied by the forma-
ton of many building and loan sssocia-
tionS, whose arrangements had little
training in the real estate field and
were frequently more concerned with
the commissions they could make and
in carrying on a semi-banking business
than with establishing loans on ap-
praisal formulas that had permitted !
others to weather earlier depressions.
Building and loan associations that had
been functioning for many years prior
to the real estate boom of the 20s have
experienced comparatively little diff
Guilty.
Withdrawals Numerous.
The situation with the novitiate class
today is extremely serious They have
been compelled to take back many prop
critics. They are still loaded with real
estate that has deprecated to such an
extent that all Of the original equities
have been exhausted Many of them
have suffered from the withdrawal of
funds and are faced with withdrawal
notices
In Ohio. where difficulties Of the
building and loan associations were dis
closed early IN the depression, it Is
stated that practically every association |
In the State is on notice for Withdrawals |
and that in one moderate sized city |
approximately 100000, 900 is tied up In |
building and loan organizations. In |
New York State, where building and |
loan associations have been in operation |
successfully for more than half a CEN
fury and the practice of making loans |