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And here is a letter from the Stamford Real Estate Board, my own town, and I want to call your attention to this. It says. [reading]:

FEBRUARY 12. 1932. Mr. ARTHUR I. CRANDALL,

Stamford, Conn. DEAR MR. CRANDALL: At the regular meeting of the board of directors of the Stamford Real Estate Board held February 11, 1932, the subject of available supply of first-mortgage funds was thoroughly discussed.

Ample evidence was presented to show that there is a shortage of mortgage money in this community and that time loans on real estate are not being renewed, or, if newed, a substantial payment is being demanded; the result being that a number of foreclosures are taking place here as the property owners in many cases are unable to meet the requirements of the banks and mortgage companies, thereby creating a very serious condition.

Therefore, as a board, we urge you to present this situation before the committee hearing at Washington relative to the home loan bill. We believe this condition to be general throughout this section of the country and urge the most serious consideraion by the committee of the legislation in question.

We have and will gladly produce documentary evidence of specific cases in the event that such should be requested. Very truly yours,

STAMFORD REAL ESTATE BOARD (Inc.).
PAUL M. BARROWS, Chairman of the Board,
WILLIAM N. TRAVIS, President,

ROBERT S. HAY, Secretary. Now I come down to a letter from the Stamford Advocate, a paper in my home town, which I would like to read to you [reading]:

FEBRUARY 12, 1932. Mr. ARTHUR I. CRANDALL,

Stamford, Conn. DEAR MR. CRANDALL: Inclosed please find editorial taken from Stamford Advocate of January 28, 1932.

In view of the fact that you can purchase dwelling houses in the residential section of Stamford to-day much cheaper than you can erect one even at the present cost of material and labor, I was very much surprised several weeks ago to find a friend who wanted to erect his own home in Stamford and was seeking a loan. He was unable to do so, and the banker to whom we applied informed us that he had already rejected a number of such loans, numbering eight in one week. You can readily appreciate the number of men who would have been employed had these applications been approved.

Under our State banking laws a mutual savings bank is not allowed to loan more than 70 per cent of its deposits and surplus, and no bank as conservatively operated as the ones in Stamford would think of approaching that figure under present conditions.

A finance corporation such as is proposed in House bill 5090 that could finance such projects would do much to relieve the present stagnant condition and start the building trades well on the road to recovery.

I can readily understand the fear entertained by the mortgage companies if such a bill should become the law. As you are aware the mortgage companies all charge a bonus for such loans, while the savings banks charge 6 per cent. If money was obtainable at the banks at 6 per cent, what would become of the mortgage companies? Very truly,

PAUL L. LOCKWOOD. There was an editorial came out in the Stamford Advocate on January 28, which I would like to call your attention to, also.

(The editorial referred to is as follows:)

A LIQUID POSITION

Thursday, January 28, 1932.—One of the obstacles in the way of business recuperation is the necessity felt by the banks of keeping their funds as liquid as possible. The public so far has shown remarkable common sense in realizing that money deposited in banks keeps it in circulation and helps business, while money hoarded takes money out of circulation and adds to the present difficulties. The banks, however, have had to do a certain amount of hoarding. They have felt that they must, as custodians of the public's money, have larger sums immediately available than they would ordinarily need.

This policy, wise as it seems under present conditions, retards building and expansion projects which might be undertaken were funds available. The other day a Stamford resident, who had recently purchased some land, went to one of the banks to try to borrow money for the erection of a home. Had the man been able to borrow the money he would have started to build at once. This would have meant the purchase of materials and the paying out of wages. It would have been a definite aid to business recuperation,

As it was, the bank was unable to make the loan. The refusal of the bank did not turn on the lack of security for the loan. The security was ample. It did not turn on the character of the man who wished to have the loan. The man was well and favorably known. The bank just simply did not have the money to loan.

The striking thing about the incident was the statement from an official of the bank that this was the eighth request for a loan for building purposes which had been made in the last few days, and which the bank had been unable to grant. This was the experience of a single bank, and all our local banks are in the same position with respect to the availability of money to be lent.

The smaller banks of the country, such, for instance, as those in our city, naturally feel the reaction of the fairly ticklish situation in which the large New York banks find themselves. This condition of the New York banks has been one of the reasons for the fact that the Federal reserve bank has so far refused to reduce its rediscount rate. The reserve bank has felt that it must proceed slowly in any such matter as this, lest such action might aggravate the situation. The lowering of the rediscount rate might lead to further withdrawal of foreign gold and might have led to liquidation of American securities held abroad.

In spite of reports to the contrary it can be definitely stated that the Federal reserve has not undertaken any actual inflationary measures. As was announced yesterday, President Hoover's policy is to liquefy credit and not to produce inflation.

It is a fact that at the present moment the bankers constitute the group which we may term the radical pessimists. One of the factors, for example, that is disturbing to the larger New York banks is the situation with respect to the short-term German commercial obligations which mature at the end of next month. At present. payment on these obligations has been deferred by a “stand-still ” agreement, but there is apprehension that they may be entirely repudiated when the present agreement expires.

About $400,000,000 of American capital is tied up in these German commercial obligations, approximately 80 per cent of which is held by New York banks. Possibility of severe losses from this source is naturally a contributing factor to the general policy of caution in making new commitments. Albert H. Wiggin, chairman of the Chase National Bank, is now giving this matter his personal attention in Europe and is acting as the representative for all the New York banks involved. In this connection there is a feeling in many circles that the present prices of the stock of these New York banks already discount the loss from the German source.

Now, I haven't a great deal more to say about this, Senator, except that I am looking at the thing from the home owner's standpoint, and I think the evidence produced here is overwhelming that the need is great and that this is required. I think it is sound. I think that it will pay its own way, and I venture to say here what you are doing is setting up a building and loan reservoir which is mobile-we have used the word “ liquidity," but I like the word “ mobile," which we used when we were in France.

Senator WATSON. Connecticut is always liquid.
Mr. CRANDALL. Well, watch us vote!

The big thing is that this liquidity is mobile. You can shoot it from one point to another where it is going to do some real good, and I can not help but have the consciousness that you are going to put another big factor into the restoration of normal industry.

I thank you very much.
Senator WATSON. We thank you for your statement.

The Secretary has received a large number of telegrams asking to have them all inserted in the record. But there are too many of them to put in the record. If you have three or four representing one group, that is enough, and you may insert those in the record. I do not know that it is neecssary to read them, unless somebody wants them read.

Mr. SHERRILL (the committee clerk). Mr. Clark has several that he would like to read.

Senator WATSON. Very well.

FURTHER STATEMENT OF THOMAS F. CLARK, OF THE T. F. CLARK

CO., HARTFORD, CONN. Mr. CLARK. May I have the privilege of reading three or four of these telegrams?

Senator WATSON. Yes.

Mr. CLARK. This first one is a telegram from Dallas, Texas (reading]:

DALLAS, Tex., February 11, 1932. THOMAS F. CLARK, Chairman Legislative Committee, Mortgage Bankers Association of America,

Hotel Washington, D. C.: In our opinion there is no shortage of homes in either Dallas, Fort Worth, or other North Texas cities, but on the contrary an oversupply exists. It is our further opinion that if the proposed Federal home loan bank bill becomes a law its operation will undoubtedly produce speculative building and further overexpansion. Furthermore, present home owners will suffer keenly on account of demoralized values caused by overconstruction, and nobody would be benefited ultimately. For this and other reasons we are opposed to the present bill.

ERNEST R. TENNANT,

President Dallas Bank & Trust Co. Senator WATSON. Who signs that?

Mr. CLARK. That is signed by Ernest R. Tennant, the president of the Dallas Bank & Trust Co. This is in response to a telegram I sent out to practically every State in the Union to members and nonmembers, to mortgage bankers in the United States, asking the question as to what is the situation with reference to building. The telegram was not worded in order to invite favorable response. I think that we have 261, covering 37 States, covering 116 cities, and it shows that 75 per cent say overbuilt; 24 per cent normal, and 1 per cent shortage. I would like to submit this for the record, this digest.

Senator WATSON. All right.
(The digest referred to is as follows:)

Two hundred and seventy-two reports from 116 cities in 37 States report: 208, or 75 per cent, overbuilt; 64, or 25 per cent, normal; 1, shortage.

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F. Salter Co.
John A. Stephenson.
Stryker Manley & Buck
MacGregor, Bradley & Hulanke.
Gerry Northrup & Co.
Ulland Mortgage Co.
E. B. Mount
Thorpe Bros.
David C. Bell Investment Co..
Union Mortgage Co.
Towle Mortgage Co..
E. M. & H. F. Ware.
Mortgage loan committee, Duluth Real Estate

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The Matteson Co. (Inc.).-
Merchants Bank & Trust Co.
J. C. McGee.
Walton Bank & Trust Co.
Duvall Trust Co..
Herbert V. Jones & Co...
W. C. Mackenzie.
Wilson D. Wood Mortgage Co..
Lyon, R. E. & Mortgage Co..
Missouri Savings Bank & Trust Co.
Fidelity National Bank & Trust Co.
Meredity Bales Co.
First Mortgage Investment Co.

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