Recovery for Relief

John Jones was a stone mason who owned his own home but he had not been able to meet the instalments on his mortgage for a year and a half. The only one in the family who had work was the boy, who was a shoe clerk. The boy's thin pay envelope and a little something in the savings bank kept the family off the town but unless something turned up they would lose the house, sure.

People like the Joneses needed relief almost as much as the farmers, the bankers, and the unemployed when President Roosevelt entered the White House one rainy afternoon in March 1933. Within a few months Home Owners' Loan Corp. was established to furnish urban mortgage relief, issuing its bonds in exchange for distress mortgages. The mortgages were usually scaled down, payments were put off for a year or two, and cash advanced to clear up back taxes, make repairs.

HOLC got off to a slow, clumsy start because President Roosevelt appointed a "lame duck" Congressman from South Carolina named William Francis Stevenson as its chairman. Democrat Stevenson apparently was more interested in giving his relatives and friends jobs in the new Government agency than he was in getting started with mortgage relief. Another cause of initial delay was that mortgage holders were reluctant to swap their liens for HOLC bonds because the bonds were guaranteed by the Government only as to interest. Therefore Congress at its last session guaranteed them as to principal as well. Chairman Stevenson was replaced by John H. Fahey and soon HOLC was going great guns. By last week HOLC had dispersed $2,000,000,000 to save no less than 650,000 homes.

HOLChairman Fahey still has $1,200,000,000 to loan but the 400,000 cases now pending will use that up. When the last application has been passed HOLC will have refinanced about one-fifth of the total U.S. home-mortgage debt. So last week, its job well done, HOLC announced that no more applications for loans would be accepted. Mortgages were no longer a Relief problem but a Recovery problem, to be handled by the Federal Housing Administration in its drive to rehabilitate the building industry.

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