Evening star., 1933-05-13
DEPRESSION BRINGS
BUILDING BENEFIT.
President Miller of National
Association Sees Changes
in Methods.

Surveying the effect Of the era OF
economic depression on home building,
william c. Miller, president OF the Ma
tional Association Of Real Estate
Boards. said today he belived 1t served
one good purpose, that of compelling
revolutionary changes In outmoded.
costly and often dangerous methods OF
financing.
In addition, he pointed out 1t cen
tered attention on the importance OF
quality in construction materials. made
a more accurate system Of accounting
imperative and brought about q new
technique tn merchandising.
With the problems Of financing, ac-
counting and merchand working
themselves out satisfactorily, Mr.. Miller
said there now remains only the matter
of how best to cope with what appears
to be a sharply rising materials market.
Records covering preceding periods
Of depression and the succeeding days
of recovery from the effects Of them
are interesting and in measure In
formative" he said but scarcely con-
elusive. Compared to this 3-year econo-
mic upheaval former depressions ap-
pear in the light Of simple economic
spasms.
Disruption Passing Off
"Today we are recovering from
critical disruption of business which
gripped and held the country over q
continuous period Of more than Al
months. During this time in many
sections the number Of permits issued
for the demolition of obsolete buildings
frequently equaled in number the per-
nits for new construction.
ITO further complicate and becloud
efforts at analysis of the existing hous-
ing situation there enters the element
of possible currency devaluation. Even
the threat, or promise OF imitation, ac-
cording to the point OF view. has al
ready served to Jump the price OF sewer
cents a foot and noticeably increase the
wholesale prices of various other COM
modities essential to home building.
Records Of the bureau of statistics,
Department Of Labor, with price levels
of 1913 selected as base, show the
prices of building materials dropped IN
the depression Of 1895-96 from 68.3 to
66, but a year later they were up to
69.7 and in 1899 had reached 1858. From
1899 to 1905 prices gradually rose until
in the early part oS 1907 they had
reached 1902. Following another brief
industrial upset in the Autumn OF 1907
THEY OlOppSd w "a ~
Immediately recovered Until in the early
part of 1918 they had passed the 1OO
base mark. Followed the Taft-Roose-
yeIt-Wilson fight for President, the
election of the latter, the Buy-a-Bale-
of-Cotton movement and sharp drop
in building material prices from 1907
to 92."
The outbreak of the war in Europe,
with it's effect on prices in the United
States, robs the figures for 1914 OF mucn
of their significance In any study OF
depressions and their after effects. Mr.
Miller points out, but he includes them
in his survey.
I'm 1915 the level was 100, in 1915
It was l57: 1920, 264. Then came the
financial upset Of 1920 and prices fell
to 1854. Before the year had passed,
however, they had stiffened and IN a
steady climb stood, in 1925, at 1884.
In that year the Governments statistics
bureau changed its key base, setting
existing levels back to 100, and short
time later another business slump shook
them down to 96.7. In 1928 the index
was 93.7 and in January. 1929, prices
stood at 96.
Figures in Contrast
"The figure for January, 1880. was
y
1891 began with 1872 and closed with
TIT. AT the beginning of 1882, prices
were recorded at TAB and for December
following at 7os. In January OF the
current year the figure was 10. For
March it was 70.3. This slight rise for
March is significant.
The records show conclusively that
q brief, sharp rise follows all periods
of depression and that this IN turn is
ordinarily succeeded by a long, slow,
steady climb back to within q few
points of where prices stood before the
trouble broke It does not follow, now
ever, that this recovery VIII work OUT
along similar lines. The three-year
suspension of building activities has un-
doubtedly created a much greater need
for housing and the advance in ma
terials prices may continue to be brisk
over an indefinite period, even If the
administration does not initiate the cur
rency.
There are many other factors af-
fecting the situation. One OF these
can be traced to the frenzy of cheap
building which began in 1918 and con-
tinued with varying intensity up to
1880. Many Of these hastily-built homes
are already unfit for habitation while
others are nearing the END OF their
utility The mortgage situation Is
clarifying itself. but the existing low
wage scale adds nothing to the plus
signs. New building codes, the tighten
ing Of zoning restrictions, changing
taste in home architecture and the de-
mand for better built houses with more
elbow room, within and without, are
other influential factors.
The home buyer Of the future Is
going to present altogether different
demands. He will be insistent IN the
matter of value and security. He,
whether renter or former home owner.
has been through his trial by fire and
is back to basic principles. A. gamble
no longer appeals to him. He is weary
Of the talk Of bargains-sick OF high.
pressure selling methods. The buyer OF
today will look at quality, permanence