The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1919-06-16
HIGH COST OF
MONEY HINDERS
CONSTRUCTION

Now that 1t is conceded in financial
and building circles that it has been the
high cost OF money and labor and not
the high cost OF materials that has been
responsible for increased construction
costs. efforts that are being made in va
rfous municipalities to put plans into ex-
ecution whereby money may become more
available for mortgage loans, are meeting
with real success, according to The Amer
lean Architects weekly review. Most
pfactlcal OF the ideas so far advanced to
make loan money more liquid are those
Whlcn would exempt from income tax
mortgage Investments up to $4,000 or
$4,000, the Federal Loan Bank plan, and
diversion OF mortgage institution money
from Wall street investment back to
| building loans.
In the present situation when so much
depends upon speed in getting as many
homes built by autumn as possible to atd
| In the solution of the housing problem,
the exemption from income tax plan
seems to be the most practical of those
advanced. 1t would take considera BILE
1 time for the loan bank plan to be put
In operation and consequently it could
not aid much in the present emergency.
| Exemptions from state income tax can
De made quickly and then the federal
authorities can be asked to give some
exemptions in favor of mortgage holdings
up to a reasonable amount.
1t is unfair for the government to put
farm loan bonds at per cent to the in
weston and exempt it from all taxation.
That is favoring one class against tina
rest Of the people. The time should soon
come when mortgage loans for building
can be had thes anne as farm loans.
OPPONENTS of these two plans. which
have been strongly advocated by the
New York State Reconstruction COM
mission, claim that in the case of the
Federal Loan Home Bank there would
be difficulty in the selling of bonds at
this time, and that the exemption Of
Omortgage loans from the income tax is
poor principle, especially since United
States government bonds are still subject
to tax. They charge bad methods. but
is it not the best thing TO be done under
present conditions? 1t surely makes for
the hquidity of loans and that is what
counts above all else in the present sit
Iation.
In attempting to solve New York city's
problem, which may be truly said to be
barometric of conditions elsewhere in the
country, suggestions made by Samuel I'm
termeyer, widely known lawyer, include
| immediate disposal by insurance conf
panies fthe bank and other stocks
which they were required by law to dis
pose of eight years ago; the compulsory
investment in mortgages and bonds IN
unencunbered real property of one-half
ualty companies and the savings banks
of the state; and investigation by ;he
federal trade commission ITO break up
unlawful combinations that now exist in
the building trades"
The charges of Mr.. Untemeyer that in
surance companies are putting obstacles
in the way of improving housing condi-
lions by withdrawing from their former
policy Of lending on bonds and mortgages
and investing their money in Wall street
securities, brought answers from officials
of various insurance companies. The
leaning corporations brought out that
when the government put the check on
building during the it was natural
for them to seek investments in other
fields. Since 1917 there has also been
extensive subscription to government
leans and United States treasury certifi-
Gates of Indebtedness. 1t was argued that
IL It is true that the practice OF loaning
on real estate was discontinued it was
done for the purpose of responding to a
greater necessity. Mr.. Untermeyer
charged that IL twelve insurance compa-
MES would unload their railroad and in
dustrial stocks a sum of 100000 900
could be raised to aid in solving the
problem of financing new construction,