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Statistics on Operation of the WPA
Source: Federal Works Agency, Work Projects Administration
FEDERAL EXPENDITURES *
June, 1936, through June, 1941
Amount Year ending
$384,018,000 June 30, 1937 1,818,131,000 June 30, 1941
1.326,111,000 June 30, 1938.
333.936.000 June 30, 1939
338,998,000 June 30, 1940.
336.683.000 July-September. 1939
316,494,000 October-December, 1939.
367,882,000 January-March, 1940 383,136,000 Total.
$9,580,602,000 • Data include, in addition to expenditures for agency was administered by WPA) and expendiprojects operated by the WPA, expenditures for tures for miscellaneous purposes, such as the projects operated by other Federal agencies and purchase of surplus clothing for distribution to Brianced by allocations of WPA funds under the needy families, grants to sell help and cooperative ERA Acts of 1938 and 1939, and ERA Act, fiscal associations, tornado relief, and settlement of year 1941. Also included are expenditures for ad- property-damage claims. Not included are WPA ministration (including administrative expenses of funds transferred to the Farm Security Administhe NYA incurred prior to July 1, 1939, when that tration under the ERA Acts of 1935 and 1936.
DISTRIBUTION OF EMPLOYMENT BY MAJOR TYPE OF PROJECT
Selected Periods, March 1937-June 1941
Mar. Mar. Mar. Sept. Mar, Sept. Dec. Type of Project
1937 1938 1939 1939 1940 1940 1940 'Total..
100.0 100.0 100.0 100.0 100.0 100.0 100.0
Public Works Administration PWA-Public Works Administration, a unit of the Federal Works Agency-Commissioner of the Public Works Administration, M. E. Gilmore; Executive Officer, J. J. Madigan. Address, Washington, D. C.
The Public Works Administration, formerly the under all PWA programs was $4,108,291,962. Or Federal Emergency Administration of Public this amount the allotments for Federal projects, Works, was created under authority granted the all of which were 100 per cent grants, were $1.779.
146,115, and those for non-Federal projects were President under Title II of the National Industrial
$2.329,145,847. The non-Federal total was made up Recovery Act, approved June 16, 1933, to bring about
of $820,533,813 in loans and $1,508,612,034 in grants an expansion of Federal and non-Federal public
The total cost of projects for both the Federal construction that would increase employment, stim- and non-Federal programs is estimated to be ulate private industry, and promote economic
$5,999,747,078. recovery PWA was consolidated into the Federal No allotments were made to new projects during Works Agency July 1, 1939, under the President's the last fiscal year. The Public Works Administrafirst plan on government reorganization as author- tion has been in the process of liquidation and ized in the Reorganization Act of 1939
completing its larger power and other projects PWA programs embrace three major classes of throughout the country: As of July 1, 1941, there projects: (1) projects for agencies of the Federal still remained to be completed only 200 of the Government; (2) projects undertaken by State and 17.827 Federal and 43 of the 16,641 non-Federal local governments or other public bodies; and (3) projects built under all of the PWA programs. railroad projects. (Loans, but no grants, were The life of the Public Works Administration was approved for privately-owned railroads.)
extended to June 30, 1942, by the Independent As of July 1, 1941. the total of the allotments Offices Appropriation Act of 1941.
Reconstruction Finance Corporation RFC-Reconstruction Finance Corporation--Charles B. Henderson, chairman; Carroll B. Merriam, Howard J. Klossner, Sam H. Husbands, and Henry A. Mulligan, directors. Address, Washington, D. C. Loan Agencies are maintained in Atlanta, Ga.; Birmingham, Ala.; Boston, Mass.; Charlotte, N. C.; Chicago, Ill. ; Cleveland, Ohio; Dallas, Texas; Denver, Colo.; Detroit, Mich.; Helena, Mont.; Houston, Tex.; Jacksonville, Fla.; Kansas City, Mo.; Little Rock, Ark.; Los Angeles, Calif. ; Louisville, Ky. Minneapolis, Minn.; Nashville, Tenn., New Orleans, La.; New York, N. Y.; Oklahoma City, Okla. Omaha, Nebr.; Philadelphia, Pa.; Portland, Oreg.; Richmond, Va., St. Louis, Mo.; San Antonio, Texas: San Francisco, Calif.; Seattle, Wash,; Spokane, Wash,; and Offices of Special Representatives at Salt Lake City, Utah; and San Juan, Puerto Rico.
The Reconstruction Finance Corporation was been withdrawn and $127.675,236.72 remains availcreated by Act of Congress, approved Jan. 22, 1932,
able to the borrowers. In addition, the Corporaand began operations Feb. 2. 1932. Its powers have tion has authorized or has agreed to the purchase been increased and the scope of its operations ex
of participations aggregating $112,043,301.36 of
1.931 businesses, $59.461.530.46 of which has been tended or otherwise affected by subsequent legisla
withdrawn and $31.559,016.02 remains available, tion. The Corporation may perform all of its
On Self-Liquidating Projects 405 loans have been functions to the close of business Jan. 22, 1947,
authorized aggregating $776,637,133.28: $47.768.unless the President authorizes the suspension of 143.14 of this amount has been withdrawn and its activities prior to that time. The capital stock $172,201,375 remains available to the borrowers: was fixed by Section 2 of the Reconstruction $556,667,615.14 has been disbursed and $44,104,Finance Corporation Act at $500,000,000, all of
140.92 is unpaid. which was subscribed by the Secretary of the The Corporation has purchased from the Public Treasury on Feb. 2, 1932. Pursuant to the pro
Works Admtnistration, Federal Works Agency visions of section 2 of the RFC Act, as amended (formerly Federal Emergency Administration of by Act approved June 25, 1940, the Corporation
Public Works) 4.417 blocks (3,316 issues) of securiretired $175,000,000 of its capital stock at par, ties having par value of $694,236,258.90. Of this
The functions of the Corporation include the amount, securities having par value of $511,339,making of loans: to business enterprises; public
792 25 were sold 3t & premium of $14,184,899.59. agencies; financial institutions; insurance com
Securities having a par value of $150,115,119.68 are panies; railroads, drainage, levee, irrigation, and still held. In addition, the Corporation has agreed similar districts; mining and fishing industries; to purchase, to be held and collected or sold at a public school districts or other public school later date, such part of securities having an aggreauthoritles. It may subscribe to and lend upon gate par value of $3,737,000.00 as the Aministranonassessable stocks of banks, trust companies,
tion is in a position to deliver from time to time. insurance companies, national mortgage associa- The Corporation created and owns the capital tions, mortgage loan companies; purchase capital
stock, in the amount of $17.000.000.00 of the Metals notes or debentures of such institutions; lend for Reserve Company. Rubber Reserve Company. De
fense the carrying and orderly marketing of agricultural
Plant Corporation and Defense Supplies commodities and livestock, and exportation of
Corporation. All of these companies are actively agricultural or other products, and purchase se
engaged in the National Defense program in their curities from Public Works Administration. It is respective fields. In addition to loans to these also authorized to aid the Government of the companies, aggregating $2,583,050,000, the CorpoUnited States in its National Defense program by
ration has authorized 131 loans to 56 private the making of loans and the purchase of capital
manufacturers in the defense program, aggregating stock of corporations created by it.
$ 150,703,608.78. Oi the $2,733,753,608.78 authorized Total authorizations by the RFC through June
as loans for National Defense purposes $6.779.608.79
has been canceled and $332,254,473.87 disbursed. 30, 1941, and tentative commitments outstanding at the end of the month were $17,635,321,089.43.
The Corporation also cooperates with banks in This sum includes a total of $1,410,649.945.66 au
making, loans for production, plant expansion or thorized for other Governmental Agencies and
other National Delense purposes, by taking par
ticipations in any such loans. The lending authority $1,800,000,000 for relief by direction of Congress
of the RFC was increased by $1.500,000,000 (Oct. of the $14.424,671,143.77 remaining after excluding authorizations for other Governmental Agencies
1941) by Congress to aid in expanded defense and for relief, $2.770,093.856.44 was canceled or operations in setting up new corporations. The withdrawn, $2.905,049, 180.51 remains available to Corporation has authorized participations to the
extent of $5,392,359.67 in defense loans aggregating borrowers and to banks in the purchase of pre
$8,255,793.00, practically all made by banks. ferred stock and debentures. Of disbursements for
RFC loans and investments outstanding on June all purposes aggregating $11,857.558.803.45, only
30, 1941 were: $2,573,006.051.88 remains unpaid.
For benefit of agriculture To assist open banks in meeting the demands of
$ 178,406,883.74 depositors and in continuing their operations,
To banks and trust companies (in
cluding those in liquidation) $1,334,805, 161.08 in loans was authorized by the
108,828,958.71 Corporation. $1,138,233.619.27 has been disbursed. For loans on and purchases of $18,000 remains available to the borrowers and the bank stock (including Exportbalance has been canceled. In addition, loans Import Bank and Federal Home aggregating $1,390,360.811.15 were authorized for Loan Banks)
753,939,299.40 distribution to depositors in 2,778 closed banks so Por Self-Liquidating Projects
44,104,140.92 that they would not have to wait for liquidation To business enterprises
151.870, 109.99 of assets of the banks. Of the $2,172,619,670.14 dis- To drainage, levee and irrigation bursed, there remains unpaid only $108,828,958.71.
78,621.665.60 Only $5.904,471.84 is owed by open banks and that To railroads (including receivers includes $5,322,410.75 from one Mortgage and Trust and trustees)...
For loans to and capital of mortAuthorizations have been made for the purchase gage loan companies (including of preferred stock, capital notes and debentures of $25.000,00 capital the RFC Mort6.803 banks and trust companies aggregating gage Company and $11.000.000 $1,466.740.663.24 (including Export-Import Bank, capital Federal National Mort$176,500,000) and 1,123 loans have been authorized gage
of insur: in the amount of $52,811.025.76 to be secured by For loans to and capital of preferred stock, a total authorization for preferred ance companies
23.688,392.36 stock, capital notes and debentures of 6,873 banks To building and loan associations and trust companies of $1,519,551,689: $174,322.- (including receivers)
4,355,507.30 857.44 of this has been withdrawn and $822,500 To mining milling and smelting remains available to the banks when conditions businesses
3,897,629.50 of authorizations have been met; $629.198,298.40 For National Defense (including of such purchases and loans are unpaid.
stock of companies organized Loans have been authorized to refinance 657
for National Defense purposes). 306,243.255.51 drainage, levee and irrigation districts aggregating For PWA Securities (at cost). 122.071,448.38 $147.137.308.39, of which $46,203,549.54 has been For other purposes. ,
1,959.083.21 withdrawn; $4,001,849.44 remains available to the borrowers and $96.931.909.41 has been disbursed.
TotalBy Directors of the CorThe Corporation has authorized 7,776 loans for poration
$2,390,508,477.34 the benefits of industry aggregating $500,029,768.05. Loans to Rural Electrification including loans to the fishing industry. to banks Administration-By Direction of and to mortgage loan companies to assist business Congress
182,497,574.54 and industry. Of this amount $102,278,259.24 has Total Loans and Investments... $2,573,006,051.88 DISASTER LOAN CORPORATION The Disaster Loan Corporation was created by, determined to be necessary or appropriate because Aot approved Feb. 11. 1937. Under the Act, as of floods or other catastrophes occurring during amended, its nonassessable capital stock shall not the period between Jan. 1, 1936. and Jan. 22. 1947. exceed $40,000,000, to be subscribed to and paid for
As of June 30, 1941, it had authorized 23.671 loans. by the Reconstruction Finance Corporation. It is
aggregating $31,472,398.63, of which $3,416.055.52 managed by officers and agents appointed by RFC
was withdrawn or canceled, and $28.020.001.42 dis
bursed. of this latter amount $14,398,650 was and will have succession until dissolved by Con- disbursed to the Federal Surplus commodities Corgress.
poration for the salvage of blown down timber Under the Act, as amended, the Disaster Loan in the New England hurricane district. DisburseCorporation is empowered to make such loans ments have been made to borrowers in 42 States.
THE RFC MORTGAGE COMPANY The RFC Mortgage Company was organized their notes secured by such bonds and certificates. March 14, 1935. under the laws of Maryland. The provided sufficient information is available to the Reconstruction Finance Corporation supervises the
Company to enable it to determine that the income operations of the Company and owns its outstand- of the property securing the bonds or certificates
is sufficient to warrant the loan. Loans will not ing capital stock of $25,000,000.00 Its purpose
be made to the holders of such bonds or certificates is to aid in the reestablishment of a normal mar
who acouired them for speculative purposes. ket for sound mortgages on urban property and (4) The Company also purchases, at par and for other purposes, and it engages in the following accrued interest mortgages insured under Title II major group activities:
and Title VI of the National Housing Act, as (1) When financing is necessary and cannot be amended, provided such mortgages meet the eligiobtained upon reasonable rates and terms, the bility requirements of the Company. Company considers applications for loans, on a (5) The Company also purchases, for an amount sound basis, secured by first mortgages on urban, equal to the unpaid principal thereof, plus accrued income-producing properties, such as apartment interest thereon, loans reported for insurance to houses, hotels, business and office buildings, if the the Federal Housing Administration, pursuant to net income from the property. after the payment the provisions of Title I of the National Housins of taxes. insurance, and operating expenses, is Act. as amended, provided the proceeds of such sufficient to pay interest charges and the required loans were used to finance the erection of resiamortization of the loan. These loans are chiefly dential structures constructed after January 1, for refinancing and aiding in the reorganization 1940, and provided further, such loans otherwise of distressed real property.
meet the Company's eligibility requirements. (2) The Company also gives consideration to ap- For the period March 14, 1935, the date of organplications for loans to finance new construction, ization of the Company, through June 30, 1941. provided there is an economic need for such the Company approved loans and purchases agconstruction, the mortgagor's investment in the gregating $314.493,664.11 including conditional completed project will be substantial in relation agreements, itemized as follows: to the amount of the loan requested and his Refinancing in cases of distress $ 96.047.250.25 resources and experience are sufficient to indicate Construction of new buildings 83.132.667.53 that the property can be operated on a sound For purchase of Federal Housing basis.
Administration insured mortgages 132,077.131.81 (3) The Company also considers application for For purchase of mortgages and proploans to distressed holders of first mortgage real erty not insured by Federal Housestate bonds and certificates upon the security of ing Administration
3.236,624.52 FEDERAL NATIONAL MORTGAGE ASSOCIATION In Feb., 1938, the Reconstruction Finance Cor
Approved mortgagees desiring to offer mortporation, with the approval of the President, gages insured under section 203 of the National organized The National Mortgage Association of Housing Act to the Association for immediate purWashington, the name of which was subsequently chase, or for purchase at a future date, are rechanged to Federal National Mortgage Association, quired to enter into a purchasing and servicing under the provisions of Title III of the National agreement with the Association. In instances in Housing Act, as amended, with a capital of $10.- which commitments to purchase at a future date 000.000 and a surplus of $1,000,000. It is owned and are made, the Association requires the approved operated by the Reconstruction Finance Corpora- mortgagee to deposit a commitment fee equal to 1 tion and deals exclusively with mortgages insured percent of the principal amount of the mortgage, by the Federal Housing Administrator.
which fee will be returned when the mortgage is The Association's principal objectives are:
delivered to the Association for purchase. Coma. To establish a market for first mortgages, mitments are made for a period of 6 months. insured under the provisions of Title II of the
The Association will consider applications from National Housing Act. as amended, covering
approved mortgagees for commitments to purchase properties upon which are located newly con
mortgages insured by the Administrator under the structed houses or housing projects;
provisions of section 207 of the National Housing b. To facilitate the construction and financing Act. Applications for such commitments must be of economically sound rental housing projects.
submitted to the Association and the commitment apartment buildings which may be operated at a of the Association be obtained prior to the beginmoderate scale of rentals, and groups of houses
ning of the construction of the project to be covor multi-family dwellings for rent or sale, by mak
ered by such mortgages. ing loans secured by first mortgages, insured under
The Association will consider applications for section 207. of the National Housing Act, as
loans secured by mortgages insured by the Adminisamended, covering such projects, apurtment build
trator under the provisions of section 207 of the ings, or groups of houses or multi-family dwellings,
National Housing Act where the estimated income and C. To make available to individual and institu
from the mortgaged property is sufficient to pay
the operating expenses, taxes, insurance, interest tional investors notes, bonds or other obligations
on the indebtedness, and reasonable amortization, issued by the Association pusuant to the provi
and provide a reasonable margin in excess of resions of section 302 of Title III of the National
quired reserves. Housing Act, as amended, and the regulations of
Applications for such loans must
be submitted to the Association prior to the the Federal Housing Administrator. The Association will purchase, without recourse,
beginning of construction of the project to be
covered by the mortgage. mortgages insured by the Administrator under the provisions of section 203 of the National Housing
Loans made by the Association secured by mortAct from institutions or organizations, other than
gages insured under section 207 of the National loan correspondents, which have been approved as
Housing Act will bear interest at the rate of 4 mortgagees by the Administrator and have a net percent per annum. An initial service charge worth satisfactory to the Association. at a price of 1.5 percent of the principal amount of the loan equal to the unpaid principal balance of such will be made by the Association if it is required to mortgages plus accrued interest to the date of pur
make disbursements during the period of construcchase, provided such mortgages constitute first tion. liens on property located within a radius of 200 Through June 30. 1941. the Federal National miles from the principal home office or approved Mortgage Association had bought 55.868 FHA Inbranch office of the approved mortgagee, bear sured Mortgages, aggregating $222,363,893.19 and interest at a rate of not less than 1.5 percent had commitments to buy 1.066 additional inortper annum, cover improvements constructed on or gages aggregating $4,441.324.36. In addition it had alter January 1, 1936, which were insured by the authorized 14 Large Scale Housing Loans aggreAdministrator on or after January 1, 1937. and gating $5,650.500.00, of which 2 in the amount of otherwise meet the Association's requirements. $304.000.00 have been cancelled.
METALS RESERVE COMPANY Metals Reserve Company was created by the To the close of business June 30, 1941, the Reconstruction Finance Corporation June 28, 1940, Metals Reserve Company, with the approval of the pursuant to authority of section 5d of the Recon- RFC, had made commitments to acquire aluminum. struction Finance Corporation Act, as amended antimony, asbestos, industrial diamonds, beryl ore, by Public-No. 664--76th Congress, approved June
titanium ore, bauxite, ferro-nickel. zirconium, 25. 1940, with a capital of $5,000,000. The purpose of the Company is to acquire and
cadmium, chrome ore, copper, graphite, iridium, carry a reserve supply of critical and strategic
lead, lead ore, manganese ore, mica, quartz crysmaterials, in connection with the National Defense tals, tin, tin ore, tungsten, zinc, and sinc ore, at program.
a cost approximating $807,000,000.
RUBBER RESERVE COMPANY Rubber Reserve Company was created by the fense and for commercial requirements, the ComReconstruction Finance Corporation June 28, 1940,
pany on June 23, 1941, became the sole buyer of pursuant to authority of section 5d of the Recon
rubber exported to the United States from the Far struction Finance Corporation Act, as amended by
East. Acting in pursuance of this object and in
accordance with consumption programs established the Act approved June 25, 1940, with a capital
by the Omce of Production Management and the of $5.000.000
Office of Price Administration and Civilian Supply, The purpose of the Company is to acquire and the Company subsequently established a central carry a reserve supply of rubber in all of its forms distribution system to meet the current needs of to aid in the National Defense program. To ac- the rubber industry. celerate the accumulation of such reserve supply As of June 30, 1941, Rubber Reserve Company of rubber and to facilitate the distribution of had made commitments approximating $200,000,rubber to the manufacturing industry both for de- 000.
DEFENSE PLANT CORPORATION Defense Plant Corporation was created by the lease, produce or otherwise acquire and to repair, Reconstruction Finance Corporation August 22, rebuild and alter equipment, supplies and ma1940, pursuant to authority of section 5d of the chinery, for the manufacture of arms, ammunition Reconstruction Finance Corporation Act, as and implements of war; (c) to use, lease, liceense, amended, with an authorized capital of $5,000,000, or otherwise arrange for the use by others of such
The purposes of the Corporation are (a) to buy. real estate, plants, facilities, equipment, supplies sell, acquire, store, carry, import, export, produce, and machinery, for the manufacture of arms, amprocess, manufacture, and market stragetic and munition and implements of war and the produccritical materials as defined by the President of tion of equipment, supplies and machinery usable the United States; and to purchase, lease, con- in such manufacture; and (d) if the President of struct or otherwise acquire, and to use, or arrange the United States finds that it is necessary for the for the use by others of, such land, buildings, Corporation to engage in the manufacture of arms. plants, machinery, equipment, and facilities as ammunition and implements of war, to engage in may be necessary or appropriate in connection such manufacture itsell. therewith; (b) to purchase, lease or otherwise ac- As of June 30, 1941, Defense Plant Corporation quire real estate and interests in real estate, to has made commitments aggregating $1.622,498,purchase, lease or otherwise acquire and to build 508.87 for the acquisition of plant sites and the and expand plants and facilities, and to purchase, construction and equipment of buildings.
DEFENSE SUPPLIES CORPORATION Defense Supplies Corporation was created by the produce, lease, purchase, or otherwise acquire railReconstruction Finance Corporation August 29, road equipment and commercial aircraft, and to 1940, pursuant to authority of section 5d of the lease, sell, or otherwise dispose of same; to acReconstruction Finance Corporation Act, as quire facilities for the training of aviators, and amended, with a capital of $5.000.000.
to take such further action as the President and The purpose of the Corporation is to produce, the Federal Loan Administrator deem necessary acquire, carry, sell, or otherwise deal in strategic to expedite the National Defense program. and critical materials and supplies: to purchase As of June 30, 1941. commitments made by the and lease land; to engage in the manufacture of Defense Supplies Corporation aggregated $137,arms, ammunition, and implements of war; to 1 466,544.16.
DEFENSE HOMES CORPORATION Defense Homes Corporation was incorporated bases for the Army and Navy. where such hornes pursuant to the laws of the State of Maryland on are necessary and so far as can be determined, October 23, 1940, with an authorized capital of will constitute a permanent part of the communi$10,000,000 divided into 100.000 shares of the parties. value of $100 each, subscribed for and purchased As of June 30, 1941, Defense Homes Corporation by the Federal Loan Administrator with funds had issued commitments for the purchase of real allocated by the President pursuant to a letter estate and the construction of homes in amounts dated October 18, 1940, from the President to the aggregating approximately $10,160,000.00. Such Secretary of the Treasury. Such stock is not trans- funds, in excess of its capital, as may be needed ferable.
by Defense Homes Corporation for its operations The Corporation will provide homes in areas of will be borrowed upon the security of mortgages extensive defense activities including training upon its projects.
Rural Electrification Administration REA-Rural Electrification Administration. Harry Slattery, Administrator, Washington, D. C. The Rural Electrification Administration was to over 775.000. On July 1, 1939, $227,340.899 had created by executive order of President Roosevelt been allotted to 632 borrowers; by June 30. 1940, May 11, 1935, under the Emergency Reliei Appro- allotments totalled $369,027.621 to 823 borrowers priation Act of 1935 with a one-vear program, for building an estimated 355.000 miles of line to continued for 10 years by the Rural Electrification serve 1,175.000 consumers in 45 States, Alaska Act of 1936. Reorganization Plan II placed REA and the Virgin Islands. $12,289,150 had been loaned under the Department of Agriculture July 1, 1939. for generating equipinent. REA makes loans at low interest to cooperatives.
For the fiscal year ending June 30, 1942, municipalities, other public bodies and private Congress appropriated an additional $100,000,000. utilities to finance the cost of constructing dis- This sum, subject to defense priorities, will build tribution Systems to reach unserved persons in 75,000 miles of line serving approximately 225.000 rural areas. Where power is not available at consumers in addition to financing generating reasonable rates,
REA may finance generating facilities where needed and providing for wiring, plants. It also makes loans with which its bor- plumbing and other loans. During the period of rowers can finance wiring, plumbing and electrical REA's existence the percentage of American farms equipment installations by their consumers. with central station electric service has increased loans are made to individuals. Electric coopera- from 10.9to more than 30%. tives have received 97 of all loans.
In June, 1940, a Defense Committee was formed Since July 1, 1939, the number of miles of REA- to direct defense activities and has made available financed line has more than doubled, increasing to the Army and Navy all REA facilities. from 115,000 to approximately 310,000; likewise REA is sponsoring establishment of rural nutri. the number of consumers increased from 268,000 tion centers under the Food-for-Defense program.
Federal Home Loan Bank Board FHLBB-Federal Home Loan Bank Board-John H. Fahey, Chairman; T. D. Webb, Vice-Chairman: Fred W. Catlett, William H. Husband and Frank W. Hancock, Jr., members. Address: Washington, D.C.
The Federal Home Loan Bank Board, a bi-partisan body, administers the following three ageneles in the field of savings, home finance and housing:
1. The Federal Home Loan Bank System, including in its membership state-chartered home financing institutions and Federally-chartered savings and loan associations.
2. The Federal Savings and Loan Insurance Corporation, which protects against loss funds invested in institutions of the savings, building and loan type.
4. Home Owners' Loan Corporation, an emergency organization established to relieve mortgage distress by making loans to home owners.
FEDERAL HOME LOAN BANK SYSTEM The Federal Home Loan Bank Act was passed ized the U. S. Treasury to provide the Banks with by Congress in July, 1932. The purpose was to set initial capitaland as of June 30, 1943, the up a central credit reserve system for institutions Treasury had paid in its total subscription of that joined as members, parallel in a degree to the $ 124,741,000, while the member institutions owned Federal Reserve System in the field of commercial paid-in stock amounting to $46,542,200, making a banking. The System is based on twelve district total paid-in capital of $171,283,200. The Act Federal Home Loan Banks.
provided that, to qualify for membership, each Institutions eligible for membership in the institution must subscribe to stock in its regional Federal Home Loan Bank System include thrift bank in an amount equal to at least one per cent and home-financing organizations known variously of the aggregate of the unpaid principal of the throughout the country as savings and loan asso- subscriber's home mortgage loans but not less ciations, building and loan associations, CO- than $500. operative banks and homestead associations. Life In April, 1937, to meet the needs of its exinsurance companies and mutual savings banks pansive program, the Bank System went into the are also eligible for membership. All of these security markets for its first public financing. To institutions may become members after they have date, seven issues of consolidated debentures met conditions laid down in the Act. One of the totaling $209.700,000 have been offered, all of requirements is that the institution make long- which were heavily over-subscribed. As of July term home loans. The net interest rate which the 1. 1941, two of these issues were outstanding in a home owner may be charged must not exceed the total amount of $75,500,000. legal rate of interest in the state where the In 1933. Congress authorized the Federal Home property is located.
Loan Bank Board to charter and supervise Federal Each Federal Home Loan Bank is authorized to savings and loan associations, which might be make long-term advances to its members upon organized by local groups throughout the country. the security of home mortgages or obligations of It also authorized the Board to convert to Federal the United States, or obligations fully guaranteed charter such eligible state-chartered savings, by the United States, subject to such regulations building and loan associations as might desire it. and limitations as the board may prescribe. Short- Federal savings and loan associations are local, termn unsecured advances may also be made. The privately owned and managed, thriit and homeBanks are also authorized to make advances to financing institutions. The are required to be non-member institutions approved under Title II member institutions of the Federal Home Loan of the National Housing Act on the security of Bank System. mortgages insured under that Act.
In 1933, there were 1.554 of the 3,073 counties The twelve Federal Home Loan Banks began in the United States without local thrift and operations in October, 1932. At the end of that home-financing facilities. In other communities, year the membership numbered 119 institutions as a consequence of the depression, many existing having total assets of $217,000,000. Steady ex- institutions of the savings and loan type were pansion followed as the System demonstrated its unable adequately to meet the needs of either usefulness and potentialities, and as of June 30, investors or borrowers. Federally chartered sav1941, the member institutions numbered 3,839 with ings and loan associations offered a means of total assets estimated at $5,300.000.000. The total remedying the lack quickly. They have so inborrowing capacity of the members reached more creased in number that now they are in a position than $2,000,000,000 on that date.
to serve in whole or in part almost all of the The Federal Home Loan Banks as of June 30, Nation's counties. On June 30, 1940, there were 1941, had advanced a total of $773,908,000 to mem- 1,455 Federal associations in operation, of which ber institutions in the form of short and long- 816 had been converted from state-chartered asso. term credit, and had received repayments totaling ciations, and 639 had been newly organized. They $604,011.000, leaving a balance outstanding of are located in all states of the Union and in the $167,897,000. No losses have been suffered and District of Columbia, Hawaii and Alaska, delinquencies are inconsequential. The Act author- This growth is shown in the following table:
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION The Federal Savings and Loan Insurance Cor- which 1,455 were Federal Savings and Loan Assoporation is a permanent instrumentality of the ciations and 800 were state-chartered institutions.
These associations are situated throughout the Government created by Congress in 1934. It in
United States and its territories. Practically all sures the safety of investments up to $5,000 per
of them are members of the Federal Home Loan investor in each Federal Savings and Loan Asso
Bank System. ciation and in each state-chartered institution of
Congress provided $100,000,000 paid-in capital the savings and loan type which applies and is of the Corporation. Each insured association pays approved for this protection.
an annual premium based upon its total share Standards of eligibility include sound financial and creditor liability. These premiums are used condition, competent management, sale lending to build substantial reserves for the protection of policies, ability to meet withdrawal demunds, and insured investors, expenses of the Corporation satisfactory earning power.
being currently paid from interest on the reserve As of June 30, 1941, 2,315 associations having fund. On June 30, 1941, the Corporation had actotal assets of $3,160,000,000 were insured, of 'cumulated reserves amounting to nearly $30,000.000.
HOME OWNERS' LOAN CORPORATION HOLC was created by Congress in 1933. to make To qualify for the refinancing of his mortgage loans directly to distressed home owners over a debt, a home owner had to be in involuntary dethree-year period. It refinanced home owners by fault and unable to carry or refund the mortgage taking over their delinquent mortgages. Since debt. Only properties for not more than four 1936, when its lending operations ceased, the families, used as a home or held as a home Corporation has been engaged in the collection of stead, were eligible. The loan could not exceed the funds it loaned and the sale and rental of the 80'; of the appraised value of the land and buildproperties it has been forced to acquire.
or $14,000 whichever amount WES the