New-York tribune., 1921-01-02

The evil effect On the housing situa-
tion brpught about by the governments
levy on income from mortgages, while
municipal state and Federal bonds are
exempted. was frankly explained by
Walter Stabler, controller of the
TO = subcommittee of tho Ways and
Means Committee Of the House Of Rep
resentatives in Washington recently
Mr.. Stabler went to Washington to i'm
press on the committee the great
urgency OF exempting mortgages as an
expedient for improving the housing
facilities Of New York and the entire
country. for that matter. He told the
Congressman that when the tax de-
manded by tho government had been
paid q per cent mortgage did not
net more than per cent
Mr.. Stabler made q number Of sug-
Ecstions which the committee was very
pleased to receive.
In statement on tho subject to the
National Association Of Real Estate
Boards Mr.. Stabler said:
"None Of the conditions resulting
from the war is causing SO much un-
easiness and such serious discussion
as tho housing situation. By housing
l mean not only places for people to
sleep and eat, but places where they
must work and carry on their daily
vocations. Dwellings, apartments, fac
tories, stores, Office buildings, hotels
in fact, every class of building used by
man-are in short supply, and this
scarcity. is increasing. Enough has
been said and written in the last two
years as to many Of the causes of this
shortage 80 far as the supply and costs
Of labor and material are concerned.
Tho situation in these respects has
cleared to some extent-not by any
means enough nor as satisfactorily as
We could wish, but there is material to
be obtained and labor to be had but
at increasingly high prices. But we
must have buildings. even if they do
cost more than has ever been known,
and We must pay higher rents than were
ever dreamed of, for we must be pro-
tected from the elements when we sleep
and work, and we must and will adjust
ourselves to the changed conditions and
mako the best Of it.
Plenty Of Money but Net for Realty
"But tho most serious shortage in
the entire situation is the shortage of
money for mortgage loans to finance
building operations. There is ulenty
Of money in the country, but n has
been taxed out of the mortgage" mar
ket into other channels, where the
chances Of profit are greater or the in.
come taxes less, or where securities
are tax exempt. Money for mortgages
has heretofore como very largely from
INDIVIDUALS and estates, very many of
whom preferred this very safe and
sure form Of investment to other Sc
many conservative men Of large means
invest the funds Of their estates in
bonds and mortgages. I doubt if this
practice Will be continued 80 long as
the income taxes on large incomes re-
main as high as now. When a gross in
terest rate Of per cent is reduced by
income taxes to = net Of 2 to per
cent, the non-taxable municipal or
state or county or school or even road
bonds Rsying ~ to per cent net arc
in the entire removal from the real
estate mortgage market Of untold mill
ions OF money, and this process will
continue unless the income tax laws are
SO modified that investors will feel ius-
titled in again putting their funds into
mortgages. They snrely cannot be ex-
pected to leave their money in highly
taxed mortgages or mako new invest
ments Of this kind, when there are
many other perfectly safe securities
which will pay twice as much because
Of tax exemption. Holders Of mort
cages In large sums, and estates, for
merly heavy investors in such securi-
ties, are calling these loans as rapidly
as they come due, often to the serious
Inconvenience Of the property owners.
Many Of our largest real estate owners
areselling their holdings and requir-
ing payment in full in cash. The
tho money needed TO pay all cash for
which are not so heavily taxed or are
practically tax exempt. This removes
from the mortgage market just 80 much
money that could have been used for
the production Of new buildings.
Way to Regain Vanished Funds
at is. therefore, imperative that tn.
funds OF individual investors and es-
tates be induced to return to the mort
gage market it We are to have any re-
sumption Of building that will begin
to relieve the present serious situation
Commissions and committees may
meet and resolve and report and sug-
Rest, but tAis does not produce hous-
ing. We have four years Of nearly
total cessation Of building to make up
and we eannot make ~ up and We can
never catch up unless We 20 at it With
unsual v1gor. But W cannot 70 At
IT unless We have the usual funds for
mortgages, and these funds cannot be
mad unless thers IL relief from income
tax requirements on mortgage interest
until the shortage is greatly relieved.
Then, too, we must remember that 1t
requires fully twice as much money to
We havs = vastly smaller sum to use
Tor vastly larger need.
"How can this situation be improved,