That brings the payments, monthly payments for the housing units, which are to be constructed for the members thereof, to the range from $63 to $85 a month and the 20,000,000 families whose incomes fall between $2,000 and $5,000 cannot afford to pay those charges to solve their housing problems.

What this bill would do by lowering the interest rate and extending the amortization period would be to reduce that item for the average $10,000 house, the item would be approximately $55. According to the chart Mr. Green introduced in his testimony, a mere matter of arithmetic, that item on principal and interest would be reduced to $26.70 a month and the reduction in monthly cost of $24 a month, just on the principal and interest amortization, would make it possible for the great bulk of the middle class, 90 percent of the workers of this country, to begin to solve their housing problem.

We all know the remarkable job this committee did in securing passage of the public housing bill, but I call the committee's attention to the article in the current Collier's magazine, entitled "Our Shameful Record in Veterans' Housing," to illustrate the growing intensity of this problem for those who can afford to pay their own way. For those veterans who have been able to secure employment and secure sufficient income that under normal circumstances they could solve their housing problem, we have today, as Collier's recites it, a shameful record.

Mr. MULTER. What is the date of that issue?

Mr. GOODMAN. I would like to pass that up, if I may.

When we were before this committee in connection with the extension of rent control, we pointed out to the committee that the most dire need would exist if controls failed to continue for those who were on welfare, those who received pensions, and those who were at the bottom of the economic ladder in this country. We have had some recent evidence that our testimony to you at that time was accurate. Using the experience of the largest city which has been decontrolled under the local option section, I would like to pass to the members a tabulation showing name and address and the rent increase which has taken place for individuals, for families. Four hundred and fifty of them have been tabulated in Dallas, Tex., since controls were taken off by action of the city council on July 1. I would like to call your attention to the first listing, W. F. Moore, at 1407 Cockerel Street, whose rent was increased from $13.50 to $30 a month. That might seem to be a small item, but note the situation there-that this is an elderly couple living on old-age State pension. That increase of 300 percent in rent, I believe, literally will take food out of the mouths of this elderly couple. As we stated to you here, the solution to the rentcontrol problem is an adequate housing program. The Congress has done a remarkable job in the passage of H. R. 409, which will meet the needs of these people at the bottom. We hope the administration will aggressively use the powers granted unto it and produce the housing at the level that Congress permitted-up to 200,000 in any one

year.

Mr. BUCHANAN. Do you feel that lifting rent control next June 30, 1950 that that incident alone will further accentuate the housing problem?

Mr. GOODMAN. I am sure that it will be impossible to lift the controls without creating the kind of chaos that will come-that has come

in Dallas, Tex.-next June, unless we take a more aggressive rule in meeting the housing needs, and conversely, as you stated, if rent controls were lifted, the housing needs for the middle class particularly would be substantially intensified.

This program is not a new one, nor is it one that we alone are seeking to solve. I was interested in the testimony of Mr. Snyder, representing the National Association of Real Estate Boards, who appeared here against direct Government lending.

I think it only fair to state that when we appeared here before this committee on H. R. 409, we discussed the role of the National Association of Real Estate Boards, which at that time was veering toward support of this kind of legislation.

I have a copy of hearings held before this committee, if any of the members care to see it, in which we included communications from Herbert Nelson in favor of the concepts involved in title III. I was surprised to hear Mr. Snyder disavow that communication, particularly since immediately preceding that letter there is here in the record a communication and press release from Walter S. Schmidt, Cincinnati realtor and chairman of the Committee on Public Housing, announcing the same support for the identical principles that are in title III.

It would not be inappropriate to advise this committee either, that the organizations which have been sponsoring this legislation, the veterans, labor, and religious groups, have had a series of meetings with the National Association of Real Estate Boards committee on cooperative housing and have found wide areas of agreement, and in spite of Mr. Snyder's statement here today I have on the letterhead of the National Association of Real Estate Boards their conclusions as to the discussions that were held at those meetings, and if any member cares to see them, I will be glad to pass them around, showing the area of agreement, both on the direct lending and on the need for low-rent rates and on the need for a separate agency that would make it possible to expand this program which has been going along at a much smaller scale through direct union and veteran efforts and through the efforts under Public Law 901, under the provisions of Public Law 901, that this Congress passed last year.

Why is this bill needed? Why are direct loans needed? I think the answer to that question is the same that provided for the original enactment of the Rural Electrification Act. Farmers in need of electrical service on their farms were not in position to get that service until the Government made available to them long-term loans at low rates of interest. I am sure Congressman Cole will understand the deep need that the farmers had for that service out in the rural areas of this country, the need not only for electric service, but telephone service and similar programs required the Government to set up a program of financing over long term at low rates of interest, the particular financial needs of the rural areas.

I noticed just yesterday that many areas hit by the drought and in need of improved weather conditions for the benefit of their crops are in condition to become known as distress areas, and these disaster areas are then subject, under the existing Federal law, to disaster loans at low rates of interest, and so we say those families in the cities and those families in areas where large numbers of workers congregate in their factories or urban areas generally, who have been struck by

the disaster of being unable to meet their home needs, should be given this advantage as a group; of having available to them this direct loan at the going rate plus a sufficient sum to pay its own administrative cost, so that without any subsidy being involved these groups of people can begin to take action to meet their needs. This is a nonsubsidized, nongovernmental program that will help people to help themselves. That is the reason we so strongly feel that this Congress will fail to meet the needs of America's forgotten families, unless it includes title III in the legislation which you have pending here before you and the wide support that you have in the Congress, among members of all political groups and of all political factions, indicates that if this committee reports out such a title, it will receive the favorable action that we hope and expect. I am sure that it will be encouraging to this committee to know that just yesterday the subcommittee on the Senate side reported out these identical provisions. Before we close, I would like to say one brief word in support of an amendment in title II for the mutual home ownership groups who have not yet been able to complete their purchase of their projects.

In the early days of the defense period, the Federal Government built for sale to these identical kinds of groups that we are talking about in title III, projects that were needed quickly in connection with the expansion of the defense program, and so you had Audubon and Winfield-Clark in New Jersey, Pennypack in Philadelphia, Walnut Grove in South Bend, Greenmond in Dayton, Ohio, and one or two other locations, the construction of projects which were to be purchased for mutual ownership under terms agreed upon between the Government and the organization of tenants therein. The Government has been slow in permitting the completion of many of these groups and they now find themselves potentially subject to section C on page 52 of the bill, to the identical terms that other disposition would take place under, but quite dissimilar to those sister projects that have already had their sales completed. I believe it would be only fairness and equity that the completion of the sale of these particular projects be under the same terms as those for whom the negotiations have already been completed.

One last item. The CIO, at its last convention last November, supported the concept of direct loans to GI's for those who are unable to secure loans in the mortgage market at the going rate of 4 percent. We hope the mortgage market will make possible the granting of GI home loans at the 4 percent rate. We feel that the raising of the interest rate at this time for GI loans would be in direct reverse of the trend and the obligations and the commitments that were made to veterans when the GI bill was passed and so we strongly oppose the raising of that interest rate.

Nevertheless, if the veteran is then faced with the position where he cannot secure his mortgage paper, the only fair obligation to the Government would be to set up a mechanism of making those loans directly. Many commercial corporations are now securing mortgage bonds at much lower rates of interest. There is not any truth, in our opinion, to the allegation that the money, mortgage money, is going off to a higher interest rate. I believe, rather, instead, that there is a strike of the mortgage bankers against the granting of GI loans at 4 percent in the hope and expectation that they will get 41⁄2 percent.

The State of Massachusetts recently completed a veterans' housing program, under which they are building some 20,000 units under a grant of $200,000,000 worth of credit, guaranteed credit, from the State. Those units are being built by the local public housing authorities. They went out and secured their mortgage money at 0.8 percent, less than 1 percent.

The State of Connecticut has recently passed a new Veterans' Housing Act, Public Act 299 of the State of Connecticut, and they find that in their mortgage financing they are able to get mortgage money at approximately 1 percent and they provide for the construction of veterans' housing under direct loans at 2 percent. They provide for sale housing, directly to veterans, at one-half of 1 percent above the State credit interest rate. So we believe that the provisions of this bill relating to direct loans to GI's should be adopted and the veteran be given every encouragement to seek an individual solution to his housing problem. You have heard from many of the veterans' organizations. We have worked jointly with them on title III for those who are anxious and willing to secure the advantages of mutual action, but for those who prefer individual action, we hope you will approve the sections of the bill relating to direct loans to GI's.

Mr. EDELMAN. May I amplify one point that Mr. Goodman made? It is on the question as to why-to drive home, as it were, the point of the necessity for direct loans. Let me illustrate the point by relating an experience of my own. In this Front Royal project, which my union undertook, we undertook this job at a time when the greatest acceleration of increased prices was taking place. During the course of construction, it became necessary for us to increase the price which we had originally set on these projects. It was the common experience of the industry at that time. The bank that loaned us the money came to us and said, "We will increase the amount of your mortgage on these houses, with the prices going up, but we insist that you amend your contract with the individual members who are purchasing the homes to this effect: We have provided, as all nonprofits and mutuals provide, that if the individual wishes to sell he must turn the property back to the corporation or the cooperative, whatever the case may be, so that speculation does not occur, so that the individual, himself, does not make money out of this proposition." We were obliged to amend our contract to the individuals. The result of it was, Mr. Chairman, that four people—and I am unhappy to say that they were our own union members, as it happenedactually made, by speculative resale, from $2,000 to $4,000 apiece. It was an experience which was a shock to us, but which must be provided against.

Now, Mr. Chairman, the auto workers in Detroit are all ready and set to go on a project. They have profited by the experience of some of the rest of us and have so set up their corporation that this type of speculation could not occur. The bankers have been tremendously enthusiastic about the job all the way through, but suddenly they come up against this condition-no speculative resale— and they are clamping down and saying, "No money, you make it possible for these individuals to engage in this profit-making business." Mr. Chairman, that is clearly the line which the money market will take unless there is an opportunity for nonprofit groups to avail

themselves of cheap credit directly from the Government. Our feeling is that the mere fact that the Government is authorized to make direct loans will create a situation whereby private industry will supply it on the terms. I think that you will not find that direct loans will make any extensive commitment on the Government, but what private industry will rush in and take advantage of it.

One private request for consideration of this committee, is for a minor revision in title III as prepared. I am speaking particularly now of my own union and the condition is one which Congressman Brown, I think, will recognize readily: The Textile Workers Unionand I am sure this is true of other unions that are situated similarly— is confronted at the present time with this peculiar situation: Wherever we organize in the South or succeed in getting wages to a fairly advanced stage, we are confronted, the employers virtually require our members, their employees, to purchase company housing. That is to say, they come to us and say, "We are just simply going to dump these houses which have been built by the mills and rented by the workers, rented to the workers by the company, you are going to have to buy it and if you do not buy, we will just sell it out from under you."

We just had two situations where we were confronted with that type of situation. Incidently, even Mr. Denham of the Board has laid down the line that it is a bargainable issue on the part of the union to be able to insist on being able to negotiate for their members for this sale. We are in favor of our members' achieving home ownership. On the other hand, we have been confronted with this problem. Most of these houses, as Congressman Brown will recognize, in many of these areas, cannot get FHA insured mortgages. They do not have the sanitary facilities of the streets, and so forth. Mr. Brown can picture a dozen situations of that kind in and around his own district and consequently, we have to go out and seek financing from private sources. Up to now, or in many cases, it has been completely impossible to get private financing on any kind of reasonable terms for such sales. We simply wish a few words to be inserted in this act to make it possible for groups such as ours, confronted with problems of that kind, so that we could organize ourselves to organize these workers into a nonprofit-to go to negotiate collectively with their employers for the sale of the project, and in the event that private financing at minimum cost is not attainable, that we may become eligible for title III. At the present time, this situation was not apparently anticipated, that it was for the building of new projects. We would like to see it possible that in these few cases where existing housing could be bought, that we might take advantage of the direct loan feature of title III. We are just requesting consideration of that point.

Mr. MITCHELL. Would that be adequate housing?

Mr. EDELMAN. In some cases, Congressman Mitchell, the housing could be readily rehabilitated. In some instances, we would recommend that the workers not buy the stuff, because it is so shabby and flimsy, but in many instances, the superstructure is still adequate and by adding concrete pillars underneath, by installing sanitation, modern plumbing, and so forth, putting streets and pavements in, they can be made perfectly adequate living conditions, which would meet an emergency situation for a period of years until new construction can