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MONDAY, APRIL 20, 1936



Washington, D. C.

The committee met at 10 a. m. in room 318, Senate Office Building, Senator David I. Walsh presiding.

Present: Senators Walsh (chairman), Thomas, Murray, La Follette, and Davis.

Also present: Senator Wagner.

The CHAIRMAN. The committee will come to order. The committee has met for the purpose of hearing evidence on S. 4424, a bill introduced by Senator Wagner on April 3 and referred to the Committee on Education and Labor.

The bill may be printed in the record.

(The bill under consideration by the committee is as follows:)

[S. 4424, 74th Cong., 2d sess.]

A BILL To provide financial assistance to the States and political subdivisions thereof for the elimination of unsafe and insanitary housing conditions, for the development of decent, safe, and sanitary dwellings for families of low income, and for the reduction of unemployment and the stimulation of business activity, to create a United States Housing Authority, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,


SECTION 1. There exist in urban and rural communities throughout the United States, slums, blighted areas, or unsafe, insanitary, or overcrowded dwellings, or a combination of these conditions, accompanied and aggravated by an acute shortage of decent, safe, and sanitary dwellings within the financial reach of families of low income.

These conditions are inimical to the general welfare of the Nation by (a) encouraging the spread of disease and lowering the level of health, morale, and vitality of large portions of the American people; (b) increasing the hazards of fires, accidents, and natural calamities; (c) subjecting the moral standards of the young to bad influences; (d) increasing the violation of the criminal laws of the United States and of the several States; (e) impairing industrial and agricultural productive efficiency; (f) lowering the standards of living of large portions of the American people; (g) necessitating a vast and extraordinary expenditure of public funds, Federal, State, and local, for crime prevention, punishment and correction, fire prevention, public-health service, and relief.

The failure to remedy the acute dwelling shortage has also produced stagnation of business activity in the construction, durable goods, and allied industries, thus impeding business activity throughout the Nation and resulting in widespread and prolonged unemployment with its injurious effects upon the general welfare of the Nation.

Private industry alone has been and now is unable to overcome the obstacles in the way of relieving the shortage of decent, safe, and sanitary dwellings 1

for families of low income, and the several States and their political subdi-visions have been and now are unable adequately to aid in remedying this condition without financial assistance.

It is hereby declared to be the policy of the United States to promote thegeneral welfare of the Nation by employing its funds and credit, as provided in this Act, to assist the several States and their political subdivisions to alleviate unemployment and to remedy the unsafe and insanitary housing conditions and the acute shortage of decent, safe, and sanitary dwellings for families of low income that are injurious to the health, safety, and morals of the citizens of the Nation.

SEC. 2. When used in this Act


(1) The term "low-rent housing" means decent, safe, and sanitary dwellings within the financial reach of, and available solely for, families of low income, and developed and administered to promote serviceability, efficiency, and economy; and embraces all necessary or desirable apputenances thereto, including administrative, educational, recreational, and other buildings and facilities.

(2) The term "families of low income" means families who cannot afford to pay enough to induce private enterprise in their locality to build an adequate supply of decent, safe, and sanitary dwellings for their use.

(3) The term "slum" means any area where dwellings predominate which, by reason of dilapidation, overcrowding, faulty arrangement or design, lack of ventilation, light or sanitation facilities, or any combination of these factors, are detrimental to safety, health, or morals.

(4) The term "slum clearance" means the demolition and removal of buildings from any slum area, and may embrace the adaptation of such area to public purposes, including parks or other recreational or community facilities. (5) The term "development" means all undertakings necessary for planning, financing, land acquisition, demolition, and construction and equipment activity to the point of completion. Construction activity in connection with a low-renthousing project may be confined to the reconstruction, remodeling, or repair of existing buildings. The development of a low-rent-housing project may include slum clearance. The development of a slum-clearance project may be confined to demolition and removal.

(6) The term "administration" means all undertakings necessary for management, operation, and maintenance.

(7) The term "demonstration project" means any project owned or administered by the Authority, whether or not developed pursuant to section 11.

(8) The term "public housing agency" means any State, county, city, or other governmental entity or public body (excluding the Authority), which is authorized to engage in the development or administration of low-rent-housing or slum clearance.

(9) The term "public housing society" means any association, cooperative, or corporate body organized solely to promote and administer low-rent housing, whose members are persons of low income in need of such housing, whose whose officers and directors are the freely chosen representatives of such members, and which is operated, without possibility of direct or indirect financial profit, under the supervision and control of the Authority.

(10) The term "limited-profit housing agency" means any association, cooperative, limited dividend corporation, or other corporate body organized to develop or administer low-rent-housing projects, whose dividend rates, if any, capital structure, interest payments, and rental charges are regulated or limited by law or subject to the supervision and control of the Authority, and which submits its records to the inspection of the Authority to the extent necessary to carry out the provisions of this Act.

(11) The term "housing agency" means any public housing agency, public housing society, or limited profit housing agency.

(12) The term "going Federal rate" means the average interest rate paid by the United States upon its bonded indebtedness.

(13) The term "State" includes the States of the Union and the districts, Territories, dependencies, and possessions of the United States.

(14) The term "Authority" means the United States Housing Authority created by section 3 of this Act.


SEC. 3. (a) There is hereby created a body corporate of perpetual duration to be known as the United States Housing Authority, which shall be an agency and instrumentality of the United States.

(b) The administration and all the powers of the Authority shall be vested in a board of directors (hereinafter referred to as the board) composed of five members. The Secretary of the Interior shall be a member ex officio. The other four members shall be appointed by the President, by and with the advice and consent of the Senate, and may be removed by the President, upon notice and hearing, for neglect of duty or malfeasance in office, but for no other cause. One of the four original appointive members shall serve for a term of one year, one for a term of two years, one for a term of three years, and one for a term of four years, but their successors shall be appointed for terms of five years each, except that any individual chosen to fill a vacancy shall be appointed only for the unexpired term of the member whom he shall succeed. The President shall designate one member to serve as chairman of the board.

(c) A vacancy in the board shall not impair the right of the remaining members to exercise all the powers of the board, and three members of the board shall at all times constitute a quorum.

SEC. 4. (a) The Secretary of the Interior shall not be entitled to any additional compensation for his service on the board. Each of the other four members shall receive a salary of $10,000 a year, shall be eligible for reappointment, and shall not engage in any other business, vocation, or employment. No officer or employee of the Authority shall participate in any manner in the deliberation upon or the determination of any question affecting his personal interests or the interests of any corporation, partnership, or association in which he is directly or indirectly interested.

(b) The Authority shall, without regard to the civil-service laws and the Classification Act of 1923, as amended, appoint and fix the compensation of such officers attorneys, and experts, contract for the personal services of such architects, engineers, appraisers, negotiators, and real-estate brokers, and employ such skilled and unskilled labor, and with regard to such laws appoint such other employees, as it may from time to time find necessary for the proper performance of its duties.

(c) The Authority may accept and utilize such voluntary and uncompensated services (not excluding reasonable allowances for necessary traveling and other expenses), and with the consent of the agency concerned may utilize such officers, employees, equipment, and information of any agency of the Federal, State, or local governments as it finds helpful in the performance of its duties. (d) At the expiration of sixty days from the enactment of this Act the Housing Division of the Federal Emergency Administration of Public Works shall cease to exist, and all its obligations shall be assumed by the Authority, and all its assets, equipment, records, and employees shall be transferred to the Authority, for the purposes of this Act. No employee shall acquire by such transfer a permanent or civil-service status, but within ninety days after such transfer the Authority may certify to the Civil Service Commission the names of such transferred employees as it desires to retain and as are required to be under the civil-service laws by the provisions of section 4 (b) of this Act. Upon such certification, said Commission shall provide for the inclusion of such employees within the Civil Service. All housing and slum-clearance projects undertaken by the Federal Emergency Administration of Public Works, all contracts and other property held by it in connection with such projects, and any unexpended balance of funds allocated to it for housing and slum-clearance projects shall likewise be transferred to the Authority at the same time, and the Authority may continue such projects. Any action taken by said Federal Emergency Administration of Public Works in connection with any such project is hereby adopted and ratified. The President may at any time in his discretion transfer to the Authority any other bureau or division of any department or agency of the Federal Government that is engaged in low-renthousing or slum-clearance activities, and the Authority may continue such activities subject to the provisions of this Act.

SEC. 5. (a) The principal office of the Authority shall be in the District of Columbia, but it may establish branch offices or agencies in any State, and it may meet and exercise any of its powers at any place within the United States. The Authority may, by one or more of its officers or employees or by

such agents or agencies as it may designate, conduct hearings or negotiations at any place.

(b) The Authority may foreclose on any property, or commence any action, to protect or enforce any right conferred upon it by any law, contract, or other agreement. The Authority may bid for and purchase at any foreclosure by any party, or at any other sale, any low-rent-housing project which it previously owned or in connection with which it has made a loan or grant pursuant to section 9 or a loan pursuant to section 10.

(c) The Authority may procure insurance against any loss in connection with its property and other assets (including mortgages), in such amounts, and from such insurers, as it deems desirable.

(d) The Authority shall sue and be sued in its own name, and all suits shall be brought in the Federal courts except where the Authority consents specifically to a different forum. Attorneys appointed by the Authority may, at the direction of the Authority, appear for and represent the Authority in any case in court.

(e) The Authority shall have an official seal, which shall be judicially noticed.

(f) The Authority shall be granted the free use of the mails in the same manner as the executive departments of the Government.

(g) The Authority, including but not limited to its franchise, capital, reserves, surplus, loans, income, assets, and property of any kind, shall be exempt from all taxation now or hereafter imposed by the United States or by any State, county, municipality, or local taxing authority.

SEC. 6. (a) The Authority may make such expenditures for the acquisition and maintenance of adequate administrative agencies, offices, vehicles, furnishings, equipment, supplies, and books, for attendance at meetings, and for such other facilities and services as it may from time to time find necessary for the proper administration of this Act. The Authority shall determine and prescribe the manner in which its obligations and expenses shall be incurred, allowed, and paid, and the manner in which accounts shall be audited, without regard to the provisions of any other law governing the expenditure of public funds.

(b) The provisions of section 3709 of the Revised Statutes (U. S. C., title 41, sec. 5) shall apply to all contracts of the Authority for services and to all of its purchases of supplies except when the aggregate amount involved is less than $300.

(c) The use of funds made available for the purposes of this Act shall be subject to the provisions of section 2 of title 3 of the Treasury and Post Office Appropriation Act for the fiscal year 1934 (47 Stat. 1489), and to make such provisions effective every contract or agreement of any kind pursuant to this Act shall contain a provision identical to the one prescribed in section 3 of title 3 of such Act.

SEC. 7. (a) The Authority may engage in research, studies, surveys, and experimentation and may publish and disseminate information pertinent to the various aspects of housing.

(b) In January of each year the Authority shall make an annual report to Congress of its operations, including loans, grants, and contributions made or contracted for, low-rent-housing and slum-clearance projects undertaken, and the assets and liabilities of the Authority.

SEC. 8. The Authority may from time to time make, amend, and rescind such rules and regulations as may be necessary to carry out the provisions of this Act.


SEC. 9. (a) The Authority may make grants and loans to any public-housing agency to assist the development, acquisition, or administration of any low-renthousing project by such agency.

(b) The value of the grant to a low-rent-housing project shall be that which is necessary, in the determination of the Authority, to assure the low-rent character of such project, but shall in no case exceed 45 per centum of its development or acquisition cost. Such grant may be paid, in whole or in part, in a lump sum. Any balance (of the total value of the grant) not so paid shall be paid in the form of fixed and uniform annual contributions, over a fixed period not exceeding sixty years, each such annual contribution to be payable out of any funds available to the Authority when such payment is due. Each

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