Word: lustron
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...Reconstruction Finance Corp. finally decided that its grandiose venture into prefabricated housing was a dismal flop. It began foreclosure proceedings against Lustron Corp., after sinking $37.5 million of public funds into Lustron's scheme to produce low-cost enameled-steel dwellings on an assembly line. Lustron actually produced only 2,200 houses, repaid not a cent in interest or principal on RFC's loan. By foreclosing, RFC admitted, it could not hope to recoup much more than 5? on the dollar...
Prefabricated housing was still haunting RFC last week. Despite its disastrous experience with Lustron, where it poured a cool $37 million down a rathole (TIME, Sept. 12), RFC had lent about $2,400,000 to Reliance Homes of Lester, Pa. The money was' to be used to finance mass production of a low-cost, ribbed-aluminum, factory-built house. The three-bedroom house "package" came in seven sections, could be assembled on the site by a crane and five workmen (see cut) in 1½ hours. But Reliance found that the house, boxlike though it was, cost around...
...Senate, where Arkansas' Democrat J. William Fulbright asked for a full-dress investigation of RFC loan policy. He wanted more details on McCarthy's $70 million request, as well as the facts behind such loans as $44 million to Kaiser-Frazer Corp.; $37.5 million to Lustron Corp. (see below); $12 million to Northwest Airlines; $6 million to Waltham Watch Co., and the Texmass loan...
With great reluctance, RFC last week made a long-expected decision: it got ready to seize the assets of Lustron Corp., which had repaid none of the $37.5 million it borrowed to build all-steel houses. RFC's announcement was far overdue as Lustron had never showed more than a 50-50 chance of success...
...sadly admitted that its foreclosure of Lustron would yield less than $10 million in machinery and houses on hand. The only way foreclosure could be avoided, said RFC, would be for some private company to take over the $37.5 million Lustron debt. RFC didn't "see any sign of that happening...