to work under cover at one time. Weather ceases to be a factor once the roof is on, and less time is lost due to this factor.

Today a spot survey shows trussed rafter construction is being used in 33 States and the District of Columbia. Here in the Washington metropolitan area alone this economical method that has been developed entirely through industry research has been used in building 3,700 housing units.

I am stressing this one type of improvement in the traditional uses of lumber in home construction as one example of the sort of economies which are and can be realized from the nearly 9,000 research projects being carried on by private lumber and wood products manufacturers.

Hundreds of other similar improvements would be equally good as examples of what private industry is doing, and will continue to do in the field of research and of development of new and improved methods of using existing materials and of perfecting new products.

But the incentive which private enterprise must have to continue doing all this will not survive if faced by replacement through a program-at the taxpayers' expense-such as the type represented by this bill. Then what is proposed here is a program which authorizes the Federal Government, under the guise of research, to engage in the architecture, engineering, and the designing of buildings; to engage in the manufacturing, production, distribution, and retailing of building materials; the building, financing and selling of homes; the inventing, production and marketing of new materials to take the place of those made by private businesses now paying taxes.

Surely the committee is not aware of the full implications and the breadth of the authorization granted by the paragraph (a) of section 301 of the bill.

The Government would be authorized to do all these things without the necessity for any one of these projects to be self-supporti luxury that private enterprise cannot afford, and pay taxes too.

In closing, let me emphasize that the fullest development of technical processes, of new products useful to men, and of new methods of manufacture, will come from American industries with the incentive to exercise their freedom to explore, to discover, to invent, to improve and to produce new techniques, methods, materials and devices which they can sell.

It would seem to me highly desirable that the Public Housing Au thority should be directed to consult and advise with industry committees in the matter of research.

It is, therefore, my suggestion that you place on page 50, line 13, immediately following the word "authorizer," deleting the comma and add "and directed," which will give industry-and after all, they are the ones paying the bill, you know-some voice in the determination of policy regarding research.

Mr. Chairman and members of the commitee, I think you for your courtesy.

The CHAIRMAN. Thank you, Mr. Fuller.

Have the costs of building materials been reduced within the last year?

Mr. FULLER. Of course, I cannot pose as an authority on prices, because as you know, with the consent decrees under which we operate, we are not supposed to discuss prices.

However, from the standpoint merely of an observer, from reading the periodicals and lumber trade journals, it is estimated that the price of lumber, in the past 4 or 5 months, has been reduced as much as 25 to 30 percent.

We have had a tremendous decrease in the number of sawmillsparticularly in the South, Mr. Chairman.

It is estimated that several thousand sawmills have closed in the 11 Southeastern States in the last 4 or 5 months.

The CHAIRMAN. Do you think that decrease will continue?

Mr. FULLER. I cannot say. There are a number of factors that go to assist or accelerate that trend, or make that trend a rather fixed proposition at this time.

Our exports have practically disappeared. In 1948 our exports to the United Kingdom were 15 percent of the depression year averages, 1935-39. If it had not been for the first quarter of 1948 they would have been down to about 7 percent.

As it appears now, they will be about 2 percent of what they were in that 1935-39 average.

Southern pine in 1947 exported to the United Kingdom 38,000,000 board feet. Last year we exported 35,000 board feet. That gives you an idea of what happened in that field.

We have traditionally been an exporter of lumber. We had, prior to the war, from two to three times as much export as we had imports. Last year the situation was reversed, to the proportion of about 3 to 1 imports over exports.

In the case of Douglas fir, our imports from Canada last year ran about 1.8 billion feet. That is an increase of about 400 million feet over 1947.

So with that condition prevailing in our export market, which traditionally has taken about 7 or 8 percent of our total production, we cannot look for any great improvement. Our lumber stocks have materially increased in this country in the past year.

The CHAIRMAN. Do you think we can look for much immediate assistance from prefabricated housing?

Mr. FULLER. I cannot say as to that. I have heard the statement made by people in this committee room that we were still operating, we were still building houses like we were a hundred years ago. Of course, I do not agree with that at all. Our technology has increased tremendously in that field, and I believe that the statements made here yesterday by Mr. Bodfish were very correct insofar as the other influences on cost that we have to contend with are concerned, such as labor and other things of that kind for on-site construction. You will have to change the desires of the persons who want to live in the house. The CHAIRMAN. Are there further questions?

Mr. KUNKEL. Mr. Chairman.

The CHAIRMAN. Mr. Kunkel.

Mr. KUNKEL. Mr. Fuller, I probably should have asked this question of one of the builders, but perhaps you can answer it. If you cannot answer it, just say so.

I have always wondered how much reduction in the price of a house could be effected if the higher-priced type of accessories were not put in. Say, instead of a chromium-plated refrigerator, an ordinary serviceable refrigerator, and an ordinary serviceable furnace instead of the latest new type of automatic furnace.

If that were done all along the line, how much do you think it would lower the cost of a low-priced dwelling?

Mr. FULLER. I would not know, Mr. Kunkel. Of course, they do go in for that very fancy type of equipment in all these houses but I do not know what the difference would be.

Mr. KUNKEL. I have often wondered whether it was not the fault of manufacturers and builders who naturally push the higher-priced lines, that the prices of dwellings are so high.

Nowadays people are so accustomed to that type of equipment that it is hard to sell them a house that does not have that kind of accessories. At the same time I think that is probably a very important factor in the cost of housing.

Mr. FULLER. We have made some rather interesting observations on the costs of construction, and we have tried to give those observations to the FHA, and they have been very interested-for instance, in such things as No. 2 oak flooring. I do not think you can buy any No. 2 common oak flooring in the Washington area right now but it will wear as well as the No. 1 common oak flooring, and in a small home it will effect a saving of around $50.

There is also the third grade maple flooring which has real merit. As far as lasting qualities and beauty is concerned, it is just as good as the No. 1 common.

Mr. KUNKEL. Is that being used in many houses?

Mr. FULLER. FHA approves No. 2 common oak flooring only in five States the Rocky Mountain States, oddly enough. I cannot understand why they do not approve it everywhere, but there are only five States in which FHA approves No. 2 common oak flooring.

Mr. KUNKEL. My point is, if you took all those little savings, such as the $50 on the illustration you have given, and the other savings which could be effected, I believe we could appreciably cut the cost of housing and put out a lower-priced house that would be somewhat in the same nature of the old Model T Ford when it was put on the market. In other words, it would not be top notch, the maximum in beauty and efficiency, but it would serve every sanitary use and every ordinary convenience.

Mr. FULLER. I think you are right.

The CHAIRMAN. There is an automatic roll call on the floor and we will have to suspend.

Mr. COLE. I have just one question, Mr. Chairman.

The CHAIRMAN. Very well, Mr. Cole.

Mr. COLE. Did you hear my questions to the former witnesses about the possibilities of savings by cooperatives purchasing construction materials at wholesale?

Mr. FULLER. Yes, I heard your question. Well, from the standpoint of saving, the great cost of a home is not in the materials. Even if we have a very drastic cut in the cost of lumber, the net result to a builder of a house would not be materially reduced. I would hate to think that our traditional way of selling lumber, through our retailers and others, might be discontinued.

They serve a very definite purpose in the whole scheme of merchandising.

Mr. COLE. I will not pursue the question further.

The CHAIRMAN. Then you are excused, Mr, Fuller.

We have another witness to hear, and we will resume the hearings as soon as we have answered the roll call.

We are glad to have your views, Mr. Fuller.

Mr. FULLER. Thank you, Mr. Chairman.

(Whereupon, the committee recessed to answer roll call.)

The CHAIRMAN. We will resume please. Our next witness this afternoon will be Mr. Barger, representing the National Economic Council.

STATEMENT OF HARRY S. BARGER, REPRESENTING NATIONAL ECONOMIC COUNCIL, INC.

Mr. BARGER. Mr. Chairman and gentlemen of the committee, with your permission I appear for the National Economic Council, Inc., in opposition to the pending housing bill, H. R. 933.

The National Economic Council, Inc., is a private, nonprofit organization supported by contributions of its members and friends for the promotion of sound, economical, and constitutional government.

I cannot believe it is a proper or constitutional function of the Federal Government to provide housing for private individuals. If it be said there is now a precedent for it, my thought is that the Constitution is the one great precedent, and one violation of that great document does not justify continued breaches.

The various Federal housing programs which have operated since 1934 appear to have been born of the thought that one-third of the Nation's citizens are ill-housed.

To June 30, 1948, the Federal Government's expenditures and incurred contingent liabilities in the field of public housing aggregated more than $16,700,000,000.

I am mindful it will be claimed that contingent liabilities are not for consideration; but answer is made that quite a large part of such liabilities is more likely than not to ripen into accounts payable when the final balance is struck on the Government's paternalistic housing programs.

Federal public housing appears to have been begun with Rexford Guy Tugwell's ill-fated resettlement program, which was followed by Mr. Ickes' Public Works Administration's venture into the field of slum clearance and low-rent housing.

The Ickes program was originally called low-cost housing, but, when it was soon found that the cost was anything but low, the program speedily became known as low-rent housing. When Mr. Ickes rendered his final report on PWA, in a book entitled "America Builds," he admitted that his housing program had cleared but few, if any, slums. He asserted, however, that his program had served to put the Federal Government into the field of public housing.

Next came the slum-clearance program of the United States Housing Authority authorized by the act of September 1, 1937, empowering USHA to make loans to local housing authorities up to 90 percent of project costs, and to subsidize the finished projects over long periods of time to maintain them as low-rent properties.

During the recent war, approximately $7,000,000,000 was spent in financing and producing defense and war housing enough, as one FHA official put it, completely to rebuild the communities of Portland, Maine, Washington, D. C., Atlanta, Ga., and St. Paul, Minn. The

greater part of the defense-and-war housing is due for abandonment and disposition because of its temporary character.

The 1948 budget shows that two defense-and-war-housing projects indicated operating profits, while four other housing projects, including permanent housing, reflected operating losses. No detailed operating statements are found in the 1950 budget; but enough is there said in the text of the budget requests to show clearly that the housing programs constitute a very heavy burden on the Treasury, both in production and operating costs.

In February 1942, the President found that 18 separate Federal agencies were engaged in providing defense-and-war housing; and, by Executive order, the National Housing Agency was created and those scattered activities were brought under that new agency along with the Federal Public Housing Authority, also created by the same Execu

tive order.

In that consolidation of agencies and activities, the United States Housing Authority and several other establishments which Congress had created as bodies corporate were abolished as corporate entities and they became, ever since have been, and still are, mere administrative agencies under the NHA and its successors.

At or about June 30, 1947, after some 13 years of Federal housing programs, Federal aid and assistance had produced approximately 1,208,654 dwelling units of every kind and description, of which only about 206,109 dwelling units clearly appear to be permanent housing.

The costs or allotments for these 1,208,654 dwelling units appear to have aggregated $3,178,296,006, and the estimated average dwellingunit costs thereof appear to have been $5,905 for the Ickes projects, $11,550 for the Tugwell projects, $4,521 for the permanent USHA projects, $4,647 for the National Capital Housing Authority's projects in the District of Columbia, and, for the most part, somewhat lesser costs for the temporary war housing.

Mere estimates of project and unit costs appear always to have been furnished by Federal housing officials when such information has been requested by committees of Congress, as appears from prior committee hearings. No assurance whatever has been found that the housing agencies' administrative costs have been reflected in the estimates which have been furnished.

It seems well established that exorbitant and unconscionable prices have been paid for Federally aided housing projects. There I should like to say that a little later on I will have a few additional remarks on that if I may.

Housing authorities have used new sites instead of cleared slum sites, as specifically required by the Housing Act of September 1, 1937. Elaborate and costly operating management organizations were created, sometimes before work on a project commenced.

Mr. BUCHANAN. At that point, will you yield for a question? The Housing Act of 1937 did not provide that they would use the cleared slum sites.

Mr. BARGER. That is my understanding of it, sir.

Mr. BUCHANAN. The language in the act specifically states "in the locality or metropolitan area."

Mr. BARGER. Mr. Straus, in his book I think, clearly concedes that it was the purpose of that act that they should use cleared slum sites for projects they financed.