branch, the materials procurement branch (in which there was a requisition section for securing materials by requisition), a procurement section for the procurement of materials ordered, a traffic section to promote speedy delivery of materials, and a priority section (to obtain priorities for materials and transportation).

In this division were placed the traveling supervisors and the project managers and works superintendents, who promoted, coordinated, and supervised the work of the contractors employed by the Housing Corporation. In this division, also, was the cost reports branch, established to keep accurate records of the progress and cost of the work on each project, in order to check the performance of the contractor and to promote speedy and economical construction. (See Vol. I, Chap. V, and Appendix XII.)

INDUSTRIAL RELATIONS DIVISION.

The purpose of this division was to take care of labor problems on the housing projects, to deal with questions of wages, hours of work, and with questions of health and recreation of the employees of the corporation, of the contractors, and of the employees of war industries living in temporary quarters provided by the Housing Corporation. It maintained a corps of special representatives to examine conditions of labor, investigate complaints, improve living conditions of labor, and adjust disputes. (See Vol. I, Appendix XIII.)

OPERATING DIVISION.

The Operating Division was established in June, 1918, in order to examine the plans for housing projects with reference to the operating point of view and to make constructive criticisms of such plans with reference to their knowledge of the habits of living of the industrial classes. This division was charged also with the purchase of furniture and equipment for dormitories, hotels, and cafeterias. The ultimate work of this division was, however, to manage the estates constructed by the Housing Corporation and to arrange for a rental policy and a plan of operation which would protect the Government's investment and at the same time promote the efficiency of the tenants. The usual duties of a real estate agent in the management of property were assigned to this division, for the properties of varying sizes and types, scattered from the Pacific to the Atlantic, and from Maine to Virginia.

In addition to its function as real estate agent, it was, as a Federal agency, charged with the maintenance of conditions at a standard of healthfulness and civic well-being consistent with the dignity and responsibility of the Federal Government. (See Vol. I, chap. VI, and Appendix XIV.)

The Government hotels for women war workers in Washington were managed at first under the direction of the Operating Division. In February, 1919, the manager of these hotels was instructed to report direct to the vice president of the corporation. (See Vol. I, Appendix XV.)

requirements of section 6 of the act of May 16, 1918. It comprised the auditing and accounting sections in charge of the comptroller, who was charged with the auditing and recording of all payments and accounts. Traveling auditors and field auditcrs for each project reported through the general auditor to the comptroller. The treasurer's office was responsible for all cash receipts and for the payment of audited vouchers, for the preparation of schedules of disbursements, and for the direction of the work of the disbursing officers in the field. (See Vol. I, Appendices XVIII and XIX.)

The chief clerk of the Housing Corporation, in charge of supplies, the general files, the mailing, and general stenographic service, originally reported to the Fiscal Division. On July 9, 1918, this service was separated and was subsequently known as the Service Division.

SALES DIVISION.

Upon the signing of the armistice, the abandonment of 54 projects and the curtailment of 15 others left an immense amount of material in the hands of the Housing Corporation. Some of these materials could be transferred to continuing projects, but it was necessary to store the remaining material or protect it from the elements and to sell it at the best available prices. A sales branch was therefore established in the Construction Division to handle the storage and sale of this material. This branch was made a division of the Housing Corporation on June 30, 1919, and the office of custodian of salvaged property was created on June 15, 1919. The custodian took charge of all dead projects and of all surplus materials, except such as were turned over to the Operating Division. (See Vol. I, Chap. VII and Appendix XXIII.)

ADJUSTMENT COMMITTEE.

The cancellation and curtailment of contracts immediately following the armistice made necessary the establishment of a branch of the Housing Corporation to adjust the claims of contractors and vendors arising out of the cancellation of work. A committee was therefore formed, consisting of the manager of the Requirements Division, the assistant to the general manager, the general supervisor, the chief of the contract section, the treasurer, and the contract adviser. This committee was reorganized on March 1, 1919, with representatives of the Requirements and Construction Divisions. To this committee was also assigned the adjustment of claims on projects upon which work was proceeding but where the contractors claimed additional remuneration due to changes in kind and amount of work involved. Contractors appeared before this committee, and the committee in turn submitted its recommendation, reasons, and evidence to the executive committee, which in turn submitted their recommendations to the board of directors of the Housing Corporation for approval. (See Vol. I, Chap. VII and Appendix XXIII.)

COMMITTEE ON REQUISITIONED HOUSES.

In the late summer of 1918 a special committee, consisting of the managers of the Homes Registration and Information Division, the Real Estate and Commandeering Division, and the Operating Division, was established to investigate the vacant dwellings in Washington and to requisition the use of such property for the period of the war, subject to the approval of the president of the corporation and the Secretary of Labor. Properties requisitioned were either released to owners, under restrictions requiring their use by war workers, or were leased to persons who would utilize the rooms in accordance with the instructions from the committee, or were operated by the Housing Corporation through the office of the Washington Division of the Homes Registration Service. (See Appendices XVI and XVII.)

PRELIMINARY WORK OF HOUSING BUREAU.

During the five months which had elapsed between the establishment of the Bureau of Industrial Housing and the time when the United States Housing Corporation was formed and provided with money to invest in house construction much important work was accomplished. Funds had been made available by President Wilson on March 12, 1918, from the sum which Congress had placed at his disposal for national security and defense. From this sum $60,000 was allotted to the Secretary of Labor to get together an administrative force and undertake preliminary work. Further funds were loaned by the Navy Department to the Housing Bureau to make investigations and draw plans for the more urgent Navy projects.

By means of this financial assistance it was possible to get together a small staff of experts. Men were drawn from all over the country who were acknowledged leaders in the fields of real estate, architecture, engineering, town planning, construction, transportation, and other branches of housing science and practice. They set to work to make investigations of the housing needs of communities and of war industries. requesting assistance; to prepare tentative allotments to those communities which demonstrated the most imperative need of assistance; to draw up standard house plans and instructions for architects, engineers, town planners, and contractors; to employ architects to draw plans for housing projects, the urgency of which had been certified to by the War or Navy Departments; to frame contract forms and to draw up a tentative policy with reference to methods of finance and operation.

It was therefore possible, by the time that the $60,000,000 fund was made available and the Housing Corporation was established, to let contracts almost immediately for the construction of houses in those communities where there was the greatest need.

TEMPORARY VERSUS PERMANENT CONSTRUCTION.

The first essential was to determine the mode of housing the industrial workers. The policy of housing them in barracks, like soldiers, seemed inadvisable, inasmuch as their specialized indoor work did not produce the same physical hardihood as is found in military men nor were they in any sense under discipline. The extension of the draft was rapidly removing young physically fit industrial workers, leaving married men who were older or men who were unable to meet the physical requirements of the draft, to engage in industrial operations. It was decided that such of these men as were unmarried could be housed in dormitories of temporary construction, provided they were built with individual sleeping rooms and properly equipped with common rooms to provide for physical recuperation after the excessively long working day which was forced by the war emergency. It was reported, however, by manufacturers from many parts of the country that it was quite impossible to hold married skilled workers, even in the best-equipped dormitories. For this latter group the building of houses was necessary in order that the men. might establish their homes in the industrial centers. In no other way could discontent and a high labor turnover be overcome.

The next essential was to determine whether family houses built by the Government for war purposes should be of temporary or permanent construction. This was a question upon which there was at first a considerable variety of opinion. The arguments for temporary construction were, chiefly, that it was a quick form of construction, relatively inexpensive, and was likely to be adequate for housing purposes during the period in which we would probably be at

war.

Attention was called to the fact, however, that buildings of temporary construction deteriorated very

rapidly; that they tended to become unwholesome and unsightly unless they were built of the best materials, carefully put together, and with good foundations. It was pointed out that types of emergency construction such as had been erected at San Francisco after the earthquake and fire and in Galveston after the flood, though built for temporary use only, tended to become the permanent residences of the poorer classes. The houses, instead of being torn down, were moved to the back of the lots, and became the homes of alley dwellers, new houses being constructed on the street. Or, where new houses were not constructed, the unsightly shacks remained, depreciating property values and retarding the development of the community. In some parts of these cities "shack towns," ugly clusters of dilapidated, insanitary structures, remained, and in such quarters low standards of health, and often of morality as well, were prevalent. The building of shacks was, therefore, bitterly opposed by all who had had experience in this subject.

In the North, where winters are severe and where houses must be heated and must be weatherproof, so substantial a house is required that it was thought there would be no economy in the use of temporary structures, except for the housing of single men. The difference in cost also, is relatively slight between a substantial ready-built house, with proper foundation, cellar, and equipment, and a permanent frame house, when built with all the economies which can be secured through largescale production. Yet the salvage value of the latter type of house is materially greater than that of the former. Chiefly for this reason it was determined to construct permanent houses in all communities in which there would be a demand for such additional housing after the war emergency should be over. Temporary structures were designed, however, for remote communities in which the war-time population would be abnormally large and in which permanent houses would have no salvage value, except for the materials employed in their construction.1

In many communities in which there would be a demand for permanent family housing there would be no permanent demand for dormitories built to house. single labor during the war period. In such places temporary structures were erected. In Washington the Government hotels for women were of temporary construction. Few exceptions were made to the ruling above and the experience of the corporation since the armistice has amply demonstrated their wisdom.

1 Ready-built houses were constructed, for example, at Norfolk, Va. (see vol. II p. 274), and at Seven Pines, Va. (see vol. II, p. 34 -3). At Pompton Lakes small dormitories convertible into cottage homes were erected.

STANDARDS OF HOUSING.

The Federal Government having determined to build permanent family dwellings, it was incumbent upon it to decide upon standards with reference to planning, materials to be employed, lighting, ventilation, heating, sanitation, and fire prevention. The purpose of such standards was twofold-to provide for the health, safety, and well-being of the occupants of the house, and to standardize construction in order to economize in the use of materials and labor in so far as such economy might be consistent with the wellbeing of the occupants of houses.

The first step taken by the Housing Bureau was to prepare a manual of standard instructions for the use of its architects. The housing committee of the Council of Defense had already begun a compilation on this subject, which was carefully formulated and revised by the Bureau of Industrial Housing and Transportation in February, 1918, and published in March under the title "Standards Recommended for Permanent Industrial Housing Developments." Twenty-five persons were associated in the preparation of this pamphlet. The standards were presented, not as inflexible requirements, but with the statement that "any plans which failed to conform with them were not likely to be accepted, unless supported by very strong reasons." These provisions, which are published in Appendix X of Volume II, specify in some detail the size, arrangement, and equipment of dwellings of each type that the bureau contemplated erecting. Their publication was closely followed by the preparation of detailed specifications of sizes and materials of house parts, specifications which, however, had to be materially modified from time to time by rules issued periodically by the War Industries Board. (See report of Requirements Division, p. 192.)

Standard house plans were drawn up by the architects of the Housing Bureau applying these printed standards and providing for the economies which come from large-scale standardized construction. (See Vol. II, Chap. V, and Appendix XI.)

GOVERNMENT LOANS TO PRIVATE BUILDING COMPANIES VERSUS GOVERNMENT CONSTRUCTION.

The most difficult question of policy which faced the Bureau of Industrial Housing during the early months of 1918 was to determine upon the best method of investing Government funds for the promotion of quick construction of suitable houses in quantity. No one plan ever secured the unanimous approval of the staff of the Housing Bureau. Three main types of plan were considered, but various modifications were

suggested to each. In brief, the three plans may be described as

1. Supervised Government loans, through local financial institutions, to individuals, operative builders, and corporations.

2. Federal loans to a single representative local housing corporation to be formed and to operate under the direction of the Housing Bureau.

3. Construction and operation of houses by the Government direct.

The first of the above plans was offered by the Real Estate Division; the second plan was favored by the rest of the staff of the Housing Bureau, and was virtually the same plan as had already been put in operation by the Emergency Fleet Corporation. It was the expectation of the Housing Bureau until early in June, 1918, that some form of plan 2 would be followed. On June 13, 1918, plan 3 was formally adopted as the policy of the bureau at the order of the Secretary of Labor. The details of each of these policies and the reason for abandoning plans 1 and 2 are submitted below:

THE REAL ESTATE DIVISION PLAN.

Under plan 1, in its final form, attention was called to the "thousands of building organizations, individuals, and property owners normally engaged in the production of new houses throughout the United States who are idle" and to the fact that "in every community there are lands that owners hold and would be glad to improve if money could be procured, even upon the customary loaning basis." The following plan was submitted by the Real Estate Division to “get such agencies in motion upon a minimum entailed expense." The original wording of this and other office memorandums has been retained throughout this chapter.

1. The making of loans through local banks, trust companies, and commissions appointed as trustees for the Government not to exceed 80 per cent of the cost of the land and buildings, said loans not to exceed a term of 15 years, installments on principal payable semiannually with interest at the rate of 5 per cent per annum, said loans to be secured by a mortgage or deed in trust, which shall be an absolutely first lien on the property. The approval, terms, and conditions of loans are to be controlled by this bureau and the said trustees acting merely as representatives of this bureau in the execution of the details in connection herewith, thereby avoiding the entry in the matter of any influence or personal interest on the part of such trustees.

2. The assumption of excess war cost by the Government.

3. Payments on building loans to be made as the work progresses. 4. Where practicable, to provide priority shipments and reduced prices on material available to the Government.

In order to overcome possible objections to this policy, such as profiteering and sholdy construction, the Real Estate Division has seen fit to

1. Require, prior to the making of such loans, the submission by the prospective borrower of detailed plans, specifications, map of project, showing the layout of proposed houses, survey of the land intended to be developed, and the signing of an application for a loan, which calls for further material information, a copy of which is on file in the Real Estate Division.

This bureau to consider the suitability and location of the land for war housing in making of loans herein contemplated. The

appraisal of land made in connection here with shall control and be applied in fixing cost for sale and rental.

2. Limit the sale price to purchasers to an amount not to exceed 8 per cent plus the cost of land and structure.

3. Require rent not to exceed 13 per cent, which includes maintenance, interest on mortgages, taxes, assessments, etc.

4. Require amortization of loan at the rate of 3 per cent per annum, payable semiannually, as above mentioned, last payment to include unpaid balance of principal.

5. Provide for proper inspection on construction by the Govern

ment.

6. Require as a protection to the Government in arriving at the excess war cost a sworn statement of cost of the building, supported by vouchers filed with the bureau upon completion.

The following argument was submitted for this plan: Under this policy all questions are settled before the prospective borrower secures the loan, thereby avoiding endless delays that naturally result where questions are left to be decided on or approved by the Government subsequent to the making of the loan. This policy consequently contains sufficient points of attraction for practical builders and sufficient limitations to avoid profiteering and shoddy construction. *

There is no doubt that this form of operation would be conducive of quick results, and after all that is of the essence at the present time. Shoddy construction and profiteering can be guarded against without any great difficulty.

Furthermore, too much stress need not be laid upon the limitations of the sales and rental of the houses for industrial workers only. Generally speaking, all of the people must be housed. As soon as residents other than industrial workers living in a given locality have houses in excess of their needs, the war workers derive the benefit thereof, and vice versa. Therefore, whether the houses are occupied by war workers or not, the practical result desired is the adjustment of supply and demand. The value of this plan is that it translates the requirement of the Government into terms of local custom and procedure, largely dissipates community resistance, and stimulates immediate action.

CRITICISMS OF THE REAL ESTATE PLAN.

The objections to the plan of the Real Estate Division were summarized by the assistant director of the Housing Bureau as follows:

The advantage claimed for the real estate plan is that it will secure houses more speedily than under the adopted plan. While there might be single instances in which this would be true, it is difficult to see how a plan involving the operation of so many different small builders in the same community, with the diversity of plans and the necessary preliminary investigations as to financial responsibility, etc., and in the making and carrying out of the various contracts with them, and by them with others, could do otherwise than tremendously retard the whole plan of supplying houses in the quantity needed in the given community.

The chief disadvantages which appear in the real estate plan can be briefly summarized as follows:

1. The success of the real estate plan depends on speculative profits. Only such profits would call the local builders into the field. This alone is a serious objection since, with the already exceedingly high cost of labor and material which must be met, we would so burden the expense of the houses to the worker that we might largely defeat the purposes of making them attractive to him, and thereby fail to induce him to take up his abode in the community. The Real Estate Division recognizes that "the machinery of competitive housing operations is already paralyzed." Therefore, there must be a greatly increased inducement in the form of speculative profits before these housing operations could be revived.

2. The widely scattered and unrelated building operations in a single community would result in—

(a) Greatly increased difficulties of control or supervision by the Government with entire absence of control after completion. This applies to every feature outlined above in discussing the control maintained by the Government under the adopted plan.

(b) The advantage of large scale or quantity production would be completely lost, and there would be constant competitive bidding in each locality for labor and material, with the consequent increase in cost as well as delay in construction. Nor would any one of these smaller projects contemplated by the Real Estate Division be large enough to attract and enlist the services of the more skilled contractors, architects, and town planners, all of whom could be employed at a relatively small cost in a single large project.

(c) Practically all the advantages in uniformity of design and plan with reference to the character of houses constructed and the peculiar needs of the particular community would also be lost. The Real Estate Division well says that the small operators seriously object to "limitations."

(d) It is entirely conceivable that in many communities it might not be possible to secure a sufficient number of small independent builders to supply the number of houses required by the Government, and much time would be lost in an elaborate investigation to determine their existence, number, and capabilities, with the result that the Government itself would have to step in finally and supplement the program after much time had been lost. Furthermore, the most careful investigation and subsequent supervision would fail in many cases to prevent the community and the Government from being victimized by builders who were later found to be wholly irresponsible. The adopted plan (plan 2) amply secures against such a result.

(e) It would involve almost endless delays and complications to secure the necessary priority orders for a number of small builders or contractors in each community, whereas this is comparatively simple with a single large contractor operating directly under Government supervision.

GOVERNMENT LOANS TO LOCAL HOUSING COMPANIES.

Plan 2, as submitted at the staff conference on May 29, contends that the primary purpose in the whole scheme of industrial housing is to provide such living conditions as will conduce to the highest degree of efficiency of war workers, without which shipyards, arsenals, and factories will run short-handed and produce less than their maximum output. Our housing plans are and should be, therefore, a part of the larger 'win the war' policy, and time is the very essence of such policy. In working out this policy new houses should be built, therefore, only after every other means of stabilizing labor in a given community has been exhausted, as by saturation, transportation, etc.

The development of these new communities, for that is what many of them will be, should be attended by as many factors as possible making for community stability, and this requires a consideration of the social interest or welfare of the individual worker of the particular locality and of the country at large. The maximum of these latter factors, susceptible of introduction in any case consistent with the speedy accomplishment of the pri mary purpose above mentioned, will make what for brevity may be called the ideal practical plan.

The detailed suggestions below were offered as a tentative scheme for the promotion of housing development-"where the Government extends aid to local housing companies."

HOUSING DEVELOPMENT PLAN WHERE GOVERNMENT EXTENDS AID TO LOCAL HOUSING COMPANY.

1. A housing company to be formed under the laws of the State in question. All the capital stock to be subscribed for by local interest, and to represent at least 20 to 30 per cent of the total fund for the enterprise. The subscribed capital stock to be paid for from time to time pro rata as the Government loan is made. The company to procure the necessary land, build the houses, and manage and sell the property.

2. The Government to loan the company the balance needed for the work, approximately 70 to 80 per cent, at not less than 5 per cent interest payable semiannually, secured by a first mortgage on all the property of the company, the loan to mature in 1933. Interest to run from the time when the Government advances begin and until completion of construction and to be added to the principal; interest shall run from the date of completion, but the right to foreclose for any default in interest to be suspended for the first year.

3. The company will develop and improve the property and construct the housing and community features according to plans and specifications, and with a choice of architects, engineers, and contractors, all of which, as well as the contracts, must receive the approval of the Bureau of Industrial Housing and Transportation. The management of the property and the administration of the reserves will be subject to Government inspection and audit.

4. It is proposed that the board of directors be of such size as to allow representation of a number of the local public-spirited interests to become stockholders in the company. The Government should have ample representation on the board of directors. This can be secured by a pledge of enough stock to protect the Government's interests until the Government loan shall have been paid in full, and minority representation can be provided for in the articles of incorporation. The active operation of the company can be conducted by an executive committee chosen under the by-laws with majority and minority representation.

5. The policy of the company will be to rent houses to workmen in the war industries at moderate rentals and in case of sales to sell at prices attractive to the same class of employees. Rentals and selling prices will have to be fixed to give the returns necessary for the various financial needs of the company, including the amortization of the investment during an assumed life of the improvement and the amortization of the local capital.

In fixing rentals and installments the following factors will have to be taken into account:

1. Fixed charges.-Interest to the Government, interest to the housing company or its successor, insurance, and taxes.

2. Reserves for upkeep of rented houses.-Repairs, renovating, and redecorating.

3. Reserve for loss in case of non-occupancy.

4. Overhead expenses of administration.

5. Amortization of total investment.-Government advance and local capital.

The amount of rental ought to be sufficient, if possible, to cover all the above, and certainly should be kept as low as possible.1 In case of sales the installments should not be less than the fixed rentals thereon.

While any lease or deed will run in the first instance to an industrial employee, no selling restriction will be placed upon a subsequent sale by the purchaser, except that in case of the intention of any purchaser (original or subsequent) to sell before the amortization of the total investment he shall notify the company and per

1 This was intended to mean that the rentals should not be so high as to cause hardship to the industrial workmen for whom the houses were built.