of investors in local home-financing institutions of the savings and loan type. The safety of investment provided by such insurance also contributes to the national economy by increasing the supply of capital for financing the ownership of homes.

Insurance is mandatory for Federal savings and loan associations; Statechartered institutions of the savings, building and loan type may become insured upon application and approval. By law the Insurance Corporation's capital, in the amount of $100,000,000, was obtained by sale of its stock to the Home Owners' Loan Corporation. Funds for operating expenses and reserves are obtained from premiums paid by insured institutions, earnings from investments, and admission fees paid by newly insured associations.

Each holder of a withdrawable (repurchasable) share account, deposit account, or investment certificate in an institution insured by the Corporation is insured against loss up to the amount of his investment and credited earnings not in excess of $5,000. Each insured institution pays an annual premium charge equivalent to one-eighth of 1 percent of the total amount of all accounts of its insured members, plus any creditor obligations. When the reserve fund of the Corporation equals 5 percent of all insured accounts and creditor obligations of all insured institutions the regular premiums will be suspended unless and until the reserve fund falls below 5 percent. Institutions applying for insurance are required to pay, upon acceptance, an admission fee, based on the amount of the Corporation's reserves.

Insurance may be terminated by the Insurance Corporation for violation by an insured institution of any law applicable to insurance of accounts, or the regulations of or agreements with the Corporation, provided for in the statutes. Insurance of accounts can be voluntarily terminated by any insured institution, except a federally chartered savings and loan association, upon adequate notice of its intention to the Corporation and to its members.

In order to prevent a default in an insured institution or in order to restore an insured institution in default to normal operation, the Corporation is authorized, in its discretion and within prescribed limits, to make loans to, purchase the assets of, or make contributions to the insured institution.

In the event an insured institution is taken over for liquidation by properly constituted authority, the Corporation is required to make available to the holder of an insured account either a new insured account of equal amount in a normally operating insured institution, or, at the option of the insured investor, 10 percent of his account in cash and the remainder in non-interest-bearing debentures of the Corporation, payable one half within 1 year and the other half within 3 years from the date the insured institution was taken over for liquidation. The total amount of insurance payable to any member or investor in any one insured institution, however, may not exceed $5,000. If a federally chartered savings and loan association is taken over for liquidation, the Insurance Corporation must serve as receiver. In the event the institution to be liquidated is State chartered, the services of the Insurance Corporation as conservator, receiver, or other legal custodian are tendered to the State.

As of February 29, 1948, there were 2,541 insured savings and loan associations with assets totaling approximately $8,659,000,000.

HOME OWNERS' LOAN CORPORATION

The Home Owners' Loan Corporation was created by the Home Owners' Loan Act of 1933, which has been amended by acts approved June 27, 1934 (the National Housing Act), April 27, 1934, May 28, 1935, August 11, 1939, and June 30, 1947. Provided with $200,000,000 initial capital, the Corporation was authorized to issue United States guaranteed bonds in an aggregate amount not to exceed $4,750,000,000. The total issued was $3,489,453,550, of which $421,340,750 was outstanding on February 29, 1948.

The general purpose of the HOLC was to refinance home mortgages of distressed home owners by exchanging its bonds for such mortgages, which were then taken over by the Corporation as long-term, monthly repayment loans. Loans could be made only to those who were unable to procure needed financing through normal channels. Loans were made on the security of dwellings for not more than four families valued at not more than $20,000. In accordance with law, the Corporation ceased lending on June 12, 1936, after making 1,017,821 loans to a total of $3,093,000,000.

Since then the Corporation has been engaged in the collection of its loans and the orderly liquidation of the houses it was forced to acquire. Up to February 29, 1948, total loans, subsequent advances, and other investments of the Corpora

tion in its loans, sales contracts, and properties reached a cumulative total of $3,494,000,000. On the same date $3,029,000,000, or 86.7 percent of this amount, had been liquidated.

Under the original Home Owners' Loan Act, loans of the Corporation were written for a term not to exceed 15 years, with interest at 5 percent. On August 11, 1939, the act was amended to permit the Corporation to extend its loans to a maximum of 25 years where it considers that the borrower's circumstances and the condition of the security justify such an extension.

In 1939 the Corporation made provision to accept, until further notice, interest at the rate of 42 percent per annum on all payments due on and after October 16, 1939, on the indebtedness of home owners to the Corporation arising from any loan, advance, or sale of property. On all purchase-money obligations taken on or after October 1, 1939, in connection with the sale of real property by the Corporation, interest is to be charged at the 41⁄2 percent rate until otherwise directed by the Home Loan Bank Board.

In addition, the Corporation is authorized to purchase obligations of the Federal home loan banks, shares of federally chartered savings and loan associations, and shares and other securities of other qualified applying institutions which are members of a Federal home loan bank or whose accounts are insured by the Federal Savings and Loan Insurance Corporation, up to a total of $300,000,000. An aggregate of $223,856,710 was so invested in shares of associations (chiefly from 1936 to 1938); $6,704,650 remained outstanding on February 29, 1948. An additional $100,000,000 of the Corporation's authorized bond issue has been used for the purchase of the entire capital stock of the Federal Savings and Loan Insurance Corporation. Although the amount which the Corporation may spend for administrative expenditures is fixed pursuant to an authorization by Congress, all the money expended by the Corporation is paid out of its funds and in no part from regular governmental funds.

FEDERAL HOUSING ADMINISTRATION

Established in June 1934, under the National Housing Act, the Federal Housing Administration was directed by Congress "to encourage improvement in housing standards and conditions, to create a sound mortgage market, and to provide a system of mutual mortgage insurance."

The FHA lends no money and builds no houses. Its function is to insure approved private financial institutions against loss on loans made for the construction, purchase, repair, and improvement of houses where FHA standards and conditions are met. In addition, FHA is authorized to insure mortgages on large-scale rental projects.

Chief innovation of the FHA insured mortgage system was the single, longterm mortgage, repayable monthly over a period of years. Payments include reduction of principal, interest at not more than 41⁄2 percent on reducing balances, mortgage insurance premium at one-half of 1 percent on reducing balances, taxes, fire and hazard insurance.

The National Housing Act provides several loan insurance programs under titles, I, II, and VI.

Insurance coverage under title I amounts to 10 percent of the aggregate loans made by qualified lenders for property improvements, alterations, and repairs. Most such loans are limited to a maximum of $2,500, repayable in monthly installments. An annual insurance premium of three-fourths of 1 percent is charged and the rate of discount, covering all charges, may not exceed the equivalent of $5 per $100 on a 1-year note.

Another class of title I loans may be used to finance new home construction. The maximum amount of these loans is $3,000, the maximum term 20 years and 5 months, the maximum interest rate 42 percent per annum on outstanding balances, and the FHA insurance premium, 1⁄2 of 1 percent of the principal amount. Total liability which may be outstanding at any time under present provisions of title I is $165,000,000, and authority to insure loans under the title runs to June 30, 1949. Through December 31, 1947, insuring operations under title I involved a total of 7,375,844 loans, with net proceeds of $2,716,937,804. Gross claims paid through that same date amounted to 2.22 percent of the net proceeds of the loans, while net claims after collections and repossessions of security amounted to 1.04 percent.

Normally, principal FHA operations are under section 203 of title II, which provides for insurance of mortgage loans up to $16,000 and for monthly amortization periods up to 20 to 25 years on one-to-four family dwellings. Such loans may cover either new or existing houses. Insured loans on existing homes may

not exceed 80 percent of the value of the property, land and building, as appraised by FHA. Where the mortgage loans are for not more than $5,400 and cover new, single-family houses built for owner-occupancy and under FHA inspection, the insured mortgage may be for 90 percent of the appraised value and may run for 25 years. On new owner-occupied homes valued at not more than $10,000, the FHA may insure a mortgage covering 90 percent of the first $6,000 and 80 percent of the remainder, up to a maximum mortgage of $8,600. The maximum term of repayment of such loans is 20 years.

Through December 31, 1947, a total of 1,271,785 mortgages on one- to fourfamily dwellings had been insured under section 203 of title II for a total of $5,747,711,735. Of this amount $2,770,389,066 had been terminated and an additional $539,632,506 of the original face amount of insured mortgages outstanding was estimated to have been amortized.

Provision is made under section 207 for the insurance of mortgages up to $5,000,000 on apartment houses, or groups of single or multiple-family houses. Such mortgages are limited to 80 percent of the estimated value of the property when the proposed improvements are completed, but in no event may a mortgage insured under this section exceed the estimated cost of completed physical improvements. However, the insurance may cover advances made during the course of construction. Strict regulation of the mortgagor is provided for under section 207. Insurance has been issued for 379 mortgages, amounting to $160,972,004. In the 359 projects built under this program, 37,964 units have been provided.

The total amount of principal obligations of all mortgages insured under title II outstanding at any one time may not exceed $4,000,000,000, except that this maximum may be increased to $5,000,000,000 by Presidential action.

During the period of housing shortage FHA operations under title II are limited largely to insuring mortgages on existing houses. New construction during this period is being provided under title VI. On all title VI mortgages the maximum interest rate is 4 percent and the mortgage insurance premium one-half of 1 percent, both on reducing balances.

Congress added title VI to the National Housing Act in March 1941. This title authorized the FHA to insure wartime and postwar risks undertaken by private lenders and builders which might not have been assumed under normal peacetime operations. Whereas war workers were formerly given occupancy priority, veterans of World War II now have preference in buying and renting housing accommodations made available under title VI. The authority to insure under this title is of limited duration and maximum mortgage amounts were based on the Commissioner's estimate of necessary current cost. By act approved March 31, 1948, section 603 of title VI was amended so that maximum mortgage amounts with respect to applications received after such date are based on the Commissioner's estimate of "value."

Mortgages insured under section 603 of title VI are limited to a maximum of $5,400 on a single-family dwelling, $7,500 on a two-family, $9,500 on a threefamily, and $12,000 on a four-family dwelling. However, in areas where it is not feasible to construct homes under these maximum limitations without sacrificing sound standards of construction, design, or livability, the Commissioner may increase mortgage maximums up to $8,100 on a single-family home, $12,500 on a two-family, $15,750 on a three-family, and $18,000 on a four-family home.

As of December 31, 1947, a total of 461,896 dwelling units had been financed under section 603 with mortgages totaling $2,067,896,242.

Mortgages on large-scale housing projects also are insured under section 608 of title VI. These may not exceed $5,000,000 and 90 percent of the necessary current cost of the completed project, including the land and proposed physical improvements but exclusive of off-site public utilities and streets and organization and legal expenses.

The mortgagor must be approved by the FHA Commissioner and may be regulated as to rents or sales, charges, capital structure, and methods of operation. As of December 31, 1947, 1,496 mortgages totaling $534,838,928 on large-scale housing projects, which provided 84,865 new dwelling units, had been insured under section 608. The maximum interest rate on section 608 mortgages is 4 percent and the mortgage insurance rate is one-half of 1 percent, both on reducing balances. Two new sections have been added to title VI: Section 609 authorizes the insurance of short-term loans made by private financial institutions to finance the manufacture of housing. Section 610 authorizes the insurance of mortgages executed in connection with the sale by the Government of public war housing to individuals or corporations. As of December 31, 1947, there had been no contracts

for insurance executed under section 609. Pursuant to section 610, four mortgages, totaling $21,100, had been insured under section 603.

FHA is self-sustaining and for the past 7 fiscal years has paid all operating expenses out of income derived chiefly from premiums and fees. In addition, net resources of nearly $163,000,000 have been accumulated in its insuring funds for payment of future expenses, losses, and the payment of dividends with respect to loans insured under section 203 of title II, and placed in group accounts which develop credit balances at time of prepayment of mortgage or upon termination of the group account.

Gross income during the fiscal year 1947 under all insuring operations was greater than in any previous year and amounted to $42,639,631. Expenses of administering all titles and sections of the act during the period amounted to $16,030,982, leaving an excess of income of $26,608,649 to be added to the various insurance funds.

PUBLIC HOUSING ADMINISTRATION

The Public Housing Administration was established July 27, 1947, under the provisions of the President's Reorganization Plan No. 3. It assumed the responsibilities and functions previously administered by the Federal Public Housing Authority.

The PHA has four principal areas of responsibility, the last three of which are carried out under policies determined by the HHFA Administrator.

(1) The administration of the low-rent housing program under the United States Housing Act of 1937;

(2) The provision of temporary emergency housing for veterans, by relocating and converting surplus war housing and military structures;

(3) The management of public war housing during the period of reconversion and demobilization according preference to distressed families of veterans and servicemen;

(4) The disposal of federally owned war housing determined to be surplus to the above needs.

The basic peacetime program administered by the PHA is the provision of Federal aid to local authorities to make available low-rent housing for families of low income, under the United States Housing Act. Before the problems of the defense and war periods interrupted construction of low-rent housing, local housing authorities in 173 communities built 334 projects containing 105,600 units for low-income families. Such housing has been predominantly urban, but a small number of farm housing units were constructed under a rural program started shortly before the war.

To keep rents within the means of low-income families, the PHA makes an annual contribution, or subsidy amounting to the difference between income and necessary expenses, including capital retirement. For the fiscal year 1947 these payments totaled $5,666,629. Through June 30, 1947, these Federal subsidy payments totaled $56,211,611. In addition, the local community is required to make an annual contribution equivalent to at least one-fifth of the Federal contribution. The communities commonly make this contribution by exempting the projects from State and local taxes.

As of June 30, 1947, the total housing built or awaiting construction under the United States Housing Act comprised 216,779 dwellings in 801 projects. This included some 52,000 units under Public Law 671, which authorized the wartime use of low-rent housing funds for war-housing construction. In accordance with the law, most of the Public Law 671 projects were transferred to low-rent status after Presidential findings that they were no longer needed to serve war housing purposes. Projects with about 3,000 units remained in war use on June 30. Some 21,000 low-rent units scheduled in areas not requiring them for war housing were deferred in order to save critical materials and labor for the war program.

The low-rent housing program also includes 50 projects (22,000 units), originally built by PWA, and transferred to PHA administration.

Title V of the Lanham Act (as amended by the Mead-Lanham resolution of December 1945 and March 1946) authorized appropriations of $445,627,000 to pay certain costs of relocating and remodeling surplus temporary structures to provide emergency homes for veterans and their families. Under the program,

the local community pays for site acquisition and preparation, including on-site utilities, while the Federal Government pays the cost of demounting, transportation, reerection, and connecting to site utility systems. The act also authorized additional surplus temporary structures to be transferred to local bodies

for remodeling and conversion at their expense. As of June 30, 1947, some 173,000 accommodations to be completed with the use of Federal funds had been allocated of which 168,000 were completed and 5,000 were under construction. In June 1947, the Congress appropriated $35,500,000 to permit the completion of some 8,000 additional units on which construction had been suspended due to exhaustion of funds. Including those accommodations on which local bodies and schools are bearing all conversion expenses, the temporary re-use program is expected to provide veterans with more than a quarter of a million dwelling accommodations. In addition to veterans accommodated by the relocation of surplus facilities, at the end of June 1947 about 300,000 veterans' and servicemen's families were living in public housing not relocated or remodeled under the reuse program. Such families accounted for over 50 percent of all occupied war and low-rent housing units in programs administered by the PHA. Veterans receive preference in the turnover of all units in such projects, and consequently the percentage of veteran occupancy continues to rise.

The major wartime function of PHA was to provide publicly financed housing for in-migrant war workers and their families in areas where a lack of housing was handicapping or threatened to handicap war production. The PHA was responsible for the construction and management of about four-fifths of the total so provided, the remainder being provided principally by the War and Navy Departments and the United States Maritime Commission.

Some 850,000 public accommodations were made available for in-migrant war workers and their families. This figure includes accommodations supplied by re-use of trailers and temporary or demountable units that were moved from one location to another.

The PHA on June 30, 1947, had some 410,000 units in the public war-housing (Lanham constructed) program to dispose of when surplus to veterans and other demobilization needs. These include:

About 200,000 temporary family units, 32,000 dormitory units and 14,000 stop gap units, including portable shelter units unsuitable for long-term use as housing. These must be removed by July 25, 1949, except where the Administrator of the Housing and Home Finance Agency, in consultations with communities determines that there is a continued need in connection with orderly demobilization. About 164,000 permanent family units, including 94,000 of standard construction, and 70,000 demountables, which will be sold to veterans, occupants and other private purchasers unless sold or transferred to other Federal agencies or State and local governments.

In addition, there remained some 38,000 family and dormitory units converted from existing structures during the war to house essential war workers. These are mostly under seven-year leases, and will be returned to private owners at the expiration of the lease term or sooner if the owners purchase the unexpired lease term.

PHA also has disposition responsibility for 13 subsistence homesteads projects, which were transferred from the Farm Security Administration and 3 Greenbelt towns, which were transferred to the PHA in 1942.

INDIAN CLAIMS COMMISSION

Creation and purpose.—The Indian Claims Commission was created by act of August 13, 1946 (Public Law 726, 79th Cong., 2d sess.), to hear and determine claims against the United States on behalf of any Indian tribe, band, or other identifiable group of American Indians residing within the territorial limits of the United States or Alaska. The Commission consists of a Chief Commissioner and two Associate Commissioners, appointed by the President by and with the advice and consent of the Senate.

INTER-AMERICAN DEFENSE BOARD

The Inter-American Defense Board is a permanently constituted organization composed of military, naval, and aviation technical delegates appointed by each of the governments of the 21 American Republics. It was established in accordance with Resolution XXXIX of the Meeting of Foreign Ministers at Rio de Janeiro in January 1942. The Board, which is an autonomous international organization under the auspices of the Pan American Union, meets regularly in the city of Washington.