Message to the Ladies' Home Journal on Homeownership.
[Released May 13, 1932. Dated March 12, 1932]
My dear Mr. Sherlock:
To possess one's own home, however small, is the hope of every family in our country. That is the American ideal, born of an exquisite sentiment, nurtured by a long national tradition, and proved right by its innumerable practical advantages.
Many things have conspired to frustrate this hope to a lesser accomplishment than the welfare of the nation demands. The amazing speed of our industrial development has caused us to build cities faster than we could properly plan them. The result too often has been that our people have been overcrowded, improperly housed, denied the opportunity to own the home that each has dreamed should be his castle. Perhaps the wonder is that we have done as well as we have, under the circumstances. Nevertheless, we can and should now do better.
Financing of home ownership has not kept pace with improvement in design. Almost any other desirable possession can be purchased in installments on the basis of 25 per cent in cash and the balance secured on the property and somewhat upon the character of the buyer. A home and the home owner are the best credit risks in our country. There is no character credit comparable to a family struggling to own its home. But finance of homes too often continues on terms comparable to the credit extended by a pawnbroker. The family willing to work, save their money, apply the savings to payment for their house is not only a sound basis of credit but a sound basis for the nation. Every interest in life ties them to maximum effort to succeed. They must have credit upon terms adjusted to their little of cash and their much of character.
To advance the whole finance of homes whether they be in towns or on farms, I proposed to the Congress a measure to set up a Federal system of Home Mortgage Discount Banks, to which may belong building and loan associations, savings banks, deposit banks, farm loan banks, etc.
The broad purpose is to provide for the home owner a comparable background of stable credit with that we have already provided nationally for the business man through the Federal Reserve Banks and for the farmer through the Farm Loan Banks and the Intermediate Credit Banks. The plan and method is not to engage the new institutions in the business of providing direct loans but to give impulse, security and safety and lower interest rates to the already existing institutions, especially the mutual institutions in order that they may extend the fullest measure of credit to would-be home owners.
There are certain emergency phases which render the creation of this system immediately desirable. Great numbers of people are losing their homes because of inability to secure renewal of their present short-term mortgages. They are losing their savings of years and undergoing irreparable hardships because of the inability of institutions to give them these renewals. Beyond this, despite everything that has been said, a canvass of the country shows that there are several thousand communities where there is today a need and demand for new homes which cannot be constructed for lack of credit. The immediate result of restoring credit facilities would be the resumption of a large amount of construction work, which is one of the most important keys to unlock the problem of unemployment.
This plan has found sympathetic support and endorsement of thousands of savings banks, building and loan associations, country bankers and, above all, from would-be home owners. I am in hopes it will have early enactment into law. Yours faithfully,
[Mr. Chesla C. Sherlock, Managing Editor, The Ladies' Home Journal, Philadelphia, Pa.]
Note: The message, prepared for publication in the magazine's June issue, was released to the press on May 13, 1932.
Herbert Hoover, Message to the Ladies' Home Journal on Homeownership. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/207901