We are confident that Congress will not take this attitude and we believe that examination of the Taft-Ellender-Wagner bill will reveal that it is the major weapon we need to lead the attack on the housing crisis.

I, in passing, might say on behalf of my organization, that we hope we will not see what happened last year toward the close of the session after the Senate had passed this bill almost unanimously—that it was bottled up by various tricks in the House Banking and Currency Committee.

I think that the people of America and the veterans are entitled to know how the House and the Senate feel on this legislation, and that it should definitely come to a vote in both Houses.

I should like to examine briefly some of the major provisions of this bill and point out why the American Veterans' Committee has given its complete endorsement to this approach. I shall also describe briefly a group of amendments to the bill which we are proposing in order to provide additional incentives and aids to veterans and buildThe principal purpose of these amendments is to lower the cost of both rental and sale housing so that it will be within the reach of the average veteran.

ers.

I believe that since the AVC is a very poor organization, we only had eight of this list of suggested amendments which we are able to distribute, but we are making every effort to pass the hat and be able to produce some more, so every member of the committee will have them.

The major provisions of S. 866 deal with financial aids and guaranties to expand rental and sale housing construction. I am sure there is no need for a detailed description of the provisions enunciated so ably by Senator Taft. The yield insurance provisions with such liberalizations as may be necessary are important as a means of attracting large investment funds and guaranteeing their return, just as is done now with mortgage loans. The 50-year period of amortization which is part of the yield insurance plan is both sound and helpful in achieving lower rents and should be extended to the other plans for insuring mortgages for rental and cooperative housing. The yield insurance plan also contemplates a smaller return on the money invested, which should help reduce monthly rents.

Other provisions of the bill provide for longer term mortgages for rental cooperative and sales housing which, although very helpful, still do not go far enough.

AVC reiterates its whole-hearted support for the slum clearance and redevelopment provisions of S. 866 which should enable a successful attack to be made on the long accumulated blight of our cities. Those provisions would make it possible for the cleared areas to be reused in whatever manner the cities determine most suitable, including private or public housing, commercial or public buildings.

I would like to digress from this prepared statement for a minute. This bill is a very technical bill and I do not profess to be a technician on the subject, but just toss this out for your consideration: If the bill now states that the one-third contribution, which must be made by the cities, must be in cash, I think that you will find that most cities will not be able to do that.

Now, I am not sure as to whether that is demanded in cash or whether it can be made in the form of donation of streets and rights

of-way, public utilities, and so forth. But I think that that is something that should be looked into and I believe that subsequent witnesses will take that up in more detail.

The public-housing provisions are imperative as they represent the only means for providing homes for families of low income, and again, I would like to emphasize that there are one-and-a-half to two million veterans who cannot afford more than $30 a month rent. There are many veterans who unfortunately are in the low-income group and S. 866 requires that these veterans be given a preference for a period of 4 years after enactment.

In connection with that, I might say that this public-housing provision only contemplates 500,000 low-cost public housing units, which is only a third of the veteran demand alone.

Of course, I would like to see that expanded, in view of the figures that I have given on veterans in that group. In line with the comprehensive character of this bill, we are gratified to see there is an equally comprehensive program for rural and farm areas.

I believe the 1946 Bureau of Census report states that almost 50 percent of our farm-housing buildings are now in need of major repair or complete renewal. These farm and rural area provisions will go a long way to alleviate that.

The amendments being proposed by the AVC to S. 866 have been distributed to members of the committee. I regret that the data on these sheets were prepared with reference to the bill which passed the Senate last year and that because of the pressure of time it has not been possible to adapt the amendments, where necessary, to the bill now under consideration. In most cases, however, I do not believe that this will cause difficulty. Mr. Paterson, our legislative representative, will be glad to work with the committee in adapting these amendments to S. 866.

Low-rental housing: AVC believes the period of amortization for mortgage loans on rental housing should be extended to 50 years and the interest rate reduced to 3 percent.

My friend, the mayor, feels 2 percent. I think somewhere between 2 and 3. In our study of it, we felt it should be reduced to 3 percent and of course this reduction will be reflected in the lower rental charges. The effect of these provisions would be to reduce a $60 monthly rent to around $48. It is also necessary to provide for insurance of 100-percent loans for rental housing projects for a period of 1 year. That is our recommendation, during the present housing crisis, in order to overcome the hesitancy of investors to invest in large-scale housing projects, given the present inflationary costs. This purely suggestion due to the emergency-the tremendous need which corresponds with the inflationary costs.

Similarly, on projects undertaken under the yield-insurance provisions within a year there should be 100 percent insurance of return. Now, that again-notice the important phrases, "within a year" and I think that if we raised that to 100 percent we would attract the insurance companies who, I think the Senator reported, were perhaps not so interested in this feature. All the above provisions should be equally made applicable to mutual and cooperative projects. Incidentally there is a great veteran interest at present in mutual and cooperative housing because an apartment is considerably cheaper.

We in the AVC have organized a special office in our national headquarters to encourage and to guide this mutual cooperative housing.

The CHAIRMAN. I am glad you brought that out. I was speaking at Chicago last Wednesday night to the National Housing Conference and I touched upon that. This matter has kept too much under cover, in my judgment.

In my opinion, as to cooperative housing, especially in large units, the veteran would benefit very much by some of the factors involved there.

Mr. ROOSEVELT. Yes, sir. In New Brunswick, N. J., one has been under way now for about 5 months and they have done a very remarkable job. They estimate their savings as between 12 and 15 percent. The CHAIRMAN. And I think $11 a room-something like that. Mr. ROOSEVELT. Yes, sir; as low as that.

The CHAIRMAN. Thank you.

Mr. ROOSEVELT. S. 866 is, by the way, less favorable for cooperative and mutual projects than S. 1592, as it passed the Senate. Another important provision of last year's bill which should be restored called for a 1 percent advance to cooperatives to enable them to undertake the planning and preliminary work prior to financing.

If a cooperative wants to get going now, they have no funds with which to get architectural advice, legal assistance, and other prefessional guidance that they do need, and this 1 percent was in last year's bill and I think it would be very helpful and stimulate this cooperative endeavor if that were restored.

Amendment No. 11 in our list here provides for veterans' preference on new rental housing along the same lines as S. 866 does for public housing.

Sales housing, amendments 4 and 7: AVC recommends an extension of the amortization period for home owners to 40 years and reduction of the maximum interest rate to 3 percent. I believe that in last year's bill-at present it is 32 and in the 866 it is reduced to 30. We feel it would be very helpful if that was increased to 40 years with adequate safeguards as to supervision of maintenance. Of course, these "paper" houses that are going up now could not meet the requirements, because obviously many of them will not stand for 40 years.

The Mayor was talking about that earlier. Out in Long Island where I happen to live, in several instances already in some of the houses the plaster is starting to fall down, the pipes are wearing away, the houses have actually been sold where there was no connection between the toilet system and the sewer main in the street outside. The CHAIRMAN. How did the building inspectors pass that? Mr. ROOSEVELT. That is why they are suing the city, sir. Amendment No. 4 permits the $5,000 and 95 percent of appraised value mortgages to go up to $6,700 or 95 percent of the Administrator's estimate of necessary current costs.

This amendment, as well as amendment No. 3, is necessary in order that the bill may have some realistic application to housing constructed at present-day costs. Amendments for the same purpose are necessary on rental housing. These are amendments Nos. 10 and 8 in our list.

Amendments Nos. 1 and 2 cover the eventuality that the borrower may be faced with periods of unemployment, sickness, or other misfortune not within his own province of avoiding, in providing for

temporary extensions to meet these emergencies.

These amendments are particularly applicable to the veteran who may be at present buying over his head out of necessity.

I have had many letters-I am sure many of you have-in the last year, from veterans who do not want to pay the prices that are being asked for these houses today, but they have no place else to go and they go ahead and put their name on the line, put a down payment on the line, and then pay the monthly installment that comes to $65 or $75.

I have talked with many of those veterans and I regret to say that they consider that as paying rent and whenever anything better comes along they are going to move out.

If they are given the chance, in case of unemployment, to have a 3-year-that is what we recommend-3-year postponement of their amortization payments, they will tend to continue owning those houses.

Senator MCCARTHY. Mr. Chairman, may I interrupt there?
The CHAIRMAN. Mr. McCarthy.

Senator MCCARTHY. Mr. Roosevelt, would you agree that the exceptionally high cost of building today is due to a considerable extent to the restrictive practices indulged in by your building trade? Mr. ROOSEVELT. You used the words "considerable extent." I would not use that phrase; no, sir.

Senator MCCARTHY. Let me ask you this: Would you agree with Mayor LaGuardia when he said that the present housing shortage is due as much to restrictive practices indulged in by your buildingtrade union as to any other cause?

Mr. ROOSEVELT. No, sir; for this reason: I would have agreed with you if the Wyatt program had continued, because under the Wyatt program we would have reached building rate at which this spring we would have needed over a million employees-laborers—in the building trades.

However, I believe Mr. Creedon recently announced that the prospect of a million homes this year has gone by the board and we now would be lucky to get 750,000.

Senator MCCARTHY. Let me interrupt you. You are getting off my question.

Mr. ROOSEVELT. I am coming back to your question.

Senator MCCARTHY. Let us say a veteran is paying $10,000 today for a home that is being built. Will you agree with me that at least part of that $10,000 which he is paying should not be paid and that he is paying it only because of the restrictive practices enforced by the building trade union?

Would you agree to that?

Mr. ROOSEVELT. I would say that part of that $10,000 is definitely due to the restrictive practices, but I think I would like to digress, if that answers your question. I would like to put in here:

I know of many instances where the building trades have permitted. veterans who met their standards, due to their experiences and training during the war, to work under veteran work permits side by side with union labor.

I would also like to point out that only 25 percent-it is a little more than that, about 27 percent of all labor employed in the building trades is unionized, and that if a bill such as this were passed,

which guaranteed a market for building trade labor for the next 10 years, then the union leaders would see the feasibility of opening up their doors and taking in more members, because they will see a continued demand for labor.

What they are afraid of is, and the reason they have continued these restrictive practices is, because they are afraid that the famous boom of '25 and '26 and '27 will reoccur, and that building trade labor will find no market.

Senator MCCARTHY. I assume we agree on this: That the situation in the building industry is rather peculiar in that, in that particular industry it is not a case of a labor-management fight, but your restrictive practices are approved almost as much. by the builders of conventional homes as they are approved by your union leaders?

Mr. ROOSEVELT. (Nodding.)

Senator MCCARTHY. And we also agree that unless we do something about that particular situation, everyone who is now building, paying a price completely out of line with what he should pay, completely out of line with the actual value of the house he is buying

Mr. ROOSEVELT. Not completely out of line. I would not say completely out of line. I see what you mean. Go ahead.

Senator MCCARTHY. In any event, when we undertake to guarantee with tax money the cost of building a home, will you and I agree that part of that cost is because of restrictive practices indulged in by the building trade union; that we are in effect subsidizing those practices; is that not right?

Mr. ROOSEVELT. I would not say that, Senator.

Senator MCCARTHY. Why not?

Mr. ROOSEVELT. I think that you will do much to relieve those restrictive practices by the very passage of this bill and the guaranty of a steady market for labor, and, given that, labor will abandon many of those restrictive practices.

Senator MCCARTHY. Let us not look at that solely from the standpoint of labor. I believe we will agree that the builders of conventional homes are cooperating fully with your unions to perpetuate these practices, so we are not concerned with some evil which we can lay solely at labor's doorstep.

Getting back to this, we agree on this: That we do have those restrictive practices, that they are causing both an increase in the cost of homes and also causing a shortage of homes. Of that there is no question, is there?

Mr. ROOSEVELT. (Nodding.)

Senator MCCARTHY. So if we are going to embark on a practice of guaranteeing the loans for the builders of those homes, then you would agree that we should definitely go into the question of attempting to eliminate some of those restrictive practices. Am I right?

Mr. ROOSEVELT. No. I do not think by guaranteeing I will put it this way: The guaranty might be guaranteeing a continuation of restrictive practices, but it is also guaranteeing a continuation of price level which is way out of line.

In other words, we are at a price level today which I personally feel we would not have been at if we had continued some of the controls for a longer period. I think that the cost today of an average home is a very complex one. It is partly due to the restrictive prac

tices of labor.