President Hoover Signs Home Loan Bank Bill

The Home Loan Bank Bill, the last measure recommended by the President to Congress in the economic reconstru'ction program and designed to aid employment by supplying credit for home construction, was signed by President Hoover on luly 22.

Under the home loan act, a system of from 8 to 12 loan bank districts will be created under the supervision of a board of five to be named by the President. The board will designate one,city in each district as the site of a home loan bank whi,ch will be under the direction of I I directors. Each bank will have a minimum capitalization of $5,000,00O, with a total subs'cription by the United States of $125,000,000 held ready by the Reconstruction Finance Corporation.

Building and loan associations, savings banks, insurance companies, savings and loan associations, homestead associations, and cooperative banks are to be eligible for membership in the system. Provisions are also made which permit organizations to organize under certain state laws to become non-member borrowers for a period of 42 months pending enactment of amendments that will permit them to join. The banks will not advance nore than 6O per cent of the unpaid principal of a home loan mortgage nor more than 40 per cent of the appraised value of property securing the loan. Loans running longer than 15 years will not be eligible for dis,count. A $20,000 limit of valuation is imposed.

The law carries with it the Borah-Glass rider in the fonn of an authorization for 'currency inflation to the extent of $1,000,000,000. In announcing his approval of the bill, President lfoover said that he had been advised by Secretary Mills of the Treasury that in the practical working of the Borah-Glass rider to the legislation there will be no inflation of the ,currency.

In signing the bill, the President issued the following statement:

"I have today signed the home loan bank bill. This institution has been created on the general lines advocated by me in a statement to the press on November 13, last. It is the outcome of the national conference on home olvnership, which represented every part of the country.

"Its purpose is to establish a series of discount banks for home mortgages, performing a function for home owners somewhat similar to that performed in the commercial field by the Federal Reserve banks through their discount facilities.

"There are to be eight to twelve such banks established in difierent parts of the couutry with a total capital of $125,000,000, to be initially subscribed by the Reconstruction Finance Corporation.

"Building and loan associations, savings banks, insurance companies, etc., are to be eligible for membership in the system. Member institutions are required to subscribe for stock of the Home Loan banks and to absorb gradually the capital and they may borrow from the banks upon their notes to be secured bv the collateral of sound home mortgages. to be paid by be owned and

"The Home Loan banks are in turn to obtain the resources required by them through the issue of debentures and notes. These notes have back of them the obligation of the members, the mortgages pledged as securities of strch obligations and the capital of the Home Loan banks themselves. The debentures and notes thus have a triple security.

"The creation of these institutions does not involve the government in business except in the initial work of the Reconstruction Corporation, and the setting up of the board in Washington to determine standards of practice.

"The cost of this board in Washington the Home Loan banks and the banks are run by, their members.

"In effect, it is using the good offices of the government and the Reconstruction Finance Corporation to set up cooperative action among these member institutions to mobilize their credit and resources. There are several thousand institutions eligible for membership. The purpose of the system is both to meet the present emergency and to build up home ownership on more favorable terms than exist today.

"The immediate credit situation has for the time being in many parts of the country restricted the activities of building and loan associations, savings banks and other institutions making loans for home purposes, in su'ch fashion that they are not only unable to extend credit for the acquirement of new homes but in thousands of instances they have lteen unable to renew existing mortgages with resultant foreclosures and great hardships.

'"A considerable part of our unemployment is due to stagnation in residential construction, There has been. overbuilding in certain localities in boom years but there has been far less than normal construction of new homes for three years in pace with the increase of population and there is thus a shortage which, while now obscured by present huddling, will become evident with the first stage of recovery.

"Nearly 200,000 new homes are erected annually in normal times which with initial furnishing contribute $2,000,000,000 to construction and other industries.

"A survey by the DePartment of there are localities in which there demand for homes amounting from

Commerce shows that is today an immediate $300,000,000 to $500,-

000,000 which could be undertaken at once if financing were available. Thus the institution should serve to immediately increase employment.

"In the long view we need at all times to encourage home ownership and for such encouragement it must be possible for home owners to obtain long-term loans payable in installments.

"These institutions should provide the method for bringing into continuous and steady action the great homeloaning asso'ciations which is so greatly restri,cted due to present pressures.

"There was attached to the bill by the Congress a rider for the limited extension of the old national bank currency. I am advised by the Treasury that in the practical working of this provision it will not result in inflation.

"The Comptroller of the Currency informs me that:

"'This section of the bill runs counter to the general plan established through the Federal Reserve Act intended gradually to do away with an inflexible bond secured currency and represents a backward step in currency and banking legislation but in view of the fact that the provisions are limited to a three-year period I do not feel justified in recommending that the bill be vetoed, more especially as it is a rider to an important and constructive piece of legislation to which it bears no relation.'

"I do not, therefore, feel that the amendment is su,ch as should warrant refusal to approval of the measure which means so much to hundreds of thousands of home owners, is such a contribution to their relief; such a contribution to establishment of home ownership; and such an aid to immediate increase of employment."

Soltwood lmports lor M.y

According to figures supplied by the Section of Customs Statistics of the Department of Commerce to the Lumber Division, softwood imports by species and countries during May, 1932, were as follows:

Softwood boards, planks and deals in the rough or planed and dressed on one side, free, in board feet:-from Canada, of. fir 2,148,000; of hemlock 164,000; of spruce 11,033,00O; of pine 4,626,W. From Mexico, of fir 41,000. Total imports of this class from Canada during May amounted to 17,971,@O feet.

Softwood sarved boards, planks, deals and sawed timber, n.e.s., dutiable, in board feet:-from Canada, of. fir 4,447,000; of hemlock 390,000; of spruce 8,449,00O; of pine 4,081,000. From Germany, of spruce 195,000. From Nicaragua, of pine 24,00. From Mexico, of pine 550,000. Total imports of this class from Canada during May amounted to 17,367,ffiO f.eet.

Other species of softwood sawn boards, planks, deals and sawed timber, free, in board feet:-from Canada 1,689,00O feet.

New Office Building Completed

The J. M. Derr Lumber Co., at Elk Grove, Calif., has completed the construction of a new modern and attractive office buifding at their plant. The new building will serve as a combined office and display room.

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