of the qualities of the housing available to workers, the gains were more impressive than in home ownership.

Of the total expenditures of the families surveyed in 1934-36, over 25 percent were devoted to housing, fuel, light, and refrigeration, a significantly higher proportion than was found in the 1917-19 survey. Since the incomes of the 1934-36 families, in constant dollars, averaged about 10 percent higher, while rents were at about the same level, the increase in the proportion spent for housing may be due in part to the rise in home ownership. Other factors which probably exerted influence included improvement in the quality of housing, higher fuel bills resulting from central heating, and increased utilization of electricity not only for light but for operating electrical appliances. The fact that the percentage going for housing declined from about 31 percent in the lowest income group to 18 in the highest also suggests that substantial numbers of families had attained a sufficiently satisfactory level of housing so that they preferred to devote increases in income to procuring other goods and services.

Housing Characteristics in the Depression Years. "The home of the typical wage-earner or clerical family with an income above $500 had," according to the 1934-36 study, "a bathroom with inside flush toilet and hot running water. It had electric lights and gas or electricity for cooking." Among all of the tenant families interviewed in 42 large cities, 98 percent were living in dwellings supplied with running water, 90 percent had bathrooms, and 96 percent had inside flush toilets. Owner-occupied housing was even better equipped with these basic essentials. Home owners also had larger dwellings-an average of 6.4 rooms, compared with about 4 rooms for rented houses and about 4%1⁄2 in apartments.

The omission from the 1934-36 study of relief families and of families with incomes below $500 leaves unanswered the question as to how many seriously substandard dwelling units may have been occupied by families not within the scope of the survey. Certainly, the plight of the unemployed workers and families on relief was in many instances desperate. Nevertheless, most workers had been able to achieve far better housing than had been possible in the early years of the century, or even during World War I.

Federal Housing Legislation. The depression crisis of the early 1930's brought demands for Federal action to rescue the lending institutions, prevent widespread foreclosures of home mortgages, and provide a stimulant to the economy. The first move occurred in 1932 with the passage of the Federal Home Loan Bank Act, which established a nationwide system patterned after the Federal Reserve System, to provide a credit reserve for savings and loan associations. In 1933, the Home Owners' Loan Corporation was established to finance long-term loans at low interest rates for distressed homeowners who were unable to refinance their delinquent loans through normal channels.

Further legislation in 1934 completed a basic system of home financing which set the stage for a new era in homebuilding, bringing home ownership within reach of a vastly larger proportion of wage earners throughout the country. The National Housing Act of June 1934 created the Federal Housing Administration "to encourage improvement in housing standards and conditions, and to provide a system of mutual mortgage insurance." The new agency was authorized to insure housing loans, upon application by the lender, provided the structure, the amount and conditions of the loan, and the borrower's financial status met its standards. Modern standards for construction, lot size, services, and facilities were also required. Insurance on each dwelling was extended only on a single, long-term mortgage, not exceeding a stipulated maximum and repayable in monthly installments. The law initially limited interest to not more than 5 percent on the loan balance. The agency set the rate at 41⁄2 percent, plus a 2-percent mortgage insurance fee, and required that taxes and fire insurance premiums be included in the monthly payment.

Such was the power of Federal assistance in the uncertain financial situation of that time that residential loan practices were substantially changed almost overnight. Under the new program, a first mortgage monthly amortization loan for upwards of 80 percent of the purchase price of a low-cost home could be obtained. The long

term amortized loan quickly became almost universal for both insured and noninsured housing loans. Thus, the National Housing Act stimulated the construction of medium-priced housing indirectly as well as directly, although a majority of

the new nonfarm housing units built in most years since its inception have not been covered by FHA-insured mortgage loans.

The act was not, however, intended as a device for attacking the problem of housing the lowest income families or for eliminating slums. The United States Housing Act of 1937 authorized Federal financial assistance to local communities "to remedy the unsafe and insanitary housing conditions and the acute shortage of decent, safe, and sanitary dwellings for families of low income." To this end, local authorities sponsoring low-rent housing projects were to receive Federal construction loans as well as annual cash contributions to help meet operating deficits. Occupancy of the public housing units is limited to families adjudged eligible by the local housing authority. One of the major criteria for tenancy is income-the family's net income may not exceed limits set by the local authority. In addition, preference is given to families living in substandard housing and those being displaced by slum clearance programs.

In quantity terms, publicly owned housing is a minor factor in the housing supply. The real significance of public housing lies in its influence on housing design and community development, especially in the very large cities. With the construction of the "First Houses" in New York City in 1937, the skyline began to change. Those public housing buildings were relatively small-four stories in height-but they were surrounded by open spaces. Structures in later developments grew higher, to accommodate more low-income families, but each project represented an integrated community, with parks, playgrounds, and community services. These developments have replaced some of the worst slums and decayed industrial properties, not only in the largest cities

• From 1934, when the first public housing projects were built under the Public Works Administration program, through 1956, about 650,000 new permanent nonfarm dwelling units have been constructed for government ownership. Private builders, using private funds, have built, for all groups, over 15 million units in the same period.

Labor organizations have sponsored a few notable housing projects financed by private lenders or with union funds (particularly, in recent years, pension and welfare funds). The first major development of this type, the Amalgamated Clothing Workers' project, built in 1927 in New York City under provisions of the New York Limited Dividend Housing Companies Act, now provides housing for 2,486 families. Others include the Carl Mackley homes in Philadelphia, built by the American Federation of Hosiery Workers in 1934; a Flushing, L. I., development for 2,200 families sponsored by Local 3 of the International Brotherhood of Electrical Workers in 1950-54; and the ILGWU Cooperative Village, consisting of four 20- or 21-story apartment buildings, which opened in New York City in 1955.

but in a number of smaller communities throughout the country.

Housing Developments Since 1940

Stimulated by general economic recovery and the support of the Government loan insurance programs, the housing industry began to recover rapidly after the depression. In 1941, the volume of new nonfarm dwelling units put under construction reached 706,100. With the onset of World War II, new housing starts fell far below the volume needed to keep pace with population increases. Again, the critical need for workers' housing in the rapidly growing war production centers led to the adoption of a variety of expedients. Rent controls were established to protect the workers and to help prevent inflation. Thousands of temporary and demountable dwelling units were erected. For the first time, the house trailer became an important factor in worker housing, gaining a degree of acceptance which it has apparently retained. Spokesmen for the trailer manufacturers claim that upwards of 1 million house trailers are now in use, with over 60 percent owned by workers.

After the war, with the return to private life of millions of young men, the housing crisis became acute and there were insistent demands for Government action. The most effective action taken, and one which made it possible for hundreds of thousands of wage earners to buy homes, was the Veterans Readjustment Act of 1944, which provided, among other things, for Government guarantee of loans to veterans for home purchase. By the end of 1957, over 5 million "GI" home loans had been made-almost 3 million of these for new homes. The veterans' loan guaranty program has emphasized low interest rates, low downpayments or none at all, and repayment periods extending to 30 years. On this basis, almost any employed veteran could qualify for a modest home.

The cumulative effect of the veterans' guaranty program, FHA insurance, and constantly increasing housing demand generated by population growth and higher incomes brought an unprecedented volume of new housing activity. Huge suburban developments have been created to meet the housing demand supported by the GI loan and the FHA insurance programs. The

Home Ownership at Mid-Century. The main trends in housing since the turn of the century suggest the extent to which the American worker has shared in housing improvements. Although home owning is still beyond the reach of many wage earners and salaried employees, our social and economic system has succeeded in providing the ways and means by which a majority of the workers can obtain homes of their own if they wish.

In 1950, 53 percent of the occupied nonfarm dwelling units were owned by their occupants, and indications are that the proportion has continued to rise. The proportion of ownership by urban workers was almost as high-nearly 51 percent, or more than 2% times the percentage in 1901.

Home ownership among worker families was lowest in the North, 47 percent, and highest in the West, 58 percent; in the South, it was 54 percent.

Whether they owned or rented their homes, city workers' families in 1950, with more than twice the income, in dollars of equivalent purchasing power, of their 1901 counterpart, were able to devote a substantially smaller share of their expenditures to housing, fuel, and light-15 instead of 24 percent. Moreover, in 1950 the relative importance of expenditures for shelter declined more rapidly as family income rose. (See chart.)

The proportion of total expenditures going for housing, heat, and light also varied with the occupation of the chief earner and the climate in which the family lived. Clerical and sales workers spent the most and unskilled workers the least in all regions-in terms of actual amounts expended. And for all groups of workers-white-collar, skilled, semiskilled, and unskilled-expenditures for housing were highest in the North and lowest in the South. Skilled workers, for example, reported average expenditures for housing, fuel, light, and refrigeration of $628 in the North, as against $558 in the South and $561 in the West.

These figures represent the annual cost of housing, whether owned or rented. The relative cost of ownership and renting was the subject of a study of buyers and renters of new housing in nine large metropolitan areas, made in 1949 and 1950 by the Bureau of Labor Statistics. In the market situation of that time, in most of the areas it was cheaper to buy than to rent new quarters providing approximately equivalent living space.

Characteristics of New Houses. For workers who chose to buy a new house, some clues to its description and cost are found in a Bureau of Labor Statistics study of representative new nonfarm 1-family houses on which construction was started in 1956.8 Half of the houses were designed to sell for $14,500 or less, including land; 4 percent had a selling price of less than $7,000, 10 percent, of $7,000-$9,999, and 13 percent, $10,000– $11,999. (The average factory worker earned $80

'M. Mead Smith, Monthly Cost of Owning and Renting New Housing, 1949-50 (in Monthly Labor Review, August and September 1954, pp. 851-858 and 977-982, respectively).

See Kathryn R. Murphy, Characteristics of New 1-Family Houses, 1954-56 (in Monthly Labor Review, May 1957, pp. 572–575).

a week in 1956, so most lending institutions would consider him a sound loan risk on houses in these price ranges.)

The average floor area of the new houses was 1,230 square feet, with 5 percent of the units having less than 800 square feet, 17 percent from 800 to 999, and 31 percent from 1,000 to 1,199. Only 1 percent were 1-bedroom houses; 20 percent had 2 and 70 percent had 3 bedrooms. For the family of average size, a 3-bedroom house would provide at least 11⁄2 rooms per person. This is a vivid contrast to the ratio of about 11⁄2 persons per room which prevailed in the city slums in 1893 and a marked improvement over the average of 1.04 persons per room observed in the broader 1901 survey of city workers.

Most of the houses were supplied with electricity, running water, and bathrooms and had water heaters and some type of central heating system. The few exceptions occurred in the southern States and in the small, low-priced structures. In over one-third of the houses, the sales price included the cost of a kitchen range. One-third also included an electric garbage disposal unit; 11 percent had dishwashers; and 55 percent were equipped with kitchen exhaust fans. All of these items were included in the selling price, and the buyer could spread his cost over a long period at a low interest rate.

The New Suburbs. Most of the houses built in 1956, as in other postwar years, were in suburbs. Approximately 70 percent of the new housing in

metropolitan areas has been built outside the central cities of those areas in recent years.

The typical suburban residential community contains single-family detached homes together with shops, schools, churches, recreation centers, and service establishments. Hundreds of such communities have sprung up around large cities, all connected to the central core by the daily ebb and flow of commuter traffic. As these communities grow, they frequently have difficulty in obtaining sufficient government revenue to meet the cost of schools and community facilities. This leads to efforts to attract industries and business establishments as a means of broadening the property tax base, with the result that the suburbs begin to take on the characteristics of integrated satellite cities. In some instances, such satellite towns have been planned and developed with most of the attributes of self-contained communities including local industry.

Factory workers, retail clerks, building craftsmen, and other wage and salary earners can afford to buy houses in the new suburbs. The second and succeeding generations of the immigrants who flooded the Nation's cities early in this century move out and merge with descendants of the immigrants of the 18th and 19th centuries. Sharing common but diversified experiences in military service, in schools and colleges and trade schools, in churches, in labor organizations and other associations, and in their jobs, they take their places in the remarkable social experiments of the new suburbias.

The Role of Government in Manpower Policy

EDITOR'S NOTE.-The following article was adapted from an address by Dr. Eli Ginzberg, Director, Conservation of Human Resources Project, Columbia University, at a meeting of the senior staff of the Department of Labor in Washington on June 25, 1958.

A FIRST PROPOSITION relating to the historic role of the Federal Government in manpower policy is that basically it is a negative role. When the country was younger, the notion was that only the individual should be concerned with job choice and preparation. To the extent that government had a responsibility, it was largely local and, secondarily, State government. But it is interesting to recall that even before we had a Constitution there was a Northwest Ordinance which put aside Federal lands for the support of education. Before the 18th century was over, the Federal Government became involved in a public health service for merchant seamen and, shortly after the turn of the century, in a military academy to supply a kind of personnel essential to national expansion and defense that the civilian economy could not supply.

By way of further reference to our past, the Civil War brought additional involvement of the Federal Government. There were the draft, the Emancipation Proclamation, the establishment of the Department of Agriculture, and the land grant acts with substantial Federal grants for the development of State colleges and for the training of people in agricultural and scientific fields. And in the latter part of the 19th century, there were the beginnings of an immigration policy and the self-conscious leadership role of the Government as employer. There was more reliance then on Government as an important manpower in

telligence agency with expansion of the Census and the forebears of a Department of Labor.

And yet when all this is said, and the story is carried to the end of the 19th century, it is still true that the part played by the Federal Government was peripheral.

Alteration of Historic Policy

What are the new factors which have altered the historical role of the Federal Government in manpower policy?

First and most obvious is war and cold war. Most people have not fully realized the effect of what the last war or what current defense activities are having on manpower problems. In terms of the Federal Government's payroll, there are 2%1⁄2 million people in uniform, plus 1 million civilians, all connected with the Department of Defense, apart from the Veterans Administration activities. It is not merely a question of manpower in terms of numbers, but also in terms of manpower quality suitable to develop, operate, and maintain a complicated, scientific weapons system.

The second major factor is the importance of Government support of scientific development. Neither the private economy nor private philanthropy can be expected to carry much of the fabulous costs involved in scientific research and development. No one in the private economy is going to fit out oceanographic ships for special studies over the seven seas; no university is in a position to purchase with its own funds the types of computers and reactors that are currently needed for research and instruction in the natural and physical sciences.

Congress, in recent years, has on its own repeatedly raised the budgetary requests for the National Institutes of Health, reflecting the public conviction that money is a potent instrument for finding, through research, more of the kinds of answers to basic health questions. As a result,