this policy and will continue to do so. We differ sharply from the proponents of this bill in that we believe the Government action which is required should be State and local government action, and not Federal Government action. Action in this field of urban redevelopment can and will be made effective only through the cooperation, the initiative, and the continuing interest of the citizens' organizations in our communities which have a direct stake in them. We will not and cannot redevelop our communities from Washington.

Progress is being made along these lines of local responsibility in many cities. Thirty-three States have urban-redevelopment laws, all of comparatively recent enactment. A redevelopment program of substantial scope has made considerable headway in Indianapolis, financed with funds raised locally. A large program is ready to start in Chicago, financed with State and local funds. Progress is slower than we would like, but the problems are complex and not easy to solve. The Federal Government's intervention will not make them any less complex or any less easy to solve. As a matter of fact, it is much better that experimentation in this field should be carried on by the communities themselves on their own responsibility. Our records indicate that active interest is being taken in slum clearance and urban-redevelopment activities in Indianapolis, Chicago, Detroit, Washington, Baltimore, Providence, Philadelphia, Norfolk, San Francisco, Los Angeles, Cleveland, Pittsburgh, and many other cities. I might add that in Washington, D. C., redevelopment legislation was passed by Congress in 1946, but no funds have yet been appropriated to make it effective. Since the Capital City is a proper part of the Federal Government's responsibility, it would seem that Congress could well devote its attention so far as slum clearance and urban-redevelopment is concerned to the Capital City and leave responsibility for these problems in other communities to the States and local governments, where it belongs.

Title II of the proposed bill would launch the Federal Government into an extensive program of subsidized Government housing. Annual subsidies could amount to $85,000,000 in the first year, rising to $400,000,000 after 4 years. The proposed bill would authorize the provision of 1,050,000 new dwelling units to be built in the next 7 years. The size of this large Government-subsidized building program may be gaged by the fact that it equals all the dwellings which would be built by private enterprise in a record-breaking building year.

The national chamber has been opposed to Government-subsidized housing since these proposals were first brought before the Congress. We have consistently opposed them and will continue to do so, because we believe that the improvement of housing and the clearance of slums and the rebuilding of blighted areas are State and community responsibilities and not responsibilities of the Federal Government.

Experience with Government housing to date demonstrates clearly that it does not relieve or take care of the housing needs of the poorest families. On the contrary, it is used to house people who can and should take care of their own housing requirements. Experience demonstrates that, regardless of legal concepts, the local housing authorities are for all practical purposes arms of the Federal Government. The administrators of these Government-subsidized housing projects owe their loyalty to Washington and not to the common councils of their respective communities.

Past experience with Government housing built by Federal subsidy has never been satisfactory to Congress. Subsistence homesteads, PWA housing, the Greenbelt towns, and, finally, the United States Housing Authority Act of 1937; all these have been authorized, tried out, and found wanting. Congress has twice-in 1938 and again in 1939 refused, after careful study, to continue to subsidize welfarehousing construction. The lessons of experience should not be overlooked.

The task Force Report on Lending Agencies, prepared for the Commission on Organization of the Executive Branch of the Government, has prepared an important memorandum with regard to the Public Housing Administration. The following significant statements with respect to the financial activities of the Public Housing Administration and the local housing agencies are taken from this memorandum and appear on page 82 and following of the report:

The local housing agencies are not true borrowers. Insofar as the low-renthousing projects and the related PHA loans are concerned, they are not financially responsible entities. They have no capital and they have no source of income other than the operations of the housing projects. ** *

The use of the lending form and the lending terminology in the Government's low-rent-housing activities is part of a general plan designed to place responsibility in the local housing agencies. It helps impart to the activity the appearance that ownership of the properties is vested in local housing agencies from the outset, and in this way it helps to deemphasize the subsidy aspects of the transfer of ownership. The annual Federal subsidy contribution, the voluntary local contribution through tax exemption, the debt service charges, and other aspects of the arrangements between the parties are other phases of the plan. As a matter of fact, under our ordinary concept of property rights, the public-housing projects are wholly owned by the Federal Government at the outset and they are transferred to the local agencies gradually, over the years, without monetary consideration. The financial arrangements which appear to exist are fictional arrangements. The PHA loans are not loans at all, and should not be dealt with as though they were.

Title III-research-amends title III of Public Law 901, Eightieth Congress, approved August 10, 1948. It would expand the existing authority of the Housing and Home Finance Agency Administrator to undertake and disseminate the results of research in any field of inquiry-technical, legislative, economic, social-having in any way to do with the housing situation.

This title instructs the Administrator to prepare national estimates on nonfarm housing needs and to correlate and recommend proposals for executive and legislative action "necessary or desirable for the furtherance of the national housing objective and policy established by this act."

We believe that this title goes far beyond the necessities of such limited Government action in the housing field as is appropriate. The broad and loosely worded authorization of research in the social and economic aspects of housing could be used to set up a Government-supported propaganda agency. As regards technical research, however, there is justification and precedent for some Federal activity.

In the last analysis the improvement of the housing conditions of the people is dependent upon the technological advances of the building industry. The application of the principles of industrial research to building construction is of the utmost importance in bringing about such advances.

In this connection I want to call your attention to the Building Research Advisory Board which was recently set up in the National

Research Council. It is patterned after the Highway Research Board which in the last two decades has made notable contributions to the improvement of highway design and construction methods under the auspices of the National Research Council. It is potentially one of the most important steps ever taken to coordinate and stimulate technical research in the field of building construction.

The Building Research Advisory Board held its organization meeting in February of this year under the Chairmanship of Dr. Frank B. Jewett, one of the outstanding industrial scientists of the country. There is every reason to believe that all branches of the building industry, including design, general and specialized contracting and home building, labor, manufacture, and distribution of building products and materials, finance and building management, and the Government will cooperate to make this important undertaking a success.

Now let us consider the building industry's record. The critical shortage in housing has now been overcome. A trip around Washington, or my own city of Atlanta, or any other American community will reveal to the senses the tremendous volume of new construction that has been built since the end of the war. Reports from all over the country show that so-called distress buying-purchases inspired by an acute need for shelter, made with little regard for price or suitability-is a thing of the past. Now we find many completed houses and apartments staying vacant for some time before occupants are found. Sellers of both new and old homes are no longer operating in a sellers' market, and prices are reflecting this fact.

Official figures of the Government confirm this general impression. The Bureau of the Census reports that since 1940 the number of usable nonfarm dwelling units has increased by 6.6 millions net, or 22 percent, while the nonfarm population has increased only 18 percent. In the same period the number of families doubled up has decreased from approximately 62 percent to around 6 percent. Since there was no housing emergency in 1940, how can there be one now. with more dwelling space available per persons? One answer is the fact that during the postwar years new families were formed at an abnormally high rate, but this peak is now well behind us and will have less and less influence as time passes. Another explanation, of course, is that high income and controlled rents have encouraged an extravagant use of space, another factor that will decrease in importance as rents reach an economic level.

The usual reply to these figures is that most of these new accommodations are high in price and hence accessible only to the wealthy. This statement is not true. The Construction Industry Information Committee, a fact-finding group supported by the industry, has made an exhaustive comparison of housing costs and family incomes for the year 1947 based upon official figures issued by the Bureau of Labor Statistics and the Economic Report of the President. This shows that during that year the pattern of building costs over the entire country conformed very closely to the pattern of family incomes.

The industry is definitely building homes in all price brackets. The industry is conscious of the need for stepping up the production of lower-cost homes, and is actively working toward that objective. In this connection, I should mention the industry-engineered-homes program sponsored jointly by the National Retail Lumber Dealers Association and the Producers' Council and the Economy Homes pro

gram of the National Association of Home Builders. All of these developments result from a real and active interest by the industry in stimulating the production of housing in the lower price ranges.

The building industry, like other industries, is entering into a new phase of its postwar activities. It is now definitely in a buyers' market. Competition is becoming tougher. Buyers are getting better bargains. Profit margins and costs are being reduced. As always the forces of a free market are compelling those adjustments which must be made if the economy is to operate on a sound basis. These wholesome readjustments should not be interfered with by undertaking a large program of subsidized Government housing.

The Chamber of Commerce of the United States is of the firm conviction that any proposal to launch the Federal Government into a long-term program of housing and urban redevelopment subsidies is ill-advised at any time, but particularly so under present economic conditions and the need for curbing Government expenditures.

The threat of a program of Government housing is already acting as a deterrent on private building. People hesitate, and will always hesitate, and rightly so, to risk their capital in any field in which they must face the imminent possibility of Government competition. They know that the Government does not have to pay taxes, unless it wants to, and that it can charge its losses to the taxpayer. One of the constructive things Congress could do now to stimulate private building would be to remove the threat of such competition in the field of housing.

Mr. Chairman, I have been in the building-material business in Atlanta, and in the home-financing business for just about 40 years. I should be delighted to answe rany questions that you gentlemen might have, either within the scope of the policy of the Chamber of Commerce of the United States, or to give my own opinions. Mr. MULTER. Mr. Chairman.

The CHAIRMAN. Mr. Multer.

Mr. MULTER. Did you oppose the establishment of the Home Owners' Loan Corporation?

Mr. WEST. Did I oppose it?

Mr. MULTER. Yes.

Were you in favor of it at the time?

Mr. WEST. No, sir; I was not, personally. I do not know what the chamber did.

Mr. MULTER. Are you in favor of the continuance of the Reconstruction Finance Corporation?

Mr. WEST. I was never in favor of its organization.

Mr. MULTER. And you are not in favor of its continuance?

Mr. WEST. Quite, sir.

Mr. MULTER. Are you in favor of the continuance of our United States Public Health Service?

Mr. WEST. 1 do not know enough about that to answer, sir. I am not a health man.

Mr. MULTER. Are you in favor of the continuance of the Federal Deposit Insurance Corporation?

Mr. WEST. I should say yes, I have been all the time-that is providing the premium that the banks have to pay is adequate to maintain the confidence of the depositors in the banks.

Mr. MULTER. I understand then-

Mr. WEST. I think it is largely misunderstood, sir, and I think if many bankers can explain its settlement feature-which I think I

can

Mr. MULTER. Tell me this: Is the theme of your argument today in opposition to this bill which we are now considering, that there is no housing shortage?

Mr. WEST. I think this year is a year of specialty, so far as housing shortages are concerned. Certainly in many cities they have already found that they have totally overbuilt in all kinds of housing. I think it behooves every city-and we have tried to tell the local chambers this year, starting in early January or before, in fact, in Novemberthat they should have, if they could, some sort of house count made to determine the kind of housing that was actually needed in their community this year, and, if possible, encourage the building of that particular kind so that the load might be complete and adequate.

Mr. MULTER. Do you think the low-income families of our country are decently housed today?

Mr. WEST. Well, some of the people that have had good-sized bank deposits have been in the worst slum areas; you know that.

Mr. MULTER. That does not answer the question.

Mr. WEST. The term "low-income group" does not particularly appeal to me because it has been my experience all my life that if a man had the ambition to have a house he could get one that suited him in some way.

Mr. MULTER. Even if he was not earning enough with which to pay the rent demanded for a decent house?

Mr. WEST. Of course, I think the earnings of a man in this country, operating as a free society, might be very low at this moment but it might be very high 20 years from now.

Mr. MULTER. As low as it is at this moment, it is higher than it has ever been, is it not?

Mr. WEST. Well, I cannot talk of all time.

Mr. MULTER. Well, within your memory. Within your adult life. Mr. WEST. You mean the income of every man?

Mr. MULTER. Yes, sir; average income.

Mr. WEST. Measured in present-day dollars, yes. I should say so. Mr. MULTER. You are in entire disagreement with the mayors and governors who were asked to answer this question :

To what extent are your cities, in conjunction with the State government, in a position to finance the write-off of excessive costs of acquiring and clearing slums and blighted areas if this land is to be made available at prices permitting its redevelopment for the uses which your cities determine are most appropriate? Every governor and every mayor who was asked that question said that his city and his State could not do it all alone. Seven of the governors and 20 of the mayors said they could do some of it, but not all of it. That is, without any outside help. Twelve governors and 39 mayors said they could not do any of it unless they got outside help. Apparently you are in disagreement with that.

Mr. WEST. Well, your question is pretty broad. I should like to answer it, but it would take a little time.

To start with, I do not think the mayors and the governors have much experience in the matter of either clearing slums or redevelopment.