THE SITUATION IN 1944 Since 1940 probably no net improvement has been made in the quality of farm dwellings, owing to the difficulty of obtaining materials during the war emergency. However, several forces have reduced the number of houses needed on farms and have enhanced the ability of farm families to afford better dwellings. There has been a reduction in farm population, a reduction in the number of farm operators living on farms, an increase in both full-time and part-time off-farm employment opportunities for farm people, and an increase in farm income due both to higher production and higher prices. It has been estimated that there was a reduction of about 4% millions (15 percent) in rural-farm population from April 1940 to April 1944 and a reduction of about three-fourths million in the number of farm-operator households on farms.1 By 1944 the total volume of farm production had increased about onethird from the average production in 1935-39 and farm prices had nearly doubled. Many more part-time and full-time off-farm jobs had become available to farm families. The opportunity for more regular and productive employment, either on or off the farm, and to earn higher incomes obviously has increased the number of farm families that can afford acceptable housing under present conditions. Also the number of houses needed on farms under present conditions is smaller than the number needed in 1940. As compared with about 2,640,000 operator families who were living in "repairable" or "nonrepairable" houses in 1940, and were unable to finance "acceptable" dwellings at that time, either from farm or a combination of farm with off-farm employment, only around 2 million such families were living in the same type of houses in 1944, if we take into account the reduction in the number of farm-operator households and assume that not many operator families living in "acceptable" houses were involved in this reduction. A rough estimate indicates that about half of these families, or around 1,000,000, were able to finance acceptable dwellings under 1944 conditions, while 1,000,000 still were unable to do so. In summary, under 1944 conditions of practically full employment, about 5,000,000 operator families were in need of housing on farms. Approximately 2,000,000 now occupy "acceptable" houses, and about 3,000,000 are in "repairable" and "nonrepairable" houses, approximately half in each class. Of this 3,000,000 about 2,000,000 are in position to finance acceptable housing, if appropriate housing credit can be made available to serve their needs, while about 1,000,000, even under 1944 conditions, had insufficient incomes to finance acceptable housing. About half of these 2,000,000 who can finance acceptable housing need to replace their dwellings and about half of the million who cannot finance acceptable housing also need new houses. Available information did not permit an estimate of the number of nonoperator families, including many farm laborer families, living on farms in "repairable" and "nonrepairable" houses who still are unable, under present conditions, to finance the replacement or improvement of their homes. Neither did it permit an analysis of the special housing problems of farm laborers and tenants. It may be pointed out, however, that while an owner-operator with sufficient income is free to go ahead and improve or replace his dwelling if he desires to do so, unless he needs and is unable to obtain a type of credit which is suitable to his situation, a tenant-operator usually is not. His problem of getting acceptable housing is often very difficult because even though he may have an ample income his ability to obtain acceptable housing may be dependent in part upon the willingness of the landlord to invest in acceptable tenant housing, and in part upon availability to the landlord of suitable housing credit. Measures to bring about needed adjustments and improvements in farming practices to increase efficiency and thus to make the farm operator's labor more productive should be generally helpful, as should measures to reduce the cost and to expedite the construction of acceptable housing. Modifications of the credit mechanism and other devices may prove to be helpful in remedying housing conditions on the farms of operator families who have adequate incomes. However, if a substantial portion of the million farm-operator families who even under 1944 conditions could not afford acceptable housing are to be adequately housed, it appears that such additional steps as the following may be required: 1. Increase the income of some of these families from farming by enlargement of small farms or by some other means. 1 Series Census-BAE No. 1, Estimates of Farm Population and Farm Households, April 1944 and April 1940, January 14, 1945. 2. Increase the income of other families in this group from supplementary sources or by full-time off-farm employment. 3. Use temporary subsidies, in accordance with some agreed upon minimum standards, particularly with reference to health, until the more basic measures take sufficient effect and in cases in which such measures are not fully applicable Mr. BRANNAN. As you will observe from the statement I made so far, and from the language of the bill, the approach to the rural-housing program has been made from the standpoint of the farm. A farmer and a farm, with respect to housing, are in an entirely different situation than the man in rural areas. A person can move in and out of å house without changing his job in the city, but a man cannot move in or out of a farm, the house on his farm, without leaving the farm. Therefore, each time you talk about improvements to a farm, each time you are talking about housing, you are talking about permanent improvements to a farm, and hence we have started our approach to the program from the standpoint of the farm and the farm family. Senator Buck. Thank you, Mr. Brannan. Are there any questions, Senator Taylor? Senator TAYLOR. No, sir. Senator BUCK. Senator Flanders? Senator Buck. I have not, either. We thank you for coming, Mr. Brannan. Gentlemen, that concludes the witnesses for the day, and the committee will adjourn, to meet again on March 20, at 10 o'clock in the morning. (Whereupon, at 3:30 p. m., the committee was adjourned, to reconvene on Thursday, March 20, 1947, at 10 a. m.) HOUSING THURSDAY, MARCH 20, 1947 UNITED STATES SENATE, COMMITTEE ON BANKING AND CURRENCY, Washington, D. C. The committee met at 9:30 a. m., pursuant to recess, in room 301, Senate Office Building, Senator Tobey (chairman) presiding. Present: Senators Tobey (chairman), Buck, Flanders, Bricker, McCarthy, Maybank, Taylor, Fulbright, Robertson, and Sparkman. The CHAIRMAN. The committee will come to order. Mr. Ketchum? STATEMENT OF OMAR B. KETCHUM, DIRECTOR, NATIONAL LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED STATES Mr. Omar Ketchum, director of the national legislative service of the Veterans of Foreign Wars. We are glad to have you with us. Mr. KETCHUM. Thank you, Mr. Chairman. I should like to have the privilege of presenting, just so the committee may know him, our national American housing officer, Mr. Wesley D. Pearce. I would like to present to the committee our national housing officer, Mr. Wesley D. Pearce. Mr. Chairman and members of the committee, I am grateful for this opportunity to present the views of the Veterans of Foreign Wars with respect to the bill, S. 866, which we believe establishes a sound, comprehensive, national housing policy and program. Some of the members of this committee may recall my testimony before the committee in December 1945 in support of the bill S. 1592, Seventy-ninth Congress. The bill presently under consideration retains the principal provisions of the former bill. I wish at this point to advise that the Wagner-Ellender-Taft bill of the Seventy-ninth Congress was endorsed by the forty-seventh national encampment, Veterans of Foreign Wars, held in Boston in September 1946, and that the endorsing resolution petitioned the President to call a special session of the Congress to consider the bill. We are hopeful that this committee and the Congres swill expedite action on this measure so that this Nation can set about doing a job that has too long been left undone. In the spring of 1946 our organization was heartened by the passage of the Veterans Emergency Housing Act. Since that time we have witnessed with anxiety the ceaseless bickering, name calling, recrimination, and "loopholing" that has made a molehill out of what we had been led to believe would provide a solution to a housing problem which was essentially a national emergency. Millions of veterans today recall how a magnificent American ingenuity and engineering skill placed in their hands a military machine which exceeded their wildest imaginations. These same veterans today stand as mute witnesses to an apparent break-down of this phenomenal industrial potential when it comes to the building of homes-decent homes that the average veteran can afford to buy or rent. The veterans decried the emergency-and the President declared a housing_emergency. The veterans asked for controls and got controls. But in all this there was one important factor, dormant but very pertinent. A highly complex long-range problem, affecting the basic needs of a great majority of the people, was groping for solution through the medium of temporary halfway legislation. For example, the emergency housing program was designed to speed up the flow of materials to houses for veterans-but there was no machinery for bringing down the cost of houses to the veterans' economic level. The Veterans of Foreign Wars had already reached the conclusion that the housing emergency would not be solved until a national housing program had been developed as part and parcel of a national goal to provide a decent home and suitable living environment for all its citizens. The opposition to the Veterans Emergency Housing Act was a vociferous and powerful one. This opposition was kept alive by the comforting thought that it was all a matter of temporary controls and if the controls did not work-or if they were caused not to workout the window they would go. That is why it is important to us that this comprehensive legislation be enacted into law-that is why it has for over a year been part of our national housing program. The details of S. 866 have already been presented to the committee and I do not propose to go into a repetition of what the various titles and sections purport to accomplish. The Veterans of Foreign Wars is confident that title V, which expands the authority of the Federal Home Loan Bank Administration and the Federal Housing Authority, will permit a much wider participation by the veteran in the loan provisions of the GI bill of rights. We commend to you the plan set forth in title VI which is designed to assist private enterprise to serve the middle-income families. The more liberal home financing-95 percent of cost; 30 years to pay; 4 percent-have long been an objective of the Veterans of Foreign Wars. The assistance to private enterprise for the construction of rental or mutual-ownership housing projects-90 percent insured loans; 40 years to pay; at 4 percent-should stimulate the construction of multiple dwellings. It is estimated by us that the combination of the above liberal financing and home ownership provisions will achieve a monthly cost to the veteran of not to exceed $50 a month even during a period of abnormal costs. The yield insurance for rental housing should, in our opinion, go far toward the solution of the most vexing problem facing the lowincome veteran whose greatest need at this time and for many years to come will be low-cost rental housing. In our opinion the above incentives to rental housing will stimulate a large volume of such housing in the area between $30 and $50 per month. Another group of veterans-those who cannot pay more than $20 to $30 a month for housing-is definitely the impossible man for private enterprise. For these veterans the locally administered public low-rent housing to be constructed over a 4-year period, with preference to veterans, is especially commendable. There are two suggested amendments which we would like to offer and which we believe would materially strengthen this bill; first, with respect to veterans and second with respect to an immediate attack on the housing shortage. The suggested amendments are as follows: (1) Amend section 1201 (c) under title XII, page 104, to provide a specific top priority for veterans or veterans' cooperatives to purchase Government-owned permanent war housing development at a fair value on a negotiated bid. The Federal Public Housing Administration, in the sale or disposition of Government-owned permanent housing, has apparently established a policy of giving preference or priority in purchase to present occupants, irrespective of veteran or nonveteran status. We believe that veterans should be given the first opportunity, either as individuals or in cooperatives, to purchase these properties. Senator MCCARTHY. May I interrupt there? The CHAIRMAN. Yes, sir. Senator MCCARTHY. Mr. Ketchum, in connection with what you have to say, I believe the FPHA you mentioned have a priority that runs like this: No. 1, priority to the municipality in case they care to by the project? Mr. KETCHUM. That is right. Senator MCCARTHY. No. 2, to the present occupants. No. 3, sort of a fictitious priority to veterans. We find, however, that there is another system of priority that works through this whole priority system. They have been attempting to dispose of the projects built under the Lanham Act, on a sort of cooperative basis. In other words, sell the property to the occupants. The occupant would never get title, but would have a permanent interest in the property. They have been offering loans that are very inviting if the purchase is made on that basis, making it very difficult, however, to buy the property. The veterans' priority which is No. 3 along the line means nothing at all. In fact, the present priority of present occupants means very little unless he wants to go into a cooperative system of buying. Bear that in mind. Mr. KETCHUM. I appreciate that very much. However, there are a few of these properties that do lend themselves to purchase by individuals, where they are of such a nature, in individual communities. That is why I mentioned preference to veterans or veterans' cooperatives, because there may be instances where a veteran could purchase an individual unit within one of those housing projects. Senator MCCARTHY. I was not going into the merit of your thought at all. I was merely pointing out to you what has presently happened to the war housing. Mr. KETCHUM. I understand and I appreciate that. To obtain such a preference it will be necessary for the Congress to |