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administration which we would like to set forth in the bill. It is going to be incumbent upon us to sit down and have you draft it back to where it was. We would rather take the original draft and cut it down than to take an outline and build it up.

Mr. ECCLES. It would seem to me that this bill, together with the original bill, could be made available to whatever subcommittee is working on it.

Mr. WOLCOTT. We have not a subcommittee; the full committee is working on it. For my own self, I have a lot of work on my desk, and I do not want to be spending my time just guessing what might be in the bill when it is passed.

The CHAIRMAN. Are there any more questions?

Mr. J. M. DAIGER. Mr. Miller, who was the principal adviser of the housing committee on the matters dealt with in section 5 and in title II-they are the sections dealing with the mortgage insurance and the National Mortgage Association will be available to the committee in the morning, and Mr. Russell, who was the principal adviser on title III will also be available to the committee in the morning.

The CHAIRMAN. Mr. Eccles, we thank you very much. We will now adjourn until 10:30 in the morning.

(Thereupon, at 5 p.m., an adjournment was taken until tomorrow, May 30, 1934, at 10:30 a.m.)

NATIONAL HOUSING ACT

WEDNESDAY, MAY 30, 1934

HOUSE OF REPRESENTATIVES,
COMMITTEE ON BANKING AND CURRENCY,

Washington, D.C.
The committee met at 10:30 a.m., Hon. Henry B. Steagall (chair-
man) presiding.
STATEMENT OF CHARLES A. MILLER, PRESIDENT, SAVINGS

BANKS' TRUST CO., NEW YORK CITY

The CHAIRMAN. Mr. Miller, I presume you would like to make a statement without interruption.

Mr. MILLER. I do not object to interruptions.

Mr. REILLY. Mr. Chairman, we have had a general discussion of this bill by almost all of the witnesses, and I think we ought to get down to a discussion of some of the questions.

The CHAIRMAN. Mr. Miller will be glad to submit to questions at any time, and I will now recognize Mr. Reilly.

Mr. REILLY. Mr. Miller, what is your business?

Mr. MILLER. I am president of the Savings Banks' Trust Co., of New York.

Mr. Reilly. Was it your bank that drew up the plan?

Mr. MILLER. No; it was only as the plan was submitted to a number of savings banks. Mr. Walker and Mr. Riefler asked to appear with a group of savings bankers in my office, and, after hearing the plan, I approved it. I had nothing to do with the actual drafting of the legislation. I heard the plan explained, and I gave my blessings to the plan.

Mr. CAVICCHIA. You say you gave your blessing to the plan.
Mr. MILLER. Yes.
Mr. CAVICCHIA. Do you represent the savings banks?

Mr. MILLER. I am president of the Savings Banks' Trust Co., and am trustee for a small savings bank. To that extent I represent savings banks.

Mr. REILLY. Are you actively engaged in the banking business?

Mr. MILLER. I am actively engaged as president of the Savings Banks Trust Co., which has no customers, no depositors, and makes no loans except to savings banks. Our stockholders are savings banks.

Mr. Reilly. Does your bank engage in home-mortgage operations?

Mr. MILLER. The savings bank does, but not the trust company. The trust company is a liquidating institution.

Mr. REILLY. Do you know anything particularly about the operation of savings banks in that field?

Mr. MILLER. Yes; I was a savings bank president for 30 years, or so, before I went into the R.F.C.

Mr. REILLY. In making loans, would you like to put it on new construction only?

Mr. MILLER. The particular savings bank that I represent has been putting out some new money. We did that through the entire period of the panic. So far as I know, it is the only bank that has consistently made loans through the entire depression period. The savings banks have not, I intended to say, a large percentage of their whole surplus funds out in home-mortgage investments. As for the reason, I will speak of it now, or at a later time.

We are limited in New York State to 70 percent of our assets in mortgage investments. We had, as I remember it, about 63 percent of the assets in the savings-bank system in mortgage loan's when the panic came upon us. When the panic came, there were withdrawals and a reduction in those investments. Due to the withdrawal of deposits, partial liquidation, etc., the mortgage investments rose in some cases above the legal limit. Of course, those banks could not make further loans until there was an increase of their deposits, and during that time the mortgage percentage went down. Many savings banks would make loans, and some are making loans now. There is a considerable number of them making loans in considerable amounts; but they are, of course, somewhat limited by the difficulties of their present operations. It was also due to the fact that under the law of the State of New York amortization cannot be forced. It is purely voluntary, although it was provided otherwise in the original instruments. The act of the legislation provided that you could not enforce the foreclosure of a mortgage, and our amortization plan is held rather in abeyance. The amortization plan applies largely in the rural upstate section, and to some extent in New York City. If some institutions have not adopted the amortization plan, in my judgment, they should. However, that distinction must be borne in mind, because more than half of the savings banks have not operated on the amortization plan in the matter of mortgage loans.

Mr. REILLY. What particular feature of this bill are you interested in?

Mr. MILLER. I am interested in sections 4, 5, and 6.
Mr. REILLY. What part of section 5 are you interested in?

Mr. MILLER. I am interested in section 5 primarily, because I am interested in the rehabilitation of the country. Please understand that I am not speaking now for the savings banks, but I am speaking of that feature because I am primarily interested in the rehabilitation of the country, and because I believe, generally speaking, that that is one of the necessary things to work out the rehabilitation of the country. Of course, every savings bank is interested in that also. Every savings bank is interested in bringing back realestate mortgage money into the market and in rehabilitating real estate. I am not speaking on that from any selfish interest, because

I have no axe to grind on that line. I am purely interested in seeing the country come back in some sort of shape.

Mr. Cross. You are interested in bringing back a good price for house and real estate?

Mr. MILLER. Yes.

Mr. Cross. Do you think you will be able to do that until you restore the price level and bring back a normal price for all products

Mr. MILLER. I think all of that is a part of the same movement. Of course, I would like to see the general price level brought back, and, as I understand it, that is the aim of the present administration. I have been somewhat familiar with that. I am a lifelong Republican, but so far as I understand it, the present administration is operating directly along that line. So far as it is successful in that, the present administration has my blessing.

Mr. Cross. It looks like you will become a Christian.

Mr. MILLER. When I was in Washington for 9 months I did what in me lay in that general direction.

Mr. Cross. But you do not expect the price of homes to come back until the prices of factory products come back, so that the employees of the factories can receive good wages. The factory must get a fair price for its product to enable it to employ men and pay them a decent wage. That must be done before you can bring back the price level for other property.

Mr. MILLER. As I understand it, all of those things will have to operate together as a part of the general plan. If I understand the Administration's plan, and I think I do, all of this is a part of the general plan. I am deeply interested in it. I became intensely interested, when I was in Washington, in the problem of the farmers of the South and the West. I think I had rather unusual opportunities to know about that problem, and I have been delighted because it seems to me that the present plan is being operated to take care of that situation. I am also interested in taking care of the home owner and factory worker, but, as I have said, all those things must be worked out together. You can give employment as prices go up, and I think that will come gradually. Now, one of the great things that we will have to do in order to make prices go up, it seems to me, is to bring back private capital into operation, in the normal course of business. This is one important step in that direction. The consumers' goods industries have been fairly successfully taken care of, and unemployment has gone down very much in those industries. I believe that things are getting to be all right in the consumers' goods part of the game. Now, the building industry, which will be affected by this bill, lags very much behind any others, so far as I know. It is the part of the capital goods industry which has lagged furthest behind.

It seems to me that this bill has in it elements which will result in a great deal of reemployment of people in the building trades and in the materials that go into the building trades. This will be one of the general results, along with other things, in the rise of prices, in increased employment, and in bringing things back to a normal state. Of course, there is not any one measure that will accomplish this whole thing. You cannot take a single measure looking to a rise of prices and say that it will do the whole thing.

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