The Washington herald., 1921-07-16
Restraining Combinations Must Go,
Secretary Hoover Tells Realtors

one who knows the history OF :
single decade of America can bs
gloomy over the certainty of our
rapid recovery and our progress to
prosperity,
obviously one of the most dim.
cult problems in front of the entire
country Is that OF housing. / need
not recount. to you that the cause
OF this critical problem has been
the diversion OF our economic
strength from permanent construc-
ton to manufacture of consuma BILE
commodities during and after the
war. In 1910 we averaged abou,
l10 families for each 100 homes and
In 1920 about III families. This
indicates a shortage of nearly l.
100000 homes even on the 1910
standard. An equally disturbing
fact is that the tentative figures
from the Forthcoming census indi-
cate that the total number Of home.
owned by the occupiers has steadily
decreased. and a total of nearly SO
per cent. of our population are liv-
ing as tenants. a larger ratio than
many other countries. II we are to
build up the stability and the hap
piness Of our people. this is just the
reverse Of what should happen.
Nothing is worse than an increase
tenantry and landlordism in the
country.
"If we make study of the sug-
gested remedies for the situation
we find they fall into two general
groups-frst. those that may be
worked out by individuals or local
community action. and, second
those involving the assistance OF
the Federal government. As to the
latter, I wish to say definitely that
the Federal government has nc
notion whatever of going into the
housing business either directly or
Indirectly. 1t will not fix prices nor
wages. There are, however, three
fields in which the government can
be OF important assistance.
Three Things to be Done.
First. the government must as
matter Of primary duty drive
every combination out OF busines,
that attempts to restrain trade
Second. the government to some de.
gree directly or Indirectly controls
or obstructs the iow OF credits ano
II therefore has q responsibility to-
ward this part OF the problem
Third, the government can and
should interest itself in dissemina.
tion of information in scientific
study of certain problems in ma
terials and methods. and in coopera-
tion with the industries to receive
voluntary reduction in wastes, that
the costs Of homes may be de.
creased.
In the matter of credit the gov
eminent has considerable responsi.
| biIity and must take constructive
action to remove obstacles to which
1t is a party.
II do not think you will disagree
with me in the statement that the
tax-fee security has materially di.
verted capital that would otherwise
be available for the building indus.
try. and has resulted in increasing
Interest rates to home builders.
II think you will all agree WITH
me that the chief reliance for home
building must be upon our SAVING
institutions. II we examine these
institutions. we will find that the
total sum of money available Of this
type. either in mutual savings banks
building and loan ASSOCIATIONS, OF
in savings departments Of nationa,
or state banks and trust compan
or in the assets of our insurance
companies, will all aggregate some.
where about s22.0o0.eo0. II W.
eliminate the building and loan So.
cieties who obviously devote all OF
their assets to building and the
actual savings banks who deyo,e
from 40 to so per cent of their de.
posits to this purpose. we will finc
that the savings departments of the
national banks, of the state banks
OF the trust companies and of the
insurance companies, which COM
prise more than one-half Of the
total savings, probably do not loar
for home building more than 1,
or Is per cent OF their deposits OF
savings assets. There has been a
tendency during the last few years
for the savings of the people to 60
in an increased proportion into tn,s
latter class of institution, and to
journey thence into commercial
paper, bonds, etc. rather than into
home building.
Interest Rates.
This diversion of savings money
into commercial channels has been
very natural shift to higher rates
of interest in times of great com
modify movement. II we examine
the forthcoming census figures we
will find that the average interest
paid by home owners for loans Is
less than per cent. However, the
regular procession Of an economic
depression is first the lowering OF
prices and volume or production
with consequent reduction in amount
Of capital needed and a falling rate
of interest. We should expect this
to happen again and interest rates
to fall to the reach of the home
builder with increased sums avail
able for building.
''On the other hand, / believe that
we should have a very much more
stable economic system IL we had
more regular proportion OF our
savings available to home building.
There is, in fact, no other economic
fund than our savings institutions
from which our home building can
be safely secured. 1t would seem
to me. therefore, highly desirable