Housing Comes Home to Congress
I
HOUSING as a national issue stems from the crusading spirit of the persistent New Yorkers who have been the leaders in housing legislation. Impatient with the limited results achieved by successive housing laws enacted in their own state, and with an eye on the financial aid that only Washington can give, these New Yorkers have fought for a national housing program. The challenge has been taken up by Washington; but although the politicians have been quick to see that housing has opened new opportunities for them, the public has as yet very little understanding of what the Government is attempting and how much may be accomplished.
When, in 1939, the Congress refused to vote an additional appropriation for housing, there was some question raised as to whether this should be interpreted as evidence of opposition to the President’s policies in general or as a specific setback to housing. The answer should be found in the attitude which Congress takes at the 1940 session.
The movement of the ‘housers’ on Washington began in 1931, with President Hoover’s National Conference on Home Building and Home Ownership. It was advanced the next year when George Gove almost single-handed persuaded Senator Couzens to sponsor a short phrase in the Reconstruction Finance legislation authorizing loans for Slum Clearance and Housing purposes. With the advent of the New Deal, the New Yorkers returned in force to insist that a whole separate title in the National Industrial Recovery Act should be devoted to Housing. In 1934 an alliance between certain lending societies and the more economic-minded ‘ housers ‘ secured the passage of the Federal Housing Act, setting up an insurance system for mortgages and an administration (FHA) designed to improve conditions in the field of long-term finance.
The triumph of the ‘public housers’ came in 1937, when the United States Housing Authority was set up with a capital of a million dollars and power to borrow and relend 800 millions, plus the authority from Congress to pledge subsidies in the form of ‘annual contributions’ to local public-housing agencies — such contributions not to exceed 28 millions in any one year, but to be continued for a period not to exceed sixty years.
In 1938, Administrator Nathan Straus went before Congressional committees for both the House and the Senate and reported that he had earmarked or entered into loan contracts for 650 million dollars. He explained his inability to utilize 150 million dollars of the authorized loan fund because of the unwillingness of local public-housing agencies to accept loans unless entirely covered by Federal subsidies. He pointed out that this could be done only when the maximum annual subsidies allowed by law were made, and that the authorization for subsidies was insufficient to cover all cases. Accordingly Mr. Straus requested Congress, in 1939, to increase ‘annual contributions’ from the United States Government to local housing authorities from 28 millions per annum to 73 millions per annum. He also requested that the limit of capital loans be raised from 800 millions to twice that sum.
To understand the situation, which will again be presented to Congress this year, it is essential to inquire into the background of last year’s refusal to meet Mr. Straus’s request for increased appropriations.
II
Criticism of the methods of those who advocate better housing is hazardous. Housing critics risk the appearance of lack of sympathy with fellow citizens who, through no fault of their own, are unable to afford the minimum standard of decent American living. It is astonishing that members of Congress should have risked such criticism at a time when housing, as an issue, had become such a ‘walkover’ that politicians all over the country have been able to whip up the band wagon and drive off without the experts. Why did both Houses of Congress pause to inquire into the consequences of the headlong flight of the newest political band wagon with the magic words ‘Low-Rent Housing’ attractively painted upon it?
The Congressional hearings on the housing legislation of 1939 (S.591) comprise 112 pages of testimony before the Subcommittee on Education and Labor of the United States Senate and 442 pages of testimony before the Committee on Banking and Currency of the House of Representatives. Previous to the hearings Mr. Straus had written to the Senate Committee: —
Based on our experience under the Act, the United States Housing Authority believes that it is workable and that changes in substance of the Act are not necessary. S.591 would merely make additional funds available to continue the program under the present Act.
In his testimony, Mr. Straus expressed the hope that the additional appropriation would permit him to construct enough new houses to benefit a total of 423,000 families, whereas without the increased authorization he believed that the United States Housing Authority could not aid more than 163,200 families. Senator Taft showed particular interest in the ultimate goal of the housing program and elicited from the Administrator the opinion, based upon his knowledge of the experience of England, that the ‘United States ought to be able to wipe out its slums over the next generation’ and rehouse 15 per cent of the whole population through government aid, ‘provided that public housing were supplemented during the same period by the increasing effectiveness of private industry.’ Great pains were taken by the Senators to shed light upon the possible ultimate cost to taxpayers and upon the methods advocated for financing this cost.
It seems clear from the testimony that Mr. Straus lost the support of the Senators for his program largely because his statements appeared calculated to confuse the relationship between the Government’s obligation to pay subsidies referred to in the United States Housing Act as ‘annual contributions’ and the authorization of Federal loans to help pay for original costs.
Mr. Straus, through confusing statements, upheld the theory that the Federal loans were to be self-liquidating. It is obvious that they are anything but self-liquidating. The reason for the appearance of the Administrator before Congressional hearings was to clarify the issues by the testimony of the Government’s expert. Quibbling arguments, such as the following, tend instead to confuse the problem. From page 79 of the published record of the Senate Hearings (S.591, 75th Congress, 1st Session) we quote a specimen of verbal fencing: —
MR. STRAUS: Senator, may I state that I disagree completely with your statement that the loan funds under the program constitute a cost? This is an investment which will be largely made by private investors and will be partly made by the Government in loans for the sake of buildings which will be repaid in full, and I don’t think that can properly be defined as cost.
SENATOR TAFT: You defined it as cost yesterday on your diagram. That was the word you used, and you pointed out how much it was going to cost for every family. I don’t understand the quibbling on the question of cost — of course it is cost.
MR. STRAUS: When you say ‘cost’ to the taxpayer . . .
SENATOR TAFT (interposing): I didn’t say that.
MR. STRAUS: If you mean cost of the project, of course you are right.
SENATOR TAFT: Well, the money is coming from the Government. Whether they are going to get it back or not, that doesn’t make any difference about the cost. The cost is about $4400 per family.
MR. STRAUS: You say it doesn’t make any difference whether the Government gets it back?
SENATOR TAFT: I say it doesn’t affect the question of whether it is cost, whether the Government gets it back.
MR. STRAUS: I thought that was the fundamental thing, sir; whether the Government got it back; the distinction between loan funds which are to be repaid, and the annual contributions which are not to be, seems to me fundamental.
The above discussion took place as part of the presentation of the United States Housing Authority’s Exhibit 12. Mr. Straus had asked to be permitted to sponsor the borrowing of capital funds up to almost two billions of dollars to assure the construction of 423,000 family units. He was insistent in pointing out that since this was a loan it should not be considered as ‘cost’ to the Government.
But Mr. Straus had also asked for authority to commit the Federal Government to pay out over a period of 59 years subsidies aggregating 73 million dollars per annum. This ‘contributed’ money was to be used to pay back the principal and interest on the loans.
Now, gentlemen [continues Mr. Straus on page 82 of the testimony], I would like to emphasize that the Federal loans involve no cost to the Government, as they are fully repayable with interest. Actually they involve an interest profit.
This statement will bear further analysis. Had he deliberately wished to deceive or mislead the Senators before whom he was testifying, Mr. Straus could have chosen no words more apt. Subsidies of 73 millions a year, ‘contributed’ annually for 59 years by the Federal Government, amount by the end of that period to a total outlay of the stupendous sum of nearly 41/3 billions. This sum of 41/3 billions Mr. Straus sought to charge directly to the taxpayers in order to repay with interest an original loan of 13/5 billions of dollars. In other words, by making the loan run for a period of 59 years, it takes $2.20 to pay back each dollar of original cost. Yet Mr. Straus says that the loans ‘involve no cost to the Government, as they are fully repayable with interest.’
Both Representative Frederick C. Smith of Ohio and Girard Lambert, the underwriter of a small public-housing project in Princeton, New Jersey, who testified before the House Committee, were fully aware of the high ultimate cost of amortization strung out over a long period, and the latter went so far as to point out the greater economy of loans maturing in twenty years. Not only did Mr. Lambert give good advice from a business man’s point of view, but he shrewdly put his finger on the greater political attractiveness of smaller annual payments.
He frankly said that he did not blame the men who were running the housing program for yielding to their ‘perfectly understandable enthusiasm,’ but that the Committee of the House of Representatives was looking after the taxpayer’s interest, and, if the public could be made to understand, the public would support the method of finance which cost less in the long run.
II
There is, however, a more cogent reason for the preference for the sixty-year loan by the United States Housing Authority. Putting it simply, the subsidy has been so fixed by law that both interest and amortization can be covered by the fixed annual contribution if the life of the loan is set at sixty years. Hence no administrator, either Federal or local, wants to work up a project on any other basis. Thus the buildings to be built with sixty-year-loan funds must be of a character which will reasonably last for at least sixty years. The buildings must certainly be fireproof and of high standard in every way. Housing calculated for a shorter life, even if it could be built far more economically, is naturally not wanted. There is no incentive to save on capital costs if there is any question of a shorter useful life of the buildings, because the loan then has to be amortized over a shorter period. No local authority wants to pay more annually for amortization, even if money is saved thereby in the long run, unless they can still retain the advantage of having all financing charges paid for them by the annual contribution from the Government. If they are more economical and try to amortize their loans in a shorter period, they suffer, because in that case the Government’s contribution does not cover their financing costs. As it stands, the system of subsidy puts a premium on high cost and on buildings designed, not to remedy a temporary shortage in low-rental housing, but for long service.
To date, the maximum subsidy has always been given, and given in such a way as to charge to the taxpayers not only all of the principal and interest on the Federal loans, but also all, or almost all, of the 10 per cent capital required by law from the local community.
Mr. Straus failed to bring out many of these unfortunate faults in the subsidy provisions of the law, although they seemed self-evident to the members of Congress before whom he appeared. Having said that the existing law did not need revision, both Mr. Straus and his deputy, Mr. Keyserling, devoted themselves to explaining away the ‘costs’ indicated by the figures presented. Their tabulations placed great dependence upon what they were pleased to call ‘interest profit.’ Over and over again at the hearings and in the speeches by Mr. Keyserling since then, the assertion has been made that the proposed authorization of annual contributions of 73 million dollars would cost only 53 million dollars net annually. This figure is based upon the current ability of the United States Housing Authority to borrow on a shortterm basis at 13/8 per cent interest and the legal requirement that the funds shall be reloaned at not less than the going rate of long-term bonds, plus ½ per cent. According to Mr. Straus’s memorandum of July 11, 1939, this means that, when 3 to 3½ per cent is charged for interest to the local public-housing agencies, a bookkeeping profit is shown to the credit of the USHA which is the result of a differential of about 15/8 per cent between the rate at which the Authority can borrow and the rate at which it is required to lend. The bookkeeping ‘profit,’ however, is nonexistent unless the maximum subsidies are charged annually to the taxpayers. It should be clear that what may appear as a departmental ‘profit’ may in reality result in a taxpayers’ loss.
The testimony clearly indicates that neither Senators nor Representatives were satisfied with the soundness of the financial program of the USHA as interpreted by the Administrator.
In justice to Mr. Straus, let it be said that the office which he occupies is administrative, and that not he but Congress created the law setting the procedure under which the USHA was intended to operate. An Administrator of Housing is not expected to concern himself with why it has not been possible for industry to produce decent, safe, and sanitary housing for persons of low income. An Administrator is expected to be an opportunist and, having received the mandate to go ahead, to produce the housing asked for without stopping to ask why others have failed.
Neither an Administrator of Housing nor a framer of housing legislation is expected to be a housing expert; nor is a political leader expected to delay action to take part in interminable theoretical disputes by experts. As a former state senator in New York, Mr. Straus has had sufficient political experience to know how legislation is framed. He assumed his administrative job in Washington with no illusions about the law under which he was asked to operate, even though he expressed enthusiasm for its purpose.
When enthusiasts are transformed into public officials, they become exceedingly cautious about protecting themselves against possible criticism. Some of the safeguards which an Administrator may want to make may be in conflict with the plans of those who have expected to benefit from Federal assistance. So disputes may be looked for between local and Federal authorities. Those who make plans for housing in the great city of New York may have counted on very different methods for overcoming their specific problems of overcongested land and high building costs than the methods advocated by officials of smaller cities, whose chief problems are to get rid of flimsy shanties, clean out back alleys, and put in modern sanitation. There has been so much loose talk about what price ought to be paid for land for housing purposes that it is worth while to give the matter special emphasis here.
IV
It is unnecessary to tell an alert politician more than once that he is likely to be criticized if he allows government funds to be used to purchase high-priced land and thus enrich the very landlords from whose grasp the housing campaign is supposed to liberate the poor rent payer. From such criticism an astute Administrator can easily protect himself. He may, for example, rule that no more than $1.50 a square foot may be paid for land for a housing project to which Federal assistance is given. Certainly plenty of land can be bought at this price, even in the environs of Metropolitan New York.
The crux of the matter is the difference between raw land quoted at acreage rates and city lands, where the price reflects the cost of street improvements and needed community facilities. Since there are 43,560 square feet in an acre, it can readily be seen that 43,560 times $1.50 is a very liberal price for land acquired in large tracts as acreage. Few owners feel they can refuse $60,000 per acre to let farm or fallow land be turned into housing projects. In many of the smaller communities it has been found that outlying lands can readily be purchased far below the limits set. Farmers who have considered $200 an acre a high price are eager to sell when they are offered a mere twenty cents a square foot. Land which has not been subdivided is usually quoted on an acreage basis, and farmers who are good at multiplication consider twenty cents a square foot, or $8700 an acre, a very handsome price.
On the other hand, it can readily be seen that a price limitation of $1.50 per square foot effectively prevents the owner of a shack or a tenement on a 25by-100-foot city lot from realizing more than $3750 for it, and thus protects the Administrator from the criticism that he has permitted exploiting landlords to enrich themselves. The public has learned that speculation in congested city real estate has something to do with high rents. The public is not yet on its guard against the speculative trickery which is practised upon it by confusing the price of raw land purchasable as acreage with the price of subdivided town lots which have been fully serviced with streets, sewers, and water supply.
Congress has specifically permitted land cost to be counted as part of project cost. This may or may not have been wise. But Congress has left open to the Administrator the choice of means to be used for circumventing excessively high land costs, without exposing himself to the criticism of allowing existing owners to profiteer at the expense of the Government. Reference to Section 9 of the Housing Act of 1937 (Public No. 412) shows how broad this discretion was intended to be. It reads: ‘Such loans [i.e. loans not in excess of 90 per cent of development cost] shall be secured in such manner, and shall be repaid within such period not exceeding sixty years, as may be deemed advisable by the Authority.’
Under this provision, had the Administrator deemed it advisable, he might have used his great power to finance improvements, to advance the technique of land assembly and large-scale planning, He need not have limited his procedure to existing methods of land acquisition. Nor need he have depended upon the limitations of the existing mortgage system as the sole means of security for the repayment of loans. The bonds of the local authority might have been secured upon the pledge of the revenue derived from each specific project, this revenue consisting of tenant rent supplemented by subsidy payments from the USHA. Local authorities might have been left free to assemble property by the means most advantageous in the specific case, whether through lease, purchase, or eminent domain.
It would be unfair to blame the eager draftmen of housing legislation for unfamiliarity with all the subtle points of land economics; but when legislative draftmen are wise enough to leave wide discretion to administrative officials, certainly criticism of an Administrator is justified when he imposes inflexible restrictions upon methods of land assembly and stupid restrictions upon land price.
V
In contrast, there are undoubtedly other points where Congress has been arbitrary in the restrictions which have been imposed on housing policy. Although the Housing Act of 1937 has differentiated between the purpose of clearing slums and the purpose of furnishing housing for persons of low income, so anxious has Congress been to offer improved housing conditions to those who cannot pay economic rent that the restrictions imposed have increased the difficulties in the way of clearing slums. It is not fair to blame an Administrator for failure to devise a method of procedure capable of circumventing conflicting legislative limitations.
An Administrator might even expose himself to serious criticism for spending his time trying to do things in ways of his own devising. But again a way has been left open. A broad-minded Administrator should be on the alert for suggestions coming to him from local authorities, based upon definite experience with the conditions of cities of varying size, location, and character. A farsighted Federal Administrator should know how to make the most of constructive criticism by incorporating into his annual report to Congress a summary of suggestions in different parts of the United States. So it might have been possible to have others say for the Administrator what he could not with propriety suggest himself. It is altogether likely that the wider the range of suggestions, and the greater the tolerance with which these were reported to the Congress by the Administrator, in just such proportion would the impression have been created upon the Congress that the great difficulties of the problem were fully appreciated and were well on the way to being mastered by the Authority.
It has been characteristic of the American political system that the will of the people is readily conveyed to both the executive and the legislative branch and that every opportunity is given to develop a type of political genius that is adaptable to changing conditions. Development of policy through legislation and improvements in administrative methods depend largely upon the alertness and the wisdom of local political leaders. Only a leader who lacked wisdom or one whose alertness had been dulled by vanity could miss the opportunity to utilize the timely criticisms and suggestions coming to him from local housing authorities. An alert intelligence is as essential in an Administrator as personal honesty. It is possible that a mistake was made when a deaf ear was turned to criticism, and when Congress was told that no changes in the law were needed and only an increase in the permitted limits of loans and subsidies was desired. At any rate, Mr. Straus’s quarrel with Congress has been followed by the record of strained relationships between the USHA and local public-housing agencies, and the particularly flagrant scries of disputes with the New York City Housing Authority, resulting in the resignation of the latter’s Chairman, Mr. Rheinstein.
In justice to Mr. Straus, it should be pointed out that much of the cause for friction with local housing agencies may have seemed beyond his control. To appreciate the situation, it must be recalled that a prime reason for the initiation of the Federal Works Program and Federal aid for housing was the financial inability of cities to finance their own public works and housing projects. Most of the cities of the nation have lacked the resources to give stability to their housing authorities and to employ competent technicians. Although most state laws permit municipalities to grant the necessary revolving funds to incorporated housing authorities, local authorities have not received the much-needed initial financial assistance from the municipalities. Consequently, all over the United States the local officials of housing authorities must look to Washington for the funds needed to make their work effective. The quickest way to get funds is to do whatever is asked by Washington.
The United States Housing Act of 1937 is entirely silent as to how comprehensive plans for slum clearance and for housing are to be prepared by localities. The Act does state distinctly, however, that at least 10 per cent of original project cost must be contributed by the locality. It would therefore have been in the power of the Administrator to assure the locality that the cost of adequate survey and specific plans would be counted as the first required contribution of the locality, and that no consideration could be given by Washington on loans unless indication had already been given that the locality was able to finance its own administrative staff and technical consultants.
Because no incentive has been given local planning and originality, all sorts of subterfuges have been used. In the City of New York, the Housing Authority has been forced to finance itself out of the sale of old brick secured from demolition projects sponsored by the WPA, and the needed services of an executive for the Housing Authority have been secured by appointing to the Authority at least one member holding a salaried job in the employ of the city. Consequently, although the tenure of office of members of the Authority is secured under the law, the compensation of the responsible officer has been kept subject to the pressure of political expediency as interpreted by the Mayor and the Board of Estimate. This has been directly contrary to the intent of the law, which prohibited city officials from entering into housing contracts and set up an independent corporate entity for the purpose.
The political expediency of getting as much out of Washington as possible has upset the Administration of the New York Housing Authority, even to the point of forcing the resignation of a Chairman who has won universal approval for the ability with which he has handled the planning and construction of the largest housing projects yet undertaken in the United States.
Of course, again in fairness to Mr. Straus, it must be pointed out that in most of the cities in the United States there has been no long tradition for a better housing movement such as that existing in New York City, and that one of the Administrator’s biggest tasks has been the stimulation of a desire for better housing in widely separated localities and widely differing conditions. Mr. Straus’s task as a housing educator has been as onerous as his task as Administrator. A Division of Research and Information has been established with a staff of one hundred. Missionaries have been sent out to preach the need of better housing. District Supervisors and advisors have been set up to handle the promotional work in sections distant from Washington. This policy has had both advantages and disadvantages. Projects planned for local authorities by local architects have been forced to go through an increasingly tortuous and difficult course in order to secure approvals. While it must be recognized that there are indirect benefits to be derived from overstaffed governmental bureaus as training schools for housing experience, sympathy must be expressed for localities that are impatient because of delays due to overcomplicated administrative machinery.
In the single case of a local authority that has been organized with adequate funds, there has been collision between the administrative methods of the USHA and the policy of the local authority. The case of the Alley Dwelling Authority of the District of Columbia, although unique, is an example of what might take place had other cities in the United States been able to finance their local authorities in the way that Congress specifically financed the Alley Dwelling Authority in the District.
It has been the policy of the Alley Dwelling Authority to acquire land in unsanitary inhabited alleys and to replat, replan, and rebuild. Its executive officer, Mr. Ihler, has taken pride in conducting operations on an economic basis and in making its rents reflect the true cost of operation and finance.
After the passage of the Housing Act of 1937, the desire was expressed to maintain the rents in all projects at the economic rate required to pay costs of operation and financing, but to utilize contributions from the USHA to permit the acceptance in the houses of the Alley Dwelling Authority of low-income families removed from unfit homes or families in need of rehabilitation. Therefore the proposal was made to accept the annual ‘contributions ‘ from the USHA, but to apply these as aids to families of lowest income in such a way as to permit them to live in improved housing, but not to upset the fact-revealing bookkeeping established by the Alley Dwelling Authority for its projects. This reasonable proposal of the Alley Dwelling Authority seemed to come in conflict with the policy of the USHA. After long, patient negotiation, which was possible because the Alley Dwelling Authority is located on Mr. Straus’s doorstep, the local authority was able to reach an understanding with Administrator Straus.
VI
It was obviously the intent of Congress that the public should be kept aware of operating costs and methods employed both by the USHA and by local authorities, because Section 7 of the Act specifically requires an annual report by the Authority to be made to Congress each January, and such report is required to include the operating statements of all projects under the jurisdiction of or receiving the assistance of the Authority, including summaries of the income of occupants, size of families, rentals, and other related information.
The Alley Dwelling Authority had to fight to be permitted to keep its books so as to reveal its true costs. In view of the intent of Congress, it is difficult to understand why so little is known about the financial and economic status of other projects operated or assisted by the USHA, especially those which were constructed under the former Housing Division of the Public Works Administration. Many of these have been leased to local public-housing agencies.
In the case of the specific projects, Williamsburg Houses in Brooklyn and Harlem River Houses in Manhattan, the contract provides for a base rental which was calculated to be the expected difference between the cost of operation and the rents received from tenants, with the proviso that, if more was earned, it was to be paid over to the USHA by the local authority as ‘additional rent.’ For the period ending October 31, 1938, the base rent on these two projects, due under the contract, was $295,153. The New York City Housing Authority, through economies in management, which it had itself effected, paid over to the USHA an additional supplementary rent of $119,338.28. The local authority has never been able to discover whether this surplus payment has been credited to amortization for its account, or whether the credit has been used to offset deficits that have been rumored in the operation of projects in other cities. To the best of the writer’s knowledge, no accurate bookkeeping statement has been sent to Congress, as required by law, giving accurate information as to capital costs and operations for each project ‘under the jurisdiction of or receiving assistance from the USHA.’ Honest bookkeeping is the cornerstone of a public trust. Candor and intelligence a e essential to the maintenance of public confidence.
It is known that experience has made it possible to bring down original construction costs in some of the recent projects. The architects of these have been allowed a freer hand, and many of the unnecessary protective and costly requirements have been reduced. In this particular, Mr. Straus deserves the credit for yielding to the insistence of Chairman Rheinstein that his designing architects and engineers should be freed from the restrictive rulings by bureau and division heads in Washington which hampered those who worked for the former Housing Division. This marks a great gain, as the writer can testify from his personal experience. It is not conducive to economy of design to receive orders to provide bunkers for the storage of a full year’s supply of coal and then to install complete oil-burning equipment. It is not economy to be so insistent on Federal standards for incinerator specifications that the space allowances required interfere with typical floor arrangements and produce undesirable partition locations and column spacings.
VII
It is nearly a year since Administrator Straus went before Congress and asked for an increase in his appropriation. When the Congress of 1940 receives the renewal of Mr. Straus’s request, it will be interesting to observe the attitude of the Administrator. Because of the significance of the questioning of Mr. Straus before the Congressional committees a year ago, his current requests will undoubtedly be carefully studied, and the economic soundness of the financial methods pursued will again be subjected to close scrutiny.
In view of the confused ideas about ‘interest profit’ which were revealed in the previous hearings before Congress and the repeated failure to account for operation costs, it will undoubtedly be a matter of curiosity at the present session of Congress to discover the exact status of operation of existing projects.
Congress has voted several times to make public housing an accepted national policy. Even if housing comes home to Congress as a prodigal, it does not mean that Congress will disown housing. The people, however, have a right to require in an Administrator a capacity to grasp the problem with a sympathetic understanding of the difficulties involved, plus an intelligence equal to the task of varying procedure in such a way as to cope with differing local conditions.
There can be no popular objection to the granting of governmental subsidies for such a worthy cause as the clearance of the blighted areas in our cities and assistance for the building of homes where the unfortunates now badly housed can be given a taste of really American standards of life. But the Senators and Representatives who will report upon a new appropriation will insist upon assurances that the bookkeeping of the United States Housing Authority is conducted in such a way that the people know what their housing program is costing them. The people have a right to require scrupulous accuracy that will show not only the original capital cost of housing enterprise but the annual cost of carrying and operating housing projects. The people will want to see the difference, which must be made up in annual subsidies, between the actual cost of operation and the reduced rents which the low-income group who are admitted to housing projects are able to pay. If the Administrator and his assistants are not able to show a sounder grasp of financial principles than was exhibited in the hearings last year, it will be extremely unlikely that a Congress which is growing increasingly awake to the public demand for sound business methods in government can be cajoled into signing a blank check.