rise, two days before there was an advance in price of 40 cents a keg.
When it is necessary in all ways to keep down prices for the sake of low
rents, and the dividing-line between profit and loss is so precisely
drawn, a saving of $10 on one such transaction is no trifling affair.
Nor does the Association save by cheating its tenants as the former
landlord did in the house where the twenty-seven thicknesses of
wall-paper were removed. It was found that this particular miscreant had
used manure instead of hair as a binder for the plaster.
By standardizing the various minor hardware a further saving is
effected. There are rim locks of uniform pattern for the outside of the
door, mortise locks of one type for the inside.
The paint is of much the same color. That means a match is readily
obtainable without making a special mixture.
All houses are fitted up for gas, an inexpressible relief to the
housekeeper who must otherwise face the hot range in summer.
Every effort is made to conserve the backyard trees, and it is the
superintendent’s favorite theory that these trees are meant to be sat
under and played under, as well as to shade the windows and the courts.
The Association in its office-building at 613–15 Lombard Street utilizes
the first floor for its own purposes, and rents the two upper floors to
careful tenants. The repair shop in the basement has been mentioned. All
day long the tenants of every race, and condition come to pay the rent
or to seek light upon the wide range of personal and social problems
indicated in the preceding pages. They are given to feel that the office
is their office, and that a deaf ear will never be turned to anyone who
really needs and honestly deserves counsel. They are receiving free of
charge—though they may be unaware of the fact—a business and a social
education. They find the data bearing on their individual cases
card-catalogued, and if they should be guilty of evasion, an accurate
system of book-keeping will bring them to confusion. No record of a
transaction in the business of the Association depends upon haphazard
recollection or mere say-so. The office-hours are conducted without fuss
or flurry, the floors are spotless, the desks are cleared for action.
Waste motion is eliminated, the virtues of thrift and of system are
illustrated, and still there is heart and human feeling in the
enterprise. It is not possible to visit the headquarters without
realizing at once the atmosphere of sincerity and diligence and
practical success that surrounds the work. It is philanthropy; and it is
business.
V
DOES IT PAY?
Now we come to the question—does it pay? Obviously there are two sides
to the answer, one the material, the other the spiritual. Let us
consider, in the first place, the actual cash return.
We have already cited the satisfactory financial results in the case of
a few typical properties. It is a postulate that those who are looking
for the largest possible dividend on an investment without regard to any
other consideration will scarcely be satisfied with the 4 per cent.
which the Association is paying. The stockholders of the Association and
the directors as a rule are glad to realize that their investment is
providing good homes for the poor at low cost, and they are content to
forego the somewhat higher profits that might accrue if nobody cared how
the tenants lived.
A trust company, in behalf of an estate, had charge of a group of small
houses erected as model homes for the poor. Under the trust company’s
management, the average gross income from these houses for three years
was $72 per month and the net income was $14.34 per month. The property
came under the control of the Association. During the first two years
under the new order the gross income was $148, and the net income was
$70. The trust company, far from the scene, sent a clerk or depended on
the services of a local real estate agent. Neither personally interested
himself in the welfare of a tenant. The Association sent the friendly
rent-collector who immediately reported the need of repairs, watched the
workmen, stood at all times in the closest personal relation to the
living problem of the householder, and obtained good tenants as soon as
vacancies occurred, thus reducing to a minimum the losses due to unlets.
We see that under the system of absentee landlordism the net returns
were about a fifth of the gross receipts, while under the system of
constant personal vigilance the net returns were about one-half of the
gross income.
The inherent possibilities of the Association’s system extended to
Chambers of Commerce or Boards of Trade or Women’s Clubs are almost
infinite. One of the best rent-collectors the Association has had says
that the essential things are “to know the value of money and of
punctuality, a little housekeeping, a little home-making—the rest will
come in the doing.” Collectors of this type, in the employ of the
Association, could give invaluable aid as agents to trust companies and
other organizations that occupy a fiduciary relation toward the owners
of property in the congested areas.
The organization and operation of the Model Homes Company, formed to
build the group of houses in the Richmond district, have been described.
To show how closely, from long experience, the Association figures on
the cost of repairs and other expenses, a leaf may be taken from the
account books of the Model Homes Company. These estimates and actual
costs are, except as noted, for a year ending November 29, 1916.
Estimated Actual
Taxes $ 780.00 $ 779.97
Water rents 382.50 382.50
Repairs & allowances 675.00 327.75 (11 mos.)
Depreciation 450.00 450.00
Unlets 302.00 138.10 (11 mos.)
Losses 9.00 (11 mos.)
Fire Insurance 30.88 30.88
Liability Insurance 26.66 26.68
Cost of Collection 441.75 413.60 (11 mos.)
Interest on Mortgages 1,870.00 1,575.36 (11 mos.)
Here is another example of the profitable handling of houses that had
seen better days.
In 1903 the Association bought as agent two four-story brick houses
about half occupied by a low class of negroes. Everything within and
without was as bad as it could be. The houses had been converted from
private residences into tenements without the knowledge of the city
authorities. Behind the larger houses were six of the little “one, two,
three” houses, all served by one hydrant. The owners had relied entirely
on an agent who cared for nothing but the rents. When at last they saw
what they had on their hands they were horrified, and parted with it for
a lower price than they had named at first—$4,870.26. The alterations
and repairs came to $3,214.06. The ground rent was $1,700. The insurance
was $45.00. Five per cent. commission to the Association for making
repairs added $160.70, giving a total cost of $9,990.02.
Now let us see what the Association got out of it, after putting in
toilet facilities, skylights and windows, repairing roofs and rain
conductors, plastering the walls and painting the woodwork, providing
fire-escapes and making all minor repairs. In the larger houses the
weekly rents were 78 cents per room, and in the smaller 55 cents per
room, or $1.65 for the house.
The rents in the first year, 1904, were $1,210.95. Taxes were $126.21;
water rents, $41.50; repairs, $174.37; 7½ per cent. commission to the
Association, $90.80. This gave a balance to the owner of $778.07, or a
net return of 7.7 per cent. on the investment.
In the year following the rents were $1,203.55, and the balance to the
owner was $822.81, or 8.2 per cent. net on the investment.
The Association does not expect to show a return greater than 4 per
cent.; it does not promise even this. It finds it advisable in some
cases to withhold a return for a time and turn back what profits there
may be into the improvement of the property. This has been done by the
express desire of the owners in certain instances. A temporary
stringency of the market and the high cost of building materials or of
labor are conditions that are instantly reflected in the balance sheet
of an organization traveling on so close a margin. But prudent husbandry
has made it possible to show that while the return in exceptional
instances has fallen below four per cent. it has frequently risen to
double or nearly double that figure. We have seen that on the League
Street houses in the Second Ward the return soon after occupation was
7.5 per cent. per annum, and these were houses in an exceedingly
dilapidated condition. The North Third Street property from which the
hundreds of barrels of filth were taken showed a return of six per cent.
in the first year.
The total income of the Association for 1916 was $26,496.23. From
rentals there accrued $18,834.23; the agency commissions totalled
$3,792.84; the dividend on Model Homes Company stock was $1,400.00;
commissions on new construction and renovation planned and supervised
for other owners amounted to $2,469.16. As the expenses of operation
came to $17,799.26, the net earnings for the year were $8,696.97. The
dividend of 4 per cent. payable February 1, 1917 left a small balance of
$13.26 to add to the outstanding surplus of $15,973.01,—a surplus
chiefly created by gifts and bequests to the Association.
It should be noted that the above showing is made in spite of certain
adverse circumstances. Materials and labor had risen in price. The sum
of $896.40 was charged against the year’s earnings for repair work
undertaken in cooperation with the Emergency Aid Committee. A capital
stock tax of one-half of one per cent., collected on the entire issued
capital, covered a period of 14 months and amounted to very nearly
$1,200. Under such conditions as these it would have been impossible to
maintain the four per cent. dividend without the commissions earned on
the planning and supervision of new construction and initial renovation
of agency properties, as well as the customary agency fees. There is no
doubt that the Association, which is very distinctly a philanthropic
institution to which the business administration is incidental, should
be relieved of the heavy burden of the capital stock tax. The dividends
the Association periodically declares are paid to attract investors in
dwellings for the poor. They are not earned for the sake of enabling
those who own small houses to amass a fortune.
Such work as that of the Octavia Hill Association brings returns that
are beyond the immediate cash appraisal, and creates a satisfaction
deeper than any that has to do with the dollar-sign. In scores of
American cities that are now planning good homes at low rates for
earners of modest wages, made necessary by the rapid expansion of
industrial interests, it is realized that it is fundamental to civic
prosperity, as well as to individual felicity, to give the people who
are not rich the fullest measure of comfort and happiness procurable for
what they are able to pay. The public is learning day by day what it has
a right to expect, and is finding out that the corruption of politics,
while pretending to confer a benefit, often perpetrates the rankest
fraud. The taxpayer, intelligently informed, is demanding the worth of
his contribution to the city treasury. The children in school are
acquiring that salutary discontent with things as they are and that
spirit of intelligent interrogation that are the conditions precedent to
human progress. For it is rightly said that asking questions is the
beginning of reform.
Such an understanding as that which the Octavia Hill Association
promotes between landlord and tenant pays dividends in the supreme
pleasure it is to any wise and kind trustee of great wealth to know that
his money is easing the burden of living for the humble toiler. The
absentee landlord, content with an agent’s accounting, who does not care
to take the trouble to see who occupies his houses and what kind of
houses are occupied, can never realize the cordial satisfaction that one
who takes an intimate personal interest in his property experiences.
The investment is in so much more than bricks and mortar, concrete and
cast iron. It is an investment in human lives, and it underwrites the
welfare of the city, the country, the world in the age to come by
assuring the health and happiness of the unborn. If he who makes two
blades of grass grow where one grew before is a benefactor, then what is
he who tears down a ramshackle tenement and rears in its place such a
house as the Casa Ravello, where many families enjoy the privileges of
privacy and individuality, or a group of houses such as those in the
Richmond district, where the children have abundant play room and each
occupant controls half his house, or a small home for one family of
which so many examples are entered on the books of the Association in
various localities and at varying prices, all within a modest range?
The Octavia Hill investor can be very sure his dividend does not come
from living conditions that it would perturb an active conscience to
know about. There is nothing that need fear exploitation. A constant
prophylactic scrutiny prevents those living conditions that are the
shame of every city that in this twentieth century tolerates them.
If the Association were engaged in its blest business for the money
only, it could not have enlisted through all these years the intense
interest of so many who have realized in their own experience the
correlation of the kind of house a person lives in and the kind of
character that is therein developed. Too long have we taken it for
granted that the poor love to live poorly: a survival of the mediæval
tradition that only the nobles had noble emotions, and that the crowd
merely existed as a foil to the luminous brave deeds of a chivalry
monopolized by the upper classes. Today we feel that
“The best things any mortal hath
Are those that every mortal shares,”
and in that faith those who know what it means to have “the social
conscience” plan and act.
Year after year the Annual Reports of the Octavia Hill Association have
presented with brevity and precision the summation of the progress in
the twelve months. Here are set down the statement of net earnings, the
explanation of unusual expenditures, the current history of properties
long in possession of the Association or newly acquired, the transfer of
property for any reason, the peculiar problems that have presented
themselves, the formation of subsidiary or contributory bodies, the
particular objectives in view or the directions in which the Association
is prepared to offer especially helpful service. The audited Treasurer’s
Report appended enables one to see in its clear and simple presentment
where every cent has gone, and what the return has been on the Agency
Account for each property. But for all the explicit story, one still
must read between the lines to comprehend completely what has been going
on in each of the homes which—without an odious paternalism—has come
under the trained and keen observation of the friendly rent-collector
and the executive superintendent.
The question of whether the enterprise pays or not is put on the highest
ground by those who best understand what the Association is not merely
trying to do but effectually doing. Go to the little Hector McIntosh
playground and watch the children laughing and caroling in the swings,
digging in the sandpile and pretending a sea-beach, sliding uproariously
down their little wooden toboggan, racing about at tag, gay as
butterflies, and ask them if it pays. Go to the mothers in the shade of
the trees of Workman Place, or culling fresh vegetables and flowers from
their own little gardens, there in the thick of the maelstrom of the
shabbiest part of the city, and ask them. Go to those of the negro race
who have hitherto been forced to live on the Jim Crow leavings of
everything, whether they wanted to be clean and decent or not, and ask
them. But do not ask the landlords who are losing money because the poor
are discovering what it is reasonable to demand of every landlord. Do
not ask a miser or a skinflint or a misanthrope if it pays.
This study has been completely a failure if it has not disclosed the
fact that sense and sentiment are yokefellows to mutual advantage in
this undertaking. There must always be those for whom philanthropy and
business cannot discover a common denominator. That is why the personal
examples of Octavia Hill and of those who follow in her train are of
value, for these examples prove to a thinking majority that such work as
theirs is not the altruism of dreamy, vague enthusiasts, but that of
persons with “their souls in the work of their hands,” who are
translating into a balance on the right side of the ledger their
aspiration for better things for “the poor and him that hath no helper.”
In twenty-one years this program and its outworking have been submitted,
not once, but again and again, to the pragmatic test, and have emerged
triumphant.
The principles on which the enterprise was founded and is conducted
promise its immortality and its expansion indefinite. It conflicts with
no extant organization except the cohesion of the predatory forces of
greed and deception. It does not mean the duplication of effort or the
multiplication of superfluous offices; it does not economically call for
amalgamation with other societies of parallel function. It meets a need
that is real and constant, and it invokes the support and cooperation of
good citizenship. It must be allowed to help the city more and more, and
in its turn it must always receive the official aid which has been and
is generously accorded.
In every large city a problem similar to that which has faced the
Association must be met, if the community does not shirk the obligation
to its own dependent stratum. In every large city the prestige of the
whole community is impaired if dirty streets, a lack of good water,
smoke-clogged air and disreputable hovels are constituents of the social
order. It is a truism that wherever a large working population
congregates these are evils that call for a vigil unceasing. The
fundamental advantages that make life livable for rich and poor alike
are not wafted on the breath of a pious aspiration. They come by
somebody’s downright work for them. They come by the banded effort of
good citizens. They come by an unremitting holy warfare on all
Apollyon’s brood of evils that are the sequel to the reign of the
spoilsman in politics. If it be a true religion that visits the
fatherless and the widows in their affliction then this is a work that
may well engage the attention of the professors of that religion, for it
keeps a roof over the heads of many who cannot satisfy a mercenary
landlord’s demand. Its appeal is various and profound; its outreach is
beyond any hard-and-fast limitation; its record is an open book of
progress step by step, season by season toward a goal clearly seen from
the start. The Octavia Hill Association has kept faith with the sainted
memory of her whose name it bears; it has kept faith with the great
public of the city which it is destined to serve more largely as its
resources increase and its assistants multiply; it has kept faith
finally, with its own ideals, which are those of all who believe in that
“far-off divine event
To which the whole creation moves.”
APPENDIX I
OFFICERS AND DIRECTORS OF THE OCTAVIA HILL ASSOCIATION
CHARLES H. LUDINGTON, _President_
Curtis Publishing Company.
THEODORE J. LEWIS, _Vice-President_
Morris Building.
JOSEPH R. CARPENTER, JR., _Treasurer_
THE PENNSYLVANIA COMPANY.
MISS HELEN L. PARRISH, _Secretary_
313 SOUTH TENTH STREET.
MISS EDITH F. BIDDLE
JOHN IRWIN BRIGHT
ARTHUR C. EMLEN
MISS HANNAH FOX
NATHAN HAYWARD
EDGAR B. HOWARD
MISS MARY H. INGHAM
DR. H. R. M. LANDIS
MISS ESTHER LLOYD
STACY B. LLOYD
DR. MARY T. MASON
EARL B. PUTNAM
ISAAC W. ROBERTS
PARKER S. WILLIAMS
DR. GEORGE WOODWARD
OFFICE OF THE ASSOCIATION
613 AND 615 LOMBARD STREET
FREDERICK C. FELD, _Superintendent_
APPENDIX II
BY-LAWS OF THE OCTAVIA HILL ASSOCIATION
ARTICLE I. NAME.
The name of the Association shall be “THE OCTAVIA HILL ASSOCIATION.”
ARTICLE II. OBJECTS.
The objects of this Association are as stated in its certificate of
incorporation, as follows: “Holding, selling and leasing real estate.”
The aim is to improve the living conditions in the poorer residence
districts of the City of Philadelphia. To accomplish this purpose the
Association buys dwellings and other real estate and improves them so as
to make them habitable and healthful. It endeavors thereby to improve
the moral and physical condition of the tenants. It offers its services
as agent to other owners of like properties. In this capacity it attends
to collections, alterations and repairs, clerical and special work,
general oversight, etc., and makes a fair charge for such services.
ARTICLE III. PRINCIPAL OFFICE.
_Section 1._ The principal office of the Company shall be in the City of
Philadelphia.
_Section 2._ All meetings of stockholders of the Company and the meeting
of Directors shall be held at the office of the Company, or other
convenient place in the City of Philadelphia.
ARTICLE IV. MEETINGS.
_Section 1._ The annual meeting of the stockholders shall be held at
such hour and place as the Directors may appoint, on the fourth Monday
of January in each year.
At the annual meeting the Directors shall present a report of their
proceedings and of their financial transactions, and it shall be in
order for any stockholder to present for consideration any subject
relating to the welfare of the Association. Notice of all annual
meetings to be mailed to the last recorded address of each stockholder
as furnished to the Secretary as hereinafter provided, at least five
days before the date of said meeting.
_Section 2._ Special meetings of the stockholders may be called by order
of the Board of Directors when deemed necessary by them, or on the
written request of at least five stockholders, and notice of such
meetings shall be given in the same manner as above provided in the case
of the annual meetings.
_Section 3._ The stockholders present in person or by proxy at an annual
meeting shall constitute a quorum; at special meetings one-third in
interest of the stockholders in person or by proxy shall be required to
constitute a quorum. All proxies shall be dated within ninety days of
the meeting when they are to be used.
_Section 4._ The stockholders at the annual meeting may name a maximum
sum, all or any part of which in their discretion, in such proportions
as they see fit, the Directors may appropriate as salary for the
Officers.
_Section 5._ At each annual meeting the stockholders shall elect twenty
of their own number by ballot, to act as a Board of Directors. The
majority of the votes cast shall elect. At such election the
stockholders shall appoint two persons to act as Judges of the election,
and the election shall be conducted in accordance with Section 8 of the
Act of Assembly of April 28th, 1874, regulating corporations. Cumulative
voting shall be allowed as provided for in Section 10 of the said Act of
1874, and amended by Act of April 25th, 1876.
_Section 6._ The Board of Directors shall hold stated meetings on the
day and immediately after the annual meeting. It shall hold regular
monthly meetings at such place and on such day and hour as it shall from
time to time determine. Special meetings shall be held upon the call of
the President or two Directors, said call to be mailed to the Board of
Directors at least three days before the time of meeting. Those
Directors who are present shall constitute a quorum for the transaction
of business, provided not less than three are in attendance.
ARTICLE V. DIRECTORS.
_Section 1._ The business of the corporation shall be managed by a Board
of twenty Directors who shall be elected by the stockholders at each
annual meeting, and shall hold office for one year or until their
successors shall be chosen.