not desirable. This provision would seem to channel the assistance to be given the mortgage-financing industry to the $15,000-and-below price range. We believe the facility should be authorized to purchase mortgages up to the full extent of FHA and VA authorizations.

TITLE IV, SLUM CLEARANCE AND URBAN RENEWAL

The provisions of the bill designed to broaden and redirect the slum clearance and urban redevelopment programs in order to assist communities to meet the problems of eliminating and preventing the spread of slums and urban blight, seems to be in keeping with the new approach of placing greater responsibility upon the local communities to take effective action in this regard. We believe the provisions in the bill requiring a locality to present a reasonable program for eliminating and preventing slums and urban blight and the requirement that the Administrator make a determination that the program is satisfactory, and so certify, prior to Federal assistance, is an excellent provision.

This is at best a long, hard, tough job which we feel will, with this new approach, begin to make headway as our cities and towns realize that theirs is the first responsibility.

WHY TWO SYSTEMS OF GOVERNMENT GUARANTY AND INSURANCE

One other problem of concern to our industry is the problem involved in the two systems of mortgage insurance and guaranty provided by FHA and VA.

This industry is in agreement with the recommendations of a subcommittee on FHA and VA programs of the President's Advisory Committee, which suggested in their recommendation No. 33-pages 65-69 of the report-that the President direct the Administrator of the Housing and Home Finance Agency, and the Administrator of the Veterans' Administration, and the Commissioner of the Federal Housing Administration, to work out an interagency agreement under which VA would contract with FHA to perform the technical functions of processing veterans' home-loan applications under the present home loan guaranty program.

This recommendation was designed to quote the report

to have one agency of the Federal Government charged with the administration of the function of market analysis; land planning requirements, valuation and appraisal; minimum property and construction standards; and property inspection.

It is our belief that the veteran and the homeowner who make use of the insurance guaranties of FHA and VA, as well as the builder and the mortgage lender, should no longer be subjected to the varying details, confusions, and costs involved in the present operation of the two parallel but differing systems of underwriting, inspection, and construction standards on loans. We believe the consequent saving to the taxpayer and the Government is also worthy of consideration. It may be there are good reasons why this proposal was not incorporated in the legislation. Perhaps it can be accomplished without legislation, but we strongly recommend that the committee in some manner give consideration to these recommendations.

CONCLUSION

In conclusion, Mr. Chairman, in behalf of our industry, we have the utmost confidence in, and respect for, HHFA Administrator Cole, and the President's housing aims. We also recognize the importance of the FHA and VA programs, and the good they have accomplished in the residential construction field. We also are aware of the enormous task ahead in the elimination of slums, and the redevelopment of our communities.

There is little disagreement as to the ultimate aims and objectives of the President's housing program. There is, of course, some disagreement as to the best method of accomplishing these aims.

The bill before you is designed to make more readily available to more people, in more communities, the aids of the Federal Government to private industry to provide housing.

The recommendations which we have presented are consistent with these aims. We would like to see these aids made available to everyone who can use them. We are concerned with the problems of people who build and wish to build in our small- and middle-sized communities throughout the country. It is here that our people are most active and it is in these types of communities that we are having our major difficulties. The problem of securing adequate mortgage and consumer credit is greatest in these communities in contrast to the relatively easy flow of credit in our great urban and metropolitan centers.

Our suggestions are aimed principally at broadening the use of these various Federal aids in order that our industry may be better able to make a substantial contribution to a continuing prosperous housing

economy.

The CHAIRMAN. Mr. Gordon.

MAN.

STATEMENT OF MILTON GORDON, MORTGAGE CONSULTANT,

BEVERLY HILLS. CALIF.

Mr. GORDON. Mr. Chairman and members of the committee, my name is Milton Gordon. I am a mortgage consultant to various builders in California. I would like to suggest to this committee that they do not eliminate title IX of the Federal Housing Act, the instrument used for defense housing at the present time. It is quite possible that at any time in the future an emergency might arise whereby it would be necessary to use title IX for the creation of immediate housing for defense industry.

It is my suggestion in the interests of preparedness that you put title IX on a standby basis to be used at the discretion of the President, if necessary, in time of crisis.

We have found that title IX is an effective instrument in providing housing in isolated areas for both defense workers and military personnel. The best example is a project completed by a builder client in Las Vegas, Nev., which rents 2-bedroom apartments to personnel of Nellis Air Force Base at $77.50 per month, including stove, refrigerator, garbage disposal, evaporative cooling and lawn maintenance, whereas the rental for a 2-bedroom apartment in privately owned housing in Las Vegas, Nev., is $125 per month.

I wish to thank the chairman and members of the committee for considering this proposal.

The CHAIRMAN. We have two witnesses this afternoon, one being the representative of the Congress of Industrial Organizations, at the conclusion of whose testimony we will hear from Mr. McCormick of the Trailer Coach Association.

Mr. Thimmes, you may proceed.

STATEMENT OF JAMES G. THIMMES, VICE PRESIDENT, CIO, AND UNITED STEELWORKERS OF AMERICA, ACCOMPANIED BY JOHN W. EDELMAN, CIO LEGISLATIVE SUBCOMMITTEE ON HOUSING; FRANK FERNBACK, ASSOCIATE DIRECTOR OF RESEARCH; AND BEN FISCHER, DIRECTOR, COMMITTEE ON HOUSING, CONGRESS OF INDUSTRIAL ORGANIZATIONS

Mr. THIMMES. Associated with me are John Edelman, of the CIO legislative subcommittee on housing, Ben Fischer, the director of the CIO committee on housing, and Frank Fernback, associate research director of the CIO.

I have a prepared statement that I would like to start reading for the benefit of the committee.

I greatly appreciate the opportunity to present to this committee the views of the Congress of Industrial Organizations on the administration housing bill.

Recently, the chairman of this committee, Senator Capehart, performed a great service by identifying the legitimate area of concern of the Federal Government in the housing field, in the course of his remarks at the National CIO Housing Conference last January.

We need not be concerned, Senator Capehart pointed out, with those Americans whose incomes are large enough and whose credit is sufficient to buy a decent home on satisfactory terms. These families need no governmental aid and, in fact, are a group whose housing needs have largely been fulfilled in the course of the housing boom of recent years.

There are two other groups, however, the Senator pointed out, whose housing problems must be a concern of the Government. One of these groups consists of those people who just do not have sufficient income to pay for proper housing. The second group is made up of the millions of moderate income families who need and want better housing and could pay for it, if it were made available at a reasonable price and under conditions of payment that their incomes could support.

Any constructive appraisal of the administration housing bill must be based upon a realistic assessment of the degree that the proposed legislation does, or does not, adequately aid the low- and moderateincome families in these two groups to achieve decent housing. I am sure that Senator Capehart and all of the members of this committee agree with this basis of judgment.

In presenting the proposed legislation to the Congress, the administration has given the impression that its enactment will achieve the construction of about 1 million new housing starts a year.

In the face of the fact that millions of homes are already substandard, or become obsolete or are destroyed each year, and the

further fact that the population of this Nation is growing with unprecedented speed, the administration housing goal is completely inadequate.

While responsible public groups estimate that human needs dictate a housing target of about 2 million new units each year to catch up with the backlog and to keep up with newly created housing needs, it is not our intention in this testimony to split hairs over the precise figure which should constitute our national goal.

It is of far more significance that the administration's own estimate of the stimulus its housing bill would provide, would leave the Nation with an annual total of new housing starts 10 percent below the 1953 achievement; almost 13 percent below the new housing starts of 1952; and 40 percent below the record production of 1950.

Clearly, in terms of the needs for new homes, the people's desire for them, and the ability of this Nation to build them, the mere achievement of the administration's goal would find our national need. Certainly, the Congress has the responsibility to determine whether this goal is adequate, and if not, what must be done to raise it, and to assure its fulfillment. It is our view that the proposed legislation itself does not even assure the achievement of the 1 million goal, a total which at the outset is clearly inadequate.

A million new units is not enough, not only because it will not achieve enough new housing; it is doubly inadequate because the level of new home construction is a vital factor in determining whether this Nation is prosperous or not; whether unemployment will grow or rerede; and whether the great building industry will carry the Nation forward in the face of recessionary forces and play its full part in counteracting them.

The employment effect-both direct and indirect-of a 50-percent increase in home building, would be tremendous. Consider the effect on both production and job opportunities, if we could close even half the gap between what the administration expects the housing industry to achieve and the 2 million goal that CIO and many others feel should be achieved.

Actually, it is folly to assume that even a million new housing units will be built as a certainty if the present program is merely extended with some minor tinkering, in the manner that the administration bill proposes.

In the face of currently rising unemployment and falling incomes, it is entirely possible that the housing industry may stagnate and contribute to unemployment rather than expand, as it certainly could if the Congress enacts a bold and far-reaching program. Surely, it is the hope of all of us that your action in the field of housing will serve as a stimulating factor to help reverse the present economic decline. But, if our national housing program is to move forward to meet the needs and to fulfill the hopes of the American people, we must carefully define the groups that constitute our great potential housing market and then pattern our public policies in a manner which will assure that this demand can be fulfilled.

The first such group, already defined for us by Senator Capehart, is made up of those who do not have sufficient income to buy new private housing and who, in our opinion, require public housing to secure adequate family shelter. This group is made up of families who have incomes of under $3,000 and most of them earn less than

$2,500. The latest census figures reveal that in 1951, more than 31 percent of our nonfarm families earned under $3,000; 23.6 percent received less than $2,500. More than 10 million American families were in the group earning less than $3,000, and over 8 million received less than $2,500.

This is the segment of our population whose housing need is the most urgent, because it is so largely made up of occupants of substandard dwellings. Yet, these are the families whose financial means are the least adequate; for the majority, if new housing is to be obtained, only public housing will provide a reasonable answer.

Senator Taft fooked for another way; he found none. The President's Advisory Committee looked for another way; it found none. It is for this reason that we argue that no national housing program is adequate unless it includes at least a return to the 1949 Housing Act's provision for the construction of 135,000 housing units a year, and a top of 200,000 to be invoked under extraordinary circumstances such as exist at present.

The CHAIRMAN. Will you yield for just a moment for a question? Mr. THIMMES. Certainly.

The CHAIRMAN. You don't necessarily feel these should be apartments going away up in the air. You are talking in terms of both apartment buildings and individual units out, maybe, 5 miles?

Mr. THIMMES. It depends on what the requirements of the particular situation are, of course; yes.

The CHAIRMAN. You are thinking in terms of individual housing as well as the duplexes and large apartment buildings, maybe, that might well have 1.000 apartments in them?

Mr. THIMMES. Yes.

Senator GOLDWATER. But those would be included in the units. You might have an apartment house with 1,000 units in it to be included. Mr. THIMMES. That would be 1,000 units, of course. It might be an individual unit or 10 units.

The CHAIRMAN. In this instance, you feel that the Federal Government ought to build these units, whether they be individual units or big apartment buildings or duplexes, and rent them to the people? Mr. THIMMES. Under a public-housing program; yes.

The CHAIRMAN. In other words, you are talking here about rental units now?

Mr. THIMMES. Public housing rental units; yes.

The CHAIRMAN. You may proceed.

Mr. THIMMES. Surely, this committee should reject the piteously inadequate proposal of the administration and set the stage for an all-out resumption of the public-housing program on a vastly expanded basis. Public housing is cheaper than slums, urban decay, disease, and human blight caused by substandard housing conditions and it is cheaper by far than the cost of idle factories and idle men. The second major group, which has also been identified by Senator Capehart, consists of millions of moderate-income families who want better housing and could pay for it if it were made available at a reasonable price and under conditions of payment that their incomes could support. These are the families who constitute the greatest potential market for an expanded private home-building industry.