OF A SYSTEM OF FEDERAL HOME LOAN
BANKS

MONDAY, MARCH 21, 1932

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE OF THE COMMITTEE
ON BANKING AND CURRENCY,

Washington, D. C. e met, pursuant to adjournment, in the caucus room, ilding, at 10.30 o'clock a. m., Hon. Michael K. Reilly he subcommittee) presiding.

The committee will be in order. We will this mornBodfish, to conclude his statement commenced last

EMENT OF MORTON BODFISH-Concluded

Mr. Chairman, on Friday, on behalf of the United and Loan League, I covered some five or six points. at: (1) The bill in our judgment, with the exception ncidental perfecting amendments which we had subare urging, was in excellent form. (2) There was a art of building and loan associations to have the measa conservative, sound basis, so that you would have oblems that you have had with one of the other finan(3) We desire to emphasize the point of view exPresident in his point No. 4, in which he desired that so set up that it would encourage home financing type that was now being done by building and loan

king specifically to the bill, I do want to answer, for Mr. Williams and the inquiry that he raised at the he testimoney. He inquired as to the number of finanas in the country which would be eligible to participate and I have brought with me this morning the report roller of the Currency, in which it is indicated that 13,000 banks-State banks, savings banks, and institucharacter.

, for the benefit of the reporter, that appears on page rt of the Comptroller of the Currency, 1931. On page er of mutual savings banks summarized, with supportof which there 654. On page 143 of the report of er of the Currency there is a sumary table of building

and loan statistics, indicating that there are 11,777 building and loan associations, and it shows there distribution by States as follows:

BUILDING AND LOAN ASSOCIATIONS IN THE UNITED STATES

Statistics relative to all building and loan associations in the United States have been obtained through the courtesy of the secretary of the United States Building and Loan League, with headquarters at Cincinnati, Ohio, and are pub lished in the following statements:

Number of building and loan associations, total membership, and total assets, etc., for the year ended in 1930, by States

$25, 634, 807
3,968, 295
37,965, 108
416, 802, 996
45, 117, 257
22,752, 873
12,062,400
65, 163, 001
17,074, 400

4,457, 486
415, 190, 738
4, 001, 215
282, 837, 023
45, 081, 130
107, 956, 918
108, 611, 540
173, 887, 938
22,048, 158
502, 637, 271
147,942, 994
33, 234. 090
17,891, 290
178, 416, 924
18, 281, 801
139,870, 118
745,974
12, 196, 619
1,062,722, 473
4,064, 291
380, 170, 540
88,585, 047
10, 384, 000
1,146, 545, 352
127, 719, 842
22, 538, 321
1,203, 429, 788
25, 915, 049
4,793, 245
(2)
122, 886, 727
42,716, 239
3,883, 293
52, 837, 266
83, 864, 584
36,954,310
269, 287, 737
9,405, 286
230, 301, 417

Y. How many are there in your organization?

SH. Our organization represents over half of these asWe have some 44 State leagues affiliated with our nang and loan associations, which include in all over 6,000 1 loan associations. Practically all of the other in

What is the total of national and State banks? SH. National banks 6,805; State banks, loan and trust nd savings banks 13,728, mutual savings banks 600, and Is 284.

. About 20,000?

Mr. BODFISH. 22,071 on June 30, 1931.

Mr. REILLY. Just a moment. Are all those banks mortgage institutions?

Mr. BODFISH. No; a part of them are commercial banks which do not, and, in our judgment, should not do a mortgage loan business. I would say a majority of them numerically make some real-estate mortgages and some home loan mortgages. But it is primarily the savings banks, both the capitalized and the mutual savings banks, who make home loan mortgages, as contrasted with the larger banks who do primarily a commercial business.

There was some discussion also on Friday regarding the nature of time deposits, demand deposits, and savings deposits, and for the benefit of the record I would like to call your attention to the fact that the Comptroller of the Currency summarized these deposits in all of the banks in the United States on page 59. The pamphlet is entitled "Text of the Annual Report of the Comptroller of the Currency, December 7, 1931." His summary is as follows:

A classification of the demand and time deposits in each class of reporting banks follows:

Demand and time deposits in each class of banks, June 30, 1931

were discussing some specific amendments of the een proposed by Mr. Monks, of the Ohio Bankers which amendments have been commented upon by y, representing the National Association of Real Now, the National Association of Real Estate Boards tion are one mind as to the need for this legislation, e ends to be obtained and as to the desirability of the . We do not concur with them entirely regarding ils and suggestions that they have in mind. I think point of view is perfectly proper, as they are inters beneficiaries in increasing the supply of loanable ome-mortgage field. We are interested in that, too. in the position of being to a large extent the folks ctually to participate, put up the money, and bring into the system. So we are rather vitally interested by some of the details which I think they are not so

opped Friday I was about to discuss the management You will recall that some comments were made in the on the management of banks by Mr. Monks and here Chesney. I want to point out first that the bill now s long as the members of the system contribute only a e capital, the control remains in the hands of the through its appointment of all the directors of the policy to which we subscribe. We do not feel that d substantially control the 12 banks, or, I mean, the d not control the 12 banks unless they have made a ital contribution. Both Mr. Monks and General Macrather disturbed, or adhered to the view that there participation in the management of the 12 banks on e public. There was the feeling that additional dibe selected from other lines of endeavor rather than cing business.

The

me that both these gentlemen have overlooked a very vision in the act. The public interest is already rethe board of directors of each of the 12 banks. that two of the directors, without qualification as to , activity, business experience, or any qualification re to be appointed by the Federal board to serve on ards of the 12 banks; and, as I say, there are no qualihose two directors whom we had assumed were to public interest.

and General MacChesney proposed that three addirs be selected to represent the public point of view. o sure that that is desirable. We feel that the three re now established are designed to distribute the managethe larger institutions will have no more voice in the he affairs of each of these banks than the smaller or institutions; and for that reason the bill, in our judgvisely provides that all the members shall be divided sses, and that three directors be selected from the larger and the larger institutions are determined entirely on