Payette enterprise. (Payette, Canyon Co., Idaho) 1909-1935, 1921-09-01
MAKING SAVINGS DEPOSITS
AVAILABLE FOR
HOME BUILDING

In notable address before the
National Association OF Real Estate
Boards in Chicago recently Secretary
of Commerce Herbert Hoover offered
some suggestions as to legislation
that would be helpful in making avail
able more money for necessary home
building throughout the country that
/ ought to receive the earnest attention
of lumbermen and business men gen
orally through their associations and
commercial organizations. Secretary
Hoover said:
Il think you will all agree with me
| that the chief reliance for home
building must be upon our savings
institutions. Ii we examine these in
situations, we shall find that the
money available OF this type, in
mutual savings bank, building and
loan associations, in savings depart
ments of national and state banks
and trust companies, and in the as
! sets of our insurance companies, will
aggregate somewhere about $22,00O,-
| 900, 900.
'lf we eliminate the building and
| loan societies, which obviously devote
all their assets to building; and the
actual savings banks, which devote
! from 40 to 90 per cent OF their de-
| posits to this purpose we shall find
] that the savings departments of the
national banks, of the state banks,
of the trust companies and of the in
surance companies, which comprise
more than one-half the total savings,
| probably do not loan for home build
| ing more than 10 to Is per cent OF
\ their deposits or savings assets.
There has been tendency during
the last few years for the savings
OF the people to go in an increased
proportion into this latter class of in
stitution, and to journey thence into
commercial paper, bonds, etc, rather
than into home building
This diversion of savings money
into commercial channels has been a
very natural shift to higher rates of
interest in times of great commodity
movement. II we examine the forth
coming census figures we will find
that the average interest paid by
home owners for loans in the last
ten years is less than per cent.
However, the regular procession
of an economic depression is, first,
the lowering of prices and volume OF
production, with consequent reduc
ton in amount of capital needed and
falling rate of interest. We should
expect this to happen again and inter
est rates to fall to the reach of the
home builder with increased sums
available for building
ION the other hand, believe that (
we should have a much more stable |
economic system if we had a more |
regular proportion of our savings |
available for home building. There !
is, in fact, no other economic fund /
than that in our savings institutions
from which money for our home |
building can be safely secured. 1t !
would seem to me, therefore, highly |
desirable that the amendment pro-
posed to the Federal Reserve Act, by
which the larger proportion of the
savings deposits of national banks
may be used for building purposes, is
an advisable change There is an
ample margin for a great increase in
this respect, leaving ample proper
ton of liquid funds.
There is another diversion of saw
ings that l think is worthy of con-
sideration, and that is the postal saw
ings system. In this system the de-
posits are so redeposited as to flow
into commercial purposes. 1t would
seem constructive thing if 40 or so
per cent. of deposits in postal savings
banks could be diverted to home
building as is the case in the savings
banks. l am convinced that an extern
sion of the postal savings activities
would mobilize a considerable fund
OF boarded money, and by action such
as here outlined we should increase
substantially the available sums for
home building. Any such proposal
can be surrounded with the necessary
requirements of local application and
perfect safety in investment by filter
ing the money through existing build
ing institutions
Here is offered definite program
that should enlist the hearty sup
port of every good citizen. If we
agree that the safety of our national
life and the perpetuity of our Govern
ment depend eventually upon in
creased home ownership then we
must agree that every step taken to
bring more quickly to fruition the
suggestions offered by Mr.. Hoover is
worth while and that the result will
be worth the best effort of every
good citizen.