Evening star., 1937-04-24
AID TO BUILDING
IS SOUGHT BY LAW
Legislative Reforms Would
Increase Construction,
Director SAYS.

stimulation OF construction, both
public and private through release OF
funds which would in normal times
be devoted to construction, will con-
stitute one of the main subjects for
discussion at the Spring meeting of
the governing boards of the Associated
General Contractors of America,
which will be held April 30 and May
IN Washington. Pointing out that
construction, while it has made great
strides toward recovery during the last
year and a half, has not nearly
approximated its normal volume of
the pre-depression era. the association
during the last year has been advocat-
ing certain legislative reforms which
1t believes will bring about further
increases
In the field of private construction,
industrial building has been held back
by the undistributed-proflts provisions
Of the 1896 revenue act, E. J. Harding,
managing director of the association,
points out. Commercial building has
not made a satisfactory recovery
because of lack of confidence on the
part Of banks and lending institutions.
Both these types of building form
important markets in the private con-
struction field Harding pointed out,
"and all statistics show that they have
Jagged far behind residential construc-
ton in the resumption of activity. In
order to determine the reason for this
lag, we made many contacts with
bankers and industrialists.
Speculation Undermines Confidence.
1--WE found that the demand was
present but that there still remained
a lack of confidence where there
existed any degree of speculation.
This, coupled with the provisions of
the 1886 revenue act, which levies
heavy taxes on undistributed earnings
which include expenditures made for
improvements to industrial plants
when made from earnings, appeared
to be holding back the advance. 1t is
the belief of the Associated General
Contractors that proposed remedial
legislation which it is sponsoring will
to a great extent remove these
obStructions to the upward climb of
construction"
The proposed legislation advocated
by the association calls for an amend
ment to the revenue act to permit in
dustrial concerns to deduct from their
tax returns expenditures made for
plant extensions and Improvements.
To overcome the reluctance of lend
ing institutions to make loans for COM
mercial building, the association has
proposed an extension of the authority
of the Federal Housing Administration
so that it may insure loans for this
type of construction as it now insures
loans for residential construction.
With respect to public construction
Harding pointed out that resumption
of construction programs by the States
and political subdivisions is highly
necessary to bring back the public
works construction market to its nor
NAL volume
State Aid Desired.
while the Federal Government
financed vast program of public
works construction during the de-
preston, the States failed almost en-
tirely to appropriate funds for such
work, with the result that the volume
OF public works during that period
amounted to only so per cent of the
volume in normal times" Harding
stated. IF public works construc-
ton is to resume its normal volume
the States must resume their con-
struction programs, and Federal aid
should be devoted to supplementing
the States expenditures instead Of
being used in substitution for them.
The meeting of the associations
governing boards will conside rec
concentrations to make this principle
effective and to discourage proposals
which would, in effect merely substi-
tute Federal funds for local funds,
thereby adding nothing to the volume
of construction, and consequently
furnishing no additional employ
ment."
The sessions of the meeting will
hear reports on legislative develop
ments in the present Congress of in
terest to general contractors, and
will consider many problem affecting
the industry at the present time, such
as labor supply, gas tax diversion,
insurance matters and the like. w.
A. Klinger of Sioux City, Iowa, presi-
dent Of the association, will preside
at the sessions.