appropriation act for the fiscal year 1932, payable in like manner as other appropriations for the District of Columbia for the fiscal year 1932 are paid: Provided, That the appropriation of $80,100 contained in the District of Columbia appropriation act for the fiscal year 1932 for purchase and installation of electric traffic lights, etc., office of the director of traffic, shall be available for similar expenditures under the department of vehicles and traffic, District of Columbia (act February 27, 1931).

The act approved February 27, 1931, amends the District of Columbia traffic acts of March 3, 1925, and July 3, 1926, to include provision for the registration of motor-vehicle titles, and for the establishment of a department of vehicles and traffic. The purpose of this estimate is to enable the commissioners to obtain the additional personnel that will be necessary in order to provide an efficient organization for carrying the act into effect.

This supplemental estimate of appropriation is necessary to provide for legislation which has been enacted since the transmission of the Budget for the fiscal year 1932, and its transmission to Congress is recommended.

Very respectfully,

The PRESIDENT.

J. CLAWSON ROOP, Director of the Bureau of the Budget.

O

OUTSTANDING LOANS OF FEDERAL LAND BANKS

LETTER

FROM

THE SECRETARY OF THE TREASURY

TRANSMITTING

IN RESPONSE TO SENATE RESOLUTION NO. 393, CERTAIN INFORMATION REGARDING FEDERAL LAND BANKS, NATIONAL FARM LOAN ASSOCIATIONS, AND JOINT-STOCK LAND BANKS

FEBRUARY 17 (calendar day, FEBRUARY 27), 1931.-Ordered to lie on the table and to be printed

The PRESIDENT OF THE SENATE.

TREASURY DEPARTMENT, Washington, February 26, 1931.

SIR: In compliance with Senate Resolution 393, I have the honor to submit for the Federal Farm Loan Board the following information requested regarding Federal land banks, national farm loan associations, and joint-stock land banks. For convenience, each numbered paragraph of the resolution is quoted, preceding the discussion relating to it.

(1) By States, the number and amount of outstanding loans of Federal land banks and, by banks, the total number and amount of such loans

These data are included in the following table:

Loans of Federal land banks outstanding December 31, 1930, by banks and by

States

Loans of Federal land banks outstanding December 31, 1930, by banks and by States-Continued

(2) The number and amount of loans made by each bank in the calendar year 1929 and in the calendar year 1930

These data are included in the following table, which gives also the total number and amount of loans closed by each bank from date of organization to December 31, 1930:

Loans made by Federal land banks in 1929, 1930, and from date of organization to December 31, 1930

[Compiled from reports to the Federal Farm Loan Board]

1 These amounts differ slightly from those previously published because of a revision reported by this bank subsequent to publication.

(3) The total amount of bonds sold in the calendar year 1929 and the same during the calendar year 1930, and the terms thereof, whether sales were made at or above par and at what rate of interest

The needs of the banks for new funds during 1929 and 1930 were not heavy and, as a consequence, there was a relatively small volume of bonds issued during those two years. Most of the requirements for funds with which to make loans were met from cash available to the banks in the regular course of their operations. The principal source of such cash consisted of amortization payments on principal and loans paid in full by borrowers, which aggregated approximately $48,500,000 during 1929 and about $40,000,000 during 1930. In addition, considerable amounts of cash were received in the sale of real estate and from other sources. Money-market conditions, moreover, have not been favorable to the issuance of long-term bonds and, as a consequence, the financing that has been undertaken has been largely of a short-term nature.

A total of $18,850,000 of bonds was authorized during 1929. Of this amount, $6,850,000 were sold on repurchase agreements and subsequently retired. These bonds carried a rate of interest of 4%1⁄2 per cent and had a maturity of 30 years but were callable in 10 years. Of this total, $2,900,000 were sold at 99; $3,500,000 at 99%; $350,000 at 99%; while $100,000 were sold at par. The purchase price in each case, of course, included any accrued interest. A total of $2,500,000 was authorized principally for the purpose of making sales to national farm loan associations, the associations purchasing the bonds for investment of their reserves in accordance with section 18 of the rules and regulations of the board, and also for the purpose of making miscellaneous over-the-counter sales. Of this total, $500,000 bore a rate of interest of 4% per cent and the balance 42 per cent. They had a maturity of 30 years but were callable in 10 years. The reports of the banks indicate that of these issues $1,272,440 have been sold, and that the balance either has been retired or is still on hand. The sales made were very numerous in number, amounting to several hundred transactions a year for some banks, and were made at varying prices and in denominations of $40 and over. In view of the time required to obtain complete data on the sale prices of all these individual sales, they have been omitted to prevent delay in submitting this report. The balance of the bonds issued in 1929 consisted of an issue of $9,500,000, dated October 15, which bore a rate 5 per cent and had a maturity of six months but were callable in four. They were sold on a basis that yielded the banks 99.878.

The bonds authorized in 1930 aggregated $36,300,000. Of this amount $300,000 were authorized for possible use in connection with a repurchase agreement, but were retired without being sold. In February, 1930, another short-term issue amounting to $8,750,000, carrying an interest rate of 4%1⁄2 per cent and maturing in six months but callable in four months, was sold at par. Again, in July, 1930, another issue amounting to $7,250,000 of 41⁄2 per cent bonds having a maturity of six months but callable in four months, was sold on a basis that yielded the banks 100.49.

The only public offering during either of the two years under consideration was made on November 17, 1930, and consisted of an issue of $20,000,000, carrying an interest rate of 41⁄2 per cent with a maturity of three years but callable in two years. These bonds were offered

to the public at par plus accrued interest, netting the banks 99%, and the offering was heavily oversubscribed within a few hours.

(4) What is being done by the Federal Farm Loan Board and the Federal land banks to encourage the organization of national farm-loan associations and the negotiation of loans, and give the attitude, and reasons therefor, toward applications for loans

It is the policy of the Federal Farm Loan Board and the Federal land banks to encourage the organization of national farm loan associations wherever agricultural communities are not already adequately served by existing associations and in accordance with this policy additional associations are organized from time to time as the need becomes apparent. Whenever an inquiry is received, indicating that the organization of a new association is under consideration, a copy of a circular entitled "How Farmers May Form a National Farm Loan Association," together with an appropriate letter, is mailed to the correspondent, and the Federal land bank operating in that territory is notified in order that it may render assistance if the organization of a new association appears desirable. Of course, the formation of new associations is not encouraged, either by the board or the banks, if there are already one or more associations operating in the territory which the proposed associations would serve. The board and the banks feel that, from the standpoint of efficient operation, management, and service, better results ordinarily are obtained from associations of adequate size operating with a minimum overlapping of territory. In a number of cases there have been consolidations of associations by action of their stockholders and directors, with the approval of the board, the members and loans of one association being transferred to another operating in the same or adjacent territory. In other cases where existing associations have not been able to serve their communities because of an impaired financial condition, the territory of adjacent associations has been extended to include sections formerly served by the impaired associations.

During the first years after the Federal land banks began operations, associations were organized rapidly. By the close of 1926 4,942 charters had been granted, of which 277 had been canceled, leaving 4,665 associations. The needs for additional associations have not been great but since that time charters have been granted as follows: 1927, 15; 1928, 10; 1929, 3; and 1930, 6. A number of charters also have been canceled during these four years, principally in connection with consolidations. The number of associations on December 31, 1930, was 4,656, distributed over the agricultural regions of the continental United States.

Section 15 of the Federal farm loan act provides that where national farm-loan associations have not been formed and are not likely to be formed in any locality because of peculiar local conditions, the board may, in its discretion, authorize Federal land banks to make loans on farm lands through agents approved by the board. In accordance with this provision loans have been made in the past through a number of agents in the seventh Federal land-bank district. The policy, however, has been discontinued by the bank, and associations have been organized where necessary to take care of the needs in sections formerly served by agents. Two of the associations organized in 1930 are located in this district.