Urges Cooperation of Building and Loan Associations and Lumber Dealers

After attending the 22nd. Annual Convention of the California Building-Loan League, held at the Palace Hotel, San Francisco, May 26th, ZTth and 28th, Mrs. J. E. Fraser, Secretary-Manager of the California Retail Lumbermen's Association is more than ever convinced that there is a need for the co-operation of the Building & Loan Associations and the Lumber Dealers, and co-ordination of efforts of the two toward getting BETTER HOMES in California, and toward eliminating the Fly-By-Night Contractor, who is scr prevalent in California, as elsewhere in the United States. Whileour California Mechanics Lien Law is as good a Lien Law as there is in the United States, still it is not a protection to the HOME BUILDER, and he is the one most needing protection at the present time.

Mrs. Fraser believes that the confidence of the Home Builders can be re-established and that Home Building can move forward at a bigger and better pace than for some time, if the Building & Loan Associations will demand one of the California Retail Lumbermen's Association's Grade Certificate with each loan granted for Home Building. This will assure to the Home Builder that he has something that will stand up under the general wear and tear, that his home will not be valueless by the time he has his final payment made to the Building & Loan Association. Many instances have come to her attention where homes being purchased under this plan h.ave so deteriorated by the time a half dozen payments are made that the people purchasing same have moved away, discontinuing to pay on the home, rather than continue to pay out on a home that will not stand up. She believes that with the Grade Certificate filled out, showing that the proper materials are being used in the proper place, that we will have better constructed homes-homes that people will have something of a pride in owning. Many people only buy one home in a life time-it takes their savings of years, and it is very unfortunate that these people should not be protected from buying a jerry-built house. Mr. J. E. Neighbor, Treasurer of the California Retail Lumbermen's Association, presented this subject to the delegates at the Building-Loan Convention, on the 26th, and they were so interested in the matter that many of the delegatis have asked for further advice on the subj6ct. As the result of Mr. Neighbor's presentation of the subject, the Building & Loan League in Convention assembled, ruled that a Committee of three should be appointed to meet with a committee of three from the California Retail Lumbermen's Association to take up this question further.

Fitting in with Mr. Neighbor's talk was the Clearing House Plan, presented by W. H. Graham, of the Cosmopolitan Mutual Building & Loan Association of Oakland. Mr. Craham's plan is very much on the same idea as the plan now being brou.ght out by the Model Mechanics' Lien Law, now being compiled by the United States Department of Commerce, which is endeavoring to protect the Home Builder; to prevent dual payments, to prevent irresponsible contractors from using the proceeds of the contract for his own use, leaving the laborer and materialman unpaid. They are recommending, as is also Mr. Graham, that the Contract Price be a TRUST FUND for the payment of labor and materials before application of any part of the funds to the' contractor's personal use. They. are making the provision that the misappropriation of funds for his own use, by thq contractor, will be considered an act of. Embezzlement. this thought advanced by the Department of Commerce is the same as that advanced by C. W. Pinkerton, Chairman of the T egislative Commitiee of this Association, at the time of the hearing before the Committee to which it was_ referred, of the Licensing of Contractors Bill, brought up before the session of the Legislature just closed. Ttris 1elhod of curtailing the Fly-By:Night Contractor waS not looked upon with favor by the Asiociation General Contractors in San Francisco, but it is understood that the National A. G. C's Association does approve of the provisions lein^g p^uj in the Model Lien Act, and it is hoped that the A. G. C.'s in California will see the light also, so that all in-terested parties can get together before the next session of the Legislature, and present for adoption by our Legis- lators a bill which will really accompiish att- that it ias Lgp.d_ the Licensing of Contrictors Bill would accomplish. The California Retail Lumbermen's Association is no# taking steps to bring together all interested parties with a view to_accomplish this at the next legislativ-e session.

One of the greatest evils today in the Building Industry is the Fly-By-Night contractor, who takes his profits out of the first payments, and lets the labor and materialmen either file a lien-thus making the Home Builder pay twice for his home--or else lose the money altogether. This Trust Fund would act to stabilize the Building Industry, as the irresponsible contractor today, to insure his gettirig the contract, will deliberately underestimate the contract price and then furnish inferior material on the job, or take his pro-fit- out of the first payment and not worry about the other fellow. Under the Trust Fund a contractor would have to figure sufficient to insure completion of the Building- withall b_ills paid, before he could collect his profits; and with the Grade Certificate tied in with this Trusi Fund Agreement, there would be au absolute check on the materials and it would be easily ascertained as to whether or not the material contracted for was being put into the construction.

Mrs. Fraser believes that if th; TRUST FUND PLAN could be put into effect, in conjunction with the Building & Loan people demanding a Grade Certificate that the "o-nfi-