Evening star., 1934-07-01

Bank Board, and which was carried
forward by Mr.. Roosevelt when he
established the Home Owners Loan
Corporation. These things are not
clean-cut contest between individuals
or between political parties. They are
a cluttered tangle of evolutionary de-
velopments to which many individuals
and both political parties have con-
tributed.
But if the new housing bill is note
worthy for its effort to revive the
activity of private capital, 1t is even
more noteworthy for its coming effort
in practice to enlarge the volume of
home construction through the good
old-fashioned. and even antique,
method Of reducing the costs which
the home builder is to incur.
There are three sorts of costs here
to be considered. There is the cost
Of financing of each home -construc-
ton project There is the cost of
building materials. And there is the
cost Of labor.
On the first point it is calculated
that the rules and regulations set up
in the bill for the scrutinizing of
mortgages will reduce the finance
cost by perhaps as much as 20 or 80
per cent. This may seem lavish
estimate. but it comes from very care
full calculators. 1t is based on the
idea that interest charges on capital
will come down if capital is in some
considerable degree comparatively in
sured against loss. Certainly this ex-
pectation seems justifiable
On the second point-the cost Of
materials-we come to a strange sit
uation. The N. r. A. building ma
| terials industries conduced to a miti-
CATION of competition and to a raising
of prices Now the administration in
tends in these industries to let COM
petition quite widely loose again and
| it intends to press the owners in
these industries toward price reduc-
| tions.
Seeks to Force Prices Down.
The N. r. A. understands this new
policy perfectly. The President stands
behind it earnestly and emphatically.
1t marks. indeed. a growth in the
scope Of his views. A short time ago
ton of the general price level of 1926.
The prices of building materials are
now some 25 per cent below the 1926
level. But the President is not going
to say, Boys, hike those prices up"
He is going to say. Bring those prices
down farther" In other words. in
stead of seeking recovery in this mat
/ ter through high prices and a small
volume of home construction work, he
| is going to seek it through lower
prices and a larger volume. Nothing
could be more in accordance with
what the old-line economists have
been telling us for four years.
On this same point negotiations
! have been opened with the railroadf
and with the railroad co-ordinator
Joseph Eastman, and it is believed
that the railroads will make reduc-
tion Of 10 per cent or the like in
the charges for building material
haulage. Meanwhile the producers OF
building materials are thought to bt
responsibly represented by. for in
stance, Lewis P. Levin. lumberman
who said to the Senate Committee on
Banking and Currency:
IF the amount of our business can
be made to increase. We are very
willing to make a percentage decrease
in prices. We want to encourage
building. We want to get it to q
maximum. We want to employ the
men who are unemployed"
But what about those men? That
is the third point in the field OF
costs. Will the unemployed men in
the building trades agree to an abate-
ment of their union wage scales in
order that they may have more en-
ployment and may make more money?
1t is vital query. The President is
interested in it. The N. R. A is in
terested in it. The N. R. A. is going
slow with certain of its regional
building trades codes, containing
the answer is going to be. Converse
tions on the subject have taken place
between representatives of the admin
istration and representatives of the
American Federation of Labor.
1t is hoped that way can be found
whereby perhaps the hourly wage
scales will not be repudiated, but the
total amount of money paid for labor
on a given home construction project
will be appreciably diminished. This
is a delicate problem in industrial
diplomacy. but there seems to be a
fai- amount of confidence here that
it will be solved, especially since a
solution would mean a vast expansion
OF the actual amount of money earned
by each employed building trades
artisan in the next few years and a
vast expansion of the number Of such
artisans actually at work.
In sum:
More private capital. Lower inter-
est rates. Lower commodity prices.
Lower transportation charges. Lower
labor costs. Is this recovery by brain
trust" phantasies and academic nov
elites? Or is it recovery by tried
and true old methods given new forms
by new ingenuities? Obviously it is
the latter and I think that thereupon
certain personal remark has to
be made.
Pays Tribute to Authors.
When a so-called brain truster"
says something which is thought wild.
he makes the front page everywhere.
When a couple of so-called brain
trusters" write a bill like the new
housing bill, which Is full of progress
siveism, but also full of sanity and
sound business sense, they ought to
make some page somewhere. So I'll
say:
This bill Is a magnificent monument
to the vibrant brains of Frank Wat
son of the Reconstruction Finance
Corporation and Winfield S. Riefier Of
the Central Statistical Board. / can
not hold 1t against those two young
men that they have brains or that
they devote them to the general profit
instead of only to their own. Nor can
I rebuke them for demonstrating that
while some of the cells of the brain
trust" may be bit pink, there are
others that are simply only chock
full of gray matter
Mr.. Watson and Mr.. Riefier thor
oughly illustrate where we are going.
We shall not have just the old deal,
| Nor shall We have INST tho neW deal