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We urgently request you to vote for the resolution to disapprove Reorganization Plan No. 2 of 1956. Respectfully yours,

DAVID FORD, President.

RESOLUTION Whereas the Congress of the United States has received for consideration Reorganization Plan No. 2 of 1956, which proposes to separate the Federal Savings and Loan Insurance Corporation from the Federal Home Loan Bank Board, by creating a new Board of Trustees of the Corporation, by vesting management of the Corporation in that Board of Trustees and by making appropriate transfers of the functions of the Federal Home Loan Bank Board to the Board of Trustees and to the Corporation, and

Whereas the ultimate mutual owners of the corporation the insured savings and loan associations--were neither advised of, nor consulted with prior to the transmittal of the plan to the Congress, and

Whereas there are grave doubts as to any reduction in expense of operation or increase in efficiency of the Corporation or any additional benefits to the public if the Corporation is separated from the Federal Home Loan Bank Board, and

Whereas such separation could result in duplication of effort, reporting, examination, and supervision, and

Whereas the present statutory assignment of powers, duties, and responsibilities of the Federal Home Loan Bank Board are the outcome of a number of important acts by the Congress over a period of 24 years, which in general have been sponsored and supported by the organized sayings and loan business in the Nation: Now, therefore, be it

Resolved, That the board of directors of the Savings Association League of New York State on behalf of the members, in meeting assembled, express strong objection to the purpose and provisions of Reorganization Plan No. 2 of 1956; and be it further

Resolved, That the president of the league be directed to transmit copies of this résolution to the President of the United States, to the Members of Congress representing the State of New York and to the chairmen of the Senate and House Committees on Government Operations, respectfully urging that Reorganization Plan No. 2 of 1956, be withdrawn or defeated.

I certify that the foregoing resolution was unanimously adopted at a regular legal meeting of the board of directors of the Savings Association League of New York State, held at Hotel Biltmore in New York City, on June 15, 1956.

DAVID FORD, President.

FIRST FEDERAL SAVINGS & LOAN ASSOCIATION,

Austin, Tex., June 19, 1956. Hon. WILLIAM L. DAWSON, Chairman, House Committee on Government Operations,

House of Representatives, Washington, D. C. DEAR MR. DAWSON: I understand that on May 17, President Eisenhower transmitted to the Congress the Reorganization Plan No. 2 of 1956. This plan contemplates that the Federal Savings and Loan Insurance Corp., will be estab lished as an independent agency, subject to the direction and control of the President of the United States, with its affairs to be administered by a 3-man Board of Trustees appointed by the President, one of whom shall be the Chairman of the Home Loan Bank Board.

With all due respect to the President, I wish to submit my objection to the plan for the following reasons :

1. Savings and loan associations over the country would have to deal with two Government agencies; one, the Insurance Corporation, and the other, the Home Loan Bank System. This would in all probability result in a tremendous amount of confusion and overlapping of decisions and authority.

2. The Insurance Corporation, if made an independent agency, would not feel the responsibility for the general progress and advancement of the savings and loan business, and would create an incentive to control salaries, dividends, pensions, and other functions that should be left to management of the associations.

3. The operating costs of both the Insurance Corporation and the Board are now paid by member associations, and if the separation were effected, the plan would bring considerable operating expenses to the industry.

- 4. The supervision and examination of associations would be doubly increased, since the Insurance Corporation and the Board would have their respective responsibilities and obligations to determine each year as to the soundness of member associations.

5. The advice and counsel of leaders in the savings and loan industry were not consulted before the plan was submitted, and if they had been, perhaps the President would have viewed the other side of the picture more carefully.

The Federal Savings and Loan Insurance Corp., as a part of the Federal Home Loan Bank Board, has been highly successful and progressive, and to tamper with this combination in which the public has so much confidence might result in creating a lack of confidence on the part of the public. This would be a setback to the progress that the savings and loan industry has contributed in our economic life over the past years.

You may be assured that this association, as well as all the others over the country, is interested in constructive improvement of the supervision of the savings and loan business, and that should any changes occur in the future for improvement, the industry will support them to the limit. However, it is felt that the present plan under consideration would be detrimental rather than helpful to the business, and I earnestly solicit your support in defeating adoption of the plan. Very truly yours,

A. B. SHIEBLOW, President.

DALHART FEDERAL SAVINGS & LOAN ASSOCIATION,

Dalhart, Tea., June 19, 1956. Hon. WILLIAM L. DAWSON, Chairman, House Committee on Government Operations,

House Office Building, Washington, D. C. DEAR MR. DAWSON: This letter is to register our disapproval to the proposed reorganization of the Federal Home Loan Bank and Federal Savings and Loan Insurance Corporation. This plan is known as Reorganization Plan No. 2, and we think that it would be a determinate to the successful operation of the sav. ings and loan system which now finances approximately 37 percent of all home loans.

Since 1934, the savings and loan industry has grown under the leadership of one agency, and changing this at the present time, we feel, would be questionable and dangerous to the sound operation of our business. We cannot see how it would make for economy, since it would create still another separate Government agency.

From the local angle, the existence of the two Boards would require duplication of recordkeeping, reports, and other matters which would greatly increase the expense on the local level in operating a savings and loan business.

We hope that you will take these matters into consideration for your committee, and accept this letter as being our record opposition to this reorganization plan. Very cordially yours,

JIMMIE PIGMAN, Executive Vice President.

HOUSE OF REPRESENTATIVES,

Washington, D. O., June 19, 1956. Hon. WILLIAM L. DAWSON, Chairman, Committee on Government Operations,

House of Representatives, Washington, D. C. DEAR MR. CHAIRMAN: Thank you for your letter of the 18th, advising me of your committee's hearings on Reorganization Plans No. 1 and No. 2.

May I address myself to plan No. 2, that is, the separation of the Insurance Corporation from the Home Loan Bank Board.

I have had occasion to look into the activities of the Federal Home Loan Bank Board for several years as a member of the Independent Offices Subcommittee of the Appropriations Committee. The Home Loan Bank Board does a good job.

Its Insurance Corporation, likewise, has done a good job. Their losses have been very small. They now have in their reserve fund in the neighborhood of $198 million, which has accumulated from collection of fees. Of course, the bigh level of economy that has prevailed in this country for the last 20 years is more or less responsible for the smallness of failures of insured member institutions covered by the Board.

The Examining Division of the Board also does a good job, and its activities have served a most useful purpose. We have insisted that they make an inspection more often than every 18 months, and they are getting down to an inspection once every 12 months. Perhaps an inspection once every 9 months of insured member institutions would be more desirable.

The cost of operation of the Home Loan Bank Board, its Insurance Corporation, and Examining Division, is paid entirely with its own funds. Not a penny of appropriated money is involved.

Only last year, the Home Loan Bank Board, the Insurance Corporation, and the Examining Division were made an independent agency and taken out from under whatever jurisdiction the Office of the Administrator of the Housing and Home Finance Agency may have claimed over it. I think he had precious little, if any, jurisdiction over any of them.

The Board, in its handling of the Insurance Corporation, and its Examining Division, is functioning smoothly. To make the Insurance Corporation a separate entity would serve no useful purpose, and not save one penny of appro priated money, nor any of the Insurance Corporation's own funds.

Thanking you again for your letter and your many courtesies, and with kindest regards and every good wish, I am Sincerely yours,

ALBERT THOMAS.

HOUSE OF REPRESENTATIVES,

Washington, D. C., June 19, 1956. Hon. WILLIAM L. DAWSON, Chairman, Committee on Government Operations,

House Office Building, Washington, D.O. DEAR MR. CHAIRMAN: This will acknowledge receipt of your letter of June 18 advising of hearings on Reorganization Plans Nos. 1 and 2.

I have no particular comment to make on Reorganization Plan No. 1, but I wish to advise you of my objection to Plan No. 2. I am attaching a statement explaining my position, and I should appreciate it being made a part of the record of the hearings on this matter. Thanking you for your thoughtfulness, I am Sincerely,

WAYNE N. ASPINALL.

Mr. ASPINALL. Mr. Chairman and members of the Subcommittee on Executive and Legislative Reorganization, I am pleased to have this

opportunity to make note of my opposition to Reorganization Plan No. 2 (H. Doc. 406), now being considered by this committee.

When I heard of this plan to reorganize an executive department my first thought was that I would be in favor of it. However, after receiving mail in opposition to this proposal from men in my district who know this field well, I determined to check this proposal with my good friends, William K. Divers, former Chairman of the Federal Home Loan Bank Board. I thought his long experience as Chairman, running from 1947 to 1953, would qualify him to tell me what was good and what was not good about this proposal to separate the insurance aspects away from other functions of the Home Loan Bank Board. He advised me that he did not think this proposal had much value. I suggested to him that perhaps he was still too close to this problem, but he advised me that the Federal Savings and Loan Advisory Council, a statutory body constituted by the Congress, was also opposed to this reorganization. Thus, in my own checking, I have found the participants in my district opposed; I have found the former Chairman of this agency opposed ; and I have found that the Advisory Committee is also opposed. I am less sure of who is in favor of this reorganization plan.

I must say to this committee that I have given support to virtually every reorganization proposal. I am opposing this plan solely because those who have the most intimate and continuing contact with this area advise me that it is unwise. They are agreed that it will increase rather than decrease cost. They are agreed that it will decrease rather than increase efficiency. They are agreed

that this reorganization is not so stated in the Hoover reports. They are also agreed that the present system is working fairly, efficiently, and as the Congress intended that it should work. : Accordingly I wish to urge that this committee give this reorganization plan its most careful attention. I am sure that it will be worth while, indeed, to make this study, for it should reveal the fine service that has been rendered to the Nation and to both the savers and the institutions of the Federal savings bank system by the Federal Home Loan Bank Board as W constituted-an efficient and worthwhile agency. It is my opinion that your consideration will also reveal that this reorganization plan is ill-advised, and that the reorganizing talents of the administration might well be put to better and more rewarding causes.

HOUSE OF REPRESENTATIVES,

Washington, D. C., June 20, 1955. Hon. WILLIAM L. DAWSON, Chairman, House Committee on Government Operations,

Washington, D. C. DEAR COLLEAGUE: I have recently received a letter from the Oakland Real Estate Board which is located in my district requesting that the board's views in favor of H. R. 9402 be expressed to the Committee on Government Operations.

I enclose the letter for your information. 1... Cordially yours,

JOHN J. ALLEN, Jr.

OAKLAND REAL ESTATE BOARD,

OAKLAND, CALIF., May 31, 1956. Hon. JOHN J. ALLEN, House Office Building,

Washington, D. C. MY DEAR CONGRESSMAN ALLEN : The Oakland Real Estate Board is an organization having a vital interest in serving property owners and taxpayers. We are therefore strongly opposed to needless waste of money in conducting the business of Government.

Two measures before our Congress, S. 3199 and H. R. 9402, are designed to improve governmental budgeting and accounting methods and procedures as recommended by the bipartisan Hoover Commission of experts.

Ultimate savings anticipated from adoption of such legislation are estimated as high as $4 billion per year.

The board of directors of the Oakland Real Estate Board, at their regular meeting on Tuesday, May 29, unanimously went on record favoring the passage of these bills and urging your support of them.

Will you kindly express this view to the Committee on Government Operations and advise me as to your personal views in the matter. Respectfully yours,

LOREN G. MOWREY, Executive Vice President.

[News release, June 20, 1956]

CITIZENS COMMITTEE FOR THE HOOVER REPORT

Washington, D. C. WASHINGTON. D. C., JUNE 19.-A key provision of the housing bill, now before the House of Representatives, would nullify President Eisenhower's Reorganization Plan No. 2 of 1956, Julian Myrick, acting national chairman of the Citizens Committee for the Hoover Report warned today.

“Reorganization Plan No. 2 of 1956, submitted to Congress by President Eisenhower on May 17, provides for the separation of the Federal Savings and Loan Insurance Corporation from the Federal Home Loan Bank Board as recommended by the Hoover Commission,” Mr. Myrick said in identical letters to House Speaker Sam Rayburn (Democrat, Texas) and Minority Leader Joseph W. Martin (Republican, Massachusetts). "This would give added protection to depositors in savings and loan associations insured by the Federal Savings and Loan Insurance Corporation.

"At present these two agencies are controlled by the same board of three members, but it is highly desirable and in the public interest that the management of these two agencies should be separated. Such a separation is desirable because their purposes and objectives might in some circumstances be in conflict. The objective of the Home Loan Bank Board is to promote and encourage home financing through making money available for mortgages, while the Federal Savings and Loan Insurance Corporation has for its objective the insurance of the deposits in savings and loan associations and similar institutions. Its objective is to protect the interests of the depositors. Thus its main concern must be the preservation of the assets of the savings and loan associations and other similar insured institutions.

"Obviously it is possible that conflicts might develop between an agency designed to protect the interests of the depositors in such associations and an agency concerned with the promotion of home building through making money available for mortgages. To protect adequately the interests of depositors in such lending institutions it is imperative that these two agencies of the Federal Government should be separated.

"The House Committee on Banking and Currency did not afford a hearing to supporters of Reorganization Plan No. 2 when it inserted section 705 of H. R. 11742 the provision which would knock out Reorganization Plan No. 2. It was inserted by the committee in executive session after the hearings had closed. Mounting pressure from the insured building and loan associations is responsible for its insertion. No attempt was made to have supporters of Reorganization Plan No. 2 present their point of view. This type of legislating does not increase Congress' prestige in the eyes of the public.

"The issue is posed very simply by Reorganization Plan No. 2, on which there is a privileged motion (H. Res. 541), before the House. Introduced by Congressman Fascell (Democrat, Florida) on June 14, this motion will come automatically before the House for a vote. On it, the issue is clear. The Members will have an opportunity to vote openly on the pros and cons of the plan. Section 705 is in a House bill containing many complicated sections. It will be difficult to obtain a clean-cut decision on this issue. The vote should come on Congressman Fascell's resolution.

"Plan No. 2 is based upon recommendation No. 4 of the Hoover Commission in its report on lending agencies as follows: "That no person be permitted to serve as a member of the Home Loan Bank Board and the Federal Savings and Loan Insurance Corporation at the same time.'

"This recommendation was moved in the Commission by Congressman Chet Holifield (Democrat, California).".

HOUSE OF REPRESENTATIVES,

Washington, D.O., June 20, 1956. Mr. WILLIAM L. DAWSON, Chairman, Committee on Government Operations,

1501 House Office Building, Washington, D. C. DEAR MR. CHAIRMAN: Will you be good enough to incorporate in your hearings the attached letter from Mr. Lawrence K. Vry, of Archer & Smith, Inc., Lexington, Ky.?

In addition, because of Mr. Vry's experience and standing in the community, I feel certain that the members of your committee would be interested in his thoughts. Appreciating your courtesy, Sincerely,

JOHN C. WATTS.

ARCHER & SMITH, INC.,

Lexington, Ky., June 13, 1956. Representative John C. WATTS,

House Office Building, Washington, D. C. MY DEAR REPRESENTATIVE WATTS: I am one of your constituents. I reside at 112 Edgemoor Drive, Lexington, Ky.

As one of our many millions of taxpayers, I am strongly opposed to all needless waste of my money in conducting the business of Government.

There are bills before Congress (S. 3199 and H. R. 9402) designed to improve governmental budgeting and accounting methods and procedures as recommended by the bipartisan Hoover Commission of experts.

79534-56-10

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