Lett@n"s

Small Town America

The Merchant Magazine David Cutler, Editor-Manager

573 So. Lake Ave. Pasadena, Ca.91101

Dear Dave:

I read with interest your article "Small Town America Is On the Baii," (July issue, p. 4) and I was so pleased to read of the great effort of the Slettedahl-Knudsen team there in the hills of the State of Washington. Knowing both of these men and their zest for doing big things it is nothing new to me. They make a great team and when they decide to do something of this nature, it will, it must, and it is, a great success.

As I read this article, I also became aware ofthe fact that this kind ofa story can happen in any small town in this country.

Most articles and news releases are always pointing to what a great job the "Biggies" are doing with very little ever written onwhat great jobs are being done by the smaller dealers as well as the small towns that support these small dealers. Knowing these men so well, I am sure they took a swipe at the big cities surrounding them to accomplish what they did in this program.

Again, my hat is off to Bob and Larry, but a special salute to you and your writing for recognizing the efforts of so-called small dealers in small communities.

Cordially,

E. P. "Woody" Railey General manager Scharpfls Twin Oaks Bldrs. Supp. Co.

P.O. Box 887

Eugene, Ore.9740l

Merchont Clossified!

Call: (415) 346-6000

(213) 792-3623

(2131 7924098

Reaction Negative

The Merchant Magazine

David Cutler, editor-manager 573 So. Lake Ave. Pasadena, Ca.9ll0l

Dear Dave:

My reaction to your recant editorialQ4ug., p. 4) regarding Peaks and Valleys in the housing industry is negative. Though demand for shelter of all types continues at a constant level the ability to meet this demand will continue to fluctuate as determined by the availability of proper home financing.

Inflation is the key word to our fluctuating problem and until it can be contained our industry will be subject to the whim of every government agency which has an idea on how to solve the inflation problem.

Lnterest rates are the present "muscle" for cooling off the economy. Both the Federal Reserve and the banks have moved their rates upward to a point where it is

GOOD IDEA. BUT...

The Merchant Magazine David Cutler, editor-manager 573 So. Lake Ave. Pasadena, Ca. 91101

Dear Dave:

The editorial which speaks of eliminating plateaus, peaks and valleys in the home building industry (,4,/g., p. 4 ) is a great theory but we cannot see it carrying out in actual practice.

Any retail lumber dealer who can look back over the years will readily acknowledge a close relationship between housing starts and tight money conditions. This is already apparent in the San Joaquin Valley area of California as it must be elsewhere.

A sizeable portion of the home building market results from the home owner upgrading his home into a larger more efficient residence. This particular phase is made extremely difficult under high interest conditions as the home owner finds it more difficult to sell the home he currently has. Financing ccinditions might be available on the better home but he must sell his existing home before he can upgrade into his desired dream home.

We are beginning to see more people impossible to qualify a home buyer for acceptable housing ofhis choice. Though all government agencies are working hard to solve our problems the actual truth shows little effect in eliminating Peaks and Valleys.

Ninety days ago a home buyer could easily qualify for a XJTo loan at 7VzVo. Today that same home buyer would be lucky to get a 60Voloan atgVo. The savings and loan associations, which are the greatest source for home mortgages, indicate no relief in sight until the third quarter of 1974.

This indicates a large slow down or a valley that our industry must experience regardless of the programs that the government agencies are proposing or may have implemented to some minor extent.

Sincerely,

Homer M. Hayward President

Hayward Lumber & Home Supply l I Abbott St. Salinas, Ca. 93901 changing their minds and deciding to stay with their existing homes. Some of our builders are receiving cancellations on building plans because ofthe increased interest costs and problems in achieving the loan.

It is our firm hope that your editorial is right and the plateau of around two million housing starts per year will continue through the '70s but we must agree with the Wall Street Journal that a serious drop in housing starts appears positive for 1974.

Sincerely,

Arthur E. Masters President The King Lumber Co. 2200 Union Ave. Bakersfield. Ca. 93305

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