Vagabond Editorials

(Continued from Page 6) closely in touch with efforts to build with Government guaranteed loans, is that there is a very visible chilliness evidenced by most banks aborit making the loans. They sign up as FHA banks, but make few loans. t *. *

That the Government is eager and anxious to have lots of FHA loans made and lots of buildings started under Government guarantee against loss to the makers of the loans-there can be no doubt. But, as one lumberman said in. discussing the situation, there seems to be another side to the problem. When the banks were caught in the jam of two and three years ago it was because of the "slow" paper, plenty of it real estate and building paper, that filled their note drawers. They have worked out from under all that sort of collateral since,.then, and now they are being urged to again invest their funds in the same sort of biscuits that gave them so much indigestion before.

They don't seem to ,*. ,a ln" ,".a that the Government guarantees them against loss doesn't cover the situation. If a depositor comes in and wants his money right pronto, the bank has got to have it. So long-term mortgages on homes and buildings, even though good as pure gold and guaranteed by Uncle Sam, do not look "fast" enough.

Newspapers clutter *r:"; "l , *rr," this, complaining that there is much advertising of FHA but little action. It seems that that is a definite and clear statement of what is taking place. FHA looks grand. But it requires a cer- tain amiunt of enthusiasm on the part of the lenders of money in order to make it amount to much.

I have been doing ."-" "r"rdgating and asking lots of questions since I wrote this column two weeks ago. I find that there is more disposition-in the places of my inquiries, at least-to loan private capital on building mortgages, than I had assumed to be the case. I talked to a number of men whose business it is to find investments for clients with money to spare, and these men tell me that most of their clients would welcome good mortgages, and at very, very reasonable interest rates. To people with surplus money today, five per cent interest with decent security, seems a splendid return compared with what they are generally offered. Because rnoney is, indeed, a drug on the market. If you don't believe it, try to loan a gob of it on safe security and see what you can get.

All of which brings -l o""o.a the same conclusion I have been following, namely, that what we need most is not so much for banks to loan money for building purposes, but for the bankers to advise the owners of their surplus deposits to take it out and so loan it. The money owner who is looking for a return on his money with reasonable security, is not interested in call money. What he wants is dependability and a decent return. He can get both by intelligently purchasing good first mortgages on homes. '1. :1. X<

If every banker would advise his depositors of surplus cash to buy building paper with it, we would really be getting somewhere. Wonder how we can get them to do it?