is the use of building hospitals, if constantly in these communities we are spreading these germs of moral and physical dissolution. I want, as the close to my testimony, to read into the record just a paragraph or two from an article entitled, "Children of the Shadows", by Mr. Paul de Kruif, probably known to you best as the author of Microbe Hunters and other publications. He is interested in this slum problem, and here is how he concludes an article on the subject: As a citizen of this country, I am coresponsible with all citizens for children's wholesale dying because of a miserable lack of dollars. What is my duty, as I sit at my work table before the fire and glance over my shoulder out the window and see the ghosts of the white, thin faces of thousands of raggedy children moving by in a horrid procession, when I hear the ghosts of their voices calling to me: "Paul, you are strong; can't you help us?" What I can do is to offer the chief men of our Government this challenge: Let them leave their bountiful tables and well-heated offices. Let them go into the stinking, tuberculous, pneumonic warrens of humanity in any big city of their choosing. Let them look into the big eyes of the little child who wouldn't ask for gloves if it only had pockets. Let them talk to the undernourished mother whose peaked 11-month-old boy is fumbling at her breast for her milk that's no longer fit to feed him. They can find such cases by the thousands if they have the nerve to look for them. If our chief men would do that, would they give a clear, unequivocal answer to the question asked by Otto Carmichael, wise friend of humanity and sage of Muncie: "What else is money but the lifeblood of society?" My duty is to keep asking over and over again this last question-Why is it, since our Nation's wealth in materials, brains, and willing hands to build houses, to produce good food and medical care, is so limitless-Why is it that we do not find wise, conservative men who could so order our system that, in exchange for the work our people are willing and able to do, our citizens would receive the modest wherewithal that would give all their children a chance for life? The CHAIRMAN. Thank you, Rabbi Israel. STATEMENT OF HON. JOHN H. FAHEY, CHAIRMAN, FEDERAL HOME LOAN BANK BOARD The CHAIRMAN. Mr. Fahey, your residence is Boston, Mass.? The CHAIRMAN. Your official position is chairman of the Federal Home Loan Bank Board? Mr. FAHEY. Yes, sir. The CHAIRMAN. The committee will be pleased to have your views. Mr. FAHEY. Mr. Chairman, I am very sorry to say I have not had the opportunity to study this bill thoroughly, but I have had a chance of becoming familiar with its general outline and I know its objectives, of course, and I want to say in expressing only my personal views, that I am heartily in favor of this type of a publichousing program, and I am in very great sympathy with the underlying principles of this legislation. I think it is wholly unnecessary for me to review the facts that have doubtless been placed before you by other witnesses, or will be, as to the economic and social cost of bad housing, or the need of making a vigorous beginning on a program such as is proposed here. I assume likewise that the fact will be emphasized, or has been, that you just will not begin to make progress on this problem unless the Federal Government itself assumes the leadership and keeps at it persistently. I think anyone who has been at all familiar with the problem for years past, recognizes that we in the United States are decades behind the older countries of Europe in attacking this problem. When we consider our neglect in that respect, it certainly reflects no credit upon the leadership of this country. As I have stated, I do not feel competent to discuss the detailed features of this bill, because I have not given them sufficient thought, but I do not see anything in the general purpose that is open to serious objection. Perhaps there are some questions you would like to ask, or Senator Wagner would like to ask, that I might answer. The CHAIRMAN. You heard the testimony of Mr. McAvoy? The CHAIRMAN. What do you think of his suggestion about the $800,000,000 that is still available? Mr. FAHEY. I think Mr. McAvoy is mistaken with reference to the need of that $800,000,000 or any part of it for taking care of the refinancing of mortgages such as the Home Owners' Loan Corporation has been taking over. All of the evidence before us out of the experience of the last year indicates very conclusively that there is a little demand for public refinancing of mortgages in distress. That was the task that was assigned to the Home Owners' Loan Corporation. We were of the opinion, the members of the board, the State and other managers, a year and a half ago that it would take much more than 3 billion dollars to satisfy demands which then confronted the Corporation. We received all told about 1,880,000 applications aggregating claims of over 6 billions of dollars. We thought it would take very much more than 3 billions to clear that situation up. We now have less than 20,000 applications on hand to dispose of. I do not recall the very last figure, but it is comparatively small, and they should all be out of the way easily enough before the 1st of June. Our experience has been not in merely tens of thousands, but in hundreds of thousands of cases of applications filed with us, that the change in conditions and real estate values during the last year has caused the private lending institutions, holding mortgages on the applications that had been filed with us to be very ready to change their attitude and refinance those obligations themselves, instead of looking to the Home Owners Loan Corporation to do it. That is the principal explanation of the elimination of an enormous proportion of the applications on file with us. Senator WAGNER. I take it you have reached the conclusion which seems to be justified by the fact that the unquestioned duty of our Government, that is, the preservation of the home owner and his property, in that we have turned the tide now, and the time has come for the construction of new homes. Mr. FAHEY. That is our conviction; yes, Senator. Of course we feel that there is a very large housing problem which the Federal Government needs to give earnest attention to. It is the question of providing better homes for the great mass of our people in the brackets below $5,000 in cost. As Mr. McAvoy well said, that is a very real problem which calls for very serious thought. It is an entirely different phase of the situation than that presented by the slum-clearance problem. Senator WAGNER. Have you given much thought to the slum clearance problem? Mr. FAHEY. I would not pretend to pose as an expert on the subject, but I have been interested in it for a good many years. I have seen some work done in the foreign countries and followed it with considerable interest, and I have no reservation on the statement we are so far behind the advanced countries of the Old World that it is simply a disgrace to our institutions. I think the slums in the American cities, and the character of housing in many of the sections of our country is one of the big blots on our country and I do not think we should any longer postpone attempts to solve this problem. I might also say at the same time, it has of course an important bearing on the question of unemployment in this country at the present time. The CHAIRMAN. That was presented quite fully to the committee by Mr. Green yesterday. He stated that the largest element of unemployed is among those in the building trades. Mr. FAHEY. Our figures indicate that to maintain building-trades' workers who are on relief, plus those who are out of employment as the result of the practical suspension of construction is costing the W. P. A. and the relief organizations something more than $400,000,000 a year. The CHAIRMAN. Just that group alone? Mr. FAHEY. Yes; that group alone. About 590,000 workers employed in building homes have been out of work since 1930. Of these about 332,000 are on relief. Those are workers previously employed only in residential building. There are at present being taken care of on relief about 240,000 other workers normally employed in the supply trades dependent on house building. The CHAIRMAN. We are pleased to have your views, Mr. Fahey. The committee will now adjourn until 10 o'clock tomorrow morning. (Thereupon, at 12 noon, the hearing was recessed until 10 a. m. Thursday, Apr. 23, 1936.) UNITED STATES HOUSING ACT OF 1936 THURSDAY, APRIL 23, 1936 UNITED STATES SENATE, Washington, D. C. The committee met, pursuant to adjournment, at 10 a. m., in room 318, Senate Office Building, Senator David I. Walsh (chairman) presiding. Present: Senator Murray. Also present: Senator Wagner. The CHAIRMAN. The committee will come to order. The first witness will come forward, Miss Alfred. STATEMENT OF MISS HELEN ALFRED, SECRETARY, NATIONAL PUBLIC HOUSING CONFERENCE, NEW YORK, N. Y. The CHAIRMAN. Your full name is Miss Helen Alfred and you are secretary of the National Public Housing Conference? Miss ALFRED. Yes. The CHAIRMAN. You reside where? Miss ALFRED. New York City. The CHAIRMAN. You testified a year ago at the hearings on a bill dealing with the same subject of slum clearance? Miss ALFRED. I did. The CHAIRMAN. Do you want to amplify that statement of a year ago? Miss ALFRED. I should like to, very much, Mr. Chairman. The CHAIRMAN. Very well, we will take your statement now. You may proceed. Miss ALFRED. It is a privilege to be given the opportunity to testify here today to the importance of Senator Wagner's public housing bill. The slum-clearance and low-rent rehousing plan outlined in this measure is a social imperative. Previous to installation of the emergency rehousing program of the housing division of the Public Works Administration we were, as a Nation, strangely archaic in our attitudes toward the housing problem, as compared to our neighbors across the sea. Toward no other form of economic maladjustment have we demonstrated less progressiveness and courage. With skill and boldness the American people have assumed responsibility for an attack on problems of health, education, recreation, employment. The housing problem, the shame of our urban and rural areas alike, has been approached, through long years, with vacillation or with complete indifference. Our cities. large and small, operate public hospitals, tuberculosis sanatoria, and |