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TABLE 13.-Average value of owner-occupied properties-36 selected cities, 1936, 1933, 1934-Continued

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STATEMENT OF SULLIVAN W. JONES, REPRESENTING CONSTRUCTION LEAGUE OF THE UNITED STATES, WASHINGTON, D. C.

Mr. JONES. Mr. Chairman and gentlemen, my name is Sullivan W. Jones. I am representing the Construction League of the United States, with headquarters in the National Press Building, Washington, D. C.

Senator, I have a statement here, which I will not take your time to read. I will leave it with the reporter.

Senator TOWNSEND (presiding). Without objection, it will be placed in the record.

(The statement referred to will be found at the conclusion of Mr. Jones' statement.)

Mr. JONES. I merely want to say that the Construction League of the United States is the only national organization in the construction industry as a whole. It is an association of associations. The associations themselves represent something in excess of 100,000 employer units.

I am speaking only to section 26 of the bill, which raises the limit of loans insurable under the Housing Act, title 1, from $2,000 to $50,000. On behalf of the league I wish to record our earnest support of that amendment. We believe that it will generate many hundreds of millions of dollars of construction work, and will contribute very largely toward recovery.

In that connection I would like to emphasize the fact that title 1 is a recovery measure. It expires on Decemger 1, 1935. It was designed and conceived to stimulate a large volume of construction in small items. It has already accounted for some $250,000,000 worth of construction, and I believe that by raising the limit from $2,000 to $50,000, to cover apartment houses, hotels, office buildings, commercial buildings, hospitals, and so forth, we will add several hundred millions to the total volume before the end of the year.

Senator TOWNSEND. Then, I take it you are satisfied with the bill as written.

Mr. JONES. Yes. I appear merely to support that amendment.
Senator TOWNSEND. Thank you, Mr. Jones.

(Mr. Jones submitted the following matter for printing in the record :)

STATEMENT OF SULLIVAN W. JONES, REPRESENTING THE CONSTRUCTION LEAGUE OF THE UNITED STATES, REGARDING SECTION 26 oF H. R. 6021

The Construction League of the United States, on whose behalf I am appearing before you today, is the national organization of the construction industry. It is composed of 20 associations in the designing, contracting, and manufacturing phases of the industry, and its total representation through these groups approximates 100,000 employers.

The league wishes to give its hearty endorsement to section 26 of H. R. 6021 which is now before you. This section raises the limit on individual insured loans for modernizing under the National Housing Act from the present $2,000 to $50,000, extending the privileges of Federal housing insurance to modernizing loans on commercial, institutional, and industrial properties and to the installation of new permanent equipment and machinery.

The construction industry has great faith in the provisions of the National Housing Act. We believe that the underlying principles are sound and that they will be productive of a substantial amount of business for the 150,000 employing units of the construction industry and their 41⁄2 million employees; such activity will, of course, be a tremendous stimulus to business in general, since construction is one of the principal bulwarks of our economic structure.

As you know, construction has been in a desperate situation for the past few years. The Congress has temporarily alleviated the plight of the industry through the Public Works Administration, which has provided emergency employment for thousands of workers. This public construction has been practically the only activity in the industry since the depression began.

Private financing had dried up to a mere trickle, and lending institutions were loathe to make construction or, in fact, any long-term loans. We do not, of course, shoulder any blame on financial interests for this situation. Their obligations to their depositors necessitated such action.

The result of this construction stagnation was that the backlog of all types of private construction kept building up, until at the present moment there is a tremendous volume of business awaiting financing and impetus.

Into this situation came the National Housing Act a year ago. Its basic principle was the stimulation of construction activity through the guaranteed lending of private funds with work done by private agencies. This principle aimed toward sound recovery in that it created no artificial market, but that it stimulated the normal channels of the industry.

The Federal Housing Administration campaign on modernizing has resulted in $250,000,000 of work, both in insured loans and in noninsured stimulated business.

Under title II of the Housing Act provisions for new home buildings should release the jam log this spring and witness a great volume of residential building under sound methods of financing.

In addition to the volume of residential work which has been held up during the past few years, a great deal of industrial and commercial modernizing has been awaiting financing. Depreciation of large structures and their fixtures has hampered efficiency and increased operating costs.

It is at this situation that section 26 of H. R. 6021 is aimed. The construction industry firmly believes that the underlying principle of the use of private funds with Government insurance is fundamentally sound and that increased employment and business will be the result of the application of the principle. Accordingly, the Construction League urges that you take favorable action on section 26 of this bill in your report to the Senate.

CONSTRUCTION INDUSTRY EMPLOYERS REPRESENTED BY THE MEMBERS OF THE CONSTRUCTION LEAGUE OF THE UNITED STATES

The Construction League of the United States is composed of 20 national associations of the construction industry, which are the only representative organizations in their respective branches of construction.

This industry does $8,000,000,000 of work in a normal year, employs 2,400,000 men in the direct operation on the job site, and another 2,100,000 men in factories, mines, distributing agencies, and the like.

The employer and professional membership represented in the league totals 98,554, divided among the following national associations:

American Water Works Association---.

Cement Gun Contractors Association___

American Institute of Architects-

American Institute of Steel Construction (companies)
American Road Builders Association.

American Society of Civil Engineers.

Associated General Contractors of America....

Contracting Plasterers' International Association__

Heating, Piping, and Air Conditioning Contractors National Association
International Society of Master Painters and Decorators____

3,061

173

4,000

14,900

2,374

2,373

8

900

1, 124

5,000

Mason Contractors Association of the United States and Canada__
National Association of Marble Dealers__.

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National Association of Master Plumbers of the United States.
National Committee on Building Congresses.
National Electrical Contractors Association_
National Elevator Manufacturing Industry..
Portland Cement Association (mills) --

The Producers' Council_____

Roofing and Sheet Metal Industries Conference__

Tile and Mantel Contractors Association of America_.

3, 464 315

STATEMENT OF W. A. SNOW, REPRESENTING ASSOCIATED GENERAL CONTRACTORS OF AMERICA

Mr. SNOW. Mr. Chairman and gentlemen, my name is W. A. Snow.. I am representing the Associated General Contractors of America. I am a member of the staff of the Associated General Contractors of America, appearing here before you to present a statement signed by our managing director, Mr. E. J. Harding. This is a very brief statement, and I would like to read it into the record.

Senator TOWNSEND. Proceed.

Mr. SNOW. First, let me say that what is written here and is presented applies equally to section 19 of Senate bill 1771 and section 26 of H. R. 6021, both of which sections have to do with providing for insured loans up to and including $50,000 on commercial structures. [Reading:]

A STATEMENT OF E. J. HARDING, MANAGING DIRECTOR OF THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC., WASHINGTON, D. C.

The membership of our association is comprised of some 2,400 general contractors, located throughout the entire United States.

We have enthusiastically and sincerely extended our support to the carrying out of the purposes and objectives of the National Housing Act and in the past months have observed with a great deal of satisfaction a material increase in building-repair activities, as stimulated by the energetic adininistration of title I of the National Housing Act.

Indeed, the construction industry, normally the second largest industry in the United States, and which prior to 1930 enjoyed an appreciably large annual volume of business in private construction, has for the past few years experienced practically no such private business and has had to depend upon Public Works construction for its livelihood.

With the advent of the National Housing Act, our industry was afforded a renewed market for its services, its merchandise, and supplies. Contractors who had been without work for many months and even years were now afforded opportunities to bid upon work, even though the dollar volume of

1 Figure of December 1932. Later data not available.

2 Includes member companies and membership of two organization members. Invested capital of these firms is approximately $1,100,000,000.

each project was comparatively small. Eagerly they tendered their bids and gradually many contractors once more became busily engaged, employing workmen and purchasing building materials.

Thus we have a steadily increasing market for our industry in the repairing and renovizing of homes which unquestionably is a material contribution to the much-desired recovery of industry.

Your committee has now before it for consideration a bill designated as S. 1771, and entitled "A bill to provide additional home-mortgage relief, to amend the Federal Home Loan Bank Act, the Home Owners' Loan Act of 1933, and the National Housing Act, and for other purposes."

Section 19 of this proposed bill, if enacted into law, will permit the Government to insure loans made by private industry up to and including the sum of $50,000 for the purpose of financing alterations, repairs, and improvements upon structures used for commercial purposes. With the approval of such new enabling legislation, commercial enterprises will be able to accomplish material physical improvements to their properties.

These improvements cannot help but favorably affect such businesses by raising the morale of their personnel, very probably stimulating increased sales of their products and protecting original investments in their physical properties.

In addition, a heretofore dormant market for construction will be reopened and with it will come increased pay rolls, increased purchases of materials and commodities, all of which will further speed up the rate of industrial recovery.

We earnestly request your favorable consideration and early approval of the provisions of section 19, Senate bill 1771, as it is now written.

Senator TOWNSEND. Thank you, Mr. Snow.

EDW. J. HARDING,
Managing Director.

STATEMENT OF A. J. HETTINGER, JR., SECRETARY, DURABLE GOODS INDUSTRIES COMMITTEE

Mr. HETTINGER. Mr. Chairman and gentlemen, my name is A. J. Hettinger, Jr. I happen to be secretary of the Durable Goods Industries Committee, and also speaking for the Machinery and Allied Products Institute. My address is the Cosmos Club here in Washington.

I am very much of an amateur at this thing, and my statement will be rather short.

I am speaking with reference to section 26 of the bill, the proposal to make loans up to $50,000 on commercial and industrial projects, and projects of that type, as one or two of the speakers have already mentioned.

I am going to speak very frankly. I do not believe the thing is any panacea that is going to run to the tremendous figures that we might like to see in this country, until we have some kind of a basis for sound recovery. I hope we are in the initial stages of it, but we have not gone any tremendous distance.

As I see it, actually we are wrapped around a sort of vicious circle at this time in the recovery movement as a whole, and I think this is thoroughly germane-we have 10 million unemployed and 20 million on relief. I do not mean 20 million families, but 20 million represented. Under those circumstances we have economic and social instability. Under those circumstances we have what the President has termed a quarterback" philosophy, which I suppose will be termed enlightened opportunism." Under those conditions it is literally impossible to make very many long-term commitments. We

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have short-term commitments, but not long-term commitments. If I have a chain store, I am perfectly ready to spend my money, because it is coming back fairly soon, and I have the opportunity to decide whether to spend it again or whether to keep it.

But when it comes to a long-term commitment, whether it is new construction, whether it is machinery, or whatnot, I am, to paraphase the expression used by Bacon two or three centuries ago, giving a hostage to fortune. I am taking some liquid capital or credit and putting it into something where it is tied up, where, the moment I put it in, it becomes a liability rather than an asset, except insofar as it can earn. I have to pay interest on it. I have to allow for depreciation, taxes, and insurance. I know that if I have made a mistake, it is not going to produce. I am likely to be pretty cautious about it.

So long as we have that fear of long-term commitments we will remain on a consumers' goods economy. So long as we remain on a consumers' good economy, we have a defensive recovery. We have substantially our 10 million men unemployed because we have not corrected that unemployment since the summer of 1933. We have 20 million on the relief rolls accelerating, and the same need for your quarterback" philosophy. You have gone around the circle, and you can go around it just as many times as you want to.

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So, as an honest man, I would have no right to say that I think that this provision is any cure-all, or even an approximation to a cure-all. I do not believe that we will get very far, other than a slow, creeping, defensive recovery until we generate long-term confidence. We have our idle men, our idle money, or work to be done, and we have every essential for aggressive recovery except long-term confidence, and that does not exist.

Senator TOWNSEND (presiding). Mr. Hettinger, have you any specific recommendations for the bill that will remedy it in accordance with your views?

Mr. HETTINGER. The recommendation I have is the adoption of what is right in the bill, the $50,000 loan, insured, for commercial and industrial purposes.

Senator TOWNSEND. Then, I take it, you favor the bill as it is written.

Mr. HETTINGER. That is the only particular section that I would be thoroughly competent to speak on. The Machinery and Allied Products Institute made a decently thorough questionnaire survey. No questionnaire survey has any right to be treated with too much respect, but this was a decent one.

On the basis of a moderate-sized sample, the results that they obtained, if applied to a much broader base-and when you apply a moderate sample to a broader base, you run into an element of error that is appreciable-would indicate an estimated potential demand for machinery of approximately 182 billion dollars. Roughly a third of that would be in the electrical field, and 40 percent in the machinery and foundry field. I have no thought that any substantial fraction of it will ever turn from potential to actual, in the light of an absolute lack of long-term confidence. The forces at work there would be twofold. The man who has money very frequently is afraid to invest it in his business. The man who has no money has

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