Evening star., 1936-03-14

CONTINUED From First Page)
TO be loaded down with the poorest Of
mortgages.
Six major reasons for opposition to
The proposal are accompanied by COM
nent on each section of the bill. The
statement comes from the Board Of
Directors Of the league, representatives
of the $1,000 100000 thrift and home
financing business from all parts of
the country. together with the league
oficers-L W. PeHett. Newburgh. NJ
Y: Harold T. Donaldson, Lansing,
Mich; E. c. BaltZ, Washington; H.
F. Cellarius. Cincinnati. Ohio, and
Morton Bodhsh, Chicago.
The savings, building and loan
leaders hold:
l. That the proposed bank is not
needed to foster home ownership, that
the arrangements now existing in the
Federal Governments program and
in the resources and efforts Of thou
sands of building and loan associ-
etions, savings banks. insurance COM
panies and other State and local ia
cilities are adequate to finance home
ownership. They say that this being
the case there is no justification for
the Governments establishing a cor
poration to finance other types Of
real estate. there being social impli-
cations in the fostering of home own
ersrip which do not carry over into
a situation where the Government
would be financing Office buildings,
hotels, business blocks and other prop
critics owned and operated exclusively
for private profit.
2. That the country should hesi-
tate before adding more devices
for creating real estate credit when it
is just now merging from the most
excessive amount of urban financing
that any country has ever experienced.
The proposed bank to buy mortgages
without recourse on all types of prop
erty would invite a repetition Of the
pre-depression excesses in real estate
financing.
Another Group Certain.
3. Since the central bank would
have to establish branches and employ
agents. appraisers and property man
ayers in all parts of the country, an
other group of ofice-holders would
grow up with the perfectly human
motivation of making business for the
bank whether it was needed or not in
order to perpetuate their own jobs.
Such an addition to Federal Govern
ment personnel and activities seems
neither wise nor necessary at this
time, is the comment.
T. That the scarcity of mortgage
funds which this proposed institution
hopes to alleviate always arises in
times of business crisis and depression
and that there is no indication that
In such times a central real estate
mortgage bank could market large
amounts of securities.
Real estate credits are essentially
slow or frozen credits, and the funds
must be sought from sources which
are willing to accept the perils and in
conveniences Of this type Of invest
ment," says the league statement.
"Such a central mortgage bank would
real estate investments. nor would it
hquefy mortgages, because it is doubt
full whether the bond market or the
conservative banking and investment
institutions of the country would pur-
chase or absorb large amounts of the
securities Of this type Of an organiza-
tion, issued in periods of real estate
def1ation or general financial distress"
S. That local management, local
attention and efficiency in making
collections, In checking taxes, and in
handling the administrative problems
which arise in periods of depression
are the essence of safe mortgage lend
ing, particularly If the loans are to go
beyond the conventional, non-risk,
1880 per cent point.
Ownership Possibility.
at is appalling to think of the
amount Of real estate that such a
Federal mortgage bank would have
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