we are already allowing lapsed payments; therefore we don't need the mandatory provisions of the law?

Mr. MARQUETTE. Well, I say to that what was said by one of the other Senators here: that if that is so, why not make it a requirement so the home owner has some asurance and he doesn't depend upon the whim of an individual institution. And I also say that a lot of institutions don't do it, and there is no uniformity at all. Who is going to guar

antee it?

Senator MITCHELL. But your experience in housing would indicate to you that that mandatory feature would lend strength to the stability?

Mr. MARQUETTE. Absolutely. And also I think that the home buyer has a right to that kind of assurance. Everybody says "home ownership," and we are giving all this protection in the past, and I am all for it, and I don't retract on that or question the wisdom of the FHA at all, but I do point out that all the assurances there were given to the lender. Now, that isn't the fellow to whom we are trying to say, "Go and buy your home. That makes for stability of the community. You will be a better citizen." And I agree to it, but I think he has a right to a little protection too.

Senator ELLENDER. Now, taking the other view, do you not think that the fact that you make it mandatory will cause a lot to take advantage of whatever time the bill provides?

Mr. MARQUETTE. No. You mean of the owners who would take advantage of that even if they didn't need to?

Senator ELLENDER. Yes; the fact that it is there, let us say for 2 years or 3 years. The tendency would maybe be to postpone and take advantage of this time.

Mr. MARQUETTE. I don't think so.

Senator ELLENDER. You don't think so.

Mr. MARQUETTE. That may be a matter of judgment, and I don't known whether you think that.

Senator ELLENDER. Well, that would be

Mr. MARQUETTE. But those who do might have-might be right. I would think not, because I believe that the mass of people who buy homes buy them in good faith and want to pay for them as fast as they can, and have no possible reason for wanting-where do they get? They have to just keep on paying that much longer.

As far as the matter of administration is concerned, the difficulties of administering it, that does not impress me. FHA now examines the plans and specifications. It makes appraisals, and it inspects buildings during the course of construction. Well, now, they can demand certain proof of compliance with the provisions of this act. That doesn't impress me as being a very important argument.

Also, there is objection to the warranty. I am not impressed with that argument either. I think that we have had in every building boom a lot of jerry-building which has been a disgrace and ought not to be permitted, and I think that the time has come to make a step in this direction, especially where a lot of aids are being given to promote home building by private enterprise. I think that we should begin to ask something in return, and I don't think that the provision is unreasonable, and I do think that builders will take advantage of it. I don't think they will shy away from it. And if they do go to other

lending facilities, then the time is going to come when we have got to make some of these standards applicable to others that make loans than those who come under FHA.

Senator MITCHELL. Do you feel that the home owner will demand the waranty?

Mr. MARQUETTE. I certainly do.

Senator MITCHELL. If it is in this bill, do you think that he will go to the other lender who does not have that?

Mr. MARQUETTE. I certainly do not. I think that anybody who has any sense at all, wanting to buy a home, I think it would be one of the best things that possibly could be done for him to have some assurance that he is buying a decent project, and I think it will come to have very great respect.

Senator MITCHELL. Do you disagree with the Housing Commissioner who indicated that most of the people don't have much sense?

Mr. MARQUETTE. No, I don't. I have, myself, great confidence in the combined and the over-all judgment of the American people.

Senator MITCHELL. You have been working probably more closely than anyone we have had before the committee so far with the people themselves.

Mr. MARQUETTE. I think I have, and I think I know them. I go in and out of tenement houses every day of my life. And I want to say that the argument that the bulk of these people that we talk about in the low-income area are socially undesirable people is not tenable. I have a group of home advisers, women who do nothing else than teach tenants proper housekeeping, and work with owners on the management problems related to the management of tenement property, and we have made actual surveys to find out what percentage of the families in our worst housing areas are actually the type of what they call undesirable-they're rowdy, undesirable for their neighbors; they don't pay their rent; or they are destructive, or something of that kind-and it averages about 32 percent for whites and about 7 percent for Negroes, about 5 percent all over. And the same thing is shown in the public-housing project, that it is a very minimum.

Senator MITCHELL. Would that actually cover the group that Mr. Mahan used here? He said the handicapped, the indigent, the pauper, and the laggard.

Mr. MARQUETTE. Yes; that's right.

Senator MITCHELL. He said 20 percent.

Mr. MARQUETTE. Well, I think he is a way off.

Senator MITCHELL. That can't be borne out by experience at all, in your judgment?

Mr. MARQUETTE. Not at all. Not at all. That goes up way beyond the percent that was covered by public relief during the height of the depression. What happened to all that? What happened to that great group that was called ne'er-do-wells and were assailed because they hung around and leaned on their picks and their shovels, and so forth? Senator MITCHELL. Did a pretty good war job, didn't they? Mr. MARQUETTE. They did an excellent war job, and they disappeared, and the only ones on our relief rolls, which are about 2,000 now instead of the 20,000 then, are the kind that he was talking about, and that is a very, very small percent of the total population.

Then there is the question about the firm commitment, the argument

against a firm commitment. It is now 80 percent, if I understand correctly, and this proposal is that it be raised to 85 percent. Well, if I understand correctly, also, during the war we gave a 90 percent firm commitment, and I didn't see any serious kick-back or trouble from

that.

Now I want to go on with one more thing, and I will rapidly return to my paper and finish. I am going to the paper first.

The urban redevelopment sections give private operators their only possible chance of rebuilding blighted areas. Now, I think that for this reason: That the States and the local communities cannot finance the loss on the purchase of its purchasable value and its sale and its re-use value. They can't do it and they are not going to do it, and either the Federal Government will share, as you proposer, or there won't be any urban redevelopment.

And I will make one other prediction, and that is that there has got to be a tax benefit for urban redevelopment if urban redevelopment is to reach the lower-income group of the rental housing, as they did in New York State. A great many States-Ohio says no, they will have nothing to do with it. Well, if they don't there won't be any urban redevelopment in housing of the middle-class people by

Senator ELLENDER. Even though the Federal Government should aid, as provided in this bill?

Mr. MARQUETTE. Even though you give this aid because it has nothing to do with anything but land cost; it does not apply to building costs at all, and private enterprise unaided can't-maybe your yield insurance provision might prove me wrong, if that is sufficiently effective.

We again recommend, as we did in our memorandum submitted on October 8-I am talking about urban redevelopment-1945, to Senators Taft and Wagner, when the old bill was first introduced, that consideration should be given to requiring that when land is sold, as contrasted with leasing, to private corporations for redevelopment there should be incorporated in the deed, provisions, including the right to recapture, in order to insure compliance with the community plan.

Now, the opposition:

Despite this concrete evidence in the bill itself of the intent to give every practicable aid to private enterprise, certain groups are bitterly opposing this measure and are carrying on adverse propaganda throughout the country, branding Senate bill 1592, as it was branded here today, as a public housing bill. The difference of opinion between these few self-interested groups and sincere advocates of a sound national housing program is basic and fundamental. The opposition is so violently antagonistic to public housing that they appear to be intent upon doing their utmost to kill S. 1592, no matter how beneficial it is to private enterprise. Everybody knows that if the public housing provisions were eliminated the opposition would dissipate forthwith. Opponents seem to be not in tune with the public temper which will no longer accept the situation in which the health of millions of American children is sapped by slum living. They seem not to realize the ingratitude, indeed the impossibility, of saying to our returning soldiers go back to the slums-and remember, the same percentage of veterans as of other people lived in slums, and they are going right back

to slums with no hope of getting out of them unless we have a real program-crowd up with some other family, live in a basement or an attic, until the housing shortage abates; and then private enterprise will do the job if Government will just let it alone.

The issue is drawn: The bill recognizes the predominant place of private enterprise and proposes to give it every feasible encouragement to serve a larger part of the total need than ever before, but it also provides a very limited amount of public housing to meet the needs of the low-income group who cannot be housed at a profit.

This bill, in its essentials, has the support of a tremendous cross section of American public opinion-civic agencies, women's clubs, municipal officials, citizens housing councils, Negro organizations, religious groups, labor, and public-spirited citizens in all walks of life. Support of this kind for S. 1592 emphasizing, as it does, the predominance of private enterprise, should be enough to convince any fairminded citizen of the falsity of the accusation so frequently made in the past that those who believe some measure of public housing necessary are out for an unlimited amount of Government subsidy and want to drive private enterprise out of the home-building business. This accusation is now shown up for what it is-simply a blind to cover up the opposition's intense hatred of any forthright effort to take the poor out of slums through public housing-the only program that has ever given them a decent chance for housing within their means.

And I submit at this point the fact that the groups who are opposing this whole bill now have been on record, most of them for lower interest rates, 4 percent, for 90 percent mortgages, for 90 percent firm commitment-not 85 percent but 90 percent firm commitment-for one centralized housing agency, for aids to research, for urban redevelopment-all of which you have in the bill. And yet they are opposed to this project.

Now, another argument that I might mention right here that is made, for this is going to be made if it has not been already, and this is simply bound to appear before you, and I am going to say it nowan argument to draw a red herring across the trail and say that this is bad business because it is going to be bad for the veteran. He has got the GI bill of rights measure that's in his favor, and you come along with this and open up more of the market. You are going to have more competition and take more housing away from him, and I think it is absolutely untenable.

The GI bill of rights is going to reduce the cost of housing; it is going to simplify purchase by the veterans. And by the way, if I mistake not, some of the very ones who are opposing this bill and now will be appearing as the protagonists of the veterans wanted to have the provision that there be appraisal of the values of these houses before they be sold to veterans, eliminated. The provisions in this bill that encourage the production of lower-rental housing and of housing for sale at lower cost will do more than the GI bill of rights for veterans, and the only way you are going to meet the housing problem for them or anybody else is to meet the housing problem in its entirety. And I am all in favor of every single benefit that you have given them, and as far as I am concerned if you wanted to put in here a provision that gave them priority insofar as these special provisions are concerned, that will be O. K. with me. I am all for the veteran, but let's not get distracted by any of that kind of argument.

We sincerely hope that they will see the far-reaching import of the general housing bill to private operations and will decide to accept it and to withdraw their opposition. Whether they do or not, we are confident that the Congress will follow the leadership of the capable Senators, who in drawing the bill have studied this problem objectively and profoundly-supported as they are now by overwhelming public opinion and as they are certain to be by the mass voice of returning veterans. We are convinced that as days go by the popularity of S. 1592 will be increasingly evident and that subject to such amendments as the hearings show to be desirable, the bill will speedily be enacted into law. The day when that happens will be a great day indeed for the future of our country.

We sincerely believe that time will cure the present differences of opinion as to a sound national housing program, just as it did many, many years ago in England. No longer is there any division of opinion that there must be some public housing; there must be a broadgage program. It is only a difference as to details, and conservatives are just as much for it

The CHAIRMAN. They had quite a battle

Mr. MARQUETTE. Pardon?

The CHAIRMAN. They had quite a battle for that in 1936 and finally passed it in 1937, that Public Housing Act.

Mr. MARQUETTE. Yes, indeed.

The CHAIRMAN. The public was persuaded, but I think Congress is persuaded of that, in the sense of part of our economic structure. Mr. MARQUETTE. I certainly hope so.

It will show that private and public housing are in reality not only noncompetitive but mutually beneficial and essential parts of the whole.

Those interested in private urban redevelopment will come to see, if they do not see it now, that private projects cannot succeed on any substantial scale where an adequate supply of decent homes does not exist unless there is a concomitant public-housing program to serve displaced families unable to pay an economic rent. Even if the Federal bill did not require that housing be available for displaced families, it would have to be made available or else the eviction of thousands of families from a slum site would quickly lead to such violent protest that extensive private redevelopment would be selflimiting. The sooner home builders learn to accept the necessity of a measure of public housing and evidence a willingness to work cooperatively the better it will be for these operators themselves as well as for our communities and our country.

Changes made in Senate 1592 compared with Senate 1342: In the memorandum submitted by this council in October to Senator Wagner and to Senator Taft, recommendations for changes in the original bill, Senate 1342, were outlined. The present bill has incorporated a number of the amendments we hoped might be made. We note particularly these:

Including under the research provisions an advisory service to local communities as to zoning standards and building and housing code standards; special inducements to encourage private operators to build houses to sell at prices within the means of middle-income families; Federal aids to local community planning and requiring