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About Medford mail tribune. (Medford, Or.) 1909-1989 | View Entire Issue (June 19, 1962)
MEDFORD MAIL TRIBUNE. MEDFORD. OREGON TUESDAY. JUNE 19. 1962 A 3 I if Your Money's Worth By SYLVIA PORTER Copyright, Hill Syndicalt, Inc. Two Medford Physicians Give Views on King-Anderson Plan REAL ESTATE BOOM DYING TOO Another boom which has been going on since World War H is dying under our eyes. It is the boom in real estate and it flashes the warning of a steep rise in foreclosures, de linquencies, losses on sales of homes unless leaders in government, finance and the housing field recognize the dangers in time, consider what safeguarding actions might be taken in advance. This is the unmistakable implication of an investigation of the quality of home mortgages included among the scholar ly papers submitted by the National Bureau of Economic Research in its just-published 42nd annual report. The study was made by Professor James S. Earley of the University of Wisconsin. Throughout the entire postwar period when terms of home mortgages have been progressively liberaliied to an extent where there is no doubt that the quality of home mortgage debt has deteriorated Earley points out that foreclosure and loss rates have "stood up very well." The reasons have been a combination of favorable circum stances high employment, relative economic stability, rising house and residential land values, a rapid growth ' in population a high rate of formation of new families needing homes, general inflation. As a result, "Most straitened borrowers have been able to sell their houses for more than enough to cover their in debtedness, and the holders of most defaulted mortgages have been able to sell the foreclosed properties without loss." Now, though, Earley stresses, "There is increasing evi dence that this favorable combination of circumstances is passing." The rate of family formation has been declining recently because of the simple fact that in the depression 1930s and early 1940s, the birth rate in our country went way down, and so today, in the early 1960s, there are fewer young folks to get married. This situation won't be reversed until the war baby crop reaches the marriage age and that won't be for another few years. In addition, "Prices of existing houses in many areas have ceased to rise or have begun to fall." This means over - mortgaged families can't expect to be bailed out by price rises as in the past. Simultaneously, vacancy rates, both on rental properties and on homeowner units have been climbing from about 2.5 per cent in 1950 to 5-6 per cent in the mid-1950s to about 8 per cent last year. Again, this suggests hard-pressed fam ilies won't find it so easy to get out from under. Earley admits conditions vary among sections of the country, but his conclusion Is flat: "The general sellers' market in residential houses is disappearing." This wouldn't be a cause for alarm were our residential mortgage debt of high quality, but much of it isn't. The average maturity of VA and FHA loans on new houses has risen from about 20 years in the early post-World War era to 29 years nows, and a similar trend has occurred in the typical maturity of conventional residential mort gages. There has been a sharp increase in the ratio of loans to value strengthening the "possibility of deteriora tion." In 1960 the average loan-to-value ratio topped 91 per cent for FHA loans and was at 97 per cent on VA loans. Already, disturbing trends are emerging. The foreclosure rate which has been extremely low by all historical standards for many years has increased from 1.96 per 1,000 houses in 1957 to 2.35 per 1,000 houses in 1958, to 2.65 in 1960. The delinquency rate reflecting the failure of borrowers to make scheduled mortgage payments promptly began climbing rapidly in late 1957, and the economic advance which started in the spring of 1961 "has not prevented a further rise." This rate, Earley underlines, provides "sensi tive and discriminating evidence.'1 ' Earley is saying trouble about home mortgage debt is on the way. Surely, the time for all authorities to think hard about what steps should be taken to avert such trouble as this is before it hits. Two Medford physicians, whose personal political per suasions differ widely, ap peared together at the Mon day noon meeting of the Med ford Chamber of Commerce Roundtable to register joint opposition to the proposed King-Anderson bill. Dr. M. Donald McGeary, who spoke first, Indicated his companion speaker, Dr. Thomas Rutter and said, "This is a little like having Barry Goldwater and Adlai Stevenson join in support of the same measure. Perhaps this will give you some indi cation that there are things wrong with this bill." The two doctors did dis agree with each other on sev eral points during their talks and the discussion period afterward, but they were united albeit for different Exams Announced For Federal Posts Former Railroad Company Turns To Nuts and Bolts New York - fUPD - About the only relationship between MSL Industries, Inc.. today and the company which it once was, explained the presi dent, is a concern over con nections. It once was a railroad opera tion, the Minneapolis and St. Louis Railway company. But late in 1960 all of Us railroad properties went to the Chicago and North Western, and it acquired Heads and Threads, an importer and dis tributor of nuts, bolts, screws and washers; the Universal Screw company: the Stevens Socket Screw company, and the Joliet Wrought Washer company. Wisconsin Bolt & Nut company, an affiliate of Universal, also was bought by MSL. It has added others since, one only last week. Tax Loss Carried Over From its railroad operation. MSL carried over two things, said President Arnold R Meyer. One was an estimated tax loss carry forward credit of $25 million, from the sale of the railroad properties, and the other was an idea, which persisted for several months, that it still had railroad inter ests. This is not the case, ex plained Meyer, "but we still run into people who think so." Headquarters of the opera tion are in Chicago, and Meyer was here to appear before the New York Security Analysts, to whom he described the com pany's favorable sales and earnings picture. "None of the railroad traces are left," said Meyer. "There isn't an operating railroad man left." reasons in recommending to the Roundtable that the King Anderson bill is not the an swer to the question of how medical care for the aged should be provided for. Proud of Service "I for one am proud of the record of service physicians have given to the people of this country," Dr. McGeary said. "Our medical statistics are superior to those of any other nation in the world." The doctor then recalled a number of the diseases and ailments which have been controlled or eliminated in America through the efforts of medical research. "After these many remark able achievements, now all of a sudden other people come along and try to tell us how this problem of medical care for the aged should be solved. It makes me a little angry," Dr. McGeary said emphat ically. Doctors As A Group Doctors as a group, Dr. Mc Geary insisted, are educated and knowledgeable politically and economically. Further, he said they know more about medical care programs than lay people do. He said that proposals simi lar to King-Anderson in other countries in the world have been unanimously unsuccess ful, and noted that 900 physi cians in the Canadian prov ince of Saskatchewan have sworn to strike on July 1 if certain medical care propos als are put into practice there. Dr. McGeary warned that such legislation as the King Anderson bill could only have a debilitating effect of the high standard of service currently maintained by the medical profession in the United States. Fall By Wayside "When government steps into medicine," he said, "car tain things fall by the way side." The speaker conceded, how ever, that the medical profes sion warrants criticism for not having come forward with a reasonable alternative to present to the American people. Dr. Rutter, who prefaced his remarks by saying that he spoke only for himself, said it is difficult now to view these medical care proposals objectively. "The weeds of partisan in- high, the is- terest have grown they have obscured sues," he said. Unlike his colleague, Dr. Rutter strongly criticized the American Medical association. "The AMA has done a wretched job of leading us," he said. "The association's record in matters of this sort have been very poor. They've been against everything since the year 1." Broadcasting Statements "In this particular issue," he continued, "the AMA has been guilty of throwing up red herrings, and broadcast ing misleading statements." "Is there a need for some plan to help the aged meet whatever medical expenses they may incur?" the doctor asked. As far as he was concerned, Dr. Rutter said, the answer was a flat affirmative. He said he had seen too many cases of people who lead in dependent, self-sufficient lives during their productive years, only to be "wiped out" by an illness requiring hospitaliza tion during the late years of their lives. But, the speaker protested. grafting such a proposal as the King-Anderson bill on to the Social Security program is the wrong way to do it. Social Security, which he described as a "welfare in strument designed to protect the people from want and destitution," is already in fi nancial trouble, Dr. Rutter said. Unearned Increment "There is an annual un earned increment of debt building up," the doctor warned, "so that now an in dividual pays 20 per cent more into the program than what his benefits will become." The problem will be griev ously worsened, he said, by tacking medical care onto a program that is already in debt. Another feature of the Anderson bill which Dr. Rut ter said particularly dis turbed him was that "every one was included in the mea sure, willy-nilly." Many peo ple don't need it, he argued, therefore the inclusion of all is unnecessary. Participation in the program should be vol untary, he stated. Roundtable Chairman Bill Longmore said after the pro gram that he will make an ef fort to schedule a speaker at some future meeting to pre sent arguments in favor of the King-Anderson measure or some similar medical cars proposal. 772-6128 for Visit Beautiful 3wm si, Memorial Park and Funeral Home "A Name To Trust" 1395 Arnold Lane Phone 773-7338 United States Civil Service commission has announced ex aminations to fill several po sitions. Included are a trans mitter and receiver operator and maintenance technician for filling positions of the U.S. Information agency's Voice of America program; automative mechanic; mobile equipment servicer; mobile equipment mechanic; unit aide; conservation engineering aid; appraisers and realty of ficers; and engineering aide. Additional information and applications may be obtained from the Post Office and from the Eleventh U. S. Civil Service region. Federal Office building, Seattle 4, Wash. 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