May 16, 2011

Henry Morgenthau and his former boss. Real-estate lobbies were wreaking havoc then too.

On this day in 1946 if you were listening to the radio you would probably be hearing an address by former Treasury Secretary under FDR Henry Morgenthau on the state of housing in Post-War America and where the returning Veteran stood in all of it.

Then as now, Real Estate prices were grossly inflated and there seemed to be little in the way of a remedy for it. Measures were introduced such as the Veteran's Emergency Housing Bill to provide a ceiling for prices in an attempt to curb runaway prices. But, as always, lobbies in Washington were powerful and belligerent and the crisis only deepened.

Henry Morgenthau: “Wyatt’s (Wilson Wyatt, author of Veteran's Emergency House Bill) proposal was simply this; suppose a man owns a house, he would be permitted to sell it once at any price he could get for it. But if the house is again put up for sale after that, that same price would be considered the ceiling so long as the emergency lasts. In other words, if he got $10,000 dollars for the house, $10,000 would thereafter be considered the ceiling price. This would have done nothing, of course to roll the real estate prices back from their present dangerously inflated levels. Mr. Wyatt was just trying to work out a compromise. But the Real Estate lobbies wouldn’t hold still, even for that. They know perfectly well that millions of dollars of Black Market money, a lot of it in the form of $1,000 bills is being poured into real estate speculation. Evidently they are unwilling to put an end to it. As far as the Real Estate lobbies are concerned, Real Estate prices can go on rising till kingdom come. Even if the average American and the Veteran are reduced to living in cellers.”

In trying to remedy a situation that had spiraled out of control, Morgenthau, on behalf of the Truman administration sought to ease the anxieties and express some sort of solution to the problem. This radio address, given on May 16th 1946 was part of a weekly series of addresses Morgenthau gave on Post-War problems.

. . .and I left in the Gallo Wine commercial as a reminder.

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