Official proceedings of the annual meeting: 1923

352

THE HOME

These deposits are the workers' own money, their own savings. Who gets the use
of them now? The national government and some 3,700 banks, state, national, and
private, where part of the funds are deposited. The government's profit from these
humble depositors last year was over $3,000,000. That of the banks, not reported,
was perhaps as much more. The government pays a 2 per cent interest to the depositors. It receives 21 per cent from the banks for the use of ther part of it, and much
more from its other investments. The banks make a handsome profit by lending out
what they receive at 6 or 8 per cent. Does that seem to you to be quite fair to the
depositors, and they all the time living in shabby old houses because they can't afford
to build new ones? Suppose the government, instead of lending the peoples' money
to banks or investing it (for its own benefit) in liberty bonds, lends it back to such of
the depositors who want to build homes for themselves at the same rate at which it
lends to banks-21 percent? Doesn't the reasonableness of that appeal to you? To
what a big economic group that would open up home ownership!
The housing division of Secretary Hoover's department recently figured that a man
with a $2,000 income might venture to build a $4,ooo house if he had $I,ooo and borrowed the rest from a building and loan association at 6 per cent. It foots up, according to the housing division, to $550 a year, including taxes and upkeep, a rather heavy
burden for a $2,000 income, and certainly impossible for lower incomes. Reduce the
interest to 2- per cent, and you save at once $112.50 on the annual charges. Increase
the time for repayment to twenty-five years, and you cut down the yearly instalment of
principal by $6o. This is a total reduction of $I72.50, leaving an annual charge of only
$377.50. On the same proportional basis that would open the chance for home ownership clear down to the $I,400 income group. The chief trouble with this proposal is
that the amount of the postal savings deposits is comparatively small-only $I38,000,ooo. There is not enough to go around. But surely a piece of a loaf is better than
none at all. If half of the deposits were invested in mortgage loans averaging $3,ooo
each, that would mean 23,000 new homes and home owners, a beginning quite worth
while. And it is certain that such a use of the fund would attract a great many new
depositors and revive its waning popularity.
This plan is no invention of mine. Holland has been making just this use of postal
savings deposits for many years. The American Federation of Labor has been advocating it for the United States since I913. It was one of the measures advised by Secretary Hoover during the summer of I921. Bills have been introduced in Congress from
time to time, but there has never been a wide enough public interest shown to push
them through. There have also been periodic proposals to increase the interest rates.
But it would do the workers much more good to be able to borrow for home building
at a low interest rate than to receive a little more on their deposits.
Don't say, "That's a good idea," and then go away and forget about it. Let us
do something here today, while we are all together, to start the ball rolling, so that at
least these 23,000 working men and their families-over i00,000 people after all-can
get away from their dark, shabby, uninviting, rented flats and have the joy of building
the fresh little new homes all their own which they have long dreamed of vainly-that
five-room bungalow with all the modern improvements and a garden, where pale anemic
babies will grow rosy in the sunshine, where mother's work will be 50 per cent easier and
i,ooo per cent pleasanter, where sister will be proud to invite her young man to call,
and where father will spend his evenings because it is the pleasantest place he knows.