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U. S.-Federal Works Agency; Nat'l Youth Administration; I. C. C.

Federal Works Agency

FWA-Federal Works Agency-Administrator, Gen. Philip B. Fleming. Address, Washington, D. C.

The Federal Works Agency was created by the first plan for government reorganization submitted to Congress by the President April 25, 1939, under authority of the Reorganization Act of 1939, and began to function as an agency of the Federal Government on July 1, 1939.

Five organizations, previously operating either as independent establishments or as parts of departments, were brought together under FWA. These organizations were: The Work Projects Administration (WPA), formerly the Works Progress Administration (with the exception of the National Youth Administration); the Public Works Administration (PWA), formerly the Federal Emergency Administration of Public Works; the Public Roads Administration (PRA), formerly the Bureau of Public Roads in the Department of Agriculture; the United States Housing Authority (USHA), formerly in the Interior Department; and the Public Buildings Administration (PBA), in which was combined the Branch of Public Buildings, Procurement Division, Treasury Department, and the Branch of Buildings Management, National Park Service, Interior Department. All of the administrations are headed by Commissioners. The United States Housing Authority is headed by an Administrator.

The purpose of consolidating these five units in the Federal Works Agency was: To reduce expenditures; to increase efficiency; to consolidate agencies according to major purposes; to reduce the number of agencies by consolidating those having similar functions; and to eliminate overlapping and duplication of effort in the government. New duties and functions, stemming principally from the defense program, have been undertaken by the Agency. These include: FWA Defense Housing Program-The Federal

Works Administrator was authorized to acquire or construct and manage defense housing projects where the President determined an acute shortage of housing existed or impended which would impede national defense activities. The FWA defense housing program up to Aug. 1, 1941, had made 16,107 homes available for occupancy by the families of workers in defense industries and enlisted personnel and civilian employees of the Army and Navy. As of that date under the FWA program 60,835 homes with an estimated cost of $183,558,319 also were under contract. Two new units were established within FWA under the program, the Division of Defense Housing and the Mutual Ownership Defense Housing Division.

Defense Public Works Under the provisions of the Defense Public Works Act the Federal Works Agency was assigned operation of the program to provide public work facilities necessary to health. safety, or welfare in defense areas. An appropriation of $150,000,000 was provided and loans and grants were authorized for schools, waterworks, garbage and refuse disposal, hospitals, recreational water treatment and purification, sewers, sewage.

and other facilities.

Public Work Reserve-A Public Work Reserve was established within the Federal Works Agency to build up a backlog of desirable public work projects that might be undertaken by local, State and Federal agencies after the reduction of defense activities. Preliminary surveys of the field indicated the existence of a reserve of needed works and services to the extent of four or five billion dollars worth a year when defense needs and economic conditions make their construction or operation feasible or desirable.

National Youth Administration

NYA-National Youth Administration-Aubrey Williams, Administrator, Washington, D. C. The National Youth Administration carries on two major activities. Through one NYA enables young persons to continue their school or college educations by providing part-time work. Through the other NYA provides jobs on work experience projects for young persons who are out of school, unemployed and in need of jobs.

The National Youth Administration has been a part of the Federal Security Agency since July 1, 1939, when it was separated from the Works Progress Administration under Reorganization Plan No. 1.

During the fiscal year ending June 30, 1941, an average of 439,149 young persons were employed on the NYA Student Work Program. Of these 318,953 were students in 29.073 secondary schools, while 120.196 were college and graduate students in 1,711 colleges and graduate schools. Students are selected for employment on the basis of proved need and demonstrated scholastic ability and perform useful tasks under the direction of school officials. Secondary school students earn between $3 and $6 a month, college under-graduates between $10 and $20, and graduate students between $10 and $30. The NYA Out-of-School Work Program includes a wide variety of projects on which youth produce

goods or render services for public agencies while gaining practical work experience. Such services are rendered to public agencies only to the extent that their normal budgets cannot adequately provide for them. Most of these projects are related to the national defense, with many youths being prepared on NYA work projects for work in national defense industries. Particular emphasis is being placed on the fitting of workers for places in ship building, aviation, machine tools, and other bottleneck industries.

During the fiscal year ending June 30, 1940, the National Youth Administration employed an average of 325,000 youths on the Out-of-School Work Program each month.

In the training of youth for jobs in defense industry the National Youth Administration is cooperating with the United States Office of Education and local school systems who provide training in subjects related to the NYA work, and the state employment services who together with the Bureau of Employment Security have the responsibility of placing the workers in industry.

For the fiscal year July 1, 1941 through June 30, 1942, Congress appropriated $151,684,000 for the National Youth Administration.

Interstate Commerce Commission

ICC-Interstate Commerce Commission-Joseph B. Eastman, chairman; Clyde B. Aitchison, Clande R. Porter, William E. Lee, Charles D. Mahaffie, Carroll Miller, Walter M. W. Splawn, John L. Rogers, J. Haden Alldredge, William J. Patter on, and J. Monroe Johnson. (The Commission selects a chairman from its membership). Address, Washington, D. C.

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by railroads and motor carriers: and to approve consolidations and combinations of carriers. For the most part these powers may only be exercised after a hearing. The Commission may also make orders against carriers other than those by motor vehicle for the payment of damages for certain violations of the Interstate Commerce Act.

The Commission is required to ascertain and report the value of the property of railroad and pipe-line companies. It is empowered to require the use of block signals, train control devices, and certain other safety appliances by railroad companies, and may establish reasonable requirements with respect to safety of operation and equipment of motor carriers, including private carriers. It may prescribe uniform systems of accounts for the carriers under its jurisdiction and require them to file periodic and special statistical reports with it.

Work Projects Administration

WPA-Work Projects Administration-Howard O. Hunter, Commissioner. Address: Washington, D. C.

The major function of the Work Projects Administration (created in 1935 and incorporated in the Federal Works Agency on July 1, 1939) is to provide useful work on public projects for unemployed workers in need of jobs. During the fiscal year ending June 30, 1941, WPA activities were coordinated with the national defense effort, and roughly a third of the employment and a fourth of the funds were devoted to defense projects.

To facilitate the participation of the WPA in the national defense program, Congress enacted special provisions which authorize the exemption of projects certified by the Secretary of War and the Secretary of the Navy as important for military and naval purposes from many of the restrictions that normally apply to project operations. Defense projects may be exempted from the requirements concerning sponsors' contributions, from limitations on hours of work and earnings of project workers, and from the limitations on the use of Federal funds for nonlabor costs. In connection with the nonlabor exemption, Congress authorized the use of $50,000,000 in WPA funds to pay for supplementary nonlabor costs of certified defense projects during the fiscal year 1941.

the

The War and Navy Departments through their certification of projects have determined, to a considerable extent, the scope of WPA defense activities. In addition, projects which have been certified for exemption have been given first preference in operation, to speed their completion. Nevertheless, many other defense projects, which did not require certification for successful operaiton, have also been undertaken.

As a matter of fact, most of the kinds of work required in the program to strengthen the national defense had already been undertaken by the WPA in the years prior to the present emergency.

In addition to its work that is related directly to the national defense, the WPA has continued to operate projects that extend community facilities and contribute to the physical and cultural welfare of the civilian population. Work on highways, roads, and streets has continued to account for the largest number of jobs, but the 471,000 persons working on such projects at the end of June, 1941, represented less than 36 percent of the total, as compared with nearly 43 percent a year earlier. On the other hand, airport projects were providing jobs for 68,000 workers, or about 5 percent of the total, as compared with only a little more than 1 percent in June, 1940. Projects for the construction of public buildings accounted for about 10 percent, and those for the development of water supply and sewer systems for 9 percent of the total employment in June, 1941; these percentages were only slightly different from those applying to the same kinds of work a year earlier.

Most of the remainder of the WPA workers were employed on various kinds of community service projects, including sewing projects and many educational, recreational, and clerical projects. Nearly 3 percent of the workers, however, were employed on projects for the training of workers in manual occupations needed in defense industries. (This type of project was first authorized in the ERA Act for the fiscal year 1941.) About 35,000 WPA workers were in training on such projects at the end of June, 1941, and nearly 120,000 had been employed on them during the course of the year. The number of workers employed on all WPA projects averaged about 1,700,000 during the 1941 fiscal year. This average is about 17 percent less than that for the preceding fiscal year and is lower than that for any other year since the program began. It is only a little more than half the average for the fiscal year 1939, when operations were at their peak, and some 200,000 below the 1939 average, the previous low level of WPA activities.

At the end of June, 1941, about 1,368,000 persons were employed on projects financed with WPA funds. Most of them (nearly 1,328,000) were working on projects operated directly by the WPA. The remaining 40.000 were working on projects operated by other Federal agencies but financed with WPA funds transferred under authority of Section 10a of the Emergency Relief Appropriation Act, fiscal year 1941, or similar sections of previous ERA acts.

Approximately 96 percent of all WPA project workers are paid in accordance with a standard schedule of monthly wages. This schedule provides for monthly wages that vary with the degree of skill required for the job to which the

worker is assigned and with the section of the country and the degree of urbanization (based on the population of the largest municipality within each county) of the locality in which the worker is employed. A standard schedule of monthly earnings has been the basis of wage payments since the WPA program began, but the schedule in current use reflects changes initiated by the ERA Act of 1939.

Physical accomplishments on WPA projects during the period from the beginning of the program through December 31, 1940, included practically every kind of public facility and service needed by communities, as well as many of those essential to the national defense. WPA workers built or improved about 565,000 miles of roads and streets; a large share of this mileage was on farm-tomarket and other roads in rural areas. In connection with the road work, about 69,000 new bridges were built, and 42,000 existing bridges were reconstructed. WPA workers also built about 200 airplane landing fields and nearly 2.300,000 feet of runways and made extensive improvements to hundreds of other airports and many airport facilities. Many of the 28,300 new buildings erected and 72,000 existing buildings renovated through WPA projects are also of value in the defense of the nation; these include barracks, mess halls, garages, storage houses, and other buildings at military and naval reservations. About 36,000 schools and other educational buildings were also included among the buildings constructed or renovated by WPA workers.

Other project accomplishments in the construction field included the installation or improvement of some 23,000 miles of storm and sanitary sewers and of nearly 16.000 miles of water mains, and the construction or reconstruction of about 3,000 water or sewage treatment plants, pumping stations, and other utility plants. Recreational facilities made available to the public were also numerous, including 7,400 new or improved parks, 1,500 new swimming and wading pools, over 9,000 tennis courts, and several thousand playgrounds and athletic fields.

WPA workers on community service projects of various kinds, during the five-and-a-half-year period through December, 1940, completed 312,000,000 garments and household articles for distribution to needy families and public institutions, made millions of visits to families in need of housekeeping assistance and served 575,000,000 lunches to school children. Through the various arts, educational, and recreational projects, millions of persons were provided with opportunities for entertainment, cultural development, instruction, and recreational leadership.

During the fiscal year 1941, about $1,326,000,000 in WPA funds was expended in the operation of the program. Nearly $1,285,000,000 of this amount was used for program activities operated directly by the WPA, and the remaining $41,000,000 was spent for projects operated by other Federal agencies with transferred WPA funds. Nearly $325,000,000 of the WPA funds was spent for defense projects, including those operated by other Federal agencies. These defense expenditures represented about a fourth of the total for all WPA projects.

As in previous years, the greater part (87 percent) of the expenditures of WPA funds was made for the wages of workers. Nonlabor costs accounted for only 9 percent of the total, despite the increased nonlabor expenditures for certified defense projects. Most of the remainder (3.6 percent) of the WPA funds was used for administrative purposes. A small fraction of one percent represented the payment of property damage

claims.

Local communities that propose and sponsor WPA projects, and take an active part in their operation, also pay a considerable share of the projects costs. During the 1941 fiscal year. sponsors spent a total of nearly $548,000,000 in the operation of WPA projects. This amount, which represented about 31 percent of the total for projects operated by the WPA, is more than the sponsors contributed in any previous year, despite the fact that WPA activities in general were on a lower level in 1941 than ever before.

In the course of the six years since the WPA program began, a total of $9,580,602,000 in WPA funds has been spent for its activities, including projects operated by other Federal agencies. Project sponsors during the same period made $2,341,265,000 available for project operations. These funds have provided Jobs for considerably more than 8,000,000 different persons.

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DISTRIBUTION OF EMPLOYMENT BY MAJOR TYPE OF PROJECT

Selected Periods, March 1937-June 1941

44,564

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PWA-Public Works Administration, a unit of the Federal Works Agency-Commissioner of the Public Works Administration, M. E. Gilmore; Executive Officer, J. J. Madigan. Address, Washington,

D. C.

The Public Works Administration, formerly the Federal Emergency Administration of Public Works, was created under authority granted the President under Title II of the National Industrial Recovery Act, approved June 16, 1933, to bring about an expansion of Federal and non-Federal public construction that would increase employment, stimulate private industry, and promote economic recovery. PWA was consolidated into the Federal Works Agency July 1, 1939, under the President's first plan on government reorganization as authorized in the Reorganization Act of 1939.

PWA programs embrace three major classes of projects: (1) projects for agencies of the Federal Government; (2) projects undertaken by State and local governments or other public bodies; and (3) railroad projects. (Loans, but no grants, were approved for privately-owned railroads.)

As of July 1, 1941, the total of the allotments

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Reconstruction Finance Corporation

RFC--Reconstruction Finance Corporation-Charles B. Henderson, chairman; Carroll B. Merriam, Howard J. Klossner, Sam H. Husbands, and Henry A. Mulligan, directors. Address, Washington, D. C. Loan Agencies are maintained in Atlanta, Ga.; Birmingham, Ala.; Boston, Mass.; Charlotte, N. C.; Chicago, Ill.; Cleveland, Ohio; Dallas, Texas; Denver, Colo.; Detroit, Mich.; Helena, Mont.; Houston, Tex.: Jacksonville, Fla.; Kansas City, Mo.; Little Rock, Ark.; Los Angeles, Calif.; Louisville, Ky.; Minneapolis, Minn.; Nashville, Tenn.; New Orleans, La.; New York, N. Y.; Oklahoma City, Okla.; Omaha, Nebr.; Philadelphia, Pa.; Portland, Oreg.; Richmond, Va.; St. Louis, Mo.; San Antonio, Texas; San Francisco, Calif.; Seattle, Wash.; Spokane, Wash.; and Offices of Special Representatives at Salt Lake City, Utah; and San Juan, Puerto Rico.

been withdrawn and $127,675,236.72 remains available to the borrowers. In addition, the Corporation has authorized or has agreed to the purchase of participations aggregating $112,043,301.36 of 1,931 businesses, $59,461,530.46 of which has been withdrawn and $31,559,016.02 remains available.

The Reconstruction Finance Corporation was created by Act of Congress, approved Jan. 22, 1932, and began operations Feb. 2, 1932. Its powers have been increased and the scope of its operations extended or otherwise affected by subsequent legislation. The Corporation may perform all of its functions to the close of business Jan. 22, 1947. unless the President authorizes the suspension of its activities prior to that time. The capital stock was fixed by Section 2 of the Reconstruction Finance Corporation Act at $500,000,000, all of which was subscribed by the Secretary of the Works Pursuant to the proTreasury on Feb. 2, 1932. visions of section 2 of the RFC Act, as amended by Act approved June 25, 1940, the Corporation retired $175,000,000 of its capital stock at par.

or

The functions of the Corporation include the making of loans: to business enterprises; public agencies; financial institutions; insurance companies; railroads, drainage, levee, irrigation, and similar districts; mining and fishing industries; public school districts other public school authorities. It may subscribe to and lend upon nonassessable stocks of banks, trust companies, insurance companies, national mortgage associations, mortgage loan companies; purchase capital notes or debentures of such institutions; lend for the carrying and orderly marketing of agricultural commodities and livestock, and exportation of agricultural or other products; and purchase securities from Public Works Administration. It is also authorized to aid the Government of the United States in its National Defense program by the making of loans and the purchase of capital stock of corporations created by it.

Total authorizations by the RFC through June 30, 1941, and tentative commitments outstanding at the end of the month were $17,635,321,089.43. This sum includes a total of $1.410,649,945.66 authorized for other Governmental Agencies and $1,800,000,000 for relief by direction of Congress. Of the $14,424,671,143.77 remaining after excluding authorizations for other Governmental Agencies and for relief, $2,770,093,856.44 was canceled or withdrawn, $2.905,049.180.51 remains available to borrowers and to banks in the purchase of preferred stock and debentures. Of disbursements for all purposes aggregating $11,857,558,803.45, only $2,573,006,051.88 remains unpaid.

To assist open banks in meeting the demands of depositors and in continuing their operations, $1,334.805,161.08 in loans was authorized by the Corporation. $1,138,233,619.27 has been disbursed, $18,000 remains available to the borrowers and the balance has been canceled. In addition, loans aggregating $1,390,360,811.15 were authorized for distribution to depositors in 2,778 closed banks so that they would not have to wait for liquidation of assets of the banks. Of the $2,172,619,670.14 disbursed, there remains unpaid only $108,828,958.71. Only $5.904.471.84 is owed by open banks and that includes $5,322,410.75 from one Mortgage and Trust Company.

Authorizations have been made for the purchase of preferred stock, capital notes and debentures of 6,803 banks and trust companies aggregating $1,466,740,663.24 (including Export-Import Bank. $176,500,000) and 1,123 loans have been authorized. in the amount of $52,811,025.76 to be secured by preferred stock, a total authorization for preferred stock, capital notes and debentures of 6,873 banks and trust companies of $1,519,551,689; $174,322,857.44 of this has been withdrawn and $822.500 remains available to the banks when conditions of authorizations have been met: $629,198,298.40 of such purchases and loans are unpaid.

Loans have been authorized to refinance 657 drainage, levee and irrigation districts aggregating $147,137,308.39, of which $46.203,549.54 has been withdrawn: $4,001,849.44 remains available to the borrowers and $96,931,909.41 has been disbursed.

The Corporation has authorized 7,776 loans for the benefits of industry aggregating $500,029,768.05. including loans to the fishing industry, to banks and to mortgage loan companies to assist business and industry. Of this amount $102,278.259.24 has

On Self-Liquidating Projects 405 loans have been authorized aggregating $776,637,133.28; $47,768,143.14 of this amount has been withdrawn and $172,201,375 remains available to the borrowers; $556,667,615.14 has been disbursed and $44,104,140.92 is unpaid.

The Corporation has purchased from the Public Administration, Federal Works Agency (formerly Federal Emergency Administration of Public Works) 4,417 blocks (3,316 issues) of securities having par value of $694,236,258.90. Of this amount, securities having par value of $511,339,792.25 were sold at a premium of $14,184,899.59. Securities having a par value of $150,115,119.68 are still held. In addition, the Corporation has agreed to purchase, to be held and collected or sold at a later date, such part of securities having an aggregate par value of $3,737,000.00 as the Aministration is in a position to deliver from time to time.

The Corporation created and owns the capital stock, in the amount of $17,000,000.00 of the Metals Reserve Company, Rubber Reserve Company, De-, fense Plant Corporation and Defense Supplies Corporation. All of these companies are actively engaged in the National Defense program in their respective fields. In addition to loans to these companies, aggregating $2,583,050,000, the Corporation has authorized 131 loans to 56 private manufacturers in the defense program, aggregating $150,703,608.78. Of the $2,733,753,608.78 authorized as loans for National Defense purposes $6,779,608.79 has been canceled and $332,254,473.87 disbursed.

The Corporation also cooperates with banks in making loans for production, plant expansion or other National Defense purposes, by taking participations in any such loans. The lending authority of the RFC was increased by $1,500,000,000 (Oct. 1941) by Congress to aid in expanded defense operations in setting up new corporations. The Corporation has authorized participations to the extent of $5,392,359.67 in defense loans aggregating $8,255,793.00, practically all made by banks.

RFC loans and investments outstanding on June 30. 1941 were:

For benefit of agriculture

To banks and trust companies (in-
cluding those in liquidation)
For loans on and purchases of
bank stock (including Export-
Import Bank and Federal Home
Loan Banks)

For Self-Liquidating Projects.
To business enterprises.

To drainage, levee and irrigation
districts

To railroads (including receivers
and trustees)..

For loans to and capital of mort-
gage loan companies (including
$25,000,00 capital the RFC Mort-
gage Company and $11,000,000
capital Federal National Mort-
gage Association
For loans to and capital of insur-
ance companies

To building and loan associations
(including receivers)

To mining, milling and smelting
businesses

For National Defense (including
stock of companies organized
for National Defense purposes).
For PWA Securities (at cost).
For other purposes.

Total-By Directors of the Cor-
poration

Loans

to Rural Electrification Administration-By Direction of

Congress

$ 178,406,883.74

108,828,958.71

753,939,298.40 44,104,140.92 151,870,109.99

78,621,665.60 469,634,011.01

202,888,092.71

23,688,392.36 4,355,507.30

3,897,629.50

306,243,255.51 122,071,448.38 1,959,083.21

$2,390,508,477.34

182,497,574.54

Total Loans and Investments...$2,573,006,051.88

DISASTER LOAN CORPORATION

The Disaster Loan Corporation was created by Act approved Feb. 11, 1937. Under the Act, as amended, its nonassessable capital stock shall not exceed $40,000,000, to be subscribed to and paid for by the Reconstruction Finance Corporation. It is managed by officers and agents appointed by RFC and will have succession until dissolved by Congress.

Under the Act, as amended, the Disaster Loan Corporation is empowered to make such loans

determined to be necessary or appropriate because of floods or other catastrophes occurring during the period between Jan. 1, 1936, and Jan. 22, 1947. As of June 30, 1941, it had authorized 23,671 loans. aggregating $31,472,398.63, of which $3,416.055.52 was withdrawn or canceled, and $28,020,001.42 disbursed. Of this latter amount $14,398,650 was disbursed to the Federal Surplus Commodities Corporation for the salvage of blown down timber in the New England hurricane district. Disbursements have been made to borrowers in 42 States.

THE RFC MORTGAGE COMPANY

The RFC Mortgage Company was organized March 14, 1935. under the laws of Maryland. The Reconstruction Finance Corporation supervises the operations of the Company and owns its outstanding capital stock of $25,000,000.00 Its purpose is to aid in the reestablishment of a normal market for sound mortgages on urban property and for other purposes; and it engages in the following major group activities:

(1) When financing is necessary and cannot be obtained upon reasonable rates and terms, the Company considers applications for, loans, on a sound basis, secured by first mortgages on urban. income-producing properties, such as apartment houses, hotels, business and office buildings, if the net income from the property, after the payment of taxes, insurance, and operating expenses, is sufficient to pay interest charges and the required amortization of the loan. These loans are chiefly for refinancing and aiding in the reorganization of distressed real property.

(2) The Company also gives consideration to applications for loans to finance new construction, provided there is an economic need for such construction, the mortgagor's investment in the completed project will be substantial in relation to the amount of the loan requested and his resources and experience are sufficient to indicate that the property can be operated on a sound

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their notes secured by such bonds and certificates. provided sufficient information is available to the Company to enable it to determine that the income of the property securing the bonds or certificates is sufficient to warrant the loan. Loans will not be made to the holders of such bonds or certificates who acouired them for speculative purposes.

(4) The Company also purchases, at par and accrued interest mortgages insured under Title II and Title VI of the National Housing Act, as amended, provided such mortgages meet the eligibility requirements of the Company.

(5) The Company also purchases, for an amount equal to the unpaid principal thereof, plus accrued interest thereon, loans reported for insurance to the Federal Housing Administration, pursuant to the provisions of Title I of the National Housing Act, as amended, provided the proceeds of such loans were used to finance the erection of residential structures constructed after January 1. 1940, and provided further, such loans otherwise meet the Company's eligibility requirements.

For the period March 14, 1935, the date of organization of the Company, through June 30, 1941. the Company approved loans and purchases aggregating $314,493,664.11 including conditional agreements, itemized as follows:

Refinancing in cases of distress.. $ 96,047,250.25
Construction of new buildings
83,132,657.53
For purchase of Federal Housing
Administration insured mortgages 132,077.131.81
For purchase of mortgages and prop-
erty not insured by Federal Hous-
ing Administration

FEDERAL NATIONAL MORTGAGE ASSOCIATION

In Feb., 1938, the Reconstruction Finance Corporation, with the approval of the President, organized The National Mortgage Association of Washington, the name of which was subsequently changed to Federal National Mortgage Association, under the provisions of Title III of the National Housing Act, as amended, with a capital of $10,000,000 and a surplus of $1,000,000. It is owned and operated by the Reconstruction Finance Corporation and deals exclusively with mortgages insured by the Federal Housing Administrator.

The Association's principal objectives are:

a. To establish a market for first mortgages, insured under the provisions of Title II of the National Housing Act, as amended. covering properties upon which are located newly constructed houses or housing projects;

b. To facilitate the construction and financing of economically sound rental housing projects, apartment buildings which may be operated at a moderate scale of rentals, and groups of houses or multi-family dwellings for rent or sale, by making loans secured by first mortgages, insured under section 207, of the National Housing Act, as amended, covering such projects, apartment buildings, or groups of houses or multi-family dwellings; and

c. To make available to individual and institutional investors notes, bonds or other obligations issued by the Association pusuant to the provisions of section 302 of Title III of the National Housing Act, as amended, and the regulations of the Federal Housing Administrator.

The Association will purchase, without recourse. mortgages insured by the Administrator under the provisions of section 203 of the National Housing Act from institutions or organizations, other than loan correspondents, which have been approved as mortgagees by the Administrator and have a net worth satisfactory to the Association, at a price equal to the unpaid principal balance of such mortgages plus accrued interest to the date of purchase, provided such mortgages constitute first liens on property located within a radius of 200 miles from the principal home office or approved branch office of the approved mortgagee, bear interest at a rate of not less than 4.5 percent per annum. cover improvements constructed on or after January 1, 1936, which were insured by the Administrator on or after January 1, 1937, and otherwise meet the Association's requirements.

3.236.624.52

Approved mortgagees desiring to offer mortgages insured under section 203 of the National Housing Act to the Association for immediate purchase, or for purchase at a future date, are required to enter into a purchasing and servicing agreement with the Association. In instances in which commitments to purchase at a future date are made, the Association requires the approved mortgagee to deposit a commitment fee equal to 1 percent of the principal amount of the mortgage, which fee will be returned when the mortgage is delivered to the Association for purchase. Commitments are made for a period of 6 months.

The Association will consider applications from approved mortgagees for commitments to purchase mortgages insured by the Administrator under the provisions of section 207 of the National Housing Act. Applications for such commitments must be submitted to the Association and the commitment of the Association be obtained prior to the beginning of the construction of the project to be covered by such mortgages.

The Association will consider applications for loans secured by mortgages insured by the Administrator under the provisions of section 207 of the National Housing Act where the estimated income from the mortgaged property is sufficient to pay the operating expenses, taxes, insurance, interest on the indebtedness, and reasonable amortization. and provide a reasonable margin in excess of required reserves. Applications for such loans must be submitted to the Association prior to the beginning of construction of the project to be covered by the mortgage.

Loans made by the Association secured by mortgages insured under section 207 of the National Housing Act will bear interest at the rate of 4 percent per annum. An initial service charge of 1.5 percent of the principal amount of the loan will be made by the Association if it is required to make disbursements during the period of construction.

Through June 30, 1941, the Federal National Mortgage Association had bought 55,868 FHA Insured Mortgages, aggregating $222,363.893.19 and had commitments to buy 1,066 additional mortgages aggregating $4,441,324 36. In addition it had authorized 14 Large Scale Housing Loans aggregating $5,650,500.00, of which 2 in the amount of $304,000.00 have been cancelled.

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