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flexibility and experimentation in cooperative development. There is every reason to believe that these features of the bill will work effectively.

On the other hand there are a number of features of the bill which appear to be susceptible to improvement. These include:

1. Administrative provisions.The present draft would make the newly established National Mortgage Corporation for Housing Cooperatives in fact a division of the Administrator's office of the Housing and Home Finance Agency. The Board of Directors of the Corporation is little more than an official advisory committee. The Corporation makes permanent loans, but the Administrator makes planning advances. The Corporation must approve construction but the Administrator renders technical advice. This division of responsibility is workable, but only upon the assumption that the Administrator in fact is in effective control, as he will be under the bill as introduced.

The coordination of all housing activities under a single agency is a vital necessity. Indeed so much remains to be done in this field that it would appear that the imposition of additional operating programs upon the Administrator will serve to divert him from needed coordination, rather than to enhance his power to coordinate. If the Administrator remains directly responsible for large operating programs, we will never achieve the integrated housing program promised by the preamble to the Housing Act of 1949.

For this reason, it would appear preferable to place full responsibility for this new program upon the Chairman of the Board of a Corporation within the HHFA, but having the same independent status as the other constituents. VestIng full legal responsibility for this program in its effective operating head will serve to strengthen the programy and give it the impetus and unity of purpose needed to make it a success. Finally, consideration should be given to the election of at least two of the members of the Board of Directors of the Corporation by member cooperatives.

2. Service charges in the interest rate.-At no point does the legislation place any limitation upon the service charges which the Corporation can charge as a part of the interest charge to cooperatives. This might leave the Administrator free to charge excessive amounts, build up unreasonable reserves, or unneeded staff. It is, therefore, suggested that the bill be amended to provide that the interest rate on loans to cooperatives shall not exceed the cost of money plus one-half of 1 percent, including the premium for reserves, with the proviso that the Administrator could raise this anxount to not more than three-quarters of 1 percent upon a finding that a higher rate was necessary to avoid impairment of the Corporation's capital.

3. Refinancing of sales of builder corporations.—Where a nonprofit building corporation builds a project for sale to an ownership cooperative, the building corporation must subscribe to stock in the corporation in an amount set forth in the bill. When such project is sold or transferred to the ownership cooperative, the latter is required to pledge a similar share subscription. The law or the legislative history should clearly indicate that these two subscriptions of share capital are not duplicated, but that the subscription of the builder corporation is transferred to the ownership cooperative. Otherwise local groups would be required to subscribe 15 percent rather than 712 percent of the cost of their projects.

4. Share subscriptions to subsequent purchasers.—Attention should be directed at the effects of the share subscription requirements in later years. At the outset, a family can enter the cooperative with a 212 percent down payment. After 20 years, when the project is older and less attractive, the new family might be required to purchase 712 percent. The legislative history should make it apparent that the law is sufficiently flexible to permit the refinancing of share subscriptions upon resale of any shares, either by the Mortgage Corporation, or from authorized reserves of the cooperative.

5. Income limits.The provisions of the bill as introduced would appear to assure that the program would be planned and projects built to serve middleincome families. At the same time, they are sufficiently flexible to permit small variations to be made to meet local conditions, to avoid the disruption of cohesive local groups, and to assure that the projects will be able to attract leadership and organizing skill which is so necessary in cooperatives. For these reasons, the provisions of the bill as introduced should be preserved and should not be amended by the introduction of specific income limitations or limitations applying to all families.

6. Nonprofit corporations.-Section 303 (a) (2) permits loans to be made to nonprofit rental housing and building corporations. The development of responsible permanent and continuing building corporations for housing cooperatives is of fundamental importance in this legislation and major emphasis should be laid on that feature of the plan in the administration of the program. At the same time, it should be recognized that the clause which permits such loans to be made to nonprofit housing corporations may open the way for the use of this program by speculative builders as a means for building and selling projects or buildings of dubious merit. This places great responsibilities upon the administrator to insure that the legislation is not used for such speculative purposes and at the same time to take advantage of the known skill of many responsible building organizations which would be eager to participate in the program on a nonspeculative basis. In view of the great need for flexibility and a wide range of opportunities in this legislation, the nonprofit rental housing corporations should be a part of the program, but special safeguards will be necessary to prevent speculation with respect to this feature. It is suggested that the law might require that the books of account of the corporation be open to public inspection as a means of preventing any speculative ventures.

7. Family size.—The bill at present appears to limit projects to those designed for families of two or more persons. In view of the growing problem of housing aged people and the desirability of accommodating them within a normal community framework, it would be desirable to permit projects to include accommodations for single persons.


Washington, D. C., February 3, 1950. Hon. BRENT SPENCE, Chairman, Banking and Currency Committee,

House of Representatives, Washington 25, D. C. MY DEAR CONGRESSMAN SPENCE : Enclosed is the testimony of Michael Straight, national chairman of the American Veterans Committee, on H. R. 6618, for inclusion in the record of the hearings on this bill.

We appreciate the opportunity to present the views of our membership on this important legislation. Sincerely,

L. C. PAKISER, Executive Director.


VETERANS COMMITTEE (AVC) ON H. R. 6618 Mr. Chairman and members of the committee, the American Veterans Committee supports H. R. 6618. We support it because it provides a sound and democratic solution to a pressing need for more adequate, lower-cost housing for the large sector of our population in the middle-income bracket. Most veterans find themselves in this group. However, AVC supports this legislation not as a piece of special-interest legislation in behalf of veterans, but as a general-welfare measure which will benefit our economy and society as a whole.

The amendments to title III of H. R. 6618 are of greatest interest to the AVC and received wholehearted endorsement in principle at our last national convention, held in Chicago in November 1949. This endorsement was based, in part, on the difficulties which have beset cooperative housing ventures started under the impetus of the American Veterans Committee during the years since the war. Hostility on the part of the traditional sources of mortgage capital, inadequate technical assistance in the management of the cooperative form of operation, and local Government antipathy to cooperative housing undertakings all have contributed to a lack of success in enterprises calculated to provide moderately priced shelter under a democratic system of self-reliance.

The pending legislation would go far to minimize these difficulties. By providing a source of adequate capital at low rates for long-term periods, by establishing a program of technical advice to cooperative and nonprofit corporations, and by making Federal Government support of cooperatively developed housing an important part of our national housing policy, this bill would directly attack the fundamental problem summed up in the phrase "Good housing costs too much.” Moreover, it would do it in a manner best calculated to make our shelter units not mere “houses” but rather "homes ” in the best sense of the word, homes through a democratically run organization in which every occupant has an equal voice. The lower rent per unit contemplated by the establishment of the National Mortgage Corporation for Housing Cooperatives might well result in more of each member's income going into providing community facilities, often so sorely lacking in the big, barren housing projects of the past few years.

The American Veterans Committee is convinced that this country can provide a really livable home for each of its citizens at a reasonable cost. Congress has certainly set this goal in the various pieces of housing legislation adopted by it since the war-both in the emergency veterans' housing program and in the more general Housing Act of 1949. Favorable action on H. R. 6618 will round out a national housing program squarely rooted in American principles of free enterprise and public responsibility.


New York, N. Y., February 6, 1950. Blon. BRENT SPENCE,

Chairman, House Banking and Currency Committee, Washington, D. C. DEAR CONGRESSMAN: The American Association of Social Workers has gone on record in favor of H. R. 6618. Will you please insert the enclosed statement of the association in the record of the testimony on H. R. 6618? Thanking you, I am Sincerely yours,

PHILIP SCHIFF, Chairman, National Public Social Policies Committee, American Asso

ciation of Social Workers, Chevy Chase, Md.



The American Association of Social Workers represents 13,000 of the Nation's outstanding social workers in the country. Its membership comprises the largest professional association in the field of social work and is loca ed, through 120 chapters, in practically every State of the Union and in Hawaii and Puerto Rico. Our association represents a cross section of the total field of social work at all levels of operations in both public and private agencies.

Our total experiences have long ago established for us the fact that the problem of providing good housing for American families is a basic essential of wholesome living. The stability of the family in the community cannot be attained without it. Our membership which daily comes into contact with those segments of our population which require social services of one kind or another and which has developed over the years a very high level of competence in dealing with such problems has enunciated certain goals and principles in connection with housing which are not abstract or theoretical. They embody living experiences which encompass human needs that cannot be ignored if the American way of life is to continue to be a reality for millions of American families who constitute the backbone of this Nation.

We have carefully examined H. R. 6618 and see in it at least a partial answer to the housing needs of that portion of our population which is not eligible for low-rent housing and cannot afford to buy homes at prevailing prices. We are heartily in favor of title III of the act which would enable large numbers of American families to help themselves, via the cooperative idea, to establish for themselves the kind of wholesome family life which would guarantee a decent upbringing for their children, who as future citizens will appreciate and devote themselves to furthering the democratic way of life. For them, there would be a real escape and sense of freedom from those conditions which now surround them in terms of crowded, unsanitary and juvenile delinquency breeding areas.

Furthermore, we heartily approve the methods which would make it possible for middle-income groups to obtain decent homes without a Federal subsidy. It is our sincere belief that this great area of our population will strive mightily to make such a program succeed because they constitute the kind of people who will take a missionary zeal in the fulfillment of this housing plan, since they know their Government is behind them while at the same time making it possible for private capital to participate up to the hilt in financing these projects.

We are convinced that the Congress of the United States has a great challenge before it in H. R. 6618. We hope it will accept it without equivocation because the seeds contained in this legislation will surely blossom forth into the kind of beauty and gracious living of which America will be justly proud.

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Washington, D. C., February 14, 1950. Hon. BRENT SPENCE, Chairman, House Banking Committee,

House Office Building, Washington, D. C. DEAR MR. SPENCE: Please find enclosed a summary statement in support of the middle income housing bill which we intended to present orally to your committee but were not able to gain a hearing.

Will you insert this in the record of the hearings and place it before your committee members when you consider the legislation. Thank you. Sincerely,




Gentlemen, I have the honor to represent the American Council on Human Rights, a cooperative program of seven national fraternities and sororities dedicated to seek the extension of fundamental human and civil rights to all citizens of our country and to secure equality of justice and opportunity to all without discrimination because of race or religion.

We have reviewed H. R. 6618 and H. R. 6742 to assist in the production of housing for middle income families. We support the bill. We support the aid to cooperatives. We support the liberalization of the FHA mortgage insurance program. We feel the passage of these measures are necessary to properly supplement the Housing Act of 1949.

We strongly urge, however, that to title 3 of the bill on the protection of labor standards, there be added a provision requiring that in the performance of any contract for construction of housing let pursuant to funds made available in this bill, the contractor agrees not to discriminate against any employee or applicant for employment because of race, creed, color, or national origin.

The reasons for this are clear to the members of this committee and we do not need to labor the point. We might add that a similar provision is included in all contracts let by the Department of Defense.





FHA states that it does not release information on specific projects from its Washington office. The FHA Research Division on February 13 gave the following totals (as of the end of January 1950):

Cooperative housing projects handled under section 207 since the revision of

section 209 (1948 revision)

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Regional distribution of above cooperatives (including those rejected):

( More than one application from each of the following States : New York, Ohio, Illinois, Oklahoma. One application from each of the following States: Michigan, Kansas, Georgia.

1 Replyfby Mrs. "Shirley Hart to request by NAREB, Feb. 13, 1950.

Handled by FHA under other sections:

Cooperative housing projects would have been eligible to FHA insurance under section 608 and also under title II prior to the war period. But any such insured are not identified in FHA records as cooperatives.

II. FINANCING BY SAVINGS BANKS, ONE NOTABLE EXAMPLE The National Association of Mutual Savings Banks, New York City, refers to the Bowery Savings Bank, New York City, as an example of savings-bank financing of cooperatives.

The Bowery Savings Bank, 210 West Thirty-Fourth Street (by Harry Held, Assistant vice president), under date of February 14, 1950, submits the following list of cooperatives which will be financed with private mortgage capital in the New York area, including conventional loans and FHA-insured loans:

Amalgamated Clothing Workers' Project, Bronx, N. Y. Under construction, being financed by a conventional loan through the Bowery Savings Bank, in the amount of $6,700,000, (1,429 units).

Bell Park Gardens, Veterans' Cooperative, Bayside, N. Y., being financed under FHA 207 (c), in the amount of $7,222,000. Project completed and fully occupied, (800 units).

Bell Park Manor, Veterans' Cooperative, Bayside, N. Y., being financed under FHA 207 (c), in the amount of $5,000,000. Loan expected to close this month and construction started by April 1, (550 units).

Bell Park Terrace, Veterans' Cooperative, Bayside, N. Y., being financed under FHA 207 (c), in the amount of $3,000,000. To be constructed, (300 units).

Mount Vernon Mutual Housing Co. Inc., Veterans' Cocperative, Mount Vernon, N. Y., being financed under FHA 207 (c), in an approximate amount of $1,600,000. To be constructed, (number of units unknown).


Life Insurance Association of America, 165 Broadway, New York City (by Dr. Hart, assistant to director of investment research), states that subject of cooperatives under present conditions is so new that they have no data available on degree to which insurance companies are financing cooperatives.

American Life Convention, 230 North Michigan Avenue, Chicago (by Mr. Gurton, assistant to executive secretary), states the convention compiles no investment data (cooperate on compilation done by Life Insurance Association of America). States loan policy would yary, as always, with the individual companies.

Prudential Life Insurance Co., Newark, N. J. (by Mr. John Lyons, assistant to general manager), states they have considered some cooperative loans, but so far have made none.

Metropolitan Life Insurance Co., New York City (by Mr. Harry H. Hemming, statistical assistant), states that they financed some cooperatives in the early 1920's, but there have been no cooperative loans in recent years.

See also: On Park Gardens (first cooperative housing project insured by FHA under section 207). Statement in New York Herald Tribune by Joel W. Schenker, printed in January 30 Congressional Record, page A666.



The National Grange believes in home ownership. In fact, the prime purpose of the Grange is to develop, strengthen, and increase the attractiveness of the farm home and develop that wholesome home life on the farm which takes pride in home ownership and the improvements which ownership fosters.

Throughout its 83 years of history the National Grange has fostered and aided in developing the cooperative movement. We believe in the self-help principles inherent in it. It follows that we bolieve in cooncrative home owner hip vrere the principles of cooperation aid in the acquisition and financing of home ownership. We believe that cooperatively owned housing is a much preferable method of meeting the housing problem than Government housing projects, if the principles of cooperation are soundly applied to attain the objective of

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