Saturd.y Evening Post \(/riter Discusses How New Era of Construction M.y Lead Us Back to Prosperity

Every lumberman and .every other human interested in the building business in this country should read and thoroughly digest an editorial article in the February 6, 1932, issue of The Saturday Evening Post written by Joseph P. D"y. He should read it because it is the meat in the lumber and building' cocoanut; because it is the straightest, most practical answer to the question, "What's the matter with the building business?" that has ever been published in a great national magazine.

In the beginning Mr. Day qualifies as an expert on buildings, building financing, and building selling. We are told that he has sold more homes than any other man living. He sits on the loaning board of one of the world's great insurance companies, and he knows about investments.

First he makes a splendid talk on home ownership and its usefulness to the home owner and to the nation. In part, he says:

"Certainly we ought to have a great deal more of the stability that comes with home ownership. It is more than a financial stability; it is social. Two young people who have acquired an equity in a home, and the pride, the responsibility, and the improved living conditions that go with home own,ership, are thereby transformed into better citizens. They are less apt to bother about the train schedules to Reno. They are much more apt to vote, and vote intelligently. A tax bill is the soundest kind of instruction in political economy."

He opines that the Washington meeting to discuss home ownership (which was in the immediate offing as the article was written) will be a dud. It has already so proven.

The following are some of the very interesting declarations made and elaborated on in the article:

Many influential and far-sighted leaders of industry and finance are persuaded that the next cycle of prosperity in the United States is to be based on home ownership. The reason he gives is that for the last ten or twelve years people have been buying skyscrapers who should have been building homes; that is, they have been investing in big building securities instead of homes of their own, and these securities are now in doubtful condition. They will build homes in the future.

He quotes President Hoover as saying: "Our chief problem in finances r'elates to those who have an earnest desire for a home, who have a job and therefore possess sound character credit, but whose initial resources run to only 20 or 25 per cent." Mr. Day suggests this should be extended to those whose initial investment is as low as 10 per cent.

The problem to be solved, says Mr. Day, is the problem of the second mortgage. "Since the first mortgage of an owner-occupied house is the best of investments," he con- tinues, "it is a curious fact that second mortgages on such homes are so poorly regarded as investments. They deserve a better reputation."

He gives facts and figures to show that the owner-occupied house (NOT the r'ent house, mind you) is the prime risk in the second-mortgage field, as in the first-moitgage field.

He interviews a second-mortgage loaner who states, grinningly, that they charge six per cent interest; then adds that they charge 28 per cent in advance for "costs". A man sells a second mortgage for $5,000, he actually gets $3,600, and pays interest on $5,00O at 6 per cent.

Mr. Day says that second mortgages are by no means hazardous if they are given against well built houses properly situated and by people of moral credit.

He says: "The only thing necessary to start a wave of house buying in this country is to make it possible for people to buy without paying barbarous prices for the use of second-mortgage money, and to have these mortgages run until they are paid out."

He says we must incorporate into the home building business the lessons which the Government taught us by selling Liberty Bonds on the installment plan, and which the automobile industry has developed with such great success.

"You can buy an automobile for cash cheaper than on long terms," he says, "but the automobile industry does not tolerate the infliction of carrying charges on its customers such as the building and real estate industries tamely accept as an inescapable cause of sales resistance."

He suggests that "certain interested business groups ought to be glad to lend at 6 per cent, under strict control, all the money needed in the second-mortgage house field." They should NOT look for exorbitant profit on this investment, but should get their return from the stimulation of their businesses. He says that all manufacturers who make materials that go into home building should join in this movement. He lists a lot of them. (We hung our head when we found he did NOT list the lumbermen, which simply meant, to our mind, that the do-nothing-for-yourself history of lumber is the answer.) He suggests that these manufacturers create a pool of money to be loaned on properly safeguarded second mortgages extending from 5O per cent to 90 per cent of the value of the house.

"When they do thet," he says, "they will find that there are .literally millions of people of sound character in the United States who will be eager to buy homes at the cheaper prices that will follow."

He shows in detail how under such conditions people could buy homes with their rent money.

"It is generally agreed," he says, "that there can be no recovery from depression until construction begins again. For reasons which I will discuss further along, it is quite hopeless to expect any early resumption of the construction of big buildings. Our hopes must be planted on smaller foundations-those of small homes."

These are only some of the high lights of this illuminating article. He concludes by saying: "For many years to come the small house is going to monopolize the funds of small investors. We have too many skyscrapers; we can never have too many properly situated homes."

Overcomes Color Obstacles With New Tan Cement

News of uqusual interest to the building trade was contained in the recent announcement bv the Pacific Portland Cement Company, San Francir"o, oi a new Tan Cement. This innovation marks the first real improvement in the color of Portland Cement in 108 years, and brings cement into line with the modern color trend and opens up new possibilities for its use in present day architecture.

"Tan Cement was not discovered by accident", said J. A. McCarthy, vice-president and general manager of the firm. "A number of years ago we set out to overcome the color obstacle of Portland Cement and the new Tan Cement, which has rewarded our efforts, is the result of long experiments and persistent effort on the part of our entire technical staff".

The new product is a true Portland Cement guaranteed to pass the standard specifications of the Ambrican Society for Testing Materials.

The tan, which is a permanent part of the cement, is not only a desirable color in itself, but lends itself easily for producing other colors with minimum amounts of pigment. The new tan color is also available in a plastic waterproof cement, a fact which greatly broadens its field of usefulness.

A laboratory test for permeability by a recognized authority was made on two discs made of this waterproof cement, 6 inches in diameter and 1 inch thick. The discs were placed under 50 pounds rvater pressure in the permeability machine for 48 hours, with the result that there was no leakage and the gain in weight was nil.

B. C. Lumber Industry lmproving

The British Columbia lumber industry is showing greater general activity and the situation is improving with demand still exceeding curtailed output, states a telegram from Trade Commissioner E. G. Babbitt at Vancouver to the Lumber Division of the Department of Commerce. British Columbia lumber exports were active with over 12,000,000 board feet being exported during the week ending January 3oth, mainly to Japan.

Shingle Manufacturers To Meet March T7

The Red Cedar Shingle Congress will be held in Seattle, March 17.

SECRETARIES MEET IN S. F.

Northern California lumber secretaries, members of the Western Institute of Trade Secretaries, met in San Francisco February l.