and wood. Reinforcing the window casings, putting in new pipes, retiling the halls, and renovating the cellars; bringing the building up to a modern, presentable, homelike house, has, of course, brought a great change and has brought tenants. These things have added to the pleasure and convenience of the tenants, and has resulted in the protection of the lives and the health of the tenants.

Senator BULKLEY. Where is this picture taken?

Mr. SANDER. At 335 and 337 East Thirty-sixth Street, New York City.

Senator FLETCHER. Have they elevators?

Mr. SANDER. The problem that we are faced with is to meet the wage income of the small-wage earner. The provisions of the act. provide that the home owner of the individual dwelling is today receiving protection up to a borrowing capacity of $2,000 provided he can qualify.

Getting away from the subject I am discussing for a moment, the report of the Federal Housing Administration shows that nationally only 102,000 applications have been filed with the Government; $42,000,000 has been invested to date during the period of its activity, throughout the Nation.

Senator FLETCHER. The question I asked was whether there are elevators provided in these buildings?

Mr. SANDER. No, sir, Senator; there are no elevators. There could not be in such buildings, because these are buildings taking care of the small-wage earners. Those are the ones we are taking care of and proposing to take care of. There could not be elevators under those circumstances. These are walk-up apartments. The room value, after doing away with the carrying up of ice, coal, and wood, and servicing with the latest home accommodations, has only been increased $150 per room. That is the most of doing this per room. And for a three-room apartment in a slum area that loan can be amortized on such a basis that it will allow the small-wage earner to get the advantage of these rooms at a reasonable rent which will cover the cost of the renovation in the house on the part of the owner. The small-wage earner can rent that room for $5 a month, so the man making $15 a week would get a three-room apartment for 1 week's wages out of the month.

Now, gentlemen, by undertaking such work as this we not only take care of the small-home owner and the small renter, but we will benefit the man in the rural districts so he can be enabled to borrow for his single home. We can put multitudes to work.

The multiple dwelling houses in New York City have a value of $200,000,000. When you take the small-home owners who can qualify for loans in New York City the amount will be under $100,000,000. There are 42,000 mechanics in Queens County, New York City, unemployed for the past 3 years, owning single homes. Under the National Housing Act to date there have only been received 103,000 qualified applications for loans totalling $42,000,000 covering the entire country. We have 160,000 single homes, and, as I said, 42,000 homes in Queens County, of which 80 percent require replacement, reconditioning, and renovation, the owners of which have been unable to do so because the men are unemployed.

I feel that the conditions which exist in the large cities have not been brought before the House of Representatives and the Senate in their true form, and if you will permit me another minute I will cite you some figures and facts to prove to you that if we really get at this in a practical, constructive way, we are going to cause the end of charity operations which have developed into the most beautiful racket you want to look at. There are men in office conducting these charity operations that are voting themselves higher and higher salaries, and some of them are holding 2 or 3 jobs. All that we have on record. I am not speaking of speculation or theory. The proof is there, printed in the press, and you can read it. Back in 1932 there was a million dollars a month being expended for charity in New York City, and now it is running about 20 million dollars, or this charity operation is running over 20 million dollars a month. And we have the facts and figures showing the conditions. We have spent over a half a billion dollars in the course of the depression in New York City for charity in addition to that private institutions' donations running into the hundreds of millions. And we have gotten nowhere.

Senator STEIWER. When you say "charity ", do you mean public relief or are you talking about something else?

Mr. SANDER. I am talking about public relief. What I wish to bring out is that during the course of that operation, due to the limited amount that has been distributed, there have been over 600 thousand dispossess issuances in the city of New York. Two hundred and twenty-five thousand families are now living-in with relatives. The landlords in New York City in 1920 were paid up in their taxes and assessments, their rooms were filled, they owed no money to the city. Today they owe over 200 million dollars in delinquent taxes. Now 225,000 families are without homes or rooms. There is a need for 400,000 new rooms in New York City, and we can get them provided we can go in and rehabilitate and renovate the houses that are there. It is logical to put a man to work by which he can get away from living with his relatives and in-laws that he is now living with. If we can get this work started it will not only relieve the families in the slum districts and other districts in New York, but it will benefit industry throughout all the United States and it will mean a great benefit by reason of the enormous employment which will be created, using this rehabilitation field as the basic foundation to do it.

Thank you.

STATEMENT OF ISAAC HYMAN, REPRESENTING THE BRONX TAXPAYERS' ASSOCIATION AND COUNCIL OF REAL ESTATE ASSOCIATIONS, NEW YORK CITY

Mr. HYMAN. Mr. Chairman and gentlemen, I want to touch two phases of this question. One of the Senators has asked whether we have any amendments to suggest. We have not. We are just groping around. We do not know just where to reach up to get the relief we are seeking. We have gone over to the Federal Housing Administration. The Home Owners' Loan Corporation is helpless. The R. F. C. has no funds for this particular purpose.

When this bill, H. R. 6021, came up we tried to study it to see how we could amend that, and our suggestion is-of course, it is rather broad and I do not know whether it could adopt it-to establish agencies throughout the country on the same principle as the Home Owners' Loan Corporation, where applications for these rehabilitation funds can be made and the money lent directly by the Government, and then the Government can raise the money either through a bond issue or through the banks by getting the banks to put in a fund where the Government would guarantee up to 100 percent. We make some such suggestion as that to avoid going into the banks or financial institutions, as this bill provides, for the loan. Under this act we have to go to the bank or some financial institution and make application for a loan. Now, they do not lend us the money because of our security of the real estate, but solely upon a business basiseither endorsements or some kind of Federal security. They do not loan it because we own real estate because that they regard as absolutely without any assets. They do not consider that liquid. They do not consider it as any security at all. You can go into a bank and say, "I own this and this property." They will say, "Have you any other security?

After all, if we rehabilitate the property and put it into condition, that has got an equity. It is a potential asset. We do get a return on the investment. That return we are willing to pay to the Government to rehabilitate.

At the present time the Government does not have taxes enough, the city does not have taxes enough. We do not have funds to rebuild. Our tenement commissioners are boarding up a number of our houses, forcing us to vacate them. It is a total loss to the community. The people have to go into other places to live. The people are doubling up, and so forth. If we get the funds it means that the city of New York as well as other cities where those conditions exist will benefit from it-they will get their taxes; people will have homes.

Now, we have got to avoid the matter of going into a financial institution on our knees and saying, "Please let us have some money. Please lend us some money." We cannot give them any collateral. But the moment we rehabilitate, that is sufficient security. We can either make an assignment of rents to the Government or to the agency providing the money, to make sure that the funds will be repaid, or some other equivalent protection. The owners do not seek any profit from this property until the rehabilitation loan is repaid, because as soon as that is repaid, then they begin to get the benefit of it. For he must find some means of doing that.

My thought was that if we cannot establish these agencies throughout the States or the cities, then to have something else. This act provides for corporations organized under State laws. Under State laws, limited-dividend corporations can be created to create low-cost houses, but in a small project of this kind, a rehabilitation project, it would not pay to come under a limited-dividend corporation.

It would have to be a smaller unit. If owners of a block could cooperate and form a little unit of their own, some cooperative idea, and then get the loan from the Government, or through some agency created by the Government, to rehabilitate that block of houses, and as a limited dividend corporation, that would be some relief. Or

some kind of an agency. Or create a mortgage company or some kind of financial corporation for $100,000, or a small unit of that kind where groups of people can get together and create a fund and then lend each other funds like the credit-union proposition. Not limited to the small fund. To be in larger amounts. If we could establish something like that in this act, it would be a good thing. Of course, the way the bill reads now I cannot find any way of amending it. It would have to reframed, and you gentlemen are more familiar with that than we poor men are in New York.

Senator BULKLEY. We are under some pressure to get a bill through, and I do not know whether we will be in very good shape to try to devise an entirely new system. If you will submit a specific amendment we will be glad to take it under advisement and see whether anything can be done.

Mr. HYMAN. If we can get the aid and assistance of some one who can tell us just how to frame it to be within either this act or a modification of it we would be very glad, because this H. R. 6021 refers both to the Home Owners' Loan Corporation and to the Federal Housing Act. It refers to both of them. What we have in mind is to establish some agency, either one of those or a new unit, some new agency, to get the relief we seek. Now, of course, we would have to have some assistance on that. For instance, you are amending section 2 of the National Housing Act by saying that loans may be made on apartment houses. And then, of course, a period of repayment must be a sufficient length of time to enable the owner to ger the income from the property and repay it.

The Prudential Insurance Co. is lending, according to the newspapers, or are going to make loans, on first mortgages for a period of 20 years' repayment, on interest basis ranging from 4 to 512 percent, according to the amount of the loan. Forty percent is 4 percent, 50 percent is 42 percent, and so on up the line. We ask for some similar relief; the 20-year period, or 16-year period, the same as the building and loan associations, with a fixed amount of money to be repaid monthly; not a graduated rate but a fixed amount; and if the loan is small we could repay it in a shorter period. If the loan is large, we want a longer period, consistent with the income of the property. If you gentlemen can tell us just how we can make suggestions to amend this bill, why we would be glad to stay here and take up your time.

Senator BULKLEY. Frankly, I doubt whether you have worked out a plan with sufficient definiteness to be up to the point of draftsmanship, but if you can get it a little more definite we would be very glad to take it under consideration.

Mr. HYMAN. Could you gentlemen assist us by giving us some lead or some idea as to what we can do?

Senator BULKLEY. We will see what we can do about that.

Mr. FAHEY. Mr. Chairman, it occurs to me that it might be well to explore the possibilities of the new mortgage set up of the R. F. C. in relation to this particular problem. I see no reason why the R. F. C. mortgage plan could not take care of this.

Senator BULKLEY. I think that is quite possible.

Mr. SANDER. We have had that suggestion from Mr. Ferguson. Mr. FERGUSON. Yes; I made that suggestion to them a few moments ago.

STATEMENT OF CHARLES W. EIDT, PRESIDENT OF THE REAL ESTATE OWNERS ASSOCIATION, NEW YORK CITY

Mr. EIDT. Mr. Chairman, I am president of an organization which represents some three or four hundred members who are owners of tenement houses or the multiple-family houses, and we feel that quite a bit has been done by the Government in taking care of banks, insurance companies, and railroads and others, and the home owners, but that the owners whom we represent, the owners of the smaller houses, or the wage earners, have not received any consideration. We feel that if something can be done along the line spoken of by Mr. Sander and by Mr. Hyman, that this rehabilitation can go on, why we would be providing suitable quarters for the wage earners, the men of the low wages.

Under the N. R. A. the minimum wage in the North here is $14. Under this new bill the wages are going to be $50 a month, or $12.50 a week. There has nothing been done in any way by the Government to produce homes, so the only outlet for the man who cannot afford to spend more than 25 percent of his monthly wage for housing would be this rehabilitation work on these older houses.

Another aspect of it would be that we would stabilize real estate. That must be brought about, because at present values are continually dropping, and we will soon reach the point where the bonds or the indebtedness will go to such a point that they will lose their value. The land values may go down to such a point that the investmentthat is, the bonds or other evidence of indebtedness-will lose their value. And we do not know what will happen.

For instance, in New York City we have an assessed valuation of 17 billion dollars. Under the law we have a 10-percent leeway of issuing bonds of indebtedness against it. If these values continue to drop, this evidence of indebtedness or these bonds are going to reach such a point that institutions like our savings banks, or life-insurance companies, our fiduciaries, executors, and guardians who are permited by law to invest in bonds, are going to find that their investments are going to fade away.

We feel that if we can get this assistance in rehabilitating real estate so as to stabilize, through this method, the rental for these older houses, we will be accomplishing something.

Furthermore, it will bring into being the work of the very man who needs the assistance today, and that is the work in the building trade. There is absolutely nothing doing there now. They are today on relief, and we have got to do something to revive industry, and if we put them to work it is going to help the heavy industries that also need the business, so as to bring back the prosperity we are all wishing so much for.

The other gentleman_explained how this bill could be amended to meet that. Of course, I am not ready to go into that. All I wanted to paint to you was the picture of the situation as we find it.

I thank you very much. We have another gentleman here who represents one of the organizations interested in this matter who would like to speak for a moment.

Senator BULKLEY. We will be glad to hear him.