The New York herald., 1921-04-01
Governor Miller on Housing.

Governor MILLER goes straight to-
the heart of the housing shortage
problem when he says mordlnate con-
struction costs and lakes prohibit
building. And by very reason of such
prohib!tiye costs a higher mortgage
interest rate, whether charged by
public or by private lenders, would
not help, it would hinder the con-
structlon OF an adequate supply Of
dwelling places and the return of
lower rents.
The interest load. like the deprecla
tion load. already oppresses the house
owner and the rent payer. not be-
cause of the rate OF interest charged
in percentage but because of the
amount of interest that must be paid
In dollars. When the pre-war house
that cost $4,000 10 build took $25. 900
to build during and since the war the
per cent. interest rate that amounted
TO $500 a year before climbed tos
81, $50. The per cent depreciation
charge that before counted $500 a
year now counted $1,000. The two
items that footed 5000 year before
now footed $3.50. If the interest
rate went up 10 per cent. the amount
OF interest money payable every year
would go up to $1,000 as against the
old $500. The interest and deprecia-
ton charges together would then
stand ut 3,000-all to be in the rent
AS against the former 5000.
And this terrifcally Increased load
is almost wholly labor cost charge
"a permanent load for the whole
life OF the house. 1t is almost wholly
labor cost load. because the direct
labor costs now account for 60 10 65
per cent Of the total cost OF putting
up house. The direct and indirect
labor charges together now account
for so to 80 per cent. Of the total
cost of putting up a house.
United States Senator CALDER's
Construction Committee, for example,
found that out of every dollar paid
for lumber in New York 60 cents
went into transportation charges. But
the great bulk of all the transporta
ton charges goes into railway work
ers' wages. Furthermore, the main
item In telling the timber in the for
est, getting IL to the sawmill and
handling 1t there Is the labor cost.
Also the main item in local tru king
Of the lumber is the labor cost SO
that pretty nearly the whole lumber
cost, all the way from the forest to
the site of the new house, represents
wages. The same thing Is true of
brick, Of plaster and nails, plumbing
supplies and hardware. 1t is in this
way that wages in the materials and
then the wages in putting the mate
rails into a house account for so to
90 per cent. Of Its whole cost.
There Is no way, therefore, TO get
down the cost of building houses, the
interest load, the depreciation load,
and the tax load, and there Is no way
TO get down the rent corresponding to
all these loads, except 10 cut that
direct and indirect labor cost 81 so
TO 90 per cent. Until those prohibi.
tive costs are cut, and cut heavily
there will not be any general resump-
ton OF building, there cannot be any,
no matter what schemes are agitated
and no matter what laws are passed.
But when those costs-mainly, we
repeat, labor costs--are cut from the
war basis to something like peace
basis then capital will 90, and 90
readily, into building more hous-s as
a sound and safe business proposition
where the public can pay reasonable
rents on fair building costs, and those
reasonable rents can take care of nor
NAL interest payments and deprecia-
tion allotments. not TO forget rational
taxes on rational valuations
IL