The Washington herald., 1920-09-26
HOUSING BONDS
PLANNED n. Y.
Would Have Public Invest
To Provide Money for
Building Homes.

Sayings-loan associations have
perfected a plan for raising money
to house the masses even II bankers
should continue to refuse big loans
to residential builders.
Officers of metropolitan. state and
national associations have decided
that fully s2OO,06o,0O0 year could
be made available in the greater
city and s250.O00,o00 in the state
saws the New York World.
Their proposition has been en-
bodied in bills for the special ses-
sion of the New York Legislature.
They propose to appeal directly to
the investing public for funds. inde-
of the bankers. Their
plan would make their associations
the medium for turning the huge
aggregate of savings accumulated
by the people into the construction
of moderate-cost homes, either pri-
vate dwellings or fats.
Under State Supervision.
The State would be practically in
charge of the operation through the
State Land Bank. which is under
the supervision of the State Bank
ing Department. The Land Bank
would become the chief exchange
OF the saYings-loan bodies. while
the associations would accept de-
posits from the public in their local
districts and issue loans to builders
in the same districts. their mort
gage contracts taken as security
for such loans would be deposited
with the State Land Bank. which
in turn would issue its own bonds
against them. Such bonds have
been authorized by law as proper
investments for banks. trust com
panies, estates and institutional or
private trust funds.
To make the bonds OF the State
Land Bank more attractive TO in
vestors, the bills as framed en-
body provisions eXemptinE the
bonds and their income from State
and Federal taxation. also for eH-
! empting in similar manner the
mortgages taken by the local as
| sociations for deposit with the Local
| Bank.
Find Many Investors.
Not only would this scheme draw
many millions OF dollars every
year from waRc-earners who have
savings to bank. but 1t would also
appeal with great force to million
aire investors who are finding mucT
difficulty in securing more than
! per cent net upon their capital
The savings-Ioan associations an'
| the State Land Bank would pa!
from ~ to 6 per cent interest
| which would be tax exempt. nettini
the full amount to depOsitors o.
savings with the associations or Z
investors in Land Bank bonds.
This means would provide for al
building requirements in the way o
capital throughout the state. &C
cordinC to experts who have studie'
tho proposition. 1t would obviat
] the necessit.- of a Congressional &C
I exempting all mortgages from tn
Federal income tax. a measur
| which is strenuoUsly opposed n
banks and many Federal officers.
Sees Big Advantages.
The State superintendent o
Banks in his last annual repor
said. IF any way could be devise
by which the bonds OF the sta, s
) Land Bank could be exempted fror
Federal taxation. there never ma
been a time at which its specia
nowers could be exercised to sue
great advantage for the oehehI
the citizens of the State.
There are 254 savings-loan asso
ciations in New York. They haN
o1o oOO members and assets of SllO,
600. 900. all invested in small mrs
mortgages on homes. They ar
: growing at the rate of 10 per cen
a year. eo
In the entire country are 7,So
associations with 4.2So.OOO mem
hers and assets of S2.l21.O0O'oO'
They have been particularly flourish
ling in New Jersey, forming I'll
strnng nucleus of many towns an
icities which owe the largest part
itheir development to the associs
lions In this State. being und'
- 1.-THE Banking Department, they al
: regarded on par in respect
- stability with banks and trust CON
r panies.
= Rely on People for Funds.
They are empowered under II
I law to lend as high as so per cel
on mortgage which is oeln
I amortized at the rate Of at lea
;. 6 per cent each year. and their ave
4 age mortgage is paid up in tWel'
years. officers and directors OF II
: associations serve as public du'
t, without pay. regarding il as soci
service much in the light of churC
t and uplift work. this being e
e pecially the spirit among the 355
900 members of the Jersey associi
e tions with assets of 100000. 900.
"a President George J. Boyer. Of Il
State Inapme OF Savings and Iol