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Mr. Schmidt said his committee would propose that the Government lend its money at 3 percent interest over a period of 40 to 50 years.

The CHAIRMAN. You may continue.

Mr. GOODMAN. Now, the National Association of Real Estate Boards rejected that program, because it provided that first section which they considered to be a subsidy. However, I would like to present for the record a communication to Mr. Walter P. Reuther, from the executive vice president of the National Association of Real Estate Boards, dated February 2, 1949, endorsing this concept of cooperative housing, and asking for an opportunity to have joint discussions on this matter.

The CHAIRMAN. That may be inserted in the record.
(The information referred to is as follows:)
NATIONAL ASSOCIATION OF REAL ESTATE BOARDS,

February 2, 1949. Mr. WALTER REUTHER, 411 West Milwaukee Avenue,

Detroit, Mich. DEAR MR. REUTHER: We are interested in giving whatever know-how our industry possesses to the advancement of the movement for cooperative housing in our country. I know that in times past the CIO has favored this type of activity and has done some work on it.

Recently, in England, I had occasion to see some of the work of what they called the housing societies, which are mutuals or cooperatives and which are making good progress. These are private enterprise in character and now represent about the best housing being built there. The Government housing is not so good, and it is results that I am interested in.

I would like to discuss this whole matter with you, or with someone whom you may designate in the near future, to see what can be done by that part of the industry which we represent to make some progress. The unions, who are our customers, and the industry, certainly have nothing to gain by making faces at each other.

Sometime ago Jack Nicholas and I did have some talks about this matter, but apparently the moment was not timely.

If you come to Washington frequently, we can meet here, or we can meet in
Detroit if that is more convenient.
Sincerely,

HERBERT U. NELSON,

Executive Vice President. Mr. GOODMAN. I would like to read one paragraph for the edification of the committee in connection with other housing legislation they are considering:

Recently, in England, I had occasion to see some of the work of what they call the housing societies which are mutuals or cooperatives and are making good progress. These are private enterprise in character and now represent about the best housing being built there. The Government housing is not so good, and it is results that I am interested in.

Of course, the content of that letter is Mr. Nelson's, and not the CIO's position.

I would like to pass to the members of the committee some pictures of houses that have been produced in factories in this country. There is a wide variety of houses in that set of pictures, and I hope the members will pass them around among themselves. We have factories producing houses out of concrete, wood, aluminum, steel, using all the available materials, and they are now succeeding in producing these in quantity, and if we were able to use the provisions of the law which this committee passed in the Eightieth Congress, providing for some $50,000,000 for development of these companies, only $360,000 of which has been used to date, if my information is correct, we would be able to produce these in sufficiently high volume so that the cost would come down and the problems of the rural nonfarm areas particularly would be resolved.

The military, who are testifying today over on the Senate side, who have a need for some 400,000 houses, could use this same approach and this same program for meeting their housing needs. Instead they are proposing, I understand, that the requirement on Federal Housing Administration guaranties for economic soundness in any development be eliminated for any project which the military states is necessary.

I think that is an unwholesome and undesirable proposal. It will result in the production of thousands of units by speculative builders who are unscrupulous and are desirous merely of securing the maximum return.

The requirement that economic soundness be maintained should be universal, for all elements of our society, and the military, who are now producing housing at the cost of $3,000 per room, should be required to meet the same standards that the rest of the housing agencies and industry are required to meet.

They have had their difficulties. I have a communication here from the Under Secretary of the Navy to Mr. Richards of the Federal Housing Administration, pointing up the impossibility they are faced with for securing sufficient housing under the standards which the Federal Housing Administraton now requires. We claim, and you will note in the text of Mr. Reuther's plan, that the Federal Housing Administration does not now administer the act with the intent and purposes under which the statute was originally passed.

And so we urge this committee to pass the bill pending before it, to attach to it, if possible, the middle-income housing proposal, or, if not, make it an omnibus bill, at least to give early and favorable consideration of it.

Mr. BUCHANAN. Your time is about running out, Mr. Goodman. Mr. GOODMAN. There is one clarifying amendment in the text of H. R. 4009 which I would like to propose to the committee.

That amendment would merely clarify the requirement that in the slum-clearance and redevelopment section the occupants of that particular area would be given an opportunity to reestablish themselves in that community if the housing built or the redevelopment which takes place includes housing at rentals within the range which they had previously been paying in that area. I would like to read it:

a new subsection reading as follows: “(iii) to give preference in the selection of tenants for the dwelling units built in the project area to families displaced therefrom because of clearance and redevelopment activity, who desire to live in such dwelling units and who will be able to pay rents or prices charged other families for comparable dwelling units built as part of the same redevelopment.”

Following this, a new subsection is proposed as follows:

(iv) to themselves refrain from, and to secure obligations providing that all subsequent purchasers, lessees, and tenants shall, in the sale, lease, or rental of land or any dwelling units thereon, refrain from inserting any provisions unenforceable in law.

Mr. BUCHANAN. You feel as though they will answer the objections raised by Mr. Perry of the NAACP yesterday?

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Mr. GOODMAN. That is correct, and that is the purpose of this proposed amendment and will eliminate the difficulties which took place on the Senate side, without, I believe, compromising any group's position. The adoption of these two amendments will require the renumbering of the subsequent sections and that is provided for in the proposed amendment.

I hope the committee will see fit to accept these amendments and eliminate what little friction has arisen on this subject.

Mr. DOLLINGER. Mr. Goodman, the first section of your amendment is the same as is now in effect in New York City with respect to new housing?

Mr. GOODMAN. That is correct, and this was taken from a number of existing statutes on this redevelopment question, throughout the States.

The CHAIRMAN. Does that conclude your statement, Mr. Goodman?
Mr. GOODMAN. Yes, sir.
The C'HAIRMAN. Are there any questions?
(No response.)

The CHAIRMAN. If not, we are very glad to have had your testimony, Mr. Edelman and Mr. Goodman, and we will certainly give consideration to your views and to the views of the great organization you represent. The committee will stand in recess until tomorrow at 10:30 o'clock.

(Whereupon, at 12:15 p. m., the committee recessed, to reconvene on Thursday, April 28, 1949, at 10:30 a. m.)

HOUSING ACT OF 1949

THURSDAY, APRIL 28, 1949

HOUSE OF REPRESENTATIVES,
COMMITTEE ON BANKING AND CURRENCY,

Washington, D.C. The committee met, pursuant to adjournment, at 10:30 a. m., Hon. Brent Spence, chairman, presiding.

Present: Messrs. Spence, Brown, Patman, Buchanan, Deane, O'Brien, McKinnon, Addonizio, Dollinger, Mitchell, O'Hara, Kunkel, Talle, McMillen, Cole, Hull, and Nicholson.

The CHAIRMAN. The committee will be in order.
We will resume the hearings on H. R. 4009.

Our first witness this morning is Mr. Lawrence M. Cox, president of the National Association of Housing Officials.

Proceed, Mr. Cox.

STATEMENT OF LAWRENCE M. COX, PRESIDENT, NATIONAL ASSO

CIATION OF HOUSING OFFICIALS, AND EXECUTIVE DIRECTOR OF THE NORFOLK REDEVELOPMENT AND HOUSING AUTHORITY

Mr. Cox. My name is Lawrence M. Cox, I am executive director of the Norfolk Ředevelopment and Housing Authority, Norfolk, Va., and am appearing before you as president of the National Association of Housing Officials.

The purpose of the association is to improve the standards and practices of all phases of public administration which are related directly to housing. It is a nonprofit, nonpartisan organization, concerned primarily with the administrative and operating problems of slum clearance, redevelopment, and larger-scale housing-public and private. The association is supported by membership dues, by income from publication sales and advertising, and by grants from foundations interested in the advancement of public administration.

The association has testified before this and other committees of the Seventy-ninth and Eightieth Congresses endorsing legislation similar to that proposed in H. R. 4009. On behalf of the association, I also had the opportunity of testifying recently before the Housing Subcommittee of the Senate Banking and Currency Committee on S. 138. That bill, as you know, after modifications by the Senate committee, passed the Senate last Thursday, April 21, as S. 1070. In our testimony before the Senate committee we made a number of suggestions relative to titles I and II which we thought would render the bill more effective in achieving the objectives of these two titles. These suggestions grew out of detailed analysis of the bill as introduced, an analysis which capitalized on the extensive operating experience of our mem

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