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sentatives of the major veterans' groups, labor organizations, cooperatives, housing organizations and other public interest groups as well as about 15 officials of existing cooperative housing projects.

Skeptics said we could never get together—but we did. We spent a full day without any reporters or Government officials around. "We had some arguments. But when the day was finished we were able to present to the Housing and Home Finance Agency and the staff of the Senate Banking and Currency Committee nine basic points on which there was unanimous agreement.

The conference was in agreement that every effort should be made to bring private capital into the development of cooperative housing and that any legislation presented should include provisions under which the Government might encourage the enlisting of private capital by the guarantee of income debentures, the creation of a mortgage association for housing cooperatives or some other method. There was, however, agreement that the bringing in of private capital should not be a condition precedent to granting the construction loan or the permanent financing.

We feel that the Maybank amendment does this in admirable fashion.

The conference agreed that the interest rate to the cooperatives for both construction and long-term financing should not exceed the going Federal rate, plus one-half of 1 percent. By this formula the costs of financing can be brought down to a point where it is possible to build housing that middle income families can afford-and yet not require any subsidy from the Government. This is a formula which will make middle income housing pay its own way.

A third point of agreement by all these organizations of veterans, labor, cooperatives and housing organizations was that the amortization period should not exceed 60 years. Your Senate subcommittee came back from Scandinavia reporting that 100-year amortization is common there on well built housing. We do not go that far. We are happy to see that the Maybank amendments aim for 50 years.

The American Federation of Labor in a statement presented to this committee in July of 1949 points out thatthe change from a 35-year 4Y2-percent loan to a 60-year 3-percent represents a saving of $17.40 a month on a $10,000 loan, On a 50-year loan this saving is still $15.20 per month. That alone is a very important factor in putting decent housing within reach of moderate-income families.

The conference endorsed as a fourth fundamental the need for 100 percent loans to cover development cost, but advocated that within 5 years the cooperative association shall have at least a 5-percent equity in addition to the normal retirement of the mortgage.

The Maybank amendments accept the same principle but are a bit more conservative than we were. I, personally, like the more conservative approach. This provides, through subscription to stock of the mortgage association, for a 2-percent down payment before the loan is granted and a 772-percent equity payment, in addition to regular mortgage charges, in the first 20 years.

A fifth point of unanimous agreement was the need for a new administrative agency. Here we disagree fundamentally with the Maybank amendments. We feel that there is a great need for such a structure

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which would, of course, be a constitutent unit in the Housing and Home Finance Agency, the HHFA. But it would be on a level with the Federal Housing Administration, FHA, and the Public Housing Administration, PHA. It should be sympathetic to and devoted only to the promotion and financing of cooperative and nonprofit housing. Its administrative chief should be appointed by the President with the concurrence of the Senate.

I do not want to trouble you with details on that point. On the positive side it should be pointed out the great success of the Rural Electrification Administration with a similar organizational set-up.

On the negative side is the stark, heart-rending failure of a cooperative program thrown in with FHA as it has been for the last few years.

Jerry Voorhis, executive secretary of the National Cooperative Mutual Housing Association, placed in the record of the House hearings last year a detailed record of the treatment cooperative projects suffered at the hands of a preoccupied or hostile set of officials in FHA.

The other points of agreement which there is just time to enumerate

are:

The need for great care to prevent speculators and profiteers from taking over the program.

The need for adequate measures to see that the projects are within the reach of middle income families but that no arbitrary limitation of income be imposed, which would create class lines and deprive the projects of the leadership essential to its success.

The right of the cooperative housing association to repurchase the members' shares where it is necessary to withdraw from the project. This also helps prevent speculation.

And finally—and of great importance-provision for both individual and group ownership. The principle of home ownership is an essential to an American free economy.

These have been technical points. Dave Krooth of the National Housing Conference, who is really an expert on these matters, is to be a witness and can answer your questions on these better than I can. Now we turn to something I really like to talk about.

I One of the best examples of how cooperative action brought abundance to farmers with the help—but not control of Government, is in our electrical development, familiarly known as REA's. Prior to 1935, less than 15 percent of the farmers in the Nation had electricity-in Ohio this figure was about 18 percent.

In 1935, to help electrify the farms and also to make work, the Government made loans to cooperatives available at the cost of money to the Government.

At that time farmers in the State of Ohio were paying private companies a connection charge to bring the lines from the road to the farm buildings.

The private companies charged any fee they could get away withand in addition-9 cents a kilowatt-hour for the power. Under the REA plan—in addition to lowering the cost of money to the people, connection charges were eliminated and the power rate was fixed at 44 cents per kilowatt-hour. Senator Douglas told a conference in Columbus recently that this project may actually result in a small profit to the Government even at this low interest rate.

His statement would certainly seem to answer the detractors of these amendments we are discussing when they say that administrative costs are not sufficiently cared for. At the present time more than 80 percent of the farmers in the Nation are electrified and in Ohio we can point to 97.6 percent as being electrified. This has opened up vast new markets for electrical supplies which farmers have purchased—just as a housing program on a similar basis would create demand for billions of dollars of building supplies and house furnishings.

In addition to that, I don't think, gentlemen, you can ever properly appraise the value of this program, because it created a vast potential market for all sorts of appliances and everything else that I do not think anybody has ever been able to adequatley appraise.

The remarkable thing about this program in retrospect, gentlemen, is that our detractors then said that private business would take care of the problem and that if we proceeded at the rate we anticipated that there would be no demand for the current.

Quite to the contrary, I have never heard of a single old-line power company going out of business, and in fact we do hear of power shortages in various parts of the country: It seems to me that the REA as in housing gives a clear cut example of how those in leadership position constantly underestimate people's capacity to consume when they are able to do so.

Under REA, which was a separate constituent administrative agency, technical assistances, planning, and supervision were provided which contributed material! ý to the success of the program. It seems to me that the present legis ation is sound in using this

experience so as to provide for such assistance in a cooperative housing program.

We should recognize too that at the time REA was created there were in existence less than 50 electric cooperatives. At present there are about 100 housing cooperatives and the fund of experience in construction, management, and maintenance is comparably much greater. Even with this fund of experience, however, the provision for technical assistance would contribute greatly to the success of the program.

If it is necessary to cite precedent for the creation of the National Mortgage Association for Housing Cooperatives—let me point to the Federal land banks, production credit associations, and particularly to the banks for cooperatives which have done so much for American agriculture. You gentlemen are very familiar with all those institutions and their operation, so I will not go into detail.

The experience of cooperatives in meeting the needs of the people is ample evidence that this proposal does not plunge us into untried or unsuccessful fields. Nor would I say socialism, as has been said to this committee.

The majority of American farmers are members of cooperatives and rely on them to cut costs and increase income, increasing the welfare-if I may use the word-of the American farm family.

If there were time I could give you an account of the great success of our farm supply cooperatives, our marketing co-ops, rural electric cooperatives, credit cooperatives, our insurance organizations and other forms of cooperative free enterprise.

Your subcommittee, composed of Senators Sparkman and Flanders, my own Senator Bricker and Senator Freer have just recently returned from a study of cooperative housing in the Scandinavian countries and will give you a more complete and up-to-date report than I can. My last trip over was in 1946, in which I investigated the cooperatives as well. I was greatly impressed, as you were, with the accomplishments. At that time the cooperatives in Norway and Denmark were doing more than one quarter of all the new housing. And in Sweden one central cooperative, the HSB had built 40,000 dwellings, equivalent to a million of United States population.

This would be equal to nearly a million homes in the United States. The apartments and houses were neat, clean, modern, livable homes, at very reasonable costs.

In the United States, our experience is more limited. But there are about 100 cooperative housing projects owned by 30,000 families. They have been built in the face of hardship and without friendly assistance or guidance from the existing housing agencies.

The best known of all our housing co-ops are those sponsored by the Amalgamated Clothing Workers Union. Their first project was completed in 1927. They have gone through a great depression and a world war. The success of operation has been so great that when present construction is completed there will be housing facilities for 2,500 families in projects costing $20,000,000. Monthly housing costs are equal to rentals of $15 per room or less—much lower than any comparable housing in New York.

Private capital has welcomed the opportunity to participate. The fact that the people like it is demonstrated by the fact that after 22 years of operation more than 70 percent of the original members remain in the project.

This committee would find it very profitable, I believe, to ask one or several of its members to visit the Amalgamated cooperative housing projects in New York if you want concrete evidence of accomplishment here at home particularly in the urban areas.

Another New York project of great interest is the Queensview project which has on its board of directors such distinguished citizens as Gerard Swope, Thomas J. Watson, Jr., Lewis H. Pink, Beardsley Ruml, David Sarnoff, Henry Morgenthau, Jr., Bernard F. Gimble, and others. Their presence is ample refutation to the charge of socialism leveled at cooperative housing by representatives of the real estate interests.

As Raymond M. Foley said here Thursday:

The cooperative principle is as old as America. Cooperative housing and other nonprofit housing offer great promise of achieving cost reductions because of savings immediately obtainable in operation and maintenance, and potentially in construction costs.

The type of nonsubsidized aid provided in the Maybank amendment to the Sparkman housing bill could break the bottleneck in which some 8,000,000 United States families now find themselves. The extension of the REA principle to housing is the way to provide good, adequate housing at a reasonable cost to the middle income families of America.

This program can be a stabilizing influence in the United States economy and will be looked to with great hope by the forgotten families in this housing crisis. We think this is the way to preserve and extend the great American principle of home ownership.

Now just one other matter, gentlemen. In order to try this thing out and to be sure we know what we are talking about, and because we are faced with a situation in which the management of our National

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Cooperative Farm Machinery Co. is faced with a situation where they do not get adequate help to come into Bellevue, Ohio, to work in a machinery company because there were not houses there, we undertook ourselves, and our insurance company set up what we called a Peoples Development Co., and Mr. Frey, who was with us all through our REA development, joined us, to see what we could do with housing.

We would like to leave an exhibit with you, because we think we have got something. This, we grant, is new. We are only building 38 houses. We have in mind another 151, but we think we have already found out enough on a very small basis that we can do a better job than has been done in any of the prefabricated houses that we have heard of anywhere.

It is a little community between Toledo and Cleveland, and we have had these houses appraised by outside appraisers who give a record of excellence in every place, and I would just like to read you what these houses have that the average house we do not think has. I can do it very hurriedly.

All poured concrete casements; No. 1 fir framing lumber throughout; insulated ceilings of 4-inch rock wool and insulated of 2-inch expanded tile; forced air gas fired furnaces; automatic; oak hardwood floors, factory-treated fiber; storm doors and screens throughout; weather stripping; cream-finished bathroom accessories; copper water plumbing flues; ventilator fan in the kitchen, scientifically planned for efficiency; steel girders in the basement; adequate headroom, and small basement walls permit recreation room; outside basin under drain receiver; all garage walls finished with plaster, gypsum board, overhead garage doors, drain tile laid around the foundations. Lots seeded and sodded and provided with bushes and shrubs. A quantity of trees planted over the whole development, and street curbs, sidewalks, utilities and other improvements completely paid for,

Senator BRICKER. What was the average cost of that?

Mr. LINCOLN. This is entirely an experiment, Senator, and we would just like to pass out those to the committee.

What we would like to point out is, what the houses are. vide different values—$7,200, $11,500—then in the third column you will notice the cost per cubic foot.

Senator FLANDERS. Which are yours?

Mr. LINCOLN. The first four, the Peoples Development Co. We think when we go into cost accounting we know what we are talking about, and we are sure these figures will stand up and include 4-percent money, 4 percent interest on our money, and you see, we have a cost per cubic foot of 69, 66, 66, and 63, as against prefabs, which happen to be made in Columbus, of 85, 76, 71, and 71.

Now, when you look over the record of what we have got, those costs, we just think we have got a pilot plant there that will give ample evidence that it can be done.

It is that cooperative housing can can be done, and I would like to tell the committee that our board of directors has pressed themselves as being willing for us to go ahead with this Peoples Development Co. to serve any cooperative groups in our area, anywhere, because we think, just as we said at our luncheon, Senator, there needs to be a coordinated agency with people who have got cooperative experience, and all your experience has been cooperative, backed up by this kind of engineering, architectural and otherwise.

We pro

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