Most recently the Joint Committee on Housing which held hearings all over the country rolled up a record of testimony, discussion, and analysis of the housing shortage which, I think, Mr. Gamble, chairman of the committee, modestly estimated at some 2,000,000 words. There are now published four parts of the field hearings, each one of which runs close to 1,500 pages. In addition to that, there are a number of special reports, a volume on the statistics of housing running 325 pages, and the final majority report of the committee.

The final majority report was submitted on March 15 last by Congressman Gamble. Except for the addition on the Senate floor of a separate title dealing with farm housing, the Taft-Ellender-Wagner bill as finally enacted by the Senate conforms, with minor exceptions, to the recommendations of the Joint House-Senate Committee whose membership numbered 7 members of your own House Banking and Currency Committee.

Finally, last month, the Senate approved the bill substantially in the form it was offered.

I have reviewed the record of congressional study of the housing problem and recommendations to deal with it because it seems to me to refute once and for all any claim that further evidence is needed before we proceed to the solution.

Americans for Democratic Action believes and I believe that there is little anyone can add to our present knowledge of housing needs and ways to meet them. It is all said in millions of words on thousands of pages of congressional hearings, deliberations and reports.

Americans for Democratic Action completely and wholeheartedly agrees with the main purpose of this bill: The encouragement of private enterprise to solve as large a part of our housing needs as it possibly can. We think provisions of the bill will accomplish this purpose.

The bill says it is high time our slums were cleared up and redeveloped. We agree. The bill intends to provide Federal aid to communities which show that private enterprise cannot fully meet the housing needs of low income families who crowd our slums. We agree. Who can legitimately disagree?

These families need houses. They cannot get houses without the aid of the Federal Government. The program of low rent housing we now have for these families was started during the thirties in the depth of our depression. It has been suggested that we should sit around and wait for another depression before we resume it.

That kind of reasoning is a flagrant parade of weakness which offers comfort and promise to the avowed enemies of political democracy who search for every bit of evidence that free America cannot or will not take care of its own problems and its own people.

The Communists are waiting breathlessly for every hint of an economic collapse in America. Must Congress convince the political astrologers in the Kremlin that they are right?

Aside from the comfort this kind of giddy talk gives Mr. Stalin's strategists, it is extremely silly economics.

We can better afford such a program in a period of high employment and high income than in a period of depression.

It is high time we faced up to the fact that housing is one of the basic parts of the high standard of living.

It has also been said that the comparatively small public housing program recommended by this bill will add to inflationary pressures. That too is fallacious reasoning. For if we add to the housing supply so vitally needed by the lowest income families for which private enterprise is not producing and cannot profitably produce in the foreseeable future, we considerably lessen pressures at that level. In fact, the faster we move to put the measures proposed by this bill into effect, the faster we will get enough housing for all levels of income, the faster supply will come near to effective demand; the faster we will approach a solution of inflated housing costs. It is obvious that prices rise when need has so far outstripped production. They have risen fantastically. The joint committee reported that selling prices of existing houses by September 1947, were up 130 percent above 1939 prices, and it declared that the rise in costs reflects the lag in production. The formula by which the bill proposes to bring about the provision of a half million public housing dwellings in the next 5 years is, we feel, the best that can be devised with our present knowledge. In my capacity as an official of the city of Detroit, and a citizen of the State of Michigan, I am jealous of our municipal and State perogatives. I want our autonomy and our local rights fully protected. This bill does that. It confines Federal aid to the area we want it confined-financial assistance. It leaves us free to determine our own housing need, to determine the extent to which our building industry can supply it, to determine the extent to which our local and State revenues can be stretched to redevelop slums and to provide aid to housing low-income families that cannot otherwise be decently housed in new or existing housing. We must determine that we cannot meet all housing needs; that we cannot finance the clearing of our slums; and then, and only then do we apply to the Federal Government for aid.

Americans for Democratic Action has needled this committee for what we considered inexcusable delaying actions it has devised in the past. We are encouraged that this committee is finally getting around to contemplating action.

We have wasted too many years fooling around with piecemeal approaches to one of the most vital issues facing us today.

It is high time we enact a sound fully implemented national housing policy into law.

The promise of political freedom plus pork chops plus a decent place to live is the most dynamic positive revolutionary force at work in the world today. It makes other doctrines at loose in the world look decadent and barren by comparison. Almost alone among modern nations, America has the resources to make that promise come true in our generation.

I say and Americans for Democratic Action say let us do it now. Mr. EDWARDS. Gentlemen, I have a few comments I would like to make in addition to this, informally, if I may be allowed to do so. The CHAIRMAN. Very well.

Mr. EDWARDS. In my previous experience as the head of one of the local housing authorities, dealing with public housing, I came to some conclusions that leave me with some very real enthusiasm relative to one of the sections of the Taft-Ellender-Wagner bill-the section dealing with housing research.

I personally believe that the housing industry is an industry which progress has forgotten. All of the talk that has gone into the contemplation of mass production of homes, has to date not really produced a feasible low-cost house for America to which we can apply the production methods which we have learned to apply to practically every other important facility with which we live.

I am not at all sure that that job cannot be done, but I am sure that the individual builders of houses, the individual cities and States, cannot economically undertake the research and the development which is essential in this field. I think one of the things which would lead toward the promotion of much lower costs in the housing field is the acceptance of this bill, with the research provisions which give the Administrator the right to proceed to national research in relation to techniques, in relation to invention, in relation to the application of new material, in relation to the encouragement of mass production of housing.

The next thing which appeals to me personally very strongly in relation to the bill is the fact that it would give a stability to the future of the housing field which I do not think it has experienced in the past. One of the occasions for the shortage of labor in this field-and one of the occasions for the relatively high price of labor in the housing field— has been the argument-and it has been cited time after time and truthfully so that there is no security of employment in the housing constructiton business. If we manage to level off the peaks and the valleys, to undertake to meet the housing needs of America for a number of years to come, then there is an opportunity to say to people who might desire to enter that field and be restrained from it by the possibility of being thrown out of work at a relatively early date, "Come in, there is a program for this industry which promises stable improvement and a lasting stability."

Further than that, as my statement pointed out, I think that the stability of this industry would have a great deal to do with promoting stability in our whole economic order.

The next item which I want to comment on is an item which has to do with the urban redevelopment section of the bill. As a member of the Detroit City Council, I have participated, with other officials in Detroit, in undertaking to get some urban redevelopment with the use of private capital. To date we have not yet succeeded in getting one acre of the slums of Detroit cleared and redeveloped by private capital. In spite of conversation after conversation, and plea after plea, to those groups in our society-the insurance companies, banks, mortgage houses-who have large sums for investment available to them, we have not been able to find a feasible means of their liquidating the original land cost of slum clearance.

I think there is no question about the fact that if there is to be urban redevelopment, with insurance companies, or other types of private enterprise, building homes on the site of the cleared slums for families of moderate income or high income, that there has to be a Government subsidy in the acquisition of the land in the first place.

We are proceeding to acquire a large part of one of the worst sections of the Detroit slum area. We have appropriated a million and a half dollars, over the past 3 years, for the purpose of acquiring this area. It will be just a drop in the bucket. I cite it to you only to prove that

The two bills together, according to your suggested plan, and as now written, would involve about $11,000,000,000. Do you advocate that this Congress obligate itself to the extent of $41,000,000,000?

Mr. COLLOMS. Well, there are some features of the homestead bill which we believe are not sound economically or-I cannot say architectually, because the draftsmanship of the bill is all right-but I mean from the point of view of builders. I do not think that bill is a good bill in some parts.

The CHAIRMAN. Regardless of that, you are asking this committee to expand this program so that we would commit ourselves to something over $30,000,000,000?

Mr. COLLOMS. That is correct.

The amount which is now suggested as a limitation-$1,250 per room and $1,500 per room-is grossly inadequate. I do not think you could get one house put up today anywhere in the country at that figure-not from the figures we have seen of cost of construction in this country.

Mr. SMITH. This bill allows another $250.

Mr. COLLOMS. It might. We do not know. As a matter of fact, let us assume, for the sake of argument, that there should be a sudden drop in building costs-for which we all hope. If that were to take place, then you would get a construction cost of less than $1,000 in rural areas and less than $1,500 in New York City and the larger cities of over 500,000.

The CHAIRMAN. Has your committee any program for the reduction of costs with respect to the building of housing units?

Mr. COLLOMS. Yes; we have. We are not proposing it here. I think it is price controls and allocations-price controls and allocations, sir. We are not proposing it at this time, though.

The CHAIRMAN. If you could not get private industry to build houses with price controls and allocations, which was our experience in 1946, how would you take care of the difference in cost-by subsidies?

Mr. COLLOMS. That might be required.

The CHAIRMAN. Have you any estimate as to the amount that might be required for subsidies?

Mr. COLLOMS. No, sir; we have not gone into that up to this time. We believe it might be necessary to make such study and to make necessary allocations of funds. But we have not prepared any figures on that at this time.

The CHAIRMAN. Very well. Proceed.

Mr. COLLOMS:

(3) THE THIRD PROPOSED AMENDMENTS TO S. 866

Farm housing and assistance:

Section 702 (a) is amended by striking the words "4 per centum" and substituting in its place one-half per centum more than the Federal going rate of interest, which means the annual rate of interest specified in the most recently issued bonds of the Federal Government having maturity of 20 years or more, determined at the date the loan is made.

Since these loans are made to people who are in need, 4 percent is a high rate of interest for them, and we feel that the Government

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."