Mr. BUFFETT. There is one factor perhaps in the situation now which did not exist at the time some of these other Government interventions in the housing field took place, and that is the proposition that the Federal debt is so large and so burdensome that the Federal Reserve Bank is compelled to rig the market on Government bonds. Do you think that has been given full weight in this question?

Mr. BOGGS. I think the Federal debt is certainly something that is very vital to the economy of this country. That is one reason I cannot forget this tax reduction bill we had up here.

Mr. SMITH. Will you yield, Mr. Boggs?

Mr. BOGGS. Surely.

Mr. SMITH. Do you think the Federal debt is a good thing?

Mr. BOGGS. I certainly do not, but I believe we can blame that principally on a fellow named Hitler and possibly upon some of our own short-sighted economic policies. But that is another argument.

So, Mr. Egan, you would say that there is an interest on the part of the Government, which has been exercised, certainly since the enactment of Home Owners Loan Corporation, in the housing bill? Mr. EGAN. There is no question about it.

Mr. BOGGS. To your knowledge, except for the public housing features, the vast majority of the builders, contractors, and so forth have wholeheartedly supported the Federal Housing program, have they

not?

Mr. EGAN. That is correct.

Mr. BOGGS. In my opinion it is one of the finest things that we have ever done in this country. I think too it is unfortuante that we are attacking the Federal Housing Administration in some of the arguments we have had here today, and I am glad to see that in the testimony we have heard, that the builders have come forward and have said that if we did away with the Federal Housing Administration program, about one-third of the homes, or more, that we have constructed in this country this year would not have been built. So the interest of the Government has been established over a period of time. After all, I have considerably more faith in the Congress than my good friend from Nebraska, Mr. Buffett, has. The Congress is expressing the will of the people, and the people who have supported this program, I believe, are pretty substantial people. I think it is rather difficult to label Senator Taft, or Senator Brooks, or Senator Donnell of Missouri, as radicals of any type of description. That is all, Mr. Chairman.

The CHAIRMAN. Are there further questions? (No response.)

Mr. Egan, we wish to thank you for the contribution you have made to these hearings, and I presume you will be available further if the committee desires you to come before it?

Mr. EGAN. I will.

The CHAIRMAN. I promised the committee when it convened, some time after 2 o'clock, that we would adjourn this afternoon meeting at 4 o'clock and we still propose to do so.

Mr. Bland, I doubt whether we should proceed with the Veterans' Administration witnesses this afternoon. If it is agreeable, we will begin with the Veterans' Administration witnesses on Monday morning, and if it is at all possible, and if they care to do it, we can proceed

with Mr. Kaufman. Mr. Kaufman is chairman of the Norfolk Redevelopment and Housing Authority. We will proceed as far as we can until 4 o'clock.

STATEMENT OF CHARLES L. KAUFMAN, CHAIRMAN, NORFOLK REDEVELOPMENT AND HOUSING AUTHORITY

Mr. KAUFMAN. My name is Charles L. Kaufman. I am a practicing attorney in Norfolk, Va.

I am chairman of the Norfolk Redevelopment Housing Authority. I appreciate the opportunity of appearing before you today. Realizing that there are others who wish to speak, my remarks will be brief. Although what I say represents only my own opinion and that of the Norfolk Authority, I venture the statement that the conditions which exist in Norfolk are not substantially different from those which obtain in many other American cities, and that the enactment of S. 866 would be equally helpful and beneficial to those other cities.

We are in favor of the entire bill because we believe strongly in the necessity for a comprehensive national housing program, but I would like to invite your attention particularly to two titles of the bill-title V, on urban development and title VI on urban low-rent housing.

Those two titles are both independent and interdependent at the same time. Independent in that the slum clearance program is not to be confused with a public housing program. Interdependent in that a slum clearance program, which is not accompanied by a lowrent housing program, is impossible.

I do not believe that I am divulging any secret when I say that most of the people who are opposed to the Taft-Ellender-Wagner bill base their opposition largely, if not exclusively, on its public-housing provisions. The various arguments which have been mustered against this program fall, broadly speaking, in two categories:

(1) Those which are based upon the fear that public housing will be competitive with private enterprise, and

(2) Those which are based upon the claim that it is undemocratic or communistic.

Let me make one thing perfectly clear. Public housing does provide competition of the most direct and devastating sort with that class of privately owned housing units which, because of their age, their lack of facilities and their condition, have long since passed their useful life and have no right whatsoever to exist.

But when I have said this, I have said all that can be fairly said. about competition, for the bill now before you contains every necessary safeguard against any other type of competition. The section requiring the local governing body's approval of each public-housing project, the provision requiring a finding that there is a need for low-rent housing not being met by private enterprise, and the so-called 20 percent gap provision, all these are calculated to give every necessary protection to our private enterprise system.

The argument that such a program is communistic or socialistic is one that has been repeatedly heard. The same arguments have been heard in the past against other programs which today enjoy ready and complete acceptance. Some cogent and convincing answers to

such arguments are obvious. The character of the individual sponsors of the bill should reassure any who have doubts respecting the place of such a program in our American democratic system. The fact that the Senate has already passed the bill should be an additional reassuring factor. The obligation of the Federal Government in the matter of housing is no more socialistic than the role that the Government plays in related and equally important fields-education, public roads, public health, and others.

The slums provide fertile areas for the growth of misery, hardship, and discontent, and by removing them we will strengthen, rather than weaken, our democratic system. In my opinion, social-mindedness is the best bulwark against socialism.

The unsightly, unwholesome slums, the acute need for additional low-rent housing units, the tragedies and hardships to which the illhoused are exposed, the hopelessly long waiting lists for admission to our projects, are conditions which I am sure are not peculiar to Norfolk. I do not believe it is necessary for me to burden the record with statistics dealing with the housing and slum situation which prevails in my own city, but I shall gladly endeavor to answer any questions with respect thereto.

The CHAIRMAN. Are there questions of Mr. Kaufman?

Mr. SMITH. Mr. Chairman.

Mr. SMITH. Mr. Kaufman, you liken this to grants for roads, is that the idea?

Mr. KAUFMAN. Well, I think it is probably more closely akin to grants which are made for public health. I think it is more closely related to that, but I think they have similar characteristics and I think the same thing is true probably with regard to public education. Mr. SMITH. The people who enjoy public education, if they have any real estate, pay taxes, do they not?

Mr. KAUFMAN. There are many folks who enjoy public education who pay very little tax.

Mr. SMITH. I say if they have real estate?

Mr. KAUFMAN. If they have real estate or property which is subject to tax, they of course are obligated to pay it.

Mr. SMITH. Where is there any real estate in any State on which they do not have to pay taxes?

Mr. KAUFMAN. Well, many of those people do not own real estate. Of course, if they owned real estate it would be normally subject

to tax.

Mr. SMITH. I am saying those who own real estate pay taxes.
Mr. KAUFMAN. That is right.

Mr. SMITH. And everybody is permitted to enjoy the use of the roads. But everybody is not allowed to live in these houses. Is that a good comparison?

Mr. KAUFMAN. Well, with respect to the use of the roads, it is true that all are allowed to use them, but it is also true that they are allowed to use them irrespective of whether they pay tax. Some folks may pay just a nominal amount of tax.

Mr. BROWN. Will you yield, Doctor?

Mr. SMITH. I yield.

Mr. BROWN. As a matter of fact there is about twice as much money collected from the users of automobiles, including gas and oil, and

placed in the Treasury as the Government spends on the highways of this country.

Mr. KAUFMAN. I think it is probably quite true that the revenues derived from the sale of gasoline and other things of that nature are more than sufficient to pay the cost involved in the construction and maintenance of roads.

Mr. SMITH. All children are permitted to enjoy the benefits of schools, but in your housing projects, only some people are permitted to live there. Do you think that is a good comparison?

Mr. KAUFMAN. It is true that all are eligible to go to public schools. Many of those who do go to public schools, however, do not pay their own way, because they are not contributing an amount in tax equivalent to what it costs to provide the education.

Mr. SMITH. I think you are talking about a different thing. You are comparing this to education and public roads. What is the fundamental purpose of education, as given by everyone who has ever studied the question?

Mr. KAUFMAN. Did you want me to answer that question, sir?
Mr. SMITH. Yes.

Mr. KAUFMAN. Well, naturally, I would have to define it in terms of my own conception of it. The purpose of education, I think, is to raise the level of intelligence of the type of citizenship which prevails in our country, to enable people to enjoy a fuller life than they would otherwise enjoy.

Mr. FOLGER. May I interject, Doctor?

Mr. SMITH. Yes.

Mr. FOLGER. To make a greater contribution to the public welfare also.

Mr. KAUFMAN. I think that is one of the byproducts of it, yes, sir. Mr. SMITH. In the matter of education the fundamental principle is to put the minds of children in such condition as to make it possible for them to avail themselves of the opportunities for doing what?

Is that not the fundamental principle of education good things of life.

Mr. KAUFMAN. My own view would be, if the education went no further than that, it would be an inadequate and improper type of education. I think the purpose of education should be to enable the person who is receiving the education to enjoy a fuller life, but over and beyond that, to help others likewise in achieving a fuller life.

In other words, I do not think that the ends ought to be exclusively selfish.

Mr. SMITH. When you set up these housing projects, not only the people moving into them enjoy the fuller life, but they do something so that the people living in the rest of the city enjoy a fuller life; is that your idea?

Mr. KAUFMAN. Yes, sir; I think so. I think that people who are in comfortable circumstances could not certainly live in a happy mood if they thought that there was nothing but misery surrounding them. I think by alleviating the conditions of misery in a community you contribute not only to the happiness of those suffering from misery but also of those in the other part of the city.

Mr. BOGGS. Do you consider that a radical concept?

Mr. KAUFMAN. That is the concept which underlies community chest, which we have in every city. I think it is the same concept which underlies public-health programs.

Mr. BOGGS. Are you familiar with Jesus Christ?

Mr. KAUFMAN. Yes; the same thing underlies His teachings.

Mr. SMITH. Let me ask you where, in the New Testament, Jesus Christ ever advocated a law? You have asked for it. Now give me the answer.

Mr. KAUFMAN. I did not know that I had asked for it, and I do not know that I can give you the answer to that, sir.

Mr. SMITH. As a matter of fact

Mr. KAUFMAN. I think He was advocating a way of life that would obviate the necessity for laws. I do not think there would be much need for laws if we all lived according to His teachings.

Mr. SMITH. As a matter of fact, Christianity teaches the very reverse, not to rely upon man-made laws, but upon God's laws. Am I right?

Mr. KAUFMAN. I think that is true.

Mr. SMITH. Certainly. So we are really crossing the principles of Christianity here.

Now, Mr. Kaufman, I think that the members of Congress are trying to do what they believe to be right. I take my position on what I believe to be in the realm of principle, and these questions which I ask you are not at all intended to embarrass you. The credit of the Federal Government is not only strained, but it is waning. What have you, as an American citizen, to say on that point? You come here and ask us to appropriate more money. What have you to say on that point?

Mr. KAUFMAN. I recognize, Dr. Smith, that the matter of the cost to the Government is a pertinent, proper consideration. I do not attempt, in connection with this or in connection with any matter that requires the expenditure of governmental funds, to say that that should be disregarded.

Naturally, in determining whether or not money should be expended for this or any other purpose, we must consider both the amount of the expenditure, the amount of money that is reasonably available to meet the expenditures, and, above all, the benefits that will accrue from the expenditures.

Now, I think the amount that is involved here, in the way of gov ernmental cost, is very low in relation to the value of the benefits that will accrue from it. But do not misunderstand me. I am saying that is my opinion, but I say at the same time, that the question of the financial condition of the Government, the ability of the Government to pay, are all legitimate, proper considerations.

Mr. SMITH. How much more can we stand, Mr. Kaufman?

Mr. KAUFMAN. Well, it depends upon what the underlying purpose is, with government, in my judgment, just as it is with an individual. It depends upon whether the money that is being expended is going to go into useful, productive channels, or whether it is going into a rat hole. Manifestly a person can afford expenditures for productive purposes to a much greater extent than he can afford expenditures that could be classified as nothing more nor less than waste or extravagance. I do not regard this as waste or extravagance. In my judgment, based upon observations over a period of many years, a program of this