My contention is in the imposition of rent control-and it may be necessary now; I think it may be in the defense areas, especially where the Government is putting up atomic-energy plants and things of that kind—there must be taken into consideration the present value of the propery and the adulteration of the dollar that has been going on, the depreciation of that dollar. If it is not, you just simply place a greater burden of this whole war effort upon the people who are trying to save a little bit of money and buying a home for rental purposes. As I said earlier to Hr. Wilson, I am not interested in the bigproperty owner, the big apartment-house owner. He can take care of himself. He has the contacts, he has the lawyers, he has the accountants, who can work out his problems. He has been doing pretty well.

But it is that poor little fellow who cannot hire a lawyer, who has one house for rent-and more than 50 percent of the units are owned by people who only own one rental unit-it is that great class of people that I concern myself about, because I have always felt that my country is doing justice among all people, among all classes; even though a man has worked hard and tried to save some money for his needs in his old age, he ought to be taken care of by his Government and protected by his Government on an equal plane with every other segment; the wage earner, the manufacturer, the investor, and so forth. That is the thing that I am seeking and I think the rest of the committee is trying to seek an equitable solution to that problem which has been intensified throughout the years.

Mr. Chairman, there is one thing here that I would like to submit. I do not have time to go over it thoroughly. This is from the Economic Indicators of April 1951, prepared for the Joint Committee on the Economic Report for the Council of Economic Advisers.

On pages 10 and 11 we have charts. If we could make these a part of the record

The CHAIRMAN. Well, we could, but I think what you asked for would be a lot better than this.

Senator BRICKER. That is right, because it would give us the very problem.

The CHAIRMAN. For pre-Korea as well as the other 8 months. Without objection, pages 10 and 11 of the Economic Indicators of April 1951 will be made a part of the record.

(The information referred to follows:)

AVERAGE HOURLY EARNINGS - SELECTED INDUSTRIES

Hourly earnings in durable-manufacturing industries increased over 11⁄2 cents in February, while earnings in nondurable manufacturing remained the same. When adjusted for price changes, both dropped.

• CURRENT DOLLARS DIVIDED BY CONSUMERS' PRICE INDER ON BASE OF 1950.100. DATA FOR 1948 AND 1949 HOT STRICTLY COMPARABLE WITH 1950.
SOURCE DEPARTMENT OF LABOR.

COUNCIL OF ECONOMIC ADVISERS

Current dollars divided by consumers' price index on base 1950-100. Data prior to January 1950 were divided by the unrevised index for 1950 and subsequent data by the revised index for 1950. See note 1 to table on p. 3.

Not available.

Preliminary estimates.

Bource: Department of Labor.

Secretary TOBIN. Senator, I would like to make this observation and say that the alternative to rent control-and rent control is not rent freezing-is to permit the law of supply and demand to operate.

The CHAIRMAN. We never got around to the law of supply and demand. I mean even with the magnificent job that was done in the building of homes here since the war, we got so far behind that we never caught up. Maybe if we had 2 or 3 years more of a million and a quarter or a million and a half units, we might catch up.

my

Secretary TOBIN. I would like to cite the historical development of native State of Massachusetts in the First World War.

AVERAGE WEEKLY EARNINGS - SELECTED INDUSTRIES

Weekly earnings in durable-goods manufacturing industries increased by over $1 in February, chiefly because of a longer workweek. The increase was about 20 cents when adjusted to the 1950 price level. In nondurable industries, earnings decreased slightly as the workweek was shortened.

• CURRENT DOLLARS DIVIDED BY CONSUMERS' PRICE INDEX ON BASE 1930+100, DATA FOR 1948 AND 1949 HOT STRICTLY COMPARABLE WITH 1950.
SOURCE DEPARTMENT OF LABOR.

COUNCIL OF ECONOMIC ADVISERS

Current dollars divided by consumers' price index on base 1950-100. Data prior to January 1930 were divided by the unrevised index for 1950 and subsequent data by the revised index for 1950. See note 1 to table on p. 3.

• Narutable.

• Preliminary estimates.

Source: Department of Labor.

We had a Necessities of Life Commission that started reporting on the housing situation in the State in 1918. They made the prediction that we would come into balance in 1920. In 1920 they made the prediction we would come into balance in 1921. In 1921 they threw up their hands and they said it was hopeless and they did not know when we would come into balance, and we came into balance in 1922.

I lived in an area in which the average rental for a three-decker house was $15 a month, just at the start of the First World War. By 1920 those rents had gone to $45 a month, over 200 percent increase in the meantime, and I can tell you great economic distress came to the people who lived in the area.

I agree with you, Senator, whenever we put on controls it is never completely equitable or never completely just. On the one hand, you have this slight interference, I will say, with the operation of private enterprise which we have to do to all phases of the economy in emergencies such as we are in, or the other alternative is wild and uncontrolled inflation. We have to take our choice, and I think we will all agree that controls are better than wild and uncontrolled inflation. That is the alternative.

Senator BRICKER. All I seek is that there might be equitable controls and there might be some consideration given to this group that I was talking about that had not been equitably treated in the interim, because there has only been about a 15- or 20-percent increase, maybe a 25-percent increase, in rentals on those single units of this 50-percent ownership, or, say, 82 percent which own four rental units or less. During the interim, when wages have been going up tremendously and prices have been going up enormously and at a terrific rate, that fellow has been deprived of that equality of opportunity either to get the value of his property if he wants to sell it, due to the increased value of other things, or to get a return upon the value of that property if he wants to hold it.

Secretary TOBIN. Of course, they did get another economic benefit. They were running a very low percentage of rentals, vacancies were running quite high in multiple-dwelling units and a great many singles before the last war.

Senator BRICKER. That has been true in the big tenement apartment houses.

Secretary TOBIN. Then came the time when they were filled to capacity, which was one of the factors that contributed to a much better return for those who had money invested in those properties.

Senator BRICKER. That was particularly true of the big apartment owners, but it does not apply with equal impact to the individual who owns one apartment or something like that, or a two-family house. Secretary TOBIN. Well, you see what has happened in Houston, where you have a greater than 50-percent increase in the average rental in a period of 18 months. You can appreciate what would be happening

Senator BRICKER. That involves 11 percent of the cost of living. Fifty-nine percent since the war; add to that the 15 percent that might have been added before rent controls were taken off, and there you have yet not nearly approached the increase in wages or the increase in prices of other commodities, food, for instance, which takes up much more of the cost of living, or in profits, even to the investor, and, certainly, profits to industry generally.

The CHAIRMAN. Any further questions?

Senator FREAR. Mr. Secretary, I am a farmer.
Senator BRICKER. And a good one.

Senator FREAR. And one question pertaining to the farmers is, What is the average hourly return to a farmer operator at the present time, do you know, per hour?

Secretary TOBIN. You mean a farmer only?

Senator FREAR. Where the farmer lives on the farm and owns and operates it.

Secretary TOBIN. Statistics of that kind for a farmer-owner probably might be found in the Department of Agriculture. No; I do not have such figures.

Senator FREAR. The figures that came down, and I assume they came from the Department of Agriculture, it was about 58 and a fraction cents an hour.

Secretary TOBIN. There are many factors that would have to enter into that. That probably might include the housewife and probably included the children on the farm.

Senator FREAR. No, sir; that is the one man; that is the one man of the family. If his children worked and were given any compensation or were not given any compensation, that was out, but that is the farmer-owner-operator figure.

Senator BRICKER. If I remember it, Senator, if conditions have not changed, that farmers' children are not paid very high.

Senator FREAR. I doubt if they were paid anything, as far as that goes.

Secretary TOBIN. The figure seems to me to be so extremely low that the only way I could figure it would work out is that they probably took the total man-hours the members of the family would work on the farm and divided it into the total net income of the farm for

the year.

Senator FREAR. I could have been ill-advised or misinformed. I am not attempting to give any misinformation but I may be.

There has been a lot of talk about this cost of living we have been talking about which is running now between 35 and 40 percent of the workingman's dollar that goes for food. A loaf of bread now costing 16 cents, if the farmer gave his wheat to the miller it would still cost that same fellow 13.4 cents a loaf. A can of pork and beans that he buys at 16 cents, if the farmer gave the beans and the pork it would still cost him 14 cents; tobacco, cigarettes, for instance, a 20-cent pack of cigarettes, if the producer of tobacco gave him tobacco it would still cost him 17 cents; a $50 wool suit would cost him $40.50. So the increase over what the farmers get-and they are talking about the price of food, and you mention very specifically on page 8, "to stabilize the prices of agricultural commodities," it looks to me like the poor old farmer, although I have heard and read reports at times that he is doing pretty well here lately, I do not know as that bears out in all instances. So that that little part that the farmer gets out of the retailers' dollar and the increased cost of living is almost insignificant, that is, by percentage it is.

Secretary TOBIN. When I said "stabilize," and what I had in mind under the program, instead of having parity established every month, you are going to establish parity at the start of the crop season which will contribute to stabilization. That is what I meant by what I said. The CHAIRMAN. The statistics all show, as the Secretary knows, that the only income in America that has consistently gone down over the period of the last 5 years has been the farmers' income. I will agree with you that labor has not kept up with the price of food that they have to buy in the store. Nevertheless, I think you will agree with Senator Frear from the statistics we see here that the only people whose income has gone down has been the farmers, because of the lack of crops, of weather, disaster to crops, and so forth and so on.