down-grade trend would indicate that in all likelihood it would have to be more than rebuilt completely in 60 years. Typical of the extravagances in the construction of Frederick Douglass was an architects' and engineering fee of $61,000 paid for plans and specifications. This fee is over and above the cost of a fully staffed architectural and engineering group maintained by the public housing authority. No central heating is provided and space heaters are used in the living room. All utilities are furnished but not heat. This necessitates each tenant purchasing his own coal. A two-bedroom unit rents for $40.50. Conversation with the tenant of the unit which was inspected indicated that the cost of coal per month on a year-around basis would be approximately $5 per month. This would bring the rent to $15.50. To this must be added other amounts for tax exemption, Federal subsidy and 60-year amortization and thus the rent would be the $64 or above received by Skyland Terrace for the same amount of space for a unit built over a year earlier by private enterprise. Although the rent is greater, the accommodations are nothing like comparable. Most tragic of all is that even these subsidized-tax-exempt rents were set up on a 60-year basis and the units can't possibly maintain these rents for anything like 60 years. After being in existence only 6 years (54 to go), Frederick Douglass is rapidly becoming a slum area and no doubt within a few more years it will be just as bad as the slums which the public housers have claimed they would eliminate. It was on the basis that slums would be cleared and not created that they were given large sums of public money.

Summarizing, you have Skyland Terrace, a private development in excellent condition today, having been built in 1939 at substantially less cost per room than the Frederick Douglass public housing project of vastly inferior construction, built over a year later which needs a complete overhauling job.

In addition to being economically unsound, public housing has drained off materials critically needed for private enterprise housing. We've started the ball rolling here in Washington to expose public housing. How about keeping it going?

The CHAIRMAN. We have now Mr. George Fuller.

We are very happy to have you proceed, Mr. Fuller.

STATEMENT OF GEORGE M. FULLER, VICE PRESIDENT, NATIONAL LUMBER MANUFACTURERS ASSOCIATION

Mr. FULLER. My name is George M. Fuller. I am vice president of the National Lumber Manufacturers Association, which is a federation representing 15 major regional, species and product lumber manufacturing associations in the United States.

I appreciate the opportunity to appear on their behalf before this committee considering housing legislation. The lumber manufacturing industry is not motivated by any dollars-and cents self interest in opposing S. 866. Lumber will be sold regardless of who builds the houses. We oppose this bill because we are motivated by philosophical and patriotic self-interest. We believe that it will not be to the best interest of the United States.

Historically we have learned that Government agencies, by their interpretation of statutes placed on the books by Congress, frequently fail to appreciate the theme and the motive that inspired Congress to write the law, and their interpretations in some instances have gone beyond the original intent of Congress, and coverage and definition of policy have been expanded. For this reason we feel that section 2, which is the policy declaration, should be carefully scrutinized. as certainly, the administrator of any public housing law of this kind is permitted sufficient latitude by the ambiguity of this declaration of policy to go far beyond what most people believe is in this bill.

We wish to confine our remarks to section 2 of S. 866, which sets forth a declaration of housing goals and policies.

There is danger in stating this goal in terms of a national promise.

There are a great many people in this country who have a sublime faith that if Congress makes a declaration of goals and policies, as in the present instance, that the stated goal will be promptly achieved. This is, indeed, a tribute to the Congress of the United States, but it also imposes a tremendous responsibility. Let me say, that if you write the housing goal of S. 866 into law, you will find that those very people who are now urging passage will soon be back, blaming you for not solving the housing problem-for not having provided a "decent home and a suitable living environment for every American family."

That is the danger in the goal. But the policies are equally misleading. For, not only can the goal never be achieved-it being an economic axiom that human wants are insatiable-but the steps proposed by the bill to approach that goal will actually retard rather than hurry us along to better housing in America.

Section 2 sets forth three policies to be followed in attaining the national housing objective. I wish to comment on each of these.

The first and second policies relate to private enterprise. First it is stated, "private enterprise shall be encouraged to serve as large a part of the total need as it can:" and second, "Government assistance shall be utilized where feasible to enable private enterprise to serve more of the total need."

Today, private enterprise is producing housing at record levels. Production and manpower capacity are being utilized to the maximum extent. There is no way that larger production can be legislated. Private enterprise is straining to increase production, and every means is being employed to achieve larger and larger production volumes.

Private enterprise is now and will always aim to serve as large a part of the total demand as it can. "Total need," which is the phrase used in the bill, is a completely different story. The concept is infiltrating into the approach on many problems, not housing alone, that need, not economic demand, must be served. The Government is being asked to grant credit on the basis of need, to loan funds on the basis of need, and to make outright grants on the basis of need. Need is rarely defined. In some instances it seems to consist in giving to certain groups in the country the comforts and advantages which a large body of citizens have obtained for themselves through hard work, self-denial, and saving. Aid given to one group is followed by a flood of demands asking for equal treatment for other groups. Provision on the basis of need in one segment of the economy only leads to demand after demand that Congress should make similar provisions in other segments of the economy.

Private enterprise will serve total demand best by having a political and economic climate in which to operate which is free from paternalism. Let private enterprise have real competition. Let it undertake the risk of enterprise. That is the way to foster a strong, alert, active industry wherein competition compels a never-ending search for ways to lower cost.

The third policy to be established by this bill is set forth in seven short lines. În 50 words the Government is committed to a vast slumclearance and housing program, which in the words of the bill is

to be extended to those localities which estimate their own needs and demonstrate that those needs cannot be met through reliance solely upon private enterprise and upon local and State revenues.

I wish to comment separately on the phrases "through reliance solely upon private enterprise" and "through reliance upon local and State revenues."

In regard to the policy that the program is to be extended to those localities that demonstrate that needs cannot be met through reliance solely upon private enterprise, I wish to ask two questions: Who is going to demonstrate that private enterprise cannot be relied upon to achieve as much as is economically feasible in the realm of housing? And, how is such a determination to be made?

In connection with the use of Federal funds to finance local public housing projects, I wish to emphasize that it is neither economic nor just that tax funds should be funneled into Washington and out again to serve special groups in particular States. Such funneling back can only be done under a system rife with paternalism and with dictation from an ever-increasing bureaucracy in Washington. Furthermore, the expense of collecting Federal tax funds and redistributing them back to States and municipalities is sheer waste. The rake-off from the taxpayers' funds has been aptly labeled "bureaucratic brokerage.' On page 2, line 3, I note with keen interest the words "to develop and redevelop communities." What does this mean? I cannot see an end to the far-reaching power of the Administrator. To develop and redevelop would necessarily place a responsibility, yes even an obligation, for the planning, construction, financing, maintenance, and so forth, of schools, streets, churches, garbage collecting, and all of the other multitudinous activities of operating a community. Certainly, gentlemen, you must agree that the scope of such an underlying theme or motive, and gentlemen, this section does purport to put your theme and motive into print, envisions a travesty on our American way of life.

During the past few years, during World War II, we saw evidence of the expansive imaginative minds of the public housers. Their dreams envisioned public meeting halls, incinerators, sewer plants, and a never-ending attempt to satisfy the need they claimed existed. This, as you well know, resulted in never-ending demands upon our Federal Treasury. This, when the entire program was conceived to supply only temporary living quarters for those employed in the war effort.

It is interesting to note an editorial in the Chicago Daily News, dated June 2, wherein they say:

The time is fast approaching when Chicago must stop talking about slum clearance and housing. Slums must be cleared and houses built.

Many months of careful planning by numerous State and city agencies make action possible-and necessary. The authority, the money and the planning, supervising, and technical skills are available. They can do the job.

The question is:

Does Chicago really want to get rid of its slums, stop the creeping paralysis of blight and provide decent modern housing for its people?

What incentive is there for Chicago to go ahead and assume the burden that is rightfully theirs in clearing slums when there is a possibility that an omnibus bill of this kind, S. 866, will practically take the matter out of their hands and relieve them of their responsibility? Certainly if Chicago went ahead with its own plans, the mayor and the city council and all connected with such slum-clearance projects

would be directly answerable to all the citizens of Chicago, with various service clubs and civic groups maintaining a keen interest in the efficiency, propriety, and proper administration of such works. Further, they would have the problem of assuming additional taxes and would then be called upon to determine whether such reconstructed areas should possess tax-free dwellings or should bear their proper proportion of the taxes, costs of schools, and other community facilities.

Gentlemen, I am sure that if you were to canvas the citizens of the country that have slum areas you would find that most of them are prepared or able to go forward with a program for the elimination of those slum areas. As long as Congress holds out a prospect that they will be relieved of the financial burden of doing the job themselves, and that other areas far removed from the problem will be called upon to assume their rightful burden, what incentive is there for them to go ahead?

Again, I refer you to a part of section 2, page 2, lines 5 to 8, and I quote:

The Congress further declares that such production is necessary to enable the housing industry to make its full contribution toward an economy of maximum employment, production, and purchasing power.

To intimate that these three phases at the present time need stimulation is hard to reconcile with the facts as stated by the various Government agencies charged with compiling such data. I may speak for the lumber manufacturing industry and bring to your attention that in 1947, approximately 37,000,000,000 feet of lumber was manufactured, and in 1948 our estimate is approximately 38,000,000,000 feet. This clearly demonstrates the ability of our segment of the economy to accelerate production when the demand and the economy require it. I am sure that this can be said about practically every other building material, with probably one or two exceptions.

You will notice that I have confined my remarks to section 2, as I stated in the beginning that I would. This does not in any way indicate that we are satisfied with the provisions of this bill. Our staff made an analysis of other features of this bill, which I think deserves consideration by this committee. To me it is amazing that an omnibus bill of this kind, which conceives of spending approximately $10,000,000,000, could leave less than one-half of 1 percent of the appropriation of that money to the discretion of the proper appropriating committees of the House and Senate. This, to me, is a miscarriage of proper governmental spending. It abrogates the responsibility of Congress in such matters.

This, and many other things could be criticized, but other witnesses have, and I am sure will, cover them.

I want every American to have a decent home, just as you do—and just as I want him to have a decent portion of all of the other necessities of life. But if, in order to have that home, he must relinquish the cherished privileges and responsibilities which go hand in hand with property ownership, then I say the price of that home is too great. It is not a question of objective, but of how that objective is to be achieved. If you try to achieve it by the policies outlined in S. 866, you will find before too many years have passed that the persons moving into these guaranteed, subsidized, standardized, tax-exempt

homes will bear very little rememblance to Americans as we define the term today.

I ask that you go behind noble-sounding phrases, and find out whether the effects of the measures that would be enacted into law by this bill will actually provide the American people with more and better housing-and, most important, if it will actually provide this Nation with better Americans.

The CHAIRMAN. Are there questions of Mr. Fuller?

Mr. TALLE. Mr. Chairman.

The CHAIRMAN. Mr. Talle.

Mr. TALLE. I would like to ask you one question, Mr. Fuller. Are you familiar with Douglas fir plywood?

Mr. FULLER. Yes, to a degree.

Mr. TALLE. Is that used a good deal in building?

Mr. FULLER. They are not a part of our association, however. That is one of the segments that are not. They are a specialized branch of the industry. However, I am somewhat familiar with their set-up. Mr. TALLE. Are you familiar with the tariff on the importation of Douglas fir plywood?

Mr. FULLER. I would hestitate to answer any questions on that because I understand that it is a very involved situation. The Government has linked some of the tariffs on the softwoods with the tariffs on the hardwoods, and now they are trying to resolve some of the differences that exist and get the tariffs straightened out. However, at this time I understand the tariffs on plywood are not exorbitant and we do have certain quotas.

Mr. TALLE. I will not read the entire letter I received from a constituent today-a letter from a wholesale lumber dealer-but this is what he says at the conclusion of his letter:

If Canadian plywood could come into the United States market duty-free, the price of plywood to the consumer would immediately drop 331⁄2 to 50 percent. Mr. FULLER. Well, I would question that quite a bit. There has been a reported shortage of plywood. I might enlarge upon the statement that someone made here earlier-I believe it was Mr. Carr-when he was speaking about Mr. Wyatt's program in setting aside certain materials for building prefabricated houses. That was one of the items they set aside, which worked a tremendous hardship on the building industry because it distorted the normal flow of plywood.

I might say that the plywood situation is now being discussed by the two Governments, the United States Government and the Canadian Government, and they are trying to resolve that program. I believe they will come to some decision in the very near future. I have been assured of that.

Mr. TALLE. I will read one more sentence from the letter:

Douglas fir plywood is no doubt in the shortest supply of any building material, and for the past 2 or 3 years it has been in the blackest market of any building material. One of the reasons for this is that there is at present a 40 percent duty on plywood imported from Canada.

Mr. FULLER. I have heard that, but I cannot speak with any direct knowledge about it.

Mr. TALLE. It is probably something which should be taken up with the appropriate Government department.