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concern, and must be resolved at the local level to the greatest possible extent. No community will long retain its integrity and selfrespect if it attempts to slough off its problems without having exhausted the possibilities of helping itself. The financial limitations of even the most solvent communities, however, soon become self-evident, once the total cost of blight elimination and low-rent housing has been calculated. It is true that Milwaukee, by frugal management, has achieved the liquidation of its bonded debt, so that, in effect it is a debt-free city. We have recognized, however, that the accomplishment of a number of long-term improvements must be financed by borrowing, chief among these, housing and blight elimination.

On April 6, 1948, the citizens of Milwaukee, by referendum, approved a $2,500,000 bond issue for blight elimination. These funds will be used primarily for the acquisition of property in blighted areas under the so-called blighted area law, whereby the land may be cleared and sold to private redevelopment corporations at a "use" value as determined by the common council. Any one familiar with land costs in blighted areas will immediately recognize the limited amount of elimination that can be accomplished with $2,500,000, although that amount in itself is quite a substantial contribution for a city of Milwaukee's size. Our housing authority, in developing Milwaukee's first aided low-rent slum clearance project in the sixth ward, acquired by purchase or condemnation, two square blocks at a cost of $350,000. Assuming this cost to be typical, for purposes of estimate, the $2,500,000 bond issue would make possible the acquisition of about 14 blocks, and there are literally hundreds of blocks that may be dealt with.

My purpose in being here as a proponent of the T-E-W bill must therefore be obvious. I regard title V, and the aid it would provide to local communities as indispensable if cities are ever to make a real beginning in their attack on slum clearance.

Augmenting such aid, however, must be the further assistance of a federally sponsored low-rent housing program since, as I have attempted to point out, blight elimination and the housing of low-income families must go hand in hand.

Milwaukee has contributed $962,000 to its first low-rent slum clearance project, the Federal Government participating to the extent of $1,786,000. The city made this grant to make the project possible, but clearly no city's finances will permit a comparable contribution for all of the low-rent housing that is needed. Veterans' housing needs also must be given consideration. Milwaukee voted $3,500,000 for this purpose, and the Housing Authority is undertaking 1,200 units of permanent housing for veterans to rent at $50 per month, using the $3,500,000 as a one-third equity, and financing the remaining twothirds with revenue bonds of its own issue. When this program has been completed, we will still lack about 3,000 units, since 4,200 units were recommended for a 3-year veterans' housing program.

Looking to the State of Wisconsin for aid in our housing problem, we have been confronted with legal difficulties which will delay for an indeterminable period any aid that might be forthcoming from that source. The city, aside of its own limited resources, must therefore turn to the Federal Government for assistance.

I realize that I have confined myself, perhaps too closely, to Milwaukee's own problems, particularly as regards slum clearance and low-rent housing. I further realize that the development of a stable

and healthy home-building industry is of the utmost importance, if it can be given an opportunity to make its full contribution toward a prosperous economy of maximum and sustained production and employment.

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

(Whereupon, at 12: 30 p. m., the committee adjourned, to reconvene at 10 a. m., Friday, May 14, 1948.)

GENERAL HOUSING

FRIDAY, MAY 14, 1948

HOUSE OF REPRESENTATIVES,

COMMITTEE ON BANKING AND CURRENCY,

Washington, D. C. The committee reconvened at 10 o'clock a. m., pursuant to adjournment, the Hon. Jesse P. Wolcott, chairman, presiding.

Present: Messrs. Wolcott, Gamble, Smith, Kunkel, Talle, Kilburn, Buffett, Cole, Stratton, Banta, Nicholson, Spence, Brown, Patman, Folger, Riley, and Buchanan.

The CHAIRMAN. The committee will come to order.

We will proceed with the further consideration of S. 866 and related bills.

Mr. Farrell Dobbs, the presidential candidate of the Socialist Workers Party, was scheduled to appear before the committee in support of the bill, but he will be unable to read his statement personally. However, it will be included in the record at this point, without objection. Also Frederick A. Ballard,who was appearing on behalf of the Washington Housing Association, finds himself in a similar situation. His statement, which he desired to have inserted in the record, has been left with the committee.

STATEMENT OF FARRELL DOBBS, PRESIDENDIAL CANDIDATE OF THE SOCIALIST WORKERS PARTY

Mr. DOBBS. I want to talk today about an iron curtain. This particular iron curtain was not fabricated by Russians or totalitarianism. This iron curtain carries the trade mark "Made in U. S. A."-it was made by the capitalist system which is strangely called "free enterprise." I am talking about the iron curtain that separates millions of American working-class families from decent homes and in innumerable cases from any homes at all. I am talking about the iron curtain which separates the veterans and their families from the lofty promises of modern, livable, and low-rent housing accommodations which were made to them during the war.

The record proves beyond a doubt that Congress has not kept the promises which were made to the veterans. But this is all in the tradition of giving soldiers a promissory note to make them fight the rich man's wars and then welching on the note when it came due for collection. The tradition is as old as America. The merchants and bankers of the Revolutionary years, led by their evil genius Alexander Hamilton, contrived the great swindle of cheating the veterans of Valley Forge out of their earnings by manipulating the value of the currency. About 70 years later the corrupt agents of the industrial barons and the railroad kings swindled the Civil War veterans out of their homesteads-that, too, gentlemen, might be called a housing scandal.

The war hysteria now being whipped up right here in Washington from the floor of Congress is not unconnected with the shortage of homes in this country. It is a method as old as class society itself. It began with the circuses the Roman slave masters employed to divert the attention of hungry, homeless, and discontented people. Hitler and Mussolini brought this method to modern perfection-when concentration camps and jails proved inadequate they were

quick to beat the war drums in order to divert the attention of German or Italian workingmen from their wretched working and living conditions.

The failure to provide housing is the failure of capitalism. By the same token, it puts the mark of bankruptcy upon political parties which make the defense of the system of private profit the cardinal plank in their platform. Regardless of the turn in the economic cycle, the housing crisis has remained with us. Former President Roosevelt declared during the last devastating depression, in the first year of his administration, that one-third of the nation was ill-housed. Today, at the peak of the postwar boom, with national income at a record level, President Truman tells us that the housing situation is "almost fatal."

Why was there no genuine alleviation of the housing shortage during the last depression? The banks had billions of dollars in idle capital. There were tens of thousands of unemployed building trades craftsmen and many more jobless in the building materials industries. Despite the great need for homes, the banks, mortgage and insurance companies, and real estate interests deliberately blocked a building program for low cost housing because a profitable market was lacking-that is, because the earning power of working people was too low to pay the exorbitant rents which would make a large-scale building program profitable.

Since Roosevelt made his melancholy remarks about the housing problem, the crisis has become far more acute and aggravated. It is conservatively estimated that there are at least between 2,500,000 and 5,000,000 families who are doubled up with friends or relatives, crowded into unsanitary trailer camps and dingy hotel rooms-families who live under such conditions that they can best be described as homeless. This does not include between 18,000,000 and 21,000,000 nonfarm city and rural families who live in substandard and slum dwellings. Most of these structures are in an advanced state of deterioration and many of them, now fully occupied, have long ago been condemned as uninhabitable by official agencies in the major cities.

When an innocent man is wrongly sentenced to die for a crime he did not commit, there is a great outcry at such a miscarriage of justice. Even Congress might be prevailed to help redress the wrong. But the failure of capitalist business and its political representatives in the national government to alleviate the housing shortage is tantamount to a sentence of premature death to millions of slum dwellers in New York, Chicago, Pittsburgh, New Orleans, Detroit, Cincinnati, Columbus, and other major cities. Yet there is no major outery against this national injustice-at least, none that can be heard over the din that is made for military preparation and war. These millions live under indescribable conditions, congested in overcrowded tenements, surrounded by filth, vermin, rats, and disease, and live in perpetual danger of fire.

Those who boast of the "American Way of Life" must have in mind the fine mansions and sumptously appointed apartments on Park Avenue in New York or on the Gold Coast in Chicago, or in Detroit's Grosse Point where it is pleasant to discuss the "housing problem." While a handful enjoy such handsome accommodations, the iron curtain is drawn tight over the slums of New York's Harlem or lower east side, Detroit's Black Bottom, Pittsburgh's Hill District, New Orleans' Irish Channel, Cincinnati's Basin, or the Sausage Row in Columbus.

The economics textbooks in the schools and colleges tell us that under the system of private enterprise capital seeks places of investment where demand is greatest. That was true when capitalism flourished as a progressive system in this country. But it is no longer true today. How else explain the failure of capital to invest in large-scale housing construction at a time when the demand is unprecedented in history?

The truth is that the big capitalist interests-the banks, insurance companies and real estate interests-are deliberately obstructing any substantial alleviation of the housing shortage. The present scarcity is far more profitable to them than would be the building of low-cost units on a large scale. It is estimated that a substantial profit could be realized with 15 percent of the housing units vacant. Today virtually every inch of space, from the attic to the cellar, is occupied by tenants who are paying exorbitant rents. The cost of maintenance and upkeep for these units has never before constituted such a small percentage of operating expenses. Profits from real estate stand at a record high.

Large scale new construction at low rentals would enter into competition with the present properties held by the real estate interests and would tend to curb and lower these fabulous profits. Therefore, the monopoly interests seek to sabotage, obstruct, and strangle a genuine housing program-regardless of the great demand.

There is further evidence that bears out this point. Real estate interests are not adverse to building provided the sales or rental price is well over a rigidly established minimum. There is no scarcity of high rental apartments and expensive homes. Builders consider $80 a month rental in major cities the lowest profitable basis on which to base construction figures. We have before us the example of construction under the Patman bill. This bill dipped into the treasury in order to give $400,000,000 in bonuses to material producers with the aim of constructing houses that would sell at a $6,000 maximum and would rent for $50 for five rooms in the New York area. In practice, however, sales prices ranged from 10 to 18 thousand dollars in the area and rentals were set by the Office of Price Administration for three rooms at $79 plus $3 maintenance. Most of these houses were high-priced jerry-built shacks built with green lumber and inferior construction standards, small rooms on very small lots. Veterans and their families were the victims of this "free enterprise."

This high-priced form of housing construction is completely out of the reach of the vast majority of America's wage-earning population. Some 18 to 21 million families pay rentals of $39 or less in cities and $29 or less in nonfarm rural areas. With the present high cost of living, even this rent works a great hardship on large numbers. But the needs of the American people are of little consequence to the great monopoly interests. Big business considers the American people no less objects for exploitation than it does Chinese coolies, Egyptian cotton pickers, or Bolivian tin miners. They have, in effect, decreed that the slums shall remain, that millions shall continue to be homeless because the profit rate on low rental housing is not high enough to risk the investment of capital.

Those who uphold the capitalist system, which stands in the way of the health and welfare of the majority of the American people, of course, deplore the terrible housing conditions in this country. In the months to come the issue will be made a campaign football, with the blame passed from party to party. And, of course, promises will be made with the greatest abandon. But that will not cover up the record-the shameful, ignominious, do-nothing record.

What has been done since the end of the war? It is not correct to say that nothing has been done. Congress has been very active in that time. Active in blocking the development of any genuine housing program. Active in undermining rent controls, making it easier for the real estate sharks and the rent hogs to gouge the people. Congress has thus been serving the big banks and the real estate lobbies, guarding their interests against the growing mass of destitute Americans. It has been a Congress of Homebreakers.

Those who defend capitalism charge that socialism would break up the family. There is no socialism in this country, but what has happened to the family under capitalism? It is being reared today under such crowded and unhealthy conditions as to stunt and deform the bodies of the children, to debase all standards of morality and decency and to breed juvenile delinquency and crime on a scale unparalleled in American history. The home, for millions of the youth today, has become a hated, unorganized barracks, producing only the desire for flight.

The Taft-Ellender-Wagner bill, which, if I am not mistaken, has been kicked around in Congress for the last 2 or 3 years, is a most pitiable caricature of a housing program. The bill calls for a total of 15,000,000 homes to be built in the next 10 years. That, in itself, would be a great achievement even though almost twice that many units are needed to rescue the American people from substandard and slum housing conditions.

But the joker is that, out of the 15,000,000 projected units, not more than half a million units-that is, those to be built by the Government-stand a chance of being built in the next 5 years. That amount will not even cover demands created by the normal increase in population, let alone seriously alleviate the distress among the millions doubled up with relatives and otherwise homeless. The rest of the 14,500,000 units are mostly "castles in the air" as far as the average veterans and worker is concerned. Private industry which is urged to construct these units has not and will not build low-cost housing on so large a scale. That fact has been amply demonstrated in the past years. There is even more direct evidence in New York City where generous grants given to private builders and insurance companies for slum clearance and low-cost housing resulted in a total of 12,400 new units, in a city which has an actual shortage of 264,500 units, not including the need to replace 861,110 units in condemned and substandard dwellings.

The real estate interests will not build low-cost housing but they will use the provisions of the bill to continue their raids on the public treasury. They will unquestionably accept the half billion dollar Federal appropriation to be matched

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