and to change its constitution, and Senator Walsh, I believe you remember back in 1915 they changed the constitution in the State of Massachusetts, and the change is noted in the statement I will later present to you, permitting the State to appropriate money for housing, and there is also contained in my later statement, the fact as to the money which was appropriated and the returns from those appropriations, and I might state that now, after this period of years since that appropriation was made, the State is now in money, so that participation in housing is not a failure by any stretch of the imagination.

I also wish to bring to your attention that it is our opinion in Massachusetts that the Government has participated in public works over the past 4 or 5 years with the idea of putting people to work, and they have to a great extent spent large sums of money on the construction of roads, and every time a road was suggested to be built, the old cry went out that this is going to put people to work. We are going to submit to you for your reference, without fear of contradiction from anybody you might bring in to check upon our statement, that a little less than 12 cents of every dollar in road building goes to labor; in other words, to be accurate we took a large road-construction job in Massachusetts, which included road construction, bridges, and underpass, and other types of construction, and we found less than 12 cents of each dollar spent on that road, or perhaps $700,000, went to labor.

The CHAIRMAN. That is quite a different percentage from that asserted on the floor of the Senate whenever we have an appropriation for highways.

Mr. CARROLL. I am glad to be able to make this contribution, Senator, because I think it is quite important for you to have that information. The road is broken down into probably 25 different sections, and we have every total for you, and those who may be concerned about it, to refer to.

On the other hand, we thought we would investigate just how much of the building dollar went to labor on a housing project, and this was done by the Massachusetts State Board of Housing on my suggestion.

We took the Philadelphia Hosiery Workers project that I believe was around $3,000,000 and went to great extent to determine how much of the dollar that went into the project went to the pockets of labor, and you will find in the tables I have a break-down of that project, which accompanies my statement, and it shows that 38 cents of every dollar on the hosiery workers' housing project, which was a very simple type of construction, with no luxuries, went to le The CHAIRMAN. Does that include labor on the material

the labor on the house itself?

Mr. CARROLL. This includes the labor on the site of and 38 cents out of a dollar went to labor, as again the road construction which I have before referred

The CHAIRMAN. For your information, it is cla that 80 cents of the dollar goes into labor on h but there is no use debating that question with Mr. CARROLL. It is one of the most misrep of in the city of Washington, and it woul you this story in these tables. It would

the United States to find over 30 cents going to labor from each dollar on highway construction, either directly or indirectly, even if you go back to the quarries, the mines, or wherever you want to go, whereas we can prove there is a great deal larger percentage of every building dollar that goes into the hands of labor.

As to the Massachusetts State Federation of Labor's position with regard to housing legislation as contained in Senate bill no. 4424 now pending before this Committee on Education and Labor, I have this to offer:

The Massachusetts State Federation of Labor appears before you in behalf of the workers of Massachusetts and also representing the largest home-owning group in the Commonwealth, advocating the bill now before you for consideration.

Massachusetts had the first housing law and was the first State to create legislation favorable to housing enterprises. On May 26, 1917, the first appropriation made in the United States for public funds to aid workers in acquiring their own homes was approved by Gov. Samuel W. McCall.

Appropriations to provide such housing were made possible by a constitutional amendment ratified by the voters in 1915 as follows:

The general court shall have power to authorize the Commonwealth to take land and to hold, improve, subdivide, build upon, and sell the same for the purpose of relieving congestion of population and providing homes for citizens: Provided, however, That this amendment shall not be deemed to authorize the sale of such land or buildings at less than the cost thereof.

For the past 19 years the houses built under this appropriation have provided decent, wholesale homes for a group of low-paid workers. The monthly payments ran from $16.50 to $21, and at this time the State has already received over $4,000 more than it invested in the project, proving that housing can be self-liquidating. Federal aid would permit the continuation of such a program in Massachusetts.

Studies in seven cities of Massachusetts have shown major substandard areas of over 600 acres, or approximately 1 square mile. All of these districts present a social menace to society and a heavy economic liability to the communities. Cost and income surveys have indicated a yearly loss of over $3,000,000 in the maintenance of these areas. No doubt if all the bad housing areas within the State, coupled with their annual losses, could be computed, the above figures would be multiplied many times.

Vacancies in residential buildings are about normal, but an undoubling of families would produce a shortage of living accommodations. In the city of Lawrence, where business conditions have greatly improved, there is actually an acute shortage. This has resulted in the superficial repair of unfit and insanitary housing to accommodate the demand, thus perpetuating neighborhoods and houses which have long outlived their usefulness and have ceased to be fit places of habitation. Conditions of this sort can only be remedied when the opportunity is provided by which the cities can replace bad housing with decent, wholesome living accommodations for that part of our population for whom private enterprise can never produce economic housing.

In 39 cities of Massachusetts, in the year 1928, there were 16,255 units of living accommodations built, while in 1935 this number had

63408-36—12

dropped to 1,052, or a reduction of 93.5 percent, thus causing widespread unemployment among the building-trades workers and the resultant distress to a large part of our population. Great sums of money have been appropriated and spent by the Federal Government for the building of highways, while very little has been appropriated for building construction. When you realize that less than 12 percent of the moneys spent on roads goes to direct labor on the job and that over 38 percent of the cost of building construction is given to direct labor on the building, it is evident that a large scale, long-range housing program would materially help to relieve unemployment.

During the past years the expansion of our cities was to a great extent out of the congested areas, and with the influx of immigration the properties so abandoned in these areas were taken up by the immigrant.

The

Municipalities have spent large sums of money in building schools, public buildings, churches, parks, and other utilities to service those particular sections of our cities. Now, with immigration extremely limited and a desire on the part of our people for better living accommodations, we can still hope for a reasonable expansion, and no doubt these people will come out of those substandard areas. problem confronting the cities is-who is going to occupy these abandoned properties in the absence of the immigrant. The facts are that the large investments by the cities on the utilities referred to will become valueless unless well-organized effort is made to rebuild those older sections of our cities so that we may preserve the usefulness of these utilities provided at great public expense.

While labor has been striving for public participation in housing for the low-paid workers, we have been confronted with a lot of illadvised opposition from so-called real-estate exchanges and banking institutions. We wish to bring to the attention of this committee the fact that the executives of our banking interests who are engaged in the lending of money on real estate used for homes and who now hold submerged mortgages in these blighted areas will be cbliged to write them off as bad losses. A serious study on their part would warrant their cooperating with us in this particular field, and by so doing it is quite possible that they could salvage at least a large portion of their investments.

We in labor do not expect an intelligent understanding of our approach to the problem of the elimination of slum areas from individual owners of properties in those sections of our cities. We appreciate the difficulties confronting these people, and we are quite confident that our activities will in no way embarrass them financially. We are looking forward to the intelligent cooperation of our banking institutions in this housing problem.

(The tables referred to are as follows:)

DETAILED ESTIMATE OF FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS

DETAILED ESTIMATE OF FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS-Continued

Total materials.

General contractor's fee.

Total cost of project.

115,000

40,000