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bers in the fields of public housing and slum clearance and redevelopment. We were gratified to see that titles I and II of S. 1070, as passed by the Senate (with but one minor exception to be mentioned later), and of H. R. 4009, as introduced in the House of Representatives are both practical and workable from an operating standpoint.

Our position on H. R. 4009, in summary is as follows:

Title 1-Slum clearance and community development and redevelopment: We endorse the title as written.

Title II—Low-rent public housing: We endorse the low-rent public housing program as provided in this title. We believe that the 1.050.000 units proposed in H. R. 4009 is a more realistic approach to the problem of providing decent housing for low-income families than is the smaller program included in S. 1070.

Title III-Housing research: We believe this research program which is designed to improve construction materials and techniques directed toward the reduction of housing costs, including construction and operating costs, and the improvement of housing standards, is an essential part of a national housing policy and program. In this connection, we are especially pleased with the recognition in section 507 of this bill of the need for a housing census as a part of the decennial population census.

Title IV-Farm housing: We heartily endorse the provision of aids for farm housing. However, we do not feel that the association's experience adequately qualifies it as a specialist in this particular field. We understand that others who are more closely acquainted with the farm-housing problem have testified with particular emphasis on this title.

Title V-Miscellaneous provisions: We believe that we are not in the best position to give this committee an opinion on the miscellaneous provisions found under title V. However, without taking a position on the rest of section 502, we applaud so much of that section as amends the National Banking Act by permitting commercial banks to purchase for their own accounts, without limitation, securities of local public housing agencies and redevelopment agencies.

I might say in passing that this is certain to broaden the market for the notes and bonds of the local agencies.

Mr. Rains. Going back to your statement : However, without taking a position on the rest of section 502, we applaud so much of that section as amends the National Banking Act by permitting commercial banks to purchase for their own accounts, without limitation, securities of local public housing agencies and redevelopment agencies“ presently, under the present law, are commercial banks eligible to purchase these securities from the local public housing agencies?

Mr. Cox. Yes, they are, but under an interpretation by the Comptroller of the Currency that purchasing power is restricted to io percent of their capital and surplus, I believe.

Mr. Rains. In other words, you feel if the banks had the opportunity to purchase these securities, such as they have the opportunity to purchase municipal bonds and things of that kind, that it would broaden the market and would mean that we would get a better price for the bonds of the local housing authorities; is that what you say?

Mr. Cox. Well, I am not sure that I am asking for the same powers that they have with regard to municipal bonds, because I am not sure

just what those powers are. But I do feel that this provision, which lifts the 10-percent restriction on our securities, would make it possible for the market to be broadened; yes, sir.

The CHAIRMAN. I think that 10-percent restriction covers all obligations.

Mr. Cox. I do not know for sure. Mr. Rains. Well, I agree with you thoroughly, if I understand what you say, that the banks should certainly have the opportunity to purchase these securities, because we do not want to limit the ability to sell them just to the bondholders. We would like the banks to have an equal competition. I think competition would be good for the sale of securities; do you not think so?

Mr. Cox. Yes, sir; I'do. Now, I think it ought to be clear, Mr. Congressman, that the banks can now purchase these securities, but only to the extent of 10 percent of their capital and surplus. This would lift that 10-percent restriction. Title 502 does other things, but we are not relating our testimony to them.

Mr. BUCHANAN. So far as State banking institutions are concerned, they are still restricted by State regulations?

Mr. Cox. I would assume so.

Mr. BUCHANAN. That possibly would not bring them within the sphere of section 502, due to these State regulations.

Mr. Cox. I would assume that is true, sir.

Mr. Rains. Let me ask a question there. Is that limitation placed on them by the Banking Act of 1933, Mr. Chairman?

The CHAIRMAX. I think so.
Mr. Cox. Yes; in the light of existing law.

The CHAIRMAN. They claim the reason they do not purchase them is because of the attitude of the bank examiners. I believe that is the attitude of the banks.

Mr. COLE. Mr. Chairman, I would say that I agree with the principle, but we are amending the Banking Act, and I think this committee should hear some statement on the other side, on the part of the Comptroller of the Currency. He may have some reasons which are not apparent.

The CHAIRMAN. There have been some witnesses who have expressed a desire to testify and we have told them we will hear them. There will be testimony on the subject.

Mr. Rains. Mr. Cox, I have to leave very shortly and I want to ask a question or two, if I may. I know Mr. Cox, Mr. Chairman, and he is director of the Redevelopment and Housing Authority in Norfolk. I want you to tell us, Mr. Cox, since you are at the grass roots, so to speak, of the Housing Administration, about the make-up of the various housing authorities. I know the make-up in my own territory. But who composes the local housing authority, for instance, in your home town?

Mr. Cox. In my 'home town, and I think our housing authority is typical of the average, the chairman, Mr. Charles L. Kaufman, is an attorney, dealing principally in the field of corporation law. He is a director of our largest bank; he is a director of our largest building and loan association; he is interested as a director in the business management of newspapers, radio stations, a number of retail and

wholesale mercantile establishments, and several industries. He is the recipient of the distinguished-service medal, as Norfolk's first citizen, an annual award given, in recognition of outstanding service to the community.

Our vice chairman, Mr. C. W. Grandy, is president of our association of commerce, a member of our planning commission, an attorney by training but is not engaged in the practice of law; he is a bank director and about our largest individual property owner in the community. He, too, has received the distinguished-service medal for outstanding contributions to the community and a civic leader.

Mr. David Pender, another commissioner, is a wholesale food broker. He is interested in a number of other business enterprises, a bank director, and he is a large property owner. He, too, at one time, has been the recipient of our award as the outstanding citizen in the community. He is a leader in his church—the Presbyterian Church-and he at one time was president of our Community Chest, as were Mr. Kaufman and Mr. Grandy.

Our fourth member is Mr. James È. Ethridge, president of one of our largest real-estate firms, and an outstanding business and civic leader in the community.

Our fifth member is Mr. Thomas H. Willcox, who is a member of one of our leading law firms. He is a lay leader of the Episcopal Church in Tidewater, Va. He is interested in a number of civic and business enterprises in our community and males a substantial contribution to the public welfare. That is the make-up of our commission, sir, and in my experience that, I would say, is typical of the average commission throughout the country, and in my statement, toward the end, I have a tabulation showing the occupations of some 2,400 commissioners throughout the country, and, with the permission of the chairman, I would like to give you that tabulation.

(f the 2,413 commissioners representing some 480 housing authorities, 49 percent of them, or 1,187, are drawn from business, banking, and industry, 50 percent approximately; 19 percent from the professions-medical, legal, and so forth; 15 percent from wage earners and labor officials; 6 percent from public officials and civic leaders; 5 percent from farmers and farm organizations; and 6 percent from other ocupations.

Mr. RAINS. In other words, the make-up of the various housing authorities in the country completely refutes this reckless statement sometimes made that they are communistic, socialistic, and so forth, do you not think?

Mr. Cox. Without any question, sir.
Mr. Rains. That is all, Mr. Chairman.
The CHAIRMAN. You may proceed with your statement, Mr. Cox.

Mr. Cox. The foregoing comments represent our general endorsement of H. R. 4009. However, there are three aspects of titles I and II, which reflect so sharply the operating experiences of our members that I should like briefly to advert to them. These points are, (a) the veterans' preferences, (b) the confining of tenants to families of low income, and (c) local autonomy.

Perhaps no place in the bill is there clearer evidence of the close relationship between titles I and II than in section 202 which sets forth the preferences in the selection of tenants in the public lowrent housing projects. This interrelationship flows from the facts that under title I there must be a feasible method for relocating the families displaced by slum-clearance and redevelopment projects and that much of the present housing in sum-clearance areas is occupied by low-income families who, if displaced, would have no place to go except public housing projects. It is obvious, therefore, that he effectiveness of title I depends to a considerable extent not only on the quantity of new public housing available, but also on the preferences extended for occupancy in the new public housing. We are consequently especially pleased with the way section 202 is worded, for it clearly recognizes that families displaced by low-rent housing projects and public slum clearance and redevelopment projects are entitled to first priority for admission to the low-rent housing projects aided by title II. As among such displaced families, the section appropriately requires that first preference be given to families of disabled veterans, second preference to families of other veterans and servicemen, and third to displaced nonveterans and their families.

The second point to which I should like to invite your especial attention is that under this bill, public housing will be provided only for families of low income. We feel we possess a large measure of competence on this subject because members of our association have had extensive experience in the operation of low-rent housing projects under the United States Housing Act of 1937. On the basis of this experience and in the light of the language of H. R. 4009, we are completely satisfied that the public housing projects built under that bill will (a) provide housing only for low-income groups, (b) not compete with standard private housing, and (c) house low-income families who are in most urgent need of housing.

We need not go beyond two sections of the bill to find the language which sets up clearly and unmistakably a prohibition against this housing serving any group other than the low-income group and for the absolute protection to private enterprise against competition by the public housing program.

Section 201 reads, in part, as follows:

(b) the Authority shall not make any contract for loans (other than preliminary loans) or for annual contributions pursuant to this Act with respect to any low-rent housing project initiated after March 1, 1940 * (ii) unless the public housing agency has demonstrated to the satisfaction of the Authority that a gap of at least 20 per centum has been left between the upper rental limits for admission to the proposed low-rent housing and the lowest rents at which private enterprise unaided by public subsidy is providing (through new construction and available existing structures) a substantial supply of decent, safe, and sanitary housing toward meeting the need of an adequate volume thereof.

Then, in section 206, we find the following: The dwellings in low-rent housing as defined in this act shall be available solely for families whose net annual income at the time of admission, less an exemption of $100 for each minor member of the family other than the head of the family and his spouse, does not exceed five times the annual rental (including the value or cost to them of water, electricity, gas, other heating and cooking fuels, and other utilities) of the dwellings to be furnished such families.

From these two sections, it is obvious that the bill provides adequately for the restriction of admission to public housing facilities to families in the low-income group. It is clearly provided that the ceiling rental payable by tenants admitted to public housing must be

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at least 20 percent below the floor of private enterprise, and that no family may be admitted whose income exceeds five times the rental (less certain minor exemptions provided for in section 206).

As a further safeguard, most State statutes under which local housing authorities are established limit the local agencies to the acceptance of low-income families. For example, similar to the laws of many other States, the Virginia State Housing Authority's Law restricts eligibility to "persons of low income” (see sec. 10 of the State law); and this term is defined in section 3(j) aspersons or families who lack the amount of income which is necessary (as determined by the authority undertaking the housing project) to enable them, without financial assistance to live in decent, safe and sanitary dwellings withouť overcrowding.

In addition to the foregoing, other provisions of section 201 require that every public housing agency must fix maximum income limits for the admission and for continued occupancy of families in the public housing projects, and that there must be a finding that the family, at the time of admission, lived in unsafe housing. Thus, by virtue of the requirements (a) that eligible families must be families who are in the lowest income group; (b) that eligible families must be those who cannot afford to pay enough to cause private enterprise in the locality to provide an adequate supply of decent homes for their use; (c) that there must be a gap of at least 20 percent between upper rental limits for admission and the lowest rents at which private enterprise is providing a substantial supply of decent housing; (d) that eligible family income cannot exceed 5 times the rent; (e) that the public housing agency must fix maximum income limits for the admission and for the continued occupancy of families; (f) that each family, at the time of its admission, actually lived in an unsafe, insanitary or overcrowded dwelling, or was to be displaced by another low-rent project or by a public slum clearance or redevelopment project, or actually was without housing, and (g) that the local agency must demonstrate to the satisfaction of the Government that there is a need for such low-rent housing which is not being met by private enterprise, it is eminently clear that under the United States Housing Act, as amended by title II of H. R. 4009, only families of low income will be eligible.

In support of our contention that this bill will actually serve the needy, we invite your attention to other portions of section 201 of H. R. 4009, which provide (1) against any discrimination in tenant selection of families whose incomes are derived from public assistance, and (2) that in selecting families for admission, not only must the families be needy, but preferences must be given to families whose need is the most urgent. Furthermore, in order to make dwellings in public housing continuously available to families of low income, the bill requires periodic reexamination of the incomes of the families already admitted, and provides that any families whose incomes have risen beyond the approved limits shall be required to move from the project.

Certainly this title, which reflects the experience gained in operating low-rent programs since the enactment of the Housing Act of 1937. embodies every necessary and practical provision which will assure to the Nation that its low-rent housing program will serve low-income families in the most urgent need.

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