costs, this sum would provide for only some 300,000 new dwellings for the country at the end of that period. This must be contrasted with the present and immediate need, which Senator Wagner himself has placed at 10,000,000 dwelling units.

In extenuation of this inadequacy, the Senator has argued that the construction achieved under his bill will stimulate billions of dollars of private housing construction. Our experience with "pump priming" in the past 3 years would at least cause us to be less positive than Senator Wagner about the inevitability of this stimulation. As a matter of fact, the housing constructed under this bill will not, as we shall soon show, necessarily achieve really low rents and therefore may very well inhibit private construction.

However, even if Senator Wagner's hope is realized, any dwellings produced by private builders as a result of this act will not be available to families of low income. Such families are defined in the bill as "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." Included in these families of low income are those with incomes of $1,500 per year because the most such families could pay in rent is $5 or $6 per room per month. According to figures presented at the hearings last year on S. 2392, the Housing Study Guild estimated that 83 percent of all nonfarm families have incomes below $1,500. This great mass of people who represent the real need for housing in this country would not be adequately housed by any private construction stimulated by this bill. And they would be most indifferently taken care of by any construction accomplished directly under this bill.

This is not to say, of course, that the F. A. E. C. T. is opposed to the stimulation of private construction. On the contrary, because it would provide employment for our membership in addition to its general value we would welcome such an eventuality. The point we are making here is that the appropriations in the bill are entirely inadequate to help those who, it is admitted, will not be accommodated by private construction.

(2) There is no assurance that even the inadequate fund provided for in the Wagner bill will be expended. The bill provides for an appropriation for housing, but in no manner makes its use mandatory. The glaring defect of such legislation is illustrated by the failure to use for housing purposes the fund appropriated therefore to the Housing Division of the Federal Emergency Administration of Public Works.

(3) The bill does not guarantee that what it terms "low-rent housing" will really be available to "families of low income." The possibility of further increase in construction costs in the next period and its effect on the rentals of housing produced under this bill has already been mentioned. But even if construction costs remain static in the next few years, the requirements in the bill for amortization, interest charge, and other costs make it unlikely that very much of the housing will be available to families with incomes below $1,500 per year. Furthermore, there is no guarantee that the maximum provision of a 45-percent grant shall be made "to assure the low-rent character of such project." Even if the maximum of 45 percent is granted in all cases, we must point out that resulting rentals would still not be low enough to meet the rent-paying ability of over half

of the Nation's families. There is only one way to guard against an increase in rent and to guarantee that the rentals charged for housing constructed under this bill will be within the means of families of low incomes and that is to provide for a specific maximum rental.

(4) The labor provision for "laborers and mechanics" do not cover technicians and other professional and white-collar employees. The experience of the F. A. E. C. T. with the wages paid technicians. under the P. W. A. and W. P. A. proves the necessity of a specific labor provision for these categories, in accordance with the civilservice laws and the Classification Act of 1923, amended.

(5) The bill does not provide for the recognition and the democratic operation of tenants' organizations. This is important as an additional safeguard guaranty that the provisions of the bill will be carried out in the interests of the tenants. We have only to point to the recent experience of the tenants of Knickerbocker Village, a housing project built with governmental encouragement under the terms of the New York State Housing Act. In this case, the tenants actually had to fight to win rights which should have been specifically granted them in the legislation in question.

CONCLUSION

In view of the foregoing inadequacies, the Federation of Architects, Engineers, Chemists and Technicians recommends that Senator Wagner's bill, S. 4424, be amended. As a basis for this we hereby offer an outline of the principles of adequate housing legislation.

(1) The creation of a United States Housing Authority in the manner already provided in S. 4424.

(2) A Federal housing fund to be created out of the Treasury of the United States of sufficient size to provide for the building of at least 1,000,000 dwelling units per year over a 10-year period.

(3) The Authority to be bound to disburse this fund within a specified period to appropriate local agencies upon their compliance with the standards and conditions established in this legislation. These standards are:

(a) A fixed maximum rental which shall insure that the housing shall be available to the low-income groups. This rental shall be not more than $5 per room per month, depending upon average earnings in the localities of the low-income groups for which this housing is intended.

(b) The payment of the union rate of wage or, in the absence thereof, of not less than the prevailing rate for all employees in any way engaged in the housing projects. Wherever possible, such employees shall be selected from civil-service lists and the civil-service scale shall be paid. The right of collective bargaining for all such employees.

(c) Democratic representation of workers and tenant groups in the initiation, management, and control of the housing project and in the direction of the social activities of the tenants.

The CHAIRMAN. The committee will adjourn until tomorrow morning at 10 o'clock.

(Thereupon, at 1 p. m., the hearing was recessed until 10 a. m. Saturday, Apr. 25, 1936.)

UNITED STATES HOUSING ACT, 1936

SATURDAY, APRIL 25, 1936

UNITED STATES SENATE,

COMMITTEE ON EDUCATION AND LABOR,

Washington, D. C.

The committee met, pursuant to adjournment, at 10 a. m., in the Caucus Room, Senate Office Building, Senator Davis I. Walsh presiding.

Present: Senator Walsh (chairman).

Also present: Senator Wagner.

The CHAIRMAN. We will proceed with the hearing. Mr. Hackett, will you proceed with your statement?

STATEMENT OF HORATIO B. HACKETT, ASSISTANT ADMINISTRATOR, PUBLIC WORKS ADMINISTRATION

The CHAIRMAN. Your name is Horatio B. Hackett?

Mr. HACKETT. Yes, sir.

The CHAIRMAN. And your residence?

Mr. HACKETT. Washington, D. C.

The CHAIRMAN. Legal residence?

Mr. HACKETT. Chicago, Ill.

The CHAIRMAN. Your official position?

Mr. HACKETT. Assistant Administrator of Public Works.

The CHAIRMAN. Who is the Administrator?

Mr. HACKETT. Secretary Ickes.

The CHAIRMAN. That is what I thought. We would be pleased to have your views with regard to this legislation.

Mr. HACKETT. May I request that the records of this meeting indicate that my remarks represent a personal opinion based upon practical experience in the housing field and are not to be construed as the official attitude on the part of the Public Works Administration? I strongly favor, with limited modifications on organization, the bill substantially as written. I believe that under its provisions a sound housing program could be inaugurated and carried out.

But I feel justified first in commenting upon certain statements made at yesterday's hearing which are contrary to the records of the P. W. A. Housing Division.

Several errors were made which might create an inaccurate impression of the limited dividend projects constructed by the Housing Division.

Seven limited dividend projects have been completed instead of five as indicated at the hearing. Contrary to the statements made, all of them have met their obligations to the Government, and none of them is exempt from taxation of any kind.

To correct whatever misinformation may exist, I submit the following summary which is a matter of statistical record and not mere conjecture.

The seven limited dividend corporation housing projects operating under P. W. A. have been making payments regularly. They have made available to approximately 11,000 persons good living accommodations at rentals well under the $12.50 per room per month allowed by the New York State housing laws.

Contrary to facts submitted yesterday, examination of the records shows that all seven of the projects are making interest payments as they are falling due. The records of the projects are as follows:

The Alta Vista Housing Corporation in Alta Vista, Va., has paid to the Government $5,211 in interest, and $2,147 in principal. It is 100 percent occupied. The project is not tax exempt. Rent, $3.47 per room per month.

Senator WALSH. Where is Alta Vista?

Mr. HACKETT. About 200 miles from here.

The Boyland Housing Corporation at Raleigh, N. C., has paid $3,002 in interest. Its first payment on principal is due May 1, 1937. It is 100 percent occupied. It is not tax exempt. Rent $10.99 per room per month.

The Boulevard Gardens Housing Corporation, operating the Boulevard Gardens Development at Woodside, Long Island, has paid to date $85,538 in interest. Its first payment on principal is due May 1, 1936. It is 100 percent occupied. It is not tax exempt. Rent, $11 per room per month.

The Hillside Housing Corporation in New York City, operating Hillside Homes, paid to the Government $188,287 in interest. Its first payment on principal is due February 1, 1937. It is 99.5 percent occupied. It is not tax-exempt. Rent $11 per room per month.

The Juniata Housing Corporation, operating the Carl Mackley Houses in Philadelphia, Pa., has paid to the Government $56,246 in interest. On January 1, 1936, it met its first payment on principal in full, paying the sum of $28,211. It is 98 percent occupied. It is not tax exempt. Rent $9.44 per room per month.

The Neighborhood Gardens Housing Corporation in St. Louis, operating Neighborhood Gardens, has paid to the Government $18,388 in interest. Its first payment on principal is due July 1, 1936. It is 58 percent occupied. The projects is but recently completed. It is not tax exempt. Rent $9.48 per room per month

The Eculid Housing Corporation, Euclid, Ohio; 56 houses have been constructed by persons on their own property, on which loans are being handled by the Government. All obligations of the corporation to the Government has been met in full. It is not tax exempt.

The corporations are private bodies formed by private interests to erect housing projects through P. W. A. loans. The maximum rents are established by State laws on the two New York projects. The developments were designed to meet a lower middle class rental market and are successfully meeting this need. The equity on these projects. varies from approximately 9 to 20 percent, the average being about 14 percent.

Any statement to the effect that these limited-dividend housing projects are failing to meet payments is erroneous.

The projects are amortized over periods varying from 15 to 35 years.

A suggestion has been made that prevailing wages are too high to pay labor and should be lowered. I fail to see how a problem resulting from low incomes can be solved by making incomes still lower. I need not discuss this because I am sure that your committee would not dwell on so reactionary a proposal. I am in accord with the prevailing wage provision as outlined in section 16 of the Wagner bill. Lack of information on the history of the Housing Division has led to the statement that it has been unjustifiably cumbersome and inefficient in producing visible projects. From this it has been stressed that the present procedure is by its very nature unsound. I consider this reasoning fallacious. Because of an emergency, the Housing Division started from scratch and launched into an unprecedented field. No comparable organization existed in this country nor had such construction ever been undertaken.

The first year was spent in attempting to induce private enterprise to assume the program. Of 500 limited dividend applications examined, only 8 were worthy of further consideration. Speculators tried to unload land; contractors, architects, and developers sought exorbitant fees. An about-face was inevitable. Federal projects were undertaken, but the legal complications in land acquisition impeded the program. A complete reorganization was necessary, new sites had to be selected, and the tedious assembly, parcel by parcel, of one of the Nation's largest land purchases had to be undertaken.

Several times during the last 21⁄2 years the Division has been in a position to proceed with approved developments but was unable to do so because the funds for these developments had been impounded by the demand of the administration's revised budget. I am in no sense criticising the use of these funds. I do wish to point out, however, that the delays experienced by the Housing Division as a result of its temporary emergency character could and would be avoided under the program outlined by Senator Wagner's bill. The bill would make the United States Housing Authority a permanent full-time housing agency and would give it directly substantial funds to prosecute its work. For these reasons it could develop a stability and continuity of policy and could avoid many of the most serious delays that have befallen the Housing Division of the P. W. A.

During the 3 years of its existence, the Housing Division completed 7 limited dividend projects; 18 Federal projects will be completed this year and 31 early next year. It has gained a wealth of knowledge, information, and experience which would enable the new agency, contemplated in the Wagner bill, to go forward with most of the difficulties already overcome.

I am proud of these accomplishments. This is not an apology, it is an answer to those who belittle our progress.

Under existing statistics, all estimates of housing need are subject to a considerable margin of error. From reliable estimates, however, I am sure that in the near future at least 750,000 new housing units will be needed each year. During the boom years of the 1920's total residential construction did not exceed 600,000 units in any one year. The coming demand will be on an unprecedented scale.

Furthermore, the housing need for the next few years will be from families in all income classes-from the well-to-do to the families of