Business: Construction Halts

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An Organized Hiatus in the Building Industry—It Costs Too Much

The Building Situation. By all the accepted signs, the building industry has for some time been the victim of speculative construction, attended by a labor shortage and constantly mounting prices for materials and labor. Recently, large projects have been curtailed in Chicago, New York and other centers.

Most significant has been the step taken by the Board of Governors of the American Construction Council. Headed by Franklin D. Roosevelt and representing all factors in the construction industry, this national organization has recommended that all new construction be deferred for several months, that bankers restrict speculative building loans till fall, that wide publicity be given to the rising costs of construction and that all building by the government be halted over summer. The Federal Reserve Board in Washington has announced itself in agreement with the Construction Board's advice to curtail loans, while Chambers of Commerce all over the country have promised cooperation and support.

Several facts are apparent with relation to the building situation: demand for buildings still outruns the supply, but prices are now so high that the demand may remain potential only and not effective, with the result that a disastrous collapse in the industry may occur. It is better for all parties that this should not happen; on the other hand, the renter must not be forgotten. As the speculative builder loses, the tenant will benefit. Rentals in most parts of the country are now very high, even compared with other prices, and business cannot proceed on a sound foundation until they rest on a lower level. Too much curtailment of speculative building now would therefore prove just as undesirable as a continuance of building under present conditions.

Scope of the Industry. In other words, it costs too much to build. That is the discovery of the day and everybody is interested except the picturesque minority whose only roof is the starry sky.

Although construction is, next to agriculture, the greatest of all American industries ; although 11,000,000 men and women, one-tenth of our population, are connected with it; and although nearly 50% of the savings of American people are put into construction; very little is known about the construction industry as a whole.

" Construction " includes building of roads, railroads, houses, industrial plants, docks, sewers, mines, etc.; it is intimately associated with insurance, banking and public policy; it embraces architects, engineers, contractors and all manner of workmen; it directly affects the pocket book of every man from his log-cabin birthplace to his marble mausoleum.