than 20 years of operation, there has been no evidence of any need to separate the 2 agencies. Congressional committees which deal with the Federal Home Loan Bank Board and the Insurance Corporation and the savings and loan business were not consulted on the plan and have never recommended a separation of the Corporation from the Board. The plan does not require bipartisanship on the board of trustees. Although stated that it followed a recommendation of the Hoover Commission, the Hoover report merely recommended that no one man serve on both_boards, with no supporting data in the report. The Hoover Task Force on Lending Agencies commented on the advantages of the present grouping of the Board and Insurance Corporation. Just last year the administration opposed the plan. Administrator Cole's official comment was that he did not agree that the Board and Insurance Corporation should be separated. Such separation of the agencies would result in increased cost and conflicting duplication of supervision. Since operating costs of both the Insurance Corporation and the Board are borne by member associations, such a reorganization would not provide maximum effectiveness to the savers and homeowners of the Nation. Yours very truly, J. L. CARNEGIE, President. FIRST FEDERAL SAVINGS & LOAN ASSOCIATION OF BUCYRUS, Hon. WILLIAM L. DAWSON, DEAR SIR: As an average, small but active, Federal savings and loan association we wish to register with you our disapproval of Reorganization Plan No. 2 with which you are particularly familiar. Whiile we have the greatest respect for the Hoover Commission recommendations and the capabilities of our President we firmly believe that in this case his advisers have made an untimely and ill-advised recommendation. As a State savings and loan association we dragged through the mire of 4 years of depression and never saw light until the Federal Home Loan Act made it possible for us to come under the benefits of the Federal Savings and Loan Insurance Corporation and the Federal Home Loan Bank Board. Their assistance and cooperation with us have left nothing to be desired. The confidence of the public in our associations is at an alltime high. To tamper with this successful agency at this time would instill a doubt that could be dangerous, costly, and questionable. The Federal Home Loan Bank has never been a static organization but has improved steadily, kept abreast with the times, and we have confidence that it could continue to do so for the benefit of all without interference of Reorganization Plan No. 2. Very truly yours, D. K. AUCK, Secretary. WOODSIDE SAVINGS AND LOAN ASSOCIATION, Congressman WILLIAM L. DAWSON, Chairman, House Committee on Government Operations, Senate Chambers, Washington, D. C. DEAR CONGRESSMAN: The board of directors of this institution, which serves some 13,000 people in Queens County, is very much concerned about the President's Reorganization Plan No. 2 which will divide the Federal Savings and Loan Insurance Corporation and the Federal Home Loan Bank Board into two separate agencies. Our objections are based on the following reasons: 1. Representatives of the savings and loan business of this country, under the leadership of the United States Savings and Loan League, were not consulted about this proposal. 2. Inasmuch as we are paying the operating expenses of the Federal Savings and Loan Insurance Corporation and the Federal Home Loan Bank Board, separating these agencies will only result in additional expense to this institution and will hamper the thrift efforts of our savers. Dividing these two organizations will only result in overlapping responsibilities and conflicting administrative orders and policies to the detriment of all concerned. We wish to call to your attention that all insured associations must be and are members of the Federal Home Loan Bank System. As distinguished from the commercial banks which are insured by the Federal Deposit Insurance Corporation but are not all members of the Federal Reserve System. We are only interested in supporting any constructive improvement in the supervision of this business. The United States Savings and Loan League is making a careful study of the Federal Home Loan Bank System, and we urge that you halt action on this reorganization plan No. 2 until that study is completed. Sincerely, JEROME Z. LORBER, President. FIRST FEDERAL SAVINGS & LOAN ASSOCIATION OF AKRON, In re Reorganization Plan No. 2 of 1956-to establish Federal Savings and Loan Hon. WILLIAM L. DAWSON, Chairman, House Committee on Government Operations, House Office Building, Washington, D. C. DEAR SIR: I vigorously oppose the reorganization plan to separate the Federal Savings and Loan Insurance Corporation from the Federal Home Loan Bank Board. The wisdom of tampering with the present successful single agency is highly questionable. It would result in increased expense to the Government and the savings institutions, overlapping of responsibilities, conflict of policy, and great confusion in the business and in Congress. While this is a Presidential proposal I feel doubtful that the President's staff was adequately aware of the implications of this proposal or its effect on our business. This plan was formulated without consulting or even informing the loan companies affected or the congressional committee which deals with the Federal Home Loan Bank Board. I urge you to reject this plan and use all your influence to defeat it. Very truly yours, G. V. BRALEY, President. METROPOLITAN SAVINGS & LOAN ASSOCIATION, Hon. WILLIAM L. DAWSON, Chairman, House Committee on Government Operations, House Office Building, Washington 25, D. C. DEAR MR. DAWSON: Under date of May 17, the President transmitted Reorganization Plan No. 2 of 1956 to Congress. The plan would separate the Federal Savings and Loan Insurance Corporation from the jurisdiction of the Federal Home Loan Bank Board and establish it as an independent agency. We wish you to know that we join with the United States Savings and Loan League and the Federal Savings and Loan Advisory Council in opposing the plan. There are many disadvantages to the plan among which the following will be of particular interest to you as a Member of Congress : 1. The congressional committees which deal with the Federal Home Loan Bank Board and the Insurance Corporation and the savings and loan business were not consulted on the plan and have never recommended a separation of the Corporation from the Board. 2. The plan injects an unfortunate partisanship into the agency by failing to require bipartisanship on the board of trustees of the Corporation. Unlike the Bank Board and most Government boards, all 3 trustees could be from 1 political party. 3. The plan fails to provide for any term of office for the trustees. 4. The congressional philosophy of reorganization plans is that they are to result in savings and greater efficiency in Government. Whatever the possible merits of the plan are, it is impossible for it to claim economy, since it would establish 2 agencies in the place of the present 1. 5. Although the letter accompanying the plan states that it follows a recommendation of the Hoover Commission, the Hoover report merely recommended that no one man serve on both boards and there was no supporting data in the Hoover Commission report. 6. The Hoover Task Force on Lending Agencies which recommended independent status for the Bank Board last year specifically commented on the advantages of the present grouping of the Board and Insurance Corporation. 7. Just last year the administration opposed the plan. Administrator Cole's official comment on the Hoover Commission recommendation said "I do not agree *** that the Board and Insurance Corporation should be separate." Our opposition to Reorganization Plan No. 2 is based merely on its defects. The savings and loan industry has always been willing to work with and support the administration in bringing about needed improvements in our Government agency, and, indeed, the industry's record is one of support for the President's program of stabilizing the dollar and restraining the housing boom. However, neither the congressionally created Federal Savings and Loan Advisory Council nor the United States Saving and Loan League were given notice of the plan until it was made public. We would appreciate hearing from you if there is some phase of this that we have overlooked. Very truly yours, GUNTHER J. SHIRLEY, President. Hon. WILLIAM L. DAWSON, UNION FEDERAL SAVINGS AND LOAN ASSOCIATION, House of Representatives, Washington, D. C. DEAR SIR: Your all-out opposition is requested to the proposed splitting up of the Federal Home Loan Bank Board as provided in Reorganization Plan No. 2. This plan, as you know, would divide the Federal Savings and Loan Insurance Corporation and the Federal Home Loan Bank Board into two separate agencies. The present, single agency to handle savings and loan affairs was developed over the past quarter of a century by numerous congressional enactments and has resulted in a strong and progressive nationwide system of savings institutions which now finance 37 percent of all home loans. The wisdom of tampering with this present, successful, single agency is highly questionable and dangerous. It would create still another agency, which, unlike most reorganization plans proposed, would not result in economy of operation but, rather, would increase the expense of the Government agencies to individual savings institutions (which pay most of the costs of the Board and the Insurance Corporation). The existence of two boards, with overlapping responsibilities for the savings and loan operation, would result in conflicts of policy and great confusion in the business as well as to Congress and the President. In addition, there are the following disadvantages to the plan: 1. The congressional committees which deal with the Federal Home Loan Bank Board and the Insurance Corporation and the savings and loan business were not consulted on the plan and have never recommended a separation of the Corporation from the Board. 2. The plan injects an unfortunate partisanship into the agency by failing to require bipartisanship on the board of trustees of the Corporation. Unlike the Bank Board and most Government boards, all 3 trustees could be from 1 political party. 3. The plan fails to provide for any term of office for the trustees. 4. The congressional philosophy of reorganization plans is that they are to result in savings and greater efficiency in government. Whatever the possible merits of the plan are, it is impossible for it to claim economy, since it would establish 2 agencies in the place of the present 1. 5. Although the letter accompanying the plan states that it follows a recommendation of the Hoover Commission, the Hoover report merely recommended that no one man serve on both boards and there was no supporting data in the Hoover Commission report. 6. The Hoover Task Force on Lending Agencies which recommended independent status for the Bank Board last year specifically commented on the advantages of the present grouping of the Board and Insurance Corporation. 7. Just last year the administration opposed the plan. Administrator Cole's official comment on the Hoover Commission recommendation said "I do not agree *** that the Board and Insurance Corporation should be separate." Our association is interested in and will support any constructive improvement in the supervision of the savings and loan business. The United States League currently is making a careful, painstaking study of the Federal Home Loan Bank System with that end in view. Yours very truly, JOSIE T. CAMORS, President. FARMERS' BUILDING & LOAN ASSOCIATION, Hon. WILLIAM L. DAWSON, House Committee on Government Operations, DEAR MR. DAWSON: Our attention has been called to Reorganization Plan No. 2 which proposes splitting up of the Federal Home Loan Bank Board, the result of which would be to divide the Federal Savings and Loan Insurance Corporation and the Federal Home Loan Bank Board into two separate agencies. I am writing this letter to express our opposition to this plan. The savings and loan industry feels it would be to their best interest, and to the public interest which it serves, that the Federal Savings and Loan Insurance Corporation and the Federal Home Loan Bank Board remain under the control of the Federal Home Loan Bank Board. There are many reasons for this, but I will not take time to enumerate them here, because you will be advised at a later date by our trade organization, the United States Savings and Loan League. Hoping that you will give mature consideration to our opposition to Reorganization Plan No. 2, I am, Sincerely, ROBERT K. PARK, President-Manager. THE OAKLEY BUILDING & LOAN Co., Cincinnati, Ohio, June 19, 1956. Hon. WILLIAM L. DAWSON, Chairman, House Committee on Government Operations, DEAR CHAIRMAN DAWSON: We wish to submit our protest against Reorganization Plan No. 2 of 1956 separating the Federal Savings and Loan Insurance Corporation from the Federal Home Loan Bank. This protest is motivated by the following considerations: 1. The building and loan associations, under this plan, would be reporting to and receiving directives from two independent sources with consequent conflicts of interpretations, confusion, uncertainty and delays in meeting business crises as they arise. 2. This would put the expense of maintaining two sources of Government controls, supervision and examination instead of one. 3. Divorced from the bank, the insurance corporation would be rendered more remote from the needs, problems and views of the building and loan associations and less informed to carry out its work effectively. 4. Measure shows evidence of haste and inconsidered action: (a) the member associations were not consulted, although they run the bank and will shortly own the capital of the insurance corporation; (b) the congressional committees dealing with these two institutions were not consulted; (c) the plan does not require a bipartisan board for the insurance corporation; (d) the plan does not contribute to governmental economy. Very truly yours, JAMES W. FARRELL, President. FARGO FIRST FEDERAL SAVINGS & LOAN ASSOCIATION, Hon. WILLIAM L. DAWSON, Chairman, House Committee on Government Operations, DEAR REPRESENTATIVE DAWSON: Attached letter copy to the President is selfexplanatory. I earnestly urge your consideration of same. Very truly yours, C. A. WILLIAMS, Executive Vice President. JUNE 19, 1956. Re Expressing opposition to Reorganization Plan No. 2. President of the United States of America, White House, Washington, D. C. DEAR MR. PRESIDENT: There is always room for improvement in the grouping and management of government agencies as in all human affairs. I would be the first to contend that improvements and perhaps imperative safeguards should be made as to the Federal Home Loan Bank System and the Federal Savings and Loan Insurance Corporation. I am certain however, that Reorganization Plan No. 2 is not the right approach to the problem. The Hoover Commission reports are very conflicting. Referring to the Federal Savings and Loan Insurance Corporation (the Hoover task force on lending agencies)-page 40 says this, "*** the task force has no recommendation to offer with respect to the organization and operation of this mutual insurance trust," *** and again, page 38 referring to the present grouping, “*** this appears to be a natural grouping of the functions which require no change” * * * then Hoover Recommendation No. 4 reverses the task force findings and recommends (without proper supporting data) the formation of a new board with all its attendant expense and complications. I am unable to learn just why this confliction but I surmise that it may spring from a comparison with the separation in the commercial banking industry wherein Federal Reserve and FDIC are separate entities. There is a controlling difference in the two situations however, to wit: there is a large portion of FDIC insured commercial banks which are not members of the Federal Reserve System and apparently are militant in their stand that FDIC shall be kept as a separate agency. In our industry membership in the Federal Home Loan Bank System is required by the FSLIC. With us the bank system and FSLIC go together. In over 20 years of operation there is no evidence of mismanagement of FSLIC by the Federal Home Loan Bank Board. There is another fact of which the savings and loan industry is very proud and-sensitive if this fact is apparently overlooked, i. e. that we have paid the United States Treasury "lock, stock, and barrel" principal and interest in full for the Federal Home Loan Bank System and are fast on the way of paying interest as well as principal for all Treasury aid in the Federal Savings and Loan Insurance Corporation. Am I presuming, to say, if all Treasury advances were repaid like that your worries would be a whole lot less? Furthermore with a record like this, is it expecting too much to be taken into confidence before such important changes are made? No responsible savings and loan man or group has had a chance to debate the pros and cons of this plan No. 2. If certain objectives are imperative give us the chance to debate out the best solution, In the meantime I strongly urge that Reorganization Plan No. 2 be recalled or rejected. Respectfully yours, C. A. WILLIAMS, Executive Vice President. SAVINGS ASSOCIATION LEAGUE OF NEW YORK STATE, Hon. WILLIAM L. DAWSON, Chairman, House Committee on Government Operations, DEAR CONGRESSMAN DAWSON: The members of the board of directors of this organization have reviewed Reorganization Plan No. 2 of 1956 and the statement which accompanied its transmittal to the Congress. The attached copy of a resolution unanimously adopted on June 16, 1956, reflects the views of the members of the board on the proposed separation of the Federal Savings an Loan Insurance Corporation from the Federal Home Loan Bank Board. This league is intensely interested in and will heartily support any constructive improvement in examination and supervision of savings and loan associations and intends to continue its study of the Federal Home Loan Bank System in order to present our views on its future operation. |