New-York tribune., 1921-05-29
Business Sense
I'm Government
Greatly Needed
Rent Laws Are Responsible
for Continued Shortage
of Homes, Also Discour-
ageMoney and Enterprise
By William M. Greve

There is no doubt that the so-coIled
rent laws have been and are accentuat
ine the so-cslled housing shortage.
Whenever there is an economic public
question affecting, as this does, pri-
yate ownership and initiative, statutes
have never teen sufficient to solve the
dificulties; rather, they have almost
invarsbly increased them. The rea-
son for this situation is that the pub-
lie grows hysterical when fomented by
legislators who want to be reelected.
In this case we have the laws and not
the houses, and we continue to have
the man who talks the loudest and
longest, bu: who brings us no results
or relief.
There is no doubt that if our leris-
latorS continue TO swallow bunk" ar
guments and repeat many of the argu-
ments made by demagogues the situa
ton Will remain as it is. or get a great
deal worse. On the other hand, if the
public wakes up and elects to Office
those who realize that the situation
is probably the most serious economic
enc with which the states-yes. the
governments confronted, there will
come a quick reversal of the present
inequitabe and conhscatory statutes.
Meantime we are not to be left en-
tirely without aid, for the city has
finally recognized the need of encour-
aging capital in the most essential en-
terprse of building. The first en-
couragement is found in the passing of
the ordinance of tax exemption for new
dwelling structures; second is the fall
ing costs of building materials, and
third, the hope that some means will
soon be found so that the landlord can
get as fair a deal as his tenant. Com
mon sense tells US that he cannot get
such deal at the present time, nor
will he as long as the question of the
amount of rent he is to receive is
passed upon by juries of tenants.
Builders Are Ready
Should this hope be realized there is
adequate assurance that the builder,
that is, the speculative builder, who
has in the past constructed approx
mately go per cent of the dwelling
houses, will be encouraged and supply
more than the required number of
dwellings. This time is probably in
the far distant future unless builders
and landlords can get by adequate
legislation some way to a fair deal-a
fair profit and fair return on their in
yestments.
And why should not the builder and
the landlord be granted such reason
able requests, for they are not alone
the benehciaries OF successful house
building They are in turn obligated
to meet the interest on loans which
they have made from financial institu
tons and which the financial institu
tons have, in turn, borrowed from the
i small and the large investor, who is
and will continue to be the very back
bone of the national economic life.
When we take into consideration
that the cost of financing has risen to
such small percentage, and that it is
fact that the interest on mortgages
is not exempt from the Federal and
state income taxes, it is a wonder that
capital continues to remain IN mort
gage securities at the present rates of
interest. There is but one explanation,
and that, | believe, is the fact that
mortgages have always been the safest
OF all securities, with the exception,
of course, of the United States govern
mental issues. Now, then, the govern
ment has its opportunity to aid its
most acute economic situation. There
is no doubt that should the income
from mortgages be exempt from the
provisions of the income tax money
will food into housing investments and
the cost of financing such projects be
materially reduced.
Labor Must Recognize Defation
In the housing situation, as in some
mems domestic affairs, it is just one
thing after another. Is it not enough
that legislators and high costs should
yex US? Must labor take an arbitrary
stand as we'll? There is but one an
aver to such questions. 1t Is that
labor in all lines of the building in
dusty, including the labor that is used
in the manufacturing of building ma
terials, must change its attitude. Sal
aries must be reduced along with re-
ductions experienced in almost every
other line of activity. There is no
alternative. The law of compensation
applies as universally as does the law
Of gravity, 1t acts just as truly with
labor in the building field as it does
with labor in transportation, produc-
ton of silk, cotton, copper, or what
net. What goes up must come down.
The laboring man cannot have living
accommodations at pre-war price when
he himself will not work for pre-war
wages. 1t is time now for him to ad-
just himself to new conditions and cir
cumstances. If labor does not recog-
nlze that the time has arrived for de-
fation, so much the worse for labor.
Money Coming From Small Investors
In some lines the laboring man is
waking up to a reasonable economic
attitude This is shown in the thou
sands of dollars worth of securities
which he is purchasing and laying away
against rainy day, and be it said IN
mis- favor that he is not investing so
much in those securities which show
huctuatlon with every breath of for
tunes wind, but in conservative mort
gage securities put out by substantial
concerns. Fortunately, too, the small
investor is learning the connection be
tween financial institutions and the
housing situation; how he can help
to remedy the situation by thrift,
prudence and safe investment in secur
i'ieS WHICH are backed by income-pro-
aeeing real estate.
There is no doubt that with the little
help which I have suggested, the real
estate loaning institutions along with
'ne savings banks and insurance COM
panies will be able to handle any new
or prospective financing Of dwelling
construction, but they have got to have
cooperation and not antagonisn
Should the State or the City of New
iork enter the field of making mort
gage loans-they would drive out many
hundred millions of dollars from first
mortgage investments. / hope and be-
neve that our legal officials will adopt
the attitude of the national govern
ment IN having less government in
BUSINESS and more business in govern
ment. Taking a broad view of the
housing situation, should say that 1t