Secretary MARSHALL. That is correct.

Mr. SMALL. As we read the present law, it does not cover command facilities, and putting up these new air bases, and facilities for the other military departments, we want to act rapidly and fast, as soon as we get the money to go forward with these plans.

If we have to stop and wait for a long court procedure, it may be a year or more before we can take over and actually do what we want to do. This way, with condemnation, it is our feeling that the private property owner is as well protected as he was before, and yet we get the benefit of immediate action.

Senator SCHOEPPEL. You don't contemplate going beyond the categories you have just enumerated?

Mr. SMALL. Not in the Department of Defense; no, sir.

Senator BRICKER. What is there in the bill that limits your requisitioning authority?

Mr. SMALL. We had a long discussion, I thought, with this committee on that particular point, and the lawyers pointed out the language which has been interpreted, within the other departments of the Government, as limiting us.

We

The CHAIRMAN. The language should be changed, in my judgment. It is our hope, and I think the committee decided, that we would contact the man who is in charge of the real estate division, as Assistant Attorney General.

Senator SCHOEPPEL. General Marshall, you made mention a while ago of the necessity for rent controls. Obviously in a number of the States we have local State laws, and broken down into smaller units, we have cities, and we have areas that have the machinery for rent controls.

This committee has had repeatedly before us, and some of us on this committee have wondered if the military knew where they were going to put these strategic installations, some of them already built, some already in a position with additional facilities to be reactivated, the Department of the Military, or the Defense, or the related departments, having to do with these things, have been very slow to advise where this impact is going to hit.

Now, why is it that we haven't been able to get-and I don't mean to be critical about it from the related agencies, a designation of those places, so that the individual areas, and those interested in housing, could have made proper application, or simultaneously with your determining the defense area, that regulation of X could not have been released so that the impact of this rent wouldn't have been so terrific? In other words, you would have had builders in there building units, and I can think of three or four instant places where the military, or your related agencies, have been dragging their feet, and we have requested repeatedly months and months ago for designations which would have proven helpful, I am sure, in alleviating the situation on housing that you so badly need, and the skyrocketing of some of these rents which I do not like and which I deplore.

Have you any enlightenment to give us on that score?

Secretary MARSHALL. I can't personally, but maybe Mr. Small can. I don't know why the delay in informing you gentlemen. I was unaware of such a question.

Mr. SMALL. As far as the military end of it is concerned, on those things that we have appropriations for, they are matters of public knowledge. Everyone knows where those projects are, because of hearings on them up here on the hill. We have projects coming forward for fiscal 1952, on which we have not yet had hearings on the hill, and until we do tell the Congress exactly where these things are and they approve or disapprove the projects, I don't think we should give out the word.

The other phase of our problems is in industrial plants. Take, for example, where they put up a new steel plant in an area where we have no housing now. Every small community close to there will suffer from the same thing. You have those instances where defense plants are involved, scattered across the country, and defense supporting plants scattered across the country. It would be enormously difficult to come up to the Congress and say "let's appoint Keokuk as a defense area" because of an industrial plant that is going to take on hundreds of new people, or because of this, that, or the other reason, and have each one of them specifically set forth. Since the primary concern of the military departments is with munitions end items, we are not particularly qualified to give you the over-all picture as to the need for housing in industrial areas. That information could best be given to you by the Defense Production Administration.

I think the other way is more flexible, and gives us what we want. The exercise of power, I would think, would be based upon findings of fact.

Senator SCHOEPPEL. Mr. Small, I thoroughly agree with you, but you certainly know, or your related agencies know, where you are going to go.

For instance, we have activated plants, and activated installations that have been activated months ago, and today, some of your related agencies tell me over the telephone that they haven't been able to get the military or the related agencies to indicate that those are defense areas and critical so they can release these regulations X. Now, how can you explain that? I am serious about that, because that has repeatedly been before this committee.

Mr. SMALL. I think what I would prefer to do, if you don't mind, Senator, is to give a formal statement on it, and let our real estate people give the facts as they know them.

I am not a real estate man, and I hate to talk off the cuff on it. I am pointing out some of the problems of attacking this by rifle shot, when we need a flexible approach. We will give you a statement on the service part of the problem. I suggest that you ask DPA to give you comparable information on the need for housing near industrial plants.

The CHAIRMAN. That is what we need.

Senator SCHOEPPEL. I appreciate that. Obviously months have elapsed in some of these places where applications, or the machinery could have been placed in motion to have additional housing under way had those restrictions been released, and even for a time, because we wouldn't have had this impact then about these increased rents that effect military personnel who go into these points and places.

Senator CAPEHART. If the Senator will yield, the Government has the authority now to relax regulation X in these given areas, but we haven't been able to-and you will find those controlling housing

haven't been able to get what they call "clearance" from the military to do it.

We have many instances under the so-called Wherry Act where houses could have been built months ago.

Secretary MARSHALL. The Wherry Act affects permanent quarters, as I understand it.

Senator CAPEHART. That is right; permanent buildings. By this time some of the

The CHAIRMAN. It has been suggested that the Army, Navy, and Marine Corps are going to have a special bill up here with a large grant of money to build houses. This committee passed a housing bill some time ago in the hope that private industry might keep building. Several years ago the Armed Service Committee did have a special bill. As Senator Schoeppel said, it has been suggested that they put on rent control in areas declared critical to national defense by the Secretary of Defense, and that is the only basis on which it should be put.

Rent control would be put upon those places, and allow people to have an opportunity to have regulation X and housing restrictions removed so people can go in and build houses.

Do you know whether they are going to send a special housing bill down here?

Mr. SMALL. Not in my understanding. The housing we are contemplating in fiscal year 1952 would be included in the public works bill.

The CHAIRMAN. It is all the same. If you put it in either bill, it takes it away from private building people. That is what you did several years ago, and I am not criticizing, you are getting the houses built, but there are plenty of private people willing to go there, if we can find where the critical areas are.

I know what is going to happen: the housing bill is going to stay in the House. This committee isn't going to pass any rent-control bill. You are going to go ahead and bring the public works bill down here providing for these houses to be built by the military. That is the way I see the picture. I may be wrong.

Mr. SMALL. Let me undertake, Senator, to come up with a statement pointing out exactly what the military need.

The CHAIRMAN. Perhaps we can get the Housing Administration to act, so we can get the regulations relaxed. Senator Schoeppel has a problem in his State, in Topeka-we all have them in our different States. I know you are going to get a housing bill, but I would like to see them built by private industry, and the controls relaxed or removed.

Senator CAPEHART. I think it is true of the committee, it is certainly true of myself, that I would go to any reasonable extreme to do anything that was necessary to get housing in these critical areas of military establishments and defense establishments I would go to any extreme to get the housing for them. That has been our position for months and months, but we haven't been able to get our teeth into it for the simple reason that we have not been able to get anyone to tell us what are the critical areas.

I think you would find this committee would go to any reasonable extreme to furnish houses for the boys in the Army, and in defense areas, and the atomic installation points, and we want to do that. Secretary MARSHALL. I will see that you get the data you wish. (The information referred to follows:)

Senator BURNET MAYBANK,

MUNITIONS BOARD, Washington, D. C., June 5, 1951.

Chairman, Committee on Banking and Currency,

United States Senate.

DEAR SENATOR MAYBANK: During my appearance before your committee on May 29, I was asked for certain additional information concerning the housing policy of the Department of Defense and concerning the areas in which critical housing conditions now exist or are expected to develop. All of the information submitted is unclassified.

For fiscal year 1952, the Department of Defense will request appropriations for family housing only for those permanent installations which by reason of extreme isolation or excessive costs cannot be provided housing under title VIII of the National Housing Act. In addition, the Department will request funds for a few units for key personnel at some nonpermanent bases.

To the maximum extent possible, the Department will continue to program housing at permanent installations under title VIII of the National Housing Act. However, units can be provided under this legislation only to meet permanent requirements at permanent installations. It cannot be used for emergency augmentations at permanent installations, nor for any of the requirements at nonpermanent bases. Title VIII is not affected by regulation X, and is not affected by critical area studies.

At the present time, there is no existing legislation which can meet the need for additional housing units for programed increases of personnel at permanent bases above the permanent garrison strength or the impact of opening or reopening nonpermanent bases where only a very few family houses are to be provided by the military. Mortgage insurance under title II of the National Housing Act requires a finding by the Administrator that the housing is required to meet a long-term need and that this need meets a test of economic soundness. For this reason then, title II is under similar limitations to title VIII in its application to other than permanent needs. It must be obvious that a large proportion of service needs for family housing may or may not fall in the permanent category depending upon international developments.

To the extent that long-term needs for housing exist and can be determined, a relaxation of the credit controls under regulation X is helpful. However, such relaxation only restores the status quo prior to the issuance of regulation X and does not provide any means to meet other than permanent long-term needs.

Title II is a means of insuring mortgages on housing units, but it does not provide the supporting community facilities, nor will a relaxation of credit controls provide such facilities. As an example of this fact, we are advised that a recent survey of the Camp Lejeune area revealed a need for over 3,800 permanent units over and above the existing and proposed Navy and Wherry units at that base. However, the existing community facilities in the vicinity can only support about 800 more permanent housing units. In addition to the 3,800 permanent housing units a need exists in the area for approximately 2,700 units of a less permanent nature.

The relaxation of credit controls alone will not provide the needed housing. The enactment of the Defense Housing Act will enable the building of additional new units under one or the other of its proposed measures. However, even with such aid, control of rent schedules in areas designated as critical by proper authority is essential in order to prevent spiralling of rents for existing housing where the impact of the defense effort is material.

The attached lists show the areas which are or will become critical because of Department of Defense military and industrial activities.

Sincerely yours,

J. D. SMALL, Chairman.

ACTUAL OR PROSPECTIVE CRITICAL AREAS INVOLVING Department of THE ARMY [Those areas known to be under rent control are designated with an asterisk]