point out to you other reasons for our opposition not in the record up to this date.

Virtually every witness, both proponents and opponents of the Taft-EllenderWagner bill, have agreed that there is a housing shortage-without suggesting one of the prime factors causing the shortage-or recommending any means of overcoming it, except continued acceleration of building, either by private industry or by the Government.

It is our contention and we will give you some factual figures in support-that long term rent control has done more to create the housing shortage than any other single factor. Let me give you some striking facts. When any necessary commodity and rental housing is a commodity-is priced below its free market value, people will rush to buy it. With rentals less than 7 percent over the 1942 market value and with average wages and incomes of our rental population more than 100 percent over the 1942 level, rental housing space has become a cheap commodity in relation to earnings. Approximately 22 to 25 percent of the average income in 1942 was devoted to rent. Today rent absorbs only 9 to 14 cents of this average individual income. As income increased and rents remained just above the level of 1942 people desired and sought larger and better living accomodations. This desire for more space and better space continues today. In actual practice the property owner and tenant have become partners in contributing to this over-consumption of space per person as artificial rent levels encouraged property owners when vacancies occurred, to offer their rental units to the fewer possible persons. This was because a lesser number of tenants meant a lesser amount of operating expense and wear and tear on living units. The OPA and the Office of Housing Expediter has encouraged this wasteful use of housing space as these agencies with few exceptions have made higher rents for increased occupancy impossible. That is why from 1942 to 1946 the number of houses and apartments occupied by 1 person increased by approximately 800,000. In other words, approximately 800,000 living units, formerly occupied by 2 or more persons, became occupied by only 1 person. This was an increase of 30 percent. The number of living units occupied by only 2 persons during this period increased by approximately 1,900,000, an increase of 22 percent. Again, in other words, approximately 2,700,000 living units became occupied by only 1 or 2 persons instead of larger families. This underoccupancy trend was noted in all sizes and classes of living units. The latest survey denotes that this wasteful use of housing space continues. The housing is still there but it is not being used as it was intended. I live in a garden type apartment in Baltimore containing 211 units, designed for families of 2 to 5 people. Whenever one of these apartments is vacated by a family that apartment is rented to a single person. The particular unit in which I live contains eight apartments designed to accommodate families. When I moved into this apartment just before the war, all eight of these units were occupied by families of two to five people. Today six out of eight of these apartments are occupied by single girls. I mention this personal experience simply to point out to you that this condition is true country-wide.

There have been, according to the lastest report of the Bureau of Labor Statistics, 90,000 housing starts in April of this year, a larger figure than was contained in any 1 month last year except one. Even at this tremendous rate of production, how long will it take to overcome the loss in living space occasioned by occupancy of 800,000 self-contained living units by 1 person per unit? Remember this figure was 1940 to 1946 but the spreading out has continued since then and will continue so long as we have rent control which holds rent below its normal level in a free market.

We are opposed to the passage of S. 866 because we look upon it as another move to perpetuate a philosophy of Government dating back to NRA when the Government began to use emergencies to draw to Washington too much State government and home rule-drawn from the people from the States and from the local communities. We believe for instance that States and local communities can best do the job of properly housing its citizens if the incentive is not removed by the prospects of easy money from the Federal Government. As evidence of what they can and will do you will be shown a plan being carried out in my home city of Baltimore, Md., when the representatives of the National Association of Home Builders appears before this committee.

I said we are opposed to the passage of S. 866 and for the same reasons so eloquently pointed out to you by other witnesses representing the housing industry. There is, however, at least one part of the bill which would have our approval and support and I refer to title VIII of the bill. We believe that there

was only one reason this title was put in this omnibus bill and that was the hope of gaining the support of veterans' organization to the entire bill. We would like to see this title considered as a separate bill.

We believe that this bill, if passed in its present form, would lead us down the road to the complete socialization of housing which would be a major step toward eventual socialism. Socialized housing has been tried out in England and listen to the testimony of a great English thinker, Charles Morgan: "In England there is no incentive to bold undertakings. Today it is safer to be a bureaucrat than a maker and young men know it. Socialization is competition without prizes, boredom without hope, war without victory and statistics without end. It takes the heart out of young men, it is not only politically false but morally destructive."

Down through history every attempt to solve human problems through big government has produced the same unfortunate results. This looking to government as a source of all good, all leadership, all inspiration, is the very negation of the democratic principle.

Socialism and communism won't work-because Socialists and Communists won't work-the incentive is lacking. And so I say in all sincerity, accept the warning of Thomas Jefferson when he said "If there ever comes a time when we are directed from Washington when to sow and when to reap we will soon want bread."

The CHAIRMAN. I am not sure whether we will be able to meet tomorrow morning as the House will meet at 10 o'clock. If it is agreeable to the committee, we will try to get permission to sit during intervals during the day. We will not meet a 10 o'clock, but will meet at intervals during the day at the call of the Chair.

We will close these hearings tomorrow night, and we will go into Executive session on the bill on Thursday morning.

The committee will stand in recess until called.

(Whereupon, at 5:45 p. m., the committee recessed, to reconvene at the call of the Chair.)

The committee met at 3 p. m., the Honorable Jesse P. Wolcott, chairman, presiding.

Present: Messrs. Wolcott, Gamble, Smith, Kunkel, Talle, McMillen, Kilburn, Cole, Scott, Banta, Nicholson, Brown, Monroney, Folger, Hays, Riley, Buchanan, and Multer.

The CHAIRMAN. The committee will come to order.

We have as our first witness Congressman Pace. We are very happy to have you with us, Congressman Pace.

STATEMENT OF HON. STEPHEN PACE, A REPRESENTATIVE IN CONGRESS FROM THE THIRD DISTRICT OF GEORGIA

Mr. PACE. Mr. Chairman, gentlemen, I appreciate this opportunity to appear before the committee and I will be very brief. I should like to confine my remarks, Mr. Chairman, to the rural housing feature of the bill, title VII, I believe.

Mr. Chairman, I would like to ask the committee, in its study of the rural housing section, to consider the advisability of giving preference, under this title, to the family-size farm. As now drawn, the rural housing feature is available to the large operator, to the millionaire, and to any other farmer in the Nation. There is at this time, Mr. Chairman, a very decided movement throughout the country toward the increase of corporate and large commercial farming. I do not know of anything which would be more dangerous to the welfare of the Nation than for this trend to continue to the point where a good percentage of our farms are under corporate management or in large commercial operations, where the ordinary farmer would have no hope of being other than a farm worker.

It seems to me, Mr. Chairman, that this provision presents a golden opportunity to the Congress to do what the House Committee on Agriculture has been trying to do for a number of years-that is, to reduce tenancy throughout the Nation and increase the number of family-size farms. That can be done by adding language which would give a decided preference to the family-size farm.

Secondly, Mr. Chairman, we now have in operation two programs under tenant-purchase. . One is a direct Government loan, a hundred percent value. The other is an insured mortgage loan, quite similar, in most respects, to the city FHA loans.

I think it would be advisable for the committee to give consideration to typing in this rural-housing program with the tenant-purchase program.

As now drawn, title VII applies only to the owner of a farm. I would like to see it changed to apply also to the purchaser of a familysize farm, whereby, if the need arises, where a tenant or farm worker buys a family-size farm, he may, if the need exists, have the advantage of this title.

Mr. BROWN. Mr. Pace, this section speaks of decent sanitary dwellings.

Mr. PACE. Yes; but the construction is permitted only to an owner of a farm, although the dwelling may be for the benefit of a tenant on that farm.

Mr. BROWN. Of course, the purpose, Mr. Pace, is to get adequate housing for the people. If you furnish it to the farm owner and the tenant or sharecropper occupies it, the Government does not lose much. I do not like the way the farm provision is drawn and may be it can be improved. The owner of the farm cannot obtain the benefits if his needs can be supplied elsewhere. I think that is one of the safeguards of the farm section.

Mr. PACE. Let me give you this illustration, and I believe you will get a clearer understanding of what I refer to. Suppose a farm tenant in Georgia secures a farm under the tenant-purchase program. There is inadequate housing on the farm, let us say. The Farmers Home Administration is not able, under the law, to make him a loan adequate to put the housing in decent condition. Then it occurs to me that that man should have the benefit of this provision, just as much as his neighbor who happens to own a farm with substandard housing.

Mr. BROWN. Under the tenant-purchase program the Government helps the tenant select a farm with farm houses on it and generally the houses are in need of repairs and must be repaired before the land is purchased by the Government for the tenant. The program has been successful.

Mr. PACE. The program has been greatly successful, that is true. The record now is that of the 40-year loans, they have paid out on an average 17 years. But, again, I repeat, under this program, a purchaser of a new family-size farm, under the tenant-purchase program, does not have the benefit of this program, and it seems to me that he among all others is the one who should have the benefit of it.

Mr. BROWN. I think the tenant has been treated very well. The Government furnishes all the money to buy him a farm. And they will not buy a farm unless it has a livable house on it or one that can be made so. I have heard no complaints that the houses on the lands purchased by tenant farmers were not livable.

Mr. PACE. Of course, there are many instances where the Farmers Home Administration is not able to make a loan sufficiently great to put the houses into livable condition. He perhaps can put one house in livable condition.

Mr. BROWN. They not only buy the land for them, Mr. Pace, but they repair the houses for them, under this program.

Mr. PACE. You understand that only a percentage of the tenantpurchase loans are the 100 percent Government loans. The others are 90-percent-insured-mortgage loans identical with FHA loans.