The New York herald., 1922-01-23
UNTERMYER OFFERS
$1O0,OOO,O00 PLAN
Continued from First Page.

Continued from First Page.
| He told the forum he did not believe
there was any necessity Cor extending
the period of tax exemption for this
class Of building.
| IT, however. the construction Of the
| cheaper class of houses could not be
inaugurated under the plan he outlined,
he said, he saw little hope o. solving
| the housing problem. He commended
| In the warmest terms the attitude Of
| the officials of the Metropolitan Life In
surance Company, while scoring the pol
| icies Of other companies which, he said,
has been to reduce rather than increase
| their mortgage investments at time
when they were sorely needed In the
building crisis. His appreciation of the
attitude OF organized labor also was
given unstintngly.
Limitations Put on Plan.
Summarizing his proposal and its
probable effects. Mr.. Untermyer said:
you will note that "a the invest-
ment Is to be limited to 10 per cent. of
the assets; (2) that 1t Is limited In time
to the continuance OF the present emer-
gency and (S) that it Is confined to
class of tenements that will yield
per cent annual net return on rental
basis of not to exceed 80 per room,
although the figures are to be based on
SO per room. including taxes. and 90
that the rental return Is to be figured
after allowing for the taxes. that are to
&c into the reserve fund as an item Of
expense and after proper charges for
the usual depreciation.
Anr M
wages during the continuance Of this
work of construction and the only re-
mairing element Of uncertainty In the
carrying out of the plan rests with the
material men. 1t Is up to them, and
have no doubt that they will respond.
III the other companies follow along
with the Metropolitan there will be no
occasion for compelling them to invest
and keep invested a given percentage
| Of their assets In first mortgages on un-
encumbered improved property. That
will then take care Of itself If they
do not do their share in that way they
should be required to do It in the way
| OF mortgage loans to the extent to
| which the Metropolitan Life has safely
and brilliantly done its part in that
| respect.
''If it Is wise for that company. as It
| Is shown to be. to have over 40 per cent.
| Of its total assets invested In real estate
mortgages. II Is equally safe for the
others. even though their officers may
not continue to be financial magnates to
the same extent as in past years
through their use of other peoples
money In corporate enterprises over
which they have no control. AS the
owner of mortgage on real estate the
company dominates the enforcement of
its investment. AS the owner of railway
bonds II must defer to the policies of
others and has precious little to say.
besides which the latter are long term
securities. while the former are for
short terms. and are nowadays usually
accompanied by amortization provisions
that add materially to the security"
Now Up to Material Men.
| OF his negotiations with the building
materials men for a reduction in the
price of materials. the third condition
to the fulfllment of his plan. Mr.. Inter
| myer said:
II am now about to negotiate with
the manufacturers and dealers In build
ing supplies. II they will cooperate by
reduced prices for materials for this
particular venture the plan will go for
ward. but not otherwise. They will not
| be permitted--and I doubt whether they
would be inclined to take advantage OF
| the great stimulus that this project
would give to their businesses--to exact
exorbitant prices or to insist upon pres
ent prices. The construction Of these
| 1900 houses would In itself afford q
fixed, stable and reliable demand for
their output on which they could safely
rely, which would amply justify and
entitle us as a business proposition to
reduced prices.
THE amount Of the tax exemption
over the remaining period of nine years
will In itself furnish. excluding the land,
| a reserve of about 20 per cent. against
| the cost of the building. as the taxes
will he reckoned as an expense In addi-
ton to the per cent. return. but with
the intention of gradually reducing rents
so that they will always maintain q
per cent. basis of return on the invest
ment and so that az the investment IL
amortized out Of the tax exemption fund
the rents will be correspondingly re-
duced."
Mr.. Untermyer read a table showing
the total mortgage loans as compared
with the total assets OF the Metropolitan
Life Insurance Company from 1907 TO
| 1921. He used these figures to show the
steady increase by that company of the
| sort of investment he advocated as a
| solution to the housing problem. He
| pointed out that an investment OF 10
per cent. OF the Metropolitan's assets
as OF December 81. 1921, under the
terms of the proposed amendment to
the insurance law would provide a fund
Of more than $10o,000.o00. or. accord
ing to his figures. enough to provide
for more than half the housing shortage.
Other companies. he thought. would be
quick to follow the Metropolitan's lead.
Some Alternative Remedies.
Pending such solution. he said. there
were only two ways In which present
conditions might be mtigated--frst. by
1 enforcing the building and health laws
| by vigorous prosecution OF existing vio-
latlons, OF which he said there were
i 100000 lying dormant and. second. by
an amendment to the building law that
would make II possible for builders to
60 ahead with alterations and improve
rnents Of old private residences for con-
version into apartment houses to shelter
several families each. Such improve
\ ments, he said. were made well nigh i'm
possible BY many unnecessary exactions
| In the present regulations.
i Mr. IIntermycr began his address with