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Realty Loans and Bank Resources

Statistics prepared by the Division of Public Works
and Construction Development of the United States
Department of Labor, under the direction of Franklin
T. Miller, prove conclusively that the real estate loans
of banks did not grow as rapidly as bank resources in
the United States from 1913 to 1918, and that the main
causes of this condition are that real estate loans lack
the same marketability as other forms of investment in
which banks have placed their funds, lack of standardi¬
zation in making loans, changes in the banking system
and Government restrictions and the sale of Liberty
Bonds.

The last two causes have been removed, but there
are left sufficient reasons for the preference shown by
banks for other forms of investment than the bond and
mortgage which is the mainstay of the realty business.

It is undeniable that by the enactment of the Federal
Reserve Bank Law a great volume of liquid securities
has been made possible, and the inducements for insti¬
tutions which have hitherto relied on investments in
real estate to enter the Federal reserve System have
been made so attractive that they are becoming mem¬
bers in increasingly large numbers. This action auto¬
matically puts an end to their making real estate loans
and so reduces the capital available for realty opera¬
tions. But while commercial banking has undergone
great improvement in the last few years the practice
of institutions loaning on real estate has remained vir¬
tually at a standstill. Until it has been modernized
real estate is bound to suiifer.

The difficulties of the situation are apparent. One
bill, introduced by Senator Calder, is an attempt to pro¬
vide a measure of relief. The representatives of the
Savings Banks are framing another bill, which may be
offered later.

There can be no objection to legislation which will
make real estate mortgages as readily saleable as other
forms of securities upon which banks rely for the in¬
vestment of their resources. The moves so far made,
which are tentative, should lead to the enactment of
measures which will be of immense value to all real
estate.





Prices of Building Materials

Reports of the prices of building materials and sup¬
plies for this week show further gains in a number of
staple articles. Prices have been advancing since the
first of the year at a fairly regular rate, and in this re¬
spect have kept pace with goods in other Hues of trade.
Lumber has had the most spectacular rise, and the rea¬
sons for this are well known and logical.

Brick and cement have not shared in the general
movement for reasons set forth in the interview with
Mr. Wright D. Goss, former president of the Associa¬
tion of Dealers in Masons' Building Materials, printed in
this issue.    He calls attention to the control of these





materials by the Government during the war and to
the efforts of the association since Federal control was
lifted towards stabilization of pri'ces in order that build¬
ing might be encouraged.

Prices, he says, have not been fixed but manufacturers
of brick have attempted to hold prices at the Govern¬
ment figure, although costs of production have in¬
creased, in order that trade, which was at such a low
ebb during the war, might be stimulated. Cement prices,

instead of being raised, have actually been lowered,
for similar reasons.

The attitude of the members of the association can
hardly be criticised in view of the advancing prices of
so many other commodities and in view of the demand
of rfarmers, for instance that governmental regulation
of wheat shall be discontinued in order that they may
be able to take advantage of foreign demand to get
more per bushel than is now possible under Federal
control. Copper has advanced from the low point of
around 15 cents to a standardized price of 20 cents per
pound. The efforts of the Railroad Administration to
depress steel prices failed, and this report of the Steel
Corporation on unfilled orders, showing an increase for
the first time since the armistice, proves that the re¬
fusal of the steel manufacturers to meet Mr. nines'"
demands was justified by the real facts in the industrial
"world.

Prices, generally speaking, are either advancing or
resisting the impetus to advance. There is no sign any¬
where of a downward tendency.





The Annual Coal Scare

Notwithstanding the disturbing announcements of
the IvFational Coal Association, there is very little rea¬
son for fear of a coal shortage in this city next winter,
unless there should be a recurrence of the terrible
weather experienced two years ago, which is unlikely.
Anthracite is the main reliance of New York and figures
of the production of this kind of coal show an output
for this year practically equal to that of 1918, which
was large.

From January 1 to June 21, 1919, the estimated pro¬
duction of anthracite was 37,000,000 net tons, which is
within 10,000 net tons of the amount mined during a
similar period last year. The falling off in production
is therefore only about a quarter of one per cent, from
the huge amount mined a year ago under the stimulus
of patriotic appeals to the miners to do their bit.

The export demand is large and probably will be in¬
creasing heavily. But it is also as likely that with
foreign orders will come greater efforts on the part of
mine owners to enlarge the output.

There is a 26 per cent, drop in the production of bitu¬
minous coal this year compared with last year. Emi¬
gration of miners to their old homes in Europe is given
as the chief cause of the decreased output. This is a
serious   matter,   since  bituminous   is   used   largely  by