Memorandum of Disapproval of Bill Reducing Federal Savings and Loan Insurance Premiums.

I AM WITHHOLDING my approval of H.R. 4428 entitled, "An Act to adjust the rate of dividends paid by the Federal Savings and Loan Insurance Corporation on its capital stocks and to decrease the premium charge for its insurance."

The major provision of this bill provides for the reduction of the insurance premium paid to the Federal Savings and Loan Insurance Corporation. The premium would be reduced from one-eighth of one percent to one-twelfth of one percent. The legislative history of the original bill creating the Federal Savings and Loan Insurance Corporation indicates that the Congress originally contemplated that the reserve of the Federal Savings and Loan Insurance Corporation should some day reach five percent of the insured risk, but after ten years of operation this reserve had reached less than one percent of the insured risk.

The Federal Savings and Loan Insurance Corporation has one hundred million dollars of government-furnished money. This amounts to a subsidy for the benefit of private institutions. It is particularly important, from a budgetary standpoint, that this money be returned to the government at as early a date as possible.

At the present time when such vigorous efforts are being made to increase government receipts and reduce expenditures, prudent policy requires that the premium of the Federal Savings and Loan Insurance Corporation should be maintained with the ultimate view of effecting the repayment of the one hundred million dollars to the Treasury.

HARRY S. TRUMAN