qualified to pass on the type of material, but I have had many questions about it. I wouldn't say that they are family houses at all at about $8,000 or less. It doesn't vary much, in my experience, from the big cities to the small cities. I found some in Los Angeles, for instance, around $7,700 and $7,800, but when you get up to the threebedroom units you get to $10,000 or a little over. That has been my observation. I get that same picture in Chicago; I get it in Milwaukee and Detroit, just exactly the same picture, almost identical picture. There is not much variation.

They claim that the cost is lower in Los Angeles, but maybe it is somewhat lower, but the fact of the matter that in Los Angeles you cannot get a house that is suited to family living for less than $10,000, and they would stand on that statement, you see.

I know I could get into a lot of debate with them out there, with some of them who happen to be good friends of mine, and they probably would provide an array of facts which would show that they were building a considerable number less than $8,000, but I think I would find they were two-bedroom units. That is one of the things that I can't understand why it is with the money, because one of the things I would like to know more of, and this is a thing that the research program ought to bring out, and that is what the actual process is at the present time, how much of a risk they are taking, how much of risk capital they have in housing at the present time, I don't know.

I hear all sorts of contradictory statements, such as what happens to the value of a lot after they decide to build, how much of a real investment do they have under those two or three single standing houses, how much of an investment, how much of a risk is this man taking? I just don't know. I hear all sorts of rumors and I hear all sorts of statements about it. I would say that I would stand on my original proposition that I haven't seen much-and I wanted to be generous in saying, in supporting Mr. Foley's statement, that the best I could claim was that they were providing for a part of the market.

Mr. DEANE. Most of the witnesses testifying in support of this legislation, have advocated a separate person to head up the corporative feature. I believe the Senate subcommittee amended the bill to that extent. What is your opinion?

Monsignor O'GRADY. My opinion is this: I have been hoping that we might be able to get a different type of person in this field from those I see around this town, who could be possibly a person who would have to accept this job at a great sacrifice and who would be willing to lend his leadership to it until we could get the thing going. What I hope is that we can get vitality enough before these bureaucracies become of age and get too tough and unbending. I was hoping that we might be able to retain life enough for a number of years so that this movement would stand on its own and it wouldn't hang on to government any more, but I was hoping that we might be able to get that type of person.

I feel that in order to get such type of a person who would have to accept this position at great sacrifice-not only that but the kind of staff that I envisage is different from what I see in these ordinary housing agencies, and I was hoping, for that reason, that we might have an agency that would have its own autonomy and could go out and enlist the support of the various religous groups throughout the country.

Therefore, I feel that it would be necessary, because it is such a new function of government, and an experimental function. I hope it will succeed. That is, we have to try it. That is the reason why I lean toward the idea that it ought to have some independence. In other words, this man ought to have a dignified position, who takes the leadership in this movement, and it ought not to be too closely tied up with the existing group, so that it won't be tied up with too many rules and regulations in the beginning and so that it will be able to operate. That is the way I figure this out.

Mr. DEANE. Along with this legislation is the discontinuance of 608. Do you share that view?

Monsignor O'GRADY. Yes. On the whole, I think that that has served its purpose. There are some things about 608 that I have never understood, and I suppose I will never be able to understand them, because I have seen the prices of these apartments. You know, we have had all of this question about public housing going to middle-income groups, but I have a question about FHA going into these very high income groups.

I pointed out whether FHA was a former subsidy, too. Suppose we find from a careful study that we have no risk capital in the housing field at the present time, in the field that is covered by FHA mortgages. Maybe we ought to confine it to a certain area, just like this housing, this cooperative housing. I assume that this will be confined to a certain income area.

It hasn't been spelled into the bill, but I think we, all of us who have worked on it, understand that this is going to be confined to a certain income area that is designed to take care of it. Of course, to keep a national group and not one in the public housing, you would have to have a group; maybe we could admit a small limited group of people who would be above, somewhat above the middle-income bracket. I think that that is the way that I picture this situation.

Mr. DEANE. Thank you.

The CHAIRMAN. If there are no further questions, you may stand aside, Monsignor O'Grady. We are glad to have your views.

Our colleague from New York, Mr. Javits, would like to make a statement on H. R. 6618.

STATEMENT OF REPRESENTATIVE JACOB K. JAVITS, OF NEW YORK

Mr. JAVITS. Mr. Chairman, and members of the committee, H. R. 6618, the Cooperative Housing Act, now under consideration by this committee, treats with the fundamental proposition that the lowermiddle-income groups should have direct Federal aid in order that they may attain housing parity with the lower-income groups, which benefit from public housing, and the higher-income groups, which benefit from FHA-financed housing. This concept of a Government responsibility to the lower-middle-income groups who earn too much for public housing and too little for the lowest-cost new private rental housing, was pioneered by the omnibus housing bill introduced by 10 Republican Members of the House on January 27, 1949, which provided that $3,000,000,000 in direct Government loans be authorized to be made for housing construction under limited rents to limited dividend corporations and redevelopment companies, nonprofit corporations, mutual housing associations, and cooperatives. This same group

endeavored to introduce the direct-loan proposal into the housing bill which the House approved in August of last year, and has constantly urged this measure of equity for these lower-middle-income families.. It is logical that the minority opposition, who too entertain liberal views on the housing issue, should call attention to the fact that in order not to make the housing bill class legislation, it is necessary to have a balanced program to equalize what has already been accomplished in the public-housing field.

The families we are now dealing with by this measure are the very framework upon which what we call the American way rests. These some 15,500,000 families in the $2,000 to $4,000 per annum income bracket constitute about 40 percent of all families in our country.

First, I should like to make clear that I do not regard as fundamentally different from the approach of the minority opposition abovementioned that which is created by section 201 of the present bill (H. R. 6618), the National Mortgage Corporation for Housing Cooperatives. Our bill called for a housing-loan administrator, as fundamental in principle and purpose, and I feel certain that we can definitely go along with this kind of approach. However, there is some feeling-which I feel has some justice that it might be better to have an equality of status as between whomever heads this particular effort and the general FHA program on the theory that there might be some element of competition between them, or that this project might not have its full opportunity if compled with an FHA administration.

Concerning the present measure, there are several suggestions which I should like to submit for your consideration:

(1) To increase by $1,000,000,000 the amount of mortgage loans which may be placed by the National Mortgage Corporation for Housing Cooperatives to $3,000,000,000, and to consider establishment of a number of units to be financed-say 360,000—rather than fixing a monetary ceiling. By this means we would set a goal of the number of units we are striving for as was done in the public housing bill.

(2) To provide for a review of the internal organization and management of cooperatives or other borrowers to (a) insure that their procedures and administration will be equitable and democratic, (b) to avoid excessive costs and charges in administration, and (c) to give recourse to individual members or participants in such cooperatives in the event of unfair or discriminatory treatment. In our absorption in the struggle for democracy abroad, we cannot overlook encouraging the democratic tradition in our institutions here.

(3) To broaden the base for eligible borrowers to include limited divided corporations and redevelopment companies who can meet the tests set up in section 204 (a) (2) (A) with respect to the rentals to be charged.

In connection with this third point it is interesting to note that under the laws of New York State limited-dividend corporations and redevelopment companies are expressly entitled to special tax concessions and under the proper conditions to the exercise of the right of eminent domain for the purpose of establishing housing projects for moderate-income families. The additional aid of low-interest, long-term mortgage money contemplated by this bill should further the oppor

tunities for middle-income families already afforded by States like New York. The bill would then build on what we have as well as on new foundations.

Further concerning my third point, the definition of borrower in section 303 (a) would not be specific enough, perhaps, to include a limited-dividend or redevelopment company, because the implication is that this is to be strictly nonprofit, and though their rents are controlled, they have tax indulgence, they have the right of eminent domain, and they are entitled to limited-dividend return which would be fixed by State law. It would be possible to provide that the Federal Administration should be entitled to determine whether in the case of such a company it complies with the fundamental purpose of the law; i. e., that its limited dividends are not inordinate, that cooperatives are not filling the need, and so forth.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you.

We will now hear from Congressman Roosevelt of New York.

STATEMENT OF HON. FRANKLIN D. ROOSEVELT, OF NEW YORK

Mr. ROOSEVELT. Mr. Chairman, I should like to pass on to the Committee on Banking and Currency a few of the reasons that seem to me to make H. R. 6618 eminently desirable legislation, not only in the interest of the quarter-of-a-million families who may benefit, but of the whole national community. It would be presumptuous of me to burden the committee's record with any discussion of the detailed provisions of the bill; competent technicians have elaborated on them at length.

But for some 5 years now, I have taken an active, personal interest in the housing problems of veterans, and I think I can fairly state what is in the minds of many of them with respect to this proposal. As cochairman of the National Veterans Housing Conference, I talked to hundreds of veterans from dozens of communities about their housing troubles. It will be no news to this committee that the quest for a decent home at a reasonable price has been, and is, probably the number one concern of the average veteran who is married, or plans to be. I am sure that the members of this committee have had the same kind of mail from veterans that I have had-pathetic, moving letters asking for help in finding a place to live. These men do not want hand-outs. They do ask us to remove unnecesary and indefensible road blocks to sound housing, so that they may make their own way on their own feet.

The veterans about whom I am speaking are, of course, part of the great bulk of middle-class Americans who earn between $2,400 and $3,900 in the smaller communities, and between $2,800 and $4,400 a year in the big cities. Their families will not be taken care of in the public housing program which we enacted in the last session, nor in any of the subsidized programs of the States and municipalities. These people do not want subsidies anyway; they have no desire to add to the taxes of their neighbors for their own housing benefit. Yet at the present time, these people cannot afford the modest homes that are being sold in many places for luxury prices. Many of them, more

over, want to have larger families than the mortgage loan and building industries seem to be planning for them. They can afford to support more than one or two children-if they can only find a way to house their families decently. Finally, like most Americans, they want to own their homes, to provide their families with the stable surroundings that are necesary for healthful family life.

I gather from the testimony submitted to the committee that there is common agreement that 8,000,000 families are in this middle-income group. At most, provision is made in this bill for helping 1 family in 32 to help itself. Yet it will be tremendously important in helping to relieve the distress of the whole group. It will do that by blazing a new, yet a very old, trail in the American search for decent homes. The success of this program of cooperative housing would result in the elaboration of a new, community approach to the construction and maintenance of good, low-cost housing that only a few, farsighted private builders have achieved. Successful cooperatives will create neighborhoods in which additional housing of the same sort perhaps financed by cautious private sources-will flourish.

This proposal for Federal Government follows, as I have said, an old American trail. It is motivated by the very same spirit that brought the Homestead Act into being almost 90 years ago and that, more recently, produced the Rural Electrification Act. There were also instances where the Federal Government specifically planned the end of its own participation in a program which it had to enter as a spark plug. I cannot believe that anyone could seriously question the philosophy that motivates this bill. It is in keeping with the best traditions of democracy in action. As with REA, the Federal funds involved here are not subsidies nor are they grants or gifts. When they have done their job of releasing additional creative energy in the home-building field, they will be replaced by private funds. As with REA, they will help, not hinder, private enterprise. Just as vast consumer markets are opened by the electrification of farms, so equally vast markets will be opened in every home-furnishing field.

Nor is there anything new in the use of cooperatives for housing purposes. There are veterans' cooperatives in Los Angeles, Detroit, Philadelphia, and many other cities. In my own city, cooperative housing has helped two distinct income levels. In the low- and middleincome fields, trade-unions like the Amalgamated Clothing Workers of America, CIO, and Local 3 of the International Brotherhood of Electrical Workers, AFL, have done a superb job of pioneering in the interest of their own members. And in the high-income field there are an increasing number of cooperatively owned luxury dwellings along the most expensive streets in New York. Certainly, if this kind of venture has helped Park Avenue, it ought to be tried for a hundred Main Streets across the country.

In conclusion, Mr. Chairman, I should like to offer my congratulations to you for having sponsored this legislation. It is imaginative application of a sound guide for action-be warm-hearted in choosing objectives, and hard-headed in achieving them. Since this bill will help to build homes for the great middle-income group, it is warmhearted in its objective. But it is demonstrably hard-headed in its practical design for helping the people in this group to help themselves. Thank you, Mr. Chairman.