Mr. KENNEDY. Yes: Mr. King, I believe, went into that in considerable-detail the other day, too.

Then I will follow your suggestions, sir

The CHAIRMAN. Mr. King testified while I was away, on this whole matter, and I wasn't present. I happened to be away. I was at Will Hayes' funeral last week. I didn't hear his testimony.

Mr. KENNEDY. I think these letters I just referred to will answer your question, Senator.

The CHAIRMAN. Fine.

Mr. KENNEDY. On page 2 of our supplemental statement, I would like to call your attention to a paragraph. We gained this information from a Member of the House of Representatives, who, while he gave me permission to use it, requested I not divulge his name. It is at the top of page 2 of the supplemental statement. In item 5, we give the additional cost that would be involved for the first year. As I say, these figures came out of the Veterans' Administration in reply to an inquiry made by this gentleman of the House. There is no use in my reading it, as long as you are looking it over, Senator.

The CHAIRMAN. In other words, had the rate been 514 percent instead of 42 percent, it would amount to $419 million.

Mr. KENNEDY. Yes, and the average loan is $9,480, and over the years that would amount to an additional interest payment of $932.83. During the first year the increased interest charge would be $70.72. We bring that out to

The CHAIRMAN. Of course, this is the maximum.

Mr. KENNEDY. Yes, sir.

The CHAIRMAN. There is nothing, as the law is written, requiring the President to do that. The law states that he can't make it higher than 214 percent, or 212 percent.

Mr. KENNEDY. That is correct.

The CHAIRMAN. He doesn't have to. Under the law, as it is written, at the moment, he could keep it as it is.

Mr. KENNEDY. If they kept it down, there wouldn't be too much argument about it.

The CHAIRMAN. But the law gives him the right to place the interest right at 22 percent above the going interest rate on Government bonds, long-term Government bonds.

Mr. KENNEDY. As I said before, we yield to no one our admiration for President Eisenhower, but he has to depend so much on his advisers, because he is busy, and his immediate advisers might be influenced to exercise the authority to establish maybe not the highest possible rate, but not too far from the top.

The other point we have, Senator, if you have no further questions on the interest rate, is on page 5 of Mr. Daniel's statement. That deals with some of the preferences. In other words, when the original GI bill was put through on June 22, 1944, Congress had in mind giving the then ex-servicemen some preferences due to the fact that they had been away for so many years, and give them a chance to catch up in the economic field, especially. These preferences, we feel, are not quite as strong as they should be in the bill under consideration. We would like to see them left alone.

Now, as you know, there have been over 3 million of these GI loans taken out, and the reasons that existed in 1944, at the time the original GI bill was put through, still obtain, and I would like to call your attention to the fact that, according to the statistics in the Pentagon, over half a million men who were veterans of World War II were called back again after the Korean war broke out on June 27, 1950, by virtue of the fact they were members of the Reserve.

They had to go whether or not they wanted to, of their own volition. The point I am trying to make, Senator, is here, in those hundreds of thousands of instances, those boys have had their normal life in a short span of years interrupted on two occasions. Take those fellows who were in the Guard, especially, and were called out in 1940. They had to serve a pretty long span. I don't say that in any sense disrespectfully at all to the boys who were called out subsequently through Selective Service, and might not have had to put in as long a period of time, but there were millions of them, as you know, involved. Then, we also have the Korean veterans who were members of the Reserve, and of course, you have the new group of veterans as a result of the Korean war. We feel, in other words, the economic conditions are practically the same and that they should be on a parity, insofar as these preferences are concerned, as the World War II men were. That is the crux of our argument.

The CHAIRMAN. Well, the law does change this, and I think maybe at this point we ought to put it in here. That is title VIII. Mr. KENNEDY. Yes, sir.

The CHAIRMAN. Miscellaneous provisions, section 801.

Mr. KENNEDY. That is on page 104 of the bill.

The CHAIRMAN. "Exemption of unusual types of Lanham Act housing and preference requirements and disposition."

This section would amend section 607 of the Lanham Act. I want to put it in the record at this point, just as I am going to hand it to you.

Off the record.

(Discussion off the record.)

Mr. KENNEDY. Counsel can correct me if I am wrong on this. What I have in mind is pages 26 and 27-that is, of the old law, and in there they set forth these preferences.

The CHAIRMAN. My point is in this present law we are considering, we only change it in respect to preferences in the four points that I just read.

Let's place in the record at this time section 607 (b) of the Lanham Act.

(The section referred to follows:)

(b) Preference in the purchase of any dwelling structure designed for occupancy by not more than four families and offered for separate sale shall be granted to occupants and to veterans over other prospective purchasers for such period as the Administrator may determine and in the following order:

(1) a veteran who occupies a unit in the dwelling structure to be sold and who intends to continue to occupy such unit;

(2) a nonveteran who occupies a unit in the dwelling structure to be sold and who intends to continue to occupy such unit;

(3) a veteran who intends to occupy a unit in the dwelling structure to be sold.

Subject to the above order of preference, the Administrator may establish subordinate preferences for any such dwelling structure. As used in this section 607 (b), the term "veteran" shall include a veteran, a serviceman, or the family

of a veteran or a serviceman, or the family of a deceased veteran or serviceman whose death has been determined by the Veterans' Administration to be serviceconnected.

The CHAIRMAN. I don't suppose a veteran would have any interest at all if it was unsuitable for family dwelling use.

Mr. KENNEDY. No; except a little further down, Mr. Chairman, we refer to the so-called cheap housing-this is a separate subject. Just off the record for a moment.

(Discussion off the record.)

Mr. KENNEDY. Back on the record.

We are not asking for anything more, Mr. Chairman, than was contained in the old law there. We respectfully request that those preferences be the same.

The CHAIRMAN. What we were trying to do in this section 801 was to say if it was unsuitable for family-dwelling use, then there would be no preferences, or if it was being used at the time of disposition other than for dwelling purposes, you see. So many of these Lanham Act properties are now being used for commercial use.

Then we said, "This is to be sold with the requirement that it be removed from the present location."

I don't think a veteran would want to buy it if he had to move from that location some place else.

Mr. KENNEDY. I appreciate that.

In other words, what we are asking is that the gentlemen of the Congress preserve that

The CHAIRMAN. What we are doing at the moment-and I am going to introduce a bill-I have already asked the housing people to hold up any action on these Lanham Act projects until the Congress can take a good look at the bill I am going to introduce. It will simply say this: That when offering these Lanham properties, after someone has gone in and appraised the individual units, they must be offered to the occupants of the house-first, of course, you have to give preference to veterans and so forth.

If the occupants don't buy them at the appraised price, then you can't later sell them as a whole or sell the entire project at a price, say, for half of what you were trying to sell them to the occupants for. Those that have preference and those that occupied the houses.

For example, it works like this: Suppose here is a unit of 100, and they ask the veterans and those that have preference and the occupants of those houses $5,000 apiece for them. And they say, "No, that is too high; we don't want them. We won't buy them."

Then later they advertise them for sale as a unit, and the highest bid, let's say, is only $2,000 apiece, and they sell them to him. I don't think that is fair or right. They ought to be able to sell them to the veterans and those occupying them as cheaply as they are going to sell them to somebody that is going in and buying them possibly to resell them and make a profit on them.

We had an example of that in Indiana. I was in it in quite a big way, and so was the Legion. That was near Knox, Ind., where they offered them to the veterans at a very high price per unit. The veterans wouldn't buy them, so they sold them to some firm in Ohio, as a whole, at a price-I forget just what it was-but it was a ridiculous price per unit in comparison for what they were offering as a whole.

Mr. KENNEDY. The thing that bothered us, Senator, was the language on page 104, lines 21 and 22, (b) and (c).

Of course, (b) and (d) are in the law in the 81st Congress, enacted on April 20, 1950.

The CHAIRMAN. We will get into that.

Mr. KENNEDY. The only other point we had, and this is not an objection to the bill, this is a request to include another provision, and you have just touched upon it-on page 7 of our statement there, in the second paragraph, we talked about the Housing Act of 1949. That is Public Law 171 of the 81st Congress, which provided that veterans and the families of servicemen did not have to comply with the other provisions of the so-called substandard factor for admission to this type of dwelling or building.

And we go on to recite the fact that Senator Sparkman had introduced a bill, which you just referred to, sir, S. 2937, and while it doesn't extend the law for another 5 years, it does extend it to August 1, 1954, and we would respectfully request that that bill be passed by the Congress as already approved by the Senate, or similar provisions be included in the bill you now have under consideration.

The CHAIRMAN. We extended it to August 1 to decide whether it ought to be made a separate bill or part of this bill.

Mr. KENNEDY. Yes, sir.

That is the only point we make on that subject.

The CHAIRMAN. Thank you very much. We appreciate your testimony. We may want you to come back later and help us in this

matter.

Mr. KENNEDY. We will be glad to be at your service at any time. Thank you very much.

The CHAIRMAN. The next witness is Mr. Edward Hollander, of the Americans for Democratic Action.

Mr. Hollander, do you have a statement you care to read, or do you want to place it in the record and talk extemporaneously from it!

STATEMENT OF EDWARD D. HOLLANDER, NATIONAL DIRECTOR,
AMERICANS FOR DEMOCRATIC ACTION

Mr. HOLLANDER. If you don't mind, I would rather read it.
The CHAIRMAN. Proceed in your own way.

Mr. HOLLANDER. Yes, sir.

Mr. Chairman, and members of the committee, my name is Edward D. Hollander. I am national director of Americans for Democratic Action. I appreciate this opportunity to appear before you to present the views of ADA on the housing proposals you are considering.

ADA, from the time of its founding in 1947, has consistently advocated measures to improve housing conditions of the American people. It has always seemed to us a cruel and unnecessary contradiction that in this great and rich country, with its enormous resources of manpower and materials, so many of our families-now estimated at upward of 8 million, and as high as 15 million-should be forced to live in homes that are seriously substandard, at best, and at worst, unfit for human habitation. As the report of President Eisenhower's Advisory Committee on Housing said:

our country, which has the highest standard of living in the world cannot permit a substantial number of its citizens to live in filth and squalor,

in hovels which health laws for the protection of our people would not allow for farm animals.

There is another reason why ADA strongly urges action to wipe out substandard conditions of living. In its outspoken and resolute opposition to communism, here and abroad, ADA has always believed that a high standard of living for all the American people is indispensable in the arsenal of our weapons against communism. By these means, we can prove to our own people, by the daily experience of their lives, and to the rest of the world by our example, that democracy is the way not only to freedom but to abundance and security as well.

The CHAIRMAN. Let me say this-and I do not say it in criticism. It is just a part of the feeling I have had for a long while that we say and do a lot of things in the United States that puts ammunition in the guns of our enemy.

For example, your statement-of course, you are just quoting the President's Advisory Committee Report which says:

In which our country which has the highest standard of living in the world cannot permit a substantial number of its citizens to live in filth and squalor, in hovels which health laws for the protection of our people would not allow for farm animals.

Now, you did not make that statement, the President's Advisory Committee made the statement. But I think that would make awfully good reading in communistic countries.

Mr. HOLLANDER. I think the only way we can strengthen our democracy is to show our shortcomings and face up to them and correct. them.

The CHAIRMAN. I agree with you 100 percent that we ought to face up to them and correct them, but I don't think the best way to sell our democracy is to sell its weaknesses. But you didn't make that statement. I think it might be better to sell our strength, not weaknesses.

Mr. HOLLANDER. I think President Eisenhower, in the statement I am about to quote, in which he said, in dedicating a public housing development for low-income families in New York:

In it we expect to see happy families, families who, because of their standard of living, are our Nation's best weapon against communism. More eloquent defense against that insidious doctrine than the most eloquent tongue of any lawyer, preacher, or teacher. A more sure defense than any battleship or any plane or any gun or any bomb of whatever kind. This is the kind of thing that will preserve this Nation.

The CHAIRMAN. That is a true statement providing the persons who live in those houses own them. But if they are going to be owned by the Government and operated by the Government, then I don't think it is a true statement. All communism is, is an attack upon the ownership of property. It is only when Government gets complete 100 percent control of all the property that you have communism. Therefore, you could well have communism and still have a new home for everybody in America.

Senator IVES. You are talking about socialism, too?

The CHAIRMAN. Yes, socialism and communism.

Mr. HOLANDER. I believe the President was speaking of a public housing development owned by the Government.