Evening star., 1953-09-21
Concern Is Varied
Over Showdown in
Construction Pace
tcontinued From First Pagel

N~SANS4AASSS
terest rates on FHA-insured and
Veterans Administration-guar
anteed mortgage loans and took
other steps to free the mortgage
market from Federal interven-
ton.
"a readjustment period was
expected and most certainly has
occurred" he declared.
Concern Expressed.
Frankly, it is more of a re-
adjustment than was contem-
plated either in or out Of Gov
ernment and there ARE many
housers and many bankers who
express concern about the present
situation"
Builders organizations in
widely spread areas have COM
planned of a shortage Of housing
credit. The National ASSocia-
ton Of Home Builders has fore
cast curtailed activity and layoffs
in the construction industry un-
less lenders make more funds
available.
Mr.. Cole said he realized that
"abnormally high" demands for
credit from many areas Of the
economy are competing with
housing; he voiced hope that
this pressure would ease in the
near future.
Slight Drop Predicted.
A prediction of a minor busi-
ness drop" was made to the as
sociation today. but the banker
who made it said he expected
1t Ito be hardly bump at all"
He is CaSimir A. Sienkiewicz,
president of the Central-Penn
National Bank of Philadelphia.
He addressed the National Bank
Division of the ABA at Consti-
tuition Hall.
MY guess would be that the
Federal Reserve Board index of
industrial production would go
down not more than 10 per cent,
and perhaps as little as 5 per
cent" he said in celebrating on
his prediction.
THAT wouldn't be a recession.
1t would be much less of a drop
than 1949. It would be in the
order of the hesitation that took
place in 1947.
In short, I'd describe myself
as a business optimist. I ex-
pect occasional bumps in a free
economy. But the coming bump
I expect to be hardly a bump at
ALL"
He put the time for this bump
as over the turn of the year."
Three Factors Mentioned.
It is foreshadowed, he said, by
certain changes in prices, decline
in farm income and the behavior
of the stock market. He said it
will mean corrective adjust
ments in inventories, prices,
costs as well as in productive
processes"
Mr.. Sienkiewicz said every f.
nancial indication of boom is
present except one - prices.
Since February, 1851, they've
been declining" he added. so
We must be careful"
7. Allen Glenn, jr., president
of the Peoples National Bank of
Norristown, Pa, and president of
the National Bank Division, told
the meeting a good start has
been made to achieve the goal of
q sound dollar. .....
He said the Nation has a
choice between:
l. A flexible interest rate with
a stabilized honest dollar. But
he pointed out a flexible interest
rate means declines as well as
rises IN the rate to keep the
dollar stable.
2. A fixed interest rate with
an unstable dollar. He said it
had been seen in the past several
years that a fixed low interest
rate causes a gradual erosion
of the dollar.
Hits Back at Critics.
]. L. Robertson, member of the
Board of Governors of the Fed
eral Reserve system. struck back
at some recent critics of the
boards monetary policy.
Addressing the Trust Division
of the American Bankers Associ-
alton at the Hotel Statler, Mr..
Robertson said some criticisms
have been based on thorough
study and reasoned judgment,
but he added:
Il would be unfortunate if
monetary policy should be made
the subject of demogoguery or
used as a political football, be-
cause it is perhaps as important
as any single factor, other than
war affecting tho welfare of tho