Evening star., 1937-02-20
PRODUCTION PACE
HAVING BENEFITS
Orderly Progress Seen by
DR.. PuIIen of Chicago
Title Concern.

Crisis imitation has been STAYED on
thus far because production has kept
race with the increase in money and
bank credit, P. P. Pullen of the Chi
oago Title g. Trust Co. told delegates
to- the North Central Building and
Loan Conference in Chicago recently.
Managers of building and loan asso-
Citations from Illinois, Indiana, Michl-
gan. Wisconsin, Minnesota, Iowa, Ne
Araska and the Dakotas heard Mr..
Pullen discount the prospects for
rip-roaring real estate boom any time
koon with the counter theory that real
estate recovery will proceed in an
orderly fashion, with a gradual and
healthy increase In land values, un-
less further inflationary monetary
policies of the Government are adopt
ed or a war comes into the picture.
"A major condition which we feel
Is likely to act adversely to a boom
is the extent to which the stock and
commodity markets have become the
chief instrumentalities for speculation,
IN spite of the incentive which F. H.
a.. has given to real estate specula-
tson," he said.
Incentive for Transfer.
There is a definite incentive for
The transfer of speculative activity
from the stock market to the real
estate market in the deliberate policy
Of the Federal Government which has
made stock market speculation more
difficult by increasing margin require
rnents to SIS per cent and real estate
speculation more simple by reducing
margin requirements to 20 per cent
through F. H. A. mortgage insurance.
Having, however, discovered the Edo
RADIO of stock market speculation the
speculative public Is likely to favor
that method of getting rich quickly
rather than the slower, more cumoer-
some, more technical real estate mar
ket"
Mr.. Pullen said that every time
there was a period OF recovery ana
depression in real estate activity, the
time between the low and the hlgh
has been progressively longer In
Chicago's first cycle it was only two
years; in the second. six years, ana
80 on, until finally in its last cycle
there was q years between the depth
and the next high period. Con-
tinuation of this trend. in his opinion,
would put of into a more or less
distant future the next boom perlod,
since the last low was 1888.
Factors favorable to a boom were
cited. including relatively high resi-
Dental occupancy, low cost OF mort
gage money, large amounts OF funds
available for investment, accumulated
deficiency in new construction, the
sustained rise in the stock market
which presages rise in land prices.
the real beginning of industrial re
covery and the Intangible fear OF
initiation.
Population Increase e hit.
Over against these he set the fact
that no marked increase in popula-
tion can be expected, and no major
boom ever occurred in Chicago with
out one; the current increase in cost
Of living; the large group of unem-
ployables with their drain on the
resources of those who are employed;
increasing building costs which are
d definite deterrent at the beginning
Of any boom even if they don't re-
tard one which is well started, and
the disproportionate existing urban
mortgage debt.
1T is difficult to visualize any sub
stantial boom in urban real estate
with such a load of debt and debt
service charges as exists today" he
said.
"If we should try to put our finger
on the milepost in the cycle where
we are located at the present time,
we should find that it is where the
cream of the crop of existing struc-
lures has been disposed of at bargain
prices, owners of the balance Of the
crop, the less desirable, are ad-
yancing their asking prices against
resisting but yielding purchasers, and
Observation-Disclosures waiting
for prices of existing structures to
come into line with building costs
before venturing upon new building
enterprises"