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FRIDAY, MAY 14, 1948



Washington, D. C.

The committee reconvened at 10 o'clock a. m., pursuant to adjournment, the Hon. Jesse P. Wolcott, chairman, presiding.

Present: Messrs. Wolcott, Gamble, Smith, Kunkel, Talle, Kilburn, Buffett, Cole, Stratton, Banta, Nicholson, Spence, Brown, Patman, Folger, Riley, and Buchanan.

The CHAIRMAN. The committee will come to order.

We will proceed with the further consideration of S. 866 and related bills.

Mr. Farrell Dobbs, the presidential candidate of the Socialist Workers Party, was scheduled to appear before the committee in support of the bill, but he will be unable to read his statement personally. However, it will be included in the record at this point, without objection.

Also Frederick A. Ballard,who was appearing on behalf of the Washington Housing Association, finds himself in a similar situation. His statement, which he desired to have inserted in the record, has been left with the committee.


Mr. DOBBS. I want to talk today about an iron curtain. This particular iron curtain was not fabricated by Russians or totalitarianism. This iron curtain carries the trade mark "Made in U. S. A."-it was made by the capitalist system which is strangely called "free enterprise." I am talking about the iron curtain that separates millions of American working-class families from decent homes and in innumerable cases from any homes at all. I am talking about the iron curtain which separates the veterans and their families from the lofty promises of modern, livable, and low-rent housing accommodations which were made to them during the war.

The record proves beyond a doubt that Congress has not kept the promises which were made to the veterans. But this is all in the tradition of giving soldiers a promissory note to make them fight the rich man's wars and then welching on the note when it came due for collection. The tradition is as old as America. The merchants and bankers of the Revolutionary years, led by their evil genius Alexander Hamilton, contrived the great swindle of cheating the veterans of Valley Forge out of their earnings by manipulating the value of the currency. About 70 years later the corrupt agents of the industrial barons and the railroad kings swindled the Civil War veterans out of their homesteads-that, too, gentlemen, might be called a housing scandal.

The war hysteria now being whipped up right here in Washington from the floor of Congress is not unconnected with the shortage of homes in this country. It is a method as old as class society itself. It began with the circuses the Roman slave masters employed to divert the attention of hungry, homeless, and discontented people. Hitler and Mussolini brought this method to modern perfection-when concentration camps and jails proved inadequate they were

quick to beat the war drums in order to divert the attention of German or Italian workingmen from their wretched working and living conditions.

The failure to provide housing is the failure of capitalism. By the same token, it puts the mark of bankruptcy upon political parties which make the defense of the system of private profit the cardinal plank in their platform. Regardless of the turn in the economic cycle, the housing crisis has remained with us. Former President Roosevelt declared during the last devastating depression, in the first year of his administration, that one-third of the nation was ill-housed. Today, at the peak of the postwar boom, with national income at a record level, President Truman tells us that the housing situation is "almost fatal."

Why was there no genuine alleviation of the housing shortage during the last depression? The banks had billions of dollars in idle capital. There were tens of thousands of unemployed building trades craftsmen and many more jobless in the building materials industries. Despite the great need for homes, the banks, mortgage and insurance companies, and real estate interests deliberately blocked a building program for low cost housing because a profitable market was lacking-that is, because the earning power of working people was too low to pay the exorbitant rents which would make a large-scale building program profitable.

Since Roosevelt made his melancholy remarks about the housing problem, the crisis has become far more acute and aggravated. It is conservatively estimated that there are at least between 2,500,000 and 5,000,000 families who are doubled up with friends or relatives, crowded into unsanitary trailer camps and dingy hotel rooms-families who live under such conditions that they can best be described as homeless. This does not include between 18,000,000 and 21,000,000 nonfarm city and rural families who live in substandard and slum dwellings. Most of these structures are in an advanced state of deterioration and many of them, now fully occupied, have long ago been condemned as uninhabitable by official agencies in the major cities.

When an innocent man is wrongly sentenced to die for a crime he did not commit, there is a great outcry at such a miscarriage of justice. Even Congress might be prevailed to help redress the wrong. But the failure of capitalist business and its political representatives in the national government to alleviate the housing shortage is tantamount to a sentence of premature death to millions of slum dwellers in New York, Chicago, Pittsburgh, New Orleans, Detroit, Cincinnati, Columbus, and other major cities. Yet there is no major outcry against this national injustice-at least, none that can be heard over the din that is made for military preparation and war. These millions live under indescribable conditions, congested in overcrowded tenements, surrounded by filth, vermin, rats, and disease, and live in perpetual danger of fire.

Those who boast of the "American Way of Life" must have in mind the fine mansions and sumptously appointed apartments on Park Avenue in New York or on the Gold Coast in Chicago, or in Detroit's Grosse Point where it is pleasant to discuss the "housing problem." While a handful enjoy such handsome accommodations, the iron curtain is drawn tight over the slums of New York's Harlem or lower east side, Detroit's Black Bottom, Pittsburgh's Hill District, New Orleans' Irish Channel, Cincinnati's Basin, or the Sausage Row in Columbus.

The economics textbooks in the schools and colleges tell us that under the system of private enterprise capital seeks places of investment where demand is greatest. That was true when capitalism flourished as a progressive system in this country. But it is no longer true today. How else explain the failure of capital to invest in large-scale housing construction at a time when the demand is unprecedented in history?

The truth is that the big capitalist interests-the banks, insurance companies and real estate interests-are deliberately obstructing any substantial alleviation of the housing shortage. The present scarcity is far more profitable to them than would be the building of low-cost units on a large scale. It is estimated that a substantial profit could be realized with 15 percent of the housing units vacant. Today virtually every inch of space, from the attic to the cellar, is occupied by tenants who are paying exorbitant rents. The cost of maintenance and upkeep for these units has never before constituted such a small percentage of operating expenses. Profits from real estate stand at a record high.

Large scale new construction at low rentals would enter into competition with the present properties held by the real estate interests and would tend to curb and lower these fabulous profits. Therefore, the monopoly interests seek to sabotage, obstruct, and strangle a genuine housing program-regardless of the great demand.

There is further evidence that bears out this point. Real estate interests are not adverse to building provided the sales or rental price is well over a rigidly established minimum. There is no scarcity of high rental apartments and expensive homes. Builders consider $80 a month rental in major cities the lowest profitable basis on which to base construction figures. We have before us the example of construction under the Patman bill. This bill dipped into the treasury in order to give $400,000,000 in bonuses to material producers with the aim of constructing houses that would sell at a $6,000 maximum and would rent for $50 for five rooms in the New York area. In practice, however, sales prices ranged from 10 to 18 thousand dollars in the area and rentals were set by the Office of Price Administration for three rooms at $79 plus $3 maintenance. Most of these houses were high-priced jerry-built shacks built with green lumber and inferior construction standards, small rooms on very small lots. Veterans and their families were the victims of this "free enterprise."

This high-priced form of housing construction is completely out of the reach of the vast majority of America's wage-earning population. Some 18 to 21 million families pay rentals of $39 or less in cities and $29 or less in nonfarm rural areas. With the present high cost of living, even this rent works a great hardship on large numbers. But the needs of the American people are of little consequence to the great monopoly interests. Big business considers the American people no less objects for exploitation than it does Chinese coolies, Egyptian cotton pickers, or Bolivian tin miners. They have, in effect, decreed that the slums shall remain, that millions shall continue to be homeless because the profit rate on low rental housing is not high enough to risk the investment of capital.

Those who uphold the capitalist system, which stands in the way of the health and welfare of the majority of the American people, of course, deplore the terrible housing conditions in this country. In the months to come the issue will be made a campaign football, with the blame passed from party to party. And, of course, promises will be made with the greatest abandon. But that will not cover up the record-the shameful, ignominious, do-nothing record.

What has been done since the end of the war? It is not correct to say that nothing has been done. Congress has been very active in that time. Active in blocking the development of any genuine housing program. Active in undermining rent controls, making it easier for the real estate sharks and the rent hogs to gouge the people. Congress has thus been serving the big banks and the real estate lobbies, guarding their interests against the growing mass of destitute Americans. It has been a Congress of Homebreakers.

Those who defend capitalism charge that socialism would break up the family. There is no socialism in this country, but what has happened to the family under capitalism? It is being reared today under such crowded and unhealthy conditions as to stunt and deform the bodies of the children, to debase all standards of morality and decency and to breed juvenile delinquency and crime on a scale unparalleled in American history. The home, for millions of the youth today, has become a hated, unorganized barracks, producing only the desire for flight.

The Taft-Ellender-Wagner bill, which, if I am not mistaken, has been kicked around in Congress for the last 2 or 3 years, is a most pitiable caricature of a housing program. The bill calls for a total of 15,000,000 homes to be built in the next 10 years. That, in itself, would be a great achievement even though almost twice that many units are needed to rescue the American people from substandard and slum housing conditions.

But the joker is that, out of the 15,000,000 projected units, not more than half a million units—that is, those to be built by the Government-stand a chance of being built in the next 5 years. That amount will not even cover demands created by the normal increase in population, let alone seriously alleviate the distress among the millions doubled up with relatives and otherwise homeless.

The rest of the 14,500,000 units are mostly "castles in the air" as far as the average veterans and worker is concerned. Private industry which is urged to construct these units has not and will not build low-cost housing on so large a scale. That fact has been amply demonstrated in the past years. There is even more direct evidence in New York City where generous grants given to private builders and insurance companies for slum clearance and low-cost housing resulted in a total of 12,400 new units, in a city which has an actual shortage of 264,500 units, not including the need to replace 861,110 units in condemned and substandard dwellings.

The real estate interests will not build low-cost housing but they will use the provisions of the bill to continue their raids on the public treasury. They will unquestionably accept the half billion dollar Federal appropriation to be matched

by an equal amount for slum clearance by municipalities in order to purchase real property for a song. They will undoubtedly utilize the additional $1,600,000 Government guarantee of mortgages to further feather their nests. Homes for the rich and well-to-do may be a byproduct of this plan, but to say that millions of working men will find livable dwellings as a consequence of this bill is nothing but a deliberately sponsored illusion.

Even that section of housing to be sponsored directly by the Government is not to be built by the Government, but merely financed by it. The building will be farmed out to private architects, bid out to private builders, and subcontracted to private contractors. This provides another opportunity for the building material interests and the building contractors, using all the infamous methods which have made the building industry the third most profitable in the country, to extract exorbitant profits at the Government's expense. Added to this is the other ingenious method of so poorly constructing Government-built projects whereby the small rooms and lack of closet space make these houses so uncomfortabe that they cannot enter into competition with higher rental privately owned dwellings.

It is worthy of notice that with President Truman's endorsement of this bill it becomes a bipartisan measure. This, then, is the very best that the two parties pledged to uphold capitalism-and it might be added the Wallace Party likewise wedded to this system-have to propose in the richest and most prosperous country of the whole world. Only one home where almost 60 are needed.

We are not impressed with the argument that this pitiable half measure is better than none at all. The so-called liberals are worried that not even this bill will get through Congress. What a damning commentary it is that the only program of liberalism today is the acceptance of half-poverty, half-homelessness and half-slavery. Those who listen to this siren's song will eventually be faced with total poverty, total homelessness and complete slavery.

This bill must be rewritten from beginning to end. The government must itself build not 500,000 homes but at least 29,500,000. Such an enterprise is the very minimum required for the common decency of the millions of men and women who have labored to produce the great wealth of this country. Naturally such a program will meet the undying hostility of the powerful banks and trusts which rule us today. To them such a project is "pure socialism."

These monopoly interests have reached a stage where they can no longer maintain a peacetime economy, they no longer have the desire or incentive to produce the works of peace. Profits for them today are inextricably tied up with producing instruments of death and means of destruction. To remove their obstruction and sabotage is therefore the first prerequisite for a genuine housing program, for the welfare and happiness of the great masses of the people.

Where will the billions come from to initiate such a program? Where did they come from when it was found necessary to build tanks, ships, guns, and planes during the last war? Where did the billions come from that were required to build the satanic Oak Ridge atom bomb development? We propose as a begin ning that the billions once again being used to build the engines of death and destruction and to finance private armies all over the world be transferred to the housing program. We propose the complete reversal of the taxation program with the aim of exempting the poor and confiscating the fabulous billions in profits extorted from the Government by the great corporations during the war and extorted from the public through inflationary prices after the war.

First, the Government would invoke the right of eminent domain over all lands and properties where it intends to build, instead of paying the king's ransom the realty interests would demand for their property.

Second: The Government will insure itsef against a new profiteering raid on the Treasury by nationalizing and operating under workers' control all the feeder industries which provide building materials, to avoid paying the racketeering prices by which private industry makes cheap housing impossible.

Third: The Government would set up a Government planning board consisting of the outstanding architects and engineers and representatives of the workers in the building industry to carry through the project.

One of the byproducts of such a program would be the teaching of skilled trades and the creation of jobs at decent wages for millions of men.

If carried to completion this program will help turn America into the garden spot of the world, not for a handful of parasites as it is today, but for the millions of America's workers and farmers.

(The statement of Frederick A. Ballard, in behalf of the Washington Housing Association, above referred to is as follows:



Mr. BALLARD. The Washington Housing Association comprises a group of local citizens who for the last 15 years have been working for the provision of decent housing, especially for families of low income, in the District of Columbia. This association approved the original housing bills S. 1592 and S. 866, and reaffirms its support of the latter bill in the form in which it passed the Senate.

In Washington the need for housing for the low, and even to some extent the moderate, income groups is acute. While there is a substantial amount of housing under construction in the Washington Metropolitan area, the lowest price houses available are generally out of reach financially of the lower-income groups.

The National Capital Housing Authority owns and manages eight low-rent housing projects built with Government loans. In addition, it manages Langston, a 274-unit development for Negroes, which was built by the Public Works Adinininstration in 1936. The eight projects, completed in 1940, 1941, 1942, and 1943, contain 2,433 dwelling units. This housing was built under provisions of the United States Housing Act which was, in many particulars, similar to the pending bill. It has provided satisfactory rental housing for 2,700 Washington families of low income during a period when very little housing was available for such families. However, there are now nearly 17,000 families on the waiting list for accommodation by the local authority. Some 7,000 of these are veterans' families.

The Bureau of the Census reports that some 40,000 families were living doubled up here in April 1947. Habitable vacant dwelling units available for rent in July 1947, were reported to be two-tenths of 1 percent.

Temporary houses originally constructed for rent to war workers, and now occupied by families with income of $3,000 or less, number 4,114. These houses are required to be torn down or otherwise disposed of very shortly and the occupants will be added to those already seeking rental housing here. The Census Bureau in 1947 reported that there were 45,000 houses in the District of Columbia where demolition of major repairs were indicated.

Our Veterans Housing Center reports that their records indicate a shortage here of 30,000 dwelling units.

Confronted with this state of facts, some of the members of the Washington Housing Association last year initiated a project for the construction of 300 dwellings for veterans, to be privately constructed and operated in order to attempt to demonstrate a practical method of partially meeting this emergency. A corporation was formed, a tract of land was optioned and estimates for the lowest conceivable construction were secured from a leading manufacturer of preassembled houses. Even with every item of cost reduced to the greatest possible extent, we found that it would be necessary in order to break even to charge a rental of $58.40 for one-bedroom units, $67.50 for two-bedroom units, and $78.50 for three-bedroom units. The objective of low-rent housing for veterans could, of course, not be fulfilled at such levels, and it became apparent that the need could be met only by some kind of subsidized program.

Enactment of the pending bill should apparently enable Washington to construct perhaps 5,000-10,000 low-rent dwellings, thus assuring some definite progress toward meeting what we consider a serious emergency. The Washington Housing Association accordingly joins with the housing associations in many other cities in urging that your committee give favorable consideration to the pending bill in the form passed by the Senate.

The CHAIRMAN. We are happy to have with us this morning the Right Reverend Monsignor John O'Grady, Secretary of the National Conference of Catholic Charities.

Monsignor O'Grady, we are very happy to have you proceed.

Monsignor O'GRADY. Thank you, Mr. Chairman and gentlemen. First I want to present, for the record, the statement of the National Council of Jewish Women endorsing the Taft-Ellender-Wagner Housing bill.

The CHAIRMAN. Without objection, the statement of the National Council of Jewish Women will be inserted in the record. Monsignor O'Grady.

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