prise have been administered. Within the framework of previous experience we are extremely skeptical of the promise of private enterprise to provide adequately for the housing needs of minority groups in our population. Likewise, within the framework of previous expe rience with the Federal Housing Administration, minority groups are extremely skeptical that the intent of S. 1592 will be carried out, and we fear that this agency's undemocratic practices of the past will be continued in the future.

All present plans and proposals for housing and urban redevelopment point to the large place of private enterprise in the housing of people of all income groups and segments of the population. It is in this field that the Federal Housing Administration since its inception has wielded an increasing influence upon improved home financing, building standards, and neighborhood planning. In S. 1592 this influence is potentially increased. This influence has served increasingly to orientate and direct the operations of private builders. Through this agency the Government has provided definite leadership in the private housing field.

There is increasing evidence that there is a large and growing market among Negroes and other minority groups for private builders. Through the FHA the Federal Government should be able to supply the leadership and influence necessary to bring this market and this interest together.

But FHA has prevented the Federal Government from fully assisting Negro citizens in meeting their housing needs. It does this by demanding as one of the bases of its guaranty the protection of racial restrictive covenants, by insisting upon the extension of these racial covenants into new areas and with the use of Federal funds and power, thereby requiring residential segregation.

All of this has been done not only without legislative authority but in plain violation of ministerial duty. The impropriety and illegality of this conduct is further emphasized by the fact that the FHA tends to crystallize and extend through Federal influence segregation of residence by race, which the Supreme Court itself has decided cannot be effected by municipal ordinance or State law.

In a letter addressed by former Commissioner Abner H. Ferguson to Senator Radcliffe on October 2, 1943, appearing in the Congressional Record for October 7, 1943, page 8250, the Commissioner of the Federal Housing Administration objected to the inclusion of a general nondiscrimination clause as an amendment to the National Housing Act. This letter claims that

the act does not permit such discrimination and that our rules, regulations, policies, and procedures are drawn and administered impartially and without the slightest discrimination against any group or individuals on account of race, color, or creed.

He reinforces this claim by stating:

We do not have one set of property standards and construction requirements for Negro housing and another for housing designed for white occupancy but insist that both meet the same standards and requirements in order to become eligible for FHA insurance.

If these protestations were true, we fail to see, in the first place, why the Commissioner would have any objection to the inclusion of the nondiscrimination clause. But closer examination of the policies and

procedures of ths administration reveals conclusively that it has discriminated grossly against Negroes in the operation of its program. The National Housing Act was basically implemented by the Underwriting Manual, issued by the Federal Housing Administration: The Manual described the techniques used by FHA to determine whether or not mortgages are eligible for insurance under title II of the National Housing Act. Eligibility is determined by risk rating. This process consists of an examination of mortgage risk and embraces evaluation.

In rating mortgage risks, the Manual lists Protection from Adverse Influences as one of the features to be rated in order to determine eligibility of loan:

Where little or no protection is provided from adverse influences, the valuator must not hesitate to make a reject rating of this feature.

This is contained in paragraph 932 of the Manual. It further defines

adverse influence

includes prevention of the infiltration of business and industrial uses, lower-class occupance, and inharmonious racial groups— which is found in paragraph 935.

The Manual further states:

If a neighborhood is to retain stability, it is necessary that properties shall continue to be occupied by the same social and racial classes.

Even greater emphasis is placed upon these considerations in the case of undeveloped or other sparsely developed areas. The valuator is warned that deed restrictions should include the following provision:

Prohibition of the occupance of properties except by the race for which they are intended.

That is found in the Manual under paragraph 980 (3), (g). FHA has also issued Outline of Protective Covenants containing the exact language of proposed racial restrictive covenants, as follows:

No person of any race other than the shall use or occupy any building or any lot, except that this covenant shall not prevent occupancy by domestic servants or a different race domiciled with an owner or tenant.

In a conference in Washington last May, attended by officials of the NHA and leaders of Negro and housing organizations, the secretary of the NAACP called to the attention of the Administrator of the National Housing Agency and the representatives of the FHA, the indictment of the Federal Housing Administration by Gunnar Myrdal in An American Dilemma and asked a direct question regarding FHA policy relative to the guaranteeing of loans for Negroes for developments outside of traditional Negro neighborhoods.

The response of the FHA representative was that this agency did not approve of loans on developments for occupancy by Negroes in what he called "white neighborhoods," or vice versa. He stated in effect that FHA was merely following "business practice."

This statement in Commissioner Ferguson's letter to Senator Radcliffe and the racial references in the Underwriting Manual add up conclusively to two inescapable conclusions: First, that the FHA, as a matter of policy, is using Government power to crystallize current residential segregation patterns, and more, guarantees the extension of such racial patterns of living; and, secondly, fosters the

spreading and acceptance of the fallacious conception that property values or deterioration is associated with race rather than economic factors. This fact of segregation becomes increasingly evident in light of the experience of public or private agencies seeking sites for housing developments. All open areas have become or are rapidly being considered as white areas, generally confining Negroes in the already overcrowded and congested neighborhoods. Such operations can only serve to tighten the walls of the Negro ghettos in American cities as though by Government edict, with the resultant baneful economic and social consequences.

One inevitable result of Government support to racially restricted housing, is discrimination against Negroes by preventing their bidding in an open housing market. Racial ghettos represent a housing monopoly with the result that the Negro generally pays a larger part of his income for shelter, pays more for what he gets, and is forced to live in accommodations where lack of competition does not require adequate maintenance. The result of this complex is the familiar rundown Negro neighborhoods. Generally, FHA either does not approve loans to Negroes in these run-down neighborhoods, or provides smaller guaranties after it practically helps to require them to live in those areas.

The FHA explains that their racial policies follow from local acceptance of the belief that occupancy of property by Negroes automatically produces "blight" and deterioration of property values. Instead of helping to reorientate the thinking based on this outmoded concept, FHA has been guilty of allowing its operations to be charged with supporting the misconception by withdrawal or decrease of loans on property in areas newly occupied by Negroes.

In addition to discriminating against Negroes as bidders in the housing market, these FHA operations actually serve to prevent the use of new and open areas to relieve congestion and provide for the normal expansion of Negroes. By its control of planning and its insistence upon racial restrictive covenants, FHA operations further oppose the present trend of judicial decisions regarding the invalidity of residential segregation.

With the courts moving in the direction of outlawing these undemocratic practices, we find the Federal Housing Administration moving inevitably in conflict with the law. Instead of using the funds and power of all the citizenry on the side of sound housing and social policies, FHA is rapidly moving into a reactionary and untenable position.

In the face of segregation and racial discrimination, the great hope of minority groups in a democracy is the fact that such segregation and discrimination are not Government policy.

As a result of continued protestations against these practices, the FHA claims that this manual has been withdrawn. However, there is no evidence that the practices and policies described in the manual have changed; certainly there have been no specific instructions issued to the personnel of the FHA to cease considering applicants on the basis of race or creed.

Minority groups in America find themselves in a dilemma. In the entire field of Federal aid to housing, we have become increasingly disturbed over the manner in which these aids have been administered.

Evaluating the history of Federal housing agencies over the last dozen years, we find an acceleration of intensive stratification of American communities along racial lines.

This development is contrary to the professed aims of the Administration that introduced the concept of governmental responsibility in the field of housing. These practices are followed under the deplorable theory of expediency. Neighborhood patterns which have been economically and racially mixed for years, have been undemocratically changed as a result of this doctrine of expediency.

This increasing stratification of American communities along racial lines, with the resultant racial ghettos, ultimately generates racial divisions and tensions. We are convinced that this type of administration is disruptive to the American way of life. We feel, therefore, that the time has come for Congress to include a specific mandate in the legislation, of its intention that these housing programs are to be administered in support of the democratic way of life.

We, therefore, recommend the inclusion under title 1, section 108, of the Wagner-Ellender-Taft bill, of specific instructions to the Administration to see to it that all Federal benefits and powers available under this act, be administered without regard to race, color, religion, or national origin.

In closing, we should like to commend Senators Wagner, Ellender, and Taft and their committees for the thoroughgoing approach in this bill. In behalf of the minority groups, we commend especially the recognition of their problems, as reflected in the priority provisions for families displaced by land assembly and slum clearance, the lapse payment and warranty provisions, and the programs for rural housing. These basic provisions are prerequisite for any sound housing program. Thank you.

Senator TAYLOR. Are there any questions of the witness?

You have presented a very fine statement, Mr. Weaver, and I want to say, speaking for myself, that I am heartily in agreement with the sentiments you have expressed, and I shall urge that the amendments suggested be included in the bill.

Mr. WEAVER. Thank you, sir.

Senator TAYLOR. Our next witness is Henry J. Andreas, representing the president of the Industrial Union of Marine and Shipbuilding Workers. Mr. Andreas.

STATEMENT OF HENRY J. ANDREAS, INDUSTRIAL UNION OF MARINE AND SHIPBUILDING WORKERS

Mr. ANDREAS. My name is Henry J. Andreas. I represent the Industrial Union of Marine and Shipbuilding Workers. Originally, Mr. John Green, president of our organization, was to appear before you. He is engaged in wage negotiations which he and he alone is capable of handling, and therefore, could not be present.

The bill before you represents to us, as industrial workers, a ray of light after a long journey of many years during which we groped vainly in search of a housing program which could meet the needs of families whose incomes were too low, or whose employment was not sufficiently secure, to warant home ownership under present FHA conditions, yet whose incomes were above the level which would permit

their participation in the low-rent housing program. But our interest in this bill is not limited to those provisions which would make it more practicable for us to undertake home ownership. Because of the fact that no single plan, either of home ownership or home rental, can possibly meet the varied needs of these industrial workers, our concern is with the entire housing program which this bill undertakes to

cover.

I would like to devote my comments to title 7 of the bill, with a few remarks concerning one provision in title 6 which covers the policies governing the relocation of slum occupants who need to be rehoused when slum clearance is undertaken, and a few statements concerning that part of title 4 which deals with mutual ownership housing. These matters are the ones with which my union is in closest contact, and which affect the greatest segment of our membership.

TITLE VII—AID TO LOCALITIES FOR LOW-RENT HOUSING

We note with some satisfaction that this title provides for a resumption and extension of the publicly assisted low-rent housing and slumclearance programs.

On the whole, with the few exceptions which I will point out, we feel that this title provides many of the needed improvements in the United States Housing Act of 1937 which were found, by practical operation of the projects during the past few years, to be essential.

In section 701 there is one provision which causes us the greatest amount of concern. It is the requirement that the local public agency prove that a gap of 20 percent has been left between the upper rental limits for admission to the proposed low-rent housing and the lowest rents at which private enterprise is providing a substantial supply of decent, safe, and sanitary housing.

While we know that this arrangement has been the administrative policy heretofore in the Federal Public Housing Authority, we feel that its adoption as a legislative requirement makes impossible the achievement of the long-sought-after and truly worth-while objective stated in the policy preamble of the bill

to realize as soon as feasible the goal of a decent home and suitable living environment for every American family.

We feel, that in attempting to provide adequate safeguards against alleged encroachment by public housing into the private enterprise field, the housing needs of a noteworthy segment of the population are being excluded from the consideration they deserve and require. We feel that the degree of discretion which has been exercised in the administration of the low-rent program in the past is an adequate guaranty that no conflict need result between public and private housing.

The "serious cumulative housing shortage" referred to in the policy preamble is of such dimensions that its remedy cannot be accomplished except by the combined, harmonious, and determined effort of all groups toward the goal.

Section 702 regarding veterans' preference in tenant selection for low-rent housing is in line with our established policies and practices with regard to veterans, and we wholeheartedly support the provisions laid down.