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ica. But I am ready to cheer for the first definite housing subsidy, small as it may be.

It is the first direct challenge to certain selfish real estate, banking, and insurance interests which have succeeded in retarding rehousing so shamefully—the 6-percent boys. They don't care how low the price of money goes as indicated by the interest rate on Government bonds. They still insist on the same old rate when the little fellow wants to buy or build a home. It used to be that money was 4 percent on Governments. The insurance company and banker got 2 percent extra on mortgages. Now the price of money has gone down 40 percent and there is so much idle money in the land, the bankers are worried what to do with it. But the 6-percent boys don't want to make any reduction. That is the reason I welcome a Government subsidy for housing. It is a direct assault on this entrenched, stupid selfishness. Selfishness is always stupid, but the brand that has been exhibited by certain real etate, banking, and insurance interests of this country is extra stupid, and the country has suffered from this more than from any other one force.

I find something odd in the spectacle of solemn and serious debate as to the advisability of a housing bill which, in a country of our size and wealth, calls for public subsidies to housing of $50,000,000 the first year, $75,000,000 the second, and a top of $100,000,000.

That first-year subsidy is equal to the cost of about 2 miles of subway. It is one-eighth the amount of a bill Congress is considering for the construction of new highways.

I think it would clarify our ideas on housing if we thought a little bit about subways and highways.

Ours is a 10-hour civilization. We are so civilized we are fit to be tied between the hours of 8 in the morning and 6 in the evening, or between the hours the average American workman leaves his so-called home for work and returns to it.

He exits from his broken house, his tenement flat, at 8 in the morning, goes down into a subway which cost three or four hundred million dollars to build.

He leaves that subway to enter a factory or office building which may have cost up to a dozen millions.

If he works in a modern establishment, he is given the best of lighting, of ventilation, of scientifically designed facilities to increase his comfort-because that increases his efficiency.

The capital goods of which this man has made use during 10 hours may easily represent an outlay of $500,000,000—everything functioning at the 1936 level of speed and efficiency.

Once he steps in his own front door he steps back 50 years in all too many cases. Until 8 the next morning he is no longer living in 1936 but in 1886. In modern America charity may begin at home, but civilization begins and ends out on the street. T'ime has stopped decades ago in the 50 percent of American homes which are unfit for human use, according to conservative estimates in the old-law tenements which house almost 2,000,000 human beings in New York City alone, in the so-called bandbox slums of Philadelphia, in the toiletless, bathtubless, lightless, airless, and leaky homes that disgrace our cities.

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How do we dare to boast about the accomplishments of our machine age when we use its blessings for 10 hours a day only? Our civilization stops at 6 p. m. sharp every day. With a business abtuseness unparalleled in the history of American

a history, builders and bankers have carefully made certain that twothirds of all Americans can never be their customers.

They have made housing so expensive by loading it up with so many unjustifiable charges that a family must be in the upper third of incomes to buy their product.

Once a man decides to buy or build a house, these two sets of interests get out their little knives and make ready for him.

They demand their 6 percent for mortgage money. They demand a fee for securing a mortgage. They demand inflated and unjustified land prices. But the most important of all is interest charges.

For some reason they have decided that it must be 6 percent. I have searched everywhere in the Constitution of the United States, the Declaration of Independence, the Magna Carta, the Revised United States Statutes, and the Justinian Code, and I can find no rule which says that 6 percent must be a minimum interest charge on housing

It is this combination of speculative builder and “6 percent or nothing” banker that has given us a housing problem. It is this bunch of inept businessmen which has the great American home by the throat.

They have worshipped their 6-percent interest so long that they have made the rest of the country worship it, too. It has become the cabalistic number before which all America lies down and salaams. Better for rain to leak down the necks of half our population than for the magic digit to be disturbed.

That is why I welcome the Wagner housing bill. I think it will break the ice. I think it will start the ball rolling. I think it will shake us out of the inertia into which we have fallen on the housing problem. For that reason it is important-even though, as I have said, it is inadequate, wholly and entirely inadequate.

How can we sit here and solemnly discuss whether we really can use the giant sum of $50,000,000 to give America a place to sleep? How can we hesitate for a moment when we consider that England, with a third of our population, is preparing to get rid of all its slums, has already spent $700,000,000 in subsidies for housing since the war, and is planning to spend $575,000,000 in the next 5 years ?

I will tell you why we hesitate even over this tiny beginning. It is because the realtors, who have shown they can't give us housing, are still setting our direction.

It is because such men as Peter Grimm, leader of an antisocial lobby in New York City, the Citizen's Budget Commission, have been the administration's official advisers on housing.

Why should not the Federal Government directly embark on largescale building of new homes? Of course, private initiative is better than Government action—but what have we accomplished? How else can there be a national housing plan that will really rebuild America? How else can we make certain that we will really build housing and not putter our resources away in a hundred local experiments ?

The realty interests will tell you that they fear competition at the hands of the Government. They also fear dislocation of the existing mortgage structure as new dwellings start going up with public subsidy.

There is a core of truth at the bottom of these fears. The sacred 6-percent mortgage rate may not be able to withstand, without some change, the upthrust of public housing. But public housing also has something to give to private real estate. Private real estate still hasn't been farsighted enough to see what this something is.

In England private real estate knows what it gets from public housing. It gets an increased purchasing power, which has given Great Britain an amazing housing boom.

Of the 300,000 homes being built in England annually, only 13 percent now are subsidized. The Government used to subsidize several times that percentage. But once the housing bill started rolling, private real estate received something which the industry in this country doesn't have today. It received customers, as capital goods industries revived and money started moving:

The increase in purchasing power that would follow a large-scale subsidized housing program would so extend real estate's private market as to outweigh by far any danger of dislocation or competition. And since public housing will deal with the poorest income group, competition is outlawed—for that is a group with which private real estate in this country is not on speaking terms.

Senator WAGNER. Mr. Stern, you might be interested in knowing that I listened the other day with a great deal of pleasure to Mr. Morrison, a member of the Parliament of England, and also in charge of housing in London, and he told the group present, that not only was the housing program the most important factor in their recovery, but that in the construction industry which before they began this program had a large amount of unemployment, at this time had no unemployment at all, and the wages paid were the prevailing rates of wages, so that from that, private industry has been excited, and private industry is doing more in construction than the subsidized construction, which bears out what you say.

Mr. STERN. I am glad to hear that evidence has been given this committee, because the conservative businessmen of England I met there last summer all said this housing activity of the Government has been one of the important causes of the recovery of England's business. Thank you very much.

The CHAIRMAN. Thank you, Mr. Stern. Mr. Stokes.



The CHAIRMAN. Will you state your full name for the record ?
Mr. STOKES. Anson Phelps Stokes.
The CHAIRMAN. Where is your residence ?
Mr. STOKES. Washington, D. C.

The CHAIRMAN. Are you appearing in your personal or official capacity ?

Mr. STOKES. I am appearing as chairman of the Washington Committee on Housing. That committee was established 3 years ago for

the purpose of improving housing conditions in Washington. It is an entirely nonpolitical social welfare organization which is particularly interested in low-rent housing.

I have been vice chairman of the committee for 3 years, since it has been founded, and just recently have taken the place of Mr. Clarence Phelps Dodge as chairman, who resigned because of his duties as chairman of the community chest. This brief statement I wil make to your committee is authorized by the committee.

The committee is in agreement with the large body of public opinion which believes that private industry has been and is unable to supply an adequate amount of decent housing for families of low income. It is therefore, in general accord with the principle of Senate bill 4424 (74th Cong., 2d sess.), which seeks to utilize Government credit and funds for the purpose of helping to eliminate slum conditions in our cities and to provide a larger supply of decent low-rent houses.

The committee commends specifically the following features of the bill:

First, that it meets a broad social need, based on the conviction that slums and unsafe and insanitary housing constitute a dangerous menace to present and future citizens; second, that it provides for efficient and nonpolitical administration by creating a strong, independent, and permanent agency under competent direction and with the rank and file of employees chosen under civil-service regulations; third, that it provides for a large measure of decentralization, leaving initiative, construction, and administration, wherever possible, to public-housing agencies in States, cities, and other governmental units. We assume that this means that the District of Columbia Alley Dwelling Authority would not be affected by section 4 (d), which authorizes the consolidation of Federal agencies engaged in slum clearance or low-rent housing, inasmuch as this authority is essentially a local agency. Fourth, that it limits Federal grants and loans for housing to the very low-income groups, where it has been shown both at home and abroad that private industry cannot enter; fifth, that it restricts outright Federal grants to less than one-half of the total cost of any project; sixth, that while having as its major objective the providing of safe, sanitary, and decent homes for lowincome groups, it will incidentally do much to relieve unemployment and improve business conditions by stimulating the heavy industries.

The committee would call attention to the fact that section 6 (a) would appear to exempt the Housing Authority from the usual control and audit of expenditures.

The committee would recommend the addition of three clauses to the bill: First, in section 3 (b) a clause preventing more than three members of the United States Housing Authority being members of the same political party, and insuring that at least two members of the Authority be chosen because of their proven interest in the social welfare of low-income groups; second, in section 16 the addition of a clause protecting any racial group from discrimination in the employment of labor on projects aided by the Housing Authority; third, in section 9 (b) the addition of a clause to the effect that the Housing Authority should, when practicable, do all in its power to secure direct financial grants from municipalities or other government units concerned in a housing project, thus making it easier to

keep the Federal appropriations lower than the 45 percent authorized.

The committee cannot, in the brief time available for study and presentation, express a final opinion on all the provisions of so complex a measure; but with the changes and additions noted, it heartily endorses in principle the main features of the bill, which, if it becomes a law, should ultimately result in greatly improving the living conditions of millions of underprivileged Americans.

The CHAIRMAN. Who are the other members of your committee?

Mr. STOKES. The members of the committee are as follows: Mrs. Franklin Delano Roosevelt, honorary chairman; Rev. Anson Phelps Stokes, chairman; J. Bernard Wyckoff, treasurer; Mrs. Florence Stewart, executive secretary; Mrs. Anne Archbold; Mrs. Robert Woods Bliss; Rev. Robert W. Brooks; Hon. James Q. Cobb; Frederic A. Delano; Clarence Phelps Dodge; Mrs. C. Carroll Glover, Jr.; Dr. Warren F. Draper; Lt. Col. U. S. Grant 3d; Maj. Campbell C. Johnson; Leifur Magnusson; Stanton C. Pealle; Lawrence F. Schmeckebier; Joseph P. Tumulty; Joseph D. Daufman.

The CHAIRMAN. Thank you, Doctor. The next witness is Mr. Holden.



The CHAIRMAN. Will you state your full name for the record ?
Mr. HOLDEN. Thomas S. Holden.
The CHAIRMAN. What is your residence ?
Mr. HOLDEN. New York City.
The CHAIRMAN. You appear here in what capacity?

Mr. HOLDEN. I am vice president of the F. W. Dodge Corporation and president of the New York Building Congress, a member of the committee for economic recovery, and formerly chairman of the mayors advisory committee on real property inventory of New York City.

The CHAIRMAN. You may proceed. We will be glad to have your views.

Mr. HOLDEN. I have studied the subject of housing rather intensively for the last 5 years. I am not authorized to speak for any of the organizations I am connected with, but expressing my personal views gathered through study and discussion with many people.

I think there are quite a number of businessmen, of whom I am one, who are convinced that a Nation-wide public-housing program is needed, and that we have got to take into consideration the plight of low-income families and the limited opportunities they have for decent living. We have got to also take into account the enormous accumulating stock of depreciated buildings that we have throughout the country. I think that this is a highly complicated program, and has become very much confused, and we have to simplify and analyze the thing, and try to approach it on the basis of such an analysis.

Two interrelated problems are encountered in dealing with a public-housing program, and it is vitally important to distinguish between them. They are: First, the human and social problem of

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