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1. Drastic regulatory legislation: i. e., a housing code, is essential if private slum reclamation is to have any chance of success. Otherwise the old process of deterioration will simply be repeated.

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2. Public housing does not provide for the low-income part of the population. These statements are startling because the first practically promises that they will support a housing code that has been under consideration by the District Commissioners for about 9 years; the second disregards the facts.

The draft housing code was called to their attention during the Burton committee hearings 3 years ago, but the only result then was to stop their advocacy of regulation. Now it seems that they realize such a measure is necessary if the old process of slum creation under private operation is not to be repeated.

This is a real advance which would be hailed by the "housing reformers" of past generations who, for more than 100 years, tried to set good housing standards by law and failed because of opposition by the house-building interests who claimed that such standards were financially impossible. Now that public housing has shown they are practicable, the impossibility seems to have disappeared. But, of course, this about face has not yet taken the form of support for an effective code. It is still only lip service.

The second statement calmly disregards what has been done right under their eyes. The National Capital Housing Authority has provided for the lower-income group, including the blind and other beneficiaries of public and private relief. It has done this from the beginning. It did it at a time when private landlords were so reluctant to accept charity tenants that these tenants had to conceal the fact that they were recipients of relief if they were to get houses.

Here, then, are two great achievements that must be credited to public housing. Of course, it is a question of how long these achievements would remain if public housing were done away with.

Even more flattering to public housing is the adoption, even though only in promissory form as yet, of some of the National Capital Housing Authority's demonstrations in slum reclamation. These promises, after 3 years, are no nearer actuality than they were in the days of the Burton committee. As Mr. Carr says, their men are still studying.

One difference between now and 3 years ago, however, is that (1) they have dropped reference to the NCHA's projects which gave them the basis for their study and tentative promises; and (2) they have ignored one of their proposed schemes which, on analysis, was shown to involve much more cost to the taxpayer than does public housing and to result in lower taxes than does the existing slum. (See the enclosure entitled "The Monroe Warren Plan.")

In the interest of brevity may I make a few terse comments on statements of these witnesses. These I shall be glad to amplify if you so desire.

1. Public housing does not provide for. the indigent. It does. See attached documents dealing with the 20 percent cut in relief allowances of 222 of NCHA tenant families.

2. Public housing retains tenants who can afford rents of proper private dwellings.

It does not when proper private dwellings are available. NCHA graduates such tenants. It had a notable graduation in 1945. Counting on promises that more moderate rental private dwellings will be erected this year, it is requiring all its tenants with family incomes of $3,000 or more to seek private dwellings. 3. Public housing construction costs are much higher than those of private. See the attached comment "Private vs. Public" based upon a bulletin issued by the National Home and Property Owners Foundation. Similar comment is available in the Fort Dupont vs. Greenway comparison made before your committee. The Fort Dupont cost per room was less than the Greenway cost.

4. Public housing's economic (cost) rents are 30 percent more than the average private rent.

This is an astonishing allegation. NCHA is proposing to raise the rents of its highest income tenants considerably above the economic level up to a comparable level, in order to diminish tenant reluctance to seek private housing. This letter I shall be glad to amplify if I have your permission.


Executive Officer.


(Pp. 1090 and 1098-1099)

The Home Builders Association submitted a plan for private slum reclamation as a substitute for NCHA's program. This plan is based upon two subsidies. First, it proposes a capital grant to write down the value of land. This we shall discuss later, along with other subsidy proposals. Second, in place of the NCHA graded rents, it proposes rent certificates to be provided through the Board of Public Welfare. We shall now consider this rent certificate proposal. Let us see the relative costs of the Home Builders' plan as compared with NCHA graded rent system. Let us also compare NCHA's economic rents with the rents proposed or scheduled by the private builders.

This brings us to a consideration of chart IV in which there is a comparison of NCHA economic rents and the proposed rents under the plan of the Home Builders Association. The Home Builders admit that they cannot achieve rents for two-bedroom dwellings under $35 shelter rent, or $42.50 with utilities. Only a small proportion of the slum dwellers can pay such rents. (The chart referred to is as follows:)

CHART IV. Cast comparisons: Rent and subsidies (National Capital Housing Authority economic rents)

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Home Builders plan (proposed)

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Scheduled rents for Negro housing under priorities now held by builders (proposed).

National Capital Housing Authority project (actual economic).
Saving, under National Capital Housing Authority program, in the subsidy
needed in housing families who can afford less than econmic rent...

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1 Various sizes averaging less than 2 bedrooms.

Chart II shows what rent these slum dwellers did pay according to the 1940 census. It shows that 76 percent of them would need assistance to live in Mr. Warren's houses, assuming that some of these houses have three and four bedrooms instead of two, but that the shelter rent remains at $35. But Mr. Warren proposes to provide no more than two bedrooms, or, in an alternative proposal, only one bedroom, for half of his dwellings. Such dwellings, as has often been said here, would not meet the requirements of that large proportion of families now living in the slums who have several children and therefore need units with more than two bedrooms. Mr. Warren's plan would not meet the need of

these families. * * *

The acquisition cost of this square would be $297,000-assessed value plus 30 percent. It would be sold to the private builders for $63,000-Mr. Warren's figure the Government, i. e., the District taxpayers, taking a loss of $234,000. They could add this $234,000 to that year's tax roll, so at once paying for the reclamation of a single small square containing 70 houses-Mr. Warren's proposed redevelopment. Or they could amortize it over a period of 33 years, corresponding to the life of the 70 houses. This would cost the taxpayers $11,268.53 annually. But that is not all. That square today is taxed at the rate of $3,998 per year. When it has been redeveloped, Mr. Warren proposes that the taxes shall be $3,780, a further loss to the taxpayers of $218 annually. Technically, that square, after private development will be paying taxes. But as a result of the operation, District taxpayers as a whole will be out of pocket at least $11,486 a year. Compared with this, tax exemption on the present value of that square would be $3,998, only a little more than one-third the Government subsidy asked for private reclamation under the Home Builders' plan.

In summary, the Home Builders propose a much more expensive substitute for the present public-housing program in the District of Columbia. In place of one direct contribution by District taxpayers, they propose two, the first of which alone would impose a heavier tax burden than does the present tax exemption of public housing. These two proposed contributions by local taxpayers would be, first, capital grants to reduce development cost; second, rent certificates to assure landlord profits.



Lake Mills, Wis., April 18, 1947.

United States Senator, Washington, D. C. DEAR SIR: At a meeting held April 15, 1947, the Common Council of the City of Lake Mills, Wis., endorsed the Taft-Ellender-Wagner housing bill, the bill S. 866, and the companion bill, H. R. 2523, by a unanimous adoption of the following resolution:

"Resolved, That the Common Council of the City of Lake Mills, Wis., go on record favoring the passage in Congress of the Taft-Ellender-Wagner housing bill, and bill S. 866, and companion bill H. R. 2523.

"Resolved further, That the clerk contact our representatives in Congress and members of the committees considering the bill, advising that the city of Lake Mills favors its passage."

Very truly yours,


H. R. BLACK, City Clerk.


April 18, 1947.

United States Senate, Washington, D. C. DEAR SENATOR WILEY: I am submitting herewith a copy of a resolution adopted' by the Common Council of the City of South Milwaukee on April 15, 1947, relative to the Taft-Wagner-Ellender bill. The resolution is self-explanatory, and it is hoped that you will act favorably when the bill is up for passage.

Yours sincerely,


City Clerk.


Whereas there is a national housing crisis in that there are not sufficient housing accommodations for all of the citizens of this country and particularly for the veterans of World War II; and

Whereas it is imperative that steps be taken to relieve the housing situation and to facilitate the reconstruction of new homes; and

Whereas the Taft-Wagner-Ellender bill is a step in the right direction to ease the housing situation and to make possible the construction of more homes: Now, therefore, be it

Resolved, That the Common Council of the City of South Milwaukee go on record as favoring the passage of the Taft-Wagner-Ellender bill; be it further Resolved, That this common council recommend to the United States Senators from Wisconsin, Joseph McCarty and Alexander Wiley, and the Fourth Congressional District Representative, Congressman John Brophy, that they vote in favor of the passage of this bill, and that copies of this resolution be sent to the United States Senators and Congressman aforesaid.

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Chairman, Senate Banking and Currency Committee,

Senate Office Building, Washington, D. C. DEAR SENATOR TOBEY: I am enclosing herewith correspondence I have received from Mr. William L. Delaney, president of the Federal Savings and League of Connecticut, Thompsonville, Conn., containing his views relative to S. 866.

I would very much appreciate your committeee's careful consideration of Mr. Delaney's observations on this legislation.

Will you kindly return the enclosure after it has served your purpose?

Sincerely yours,

BRIEN MCMAHON, United States Senator.


The Honorable BRIEN MCMAHON,

Senator from Connecticut, Washington, D. C.

April 1, 1947.

DEAR SIR: There is at present in committee for consideration and recommendation to your body. Senate bill 866, designated as the Taft-Ellender-Wagner bill. Representing 17 Federal savings and loan associations in the State of Connecticut, with assets approximating $85,000,000, we wish to express our desires concerning the modification of the bill in the event of its approval.

Under title II, we urgently request a return of the Federal home-loan bank system, the Federal savings and loan system, and Federal Savings and Loan Insurance Corporation to supervision under a five-man board as separately proposed under Senate bill S. 803. This would require a change under title II, subsection (c) of section 201 (line 20 on p. 3), by striking the words after the comma "the Federal Home Loan Bank Administrator" and substituting therefor the words "the Chairman of the Federal Home Loan Bank Board."

Under title V, section 502, we request, in all fairness to our type of institution, that we be permitted to convert our associations to State-chartered institutions on a basis equitable with the regulations permitting State institutions to convert to federally chartered institutions without requiring an association to completely liquidate its assets.

Bill S. 913 has been submitted to the Senate by Senators Tobey and McGrath and it is respectfully requested that this bill be passed in lieu of section 502 of S. 866. We further suggest that under section 505 of S. 866 a definite statutory penalty for the dissemination of derogatory statements be fixed in order to effectively stop malicious and vindictive statements from being made against our Federal Savings and Loan System.

Under section 506 of S. 866 we approve of the suggested amendment to section 402 of the National Housing Act for the purpose of adjusting the rate of dividend paid by the Federal Savings and Loan Insurance Corporation on its capital stock. We urge, however, that section 2 of S. 804, a bill to adjust the rate of dividends to be paid by the Federal Savings and Loan Insurance Corporation on its capital stock and to decrease the premium charge on its insurance, introduced by Senators Tobey and McGrath, also be enacted into law. We in the Federal savings and loan industry are justly proud of the job we have done in stimulating thrift throughout the country and consider it a gross injustice that the charges made for the insurance of our savings accounts are 50 percent greater than for similar insurance in commercial and savings banks. This bill would reduce the premium charge from one-eighth of 1 percent to one-twelfth of 1 percent per year. A similar bill was passed by Congress at its seventy-ninth session but was pocket-vetoed by the President for reasons which are not in keeping with the records and requirements of the insurance corporation. We believe that information furnished to the President had been confused to the extent that he considered our industry had not set up adequate reserves in keeping with contractual obligations, whereas the truth of the situation is that all obligations, regulations, and requirements have been met as called for and existed in every instance.

We in the savings and loan industry are extremely desirous of obtaining the soundest economic background we can obtain to serve our country best. Therefore, we urge that in keeping with title V, sections 501-506, inclusive, of S. 866, a supplemental bill, S. 801, introduced by Senators Tobey and McGrath on March 7 (legislative day, February 19), 1947, be enacted. This bill would authorize the Secretary of the Treasury to purchase bonds or obligations of the Federal home-loan banks and the Federal Savings and Loan Insurance Corporation at his discretion, on a basis similarly in effect for the purchase of obligations of the Federal Reserve System, Farm Credit System, Reconstruction Finance Corporation, Federal Public Housing Authority, Federal Deposit Insurance Corporation, and the Federal Housing Administration by the Secretary of the Treasury. We sincerely appreciate every effort you will make to obtain the approval of the legislation as recommended herein as I can assure you that it will benefit millions of thrifty people in the United States who are building backlogs of economic strength.

Very truly yours,



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Madison 3, Wis., April 21, 1947.

Chairman, Senate Committee on Banking and Currency,

Senate Office Building, Washington, D. C. DEAR SENATOR TOBEY: The Wisconsin State Chamber of Commerce is greatly concerned over the provisions of the national housing bill, S. 866, now in the Senate Committee on Banking and Currency. We have analyzed the bill carefully, and it is our belief that passage of the measure would be detrimental to the welfare of the Nation.

The bill emphasizes credit guaranties as a major means of improving the housing situation. In our minds, additional credit is the item which is needed least. In fact, further credit liberalization may accentuate the existing price spiral particularly with respect to the cost of homes. As a solution to the housing problem, this bill is less concerned with such fundamental problems as the cost of land, construction, labor, materials, etc.

But in our minds there is greater objection to the bill than its mere negative approach to the housing problem. Our contention is that this excessive extension of credit guaranties by the Government in the end will give the Federal Government major control over not only community development but home financing and home construction as well.

We are alarmed over the increasing reliance on Federal aids and Federal domination in problems which can more appropriately be handled by the communities and by labor and private business.

We urge you to give serious consideration to these objections when the report of the bill is formulated by the Committee on Banking and Currency.

Very truly yours,

WILLIAM J. PETERSEN, Executive Secretary.

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