New-York tribune., 1921-07-31
Lack of Cooperation From
Labor and High Material
Costs Also Blamed for
Keeping Back Building
Revival of Activity
Needs No New Laws
Too Many Already, Declares
Expert; Explains Bonus
for Obtaining Loans
BY William M. Grcvc

It has been some time now since the
Lockwood committee made it's report
on the housing situation. and it is now
possible to get a greater perspective
of just what was accomplished by this
committee than ever before. This per
spective shows US one thing very
surely--that despite the work of the
committee the housing problem is not
yet settled and never will be by Leg
islation; it is an economic condition.
There are several angles from which
to view the work of the Lockwood
committee, one of which is to find out
whether or not the public was given
sufficient information so that it could
form fair Judgment of what was ac-
tuaMy going on in the housing field.
On the whole, but not considering poll
itics or the desire of counsel to exag-
gerate, it must be conceded that the
work of this committee was excellent,
bat that does not. mean that all de-
tails of the work gave TO the public
the real facts. but rather the facts as
colored by very expert examiner.
Briudell was successfully dealt with
md certain type of graft was stopped
to a considerable extent. But has the
cost Of labor and materials decreased
in proportion as this graft has been
wiped out? I don't think so. There
is another angle from which to con-
slider the work of the committee, name
" this. 1t was always evident to those
who were in a position to be acquainted
with the facts that the public was be-
ing supplied with great deal of incom
plete information about mortgage com
panies. which incomp}eteness amounted
practically to misinfo formation. Take, for
instance as an example, facts which
were brought out similar to the fol-
lowing and with a great deal of appar-
ent horror On the part of the examining
counsel
Bonus Not Excessive
Suppose certain mortgage loan was
made to bear s pGr cent and that a
bonus of 10 per cent was collected from
the borrower in addition TO the interest
rate This 10 per cent on a ten-year
loan should be spread over the entire
period of the loan, making l per cent
per annum, or Z per cent per annum,
which the loan actually cost the bor-
rover This fact was never brought
out in the examination of witnesses.
The public being told that 16 per cent
to 90 per cent was made on such loans.
it is no more than fair to the public
that the true facts he given. The pub
lie is well aware that the rates on in
erstrial and foreign government loans
have been around per cent during
the last year. In fact, the bond issues
offered by the French government with
in the last year cost the French govern
ment something over 10 per cent, and
l do not believe these bonds are as
staple as domestic loans backed by
first mortgages.
Now in the making of mortgage
loans by a mortgage house, it should
be we'll understood that the mortgage
house can loan money only as it finds
available funds with the public and
that in order to compete with indus
trial and other loans, the public must
be offered such liberal incomes from
its investments as 5la per cent or 6
per cent, and it likewise should be
understood that mortgage house
must maintain legal force and a
selling organization competent to make
such mortgage loans so safe that they
are worthy of the confidence which
investors place in them. One per cent
per annum is not an exorbltant fee
to charge for the tremendous amount
of detail and expenses which these
organizations take care of, free of
Charge TO the investor, especially when
it is remembered that in addition
some mortgage companies guarantee
to the investor both principal and in
terest
SO much for the back side of the
nicture. On the face of it we see
enat much good was undoubtedly ac-
complished by the investigation. The
following conclusion based on the
evidence gained by months of investi-
cation should prove of great value to
the investor who insists en- safety
and yet wants liberai and permanent
lncome
Mortgage Loans Stable
We have Overwhelmingly established
ny the mass of statistics gathered from
all sections of the country that over a
long term of years and year by year
mortgage loans on real estate have
proved the most stable, conservative
ana the best income paying investments
Of this institution.
1t is established bv the figures fur
hlshed by these corporations, tabulated
IN sucn detail and with such accuracy
shas they are not open to question. that
besides their safety this class of invest
mehSs has been yielding year in and
year out about 20 per cent higher in
come come returns than the investments on
.ohas and other securities. The fact
snat about 40 per cent of the entire
assets of the savings banks of the
ssate e are thus invested should be con-
eiuslve on this point"
some one has said that we all draw
.s1ohcluslons on too little data, but I
r,S rrninS TINS was not the case with the
..;;ocA"ood committee, whose investiga-
s.on Oh hrst mortgages as opposed to
LOCKS LOCKS and bonds extended to 1900 in
S1suelons: I think, however, that it is
aauit that the public has not been
ssuulciently Informed of the findings of
cue cue committee and is left with a CON
Used Idea of what fcrm o. investment
ofangs the best returns.
mere IS great need of mortgage
money at the present time. for al
snough Borough President Cnrran
st~Ms ~Ass an encouraging report of con-
neracelon that is now planned and re-
eorts that plans have been fled calling
LOT an expenditure of s1o0. ZOO, 900.
hmhicn Will provide for 20,s79 families
&c &c - looking for another Sl00, 600 900
W feheve the situation, and there is
great question whether or rot that