Mr. GRAY. We have the number of men employed, but not their

names.

Mr. DIRKSEN. I do not want the names, but I thought it might be interesting to show the number of men employed, because it has some relationship, of course, to the present growing unemployment situation in the country.

Mr. GRAY. I think we can do that. We shall be glad to insert a statement in the record on that.

(The statement requested is as follows:)

EMPLOYMENT

For the week ending November 27, 1937, 88,274 men were reported employed on Federal and non-Federal projects. Of this total, 14,947 were working on Federal projects and 73,327 on non-Federal projects.

RELIEF LABOR

During the month of November 1937, 12.5 percent of the employees on nonFederal projects operating under the E. R. A., 1935, and F. D. A., 1936, programs were taken from relief rolls. This represents a gradual reduction in such employment from the month of March, when the peak of the year was reached at 25 percent.

The 12.5 percent as compared with 30 percent for the corresponding period in 1936 represents a considerable decrease which is caused by the fact that most of the projects under these old programs have reached the construction stage where the majority of employment required is of the skilled and semiskilled class. For the next few months while the P. W. A. E. projects are in the early stages of construction, the percentage of employees taken from the relief rolls should increase considerably.

Attached hereto is a table showing estimated employment in terms of manmonths for that portion of the program remaining to be completed.

1

Estimate of average number of men to be employed per month in the completion of the Public Works Administration program of non-Federal projects Dec. 31, 1937Dec. 31, 1940

1 Figures represent average number of men to be employed for each week in the month.

12,000

Mr. HOUSTON. I would like to state for the record that I am sorry to see this activity of the P. W. A. curtailed. I think it has been one of the finest things that we have had. I believe in a long-term, longrange building program. I think that it is essential, to take up unemployment in emergency periods.

TRANSFER OF PERSONNEL TO FEDERAL HOUSING AUTHORITY

Mr. JOHNSON of West Virginia. Are you transferring any of your people to the Federal Housing Authority?

Mr. BURLEW. We transferred 1,404.

Mr. JOHNSON of West Virginia. Do you propose to do that as fast as you can?

Mr. BURLEW. There are a few being transferred from time to time; that is, special cases where they have particular qualifications or knowledge. That is a mere handful. As a matter of fact, the Housing Authority will probably be overstaffed in a few months, as soon as the Federal housing projects are completed.

Mr. JOHNSON of West Virginia. What do you mean by overstaffed? Mr. BURLEW. As the Federal projects are completed, they will have to lay those people off, just as we are doing in Public Works. But we transferred the whole staff over to them, intact.

Mr. GRAY. I might explain to you that they have 51 large Federal projects which they are finishing up. Those are direct Federal contracts, not loans, such as the P. Ŵ. A. makes. Those contracts are made direct by the Federal Government. Therefore, they take quite a large engineering staff in the field during the process of the contract.

But those are practically winding up now. Those are the ones that Mr. Ickes built, and all except four or five of them will be completed by January, I think.

SLUM-CLEARANCE PROJECTS

Mr. FITZPATRICK. These are slum-clearance projects, are they not? Mr. GRAY. Yes. Half of it was slum clearance.

Mr. FITZPATRICK. Can you explain this to me? Where there is a slum-clearance project do the people who were living there at the time that the slum was cleared, go back to the improved project? Mr. GRAY. Some of them went back, not all of them.

Mr. FITZPATRICK. Are they able to pay the rent in the new project? Mr. GRAY. Some of them are, in New York City, particularly. Mr. FITZPATRICK. Now, where they have had slum-clearance projects, applications have been made throughout the community for residence in the new project. I do not know how they pick these people, but they do not pick them merely because they previously lived in that section, do they?

Mr. GRAY. No, sir.

Mr. FITZPATRICK. I thought the object was to clear out the slums

Mr. WOODRUM. They cleared them out, did they not?

Mr. FITZPATRICK. But the people who lived in them, where did they go, to a worse place?

Mr. GRAY. No; they usually went to a better place.

I

I was with the P. W. A. Housing Division for a year or more. happen to have some direct knowledge of the Secretary's housing program. Those people, whenever they went out of a slum, the Government was very careful to see that they-they made a particular point of it-that they were all relocated during the construction period, in similar or better quarters.

Mr. FITZPATRICK. At the same rental?

Mr. GRAY. In those days, at the same rental. But I doubt whether it can be done today, because rents have advanced considerably. Conditions change very rapidly, have changed very rapidly in the last two years. The housing shortage has become very acute.

Mr. FITZPATRICK. Will you name one location where they had a slum-clearance project and where the people who lived in the slums, before they were cleared, went back to the new house or apartment and lived there, at the rents that you charged?

Mr. GRAY. I am only speaking from my memory, but in Williamsburg, N. Y., the Government rent was set at $7, including heat and hot water. I think there were some investigations made before I came in there. I have heard them discussing that with people in the Housing Division. The average rent paid in that slum was about $6. Mr. HOUSTON. Per month?

Mr. GRAY. Yes, sir; that is, $6 before the slum was cleared.

Mr. FITZPATRICK. Where there were a couple of children in the family, they would have to have five rooms. That would make $30

a month.

Mr. GRAY. Yes, sir.

Mr. FITZPATRICK. How much do they pay in these slums?

Mr. GRAY. About the same amount. That is, if they had the same number of rooms. But, you understand, in a slum dwelling. they are crowded in, two or three families in a room. You will find conditions in Washington where there are five or six people living in the same room. You cannot house those people at the same price. Mr. FITZPATRICK. That is just what I am trying to get at. Mr understanding is that there were people living in these slums, which were later cleared, who were unable to go back into the new buildings because they could not meet the rental charge.

Mr. GRAY. They could not meet the rental of a decent place before. either.

Mr. FITZPATRICK. I still do not understand where the people who lived in the slums would get any benefit out of that.

Mr. GRAY. I just stated that in Williamsburg, as far as I remember it now, they got, for practically the same rent, much better accommodations.

Mr. FITZPATRICK. What percentage of the people who live in this Williamsburg project, lived there previously?

Mr. GRAY. I cannot tell you that, sir, because I have not been in housing since November

Mr. FITZPATRICK. I think you will find that it is a very small percentage.

Mr. GRAY. Yes; I think probably that is so.

Mr. FITZPATRICK. So-and this is the point that I am trying to get at the people who live in the slums do not get the benefit of the slum clearance.

Mr. WOODRUM. Do you not think that it is impossible to be so optimistic as to believe that we can get any kind of slum-clearance project where the rent will be less than $7 a room?

Mr. GRAY. Yes, sir.

Mr. WOODRUM. You think you can get it less expensive than that? Mr. GRAY, Yes.

Mr. BURLEW. With a larger subsidy, of course.

Mr. GRAY. Of course, that is an element.

Mr. WOODRUM. You would not need any rent at all if you had enough subsidy.

Mr. FITZPATRICK. You do not mean if it is self-supporting?

Mr. GRAY. I spoke of a $7 rent, Mr. Chairman. That was in New York City with land at $4 or $5 a square foot. We had to amortize

the land, too.

We could reduce that in some southern cities to as low

as $3.97 a room. It depends on the construction value, upon the price of your land and the kind of building it is.

Now, that $7 rent that I mentioned was set under the GeorgeHealey Act, which we had to operate under. They got a 45 percent write-off of the construction cost, after which you set the rents according to the remaining value or investment of the Government.

Now, the United States Housing Authority is operating under the Wagner-Steagall Act, which is not the same form of subsidy, but in effect is a 100 percent capital grant and, of course, they can therefore get rents very much lower on those same projects. They could reduce that $7 rent to probably in the neighborhood of $5, under the Wagner-Steagall Act.

COST PER ROOM OF SLUM-CLEARANCE PROJECTS

Mr. FITZPATRICK. How much did it cost per room to construct those buildings in the Williamsburg project?

Mr. GRAY. I do not have the figures in my mind, but they were all submitted to this committee last year. I submitted them myself when I was director of housing at that time.

Mr. FITZPATRICK. Can you not recall? You know, there has been a lot of talk in the newspapers, and there has been testimony before committees, about this, and surely, in your position, you ought to have an idea of what it would cost per room for this construction.

Mr. GRAY. I had 51 of them and they varied all the way from $800 to $1,800 a room. That depends upon the locality. In a city like the city of New York, with labor rates as they are and land costs, it would be much more expensive.

Mr. FITZPATRICK. $1,800 per room? Let me tell you this. You can go up on the Concourse in the Bronx and in very fine locations you can build apartment houses for a great deal less; and that is being done to accommodate people who go in there and pay $125 and $150 per month rent. And you can construct those apartments for a great deal less than that. Why should the Federal Government pay such a large amount for constructing slum-clearance projects?

Mr. GRAY. The Federal Government was operating on a 30-hour week. And the Federal Government was operating on full union wages and no kickbacks.

Mr. FITZPATRICK. Do you know of any contractors in a city who are not paying union wages and working union hours?

Mr. GRAY. I know of a number of them that are in jail because of the kickback; and we put them there.

Mr. FITZPATRICK. They are the exceptions. Those things are bound to happen. But I am talking about the average contractor in New York City.

I have heard a lot about the cost per room of this construction. One man said to me that the Federal Government actually constructed a building on a slum-clearance project for people who could not afford to pay, but that the construction material must be of the very best quality, everything in it must be of the very best quality, that you must give them everything that money can buy. I said to him, "And that is for people who cannot afford to pay?" and he said, "Yes."

On the other hand, a man who is making $5,000 a year and is willing to pay $100 or $150 a month rent, he is not entitled to the same conditions, the same high quality of construction, as the person who cannot afford to pay. It seems to me that is a pretty poor argument.

Mr. GRAY. But that is not a true argument, because the Government did not put in the best materials just because it was a slumclearance project. We put in the best materials in order to get a low cost, in order to enable us to have a 60-year amortization. When you erect a building to last 60 years, to be amortized over a period of 60 years, you have got to put pretty good stuff in. You cannot put shoddy stuff in. If you do, it will cost you more money in the end. You cannot get low rents unless you do amortize over a period of 60 years, because half of your cost is your financial cost. Just remember that a 1-percent difference in the interest rate means from 70 cents to $1.25 per room per month in the rent. And if you do not build for 60 years, you might save something by building a shoddy building and reduce your amortization. But you would be surprised to find that your rent will have to be higher on your shoddy building with short amortization, than your rent in the fine building with long amortization.

That is what the man who was talking to you did not understand. Mr. BURLEW. Another thing, Mr. Congressman: This activity is supposed to improve living conditions. The Government should not start building more slums.

Mr. FITZPATRICK. I appreciate that. But do you not think that a man who is paying $100 or $150 a month rent is entitled to just as good living conditions as the man who cannot afford to pay $15 or $20 a month?

Mr. BURLEW. If he can afford it, of course. But I do not think he is in the same situation as the man who is in the low-rent class.

Mr. FITZPATRICK. I am for slum clearance; I think it is a fine thing. But I do not believe it is necessary to go to the great expense that we have been going to to put up these projects.

Mr. BURLEW. These are demonstration projects, too. It is an effort to demonstrate how better living conditions can be provided. And it was an experiment, to start with.

Mr. FITZPATRICK. I favor a subsidy to help these people.
Mr. GRAY. You have to have it.

But

Mr. FITZPATRICK. I think something like this should be done. we must be very careful as to the amount of money that we are going to spend in improving conditions. I am in favor of their getting better living conditions throughout the country, especially in the large cities. Mr. GRAY. You may be interested to know that when the Harlem homes project was opened, carrying out the limitations of the GeorgeHealey Act, no man could live in there who had an income of more than five times the annual rent that he was paying; and you must be living in substandard dwellings, that is, a dwelling needing major repairs, or with disgusting sanitary conditions, things of that kind. And those were investigated to see that that was the situation.

In that project, with 500 apartments, at $7 per room per month, in the city of New York, there were 14,000 applicants, living under those conditions in the city of New York, at the same or a higher rent.

Mr. WIGGLESWORTH. Is that the only project that is subject to that limitation?