since the loans are being made by the Government, and since banks are making them on the basis of Government guaranties we feel that one-half percent will make the loans sufficiently attractive so that they will be made, and that a 4 percent loan is not necessary. It will be easier for the farms and farm workers to obtain those loans. The CHAIRMAN. That, on the average, would decrease the interest rate to about 3 percent.

Mr. COLLOMS. About 3 percent-perhaps even a little less.

The CHAIRMAN. There is a financing charge, a carrying charge, of 1 percent. That would decrease the yield to something under 2 percent. Do you expect that you could get private financing to come into these projects at less than 2 percent?

Mr. COLLOMS. I think you could.

The CHAIRMAN. Do you know what is affecting the market for GI and Federal Housing Administration paper at the present time? Mr. COLLOMS. I know that the interest rate has gone up. The CHAIRMAN. It has not gone up yet.

Mr. COLLOMS. In New York City, on large projects, the banks and the insurance companies are asking more interest than they did on the earlier projects. For example, on a project like Stuyvesant Town or Peter Cooper, the rate has gone up.

The CHAIRMAN. Are you acquainted with 603's?

Mr. COLLOMS. Yes.

The CHAIRMAN. They are frozen at a 4 percent interest rate.
Mr. COLLOMS. Well, they have come up to the top now.

The CHAIRMAN. Well, they have been up to the top, which is 4 percent, right along. The yield on those is about 3 percent, and that is slowing up the process, even in the case of GI paper, which is guaranteed to the extent of 50 percent up to $4,000.

There does not even seem to be a market for that paper. So what effect do you think a reduction in interest rates, which would reduce the yield to less than 2 percent, would have on the money market for home financing? How would you offset that? If the bankers just said to the insurance companies that they saw fit not to invest any more in home construction, what would your program be for offsetting it? Government loans?

Mr. COLLOMS. That is right, sir.

The CHAIRMAN. All right.

Mr. COLLOMS. There is an emergency here, an emergency which has existed for a long time on rural housing, and if it cannot be taken care of in any other way it should be taken care of by the Government at this time.

The CHAIRMAN. Then you are advocating the expansion of the fiscal program to in excess of 30,000,000,000 dollars, with subsidies to reduce the cost of construction, if necessary, and direct loans by the Federal Government to financing institutions to bring them into this field.

Mr. COLLOMS. That is right.

The CHAIRMAN. Go ahead.

Mr. COLLOMS. In addition, section 710 is amended by striking the figure "$25,000,000" and substituting in its place "$100,000,000"; striking "$50,000,000" and substituting "$150,000,000"; striking "$75,000,000" and substituting "$250,000,000" and striking the final "$100,000,000" and substituting "$250,000,000."

Section 711 is amended by striking the figure "$500,000" and substituting in its place "$1,500,000," and striking the figures "$1,000,000," "$1,500,000" and "$2,000,000" and substituting in their place "$5,000,000," "$7,500,000," and "$10,000,000."

Title VII is further amended by adding the following section to be known as section 713, "Housing for Migratory Farm Workers": There are hereby authorized to be appropriated to the Secretary the sum of $250,000,000 to be used by the Secretary in the following manner: For the three years commencing on July 1, 1948, and ending on July 1, 1951, the Secretary shall erect, maintain and operate housing accommodations for migratory farm workers to be located in farm areas found by him to be in need thereof; such accommodations shall be let upon such terms and conditions and at rentals fixed by the Secretary consistent with the earning power of the migratory workers in each locality. There shall be no discrimination, segregation, or limitation in the use of such housing by reason of race, color, creed, political belief, religion, or national origin.

The proposed changes lower the interest rate so that the share cropper or poor farmer to be aided can meet his interest obligations with less assistance from the Secretary. The increase in housing afforded by this provision is required because of the dearth of housing since 1945 in rural communities.

This section also provides for housing for migratory farm workers who have never had adequate housing and have been forced to live in trailer camps, tents without any sanitary facilities whatever. Adequate supervision by the Secretary of Agriculture in this program will insure safe and sanitary housing. That is an outright grant. The CHAIRMAN. There does not seem to be any question but what that constitutes socialized housing.

Mr. COLLOMS. Well, I would not say that is socialized housing. The CHAIRMAN. What do you understand that we mean by socialized housing, if this is not socialized housing?

Mr. COLLOMS. Here you have housing which cannot be built by any building industry or for the general market. This is a program for itinerant workers.

The CHAIRMAN. You do not consider anything socialistic, then

Mr. COLLOMS. That runs into competition with business, even though it is owned by the Government.

The CHAIRMAN. They would not be in competition with anything? Mr. COLLOMs. Not at this time, sir.

The CHAIRMAN. Anything that is owned, and controlled, by the Federal Government would not come into your definition of socialized housing?

Mr. COLLOMS. The reason that it does not is that it does not run into competition with anything which private industry has or can put up for these people. There is no housing for these people at this time. They are living in trailers and shacks which are falling apartsome of them have been up for 12 or 15 years, and should not be there at all. They have no sanitary facilities or anything. No industry, no hotel people, no motel people-as a matter of fact, no one wants to put up housing for these people because it is not a paying proposition. Undoubtedly they have to live, and they are needed for the farming industry in the far West.

The CHAIRMAN. All right. Proceed.

Mr. COLLOMS. (4) The last proposed amendment to S. 866 is on discrimination, section 601: Amend by adding the following addi

tional subsection to section 15 of the United States Housing Act of 1937, as amended:

(11) Every contract made pursuant to this Act for annual contributions for urban low-rent housing projects initiated after July 1, 1948, shall require that no family, otherwise eligible for admission to such housing, shall be prevented from admission to the project or discriminated against because of race, color, political belief, creed, religion, or national origin. In selecting tenants among eligible applicants housing need shall be the sole consideration.

Those are the suggested amendments which the Wallace for President Committee suggests to S. 866.

The CHAIRMAN. What is your attitude generally on the bill as it passed the Senate?

Mr. COLLOMS. Generally, we believe it is a step forward in public housing.

The CHAIRMAN. Toward these objectives which you propose? Mr. COLLOMS. That is correct, sir. There are certain features of the bill as a whole which do not go far enough, we feel, and there are certain features which we feel-in title VI, for instance-may go a little too far. That is the old title VI, FHA.

On the other hand, we believe that it is the only thing, at this time, that has any approach at all to the crying need of a large segment of our population. That is why we are backing the bill, with these suggested amendments.

The CHAIRMAN. Will you back the bill if these amendments are not written into the bill?

Mr. COLLOMS. I am afraid we will have to, because we still believe that if we cannot get more than 500,000 houses at this time, we will have to take that.

The CHAIRMAN. As a basis for an expanded program; that is your recommendation?

Mr. COLLOMs. That is correct.

The CHAIRMAN. Are there further questions of Mr. Colloms?
Mr. SMITH. Mr. Chairman.

The CHAIRMAN. Dr. Smith.

Mr. SMITH. Mr. Colloms, you provide here for $32,000,000,000 instead of $6,000,000,000 for low-rent housing. What part of your program, as you envision it, would that cover? Low-rent housing?

Mr. COLLOMS. That would cover the entire section of subsidized housing-in addition to what has already been put up and for which there has already been appropriation.

Mr. SMITH. We have figures indicating that there are as many as 6,000,000 homes which are substandard. You provide for 2,500,000. Mr. COLLOMS. That is correct.

Mr. SMITH. What would we do about the remainder?

Mr. COLLOMS. The entire program of the Wallace for President Committee has not been developed up to this time. Such a plan is now in the process of being developed, because taking care of 15,000,000 homes which is approximately what this country will need in the next 10 to 12 years, according to all of the housing experts would require considerable changes in a number of factors, of economic factors, such as controls and allocations of building supplies, which we are not prepared to go into at this time and which we cannot go into at this time since this is an emergency program.

Right now we are short 3,000,000 houses, and we believe that in the next 5 years, without dislocating our present economic situation, we can build those 2,500,000 units.

But for the long-range program, in order to take care of the other 12,000,000 homes, that would require a considerable change in our economic structure-controls and various allocations-which we are not prepared to propose at this time.

Mr. SMITH. You mean, therefore, like they have in Russia?
Mr. COLLOMS. No; I do not mean that at all.

Mr. SMITH. What is the difference between controls over prices in the United States by the political authority and controls over prices in Russia by political authority?

Mr. COLLOMS. Well, you see, I worked for the Office of Price Administration for about 5 years. I think we ran the thing pretty democratically, with controls being imposed only where it was necessary and allowing a large profit to the investor and to the manufacturer. Mr. SMITH. Allowing him-

The CHAIRMAN. I wish we would not get into that. This is quite a controversial subject.

Mr. SMITH. You are not connected with any housing project at the present time, are you?

Mr. COLLOMS. No, sir.

Mr. SMITH. Are you aware of the fact that these low-rent housing projects do not provide accommodations for the lowest income group? Mr. COLLOMS. Do you mean people on relief, sir? I understand that they do.

Mr. SMITH. The lowest income group?

Mr. COLLOMS. I believe they do. I did not quite get the question. Do you mean that the lowest income group cannot afford to go into the subsidizing housing? I think that is true; they can.

Mr. SMITH. I am alleging that the law as it was originally enacted— the United States Housing Act-is being grossly violated and instead of housing the lowest income group they are housing mostly the middle income group and some people from the upper third income group. What are you doing about that?

Mr. COLLOMS. I personally am doing nothing about it. If you mean what is being done about it

Mr. SMITH. Well, that is right.

Mr. COLLOMS. If you can find housing, sir, for those people who did come into the projects with incomes which were under the limits and now have nowhere else to go, I say "yes, those people should go out of the projects for the lowest income groups and go into the others." But there are no others at this. time, sir. They cannot find places

to go.

Mr. SMITH. Even before the war. It is a well-known fact that these low-rent housing projects did not house the lowest income group. I am speaking of the original occupants of these houses-those who were placed there before there was a war. The figures, wherever we have been able to get them, show that the people living in those houses come mostly from the middle and upper third income groups. What have you to say about that?

Mr. COLLOMS. I have not seen those figures, sir.

Mr. SMITH. You were at the head of a project here in Washington.

Mr. COLLOMS. No; I was not, sir. I was in charge of utility rate negotiations.

Mr. SMITH. I beg your pardon. I am wondering why you do not go into a question of that kind. You seem to be interested in the downtrodden and in the poor-the common man, as he is usually called. How do you justify taxing the lowest income group to provide rent subsidies for the middle and upper third income groups? Mr. COLLOMS. I think Mr. Stern wants to answer that.

Mr. STERN. May I attempt to answer that?

I have been coming to Washington, now, for about 25 years at my own personal expense because of my civic and personal interest in this problem.

The answer to that, Dr. Smith, I think, bears upon the scarcity problem-the fact that in this country, in relation to construction of housing, we have operated on the worst posible basis of shortagesand, so far as the Government participation is concerned-and I was here to testify at the first hearings in relation to public housing-we have, in this field, too, based it on such a limited program that there are not adequate facilities to house those income level families to which you are referring.

The answer is not to throw out a few whose income is too high. Mr. SMITH. Let us not get off the subject. We are not concerned with these high income groups at the present time. We are concerned with this law, the original occupants, their income, where they were from and whether they were really from the slums or whether they were from a higher income group.

Mr. STERN. The majority of them came from very bad housing. As I recall, there was

Mr. SMITH. Wait a minute. You said "very bad housing." I am speaking about slums now.

Mr. STERN. Do you want me to define slums?

Mr. SMITH. No. We have torn down some houses.

We are going to replace these people. Do you have any figures to show how many of those people were rehoused in the new dwellings?

Mr. STERN. Those would be readily available to you from the Public Housing Division. I do not have these figures at my fingertips. Mr. SMITH. You do not know what they are?

Mr. STERN. Not exactly.

Mr. SMITH. You have never seen them?

Mr. STERN. I have seen the earlier figures, where there was a top income limit for any family going into these projects. I know that from personal experience because I was chairman of the State housing board in Illinois when this legislation was first put into effect-that slum dwellers were housed, to a large degree, in these projects.

Mr. SMITH. Is this not also true: That there is a minimum figure? That they must have a minimum amount of income?

Mr. STERN. They are required to pay a minimum of rent; yes. Mr. SMITH. Does that not take the whole lowest-income group out and make it ineligible for occupancy?

Mr. STERN. No.

Mr. SMITH. That is because the lowest-income group is not making enough money to qualify for these projects?