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THE HOUSING FAMINE 
 
THE HOUSING FAMINE 
 
 HOW TO END IT 
 
 A Triangular Debate 
 
 BETWEEN 
 
 JOHN J. MURPHY 
 
 EDITH ELMER WOOD 
 
 FREDERICK L. ACKERMAN 
 
 NEW YORK 
 E. P. DUTTON & COMPANY 
 
 681 Fifth Avenue 
 
'J 
 
 Copyright 1920, by 
 E. P. DUTTON & COMPANY 
 
 AXL rights reserved 
 
 Printed in the United States of America 
 
BIOGRAPHICAL NOTES ON THE DEBATERS 
 
 John J. Murphy 
 
 Born in Dublin, Ireland, in 1865. Having com- 
 pleted, with much success, his high-school course, he 
 entered the University, but family needs compelled 
 him to abandon his studies. He came to New York 
 in 1882 and experienced many of the hardships of 
 the friendless immigrant. Here he came in contact 
 with the housing problem, in the acute form in which 
 it presents itself to the actual tenement dweller, for 
 in those days regulation was unknown. For several 
 years he worked at engraving and printing for the 
 support of his family, wrote articles for papers and 
 magazines and participated in several economic re- 
 form movements, among others, the Henry George 
 campaigns. He became interested in the Good Gov- 
 ernment movement, and in 1901 was appointed As- 
 sistant Secretary of the Citizens Union. In 1903 
 he was elected Secretary of the City Committee of 
 the Citizens Union, a position which he held until 
 1909. During these years he was active in the Muni- 
 cipal Art Society, the Reform Club and the National 
 Society of Craftsmen, of which latter body he was 
 Secretary for two years. In 1909 he was Secretary 
 
 442 i 69 
 
Vi BIOGRAPHICAL NOTES ON THE DEBATERS 
 
 of the Transit Committee of the Reform Club and 
 directed a successful campaign for the exemption of 
 the Subway and Dock Bonds from the computation 
 of the city's debt. In this work he first met Judge 
 Gaynor, whom he induced to support the measure, 
 although previously opposed to it. On Judge Gay- 
 nor J s election to the Mayoralty, he was appointed 
 Tenement House Commissioner, an office which he 
 held through the administration. "When Mayor 
 Mitchell was elected, he retained him in office. In 
 January, 1919, the Tenement House Committee ap- 
 pointed him its Secretary, a position which he still 
 holds. 
 
 Edith Elmer Wood 
 
 Edith Elmer Wood is the daughter of the late 
 Commander Horace Elmer, United States Navy, and 
 the wife of Captain Albert Norton Wood of the same 
 service. These navy connections account for her 
 having lived at various times in Europe, Asia and 
 the West Indies, as well as on the Atlantic, Pacific 
 and laka coasts of the United States. 
 
 Mrs. Wood is a graduate of Smith College and 
 of the New York School of Social Work and holds 
 the degrees of Master of Arts and Doctor of 
 Philosophy (in Political Science) from Columbia 
 University. 
 
 She is the mother of four sons, one of whom, the 
 late Captain Thurston E. Wood, 12th Field Artillery, 
 was killed in action during the World War. 
 
BIOGRAPHICAL NOTES ON THE DEBATERS vii 
 
 She has always taken a keen interest in matters 
 of health pnd public welfare. While her husband 
 was stationed on the island, she founded the Anti- 
 Tuberculosis League of Porto Rico and was for a 
 number of years its president, during which time it 
 was awarded a special gold medal by the 1908 Inter- 
 national Congress on Tuberculosis for its achieve- 
 ments. 
 
 Mrs. Wood Jias been a contributor to various 
 magazines and is the author of a number of works 
 of fiction and travel, among which are The Spirit 
 of the Service, a navy story of the Spanish War 
 period, and An Oberland Chalet, a unique contribu- 
 tion to the out-of-door literature of Switzerland. She 
 has devoted increasing thought of recent years to 
 civic questions, and for several years past has cen- 
 tered her attention on the housing problem. An article 
 of Constructive Housing Legislation and its Lesson 
 for the United States, which appeared in The Journal 
 of the American Institute of Architects in February, 
 1918, struck a new note and attracted much attention. 
 Her book, The Housing of the Unskilled Wage Earner 
 (Macmillan, 1919), which The American Journal of 
 Sociology y s review hailed as "the first thoroughly 
 scientific discussion of the problem in the United 
 States/ ' has been widely accepted as an authority. 
 
 Frederick L. Ackerman 
 
 Graduate and Residence Fellow, College of Archi- 
 tecture, Cornell. Sigma Xi. Pupil of Duquesne, 
 
viii BIOGRAPHICAL NOTES ON THE DEBATERS 
 
 Paris. Sometime Lecturer in Architecture and 
 Theory of Planning, Cornell and Columbia. 
 
 Member of the State Board for the Registration 
 of Architects, New York State, 1916 to date. 
 
 Fellow of the American Institute of Architects. 
 
 Accredited representative of the American Insti- 
 tute of Architects and the Labor Division of the 
 Council of National Defense to England 1917. Pur- 
 pose of trip to investigate British War Housing 
 schemes. Eesult of investigation published in The 
 Journal of the American Institute of Architects, and 
 later issued in publication entitled What is a House? 
 
 Member of the Mayor's original Congestion Com- 
 mittee; Committee on City Planning of the City 
 Club, New York; Committee on City Planning, the 
 American Institute of Architects. 
 
 Author of The New Education of the Architect 
 (originally published in The Journal of the American 
 Institute of Architects), and a series of articles for 
 The Journal of the American Institute of Architects, 
 entitled Where Goes the City Planning Movement? 
 
 Contributor to various publications upon subjects 
 having to do with housing, town planning, archi- 
 tecture, etc. 
 
PREFACE 
 By John J. Murphy 
 
 The acutest manifestation of the social disorganiza- 
 tion due to the war which has yet appeared in America 
 is the housing shortage. No question of equal funda- 
 mental importance now confronts the public. The 
 depreciation of housing standards, subtly operating, 
 is diminishing the self-respect of thousands. The 
 lack of housing is forcing strongly to the front the 
 question "How far shall the state be called upon to 
 attempt to supplement the shortcomings of a faulty 
 social system." Many who have resented state in- 
 terference in individual life are assuming an atti- 
 tude of tolerance toward this manifestation of it. If 
 the problem is not solved otherwise, this sentiment 
 must grow, for people must have houses. 
 
 I am glad to have had the opportunity of present- 
 ing my views on this subject, because of its supreme 
 importance. I am glad that the discussion on the 
 other side has fallen into hands so competent to 
 present it. Mrs. Wood's knowledge of the subject 
 will not be disputed by any person familiar with 
 the present state of the housing problem. I rarely 
 differ with her facts. I only dispute her conclusions 
 as to the best method of attaining results. 
 
X PREFACE BY JOHN J. MURPHY 
 
 Mr. Ackerman's experience as a publicist in archi- 
 tectural matters is almost unrivaled among his pro- 
 fessional brethren in America. He has seen the 
 subject in all its ramifications at home and abroad, 
 and however strongly I am forced to deny that his 
 programme can have that immediate effect which the 
 crisis demands, I am compelled to recognize the 
 fundamental nature of his social diagnosis, and the 
 need for those profound evolutionary changes which 
 must occur before the housing supply of the world 
 can be set upon a satisfactory foundation which must 
 be based on the principle every family should own 
 its home. 
 
 As for the method of presentation which is here 
 employed, the written debate, it should be obvious 
 that it has a great advantage for the general public 
 over spoken debate or individual books written upon 
 specific aspects of the subject. The participants in the 
 debate have been at all times aware of the attitude 
 taken by their opponents, and have therefore been in 
 a better position to reply than where only one side 
 of the question is known. The person who wishes 
 seriously to study the problem is enabled by this 
 method to refer at any time to the objections urged 
 whenever he is not prepared to accept the proposition 
 as formulated. It should be possible, therefore, for 
 any intelligent reader to determine from a perusal 
 of the arguments contained herein which solution of 
 this great problem he wishes to accept. 
 
PREFACE 
 By Edith Elmer Wood 
 
 The housing problem presses. We all know that 
 we need more homes and better homes, but authori- 
 ties differ as to the means of getting them. 
 
 Joint debates help the public to decide between 
 the policies advocated. Written debates are better 
 than oral, not only because they reach a larger 
 audience, but because they permit greater accuracy. 
 
 It has been a rare privilege to defend my housing 
 faith against such able and fair minded opponents 
 as Mr. Ackerman and Mr. Murphy. I can only trust 
 that the strength of my cause will atone for the 
 weakness of its advocate. 
 
PREFACE 
 By Frederick L. Ackerman 
 
 There is no denying that by reason of our greater 
 technological knowledge and our vastly superior 
 industrial equipment, we stand in a position to pro- 
 duce more useful goods than any civilization that 
 has gone before us. And it is not to be denied that, 
 if we could bring our knowledge and our industrial 
 eqiupment to bear directly upon the production of 
 useful goods, we could produce a volume far in 
 excess of the reasonable needs of everyone. 
 
 Again, it is not to be denied that urban centers 
 are becoming more congested, slums are rapidly in- 
 creasing in area and density. Everywhere in the 
 western world the shortage of houses is assuming 
 no less than alarming proportions. The majority of 
 city dwellers live in tenements or in slums. We have 
 long since passed the line where there is a workable 
 relationship between the lower wage scales and the 
 rent or price of adequate houses. 
 
 In the face of these conditions, we are constantly 
 concerned with the problem of restricting output lest 
 we "over produce." These conditions bear witness 
 that something is operating against the application 
 
XIV PREFACE BY FREDERICK L. ACKERMAN 
 
 of our knowledge and the full use of our industrial 
 equipment and our natural resources. 
 
 Viewing this particular problem as but a sector 
 of that of freeing our knowledge and the use of 
 our industrial equipment and our natural resources 
 from that restraint which arises out of the working 
 of our competitive system considerations of profit 
 and price, I am forced to discard the theory of sub- 
 ventions. I seek to discover that which in one way 
 or another operates constantly to curtail the produc- 
 tion of useful and needed goods. 
 
 True enough, such an approach to this problem 
 runs somewhat outside the range of housing dis- 
 cussion. Eeformers do not ordinarily give thought 
 to such matters ; it is ever a case for doing something 
 not later than to-morrow. 
 
 Since I believe that a consideration of the problem 
 from this angle must serve as the point of departure 
 of any inquiry into what had best be done about it, 
 I welcome this opportunity to debate the question 
 with two such well known authorities as Mrs. Wood 
 and Mr. Murphy, who stand as acknowledged spokes- 
 men for certain fairly well formulated points of 
 view. 
 
FOREWORD 
 
 This debate was arranged by and held under the 
 auspices of the Press Debates Association. 
 
 Thesis of the Debate 
 
 Industry, commerce, agriculture, government, the 
 whole machinery of civilization, are not ends in 
 themselves, but means to the great human end the 
 creation and maintenance of a healthful, happy 
 home. The United States is short one million homes 
 to-day. It has millions of homes which are far below 
 standard and which ought to be scrapped, were it 
 not for the present famine. 
 
 WHAT ARE WE GOING TO DO ABOUT IT? 
 
 Topics of the Debate 
 
 Topic I Conditions Causes Remedies 
 Topic II Shall Public Credit Be Employed? 
 Topic III Shall We Have Municipal Housing? 
 Topic IV Shall We Exempt Mortgages and Im- 
 provements from Taxation? 
 xv 
 
XVi FOREWORD 
 
 Topic V How Shall We Deal With Congestion? 
 Topic VI How Can Land, Labor and Materials 
 
 Be Made Available? 
 Topic VII What Are the First Steps? 
 Topic VIII Summary and Conclusion. 
 
 Each debater speaks three times to each topic. 
 
TOPIC I 
 CONDITIONS CAUSES REMEDIES 
 
TOPIC I 
 FIRST ARGUMENT 
 
 By John J. Murphy 
 
 1. Housing Shortage due to Disorganization of 
 
 Building Industry during the war. Shortage 
 continued by Government's exempting its own 
 bonds, while heavily taxing money employed 
 in housing. I urge Government cease this 
 unfair competition for capital which handicaps 
 private enterprise in house building. 
 
 2. Mrs. Wood proposes to leave in the hands of the 
 
 Government the supply of " homes for lower- 
 paid wage earners' ' thus creating a new class 
 of state aided laborers. 
 
 3. Mr. Ackerman proposes a programme which if fea- 
 
 sible at all would require half a century for its 
 realization. 
 
 HOUSING SHORTAGE A WORLD PROBLEM 
 
 Within the recollection of men now living there 
 has been no such acute shortage of housing as is 
 now manifested. It has become a world problem. 
 The press of all civilized peoples bears testimony to 
 
 3 
 
4 * V { THE HOUSING FAMINE 
 
 the fact that people everywhere are unable to find 
 homes in cities. Rents are rising to famine prices; 
 hence social unrest is expressing itself in many forms. 
 Cities in Europe are warning newcomers to return 
 whence they came. In some German cities people 
 owning or occupying houses containing more rooms 
 than are needed for economical use by their families, 
 must take lodgers or groups of lodgers at rates fixed 
 by the Municipality. 
 
 RESTRICTING RACK-RENTS 
 
 In American cities the hitherto rare phenomenon 
 of two or even three families occupying rooms, 
 formerly the home of a single family, has become 
 frequent, if not common. Legislatures are heeding 
 the public clamor, and passing laws, constitutional 
 or unconstitutional, regulating rents and tenancies. 
 Men far-sighted enough to anticipate the shortage 
 and unscrupulous enough to take advantage of it, 
 have been acquiring fortunes by exacting rents out 
 of all proportion to the values of the properties 
 affected. 
 
 BUILDING MACHINERY DISORGANIZED 
 BY GOVERNMENT 
 
 Among the causes of the condition are the dis- 
 organization of the machinery of building by the 
 Federal Government during the war, in its efforts 
 to furnish the necessary supplies of men and muni- 
 tions for war purposes. No discrimination was 
 
CONDITIONS CAUSES REMEDIES 5 
 
 made in the draft in favor of mechanics employed 
 in the building trades; the government directly in- 
 structed the companies engaged in lending money 
 for building construction to cease such loans. Men 
 from rural districts were brought more or less un- 
 willingly in contact with the amenities of city life. 
 Many of them never returned to their home com- 
 munities, and others who did return brought their 
 families to the cities later, attracted by the nominally 
 high wages paid for ordinary labor, and the lure of 
 city life. 
 
 Whenever there are more families seeking homes 
 than there are accommodations to house them, even 
 though the surplus of home seekers be not great, 
 rents rise abnormally, landlords become indifferent 
 to the proper maintenance of their houses, and we 
 witness the anti-social spectacle of families under 
 pressure of necessity, bidding one another out of 
 their homes, with consequent creation of bad feeling 
 in the community, frequently resulting in disorder 
 and destruction of property. "All that a man hath 
 will he give for his life," and hence there is no 
 limit, except a man's earning power, to what he 
 will give for a home under pressure of necessity. 
 
 MORE HOUSES ONLY SOLUTION 
 
 The only remedy for the housing shortage is tha 
 construction of more houses. Houses are constructed 
 
6 THE HOUSING FAMINE 
 
 on land with material and by labor. In order to 
 fuse these elements into a house capital is necessary. 
 Capital flows into those investments where it is most 
 certain of security, and among investments equally 
 secure, it will seek that which promises the largest 
 return. Investment in houses seems to have inherent 
 attractions for a great number of people. Capital 
 can be induced to invest in enterprises promising 
 profit, but can rarely be coerced. In war times the 
 coercion of capital is sometimes urged as the corre- 
 lative of conscription of men, but no practical plan 
 has been devised, or at least has been tried, to 
 carry out this idea. It may therefore be assumed 
 that in time of peace no such plan is practicable. 
 
 GOVERNMENT SHOULD REMOVE OBSTACLES 
 
 Government should remove the obstacles that it 
 now places in the way of investment of private capital 
 in housing. In the last year the sum of one hundred 
 and sixty millions of dollars was invested in the con- 
 struction of dwellings in Greater New York and 
 more than a billion in all kinds of buildings in the 
 whole country. This would seem fairly conclusive 
 that there is available capital for the construction 
 of necessary housing, if conditions were made suffi- 
 ciently favorable. If Government, National, State and 
 Municipal, would now take off the brakes which 
 they put upon housing, the supply would be brought 
 quickly up to the level of effective demand. 
 
CONDITIONSCAUSES REMEDIES 
 
 HOW GOVERNMENT OBSTRUCTS 
 
 The things which tend to make housing costly 
 in normal times are the exclusion of foreign material 
 by tariffs, the Federal income tax on incomes derived 
 from mortgages, the State income tax on the same 
 subject, the real estate tax on buildings, the high 
 prices which have to be paid for loans in addition 
 to the normal interest for every one realizes the 
 Usury Law is evaded in those States where it exists 
 and the high price of land. When to all of these 
 difficulties is added the all-around high prices due 
 to the depreciated dollars of a highly inflated cur- 
 rency, the wonder is not that building is inadequate, 
 but that any building is done at all. The short way 
 to an adequate housing supply is the abolition of 
 these restrictions, so that money may flow normally 
 into housing investments, instead of being turned 
 aside to less necessary uses where larger profits are 
 forthcoming. 
 
 RESTRICTIVE LEGISLATION NEEDED TEMPORARILY 
 
 Restrictive legislation seems to be necessary tem- 
 porarily in order to allay social discontent, and, how- 
 ever undesirable in itself, to carry us over the peak 
 of the shortage which seems to be due next Pall. 
 But naturally, it will do nothing to increase supply, 
 and will operate more or less directly to prevent it. 
 Any Government action which restricts profits with- 
 out guaranteeing minimum returns must tend to 
 
8 THE HOUSING FAMINE 
 
 check investment in the class of property affected. 
 If we restrict with one hand, in recognition of the 
 necessities of a deplorable situation, we must en- 
 courage with the other, or the United States will 
 face a condition like that now confronting England, 
 where the Rent Restriction Act, which has been in 
 force since the beginning of the war, has totally 
 paralyzed private construction of buildings for rent- 
 ing purposes, and where the expected repeal of the 
 same Act now threatens to precipitate social revolu- 
 tion. 
 
CONDITIONS CAUSES REMEDIES 
 
 TOPIC I 
 
 FIRST ARGUMENT 
 
 By Edith Elmer Wood 
 
 1. Because good housing is necessary to health and 
 
 cannot be supplied at a profit to lower-paid 
 wage earners, I favor its supply, at cost, through 
 State Action. 
 
 2. Mr. Murphy's measures are inadequate, and relate 
 
 only to the present temporary shortage, 
 
 3. Mr. Ackerman's proposals are revolutionary. 
 
 THE HOUSING PROBLEM: ITS TWO PHASES 
 
 The rapid growth of cities during the last century 
 has brought to the United States, as to all other 
 industrial countries, an insistent problem how to 
 assure to its workers wholesome homes, accessible to 
 their work, at prices they can pay. It has been 
 estimated that there are two million 1 homes in the 
 United States so bad as to constitute an acute menace 
 to the health, morals and citizenship of those whom 
 they purport to shelter, while several million more 
 are below any standard we could possibly accept 
 as normal. 
 
10 THE HOUSING FAMINE 
 
 The cessation of building during the war, and 
 the high price of materials and of labor which have 
 checked its resumption since the war, have brought 
 about an actual shortage of houses, estimated at 
 one million, 2 which is seriously inconveniencing even 
 the well-to-do. This secondary problem, in its nature 
 transitory, may prove a blessing in disguise if it 
 jolts all classes of society into thinking in terms 
 of housing. 
 
 housing conditions: the submerged tenth 
 
 Windowless bedrooms, heavy with the odors of 
 under-bathed, overcrowded humanity, cellar homes 
 where babies dwindle and tubercle bacilli thrive, 
 suggest great cities. New York probably has half 
 a million people sleeping in rooms without windows 
 to the outer air in the old tenement houses built 
 before 1879, and a million and a half more in the 
 dumb-bell tenements built between 1879 and 1901 
 and in other old houses with utterly inadequate 
 ventilation. Boston has 132 streets less than 14 
 feet wide. One populous North End thoroughfare, 
 Webster Avenue, built up solidly with four-and-five- 
 story tenements, varies in width from four to nine 
 feet. Board Alley is only two feet wide. Philadel- 
 phia has 165 miles of unsewered streets and ap- 
 proximately 30,000 privy vaults. St. Louis has 
 nearly as many, and Baltimore probably more. But 
 smaller cities sometimes have even worse conditions, 
 for want of any restraining law. And dilapidation, 
 
CONDITIONS CAUSES REMEDIES 1 1 
 
 overcrowding, lack of sanitation, can lay their blight 
 even on a rural community. 
 
 CAUSES OF BAD HOUSING: GREED, IGNORANCE, 
 APATHY 
 
 As to causes, there have always been the greed 
 of landlords, the ignorance of tenants, and the 
 apathy of the general public. But they are seen 
 to be hardly more than aggravating causes when 
 compared with the real cause the economic impasse. 
 
 NO PROFIT IN BUILDING FOR UNSKILLED 
 WAGE EARNERS 
 
 No one builds houses for unskilled wage earners 
 as a business venture, because there is no profit in 
 it. There has been no profit in it for a very long 
 time. New houses are built for those in better cir- 
 cumstances and the unskilled worker only inherits 
 them when they have grown too shabby for any one 
 
 BUILDING COSTS IN 1916 
 
 In 1916 it was pointed out 3 that, taking the country 
 by and large, the most modest sort of a four- or 
 five-room house, or its equivalent city flat, could not 
 be built, and site provided, for less than $1800, 
 and such a place could not rent on the most moderate 
 economic basis of 5 or 6 per cent net (10 per cent 
 gross) for less than $15 a month. Now at that time, 
 
12 THE HOUSING FAMINE 
 
 according to government reports, more than half 
 the wage earners of the United States were receiving 
 less than $15 a week, and a week's wage for a 
 month's rent is the maximum a man can safely pay. 
 
 BUILDING COSTS IN 1920 
 
 These figures are obsolete to-day. Wages and 
 building costs have gone up from 50 to 100 per cent. 
 But the relationship between them remains the same. 
 The bulk of workers still cannot pay an economic 
 rent on a new house. Therefore, since old houses 
 will not last forever (and many of them ought not 
 to be allowed to last at all), and as shelter is a 
 necessity, we must find a remedy. 
 
 he remedy: supply of houses at cost 
 as a public utility 
 
 The remedy lies in State action using the word 
 " state' ' in the broad sense of the "body politic." 
 Houses for unskilled wage earners must be supplied 
 at cost as a public utility. This may be done directly 
 or indirectly. The indirect system is the supplying 
 of credit from a public source. The direct system 
 involves the building of houses by a public authority. 
 "We shall describe both methods more fully here- 
 after. Both, by the way, are recommended by the 
 Housing Committee of the Eeconstruction Commis- 
 sion in the report recently transmitted to the legis- 
 lature of New York with a strong endorsement by 
 Governor Smith. 
 
CONDITIONS CAUSES REMEDIES 13 
 
 These methods of handling the housing problem 
 are not new. They have been extensively used in 
 Great Britain, Germany and Belgium for more than 
 a generation. Twelve other European countries, 
 three of South America, besides Cuba, Australia, 
 New Zealand, and, very recently, Canada, have re- 
 sorted to them in varying degree. 4 We are fortunate 
 in having spread before us so large a body of ex- 
 perience. 
 
 1 See Author's Housing of the Unskilled Wage Earner, p. 7. 
 
 1 See Housing Betterment, December, 1919, p. 45. 
 
 * By John Nolen in Proceedings of the National Housing Assoc., 
 Vol. V., p. 5. 
 
 4 See Bulletin 158, U. S. Bureau of Labor Statistics: Govern- 
 ment Aid to Home Owning and Housing of Working People in 
 Foreign Countries. See also Housing of the Unskilled Wage 
 Earner, Chapter V. 
 
14 THE HOUSING FAMINE 
 
 TOPIC I , 
 FIRST ARGUMENT 
 
 By Frederick L. Ackerman 
 
 1. Housing famine, congestion, slums drift of 
 
 population into cities consequent upon modern 
 industrial system. Relief to be found in elim- 
 inating waste, losses, sabotage which follows 
 system of price competition. 
 
 2. Mrs. Wood completely ignores this phase of the 
 
 problem. Proposes to subsidize system which 
 has caused the trouble. 
 
 3. Mr. Murphy deals superficially with causes. Pro- 
 
 poses a variety of palliatives. 
 
 SYMPTOMS ARE NOW ACUTE: NOT THE RESULT OF WAR 
 
 Nowhere in the entire Western World are houses 
 being erected in sufficient number. Voluntary com- 
 mittees, official committees, governmental commis- 
 sions are surveying conditions, reporting, framing 
 legislation. Thus far all this talk about it has not 
 produced houses; we are faced with the stubborn 
 fact that sufficient houses are not being built. 
 
CONDITIONS CAUSES REMEDIES 15 
 
 This distressing condition is set down as the result 
 of the war. We have short memories. For genera- 
 tions Europe has been struggling with the problem 
 of slums, shortage and congestion the housing 
 problem. How seriously this matter was treated 
 in the pre-war days may be gathered from a study 
 of pre-war housing legislation. 5 By gathering this 
 material together, we are able to make note of cer- 
 tain physical conditions which are characteristic of 
 what has taken shape within the Western World 
 during, say, the last century and a half. These 
 conditions are best referred to as drifts or tendencies. 
 Among them we note in particular: 
 
 The remarkably rapid rise and expansion of in- 
 dustrial centers ; a corresponding (relative) decrease 
 of rural population and of small communities. 
 
 The rapid increase in congestion and the degree 
 of congestion within these ever expanding indus- 
 trial urban centers; the rapid and constant spread 
 of the "slum." 6 
 
 That the number of new houses erected is falling 
 behind the number required. 
 
 INDUSTRIAL SYSTEM UNDER SUSPICION 
 
 The drift into these conditions of mal-adjustment 
 has taken place within a given area (State) in ap- 
 proximately the same degree that the area in ques- 
 tion has fallen into the ways of carrying on its 
 production through the system spoken of as the 
 "Modern Industrial System.' * 
 
16 THE HOUSING FAMINE 
 
 This statement implies a condition of causal 
 sequence between the working of the modern indus- 
 trial system and the conditions of mal-adjustment. 
 To attempt to establish such a relation of cause and 
 effect in a quantitative sense would extend the argu- 
 ment beyond the scope of this discussion, but this 
 much may be said: "The material frame work of 
 modern civilization is the industrial system, and the 
 directing force which animates this frame work is 
 business enterprise. To a greater extent than any 
 other known phase of culture, Modern Christendom 
 takes its complexion from its economic organization. 
 This economic organization is the "Capitalistic Sys- 
 tem' ' or the "Modern Industrial System,' ' so called. 
 Its characteristic features, and at the same time the 
 forces by which it dominates modern culture, are 
 the machine process and investment for profit. 7 
 
 Accepting this as a statement of fact, it follows, 
 of course, that the entire range of conditions from 
 abandoned farms to slums and shortage, is the result 
 of the unhampered working of this modern indus- 
 trial system. 
 
 THE SYSTEM EXEKCISES SABOTAGE 
 
 Production is now controlled by "business enter- 
 prise." Business enterprise aims at producing the 
 largest possible returns in the shortest possible time ; 
 and always in terms of price* The capitalization of 
 business concerns is based upon their capacity to 
 produce earnings and not upon their capacity to 
 
CONDITIONS CAUSES REMEDIES 17 
 
 produce goods. The solvency of business enterprise 
 depends upon the ability of its management to main- 
 tain or advance prices. This is the system of " price 
 competition ' ' or competition in terms of price. From 
 this system there would follow, in theory, and there 
 follows in practice, a series of wastes, duplications, 
 cancellations of effort, obstructions of one sort and 
 another which may be rated as equal, if not much 
 larger in amount, than is the effort required to carry 
 on the processes (technological) of producing goods. 
 To allow the industrial processes to run on without 
 obstruction would end in the lowering of prices: 
 hence modern business enterprise functions "success- 
 fully' ' only when it exercises such a control over 
 production as to keep prices up and production 
 down. 7 
 
 THE SYSTEM FOUND GUILTY 
 
 It is through such a system that we attempt to 
 produce all of the materials which go into the build- 
 ing of habitations for the wage worker. What this 
 system acomplishes is to reduce the size of houses, 
 curtail the number erected, and squeeze them closer 
 together. 
 
 Business is a matter of investment for a profit 
 a speculative adventure. Habitations are built 
 simply to afford a means of carrying on a specula- 
 tive adventure. Whether or not habitations are 
 erected depends entirely upon whether or not there 
 are other fields of speculative adventure which seem 
 more promising. 
 
18 THE HOUSING FAMINE 
 
 IT SUCKS PEOPLE INTO CONGESTED CITIES 
 
 The principal causes which make for the constant 
 flow of population from farm to city is the greater 
 opportunity of investment return afforded by busi- 
 ness for profit controlling production carried on by 
 the machine process. Hence the remedy here offered 
 is confined to the economic industrial facts of modern 
 life. 
 
 THE SOLUTION: GET A NEW INDUSTKIAL 
 SYSTEM 
 
 The solution of the housing problem is to be had 
 as a consequence of having first brought about a 
 change in our industrial system and the financial 
 business system which controls the industrial system. 
 In general outlines the nature of the changes may 
 be summarized as follows: 
 
 Freeing the processes of production from that con- 
 trol which views production as a medium of specula- 
 tion or investment for profit. Freeing land from 
 speculative use. 
 
 Eliminating waste and useless effort which follows 
 our system of price competition. 
 
 5 See The Case for Town Planning, by Henry Aldridge. The 
 National Housing and Town Planning Council. London. See 
 also Housing of the Unskilled Wage Earners, by Edith Elmer 
 Wood. 
 
 6 See The Town Laborer, 1760-1882, by J. L. Hammond and 
 Barbara Hammond. Longmans, Green & Co., London. 
 
 7 See The Theory of Business Enterprise, by Thorstein Veblen. 
 Scribners. 
 
CONDITIONS CAUSESREMEDIES 19 
 
 TOPIC I 
 SECOND ARGUMENT 
 
 By John J. Murphy 
 
 GUESSES MASQUERADING AS ESTIMATES 
 
 Naturally I find little to criticise in Mrs. Wood's 
 statement of the housing conditions which we have 
 met to discuss. I do not attach much importance 
 to the vague guesses, masquerading as estimates, of 
 the total number of unsanitary houses existing in 
 the United States, to which she lends the weight of 
 her authority. It is a strange coincidence that the 
 same number of houses given as the shortage in the 
 United States is also given by the authorities for 
 Great Britain, a country with about half our popu- 
 lation. 
 
 some problem! 
 
 If there are two million existing unsanitary houses 
 which should be replaced by better structure, and 
 a deficiency of one million, we have clearly a situa- 
 tion which may be properly called some problem! 
 As such houses can not be produced to-day much 
 under $3,500 to $5,000 according to location, we are 
 
20 THE HOUSING FAMINE 
 
 dealing with a problem involving a capital expendi- 
 ture of ten to fifteen billion dollars, a sum large 
 enough to interest even war financiers. 
 
 LANDLORDS AND TENANTS ARE JUST FOLKS 
 
 I tak strong exception to two items of Mrs. 
 Wood's summary of causes of bad housing: landlord 
 greed and tenant ignorance. Landlords, in spite of 
 some recent exhibitions in New York and other big 
 cities, are just people. Just now they own a neces- 
 sary of life which is cornered. If Mrs. Wood will 
 indicate some group in the nation, who own property, 
 that have taken less than they could get for it, I 
 will concede that landlords are worse than other 
 people. As to tenant ignorance, I know of no class 
 of people who do not take the best housing they 
 can get for what they can afford to spend. Had 
 tenants been as wise as Solomon, I do not see how 
 they could improve their lot as individuals. I con- 
 cede her indictment of public apathy, and the 
 "economic impasse" ; this last count in the indictment 
 sounds grave enough to account for anything. May 
 I suggest to my opponent an explanatory foot note, 
 which will elucidate a contention now obscured by 
 an impervious mask. 
 
 HOUSES FOR WAGE EARNERS NOT UNPROFITABLE 
 
 I dispute Mrs. Wood's contention that it does not 
 pay to build houses for earners of low wages. Liter- 
 ally thousands of cheap houses have been constructed 
 
CONDITIONS CAUSES REMEDIES 21 
 
 around our big cities in the past decade. It would 
 be as true to say that it did not pay to manufacture 
 clothes or shoes for poor people. Of course, it does not 
 pay to produce anything for people whose wages are 
 so low as not to reach the subsistence level, but the 
 remedy for that situation is to raise the wages, not 
 to lower the rent. I contend, however, that if gov- 
 ernment removed the crushing taxes which it now 
 imposes on new buildings, a sufficient supply would 
 be forthcoming to house workers at current wages. 
 
 THE IMPRACTICABILITY OP MAKING HOUSING 
 A PUBLIC UTILITY 
 
 The remedy, as Mrs. Wood sees it, is to make the 
 supply of housing a public utility, either by lending 
 to intending builders, or by direct public construc- 
 tion. And she asserts that the Reconstruction Com- 
 mission of the State of New York recommends such 
 action. Also, that we have a varied assortment of 
 experiences of other countries in similar lines. Much 
 of the rest of this debate is to be devoted to dealing 
 with these matters in detail, but I assert that it 
 would be most unwise, if feasible, and that because 
 of obvious constitutional limitations it cannot be 
 made feasible, until the passage of so much time, 
 that necessity will compel us to meet the situation 
 some other way in the meantime. When Alexander 
 cut the Gordian knot he did not solve the problem, 
 he merely gave an evidence of his impatience and 
 superficiality. The authority of the Reconstruction 
 
22 THE HOUSING FAMINE 
 
 Commission, for whose good intentions I have a high 
 regard, would have greater weight if it had accom- 
 plished something in the year and a half of its 
 existence. 
 
 NOT TIME TO CONSTRUCT UTOPIA 
 
 I leave to the intelligent reader Mr. Ackerman's 
 statement that the housing famine is not the result 
 of the war, so far as America is concerned. Europe 
 had many problems before the war; inadequate 
 housing was one of them, but the causes there were 
 so multitudinous that I fear we should never get 
 down to our own domestic problem if we tried to 
 deal with them. He indicts our industrial system, 
 and I hold no brief for it, but if we have to wait 
 for more housing until it is broken down, the debris 
 removed and a new social order set up in its place, 
 there will be no people to build houses or inhabit 
 them. Like a business house which wishes to enlarge 
 its premises, while still holding its trade, we have 
 to replace our social institutions a piece at a time. 
 Of course, the other way would be easier if we 
 could all agree on a design and a floor plan for the 
 building, but when the new structure was agreed 
 upon, there would be no customers. It might even 
 not get erected at all. 
 
CONDITIONS CAUSES REMEDIES 23 
 
 TOPIC I 
 SECOND ARGUMENT 
 
 By Edith Elmer Wood 
 
 let us get the question clear 
 
 First of all, I must ask my eminent opponent, 
 former Commissioner Murphy, whether the remedies 
 he proposes are intended to cure the present short- 
 age of all kinds of houses, or the permanent shortage 
 of acceptable houses for workingmen? Unless we 
 keep the distinction clear we shall find ourselves 
 talking at cross purposes. 
 
 INDIVIDUALISM AND BUSINESS INITIATIVE 
 
 Mr. Murphy appears in this debate as the cham- 
 pion of individualism and business initiative. He 
 will find many to agree with him, for old beliefs 
 die hard. But the trend of modern thought and 
 practice is certainly away from Adam Smith and 
 laissez faire. 
 
 OBSTACLES PLACED BY GOVERNMENT IN THE WAY 
 OF BUILDING j 
 
 Mr. Murphy says: "Government should remove 
 the obstacles that it now places in the way of invest- 
 
24 THE HOUSING FAMINE 
 
 ment of private capital in housing,' * and again: 
 "Government, national, state and municipal, must 
 take off the brakes.' ' He enumerates these brakes 
 or obstacles as follows: 
 
 1. Tariff on building materials 
 
 2. Tax on mortgages 
 
 3. Real estate tax on buildings 
 
 4. "The high prices which have to be paid for 
 
 loans in addition to normal interest" i.e. 
 usury 
 
 5. The high price of land 
 
 6. "All around high prices due to depreciated 
 
 dollar of inflated currency' ' 
 
 For the first brake, if we are to remove it at all, 
 I would suggest as an amendment, the exemption 
 of building materials destined for working men's 
 houses, as is actually done in Argentina and Brazil. 
 The second and third are to be the subject of later 
 discussion. 
 
 By no stretch of the imagination, it appears to 
 me, can the last three be described as obstacles or 
 brakes placed by goverment in the way of building. 
 I challenge the Commissioner to show that they are 
 such, and to name the measures he advocates for 
 removing them. 
 
 GET A NEW INDTJSTBIAL SYSTEM 
 
 There is no athletic sport more unsatisfactory than 
 wrestling with shadows. The blamed things are so 
 hard to get a grip on! 
 
CONDITIONS CAUSESREMEDIES 25 
 
 I am a practical person, in search of a practical 
 remedy, for a very practical evil and my dis- 
 tinguished friend, Mr. Ackerman, tells me to "Get 
 a new industrial system !" Just like that. Appar- 
 ently, too, he objects to alleviating housing evils 
 in the meantime, lest a more tolerable condition 
 delay the advent of his millennium. 
 
 BY EVOLUTION OR REVOLUTION? 
 
 Does he mean us to get a new industrial system 
 by evolution or by revolution? If the former, how 
 can he defend the inhumanity of his opposition to 
 alleviative measures? It is like refusing quinine 
 to a malaria patient shaking with ague, because you 
 hope to drain the swamps ultimately and exterminate 
 the malaria-bearing mosquito. 
 
 If he is advising revolution. . . . Well, well wait 
 till he says so. 
 
 WHAT WILL THE NEW SYSTEM BE? 
 
 Mr. Ackerman says himself that "The material 
 framework of modern civilization is the industrial 
 system. ' ' Now, it is a rather serious matter destroy- 
 ing the framework of modern civilization. Mr. 
 Ackerman can hardly expect us to accept his leader- 
 ship to that cataclysmic extent without even con- 
 fiding to us what he proposes to substitute. Is it 
 Communism? Syndicalism? The soviet? State 
 socialism? Or the proposed English revival of the 
 medieval guild? 
 
26 THE HOUSING FAMINE 
 
 TOPIC I 
 
 SECOND ARGUMENT 
 
 By Frederick L. Ackerman 
 
 CAUSES THE ALL IMPORTANT MATTER 
 
 Not much is to be gained by debating the state- 
 ments relating to " Conditions. ' ' One matter only- 
 will I refer to in this connection. Mr. Murphy- 
 ignores the sweep of population into industrial 
 centers which has been going on throughout the 
 Western World during a century and a half. This 
 sweep, I insist, is the " Condition " ; congestion, the 
 slum, the housing famine are the physical evidences. 
 
 Nor will "Bemedies" be dealt with at this stage 
 of the discussion since opportunities will be afforded 
 for considering this phase of the subject under the 
 several topics as they are opened up in the series 
 to follow. What is of importance to now consider 
 is: Why the "Condition"? Why this discussion? 
 
 TOO MUCH STRESS ON WAR 
 
 Mrs. Wood is quite definite : she sets down three 
 principal causes: "the greed of landlords, the 
 
CONDITIONS CAUSES REMEDIES 27 
 
 ignorance of tenants, and the apathy of the general 
 public.' ' Mr. Murphy stresses the war and the 
 accompanying Federal administrative action as the 
 cause. Of course the war affected the situation. 
 But what about the condition before the war? 
 
 The conditions noted by Mrs. Wood, as con- 
 stiuting the three principal causes, should be viewed 
 as in the nature of attitudes favorable if you like 
 to the development of the conditions rather than 
 as causes. But I will not quibble over the meaning 
 of words. 
 
 OLD LAWS AND NEW CONDITIONS 
 
 In the eighteenth century before the days of 
 machine industry, corporation finance, big business 
 and the world market during the days of handicraft 
 industry and petty trade certain live and let 
 live ideas were thrown into formal shape and 
 adopted to govern the system of law and order under 
 which the people of that time saw fit to live. That 
 system of law and custom has stood firm while 
 sweeping changes have taken place in the field of 
 industry and finance. Laws, framed to uphold the 
 rights (property) of individuals are now called upon 
 to uphold the same with respect to large scale in- 
 dustry, large scale credit, large scale business all 
 of which of course could not have been contemplated 
 at the time they were formulated. 8 
 
 The laws which were then established to safeguard 
 equality among men in all their economic relations 
 
28 THE HOUSING FAMINE 
 
 have come to so operate, under the changed condi- 
 tions, that the decisions as to how men shall live are 
 now made by those holding the communities ' 
 economic power. 
 
 THE RIGHT TO SATISFY GREED 
 
 So I would not set down the " ignorance of 
 tenants" nor the u apathy of the general public' ' 
 as the cause of congestion, slums and the distressing 
 shortage of houses. The tenants and the general 
 public are helpless to act against the powerful finan- 
 cial forces sustained by those eighteenth century 
 laws framed to meet conditions under the rule of 
 petty trade and handicraft industry. The tenant 
 and the public may be ever so alive to the conditions 
 but being alive is of little consequence : action in 
 the direction of their interest and desires is a matter 
 to be determined not by considerations relating to 
 what may be good for them, but by the financial 
 exigencies of the situation as viewed by those holding 
 the balance of economic power. The rights of in- 
 dividuals have become as little fluttering leaves in the 
 powerful gusts of financial forces. 
 
 THE MAJOR QUESTION ASKED 
 
 The question as to what has caused the housing 
 famine, slums, etc., is not to be disposed of by saying 
 that it is because landlords have become greedy, 
 tenants ignorant and the public apathetic. Greed 
 may be set down as a cause; but the right to satisfy 
 
CONDITIONS CAUSESREMEDIES 29 
 
 greed is a legal matter a matter which can be 
 changed by political action if the people should so 
 elect. So I ask the question: How about disallowing 
 by legal action this legal right to satisfy greed? 
 
 8 See The Vested Interests and the State of the Industrial Arts, 
 by Thorstein Veblen. B. W. Huebsch. 
 
30 THE HOUSING FAMINE 
 
 TOPIC I 
 THIRD ARGUMENT 
 
 By John J. Murphy 
 
 NO DISCRIMINATION BETWEEN TYPES OF DWELLINGS 
 
 In reply to Mrs. Wood: 
 
 I want to cure the shortage of houses of all kinds. 
 As a matter of fact, the present housing shortage 
 has hit people of moderate means harder than the 
 very poor. Kents have risen more, proportionally, in 
 the more expensive types of housing than in the 
 cheaper grades. Business building must keep up if 
 people in cities are to find employment. Therefore, 
 I suggested no discrimination between types of build- 
 ings, though I would accept the idea, if it could 
 be done constitutionally. There are many states in 
 which it can not be done, without amendments. 
 
 GOVERNMENT MEDDLING PROVOKES 
 INEVITABLE DISASTER 
 
 I quite agree with Mrs. Wood that the trend of 
 modern thought is away from Adam Smith and 
 laissez-faire. To the extent that the swing away 
 from those ideas continues, to the same extent do 
 
CONDITIONS CAUSESREMEDIES 31 
 
 we approach the catastrophe which many thoughtful 
 persons now deem inevitable. The condition to 
 which the world has come as a consequence of 
 "modern thought' ' is so complete an indictment of 
 that pseudo-philosophy, that I would not have 
 deemed that a person of Mrs. Wood's acumen would 
 have advanced it as an argument on her side. 
 
 HOW GOVERNMENT CAN HELP 
 
 Mrs. Wood asks me to explain how the Govern- 
 ment can reduce prices of money, land and goods. 
 The attempt of the Government to suppress usury, 
 makes actual cost of money higher to the individual, 
 therefore the so-called usury law should be repealed. 
 The failure of Government to collect out of land 
 values the full price of services rendered, makes land 
 much dearer than there is any reason it should be. 
 The wasteful method of financing the war has more 
 than doubled our currency, while the taxation of 
 production has been raising prices in other direc- 
 tions. If the State will tax special privileges, among 
 which are land titles, mines, franchises, and exempt 
 productive enterprises, it will bring prices of hous- 
 ing materials down to reasonable figures, and all 
 other prices as well. 
 
 In reply to Mr. Ackerman: 
 
 BLAMING THE THERMOMETER FOR HOT WEATHER 
 
 It is not easy to combat so indefinable a proposi- 
 tion as that which bases our housing difficulties on 
 
32 THE HOUSING FAMINE 
 
 the " right to satisfy greed.' ' With rare excep- 
 tions, the conduct of mankind is based on the desire 
 to get as much as possible for what we have to sell, 
 and to give as little as possible for what we must 
 buy. Landlords would always take 1000% profit if 
 they could get it, and tenants would occupy houses 
 for nothing if they could. So far as these char- 
 acteristics of individuals go they are always and 
 ever the same. Blaming the landlord for high rent 
 is like throwing the thermometer out of the window 
 on a hot day. He gets what he can and does not 
 get any more because he can't. Price is regulated 
 by the relation of supply and demand. Greed is 
 merely an invidious way of referring to an excessive 
 development of that self-interest which our modern 
 civilization necessitates as a requisite of living. 
 
CONDITIONS CAUSES REMEDIES 33 
 
 TOPIC I 
 THIRD ARGUMENT 
 
 By Edith Elmer Wood 
 
 u vague guesses masquerading as estimates " * 
 
 Mr. Murphy appears to doubt that we are short 
 a million dwellings in the United States. The 
 estimate is based on the following figures: Prom 
 1910 to the beginning of 1917 approximately 400,000 
 new dwellings were constructed annually in this 
 country. Had the normal building rate been main- 
 tained, about 1,200,000 more dwellings would, there- 
 fore, have been built by the beginning of 1920. The 
 actual number was 228,000. 10 
 
 The British housing shortage, due to their longer 
 immersion in the war, is much more acute than ours. 
 Hence the subsidies. 
 
 i 
 
 MR. MURPHY COMES TO THE RESCUB 
 OF LANDLORDS AND TENANTS 
 
 I agree with Mr. Murphy that landlords are no 
 " worse than other people' ' and that any other prop- 
 erty-owning group would have taken the same 
 advantage of having cornered "a necessary of life." 
 
34 THE HOUSING FAMINE 
 
 I will further say that if those who do not own 
 property were endowed with it, they would behave 
 in the same manner. The inference I draw from 
 all this is, however, that the state must break that 
 corner in a necessary of life by entering the field 
 itself, if it would avoid the more revolutionary 
 remedies of Mr. Ackerman. 
 
 "Had tenants been as wise as Solomon,' ' says Mr. 
 Murphy, "I do not see how they could improve their 
 lots as individuals.' ' Neither do I. That is why 
 collective action is necessary. 
 
 WHY NOT RAISE WAGES FOR A CHANGE? 
 
 Raising wages is a popular pastime. But how will 
 Mr. Murphy raise them without raising building 
 costs, in which they are so large an item? And how 
 will he prevent those who have cornered a necessary 
 of life from raising rents to match? 
 
 9 The evidence on which I based my estimate of two million 
 unsanitary dwellings in the United States (sheltering one-tenth 
 of our population) will be found in Chapters I and II of Housing 
 of the Unskilled Wage Earner. It is too long to quote here. 
 
 10 The following figures are from an article by Wharton Clay 
 in Engineering and Contracting for March 24, 1920: 
 
 Dwellings in the United States 
 
 1910 17,895,845 
 
 1915 19,853,517 
 
 1916 20,263,051 
 
 1917 20,672,051 
 
 1918 20,808,562 
 
 1919 20,829,039 
 
 1920 20,900,000 
 
CONDITIONS CAUSES REMEDIES 35 
 
 TOPIC I 
 THIRD ARGUMENT 
 
 By Frederick L. Ackerman 
 
 WHAT IS INDUSTRY FOR? 
 
 I ask Mr. Murphy to recall the statement which 
 is made the thesis of debate which says "indus- 
 try, commerce, agriculture, government . . . are not 
 ends in themselves but means to the great human 
 end, the creation and maintenance of healthful, 
 happy homes." Had this debate been confined to 
 finding the best way "to provide housing of some 
 kind I will not say whether good or bad" I would 
 not have wasted my time to discuss the matter. I 
 insist that I am discussing the thesis and that my 
 argument is well within the range of discussion 
 anticipated in the statement of the thesis. 
 
 WHY NOT TRY TO GET A GRIP ON THINGS? 
 
 I agree with Mrs. Wood that "the blamed things 
 are so hard to get a grip on," yet I am not at all 
 convinced that the remedies suggested by Mrs. "Wood 
 are in the nature of getting a "grip on things." 
 She avoids coming to grips with the real problem. 
 
36 THE HOUSING FAMINE 
 
 Again the old theme of the industrial revolution 
 crops up. Again I admit the necessity for change, 
 but I see no reason for calling it a revolution. A 
 study of the present British situation indicates 
 clearly that the system of subventions is not pros- 
 pering in England. Proposals are now on foot 
 for organizing the whole British building industry 
 with a view of eliminating all of those wastes, which 
 I have referred to repeatedly, by scrapping the sys- 
 tem of price competition. It is too early to draw 
 conclusions, but I would suggest a careful study of 
 what is now being developed in this connection. 
 
 This recent British effort is moving in the right 
 direction, which can not be said of Mrs. Wood's 
 argument. Perhaps it is revolutionary to advance 
 the idea that exploitation should be dispensed with. 
 But saying so proves nothing. 
 
TOPIC II 
 SHALL PUBLIO CREDIT BE EMPLOYED? 
 
TOPIC II 
 FIRST ARGUMENT 
 
 By John J. Murphy 
 
 1. I oppose the use of public credit on the ground 
 
 that it is unnecessary, if Government will cease 
 penalizing private building enterprise by exces- 
 sive taxation. 
 
 2. Mrs. Wood's plan assumes that a vast mass of 
 
 people are unable to support themselves without 
 government subsidy. 
 
 3. Mr. Ackerman objects because it would only serve 
 
 to bolster up a defective social system. 
 
 USE OF PUBLIC CREDIT ONLY A LAST RESORT 
 
 Having due regard to the wasteful manner in which 
 public money is usually expended, I think it will be 
 generally conceded that public credit should not be 
 embarked in any except obviously public enterprises, 
 unless all other means have been tried and found 
 wanting. In the preceding statement I have shown 
 that in spite of governmental discouragement an 
 enormous amount of capital is willing to invest in 
 building of one kind or another. The difficulty of 
 
 39 
 
40 THE HOUSING FAMINE 
 
 obtaining money for housing loans is not that lenders 
 are unwilling to put money into buildings, but that 
 they are unwilling to advan^ as high a percentage 
 of the cost of the building as they did hitherto. 
 
 FEAR OF LOSS DUE TO PRICE CONTRACTION 
 
 The reason is that they fear that within a year or 
 two there will be such a drop in the cost of materials 
 and labor, that a building erected under present 
 conditions will suffer a depreciation of 20% in a 
 couple of years, for the value of a thing at any given 
 time is generally what it can be reproduced for at 
 that time. No one can deny that this is a reasonable 
 forecast. It may not happen, but people who invest 
 in such durable things as buildings must take into 
 account the probabilities for at least a decade. 
 
 DANGER IN MIXING REAL ESTATE AND POLITICS 
 
 If public credit be employed, it follows that Gov- 
 ernment must take a large part in supervising and 
 determining the locations, designs, units, etc., of the 
 houses into which money so raised should be put. 
 Here however, another difficulty arises. It brings 
 the Government, or whatever branch of it may be 
 charged with such duty, into contact with the real 
 estate business and the combination of politics and 
 real estate makes the most explosive compound 
 known. In the war it was necessary to procure 
 sites in a hurry, and it is to be presumed that men 
 engaged in such work did their duty patriotically, 
 
SHALL PUBLIC CREDIT BE EMPLOYED? 41 
 
 but it is commonly believed that a fair investigation 
 of the real estate transactions of the Government 
 would throw into the shade most of the other exposes 
 which have been made since the armistice. 
 
 WOULD SCARE OFF PRIVATE INVESTORS 
 
 If public credit be employed, it would naturally 
 tend to absorb a large amount of the private capital 
 which would be available for housing. There are 
 some people who, because they do not see the prob- 
 lem through, do not realize that the Government has 
 no money of its own to put into construction enter- 
 prises. It may go into the market like any other 
 borrower and pledge its credit for the return of 
 money lent, but whether the State or the individual 
 borrows, it is private capital which is borrowed, and 
 to the extent of the borrowing the capital fund is 
 reduced. It is urged that the State can borrow more 
 cheaply than private individuals, which is true, but 
 that is an added reason why the entry of the State 
 into the housing field would drive out private ven- 
 tures in the same field. 
 
 STATE CANNOT BUILD ECONOMICALLY 
 
 Even though the State cannot build as cheaply as 
 the individual, it can determine its own method of 
 book-keeping, and it can go on indefinitely making 
 bad investments without going to the wall, as the 
 unsuccessful private investor must do under the 
 same circumstances. If the State should drive the 
 private investor out of the field, the amount of 
 
42 THE HOUSING FAMINE 
 
 its borrowing to provide adequate housing, would be 
 stupendous. New York City investors alone, before 
 the war, invested $75,000,000 annually in tenement 
 house and apartment house construction. This sum 
 did not include the cost of sites. For the whole 
 country at present prices, $2,000,000,000 to $3,000,- 
 000,000 would be necessary as a beginning, according 
 to the size of the programme mapped out, and nearly 
 $1,000,000,000 annually. 
 
 CONSTITUTIONAL OBSTACLES TO PROMPT ACTION 
 
 Another serious consideration is the delay attend- 
 ant upon getting relief from such a source. In most 
 states the legislature would have to pass a resolution 
 authorizing the sale of bonds, and this resolution 
 would have to be submitted to the people of the 
 state at the following election. Assuming the favor- 
 able action of the people, which is not at all certain, 
 for it would have to be submitted in rural districts, 
 where there is no lack of housing, the legality of the 
 issue of bonds (the interest on which has to be 
 provided out of taxation), would have to be litigated, 
 before any one would buy them, for the Supreme 
 Court of the United States has decided that a citi- 
 zen's property can only be taken by taxation for 
 what is recognized as a public use. The providing 
 of houses for normal, solvent citizens has never been 
 declared a public use. There are other points of 
 view from which the use of public credit is unde- 
 sirable, but space does not allow their being set 
 forth here. 
 
SHALL PUBLIC CREDIT BE EMPLOYED? 43 
 
 TOPIC II 
 FIRST ARGUMENT 
 
 By Edith Elmer Wood 
 
 1. I favor federal and state housing loans, at a low 
 
 rate of interest, to individual workingmen and 
 non-commercial housing companies. 
 
 2. Mr. Murphy's objections are beside the mark. 
 S. Mr. Ackerman objects because it would postpone 
 
 his industrial revolution. 
 
 TWO FORMS OF HOUSING LOANS TO INDIVIDUAL WAGE 
 EARNERS AND TO LIMITED DIVIDEND COMPANIES 
 
 The employment of public credit in housing is 
 what we have defined as the indirect method of state 
 action. It may involve loans to individual workmen 
 to build their own homes, as in Belgium and New 
 Zealand, or loans to non-commercial housing com- 
 panies, as in Great Britain and Germany. We must 
 have both kinds. 
 
 WORKINGMAN's NEED OF LONG TIME LOANS AND 
 LOW INTEREST RATE 
 
 All governments approve of home ownership. 
 Nearly all except ours take practical steps to en- 
 courage it. It is a commonplace of political science! 
 
44 THE HOUSING FAMINE 
 
 that those who own their own homes make better 
 citizens than those who do not, because they have 
 more at stake in the community. Bolsheviki are 
 recruited from renters. 
 
 The American workingman, far from having pref- 
 erential treatment to encourage him in acquiring a 
 home, is at a serious disadvantage. Large and respon- 
 sible purveyors of credit do not care to be bothered 
 with him. He runs great danger of falling into the 
 hands of the usurer and the land shark. Home owner- 
 ship is difficult enough for him at best and he ought, 
 for the public good as well as his own, to be assured 
 the lowest possible rate of interest, a long time for 
 the repayment of his loan, and complete protection 
 from fraud or exploitation. These desiderata can 
 only be had under government auspices, since they 
 involve the elimination of profit from the lending 
 transaction. 
 
 The best source of credit for the American work- 
 ingman at the present time is the Building and Loan 
 Association, but even there he must pay 6 per cent 
 interest, and his principal must be repaid in 200 
 monthly installments (shortened to about 12 years 
 by the accumulation of interest on what has been 
 paid). In other words, supposing he is lucky enough 
 to get a $3,000 house, paying only ten per cent down, 
 it would be rare indeed for him to be able to borrow 
 90 per cent of the cost with no security to offer but 
 a mortgage on the property. But suppose he suc- 
 ceeds. His annual interest charges would be $162, 
 his taxes, insurance and repairs we will put at 4 
 
SHALL PUBLIC CREDIT BE EMPLOYED? 45 
 
 per cent of $3,000, or $120, or a total of $23.50 
 monthly, to which we must add $13.50 per month 
 for Building and Loan Shares, to pay off his prin- 
 cipal, a monthly grand total of $37, which the 
 majority of wage earners would be utterly unable 
 to pay. If the interest were reduced to 4 per cent, 
 and the time for repayment extended to 24 years, 
 taxes, etc., remaining as before we should have a total 
 monthly cost of $24, which, while still barring out 
 some wage earners, would open up the possibilities 
 of home ownership to an extremely large group. 
 
 BELGIAN SYSTEM OF LOANS TO WORKINGMEN l 
 
 One of the best provisions of credit for working- 
 men's homes is that afforded by the Belgian law of 
 1889. At first it provided for 5 per cent, later for 
 7y 2 per cent of the deposits of the General Savings 
 Bank being lent to non-commercial loan associations, 
 which, in turn, make loans to workingmen to build 
 or purchase a home. Loans may run for 25 years. 
 The rate of interest has been from Sy 2 to 4 per cent 
 to the workingmani Payments of interest and prin- 
 cipal, and insurance on the workingman's life for 
 the unpaid balance, are made in equal installments, 
 monthly or weekly. Up to the outbreak of the war 
 54,632 Belgian workingmen had become home owners 
 through the operation of this law. 
 
 NEW ZEALAND SYSTEM OF LOANS TO WORKINGMEN 1 
 
 Better still, perhaps, is the New Zealand system, 
 since it eliminates the loan association. The State 
 
46 THE HOUSING FAMINE 
 
 Advances Office lends directly to the workingman 
 at 4i^ per cent, and repayment may be spread over 
 S6y 2 years. The money is provided by a bond issue. 
 The borrower may be "any person employed in 
 manual or clerical labor who is not in receipt of 
 an income of more than 200 pounds per annum and, 
 is not the owner of any land other than the allotment 
 on which it is proposed to build," 2 which he must 
 own. 
 
 BRITISH AND GERMAN SYSTEM OF LOANS 
 TO HOUSING COMPANIES l 
 
 Even more has been done abroad by loans to non- 
 commercial housing companies than by loans to in- 
 dividual workingmen. Great Britain and Germany 
 have followed this policy on an extensive scale, and 
 have been copied by France, Italy, Austria, Canada, 
 and numerous other countries. 
 
 The housing company may be a co-operative or- 
 ganization of workingmen, or a philanthropic or civic 
 corporation. Many of the housing companies 
 founded by our Chambers of Commerce or by em- 
 ployers could qualify in the latter class. The United 
 States Shipping Board during the war pursued an 
 emergency form of this policy. 
 
 1 See Housing of the Unskilled Wage Earner, Chap. V, and U. S. 
 Bureau of Labor Statistics Bulletin, 158. 
 
 * New Zealand Official Year Book for 1916, p. 636. 
 
SHALL PUBLIC CREDIT BE EMPLOYED? 47 
 
 TOPIC II 
 FIRST ARGUMENT 
 
 By Frederick Ackerman 
 
 1. Use of public credit admission of breakdown of 
 
 financial business system. Would end in de- 
 preciation of Government securities and more 
 inflation. A futile measure. 
 
 2. Mrs. Wood's proposals are subventions made with 
 
 view of retaining losses consequent upon system 
 of price competition. Would not work anyway. 
 
 3. Mr. Murphy and I agree; but through different 
 
 reasoning. 
 
 The use of public credit as a means toward provid- 
 ing adequate housing accommodations for wage 
 workers is first of all to be interpreted as a fairly 
 clear indication of the fact that the modern indus- 
 trial system is incapable of performing what is now 
 rated by all hands as an extremely important func- 
 tion. 
 
 Therefore, and without further argument, we may 
 admit that the use of public credit is to be viewed 
 as in the nature of a subsidy to that system of pro- 
 duction which operates through a system of loan 
 
48 THE HOUSING FAMINE 
 
 credit, price competition and a consequent due 
 regard to the curtailment of product. That is to 
 say, a subsidy to that system which can only operate 
 when it keeps prices up by keeping production down. 
 
 WHY GO IN A CIRCLE? 
 
 Of course, the introduction of public credit to 
 stimulate the erection of habitations for the wage 
 workers might prolong the life of the present sys- 
 tem, the inefficiency of which is plainly acknowl- 
 edged by the advocacy of a resort to public credit 
 to help it to function. Precisely what would be 
 gained in the long run by the adoption of such 
 policy is not very clear. It looks as if following 
 such a course of action would bring us in due time 
 around to the point of departure. 
 
 It is fair to assume that any plan looking forward 
 the use of public credit to stimulate the production 
 of buildings of a certain class, would contain certain 
 restrictive provisions regarding the character of 
 buildings, conditions with respect to location, etc.; 
 and it is likely that its use would also be restricted 
 to some sort of "non-profit" enterprise, that is to 
 say, it would not be handed out freely to be used 
 for speculative purposes ; and of course interest rates 
 would have to be "nominal" if anything were to be 
 gained by such action. The reasons for attaching 
 such restrictions to its use are so obvious as not to 
 require discussion. 
 
 And it is likewise obvious that if any appreciable 
 
SHALL PUBLIC CREDIT BE EMPLOYED? 49 
 
 volume of such public credit be used for the building 
 of homes for wage workers, no other credit would 
 flow into building operations of the same general 
 class. That is to say, private enterprise would ulti- 
 mately be forced to withdraw from this field of 
 action; and as a consequence the entire burden of 
 building homes for the wage workers would fall 
 upon the shoulders of the State. 
 
 WHY MOBE INFLATION? 
 
 Such a plan would be likely to " start something/' 
 Let us see ! The volume of funds required to carry 
 out such a programme, were the State to provide the 
 entire volume of credit in the form of loans to 
 municipalities, "non-profit" enterprises, etc., would 
 amount to a very considerable sum. Presumably 
 this considerable sum would have to be secured from 
 the sale of municipal, state or federal bonds. Thus 
 we would bring this whole enterprise into competi- 
 tion with the sale of securities for all of those private 
 enterprises which promise not alone a normal rate 
 of interest, but a large profit as well. There could 
 be but one outcome in pursuing such a policy. Gov- 
 ernment securities would decline in value as our 
 enterprise grew in volume. The result would be 
 inflation. We should be satisfied with the present 
 conditions in this respect. If there still be doubt as 
 to the validity of the theory thus presented, a look 
 in upon the British scene would satisfy any one. 
 Great Britain has passed through this period of com. 
 
50 THE HOUSING FAMINE 
 
 munistic action confined to consumption in competi- 
 tion with an investment for profit competitive system 
 of production and has now reached the point where 
 an outright subsidy of 250 per house will not start 
 the production of houses. 
 
 WHAT LOAN CREDIT ACCOMPLISHES 
 
 But the real question involved on this head is not 
 a matter of choosing between the use of public or 
 private credit; it is rather a question as to what 
 is the function of loan credit. A century and a 
 half of almost unhampered experiment has brought 
 a great many people to the point of saying that, 
 as a general proposition, the only function of loan 
 credit is to transfer the right to use material and 
 services from one person to another. If this be the 
 case, then the adoption of the plan of using state 
 credit would not help a great deal in producing 
 homes for the people. 
 
SHALL PUBLIC CREDIT BE EMPLOYED? 51 
 
 TOPIC II 
 SECOND ARGUMENT 
 
 By John J. Murphy 
 
 MISTAKEN VIEW OF PUBLIC CREDIT 
 
 In the discussion of this subject, I find my oppo- 
 nents completely at variance. Clearly public credit 
 may be employed directly by public authorities, or 
 indirectly by lending money, borrowed by the public, 
 to associations or individuals proposing to engage 
 in individual house production or building on a large 
 scale. I stand between the two extreme positions. 
 Government is largely responsible for the predica- 
 ment in which we find ourselves due to its sins of 
 omission and commission. It is the agent of society, 
 or at least that part of society that has the intel- 
 ligence, energy and resources to make its will im- 
 pressive. It may fairly be called upon to aid in 
 remedying some of the consequences of its own 
 errors. 
 
 Defects in banking system 
 
 Among these is a banking system which tends to 
 divert the great volume of available capital into 
 
52 THE HOUSING FAMINE 
 
 short term loans, which, as they offer larger returns 
 are sought in preference to the long term loans which 
 building requires. An amendment is now proposed 
 to the Federal Keserve Act, requiring national banks 
 which maintain savings bank departments to invest 
 all savings in such forms of securities as may be 
 directed by the Federal Eeserve Board. The object 
 of the amendment is the adequate protection of the 
 interests of depositors. Its effect will be the diver- 
 sion of more than $2,000,000,000 from short term 
 loans to long term investments in construction enter- 
 prises. This sum is equal to the present combined 
 assets of the building and loan associations of the 
 United States. If this measure is adopted, it will 
 go a long way toward accomplishing all that the 
 extension of public credit might be expected to do, 
 and do it in a much better and safer way. 
 
 HOW CAN PROPER VALUATION BE OBTAINED? 
 
 The history of direct loans by the State, in any 
 of its various guises, to private individuals or cor- 
 porations is not encouraging. Problems of valuation 
 arise, which it is difficult for private firms, with all 
 the incentive of private interest, to properly control ; 
 it would be entirely impossible for public officials 
 to prevent grave scandals. Yet, with all its draw- 
 backs, it would have some advantage over direct 
 action by the state. In 1836, the State of New York 
 received from the United States over $5,000,000, as 
 its share of a surplus then in the United States 
 
SHALL PUBLIC CREDIT BE EMPLOYED? 53 
 
 treasury, not altogether as a gift, but a fund to be 
 used for the benefit of schools and education. The 
 Federal Government is empowered to ask for an 
 accounting at any time, but has not done so to date. 
 The fund was to be invested in improved real estate. 
 Most of it is irrecoverable. The enforcement of pay- 
 ment of obligations due the government is always 
 a tedious and unpopular process. 
 
 LABOR COLD TO HOME-OWNING 
 
 A factor which must be given due weight in the 
 consideration of this feature of the case is the opposi- 
 tion to home-owning which is shown by some 
 branches of organized labor. Their point of view 
 is quite defensible, on account of the uncertainty of 
 permanent employment, which has hitherto char- 
 acterized so many trades. The possession of a home 
 with a mortgage on it diminished the workman's 
 mobility, and often prevented him from carrying his 
 labor to the best market, while in the event of 
 strikes, he became timid for fear of losing the in- 
 terest which he had already acquired. Until condi- 
 tions change so that this attitude changes, the num- 
 ber of home-owning mechanics is not likely to greatly 
 increase. 
 
 THE " OWN-YOUK-HOME " MOVEMENT 
 
 The Own-Your-Home movement deserves encour- 
 agement, but its task has been made difficult by the 
 suspicion which has been engendered that all organ- 
 
54 THE HOUSING FAMINE 
 
 ized propaganda has ulterior motives. This frame of 
 mind is one of the most marked aftermaths of the 
 war. A number of people who have some money 
 saved are going into house building for themselves, 
 but they are not the people whose need is greatest. 
 We must produce housing at wholesale for a good 
 while to come, and commendable as are the efforts 
 of building and loan associations, they will not sup- 
 ply more than a fraction of the actual needs of the 
 community. So the use of public credit will not meet 
 the emergency, whether used directly or lent to 
 others, unless we can stimulate or revive the normal 
 courses of supply, private initiative and private in- 
 vestment. 
 
SHALL PUBLIC CREDIT BE EMPLOYED? 55 
 
 TOPIC II 
 SECOND ARGUMENT 
 
 By Edith Elmer Wood 
 
 what is public credit? 
 
 The very first sentence in Mr. Murphy's statement 
 is productive of something like despair. If so em- 
 inent an advocate of individualism is guilty of such 
 confusion of ideas, what can we expect of the or- 
 dinary run of them? He says we ought not to have 
 public credit for housing because of "the wasteful 
 manner in which public money is usually expended.' ' 
 What does he think public credit is? 
 
 Does he suppose that a workingman who borrows 
 $3,000 from a government housing fund to build 
 himself a home, is thereby infected with extrava- 
 gance? Would it be better for him to borrow from 
 the usurer Mr. Murphy admits is lying in wait? 
 What does Mr. Murphy think of the Federal Farm 
 Loan Act? Does he claim that it has fostered ex- 
 travagance among farmers? 
 
 Or is it simply that government loans and govern- 
 ment housing present themselves so nebulously to his 
 mind that he makes no distinction, between them? 
 
56 THE HOUSING FAMINE 
 
 THE STATE WILL DRIVE OUT PRIVATE ENTERPRISE 
 
 Mr. Murphy says, "The entry of the state into the 
 housing (loan?) field would drive out private ven- 
 tures in the same field." But there are no private 
 ventures in the field where we want government 
 loans to operate the field of providing homes for 
 low-paid wage earners. There have been none for 
 many years, if ever. Is private business initiative 
 such a dog-in-the-manger that it will neither extend 
 credit itself to the workingman, nor suffer him to 
 get it in any other way? We do not for a moment 
 advocate indiscriminate government loans. 
 
 MR. ACKERMAN ADMITS BENEFICENT EFFECT 
 OF GOVERNMENT LOANS 
 
 Mr. Ackerman says he is opposed to government 
 housing loans because they would prolong the life of 
 the present industrial system. In other words, he 
 admits that they would improve the living conditions 
 of workingmen and therefore objects. He wants all 
 the bad features of the present conserved, in order to 
 hasten our arrival at the revolution point. 
 
 HOW LARGE WOULD BE THE FIELD OF 
 GOVERNMENT CREDIT? 
 
 He says if we had government loans, "no other 
 credit would flow into building operations of the 
 same class." But, as has just been pointed out to 
 Mr. Murphy, we are only proposing government 
 
SHALL PUBLIC CREDIT BE EMPLOYED? 57 
 
 credit for those groups toward whom no credit what- 
 ever is, or has been, flowing. 
 
 No one knows exactly how large is that section of 
 the population. Government credit probably cannot 
 supply it all. But if it ultimately supplies one-tenth 
 of all the people, which is by no means beyond the 
 bounds of possibility, the worst of the old houses can 
 be vacated, and the up-keep standard of the others 
 will necessarily be raised. 
 
 Mr. Ackerman is right in calling attention to the 
 bad results of issuing too many housing bonds at 
 once. Fortunately it is quite possible to avoid this 
 danger. 
 
 BRITISH HOUSING SUBSIDIES 
 
 As to the present (temporary) British policy of 
 housing subsidies, I am not advocating anything of 
 the sort for the United States. I do not believe the 
 emergency calls for it. Mr. Ackerman says we will 
 come to it, if we adopt a housing-at-cost policy, 
 because the British had an at-cost system before the 
 war. Post hoc, ergo propter hoc. 
 
58 THE HOUSING FAMINE 
 
 topic n 
 
 SECOND ARGUMENT 
 
 By Frederick L. Ackerman 
 
 MR. MURPHY DISCOVERS A MOTE 
 
 While Mr. Murphy and I are plainly moving in 
 opposite directions in our argument, yet we pass this 
 point in the debate without collision. Both conclude 
 that public credit should not be employed. 
 
 He makes one statement, however, in his argument 
 which bears a little looking into. He says, "the 
 difficulties of obtaining money for housing loans is 
 not that lenders are unwilling to put money into 
 building, but they are unwilling to advance as high 
 a percentage ... as they did hitherto . . . They 
 fear ... a depreciation." A man desiring to secure 
 a loan and having tried repeatedly to secure a loan 
 would put it in this fashion: "I saw the Controller 
 and he said nothing doing." I suspect I really be- 
 lieve that Mr. Murphy has provided me with a 
 very fortunate illustration of what I have repeatedly 
 referred to as blameless sabotage which of course 
 is very much to the point as regards my main con- 
 tention, I ask a question: is not this hesitating 
 
SHALL PUBLIC CREDIT BE EMPLOYED? 50 
 
 attitude on the part of the lenders to be viewed as 
 blameless sabotage one of the inevitable conse- 
 quences of our system of investment for a profit 
 price competition? 
 
 But since Mr. Murphy agrees with me that public 
 credit should not be employed, we may, therefore, 
 proceed immediately to Mrs. Wood's argument. 
 
 WHAT WERE THE ACTUAL RESULTS? 
 
 Mrs. Wood's argument upon this head is mainly a 
 statement of what has been done by way of legis- 
 lation looking toward the use of public credit. Mrs. 
 Wood has little to say about the actual conditions 
 which obtained prior to the war in the various coun- 
 tries which she mentions as having resorted to the use 
 of public credit to solve the housing problem. Actual 
 conditions in 1913 as regards the then accumulating 
 shortage of houses in the countries mentioned should 
 shed light upon the question. Her statement of the 
 case leads one to assume that the housing problem 
 must have been moving toward solution wherever the 
 use of public credit had been employed. It is there- 
 fore that I ask: What was the actual drift of events 
 in this connection in these countries mentioned, say, 
 in 1913? Was the shortage of houses accumulating 
 or decreasing? 
 
 WHY PICK ON ONE PROFITEER 
 
 But it is clearly evident that Mrs. Wood recognizes 
 and names one of the underlying difficulties in the 
 
60 THE HOUSING FAMINE 
 
 present situation, for she says " these desiderata can 
 only be had under Government auspices since they 
 involve the elimination of profit from the lending 
 transaction. M It is clearly evident that the elimination 
 of profit appeals to Mrs. "Wood as an important factor. 
 I must therefore ask: If it is desirable to eliminate 
 profit from the "lending transaction' ' which she refers 
 to, why it is not likewise quite as desirable to eliminate 
 profit from the various other "lending transactions" 
 all down the line in the fabrication of materials and 
 in the use of land. "Why pick on one (blameless) 
 profiteer? 
 
 ONLY A MAKE BELIEVE 
 
 The scheme which Mrs. Wood advocates is not built 
 upon a very firm foundation, for it allows, as I have 
 already pointed out, the whole list of wastes, curtail- 
 ments and cancellations of effort which take place 
 inevitably in our system of production conceived in 
 terms of investment for a profit and price competition. 
 What her scheme accomplishes of course is the appar- 
 ent elimination of one of the wastes, that is to say one 
 of the profit transactions. But is it not true that this 
 elimination is proposed in order that we may retain 
 the entire list of profit transactions, wastes and cur- 
 tailments which take place in our system of production 
 animated by investment for a profit? 
 
SHALL PUBLIC CREDIT BE EMPLOYED? 61 
 
 TOPIC II 
 
 THIRD ARGUMENT 
 
 By John J. Murphy 
 Answering Mrs. Wood: 
 
 PUBLIC CBEDIT MERELY POWER TO RAISE MONEY 
 
 Misapprehensions due to use of words or phrases 
 are more or less inevitable. Mrs. Wood deems me 
 ignorant of the meaning of public credit. I have to 
 retort that she limits it in a manner which nothing 
 in our topic suggests. Public credit is the ability of 
 Federal, State or Municipal authorities to borrow 
 money. The money when borrowed may be used 
 either by the public directly, as in construction of 
 subways or reservoirs, or it may be lent, after amend- 
 ment of the constitution, to individuals in the man- 
 ner which Mrs. Wood evidently has in mind. I am 
 not responsible for the limitations which she attaches 
 to phrases which have a wider significance. Had our 
 topic read, " Shall we employ Government loans V 9 
 that would have been a different matter. 
 
 REASONABLE PROFIT POSSIBLE IN BUILDING 
 CHEAP DWELLINGS 
 
 It is not in accord with the facts to state that therei 
 have been no private ventures in the field of pro- 
 
62 THE HOUSING FAMINE 
 
 viding homes for low-paid wage earners. During 
 the past fifteen years not less than $400,000,000 
 has been put into tenement houses, where rents did 
 not exceed $25 per month, in New York alone. 
 Hundreds of such houses where rents of apartments 
 did not exceed $15 were erected. Similar construc- 
 tion has gone on in other large cities. 
 
 DANGERS OF GOVERNMENT INTERVENTION 
 
 As regards advances for home building. Outside 
 of ordinary business channels it is a dangerous finan- 
 cial experiment. Can Government evict people who 
 do not pay? Legally and physically, yes, but actually 
 it is extremely doubtful. A big local political issue 
 can always be made out of proposals to compel people 
 to live up to their obligations to Government. It is 
 about as hard to enforce Government's claims 
 against a group of citizens, as it is to enforce a 
 citizen's claim against Government. 
 
 As to Mr. Ackerman: 
 
 REFUSAL TO LEND DUE TO FEAR OF 
 FUTURE DROP IN VALUES 
 
 His criticism of my stand on this subject is not 
 very searching. I do not believe that the refusal of 
 great organizations of capital to lend on housing as 
 large a percentage as usual, is based on wrong 
 motives. The future drop in values to a greater or 
 less extent is inevitable, as many see it. Many big 
 institutions are lenders of trust funds. No one can 
 properly criticise their taking an attitude of caution. 
 
SHALL PUBLIC CREDIT BE EMPLOYED? 63 
 
 TOPIC II 
 THIRD ARGUMENT 
 
 By Edith Elmer Wood 
 
 we welcome mr. murphy to our ranks 
 
 Mr. Murphy is a homeopathist in social economy. 
 He lays all our ills to Government, and has recourse 
 to more Government for a cure. He does me the 
 honor to advocate legislation releasing national bank 
 deposits for housing loans, which he will find sug- 
 gested in my book, The Housing of the Unskilled Wage 
 Earner* 
 
 There are two differences in our plans, however. 
 Mr. Murphy outherods Herod by making the loans 
 compulsory, and he lays no restriction on the bene- 
 ficiaries. That bars out the workingman. We both 
 know there is not enough credit from this source to 
 build houses for everybody. The question is : Shal] 
 we steer it to those who have, or to those who have 
 not? 
 
 ASSERTION IS NOT PROOF 
 
 Mr. Murphy says "The history of direct loans by 
 the state is not encouraging." To me it is extremely 
 
64 THE HOUSING FAMINE 
 
 encouraging. He says "It would be impossible for 
 public officials to prevent grave scandals.' ' To what 
 grave scandals can he point in the administration 
 of the Belgian Housing Act? The New Zealand 
 Advances to Workers Act ? The British Housing of 
 the Working Classes Acts? In the French, German, 
 Italian or Norwegian loans? Or our own Federal 
 Farm Loans? 
 
 A PLEASURE TO ANSWER QUESTIONS 
 
 I grant Mr. Ackerman my proposal eliminates only 
 the final profit, but the elimination is entirely real, 
 not apparent as he calls it. 
 
 Replying to his question: The housing problem 
 was moving toward a solution in various countries 
 in 1913 just about in proportion to the extent to 
 which public credit was being used. 
 
 * Housing Loans by National Banks, pp. 267, 268. 
 
SHALL PUBLIC CREDIT BE EMPLOYED? 65 
 
 topic n 
 
 THIRD ARGUMENT 
 
 By Frederick L. Ackerman 
 
 MRS. WOOD TRUSTS AGAIN. PUBLIC CREDIT 
 NOT SUFFICIENT TO START THE GAME 
 
 Mrs. Wood counters my main argument my ob- 
 jection to the use of public credit, by saying: "For- 
 tunately, it is quite possible to avoid this danger." 
 She does not make it clear as to how this danger could 
 be avoided. My contention is that it cannot be 
 avoided, since the volume of securities required, if 
 any appreciable change were to be effected, would 
 have to be very considerable. We should be suf- 
 ficiently familiar with the results of constantly ex- 
 tending the volume of credit. 
 
 IT WILL NOT WORK ANYWAY 
 
 Mrs. Wood states that she is not advocating any- 
 thing like the "present (temporary) British policy 
 of housing subsidies.' ' Now, it is notorious that 
 after eliminating the profit of the speculator, we 
 cannot provide houses for the lower paid wage 
 worker for a rent which he can afford to pay and at 
 
66 THE HOUSING FAMINE 
 
 the same time provide for the interest and amortiza- 
 tion of the investment. From the data available as 
 regards cost of building and the rent which the lower 
 paid wage worker can pay, it is clearly evident that 
 we would be required to provide a subsidy approxi- 
 mating that which I referred to in connection with 
 the present scheme of housing in Great Britain. It 
 therefore looks to me as if we would of a necessity 
 have to start with an outright subsidy to build the 
 first house. 
 
 NOT MUCH OF AN ARGUMENT 
 
 I do not admit that the use of public credit, while 
 prolonging the life of the present wasteful industrial 
 system, would improve the living conditions of the 
 workers. I did not suggest that I "want all of the 
 bad features of the present conserved." My con- 
 tention is that nothing of any importance can pos- 
 sibly be accomplished by the indirect methods sug- 
 gested by Mrs. Wood, since they in nowise aim at 
 modifying the conditions which operate to bring about 
 the conditions of mal-adjustment. I hold that for 
 the reasons repeatedly stated, the modern industrial 
 system cannot "come across with the goods.' 9 
 
TOPIC III 
 SHALL WE HAVE MUNICIPAL HOUSING? 
 
topic in 
 
 FIRST ARGUMENT 
 
 By John J. Murphy 
 
 1. I oppose municipal operation of housing as a pub- 
 
 lic utility. Such experiments hare always 
 proven wasteful and costly as compared with 
 similar private undertakings. 
 
 2. Mrs. Wood thinks that so-called lower paid wage 
 
 earners would like to live in artisan's dwellings, 
 as they are called in Europe. I don't. 
 
 3. Mr. Ackerman thinks such a plan would increase 
 
 congestion. I differ with him. 
 
 A SPECIOUS PROPOSITION 
 
 At first glance there seems much to be said in favor 
 of making the housing problem a matter for direct 
 action by the municipality. Does not the city, as a 
 matter of self-protection, provide alms-houses, hos- 
 pitals, jails? If it provides shelters for the paupers, 
 criminals, and vagrants, why not for average citizens 
 unable to find a home? There is a curious quality 
 of character, called self-respect, which causes the 
 average citizen to hesitate about enrolling himself 
 
70 THE HOUSING FAMINE 
 
 among the defectives and delinquents. Artisans' 
 dwellings, to a very limited extent, have existed 
 abroad and mechanics dwell in them, but in Europe 
 there is a very general recognition of the fact that 
 large portions of the population are living on wages 
 below the living level. Here, whatever may be the 
 truth, such a condition is not accepted by our citizens 
 to any great extent. 
 
 If we may judge by all precedents established in 
 municipal construction, the great mass of such build- 
 ings would be politically constructed. The land 
 would be purchased from the owner having the 
 greatest pull, at a price determined by the size of the 
 city's pocket book, the building would be constructed 
 of expensive material and in leisurely manner, and 
 on an arbitrary plan, embodying the view of some 
 eminent architect who knows how the people should 
 live rather than how they want to live. 
 
 WILL COST MORE THAN PRIVATE CONSTRUCTION 
 
 When, after a couple of years, which is the shortest 
 time in which municipal buildings are ever con- 
 structed, they are opened to occupancy, if they are 
 rented for enough to provide a fair return on costs 
 of construction, etc., they will not provide homes for 
 our poor citizens, because they will cost more than 
 privately erected buildings. If they are cut down 
 to a rent regardless of cost, which the tenant can 
 
SHALL WE HAVE MUNICIPAL HOUSING? 71 
 
 afford to pay, it will mean that the whole housing 
 programme for the city will be left to the city, 
 except, perhaps, the construction of very expensive 
 apartments. Can any one doubt, if the occuancy 
 of such buildings would confer any special advantage 
 on the tenant, that they would constitute a very 
 subtle form of political patronage? 
 
 THE PROPER FIELD OF MUNICIPAL OPERATION 
 
 Municipal ownership and operation has its proper 
 field. It may be properly utilized whenever any 
 public service needing for its performance the use 
 of public property is to be rendered to citizens in 
 common. "Water, light and transportation supply are 
 examples in this category, in normal times. Emer- 
 gency housing in times of catastrophe is of course 
 included in this consideration. 
 
 LIMITED BORROWING POWER 
 
 It must not be overlooked that any programme of 
 municipal ownership and operation confronts at the 
 outset the problem of finance. Our cities are limited 
 in borrowing, usually by the state constitutions, to 
 ten per cent of the value of real estate assessed for 
 purposes of taxation. Some states limit their cities 
 even more rigidly. A glance over the figures of 
 city debts indicates that many cities in the nation 
 have already borrowed nearly all they are entitled 
 to, so that any such programme as would be involved 
 in the municipal ownership and operation of hous- 
 
72 THE HOUSING FAMINE 
 
 ing could only be undertaken after long delay. And 
 we are dealing with a situation which calls for a 
 prompt solution ; but it must not be a solution which 
 leaves the patient worse off than he was when the 
 treatment was administered. 
 
 FAILURE OF ATTEMPTS TO REGULATE PRICES 
 
 Men of judgment must admit that whenever the 
 state attempts things outside of the comparatively 
 narrow range of functions, which are its proper 
 province, it makes a poor showing. When it at- 
 tempts to regulate prices, it can prevent the sale of 
 articles at prices above the maximum which it fixes, 
 but it cannot bring it about that any articles shall be 
 sold at all. Recently it attempted to control the 
 price of sugar, with the result that sugar became 
 practically unobtainable. When the ban was taken 
 off, sugar became purchasable, though at a higher 
 price. As a preventive force Government is all pow- 
 erful; as a constructive force it is negligible, 
 
SHALL WE HAVE MUNICIPAL HOUSING? 73 
 
 TOPIC III 
 FIRST ARGUMENT 
 
 By Edith Elmer Wood 
 
 1. I favor the supply of houses to lower-paid wage 
 
 earners by municipalities as a self-supporting 
 public utility. 
 
 2. Mr. Murphy's objections are based on miscon- 
 
 ception of service rendered and distrust of 
 American public officials. 
 
 3. Mr. Ackerman vanquishes several straw men of 
 
 his own creating. 
 
 WHY IT IS NECESSARY 
 
 Whether we like it or not, we must resort to 
 municipal housing, unless we can dam the flood of 
 modern tendency (with something more than words) 
 so as to halt the growth of cities, or unless wa are 
 willing to condemn an ever increasing section of 
 their population to a soul and body stunting life 
 under conditions of constantly increasing congestion, 
 till, like Glasgow and Dublin, more than a fourth 
 of the population, or like Berlin, nearly half of it, 
 live in one-room tenements. 1 
 
74 THE HOUSING FAMINE 
 
 In great cities there is always a considerable 
 element lacking the initiative and the resources to 
 arrive at home ownership under the most favorable 
 state-loan conditions. Public welfare housing com- 
 panies will reach only a fraction of them. City hous- 
 ing, at cost, is their only salvation. 
 
 BRITISH EFFORTS TO AVOID IT 
 
 If ever a people were wedded to the philosophy of 
 individualism, laissez-faire, and business initiative, it 
 was the British. But when they found that families 
 living in the London slums became extinct in three 
 generations, and that the second generation was unfit 
 for the recruiting sergeant, they woke up. They saw 
 that, for a considerable segment of the population, the 
 element of profit must be eliminated from housing, if 
 they are to be fitly housed. 
 
 They tried to do it first through philanthropy. 
 They did far more in that way than we have ever 
 done, though it was an American, George Peabody, 
 who established the first big housing fund in London. 
 Through it and nine other foundations, 125,000 people 
 were eventually housed. 2 Good was accomplished. 
 Death rates were lowered. But what philanthropy 
 could do was seen to be only a drop in the bucket, 
 and the relationship established was somehow all 
 wrong. 
 
 Then the credit systems already described were 
 launched and pushed. It was realized that com- 
 munity credit must be drawn on, but it was hoped 
 
SHALL WE HAVE MUNICIPAL HOUSING? 75 
 
 that private initiative might still manage the enter- 
 prises. A great deal has been done in this way. The 
 co-partnership garden city or garden suburb societies 
 represent the final flower of the movement. 
 But still it was not enough. 
 
 MUNICIPAL HOUSING IN ENGLAND 
 
 Liverpool, Manchester and London began building, 
 then many cities. Before the war, the London 
 County Council had provided 9,822 homes for 57,942 
 people. 3 It has a programme under way now involving 
 the completion of 10,000 more homes by March, 1921, 
 and 19,000 additional in the four years following. 4 
 Between 1910 and 1917, 205 different urban councils 
 and 116 different rural councils had undertaken 
 housing projects. 5 
 
 Great Britain at first permitted municipalities to 
 provide housing (Shaftesbury Act of 1852), then 
 encouraged it (Housing of the Working Classes Act, 
 1890) and finally made it obligatory (Housing and 
 Town Planning Acts, 1909, 1919). 
 
 MUNICIPAL HOUSING IN GEBMANT 
 
 Germany is the other country where municipal 
 housing has been most extensively tried out. Mayor 
 von Wagner started it at Ulm in 1888. In 1910, 42 
 cities with population over 50,000 had provided hous- 
 ing for their own employees, and 15 such cities for 
 the working classes in general. In addition to 
 municipal activity, the various German states, and 
 
76 THE HOUSING FAMINE 
 
 even the empire (for imperial employees) carried on 
 extensive housing operations. 
 
 Municipal housing has, generally speaking, been 
 more economically handled in Germany than in Eng- 
 land, but the English housing standard is higher. 6 
 
 IN OTHER COUNTRIES 6 
 
 Besides Great Britain and Germany, municipal or 
 national housing has been tried rather extensively 
 by Austria and Hungary, and to a less extent by 
 Prance, Italy, Chile, Argentina and Cuba. It has 
 made a beginning in Australia, New Zealand, 
 Sweden, Switzerland and Belgium. 
 
 IN THE UNITED STATES 
 
 "We have no instance of municipal housing as yet 
 in this country. There is no insuperable obstacle if 
 and when we decide we want it. In some states con- 
 stitutional amendments will have to be secured, in 
 others only an enabling act will be necessary. Some 
 city charters will have to be amended. Some debt 
 limits will oppose a difficulty, though bonds issued for 
 self-supporting utilities are commonly excluded. 7 
 
 One state, Massachusetts, is carrying on a small 
 experiment in state housing. The Massachusetts 
 Homestead Commission, with a munificent appropria- 
 tion of $50,000, bought and laid out 7 acres of land 
 in Lowell and built 12 houses, which it is selling at 
 cost on the installment plan (27 years' maximum 
 time and 5 per cent interest). 8 
 
SHALL WE HAVE MUNICIPAL HOUSING? 77 
 
 The federal government, during the war, through 
 the United States Housing Corporation, acting under 
 the Department of Labor, carried on extensive hous- 
 ing operations. 9 
 
 Municipal housing is a live issue in New York, 
 Boston, Pittsburgh, Washington, and several other 
 cities. 
 
 It is coming as surely as to-morrow. 
 
 1 Housing of the Unskilled Wage Earner, pp. 133, 134. 
 
 * W. Thompson, Housing Up to Date, p. 143. 
 
 8 Report of the London County Council, 1915. 
 4 Housing Betterment, Dec, 1910, p. 13 
 
 6 Forty-fifth and Forty-sixth Annual Reports of the Local 
 Government Board. 
 
 8 Housing of the Unskilled Wage Earner, Chap. V. 
 Bulletin 158, U. S. Bureau of Labor Statistics. 
 
 7 John Nolen, New Ideals in the Planning of Cities , Towns and 
 Villages, p. 108. 
 
 8 Reports Massachusetts Homestead Commission. 
 
 Report of the U. S. Housing Corporation, 
 
78 THE HOUSING FAMINE 
 
 TOPIC III 
 
 By Frederick L. Ackerman 
 
 FIRST ARGUMENT 
 
 1. Another form of subsidy to failing financial busi- 
 
 ness system. Would stimulate the growth of 
 cities and end in more congestion. Precisely 
 what we should avoid. A dubious proposal. 
 
 2. Mrs. Wood's housing "at cost" a misleading and 
 
 utterly meaningless expression. Needs looking 
 into. 
 
 3. Again Mr. Murphy and I agree. His failure to 
 
 recognize sabotage provides me with good illus- 
 tration. 
 
 It is fair to say that this question has very re- 
 luctantly shown its head in America. But now the 
 question is openly debated; and what is to be noted 
 as characteristic of nearly all the talk about it is 
 that it is viewed as a temporary measure a policy 
 to be adopted for the time being by some courageous 
 state legislature, and then left on the doorstep of the 
 unsuspecting municipality. It is equally fair to say 
 that the question is not ordinarily associated with 
 
SHALL WE HAVE MUNICIPAL HOUSING? 79 
 
 communal ownership of all habitations. But let us 
 examine this matter and discover, if possible what it 
 is all about. 
 
 A SUBSIDY TO WHAT? 
 
 It should be fairly obvious to any one that munici- 
 pal ownership and operation of houses for wage 
 workers involves the building and renting of houses 
 for a price which the worker can afford to pay. At 
 the present juncture, if we accept as low a standard 
 as the minimum set up in our various tenement house 
 laws, we are faced with the fact that adequate homes 
 cannot be built and operated for a rent which the 
 lower paid wage workers can pay. Hence, of course, 
 the plan falls under the category of subsidy. But the 
 question arises a subsidy to what? The answer is 
 not difficult if we view the matter without prejudice. 
 It is a subsidy to the modern industrial system. 
 While such a plan eliminates that social loss which 
 appears in speculative turnover of property, the 
 entire list of wastes which arise out of the production 
 of the materials which go into the building of such 
 habitations remains to baffle us. 
 
 Of course no private enterprise could for long com- 
 pete; and the policy once embarked upon would 
 ultimately follow the same course as was outlined 
 with respect to the use of public credit. The muni- 
 cipality would of necessity be required to assume no 
 less than the full obligation of adequately housing 
 its entire wage working population. All that was 
 
80 THE HOUSING FAMINE 
 
 said with respect to inflation as following the use 
 of credit for this purpose likewise applies to the 
 plan of municipal ownership and operation. As a 
 plan of action, it disregards completely the cause 
 which has brought about the present condition of 
 mal-adjustment. As a remedy it is not therefore to 
 be very highly rated. It may be set down as make- 
 believe number two. 
 
 IT MEANS MORE CONGESTION 
 
 Important as is the matter just considered, there 
 is still a matter of far greater importance, which 
 should arrest the attention of all. To answer the 
 question in the affirmative to say that urban centers 
 should take upon themselves the work of building 
 the homes for wage workers is precisely the same as 
 saying that we are all in favor of a policy which can 
 have no other possible outcome, now or in the future, 
 than that of producing a greater and still greater 
 congestion of population in urban centers. 
 
 NOT A COMFORTING THOUGHT 
 
 The discrepancy which has arisen between the pop- 
 ulation of urban centers and the supporting agri- 
 cultural population is sufficient to make us pause. 
 We should pause and consider whether or not we can 
 afford to do any act whatsoever which would further 
 increase that discrepancy. There is no space here to 
 disclose how it is that this discrepancy has come 
 about: we are faced with the fact that for a full 
 
SHALL WE HAVE MUNICIPAL HOUSING? 81 
 
 century and a half there has been a constant drift 
 away from rural areas toward the industrial centers. 
 If this drift continues we shall very soon be con- 
 fronted with the condition that the agricultural pop- 
 ulation may no longer feed the urban population. 
 Central Europe has long passed the danger point: 
 we are rapidly approaching the danger point in 
 America. 
 
 Of course, the distress which we witness about 
 us animates us to grasp at any suggestion. But that 
 is no reason for assuming that what we catch hold 
 of will support us. And still underneath this action 
 conceived as good purpose is the environing economic 
 industrial condition which must have at the doors of 
 factories an " industrial' ' population somewhat in 
 excess of the needs of industry. 
 
 The proposal to support an industrial system 
 which is now running counter to this larger social 
 purpose by collectively taking over the building of 
 habitations for wage workers in urban centers, is 
 a very dubious proposal, 
 
82 THE HOUSING FAMINE 
 
 topic in 
 
 SECOND ARGUMENT 
 
 By John J. Murphy 
 
 MUNICIPAL OWNERSHIP AND OPERATION WILL NOT WORK 
 
 I have to protest again that my associates are wan- 
 dering from the issue. Mr. Ackerman must be taken 
 as mildly condemning municipal ownership and 
 operation, while Mrs. Wood deems it inevitable, but 
 neither of them answers the question, Will it give us 
 quickly an adequate supply of moderately good 
 apartments or houses ? lam enough of an opportunist 
 in facing an emergency like the present, to be willing 
 to throw over any prejudices which I entertain 
 against the idea on principle, as set forth in my 
 opening statement, if it provides the needed supply. 
 I don't care whether it is a prop to the existing 
 order, or whether it is inevitable ; the point is, will it 
 work now? 
 
 NO COMPARISON WITH EUROPEAN VENTURES 
 
 Slum clearances in English or German cities are 
 beside the mark, and have no bearing on present con- 
 ditions here. More private capital has been put into 
 
SHALL WE HAVE MUNICIPAL HOUSING? 83 
 
 construction of multi-family dwellings in a single 
 year in one American city, than has been involved in 
 all the English housing schemes, conducted by 
 municipalities. With all due respect to Mrs. Wood's 
 greater acquaintance with the subject, I do not hesi- 
 tate to assert that the whole British housing pro- 
 gramme has broken down, and seems doomed to utter 
 failure. 
 
 GOVERNMENT INTERFERENCE KILLS HOUSING 
 IN ENGLAND 
 
 The Manchester Guardian announced in Jan- 
 uary that of the thousands of houses needed and 
 expected to be ready at that time only 300 had 
 materialized, and that, Manchester was better off 
 than most other municipalities, which had got noth- 
 ing at all. Moreover, it was announced that 21 types 
 of houses previously accepted by the government had 
 been turned down as too expensive. But, says the 
 Guardian, "we can not imagine lower grades being 
 capable of proper use." And this after three years 
 of preparation and appropriation. 
 
 I do not agree with Mr. Ackerman that municipal 
 ownership and operation would drive private capital 
 out of such ventures, because the amount which 
 municipalities could invest would not be sufficient tq 
 take care of the demand. The poor man must be con- 
 tent to occupy houses which were built for people 
 who were better off, and subsequently abandoned 
 when some change occurred in the neighborhood. 
 
84 THE HOUSING FAMINE 
 
 Regrettable though this may be, it has been the 
 custom of American housing for several generations 
 and in Europe almost universally, so it is no new 
 situation, and the present is no time to change it. 
 What we want now is more houses, as good houses 
 as we can get, but we must have houses of some kind. 
 
 NOT A TIME FOR EXPERIMENTS 
 
 Later on we will be willing to try experiments to 
 change the system so that the people who build 
 houses may get a chance to live in them, while they 
 are new and clean, but for the moment we must 
 "pass this up." 
 
 I re-assert that not only is municipal interference 
 undesirable in principle, unworkable in practice, and 
 slow of accomplishment, on account of constitutional 
 obstacles in the way of the use of the city's borrow- 
 ing power, but, if all these objections were removed, 
 it would not provide as much housing as would seri- 
 ously affect the situation. 
 
SHALL WE HAVE MUNICIPAL HOUSING? 85 
 
 TOPIC III 
 SECOND ARGUMENT 
 
 By Edith Elmer Wood 
 
 self-respect and public utilities 
 
 Since it would be impossible to suspect former 
 Commissioner Murphy of intentionally beclouding 
 the issue, we must assume he really thinks that 
 because the city provides "alms houses, hospitals, 
 jails . . . for paupers, criminals and vagrants/ ' 
 jworkingmen would suffer a loss of self-respect in 
 penting a house or an apartment, at cost, which was 
 fbuilt by the city. Waiving the question as to whether 
 a hospital patient is a pauper, a criminal or a va- 
 grant, will Mr. Murphy tell us whether he thinks a 
 loss of self-respect is involved in sending one's chil- 
 dren to the public school? In getting books from the 
 public library? In listening to a public band concert, 
 in using city water, walking on city pavements, or 
 even in riding in one of Mayor Hylan's buses? If 
 not, why not? 
 
 Paupers, criminals and self-respect seem to have 
 gone into the discard a few paragraphs farther along, 
 for Mr. Murphy tells us that water, light and trans- 
 portation come within the proper field of "municipal 
 
86 THE HOUSING FAMINE 
 
 ownership and operation." Isn't it rather begging 
 the question just to assume that housing does not? 
 
 ARE AMERICAN PUBLIC OFFICIALS ALL GRAFTERS? 
 
 The back-bone of the attack lies in the charges 
 that houses built by a municipality would necessarily 
 be poorly built and extravagantly built, in other 
 words, that all American public officials are grafters. 
 Mr. Murphy's own distinguished record as Tenement 
 House Commissioner sufficiently refutes such cal- 
 umny. 
 
 In a recent book I expressed my own conviction on 
 this question as follows: "If a thing needs to be 
 done, and a host of British, German, French, Belgian, 
 Italian, Austrian and Australasian officials have 
 proved honest and efficient enough to do it success- 
 fully, no self-respecting American ought to say, 'We 
 cannot do it here , . ,,1 
 
 MUNICIPAL DEBT LIMITS 
 
 In regard to the debt limit, Mr. Murphy will find 
 that self-sustaining utilities like water and light are 
 commonly classified outside it. 11 Housing would fall 
 in this category. 
 
 WHY ONLY TEMPORARY? 
 
 I do not know what gave Mr. Ackerman the idea 
 that those who are advocating municipal housing 
 are doing so only as a temporary or emergency 
 measure. I, certainly, am not. 
 
SHALL WE HAVE MUNICIPAL HOUSING? 87 
 IS IT A SUBSIDY? 
 
 When Mr. Ackerman says that "adequate homes 
 cannot be built and operated for a rent which the 
 lower paid wage worker can pay/' does he mean on 
 the basis of a business return? If so, we are agreed. 
 But in that case, he has no reason for calling the 
 at-cost service which has been proposed, a subsidy. 
 
 WILL MUNICIPAL HOUSING INCREASE CONGESTION? 
 
 Quite surprisingly Mr. Ackerman says municipal 
 housing means more congestion. The municipal 
 housing of my acquaintance either builds cottages, 
 twelve to the acre, in garden suburbs, or tearing 
 down huddled slums, rebuilds with broad streets, 
 courts and play-grounds. I do not think Mr. Acker- 
 man's experience has been different. I suspect he 
 only means chat municipal housing would make life 
 so much more agreeable that it would help to per- 
 petuate cities. Mr. Ackerman apparently thinks 
 cities can be abolished. I admit I do not. 
 
 10 Housing of the Unskilled Wage Earner, p. 255. 
 
 11 John Nolen, New Ideals in the Planning of Cities, Toums and 
 Villages, p. 108. 
 
88 THE HOUSING FAMINE 
 
 TOPIC III 
 SECOND ARGUMENT 
 
 By Frederick L. Ackerman 
 
 MRS. WOOD TAKES PLUNGE 
 
 Mr. Murphy concludes that we should not resort 
 to municipal ownership and operation. Since I 
 agree with him, we may turn immediately to Mrs. 
 Wood's argument. Mrs. Wood plunges right off by 
 saying that it is " necessary" thereby acknowledg- 
 ing of course that our industrial system is incapable 
 of performing this important function. Her argu- 
 ment, which had to do with the use of public credit, 
 is very largely confined to the statement of what has 
 been done in other countries. She ignores completely 
 the causes which make it "necessary" in her judg- 
 ment, to resort to municipal ownership and operation. 
 
 Mrs. Wood says: "We must resort to municipal 
 housing unless we dam the flood of modern tendency 
 ... so as to halt the growth of cities." It is evident 
 that she does not think that we can dam this flood 
 of modern tendency. She says in effect let it run 
 on help it along by resorting to municipal housing. 
 Now it is precisely this condition the drift of people 
 
SHALL WE HAVE MUNICIPAL HOUSING? 89 
 
 into urban centers which constitutes our problem. 
 I cannot see that she has made a very good case for 
 municipal housing on the score of "necessity." 
 
 AT COST WHAT DOES IT MEAN? 
 
 Speaking of "a considerable element, lacking the 
 initiative and resources to arrive at home owner- 
 ship* ' she says "city housing, at cost, is their only 
 salvation. ' y I will not here debate the question as to 
 whether or not municipal housing is a certain road 
 to the salvation of civilization. I am inclined to 
 think that it is rather a roundabout and dubious way 
 to such an end. But the phrase "at cost" must be 
 looked into. What does it mean? Obviously to Mrs. 
 Wood it means no speculative profit to a builder 
 no profit on investment to a landlord. Not a bad 
 idea! But let us look again. How many profits 
 have been taken in the chain of land transfers? And 
 what about the wastes, obstructions and cancella- 
 tions which have been making a pyramid of "costs" 
 in the fabrication, in the sale and in the delivery of 
 the materials? 
 
 NOW VIEW THE PYRAMID 
 
 The price of every commodity and service so called 
 entering into such a municipally owned building 
 would carry its proportion of interest upon a vast 
 sum representing capitalized prospective income and 
 "water" in endless enterprises; its share in the 
 "selling costs" of endless things and commodities 
 
90 THE HOUSING FAMINE 
 
 most of which may be very remotely related to the 
 materials used ; its share in idle plants and equipment 
 consequent upon the condition that prices must be 
 kept up by keeping production down ; its share in the 
 cost of strikes, lockouts and the restrictions upon the 
 production of labor ; its share in the losses due to the 
 unorganized condition of the entire building indus- 
 try, which uses the labor power of some trades not to 
 exceed half of the time all of these losses and many 
 more appear in the price of these municipal houses: 
 and it is said that they are built "at cost." 
 
 SUBJECT OF PROFITS COMES ON TO STAGE AGAIN 
 
 A little thought should make it plain that not very 
 much is to be gained by way of a reduction of selling 
 price until we develop an industrial system which 
 approaches its task directly. 
 
 Again Mrs. Wood notes the need of the elimination 
 of profit ; she says in reference to the British effort, 
 "they saw that for a considerable segment of the 
 population the element of profit must be eliminated 
 from housing if they are to be fitly housed." Again 
 I ask the same question that I asked in the previous 
 statement : if it is important to eliminate profit, why 
 stop at the elimination of merely one profit? Why 
 not attempt to eliminate the real waste in the build- 
 ing industry by organizing it? 
 
SHALL WE HAVE MUNICIPAL HOUSING? 91 
 
 TOPIC III 
 THIRD ARGUMENT 
 
 By John J. Murphy 
 
 GOVERNMENT COST GREATER THAN PRIVATE COST 
 PLUS PROFIT 
 
 Mrs. Wood's contention that municipally provided 
 houses would be supplied at cost, and that therefore 
 no loss of self-respect would be involved in using 
 them, breaks down before the fact that cost of con- 
 struction by Government would always be so much 
 higher than by private capital that rents for such 
 houses, if fixed on a cost basis, would be higher than 
 in privately constructed houses, and hence no prac- 
 tical benefit would ensue to the tenant. 
 
 WE GET NOTHING FROM GOVERNMENT GRATIS 
 
 Mrs. Wood seems to labor under the delusion that 
 we have free schools, libraries, concerts and city 
 water. I am sure on second thought she will recede 
 from this position. We pay for them all in taxes. 
 They are only nominally free. 
 
92 THE HOUSING FAMINE 
 
 HIGHER COST OF GOVERNMENT CONSTRUCTION INHER- 
 ENT IN SYSTEM, NOT MAINLY DUE TO GRAFT 
 
 I have not contended that municipal ownership 
 and operation has not its proper place, but housing 
 is not its function. Those who use services should 
 pay for them. Neither have I contended that all 
 officials were grafters; that is Mrs. Wood's inference. 
 The added cost of all Government work is due to 
 formalities and requirements over which the officials 
 have no control, and which we have found no means 
 of dispensing with. I do not admit any superiority 
 of foreign officials over our own. If the inside facts 
 of foreign administration were subjected to proper 
 accountancy examination, the conditions that I fore- 
 see here would be found abundantly there. 
 
 HOUSING NOT A PROPER GOVERNMENT FUNCTION 
 
 I am not taking ground against municipal owner- 
 ship and operation, but only against attempting to 
 extend it into a field where it cannot function prop- 
 erly. England has had vast experience and much 
 success in municipal ownership and operation, but 
 its housing programme has resulted in a colossal 
 fiasco. Why should we repeat it, and lose not only 
 money, but what is more precious, time, in attempt- 
 ing a proved impossibility? 
 
SHALL WE HAVE MUNICIPAL HOUSING? 93 
 
 ERROR AS TO EXCLUSION OF WATER AND 
 LIGHT BONDS FROM CITY DEBT 
 
 I believe that Mrs. Wood is mistaken as to the 
 exemption of water and light bonds from inclusion 
 in city debts. In some city charters there is the pro- 
 vision that bonds for water supply may issue even 
 though the debt limit is exhausted, but no more 
 bonds for any other public purpose can be issued 
 until the city's borrowing power catches up, which 
 is, of course, a different thing entirely from Mrs. 
 Wood's supposition. 
 
94 THE HOUSING FAMINE 
 
 TOPIC III 
 THIRD ARGUMENT 
 
 By Edith Elmer Wood 
 
 mr. murphy and the british housing programme 
 
 Mr. Murphy says he is enough of an opportunist 
 to favor municipal housing if it will work, if it will 
 provide us quickly with needed houses. He bases his 
 contention that it will not work on his assertion that 
 "The whole British housing programme has broken 
 down and seems doomed to utter failure/' quotes a 
 "kick" from the Manchester Guardian that only 300 
 houses of the thousands promised had so far material- 
 ized (date of January, 1920), and exclaims "And 
 this after three years of preparation and appropria- 
 tion.' ' 
 
 After Mr. Murphy's handsome acknowledgment of 
 my "greater acquaintance with the subject," I really 
 hate to point out that the present British Housing 
 Act only became law on July 31, 1919, the Acqui- 
 sition of Land Act was passed the following month, 
 and amendments to the Housing Act, found to be 
 necessary, were not secured till late in December. 
 This doesn't leave much of Mr. Murphy's three years. 
 
SHALL WE HAVE MUNICIPAL HOUSING? 9S 
 
 And to have actually finished even 300 houses out of 
 the 10,000 or more planned for Manchester, in the 
 midst of starting nation-wide projects for several 
 hundred thousand homes seems to me rather quick 
 work, in spite of the inevitable fault-finding of an 
 opposition newspaper. 
 
 WHY CROSS BRIDGES TILL WE GET TO THEM? 
 
 Mr. Ackerman points out again, quite truly, that my 
 proposals eliminate only the final profit. He asks 
 "Why stop at the elimination of one profit?" To 
 which I reply "Why not begin with that ? If it proves 
 enough, we can stop there. If it doesn't, we can go 
 
96 THE HOUSING FAMINE 
 
 TOPIC III 
 
 THIRD ARGUMENT 
 By Frederick L. Ackerman 
 
 MUNICIPAL HOUSING "AT COST " DOES NOT MEAN VERY 
 MUCH. WHY STIMULATE THE GROWTH OP CITIES AL- 
 READY TOO LARGE? 
 
 I assumed from the opening paragraph of Mrs. 
 Wood's first argument that she took the position that 
 if we could i ' dam the flow of modern tendency . . . 
 so as to halt the growth of cities/ it would not be 
 necessary to resort to municipal housing. Assuming 
 that she would later develop a programme for check- 
 ing the flow of population into urban centers, I 
 (wrongly) took for granted that municipal housing 
 was to be viewed as a temporary measure. 
 
 A LOOSE PHRASE 
 
 Again, I repeat that municipal housing is to be 
 viewed as a subvention to our wasteful modern in- 
 dustrial system, since by embarking upon such a pro- 
 gramme we engage to absorb the entire list of wastes 
 and losses to which I have repeatedly referred. All 
 
SHALL WE HAVE MUNICIPAL HOUSING 97 
 
 of these sundry wastes and losses appear, of course, 
 in the final price of the municipal house. Nowhere 
 in my argument have I used the phrase "at cost" 
 in the loose, meaningless way that Mrs. Wood re- 
 peatedly uses it. Municipal housing, carried out in 
 the manner advocated by Mrs. Wood, is not to be 
 looked upon as housing "at cost." 
 
 ATHY STIMULATE GROWTH OF CITIES? 
 
 As to congestion: I stated in my argument and I 
 repeat that a policy of municipal housing, once em- 
 barked upon, would of a necessity run in the direc- 
 tion of stimulating the growth of urban centers. 
 Nowhere in my argument have I dealt with the 
 problem of slum clearance and re-housing. In her 
 rebuttal, Mrs. Wood completely avoids my major 
 argument relative to the importance of not stimu- 
 lating the growth of urban centers. 
 
 I have not advocated anywhere in my argument 
 the abolition of cities. I have argued that any de- 
 liberate, collective act which aimed directly at stimu- 
 lating the expansion of cities was to be set down with- 
 out further argument as an act running counter to our 
 central purpose. Mrs. Wood has not met my argu- 
 ments in this respect. 
 
TOPIC IV 
 
 SHALL WE EXEMPT MORTGAGES AND 
 IMPROVEMENTS FROM TAXATION? 
 
TOPIC IV 
 FIRST ARGUMENT 
 By John J. Murphy 
 
 1. I favor exemption from taxation of incomes de- 
 
 rived from mortgages, and all new buildings 
 erected within three years for a limited period. 
 Remove the obstacles, and buildings will rise. 
 
 2. Mrs. Wood accepts this proposition with some 
 
 qualifications. For this small favor I am grate- 
 ful. 
 
 3. Mr. Ackerman thinks that an exemption is the 
 
 same as a subsidy. If you break a man's leg 
 and give him a crutch it is a subsidy. Would 
 it not have been better not to break it at all? 
 That would be an exemption. 
 
 THE MORTGAGE TAX DELUSION 
 
 The answer to the above question must be divided 
 into two parts : 
 
 (1) The effect of the Exemption of Income de- 
 
 rived from Mortgages on New Buildings. 
 
 (2) The Effect of the Exemption of New Build- 
 
 ings. 
 
 101 
 
102 THE HOUSING FAMINE 
 
 A mortgage is an instrument by which, in return 
 for a loan the owner of property pledges his property 
 for the return of the loan with such interest as may 
 be agreed upon. It has long been a popular delusion 
 that by taxing mortgages, we were getting money 
 out of the unpopular class known as money-lenders. 
 As a matter of fact, they always "passed the buck" to 
 the borrower. 
 
 THE BORROWER ALWAYS PAYS 
 
 Of course, we tried to stop this by putting a limit 
 on the interest which might be charged, but again 
 the law was circumvented, for the borrower, being 
 obliged to have the money, paid a " bonus' y to the 
 lender. Nominally loans are made to individuals 
 to-day at 6%, because that is the maximum rate that 
 the law allows in New York, but borrowers are 
 paying 8% or more actually another case where 
 attempted Government interference, however hu- 
 mane and well-meant, is nullified when it encounters 
 economic law. Capital has never been so plentiful 
 that it had to beg for employment, and until it 
 becomes so, taxes on mortgages will always be paid 
 by the borrower. 
 
 WOULD MAKE BUILDING LOANS CHEAPER 
 
 Hence, exemption of income derived from mort- 
 gages on new buildings would make loans for build- 
 ing cheaper and easier to get. In housing this 
 is very important. Practically everybody who 
 builds has to get a mortgage ta help " carry the 
 
EXEMPTING MORTGAGES AND IMPROVEMENTS 103 
 
 property." The number of people who own their 
 homes * i free and clear ' ' is small. If mortgage money 
 can be had, cheaper building will be easier. And 
 the difference will be more than the actual exemp- 
 tion capitalized, for investors are a little more will- 
 ing to invest in tax-free securities than in others. 
 Therefore, there can be little doubt that such exemp- 
 tion would be helpful as far as it goes. Those who 
 think that the benefit would go entirely to the lender 
 are mistaken. 
 
 EXEMPT NEW DWELLINGS FROM TAX 
 
 The effect of exempting improvements in general 
 from taxation is not a practical question at the 
 moment, though it would have beneficial results; 
 what is a practical question is the exemption from 
 taxation of new buildings designed for dwelling 
 purposes. It can hardly be gainsaid that the real 
 estate tax imposed on buildings is one of the most 
 serious obstacles now in the way of new construc- 
 tion. A new building to house 20 families will cost 
 at present prices $120,000.00, exclusive of the value 
 of the lot. 
 
 PRESENT SYSTEM EXACTS 25 PER CENT 
 OF GROSS EARNINGS 
 
 The tax on such a building in New York, exclusive 
 of the tax on the lot, would be about $3000.00, nearly 
 25 per cent of the gross annual revenue from the 
 building ; if this sum were remitted for ten to twelve 
 years, it would offer a handsome inducement to 
 
104 THE HOUSING FAMINE 
 
 builders to resume building, and would guarantee 
 them against loss due to falling prices of labor and 
 materials. For a while the result of such a policy 
 would inure to the benefit of the owner, but to the 
 same extent it would encourage others to make 
 similar investments, and competition would soon 
 bring down rents. 
 
 WOULD PROVIDE MORE HOUSES 
 
 It would get us more houses, which is the main 
 aim of our inquiry, and it is the only policy which 
 can be made operative at once, without delay, and 
 without raising questions which the Courts would 
 ultimately have to settle. It would to all intents 
 and purposes be a subsidy, but it would be a subsidy 
 which could not be misapplied or squandered or used 
 for political or profiteering purposes. 
 
 STUPID TAXATION THE MAIN OBSTACLE 
 
 We hear much contemptuous reference to the law 
 of supply and demand, in these days but it operates 
 just the same. Of course, it can be interfered with 
 by Government or monopoly. Government by its 
 stupidity in taxing the things that people want, and 
 that poor people, especially, want, has brought about 
 a state of things where poor people have never had 
 decent and adequate housing. All that is necessary 
 is that Government should stop obstructing; if this 
 is done, and there is still a housing shortage, we can 
 then consider what further to do, but until this is 
 done, there is no use in trying artificial methods to 
 overcome the scarcity. 
 
EXEMPTING MORTGAGES AND IMPROVEMENTS 105 
 
 TOPIC IV 
 FIRST ARGUMENT 
 
 By Edith Elmer Wood 
 
 1. Tax exemptions can be made mildly helpful in 
 
 stimulating building. Unless supplemented by 
 other measures they are hopelessly inadequate. 
 
 2. The form especially advocated by Mr. Murphy is 
 
 highly objectionable. It subsidizes the builder 
 and landlord at the expense of the taxpayer. 
 
 3. Mr. Ackerman postpones tax reform till the mil- 
 
 lennium. 
 
 TAX EXEMPTION A SUBSIDY 
 
 The exemption of mortgages and the exemption 
 of improvements are two distinct matters that must 
 not be confused. There is also the preferential 
 exemption, much used abroad, but hardly known 
 here. 
 
 In general, tax exemption is disguised subsidy, 
 either from the state, which foregoes a portion of 
 its income, or to one group of tax payers at the 
 expense of another group. It may sometimes be 
 desirable, but at least let us have clear thinking and 
 act with our eyes open, 
 
106 THE HOUSING FAMINE 
 
 EXEMPTION OF IMPROVEMENTS 
 
 The partial or complete exemption of improve- 
 ments (i.e. buildings) from taxation has been much 
 talked of, and to some extent practiced in the United 
 States and Canada. The effect appears to be good, 
 but no millennium has resulted. The total amount 
 of taxes collected remains the same, but laying them 
 exclusively on land encourages building by making 
 it expensive to hold land idle. The nearer the tax on 
 land comes to absorbing its total rent value (the ideal 
 of the single taxers) the more forcible will be the 
 encouragement. Most economists agree that it is in 
 the public interest to accord improvements some 
 degree, at least, of exemption. The proposal was 
 turned down in the report of the Committee on 
 Taxation of the City of New York in 1916, but a 
 strong minority favored it. 
 
 There is a danger in exempting improvements, 
 which is pointed out by Carol Aronovici in his 
 Housing and the Housing Problem. 1 Unless a city 
 is protected by zoning provisions covering height of 
 buildings and percentage of area that may be built 
 on, the effect of laying the whole tax on land will 
 be to encourage congestion. That is, in a predom- 
 inantly three-story district, for instance, with land 
 taxed on that basis, there is a strong temptation 
 to build four, five or six stories, and to cover as 
 much as possible of the lot since the tax will remain 
 the same. Where zoning is already in force, as in 
 New York, this objection disappears. 
 
EXEMPTING MORTGAGES AND IMPROVEMENTS 107 
 
 The exemption of improvements, if safe-guarded 
 by zoning provisions, would exert a helpful influence 
 in reducing the present abnormal scarcity of high- 
 priced dwellings. Its effect on solving the problem 
 of the workingman would be slight, since it would 
 not cheapen house construction. His only chance 
 to benefit would be indirectly, through the removal 
 of some of the better-to-do to other quarters and 
 a consequent lessening of competition for what 
 remained. 
 
 EXEMPTION OF MORTGAGES 
 
 The much discussed exemption of mortgages from 
 state and federal income tax, either complete or with 
 a $30,000 or $40,000 limit, is clearly a subsidy, as it 
 is a proposal to reduce state and national income 
 by the amount of the exemption. 
 
 If it is to be done, what form shall it take ? Shall 
 all mortgages be exempt? Or only mortgages on 
 dwellings? Or only mortgages on a certain class 
 of dwellings? 
 
 If all mortgages are exempt, the house famine 
 will profit little, since there is more money to be 
 made in other forms of building. If mortgages on 
 all dwellings are exempt, workingmen will profit 
 little, except indirectly, as already described. If the 
 exemption were for mortgages on dwellings which 
 were not to rent for more than $30 a month, say, 
 in the large cities, or $20 in small towns, there might 
 be created a fringe of profit that would induce a 
 trifle of building. The matter is problematical. 
 
108 THE HOUSING FAMINE 
 
 PREFERENTIAL EXEMPTION 
 
 The European method referred to is preferential 
 exemption, with the declared object of encouraging 
 the building of workingmen's houses. It is always 
 an indirect subsidy, although not always a permanent 
 one. 
 
 In Great Britain, in 1913, 5,607,275 dwelling 
 houses were exempt from inhabited house duty. 
 
 On the continent, much fewer exemptions are 
 made, but the exemption is dependent on standard, 
 and is, therefore, particularly beneficial. Thus, in 
 Belgium, tax exemptions amounting to about 50 per 
 cent, are granted workingmen's houses which obtain 
 the certificate of their local housing board that they 
 comply with the standards prescribed. 
 
 Total tax exemption for dwellings of approved 
 type and below a certain rental is common in Ger- 
 many for a number of years, usually 12. France 
 grants partial tax exemption under rather strict 
 conditions of standard and rental. In Italy there 
 is a total exemption of approved houses for 10 years. 
 Austria, Spain, Rumania, and some of the Swiss Can- 
 tons grant tax exemptions. Brazil gives a 15-year 
 exemption to companies building houses for working- 
 men. 
 
 It all helps. 
 
 1 Pp. 68, 69. 
 
 2 Housing of the Unskilled Wage Earner, Chap. V. 
 
EXEMPTING MORTGAGES AND IMPROVEMENTS 109 
 
 TOPIC IV 
 FIRST ARGUMENT 
 
 By Frederick L. Ackerman 
 
 1. Tax exemption of income from mortgages a very 
 
 dubious proposal. To be viewed as a subsidy 
 to financial business system. As a subsidy not 
 sufficient to stimulate building. Single tax pro- 
 posal upset by system of price competition. 
 Proposal dodges the real issue. 
 
 2. Mrs. Wood agrees that it is a subsidy: says it 
 
 would help. Help what? I ask. 
 
 3. Mr. Murphy completely ignores the economic con- 
 
 ditions which lead him to advocate the use of 
 subventions. 
 
 Under this question it seems pertinent to first dis- 
 cuss that measure upon which so many rest their 
 hopes, viz., the tax exemption of income from mort- 
 gages. This measure looking toward the reduction 
 of the income tax naturally comes in for almost 
 universal approval; and of course it is asserted by 
 all its advocates that such action would immediately 
 start the flow of loan credit in the direction of build- 
 ing homes for the wage worker. 
 
110 THE HOUSING FAMINE 
 
 A DUBIOUS PROPOSAL 
 
 But in view of the condition that the great field 
 of industrial enterprise is now and has been return- 
 ing by way of dividends, stock bonuses, etc., after 
 all taxes are deducted, a far greater return upon 
 capital invested than is ordinarily to be expected 
 from homes built for the wage worker in view of 
 this condition of fact, it is not likely that such a 
 move would amount to more than a gesture of good 
 intention. I would not place a very large wager on 
 such a dubious proposal in view of the present cost 
 of building and the condition that rents in general 
 are now far below the return which must be had 
 from new buildings in order to make them show a 
 bare interest return. 
 
 NOT EVEN A SUFFICIENT SUBSIDY 
 
 But speculation concerning the outcome of this 
 rather dubious suggestion is somewhat beside the 
 point when the matter is viewed from the angle of 
 the significance attached to such an act. With in- 
 come taxes as now fixed, to exempt the income from 
 mortgages of a certain class is to subsidize the sys- 
 tem of production as now carried on. It is a prop 
 to that system of investment for profit which has 
 failed to produce homes while it produces factories 
 for the production of all sorts of less vital things. 
 It gives no aid to the processes (technological) of 
 production; it does nothing to free those processes 
 
EXEMPTING MORTGAGES AND IMPROVEMENTS 111 
 
 from the hampering conditions of price competition ; 
 it eliminates none of the waste. The whole list of 
 lost motions and useless services performed in the pro- 
 duction, sale and distribution of commodities which 
 go into the building of homes all these are left to 
 be absorbed by the last of the line the ultimate 
 consumer. But there is one Jfching to be said in 
 favor of the plan to exempt the income from building 
 mortgages, it would be likely to disclose the futility 
 of such an act because of the reasons above stated, 
 thus bringing us one step nearer to gaining an 
 insight into the cause which is at the root of the 
 condition of house shortage. 
 
 The question implies the application of the single 
 tax, although it is not at all clear that the question 
 is to be construed in this manner. Under the present 
 economic system of taxation, the act of exempting 
 mortgages and improvements from taxation would 
 not stimulate building even in theory. For what 
 stimulates building under the present economic sys- 
 tem is the reasonable assurance of a favorable rela- 
 tion between cost of building and expected income. 
 It should be obvious to any one that under present 
 conditions no such results may be expected. The 
 suggestion falls by the same argument as was used 
 in connection with the exemption of the income of 
 mortgages from taxation. 
 
 It is important to here note that the theory of 
 the single tax taxing land in order to bring it 
 into use fails to take into account that under our 
 economic system production is considered in terms 
 
112 THE HOUSING FAMINE 
 
 of profits and not in terms of goods. We might 
 tax land with a view of producing beans or tene- 
 ments or some other commodity, but paying the taxes 
 would depend upon whether there was a favorable 
 market, that is to say, a demand for these particular 
 commodities at a good price. The system of com- 
 petition in terms of price again obstructs. 
 
 The statements denying the advantages to be 
 gained from exempting mortgages and improvements 
 from taxation are based upon the conditions that 
 such an act, under the working of our financial 
 system, is to be viewed as a subvention to the finan- 
 cial business system which operates against the build- 
 ing of homes. The wastes and curtailments are 
 allowed to remain. 
 
 What scheme of taxation should be employed in 
 conjunction with a system of production which aimed 
 at the production of goods instead of profits, is 
 beside the point until we are provided with such a 
 system. 
 
EXEMPTING MORTGAGES AND IMPROVEMENTS 113 
 
 TOPIC IV 
 SECOND ARGUMENT 
 
 By John J. Murphy 
 
 HALF-HEARTED APPROVAL 
 
 The proposition to exempt mortgages and improve- 
 ments on real estate from taxation receives favorable 
 consideration at the hands of my opponents. The 
 worst that Mr. Ackerman says of it is that it is 
 dubious; while Mrs. Wood finds something to com- 
 mend in it. But I am not content with these half- 
 hearted concessions. I entirely concede that in 
 amount, the money which would be saved to in- 
 vestors by the exemption from income tax of money 
 invested in mortgages, might be small, but in finan- 
 cial affairs even small differentials count consider- 
 ably in the final determination of where money will 
 be placed. And it is intolerable, at a time when 
 public need is so great, that the government should 
 act in any way to repress necessary investment in 
 housing. 
 
 EXEMPTION OF BUILDINGS FROM TAXATION 
 
 It is, however, to the other proposal, the exemp- 
 tion of buildings, especially dwellings, from taxation 
 
114 THE HOUSING FAMINE 
 
 that I pin my strongest hopes of speedy relief. 
 Capital, by which I mean wealth ready for invest- 
 ment in productive enterprises, was never more 
 abundant than now. It is seeking and finding oppor- 
 tunities in all directions. It goes where there is the 
 best security and the largest returns. 
 
 DIVERTED TO PRODUCTION OF LUXURIES 
 
 It has been diverted into the production of luxuries 
 and non-essentials by the large profits which they 
 pay, and yet nearly a billion went into contracts 
 for dwelling houses in 1919, the biggest year by 
 nearly 100% ever known in the building business 
 in the United States. Clearly this sum, big as it is, 
 is not enough to make up for the two lost years in 
 building construction, 1918 and 1917. It must be 
 stimulated further and the way to do it is to take 
 off the embargo now put on building by the tax 
 on improvements. The idea is not a new one. Syd- 
 ney, New South Wales, is perhaps the most conspicu- 
 ous example of a large city in the American sense 
 of the word large, which has decided that it is a 
 suicidal policy to tax buildings while the people are 
 in serious need of them. 
 
 NOT THE SINGLE TAX 
 
 After bringing in the same objection to this pro- 
 posal that he does to the others, namely that it props 
 the system of investment for profit which he would 
 destroy, and which I would retain, until some other 
 
EXEMPTING MORTGAGES AND IMPROVEMENTS 115 
 
 equally potent human motive can be set up in its 
 place, Mr. Ackerman says that the proposal implies 
 the application of the single tax. Just where he 
 finds a warrant for this idea I am unable to say. 
 It is true that if improvements were exempt there 
 would be one tax less and to that extent, we would 
 have approached that much nearer to the single 
 taxer's ideal, but it would not be very far along 
 the road. I am unable to follow some of Mr. Acker- 
 man 's argument on the subject, due perhaps to an 
 unfortunate lack of training in metaphysics, but I 
 believe his meaning to be that taking taxes off new 
 buildings would not add to the profitableness of 
 building enterprises. I think the illustration in my 
 first statement on this subject covers that adequately, 
 and that I may leave to the reader whether he does 
 not think that an increase of 20% in the return from 
 an investment would be a great inducement to go 
 into such an enterprise. 
 
116 THE HOUSING FAMINE 
 
 TOPIC IV 
 SECOND ARGUMENT 
 
 By Edith Elmer Wood 
 
 exemption of mortgages 
 
 Mr. Murphy agrees with me in drawing a clear 
 distinction between exemption of mortgages from 
 income tax and exemption of improvements. We 
 seem also to agree that the former exemption " would 
 be helpful as far as it goes." 
 
 EXEMPTION OF IMPROVEMENTS 
 
 Rather mysteriously Mr. Murphy asserts, coming 
 to the second question, that the "exemption of im- 
 provements in general is not a practical question 
 at the moment, though it would have beneficial re- 
 sults.' 9 Please, if it would have beneficial results, 
 why isn't it practical? 
 
 EXEMPTION OF ALL NEW DWELLINGS 
 
 What Mr. Murphy does favor is truly extra- 
 ordinary a tax exemption for 10 or 12 years on all 
 new dwellings not dwellings for wage earners, not 
 dwellings whose rentals are subject to public control, 
 
EXEMPTING MORTGAGES AND IMPROVEMENTS 117 
 
 or whose profits are limited in any way just plain, 
 straight, unconditional subsidy (as Mr. Murphy 
 admits) to the speculative builder and landlord ! It 
 would be shockingly socialistic for the city to build 
 houses to rent to workingmen at cost, but it is all 
 right for it to hand out a fat slice of the people's 
 money to a group of business men, who, not so long 
 ago in New York, voted down a proposal to limit 
 themselves to a profit of 20 per cent net! 3 What 
 has become of laissez-faire and the sacred principle 
 of supply and demand? 
 
 WHAT IS GOVERNMENT STUPIDLY TAXING 
 THAT POOR PEOPLE WANT? 
 
 Finally Mr. Murphy leaves us to ponder this 
 cryptic statement: "Government by its stupidity in 
 taxing the things that people want, and that poor 
 people especially want, has brought about a state 
 of things where poor people have never had decent 
 and adequate housing." If they have never had 
 decent and adequate housing (a statement with 
 which I am entirely disposed to agree), how has it 
 been brought about by a stupid system of taxation? 
 And what is the specific stupidity referred to? 
 
 FOR WORKINGMEN 
 
 Mr. Ackerman makes a statement, with which I 
 am in full accord, and which I do not imagine Mr. 
 
118 THE HOUSING FAMINE 
 
 Murphy would dispute namely, that the exemption 
 from taxation of incomes from mortgages, which all 
 three of us agree is a subsidy, would not prove a 
 sufficiently large subsidy to start the building of 
 houses for wage workers. The moderate profit which 
 Mr. Murphy and I see in the measure lies in its 
 mild encouragement of building for higher paying 
 tenants. 
 
 TAX REFORM MUST WAIT ON INDUSTRIAL 
 REVOLUTION 
 
 Lumping mortgages and improvements together, 
 Mr. Ackerman decides that exempting them from 
 taxation would not stimulate building under the 
 present economic system. In other words, nothing 
 doing until we have that industrial revolution ! Nor 
 are we afforded any light as to what will happen 
 afterwards. "What scheme of taxation should be 
 employed in conjunction with a system of production 
 which aimed at the production of goods instead of 
 profits, is beside the point until we are provided 
 with such a system.' * 
 
 Mr. Ackerman surely demands faith from his fol- 
 lowers! We are to jump blind-folded out of our 
 present frying pan without even a theory as to where 
 we are to land! 
 
 s See The Tribune (New York), March 22, 1920. 
 
EXEMPTING MORTGAGES AND IMPROVEMENTS 119 
 
 * 
 
 TOPIC IV 
 SECOND ARGUMENT 
 
 By Frederick L. Ackerman 
 
 a SUBSIDY 
 
 It appears that it is unanimously agreed that, 
 under our present scheme of taxation, the action sug- 
 gested is to be viewed as a subsidy. Mrs. Wood 
 admits that it is a legitimate subsidy because "it 
 all helps.' ' Mr. Murphy admits it and advocates 
 it because he believes that such a subsidy could not 
 be squandered. 
 
 The admission that the exemption of mortgage 
 income from taxation is a subsidy is important ; for 
 questions immediately follow upon the admission. 
 A subsidy to what why the differential? Ap- 
 parently that which is to be subsidized is looked 
 upon as an institution of a highly beneficent char- 
 acter something worth retaining. 
 
 WHY A SUBSIDY? 
 
 So we return to the question: Why the need of 
 this differential? In arguing this point, Mr. Murphy 
 stages his discussion in the present. He ignores the 
 drift of affairs during pre-war days and the condi- 
 
120 THE HOUSING FAMINE 
 
 tion which obtained before the introduction of the 
 income tax. He forgets in this argument that it 
 has not paid (financially) for a long time to build 
 houses for the lower paid wage workers. One should 
 not forget this. 
 
 As a general proposition, it may be stated that 
 wages have not been sufficient to provide the lower 
 paid wage workers with an adequate home; ade- 
 quate homes cost too much. Of course there is a 
 discrepancy the condition is a matter of necessity 
 to the system of financial business which controls 
 the processes of production. For if all of our labor 
 power were to be directed into the actual produc- 
 tion of socially useful things, there could be no 
 margin of profit no profit upon investment no dis- 
 crepancy between pay and what that pay would 
 purchase. 
 
 Hence it should be apparent to any one that this 
 subsidy is to be viewed as a subsidy to that system 
 of financial business, the purpose of which is to main- 
 tain this discrepancy. 
 
 Mr. Murphy stresses the subject of taxation as 
 having caused the shortage of this particular class 
 of building. I ask: Has taxation caused a shortage 
 of other classes of buildings and does not the income 
 from mortgages upon other classes of buildings bear 
 the same rate of taxation? 
 
 ALL ABOARD THE WHIRLIGIG STARTS 
 
 In advocating the exemption from taxation of new 
 buildings designed for dwelling purposes, Mr. 
 
EXEMPTING MORTGAGES AND IMPROVEMENTS 121 
 
 Murphy says : "For while the results of such a policy 
 would inure to the benefit of the owner . . . com- 
 petition would soon bring rents down. ' Whereupon 
 building would cease. Then we might apply the 
 outright subsidy or state aid to stimulate building 
 so that competition might speedily bring rents down. 
 "Whereupon building would cease. Then what? 
 
 The discrepancy between wages and the rent of 
 new buildings is due to the condition that through 
 our system of financial business in control of produc- 
 tion, labor power is being diverted in ever increasing 
 volume from the production of socially useful goods. 
 Waste of one sort and another is being made a source 
 of profit. Why attempt to solve this problem by 
 these round-about make-believe methods of produc- 
 tion? 
 
122 THE HOUSING FAMINE 
 
 TOPIC IV 
 THIRD ARGUMENT 
 
 By John J. Murphy 
 
 WHY A SOUND, COMPREHENSIVE, ECONOMIC POLICY 
 IS NOT PRACTICABLE 
 
 I do not consider "the exemption of improvements 
 in general' ' a practical question at present, because 
 the public mind is dominated by the kind of "modern 
 thought* ' to which Mrs. Wood referred earlier, and 
 is quite incapable of imagining the ultimate benefits 
 to be derived from such a policy. As I am anxious 
 to get more houses now and not to undertake public 
 education in political economy, I only suggest those 
 things, which a moderate measure of common sense 
 without much study, will commend to a public which 
 has much to occupy its attention. 
 
 EXEMPTION BETTER THAN SUBSIDY 
 
 I think I have already covered Mrs. Wood's objec- 
 tion to my proposal about exemption of new build- 
 ings. If there were no other way than by sub- 
 sidizing builders, I would do it, but I pointed out 
 wherein my plan differs from a subsidy, and I am 
 content to let it rest there, with merely this addi- 
 tional statement, that in my mind it is merely allow- 
 
EXEMPTING MORTGAGES AND IMPROVEMENTS 123 
 
 ing landlord and tenant to retain what never should 
 have been taken away from them. It would not 
 benefit the people who refused to limit themselves 
 to 30% profit, for those were the owners of old 
 houses which would not be affected by this proposal. 
 
 HOW GOVERNMENT STUPIDITY OPPRESSES THE POOR 
 
 Finally, Mrs. Wood, you ask: "What is the Gov- 
 ernment stupidly taxing that poor people want?" 
 and I answer "Houses ! old houses, new houses, tall 
 houses, short houses, places to live in, to work in 
 and play in and ultimately to die in. All these the 
 Government taxes as though they were evils. Won't 
 you concede that, unless its act is malicious, we are 
 moderate in calling it stupid?" 
 
 JUSTICE THE ONLY PERMANENT REMEDY 
 
 Mr. Ackerman's main contribution on this point 
 is that a subsidy is an additional reward to capital, 
 which is already getting too much. This point has 
 been discussed above, in dealing with Mrs. Wood's 
 objection. 
 
 I entirely concur in Mr. Ackerman's view that 
 inadequate wages lies at the root of the pre-war un- 
 satisfactory housing conditions, and that we must 
 establish a system which will insure every citizen 
 the full value of his labor and his fair share of 
 the social value which he helps to create, before the 
 housing problem can be permanently solved. For 
 the present I have preferred to deal with the imme- 
 diate provision of tolerable shelter for a steadily 
 increasing homeless multitude. 
 
124 THE HOUSING FAMINE 
 
 TOPIC IV 
 THIRD ARGUMENT 
 
 By Edith Elmer Wood 
 
 shall we subsidize to improve health 
 or to increase profits? 
 
 We are all agreed, mirabile dictu, that tax exemp- 
 tions are subsidies. I think I have made it suffi- 
 ciently clear that I dislike subsidies on principle, 
 but that if we are to have them, they should be 
 used for the benefit of those who need help most, 
 not for those who need it least. The tax exemption 
 subsidy can be used as a lever to raise the standard 
 of workmen's housing and thereby benefit the gen- 
 eral public health. It is sheer reckless waste to toss 
 it without condition, without discrimination, as Mr. 
 Murphy proposes, to the millionaire erecting a 
 palatial home for himself, and to the speculative 
 builder throwing together a flimsy, race-suicide apart- 
 ment house with an ornate front door. 
 
 THE TEMPORARY SHORTAGE SEEMS TO BE CURING 
 ITSELF WITHOUT SUBSIDIES 
 
 The average number of new dwellings built yearly 
 in the United States between 1910 and 1917 was 
 
EXEMPTING MORTGAGES AND IMPROVEMENTS 125 
 
 about 400,000. "1918 saw only 20,000 new houses 
 built. 1919 was a little better with 70,000. " 4 We 
 assume that Mr. Murphy is correct in his statement 
 that nearly a billion dollars worth of dwellings were 
 contracted for during that year. If so, it certainly 
 indicates (making all due allowances for increased 
 building costs) a phenomenally rapid resumption of 
 home building taking place without artificial stimula- 
 tion. It goes far to justify my belief that we do 
 not need to become unduly excited over the present 
 shortage of high-cost and middle-cost dwellings, in 
 spite of the outcry raised by those who are tem- 
 porarily inconvenienced. 
 
 4 See Article by Wharton Clay in Engineering and Contracting, 
 March 24, 1920. 
 
126 THE HOUSING FAMINE 
 
 TOPIC IV 
 
 THIRD ARGUMENT 
 
 By Frederick L. Ackerman 
 
 MUCH TALK ABOUT A PHRASE. WANTED A LITTLE 
 MORE COMMON SENSE 
 
 It was not my intention in my first argument to 
 confine the issue to the single tax. I then stated 
 my position definitely with respect to this matter. 
 I confined my argument to showing that the several 
 measures were all of relatively little importance 
 under the working of the present economic indus- 
 trial system. In dealing with the subject of taxa- 
 tion, I take the ground that the solution of the 
 problem under discussion is to be found through 
 effectively dealing with the broad subject of the 
 unearned increment and profit, not as applied to 
 profit in land alone but as applied to the general field 
 of investment. 
 
 what's in a name anyway? 
 
 Both of my opponents seem to be greatly inter- 
 ested in what they refer to as my " Industrial Revolu- 
 tion.' ' They are apparently much more interested 
 
EXEMPTING MORTGAGES AND IMPROVEMENTS 127 
 
 in this phrase than they are in the common sense 
 idea around which my entire argument revolves. I 
 am dealing with the elimination of wastes, losses, 
 curtailments and cancellation of effort which arise 
 out of our system of competition in terms of price. 
 
 IS IT NOT COMMON SENSE? 
 
 My proposal may be termed an industrial revolu- 
 tion if one so chooses. I admit that what I propose 
 involves a fundamental change. But what of that? 
 Thus far neither of my opponents have dealt with 
 my major contention which I insist upon is nothing 
 but common sense. I am seeking to install a reign 
 of common sense into our system of production and 
 distribution by eliminating that one factor which 
 so operates as to inhibit us from producing for use. 
 
TOPIC V 
 HOW SHALL WE DEAL WITH CONGESTION? 
 
TOPIC V 
 FIRST ARGUMENT 
 
 By John J. Murphy 
 
 1. Private appropriation of annual land value is chief 
 
 obstacle in the way of curing congestion. Zon- 
 ing regulation is the best practical plan yet de- 
 vised, but it has not stood the test of wide' 
 application. 
 
 2. Mrs. Wood enumerates the methods now in vogue 
 
 for dealing with the difficulty, but without prov- 
 ing that they are at all commensurate with the 
 task. 
 
 3. Mr. Ackerman's remedy is "a redistribution of 
 
 Economic Power,' ' which may mean anything. 
 
 HAVE CITIES PASSED POINT OF MAXIMUM 
 ECONOMICAL POPULATION? 
 
 That population in our great cities has been so 
 congested as to produce great evils is too generally 
 recognized to be questioned. Indeed, the steadily 
 mounting figures of city budgets justify the pre- 
 sumption that we have passed the point where con- 
 centration of population produces economy of effort 
 
 131 
 
132 THE HOUSING FAMINE 
 
 or service, and that henceforth additions to popula- 
 tion may be a financial loss rather than a gain. If 
 this assumption should prove true, it will take care 
 of itself. 
 
 PRIVATE APPROPRIATION OF RISE IN LAND VALUES 
 DEFEATS BENEFITS OF IMPROVED TRANSPORTATION 
 
 Already among city dwellers a back-to-the-land 
 sentiment is growing, not to such an extent as the 
 forward-to-the-city movement which the war has 
 started in rural districts, but still of considerable 
 proportions. Naturally one thinks of improved 
 transportation as one of the most necessary aids 
 in solving the congestion problem, but so far it has 
 not been as helpful as was once hoped. Extending 
 railway systems causes lots to rise in price enormously 
 along their lines, and so the dweller in the suburbs 
 finds, when commutation fare and oth^r expenses 
 incidental to living out of town are considered, that 
 it is as economical for him to pay high rent in the 
 city as to pay lower rents in the suburbs. He gets 
 more light, air, and pleasanter surroundings for a 
 few hours a day, but that is all. 
 
 WHY TOWN PLANNING FAILS 
 
 The town planning idea has many attractive pos- 
 sibilities, but unless some great corporation, or some 
 branch of the Government can be induced to do these 
 things, no very material benefit comes. "When such 
 projects are launched by cities as desirable possibili- 
 
HOW SHALL WE DEAL WITH CONGESTION? 133 
 
 ties, the prices of land within the area rise more 
 than adjacent property, and so the town planners' 
 scheme becomes merely an adjunct to some real estate 
 boom. 
 
 LAND SPECULATION AND DEPOPULATION 
 
 If the people or their representatives could under- 
 stand or devise a method of applying to public use 
 the social increment due to such improvements, the 
 problem would soon be solved, but as long as holders 
 of vacant lands see an opportunity to make profits 
 out of land developments, so long will the solution 
 of the problem of congestion be the dream of well- 
 meaning visionaries. That the evil menaces the very 
 life of our nation and civilization no one can ques- 
 tion. Children are not merely undesirable ; they are 
 impossible at present prices for living space. If they 
 do happen to get born, there is no place for them 
 to grow and develop. 
 
 FUTILITY OF REGULATION 
 
 There are those who see in this, as in other cases, 
 a call for Government intervention. Let the city or 
 the state prescribe the maximum number of people 
 to the acre, of stories to the house, of houses to 
 the block. Such regulations might be adopted for 
 new sections, but the old areas would remain un- 
 changed, and congestion, which like cancer, is a 
 fatal disease, will continue to grow and harden. 
 Condemnation of congested areas and reconstruction 
 
134 THE HOUSING FAMINE 
 
 by the city authorities is sometimes urged as a 
 remedy, but in a city like New York the task has 
 become too colossal to be seriously considered : noth- 
 ing but some new process as powerful as that which 
 drew the population together can disintegrate it. 
 
 WILL THE DISEASE CURE ITSELF? 
 
 Perhaps that process, in spite of the apparent 
 growth of the cities, is now under way. Prices of 
 food products are rising from numerous causes, but 
 not the least among them is the withdrawal of labor 
 from rural sections. Agricultural pursuits, like many 
 other kinds of necessary and useful labor, have been 
 treated with contempt by dwellers in cities. The 
 really necessary occupations are coming into their 
 own, and the merely ornamental are being relegated 
 to their true position. The probabilities seem to be 
 that the logic of events will take care of the conges- 
 tion problem by forcing people back into the primitive 
 extractive industries. 
 
HOW SHALL WE DEAL WITH CONGESTION? 135 
 
 TOPIC V 
 FIRST ARGUMENT 
 
 By Edith Elmer Wood 
 
 1. We must prevent the spread of congestion by 
 
 town-planning, zoning, cheap transportation, 
 and public ownership of land. We must destroy 
 existing congestion by wholesale slum clearance. 
 
 2. Mr. Murphy thinks congestion is a dispensation 
 
 of Providence. 
 
 3. Mr. Ackerman regards cities as the handiwork of 
 
 the Evil One. 
 
 PREVENTION AND CURE 
 
 Congestion is a relative term. It means a gather- 
 ing together in a mass. We are talking about con- 
 gestion in a pathological sense a gathering so ex- 
 cessive as to endanger health, clog transportation, 
 pervert economic values and put obstacles in the 
 way of family life. Can we prevent it where it has 
 not yet occurred? By persuasion? Or by fiat? Can 
 we undo it where it has occurred? And how? 
 
 PREVENTION BY EDUCATION 
 
 Prevention by the educational method is the best 
 of all, so far as it goes, and forms the necessary 
 
136 THE HOUSING FAMINE 
 
 basis of any other method; for unless a favorable 
 public opinion is created, coercion is out of the 
 question. 
 
 So by all means, let us have back-to-the-land move- 
 ments and garden city movements, and let us keep 
 hammering at manufacturers till they see it is to 
 their interest to put their plants where land is cheap 
 and plentiful and where they can have a well-housed 
 and therefore stable labor force within walking 
 distance of their work. 
 
 PREVENTION BY INDUCEMENT 
 
 Let us do all we can to make country life attrac- 
 tive enough to hold the young people on the farms. 
 Let us multiply cheap transportation to open up 
 suburban areas to the city dweller. 
 
 Much is done in Europe by specially priced work- 
 men's trains at certain hours of the day. In Bel- 
 gium, for instance, along with the housing loans, 
 this system has drawn thousands of city workmen 
 into the country, whence they go to their work every 
 morning on a train which carries them for only a 
 fraction of the regular fare. 
 
 PBEVENTION BY TOWN PLANNING AND RURAL DEVELOP- 
 MENT. ZONING. 
 
 All these methods are good, but they are not 
 enough. We must, as we want our country to thrive, 
 at least call a halt on the further progress of con- 
 gestion. Fortunately, town planning will do it. But 
 
HOW SHALL WE DEAL WITH CONGESTION? 137 
 
 there is no time to lose. Every un-built-on urban 
 and suburban area must be town planned, every 
 rural area must be included in a rural development 
 scheme, and there must be no corner left in which 
 unregulated congestion can occur. This will require 
 state-wide town planning and development laws 
 (since we cannot have national ones), and they must 
 be mandatory, or the communities which need them 
 most will neglect to use them. No one will be harmed 
 except the exploiter. Legitimate property values 
 will be conserved, as well as human life and happi- 
 ness. 
 
 Zoning regulations divide cities into districts 
 where varying heights of buildings are permitted 
 and varying percentage of lot may be built on. These 
 regulations are not retroactive. They affect future 
 building only. Their function is to prevent conges- 
 tion from spreading beyond the bounds, and within 
 those bounds beyond the degree it has already at- 
 tained. Districting by use, or the protection of 
 residence districts from invasion of factories and 
 business, is also helpful. 
 
 PREVENTION BY CITY OWNERSHIP OF LAND 
 
 The tendency to speculate in land, to run up the 
 price of suburban tracts as soon as a new transit 
 system makes it available for dwellings, till it is as 
 dear as the city land it ought to relieve and eventu- 
 ally as congested, is something that can be held in 
 check if we choose to do it. 
 
138 THE HOUSING FAMINE 
 
 German cities have solved the problem by quietly 
 buying up land as opportunity offered, both within 
 and without the city. Ulm owns 80 per cent of its 
 area, but that is an extreme case. Even a 10 per 
 cent holding of suburban land will check the activi- 
 ties of the real estate promoter very materially. 
 
 We cannot do this without amending our state 
 constitutions, nor without revising some of our con- 
 ceptions of municipal functions. But there is plain 
 business horse sense in the method, and there is a 
 quarter of a century of German experience in which 
 to study its workings. 
 
 CUKE BY SLUM CLEARANCE 
 
 Where excessive congestion already exists in its 
 most menacing form, there is no known cure except 
 through a major surgical operation. The only effec- 
 tive way to get rid of slums is for the city to buy 
 them up by the acre and clear them off. English 
 cities have been doing it for half a century, con- 
 tinental cities for more than a quarter century. In- 
 creasingly, of late years, instead of trying to re-house 
 the people on the same area, they have been trans- 
 planted to garden suburbs and the cleared land sold 
 for business purposes. 
 
 Slum clearance undertakings have lessened sick- 
 ness and inefficiency. They have cut death-rates 
 squarely in two. And some of them have, in addi- 
 tion, made an actual dollars-and-cents profit for 
 the city. And yet, we, the richest people in the 
 world, think we cannot possibly afford them. 
 
HOW SHALL WE DEAL WITH CONGESTION? 139 
 
 TOPIC V 
 FIRST ARGUMENT 
 
 By Frederick L. Ackerman 
 
 1. "Back to Farm" movement runs into an economic 
 
 difficulty. System of price competition "goes 
 round the end." Restrictive legislation runs 
 up a blind alley. Whole questions hangs on 
 financial industrial system. Solution: a redis- 
 tribution of economic power. 
 
 2. Mrs. Wood continues to ignore the economic 
 
 forces which suck people into cities. Advocates 
 a variety of palliatives of no consequence. 
 
 3. Mr. Murphy would "leave it to George/ ' 
 
 Popular opinion on this head runs largely in the 
 direction of "stimulating' ' farm ownership through 
 the use of state credit; or assisting the farmer in 
 various ways through such activities as those car- 
 ried on by the Departments of Agriculture, State 
 and Federal, etc. There are also schemes of rural 
 education organized with this end in view. 
 
 All of this effort is looked upon by most people 
 as of a beneficent character something to bo 
 promoted as a practical way of bringing about a 
 
140 THE HOUSING FAMINE 
 
 redistribution of population. A clue to what 
 animates such action on the part of dwellers in indus- 
 trial centers may be expressed by saying that it is 
 a great comfort to such to have wages up and the 
 cost of food down. 
 
 But under the guiding forces of business enter- 
 prise, operated through a system of price competi- 
 tion, what is certain to follow upon any considerable 
 increase in rural population or any considerable 
 increase of agricultural production, is to reduce the 
 price of what is raised on the farm. Precisely what 
 benefits would accrue to the rural population under 
 such a plan is not at all clear. This is pointed out 
 in order to reveal how it is that our entire economic 
 system is working at cross purposes and against any 
 such plan of action. That such is the case does not 
 hang upon economic theory. For so soon as an 
 agricultural group shows signs of organizing and 
 adopting the methods of the financial business sys- 
 tem which exercises control over industrial produc- 
 tion, and so soon as it is observed that such a group 
 (the rural community) is about to apply the prin- 
 ciples of price competition, and thus curtail output 
 in order to keep prices up all this due regard for 
 bringing about a redistribution of population 
 through bettering the conditions of the farmer goes 
 by the boards. It does not look as if the solution 
 of the problem was to be found along this line of 
 approach. 
 
HOW SHALL WE DEAL WITH CONGESTION? 141 
 
 RESTRICTIVE LEGISLATION IN A BLIND ALLEY 
 
 For half a century we have attempted to deal 
 with this problem within our cities by a variety of 
 restrictive legislative enactments such as tenement 
 house laws, zoning ordinances, etc. These are all 
 in the nature of disallowances of property rights. 
 But, on the whole, the right of the individual to 
 the benefit of any increase in property value which 
 may arise as a result of an increase of population 
 is not appreciably curtailed. To carry these restric- 
 tive measures beyond this point would be construed 
 as unconstitutional. Hence it would appear that 
 these laws can have little bearing upon this particular 
 question so long as we hold to our present concept 
 of what constitutes property rights. To frame 
 restrictive legislation of such a character as to make 
 it really effective in dealing with the problem of con- 
 gestion would amount to a disallowance of the right 
 to the unearned increment. So this problem, so far 
 as restrictive legislation is concerned, resolves itself 
 into a question of investment for profit. 
 
 QUESTION HANGS ON INDUSTRIAL SYSTEM 
 
 But returning to the question. How shall we deal 
 with congestion of population? The answer to this 
 vital question is not to be stated in simple terms. 
 The most that may reasonably be hoped for is a 
 clue to the riddle. This much may be stated: there 
 is not the slightest hope of changing the drift of 
 
142 THE HOUSING FAMINE 
 
 population which has been running toward industrial 
 centers, until the modern industrial system shall 
 have begun to move in the direction of decentraliza- 
 tion. 
 
 Precisely what changes may take place in the 
 future in the working of our intricate financial in- 
 dustrial system, no one may predict with any degree 
 of certainty: but it is asserted that no changes in 
 the direction of a decentralization of industry will 
 take effect which are not an outgrowth of the enter- 
 prise itself. That is to say, no political action can 
 possibly be effective, since to be effective in bringing 
 about the redistribution of population, the action 
 would have to make its appeal as a desirable business 
 proposition. At the present juncture, it can not be 
 stated in such terms. 
 
 But to bring this argument into more concrete 
 form, we may say that congestion of population is 
 a consequence of the concentration of industry. Of 
 course, there are other factors which operate in this 
 direction, but by and large, it is the sweep of modern 
 business enterprise, operating in control of the 
 machine process which sets in motion and sustains 
 the drift of population in the modern world. 
 
 Hence, given the present conditions, economic and 
 industrial, under which production is carried on, 
 it would appear that the only way to bring about 
 a redistribution of population would be to bring 
 about an equalization of investment opportunity. 
 That is to say, to equalize the earnings upon invest- 
 ment. 
 
HOW SHALL WE DEAL WITH CONGESTION? 143 
 
 Concentration of industry is consequent upon con- 
 centration of economic power through the agency 
 of loan credit and competition in terms of price. 
 Whether or not we may deal with the problem of 
 congestion of population depends in final analysis 
 upon whether or not we can effect a redistribution 
 of economic power. Again it looks as if our only 
 avenue of approach was the disallowance of invest- 
 ment for a profit. 
 
144 THE HOUSING FAMINE 
 
 TOPIC V 
 SECOND ARGUMENT 
 
 By John J. Murphy 
 
 BEGINNINGS OF CONGESTION IN EUROPE 
 
 Very little prospect of relief from congestion is 
 held out by either of my opponents' proposals. As 
 a matter of fact, modern congestion is due to easily 
 recognized causes. The situation in European cities 
 and in American cities is quite distinct. In Europe, 
 most cities hark back to an early time when defense 
 was a chief consideration ; the circular shape of most 
 cities there witnesses to the desire of their builders 
 to enclose the largest possible area within the small- 
 est defensible boundary. People preferred living 
 crowded within the walls to dying with plenty of 
 space outside. 
 
 CAUSES IN AMERICA 
 
 Few, if any, American cities were designed with 
 a view to military defense. They were built for 
 business purposes fortuitously, of course, for in their 
 beginning no one could tell for certain where a 
 city would be, or how it would develop. Hence they 
 
HOW SHALL WE DEAL WITH CONGESTION? 145 
 
 run to the rectangular. They afford more of the 
 artificial amenities of life than do rural districts 
 and the diversified occupations which they house 
 offer possibilities of earning a livelihood to all sorts 
 of people. 
 
 Consequently, the progressive-minded youth in 
 each generation abandon the ancestral homestead 
 to find jobs in cities, and those who succeed go back 
 and impress the stay-at-homes with their clothes and 
 their airs of easy living. As it is the quick-witted 
 and enterprising who are apt to go, the stay-at-home 
 population falls more and more below normal in 
 its standards. 
 
 INCREASING VALUE OF LAND 
 
 The result of this crowding into cities and towns 
 is increase in the price of land and those fortunate 
 enough to own farms in or near towns advertise 
 to all the country around the advantages of their 
 town as a place of residence, with the result that 
 prices rise and more advertising is done. Thus a 
 surplus population is formed and large scale manu- 
 facturing is developed which depends for its success 
 on abundant, cheap labor. 
 
 VALUES AND CORNS 
 
 My contention is that this condition can be held 
 within reasonable limits absorbing land values in 
 taxes as fast as they arise, so that no interest shall 
 arise in speculating in land. It must be clear to 
 
146 THE HOUSING FAMINE 
 
 all that as land rises in value, population must be- 
 come more dense in order to pay the rents which 
 such values necessitate. If we keep down the cause, 
 the effect will take care of itself. The evil has been 
 of slow growth, the cure must be slow, if it is to 
 be effected without catastrophe. Corns are slowly 
 acquired; cutting them, though necessary at times, 
 seems to encourage rather than discourage them; 
 proper footwear, or going barefoot seems the only 
 permanent way to eliminate them. There are many 
 analogies between social evils and corns which re- 
 formers would do well to study, and from which 
 they might derive wisdom. 
 
HOW SHALL WE DEAL WITH CONGESTION? 147 
 
 TOPIC V 
 SECOND ARGUMENT 
 
 By Edith Elmer Wood 
 
 individualism has no remedy to offer 
 
 I want to call the reader's attention to the fact 
 that although Mr. Murphy admits that "The evil 
 (of congestion) menaces the very life of our nation 
 and civilization, ' ' he offers absolutely no remedy for 
 this critical condition. So impotent is the philosophy 
 of individualism to cure the ills it has itself produced. 
 The best he can do is to hope that blind forces which 
 have so far set towards congestion, will turn around 
 by and by and set in the opposite direction. "The 
 probabilities seem to be," he tells us optimistically, 
 "that the logic of events will take care of the con- 
 gestion problem by forcing the masses into the 
 primitive extractive industries." Does he mean 
 when so much of the rural population has come to 
 the cities that the remnant can't raise enough food 
 to go around? That point is not reached yet, and 
 when it is, will only force back enough people to 
 raise the necessary food. So it affords no hope of 
 lessening the degree of congestion we now have. 
 
148 THE HOUSING FAMINE 
 
 THE UNEAKNED INCREMENT 
 
 Mr. Murphy does say one other thing: "If the 
 people or their representatives could understand or 
 devise a method of applying to public use the solid 
 increment due to such improvement, the problem 
 would soon be solved." This can only be a veiled 
 allusion to Mr. Murphy's well-known adherence to 
 the single tax doctrine, which he evidently regards 
 as beyond the intelligence of the people and their 
 representatives. Probably what keeps him from 
 advancing it openly is the consciousness of its incon- 
 sistency with the doctrine of individualism which 
 he is supporting. 
 
 CONGESTION MUST WAIT FOR INDUSTRIAL REVOLUTION 
 
 "There is not the slightest hope of changing the 
 drift of population which has been running towards 
 industrial centers, until the modern industrial sys- 
 tem shall have begun to move in the direction of 
 decentralization. \ % I hoped for a moment that Mr. 
 Ackerman had discerned Mr. Murphy's "logic of 
 events," and that between the two I might arrive 
 at an idea of what that beneficent thing was. But, 
 no Mr. Ackerman 's last words are: "It looks as 
 if our only avenue of approach was the disallowance 
 of investment for a profit," so evidently we must 
 not expect to lessen congestion till we have got rid 
 of our existing civilization. 
 
HOW SHALL WE DEAL WITH CONGESTION? 149 
 
 BUT WILL THAT HELP? 
 
 Just here a painful thought obtrudes itself. How 
 do we know that doing away with the profit system 
 will undo congestion? Why should it? If it wasn't 
 that such a lot of people actually like cities, actually 
 prefer them to small towns and country because 
 of movies, of shop windows, of the very prevalence 
 of their fellow beings there wouldn't be much con- 
 gestion to cure. There are jobs, wages, food, houses, 
 waiting in the country, and people won't go to them. 
 Why should they do so after Mr. Ackerman's revolu- 
 tion? And think how discouraging it would be if 
 we amputated a finger to cure a blister, and then 
 found the blister was ou another finger, after all! 
 
150 THE HOUSING FAMINE 
 
 TOPIC V 
 SECOND ARGUMENT 
 
 By Frederick L. Ackerman 
 
 MR. MURPHY SUGGESTS PATIENCE 
 
 If I get it, Mr. Murphy's argument may be sum- 
 marized by saying that if we are very, very patient, 
 the present financial system will ultimately so 
 operate as to remove all cause for worry. He says, 
 in effect " Leave it to George.' ' 
 
 Mr. Murphy presumes. He presumes that "we 
 have passed the point where concentration of popu- 
 lation produces economy of effort and service and 
 that henceforth additions to population may be a 
 financial loss rather than a gain." Now look! In 
 the very next paragraph he says that the "forward- 
 to-the-city-movement ,, is now running ahead of the 
 1 ' back-to-the-land sentiment. ' ' 
 
 "What does this mean? He states two conditions 
 of fact : The present condition as regards congestion 
 is to be rated as a losing game economically; but 
 we still prefer to play the game. By bringing these 
 two statements together he makes it quite plain to 
 anyone that economic ends and financial exigencies are 
 
HOW SHALL WE DEAL WITH CONGESTION? 151 
 
 not to be viewed as one and the same thing which 
 is precisely what I am trying very hard to make 
 clear. 
 
 HOW LONG MUST WE WAIT? 
 
 It may not be good from the standpoint of 
 economics to have congestion of population and slums 
 and abandoned farms but it is good for business 
 at least so much is to be gathered from the facts of 
 the case as presented by Mr. Murphy. It is true, 
 congestion may become so great as to become finan- 
 cially unprofitable to the individual who secures his 
 profit out of stimulating congestion. But how long 
 will we wait ? How much more congestion must we 
 stand? I think I see a reason here for suggesting 
 a disallowance of investment for a profit. 
 
 Mr. Murphy says: " Nothing but some process like 
 that which drew the population together can dis- 
 integrate it." How about suggesting a new process 
 unlike that which drew the population together if 
 we are to redistribute population? If concentration 
 of population was a consequence of concentration 
 of economic power, how about trying redistribution 
 of economic power as a means to this end? 
 
 I GROW SUSPICIOUS 
 
 Mrs. Wood's argument completely ignores the 
 causes which have operated to make people act as 
 they do in the modern world. "Prevention by educa- 
 tion.' ' I grow suspicious. For is it not true that 
 
152 THE HOUSING FAMINE 
 
 at the present moment forces are being marshaled 
 to " educate" everybody into believing that our 
 present financial business system is to be viewed as 
 the solid foundation of our national life? Is it 
 not also true that it is this complex mechanism which 
 has made for the present condition of chaos. 
 
 "Cheap transportation to open up suburban areas 
 to the city dwellers' ' is not much of a i 'solution' ' 
 if one happens to look upon such transportation as 
 largely waste. And town planning is set down by 
 Mrs. Wood as a way out. We have all been fooled by 
 this idea at some time in our study of the question. 
 Town planning is a technique. It is not a force. 
 The effect of concentration of economic power is 
 completely ignored by Mrs. Wood and Mr. Murphy. 
 So I ask: has this no bearing upon congestion of 
 population? Is it not the principal factor to be dealt 
 with? 
 
HOW SHALL WE DEAL WITH CONGESTION? 153 
 
 TOPIC V 
 THIRD ARGUMENT 
 
 By John J. Murphy 
 
 INDIVIDUALISM MISUNDERSTOOD 
 
 If individualism were responsible for bringing the 
 world to its present pass, it would have few ad- 
 herents, but alas, like Christianity and Democracy, 
 it has had more discussion than application, and 
 less comprehension than either. Mrs. "Wood does not 
 understand it, for she deems it to be inconsistent 
 with the single tax philosophy which is its highest 
 and most logical expression. Every single taxer 
 who understands his belief avows himself an in- 
 dividualist. He and his economic ancestors have 
 been trying for generations to keep Government 
 from muddling things with which it has no proper 
 concern, but socialistically minded people have always 
 said, ''there ought to be a law" to do this, that and 
 the other. 
 
 BOGUS INDIVIDUALISTS 
 
 Of course, there are pseudo-individualists who, 
 having possession themselves of great privileges cob- 
 
154 THE HOUSING FAMINE 
 
 f erred on them by government, say, "Now, we want 
 the Government to keep its hands off and not inter- 
 fere. ' ' Such were most of the men of the Manchester 
 school, who usurped, without deserving, the name 
 of individualists. Clearly, the man who accepts 
 favors from Government has no standing when he 
 protests against its interference. 
 
 URGING FACTS, NOT DOCTRINES 
 
 I preferred, in the discussion of the question of 
 more housing, to avoid the appearance of seeming 
 to urge any special "isms," because many people have 
 prejudices which close their minds to consideration 
 of suggestions, when they are labeled socialistic, 
 syndicalist, single tax. The great mass of people 
 who must settle public questions cannot take enough 
 time from earning a living to really learn what these 
 various philosophies involve. The question submitted 
 for their solution must be practical and definite. 
 
 PATIENCE NECESSARY TO ANY WISE SOLUTION 
 
 Mr. Ackerman accuses me of suggesting patience 
 in dealing with congestion. I admit it. It is neces- 
 sary in dealing with any economic difficulty. The 
 centripetal force of population has been intensifying 
 in every decade since we took our first census. All 
 efforts to modify it have so far made no impression 
 on its tightening coils. Great industries have moved 
 out of cities and taken employees with them, but 
 with little effect on intense crowding. No artificial 
 
HOW SHALL WE DEAL WITH CONGESTION? 155 
 
 plan can check this cancerous growth. It must be 
 attacked from the rural end. As we want more 
 houses, we must have more farms if we are not to 
 starve, and incidentally starve the world, which de- 
 pends on us for so much of its food. 
 
156 THE HOUSING FAMINE 
 
 TOPIC V 
 THIRD ARGUMENT 
 
 By Edith Elmer Wood 
 
 same old congestion, mr. murphy ! 
 
 Mr. Murphy thinks that congestion in European 
 and American cities is quite distinct; that it is due 
 in Europe to medieval crowding within walled 
 towns; and in America to the attraction which the 
 city has for the progressive minded rural youth, and 
 to the efforts of land owners to bring more people 
 together to buy lots, manufacturing growing up as a 
 result of surplus population. 
 
 So far as this single-tax explanation of congestion 
 is true of the United States, it is equally true of 
 Europe. There, as here, the over-rapid growth of 
 cities followed the development of machinery and 
 large-scale manufacturing, was accompanied by 
 speculation in land, and was fed by the cities' lure 
 for the young people. 
 
 Living conditions within the walls of medieval 
 towns were undoubtedly bad, but the walls have 
 nowise halted the spread of modern cities, and con- 
 gestion is as bad without as within them. The once- 
 
HOW SHALL WE DEAL WITH CONGESTION? 157 
 
 walled city of London is a very small area in the 
 heart of the great metropolis almost wholly given 
 over to business. Note also Paris and Berlin. Glas- 
 gow and Dublin, where congestion is greatest in the 
 United Kingdom, never had any walls, so far as I 
 recall, certainly not since they have been large cities. 
 The same holds for Liverpool, Birmingham, Man- 
 chester and many more. 
 
 WHAT IS THE MATTER WITH EDUCATION? 
 
 Why is Mr. Ackerman suspicious of educational 
 methods ? How, if not by educational methods, does 
 he intend to bring about the introduction of his new 
 industrial system? 
 
158 THE HOUSING FAMINE 
 
 TOPIC V 
 THIRD ARGUMENT 
 
 By Frederick L. Ackerman 
 
 In Mr. Murphy's argument, he gives some em- 
 phasis to my contention that it is our system of in- 
 vestment for profit (in this case confined to land) 
 which so operates as to result in the development 
 of urban centers. It appears, at least so far as land 
 is concerned that we are in agreement. Just why 
 Mr. Murphy should draw the line at land in his 
 consideration of this matter of unearned increment 
 the getting of something for nothing is not very 
 clear. I can not see, if it is a valid argument in 
 the case of land, why it is not quite as valid in the 
 case of other investments. So far as Mr. Murphy's 
 argument is concerned, it seems to me that my main 
 contention still stands. 
 
 WHAT MOST CITIES PRODUCE 
 
 It is clearly evident that Mrs. Wood does not 
 think that the modern industrial system (financial- 
 business in control of industry) is in complete con- 
 trol of affairs in general. She assumes that the 
 
HOW SHALL WE DEAL WITH CONGESTION? 159 
 
 state (political government) may do as it pleases 
 regardless of this system. I do not; so therefore 
 I repeat that a redistribution of population is not 
 possible until the modern industrial system shall 
 have begun to move toward decentralization. 
 
 I have taken for granted that a checking of the 
 flow of population into urban centers is desirable. 
 I say that a redistribution of population is desirable. 
 Mrs. Wood wants to know why I think the dis- 
 allowance of profit upon investment would undo con- 
 gestion. Well ! The urban center lives very largely 
 upon the profits derived from the production of 
 waste and socially useless commodities. Its activi- 
 ties consist very largely in socially useless services 
 (so-called).. It is busily engaged in a great variety 
 of enterprises devoted to exploitation of one sort 
 and another. Eliminate the system of investment 
 for a profit and the system of price competition and 
 events would soon move in the direction of a redis- 
 tribution of population which, by the way, is treated 
 by Mrs. Wood in her last paragraph as if it were 
 not so very desirable after all. 
 
TOPIC VI 
 
 HOW CAN LAND, LABOR AND MATERIALS BE 
 MADE AVAILABLE? 
 
TOPIC VI 
 FIRST ARGUMENT 
 By John J. Murphy 
 
 1. I favor the taxation of land values, adequate 
 
 wages based on cost of living, and recognition 
 of permanent wage scales, so that contractors 
 may operate without fear of loss. 
 
 2. Mrs. Wood seems but mildly interested in this 
 
 topic, for if her panacea, direct state or city 
 action, can be adopted, all such practical diffi- 
 culties will fade away like mists before the sun. 
 
 3. As in the millennium all the problems which this 
 
 topic confronts will have disappeared, Mr. 
 Ackerman is not interested in finding a way out, 
 at present. 
 
 LAND SPECULATION THE ENEMY 
 
 Naturally this proposition divides itself into three 
 parts : 
 
 As to Land : The quantity is ample and fixed, but 
 the supply is not always available, due to the expecta- 
 tion of owners that at a future time their land may 
 be sold at a profit. This mental attitude exists most 
 
 163 
 
164 THE HOUSING FAMINE 
 
 strongly in those parts of the world where the unused 
 land is assessed at a small fraction of its selling 
 value, or not taxed. In such places it costs little 
 to hold land idle or inadequately improved, and the 
 chance of a windfall is always there. It resembles 
 a lottery ticket before the prizes are drawn. It 
 gives its owner a sense of being in the game. 
 
 HOW LAND MIGHT BE CHEAPENED 
 
 This attitude operates powerfully against the use 
 of land around cities and lies at the root of the 
 land booms, which like cyclones, occasionally ravage 
 the country. If the policy were adopted of taxing 
 valuable land in such a way that its owner would 
 receive only the full value of his own expenditure 
 and labor upon it, or on account of it, he would not 
 be able to capitalize the so-called unearned incre- 
 ment, and so land for home-building would be every- 
 where easier to get, at prices which would be within 
 the reach of all. 
 
 LABOB TROUBLES 
 
 As to Labor: There seems to be no doubt that 
 the strained relations of capitalists and workmen 
 are now placing serious obstacles in the way of 
 producing houses. That there are faults on both 
 pides is not open to serious dispute. Labor organiza- 
 tions are often arbitrary and insistent on wasteful 
 methods, whereas employers' organizations have 
 shown themselves inhuman and inconsiderate when 
 
HOW CAN MATERIALS BE MADE AVAILABLE? 165 
 
 they have controlled the situation. The animosity 
 between the opposing forces is one of the most men- 
 acing of our national problems. 
 
 NEED FOR CONCILIATION 
 
 The only solution of the difficulty lies in conciliation. 
 Neither side can operate profitably without the other, 
 and while either can ruin the other, neither can 
 be saved without the other. The real enemy of the 
 true capitalist and the true laborer is the man who 
 is legally privileged to extract from both products 
 of their joint labor, without giving any return. 
 
 Employers who do not realize that in spite of 
 nominal high wages, the average workman is not 
 better off than before the war, stand in the way 
 of a real adjustment. Similarly, employees must 
 be made to understand that unless binding agree- 
 ments can be entered into concerning the normal 
 construction periods of buildings, contractors can- 
 not make prices and much work will be held up. 
 
 RAILROAD PREFERENCE FOR BUILDING MATERIALS 
 
 As to Materials: The causes of the shortage and 
 high prices of building materials are numerous. 
 Prices are from four to five times what they were 
 in the pre-war period. The most important cause 
 of the shortage is probably lack of adequate trans- 
 portation. The transportation systems of the United 
 States and Canada are insufficient to transport all 
 the traffic offered. Other classes of freight are 
 
166 THE ^HOUSING FAMINE 
 
 more profitable to handle, while the ratio of freight 
 paid to the total cost of the article is higher on 
 building materials than on commodities in general. 
 Therefore increase of freight charges on building 
 materials enhances the cost of construction greatly. 
 Some plan should be devised whereby the railroads 
 may be compelled to give preference to building 
 material over other articles not so essential. 
 
 MONOPOLY PRICES 
 
 Another and important contributing factor to the 
 high price of materials is the close combination which 
 seems to exist among the manufacturers of such 
 articles. It is not easy to suggest how this can be 
 broken down at the present time. The attempts 
 of the Government to depress combinations in re- 
 straint of trade are merely farcical. The public has 
 not benefited in the least by attempts to disintegrate 
 such combinations. Under the new forms they have 
 gone on just as before. It seems tolerably certain, 
 however, that if the opportunities for better trans- 
 portation were provided, more materials would be 
 sold, and as the most profitable prices at which goods 
 can be sold is somewhat below the maximum, prices 
 would tend to recede, when greater freedom of move- 
 ment is secured. 
 
 ECONOMY IN DESIGN 
 
 A third feature which may be considered here, 
 is the importance of economy in design that is, 
 
HOW CAN MATERIALS BE MADE AVAILABLE? 167 
 
 making material go farther in housing. There has 
 been in the past a good deal of wasteful designing 
 which employs material in the enclosure of space 
 not economically utilized. Skillful planning could 
 accomplish much in the improvement of this con- 
 dition. 
 
 As to the labor costs in the production of building 
 materials there is no question that they have risen 
 considerably. It is usually the lowest grade of un- 
 skilled labor which is employed in this class of 
 production, and the general labor shortage has 
 caused ingenious people to devise plans whereby 
 unskilled labor can be utilized for the production 
 of articles able to pay higher wages. It has there- 
 fore been very difficult to keep up the supply of 
 labor in these occupations. 
 
168 THE HOUSING FAMINE 
 
 TOPIC VI 
 FIRST ARGUMENT 
 
 By Edith Elmer Wood 
 
 1. I favor (1) taxing idle land into use, (2) dodging 
 
 labor troubles by adopting Labor's housing 
 programme, (3) procuring materials by state ac- 
 tion if necessary. 
 
 2. Mr. Murphy agrees with me on land, has little 
 
 to offer on labor, and is mistaken in his data 
 on materials. 
 
 3. Mr. Ackerman is still among the clouds. 
 
 land: by taxation and city ownership 
 There is, of course, no real shortage of land. Even 
 such congested cities as Boston and New York have 
 enough land within their borders to accommodate 
 their whole population in two-story, single-family 
 houses surrounded by gardens. It is the tremendous 
 value of the land that makes such use impossible. 
 The problem is to make the land available to keep 
 down its cost, to force it into, u^e, to prevent its 
 being cornered by speculators. 
 
 The measures advocated in connection with taxa- 
 tion and congestion are the ones that will help here. 
 Taxing idle land as heavily as improved land acts 
 as a strong deterrent to the man who holds it for 
 
HOW CAN MATERIALS BE MADE AVAILABLE? 169 
 
 a rise in price. The ownership of land by the city- 
 offers competition which is death to exploitation. 
 The two measures together form a very strong com- 
 bination. The development, in addition, of cheap 
 transportation to new outlying districts bought by 
 the city at farm prices, would offer a degree of 
 control that would go a long way towards solving 
 the land problem. 
 
 The land trouble has been with us for a long time. 
 It affects different communities very unevenly, but, 
 in general, under the laissez-faire system, seems to 
 be the price paid for prosperity. 
 
 Communities of the future may, if they will, avoid 
 the whole trouble and secure great benefits by ex- 
 ercising the foresight necessary to follow the simple 
 common-sense plan of the Committee on New Indus- 
 trial Towns. 1 Similar results are obtained by the 
 English garden city and co-partnership methods. 
 
 LABOR AND MATERIALS. THE WHOLE INDUSTRIAL 
 PROBLEM INVOLVED 
 
 The present shortage of labpr and of building 
 materials, in so far as it dates from the war, should,* 1 
 by now, have disappeared. The government em- c 
 bargo on private building ended long ago. The 
 chaotic condition of the labor market, in the build- 
 ing trades and in those trades which supply building 
 materials persist as part of the general industrial, 
 ferment the growing pains of post-bellum readjust- 
 ment. 
 
 We must trust to the good temper and basic com- 
 
170 THE HOUSING FAMINE 
 
 mon sense of employers and wage earners to arrive 
 at a modus vivendi. The sooner employers learn 
 that ante-bellum wage scales will never be restored, 
 the better for all concerned. The sooner they learn 
 that what labor wants is not simply higher wages, 
 which are too easily nullified by rising prices, but a 
 share of the profits of production, the sooner they 
 will make the necessary readjustment. For read- 
 justment is necessary. On the other hand, clear- 
 sighted labor men must show their fellows the very 
 definite limits that exist both to wages and to labor's 
 share of profits. There is no way of making 2+2 
 equal 5. "Where costs are too high, the public ceases 
 to buy the product. Where too large a share of 
 profit is claimed by labor, no one will take the risk 
 of investment and management. 
 
 HOW TO SECURE THE CO-OPERATION 
 OF ORGANIZED LABOR 
 
 The housing policy of the American Federation 
 of Labor offers a practical argument of no little 
 force in favor of state action, which, so far as 
 we know, has been entirely overlooked. For the 
 simple fact is that the adoption of a state action 
 policy would probably eliminate the labor problem, 
 which is one of the biggest obstacles to the resump- 
 tion of private building. 
 
 Here is the latest statement of labor's housing 
 programme : 
 
 "The Government should, therefore, inaugurate a 
 plan to build model homes and establish a system 
 
HOW CAN MATERIALS BE MADE AVAILABLE? 171 
 
 of credits whereby the workers may borrow money 
 at a low rate of interest and under favorable terms 
 to build their own homes. Credit should also be 
 extended to voluntary non-profit making housing 
 and joint tenancy associations. States and munici- 
 palities should be freed from the restrictions pre- 
 venting their undertaking proper housing projects 
 and should be permitted to engage in other neces- 
 sary enterprises relating thereto." 2 
 
 Isn't this to all intents and purposes, the pro- 
 gramme we have been advocating? Isn't it reason- 
 able to suppose that organized labor will try very 
 hard to make its own programme a success? Aren't 
 the leaders anxious to prove its practicability? Isn't 
 it altogether probable that a municipal housing 
 scheme would be put through with entire smoothness 
 where a commercial enterprise would encounter con- 
 tinuous rough sledding? 
 
 POSSIBLE GOVERNMENT ACTION IN REGARD TO 
 MATERIALS 
 
 Did insuperable difficulties in the way of obtaining 
 materials exist, it would always be possible to push 
 state action a stage farther back and control their 
 production, at least in so far as it was needful in 
 order to carry out state enterprises. "We do not 
 believe, however, that this would be necessary. Cer- 
 tainly there is no reason at present for doing more 
 than holding such a possibility in reserve. 
 
 1 See Publications of Committee on New Industrial Towns, 
 Richard S. Childs, Secretary, 381 Fourth Ave., New York. 
 
 2 American Federation of Labor Reconstruction Program, p. 12. 
 
172 THE HOUSING FAMINE 
 
 TOPIC VI 
 FIRST ARGUMENT 
 
 By Frederick L. Ackerman 
 
 1. Curtailing production everybody doing it. No- 
 
 body to blame. Plenty of land, labor and 
 materials available. Use handicapped by finan- 
 cial business system. Cannot be made suffi- 
 ciently available until system of co-operative 
 efforts succeeds system of price competition. 
 
 2. Mrs. Wood trusts and ignores the vital problem 
 
 of production and distribution. 
 S. Mr. Murphy discovers the enemy of the people. 
 Provides me with a good argument. Fails to 
 offer a remedy. 
 
 What is here said is not stated with a view of 
 attaching blame to any one or to any group of 
 persons. The acts referred to are one and all in 
 the nature of perfectly natural and to-be-expected 
 reactions to our surrounding economic conditions 
 entirely legitimate a necessary part of our scheme 
 of "doing things.' ' Under the workings of the 
 modern industrial system, land, labor, and mate- 
 rials serve as the material means by which we carry 
 
HOW CAN MATERIALS BE MADE AVAILABLE? 173 
 
 on business for a profit in terms of price. Carry-, 
 ing on business under conditions of price com- 
 petition is very largely a matter of controlling out- 
 put exercising a perfectly legitimate sabotage over 
 the processes of production. This well known fact 
 is here recalled with a view of stating that how to 
 do away with this systematic sabotage of produc- 
 tion is what underlies the problem of making land, 
 labor and materials sufficiently available for housing 
 needs. Expanding this question, the problem may 
 be restated as follows: 
 
 (a) How may we prevent land from being held 
 out of the market in order to secure a higher 
 price ? 
 
 (6) How may we free the processes (technological) 
 of production from the control of a system 
 of price competition, that is to say, how 
 may we organize production so that the 
 purpose shall be the production of a suffi- 
 cient supply of needed goods instead of 
 merely enough goods to keep the price up? 
 
 (c) How may we free labor from trade union 
 restrictions which look toward a curtail- 
 ment of production for the same reasons as 
 noted in the cases above? 
 
 PLENTY OF LAND, LABOR AND MATERIALS 
 
 This looks like a large order. It is; the question 
 constitutes the entire problem. There is plenty of 
 land available. Nearly every one knows, and th 
 
174 THE HOUSING FAMINE 
 
 experience of the war both here and in Europe demon- 
 strates conclusively that, if our technological knowl- 
 edge could be applied to the operation of existing 
 plants and equipment we could produce all that we 
 need of everything. Nearly every one knows that 
 there is plenty of labor power available if it could 
 be used and brought to bear directly upon the pro- 
 duction of useful commodities. These conditions are 
 sufficiently notorious to warrant no further talk 
 about it. 
 
 USE OF THESE HANDICAPPED BY SYSTEM 
 
 Our highly rated system of production is really 
 a system of cross purposes of self-imposed restric- 
 tions upon output of highly organized and blame- 
 less sabotage. In the face of a full knowledge of 
 these conditions, we hope against hope that some- 
 how, out of a readjustment of loan credit arrange- 
 ments and various means of make-believe production, 
 we may come by an adequate supply of happy homes 
 in wholesome surroundings. To hope for such a 
 result under the triple handicap imposed upon the 
 processes (technological) of production is very much 
 like hoping that a one-legged blind man dragging 
 a ball and chain might win a hurdle race. 
 
 The long accumulated house shortage the present 
 housing famine is but one of the symptoms that 
 the present economic industrial system is by degrees 
 breaking down. This is plain to all but the willfully 
 blind. But it is not generally admitted that the 
 
HOW CAN MATERIALS BE MADE AVAILABLE? 175 
 
 cause of this condition lies in the very nature of the 
 system itself. Must we go on with the dance until 
 the system of investment for profit and price competi- 
 tion shall have spent itself? 
 
 SOME CHANGES SUGGESTED 
 
 The gist of what is here offered on this head, 
 when formulated in terms of the present economic 
 industrial system, may be stated as follows : 
 
 1. To make land sufficiently available, disallow 
 
 speculation in land. 
 
 2. To make materials sufficiently available, trans- 
 
 fer the control over the industrial processes 
 from the field of finance to that of technology. 
 This may be accomplished by a disallowance 
 of the capitalization of prospective earnings 
 and the disallowance of investment for profit, 
 
 3. Labor will be made sufficiently available as a 
 
 consequence of accomplishing the above; that 
 is to say, labor could not then be employed iu 
 the production of useless commodities nor in 
 the production of waste nor in canceling its 
 own effort toward the production of vitally 
 needed goods. 
 
176 THE HOUSING FAMINE 
 
 TOPIC VI 
 
 SECOND ARGUMENT 
 
 By John J. Murphy 
 
 MB. ACKEEMAN CONJURES A VISION 
 
 On this topic Mr. Ackerman gives us the first 
 glimpse of his philosophy, and very interesting it is, 
 but he still leaves us in doubt as to the way in 
 which to get it. We have his water-color sketch 
 of the social structure that is to be, but where are 
 his plan and specifications? Between us and the 
 civilization which he paints stretches a chasm as 
 broad as the Amazon, and there is no sign of a 
 bridge, a tunnel or even a ferry boat. It is quite 
 true that specialization in industry, which promises 
 to elevate man by leaving him time enough to 
 cultivate his higher powers is turning him into an 
 automaton, which is spending all its energy in pro- 
 ducing things that it does not want to exchange for 
 the products of other automata making things they 
 do not want. Some of his questions I can answer : 
 
 TAX LAND VALUES 
 
 (a) We can prevent land from being held out 
 of the market for a higher price by carrying a little 
 
HOW CAN MATERIALS BE MADE AVAILABLE? 177 
 
 further the policy already pursued by so many of 
 our large cities of absorbing land rent in taxation. 
 No one will hold land for a rise if he knows that 
 he will not be permitted to appropriate the increment. 
 
 CAN MONOPOLY BE BROKEN 
 
 (b) This question can be simplified into the fol- 
 lowing: How can the grip of monopoly on production 
 be broken? If the sources of supply of all needful 
 things, which are now obviously controlled to an 
 extent of which few are aware, were compelled to 
 pay annually to the states and the nation the full 
 value of the special privileges they enjoy, their 
 power would soon be controlled, and they would 
 either disappear or become the useful servants of 
 the community. Of course, the space does not permit 
 the development of this argument, but I firmly be- 
 lieve the taxing power of the government can accom- 
 plish the needed reforms without revolution and in 
 orderly fashion. 
 
 MODERN SUPER-MONSTERS 
 
 (c) The laborer will be freed from labor union 
 restriction when society puts him in a position where 
 he can earn his livelihood without having to submit 
 to the caprices of an employer. The position in that 
 respect is growing better than it was, but a great 
 many people do not like it. The workman obeys 
 the labor union because it is the only protection 
 that he knows from the power of the employer, but 
 
178 THE HOUSING FAMINE 
 
 he would rather be free. But he can no more be free, 
 while the gigantic monsters, which we have legally- 
 created, walk the earth, than could his cave-abiding 
 forebears be in the days of the megatherium and 
 the brontosaurus. Nature was good enough to re- 
 move these excrescenses from the earth before our 
 day, but we have tried our hand at replacing them 
 and we have measurably succeeded. 
 
 " IT TOUCHES NOTHING WHICH IT DOES NOT 
 DEFORM " 
 
 I have little criticism to offer of Mrs. "Wood's 
 contribution on this subject, except that she insists 
 on injecting Government interference in at the end 
 of her suggestions. Government in the form of the 
 judge, the policeman, the tax-collector and possibly 
 the soldier we must have, but of its performance in 
 other fields the best summary and characterization 
 is, "It touches nothing that it does not deform/ 9 
 
HOW CAN MATERIALS BE MADE AVAILABLE? 179 
 
 TOPIC VI 
 SECOND ARGUMENT 
 
 By Edith Elmer Wood 
 
 where we agree 
 
 Taking up land first, I notice that Mr. Murphy 
 agrees with me in advising that it be taxed in such 
 a manner that the owner " would not be able to 
 capitalize the so-called unearned increment.' ' 
 
 As for labor, he has the same old remedy that I 
 offered myself good sense and mutual concessions. 
 It is perfectly good advice, if any one would only 
 take it! 
 
 THE FACTS ARE BAD ENOUGH 
 
 Coming to materials, I must question his figures 
 when he says they are four or five times what they 
 were in the pre-war period. He can doubtless point 
 to some particular commodity, like plate glass or 
 linseed oil, which has sky-rocketed to that extent, 
 but in general 100 per cent would cover the increase, 
 and in many places it is less. The Monthly Labor 
 Review issued by the U. S. Bureau of Labor Sta- 
 tistics, in the February, 1920, number, contains a 
 
180 THE HOUSING FAMINE 
 
 comparison of the cost of a typical 6-room American 
 home worked out for 1913 and for July, 1919. There 
 is a labor increase of 65 per cent and an increase 
 in cost of materials of 71 per cent. There has prob- 
 ably been a greater rise since July, 1919, than from 
 1913 to 1914, but not enough to carry us within 
 speaking distance of the Commissioner's figures. 3 
 
 CONSISTENT INDIVIDUALISM IMPOSSIBLE 
 
 I have no quarrel with Mr. Murphy's plan for 
 compelling the railroads to give priority to building 
 materials over everything except food and coal. It 
 might be a good idea for speeding construction 
 during the present emergency. But it seems curious 
 for an individualist an advocate of laissez-faire 
 to seek his remedies in additional government inter- 
 ference. As fast as he lifts one brake he applies 
 another. It only goes to show how impossible it 
 is to run our present-day world on consistently in- 
 dividualistic principles. 
 
 THREE EXCELLENT QUESTIONS 
 
 If Mr. Ackerman were as good at answering ques- 
 tions as he is at asking them, he would be entitled 
 to high rank among the benefactors of the human 
 race. Here are his questions: 
 
 1. How may we prevent land from being held out 
 of the market in order to secure a higher 
 price? 
 
HOW CAN MATERIALS BE MADE AVAILABLE? 181 
 
 2. How may we organize production so that the 
 
 purpose shall be the production of a suffi- 
 cient supply of needed goods instead of 
 merely enough goods to keep the prices up? 
 
 3. How may we free labor from trade union re- 
 
 strictions which look toward a curtailment 
 of production? 
 
 ANSWERS FAIL TO ILLUMINATE 
 
 The answers are somewhat disappointing. They 
 are: 
 
 1. Disallow speculation in land. 
 
 2. Transfer the control over the industrial proc- 
 
 esses from the field of finance to that of 
 technology. 
 
 3. Will follow in consequence of 2. 
 
 I suspect that by disallowing speculation in land, 
 Mr. Ackerman means much the same as Mr. Murphy 
 and I do, by our somewhat more definite language. 
 As for the rest, it is obviously the new industrial 
 system in a different verbal dress. And the rather 
 important question of how it is to be brought about 
 is still completely ignored. 
 
 1 See also Arthur Gleason writing in The Nation. April 17, 1920. 
 
182 THE HOUSING FAMINE 
 
 TOPIC VI 
 SECOND ARGUMENT 
 
 By Frederick L. Ackerman 
 
 WHY AUGMENT CONGESTION? 
 
 Here is plenty of grist to grind. Looks like the 
 entire problem. 
 
 Land plenty of it admitted. Eemedies Mrs. 
 Wood: taxing idle land municipal ownership of 
 outlying districts cheap transportation. Mr. Mur- 
 phy: a policy of taxing valuable land. Both sug- 
 gestions are formulated around the idea of con- 
 stantly expanding cities; their argument on this 
 head run in the direction of the sweep of population 
 into urban centers. Why augment this drift? Mrs. 
 Wood says that making labor and materials avail- 
 able constitute "the whole industrial problem. ,, 
 Right-O. "Chaotic conditions . . . growing pains of 
 post-bellum read justments. ' ' I do not so view it. 
 Looks as if system of make-believe production was 
 beginning to crack. 
 
 MRS. WOOD PINS HER FAITH 
 
 In reference to the relation between employers 
 and wage earners, Mrs. Wood's use of "we must 
 
HOW CAN MATERIALS BE MADE AVAILABLE? 183 
 
 trust, etc.," suggests the opening address of an in- 
 dustrial conference in which all grounds for a dif- 
 ference of opinion had been carefully eliminated in 
 advance of the discussions. 
 
 The facts of the case, as regards industrial rela- 
 tions, are not such as to warrant this summary and 
 optimistic dismissal of this matter. Events are not 
 moving in that direction; nor are there signs of 
 such a movement. Disposing of the labor problem 
 by state action in housing would certainly be an 
 easy way of disposing of it. I suspect that there 
 are conditions which make for industrial unrest 
 which would still hang 'round and annoy us. 
 
 MR. MURPHY BAFFLES ME 
 
 I am baffled. Mr. Murphy says: "The real enemy 
 of the true capitalist and the true laborer is the man, 
 who is legally privileged to extract from the products 
 of both the product of their joint labor without giv- 
 iny any return.' ' 
 
 THE NEW WHO'S WHO 
 
 I ask: Who is the (< true capitalist" who is the 
 "true laborer"? Why is any one "legally privileged 
 to extract . . . without giving any return"? I have 
 an idea : I think that Mr. Murphy has put his finger 
 on something a sore spot a very sore spot; and 
 the spot is a very large spot. It covers the whole 
 body of the financial-business industrial system so 
 to speak. I suspect that he has said what I have 
 
184 THE HOUSING FAMINE 
 
 been trying to say. So I ask a question or two; 
 who is this real enemy? what does he look like? 
 And in this connection, what is investment for a 
 profit and the capitalization of prospective income 
 if it is not a legal way of getting something for 
 nothing? 
 
 Mr. Murphy would provide a sufficient quantity 
 of material for the building of homes by differential 
 freight rates upon materials for certain buildings, 
 food and coal. Mr. Murphy, are you not interfering, 
 tampering with the laws of supply and demand? 
 Beware ! 
 
 I RETURN TO MY ONE-FINGER EXERCISE 
 
 But again I return to my one-finger exercise. Why 
 should our present financial industrial system be 
 maintained without change? We know that it can 
 only operate when it keeps prices up through holding 
 production down. What chance is there of making 
 labor and materials available by schemes of taxation, 
 transportation, etc., etc., when the whole financial 
 business system can only be rated successful (in 
 terms of price, which is the only way business rates 
 business) when it so operates as to produce less than 
 the actual needs? 
 
HOW CAN MATERIALS BE MADE AVAILABLE? 185 
 
 TOPIC VI 
 THIRD ARGUMENT 
 
 By John J. Murphy 
 
 GOVERNMENT SHOULD REPAIR THE DAMAGE CAUSED 
 BY ITS OWN ACTION 
 
 There is apparent agreement among us on the sub- 
 ject of land and labor. 
 
 I can point to many important materials which 
 have advanced as much as I said in my original 
 statement. As important an article as brick, which 
 sold before the war for $6.00 per thousand, alongside 
 the dock, is now up to $30 per thousand. Mrs. Wood 
 reproaches me with inconsistencies, because I demand 
 that Government, upon which she leans so heavily to 
 remedy all our ills, shall repair some of the derange- 
 ment which it created before and during the war. 
 
 NO INCONSISTENCIES IN URGING GOVERNMENT OWNER- 
 SHIP OF RAILROADS AS A PART OF AN INDIVIDUALIST 
 PROGRAMME 
 
 There is no inconsistency in an individualist favor- 
 ing railroad regulation, nationalization or operation. 
 All that he demands is that the Government shall 
 
186 THE HOUSING FAMINE 
 
 perform public functions and not demoralize private 
 activities by unskillful and often harmful inter- 
 ference. As both Mrs. Wood and Mr. Ackerman 
 stress this question, I may say that, assuming a situa- 
 tion in which transportation facilities have not kept 
 up with public need, it is entirely justifiable to adjust 
 existing facilities to the most pressing public needs. 
 One can never "tamper with the law of supply and 
 demand.' ' It can be obstructed, but always with 
 grave danger to the society that undertakes it. 
 
HOW CAN MATERIALS BE MADE AVAILABLE? 187 
 
 TOPIC VI 
 THIRD ARGUMENT 
 
 By Edith Elmer Wood 
 
 is goveknment only a necessary evil? 
 
 Mr. Murphy has very clearly formulated the in- 
 dividualist's distrust of Government in his closing 
 sentence : "Government in the form of the judge, the 
 policeman, the tax collector and possibly the soldier, 
 we must have, but of its performance in other fields, 
 the best summary and characterization is : 'It touches 
 nothing that it does not deform. ' ' ' Yet when talking 
 of municipal ownership, he said water, light and 
 transportation came within its proper field, though 
 they are clearly quite beyond the province of the 
 policeman and the tax collector. And he wants the 
 government to compel national banks to make long- 
 time housing loans. And what will he say of the 
 public schools, which some of us regard as one of our 
 best American achievements? Are our children "de- 
 formed by their touch V 
 
 I don't blame him in the least for not being con- 
 sistent. As I have said on various occasions, the only 
 really consistent individualist is the philosophic an- 
 
188 THE HOUSING FAMINE 
 
 archist who says all government is evil, and sticks 
 to it. 
 
 THE HOUSING PROBLEM IS ALL I CONTRACTED 
 TO SOLVE THIS TRIP 
 
 I agree with Mr. Ackerman in having no very- 
 high opinion of my bromidic suggestion of mutual 
 concessions to solve the labor problem. I don't 
 think I could rightfully be called upon to solve any- 
 thing so large, in a hundred words or so, incidental 
 to discussing housing. 
 
 I suggested that union labor's interest in the suc- 
 cess of municipal housing might help us to get houses 
 in that way more quickly than in another. Mr. 
 Ackerman surely did not think I meant to offer it as 
 an adequate cure for labor unrest in general? 
 
HOW CAN MATERIALS BE MADE AVAILABLE? 189 
 
 TOPIC VI 
 
 * 
 
 THIRD ARGUMENT 
 
 By Frederick L. Ackerman 
 
 MR. MURPHY EXPLAINS OUR ACTIONS: MRS. WOOD 
 WANTS SPECIFICATIONS 
 
 Mr. Murphy's second argument discloses that we 
 are of a similar opinion with regard to how the mod- 
 ern financial industrial system makes us all act; 
 apparently neither of us views our actions as of very 
 much benefit to any one. I refer here particularly to 
 his statement about the M automaton.' ' 
 
 What to do about it is the question. Mr. Murphy 
 proposes to absorb land rent and break monopoly by 
 taxation. I can not harness up these two suggestions 
 with his repeated demands for non-interference by 
 Government, nor for his plea for free competition in 
 terms of price and his readiness to fall back upon the 
 "law of supply and demand." 
 
 THE SAME OLD CONFUSION 
 
 I suspect that Mr. Murphy is seeking to give utter- 
 ance to that confused point of view which finds 
 expression in our attempt to regulate railroads, etc. 
 We hold so fast to our concept of property rights 
 
190 THE HOUSING FAMINE 
 
 that we render nugatory our attempts at control and 
 regulation. There is no middle ground. 
 
 The economic necessities of the present require a 
 revision of the institutions of rights and privilege. 
 This involves a change in the law with respect to 
 what constitutes property rights. Of course whether 
 or not we shall come to view this matter in this light 
 remains to be seen. Eefusing to so view the matter 
 will not make that which now seems necessary appear 
 any the less so. i 
 
 TIME NOT RIPE FOR COMPLETE SPECIFICATIONS 
 
 Mrs. Wood insists upon complete specifications for 
 my industrial system; space does not permit. What 
 have in mind may be glimpsed by a study of the 
 Building Trades Parliament in England. Not that 
 the plans developed by this Parliament strike at the 
 root of the whole matter ; but in aiming at the elim- 
 ination of the system of price competition and its 
 consequent waste; and also in aiming to use labor 
 continuously it may be said to move in the right 
 direction ; it is certainly worth studying. 
 
 Mrs. Wood continues to ignore the world of in- 
 dustry. Her argument therefore passes around the 
 mass of the problem; what she proposes could have 
 little or no bearing upon the situation. 
 
 All that I have attempted to demonstrate is that 
 the housing problem is primarily a problem of pro- 
 duction, and that its solution is not to be found 
 through resort to some more loan credit manipula- 
 tion. 
 
TOPIC VII 
 WHAT ARE THE FIRST STEPS? 
 
TOPIC VII 
 FIRST ARGUMENT 
 
 By John J. Murphy 
 
 1. I favor the removal of all the obstacles which 
 
 Government places in the way of house building. 
 This can be done at once. All the other pro- 
 posals involve years of delay. 
 
 2. Mrs. Wood would increase the number of commis- 
 
 sions, boards, officials, etc., whose recommenda- 
 tions and reports merely obfuscate the public 
 mind. 
 
 3. Mr. Ackerman's final word is, in substance, if you 
 
 want a house, go and build one. This seems the 
 only intelligible interpretation of building "for 
 use and not for profit.' ' 
 
 If a motor car is laboring up a steep hill with a 
 heavy load, and if the chauffeur should discover that 
 he had forgotten to take off the brakes which he had 
 applied previously while running down the steep 
 slope, his first action would naturally be to remove 
 
 193 
 
194 THE HOUSING FAMINE 
 
 the obstacle to his further progress. This illustration 
 fairly typifies our social situation at the present time. 
 At every point where Government touches housing, 
 it operates to discourage and repress it. Some re- 
 strictions in the form of requirements for light, ven- 
 tilation, sanitation, are of course, necessary, and 
 should not be diminished, even in the present crisis. 
 
 M GET OUT OF MY LIGHT " 
 
 The old Greek story of Diogenes and Alexander 
 is applicable here. Alexander hearing of Diogenes, 
 sent for him. The philosopher ignored the con- 
 queror's invitation. Curious to see the man who 
 dared ignore him, Alexander went to see him, and 
 found him occupying his well-known tub. To the 
 philosopher, still maintaining an attitude of complete 
 indifference, Alexander said: "Is there anything I 
 can do for you?" "Yes," said Diogenes, "you can 
 step aside, so the sun will shine on me." 
 
 HOW GOVERNMENT OBSTRUCTS 
 
 Alexander is the government, and Diogenes is the 
 public. Therefore, when we come to consider what 
 are the first steps to be taken by the community in 
 general, we must turn to Government, not for aid, 
 but to demand that it get out of our way. The 
 Federal Government raises building costs by keeping 
 out foreign material, the competition of which, in 
 normal times, would tend to reduce cost. By im- 
 
WHAT ARE THE FIRST STEPS? 195 
 
 posing taxes upon incomes derived from mortgages, 
 it reduces the amount of capital likely to be invested 
 in mortgages on buildings, which in turn, tends to 
 repress the production of buildings. The State does 
 its share in repression by collecting an income tax, 
 which bears on incomes derived from mortgages, and 
 by the small tax which it imposes on real estate, 
 which includes buildings. But it is when we go to 
 the city that we find the real lion in the path. 
 
 REAL ESTATE TAXATION 
 
 Cities raise the great mass of their revenues by 
 taxation upon real estate. A great many of them 
 assess property from eighty-five to one hundred per 
 cent of its value, and in general, the larger the city 
 the higher the percentage of assessment. In New 
 York a sum equal to twenty-five per cent of the 
 gross revenue from buildings is taken in taxation. 
 These revenues could be raised in other ways, which 
 would not militate against building construction, 
 and whether we are prepared to adopt such a policy 
 as a permanent feature of our political system or 
 not, taxes on new buildings should be repealed to 
 meet the present emergency. If Government re- 
 mitted for a period of ten years all the taxes which 
 now bear directly or indirectly upon dwellings, in- 
 vestment in that form of property would become 
 highly desirable, instead of extremely dubious, as it 
 is at the present time. 
 
196 THE HOUSING FAMINE 
 
 COMPETITION FOR CAPITAL 
 
 Capital is now being sought for many enterprises 
 that can give excellent security and large dividends. 
 It will not be drawn into housing, unless at least, as 
 good inducements are offered. 
 
 Additional support is lent to this policy by the 
 fact that in several states, in order to meet the emer- 
 gency, rents are being restricted. The inevitable 
 result of such restriction will of course be to dis- 
 courage investment in building. Therefore, addi- 
 tional inducement must be offered. I lay stress upon 
 this point to the exclusion of all others, because I 
 have, for a couple of years, been in contact with the 
 various proposals made to grapple with the emer- 
 gency appeals to wealthy philanthropists, to great 
 business organizations to provide homes for their 
 workmen, and such devices, and I can say with cer- 
 tainty that none of them has begun to solve the 
 problem. So far as they go they help, but to such a 
 small extent as to leave the main situation un- 
 affected. 
 
 BUILDING SHOULD BE MADE A PREFERRED 
 INVESTMENT 
 
 If we want adequate housing, we can only get it 
 by offering such inducements as will make it a pre- 
 ferred investment, and we can only do that in one of 
 two ways, by increasing rentals beyond the point 
 which will be within the reach of the average citizen, 
 
WHAT ARE THE FIRST STEPS? 197 
 
 or by remitting the penalties which we now impose 
 in the form of taxes on those who have temerity 
 enough to build dwellings for occupancy by others. 
 
 SIMPLICITY THE KEYSTONE OF EFFICIENCY 
 
 Perhaps some will underestimate the importance of 
 a proposal which is limited to a single policy when 
 many and complex solutions are proposed. "When 
 David met Goliath, a single stone properly directed 
 accomplished what more elaborate machinery might 
 have failed to achieve. In Aesop's Fables there is 
 told the story of the cat and the fox, comparing ex- 
 periences as to the best way of escaping the hounds. 
 The fox had many ingenuous stratagems by which 
 he bluffed his pursuers ; so far he had always escaped, 
 but the future was not certain. The cat was only 
 mildly interested. "True," said she, "I too have 
 often been chased, but I always run up a tree, and 
 then there's nothing to it" Simplicity is the key- 
 atone of efficiency. 
 
198 THE HOUSING FAMINE 
 
 TOPIC VII 
 FIRST ARGUMENT 
 
 By Edith Elmer Wood 
 
 lo I offer as an immediate programme (1) the crea- 
 tion of national, state and local housing com- 
 missions, (2) amendment of state constitutions 
 or passage of enabling acts to permit municipal 
 housing, (3) Postal Savings loans and others. 
 
 2. Mr. Murphy's measures will produce only ex- 
 
 pensive houses. 
 
 3. Mr. Ackerman advocates only the adoption of a 
 
 theory. 
 
 NATIONAL, STATE AND LOCAL HOUSING BOARDS 
 
 Perhaps the wisest first step in every state would 
 be what has been recommended by the Governor of 
 New York in a message to the legislature, the es- 
 tablishment of state and local housing boards to 
 serve as the machinery of administration, and at the 
 same time the means of public education. 1 It would be 
 well to make them housing and town planning boards. 
 The success of a housing programme depends (1) on 
 its own merits, (2) on the merits of those charged 
 
WHAT ARE THE FIRST STEPS? 199 
 
 with carrying it out, and (3) on the wide-spread and 
 intelligent public opinion that supports it. 
 
 The Belgian housing law of 1889 provides for 
 local housing boards, comites de patronage, reporting 
 annually to a national commission. The unpaid mem- 
 bers of these boards, reporting on local housing 
 needs, watching over the enforcement of the sanitary 
 laws, helping workmen to get housing loans and tax 
 exemptions, disseminating housing information, have 
 rendered an invaluable public service. France and 
 Italy have adopted the system and Great Britain has 
 adapted it. 
 
 "Within our states, there is no reason why state and 
 local housing boards should not bear to each other 
 the same relation as state and local boards of health. 
 
 Nationally, the best thing we can do, probably, is 
 to pass the Tinkham bill (H. R. 7014) to create a 
 Housing Bureau in the Department of Labor. Its 
 only function is to be a center of information, but 
 even so, it will be of great value. There is also a 
 bill introduced by Senator Kenyon, to establish a 
 temporary commission to report on the best methods 
 of providing credit for housing. This also is a stage 
 which it is probably necessary to pass through. 
 
 CONSTITUTIONAL AMENDMENTS AND ENABLING ACTS 
 
 The foregoing measures are purely preliminary. 
 And there are other preliminaries equally essential. 
 In many states constitutional amendments will be 
 necessary before we can have municipal housing. In 
 
200 THE HOUSING FAMINE 
 
 others, enabling acts will be sufficient. The ball, in 
 either case, should be set rolling. In some states 
 constitutional amendments will be necessary for the 
 use of state credit. 
 
 POSTAL SAVINGS LOANS 
 
 The use of federal credit, fortunately, requires no 
 constitutional amendment. 
 
 One source of credit has such extraordinary ad- 
 vantages that it stands out quite clearly as the first 
 to be tapped. As far back as 1913 a measure was 
 before Congress providing for housing loans from 
 Postal Savings deposits. It should be revived and 
 pushed through. This fund represents the savings of 
 working men and women and should be used for 
 their benefit instead of for that of the banks which 
 now profit from their low interest rates. The govern- 
 ment only pays the depositors 2 per cent interest. It 
 could perfectly well lend part of the money to work- 
 ingmen at 3 per cent for housing purposes and pay 
 all expenses of administration with the difference. 
 This is a much lower interest rate than could be pro- 
 vided in any other way at the present time. 2 
 
 It is to be regretted that the fund in question is 
 no larger $167,323,260 by the last report, June 30, 
 1919. Ten per cent of this less than $17,000,000 
 would not go very far in these days. Still, it would 
 be worth while to open up home ownership even to 
 5,000 or 6,000 families. And quite likely it would 
 be found safe to lend more than ten per cent. 
 
WHAT ARE THE FIRST STEPS? 201 
 
 AMENDMENT OF THE FEDERAL FARM LOAN ACT. 
 NATIONAL AND STATE HOUSING FUNDS 
 
 If the Federal Farm Loan Act were amended to 
 include housing loans, a considerable amount of cap- 
 ital might be attracted at a 5 per cent rate. A fed- 
 eral housing fund, procured by bond issue at the 
 present time could hardly charge less. It might pos- 
 sibly be floated at 4%. State housing funds pro- 
 cured by bond issue would undoubtedly have to 
 charge a higher rate of interest, which would vary 
 substantially in different states. Wherever cheaper 
 funds can be tapped, it should be done. Some states 
 have insurance funds in connection with the Work- 
 men's Compensation Act. A fair percentage of these 
 funds should be invested in housing loans. The 
 funds of the German Old Age and Invalidity In- 
 surance Institutes are used very extensively for 
 housing loans. There is no reason why savings banks 
 should not be required to invest a certain proportion 
 of their deposits in housing loans at a very small 
 advance in interest rate on what they pay their de- 
 positors. 
 
 All these provisions should be carefully guarded so 
 as to benefit those for whom they were intended 
 the lower-paid wage earners and not add to the 
 profits of the speculative builder. 
 
 1 See also Report of the Housing Committee of the Reconstruc- 
 tion Commission of the State of New York, March 26, 1920. 
 
 2 See Housing of the Unskilled Wage Earner, pp. 229, 266-7. 
 
 3 See Housing of the Unskilled Wage Earner, pp. 263-272. 
 
202 THE HOUSING FAMINE 
 
 TOPIC VII 
 
 FIRST ARGUMENT 
 
 By Frederick L. Ackerman 
 
 1. Eliminate system of price competition and organ- 
 
 ize production and distribution upon co-oper- 
 ative basis. Produce for use and not for profit. 
 Relation of milk business to babies and housing. 
 
 2. Mrs. Wood advocates variety of measures of 
 
 make believe production. Continues to ignore 
 concentration of wealth as most important fac- 
 tor. Curtailment of production would continue 
 as now. 
 
 3. Mr. Murphy also fails to deal with the all im- 
 
 portant factor but he recognizes it and says so. 
 
 Stated in terms of the housing problem, the next 
 step should seek to : 
 
 (a) Turn the never ceasing flow of population from 
 farm to industrial center back upon itself or 
 in less Utopian terms, arrest the flow. 
 
 (6) Arrest the tendencies within urban centers 
 toward an ever increasing degree of conges- 
 tion, 
 
WHAT ARE THE FIRST STEPS? 203 
 
 (c) Provide adequate homes in adequate surround- 
 ings for all. The argument heretofore ad- 
 vanced has denied: 
 
 (1) The validity of the theory of subvention 
 
 (e.g.) such as have been resorted to in 
 Europe in an effort to affect the aims as 
 above stated. 
 
 (2) That the aims as set forth are to be achieved 
 
 through the workings of our present eco- 
 nomic industrial system as it has thus far 
 run its course in the United States. 
 
 The next step consists in making a decision as to 
 which road we shall follow in extricating ourselves 
 from the present muddled state of affairs. One 
 leads toward Government subvention aimed at sup- 
 porting the present economic industrial system; the 
 other takes the direction of leading to the complete 
 reorganization of that system. The choice here made 
 is expressed by the latter. 
 
 We may now restate the problem in terms of in- 
 dustrial production. Our aims now appear as fol- 
 lows: 
 
 (a) "To eliminate those practices of business com- 
 petition which curtail the output or, by dupli- 
 cation of equipment and cancellation of effort, 
 increase the labor and material cost of the 
 product.' f 
 
 (6) To arrest the diversion of labor and resources to 
 useless or socially superfluous purposes. 
 
204 THE HOUSING FAMINE 
 
 To do away with the vast amount of waste and 
 the canceled effort, is not a matter which may be 
 approached by piece-meal process. If we approach 
 this matter by way of " combination/ ' operated in 
 restraint of trade as must be the case under the 
 present economic system, we quickly discover that 
 it does not help in the least besides such action is 
 disallowed by the courts. Obviously this is not the 
 way out of the muddle. 
 
 ^EEDS VS. FINANCIAL EXPEDIENCY 
 
 We are seeking to effect industrial combination in 
 the sole interest of technological needs instead of in 
 the sole interests of financial expediency. That is to 
 say, we are seeking to produce useful goods. Surely 
 there can be no harm to any one in expressing such 
 a desire. But this simple, obvious common sense 
 statement of the case takes on a different color when 
 it is stated in terms of action. For what this means 
 is no less than the disallowance of investment for 
 profit. 
 
 This proposal is not a "business proposition' ' true 
 enough; for investment for a profit is what makes 
 the wheels go round in business. But it is a pro- 
 duction (technological) proposition; for it is invest- 
 ment for a profit which sets in motion the whole 
 system of price competition which results in waste, 
 sabotage and a cancellation of effort. 
 
WHAT ARE THE FIRST STEPS? 205 
 
 MODERN BUSINESS A CURIOUS ACTIVITY 
 
 Thinking as we do in terms of " business' ' it is not 
 likely that we will take kindly to this step proposed. 
 But the absurdity of the situation in which we have 
 placed ourselves with respect to producing what we 
 must produce may be illustrated by a heading which 
 appeared in a New York paper of recent date. The 
 heading related to an order issued by a milk dis- 
 tributing corporation to the farmers to the effect that 
 the production of milk should be curtailed in order 
 to keep prices up. The heading read: "Too mucin 
 milk to sell but not enough to drink/ 9 This described 
 accurately the situation both as regards the children 
 in the city and the investment for a profit system 
 which controls the industry. Everybody acted quite 
 properly in this matter ; under the system no blame 
 is to be attached to any one. 
 
 But lifted out of its complicated financial setting 
 of make believe production, this human interest in- 
 cident, revealing the underlying principle upon 
 which our modern industrial system goes at its task 
 of providing for the needs of a people, should appeal 
 to any one as a tragic enterprise. So it is. 
 
 In this incident, we have revealed the nature of 
 the housing problem. For it is by this system of 
 curtailment, restriction, cancellation of effort as re- 
 gards the use of land, the production of materials, 
 the rendering of services and the construction of 
 buildings, that we come by congestion of population, 
 inadequate houses and a shortage of houses, It is 
 
206 THE HOUSING FAMINE 
 
 not the State that has failed; it is modern business 
 enterprise. 
 
 NOT ALTOGETHER A MATTER OF CHOICE 
 
 Whether the losses, wastes and cancellations of 
 effort may be eliminated depends, for the time being, 
 upon the attitude of those in control of business and 
 financial interests towards the disallowance of invest- 
 ment for a profit. To decide against such a "next 
 step" will not dispose of the matter. The step sug- 
 gested will have to be taken, there is no doubt, for 
 the present economic system is due to collapse under 
 the constantly increasing weight of its own useless, 
 non-productive motions and cancellations of effort. 
 
WHAT ARE THE FIRST STEPS? 207 
 
 TOPIC VII 
 SECOND ARGUMENT 
 
 By John J. Murphy 
 
 EVOLUTION OR REVOLUTION 
 
 Candor compels the statement that under this head 
 my opponents have offered little that is practical, and 
 what they offer that is practical seems to be wrong. 
 Mr. Ackerman indicts the social order once more and 
 points to its wastefulness and inefficiency. Much of 
 all that he says may be conceded without bringing 
 us any nearer to the question how to get more houses. 
 Clearly, we cannot wait until a majority of the people 
 or their representatives come around to his way of 
 thinking. We will have a solution or a revolution 
 sooner. 
 
 ACQUISITION OF PROPERTY THE DOMINANT MOTIVE 
 
 Common experience teaches us the truth which lies 
 at the basis of economics, that man seeks to satisfy 
 his needs and desires with the least possible exertion. 
 Such being the fact, he has always wanted to possess 
 those things which will enable him to induce or com- 
 pel others to minister to his needs. In a material 
 
208 THE HOUSING FAMINE 
 
 way, those things are what we call property. To the 
 extent that this tendency in man causes him to serve 
 others, in order that others may serve him, it is en- 
 tirely conducive to the general well-being. Even 
 when men compete with one another for the chance 
 to serve each other in order that they may be served 
 in return, no harm is done. But a new situation 
 arises, when through social ignorance some men 
 are permitted to become possessed of certain kinds of 
 property which are not the product of any one's ser- 
 vice, and are permitted to exact service from others 
 without rendering equal service themselves. This 
 condition lies at the base of the social evils of which 
 Mr. Ackerman complains, but it is not going to be 
 altered until men perceive it clearly. 
 
 THE THEORY WILL NOT WORK 
 
 As for Mrs. Wood's suggestions under this head, 
 there is little to be said against them. There is little 
 against her theory but its ill-success. Of the creation 
 of new governmental machinery there is no end. It 
 will soon be true to say (as we said of European 
 peasants that each man worked with a soldier 
 strapped on his back) that each of us will soon be 
 working with an official seated on his shoulders. 
 Even the red tape they will use will be a serious 
 charge in this day of costly cotton. Europe has been 
 trying to pay Paul without robbing Peter for gen- 
 erations, but the plan has not worked. America, 
 without any housing commissions, has had better pop- 
 
WHAT ARE THE FIRST STEPS? 209 
 
 ular housing than Europe has ever dreamed of, 
 except for the limited wealthy class. That is because 
 we have had a measure of freedom here. If we look 
 to government rather than to ourselves for solution 
 of our problems we shall be in a bad way. 
 
 GOVERNMENT NOT CONSTRUCTIVE 
 
 f Jhe nature of government is preventive, not con- 
 structive; inhibitive, not directive; when it abandons 
 its true function it is often merely destructive. It 
 is forced to lay down general rules which work grave 
 injustices in particular cases. It is never wiser than 
 some man and is often more foolish than a multitude. 
 Even its benevolence has disastrous results some- 
 times, which fairly parallel the well-known story 
 of the elephant which had struck up an acquaintance 
 w T ith a setting hen. Noting one day that she had 
 left her eggs, the kindly quadruped tried to replace 
 her. The animal's motives were most creditable, 
 but the results were deplorable, showing that some- 
 thing more than power and good intentions are 
 necessary to achieve desirable results. Government 
 is more often the expression of the collective ignor- 
 ance and prejudice of the mass than of its collective 
 wisdom. Whenever there is unsatisfied effective 
 demand, supply rushes to meet it; if government 
 will only stand aside, the two will meet. 
 
210 THE HOUSING FAMINE 
 
 TOPIC VII 
 SECOND ARGUMENT 
 
 By Edith Elmer Wood 
 
 good as far as they go 
 
 We now have the programme of the individualists 
 complete. Let us sum it up : 
 
 1. Take the tariff off building materials. This is, 
 
 fairly enough, the lifting of a brake. It will 
 be hard to lift, for not only will the business 
 interests affected object strenuously, but 
 American labor is pretty well persuaded that 
 it needs a tariff wall to keep up wages. 
 
 2. Take the tax off of income from mortgages. 
 
 This is another brake that may legitimately 
 be lifted. 
 
 3. Tax vacant land into use. This is the applica- 
 
 tion of a brake, not the removal of one. 
 
 4. Compel the railroads to grant priority to build- 
 
 ing materials another brake applied. 
 With all these recommendations, I am reason- 
 ably in accord. I feel sure some would be helpful, 
 and should be glad enough to see the others tested. 
 But they are merely auxiliary. As a complete pro- 
 gramme, they would be pitifully inadequate. 
 
WHAT ARE THE FIRST STEPS? 211 
 
 OFFERING TRIBUTE TO THE BARBARY PIRATES 
 
 So Mr. Murphy must feel, for he lays most em- 
 phasis on his utterly shocking proposal to subsidize 
 landlords at the expense of other taxpayers. When 
 discussing tax exemptions, his proposal was that new 
 dwellings be tax-exempt for 10 or 12 years. His 
 proposal, now, apparently, is to exempt all dwellings 
 for 10 years. " These revenues could be raised in 
 other ways," he says. How, for instance? And 
 would the people to whom the burden was to be 
 transferred be apt to accept it meekly? 
 
 Supply and demand are indeed moribund when 
 their apostle has to galvanize them into an appear- 
 ance of life with such batteries of state action! 
 " Hands off, and the devil take the hindermost" 
 was brutal, but at least, those who preached and 
 practiced it did not use to ask for alms! 
 
 Mr. Murphy is afraid we shall underestimate the 
 importance of his proposal. Not I, for one. I con- 
 sider it as revolutionary as Mr. Ackerman's and 
 much more immoral. 
 
 THE MIND CURE FOR HOUSING TROUBLES 
 
 Mr. Aekerman says that "the next step" should 
 do three things : 
 
 1. Arrest the flow of population from farm to in- 
 
 dustrial center. 
 
 2. Arrest the tendencies within urban centers to- 
 
 ward an ever-increasing degree of congestion. 
 
212 THE HOUSING FAMINE 
 
 3. Provide adequate homes in adequate surround- 
 ings for all. 
 
 That would certainly be only the vernacular is 
 adequate to express our feelings some step! The 
 giant of our childhood, with his seven-leagued boots, 
 was a piker in comparison. "We should have been 
 content to devote a life-time of steps to accomplish- 
 ing half of that. 
 
 But our hopes of a miracle are short-lived, for 
 we are told, a few lines farther along that "The next 
 step consists in a decision as to which road we shall 
 follow.' ' Evidently, so far as Mr. Ackerman is con- 
 cerned, choosing a road is the same thing as arriving 
 at the end of it. Happy man! Some of the rest 
 of us see so many weary miles stretching between. 
 
WHAT ARE THE FIRST STEPS? 213 
 
 TOPIC VII 
 SECOND ARGUMENT 
 
 By Frederick L. Ackerman 
 
 Mrs. Wood brings her argument to a well-organ- 
 ized conclusion and suggests the necessary legislative 
 enactments and administrative machinery for carry- 
 ing out the plans she has so ably presented. With 
 what she has to say with respect to the organization 
 of technical knowledge, of course I agree. Beyond 
 that point I decline to follow. 
 
 WOULD NOT MAKE MUCH DIFFERENCE AFTER ALL 
 
 The reason may be simply stated. Generally 
 speaking, her programme as regards action, is con- 
 fined to the realm of finance. It is a shifting about 
 of loan credit arrangements; but the only real 
 change suggested in the processes through which 
 the mass of houses are built, is the elimination (in 
 the case of municipal housing) of the last-in-line 
 speculator in land and the elimination (in some 
 cases) of the speculative builder. 
 
 She says that the measures are " purely prelim- 
 inary/' But these preliminary measures are all 
 
214 THE HOUSING FAMINE 
 
 headed in a definite direction and it is to be as- 
 sumed that future measures will follow the same 
 general course. 
 
 MBS. WOOD OVERLOOKS SOMETHING IMPOSTANT 
 
 It is not that the several measures advocated 
 would do any particular harm beyond supporting 
 a financial-industrial system which is working at 
 cross purposes and against us with respect to the 
 aims expressed. It is rather that her entire pro- 
 gramme is completely beside the point. It is staged 
 entirely in the realm of make-believe-production. It 
 does not touch the world of industry (technology 
 workmanship industrial relations) at a single point. 
 Now I contend that if what is spoken of as a remedy 
 is to be found, that remedy will be in the nature 
 of releasing industry from financial control. Indus- 
 try is a matter of workmanship technology and not 
 a matter of finance of profit upon investment. 
 
 Mr. Murphy again stresses the interference of 
 Government as a cause. Possibly Government has 
 interfered that is somewhat beside the point when 
 the problem is viewed from a sufficiently broad angle 
 and with respect to a sufficient period of time. 
 
 WE REVIEW A LITTLE HISTORY 
 
 I now return to my introduction. I ask you to 
 recall my summary reference to the drift of events 
 which set in a century and a h^lf ago, following 
 the introduction of the machine process and the 
 
WHAT ARE THE FIRST STEPS? 215 
 
 emerging system of financial-business in control of 
 industry. I ask you to also follow the drift of events 
 through the last century as industrial urban centers 
 came into being congested sordid wretched 
 mostly slum. I ask you to recall how all this came 
 about under the rule of natural rights, self help and 
 free bargaining free also from Governmental in- 
 terference. I ask you to recall all this with a view 
 of asking you finally: 
 
 What set all this a-going? What sucked people 
 into industrial centers? What caused the slum? 
 What caused the shortage ? Was it not the gradual 
 concentration of economic power in the hands of 
 individuals and the legal right of individuals to the 
 exclusive use and abuse of the means and materials 
 on which the life of the community depends? 
 
216 THE HOUSING FAMINE 
 
 TOPIC VII 
 THIRD ARGUMENT 
 
 By John J. Murphy 
 
 DO FISHERMEN CARRY BAIT TO FEED THE FISH 
 OR TO CATCH THEM? 
 
 As we reach a conclusion, our differences seem 
 to disappear, but we come down to a really funda- 
 mental difference as to statement, rather than as 
 to substance. Mrs. Wood, with an acuteness of 
 perception which does her credit as a debater, if 
 not as a philosopher, voices one of the strongest 
 objections to the programme. "What?" she de- 
 mands, "are you going to pay tribute to the pirate 
 who is now robbing the people by unjust rents, and 
 give him moret" 
 
 COMPETITION, THE SOLE EFFECTIVE REGULATOH 
 
 I have already indicated that the landlord, in the 
 vast majority of cases, is only registering a scarcity, 
 and that the abnormal rise in prices, by inducing 
 new building, will ultimately destroy itself by ac- 
 celerating production to a point where the competi- 
 
WHAT ARE THE FIRST STEPS? 217 
 
 tion for tenants will be as keen as it is now for 
 apartments and houses. We can greatly hasten the 
 coming of that time, by making the exemption for 
 which I have argued. Thousands of people who 
 opposed the idea originally have come to believe in it. 
 
218 THE HOUSING FAMINE 
 
 TOPIC VII 
 THIRD ARGUMENT 
 
 By Edith Elmer Wood 
 
 what constitutes success? 
 
 Mr. Murphy says he has nothing against my theory 
 but its ill success. 
 
 Eef erring to what? 
 
 When New Zealand state loans enable 1000 work- 
 men per year to become home owners, which, con- 
 sidering the difference in population, would be 
 equivalent to 140,000 in the United States, I call 
 that fairly successful. 
 
 A policy which has produced homes for 54,632 
 Belgian workingmen's families (equivalent to nearly 
 a million families in our country) seems to me far 
 from a failure. 
 
 A MATTER OF OPINION, OF COURSE 
 
 Mr. Murphy's statement that "America without 
 any housing commissions has had better popular 
 housing than Europe has ever dreamed of" seems 
 better suited to a Fourth of July oration than to 
 a serious discussion. The consensus of opinion 
 
WHAT ARE THE FIRST STEPS? 219 
 
 among international authorities is that the best 
 working class housing in the world, and the lowest 
 death rates (this last not a matter of opinion) are 
 found in English garden cities and garden suburbs. 
 The best we have in this country, the war undertak- 
 ings of the Housing Corporation and the Shipping 
 Board, were modeled after them. 
 
 WHY REPEAT? 
 
 As for Government's being preventive and not 
 constructive, I refer the reader to my comments in 
 the last (sixth) rebuttal. 
 
 I AM REALLY OFFERING MR. ACKERMAN A LIFE LINE 
 
 My thanks to Mr. Ackerman for his kind remarks 
 about my "well-organized conclusion.' ' I am sorry 
 he can't see that the course I have outlined affords the 
 only practical way of starting for the goal he has 
 in view, though it is quite true that it does not 
 necessarily lead there. This, to those who do not 
 like the looks of his goal, is not altogether a dis- 
 advantage. 
 
220 THE HOUSING FAMINE 
 
 TOPIC VII 
 
 THIRD ARGUMENT 
 
 By Frederick L. Ackerman 
 
 MR. MURPHY DEFINES THE ISSUE. MRS. WOOD 
 GROWS IMPATIENT 
 
 No space here to deal with the fallacious theory 
 which passes current that "men are endowed with 
 an inherent and inalienable love of indolence ' f 4 ex- 
 pressed by Mr. Murphy in the second paragraph of 
 his final argument on this head. This fallacy is 
 exposed by Thorstein Veblen in "The Instinct of 
 Workmanship. ' ' 
 
 LARGELY A MATTER OF PERCEPTION 
 
 Mr. Murphy grasps the situation when he says 
 "some men become possessed of certain kinds of 
 property which are not the produce of any one's 
 service, and are permitted to exact services from 
 others without rendering equal services themselves. ' 9 
 There you have it ! Of course, as Mr. Murphy says, 
 this condition "is not going to be altered until men 
 perceive it." That men may more clearly "perceive 
 
WHAT ARE THE FIRST STEPS? 221 
 
 it" is precisely the aim of my argument. When 
 men do " perceive it"; when they come to "under- 
 stand more clearly that "the right of individuals 
 to the exclusive use and abuse of the means and 
 materials on which the life of the community de- 
 pends" is what makes for the confusion of the 
 present when this is made plain it is to be assumed 
 that these rights will come in for a thoroughgoing 
 revision. When they have come in for such a revi- 
 sion we will then be on our way toward solving the 
 housing problem. 
 
 MRS. WOOD GROWS IMPATIENT 
 
 Mrs. Wood would have me appear as one who 
 would rest content with merely making a "decision" 
 as to the "next steps" to take. I fully realize the 
 problem before us, and advisedly I put the matter 
 as I did, for I am thoroughly convinced that no 
 benefit whatsoever could possibly accrue from the 
 action suggested by Mrs. Wood so long as our system 
 of loan credit and banking runs in the direction of 
 ever increasing inflation ; so long as financial business 
 runs in the direction of more wasteful competition 
 and in the direction of creating more useless activi- 
 tise and performing more useless services. 
 
 The "next step" is not even a decision as to what 
 to do. It is primarily that of discovering what is 
 the matter. It is with this phase of the question 
 that I have dealt almost exclusively. Nor do I 
 assume that it is possible for us to take any 
 
222 THE HOUSING FAMINE 
 
 "next step" immediately which will materially 
 modify conditions. 
 
 Merely saying that what I suggest is "some step" 
 does not make it at all clear that it is not the proper 
 step to take. 
 
 4 See " The Economics of the Social Uplift,' by Leon Ardz- 
 rooni. Political Science Qvarterly, Vol. XXXV, No. 1, March, 
 1920. 
 
topic vin 
 
 SUMMARY AND CONCLUSION 
 
SUMMARY AND CONCLUSION 
 
 By John J. Murphy 
 
 Fundamental cause of housing famine rests upon 
 an industrial condition which does not enable a 
 great mass of workers to earn enough to provide 
 their families with sanitary, safe and agreeable 
 homes. This fact is unchanged by apparent rise in 
 wages. To meet present emergency we must resort 
 to alleviations. Remedy for the whole social prob- 
 lem too vast a subject for limits of this argument. 
 Self-reliance has solved our problems in the past; 
 it will solve this one, if we use our brains. 
 
 ALLEVIATION NECESSARY BEFORE FUNDAMENTAL CURE 
 
 Under this head I propose to recapitulate the 
 causes, leading to the housing shortage and the 
 policy, which must be followed, if we are to restore 
 even our former moderate housing supply. Not that 
 I regard the former condition as satisfactory, but 
 compared with present conditions it seems ideal in 
 the retrospect. The point is fairly illustrated by 
 the following story. During the war, Commander 
 Wedgwood, an English member of Parliament, 
 speaking at Cooper Union, New York, said: "The 
 
 225 
 
226 THE HOUSING FAMINE 
 
 working classes in England are praying for the 
 return of peace, because they have forgotten what 
 peace was like for them. ,, So with us, many would 
 hail with joy the return of pre-war housing condi- 
 tions, even though 20% of our population were then 
 living in houses below proper hygienic standards. 
 
 WAGES BELOW LIVING COST 
 
 The fundamental reason for such a condition was 
 that fully 20% of our population were not earning 
 living wages, and were therefore unable to pay rents 
 sufficient to secure good houses. Low wages were 
 due to the existence of a surplus labor supply, caused 
 in its turn by lack of means for self-employment due 
 to land-monopoly. Now we have a situation, in 
 which wages and rent are nominally high, but the 
 relation between them remains the same. With 
 nominally high wages the poor man is still unable 
 to obtain adequate accommodations, because rents 
 have risen so much. Indeed a much larger number 
 of city people are now living under unsanitary con- 
 ditions than in 1914. The situation is the same as 
 that so touchingly described by Mr. Dooley in his 
 unregenerate, radical days. He said in substance, 
 "Whether wages are high or low, the workman 
 remains about the same number of jumps behind 
 the porterhouse steak.' ' So does the unskilled 
 laborer lag behind the sanitary and satisfying house 
 or apartment. 
 
SUMMARY AND CONCLUSION 227 
 
 AN ORGANISM NOT A MECHANISM 
 
 To my mind the social organization is a growth, 
 not a mechanism. Just as some of the functions of 
 the human body are instinctive and subconscious, 
 while some are reasoned and are conscious, so in 
 the social body we have parallel conditions. Food 
 supply and shelter supply are among the most 
 primitive of human needs and their supply is among 
 the most instinctive of human functions. If for any 
 reason, society should fail to desire to furnish these 
 things, government agencies would not help us much. 
 Our situation would be like that of a wounded man 
 whose bones refuse to knit or whose flesh refuses 
 to heal. Dissolution would not be far off. All that 
 we can do in such a case is to find out if we are 
 obstructing the operation of the natural process, 
 create conditions propitious to healing and let nature 
 take its course. 
 
 I have shown how Government, with the best in- 
 tentions, has balked the natural supply of housing. 
 By taxing the production of all things that go into 
 the making of a house, by taxing the money that 
 must be borrowed for the building of houses, by 
 heavily taxing the house itself when completed, it 
 makes investment in houses dubious and prevents 
 the normal flow of capital into a safe investment, on 
 which, under present conditions, a large return could 
 be paid. At the same time, by undertaxing valuable 
 land, it permits that essential item in house con- 
 struction to be held at prices which present in or- 
 
228 THE HOUSING FAMINE 
 
 dinary times a serious impediment to development. 
 It seems too clear to need argument, that before we 
 call upon government to lend artificial aid to building 
 we should insist on its removing the handicaps which 
 it now imposes on private construction. Otherwise 
 we shall be merely urging a waste of energy, due to 
 government taking with one hand what it gives with 
 the other. 
 
 GOVERNMENT A NECESSARY EVIL 
 
 Mrs. Wood asks "Is Government only a necessary 
 evil?" I have no hesitation in replying, that that 
 is the proper angle from which it must be regarded. 
 As, however, I regard it as just as necessary in 
 some of its manifestations as it is evil in others, 
 I have no sympathy with the point of view of the 
 philosophic anarchist. Most of the remedial legisla- 
 tion enacted is necessary because of previous unwise 
 legislation. It is obliged to resort constantly to the 
 police power, because at one time or another it has 
 given to some people special privileges which later 
 it tries to neutralize, usually unsuccessfully, and 
 nearly always insincerely (witness the Sherman 
 Law). 
 
 BOGUS REMEDIAL LEGISLATION 
 
 Mrs. Wood seems to think that she is making a 
 point by indicating that the English Housing Act 
 was only passed in 1919. Eeally this statement pre- 
 judices her case very much. I concede that the 
 
SUMMARY AND CONCLUSION 229 
 
 latest, and let us hope the last, Housing Act was 
 passed at that time, but it is only the youngest scion 
 of a long family of failures, and I can not put this 
 fact too strongly. It is afflicted with all the heredi- 
 tary defects derived from a futile ancestry. It 
 is hardly too much to say that up to the end of 
 last year, England had enacted as many housing 
 laws as she has built houses ! I have said that this 
 may be the last housing act, because it would seem 
 as if a semi-centenary of failures would convince 
 even the House of Commons that it cannot forever 
 bamboozle the people with bogus remedial legislation, 
 pretending to afford relief, which it never gives. 
 
 SOPS TO PUBLIC SENTIMENT 
 
 Of course, my statement is not to be taken as 
 denying that at certain times and in certain places, 
 municipal corporations have built blocks ot houses, 
 or that private philanthropists have done the same, 
 but all the enterprises cited are so infinitesimally 
 small beside the task which we confront that no 
 comparisons can be made which would be of any 
 value. There may be some public ventures in hous- 
 ing which have paid their own way, but they are 
 rare, while the number that have to be helped out 
 of taxes is great. 
 
 A MISLEADING BEACON OF SAFETY 
 
 But when all is said and done, the barrier of 
 delay still stands in the way of securing appropria- 
 
230 THE HOUSING FAMINE 
 
 tions. After the legislative sanction is obtained, 
 the people of the whole state in which it is to be 
 made operative have to vote upon it, and after all 
 that is done, there will still be legal questions as to 
 whether to use the taxing power for such a purpose 
 would not be contrary to the Federal Constitution. 
 Indeed, so little probability is there of the realiza- 
 tion of such a programme that it might seem waste 
 of time to argue against it, but the danger of it is 
 that because it seems specious and attractive, it 
 will draw away earnest persons who will seek the 
 proverbially dangerous " easiest way" and waste 
 energies that might be profitably employed in 
 furthering a practical solution. 
 
 MONOPOLY IN FULL CONTROL 
 
 There are many ideas latent in Mr. Ackerman's 
 proposals with which I feel some sympathy. It can 
 not be denied that monopolistic control of production 
 has attained such completeness, that it can not well 
 go further, and hence as there is no such thing as 
 an equilibrium in human affairs, it must tend to 
 recede. Quite unintentionally perhaps the cards have 
 been stacked for it by Government, and now they 
 control the dealer. But his proposals envisage the 
 reconstruction of human society, and lead into so 
 many other channels that I have not the space to 
 examine them all. To solve the problem of the 
 individual has, so far in our history, lain with the 
 individual, and he has proved in the main equal 
 
SUMMARY AND CONCLUSION 231 
 
 to the task; not absolutely, of course but as com- 
 pared with any other nation or state of human 
 society, this is broadly true. That is the only fair 
 standard that we have. Shall we wander off into 
 untried paths, or rather paths which other people 
 have tentatively tried and found to lead to futility, 
 or shall we try to remove the obstacles which we 
 have unwittingly strewn in our path and proceed 
 along the lines, which have brought us material 
 power, prosperity and opportunities, greater than 
 any hitherto known to any section of the human 
 race? 
 
232 THE HOUSING FAMINE 
 
 SUMMARY AND CONCLUSION 
 
 By Edith Elmer Wood 
 
 The American people are neither radicals nor reac- 
 tionaries. They stand for orderly progress and a 
 square deal for all. Therefore the housing of lower 
 paid wage earners will be removed from the domain 
 of business enterprise, which does not want it, and 
 taken over by the state as a public utility. 
 
 HOW FAR WE AGREE 
 
 "We are agreed as to the seriousness of the housing 
 famine and the menace of congestion, which even 
 Mr. Murphy says endangers "the very life of our 
 nation and civilization." 
 
 I think 1 we agree that the way to end a house 
 famine is to build new houses; that new houses 
 can not be supplied at a profit to the lower-paid 
 groups of wage earners; that tax exemptions are 
 subsidies; that speculation in land can and should 
 be checked by taxation; and that governments can 
 borrow money at cheaper rates than individuals. 
 
 I hope we agree that every man who works hon- 
 estly day by day is entitled to return at night to 
 a comfortable home in which he can raise a family 
 in health, contentment and self-respect. 
 
SUMMARY AND CONCLUSION 233 
 
 WHERE WE DIFFER 
 
 We differ as to the relative importance of the 
 present shortage of all sorts of houses and the 
 permanent shortage of good houses for working 
 people. Mr. Murphy's interest focuses on the former, 
 Mr. Ackerman's and mine on the latter. 
 
 We differ still more as to the remedies to be em- 
 ployed. 
 
 Mr. Murphy, at the conservative extreme, is, 
 theoretically, an individualist. 2 He believes every- 
 thing will come right if Government only lifts the 
 brakes, removes the obstacles it has stupidly placed 
 in the way of building houses, gives free rein to 
 business initiative and the law of supply and de- 
 mand. Practically, he advocates applying quite as 
 many brakes as he would remove. He says, to take 
 taxes off of buildings, but to put them on land. He 
 is willing to have the State subsidize the speculative 
 builder and landlord in order to secure a better sup- 
 ply of expensive houses, but he is sure it would 
 destroy the workingman's self-respect if his city 
 were to rent to him a comfortable home, as it sup- 
 plies him with water at cost. He thinks it would 
 be dangerous to make loans from Postal Savings 
 Deposits to workingman to enable them to become 
 home-owners, but that it would be wise to force 
 national banks to make long-time loans to specula- 
 tive builders. On the whole he is rather philosophic 
 about the housing troubles of the poor man, and 
 inclined to counsel patience. 
 
234 THE HOUSING FAMINE 
 
 Mr. Ackerman, on the other hand, is so thorough- 
 going a reformer that he scorns all palliatives and 
 will consider nothing less than a complete industrial 
 revolution, which is to eliminate profit as a motive. 
 
 WHY WE DIFFER 
 
 To Mr. Murphy I say, the housing situation as it 
 existed just before the war was the result of more 
 than a century of individualism, business initiative, 
 supply and demand. The system has had its chance 
 and has failed miserably, tragically. Never, at any 
 time, or at any place, has any population been satis- 
 factorily housed through the sole action of supply 
 and demand and business initiative. 3 
 
 It sounds plausible to say that every man ought 
 to be able to pay an economic rent on a good house 
 and that wages should be raised till he can. But 
 haven't we had enough of wages and prices chasing 
 each other up an ascending spiral? If only a small 
 fraction of the population were unable now to pay 
 an economic rent, it would not look so hopeless. But 
 it is a question of at least a third of our people 
 perhaps more. Any such general wage increase 
 would include the building trades and the building 
 materials trades. Whereupon building costs would 
 rise, and rents would rise, and the ratio between 
 them would be the same as ever. 
 
 To Mr. Ackerman I say, let us assume for the 
 sake of argument that your theory is correct, that 
 the profit system is essentially vicious. "What better 
 
SUMMARY AND CONCLUSION 235 
 
 way can you suggest of beginning your reform than 
 by cutting out just one profit in housing the last 
 one and opening up the opportunity for a home 
 to a new group of wage earners? If it doesn't open 
 the door to all, push the process back farther cut 
 out another profit, and yet another. Each step would 
 give the advocates of the present system the chance 
 to prove that its total elimination is not necessary. 
 And if, peradventure, your theory is wrong, civiliza- 
 tion will not have been needlessly wrecked. What- 
 ever his confidence of success, the wise general 
 secures his line of retreat. 
 
 The English guild movement to which Mr. Acker- 
 man refers is interesting, though to me it seems 
 singularly artificial. The way of progress does not 
 commonly lie in forcing a river to run back towards 
 its source. But has it occurred to Mr. Ackerman 
 that neither guild socialism, nor any other brand, 
 can conceivably be successful in the hands of a slum- 
 dwelling proletariat physically, mentally, morally 
 stunted and warped by the darkness and the disease 
 germs among which they live ? That the destruction 
 of slums and the building up of sane, sound, intel- 
 ligent masses is a necessary preliminary? 
 
 OBJECTIONS TO MY PROGRAMME 
 
 I leave it to the candid reader whether my pro- 
 gramme is not the only practical and adequate one 
 submitted. I ask also whether any valid objections 
 have been offered to it? 
 
236 THE HOUSING FAMINE 
 
 Are not Mr. Ackerman's objections founded on 
 his devotion to an impossible Utopia? Has he an- 
 swered any of my queries as to Jtow his Utopia is 
 to be brought about? 
 
 Are not Mr. Murphy's objections based on pre- 
 judice and insufficient acquaintance with the history 
 of the measures I am advocating? Has he replied 
 to any of my challenges to quote specific instances 
 of "failure" or " scandal' ' in state housing and 
 state loans? 
 
 AMERICAN PEOPLE NEITHER REVOLUTIONISTS NOR 
 REACTIONARIES 
 
 If I know my fellow-countrymen, they would snow 
 under Mr. Ackerman's proposal if it were submitted 
 to a referendum vote, and they would fight to the 
 last ditch rather than have it imposed on them by 
 force. With the ghastly example of Russia before 
 us, we are not likely to scrap our present civilization 
 in the vague hope of constructing a better one on 
 its ruins. 
 
 On the other hand, the typical American is cer- 
 tainly not a reactionary. He is not prejudiced 
 against a measure because it is new to him. He 
 believes in orderly progress, and progress involves 
 change. He believes in the square deal and in 
 equality of opportunity for the children of rich and 
 poor. Few would choose to perpetuate slums and 
 high death rates if shown how to get rid of them 
 especially if the method had already been well 
 tested and proved. 
 
SUMMARY AND CONCLUSION 237 
 
 THE FAMINE FOR THE WELL-TO-DO WILL CURE ITSELF 
 
 The housing shortage for such as can pay from 
 $50 to $150 a month rent can be trusted to take 
 care of itself without subsidies. In such a connec- 
 tion, supply and demand will really work. One can 
 hardly pick up a New York paper without reading 
 of some group of tenants buying an apartment house. 
 If the shortage continues, they will soon start co- 
 operative building. Or they will move to the suburbs, 
 where they can have children (not such a bad idea 
 either!) and build individually. Many are doing so 
 already. 
 
 THE POOR MAN IS THE ONE WHO NEEDS AID 
 
 But the poor man is an orphan, abandoned by 
 supply and demand, except as those step-parents 
 offer him slum accommodations, which no one else 
 wants and which he, too, would decline if he had 
 any choice. He cannot build or buy. He has neither 
 the cash nor the credit. 
 
 THE FUNCTION OF GOVERNMENT 
 
 In a democracy, government action is the action 
 of the people collectively. They do collectively the 
 things they cannot do, or cannot do so well, individ- 
 ually. Our complex modern life has greatly in- 
 creased the number of such things. Water, light, 
 roads, schools, mails, once belonged to the domain 
 of private initiative. Individualists, like Mr. Murphy 
 
238 THE HOUSING FAMINE 
 
 have cried disaster at each step ; but still the process 
 continues, and the disaster has failed to materialize. 
 Shelter is a necessity, but a man can no longer 
 go into the woods, cut down trees and build his 
 family a log cabin. And business initiative does not 
 provide for the workingman. Slums injure the 
 health of those who live in them, and spread con- 
 tagion to the rest of the community. So we must 
 have a remedy practical, safe and progressive. 
 
 PROGRAMME OF STATE ACTION 
 
 Therefore I advocate : 
 
 1. The immediate appointment of national, state 
 
 and local housing commissions to study the 
 subject, which even yet is not widely enough 
 understood. 
 
 2. Long-time housing loans to workingmen at low 
 
 interest rates under the auspices of federal 
 and state governments. Nearly every civi- 
 lized government in the world, except ours, 
 already holds out this helping hand to its 
 workers. 
 
 3. Municipal housing at cost for lower-paid wage 
 
 earners, and slum clearance where necessary. 
 British and German experience, especially, 
 show both are feasible. 
 
 As Lloyd George said in urging before Parliament 
 the enactment of the present British housing law, 
 which is to provide something like half a million 
 working class cottages, partly at government ex- 
 
SUMMARY AND CONCLUSION 239 
 
 pense: "You cannot maintain an A-l empire on a 
 C-3 population.' ' Nor, by implication, can you raise 
 an A-l population in C-3 houses. 
 Is the C-3 rating going to be good enough for us? 
 
 x The reason for my tentative form of assertion may be de- 
 duced by comparing the following : 
 
 From Mr. Murphy's second rebuttal: " It is not in accord with 
 the facts to state that there have been no private ventures in the 
 field of providing homes for low-paid wage earners." 
 
 From his third reply: " There has been little, if any, capital 
 put into cheap apartment construction for a number of years." 
 
 From Mr. Murphy's fourth topic: speaking of tax exemptions 
 on new dwellings: " It would, to all intents and purposes, be a 
 subsidy." 
 
 From his fourth rebuttal (referring to the same matter) : "I 
 pointed out wherein my plan differs from a subsidy." 
 
 From Mr. Ackerman's second topic: "If any appreciable 
 volume of such public credit be used . . . private enterprise 
 would ultimately be forced to withdraw from this field of action." 
 
 From his third topic: "Adequate homes cannot be built and 
 operated for a rent which the lower-paid wage worker can pay." 
 
 2 1 do not wonder that Mr. Murphy does not want to be classed 
 with the Manchester school of economists, but it only goes to show 
 how impossible it is for one, who like Mr. Murphy, possesses a 
 social conscience, to be a consistent individualist. 
 
 3 See U. S. Bureau of Labor Statistics Bulletin 158, p. 9, and 
 First Report Massachusetts Homestead Commission (Jan., 1913), 
 p. 6. 
 
240 THE HOUSING FAMINE 
 
 SUMMARY AND CONCLUSION 
 
 By Frederick L. Ackerman 
 
 Little to agree to. Specific suggestions of op- 
 ponents avoid main issue. My purpose to discover 
 cause before suggesting remedy. Real production 
 can only follow real effort. "How to end it" hangs 
 on attitude toward profit. 
 
 Mr. Murphy advocates leaving things alone; but 
 he wants Government "to get out of the way." He 
 would retain financial business control of production 
 and our system of competitive selling. But his 
 specific suggestions, with the exception of tariff revi- 
 sion, are in plain contradiction to his main arguments 
 as noted above. He advocates differentials of one 
 sort or another which are found, when they are 
 tracked home, to be subventions. 
 
 Mrs. Wood advocates the creation of federal, state 
 and local housing boards, the use of state credit and 
 municipal housing. "With the exception of the crea- 
 tion of the bureaus, her suggestions are out and out 
 subventions. 
 
 LITTLE TO AGREE TO 
 
 Of the several measures advocated by my opponents, 
 there are but two with which I am in agreement. 
 
SUMMARY AND CONCLUSION 241 
 
 I agree as to tariff revision; and of course I agree 
 with Mrs. Wood with respect to the value of gather- 
 ing information and knowledge having to do with 
 housing and town planning. I would make this 
 reservation, however, with respect to the latter. 
 Housing bureaus attempting to deal with the prob- 
 lem by the shifting about of loan credit, etc., could 
 accomplish nothing of permanent value. 
 
 My purpose has been to disclose why it is that 
 we are confronted with a constant drift of population 
 into industrial centers; why we have slums and an 
 ever accumulating shortage of houses. 
 
 I stated that congestion of population follows upon 
 a concentration of industry ; and that concentration 
 of industry is consequent upon the concentration of 
 wealth (economic power) in the hands of individuals. 
 My argument that the only way to arrest the drift 
 of population into industrial centers was to effect 
 a redistribution of wealth has not been denied by 
 my opponents. 
 
 I stated that slums and the constantly accumulat- 
 ing shortage of houses is consequent upon a system 
 of production and distribution which, through com- 
 petitive selling, must resort to curtailment or sabot- 
 age in order to show profit in terms of price. My 
 opponents have neither denied these statements nor 
 have they summoned arguments to demonstrate that 
 any of their proposals would so operate as to make 
 any material difference with respect to these two 
 major matters which I maintain constitute the core 
 of the problem. 
 
242 THE HOUSING FAMINE 
 
 WHY AVOID CAUSES? 
 
 My opponents have avoided this economic analysis 
 of the problem. They have confined themselves to 
 merely asking, e.g., how investment for a profit could 
 be disallowed. I have assumed that such constitu- 
 tional changes as Mrs. Wood requires in order to 
 carry her programme into action would be made when 
 people came to view such changes as desirable. Pre- 
 cisely the same holds with respect to that phase 
 of my argument which has to do with property 
 rights. When a sufficiently large number come to 
 so view investment for a profit the legal right to 
 get something for nothing as so operating as to 
 cancel their effort, laws relating to property rights 
 will no doubt be changed. So runs history. 
 
 DECISION NOT A MATTER OF POLITICAL ACTION 
 
 How to shift the control over industry from the 
 field of financial business to that of technology is a 
 matter which will be decided when a sufficient num- 
 ber of people shall have discovered that our system 
 of loan credit and banking (which now controls in- 
 dustry) inevitably results in waste, curtailment and 
 constant inflation that this system operates against 
 the production of commodities most urgently needed 
 by those engaged in real production when this be- 
 comes a little more clearly understood by a little 
 larger group, the control over industrial processes 
 
SUMMARY AND CONCLUSION 243 
 
 will no doubt shift. This is not a matter to be 
 disposed of by political action; forces arising out 
 of a conviction that a change is due will take care 
 of the matter. Again so runs history. 
 
 It has been repeatedly asserted in the course of 
 their argument that a reorganization of industry was 
 not a "practical" matter to consider. But it has not 
 been shown that the adoption of the subventions 
 which my opponents advocate would in any way 
 affect the further concentration of wealth (economic 
 power) hence of industry hence, of population. 
 
 Nor have they shown that their suggestions would 
 diminish the losses, wastes, curtailments or sabotage, 
 which, as I have shown, are consequent upon our 
 system of competitive selling. They have not shown 
 that the adoption of their suggestions would result 
 in a reduction of the discrepancy which obtains as 
 between materials needed and materials produced. 
 They have not shown that their suggestions would 
 make any change in industrial relations as between 
 employer and employee. Their arguments are com- 
 pletely beside the point as regards these vitally im- 
 portant matters. This assessment of their argument 
 does not hang upon economic theory. An inquiry 
 into the situation in Europe in pre-war days dis- 
 closes that the system of subventions such as Mrs. 
 Wood advocates had failed to arrest the drift toward 
 concentration of wealth and industrial population ; 
 
244 THE HOUSING FAMINE 
 
 it had no effect upon the general industrial situation 
 and the discrepancy above referred to was increasing. 
 We are confronted with the stubborn fact, which 
 my opponents have not denied, that the modern 
 financial system can not function except through a 
 constant curtailment of production without the 
 production of waste and rendering of socially useless 
 services. Hence I came to the conclusion that in 
 point of "practical" value, the disallowance of that 
 Eight which invites individuals to legally acquire 
 wealth and power without rendering any service 
 whatsoever, is to be accorded first place. 
 
 Of course, the advocacy of any action which car- 
 ries the suggestion that it will make for the common 
 welfare is likely to be viewed with favor. But we 
 lose sight of the condition that under the rules of 
 financial business the common welfare is a matter 
 to be viewed with favor only when action toward 
 that end can certainly show a profit in terms of 
 price. Thus we cut away the foundation of our 
 good intentioned effort as rapidly as we advance 
 with it. 
 
 Headlines in our serious morning papers explain 
 to us now and again that "sustained supply of cotton 
 hangs on price." And quite as seriously we ration- 
 alize the matter and say of course the supply of 
 clothing of food of shelter hangs on price. And 
 we go off to "business" and all day long we occupy 
 
SUMMARY AND CONCLUSION 245 
 
 ourselves in seeing to it that whatever product we 
 may be "interested' ' in shall be so " controlled' ' 
 in volume as to keep the price up. "Too much milk 
 to sell" is in the eyes of modern business enterprise, 
 always assessing results in terms of profit and in 
 terms of price, a far more serious matter than "not 
 enough to drink." 
 
 Of course, we go short of the necessities ; it cannot 
 possibly be otherwise. For if it were possible through 
 subventions (which I deny) to overcome the dis- 
 crepancy our whole system of loan credit and invest- 
 ment for profit would go by the boards. Financial 
 business may exist and continue only by creating 
 and maintaining a discrepancy. 
 
 The result of maintaining this discrepancy is finan- 
 cial profit; hence a concentration of wealth in the 
 hands of individuals; hence as I have shown, in 
 the concentration of industry; hence of population. 
 
 Our problem (congestion, slums, shortage) resolves 
 itself into that of setting events in motion toward 
 the redistribution of wealth. It is not to be assumed 
 that this may be done in a moment. But it is utterly 
 futile to assume that our aims may be achieved so 
 long as we recognize and maintain that individuals 
 possess a right to acquire wealth without performing 
 any service. 
 
 HOW LONG WE MUST WAIT 
 
 Under present conditions with our attitude to- 
 ward maintaining the right to exploit how to arrest 
 
246 THE HOUSING FAMINE 
 
 the drift of population into industrial centers ; how 
 to arrest the building of slums; how to end the 
 housing famine must remain a riddle. And it will 
 remain an unanswered riddle just so long as the 
 legal right to acquire wealth, without rendering 
 service in return the right to profiteer and exploit 
 stands firm. 
 
 THE END 
 
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