Evening star., 1935-03-23
NEW LOAN SET-UP
FOR i. s. URGED
Building Leader Outlines
Plan for Recovery With
Federal Aid.

the building and loan neld, tuneo W
the needs of the immense nome
building question as phase OF eco
non1ic recovery, and co-ordlnatlng IN
the fullest measure the facilities of
both private enterprise and those
which the Federal Government has
made available to this end, was urged
this week by I. Friedlander of Hous-
ton, Texas, president of the United
States Building and Loan League, in
appearing before the Senate Banking
and Currency Committee.
Friedlander appeared to urge the
enactment of the bill which is an
administration measure to amend the
Federal home loan bank act, the ma
tional housing act and the Federal
home owners loan act. similar
measure has already passed the House
and hearings are being conducted by
the Senate Banking and Currency
Committee on its provisions before It's
consideration by the Senate.
Private building and loan interests
of the country are in complete accord
with this bill, said Friedlander, but
at the same time, ask that some OF Its
provisions be made more liberal, and
offer suggestions to fit its terms to the
practical needs of home builders ana
home owners at this time.
Basis of Equality.
Specifically, Friedlander urged a
basis of equality for Federal groups
and units and for State building ana
loan associations operating under
state statutes and charters or under
the supervision of the controller OF
the currency, and declared that Fed
eral funds devoted to the building
and loan field should be available
without discrimination to these agen-
cies whose interests are IDENTICAL.
Numerically, there are 6o8 red
eral associations and 10,727 State
chartered associations" said Fried
lander. THE assets of the Federal
associations are 2l2 per cent of those
of State institutions. The purpose Oh
this legislation, and the purpose OF IN
vesting in Federal associations. Is 10
increase the flow of money for home
building purposes around the country
1T is only too clear that If this OBJ
jective in the fullest measure Is to
be attained. State-chartered lnstltu-
tions must be on an equal basis under
this legislation with Federal aSSocia-
tfons. Otherwise, the hope OF result
Is crippled at the very outset.
If the principle and objective Is 10
get mortgage money flowing, it would
seem that the 10000 State-chartered
institutions, now doing over " per
cent of the savings, building and loan
association business, are appropriate
vehicles to achieve this important end,
especially if the H. o. L. c. activities
are to be tapered off at this point. The
precedent established in the r. F. C.
stock purchases in banks further sug-
gests that these privileges be made
available to State-chartered as well
as to Federally-chartered institutions.
Federal Reserve Change.
Friedlander pointed to the pro-
oosal to amend the Federal Reserve act
to allow Federal Reserve banks to dis
count and accept notes of any Federal
Home Loan bank with maturity with
in less than a year as one of the i'm
portant features in the program Tor
encouraging home building and home
ownership. He declared that this
paper represents one of the soundeSt
forms of security in the financial field.
He likewise declared himself in
favor of the creation Of Federal
Savings and Loan Advisory Council,
incident to the Federal home loan
banks, and consisting Of as many
members as there are Federal home
loan bank districts. This set-up, he
continued is exactly parallel to the
advisory committee that represents
the point of view Of the member banks
of the Federal Reserve System, and
would serve to give impetus to the
activities of these banks and TO
broaden their scope of practical
service.
The savings building and loan as
sociationS feel that such council can
be of greatest service If provided by
statute and if selected by the men,
bership of the Federal Home Loan
Bank System" said Friedlander. The
council involves no cost to the Fed
eral Government. The section fol-
lows the language of the Federal Re
serve statute, as regards meetings,
except that it provides for minimum
of two meetings, where the bank
statute sets minimum of four. Other
provisions are strictly similar.
I'VE are dealing more with realities
than we are with theories" Fried
lander continued, for these banks
are already in operation on fixed
and accepted theory. The broad ques-
ton is: How may they render the
utmost measure of practical service
to the country, and how may home
building potentialities in the circula-
ton of money, in increased employ
ment, and in additional sense of Sc
curity and stability in local commu-
mites be realized in the most sub
stantial degree?
Must Use State Agencies.
'Manifestly it is in utilizing the
private agencies, Federal and State,
in conjunction with the Federal facili-
ties, and allowing them room for the
largest measure of activity This is
to be accomplished not only by using
State institutions, thousands of which
have an enviable record in assisting
people of small means in thrift, as
an integral part of this effort, but in
establishing the closest contacts as
well between the Federal agencies and
the agencies of private effort and en-
terprise in this field.
The Federal Government cannot
assume the task of home financing in
this country, any more than it can
assume the task of retail merchandis-
ing, and that Is not contemplated
believe that the Federal Government
can attain the largest measure of re-
suit, and promote general economic
recovery, through its close co-opera-
ton with the private enterprise Of
the people.