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result and I think possibly the House could arrive at a better version of the Wagner-Ellender-Taft bill than the way it stands at present.
My objection this morning is to the hurried action on this thing which I believe will effect something that is undesirable and when there is ample time to do it more deliberately and arrive at a sounder result.
Mr. Henry. Mr. Holden, I take it you concentrate your objection to that portion of plan No. 1 dealing with housing and the housing situation only!
Mr. HOLDEN. That is right, sir.
Mr. Henry. Can you see where there would be any saving effected at all through this reorganization plan?
Mr. HOLDEN. I do not know of any.
Mr. HENRY. As I understand it, too, you feel that to mix subsidized housing with private financed housing it is unwise?
Mr. HOLDEN. I think so. I do not think they are completely unrelated, but at the same time, I think in one case you are dealing with the investment of private funds on an investment basis. On the
other, you are dealing with a welfare project. The basic financing and the financing concepts are different and I think, therefore, as a matter of financial management they do not belong together.
Now, as to building a subsidized housing project in one place and a private housing project in the vicinity thereof, they become related in the whole locality but that is a different thing from the basic concepts of your financial procedure. These are financial institutions, in fact, so I think the principle of sound finance should be our starting point in setting the proper kind of organization.
Mr. HENRY. Do you not feel there is some danger and possibility of a single head as proposed by this plan lacking the sympathetic approach when this head is dealing with both subsidized housing and privately financed housing? He would lack a sympathetic approach that perhaps a board composed of more minds would have.
Mr. HOLDEN. That is exactly my view, sir. Any one person is going to be biased, no matter how honest and fair he wishes to be. He is going to have a certain slant based upon his background and previous experience and is apt to go one way or another. I should, if I were going to be appointed Administrator, I would want a board of advisers with a broad experience to help me to do it to keep me from making serious mistakes. The possibilities of making mistakes is very great in organizations such as this that run into billions of dollars. I should think that the man heading that would very much want a board to advise him and share the responsibility in a policy-making responsibility.
Certainly in nearly all private business excepting some wholly owned by individuals have that. You have it in private financial institutions. I think the board is a safeguard to the Administrator as well as to the public and the constituent members of the Home Loan Bank System and all other people concerned.
Mr. HENRY. In passing the reorganization bill, Congress expressed a desire to effect_a saving in any reorganization that the President might suggest. Do you feel there is any saving whatsoever in this plan!
Mr. HOLDEN. I know of none, sir. One would have to go into the plans of the National Housing Administration to get that. I would say the other 10 titles of the Wagner-Ellender-Taft bill, if they are an indication of the future program of the National Housing Agency they would involve Congress in considerable long-term commitments for expenditures, grants, contributions, and so on, and for other activities which were involved with a considerable amount of money.
It seems to me the tendency in Government agencies is for each one, whether it is a company type of thing like this, or whether it is a separate agency, it is to build up a staff, build up functions, and build up budgets as much as they can, I would expect that there would not be only no saving in this, it would probably lead to more expenditures.
Mr. HENRY. That is all, Mr. Chairman.
The next witness will be Mr. Frank Kirkpatrick, of Milwaukee, Wis., of the Milwaukee Home Builders' Association.
STATEMENT OF FRANK KIRKPATRICK, FORMER DIRECTOR OF
WAR HOUSING IN AND ABOUT MILWAUKEE, WIS., AND A FORMER
Mr. KIRKPATRICK. Mr. Chairman, unfortunately I am not accustomed to such appearances, and I do not have copies of my address for members of the committee. In fact as you know, from the recency of my telegram asking for permission to appear here, I had a very short time to prepare. However, since I arrived in Washington this morning at 9 o'clock, I have turned this statement over to mimeographers and it will be ready for the committee at a later time.
My name is Frank Kirkpatrick. I am a citizen residing in Milwaukee, engaged in the business of housing. During the war I was director of war housing in the Milwaukee area, and an employee of NHA.
I appear in opposition to making National Housing Agency a permanent bureau because I am convinced by factual knowledge that the Agency is and will be an instrument for exercising authoritarian controls over the shelter and the lives of citizens. In making this statement I do not wish to impute to the present head of NHA authoritarian aims. I have a high regard for the moral integrity of Wilson Wyattbut I do not believe he can or will change the complexion of his Agency or change the philosophy on which it is based.
It is proper that I define my own politico-economic thinking. In a small school, in a small community in Tennessee, I learned the basic principles of Americanism. That is, we have a government of laws, with the laws made by representatives chosen by democratic processes under constitutional guaranties of individual freedom. In the many years and through the many experiences which an active yet studious life has afforded, I have found no justification for changing our form of government. In work with unemployed and organized workers, I have known the temptation to ask for power to do what seems so obviously the right and good things for men. But I have also learned that there is no way by which we may identify infallibly good men to whom such power can be entrusted.
When I have seen the results of ruthless exploitation of men by other men, it has been tempting to dream of a world in which the economic powers of some industrialists and capitalists are taken away. But there is always the necessity for power to get things done and if the power is taken away from men who have earned it in our competitive economy, it can only be given to men in government. And when governmental powers as well as economic powers are in the same hands we have a slave economy under a union of economic and political powers. The people then are powerless to resist any action their rulers may take. Mr. Ickes probably was a better administrator of the oil industry than Mr. Rockefeller, but if Mr. Ickes as government misused his power there was no recourse. When Mr. Rockefeller misused his power, the people through their Government could curtail his power. Without the separation of economic and governmental powers we have feudalism.
It is impossible for me to believe that there is any man in America more anxious than myself to see our economy, and the industry of which I am a part, emerge from the semianarchy which complete freedom of contract implies. But you gentlemen know better than I that serious impairment of freedom of contract of the individual means a destruction of the very base on which all our freedoms rest.
The President in a recent speech emphasized his understanding of the importance of the freedom of the individual. If the individual is not free there is no freedom, because so-called collective freedom is the freedom of a herd of cattle, free only to graze within a certain meadow and free within the prescribed limitations set by and enforced by the master of the grange,
Cattle were domesticated by power. So were the slaves we brought from Africa. But in a country where men have the right of selfgovernment they lose their freedoms through the creation of agencies which offer to trade security for votes—and men trade freedom for security.
The NHA was established as this kind of an authoritarian agency, under the excuse of war. That it aimed at permanence was evident from the beginning. Its policy-making personnel was chosen from men who long before had committed themselves to a war against free enterprise. The top policymaking men were, and are, Keyserling and Woodbury. Keyserling in USHẢ had lost his battle with Congress in 1939 to create a huge Government housing program, but as soon as NHA was created, he moved in, to interpret wartime housing legislation toward what I believe to be his authoritarian objectives. It was Coleman Woodbury, however, who had long before spoken the philosophy, which has dominated NHA policies. I quote from Mr. Woodbury's paper on the integration of private and public enterprise, written in 1937, delivered to the Academy of Political and Social Science. He says a housing shortageemphasizes the need for a practicable working arrangement between private and public enterprise in the production and control of housing space. Then, he goes on to say: Although such a policy in respect to private and public enterprise in housing seems most desirable from many points of view, it does not follow necessarily that it can be made under our present scheme of economic organization. It is entirely possible that private and public enterprise in housing cannot enjoy a vigorous life at the same time. Many persons dislike to face the fact that a
highly desirable or even necessary social result cannot be obtained under the present economic order, with modifications that are possible within the near future.
That, gentlemen, has been the philosophy of NHA since it was established. And I would point out that Mr. Woodbury is still Assistant Administrator of NHA.
The record shows that NHA's authoritarian philosophy has been expressed in action. I cite some instances :
i. The Defense Homes Corporation had been created to assume part of the risk in areas where free enterprise could not be expected to take full risks in war-enlarged communities. Here's what NHA did with it, according to Miles Colean-I quote from American HousingInstead of providing a means for supplementing private capital, as seems to have been intended, the Corporation finally adopted an exceedingly complicated plan for producing dwellings wholly owned and operated by the Government.
2. FHA, which was doing an excellent job of encouraging volume production of defense housing under title VI came under control of NHA. Through a system of programing which NHA set up, activities of free enterprisers and of FHA were sharply curtailed. The men called in for consultation on programing were drawn almost exclusively from the ranks of Government housers and the allocation of priorities was done on the basis of 50 percent to be built, controlled, and managed by men in Government, with only 50 percent left to free enterprise. Every time I asked NHA for housing to be programmed in Milwaukee, it was pointedly suggested that I accept some Government housing. Because I repeatedly insisted that free enterprise had the labor, the funds, the materials, and the market for all the housing it could properly expect, Milwaukee was discriminated against to the point that I had to publicly resign my pay-though not my job—to force the programing of a bare minimum of war housing. The records of NHA will show that less housing was programed for Milwaukee than for any city of comparable size, war activity, and establisted need in the country.
Mr. BARDEN. If you do not mind an interruption at this point, I would like to say that I knew that that situation was going on in my section, but I did not know that it was national in scope, and that was that the whole idea was to get as much Government housing as possible, and suppress private investments as far as possible. There were people in my section who wanted to build houses, but they would not let them build houses. Anybody could get in on the Government housing building program. I thought that was the fault of local administrators, but it was the same situation in Milwaukee as it was in North Carolina, evidently. It must have been national.
Mr. KIRKPATRICK. I am sure it must be, sir.
Mr. WHITTINGTON. What was your statement there, now, what was avaliable to public housing that was not available to private housing?
Mr. KIRKPATRICK. My statement is that because I insisted that we could produce all the housing needed with free enterprise, and production, and refused to obstruct the programing of the Government housing in Milwaukee and in Milwaukee earlier because I did not think it was required and saw no need for the expenditure of those funds, I say that Milwaukee was discriminated against in the program of housing.
Mr. WHITTINGTON. In other words your statement is that the materials were allocated to the war housing, it was called, whether it was located in Chicago or somewhere else before it would be allocated to the private housing in Milwaukee?
Mr. KIRKPATRICK. It was all war housing, sir, whether it was created by free enterprise or under the Government, it was all war housing and all had the same purpose.
Mr. WHITTINGTON. We understand that generally, but were you authorized to construct housing for war employees alone as war housing?
Mr. KIRKPATRICK. That was the only basis upon which any housing was constructed during the war.
Mr. WHITTINGTON. In other words, you could construct none for anything but war housing?
Mr. KIRKPATRICK. With the exception of hardship cases, and they were few.
Mr. WHITTINGTON. You were unable to obtain materials or priorities where you employed an application for construction of war housing?
Mr. KIRKPATRICK. That is correct, sir.
Mr. WHITTINGTON. You have cases there where you applied and could not get them?
Mr. KIRKPATRICK. I have a long record, sir. I was director of war housing in Milwaukee, and an employee of the National Housing Agency.
Mr. WHITTINGTON. It is not clear to me. If you were the Director of the National Housing, were you a Federal officer?
Mr. KIRKPATRICK. Yes, sir; I was a Federal employee.
Mr. WHITTINGTON. You had nothing to do out there because you had no housing projects, is that right or wrong, I do not understand it.
Mr. BARDEN. Here's what the idea is that he put across, and did so very clearly in my mind, and that was that all the emphasis was laid upon spending public funds in the town, and there was no encouragement nor cooperation where private capital wanted to be spent. The idea was to spend as much public money as possible. If someone wanted to produce the same results, the same housing, the same facilities, war housing with private capital, the signal was "No." It was cheaper to move very smoothly if you were spending Federal money.
That was the idea I got from his statement, and that was exactly the situation in my section which I did not like at all but I thought it was local, because I put all my criticism on the local folks.
Mr. WHITTINGTON. I got that point.
Mr. BARDEN. I did not know it was the underlying philosophy of the Department.
Mr. WHITTINGTON. I did not know how the witness could be a Federal official out there if the Federal Housing had nothing to do in that area or did no work in the Milwaukee area.
Mr. KIRKPATRICK. Well, they did a great deal of work, sir, if the chairman will permit me to digress.
For one thing, we were supposed to get people whose sons and daughters were in the service, to give up their dwelling units, double