Mr. EGAN. The responsibility of the Federal Government to supply its citizens with housing facilities? Mr. BUFFETT. Yes. Mr. EGAN. Well, I certainly think it has an interest in its citizenry. I think it is pursuant to that interest that the Federal Government is making an effort in that direction by insuring mortgage loans. Mr. BUFFETT. Well, in insuring loans it is facilitating the borrowing of money; but I am specifically interested in that question, whether the Federal Government would have the responsibility to a citizen to see that he has a house in which to live. Is that the theory on which this public housing is predicated? Mr. EGAN. I presume it is, Congressman, assumed that the Federal Government has an interest in seeing that every family has a home of minimum decent standards. Mr. BUFFETT. That leads me to the next question. I have not been able to find an answer to it. Does the Federal Government have a responsibility to provide housing at location-to provide me housing in this country at a location on which I decide-say, California? If I go out there, does the Government have the responsibility to see to it that there is housing there for me? Mr. EGAN. Are you talking about any housing at all? Mr. EGAN. Where you are domiciled does not make too much difference, does it? If the Government has any responsibility at all, it should not rest on where you are domiciled. Mr. BUFFETT. If the Government has the responsibility to house me in New York City, let us say, and I decide to go to Chicago, does the Government have a further responsibility to see that there is housing for me in Chicago? Mr. EGAN. It depends upon what type of housing you are looking for. Mr. BUFFETT. I am trying to run this thing down to its ultimate conclusion. It is my own impression-I do not offer it as a conclusion-that if the Government is responsible for housing me as an individual, eventually it is going to be able to say where I should be housed. I do not see how it could be otherwise. If the Federal Government is assuming the responsibility for furnishing me satisfactory housing, then certainly the Federal Government cannot assume the responsibility of furnishing housing to everyone in America at the place where he might like to live. For instance, I might decide to go to Texas next month. When I get down there, and I am looking for housing, and I say to the Government, "I cannot find a place to live. This is not fair; I have got to have a house." If the idea that the Government is responsible is the original premise of this public-housing feature, how do you shut that off? Mr. EGAN. I do not see how the Government could ever take the attitude that they could tell you where to live. I do not think we are quite to that police state in this country. Mr. BUFFETT. If I am going to be responsible for a person's welfare, is it not inherent that I have a measure of control over that person? Mr. EGAN. The Government, it seems to me, has responsibility to its citizens in general, and I think is interested in the welfare of its citi zens. Now, to what degree, is something as to which the Congress should make the determination. Mr. BUFFETT. You surely do not feel that there is any detached entity, here, which is interested in the people's welfare? The Government, as you speak of it, is simply the ruling politicians who are interested in their own job and their own continuance in office. I mean they certainly are not thinking of the welfare of the people ahead of their own future, are they? Mr. EGAN. I think they are, yes, sir. Mr. BUFFETT. I wish I could believe that. Mr. BOGGS. Mr. Chairman. Mr. TALLE. Mr. Chairman. The CHAIRMAN. Mr. Talle. Mr. TALLE. It was argued a moment ago, by the gentleman from Louisiana, Mr. Boggs, that cities can save money by spending for slum clearance. I think his argument is valid. That means benefit to the city, does it not? Mr. EGAN. It certainly does. Mr. TALLE. Would it not then be proper to say that inasmuch as the city gets the benefit, the city should bear the cost of bringing about those benefits? Mr. EGAN. Well, indirectly it seems to me that the city is bearing some of the cost through other taxation. Mr. TALLE. Is it not proper that the city should do its own slum clearing? Mr. EGAN. Congressman, if they could do it, I think they would have done it long ago. Mr. TALLE. That raises a problem in finance that has amazed me for so long. The States say they cannot do certain things, and the cities say they cannot do certain things. It seems to me that these individual municipalities, subdivisions, or States, are all so poor that they cannot do these things for themselves. But somehow, by the magic of combining together, everybody can get everything. It is just like 10 people not having enough for a meal, as far as each individual is concerned, but by emptying their pockets and looking at the thing as a whole, they all have a good dinner. The CHAIRMAN. Is not the reason, Mr. Egan, why cities sometimes think that they cannot finance their own slum clearance and low rental project programs because of State debt limitations? Mr. EGAN. That is correct, Mr. Chairman. The CHAIRMAN. That is a local matter, is it not? If a State or a municipality has some restrictions, has so restricted itself that it cannot exercise its sovereign power, then perhaps the fault lies in their own action and not in correcting that situation by coming to the Federal Government. Mr. TALLE. Mr. Chairman, may I prove your statement by a letter I received today? There is a little town, which says it is not permitted by law to bond itself beyond a certain point, and the improvements to be carried out would cost more than the law allows. I was invited to find out about Federal money, what Federal funds there might be lying around loose to ship in to take care of this situation. The CHAIRMAN. Many of the States have restricted themselves so much under their own legislation that they cannot operate their schools. So they find it advisable to come to the Federal Government to get the money with which to operate their schools, the reason given being that they have passed laws themselves which restrict them in such a manner that they cannot exercise their sovereign powers under their own constitutions. Mr. EGAN. That is correct. The CHAIRMAN. I do not know how reaching that is going to be. I thought that we had better have that question before us in this discussion. If it becomes only a question of debt limitation in those cities, then, of course, it should be the obligation of the State to put the cities in such a position that they could do the job which must be done in those cities. All a city or State has to do to get Federal help under those conditions is to furnish further restrictions, further restrict itself in its functions, further destroy the machinery under the sovereignty of the State as maintained, and then, of course, we will have concentration of control, concentration of Government, and collective Government, and socialism. It seems to me the States have done a very dangerous thing in many particulars in so restricting their activities that they have to come to the Federal Government to get assistance. There is a very basic fundamental problem here which might involve the sovereignty of our several States. Mr. EGAN. Not only in housing, Mr. Chairman, but in other fields as well. The CHAIRMAN. Yes, sir: in any other fields. Mr. BOGGS. Mr. Chairman. The CHAIRMAN. Mr. Boggs. Mr. BOGGS. If the theory that the Government has no interest in housing problems is followed to its ultimate conclusion, then we would abolish the Federal Housing Administration, the Federal Home Owners Loan Corporation, and all of the others which are very beneficial, in my opinion, although many members might disagree with me, highly beneficial institutions which we have created to promote the construction of homes through private enterprise, is that not so? Mr. EGAN. That is correct. Mr. BOGGS. Is it not also true that if the economic position eases, as was referred to this morning, if that should occur, would there not be as much loss on Federal Housing Administration insurance as through any other Government program? The CHAIRMAN. Perhaps you should not put it so broadly. Mr. BOGGS. I mean to say, "any other Government program." So if we are to face the housing problem squarely, both in the field of private enterprise, and in the limited field where Government can operate, we have got to realize that there is a certain risk involved, is that not so? Mr. EGAN. That is right. Mr. BROWN. You might give as an illustration, the Home Owners Loan Corporation. Mr. BOGGS. Exactly. I am glad you mentioned the Home Owners Loan Corporation because I meant to mention that as one of the Government corporations which had demonstrated the interest of the Government in the housing industry, and which, as I understand it, was liquidated with a profit, is that correct? Mr. BROWN. That is right. 75674-48 -27 Mr. BUFFETT. There is one factor perhaps in the situation now which did not exist at the time some of these other Government interventions in the housing field took place, and that is the proposition that the Federal debt is so large and so burdensome that the Federal Reserve Bank is compelled to rig the market on Government bonds. Do you think that has been given full weight in this question? Mr. BOGGS. I think the Federal debt is certainly something that is very vital to the economy of this country. That is one reason I cannot forget this tax reduction bill we had up here. Mr. SMITH. Will you yield, Mr. Boggs? Mr. BOGGS. Surely. Mr. SMITH. Do you think the Federal debt is a good thing? Mr. BOGGS. I certainly do not, but I believe we can blame that principally on a fellow named Hitler and possibly upon some of our own short-sighted economic policies. But that is another argument. So, Mr. Egan, you would say that there is an interest on the part of the Government, which has been exercised, certainly since the enactment of Home Owners Loan Corporation, in the housing bill? Mr. EGAN. There is no question about it. Mr. BOGGS. To your knowledge, except for the public housing features, the vast majority of the builders, contractors, and so forth have wholeheartedly supported the Federal Housing program, have they not? Mr. EGAN. That is correct. Mr. BOGGS. In my opinion it is one of the finest things that we have ever done in this country. I think too it is unfortuante that we are attacking the Federal Housing Administration in some of the arguments we have had here today, and I am glad to see that in the testimony we have heard, that the builders have come forward and have said that if we did away with the Federal Housing Administration program, about one-third of the homes, or more, that we have constructed in this country this year would not have been built. So the interest of the Government has been established over a period of time. After all, I have considerably more faith in the Congress than my good friend from Nebraska, Mr. Buffett, has. The Congress is expressing the will of the people, and the people who have supported this program, I believe, are pretty substantial people. I think it is rather difficult to label Senator Taft, or Senator Brooks, or Senator Donnell of Missouri, as radicals of any type of description. That is all, Mr. Chairman. The CHAIRMAN. Are there further questions? (No response.) Mr. Egan, we wish to thank you for the contribution you have made to these hearings, and I presume you will be available further if the committee desires you to come before it? Mr. EGAN. I will. The CHAIRMAN. I promised the committee when it convened, some time after 2 o'clock, that we would adjourn this afternoon meeting at 4 o'clock and we still propose to do so. Mr. Bland, I doubt whether we should proceed with the Veterans' Administration witnesses this afternoon. If it is agreeable, we will begin with the Veterans' Administration witnesses on Monday morning, and if it is at all possible, and if they care to do it, we can proceed with Mr. Kaufman. Mr. Kaufman is chairman of the Norfolk Redevelopment and Housing Authority. We will proceed as far as we can until 4 o'clock. STATEMENT OF CHARLES L. KAUFMAN, CHAIRMAN, NORFOLK REDEVELOPMENT AND HOUSING AUTHORITY Mr. KAUFMAN. My name is Charles L. Kaufman. I am a attorney in Norfolk, Va. practicing I am chairman of the Norfolk Redevelopment Housing Authority. I appreciate the opportunity of appearing before you today. Realizing that there are others who wish to speak, my remarks will be brief. Although what I say represents only my own opinion and that of the Norfolk Authority, I venture the statement that the conditions which exist in Norfolk are not substantially different from those which obtain in many other American cities, and that the enactment of S. 866 would be equally helpful and beneficial to those other cities. We are in favor of the entire bill because we believe strongly in the necessity for a comprehensive national housing program, but I would like to invite your attention particularly to two titles of the bill-title V, on urban development and title VI on urban low-rent housing. Those two titles are both independent and interdependent at the same time. Independent in that the slum clearance program is not to be confused with a public housing program. Interdependent in that a slum clearance program, which is not accompanied by a lowrent housing program, is impossible. I do not believe that I am divulging any secret when I say that most of the people who are opposed to the Taft-Ellender-Wagner bill base their opposition largely, if not exclusively, on its public-housing provisions. The various arguments which have been mustered against this program fall, broadly speaking, in two categories: (1) Those which are based upon the fear that public housing will be competitive with private enterprise, and (2) Those which are based upon the claim that it is undemocratic or communistic. Let me make one thing perfectly clear. Public housing does provide competition of the most direct and devastating sort with that class of privately owned housing units which, because of their age, their lack of facilities and their condition, have long since passed their useful life and have no right whatsoever to exist. But when I have said this, I have said all that can be fairly said about competition, for the bill now before you contains every necessary safeguard against any other type of competition. The section requiring the local governing body's approval of each public-housing project, the provision requiring a finding that there is a need for low-rent housing not being met by private enterprise, and the so-called 20 percent gap provision, all these are calculated to give every necessary protection to our private enterprise system. The argument that such a program is communistic or socialistic is one that has been repeatedly heard. The same arguments have been heard in the past against other programs which today enjoy ready and complete acceptance. Some cogent and convincing answers to |