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thereby enlarging the demand for small residences, I still challenge the statement that we are overbuilt.

There are thousands of communities in these United States where not a single residence has been created in the past three years. This fact is evident to anyone who has traveled over the country in that period. I am speaking mostly of the smaller communities.

But what of the larger centers? Early in February the Cambridge Associates, of Boston, announced that after a survey in 50 of the larger cities it was found that the need for space now amounts to $40 per capita. If this low average were spread over the entire country it would indicate that there is a need right now for $4,800,000,000 worth of space, but I am convinced that double that amount would be nearer correct, for the smaller communities have not figured in the calculations at all. Therefore, the people who claim we are overbuilt are in error, any way you look at it.

The violent swings up and down in the building industry are due almost entirely to the amount of residential building that may be done. Commercial building runs along on a fairly even keel in bad times, as well as good. That is due to its nature.

The reason for the swings on the residential side is due to lack of proper financing facilities, and nothing else. Nearly two years ago President Hoover aptly said:

* The result of the inability freely to secure capital has been a great dimunition in home construction and a large segment of unemployment which could have been avoided had there been a more systematic capital supply organized with the adequacy and efficiency of other segments of finance."

The fluctuations have not been due to fluctuations in the desire for a home. That desire for a nest of our own is inherent in all of us; not a single housewife or mother will deny that. Indeed, the desire for a home is at higher pitch to-day than ever before. People have come through the depression with an increased appreciation for the fundamentals of life. More people are resolved to have a home of their own than ever before, because of the worry, fear, and uncertainty they have just been through. We have had a remarkable evidence of that fact at the Ladies' Home Journal. Since the depression started in November, 1929, we have averaged a sale of 1,000 house plans each and every month to our readers, right down to the present. Such a record has never been heard of before in our experience, and we have been preaching good architecture to our readers for more than 35 years.

Fluctuations in residential building from year to year have not been due to lack of available land. Land is not plentiful one year and scarce the next. Our transportation facilities have been developed to such an extent that the land available for home construction has been multiplied many times over what it was a few years ago. With good roads nowadays, the family can live 15 or more miles in the country and still be closer to the place of employment than it was 20 years ago. The automobile has vastly improved any chance there might be to make this a Nation of home owners.

Fluctuations in residential building have not been due to lack of available materials. Building materials manufacturers are better organized than ever before in our national history to serve the home builder. Lumber, stone, brick, tile, cement, steel and fabricated metals—indeed, more materials are available for the home builder than ever before. And dozens of entirely new products have been perfected that were unknown to the builder of yesterday. You can build a better house to-day, for less outlay, than our grandfathers could build. It is not lack of materials.

These fluctuations have not been due to lack of adequate design-we have thousands more architects than we had 30 years ago. It is not due to inability to get good construction-we have more highly skilled workmen available than ever before. Nor is it due to a failure to have proper zoning laws, some gentlemen to the contrary notwithstanding. These are all secondary considerations--smoke screens too often permitted to obscure the real issue.

Then, what is the trouble?

Simply lack of adequate financing facilities. The blame rests squarely upon our failure to make it comparatively as easy to buy a home as it is to buy anything else we buy.

The spectacle we present is disgraceful, to say the least. Here we are with millions of competént workmen out of employment, eager and willing to earn their daily bread by honest toil. We have hundreds of thousands--a potential of even millions-of families wanting a home of their own. We have the land.

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available; we have adequate transportation facilities; we have the materials, and the necessary skill.

We have this great potential need and demand pent up in a reservoir where it can not escape. We all recognize the good that this accumulation of wants and needs would do all of us, in every way, yet we are confronted by the spectacle of archais finance standing with its back to the floodgate of prosperity, and yelling in horror-stricken tones,“ We are overbuilt. We do not need it. You'll lose your shirt, if you do.”

Well, I have no patience with that. And I know that the people of the country, the small home makers constituting the real American market—the $40 to $75 per week families-agree with me. They have no patience with the obstacles that clumsy financing policies have set up in their way. They are beginning to look into these things with determined interest. Indeed, one of the healthy things that has come out of this depression has been the utter deflation, so far as the public is concerned, of any opinion it might have entertained of the infallibility of certain attitudes of mind in finance. We have examined these minds closely and we have made the interesting discovery that, like the Chinese gods, they have holes in the back of their heads.

The purpose behind the proposal for home-loan bank system was to benefit the country at large and as a whole, not to aid any particular segment of finance, business, or industry. The people understand this, and they realize that the greatest need facing the family is a home of its own. If impediments have been built up which prevent that need being supplied, then it is a proper function of government to dig out that impedimentblast it out, if necessary. I am surprised that we have been able to maintain the percentage of home ownership that we have in face of the obstacles that finance has set up. It has been easier to spend the family dollar for anything else other than the most essential thing the family needs. It is a splendid commentary on the inherent thrift and character of the American people that such a large percentage of them have won through every obstacle to home ownership.

But the penalties which existing methods of finance have imposed are not only working a hardship upon those hardy souls who have ventured to come to grips with it, but it is also slowly destroying the whole domestic market, by strangling it at its source.

I know of no bill that has been before Congress in the last 20 years which, when enacted, will have more far-reaching effect for good, for more years to come, than this proposal for a home-loan bank system.

I am therefore for the proposed home-loan bank system for the following reasons:

1. Present existing financing facilities are inadequate in encouraging home ownership. The constant slump in the percentage of home ownership during the past 80 years is evidence of the fact that money has not been readily available to the prospective small home owner. The proposed home-loan bank system will enable those agencies, set up by the people themselves for the purpose of financing a home, to supply the deficiency now so seriously present.

2. Present existing financing facilities have practically ceased to function. I have evidences every day that there is a demand for construction and remodelling of homes, which would start the wheels of industry to moving, that is absolutely throttled at its source by the refusal of bankers to provide the money. One man was refused $5,000 two weeks ago, for this purpose, even when he offered sound securities to double the amount, as collateral, in addition to the mortgage.

3. Our present archaic methods of home financing are doing more to destroy the traditional American ideal of home life than anything else in our social system. It is forcing an apartment-house type of living upon an increasing segment of family population every year that goes by. That tendency must be stopped, for it is not only overturning the Anglo-Saxcn ideal of home and family life, but it forces a constantly restricted market upon all business and industry which must look to the American home as its ultimate market.

4. There is at the present time a widespread demand on the part of the people for homes of their own. At no time in the present generation has there been a more determined desire to acquire a home than now. Hundreds of thousands of families have in recent months awakened with a financial headache, and they are saying, “The first thing we will do will be to buy a home. If we had done that three years ago_well, we would still have a roof over our heads, anyway.” At the Ladies' Home Journal we have averaged

a sale of 1,000 house plans a month, each and every month since November, 1929. ' Never before in our more than 35 years in furnishing architectural plans to our readers has such a record been known.

5. I am for the home loan bank system because, if immediately set up, it will enable many home owners to save their homes from needless foreclosure. Short-term mortgages are needlessly being called to-day. I could give you a dozen examples that have come to my personal attention within the past 30 days. Banks and mortgage companies are demanding substantial reductions, or are calling entire amounts. They are calling these mortgages at a time when the small home owner can not secure funds. Let me add, they are calling the “good mortgages.” This is a double crime. It is destroying the faith of the family in a program of home ownership—to say nothing of a lifetime of sacrifice and denial. The home loan bank system will enable funds to be made instantly available to the people's own financing agencies, so that they can function in this field at this time.

6. In my judgment, this proposal should be immediately enacted and the system proposed immediately set up. Every day's delay is costly, for the reasons set out above. This bill could be enacted to-day and function satisfactorily. I have studied it carefully and it is well drawn and establishes the proper preference for the long-time monthly repayment mortgage for the small home owner. In other words, I am for this bill in its present form without any “ifs, ands, or buts."

Mr. Gold.

STATEMENT OF CHARLES W. GOLD, PRESIDENT PILOT LIFE

INSURANCE CO., GREENSBORO, N. C. Senator WATSON. Mr. Gold, what is your full name? Mr. GOLD. Charles W. Gold. Senator WATSON. And where do you live? Mr. GOLD. Greensboro, N. C. Senator WATSON. What is your business, Mr. Gold? Mr. GOLD. Life insurance. Senator WATSON. What is the name of your company? Mr. Gold. The Pilot Life Insurance Co. Senator Watson. How old a company is that? Mr. Gold. Twenty-seven years. Senator WATSON. How long have you been the president of it? Mr. Gold. Nearly a year.

Senator TOWNSEND. Do you make a great many loans on real estate?

Mr. GOLD. Yes, sir.

Senator TOWNSEND. About how many mortgages do you have on farms or homes?

Mr. Gold. About $5,000,000 on homes,
Senator WATSON. Do vou favor this bill, Mr. Gold!

Mr. GOLD. No; my feeling is that it is a permanent set-up for a rather temporary need.

Senator WATSON. You do not agree, then, with the last witness who was on the stand about the lack of home building, or a dearth of homes?

Mr. Gold. Well, over the territory in which my company operates, and I am more or less familiar with the conditions, I think there is an overbuilt condition due, perhaps, to the present financial conditions.

Senator WATSON. What are your objections to the permanent features of the bill, or general features of the bill? I am not talking about the technical features that are to be worked out.

Mr. Gold. My general feeling is, now adverting to the last speaker's statement, that if we were to actually begin a campaign and bring about the condition which he favors that we would have a condition which would not be healthy. In other words, if this Federal home-loan bank had been operating, say, in 1926 and money had been as plentiful as it would be for home building under this, why, certainly, we would have a tremendously overbuilt condition.

A community, of course, needs so many homes. Naturally everybody is in favor of home ownership. But you can easily oversupply the market, and it depreciates the value of mortgages, and the value of everything that has previously been loaned.

Senator WATSON. Are the life insurance companies generally against this proposition? Mr. Gold. I do not know.

Senator WATSON. You have not had meetings or consultations on the subject ?

Mr. Gold. No; I am just representing my own company.

Senator Watson. Have your people bought any building and loan securities, or mortgages of any

kind? Mr. Gold. No. We have made loans to building and loan companies.

Senator Watson. You have loaned directly to the building and loan associations?

Mr. GOLD. Yes, sir.
Senator WATSON. On what collateral ?
Mr. GOLD. On 150 per cent of their mortgages.
Senator WATSON. Have you ever had any losses ?

Mr. Gold. No. Now this lending is, of course, for a temporary seasonal situation. There are three building and loan associations in my city—I live in Greensboro—and we help them out, and then some in some of the other towns.

Senator WATSON. Are they demanding money now?
Mr. Gold. Yes; they have no money now to lend.
Senator WATSON. I say, are they demand any money of you?
Mr. GOLD. No.

Senator Watson. They are not making any demands on your life insurance company?

Mr. Gold. No. They would like to have money from time to time. Senator WATSON. And you have not got any to let them have?

Mr. GOLD. No; policy loans are hitting the life insurance companies pretty hard, and these, with our own loan connections, are taking our available lending funds.

Senator WATSON. And you have not any money to loan them?

Mr. Gold. No. We are making loans direct to the individual borrowers.

Senator WATSON. What is the general condition of the building and loan associations in your State!

Mr. Gold. Good. They could loan a lot of money, of course, if they had it. Senator WATSON. For home building ?

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Mr. Gold. For home building. But in my particular section there is an overbuilt condition to-day.

Senator WATSON. Well, how then could they build a lot of homes, Mr. Gold, if they had the money?

Mr. Gold. Well, the real-estate men are naturally optimistic. They can sell to the people who have an idea of building a home. Of course, easy financing helps them to carry out the idea. There is no question about it, that this bill would result in a tremendous increase in building homes.

Senator WATSON. And you believe in an inflation of home building?

Mr. Gold. I think so.

Senator WATSON. Which later on would act disastrously, or at least, adversely?

Mr. GOLD. Adversely, to that extent.
Senator Watson. And on that account you do not favor it!

Mr. GOLD. I do not favor it. Mind you, I would like some relief, and my belief has been that the relief which would be needed could be secured under the new Reconstruction Finance Corporation. Under the powers given them in that act they can, and I imagine, they will, meet the temporary need.

Senator WATSON. Somewhat, I think. It is owing to how much money they have and where they find places to put it.

Mr. Gold. Yes, sir.

Senator WATSON. The demands now are enough to take up the $2,000,000,000, and they have not started yet, so I do not know whether they will get around to building and loan associations. You know, when there is free money a lot of people are in the neighborhood.

Mr. Gold. They like to get it. Senator WATSON. Yes. Is there anything further you want to say! Mr. GOLD. No, sir. Senator WATSON. Any questions, Senator? Senator TOWNSEND. NO. Senator Watson. We thank you very much for your statement. Mr. Hitchcock.

STATEMENT OF GEORGE B. HITCHCOCK, REAL ESTATE DEVELOPER,

BUILDER, AND APPRAISER, TEANECK, N. J.

Senator WATSON. Mr. Hitchcock, tell the committee your name.
Mr. HITCHCOCK. George B. Hitchcock.
Senator WATSON. Where do you live, Mr. Hitchcock?
Mr. HITCHCOCK. Bergen County, N. J.
Senator Watson. What is your business?
Mr. HITCHCOCK. Real estate developer, builder, and appraiser.

Senator WATSON. What do you mean by appraiser; is that an official position of some kind ?

Mr. HITCHCOCK. Well, I do appraising for the State, and insurance companies, and building and loan associations. Generally, I do quite a bit of appraising in the county.

Senator Watson. How long have you been engaged in that business?

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