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Mr. GREEN. That is right.

The CHAIRMAN. And that the investor would rather have an unsecured loan that he would deem safe at 5 percent rather than an insured loan at 4 percent; don't you find that that is true?

Mr. GREEN. That is indisputable.

The CHAIRMAN. Can you conceive of any other method by which a low interest rate can be secured except by direct Government help?

Mr. GREEN. A guaranteed loan at a reasonable rate of interest, say, like 3 percent, would create a better state of mind than a loan at a higher rate of interest that isn't secured. If it isn't secured, you don't know whether it is going to be paid or not, so that the guarantee that the loan would be paid would create a good state of mind, would create a fine psychology.

The CHAIRMAN. Do your members complain generally now that they not only can't find sufficient housing, but the housing they find is generally inadequate to family life, such as you mentioned in the District of Columbia ?

Mr. GREEN. We find it is generally inadequate, yes, and as I have pointed out, some of the new small homes that are being built won't afford even the right kind of temporary relief and service. They are too small, inadequate and all of that for a family to live in.

The CHAIRMAN. Your organization is deeply interested in the housing situation because of the great effect it has on your members and their contentment and their happiness; isn't that true?

Mr. GREEN. Yes, sir.
Mr. BUCHANAN. Mr. Chairman.
The CHAIRMAN. Mr. Buchanan.

Mr. BUCHANAN. Mr. Green, the statement has been made here by various witnesses before the committee that if this cooperative housing bill were to be enacted into legislation, it might act as a deterrent to the housing industry in 1950. We are now enjoying more starts at this early date than we did last year, and the total number in 1949 exceeded 1,000,000 starts.

Do you believe that if this program were enacted, that it would act as a deterrent to the building-trades industry because of a cut-back in the number of starts in the next several months?

Mr. GREEN. I don't think, myself, that it would act as a deterrent in any way or shape to the general national building-construction program. That will go on, in my judgment, under private arrange.

, ment just the same. I feel sure it will.

The CHAIRMAN. All the building trades and industries are members of the American Federation of Labor; are they not?

Mr. GREEN. Yes; that is right.

The CHAIRMAN. And you are vitally interested in their welfare and their activities in the future?

Mr. GREEN. Yes. Mr. Henle will follow me, and he has some figures on that which will be of help to you, I think, and very interesting. The building-construction trades workers of the Nation are part of our great organized labor movement; that is, the Federation of Labor, and I know I am speaking for them this morning in what I have said to you.

The CHAIRMAN. Mr. O'Hara.

Mr. O'HARA. Mr. Green, I have been profoundly impressed by your presence here today and your testimony, and especially your answers

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you be entitled to the low rate of interest, have the Government guarantee it? That class of people needs homes just as much as anyone else.

Mr. GREEN. Well, under ordinary circumstances, when conditions are ordinary, and people build their homes, we wouldn't be enacting legislation. However, we have a war condition still with us, a shortage of homes, because we were not able to build during the war, and there is a difference between the two situations that you must take into account.

Mr. KILBURN. Maybe I am not very intelligent, but I can't see any difference. Of course, you said that we need homes. I agree with you, but we have been building homes faster than any other country has erer built them before in the history of the world in the last 2 or 3 years already.

I don't see why, if this is good, why the Government should not take over every real-estate mortgage in the country and give them a low rate of interest, give them a long amortization. I don't see any reason why they shouldn't do that if they are going to do it for this one class.

Mr. GREEN. Oh, no; we don't want it to go to extremes. That is going to extremes. There is no thought of us going that far. We are dealing with an extraordinary situation, a situation caused by the war that we must meet and we ought to meet in a constructive way.

Mr. KILBURN. I have no further questions. Mr. DEANE. Mr. Chairman, I have a question. The CHAIRMAN. Mr. Deane. Mr. DEANE., Have you given attention to the position taken by all of those organizations and people who have continually opposed all types of housing programs? Do you have any opinion about these folks, why they take this position?

Mr. GREEN. I can't understand it myself. It is really difficult to understand it. Some of those, at least, who are opposed to housing legislation of this kind are strong anti-Communists, and yet they charge this with being socialistic in nature and don't seem to take into account that the thing that is needed to preserve democracy and liberty and freedom in America and prevent the spread of communism is to make people happy by supplying them, by making it possible for them to have decent homes in America.

I can't reconcile that attitude at all.

Mr. DEANE. Isn't it true that the cooperative movement in America has grown gradually and is a sound program wherever it exists today?

Mr. GREEN. That is the cooperatives?
Mr. DEANE. Yes.
Mr. GREEN. Yes, sir; that is my opinion.

Mr. DEANE. You indicated in your statement that the greater number of cooperatives were in the rural areas.

Mr. GREEN. Yes.

Mr. DEANE. Has your organization made a study of how this particular cooperative housing would affect or be received in the smaller rural or urban areas?

Mr. GREEN. We base our opinion upon the successful service which the cooperatives have rendered. Experience is a good teacher. We learn our best lessons there and surely the cooperatives have rendered a wonderful service among the farmers of the Nation. What better

age to

Mr. O'HARA. That has been the spirit that has characterized the American Federation of Labor and certainly has glorified your name because of your leadership in that spirit of cooperation.

Mr. GREEN. Yes, that is right.

Mr. O'HARA. As I understand it, then, you are speaking in the best interest of labor and the best interest of management, as you view it, in advocating our approval of this bill as promising the only way known to you of bringing within the means of those in the middleincome group, housing, decent housing, and with large enough rooms, houses where there is room for children and the facilities for bringing up families in a wholesome home atmosphere? Mr. GREEN. That is right. Mr. O'HARA. Thank you, Mr. Green. The CHAIRMAN. Any further questions?

Mr. KILBURN. Mr. Chairman, I would like to ask Mr. Green a question.

The CHAIRMAN. Mr. Kilburn.

Mr. KILBURN. Of course, everybody wants to own their own home and have a good home. Do you think that if a young man of 25 or 30 buys a home and has a 50-year mortgage on it, do you think he is buying a home or just renting?

Mr. GREEN. Of course, the term of the mortgage might have a good psychological effect and that would be a 50-year mortgage, and I think it would encourage a young man 25 or 30 years

of

go

ahead and get a home for himself.

Mr. KILBURN. If he is 30 years old, for instance, he would not own his home until he was 80.

Mr. GREEN. Yes. Mr. KILBURN. I don't call that buying his home. Mr. GREEN. you know there is nothing to stop a man from paying off a mortgage even before it is due, if he wants to. He can always do that.

Mr. KILBURN. I think when we put 50 years in there, we are just kidding ourselves and the people that are buying them, because if anybody does plan to buy their home and take 50 years, they are going to have their grandchildren supporting them before they own their own home.

One other question, Mr. Green: If this is a good scheme to have the Government put up the money and guarantee the bonds and then loan it at 3 percent on this type of a mortgage, why isn't it a good plan then to have the Government do the same with every real-estate mortgage in the country?

Mr. GREEN. You, see, this is a special program designed to provide homes for thousands or-yes, millions of people who are needing homes at the present time because of the shortage of homes.

You have to make some special plan to meet that special situation and that is what this is designed to be. Understand, the Government isn't financing it. All it is doing is to guarantee the bonds. The bonds are guaranteed really by the house; it is the property itself.

Mr. KILBURN. It is contingent liability of the Government.

Mr. GREEN. In that respect only, but there is no danger of the Government being involved.

Mr. KILBURN. If it is a good thing for this, then why shouldn't you as an individual, if you want to buy a home, buy a house, why shouldn't

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you be entitled to the low rate of interest, have the Government guarantee it? That class of people needs homes just as much as anyone else.

Mr. GREEN. Well, under ordinary circumstances, when conditions are ordinary, and people build their homes, we wouldn't be enacting legislation. However, we have a war condition still with us, a shortage of homes, because we were not able to build during the war, and there is a difference between the two situations that you must take into account.

Mr. KILBURN. Maybe I am not very intelligent, but I can't see any difference. Of course, you said that we need homes. I agree with you, but we have been building homes faster than any other country has ever built them before in the history of the world in the last 2 or 3 years already.

I don't see why, if this is good, why the Government should not take over every real-estate mortgage in the country and give them a low rate of interest, give them a long amortization. I don't see any reason why they shouldn't do that if they are going to do it for this one class.

Mr. GREEN. Oh, no; we don't want it to go to extremes. That is going to extremes. There is no thought of us going that far. We are dealing with an extraordinary situation, a situation caused by the war that we must meet and we ought to meet in a constructive way.

Mr. KILBURN. I have no further questions.
Mr. DEANE. Mr. Chairman, I have a question.
The CHAIRMAN. Mr. Deane.

Mr. DEANE., Have you given attention to the position taken by all of those organizations and people who have continually opposed all types of housing programs? Do you have any opinion about these folks, why they take this position?

Mr. GREEN. I can't understand it myself. It is really difficult to understand it. Some of those, at least, who are opposed to housing legislation of this kind are strong anti-Communists, and yet they charge this with being socialistic in nature and don't seem to take into account that the thing that is needed to preserve democracy and liberty and freedom in America and prevent the spread of communism is to make people happy by supplying them, by making it possible for them to have decent homes in America.

I can't reconcile that attitude at all.

Mr. DEANE. Isn't it true that the cooperative movement in America has grown gradually and is a sound program wherever it exists today?

Mr. GREEN. That is the cooperatives?
Mr. DEANE. Yes.
Mr. GREEN. Yes, sir; that is my opinion.

Mr. DEANE. You indicated in your statement that the greater number of cooperatives were in the rural areas.

Mr. GREEN. Yes.

Mr. DEANE. Has your organization made a study of how this particular cooperative housing would affect or be received in the smaller rural or urban areas?

Mr. GREEN. We base our opinion upon the successful service which the cooperatives have rendered. Experience is a good teacher. We learn our best lessons there and surely the cooperatives have rendered a wonderful service among the farmers of the Nation. What better

plan can we have than this? If they have rendered good service there, isn't it reasonable to conclude that they will render equally good service in the promotion of this housing program?

Mr. DEANE. Do you see in this type of cooperative approach a movement toward cooperative or collective thinking of our people which would involve many ramifications in our economy?

Mr. GREEN. It might work that way, but that isn't the purpose of it. It is to utilize the plan that seems the most practical, feasible, and satisfactory, and that is the cooperative organization.

Mr. DEANE. I did not have the opportunity to hear all of your testimony, but what is the position of your organization concerning whether or not you would advocate now or in the future tax exemptions unless certain municipalities or certain States grant it! Are you advocating that in any way, any type of tax exemption!

Mr. GREEN. We haven't been thinking much along that line as yet. Mr. DEANE. That is all, Mr. Chairman. The CHAIRMAN. Any further questions? (No response.) The CHAIRMAN. If there are no further questions, Mr. Green, I wish to say that we are glad to have had your views and that of the great organization for which you speak.

Mr. GREEN. Thank you, sir, and I am so glad to present them.

Mr. Chairman, Mr. Henle has some little detailed information on some matters that have been referred to in the question period that I think will be helpful and I will be very glad if you will have him submit them.

The CHAIRMAN. Mr. Henle.

STATEMENT OF PETER HENLE, SECRETARY, AMERICAN FEDERA

TION OF LABOR HOUSING COMMITTEE

Mr. HENLE. I appreciate this opportunity to discuss with you some of the technical questions raised by H. R. 6618.

Financial provisions: It is contemplated that under this bill housing cooperatives will obtain loans from the National Mortgage Corporation for housing cooperatives at an interest rate of approximately 3 percent, and for an amortization period of up to 50 years.

The prospect of 3 percent, 50-year loans has led to cries of “subsidy” and “discrimination,” serious charges if they can be proved.

In considering this problem, it is important to review the bill's history. Last year, many Congressmen introduced measures providing for loans that would be made directly from the Federal Government to housing cooperatives. The American Federation of Labor endorsed those measures and we still believe that this would be an effective program. However, because of the objections that were raised to the idea of direct loans by the Federal Government, it was agreed that the entire problem of financing cooperative housing would be completely reviewed.

The provisions in the present bill are the result of this study and review. Instead of direct loans from the Federal Government, a new mortgage corporation, jointly owned by the Government and the housing cooperatives, will be established. This corporation will obtain its funds by issuing Government-guaranteed debentures for the invest

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