WHAT PEACE CAN MEAN TO AMERICAN FARMERS 13 



estate subdivision. Action to simplify transfer of real estate and 

 reduce the cost of abstracting and guaranteeing titles would be 

 helpful. 



After the war, farmers will want to use a large part of their 

 wartime savings not only to build houses but also to construct barns 

 and other farm structures. They need more public guidance and 

 assistance in planning the best use of these funds than is now avail- 

 able to them. The more buildings they are able to buy with the dollars 

 they are able to spend, the greater will be the labor employed in the 

 construction industry. 



During the depression of the 1930's, the Federal Government took 

 several steps to encourage private investment in housing through 

 improvements in financing. Among these were: (1) The establish- 

 ment of the Federal Home Loan Bank System, (2) the creation of 

 the Federal Savings and Loan Associations, (3) the insurance of 

 accounts of shareholders in savings and loan associations, and (4) the 

 establishment of the Federal Housing Administration to insure 

 private housing loans. 



The Federal Home Loan Bank System, comprised of 12 regional 

 banks and their member institutions — mainly local savings and loan 

 associations — is aimed at supplying long-term mortgage credit to 

 individual home owners. The member institutions make loans to 

 individuals who want to buy or build a house. These local agencies 

 can borrow from the regional banks on the security of mortgages on 

 homes or Government securities. The banks obtain their loan funds 

 by the sale of debentures up to five times the amount of their paid-in 

 capital, the majority of which is now owned by the Treasury of the 

 United States. This system is obviously a means by which the Fed- 

 eral Government aids in providing credit to local, private institu- 

 tions engaged in home financing. The same is true of the Federal 

 Savings and Loan Associations, which are local organizations char- 

 tered and partially capitalized by the Federal Government. 



Another example of efforts to encourage private investment in hous- 

 ing is the work of the Federal Housing Administration. Its primary 

 approach to the problem is by providing a system of mutual mortgage 

 insurance. Loans for housing repair, alteration, and improvement, as 

 well as for new house construction, are insured and guaranteed by this 

 agency. Through March 31, 1944, the Federal Housing Administra- 

 tion had written insurance totaling more than 7.5 billion dollars, 

 the predominant proportion of which was for construction or refinanc- 

 ing of houses ranging in size from one to four families. The possible 

 insurance coverage on this type of loan is 80 to 90 percent of the 

 value of the property, depending on the size of the loan. Interest 

 rates on insurable loans are limited to 4.5 percent, and the insurance 

 premium is one-half of 1 percent per annum on the outstanding 

 balance of the loan. 



If the potential post-war demand for housing is to be met to the 

 greatest possible extent by private investment, it will probably be 

 necessary for the Federal Government to continue this type of pro- 

 gram in the future. It may even need to be enlarged and improved, 

 if the private housing industry is to make an expanded contribution 

 to the maintenance of full employment. Moreover, it is probable that 



