The New York herald., 1921-05-16
Continued from First Page.

Continued from First PdOe.
accountants have gathered bushels OF
evidence on this subject Ii is one Of
Usurious rates have been demanded as
an ordinary thing, this evidence shows
| The committee will prove, it is expected,
that big Institutions and prominent
| bankers have made a practice OF COM
pelling builders seeking loans to accept
Liberty bonds at par and swamp lands
at high prices as preliminary to getting
loans for building
Liberty Bonds Sold mt Par.
Through this channel banking instltu-
tions have unloaded at par the Liberty
bonds which cramned their safes and
have gotten rid OF much undesirable real
estate The applicant for the loan was
compelled under the system to take over
these securities from the banks, prece-
dent to getting money for his building
enterprise, and thereupon was able 10
get back from the bank liberal loan on
those same securities. The committee
has evidence of hundreds of these trans
actions, every one of which fell heavily
on the builder.
inquiry will deal with the activites OF
fire. insurance, trust and other banking
corporations which have been unre-
strained In their investments ond nave
carried on all kinds of stock sepculatlons
in preference TO putting their surplus
funds into real estate loans. Some afnaz-
ing speculations will be shown. How
corporation managers have used their
funds In stock maf,ipu!nlions will be re-
veaed, II Is expected.
Mr. Untermyer has shown recently
that the fire insurance companies are
law unto themselves IN this city, op-
Grating without State regulation. He
will spend a few days more on tho in
surance subject. tho purpose being to
show that mutual companies are ex-
cluded from business here that brokers
are outlawsd unless they do as they
are told.
This last work. practically winding
up the active investigating by the COM
mlttee, Is expected to be fully as i'm
portant In its results to the building
trade as anything yet done.
1t Is estimated that IL State banks
fire. surety and trust companies are
compelled to invest a certain proper
ton of their reserves in real estate
mortgages, as the committee will recon-
mend that at least $4,000 900 will be
released in this State for mortgages
for building purposes.
/ The committee viii recommend that
| fire and surety companies be compelled
10 put "A per cent. OF their reserves
into real estate mortgages. the same as
savings banks now do. The State banks
and trust companies will be asked. in
the committees recommendations to put
at least 10 per cent or their surplus
| funds into this class of investments
THE New YORK HERALD is able to
announce to-day that as far as the
Lockwood committees recommendations
have been reduced 10 definite terms, to
be presented in its findings 10 the Leg
islature for law making. the following
are the specific proposals outlined:
Every contractor dealing
l.. with the city will be COM
PEELED TO file list OF his subcontrac-
tors and copies OF their contracts,
giving all terms, within ten days
after made.
- All contractors shall be re-
q. auircd to give to the city the
privilege Of suhrogation 10 subcon-
tractors to prevent recurrence Of the
1 iiasco in the Cumberland Street Hos
J pital deal Contracts with suocon-
tlHrAulh NOfhHS tot lHe CITY VIII
contain this provision.
d Every contractor and subcon-
-. tractor doing business with
the city shall agree that he does not
compare bids that he Is not a mem
ber Of any price fixing combination
that he belongs TO no association
which prevents him from free and
unrestricted bidding that has for any
reason been abandoned.
Conspiracy to defraud the
Afe city shall be made "A felony.
FofbiddinG agreements be-
-. tween Ia Dor and employer
whereby the union fixes the price 81
labor to the employer or what may
be charged by the emploer or that
gives any preference to the employer
who accepts iabor's terms.
n Requiring financial institu-
o. tions. and especially FIRE In
surance companies which do not in
vest IN real estate mortgages. to put