The Washington times., 1922-03-25
HOUSING RESTS
0NNAT|ON-W|DE
CREDIT SYSTEM
Promoters Agitate for Release
of Bank Deposits to
Home Builders.

Can the surplus of credit re-
sources of the country be used for
relieving the general housing stu.
alton?
The Federal Reserve Banks re-
veal In their weekly reports a pleth-
ora of loanable assets and appar.
ent wealth-a result mainly of in
flation following the flotation Of
billions Of dollars in war bonds
based upon no underlying tangible
collateral. except the credit of the
Government. the proceeds having
been spent in this country and
turned into bank deposits while the
bond certificates themselves become
good collateral upon which owners
can obtain loans almost up to face
value. This forms much OF the
new so-called wealth of the country,
and real estate promoters believe it
can be made more useful to home
builders. They would transform
this huge floating mass of credit
into the fixed form Of building con-
struction.
To agitate the proposition the Ex.
ecutive Committee of the National
Association Of Real Estate Boards
met In Washington. A preliminary
outline of purposes was spread be-
fore President Harding in the fol-
lowing letter from M. Morgenthau,
jr., representing many extensive
metropolitan realty interests:
Housing Rests on Financing.
''It has been very encouraging to
note that you are taking a personal
interest in the so-called housing
problem. In recent letter you
are reported as having stated that
you do not believe any good pur-
pose will be served by holding a
national housing conference at this
time. as this. subject can be most
effectively dealt with by the local
communities. 1t seems to me that
this Is q wise decision. excepting as
to one phase of the situation. I
I'm the matter of financing new
construction, the problem is a ma.
tional rather than local one. The in
fluences which have drained tho
mortgage market are national and
even international. Moreover. after
a very careful study of the situa-
vinced that the entire housing prob
lem can only be solved when the
financial problem Is properly
solved, and that it will then be
solved in short order.
We have literally thousands Of
people here in New York City who
are anxious to build and own their
own homes in the outlying sections
and ready to make every sacrifice to
do so, but who cannot command suf-
ficient capital under the present sys-
TENS of financing home building. We
have also many responsible builders
ready to erect from five to fifty
houses each, but only very few can
secure the necessary mortgage &C.
commodations from the presents
sources of funds.
Involves Entire Country.
"This situation is not a local one.
but am told, is the same in nearly
all sections Of the country. While 1t
is not q new condition, it has been
very greatly aggravated by financial
conditions resulting from the war.
A system of long term amortiZed
should be devised on a
basis which will make it possible for
the man of moderate means to meet
the monthly payments. The present
methods of financing are either by
short term mortgages falling due
every three or five years, which may
be called just when it is most diff
cult to get money elsewhere and
therefore makes the investment
risky, or, by building loan association
requiring a payment as a
rule Of l per cent per month, which
is often too heavy a burden,