Mr. FASCELL. I suppose we could get thousands more to show that the industry has not only been consulted but they are extremely concerned with the proposed plan and reorganization. Therefore, I submit, in view of all of these facts, Mr. Chairman, it would be a wiser course for Congress to disapprove the plan and allow the legislative committee with the assistance and willingness of the other agencies and the Congress to make a thorough study to determine whether or not the one single point I have heard throughout all of this testimony has any justification for making a change in the present situation and that is that there is somewhere out here a diaphanous, nebulous, inherent conflict of interest between the responsibilities of the Insurance Corporation and the Board to such an extent that we would go to the trouble of making the tremendous change contemplated by this reorganization plan. Now, from the testimony that has been presented to the committee, it is my considered judgment that there is no clear, compelling reason in line with the President's own statement at this time to set up a new agency in order to do this job, and until we have stronger reasons, more elaborate and detailed testimony which would clearly define the dangers of this conflict or the fact that it has occurred or is very likely to occur, I think that we would be making a very tragic mistake, to change and therefore I hope that this subcommittee will adopt the disapproving resolution and report it to the full committee with all possible speed. Chairman DAWSON. Any questions any of you would like to ask the author of the resolution? I am going to ask the staff to notify the members that the subcommittee will meet tomorrow morning at 10 o'clock in executive session. Gentlemen, we will stand adjourned. (Whereupon, at 5:10 p. m., the subcommittee was adjourned, to reconvene at 10 a. m., Wednesday, June 27, 1956, in executive session.) APPENDIX (Telegrams addressed to Hon. William L. Dawson follow :) NINTH FEDERAL SAVINGS & LOAN ASSOCIATION OF NEW YORK CITY, Hon. WILLIAM L. DAWSON, Chairman, House Committee on Government Operations, House Office Building, Washington, D. C.: On behalf of 42,000 members, request you disapprove separation of Insurance Corporation from Federal Home Loan Bank Board proposed by Reorganization Plan No. 2. Plan would only create an unnecessary expensive new agency unduly complicating day-to-day operations of thousands of savings and loan associations throughout country to no ultimate advantage to public. Additional objection is our business was not even consulted and issues never debated on such major change. Your help is needed to defeat plan. JULIAN R. FLEISCHMANN, President. CENTRAL FEDERAL SAVINGS & LOAN ASSOCIATION OF NASSAU COUNTY, Hon. Congressman WILLIAM L. DAWSON, House Office Building, Washington, D. C.: I wish to express opposition to Reorganization Plan No. 2 of 1956 which proposes separate and independent status for the Federal Savings and Loan Insurance Corporation and the Home Loan Bank Board. This division will result in confusion between the two agencies when the present liaison status ends if this bill is passed. Duplication in supervision of insured savings and loan associations can only result in conflicting ideas, purposes, and directives. Management of insured savings and loan associations will therefore be impaired due to the lack of agreement on policies proposed by two separate supervisory agencies. VANCE CARNAHAN, Executive Secretary. THE DALLES, OREG., June 23, 1956. Hon. WILLIAM L. DAWSON, Chairman, Subcommittee on Reorganization, House of Representatives, Washington, D. C.: As the Oregon representative of the Savings and Loan Industry, I wish to register my opposition to reorganization plan No. 2, on basis no emergency exists, this actiton is hasty, and the problem, if any, should be carefully studied by constituted authorities concerned with savings and loan operation before taking action. B. M. KEITH. BUFFALO, N. Y., June 28, 1956. WILLIAM L. DAWSON, Chairman, House Committee on Government Operations, House Office Building, Washington, D. C.: Our board of directors at a meeting June 25, 1956, expressed strong objections to the purpose and provisions reorganization plan No. 2 and respectfully ask your support in its defeat. BLACKROCK RIVERSIDE SAVINGS & LOAN ASSOCIATION. 110 (Letters addressed to Hon. John W. McCormack follow:) BOSTON FEDERAL SAVINGS & LOAN ASSOCIATION, Hon. JOHN W. MCCORMACK, Boston, Mass., June 20, 1956. MY DEAR CONGRESSMAN: Some time in the near future the Committee on Government Operations will consider resolutions to disapprove Reorganization Plan No. 2. I wish to express our opposition to this plan, and I am urging you to support the action to defeat it. Although Reorganization Plan No. 2 was a Presidential proposal, we feel that it was doubtful that the President was made aware of the implications of this proposal. We cannot find any evidence of advice having been sought from the organized savings and loan business, or any of the savings and loan supervisory officials. Congress last year made the Bank Board independent. Any changes as suggested under Reorganization Plan No. 2 should have the full study of the supervisors of the saving and loan business, as well as the industry itself; and any suggested changes should be made only after the fullest study by Congress. Reorganization Plan No. 2 creates another separate agency and the wisdom of tampering with this present successful single agency is highly questionable and dangerous. Unlike most reorganization plans proposed, this would not result in economy of operation but rather would increase the expense of the Government agencies to individual savings institutions. 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 the Congress and to the President. The Boston Federal Savings and Loan Association is interested in and will support any constructive improvement in the supervision of the savings and loan business. The United States Savings and Loan League currently is making a careful study of the Federal Home Loan Bank System with that end in view. Yours very truly, EDMOND F. DAGNINO, President. FIRST FEDERAL SAVINGS & LOAN ASSOCIATION OF LOWELL, Re Reorganization Plan No. 2 House Office Building, Washington, D. C. DEAR REPRESENTATIVE MCCORMACK: This association respectfully requests your support in opposition to the above reorganization plan. It is natural that the existence of two Boards, with overlapping responsibilities for a savings and loan operation, will result in a conflict of policy and general misunderstanding within the business as well as to both supervisory authorities, Congress and the President. The creation of another agency will, of necessity, increase the cost of operations for savings and loan associations throughout the country as well as for the Government itself. The creating of another Board with overlapping responsibilities for savings and loan operations will create controversies throughout all phases of the business to all who are involved. Many other vital points in opposition can be pointed out, but I am sure that in your studies of this particular reorganization plan, you will understand why we solicit your support in opposition to the same. Very truly yours, STANLEY A. GIFFIN, President. Hon. JOHN W. MCCORMACK, FOXBOROUGH CO-OPERATIVE, FEDERAL SAVINGS & LOAN ASSOCIATION, House Committee on Government Operations, DEAR CONGRESSMAN MCCORMACK: I am writing to register our opposition to Reorganization Plan No. 2, wherein it is proposed to divide the Federal Savings and Loan Insurance Corporation and the Federal Home Loan Bank Board into two separate agencies, and to ask that you support action to defeat it when it comes before your committee. Our association is ready to support any means that may be devised to improve the supervision of the savings and loan business, but maintain the separation into two agencies is not essential to accomplish this end. With only a few exceptions the savings and loan institutions, like ours, are in a strong position and are progressive, as signified by the percentage of home loans they have made. This has been accomplished through a single agency. The creation of still another agency means extra expense of operation, conflict of policies, and confusion within the business. Yours truly, HARRY P. BOYCE, President. BAY RIDGE SAVINGS & LOAN ASSOCIATION, Reference to Reorganization Plan No. 2. Hon. JOHN W. MCCORMACK, House of Representatives, Washington, D. C. SIR: Your cooperation is respectfully requested in the defeat of Reorganization Plan No. 2 for the following reasons: 1. The probable necessity of filing separate reports to both the Federal Savings and Loan Insurance Corporation and the Home Loan Bank Board. 2. Submission of matters requiring approval of both agencies, first one and then the other. 3. Added examination costs. 4. Effect of reorganization plan will result in chaos through conflicting rules and regulations. 5. Expensive duplication of examinations. 6. The present single agency system to handle savings and loan affairs has been developed over a period of 25 years and has produced a strong and progressive nationwide system of savings institutions which now finance a substantial part of our Nations' homes. 7. We question the wisdom of tampering with the present single agency system as being questionable. 8. The proposed reorganization plan would not result in economy of operation and would increase the cost of operations to individual savings institutions. 9. Two boards with overlapping responsibilities for savings and loan operations might well result in conflicts of policy and added confusion. 10. We are ready to support any constructive improvement in supervision of the savings and loan business. The United States Savings and Loan League is currently making a careful study of the Federal Home Loan Bank System with that end in view. May we count on your support in the defeat of the proposed Reorganization Plan No. 2 about to be submitted to you? Respectfully, HENRY G. STEIN, President. (Statements, with attachments, received by the subcommittee follow :) STATEMENT OF HON. THOMAS J. DODD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CONNECTICUT Mr. Chairman, and gentlemen of the subcommittee, I am glad of this opportunity to make my position on Reorganization Plan No. 2 a part of the record of these important hearings. The basic purpose of this plan, submitted by the President on May 17, is to separate the Federal Savings and Loan Insurance Corporation from the juris-diction of the Federal Home Loan Bank Board, and to create a new board for the Insurance Corporation, making no provision for bipartisan representation. I am opposed to Reorganization Plan No. 2 because there is no need for the separation of the Federal Savings and Loan Insurance Corporation from the jurisdiction of the Federal Home Loan Bank Board. I am opposed to this reorganization plan because I think it is unnecessary and unwise. The savings and loan business has approximately $40 billion in assets and is one of the most vital instruments in maintaining a stable economy. It is nationwide in scope, and its operations affect millions of Americans. I am convinced that any plan to make drastic changes in the administration of this important segment of our economy should receive the most critical scrutiny of the Congress.. As I understand the practical effects of Reorganization Plan No. 2, it would. divorce the Loan Insurance Corporation from the Home Loan Bank Board, and create an additional supervisory agency with the corollary of needless cost to the Government, the Federal Home Loan Bank Board, and numerous member institutions. A number of leading members of the savings and loan business of my own. State of Connecticut have stated that the implementation of this plan might be seriously detrimental to the economy of our country and could have an adverse effect upon the thousands of institutions insured under the Federal Savings and Loan Insurance Corporation. It has been called to my attention that Reorganization Plan No. 2 was submitted without the prior knowledge of the leaders in the savings and home loan field, and that those who would be most directly concerned had no opportunity to register dissenting views. The Federal Savings and Loan Advisory Council,. an organization created by Congress to meet with the Federal Home Loan Bank Board in an advisory capacity, has gone on record in opposition to the enactment of this plan. It is their view that the plan would not be beneficial to the millions of individuals who have savings accounts or mortgage loans with the various institutions. The separation of the Federal Savings and Loan Insurance Corporation from the Board merely creates another independent agency reporting to the Congress and to the executive branch, even though the Federal Home Loan Bank Board was reestablished by Congress last year as the agency responsible for matters relative to the country's 4,200 thrift and home-financing institutions. I have been given to understand that Reorganization Plan No. 2 was submitted without consideration by the Banking and Currency Committees of either body. In addition, the opinions of responsible leaders in this field were not solicited. Also, it appears doubtful that any operating economies will be realized by the Government through the adoption of this plan. At the present time all expenses of both agencies are underwritten by member institutions-not by the Federal Government. STATEMENT OF HON. HARRISON A. WILLIAMS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY Mr. Chairman, several constituents of mine who are officers of savings and loan associations have registered with me their opposition to Reorganization Plan No. 2. They point out that the plan would result in an overlapping of functions and confusion and duplication of effort in the supervision of member associations. I would like to call to the attention of the committee the attached letters which seem to me to summarize very well prevailing objections to adoption of Reorganization Plan No. 2. I appreciate this opportunity to make these views known to the committee. NEW JERSEY SAVINGS & LOAN LEAGUE, Re President's Reorganization Plan No. 2. Member of Congress, House Office Building, Washington, D. C. DEAR CONGRESSMAN WILLIAMS: The above proposed reorganization plan materially affects a large segment of our membership, and we would like to record |