The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1937-03-11
More
Confusion

Confusion much a part OF
the federal gov
ernment's general administration.
have talked about the buster and
the ballyhoo and the cross purposes
at which so many pieces OF the New
Deal program have operated, and
another outstanding example OF TINS
condition now appears.
Two governmental agencies, one
strictly New Deal agency, the
other with beginning in the Hoover
administration, find themselves
working directly in opposition to
each other-and in the end taxpay-
ers will pay.
1t is not the fault of the Home
Owners Loan corporation that it
finds itself in position where it is
going to be landlord to something
like 100000 pieces of real estate
largely homes.
When the government went into
the business of loaning money on
private residence it had experience
upon which to base its program.
Many years ago the farm loan sys-
tenn was organized with none too
happy results. In the late days of
the Hoover administration, howev-
er, three or four politicians were
able to drive through the legislation
creating a system OF government
loans on residences as distinguished
from farms.
predicted in these columns some
three years ago that the govern
ment, through the Hole, was going
to be the proud possessor of a lot OF
real estate. My statements at that
time were based upon what I had
seen happen in the case of the loans
on farms. The article brought me
direct criticism from two or three
places in the government-but at
this time I can report that the
Hole, before another year passes,
will own something like 16O, 200
homes.
It is always difficult for mort
/ gage or bank institution, privately
owned, to dispose of property which
it has been forced to repossess
through default of the borrowers. 1t
is much more difficult for the fed
eral government to dispose Of that
type of property, try as it may to
get rid of the parcels.
So, we find one governmental
agency serving as landlord on a
wholesale scale and with signs por-
tending moves by politicians that
will in the end cost the taxpayers
hundreds of millions of dollars.
These politicians are proposing leg
islation in congress to cut the in
terest rate on the loans now in
default and other loans as well;
the principal of the loans on the
defaulted mortgages and they are
seeking means by which those in
default may have unlimited time in
which to make the payments in a
way that, specifically at least,
makes the proposals appear actu-
ally as an outright gift to those
who have bought homes under the
government loan plan.
There is no way to tell now what
will happen to these various pro-
posals. Undoubtedly, most of them
will fall by the wayside and re-
ceive no consideration in congress.
Yet, on the basis of observation of
many such movements, it does not
seem far wrong to guess that the
politicians in congress will accom-
plish something in the way of re-
duction of these debts where the
defaulters bring pressure to bear
on the home town political ma
chimes.
Now, concerning the other govern
mental agency involved in the game
of cross purposes
cross that I mentioned.
PURPOSES I refer to the fed
eral housing ad-
ministration. Like the Home Own
ers Loan corporation, it is not the
fault of the housing administration
that it finds itself in tough spot.
1t is commanded by the President
and by congress to proceed with a
gigantic housing program, to loan
money on new homes wherever it
can persuade contractors to build
and individuals to buy. 1t is to be
remembered also that loans on
these properties are guaranteed
the legislation calls them insured
loans-and that makes the federal
housing administration liable in
case the new home buyers fail to
meet their commitments.
The housing administration an
nounced its program to encourage
wholesale home building throughout
the nation only recently and it was
by coincidence, am sure, that the
housing program was announced al
most simultaneously with the deter
mination by the Hole to start fore
closure proceedings in order to
maintain its own solvency.
Thus, to bring the picture to a
focus, we find one governmental
agency that has loaned hundreds Of
millions of dollars on residences be-
ing forced to foreclose in order to
protect the money it has spent, at
least in part, and second govern
mental agency entering the field si-
multaneously with gigantic pro-
gram in which more hundreds Of
millions will be expended and more
people encouraged to place them
selves in debt.
I cannot criticize the housing adj
ministr alton policy any more than
/ can criticize the program of the
Hole. The point is that there is
simply no coordination in govern
ment policies as they concern these
two agencies, and consequently, one
group is building new homes and an
other is taking over old homes for
which the buyers have been unable
to pay. In my humble opinion, it
does not make good sense.