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Washington, D. C.

The committee met at 10 a. m., pursuant to call, in room 301, Senate Office Building, Senator Buck, presiding.

Present: Senators Buck (presiding), Capehart, Flanders, Bricker, McCarthy, Taylor, Fulbright, Robertson, and Sparkman.

Senator Buck (presiding). The meeting will please come to order. I regret to announce that Senator Tobey is unable to be here today because of illness in his family and he has asked me to preside in his stead.

We have for consideration this morning S. 866 and S. 287.

Senator BUCK. At the opening of the meeting I want to read a statement that the chairman has dictated relative to the business of the committee.

The committee is carrying a heavy burden of work in connection with other legislation. Substantially similar general housing legislation in the Seventy-ninth Congress was the subject of exhaustive hearings by a subcommittee of the Postwar Committee and by the Banking and Currency Committee, upon the basis of which S. 1592 was favorably reported and passed by the Senate. The Legislative Reference Service of the Library of Congress has prepared an exhaustive digest of the testimony on both sides, which will be available in printed form as a Senate Document.

The committee has agreed to avoid repetitious and time-consuming hearings. Accordingly, we will confine the witnesses to testimony on substantive matters wherein S. 866 and related bills differ from S. 1592, Seventy-ninth Congress, and to such modifications as the witnesses may desire to recommend in the light of present circumstances.

The committee plans to devote Thursday, March 20, to testimony by proponents of the legislation, and another day, to be announced, for the opponents, on the foregoing basis. The hearings will be conducted in compliance with the provision of the Legislative Reorganization Act whereby witnesses scheduled will file their statements in advance of the hearing and confine their oral testimony to a summary.

In other words, we plan to have this bill two sessions at which proponents will be heard and following that there will be two meetings at which the opponents of this legislation will be heard.

Now, the agenda for this morning provides that we take up S. 866 and the first gentleman I am going to call upon to testify is Senator Taft, one of the authors of the bill.


Senator TAFT. Senator, it is very pleasant to be back in this room again. I always regretted the necessity of giving up my work in this committee.


It is the most interesting, I think, of any committee in the Senate. Mr. Chairman and members of the committee, S. 866 follows very largely the line of the bills passed last year by the Senate, and I will refer to some of the changes.

Basically the policy is the same. The Federal legislation on housing has been very mixed and has gone on for many years, starting back in the Hoover administration when I was running for office at least in '38, and ever since then until recently the housing duplication of bureaus and activities was the most glaring example in the Government of scattered and overlapping activities of the Government, all at great expense to the Government, and I have always been interested from the beginning in consolidating the housing policy in one general housing policy, and carrying out what I proposed at the time of a single national housing agency of some kind.

The exact relationship between the bureaus when placed together is something to be considered by the committee, but I feel strongly that there should be a unification of policy, that housing is one overall problem, that the Federal Government has taken an interest in it and obviously it has taken an interest in it in many different fields, that there should be one general over-all policy as to the encouragement of housing.

From the time I came here I proposed a study of the whole housing problem. I think I proposed an amendment in 1939, the first year I was here, to the housing bill, to set up a general investigation of housing, in an attempt to work out a unified Government policy. That was defeated at the time.

I think I renewed it every year until finally it was actually carried out under the control of the so-called Special Committee on Postwar Economic Policy and Planning of which Senator George was chairman. Senator George appointed a subcommittee of that Postwar Economic Policy and Planning Committee, of which I was chairman. It had three members from this committee-Senators Wagner, Radcliffe, and Buck, and three members from the Education and Labor Committee which had jurisdiction of housing, Senators Ellender, Chavez, and La Follette. We made a complete study of the entire problem in 1944. There were elaborate hearings, probably more complete hearings in 1944 before this subcommittee than there were before this committee in 1945.

We rendered a report, of which I will leave a copy to each member of the committee who is here and I will mail copies to other members of the committee.

The bill which is before you follows in a general way the recommendation of this subcommittee on housing and urban redevelopment of the Postwar Economic Policy Committee.

In our opinion, the problem of housing was an over-all problem and a national problem. Probably there is no single subject that has as many different implications. First, of course, is the social welfare angle, and nothing has as close a relation to the welfare of the entire people and of the families of the people and of the children who grow up in the United States, as the home surroundings in which those children grow up. Nothing in my opinion is more important to secure something like equal opportunity for American children as a provision of reasonable housing, decent housing, for all the families in the United States.

Also in the matter of industry, housing construction can well be in the neighborhood of 6 or 7 billion dollars a year. The industry is therefore one of the sustaining elements of prosperity in the United States. It is also one of the most violently fluctuating industries. It has gone from nothing to nearly-I think in 1925 or 1926 it reached 900,000 homes constructed, housing units-when I say "homes" that includes, of course, apartments and houses both, and in other years, I say it almost disappeared.

It is highly desirable that we maintain, if we can, a fairly stable rate of construction from the point of view of the general economic welfare of the United States and continued and stable employment. That has never occurred before the Government entered the field and has not occurred since as long as the Government energy was directed in all directions at once without any coordination.

Our committee made a study of the problem. Roughly speaking, we had the housing census of 1940 as the basis of the study. That was the first housing census we ever had. I can't refer you to all the figures, but roughly speaking there were at that time some 27,000,000 nonfarm dwellings in the United States. About 7 or 8 million farm dwellings, I think.

I say now that I don't think any adequate study of the farm-dwelling situation has really been made as yet and I am not satisfied that sufficient study has been given to our farm housing provision at the last title of this bill. Most of the figures we studied were urban houses. There are 327,000,000 homes. Of those we estimated that some 6 million were distinctly substandard. Just as an idea of the over-all situation—the figure is 29 million instead of 27 million, excuse me of those in 1940, 4 million were listed as needing major repairs-that is, as being in very bad physical condition. Of those in good repair, over 3 million have no running water of any kind; 2,400,000 have no private toilets or baths. These you understand are nonfarm dwellings.

Of course some of them are in the outskirts of cities where water perhaps is not available, and the lack of water in some sections in the suburbs of cities and elsewhere is not necessarily an indication of an inadequate housing, but our estimate was that taking into consideration these 9,400,000 homes needing many repairs, having no running water or no private toilets or baths, some 6 million were really substandard.

Six million were, in effect, slum dwellings. Six million wereh ouses in which children ought not to be brought up. That is more or less checked by the rental pay. At that time there were 6,000,000 homes which rented for less than $15 a month, and nobody can afford to keep up a house or keep it in decent repair or do anything about it at all, if the only rental received is $15 a month. It couldn't be done at that time.

I would think our estimate of 6,000,000 out of 29,000,000 that are not decent home surroundings was a fair estimate.

We estimated that the additional requirements from that time until-for a period of 10 years-1955 or '56 also included about 6,000,000 new homes for additional families, over and above the families existing at the time the survey was made, so that altogether we felt that in order to put the housing plant of the United States in reasonable shape there should be built in 10 years about 12,500,000 houses. That was the hope and estimate of our committee-6,000,000 for replacement and 6,000,000 new homes.

The program we set out, therefore—the goal, at least, that we stated as the proper goal-was the construction of 1,250,000 homes a year for 10 years.

The question of how you do that and how you reach there is an entirely different and more difficult problem, and I don't claim that this bill will necessarily assure any reaching of that goal.

Last year, you know-I think in the past year we have built about 750,000. There was a dispute in the morning paper as to whether or not you could build a million homes in the next year. Of course,

you have got to develop an industry. The difficulty in the last year or so has been lack of materials, lack of various kinds of equipment, which has been the bottleneck on all construction, rather than financing or special Government aid or anything else.

The bottleneck has been the lack of materials in order to accomplish the purpose. I may say now that this bill was not devised in any way to deal with the emergency situation. That was one of the good many criticisms directed against it: that it did not attempt to deal with the emergency situation.


Well, it did not. It was gotten up as a long-term proposal. was gotten up as a bill to deal with a permanent situation, the usual situation in this country when materials are freely available, and the only question is to find the people who were willing to put up the money to build the houses.

We enacted, of course, the emergency bill last year which was intended to strike at the shortage of materials, to give subsidies to produce more materials, to prevent the diversion of materials for commercial purposes, to prevent the diversion of materials to expensive houses.

The general program, I am afraid, was not very successful. As a matter of fact, I understand that out of the 400 million which was all we were willing to authorize of the 600 million requested, only 35 million will have been spent when the whole thing is closed up, and it was entirely closed up as far as subsidies are concerned on the 1st of April.

In other words, that method of trying to produce more materials apparently was a complete failure. Out of the 400 million we authorized, 35 million only will have been spent when the whole thing is finished.

Senator BRICKER. Have you any estimate of the amount of additional material produced?

Senator TAFT. I have no way of estimating that. Some people claim that all of the regulations and so forth have rather hindered the construction than otherwise. That I do not purport to say, but in any event now that emergency method has been dropped by the Government itself, by the admission itself.

Apparently they have returned to the theory that the best way for the moment to deal with the emergency situation is to take off all limits, all prices, and let everybody go to it and build as many houses as they can build.

To a certain extent I sympathize with that theory. We are short several million houses and any way we can get a couple of million more houses will take care of a couple million more families somehow get them under a roof, at least.

If the veterans cannot afford to build the new houses and somebody else builds them, then they leave a house into which a veteran can move. In general, the emergency situation, perhaps I haven't very strong views on it but it is perhaps better just to let it go for the moment; but at present prices you are certainly going to run pretty soon into a complete disappearance of the market for homes and you are going to have to do something further if you want to maintain building construction after a couple more years of this emergency


This bill attempts to set up, as I say, an over-all policy. It declares a general housing policy in section 1 or title 1. It differs from the bill of last year by, instead of setting up a national housing agency under the complete control of the National Housing Administrator, of setting up a National Housing Commission composed of the National Housing Administrator, a coordinating council, and administrative staff.

The Coordinating Council is composed of the Administrator, the Federal Home Loan Bank Administrator, the Federal Housing Administrator, the Federal Public Housing Administrator, Secretary of the Treasury or his designee, the Secretary of Agriculture or his designee, the Administrator of Veterans' Affairs or his designee, and the chairman of the Board of Directors of the RFC, together with any other departments the Government may set up.

We have done a great deal of housing but primarily we have created three independent agencies of the Federal Government to deal with housing. First is the Federal Home Loan Bank System which has its duties clearly set out in a complete bill of its own.

Second is the Federal Housing Administration. That finances the building and loan associations and savings and loan associations who in turn finance housing on a private basis.

The FHA insures mortgages on houses, and is perhaps the most important of the various Government agencies.

The FPHA is the Public Housing Administration under the United States Housing Act.

Those three agencies are separate.

In our original bill and in our report you will see that we felt that they should have practical autonomy and that the National Housing Administrator was only there for the purpose of coordinating those policies and doing perhaps some things which were common to all three.

A good deal of criticism of the bill was directed at that. The private housing agencies, the Federal Home Loan Bank System, the FHA, and those who support that method of dealing with housing feel that if they are combined with a Federal Public Housing Administrator, a Federal public housing policy will dominate the entire agency and they, therefore, want those agencies to be under the Treasury or the Federal Loan Agency or something having to do with loaning.

I hope that position may be somewhat changed by the situation in which the head of the agency today comes from the FHA, is the head of the FHA, and has more interest in private housing than public housing.

Personally, I felt that a man who had the over-all charge would not favor one agency over the other, and he would have a hard time to do

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