on a mortgage that will rarely run more than 60 percent to 70 percent. Mr. MCKINNON. You will not get FHA financing for the man who is building the job himself. You cannot do it that way.

Mr. MULTER. But I think mostly it is a man who buys up many acres, erects one-family homes or multifamily dwellings and then resells the homes to the proposed occupants. This bill will eliminate that profit that can be obtained from the time the building is completed and it is resold to the proposed occupant. Here the proposed occupant is the owner from the beginning, whether it be multifamily or single family dwellings. They eliminate that profit. By eliminating that, we have been able to get the charges down to these figures set up by Mr. Foley for us.

Mr. MCKINNON. Of course, I think you have a pretty hard time drawing just generalities on this type of thing, because I can point to instances where there have been developments where the speculator, if you want to call him that, has taken less than 10 percent out of the actual cost that it took to develop that project. On a $7,000 home or a $6,000 or $8,000 home it will be somewhat under $1,000. Sometimes that $1,000 or $800 or 10 percent cost, whatever it may be, will be represented by some type of management cost in a cooperative, too. I think there are a lot of chances for savings in cooperative construction, but I would like to get some specific examples of where that saving is being made to see what we can do toward projecting it over into the individual construction.

Mr. MULTER. What saving, if any, would be obtained in the cost of erection is a matter that I am afraid we will be able to determine only after the experiment has been rolling for awhile.

Mr. MCKINNON. I am afraid that a lot of the cost of savings in this cooperative construction is being attached to the actual difference in the way of financing. In other words, there is no savings but we are amortizing it over a 50-year or 60-year period. Actually a 60-year period is going to cost the home owner more money in interest than if he could pay it off in 20 or 30 years. However, the lower monthly payments allow a family to have a nice home on the 50- or 60-year period that it would not be able to have on the 20- or 30-year period.

I think the easier terms is a good thing in many respects. I only wish it could be extended more for the individual home purchases, instead of concentrated alone in the cooperative title. I think the individual is entitled to the same thing.

Mr. MULTER. My hope is that this experiment will encourage the private builders to pursue the same method. You remember up to the time of Home Owners' Loan Corporation your home financing was done on a basis of a term loan, the entire sum coming due at the end of the 3- or 5-year period. Private lenders, and I mean both bank and insurance companies and other lenders, would not consider lending to a home owner on an amortization basis. The Home Owners' Loan came along and taught them to spread it over a 15-year period and not lose anything by doing it. Here we are going to teach the industry that the mortgage can be spread over a 50-year period and still have a safe investment.

Mr. MCKINNON. I hope we can. One of the bright hopes is that we can open up the possibility for many more to own their own homes.

Therefore, I think Mr. Dinger's point that this be administered in sympathetic hands is a most important point.

Mr. MULTER. I agree.

Mr. PATMAN (acting chairman). Any other questions.

Mr. COLE. Mr. Chairman, the Republican side is a little bit interested.

Mr. PATMAN. I am sorry. I didn't know but what the Republican side had interrogated them first.

Mr. COLE. I don't have many questions, but I do have one or two. Mr. Dinger, returning back to your brochure, there from Baton Rouge, as I understand it, the savings of $1,000 a house is largely due to the method of acquisition of the land or the acquisition of the land?

Mr. DINGER. I do not have the figures as to just what made it possible, in detail, the savings of $1,000.

I think probably that the acquiistion of land had quite a bit to do with it because there would be no profit in the turn-over of land in this sort of-in a cooperative operation, such as there is in a speculative operation.

Mr. COLE. That, in that conection, I notice the statement in the brochure that through the cooperation of their Senators and Representatives they were able to acquire this land. Does that indicate that there was some political machinations in connection with it and that they acquired it at a less cost than the appraised value? Let's strike the word "machinations." Political implications?

Mr. DINGER. I think that probably what they mean is that through the assistance of their congressional representatives here in Washington they were able to probably expedite whatever negotiations or conversations that they had.

Mr. COLE. But at least they did acquire the land apparently quite cheaply and from the Government?

Mr. DINGER. From the War Assets Administration.

Mr. COLE. Yes. That would not be typical, of course, of other acquisitions of land?

Mr. DINGER. No; that would probably be exceptional.

Mr. COLE. Certainly not typical, therefore, before we make the statement that a proffered house may be purchased from the Baton Rouge Cooperative at $1,000 less than it may be purchased elsewhere, we should have some of the figures in connection with it, should we not?

Mr. DINGER. Yes. I explained in my answer to the previous question that I would be glad to contact Nicholson Post and try to obtain the exact figures, the break-down of that $1,000 saving. I pointed out that, in my opinion, a considerable percentage of it was as a result of land acquisition at a more reasonable value.

I think that also we have to recognize the potential saving which has been referred to by Mr. Foley of the difference in profit of land acquisition, the elimination of a speculative business. I think a cooperative would have the various builders in the locality probably bid for the work, and in that way bring down the actual speculative cost perhaps nearer to its actual value.

Mr. COLE. There have been a number of statements made and I was interested in the colloquy on the other side about the possible

prospective savings in construction of houses by cooperatives. I have been of the opinion that there were none and apparently the American Legion has not been able to develop any facts to substantiate it or apparently you have no real position on that question, have you? You have not made the statement that there was a savings in the construction under this method?

Mr. DINGER. Yes; we have made the statement that there is a savings. in construction. We don't mean that to apply to the individual builder. Mr. COLE. No.

Mr. DINGER. We mean that to apply to the speculative builder.

Mr. COLE. What I mean is, has the American Legion made the statement that by cooperative building a savings will be had in the construction of units; and if so, upon what do they base that statement? Mr. DINGER. On the actual construction a saving would be realized only insofar as the members of the cooperative devoted their own time, assisting the builder or contractor in the erection of the homes. That might take different forms, but that has been done in at least one project that just comes to my mind vaguely in the East here where a number of veterans formed a cooperative corporation, a housing cooperative, and all got together and started building on one house. As they completed that one they moved to another one. Obviously the expense to them in terms of their end product, which is monthly rental, is much less as a result of that effort, that cooperative effort. Mr. COLE. Other than the fact that the individual members of the cooperative assists in the construction, then there is no saving in the actual construction?

Mr. DINGER. We don't say that a builder is going to make any more or any less profit in the construction of a house under this cooperative title or housing unit. I think that that is the best way I can answer your question. We assume that the builder will get the same profit, reasonable profit from work that he does under contract with the cooperative as he would under any other contract.

Mr. COLE. That is all, Mr. Chairman.

Mr. PATMAN. Any other questions?

(No response.)

(The brochure referred to herein is as follows:)

HELPING THEM TO WHAT THEY FOUGHT FOR-A REAL AMERICAN HOME OF THEIR VERY OWN

HOW VETERANS PROVIDED HOMES FOR VETERANS

(Issued by Nicholson Post, No. 38, the American Legion, Baton Rouge, La.)

The American Legion Housing Corp. of Baton Rouge, La., was organized early in 1946 to provide homes needed by veterans. A prior survey indicated that of the approximate 12,000 veterans in East Baton Rouge Parish, one-third desired to build homes, but that by far the majority of these could not meet the market prices then prevailing.

The Mayor's Veteran's Emergency Housing Committee proposed to Nicholson Post, No. 38, of the American Legion that low-cost homes be provided through the use of a tract of land then belonging to the Federal Government, and that a corporation be organized for the sponsorship of such homes. A committee, consisting of the following Legionnaires, was appointed to execute this project: Richard C. Cadwallader, attorney, chairman; Lowell M. Roseman, realtor; and Jack P. F. Gremillion, attorney. These men were all veterans of World War II, and vitally concerned with the problem at hand. Mr. Cadwallader then was also 61731-50-8

national vice commander of the Legion as well as chairman of the Legion's national housing committee.

STEP BY STEP PROCEDURE-IN BRIEF

On September 20, 1946, this committee organized a business corporation, under the laws of Louisiana, known as The American Legion Housing Corp. Two thousand five hundred shares of stock, at $1 per share, were issued and acquired by Nicholson Post, No. 38, the local American Legion Post. Of the 15 members on the board of directors, 11 were veterans of World War II and 4 were veterans of World War I. The original committee continued as members of the board of directors, Mr. Cadwallader being elected to the presidency.

Although the American Legion Housing Corp was not organized as a cooperative housing project, it is operating along the same general lines in that it operates purely as a service to the veterans who acquire the homes. Such an organization can effect economies in the purchase and development of the site, in the efficient design of buildings, arranging the mass purchase of building materials, equipment of mass-produced houses, and financing and administering the property. Further economies accrue in that such projects do not reflect speculative price charges. Any funds remaining in the corporation treasury after the houses are completed, sold and all costs paid, will be prorated and applied against each of the 250 mortgages.

Parenthetically, the corporation has enjoyed the full backing of the chamber of commerce, labor, the real-estate board, the mayor and Commission Council of the city of Baton Rouge, the police jury and officials of East Baton Rouge Parish, as well as the utility companies and others who sincerely wished to assist in providing homes for the community's veterans.

Land

With the cooperation of Louisiana Senators and Representatives in Congress, the corporation bought a tract of land of about 160 acres lying 41⁄2 miles north of the city which had been purchased by the Defense Plant Corp. as a site for transient houses for defense workers. Subsequently the land had been transferred by WAA to the Federal Public Housing Administration for disposal. It was found necessary to have the corporation classified as a small-business corporation in order to have sufficient priority to enable the RFC to purchase the property on its behalf. After this was done the FPHA placed a valuation and sale price of $74,000 on the property.

With the acquisition of the property, the corporation sold off 33 residential lots; a site for a shopping center; the existing water wells, pipes, 11 barrack buildings, together with electrical transformers, wiring and poles. Through these sales, unexpected profits were made. These were used to reduce the cost of houses to the veteran purchasers.

Financing

Simultaneously with the land purchase a plan was laid to finance the property and construct 250 houses for GI's on a nonprofit basis. During this phase of the program the directors of the corporation were ably assisted by several wellinformed leaders in the fields of manufacturing, construction, and financing. Mr. W. Hamilton Crawford, president of the Crawford Corp. of Baton Rouge, La., with wide experience both in the manufacture of building products and in the development of housing projects, was particularly instrumental in guiding the plans and thoughts along sound, productive lines. Mr. W. R. McGaw, president, National Home Mortgage Corp., Baton Rouge, La., handled the financing for the project. The National Life & Accident Insurance Co. of Nashville, Tenn., agreed to purchase the permanent mortgages on all the houses.

FHA guaranty

With the land on a mortgage-free basis, the corporation officials conferred with Douglas Svendson, State director of the Federal Housing Administration, and successfully sought a guaranty of 90 percent of the construction cost of the project. With all important questions of financing and land out of the way, the progress of the project was then accelerated.

Selection of type of construction

Backed by FHA approval, the American Legion Housing Corp. examined more than 15 possibilities, finding the most satisfactory to be the Crawford Houses available through the C. & W. Construction Co. of Baton Rouge, a subsidiary

company to the Crawford Corp. The 250 Crawford Houses included 12 basic types. These, plus care in the use of color schemes, add-ons such as shutters, roof variations, dormers, landscaping, arrangement of house on the lot, made each house individual and distinctive. This work was under the supervision of Mr. O. J. Baker, director of low-cost housing research, Engineering School, Louisiana State University. The houses were examined and fully approved by the New Orleans FHA office.

LAND PLANNING FOR MAXIMUM LIVABILITY AND CONVENIENCE

A preliminary plot plan showing the projected lay-out of lots, streets, business property, location of park and school in relation to homes and adjoining property was approved by Mr. Sam Dupree, parish engineer, Federal Housing Administration, and the police jury of the parish. Land planning for this project has been directed along the lines of neighborhood planning. This will serve as a basis for subsequent city planning, while immediately obtaining the objective of quiet, pleasant, relaxed surroundings for home owners through the intelligent channeling of traffic, the provision of wide, curving streets, well-planned and attractive landscaping, combined with ample lawns to make it a definite departure from the grid system of street planning.

Fortunately the tract of land was well situated for the purpose. It is located within walking distance of four major industrial plants. No heavy traffic arteries pass through this development. This is due to its location along the Bayou Monte Sano. Through traffic is known to be detrimental and dangerous to strictly residential areas. This has been avoided. However, the subdivision is adjacent to the Scenic Highway and the Plank Road, both of which are planned arteries for the city-parish traffic plan. Bus service has been provided for the project.

The land is well drained and has a great many first growth trees of oak, gum, beech, and so forth, draped with Spanish Moss. A city-parish park is planned along the northern portion of the tract consisting of approximately 40 acres. The site is adjacent to a public grammer school and it is anticipated that the park development will encourage the utilization of the outdoor facilities for picnic areas, baseball parks, and so forth.

Water, fire hydrants, gas, sanitary sewerage, electricity and telephone service have, of course, been provided. Paved streets, curb, gutter, and sidewalk-all are in as a natural part of the project. Both project and private landscaping has been installed, supplementing the natural vegetation as well as carrying out the Neighborhood Planning principle.

Naturally, plans include a comprehensive community shopping center with parking areas, filling station, grocery store, drug store, barber and beauty shops, theater and many other facilities. These stores will be planned to make shopping easy, less time-consuming. Business buildings will be architecturally designed to resemble residential property, thereby enhancing rather than blighting property values.

USING TODAY'S HOUSES FOR TODAY'S PROBLEM

In deciding the type of houses to build and where to get them, the directors of the corporation realized that the man with a few nails, a saw, and a hammer is not the builder who is going to house the veterans of World War II. The building of houses in quantities calls for a kind of ingenuity and know-how typified by today's businessman-builder, one who knows the possibilities of mass production and uses the recently developed techniques and materials. Considered opinion held that only in this manner could the needed house be built-a house that would of necessity be small, but one which would wring the last ounce of space and livability from today's inflated dollar, and still meet the veteran's demand for quality.

Houses as manufactured by the Crawford Corp., of Baton Rouge, La., were selected because they offered quality comparable with prewar houses. They were efficiently planned to utilize space to the best advantage, the architectural design was superior, and since the manufacturer owns its timber and controls its lumber supply, operates the dry kilns, planer mills, and manufacturing plants, a continuous flow of houses to the housing site could be depended upon-and at a cost more favorable than could be procured elsewhere. The C & W Construction Co. of Baton Rouge, La., which has built similar housing projects, was awarded the contract for the erection of the houses and development of the project site. This contract was signed December 26, 1946, and the taking of subbids, development of plans, etc., then got under way in earnest.