Mr. LAGUARDIA. Yes.

Senator ROBERTSON. Should we proceed on the theory that the Government or anybody else during the period of the next 45 years could get 2 percent money?

Mr. LAGUARDIA. Absolutely. That is the trend of the times. We are getting 2 percent money because it was 1945 and '46. It was not 1890.

Now, out in Arizona, when it was a pioneer country, they would get 10 and 25 percent interest, but that day is gone. That day will never come back. 6 percent interest is obsolete, Senator. It will never come back. The rental value of money unaccompanied by risk or effort is not what it used to be and it cannot be and that is the only way we are going to bring about anything like economic security in this country. It has got to come from that country.

Senator ROBERTSON. I wish I could share your optimism that we will never have capital dearer than 2 percent.

Mr. LAGUARDIA. Oh, yes, I am sure of that. I may be cockeyed in many of my other theories but I am all right on that one.

Senator ROBERTSON. Here is another matter I have been thinking about as you have given us this discussion.

You say this is a riskless loan when the Government guarantees repayment, I believe, up to 85 percent. Do you mean that there is no possibility, in case we should be so unfortunate as to have another depression, that nobody assumes any risk in guaranteeing mortgages on houses that are built in many instances at 100 percent more than they would have cost 6 or 7 years ago?

Mr. LAGUARDIA. The Government takes that risk.

Senator ROBERTSON. That is what I say. The Government takes the interest?

Mr. LAGUARDIA. Sure. But the Government is not getting the interest. The guys in my town are getting it.

Senator ROBERTSON. But the Government assumes the loss if the mortgage is defaulted.

Mr. LAGUARDIA. Exactly, but then insure the Government but do not give these fellows the benefits of the 4-percent interest because they are not taking the risk. That is my point.

Senator MCCARTHY. I would like to think you are right about the 2-percent money but I would like to point out that you can at the present time get Government bonds that pay 2% or 2% percent. Mr. LAGUARDIA. Yes.

Senator MCCARTHY. I wonder if in view of that if people would be willing to give money at 2 percent on this housing project.

Mr. LAGUARDIA. Let us make it at 2% or 2%. By all means I would not object to that.

Senator MCCARTHY. I would like to think you were right that we could get the money.

Senator BUCK. You would go up then to 2%1⁄2 then, Senator?
Mr. LAGUARDIA. Yes, sir; if it were necessary.

Senator BUCK. I think you could get it at 21⁄2 but I do not agree with you that we could get it at 2.

Mr. LAGUARDIA. All right, let us take the 22.

Now, with reference to the rental of houses to families of moderate income, of course that is entirely new, and that is a very fine provision and that I believe would make our country what we always hoped it

would be a country of home owners rather than of landlords and while with the limitations here provided, there could not be very much building in cities, still it is a very wholesome provision, and the 95-percent advantage I think is generous and very, very helpful. That will have to be very well administered and the administration of that will either make or break this novel provision of law, and that is what will demonstrate whether democracy works.

Senator ROBERTSON. May I ask you another question on that point, Mr. Mayor. You have mentioned to us the magnitude of this problem and the crisis with which we are confronted.

You will recall that some years ago your city was very much interested in a slum-clearance project that was sponsored by the then Secretary of the Interior, Mr. Ickes, and he wanted a $3,000,000,000 revolving fund to be limited to slum clearance only. It is my recol lection that we were told at that time that it would meet 10 percent of slum conditions. That is substantially correct, is it not? What percentage of slum conditions, which will get the major part of this aid, would be met by this program?

Mr. LAGUARDIA. This one?

Senator ROBERTSON. Yes.

Mr. LAGUARDJA. Well, you have one question here which I think is the planner's dream, or the answer to a planner's dream, and that is your redevelopment provision there.

Now, if you have intelligent planning and honest administration, that will do a great deal to eliminate all the slums of our country, because the terms there are equitable and they are generous. With proper city planning and you locate, say, a school in a given section, that in and of itself would provide the required contribution on the part of the municipality.

Then it could avail itself the grants-in-aid of this bill, and you take care of that whole section. We have been waiting for this for years. This will require intelligent planning or any public improvementa school or a park or a market or a courthouse, anything, would form the basis for the contribution, or the closing of streets, and I could use all the money that you could give me on this, if I was still running New York City, and talking about Harold Ickes, I got a good share of that money you know, and we have got something to show for it. You come and look at our low-rent houses sometime, Senator. will tell you they are good.

I

Senator ROBERTSON. Do I understand you to say that the matching provision of that bill last year was a 50-50 provision? Mr. LAGUARDIA.. I do not remember what that was. I say that under the provisions of this bill it would not be difficult for the municipalities to match-or to put in their requirements on any redevelopment project.

Senator ROBERTSON. You, as a former Member of the Congress, will recall that our traditional percentage has been 50-50 on grantsin-aid, and this bill now, as I understand, provides $2 to $1 of Federal aid.

Do you think that if we go in on this program with the war debt on the Nation, whereas most States have gotten out of debt during the war, that the Federal Government is now in a better position than it used to be to give matching funds on a more liberal basis than they have done in the past?

Mr. LAGUARDIA. I would for the municipalities. The municipalities suffered a great deal during the war and I do not think there is a municipality in this city that is flourishing in its financial situation at all. Some of the States have of course, but this is a good investment because it actually creates wealth, national wealth, and I would continue the provisions of the redevelopment title of this bill, oh, for the next 10 or 15 years at least.

Now, if I may dwell on the guaranteed yield, there too I think that that ought to be very helpful, but you must know that the present cost of construction will not give you very much on the guaranteed yield, and the present excess cost is about 25 percent.

In other words, when this thing does level off it will not level off more than 25 percent -the cost of construction--and I am sure you can loosen a great many many millions of dollars under your guaranteeyield title, if you will permit the writing off of amortization of 25 percent of the cost of constructions in tax deduction in 5 years, from the income from that particular project.

Do I make myself clear on that? The difficulty now is, on mortgage money and invested money, is this 25 percent excess which is abnormal and eventually will level off. Not in the immediate future, not tomorrow or the day after, and therefore in your guaranteed yield if you will give them a deductible amount of 25 percent of the cost of construction from income, corporate or personal income tax, during the first 5 years.

Senator ROBERTSON. Is not the present average about 5 percent a year for depreciation allowance on new construction?

Mr. LAGUARDIA. Yes. I would let them deduct 25 percent of the cost in 5 years and I think that that would loosen a great deal of money from the big institutions. Of course even at the best, those rooms would not be-they would rent in my city-they would not rent for less than $20 or $25 a month at present costs. Senator TAYLOR. Mr. Chairman.

The CHAIRMAN. Mr. Taylor.

Senator TAYLOR. Senator Taft told us that the insurance companies were not much interested in this yield-insurance provision, and that he, himself, Mr. Taft, did not care particularly whether it stayed in or not.

Mr. LAGUARDIA. Oh, do not take this out. Oh, do not take this out. Do not listen to those insurance people when they come down here and tell you those things. They have been telling me those things 12 years. When you come down to it, what are they going to do with their money-eat it-or do they want the Government to take over their companies?

Senator TAYLOR. I was just wondering if they felt that way about it and did not care whether they were going to build or not.

Mr. LAGUARDIA. They are just bluffing. Congress can make them loosen up so easy. You will have no trouble loosening up the big insurance companies. You can do it. They are around here more than we are around seeing them. Do not worry about that. Make them do it.

The CHAIRMAN. Mr. Mayor, I want to give you adequate time, but how much more time do you need?

Mr. LAGUARDIA. I am through.

The CHAIRMAN. Any questions of the mayor?

(No response.)

The CHAIRMAN. I, for one, want to thank you for coming.
Mr. LAGUARDIA. Thank you.

The CHAIRMAN. I am grateful to you.

Mr. LAGUARDIA. You have been very patient and tolerant.

The CHAIRMAN. Gentlemen of the committee, we have with us this morning Mr. Franklin Delano Roosevelt, Jr., to present his testimony on behalf of the American Veterans' Committee.

STATEMENT OF FRANKLIN DELANO ROOSEVELT, JR., CHAIRMAN OF THE AMERICAN VETERANS' COMMITTEE

The CHAIRMAN. Mr. Roosevelt.

Mr. ROOSEVELT. Thank you, Senator.

I would like to just in a preliminary way say that this is my first opportunity to appear before any committee of the Senate or House and I appreciate this opportunity, particularly because it is on a subject which is very dear to my heart, which I have been putting in a great deal of extra-curricular time and activity on since I have gotten out of the Navy.

I was particularly interested in listening to Mayor LaGuardia's statement that this bill must be passed, and very briefly I would like to endorse the statements which the senior Senator from Ohio, Senator Taft, made 2 days ago with respect to this bill.

I think the Federal Government does have a responsibility to the people of this country to see that they are decently and adequately housed. It is urgent, especially today, because of the predicament that our veterans find themselves in. We feel that this bill will go a long way toward relieving their problem.

Housing alone will not be the only result of passage of this bill. Our child delinquency, our crime, the very moral fiber of our people, especially the lower income group of our people, will be raised by the passage of this bill.

I think you all have copies of the statement. I would like to read it quickly, with emphasis on one or two points.

The AVC is an organization of close to 100,000 World War II veterans who have banded together in the belief that the first major problem of the veteran is his successful readjustment to civilian life. In the last year it has been increasingly apparent that the major obstacle to the veteran in making a satisfactory transition from the armed services to community life has been the acute and continuing housing crisis. The AVC is therefore intensely interested in the TaftEllender-Wagner bill which proposes a comprehensive national housing program.

I might say, with all due respect to Senator Wagner, I think that the change in the name of this bill will eliminate some of the humor that has been coming upon it in recent years.

The veteran is only part of our society, although today a very large part. Special veterans' benefits which are harmful to the rest of the Nation are, in the long run, harmful to the veteran. In passing, I might say, that at our last national convention, in backing up that

belief, the AVC voted two to one against a bonus, since it was predominantly a special privilege group interest which would be served. The long range housing bill being considered benefits all citizens and is especially valuable to veterans who have been most gravely affected by the housing shortage.

Veterans want and need housing desperately. They need housing to fit their limited incomes. Today it does not require extended investigation but merely a few conversations with veterans to dicover that they are not happy about the current housing picture. Veterans have been reasonable and patient in their housing demands. They have endured a multitude of extreme hardships in living in substandard housing make-shifts which have threatened their health and that of their families.

They have doubled up with in-laws under circumstances which have caused general unhappiness and in many cases broken homes.

But despite the patience and the fortitude of our veteran population no American can escape the conclusion that it is the Nation's duty to make a sincere and hard-hitting effort to face and solve the housing problem.

I think that most of you have probably seen this recent survey by the Bureau of the Census. It was issued on March 18. I would like to review one or two of the facts and to include it in the record if you have not already got it.

(The March 18 Bureau of the Census report is as follows:)

DEPARTMENT OF COMMERCE-BUREAU OF THE CENSUS

Population: HVet-No. 103

SUMMARY REPORT OF VETERANS' HOUSING SURVEYS MADE FROM JULY THROUGH SEPTEMBER 1946

The results of the Veterans' Housing Surveys made by the Bureau of the Censu between July and September 1946 were summarized today by Director J. C. Capt' Bureau of the Census. The surveys, requested by the National Housing Agency for the Veterans' Emergency Housing Program, were made in 70 selected cities. Individual reports have been issued for each of the surveys and are available on request.

Thirty-two additional Veterans' Housing Surveys are currently being made by the Bureau of the Census and seven are being made by the Bureau of Labor Statistics, Department of Labor. A report summarizing the results of these survevs will be published as soon as individual reports for the additional surveys have been released.

The Veterans' Housing Surveys are sample surveys covering a representative cross-section of all veterans in the localities surveved except those living in institutions and hotels. The information was collected by trained interviewers directly from the veteran or his wife, or in some cases from some other reliable member of his family.

The information presented in this summary consists of several items on the personal characteristics of the veterans and their housing intentions, and the present living arrangements of the married veterans.

DEFINITION OF TERMS

Employed.-A veteran is considered employed if he worked for pay or profit or had a job (but was not at work) during the week prior to the enumeration. In-migrant. An in-migrant veteran is one whose residence, prior to his entering the service, was outside the housing market area for the locality being surveyed. Weekly income.-The veteran's weekly income is his usual weekly income from all sources including overtime pay, commissions, dividends, and pensions. For