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Rent, wages, and the cost of living in the United States-Continued

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(Also on file with the Senate Banking and Currency Committee are more charts and literature.)

Mr. ENGLAR, It is difficult to understand why in the face of these facts the proponents of the T-E-W bill would advocate such a program when a simple solution has been suggested by people who are familiar with real estate.

The solution is certainly worth a trial. It would not cost the Government a cent. It would save millions of dollars monthly in administration costs and if the landlords of the country actually made a profit, as our opponents seem to fear, the Government would get a large portion of such profits in taxes.

The T-E-W bill is an extension of a planned economy and Government controls. To superimpose this legislation on our industry is just another step in bringing about the complete take-over of the $50,000,000,000 rental property industry that has been the target of those who hope to achieve a socialized United States.

The character of this legislation is plainly shown by scrutiny of the list of organizations that have urged its passage. These organizations are the same as those who have in the past and now oppose any modification of rent control.

Our association believes that these hearings involve more than the T-E-W bill. They involve more than rent control.

Shall we follow the pattern of the European nations that continued government controls and compulsion after World War I?

The future of housing is in your hands. Without control and Government domination, we have built a nation that is the envy of the world. Remove the discrimination against the rental industry and it would prove again that private enterprise will solve the housing shortage in the American way.

Senator Buck. Thank you. Any questions?

Senator TAYLOR. Your solution then is to remove all control?

Mr. ENGLAR. We think that is what eventually has to be done. The position of our association has always been that it had to be a gradual step, that it was because of the unbalance of the law of supply and demand in the housing industry that complete removal at this time would be bad for landlords and bad for tenants.

I testified here before the committee about 2 weeks ago that I felt very definitely that in view of the scrambled condition of the housing situation, that controls could safely be put off within 6 months of the horizontal increase in rents.

I have been in this business for 25 years. I manage a large number of properties. I know what the situation is, and I am convinced that if there were an immediate increase horizontally in rents, that within 6 months time the apartments that are off the market, the readjustments, some assurance that we would not be constantly harassed by Government controls, that we would not have the serious housing shortage.

What I ask you to do is to give us a chance to prove that.

Senator TAYLOR. That was the argument advanced when price control was killed, if we just get out and let it go, everything would be fine, and now prices are going clear out of sight. There is no way to get them back. If it was not for the forbearance of labor in making new demands, we would be in the midst of a great wave of strikes again, if they insisted on keeping up with the cost of living here.

When you once let it go, you cannot get it back. There is no way to go back and try over again. That is the wrong solution.

Mr. ENGLAR. That was the argument against the horizontal increase, that if rents went up, wages would have to go up again, but we have been sitting here since 1941 while wages have gone up about 80 percent on the revised chart since 1941, and we would be just satisfied right now if we had a small percentage of the increase in rents that labor had in wages.

Senator BUCK. Any other questions?

Thank you.

The committee will recess now and meet again this afternoon at 3 o'clock.

(Thereupon, at 11:50 a. m., the committee recessed, to reconvene at 3 p. m., the same day.)


(Pursuant to the expiration of the recess, the committee reconvened at 3 p. m.)

Senator BUCK (presiding). The meeting will come to order.

I will ask the first witness, Mr. George West of the Chamber of Commerce of the United States if he will come forward.


Mr. WEST. Mr. Chairman, if you have no objection, I will stand up and do my talking.

Senator BUCK. You may.

Mr. WEST. My name is George W. West, of Atlanta, Ga. I appear before this committee as a representative of the Chamber of Commerce of the United States, which I serve as chairman of its construetion and civil development department committee. The views which I shall express are those of the National Chamber as expressed in a number of policy declarations approved by vote of the more than 2,600 local chambers of commerce and national trade associations which comprise its membership. These organizations have an underlying membership of over a million individual businessmen in all parts of the country.

Our opposition to S. 866, and to other bills of similar nature now before this committee is based primarily upon a fundamental convic tion that the improvement of housing is by its nature an activity which should be carried out by the people of each community.

The national chamber is in full accord with the desirability more than that, the necessity-of improving the standard of housing in our communities. We hold no brief for slums. But we cannot agree with the proponents of this legislation that the way to improvement is to set up an elaborate and expensive establishment in Washington to administer large Federal subsidies. This method has been tried and found wanting.

Past experience with Government housing has demonstrated the fact that it does not provide shelter for the lowest income group. In addition it carries with it very definite potentialities of Federal domination in local affairs. Congress itself confirmed these conclu

sions by refusing to extend the subsidized Government housing program of the old United States Housing Authority after 2 years of trial.

In its present form S. 866 calls for an expenditure of well over $6,000,000,000, over a period extending as far as 45 years into the future. While this money would be used for a number of purposes, the net accomplishment in terms of low-rent dwelling units is set at accomodations for 500,000 families under the limitations of title IX of the bill itself. This would take care of less than 1%1⁄2 percent of the 38,000,000 families in the Nation.

Estimates of the number of families now living in substandard homes vary widely, depending upon the definition used, but they range from a low of 2,000,000 families to a high of over 12,000,000 families. Whatever figure is accepted, it is apparent that federally subsidized construction on the scale contemplated in the pending bill cannot begin to meet the need.

SENATOR BUCK. I understand that you make the point that after 45 years we will spend $6,000,000,000 and provide homes for only 500,000 families.

Mr. WEST. Until 13 years ago, I do not think we spent any money on the subject at all.

Senator BUCK. But that is what we would do under this bill?

Mr. WEST. Under this bill; yes, sir. I was thinking backward instead of forward. That is right.

Senator Buck. All we would accomplish would be the expenditure in 45 years of $6,000,000,000 and accommodate 500,000 families, when there will be probably several million that need that.

Mr. WEST. That is right, $6,892,000,000, if my figures are correct. Either the contemplated housing program must be much larger and more expensive, or the Federal program will be open to the same accusation now leveled against private industry by the proponents of public housing; failure to do the job.

The seriousness of the budgetary situation of the Federal Government at this time needs no underlining. Recently on the floor of the Senate, the vital necessity of reducing Federal expenditures was stressed by the chairman of the Appropriations Committee, Senator Bridges, of New Hampshire, who pointed out that the annual interest charge on the national debt now exceeds the total general property tax collections in 1942 for all the 48 States, including their counties, cities, villages, and school districts. "If the Federal Government is to put its financial house in order," Senator Bridges stated, "it must start now. The key to that start is the reduction of Government spending."

The fact that the budgetary situation will not permit the use of Federal funds for Government housing does not mean that we must continue slum conditions. All over the country communities are actively exploring the possibility of remedial measures, utilizing their

own resources.

In Indianapolis, Detroit, and Chicago, to cite three outstanding examples, slum-clearance projects are now under way, and many other communities are planning similar projects. More than 20 States have passed laws to facilitate urban redevelopment by their respective municipalities, and a number of additional States have such measures under consideration. A decision by the Federal Govern

ment to keep out of this field would serve to stimulate additional efforts by local and State governments.

Furthermore, as the private building industry gets into its stride in providing new housing accommodations, more and more older but still useful dwellings will become available for those unable to build for themselves.

Lifting the housing standards of the American people is a problem which calls for clear thinking. It will not be accomplished by name calling, nor by passing a law dropping the entire problem into the lap of the Federal Government. In the last analysis, improvement must be accomplished by two sound methods: lowering the cost of home construction, and raising the economic level of the American people. Progress is being made along both lines; it will be facilitated in the local communities and the construction industry can be assured of freedom from Federal interference in the solution of a problem essentially local in its nature.

Senator Buck. I do not have any questions, Mr. West. I want to thank you on behalf of Senator Tobey and the members of the committee for the time and inconvenience you have been put to in coming here to testify.

Mr. WEST. Thank you, Mr. Chairman. Thank you very much. Senator BUCK. The next witness is Mr. James W. Rouse, chairman of the legislative committee, Mortgage Bankers Association of America.


Mr. ROUSE. Mr. Chairman, I have a statement here which I filed with the committee, but I would just as soon set it aside and simply review it.

Senator Buck. Just as you please.

Mr. ROUSE. Thank you. I represent the Mortgage Bankers Association of America, which is an organization primarily of life insurance companies. They are mortgage loan correspondents of the banks and building and loan associations. I am chairman of their Federal legislative committee, and appear in that capacity.

As to my own business, I am a partner in Moss-Rouse Co., which is a mortgage company in Baltimore.

Our approach to this legislation is primarily on two phases of it; first, that aspect which establishes the job of National Housing Administrator and a Coordinating Council and the National Housing Commission.

We consider that the establishment of the office of an administrator over the top of the existing agencies, Federal Housing Administration, Home Loan Bank Board, is undesirable and ineffective in the accomplishment of any useful purpose.

Senator BUCK. You like the set-up in the old bill better, then, if you have any?

Mr. ROUSE. We do not like the National Housing Agency, and we do not like the substitute. We feel that they have been assigned their missions by Congress. They are the tools, the methods by

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