interest of $305 and taxes of $175, a total liability against the property of $3,930. The first appraisal of the property made by a competent man gave an appraisal of $3,420, and the second appraisal which was made, he not being satisfied with the first one, varied only about $10 to $15. On the basis of these appraisals, under the law, all that this corporation had any right to advance was $2,735 to cover the mortgage, taxes, and everything else. Accordingly Mr. Hyland was advised that it was impossible to advance as much as $4,000 against a property appraised for $3,420. He was told that making allowance for the taxes, appraisals, and so forth, the most that could be offered the mortgagee was somewhere around $2,200 to $2,300. It was suggested to him that he make an effort to have the mortgagee agree to reduce the claim. Now, what he was asking for was that the appraisal on that property be raised $1,580, or nearly 50 percent of the appraised value, in order to make a loan of $4,000. Such a loan would be $500 more than the total value of the property. Subsequently the mortgagee agreed to reduce his claim to $3,000, proving conclusively that even the mortgagee did not consider that property as being worth any $5,000 and the property is not worth any $5,000, Mr. Congressman.

The last thing that happened about that case and the status of it at the present time is that we told your mortgagor the utmost we could do for the mortgagee and just a second and I will get you that exactly-that the utmost that could be done was around $2,300 or $2,400 in bonds. The mortgagee came down to $3,000 and our people suggested that Mr. Hyland continue to negotiate and see if he would not do better. That is the last we have heard of it. It is the kind of thing which happens frequently. We followed this case up persistently, and I simply wanted to get the last word as to whether the mortgagee was going to accept our offer or not before sending this material all back to you. Sometimes we send a special appraisal expert into a State when a special question arises about appraisals, but I did not feel that we were warranted in spending $50 to $60 in a case like this in view of the status of the case.

Mr. KOPPLEMANN. That has to do with the mortgage itself, but what about the letter with reference to criticism of the appraisal? Mr. FAHEY. Well, the first criticism of the appraisal applies to the first appraiser. Mr. Hyland claimed that his father was a Republican, and apparently he did not have much confidence in his appraisal on that account.

Mr. KOPPLEMANN. In view of the fact that it is my letter, will you let me take a look at it, please?

Mr. FAHEY. In the first place, I think, Mr. Congressman, that you should have figured this case out yourself from the correspondence. If you had done so you would have observed that what your client was asking was something that our people could not possibly do, and that was to take an appraisal and proceed to raise it nearly 50 percent in order to make a loan.

Mr. KOPPLEMANN. What do you mean by my "client", Mr. Fahey?

Mr. FAHEY. I do not mean your client, but your constituent. Mr. KOPPLEMANN. All right. In view of the fact that you did not answer any of my letters, and I have none of this information, nor

did I have the original of the letters, don't you think that in some way I should have been advised? Mr. Hyland still insists that he has been mistreated. I received no letter from you and no acknowledgment from you in answer to three letters.

Mr. FAHEY. Mr. Congressman, there is no foreclosure impending in this case, and no threat of foreclosure against this man's property. It is not an urgent case. We have thousands of these cases, and with the tremendous accumulation of applications our job is to deal first with those that are in absolute distress, the cases where people are in danger of losing their homes. Where the other cases are not of that sort we let them take their regular course. We just literally have thousands of cases where Mr. Mortgagee finally comes around and accepts our offer.

Mr. KOPPLEMANN. I know nothing about the merits of the financial end of that. All I am interested in is the administration of the office so that the people do not find fault and complain fairly against the administration. Naturally, when I did not receive letters from you in answer to three of mine, I wondered what is wrong and why no attention was paid to them. We will forget that for the moment, and if you do not mind, Mr. Fahey, I do not want to waste the time of this committee, but I want to get to essentials which are of importance at this time. Here is a letter which I would like to have you give attention and to call the attention of the members of this committee to it. This is signed by Mr. A. M. Leber, 1384 Farmington Avenue, Farmington, Conn. This is a man who has received a loan from your Hartford office:

Being on the ground right in Washington, D.C., I would appreciate it very much if you could get some information for me. On November 16, 1933, the Hartford Home Loan took over my house to save us from foreclosure, and the amount due Home Loan is now $1,027.96; total amount payable each month, $4.28, interest only, until June 1936, then $11.25

And so forth.

Have never received a receipt from Washington, D.C., nor any papers, deeds, or insurance or otherwise to prove my claim of ownership for my home. I was insured with the Travelers Insurance for $1,500 due July 1934, which was very satisfactory to me, but Hartford insisted that I take $2,500 and canceling my own insurance, which I did. I have never received any papers to prove insurance, and now the Washington office reduced my $2,500 to $800, which is not even the amount of indebtedness due to the Home Loan. In case of fire I would be $200 in debt and have no money to rebuild. As yet I have not received any credit from Hartford Loan office, and have written to Washington office and can get no response from them. When I paid the $25, it was understood the amount was to carry me over 5 months, and have never received any receipt. As I cannot get any satisfaction, could you take this up for me? Am enclosing you letter, which please return to me. Thanking you and hoping to hear from you, I am,

Yours very truly.

Now, the letter which he encloses is signed by James A. Hoyt, assistant general manager of the H.O.L.C. in Washington, D.C., addressed to Mr. Van Buren:

Upon examination of the above-numbered loan, we note that we have insurance excessive of our requirements.

Please reduce policy no. 19864 of the Niagara Fire Insurance Co. from -$2,500 to $800.

Please credit the return premium to the Corporation.

I understand the Corporation pays the insurance premiums.

Now, I wrote to Mr. Thompson under date of February 4, 1934: Would you be good enough to investigate the matter enclosed and let me have your advice, in order that I may in turn inform Mr. Leber?

I do not understand why the insurance was changed by order of the Washington office of the Home Owners' Loan Corporation from $2,500 to $800, when the first figure was directed by the Hartford manager.

Will you also return the enclosed correspondence when you have finished with it?

Thank you.

Sincerely yours.

I received a letter from Mr. Lintner, Chief of the Insurance Division of the Corporation, as follows:

DEAR CONGRESSMAN KOPPLEMANN: Mr. W. F. Thompson, attorney for the Corporation, has referred your letter of February 4 to this office for attention.. We have carefully examined the loan docket on Mr. Leber's property, and our appraisal sheet indicates that the actual replacement value of the improvements on his property is valued at $800. Our action in reducing this insurance coverage from $2,500 to $800 was to effect a saving in the premiums paid by Mr. Leber, since in the event of total less by fire the insurance company could elect to replace the buildings and are not obligated in any way to pay the face value of the policies.

In cases like this one, where it is evident that our borrowers are paying premiums for protection they could never collect on, we have taken the initia-tive in reducing their coverage to the proper amount necessary to adequately protect their equity; and in this case the return premium involved would amount to approximately $15. Our interest is more apparent when you consider that the premiums for this insurance coverage were disbursed by the Corporation, and that this excessive charge is not justified by any equity which Mr. Leber might have in his property.

Very truly yours.

That is signed by Mr. A. L. Lintner, Chief of the Insurance Division.

So I then wrote Mr. Leber:

Inclosed is a letter from A. L. Lintner, Chief, Insurance Division of the Home Owners' Loan Corporation, which contains information of interest to you. I trust this gives you the necessary information.

Now, my purpose in reading all of this is to bring out several matters: In the first place, you will notice that the insurance was carried by the Travelers Insurance Co. and was ordered increased. The insurance with the Travelers, although it had 5 months to run, was canceled, and placed with the Niagara Insurance Co., another insurance company, and it was increased from $1,500 to $2,500. Your people rightfully decided it should be decreased to save money of the Government, which is the correct thing to do, but didn't it occur to your people that you ought to investigate why the insurance should be increased and why it should be taken from one company and given to another company?

Mr. FAHEY. Of course, Mr. Congressman, I am sure you will appreciate that, except by accident, I would know nothing whatever about an individual case of that sort.

Mr. KOPPLEMANN. I am willing to assume that you individually did not, but your department might have at least suspected something about that or made an investigation. I find that this insurance was placed with a man by the name of John M. Van Buren, in the insurance business, and understand yesterday you acknowledged that I had told you that the Hartford manager was in the insurancebusiness. It so happens that Mr. John M. Van Buren's business of

fice is at 57 Pratt Street, Hartford, Conn., room 705. It also so happens that your Hartford manager's office is also at 57 Pratt Street, Hartford, Conn., room 701 to 704, and the rooms are adjoining with doors in that building. Your Hartford manager is the real-estate agent for that building, and surely what occurred to me in my busy life down here as to something that did not look right might have occurred to your people.

Mr. FAHEY. You did not send that information to our people, did you?

Mr. KOPPLEMANN. I sent it to your people.

Mr. FAHEY. You mean what you have now stated?

Mr. KOPPLEMANN. Not only what I now state, but I sent them the letter and this complete. It should have been apparent to your people, when the insurance was raised from $1,500 to $2,500 and suddenly switched from one company to another, and you lost your unexpired insurance with the Travelers Insurance Co., that was something that ought to be investigated.

Mr. FAHEY. Now, Mr. Congressman, do you know who placed that insurance, whether the home owner or who placed it?

Mr. KOPPLEMANN. He was ordered by the Hartford office according to the letter which I sent to your office, to increase it.

Mr. FAHEY. Yes; but was it your information that he was ordered to place it with this other insurance company or with the particular agent?

Mr. KOPPLEMANN. No; but I say this to you: It was placed with this particular insurance agent, and it was placed with another company.

Mr. FAHEY. Well, but you see the instructions are, Mr. Congressman, that these people shall not in any way interfere with the placing of insurance, that it is up to the home owner, wherever more insurance is needed, or whenever there is a policy that expires within a comparatively short time it is the business of the home owner to place that insurance. It is very important, therefore, to know whether the home owner arranged that insurance himself or somebody else arranged.

Mr. KOPPLEMANN. Mr. Fahey, am I to understand by the manner in which you are answering my questions that you take it I am arguing against you and your Corporation, or do you take it I am trying to cooperate with you and your organization, selfishly, perhaps, but my selfish reason is this: That the people in my district look to me for proper administration of your Corporation in my district. I want that, and I am not here to quarrel or to fight. Now, your answers to me imply to me that you are trying to defend your office instead of cooperating with me for the purpose of arriving at the trouble and trying to straighten out what is a very bad situation in my district.

Mr. FAHEY. Why, Mr. Congressman, I think you misinterpret my explanations. I am merely trying to tell you what the regular method of operation is.

Mr. KOPPLEMANN. I take it you are trying to defend your office rather than to cooperate in clearing the situation and righting the wrongs where they are.

Mr. FAHEY. No; I should like to know what the facts of it are. If our Hartford office, or anybody connected with our Hartford of

fice, interfered in that case and forced this home owner to take more insurance than was necessary or should have been taken, then that certainly is our concern. Now, on the other hand, if the home owner placed this insurance himself, of his own volition, simply because he was asked to get more insurance, that is a very different matter. Then our employees are not violating instructions. Our instructions are of the most explicit character that none of our people shall mix in the placing of the insurance.

Mr. KOPPLEMANN. In view of the fact that I had told you yesterday, and you acknowledged that I had told you, that this Hartford manager had been, according to my claim, soliciting insurance before any loans were given to the bank in which he is a director, which bank has gone down, and which practices were well known in the community of Hartford, and then to find that in his business representing the Government something akin to that is again happening, don't you think there is something there to be deeply gone into?

Mr. FAHEY. But, Mr. Congressman, when you brought that to my attention we investigated it.

Mr. KOPPLEMANN. Oh, I am afraid, Mr. Fahey, that your investigation was simply this: To write a letter to your Hartford manager, acquainting him with the fact that Mr. Koppleman had complained about him and asking him for some explanation and he satisfied you individually; that is all.

Mr. FAHEY. On the other hand, we did nothing of the sort.

Mr. KOPPLEMANN. And he knew about it, because he was told about it, and it came back to me. Why should he know you were making an investigation until you had completed it?

Mr. FAHEY. He knew nothing about it until after it was completed.

Mr. KOPPLEMANN. I would be very much interested to know about that.

Mr. FAHEY. I want to direct your attention to the fact that last November I pointed out to you that it was utterly impossible for

us

Mr. KOPPLEMANN (interposing). Not last November.

Mr. FAHEY. Yes; on November 21.

Mr. KOPPLEMANN. You mean in your letter of November 21?

Mr. FAHEY. Yes; and I asked you to give us any explanation or evidence you had on any case, and this is the first one ever brought to my attention.

Mr. KOPPLEMANN. Well, I wrote to your office and did not get any answers to my letters, and wrote to your office again with reference to this insurance business, Mr. Fahey, and I was so disappointed with the treatment that I had received that I wrote, and probably you remember this letter: "Since you do not care to go into this matter about which I am concerned, you may consider the matter closed." That is with reference to another proposition.

Mr. FAHEY. That was with reference to the employment of a clerk in the Hartford office.

Mr. KOPPLEMANN. Mr. Kostin happened to meet your State chairman, and the State chairman, as a friendly gesture to me, said that man would have a job in the office. He was chauffeur for me, and