Evening star., 1953-09-21
j. 5. Threatens
Direct Action
|nHousingLag
Cole Says Banks
Must Prove. They
Can Supply Credit

Inc Natl0nS bankers were
challenged today to prove that
they can supply the Nations
needs for credit now that the
Eisenhower administration is
freeing the money market from
Government intervention.
Housing Administrator Albert
M. Cole warned the Nations
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Pictures, Proerom and ReIoted Story on
Bonkers' Meeting. Poee "A
Treasury ofticioIs Hosts at NotonoI
6ollery Bonkers' Reception. Poee B3
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bankers that if private funds are
not available for mortgages to
support a reasonably high"
production of homes the Gov
ernment may step in with direct
action"
Mr.. Cole addressed the Savings
and Mortgage Division of the
American Bankers Association
at the Hotel Statler.
Another group of bankers also
was challenged to prove that
Government loans are not need
ed. Senator Bennett, Republic
can, of Utah called on the State
Bank Division, meeting at Con-
stitution Hall, to demonstrate
their longtime contention that
Government loans are not need
ed now that the Reconstruction
Finance Corp. has been elm
mated.
Chance to Prove Claim.
Senator Bennett alluded to the
transfer of a small part of the
RFC functions to the Small
Business Administration. He
said:
For awhile we may need some
kind of capital loan program,
particularly for small business,
but now is your chance to prove
your claim that the legitimate
credit needs of small business
can be supplied by our private
banking system without direct
Government loans"
The Utah Senator is a member
of the Senate Finance and the
Banking and Currency Commit
tees.
He defended present interest
rates which have been criticized
by Democrats. He said they are
not high historically but are
more nearly normal now than
were the artit1cially low rates of
the last 20 years.
Mr.. Coles address was the first
official acknowledgement of Gov
ernment concern over the Slow
down in construction. Some
builders have blamed shortage
of credit. Mr.. Coles remarks
came as surprise to some of his
listeners.
Pace Down in August.
New home starts in August,
Mr.. Cole reported. were, down to
rate of 10000 year. not
seriously below the 1,127,000 in
1852. But a sharper future de-
cline is indicated by a drop in
current applications for Federal
Housing Administration mort
gage insurance, he said.
This may mean some difficulty
next year, the head of the Hous-
ing and Home Finance Agency
went on. in keeping residential
construction up to a level con-
sistent with a sound economy.
He told the bankers:
II submit to you the very SER
iouS reminder that if we are un-
able to maintain a reasonably
high continuing volume of home
production which means an
adequate continuing flow of
mortgage credit--we may be re-
quired to resort to some means Of
assistance to avoid unnecessary
wrenches to our entire econ
omy. =.
"On this somewhat sober note
I suggest in sincere candor that
the bankers weigh carefully the
problem they share with hous-
ers. Together you have the OPP
portunity to demonstrate that
private industry can and will
handle the job without a return
to direct Government action in
the housing field"
In harmony with the Sound
money" policy of the Eisenhower
administration, Mr.. Cole said,
the housing agency increased in
Continued on Page A-4, Col. ID