TO GUARANTEE BONDS OF HOME OWNERS' LOAN CORPORATION HEARINGS BEFORE THE COMMITTEE ON BANKING AND CURRENCY HOUSE OF REPRESENTATIVES SEVENTY-THIRD CONGRESS SECOND SESSION ON H.R. 8403 (S. 2999) A BILL TO GUARANTEE BONDS OF HOME OWNERS' LOAN CORPORATION, TO AMEND HOME OWNERS' LOAN ACT OF 1933, AND FOR OTHER PURPOSES COMMITTEE ON BANKING AND CURRENCY HENRY B. STEAGALL, Alabama, Chairman T. ALAN GOLDSBOROUGH, Maryland MICHAEL K. REILLY, Wisconsin FRANK W. HANCOCK, JR., North Carolina CLYDE WILLIAMS, Missouri O. H. CROSS, Texas BRENT SPENCE, Kentucky DENVER S. CHURCH, California PRENTISS M. BROWN, Michigan FRED J. SISSON, New York JAMES I. FARLEY, Indiana JAMES A. MEEKS, Illinois HERMAN P. KOPPLEMANN, Connecticut JAMES G. SCRUGHAM, Nevada ROBERT LUCE, Massachusetts CARROLL L. BEEDY, Maine EDWARD L. STOKES, Pennsylvania JOHN B. HOLLISTER, Ohio JESSE P. WOLCOTT, Michigan PETER A. CAVICCHIA, New Jersey JAMES SIMPSON, JR., Illinois HAMILTON FISH, JR., New York O. K. WEED, Clerk CONTENTS Mr. Horace Russell, general counsel Home Owners' Loan Corporation. Hon. William F. Stevenson, member Home Loan Bank Board... Mr. Morton H. Bodfish, vice president and executive secretary United Hon. John H. Hoeppel, Member of Congress_ TO GUARANTEE BONDS OF HOME OWNERS' LOAN CORPORATION—H.R. 8403 WEDNESDAY, MARCH 7, 1934 HOUSE OF REPRESENTATIVES, COMMITTEE ON BANKING AND CURRENCY, Washington, D.C. The committee met at 10:30 a.m., Hon. Henry B. Stegall (chairman) presiding. Present: Messrs. Steagall (chairman), Prall, Reilly, Disney, Spence. Sisson. Meeks, Kopplemann, Brown, Luce, Simpson, and Fish. (The committee had under consideration H.R. 8403, which is as follows:) [H.R. 8403, 73d Cong., 2d sess.] ALL To guarantee the bonds of Home Owners' Loan Corporation, to amend Home Owners' Loan Act of 1933, and for other purposes Be it enacted by the Senate and House of Representatives of the United' States of America in Congress assembled, That Home Owners' Loan Act of 1933 be amended by inserting at the end of section 4 thereof paragraphs as follows: "(L) All bonds issued by the Corporation shall be in such forms and denominations, shall mature within such periods of not more than eighteen years from the date of their issue, shall bear such rates of interest not exceeding 4 per centum annually, shall be subject to such terms and conditions, and shall be issued in such manner and sold at such prices as may be prescribed by the Corporation, with the approval of the Secretary of the Treasury. Such bonds shall be fully and unconditionally guaranteed, both as to interest and principal, by the United States, and such guaranty shall be expressed on the face thereof; and such bonds shall be lawful investments, and may be accepted as security, for all fiduciary, trust, and public funds, the investment or deposit of which: shall be under the authority or control of the United States or any officer or officers thereof. In the event that the Corporation shall be unable to pay upon demand, when due, the principal of, or interest on, such bonds, the Secretary of the Treasury shall pay to the holder the amount thereof which is hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, and thereupon to the extent of the amount so paid the Secretary of the Treasury shall succeed to all the rights of the holders of such bonds. The Secretary of the Treasury, in his discretion, is authorized to purchase any bonds of the Corporation issued under this subsection, and for such purpose the Secretary of the Treasury is authorized to use as a public-debt transaction the proceeds from the sale of any securities hereafter issued under the Second Liberty Bond Act, as amended, and the purposes for which securities may be issued under such Act, as amended, are extended to include any purchases of the Corporation's bonds hereunder. The Secretary of the Treasury may, at any time, soll any of the bonds of the Corperation acquired by him under this subsection. All redemptions, purcha.:cs, and sales by the Secretary of the Treasury of the bonds of the Corporation shall be treated as public-debt transactions of the United States. No such bonds shall be issued in excess of the assets of the Corporation, including the assets to be obtained from the proceeds of such bonds, but a failure to comply with this provision shall not invalidate |