Evening star., 1938-10-18
HOUSING
BIG RECOVERY AID
Wagner, in Forum Talk,
Halls Success of Act.
Health Fight Pledged.

Health Fight Pledged.
Senator Robert F. Wagner. Democrat
OF New York last night discussed de-
velopments under the Housing Act
Of which he is author, on the National
Radio Forum, arranged by The Star
and broadcast over Nationwide net
work Of the National Broadcasting
Co. The text Of his address follows:
During the past year our country has
witnessed a remarkable example OF
decisive and successful public action
We were threa tened by business re-
cession-a recession which II allowed
to drift might well have swelled into
serious depression. But because we
were prepared with instruments to
stabilize business, and because we did
not delay to swing these instruments
INTO action, business regained its foot
ing and resumed the upward march
The estimate of national income Tor
the second half of this year places 1t
above the first half by about $5,OOO,-
100000.
One Of the main factors in this
extraordinary revival has been our
double-barreled housing program
First, the National Housing Act amend
ments, which sponsored, though only
8 months old have doubled the rate
'of home building. Using private cap
ital entirely, they have stimulated our
entire economy through the increasing
tempo of the construction industry
and allied trades. Second, the slum
clearance and low-rent housing law
which pushed through Congress has
now been in operation one year. II
opens up a new and uneXplored field
for the Unemployment OF capital and
labor. BY balanced housing program
for every income group and every
section Of the country, business Is
being stimulated where it needed stim-
ulation most.
attribute the remarkable success
, of the housing program in so short q
period to the careful way in which it
has been fitted into our existing eco
nomic and social order. Here is nc
program of impractical social vision
aries, whose good intentions lead to
no constructive suggestions. Here Is
program which is receiving the
almost unanimous approval of econo-
mists, experts and industrialists OF
every political faith. Here is pro-
gram which is being administered with
the cooperation and assistance OF
States and municipalities, Of business,
labor and professional groups, and
almost every other group concerned
with the great problem Of rehousing
America.
Called Key to Recovery.
Careful students of our economy
have for years indicated that the
construction industry holds the key
to permanent recovery. AS one promi-
nent industrialist put it. Housing Of
fers the best opportunity for the long
pull to bring business back" The
facts are that the home building in
dustry fell off more sharply during
the depression than any other major
industry. and failed to revive when
general business activity commenced
to rise.
The reason for this is now clear.
The complex credit structure OF home
financing, with its burdensome array OF
first, second and third mortgages, its
high interest rates. its heavy amorti-
zation charges and Gripping reflnanc-
ing costs, raised the cost Of home
construction far beyond the reach Of
the average American citizen. Banks
had ample money to lend and millions
of people were anxious to build homes.
There was lacking only bridge be-
tween lender and borrower that would
not impose so heavy toll as to stop
traffic.
The National Housing Act of 1884
helped a good deal. but not enough.
Home building continued to lag and
remained drag on our entire econ
omy. The 1888 amendments which
sponsored have streamlined the entire
credit structure of home mortgage
financing, and without the expendi-
ture of substantial Federal money
have promoted broad expansion OF
this vital industry. Financial inSti-
tutions have been substantially saved
from the risk of loss on their loans
by a Government guaranty, and are
In position where they can sharply
reduce the cost of credit. AS result
the small home builder can now pro-
cure a long-term, low-interest loan up
to 90 per cent of the value OF his
property. BY this simple device the
springs of action have been released
credit can flow at an increased rate,
and the average citizen can safely
build his home.
In planning this program we did not
overlook the rising need for apartment
houses for middle income groups In
our larger cities. In recent years large
financial institutions have become in.
creasingly interested in long-rangs in.
,vestment in these large-scale medium.
rent housing projects. They are wisely
seeking a return on the basis of service
rather than speculation. The new
legislation has offered a credit stimu.
lus for these huge developments, re-
sulting In a great expansion Of this
new type of project.
Modernization Included.
Lastly, the new provisions Of the Law
have afforded ample credit facilities
for modernization and repair work
This in itself has been q boon Of the
first magnitude to both the home own.
or and the .h,ilder