(b) Provide for recognition of certificate of necessity issued by the administrative agency where taxes are based on income.

While AMVETS has successively endorsed the principle of yield insurance since it was originally suggested, and it is now part of the housing act and should remain there, we know there has been no construction under that provision. The accelerated depreciation plan might do the trick, where the yield insurance has failed.

AMVETS is generally satisfied with the procedure for sale outlined under Public Regulation No. 1, on the Lanham Act and similar Government properties. It is realized that this is divided into temporary and permanent facilities. Since much of the property classified as "temporary" is so classified because of a removal contract between the Federal Government and the municipalities, AMVETS suggests a review of such contracts to determine the critical need of housing in such communities, and to determine whether the community itself might not desire a dissolution of such contract. It is hoped that such a review would increase the supply of permanent facilities in which the veteran has top priority rights.

We would suggest amendments, then, to section 610, providing insurance for the disposal of such units. These amendments would include a 100 percent secondary market; provide for improvements to the property either necessary to conform with local or State building codes or FHA requirements, such costs to be added to the specified sale price. These amendments should be made to give the veteran his real preference and keep the properties from the hands of speculators. Here, too, some consideration could be given to a direct Government market, were no market available. The interest rate increase is not enough; nor the secondary market-but more probably a combination of both.

AMVETS approves the amendment of section 211, which provides for the deferment of monthly payments in hardship cases beyond the control of the mortgagor, with such provisions to extend the time not in excess of 3 years.

AMVETS wishes to bring forward at this time again, the fact that there must be a sufficiency of supply in the building materials to implement an general housing program calling for public housing in the quantity suggested. How this is

done, is going to have to be determined. We suggest that possibly the Housing Expediter be given the proper authority, or it might call for a control system other than voluntary, where the voluntary does not effect the production of the materials needed.

AMVETS fees that many veterans are to be found in the migratory labor groups. Since this is the case, and there are still 39 labor camps not yet sold, it is felt that Public Law 298 of the Eightieth Congress be extended in regard to disposal of such camps beyond the present June 30, 1949, dead line. Extension of time should be adequate to permit Congress to make a comprehensive study of the need of such laborers and formulate a program that will permit them to live in sanitary and habitable places.

AMVETS recognizes that the emergency is not over in regard to housing. It is the Nation's No. 1 problem, and it is to be hoped that this Congress will do an effective job in meeting that problem. We are hopeful that our ideas may have been of some value.

We have enjoyed the opportunity of presenting these views to the members of this committee.

The CHAIRMAN. The committee will stand in recess until 10 o'clock tomorrow morning.

(Whereupon, at 11:31 a. m., the committee adjourned to reconvene Tuesday, April 12, 1949, at 10 a. m.)

HOUSING ACT OF 1949

TUESDAY, APRIL 12, 1949

HOUSE OF REPRESENTATIVES,

COMMITTEE ON BANKING AND CURRENCY,

Washington, D. C.

The committee met, pursuant to adjournment, at 10 a.m., Hon. Brent Spence (chairman) presiding.

Present: Messrs. Spence, Brown, Patman, Monroney, Buchanan, Multer, Deane, Mrs. Woodhouse, Messrs. McKinnon, Addonizio, Dollinger, Mitchell, O'Hara, Talle, McMillen, Kilburn, Cole, Hull, and Nicholson.

The CHAIRMAN. The Committee will be in order.

We will resume hearings on H. R. 4009, the Housing Act of 1949. Mr. Weinfeld, president of the National Public Housing Conference, will be our first witness.

STATEMENT OF EDWARD WEINFELD, PRESIDENT, NATIONAL PUBLIC HOUSING CONFERENCE

Mr. WEINFELD. Mr. Chairman and members of the committee. My name is Edward Weinfeld. I am the president of the National Public Housing Conference.

By way of personal background, may I say that I am a practicing attorney and that I was New York's first Commissioner of Housing. As to the conference, it is an 18-year-old, nonpartisan, nonprofit organization dedicated to the goal of a decent house and a suitable living environment for every American family.

We long have urged an expanded public housing program, new and additional aids for housing the lower middle income and farm families, a vigorous housing research authorization, and a sound development and redevelopment program. In our opinion, H. R. 4009 is an excellent bill and we urge its favorable consideration by this committee. In taking this position, we do not overlook its failure to provide housing aids for families of moderate income and we look forward to prompt consideration of a measure to assist such families. Except for its provisions for a larger public housing program, H. R. 4009 is the same as S. 1070 as reported by the Senate Committee on Banking and Currency.

I believe little will be gained by repeating our testimony before the Senate Banking and Currency Committee on S. 1070 or its predecessor bills. I should prefer, with your permission, to make a few observations and then to submit to such questions as you may desire to direct to me.

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While we are wholeheartedly in favor of H. R. 4009, there are a few recommendations we urge upon the committee in a belief that their adoption would strengthen the measure. We urge again the elimination of the provision calling for a gap of at least 20 percent between the upper rental limits for admission to a proposed public low-rent project and the lowest rents at which private enterprise is providing a substantial supply of decent housing. We believe this so-called 20 percent gap provision is morally and socially wrong. Apparently intended to provide an additional argument for the noncompetitive nature of public housing, this provision merely creates a guaranty that there will be a segment of the population for whom neither public housing nor private enterprise will provide housing. We urge the deletion of this provision.

Furthermore, although H. R. 4009 contains a more liberal dwellingfacilities cost-limitation, in recognition of increased costs since the limitation was first included in the United States Housing Act of 1937, the fact is that any dollar-and-cent limitation is unwise and could defeat the program. Dependent as it is on fluctuations in the cost of labor and materials, a public housing program should not be placed in a position where it can be frustrated by virtue of limitations frozen in the law. The best example of this is the large number of approved projects which could not be constructed because of the dollar limitation inserted in the United States Housing Act 11 years ago.

While I do not have the exact figures in front of me, my recollection is that because of the cost limitation contained in the existing law, some 18,000 units were not completed or were not carried through, simply because of that one factor. And of personal knowledge, I know that, for example, in the city of New York a project which had long been approved, the Jacob Riis houses, had to be deferred for a considerable period of time and could only be proceeded with after the city of New York had contributed $5,000,000 toward the development cost of the project, simply because the cost limitations went beyond the amount specified in the bill.

Housing constructed under a federally assisted public housing program is permanent housing; and, while no extravagance or waste should be tolerated, neither should false economy nor short-sighted conformance to an arbitrary limit be encouraged. For these reasons we urge the elimination of the dollar-cost limitation. This would still leave in effect the other two requirements of the act, (a) that the project be not of elaborate or expensive design or materials, and that economy will be promoted both in construction and administration, and (b) that the average construction cost of the dwellings, excluding land, demolition, and nondwelling facilities, shall not be greater than the average construction cost of dwellings currently produced by private enterprise in the locality, under legal building requirements, applicable to the proposed site, and under labor standards not lower than those prescribed in the act.

We think that these two requirements afford ample protection against excessive costs, but we believe that the so-called comparabilityrequirement as it is now worded in the United States Housing Act fails to make it clear that the comparisons should be made between projects which are, in fact, comparable.

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For this reason we suggest that section 15 (5) of the United States Housing Act of 1937 be amended so that the last clause will read as follows:

(b) that the average construction cost of the dwelling units (excluding land, demolition and nondwelling facilities) in any such project is not greater than the average construction cost of dwelling units of comparable projects currently produced by private enterprise, in the locality or metropolitan area concerned, under the legal building requirements applicable to the proposed site, and under labor standards not lower than those prescribed in the Act.

We feel that such an amendment would make it clear that with respect to costs, the private projects with which the public projects would be compared would be those private projects with the same life expectancy, the same ratio of large units, the same amenities, the same construction standards, and so forth, as obtained in public projects, in addition to the same legal building requirements and labor standards not lower than those prescribed in the act.

Finally, we question the inclusion of section 502, which amends. the National Banking Act. It would appear to us that it belongs in separate legislation dealing with the National Banking Act or the Federal Reserve System, not in a housing bill.

If I may be permitted an understatement, there is likely to be some opposition to this bill. Good faith opposition, not stimulated by desire of private gain but by a sincere questioning of basic issues, deserves respectful consideration and adequate ventilation. We who have been concerned with the housing problem for many years have not been unaware of the arguments raised against public housing; and I should like briefly to allude to a few of the criticisms that have been leveled against such a program.

First, that it is a gigantic Federal building program. This is an argument which, if advanced with the knowledge of how the program works, is viciously deceitful; if advanced in ignorance of how the program works, it is merely 100 percent wrong. The simple fact is that under this bill not a single home is built by the Federal Government, not a single project is designed by a Federal architect, not a single understaking is initiated by the Federal Government, not a single construction contract is let by the Federal Government. It is no more accurate to say that this is a Federal building program than it is to say that all private housing is banking or savings and loan or insurance housing because those institutions lend the money to builders or owners. In carrying this same thought out, it is not more accurate to suggest that because there is a federally insured program under the Federal Housing Administration that we have a Federal building program. Under this bill, as anyone who takes the trouble to ascertain the facts knows, projects are undertaken by non-Federal public agencies which alone can initiate projects and then only if accompanied by proof of need. Moreover, they must have the local governing body's approval of an application for a preliminary loan and cannot proceed with a project without evidence of the local governing body's cooperation. It is the local public agency which selects sites, employs architects, awards construction contracts and operates the projects following their completion. Compare these facts with the statement of distortion recently published by the realtors' Washington committee of the National Association of Real

Estate Boards in a pamplet titled "Public Housing Means Higher Priced Homes," which reads:

Under the public housing bill proposed now, the Government would construct at least 135,000 units a year, making it by far the largest single builder.

And while I am on the subject of statements that have been issued, I would like to call to your attention a squib which came across my desk yesterday just as I was about to leave the office to make the plane trip to Washington.

It is a statement, if one wants to dignify it by that term, issued under the sponsorship of a New York organization which apparently has been flooding the country with another pamphlet called, I think Soft Socialism or Housing Dictatorship and Soft Socialism. And, incidentally, the expression "Soft Socialism" comes from another article in the March 1949 issue of the Fortune magazine. The title of that article was "Socialism by Default."

Well, I mention that because to me it is part of a theme that this country has been subjected to now for some months, and, in fact, for some years. In any event, this particular page, which I will show you, was spread broadcast in the city of New York, I assume, to all the members of the Commerce and Industry Association of New York. Part of the item reads:

Do you want Congress to set up a housing dictatorship? Do you want Congress to permit Government housing to be used as the machinery for socializing American industry? Do you want your children and your grandchildren to be taxed to provide expensive benefits now for the favorites of the public housing lobby?

And I show you this sheet, which is the size of a newspaper page.

It is rather interesting to note that this same Commerce and Industry Association of New York and a predecessor corporation, or, rather, succeeded to the Merchants Association in New York, which, in 1938, as I recall it, opposed a housing proposal which was submitted in the constitutional convention of the State of New York, of which I was privileged to be a member. One of the reasons given at that time, as I recall it, for its opposition to the public housing article and slumclearance provision, which was being supported by various groups throughout the State, was the exemption of these public-housing projects to the extent of the increased value from taxation or local realestate taxation.

They were not unwilling to assume what I call a Janus-headed position, because within 2 years after the people of the State of New York voted in favor of the housing article in the constitution of the State, incidentally, the purest expression of democratic process we have, the submission of a proposal to the people for adoption by them, within 2 years this same organization sponsored and advocated what was then known as an urban redevelopment law. And, curiously enough, that urban redevelopment law had a provision in it which permitted tax exemption on improvement value to private enterprise, and also granted the power of eminent domain to private corporations. Now, I make mention of that at this point so that Members of the House may, when they come to consider some of the documents that are flooding this country, particularly such as those emanating from the Merchants Association or its successor, the Commerce and Industry Association, they will bear in mind that these groups were not unwill