STATE BONUS FOR COTTAGES 159 



conditions had returned, it would be difficult to get 

 an economic rent for new cottages built without 

 State help. In fact such a plan would repeat and 

 perpetuate the evil of uneconomic rents from which 

 we are now suffering. 



Whatever doubts there may be about the trend 

 of prices after the war, we think that the imperative 

 necessity of being ready with a definite housing 

 poUcy before the end of the war compels a decision 

 forthwith on certain main points so that the requisite 

 legislation can be passed and the necessary arrange- 

 ments made. In our view if the war ended in 1918 

 it would not be wise to assume that the cost of building 

 would average less than £280 per cottage over the 

 following five years, 1919-1923, or that the State 

 would lend at less than 5 per cent, over the same 

 period. On a sixty years' sinking fund basis we 

 must not expect the economic rent of a new five-room 

 cottage to be less than the amount we have already 

 mentioned, viz. 85. But as we have said, the State 

 should pay as a war expense, without charging it on 

 the cottages — ^that is to say by a bonus — ^a consider- 

 able part of the extra cost of building which is the 

 result of the war. The financial arrangement made 

 under the Emergency Housing Act 1914, by which 

 10 per cent, of the capital cost of the proposed cottages 

 was to be granted by the Treasury as a bonus to 

 meet the increased cost of building, was a sign that 

 in matters of housing the banker's point of view had 

 ceased to confine the State's outlook. The precedent 

 which that Act made of setting aside actuarial logic 

 in order to cope with an impending crisis of unem- 



