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This objection is probably sufficiently answered in what has been said in the first part of this paper, from which it seems to be reasonably clear that there will be a saving, both of time and money, under the adopted plan, as the plan will make it possible to secure the services of the most experienced and skillful builders, archi. tects, and real estate managers obtainable. All of this would bedifficult, if not impossible, for the small real estate operators.

It is not claimed for the adopted plan, of course, that it is perfect, or that it has not some disadvantages, or that other disadvantages may not develop in the course of its operation. What is claimed is that, all things considered, it is the plan best adapted to the purpose of securing as speedily and as economically as possible the great number of houses which will be needed in these various communities to accommodate war workers.

It might be added, finally, that not only has the adopted plan received the most careful consideration and approval of the bureau, but it has the sanction of the Secretary of Labor, who has also expressed his disapproval of the plan submitted by the Real Estate Division; and it has further been ratified by local acceptance in eight different communities already.

DEFENSE OF THE LOCAL HOUSING COMPANY PLAN.

The purpose of the bureau is to relieve housing congestion in those communities where the congestion has immediate relation to the successful prosecution of the war. The end to be kept in view is to provide not only houses, but houses which will be certain to reach the proper hands in such condition and at such prices as to accomplish the purpose above mentioned. It is recognized that private enterprise has thus far failed to provide a solution of the housing problem, and hence the Government has been compelled to step in.

1. Control.Under the adopted plan the Government's control is complete throughout the development and management of each housing project. Because it is dealing with one concern the Government can supervise and supervise easily the entire project from the time of building until the last house is sold. The various agreements that will be made to carry out the plan will cover a period during which there may be many violent industrial or other changes, including the transition from a war to a peace footing. Under such conditions flexibility is necessary to the success of the enterprise. The Government through its control will reserve the right to make any change or modification which changing conditions may require.

More specifically, the following elements of control will be combined in the adopted plan.

(a) All contracts will be drawn by the Government, or subject to its approval.

(6) Construction will be carried through under plans and with types of buildings approved by the Government and will be at all times under the supervision of the Government.

(c) Adequate maintenance will be assured, and thus the Government's investment will be amply protected.

(d) The books of the housing company will be subject to Government audit at all times.

(e) Because of large-scale production and consequent low cost, sale prices and rentals can be kept down to a much lower figure than if the houses were erected and operated by private companies or individuals, and the Government, by keeping control, can insure that the tenants or purchasers will get the benefit of this saving.

(f) Occupants can be limited to war workers throughout the period of the war and the prime purpose of the housing act carried out.

(9) The board of directors of the housing company to be formed under this plan, and to which money will be loaned for the con

struction, will include Government representatives, who will see that all the Government's requirements are in good faith observed and that the policy of the housing company is shaped in accordance with the spirit and purpose of the act and this policy strictly adhered to until all the houses are sold.

(h) The Government in all of its contracts will reserve the right to take over the entire development (which may be necessary if the management should become inefficient). This also serves as an effective club in the hands of the Government to insure the faithful observance by the housing company of all of the conditions of its operating agreement for the Government's protection as well as for the protection of the workers who may have rented or purchased from the company.

(i) Profits will be strictly limited to dividends of 6 per cent per annum, payable on the stock in the housing company, with a provision that any surplus earnings at the time of the dissolution of the company shall be returned to the particular community in some form of community benefit. This plan is made possible because those who will take stock in each company will be primarily interested in securing additional workers in the community with the consequent benefit to the community and its industries and who do not expect to look to profits derived from the rental or sale of houses for a return on their investment.

The Real Estate Division objects that the foregoing limitations are so drastic that smaller private building enterprises will not be willing to consent thereto. We are all the more fortunate, therefore, in that we may thus secure for a given community a single housing company that will be willing to submit to this character of governmental control for the good of the community and without asking for large profits to be derived from the rent or sale of the houses.

2. Centralization—(a) Large-scale production.—The whole course of the war and the method of meeting its tremendous demands upon our industries and labor supply have shown conclusively the great advantage, both in the matter of saving money and saving time, in resorting to the method of large-scale or quantity production. There is a vast saving in overhead expenses. There is eliminated the disastrous competition for labor and materials resulting where several competing concerns are carrying on the same character of work in the same neighborhoods or sections. The undertakings are (and would be here) of sufficient size to attract the services of large contractors with their wider experience and excellent organizations. And, finally, priority orders for manufacture and shipment of construction material can be made and carried out with a speed and safety utterly impossible when dealing with a great number of small contractors.

(6) Ease and practicability of dealing with one concern. -At the outset, instead of dealing with thousands of loan applications and examining and investigating their attendant plans and specifications and methods of operation generally with the multitudinous delays inevitable in any such system, one responsible company is dealt with by the Government in each community. In other words, instead of great numbers of plans and proposals, each to be revised and passed upon, each different from the rest, the Government, by working with a single company, can submit one plan carefully worked out in advance by the bureau, each part of which fits in with the rest and adapted to the community as a whole, and which can be put into effect both economically and expeditiously. Furthermore, difficulties of auditing are eliminated, financial responsibility is more easily insured, the deduction of excess war cost is made simple, and in every way the machinery is cut down.

(c) Unity of development.—Under this plan it is made possible to build all the houses with proper regard to transportation facilities, the accessib of the homes to the manufacturing plants, etc. Where it might be economical or wise to provide additional trans portation or other community utilities, this can be done with reference to a single plan and not to haphazard, isolated, independent groups which may have been built up without reference to such a plan. Obviously, the location and character of such unrelated groups would be determined primarily by the varying interests of each real-estate operator, and not by the needs or interest of the community as a whole.

3. Foreclosure.—Under the plan adopted foreclosures will not be carried through in the name of the United States, a fact which will prevent considerable dissatisfaction and complaint.

ing company, their domestic life will be dominated by the employer. The freedom-loving American workingman desires to be out of his employer's sphere of control during his leisure hours.

6. The establishment of local housing companies was rendered difficult because of the tendency of local interests to attempt to promote the utilization of special properties not necessarily the cheapest or the best situated properties in the communities. The Bureau of Industrial Housing under such a plan would never have had a free hand and would have been forced to carry out its policy only after considerable negotiating, if not actual contention, with self-interested local groups.

7. Serious difficulties in the operation of their local housing company plan had already been reported by officials of the Housing Division of the Emergency Fleet Corporation to officials of this bureau.

REASON FOR ABANDONMENT OF COMPANY PLAN.

ADOPTION OF PLAN OF GOVERNMENT CONSTRUCTION

AND OPERATION.

By the end of the first week in June the staff of the Housing Corporation was virtually unanimous in the conviction that speed and efficiency in construction could be obtained only by direct Federal action. They were, therefore, in hearty accord with the decision of the Secretary of Labor in his memorandum of June 13, 1918, in which he stated: “The Government will build, own, control, and rent the houses until after the war.

POLICY WITH REFERENCE TO INVESTIGATIONS.

The plan of loaning Federal funds to local limited dividend companies for the purpose of building houses for war workers was taken up with bodies of local citizens of Bridgeport, Erie, Niagara Falls, the Rock Island district, and elsewhere.

The attempt to induce communities to form local housing corporations was welcomed by many of the larger industrial cities, but although they approved the principle it proved exceedingly difficult to work out a detailed contractual relationship to which both the local housing company and the Bureau of Industrial Housing would consent.

1. It did not prove possible to induce all of the local committees to accept the plan. There was a tendency for each to seek special privileges and exemptions.

2. Several existing local companies, after having accepted a plan of operation, returned to the Housing Bureau time and again with requests for modifications.

3. Serious delays resulted from the continuous need of negotiating with the communities as to their participation in the housing development.

4. In many places it was found impossible to raise sufficient local capital for building purposes. Navy yards in small, remote communities and remote proving grounds and arsenals were often the only industry within the vicinity, and they had no resources available for the establishment of a housing company. In many such places the land most suitable for building purposes was that already owned by the Government. In such communities the only recourse was to have the Government build and operate properties direct.

5. In still other places there was but a single large corporation engaged on war contracts, and this industry was the only possible source of local capital. Its representatives were the only available representatives for the operation of a local housing company. In such cases, and indeed in all cases where capital was subscribed by manufacturers, the employees would be likely to object to the establishment of a local housing company, for they fear that if the manufacturer's capital is utilized to build the houses, and the manufacturer's representatives operate the hous

142178—20VOL 1-3

The original policy of the Housing Bureau with reference to investigations has been briefly outlined in the preceding chapter. Investigations were made by sending a field agent to the community and by means of questionnaires sent to manufacturers and civic organizations. This practice met the original emergency needs of the bureau with a fair degree of adequacy. The volume of production of war essentials, however, increased enormously during the early months of 1918, and colossal contracts were being let which would still further aggravate the already menacing conditions of the industrial cities.

In July the Housing Corporation had gone to Congress with a request for an additional appropriation of $196,000,000 for further house construction, which its staff and the representatives of the War and Navy Departments deemed indispensable to meet future local needs which would inevitably arise if the war should continue for another 12 months. Only $40,000,000 of the $196,000,000 requested was appropriated. It became clear, therefore, that the problem of housing workers engaged on war contracts could not be met unless the Government should take immediate steps not only to place the majority of its new contracts in communities that were not saturated but also to transfer workers in communities already saturated from nonessential to essential industries. Recommendations to this effect were made by the Housing Corporation to the War Industries Board. Coordinated effort to secure the information necessary for the placing of future war contracts and for the elimination or reduction of the less essential industries was recognized as indispensable. A new policy of surveys was, therefore, recommended by Mr. Joseph D. Leland, the vice president of the Housing Corporation, which is outlined in what was approximately its final form in the following memorandum of October 4, 1918:

1. The functions of the United Housing Corporation require it

(a) To provide housing and passenger transportation at such points as manufacturing production for the Government requires.

(6) To anticipate and take steps to avoid, or to assist in avoiding, conditions which might or could result in requiring additional housing and passenger transportation facilities.

2. In the fulfillment of its duties, arising as set forth in paragraph 1 hereof, this corporation needs to have information on the following subjects:

(a) Housing and passenger transportation requirements of certain manufacturing establishments, together with the existing available facilities.

(b) The ability or inability of local interests to provide required housing and passenger transportation service and facilities.

(c) The adequacy or inadequacy of existing public utilities for present and future requirements and the ability of local interests to supply them.

(d) The extent to which labor in such localities is engaged in essential and nonessential employment.

(e) The extent to which manufacturing capacity in such localities is engaged or might be engaged in Government requirements.

(1) The ascertainment of the nature and extent of industries in such localities that are engaged in essential and nonessential work.

(9) The extent to which women are being and might be engaged in the manufactures of such localities, and the source and extent of the supply of such labor.

(h) The extent to which men of deferred classification are being and might be engaged in the manufactures of such localities and the source and extent of the supply of such labor.

(i) The character and composition of the labor force, by sex and color.

(i) The possibility of meeting labor shortage by diverting labor already housed and provided with passenger transportation facilities from less essential industries or from civilian work to plants engaged on war requirements.

(k) Classification of wage rates of present and required employees of industries in such localities as bearing upon the nature, character, and type of housing to be provided.

(1) Whether or not housing to be provided should be of temporary or permanent character. This involves a study of each community, of its civic conditions, of its history, and the likelihood of the continued operation of plants engaged on war production after the cessation of hostilities.

All the above and other information to be of service to this corporation must be kept up to date, and must be gathered in each suburb of each locality that lies within reasonable commutable distance of the principal center affected.

3. Much, if not all, of the foregoing information is essential in one form or another to one or more other governmental departments, and if gathered by this corporation and not disseminated to other departments interested would require by such departments a duplication of the work done by this department. On the other hand, information essential to other governmental departments, and gathered by them, while not essential to the requirements of this corporation, would be of great value to it if promptly furnished to it as gathered.

4. This corporation, until a short time since, attempted to gather information by mailing questionnaires to communities and manufacturers, by causing single investigators to visit communities and make surveys of the plants requiring immediate housing or passenger transportation relief, and by making a superficial community investigation.

5. This corporation found, as have other governmental departments, that these methods were inefficient and did not produce the results desired. Thereupon, in August last, after conferring with certain other governmental fact-gathering agencies and their departments, it consented to turn over its investigating and statistical work to a bureau then formed, known as the Industrial Seryice Division of the Bureau of Labor Statistics; but in consenting to the arrangement, on August 19, 1918, addressed a letter to Messrs. Gay, Lamson and Meeker, as follows:

* This corporation can not afford to jeopardize the important functions committed to it, and therefore expressly reserves the right, should the plan in its judgment prove unsuccessful for any reason, or the action be so hampered as to fail in its usefulness to this corporation, to again return to the plan of procedure now used by it, and also as outlined in my memorandum of the 5th instant, entitled 'Coordination of effort in acquiring essential information, etc.,' and thereupon institute its own research work in the gathering of information and statistics which it must have in order to successfully carry on its work.”

6. The method of conducting investigations adopted by the new bureau of having able men, schooled in the requirements of the Housing Corporation and expert in organizing communities, to furnish desired information and of overseeing and directing their effort, has proved to be as a method the only satisfactory and efficient one, and this corporation intends to use this method in the conduct of its future investigations; but it appears that other departments object to the work of this division, and impede it by their own effort. This has gone so far that this corporation will be obliged to resume, through its individual effort, the collection of the information and data it needs, unless some common plan be adopted.

7. The disadvantages, waste, etc., which will immediately result from separate action are so evident that we pass at once to the proposal of a

Plan.-(a) That the Industrial Service Division of the Bureau of Labor Statistics as a separate entity be abandoned and a Division of Industrial Service (this was changed to Division of Surveys and Statistics) be created by the United States Housing Corporation in its own organization.

(6) That the Division of Industrial Service of the United States Housing Corporation, the regional advisers of the War Industries Board, and the labor control boards of the Department of Labor act as the sole fact-gathering agencies of the several governmental departments.

(c) That the Central Bureau of Planning and Statistics prepare and keep revised as frequently as may be required one or more questionnaires to serve the requirements of the several departments.

(d) That these questionnaires be known as the official governmental questionnaires and that no other questionnaires to the manufacturing or business interests of the country be permitted to be circulated by any department.

Organization.a) That there be created, subject to the following plan, a board of control, to supervise the work of the factgathering agencies.

(b) That this board be composed of four members, as follows: Mr. Gay, chairman; Messrs. Legg, Eidlitz, and Frankfurter, representing respectively the United States Shipping Board Emergency Fleet Corporation, the War Trade Board, the War Industries Board, the United States Housing Corporation, and the Labor Department.

(c) That the board appoint a subcommittee to work out all details relating to the conduct of the work of the fact-gathering agencies, reporting in detail to the board for its final action.

(d) That the subcommittee be composed of five members, as follows: Messrs. Peck, Potter, Otis, Meeker, and Guerin, representing, respectively, the War Industries Board, the Central Bureau of Planning and Statistics, the Labor Department, and the United States Housing Corporation.

(e) That Mr. Lamson should be the liaison officer to coordinate the different bureaus and branches of the Labor Department in the work intended, and to that end should report direct to the Central Bureau of Planning and Statistics.

Conduct of Surveys— War Industries Board.—(a) The Housing Corporation and Labor Department shall furnish the War Industries Board from time to time lists of information relating to the subjects within their respective jurisdiction which they desire in relation to manufacturing establishments throughout the country or in particular localities. The War Industries Board shall cause its questionnaires to be amended from time to time to embody in the form requested the information desired by the corporation and department, or it shall prepare special questionnaires for that purpose. The War Industries Board, through regional organizations, shall distribute and collect the questionnaires, returning same to the Housing Corporation and the Labor Department within the time required by said agencies.

(b) The War Industries Board shall construct its questionnaires in such form that they may be filled in on the typewriter, and carbon copies of each questionnaire received by it shall be executed by the manufacturing establishment and returned to the corporation and Labor Department as received by it.

(c) The War Industries Board shall collect said questionnaire from each manufacturing establishment in the country, whether the same is engaged on Government business or not.

(d) It should be the policy of all fact-gathering agencies to make their surveys simultaneously whenever such procedure be possible. No survey should be made by any of said agencies without previously notifying the other agencies that such survey is contemplated, and such notice should further state the time when the same will be made.

Appeals.-(a) Should the War Industries Board, the Labor Department, or the Housing Corporation fail to furnish any department the information within the time and in the form requested by it or them as aforesaid that was or should have been obtained by the surveys of the department in default, the department desiring such information may appeal to the Board of Control.

(6) The Board of Control shall hear said appeal and determine which of said agencies, if any, shall make said survey, the time when the same shall be made, as well as the method to be employed.

Labor Department.--(a) The Housing Corporation and the War

Industries Board shall furnish the Labor Department from time to time lists of the information relating to the subjects within their respective jurisdiction which they desire in relation to each community or from the country at large. The Labor Department shall cause its questionnaires to be amended from time to time to embody the information in the form desired by the corporation and department, or it shall prepare special questionnaires for that purpose.

(6) The Labor Department shall construct its questionnaires in such form that they may be filled in on the typewriter, and carbon copies thereof, executed by the employer, shall be returned by said Labor Department, as received by it, to the Corporation and Board.

United States Housing Corporation.--(a) The Housing Corporation will conduct only such surveys of communities as may be necessary for the prosecution of its business. It will not appeal to any manufacturing establishments as such or employers of labor as such for information in relation to the several subjects or matters comprised in or that might be comprised in the general subjects covered by said questionnaires, distributed or to be distributed by said board and department, but will confine its investigations to housing conditions, transportation conditions, utility conditions, and kindred subjects.

(6) The Housing Corporation will furnish the War Industries Board and the Labor Department with ch information relating to the several subjects covered by its investigations as they may from time to time request.

(c) The War Industries Board and the Labor Department should furnish the Housing Corporation from time to time lists of information relating to the subjects within their respective jurisdiction which they desire the Housing Corporation to furnish them and which relate to or can be obtained by the Housing Corporation in its surveys of the country at large or of any particular localities.

(d) The Housing Corporation shall cause its questionnaires to be amended from time to time to embody in the form requested the information desired by the board and the department, or it shall prepare special questionnaires for the purpose and shall deliver carbon copies thereof to said other agencies as received by it.

Compilation and dissemination of information obtained by surveys.—(a) Whenever one of said investigating agencies has concluded a survey, it shall promptly, by its Statistical Department and in such form as it desires, collate and compile the information for its benefit obtained by such survey. Immediately upon such compilation being completed, report thereof, in such form as may be prescribed by the Central Bureau of Planning and Statistics, shall be prepared in triplicate and delivered to the Central Bureau of Planning and Statistics, one copy to be retained by said bureau for its files and one copy to be transmitted by said bureau to each said other fact-gathering agency.

(6) All questionnaires used by said fact-gathering agencies shall be prepared by the Central Bureau of Planning and Statistics and no questionnaires not so prepared shall be used by any of said agencies.

(c) All requests and requirements for special information to be furnished by one fact-gathering agency to another or to any department shall be made and cleared through the Central Bureau of Planning and Statistics.

Note. -The methods of investigation utilized by the Division of Surveys and Statistics and the results obtained are submitted in the report of that division in Appendix IV of this volume.

CHAPTER IV.

MEASURES ADOPTED TO PREVENT NEEDLESS CONSTRUCTION.

The problem--Ascertaining local needs-- Promoting maximum utilization of existing houses—Value of the vacancy canvass—The Homes Registration Service Committee-Listing and classifying the vacancies–Need of a placement agency-Administration of Homes Registration Service-Statistics of Homes Registration Service-Savings effectedImprovement of old properties-Control of rent profiteering-Statistics of committees on rent profiteering-Utilizing existing houses in Washington, D. C.-Commandeering of vacant properties—Solving the problem by transportation--Encouragement of private construction Statistics of accommodations provided without building by the

Federal Government.

THE PROBLEM. The Bureau of Industrial Housing and Transportation in the early months of 1918 was faced with the problem of finding homes of a suitable character for men and women working on Government contracts. It had to find or build such homes in order to induce both skilled and unskilled labor to stay and work on these emergency contracts and in order to keep labor contented and in the highest degree efficient. The problem was an emergency problem because war contracts could not be fulfilled on time unless an adequate supply of contented and efficient labor could be secured and kept at work. Failure to meet this problem would hold up the entire war program, owing to the dependence of each element of that program upon all other elements.

ASCERTAINING LOCAL NEEDS. The first essential step in the program of the Bureau of Industrial Housing and Transportation was to investigate the housing problem in every city in which it was claimed that war contracts were being delayed because of housing shortage. The division of the bureau established for the purpose of investigation sent field agents to such communities, armed with such information as had been supplied by the War or the Navy Departments and by the communities themselves. The field agents were specifically charged with analyzing these alleged needs and instructed to get all possible data from public officials, manufacturers, chambers of commerce, civic organizations, Federal representatives, and others, particularly with reference to the following points:

1. Was the output of the war industries restricted by lack of labor or by excessive turnover?

2. If so, were these conditions due to shortage of houses or to inadequate transportation facilities?

The detailed methods utilized to secure answers to these questions are outlined in Appendix IV.

In brief, the investigator studied the contract dates for delivery, the probable dates of completion of existing contracts with the present force and with the desired increase in force, the number of employees before the war, the existing number, the number which the firm expected to employ during the coming year, the maximum number which could be employed if the plant were operated at full capacity, the labor turnover, and the shortage of labor among skilled and unskilled, among married and unmarried, among married men living away from their families, among male and female employees, white and colored, native and foreign born. Analysis of the causes of labor turnover was required, consideration being given to other elements beside shortage of houses. Brief studies followed concerning the prevalent living conditions, transportation, opportunities for recreation, available sites, and community facilities.

The investigator upon his return presented a full report, which was supplemented by the returns from questionnaires sent on to local factories and to local civic agencies by the Statistical Division. This report was presented before the staff of the Bureau of Industrial Housing at a conference at which there were representatives of the War and Navy Departments. In view of the findings of the investigator and on the basis of information submitted by the War and Navy Departments with reference to the relative urgency of their local contracts it was decided what assistance, if any, could be given to the community; whether the problem was so unimportant as to require no Federal assistance, whether the problem might be solved by saturation, by transportation, by encouragement of private building, or whether the Federal Government should take the preliminary steps toward securing the land and building homes.

In many of the more congested centers in which urgent war contracts had been placed it proved necessary to meet the local problem in each of the various ways described below.

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