I assume that in the use of the phrase "all incomes" in that sentence, you do not have in mind that people of all incomes require some assistance from the Federal Government?

Mr. BATES. Oh, no. Low-rent housing is just for those families having low incomes, say up to $1,500 or $1,800, who can pay up to $20, $25 a month for housing in the publicly aided low-rent housing projects.

Senator RADCLIFFE. I thought that was what you had in mind. The language is possibly a trifle ambiguous.

Mr. BATES. Well, that is what I had in mind.

The CHAIRMAN. Are there any other questions? Well, thank you very much, Mr. Bates.

Mr. BATES. Thank you, Senator. Mr. Shishkin will deal with some of the technical phases of the bill, which he is better able to discuss with the committee than I am.

The CHAIRMAN. You seem to understand it thoroughly. Mr. Boris Shishkin, secretary of the committee on housing of the American Federation of Labor. We will be glad to hear from you, Mr. Shishkin.

STATEMENT OF BORIS SHISHKIN, SECRETARY, COMMITTEE ON

HOUSING, AMERICAN FEDERATION OF LABOR

Mr. SHISHKIN. Mr. Chairman and members of the committee; it is my intention to supplement the statements of fundamental policy that were laid down by President Green and Chairman Bates of our housing committee, by covering a few phases that we consider very basic to this proposed legislation.

As President Green and Mr. Bates have pointed out, the recommendations of the American Federation of Labor have not been thought up by anyone overnight; they are the result of the common thinking on the part of a large group of wage earners of all trades and occupations throughout the land. All during the war, a great deal of thought has been given this problem by organized labor, with one conclusion emerging, and that conclusion is fundamental to the whole bill.

That conclusion is that in the past, before the war, we had private enterprise serving only a part of the housing market, that in order to solve the chronic crisis in which we live in the field of housing, we must have in America a universal housing market.

The only way to provide a large-scale postwar program of construction of new homes is to make sure that these homes are built not only for the rich, but also for the families who have not been able to afford anything but second-hand, third-, fourth-, and fifthhand housing.

So that the Wagner-Ellender-Taft bill is really the answer to this long-term demand on the part of organized labor for a comprehensive program which would serve a universal housing market.

I do not want to burden the committee with any detailed presentation of our studies-and many of them have been made-some of which we have presented to the Senate through the submission we made on January 15 of this year before the Taft Subcommittee on Housing and Urban Redevelopment of the Special Senate Committee on Postwar Economic Policy and Planning.

GENERAL HOUSING ACT OF 1945

We believe that enough study has been given by Congress to the over-all problem of housing. We not only have had studies, Congress has before it the conclusions of the congressional committee themselves. And so we find today that the conclusions of this subcommittee of the Senate, which devoted long and detailed attention to the housing need, bear out in every major particular the legisla tion that is now pending final decision by this Congress. Not only the Senate Committee on Postwar Housing, but also the Colmer committee of the House and the House Postwar Committee have prepared a report which is in complete accord with the basic policy and objectives and even more detailed policy provisions of this legislation.

We also find that on the part of the administration, the emergency message of the President of the United States on September 8 fully bears out the basic framework of this legislation. So we believe there is no further need for detailed studies and deliberations. Congress is ready to act now.

As this legislation is written, we appreciate, of course, the opportunity of being heard here, and we appreciate the opportunity that this committee is according to the groups who have great interest in this legislation, to present their views on the specific proposals in this bill.

We are today faced with an emergency. It is not necessary any longer to seek evidence of the housing need. Perhaps this committee will be interested in having in the record something that was quickly culled, and culled pretty much at random, from the newspaper headlines across the breadth of the land:

Housing is Portland's No. 1 Emergency (Oregon Daily Journal, October 31, 1945).

Housing Shortage Strikes Faculty at University; 21 Reported Homeless (Register-Guard, Eugene, Oregon, July 27, 1945).

Veterans Need Homes, Rooms, in Dayton Area (Journal-Herald, Dayton, Ohio).

Vet Walks 105 Miles in Week, But Finds Flat (World-Telegram, New York, October 30, 1945).

"City of Homes" Has None for Vets-Ex-Servicemen and Families Search Fruitlessly for Decent Places to Live (Philadelphia Record, Philadelphia, Pa., September 24, 1945).

Widow with 6 Sons in Service Quits Job to Hunt House in Vain-6,000 Atlantans Looking-Call Again (Atlanta Constitution, Atlanta, Ga.).

Housing Shortage for Veterans Desperate-700 Unfilled Applications on File at Navy League (Cincinnati Times-Star, Cincinnati, Ohio, July 5, 1945). Back Home? What Home? (Chicago Daily News, Chicago, Ill., October 10, 1945).

Vets Sleep on Floors-Need 50,000 More Apartments (New York Evening Post, New York, September 13, 1945).

Ex-Soldier Finds No Shelter in Crowded Chicago (Chicago Daily News, Chicago, Ill., September 20, 1945).

Los Angeles Home Shortage Is Worse Than During the War (Wall Street Journal, New York, November 8, 1945).

Conquering Hero Is Homeless (Washington Daily News, Washington, D. C.). Coast to Coast "No Vacancy" Signs Greet Home-coming Vets (Washington Daily News, Washington, D. C., October 16, 1945).

Housing Need Harassing for Jersey Veterans (Newark News, Newark N. J., October 8, 1945).

Madison, Bursting At Seams, Can't Comfort More Newcomers (Wisconsin State Journal, Madison, Wis.).

Boston Like Women in Shoe; Distracted by Lack of Housing (Boston Herald, Boston, Mass.).

Doors of Memphis Are Closed for Home-Hunting Ex-Soldiers (Memphis Commercial Appeal, Memphis, Tenn.).

4,000 Vets Fight for 261 Homes (Washington Daily News, Washington, D. C.). Need of Housing for Servicemen in City is Dire (Greenville News, Greenville, S. C.).

So, from reports coming from every section of the country, not a deliberate prepared survey of the press, but contained in clippings from newspaper articles appearing in a short period of time, picked pretty much at random, you see the situation that exists in the United States.

There is no need of reiteration of that. We have already impressed the importance of the situation upon the committee in what has already been said.

War has added greatly to our crisis, but the crisis was not born of the war. It was born of a combination of many very basic factors in our economy and in the operations of the building industry.

One of the things that we believe is very important to understand at this time is that we have had a long trend in the United States migration which has resulted in an unprecedented shift of our population. The war has dramatized and brought to our attention the fact that we have had over a long period of time, Mr. Chairman, a trend of population movement from farms to cities.

The growth of industry has attracted people from the farms to the cities. The standard of living that could be had on the farm has encouraged that movement. Only in the depression years was that trend reversed. It was only in those years that people moved from the city to the farm, because they were seeking a means of survival in a place where the land could support them. It was not a question of the living standard, but of finding the means for subsistence during the years of economic distress.

Not only did our urban population grow faster during the war than ever before, but also this added migration from the farm to the city, and from one set of cities to another has pyramided, doubling and trebling our urban population in areas affected by war activity. I would like to leave a statement covering that in the record here, Senator.

The CHAIRMAN. Very well, it may be incorporated in the record at this point.

(The statement follows:)

WARTIME MIGRATION AND HOUSING NEED

The war has brought to our attention and dramatized a fact which has long existed. This is the acute housing shortage which has long been with us, which we have long talked about, but which we have done little to remedy.

Despite the fact that the war has made us realize how inadequate is our supply of housing, it has brought little improvement in our inadequate methods of estimating the extent of this housing need. We still make estimates in terms of a stationary and slow-growing population. Most important is the omission in the currently accepted estimates of housing need, of basic facts of our economic life which have the most far-reaching effect upon the housing need throughout our Nation.

The most striking of these facts is that during the past few years we have been undergoing two types of mass migration. One of these migrations has been steady and of long duration. That is the shift of vast numbers of our people from our farms to our cities.

GENERAL HOUSING ACT OF 1945

Sons and daughters of our farm families have for a long time, and in increas ing numbers, been abandoning their rural homes to seek their fortunes in the industrial centers of the Nation. The average farm population of 31,000,000 in 1935-39 was reduced to 25,000,000 by 1945. Part of this increase was due to the second, even more dramatic migration during the war. This migration was short in time, but revolutionary in its effects. Either by choice or necessity, 4 out of every 10 workers in our labor force moved out of their established homes and communities and into new ones. Since the beginning of the war, over 15,000,000 people moved out of the county where they were living. Over 7,500,000 moved across State lines.

The effects of this shift of our population are of fundamental importance in appraising housing need. It means that we must revise our estimates of where our housing need is and of its extent. families into our cities during the war, we failed to build an adequate supply Even before the accelerated influx of of new urban homes. Now our available supply is even

inadequate.

more critically

This crowding of more and more families into an almost stationary supply of homes has meant that these houses have deteriorated faster and faster. The failure to make necessary repairs and to keep up adequate maintenance has accelerated this deterioration during the war. This means our prewar estimates

of housing replacement need are totally out of date.

Another basic fact of our economic life is that our families are getting smaller. Under the impact of social change, modern technology and economic growth, city families have tended to split up into smaller units. The cities have also placed an increasing drain on the farm family.

This decrease in the size of our families has been sharply intensified by the abnormally high marriage rate in wartime. We must consequently make an upward revision in our estimate of the volume of housing needed and a reevaluation of the type of new housing we shall require.

The American Federation of Labor presented its estimate of the housing need from 1947 to 1956, in its testimony before the Subcommittee oh Housing of the Committee on Postwar Economic Policy and Planning. On the basis of the data then available, we estimated that we must build 15,600,000 new homes during this 10-year period.

A building program of this size is an unprecedented challenge to all America. But now we find that even 15,600,000 new homes is an underestimate. The evidence already available indicates we will have to make a substantial upward revision in our estimate when the full effects of our wartime mass migration become known. We must plan our peacetime housing program with full and sober recognition of these new economic facts of life. We must meet the challenge of building new homes for all who need them.

Mr. SHISHKIN. I should like to emphasize particularly that in the presentation we have previously made in appearing before the Taft subcommittee, we presented a carefully studied basic estimate, a second revision of an estimate made some years ago of the postwar housing need we will face in the next 10 years.

This estimate indicated that between 1947, which we assumed as the first normal postwar year, and through 1956, we shall need to build, in order to meet the absolutely minimum physical need-not the market, but the absolute minimum physical need for replacement of deteriorated housing and to accommodate the growth, a minimum of 15,600,000 homes.

From the evidence we have received since then on the effects of the migration and from the very careful studies indicating that the portion of the population that has left the farm will not return to the farm, that of some 6,000,000 persons who on the net have left the farm to go into the city, that not more than two and a half million are expected to return to the rural areas. Therefore, our urban crisis will be greater, and the estimate of the need will require greater upward revision.

Senator MURDOCK. Do you mind being interrupted?
Mr. SHISHKIN. Not at all.

Senator MURDOCK. I am very much interested in this statement made by Mr. Bates, on page 2, the last paragraph:

As everyone well knows, under the FHA insurance, the loans made by the lending institutions have in practice carried a Federal guarantee of the entire amount loaned and frequently, through the simple device of overappraisal, the insurance guarantee of the FHA extended to as much as 110 and 115 per cent of the loan.

Is there substantial proof of that fact?

Mr. SHISHKIN. I am sure there is, Senator. It certainly has been a matter of general knowledge, even before the war. And under the more liberal appraisals and tax inspection of the FHA, especially under title VI of the National Housing Act, under which FHA operated in wartime, overinsurance on the part of the FHA in excess of the actual value of the house insured was very widely prevalent. The appraisal is made on plans and specifications in advance of construction. Every architect and builder knows how much leeway that leaves in actual construction. The proof is in the increased maintenance and repair costs later borne by the home buyer.

In this connection, let me point out that what I just said gives the clue to this problem of increased need. The character of that need is the key to the whole philosophy of this legislation.

We are here to provide for the first time legislation that will really serve the need of the great middle market, the people of moderate incomes, the wage earners, the professional workers, the backbone of American citizenry, who have not been adequately served by private enterprise.

It is the desire of the American Federation of Labor in supporting this program to see that private enterprise does adequately serve this main sector of the housing market. That is our philosophy and our purpose. Any method supplementary to private investment is needed only to safeguard the principle of the universal market.

Senator RADCLIFFE. At the beginning of your address, you used the word "universal." I assume you do not mean that every one who wants to build a home must in some way come under some such plan as this. Suppose I were to build a home and I did not want to avail myself of any of the facilities here provided. Is there any reason why, because of the theory of universality, I should have to come under it?

Mr. SHISHKIN. No, Senator, not at all. The principle of the universal housing market is that any family which does not have access to proper housing and is now compelled to live under substandard conditions, should be served. If the family does not have suitable housing available, either because of the financial situation or because of the lack of planning, or because it moves into a new community, which community cannot supply a home, that family ought to be given access to good, livable housing.

Senator RADCLIFFE. It is not obligatory upon the individual?
Mr. SHISHKIN. Not at all.

Senator RADCLIFFE. I did not think you meant that by "universal.”
Mr. SHISHKIN. Not at all.

Senator RADCLIFFE. I was interested in Senator Murdock's question. I was wondering how that overvaluation takes place.

Mr. SHISHKIN. I will come to that, if I may, Senator. The amendments covering the middle market are the amendments that really provide the most important and vital answer to something to which