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About Medford mail tribune. (Medford, Or.) 1909-1989 | View Entire Issue (Oct. 13, 1958)
! T MAIL TRIBUNE, McdforJ, Cr9on, Mouthy, October 13, 1958 (Private Mome Building Seen (Declining Over Tight Money By A- ROBERT SMITH Mail Tribune Correspondent Washington - Private home construction, Oregon lumber's biggest market, appears head- ed for another H d decline due to i - . . . - a tig memng m o r tgage I money supply, according to trends now showing up within the g o vernment's home t financ ing agencies. A fall off from the strong recovery which housing made this summer-and which gave the lumber industry a hefty shot in the arm-may" come within the next few months. It probably will not affect the predictions of housing officials that over a million new homes would be built this year. tw 1 m -wis A. Kobt Smith Home construction was so good this summer that Hous ing Administrator Albert M. Cole last week increased his prediction for the 1958 total by 20,000 units to 1,120,000. This would be better than a 10 per cent increase, of 1957's housing starts, 989,700, low est in a decade. Credit Easier This spurt in home building was made possible in great part by a relaxation of credit restrictions by the Federal Reserve Board in an effort to combat the recession which was felt most severely in the early months of this year. From mid-November of last year until May, 1958, the board approved reductions in discount rates for federal re serve banks in all 12 districts from 3Vt per cent to 1 per cent in four states. Credit became easier and more money began to flow START THE WEEK OFF RIGHT SHOPPING AT BREAKFAST SPECIALS NULAID A A MEDIUM AA HORMEL "" OLD SMOKEHOUSE mm ii FANCY SLICED DUNCAN HINES Hot Cake Mix 3 ,b box 4 SAUSAGE Pound Roll PURE, PORK WAFFLE VARIETY KARO SYRUP 1 II Can OjDj HORMEL READY TO SERVE HALF OR WHOLE NEW OAT CEREAL POST'S ALPHA BITS 2 Family Size VACUUM PACK COFFEE il555 VACUUM BLISS SCHILLING BEN HUR FANCY BAHAMAS ABOVE SPECIALS GOOD Mon. - Tues. - Wed. ALSO Silver Dollar STAMPS OK MARKET 1202 N. RIVERSIDE OPEN Till Midnight Every Night into the mortgage market for new homes. Congress also passed a special anti-recession housing bill to stimulate build ing and purchasing even more by reducing down payment requirements on FHA-insured homes and allowing a slight increase in interest rates on mortgages. But by August 15, the Fed eral Reserve Board was mov ing in the opposite direction once more to curb borrowing slightly. The discount rate went back up to 2 per cent in all 12 districts. A board spokesman explained that this was brought on by "a change in business conditions from a downturn to an upturn" and there were "manifestations of an inflationary trend" appear ing once more. The board also raised margin requirements on purchase of securities from 50 to 70 per cent on Aug. 5, which is the way things stood last January before the mar gin was dropped. This shift in tightening somewhat the money supply has served to bring another rise in interest rates, accord ing to officials here. As a con sequence, the supply of mort gage money is beginning to tighten up. This is seen in the statistics of the last few weeks compiled by the Fed eral National Mortgage Asso ciation, the government agency which buys and sells mortgages in its secondary market operations. Sales io FNMA Increase When money is plentiful, FNMA sells mortgages to in vestors looking for a good place to put some money. When money is tight, investors-banks, savings and loan associations-sell mortgages to FNMA to obtain more money. For the past month, there has been a sharp increase of 200 per cent in the number of mortgages investors sold to FNMA. This indicates ' that- mortgage money is growing tighter and can be expected to retard home construction accordingly unless there is a shift in the other direction. Last summer, during the Lsecond quarter when housing picked up sharply as credit became easy, FNMA sold a ! record 30,500 mortgages worth $355 million to invest ors with money to invest. But early in 1957, when credit was tight, FNMA purchased 33,800 mortgages worth $388 million. FHA officials reported that applications for FHA insur ance for mortgages on new homes remained high through August. No information is yet available for September. The number of applications from January through August; rang ed from 17,272 m January to a high of 34,558 in May and 33,617 in August. For the same period last year, the highest number any month was 22,265 in August. Substantial Influence . Another factor in the cur rent trend is that the $1 bil lion appropriated by C.ongress for anti-recession mortgage buying was consumed by Sept. 15. Purchases with this money involved a "subsidy" of a sort in that the mortgages were bought by FNMA at par. "This had 'a substantial in fluence on the spurt in home building this summer," a' FNMA official said, "and it helped the lumber industry quite a bit." He estimated that the $1 billion fund provided money for 80,000 new homes. This special purchase pro gram might still be underway had the House of Representa tives not killed another hous ing bill shortly before ad journment. That bill con tained $500 million for FNMA mortgage buying, if the presi dent thought it necessary to extend this anti-recession in centive to home builders be yond Sept. 15. FNMA still has about $1.5 billion available for its sec ondary market operations, but not for use in buying mort gages under subsidy terms. Officials will be watching housing and mortgage loan figures closely in coming weeks to determine how strong a trend may be de veloping, for another decline in housing' could act as a brake against a general re covery in the nation's econ omy and could send the lum ber industry into another per iod of recession. Subscriber's Address Mystifies Newspaper Manchester, England - (UPD - The Manchester Guardian re ported today that an Ameri can reader regretfully de clined to renew his subscrip tion because "I passed on to a better world Aug. 3, 1958." Commented the Guardian: "Our New York' manager is still wondering what to say in his reply and where to send Eisenhower Leads Stepped-Up GOP Drive for Voles Washington - (OPD - Repub licans stepped up their con gressional campaign today under the new battle cry that President Eisenhower's policies in the Middle and Far East have "maintained the peace." As the final three weeks of the campaign opened, Demo crats blasted back by accus ing the GOP of raising "phony" issues. They urged Democratic candidates to fighjt back by dwelling on unem ployment, the "farm mess, the high cost of living, the defense lag, the drift and confusion in foreign policy." Vice President Richard M. Nixon, number two gun in the GOP campaign arsenal, hits the trail today for his third stumping tour. He will speak in California, .Utah and Wyoming where Republicans are fighting hard to save Sen ate seats in the Nov. 4 elec tion. President Eisenhower, the top Republican of them all, will start his own speaking schedule on . behalf of GOP candidates later in the week. Eisenhower described as "good ., news" the Chinese Communists' decision to ex tend their cease fire in the Formosa Strait for; two more weeks. Speaking in New York City Sunday, the President said the extension offered renewed op portunity to settle the 'Far East crisis through diplomatic negotiations. Firmness Cited GOP National Chairman Meade Alcorn immediately hailed the extension as an in dication that "the administra tion's firmness in this situa tio is maintaining the peace." "It is results that the Amer ican people are interested in," he said. "It is not how you get them, it is the result." Alcorn also said "we main tained the peace" in the Mid dle East because of Eisen hower's "firm position" after the revolt in Iraq. The Democratic Advisory Council described the Eisen hower foreign policy earlier as "six yeais of leaderless vacillation."- , "They have led us to the brink of isolation from our I allies and to the brink of1 Portland Man Drowns in River Hammond, Ore.-CPD-A Port land man drowned and an other man1 managed to save himself early Sunday after their 32-foot fishing trawler smashed up on rocks on the north jetty at the mouth of the Columbia river. The body of Toivo W. Matt son, 59, was found by a search party a short distance from where the wreckage of the boast washed up on the beach near here. Rudolph R. Rautio, 55, the dead man's half brother, walked into the Coast Guard station at. Cape Disappoint ment shortly after sunrise Sunday. He told Coast Guard officers that he and Mattson set out in the trawler from Depoe Bay bound for Astoria when they encountered heavy fog and- rough water as they neared the mouth of the Co lumbia. Mattson, who had operated the craft, radioed the Coast Guard that the trawler was in trouble and had hit rocks "on the south jetty." Coast Guard boats and a plane searched the area until 4 a.m., then halted until sunrise. Rautio said he and'Mattson decided to abandon the trawl er and agreed they would at tempt to swim to rocks of the jetty. Rautio said he made it to the rocks but that Mattson vanished in the water. BEARING HIS OWN CROSS Manchester, Conn.- (UPD - The Rev. Clarence E. Win slow hired -a crane to hoist him 90 feet so he could secure a four-foot cross to his new church steeple. He figured he saved his Church-of-the Naz arene congregation $50 by do ing the job himself. having to fight a nuclear war inadequately prepared and alone," the committee said in a week end pronouncement. The GOP chairman Sunday charged that "left-wingers" controlled the Democratic Party. He named Party Chair man Paul M. Butler, Michigan Gov. G. Mennen Williams, Sen. Wayne Morse (D-Ore.-, and Walter P. Reuther, presi dent of the AFL-CIO United Auto Workers. In a letter to the Democrats Butler said "just a little com placency and relaxation" by party workers "can mean the loss of a good number of close races." IV Save time! Save money! Fly united m mms, enjoy "extra care'' Radar-eqaipped United Mainliners are scheduled to your convenience, fly you to your destination with extra care and hours to spare, often cost you less than driving or rail fare! , Convenient Maintiner departures tot Portland, Seattle, San Francisco Los Angeles, Denver Chicago, New York CALL Medford SPring 3-6233 or your travel agent ifuiren y GET EXTRA CARE AT THE REGULAR FARE-ON UNITED, THE RADAR AIRLINE Rocket Virtually Floated in Space At 79,212 fiies Washington (UPD A top scientist said today that for more than two hours Ameri ca's lunar probe rocket vir tually floated in space when it reached an historic altitude of more than 79,000 miles and slowed to a stop. Air Force figures bore out the scientist's statement by showing the rocket was at about the ' same altitude be tween 12:47 and 2:47 a.m. (p.s.t) Sunday. Starting at 79, 120 miles, it rdse o 79,212 and then fell back to the 79,-120-mile level. ' Gravity- Pull Less Dr. William W. Kellogg, acting chairman of the Inter national Geophysical Year earth satellite panel, explain ed in an interview this was because the rocket was so far away the pull of the earth's gravity was' only one four hundredths as much as at the surface of the earth. If a 200-pound man could be placed on a scale at that distance he would "weigh" only half a pound. The 82 pound rocket's "weight" , by Thornton Predicts Coast Development Newport, Ore. - (UPD - Attor ney General Robert Y. Thorn ton, Democratic nominee for Congress, predicted substan tial development of Oregon's port cities along with expan sion of trade with the Orient in a speech here Sunday. "I do not seek to take any thing away irom the Port of Portland but I want to see Astoria, Newport, St. Helens and other cities in Oregon be come major seaports," he said. the same nt isurement was only slightly more than two tenths of a pound. Kellogg said a better way to picture the situation is to consider that the acceleration of gravity, 32 feet per secondj at tne surtace ot the earth, was only 1 400th as mucW or less than an inch per sec-ond-at that altitude. The rocket, with very little speed left, consequently fell over in a great arch before it began to pick up real speed in its descent toward the earth. Kellogg noted the pull of gravity continues indefinitely into space but just keeps growing less and less.' He said at the great altitude reached, the rocket could have been placed in an orbit around the earth if it could have been given a push in almost any direction. . 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