Worcester Democrat and the ledger-enterprise. (Pocomoke City, Md.) 1921-1953, 1934-11-16
ACT
CHALLENGE TO
THE DEPRESSION
Local Chairman Explains Pro-
gram More Than Revival
Of An Industry
UNJUSTIFIED LOANS
ARE NOT SOLICITED

The National Housing Act is the
Nations challenge to the forces Of de-
preston which have left in their wake
tagging construction and capital
goods industries.
Explaining the detectives Of this
highly important legislation today,
Mr.. Ashburn, Chairman of the Wor-
cester County Better Housing Cam
paign Committee pointed out that the
program is more than plan to revive
a single industry. "It is" he said, ga
broad recovery measure regarded as
one of the most far-reaching in impor-
lance that has been enacted by Con-
gress since the National Recovery Act"
at is a plan to remove the largest
remaining obstacle in the way of full
recovery" Mr.. Ashburn, declared,
zone which is destined to restore to
useful, private enterprise the largest
group of workers still unemployed.
"No single man or industry pro-
posed the National Housing Act. It is
the work of group Of leading bust
ness men, among them the heads Of
the largest commercial organizations,
banks and insurance companies and
representatives of important manufac-
turing and trading interests.
early last winter these men be-
came concerned with the slow progress
toward recovery of certain basic in
dustries. They found that whereas
consume. goods had made substan-
tial comeback since the bank holiday
of 1888, there were other industries
principally those dealing in heavy or
durable goods, that were falling far
behind. The most important of these
was the construction industry. It was
found that new home building had
dropped nearly 80 percent from the
1926-29 level, and that nearly one
third of all the families then on the re-
lief rolls were the families of workers
normally engaged in building. It was
to solve this situation that the Nation
al Housing Act became law.
ut is expected to alleviate the dis
tress among large portion Of the
100000 persons in the United States
who normally depend upon the con-
struction industry for their livelihood"
The Federal Government, through
the Housing Administration, will in
sure lending agencies against 100 per-
cent of all losses, provided the total
of such losses does not exceed 20 per-
cent of the aggregate amount of funds
advanced for property improvements.
This insurance is virtually an IRON
clad guarantee of protection for the
financial institutions. since the high
est known loss ratio on similar types
of loans has not exceeded 8 percent.
Experts in this field have expressed
the opinion that it is hardly con-
ceivable that these credits, extended
by prudent institutions, could result
in losses greatly exceeding this prev
ious experience. The insurance, they
agree, is tantamount to a complete
guarantee for financial institutions.
That is, if lending agency acquires
notes aggregating a total volume Of
100000, it will be insured against
100 per cent of loss on all items up to
total aggregate losses of $4,000.
Losses of this proportion have never
been approached in America on this
type Of business, even in the worst de-
preston years.
The Federal Housing Administration
in it's rules and regulations cover
ing the making of loans, will not re-
quire collateral, except in some cases
where the tSate law demands mort
cages as security for loans. This is
true of some building and loan associa-
tions and saving banks, but the great
majority Of loans to be made under
this plan will be in the form of char
acter loans, based solely on the rep
utation Of the borrower and his abil-
ity to repay. Endorsers and CO.
makers will not be needed.
James A. Moffett, the Housing Ad-
ministrator, emphasizes that while the
Federal Housing Administration is
anxious to receive the heartiest CO.
operation from property owners and
the public, no modernization loans that
are not fully justified on the grounds
of sound judgment are desired.