Secretary LAMONT. I think that is what would happen, but it might be unwise at this time to make that an absolute requirement. Senator COUZENS. I would not object to the setting up of the home loan bank system so far as capital was concerned, and let the private capital be assumed by the Federal Government, even at some expense. Secretary LAMONT. I think that is what would happen in time, but the private institutions might not be in shape to go in on a large scale now.

Senator COUZENS. If they are not in shape, how would they supply the capital under this bill?

Secretary LAMONT. Their capital may be tied up at present, but they will in time be able to subscribe as provided in the bill.

Senator MORRISON. And could not get it until they have it. I want to get this straight. We are talking about getting some experience. I do not exactly know how we are going to get any experience running a home loan bank system under Senator Couzens' bill. He mentioned getting some experience. How are we going to get any experience, Mr. Secretary? Is not that practically the Reconstruction Finance Corporation loaning some more money?

Secretary LAMONT. The Reconstruction Finance Corporation might set up a separate division to carry on this highly specialized home loan work. That particular division might develop some experience.

Senator MORRISON. Well, they have got a building and loan agency now, have they not? They have got a separate agency for building and loan?

Senator WALCOTT. They have loaned $17,000,000 on this.

Senator MORRISON. But not under any such system as this bill provides. They have loaned it like they do to a bank or anybody else. There is no reserve set up. There is no system to see whether they could finance themselves.

Senator WALCOTT. Just temporary loans?

Senator MORRISON. No; direct loans.

The CHAIRMAN. Is that all, Mr. Secretary?
Secretary LAMONT. That is all I have.

The CHAIRMAN. If there are other Senators who desire to ask nore questions, they may do so. If not, we will excuse the Secrecary, and we are very much obliged to you for coming up.

Secretary LAMONT. I am very much obliged to you gentlemen for the opportunity of appearing before the committee.

(Thereupon, at 11 o'clock, the committee went into executive session.)