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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 inde pendent 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 apprecia hearing from you if there is some phase of this that we have overlooked. Very truly yours,

GUNTHER. J. SHIRLEY, President.

UNION FEDERAL SAVINGS AND LOAN ASSOCIATION,

Baton Rouge, La., June 19, 1956. Hon. WILLIAM L. DAWSON,

House of Representatives, Washington, D. O. 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,

Ravenswood, W. Va., June 19, 1956. Hon. WILLIAM L. DAWSON, House Committee on Government Operations,

House of Representatives, Washington, D. O. DEAR MR. DAWBON: 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, 1 Hon. WILLIAM L. DAWSON, Chairman, House Committee on Government Operations,

Senate Office Building, Washington, D. O. 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,

Fargo, N. Dak., June 19, 1956. Hon. WILLIAM L. DAWSON, Chairman, House Committee on Government Operations,

House Office Building, Washington, D.C. 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. Hon. DWIGHT D. EISENHOWER, 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,

New York, N. Y., June 19, 1956. Hon. WILLIAM L. Dawson, Chairman, House Committee on Government Operations,

House Office Building, Washington, D. C. 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 Loạn 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.

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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 Sav. ings 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 savings 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

Resolted, That the president of the league be directed to transmit copies of this resolution 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, Tea., 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 established 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 Toan business, and would create an incentive to control salaries, diviđends, 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. SHIERLOW, President.

DALHART FEDERAL SAVINGS & LOAN ASSOCIATION,

Dalhart, Tex., June 19, 1956.

Hon. WILLIAM L. DAWSON,
Chairman, House Committee on Government Operations,

House Office Building, Washington, D. O. 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 say. 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. O. 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

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