Evening star. [volume] (Washington, D.C.) 1854-1972, 1934-09-01

To the Editor Of The Star:
The announcement that the Fed
eral Housing Administration will
shortly name a super press agent fol
its publicity and sales promotion
campaign" suggests the reminder that
honesty is the best policy" and that
all the propaganda and ballyhoo
hitherto put out to mislead the little
fellow" into believing that Uncle Sam
is going into the construction and
modernization business on a sort OF
Santa Claus basis should now be re-
vised. The little fellow" in truth is
to be turned over to the tender
mercies of the small loan" shark
Federal Housing Administrator James
A. Moffett has made a good start
toward truth in defending the So
called 1912 per cent rate Of interest
and service charges for home i'm
provement loans" He calls it the
Cheapest ever devised on character
loans payable in installments, how
ever, and this is surely debatable
even though the word character" Is
inserted to obscure the fact that mil
lions of other loans, based upon value
instead of so-called character" "a
! misnomer for job or a regular in
Gomez are being made right along by
private individuals at the legal rate OF
per cent interest and are payable
in installments," too Qife insurance
and building association construction
loans, for example,.
But now that the progress toward
truth has advanced from the original
IS per cent maximum interest" an
nouncement, which meant instead q
per cent discount-and more than
512 per cent actual interest-why not
go the entire distance and admit that
| the so-called 1912 per cent rate Of
interest and service charges" Is in
fact an IL per cent actual loan
charge?
For example, the home owner wishe.
to borrow 500. He cannot get it a:
home owner, under the F. H. A., mol
will the sworn testimony of his min.
lister, his doctor, his grocer or his car
penter as to his excellent character
| get it for him unless he has a jot
or regular income paying five time!
| as much as the monthly installment
Then, he doesn't get 500 anyhow
but on three-year loan at pei
cent discount he gets $85. But he pay!
interest and service charges" on 500
amounting in all to $9.72 per year fol-
the loan of $85-or, in reality, ovel
IL per cent.
OF course, Mr.. Moffett's contention
that this new scheme Of hiding &
true II per cent charge on a loar
behind a tale of "5 per cent interest
is cheaper than other so-called Char
acter" loans-also based on jobs o.
indorsers and not at all upon rea
character true enough.
For example, I know a man wht
had a $500 Liberty bond, upon which
he foolishly imagined that one O
these new-fangled character" LOAF
companies would lend him 500 a
the legal rate of interest. According
| to their books, they debut wha
he actually got was 500, the "smal
loan" philanthropist deducting 81 TO
Service charges" and character in
vestigation." although the only bash
for the loan was the 500 Liberty bono
in the lenders vault, where it remained
until the borrower paid in fact $l0'
for the loan of 500 on the best Sc.
curity in the world Thus to borrow
500 in fact, the man paid s13 in "in.
terest and service charges" or really
nearly IA per cent interest. Yet if hi:
pext-door neighbor had charged hin
more than per cent interest, thu
neighbor could have been sent to Jail
The sooner Government bureaus
and welfare agencies stop making tn
little fellow" believe that next weel
or the week after next &c Is AWAY