The sun., 1919-05-29
Urges Mortgages Up to $780,
600 Be Exempted From
Income Tax.
RETURN NOW TOO SMALL
Necessary to Attract Money to
Mortgage Market to Start
Building Boom.

were exempt from income taxes Il would
accomplish far more in solving the build
ing and housing problem than any other
devices that are being considered. A
building boom or great construction
period cannot be financed except through
borrowed money, he said, and so much is
required that It is necessary to make
mortgages attractive to the average
man.
you have got to raise the money" he
said. land you ought to raise the money
by natural processes, by making 1t at
tractlve to money to go into the busi-
ness; and I think the situation is so
important that it is very desirable to
tempt the average mans money into the
mortgage market by making such an
inducement TO him. You are trying to
get man to lend his. money at or at
the outside 5h per cent. and then you
are taking from that and they are be-
ginning TO find it out. 1t is the only
way you will get enough money to solve
the problem properly"
Why Mortgages Are Being Called,
Mr.. Kelsey who referred to himeelf
ana associates as merchants of mort
cages" explained that there is iis-
position on the part OF some lenders to
cali their mortgages. giving the reason
that the income taxes, surtaxes, are so
heavy that the net return from a mort
gage investment is too low, and they
do not care to continue the mortgage.
Asked by Elmer G.. Sammis. counsel to
the committee, II the sale of the Gov
eminent bonds. more or less free from
income tax, made the real estate loans
less desirable at the prevailing rates.
Mr. Kelsey replied: "Of course. a An
or AZ per cent loan free of tax was
better than per cent. loan with l or
~ per cent. taken or IT,"
What suggestion have you to offer
as to meeting the present emergency in
connection with the renting situation.
especially in the case OF profiteerlng?"
"Oh. produce more space and compe-
titicn will stop the profiteering."
referring to ''profitcering landlords"
Nj. Kelsey said there are hogs every
where and they cannot be controlled
except in the manner he suggested.
IF the attitude Of the public could
be set right he said. "and they could
realize that there Is just as much
them TO increase very much the appro-
priations which they make out of their
income for rent, just exactly as they
have had to increase II for the butcher
ano. the grocer and the shoe dealer, and
that the landlord has got to have 1t
because everything which he pays for
perhaps has doubled in price. they will
recognize that II they are going to have
landlords. and II they are going to get
VNHF 4
VIII be more space and competition can
bring the rent dow1, they have got to
pay such rent that you will get the
capital to produce the houses"
The merchant OF mortgages said
that the only thing to go by 20 In
dicate how much capital would be
necessary for building purposes to meet
the demand between now and October
Ia the mortgage statistics. In 1906 when
everything was going along serenely
and they were building all that was
needed the mortgages recorded in
Greater New York in single year were
$S72,o00.O00. Last year. he said, the
mortgages were about $l32,OOO,OOO.
THE money has been flowing away
from the mortgage market" he ex-
planned. land you have got to do some
thing to turn 1t toward it."
Mr.. Kelsey produced the record OF
of which he Is a director.
showing that the rents of 463 flats,
stores. fats and stores and dwellings
owned by the company amounted in 1918
20 1926 per cent. of the cost the run
ming expenses els per cent. and the
net return 4.0s per cent. Tho company
paid about 2.32 per cent. in taxes.
Abfam I. Elkus, chairman OF the Re-
Commission, said that the
IA IN Al ~ IA.
eral Government &c create a land bank
similar to the Government land banks
In the agricultural districts.
IF the Federal Government would
lend the money on mortgages up TO
some prcportionate part OF the value of
the property" he said. they could en-
building. and what is just as
important, the proper kind of building"
Mr.. Elkus is going to recommend to
Gov. Smith that he call on organiza-
tons to appeal to all financial and opera
tive institutions to appoint joint COM
mittees to urge Congress to remove the
Federal income tax on mortgages up to
a limited amount and to remove tho
Federal income tax on all bonds issued
by State land banks.
Mr. Elkus assured Chairman Lock-
wood and his associates that the plan
incorporate a housing corporation with
a capital stock OF $4,000, 900 to furnish
one-fifth OF fund for immediate build
ing operations is restoring confidence"
He gave a wealth of detail containing
q block survey made by the commits
sion's housing commission and said
forty to fifty thousand new apartments
are needed in the greater city.
Grosvenor Atterbury. architect, de-
scribed at length his plan for custom
made" instead of tailor made" houses
fabricated structure with ninety-iiye
pieces to the house.
The joint legislative committee will
have a hearing at 10 o'clock this morn
ing in Borough Hall. 177th street and
Third avenue, The Bronx. for the bene-
1T of Bronx residents who wish to throw
light on the housing question.
A tabulation of a survey made by
the police for the Mayors Committee
On Rent Profiteering shows that there
are 4,941 vacant apartments in the
greater city. A large number OF these
are ''old law apartments" on the East
Side.
There are 5sS,136 "old law" and
395. COS new law" apartments--a total
of 9s3.144 In the greater city. The va
,ancies are one-half Of l per cent. OF the
Total number OF apartments.