Evening star., 1936-08-08
RATE DEPRESSION
BY j. S. ASSA|LED
Building and Loan League
Directors Say Policy
Speculation Aid.


conservative uses Of money, the Gov.
ernment which hopes to save the small
individual from the evils of specula-
ton Is about to drive him headlong
into 1t, according to directors of the
United States Building and Loan
League at adjournment of the regular
meeting in Chicago this week.
Spokesman for an industry which
has $500, 100000 of the savings of
the country in its truSteeship, these
men representing all parts of the Ma
tion deplored the persistent emphasis
upon overriding the laws of supply
and demand with regard to interest
rates which "discourages every share
holder in a savings, building and loan
association, and every owner of a
savings bank account in his efforts
to build up competence by placing
his savings in sound, safe channel"
Reviewing the reports from
thousands of community home lend
ing institutions of the type which
they represent the league directors
found cause for encouragement in the
beginning to- denoted trend away
from the mania for Government loans
now that the public is aware that
F. H. A. rates are really ga per cent,
and no more liberal than the terms
procurable in many long established
institutions without the frill of
mortgage insurance.
Salvaging Job Praised.
La lx,o ,1l~ -; ;ol,
was done by the H. o. L. C. in its
three years performance ended June
13, but as suggestion for its i'm
mediate future policy advanced the
Idea that the mortgages of the
distinctly on-diStressed variety,
thousands of which are held by the
Home Owners Loan Corp. today,
should be transferred to community
Institutions capable of carrying them
with private capital.
The following is the statement in
part of the Board of Directors of the
league signed by: LeGrand w. Pellet,
Newburgh, N. Y, president H. T.
Donaldson, Lansing, Mich, first vice
president; E. c. Baltz, Washington,
D. c., second vice president; Morton
BodfiSh, Chicago, executive vice preSi-
dent; H. F. Cellarius, Cincinnati, Sec
retary I. Friedlander, HouS-
ton, Tex, immediate past president;
Raymond P. Harold, Worcester, Mass;
Charles S. Moore, Atlantic City; Will
liam e. Best, Pittsburgh; L. P. Nc
Culough, Columbus, Ohio; George E.
West, Atlanta, Ga; George E. Nc
kinnis, Shawnee, Okla; Frank o.
Schneider, Kankakee, Ill. and Edwin
M. Einstein, Fresno, Calf.
There is definite improvement in
the business situation as regards the
availability and outflow of capital
from the established thrift and home
financing institutions into the hands
OF home owners. Half a billion
dollars was loaned during the first
half of the year, more than so per
cent of it in the last three months.
The activity is such a marked i'm
provement over the situation two
years ago and even over last year
that we are justified in viewing the
scene with considerable encourage
ment.
Rates Held ga Per Cent.
''Not least among the causes of
the increased output of home owner
credit by these institutions which
have traditionally handled the job in
thousands of communities has been
the growing understanding of the
public that the rates offered by the
Eedoro1 HoIISiro Admin eHra tio,, nm
der the title 2 mutual mortgage in
surance plan really mount up to ga
per cent when the monthly service
charge and insurance premium is
figured in. The wide advertising of
these rates at 5 per cent, which is
after all only the basic figure before
service charges and premiums are
added, has initiated against institu-
tions offering money for the same or
even less actual cost on equally lib
eral terms as to time and has thus
kept out of investment many funds
which might have found profitable
use in new home construction and
modernization.
1.-The public shows a growing ten
r. H. A. about its plan. The result
Is more nearly normal demand for
the unembellished type of long-term,
monthly repayment mortgage such as
savings, building and loan associations
have developed over a century of
practice, conspicuous for the absence
of the red tape, RECOMMENDATION and
arbitrary rulings necessary in the
handling of home mortgage business
out of Washington.
Question Is Asked.
GAS we observe a growing tendency
OF the public to seek out the old
familiar sources of home loans, we
ask the significant question: Will
the savers continue to place their
FUNDS at the disposal of trustee in
etitutions such as these if the policy
Of unnecessarily depressing or de-
creasing interest rates continues on
fhe part of the public leadership of
the Nation? In order to make a
favorable market for Government
ecurities there has been persistent
Emphasis upon lower and lower in
crest rates in every channel where
money from small savers and inves-
ors has customarily been put to safe
Ind sound use.
THE farm mortgage rate has been
he core around which the low inter-
est influences have revolyed most fire.
huently, but the full import of these
~; hac