Evening star., 1933-09-23
STEVENSONLAUDS
HOME-L0AN BANKS
Board Chairman Says Sys'
tenn Is Doing Excellent
Work of Relief.

The Home Owners Loan Corporation
was termed temporary institution to
supplement the permanent activities of
the Federal Home Loan Bank System
by William F. Stevenson. chairman OF
the Federal Home Loan Bank Board,
addressing the annual convention of
the United States Building and Loan
League in Chicago recently.
Building and loan associations hold
S65C0 100000 of home mortgages in
the United States Savings banks,
which are eligible for membership in
the Federal Home Lean Bank System,
lust as the building and loan associa-
tions are, held S3500,00 900. so that
the classes for whom the system was
devised hold half of all the mortgages
on homes in the country" said Mr..
Stevenson. "Other institutions which
have been engaged IN the same business
are rapidly retiring from that field and
it takes no prophet to see that within
few years the loans will BE- long time
and so amortiZed that the frugal owner
of the home can pay off his loan by
reasonable monthly payments and loans
will be confined to institutions which
will either be actual or potential men,
hers of the Home Loan Bank System.
S60OOO.O0O in Use Now.
The system has since grown so
quietly that little attention has been
paid to it. but its loans actually paid
out to its members are now over
SSG 100000 in contrast to about S10.-
CG0,COo when this program was started.
Its stock owned by members has risen
to Sl5,00o,000 and is growing rapidly.
Its banks are nearly all past the stage
of pay ing off the expense of organiZa-
ton and are making profits every
week"
Speaking of the fact that the Fed
eral Home Loan Bank System Is about
to celebrate its first anniversary on
October Is. Mr. Stevenson said that
some Of the regional banks in the sys-
tenn are prepared to pay dividend,
both to the Government and to their
stockholders
While people short on information
but long on idle assertions continue to
say it was failure and has now dis
appeared, there is no sounder system
1f finance than this Federal Home
aoan Bank System in the entire coun-
try. Its ability on a sound cooperative
basis which has been a growth of more
than a century and had its roots in
tic OCSliC W O"i ilOlllC
which. next to love of life itself. domi-
mates the aspirations of our citizens.
Sees System Improving.
The building associations grew up,
Watered and fed by that sentiment, and
when they organized and made the fight
for great reserve system based on
business principles and guided by long
experience, they Wrested from hesi-
tating Congress their system. not per-
feet. but workable. and capable Of i'm
provement from year to year.
Unlike the national banks, who had
to go into their system, although most
unwillinglv, the associations left it to
the choice of the potential members to
go in or stay out and one years eX-
perience was demonstrative that they
have recognized the merit of the plan
and have come in to the extent of 1852
members, taking stock already to the
amount named above"
Speaking of the Federal savings and
lean associations. which are provided
for under the terms of the home owners
loan act Of 1888 Mr.. Stevenson said
that these are organized and fostered
wherever they do not conflict with es-
tablished institutions.
They are not to be established Tor
the benefit of promoters who desire to
use them to exploit their own schemes.
but to encourage the plodding. frugal
and industrious man to save and find
him the capital to become a home
owner. and that is the spirit Of the law
and the policy OF the present board
In 10 years these associations will
be a powerful force in the great or
ganization as they must be members OF
the home loan banks and I predict
that the members of the home loan
system will in that time hold Is billion
Of the 20 billion mortgages on homes
in this country. Member associations,
if they desire, can convert into Fed
eral associations but the board makes
no bid to induce them to do so. The
States that created them must consent,
and no doubt will do so. or in many
cases by charter rights conferred may
have done so already"