President's Housing Act Promises Resid ence Building Revival

Washington, D. C., June 30.-The President's llousing Bill, desigrred to release the log jam which has been damming the progress of the durable goods and capital goods industries toward recovery and which has been described by Albert Deane, nationally known business executive, and one of the three men delegated by the President to draft the measure, as the greatest single achievement of the Administration, is a piece of legislation enacted during the turbulent course of the recently-ended session of Congress which holds particularly encouraging interest for lumbermen. It has been described as the outstanding hope of the construction industry and, consequently, of those industries to which construction must look for materials.

Among other acts of interest to lumbermen are the "Loans to Industry Bill," the Tariff Act, the Corporate Reorganization Act, the Revenue Act of 1934, and the act providing for the relief of government contractors operating under codes.

Wilson Compton, general manager of the National Lumber Manufacturers Association, when discussing the Housing Bill before that body at its annual meeting in Chicago, described it as an undertaking on the part of the government "to make available, at low cost, billions of dollars for modernizing and for the construction of low cost small homes."

"There is no industry which, ifit does its part," he said, "stands to gain more than the Lumber and Timber Products Industries from this promised new National Recovery enterprise of the government."

The purposes of the act will be accomplished largely by the creation of the Horne Credit fnsurance Corporation, to be capitalized at $200,000,000. Through this corporation, the government will encourage the flow of private capital into the financing of new home construction and home modernization activities. Special provision is made for each.

Loans for modernization purposes are to be based upon "consumer credit," that is, upon the character and the ability of the borrower to pay, and do not involve real estate as security; consequently existing mortgages will be no deterrent to the granting of these loans except as they may hamper the ability of the borrower to discharge his new obligations. The real basis for this form of credit is to be the assured income of the borrower less his fixed expenses, considered in the light of his general credit standing.

The Home Credit Insurance Corporation will insure the lender against loss on such loans up to twenty per cent of the total amount, loaned by any one lending institution to borrowers who qualify. The fact that the lender must assume 8O per cent of the risk will operate to deter the unwise granting of accommodations. That the government is willing to extend total insurance to the extent of $20O,000,000 should cause $1,000,000,000 of private capital to be available for these loans.

New Construction

In the case of new construction of dwelling houses, for not more than four families each, which are used in whole or in part for residential purposes, the government will insure the full amount of any loan up to 80 per cent of an appraisal not in excess of $20,000. Funds are to be loaned at 5 per cent, although in certain areas where such a rate would upset local money markets, interest may be increased to 6 per cent. To this is to be added an insurance premium of 1 per cent to be paid by the lender ind collected by him from the borrower. Loans are to be secured by mortgage, and payments will be arranged to affect amortization in twenty years. From the.fund created by the I per cent insurance premium will be deducted any losses which occur and the expenses of administration; the remainder will be returned to borrowers in a way which will afiect amortization in less than the contemplated twenty years.

The plan could hardly be expected to accomplish a complete revival in the construction industry if the real estate market were cluttered up with property in distress because of existing short-term mortgages. That this fact was quite obvious to the formers of the bill is shown by the provision that such obligations may be refinanced with longterm loans under the same condition as those effecting new construction. To solve the problem of a construction industry which has suffered depletion of its capital and which might therefore be unable to carry the financial burden of building activity pending the realization of mortgage proceeds, the bill amends the Federal Reserve Act in such a way as to make acceptable for rediscount any loans made by member banks to operators in the construction field engaged in the erection of homes which qualify for insured loans.

To facilitate the easy flow of private capital from one part of the country to another, the bill authorizes the creation of National Mortgage Associations rvhich may be organized, with a capital of $5,000,000 each or more. These associations will be enabled to rediscount insured loans and in turn issue bonds against such mortgages.

It will be readily seen that the buyer of these bonds will have as security the value of the properties themselves, the financial responsibility of the original lender, the endorsement of the United States Government, and the capital assets of the bond-issuing National Mortgage Association.It is almost unquestionably the greatest degree of security ever placed behind any open-market bond, anywhere, any time.

Another important feature of the act is the insurance of savings and loan accounts up to $2500 in eligible and qualifying federal savings and loan association, building and loan associations, homestead associations, and cooperative banks. This insurance, which is to be provided at a premium of one-quarter of 1 per cent per annum is mandatory upon federal savings and loan associations, of which about three hundred were organized under the authority of the Federal Home Loan Bank Act.It is optional with other qualifying institutions.

The bill amends the Home Ow,ners Loan Act to authorize the sale of an additional billion dollars in debentures for the relief of distress mortgages, and to allocate another hundred million dollars for modernization loans to improve property already mortgaged to the corporation. The act will function under the direction of a Federal Administrator, to be appointed by the President. It is rumored about Washington that Harry Hopkins, present director of the Federal Emergency Relief Administration, is slated for the post.

Loans to Industry

The "Loans to Industry Bill" authorized the Federal Reserve Board to make S-year loans to established industrial or commercial business institutions for the purpose of providing them with capital. Member banks are enabled to rediscount up to 8O per cent of such loans.

The bill amending the Tariff Act of 1930 authorizes the President, for a period of three years, to enter into foreign trade agreements with other governments and to increase or decrease existing tariff schedules on any item up to 5O per cent. lfe cannot, however, transfer any article from the dutiable to the free list or from the free list to the dutiable.

The Corporation Reorganization Act permits the scaling down of the obligations of debtor corporations through agreement with their creditors. A corporation finding itself unable to meet matured debts will be permitted to file refinancing plans in the Federal courts, which are authorized to approve settlements where creditors holding two-thirds of the claims agree.

In the 'new Revenue Act, Congress has retained Section 115 dealing with the tax-free distribution of earnings and profits accumulated or increase in value of property accrued before March 1, 1913.

The Act providing relief of government contractors operating under codes creates a means whereby persons who entered into contracts with the Federal Government before August 10, 1933, including subcontractors and material men, may file a claim for additional costs incurred by reason of their compliance with a code or codes of fair competition or the President's Reemployment Agreement.

All of these measures, and particularly the Housing Bill, were actively supported by the National Lumber Manufacturers Association.

L. C. A. Votes To Include \(/holesalers Under Codc

Washington, D. C., July 3.-In order to terminate what has up to now seemed an almost interminable problem, the Lumber Code Authority last week, working with the Administration, obtained agreement from representative wholesalers in the matter of bringing the wholesale trade under the Code. While hitherto it had been the contention of wholesalers that before they could come under the jurisdiction of the code and a separate wholesaler Division of the Lumber Code Authority be established, it would be necessary to agree upon a definition of wholesaler trade in the lumber industry to be written into the Code, the wholesalers nevertheless last week graciously acquiesced and, at the request of the Authority, submitted a petition to the Authority that they be placed under the Code. The petition read to the Authority by W. W. Schupner, secretary-manager, National-American Wholesale Lumber Association, was thereupon approved, and th,e association was recognized as sufficiently representative ofthe entire wholesale lumber industry to warrant its functioning as the administrative agency of the projected wholesaler division.

On the closing day of the annual meeting, David T. Mason, executive officer of the Authority, reported to the Authority that conferences with the Administration had resulted in a pledge from the Administration of speedy action on the wholesalers' petition. Major Mason said NRA at the earliest possible date would give notice of the Authority's proposed amendment bringing wholesalers under the code, and would at the same time issue an Authority-approved definition of wholesaler trade, allowing not less than fifteen days for receiving protests either against the amendment or the definition or both. In the meantime the National-American Wholesale Lumber Association will proceed with the work of setting up a new administrative Division of the Lumber Code Authority so that if possible it will be pr'epared to function immediately upon final action in the matter by the Authority and the Administration. Thus it appears that one of the most vexing problems with which the industry has had to deal since the creation of the Code is now finally destined for settlement within not more than 6O days.

Any Smart Hotel

The Viking doorman scorns fatigue, Humming a marriage march from Grieg. The Italian bootblack's brushes ply To an aria from "Butterfly."

The German forist sprays the palms Crooning a lullaby of Brahms.

The French chef seasons a rich filet To a broken phrase of Charpentier.

The Russian liftman signals off, Whispering Rimski-Korsakoff

The American guest in his gilded suite, Sings "She's my baby, ain't she neat?"

Laying On Of Hands

"He says he can read you like a book."

"Yah. And he uses the Braille system."

COULDN'T TAKE IT

He-"Vt/hat would I have to give you to get just one little kiss?"

She-"Well, most anything practical; chloroform, ether, gas, or even novocaine might help."

Results From Ad

Card in Florida newspaper: "Thursday I lost a gold watch I valued very highly. Immediately I inserted an ad in your paper. I waited. Yesterday I found the watch at home in the pocket of another suit. God bless your good paper. It brought results."

Thrift

'Naturally," said Jones, "I want my daughter to have some sort of an artistic education. I think I'll arrange for her to study singing."

"Why not art, or literature?"

"Art spoils canvas and paint, and literature wastes reams of paper. Singing merely disturbs the atmosphere temporarily, and wastes nothing."

The Ears Have It

The Governor of North Carolina told one recently at a banquet:

A king, desirous of going hunting, asked his weather prophet what sort of day it would be.

"The day will be fine,. your Majesty," said the weather prophet.

Whereupon the king, in high glee, set out for the forest. Passing a farmer joggling along on a jackass, the king hailed the countryman jovially:

"Fine day we are going to have," said the king.

"I'trn so.rry, your Majesty," replied the farmer, "but it is going to rain before night." And it did rain. The heavens opened up that afternoon and the king, soaked, cold, and disgruntled, returned to his castle and fired his weather prophet. Then the king sent for the farmer.

"I shall make you my weather prophet," declared the king. But before conferring the final degree on him, the king asked!

"Tell me, my good man, how did you know it was going to rain?"

"By my jackass. When his ears stand up, I know the day shall be bright. When they flop, I know it wiU rain."

"Aha !" said the king. "Then I shall appoint your jackass my weather prophet." And he did so. And from that day to this we usually have jackasses for weather prophets.

The Wise Virgin

He-(On country road) "Out of gas. Well, what do you think of that?"

She-(Pulling out flask) "Oh, yeah?"

He-"What's in that, licker?"

$hs-"\Js\ r. Gasoline."

Too Early

fsashsl-"And why did Noah take two of each kind of animal into the Ark with him?"

Johnny-"Because that was before they started that stork story."