Evening Star Newspaper, September 29, 1923, Page 17

REAL - ESTATE. - Charge Prbp-aganda— Confuses Builder as to Relative Cost Labor Asserts Materials Most Expensive ' . Factor, While Lumbermen Attribute Burden to Workers. In recent discussions of bullding Costs the statoment or implication has appeared in many publications throughout the country that Dr. John M.’ Qries, chief of the division of building and housing of the Depart- ment of CommercE, “after & careful survey of building conditions all over the United States” gives it as his opinion that labor charges account for xo small a proportion of the con- striction cost of ‘the average house that increases in labor wages have Jittle bearing on total building costs, according to a statement issued by the National Lumber. Manufacturers' Association. The articles in question then point cut that as, according to the “survey.” labor was only 26 per cent of the cost of a house. a $5,000 house would cost only $650 less if there were a straight reduction of 50 per cent In the wages of labor employed on it. That is the answer, newspaper, “of the United States De- partment of Commerce to charges circulated freely by those ‘higher up’ in building, that exorbitant wages entering into the cost of construction are responsible for the high prices that are making tenants instead of home owners out of people of mod- erate means.” Some of the publications dealing with this subject have even gone &0 far as to imply that, while the labor cost of a $6,000 house represents only 26 per cent of the whole, the m terial cost amounts to 74 per cer The general effcct has been to con- vey the impression that the United States Department of Commerce sponsors the proposition that high building trade wages have little to do ‘with the present cost of housing’ and that the producers and purveycrs of building materials are chiefly re- | sponsible for the situation. | Tt is Interesting, therefore, to ascer- tain exactly what Dr. Gries did =ay,! the statement continues. It appears | that a taik by Dr. Gries before of- ficials of the bureau of standards was authentically reported in a depart- ment release, as follows: “Figures were given showing the Telative importance of the different items of construction costs for a cer- tain house. Of these labor charge accounted for only 26 per cent; mi terlals cost 29.3 per cent; land, 19 per cent; contractor, 12.6 per cent: financing, 6.7 per cent; architect and real cstate fees, 6.4 per cent. These figures show that it is not generally possible to blame one single factor, such as high labor or material costs, for high prices of houses.. He said that, while the daily wage of build- ing tradesmen might seem high to a man employed all the year, they were not necessarily high when the seasonal character of the employment was considered. He said a eubstan- tial saving in labor costs could be realized if arrangements could be made for employment during a larger part of the year. He also said sinm- jlar savings in costs of equipment and contractors’ overhead could be effected by a more extended buflding | season.” Cited Certain House. It will be observed that Dr. Gries took his percentages from a “certain house” and made no reference wha ever to “a careful survey of building conditions all over the United States Neither did he say that this “certain house” was a $5,000 house. As a mat- ter of fact, it was a $10.500 house, which' is a different matter. It is also to be noted that in the 100 per cent of this house the price of the land included, and also cost of | financing and the architect and real estate commission fees. The industrious circulators of the idea that labor costs in the erection of a building are so small a part of the whole that it makes very little difference whether labor receives a large percentage increase or not, omitted to notice that precisely .the same line of reasoning with different premises abstracted from Dr. Gries' statement would prove that it makes relatively little difference whether materials cost much more or less. -If the materials are only 29 per cent of the cost of a $5,000 house, or $1,450, an increase of 10 per cent inthe price of materlals will represent an increase of gnly 3145 in the whole house bill, which relatively is next to nothing. Dr. Gries' statement made it very plain that there are other factors in bullding cosis besides those of labor and materials, which cannot right- fully be charged to either. In fact, the other factors in the case of the particular house he had in mind amounted to almost as much as the sum of materials and labor. In view of that situation he was merely ra- tionally pointing out that little relief from the high cost of buflding could be expected from reductions in any! one factor—the thought being that relief, if any must come from an all- round reduction of bullding costs. The validity of this view fs illus- trated by the recent experience in many cities of a reduction in the cost of materials being quickly absorbed by an increase in the cost of labor. Dr. Gries remarks that exagge tlons by contractors and men on the one side and labor on the other. of the costs chargeable on the ra- other side in building. are harmful toj both. When, as has been done, ma- terial men figure that 93 per cent of the cost of a building is labor and. fon the other hand, labor economists calculate, as has been done, that the material costs of a bullding are as high as 80 per cent. both sides make themselves so ridiculous that public loses confidence both of them. CGST OF HOME ANALYZED. Labor and Materials Run Over Half of Building Expense. The prospective home builder should in first decide on a reliable plan and; then should build a house char- acterized by simplicity and truthful- ness of design, economy in construc- tion, durability and such an arrange- ment of rooms as will appeal to the housewife. Into the building of this home should go sound material and equip- ment that will withstand wear and have a substantial resale value. Plans and specifications should be so carefully approved in advance that no changes or additions will be necessary, so that the house can be completed for the estimated amount. A typical six-roomed lumber-built house, with a plan from some reliable plan service would have approximate- the following distribution of ex- ense : Cost of lot and improvements.. 20% Labor . 319% Materials . 299 Contractor’ and profit. 12% Financing cost e 29 Miscellaneous % 100% matetial | the | HOMES INCLUDED Large Projects Noted in Re- . port of Building Permits the Past Week. Several large home-building proj- ects and apartment bulldings are in- by the District authorities during the week. There also was a noticeable {jump in the aggregate estimated value | ot the proposed construction, the total | reaching $669,750. { tollow: { M.and R. B. Warren, to build apart- | ment, 3016-3030 Porter street; cost, $80,000. | Shannon & Luchs, to build store, 1314 T street; cost, $25,000. F. Mueller, to bulld, 306 14th street southeast; cost, $11,000. C. H. Small, to build elght houses, {1420-1434 Park road; cost, §100,000. J. H. Brown, to build five houses, 4438-4442 A street $9,000. A. Sherman, to repair 3407 14th street; cost, $8,000. R. Hagner, to build apartment, 3120 R street; cost, $60,000. F. W.'Bolgiano Company. to build warehouse, 1221 C street northwest; cost, $11,000. | Jarah E. Pfau. to bulld, 2801 Rhode | Island avenue northeast: cost. $8,000, John H. Harwood, to build, 3106 34th strect; cost $15.000. C. E. Wire, Inc., to build, 3341 Run- nymede place; cost, $5,000. C. E. Wire, Inc.,’ to build 3862-336 | Tennyson street; cost, $16.000. J. 'B. Shapiro, to bulid, Channing street northeast; $100,000. H. R. Howenstein, to build, 216-218 11th street northeast; cost, $12,000. W. W. Lightbown, to bulild, 3121 South Dakota avenus northeast; cost, 5,000. southeast; cost, 200-238 cost, 3725 S street northwest; cost, $96,000. Shannon & Luchs, to build, 3404- 3426'S street northwest; cost, $96,000. H. Etchison, to build garage, 1745 Kalorama road; cost, $65.000. H. A. Kite, to build, 3802-3804 Win- dom place and 3801-3803 Warren street; cost, $30,000. g Simmons ' & Costaggint, 41-7: to build, Newton street; cost; $12,750. HOME SALES TOTAL $142,500 FOR WEEK Various Sections of City and Environs. Sales of residence properties, ag- gregating in value $142,500, were an- nounced by Boss & Phelps, as’ fol- lows: Dr. T. Leith Gill purchased a_home at 301 West Bradley lane. Chevy Chase, Md., recently completed by George F. Mikkelson. This house contains ten rooms. A _new home located at 4401 Klingle road, built by W. C. & A. N. Miller, was sold to Willam B. Allen. The house is of frame construction, hav- ing six rooms. Mr. Allen will occupy the house. The Thrift Building Company sold a_house just completed by them at 5 Irving street northwest to John Kelley. This is a semi-detached, l The permits issued Shannon & Luchs, to build, 3703-| = Boss & Phelps Transactions Cover| N BULDING LT cluded in the list of permits issued i i {ing at 1719 ) represented t! hav- and { two-story and attic brick hous ing four bedrooms, two bath: sieeping porch on second floor. Carrie Benson sold her former home at 2640 G. yley Park to Elizabeth J. DuBose. This s a two-story, eight-room brick house. A house at 541 Tennessee avenue, owned by Irene F. Hazell, shased by John W. Basin. This house has six rooms. After improvements the new owner Will occupy the prop- trty. George F. Mikkelson sold a new | house just completed, at 303 West | Bradley lane. téa Washington busi i This house has ten room ! Charles S. Mason sold his home at | 527 Quincy street. in_Petworth, to { Henry A. Marshman. The house ha six rooms and will be occupied b the purchaser-after alterations have ‘ been made. A home in Mount Pleasant located | at 1808 Kenyon street northwest was 1 | ness man. bought by Ellen R. Pyne from Helen C. McGown. This is a colonial style brick house, having six rooms. Zelda Wells bought from Henry ! willgenstein his home at 1714 Ken- yon street northwest. This house as built by the Thrift Building Company about two vears ago. This is a seven-room house. John W. Mann sold a detached frame house at 317 West Bradley lane to J. G. Adair. This house has six rooms. The new owner has taken possession of the property, BUILDING REMODELED. 1009 Connecticut completed by the owner, John F. Maury, who has moved into one of the seven store spaces. rfield street in Wood- | was pur- | Remodeling of the Draper building. | avenue. has been | The Female Academy of the Sacred Heart has purchased this new build- sachusetts avenue northwe purchasers and Horace H. Westcott & Co., the ownerx. Thomns J. Fisher & Co. Inc., SALES TOTALING $100,000 MADE BY PETTY OFFICE Homes, Stores and Apartments in Transfers Reported by Real Estate Firm. The following sales, totaling $100,- 000, were reported by Petty & Pet No. 717 Euclid street northwest, a three-story dwelling, containing elev- len rooms, was sold for Elizabeth Dieste to William. L. Board. No. 411 R street northwest, a three- story, six-room dwelling, was pur- chased by James E. Jordan from Ed- ward Kremb. No. 170% 10th street northwest, a | six-room_dwelling, was sold for Mat- tie A. Daish to Herson B. Hicks, Smallwood & Co. representing the er. 2011 K street northwest was purchased by R. O. Belt from Kent Petty. No. 3529 Holmead place northwest, a six-room, colonial_ dwelling, was gold for Emma J. Shaw to Helen Cryer. No. 1333 Taylor street northwest, a six-room, colonial dwelling, was pur- chased by Abe Shuman and Harry Cohen from W. G. Shreve. No. 3125 Mount Pleasant street northwest, a four-story dwelling and side lot, forty-foot frontage, was sold {in connection with Bradley, Beall & Howard to a local investor, who plans to_remodel for investment purposes. 1435 Maryland avenue north- |east, a six-room dwelling, was_sold for Georgia H. Swan to Charles Darr. | No. PR T e S ‘; a I ue |ana LAUDSD.C.VALLE AFTERCOASTTRP Wilson B. Nairn Explains Dif- ferences in Construction of Homes. That the values in new homes in Washington compare most favorably with those on the highly advertised west coast Is the opinion of Wilson B. Nairn, who has just returned from an extensive western trip. Mr. Nafrn is a member of the sales force of Shannon & Luchs. Mr. Nairn says that in the first sub- division he inspected in southern California at first glance the prices quoted seemed 20 per cent under local prices, but he added: “The ground values are lower than in a comparable location in Washing- ton, but the chief difference in cost 18 accounted for in construction. The climate is euch that no expensive heating plant is required. This elim- inates one of the chief reasons for a cellar, which alone effects large sav- ing. Sheathing is unnecessary, in- sulation against cold is not required, no frost depth is considered in plumb- ing trenches and so on through a number of details great savings over our cost of building are made. More Cash For Grounds. “As a result, however, more money can be spent in effecting a charming elevation and beautifying the grounds and on small llving conveniences and refinements that make for easier housekeeping. Built-in fixtures are very generally used, and every inch in the house s planned to serve a sensible purpose. More and more the diming room and its attendant cost is giving way to the charming Pullman dining alcove with bullt-in features, some of the disappearing type. Of course, on state occasions, a gate-leg table is set up in the large living room. “One of the most notable features in the children’s room is an attrac- tive bed which swings back into a closet with a window, leaving a clear and unobstructed playroom—really two rooms in one.” Mr. Nairn said that, in his opinion, the day is here when the local builder must discard the eeemingly endless reproduction of one original design and allow for a perfectly natural and sensible difference In human tastes that Washington builders ca learn much in other parts of the country about giving qualities of character and individuality to their operations and about properly utiliz- ine everv bit of housing snace. | Gardiner & Dent represented the pur-| chaser. Nos. 128-130 G street northwest, two stores and apartments, were sold for_Alice Holloway to S. Kraisel and A. N. Roberts. Morris Cafritz repre- sented the purchaser. No. 718 Taylor street northwest, a six-room, colonial dwelling, was sold for John Friedman to Edward Kremb. * COMPLETES BUILDING. Walter A. Dunigan is now com- pleting an operation of forty-four new feature homes at 9th and Farra- gut streets. Twenty of these houses are now finished and ready for sale. Mr. Dunigan reports the saie of seven of these houses to individual home buyers. The added feature of the homes is the attractive design of the exteriors, every other house aiternat- ing. RS TS REAL ESTATE. Slow Payments Are Hindering Business, Babson Declare Pay Both Little and Big Bills Promptly, Economist Urges in Flaying'Ills ' Caused by Credit. By ROGER W. BABSON. Special Qispatch to The Star. WELLESLEY HILLS, Mass., Sep- tember 29.—Careful students of the financial situation are surprised at the action of the “reserve ratio fig- ures” of the federal reserve banks and the similar figure for the New York banks. With the tremendous amount of gold in the country and with new gold constantly being mined, it seems strange that this figure should decrease. Furthermore, even although this is the crop-mov- ing season, there seems no logical reason why our banks should put out additional = currency. There is an abundance of money in the country for all legitimate needs. The only difficulty is that too much of it is being used in lllegitimate ways, and too much is being hoarded in “sections where it is not being needed. The country does not need to issue more money, but the farmers | and legitimate business instead of speculators in stocks, foodstuffs and wearing apparels should have the use | of the billions already issued. Elimi- nate special and unreasonable storage and there will be money enough for every legitimate need in every line of industry. Speculation Clogs Credit. Yet this speculation in stocks and commodities does not account for the clogging which is taking place today in our credit system. Of the various reasons advanced I believe the funda- mental difficulty is due to the act that people are not paying their bills. Ever since the decline in busi- ness, which began a few months ago, there has been a tendency for manu- facturers, jobbers, retailers and con- sumers to slow up in their payment | of bills. Of course, the whole thing is an endless chain. Just as soon as one link stops the entire chain must stop. As one link slows down, the entire chain must slow down. absolutely no reason for such action. It is a psychological or moral condi- | tion rather than an economic condi- is like the flow of blood in one’s veins. _Anything which retards circu- lation harms every one, An analysis of the balance sheets of our large industries shows they are very largely “made or un- Yet there is | that | made” by their “accounts receivable/" which is'simply the accountant’s name for money being owed to them. For instance, the fertilizer business, as a business, is perfectly sound. Not only are fertilizers needed, but they are needed more every vear. It is & fundamental industry, and yet most of the fertilizer companies are hav- ing very hard sledding at the present time, and their securities are selling very low. The reason primarily is that farm- ers are buying fertilizers on credit and are not paying their bills. The chain stores, on the other hand, are very flourishing today, and thelr stocks are selling high. The main reason for this is that these chain stores are doing a cash business. They have no “accounts receivable” and are able to discount their bills and carry large cash balances. Urges Prompt Payment: In the case of almost every cor- poration the credit policy is an_im portant factor, and any investor buy- ing securities today should give it areful consideration. This is espe- | clally true today, when industrial stocks are so much more popular than railroads and public utility stocks. Notwithstanding their troubles the | railroads and public utilities do a | Msh business. This applies not only to transportation companies, but also to lighting and telephone companies. All of this means that one of the | best things we can do to bring back prosperity is to promptly pay our bills. Moreover, this applies to wage workers as well as employers: to re- tailers as well as to manufacturers; to people in small country towns as well as to people in the large cities. The, little bills must be paid before the big ones can be paid Before the manufacturer can pay his bills the wholesaler must pay the | manufacturer: before the jobber can pay the wholesaler; the retafler must pay the jobber; and before the retailer can pay the jobber you and I must pay him. Prompt settlements will do much toward keeping the business from going lower. The Babson chart now shows it at 10% below normal. Babson, the noted statistician will continue his special article Dusiness and financial cwnditions in mext urday's Star.) and on Massachusetts Park vwasimington's most exclusive residential section of detdch= ed homes. Containing seven million feet of forest-covered land, with six miles of improved streets. Includes what remains of “The Triangle of increasing Values” between Connecticut, Massachusetts and Cathedral avenues (Woodley Rd.). Over five million feet of land sold. Over 130 homes from $15,000 to $200,000 built and under con- struction. Wooded villa sites, lots and central and side hall brick homes, with lots from 50 to 115 feet front—Park Office, 32d and Cathedral Ave. (Woodley Rd.). Middaugh & Shannon, Inc. Woodward Building, 15th and H Sts. Established 1899 Why do you inspect various houses? You do so in order to get the greatest value for your money. Then don’t buy any house until you inspect this New-Feature home operation. Unquestionably the greatest value in a New House Today. /R TTHITEI I TR Il [ Carefully compare our value with our competitors’ value. Doing this will convince you that our Sample House 4921 9th St. N.W. Take Georgia Avenue Car to Farragut Street, walk One Block East to Houses—always open to 9 p.m. (RS il WALTER A. DUNIGAN Owner and Builder 1410 H St. N. Or Your Own Broker “Value Statement” IR R is correct. . SRS MRS T 3 W