From its inception, the Federal Home Loan Bank System was a source of political intrigue.
In his memoirs, former Senate Majority Leader James E. Watson, R-Ind., recalled the legislative sleight of hand without which the system might never have gotten off the ground.
It was the final day of Congress in 1932. Legislation to create the system had passed, but an appropriations bill to fund it had stalled in the Senate.
Because it was so late in the session, the only way the Senate could pass the bill was by unanimous consent, and Sen. James Couzens, R-Mich., had told Sen. Watson that he intended to block it.
Sen. Watson, who had personally shepherded the measure through the Senate, was not about to see all his work evaporate for a lack of funding. "I immediately began to cudgel my brains for an efficacious method of securing the appropriation anyhow," he wrote in "As I Knew Them: Memoirs of James E. Watson," which was published four years later.
The scheme he dreamed up required the cooperation of the Senate Appropriations Committee chairman, who, with the session about to expire, was moving a noncontroversial bill to pay for the widening of Virginia Avenue in the District of Columbia.
Moments after that bill was put before the Senate for consideration, the Appropriations chairman offered an amendment striking the bulk of the language and substituting Sen. Watson's desired Home Loan bank funding. A compliant Vice President Charles Curtis, who was presiding over the Senate, called for an immediate vote, and before Sen. Couzens knew what had happened, funding for the system had been adopted.
With barely disguised glee, Sen. Watson wrote that when Sen. Couzens realized what had happened, he "took to the floor and made a very bitter personal attack on me, so bitter indeed, that he was twice called to order by the Vice President."
