Columbia University Libraries Digital Collections: The Real Estate Record

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wis; U^D "ANC" G IDE %1 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