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Mr. CLARK. Over $80,000,000 of mortgages, yes.
Senator Watson. From banks?
Mr. CLARK. Yes.
Senator WATSON. And trust companies?

Mr. CLARK. And trust companies, building and loan associations, and other institutions. I am working right now on one. We kept two banks from closing.

Senator COUZENS. You spoke a while ago of second and third mortgages.

Mr. CLARK. Yes.

Senator COUZENS. In what way would this bill help the home owner in dealing with second and third mortgages?

Mr. CLARK. Not at all. That is our crying need in the country to-day.

Senator COUZENS. In other words, there seems to be a public misconception of the extent to which this bill will help the man who desires to build a home.

Mr. CLARK. Absolutely.

Senator Couzens. From the telegrams and letters I have received, there seems to be a general conception that this bill is for the purpose of aiding the man in getting a home.

Mr. CLARK. Yes. That is a smoke screen.
Senator COUZENS. A smoke screen?
Mr. CLARK. Yes.

Senator COUZENS. I would not go that far, but I do realize that there is a misconception by the public, because of the tenor of the communications I am getting.

Mr. CLARK. Yes.

Senator Watson. In my country the general conception is that it helps the fellow who has a mortgage on his home to carry it.

Senator COUZENS. That was not the President's proposal, Senator.
Senator WATSON. I think that was the secondary view.
Senator COUZENS. The secondary view?
Senator WATSON. Yes; the secondary proposition.

Mr. CLARK. May I suggest this, without taking too much of your time

Senator Watson. This is all very interesting. Mr. CLARK. The savings banks in Connecticut showed an increase of $30,000,000 in their deposits during the year 1931.

Senator WATSON. State that over again will you please?

Mr. CLARK. The savings banks of Connecticut, according to the report of the banking commissioner, show an increase of $30,000,000 in deposits during 1931. The postal savings department of the Government has shown a tremendous increase.

Senator WATSON. We are familiar with that.

Mr. CLARK. So there is no lack of money. The Bowery Savings Bank of New York on the first banking day of this year had 1,000 new depositors. There is no lack of money. This proposition is entirely emotional and not factual.

Senator WATSON. Based on lack of confidence?
Mr. CLARK. Based on lack of confidence; yes.

Senator Watson. Certainly: Else these banks would not be going to pieces all over the country by the hundreds.

lost money.

Mr. CLARK. Many banks that have gone out never should have been started.

Senator Watson. That is quite, true, but they have gone out.
Mr. CLARK. They have gone out, yes; and the stockholders have
Senator WATSON. And they are still going out.
Mr. CLARK. And they are still going out.
Senator WATSON. There is no doubt of that.

Mr. CLARK. The situation is entirely within the control of the people within each State. It is not a Federal matter. As the Senator has commented, it is the second mortgage that needs attention.

Senator WATSON. What do you mean by “needs attention”?

Mr. CLARK. We need an organization locally in each community to create a fund to help the home owner, the purchaser or builder, to get capital enough to finance him between the first mortgage and the equity. Senator WATSON. But that can not be done by a bill of this kind?

Mr. CLARK. No. There is where the danger lies. There is not a good second mortgage company to-day anywhere within my knowledge, and I have fairly good knowledge of what is going on in the business.

Senator Watson. You say there isn't a good second mortgage? Mr. CLARK. Yes, I say I don't know of one within my knowledge. The building and loan associations in some parts of the country have gone into the second mortgage business, much to their sorrow, as I understand.

I made this proposition to the United States Chamber of Commerce session in April, 1930. I spoke on this same subject at that session. I found at that time that the administration and the chamber were of the opinion that we needed more money for first mortgages. My proposition, which is on record, met that situation fairly. I suggested then that if there was any trouble at all it was in the second mortgage field, and the cure for that was in the hands of each community; that is, the chamber of commerce or an organization similar should have a committee of the bankers, builders, material men, furniture dealers, everybody who had anything to do with contributing to the make-up of the home, that they should create a local organization and loan money on second mortgages. They would control the type of building, and the character of the neighborhood, They would be able to loan money at a much lower bonus charge than at present.

Senator WATSON. That would have reference to second mortgages on new construction.

Mr. CLARK. It would be second mortgages on everything.
Senator Watson. Second mortgages already existing, also?

Mr. CLARK. Yes, on everything. Our chamber has that proposition right now, and I am chairman of the committee, and we are going to try to put that into effect in our community, which takes in quite a substantial territory

Senator Watson. You think that this home loan bank proposition, if established, would not be profitable?

Mr. CLARK, No; it could not be profitable.
Senator WATSON. It could not be profitable?
Mr. CLARK. No; it could not be.

Is it right and proper for me to make an observation on testimony that has been submitted here?

Senator Watson. Why, certainly, that is, of you don't say anything personal about the other fellow who has gone.

Mr. CLARK. I like to meet my man face to face.
Senator Watson. That is the only way to do.

Mr. CLARK. I read in the United States Daily that Mr. Bodfish of the building and loan associations—I don't know Mr. Bodfishstated that installments are being paid regularly. He referred to the building and loan associations. If that is true, where is the trouble with the building and loan associations? In other words, if their business is balanced, where is the trouble?

Senator COUZENS. As I understand, one of his troubles is that they are doing a demand deposit business and when a man comes to get his deposit out of the building and loan association he is held up by the rules and regulations. Therefore, this building and loan association is not in a position to do a current business.

Mr. CLARK. A building and loan association should not do a current banking business. If it is a building and loan association it should not mix up these two kinds of businesses.

Senator Watson. I think they have paid-up stock. I don't know whether they do it in all States or not. But they can not withdraw it. That is the trouble.

Mr. CLÁRK. The building and loan commissioner of the State of Missouri has a good article of a recent date, in which he specifies the causes and there are more than one-of the present situation with the building and loan associations. Competition is one. High rate of interest is another. Low dues and a tendency to withdraw deposits. So I repeat again: It is a state of mind. It is a matter of management, and it also is a matter of a local situation that should be bandled by each community and not by the Federal Government. The passage of a bill of this kind will put us in a very much worse situation in

Senator Couzens. How would the passage of this bill specifically affect your business?

Mr. CLARK. Not at all, that I can see.
Senator COUZENS. So you have no selfish interest in it?

Mr. CLARK. I have no selfish interest in it at all. I do not sell my loans to the individual public. I sell my loans just to insurance companies, and I have all the money to use that I need. As I stated before, there is available all the money necessary for legitimate projects.

Senator COUZENS. Don't you believe the fact that the building and loan associations pay 5 per cent on money deposited helps to create this situation?

Mr. CLARK. Yes. They are paying too much. That situation is developing in the savings banks throughout the country that are trying to pay 5 per cent also. That is just an observation on the side. Senator WATSON. All right, Mr. Clark. (Mr. Clark left the table.) Senator Watson. Anybody else who wants to be heard?

Senator COUZENS. I see Miss Obenauer from Michigan here in the room. Do you wish to say something about this, Miss Obenauer?

three years.

STATEMENT OF MARIE L. OBENAUER, WASHINGTON, D. C. Senator COUZENS. Give the reporter your name, will you, please? Miss OBENAUER. Marie L. Obenauer. Senator COUZENS. And you occupation.

Miss OBENAUER. I am director of the Industrial Survey and Research Service.

Senator CouZENS. Located in Washington?

Miss OBENAUER. With offices located in Washington, 1022 Barr Building. My residence, however, is in Michigan.

Mr. Chairman, I did not come with any documents or figures at all, not having expected to talk. I would like, however, if I might, to refer to page 4—and I will give you the reasons for it—of this bill. The institutions eligible to membership in group 1 might read: "Building and loan associations, cooperative banks and homestead and home owner associations."

Senator COUZENS. Will you please explain just what the last category includes?

Senator WATSON. Miss Obenauer wants home owners included there.

Miss OBENAUER. Just home owners included. Senator, when I wrote to you I suggested a league of home owners. But I do not think anyting so cumbersome should be put in. It is just homestead and home owner associations that might be put in here instead of merely homestead associations.

Senator COUZENS. Just what is a homestead and home owner association?

Miss OBENAUER. I am not qualified to speak on the homestead association, but I would like to say that as a result of the conference on home building and home ownership, a number of people who are home owners feel that the home owners should get together in State leagues to look after their own interests and speak for themselves. There are approximately 13,000,000 homes in the country occupied by their owners and about 5,000,000 of them carrying mortgages. I should think from the figures available now that a large number of those are carrying second mortgages too. I can not say how many, because I have not been able to get the figures.

There was a very conspicuous absence of the home owner at the president's conference on home owing and home building. Everybody on earth was speaking for the home owner, but he wasn't there to speak for himself.

Senator Watson. I have known that to happen.

Miss OBENAUER. Yes. There are so many things in which the home owner, if he is going to be on his feet-and when I say "he" I mean “she” too, because I am one-should be able to speak in his own interests, as distinct from the interest-perfectly legitimate, Mr. Chairman, of scores of other agencies and individuals whose business it is to make money out of home building and home owning.

Senator Watson. Your plan then can be carried out without any Federal aid at all?

Miss OBENAUER. Absolutely, but the only thing is we would like to have you make provision so that if a State league qualifies otherwise, it will be able to have the service of this home loan bank should Congress give it legal existence.

That is all I have to say. If you want further figures I will be glad to come before the committee again. Senator WATSON. We have your ideas, thank you.

, (Miss Obenauer then left the table.) Senator Watson. Anybody else?

Senator COUZENS. Mr. Robert Oakman from Michigan would like to say something, I believe.

Senator Watson. Come forward, Mr. Oakman, please.


Senator COUZENS. Will you give your name to the reporter, Mr. Oakman?

Mr. OAKMAN. Robert Oakman.
Senator COUZENS. And your address?
Mr. OAKMAN. Detroit, Mich.
Senator COUZENS. And your business?

Mr. Oakman. Real estate. I am interested in real estate, banking, and trust business. I didn't intend, Senator, to say anything this morning. I came up to listen, but if you will bear with me I would like, while we are here, to tell you briefly what I think about this bill, preparatory to something that I think I can offer to clear the situation up to-morrow.

Senator WATSON. We need that.

Mr. OAKMAN. I think I have that, Senator. I do not want to ramble on the matter. I will put it before you. I have it in fairly good shape. I have been working on it since July, or at least since I heard the propaganda going out for the release of these so-called frozen securities.

I have consulted with some of the big men of the large life-insurance companies that we deal with on this matter. We deal in large mortgage amounts in Detroit, up into the millions.

Senator Watson. Do your remarks pertain to the provisions of this bill or to the general condition?

Mr. Oakman. To this bill particularly, but to-morrow, if you will permit me, I would like to take up the subject in detail and discuss it.

Senator Watson. What subject?

Mr. OAKMAN. The same subject, but at the present time I would like to say this: In the first place, I don't approve of this bill as it now is. I don't think it means anything. I have been about 47 years in the real estate business. I communicated with the illustrious Senator La Follette when he was a young man, comparatively, in Wisconsin. I was on the State tax commission in Michigan and was city tax assessor in Detroit. I was on the first State taxcommission. I handled the valuation of all of the railroad property, telephone, telegraph property, and so on, in the State of Michigan. The work was

done under the State tax commission. We were in charge of that work. Also I have handled my own properties. I have opened up about 4,000 acres of land in Detroit. Senator Couzens here knows how I began. He helped me out when I was starting. I think we sold about fifty or sixty million dollars worth of property. I have now about 425 houses on hand and millions of dollars in land, and know something about second mortgages and something about the whole business.

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