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COMMITTEE ON BANKING AND CURRENCY

PETER NORBECK, South Dakota, Chairman SMITH W. BROOKHART, Iowa.

DUNCAN U. FLETCHER, Florida. PHILLIPS LEE GOLDSBOROUGH, Maryland. CARTER GLASS, Virginia. JOHN G. TOWNSEND, JR., Delaware. ROBERT F. WAGNER, New York. FREDERIC C. WALCOTT, Connecticut. ALBEN W. BARKLEY, Kentucky. JOHN J. BLAINE, Wisconsin.

ROBERT J. BULKLEY, Ohio. ROBERT D. CAREY, Wyoming.

CAMERON MORRISON, North Carolina. JAMES E. WATSON, Indiana.

THOMAS P. GORE, Oklahoma. JAMES COUZENS, Michigan.

EDWARD P. COSTIGAN, Colorado. FREDERICK STEIWER, Oregon.

CORDELL HULL, Tennessee.
JULIAN W. BLOUNT, Clerk
GIBBS W. SHERRILL, A8sistant Clerk

SUBCOMMITTEE ON SENATE BILL 2959

JAMES E. WATSON, Indiana, Chairman JOHN G. TOWNSEND, JR., Delaware.

ROBERT J. BULKLEY, Ohio. JAMES COUZENS, Michigan.

CAMERON MORRISON, North Carolina.

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CREATION OF A SYSTEM OF FEDERAL HOME LOAN BANKS

WEDNESDAY, FEBRUARY 17, 1932

UNITED STATES SENATE, SUBCOMITTEE OF THE COMMITTEE ON BANKING AND CURRENCY,

Washington, D.C. The subcommittee met at 10 o'clock a. m. in the hearing room of the Committee on Interstate Commerce, the Capitol, pursuant to adjournment on February 16, 1932, Senator James E. Watson presiding.

Present: Senators Watson, Townsend, and Bulkley.
Senator WATSON. The committee will come to order.

There are two telegrams for the record, one from Edwin L. Griest, president of a building and loan association, and one from the Chamber of Commerce, of Cedar Rapids, Iowa. (The telegrams are as follows:)

CINCINNATI, OHIO, February 16, 1932. COMMITTEE ON BANKING AND CURRENCY,

United States Senate, Washington, D.C.: On behalf of 290 building associations of first district organization, Ohio Building Association League, and their many thousand members, I urge passage of Federal home loan bank bill. We speak for the people as no other class financial institutions can. Pass the bill without delay.

EDWIN L. GRIEST, President.

CEDAR RAPIDS, Iowa, February 16, 1932. SENATOR PETER NORBECK : Construction industry vitally interested in immediate passage home loan bank bill. Local supply dealers particularly urge quick favorable consideration.

CHAMBER OF COMMERCE,

CHAS. D. MANSON. Senator WATSON. Mr. William H. Kingsley.

STATEMENT OF WILLIAM H. KINGSLEY, VICE PRESIDENT OF THE

PENN MUTUAL LIFE INSURANCE CO., PHILADELPHIA, PA.

Senator WATSON. Tell us your name, Mr. Kingsley.
Mr. KINGSLEY. William H. Kingsley.
Senator WATSON. Where do you live, Mr. Kingsley ?
Mr. KINGSLEY. Philadelphia.
Senator Watson. What is your business?

Mr. KINGSLEY. Vice president of the Penn Mutual Life Insurance Co.

Senator Watson. How long have you been such?
Mr. KINGSLEY. For 15 years.
Senator WATSON. You have studied this question, have you?
Mr. KINGSLEY. Yes, sir.

Senator WATSON. From the life insurance standpoint and every other standpoint ?

Mr. KINGSLEY. For about 40 years I have been active in corporatemortgage lending.

Senator WATSON. Have the life insurance companies had meetings about this matter?

Mr. KINGSLEY. We have conferred informally several times, growing out of the President's conference, of which I was a member; but we have had no formal conferences on this.

Senator WATSON. But you have studied this bill?
Mr. KINGSLEY. Yes, sir.
Senator WATSON. And have ideas about it?
Mr. KINGSLEY. Yes, sir.

Senator WATSON. All right. Tell us what they are and why they are.

Mr. KINGSLEY. Mr. Chairman, I have come to regard this bill as ineffective in purpose and not a satisfactory supplement to the activities of the reconstruction finance bill. I think that amendments that have been made almost put it beyond recognition by its author, and I believe there are imperfections in it of which its projectors were unconscious at the time they were created, which will make it somewhat unworkable.

Senator WATSON. The life insurance companies are all against it; are they not?

Mr. KINGSLEY. I can not say all. I do not know.

Senator TowNSEND. Have you amendments to the bill that you think would make it a workable bill?

Mr. KINGSLEY. Senator, I think the great objection to this bill is that it undertakes to set up a permanent structure. All the research that has been made indicates that an emergency exists arising from an unusual situation.

Senator TOWNSEND. Would you be in favor of the bill if the emergency feature was all it provided ?

Mr. KINGSLEY. Yes; if further amended in several respects, but I believe that the terms of the reconstruction finance bill will set up a much better type of relief than this bill.

Senator WATSON. What are your objections to this bill, Mr. Kingsley?

Mr. KINGSLEY. In the first place, I doubt very much if the building and loan associations, for which I am not authorized to speak, and the insurance companies, by reason of their restrictions, could comply with the benefits of this bill.

Senator WATSON. Why not?

Mr. KINGSLEY. The insurance companies could only by legislative permission purchase stock in the proposed regional banks, and if this right were granted and they should withdraw they would have to leave all of their deposit behind. Now the laws provide that insurance companies must retain possession of their securities; they must not pass beyond control. Such deposits would be subject to diminution for any loss that might be encountered in the operation of this bill.

I feel that we are attempting to cure what is really an emergency by some enduring remedy which is not necessary, which will be very

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