STATEMENT OF JOHN C. WILLIAMSON, VICE CHAIRMAN, NATIONAL LEGISLATIVE COMMITTEE, VETERANS OF FOREIGN WARS OF THE UNITED STATES

The CHAIRMAN. The next witness is Mr. Williamson, Veterans of Foreign Wars of the United States.

Mr. WILLIAMSON. Mr. Chairman, I have a very brief statement which will take me about 5 minutes.

The CHAIRMAN. We are not trying to rush anybody. We thought we could expedite things as much as possible.

Mr. WILLIAMSON. Mr. Chairman and members of the committee, I am grateful for this opportunity to express the views of the Veterans of Foreign Wars of the United States with respect to the defense housing bill, S. 349.

I would first like to state that our organization shares with the Housing and Home Finance Administration the concern that the inadequacy of housing in areas of increased military and defense activity will have the effect of reducing the levels of morale and production to the detriment of our national defense effort.

We are not sufficiently expert to assert that the devices set forth in this bill will bring about the desired result. We do know that the housing situation is especially critical in certain areas which in all likelihood will be classified as defense areas in the very near future. We are also aware that existing financing devices resulted in over 1,400,000 housing starts in 1950. It is now proposed to start between 800,000 and 850,000 dwelling units in 1951, although the production factors that accomplished the former are not being liberated fully enough, in our opinion, to accomplish the latter but smaller target.

The answer is more housing in defense areas and this housing in the lower- and moderate-price range. We are aware of the Administrator's statement that, before the devices of S. 349 are utilized, the October 12 credit curbs on conventional, FHA, and GI financing will be removed or relaxed in certain defense areas on a selective basis. In other words, S. 349 is stand-by legislation and will be resorted to only in instances where existing financing methods will not do the job. However, we all know that stand-by methods, by their very presence on the statute books, tend to become exclusive methods. That is why we urge that the committee employ language

The CHAIRMAN. Have you any idea what sort of language we ought to employ?

Mr. WILLIAMSON. Only with reference to our own particular problem. We are concerned with the GI program. We have a proposed amendment on the next page.

The CHAIRMAN. I just had read that part.

Mr. WILLIAMSON. That is why we urge that the committee employ language in the bill which will leave no doubt that the existing financing methods, without credit restrictions except as to price range, be utilized in defense areas to bring about the desired objectives.

Because the GI home-loan program has played so important a role in the acquisition of housing by over 2 million veterans since the close of World War II, I would like to address myself to the feasi.bility of utilizing this program to a larger extent than is now contemplated in meeting the housing shortage in defense areas.

In the ensuing years of our defense build-up, thousands of veterans employed in defense industries will be in the housing market as home purchasers. We feel that such veteran defense workers ought not to be denied the assistance of the GI home-loan program with its lower interest rate, gratuity payment, longer maturity period, and other laudable attributes of that program. The objective of additional housing for defense workers will still be served, and at the same time the veteran, now a defense worker, will share in a benefit which the Congress extended to him in 1944 and which benefit has been exercised by over 2,000,000 World War II veterans.

Let me emphasize again that we are not proposing that the lid be taken off the GI home-loan program. We are in accord with the objectives which prompted the imposition of real-estate credit curbs and certainly concur in the need to reduce the volume of housing to 850,000 starts during 1951. We propose only that in defense areas the veteran who is a defense worker have the right without restriction to obtain a home under the GI financing plan.

The CHAIRMAN. Exactly what to you mean? Up above you say that the objective of the additional housing for defense workers will still be served and at the same time the veteran. Now defense workers will share in the benefits.

Mr. WILLIAMSON. In other words, if the veteran is a defense worker-I am thinking particularly not of the isolated areas but of the metropolitan areas-if the veteran is a defense worker, we feel that he ought to still have a right to obtain a home under the GI financing program without the restrictions that were placed on that program on October 12 which for all purposes killed the GI home-loan program. The CHAIRMAN. Killed the program on October 12? I am wondering how we could do that.

Mr. WILLIAMSON. Therefore I have taken the liberty of drafting a proposed amendment to S. 349 which would accomplish this objective. In behalf of the Veterans of Foreign Wars of the United States I commend it to your sympathetic.consideration.

Proposed amendment to S. 349, the Defense Housing and Community Facilities and Services Act of 1951, substituting the following as section 512 and renumbering the present sections 512 and 513 as 513 and 514, respectively:

SEC. 512. Notwithstanding any other provisions of this or any other act (including the Defense Production Act of 1950), except provisions of law enacted hereafter expressly referring to this section, any area or locality in which the President shall find, or it is otherwise determined by proper authority, that a shortage of housing exists or impends which impedes or threatens to impede national defense activities shall be classified a defense area for the purposes specified in this act, and in such defense areas loans for the purchase, construction, alteration, repair, or improvement of residential property shall be guaranteed or insured on behalf of veterans in accordance with the provisions of the Servicemen's Readjustment Act of 1944, as amended, without any other limitations or restrictions: Provided, however, That the Administrator of Veterans' Affairs determines such veterans are engaged in national defense activities under whatever definition of "defense worker" may be applied for similar purposes by other Federal agencies in the same area.

The CHAIRMAN. Not that I take issue with you because I have been running around here and trying to go along as much as I could to help the veterans' program. I think all agree with me on that. How could you do that when a fellow builds a house, a GI's house? Suppose he would not work in a defense plant. Ninety-nine percent may

work there, but there may be some fellow that would build a house, get his loan, go ahead and put it up in a defense area and not work there, as some fellows do.

Mr. WILLIAMSON. We feel that we are in a defense effort where most of the materials

The CHAIRMAN. Nobody loyal to the Veterans of Foreign Wars would do it, don't misunderstand me but I am thinking of the complications that might come where a fellow might want to run something that would not have to do with a defense area.

Mr. WILLIAMSON. Our organization is ready to accept the reality of the situation that there isn't going to be very much material left for housing for residential construction other than defense housing.

The CHAIRMAN. I think you are right on that. I hate to say it but I think you are right.

Mr. WILLIAMSON. If the veteran is not a defense worker, he has to subject himself to the controls.

The CHAIRMAN. Suppose he is a defense worker. Don't misunderstand me about my feelings for veterans or my appreciation of what they have done, but if they take a defense job and then decide they don't want to do that or suppose he has got a defense job and builds his home, then he thinks to himself, well I don't want to keep on working in defense, I want to do something else and utilizes that property in the defense area to do something which he has a perfect right to do.

Mr. WILLIAMSON. We still have one additional housing unit in the defense area

The CHAIRMAN. But he will live in it and won't do defense work. Mr. WILLIAMSON. The situation won't be any different if he finds that the administrator is going to relax the credit curbs on a selective basis in defense areas. That will mean that this will provide more residential construction for sale and it will be sold to someone who is defense worker.

The CHAIRMAN. He will have a certain amount of discretion. Unfortunately I wasn't here when he testified. But he will allow these certain number of houses. The veterans could have a preference on those certain number of houses.

Mr. WILLIAMSON. I doubt if the veteran worker is going to buy any but I don't know.

The CHAIRMAN. I just meant that I am thinking the whole thing through which you would do and you would agree I should think it through.

Mr. WILLIAMSON. Even if he is a defense worker and gets this home through a relaxation of the credit curb, and then he later is not a defense worker, we still have accomplished our objective of creating another housing unit in the defense area.

The CHAIRMAN. Are there any further questions?

Senator SCHOEPPEL. I have no questions.

The CHAIRMAN. We thank you very much.

Mr. WILLIAMSON. Thank you.

The CHAIRMAN. We are very glad to have your views, sir.

The next witness is Mr. Howard Elliott, a member of the General Assembly of the State of Missouri.

Will you please come forward, sir. The committee will be happy to have the benefit of your views.

STATEMENT OF HOWARD ELLIOTT, MEMBER, GENERAL ASSEMBLY, STATE OF MISSOURI, ST. LOUIS, MO.

Mr. ELLIOTT. Mr. Chairman, I am Howard Elliott. I live in St. Louis. For the past 15 years I have been a member of the General Assembly of Missouri and as such, some of the problems raised by this bill dovetail in with some of the problems that we have been concerned with, particularly the community facility and land-use problems involved.

At the risk of having made some material error of form, we have prepared two amendments to this bill which we would like to submit for the committee's consideration.

The CHAIRMAN. Without objection, the two amendments will be placed in the record at this point and you may address yourself to them, Mr. Elliott, or whatever you wish to do.

Mr. ELLIOTT. Thank you, Mr. Chairman.

These amendments to the provisions of title I. They are to take care of a particular type of a community set-up that is different from those which have been testified to before the committee here this morning, particularly those areas in the suburban area of a metropolitan area having a going industry, diversified industrial development dedicated already in whole or in part to war effort.

We have in Missouri several of these, typical of which is the one at Hazelwood, Mo., which is a suburb of St. Louis.

Present credit restrictions plus the provisions of this bill have given us such concern that the mayor of St. Louis, Mayor Darrs, has called a national conference on these problems of defense housing in St. Louis for next month. The only thing that this amendment does is to give to the Commissioner under title I certain latitude with reference to the limitation provisions.

The CHAIRMAN. Would you mind reading those amendments?

Mr. ELLIOTT. Not at all, sir; I would be very happy to. We suggest amending S. 349 at two places, one at page 9, which is the first amendment, by adding a proviso at the end of subsection (b) (2), line 7, which reads as follows:

And provided further, That in any area where was a substantial diversified industrial development prior to January 1, 1951, devoted in whole or in part to war production and capable of substantial development into wartime potential, and located in or adjacent to an undeveloped or partially developed community adaptable for the housing of workers engaged in such wartime production, which community, through the proper local subdivisions of government, and the Administrator, at the request of such community, shall find it desirable to conform to such established community land use program, the Commissioner may increase any such dollar imitation by thirty-three and one-third per centum.

In short, what we have done is to lift over from I think it is title II of the bill with reference to the community facility program, the same discretion that the Administrator has there to the Commissioner under title I to conform the aid or the insurance of the loan under that title to conform with certain land-use programs or developments already in being in those communities.

We saw no reason why, where we gave the Administrator that discretion under title III for community facilities, he should not have that title, that discretion under title I in guaranteeing the loan. We do not ask for anything. We just want to invest-to vest the Commissioner with that discretion, that he has it in his discretion to permit him to allow the community to develop in the way it has

stated out at the present time and been in being as of January 1, 1951.

The other amendment, Mr. Chairman, does exactly the same thing to the subsequent section of title I.

The CHAIRMAN. Let us get this other one straight first. As far as we can see, this would be on page 9 under section 7 containing such general provision with respect to insurance, and so forth, payment of taxes, delinquency charges and so forth and so on.

Would you increase that to 33% percent Government grant?

Mr. ELLIOTT. Guaranty of loan, mortgage. What it does is, it gives discretion in guaranteeing loans. If there was a declared defense area to increase the ceilings on these places 33% percent.

The CHAIRMAN. How would you give the money? I am just thinking out loud. That would increase the rents if you had to pay it back. It would give a mortgage of $10,800 instead of $8,100. What we are trying to do is do something for the war workers, perhaps get as low a rent as possible.

It

Mr. ELLIOTT. There is not as big a rental problem here, Mr. Chairman, as there is in the individual home. This is a suburban area. is not a blighted area.

The CHAIRMAN. Would that not have to apply to all the area?
Mr. ELLIOTT. That is right.

The CHAIRMAN. That is the trouble.

Mr. ELLIOTT. These communities, of which there are a number in the United States, which are in the suburban areas outside the towns, are partially developed already with large acreage around them. They are neither isolated in the woods where you come up and put up the automobile camp. Neither are they in the center of a metropolitan area where you have a blighted area and put up a tenement. This is a suburban development, industrial development, which is in being, which at the expense of great time and effort has a land-use program, community facilities. We have an $80,000,000 hospital involved in this. We have a $45,000,000 sewer system involved. The community, the whole community at the present time is in being and is growing along with a certain land-use program. The bill as it is drawn would require the complete change in that program where this discretion which is already vested in the back part of the bill, the Administrator would, if it was in his wisdom wise, have the discretion to make it to conform to the other up to the extent that the community was already developing.

Mr. Chairman, I am fortunate in having the mayor of one of the towns affected here, as a live exhibit. Mayor Pershall, of Hazelwood, Mo.

The CHAIRMAN. We will be glad to hear from Mr. Pershall.

STATEMENT OF EDWARD E. PERSHALL, MAYOR,
HAZELWOOD, MO.

Mr. PERSHALL. Mr. Chairman, I have not the ability to discuss the law, the question of amendments, and so on and so forth. I do know the town quite well.

The CHAIRMAN. What would you say about the community of which you are mayor? That would apply, I presume, to the other communities that Mr. Elliott spoke of?

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