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We recommend, therefore, that consideration be given to amending title II to permit to builders a firm commitment that will be 5 percent lower in respect to the appraised value than the commitment available to an owner occupant. In other words, in those cases where a 90-percent mortgage would be available to an owner occupant under title II, the builder should have an 85-percent firm commitment; where a combination 90- to 80-percent mortgage is available to an owner occupant, averaging let us say, 83 percent of the appraised value the builder should have a 78 percent firm commitment. This will require builders to back their judgment with a substantial amount of cash investment but will not be so burdensome as to preclude volume operations. To those who suggest that the amount involved is small, it must be remembered that multiplied by 50, 100, or 500 units it becomes very large.

Mr. TALLE. The committee is glad to have heard your statements, Mr. Brock, Mr. Lockwood, and Mr. Coogan. Do the members desire to ask some questions?

Mr. HAYS. Mr. Coogan, I believe you said something about farm housing.

Mr. COOGAN. No; that was Mr. Lockwood's department.

Mr. HAYS. I am sorry. He has gone?

Mr. COOGAN. Yes; he has.

Mr. HAYS. Thank you. That is all, Mr. Chairman.

Mr. TALLE. Congressman Gwinn.


Mr. GWINN. Mr. Chairman, I have quite an extended statement and I hesitate to take any more of your time than is necessary, so I will just give an outline and then leave the statement with you. This is the last day of the hearings, I believe?

Mr. TALLE. That is right. You may proceed.

Mr. GWINN. Mr. Chairman and members of the committee, some 3 or 4 years ago I started to make a study of public housing because I felt that public housing was clearly the best designed high road that could be chosen-that has been chosen in fact, in Europe to bring about socialization of our whole economy, and it is from that angle that I have studied both the American scene and the European scene, and have given the committee the benefit of that in a written statement which I will file with the committee.

In brief outline, the study shows this:

First, that there is no source of housing or food that is adequate to the people, except in a free society. Only the free societies do build houses and find food approaching adequacy. Slums are never cleared by public housing, but are always increased, wherever tried. That is true in every country in Europe, and it is true in our own country to the extent that we have gone.

The only period that we have, covered by public housing, as contrasted with private housing, as a slum clearance device, is in the period from 1920 to 1930, when we had the most free building of houses we have ever had in our history. The studies by the Chil

dren's Federation in New York, a public document, referred to in my statement, shows that slums in New York City were 70 percent vacant in what we have thought of as the roaring twenties. That is the time when the people moved out of the slums of Manhattan and Brooklyn, into Long Island, into the Bronx, into New Jersey, and that is true. very largely in the other cities of the country.

After the thirties, from 1933 to 1943, we had managed economy, first, with our currency, then with WPA, then with rent control, and the other elements which have slowed up and destroyed private building, and substituted Government management of our economy, and the very slums that were studied by the Children's Federation we find are filled up again.

The two are contrasted in that study, to which I would like to refer the committee.

Another fact which is startling is that the low-income group are not housed. The low-income group are thoroughly deceived. The greatest fraud that has been put upon the poor is the representation that they get the housing. The governments are toughest, roughest landlords we have. Not only do they not take in the poor, but they take in, instead, those who vote right, the party workers, and those who lend themselves to the political corruption which this public housing always ultimately sinks into without a single exception.

We are young, and not so corrupt yet. We are only on the way. But in the great cities like New York, Detroit, Cincinnati, some of the election districts vote as high as 92 percent for the party that builds the public housing.

Gentlemen, I make no distinction between Republicans building the houses or Democrats building the houses. The results are the same.

The tenants are selected by the agent who is a member of the party building the houses, for the most part. The tenants are voted in the very basements of the public-housing projects. So that they are easily observed, and easily threatened.

The road to socialism, though, is not through the exploitation of the poor or the dependent so much as it is the exploitation of capital. This is the slickest trick of the Marxians to take over capitalism that can be devised.

Just briefly, look at the summary of this bill, and see how capital is unable to resist the temptation to come over and get aboard.

In the first place, the Government issues certificates of participation in a Government investment; free from Federal income taxes. It represents, to the Wall Street man, or to the insurance company, or the private investor, that the municipality where the project is erected will also be free from taxation, except for token payments. In my city, the taxes on $1,650,000 project should be $65,000. That is, for schools, streets, lights, removal of ashes, garbage, and things of that sort. The Government pays a token payment towards these expenses of $3,000 a year, leaving a deficit of $62,000 for the taxpayers of that city to make up for the benefit of the tenants. The tenants' incomes run as high as $8,000 a year. Their rental is $34 a month. They are not the poor. They are the politically favored. They are the favored on the roll of the United States of America. What is more, the Government says to the investor, "You are not only free from income taxes, and your project, which is the security for your certificates, free from municipal taxation, but we will cover the deficit in operation,

and we will cover the interest and amortization on the investment by compulsory taxation of the people generally, so that you are sure to get your interest for 45 years under this bill, and your capital back, certainly to the extent of 90 percent.'

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If there is any device by which capital itself could be forced into participation with Government, the Government becoming the owner of the property responsible for the losses, than that, it is difficult to see. If there is any device by which the ordinary taxpayer can be exploited more readily for the temporary benefits of the capital group, it would be hard to find.

One more point or two. Our Government housing projects in this country, as well as in Europe, have been the most scandalous centers of propaganda. I want to read to you from one or two letters in that respect. That is, the tenants, or the housing projects, become a kind of pool for the breeding of those who contend for the Government being the source of housing. Always in the projects are little centers of Communists or Socialists, who agitate and organize the tenants, and keep them voting and propagandizing for more public housing and for lower rents, as well as other benefits.

Here is a perfect example, many of which can be found: A letter written by John Slagg, Jr., who signs himself as executive director, Housing Authority of the City of Tacoma, legislative committee member, National Public Housing Conference, and other organizations for the propagandizing of houses, writes this letter on the letterhead of the Housing Authority of the City of Tacoma, Washington, dated October 1945, as follows-this seems to have been addressed, among other persons, to those who had contracts for the building of these houses, and those who might hope to have contracts for the building of future public housing

He says:

Some time ago I wrote to you asking for a contribution in support of the National Public Housing Conference. The letter was written at a time when we were all very busy with war work and it might be that you have overlooked it.

I am taking the liberty of writing again now, because under the leadership of the National Public Housing Conference, postwar public housing program is rapidly assuming its final form and it is therefore urgently necessary to draw together the people in our region who want to participate in the program.

The omnibus housing bill sponsored by Senators Wagner and Ellender, providing for postwar housing developments on a large scale, both public and private, is now under consideration in the United States Senate. The material for the bill was prepared by the National Public Housing Conference—

they seem to have relieved the original Senators of the necessity of drawing that bill

and that is why I, as the northwest regional committee member of the conference, ask you now for your support.

The postwar program of the 32 housing authorities in this region will be affected

and so on.

Contributions in support of the conference have already been reecived from a number of firms which constructed the Nation's public housing. Those firms whose total contracts were less than $500,000 gave from $250 to $500, while those whose contracts were more than $500,000 made a $500 contribution. These contributions are deductible for income tax purposes.

A copy of the program of the National Public Housing Conference is enclosed. JOHN SLAGG, Jr.,

Executive Director, Housing Authority of the City of Tacoma; Legisla tice Committee Member, National Public Housing Conference.

Mr. Chairman, it is not possible to overemphasize the inevitable corruption that comes in these programs. It is in the nature of things that this sort of thing becomes patronage, and becomes downright counting of the votes as I indicated.

Here is one more, which I would like to take just a moment to read, in part. This is a letter from David L. Creuth, cochairman, Housing. Legislation Information Service, for a time General Counsel of the National Housing Administration, and for a time Acting Commissioner of the Public Housing Administration.

This letter is headed:


WASHINGTON, D. C., May 24, 1947.

DEAR FELLOW HOUSER: Now is the time for all good men and women to come to the aid of the program. Forty-three national organizations are cooperating in the Housing Legislative Service by supplying blow-by-blow information about the congressional prospects of pending legislation on housing.

These organizations are being invited to sponsor a national demonstration to urge the passage of the Taft-Ellender-Wagner Bill, S. 866, by the Senate, before the July adjournment. Fight for housing today. To do this, June 25 is being designated as the National Fight for Housing Day. Meetings will be held in different parts of the country simultaneously—

and so forth and so on.

Radio programs, releases, speeches, and all that, is provided, and this, gentlemen, is apparently a letter to the employees of the public housing governmental agencies.

Because you have seen what housing is, why it is needed, and what it can do for our people, and you are invited to make your support tangible and effective. Some funds have been pledged on condition

and so on.

That is you.

Additional money is raised from other sources. What to do? If you want a national housing policy and a national housing program, use the enclosed envelope

and so forth. Signed by David L. Creuth, cochairman, Housing Legislative Information Service.

As far as I know, neither the House nor the Senate has made any study of public housing abroad. It has been going on there for 25 years. There is a juicy story in every city in every country, and there is disaster everywhere. Political corruption in England is unbelievable, growing out of public housing. The member running for Parliament found the public housing tenants all organized. When he was elected, the next time he ran, he found the issue was as proposed by the organization of public housing tenants, "Who will promise to do the best job and get from the Commons the greatest appropriations for repainting and repapering and refurbishing the blasted public houses," which were being depreciated pretty badly. And, believe it or not, the next year, the issue was, "What member for Parliament would outbid the other to re-landscape, and to further beautify the place" so that the thing went on and on without end.

In Vienna we found one of the most interesting stories. When the Nazis moved into Vienna they found those great public houses that had been preached to us for nearly two generations as an example of what a forward nation should do for the poor. They found Englehoff, Marxhoff, and all the rest of them, rows and rows. You have seen them if you have been in Vienna.

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They looked around one night to see who were the Socialists and where they might find them, and low and behold they found the public houses filled with the party and the party workers. They turned their artillery on those rows of houses and disposed of the opposition Socialist Party in one night.

Before we go into that madness called public housing, or the action of the compulsory state, using exactly the same tactics of authoritarian compulsion that you would use if you were doing this in Berlin or London or Moscow, making some build houses for others, and using those houses built for the strengthening of the party, before we do that, Mr. Chairman, I beg of you that we decide which party will move into the houses, and which will use the artillery.

Mr. NICHOLSON. Mr. Chairman, I would like to ask a question.
Mr. TALLE. Mr. Nicholson.

Mr. NICHOLSON. I would like to ask you to elaborate a little bit on that proposition of the 58 towns that I represent having to build a house for somebody else. Would you be willing to do it?

Mr. GWINN. How is that?

Mr. NICHOLSON. The 58 towns that I represent, the people living in the 58 towns that I represent have to build houses for somebody else. I would like to have you elaborate on that.

Mr. GWINN. I would recommend to your towns in Massachusetts that they provide what they have provided for sixteen-odd years, the services of a free people, to build those houses. The only way they have ever been built in the world is that, for the poor, especially.

Mr. NICHOLSON. Would you not say 300 percent, Mr. Gwinn? Mr. GWINN. Well, yes; I would. The fact that they built them for 150 years before the Revolution, in a comparatively free society, led them to the belief that the free society was the best way in the future.

Mr. NICHOLSON. And under this bill, they will hire architects and build a house. Under this bill, also, the Department of Agriculture will have the right to hire architects and engineers and run the farmers house and all that. I do not know whether you know that part of the bill or not, but

Mr. GWINN. All those people to whom you refer become exposed to the pressure of patronage, become dependent upon patronage, just as any other Government employee, and they look to Government instead of to the free society.

Mr. TALLE. Thank you for your statement, Congressman Gwinn. I understand you have some supplementary material?

Mr. GWINN. I will hand this material in.

Mr. TALLE. Without objection, it may be included in the record. (Information referred to is as follows:)

Mr. GWINN. Mr. Chairman and gentlemen of the committee, I rise again in favor of freedom as the source of housing for the low-income group and in unqualified opposition to the Taft-Ellender-Wagner public housing bill which forsakes freedom and resorts to the compulsions of the authoritarian governments of Europe to house the people. I propose to show that such so-called public housing schemes are fraudulent in their promises to the poor and ruinous to our free economy that alone can build houses and cure society of its slums. Besides, government housing brings political party corruption by the exchange of tenants votes for low rents. It leads in the nature of things to Government bribery of investors and must lead, as the sad experience of a lost Europe now proves, to a firmly entrenched state of socialism, totally contradictory to everything which we think of as American freedom and American self-government.

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