The evening world., 1920-09-11
CALDER SUGGESTS
Home LGAN BANKS
UNDERU.S.CO CONTROL
Senator May Draft Bill to
Ameliorate the Desperate
Housing Conditions.
WOULD LOOSEN CASH.
Another Plan Is to Utilize
Millions in Postal Saw
ings Banks.
WOULD LOOSEN CASH.
By StGnIeV Mitchell.


Calder Of Brooklyn ls working on a
Vian to meet the inability OF the
Federal Reserve Board TO aid in the
present emergency shortage OF mort
sage money 20 build homes. Senator
Calder IL Chairman OF the Senate
Committee on Reconstruction and II
a practical builder OF houses. He has
had an opportunity to study the vari-
oes angles OF the problem, through
the testimony OF real estate, labor
and financial men who have appeared
before the committee.
''rhere Is no question about the Inn
perative need for a financial system
that can provide elasticity TO meet
the demand for long-term loans"
Senator Calder said after reading the
facts presented in the The Evening
World.
'sThe Federal Reserve System has
functioned for commercial interests
and has carried them through the
expansion period. Housing has had
no such aid. and must have It before
a comprehensive building programme
can be carried through. The require
ment u for a financial system that
will do for mortgage loans what the
Federal Reserve System does for
business loans. Il could be modelled
along the lines that have worked well
Ia Norway and other European coun-
tries It should not work in oOmpeti-
A..e T..
harmony with It. Not being banker.
4 hesitate 70 specify exactly how the
Federal Reserve should be used In
fafs crisis without thorough consid-
eration.''
WOULD PUT HOME LOANS UN-
DER GOVERNMENT WING.
one feature OF the plan Senator
Calder has in mind Is a Home Loan
Bank. under the wing Of tho Govern
lnent. to take mortgages on homes
and turn them into more easily mar
kstable securities.
Another feature he is considering
II an extension OF the Postal Saw
ings System along lines suggested by
Eugene Meyer Jr, former Managing
Director OF the War Finance Cor
poraton, No. IL Wall Street. Mr..
Meyer who appeared before the Re-
construction Committee recently to
urge his plan. said yesterday that he
believed the Postal Savings System
could be a big help In solving the
financial puzzle.
"While the Government has pro-
vlsed the Federal Reserve System TO
furnish financial assistance to the
bankers and Industries OF the coun-
try. not enough has been done to
furnish banking facilities TO the
great body OF the common people,"
Mr. Meyer said.
"By increasing the interest rate to
per cent, instead OF per cent. now
paid, at least $3.50, 0OO, 900 can be
drawn from the stocking banks OF
the public and used to stabilize Gov.
aTament securities. Huge funds
would become available for mortgage
loans and the Postal Savings would
form a nucleus for the savings OF the
people to finance long term invest
ments.
WHERE THE FEDERAL RESERVE.
FAILS.
The Federal Reserve was not de-
signed TO care for needs OF long time
Investment" Mr.. Meyer continued, in
ARANs0A~C ~ NhN REOROdl AuInOrlLe
the diBcounting OF mortgages within
certain limitations. The MORTGAGE
money strtngency is due largely to
the rates OF interest paid BY other
inrestmonts. The Government AL
wayB a preferred borrower, Is nav
ing 8 per cent. The French Loan
JUST noated paid 8. Mortgage mon
ey could be obtained In competition
with such rates. but the ustlry laws
foFtid more than 6 per cent, and a
rata higher than that Is considered
exceasive on long time loans 10 A.
nance housing"
Mr.. Meyer said the present Postal
Savings funds. amounting 10 more
than ei67 100000, according 20 the
last annual report, are redeposited in
Federal Reserve System banks at az
per cent, a slight advance over the
rate paid by the Government.
DbvlOusly, these savings become
available for Federal Reserve pur-
poses rather than long-term loana
such as home building invoIvea
Banks In the system do not entirely
coafne themselves To securities ac-
ceptaDie Tor rediscOunt and the issue
pf currency against them, but II is the
natural tendency OF bankers 10 prefer
securities on which they may realize
y 20 easy a manner.
How far the amount obtalnabia
through the Postal Savings system
would 80 to meet the mortQage
money shortage here may be judged
from comparison OF annual totals.
Inc average amounts loaned annu-
ally in Manhattan, Bronx ana Rrook.
lyn from 1906 TO 1914 was S4T2. 900
600 From 1915 TO 1913 the averaTe
was atsS. 900. 900. ''se
These figures were compiled by p
Il. Miller Director Of the Division IN
Public Works and Construction De
Nelopment IN the United States De-
partment OF Labor. associated with
senator Calder In the Reconst rliction
Committee. for which he Is compiling
statiEtical data.
FEDERAL RESERVE BARRIERS IN
WAY OF LONG CREDITS.
The National Banking System has
grown 20 an extraordinary degree.
Mr. Miller said ssgeriotta cor,.tal,l