Evening star., 1937-11-29

national mortgage association deben-
lures.
Another of the suggested amend
ments that regard as of special i'm
portance would make the limitation
OF $4,000, ,000, 900 on the amount Of
mortgages insurable under the Ma
tional Housing Act apply to the
amount OF insurance to be outstand-
ing at any time and would remove
the limitation Of July /, 1889 now
applicable to the ultimate guaranty
of the Federal Government. These
changes would measurably encourage
private financing under the act with
out increasing the amount OF the con-
tingent guaranty provided in the ex-
isting legislation. In connection with
these changes, I would suggest that
the Congress eventually limit the in
surance Of mortgages to housing on
which the application for mortgage
insurance is approved prior to the be-
ginning Of construction.
Finally, I am suggesting that in
surance be provided for repair and
modernization loans in q manner sim
liar to that which was formerly pro-
vided under Title I OF the National
Housing Act. This former provision
expired by limitation on April l Of
the present year.
Considered in relation to existing
provisions Of the National Housing Act,
the Federal Reserve Act, the Federal
Home Loan Bank Act, and extensive
enabling legislation that has been en-
acted for the several States, the adop-
ton Of these measures would for the
first time provide all the financial
mechanisms essential to a widespread
and sustained revival of housing con
struction. The terms OF financing
would be the most favorable ever made
generally available in this country fol-
housing purposes-haH, or less thar
half, the cost OF loans Of comparable
proportions under the system Of first
second and third mortgage financing
that was widely prevalent in the 1920's
Large and continuous activity and EN-.
ployment in housing construction
which is not feasible under our presen,
limited methods Of financing, would bt
put decisively on practicable basis.
Corporation Vital
To Success Of Program.
The success Of such q program Al
this, however, cannot be assured b,
governmental action alone. It viii
depend mainly on the willingness O.
industry and labor to cooperate in pro-
ducing housing at costs that are with.
in the reach Of the mass OF our peo.
pie. The goal at which both industr,
and labor should aim Is sustained
large-scale production at lower cost!
to the consumer. This will mean {
larger annual wage for labor becaus.
Of the larger amount OF employment
than is possible at high hourly rate!
with long periods Of unemployment
1t will mean a larger annual income
for industry because OF the larger vol.
ume Of production than Is possible a
high-unit prices with greatly restricted
output.
Because this was not the goal Of in.
dustry and labor during the past con.
struction year, the result soon proved
injurious not only to the building in.
dustry and its workers, but to busines.
and employment generally. The SHARP
rise Of wage rates and prices in thi.
industry, just before the last building
season, reduced by 100000 to $50 00t
the number Of new dwelling units thai
competent authorities had estimated
were in prospect for 1887.
It is now clear that we cannot have
strong revival Of housing construc.
ton on the terms that were exacted
by industry and labor last spring
The rise in hourly wage rates ano
in material prices was too rapid ano
too great for the consumer to bear
A similar rise IN costs likewise checked
production and buying in other in.
dustries as well. In emphasizing thesl
facts, I am not seeking to apportior
blame, for manifestly no industrial
| or labor groups would deliberately
adopt policy that would react tt
their own disadvantage. I am simply
| pointing out what did occur anc
what the consequences were.
In the budget of the great mass o1
our families, the point is quickly
reached where increased costs NEAR
reduced consumption. Reduced con.
sumption, In turn, means q declin,
in some ones business and som.
ones employment. The essentia
problem Of the construction industr,
and its workers, then, IL to fnd {
reasonable way, through continuity o.
production and employment, to adjus,
the costs Of housing to the consumer,
means.
To help attain this end, 1t is my
intention to initiate . series Of con.
ferences with representatives Of in.
dustry, labor and finance, with {
view to giving housing construction
. fresh start in the coming buildinl
year and averting = recurrence ol
the conditions that brought about
the reverses Of the present year. Il
these, groups will Cooperate in thil
effort, - I believe they will, ths
result cannot but work to the I'D.
vantage Of our whole national econ.
omy.
Compsratively simple changes tn
Ard NJ h. sxisting laws vii
1nA1 k1tt possihie.