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Senator PAYNE. It's about the same?

Secretary Douglas. I don't think it's very different because we have had to put Air Defense bases in remote spots also.

Senator SPARKMAN. Mr. Douglas has a statement. That will be printed in the record. Without objection, the letter from the Assistant Secretary of Defense sent to us in connection with this will be printed in the record, and likewise a letter from the Secretary of the Treasury will be included in the record.

(The material referred to follows:)

STATEMENT OF JAMES H. DOUGLAS, UNDER SECRETARY OF THE AIR FORCE, ON

S. 1501

Mr. Chairman and members of the committee, I appreciate this opportunity to appear before you in behalf of the Department of the Air Force to discuss the very important problem of military housing. May I review briefly with you the urgent need of the Air Force for additional family housing?

When the Air Force reaches its programed strength of 137 wings, of its 975,000 officers and airmen, 453,000 will be married ; 166,000 of these will be in the lower 4 airman grades and do not qualify for family quarters under current legislation. The remaining 287,000, consisting of commissioned officers, airman personnel in the upper 3 grades and enlisted personnel in the fourth grade with over 7 years' service, will be entitled to family housing.

Against this total requirement of 287,000 housing units in 1957, we have presently available 76,000 units (Government-owned and Wherry). By 1957 we hope there will be available an additional 18,600 units as the result of actions taken by past Congresses and the program currently under consideration by this Congress. In addition there are estimated to be 58,000 privately owned family housing units in the local communities which meet the Air Force's standards of acceptability. This leaves a deficit of about 134,000 family housing units to meet the Air Force's needs in 1957.

Adequate housing is indispensable to the successful accomplishment of the Air Force's mission. Today our Air Force must be ready for combat on short warning, and this requires that a large part of our operating personnel live on or near our airbases. Our experience has also demonstrated that the morale and efficiency of Air Force personnel are greatly affected by the quality of family living conditions.

From the economic point of view, any increase in our reenlistment rate will result in substantial savings to the Government. More important, years of experience of incalculable value are saved to the armed services when trained personnel reenlist. Our surveys have shown that the reenlistment rate is much higher where there is good housing than where there is not. As you all know, the Air Force wife plays a major role in the decision her husband makes as to whether he should stay in the service. Her appraisal of the advantages of the life in the service must be based largely upon the conditions under which she and her children spend their daily lives.

The Air Force feels that a good start will be made toward meeting its needs if Congress appropriates the funds for family housing construction which have been requested in the current public works program. We think, however, the need for housing makes it imperative that advantage be taken of every sound means to solve this problem as rapidly as possible. The r quired housing will be built sooner if such a procedure as is proposed in S. 1501 is enacted, and private capital made available, in addition to the appropriated funds program.

OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE,

Washington, D. C., May 12, 1955. Hon. J. W. FULBRIGHT, Chairman, Committee on Banking and Currency,

United States Senate. DEAR MR. CHAIRMAN : This is in reply to your request for the views of the Department of Defense on S. 1501, a bill “To amend the National Housing Act by adding a new title thereto providing additional authority for insurance of loans made for the construction of urgently needed housing for military personnel of the armed services."

S. 1501 would add a new title X to the National Housing Act which would provide for the insurance of mortgages by the Federal Housing Administration to be paid out of an armed services housing insurance fund. Once the sponsor or builder has constructed the housing units, the housing units would be turned over to the military departments to be maintained and operated by them. The military tenants would not pay rent as such, but, instead, would forfeit their quarters allowances as in the case of other public quarters, and such allowances would be utilized by the military departments to meet the payments on the outstanding mortgage. The Federal Housing Administration would furnish mortgage insurance similar to the mortgage insurance provided under the Wherry Act, but the issuance of that insurance would become automatic. The proposed bill provides a novel adaptation of an insurance concept that has heretofore been accepted by private lending agencies and utilizes an existing governmental organization.

Assuming that the detailed provisions of the proposal, particularly with respect to the fiscal and insurance provisions, are found workable, S. 1501 would, nevertheless, be more involved and more expensive than the use of direct appropriations for the construction of military family housing. For that reason, the Department of Defense continues to favor the use of direct appropriations for that purpose and has submitted a proposal to the Congress, introduced as S. 1765 and H. R. 5700, which includes an authorization totaling $254,983,300 for the construction of approximately 17,000 units of family housing that are urgently needed for military personnel and their dependents and also provides an additional $75 million for family housing to be acquired through the surplus agricultural commodities program. The cost of providing such family housing will be more than offset in the future by savings in appropriations for quarters allowances.

Notwithstanding this Department's proposal for appropriated fund housing, it would not object to other types of legislation if they would as economically and effectively meet its special problems in this area.

This report does not express opinions concerning the public debt or mortgage insurance aspects of S. 1501 inasmuch as those matters are within the cognizance of agencies other than the Department of Defense.

The Bureau of the Budget has advised that there would be no objection to the submission of this report to the Congress. Sincerely yours,

RICHARD A. BUDDEKE, Director, Legislative Programs.

TREASURY DEPARTMENT, May 12, 1955. Hon. J. W. FULBRIGHT, Chairman, Committee on Banking and Currency,

United States Senate, Washington, D. C. MY DEAR MR. CHAIRMAN : Reference is made to your request for the views of this Department on S. 1501, to amend the National Housing Act by adding a new title thereto providing additional authority for insurance of loans made for the construction of urgently needed housing for military personnel of the armed services.

Since the subject of military housing is an involved and difficult one for which this Department has no direct responsibility, I hesitate to express any detailed views with respect to this bill.

The central financial question in which we are concerned is the broad problem of the use of Government guaranties and the principles which should determine such use. In recent years the use of Government guaranties, rather than direct appropriations, has proved in a number of areas an effective method of stimulating and encouraging private enterprise, as for example, in the FHA and in some of the lending of the Export-Import Bank.

In these cases, the repayment of the loan which is guaranteed arises from private sources and the Government's credit is not involved except in the guaranty.

In the case of military housing, the use of the guaranty principles should, I believe, be subjected by your committee to very careful examination for, as I understand the proposal, it would involve the Government guaranteeing that the Government itself would directly or indirectly make a repayment.

The question I hope your committee therefore will consider with considerable care is whether it would not be more appropriate in a case of this sort to make a direct appropriation of the sums that are necessary to assure decent military housing, and so avoid a further extension of the principles of Government guaranties into areas where its use is, to say the least, doubtful.

The Department has been advised by the Bureau of the Budget that there is no objection to the submission of this report to your committee. Very truly yours,

G. M. HUMPHREY,

Secretary of the Treasury. Thank you very much, gentlemen. We appreciate your discussion of this matter.

The next witness is Mr. John P. Robin, secretary of commerce, Commonwealth of Pennsylvania.

Mr. Robin, you may proceed in your own way. Slum clearance and urban redevelopment

STATEMENT OF JOHN P. ROBIN, SECRETARY OF COMMERCE,

COMMONWEALTH OF PENNSYLVANIA

Mr. Robin. Mr. Chairman and Senators, I am John P. Robin. I am secretary of commerce in the Commonwealth of Pennsylvania. That office is not entirely what its name implies. It's the department of state which deals with economic and community developments and administers such action as the State may take in the fields of housing, urban redevelopment, and community improvements. In addition, before assuming that office, I was executive director of the Urban Redevelopment Authority of Pittsburgh, Pa.

I would like today to speak to two points principally. The first is to appear in support, on behalf of the Commonwealth, the Governor, and our department, of the increased authorization for urban redevelopment and urban renewal of $500 million which is provided in S. 1800.

That is particularly important and of interest to Pennsylvania because, as the Senators will remember, there is a limiting clause in the original bill which restricts the allocation to no more than 10 percent to any 1 State. .

Our State of Pennsylvania is now at its complete limits, and unless the authorization is increased there will be no more Federal aid for urban renewal and urban redevelopment in Pennsylvania. I think the same situation also applies to New York State, and could soon apply to such other urban States as Michigan, Illinois, and California.

We in Pennsylvania strongly support the principle of urban redevelopment. Our cities—Pittsburgh, Philadelphia, the metropolitan area of Alleghany County around Pittsburgh, and many Pennsylvania cities—have active redevelopment programs which instead of contracting are expanding. We feel we would be greatly injured unless the Congress is able to expand the authorization so that Pennsylvania cities may continue.

In addition to that, the State of Pennsylvania, although very hard pressed financially in its current budget, is considering legislation, offered by the Governor as part of his economic program of the State, of some State aid, modest though it is, for our communities to help them match the Federal expenditure set up under the Federal urban renewal program. Consequently, we strongly urge the committee to favorably report and to recommend to the Senate the additional authorization of $500 million.

Public housing

The second point. We in Pennsylvania, too, recognize a very strong need for increased public housing, both as a part of urban redevelopment and urban renewal, and in addition for the social and humane factors which are provided by the provisions of good housing for our people.

We are disappointed that the Congress has not seen fit to implement the original Housing Act of 1949, and we in our State, the housing authorities in our State, and the State Governor, will be very happy to see the Congress raise the authorized number of public housing units from the token number of 35,000 to the full 200,000 contemplated by the original act.

With the chairman's permission, I would like to read now a short statement by the Governor of Pennsylvania, George M. Leader, to the committee. This is Governor Leader's statement : Slum clearance and urban renewal

STATEMENT OF GEORGE M. LEADER, GOVERNOR OF PENNSYLVANIA The twofold problem of urban blight and lack of decent low-cost housing is of concern to the State as well as the city in these days of multiplying governmental responsibility. And particularly is this true of the Nation's great industrial States, of which the Commonwealth of Pennsylvania is one.

Yet we at the State level find ourselves in no better a position to deal with the problem than do our cities, and must urge that the one branch of government which does have the wherewithal—the Federal Government-utilize its resources to the fullest extent possible to solve a problem so all-pervading in its effects.

It is difficult to stand by and watch the individual cities struggling to try and free themselves from the octopuslike grip of blight. The many areas of municipal activities into which its influence reaches—as a cause and as a handicap to activity—have been documented many times. So also have the stories of the varied city efforts to eradicate it-each municipality groping for a formula which will somehow prove effective in its own particular circumstances. By now the country has accumulated from these many experiments a body of experience which makes one thing clear; if we are going to save the cities, it is going to take a great deal of money. Look at any individual project in any individual city. Count the cost, the accomplishment, the distance yet to go. And multiply the results by cities scattered through the country which are feeling the increasing squeeze of blight. We cannot just abandon these essential centers, great and small. The money must be made available to renew them.

In Pennsylvania, the State has not “stood by” and let its cities carry on the struggle without aid. In 1949, the State appropriated $15 million to assist in redeveloping slum areas and assist housing construction throughout the State. That was the best that we could then provide, and obviously it has not gone very far. As our Philadelphians can tell you, the elimination of just a tiny fraction of the slums in their one city has cost a total nearly half that sum. Now we are hoping to make added funds available, but, with all the manifold State responsibilities, the largest sum that we could reasonably ask our legislature to appropriate is $5 million.

I feel that I can say definitely that both the city and the State governments of Pennsylvania are doing everything within their means to solve the blight problem. The “means” must therefore come from the Federal Government if truly effective action is to be taken. Congress has recognized the need, has appropriated the funds to start the process. The $500 million authorized in 1949 is now coming to an end. I cannot urge too strongly that the funds provided for in S. 1800 be approved so that the hopeful process now begun can be continued.

Turning to the other facet of this problem—the provision of new homes—I can report that the State has made funds available also for the building and subsidization of rental housing. We in Pennsylvania are particularly aware of the importance of adequate housing. For we have in the Commonwealth 33 public housing authorities with 31,855 units constructed or under contract.

In addition, we know our industries can't be well manned if our workers are not well housed. America's own wartime experience, the difficulties of European countries in rebuilding industries in centers where the houses too had been destroyed, recent studies on an international scale-all show this to be true. At the present time, Pennsylvania-unfortunately one of the States afflicted with a serious unemployment problem—is campaigning to attract new industry. We have every confidence that this campaign will contribute greatly to a solution of our employment problems—and may well, in fact, require an increase in our labor force in certain fields. Whether labor comes in from outside or shifts within our borders, however, there will be a need for housing in some centers where new plants go uphousing available to families of all income levels.

This, of course, can only augment the pressing need for decent homes of those whose incomes will not let them take advantage of the current vast construction of new but higher priced homes. How to bring good housing within the reach of this large group of families as a whole is a question not yet satisfactorily answered. But we do have one successful method of aiding one part of this group—those with the lowest incomes and the most pressing needs. That method is, of course, provision of public housing, which has already proved its worth and on which the only question remaining is whether we can supply enough of it, fast enough, to meet the immediate need. The latter surely is no less now that it was 6 years ago when Congress judged it to be at least 135,000 and possibly 200,000 units a year. We all know that, in that 6 years, we have not succeeded in outpacing the deterioration of existing dwellings. In Pennsylvania we know only too well also that, while the Nation as a whole continues to prosper, large segments of our people now go unemployed and in need. The annual building of 35,000 units of public housing, as proposed in S. 1800, would no more than dent the need. Let us return to realism on this score. Authorization of a full 200,000 units yearly is a basic necessity.

Finally, broad though these programs are in their own right, their implications for the general economic well-being of the Nation are worth considering too. Many are now debating whether the present building boom is healthy, but no one would debate the need for keeping the construction industry operating at full capacity if the economy is to operate similarly. Both of the programs we have been considering would contribute to this end—and both are founded on a demand which is so great as to be steady and predictable, not subject to the questions raised concerning the demand sustaining building operations at the present time.

For all these reasons, I heartily support the approval of the $500 million authorization proposed for urban renewal aid but recommended the stepping up of public housing construction to the rate of 200,000 units a year.

Senator SPARKMAN. Thank you, Mr. Robin. Do you have any questions, Senator Capehart?

Senator CAPEHART. No, I think your statement is very clear.
Senator SPARKMAN. Senator Payne?
Senator PAYNE. No, sir.
Senator SPARKMAN. Thank you very much, Mr. Robin.

The American Municipal Association, Mayor Clark of Philadelphia, and Mayor Mead of Syracuse, N. Y.

Slum clearance and urban renewal

STATEMENT OF JOSEPH S. CLARK, JR., MAYOR OF PHILADELPHIA,

PA., REPRESENTING THE AMERICAN MUNICIPAL ASSOCIATION

Mr. CLARK. Senator, I am here today with two hats on, one representing the American Municipal Association, and the other on behalf of the city of Philadelphia. I wonder if it would be convenient if I put my testimony in with respect to both at this time.

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