Evening star. [volume] (Washington, D.C.) 1854-1972, 1934-05-14
President Asks Speedy Ac-
ton to Facilitate Building
and Repairs.
EMPLOYMENT AND LOW
INTEREST 2 OF GOALS
Government Would Insure in
Part Funds Advanced by
Private Agencies.
BY the Associated Press.

By the Associated Press
Legislation requested by President
Roosevelt which Democratic leaders
said would provide possibly several
billion dollars" for home construction
and improvements was introduced to-
day in Congress.
1t was offered by Chairman Fletcher
of the Senate Banking Committee a
short while after the President, in a
special message, had proposed Gov
eminent insurance of private financ-
ing for home construction and repair.
The legislation was recommended
as a move to alleviate distress" help
employment and raise living stand
ards.
Senator Robinson the Democratic
leader, said it was of such magnitude
that it probably would take two or
three weeks for final disposition.
Treasury Subscribes Stock.
A home credit insurance corpo-
ration would be created with capt.
tai stock of s200,000,000 to be sub
scribed by the Treasury.
lie COI pOI dJ1Oll, IlOO1lloOIl
planned. would have power to insure
all types of approved financial insti-
tutions against losses resulting from
credit extended to home owners in
the modernization of their homes.
It also would have authority to in
sure amortized mortgages on owner
occupied homes, the insurance to be
on the mutual principle and on the
basis of 80 per cent of the appraised
value as to new construction and so
per cent in the case of existing homes.
The corporation would issue obli-
cations guaranteed by the Govern
ment and would act as fiscal agent
when so designated by the Secretary
of the Treasury.
Another provision contemplates
Federal incorporation of private mort
gage associations to lend upon, and
deal in real estate and to borrow
money for such purposes.
Minimum Paid In.
The minimum paid-in capital stock
of the associations would be s5,000,-
of the associations would be under
the Federal Home Loan Bank Board.
Borrowings of the associations would
be restricted to the current value of
the insured mortgages held. plus cash
and bonds of the United States. They
also would be restricted to a fixed
ratio of outstanding capital stock.
A Federal savings and loan in
surance corporation under the man
agement of the Federal Home Loan
Bank Board and with a capital stock
of $500 100000 paid for in Home
Owners Loan Corporation bonds would
be created The stock would pay the
same dividends as the interest rate
on the bonds.
Insurance Accepted.
One section provides for the &C
ceptance for insurance of institutions
which are solvent and in sound finan-
cial condition. The premium rate
for insurance would be equal to y of
per cent of all accounts of an in
stitution to which insurance applies,
the premium rate to continue until
a per cent reserve fund is built up.
An additional assessment of "A of
! per cent is authorized to cover
losses.
In event of default of an insured
institution, the corporation is obli-
gateo to pay each insured share
holder the amount of his insured
cent III cash. so per cent in one year
and the remainder in three years
from the time of default.
Liquidating Agent.
The corporation would serve as
liquidating cgent for the insured in
situations. It's obligations would be
exempt from taxation. but the real
property may be taxed as privately
owned real property.
Another section liberalizes the dis
count facilities of the Federal Home
Loan Banks and empowers them to
advance funds to member institutions
to enable them to relend such funds
to home owners in the modernization
program.
1t also provides for participation of
farm credit associations in the home
the Federal reserve act so as to clas-
sify six-month residential construction
loans as commercial loans.
Thus, these loans would become
eligible for rediscount if accompanied
by binding agreement of an accept
able financial institution to take up
the loan in the form of mortgage
upon the completion of the residential
building.
Robinson said the bill was ''un-
avoidably voluminous" and would be
considered by the Banking Committee
some time this week.
The President declared that many
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