last trip over was in 1946, in which I investigated the cooperatives as well. I was greatly impressed, as you were, with the accomplishments. At that time the cooperatives in Norway and Denmark were doing more than one quarter of all the new housing. And in Sweden one central cooperative, the HSB had built 40,000 dwellings, equivalent to a million of United States population.

This would be equal to nearly a million homes in the United States. The apartments and houses were neat, clean, modern, livable homes, at very reasonable costs.

In the United States, our experience is more limited. But there are about 100 cooperative housing projects owned by 30,000 families. They have been built in the face of hardship and without friendly assistance or guidance from the existing housing agencies.

The best known of all our housing co-ops are those sponsored by the Amalgamated Clothing Workers Union. Their first project was completed in 1927. They have gone through a great depression and a world war. The success of operation has been so great that when present construction is completed there will be housing facilities for 2,500 families in projects costing $20,000,000. Monthly housing costs are equal to rentals of $15 per room or less-much lower than any comparable housing in New York.

Private capital has welcomed the opportunity to participate. The fact that the people like it is demonstrated by the fact that after 22 years of operation more than 70 percent of the original members remain in the project.

This committee would find it very profitable, I believe, to ask one or several of its members to visit the Amalgamated cooperative housing projects in New York if you want concrete evidence of accomplishment here at home particularly in the urban areas.

Another New York project of great interest is the Queensview project which has on its board of directors such distinguished citizens as Gerard Swope, Thomas J. Watson, Jr., Lewis H. Pink, Beardsley Ruml, David Sarnoff, Henry Morgenthau, Jr., Bernard F. Gimble, and others. Their presence is ample refutation to the charge of socialism leveled at cooperative housing by representatives of the real estate interests.

As Raymond M. Foley said here Thursday:

The cooperative principle is as old as America. Cooperative housing and other nonprofit housing offer great promise of achieving cost reductions because of savings immediately obtainable in operation and maintenance, and potentially in construction costs.

The type of nonsubsidized aid provided in the Maybank amendment to the Sparkman housing bill could break the bottleneck in which some 8,000,000 United States families now find themselves. The extension of the REA principle to housing is the way to provide good, adequate housing at a reasonable cost to the middle income families of America.

This program can be a stabilizing influence in the United States economy and will be looked to with great hope by the forgotten families in this housing crisis. We think this is the way to preserve and extend the great American principle of home ownership.

Now just one other matter, gentlemen. In order to try this thing out and to be sure we know what we are talking about, and because we are faced with a situation in which the management of our National

Cooperative Farm Machinery Co. is faced with a situation where they do not get adequate help to come into Bellevue, Ohio, to work in a machinery company because there were not houses there, we undertook ourselves, and our insurance company set up what we called a Peoples Development Co., and Mr. Frey, who was with us all through our REA development, joined us, to see what we could do with housing. We would like to leave an exhibit with you, because we think we have got something. This, we grant, is new. We are only building 38 houses. We have in mind another 151, but we think we have already found out enough on a very small basis that we can do a better job than has been done in any of the prefabricated houses that we have heard of anywhere.

It is a little community between Toledo and Cleveland, and we have had these houses appraised by outside appraisers who give a record of excellence in every place, and I would just like to read you what these houses have that the average house we do not think has. I can do it very hurriedly.

All poured concrete casements; No. 1 fir framing lumber throughout; insulated ceilings of 4-inch rock wool and insulated of 2-inch expanded tile; forced air gas fired furnaces; automatic; oak hardwood floors, factory-treated fiber; storm doors and screens throughout; weather stripping; cream-finished bathroom accessories; copper water plumbing flues; ventilator fan in the kitchen, scientifically planned for efficiency; steel girders in the basement; adequate headroom, and small basement walls permit recreation room; outside basin under drain receiver; all garage walls finished with plaster, gypsum board, overhead garage doors, drain tile laid around the foundations. Lots seeded and sodded and provided with bushes and shrubs. A quantity of trees planted over the whole development, and street curbs, sidewalks, utilities and other improvements completely paid for. Senator BRICKER. What was the average cost of that?

Mr. LINCOLN. This is entirely an experiment, Senator, and we would just like to pass out those to the committee. What we would like to point out is, what the houses are. We provide different values-$7,400, $11,500-then in the third column you will notice the cost per cubic foot.

Senator FLANDERS. Which are yours?

Mr. LINCOLN. The first four, the Peoples Development Co. We think when we go into cost accounting we know what we are talking about, and we are sure these figures will stand up and include 4-percent money, 4 percent interest on our money, and you see, we have a cost per cubic foot of 69, 66, 66, and 63, as against prefabs, which happen to be made in Columbus, of 85, 76, 71, and 71.

Now, when you look over the record of what we have got, those costs, we just think we have got a pilot plant there that will give ample evidence that it can be done.

It is that cooperative housing can can be done, and I would like to tell the committee that our board of directors has pressed themselves as being willing for us to go ahead with this Peoples Development Co. to serve any cooperative groups in our area, anywhere, because we think, just as we said at our luncheon, Senator, there needs to be a coordinated agency with people who have got cooperative experience, and all your experience has been cooperative, backed up by this kind of engineering, architectural and otherwise.

Senator BRICKER. How do you finance, through your own organization?

Mr. LINCOLN. Yes; and we just feel that our experience on this electrical thing, and this little pilot plant, plus some others that are here too, to us is evidence that we can lick this housing thing, develop individual houses as against the rows of houses that look like hog houses in some of the speculative developments, and really do something.

Senator FLANDERS. May I inquire, Mr. Lincoln, whether you would feel that the Maybank amendments offer terms that your insurance companies would be justified in investing in?

Mr. LINCOLN. You mean to buy the sureties of the mortgage? Senator FLANDERS. Yes.

Mr. LINCOLN. I do not think there is any question about it, sir. Senator FLANDERS. It is justified?

Mr. LINCOLN. Yes; if it is legal, and it proposed to be a legal investment.

Senator FLANDERS. I mean, from the financial standpoint, would you feel justified?

Mr. LINCOLN. I think there is no reason why we should not.

Senator FLANDERS. Would you not feel you should perhaps investigate your fund.

Why would you not go into FHA mortgage, for instance?
Mr. LINCOLN. We are doing both.

Senator FLANDERS. You get a higher return on the FHA than you would on these?

Mr. LINCOLN. Yes, but we are cooperative, Senator. We are not only thinking in terms of return. We think here is a great need that we can assist and develop it.

Any insurance executive has, of course, to take a good look at what the returns on his investment are.

Senator FLANDERS. Yes.

Mr. LINCOLN. But at the same time-and this is evidence of what we have done up to date-we feel that these great aggregates of capital somehow have got to be directed to help economic and social needs. Otherwise, something else is going to happen.

Senator FLANDERS. One of the things which interested me in Sweden was that, so long as the short opportunity we had for investigating it, the whole thing seems to be on a more or less hard-headed business basis, without the social program entering into it as an element.

Mr. LINCOLN. Well, Senator, I do not know about Sweden, but I think Senator Bricker knows from our record in Ohio-although we have been cooperative, I think we have always been hard-headed. Senator BRICKER. I will testify to that.

Mr. LINCOLN. We have just had to be, and we would not have accumulated a business of $100,000,000 with surpluses that we have now got unless we had at least paid attention to that part of it. In fact, I do not think there is any question. In REA they said we could not do it. Yet, we cut the cost of electric light lines in two. We have done it in these other things. We are cutting the cost of insurance, and growing faster than almost any other company in the country, and we think we can do the same thing on this housing thing, and we also, Senator, feel very definitely that the cooperative group somehow has got to do what you say.

Now, I do not know that this thing will be it, but we are looking forward in the development of this HSB thing, which I think is a sort of agency that guides and approves plans to see that the people are not led astray.

Senator FLANDERS. I may say we feel we do have in your experience an equivalent to the Swedish HSB, which is of course a nongovernmental body, a strictly cooperative body.

Senator BRICKER. It is more under governmental control than we have here.

Senator FLANDERS. But not Government subsidy.

Senator BRICKER. No, but under Government direction as to type, size, and location?

Mr. LINCOLN. There is something the Government has not woken up to. In the REA, in the banking cooperatives, we have got a perfect development whereby the Government can come into a purely business basis, and then get out at the right time when we pay off our loans, and I think that is very important, to have an end point. That is what we have got in our cooperative development. I do not see how it can fail to answer all the arguments of free enterprise and private enterprise.

Senator FLANDERS. I wonder, Mr. Chairman, if I might make one of my occasional observations?

Senator SPARKMAN. We are always delighted to have your observations, casual or otherwise.

Senator FLANDERS. For a great many years, I have felt, Mr. Chairman, that the cooperative movement was the American alternative to the individual private business set-up of our industry and distributing organizations, and all the rest, rather than state socialism, or communism, or any form of it. It is the alternative. It is the American alternative.

I have been disturbed by its growth with what seemed to me to be certain factors to which private business is not allowed; and, of course, I am referring to taxation, and I am referring particularly to the ability to plow back earnings, instead of having made a contribution to the expenses of the Federal Government.

I wish that the cooperative movement could get along without that particular governmental privilege.

Mr. LINCOLN. Senator, I think you and I ought to spend an evening sometime, and I think I could clear you up on that point. The thing that too few people understand is that it is only certain agricultural groups that have that privilege. These insurance companies that I represent pay every single tax that any other mutual company does. The consumer cooperatives pay all the taxes that any other group does. I think the only point is this double taxation of dividends, but again I say the answer to that is to cure it on the other side rather than make us do the same thing.

Senator BRICKER. I agree with you there.

Mr. LINCOLN. I think you will find that even with some of the agricultural cooperatives-the benefit there when you count the cost of records-and the fact we cannot do more than a certain amount of business with some members, I think, is a pretty good answer to the thing.

In the beginning, of course, that thing was done, remember, to try to make some contribution to this agricultural problem, which is not involved yet, by the way.

Senator BRICKER. I think in Ohio the REA was given a 50percent tax credit; were they not?

Mr. LINCOLN. You mean on their income?

Senator BRICKER. On the real-estate taxes, and property taxes. Aren't they only taxed at 50 percent of value?

Mr. LINCOLN. I think, it is so long since I have had any connection with that. I have forgotten that.

Senator BRICKER. I think about 8 or 10 years ago they were given a 50-percent credit on local taxes. It may have been repealed since; I have not checked.

Senator SPARKMAN. Of course, that was a State provision?

Senator BRICKER. Yes; I think they were given preferential treatment in that respect.

Senator FLANDERS. I do want to say your reduction in the cost of constructing electric lines for electric distribution is an example of good, straight American, successful American, competition.

Mr. LINCOLN. If I had time, I would tell you a story on telephones, but I think that is getting away from the subject.

Senator SPARKMAN. Are there any further questions?

May I ask you just a question or two?

You may have said, "Is this Amsden Heights development an actual, going concern now?"

Mr. LINCOLN. Yes, sir.

Senator SPARKMAN. When was it built?

Mr. LINCOLN. We started last spring.

Senator SPARKMAN. But they have already been built?

Mr. LINCOLN. Yes; we have got 38 houses, and are going to have to build 150 more.

Senator SPARKMAN. And they are occupied now?

Mr. LINCOLN. They are occupied at the present time.

Senator FLANDERS. Whenever I look at any of these new housing developments, I see you have got a street there, probably an old street. You have a curved street here, and another one here.

When I see aerial views of any of these new housing developments, public or private, or whatever they may be, I cannot help wondering how, when I drive up and want to find the given address, how in Sam Hill I am ever to find the street and number. I think you will have to have licensed guides for strangers.

Mr. LINCOLN. We have good marked streets, numbers and everything.

Senator SPARKMAN. Mr. Lincoln, I want to ask you another question or two. Senator Flanders was asking you whether or not you felt your company would be justified, from a business standpoint, to invest in these securities. Do you have in your portfolio other Government securities?

Mr. LINCOLN. Yes.

Senator SPARKMAN. United States Government securities?

Mr. LINCOLN. Most of them.

Senator SPARKMAN. A great many of them?

Mr. LINCOLN. Yes.