The Waterbury Democrat., 1937-11-29

Cently nelQ Q COnIeTcLlCc ut WAhSi both Stewart Mcdonald, FILA ad and John Fahey, chair man of the Federal Home Loal Bank Board, described governmental objectives to private businessmen and requested their cooperation.
 Indicating that one possible stim existing legislation. In connection with these changes, I would sug. gest that the congress eventually limit the insurance of mortgages to housing on which the applica- ton for mortgage insurance is ap. proved prior to the beginning Of construction.
 Provide Insurance
 Finally, am suggesting that insurance be provided for repair and modernization loans in man. rler similar to that which was for- merly provided under Title l of the National Housing Act. This former provision expired by limi- tation on April 1 of the present year.
 Considered in relation to exist ing provisions of the National Housing Act the Federal Reserve Act, The Federal Home Loan Bank Act, and extensive legislation en- abling legislation that has been enacted by the several states, the adoption of these measures would for the first time provide all the financial mechanisms essential to a widespread and sustained re- vival of housing construction. The terms of financing would be the most favorable ever made generally available in this country for hous- ing purposes-half, or less than half, the cost of loans of compar- able proportions under the system of first, second, and third mort gage financing that was widely prevalent in the 1920's. Large and continuous activity and employ ment in housing construction, which is not feasible under our present limited methods of financ. ing, would be put decisively on Q practical basis.
 Industry Must Aid
 The success of such Q program as this, however, cannot be assured by governmental action alone. It will depend mainly on the willing ness of industry and labor to co- operate in producing housing at costs that are within the reach of the mass of our people. The goal at which both industry and labor should aim is sustained large-scale production at lower costs to the consumer. This will mean a larger annual wage for labor because of the larger amount of employment than is possible at high hourly rates with long pe- riods of unemployment. It will mean a larger annual income for industry because of the larger volume of production than Is pos- sible at high unit prices with greatly restricted output.
 Because this was not the goal of industry and labor during the past construction year, the result soon proved injurious not only to the building industry and its workers, but to business and ern- ployrnent generally. The sharp rise of wage rates and prices in this industry, just before the last building season, reduced by 100000 to 150000 the number of new dwelling units that competent authorities had estimated were in prospect for 1887.
 It is now clear that we cannot have 8 strong revival of housing construction on the terms that were exacted by industry and labor last spring. The rise in hourly wage rates and in material prices was too rapid and too great for the consumer to bear. A similar rise in costs likewise checked pro- duction and buying in other inc dustries as well. In emphasizing these facts, l am not seeking to apportion blame, for manifestly no industrial or labor groups would deliberately adopt a policy that would react to their own dis advantage. I am simply pointing out what did occur and what the consequences were.
 Adopt Housing Costs
 Tn the budget of the great mass of our families, the point is quick ly reached where increased costs mean reduced consumption. Re- duced consumption, in turn, means a decline in someone's business and someone's employment. The essential problem of the construc- ton industry and its workers, then, is to find a reasonable way, through continuity of production and employment, to adjust the costs of housing to the consumers means.
 To help attain this end, 1t is my intention to initiate a series of conferences with representatives of industry, labor, and finance, with c view to giving housing con- struction 8 fresh start in the com- ing building year and averting a recurrence of the conditions that brought about the reverses of the present year. If these groups will cooperate in this effort, as be- lieve they will, the result cannot but work to the advantage of OUT whole national economy.
 Comparatively simple changes