I have been interested recently in efforts to relocate families in a number of cities that were dispossessed by a tearing down of their buildings to make room for new highways, new public utilities of different kinds. We have a fine illustration of that over here very close to the United States Senate. We have some families still living in those shacks, and it seems impossible to find housing for them anywhere in this town, and yet we hear about vacancies in this town. I would like to find out where they are.

That is an example of the problem confronting us when we come to relocate families now living in the slums. Chicago is confronted with that same serious problem right now. Large numbers of families are being displaced by the new east-west Congress Boulevard, and it is a very real problem to find homes for these families.

In talking here about this $55-a-month house, I do not think the gentleman appears to be talking about families because I notice how quickly the problem arises when he begins to discuss housing for families. I expect to have that same problem up with the public housers during the next 2 or 3 months, and I shall be as interested in getting as many public housing groups as I can throughout the different cities bring all the pressure possible to bear on the housing agencies to see to it that they build houses for families with children because that is what we have been struggling for around here.

I feel that this cooperative housing should be studied carefully. It means a real trial in our country, but this work must be carried on by people who believe in it. It is hard for those of us who have been associated with the housing agencies here to believe that they have real convictions about cooperative housing. I think you need, for the success of cooperatives, people who have real interest in them.

I have outlined in my testimony here the provisions of section III dealing with cooperatives and I shall not take the time of the committee by repeating those.

I want to say that I am most wholeheartedly in favor of this cooperative approach, of this method of stimulating voluntary efforts, selfhelp of all kinds.

As a part of our economy I think we need to take a new look at it these days, especially when we are dealing with so many questions as to Government responsibility in providing for the needs of the individual that cannot be met by the individual himself or by the family through the ordinary mechanisms of our present-day society.

The CHAIRMAN. We are glad to have your views, Monsignor O'Grady. I know you have studied this question very intensively. If there are no further questions, you may stand aside.

STATEMENTS OF JOHN W. EDELMAN, WASHINGTON REPRESENTATIVE, TEXTILE WORKERS UNION OF AMERICA, CIO, AND LEO GOODMAN, DIRECTOR, CIO NATIONAL HOUSING COMMITTEE

The CHAIRMAN. Will you please identify yourself for the purpose of the record?

Mr. EDELMAN. Mr. Leo Goodman, director of the CIO national housing committee, accompanied by Mr. John W. Edelman, Washington representative of the Textile Workers Union of America, CIO.

Our formal statement for today will be offered later for the record. We will just make a brief informal presentation to you summarizing what is in our written statement.

The point that I would like to open with is that this bill now being considered by the committee is the second large installment of the obligation of Congress to fulfill a practical legislative program dealing with the shelter needs of the American people.

The first installment was met by the enactment of the public housing legislation. The second, I think, is before you, and the points I want to make about that is this: That while these hearings have tended to have not attracted anywhere near as much attention, either the public or the press, as the public housing legislation is, it is due to the fact, I think, that somewhow or other the long fight that we made on the public housing bill sort of created the opinion that this middle income group was somehow a little inconsequential group of a few hundred thousand people who we were segregating, as it were, as a kind of a barrier or as a kind of a moat, as it were, an economic moat to give the real-estate industry the protection it needed against any competitive encroachments.

Actually, Mr. Chairman, that is a completely distorted view. The group for whom we are legislating, it seems to us, in this present bill, are at least twice as large as the group whom we legislated in public housing legislation.

The maximum number that can be housed under the public housing bill cannot be more than 10,000,000 at the most, and the group with which we are dealing today cannot be less than 20,000,000 so that this is from the standpoint at least of the numbers whom it serves a much more important piece of legislation.

It seems to me that from the standpoint of its approach, it should win immediate and enthusiastic support.

As far as the trade unions are concerned, Mr. Chairman, as we have pointed out to you on a number of other occasions, the membership of labor organizations, we supported public housing legislation on the grounds that it was an act of social justice. It was the only possible way of meeting a unmet nneed for a group which had no other means of assisting itself and that it was an absolute, vital necessity for the rehabilitation of our cities and a health measure for the largest number of communities of America.

This particular bill, however, Mr. Chairman, it seems to me-more than 90 percent of our membership has an income status well above that which would make it eligible for public housing, so our fight was certainly in that sense of the term an altruistic one or an effort made to enhance the public interest. However, this particular bill, it seems to us, is directed right at the group that we represent, because, today, Mr. Chairman, our group finds itself, as President Green said, in the position of being too rich for public housing and still too poor, except in a few cases, to purchase or rent the average product of private enterprise.

The essential feature of this bill, to which we address ourselves in this testimony, because we are necessarily limited, is, of course, title III. That is the thing that we wish to concentrate our attention on. It seems to us that it offers us a practical opportunity to really attack the whole root of this problem and achieve a solution for the vast majority of the middle-income group. Not only are we con

cerned, of course, with this whole question of reducing the cost of financing, without providing subsidies, and it seems to us that there is a reasonable opportunity if this bill is intelligently and faithfully administered, that it could get the costs of financing or housing down, perhaps, to almost a half of what is its current average.

On the other hand, we want to point out, although it does specifically provide it in the bill, that the application of the methods in these bills offer tremendous hope for the reduction of costs of housing, the cost of providing the finished house and lot.

It does not mean to say that essentially this bill has any gadgets in it for applying new technology to housing. I think it would encourage the use of new technology in construction and the provision of homes, but that that is an essential byproduct of the bill, although not written into the law.

Essentially, however, what this would do, Mr. Chairman, it seems to me, it would make it possible for us to have what I would call a construction industry in America. Today, you have some kind of a hodgepodge affair that calls itself the construction industry, but is actually an industry that cannot concentrate itself on the business of efficient production of shelter, because it has got to spend most of its time in the business of merchandising shelter or engaged in the problem of providing financing for shelter.

The essential philosophy underlying particularly title III here, Mr. Chairman, is that you turn over to the consumer the basic responsibility for providing the customer-you do not build for an unknown customer, you build for a known customer. The customer actually organizes the problem of financing and of finding the purchaser.

In that way, Mr. Chairman, it seems to me that you enable the technical people in the industry, that is to say, the people that are concerned can solve the problem, economizing on the construction of the physical building, the procurement and assembly of sites, the installation of utilities, and, it seems to us, Mr. Chairman, that it is perfectly evident on the basis of the experience that we have had in a number of sample situations throughout the country, that very great economies can be achieved if the technical people can concentrate on the problem of production and assembly of sites and the finishing of sites.

I think it is a very practical estimate to make, and not an exaggerated one, to say that if, number one, middleman's profits can be largely eliminated if the technicians can concentrate on the problem of production. Almost immediately the conventional $10,000 house can certainly be provided for not more than $8,000, and it seems to us that within a very short period of experience and experimentation, that that cost could be gotten substantially less.

Therefore, it seems to us, with this reduction in the cost of the site assembly, site improvement, physical construction and finally of financing, that you are reaching a market, a vast market, which has not been touched hitherto by private industry in any great numbers, despite constant advertisement or declarations of reduced cost.

We have not yet seen in any quantity standard housing produced at the figures, say, from $30 to $50 a month. It just has not been done in standard housing, except in the most isolated number of cases, and that is the real job that has to be done.

Let me stress the fact and necessity, Mr. Chairman, for providing the leadership; that is the principal thing that we are asking for in this bill, not handouts to individuals, not subsidies to individuals. We are asking for technical assistance and leadership in initiating a program of nonprofit, cooperative, mutual housing by asking that a separate and special unit of government, integrated in the whole housing set-up, be created.

I have had some experience in that field. My colleague, Mr. Goodman, in recent years, has had even more than I have, and we have found that while the present FHA officials know their job very thoroughly, their orientation and integration in this field is so closely associated with the current methods and habits of the construction and real estate industry that it is difficult for them to really understand and appreciate what has to be done to make a success of a new movement in the housing, such as we anticipate if title III is enacted.

We can assure you, Mr. Chairman and Members of Congress, that throughout this country there are groups everywhere, certainly insofar as we can speak with peculiar knowledge in the field of organized labor, that are willing to organize themselves and to take on the responsibility of providing groups which will undertake housing projects and meet the needs of themselves and their fellows and enhance the values of their local communities. And I think they will make a very important contribution to the solution of the housing problem in this country.

One final word as to whether the thing is practical or not. Unfortunately, there are not hundreds or thousands of cases of successful housing undertakings in this country, conducted by nonprofit groups. We are convinced, however, that there are a sufficient number to thoroughly demonstrate that the method has been applied, that it has worked, that it has been efficient and that it has accomplished results.

The experience of the Amalgamated Clothing Workers in New York City, I think, is a remarkable demonstration of business efficiency and success in meeting a social need, the originality and planning, and so forth, and that the enterprise has demonstrated its validity in a number of ways. That is a big city solution.

We have a number of cases which are more typical or more appropriate for the smaller communities, the middle-sized community and the small town. We will introduce here in evidence a memorandum showing the competence of local groups to initate projects and to manage them, to manage the business affairs in connection with them.

Let me mention one fact, Mr. Chairman, with which I had a great deal of practical experience. My union has undertaken over the years the responsibility for the organization of nonprofit housing enterprises of different sorts and, this fact is not understood, that what actually will happen under title III is this: You are not going to take a group of 100, 200, 300, or 500 individuals in a community, union members, their friends, of similar income in the local community whose needs have been unmet by the conventional methods. That is not the case. What actually happens, Mr. Chairman, is that these groups will employ technicians. They will probably employ, in some instances, real-estate men, construction men, people with understanding of financial problems on a fee basis, and they will employ these persons

on specific fee or salary basis to employ the technical leadership required for the successful completion of these projects.

În order to get commitments they will deal with the same individuals, same type of individuals whom they have dealt with in the construction of private housing, and they will simply turn their professional interest to the provision of the nonprofit type of house.

Let me just cite a brief personal experience. In the first housing project undertaken by the hosiery workers union-which was an experiment then; it was done, of course, in cooperation with the Government, but the nonprofit, it limited different corporation setups by the union, which was operated entirely by private individuals, retained as the contractor in the enterprise one or two or three of the large-scale construction contractors in this country. They did not take a contract in the ordinary sense of the term.

What they did, they operated this job purely on a fee basis, on a fee basis, and there was some increase in fee if certain economies were achieved. The total recompense of this contractor, Mr. Chairman, for the construction of this million-dollar job, was very much less than would be net profit on a similar job undertaken for its speculative purpose or a Government agency, but the contractor, who happened, as a matter of fact, to be a well-known Philadelphia Quaker, was tremendously enthusiastic as to his personal relationship and insisted that the incentive provided by this fee method was entirely ample to bring forth the best efforts of the technician and provide a thoroughly practical solution of the needs of the people for whom he was employed.

That, in substance, is what we wish to offer your committee and Mr. Goodman will make some supplementary points which I have not covered.

The Chairman. We will hear from Mr. Goodman now.

Mr. GOODMAN. I want to congratulate the chairman for having taken up the legislation in this committee, and to take this occasion to commend Monsignor O'Grady, who appeared before us, for having provided the leadership to the organizations which involve the program you have here before you today.

Not only has the chairman, but some 70 other Members of the House and I think all of you have seen this list of the Members of the House who have introduced legislation or announced endorsement of the principles involved, as pending before you here today in title III. I have distributed to you a prospectus of Schoolcraft Gardens, a cooperative housing development that is about to go into construction in Detroit, Mich., under the terms of the statute that you passed here in the Eightieth Congress. This is not a new program. Cooperative housing, as you noted from the material distributed regarding the Amalgamated's project, has been a successful union venture since 1926. Many veteran organizations in recent years have also built cooperative housing projects.

This prospectus which you have here before you today, I think illustrates the vital necessity of the three items in the legislation in title III. If you will turn to the page of estimated cost of dwelling units, you will see that the payments for principal and interest range from $43.50 to $59 for the various units. I am sorry I do not have enough copies, but this will give you some idea.