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We have insisted all along that we ought to give material aid

to Europe in the form of machinery, food and clothing, and seeds. We believe that, in addition to giving Europe material aid, we have to give them moral and spiritual aid by proving in a practical way that we can make democracy work; that democracy does then have the moral strength and practical know-how to meet these practical problems, because you can't sell democracy by pious slogans.

These fellows won't buy slogans. They keep saying, “If you can deal with these problems in a tangible, down-to-earth practical way, that is the way to sell democracy; that is the way to make people really believe that democracy can meet and solve these basic problems.”

Certainly, the housing problem is one of the most glaring examples of the serious lag between what democracy promises on the one hand and what it practices on the other.

Here is a chance to close that gap by making it possible for millions of Americans to begin to get decent housing at a cost that they can afford.

Also, I think that here is a good chance to show that we know how to carry the fight for democracy on a positive basis. Take the question of juvenile delinquency. I say the greatest contribution that can be made is to try to give our children decent homes to grow up in. If they don't have decent homes to live in and wholesome recreational facilities, you can't expect them to grow up strong, physically, and intellectually and spiritually into useful citizens.

Certainly, that is the prime need in trying to give the children the kind of environment in which they can grow into good citizens. Here again, you find we put the emphasis on the negative aspects of the problem instead of on the positive. If a child gets into trouble because he lacks decent housing, decent, wholesome recreational facilities, and an opportunity for healthy expression, we are always willing to build new jails to put him in. I say if we could get the emphasis on the positive, on the up-beat, by building fewer and fewer houses of correction and building more and more correct houses, we could get that shifting of emphasis. I believe that we can make real progress on these basic problems.

Now, there have been people who appeared here who have opposed these bills. I noticed in the New York Times on January 14 that a Mr. Horace Russell, general counsel for the United States Savings and Loan League, appeared before the Senate committee in opposition to the bill, and the headline here in the New York Times says: "Housing plan seen as pure socialism; realty and private lenders hit building projects for middle-income groups." Then it says that the witness was Horace Russell, who said that the bill was not only pure socialism to the extent of $200,000,000 but was designed and intended to mislead the American public.

Here is another headline from the Washington Post of January 14: "Witness assails housing bill as socialism.” If there is any misrepresentation going on, it is Mr. Russell who is guilty of that misrepresentation, and not the bill before your committee.

The record shows that Mr. Russell is inconsistent in his attitude about the question of Government's making funds available for this type of housing construction.

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I have a copy of the hearings before the Committee on Veterans' Affairs, House of Representatives, on April 29, 1948. Mr. Russell was the only witness that appeared before that committee in support of a bill. He did such a good job of selling this bill that the committee didn't need any further witnesses. They reported it by unanimous vote. This was bill H. R. 4488.

This bill made available $5,000,000,000 of Government money to build homes on the basis of 40 years of amortization, at a rate of interest of approximately 214 percent.

When Mr. Russell appeared before the committee in support of this bill, a bill calling for direct Government money, to the extent of $5,000,000,000, he was asked a question by Mr. Allen of Louisiana. I want to quote from page 255 of the proceedings of that hearing. Mr. Allen said:

I just want to ask the committee to indulge me for one or two questions. I will preface it by saying this: What we want is to get a sound, constructive program to provide housing for veterans and one which will not be socialistic or communistic or anything of that sort. We want it sound and predicated on a good business foundation. Now, will this bill do that?

Now, Mr. Russell was for the spending of $5,000,000,000 of Government funds directly from the Treasury under this arrangement, but he opposed the spending of money that the Maybank amendment makes available, less money, on a different basis, not because he is opposed to utilization of Government money; he is opposed only to the utilization of Government money on a true cooperative basis, because that will give people, give American citizens, a right to build their own homes, and not permit the speculators to milk those who need decent housing in America.

Under this bill, if you could get a group of veterans together, you could get funds to go ahead with the building of houses. I think that the key distinction that indicates Mr. Russell's change in attitude is that under the bill that he supported, under H. R. 4488, you did not have to get a certification of the group that applied for a loan. In other words, any speculator could have gotten together four or five veterans and used them as a front to get funds out of this $5,000,000,000 of Government money to have gone ahead with the housing projects, in which the veterans would be window dressing. Behind the veterans would be the speculators operating at the expense of the veterans who needed the houses. Under the bill before you, the group has to get a certification that those asking for money are a bona fide cooperative group before it can get access to the funds. It is that difference that makes Mr. Russell support direct Government

oppose the bill where there is access to a limited amount of money.

This legislation would make it possible for millions of American families to get decent housing on the kind of basis that we think is an American approach to this problem. We want to encourage home ownership. We think that is one of the things that makes America strong. The more people we can get owning their homes, the better. We think this cooperative approach will make that possible; will facilitate people who now do not have decent housing to get it on the basis of their owning the house.

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I would like to read into the record Mr. Russell's answer about why he was pushing this other bill. On page 256, he says before the House committee:

If you pass this bill, I don't believe the Taft-Ellender-Wagner bill will pass the House.

Mr. Russell and the other people who have raised the question of socialism are obviously trying to wage an ideological battle just to throw up smoke screens and confuse the issues to try to block decent housing. We have done some research work to find out where this idea of cooperative housing started in America. Was it brought over in a black bag from Moscow? Where did it get started? The earliest that we can find out of a cooperative housing project was the housing project started in New York by the Rockefeller Institution. The Rockefeller Institution has been charged with many things, but they have never been charged with being advocates of socialism.

Here is a book, The New Day in Housing, written by Lewis H. Pink, with an introduction by Alfred E. Smith.

I am just wondering: Now that Al Smith is dead, is he a Socialist, too?

This is the kind of tripe that they peddle to block progress, insofar as housing is concerned in America.

Mr. BUCHANAN. What was the copyright year of that book, Mr. Green?

Mr. GREEN. I am skipping a couple of paragraphs because I have referred to the book, gentlemen.

Mr. GOODMAN. 1928. You might be interested in looking at it.
Mr. BUCHANAN. Thank you.
I was just interested in getting that in the record.

Mr. GREEN. These people are sponsoring this cooperative housing project. Anybody who attempts to say that these fellows are advocating socialism in America is either insane or is just downright dishonest. Obviously, the cooperative idea is not a socialistic approach to housing. The cooperative idea is a sound American principle by which people get together to help one another try to make progress in the world.

The cooperative idea that is being challenged as a socialistic concept toward housing is as much a part of this approach, using private funds, as it would be in this case. In this case, what you are doing is merely facilitating the getting together of individual famly groups so that they can build housing; you are merely facilitating their building of cooperative housing, you are making Government funds available to them to give them the start they can't get without those funds.

CIO has had substantial experience with the development of housing cooperatives. My own union, the shipbuilding workers, have sponsored a number of mutual projects early in the war. Our Camden project has now been in operation since 1941—a mutual housing project under the provisions of the Lanham Act.

The UAW, along with other groups, are about to go into construction, with a project in Detroit, Mich. The United Rubber Workers, in conjunction with the Veterans of Foreign Wars, have completed 315 homes in Misha waka, Ind. The Textile Workers Union built 100 homes for additional workers needed due to plant expansion, in Front Royal, Va. Throughout the United States, groups of workers have

made efforts to solve their housing problems through the cooperative technique.

We earnestly urge this committee to report favorably on the proposals contained in H. R. 6618. We hope that you will provide the kind of effective administration so that this program, like the REA, will solve the problem left to it.

Gentlemen, I thank you for the opportunity of appearing here before you and wish you every success in bringing this bill to passage.

The CHAIRMAN. Any questions?

Mr. COLE. The CIO, of course, is interested to know how many hours a week it requires a man to work to pay a monthly payment on his house. That is true, is it not?

Mr. GREEN. I should say so.

Mr. COLE. Just for the purpose of my question, let us assume that it requires an individual 30 hours a week labor to make a monthly payment on a house. Your organization would be interested, of course, in whether or not any legislation might require him to work 45 hours a week to make the same payment or provide the same house.

Mr. GREEN. Insofar as a trade-union is concerned, they are concerned with the working conditions of its members, the living conditions of its members, education and recreational facilities for its members, and the children, and the less hours we can get them to work is a program that all labor stands for so that they may get more recreational benefits.

Mr. COLE. My question is not directed at that. My question is directed at whether or not you do take into consideration the possibility of legislation requiring the working man to work more hours to obtain the same commodity. In other words, I am talking about the effect of legislation upon money, the possible inflationary trend.

Mr. GREEN. Mr. Goodman will answer that question.

Mr. GOODMAN. I think the problem the Congressman raises relates to whether or not this legislation is inflationary.

Mr. COLE. Yes.

Mr. GOODMAN. And in our judgment it is not. It is much less inflationary than current construction program which, according to Architectural Forum, for the current month, the 608 program under which most of the industry is now operating is one of continuous inflation.

We believe that the cooperative housing program will set instead a yardstick of measurement as to what can be achieved if one takes out those incentives for inflating the cost which exist in the present 608 program.

Mr. COLE. I have used this illustration. Let us assume that we gave each person in the middle-income class a ten-thousand-dollar bill with which to build a house. That would be inflationary in your opinion, would it not? We would drive down the value or the purchasing power of that ten-thousand dollar bill, would we not?

Mr. GOODMAN. That is an "iffey" question, and I agree if every person in the United States were given a ten-thousand-dollar bill, the ten-thousand dollar bill would not have any value, but that does not relate to the proposal before this committee.

Mr. COLE. I will bring that out. I am not sure whether it does, but I am trying to find out. If we give each member of the middle-income

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group a percentage of the $10,000—not $10,000 but a percentage of the $10,000 as relating to the total-it would thus create an inflationary trend, would it not?

Mr. GOODMAN. Yes.

Mr. COLE. And if the Government then provides through a lesser interest rate, are we not placing a lower price on the cost of money?

Mr. GOODMAN. Not necessarily. I would like to call your attention to the testimony of Lewis H. Douglas, president of the Mutual Life Insurance Co. of New York, on that point.

When he appeared before the Senate Committee on December 17, 1945, of course, he was interested in getting a higher interest rate for the further well-being of the insurance companies.

Mr. COLE. And the insured people; isn't that right?

Mr. GOODMAN. Possibly, however, he pointed out and substantial evidence before this committee has pointed out that the present net return to the insurance companies out of their mortgage holdings are approximately 3 percent.

There is no difference between the 3 percent return which the companies now get on a net basis and the average that would be accrued to the investment corporations that buy the debentures of the National Mortgage Corporation for Housing Cooperatives. The only difference there and the reason there is a lower rate is that the service costs, which are now quite substantial, would be reduced and a part of them would be removed by the adoption of this new scheme. There is nothing inflationary in cutting costs by more efficient production.

Mr. COLE. Mr. Goodman, you and I are talking about two different things. You are talking about the cutting of production costs.

I am talking about the Government providing a lower interest rate

Mr. GOODMAN. I disagree with you, sir.
Mr. COLE. Than is current in the market.

Mr. GOODMAN. No; you get the lower interest rate by more efficient operation and by the adoption of the cooperative technique, sir; and it is not the Government giving anything except the formation of this National Mortgage Corporation, which provides the lower interest rate.

Mr. COLE. If it is not the Government forcing the interest rate down, we don't require this bill. All we need to do is to set up machinery whereby we would assist cooperatives and allow the interest. rate to find its level in the open markets.

Mr. GOODMAN. That is right, and this bill provides the technique for doing that.

Mr. COLE. You think so?

Mr. GOODMAN. Yes, sir. I would like to point out to the Congressman, while he raises the question, an interesting article in the current issue of Business Week, regarding the problems in Wichita, Kans., which the Congressman represents. This article, on page 82, entitled, “Wichita Lives Off Its Prairies,” points up the desire and necessity of expanding production in their industry is almost dependent on production of more housing for the workers of the industry trying to locate or expand in the city of Wichita.

Mr. COLE. I will agree with that.

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