factory mortgage security who is now threatened with the loss of his home because he can not renew or place a loan, wants emergency help, it is true. Also he wants to know that it will not happen again. Greater assurance of permanent financial security in the ownership and occupancy of his home will constitute emergency relief of great importance. But that is a kind of emergency relief which the Reconstruction Finance Corporation can not give.

Residential building offers the most promising opportunity for the gradual restoration of building. The greatest opportunity, and the greatest need, is in the small home field. Evidently in the absence of Federal initiative, and the initial impulse of public funds, the needed cooperation of loan and finance agencies can not be secured. We express therefore the earnest hope that the Congress will not unnecessarily delay the enactment of this legislation.

Senator WATSON. How long have you been in the lumber business? Mr. COMPTON. About 10 years.

Senator WATSON. Is there a lumber association of some kind which seeks to standardize the character of lumber used?

Mr. COMPTON. One of our principal activities has been the effort to establish weights and measures than can stand in relation to the lumber business in some way as the pounds and dollars stand in relation to other industries and finance.

Senator WATSON. You think such a thing as that is possible, do you?

Mr. COMPTON. Yes, I do.

Senator WATSON. Does that mean if you are going to build a house for $10,000, that there should be a certain quality of lumber used in that, a certain style and size?

Mr. COMPTON. Not the style.

Senator WATSON. How can you standardize?

Mr. COMPTON. I think there are certain minimum sizes and certain minimum grades in building below which no good builder ought but below which some builders do go.

to

go,

Senator WATSON. That has reference to grade?

Mr. COMPTON. Grade and size both,

Senator WATSON. Grade and size?

Mr. COMPTON. Yes.

Senator WATSON. I am wholly ignorant on that subject.

Mr. COMPTON. As to size, I mean such things as joists and studs. Senator WATSON. Yes.

Mr. COMPTON. One of the things which differentiate, what I have referred to as jerry-building, from recognized standard types of construction. That is a large subject, of course. My suggestion is merely that that might be given due recognition in the availability of loan funds.

Senator WATSON. You are not selling much lumber now for home building?

Mr. COMPTON. Very little.

Senator WATSON. How does it compare with a year or two years or three years ago?

Mr. COMPTON. It is rather difficult to trace the final destination of lumber shipments, but the total lumber consumption is about 35 per cent, perhaps 40 per cent of the volume of 1928.

Senator WATSON. Where is your market?

Mr. COMPTON. All over the country.

Senator WATSON. All over the country, you say?

Mr. COMPTON. Practically every industry to some extent uses lumber. Fortunately, we are not entirely dependent on home building. If we were, I think the lumber industry would be out of business now. It is near enough out of business as it is.

Senator WATSON. Have you any questions, senator?

Senator BULKLEY. No.

Senator WATSON. We are much obliged to you, sir.
We will adjourn at this time, subject to my call.

(Thereupon, at 4.55 p. m., Thursday, February 18, 1932, the committee adjourned, subject to call.)

98195-32-PT 3-10

The subcommittee met at 10 o'clock, a. m., in the hearing room of the Committee on Interstate Commerce, the Capitol, pursuant to call, Senator James E. Watson presiding.

Present: Senators Watson, Couzens, Townsend, Bulkley, and Morrison.

Senator WATSON. The committee will come to order. We plan to conclude these hearings to-day. The first witness is Mr. S. F. Westbrook.

STATEMENT OF S. F. WESTBROOK, VICE PRESIDENT ETNA LIFE
INSURANCE CO., HARTFORD, CONN.

Senator WATSON. Where do you live, Mr. Westbrook?
Mr. WESTBROOK. Hartford, Conn.

Senator WATSON. What is your business?

Mr. WESTBROOK. I am vice president in charge of mortgage loans of the Etna Life Insurance Co.

Senator WATSON. How long have you been connected with that company?

Mr. WESTBROOK. Six years.

Senator WATSON. Have you many loans which you have made to building and loan associations?

Mr. WESTBROOK. No, sir.

Senator WATSON. You do not rediscount their mortgages?

Mr. WESTBROOK. We have not, for building and loan associations. We have for some banks.

Senator WATSON. You do not lend directly to the home builders. and home buyers?

Mr. WESTBROOK. Yes, sir; the great majority of our loans are directly to the home owner.

Senator WATSON. You mean the great majority of all the loans you make?

Mr. WESTBROOK. Yes, sir.

Senator WATSON. The great majority of all the loans you make are to home owners or home builders?

Mr. WESTBROOK. Yes, sir.

Senator WATSON. What is the total of those loans?
Mr. WESTBROOK. At the present time about $25,000,000.
Senator WATSON. Where have you loaned that?

Mr. WESTBROOK. In scattering localities throughout the countryChicago, Minneapolis, St. Paul, Dallas, Fort Worth, Oklahoma City, and Tulsa.

Senator WATSON. That is all loaned through local agencies? Mr. WESTBROOK. Yes, sir.

Senator WATSON. What is the general situation with reference to that business?

Mr. WESTBROOK. It varies considerably. In some localities there is evidence of trouble. In other localities, there is no such evidence. Senator WATSON. What are the distressed localities?

Mr. WESTBROOK. For the Aetna Life Insurance Co., I should say that Dallas, Tex.; Rochester, New York, and Chicago, are the outstanding places.

Senator WATSON. Do you have many loans in those places?

Mr. WESTBROOK. A fair amount in each one-varying amounts. Senator WATSON. You have read this bill, have you?

Mr. WESTBROOK. Yes, sir.

Senator WATSON. Have you talked with other life-insurance men about it?

Mr. WESTBROOK. Yes, sir.

Senator WATSON. Have you had meetings in regard to it?

Mr. WESTBROOK. Informal meetings of varying size; yes, sir; to discuss the intentions of the bill, and how it would affect our particular mortgage-loan business. I presume that at one time or another I have talked with 15 or 20 life-insurance people.

Senator WATSON. Are these insurance companies in Connecticut, particularly?

Mr. WESTBROOK. With all the insurance companies in Connecticut, and with a great many outside.

Senator WATSON. Are you against the bill?

Mr. WESTBROOK. Yes, sir.

Senator WATSON. As a proposition in toto, or against certain features of the bill?

Mr. WESTBROOK. In toto; and against specific features, Senator. Senator WATSON. You may proceed and make your own statement. Mr. WESTBROOK. I have prepared a brief statement of my position on it, and I am quite sure that it is representative of insurance opinion generally. I am doing it in the interest of economy of time. Senator TOWNSEND. Let me ask you one question. Have you thought of it in the light of an emergency measure, or a permanent measure?

Mr. WESTBROOK. I am touching on both phases.

Senator TOWNSEND. You are opposed to it as an emergency measure and as a permanent measure?

Mr. WESTBROOK. Yes, sir. I am touching on both phases.

We feel that insurance companies are peculiarly qualified to express an unbiased opinion on such matters as mortgage banking. I have naturally read in the papers some of the testimony that has been offered, and life-insurance companies have been referred to several times as the great moneyed interests. Of course they have a