ThreeHundred Million Dollars

How to Get it for the Lumber and Conrtnrction Industrier.

By George K. Rogers

_ I have been asked to indicate how Three Hundred Million Dollars of capital, in__excess of that .r"tri"tt, under preJent condi- tjons, will be normally spent in the construction-industries in california, can be addtid tir those industries within ttre neit itrrei years,.and. nly answelto.that question is, ,,By the lumbermen, con- struction jndustries. Realtors. fire insurance men, plumbers, and all others who are benefited by the construction oi new buildines. joining together and gett_ing- behind ttre 6uilal"g -";d -i.;;-;;;? ment as they have already done in eastern statds.', Nationally Endorrcd

The National Lumber Manufacturers' Association, at Chicago, and the Nationar Federation of construciio"-i"auiiii"i, "i-iH'r"- delphia, adopted the following-: -

''Recognizing the fact that the building-loan associations . of America are an important factor -and confine their activitier to teaching thrift and financing home ownerrhip, we urge all organizations and individualJ, interested in the promotron of homes to affiliate, co-operate and arirt such associations in their work.', _ At each of two recent conventions of the National Real Estate Bo.ard strong resolutio_ns, similar to the iL'ove were passed. The Lalrtornra Sanitation I eague on July 2, 1925, in San Francisio, also passed the followrng:

WHEREAS:

Bu^ilding-Loan Associations errploy thcir entire fundr in Ine. nnanclng ot homes and other income properties: i. e., building constructionand, therefore, in tlieir ;;.k ;i solrcttrng rnvestments in their organizations, are reallv organizers of cash capital for the lonstruction indusiiil", and others interested in buildings and

WHEREAS:_

^.Bgi_t91tg-I-"an.Associations have become great national -f'HRIF-'I', organizations and as such have- received the qnqualified endorsement of the president of the UnitJa States and of the Departments of State ."a Com-ir-c., therefore be it

RESOLVED:-

That the California Sanitation Development I_eague hereby endorses the work of building-loan associatiolis, pledges its support along sound, conltructive line, anti recommends that all who are engaged in, or related to the building industries, join in a common movement t".t i"g i" turtherlng the work of the building_loan associationsl Lumbcrmen Support Movement

,- The Southwestern Lumbermen-'j Association three years ago, at its own expense, emplo_yed Mr. Frank A. Chase, " p.o"rirrerrt 6,ritd- ing and.loan.ma.n, tg lecture arld organize tocal building and loan associations in the States of Kansas and'Missouri, and-under his management about fifty such associations were so organized. The moneys that were gotten together by these associations were, as everybody _knows who understands building and loan, diverted -largely from-channels of .ljttle or no profit'to the-communities, directly- to that of home building. The work which Mr. Chase did was of _so pronounce.d ? benefii to thd lumber industry that a numbei of lumber associations, .among which may be meritioned, National Lumber Manufacturers' Assoliation, Southern pine Aisociation. National-American Wholesale Lumber Association, Noritria.t"iri Retail Lumber Dealers' Asso-ciation, and Hoo Hoo, engaged him to go to Madison, Wisconsin, and there in collaboritiSn witti Prof. R. T. Ely, of the Department of Economics, he has. for two years, been doing research work which has resulted in the recent issuance of a text book on building and loan, "Elements of the Modern Building and Loan Associaiions," which text book is to be used in colteges and universities, and by all interested in the construction industries. But the point of interest, as far as this article is concerned, is the fact thal out of $15,000 expense incident to the compilation of this work, the above noted lumber associations.co.ntributed $12,000, to around $3,000 bv building and loan assocratrons themselves.

This difference contribute4 by. the llrmbermen and building_loan people was not because of lack of interest on the Dart ;f the latter, but simply lack of available expense funds, for 6e it understood that, under the bu^ilding and loan plan, and as regulated by law, practically all profits go to those who are saver-s and in1 vestors in the various associations. This contribution bv the lumbermen's organizations, however, does show the splendid interest which they took aftcr having been tremcndourly benefited bv the great sums of additional money which flowed into their business as the direct result of Mr.-Chase's work in organizing a large number of associations in the two states mentibned. -

Great and Growing Force

Building and loan associations are really organizers of cash capital for the construction industries and others interested in th.e_.building business, because every dollar, other than the very trtfling expense element, which they receive, goes directly into h-n-ancrng income properties and in probably 95 cases out of every 100 this financing is- in the conetr.riction 6f o.* buildingr. Th; law does not permit them to use investors' money in any other way.

The building and loan association movement is now growing as rt has_ never grown before. In the 94 years since the movement started in this country it has grown to 9,000,@0 members, and at the present ratio of increase in membership, in another eight years it will have doubled its present size. Over 3,000,000 homes have been financed by these associations, over 1,000,000 of which h9ry9., have already been fully paid for, and in over 2,000,000 of wU_ch, the associations have now invested over $4,660,000,000.

The necd for the building and loan movement'is perhaps the answer to the query which will occur to the reader as to what may have been the cause of its organization and tremendous growth.

Decrcaring Home Ownerrhip

__In spite of all the advertising and other admonitions to "Own Your llome" the fact remains that home ownership has been steadily declining in America for the last 30 years. According to the last two census reports there were in 1p00, out of every 1000 families in the United States, 461 homes owned by those oicupy- ing them, while in 1920 the proportion had dropped to 456 out of every 1000 families. From a bulletin issued by the Department of Commerce it is shown that in a list of 68 American citiis of 100,0@ or upwards of population, all but seven were losing in percentage qf home ownership. Among these cities are included, the three California cities, which at the time of the cehsus were in the 100,000 class; namely, San Francisco, Oakland and Los Angeles. This tendency to loss of home ownership shows, that if therc ever wae a timc when all of the agcncier who can aid in changing it, rhould get together for that purpore thtt that tinc ir now.

Comparative Rerultr

Certain eastern cities have changed this conditiorr, among them may be mentionid Baltimore, Camden, N. J.; Omaha, Philadelphia, and St. Paul, and what is significant in this connection is the fact that building-loan has in these same cities taken a tremendous step forward. In Camden, N. J.; there has been husbanded through the building and loan associations, and re-invested in building construction, over $200,000,000. Camden is a city, according to the last census, of 116,309 population. By way of comparison it may be noted that in San Francisco, population 650,000; the building- loan associations have but $9,700,000. In the City of Philadelphia, popufation 1,823,779, or three times that of San Francisco, there are over 1600 building-loan associations; in San Francisco there are but 22. In the city of Omaha, population lgl,(0l, the building- loan associations have assets of over $90,000,000. There is an association (the "Farm and Home Savings and Loan"), located in Nevada, Missouri, a city of about 10,000 population, which association has over $27,000,000 assets, and w,hose assets increased last year over $6,000,000. The assets of the largest building-loan association in California, a Los Angeles concern, is around $15,000,000. There is invested in the savings banks of this State over $1,100,000,000, as compared with the $138,000,000 in building-loan. I am confident that if the general public understood building and loan that that situation would be exactly reversed. What reason under the sun can there be, other than lack of understanding, which would cause the common people to be contented with 3Vo or 4Vo on their savings when they could get 6Vo with at least equal safety and equal availability?

Plenty of Money

However, we do not wish, and it is unnecessary, to draw any money from savings banks deposits in order to literally add hundreds of millions of dollars to the construction industries. While it is true that banks are not devoting their funds exclucively to the construction industries, as are building and loan associatibns, yet that same vast reservoir, from which the savings banks have drawn their splendid total of deposits, is still a fertile field for our efiorts. Literally, hundreds of millions of dollars are annually going out of the State into varie?l types of investments, and other hundreds of millions are not even being deposited in savings banks.

How to Get the Money

The wonderful position which building-loan has attained nationally, coupled with a review of its posiiion in this state, as comp-ared_ with eastern cities and states, constitute convincing evidence that but one thing is required to give the movement the same splendid^impetus that it has attained elsewhere. That onc thing irPUBLICITY. When every agency, especially those whicf, are directly benefited by the operation of building-loan, shall have become enlisted in the work of makinc the movement understood to the rank and file of the people, monly will flow into the build- ing-loan associations in California, as elsewhere, in hundreds of thousands of little streams and wiil gb out from them in the larger sums necessary to supply the building materials for homes and buildings, for which there is such an urgent call in this State. Building materials will be purchased more largely for cash ; labor will be more fully employed; business in general will be wonderfully stimulated and, best of all, the money which will do this will have been diverted, from channels now going to waste and often worse, into the industries which make for permanent upbuilding of the State.

In this work in California, as has been the case in the East, the lumber industry should take the lead. Discussions of the subject and resolutions similar to those recited in this article should be adopted by the State and local lumbermen's organizations, and active steps, looking to enlisting all of the construction industries in a common movement for such publicity, should be taken.

Ofificers and other heads of firms should personally become members of building-loan associations, both for the advantage and stability to their business resulting from a substantial cash reserve account as, and when needed, and to set an example to their employees, and through them to employees of other industries, to save by means of the building-loan method. \A/hen this shall have been done, not only can three hundred millions of dollars in cash be added to California's building program, but, because of the continuance of the operation of building-loan societies literally hundreds of millions of additional dollars can, in the future, be thus husbanded and expended for lumber and building material.

Recently the Metropolitan Guarantee Building-Loan Association, of San Francisco, circularized nearly all the building and loan associations in California, offering to take all idle funds which they might have on hand. Every answer showed that the associations addressed could not take care of their own loan applications. This same condition will be found true with mortgage c,ompanies and Realtors throughout the State.

Lumbermen of California! ln the building and loan movement you have an opportunity for aervice to the State and to our common humanity, coupled with untold pouibilitier of rcward to youreelver. It ia yourr for thc taking. "LIFT UP YOUR EYES AND LOOK ON THE FIELDS; THEY ARE WHTTE ALREADY TO THE HARVEST."