Evening star., 1934-09-17
LUMBER PRICES II
HELDAT BOTTOM
Carlisle Davidson Makes OBJ
servation in Backing Mod
ernization Program.

Lumber prices are now at legal
rock bottom, according 10 Carlisle
Davidson of the National Lumber
Manufacturer Association. writing
in support of the Federal Housing
Administrators home-modernization
program.
Prices cannot 90 down under the
N. r. A. code, but they might 60 UP,
he said.
Inasmuch as % per cent Of de-
tached dwellings of the country are Of
frame construction, these facts should
be of interest to home owners con-
templating modernization as urged by
the housing agency.
Minimum cost protection prices es-
tablished under the N. r. A., Da-
wilson pointed out, we're intended to
indicate merely the marlet bottom
the levels below which prices would
not be permitted to sag-but they
have become in practice the actual
market. the maximum as well as the
minimum.
The lumber manufacturers repre-
sentative also took up the much
discussed interest rate" established
for Federal Houseing Administration
modernization loans. He said:
with the PRONUNCIATION by the
Federal Housing Administration Of
its Table of Calculations of allowed
interest charges for insured mod
ernization loans, prepared for the
information Of financial institutions,
there was heard no little comment
concerning the rate. Without watt
ing for sufficient information, critics
rushed into print with the state
ment that merely because bankers
were allowed to discount these loans
instead Of figuring interest on 6irnin-
ishing balances, they were assured
Of a net return greater than the
per cent originally contemplated
This buzz of criticism, instead Of
increasing to a roar, subsided TO a
chirp when it was pointed out that
the small installment loan borrower
was really nothing out of pocket by
paying his interest in advance. De-
spite all the fuss made because he
received but $95 in exchange for his
one-year 500 note, and had to begin
paying the loan back in a month, with
continuous monthly payments at the
rate of 1894 each, the fact remains
that he suffers no loss, because there
is small likelihood of his finding any
opportunity to invest such sum for
short time with safety at q return
worth collecting.
"On the other hand, lenders say
that their net income, after all the
costs Of handling many accounts to
make up the amount of one ordinary
commercial loan, will not be more
than per cent.
''The chief error lay in comparing
these loans with commercial paper
or with mortgages backed by gilt
edged security. These rates for un-
secured, unindorsed installment loans
can hardly be compared with charges
frequently exacted in the past from
the small borrower who had no Sc
curity to offer other than his good
name and his income.
However, laying aside the matter
Of discount VS.. interest, there is no
question that the home owner will
save many dollar by taking the
plunge quickly. by going ahead With,
out delay to effect needed repairs or
to treat himself and his family to
such new beauty, comfort and con-
venience in the home as his desire
and status in life indicate to be
necessary or advisable. For the cost
of effecting changes now is so low
by comparison with what it Is likely
to be in the future that any quibbling
over a few pennies in interest or dis
count seems almost irrelevant and
immaterial."