The people of the city of St. Louis are deeply interested in this legislation because it fills a need that has long been neglected.

The recent allocation to the St. Louis Housing Authority of 5,800 units of public low-rent housing, to be provided with Federal loan and contribution assistance, will care for the needs of the lower-income families of the city.

The proposed clearance and redevelopment of slum and blighted areas of the city with Federal assistance under the new program provided by the Housing Act of 1949 will help the city in its long-range planning and development, and may also assist in providing sites for the low-rent housing.

Any large-scale housing program will result in the displacement of many families. The new cooperative housing legislation will assist in relocating middle-income families who might be affected or displaced by these programs, and, in my opinion, is very important to cities such as St. Louis which are anxious to carry out a well-rounded program of housing.

The Housing Act of 1949 was a great step forward in meeting the housing problem but this is only part of the legislation that is needed to treat the whole problem. I do not want to begin citing statistics, but estimates have been presented that about one-third of the American people have incomes of from $2,500 to $4,000 a year.

These people cannot participate in the benefits provided under the public housing provisions of the Housing Act because their incomes are too high. They are not able to purchase homes constructed by private builders because their incomes are too low to pay the prices that are being asked today.

For these people, there are only rental units which range up to $150 a month. The rents are so high that many do not have sufficient money to spend for clothing and other necessary items. This has placed home ownership beyond the reach of middle-income families.

The pending legislation would provide technical and other aid by the Government in the organization of cooperative ownership and other nonprofit housing corporations, and in the planning, construction, and operation of their projects for families of moderate income. The principle of cooperative housing, which is encompassed in this bill, is a sound approach to the problem.

Housing cooperatives offer methods of reducing costs and will go a long way toward eliminating speculative profits, which is perhaps the major factor today in the high-cost and high-rental housing that is being built.

The people of my city are deeply interested in this legislation, for it will help meet our housing needs.

I hope the committee will report this bill favorably because it is legislation that is urgently needed, and it will go a long way in providing adequate housing for families in the low- and middle-income groups at monthly charges within their means.

Senator SPARKMAN. Thank you very much.

We will hear from the American Legion representative.

Mr. KENNEDY. Mr. Chairman, my name is Miles Kennedy. I am not going to testify myself, but I would like to have permission to introduce the gentleman who will testify on behalf of the American Legion, Mr. Robert S. Dinger, who is here with me.

Mr. Dinger has served as secretary of the American Legion's housing commission and at the present time is assistant to our director of our national economic commission of the Legion.

I certainly appreciate the invitation you gentlemen have extended to us to speak our little piece here this afternoon.

I also thank you for the courtesy of listening to Mr. Dinger. Thank you very much.

Senator SPARKMAN. We are glad to have both of you.

Senator MAYBANK. Mr. Chairman, does the Veterans of Foreign Wars follow the Legion?

Senator SPARKMAN. They are next. They have a representative here.

Senator MAYBANK. I wondered if it would be all right for me to ask one or two questions because I want to go upstairs on this floor call. Senator SPARKMAN. You mean from Mr. Dinger?

Senator MAYBANK. I would like to ask them of him, if he does not mind, before he reads this statement.

Senator SPARKMAN. Go right ahead.

Senator MAYBANK. Last year when the committee brought this bill up at the last moment, I made a motion to temporarily extend the existing National Housing Act.

I wanted to make it clear that in view of the situation existing on the floor at that time that the best thing to do in the interest of all those supporting S. 2246, including the American Legion, was to extend it because we never could have gotten any housing bill passed otherwise.

I think that anybody on this committee will give testimony to the fact that I worked as hard for the veterans and the veterans' legislation on housing as anybody ever worked around here.

I made the statement at the time that as soon as we got back here we would give consideration to it. I dictated a letter which I think I told the administrative assistant to send to them.

The Veterans of Foreign Wars did not write me any letter. They know how I have worked.

I do not want the American Legion to feel that in deferring the legislation last October we could have done anything else because 1 honestly think we would have had no chance to get the improved veterans' section through if we allowed action to have been taken on the bill at that time.

I wanted to ask you this question, Mr. Dinger. Do you gentlemen still feel the same way about the bill as the American Legion always has, that, as the bill now provides, that wherever private interest can take care of you and where people have treated you right, you do not want a direct loan? It is only where you have been unable to get a loan that you want to get a direct loan, is that right?

Mr. DINGER. That is right. There are many communities where there are no facilities.

Senator MAYBANK. I know that. That is true in my own State.

Mr. DINGER. That is right, where private financing will make the GI loans we certainly do not want a hundred percent direct loan from the Government.

Senator MAYBANK. But you and the Veterans of Foreign Wars, of course, naturally and honestly would want direct loans only where loans were not available through private financing?

Mr. DINGER. Yes, sir.

Senator MAYBANK. Mr. Chairman, I just wanted to bring that up in view of the confusion we had in the closing moments of the session last year.

Senator SPARKMAN. In those days we held many conferences, and I think I can safely say that it was agreed by everyone that the action which the chairman took was the proper action.

Senator MAYBANK. May I say this, Mr. Chairman. I was very much surprised to learn about the protest that had come to you because I happen to know that Mr. Bob Poston, who had been quite active representing the Legion, had been kept advised as to what the situation was; and while he was reluctant to agree to it, he finally did agree that it was the best thing to do.

Mr. KENNEDY. Might I say to you, Senator, that I was only appointed as the legislative chairman this year, and if anyone has offended your feelings I want to apologize in behalf of the organization.

Senator MAYBANK. No apologies are necessary. I just wanted you to understand that no one has tried to do more for the veterans than I. Senator SPARKMAN. Senator Maybank acted upon the advice of the whole committee.

Senator MAYBANK. It was unanimous.

What did that letter say?

Mr. MCMURRAY. The general tone of the letter was that they thought they had an excellent chance of getting through the legislation, but they were dismayed and shocked at your action laying aside the bill.

Senator MAYBANK. My thought is that if we had not laid it aside we probably would not have any legislation at all.

Mr. KENNEDY. A letter of that type should never have been written. Senator MAYBANK. I am going to read your statement with interest, but I do have to go up to the Senate floor now.

Mr. DINGER. I would like to say before you leave, Senator, that I was not familiar with the letter, either.

Senator MAYBANK. That is all right. Let us forget about it. The question in mind was to determine if you fellows are taking the same position you took last year, to wit, that where private financing is available you do not want direct loans, and where it is not you do want direct loans. Is that correct?

Mr. DINGER. That is correct.

Senator SPARKMAN. Go right ahead, Mr. Dinger.

STATEMENT OF ROBERT S. DINGER, ASSISTANT TO THE DIRECTOR, NATIONAL ECONOMIC COMMISSION OF THE AMERICAN LEGION

Mr. DINGER. Mr. Chairman and members of the subcommittee, the American Legion appreciates this opportunity to express its views with respect to the proposed amendment introduced by Senator Maybank on January 6, 1950, a substitute for title III of S. 2246, which was favorably reported by this committee last year.

The economic problems sustained by veterans caused by their absence from civil life in the service of their country during World War II and their resulting inability to acquire adequate housing within

their income limitations has been the subject of serious concern to the American Legion for several years.

Today, 42 years after the end of World War II, and despite the remarkable accomplishments of the building industry, we find that the middle-income veteran is still priced out of the housing market.

Many of this group who have been unable to acquire rental housing within their financial limitations have been forced to purchase homes at inflated values on long-term amortization.

The seriousness of this situation where families who have purchased homes when they should be renting, will be recognized with the slightest recession in the American economy.

We cannot, therefore, place too much emphasis on the necessity of encouraging the production of housing within the means of the average middle income group.

Two years ago the American Legion presented to the Eightieth Congress a bill which was known as the Veterans' Homestead Act of 1948, which bore a striking resemblance to the amendment to title III of S. 2246 being considered here today.

It was the feeling of our organization at that time that considerable savings could be obtained in the construction of rental housing under the cooperative principle if financial assistance, not available through private sources, could be made available by the Federal Government. Many of the more than 17,000 Legion posts throughout the country have formed housing cooperatives on a nonprofit basis with some success, demonstrating that considerable saving can be realized through that method.

It was the specific problems experienced by these groups that formed the basis for our veterans cooperative housing bill in 1948.

The above history of the American Legion's interest and experience with this problem is cited herein for the purpose of refuting the several statements that have been made to this committee by the opponents of the cooperative title to the effect that there is no need for his type of legislation and that no savings can be realized under the cooperative principles.

The American Legion has consistently urged that formulation of a complete and well-balanced Government housing program and has testified extensively before this committee on that subject.

Many of the specific proposals which have been advanced by the American Legion have already been enacted into law. The unenacted portion of our program, designed to meet the needs of the middleincome third, is embodied in the legislation now being considered by this committee.

The national legislative commission has been instructed by Resolution No. 653 of its thirty-first annual national convention to exert every effort to secure the speedy enactment of S. 2246.

In view of the mandate cited above, we have made a careful review of the proposed amendment which is a substitute for title III of S. 2246; and it is our considered opinion that the benefits contained in the original title III are substantially implemented by providing a system whereby private capital can be utilized, thus eliminating the objections to direct Government loans.

We believe that the encouragement of private capital to invest in this program along with the requirement that each borrowing cooperative subscribe to stock in the Corporation will create a greater recog

nition of the cooperative principle, designed to meet the housing needs of middle-income families which cannot be met by private capital alone.

We believe that the amendment generally is a considerable improvement over the present title III of S. 2246 and take pleasure in joining with the other veteran organizations and public-interest groups in support thereof.

We feel strongly, however, that the subcommittee should give very careful consideration to the reasons presented for providing that the program be administered by a division director of the Office of the Administrator rather than by a constituent agency as proposed in title III of S. 2246.

We do not believe that any substantial reasons have been advanced that would justify the proposed change in that respect.

A review of the testimony of the various veteran organizations and public-interest groups who have devoted so much time and effort to this program will disclose the unified thinking that there should be a separate constituent agency created within the Housing and Home Finance Agency as a greater assurance that this program would_receive the special consideration necessary for its success rather than become submerged in the numerous other activities and responsibilities of the Office of the Administrator.

The amendment contains a section providing preference to veterans in the rental of housing units constructed under this title which has been spelled out in much the same manner as provided in the public housing bill enacted last year.

We believe that if the provisions of this section are implemented with appropriate regulations and properly enforced, upwards of 75 percent of the housing units constructed for rent under this title will go to veterans or their families; and we, therefore, take particular pride in having had a part in its proposal.

In conclusion, we would like to congratulate the chairman and members of the subcommittee for their untiring efforts to fill in the gap of well-balanced Government housing program by giving priority to this legislation.

We urge the speedy approval by this committee of the amendments to S. 2246 which will provide financial assistance to the middle-income third in acquiring housing accommodations at prices they can afford to pay.

Senator SPARKMAN. Thank you very much, Mr. Dinger. Do you have any questions, Senator Long?

Senator LONG. You mentioned that there were some cases here where veterans were forced to pay very high prices for rental housing. Were those high prices financed over a period of many years, the ones that you have in mind?

Mr. DINGER. What I had in mind there, Senator Long, was the problem of not having housing units available at the $40, $50, and $60 figures, that people who should be renting could rent. I refer to people who because of their occupation are not stably situated or for other reasons should not be buying but should be renting. The absence of that type of unit and the failure of the private building industry to provide that price apartment has necessitated a lot of veterans buying FHA and GI houses which have been put up under this economy housing program. They are inferior housing. They have been fooled by the amortization rates and the monthly costs into thinking