STATEMENT OF BENJAMIN C. MARSH, EXECUTIVE SECRETARY, PEOPLE'S LOBBY, WASHINGTON, D. C. Mr. MARSH. Before suggesting certain amendments to this bill, Mr. Chairman, I should like to read a few comments which are directed toward this bill, though not specifically so, from a little pamphlet by the National Public Housing Conference, a pamphlet written by Miss Helen Alfred. She says: The Government cannot pay off our lottery tickets of land speculation, and until we are ready to come to grips with the land question, the slum clearance and low-rent housing program is defeated. This bill of Senator Wagner's, instead of coming to grips with the land question, gives the land speculators an ungodly grip on the Federal Treasury. It is a scheme-not that that is its intention, but I am speaking of effects which we are supposed to consider in legislation-it is a scheme to let landowners who cannot make a living with the speculative values of their land. dump on Uncle Sam and call it a byplay of the New Deal. I quote further from this pamphlet on municipal housing by Miss Alfred. It is published, let me repeat, by the National Public Housing Conference, one of the vice presidents of which is the Right Reverend Monsignor John O'Grady, who has just appeared here this morning as a witness. Miss Alfred further says: Saddling of the tenants with the burden of the unearned increment from years of land speculation must nullify any efforts to reduce rent charges accurately. Of course, what this bill does is to say, "Here is a little group of folks, we have got to support them. They are too poor to be skinned by the landlord, therefore they are on relief, they are out of work or they are of low, very low income; we have got to subsidize the landowner and try to kid the public into thinking that we are subsidizing the poor little people who cannot make a living because of the fool system and the New Deal." Now, as a political gesture, it may have its value-and I am very sorry that my friend Senator Wagner is not here because I have discussed it with him more than once- as a political gesture it has value. As it stands, however, it is utterly futile to meet the situation, and I want to suggest some specific amendments which will help to meet the situation and give just a touch of reality to the preamble of this bill which asserts that the purpose is for development of decent, safe, and sanitary dwellings for families of low income, and point out that about four-fifths of our familes have low income and this bill might touch one-quarter to one-third of 1 percent of the 80 percent who have low incomes. I suggest some specific amendments. At page 16, at the end of section 11 (f), add: Provided, That the Authority shall be empowered and authorized (a) to acquire land, improved or unimproved, at the figure at which it is assessed by State or local assessment authorities, or at the capitalized average net income of the preceding 4 years, or capitalized estimated average net income of the next 4 years, if improved, whichever shall be the lesser amount, and to construct such dwellings as it determines; (b) to obtain, supply, or manufacture all materials or parts required, either by contract, direct purchase, or by taking over works as controlled establishments, or by itself setting up or acquiring and running establishments of its own; (c) to requisition supplies or stocks at fair prices, this to cover storage and transport; (d) to fix standard prices; (e) to carry out the investigation and inspection necessary for the satisfactory exercise of these powers; and (f) to determine what rentals shall be charged occupants, taking into consideration price paid for land, cost of materials, rate of wages, and cost of living. Reference has been made naturally here this morning to the housing program of Great Britain, and it is perfectly true that since the Armistice, the National Government, which by the way exercises practically complete control over housing regulations throughout Great Britain and Wales and in a large measure in Scotland, has acted. There have been something like 2,100,000 houses built with subsidy, but there is a vast difference between housing people with low incomes in England and the United States. I looked up a few months ago and found that the average price of land in Great Britain, assuming 22 families to the acre, for housing, was roughly about oneeighteenth of what is paid in large cities in the United States. In other words, the annual land rental on the basis of what the Federal Government has spent for rehousing in the United States, the annual rental would be about as much per family as is paid for the land per family in Great Britain. These amendments which we have made empower this Government authority set up under this bill to acquire factories by condemnation or to construct them independently when necessary to protect the Government from paying exorbitant prices for material for housing. These provisions are taken practically verbatim out of the housing program of the British Labor Party which, being realistic, knows that the Government has to have the power to protect itself not only against profiteers in land-they are only one of the group in America which are blocking human progress-but against profiteers among the manufacturers of material for housing. I want to suggest another amendment at the end of section 11, paragraph (h), add: Provided, That no Federal credit nor subsidy shall be extended under this Act to any State or local government, nor to any limited dividend, or commercial or noncommercial housing association for any housing project of any sort where the State and local real estate tax rate on buildings is over half of such tax rate on the unimproved value of land. It is quite obvious that the Federal Government is going to have to continue to admit and in part to meet its responsibility for the five or six million families at least at present it is in the neighborhood of ten and a half or eleven million families, the wage earners of which cannot get employment. The policy of the Federal Government to date has been largely to turn the money over with some control, but thoroughly inadequate control. I the Federal Government were to provide housing for those kept on Federal relief or largely dependent upon Federal maintenance, it would have to spend in the neighborhood of at least three or four billion dollars a year for a great many years. The Federal Government is going to have to pay a good share of relief costs-I think it is going to come to three or three and a half billion dollars a year-for some time. It is perfectly constitutional, as many precedents and practices indicate, for the Federal Government to state under what conditions. it will give credit for the alleged housing for people of low incomes. Today, with all due deference to the statement made by Mr. Hackett, and earlier by Mr. Grimm, we know that the housing program of the administration has been very limited, and the reasons are set forth— they are as true today as when set forth-as set forth about a year and a half ago in a radio address at one of the first conferences of this public housing conference, at which the statement was made that the housing program was blocked by speculators in land and profiteers. That came from no less an authority than the well informed wife of the President of the United States, who I understand was somewhat embarrassed, or perhaps her husband was, by this plain statement of the fact. But this bill as it stands does not hold out much hope. The ScrippsHoward papers gave a list the other day of the average cost per family in some resettlement projects, which are interesting because they are indicative of what is going to happen under this proposal to help families of low incomes, and I just quote verbatim from this article: Tygart Valley, the cost per family is $5,800; at Reedsville, $10,000; Red House, $5,200; West Moreland, $4,100; Crossfield, $7,000; and Woodlake, $9,800. It is futile to attempt to meet this situation on the basis of British experience or any other experience until, to quote Miss Alfred, "We come to grips with the land speculators." In this article she quotes Mr. Irving Brandt whom she correctly calls a stalwart campaigner for public housing, as to what has happened in numerous instances when the P. W. A. makes a slum clearance allotment: Agents of the Public Works Administration begin quietly to secure options on needed real estate. It becomes known that Public Works Administration is taking options. And land speculators rush into the district and take private options, and lawyers sign contracts with land owners for a percentage of all they can get from the Government over a stated minimum. Land prices go up and the Government stops buying. The slum-clearance project is canceled. That is from an article by Mr. Brandt, the chief editorial writer of the St. Louis Star-Times. Mr. Chairman, I tried to get figures from Tenement House Commissioner Langdon Post of New York with reference to the conditions of housing in New York referred to in a paragraph in the New Republic of April 8. Among his statements were: On New York's lower East Side, property is assessed at $10 a square foot while newer and better slum tenements in Cleveland are assessed at only 60 cents. Mr. Post wrote me that he had not a copy of the full interview but he would send me these important figures, and I should like the privilege of incorporating them as part of my testimony. He said I could have them in a few days. It will indicate the difficulties which any honest Government administration has, and I think we should give great credit to Secretary Ickes for trying to protect the American people from the land speculators masquerading as patriots. It shows the difficulty which any Government agency is going to have I will be frank and say it shows the impossibility of getting housing for low-income workers-taking the lowest 50 percent of our total workers-under the present system of taxation, and suggest that a bit of reality, even in an election year with respect to the housing program, is not inappropriate. In England they have had, I think, always a law which has prevented any such speculation in land as has gone on in every major American city. It is known as the law of ancient lights. Over there, a man is not allowed to steal his neighbor's light. Over here if he has political drag in his party-because they are twin curses-he can steal his neighbor's light and capitalize the value of his site based upon the robbery of that light. I wish there were some similarities between the housing conditions in England, or I would say rather, between the approach to the housing conditions in England and the United States. Unfortunately there is not at present, and therefore it is very important that we should realistically approach the problem and realize therefore that until we settle this problem of land speculation and until we accept the fact that the Federal Government can manufacture material for housing, it is foolish to go into public housing on a large scale. It will be a great disaster and a great disappointment. Fortunately we have one party in complete control of both branches of Congress. It can, if it wants to, within the next 6 weeks enact a housing bill which will not, as this bill does, put most of the cost of rehousing the poorest, upon those of small means, but enable the Government to acquire land and material for housing at a fair price, and through the operations of the Senate Finance Committee, of which Chairman Walsh of this committee is a member, could adopt a tax system which would not compel the poor to subsidize the poorest in housing or in anything else. I thank you very much for your courtesy in hearing me. The CHAIRMAN. The clerk will insert in the record at this point recommendations and amendments to the bill suggested to the committee by the United States Civil Service Commission and by the National Civil Service Reform League. (The letters referred to were inserted as follows:) Hon. DAVID I. WALSH, UNITED STATES CIVIL SERVICE COMMISSION, Chairman, Committee on Education and Labor, United States Senate. DEAR MR. CHAIRMAN: The Commission is greatly concerned over the following provision appearing as paragraph (b) of section 4 of S. 4424: "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." The phraseology of this section is such that every position could be exempt from the merit system established by the Civil Service Act if the United States Housing Authority so decided. The word "officers" in line 19 on page 7, the word "contract" in line 20 on the same page, and the words "employ such skilled and unskilled labor" in line 22 on page 7 may be subject to so broad a construction as to exempt virtually all appointments from competition. If Congress passes any legislation relating to employment of personnel and it contains no affirmative exemption from competition, the positions automatically fall within the provisions of the Civil Service Act, which, however, in itself contains specific provision for the President to make exceptions by Executive order. If, however, Congress wishes to place in the statute affirmative exceptions, it is believed that such specific phraseology should be used as to prevent any confusion of construction in interpreting the statute. In creating the Social Security Board the Congress adopted section 703, reading: "SEC. 703. The Board is authorized to appoint and fix the compensation of such officers and employees, and to make such expenditures as may be necessary for carrying out its functions under this act. Appointments of attorneys and experts may be made without regard to the civil-service laws." The Comptroller Ceneral has defined the meaning of the word "expert" so that it has been possible for each agency which is authorized to make exempt appointments of experts, to arrive at an agreement with the Civil Service Commission by which appointments under the exemption are given consideration. The Commission recommends that there be no affirmative exemption from competition in S. 4424, because the President under existing law may thereafter make any exceptions considered necessary or desirable; but if Congress prefers to make specific exemptions in the statute, the phraseology used in creating the Social Security Board would appear to cause the least confusion in construing its meaning as to the positions which may be regarded as exempt from the merit system. By direction of the Commission: HARRY B. MITCHELL, President. NATIONAL CIVIL SERVICE REFORM LEAGUE, Hon. DAVID I. WALSH, Chairman, Committee on Education and Labor, United States Senate, Washington, D. C. DEAR SIR: On behalf of the National Civil Service Reform League, I respectfully urge you to amend Senate bill 4424, creating the United States Housing Authority, by striking out the blanket exception from the Civil Service Act of a large proportion of the personnel, now contained in section 4 (b), as follows: "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." The experience of many years has proved that such sweeping exemptions of unspecified numbers of persons under the vague titles of "officer" and "expert" too often lead to the employment of the unneeded or incompetent under misleading titles, through political pressure; to unnecessary expense; and ultimately to demoralization of personnel. An example is the vast numbers of "experts" in the Veterans' Bureau some years ago, who were found to be actually stenographers, messengers, and chauffeurs, who could not have been employed under their proper titles. We appreciate that recent rulings of the Comptroller have prevented much of such abuse, but experience has shown that the practice of such exemptions has a tendency toward evasion of the merit principle. We can see no reason for the exemption of skilled and unskilled laborers. If for some unforeseen reason it should be found impracticable to obtain a sufficient and satisfactory supply of labor through the machinery of the Civil Service Commission, the civil-service rules are elastic enough to permit the Authority to be supplied from the open labor market. Embodying this exemption in the statute, however, can only be an invitation to make the employment of laborers by the Housing Authority throughout the United States entirely subject to all the vagaries of local politics. We would call your particular attention to one possible result of the clause permitting the Authority to "contract for the personal services of such architects, engineers, appraisers, negotiators, and real-estate brokers", by pointing to experience in New York City, where (until such subterfuge was forbidden by the courts) over 100 persons were employed in highly paid positions through "contractual" arrangements to avoid making appointments from civil-service lists. We wish to call to your attention also the provision contained in paragraph (d) of section 4 on page 8, relating to the transfer of employees of the Federal Emergency Administration of Public Works to the Housing Authority. It would seem from the language of this paragraph that the employees so transferred and deemed to be permanent may be included in the classified civil service with or without |