Answers Attack on Building lndustry

Replying to charges made against the U. S. building industry by John T. Flynn, in the June 17 issue of Collier's, W. C' Bell, chairman of Western Homes Fou,lrdation and managing director of the Western Retail Lumbermen's Association, today declared that no other American industry has made a better recor.d of recovery from the depression or is contributing more to general business recovery in 1939.

"The building industry, bv which is meant all industry and business groups concerned with building, was hit earlier and harder than any other by the depression," Mr. Bell stated. "It was stalled lo,nger than any other, because of the nationwide demoralization of home financitg. There was a real upswing for most major industries in 1933, but building declined on through 1934. Then home financing was reestablished mainly through the Federal Housing Administration and the Home Owners' Loan Corporation. The amortized home loan replaced the old straight mortgage. In this new financing channel the building industry has surged ahead until now it is the leader of general business recovery.

"What I have outlined is a matter of plain record. The Collier's attack on the building industry is not based on the whole record. Its author, the noted economist, John T. Flynn, takes the role of a prosecutor whose purpose is to make the worst possible case against a defendant. His article is not a study, not a sampling of the many and various conditions and problems of the building industry throughout the nation. Instead, he makes his charges that the industry is sick, inefficient, reactionary in methods, high in its costs to the consumer, and dominated by racketeering combines, on the basis of selected evidence that is unrelieved by any evidence in the industry's favor.

"That building has its sore spots no one in the industry will deny. But Mr. Flynn in effect denies that there are any healthy spots in U. S. building. He selects an isolated example in California to support his case for the prosecution but makes no rnention whatever of the wonderful building record of Southern California in 1938 and 1939. In Los Angeles alone construction for the first five months of 1939 exceeded $33,000,000, while in the same city a 13year record was broken in the number of building permits for one-family houses for the first five-month span.

"The Flynn article strongly implies that the 23,000 retail lumber dealers of the United States who belong to trade associations have combined for racketeering purposes. What Mr. Flynn knows about the retail lumber business is shown when he describes a Florida retail lumber company doing a business of $150,00O a year as a 'small enterprise,' and as 'one of those little business concerns we hear so much about.' Now, among retail lumber dealers, the concern doing a business of $150,00O a year is not a small enterprise, but a little business concern; it is a long way above the average, particularly in Florida.

"It is curious that Mr. Flynn should have selected the Florida organization of building material dealers as an object of attack. The work of the Flori.da Lumber and Millwork Association is carried on by one rperson, a woman, Marie Bennett, the secretary. She is making a gallant, single-handed effort to build up the Association's membership among the many Florida dealers who belong to no orga.nization. But Mr. Flynn paints a picture of the Florida building material dealers as a monopolistic octopus strangling and devouring the independents of the trade This will be startling news to Marie Bennett.

"The Flynn article states that 'nearly half the home building in the United States is now focused in about three spols, and all of this is construction by the operative builder, the successor to the speculative builder !

"How can Mr. Flynn be so sure in this statement, when current building statistics cover only urban centers with population of more than 10,@0, while coverag'e for cities of less than 25,000 population is very incomplete? Mr. Flynn does not include Los Angeles in his 'three spots,' although this city is second in home building. By describing the operative builder as'the successor to the speculative builder,' Mr. Flynn im,plies that the industry's efiort to provide low-cost small homes on a mass production basis in 1939 is a jerry-building proposition. With today's building codes, F.H.A. requirements and other similar measures generally in efiect, the speculative jerry-built home is practically outlawed. And the record shows that the industry itself has been the main force in outlawing it. I suggest that Mr. Flynn study the record in Detroit and Los Angeles on this point.

"To conclude, let me summarize a few facts to the credit of the United States home-building industry. The record shows:

"That the building industry, in cooperation with the Government, has revolutionized home financing since 1934; that, as a commodity, the 1939 home is superior in every element, from plan to paint, to the l9D home; that the 1939 home is more home for the dollar than the home of 1929; that the cost of lumber and building materials in 1939 is from five to ten per cent lower than the Zl-year average since 1918; that no other major commoditv can be purchased with such a small percentage of the total cost for a down payment; that the home buyer obtains legal ownership with down payment on a home, while the buyer of other products gets only equitable ownership with the down payment; that bankers will make loans for terms as long as 25 years on the 1939 product of the. home-building industry, while five years is considere.d a long loan term for any other generally used product; that home building is a local industry and, leaves more of the price of its product at home than does any other.

"Such are a few of the facts that should have been considered in the Collier's article if the author and the editors had held any purpose of doing justice to the building industry of the United States. It is because it is a decentralized industry, made up of tens of thousands of small local units, that it can be so safely attacked. No other industry has had to advance under the handicap of so much hostile or uninformed propaganda. This propaganda has largely failed because the people in the average American community cannot be made to believe that their friends and neighbors who are retail lumber dealers and building contractors are the racketeers and the mental and moral defectives that Mr. Flynn, Collier's and Company would have the public believe them to be."

Appointed Yard Manager

R. D. Bailey has been appointed manager of the FoxWoodsum Lumber Company at Rialto. He served as yard foreman of their yard at Colton for the past two years, and previous to that time was with the Suverkrup Lumber Company in San Bernardino. Leonard Whittaker will continue as yard man at the Rialto yard.

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