North California Lumbermen Meet and Protest Credit Regulations on Home Building

The lumbermen of several districts in fornia have taken up cudgels seeking relief Regulation X, which regulates and restricts construction.

Northern Caliagainst Credit credit on home

Two meetings of lumber groups have been held in the last tr,vo weeks for the purpose of discussing the home building regulations, one on August 29, at Auburn, California, and the second at Red Bluff. California. Both these meetings were attended by U. S. Congressman Clair Engle, of Red Bluff. In both meetings there was specific discussion of the Regulation complained of, for the enlightenment of the Hon. Engle. Resolutions tvere introduced, discussed, and approved at both these meetings.

Leaders in the industry in Northern California state that the new and revised revision of Regulation X which relaxes restrictions on homes costing $12,000 and under, will do a certain amount of good, but no more, since you can't build much of a house for those prices in metropolitan districts of California today.

Following is a report of the meeting at Auburn on August 29, at together with resolutions passed at that meeting and the later one at Red Bluff:

To meet with Congressman Engle, the follorving California lumbermen were present:

Carl S. Walker, Feather River Pine Mills, Feather Falls

R. A. Colgan, Jr., Shasta Forest Co., Redding

W. B. Shadburne, Shadburne Lumber Co., Grass Valley

J. E. Little, Foresthill Lumber Co., Foresthill

William Hughes, Hughes Brothers, Foresthill

Ted Finney, American River Pine Co.. Foresthill

Bron E. Smith, California Door Co., Diamond Springs

C. G. Price, California Door Co., Diamond Springs

A. H. Land, Feather River Lumber Co., Feather Falls

Del Schiffner, Grizzly Creek Lumber Co., Nevada City

W. J. Pendola, Yuba River Lumber Co., Qrass Valley

Wendell Robie, Auburn Lumber Co., Auburn

Frank Notterman, Maxwell Lumber Co., Auburn

Al Fisher, Fisher Lumber Co., Alta

P. B. Goss, Bank of America, Auburn

Geo. R. Duff, Cal-Ida Lumber Co., Auburn

F. V. Amaral, Oregon Creek Lumber Co., Marysville

Hugh A. Schaffer, Michigan-Califorqia Lumber Co., Camino

Paul H. Logan, American River Pine Co., Foresthill

Ralph Hodges, Western Pine Association, Sacramento

Joe Cole, The Goldfield Consolidated Mines Co., Grass Valley

Marion C. Henness, Henness Sawmill, Georgetown

Fred Becker, Georgetown Lumber Co., Georgetown

Warren Carleton, Winton Lumber Co., Martell

Clifford Anderson, Winton Lumber Co., Martell

Wendell Robie stated the meetirig was called at the request of Congressman Engle, r'vho is concerned with reports to him from various lumber operators in the North end of his district describing a serious falling-off of business to support their operations and woods and mill employment in their organizations. In order that Congressman Engle can have the personal comments and advice of men in the lumber industry in the central portion of the district, this meeting was called in Auburn. He introduced Clair Engle.

Congressman Engle stated that the lumber industry is at present the la.rgest concerned rn'ith natural resources in his district, which covers the whole length of the long Sierra Nevada in California. He continued, it is so important to the people of his district that if anything is wrong, which he can help correct, then he wants to knolv of it. To get full information, he said, the best way is to mcet and talk directly with the people concerned and for that reason he wanted to hear from everybody in the meeting, who would comment on industry conditions affe,cting their business.

As the turn for each man came, there was plenty of irrcentive among those present around the room .to speak of the condition of their own business and that of industry neighbors in their areas and to voice their opinions regarding a present serious slump in the market for present production.

As each man spoke, opinions multiplied concerning the serious effect on the lumber industry by a decline in home building construction, without a compensating market development to use equivalenl: production. Most of the speakers found the lameness in home building was created by certain provisions of Credit Reirulation X, as issued by the Federal Housing Administrator and the Board of Governors of the Federal Reserve System, as their interpretation of the Defense Production Act by Congress and Executive Order No. 10161 of the President.

It was clearly pointed out that while the industry is urged to produce lumber as an essential material to National De{ense, it cannot remain in a state of good health 'rvhen certain elements of production, normallv used in home building, are piling and backing up around the mills, to create, an expensive and idle tie-up of capital u'hich is otherrvise required to maintain payrolls and operations. Some present reported this slump of business as s,lowing down their operations and providing serious uncertainty for the future and many told of shut-downs of other mills in their areas and stated, more would have to go down if present conditions are not irrrproved by a market for production.

Congressman Engle asked for an explanation of the olt jectional features in Credit Regulation X.

Wendell Robie used a copy of the Regulation and stated the Regulation sets up certain maximum loan amounts for any residential construction based on the appraisal thereof, and that the maximum loan percentages rapidly decline as appraisals increase. He stated that with the declining value in the purchasing power of the dollar, which is reflected in California by greatly increased wage scales for building construction mechanics and labor, that the cost for a fairly moderate new three bedroom home with utilities and street work complete, ready for occupancy,

- rteed lumbet quiek? a catload

ot a stiek?

GOSSIII|.HANDIIIG

EVERY MONTH of the year, builders atd fumets need SISALKRAFT Products more andmore for PROTECTION uses. EVERY MONTH, millions of SISALKRAFT ads (7l.million scheduled for f95l) trill these users ro "See Your Lumber-Building Supply Dealer". EVERY MONTH, you can sell these low-cost, top-quality, steady-proft sales repeaters for more and more uses. For valuable merchandising aids to help you sell, EVERY MONTH, uttire noail frequents a price range of $15,000 to $16,000 in suburban areas of California metropolitan cities. He stated the present maximum loan amount for a $15,000 -home property is $10,700 and of a $16,000 home, $10,900. For a $15,000 home, the necessary cash down payment required by Regulation X is $4,30O and one of $16,0C0 is $5,100.

Mr. Robie said the down payment requirements represent a serious ,cash consideration to most pebple, as very few nowadays have an idle bank account from which they want to take that much monel, and unless they carry such a big amount of cash on hand that a following provision of Regulation X, is almost an absolute and final prohibition to an American today from buying such a home' This provision states in efiect: When the primary loan on the property is for the maxirirum amount listed in Regulation X, then there is to be NO secondary borrowing, except that it be on borrower's life insurance. He read this example from a printed interpretation of the Regulation. For example: Suppose a purchaser is buying a new home for $15,000. He finds he must have a down payment of $4,300 in cash, along with the maximum loan of $10,700. If he does not have all the $4,300 in cash, he may borrow on his life insurance; but the Regulation states, HE CANNOT BORROW ON ANY OTHER COLLATERAL. No lender is permitted to extend real cstate construction credit without a signed statement of the borrower concerning purpose, total of all credit on the property, and various other assurances to determine the rules of the Regulation are inviolate.

Mr. Robie told of the example of a small manufacturer down on the Peninsula below San Francisco, lvho wanted to buy a subdivision home near his plant for $15,000, which required a cash payment of $5,000. He had clear, another home worth $19,000 of which he wished to retain title. Under Regulation X he was prohibited from borrowing the comparatively small loan percentage of $5,000 on the collateral of the clear property t6 make the payment on the new home. He stated a man r,r'ho owns his home clear, in Salt Lake City, and'who wants to retain ownership as a home for later years; but who may be sent to Sacramento to operate a chain store, is prohibited from buying a Sacramento home while there, if he would require a loan on the clear Salt Lake property to raise any part of the dorvn payment.

Mr. Robie stated that in his opinion a study of Regulation X as applied to California conditions, would convince any lumberman that the national housing program is all wrong which proposes to hand out one hundred per cent of public money to continue the Federal government in extravagant public housing projects, while this Regulation denies a reasonable opportunity to many of our people to secure their own homes from resourceful individual effort and private industry methods. He said that the Denton Amendment to the new 1951 Housing Act, which liberalizes credit to home properties below an appraised value of $12,000, will be of much help to create more housing in many parts of the country; but he stated California conditions require liberal credit to higher amounts and he believed a $12,000 home propertv in some Southern States would cost $16,000 here, when all elements are considered.

To effectively relieve the partial stagnation in home building, he stated a belief that any silly or unwise restriction of the use of other collateral to secure home purchase funds should be completely elirninated.

Mr. P. B. Goss, manager of the Auburn Branch of Bank of America, concurred in the previous explanation given concerning the serious effect of Regulation X on the market supported by home building and stated that home constructipn is also further slowed down by a Federal Housing Administration reduction of maximum loan amounts to 7O/o of appraised value, when permitted by Regulation X. He stated the Federal government is already far ahead on loan insurance funds paid in by borrowers to secure the government against loss and that a restoration of previous loan policies, which had proved a great public benefit, would be indicated by wisdom and be of great help to supply the home requirements of a greatly expanding population in all parts of California.

Mr. C. G. Price stated, the Credit Regulations on building were slowing down all of their business and pointed out that all in the nation should be concerned as the reduction of housing also seriously affects National Defense.

George Duff said his company is now carrying an inventory of sixteen million feet and that the national decline in the lumber business -is very noticeable. He stated that only a portion of the market is affected by home building, but that production is of all grades of material and that the failure to move any substantial part of it affects production for all the rest, much of which goes directly to industrial and defense orders.

Al Fisher remarked, that in his area along Highway 40 in California, six mills operated last year, but now only trvo are operating and the rest have shut down.

A. H. Land stated six or seven cars were shipped from their mill production during last week and that with an ordinary market, they should be shipping that mucll every day.

Ted Finney, William Hughes and all others macle note of the gradual decline of business throughout the summer' Congiessman Engle thanked everyone for the thorough explanation and of the business conditions described' He asked if the meeting would prepare some 'concise recommendations of what they might want him to do to help on his return to Washington'

The following recommendations were then prepared, discussed and approved:

1. To restore the right of lending agencies to make loans in l.:eeping lvith their discretion as to amount for home properties costing less than $20,000, without the Federal Government limitations on the loan amounts specified in Regulation X.

2. To remove from Regulation X, the restriction against the ttse of other collateral, than life insurance, for the raising of a cash down payment on home property.

3. To restore previous successful FHA loan policies 'ivhich permit 80/o to 90/o under conditions, as have pr')ven to be without loss to the government, and for rn''hich the loan insurance against loss has been paid for by the borrowers.

4. For all present to request the associations to which

Alaaleuk ll4alte, aae S/4@?rnq

Beor

Represenling

Tut'rrv

NU.WOOD

FIR,

OAK THRESHOLD DOORS

OftcG: 3931 Gcory

TUIIBER (DIRECT MItt SHIP'IIENTI

"Wholc:olc lo Lumbct Yatds Only" whsre': 22e5 ""'B:i; thev hold membership, to adopt these or similar recommendations and for such associations to request national action of their members with all representa- tives in Congress from lumber producing, distributing, or home building areas to secure beneficial change with government agencies to encourage better and morc productive home building policies.

Clair Engle stated, on his return to Washington about September 12, that he is prepared to go to bat to get the action requested of him by this meeting. He stated, however, that any one man just can't get such a job done there alone. That he believes many members of Congress from a great many other lumber producing regions would want to take action, if their people will fully advise them as was done for him today. He stated Dick Colgan, in his job in Washington for the Lumber Manufacturers Association, had won a lot of respect from the members of Congress and that Dick on his new job in California, could help here a great deal with advice concerning legislation procedure. He asked Dick for his further opinions concerning proper methods to secure action on a national scale for these recommendations.

NIr. Colgan stated the Western Pine Association meeting rn Portland, within a week, should be interested to consider all of these recommendations and that their approval rvould help hasten action as recommended for all associations. He advised that the National Retail I-umber Dezrlers Association, the association for the home construction builders, for the real estate people, the bankers, and the Savings and Loan League, should all be communicated with anri requested to assist.

He stated Congressman Engle is highly regarded in W,rshington and that he agrees fully with him as to the need for concerted action.

There was ag'reement, that all present will get busv along the lines recommended. (This concludes reDort.)

Wins Cedcr Idecr Contest

Alfred H. Schmidt, president and owner of the Portlan<l Shingle Company has announced that Donald H. Clark of the University of Washington Forest Products Laboratory has been selected as winner for the month of August in the regular monthly Portland Shingle Company "Idea" Contest.

Entries were judged by Carl C. Crow, editor and publisher of Crow's Pacific Coast Lumber Digest; Bill Wrigt, superintendent of the Portland Shingle Company and Skookum Shake Company Mills in Portland; and Miss Patricia Carlson of the Portland Sales offic: of the Portland Shingle Mill.

In his winning letter, Clark suggested separating cedar sawdust from shingle tow and mixing a small amount of cedar oil with the sawdust to prodrrce a marketable sweeping compound. He further suggested that containers for the product should be treated so that the cedar oil would not discolor them. The containers, he thought for advertising effectiveness should be about the color of cedar with the printing on the containers to be of a dark green to match the color of cedar foliage.

Dahican American Lumber Co. Ships Philippine to Portland

A recent shipment of Philippine hardwoods to Portland by Dahican American Lumber Company from their mills in the Philippine Islands totaled 800,000 feet, and was consigned to the Palmerton Lumber Company, Klamath Falls, Oregon. Part of the shipment was manufactured and kiln dried by Lumber Manufacturers, Inc., Portland. This is the first of a series of major shipments by Dahican American Lumber Company from their mills.

The California ofifice of Dahican American Lumber Company was opened in May, and is in charge of W. H. Price, vice president and general manager. It is located at 334 California Street, San Francisco 4. Mr Price was with the Weyerhaeuser Timber Company in Tacoma for many years.

Ed I. Loney With Tropiccl d Western Lumber Co.

Ed J. Loney, well known lumberman, is now .,vith Tropical & Western Lumber Co., Los Angeles. handling the sales of softwoods. These include redwood. Douglas fir clears, Ponderosa pine, dry finish, and other special items.

Mr. Loney was with Roseburg Lumber Company for many years, and for the last few years was in business for himself in Los Angeles.

A USEFULwooo

TI]RoUGH -rI{F AGFS

UJ EETgRN PED C'EDAR E2UtrD -rHRoLE I{oUr wEsrgRp, u/ASHTNGfoN AND OPE6oN, lS oNE oFTHE WOBr_Ab [Ae6EsT AND FINEST cEoARS, , ,'TPEES 6Row To HUGE sIzF ,aUO 9ovf RIac'H @oO'(EAtls oF AGF. -ntg' WOOD ,S SOFTAND A6ELF-3:=-, ITRENDERS MAN SUPSR.ON €ERVICF FoR SHINGLES,LUMBEE,Bo,ATS AND MANY SPECIALYIES VOUNG CEOAP. TR-EES 6PC^^/ FEADILY AMoNG THE €TUBBLE-oF TI+EIT{ PAF,ENTS