Senator FULBRIGHT. May I ask you this: I can't gather it all immediately. Were they requesting that the RFC finance the purchase of these; is that the nature of it? Mr. GOODMAN. The nature was interim financing, sir. The Army was willing to purchase and lease these homes; and agreed to complete financial payments, so there would be no commitments ultimately out of the RFC. Senator FULBRIGHT. The RFC would get paid by the Army? Mr. GOODMAN. Yes. Senator FULBRIGHT. The Army was going to rent these to officers and Mr. GOODMAN. And personnel; that is correct. Senator FULBRIGHT. So there was no real risk involved by the RFC? Mr. GOODMAN. None whatsoever, sir. Senator FULBRIGHT. They turned it down, did they? Mr. GOODMAN. No, sir. They did their business of delay, delay, delay. The Army had urgent need. The reason for this Life magazine series was to point out the urgency of the need. Yet the RFC did not turn it down; did not say, "Go elsewhere and get your financing." They said, "We have it under consideration. We haven't made a decision. Please wait." The Army called again and again, and they were told, "We have not yet made a decision. Please wait." The Army stressed the urgency of the need; and the RFC said, "Please wait." Senator FULBRIGHT. How long did that go on; do you know? Mr. GOODMAN. On December 29, 1949 Senator FULBRIGHT. December? Mr. GOODMAN. That is August, sir. Senator FULBRIGHT. This is June 1, the proposal. Mr. GOODMAN. June; yes. This is a historic illustration, sir, of my deliberate charge that the RFC is out to kill this industry. On December 22, 1949, the Chief of Staff of the First Army, Governors Island, N. Y., wrote to the dealer involved: DEAR MR. PADULA: I am writing with reference to your visit to this headquarters on December 8, 1949, in connection with the matter of the construction of 30 Lustron houses on land to be leased to you for that purpose at Fort Dix, N. J. In accordance with your request made at the conference referred to above, a letter, dated December 14, 1949, has been sent to the Director of Logistics, Washington, D. C., requesting that the Secretary of the Army furnish the Reconstruction Finance Corporation with a letter stating, in substance, that it is the intention of the Department of the Army to enter into a lease with your company for the purpose of providing land suitable for your project in case the Reconstruction Finance Corporation will finance the development. W. G. WYMAN, Major General, USA, Chief of Staff. Senator FULBRIGHT. What was the RFC saying about that time? Mr. GOODMAN. "We haven't made a decision yet." You see, they come before the public and they leak stories to the public that this company is failing; and they withhold their funds. They grant them "suicide loans," I call them, 60-day loans, in which they know they couldn't meet the conditions of the loan in that time. Then they hold up the use of their homes in areas where they are needed and essential for the military defense. Then they come before the public and say, "This company is failing." Senator FULBRIGHT. What happened to this, finally? Let's finish this up. They never did get together? Mr. GOODMAN. On December 27, sir, the company wrote to Mr. Richard C. Dyas, of the RFC, Chief of the Housing Branch. He is one of the individuals involved in this operation. The letter reads as follows: DEAR MR. DYAS: Reference is made to the meeting held in your office December 5, 1949, at which time we discussed matters of a semiconfidential nature in connection with Lustron-RFC matters regarding the housing order at Fort Dix of 300 units. In accordance with your suggestion, General Rybold and I called on General Hyman, Chief of Staff First Army, and we called on General Devine, Commanding Officer Fort Dix, explaining to them in detail the reasons for the delay in financing the above-referred-to housing order. NORTHERN NEW JERSEY BETTER ARTHUR L. PADULA, President. Yesterday, I met some of the staff of the RFC, and asked them the reason for this delay. They said, "We couldn't go ahead with this order, because we hadn't settled the whole matter regarding the Lustron firm.” In case after case they held up the use of the Lustron homes where there was no risk involved; and then they tell the story publicly that the company is failing. You see, Senator, this goes to the heart of the recommendations of the CIO plan. We say that you cannot let any one agency that is involved in the problem of helping establish this kind of an industry that is so essential for our military needs make the decision unto itself. There ought to be a coordinating council at the top level. I went to see Mr. Foley and urged that this case be discussed at the National Housing Council level. He said, "We do get into these problems. We don't take up the particular cases." I hope this committee wil make possible the transfer of this whole problem to the Housing and Home Finance Agency. It seems to me illogical that this agency took this firm, which is producing such an essentially needed commodity-we talk about the need for increasing production and they put it into the hands of a judge in Ohio. This is their advice to me as of yesterday, that that judge will make the decision as to whether or not this firm is to be liquidated or to continue in operation. The Government's investment in this thing is too valuable, and the possibility of establishing this kind of an industry is too essential to the national defense, to leave it up to a completely uninformed judge, uninformed regarding housing needs or production problems. So we urge this committee to take the complete control of this situation out of the hands of the hostile RFC and establish a coordinating committee between the HHFA, the military services, the FHA, and the National Securities Resources Board, to help establish this industry on a proper footing that is so essential for our future needs. Senator, I have talked about only one case. I could give you dozens of many other companies. Senator FULBRIGHT. Are there others similar to this, with regard to the military establishments? Mr. GOODMAN. Yes, sir. I would like to put in the record- Senator FULBRIGHT. I have an appointment at 4:30. If you have any other cases similar to this, bearing on the Lustron situation, I think you could submit them to us in writing as a report. I have to go now. I Mr. GOODMAN. I appreciate the courtesy of your hearing me. would like to enter into the record, as a supplementary item, the report of the commanding officer at Quantico, Va., military needs have been so widely publicized in the Washington newspapers. Senator FULBRIGHT. He did buy, I think, 40 or 50 houses. Senator SPARKMAN. Sixty. Mr. GOODMAN. He describes them in great detail in this letter. Senator FULBRIGHT. I believe Mr. Lobdell read this letter into the record before you came in. Mr. GOODMAN. All right. Senator FULBRIGHT. He put that in the record a minute ago. (The letter referred to will be found on p. 15.) Mr. GOODMAN. Thank you very much. (The following was later submitted for the record:) CONGRESS OF INDUSTRIAL ORGANIZATIONS, NATIONAL HOUSING COMMITTEE, Washington, D. C., March 8, 1950. Hon. BURNET MAYBANK, Chairman, Senate Banking and Currency Committee, United States Capitol, Washington, D. C. MY DEAR SENATOR MAYBANK: In accordance with the request of Senator Fulbright, acting chairman at the hearing on Lustron, March 1, 1950, I am submitting herewith supplementary report of facts in regard to the issues pending before the committee at that time. Sincerely yours, Director, CIO National Housing Committee. LEO GOODMAN, MARCH 8, 1950. DEAR SENATORS: Supplementing testimony given on March 1, 1950, I would like to submit the following report as requested by Senator Fulbright. We hope it will be possible to include it in the record of the hearing. REPORT OF THE CIO NATIONAL HOUSING COMMITTEE RE RFC's HOSTILITY TO THE INDUSTRIALIZED HOUSING INDUSTRY PROPOSED IN THE REUTHER PLAN SECTION I. Report for CIO National Committee on Housing, attached as appendix A has been considered and approved by the national convention of the CIO in paragraph 6 of the resolution on housing, adopted at the eleventh constitutional convention of the CIO, October 31, 1949, attached as appendix B. MILITARY HOUSING NEEDS In the Annual Report of the Secretary of the Army, submitted to the Secretary of Defense on September 11, 1948, page 106, the Secretary stated: "Provision for critically needed family housing has been one of the highest priority problems of the Department of the Army." He later stated, "this leaves an unfilled requirement (for the Army) of 159,000 sets" (of family quarters). Other branches of the services made similar reports. As a result, Secretary of Defense Louis Johnson appointed a Commission on Military Housing. In a memorandum to the Chairman of the Commission, Secretary Johnson said: "Aside from the humanitarian aspects of the situation, provisions of the finest arms, aircraft, laboratories, and other technical and fighting equipage cannot produce effective defense of the country unless qualified men are available. * * * The military forces of the United States are composed of individuals who value, and are entitled to, the right and ability to live normal family lives. Circumstances peculiar to the type of organization in which they serve have tended to make difficult the attainment of this objective. With the relatively small amount of family housing existing at installations of the military departments, by far the major hurdle has been to secure reasonable adequate housing, either Government-owned and assigned as public quarters, or at a rental which the individual family can afford." The serious nature of this whole problem was brought to the forefront by an editorial in the Washington Evening Star, "Housing restricts defense," which follows: "The Defense Department's annual report confirms Governor Gruening's charges that our Alaskan outpost against aggression is dangerously weak. The weakness results not from any underestimation of the defense needs in that vital sector but from lack of housing. The simple fact is that there are not enough houses or even enough shacks of the type which troops have improvised to accommodate the minimum troop strength deemed essential for peacetime guard duty in Alaska. (See appendix C.) * * In addition to the material regarding the situation at Fort Dix, the following cases might be cited as examples of RFC's efforts to prevent use of prefabricated housing on military establishments while alleging that the firms in their business relationships cannot secure distribution of their product. 1. McChord Field, Fort Louis, and Fort Richardson, Alaska.-A contractor, the Lewis Construction Co. of Seattle, Wash., was advised by the armed forces that a bid would be accepted for 4,100 houses for erection in Alaska. The contractor then came to Washington. After conferences with the Secretary of Air and the Assistant Secretary of the Army, was advised favorable action would be given. RFC then suggested delay. From early December 1949 until this date, the RFC has not yet advised the Lewis Construction Co. as to whether or not they will permit this contract to be performed. 2. Community Builders, Chicago, Ill.-Contract of the delivery of 2,000 homes has been entered. .RFC funds were originally approved. Then, in order to allege failure of Lustron sales this arrangement has been suspended. APPENDIX A HOMES FOR PEOPLE-JOBS FOR PROSPERITY-PLANES FOR PEACE (Department of education and research, Congress of Industrial Organizations) FOREWORD APRIL 6, 1949. In 1940 I commended to the attention of the Government a CIO proposal prepared as a result of the experience of a group of skilled automobile workers headed by Walter P. Reuther for the mass production of defense aircraft. Our program was born out of CIO's desire to make its utmost possible contribution to national defense. Organized labor offered to the Government its knowledge and abilities for use in the national emergency. The critics of organized labor refused to heed our proposals and the advantages which might have been gained had our program had early acceptance were lost by the many months of delay before the automobile industry was required to convert to war production. Once again organized labor, through its accumulated experience and skills in the application of advanced modern techniques, proposes a program seeking solution of our country's most pressing need. The CIO national housing committee approved for presentation to the President this plan for applying production-line methods to the manufacture of hundreds of thousands of sorely needed homes. The chairman of the CIO national housing committee, who has aptly said, "Last year's housing crisis has turned into today's housing tragedy," in the main was responsible for the preparation of this plan. This proposal of the CIO national housing committee should be given serious consideration at the highest levels of government and immediate steps taken to put the plan into gear. I hope the Nation's leaders will not make cumulative the tragedies which resulted from the failure to adopt our earlier proposals by delaying the implementation of this desirable program. PHILIP MURRAY, President, CIO. 34 INTRODUCTION One consequence of the plan here presented is certain. The spokesm special interest will call it everything from impractical to fantastic. By their voices are familiar. We heard them raised against full economic zation while Hitler's legions were crushing freedom throughout Europe. S we shall hear them again. These apostles of business as usual and economic scarcity sneered labor in the automobile industry proposed that the men aid tools making could be put to work making planes. They were wrong. It is impossible and pointless to try to evaluate the loss in time and resulting from industry's refusal to put aside business as usual in favo conversion to military production in the national interest. tragic accounting, we need only remember that those who scorned Presi Roosevelt's call for 50,000 planes as visionary lived to see a mobilized Ame exceed that figure by far, and that those who cried impractical to labor's Forgetting posal for conversion of the automobile industry saw between 80 and 90 per of that industry's machine tools and as much of its manpower harnessed plane and armament production in an incredible demonstration of industr might. Today America faces a different crisis, but the old issue has reappeared: Sh business as usual prevail over the need to mobilize our industrial resources the national interest? Hitler is gone, but the legacy of the war he made is still with us. of American families in thousands of slum tenements, shacks, and trailer camp cramped and crowded as never before, need homes. Millions of veterans, 4 year after demobilization, are increasingly embittered at democracy's apparent ina Million bility to house its defenders. business as usual cannot meet the national housing needs. Inherently incapable of adjustment to crisis Millions of Americans will continue to be denied decent low-cost housing in wholesome communities unless we launch a large-scale mass-production hous ing program, based on the full application of our most advanced technology. The production engineering and scientific know-how which can bring into being the B-36 or the jet F-86 and split the atom can certainly, if applied, build a decent inexpensive house. The technicians and skilled workers are ready, available, and willing. They ask only for the opportunity to go to work on our national housing program. Now standing idle or only partially used, Government-built airframe plants and certain other Government-owned facilities located throughout the country, are ideally suited to the mass production of low-cost, high-quality homes. Thousands of machines, now motionless in War Assets Administration storage sheds, could be put to productive use to build needed homes for American families. The tool-machine industry, currently suffering from falling demand and rising unemployment, could supplement WAA machinery with required new equipment. The basic machinery needed-large and small blanking and stamping presses, sheet-metal forming and rolling machinery, riveting and welding equipment is common to both mass production of low-cost housing and production of advanced military aircraft. changed application of tooling to basic mass-production machinery. Shifts in types of production are achieved by In the auto industry the major portion of tooling work for new models has been completed. There are currently close to 4,000 skilled technicians in the tool and die and related skilled-labor categories of the industry unemployed. These thousands of technicians could be employed to build the tools, dies, jigs, and fixtures required in tooling existing basic machinery for the mass production of homes. Dangerous soft spots are already developing in our economy. On February 4, 1949, the United States Census Bureau reported that total unemployment in the Nation rose in January 1949 to 2,650,000, an increase of 600,000 over January 1948. These figures should impress on the most cautious the need for vigorous countermeasures, the more so in view of President Truman's recent State of the Union message calling for creation of a million new jobs. A bold, realistic approach to the mass production of low-cost housing through utilization of idle plant and labor reserves will give us homes for people, jobs for prosperity, and planes for peace. |