FDR’s Alphabet Soup: Records of the Great Depression

HOLC (Home Owner’s Loan Corporation)   (1933-1951) RG 3.6.3  

FHA (Federal Housing Administration)  (1934-1965 absorbed into HUD) RG 31

 Cath Madden Trindle

Farm home of Elof Hansen owner of land in Yuba County, California. He owes federal land bank loan of twenty-two hundred dollars against this land (as of March 13, 1939)

• Farm home of Elof Hansen owner of land in Yuba County, California. He owes federal land bank loan of twenty-two hundred dollars against this land (as of March 13, 1939) – LOC – Farm Security Administration/Office of War Information Black-and-White Negatives

Prior to the Depression fewer than 40% of U.S. households owned their own homes.   Mortgages were not consumer friendly.  For example, an 80% mortgage meant making a down payment of 80% of the purchase price. The typical term was 3 to 5 years with a balloon payment at the end.  Available funding was limited to 50% of the home’s value.

As the depression deepened, many households were unable to come up with the required balloon payments.  The financial turmoil made it difficult to find a bank willing to extend a new loan.  Families began to lose their homes.

In an effort to keep people in their homes, the Homeowner’s Refinancing fhaAct established the Home Owner’s Loan Corporation (HOLC).  When he signed the act on 13 Jun 1933, Franklin D. Roosevelt stated “The Act extends the same principle of relief to home owners as we have already extended to farm owners. Furthermore, the Act extends this relief not only to people who have borrowed money on their homes but also to their mortgage creditors.”

The HOLC issued bonds and then used the bonds to purchase the mortgage loans of  home owners who were having problems making the payments “through no fault of their own.” The loans were then refinanced for the buyers.  Non-farm homes worth less than $20,000 were eligible for the modifications.  Typical borrowers were more than two years behind on both mortgage and property tax payments.

Between 1933 and 1935 the HOLC made just over one million loans.  At that point they stopped making loans focused on repayments.  Eventually about 20% of the loans failed.  Borrowers who were more than a year behind on payments to the HOLC faced foreclosure.  Homes that were repossessed were refurbished and rented out until they could be resold.  More than 800,000 of the loans were repaid, many early.  In 1951 HOLC closed operations and sold the last of its assets to private lenders.  The nearly thirty year operation turned a small profit.

As new loans from the HOLC ended, the Federal Housing Administration, which had been created by passage of the National Housing Act (48 Stat. 1246) on 27 Jun 1934 stepped in.  The focus of the FHA was to stimulate the growth of the building industry.  The FHA promised a stable future by providing the funds necessary to construct low-income housing.  They also encouraged residential repair and modernization.

 

The FHA sought to stimulate homeownership by providing mortgage insurance and regulating interest rates. Over time, the agency has contributed to a dramatic increase in the number of homeowners, across a diverse income-scale. Early programs especially increased the market for single family homes.

Starting in 1934 the FHA instituted fifteen year mortgages, with a high loan to value ratio (80% to 90%), low interest rates and fixed monthly payments. The term soon increased to thirty years.

The FHA began the practice of determining whether borrowers were likely to be able to repay the loans, and basing eligibility on that. In the past loans had been made according to whether the borrower was “known” by the lender.  Additionally the FHA set quality standards that had to be met in order to qualify for a loan. As commercial lenders eased back into the lending market, they found it necessary to be competitive with the FHA terms and conditions.

Special housing initiatives for veterans during and post WWII provided help for veterans and their families. The Section 608 program provided mortgage insurance to construct housing for war workers during the war, and then for rental properties for returning veterans. Designed to counter the postwar housing deficit by providing lenders with a federal guarantee, Section 608 provided insurance for as much as 90% of the mortgage value on rental housing projects. By the end of 1958, the FHA had enabled nearly five million families to own homes and helped more than 22 million to improve their properties.

Programs and policies of the HOLC and FHA were not without controversy.  Red-lining, was one of the biggest. This was the process of assessing areas and deciding where loans would be made. Areas were assigned a letter grade of suitability ranging from A to D. Ultimately, this practice led to discrimination as many minority areas in urban areas received “Ds” and therefore were ineligible for insured mortgages.  These areas became more and more blighted.  Adjoining areas might also receive a lower grade unless they created barriers separating them from their depressed neighbors. This led to deepening ghettos.  While this practice did not originate with the FHA, it was used.  Another complaint was that it was easier to get a mortgage for a new home than to get a loan to repair an existing home.  Both issues led to the deterioration of the inner cities and the spread of the population to the suburbs. Check the bibliography below for links to redlining articles and maps.

A scandal developed in 1950 following years of abuse by unscrupulous builders who received mortgages through the Section 608 program.   The builder would procure a high mortgage under the program then build it for far less than the loan amount, often with inferior materials and workmanship.  The builder would then sell the property and transfer the mortgage to the new owner, pocketing the difference. The lack of oversight caused the program to be terminated in 1954.

HUD, the Department of Housing and Urban Development, which was established in 1965 (79 Stat. 667) absorbed the FHA and its mission.  On the department’s website you will find links to state offices and other useful information.  By clicking on Research (under Resources on the menu bar) you are taken to the HUD user website.  This site provides bibliographies and other research tools for finding information about projects.  While publications date only from 1969, some discuss projects from earlier years.

  • Like other “Alphabet Soup” departments, the HOLC and FHA touched the lives of many.  Look for loan documents in family papers and county Deed and Mortgage Books.  National Archives holdings are found mainly at the national level.  Search OPA (see below) for records, maps and  other records relating to the agencies. Check local newspapers of the era for references to programs available in the area. Search for information on “Projects” your family might have lived in.  Check the Online Archive of California (FHA)  (HOLC) for records held in California repositories.

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Originally published in the CSGA Newsletter Nov-Dec 2013

Posted in California Repositories, Great Depression, Records | Comments Off

FDR’s Alphabet Soup – Records of the Great Depression

CWA (Civil Works Administration)
1933-1934
NARA RG 69.2

“Four million men now out of employment will be put to work under a plancwa3 announced today by the President. .. Two million of these will become self-sustaining employees on Federal, State and local public projects on November 16th, and will be taken completely off the relief rolls. An additional two million will be put back to work as soon thereafter as possible.” Remarks by FDR on signing Executive Order creating Civil Works Administration on 8 Nov 1933. (1)

Authorized under the National Industrial Recovery act of June 1933, the CWA was created to provide more immediate relief as the PWA got off to a slow start. Building up self-esteem by working rather than living on the “dole” was deemed essential by the Administration for the well being of the citizens and the country as a whole. In all about 3% of the population was employed by the CWA during it’s short existence.

Workers tutored the illiterate, built parks, repaired schools, and constructed athletic fields and swimming pools. A forerunner to the WPA the CWA employed over three thousand writers and artists. Jobs such as raking leaves and shoveling snow led some to scoff at the “make-work” tasks some were assigned.

CWA ” Six hundred men and a scenic boulevard” San Francisco, CA circa 1934 – National Archives ARC Identifier 196525

All those employed by the CWA were Federal employees. The provisions called for one-half of the jobs to go to those who were on relief, and the other half to anyone else who needed work. For those who had been receiving relief this was an increase from $6.50 to the minimum wage of $15.00 a week. Those not on relief were not required to submit to a “means test,” (proving you have absolutely no assets) in order to get an income.

By the winter of 1933-1934 counties and cities were running out of money and resources to keep their citizens going. During it’s short lifetime the CWA, run by Harry Hopkins, built or repaired 800 airports and over 250,000 miles of roads. It built or modernized over 4000 school building, hired some 50,000 teachers for rural schools and constructed over 3000 athletic fields. The CWA helped the country through the winter.

However, the cost of the program exceeded expectations and more emphasis was placed on higher paying construction jobs. The effort was unsustainable and the CWA was liquidated in March of 1934 and all functions transferred to the Emergency Relief Program of FERA. By 1935 the successor WPA was established.

NARA has 888 rolls of CWA field office records, 59 rolls pertain to California. These include final state reports, engineering records, easements and rights of way, progress reports, CWA and state reporting forms, correspondence, and other project records. Over 600 rolls of general records also include information on projects, arranged by state, administrative records, employment records and more.

UC Berkeley has various collections that include California CWA records. Search the Online Archive of California (Federal “Civil Works Administration” 1933-1934 California) for listings there as well as at the Hoover Institute, Huntington Library, University of Pacific Library and the California State Archives.
Suggested Reading:

 

  • United States. Federal Civil Works Administration (in California). Summary report, Civil Works Administration activities, State of California, November 27, 1933-March 29, 1934
  • Schwartz, Bonnie Fox. The Civil Works Administration 1933-1934. Princeton NJ: Princeton University Press. 1984
  • New Deal Civil Works Project Remembered in Berkeley Berkeley Daily Planet, 11 Feb 2009

 

Originally published in the CSGA Newsletter – Aug-Sep 2013

Posted in California Genealogy, California Websites, Great Depression, Records | Comments Off

FDR’s Alphabet Soup: Records of the Great Depression

NRA – The National Recovery Administration

NARA Record Group 9

  • NRA NRA was established as an independent agency by EO 6173, June 16, 1933, pursuant to the National Industrial Recovery Act (48 Stat. 195), June 16, 1933.
  • In a 1935 Supreme Court decision,  Schechter Poultry Corp. v. U.S. , many provisions of the National Industrial Recovery Act were declared unconstitutional.
  • NRA was abolished effective January 1, 1936, by EO 7252, December 21, 1935, which assigned liquidation functions to the Department of Commerce.

As you will note this series of articles and blogs is in no particular order.  It is based solely on what caught my fancy. 

The NRA was one of a few programs that basically failed.  The concept, arguably might have been good.  The implementation was somewhat flawed.  Special interests pushed their ideas forward and found loopholes for their own benefit.  Most importantly the enforcement was uneven, often unethical and riddled with prejudice.

The mission of the NRA was to draw up trade codes of fair competition; to set up a managed economy by relieving business of antitrust laws to eliminate “wasteful competition.” It was thought that creating an artificial scarcity of commodities would cause higher prices, yield  higher profits and support higher wages. Each industry was tasked with creating their own code, setting up quotas, limiting hours and restricting construction of new factories and businesses. Each code was approved by FDR and then put in place.  Regional variations were allowed due to differing industry and wage standards.  Firms that participated displayed blue eagles to inform consumers of their patriotism. There were over 2 million participants. 

While some mandates of the NRA were found to be illegal by the Supreme Court other areas such as guaranteed collective bargaining for unions and child labor laws are still in existence today.

One sample of a code is that for ICE HOUSES. Employees could work 48 hours a week averaged over 3 months with a maximum of 54 hours in any one week.  For this they were to be paid 25 to 30 cents an hour. Office workers were limited to 44 hours per week, and no more than 8 hours in a day for which they should earn at least $14 a week with overtime paid at 1and 1/3 more per hour.

Development of codes and enforcement was by region.  The National Archives – San Francisco has records (RG 9) for Region IX (California, Oregon, Washington, Idaho, Montana, Arizona, Nevada and Utah).  The records for the Territory of Hawaii are also located in at NARA-San Francisco (San Bruno). 

One example of enforcement in California is the action against the Scatena Bros. Winery in Healdsburg where the field hands were working more than the allowed 40 hours a week.  Workers shifts could include up to 9 hours in day, and up to 6 days per each 7 day period. During harvest they were allowed 60 hours a week with up to 10 hours in a day.  The workers must be paid less than 40 cents an hour.

In Oakland, Monet Chevrolet was cited for giving more than the coded amount for used car allowances. In Oregon Fred Meyer was cited for using loss leaders.  In San Francisco the Smith Lumber Company was  criminally charged for pricing their supplies below “modal pricing.”  Their lost eagle was reinstated when, in an effort to save the NRA, pricing standards were removed from the NRA codes.

Reading through the files archived at NARA-San Francisco, it seemed that a great deal of the enforcement was for employment issues.  Most complaints were not by the employees, however, those seemed to be the exception.  In fact, enforcement efforts were often due to complaints from competitors, and often led to solutions that in retrospect make you think the bad guys won and the nice guys finished last.

Take the case of  Zenkichi Hatakenaka doing business as Kodomoya Notion House.  He was charged with violating Article V of retail code in the Territory of Hawaii.   Mr. Hatakenaka set up staggered schedules for the four sales girls working in his store They came in on alternating days from eight in the morning to noon.  Two of the girls lived quite a distance from the store and had to walk through rough neighborhoods to get home.  They chose to stay in the store until 9 pm when Mr. Hatakenaka would drive them home.  Each girl had a 1½ hour lunch break and 1½ hour dinner break with food supplied.  They normally worked 6 days but at Christmas went in and straightened the store on a Sunday.  In addition to this 7th day and each worked a few extra hours that week.  The girls were paid $12 a week. A complaint was made that the girls were working more than the hours allowed by their industry.  A bench warrant for $500 was issued.

In the store Mr. Hatakenaka had posted a schedule that showed the actual hours that each girl was on duty.  The hours were well within those allowed except for Christmas week, when it was shown that all stores in the area were opened extra hours.  The investigator, however, wouldn’t allow the posted schedule as evidence. The hours the girls were physically in the store were used to define their shifts.

Result – Mr. Hatakenaka ended up pleading guilty and received a fine of $100 and 5 years probation under rule 131 of the US district court and had to give up his blue eagle. And perhaps worse, the girls no longer could wait for a safe ride home.

If your family owned a business during the years that the NRA was in place, you will find information on the NRA codes controlling their industry in the records at NARA.  You might also find information on the business itself  if it was involved in an investigation for any reason.

So, your ancestors didn’t own a business.  Were they employed?  Check out the records for the business they worked in. What were the codes they lived with?  Was their employer a participant in the NRA?  Were they in compliance with the industry rules?

Check the newspapers.  The NRA, nicknamed the National Run Around, was very controversial.  Newspapers were often quick to comment on controversial rulings.

See the CSGA Blog for additional NRA cases and a links to NRA promotional and educational materials.

Bibliography

  • Homer L. Calkin, Meyer H. Fishbein, and Leo Pascal, comps., Preliminary Inventory of the Records of the National Recovery Administration, PI 44 (1952).
  • The National Recovery Agency Digital History,
  • National Industrial Recovery Act(1933),  
  • Record copies of publications of the National Recovery Administration in RG 287, Publications of the U.S. Government.

Originally Published in the CSGA Newsletter Jan – Feb 2013

Posted in California Genealogy, California Repositories, Great Depression, projects | Comments Off