HOUSING: Dollars & Shovels

Last year the Federal Housing Administration insured the mortgages on 300,000 building units, 60% of all constructed in the U. S. But that was no housing boom and Franklin Roosevelt wants one to help get him out of his Recession. Avowed friend of Labor though he is, he was bound to admit that one factor in deterring home building is the high labor cost, and if the laborer would take a lower daily wage he would get a higher annual wage.

Accordingly, last week the anti-lynching filibuster was interrupted to allow the Senate to pass its first real piece of business this session—a bill to amend the 1934 Housing Act. Mortgages were to be guaranteed up to 90%, interest was reduced to 5% and building of multiple dwellings for investment was encouraged. Pointedly omitted was the specification that prevailing local wages must be paid on the jobs. Pointedly, handsome young Senator Henry Cabot Lodge—another great friend of Labor—had proposed it, but in the end the Senate adopted (42-40) the amendment without the prevailing wage clause.

That ruddy and genial Scot, Stewart McDonald, who has administered FHA for the past two years and who has seen that it has so far taken losses on just 1/1,000% of all business done, observed with customary enthusiasm: “Fifty million dollars worth of building will feel the steam shovels Monday morning!” FHA Administrator McDonald, a onetime motormaker who produced the first cheap, goodlooking car (Moon, Diana), has already done his part. He built himself a house at Palm Beach this winter.