Evening star., 1923-06-09
COST Of FINANCING
BIC BUILDING ITEM
Home Builder Must Figure 1t
Largest Factor After Ma
teriaI Charges.
Who has the strangle hold on the

Who has the strangle hold on the
goldon-egg-I laying goose? That's the
big question in the construction in
dustry today. The bankers meet and
decide that the material men and
labor are wringing the goose's neck
The material men pass resolution
IL the effect that it is the banker
and labor who threaten the produc-
tion of golden eggs. and so the buck
-.is passed. Nearly every group is
willing to put the blame largely on
labor, except the labor group. which
says that when wartime prices pre-
vail in everything that we buy, why
SHOULD We not receive q wartime
wage?"
1t must he admitted that the cost of
living is as high as the cost of build
jne. Conferences recently have been
held 10 decide what should be done
about it. Some say we should stop
building, but no one has explained
row that would help the situation.
II there was not demand for build
ing there would be little construction
work. The shortage has not yet been
taken care of. In every large build
tng center labor is being paid more
han the union demands. 1t is simply
Che old rule of supply and demand"
:.nd it seems that the only remedy is
TO produce more men for the con-
struction trades.
school for HrfckIaycrs.
Some really constructive work Is
being done along this line The Com
'ilon Brick manufacturers Associa-
tion of America which is Vitally in
% rod in hrir a a
particularly. called nationa! con-
ference for the purpose of pro-
. moting bricklaying apprenticeship
SCHOOLS upon the model Cleveland
country where more bricklayers are
'.reded This conference has the CO.
operation of contractors, material
II en-. labor and architects. The archi-
trCts and builders are interested in
the briCklayer movement with a view
other trades. This, it is believed, will
:, do more to help the situation than
viii the passing Of resolutions to
stop construction. so seriously needed
III every part OF the country.
The word -profiteer" has come out
al many of the conferences held. and
il always is hurled at labor and the
material man. The facts are that
hric*' is selling at practically the
same price in every part OF the
country today that it did a year ago
today, and this in spite Of demand
which Is far IN excess of tn" supply
in many Centers.
High Financial Cost.
In all OF the publicity given to con
StructiUu in meetings, hoth local and
national. little has been said about
The cost Of financing. Simply stating
: :" fact without comment or criticism.
Il may be said that one Of the chief
Items Of expense in connection with
building is the financing In many
large apartment operations today the
money costs 20 per cent. That meal
for every 5 ZOO. 900 borrowed for the
operations only SS0G,0O0 actually goes
into land and construction. The in
terest rate may he b or : per cent.
hut this 20 per cent is q Nbonus." or
gift. to the institution furnishing the
money. which is not represented by
single brick or an ounce of steel.
Similar rates apply in the build
Ing Of home. \ man who would
borrow $4,000 for the erection of a
|. residence will probably pay not less
than 5000 as 4 bonus for IL three
year t" five-year loan. In other
words. he makes present of $500
10 the financing concern for the privi-
iege of loaning him money at I per
cent. He pays interest upon the full
$4,000 during the period of his loan.
but he actually never received SO, 600
He has placed to his credit 50, 400 and
he must invest considerable of his
own money in the lot and the early
STAGES of construction before ne re
, r=iveS a dollar Of his loan. 1t may
he six months or nine months before
al Of the loan has been paid TO him.
but he is paying / per cent upon
10000 throughout the operation.
\ man who would build a $2O,0n0
home must charge up against the op-
Grafton certainly not less than $1,000