to a point where it is now about 39 percent of the total. That, again, is due to the conditions which existed during and since the war.

Mr. SMITH. Does this bill provide for subsidies in an amount sufficient to cover the cost of constructing these projects and amortizing them, or does it not?

Mr. FOLEY. This bill provides a difference from the previous bill— for the payment of subsidies, on the general method that I have described, on a term which would result in amortization in 40 years or less.

Mr. SMITH. In other words, it provides a sufficient subsidy for amortizing the——

Mr. FOLEY. Or paying the difference

Mr. SMITH. Now, wait a minute.

Mr. FOLEY. Between the net earnings in the low-rent character and the funds necessary to accomplish that purpose.

Mr. SMITH. Thirty-two million dollars a year, which is increased to $160,000,000.

Mr. FOLEY. A maximum of $32,000,000 in the first year.

Mr. SMITH. For the first year. And that amounts to around $6,000,000,000—a little more than $6,000,000,000; is that not true?

Mr. BUCHANAN. $1,260,000,000.

Mr. FOLEY. The Congressman refers to the fact that that is stepped up every year. If one wished to calculate it that way, Congressman, yes. There are other ways in which you can calculate it. You can calculate it on the basis of what you are going to pay each year for benefits derived in that year, for a program of this kind for the welfare of the country. You could capitalize it at the beginning, and decide on a much lesser figure, or you could do it the other way and come up with a higher figure.

Mr. SMITH. The point I am trying to bring out, Mr. Foley, is whether or not this little more than 6 billion dollars, which this bill calls for to be made in annual appropriations, whether that is sufficient to cover the cost of constructing these projects involved in the bill500,000 units and amortizing them over a period of 40 years. You can answer that question "yes" or "no."

Mr. FOLEY The answer, Congressman, is "yes."

Mr. SMITH. That is all I want to know.

Mr. FOLEY. But I think you have not stated everything in it. HowI will let it rest with the answer "yes.'

ever,

You have not stated all the factors involved, in your question.

Mr. SMITH. What are the factors?

Mr. FOLEY. For instance, you have left out of consideration the question of local contribution in the annual carrying of these projects. Without that, it probably would not be sufficient.

Mr. SMITH. What is the local contribution?

Mr. FOLEY. Not less than 20 percent of the Federal contribution, contributed ordinarily in tax exemptions.

Mr. SMITH. Is that local contribution used in any way to amortize the total cost?

Mr. FOLEY. If you had to pay taxes on these properties, and you did not have that local contribution, the answer to your previous question would not be "yes"; it would be "no."

Mr. SMITH. I did not get that.

Mr. FOLEY. If you did not have a local contribution, Congressman, and the projects had to pay what other projects privately-owned had to pay in the way of taxes, then it is probable that the answer to your question would have been "no," that the Federal contribution would have had to be greater.

Mr. BUCHANAN. Mr. Foley, what proportion of this legislation would you say acts as an incentive to private housing, and what proportion to public housing?

Mr. FOLEY. I would say that the bill is not less than 90 percent incentive to private and 10 percent on the other side. I personally do not even separate them in that way. I think that the other provisions for public aid are at least a challenge to private enterprise and, consequently, an incentive.

Mr. FLETCHER. Mr. Chairman, following up the line of questioning of Dr. Smith, if I got the figures correctly, 6 billion dollars represents a 40-year figure for 500,000 houses; is that correct?

Mr. FOLEY. The maximum that the bill would permit to be constructed would be 500,000 houses, and the figure that the Congressman has arrived at is, I presume, by multiplication of the maximum cost contribution under the bill, which probably would not actually materialize; judging from past experience, and the probable ups and downs in the future situation of this country, we probably would not pay the maximum authorized subsidy.

There are also other factors in the bill, which the fiscal folks can more expertly discuss than I can, which might readily have the result of hastening the amortization so that you would have your bonds paid off in 30 or somewhat more years. And, of course, you stop paying a subsidy when your bonds are paid off.

Mr. FLETCHER. I am not very good at mathematics, but if you divided 500,000 into $6,000,000,000 you get each house costing the Government, over a period of 40 years. $12.000 per dwelling unit.

Mr. FOLEY. That, of course, would be as impracticable a way of determining what a house costs as it would be to say that the house that sells for $5,000 today and which we are going to require 30 years to amortize, costs $9,000 including all of the interest, because in the meantime we are getting the use of the house.

Mr. FLETCHER. That is why I get right back to my original discussion with you. If that kind of money, over a period of 40 years, is going to go into a house, would we not be better off to give these houses to the most needy people? That is the point I am making. I get right back to it all the time. Let us do the same job in a different way and give the houses to the people who are most needy. Do not charge them any rent. If they need a house, I would rather see it on that basis.

The CHAIRMAN. That is reminiscent of the debates we had back in 1937, Mr. Fletcher.

Mr. FLETCHER. I was not here. I am glad to bring back your reminiscence.

Mr. FOLEY. I would be glad to look up those debates.

The CHAIRMAN. The thought was, then, that the Government would be better off by making an outright gift.

Mr. FOLEY. I would suggest to you that Mr. Egan would be more helpful to you on questions of detail.

The CHAIRMAN. Mr. Foley, is there any information in your office, the Department of Commerce, or the Census Bureau, or anywhere else, as to what constitutes a "family"?

Mr. FOLEY. I think there are various definitions.

Can you quote a definition on that, Mr. Egan?

Mr. EGAN. It is two or more people who are related and who live together.

The CHAIRMAN. We have had an awful lot of probable explanations before this committee as to what constitutes a family, but we have never gotten a definition of what constitutes a family. The Bureau of the Census must have some rule which they follow and which, for all purposes, would be reasonably authentic. I think that unless you have a definition in some of your regulations with respect to your particular activity, I presume we would have to accept the definition as given to us by the Bureau of the Census. I do not know as we have ever had that before this committee. Will you look into that and see if you cannot come up with a definition of a family?

Mr. FOLEY. We will give you the definition used by the Bureau of the Census for its work and the definition applied by the Public Housing Administration for its work.

Mr. FLETCHER. Mr. Chairman, has there been any definition of decent, safe and sanitary housing, as appears on page 5 of the pending bill? Have you given any thought to that?

Mr. FOLEY. Yes, we have. I think that various standards necessarily must be applied in various places.

(The matter referred to is as follows:)

DEFINITION OF FAMILY

1. BUREAU OF THE CENSUS

In its statistics on housing, the Census has primarily relied on the concept of "household" rather than "family." A household is defined as all of the persons who occupy a house, an apartment, or other groups of rooms or a room, which constitutes "separate living quarters." It includes the related family members, also unrelated persons if any such as lodgers, servants, or hired hands who share the living quarters. A person living alone is counted as a one-person household.

The concept of family in the sense of a family head with other related persons is used in the population census but not in the housing census. One-person families are recognized in this connection.

In recent studies of consumer income, the Census has used the term family to refer to a group of two or more persons related by blood, marriage or adoption and residing in the same household. In this connection, individuals living alone are counted separately and are not considered as families. It should be noted that the Census is considering a similar definition for family in connection with the forthcoming decennial census.

2. PUBLIC HOUSING ADMINISTRATION

The definition of family adopted by the PHA in administering the United States Housing Act is based primarily on the concept of related persons living together, and does not recognize one-person families. The full PHA definition is as follows:

"Family. The term 'family' shall mean a natural family consisting of a family head and one or more other persons related to the head by blood, marriage, or adoption, and in addition to a natural family, may include other persons

known to have lived regularly as an inherent part of the family group and whose earnings and resources are available for use in meeting the living expenses of the group. The term 'family' shall not include a group of unrelated persons living together, lodgers, or persons living alone."

The CHAIRMAN. The committee may have to go before the Rules Committee this afternoon on the Reconstruction Finance Corporation Act and the Commodity Credit Corporation bill.

The committee will stand in recess until tomorrow morning at 10 o'clock.

Mr. FOLEY. Thank you very much, gentlemen.

The CHAIRMAN. Thank you, Mr. Foley.

(Whereupon, at 12:30, the committee adjourned, to reconvene at 10 a. m., Tuesday, May 4, 1947.)