The New York herald., 1921-01-23
FLAT BUILDERS ARE
NOT SEEKING LOANS
Title Guarantee and Trust Co.
Has Had One Application
Since Close Of War.

Savings banks and other financial in
stitutions are absolved from Responsible
ity for the lack of new residential build
ings by Clarence il. Kelsey. president
OF the Title Guarantee and Trust Com
pany. in his annual report made to the
stockholders and trustees of that insI-
tuition last week.
"It may be of interest to know" said
Mr.. Kelsey, that since the war ended
we have received in our New York Of
flee but one application for building
loan for an apartment house We made
the loan and the house was built.
I'VE have received innumerable re-
quests for money TO build garages and
buildings for business purposes, but the
builders seem very wary of going into
housing cons struction. In 1912 we sold
a little more than $4,000 900 of mort
gages. but every year since the figure
has fallen below that amount.
Much has been said In the public
press and elsewhere about the obligation
of savings banks and financial institu-
tions to help the housing problem by
investing In mortgages on homes. As
matter of fact the blame for the lack OF
housing does not lie with either the saw
lngs banks or the financial institutions.
II results from basic economic condi-
tions.
Some OF the Lions In the Way.
First il was the high cost Of labor
and material A building erected under
present prices will not be able TO COM
pete with one built five years from now
II expected cost reductions take place.
The initial cost would oe too high. How
ever. this first cost is not all Even
after the prices OF materials and labor
showed some signs OF decreasing build
9 rq hftff pfr
The reason was apparent. The Legisla-
ture began to take a hand at determine
ing what income an owner could receive
from such N investment The owner
could not charge what his premises were
worth He must charge what some Mag
istrate decided they were worth. Tho
laws bearing on this subject passed last
January were not considered sufficiently
stringent, and others were passed at a
special session of the Legislature. No
builder knows what laws will be passed
at the next session of the Legislature.
and he is naturally timid about invest
ing his capital In housing under such
circumstances
III the high cost OF labor and ma
terials were taken care Of and IL the
law of supply and demand were allowed
20 settle rents the builders would prob
ably he anxious TO build apartment
houses. Then would come the question
OF whether money could be found in suf-
hcient quantities.
Cure all plans have been proposed 10
solve the building situation by having
tic city or ;he state furnish 10000, 900
or even $40. 600. 900 for mortgages. There
sums are "a mere drop In the bucket. II
would take perhaps $500. 900 900 10 solve
satisfactorily the housing proposition in
Greater New York. Where is this money
to como from? Over s12.000.000 that
we have found FOR mortgages this year
has come from the small investor. the
man with $4,000 or less 20, invest The
man who had more would not invest 10
in mortgages because the surtax imposed
upon him by our present income tan
laws would reduce his income from his
mortgage investments so materially that
he could not afford TO make them.
city Subsidies VIII Never Help.
Tho necessary money for furnishing
housing for New York cannot be sup
piled except from the great body of in
vestors who arc to-day driven by the
high surtaxes to Investment IN nom
taxable securities. No city funds. 10
funds available from savings banks
alone or financial institutions can ever
meet the requirements. The money
must come from the great body OF citi-
zens men who can invest from $4,000
10 100000 each in mortgages. II our
Income tax laws are revised so that
such people can put their money into
mortgages then VIC Will have money
for housing In Greater New York and
we will not have Il IN any other way.
'Tt r. a three legged stool. Labor
and materials form one leg. freedom
from lcri slatlve restraint forms an
other leg and tho other leg IL capital.
The stool cannot stand up IL any ore
of the legs is mi ssing.
"ln sritc OF many ha0dcaps tho
mortgage business for the ycar has
been better than for seven years past.
The mortgages we have made and dis
posed Of during The year, both guaran-
tccd and urguarantced. amount 90 S50.-
o34 se2, and OF these si2i63.037 were
sold through mortgage certificates 10
6.745 people. Tho growth of this busi-
ness with small investors shows what
great service this company can render
IN Inducing the average man to invest
safely rather than speculats with his
savings"