local activity or take care of drastic need where local sponsors are unable.

I believe that the Wagner bill is practical and feasible becauseFirst. It sets up a reasonable procedure for carrying forward the necessary slum clearance and low-rent housing program.

Second. It aids States and municipalities interested in this program of slum clearance and low-rent housing to enter actively this field. Third. It enables the progressive transfer of responsibility to local agencies.

Fourth. It makes possible the utilization of present Housing Division assets as well as future Federal projects in order to raise additional funds.

Fifth. The amount required to be contributed out of general Treasury funds is small.

Sixth. It will enable the raising of funds at low interest rates.
Seventh. It has the advantage of flexibility.

Eighth. It encourages the participation of private capital in this program and thus minimizes the amount of funds to be derived from governmental sources.

The CHAIRMAN. Mr. Hackett, I would like to ask you a few questions. The first allotment to the Housing Division of funds was for $150,000,000?

Mr. HACKETT. Prior to November 1933, the Housing Division had no specific allotment but derived its funds for individual projects by resolutions approved by the special Board of Public Works and by the President.

The CHAIRMAN. Have you had any allocated since that time?

Mr. HACKETT. Between November 1933 and November 1934, through allotments, recissions, and transfers, $135,328,500 was made available for a Federal housing program. In December 1934, $110,000,000 of this amount was impounded by Executive order, leaving $25,328,500.

The CHAIRMAN. That is all you have had?

Mr. HACKETT. In March 1935, $7,900,000 additional funds were transferred to the Housing Division. In June 1935, the balance of old funds available for a Federal Housing program was $31,558,500. I wish to have incorporated into the record the financial history of the Housing Division which I have here. (The matter above referred to, follows:)

FINANCIAL HISTORY OF THE HOUSING DIVISION

A. NATIONAL INDUSTRIAL RECOVERY APPROPRIATION

November 20, 1933, to November 7, 1934. $135,328,500 was transferred and made available for a Federal housing program. December 28, 1934. $110,000,000 of the above sum was impounded by Executive order of the President and retransferred for relief purposes.

January 1, 1935. $25,328,500 balance available for Federal housing program. March 27, 1935. $7,900,000 additional funds transferred to the Housing Division for Federal housing program.

April 1, 1935. $33,228,500 balance available at this time for Federal housing program.

June 20, 1935. $1,670,000 was transferred from the Federal program for a limited dividend project.

June 20, 1935. $31,558,500 balance of N. I. R. funds available for Federal housing program.

63408-36- -16

B. EMERGENCY RELIEF APPROPRIATION

May 16, 1935. $249,860,000 recommended to the President by the Advisory Committee on Allotments for Federal housing program.

June 27, 1935. $91,647,000 approved by the President for Federal housing projects. (NOTE.-This was the first Presidential approval pursuant to recommendation of the advisory committee on May 16, 1936.)

July 9. 1935. (NOTE.-Housing Division received official advice that funds approved by the President on June 27, 1935, were available for commitment.) August 28, 1935. $221,982,000 was the total to date approved by the President and for which official advices had been received.

September 25, 1935. $120,608,950 on this date taken from the total funds approved by the President.

September 26, 1935. $101,373,050 balance available for the Federal housing program to be financed from the emergency relief appropriation.

Apr. 1, 1936:

C. RECAPITULATION

Total E. R. A. funds for Federal housing program.
Total N. I. R. funds for Federal housing program.

Grand total from both appropriations..

Available for 50 active projects.

Balance for liquidation of claims, land purchase commit-
ments, etc., on suspended projects.----

D. LIMITED DIVIDEND PROGRAM

On August 17, 1933, the first allotments were made for individual limited dividend housing projects, there being four such allotments made at this time All allotments which were made by the Special Board for Public Works and approved by the President for limited dividend projects were handled in a routine manner identical to all other non-Federal allocations: i. e., when a project had been examined and favorably reported upon, a recommendation and resolution was presented to the Administrator and the Special Board for Public Works for appropriate action. If approved, the allotment was transferred on the books of the Treasury from the general N. Í. R. appropriation to the private bodies account. Between August 17, 1933, and June 20, 1935, several allotments were made for limited dividend projects, but owing to the fact that the borrowers were unable to execute a contract satisfactory to the Administrator for the construction of these projects, the program was finally resolved into eight projects aggregating total allotments of $12,641,600. All other allotments had been rescinded and retransferred to either the housing division for Federal program, or for non-Federal projects. There was never a lump sum allotted for limited dividend projects. The CHAIRMAN. Have you now any funds available for additional projects?

Mr. HACKETT. No, sir; there are no funds available for additional projects.

The CHAIRMAN. Have you sufficient funds to complete the projects that you have already undertaken?

Mr. HACKETT. We have.

The CHAIRMAN. Have contracts been made for all the projects? Mr. HACKETT. Either demolition or construction contracts have been let for all projects except Nashville and Detroit. In those two cities bids have been rejected and readvertised.

The CHAIRMAN. I have in mind now two in my own State. The South Boston project-has that been contracted for?

Mr. HACKETT. That has been contracted for.

The CHAIRMAN. And the money set aside to meet that contract?

Mr. HACKETT. The money has been set aside to meet that contract.

The CHAIRMAN. And the houses are being erected?

Mr. HACKETT. The foundations are now being built.

The CHAIRMAN. When will it be completed?

Mr. HACKETT. It should be completed by March 1, 1937.
The CHAIRMAN. How many apartments will there be there?

Mr. HACKETT. There will be 1,016 living units, comprising 3,912

rooms.

The CHAIRMAN. Do you know what the rent will be?
Mr. HACKETT. That I cannot tell you; no, sir.

The CHAIRMAN. About the Cambridge project; has that been contracted for?

Mr. HACKETT. Yes, sir. The demolition has been contracted for. The CHAIRMAN. I know the land has been purchased and the demolition of most of the property has been contracted for?

Mr. HACKETT. Yes, sir.

The CHAIRMAN. No contracts have been made for the new building? Mr. HACKETT. The contracts for the buildings are in such shape that the project can continue on without the loss of time after the demolition.

The CHAIRMAN. What I want to know is if you have funds for that? Mr. HACKETT. Yes, sir.

The CHAIRMAN. Do you know how large that is?

Mr. HACKETT. There are 294 living units, consisting of 1,172 rooms. The CHAIRMAN. You do not know what the rental will be there either, I suppose?

Mr. HACKETT. No, sir.

The CHAIRMAN. Have you been embarrassed and your progress delayed by reason of the fact that you have not the eminent domain authority?

Mr. HACKETT. That did embarrass us for awhile, because the whole premise of our housing program was predicated upon the fact that we could obtain by Federal condemnation those parcels of land which could not be bought by option. On most of the sites that we tried to collect, we have been able to obtain anywhere from 85 to as high as 98 or 99 percent of the land through direct negotiations by which the owner agreed voluntarily to sell the parcel at a certain price. But in each of those cases there were certain parcels essential to the project which were held up through excessive price or title clearance.

The office of the Comptroller General has advised that it would not approve disbursements under architectural contracts unless we were assured that the necessary land for the project would be acquired by the Government.

The CHAIRMAN. Now, let me ask you about the litigation. You met with some suits in different parts of the country where you undertook some of these projects?

Mr. HACKETT. Yes. The Louisville case concerned the right of the Government to condemn land for housing. Suits are pending in the Supreme Court of the District of Columbia in connection with the Boston, Cambridge, and Camden projects. These suits are pending and seek to enjoin the Government from proceeding further with the projects; however, no injunctions have been granted by the court at this time and we are proceeding with construction.

The CHAIRMAN. When you were here last year, I asked you a question and there is an answer which I want to have read for the record. I am sure there is no dispute about it; it appears on page 49

of the hearings before the Committee on Education and Labor on S. 2392, first session, Seventy-fourth Congress:

The CHAIRMAN. It was intimated here yesterday that your projects were not of the character that was contemplated by those who are advocating slum clearance; that your projects are better housing projects and not slum-clearing projects; but the rent you propose to charge and the character of buildings is such that you will appeal to a better class of tenants than those who occupy homes in the slum areas. What would you say about that?

Mr. HACKETT. There is a lot of truth in that. We, in the Housing Division, first try to designate the lowest standard to which a man should live, and then instead of trying to build our houses and our rooms down to the slums and gutters, we are trying to bring the slums and gutters up to our standard of living.

Do you recall those questions and answers?

Mr. HACKETT. Yes, sir.

The CHAIRMAN. The chairman said:

I understand the Federal Government purchases the land and does the construction work, and after the buildings are erected and occupied by people, does the Government still contemplate holding title, or is it to be passed over to a private corporation?

And you replied:

Mr. HACKETT. At the present time and until it is possible to turn over those projects to duly constituted bodies in the cities, the Government will continue to run them.

Is that your present state of mind?

Mr. HACKETT. It is our present state of mind, as soon as we can legally do so.

The CHAIRMAN. How many of these projects have been completed? Mr. HACKETT. Outside of the seven límited-dividend projects, there are two in Atlanta which are about to be occupied; in fact, one of those projects is partially occupied.

The CHAIRMAN. Thank you.

Mr. HACKETT. You asked me several questions concerning the rents and costs of those projects. Mr. Clas, P. W. A. Director of Housing, has already submitted a statement to you giving that information for the record.

The CHAIRMAN. I should like it very much. Mr. Hackett, when did your department change its attitude toward limited-dividend corporations and decide not to encourage that method?

Mr. HACKETT. That was in March 1934.

The CHAIRMAN. Why?

Mr. HACKETT. We required a 15-percent equity, and out of 500 applications that we received we found that the equity was usually built up on excessive prices for the land, for which they asked double what the land was worth, and also because of excessive fees of architects and contractors. Also the rentals proposed were not within the means of the lower income brackets.

The CHAIRMAN. In any event, you concluded that that was not as desirable a way of solving the housing problem as for the Government itself to carry out the entire operation?

Mr. HACKETT. At that time; yes, sir.

The CHAIRMAN. And your opinion has not changed?

Mr. HACKETT. My opinion has changed. I say this, that in this housing program to build 750,000 units per year, will require tremendous effort on the part of every agency, private, Federal, and local. I am strongly in favor of turning over all this work to States,

municipalities, or other local agencies and the minute they can take it and the minute they are willing to take it.

The CHAIRMAN. Thank you.

STATEMENT OF REV. DR. JOHN O'GRADY, SECRETARY OF THE NATIONAL COUNCIL OF CATHOLIC CHARITIES

The CHAIRMAN. You are secretary of the National Council of Catholic Charities?

Dr. O'GRADY. Yes.

The CHAIRMAN. You reside here in Washington?

Dr. O'GRADY. Yes, sir.

The CHAIRMAN. We will be pleased to have your views on this legislation, Dr. O'Grady.

Dr. O'GRADY. Yesterday, at the hearing, a prominent expert on housing advocated a rent subsidy as a substitute for permanent grants. In the course of the discussion, there was a good deal of confusion as to the form that that subsidy should assume, and there has been a good deal of discussion, I note, on the part of business organizations, of the same topic within the past month. The program of the subsidy advocated by business organizations seems to take the form of a relief subsidy, and that is, they would subsidize rents on an individual basis on what we call a case-work basis.

That seems to me to be a departure from our traditions and from the programs that we have tried to develop for the purpose of protecting wage earners against the major hazards of life.

The whole drift in social legislation has been to set up definite standards, because we find from our relief experience that it is very, very difficult, if not impossible, to administer grants on a case-by-case basis. It seems to me that that will involve us in the same difficulty in which our relief program has involved us, and the whole tendency has been to substitute the permanent grants that are determined objectively by law for the individual case-by-case aid.

So that it seems to me that the program suggested by Mr. Grimm is a step backward. This housing, I think, ought to be placed in the same category as the other types of aid, the other types of needs which wage earners must meet in the matter of aid of government. So that it seems to me that Mr. Grimm's suggestion is entirely unsound from the standpoint of the whole history of Government grants in aid to wage earners, both in Europe and in this country.

I noted also that Mr. Grimm talked about the competition, about the Government entering into competition with private enterprise through grants-in-aid through loans to limited dividend corporations. At the same time he contended that the whole limited-dividend program was a failure. Of course, if it is a failure it cannot compete seriously with private business.

I am in favor of the general principles of the Wagner bill, in fact, I favor the entire program. It does not embody all the things that I would like to see in the bill.

I think you will note, Senator, if you compare the record of the hearings this year with the hearings last year that there has been a great development, a very wide development of interest in this slumclearance and low-cost housing program. I do not know of any other