The circle banner. [volume] (Circle, Mont.) 1914-1939, 1924-01-18
TOM STOUT TALKS
OF CALIFORNIA
SAYS LOS ANGELES HAS PASSED
POINT OF SATURATION AND
HAS TOO MANY PEOPLE
Banks Are Making No More Loans on
Real Estate; Many Who Have
Gone There to Locate VIII Return
to Their Homes.

The Los Angeles area of CalifOr-
mia has passed the point of satura-
ton, in the sense in which that
term applies to population. This
winter, many thousands of persons
are located there who have no
prospect of sustaining themselves
permanently by means of employ
ment or by consistently engaging
in business or placing investments,
with the result that there inevita-
bly, will be a compulsory exodus
when true values are determined.
That is the observation of Tom
Stout, editor of the Lewistown Demo-
crat-News, who has just returned
from California.
Nobody who has been in .Califor
nia-and that includes good num-
Der of Montana people-w would want
to detract from that states wonder
full advantages" said Mr.. Stout, "but
to the unbiased observer it seems
very certain that California, espe-
cially the Los Angeles area, has been
overdone. This portion of Califor-
MIA is huge, versatile, virile terri
tory, one that in any event would go
forward under its own momentum,
but in my opinion the population has
become greater during the last few
years than can be normally absorbed.
There is ample evidence that this is
true, even when to the sustaining
power of the areas production is
added the outside capital that has
been taken there in very large
amounts.
Realty Values inflated
"Real estate values have been in
lated to point that bears little |
more than a remote relationship to |
formal. The housing of the surplus
population and the hustle and hustle |
Ind confusion that always attends
loom period had created a situation
hat would seem to me as involving
. large element of hazard. The OBJ
erver's conclusion in that regard is
ignificantly confirmed, it seems to
ne, by the indication that California
BUSINESS men are beginning to realize
hat there must be taken into con-
liberation the fact that there is a
afety limit that cannot be ignored.
"The trend of thought among bust
ess men in Los Angeles is apparent
n policy that now is in effect with
he banks. Through an agreement
ntered into by banking houses of
hat city, no real estate loans have
cen made by concerns of this kind
ince November 1. The agreement
7as entered into for period of go !
avs, which would make it expire
'ebruary 1, but there is strong in
ication that after that date it will +
e continued indefinitely.
'The situation confronting Los An
eles bankers can in a measure be
by an instance personally {
Tas familiar with. A former Mon 3
ana man now in California paid :
$3.50 for his residence and only re- s
emily was offered a loan of $4,000 I
n this property. 1t is not unreason- I
BILE to think that the value in this /
lstance has been tremendously in 6
ated by the boom, and the reason +
,r the action taken by the Los An 7
eles banks is rather apparent when 2
is remembered that there undoubt- :
dly are thousands of parallel cases. '
Many Families Leave Ii
There seems to be ample proof b
lat many of the new arrivals in the Y
os Angeles area are themselves be- t
inning to realize that the satura- g
on point has been passed. I OBJ i
lined no statistics but large num-