know, Senator Taft was one of the original sponsors of the original Taft-Ellender-Wagner bill.

We went into that in some detail. We have felt that that will not be of any substantial benefit, first of all, as far as solving the rural housing problem is concerned. Secondly, you must keep in mind that when you artificially stimulate the flow of scarce materials to the farming country you are taking those materials, of course, away from the congested areas in the cities. So that at this stage we must decide whether it is wise to stimulate the flow of the scarce materials away from the congested areas of the cities into the farming areas or not. Your own Congressman Patman made a study of this rural housing problem. I have not heard him testify on it as yet, but I do not believe that he differs too greatly from the thought expressed by Senators Taft and Flanders and myself.

As I say, I would rather not go into that in detail, because there are other matters that I would like to go into in more detail. But suffice it to say that the various lines of thought have met and we all agreed unanimously that that should not be included in the bill, that we should authorize the Department of Agriculture and the Housing and Home Finance Agency to study the matter and recommend some good, workable rural housing legislation-rural housing legislation which would not be rural housing legislation in name only but which would actually be of some benefit to the rural areas.

Going on to what I consider perhaps one of the most acute problems, but not the greatest problem-the housing of your very lowest income group-as you know, there is a public housing section in the bill. I think it would be better to refer to that as a welfare housing section. We have had witnesses testify all the way from San Francisco to New York, all the way from New Orleans to St. Paul.

A lot of well-meaning people-very well-meaning people-came in and have graphically laid before us the problem of the very low income group, and they jumped from that

Mr. BROWN. I take the position

Senator MCCARTHY. Could I finish my statement? Then I will answer any questions you want.

Mr. BROWN. I thought you had finished. Excuse me.

Senator MCCARTHY. No. I will be glad to answer questions later. Those people jumped from the need of the very low income group to public housing. I frankly think that there is a place for welfare housing in our over-all housing picture. I do not believe public housing, as presently administered, helps that problem.

As you know, we have 190,000 public housing units in the country today. That is, not speaking of the temporary war housing-the Lanham Act housing.

I believe the people who set up that public housing program felt that they would be taking care of the very lowest income group-in other words, starting at the very bottom of the economic scale. However, there is an unwritten rule, apparently, to the effect that if a person is on relief-if a widow has four or five children, for example, and is receiving a widow's pension, she is to all intents barred from public housing, except a very small percentage of such people.

We offered an amendment in the Senate which I think was a good, sensible amendment-one which would make public housing available

where the need is greatest. I think if you do that, very few of us can have any argument with public housing.

We offered such an amendment in the Senate provided that there could be no discrimination against those on relief and that tenancy would be determined solely upon the basis of the greatest need. In other words, two requirements: (1) the tenant would be selected on the basis of greatest need, and (2) there would be no discrimination for or against because the proposed tenant is receiving any type of welfare aid.

That was very vigorously opposed by Senators Flanders and Taft, who represent the other line of thought, they taking the position that public housing should be for the stable wage earners in the lower income group. I frankly think that if you are going to use public housing in conjunction with any slum-clearance program, then you cannot bar the relief client. You cannot bar the man at the very bottom of the ladder, and I very seriously urge that if you take public housing, first, that you do restrict it. First, provide them the 190,000 units now available by using that yardstick, and, secondly, that in the production of the 500,000 additional units you use the same yardstick.

Also-and on this, incidentally, there was not too much difference of opinion in the Senate, except that we did not get around to doing the job-I asked Senator Taft on the floor whether he would consider certain amendments, and it is all a matter of record. He indicated that he was friendly toward them.

First, may I give you the background. As you know, during the war there was lumped and thrown into the Public Housing Administration a number of agencies, each with different bookkeeping systems, until you had a hopeless muddle in public housing. Now, I do not think you can blame that on the men who were currently administering the programs. There was a great parade of Administrators in Public Housing, some of them staying 6 months, some 8 months, some a year, some longer.

I do not think there is any man, no matter how competent he were, who could clear up that situation. In fact, the General Accounting Office found it could not make an audit of the books. Price & Waterhouse, an independent accountancy agency, was called in, and they stated it was impossible for them to conduct an intelligent audit of the Public Housing books. There were no records of accounts receivable, no records of accounts payable. Just as an example of how far it went, there was one item of $600,000 which was entered in the books as a debit and during the hearings over in the Senate, presided over by Senator O'Conor, of Maryland, one of the Administrators, or former Administrators, was asked why that item of $604,000 was entered on the books as a debit. He said, "I do not know, but we had to balance the books."

In the San Francisco area there were some $97,000 worth of materials which had disappeared, and the man in charge was very honest about the matter in his testimony when asked whether he knew whether this material was stolen, whether it was sold, whether it was used on a project, or whether it was used in somebody's lakeshore home. He said, "I do not know."

Since that time Mr. Foley has reported to us, and, I am sure, correctly, because our experience with Mr. Foley has been excellent

and I think he is one of our very highest type of bureau heads—Mr. Foley has reported to us that of the 65 accounting deficiencies in Public Housing 55 have substantially been taken care of, and that the others are being taken care of as rapidly as possible.

This points up a problem which we should meet before we approve any public-housing program. If we are going to approve a publichousing program I think we should take from the Public Housing Administration all of its duties and functions except the administration of public housing.

For example, I do not think the Public Housing Administration should have to be handling the disposal of Greenbelt. I do not believe they should be handling the disposal of Lanham Act properties or war housing. I might say, as to that, that on the floor of the Senate I asked Senator Taft what his position would be if I proposed amendments along that line, and he indicated that he had no opposition to such amendments.

If we are going to have public housing, then the Public Housing Administration should do nothing but administer public housing. I might say, in that connection, that our experience throughout the country and we visited practically every major city-has shown that all public-housing projects are not operated badly. I mention, as an example, some in Dallas, Tex.; Little Rock, Ark., and one very well operated project in Ohio. Some of them are operated very well-operated to do what I think we should provide by law that they all do, namely, that they start at the very bottom in the income scale.

There are some very badly operated projects. I think the worst we ran into was in Detroit, Mich., where the claim was made by people both for and against public housing to the effect that there were some 400 individuals who were substantially above the income groups which should be allowed in public housing-some of them as high as five, six and seven thousand dollars a year; some of them bachelors, living in public housing. When we called the Public Housing Administrator to testify and clear up the picture, he refused to do so. We could have subpenaed him, but we felt that a man so lacking in his duties would be of no value to the committee.

I have been receiving constant complaints with respect to that project—and there are a number of others. That is why I think it is necessary to streamline the public-housing set-up, if we are going to have it at all.

If I may revert to slum clearance again, I believe that if there were one amendment to the slum-clearance provision it would be an excellent provision. I think it should provide that before a city. qualifies for any Federal aid for slum clearance it should first have taken steps to standardize its building code-in other words, provide a code which will do no more and no less than to protect the public health and safety.

A great number of us who did a great deal of work on this subject feel, and very strongly, that no matter what Federal legislation we pass, unless we can get standardization of building codes, first, and, second, standardization of measurements in the building industry, you will never be able to give any one a dollar's worth of building for the dollar he spends.

We have had contractors, we have had heads of labor unions, laboring men, bankers, and so forth, testify that if you first get your stand

ardization of building codes and then get standardization of measurements, that can result in a saving of anywhere from 15 to 20, 30, or 35 percent of the cost of erecting a home.

Thirdly, there is a section in the bill which provides for research and experimentation. I think the section, as presently written, goes too far. I do not think it points up the things which should be pointed

up.

Along with a number of other members of the committee, I worked upon a section over a number of months. That was rejected in favor of the very hurriedly drawn section which, I do not believe, was adequately considered.

We did attempt to set up, within the Housing and Home Finance Agency, a division whose principal job would be, first, to work toward the standardization of codes, and, secondly, to work toward the standardization of measurements, and, thirdly, to coordinate the various research industries, both in private industry and Government. I think that if the Housing and Home Finance Agency had a division doing those three jobs it could render an excellent service.

The present section goes far beyond that. It attempts, as I read it, to set up a laboratory, with a huge experimental station within the Government. That might ultimately be an excellent idea, but I do not think we should start out doing that. I think we should first work on the standardization of codes; second, of measurements, and, thirdly, the coordination of the various research agencies in the Government and in private industry.

I think that substantially covers the objections, or suggestions, which I have with respect to this legislation, Mr. Chairman. As I say, I came over here, principally, not to try to tell the committee what to do but because a number of members of your committee requested that I come over to answer some questions.

I will be glad to attempt to answer any questions at this time.

The CHAIRMAN. As I understand it, this bill, S. 866, as passed by the Senate, is materially different from the original Taft-EllenderWagner bill.

Senator MCCARTHY. Yes, Mr. Chairman, I think that should be emphasized. Everything in the original Taft-Ellender-Wagner bill was stricken, everything except the title, and a completely new bill was inserted-a bill which differs very, very materially from the original Taft-Ellender-Wagner bill.

In fact, the only sections which are in any way identical, as far as I can see, are the yield insurance provision-and that has been changed substantially-and, secondly, the public housing provision, which has been changed somewhat but, I feel, not enough, and, No. 3, the rural housing provision.

I might say that even though I do not think the public housing provision, as presently drawn, makes it a good provision, I felt that there was so much of value in the bill as presently drafted that I was willing to take the small amount of bad in it to get the large amount of good in the bill, and I did support that bill as presently drafted in the Senate, although I do not like the public housing section unless and until you tie it down to the bottom income level instead of starting two or three rungs up the economic scale, as we do now, and drive it down. I think we should start at the bottom and come up.

I have no quarrel with public housing units. I think it is unfortunate that the proponents of public housing have done a rather effective job of convincing the public that the 100,000 public housing units a year will solve the housing problem. We all know that it will take anywhere from 1,000,000 to 1,800,000 units a year.

The CHAIRMAN. We were told, Senator, and we frequently read in the press, and as late as Saturday, I believe, there was an article appearing containing a sort of a general expression that this bill will provide for the construction of 15 million homes. What is the history of that? Where did that figure come from?

Senator MCCARTHY. Our committee felt, Mr. Chairman, that the need is roughly 1,500,000 units a year for the next 10 years. That would mean that if the need is to be met we will have to build a million homes.

Now, unfortunately, a vast number of people have confused that figure of 15 million homes with the public housing section of the bill. As I say, I have no objection to the public housing_section. In fact, I think it might be a good provision if we will tie it down as I suggest, but I do think it is unfortunate that a vast number of people think that if we pass this public housing section we are going to have some 15 million homes in the next 10 years.

I do believe that if the other provisions of the bill are passed-such as the extension of title VI, the provision setting up a veterans' cooperative, a provision providing for some work toward the standardization of codes and measurements, the yield insurance provision-I believe that if those provisions are all passed, the bill will certainly increase the number of dwellings built over the next six or eight years, and I think it is entirely possible that we can arrive at a figure of a million and a half a year. I think it is impossible to arrive at that figure during the current year because our production will just not meet it.

For example, the nail companies have indicated to us that the maximum increase in production will be from 16 million to 18 million kegs this year. That will not produce a million and a half homes. They tell us that they cannot increase their facilities, within the next year or even two years, to go beyond that figure.

The production of gypsum lath, which has been one of the critical shortages, as you know, will be increased, according to the manufacturers, to about four and a half billion feet this year as against 3,800,000,000 feet last year. That will be substantially enough to meet a million and a half homes program. But I do not think there is any chance of hitting it this year.

I do think that if we pass some good, workable housing legislation there is a chance of hitting it next year.

As I said before, what disturbs me is that there is so much confusion between the small segment dealing with public housing and the over-all need of the housing industry that most of your opposition and support of the bill is based upon this one small segment. I have been through the country and I have found an unlimited number of veterans' organizations who think that if you pass a bill providing for 100,000 units a year for 5 years you can take care of the 2,800,000 families that are doubled up. Just simple addition and subtraction indicate that that cannot be done. I think it is unfortunate that we in the Senate insisted on combining welfare housing with a badly