(The following was later submitted for the record :) Government fiscal commitments under General Housing Act 1 The columns under this heading indicate year in which contract to make subsidy may be made; payment of subsidy may actually not be made until later fiscal year. 2 In outstanding insurance and commitments to insure. The second $1,000,000,000 to be available only with approval of the President. 4 The second $250,000,000 to be available only with approval of the President. The authorization consists of an initial authorization of $10,000,000 in fiscal 1949, increasing by $200,000,000 in fiscal 1950, and by a like amount in fiscal 1951, 1952, 1953, and 1954, respectively. Funds not to be disbursable, however, for use in purchase of land until fiscal 1950. This subsidy is in form of nonrecurring capital grant. Funds not to be disbursable, however, for use in purchase of land until fiscal 1950. 7 In form of annual contributions limited to periods not exceeding 40 years. The authorization consists of a $25,000,000 initial authorization in fiscal 1949, with additional authorizations of $50,000,000, $75,000,000, and $100,000,000, for fiscal 1950, 1951, and 1952, respectively. Senator ROBERTSON. Do you recall what was the first Federal aid to States program? Mr. FOLEY. With respect to housing, you mean? Senator ROBERTSON. Any kind of aid. The CHAIRMAN. Was it not the bill which provided for expectant mothers about the year of 1915? Senator ROBERTSON. It was the Towner Maternity Act, but I was under the impression that the aid to public roads in 1916 was about the same time, and that the maternity act was in 1917, as I remember. In my recollection that was the commencement. My predecessor in the House, Harry Tucker, made a speech against that road bill on the ground that the Constitution prohibited it, and he claimed that the Congress was proceeding under the general welfare clause, and the general welfare clause did not authorize the Congress to build roads. The proponents of the bill, though, claimed that the Congress had the power to build post roads, and the Congress had the power to make war, and that those two powers combined together were justification for the Congress to build roads in the State or help to build them. Of course, we know how the program finally turned out. The Bureau of Public Roads would not let the money be spent on farm-to-market roads where the post roads were needed for rural routes. They spent them on the thoroughfares, and the people in the cities were already getting their mail; and you know you cannot move even 5,000 troops now over a congested highway, much less a division, and that no highway builds bridges that would even take a 40-ton tank, much less an 80-ton one. We frankly are building roads, are we not, just building roads? Do you remember the first appropriation that we made for that program in 1917? Mr. FOLEY. I do not, Senator. I was not on this scene at that time. Senator ROBERTSON. It was $5,000,000. Do you know the current appropriation for that program? Mr. FOLEY. I do not. Senator ROBERTSON. It is $500,000,000. Notwithstanding the fact that most people think that the best way to build a highway is by letting those who use it and wear it out pay as they go by paying a gasoline tax through their motor fuel. But we are committed, as you know, and it was stepped up during the depression as a means of giving employment; and we now have a program that started out as a $5,000,000 program amounting to $500,000,000. What percentage of increase is that? Mr. FOLEY. It is very large. Senator ROBERTSON. If raised to $10,000,000, it would be 100 percent? Mr. FOLEY. Yes. Senator ROBERTSON. If you raise it to $500,000,000, it would be more than 5,000? Mr. FOLEY. It is 100 times as great, and that you can figure out in percentages. Senator ROBERTSON. I asked that question because my grandfather used to tell me when I was a boy the tendency of everything is to be more so; and the article I have just quoted from in the Congressional Record undertakes to give some estimate of where this public housing program will eventually end. I want to read you his figures, and I want you to tell me whether they are correct or substantially correct or wholly in error. He said, "First, let us find out the cost of houses of the lower third." Now was he correct in assuming that you were starting out to take care of the lower third? Mr. FOLEY, I think not, Senator, although I do not know exactly what he is meaning by the "lower third." Certainly this bill does not contemplate taking care of the lower third. Senator ROBERTSON. I quote from his article. Based on the costs set forth in TEW bill and figuring the number of housing units at one-third of the Nation's units of 37,500,000 in 1947, or a conservative figure of 12,000,000 units, it is found that by dividing 12,000,000 by 500,000 we must multiply the cost of TEW bill by 24. Now, he says that the TEW bill will cost $7,200,000,000; and here is the way he arrives at that: The Taft-Ellender-Wagner bill, which is offered for the public housing as a housing cure-all for the housing problem, according to one of its sponsors, Senator Taft, will not cause any housing to be built for approximately a year after its enactment, and it will cost the Federal Government, by Senator Taft's admission, in direct subsidies for slum clearance and public housing $7,200,000,000 during the first 45-year period of its operation. Furthermore, it will only produce 500,000 publicly owned houses. The CHAIRMAN. Will you give that citation in the Congressional Record? Senator ROBERTSON. It is the Congressional Record of March 31, and the page is A-2116. The CHAIRMAN. And the author again is who? Senator ROBERTSON. It was inserted by Representative Ralph W. Gwinn, of New York, and the author is John H. Deckman, connected with the Home Builders' Association of Metropolitan Washington. Those are the figures that he quoted, presumably for accuracy, on the original cost. Then he goes on to say $7,200,000,000, by 24, equals $172,800,000,000. Then he adds that $172,800,000,000 thus becomes the cost to the Federal Government for the first 46 years to house the lower third. To this cost must be added the cost to the local taxpayers for local tax exemptions, or local grants to the public housing authorities. This figure he said at the local level can be conservatively estimated from past experience at well over $50,000,000,000 for a 45-year period. The CHAIRMAN. What is that quotation, that "figures do not lie?" There is another line to it. Senator ROBERTSON. I have heard "but those who figure, cannot." To continue: To arrive at the total cost to the taxpayer to house the lower third of the population, it can be safely stated that the costs will reach approximately $225,000,000,000 at the end of the first 45 years of such a program. If the lower two-thirds of the population is to be housed, as desired by the public housing zealots He is not talking about you, is he? Mr. FOLEY. I would not think so, not if that is his measure. The CHAIRMAN. I might say to the Senator that Mr. Gwinn that he mentions from New York, I have read some of his statements and heard some of his speeches and conversed with him across the luncheon table recently. If there is one man in Congress that is against the Federal Government doing anything for anybody in the way of States betterment, he is the man. And of course, he is reaching out to substantiate his point of view. Let me say to my friend, Senator Robertson, about this proposition of the Federal Government aiding the States, one of the pleasantest features of my official life was a journey to his own State of Virginia, the fair city of Richmond, the Jefferson Hotel in the ballroom some time ago where they had a meeting of the National Highway Commissioners presided over by a certain distinguished gentleman of that city and the then Governor, extolled the Federal-aid program for highway building in the most glowing terms-I am speaking of Governor Price and I enjoyed it very much, indeed. I am an exponent and think you are to, of Federal aid for road building in this country. Is that right? Senator ROBERTSON. I voted for all of them. And it has been wellspent money because while they did put the restrictions on the through roads, they let the States handle the money. The CHAIRMAN. Yes; and we also have some good farm-to-market roads now-classified roads. Senator ROBERTSON. Yes. You and I helped to write that into the bill and we earmarked a portion of it that had to be spent because the Bureau of Federal Roads would not let us do it, and they were the people most in need of help and most who could best justify the constitutionality of the action taken. The CHAIRMAN. It is a good thing that you and I were around. Senator ROBERTSON. Certainly. You and I have supported that program. I want to support all the other good programs that I can, provided we are going to be able to finance them. But I am just trying to analyze these figures of what this particular one might cost. At that point I want to add that the witness that I am quoting said, in conclusion of that sentence: "Then the cost become $450,000,000,000." Now, what was the assessed valuation of all the property in the United States in 1932? I think it was $400,000,000,000. Under inflated values they now assess us to be worth $600,000,000,000. The CHAIRMAN. You know this only contemplates the building of 500,000 homes. The figures you give would be about 24,000,000 homes. Senator ROBERTSON. No. I say that this man says that it is for the lower one-third. The zealots want the lower two-thirds. If it is the lower one-third, of which the 500,000 would be the start, it would be only $172,800,000,000, plus the $50,000,000,000 that the localities would have to furnish in lieu of taxes and other contributions. But if we went to the two-thirds then it would be $450,000,000,000. That is the reason I asked Mr. Foley, because we are bound to face this issue in the Senate. "You are starting something; where are you going to end?" We must be ready to answer it. The CHAIRMAN. Let me answer it. Senator ROBERTSON. I do not think we could get a better witness. The CHAIRMAN. Thank you. The point I make is this: The distinguished Senator from Virginia is a very thoughtful man and a student of these things, and I pay tribute to his ability, sincerely so. He is demonstrating here the danger points as he sees them through the eyes of Mr. Gwinn and a certain gentleman whose remarks were inserted in the Congressional Record regarding certain facts as to the program. The total cost of this public housing and slum clearance would be about $5,000,000,000 spent over 30 or 40 years. Let me give you a little illustration. During World War II, which has just closed-or has it closed-we were spending at the peak, to kill men and destroy capital property forever, $12,000,000,000 every 30 days. What we contemplate here in this bill is $5,000,000,000 for slum clearance and public housing over a long term of years. It is the cost of prosecuting the war, if you please, for about 11 or 12 days. That was to kill and destroy. This is to build up values so farreaching that we cannot see the social implications of the work we are trying to do, in my judgment. Those are the two philosophies here. Men call it socialistic-some men have, to me. I cannot accept that word. You can tell it anything you want to. But the fact remains that the prime purpose of this Nation of ours and the Government is to build first, in this country, a human society and then an economic system; and the human society comes first, in my judgment. That is what the philosophy of this bill is, to reach out a helping hand, to give men new hope, to remove this great source of implications of social inequities, of juvenile delinquencies, of marital infelicity, so that people can say, with government help, it is good to be alive, thank God I am an American citizen. If that is treason, let them make the most of it. That is my conclusion. Senator ROBERTSON. I think everybody will agree with you that war is a horrible waste of resources as well as manpower. The unfortunate fact is that we were forced into the last war. We had to fight for our freedom and self-preservation. The money involved in that fight has already been spent, and leaves us with a present debt of approximately $258,000,000,000. The CHAIRMAN. And also the largest income in our history. Now, there are many good things, from my viewpoint, in this Flanders bill. I think it greatly improves the other bill. There are many things in there that I would like to support, many things there that I would like to get started. I am just trying to develop for this committee and for the Senate, the question of whether or not, since we do not propose to let any of this money go before July of 1949, for fear we will not have it, why not separate the thing that could lead us into the expenditures of billions of dollars from some of the other things that we can finance, and we can develop now, and will help us to get veterans homes, it will help us to get research, it will help us to stimulate private enterprise, and get that much of the program going rather than have the whole thing bog down by the uncertainty of a public housing thing which even if the Senate takes, I think the distinguished Senator from Washington will agree with me, the House will not touch. I will not dwell on that any more. Now I will take up several things in the Flanders report that caught my attention as I tried to study them last night. I was weary and I could not take them in very clearly and marked a few things as I went along. I want to get some explanations. If you will turn to the report on page 9, will you explain "equity investment aids," under section 402, and say whether or not you think that program will cost the Government anything, because it looks mighty fine if it does not cost anything. Mr. FOLEY. I have it, sir. That is title 7, proposed insurance for investment for families of moderate income, commonly called yield insurance. Senator ROBERTSON. Yes. Mr. FOLEY. You are referring to the committee's print on the subject. Senator ROBERTSON. That is right. It includes amortization. How much do you allow for that? Five percent? What is the figure that you are putting in for amortization? Mr. FOLEY. For amortization, 2 percent. Senator ROBERTSON. To get amortization, plus not exceeding on a certain type of insurance, 234 percent. Mr. FOLEY. Two and three-fourths percent. Senator ROBERTSON. Then there is another provision where the yield can be slightly more. Now, what I want to know is, Will that cost the Government anything? Mr. FOLEY. It can, of course, because there is a contingent liability, just as the other insurance systems on which we have been operating. Presumably, however, the experience in the other insurance systems |