First, because I do not want to duplicate the testimony of other witnesses; second, because I desire to base my argument almost entirely upon the grounds of morality. How does it come about that the low-rent housing problem has a fundamental moral aspect? The answer can be stated in a single sentence. Millions of American families are living in habitations which are notoriously insufficient for health, safety, decency, and elementary comfort. This condition is a violation of natural rights. The right to decent housing is as valid as the right to life or to liberty or to bodily integrity. Against whom is this right to be urged? Primarily against the employers who do not pay these exploited persons sufficient wages to enable them to occupy decent dwellings. God made the earth for all his children; consequently those who possess the means of employment and production are morally obliged to use these resources in such a way that their employees shall have at least the means of living in conformity with their dignity as human beings. If all the wage earners of the land had steady employment at decent wages, America would have no serious housing problem. Whatever problem then existed could be taken care of by the Federal Housing Administration. Whenever employers cannot or will not pay wages sufficient to provide the workers with decent housing it is the duty of the State to compel employers to pay adequate wages. An important first step toward this end was taken by the Federal Government under the National Recovery Administration. Unfortunately, that beneficent measure was destroyed by the decision of the Supreme Court in the Schechter case. As a consequence, the method of providing the workers with decent housing through the payment of decent wages will apparently have to wait upon an amendment to the Federal Constitution. That will take considerable time. In the meantime, the housing problem is immediate, urgent, and acute. Therefore, the right of millions to adequate housing has become a right against the State to provide such housing. Almost 45 years ago, Pope Leo XIII in his famous encyclical on The Condition of Labor, laid down a comprehensive ethical principle concerning the functions of the State which is exactly pertinent to the present situation. "Whenever," he said, "the general welfare or any particular class suffers or is threatened with injury which can in no other way be met or averted, it is the duty of the public authority to intervene." Our bad housing situation injures both the common welfare and the particular class of low-paid wage earners. It cannot be removed in any other way than by Government action, such as is proposed in the Wagner bill. It cannot be remedied by private enterprise, for private capital cannot or will not provide decent habitations which will bring in a rent of only five to seven dollars per room per month. That rental will not pay the necessary interest on the cost and upkeep of the dwelling. This fact is so evident, so well established by experience, so generally recognized, that I find it difficult to understand how any competent agency of Government can oppose or be indifferent to this bill. The opposition of private concerns is likewise difficult to understand unless we assume that they are moved by sheer avarice. I am not thinking now of builders who put up houses by contract for other persons-their interests are protected in the present bill. I have in mind corporations which erect houses for their own account. These do not want to enter the field of low-cost housing wholly at their own expense. Would they do so if they received a subsidy from the Public Treasury? Undoubtedly, many of them would, but such an arrangement is, of course, impracticable. A few weeks ago, a committee of the United States Chamber of Commerce published a statement in opposition to publicly financed housing. The statement admitted that private capital would not undertake a large program of low-cost housing without some kind of outside assistance. The assistance recommended by the committee was a subsidy from charity to the occupants of the houses. In other words, it unblushingly suggested that charitable and relief agencies should contribute a part of the rent that would be necessary to induce private capital to build the houses; just as charitable agencies, whether public or private, are now giving money to dependent families to provide food and clothing, so they should contribute money to enable such families to pay rent on the houses erected by private capital. To say nothing about the uncertainty which this arrangement would inject into any plan of low-cost housing, the wholesale pauperization which it would inflict upon millions of our fellow citizens should be unthinkable by any humane person. So we come back to a public subsidy as the only practical and decent method of providing low-rent housing. In our country at the present time, the only public authority competent to provide this subsidy and organize the work is the Government of the United States. Only the Federal Government has the means and the facilities necessary to direct and finance a low-cost housing program. Neither the States nor the municipalities can perform the task unaided. The Federal loans and the 45-percent grant are absolutely necessary if we are to make even a beginning of this necessary and laudable enterprise. Consequently, there falls upon the Congress of the United States a strict moral obligation to enact the Wagner bill. If Congress refuses to discharge this obligation, it will violate the rights of millions of our citizens. This obligation of Congress and these rights of the needy citizens are clearly included within the scope of distributive justice. If the resources of our country were insufficient for this enterprise the obligation would, of course, be suspended; but our resources of materials, of workers, and of industrial technique are more than ample. Had our productive plant been operated at full capacity in 1929, all our workers might have obtained wages equivalent to a family income of $2,500 per year. This was the estimate made by the Brookings Institution in its recent volumes on income and economic progress. Senator LA FOLLETTE. That means a more equitable distribution? Dr. RYAN. Oh, yes; but the capacity is there. If we had our distribution and productive facilities properly organized that is true, but that is a big question in itself. In that case, we should have had no housing problem. Untit such time as our economic intelligence becomes equal to the task 63408-36- -7 of organizing our productive and distributive instrumentalities so as to enable all families to pay for decent housing, the Federal Government should provide it directly by means of the Wagner bill. This bill involves a modest effort to show that our economic intelligence is not totally bankrupt, that we have sufficient ingenuity and skill to take a first step toward ending the deplorable and disgraceful conditions in which millions of our people are now compelled to live. The CHAIRMAN. Thank you, Dr. Ryan. There will be included in the record at this point a letter to the chairman of the committee from Mr. Peter Turchon, as follows: Senator DAVID I. WALSH, Clinton, Mass. APRIL 8, 1936. SIR: A large portion of our population is sheltered in substandard houses or slums. Insanitary and unsafe, the hovels do not encourage good citizenship. Forty-two percent of American families earn less than $1,500 a year. These people the great backbone of this country-live in substandard homes. In many States this shelter is so poor that European peasants would revolt. Present conditions make it impossible to build new homes for the largest part of this vast group. Let us examine a few of the more obvious solutions to this: America's great housing problem : A. Increase employment and raise wages so that much of this one-third of America's population may enjoy decent shelter. B. Reduce rents by reducing interest and taxes. C. Let the Government subsidize homes for everybody everywhere. Scores of objections might well be raised against each of the above solutions. May I suggest another plan which is worthy of consideration? HOME SECURITY PLAN Single-family dwellings are now subject to excessive promotional costs. Moreover, speculative hazards connected with their construction and sale further boost prices. Under the present system, a house costing $4,000 will mean a $35 to $40 a month carrying charge. This is, obviously too high for that vast group whose earnings approximate $20 a week. If the monthly carrying charge could be brought down to $20 or less, several important things would happen : 1. Better housing and better citizenship. 2. Construction of large number of homes. This would employ vast quantities of materials and put to work millions of men. 3. Increased taxable property. This will reduce the rate. The plan that we suggest for your consideration may be divided into three parts: A. Construction control. B. Cost amortization. C. Currency control. A. CONSTRUCTION CONTROL 1. These small houses shall be architect designed, substantially built for permanence and for economy of operation. The need must be apparent in each community. Further qualifications as to location, lot area, construction, homeowner applicants, and operative-builder construction shall be clearly outlined and sensibly adhered to. 2. The applicant must pay at least 20 percent down payment or own lot free and clear, be steadily employed, and of good reputation. 3. Eighty percent of the sound value is to be secured by a home security currency mortgage. This mortgage is not, in any event, to exceed $3,000 in the South or $4,000 in the North. Obviously, this plan is not intended to compete with houses now being built to house the better-income group. Approved banks will act as agents in each locality. They will pass on the need for the houses, the factors of safety, merchantability, the construction of the house, and on the borrower. It is suggested further that some existing Government agency, perhaps the Federal Housing Administration, act as clearing house. This will serve as a further check on the security of each mortgage. B. COST AMORTIZATION 1. These mortgages will bear no interest. They will carry monthly payments of $4 per thousand to amortize the loan in 25 years or less. This liberal arrangement is made possible since the Government, by the plan we are proposing, will have no bond interest to pay. The total local real-estate taxes (regardless of existing rate) are not to exceed $25 per thousand of actual cost. For example, let us take the maximum mortgage on the most expensive house possible under this plan-$4,000. Taxes Fire insurance_ Service charge 1. Total__ Monthly payments to amortize mortgage, $16; annually. Total___ $100 10 10 120 192 312 1 To be paid to the service organization annually for all of the work incidental to construction mortgage and for acting as an agent in transmitting to Washington the monthly payments. This makes a total monthly payment of $26. This home-security plan will encourage large numbers of small houses for workers at a cost of about $2,400. Of course these homes will not have anything. They will be small, compact, efficient-and much of the work may be done by the home owner. Let us see how a $2,000 mortgage will work out: Monthly cost, $13. or less. 60 96 156 This $13 monthly charge pays off mortgage in 25 years Operative builders could afford to construct groups of houses to cost $3,500 each. Assuming $700 down payment, this leaves $2,800 to be financed by mortgage, and this mortgage will be paid off as follows: Monthly cost, $19.66. This total cost of $19.66 a month pays off mortgage in 25 years or less. It Actually, the mortgage may be paid off in 20 years and 10 months. is suggested, however, that the owner may, at any time, after at least 10 years of payment having been made, and, provided there has been no default, be entitled to a "wait period"-as much as 4 years and 2 months-during which no payments to reduce the mortgage need be made. 2. Construction feature-money may be advanced in 10 equal payments during the process of construction-provided, of course, that the initial 20 percent has been paid. C. CURRENCY CONTROL 1. Home-security currency will be issued to act and work like our present money. It will be in denominations of $1 to $100. It will be legal tender and backed by Government guaranty. This money will be secured by approved first mortgages collateraled in Washington-the finest security in the world. The Government has no bond interest to pay. This money will not be inflation, since every dollar of it will be backed by 100 cents of security. The total cost of issuing money and of servicing these mortgages is paid by the borrower out of the service charge of $2.50 annually per thousand. 2. As the monthly payments are received by the Treasury Department, it will retire this currency. When all of these mortgages are paid off, all of the currency will be retired. NATIONAL BANK BUILDING, DEAR SIR: Your comments will be appreciated. Newton, Mass. PETER TUCHON. The CHAIRMAN. There will be included in the record a telegram from Hon. F. H. LaGuardia, president of the United States Conference of Mayors, and mayor of New York City, to Hon. Robert Wagner, author of this measure, as follows: Hon. ROBERT WAGNER, United States Senate, Washington, D. C.: APRIL 21, 1936. Will you kindly bring to the attention of the committee now considering your housing bill the resolution adopted by our annual meeting held in Washington November 1935, at which 110 cities were represented through their mayors, endorsing the principles of your bill. Survey indicates that the mayors are still of the same opinion and are strong for your present bill. The resolution is as follows: "Whereas there has been a great deal of public attention to the question of a public-housing program, though relatively little has been accomplished on such a program; and Whereas an extensive housing plan on a Nation-wide scale would give strength and stability to the economic structure of the Nation; and Whereas numerous surveys and studies of housing conditions throughout the country indicate the growing shortage and congestion in housing facilities; and Whereas the disgraceful conditions in city slums and country hovels have a directly detrimental effect on the social well-being of these areas and the surrounding communities; and Whereas it is obvious that the Federal Government must assume the financing of such self-liquidating projects through loans or investments and low interest rates: Now, therefore, be it Resolved, That the United States Conference of Mayors does hereby urge upon Congress and the President the vital importance of this problem and the need for a well-coordinated and extensive housing program for the so-called low-income group where desired; and the need exists and further that the United States Conference of Mayors lend its assistance to the preparation and realization of such a program which will be substantially financed by the Federal Government, though in the interest of economy and efficiency the responsibility for the administration of the specific projects of the program be in the hands of the local authorities where so desired." F. H. LAGUARDIA, President, United States Conference of Mayors. The CHAIRMAN. The committee will stand adjourned until tomorrow morning at 10 o'clock. (Whereupon, at 12 noon, the committee adjourned until 10 a. m. Wednesday, Apr. 22, 1936.) |