The New York herald., 1922-03-06
Continued from First Page.

Brindelfs extortions'
/ The report is divided into two parts
the first dealing with general housing
conditions with chapters devoted to the
extortions and abuses practiced by
labor union officials and tables showing
the number of indictments and prosecu-
| tons that have resulted the relation
ship between the Building Trades Coun-
| ell (Which was Brindell's individually
controlled organiZation) and the Build
ing Trades Employers Association and
price fixing and material combinations
| The second section deals with the
financial aspects Of the situa tion-the
reasons for exorbltant charges for
loans on real estate. the cause of the
\ shortage OF the market for loans on inn
proved real property and the handicaps
| that these impose on building operations.
/ This section OF the report contains
\ twelve conclusions arrived at by the
committee and which are reflected in
the legislation recommended.
| These conclusions based on testimony
| developed during the latter part of
| their investigation, the committee be-
lieve depict existing conditions, particu-
larly in New York They believe that
correction of these conditions or an
alienation OF their effect would go far
| to stimulate housing construction and
! bring rents in the congested districts
down. The conclusions are:
Il. That the ratio of income earned
/ on mortgage loans on real estate BY all
classes of insurance companies and
banking Institutions not only in the
State of New York but throughout the
United States has been greater by APP
proximately ! per cent and more stable
| and constant almost invariably than has
been the rate Of income earned on bonds
stocks and other securities of these in
stitutons Assuming the average an
nual return OF earnings on all securities
| of the companies to be per cent year
in and year out for the past IA years,
| this means that the income from mort
4 gage loans on real estate has Eeen ap-
proximatcly 20 per cent greater than
the income frcm other securities.
! 70 Notwithstanding the greater earn
\ ing power. stability and safety OF such
mortgage loans as investments. the in
surance companies and the banking in
stitutions. with the exception of the saw
1 ings banks have invested a far greater
proportion OF their resources in bonds
and stocks than in mortgage loans on
real estate.
/ 49, There has been general ten
dency on the part OF both the life insur-
ance companies and the banking insti-
tutions in the years from 1915 to 1919
| (both inclusivel TO decrease the pro-
portion of their resources invested in
mortgage loans and to correspondingly
increase their investments in bonds.
stocks and other securities
Effect of War Bonds.
~ The increase in the ratio of in
vestments of insurance companies in
United states bonds during the period
of the war when these investments were
necessary, resulted in decrease in the
! Investments in mortgage loans. in some
| instances there was also decrease in
| the investments in bonds, stocks and
other securities but not in anything like
the proportion in which the investments
on mortgage leans were decreased.
rs. All classes of insurance COM
panies of other states have invested on
the average throughout this period OF
fourteen years a far greater portion or
their available resources in mortSage
loans than have the companies in New
York State.
"6. The life insurance companies Of
New York State have invested proper
! tionately more in mortgage loans In
other states in relation to the insurance
| that they have outstanding in those
States than the insurance companies in
other States have invested in mortgage
leans in New York State in relation to
the insurance that the latter have out
| standing in the State of New York.
II. Some OF the insurance companies
have invested in mortgage loans much
smaller proportion OF their resources
than the average shown by all or the
companies combined. the investments OF
the Are, casualty fidelity. surety and
marine companies in particular being
| only small fraction OF the general av-
erage.
IS. Several life insurance companies
have invested a greater ratio OF their
available resources in stocks than the
average shown by the life Insurance
/ companies as a group.
80. The low rate of income earned
/ in the years 1919 and 1920 by some OF
\ the Are, casualty. surety, fidelity and
marine incurance companies on their
| investments in bonds. stocks and securi-
| ties other than mortgage loans is due 10
4 extraordinary losses that were incurred
| in these years in the disposition through
sale or otherwise OF railroad. public
utility and Industrial and other sccuri-
i ties OF an apparently unstable and
speculative investment value.
10. The fire, casualty, pubic liabil-
/ ity ndelity surety and marine COM
panies. especially in the State OF New
Il York have invested as rule trihinE
II
loans and negligible proportion OF
their invested assets as compared with
/ the life insurance companies and the
/ banking institutions.
I'll. There has been gradual ten
dency on the part OF the FIRE. casualty.
\ public liability. fidelity and surety COM
| panies OF New York State to decrease
y the ratio of their investments In mort
\ gage loans until they arc almost en-
I tirely excluded from their assets. This
] Is not true to anything like the same
\ extent or like companies OF other states.
~ The ratio OF total resources OF
4 the savings banks OF the state of New
York invested in mortgage loans has
been large and fairly constant. They
I increas sed slightly during the nine years
I from 1906 to 1911; but since then the
tendency has been to slightly decrease
tho ratio OF these investments the de-
I crease being. however more than offset
I Nv the increased ratio Of investments
I IL United States securities"
4 Financial side Reviewed.
4 In lis general observations. and IN
Y addition TO the specific conclusions set
\ forth. the report says of the financial
/ side or the housing question.
zone or the chief causes leadiog 70
the housing shortage has been the with