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Zones Act has not been repealed or superseded in its intent to exempt foreiga merchandise in a zone from the laws and regulations of the United States affecting imported merchandise.” They also feel that Congress in enacting the Defense Production Act did not intend that the usefulness of foreign-trade zones be impaired.

It is therefore requested that the Currency and Banking Committee of the House write into H. R. 6546 or a subsequent similar bill a provision that

"Foreign merchandise brought to a foreign-trade zone in the United States for any purpose shall not be deemed to have been imported into the con

tinental United States for the purposes of this act.” Assurance is given that by thus preserving the integrity of the foreign-trade zone principle by stopping the jurisdiction of the foregoing agencies at the zone boundaries, no weakening of the purposes of the Defense Production Act will result. It will remain within the authority of these agencies to apply all legal controls on merchandise if and when withdrawn from zone areas.

For example, all commodities subject to section 104 could not enter customs territory from the zones except under the same conditions as though they arrived directly from abroad. Hence, the Secretary of Agriculture's statement of policy "that imports

into the commerce of the United States" of certain commodities would be controlled, is properly interpreted. In like manner, the National Production Authority could determine the terms and conditions under which commodities in a zone shall enter the customs territory of the United States, as could the Office of Price Stabilization.

For purposes of clarity, although the agency is not involved in this act, the powers of the Export Control Board of the Department of Commerce would continue to be effective insofar as any Merchandise is withdrawn from a zone for shipment abroad in the same degree as such powers are effective for merchandise in transit through the United States. Respectfully submitted.

STERLING ST. JOHN, Jr.
(For and on behalf of Foreign-Trade Zone No. 1, New York; Foreign-

Trade Zone No. 2, New Orleans; Foreign-Trade Zone No. 3, San
Francisco; Foreign-Trade Zone No. 4, Los Angeles; Foreign-Trade

Zone No. 5, Seattle; Foreign-Trade Zone No. 6, San Antonio.) The CLERK. The next witness is Mr. Leo Goodman, representing the CIO.

The CHAIRMAN. Mr. Goodman, you may proceed. Do you have a written statement? If so, you may read it or put it in the record, as

you desire.

STATEMENT OF LEO GOODMAN, DIRECTOR, COMMITTEE ON HOUS

ING, CONGRESS OF INDUSTRIAL ORGANIZATIONS Mr. GOODMAN. Thank you very much, Mr. Chairman.

On the behalf of the CIO and the CIO housing committee, I appear here this morning particularly in regard to title II of H. R. 6546, supplementing the testimony of James B. Carey, who appeared here last week on the whole bill.

The CIO sent me on a trip throughout the United States to make a first-hand study of the effect of this committee's work on rent control these past few years, and I hope to have an opportunity to present the full report of that trip to the committee.

This committee has considered this subject seven times in the last 5 years, and I would like to call the attention of the committee to one set of the hearings, and information you have had on this subject. This is the hearings conducted in 1947, 1948; 1947 has 600-odd pages; 1948, 460 pages; 1949, 852 pages; 1950

Mr. COLE. That is solely on rent control?

Mr. GOODMAN. Solely on rent control. 1950, 560 pages; the special act, for temporary extension, again in 1950, 51 pages, and then it was

included in the extensive hearings on the Defense Production Act, as amended, in 1951, and the separate hearings on those further extensions.

There you have thousands of pages of testimony, gentlemen, regarding the problems of rent control in this country, and this Congress, which works as hard as it does, I think just as a time saver, ought to adopt the provision which the chairman has put in this bill extending the act for at least 2 years, so that you will not once again have to have another one of these thick volumes every 6 months, as you have had, and overwork yourselves and the other Members of the Congress, who take the time to read these hearings, to be familiar with the testimony that has been brought before this committee, and vote the action which the facts require.

The CIO has been interested in this subject because rent and housing costs have constituted the largest single expenditure of its members, and the CIO's interest is expressed each year in a resolution which is adopted by its annual convention—its governing body—and I have handed to each of you a copy of this resolution and would like, at this time, Mr. Chairman, to insert it in the record.

The CHAIRMAN. It may be inserted at this point.

(The resolution referred to is as follows:) CIO RESOLUTION No. 30 on Housing AND RENT CONTROL, CIO THIRTEENTH

ANNUAL CONVENTION, NEW YORK, N. Y., NOVEMBER 5-9, 1951 With millions of American families already without adequate housing, the mobilization program since the Korean war started has created new and additional housing problems throughout the country. With the supply of building materials once again growing, short, the shortage of housing once again impedes the production-program schedules.

Millions of families forced to live in slum areas are being compelled by greedy real-estate interests to pay an increasing portion of their family income for rent. The census of 1950 reveals the astounding fact that a growing portion of lowincome families, particularly those with incomes of $3,000 a year or less, are paying 35 percent or more of their income for housing. In return for this exorbitant charge, more than 244 million families are only able to rent units described by the Bureau of the Census as dilapidated, and an additional 64 million families secure housing either without running water or without private toilet facilities. Despite these deplorable conditions, the National Association of Real Estate Boards is conducting a campaign to "raise the whole scale of residential rents

to from 35 to 50 percent of family income.” Though it extended rent control for another year, the last session of Congress was pursuaded by the real-estate interests to provide a 20 percent increase above the rent level in effect in the middle of 1947.

Congress also provided for continuation of decontrol under local option. Thus, while permitting Federal rent control in critical areas affected by the mobilization program, the local-option loophole makes possible the immediate decontrol of these areas by local governing bodies subservient to real-estate interests.

Federal housing officials have also used their powers to evict families from, and to destroy, Lanham Act World War II housing in areas where there is a shortage of low-rent housing, but a surplus of over-priced apartments, built with Federal credit, at rentals beyond the ability of workers to afford.

Concentration of the Federal program on the manipulation of credit controls has rationed the reduced supply of new housing to those who can afford to pay most, rather than those who need housing most. Meanwhile construction in military and defense areas has dropped off due to withholding of funds by the mortgage banking industry in its campaign to force higher interest rates, particularly on GI home loans guaranteed under the GI bill of rights. While the Government guaranty protects the mortgage lenders, veterans who have purchased housing under the GI bill are not being protected from unscrupulous speculative builders who fail to meet contract specifications provided in the law. The House of Representatives has set up a special committee to investigate failure of the Veterans' Administration to make the required inspections.

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Congress responded to the position taken by the CIO on regulation X by suspending this regulation in critical areas in order to make housing available at the place, time, and rental needed to assist the mobilization effort. The restrictive effect of regulation X on home buying and home building already has caused an excessive use of trailers and other types of mobile housing as substitutes for permanent housing in vital production centers throughout the United States. Thus workers' families are being forced into high-cost inadequate temporary housing in areas where housing is needed for permanent use for many years to come: Now, therefore, be it

Resolved: 1. That the Administration should recommend, and Congress should enact, amendment of the Rent Control Act to provide for stabilization of rents throughout the United States as long as the defense mobilization effort continues and the housing shortage prevents normal bargaining relationships between landlord and tenant. The act should permit decontrol of rents in a local community only when the vacancy ratio in low and middle income housing in that community is equal to 10 percent of the housing supply.

2. The CIO urges President Truman to call a conference to review housing legislation and administration of the present housing program, such a conference to include representatives of labor, veterans, farm, church, welfare, and other organizations concerned with the interest of the millions of families who need good housing at rents and prices they can afford to pay.

3. That Congress should provide for the full use of all Lanham Act World War II housing located in defense production areas without reservation as to veteran status of defense workers eligible to occupy such housing. The Government must properly maintain this valuable asset.

4. That Congress should enact a middle-income housing program to permit workers in newly established production centers to meet their housing needs through mutual and cooperative associations eligible for long-term, low-interest rate contruction and mortgage loans from RFC.

5. That Congress should authorize sale of Government-owned low-rent housing to occupants whenever 50 percent or more of the occupants exceed the existing income ceiling for occupancy of such housing. Proceeds of such sales should be used to build additional housing for low-income families.

6. That Congress should remove the restriction in the present appropriation act which limits public housing to 50,000 units a year, and it should permit the public housing program to proceed up to 135,000 units a year, insofar as materials are available, in accordance with the 1949 Housing Act.

Mr. GOODMAN. The total presentation which I hope to make this morning is an implementation of the recommendations contained in that resolution, and to amplify those recommendations with the experiences which I have had in the production lines, in the factories, and with the workers who are producing the war goods throughout this country, and their experiences with the administration of the act which this committee has put on the books,

Probably the most serious effect which our organization attempted to bring to the attention of the Congress last year was stated most succinctly by the mayor of the city of Los Angeles, Calif., who at that time had said, in a bulletin, a copy of which each of you has, a reporting of our economic outlook entitled “The Housing Fiasco." "Manpower requires houses. No house, no manpower, no airplanes.”

And gentlemen, today in San Diego, Calif., aircraft workers are living in automobiles.

The effect of that was stated to the Congress here just a day or so ago by Secretary of Defense Robert A. Lovett, when he said that the increase in military plane production "was not good enough."

The reason for that is that we have not implemented, to the intents and purposes of this committee, the Rent Act which is on the books, and the Rent Act which is now law has a loophole and a weakness which I hope to illustrate to you in some detail. But before I go into that, in amplification of Mr. Lovett's statement, I would like to insert into the record the report of the experience of some two hundred em

ployers throughout the United States, in their attempt to secure adequate manpower, in the face of the housing shortage and rent diff culties which exist in their communities.

For example, in Gary-Hammond, Ind., the personnel director and public-relations representative of the United States Steel Corp. states:

The United States Steel Corp. companies will not employ anyone who does not already have housing now, and they will not further import any families.

The Inland Steel Corp., represented by Mr. Ralph Hoover, personnel manager, states:

The company is now recruiting single men in Texas, because men with families cannot find housing.

He reported a shortage of the skilled machinists and the older experienced workers, who could not be imported because of the lack of family housing.

And so, all through the country, plant after plant, employer after employer, are having these difficulties, of the inability to secure workers that are needed in their defense plants because of the housing and rent situation which exists in their communities.

Mr. Chairman, I would like to put this whole report into the record so that the members may see it without my taking the time at this point to read it.

The CHAIRMAN. That may be inserted into the record.

(The report referred to is as follows:) REPORTS FROM EMPLOYERS REGARDING EFFECT OF HOUSING SHORTAGE ON

MANPOWER SUPPLY 1. Calumet area, Indiana (Gary, Hammond, East Chicago, and Whiting), October

1950 United States Steel Corp.: Mr. Bancroft Yarington, public-relations representative of the United States Steel Corp., stated that United States Steel Corp. companies will not employ anyone who does not already have housing, and will not import families.

Inland Steel Corp.: Mr. Ralph Hoover, personnel manager, Inland Steel Corp., stated that his company was recruiting single men, in Texas, because men with families could not find housing. He reported a shortage of machinists, and commented that older, experienced workers could not be imported because of the lack of family housing. This corporation; with more than 18,000 workers anticipated an increase of 1,000 employees by 1951. 2. Pueblo, Colo., October 1950

Colorado Fuel & Iron Corp.: Mr. Milton Andrew, employment superintendent and Mr. William Heath, his assistant, said their firm had increased its employment from 7,900 to 8,100 over the past year and that the corporation was unable to import unskilled or skilled workers because there was no available family housing. Mr. Heath said most of the employees could not afford to pay more than $60 per month for rental housing.

Pueblo Ordnance Depot: Col. Charles H. Keck, commanding officer, said the depot anticipated a total employment of 4,500 persons by January 1951, compared with the current total of 4,100 and with 2,000 a year ago. Mr. L. A. Smith, personnel officer stated that 25 to 30 persons were turning down jobs each month because they could not find adequate housing. 3. New Castle, Ind., April 1951

Perfect Circle Corp.: Mr. Dallas Lunsford, general manager, and Mr. Alan J. Fromuth, personnel manager, said that they were aware of a shortage of housing in New Castle and that it was difficult to retain employees who were unable to find accommodations for their families.

World Bestos Corp.: Mr. W. J. Nanfeldt, general manager, said that he knew of no housing available for the corporation's employees in New Castle, and that

good employees had often been lost to the corporation because of the lack of housing for their families.

Davis Foundry Co.: Mr. J. F. Shank, vice president and general manager, said that the shortage of housing was hindering the company in its plans for expansion.

Chrysler Corp.: Mr. James W. Lonabaugh, personnel director, said that several employees had resigned because of their inability to find housing accommodations. He felt that there was a definite shortage of all types of housing in the city and that the expected increase of employment in the near future would create a problem. The corporation expected to increase its personnel very shortly by 300 to 500 employees. 3. (a) Kansas City, Mo., October 1950

Bendix Aviation Corp., Kansas City division, Missouri, B. M. Walter, director of industrial relations: * * During the first year of our operation certain key personnel were brought into the area by us. Our records indicate that these people experienced a waiting period of from 60 to 180 days before finding suitable housing for themselves and their families.

“Many of the people who have been transferred in or hired out of the area have been obliged, against their wishes, to buy homes due to their inability to meet the prevalent rental rates.

"The present labor market in this area will not adequately cover our anticipated needs. It is felt that we will experience considerable difficulty in assisting new employees who have been recruited from outside the area in obtaining adequate housing. The problem becomes especially acute due to the fact that the available rental facilities are in the $100 bracket and our average base hourly rate amounts to $1.504 making it impossible for these employees to consider these facilities." 3. (6) Overland, Ferguson, and Jennings, Mo., September 1950

McDonnell Aircraft Corp., Mr. R. B. Hansen, manager of properties, said that this firm had increased its employment by about 1,000 over a 4-month period, and expected to add 3,400 more employees within the following 18 months. He said that frequent resignations occurred because of the inability of employees to find housing at rentals they could afford. 4. Canton, Ohio, July 1951

Republic Steel Corp.: During the year of 1951 we have been faced with a shortage of both skilled and unskilled labor which could not be filled locally and it has been necessary for us to recruit employees from other areas. We have observed that these people whom we have recruited from other areas have had difficulties in finding housing. Generally sleeping rooms are available, but when facilities for their families are sought such as houses, apartments, or housekeeping rooms, they are very scarce. Many of these newly recurited employees have resigned and left this area due to these conditions. We feel that housing conditions have increased labor turn-over greatly. (Mr. A. J. Blantz, superintendent, industrial relations.) 5. Lorain, Ohio, October 1950

American Shipbuilding Co.; Mr. C. Rigo, assistant employment manager, with an employment of about 400, said that the company was recruiting 200 workers from the east and west coasts within a month and would expand its personnel to 2,000 by mid-1951. The company was warning applicants that family housing was not available in Lorain, but that accommodations for single men were available. Difficulty was anticipated in retaining new personnel, despite the warning. National Tube Co.; Mr. W. H. Reese, supervisor of personnel, said that *

there was a need for an estimated 1,500 famlily dwelling units in Lorain. 6. Marion, Ohio, December 1950

Marion Power Shovel Co.; Ralph W. Workman, personnel director. "In the past 9 months our plant and all other plants here in Marion have considerably increased their working forces. In addition to this increase we have two new employers whom I understand expect to employ several hundreds of people. This expansion in industrial employment has not been met entirely and cannot be met by local residents. Therefore our community has witnessed an influx of workers, many of whom have not yet been able to bring their families to Marion. Thus our requirements for housing are large and the supply is inadequate."

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