The Waterbury Democrat., 1937-11-06

and Housing Problems
 lckes and StrauS at
 Odds on Subsidy Loan
 Program.
 Washington, Nov. 6 - The possi- bility of an exemption from the capital gains tax for profits made on new houseing construction has become considerably stronger since these dispatches first reported that this device for stimulating a build ing boom was being considered by the administration.
 Into the secret discussions of this proposal has come the fur ther suggestion of tying 1t mp with Q move to deprive the in- come from government securities of It's tax exempt status. Senti- ment for this step has been growing for long time and 1t Is now argued that 1t would divert billions of dollars, now In tax- exempts because they're tax exempt, into construction if pro- fits in that field were now to be freed from income tax.
 There Is some fear as to the effect on the government bond market and the Supreme court would have to reverse an old de- cision if 1t were to hold that in- come from government bonds was subject to income tax. But the proposal is very much in the air and is very likely to be trotted out if there is no improvement in bus mess.
 Serve Dual Purpose
 Proponents of government stim- ulation of private capital housing boom are piling up arguments.
 The unemployment census is expected to show that among skilled workers over 45 who can't get jobs, by far the largest groups will be building trades workers. A huge house building boom, un. like plant expansion which might eventually displace labor through mechanical improvements, would serve "a useful social purpose" and ameliorate Q bad housing shortage. It would absorb the un- employed, both directly and indi- rectly as in the steel and lumber industries.
 The government has put a cou- pie of hundred million dollars into housing, much of which must be charged off to experience-or ex- pertinent, and officials claim to have learned a lot about dwelling construction In government lab- oratories.'
 The private housing industry Is developed by large enterpreneurs who prefer quick turnover. It's proposed to limit the capital gains exemption to profits made within two years and it's hoped that enough building would e stimu- lated to keep profits down to @ flair" level which might make many of teh properties purchas- able by limited dividend corpora tions.
 Private War
 Meanwhile the atmosphere of "peace and cooperation" between Nathan Straus, administrator of the new U. s. Housing Authority, and Secretary Ickes, whose $l35,- 100000 PWA housing program the U. s. H. A. will take over in ad- dition to its own new half-billion dollar loan subsidy program, is so surcharged that everyone ex- poets some hot smoke If not actual flame.
 Ickes has general supervision" over Straus, under the Wagner Housing act, but Straus has the powers - appointment, approval and expenditure. Ickes insisted he wouldn't take Straus as adminis- tratOr and thumped the tub for his own PWA housing director, Howard A. Gray. Senator Wagner insisted he wanted Straus. Wag- ner was backed by many local housing officials and other ex- perts who opposed what they knew would be complete Ickes control of the new program. This group argued that Ickes believed no one was honest except him. self and that, even though that might be so, the attitude would impede 8 program depending on cooperation with local officials. Roosevelt appointed Straus.
 Now Straus is acting with cocky independence, obviously intending to work out his own policies with his own advisers. The Ickes group is predicting some bad headaches for Straus and betting that 1t will take him three times as long to get some construction started as he thinks 1t will, which is about three months.
 Copyright 1897, NEA Service, Incl AnssUers To