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10B/12SÖ9/12653

Q^mmk, OetolMr mh,

1936

DüüT Sr. Hooa,
I t 18 witb «Ktram latex-ast t h a t lRi3raa& your book "Dpnaoio
laoaomio©''; e s p e c i a l l y baoaiiisa kere you iiave applied your metbods of aisa^lr&is t o aotual f i g u r e s . X am wjritii^a; t e you t o
aak you a qtieetioo abcaat t h t ahapter on the b u i l d i n g traöe in
St. Louis. I n v e s t i ^ a t i a g the influenos of o r s ö i t on volusta of
i n v a a t e e n t , I isfea s t r u c k by your analyaiB s t a t i n g that the most
i»pcrt&nt factor for b u i l ö i n ë a c t i v i t y i s the foreolosura r a t a ,
whieh 3«ou öossidsy as an i a a i o a t o r of the o i e d i t s i t u a t i o n . I
think the f i r s t part of t h i s s t a t e ©ent i s , a f t s r your auaalysis,
(luite oonviaoin^, but I d o n ' t agrsa with you t h a t the foraolosura
r a t e i s an i n d i c a t o r of the o r a d i t s i t u a t i o n in tho ssnss as i s "
«aant in business oyoXa t h s o r y . Sow t h i s i s , to SOKS e x t e n t , a
question of words. 0f «ore i»portaao« i s the further q^uestion
by what f a o t o r s the fcraalosure r a t e i t s e l f o h i s f l y i s deterfpinad.
I would have t h c m ^ t - aM other i^opls with whoic I aisoussed
t h i s «question haira agraad with «a - t h a t i t ia l a r g e l y deteriainad
by the dsesa no-sup p l y - s i timtloa i n the oarket for '^housing s e r v i o a s '
f h l s f i t s vsfy wall wit*i your figures on foreolosures per 100.000
families whioh show a hlghaf o o r r a l a t i o n with vaosBoias. So I
reaeh the o o m l u s i o a t h a t for a large part new house building
in 3 t . Louis was istarffilnsd by f a o t o r s in the housing' aaxkat
i t s e l f t h a t therefore the long waves in builöia«2 {also found by
J.H. Siggalaaa. Journal A.S.A. 1933 (XXVIII) p . l 7 4 , for the S t a t e s
as a whola) are Xmem^V of an endo^eneous o h a r a o t s r , s i m i l a r to
the ty-Da of «tovematat t desoribed in sy paDSr "Bin Sohiffbauayklus'^l
itt " l e i t w i r t s o a a f t l i o h e « Aroniv'' of 19Ö1, xy.löB. unfortunately
I have no oopy l e f t to inoluüe, but the ohief point i s that tne
inoraass i per i m i t of time of the house "stook" x i s teteiminad
by a a equation of the type
i{t) « - a X (t -t)
«hare a and are only slowly ohangihé^ d a t a and «iiare x i s aaasursd
as d s v i a t i o a s fro» i t s |;r«aai.
I aa Ö0W «aklag a olosar a n a l y s i s , the r e a u l t s of *hioh I
Shall no doubt ssad to you; but I should be very much obliged
to know tshether you a^res with the p r i n o i p a l thought i n tae above.
Thaakihi you i n advanoa, I a©
iQvJin v«ry sinoerely

D£* w.F. Eoos
Qowlss Ceomission for the
Maanaoessent Bf Soiencs
Mining £xohan^e Building
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