The Washington herald., 1921-01-23

ing material costs and lack of
transportation for building mater
ials.
Some sober, level-headed bust
ness men have urged that the
committee refrain from making any
recOmmendations to relieve the sit
uatiOn and have insisted that the
law of supply and demand would
take care of the situation. l
pointed out to them that there
was a demand, even a shortage.
and that there is an ample supply
Of raw material and labor, but still
that there is no active movement
in the building of homes.
States Attempt Relief.
Many Of the State legislatures
have passed bills which they felt
would furnish some relief for the
situation. In Massachusetts. for
instance. a bill was passed intend
ed to control rentals. In that Com
monweaIth other measures were
enacted giving municipalities the
right to bond themselves TO the
extent OF l per cent of their as
sessed real estate value, this money
to be used by the city for Fhome
building. In New York and New
Jersey laws were passed exempting
from taxation for period of years
new buildings erected strictly for
housing purposes. In many of the
States laws were enacted which
gave the local authorities the right
to fix the rents on dwelling houses.
Other restrictive measures of local
character have also been passed
But most of these laws have
tended to increase the housing
shortage by disCOuraging building.
1T is interesting to note that
We are not the only country which
is troubled with this same prob
lem. In France the situation has
become so bad that the govern
ment, in response to public de-
mand. has actually offered to build
ers so per cent of the cost of con-
structiOn if they would only get
busy and construct homes for the
people. In England the govern
ment is attempting to arrange for
the construction of 100000 work
ingmen's houses. These are all to
be built by the government itself
and rented at a price that will
hardly pay the interest on the cost
of construction, with the result that
some day England will face a con-
ditiOn. in attempting to pay its
housing bonds. that will, unless
extraordinary steps are taken to
prevent it, undermine her whole
business and social fabric.
Waste in Public improvements.
"The committees investigations
have convinced me that under our
present Federal taxation system
the issuance by the States of bonds
for public Improvement has been
unduly encouraged These are is
sued taX-eXempt, and wherever pub
lie interest can be secured for an
improvement of any character in
a State or any of its subdivisions,
it is easy to get money in this
manner. Not only are the funds
of the country being drawn from
industry in this manner, but vast
sums have been wasted through
the carrying on of public improve
mepts that could have waited until
business is stabilized. Men of
large incomes are drawing their
money out of active industry and
investing It in these taX-PXempt Sc
curities in order to avoid the pay
ment of taxes. These tax-exCmpt
securities have increased in the
last five years from $4,000, 900, 900
to over s14OOO,OOO 900. High taxes
and exempt securities have not
only led States to bond themselves
to such an extent that they will
some day find it difficult to meet
the obligations, but have also re-
tarded the nations business gen
orally They have resulted in
taking from the mortgage field
almost completely the private in
vestor. The interest rate on mort
cages is established in nearly every
State, and individuals of large
means who formerly invested a
considerable portion of their wealth
in mortgage investments find today,
because of high taxes, their net
profits in many cases not more
than third of what they re-
ceived before the income-tax laws
went into effect.
"I am informed that the Marshall
Field estate in Chicago, and the
estate of Hetty Green. both of
whom formerly loaned heavily on
real estate, find their incomes
from this source less than 2 per
cent, and they are divertIng their
capital funds to more lucrative in
vestments. The supply OF mort
gage money is so restricted that
today the home owner is compelled
to rely largely on savings banks
and insurance companies in the
East, and building and loan as
sbCiatiOns in the West"