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Full text of "National defense migration. Hearings before the Select Committee Investigating National Defense Migration, House of Representatives, Seventy-seventh Congress, first[-second] session, pursuant to H. Res. 113, a resolution to inquire further into the interstate migration of citizens, emphasizing the present and potential consequences of the migraion caused by the national defense program. pt. 11-[34]"

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3 1 









H. Res. 113 


PART 17 

JULY 18, 19, AND 21, 1941 

Printed for the use of the Select Committee Investigating 
National Defense Migration 









H. Res. 113 


PART 17 

JULY 18, 19, AND 21, 1941 

Printed for the use of the Select Committee Investigating 
National Defense Migration 

603G6 WASHINGTON : 1941 

.'7 21 1941 


JOHN H. TOLAN, California, Ctoirman 



Robert K. Lamb, Staff Director 

Mary Dublin, Coordinator of Hearings 

John W. Abbott, Chief Field Investigator 

Harold D. Cullbn, Associate Editor 
Josef Berger, Associate Editor 



List of witnesses V 

Friday, July 18, 1941, morning session 6683 

Testimony of Dr. Thomas Parran 6683,6690 

Statements by Dr. Thomas Parran 6684, 6687, 6694, 6696 

Testimony of Charles P. Taft 6710,6715 

Statement by Charles P. Taft 6710 

Testimony of Arthur J. Altmeyer 6724, 6781, 6787 

Statements by Arthur J. Altmeyer 6724, 6739, 6744, 6751, 6757, 6763 

Testimony of Oscar D. Hollenbeck 6786 

Friday, July 18, 1941, afternoon session 6795 

Testimony of Noel Sargent 6795,6798 

Statement by Noel Sargent 6795 

Testimony of James Carey 6810,6817,6831 

Statement by Philip Murray 6811 

Memorandum by Congress of Industrial Organizations housing com- 
mittee — 6827 

Saturday, July 19, 1941 6833 

Testimony of C. B. Baldwin 6833,6868 

Statements by C. B. Baldwin 6833,6837 

Testimony of Charles F. Palmer__ 6876, 6S82, 6884, 6892, 6894, 6900, 6904, 6913 

Statements by Charles F. Palmer 6878, 

6883, 6885, 6892, 6896, 6901, 6912, 6917 

Testimony of John M. Carmody 6925, 6932, 6938 

Exchange of telegrams ^ 6946 

Introduction of exhibits 6949 

Exhibit 1. Solution of Defense Housing Problem 6949 

Exhibit 2. Text of Lanham Act, as amended 6955 

Exhibit 3. Text of amendment to the National Housing Act (title 

VI ) 6960 

Monday, July 21, 1941 6973 

Statement and testimony of R. V. Billington 6975 

Statement and testimony of John A. Kratz 6978 

Statement by Katharine F. Lenroot 6982 

Testimony of Edith Rockwood and Laura Elmore Warren 6992 

Statement and testimony of Dr. J. W. Mountin and Dr. R. A. Vonderlehr 6994 

Statement and testimony of Philip Maguire 6999 

Statement and testimony of Arthur E. Burns 7005 

Statement and testimony of Carl Gibboney 7013 

Statement by J. J. McEntee 7017 

Testimony of Guy D. McKinney, Neal E. Guy, and C. W. Bailey 7017 

Statement and testimony of Dr. Mary H. S. Hayes 7022 

Statement and testimony of Leon H. Keyserling 7026 

Statement and testimony of Carl Henry Monsees 7035 

Testimony of Clara M. Beyer 7039 

Testimony of Jack B. Tate 7040 

Testimony of Robert Blinn, Dr. Hayes, Mrs. Beyer, Messrs. Billington, 

Burns, Gibboney, Maguire, McKinney, and Tate 7042 

Statement by John Ihlder, executive officer, District of Columbia Alley 
Dwelling Authority 7053 

Index 7057-7067 


Washington Hearings, July 18, 19, 21, 1941 


Altmeyer, Arthur J., chairman, Social Security Board, Federal Security 

Agency, Washington, D. C 6724 

Bailey, C. W., senior administrative officer, Veterans' Administration, 

Washington, D. C 7017 

Baldwin, C. B., administrator, Farm Security Administration, United 

States Department of Agricultuie, Washington, D. C 6833 

Beyer, Clara M., assistant director, Division of Labor Standards, United 

States Department of Labor, Washington, D. C 7039 

Billington, R. V., executive assistant in vocational education, United 
States Office of Education, Federal Security Agency, Washington, D. C__ 6975 

Blinn, Robert, legislative adviser, Bureau of Public Assistance, Social 

Security Board, Federal Security Agency, Washington, D. C 7042 

Burns, Arthur E., chief, Economic Research Section, Work Projects 

Administration, Federal Works Agency, Washington, D. C 7005 

Carey, James, secretary, Congress of Industrial Organizations, Wash- 
ington, D. C 6810 

( 'armody, John M., administrator, Federal Works Agencv, Washington, 

I). C - 6925 

Gibboney, Carl, acting director, Rural Rehabilitation Division, Farm 
Security Administration, United States Department of Agriculture, 
Washington, D. C 7013 

Guy, Neal E., staff representative, Civilian Conservation Corps, Federal 

Security Agency, Washington, D. C 7017 

Hayes, Dr. Mary H. S., director, Division of Youth Personnel, National 

Youth Administration, Federal Security Agency, Washington, D. C 7022 

Hollenbeck, Oscar D., chief, Farm Placement Service Section, Bureau of 
Employment Security, United States Employment Service, Social 
Security Board, Federal Security Agency, Washington, D. C 6786 

Keyserling, Leon H., deputy administrator and general counsel, United 

States Housing Authority, Federal Works Agency, Washington, D. C — 7026 

Kratz, John A., director, Division of Vocational Rehabilitation, United 

States Office of Education, Federal Security Agency, Washington, D. C-_ 6978 

Maguire, Philip F., acting administrator, Surplus Marketing Adminis- 
tration, United States Depaitment of Agriculture, Washington, D. C__ 6999 

McKinney. Guy D., assistant to the director, Civilian Conservation Corps, 

Federal Security Agency, Washington, D. C 7017 

Monsees, Carl Henry, executive assistant to the coordinator, Division of 
Defense Housing; Coordination, Office for Emergency Management, 
Washington, D. C 7035 

Mountin, Dr. J. W., assistant surgeon general, States Relations Division, 
United States Public Health Service, Federal Security Agency, Wash- 
ington, D. C 6994 

Palmer, Charles F., coordinator, Division of Defense Housing Coordina- 
tion, Office for Emergency Management, Washington, D. C 6876 

Parran, Dr. Thomas, surgeon peneral, United States Public Health Service, 

Federal Security Agency, Washington, D. C 6683 

Rockwood, Edith, specialist in child welfare, Children's Bureau, United 

States Department of Labor, Washington, D. C 6992 

Sargent, Noel, secretary, National Association of Manufacturers, New 

York, N. Y 6795 

Taft, Charles P., assistant coordinator of health, welfare, and related 

defense activities, Federal Security Agency, Washington, D. C 6710 

Tate, Jack B., general counsel, Federal Securitv Agency, Washington, 

D. C ..______. 7040 

Vonderlehr, Dr. R. A., assistant surgeon general, Division of Venereal 
Diseases, United States Public Health Service, Federal Secuiity Agency, 
Washington, D. C 6994 

Warren, Laura Elmore, administrative assistant, Children's Bureau, 

United States Department of Labor, Washington, D. C 6992 



FEIDAY, JULY 18, 1941 

House of Representatives, 
Select Committee Investigating 

National Defense Migration, 

Washington, D. C. 

The committee met at 10:30 a. m., July 18, 1941, in room 1015 
of the new House Office Building, Washington, D. C, Hon. John 
H. Tolan (chairman) presiding. 

Present: Representatives John H. Tolan (chairman), of Califor- 
nia; Laurence F. Arnold, of Illinois; Carl T. Curtis, of Nebraska; 
and Frank C. Osmers, Jr., of New Jersey. 

Also present: Robert K. Lamb, staff director; Mary Dublin, co- 
ordinator of hearings; Creekmore Fath, acting counsel; F. Palmer 
Weber, economist; and John W. Abbott, chief field investigator. 

The Chairman. The committee will please come to order. 

Dr. Parran will be the first witness this morning. 

Mr. Reporter, this is Dr. Thomas Parran, Surgeon General, United 
States Public Health Service. 


The Chairman. Dr. Parran, we appreciate very much your coming 
here this morning. From my personal interview with you I un- 
derstand you have a short statement of eight or nine pages and that 
you desire to read it to the committee. 

You may proceed in that manner if you desire. 

Dr. Parran. Thank you very much, Mr. Chairman (reading) . 

In response to your request this statement is based upon the health 
problems which have arisen as a result of the migration of large 
numbers of people to those areas in which military cantonments or 
defense industries are located. This migration has given rise to 
many crucial problems of a public health nature. The rapidly grow- 
ing population in these areas has, in many instances, imposed re- 
sponsibilities and burdens upon State and local health departments 
and agencies which cannot be met with their present facilities and 


In many localities these facilities could not be termed adequate 
even for the demands of normal times. The additional strain im- 




posed by the sudden and sharp increase in the population to be served 
has not only intensified inadequacies but has brought forth new 
problems with which some local health authorities are not equipped 
to cope. 

At the very outset of the national-defense program the Public 
Health Service realized the critical nature of the situation and set 
about taking steps which would meet it in the most comprehensive 
and effective manner possible. 

Before such steps could be taken it was necessary to prepare esti- 
mates of the additional facilities needed. Such estimates have now 
been made and are set forth in a report, "Health Needs in Extra- 
Military and Industrial Defense Areas," which is based on recon- 
naissance surveys conducted by the Public Health Service in co- 
operation with State and local health departments. 

(The estimates referred to above are as follows:) 

Health needs in extra-military and industrial-defense areas 

of estab- 
in area 

Corps area 

increase in 


increase in 




Hospital facilities 



Cost— 1 

year of 




212, 800 
73. 990 
374, 600 
480, 970 
234, 166 
193, 930 
143, 000 
201, 100 
454, 450 

$903, 369 
457, 380 
1, 220, 244 
2, 353, 451 
2, 106, 479 
1, 180, 848 
1, 288, 459 
1, 247, 500 
1, 852, 100 










2, 964, 000 
6, 588, 000 

19, 592, 000 
6, 884, 000 

2. 584, 000 
676, 000 

3, 504, 000 
6, 252, 000 

$105, 800 
148, 200 





329, 400 



979, 600 



344, 200 



129, 000 



33, 800 







Grand total 


2, 369, 006 

12, 609, 830 

12, 790 

51, 188, 600 

2, 557, 800 




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Dr. Parran. These survej-s have covered 184 critical areas in which 
in-migration of population will take place as a result of the presence 
of military camps or industrial activities concerned with defense. In 
general, the area covered in each instance was that within a 25-mile 
radius of the military or industrial establishment. 1 

After careful study, civilian population increase in the extra-mili- 
tary areas was estimated as one-half the aggregate military popula- 
tion, whereas the increase in industrial areas was estimated as three 
I hues the increase in the number of industrial employees when due 
allowance was made for the employment of local residents and those 
who might be expected to commute from nearby communities. 2 

I have here samples of the kind of surveys upon which the esti- 
mates are based. The survey covering Savannah, Ga., is representa- 
tive of the surveys of military areas, and that covering Pascagoula, 
Miss., is representative of those conducted in industrial defense areas. 

(The material referred to above is as follows :) 


Reconnaissance Surveys 
extra-cantonment area, savannah, ga. 

I. Military area. — Two Military Establishments, the Army air base about 5 
miles south of Savannah, and Fort Scriven on Tybee Island 18 miles east, are 
located in Chatham County. Much of the area is flat tidal marsh. Strength of 
the air base and Fort Scriven expected to reach 4,000 and 2,000, respectively. 
Separate water supplies are to be developed from deep wells and chlorinated. 
In the past sewage has been discharged untreated into the Atlantic Ocean. A 
plea for primary treatment is under consideration. Sewage from the air base 
is to be treated by the activated sludge process. Garbage disposal is expected 
to be by incineration. 

II. Communities in critical area. — Savannah, 97,000. 

III. Industries. — No major industries connected with national defense con- 

IV. General character of area. — Malaria was formerly a serious public-health 
problem in Chatham County. Agricultural and residential developments, as well 
as drainage projects, however, have resulted in confining the problem to more 
or less isolated sections of the county. Negroes comprise about 47 percent of 
the total population of area. Aedes solicitans mosquitoes are certain to be a 
problem in the area. There are 5 towns, all less than 500 inhabitants, within 
the county and inside the 25-mile zone, but none are expected to be of impor- 
tance to the military population. Ground water is readily available throughout 
Chatham County. Many wells are shallow. Excreta disposal is usually by pit 
privies. There are a number of food and drink stands, as well as cheap night 
clubs and "juke joints" along the main highway. 

V. Summary (Savannah). — Water: Ground supply readily chlorinated from 
wells GOO to 1,000 feet in depth. Present system can be expanded to care for 
expected increase in population. Consideration has been given to development 
of surface supply for industrial use. Present consumption is about 6.7 million 
gallons per day. It is claimed that water system is accessible to nearly all parts 
of city, but that some Negro homes in outlying sections still use water from 
shallow wells. 

Sewage: Sewerage system is said to be accessible to nearly all premises in 
the city. Evidence indicated that several homes in outlying sections were not 
connected with sewers. System is at present being extended to serve the ex- 

1 At the time this testimony was given, reports were available on 115 of the 184 surveys. 
A list of these appears on p. 6606. In order to cover all existing and contemplated defense 
areas, Dr. 1'arran estimates that about 300 more such surveys will have to be made. 
(See p. 6708.) As these become available they will be obtained for committee flies. 

2 For detailed description of the method of estimating population in defense areas, see 
Exhibit A, p. 6694. 


pected increase in population. Sewage is discharged untreated into the Savan- 
nah River. Stream pollution not believed to be a serious problem. 

Food : Present ordinances are outdated and inadequate. It is hoped that 
within the next year a modern restaurant ordinance based upon the United 
States Public Health Service suggested code will be enacted. Present control is 
vested in the State department of agriculture. The Savannah city-county health 
department is now considering the use of the rules and regulations covering food 
shops adopted by the State board of health in 1940. 

Milk : Present consumption is about 4,000 gallons per day, 84 percent of which 
is pasteurized. The standard milk ordinance will become effective in January 
1941. The State health department has recently employed a well-trained milk 
sanitarian to assist full-time health units in communities where the standard 
milk ordinance is in effect. 

Garbage: Local ordinance requires storage in tightly covered metal container. 
In collection, no separation of garbage and refuse is required. Collection is daily 
from business establishments and twice weekly from residences. Disposal is by 
hog feeding, land fill, and burning. Facilities with regard to disposal are said 
to be poor. 

Vermin : The incidence of typhus having been high in this area, studies are 
being conducted by the State public-health service. Practically all types of 
mosquitoes common in the United States find favorable breeding areas in and 
around Savannah and Chatham County. Drainage work has been done by Work 
Projects Administration under direction of the county sanitary engineer. 

Housing: The housing situation in Savannah was not considered critical by 
the chamber of commerce, who feel that the increased population may be cared 
for without difficulty. A low-cost housing development, "Garden Homes," con- 
sisting of 376 units was ready for occupancy. In connection with the air sta- 
tion, 325 units are to be built immediately. Two low-cost housing developments 
for Negroes were being completed. Private building in city and county was 

Health organization : A combined city-county unit serves Savannah and Chat- 
ham County. Total budget is $127,232. A number of the employees are not 
responsible to the health officer. A venereal disease clinic is maintained. 

Medical care: 112 physicians and 35 dentists are engaged in active practice. 
About 400 hospital beds are available to the public in Savannah. In addition, 
there is a marine, Fort Scriven, and Georgia Railway Central Hospital. Hos- 
pital insurance plans have contributed to a high occupancy rate. None of the 
hospitals has a modern or well organized out-patient department. Medical 
care for the indigent and low-income groups is provided for ambulatory patients 
of the city through a combination of four part-time city physicians and a city 
clinic, which is sponsored jointly by the health department, junior league, and the 
county medical society. 

Welfare organizations : The county welfare department employs about a dozen 
case workers and spends about $2.75 per family per month for relief to the 
unemployed. There is also a nonofficial family-welfare organization with a staff 
of 5 persons and a budget of $22,000. Approximately 95 percent of the budget 
is derived from community chest funds and 5 percent from private contribu- 
tions. The agency's program embraces only unemployed families and deals with 
rehabilitation and social adjustments. 

Outstanding needs : 1. One of the special problems is that of building an effi- 
cient sanitation service in the local health department. 

2. A well-trained sanitary engineer worthy of a salary of $4,000 to $5,000 
should be employed to direct sanitation and malaria control work. 

3. (a) Venereal disease program will no doubt be reorganized; (b) venereal 
disease clinic night sessions should be increased; (c) adequate police regulation 
should be exercised to abolish "street walkers." 


I. Military area. — Ingalls Shipbuilding Corporation, located on the east bank of 
Pascagoula River at Pascagoula, Jackson County, Miss. At present the shipyard 
is employing 2.200 workers and will employ an additional 2,200 to 2,300 men within 
the next few months. 

II. Communities in critical area. — 

Pascagoula 5, 900 

Moss Point 3, 042 

Ocean Springs 1, 881 

Biloxi 17, 475 


IIL Industries. — Ingalls Shipbuilding Corporation is building cargo vessels for 
the United States Maritime Commission; paper, woolen, and plywood mills; 
commercial fishing. 

IV. General Character of area. — Most of Jackson County is very flat and the 
town of Pascagoula is practically surrounded by swamp and low-marsh areas. 
The soil is of the sandy loam type and is underlaid with a black gumbo clay at a 
depth of 15 to 18 feet. Ground water is available over the entire county at depths 
varying from 18 to 70 feet. Few of the wells are provided with satisfactory 
pumping equipment. The county is essentially rural. It is reported that ap- 
proximately 97 percent of the population in the area use old open surface privies 
for the disposal of human excrement. There is very little development along 
the main highways. Pest mosquito control is a major problem in the area and it 
is understood that there is some malaria in the outlying districts. The hookworm 
problem is causing the local health authorities much concern. 

V. Summary. — Water: Pascagoula's water supply is secured from three active 
deep wells having an average depth of 360 feet and two emergency wells of which 
one is a salt well. The supply is believed to be adequate for present needs and 
additional wells will provide water for any reasonable future expansion. No 
treatment is provided. The average consumption is estimated at 200,000 gallons 
per day. The entire population is accessible and connected to the supply. 

Moss Point water supply is served from five flowing wells, three of which are 
850 feet deep and two of which are 1,100 feet deep; there are two additional 
emergency wells. The supply, exclusive of the emergency wells, will produce 
approximately 1,000,000 gallons per day and is considered adequate for any pres- 
ent or future needs. No treatment is provided. The average daily consumption 
is estimated to be 100,000 gallons per day. The supply is accessible to the entire 
population and 75 percent are connected. 

Ocean Springs water supply is secured from two flowing wells which flow di- 
rectly into the mains. No pumps are provided and the pressure is not adequate. 
The supply is probably adequate for present needs if provided with the necessary 
pumping equipment. Under present conditions both supply and distribution 
system are considered to be unsatisfactory and potentially unsafe. 

Sewage: Pascagoula. The sewerage system of the town is only accessible to 
about 5 percent of the population. The system is inadequate for present needs. 
A new sewer line is now under construction as a national-defense measure to 
serve 697 units of the naval housing project and some 45 residences. Plans have 
been prepared to install adequate sewerage in the entire town, with discharge into 
the Pascagoula River. There is no sewage treatment. Plans have been prepared 
and approved for the construction of a new modern activated sludge treatment 
plant as a national-defense measure. About 70 percent of the population is 
served by septic plants (subsurface irrigation fields not satisfactory in this area). 
Three hundred privies are reported in the town and are for the most part old 
surface or pit privies. 

In Ocean Springs approximately ?»00 homes use septic tanks; 140 homes have 
approved sanitary pit privies ; and 60 homes use open-surface privies. 

Food : State law With enforcement by county sanitation supervisors. Personnel 
of State board of health are reported to make one or two inspections a year of 
food-handling establishments. 

Milk supply : Milkshed includes Jackson County and a supplementary supply 
from P.iloxi. Miss. Supply is 775 gallons daily. Sixty percent of milk produced 
is pasteurized. Supervision of 1939 standard ordinance is the responsibility of 
the Jackson County health unit. 

Garbage: In Pascagoula the city collects and disposes of garbage by hog feed- 
ing and low-land fill. Moss Point has refuse collection but garbage disposal is an 
individual problem: no ordinances are in effect. 

Vermin : No special control measures are in effect. 

Housing: There are no vacancies either in Pascagoula or nearby points. 
Twenty-five percent of existing buildings are substandard. The Navy is build- 
ing 097 dwelling units for 2,300 shipyard workers. Six hundred and ninety- 
seven dwelling units are not sufficient to meet present demands and probably 
200 new units are needed. An additional 500 to 600 units will be needed to 
meet demands of 2 500 additional shipyard workers. 

Health organization : Jackson County total full-time budget, $12,000. Venereal 
disease and hookworm are problems. 

Hospitals: General (35 beds) in Jackson County 1 

Physicians: Jackson County 10 

Dentists: Jackson County 5 


Welfare organization: Jackson County has a full-time welfare organization 
and a full-time Red Cross secretary. 
Outstanding needs : 

1. Venereal disease control program. 

2. Control of prostitution. 

3. Additional venereal-disease nurses and general sanitary personnel. 

4. Sewerage system for entire town of Pascagoula. 

5. Chlorination of municipal water supplies. 

6. Augmented facilities for county welfare association. 

7. Increased housing facilities for the expected additional employees. 


Dr. Parran. The reconnaissance surveys indicate that, according 
to present plans for military and industrial defense developments, 
communities in the areas surveyed will be faced with the necessity of 
providing housing, health, and medical facilities for an influx of 
almost 2y 2 million civilians. Many communities will grow by 50 
percent or more, and some will practically double in size. Some of 
the migratory population will settle in communities where facilities 
are relatively adequate. Others, however, will invade parts of the 
country where health and sanitation facilities may be described as 
genuinely primitive and of the sort that characterized the frontier 
boom towns of past generations. 

This does not mean that poor judgment has been used in the 
selection of defense areas, for military and tactical factors must 
sometimes outweigh health considerations in choosing a site for a camp 
or a munitions plant. It is our task to see that health and sanitary 
needs in these areas are met as rapidly and efficiently as possible. 


Those who make up the new population in these areas are, and will 
continue to be, a variegated lot. Many of them are industrial workers 
drawn by the prospects of getting a job in a defense plant or on 
construction projects. Then, too, there is a great army of service 
workers whose business it is to provide for the many different needs 
of soldiers on leave and workers during their off hours — small mer- 
chants, waiters, bartenders, entertainers, and so forth. There are 
camp followers of various descriptions. In many instances the ex- 
pectations of these people for employment or profit do not materialize 
and they become a burden on the already overstrained community. 
Even though they cannot pay for medical care and treatment, the 
health of the community demands that some provision be made for 


Our surveys indicate that practically all defense areas are deficient 
in one or more of the essential facilities which they must have if they 
are to meet the demands imposed upon them by the emergency 

Briefly stated, the amounts of money in addition to present ex- 
penditures from all sources which will be needed to provide the neces- 
sary facilities in the areas surveyed are: 

For public health activities budgets $12, 609, 830 

Hospital facilities : 

Capital outlay 51, 188, 600 

Operating cost, 1 year 2, 557, 800 


Clinic facilities: 

Capital outlay $5, 00.">, 000 

Operating cost, 1 year 715. 000 

Medical care 170, 874, 294 

Housing 1, 524, 436, 000 

Public water facilities: 

Supply 13, 643, 500 

Distribution 20, 742, 225 

Sewage disposal: 

Collection 24, 036, 175 

Treatment 37, 958, 100 

Garbage and trash collection and disposal (yearly cost) 4,555,852 

Sanitary privies 2, 122, 123 

Wells 2, 377, 200 

Mosquito control: 

Ditching 5, 008, 645 

Yearly maintenance 1, 595, 647 

Ditching and maintenance in ninth area 120, 000 

Rodent control 5, 591, 900 

Total 1, 885, 137, 891 

It should be noted that of this sum, the largest single item, 
$1,524,436,000, or almost 81 percent, is needed for additional hous- 
ing. The next largest single item, $170,874,294, is needed for med- 
ical care and treatment over and above what the communities are 
now equipped to provide on the basis of present expenditures from 
all sources. When these two large items are deducted from the total 
amount needed for all purposes, a balance of $189,827,597 remains, 
which is the amount required for hospitals, clinics, and those facili- 
ties traditionally regarded as public-health and sanitation services. 


Incorporated in this statement are more detailed estimates of 
the facilities and funds required in the surveyed areas in each of the 
nine Army corps areas. 

A beginning has already been made toward meeting the needs 
in these critical areas. In addition to the usual activities of the 
United States Public Health Service during the past year, the pro- 
visions of the urgent deficiency appropriation made possible a pro- 
gram of cooperative activity with State and local health departments 
whereby the facilities of health departments serving vital defense 
areas could be supplemented or augmented by additional personnel 
and equipment furnished directly by the Public Health Service. 

On March 1, 1941, an appropriation of $525,000 was made available 
to the Public Health Service for emergency health and sanitation, of 
which $98,000 was utilized by the Industrial Hygiene Section of the 
Division of Scientific Research for the development of industrial- 
hygiene programs among employees of vital defense industries. 

A further appropriation of $1,235,000 was made to the Public 
Health Service for emergency health and sanitation in the regular 
Federal Security Agency Appropriation Act, approved July 1, 1941. 
This was supplemented by an additional appropriation — a further 
appropriation of $1,940,000 in (he second deficiency appropriation of 
July 3, 1941. 


In order that personnel employed by the Public Health Service 
under the emergency health and sanitation program might have the 


advantages of knowledge of the practices, procedures, and policies 
of the Public Health Service, an orientation course was established 
at the National Institute of Health at Bethesda, Md. All categories 
of professional personnel are required to attend this course of in- 
struction, which consists of didactic work, demonstrations, and field 
training activities, and is of 6 weeks duration. 

This course is designed to acquaint the student with the public- 
health problems encountered in national-defense areas. Medical 
officers, engineers, nurses, and laboratory personnel have been and 
are being recruited. 

Requests from State health officers for personnel have been re- 
viewed and those areas in which the need is determined to be most 
urgent have been supplied as personnel became available from the 
training courses. 


Personnel assigned to States for duty in national-defense areas are 
required to complete their field training by undergoing a period of 
orientation of from 10 to 14 days at the State health department of 
the State to which assigned. 

At the expiration of this time, personnel are assigned at the re- 
quest of the State health officer, to vital defense areas where addi- 
tional aid is considered necessary. Personnel assigned in this man- 
ner are subject to the rules and regulations of the State and local 
health departments to which they are attached. Traveling expenses, 
in most instances, are furnished by the States. 

Three groups have completed the orientation and training at 
Bethesda and the field training at Baltimore, and have been assigned 
to vital defense areas. Twenty-six physicians, 33 engineers, 40 
nurses, and 5 chemists and laboratory workers are now on field duty 
in defense areas. In addition, 8 physicians, 12 engineers, and 5 
nurses are occupied with the administration, teaching, and super- 
vision of the field-training activities. A fourth group is now at- 
tending the orientation class in Bethesda, and consists of 25 physi- 
cians, 26 nurses, 9 engineers, and 6 chemists and laboratory workers. 
To date a total of 65 doctors, 48 engineers, 65 nurses, and 16 chemists 
and laboratory workers are devoting their activities to emergency 
health and sanitation measures. 


The Public Health Service is assisting in a mosquito-control pro- 
gram in cooperation with the States and the Work Projects Admin- 
istration. Engineering supervision and technical advice are fur- 
nished by the Public Health Service; labor and materials by the 
Work Projects Administration. 

One phase of the program is concerned with the control of mos- 
quitoes in areas contiguous to extra-cantonment zones and national- 
defense industries. It is expected that about 300 engineers and engi- 
neering aides will be needed to carry out the provisions of the pro- 

It is estimated that at least 35 additional medical officers, 50 
nurses, and about 20 chemists and laboratory personnel will be em- 


ployed during this fiscal year in order to comply with requests by 
State health departments for supplementary personnel. 

This personnel will be assigned to States in the same manner as 
the group now on duty in vital defense areas. Assignment of per- 
sonnel to national-defense areas has been made on the basis of 
need, but there has been general distribution over the 48 States. As 
yet no personnel has been assigned to Territories or island possessions, 
but it is expected that their stated needs will be met during the 


Surveys and studies are being conducted on liquid wastes pro- 
duced by new defense industries, particularly munitions plants, and 
on the probable effect upon public water supplies obtained from 
streams polluted by these wastes. The studies will be followed by 
specific recommendations as to means and methods of treating and 
disposing of such wastes in a manner which will not endanger public 
water supplies. 

At this time one survey is being completed on a new munitions 
plant, the wastes from which are discharged into a stream serving 
as the source of water supply for nearly half a million people in 
the immediate vicinity. 


Within the last few years a broad program of Federal aid has 
been developed to supplement State and local facilities for the control 
of the venereal diseases. The national defense program has given 
added importance to this pressing public health problem. 

Persons in the civilian population constitute alternate links in 
the chain of venereal disease infections in the armed forces. In order 
to cope with the situation, the Public Health Service has entered into 
an agreement with the War and Navy Departments which provides 
certain safeguards against the spread of infection in areas where 
armed forces or defense employees are concentrated. Among these 
safeguards are provisions for enforcement by local authorities of 
laws against prostitution, contract tracing, an aggressive educational 
campaign, and prompt diagnosis and adequate, treatment for infected 
soldiers and civilians. 

The activities mentioned above constitute the present work of the 
Public Health Service in meeting the health problems arising out 
of the migration of population as a result of the national-defense 


We have determined as nearly as possible the facilities and funds 
needed to meet these problems in such a way that the health of the 
communities involved will be protected. In many respects present 
facilities fall far short of what will be required. Legislation such 
as the recently enacted community facilities bill, II. R. 4515, which 
appropriated $150,000,000. will serve to correct some of the short- 
comings. Additional action, however, needs to be taken, especially 
with regard to such factors as housing, hospitals, clinics, and the 
provision of medical care. 

60396 — II — pt. 17 2 


Raising the level of these and other needed health services to the 
status required by the present emergency will not only safeguard 
our people during the present crisis, but it will give us the means 
of providing better and more complete health protection when the 
crisis is over and we can return to normal peacetime living. (Read- 
ing ends.) 

(The following exhibit was submitted by the witness and accepted 
for the record:) 

Exhibit A. — Population Estimates in Defense Areas — Basis for Calculation 
of Increased Population Estimates by the Public Health Service 

report by united states public health service 

Before estimating needs and calculating costs thereof in defense areas it is 
necessary to determine the expected increase in population incident to a military, 
naval, or industrial establishment. Certain basic data, modified by reasonable 
assumptions, have been utilized in determining a factor which when applied to a 
given aggregate military strength or number of industrial employees may be ex- 
pected, in general, to indicate the increase in population of the area concerned. 
Ihe methods outlined herein are believed to give conservative factors. 


Data furnished by the Army (table I) indicate that the number of officers, non- 
commissioned officers, and civilian employees, families included, attached to a 
Military Establishment but not generally living on the reservation may be ex- 
pected to be between 30 and 40 percent of the aggregate military strength of a 
particular command. 

Table I 

Percent of 




Wives as 
percent of 

of chil- 
dren per 

as per- 
cent of 

tion as 
percent of 














Noncommissioned officers eligi- 
ble to marry 






16.61 1 39.25 


It will be noted from table I that a group directly connected with the establish- 
ment equivalent to 39.25 percent of the aggregate military strength may be expected 
in the area; however, because of certain known factors such as employment of 
local persons in the civilian activities, the possibility of a lower percentage of 
married officers, and the fact that some officers are not bringing their families to 
the area, it appears logical to reduce this figure by about 25 percent which leaves 
a group equivalent to 29.44 percent of the military strength of the establishment. 
Assuming that the service demands of this group will require a group 50 percent 
as large ( 29.44 X. 50=14.72), attached persons and families included, the requisite 
population outside of the Military Establishment will be 29.44 plus 14.72, or 44.16 
percent of the aggregate military strength. 

It is further assumed that 10 enlisted men or selectees will require in services 
and make expenditures equivalent to 1 civilian wage earner or family head. 
Together with other substantiating data this assumption is made on the basis that 
each soldier will spend about $15 per month locally outside of the reservation and 
that this expenditure will in general be of a type requiring considerable personal 
service. On this basis the effect on the outside population of a given aggregate 
military strength would be equivalent to that of a wage-earner group, family heads 
only, 10 percent as great. 


(Note. — Quoting from a paper on Sectional Economic Research by Col. James 
M. S. Waring presented in 1934, it is stated that : "It can be demonstrated that in 
any community, rural or urban, the service workers requisite to the needs of the 
local community are equal to one-half of the production workers, or in other words 
33% percent of the gainfully employed in each community are required in the 
services. These constitute the dependent services. The remainder are the extra 

Table II Percent of aggregate 

military strength 

Commissioned officers and families 22. 20 

Noncommissioned officers and families 4. 55 

Civilian employees and families 12. 50 

Total 39.25 

Less 25 percent 9. 81 

Connected with establishment but living outside 29. 44 

Service workers and families incident to above group 14. 72 

Service workers and families incident to enlisted personnel 10. (JO 

Expected population increase 54.16 

With reference to the note above, the direct-service group requisite to the needs 
of the personnel quartered on the reservation would be one-half of 10 percent, or 
5 percent of the aggregate military strength. Adding another 5 percent to include 
the families, attached persons, and extra service personnel of the direct-service 
group would bring the number of persons incident to the outside activities of the 
enlisted personnel up to 10 percent of the aggregate military strength of the 
establishment. Hence by this method the total outside population may be expected 
to be about 44.16 plus 10, or 54.16 percent of the aggregate military strength as 
shown in table II. 

Table III 



Number of 

Type of industry 


5, 000 


Cartridge and powder company. 





Mine and smelter. 


Another method utilizing additional information gives a similar result. It 
may often be demonstrated that the population of a community is about three 
times the number of industrial or productive employees. Detailed information 
on several such communities has been obtained by the office of stream sanitation 
of the Public Health Service. The communities listed in table III are an exam- 
ple of typical one-industry towns which should reveal a normal relationship be- 
tween the number of productive workers and the total population in a given 
community. It will be observed upon examination of table III that in each case 
the population of the municipality is about three times the number of industrial 
or productive employees. 

Assuming married commissioned and noncommissioned officers, together with 
the members of the civilian personnel employed in the military establishment 
(families excluded) as equivalent to an equal number of productive employees, 
it may be expected that the outside population incident thereto will be three 
times the number of persons in these groups. 

3X (5.92+1.4+5.0) =36.96 

Adding 10 percent for the group, families and attached persons included, 
which will service the enlisted personnel, ijivos a factor of 46.96 percent of the 
aggregate military strength for the total outside population. 


e of the factors obtained in methods 1 
or 50.56 percent of the aggregate military strength. It would, 

An average of the factors obtained in methods 1 and 2 is found to be 


therefore, appear probable that in defense areas the population increase may be 
expected to be about one-half of the aggregate military strength of a new estab- 
lishment, and this factor has, in general, been used in calculating population 
increases in extra-military or defense areas. 


The four industrial towns listed in table III indicate that the industrial em- 
ployees represent about one-third of the total population of the community. 
Other data substantiate this information which appears to be particularly appli- 
cable to the small or medium-sized town in which the extra services have not 
been developed to the extent that they have in large cities. Hence population 
in defense-industrial communities has, in general, been calculated on the basis 
of two additional persons for each industrial employee. 


The Chairman. That is a very valuable statement, Dr. Parran. 
I understood from my personal talk with you this morning that you 
had reduced some of your surveys to written form. Do you have 
that report with you? 

Dr. Parran. I do, Mr. Chairman. I have already submitted for 
the record, abstracts on the military and industrial defense areas of 
Savannah, Ga., and Pascagoula, Miss, (see p. 6687 ff.). These are two 
detailed reports which we made following the reconnaissance surveys 
in these defense areas. If the committee wishes the others, they will be 
made available. 

The Chairman. We will place the complete set of abstracts in the 
committee files so that they will be available to the staff. 

(The 115 military and defense-industry areas covered in the abstracts 
of reconnaissance surveys by the U. S. Public Health Service which 
were available at the time of the hearing are as follows :) 

Camp Edwards, Mass. Hercules Powder Plant, Radford, Va. 

Fort Devens, Mass. Camp Davis, Holly Ridge, N. C. 

Quincy, Mass. Marine base, Jacksonville. N. C. 

Quonset Naval air base, Rhode Island. Fort Jackson, Columbia, S. C. 

Newport area, Rhode Island. Fort Moultrie and Charleston Navy 
Bath-Brunswick area, Maine. Yard, Charleston, S. 0. 

Portland, Maine, area. Camp Croft, Spartanburg, S. C. 

New London shipyard and harbor de- Camp Forrest, Tenn. 

fenses, New London, Conn. Wolf Creek Ordnance Plant, Milan, 
U. S. Army airport of Windsor Locks, Tenn. 

Conn. Fort McClellan, Anniston, Ala. 

New Haven defense industries, New Childersburg, Ala., industrial area. 

Haven, Conn. Military and industrial area, Mobile. 
Fort Ethan Allen, Colchester, Vt. Ala. 

Pine Camp, N. Y., military and ma- Orlando Army air base, Orlando, Fla. 

neuver area. Morrison Field, West Palm Beach, Fla. 

Camp Upton, Long Island, N. Y. Army Gunnery School No. 8, Panama 
Kearny, N. J. City, Fla. 

Fort Dix, N. J. Key West naval base, Key West. Fla. 

Camp Indiantown Gap, Lebanon, Pa. Naval air training station, Jackson- 
Assembly plant and flying field, Hat- ville, Fla. 

boro, Pa. Army Air Corps training base, Talla- 
Survey of area surrounding Philadel- hassee, Fla. 

phia Navy Yard. Naval air station, Pensacola, Fla. 

Fort George G. Meade, Md. Miami air base, Miami, Fla. 

Naval Powder Factory, Charles County, Savannah antiaircraft training and 

Md. firing center, Hinesville, Ga. 

Hagerstown, Md., area. 



Savanna Ordnance Depot area, Illinois. 

Camp Grant, Rockford, 111. 

Camp McCoy, Wis. 

Defense industries, Beloit-.Ianesville, 

Defense industrial areas at Manitowoc 
and Two Rivers, Wis. 

Barksdale, Wis., defense industry area. 

Fort Warren, Cheyenne, Wyo. 

Fort Meade, S. Dak. 

Seventh Corps area training center — 
Pulaski County, Mo. 

Kansas City, Mo., and Kans., defense 

Jefferson Barracks, south of St. Louis, 

Fort Riley, Junction City, Kans. 

Fort Leavenworth, Kans. 

Military areas and national-defense in- 
dustries in the vicinity of Omaha, 

Fort Sill, Okla. 

Denver, Colo, area. 

Camp Hulen-Palacias, Matagorda 
County, military area. 

Fort Bliss military area, El Paso, Tex. 

Brownwood military area, Brownwood, 

Camp Wolters military area. 

Galveston County military area. 

Defense industry at Orange, Tex. 

Abilene, Tex., area. 

Air Corps Technical School and Air- 
port, Wichita Falls, Tex. 

Ellington Field, Houston, shipyard and 
defense industries, Houston, Tex. 

Fort D. A. Russell, Marfa. Tex. 

Military and industrial area, Browns- 
ville and Harlingen, Tex. 

Fort Clark, Brackettville, Tex. 

Everett Airfield, Everett, Wash. 

Sunset Airfield, Spokane, Wash. 

March Field, Riverside, Calif. 

Camp San Luis Obispo, Calif. 

Los Angeles, Calif., area. 

Mare Island Navy Yard area, Vallejo, 

Fresno air base, California. 

Air base, Boise, Ada County, Idaho. 

Harbor defense and naval air base, 
Astoria, Oreg. 

Extra-cantonment zone areas, Savan- 
nah, Ga. 

Extra-cantonment zone areas, Macon, 

The central Louisiana extra-canton- 
ment area, Alexandria, La. 

Barksdale Field, Shreveport, La. 

New Orleans, La., military and indus- 
trial area. 

Camp Polk, Leesville, La. 

Pascagoula Shipyard, Pascagoula. Miss. 

Henderson Ammonia Plant, Henderson, 

Louisville, Ky., area. 

Fort Knox military area, Kentucky. 

Fort Thomas, Ky. 

Onion Center, Ind., area. 

Jefferson Proving Ground area, Madi- 
son. Ind. 

Defense industry near South Bend, Ind. 

Defense area at Fort Wayne, Ind. 

Columbus, Ohio, military and industrial 

Cincinnati, Ohio, area. 

Erie Ordnance Depot, Lacarne, Ohio. 

Ravenna Ordnance Plant, Ravenna, 

Defense industry near Sandusky, Ohio. 

Patterson Flying Field — 10 miles east 
of Dayton," Ohio. 

Wright Flying Field— eastern edge of 
city of Dayton, Ohio. 

Aero products factory — 10 miles north 
of Dayton, Ohio. 

South Charleston industrial area. South 
Charleston, W. Va. 

Morgantown Ammonia Plant, Morgan- 
town, W. Va. 

Defense industry near Detroit, Mich. 

Fort Wayne, Mich. 

Fort Brady, Chippewa County, Mich. 

Fort Custer, Mich. 

Midland County area, Michigan. 

Benton Harbor area, St. Joseph, Mich. 

Saginaw-Bay City area, Mich. 

Muskegon, Mich. 

Air Corps Technical School, Chanute 
Field, Rantoul, 111. 

Fort Sheridan and the Great Lakes 
Naval Training Station areas, Illinois. 

Western Cartridge Co., Illinois. 

Scott Field, 111. 

The Chairman. Dr. Parran, some of the members of the committee 
desire to ask you a few questions. 


Mr. Osmers. Dr. Parran, from your statement I gather that our 
health facilities are quite deficient in many of these places. Could 
you give the committee some notable example in the country where 
these facilities have collapsed or have been so inadequate as to en- 
danger the health of the defense workers? 

Dr. Parran. Yes, sir. There are several cases of these defense 
communities like that. One example is the Norfolk area, which al- 


ready had a substantial municipal organization and a substantial 
tax base. Perhaps San Diego, Calif., would represent another com- 
munity of this type. 

Such communities need some help but do have tax resources with 
which they can carry out some of the added provisions of water 
supply and other community facilities and services. 

Then there are the even larger towns, like Detroit or Chicago or 
Pittsburgh, in which large amounts of defense activities have been 
concentrated, and those cities, perhaps, can carry most of the added 


At the other extreme there is the Camp Leonard Wood area in 
Missouri, in which the population within 25 miles of that very large 
camp consisted of only a few thousand people. The largest town 
within 40 miles was Rayville, Mo., a small town of a few thousand. 
There is no community organization there. There is no municipality 
close by the camp ; no tax base upon which the community or any of 
us can depend for providing the needed services and facilities for 
these people. 

Private industry, you may say, should build some houses. Yes, 
but who will put in the water supplies, the sewage systems, and so 
forth? In areas such as that some very dangerous and unsanitary 
health conditions have developed. 

Tullahoma, Tenn., is another example in which at the time of these 
reconnaissance surveys it appeared that human excreta were being 
deposited promiscuously not only over the yards, but the streets of 
the town. The place was just overwhelmed and a very dangerous 
situation had developed. 

Hinesville, Ga., is another camp adjacent to a very small com- 
munity in which there is a large influx of people. 

We have tried to divide the problem in another way in our ap- 
proach to it. In some of these instances there is a very large con- 
struction job, bringing in thousands of workers for a temporary 
period. We have not advocated permanent facilities for such con- 
struction workers. We have tried to see that some of the most basic 
and elemental sanitary needs were met in order to prevent the spread 
of epidemics^ and we have attempted to base the estimates we have 
made upon, if not the permanent, the semipermanent population, or 
shall I say the population which will be in that area for the duration 
of the emergency. 


Mr. Osmers. I would like to have you specify for the committee, 
if you would, just how these services to which you refer in your list 
of needed appropriations and so on will be administered. Will they 
be administered as Federal Government functions or as part of the 
State and local program? 

Dr. Parran. It is a very complicated question because it will vary. 
The pattern will vary in many instances. 

Mr. Osmers. Is it fair to assume that where there are local health 
agencies established they can be expanded, and that you will work 
through those agencies? 

Dr. Parran. In connection with the ordinary public health serv- 
ices and the venereal-disease control and sanitation services, we have 


built in every instance upon a nucleus provided by the State or the 
State and local health departments. In many instances the per- 
sonnel are paid with funds normally channeled to the State for public 

To the nucleus of trained officers and nurses we have added other 
personnel when it comes to such matters as a recreation center near a 
camp, presumably so the local community will have the operation of it, 
but I understand that the Public Works Agency is now considering 
these many complicated problems to determine at what point, in terms 
of local participation in construction, the locality should own and 
operate the plant, or at what point it should be operated by the Federal 

So far as I know, no definite yardstick has been made because there 
is an infinite gradation of variety of local participation and local abil- 
ity to operate. 


Mr. Osmers. I was thinking principally, Doctor, of the postwar sit- 
uation with respect to a hospital that might be built and operated by 
the Federal Government when the area might well become a ghost 
town at the conclusion of the emergency. I was just wondering, then, 
what the Federal Government would do — whether they would abandon 
it, or turn it over to the local authorities, or what. 

The defense worker by and large throughout the country is not a 
charity patient; he has a job and he has an income. Are there suffi- 
cient doctors in these areas to serve him, and so on ? 

Dr. Parran. In many of them there are by no m^ans sufficient doc- 
tors. Some doctors, however, are being attracted to these areas, such 
as doctors who have not gotten along very well where they happen to 
be — occasionally a young man just locating his practice. Such people 
are drifting in. 


Mr. Osmers. We had some testimony in the Baltimore area which 
I recall was very interesting about the situation in the State of Mary- 
land — that for one reason or another the average age of the doctors 
in the State of Maryland was much higher than it had been. 1 Many 
young men, I presume, had Reserve commissions and had gone into 
the Army. Is there any trend in that direction on a national scale 
or not ? 

Dr. Parran. For a number of years, perhaps for more than a decade, 
there has been a decided trend toward higher average ages for doctors 
in rural areas. The younger doctors seem to gravitate to the cities, 
frequently into areas already oversupplied with doctors, but they are 
unwilling to go into the rural areas, especially unwilling if those areas 
are not supplied with facilities for modern medical care, treatment, 
and hospital facilities. 

Mr. Osmers. That bears out substantially what we heard in Balti- 
more, and it bears out my own personal experience. I have a farm, 
which is naturally in a rural area. I am told that 50 years ago the 
area had a stated number of doctors. As these men grow old and 

1 See testimony of Dr. Abel Wolman, Baltimore hearings, p. 5902, and of Dr. Robert H. 
Riley, ibid., p. 5941. 


pass on there is no replacement whatsoever, vet there has been no 
substantial change in the population. I wonder whether we are fac- 
ing a shortage of doctors, generally, in rural areas in the United 

Dr. Pakran. We are confronted now with such a shortage. 

Mr. Osmers. Is there any factor you can see on the American hori- 
zon which will change this trend? 

Dr. Parran. Yes, sir; I think that the measure proposed in the 
Senate last year by Senator Wagner and Senator George providing 
for community hospitals is the most direct and efficient answer to the 


The reason the doctor doesn't go to the rural areas is that after 
receiving modern medical training he is not willing to practice 
"saddlebag" medicine. But if there are some modern medical facili- 
ties — X-ray and laboratory, and other aids to the practice of medi- 
cine in such areas — I am confident that we shall see a larger group 
of young doctors going into such regions. 

Mr. Osmers. Do you think. Doctor, that the possibilties for higher 
incomes in the so-called metropolitan areas have also been an influ- 
encing factor in bringing medical men to the cities ? 

Dr. Parran. Of course, the whole thing, except for the points I 
have mentioned, has an economic base. Yes, sir. 

With the increased facility of transportation, I don't think we need 
a doctor at every cross road as we did a generation ago. On the 
other hand, in our studies of this matter the best thought which has 
come out of them, I think, is that, barring the very remote and 
sparsely settled areas in the West — let us say a few spots in the 
West — there should be a hospital within a radius of 30 miles, so that 
30 miles would be the maximum that one should need to travel to get 
to a hospital. 

Mr. Osmers. Was the bill you mention referred to by its sponsors as 
the "socialization of medicine bill?" Is that the bill to which you 
refer ? 

Dr. Parran. No ; I believe an earlier bill was given that label, but 
not this one. The one you mention was a bill providing for medical 
care and public health — for the whole medical front rather than just 
hospitals. 1 

Mr. Osmers. Was the medical profession, bj r and large, in support 
of the measure you refer to — the Wagner-George bill ? 

Mr. Parran. Yes; medical and hospital groups throughout the 
country seemed to give it their support. 


Mr. Osmers. Now, how do you arrive at the estimates, Dr. Parran? 
What was the method used? 

Dr. Parran. We sent a doctor and an engineer to each of these 115 
medical areas; we naturally had to adopt some yardstick. I can't 
say that the estimates we have made here will turn out to be exactly 
right. I will say that they are the result of the application of cer- 

1 The Wagner-George measure — S. 1230 — was introduced March 27, 1941, and was known 
as the "Hospital Construction Bill." 


tain standards which we agreed upon and which at that time seemed 
the best standards. 

Mr. Osmers. Do you have data supporting your estimates, Dr. 
Parran ? 

Dr. Parran. The data were collected largely during the last, month 
of 1940 — during December 1940 and the first month of this year. 

Mr. Osmers. Do you expect there will be as sharp an increase in 
the estimates as there has been in the estimates of every one of these 
defense problems? 

Dr. Parran. I think not. 

Mr. Osmers. Well, that is encouraging. 

Now, I notice you have an item in there of $170,000,000 for medi- 
cal care and I would like to have you tell the committee how you 
propose to spend that medical-care item. 

Dr. Parran. In the report, and in our thinking up to now, we 
have not formulated any one definite method of operating that gen- 
eral aspect of the problem. The figures were arrived at by taking 
the amounts which are being spent per capita for medical care and 
the agreed normal, necessary per-capita amount which should be 
spent for medical care. Then there w T as deducted the proportion 
of that total cost which it was estimated the wage earners could 
supply for themselves. 

Mr. Osmers. And this represents the difference between what the 
figure should be and what they could afford to pay? 

Dr. Parran. Essentially that. 


Mr. Osmers. Now, I believe that some time ago you expressed 
yourself with regard to the health deficiencies of the draftees. What 
was it you did say about that subject, Dr. Parran? 

Dr. Parran. Well, as a result of the examinations of the first 
million men coming under Selective Service, I think all of us have 
been tremendously disappointed at the large proportion of them who 
are ineligible for full military service. 

The figures, as I recall them, are that 43 percent of the men ex- 
amined are not eligible for full military experience. Of those, 
however, 15 percent are eligible for limited military service but not 
for full military service. 

In other words the figures break down to 28 percent not eligible 
for either full or limited service, and 15 percent eligible for limited 
service only. 

Mr. Osmers. What is the major cause, if there is a major cause, 
of rejection? 

Dr. Parran. The most frequent cause of rejection is defective 

Mr. Osmers. Defective teeth? 

Dr. Parran. Yes. 

Mr. Osmers. Is there a close second — some other outstanding 
defect ? 

Dr. Parran. Eyes — defective vision stands high on the list. Un- 
derweight or general physical unfitness also constitutes an important 
factor. I am shifting the base of my comparison for a moment. Out 



of the first 1,000,000 men we found about 49,000-odd eases suffering 
from syphilis, and another 15,000 suffering from gonorrhea. 

I should be glad, Mr. Chairman, if you wish, to have inserted in 
the record and to provide you with a brief table showing the per- 
centage and relative standing of several physical defects in a rep- 
resentative sample of draftees. 

The Chairman. We would like to have that, Doctor. You may 
send it to us at any time. Our record will be open for 10 days at 

(The table referred to above was received subsequent to the hear- 
ing, and in accordance with instructions from the chairman, was 
made part of the record. It is as follows:) 

Percentage of examined men classified as not qualified for any military service or 
as qualified for limited service only under the Selective Service Act of W^O, 1 
according to cause 



Defective or deficient teeth _ 

Eye diseases 

Diseases of the cardiovascular system 

Musculo-skeletal diseases 

Nervous and mental diseases 

Ear, nose, throat diseases 


Diseases of the respiratory system 

Venereal diseases 

Foot diseases 

Overweight and underweight. 

Diseases of the genito-urinary system 

Endocrine disturbances 

Varicose veins 

Mouth and gum diseases 

Skin diseases 

Diseases of abdominal viscera 



Other specified diseases 

Generally unfit 

Obviously defective * 

Percentage of examined men 
classified as — 

Not quali- 
fied for 
service 3 

IV- F and 






















Not quali- 
fied for 
any mili- 
tary service 






















for limited 
service only 
(Class I-B) 








i These data are a combination of local board and induction center examinations. 

2 The term "disease" is used to mean disease, defects, or impairments. Data are classified by primary 
11 Sum of second and third columns. 
1 Classified by local boards as obviously defective without medical examination. 


Mr. Osmers. Now, Dr. Parran, what recommendations have you to 
make with respect to correcting the health deficiencies of these re- 
jected draftees? 

Dr. Parran. I think it is quite clear that this is a national-defense 
problem. If we continue to need an army no larger than its present 
size, then from a strictly military point of view, perhaps, the problem 


is not of so much immediate military importance. If, on the other 
hand, we should need to expand that army materially, we shall be 
faced with a shortage of people in the proper age group who are 
fitted for the job — for the bearing of arms. 

Just take this one group infected with gonorrhea and syphilis, 
both correctible diseases. I think it should be a national obligation 
to see that every one of these men is not deprived of the privilege 
of citizenship — the privilege of bearing arms for his country — simply 
because he has one of these infections. In the same way, I think the 
boy with defective teeth, with a hernia, or with varicose veins should 
have those defects corrected insofar as he is willing and able to pay 
the bill himself. That should be his personal obligation, but by and 
large much of the cost, I feel, will have to be borne by Federal funds, 
working in cooperation with the State and local hospitals and med- 
ical services. 

Of course I feel very strongly that this is an important job right 
in front of us, and that we should see that these men are put in the 
best possible physical condition. 

Mr. Osmers. You mentioned that 48,000 of the 1,000,000 had syph- 
ilis and I presume that average will continue. 

Now, when the examiners found that a venereal condition existed 
with respect to an individual, was a report made to the State or 
local authorities? 

Dr. Parran. Yes, sir. 


Mr. Osmers. The law in several States provides that this be done. 
I don't know whether all States have syphilis-reporting laws or not. 
My own State does. 

Dr. Parran. They do, and the selective-service regulations require 
the doctor at the local draft board to notify the health authorities of 
all communicable diseases, in accordance with the State laws. 

Mr. Osmers. Have you had any opportunity at all of finding out 
whether the States are doing their duty in following up these cases? 

Dr. Parran. They are doing a heroic job. To understand the prob- 
lem one must recall that for the first time in the recruitment of any 
army an army is being recruited free from venereal diseases. 

A routine blood test is made on all the boys before they are in- 
ducted, and I might say this is a novel and unique fact. The reason 
such a large proportion of syphilis cases was uncovered was because 
of the blood test. In fact, out of every hundred positives, 97 would 
have been missed, had we not made blood tests. Only 3 percent 
showed clinical signs of syphilis. The clinical syphilis rate was only 
one-seventh that of the last war, and the rate of gonorrhea only 

The Chairman. To what do you ascribe that ? 

Dr. Parran. I ascribe it to the work which has been done in many 
States since the last war and in all States during the last few years, 
plus the more efficient chemical treatment of gonorrhea. 

Mr. Osmers. I would like to ascribe a great deal of this to the 
leadership of Dr. Parran. 

The Chairman. And I will second that motion. 

Dr. Parran. Thank you very much. 



Mr. Osmers. I understand that you visited England recently. Did 
you find any essential change in their public health system as a 
result of the war ? 

Dr. Parran. A tremendous expansion : An important sector of 
their whole gallant civil-defense effort, of course, is the medical and 
hospital side. That is a large unit of the Ministry of Health in Greal 
Britain. Fortunately, they had, prior to the war, a good staff of 
trained, full-time medical health officers, and they have been the 
keystone on which the whole emergency medical service has been 
built. The training of personnel, the planning and operation of first 
aid posts, the contamination centers, the provision of emergency 
hospital beds — all of that has been possible because, on the basis 
of a central corps of trained men, they have recruited the leading 
doctors of the country to aid them. 

Mr. Osmers. Having no scientific knowledge of the subject at all, 
it has seemed remarkaole to me that England has been able to avoid 
large epidemics throughout this trying period. Would you say that 
the present organization of their health service has a great deal to 
do with this? 

Dr. Parran. Their health service has ; and I should also recall the 
tremendous effort they have made to prevent contamination of public 
water supplies and, where they are contaminated, to see that steps 
are taken to prevent the use of this water. 


Mr. Osmers. There must arise, as a result of bombing raids, some 
very serious problems with regard to water supply. I am thinking 
of damaged water mains and transmission facilities of all kinds. 

Dr. Parran. Most every imaginable thing that you can think of 
has happened. 

Mr. Osmers. But they have developed some subsidiary system of 
supplying the water to the people, have they not? 

Dr. Parran. No ; they have been able to cut out of circulation the 
damaged spots to see that the mains are promptly disinfected; they 
have seen in other instances that the water is boiled, or that emer- 
gency chlorine is furnished, or that tank wagons are used, in order 
to insist upon a safe water supply. 

Mr. Osmers. Do they have a rodent problem as a result of bombing 
raids ? 

Dr. Parran. No; they do not seem to. They did have, strange to 
say, a mosquito problem in the dead of winter in the subways. 

Mr. Osmers. A mosquito problem ? 

Dr. Parran. Yes, sir ; a mosquito problem which nobody expected. 
They came from the stump holes, where the mosquitoes hibernated, 
and they filled the subways. They were not disease-carrying mos- 
quitoes, but they were a very great pest. These swarms of mosquitoes 
in the subways were exterminated without much delay. 

Mr. Osmers. I am sure the New York subways are so crowded a 
mosquito couldn't fight his way in, so we don't have to worry about 



Now, the largest item on your list is this housing item of about 
81 percent of the total amount. We have appropriated, I think. 
something like $400,000,000 in Congress for housing. Is that meeting 
the present need? 

Dr. Parr an. Frankly I don't feel qualified to express any very 
definite opinions on the housing situation. We debated initially 
whether or not we should leave out this estimate of housing, but since 
our crews had gotten in the field early, we thought it might be of some 
value to the housing authorities — agencies of the Government dealing 
with housing — as representing the best estimates we could make as to 
what was the size of that total job. 

Mr. Osmers. Now, you made reference to H. R. 4545, the $150,- 
000,000 Defense Facilities Act. Have any of those funds been allo- 
cated to your service, or do you expect any particular sum to be 
allocated ? 

Dr. Parran. They have not been allocated and I fear we shall have 
to ask Mr. Carmody to answer your other question. 

Mr. Osmers. You probably would like to know that as much as 
we would. Have any of the proposals of the Interdepartmental Com- 
mittee to Coordinate Health and Welfare Activities been embodied in 
the national defense health program? 

Dr. Parran. From a very practical point of view a great many of 
the recommendations are being carried out step by step, particularly 
in the defense areas. In other respects I think one can say that co- 
ordination has gone further than that committee suggested a few 
years ago. 

Mr. Osmers. It has gone further? 

Dr. Parran. Yes, sir; there has been more coordination than was 
at that time contemplated. 

health insurance 

Mr. Osmers. Do you believe that if we had a national health insur- 
ance plan this situat ion would be better today ? 

Dr. Parran. Well, again one must define the terms, and when you 
say a "national health insurance plan," that might mean so many 
different things. 

Mr. Osmers. I shall try to make it a little more specific: We expect 
to hear this morning from the chairman of the Social Security Board. 
He is going to leave a paper with the committee in which, I believe, 
he wants to extend the Social Security program to include a social 
insurance program providing medical care on an insurance basis and 
cash benefits to those unemployed because of sickness. What would 
be your view of such an extension \ 

Dr. Pakean. I wonder if we shall have during this emergency suffi- 
cient doctors to operate a new type of medical service in this country. 
There are such a large proportion of doctors being called into the 
military and national defense services. I am sure we shall have, just 
•is the British have had, an acute shortage of doctors. 

If or when the present system of medical practice is to be radically 
(•hanged by a national law putting into effect a compulsory health- 


insurance system all over the country, I hope all of the doctors of 
the country will be at home in order that they may be on hand to 
advise and participate in the carrying out of such a plan. 

In other words, I hold the view that, a time of crisis is no time 
for a radical change in the social structure. It is also, I may say 
parenthetically, no time to retreat or abandon necessary social meas« 
ures. I see, from my point of view, additional things which need to 
be done in the health field in terms of providing the basic facilities 
necessary in defense areas and elsewhere and in providing more in- 
tensive preventive service having, shall I say, priority over a national 
compulsory health-insurance system. 

Mr. Osmers. In other words, however meritorious the proposal 
might be when it would be studied you feel that today it might be 
an upsetting factor, rather than a helpful one ? 

Dr. Parran. I am inclined to think so, and yet I have a great re- 
spect for the judgment and wisdom of the chairman of the Social 
Security Board. 

Mr. Osmers. I realize too, Doctor, that this is hardly the way to 
present a national-health program — in a more or less informal ques- 
tioning such as we are doing here this morning — but I wondered 
what your opinion might be. 

Are the safeguards you mentioned, which are now being provided 
by local authorities and military authorities against the spread of 
venereal disease adequate? 


Dr. Parran. I fear they are not because of the fact that during 
this past 7 or 8 months we have uncovered 48,000 new sources of 
syphilis infection and 15,000 sources of gonorrhea infection. 

There is a great variation in the prevalence of these diseases. We 
found, for example, that the prevalence of syphilis among white 
selectees in Florida is nearly 20 times as high as in Connecticut. 
There are 10 States with rates of under 10, and another 10 States with 
rates over 30 — between 30 and 40. 

The States having the largest amount of syphilis are in general the 
poorer States, and their facilities in many instances are overburdened 
or breaking down. As a result, we have not been able to follow up 
promptly and put under treatment the sources of infection that have 
been found. That is important, not only from the standpoint of the 
individual, but from the standpoint of eradicating that source of in- 
fection, which in turn will give rise to other cases. 

I am confident that if it were possible to deal with each of these 
cases promptly, we should be able to advance by several decades the 
ultimate control of syphilis. The data on these first million men show, 
in effect, that syphilis is now a rare disease in a few of our States. 

Mr. Osmers. What you have to say about syphilis in certain sections 
of the country bears out testimony which has been given to this com- 
mittee. When we were in Montgomery, Ala., we heard from the 
health officer of Palm Beach County, Fla., and I think he said he was 
trying to handle 10,000 cases in that county alone. 1 One man, with - 
2 nurses, handling 10,000 cases; of course, that is a physical im- 

1 See testimony of Dr. William Weems, Montgomery hearings, p. 589. 



I sponsored, and there was passed, the premarital blood-test law in 
New Jersey and some other measures along those lines, and I think we 
have made substantial progress there. This committee being pri- 
marily interested in migration is, of course, very much interested in 
the interstate cooperation on this problem. 

Now, in my own State, we have a great many migrant farm work- 
ers who come there annually. We blood-tested an entire group of 
them last year and found syphilis to be prevalent among 33 percent 
of the men and among 40 percent of the women. We gave preliminary 
treatment and forwarded the reports to the States where they said 
they were going. I have always been extremely doubtful as to the 
ultimate follow-up of these cases, particularly when these people re- 
turn to the South. I wondered whether you could tell the committee 
anything about this migrant syphilis care. 1 


Dr. Parran. I may say at the outset that I share your doubt. Some 
progress has been made in dealing with the migrant who is suffering 
from syphilis. The public-health service has had quite a lot of ex- 
perience in dealing with merchant seamen and has been able to work 
out certain patterns by which a transfer card or treatment card can 
be taken from one port to another. 

We have attempted, with good success in some instances, to apply 
that same principle to syphilis in the general population, specifically 
at Hot Springs, Ark., where we operate a center. Patients come there 
for treatment. Frequently they do not and cannot stay until they com- 
plete the treatment, but we have found excellent cooperation from the 
States of origin when the proper notification is given. 

I think, as an over-all statement, however, that it must be realized 
that in many of the States where venereal diseases are most preva- 
lent, facilities are inadequate. 

Mr. Osmers. It almost runs in direct proportion, I presume, to the 
facilities available. 

That is all I have, Mr. Chairman. 

The Chairman. Dr. Parran, regarding your remarks relating to 
England ; I was thinking how they got on top of the health problem. 
Of course, that is more of a compressed area and under a single govern- 
mental control. 

Dr. Parran. Yes, sir. 


The Chairman. We run up against the problem, don't we, of mu- 
nicipal control, State control, county control, and Federal control; 
and in addition to that we have 48 States, which comprises a much 
greater area than Britain and consequently our problem is much 
greater. Is that not so ? 

Dr. Parran. Obviously our problem increases in complexity — actu- 
ally in geometric ratio because of the expanse of country and the 
varying conditions — social, economic, and other conditions in different 
parts of the country. 

See New York hearings, pp. 78 and 70, and Trenton hearings, pp. 5(547-5654. 


The Chairman. You spoke about San Diego. This committee 
visited San Diego about 6 weeks ago and was very much impressed 
with the new project going in there. San Diego has increased by 
100,000 people, and they are putting up 1,766 housing units in the 
Kearney Mesa project to house 10,000 people. 

When we visited San Diego and that project we were impressed 
with the idea that there were no hospital facilities of any kind or char- 
acter, and the project is 6 miles away from San Diego. 

Of course, they have a sewage problem there, as well as all the other 
problems that go with a project of that kind. 

Now, in regard to the $150,000,000 that you are asking for to take 
care of all the different facilities, including sanitation and health and 
education, San Diego wants $21,000,000 alone, don't you see, so I am 
impressed with the idea that $150,000,000 is inadequate. 

You think so, too, don't you ? 


Dr. Parran. I agree fully with the statement that Governor Mc- 
Nutt made, I think it was in his testimony before the Senate com- 
mittee, in which he said it was "a drop in the bucket," although I 
do not have the figures in mind. 

With your permission, I should like to offer them as unofficial. 

The Chairman. Very well, unofficially. 

Mr. Osmers. Dr. Parran, would you sav that your figure of 
$1,800,000,000 is a little bit nearer the mark than $150*,000,000> 

Dr. Parran. Yes; although please recall that 81 percent of that 
is housing. I should also point out that the $1,800,000,000 estimate 
covers only the 184 areas surveyed. The number of additional areas 
which will have to be surveyed before we have a complete picture 
will probably be about 300. 

Mr. Osmers. Even figuring the 19 percent of that figure which is 
not for housing, that would probably l)e under what is really required? 

self-liquidating frojects 

Dr. Parran. Yes; although I should hope that, in this and any 
additional expenditure we should save by as good bargaining as pos- 
sible with the local communities. Many of these projects will be self- 
liquidating. Water supply, for example, and sewage-disposal sys- 
tems can be taxed, which would go a long way toward amortizing 
the cost. 

Moreover, I should think that the larger communities should be 
required to pay some part of the cost of these facilities, but I take it 
the great difficulty is to know just what sort of yardstick one can use, 
bearing in mind that there are some areas which simply cannot pay 

service facilities 

Mr. Osmers. Dr. Parran, one of the great objections we have found 
on the part of communities — local communities — to the Federal de- 
fense, housing program has been the failure of the Federal Govern- 
ment, in most instances, to take into consideration and to provide 
for the facilities that new housing must have. I am referring to 


facilities of the type that you have mentioned — hospitals, schools, 
roads, and all of the many things that go into the creation of a 

It is a simple matter for the Federal Government to go in and 
build thousands and thousands of houses, but to put up a school that 
will take the children of 1,000 families is another matter. As a result, 
the people I mentioned in the various communities are doubtful about 
the Federal Government's sincerity. 

I questioned Governor Townsend the other day. He is a member of 
the Plant-Site Committee, I believe it is called, and I was rather 
critical of the activities of the Government in that respect. 1 

It is very easy to negotiate a contract to build a plant or deliver cer- 
tain materials here in Washington. But when you consider the strain 
placed on that community and its contiguous territory, I think that this 
should be considered when a contract is signed — not 6 months after- 
ward when it is too late, but before they begin the project. 

That is all, Mr. Chairman. 


The Chairman. Dr. Parran, just one more observation I desire to 
make and then I am through. I am greatly impressed with the val- 
uable paper you have given us this morning. We have got to get 
it across to the American public that housing, health, education, and 
similar activities are an important part of the national-defense 

You just can't separate civilian morale from Army and Navy morale, 
can you ? 

Dr. Parran. I agree fully with that statement, Mr. Chairman. 
After all, what is it we are preparing to defend ? It is not so much 
an island here or the bulge of a continent there; it is the men and the 
women and the children who make up this country. If we can't 
produce the instruments of war and at the same time give decent living 
conditions to the people through whose labor and interests and energy 
these things are being produced, then I do not think our democracy is 
as good as I firmly believe it to be. But I believe we can do it. 

The Chairman. Well, thank you very much, Dr. Parran. We ap- 
preciate your coming here and the very valuable assistance you have 
given to us. 

Dr. Parran. Thank you very much, Mr. Chairman, and gentlemen 
of the committee. 

Mr. Osmers. Mr. Chairman, I would like to have the record show 
that one of the reasons for the uncertainty of my appearance here 
during these hearings has been the fact that I am also a member of 
the Rivers and Harbors Committee, which has been holding concur- 
rent hearings on the subject of the St. Lawrence seaway. 

The Chairman. The reporter has made a note of it. 

We will take a 3-minute recess. 

(Whereupon, a short recess was taken.) 

1 ne Chairman. The committee will please come to order. 

Mr. Taft is our next witness. 

Mr. Reporter, this is Mr. Charles P. Taft, assistant coordinator of 
health, welfare, and related defense activities. 

1 Seo Washington hearings, pt. 16, July 15, 16, and 17, p. 6568. 
60396 — 11— pt. 17 3 



The Chairman. Mr. Taft, we appreciate your coming here this 
morning. I have read your very interesting statement. 

The committee is quite conversant with the work you have dona 
Now, would you prefer to read your statement, or should I ask ques- 
tions that will bring out what the committee is particularly interested 

Mr. Tait. I think questions would be quite satisfactory, Mr. Chair- 

The Chairman. I think so, too, because we find in our experience, 
Mr. Taft, that there is duplication otherwise. 

(The statement referred to above is as follows:) 


National Defense Migration and Its Relation to Health, Welfare, and 
Related Defense Activities 

authorization and functions of the office of the coordinator 

On November 28, 1940, the Council of National Defense, with the approval of 
the President, designated the Federal Security Administrator, Paul V. McNutt, 
as Coordinator of all health, medical, welfare, nutrition, recreation, and other 
related fields of activity affecting the national defense, including those aspects 
of education under the Federal Security Agency. In February I was appointed 
Assistant Coordinator. 

The Coordinator relies on the fullest use of the services of public and private 
agencies, national, State, and local, now operating in the fields for which he 
is responsible and stimulates any further developments necessary to carry out 
the following responsibilities : 

1. To secure social protection for men, women, and children in communities 
suffering disproportionate burdens as a result of military or industrial defense 

2. To assist civilian agencies and individuals in making an effective contribu- 
tion to the health, welfare, and morale of men engaged in military and naval 
service, in the communities near military and naval posts. 

3. To promote the health, security, and morale of the civilian population as 
an essential part of effective defense. 

organization of office and method of operation 

(Attached is a copy of the organizational chart of the Office of the Coordi- 
nator. ) 

The Office of the Coordinator functions through committee organization and 
through direct operation where no existing agency has primary responsibility 
in the particular field. The Federal functions are carried on in Washington 
through an interdepartmental advisory council, advisory committees, and the 
staff. A similar pattern is followed on the regional level. 

In order to coordinate effectively the activities of Federal agencies in health, 
welfare, and related fields as they affect the national defense, the Coordinator 
established an interdepartmental advisory council composed of the heads of all 
Federal organizations whose activities relate to the functions of the Coordi- 
nator. Advisory committees of specialists, drawn from Government and non- 
Government agencies, have been set up on health and medical care, family 
security, nutrition, and social protection. 

The program divisions are: The Division of Recreation, responsible for re- 
creation programs for defense communities and for the total population affected 


by defense ; the Nutrition Division, which works through State nutrition com- 
mittees for the improvement, through education, of nutritional standards and 
food habits ; and the Division of Social Protection which seeks to safeguard the 
armed forces and the civilian population from the hazards of prostitution, sex 
delinquency, and venereal diseases, and to offer other types of social protection. 
The Coordinator's responsibilities with regard to education are carried out 
largely through the Office of Education. 

Similarly, a regional pattern of organization has been developed. Regional 
advisory councils, composed of the regional representatives of the Federal 
agencies which comprise the interdepartmental advisory councils, have been 
appointed. Each regional director of the Social Security Board has been desig- 
nated regional coordinator in his region to act as agent of the Federal Coordi- 
nator and as chairman of the regional advisory council. The field staff of the 
Divisions of Recreation and of Social Protection operate from the regional offices 
and into the communities which most urgently require their services. 

The significance of this type of coordination is that there is now one source 
to which State and local groups can turn for assistance with health, welfare, 
and related problems affecting the national defense, and that such assistance 
represents the joint efforts of all Federal agencies with anything to offer on 
these problems. It means that the efforts of one agency are supplemented by 
the efforts of all other agencies with resources to meet specific problems. In- 
formation available to one agency is available to all. By clearance of such 
information, much effort can be saved at all levels. Action taken by the Federal 
Government in the fields included will be a result of joint thinking and planning 
and cooperative effort. 


Your committee in March heard the testimony of the Coordinator of Health 
and Welfare on defense migration, 1 and also has had access to my testimony 
before both the House and Senate Committees on Public Buildings and Grounds 
in connection with the need for community facilities. While I shall summarize 
as much as is necessary for presentation here, I hope that you will review the 
earlier testimony in connection with this statement. 

The national-defense program is the greatest single cause of migration in the 
United States today. 

The different types of migrants may be distinguished as follows: 

The million and a half young men who have been called by the Army and 

Their civilian followers, families, and service workers. The ratio is estimated 
at one for every two soldiers. For naval concentration it would be higher. 

The construction workers for the new military, industrial, and community 
facilities who numbered 750,000 at the peak, and who have moved from com- 
munity to community as projects were announced. 

The famililes who have had to be relocated when the Government purchased 
vast tracts of land for new facilities. 

The industrial production workers who have moved into industrial defense 
centers to meet labor shortages. In the 68 areas for which the Bureau of Em- 
ployment Security has made special labor-market surveys, it is estimated that 
a total population of 16,831,000 will absorb over a million persons in employ- 
ment during this year, and of these about 350,000 will have to be imported from 
outside the commuting area. 

The influx of families and dependents of these industrial production workers 
which may be expected to multiply the above immigration figure by 3. A con- 
siderable servicing population will accompany the wage earners and their 

Hordes of unemployed who flock frequently with their families, to boom towns 
in search of jobs for which they are not qualified, and who are without means 
of support. 

These migration figures will undoubtedly be augmented by possible increase 
of the armed forces, and increased defense industrial operations. 

1 The reference is to Hon. Paul V. McNutt, one of the witnesses at the Washington 
hearings, March 24, 1041, p. 4321. 



The types of communities affected by in-migration are as diverse as the kinds 
of migrants, and for each a different kind of planning is necessary. There are 
communities which are affected by military activities, or by industrial activi- 
ties, or by a combination of activities. 

A military establishment may be placed in a wilderness where there are 
no nearby communities. This involves control of the mushroom communities 
that spring up, the greater development of resources on the reservation, and the 
organization of distant communities for week-end service. An example of this 
is Fort Huachuca in Arizona. 

Or, as in the case of Fayetteville, N. C, a camp may be near a single city 
whose population it outnumbers many times. This city must be assisted to plan 
for receiving the full impact of the concentration. 

Elsewhere there may be a number of cities of varying size surrounding a camp 
site, and they must be organized to work together so that the impact may 
be dispersed according to the ability of each community to absorb it. Camp 
Edwards, at Cape Cod, Mass., has enjoyed the benefits of the coordinated effort 
of 13 towns. 

There are also a number of special planning problems. The proximity of 
troops to the Mexican border has resulted in an increased venereal-disease rate 
and has necessitated planning beyond national boundaries. Where communities 
have at first resented the location of a military establishment, or have been 
unsympathetic to the needs of industrial workers, the difficulties of community 
organization have been increased. In other communities where the influx of 
Negro troops has been unwelcome, it has been necessary to overcome prejudice, 
and to plan activities exceeding those planned for whites because of the relative 
scarcity of community resources. 

Planning for military concentrations is for a relatively short-term period, 
for it is assumed that at some time the bulk of the troops will be demobilized. 
How many of the troops, their followers, construction workers and other 
transients may be expected to remain in the community, and the types of 
problems they will create cannot now be ascertained. Again, needs vary ac- 
cording to whether the concentration is a maneuver area, as is Caroline 
County, Va., a 3-month replacement center like Camp Roberts in California, 
or a more permanent camp. 


Centers of industrial concentration present different problems. The need 
for integrated community planning by local, county, State and Federal agencies 
is perhaps intensified. Such a program should be visualized as augmentation 
of community living rather than duplication of community responsibility. 

There are the already established industrial centers whose multiple in- 
dustries are converted to defense needs and which are. in addition, the sites 
of greatly increased new facilities. True, the influx may be so small relatively 
that the population can readily absorb it. But it is more likely, as in the case 
of Detroit, which anticipates 75,000 in-migrauts out of the 350,000 needed by 68 
areas for defense industry, that the city has reached its ultimate expansion 
and will have to spread to outlying areas beyond city and even county units. 
The development of commutation facilities, although it may disperse the impact 
from the principal community, may enlarge the area of need in even different 
directions. Services must be brought to these periphery areas, which may be 
totally lacking in facilities, in a manner that will fit into the total community 

Somewhat different is the case of a fair-sized city such as Wichita, Kans., 
which is still undergoing expansion. Here one industry, aviation, has received 
contracts requiring huge construction and operation labor. Here the need is 
greatest for the development of the nucleus of growing facilities; to meet the 
needs of the added population without distortion of the community plan in the 
direction of the new defense activity. 

A more spectacular situation is illustrated by Charlestown. Ind., and Childers- 
burg, Ala. In each case a government-owned ordnance plant requiring several 
thousand workers has been located in open country near a town of several 
hundred people. In contrast to other types of industries which may have 
post-war value, the period of use of ordnance plants is probably limited and 
probably requires planning of limited duration, but of total extent. 


Some communities are affected by a combination of types of activity. In 
Hampton Roads, Va., for example, there are Army, naval, and industrial con- 
centrations. No matter how large the area, real effort is required to meet the 
different needs of the various groups. 

The Office of the Coordinator is concerned with the health, welfare, and 
related needs of the communities to which the migrants go ; similar needs of 
the communities from which they come, and which are thereby deprived of 
essential labor supply, and financial support ; and the needs of the migrants 
themselves in becoming adjusted to conditions of their new community life. 

Iii addition, I wish to mention briefly certain other defense-connected prob- 
lems which will ultimately require solution : 

Assistance to nonresidents who are in need. These may be defense workers 
waiting for their first pay ; families of men in service whose allotments do not 
permit them to provide their families with subsistence ; transients ; construction 
workers left stranded as a result of the completion of defense projects. All 
such persons are almost universally barred from State and local assistance by 
local restrictions. 

Economic dislocation resulting from conversion of industries, priorities, and 
the curtailment of consumer goods industries. 

The need in some manner to compensate localities for the land removed 
from the tax base by the purchase of sites for Government-owned defense 
facilities; this is now provided for only under the Lanham Act (housing). 

The need for zoning regulations in defense areas, as basic to health and 
welfare ; 

The needs that will be occasioned by further diversion of national income 
for defense purposes; 

The need for strengthening the planning and program machinery of our 
public agencies now so that the potential post-war migration may be minimized, 
when the time comes, both in extent and in effect. 

As an essential aid in meeting some of the welfare problems occasioned by 
the national-defense effort, I should like to suggest the establishment of a 
general public assistance category in the Social Security Act. This category 
is needed to meet not only defense connected dependency problems arising 
among migrant workers, transients, and others, but also to fill a long-existing 
gap in the Federal Security program. Federal grants-in-aid to the States 
under this category should be on a matching basis and should be accompanied 
by conditions assuring adequate administration, personnel, and other safeguards, 
and assurances that such funds will be expended without discrimination as 
to the residence or legal settlement of recipients. 








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Mr. Taft. There may be a few points you may not have covered 
when 3 T ou have finished, so I would like the opportunity of emphasiz- 
ing them, if I may. 

The Chairman. Certainly, you may have that privilege. 

Have you any idea, Mr. Taft, as to approximately how many people 
have migrated into camp areas? 


Mr. Taft. Into camp areas, by themselves? 

The Chairman. Yes; on account of defense activities. What we are 
getting at is defense migration, don't you see? 

Mr. Taft. I would have to distinguish between the industrial areas 
and the camp areas. 

As to the industrial areas, we figure that on the basis of labor-market 
surveys by the Employment Security Office about 350,000 will have 
to come from outside of the commuting area in industrial communities 
in order to supply the employment necessary in new defense activities. 
So far as the camps are concerned, it would be only a guess, but I would 
say between 300,000 and 500,000 up to date. 

The Chairman. I quoted you in one of the hearings as a result of a 
newspaper article wherein it was stated that you felt that probably 
iy 2 million people had migrated from State to State on account of the 
national-defense program. 

Mr. Taft. Well, I think that is an estimate based on what will 
ultimately happen, and therefore is in the process of happening now. 

I don't think I would be prepared to say definitely that there were 
1% million right up to date, although there may be, because it is the 
kind of thing which is extremely difficult to measure, and no one has 
actually measured it with any accuracy. 

The statement of iy 2 million I will stand by, however, as being the 
probable total shift under existing defense industrial activities and in 
existing camps. 

If you take a camp site, for instance, where you have 40,000 soldiers, 
our estimate is that eventually you will have 20,000 civilians within 
25 miles of that camp. They don't all come at once ; it will take perhaps 
6 months before that actually develops, but I will stand by that figure 
because I think it will be reached probably in the fall, although not at 
this present moment. 

The Chairman. Have you made any surveys, that is, have you 
yourself made any specific surveys in any specific areas ? 

Mr. Taft. I have visited a number of areas simply for observation, 
ordinarily to assist in community organization, rather than to survey 
the existing situation, and what I have picked up for myself, therefore, 
has only been incidental. 

The Chairman. Well, now, after you make the surveys, just how 
does your office fit into the picture? That is what I want to get. 

Mr. Taft. Well, our office has, in the first place, the function of col- 
lecting information. That information is collected both in our regional 
offices and in Washington. If it is collected in Washington direct, we 
distribute it to the appropriate regional office. The information is 
then analyzed for the benefit of the various divisions of our activities, 
which cover, as I have already indicated, health, recreation, and family 


welfare, as well as nutrition and some specialized activities in social 
protection — all of which gets a little bit outside of the direct field. 


Then, too, our operations take place entirely through the existing 
agencies of Government, and such additional staff as we have set up 
for services not regularly included within the Federal Government's 

For instance, in connection with health, we are conducting most 
of the negotiations between our office and between the Public Health 
Service and the Federal Works Agency in connection with the con- 
struction program. 

That is done in the regions, through the regional public health 
service which works with our regional coordinator, who is the re- 
gional director of the Social Security Board. 

I am in fairly continuous conference with Colonel Gilmore, the 
Commissioner of Public Works, discussing procedures and the in- 
dividual projects that are considered — applications that are consid- 
ered under the community facilities act — but for the action program 
we rely on the Public Health Service of the Office of Education and 
the Division of Recreation, in our agency. 

They made the original survey as of last December, which was 
reported to the Senate under Senate Resolution 324 of the last ses- 
sion, and have secured additional reports since then through the 
State departments of education. 

However, for the purpose of the Community Facilities Act, it is 
necessary to have a more detailed study and a check of those esti- 
mates because they came from the State departments and the local 
boards of education. During the last 6 weeks I have secured from 
our budget enough funds to enable the Office of Education to put 
on a staff of qualified school people — mostly from the State depart- 
ments of education, but well-qualified and well-instructed as to the 
purpose and the method of operations — which has been working 
in the field under Mr. Alves in analyzing the needs in individual 
communities where we knew there was some sort of defense need. 


In the case of public assistance and the family welfare prob- 
lem, we have worked ordinarily through the Public Assistance Bureau 
of the Social Security Board. Miss Hoey is the chairman of our 
advisory committee on family security. 

In that case we have accumulated all the information that has 
come in, and the family security advisory committee has met and dis- 
cussed various individual problems, such as the needs of families of 
Army and Navy personnel — that is, relief needs of those families — 
and the possibility of a program of allowances. 

That committee has discussed the availability of personnel for 
some of these services; has investigated the need of training for ad- 
ditional personnel in that field ; but has not operated as much in the 
field as the other activities. 


In the case of recreation, we have a staff of somewhat over 70 
now in the field which has been organizing the individual communi- 


ties. That is the only case where we have actually had someone in the 
local communities. All the other agencies work through the States. 
In general, that is the type of activity we have been engaged in. 
It is an effort to stimulate activities in these lines and to get some 
local. State or private agency to do the job under our guidance, 
with instructions and suggestions from our field people. 


The Chairman. Mr. Taft, I was just thinking— have you ever 
made an investigation of activities similar to those you are now 
engaged in, as they were carried on during the World War? Was 
this same work being done in the World War ? 

Mr. Taft. Well, I can say "Yes" about a great many of our 

The Chairman. Have we improved on past activity or not? 

Mr. Taft. Well, that, I am afraid, I am not qualified to say. I 
think beyond any question that the amount of attention being devoted 
to both schools and sanitation and family welfare is greater than 
that devoted to it in the World War. The results, therefore, within 
say 6 months or a year will certainly show a better situation than 
that existing in the former period. 

Certainly the other activities — the recreation activities and the 
social protection — are almost the same as were carried on in the last 
war but I wouldn't be qualified to compare them. 

The Chairman. Do you find, Mr. Taft, that the local communities 
are making a real effort, to help out on the problems you just 
mentioned ? 


Mr. Taft. Yes; there is no question about it. Their interest and 
their desire for community organizations have readily developed and 
they make a good start. The only difficulty you run into is the per- 
fectly natural local reaction that, as soon as suggestions are made 
by publicity or otherwise, that either Federal or private money is 
going to be available to do particular jobs, they sit back and wait 
until they see whether it is available. Therefore, when you have a 
succession of events such as the hearings on the communities facilities 
bill in the House — first the hearings in the Senate; and when you 
have the announcement of a U. S. O. campaign to provide some 
private funds ; when you have staffs of either Government or private 
agencies coming into communities and advising them of resources that 
are available ; then, it is only natural — and I am a sitting councilman 
myself — to sit back and wait to see for sure whether there are going 
to be any such contributions available. 

I think, therefore, that if you get fairly definite plans on which 
you are going to provide aid, and limit specifically what that aid is 
going to be, and convince the community that you mean what you say, 
they will come through even under these circumstances. 

The Chairman. But there is a financial limit on just what they 
can do in a good many instances? 


Mr. Taft. There is no question about that, It varies tremendously, 
but at the same time you would always find places which have been 
brought to realize their responsibility to soldiers. 


For instance, small towns which will raise $10,000 are raising 
more than they would ever raise for any other purpose, in order to 
meet specific defense needs and to take care of them themselves. In 
other cases you will find that local communities have already made 
substantial public appropriations to meet some of these needs. 

In the city of Louisville, for example, the Louisville Council is 
now appropriating over $50,000 a year, which I may say puts the 
District of Columbia government somewhat to shame, for the purpose 
of handling their defense problems in connection with soldiers, rec- 
reation facilities, and so on. 

On the other hand, when you get some small towns in Texas, or 
towns like Tullahoma, Tenn., which are located immediately outside 
of a big camp, it is impossible to expect any help from them, so the 
problem varies tremendously. 


The Chairman. Of course you know, Mr. Taft, Congress appro- 
priated $150,000,000 for different facilities — health, education, sani- 
tation, and kindred matters. Do you feel that is adequate? 

Mr. Taft. Well, I think it depends on your definition of adequacy, 
Mr. Chairman. I do feel, myself, as I testified before the Senate 
committee, that to meet the pressing emergency situations under ex- 
isting conditions $150,000,000 can do the job. If you mean that it is 
going to provide the same standard cf education or the same standard 
of health that you would expect to find in a well-settled and well- 
established community, I will say no, it will not, but in many of 
those situations you don't know how permanent the affair is. There- 
fore it seems to me that a more temporary and emergency type of 
service is justified and is all that the Government should do at this 

So far as the requests are concerned, I heard Dr. Parran's testimony 
and I ought to say this in comment on the size of requests from 
various places : I think it is undoubtedly true that nearly every com- 
munity having any possible excuse — and some that haven't any ex- 
cuse — have dug up old P. W. A. projects and turned them in, and 
when you add those up they run to a lot of money. 


If I may illustrate, I was discussing with Colonel Gilmore this 
morning the school situation in connection with Camp Grant at 
Rockford, 111. Camp Grant is a camp of about 10.000 soldiers. It is 
a medical replacement center about a mile out of Rockford. In fact, 
the edge of the camp is practically on the edge of the town. The 
camp itself is in a township area. On the other side of the camp is a 
smaller community in which the W. P. A. built a school 3 or 4 years 
ago. On the other hand, Rockford, a city of about 70,000 or 80,000 
people, has recently constructed two W. P. A. high schools. It has 
some industry, but not a large amount. 

It has not been extremely congested. They have about 300 chil- 
dren connected with the families of commissioned and noncommis- 
sioned officers regularly on the post. The suggestion of our educational 


adviser in the Office of Education is that those children be transported 
into Rockford, which could take care of the problem. 

The township has applied for a school. The P. W. A. feels, on 
the other hand, that if Rockford won't take the children, they ought 
to make an addition on the other new high school they built in the 
other community. 

When you add the applications, you find one for perhaps $250,000; 
if }'ou transport them to Rockford you have got only the expense of 
transportation; if you put them in the other place, you only have 
the expense of a small addition to an already existing school, so that 
I don't think the total of the requests is any fair gage of what you 
really are going to need. 


The Chairman. What is your office doing in the field of nutrition ? 

Mr. Taft. In the field of nutrition we have had a staff which has been 
working on promotion pretty largely. It has worked through the 
Department of Home Economics of the Department of Agriculture 
and the Extension Bureau of the Department of Agriculture. In the 
States it has worked through State nutrition committees which usually 
operate through the Home Economics Division of the State depart- 
ments of education and through such State agricultural agencies as 
fit into those other ones. 

They set up and conducted a national conference on nutrition in 
May at the invitation of the President, and from the information and 
discussions that developed in those 3 days they prepared and are pre- 
paring various types of literature. They are stimulating the creation 
of committees right down into local communities which will empha- 
size the needs for good, palatable, and effective foods. Undoubtedly 
at the end of a period they will produce a consciousness of both the need 
for foods with high food value and the need for education as to food 
habits which will direct people to the right kind of food when they 
are able to pay for it. 

I might say that one element which I think has not had sufficient 
emphasis, either in connection with nutrition or in connection with 
venereal diseases, is the very important effect of the poverty areas, 
because it is in poverty areas that you have the large incidence of 
venereal diseases and a larger number of prostitutes coming from those 
areas. It is always in those areas, too, that you have malnutrition, 
which grows, certainly in large part, out of the fact that these people 
haven't got money enough to buy the right kind of foods. 

The Chairman. I take it that your office works with the local com- 


Mr. Taft. Yes. Our fundamental principle has been that we want 
(o bring home to the local communities their responsibility and get 
them to assume them just as far as they can. Our recreation people 
are instructed to push the local citizen to the front, to put the respon- 
sibility on the local community, to get them to assume just as much of 
the job as they possibly can. 


Inasmuch as in that field, as well as in health and in family welfare, 
we are going to have to rely, in very large part, on volunteers because 
of the absence of financial resources in the community, it becomes all 
the more important to lead the community to feel and actually assume 
its responsibility for carrying on whatever needs to be done. 

I might give one example : We have just one man in the region of 
Camp Forrest, which is in the middle of Tennessee, at Tullahoma. 
There is no town of more than four or five thousand inhabitants closer 
than 70 miles. Our man has organized local communities in each of 
those towns to handle the various kinds of problems that arise. On 
Mother's Day the communities within 60 miles of Camp Forrest col- 
lected flowers, made bouquets, transported them to Camp Forrest, and 
had a bouquet to give to each one of the 5,000 mothers who came out 
to the camp on that week end ; they telephoned and visited around to 
find every available spare room, either free or for rent, and were able 
to provide sleeping accommodations for these 5,000 or more women, 
with such other members of the families as came along over the 
week end. 

Our man didn't organize all this but he did bring together the 
chairmen of the various town committees who had handled the whole 
thing and who did the whole job on a voluntary basis. One could 
apply that in health and all the other fields. We believe the com- 
munity must get behind this thing if we are going to make it a united 
and effective defense effort. 


The Chairman. Mr. Taft, within your organization you have what 
is called the Family Security Committee ? 

Mr. Taft. Yes, sir. 

The Chairman. What is that? 

Mr. Taft. The Family Security Committee is a committee made up 
of representatives of Government agencies and the representatives of 
national private agencies also interested in the problem. The chair- 
man is Miss Jane Hoey, who is head of the Public Assistance Bureau 
of the Social Security Board. They come together, as I mentioned a 
moment ago, to consider the various kinds of problems arising out of 
the defense program. And I mentioned several of their topics of 
discussion. The one that is perhaps the most important has to do 
with the transient problem, because in many of these cases people get 
stranded in these communities in spite of the efforts of the Employment 
Security Service. 

People come in to look for jobs or expect jobs, when for these people 
there are no jobs. You simply can't keep them out no matter what 
kind of process you may set up. If they are stranded, they are not 
residents and therefore are not eligible for support, and there are no 
funds available in many cases to send them back home, because in 17 
of the States there is no local or State relief. 

In some of the States — a few of them — there is no resource except 
surplus commodities for these families. In an effort to get at the 
problem they have considered all the questions reviewed so frequently 
by Federal agencies: How you can help transients without getting 
into some of the difficulties that were found in the Federal transient 
program prior to 1935. 



Their conclusion was that the only way to get at it was by some 
kind of general grants-in-aid which would require that no distinction 
be made on the ground of residence. They have made that recom- 
mendation to the Administrator, Governor McXutt, where it is now 
under consideration, in order to find the best way to present it to 
Congress or to other Government departments for action. 

The Chairman. In other words, you make that recommendation? 

Mr. Taft. We do. 

The Chad3man. And we did in our report to Congress. 


The Chairman. Now, don't you think that the problem of the non- 
settled person will increase on account of this national defense 
migration ? 

Mr. Taft. Oh, I think there is no question about it. I don't know 
whether you know that within the last 6 weeks some contracts have 
been authorized or let for some 80-odd additional defense plants of 
substantial size which will create, I suppose, in at least a third of 
the cases, new communities of just the character of the ones that we 
are having the most trouble with now, that is. places where there 
were only 500 or a few thousand people, and you put in a plant which 
is going to employ 12 or 15 thousand. There are quite a number 
of these places now, and I am sure that in this new batch of con- 
tracts there will be more. 

Even if they are in larger industrial communities, as in the case 
of Detroit, you may find that the Ford bomber plant and the Chrysler 
and Nash tank plants, or Hudson, I guess it is, are placed out in 
the suburbs because there isn't any more room in the incorporated 
part of the territory. In Macomb County and in Warren township 
you have all these problems, as much as if they were out in the open 
country, away from any metropolitan community. 

In fact, I have here available for the committee's consideration 
a report which is perhaps typical of the way in which our agency 
has tried to work on the Macomb-Oakland industrial-defense area 
just north of Detroit, which was made by Mr. Fisher of the Na- 
tional Resources Planning Board, by Lt. Col. Harold Furlong, of 
the Michigan Council of Defense, and by Dr. Fullerton of the United 
States Public Health Service. 

The report we made goes to Mr. Goodwin, our regional coordinator 
at Cleveland, and comes to the Security Agency in that way. 

(The report referred to above has been placed in the committee 
files for use of the staff.) 


Dr. Lamb. In that connection, Mr. Taft. is one of the problems 
there the existence of unincorporated places? 

Mr. Taft. Yes; it frequently is. 

Dr. Lamb. I believe that is true in the case of Macomb. It is 
difficult to arrange the responsibility for the flotation of bonds or 
some other means of financing public works of the kind needed in 
cases of this kind. 


Mr. Taft. Well, there is very seldom any difficulty with school 
districts in that respect, but when you consider sewers and other 
facilities there arises a very serious problem, which is a major prob- 
lem in Macomb County, because the necessary drainage district runs 
through quite a number of different municipal subdivisions and it 
is always difficult to get them to work together or even form a drain- 
age district. The State laws are sometimes awkward, too, and make 
it impossible to do it as effectively as it should be done. 

Dr. Lamb. I think that this committee has a particular interest 
here for the reason, I believe, that there are large trailer colonies 
and large numbers of residents who have moved in for work in these 
developing defense industries. 

Mr. Taft. Well, I am sure of that. Detroit has always been a 
town to which migratory workers came because of the possibility of 
getting jobs. And while I am not as familiar with the details as I 
should be on that, I am sure that this is the case. 

One of our difficulties in connection with schools is that you may 
frequently have, and I think this is true — I am sure it is true in Ma- 
comb County — that you have eight separate school districts covering 
an area which doesn't require more than 5 miles of transportation, 
which clearly should join in a consolidated school set-up to take care 
of the population in that area. It is not always easy to induce them 
to do that, however. 

Dr. Lamb. Of course, Mr. Taft, you can also readily see that after 
this emergency is over, unless some status is given to the nonsettled 
person, the situation is going to be almost chaotic. 


Mr. Taft. It is extremely difficult. The majority of the States, I 
believe, require only a year's residence. If that were general, I think 
your problem would gradually disappear, but where you have many 
States requiring 3 years' residence and some that require 5, you get 
into an almost impossible situation. 

The Chairman. Mr. Taft, did you know that we have about 30 
States in this Union which make it a crime to transport an indigent 
citizen across the State line? 

Mr. Taft. I didn't know there was such a provision in that many 
States. I am familiar with the New York case which went to the Su- 
preme Court. 

The Chairman. A case went to the Supreme Court on a constitu- 
tional question, but it has not been passed on ; it is before the Supreme 
Court. It is a California case. A man in Texas by the name of Ed- 
wards transported a man by the name of Duncan into California. 
He was arrested. The covering statute provides that any person or 
corporation transporting an indigent citizen into California is guilty 
of a misdemeanor. 

We now have the peculiar situation of the Federal Government 
encouraging that sort of migration. I am very pleased that your 
paper and your remarks indicate that we have to do something about 
this. Of course, the problem is difficult because you cannot tell a 
State just what residence laws they shall make. 

Mr. Taft. I think the grants-in-aid process is the only one which 
can bring any sort of legitimate pressure on them. I might add 


this because I think it affects your transient problem, since it pro- 
vides a labor supply without calling for transients. The Division 
of Defense Training in our agency, which is not under me but under 
•Governor McNutt and headed by Colonel McSherry, has been work- 
ing on the defense-training aspect of the program and has recently 
worked out relationships with the Labor Division of the O. P. M. 


It has a staff and is working especially on the problem of inducing 
industrial organizations to employ what one might call minority 
groups. There are three in particular that are of importance — per- 
haps I ought to say four. 

1 don't know that we can do anything about the first one. There 
is great reluctance on the part of many employers to employ citizens 
of the Axis countries. As I said, I don't know how much can be done 
about that. However, something certainly can be done about the 
other three groups, and Colonel McSherry is meeting with consid- 
erable success in that connection. 

I wouldn't put women in the minority group, but they have been 
discriminated against in employment. The defense training program 
includes the training of women and making them available tor a 
great many types of operations in which they can become quite skilled 
and do a thoroughly adequate job. This is proceeding even in ad- 
vance of securing from companies their consent to try women out. 
In a few cases they are beginning to meet success in getting industry 
to employ women. 


Iii the case of Negroes and Mexicans, there has been a great re- 
luctance on the part of some employers to use them, although they 
live in the community and in many cases are on relief. 

The problem of placing Mexicans has been greatly improved in 
the last few months, and in southern California they are beginning 
to employ Mexicans. 

In the case of Negroes, a number of forward steps have been made 
in connection with several new plants. The consent of the employer 
to use Negroes has been secured in advance and the training program 
has then started to fit them for the jobs which will be available. 

If you do that, then you eliminate the necessity of bringing in so 
many people from the outside. 

The Chairman. Mr. Taft, we appreciate your coming here, and I 
want to say on behalf of the committee that we have heard about your 
work and the splendid public service you are rendering. I especially 
appreciate your views because they are along the lines of my own. 


Mr. Taft. May I add just one word on something about which 
we really feel a great deal of satisfaction? It is the development of 
a real coordination among the regions of the various efforts in these 
fields. We have just met in Chicago with 12 regional coordinators 
of the Social Security Board, and they report that the regional ad- 
visory councils which bring together representatives of all Federal 


agencies in any of these fields — there are some 15 or 20 outside of our 
own agency — have increased their effectiveness in the interests of the 
meetings and in the importance of the accomplishments. 

In practically every region, instead of sending in field people from 
Washington or from some regional headquarters to secure information, 
they go first to the regional office and, through getting a list of the 
travel plans of other field representatives, are in many cases able to 
get them together. They get the information they require, when 
they go to the particular locality from which it is needed. The 
Budget Bureau has recently visited all of these regions, and both 
they and we feel that not only has a substantial amount of travel 
money been saved, but far greater integration and effective service 
has been achieved. 

The Chairman. You see, Mr. Taft, all during the last session of 
Congress we investigated the migration problem and traveled 
throughout the United States on that general subject. 

We were then focusing our attention on the migration of destitute 
citizens between States and now we are concerned with this defense 
migration. So far as I know this is the first congressional commit- 
tee that ever investigated human interstate commerce. We have 
spent billions for the iron and coal and steel going through the 
States, but we have neglected the human beings. 

We thank you very much Mr. Taft. 

Mr. Reporter, this is Mr. Arthur J. Altmeyer, Chairman of the 
Social Security Board. 


The Chairman. Mr. Altmeyer, we are pleased to have you with us 
this morning. Congressman Arnold has some questions he wishes 
to ask you. 

Mr. Altmeyer. I appreciate very much the opportunity to appear 
before your committee. I have already filed a rather lengthy manu- 

The Chairman. Yes; and that will be included in our record. 

(The material referred to above is as follows :) 

D. O. 

The Social Security Program in Rklation to Defense Migration 

During the past year the national-defense program has stimulated an ex- 
pansion of employment to the highest levels in the Nation's history. This in- 
crease has affected, not only the principal urban manufacturing centers, but also 
many of the smaller, predominantly nonindustrial communities as well. The 
rise in employment and the corresponding decline in unemployment have allevi- 
ated many of the problems of insecurity characteristic of the depression period. 
On the other hand, the increased mobility and migration, in response to expand- 
ing employment opportunities, are bringing in their wake many new problems of 
insecurity. People moving from one employment to another, of from one com- 
munity to another, are exposed to hazards of social and economic readjustment. 
It can be confidentially predicted that some of these hazards will be met by the 


traditional adaptability and resourcefulness of the American worker. Others 
will require new ways of meeting new social responsibilities in order to insure 
a continued progress of the United States toward the goals of social security. 


It is estimated by the Bureau of Labor Statistics that nonagricultural employ- 
ment in May 1941 reached 38.3 millions, the highest point in the Nation's history. 
This represents an increase in employment of 3.1 million over May 1940. Almost 
all of this increase is due, directly or indirectly, to the defense program. More 
that half of it occurred in manufacturing industries alone. In the aircraft 
industry, for example, employment increased by nearly one and one-third times. 
Employment in shipbuilding nearly doubled. Substantial increases occurred in 
such basic industries as machinery, iron and steel, nonferrous metals, chemicals, 
and rubber. The increase in the machine-tool industry, in which employment 
rose by nearly one-half during the year, is especially noteworthy since it was 
superimposed upon substantial gains in the preceding years. 

In addition to the increases in manufacturing employment, every other 
branch of nonagricultural employment recorded higher employment in 1941 
than in 1940. Increases were particularly great in construction, trade, and 
public employment. 

As a consequence of expanding employment, there has been a material de- 
crease in the number of persons unemployed and immediately available for 
employment. Unemployment at the time of the Census of Population in April 
1940 stood at about 8 million. It is variously estimated that this figure has 
shrunk since then by at least 3 and perhaps by as much as 4.5 million. The 
volume of unemployment, that is, of persons in the labor market and seeking 
work at a given time, does not, by any means, measure the entire reserve of 
labor that may be available for defense employment. The file of applicants 
actively seeking work through public employment offices, which stood at 5.7 
million in May 1940, was still above 5 million a year later. The rapid expan- 
sion of employment opportunities in certain areas has attracted into the 
market for wage employment many thousands of people not normally available 
for such work. In some areas of heavy demand, while employment was rising 
rapidly, registrations at the employment offices have actually increased in 
response to job opportunities or the prospect of job opportunities. It is likely 
that there are some millions of people who will become available in this way 
to meet the demand for labor as it arises. 

Uneven effects of the defense program,.- — The effects of the defense program 
have not been felt equally in all parts of the country nor among all groups 
in the labor market. While nonagricultural employment for the country as a 
whole increased by less than 10 percent between May 1940 and May 1941, em- 
ployment in New England and in the Great Lakes and South Atlantic regions 
increased by substantially more. On the other hand, in the West Central, and 
Rocky Mountain regions, the increases were much less. Spectacular gains 
were reported in Rhode Island, Connecticut, Indiana, Maryland, and Virginia, 
in all of which nonagricultural employment, as estimated by the Bureau of 
Labor Statistics, increased by more than 20 percent during the year. The 
smallest increases occurred in typically nonindustrial States, such as Iowa, 
Minnesota, Oklahoma, West Virginia, and the Rocky Mountain States. It is 
noteworthy, however, that employment in New York State increased by only 
(5 percent. 

The uneven expansion of employment reflects roughly the concentration of 
defense contracts in the highly industrialized areas suitable for the production 
of aircraft, ordnance, and ships. More than half of all defense contracts allo- 
cated through April 30. 1941, were concentrated in States containing one-third 
of the Nation's population. Exactly SO percent of defense contracts were con- 
centrated in 13 States containing exactly half of the total population. 

Aircraft production up to the present has been concentrated in Los Angeles, 
San Diego, and Seattle on the west coast, and in Connecticut, Long Island, 
northern New Jersey, Buffalo, and Baltimore in the East. New concentrations 
are projected in Michigan, Ohio, Indiana, Illinois, and in a midcontinent belt 
from Dallas to Omaha. Shipbuilding activities center in San Francisco and 
Seattle in the West, in Boston. New York, New Jersey, Baltimore, ami Norfolk 
in the East, and new yards are being located on the Gulf coast from .Mobile 
to the east Texas ports. Production of heavy ordnance, and of machinery and 
60396— 41— pt. 17 4 


machine tools is concentrated in the metal-working centers of the Northeast 
and North Central States. The greatest dispersion of contracts has occurred 
in the location of huge new plants for the manufacture of explosives and 
ammunition, which have typically been built in rural areas in the interior where 
their requirements of space, water, transportation, and labor could be met. 

On the other hand, many parts of the country have been relatively unaffected 
by the defense program. The Nation's two largest cities, New York and Chicago, 
have as yet been far underexploited as producers of defense materials ; and 
the flow of orders in significant amounts to many sections of the Middle West 
and the South have only begun to use the labor supply in those areas. More- 
over, even in places where the demand has been brisk not all groups in the 
working population have benefited equally. In general, the demand has been 
heaviest for men, for skilled workmen regardless of age, and for semiskilled 
and unskilled men in the younger and middle working ages (21 to 35), suitable 
for training. In most areas, women have not been used in defense production 
until the supply of men available locally or within recruiting range was ex- 
hausted, and only then in a few occupations and in limited numbers. Negroes 
have until recently been almost universally excluded from most defense indus- 
tries ; notably, aircraft, ordnance, tank construction, and powder plants. In the 
the past 2 or 3 months a greater willingness to employ Negroes in these plants 
has been noticed. On the other hand, the insistence on citizenship has become a 
widespread restriction in the past year. Although the statutory restrictions on 
the employment of aliens in defense industries is limited entirely to the manu- 
facture of aircraft and parts, and secret armaments, many employers in defense 
industries not included under the law have tended to exclude from employment 
aliens and, in some cases, naturalized citizens, or even native Americans of for- 
eign parentage, particularly those of German or Italian descent. The employ- 
ment of the supplies of available labor in certain areas has been further limited 
by the use of aptitude and personality tests and by physical examinations that 
sometimes impose more exacting standards than the jobs themselves would seem 
to require. As a consequence of these selective factors in reemployment, the 
available reserves are becoming increasingly concentrated in those areas where 
employment has not yet expanded greatly, and in those classes of workers imme- 
diately less acceptable to employers. These circumstances in part account for 
the persistence of problems of insecurity and dependency, in spite of the increase 
of employment opportunities. 

Labor shortages. — The sudden and unprecedented demand for labor for de- 
fense industries, particularly aircraft, shipbuilding, machinery, and machine 
tools, has led to shortages in certain crucial skilled and higher grade semiskilled 
occupations. According to latest reports to the Bureau of Employment Security 
of the Social Security Board, shortages are evident in 78 of 394 defense occupa- 
tions selected for continuous observations because shortages were feared. Most 
of the shortages are in skilled or highly specialized metalworking and metal- 
forming occupations, in many of which the supply has been so depleted by the 
demands of the past year that the market affords virtually no available quali- 
fied workers. 

Perhaps the most difficult situations are occurring in aircraft and shipbuilding. 
In shipbuilding, old yards have been expanded and new yards are being estab- 
lished in areas where the industry did not previously exist or where the yards 
have been idle for many years. Because of increased employment in established 
shipbuilding centers, most shipyard workers in these communities, if there were 
any prior to the defense program, have found employment elsewhere. The new 
yards can in most instances train the bulk of the needed workers, but there 
remains an absolute minimum number of key skilled and supervisory workers 
who must be found if the yard is to get into production. Likewise, the aircraft 
industry, particularly that portion of the industry producing airframes, is, with 
the help of the defense training program, training huge numbers of workers. 
The training program can meet the requirements for semiskilled workers, but 
competent supervisors and a minimum nucleus of skilled craftsmen must be 
available to staff new plants. 

In some areas where defense production got under way in the early stages 
of the program, the demand quickly exhausted the supplies of experienced work- 
ers and general area-wide shortages of acceptable factory labor are now threat- 
ened. Notably in the industrialized cities of Connecticut and in the aircraft- 
manufacturing centers of southern California, it has been necessary to recruit 
workers from the neighboring rural States in order to avert a general shortage. 


In other communities, while no such widespread shortages have yet appeared, 
it is expected that the local labor supply will not suffice to meet the demands 
of the next 12 to 18 months. In such areas the most intensive recruitment, 
training, and placement programs will be required to prevent delays in defense 


In response to the demands of defense industries, the United States Employ- 
ment Service, under the guidance of the Bureau of Employment Security, has 
greatly intensified its recruiting and placement program. Placements for the 
year ending May 31, 1941, were 4.5 million, an increase of nearly 1,000,000 from 
the corresponding 12 months of the preceding year. The increases were particu- 
larly noteworthy in manufacturing and construction, the 2 industries most 
immediately affected by the defense program. Placements in manufacturing 
industries in April 1941 numbered nearly 100,000, an increase of almost 120 
percent from the preceding April. More than 70,000 placements were made in 
construction in the same month, an increase of nearly 75 percent. The volume 
of placements of all kinds made through public employment offices currently is 
now at the rate of about a half a million a month, the highest in the history 
of the Employment Service. 

The fact that the volume of placements continues to increase, while visible 
reserves of labor decline in itself suggests the extent to which new sources of 
labor are being tapped. During the spring of 1941 the Employment Service 
conducted an intensive campaign to list on its registers all available workers, 
especially those in the metal-working occupations in which shortages were appar- 
ent. This Nation-wide effort, together with the day-to-day activities of employ- 
ment services in recruiting new sources of labor for job openings, explains why 
the registers of the employment offices have declined by only half a million in a 
year in which the decline in unemployment was six or eight times as great. 

In addition to intensive use of local sources of labor, the Employment Service, 
through the machinery for clearance placements, has filled thousands of jobs, 
particularly in construction, in areas where the local labor supply was insufficient 
to meet the demand. Through the clearance-placement system the Employment 
Service is able to circulate information about job openings that cannot be filled 
locally and to recruit, on short notice, workers who are willing to move to the 
job site. More than 10,000 such placements have been made in every month of 
1941, and in one month the number reached nearly 25,000. Most of these place- 
ments have been made in response to demands for construction workers in rural 
areas where large defense contracts have required many more workers than 
the area could supply. 

More recently, in its attempts to deal with the problem of shortage through 
the Employment Service, the Bureau of Employment Security has designated 
a regional labor supply officer in each of the 12 Social Security Board regions. 
This officer is charged with the responsibility for guiding and coordinating 
the activities of State employment services in the recruitment of labor for 
defense employment. Through State and regional committees designated by 
the Office of Production Management, the Employment Service is collaborating 
with the vocational defense training program, the National Youth Administration, 
and the training-within-industry services of the Office of Production Manage- 
ment in order that training needs may be anticipated and trainees recruited, 
trained, and placed in defense employment. The program of job analysis and 
testing of the Bureau of Employment Security has been expanded to provide 
assistance to employers in selecting new workers, in training, and in breaking 
down complex jobs to permit the use of workers with limited specialized skills. 
At the same time, the Employment Service has undertaken to gather, through 
the local and State employment offices, current information on the extent and 
character of the anticipated demand in defense industries, the supply of workers 
available, and the emergence of labor shortages. 


The fast-moving events that have been taking place and which will take place 
even faster during this period of national emergency have a profound effect on 
the public employment office system of this country. If we are to meet success 
fully the supreme test which confronts us today there must exist a reallv national 
system of public employment offices, in accordance with the mandate contained 


in the Wagner-Peyser Act. There is still much needless migration of workers. 
Many workers and many employers still do not know what the Employment Serv- 
ice is and what it can do for them. But, on the other hand, in many employment 
offices a spirit of narrow localism still exists which prevents maximum Nation- 
wide utilization of our available resources. The Employment Service is no 
longer recruiting men from a particular city or State. Each employment office 
is a recruiting center for the entire United States. Each employment office is a 
link in a national effort. It is the responsibility of the Employment Service to 
find increasingly effective Ways and means for minimizing the tremendous social 
and economic waste which now occurs in the haphazard matching of men and 
jobs. This job must be done irrespective of geographical location, irrespective of 
red tape, and irrespective of the time and energy required. 

The task is a tremendous one. The Employment Service has a responsibility 
toward the 00,000,000 persons — employees and employers — working at the 25,000 
different occupations in the labor market. It must know what these people are 
doing, what they can do, and where their abilities can best be utilized. It is for 
this reason that we are making labor market surveys in about 200 areas in order 
to guide operations and policy in the critical months ahead. Only 400 occupa- 
tions are classified as defense occupations so far. But when it comes to finding a 
person to fill a job we must canvass every possible occupation and person that 
might yield the right man. In these days of total defense no job and no person 
is beyond the responsibility of the Employment Service. 

Because of these demands the Employment Service is becoming a more truly 
national service. During the first 3 months of 1941 the number of clearance 
placements increased 10 times over a year ago. During this emergency we see 
clearly the trend that has been developing in recent years — a national labor mar- 
ket with a mobile labor supply. These facts clearly demonstrate the need for a 
Nation-wide employment service with a Nation-wide outlook and a Nation-wide 
supply of men and women available for placement. The horizon of the Employ- 
ment Service cannot be limited to city and State boundary lines. The Employ- 
ment Service is officially designated by the Office of Produclion Management for 
the recruitment of labor required to meet national-defense needs. This is an 
obligation which must be carried out. 

During the coming months it will be the responsibility of the Employment Serv- 
ice to see that each and every person in the Nation is employed at his or her 
maximum usefulness in the defense effort. It must exercise every facility at 
its command to assure the greatest potential service of every person. It must 
encourage and assist employers and labor to make the most effective use of each 
individual's abilities, not only to help to speed up current production, but also to 
reduce the necessity for legislation regulating hiring practices. 

In Great Britain, for example, as soon as shortages became obvious, employers 
in the metal industry and the construction industry were required to hire all new 
wage earners through the employment service. Later all dock labor, workers 
in shipbuilding, and in specific metal-trades occupations were required to be 
registered in the employment offices and are available for transfer not only from 
one employer to another but from one district to another. Except in the case 
of union contracts such transfers are the responsibility of the employment service. 
In making any transfers the employment office consults with local committees 
representing employers and unions. 

Many shifts in labor from one job to another and from one employer to another 
must take place during the coming months if this country is to make an all-out 
effort. But such shifts and transfers must be made systematically, impartially, 
and efficiently and the United States Employment Service is best equipped to do 
the job. 

The development of a really effective placement service, however, is a difficult 
task. It requires sound organization, leadership, professional competence, and 
hard work. There now exist wide variations in the quality and performance of 
the State services and wide variations between local offices in the same State. 
It is hoped that these problems can be satisfactorily worked out during the very 
near future in order that the Employment Service can make its maximum contri- 
bution toward the defense effort. 


Surveys undertaken by the Bureau of Employment Security in collaboration with 
State employment security agencies indicate that in some communities the supplies 
of labor locallv available will not suffice to meet the labor demand generated by the 


defense program. In such communities shortages will be averted only by the 
inmigration of substantial numbers of workers. It is estimated, for example, that 
120,000 workers will be needed in Los Angeles during 1941, of whom as many as 
50,000 may have to be imported. Similarly, to meet a demand of nearly 80,000 in 
Boston by the end of 1942, 7,000 or S,000 workers may have to be imported ; and to 
meet a demand for 168,000 in the Philadelphia area during 1941 as many as 70,000 
workers will have to be recruited from outside the city. Altogether, in 117 areas 
surveyed the demand for workers during the next 12 months will be approximately 
one and one-half million, of whom 500,000 cannot be recruited locally and will have 
to be imported to forestall community shortages of labor for defense industries. 
This estimate, it should be noted, includes only the necessary migration in the 
areas surveyed and takes no account of the excess movement of migrants who may 
be attracted to defense areas in their quest for jobs. There is ample evidence in 
the reports received by the Bureau of Employment Security from the State employ- 
ment security agencies that migration arising as a result of the defense program 
has already been substantial in volume. 

Causes of migration. — It is apparent that only a small part of the migration of 
workers during recent months has been planned or directed by community agencies 
with the specific object of meeting local labor shortages. While particular in- 
dustries and communities requiring labor have made their needs known generally, 
it has been virtually impossible to control the response to such publicity. Workers 
have migrated in excessive numbers to certain points ; very often a demand for 
certain specific types of workers, usually skilled, has resulted in an influx of 
workers of all types into a particular community. 

There is no doubt that much of this migration has served a valuable purpose in 
meeting labor shortages, but a great deal of it has been unnecessary, wasteful, and 
costly both to the individual worker and the community to which he migrates. 

The regular reports to the Bureau of Employment Security and the special 
reports on defense migration into selected areas, obtained at the request of the 
House Committee on National Defense Migration, indicate that migration is most 
frequently attributable to lack of employment in the home community, to increased 
employment in defense areas, and, particularly, to wage differentials between those 
areas and the communities from which the migrants came. Newspaper publicity, 
advertising, rumors, reports spread by friends and relatives, are frequently noted 
as stimulants to migration. The Washington State Employment Service reports 
that "the migration of unskilled job seekers is extraordinarily responsive to pub- 
licity. Skilled workers have some assurance of employment in their own com- 
munities and are less likely to move in response to rumors." Newspaper publicity 
on projects in Tacoma and Seattle was said to have "unleashed an av;,!anche of 
undirected migration." 

California reports that a large proportion of workers are brought into the area 
by rumors and newspaper publicity. "This is particularly the case with unskilled 
agricultural workers and workers from the South Central States." 

Intensive recruiting campaigns undertaken by employers, involving advertising 
and scouting for labor, have in the main been directed toward securing skilled 
workers in specialized branches of industry. While accounts of such activities 
occur frequently in the labor market reports, it would appear that workers 
secured in this manner are only a small proportion of the total number of 
migrants. Migration of skilled workers in response to recruiting activities of 
the State employment services in recruiting workers also account for a small 
proportion of the total number. 

Character of the migration. — According to reports, the recent migrants have 
been typically white male citizens in the younger and middle-working ages, be- 
tween 20 and 50. Many are reported to be heads of families, but most have 
not moved their families with them, frequently because of lack of adequate 
housing facilities. The migration of Negroes, so characteristic of the World 
War period, has not occurred in large numbers. 

Although the character of the migration has varied widely from community 
to community, most of the migrants are reported to be semiskilled and un- 
skilled workers and trainees. Many skilled building workers have migrated to 
the sites of defense construction projects, both military and industrial ; and 
skilled industrial workers have moved from low-wage areas to high-wage 
centers of defense production. On the whole, however, the largest numbers of 
migrants appear to be lower skilled or inexperienced workers moving in response 
to reports of job opportunities in areas where defense employment is known 
to be expanding. Many of them are farm workers and others from rural areas; 
others are drawn from depressed manufacturing or mining areas. 


General migration of skilled and unskilled workers of all kinds has occurred 
notably into New England, into the Middle Western and Great Lakes industrial 
areas, and into California. Migration in connection with defense construction 
projects accounts for most of the influx into the South Atlantic States and into 
scattered areas in the far West and Southwest. In general, there has been 
steady out-migration of workers from the mountain States and drought areas 
to the Pacific coast and other defense areas. A similar out-migration has been 
noted from Wisconsin and Minnesota. There has been a migration of urban 
construction workers to the South Atlantic States and a less pronounced move- 
ment of southern workers to industrial areas in the border States. It has been 
noted that some of the heavily populated industrial areas, notably Pennsylvania, 
New Jersey, Metropolitan New York, Boston, and St. Louis, though reporting 
some interchange of skilled workers with other areas, have been relatively 
little affected by mass migrations. 

In addition to these interstate and Nation-wide migrations, there is reported 
a considerable volume of short-range migration from one community to another 
within the same general locality — industrial workers leaving small towns for 
nearby defense centers — rural workers leaving farms to seek work both in the 
smaller communities and the larger cities, with a net gain for the more highly 
urbanized districts. It appears that many skilled workers migrate over an 
extensive territory and that they are usually successful in finding work, while 
the less skilled workers migrating to nearby defense centers, often have difficulty 
in competing with the already plentiful local labor supply. 

New England, the Middle Western, and Great Lakes industrial areas, and the 
Pacific coast have experienced a large volume of in-migration of workers of all 
kinds, skilled and unskilled. Migration into the New England region has been 
centered in the State of Connecticut where as early as September 1940 an 
influx of workers from Pennsylvania, New Jersey, New York, and from the 
remaining New England States was observed. A survey made by the Associa- 
tion of Manufacturers of Hartford, indicated that 15 percent of the workers 
added by manufacturing establishments in the Hartford area within the past 
year were last employed out of the State. Most of them came from other parts 
of New England. A survey made by the State unemployment compensation 
division in five important areas showed that for these five employment offices 
an average of 20.9 percent of new registrants with the employment service 
were last employed in other States. With respect to other New England States, 
migration has been predominantly outward, to Connecticut and the States imme- 
diate] 1 - outside the New England area, and has involved considerable numbers 
of workers. 

The Maryland State Employment Service estimates an in-migration of 15,000 
to 20,000 workers into the Baltimore-Annapolis area during the period of de- 
fense expansion. In the District of Columbia it has been estimated that the 
population has increased by 65,000 from May 1, 1940, up to March 1941. Be- 
tween 3,000 and 4,000 new Federal employees, a large proportion imported from 
outside the Washington area are being added to the pay rolls each month. 

Ohio and Michigan have attracted a large number of migrant job seekers 
while at the same time there has been a smaller movement of workers from 
Ohio to such places as Charlestown, Ind., and to parts of Pennsylvania. Ohio 
notes particularly an influx of thousands of unskilled workers from Kentucky 
and Tennessee into industrial centers such as Cincinnati, Ravenna, and Canton. 
It is stated that "over 7,000 applications for work from such persons were re- 
ceived by 58 Cincinnati firms during January." 

Detroit has been the center of attraction for migrant workers. These migrants 
are reported to come from other parts of Michigan, from other Middle Western 
States (especially Ohio, Indiana, Illinois), and from Kentucky and Tennessee. 
During the 8-month period ending March 31, 1941, nearly 11,000 workers from 
outside the city registered with the Detroit Central Placement Office. 

Migration into Louisville, Ky., has been very marked. Workers have come 
both from within and outside the State resulting in a net increase in the supply 
of workers in spite of large scale migration of agricultural labor in Indiana 
and Ohio. 

Along the Pacific coast there has been a vast movement within the area and 
from outside the area affecting California, Oregon, and Washington. Migration 
into Seattle-Tacoma-Bremerton area of Washington since September 1940 is 
estimated at 34,000 workers. The total number of workers coming into 4 areas 
of California (San Francisco, Los Angeles, San Diego, and the central coast 


area) has been estimated at 16S,O0O, about one-half of which migrated from 
outside the State. The California State Employment Service estimates that the 
peak of this in-migration has not yet been reached. 

In contrast to the general migration of large numbers of workers into the 
industrial areas, there has been a more specialized type of migration in con- 
nection with defense construction projects, usually located outside populous 
urban districts. Such migration has been noted particularly in the Southern 
States, from Virginia and West Virginia to Florida, and extending as far west 
as Texas and New Mexico. A large influx of construction workers has been 
noted in Virginia, especially into Alexandria, Radford, Norfolk, and Newport 
News. Extensive migration has been reported into other areas of defense 
construction such as Spartanburg, S. C. ; Tullahoma and Milan, Tenn. ; Camp 
Wheeler, Ga. ; Mobile, Ala. : and Camp Blanding, Fla. Many of the workers 
migrating to such communities have been skilled construction workers from 
northern urban areas, while at the same time it has been noted that many 
southern laborers, particularly from the rural sections, have migrated to in- 
dustrial regions in the border States and farther North. Similarly, large con- 
struction projects in other areas, such as Charleston, Ind., Ravenna, Ohio, and 
Joliet, 111., have attracted thousands of migrant workers. 

In general there has been a steady out-migration of workers from Moun- 
tain States and drought areas to the Pacific coast and to other centers of de- 
fense activity. Similar out-migration has been noted from Wisconsin and 
Minnesota. These States in general have been relatively little affected by the 
program, and employment opportunities have been relatively less favorable 
than in other sections of the country. There are many reports from States 
ranging from Montana in the North to New Mexico in the South, from Nevada 
in the West through Missouri in the East, to show how this territory has lost 
skilled, as well as semiskilled and unskilled workers, to the industrial areas 
of the Middle West and the Pacific coast. 

Some of the heavily populated industrial areas, especially those in the East,, 
have been relatively little affected by mass migration movements, though report- 
ing some interchange of skilled workers with other areas. A report received re- 
garding the Boston metropolitan area indicates that in spite of a considerable 
amount of defense activity there has been no sizable in-migration. "The defense 
industries have, until this time, utilized the labor supply within a 25-mile radius. 
The Boston metropolitan district has, to date, been able to supply all the semi- 
skilled and Unskilled labor required and has also been able to fill orders in the 
majority of the skilled occupations." New York reports similarly : "Our recent 
inquiries indicate that there is no significant amount of inmigration of manual 
labor into New York State seeking defense employment. There is rather some 
out-migration to other defense areas, notably Connecticut." Particular mention 
is made of the 22,000 skilled construction workers to Army projects outside the 
State, as well as the exodus of a number of carpenters, plumbers, and metal- 
trades workers to points on the east coast from Massachusetts to Florida. Up- 
state New York, likewise, seems to have been little affected by in-migration 
although recent information received may indicate that such a movement is now 

Philadelphia, up until very recently, has observed little in-migration. How- 
ever, reports received during April indicate that migration into the Philadelphia 
area is accelerating. "Approximately one-half of those moving into the uptown 
area are from out-of-State. * * * The number of persons moving into the 
uptown area during the first 3 weeks in April will more than double the number 
moving in during the month of March." Workers from the anthracite region of 
Pennsylvania have sought work in New York ami New Jersey and workers in 
the Johnstown area have migrated to sections of Ohio and West Virginia al- 
though this movement has "not as yet assumed any serious proportions." 

New Jersey, a heavily industrialized region, reports that in spite of considerable 
increase of employment in certain areas there has been no appreciable migration 
of workers into the State since the inception of the defense program. This 
is attributed to the chronic housing shortage; persons obtaining employment in 
defense areas prefer or are forced to commute long distances rather than take 
up residence near the place of their employment. 

St. Louis reports a condition similar to that observed in Boston. New York, 
New Jersey, and Pennsylvania. The local labor supply apparently has been 
ample to care for the reemployment arising from the defense program. "Gen- 
erally speaking there has been no marked migration of workers to or from the 



St. Louis area. * * * Movements of workers into the St. Louis area have 
not been so noticeable as out-migration. 

Problems arising from migration. — The migrants have brought many problems 
with them. The concentrations of thousands of workers at the sites of large 
scale construction projects in sparsely populated areas have resulted in serious 
shortages of shelter and sanitary facilities. In most cases the accommodations 
for housing and feeding were sufficient for only a part of the workers. In at 
least one instance, an influenza epidemic affected half of the construction crew 
at a large Army project. In other cases, insanitary conditions and intense 
suffering were reported. Since most of the projects have been rushed to com- 
pletion in a short time, these emergency situations did not persist. 

The problems arising from the migration of workers in search of factory em- 
ployment in defense industries have not been self-liquidating. In addition to the 
usual problems of adjustment to a new environment, the migrants, in common 
with residents, have been confronted with shortages of housing and community 
facilities. In some cases where country towns and small cities have grown, in 
a few months to accommodate thousands of migrants, housing, water supply, 
sewage disposal, schools and recreational facilities, and other services have proven 
inadequate. There are many reports of workers sleeping in "hot beds," so- 
called because they are occupied in three 8-hour shifts by three different in- 
dividuals. Fears have been expressed that overcrowding and insanitary condi- 
tions may lead to serious epidemics when winter sets in. 

A special problem has arisen in connection with the migration of young men 
to be trained in centers of defense employment. These men frequently leave 
home without money enough to maintain themselves during the period of their 
training and until they become self-supporting through employment. This period 
may vary from 4 or 6 to 14 weeks, during which they may be without money for 
food and lodging, with consequent damage to their health and morale. 

Thousands of migrants have found jobs in defense or other employment ; 
thousands more following rumors of job opportunities, have found no jobs. In 
general, the skilled workers are reported to have been readily absorbed : many 
of the unskilled have not. There is evidence that some of these have become 
transients, moving from place to place in search of work. Others have become 
stranded without means of support or means to move on. These present prob- 
lems of dependency and relief. 


The work of the Farm Placement Service of the Bureau of Employment Se- 
curity is becoming increasingly important as the labor market tightens. During 
1940 the Employment Service made 1,566.000 agricultural placements ; and place- 
ments in agriculture for the first quarter of 1941 exceeded the same quarter of 
1940 about 50 percent. 

In preparing to meet the progressively difficult problems which are developing 
in the agricultural labor market, the Bureau of Employment Security is taking 
steps to strengthen the Farm Placement Service at each level of operation. The 
Bureau plans to add Farm Placement specialists to assist the States' employment 
services in developing their services to farmers and form workers and in directing 
the movement of agricultural labor. 

At present the Employment Service is developing an extensive plan for the 
direction of agricultural workers to areas of farm labor demand. Each State 
employment service is being encouraged to give proper consideration and atten- 
tion to its agricultural labor problems. In a considerable number of States, 
Farm Placement supervisors are being added to the State administrative staff 
to give proper supervision and plan for the States' farm-placement activities. In 
addition to this supervisory attention, States are being encouraged to strengthen 
the personnel of local offices in order to adequately serve the agricultural labor 
needs of each community. 

It is recognized that the problem of agricultural migration is so widespread and 
so intense that proper direction and control cannot be provided without the 
assistance of the Area Farm Placement representatives to coordinate movements 
of workers within a group of States comprising an agricultural labor market. 
Such an agricultural-labor market consists of a group of States in which there 
ordinarily exists both demand for and supply of workers who move with the 
crop seasons and in which the crops and production methods are similar. By 
having one individual devoting attention exclusively to the common problems of 
the agricultural-labor market in such an area, greatest progress can be made 


toward developing an effective employment service to agriculture and toward 
securing an orderly and controlled movement of workers which will prevent 
surpluses and will fully utilize the labor supply by affording more continuous 

Plans are being put into operation for one experimental area organization in 
a number of Rocky Mountain and Pacific Coast States. The Area Farm Place- 
ment representatives will assist the individual States in strengthening their farm 
placement service by analyzing the problems of the State in order that the 
employment service may be organized effectively to recruit farm workers and 
direct them to employment in a series of peak-crop activities. He will coordinate 
and direct interstate movements of agricultural workers and will carry out 
essential studies relating to the agricultural-labor market which are vitally 
important for preseasonal planning, for discovering all possible sources of work- 
ers, and for developing methods to provide a controlled direction of seasonal 
agricultural workers. If operations in this area are successful, other similar 
areas will be established in other parts of the country. 

All State employment services have been directed to cooperate with the agri- 
cultural labor subcommittee of the State land-use planning committee. In many 
States this subcommittee has recommended that farmers use the Employment 
Service exclusively in recruiting farm labor. These subcommittees lend every 
assistance to the Employment Service, which is the operating agency respon- 
sible for recruiting and placing agricultural workers, by making available in- 
formation on the factors relating to the demand for and supply of agricultural 
workers, by cooperatively conducting studies on special problems, and by work- 
ing with agricultural employers to bring about changes in hiring practices which 
will provide for the most effective utilization of farm labor. For example, it 
was found that workers in one State were getting only about 25 percent em- 
ployment, while those doing similar work in an adjoining State were getting 
75 percent employment because of arrangements made by the Employment Serv- 
ice with growers for joint use of workers. This made the labor supply three 
times as effective in the latter State. Such programs can be greatly imple- 
mented by the subcommittees. 

The Farm Placement Service has two objectives in the immediate future. 
First, it seeks to tap all sources of workers by strengthening its organization 
and developing full cooperation with other governmental agencies such as 
Farm Security Administration, Work Projects Administration, and the Depart- 
ment of Agriculture. Second, it helps to attain more effective utilization of 
tin' labor supply, by influencing the movements of migratory labor to provide 
workers when and where they are needed, and by encouraging decasualization 
of employment to provide more continuous work and greater earnings. 


Unemployment compensation. — As a consequence of the increase in employ- 
ment arising out of the defense program, the number of unemployment com- 
pensation benefit recipients has dropped sharply i" recent months. Since 
January 1941 each month has witnessed a greater decline (compared with the 
corresponding month of the preceding year) in the average weekly number of 
claimants receiving benefits. The weekly average in January 1941 was 826,000, 
or 6 percent below the 1940 figure. By March the weekly number of claim- 
ants had dropped to 762,0(30 or 30 percent below the 1940 figure. The May 
figure of 659,000 was 45 percent below the corresponding month in 1940. 

From October 1940, when the effects of the defense program first became 
evident, through June 1941 the amount paid out in benefits ( $2S9,000,000 ) was 
22 percent less than in the corresponding period of the year before. Like the 
volume of claims, the amount of benefits paid has declined during the first half 
of 1941. Benefits paid in January 1941 were only 4 percent less than in Janu- 
ary 1940. By March the difference was 29 percent, and by June, 43 percent. 
The monthly average of benefit disbursements for the first 6 months of 1941 
was only $32,800,000 per month, as compared with $47,200,000 for the first half 
of 1940. 

The largest decrease has occurred in the States along the Atlantic seaboard 
and in the Great Lakes region, where the industrial concentration is heaviest 
and where the bulk of the defense contracts has been awarded. Although some 
decrease may occur in the next few months, the volume of benefits will con- 
tinue to be substantial, regardless of the high level of employment in manu- 
facturing and construction. Labor turn-over, temporary lay-offs due to short- 


ages of materials or equipment, dislocation resulting- from establishment of 
priorities on materials, and other fractional factors- will result in a continued 
volume of short-term employment for large numbers of workers. 

Approximately 3S cents were disbursed in benefits for each dollar collected 
during October 1940-May 1941, compared with 50 cents in the corresponding 
period of the preceding year. As a result of the excess of contributions of pay- 
ments, funds available for benefits in the claims of May 1941 totaled 
$2,100,000,000, an increase of 22 percent over the balance at the end of Septem- 
ber 1940. It should be recognized, however, that the growing fund represents 
a future obligation to millions of workers covered by the unemployment com- 
pensation laws. Much of the work in defense industries is of a highly unstable 
character. Construction projects, undertaken at great speed, generate a large 
volume of employment which terminates when the projects are completed. The 
great volume of employment in industries engaged in the manufacture of 
defense materials and the gigantic impetus provided to production and dis- 
tribution by the defense program results in the accumulntion of benefit 
rights for millions of workers. The reserves being accumulated today will 
supply the funds needed to meet these obligations after the termination of the 
emergency, when it may be expected that the volume of unemployment will 
result in claims in excess of the collections. 

At the same time, it must be pointed out that the benefits provided by the 
State laws are even now inadequate to cover the risk of unemployment com- 
pensation. There is no doubt that the existing benefits must be made more 
nearly adequate if we are to achieve the objectives of unemployment insurance 
as a real first line of defense in meeting the ever-present problem of unemployment. 

In many States the waiting period is much too long. Frequently an unem- 
ployed worker does not receive his first payment until the fifth or sixth week 
of unemployment. The amount of benefits is also inadequate. The payments 
in some cases have been as low as $2 and $3 per week. But the most significant 
inadequacy of the present laws is the very short duration of benefits. Last year 
over one-half of all workers in the United States receiving benefits were still 
unemployed when they exhausted all their benefit rights. In one State over 80 
percent of the workers exhausted their benefits. In some States the maximum 
duration of benefits has been 2 or 3 weeks for particular individuals. An indi- 
vidual may receive a few dollars per week for only a very few weeks after a 3-week 
waiting period and a further delay for administrative reasons. As a consequence 
of these inadequacies, workers whose loss of wages should be compensated by 
unemployment insurance are frequently forced to turn to relief agencies for 

In addition to the inadequacy of the benefits under existing laws there 
is the fact that some 3,000,000 employees of smaller sized firms are entirely 
excluded from coverage. These same workers, however, are covered already 
under the Federal old-age and survivors insurance system. They should also 
be given the protection of unemployment insurance. 

Maritime workers — a group essential to the national-defense program — are 
another group already covered under the Federal old-age and survivors insur- 
ance system but excluded from unemployment insurance. There is no insuper- 
able administrative difficulty involved in providing unemployment insurance 
benefits to maritime workers. Such coverage must and should be under a 
Federal system. 

The financial situation with respect to the various State reserve funds is 
also very unsatisfactory. While the States have a total of over $2,000,000,000 
in their reserve funds this figure does not disclose the great unevenness which 
exists from State to State. Some State funds are bulging with reserves; others 
are in a relatively poor situation. For example, in Maine the State reserve 
fund at the end of 1940 was equal to less than 1 year of the highest previous 
benefit disbursements; in Delaware the reserve was equal to over 8 years of 
the highest benefit payments. 

This variation undoubtedly will be further accentuated by the increased em- 
ployment under the national-defense program due to the concentration of 
defense employment in industrial areas. The result is likely to be that those 
Stales with heavy defense employment may have their unemployment insur- 
ance reserve funds go completely bankrupt as a result of post-defense unemploy- 
ment while other State funds will have much more than enough to remain 
practically intact. 

Consequently, immediate consideration must be given to ways and means of 
strengthening the present unemployment insm-ance system so that it will be 


a safer and sounder program. The existing State-by-State program must be 
carefully reappraised in the light of recent experience and current developments 
to see wherein changes must be made to provide more adequate benefits, a safer 
financial system, and a simpler, more economical method of administration. 

The increase in the volume of interstate migration creates a special problem 
with respect to unemployment insurance. By the terms of an interstate agree- 
ment, worked out with the aid of the Social Security Board, a worker who 
becomes unemployed in one State, may, under certain circumstances, file a claim 
against benefit rights which he may have accumulated in another State. In 
this way, workers who have satisfied all conditions for benefits, except resi- 
dence, can continue their search for work wherever employment opportunities 
appear most favorable, and at the same time, continue to draw benefits to which 
they were entitled. The volume of such interstate claims, while less in 1941 
than in 1940 because of the decline in unemployment, has decreased relatively 
very much less than the volume of local claims. Interstate claims in the period 
from January to May 1941 numbered 859,000, only 6 percent less than in the 
same period in 1940, while the volume of intrastate claims in the same Z 
months declined 32 percent. As a result, interstate claims, which accounted 
for only 4.6 percent of all claims in the first five months of 1940, accounted 
for 6.4 percent in the 1941 period. The relative increase in interstate claims 
reflects the increased interstate movement of covered workers. 

On the other hand, under the Federal-State system, the eligibility of workers 
to receive benefits and the amount and duration of benefits paid are determined 
by the amount of employment and earnings in the State against which the 
claim is made. If during a given year a claimant has worked in more than one 
State, his earnings may be so divided that he is eligible for no benefits or for 
very small benefits in any one State, even though in the aggregate he may have 
worked and earned enough to qualify for substantial payments. Under existing 
laws no State permits an individual to pool benefit rights accumulated in two 
or more States. Since the problem of interstate mobility is becoming an in- 
creasingly important one, every effort must be made to work out some satis- 
factory method of fully protecting the rights of this group. 

Federal old-age and survivors insurance. — Monthly benefits first became pay- 
able under the Federal old-age and survivors insurance program in January 
1940. The rapid expansion of employment due to the defense program has re- 
sulted in larger contributions than originally estimated and less expenditures 
for benefits. Some 25,000 aged persons who already have applied for their in- 
surance benefits have gone back to work and many others have not retired due 
to favorable employment opportunities at the present time. 

The increased employment has resulted, however, in an increase in the num- 
ber of persons covered by the system with the result that the insurance program 
is now incurring a tremendous liability for payments which will come due after 
the defense program stops and for many years thereafter. 

Another one of the major problems which has arisen as a result of the defense 
program is due to the loss of protection which workers suffer when they leave 
employment covered by the insurance system to enter either the military service 
or Federal civilian employment. At the present time workers who leave their 
regular jobs to go into military service or into Government arsenals, or any 
other type of civilian employment under the Federal Government do not con- 
tinue to build up their credits toward Federal old-age or survivors insurance. 
While it is true that some of the workers who go into the Federal service be- 
come subject to the Federal Civil Service Retirement Act, their contributions 
will be refunded to them when they leave the service at the end of the defense 
program. The result is that they will have lost the period while in Federal 
service in terms of credits toward their insurance benefits. This problem re- 
quires legislation for its solution and it is hoped that the appropriate com- 
mittees of Congress will give early consideration to this matter. 

Periods of increased industrial activity bring in many marginal workers into 
the labor market who are usually not employed or are unemployable during so- 
called normal times. Moreover, the increased industrial tempo frequently causes 
difficult problems of personal adjustment when business slackens or industrial 
processes change. These considerations indicate the necessity for giving further 
thought to the possibility of extending the present insurance system to cover the 
risk of disability. 

The present law could easily and immediately be modified to include payment 
to individuals who become permanently and totally disabled. Every country 
in the world which has an old-age insurance system, with one exception, also 


covers disability. There is a definite relationship between old age, death, and 
disability which justifies the existence of one common program for protection 
against these three hazards. All three risks materialize in a permanent de- 
parture of the worker from the labor market and the complete loss of wage 
income. Disability is concentrated at the upper ages and both death and dis- 
ability occur frequently before the individual has an opportunity to retire from 

The addition of disability protection to our existing insurance program would 
do much to improve the program. Over one-fourth of all cases receiving State aid 
to dependent children at the present time are due to the disability of the father. 
Social insurance would provide a better mechanism for caring for the families 
of workers who become disabled. 

The addition of disability insurance would greatly aid in meeting the problems 
which will arise in the post-defense period. There already exists a Nation-wide 
network of offices available to pay Federal old-age and survivors' insurance 
benefits. The administrative foundation exists for the extension of the system 
to meet the problem of disability. Congressional consideration of this matter 
at the present time would make it possible to have a going concern in operation at 
the cessation of the defense program. 

Need for extended coverage. — The increased mobility of workers to meet the 
expanding demand for labor has resulted in a greater number of shifts between 
covered and noncovered employment. Many thousands of rural agricultural 
workers have left the farms temporarily to take jobs on construction projects. 
At the same time, the increasing stringency in the market for farm labor will 
lead workers who, at certain times of the year, work in covered employment to 
accept employment in temporary seasonal jobs in agriculture. Because of the 
exclusions from unemployment compensation and old-age and survivors' insurance 
of many persons, particularly those engaged in agriculture and domestic service, 
workers who shift jobs receive credits for only part of their employment during 
the year. As a consequence, many workers who shordd be protected by unem- 
ployment benefits and who should be accumulating rights for old-age insurance 
will not be eligible. Consideration should be given, therefore, to the extension of 
social insurance to agricultural workers, who are, in many respects, more exposed 
to the hazards of insecurity than urban industrial and white-collar workers. 
Consideration should also be given to the coverage of as many other groups as 

Public assistance. — The Social Security Act provides for grants-in-aid to 
matcb. dollar for dollar, State funds for assistance to needy persons, 65 and over, 
to needy blind persons, and to dependent children. By definition the recipients 
of these forms of assistance are unemployable and not likely to benefit from 
increased employment opportunities, except to the extent that responsible 
relatives find it possible to provide for them out of increased earnings. 

The increased volume of migration has implications also for the system of public 
assistance under the Social Security Act. The act permits, and the laws of most 
States provide, residence requirements which exclude from old-age assistance 
and aid to the blind, any person who has not resided in the State for 5 years 
during the 9 years immediately preceding his application for assistance and who 
has not resided in the State continuously for 1 year preceding. A few States 
have adopted more liberal requirements, but no State has entirely waived them. 
As a consequence, persons moving from State to State lose their rights to assist- 
ance and may not be able to reestablish them in their new residences for as much 
as 5 years. This may work a real hardship on people or families who move in 
search of employment and who may later find themselves stranded and in need 
of assistance. The Board believes that these residence requirements are unrea- 
sonably severe and should be liberalized in the Federal law by providing a 
maximum residence requirement of 1 year for old-age assistance and aid to the 
blind, following the precedent already established in the program of aid to 
dependent children. 

Another problem arises in connection with the variation between States in 
the amount of public-assistance grants. In general, the States in which the vol- 
ume of dependency is greatest are also those in which income and taxing capac- 
ity are least. As a consequence, old-age assistance payments, for example, vary 
from nearly $38 in California and $32 in Washington to less than $8 in South 
Carolina and Arkansas, compared to an average for the entire country of more 
than $20. Similar, though less extreme, variations occur in payments for aid 
to dependent children and aid to the blind. There seems to be little justification 
for these inequalities in the treatment of dependency. The Social Security Board 


has recommended a change from the present system of uniform percentage grants 
to a system whereby the percentage of the total cost in each State that would 
be met through a Federal grant, would vary in accordance with the economic 
capacity of the State. Such a change would do much to aid the poorer States 
and to extend more adequate benefits to a larger number of needy people, par- 
ticularly, if continued migration of younger and more productive workers in 
response to defense employment opportunities has the effect of reducing the base 
of tax support for matching grants in the poorer agricultural States. 

At present, there is no provision in the Social Security Act for grants-in-aid 
from the Federal Government for general public assistance. The volume of such 
assistance, however, in the United States is still very great, amounting in 
March 1941 to nearly $30,000.00!), paid to 1,200,000 cases. The variations between 
States in the average payment per case are extreme: From a little over $3 in 
Mississippi and .$0 in North Carolina, Georgia, and Florida, to $37 in New York 
and $34 in Rhode Island, with an average of nearly $25 for the country as a 
whole. These payments are made to families who cannot qtialify for one of 
the federally aided public-assistance categories but who are in need of public 
support. The relocation of population, which is taking place and will take 
place in increasing volume as a result of the defense program, has already left 
many families stranded as a result of their inability to find employment. Fur- 
thermore, after the passing of the emergency, other families will be left without 
support when defense production closes down. This will particularly affect 
the States to which large numbers of migrants have been attracted to employ- 
ment in isolated communities where ordnance and explosives plants had been 
located. In order to forestall undue burdens on these States and unnecessary 
suffering on the part of families left without support, provision should be made 
through the Federal Social Security Act for matching grants to the States to 
assist them in carrying the burden of general public assistance. 

Health security. — At the present there is a justifiable preoccupation with the 
development of the armed forces and with the manufacture of munitions, sup- 
plemented by the commencement of a coordinated program for defense, health, 
and welfare activities, especially for areas near cantonments and for industrial 
areas expanded or developed under the defense program. Along with this emer- 
gency phase, the strengthening of underlying measures for social security must 
go forward. I hope the Congress will give concerted and continued attention to 
the need for a comprehensive program designed to spread more evenly and more 
equitably the economic burden of ill-health, the most important gap in the pres- 
ent framework of social security. Through these next major steps in the protec- 
tion of health and welfare, our Federal Government could complete the basic 
architecture of the defenses it began to build in 1935 for the economic and social 
security of individuals, families, and the Nation. 

We find unhappy confirmation of inadequacies in our health services, reported 
2y 2 years ago by an interdepartmental committee, in the prel minary findings 
of the draft boards that approximately 40 percent of our young men have de- 
fects so serious as to prohibit or limit their participation in selective service 
and military training. 

You, as well as we, are well aware that a pattern for health security has been 
laid out. Last year and this, Congress has had specific bills available for care- 
ful study, bills intended to enact sound programs to meet well-defined needs 
for new hospitals, clinics and sanatoria and for funds to encourage their ef- 
fective use; for strengthened public health, maternal and child health services; 
for more adequate medical services for all the people ; and for protection against 

Some sharp clashes have centered around the proposals for health insurance. 
There are those who say that such proposals lead inevitably to "socialized 
medicine," a vague phrase. "Socialized medicine" is something to which I am 
opposed if that phrase means a system which destroys the personal relationship 
between the patient and his doctor. What we are interested in is the destruc- 
tion of an even more personal relationship — the personal and exclusive relation- 
ship between the patient and his disease. In that we and the doctor have a 
common aim. But this is largely beside the point, because there is no reason 
why a plan cannot be evolved which will preserve the patient's right to choose 
his doctor. Indeed, I believe it is possible to develop a plan which will make 
it possible for a great many patients to exercise that right for the first time. 
The present trouble about free choice of a doctor is that so many people have 
neither a choice nor a doctor. 


Health problems which demand attention call for increased efforts on two 
broad fronts : On the one hand, the provision of adequate facilities for the pre- 
vention, diagnosis, and care of illness where these are now insufficient or lack- 
ing ; and, on the other, means of making it possible for individuals to use such 
services when they are available. We must be able to assure people that they 
will have a self-respecting income and independence when illness interrupts 
their ability to earn — to assure them, in plain words, that they can afford to 
admit they are sick, that they can better afford to stop work than to risk 

Measures for health security are helping to pave the way toward giving 
Americans a more secure footing in life and toward strengthening our national 
security, In addition, I need only mention to a group such as this the crucial 
contribution of other general measures for economic progress, among them fair 
standards for wages and hours, control of child labor, advancement of work- 
men's compensation, the safeguarding of industrial home work, the more ade- 
quate provision of housing, and the beginning of a national program for more 
adequate nutrition. 

Our immediate problem is national security. But no nation can be stronger 
than its people. Our continuing concern is the strengthening and deepening 
of our will to the American way of life, our conviction that democracy is the 
best way and — much of the world notwithstanding — that it is a feasible and 
practical way of life. We must recognize, as Britain has recognized, that the 
morale of the home front is essential. In peace or in war, we cannot afford to 
do less than our utmost to strengthen the place of health security in the "seam- 
less web" of our national life. 

Expansion of social security in Great Britain. — No sooner did the defense 
crisis loom than it was seized upon in some quarters as an argument against 
the further advancement — and even against the maintenance — of social gains. 
Defense has been regarded by some as a substitute for a working democracy at 
home. We were frequently told that the newly won rights of labor would 
have to be curtailed, that expensive frills like social insurance, public assistance, 
education and health services must feel the ax. 

In this period of strain which confronts us now, it is instructive to look at 
countries under far greater pressure across the sea. Has Britain thrown over- 
board her social measures to protect family security? Or her social defenses 
against injury or health, or even loss of income? Not at all. She not only 
kept what she had but also liberalized existing social legislation, and, in addi- 
tion, introduced new provisions to meet the emergency needs created by the 
war. The Personal Injuries Act passed in September 1939 grants benefits to 
civilian defense volunteers and gainfully employed persons who are injured by 
enemy action and to the survivors of persons who die as a result of enemy 
action. Wives, children, and other dependents of mobilized men are eligible 
for allowances. Persons or families who are in distress because of the exigen- 
cies of the war are cared for by the unemployment-assistance boards. Buildings 
may be requisitioned if needed to house those who are rendered homeless by 
bombings. A part of the property damage caused by bombings is refunded by 
the Government. Health, old-age, and survivors insurance rights are main- 
tained for men entering the armed forces or a war occupation. In all these 
measures the Government bears all or a large part of the cost. More important 
from a long-range point of view than these emergency provisions is a significant 
liberalization of old-age insurance — reduction of the retirement age for women 
from 65 to 60 and assumption of responsibility by the National Government for 
supplementation of the old-age insurance benefits on a needs basis. Under 
both the emergency and the peacetime social-security measures, the scale of 
the allowances is being quickly adjusted to offset the rising cost of living. 

That is what Britain has done when Britain was up against the bombs. If 
one looks at Britain solely in terms of defense against air raids, its ability to 
withstand the shock lies in three things: The Royal Air Force, the antiaircraft 
defenses, and the smooth functioning of the health and social services. If one 
looks at Britain in terms of the total war, the three pillars of its defense are : 
the military forces, the industrial production, and the health and social services 
at home. 

As the London Economist put it last August, "We have * * * been com- 
pelled to realize since the outbreak of the war that the community has greater 
obligations to the citizen, and the citizen greater obligations to the community, 
than either has been hitherto prepared to admit." 

Comprehensive social protection. — We have made a good beginning in our 
social-security program but that is not enough. We still do not have any social- 



insurance program covering the risk of ill health. Sickness is one of the ni"st 
important causes of dependency. The method of social insurance can be ap- 
plied to the problem of health just as it already has been applied in the case of 
unemployment, old age, and death. Cash benefits to those persons who are 
unemployed because of sickness should be made a counterpart to the cash benefits 
paid to those persons who are unemployed because of business conditions. 

Our eventual goal should be the establishment of a well-rounded system of 
social insurance to provide at least a minimum security to individuals and their 
families due to unemployment, sickness, disability, old age, and death. In 
addition, we must provide a series of constructive social services to supplement 
the cash aids provided under social insurance. Medical care should be avail- 
able to individuals and their families so that we may build a healthier, happier 
Nation. Such a system of medical care would be instrumental in reducing the 
costs of cash payments for sickness and disability. The work of the public 
employment offices is a logical part of a program of employment security. Un- 
employment insurance provides cash income to the worker when no job is 
available and the employment office helps the worker to find a new job. 

No social-insurance program, no matter how comprehensive, can cover all pos- 
sible contingencies. It is essential, therefore, that our system of public assistance 
be made more adequate to meet the special problems which are bound to arise. 
In particular, there should be special Federal aid to low-income States, more 
nearly adequate aid to dependent children, and Federal grants to the States 
for general assistance to all needy persons. 

Social security and national defense. — It is more essential now than ever before 
that we make progress in social security. In past years we could satisfy our- 
selves with the knowledge that social legislation was a gradual, slowly developing 
process but at the present time when our democratic institutions are under attack 
it is imperative that we quicken the tempo of social progress so that our social 
services may be adequate to meet our increasing need. For social legislation 
is by no means a frill but a vital necessity in a period of national emergency. 
Sound social legislation not only makes democracy worth defending but far 
better able to defend itself, because after all national defense must be carried on 
by human beings whose strength depends upon their moral and physical fiber. 

The social-security program, particularly social insurance, enables the Nation 
to provide its people with a better standard of living — that is, sufficient food, 
clothing, shelter, and other services — which is essential in order that they may 
be able and willing defenders of their country. In other words, we should all 
realize that social security is a sword as well as a shield. Therefore, let us go 
forward quickly and effectively. 

(The following exhibits were submitted by Mr. Altmeyer at the 
request of the committee.) 

[Source: Social Security Board, Bureau of Employment Security. Research and Statistics 

Division, July 12, 1941] 

Exhibit A. — Labor market surveys 

City or metropolitan 




Mobile resurvev 

Sheffield (Muscle Shoals). 


Los Angeles (preliminary) 

San Diego 

San Francisco. 

Date of 

May 1941 
Nov. 1941 

May 1941 
Nov. 1940 

Feb. 1,1941 




Anticipated demand 
(12 months) 

8,500 to 9,500 

700 producing 

11,000 to 13,000 

1,100 to staff plants.. 



38 233 

4,000 by July l'.Ol, 
possibly 8,000 
more by spring 

Labor needed to be 


At least 350. 

6,500 to 8,500 
Up to 550... 

Perhaps 50,000 if 
they can be ob- 


21,400 to 23,400 

Over 3,000 bv Julv 

Expected earnings 
of migrants 

Probably less than 

$25 per week. 
$25 a week up. 
Approximate civil 

service rates at 

Tennessee Valley 


$27 to $50 per week. 

$27 to $45 per week. 

$25 to $50. 

$20 to $45 per week. 


Exhibit A — Labor market surreys — Continued 

City or metropolitan 

Date of 

Anticipated demand 

(12 months) 

Labor needed to be 

Expected earnings 
of migrants 


Denver (preliminary) . 



Bristol . 
Hartford . 

New Britain - 

New London-Groton_ 




Tampa (resurvey) - 

Macon . 



Joliet-Wilmington ' . 

Quad cities- (Davenport - 
Rock Island-Moline- 
East Moline). 


Rockford-Beloit (Wis.).. 



Charles town 

Fort Wayne 




South Bend 


Burlington.., ,. 

May 1941 

Dec. 1940- 

Jan. 1941. 
Dec. 1940. 

Jan. 1941. 


Jan. 1941. 

June 1941 

May 1941 

Nov. 1941. 
April 1941. 

May 1941. 


Mar. 1941 
Feb. 1941 

Jan. 1941. 
Apr. 1941. 

Mar. 1941. 
Jan. 1941.. 





May 1941. 

9,000 bv February 


1,000 to 1,200 by Feb- 35 cents to $1.13 per 
ruary 1942. hour. 


10,000 to 12,000. 

1.400 to 1,000. 
2,000 to 2,300. 

4,500 to 5,000 during 

1,500 to 1,600 


100 workers (800 
Army by July 

2,500.-. .- 

5,200 workers (also 
3,500 seasonal 
workers) . 



4,500 through De- 
cember 1941. 


1,500 to 1,850. 


13,400 by October 

3,000 producing 

workers (1,200 to 

1,500 construction 



15,000 by Jan. 1,1942 

1,275 civilian em- 
ployees by June 

13,000 by March 

Up to 6,000 con- 
struction workers, 
8,000 producing 

11.000 to 12,000. 


300 to 400. 

500 to 600 

1,000 to 1,200- 

Probably approxi- 
mately 500. 

At least 2,000. 

100 workers (800 
Army) . 

800 skilled and semi- 
skilled, 300 civil 




425 to 525 (if they 

can be secured). 
100 to 125 - 

600 by October 1941 

150 to 200 (400 to 500 
skilled construc- 
tion workers). 

At least 3,000- 
7,500 to 9.500. 

Most of the employ- 

2,500 to 3,000 

2,500 construction 
workers up to 
Oct. 1, 1941; about 
2,000 producing 
workers bv mid 

6,000 to 7.000. 

Average over $25 per 

$20 to $25 per week. 
Average 65 cents to 

70 cents per hour. 
$25 to $30 per week. 
$20 to $25 per week 

to start. 
Average $35 or more 

per week. 

45 cents per hour to 
$1.20 per hour. 

$1,080 per year mini- 

Averaging $1,600 an- 
nually $25 to $40 
per week, $100 to 
$130 per month. 

Minimum of $30 per 

Minimum of $25 per 

Probably a mini 
mum of $24 per 

65 cents to $1 per 

Mostly at civil- 
service rates. 

$45 per week. 

$50 per week or over. 

Start at $20 per week. 
About $25 to $28 per 

Civil-service rates. 

$33 to $45 per week. 

Probably about $30 
to $40 per week. 

2,100 workers $33 to 
$42 per week; 600, 
$22 to $26; 800, $150 
per month up. 

1 Being jesurveyed. 

Exhibit A — Labor market surveys — Continued 


City or metropolitan 

Date of 

Anticipated demand 
(12 months) 

Labor needed to be 

Expected earnings 
of migrants 


Portland - - 










Bay City-Midland. 

Flint . 

Jackson County. 




Washtenaw County . 




Kansas City 

St. Louis. 



New Jersey 

Northern New Jersey. 


Jan. 1941. 



Troy. 1 


Feb. 1941. 
Dec. 1940. 

Mar. 1941. 

Apr. 1941. 

Mav, 19, 

May 1941 

Jan. 1941. 
Feb. 1941. 

Dec. 1940. 

June 1941. 
Dec. 1940. 

June mil 
Feb. 1941. 
Dec. 1940 

May 1941. 

Mar. L941 

Jan. 1941.. 

Feb. 1941. 

Mar. 1941 


Jan. -Feb. 

Jan. 1941.. 
May 1941. 

Feb. 1941 . 

Dunkirk June 1911.. 



Jan. 1941. 
Dec. 1940 

Being resurveyei. 

60396— 41— pt. 17- 


About 800 




78,000 through De- 
cember 1942. 

1,135; 6 months de- 

10,700 to 11,200 by 
cember 1941. 

3,000 through De- 
cember 1941. 

1,000; 6 months de- 
140.000 through De- 
cember 1941. 

Less than 3,000 


3,509; 6 months de- 




Nearly 26.000.. _ 

About 200 (Irom 
within the com- 
muting 'irea). 

7,000 to 8.000. 

1,500 to 2.000.. 
Less than 500. 

Probably at least 





Onlv a few. 

2,000 to 3,000. 

Possible 1,000 to 

Perhaps 200 (800 
present employees 
may move into 

12,000 to 14,000 


20,000 to 25,000, July 

1, 1941 through 
1 >ecember 1942. 
39,000 to July 1942... 

500 to 600 through 
December 1941. 

23,500 through De- 
cember 1941. 

104,000 through De- 
cember 1941. 

7,700 by midsummer 

1,000 to l,600through 
December 1941. 

28,000 to 30,000 
throii'-'h Decem- 
ber 1941. 

l,300bj March 1912; ! I 
1,600 seasonal 


At least 2,200 by 
July 1. 1912. 

18,500 | 3,000 skilled, tech- 
nical, and super 


6,000 to 8,000. 

Less than 200. 

10 percent under $30 
per week; 90 per- 
cenl over $30 per 

300 will earn '.ess. 

$20.50 to $45 (without 

$lGper week. 

Averaging $40 a week 

$22 a week. 

$25 to $30 per week. 

Approximately $40. 

$35 to $45. 
$25 to $55. 

$28 to $42. 

$25 to $50. 
$36 to. $42. 
$40 per week. 
About 75 cents per 

65 cents to $1.25 per 

$150 per month. 

Approximately $25 
per week. 

$40 to $45 per week. 

70 to 90 cents per 

$24 and up. 

$25 to $35. 

Average $30 to $35 per 


45 cents per hour and 

65 cents to $1.10 per 

hour and $40 per 

week up. 


Exhibit A — Labor market surveys — Continued 

City or metropolitan 

Date of 

Anticipated demand 
(12 months) 

Labor needed to be 

Expected earnings 
of migrants 

Jamestown (preliminary). 
Massena. __ 


Staten Island. 








Akron (resurvey) 


C leveland 







Allegheny County.. 

Bucks County 

Chester County... 
Delaware County. 


Ellwood City. 

Harrisburg _ 


Montgomery County. 

New Castle 


May 1941. 

Mar. and 

May 1941. 

Dec. 1940 
and Jan. 

Apr. 1941.. 

Jan. 1941.. 

Jan. 1941.. 
Apr. 14. 

Dec. 1940.. 
May 1941. 

Feb. 1941. 

Apr. 1941.. 
Jan. 1941.. 

Feb. 1941. 

Apr. 1941. 
i n f o r- 

Feb. 1941.. 

June 1941 


Apr. 1941. . 

600 to 700 through 
December 1941. 

500 to 800 K _. 

(') — .- 


May 1941. 
Dec. 1940.. 
Nov. 1940 

Mar. 1941. 

May 1941. 

Apr. 1941.. 

Jan. 1941. 

Feb. 1941 

3,000 to 3,700 

1,000; 6 months' de- 

5, 1R0 by December 

5,000 to 6,000 



200skilled; few semi- 



(Depends on policy 
ot Civil Service 


6,000 to July 1942. 

Up to 4,000. 

17,000 through De- 
cember 1941. 

11,400 up to Febru- 
ary 1942. 

9,300 to 11,300; 7,600 
more first half 


At least 4,000 

2,000 to 2,800 skilled 
and semiskilled 
plus 200 tech- 

3,500 up to Febru- 
ary 1942. 

Approximately 6,000 

1,000 to 1,200; 1,300 
to 1,600 first half 

7,500 to 9, 000 


12,000 through De- 
cember 1941; 6,000 
to 8,000 more by- 
summer 1942. 


28,000 through De- 
cember 1941. 





350 by July 1941 

5,500 to 6,500 bv July 

9,000 through De- 
cember 1941. 

2,500 through De- 
cember 1941. 

11,100 through De- 
cember 1941. 

644; 6 months de- 

168,000 through De- 
cember 1941. 

300 to 400- 

Less than 2,000. 

4,000 to 5,000 

1,500 to 1,700 men. 

At least 10,000 to 


180 men by July 1941 
No large influx is 

2,500 to 3,000 



Oversupply of labor. 

70,000 through De- 
cember 1941. 

2 If St. Lawrence Seawav Project materializes 15,000 will probably be needed. 

3 If St. Lawrence Seaway Project materializes 10,000 may be needed to import. 

At least $40 per week 
average $25 to $30. 

62J-S cents per hour 

to $2. 
$25 to $30 per week. 
$40 to $50 per week. 
50 cents to $1.50 per 


40 cents to 60 cents 

per hour. 
Minimum of $35 per 


65 cents to $1.20 per 

$22 to $40 per week. 

$30 to $50 without 

75 cents to $1.10 and 


$20 to $80 per week. 
Rates too low to- 
attract migrants. 

45 cents per hour up. 

$20 to $60 per week. 

62 Vi cents per hour 

About $25 per week 

Average over $140 
per month. 

$32 to $45 per week. 
Civil Service rates. 

probably $26 to $30 
per week to start. 

Exhibit A — Labor market surveys — Continued 


City or metropolitan 

Date of 

Anticipated demand 
(12 months) 

Labor needed to be 

Expected earnings 
of migrants 





Quonset Point . 



Alcoa (preliminary) 




Dallas- Fort Worth 












Point Pleasant-Gall ipolis 






Dec. 1940 

Jan. 1941 
Apr. 1941 

Mar. 1941 

Mar. 1941 

May 1941 

Apr. 1941 

Feb. 1941 

Feb. and 
Mar. 1941 

Dec. 1940 

Jan. 1941. 

May 1941 

Apr. 1941. 
Feb. 1941. 
Apr. 1941. 

600 to 650, probably 
900 more in 1942. 


9,200 through De- 
cember 1941. 

400 in 1941; 200 in 
1942; 400 in 1943 
(civilians only) 

348 by December 

7,000 through June 

8,500 producing 

workers by end of 

6,000 during 1941 

5,000; May 15 to 
Januarv 1942, total 
ot 30,000 through 
December 1942. 

2.S00; April 1941 to 
Julv 1942. 

5,000; May 1941 to 
July 1942. 


600 to 800 bv Aueust 

62,000 to 72,001). 

2,700 between May 
1942 and August 

600 (300 between Oc- 
tober 1941 and 
April L942). 

450 to 600 through 
December 1941. 

May 15, 900 to 1,000 

Dec. 1940. 1,800 bv February 

1942. " 

Apr. 1941.. 10.000 through De- 
cember 1941. 

June 1941.. 1.000 

1,575,415 to 1,607,265. 

most of the 1,500 


700 "skilled"/."' "."."" 

1,700 to 1, 

same as demand. 

probably none... 

1,000 produc ing 

2,500 or more 

17.000 through De- 
cember 1942. 

2,000 April 1941 to 
July 1942. 


(Some new workers 
and commuters 
may move in if 
housing becomes 

40,000 to 50,000. 

$20 per week up to 
$300 per month. 

$30 per week. 

$35 to $40 per week 
or over. 

$1,500 to $2,200 an- 
nually including 
overtime pay. 

$25 to $45 per week. 





Verv little . 

526,230 to 561,705... 

most will receive $150 
per month or over. 

50 cents per hour up 
to $80 per week. 

$20 to $30 per week. 

$40 to $60 per week 
for shipyard work- 

Average more than 
$30 per week. 

7,000 will earn $40; 
33,000 to 43,000 will 
earn $30 to $40. 

$30 to $40 per week. 
Not yet available. 

$28 to $50 per week. 


Exhibit B — Defense Labor Migration in California 


(Research and Statistics, May 2, 1941) 

Workers moving into centers of national-defense activity in California to look 
for jobs have gone primarily, although not exclusively, to four areas : The San 
Francisco Bay area, Los Angeles County, San Diego, and the central coast area 
(Monterey, San Luis Obispo, and Santa Cruz Counties). In-migration became 
significant in each of these areas between June and September 1940; the migra- 
tion of industrial workers is continuing in the bay area, has slackened somewhat 
in Los Angeles, and is temporarily reduced in San Diego. The movement of 
construction workers into both the central coast counties and San Diego has now 
ended and been replaced by an outward flow. The net volume of migration can- 
not be estimated accurately because of duplication in the reporting of workers 
who have looked for work in more than one place. More than 95,000 workers who 
have moved into these areas since August 1940 to look for defense jobs have been 
hired, however ; and the total number of workers who have come into the four 
areas since August 1940 to look for defense work, without any correction for 
possible duplication in reporting, exceeds 168,000. About 50 percent of the out-of- 
town workers looking for jobs are believed to have come from outside the State. 

Virtually all the incoming workers have been white citizens. More than 80 
percent have been men. and relatively few have had families with them at the 
time they looked for work. The age groups under 30 have been most heavily 
represented among the workers coming into Los Angeles, while in the other areas 
most of the workers have been between 25 and 45 years old. 

The proportion of skilled and experienced workers coming into the bay area 
has been greater than elsewhere. Practically all skilled metal-trades workers 
looking for work have found it, and skilled construction workers have been almost 
as successful. Semiskilled workers and those with only short experience have 
not fared so well in the bay area as in Los Angeles and San Diego, where skill 
requirements have been reduced in the face of acute shortages. Very few un- 
skilled laborers have found work in any of these areas — a matter of some conse- 
quence for the agricultural labor supply in other parts of the State, inasmuch as 
many agricultural laborers have tried to get industrial employment. 

In general, workers who have not succeeded in getting work within a few weeks 
have gone elsewhere to look for a job. No estimate can be made at present of 
the number who have been or will be stranded as unemployables. and only two 
offices (Huntington Park and San Diego) report any serious hardships as a result 
of the incoming workers failing to find work quickly. 


The San Francisco Bay area consists of 2 principal cities, San Francisco and 
Oakland, which had a combined population of 930,000 in 1940; and several smaller, 
peripheral communities which contained another 477,000 persons. There were 
about 340,000 workers covered by unemployment insurance in the area in 1939, of 
whom only 13,000 were engaged in the manufacture of iron and steel and their 

National-defense activities in the bay area were insignificant until late in 1940, 
with the exception of a shipbuilding at Mare Island Navy Yard, and there was an 
overflow of skilled metal-trades workers to the Los Angeles aircraft plants 
throughout most of 1910. As many as 6,000 local resident workers, almost all of 
whom were white men, citizens, 35 to 45 years old, with 8 to 10 years' experience 
in machine shops, may have left the area during this period. Present shortages of 
metal-trades workers can be attributed in part to this out-migration. Cantonment 
construction in the coast counties withdrew another 3.500 to 4,000 skilled building- 
trades workers in October and November 1940. The beginnning of large scale 
national-defense work in November and December 1940 halted the outflow of 
skilled workers, but inexperienced juniors are now leaving the area at a rate of 
200 to 300 each month, looking for work as semiskilled workers in Ihe Los Angeles 
aircraft plants. 

The movement of workers into the bay area became significant in the fall of 
1940, although it began as early as 1939. Tts volume increased markedly in 


December 1940 and the peak has not yet been reached. At least 40,000 workers 
have come into the area since August 1940, the majority of them since Jnnuary 
1941, and about 15,000 of them have found jobs. Almost all who have not 
found work within 2 or 3 weeks have moved on. 

(a) Localization of in-migration. — The early movement of workers was into 
peripheral communities and was made up as much of workers moving from 
San Francisco and Oakland to neighboring communities where there were job 
opportunities, as of workers coming into the area from outside. This fact reconciles 
the otherwise anomalous situation of skilled metal-trades and construction workers 
leaving the area to find employment elsewhere at the same time that others 
were coming in to look for work. The influx was first centered on Vallejo, where 
Mare Island Navy Yard was hiring large numbers of metal-trades workers in 1939 
and throughout 1940. Few of the workers who came to search for work were 
successful, inasmuch as the navy yard normally hires from United States civil- 
service lists and requires relatively high qualifications. Some 8,500 new workers 
were added by the navy yard during 1940, most of them already residents of the 
bay area. A small influx was also remarked in South San Francisco, where there 
are a shipyard and a steel fabrication plant. South San Francisco employers like- 
wise hired most of their new workers from local sources. 

San Francisco and the east-bay cities attracted few out-of-town workers 
before November 1940, but, on the contrary, were losing men to Vallejo and 
South San Francisco, and to other centers of defense activity. 

The movement out of these areas ceased about November, however, with 
the increase of employment in machine shops, and a heavy migration of con- 
struction and metal trades workers into Oakland, Berkeley, and Richmond 
began when newspapers began to publish accounts of large contracts awarded 
for shipbuilding and for shipyard, naval, and military construction. The city 
of San Francisco itself reports only a small influx which has dropped sharply 
since February 1941, probably because shipyards in the city will not expand 
their working forces for several months while east bay shipyards are already 
hiring men. 

(6) Personal characteristics of incoming workers. — Almost all of the out-of- 
town workers looking for work in the bay area have been men, and most of them 
between 25 and 45 years old (in contrast to the heavy inflow of inexperienced 
juniors to Los Angeles and San Diego). As many as 65 percent are believed 
to be married, but only 40 to 50 percent have had their families with them at 
the time they are looking for work. Several of the employment offices, how- 
ever, note a sharp increase in the number of claims filed for unemployment 
insurance by women who have moved into the area with their husbands ; and 
Vallejo estimates that 75 percent of the new workers have brought families, 
a fact which may be due to the large proportion of workers who, being hired 
from civil-service lists, are certain of employment before moving. The workers 
are preponderantly citizens and belong to the white race. 

(c) Occupational characteristics of incoming workers. — Not more than 15 
percent of the total can be called skilled workers. Almost all of these have 
found work and an unlimited number of skilled metal trades workers are still 
needed. Metal trades unions with bay area jurisdictions accepted more than 
1,000 new members on traveling cards between November 1, 1940, and January 
31, 1941, 10 percent of whom were from out of State, and virtually all have 
found work. Building trades locals accepted another 1,000 traveling cards 
during the same period, although it does not seem likely that as many as 
50 percent of the skilled workers who have moved to the bay area were construc- 
tion workers. 

Estimates of the proportion of semiskilled workers range from 25 to 35 per- 
cent of the total of workers recently come to the bay. Most of these men are 
"handy men," with intermittent experience in various metal and automotive 
trades, frequently as helpers. Many are rusty and need to brush up on their 
skills; for instance, Richmond reports that 95 percent of tho applicants for 
jobs as welders at the Todd-California shipyard need retraining. About 50 
percent of the semiskilled workers have found jobs, frequently at work which 
requires less skill than they claim to have. Many of them will be upgraded 
to jobs of medium skill as the plants expand, however. 

The unskilled workers are mainly harvest hands, many of whom have been 
following California crops in recent years, and several employment offices com- 
ment on the coincidence of in-migration and the termination of work on specific 
crops. These workers base their hopes of industrial work on reports of wide- 
spread labor shortages and the Pacific coast tradition that during the last war 


any able-bodied man could find shipyard employment at high wages. Fewer than 
20 percent of this group have found local employment and the rest have returned 
home or drifted elsewhere. 

(d) Sources of incoming workers. — About 60 to 65 percent of the workers are 
California residents : Building-trades and machine-shop workers from the in- 
terior cities, mechanics from the small north-coast towns, and agricultural work- 
ers. Between 35 and 40 percent are from out of State : Utah and Montana, Texas, 
and the drought-area States along the one-hundredth meridian. Workers from 
Utah seem more commonly to have had some industrial background and a num- 
ber of airfield workers from Texas are reported. A good number of construction 
workers have come into the area from western construction jobs. Up to the 
present time, however, the out-of-State workers have not generally had long 
industrial experience. 

(e) Incentives to in-migration. — There has been very little organized recruiting 
apart from the work of the United States Civil Service Commission and em- 
ployment-office clearance orders. The most important causes of the inflow of 
workers to date appear to be newspaper reports of large shipbuilding and con- 
struction contracts, augmented by advertising by private trade schools. The 
influx of workers seeking shipyard employment has clearly grown out of news- 
paper accounts of shipyard activities and has generally been haphazard and 
premature and many thousands have come to look for work without careful con- 
sideration of their qualifications. For instance, 4,000 workers sought production 
jobs in Richmond in the weeks following newspaper accounts of a contract for 
31 ships given to a shipyard which had not yet been built. Gate hiring which 
does not plan a recruiting program and depends upon a queue for its success ia 
not uncommon in the bay area, and usually results in those who have found 
work writing to their friends and relatives suggesting that they also seek work 
at a plant without careful regard to their ability. 

(f) Migrants not securing employment in the area. — Of the 40,000 workers 
who have come into the bay area, about 25,000 have failed to find work. Unem- 
ployment-insurance records indicate that most out-of-town claims are of short 
duration and the employment offices report that most of the incoming workers 
either find jobs in 2 or 3 weeks or move on. It is believed that most of the 
incoming workers have sufficient resources to support themselves for at least 
a few weeks and their problem is more likely to be finding adequate housing than 
finding sustenance. Relatively few workers seem to have been stranded, although 
the eligibility rules of relief agencies are such that relief loads no longer indicate 
the number of nonresident unemployed and exact information cannot be secured. 


Los Angeles County had 2,786,000 residents in 1940, of whom 1,504,000 lived 
in the city of Los Angeles and another 605,000 in the 11 adjoining cities. An 
average of 590,000 workers were covered by unemployment insurance in the 
county during 1939. Employment in the manufacture of aircraft and aircraft 
parts rose during the year from 13,300 workers in January to 27,700 in Decem- 
ber. Employment in the manufacture of iron and steel and their products 
averaged 15,700 workers. 

Workers have been moving into the county in a steady stream since 1936, 
notably for aircraft and related employment, but the volume of in-migration 
increased sharply with the inception of national-defense activities in the sum- 
mer of 1940. A total of 83,000 to 85,000 workers are believed to have come into 
the county since August 1940, of whom about 53,500 have found work and 

The high proportion finding work is attributed to the pressure of employer 
hiring schedules, which have steadily forced down the requirements for skill 
and experience ; to the fact that the bulk of aircraft assembly work requires 
only limited skill ; and to the large proportion who have come in as a result 
of labor scouting or recruiting. The others have left to look elsewhere for 
jobs after staying 2 or 3 weeks. The volume of in-migration has been dropping 
since February 1941, largely as a result of increasing employment opportunities 
in other parts of the country, but this may be only temporary. There is good 
reason to anticipate a resurgence of in-migration in the summer of 1941, after 
the closing of the school year. 

The expansion of national-defense production in Los Angeles County ahead 
of the rest of the country forestalled any out-migration of skilled metal-trades 
workers and enabled local employers to secure several thousands of skilled 


workers from the Sau Francisco Bay area. Unemployment in the building 
trades continued, however, and 8,000 to 10,000 building-trades workers (many 
of them carpenters from the motion-picture industry) left the county in Sep- 
tember and October, going to the central coast counties, and to Riverside and 
San Diego, where Los Angeles contractors were building cantonments. These 
workers are now returning to Los Angeles. Several hundred shipyard workers 
left the San Pedro area for navy yards at Pearl Harbor, Mare Island, and Brem- 
erton, but the prospects of local shipyard employment halted this outflow in 

(a) Localization of the in-migration. — The earliest, largest, and most widely 
publicized increase in employment has been in aircraft manufacturing. About 
40,000 workers have come into Los Angeles County to look for jobs in this indus- 
try since August 1940, of whom more than 30,000 have found work or admission 
to preemployment training classes. The industry is pretty well concentrated 
in a few plants, located in relatively small cities on the periphery of Los Angeles : 
Lockheed and Vega in Burbank ; Douglas in Santa Monica; Vultee in Downey; 
North American in Inglewood ; and Northrup in Hawthorne. In addition to 
those seeking aircraft employment, about 30,000 out-of-town workers have come 
into Los Angeles seeking work in the central manufacturing district. These 
people were looking for general factory work, largely in the metal trades. About 
17,500 have found work of some kind, while about 12,500 moved on to other 

Another 4,000 have come into San Pedro for shipyard and construction work, 
of whom 2,500 have found jobs. Finally, 9,000 have come into the other com- 
munities in the county, of whom about 4,000 have found work. 

(ft) Personal characteristics of incoming workers. — Approximately 80 per- 
cent of the incoming workers are men. At least 50 percent are less than 30 
years old. The ages over 45 are also heavily represented ; the older workers 
are generally looking for work iu shipyards and heavy metal-working shops. 
Not more than 33,000 of the workers who have come into the area since August 
are believed to be married ; and only 12,000 to 15,000 have had their families 
with them at the time they looked for work. 

Virtually all have been white citizens, but a considerable number have come 
without birth certificates or naturalization papers, and this bus often delayed 
their going to work by 4 to 6 weeks. The total number of aliens who have 
come into the county since August 1940 does not exceed 3,000, of whom 1,500 
have been Mexican. Between 1,000 and 1,500 Negroes have come into the area 
in the last 9 months, most of them from cities in the North Central States. 
The movement of Negroes into Los Angeles is not connected with national- 
defense activities, but has been taking place for several years and is now 
dwindling rapidly— probably because of the limited opportunities for work. 
Both aliens and Negroes have difficulty getting jobs because of strict citizenship 
and racial requirements enforced generally in the industries doing defense 

(c) Occupational characteristics of incoming workers. — Some 11,000 skilled 
and experienced metal-trades workers have come into the county since August 
1940. Most of them were recruited by local plants and all have found work. 
In addition, some 6,000 qualified workers with long experience in manufacturing 
have sought and found jobs. The influx of skilled workers is tapering off 
rapidly, because of increasing job opportunities in other communities. 

Another 44,000 or 45,000 workers have had limited industrial or mechanical 
experience, although few of these can properly be called semiskilled. Some 
65 percent of the preemployment trainees have been in this class, including 
most of those recruited by private schools. Many in this group have bad 
experience which is of no significance locally — such as farm machinery main- 
tenance work. Some have had intermittent experience in industry, having 
come from areas where agriculture, mining, and manufacturing are followed 
seasonally. Others have been garage mechanics in small towns. A notable 
group are the 1,000 or more oil-field workers who have homes in Long Beach 
but who have been working in Kern County for the past few years. Despite 
the general lack of extensive experience, about 24,500 of this group of workers 
have found jobs in aircraft plants, in the metal trades, and in general manu- 
facturing where they often replace inore experienced workers who have quit to 
take jobs in the aircraft plants. 

About 7,000 workers with clerical experience have come into the county 
since August 1940, looking for clerical and mechanical work in aircraft plants. 
Most of them have found jobs, although not always in aircraft. 


Finally, there have been 15,000 or 16,000 farm hands and workers without 
previous experience. No more than 5,000 of these seem to have found work — 
mostly men under 25 — and the remainder have left. 

(d) Origin of incoming workers. — The records of Los Angeles employment 
offices indicate that about 28,000 workers have come into the area since August 
1940 from other parts of California to look for jobs in national-defense in- 
dustries. Several thousand have been skilled metal trades workers from the 
San Francisco Bay area, and another thousand have been workers in machine 
shops, foundries, and garages in the cities of central and southern California. 
The rest have been semiskilled workers and trainees or harvest hands who 
have tried to leave migratory agricultural work. The volume of California 
agricultural workers available in the area is becoming smaller with the return 
of agricultural activity. 

The origin of out-of-State workers who have come into the county since 
August 1940 is indicated in table 1, on the following page. A large proportion 
of the out-of-State workers are from small towns in the North Central States, 
where both aircraft plants and private training schools have been scouting 
for about 5 years. 

These workers from out-of-State are generally under 30 years old, often 
have good but limited mechanical experience, and are attracted mainly to the 
aircraft plants. Many have taken preemployment training courses before com- 
ing to Los Angeles. A noteworthy, although small, group are skilled machinists 
recruited by manufacturers from the Detroit area. Workers from the eastern 
seaboard (New England and Middle Atlantic States) are usually skilled and 
often have been recruited, either by the local employers directly or through 
Nation-wide employment service clearance. Workers from the South Central 
States generally have little industrial background but seek shipyard and heavy 
construction work and many seem able to find work. Some offices report a 
slackening of immigration from this area, particularly from Texas and Okla- 

Table 1. — Orig'in of out-of-State workers coming into Los Angeles County for 
employment in national-defense industries, August 19^0 to April 19Jfl 

Area and approximate number of workers coming to Los Angeles: 

North Central States 24, 500 

Rocky Mountain States 8, 500 

Atlantic Seaboard States 8, 000 

South Central States 7, 500 

Pacific Coast States 6, 500 

Total 55,000 

(e) Incentives to in-migration. — A large proportion of the incoming workers 
have been influenced by rumors and newspaper and magazine accounts of the 
expansion of national-defense activity in Los Angeles County and the consequent 
opportunities for employment. This is particularly the case with unskilled agri- 
cultural workers and workers from the South Central States. 

A major stimulus to in-migration has been the intensive recruiting campaigns 
of local aircraft plants and training schools. The number of workers who have 
come into the area as an indirect result of these campaigns is probably larger 
than the number brought directly. Recruiting has taken several forms : Adver- 
tising and recruiting by major aircraft plants: advertising without specific 
recruiting: clearance orders for workers; employees writing to friends and 
relatives urging them to come to Los Angeles, usually at the suggestion of their 
employers; and advertising and recruiting by private training schools. The 
aircraft plants have actively recruited skilled workers in the area around Chi- 
cago and on the eastern seaboard. The personnel officer usually makes use of 
public employment-office facilities for interviewing applicants secured through a 
brief advertising campaign, tests the more likely applicants, and moves on. 
Semiskilled workers and training students have generally been recruited from 
the smaller towns in the North Central States, where wages are not as high 
as in Los Angeles and where the largest proportion of men are found who meet 
the specifications of aircraft plants for semiskilled workers. Recruiting through 
employee letter writing has the double effect of getting new workers and reducing 
the number of quits due to the workers' desire to return to their families — a 
very important consideration. 

(/) Migrants not securing employment in the area. — Of the 85,000 workers who 
have come into the area, about 30,000 have not found work. In addition, a 


considerable number have met delays because of difficulties in proving their 
citizenship. Most of the incoming workers seem able to support themselves for 
a short time, although Huntington Park reports some hardship among the appli- 
cants. The majority of those who have failed to get work within 2 or 3 weeks 
have gone elsewhere, but an increasing unwillingness to leave is reported. 


San Diego County had 289,000 residents in 1940, of whom 203,000 were in the 
city of San Diego. An average of 33,000 workers in the county were covered by 
unemployment insurance during 1939, of whom only 7,600 were engaged in manu- 
facturing. Employment in aircraft plants averaged 2,550 workers during the 
year, but increased steadily throughout the year to reach 4.400 workers in 
December. Iii addition to these employees of private industry, there were about 
32,000 workers employed by Army, Navy, and Marine posts in the county. 

Large numbers of people have been coming into San Diego for many years, 
but the inception of national-defense activities in the summer of 1940 both in- 
creased the volume of in-migration and altered its character radically. The 
local aircraft plants doubled their accession rate in June 1940, having added 
1,000 or more workers every subsequent month until March, and SO percent of 
the new workers have come from outside the county. A total of 12,000 workers 
bave come into the comity since August 1!»40 to look for aircraft jobs, and about 
8,000 have been hired. Another 1,000, not yet at work, have gone into pre- 
employment training classes: 500 are still enrolled, and 500 have finished training 
but as yet have not secured aircraft jobs. The peak of this in-migration has 
probably not yet been reached, but the curtailed hiring schedules of local air- 
craft plants and the increasing body of unplaced trainees are already reflected 
in a reduced now of workers into the county. If previously announced hiring 
schedules are resumed, the movement should regain its volume and continue 
through the early part of 1942. 

Construction work on military establishments, defense housing, and new plant 
facilities has drawn another 6.0U0 workers into the area since August W40, of 
whom about 4,000 found work. This influx passed its peak in March and has 
now definitely ended; construction workers are already leaving the area. Some 
new construction is being started, but it does not require as many workers as 
are now being released by completed projects. 

Between 4,000 and 5,000 white-collar workers have been attracted to San 
Diego by the prospects of defense employment, and there is also a group of women 
workeis who have come in with their husbands. 

(a) Personal characteristics of incoming workers. — The bulk of incoming 
workers are between 30 and 40 years old, although there is a heavy representa- 
tion of juniors. About 80 percent are men. While 50 percent of the men are 
believed to be married, about half (3,000) have left their families at home and 
come to San Diego alone. Virtually all the men looking for aircraft jobs are 
white citizens, and so are most of the construction workers. More than 500 
Negro construction workers have come into the county, however, apparently from 
the North Central States. 

(b) Occupational characteristics of incoming workers. — Between 15 and 20 
percent of the incoming workers looking for aircraft work have been professional 
or skilled machine-shop workers. Most of these have been secured on the 
eastern seaboard through clearance orders or direct recruiting by aircraft plants, 
and almost all have been hired. The larger part of those seeking aircraft work, 
however are semiskilled workers with little experience, men without any previous 
employment record, and white-collar workers interested in mechanical work. 
About half of the wives who have come into the area with their husbands have 
experience as clerks or as factory hands on the eastern seaboard. 

[ncoming construction workers have been about evenly divided between 
journeymen in the building trades and laborers. 

(c) Sources of incoming workers. — only about 20 percent of the aircraft work- 
ers coming into San Diego are from California, but almost all the construction 
workers have come from Los Angeles, San Bernardino, and Riverside Counties. 
About 1,500 aircraft workers have come from cities on the eastern seaboard, 
the remainder from small towns in the North Central States. About 500 Negro 
construction workers have come from cities in the North Central States. 

(d) Incentives to m-rmgration. — Rumors and newspaper accounts of defense 
activities bave undoubtedly played an important part in sending workers into 
San Diego, particularly for construction work, but the relative inaccessibility 
of the city places it at a disadvantage in competing with Los Angeles for freely 


migrating workers. Much heavier reliance has been placed on recruiting, and 
the two major aircraft plants have maintained personnel officers in Chicago and 
New York for the past several months. Both skilled metal-trades workers and 
trainees have been extensively recruited, although not always hired, by these 
representatives. Arrangements have also been made to recruit workers through 
private preemployment training schools located in the North Central States. 

(e) Migrants not finding work. — The local shortage of housing has forced 
unsuccessful job seekers to move out of the city almost immediately. The pres- 
ence of out-of-town trainees in preemployment courses without adequate means 
of subsistence, has raised serious local problems. There are some 500 out-of- 
town trainees who have completed their training but have not found aircraft 
work some of whom have been out of school for 45 days. Temporary or part- 
time work has been found to keep them in the area until they are needed for 
aircraft work. 

The influx of workers has raised more serious social problems in San Diego 
than in either Los Angeles or the San Francisco Bay area, but the rapid outflow 
of unsuccessful job seekers has eased the burden somewhat. 


The central coast counties of Monterey, San Luis Obispo, and Santa Cruz had 
a total population of 151,000 in 1940. Between 15,000 and 16,000 workers came 
into these counties between September 1940 and February 1941 looking for con- 
struction jobs in the Army cantonment projects at Camp McQuaide, the Fort 
Ord Reservation, Camp Roberts, and Camp San Luis Obispo. Approximately 
10,000 found work. Since the different projects did not begin simultaneously, 
the men were often able to move from one project to another, and the total 
number who found work did not greatly exceed the peak out-of-town employ- 
ment at Camps Robert and San Luis Obispo in March. The influx tapered off 
in late February and ended about March 15. Nearly 7,000 workers have left 
the counties since that time, usually within 48 hours of being paid off. They 
have gone on to other construction jobs (some in New Mexico cantonment work), 
but most have returned home. 

Nearly all the construction workers were citizens, white and middle-aged. 
Not more than 15 percent had families with them. About 10,000 were experi- 
enced construction workers generally recruited through trades unions from Los 
Angeles (4,500 to 5,000), the San Francisco Bay area (3,500 to 4,000), and the 
San Joaquin Valley. The remainder were mostly agricultural migrants attracted 
by rumor and newspaper reports, very few of whom found work. 

Another group, now coming into the counties, hopes to stay permanently in 
the small towns near the Army posts — service workers, clerks, etc. These job 
seekers may total 6,000 workers before the influx ends. 

Exhibit C — Migration in the Seattle-Tacoma-Bremerton Area 



The normal flow of migratory workers between the Seattle-Tacoma area and 
other points on the Pacific coast was accentuated during 1939 and the early part 
of 1940 by a dribble of workers attracted by the possibility of increased employ- 
ment opportunities. Prior to September 1910 this did not materially alter normal 
migratory trends. Beginning in September the volume of in-migration rose 
sharply as a result of publicity given to defense activities. It is estimated that 
the employable population of the area has increased approximately 34,000 while 
an additional 6,000 are members of new workers families. This includes workers 
added at the Bremerton Navy Yard but excludes additions to the military and 
naval forces (35,000 to 40,000*). Another 10,000 job seekers have come into the 
area but by this time either have returned home or are seeking work in other 
areas. The net increase of 34,000 probably is distributed roughly as follows : 

Bremerton 10,000 

Seattle (including 2,5C0 new commuters to Bremerton) 19,000 

Tacoma (including 500 commuters to Bremerton) 5, 000 


In Tacoma in-migration was greatest sometime in December, at which time 
construction work in the Fort Lewis-Camp Murray urea was at its peak. At 
least 4,000 migrants in addition to those listed above were in Tacoma at that time. 
Many of these have returned home; others are now in Bremerton or Seattle. 
While 400 to 500 workers a month are still entering Tacoma, the pressure has been 
reduced materially since the first of the year. The heaviest months in Seattle 
were December and January, although there is still a net influx of about 1,000 
per month. Bremerton, influenced principally by the importation of workers 
for the n'avy yard, has a still increasing volume of in-migration. Considering 
the entire area as a unit, it is anticipated that migration will slacken as current 
construction is completed but that a new influx may be anticipated later in the 
year as production picks up in aircraft and shipbuilding. 

Experience in this area has been that the migration of unskilled job seekera 
is extraordinarily responsive to publicity. Skilled workeis having some assur 
ance of employment in their own communities are less likely to move in response 
to rumors. In September and October several stories were released concerning 
contracts to be let in Seattle and Tacoma and projected developments in air- 
craft and shipbuilding. These articles, circulated by national press services and 
indicating a need for thousands of workers, unleashed an avalanche of undirected 
migration. Labor scouting in the Midwest has been noted in a few instances but 
has not been a major factor. Rumor and information sent by local residents to 
relatives in other areas have encouraged in-migration. 


Of the approximately 34,0(30 net migration to the area, about 7,000 are workers 
added to the Bremerton Navy Yard. A majority of these are journeyman 
mechanics selected through civil-service applications. Probably 1,000 have 
been drawn from this State, the remainder from all parts of the country, with a 
higher proportion from the west coast. Another 8,000 migrants are members 
of unions, principally in the construction crafts, who have transferred their mem- 
berships into local unions. Estimates by union officers indicate transfer of 
about 4,000 into Tacoma locals, 4,000 into Seattle, and 3,000 into Bremerton, a 
total of 11,000, of which two-thirds came from other areas of this State, the 
remainder principally from Oregon, California, and Montana. About 3,000 of 
this number already have left the Tacoma area with the completion of construc- 
tion at Fort Lewis and Camp Murray. Some of these are included in the figures 
for Seattle and Bremerton. 

This group of workers have come primarily in response to known job openings 
and have found work. With the exception of certain shipyard workers standing 
by in Tacoma pending resumption of activities and about 200 carpenters unem- 
ployed in Tacoma, virtually all members of skilled crafts are at work. This 
includes carpenters, electrical workers, plumbers, machinists, boilermakers, steam- 
titters, and sheet-metal workers. Unskilled organizations such as building and 
common laborers report some unemployment. 


There remain an estimated 19,000 migrants (net) who have come primarily 
in response to rumor rather than specific job openings. (This number has been 
variously estimated up to 30,000, but most estimates do not take into account 
the considerable number who have not remained.) One-fourth of these are from 
other areas of this State, particularly the Eastside Spokane, Wenatehee, and 
Yakima. The remainder, upwards of 14,000, come from other States. Certain 
characteristics of this group have been deduced from the examination of recent 
applications for work at the Seattle and Tacoma offices of the Washington State 
Employment Service. Figures which follow are taken from samples of 464 
Seattle and 332 Tacoma applicants coining from other States within the past year. 1 

1 These were groups of self-registrations from which had already been removed some 
skilled workers to be called for interview, and some not skilled who had returned for an 



A third group of 653 migrants are a sample of those served by certain welfare 
agencies 2 during the latter half of 1940 : 

Percentage of all out-of-State migrants 

State of origin 



by Seat- 
tle agen- 

Oregon . _. 







Idaho.._ _ 


Montana ... 


Midwest ' 


Other West and Southwest 2 . . ... 


All other 




100. Q, 


1 Midwest: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, 
Ohio, South Dakota and Wisconsin. 

2 Other West and .Southwest: Arizona, Colorado, Nevada, [New Mexico, Oklahoma, Texas, Utah and 

In all three groups the State furnishing more migrants than any other was 
Montana, followed by Oregon or California, then Minnesota and North Dakota. 
This indicates a decided shift from the North-South migration which is charac- 
teristic of the Pacific coast in normal times. Furthermore, some of those 
indicated as originating in Oregon or California had previously come from 
the Midwest. A comparison of automobile registrations transferred between 
Washington and other States during the first 3 months of 1940 and the first 
8 months of 1941 further reflects a change in the direction of migration, with 
the greatest gains from Montana and the midwestern farm States. 

The new migrants have been loosely referred to as a Dust Bowl group. 
However, of the 332 applications surveyed in the Tacoma office, only 55, or 
17 percent, listed experience primarily agricultural : 52 percent claim mechanical 
or construction experience ; the remaining 31 percent either had some other 
type of experience (service occupations) or none at all. These figures cannot 
be accepted at face value since applicants naturally emphasize the experience 
most likely to improve their placement possibilities. While 1 in 6 report 
most of their experience as agricultural, the majority come from agricultural 
areas. Many apparently had relinquished poorly paying jobs to come West ; 
others came because of unsteady work or lack of work. In contrast to the 
normal migration many of these had not been outside their home State before. 
The study made by welfare agencies found only 40 of 202 had lived less than 
1 year in the last place of residence. However, this information was secured 
in less than one-fourth of the cases. 


Employment service records indicate that virtually all the migrant job 
seekers are men and that the number of aliens and Negroes is insignificant. Of 
the groups sampled, 55.1 percent in the Seattle office and 56.8 percent in the 
Tacoma office were married. (See following section on family migration.) Of 
the remainder in the Tacoma group, 35.6 percent weer single and 7.S percent 
widowed, divorced, or separated. Predominantly the migrant group is young, 
the median age of married men studied being 37 in both cities while the median 
age of all others in Seattle was 31 and of single men only in Tacoma, 28. The 
group served by Seattle welfare agencies had a median age of 38. This is not 
inconsistent since those served were principally the destitute while employment 
service applicants are a more representative group. The complete age distri- 

* From a study by a subcommittee of the State migrancy committee of the Washington 
State Conference of Social Work. Agencies submitting the bulk of the returns were the 
Compass Shiloah Mission. Millionaire's Club, Volunteers of America, Travelers' Aid, St. 
Vincent De Paul, and Goodwill Industries. 



bution of the two groups sampled from employment service applications is as 
follows : 




Single or 




Total . . 






Under 20 











20 to 24 


















25 to 29 


30 to 34 


35 to 39 - --- 


40 to 44 


45 to 49 - 


50 to 54 


55 to 59 

60 to 64 - 








Although approximately 55 percent of the group of interstate migrants making 
application with the employment service are married and a comparable proportion 
of others entering the area may be assumed to have families, to date the volume of 
family migration has been strictly limited by lack of housing facilities. Charac- 
teristically, the pattern is that the head of the family and possibly the oldest son 
will come ahead with the intention of sending for the rest. That families have 
not been following to Seattle and Tacoma in numbers comparable with the influx 
of workers is attested by records of school enrollment. 3 Enrollment in the Seattle 
public schools as of the end of March for recent years has been as follows : 4 


Change from 





57, 605 
56, 509 
45, 699 
53, 034 
52, 217 




1939 .- 






Enrollment figures for the Tacoma public schools as of June of recent years were 
as follows : 

ment ' 

Change fro m 
previous year 



20, 570 
20, 297 
19, 434 




1938 -.- 

— 1.3 



1940 . - 


1 For records of the Takoma public schools. 

Enrollment in Takoma schools includes all registeiing during the term; membersl ip Is net after deduct- 
ing those leaving school. 

:t Figures quoted cover high school, junior high school, and elementary ; night school not 

* From records of the Seattle public schools. 



These are supplemented by statistics of February membership for the past 
2 years : 


Change from 
previous year 


i From records of the Tacoma public schools. 

Enrollment in Tacoma schools includes all registering during the term; membership is net after deducting 
those leaving school. 

Modification of the rate of decrease in both cities justifies an assumption of 
inmigration not to exceed 850 children in Seattle and 250 in Tacoma. This influx 
has come subsequent to last September, being first noticeable in February when 
the new term started. It is of interest that in Seattle not even the schools nearest 
to centers of defense activity have been noticeably influenced. 

Outside the two cities the family increase has been more marked, in some cases 
creating a serious school problem. School districts just south of Seattle grew 
about 15 percent from June 1939 to June 1940, and an additional 8 percent (about 
POO students) from June to November 1940. This reflected employment at the 
Boeing Aircraft Co. and was due in part to city residents moving closer to work. 
The area south of Tacoma has been affected both by families of Army men and of 
defense workers. Five schools in the area (Clover Park High School, Park Lodge 
No. 119, Lakeview No. 2, Lake City No. 314, and Du Pont No. 7) reported a total 
enrollment of 901 in June 1939, 1.087 in June 1940, and 1,299 in November 1940. 5 

In the Bremerton school district enrollment has grown as follows : 8 

Total en- 

From homes 
where head 
of family en- 
gaged in de- 
fense work 



3, 324 



2, 229 

Nov. 1, 1940 


Apr 15 1941 

Districts adjacent to Bremerton (South Kitsap High School at Port Orchard, 
Silverdale High School, Port Orchard No. 10, Pleasant Valley No. 29, Silverdale 
No. 24, and Chico No. 23 ) reported these figures : * 




Nov. 1, 1940 

Total en- 


From homes 
where head 
of family en- 
gaged in de- 
fense work 


1, 151 

Note that here again the school population has shown a greater proportionate 
increase outside the city. 

Statistics of the State department of education show that transfers into the 
elementary, junior high, and high schools of Pierce, Kitsap, and King Counties 

5 From The Problems of School Facilities in Areas Affected by Expansion of National 
Defense Activities in the State of Washington, a study by the emergency committee on 
school housing; in national-defense areas in Y\ ashington. 

• Figures provided by Tillman Peterson, superintendent, Bremerton publis schools. 

7 From The Problem's of School Facilities in Areas Affected by Expansion of National 
Defense Activities in the State of Washington, a study by the emergency committee on 
school housing in national-defense areas in Washington. 



(excluding Seattle), and Port Townsend (Fort Worden, Fort Flagler), totaled 
3,404 when school started last fall. Of that number 2,248 were transfers within 
the State, 1,156 from outside the State. Most of the local transfers can be 
discounted in a consideration of defense migration. Interpolating from the 
figures in the preceding paragraphs, it appears that a reasonable estimate of 
school children entering the Seattle-Tacoma-Bremerton area as a result of de- 
fense activity from June 1940 to April 1941 is about 2,900, distributed roughly 
as follows : 

Seattle 850 

Vicinity of Seattle 400 

Tacoma 250 

Vicinity of Tacoma 450 

Bremerton 500 

Vicinity of Bremerton 450 

Total 2,900 

This covers an area into which have poured an estimated 34,000 defense 
workers and job seekers and an addition of about the same number to the 
Military Establishment. 


Lack of family migration may be explained primarily by inadequate housing 
facilities. Figures released by the Seattle Real Estate Board show the following 
percentage of residential vacancies in February of recent years : 

of vacancies 

of vacancies 

2. 98 





1935 2. 98 1939 

1936 2.11 1940. 

1937 1.71 1941 


Mr. Ellis Ash, of the Seattle Housing Authority, estimates on the basis of a 
sample study made by the Work Projects Administration that in terms of 
dwelling units the Seattle situation was as follows in February 1941 : 




A. Not for rent (for sale or owner occupancy)... 

B. For rent — major repairs or unfit for use 

C. For rent — good condition, and minor repairs 

(1) Lack some standard facilities 

(2) Have all standard facilities 




This is a total of only 2,404 dwellings of all types and conditions for rent, of 
which at least 500 are one-room and 1,000 are two rooms in size, according to 
Mr. Ash. 

In the city of Tacoma the housing situation is not as serious, but South 
Tacoma and vicinity are extremely crowded. In Bremerton it is virtually im- 
possible to rent a house in livable condition. The greater effect of migration on 
rural schools suggests that families in many cases are forced to settle outside 
the cities because of housing. 

The group of 232 out-of-State migrants whose applications were examined in 
the Tacoma office had an average of 2.35 dependents for married men and 0.42 
for single. 

Number of 






Marital status 





Number of 

Marital status 






Not indicated 










2. 35 







This agrees closely with applications of workers seeking housing facilities at 
the West Park project in Bremerton. These men have an average of 1.3 children 
(2.3 dependents including wife), of which 0.76 are of school age. It is there- 
fore expected that to the extent that housing becomes available (850 units under 
construction in Bremerton) the schools will be further affected. 


Housing vacancies present an incomplete picture of migration for two reasons : 
First, it is clear that the amount of doubling up in available residences has in- 
creased, and second, the great majority of migrants have come singly and are 
not reflected in housing surveys. There has been a strong tendency toward the 
conversion of transient facilities into permanent residence. Auto camps are full ; 
trailer villages have mushroomed in South Seattle and Bremerton ; the cheaper 
hotels in Seattle and Bremerton are overloaded. In Tacoma the pressure on 
accommodations for single men has slackened since the first of the year. 

There is no reliable information as to the number of men utilizing various 
facilities. The group of applications surveyed in the Tacoma office showed 18 
percent living with relatives or friends and 26 percent boarding. Six percent 
stated that they owned a home and 42 percent that they rented; however, the 
application form was not originally designed to secure information about migrants 
and it is not possible to state how many of these were referring to ownership 
or rental in the city from which they had come nor how many who said they 
were renting actually were renting a room. The remaining 8 percent indicated 
some other living arrangement or none at all in the case of some just arriving. 


It has been stated that of an estimated net in-migraiton of 34,000 workers 
and job seekers some 7,000 were imported for employment at the Bremerton 
Navy Yard and another 8,000 were transfers into local unions who came in 
response to definite needs and found employment. No positive statement can be 
made as to the proportion of the remaining 19,000 finding work. The following 
facts are significant : 

(1) More than 90 percent of the transients applying at the Seattle office 
of the State employment service and about 75 percent of those applying at the 
Tacoma office fail to report back at the end of 30 days. 

(2) The survey previously mentioned of migrants served by certain welfare 
agencies in Seattle disclosed the following lengths of residence in the city 
at the time the service was rendered : 

Under 15 days 602 

15 to 30 days 72 

1 to 6 months 135 

7 months to 1 year 31 

1 to 2 years 8 

Not reported 16 

Total 804 

(3) Transient cases served by county welfare departments show no sig- 
nificant increase. (It should be noted, however, that assistance to nonresidents 
is limited and that the number of cases served is very small.) No statistics 
are available on transient applications for assistance but the intake office in 
Seattle has noted no increase. 

(4) Unemployment compensation claims filed against other States in the 
Seattle, Bremerton, and Tacoma offices during recent months were a substantial 
increase over those for the same period of the previous year. 

January . 

Form IB-1 (initial 





Form IB-2 (con- 
tinued claims) 

1939-40 1940-41 




4, 952 

Note.— Local claims are about 25 percent below the same period of last year. During the first quarter 
of 1941 multi-State claims have comprised 18 percent of all initial claims filed in Seattle, 38 percent in Bremer- 
on, and 14 percent in Tacoma. The increase in multi-State claimants has come largely from Montana. 


The unemployment-compensation records indicate a larger number of unem- 
ployed 'persons from other States than last year and a larger proportion of 
migrants among the unemployed group as a whole. It is apparent, however, 
that most of the migrants either (1) find work, (2) return home, or (3) remain 
in the area unemployed but cease to maintain their application with the em- 
ployment service. It seems a safe estimate that at least half and probably 
more of the largely unskilled migrant group referred to above have found 
work. As of March 20 the active file of the Seattle office included 3,500 persons 
with less than 6 months residence. In Bremerton there are relatively few 
unemployed for the reason that unsuccessful job seekers will return to Seattle 
or Tacoma where it is easier to find a place to live. The number of migrants 
in the Tacoma active file is probably about 1,000. Although most guesses have 
run considerably higher, it is difficult to justify an estimate of more than 
5,000 unemployed migrants in Seattle and 2,500 in the rest of the area. 

As to where the balance of the group have found employment, it may be 
assumed that the majority have been absorbed by the industries showing the 
greatest gains during the past year. It is estimated that private employment 
in King, Pierce, and Kitsap Counties for the fourth quarter of 1940 was up 
20 percent, 25 percent, and 50 percent, respectively, over the previous year. 
Gains were principally in aircraft and shipbuilding, secondarily in building 
construction. A general stimulation of trade has further increased employment 


Seattle was a city of 370,000; Tacoma, 110,000; and Bremerton, 15,000 at 
the time of the 1940 Federal census. The three counties in which they are 
located had a total population of 730,000. At that time the effect of defense 
activity was already being felt. Boeing Aircraft, for instance, had upped 
employment to 6,000 from about 2,000 at the beginning of 1939. Most of the 
activity in defense and practically all of the in-migration of workers because 
of defense activity has come since March 1940, however. Estimates of volume 
are necessarily rough, as there is no measure of the number of migrants who 
can be absorbed by an area of this size. The estimate here presented — 34,000 
net in-migration of workers and job seekers since September 1940 exclusive 
of military — is somewhat lower than most. Adding a probable 6,000 members 
of families, the figure becomes 40,000. With the exception of workers being 
imported for work at the Bremerton Navy Yard, the rate of in-migration is 
slackening. Indications are, however, that an unlimited number of unskilled 
migrants could be attracted if the need developed. While many have found 
work, there is no present need for workers of this type. 

Miner H. Baker. 

Exhibit D — Reallocation of Population and the Defense Program 

BOARD, MAY 17, 10 41 


I. Our economic history, more clearly than that of any other Nation of modern 
times, is the story of successive migrations. It is the story of mass move- 
ments of population, from other continents to this one. and from one part of 
this country to another. The early migrations that settled the country; the 
restless westward movement that developed it: and, more recently, the cityward 
movements of rural population, all bespeak the response of population to changes 
in our economy. 

In all considerations of the causes ami motivating influences of migration, 
there runs an implied agreement that people in the mass move in response to 
differences of economic potential between areas. In some cases migration is 
explained as a flight from poverty; in others it is the lure of a gold rush, 
literal or* figurative. In any case, it seems clear that masses of people move 
because they think that by so doing they will better themselves. 

This relationship between economic changes and migration characterizes most 
of the important migrations in the history of the United States. The relation- 
ship has been apparent in the effect of business cycles in the United Kingdom 
and the United States on the migrations across the Atlantic. Similarly, the 
flow of Irish immigrants has been related to the famines in Ireland, and the flow 
C0396— 41— pt. 17 6 


of southern and eastern Europeans to the overpopulation and poverty of those 
areas compared to the United States. In the history of our own country each 
of the periodic pauics of the nineteenth and early twentieth centuries generated 
a westward wave of impoverished victims of our own economic maladjustments. 
The urban industrialization of the United States demanded a type of migra- 
tion quite different from that by which the country was settled and developed. 
The insatiable demand of the industrial cities for more and more labor coin- 
cided with the emergence of population surpluses in agricultural areas. Es- 
pecially after the stream of immigrants from Europe was reduced to a mere 
trickle, the expanding cities could be supplied only by migrants from the 
countryside. This migration was stimulated during the World War and 
continued through the 1920's. The last depression reduced the volume of these 
movements and in one year actually reversed their direction ; but with the 
signs of returning prosperity the migration was resumed. 


The fact is that migrations in the history of this country have been not 
only a means of relieving the pressure of economic distress and surplus popu- 
lation, but also a means of providing population, which is to say labor, where 
and when it was needed. As pointed out in Migration and Economic Oppor- 
tunity, the fact that migration has proved an imperfect means of adjustment 
of population to economic opportunity should not obscure its importance or its 
effectiveness. The dramatic and pathetic spectacle of thousands of Americans 
in flight from abject poverty toward an unknown and unattainable security, 
such as occurs during a depression, confuses the social implications of migration 
and beclouds its economic function. 

It remains true that migration, as a form of social and economic mobility, 
has provided a fluidity which has made this a country of singular democratic 
opportunities. People on the move can scarcely be socially or economically 
caste bound. The migration of rural population to an urban scene involves 
not only a change of residence but more fretpiently than not a change of occupa- 
tion and of social status. It is this many-sided fluidity that has made possible 
the adjustment of the American people to their rapidly changing social and 
economic environment. 


II. A new wave of migration resulting from the national-defense program 
has been stimulated by employment opportunities especially in aircraft and 
shipbuilding, in heavy-goods industry, and in large-scale-construction projects. 
Some indication of the extent of the expansion is given in the Bureau of Labor 
Statistics indexes of factory employment which show that from March 1040 
through March 1941 employment increased by 81 percent in the shipbuilding 
industry, by 133 percent in the aircraft industry, by 30 percent in machine- 
produciion industries (excluding transporation equipment), and by 23 percent 
in iron and steel production. 

In the early months of the defense program, contracts to the amount of 
many billions were awarded to plants in established industrial areas. It is 
estimated that 85 percent of direct contracts went to 12 States containing 48 
percent of the population. Because of the importance of the contracts affecting 
manufacturing in the heavy-goods industries, economic revival has been most 
marked in thickly populated urban areas, which have long been centers of 
capital-goods production. In addition, shipbuilding and aircraft contracts 
have, for the most part, been awarded to urban industrial centers along the 

Because the impact of these early contracts has recently begun to strain the 
facilities and labor resources in areas of industrial concentration, attempts 
are now being made to locate new plants in areas where reserves of labor 
have been largely untapped. For example, the first orders for aircraft went 
to the established California companies; the new plants, authorized more re- 
cently, have been located in Mississippi Valley cities close to predominantly 
agricultural areas. Similarly, while contracts for naval expansion were 
awarded to shipbuilding centers like Boston, Newport News, and Seattle, at- 
tempts have been made to locate some of the shipyards for the merchant 
shipbuilding program in the relatively tmexploited ports of the Gulf. 


In addition to the important expansion of industry in already well-developed 
cities, the national-defense program has led to large-scale construction in 
rural areas. The building of Army cantonments has been concent rated in the 
rural sections of the Southern States with many important projects scattered 
in the Middle and Far West. Powder and shell-loading plants are being built 
in small towns and rural areas remote from the centers of industry. 

The depression left must urban communities well stocked with a diversified 
labor supply. It was only in certain of the aircraft centers and in the rural 
communities at the site of construction projects that migration of labor was 
needed in order to supply essential workers. Nevertheless, the opening up 
of economic opportunities has led to migration far beyond the requirements 
of industry, and has brought hundreds of thousands of workers to most of the 
important centers of defense activity. Large numbers of the unemployed 
have been eager to flock to places where wages were rumored to be high and 
jobs abundant. The House Committee on the Interstate Migration of Destitute 
Citizens has estimated that migration in connection with the defense program 
has developed in significant proportions during the last few months, and that 
in general the destinations of this migration are the industrial areas which 
received the influxes of workers during the World War, and in which important 
contracts have now been awarded. 


The level of wages, as well as the volume of employment, plays an important 
part in determining the areas which are to be the focal points of migration. 
Practically all States have reported to the Bureau of Employment Security a 
large-scale movement of workers from lower- to higher-wage areas. Workers 
are attracted from agricultural to industrial employment; workers in small 
communities migrate to large communities where wages are higher; workers 
from low-wage States are attracted to States where increased production 
provides an opportunity to obtain a "better" job. 

In general, migrant workers at the present time fall into two major categories. 
In the first place, there are those who migrate in response to definitely assured 
job opportunities. Skilled workers in the machine industries and metal trades 
have been recruited by employers over wide areas, and skilled, semiskilled, or 
unskilled construction workers have frequently come great distances to work 
on vast defense construction projects. The second and probably the larger group 
of migrants consists of those workers attracted by the hope but no definite 
prospect of employment, who move in a haphazard and unorganized way. This 
group consists chiefly of semiskilled or unskilled laborers and includes a large 
number of agricultural workers seeking industrial employment and young people 
without experience of any kind. 

Labor market reports and the related material received by the Bureau of 
Employment Security from State employment security agencies from September 
1940 through March 1041 give detailed information about these two types of 
migration and the geographic areas most affected. 


Construction workers form a majority of the skilled workers involved in re- 
cent mass migration movements. There has been an out-m'gration of construc- 
tion workers from heavily populated industrial areas to rural construction 
projects. New York State estimates a migration of 22,000 such workers to Army 
construction projects in recent months. The South Atlantic States appear to 
have been more affected than any other region by the influx of construction 
workers. There have also been significant mass migrations to other construction 
projects in the Middle West and Pacific coast areas, and some migration of 
carpenters and other construction workers to coastal shipbuilding centers. 
Many construction workers migrate from one project to another, setting up 
only tempoary residence at the various points. They appear to be a highly 
mobile group and move over an extensive territory. Maryland reports an influx 
of about 5,000 construction workers as a result of construction projects in that 
area. Five thousand skilled construction workers are said to have migrated 
from West Virginia to the site of a huge explosives plant at Radford, Va. 
California estimates that thousands of construction workers have come from 
the Southwestern region and from construct'on projects in other Western States 


to Army projects in California. Several States report that a majority of the 
construction workers do not bring their families with them and are ready to 
pull up stakes and leave town immediately after the completion of the work. 

Skilled workers in nonconstruction trades, for example, machinists, metal 
workers, and aircraft workers, have been drawn to centers with expanding de- 
mand for highly equipped technicians. California reports that skilled workers 
from the eastern seaboard and Detroit areas have been recruited for work in 
Pacific coast aircraft factories and other defense industries. In addition, 
thousands of semiskilled workers and graduates of national defense vocational 
training courses have migrated to California and have obtained employment in 
large numbers. Eighty thousand workers are estimated to have entered Cali- 
fornia since August 1940, most of them in skilled or semiskilled occupations. 
Skilled and semiskilled workers have also been migrating to such centers as 
Detroit, Louisville, and the industrial cities of Connecticut. 

In many States, centers of defense activity have attracted agricultural work- 
ers from the surrounding rural areas. Unskilled laborers have been employed 
in great numbers on construction projects in rural areas as "hammer and saw 
men," supplementing the skilled labor imported from outside the area. In New 
England and the Southern States, many agricultural workers have recently 
secured employment in factory towns. 


However, a very considerable number of migrants from rural or depressed 
areas have failed to find work in defense industries and in many cases have 
become stranded without resources. Ohio reports that in January 1941 over 
1,000 unskilled workers migrated from nearby Kentucky and Tennessee to sites 
of major defense projects and large industries, and that many of these migrants 
have remained unemployed. Connecticut reports that migratory laborers are 
coming into the State "to a large and alarming extent," and that the great 
majority of these workers "do not have much to offer in the way of skill." In 
California only a fraction of the thousands of agricultural workers who have 
moved toward areas of defense production have found work. Large influxes of 
unskilled rural workers in excess of those needed for construction work have been 
observed in such areas as Camp Blanding, Fla. ; Fort Bragg, N. C. : Fort Meade, 
Md. ; Camp Beauregard, La. ; Fort Jackson, S. C. ; and Fort Ethan Allen, Vt. The 
Work Projects Administration reports substantial defense migration from at least 
13 States in which the primary industry is agriculture. 

Another indication of the widespread trend of rural to urban migration is 
the concern expressed by many States in recent months over actual or pros- 
pective shortages of farm workers. 


Geographically, migration has affected certain areas of the country more 
than others. As indicated above there has been a mass migration of urban 
construction workers to projects in the South Atlantic States and the less pro- 
nounced flow of unskilled workers from the South to industrial areas in the 
border States. From the Mountain States and the drought areas, which in gen- 
eral have been little affected by defense reemployment, there has been a steady 
outflow of skilled and newly trained workers to the Pacific coast and to special 
defense projects throughout the West. Massachusetts and Connecticut have 
drawn many migrants from the New England and North Atlantic States. Some 
of the eastern industrial areas, notably Pennsylvania, New York, and New 
Jersey, though reporting some interchange of skilled workers with other areas. 
appear to have been relatively little affected by mass migration novements. The 
North Central and Middle Western industrial areas, on the other hand, have 
reported a considerable inflow of skilled, semiskilled, and unskilled workers. 

It can accurately be said that with few exceptions the defense program has 
up to now created few problems of labor supply that could not be solved by 
intelligent use of local labor without migration. This could have been achieved 
by training and by systematic processes of breaking down complex jobs into 
simple ones, grading up experienced workmen to higher skills, and using to 
best advantage the training and experience of skilled craftsmen. The excep- 
tions to this generalization have occurred principally where it has been neces- 
sary to import into a predominantly nonindustrial community relatively small 
numbers of specialized skilled workmen as a nucleus to permit the use of much 


greater numbers of semiskilled and unskilled workers. The establishment of a 
shipyard, an explosive plant, or an aircraft factory in an area where none of 
the needed skills are found can often be accomplished only in this way. 


From information available to the Bureau of Employment Security it is be- 
coming evident that we are approaching a new phase in the defense program, in 
which labor shortages may seriously handicap production unless our labor supply 
is effectively mobilized — literally, made mobile, both geographically and occupa- 
tionally. The Bureau of Employment Security receives monthly from each of its 
1,500 affiliated public-employment offices a report of the number of qualified 
registrants available in some 400 occupations important to the defense program. 
Paralleling these are reports from the local employment offices recording the 
anticipated labor requirements of approximately 11,000 employers in defense 
industries, together with nonstatistical reports on the changing conditions in the 
labor market. In addition, the Bureau has for its own use and at the request of 
the O. P. JVI. undertaken special surveys of selected local labor markets for the 
purpose of forecasting a year in advance the labor demand, the available supply, 
and the expected shortages. During the fall of 1940, these reports, in combina- 
tion, consistently pointed to the emergence of labor shortages in relatively few 
highly specialized, highly skilled occupations (principally in machine shops, ship- 
yards, and aircraft factories) in the midst of abundant supplies of unspecialized, 
untrained labor. Even where shortages were clearly in evidence, they were not. 
and, up to the present time, have not been sufficient to dissolve the aversions of 
most employers to the use of skilled Negro and alien workers, although the com- 
mon depression restrictions on age have lai'gely disappeared. Thus even in the 
occupations and industries in which the demand presses most heavily on the 
supply, the shortages must be considered limited, or relative, rather than absolute. 
In all cases these shortages have been specific to certain occupations, rather than 

The most recent reports to the Bureau, however, have indicated that in some 
communities general labor shortages may appear before the end of this year. 
In Detroit, for example, nearly 150.000 additional workers will be absorbed into 
employment during 1941. It is estimated that half of these will have to be im- 
ported from outside of the commuting area. Similarly, in Philadelphia the addi- 
tional employment of nearly 170,000 persons will require the importation of 
70,000. In the aggregate, 68 labor-market areas in which special labor surveys 
have been conducted with a total population of nearly 17,000.000 will absorb just 
over a million persons in employment during this year, and of these about 350,000 
will have to be imported. 

Since these estimates exclude construction workers and are for production, 
skilled and semiskilled workers who will be offered jobs of a permanent nature 
(at least as long as the defense program continues), it may be conservatively 
estimated that at least half of the migrants will bring their families with them 
to the job. Estimating, again conservatively, that each of these married migrants 
bringing a family has an average of 1% dependents, a minimum of 612,500 persons 
will be migrating in 1941 as a result of the increased defense employment in 
these areas. These figures include only the necessary migration for defense 
employment in the 68 areas studied, and take no account of the large volume 
of service workers who may be needed as the result of population expansion in 
small communities, or of the mass of migrants who may be attracted to defense 
areas by rumors of employment or uncontrolled advertising. 

The circumstances that give rise to this need for migration provide an inter- 
esting illustration of the relationship between migration and other types of 
mobility. In almost all cases it has been found that large numbers of workers 
already resident in these communities will be trained during the year to meet 
the local labor requirements. On the other hand, it has generally been found 
that 50 to 60 percent of the total supply of available labor in those communities 
cannot be counted on to meet the 1 prospective needs, either because they are 
physically or otherwise unsuited to perform the work in the occupations in 
which the demand exists or because they are barred from employment by the 
hiring preferences of employers, That i^ to say, it is found with few excep- 
tions that where occupational mobility in the form of training can be provided. 
the local labor can be used: but where employers" restrictions bar the use of 
women, Negroes, workers above or below certain ages, or workers of certain 
nationalities, it is the character of the demand, not of the supply, that will have 
to be adjusted in order to make efficient use of locally available labor. 



The Bureau's reports constantly emphasize the futility of attempts to import 
skilled labor. Except where a new plant is being established and must provide 
itself with at least a nucleus of skilled workmen before it can operate, employers 
are generally becoming reconciled to the Nation-wide shortages of certain types 
of skilled labor and are taking effective measures to grade up and diffuse the 
skills already available in their plants. The workers needed to be imported into 
most of these communities are, for the most part, semiskilled and unskilled. 
A notable exception, of course, is again found in the case of construction workers. 
In most of the skilled building trades occupations and in most parts of the 
country, there still seem to be ample supplies of such workers available for 
movement to the site of some project where they may be temporarily needed. 

The mobilization of our labor resources, whether by training or by migra- 
tion, obviously requires a high degree of coordination of training and placement 
machinery with the visible labor needs of each community. Under the terms 
of an agreement recently arrived at between the Bureau of Employment Se- 
curity, and the United States Office of Education on behalf of the vocational 
education authorities, training classes are being organized to meet specific labor 
requirements in each of hundreds of communities. In all cases an attempt is 
made to adapt through training the local labor supply as far as possible, especially 
in those occupations which require relatively little skill and for which training 
can be given relatively quickly. At the same time the employment service, 
through its machinery for transferring workers from areas of surplus to areas 
of shortage, is attempting to move needed workers directly in response to job 
openings and to discourage migration to areas in which local reserves of labor are 


III. From all of this there is beginning to emerge the outlines of a policy 
toward migration as an aspect of the defense program. There is a determination 
on the part of those responsible for planning various aspects of defense production 
to avoid as far as possible the mistakes made during the World War period, 
which survived to plague us long after the conflict. Although, in order to speed 
the present program, it was necessary to concentrate the early contracts very 
largely in great industrial cities where there were idle plant facilities and 
plentiful supplies of labor, there is now a determined effort to carry the jobs to 
areas relatively unexploited where labor is still available in order to avoid 
attracting to already overcrowded cities large numbers of people who will be 
left stranded when the emergency is past. 

Similarly, in laying plans for the defense-housing program, attention has been 
given to the likely amount and kind of in-migration of workers for defense 
industries and to adapt the housing to suit their needs. 

Underlying all of these efforts is the concept of migration as a means of 
adjusting labor supply to the needs of the defense program. As the policy is 
formulated it is clear that migration as a form of mobility should be encouraged 
only after all practicable means of adapting resident labor have been exhausted. 
This is not to say that the patterns of distribution should be frozen in their pres- 
ent form ; it is to say, however, that migration should be directed as far as pos- 
sible to achieve an optimum distribution in the light of economic resources and 

For the first time there exists in this country a mechanism which, if properly 
used, can achieve this result. Historically it has been one of the functions of 
a network of labor exchanges to encourage migration when and where it was 
needed and to prevent useless, aimless, wasteful wanderings of people in search 
of work. Indeed, this has been one of the reasons for the existence of labor 
exchanges. The Employment Service in the United States has only just made a 
beginning in this direction. Up to now the influence of the Employment Service 
in guiding migration has been relatively slight because the employment offices 
had at their disposal only a fraction of the job opportunities available. Where 
migration was necessary (and even in many cases where it was not) employers 
have found ways of stimulating it without reckoning the social and economic 
consequences. Where migration was not necessary, the Employment Service has 
been unable to stem it in the face of rumors or reports which the more ambitious 
and the more desperate workers felt compelled to follow themselves. This is. 
unhappily, hardly less true today than it was 2 or 3 years ago. And yet. there 
are signs that after many false starts some progress is beginning to be made. 
There is definite evidence that in certain agricultural areas the Employment 


Service has operated to guide the migration of agricultural workers to the points 
where they were needed. There is some evidence too that on some of the large 
construction projects, the migration was directed or at least the overmigration 
reduced by the intervention of the Employment Service. And more recently the 
Service has undertaken to work out with employers means of recruiting in 
distant places that will result in the movement only of such workers as can find 

If the demand on our labor resources approaches the magnitude that some 
predict, there will be many problems encountered in mobilizing our available sup 
plies of labor to man all essential defense activities. This will mean not only 
training millions of workers but also organizing the labor market on a scale 
hitherto unknown in this country. 

(The following- exhibits in connection with Mr. Altmeyer's testi- 
mony were received subsequent to the hearing and in accordance with 
instructions of the Chairman were made a part of the record.) 

Exhibit E. — Data on Interstate Clearance of Workers 

Federal Security Agency, 

Social Security Board, 
Washington, D. C, July 25, 1941. 
Hon. John H. Tolan, 

Chairman, House Committee Investigating National Defense Migration, 
Washington, D. C. 
Dear Congressman Tolan : It was recently requested that we prepare and 
submit certain materials, bearing principally upon the interstate clearance of 
workers, to the House Committee Investigating National Defense Migration. 
Data as follows are enclosed : 

1. A description of the recruitment methods of the United States Employment 
Service. The example approach is utilized in this document which describes 
the manner in which the interstate clearance of labor is accomplished. 

2. An outline of the description of the recruitment methods of the United 
States Employment Service. 

3. A statement outlining certain examples of the interstate referral of 
agricultural workers. 

4. A table which states the number of interarea clearance placements made 
during the months of January, February, March, and April. 

Since October 1940, 919 employer orders have been placed in intraregional 
clearance, and 729 have been placed in interregional clearance. These com- 
bined clearance orders represent 826 different occupations and 53,942 openings. 
These data, it should be understood, do not include the clearance of workers 
which may have occurred within individual States. 

With respect to standards regarding wages and other conditions of work, 
there follows an excerpt from the Employment Service Handbook of Informa- 
tion, States Operations Bulletin No. 10, part IV : 

"Although it is not the prerogative of the Employment Service to dictate 
standards for employment, thre is an obligation to the community not to par- 
ticipate directly or indirectly in the exploitation of workers. It should, there- 
fore, be a matter of policy for local offices not to refer workers to employment 
which, because of wages, hours, working, or sanitary conditions, is clearly 
below the standard accepted by the community for the class of work involved. 
Neither should an attempt to made to force obviously unfit workers on an 

It is hoped that the above, together with the enclosures, will be helpful to 
the House Committee Investigating National Defense Migration. Should further 
information be required, we shall be very glad to furnish it upon request. 
Sincerely yours, 

A. J. Ai.tmkykk. Chairman. 

1. United States Employment Service Recruiting Methods mi:; the Defense 


July 14, 1941. 

In the recruitment of labor for the national-defense program, the United 

States Employment Service has a twofold responsibility; namely. (1) to secure 

the best qualified workers available as expeditiously as possible with a minimum 

of migration of workers; and (2) to register and classify each worker effi- 


ciently and correctly in order that the local office may refer him as soon as 
practicable to a job in which he may utilize his skill to the best advantage at place 
of employment as near as possible to his residence. 

The entire network of public employment services throughout the country is 
engaged in this effort to recruit qualified applicants in such manner as to serve 
the best interests of defense employers and the workers themselves. When it 
becomes impossible to secure the required number of workers through the 
customary recruitment processes, it is necessary to utilize clearance procedures 
to recruit those workers in the most orderly possible manner. 

It should be noted that present labor market conditions have necessitated 
the development of new recruitment methods and factors, incident to securing 
workers, not previously considered a part of the recruitment process. 

Recruitment actually begins at the local office level. The processes involved 
in the recruitment of workers, and the clearance of orders, when that becomes 
necessary, are as follows : 


An aircraft company in St. Louis, for example, places an order for 500 skilled 
workers with the local office of the Missouri State Employment Service. The 
St. Louis office searches the active file for all qualified applicants in the desig- 
nated occupational classification and also for all applicants in related occupa- 
tions who might be able to do the work described in the employer's job specifi- 
cation. It is determined, by reinterview of applicants if necessary, that there 
are 50 applicants in the desired classification qualified for referral to the em- 
ployer ; and that there are 10 applicants in closely related occupations who may 
be able to fill the job. The qualified applicants are referred to the employer ; 
and the employer's personnel officer is also asked to consider for interview and 
possible employment the applicants who are skilled in related occupations. In 
a large number of cases, such interviews result in employment. 

The Employment Services have cooperated with the Training Within Industry 
Section in all parts of the country to promote the development of the program 
for in-service training in defense occupations. 

Accordingly, the local office in St. Louis suggests to the employer that it will 
facilitate the staffing of his plant if he will utilize the assistance offered by the 
Training Within Industry Section, whose representatives will come into the 
plant for the purpose of surveying its labor needs and will make suggestions 
and plans concerning the type of training to be inaugurated. 

As the result of such training, the up-grading process can be utilized to 
supply some of the skilled workers required. The employer is assured that 
the Employment Service will assist in the replacement of workers who have 
been promoted, and that it will probably be less difficult to secure such replace- 
ments than to find the highly skilled workers stipulated in the order. 

At this point it should also be noted that the employer is influenced to use job 
dilution as much as practicable. This permits the placement of several workers, 
each of whom has learned a single skill, in a job formerly held by a worker who 
is multiskilled. Obviously it requires much less time to train a uniskilled worker ; 
and this method also releases multiskilled workers, in many instances, for super- 
visory jobs, thereby increasing their value in the plant. 

The Employment Service office will, if necessary, endeavor to persuade the 
employer to relax any restrictive policies which may limit the referrals which can 
be made to his plant. For example, if, in his specifications, he has set an age 
limit which appears to be too high, he will be asked to lower it. If he has prejudices 
against a race and/or other minority groups, an effort will be made to demonstrate 
that there are many qualified workers in the categories which he has banned who 
may probably be able to do the required work, if they are given the opportunity. 

The local office of the Employment Service, through cooperative plans effected 
between the United States Employment Service Division and the Office of Educa- 
tion, is in a position to cooperate with local vocational education authorities to 
inaugurate the type of training classes needed in the community. Not only does 
the Employment Service participate in planning the courses but it refers the 
prospective trainees to the defense training schools and has them registered in the 
local office for employment after the training courses qualify them to accept em- 
ployment in defense jobs. Many of those trainees can be utilized, for example, as 
replacements in jobs requiring one skill when the up-grading process is utilized in 
the plant. 


Thereafter the search is directed to all possible sources of labor supply in the 
community. Communication is established with unions to secure leads for skilled 
workers ; and other local sources are considered as follows : 

Qualified Negroes : Vocational schools and other trainee sources for trainees 
who may be utilized as replacements. 

Marginal workers who may qualify as replacements: Workers with required 
qualifications who are working in nondefense industries who can be released volun- 
tarily by their employers, if it can be arranged that they may retain their seniority 
status in the present job and be guaranteed reemployment following the emergency. 

When it is believed that there may be workers in the community with the 
required qualifications not registered with the Employment Service, nor employed 
by defense contractors, the local office resorts to advertising. Advertisements are 
released in local newspapers or over the radio, with the stipulation that workers 
already engaged in defense industries will not be employed. Applicants who 
respond to these advertisements are registered and interviewed at the Employment 
Service office, and if qualified are referred in response to the employer's order. 

After all available local sources of labor are exhausted the area of immediate 
clearance is utilized for recruitment purposes. 


The area of immediate clearance is the natural labor market, surrounding a 
community, from which workers are customarily drawn. Its boundaries are fixed 
only by such specification and may cross county, State, and even regional lines. 
For example, St. Louis, Mo., and East St. Louis, 111., are included in an area of 
immediate clearance. The local employment office in St. Louis may recruit 
workers in this area of immediate clearance in precisely the same manner as 
labor is recruited in St. Louis, and all of the steps in the process outlined above 
may be resorted to — even advertising, with the consent of the East St. Louis office. 

If the order is still not filled after all sources of labor in the .area of imme- 
diate clearance are exhausted, the order is ready for intrastate clearance, if the 
employer agrees to this extension. 


The local office in St. Louis sends the order to the administrative office of 
the State agency, indicating the number of openings which are still unfilled. 
The State clearance officer has at his disposal information concerning the labor 
market of the State of Missouri which will enable him to determine whether 
the order should be cleared generally throughout the State, or only in selected 
offices in the State. After this determination has been made, the order is sent 
to some or all of the local offices in the State for further intensive recruitment. 
Each local office which receives the order then exhausts all available sources 
of labor in the manner indicated above. A form, known as Reply to Clearance 
Request, is filled out for every available qualified applicant who is willing to be 
referred for employment and is sent directly to St. Louis, the office in which 
the order originated. These forms, which constitute a record of the applicants' 
qualifications and experience are reviewed by the St. Louis office, and if it is 
determined that they fill the employer's specifications, they are sent to the 
personnel officer of the company for decision as to which applicants should 
travel to St. Louis for personal interview by the employer. 

If relatively large groups of applicants are available in certain cities in the 
State, the employer may choose to have the State clearance officer arrange to 
assemble preselected groups of qualified workers at a designated time and place 
for interview by a company representative, who can determine immediately 
which applicants will be employed. 

If all of the openings have not been filled through intrastate clearance, 
recruitment may then be extended to other States. 


For administrative purposes, the whole country is divided into 12 Social 
Security Board regions, in each of which is located a regional office. In each 
of these offices is stationed a regional clearance representative, who has been 
appointed by the Bureau Clearance Office, and who cooperates with regional 


representatives of the Bureau and officials of the State agencies in the operation 
of the clearance program. 

Accordingly, when it becomes apparent that it will not be possible to fill 
the employer's order in Missouri, the State agency sends the order to the 
regional clearance representative who has jurisdiction over this area ; in this 
case, region IX. The clearance representative then determines from the labor 
market information he has available whether or not to send the order to all 
of the other States in region IX ; namely, Kansas, Oklahoma, and Arkansas, 
or whether to send it to selected States. After such decision, he sends the 
order to the administrative office of each of the State agencies which he has 
chosen. Thereupon, the State clearance officer will cause the entire State to 
be cleared in the same manner as was earlier done in Missouri. 

In this case, also, the Reply to Clearance Request for each applicant is sent 
directly by the local office which recruits the applicant to the St. Louis office 
where the order originated. 

From this point, the procedure is the same as has already been described 

When there is quite a large group of workers available in the required 
occupational classification in some localities, the State agency so advises the 
regional clearance representative. He may learn, for example, that there are 
100 qualified applicants in Kansas City, Kans. ; 50 qualified workers in Topeka, 
Kans. ; and 75 qualified workers in Oklahoma City, Okla. He will then com- 
municate such information to the employer at St. Louis and advise him that if 
he will arrange to send his representative to these three cities, the available, 
qualified applicants will be assembled at the respective local employment offices 
on designated dates for interview and employment. 

This method, known as the pooled interview type of recruitment, eliminates 
unnecessary travel on the part of applicants who live long distances from the 
point of employment. It also results in the employment of many applicants who 
might not appear to be able to do the work from a mere written record of their 
qualifications, but who can demonstrate by means of a personal interview that 
they are qualified for the job. 

When all of the sources of labor supply in region IX have been exhausted, 
and the order is not filled, it becomes necessary to utilize interregional 


Interregional clearance is initiated by the Bureau clearance office. That 
office is in possession of copies of all orders which are in interstate (or intra- 
regional) clearance. Accordingly, after it has been determined that there 
are no more qualified workers in the designated classification available in 
region IX, the clearance representative so informs the Bureau clearance office 
by mail, telegram, or telephone, designating the order number, and requesting 
further clearance on an interregional basis. 

The Bureau clearance office, by utilizing available labor market data concern- 
ing labor supply and demand, determines in which other regions and in which 
States in those regions, clearance should be instituted. Such determination is 
sent by wire or telephone to the clearance representative in region IX. For 
example, he may be told to clear the order in regions VIII and X, which are 
contiguous to region IX ; or he may be told to clear in all of region VIII and 
only in Texas in region X. 

Thereafter, the clearance representative for region IX sends the order to 
the clearance representative in regions VIII and X, respectively, and requests 
them to institute clearance as indicated. 

The Bureau clearance office may, of course, determine that the order shall be 
placed in national clearance, when all of the regions in the country will be 

As is the case on all other levels, the replies to clearance requests concerning 
all applicants who are available for referral to the employer in St. Louis are 
sent directly to the Employment Service office in St. Louis by the office which 
locates the applicant. 

For administrative purposes, the regional offices, the administrative offices of 
the State agencies, and the Bureau clearance office receive such copies of orders 
and replies to clearance requests as enable them to keep currently informed 
concerning clearance operations. 


It should be noted that the pooled interview type of recruitmenl may be 
utilized on an interregional basis as well as on an intraregiona] basis, as has 
been described above. Such arrangements may he made by the clearance rep- 
resentatives with each other, or by the Bureau clearance office with the clear- 
ance representatives. 


Since the Labor Supply and Clearance Unit was established in the early 
summer of 1940, clearance procedures have been revised a number of times to 
meet the needs of the defense program and the rapidly changing developments 
in the labor market. Since stringencies in occupations required in defense in- 
dustries are currently assuming alarming proportions, it lias again become ap- 
parent that additional revisions must be made in clearance procedures further 
to expedite the actual referral process and to assure, so far as practicable, 
that every possible source of labor supply has been searched and exhausted. 
Such tentative procedures have already been formulated, and it is expected that 
they will soon be adopted. It is believed that the revisions in contemplation 
will result in a very substantial saving of time and will permit the labor 
clearance process to operate on a definitely streamlined basis. 

2. Outline of United States Employment Service Recruitment Methods fob 

the Defense Program 

July 14. 1041. 

i. united states employment service responsibilities 

A. To secure qualified applicants expeditiously with a minimum of worker 

B. To register and classify each applicant correctly in order to expedite 
his referral" to a job in which his skill may be utilized to the best advantage. 


A. Local office. — 1. Employer places order with local office. 
2. Local office utilizes the following procedures : 

(a) Searches file for — 

Qualified applicants in designated occupation. 
Qualified applicants in closely related occupations. 

(b) Endeavors to influence employer to — 

Cooperate with the Training Within Industry Section to inaug- 
urate in-service training and thereafter to — 
Utilize the up-grading process. 
Use job dilution by employing uniskilled workers. 
Relax any restrictive policies concerning workers, such as 

age limitations, etc. 
Employ qualified trainees as replacements. 
(c) Directs search to all possible local sources of labor, as follows: 

Vocational schools and other trainee sources. 
Qualified Negroes. 
Marginal workers. 

Skilled workers in nondefense industry who can be released 
voluntarily by employers, 
i </ 1 Advertises through newspapers and radio for qualified applicants 
not employed by defense contractors. 

B. Area of immediate clearance. — 1. Local office recruits for workers in natural 
labor market surrounding community in which office is situated. 

2. Local office utilizes same procedures for recruitment in this area as out- 
lined in section 2 above. 


A. State clearance. — 1. State agency requested by local office to clear through- 
out State. 

2. State agency selects offices to be cleared. 

3. Each local office which receives order exhausts all local sources of labor 
supply as outlined under section II. 


4. Each office clearing for workers sends Replies to Clearance Requests directly 
to office holding order. 

5. Selected Replies to Clearance Requests are transmitted to employer. 

6. Large groups of available applicants are assembled in cities throughout the 
State for pooled interview by employer's representative. 

B. Regional clearance. — 1. Country is divided into 12 Social Security Board 
regions for administrative purposes. 

2. Federally appointed clearance representative is stationed in each region. 

3. Regional clearance representative is requested by State agency to clear 
throughout the region. 

4. Regional clearance representative selects States to be cleared. 

5. Procedures in States and local offices are followed as outlined above. 

6. Each office clearing for workers sends Replies to Clearance Requests directly 
to local office holding order. 

7. Large groups of available applicants are assembled in cities throughout the 
region for pooled interview by employer's representative. 

C. National clearance. — 1. Bureau clearance office administratively responsible. 

2. Regional clearance representative requests Bureau clearance office to inugu- 
rate interregional clearance. 

3. Bureau clearance office selects regions to be cleared. 

4. Bureau clearance office informs regional clearance representative by mail, 
telegram, or telephone to inaugurate interregional clearance. 

5. Regional clearance representative in region where order originated advises 
clearance representatives in regions selected by Bureau clearance office to inaugu- 
rate clearance as indicated. 

6. Procedures in State and local offices are followed as outlined above. 

7. Each office clearing for workers sends Replies to Clearance Requests directly 
to local office holding order. 

8. Large groups of available applicants are assembled in designated cities in 
these regions for pooled inteview by the employer's representative. 

D. New clearance procedures (now being formulated.) 

3. Interstate Referral of Agricultural Workers 

The following examples show the number of interstate agricultural referrals 
brought to our attention during the last 6 months. There may have been con- 
siderably more, but the Farm Placement Section received reports on this matter 
from only those States having Federal Farm Placement Supervisors. 

During the months of May and June Federal Farm Placement Representatives 
assisted the California and Oregon State Employment Services in recruiting, 
and made arrangements for transporting, of 1,000 farm workers from the former 
to the latter State for work in strawberry fields. Formal clearance pro- 
cedures were handled by the United States Employment Service Regional Clear- 
ance officer in San Francisco. 

Since the expense of transportation to the berry fields presented a major 
difficulty to the workers, the prospective employers agreed to furnish gasoline 
and oil' necessary for the journey. This was accomplished through an agree- 
ment made by Federal Farm Placement representatives with the Standard 
Oil Co. of San Francisco, to furnish gasoline and oil at des'gnated stations along 
the route. Such workers were identified by State employment service referral 
cards and by windshield stickers on the workers' cars. All of the 1,000 workers 
recruited arrived at the proper Oregon State employment service office and were 
referred to their employers. 

Farm Placement supervisors assisted in recruiting and transferring approxi- 
mately 75 farm workers from North Carolina to Virginia strawberry fields 
during the month of May. However, during June more than 1,000 farm workers 
were recruited and transferred from North Carolina to Virginia potato fields. 
The above personnel also handled this operation. In these two instances clear- 
ance was effected between these two States through local offices. Up to July 1 
Virgnia was still securing more farm workers from North Carolina. The above 
operations took place only after it had been ascertained that stringent labor 
shortages existed in the localities mentioned. 

Rates of pay, length of employment, and other conditions of work are ascer- 
tained and presented to the prospective employee prior to his acceptance or non- 
acceptance of referral to employment. 



Interwrea clearance placements, 1 first quarter, V.)J t l - 






Percent change from 






11, 705 
24, 394 
10, 869 



10, 915 
14, 000 







Total _ 

61, 859 



57, 820 

Percent distribution 

1 Interarea clearance placements represent placements of workers referred through the intra- or interstate 
clearance system from any office outside the labor market area in which the opening occurred. 

2 Not available for 1940. 

Source: Research and Statistics Division, Bureau of Employment Security, July 18, 1941. 

Exhibit F — Migration and the Defense Program in Louisville, Ky. 

Federal Security Agency, 

Social Security Board 
Washington, D. C, August 15 19J/1. 
Mr. Palmer Weber, 

House Committer Investigating National Defense Migration, 

Washington, D. C. 
Dear Mr. Weber: We are sending under separate cover a report we have re- 
ceived from the Kentucky Unemployment Compensation Commission on Migra- 
tion and the Defense Program in Louisville, Ky. Louisville was 1 of the 20 
areas from which special information on defense migration was requested by our 
Bureau in March 1941. 

We are still waiting to hear from 6 of these 20 areas, and will send you other 
reports as they are received. 
Very truly yours, 

Collis Stocking, 
Chief, Research and Statistics Division. 

Migration and the Defense Program in Louisville, Ky. 

raymond cella. supervisor, research and statistics section, frankfort, ky., 
kentucky t t nemploymext compensation commission 


The awarding of large contracts by the Federal Government in connection 
with the national-defense program has created an influx of workers and job 
seekers from all parts of the country to the areas in which these defense con- 
tracts have been awarded. Serious labor stringencies are already being felt as 
a result of the demands of the defense program, even at the present level of 
expansion. Workers are being selected from every known source and from all 
sections of the Nation to relieve the shortages which have developed. As defense 
industries expand in operations and production, the manpower for this mass 
production must increase. 

Due to these developments in the labor situation and the resulting migration 
of workers to the defense centers it is essential that the causes, characteristics, 
and results of the migratory movement of workers be reviewed. Information 
with regard to the migration of workers to the defense centers — volume of the 
migration, the areas from which the workers migrated, the occupational skills 
and experience, and the age. race, and marital status of these workers — is of 
considerable importance in relation to the national-defense program, and in plan- 
ning for the period of readjustment which must necessarily follow. The ere- 


ation of defense centers and the increased employment opportunities which is 
bringing large numbers to these centers is causing overcrowded conditions, hous- 
ing shortages, and a concentration of workers in a small area. Labor shortages 
are developing to such a degree that it is important to know to what extent these 
shortages have lessened employer specifications as to occupational skills and 
experience, and the age and race of workers. We also wish to determine the 
causes for the shifting of workers from one section to. another. Is it a directed 
movement or is it an undirected movement caused by rumor or advertising? 
It is of relative importance in connection with national defense that the extent 
to which the migratory workers have found employment be ascertained along 
with other information such as the industries and occupations in which employ- 
ment was obtained. 

Several projects, including the construction and operation of the smokeless 
powder plant at Charlestown, Ind., by the E. I. du Pont de Nemours Co., the con- 
struction of the Hoosier Ordnance Works at Charlestown, the construction of 
warehouses at the Quartermasters Depot, Jeffersonville, construction work at 
Fort Knox, construction work at Bowman Air Field, are located in the vicinity 
of Louisville, making this one of the important defense centers of the Nation. 
The development of the Louisville area into a defense center and the resulting 
inflow of workers to the area is the reason for this study of the migratory move- 
ment presenting the sources and characteristics of this supply of labor. 



The material for a study of the migratory movement to the Louisville area 
was drawn from records of applications and reports of the local employment 
office at Louisville, Ky. A narrative report outlining the causes, extent, char- 
acteristics, and the results of the movement was prepared by the local office. 
In addition, specific data with regard to migrant workers taken from a sample 
of the applications were listed on work sheets by tbe local office. 

The sample selected for study was secured by taking each fifth application in 
the active file in May 1940 and each fifth referral in response to employer orders 
for regular workers received from July 1, 1940, to May 1, 1941. In an instance 
of less than five referrals in response to an order, the first referral was included 
in the sample. A count was made of the total number of applications in the 
sample which was obtained by using each fifth application and each fifth referral 
in response to an employer order. The following specific data were listed con- 
cerning each applicant in the sample who was a migrant to the Louisville area : 
Occupational code, age, sex, citizenship, marital status, color, years experience, 
place from which workers migrated, date of employment if the worker became em- 
ployed, industry of employment if the worker became employed, and classification 
of employment by defense industry or other industry. 

These reports were submitted to the Research and Statistics Section of the 
Kentucky Unemployment Compensation Commission and tabulations were made 
with regard to sex, color, age, occupational groups, area of emigration, years of 
experience, number securing employment, and distributions of those securing em- 
ployment by industry, occupational groups, sex, and age groups. The informa- 
tion in the narrative report of the local office was combined with the information 
secured from the tabulations of these specific data to prepare the report on migra- 
tion in the Louisville area. 

A brief analysis was also prepared of migration from the Louisville area during 
the period from July 1940 to May 1941. The interstate claim file of the Unem- 
ployment Compensation Commission was checked for claimants whose last em- 
ployment was in Louisville, Ky. A count was made of the number by States in 
which the claim was filed and by industry of last employer. These data were 
added to the report on migration. 


The migration of workers to the Louisville area in increasing numbers began 
in September 1940, the month in which the Du Pont Co. began construction 
of the smokeless powder plant at Charlestown, Ind. This project is located 
approximately 14 miles from Louisville, which is well within commuting dis- 
tance for Louisville residents. The construction of the smokeless powder plant 
is chiefly responsible for the influx of workers and job seekers to this area. 


Since September several other large projects have been under way in the 

In April 1941 a construction project at Bowman Air Field, recently leased 
to the Army Air Corps, was completed. This held comprises an area of approxi- 
mately 4U0 acres on which has been constructed during the year IL'2 buildings 
consisting of barracks, mess halls, administration buildings, officers' quarters, 
recreation halls, store houses, etc., for the housing and operations of the 
Forty-sixth Bombardment Squadron, Twenty-eighth Air Base. Three concrete 
runways, each approximately 1.000 feet wide, and averaging in length from 
3,000 to 4,000 feet, have been built here. 

At Fort Knox, 31 miles from Louisville, are quarters of forces of the United 
States Army comprising approximately 86 acres. As a result of the expansion 
of the post from about 7,000 soldiers a year ago to nearly 30,000 officers and 
enlisted men at present, construction activity has been running high at Fort 
Knox. This project provided for construction of barracks, recreation halls, 
storage houses, administration buildings, as well as roads and utilities. 

The United States Naval Ordnance Plant is located on the outskirts of 
Louisville and covers an area of 135 acres. Appropriations for the construc- 
tion of this plant amount to $4,500,000. The construction work is progressing 
rapidly and should be completed in August 1041. 

In addition to these projects are the construction of the Hoosier Ordnance 
Works at Charlestown, Ind., the construction of warehouses at the Quarter- 
masters Depot, Jeffersonville, Ind., and other private industrial and home con- 
struction. The increased employment opportunities due to the industrial de- 
fense activities and the exhaustion of the local labor supply in certain skilled 
occupations have motivated the migratory movement. 

The speed with which the construction of the Dn Pont plant progressed, 
which as noted previously was mainly responsible for the influx of workers, 
and the fact that the Government decided to double the capacity of the project, 
necessitating revised plans and many additional workers, created a shortage of 
skilled workers. Still later it was decided to further increase the operating 
capacity of this project, so that at the present time ir represents an invest- 
ment three times as large as originally planned. 

This project was declared an "open job." with wages and hours equal to the 
prevailing union wages and working conditions. The Du Pont Co. began taking 
the applications of workers direct, in addition to accepting and considering 
the referrals of the public employment offices. No doubt some of the workers 
employed were migrants who soon informed friends and relatives from near 
and far that employment could be secured at Charlestown. In this manner 
the word began to spread, and more and more migrants were beginning to 
appear at the public employment offices and directly on the site of the job. 
Soon the employment offices exhausted their local supply of labor in various 
classifications and were selecting workers in Kentucky and Indiana through 
clearance procedures. 

In addition to using the public employment offices the Du Pont Co. selected 
workers from many sources. It is understood that bold-type classified advertise- 
ments appeared in newspapers as far away as Minneapolis, Minn., advertising job 
openings for this project. Also, it was reported, the Du Pont Co. sent labor 
recruiters to various parts of the country to secure workers. Much of this work 
was carried on in cooperation with public employment offices in several of the 
States. This produced a large inflow of migrant workers, but fortunately the 
majority of those coming from outside Kentucky and Indiana were experienced in 
the methods customarily used in the employment of workers for construction 
projects and, if work was not available at any early date, moved on to other 
locations where they thought employment could be obtained. Besides the recruit- 
ment of workers by the Du Pont Co., some of the union locals, especially the 
carpenters, were obtaining workers through locals in other sections of the country. 

Trained munition makers began reporting to the local Du Pont plant in March, 
being sent from the other plants in Tennessee and Delaware. Workers were 
being selected from the construction crews and trained in the skills necessary 
for production operations which were started on one of the six production lines iii 
the latter part of April. 

Extent of migratory movements. — "Migratory workers'" has been interpreted as 
those workers who normally live outside of the territory served by the Louisville, 
Ky., and New Albany, Ind.. employment offices so that daily commuting to their 



work is an impossibility. On this basis, and after a review of the problem with 
union representatives, employers and other qualified and competent advisers, it 
is estimated that there were approximately 15,000 migrant workers in the area 
in May 1941. At least 13,000 of these workers were currently employed with 
approximately 95 percent of them in the construction industry. A check with 
various relief and charitable organizations clearly indicates that of the estimated 
2,000 unemployed migrants, not more than 5 percent could be considered to be 
stranded without funds. It has been observed that in most instances, as they are 
laid off or otherwise lose their job, skilled workers leave the area within a com- 
paratively short time. 


The sample selected from the applications in the public employment office in 
Louisville, by taking each fifth application and each fifth referral in response to 
employer order, contained a total of 8,619 applicants. Of this number, 2,227 ap- 
plications were selected from the active file and 6,392 applications were secured by 
the sampling of the referrals in response to employer order since July 1940. This 
sample, selected at random, was made up of local workers as well as the migrant 
workers. It was found that 221, or 10 percent, of the 2,227 applications taken from 
the active file were those of migrant workers. Of the 6,392 applications selected 
from the referrals in response to employer order, 806, or 13 percent, were workers 
who had migrated to Louisville. 

Occupational groups and experience of migrants. — All occupational groups were 
represented among the migrants, the greatest concentration being among the 
skilled occupations (table I). Applicants registered in the skilled-occupational 
group accounted for 41 percent of all migrants. Since local labor supply was 
exhausted in several skilled construction occupations there was a greater demand 
for this group. Approximately 29 percent of the workers were in the unskilled- 
occupational group and 10 percent in the semiskilled. 

Table I. — Migrants classified by major occupational group and by gears of 
experience in occupation — sample of active file as of May 19-il and of referrals, 
July 19J f to April 19J f l, Louisville local office 

Years of expei 


Major occupational group 







20 and 










Professional and managerial 




















The degree of experience of the workers varied from no experience to as much 
as 45 years. However, 50 percent of the migrants have had less than 5 years' 
experience, 24 percent from 5 to 9 years, and 15 percent from 10 to 14 years. Of 
the 513 workers having 5 or more years' experience there were 333, or 65 percent, 
classified in the skilled occupational group leaving 35 percent in this group with 
less than 5 years of experience. 

Area of immigration according to occupational group. — Workers have migrated 
from all sections of Kentucky as well as from all States of the Nation to the 
Louisville area (table II). The largest number, approximately 18 percent, 
of the workers migrating from various sections of the State were from the south- 



central portion which is chiefly agricultural. Nine percent of the workers migrated 
from area 2, which is regarded as a mining and agricultural section. However, 
this territory contains Owensboro and Henderson and is adjacent to the industrial 
-section of Indiana surrounding Evansville. This portion of the State would proba- 
bly be considered fourth in industrial activity, area 4 (Louisville), area 6 
(Covington and Newport), and area 8 (Ashland) being larger in the order 
mentioned. Area 5, from which 8 percent of the workers migrated, includes a part 
of the bluegrass region of the State. The bluegrass section also covers area 7 
from which came 7 percent of the workers. Lexington is the industrial center of 
the bluegrass with practically all industry resulting from agricultural production. 
Seven percent of the workers came from area 9 which is the southeastern coal 
fields where the mining industry is predominant. 

Table II. — Migrants classified by area of emigration and, by major occupational 
group — Sample of active file as of May 19J/1 and of referral*, July 191+0 to 
April 1941, Louisville local office 

Area of emigration 

Major occupational groups 

























Percentage distribution by area 








































Agricultural, fishery, and forestry 









1 Less than 1 percent. 

The number from areas 6 and 8, the territories surrounding Newport and 
Ashland and the largest industrial sections of the State with the exception of 
Louisville, is of small consequence. 

Thirty-eight States and the District of Columbia were represented by 433, 
or 42 percent, of the 1,02S workers who were migrants (table III). A chart has 
been prepared showing the distribution of workers emigrating from other States 
to Louisville, Ky. (See p. 6775.) Of this group of migrants, 40 percent were 
skilled, 22 percent unskilled, 14 percent semiskilled, and 12 percent in the clerical 
and sales group. The adjoining States of Illinois, Indiana, Ohio, and Tennessee 
furnished 2.",(i, or 55 percent, of the number migrating from outside Kentucky. 
Skilled workers, particularly carpenters, millwrights, and structural-steel workers 
came from all parts of the country. 

Personal characteristics of the migrants. — Additional insight into the labor situ- 
ation is provided by a consideration of the age, sex, and color of the migrant 
workers (table IV). Negroes were represented by only 32, or 3 percent, of 
the 1,028 migrant workers. This may be attributed to the fact that the em- 
ployment opportunities for this race were small due to the restrictions of 
the employers which excluded colored workers in most cases. Some evidence 
that the colored element is insignificant in the migratory movement is estab- 
lished by the fact that approximately 22 percent of the active applications in 
the Louisville office in May 11)41 (the month in which the data were gathered) 
were those of colored workers. 

The migrants were distributed by age from 17 to 64, with about 89 percent 
from 20 to 49 years of age. Approximately 69 percent of the workers were 
from 20 to 39, and 22 percent from 25 to 29. 

60396— 41— pt. 17- 



Table III. — Migrants classified by major occupational groups and by State of 
emigration — Sample of active files as of May 19/fl and of referrals, July 19J/0 
to April 1941, Louisville local office 

Occupational group 










Total .-- 





























































































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Table IV. — Migrants classified by age groups, by sex and color — Sample of active 
file as of May 191+1 and of referrals, July 1940 to April 1941, Louisville local 

Sex and color 

Age groups 
















Under 20 







20 to 24 

25 to 29 . . . 


30 to 34 


35 to 39 


40 to 44 


45 to 49 

50 to 54 . . 

55 to 59 

Only three of the workers in the migrant group were found who are 
naturalized citizens and one who is an alien. This in all probability results 
from hiring specifications imposed by employers which restricts the employ- 
ment to American-born citizens. 


Another consideration in studying the migratory movement is the extent to 
which migrants secured employment. As stated earlier in this report from 
a sample selected of the referrals in response to employer order, 807, or 13 
percent, of the 6,392 referrals were workers who had migrated to Louisville. 
Of the 807 migrants referred, 567, or 70 percent, secured employment. 

Sex and age of migrants who secured employment. — Approximately 92 per- 
cent of the migrants who secured employment by referral of the public employ- 
ment office were men and 8 percent were women (table V). About 91 per- 
cent of those employed were 20 to 49 years of age, with 25 percent of the total 
group from 25 to 29. There were 13 workers between the ages of 55 and 59 
who secured employment. 

Major occupational groups and industry groups of employment. — Placement 
of migrant workers by the Louisville employment office in the skilled occupa- 
tional group is predominant, no doubt due to the shortages existing in certain 
skilled occupations. The evidence in table VI confirms the expected result that 
employment would be greater in this group of workers. About 50 percent of 
the placements were in the skilled occupational group with the next highest 
ratio, 30 percent, in the unskilled occupational group. It should be noted that 
of the 280 placed in skilled occupations, 178 were carpenters, 23 were millwrights, 
20 were painters, 13 were construction foremen, and 14 were riggers. In the 
semiskilled occupations 21 of the 41 placements were in construction occupations ; 
146 of the 169 placements in the unskilled occupational group were construction 



Table V. — Migrants who became employed distributed by sex and age groups — 
Sample of referrals, July 1940 to April 1941, Louisville local office 

Age groups 

Number of migrants 





Total - 






Under 20. - 






20 to 24 


25 to 29 


30to34 ... 


35 to 39. .. 


40 to 44. 


45 to 49 

50 to 54... 


55 to 59 


60 and over 

Table VI. — Placement of migrants by major occupational group and by industry 
group — Sample of referrals July 1940 to April 1941, Louisville local office 

Industry group 

Major occupational group 

All in- 









ice in- 











Professional and managerial 
















Agricultural, fishery, and forestry 











1 Less than 1 percent. 

The industrial distribution of placements shows that 83 percent were placed 
in the manufacturing industries ; however, these placements were practically 
all to the Du Pont Co. in construction work which would make a total of 88 
percent placed in the construction industry. Approximately 85 percent of the 
total number employed were iu industrial defense activities. Almost all re- 
ferrals and placements of these workers have been made since October 1940. 
The sample selected was taken from referrals and placements made from July 
1940 to May 1941. The following is a distribution of the number employed 
each month: July, 0; August, 1; September, 1; October, 65; November, 69; De- 
cember, 68; January, 160; February, 50; March, 58; April, 90; and May, 5. 
The decrease in number for May does not indicate that employment dropped 
off as the 5 reported were workers who had been referred during the month of 
April. Referrals during the month of May were not included in this report. 




Although data were not available for a complete study of migration from the 
Louisville area, the interstate claim file of the Unemployment Compensation 
Commission yielded a total of 525 claimants during the period under considera- 
tion who listed their last employment in this city (table VII). Of these claim- 
ants there were 97 who filed a claim in Indiana, 68 in Ohio, 60 in Tennessee, 
and 33 in Illinois. This gives a total of 258 or 49 percent of those immigrating 
who have gone to these neighboring States. One hundred and twenty-nine or 
approximately one-fourth of the claimants filed a claim in 5 other States as 
follows : Alabama, 23 ; California, 23 ; Florida, 29 ; Michigan, 35 ; and New York, 
19. The remaining one-fourth of the workers migrated to 27 other States. 
Chart II (p. 6779), gives the distribution of workers by States who have migrated 
from Louisville. 

The industry of last employment of these claimants reveals that 34 percent 
were employed in manufacturing, 28 percent in wholesale and retail trade; 11 
percent in construction ; 11 percent in service ; 5 percent in transportation, com- 
munication, and utilities ; and the remaining 16 percent scattered among other 

Table VII.— Migrants from Louisville classified by industry of last employment 
and by State of immigration — Interstate claim file of Kentucky unemployment 
Compensation Commission, July 19^0 to May 19\l 

Industry of last employment 



















































California .. 




















































North Carolina 





















3 16 











Total „ 













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A few definite conclusions as to the extent and characteristics of the migrant 
situation in Louisville, Ky., may be derived from the previous sections of this 
report. These conclusions are summarized briefly in the following paragraphs. 

Workers began migrating to the Louisville area in noticeable numbers during 
September 1940, the month in which the Du Pont Co. began construction of their 
powder plant. Construction activities on this project and other defense projects 
in the vicinity of Louisville have been responsible for increased employment op- 
portunities which attracted the migrant workers. It is estimated that there 
were approximately 15,000 migrant workers in the area in May 1941. Accord- 
ing to the data from records of applications with the employment service 83 
percent of the migrants were men and 17 percent were women. Of those workers 
who secured employment 92 percent were men and 8 percent were women. The 
workers were distributed between the ages of 17 and 64 with approximately 89 
percent from 20 to 49 years of age. About 22 percent of all migrants included 
in the study were between the ages of 25 and 29, and 25 percent of those mi- 
grants who secured employment were between these ages. Only 3 percent of 
the 1,028 migrant workers studied were Negroes and the percent in the group 
that were foreign-born was insignificant. Seventy-three percent of the men in 
the group were married and of the women who are seeking employment 50 per- 
cent were married. 

The workers coming into Louisville were distributed among all the occupational 
groups with a concentration of 42 percent in skilled labor. One-half of the mi- 
grants who obtained employment were those having skilled occupations, prin- 
cipally carpenters, millwrights, painters, mechanics, and construction foremen. 
It appears that employer specifications with regard to occupational skills and 
experience have been lessened since one-half of the total workers and approxi- 
mately 21 percent of the skilled group had less than 5 years of experience. How- 
ever, no relaxation of employer restrictions with regard to race and nationality 
can be noted previous to May 1941. 

It appears to be reasonable that the movement to the area was a response to 
increased employment opportunities due to construction activities in the national- 
defense program, and that it was stimulated primarily in response to rumor, 
advertising and labor scouting, although workers were recruited by the union 
locals and the public employment service. It may be noted that 30 percent of 
the migrants who were placed by the Employment Service were in the unskilled 
occupational group. Since there was no recruitment of workers through clear- 
ance procedures by the Employment Service of this type of workers, this fact 
substantiates our conclusion that the number was stimulated by rumor and 

Approximately 88 percent of the employing of migrant workers who were 
placed by the Employment Service was in construction work. This may be 
attributed to the decided preference shown by local employers for residents and 
there has been no shortage of industrial workers locally except in a few occu- 
pations such as tool and die makers, journeymen machinists and certain types 
of machine operators. Of the estimated 15,000 migrant workers in the area 
in May 1941, approximately 13.000 were currently employed, 95 percent of them 
in the construction industry. Not more than 5 percent of the 2,000 unemployed 
migrants could be considered to be stranded without funds. 

Work created by the national-defense program has attracted these workers 
from all sections of Kentucky as well as from all States of the Nation. About 
42 percent of the migrant workers came from other States with 55 percent 
from the neighboring States of Indiana, Ohio, Tennessee, and Illinois. The ma- 
jority of the workers migrating to Louisville from other sections of Kentucky 
were from areas of practically no industrial activity. 

A check of the claims file of the Kentucky Unemployment Compensation 
Commission gave a total of 525 claimants who listed their last employment 
in Louisville. These workers migrated to 36 States with approximately one-half 
to the neighboring States of Indiana, Ohio, Tennessee, and Illinois. About one- 
third of the claimants had been employed in manufacturing industries and 
slightly more than one-fourth in wholesale and retail trades. 



The Chairman. We have analyzed 3^our statement, Mr. Altmeyer, 
and we think it is a very valuable contribution. In conducting these 
hearings we break our information down into questions because other- 
wise we get a great deal of repetition. We have, therefore, prepared 
some questions which I think will bring out the things we desire to 
have brought out. Then, if there is anything you want to add after- 
ward, you will be given permission to do so. 

Mr. Arnold. Mr. Altmeyer, you might start by briefly describing 
the national picture of defense migration — could you do that? 

Mr. Altmeyer. The general picture, I think, has been covered to 
some extent by Mr. Hillman, and I think Mr. Taft touched on it. 

The Chairman. Have you anything to add to that? 

Mr. Altmeyer. I haven't anything to add to it except what is con- 
tained in my manuscript. 

Mr. Arnold. Well, you covered that very thoroughly in your manu- 

Mr. Altmeyer. Yes, sir. 


Mr. Arnold. What percentage of total industrial placements in the 
past year were made through the Employment Service? 

Mr. Altmeyer. We don't have the exact figure because we would 
have to know the new hires in all industry throughout the country 
in order to determine what percentage of new hires was made through 
the public employment office. 

My judgment is that it is now running about 15 or perhaps 20 
percent of the total. 

Mr. Arnold. What have been the main difficulties in the function- 
ing of the State employment service? I will just say that the com- 
mittee was frequently told in New Jersey and in Maryland that many 
employers were not using the employment service in hiring most of 
their workers; by contrast the committee was told in Connecticut 
that one-third of the placements in defense industries have been made 
through the employment service. In what States is cooperation with 
employers least developed ? 

Mr. Altmeyer. Well, it is very spotty. Now, there is a neighboring 
State that I would prefer not to name, a State neighboring to Con- 
necticut, where the placements have been very, very small in propor- 
tion to the new hires. I think that was due partly to a lack of 
understanding on the part of employers of the advantages of using 
the employment office and partly because of the inability of employ- 
ment offices in that State to do a 100-percent effective job of place- 

Fortunately, in that particular State they have made rapid progress 
over the last 2 months, and I think the situation will be much different 
in the future. But it takes a long time for employers, and workers, 
too, for that matter, to realize that the employment service is an 
effective instrument for bringing the man and the job together. 


The statistics show that there has been a, great deal of progress made 
in the last 6 years, since the advent of the social-security program, 
because automatically social security, in the field of unemployment 
compensation, brings the jobless man to the employment office, where 
he must register as a condition for receiving benefits. 


This automatically brings the employers into contact with the em- 
ployment office because they have to make certain reports in connec- 
tion with unemployment compensation. In this manner they come to 
realize that the employment office isn't just a place where inefficient, 
down-and-out workers register, but is now a place where workers 
come who just left a job, thereby demonstrating their ability to hold 
a job. This has had a very stimulating effect on the use of the public 
employment-office system. 

The Chairman. I know, Mr. Altmeyer, that we have received many 
letters relating to employment, and we tell the writers to register with 
the employment office. Then we receive letters back stating that they 
don't get any action at all, although some of them we personally know 
are qualified. 

I have often wondered if there is any check made on unemployed 
lists to keep them moving, or if they just lie there dormant. 

Mr. Altmeyer. No. There is a procedure whereby the worker is 
asked to renew his registration periodically and there is an additional 
procedure whereby the active file is carefully combed and cross- 
indexed so that a worker has not only a chance at one particular kind 
of a job but any other kind for which he may have developed an 
experience or a skill. 

5,000,000 still registered at public employment offices 

Now, of course, with 5,000,000 people still registered for work at 
the public employment offices, there are going to be a great many who 
are not placed and who are therefore disappointed. 

It is all a matter of relative skill and availability for a particular 
job and the employment office necessarily tries to refer the best trained 
with the best experience, which, of course, means that there will be a 
number who will be disappointed. In fact, there will be more dis- 
appointed than there are satisfied until our unemployed population 
decreases to a much lower level. 


Mr. Arnold. In your paper you speak of a national system of em- 
ployment agencies. Obviously the present system, completely de- 
centralized on a State basis, has many difficulties. 

For example, the attorney general of South Carolina recently ad- 
vised the South Carolina State Employment Service that it could not 
make referrals outside the State. Has the Bureau of Employment 
Security run into any widespread resistance by State employment 
services to referring workers to out-of-State jobs? 

Mr. Altmeyer. I wouldn't say it is widespread, but we have run 
into difficulties. I think that as the national-defense program has 


seeped into the consciousness of the people and the State officials of 
the employment service, the tendency to take a restricted view of the 
labor market is declining and, in some States, has completely disap- 

However, there are still some States and localities — in fact, I think 
a considerable number — which may prefer, or feel it is their obligation 
to their community and State, to comb their own territory for appli- 
cants, even though it means going two or three hundred miles, rather 
than go across the State line, which may be only 5 miles, to get men 
to fill job openings. 

The reverse is also true : When they have a surplus of skilled workers 
that they think they will need at some time in the future, they are 
reluctant many times to fill requests coming from other States or other 
communities in the State for that type of worker. But the figures 
show that our clearance mechanism is being stepped up in its operation 
and its results, and my recollection is that the last figures show that 10 
times as many persons have been placed through the clearance during 
the recent months as compared with a year ago. By clearance I mean 
the arrangement between the offices in the States for the transfer of 
workers from one community to another. 

But I think that even if you had a nationally operated system 
there would be still a tendency on the part of the local office man- 
agers to do their best to find local labor, and that is of real advantage 
because we don't want migration. If we have to have migration, we 
want it kept to a minimum and we want it in an orderly and planned 


Mr. Arnold. Does the Bureau of Employment Security propose to 
exercise more control in the future over the functioning of State serv- 
ices? I believe you have appointed regional directors. 

Mr. Altmeyer. Yes. We have implemented the clearance system 
that I have mentioned more effectively in the last year or year and a 
half. Just recently, in cooperation with the O. P. M., we worked out 
an arrangement whereby there will be regional labor-supply officers, 
who will cooperate with the other agencies engaged in training and 
that sort of thing, to facilitate the placement of workers in defense 

I wouldn't necessarily call that control. I would say increased 
cooperation and assistance to the States. 

Mr. Arnold. Do you think it is desirable to abolish the present State 
agencies and reorganize the entire employment-service set-up on a 
completely Federal basis ? 

Mr. Altmeyer. I think that is a question which will require an 
answer partly on the basis of what the future of the unemployment 
insurance system is, and as far as that is concerned what the future of 
the whole social-insurance program is. 

As long as unemployment compensation is on a State basis there are 
difficulties in placing the Employment Service on a national basis, be- 
cause, as you know, the claims for benefits under the State employment- 
compensation laws must be made through these public employment 


Now, if these offices were under the auspices and management of Fed- 
eral officials, it would be necessary to work out a plan of collaboration 
so that the Federal officials acted as the agents for the States. I think 
it is a pretty large question to answer categorically at this time. 


Mr. Arnold. Has your office observed any discrimination with the 
State employment services themselves in referring Negroes, Jews, or 
aliens to jobs? 

Mr. Altmeyer. I think there is no widespread discrimination by 
the employment offices themselves. In fact, I couldn't state offhand 
that there is a single employment office now which could be accused 
of discrimination. 

There is, as you have learned through testimony in other cities, 
reluctance on the part of employers to use these workers and employ- 
ment offices many times, either because of specific requests by the 
employer or because they know from past contact with the employer 
that they won't take persons of particular classes. This raises a very 
difficult question of public policy. Should you refuse to send any 
workers to an employer who doesn't want to use persons in these 
categories? I don't think that question of public policy has been 
thoroughly explored and decided at this particular moment. 

If you don't refer workers to a defense employer and production is 
held up, then you have hurt the defense program. On the other hand, 
if you do refer these or other persons whom employers will not take — 
these persons in the discriminated class — you are not carrying out the 
policy expressed by the President and the Office of Production 

It places the local offices, in other words, in a very difficult position 
as to what to do. 

Mr. Arnold. Do some State employment services indicate religion 
on their application forms or in their referrals, and, if so, why do 
they do so ? 

Mr. Altmeyer. I think some do. 

Mr. Arnold. Do you know how many States do that? 

Mr. Altmeyer. I can't recall offhand the number of States, but 1 
imagine you would find a half-dozen or a dozen which did. 1 I think it 
grew up pretty largely when the employment offices were furnishing 
casual workers and domestics as a large part of their placements. In 
the case of domestics, oftentimes the prospective employer wants a 
person of a particular religion, because he will be working in the home, 
and naturally there is a desire for someone of the same faith. 

I don't think religion is used as an instrument of discrimination, 
though, in the referrals. 

Mr. Arnold. That doesn't apply to industry ? 

Mr. Altmeyer. No; in some cases there is a request by employers 
that persons of a certain faith be sent them or persons of a certain 
faith not be sent them, but that is not as widespread as the other 
classes of discrimination that you have mentioned. 

1 See "Exhibit 33 — Religion as a Factor in Employment," Baltimore hearings, p. 6279. 



Mr. Arnold. The word "shortage" appears and is used much in 
these hearings. When you or any other expert in the labor market 
uses the term "shortage." what is meant ? 

Mr. Altmeyer. Well, it means that at a particular time and at a 
particular place it is difficult if not impossible to find workers meet- 
ing the specifications of employers. 

Now, these shortages are not absolute shortages. They can be 
relieved in a great many ways. They can be relieved by the em- 
ployer's relaxing his specifications, as there has been a tendency to 
do over the last year or year and a half — that is, insofar as age and 
previous experience are concerned — and the employer can relax his 
specifications if he reorganizes his production processes so that he 
makes more effective use of the all-round skilled workers and places 
the semiskilled workers in positions previously occupied by the all- 
round skilled workers. "Shortage" is a relative term. 

It is going to become a more and more absolute term as the demand 
for skilled workers in particular lines increases. We have, I think, 
very serious shortages in a great many of the skilled occupations, 
necessary for national defense at the present time. 

Mr. Arnold. What new sources of labor supply did the registration 
campaign of the Spring of 1941 uncover? 

Mr. Altmeyer. Well, I don't know just what the break-down would 
be. I doubt whether the characteristics of the people who registered 
as a result of the campaign are very much different from the charac- 
teristics of the persons already registered so far as previous experi- 
ence is concerned. But I couldn't answer that correctly without a 
detailed analysis of the complete registration. One result of the 
campaign was the removal from the registers of workers who had 
not been keeping their applications alive by reregistration. Taking 
into account the placements that were made in the interval, we had r 
at the end of that campaign for new registrations, about the same 
number registered as we had at the beginning. 

Mr. Arnold. Can you estimate what percentage of the available 
labor reserves is registered with the employment services ? 

Mr. Altmeyer. Well, it depends upon what is meant by reserves. 
If you included in reserves people not now in the labor market and 
those not having been in the labor market for some time, such as 
women and part of the family help on farms, that would be one 
thing. I think we have large potential resources in these two classes- 
If you take only those persons who have been active in the labor 
market during the last 2 or 3 years I think the registrations at the 
public employment offices represent a very large proportion. I 
couldn't give you any exact percentage of unemployed persons at 
the present time, however. 

The registrations run about 5,000,000. Some of those registrations 
are by persons who have physical handicaps and are really not 
employable persons. On the other hand, there are some employable 
persons who have not registered. My belief is that the total number 
registered at the Public Employment Offices is close to the total 
number of unemployed persons actively a part of the labor market 
at the present time. 



Mr. Arnold. Now, with reference to farm-labor shortages: The 
constant rumors and news stories of acute farm-labor shortages have 
been of considerable concern to the Committee in its current series of 
hearings. To your knowledge have there been any real farm-labor 
shortages ? 

Mr. Altmeyer. Yes ; I think there have been, and I think we have 
been able to meet the shortages by pushing the farm placement end 
of our service, but I think that the farmers have had difficulties in a 
great many sections in getting help. 


Mr. Arnold. Would you outline for us the new area organization 
of the State Farm Placement Services for the committee? 

Mr. Altmeyer. Well, I would have to call Mr. Hollenbeck on that, 
Mr. Congressman. I think he is here, and maybe you would want 
him to answer that question at this point. 


Mr. Hollenbeck. On the Farm Service we tie all of the Farm 
Services by States in through the regional representatives, so that it 
is all tied in with the regular employment-service work, and then 
we have available Federal farm supervisors who cover areas or re- 
gions to assist the States, not only in setting up their planning within 
the State, but to help them in clearance over State lines of shortages 
of farm workers. 

For example, within the last 2 months we cleared 1,000 farm 
workers from California to Oregon for berry picking. Those work- 
ers will be continued in use in farm work by the Oregon State 
Employment Service over a period of probably seven or eight months. 

Does that answer your question ? 

Mr. Arnold. Yes; that answers it very well. 

I have another question along that line. When the labor sub- 
committee of the State Land-Use Planning Committees reports that 
a shortage exists, does the Farm Placement Service make any inde- 
pendent check on the asserted shortage ? 

Mr. Hollenbeck. Yes. Usually, of course, in the Land-Use Plan- 
ning Committee the subcommittee on farm labor always has a repre- 
sentative of the State Employment Service on that same committee 
and the same thing is true in the county committee. The manager 
of the local employment office is also a representative on that farm 
committee, and farmers are usually on that committee too, so that 
we have a fairly accurate check of the labor shortage within a local 
community. Then, in addition, the Employment Service has its own 
sources of information for checking on farm labor, and sometimes one 
of the things we have to watch for is that the farmer doesn't over- 


emphasize his need for labor. He likes to have a little surplus on 
hand, as you know, so he can take care of his requirements. The 
Employment Service has to check on his actual needs. 

Now, where we have developed that to the greatest extent, the em- 
ployment offices actually know how many acres of cotton a particular 
farmer has and therefore know how many workers he needs to pick 
it within a certain length of time, so that in this way there is a check 
by the Employment Service on requests from farmers. 

But that Land-Use Planning Committee and the labor subcommit- 
tee will do a lot to bring all of the groups together so that they will 
have a full knowledge of the needs of the farmer with regard to 
labor, and, where labor is available, whether it must be moved over 
State lines in order to fill the labor requirements. 

I think the farm-labor shortage will be more acute next year. 



Mr. Arnold. Now, Mr. Altmeyer. can you tell me what are the 
present difficulties with the various State unemployment-compensa- 
tion laws and what basic changes in the Federal law your Board 
cares to recommend? 

Mr. Altmeyer. Well, the Board believes that the present unem- 
ployment-compensation laws are not fulfilling their basic purpose of 
providing adequate unemployment compensation for persons who be- 
come unemployed through no fault of their own. 

As you know, unemployment compensation is payable only if a 
person becomes involuntarily unemployed. The trouble with a great 
many of the State unemployment-compensation laws is that there is 
too long a waiting period — usually 2 weeks and in some cases 3 
weeks — before a person can draw any benefits. Then it takes a week 
or so to process his claim after that waiting period is up, so it may 
be a month after he first becomes unemployed before he draws any 
money whatsoever by way of unemployment compensation. 

Then, too, some of the formulas for calculating the weekly benefit 
amounts are such that they do not result in compensation for a rea- 
sonable proportion of his wage-loss. Thirdly, and this is rather 
general, the States do not provide unemployment compensation for 
a sufficient length of time, so that the beneficiary's unemployment 
period between jobs is compensated. 



Our figures show that, on the average, about 50 percent of the 
claimants exhaust their unemployment-compensation benefit rights 
before they find another job. 

In some States this number has inn as high as SO percent. That 
last defect is the major defect in unemployment-compensation laws. _ 

Mr. Arnold. Then the last part of the question: What basic 
change in the Federal law does your Board care to recommend ? 


Mr. Altmeyer. Well, we are just in the process of getting our 
recommendations into shape. They must be cleared by the Bureau 
of the Budget, and I prefer to defer answering that question until 
a later time. 


Mr. Arnold. Would you describe for the committee the Board's 
proposal for a fourth category for grants-in-aid for general relief? 

Mr. Altmeyer. Well, that is very simple so far as the drafting of 
the law is concerned, and I think relatively simple so far as the 
administration of the law at the Federal level is concerned. It would 
be merely a fourth category written along the same lines as the pres- 
ent three categories. That is, it would be a grant-in-aid program 
and the grants would be made to the States upon the same conditions, 
essentially, as the grants for old-age assistance, blind assistance, and 
aid to dependent children. 

Of course, in connection with a fourth category, as well as in con- 
nection with the present three categories, the Board recommends that 
larger Federal grants be made to States with low per-capita incomes 
than to States with a high per-capita income. 

The Chairman. It would be variable? 

Mr. Altmeyer. That is right ; yes, sir. 

The Chairman. Because some States simply can't do the matching? 

Mr. Altmeyer. That is right. 

Mr. Arnold. What would be the settlement requirements, or would 
all settlement requirements be eliminated ? 

Mr. Altmeyer. Well, that is a difficult question. My personal opin- 
ion is that there probably ought to be some settlement law as regards 
these categories — such as old-age assistance, blind assistance, and aid 
to dependent children — but probably not for more than a year. 

But in connection with general relief, it seems to me you would 
defeat a great deal of the purpose of general relief, particularly in 
this period when we have such great migrations as a result of the 
defense program, if we had settlement laws that would interfere with 
the quick and adequate granting of relief to these people when they 
reach a strange community. 

Therefore, I believe that as a condition of grants-in-aid for general 
relief the States should probably be required to eliminate settlement 
laws, or if they retain settlement laws, to make some special provision 
so that while the localities might not have to bear the burden, if the 
person didn't have legal settlement, the State would undertake to 
do so. 


Mr. Arnold. Millions of workers are now losing settlement in mi- 
grating to defense jobs. When defense is over they may not have 
gained settlement in their present state of employment. May we not 
reasonably expect that the problem of the nonsettled person will be 
one of our primary post-defense problems? 

Mr. Altmeyer. I believe that is true. 

Mr. Arnold. If the defense worker, although working in another 
State, still does not lose his previous settlement, is it fair to ask the 
State which did not receive the benefit of his defense employment to 


care for him in the period of unemployment which will accompany 
the shift from our wartime to a peacetime economy? 

Mr. Altmeyer. Well, I think it is fair. I think if the Federal Gov- 
ernment comes into the picture by way of sizable grants-in-aid to the 
States because it is considered a national problem, then this question 
of which State is going to bear the burden in particular instances will 
be a secondary one and should be disregarded. Otherwise, you will get 
into all sorts of complications. 

Mr. Arnold. That is all I have, Mr. Chairman. 

The Chairman. Dr. Lamb. 

Dr. Lamb. That is, assuming that your proposal for the fourth 
category goes through? 

Mr. Altmeyer. Yes ; of course. 

Dr. Lamb. And if it does not? 

Mr. Altmeyer. Then I can see the objection on the part of the State, 
which has a great deal of validity — that they should insist that the 
State enjoying the use of this man's services during defense production 
ought to help out when he becomes unemployed. But as a practical 
matter, you would never get that State to do it if the man had 
retained his legal residence in the original State. 

Dr. Lamb. In other words, the large scale of migration of workers 
from certain States w T here defense activities are limited to States of 
high defense activity, with the prospect that they will not gain set- 
tlement in the State of high defense activity but must return home 
when it is over, is an argument for the fourth category in your 
estimation ? 

Mr. Altmeyer. Yes, indeed. 

Dr. Lamb. That is all. 

The Chairman. Mr. Altmeyer, I have one question to ask you. 
As you know, this committee during the last session of Congress 
travelled throughout the United States investigating the migration 
of destitute citizens. The Congress continued the committee because 
of the increased migration resulting from the national-defense pro- 
gram. Of course, what we are concerned with now is national-de- 
fense migration. We have been to California, Connecticut, New 
Jersey, Maryland, and now here in Washington; and we are going 
out again to see how these migrants are getting along — their health, 
education, and so on. But what Ave are, of course, deeply interested 
in is what is going to happen after this emergency is over. 

There may be at that time millions of people unemployed who 
have gone into other States. Disregarding the settlement question 
for the moment, what cushion could you recommend or think of that 
would help out? I think you will agree with me, that if this con- 
dition comes about, it may be just as dangerous to our country as 
any attack from the outside would be. I think you can readily see 

Mr. Altmeyer. Yes. 

The Chairman. If these people who are now employed would 
save their money as a cushion against the post-emergency depres- 
sion, that would be an ideal way to solve the problem, but that must 
be done voluntarily. We can't use the words "compulsory savings" 
because if we do we get into trouble. Have vou given anv thought 
to that? 

60396— 41— pt. 17 S 



Mr. Altmeyer. My first thought turns to an expanded and all- 
inclusive social insurance system. I think that would in itself pro- 
vide a considerable cushion. I think that an all-inclusive social 
insurance system which would cover unemployment as it is covered 
now, but more adequately; that would cover old-age retirement as 
covered now but would cover it more adequately; that would cover 
survivors — that is widows and orphans in the case of the death of 
the wage earner — that would cover, in addition, permanent disability, 
temporary disability, and costs due to sickness ; such a system would 
afford a cushion which would amount, in a depression period follow- 
ing this defense effort, to, let us say, $5,000,000,000 or more per year. 

Now, that added to a well-planned public-works program seems to 
me to represent two ways that are feasible. 

There is a third one that has been suggested in which I think 
there is a great deal of merit, and you may have had that in mind 
when you touched on the compulsory approach: That is, compulsory 

Now, if a system of compulsory savings were initiated, this all- 
inclusive insurance system I have mentioned would be a great ad- 
vantage, because it would prevent the savings of these workers during 
this period from being spent, so that they would be available if a 
depression comes upon us. 

In other words, under a compulsory savings plan not supplemented 
by a social-insurance system, one would necessarily want to release 
the savings to a man who came upon hard circumstances due to sick- 
ness in his family or what not, whereas if you had a social-insurance 
system which insured him against those contingencies, you could 
keep his savings intact for him until the depression period was over. 

The Chairman. You see, the end of this emergency period will 
probably find us with greatly reduced foreign markets. I think any- 
body will agree with that who reads between the lines in the news- 
papers today. But anyway it is a very serious matter, and to that 
end the President issued an Executive order for a survey throughout 
the United States looking toward just what you mentioned — to a 
public works program. But, of course, the trouble there may lay 
in lack of funds to be appropriated. In that case, the country is 
likely to be in a very dangerous situation. I think you realize that 
as well as anyone in the Federal Government, and I think what you 
have just said is very important. 

We had a witness at San Diego who testified to the fact that there 
were some plants in Connecticut where saving systems were in oper- 
ation to take care of the situation. When we got to Connecticut 
we couldn't find out anything about such a system. 1 Some plants have 
inaugurated a voluntary savings plan on the part of their employees 
and deduct a certain amount of money from their pay each week. 
But I say again, at the end of this emergency period, if the person 
has something coining to him, that is the real cushion — and after all 
is said and done that is what we need. 

Mr. Altmeyer. That is right. 

The Chairman. Is there anything else? 

Mr. Arnold. That is all, Mr. Chairman. 

1 See San Diego hearings, p. 49B0, and Hartford hearings, p. 5028. 



Dr. Lamb. Mr. Osmers, who was unable to be here for your tesi- 
mony today, wanted to have you asked your opinion on an increase 
in the unemployment-compensation payments of those workers in de- 
fense industries, as contrasted to nondefense-industry workers. The 
reason being that the former find themselves in an industry where 
they can't expect employment when the defense emergency is over. 
What would be the feasibility of a proposal for an increased contri- 
bution, and ultimately an increased out-payment, to these people, not 
necessarily in the individual payments but over the period of a longer 

Mr. Altmeyer. Well, I confess I haven't been able to figure out any 
way in which I can single out persons and say, "These are defense 
workers and they should make an increased contribution and get 
increased payments." 

I think that it is all a defense effort. One kind of defense worker 
moves into another kind of work and it is hard to draw the line. I 
think if you are going to have anything like compulsory savings you 
should apply it generally and not try to isolate it because, you will 
get plants, for example, where some part of production is devoted to 
defense, and a worker in that plant may turn up a nut or turn out 
screws which may be used on nondefense as well as defense produc- 
tion. How to figure out in that case how much of his wages should 
be assessed for compulsory savings is an administrative problem I 
haven't been able to solve to my own satisfaction. 


Dr. Lamb. I wanted that for the record. There is a second question, 
which has to do with your own prepared statement. If you have a 
copy of it there, I would like to call your attention to pages 33 and 
34, reading you portions of each page and asking you to comment on 
them. I am quoting from page 33 : x 

I hope the Congress will give concerted and continued attention to the need 
for a comprehensive program designed to spread more evenly and more equitably 
the economic burden of ill health, the most important gap in the present frame- 
work of social security. 

And on page 34 : 

* * * there is no reason why a plan cannot be evolved which will preserve 
the patient's right to choose his doctor. 

Indeed, I believe it is possible to develop a plan which will make it possible 
for a great many patients to exercise that right for the first time. The present 
trouble about free choice of a doctor is that so many people have neither a 
choice nor a doctor. 

Would you care to comment further on that statement with respect 
to the feasibility of that proposal and any implementation you may 
have in mind ? 

Mr. Altmeyer. Well, I think it is perfectly feasible, as the experi- 
ence of other countries has demonstrated, to work out a plan for 
spreading the cost of ill health. Now, the cost of ill health breaks 
down into two parts: Part of it is the loss of wages due to ill health— 

1 In this volume, p. 6737. 


what we call disability compensation — and that is in a different cate- 
gory. At least three- fourths of the cost of ill health, however, is the 
cost of obtaining adequate medical care and services, and there is 
where you get into an area involving a great deal more discussion 
and, shall I say, differences of opinion. I think there is pretty gen- 
eral agreement that it is feasible to compensate for the wages lost 
due to illness. 

When you come to the other aspect of the situation you get into 
questions of professional standards and professional relations, and 
there is a great difference of opinion existing at the present time as 
to what arrangements should be made and what professional standards 
should be incorporated in any system which would spread the cost of 
medical services. 

My feeling is that it should be possible to work out a plan for 
compensating the persons who perform those services — doctors, 
nurses, and hospitals — in such a way that it not only brings to the 
patient more adequate medical services, but brings to those persons 
who furnish that service more adequate compensation. 

Now, whether that should be on a national basis or on a State 
basis I think is another question. That question should be thoroughly 
explored. That, again, to my mind is dependent upon the future 
shape of the social-insurance system of this country as a whole. 

That is, you can make an argument for attaching a plan to provide 
compensation for wage loss due to disability to Unemployment Com- 
pensation, at least in part; or you can make an argument for attaching 
it to Old Age and Survivors' Insurance. But I think that is a sec- 
ondary question. I think if we were once agreed that it is possible to 
work out, say, an arrangement with the professional persons concerned, 
the administrative arrangement and the governmental agencies which 
would be utilized could be decided comparatively easily. 


Dr. Lamb. In connection with the developments which you suggest 
might take place here during this emergency period, can you tell the 
committee anything about the experience of England since the British 
went to war? 

Mr. Altmeyer. Well, of course, as I indicated in my manuscript, 
Britain liberalized its unemployment -compensation law — it liberalized 
its workmen's compensation law; it provided supplementary old-age 
assistance payments; it provided compensation for injuries due to 
enemy action and loss of property due to enemy action, whether or 
not the person suffering the loss was in the employ of the Government 
at the time. It has extended its social-insurance benefits to include 
persons in the armed forces, so that they not only do not lose or have 
their benefit rights reduced, but actually have them increased by 
reason of service in the armed forces. 

We in this country have not yet undertaken to do one fraction of 
what Britain has done, not as a mean of placating the citizens of 
Britain but as a means of strengthening the citizens to fight the battle 
of Britain. 

Dr. Lamb. In that connection would you advocate that the Federal 
Government take measures to extend to the armed forces the advan- 
tages of the social-insurance arrangements we now have for civilians t 


Mr. Altmeyer. Yes, sir. 

Dr. Lamb. What about the health insurance in the British experi- 
ence? I don't believe you mentioned that. 

Mr. Altmeyer. Well, I think the British Medical Association be- 
lieves that its national health insurance plan has improved the quality 
and quantity of medical services rendered the population of Britain. 
The best evidence that the British Medical Association does believe 
that this has been the result is that they are actively urging the ex- 
tension of the health-insurance system to provide greater benefits and 
to include members of the worker's family. 

Dr. Lamb. That is all. 

The Chairman. We thank you very much, Mr. Altmeyer. You 
have presented a fine statement and it will be quite valuable to us. 
We appreciate your coming here. 

The committee will stand adjourned until 2 o'clock. 

(Whereupon, at 12:30 p. m. the committee recessed until 2 p. m.) 


The committee met at 2 p. m. 

The Chairman. The committee will please come to order. 
Mr. Reporter, this is Mr. Noel Sargent, secretary of the National 
Association of Manufacturers. 


The Chairman. Will you please give the reporter your full name 
and the capacity in which you appear here today? 

Mr. Sargent. Noel Sargent, secretary of the National Association 
of Manufacturers. 

The Chairman. Mr. Sargent, the committee is very pleased to 
have you here today to present a paper on behalf of the National 
Association of Manufacturers with respect to the problem of defense 

I think you will be interested to know that the committee, at its 
recent hearings at Hartford, Trenton, and Baltimore, formed the 
opinion that the outstanding testimony on the subject of community 
problems and labor-supply problems created by national-defense 
migration was given by representatives of employer groups. 

At the Hartford hearing the committee had the benefit of a com- 
prehensive statement from the Manufacturers' Association of Con- 
necticut, and at Baltimore from the Association of Commerce. We 
are glad to have at our Washington hearings an opportunity to hear 
from you in your capacity as the representative of the manufacturers 
as they are organized nationally. Congressman Arnold has a few 
questions to ask you, Mr. Sargent. 

(The paper referred to above is as follows :) 


Position and Recommendations of National Association of Manufacturers on 
Pkoblems of Defense Migration 

1. The National Association of Manufacturers has undertaken surveys in the 
months of January, February, April, and May of companies having defense 
contracts. A different group of companies was covered in each of such surveys. 
The following percentages of companies surveyed have reported shortages of 
skilled labor : 

Percent Percent 

January 45 April 41 

February 55 May 56 

Because there has been a great deal of discussion in recent months of the 
possibility of industry going on a 24-hour, 7-day basis, we also asked these 
companies whether they would have a shortage of skilled labor if an effort 
were made to operate on such a 168-hour-week basis. The following per- 




centages of companies with defense contracts indicated that they would have 
a shortage of skilled labor if they attempted to so operate : 



___ 76 


January 73 

February 88 

2. We have no statistical information as to competition between employers 
"for workers where the labor supply is inadequate." I wish to advise, however, 
that the National Association of Manufacturers has through its board of directors 
taken the following position with reference to this : 

(a) Employers should cooperate with each other, and with Government and 
employees, in endeavoring to encourage workers engaged in defense production 
in one area to remain in such areas. Such shifting is uneconomical since it may 
involve unnecessary double training of workers, may encourage spiraling of costs 
and prices, may create special housing troubles in many communities, and may 
add to the problems of present defense production and post-defense reconstruc- 

(&) The problem of an adequate and efficient labor supply is of primary con- 
cern to manufacturers today. Many employers are losing capable employees to 
other employers, as well as to the Government, and replacements are difficult. 
Expanding organizations suffer through inability to augment their present forces 
by capable additions. Under these circumstances, the following suggestions 
should be helpful toward bringing about an understanding of the present situa- 
tion and in centering thought on ways and means that may help to solve the 

While the emergency is a national one, the labor problem is essentially a 
local problem, and to the extent that manufacturers can work out their problems 
locally, the national objective will be facilitated. 

The prosecution of the defense program is not necessarily helped by the 
movement of employees from one defense industry to another, because obviously 
the total employment is not increased. As a matter of fact, operations are 
slowed down because of the probable lower efficiency of employees in new em- 
ployment as against their efficiency in their old employment. 

Employers in nondefense industries would do well to reconcile themselves to 
the probability that some of their employees will be taken by defense industries. 
It seems obvious that the necessities inherent in the defense industries may 
bring forth financial inducements to employees which employers in nondefense 
Industries will not or cannot meet. 

The foregoing consideration will vary in degree in localities. Joint meetings 
of employers locally are suggested for the purpose of spreading a common appre- 
ciation of the situation and exploring the opportunities for cooperation with the 
objective of prosecuting the defense program most effectively and with the least 
detriment to all. In such discussions, while emphasis may be placed upon the 
primary importance of the defense industries, the desirability of facilitating 
defense production with the least disruption of nondefense industries may prop- 
erly be considered. 

Out of the experience of several communities and those of manufacturers who 
have for some time faced this problem and, with varying degrees of success 
solved it, a review of some of the approaches that have been found helpful may 
be of assistance to others. 

We therefore make these recommendations : 

(1) In the recruiting of new labor we believe employers should first make use 
of all available agencies within their community whose primary concern it is 
to supply employees, including Federal, State, and manufacturers' employment 
services ; and further, that employers should utilize all available local labor 
resources before resorting to the recruiting of additional labor from outside their 
local areas. 

(2) The use of intensive short-term job training to develop rapidly an ade- 
quate and efficient labor force. 

(3) The necessity for continuous apprenticeship training during this critical 
period to build up the nucleus of skilled labor essential to the welfare and 
progress of the country. 

(4) The use of upgrading. 

(5) The fullest use of vocational and trade-school facilities in the community. 

(6) We believe the use of such recruiting practices as advertising and general 


solicitation for currently employed workers does not expand the total available 
labor force and that these practices often disturb current defense production. 

3. With reference to the problem of training programs within industry, I sub- 
mit herewith as appendix A a memorandum analyzing the nature of training 
programs now being conducted by several companies with defense contracts. In 
addition, I wish to advise that our association has taken the following position 
with reference to the training of workers ; 

(«) One of the urgent problems in the Nation-wide effort to increase production 
for national defense is that relating to the rapid training of a sufficient supply 
of skilled labor. 

(b) Employers should endeavor to augment the supply of skilled labor in 
occupations where shortages now exist or are threatened. This involves an 
intensive training program to develop an adequate supply of workers able to 
perform specific operations and tasks to meet the emergency requirements of the 
national-defense program. 

(c) The task of training a labor force adequate to fill defense production 
requirements can most effectively be accomplished by industry itself, and we 
believe that the basic principles enumerated below may serve as a guide to 
management in meeting its individual training problem. 

It is recommended that consideration be given to these various factors that 
enter into a short-term training program : 

(1) That each company give some thought to the trade and vocational school 
facilities available in its community for the purpose of cooperating with such 
community efforts in a training program. 

(2) That the technique known as job training, insofar as it is practicable and 
feasible, serve as a basis for the training program. This technique, which is 
predicated on the breaking down of complex jobs into their single component 
operations, has in many cases proved successful as a means of providing short- 
term instruction to unskilled and semiskilled workers by teaching them on the 
machine how to perform efficiently the single task or operation that will be 
required of them. 

(3) That all trainees be instructed on the specific machines they will be re- 
quired to use on the job. 

(4) That all applicants be given ability tests to determine if they should be 
given the proposed training. 

(5) That adequate and competent instruction and supervision be made avail- 
able to them during the period of their training. 

(6) That employers give some consideration to the "vestibule school" technique 
that was developed during the World War for the purpose of training unskilled 
workers on the very threshold of the shop to familiarize them with various 
aspects of machine operation in a very short period of time. This method proved 
both practical and valuable during the war period in turning out reasonably 
competent machine operators in a comparatively few days' time. 

(7) That each company give some study to the intensive short-period training 
programs developed during the World War by the United States Committee on 
Education and Special Training. This committee developed high-speed training 
techniques based on the theory of teaching on the job through performance, 
questions, problems, and guided discussions. 

(d) In approaching the problem of short-term intensive training, we believe it 
is desirable to point out the difference between the training problem that exists 
in mass production industries and in those companies which are engaged in 
specialty work, by reason of the fact that the job training technique might prove 
both practical and feasible in building up the required labor supply for mass 
industries, but would prove unsatisfactory for the specialty plants which require 
all-around skilled mechanics for the largest part of their production work. 

(e) Another phase of the intensive, short-term training problem is the danger 
inherent in developing a substantial number of semiskilled workers trained in 
only one or a few of the single repetitive operations required for the national- 
defense production program, who will be unfitted for any other work when the 
emergency of the defense program is over. In this connection, we believe it to 
be desirable for all employers to give serious consideration to the possibility of 
affording such employees the opportunity of rotating from one job to another in 
the plant so that they may progress from simple jobs to more complex ones 
through a wider familiarity of production operations, and, further, that com- 
panies should extend what cooperation they can in making it possible for such 
employees to develop themselves into all-around mechanics. In this way such 


employees may be better equipped for peacetime work when the armament period 
is over. 

4. We have no information on subcontracting in its relation to labor supply. 
Based upon recent conversations on defense problems in about 35 communities, 
Mr. Fuller estimates that during the last b' months the extent of industrial 
subcontracting has doubled. 

5. The association has taken no official position with reference to various agen- 
cies specifically mentioned in your letter. Based upon contacts with many indi- 
viduals, the writer is, however, glad to give you his own ideas about the groups 
you specifically mention : 

(a) We believe that the Labor Division of the Office of Production Manage 
nient is doing constructive and effective work in its training program. 

(&) We have no information as to the training work of the Shipbuilding Sta- 
bilization Committee. 

(c) Such reports as we have, indicate that the effectiveness of the United 
States Employment Service varies considerably as between the different commu- 
nities and sections. 


Mr. Arnold. I presume the best method is to proceed by asking some 

Mr. Sargent. All right, sir. 


Mr. Arnold. And then you can bring out anything further you 

As we understand it, the National Association of Manufacturers 
feels that intensive training of labor within industry is the key to 
relieving labor shortages. Can you tell us what the National Manu- 
facturers Association has done to stimulate such training within 
industry ? 

Mr. Sargent. We have held a series of regional meetings — I think 
some 40 so far this year — in various communities and sections 
throughout the United States, in which we have urged upon em- 
ployers the necessity, among other things, of such training. 

In addition to that, in our bulletins, which go to our 8,000 members 
and to several hundred cooperating associations, we have also called 
attention to this necessity. In addition, we have undertaken a sur- 
vey of companies with defense contracts to ascertain the extent of 
such training. That survey was made available to the Labor Divi- 
sion of the O. P. M. 

Mr. Arnold. Do you know how many workers are actually being 
trained within industry as the present time? 

Mr. Sargent. No, sir; I know that a large majority of the com- 
panies with defense contracts are engaged in such training, but we 
have not questioned them on the numbers being trained. 

Mr. Arnold. We had testimony all through the East from manu- 
facturers who said that they were conducting such a program, but 
there is no way of getting at the figures on how many are actually 
being trained within industry? 

Mr. Sargent. No. Mr. Hillman made a statement the other day — 
I don't know whether it was in his testimony before this committee 
or not — in which he said, as I recall, that approximately 1.200,000 
had been trained. Whether or not that estimate was made as the 
result of a survey of his own division, Mr. Dooley's branch, I don't 



Mr. Arnold. How immediate is the prospect of a three-shift 7-day 
week production schedule for defense industries? 

Mr. Sargent. I think that it is difficult to give any general answer 
to that for this reason : I don't believe it is possible to have such a 
schedule for all industry whether it be defense industry or other 
industry. And that there has been a good deal of misconception 
as to the possibilities in that respect, there is no doubt. In the first 
place there are, of course, serious limitations of labor supply, as 
you have indicated. Secondly, there are other limitations, such as 
the difficulty of obtaining supervisory forces, the difficulties of tool- 
ing, of making repairs, of scheduling throughout the plant; and all 
of these are practical difficulties, which in the minds of many engi- 
neers make it impossible for a large number of plants, at least, to 
conduct three-shift operations. 

Mr. Arnold. In many plants production could not be increased 
materially with a three-shift day, could it? 

Mr. Sargent. I think that where it is feasible to have three shifts 
and where labor and supervision can be obtained it would tend to 
increase the production. 

Mr. Arnold. Well, I meant because of those limitations. 

Mr. Sargent. Because of those limitations it certainly isn't, upon 
a statistical basis, capable of increasing threefold over normal or 
anything like that, 


Mr. Arnold. Has your association observed much labor pirating? 

Mr. Sargent. Most of the information and statistics on that would 
of course be more within the field of survey and knowledge of the 
local associations in communities such as you have been in, rather 
than in our own association. 

We don't, ourselves, deal with problems of labor supply to par- 
ticular companies and therefore don't come in as close contact with 
things of that sort. 

I have, however, participated in meetings where there have been 
discussions of that subject, and I would say offhand that there is 
not at the present time as much labor pirating as existed during the 
World War. 

Mr. Arnold. I was going to ask you what your association is doing 
to prevent such practices. 

Mr. Sargent. We have taken the position that it is largely a matter 
to be dealt with in local communities. 

I know that in some communities they have taken action against 
advertising in papers, for example, and things of that sort. All we 
have done is to urge our members to utilize all available local sources 
of labor before going outside, including contacts with the State and 
local employment services. 


Mr. Arnold. The committee has heard much testimony on the 
Shipbuilding Stabilization Committee. What is your opinion of 
such stabilization agreements? 


Mr. Sargent. I think if such stabilization agreements are made on 
a realistic basis they can work satisfactorily, but the danger, of 
course, is that an agreement will cover such a wide area that it will 
create a wage-scale situation in some communities not necessarily 
characteristic of the average and general situation in the commu- 
nity. This would tend to attract labor from other industries and 
disrupt the labor market. 

If they can be and are made on a realistic basis, I think they can 
be very advantageous in preventing a flow of labor from one indus- 
try to another. They can meet that situation very nicely. 

I know of one example in a shipyard down South where a repre- 
sentative of other shipyards stood at their gates and enticed their 
workers as they came off shift. That sort of situation can be cor- 
rected by such an agreement. If, however, you have a situation 
where the representatives of nonshipbuilding industries are attract- 
ing workers from a shipyard or vice versa, you don't meet that sort 
of situation with a stabilizing agreement. 

Mr. Arnold. Of course the field is broken down into areas — I 
believe there are four of them — is that correct? 


Mr. Arnold. The committee is very much concerned about the un- 
employment created by priorities. Does the National Association of 
Manufacturers have any proposals on how workers should be shifted 
from nondefense to defense industries? 

Mr. Sargent. No, sir. We have endeavored to meet the situation to- 
some extent, however. We have suggested in this connected that 
industry committees should be established — and they may be set up 
in any governmental division — we understand there are several divi- 
sions which contemplate the establishment of such industry commit- 
tees — and that there should be, in connection with the priority end of 
it, anyway, a coordinating committee within these various industry 
committees to consider the effects of regulations and rules proposed 
in particular industries upon the different industries. In addition to 
that, we have suggested to representatives of the Office of Production 
Management and the Office of Price Administration and Civilian Sup- 
ply, that consideration be given to the effect upon employment of 
priorities rulings, particularly in communities where there may be 
only one or two large employers of labor who, if affected detrimentally 
by the result of priorities, would obviously contribute toward a situa- 
tion in this community far different from that in larger communities 
having a number of widely different industries. 

Mr. Arnold. Do you know how much unemployment has been cre- 
ated to date by priorities in the aluminum industry ? 

Mr. Sargent. We have made no survey of that. I have seen refer- 
ences to the fact that from a fourth to a fifth of the workers in civilian 
aluminum industries have been detrimentally affected, but I couldn't 
vouch for it, personally. 

Mr. Arnold. Do you have figures on any other industries? 

Mr. Sargent. No, sir. 



Mr. Arnold. The newspapers every day are discussing the proposed 
•cuts in the automobile industry. How drastic do you expect these cuts 
in car production will be and when do you expect them to be made? 

Mr. Sargent. Well, of course, I am not a representative of the auto- 
mobile-manufacturing industry and I am not technically familiar with 
that industry. 

Generally speaking, however, it seems to me that if we engage in a 
large-scale defense-production program, the cut in that industry and 
other civilian industries must become much greater than we have yet 
contemplated or planned. 

Mr. Arnold. Do you expect these cuts to be as much as 40 or 50 
percent ? 

Mr. Sargent. In some industries ; yes. 

Mr. Arnold. Probably in the automobile industry? 

Air. Sargent. Well, I shouldn't think it would be as likely in that 
industry as it would in some other consumer-goods industries. 

discrimination in defense industries 

Mr. Arnold. Has your association recommended to its members 
that they absorb local Negro labor before bringing in outside labor? 

Mr. Sargent. We have recommended to our members that thej 
utilize all available sources of labor without discrimination of any 

If you will permit, I have a statement with reference to this problem 
of Negro labor, which I should like to read and have inserted in the 
record, because of the fact that there has been some public discussion 
and comment concerning that. I thought it would be advisable to 
prepare a statement in anticipation of the event that I might be asked 
a question on that very subject. 

Mr. Arnold. Very well, will you proceed with it? 

Mr. Sargent. Much has been written and more said, recently, by 
Government spokesmen decrying discrimination against some of our 
citizens because of their race, color, or religion, and so forth. On June 
25 the President of the United States said '[reading] : 

It is the policy of the United States to encourage full participation in the 
national-defense program by all citizens of the United States, regardless of race, 
creed, color, or national origin, in the firm belief that the democratic way of life 
within the Nation can be defended successfully only with the help and support of 
all groups within its borders. 

and the President said further : 

I do hereby reaffirm the policy of the United States that there shall be no 
discrimination in the employment of workers in defense industries or Government 
because of race, creed, color, or national origin, and I do hereby declare that it is 
the duty of employers and of labor organizations, in furtherance of said policy, and 
of this order, to provide for the full and equitable participation of all workers 
in defense industries, without discrimination because of race, creed, color, or 
national origin. 


On April 23 Sidney Hillman, the Codirector of the O. P. M. and 
chairman of one of the country's most highly organized and tightly 
knit labor unions, said : 

Discrimination against any workers because of race, creed, or color must be 
eliminated. Any such practice would be especially unfortunate at the present 
time when we are seeking both to extend and energize the practical working of 
democracy as a means to quicken our all-out defense effort. 

Now, of course, the implication to be drawn from these statements is 
that the only discrimination prevailing exists in industry and that it is 
particularly shocking because it is found principally in defense-pro- 
ducing industries. 


It is evident that the shortage of skilled and semiskilled workers is 
rapidly becoming one of the bottlenecks in the national-defense pro- 
gram, and it is probable that this shortage will increase in coming 
months, as I believe Mr. Nelson testified before this committee yester- 

In this defense work, and in the work of supplying the needs of the 
civilian population, there is great opportunity to employ those who are 
now out of work, who have skill and capacity, or who can secure skill 
and capacity, perhaps by training methods such as we were discussing. 

It is true also that some of the unemployed hesitate to offer their 
services, believing that there are prejudices on the part of employers 
against age, sex, race, color, or creed. 


The National Association of Manufacturers has advised its members 
that there should be no arbitrary prejudices in employment. The 
association has also adopted a policy that manufacturers should use 
every available source of labor supply. 

The foregoing is no mere paper policy. During the last few months, 
in the course of a series of regional meetings of manufacturers over 
the country, officers of the association advocated that manufacturers 
should employ Negroes wherever and whenever possible, in keeping 
with the abilities of the Negroes and their acceptability to fellow white 
workers, particularly organized workers. Manufacturers generally 
agree with these policies. Therefore, wherever employees themselves 
have not directly or indirectly put up bars against the hiring of persons 
because of race, color, or creed, those now 7 unemployed can expect to be 
accepted for jobs as rapidly as openings for wdiich they are qualified 

The association shares, with every right-thinking American, regret 
that any loyal American is denied for any reason, including member- 
ship or nonmembership in some labor union, the right and privilege 
of sharing in the effort to prepare his country's defenses. 

We assume that the President, meant that his strictures against 
discrimination be applied to the fundamental right of all free Amer- 
icans to work without molestation on the part of others. Denial of 
the right to work because of nonaffiliation with some union is as 
un-American in fact and principle as a denial because of nonaffilia- 
tion with a particular religious sect. 


There is confusion, however, on the subject of management's posi- 
tion in regard to the problem of discrimination against some citizens 
on the grounds of race, religion, creed, sex, and so forth. 

Any objective study of the problem discloses that prejudices against 
employment on these grounds originates in an overwhelming propor- 
tion of cases with fellow workers, and not with management. It 
must be self-evident that management must respect the wishes of 
those who are already employed within the plant if it is to preserve 
efficiency of production and satisfactory working conditions. 

But the situation is frequently complicated by a factor which 
a witness before this committee on July 17, Dr. Robert C. Weaver, 
touched on briefly, according to press dispatches. Dr. Weaver indi- 
cated that union regulations are often highly discriminatory as to 
age, color, race, or sex in addition to the other handicaps such union 
rules impose on would-be workers in defense industries, as well as 
in nondefense occupations. 1 

Dr. Weaver mentioned casually, according to the press, that "scores 
of small labor unions" denied membership to Negroes, went on to em- 
phasize that many employers holding defense contracts had refused 
to employ Xegro workers. A member is reported to have asked 
for, and Dr. Weaver agreed to submit to the committee, a list of such 

Mr. A. Philip Randolph, president of the Brotherhood of Sleeping 
Car Porters, introduced at the 1940 American Federation of Labor 
convention a resolution which requested the American Federation of 
Labor to "go on record as condemning the color bar in constitutions 
and rituals of all trade unions, and all forms of prejudices in the 
labor movement based on race, color, religion, sex, or nationality." 

This resolution was not adopted by the American Federation of 
Labor, thus continuing its record of many years in refusing to 
condemn racial bars in its constituent labor unions. 

In speaking for his defeated resolution, Mr. Randolph said: 

Here you have trade unions that are heneficiaries of this National Labor Re- 
lations Act denying the Negro workers membership in their unions and thereby 
preventing the Negro workers from receiving and securing employment. 

He added : 

In addition to specific color bars in constitutions or rituals, there are other 
devices and subtle ways by which some of these unions that do not have 
their color clauses discriminate against union workers. 

Speaking specifically with reference to this question as it affects 
defense industries — an aspect which has been brought to the attention 
of this committee by Dr. Weaver and others — Mr. Randolph said 
at the 1940 American Federation of Labor convention: 


Under the national defense set-up thousands of Negro workers apply to the 
various industries for jobs. They are citizens, they pay taxes, and yet they are 
turned away. The employers tell the Negro that the unions control the job. 
and they ask him if he has a union card. If the Negro worker says no, they 
tell him he can't work there. If the worker does not have a union card he 
cannot have a job, and if he does not have a job, he cannot have a union card. 
We are only asking for the right to join the union, that is all. 

1 See Washington hearing, pt. 16, July 15. If., and 17. p. 6532. 


Now, Mr. Randolph also referred specifically to a shipyard at 
Tampa, Fla., where Negro workers were working. He said the union 
obtained a closed-shop contract, with the result that the employer 
to throw the Negro workers out of employment. 


I respectfully submit that the committee, entitled to and obligated 
as it is to consider all available facts, should ask Dr. Weaver to sub- 
mit the following additional data together with the names of the 
manufacturers of whom he complains: 

1. A list of all unions, international, national, and local, of which 
he ha^ knowledge, which refuse membership in their organizations 
to Negroes; 

2. An analysis showing the proportion, in unions which do admit 
Negroes to membership, of such Negro membership to that of white 
workers ; 

3. A statement presented in his official capacity as chief of the 
branch of Negro employment and training of the O. P. M., showing 
what studies have been made of the actual or probable effect on 
Negro employment of closed-shop contracts recommended or ordered 
by the Defense Mediation Board, or the National Labor Relations 
Board, and negotiated by unions barring Negro workers. 

The Government has sought to concentrate the heat engendered 
in this issue on industry. The fact is that both the Government and 
organized labor might well put their houses in order. 


For example, on June 11, the Council for Democracy — well known 
to this committee, I am sure, as a group of prominent Americans — 
issued a report on this subject. 

The council's pamphlet said, among other things — 

exclusion and humiliation of the Negro are complete in the Navy and Marine 

The attitude of the Navy and Marine Corps, the council's pamphlet 
continued — 

led to their being characterized by the Hampton Institute Conference on the 
Negro in national defense as representing the most undemocratic and un- 
American aspect of our Government. 

Is it not fair to ask the Government if consideration is being given 
to the existence of official discrimination in the Army policy of 
enrolling and training Negroes in segregated units? Or to ask why 
Negroes have consistently been denied opportunity for Army aviation 
training, and why the first modification of this latter policy was an- 
nouncement of a segregated training field to be established at Tus- 
kegee Institute? 

Dr. Lamb. Mr. Sargent, in accordance with your suggestion, the 
committee will request that information from Dr. Weaver's office. 
We will submit these questions to him. 1 

Mr. Sargent. I think that would be very helpful, sir. 

The Chairman. We would also like to have your answer to it. 

Mr. Sargent. I would be very glad to supply that. 

1 See correspondence, Washington hearings, pt. 16, July 15, 16, and 17, pp. 6533—6535. 


I am under the impression that Mr. Green advocated something of 
that sort in his testimony before this committee. 

Those are possibilities in that connection. I think, however, that 
as regards the total situation, there is a misconception in the minds 
of many manufacturers, as well as others; namely, that the effects 
of the cessation of an armament program would be immediate, 
whereas there is generally a slight period for readjustment, which 
can be taken advantage of. You will recall that after the World 
War, which ended in 1918, the depression did not really start in 
either this country or in England until 1920; that there was a sub- 
stantial expansion of business and empWment for a year and a half 
or slightly over in both countries. 


In other words, there is, generally speaking — and I think this has 
been proved in economic history — a period of boom and encourage- 
ment and expansion immediately following an armament period. 
Then, after a year and a half or 2 years, jou have this period to 
which you refer, and which is apt to be extremely serious. 

So you will have a period during which adjustments can be made, 
in which possibility the opportunities for employment as measured 
by our employment indices are even greater. Hence if you can find 
the means to put that interval to use, intelligently and without soar- 
ing to the heights of a boom, you may be able to alleviate the situation. 

You are aware, of course, that you don't very often have a severe 
depression unless you have had a severe boom ahead of it; and it is 
there that your answer must largely lie, I think. Controlling both 
boom and decline is difficult because it involves not only purely 
economic policies, both within and without the field of legislation, 
but also human psychology, which is not subject to the same control, 
either by industry or government or anyone else. 

We have not completed our analysis of that subject. As I ex- 
plained to Mr. Arnold, we have made some recommendations. If you 
desire, I should be very glad to send, for the benefit of this com- 
mittee, the report of our committee on the study of depressions, made 
last December, which had some suggestions. I do not have that 
with me. 

The Chairman. We should like a copy, Mr. Sargent. 

(The report referred to above was received subsequent to the 
hearing and placed in the committee files for use of the staff.) 

Mr. Sargent. Also, if you would desire it, I can offer you this 
analysis of the views of some 500 members of the American Economic 
Association. It is rather lengthy. 

The Chairman. If you will leave that with us, we will greatly 
appreciate it. 

(The analysis referred to above was placed in the committee files 
for use of the staff.) 


The Chairman. I understand the English hope to solve their 
economic problem by levying extremely high taxes both on labor and 
management, and are promising at the end of the war that they will 


return the excess amount collected. But the trouble with that, Mr. 
Sargent, is that England may be broke after the war is over. 

This country is making a survey with the thought of inaugurating 
public-works programs to take up the slack after the war, but we, too, 
may have to retrench at that time. So what gives us deep concern now 
is the future status of the worker. If he is getting these good wages, 
we want to ascertain whether some system can be introduced by which 
he would have six or seven hundred or a thousand dollars after this 
emergency, as a sort of a cushion for him to fall upon until the Nation 
can get back on its feet. 

Mr. Sargent. I wouldn't have you get the impression that because I 
referred to it as one possibility I was endorsing the English plan. I 
have doubts about it, as you do — doubts of various kinds. The British 
may be broke, or it may be necessary for them to resort to a capital 
levy to pay for the war, or they may never pay off. They may be just 
kidding the people with the idea they are going to be paid off. All 
those factors are involved. 


The Chairman. I did not assume you were advocating the British 
scheme. I was just bringing out what appears to me to be the weak- 
ness of it. 

Mr. Sargent. I agree with you. It is one of the weaknesses, of course. 
In planning public-works programs, at least during the defense 
period — and I have heard to some extent in nondefense periods — many 
governments do not seem to worry about fiscal situations, or to pause 
to ask themselves whether they are theoretically u broke" ; they feel able 
to go ahead and spend money on projects of various kinds. 

I do think, with reference to the public-works program, it certainly 
in theory represents great possibilities, particularly if, during a period 
like the present, you have conserved all nondefense public works so 
they can be used later. 

If you go ahead with your nondefense public works in a period 
such as the present, then you are reducing the possibility of utilizing 
public works subsequently to any great advantage, in my opinion. 

Now, the difficultly, of course, comes from attitudes of the local 
communities — people who want public work done — the difficulty of 
resisting the pressure, and so forth. 


The Chairman. I understand the production of automobiles has 
been reduced some 20 percent, hasn't it? 

Mr. Sargent. Yes, sir. 

The Chairman. And probably will be reduced further. Now, to 
explore the problem, as I see it, let us accept hypothetically the gen- 
eral statement that automobiles are all made of steel. Now, they are 
scraping the bottom of the barrel for steel. Under the national-de- 
fense program, automobile production would have to be decreased 
greatly, wouldn't it? 

Air. Sargent. Yes. sir. 

The Chairman. They take the steel for ships and for airplanes, and 
such, and that is indicative of the fact, Mr. Sargent, that as sure as 


we are here in this room today, the non-defense-industrial problem 
probably is going to come at us head-on. Don't you think so? 


Mr. Sargent. I think so. I made a study of the manner in which 
Germany and England and France had conducted their operations a 
year ago, and circulated it among some people who were particularly 
interested in the subject, and pointed out at that time that both Ger- 
many and England, when the war broke out, had had several months 
during which unemployment had actually increased, because of that 
very situation. In other words, if you wish to avoid that, you must 
have the most careful planning and the most careful adjustment be- 
tween both defense and nondefense industries, and among the several 
nondefense industries. I question whether we have yet engaged in 
that kind of planning here, on a sufficient scale to overcome and prevent 
the situation you describe. 

The Chairman. Do you have any questions, Dr. Lamb? 

Dr. Lamb. In that connection, Mr. Sargent, would you agree that 
delay in coming to a conclusion about those transfers can have serious 
effects, both for the industry which may be asked to shift from one 
type of activity to another and the communities in which those indus- 
tries are located ? 

Mr. Sargent. Yes, sir. 


Dr. Lamb. For example, at the present time we understand that 
projects for defense housing are being held up in Detroit because of 
uncertainty as to the effect that curtailment of the automobile indus- 
t ry is going to have on activity on civilian production. That is the 
type of uncertainty that you would envisage? 

Mr. Sargent. Yes. 

Dr. Lamb. So that you would favor an early decision as to these 
shift-overs, and a recognition on the part of the country that such 
sacrifices are necessary? 

Mr. Sargent. I would favor an early decision provided considera- 
tion is given to all the factors and elements and inter-relationships 
involved. As you indicate, an early decision does not necessarily 
mean that things will have to be done early, but rather gives an 
opportunity for orderly adjustment over a subsequent period. 

Dr. Lamb. Yes ; but it abates the uncertainties you have mentioned ? 

Mr. Sargent. That is correct. 

Dr. Lamb. Which in themselves set up new complications? 

Mr. Sargent. Yes. 


Dr. Lamb. I would like to ask you whether you have anything 
further to say with respect to subcontracting. Is it not true that the 
National Association of Manufacturers has been corresponding with 
its membership and with the affiliated associations on this subject? 

Mr. Sargent. Yes, sir; we undertook a survey of the available 
productive facilities throughout the United States and gave the in- 


formation to the O. P. M. We found that several million man-hours 
or machine-hours which were available for defense work were not 
being used, and gave that information to the O. P. M. We also made 
our findings available in one or more places in every State in the 
United States. In addition to that, we have endeavored to obtain 
information from our members as to the extent of subcontracting 
and the extent to which it has increased. 


We are now undertaking a survey of companies with defense con- 
tracts, which has not been completed. The preliminary results indi- 
cate a substantial increase in the proportion of total output which 
is being subcontracted now as compared with the period before July 

Dr. Lamb. Is that subcontracting of the sort which goes into plants 
already having prime contracts, or is it the kind that is spreading 
to a larger number of firms? 

Mr. Sargent. I don't know that there would be any way of deter- 
mining that, because when we ask a manufacturer whether he is sub- 
letting his work, he knows that, but he doesn't know whether the 
people to whom he sublets also may have prime contracts of their 
own. I don't know of any way you could find that out unless you 
made a very complicated survey. 

Dr. Lamb. That is all. 

geographical scope of the national association of manufacturers 

The Chairman. Mr. Sargent, does your association reach into every 
State in the Union ? 

Mr. Sargent. No. I suppose we have memberships in perhaps 40 
States. There are a few States in which there are almost no manu- 
facturers, and where we have no members. 

The Chairman. What is the total membership of your association? 

Mr. Sargent. About 8,000. 

The Chairman. We thank you very much and appreciate your 
coming here, Mr. Sargent. 

Mr. Sargent. And I am very glad to have had the privilege of 
appearing before the committee. 

The Chairman. If you will send the other data to us, we will 
appreciate it very much. 

Our next witness is Mr. Carey. 


The Chairman. Mr. Carey, will you give your full name and state 
the capacity in which you are appearing before the committee today ? 

Mr. Carey. My name is James Carey. I am national secretary of 
the C. I. O. and president of the United Electrical, Radio and Ma- 
chine Workers of America. 

The Chairman. Do you have a statement that you want to read? 

Mr. Caret. I have just a brief summary. I shall not read the 
entire statement. [Reading.] 



The general view of the C. I. O. relating to labor market condi- 
tions and migration is as follows: 

There is no general shortage of labor. Actually there is a real and 
continuing problem of unemployment. The present defense program 
will not wipe out unemployment. There are no shortages of a special 
nature which cannot be met over a reasonable period of time by a sound 
program, particularly on the part of Government and industry. 

There is absolutely no need for labor priorities or any coercive 
measures for the shifting of labor. 

All necessary shifts of labor can be accomplished through the co- 
operation of organized labor and through providing proper wage 
rates, housing, transportation, and so forth. The failure to make ade- 
quate use of the labor supply will result in freezing the national 
income and production far below its maximum, and greatly impairing 
the defense effort. So far there has been failure. 


The C. I. O. is fundamentally opposed to forced savings for wage 
earners or wage taxation as long as there is continued unemployment. 
In the face of an ever-increasing defense program, such measures 
mean freezing unemployment and intensifying the attack on the 
standard of living. 

Only by thorough-going planning of industry in the defense effort 
can the real labor needs be determined and met. This, in labor's 
view, can best be accomplished through the immediate institution of 
the industry council plan. 

The greatest economic problem in the Nation's history will be 
faced when the post-war period of slump and unemployment sets in. 
Only by adequate planning of the defense effort now and by prepa- 
ration for the peace-time future, can a national economic catastrophe 
be avoided. (Reading ends.) 

The Chairman. Then you feel, Mr. Carey, that at the present time 
there is still considerable unemployment. 

Mr. Carey. Yes, sir. 

The Chairman. The testimony presented here indicates that there 
are several million people registered with the various employment 
agencies, Federal and State, at this particular time. 

Mr. Carey. Yes, sir ; and we find that their rolls are not complete. 

The Chairman. You have a written statement to file with the com- 
mittee, haven't you? 

Mr. Carey. Yes, sir. 

The Chairman. That will be inserted in the record. 

(The statement referred to above is as follows :) 



During the past 3 years there have been continuous loud outcries that there 
was a shortage of labor either at hand or immediately impending. All during 
this period the Congress of Industrial Organizations has continuously taken 
the position that in no case was a shortage of labor impending and that now 


there is no foreseeable shortage in the labor supply which would in any way 
interfere with production. 

At times during the past 3 years our voice has almost been a lone one. Now 
most of the experts on employment have come to agree with us. There are 
still a few who, either through ignorance of the real situation or for other 
purposes, continue to cry aloud about labor shortage. 

Too often the cry of labor shortage is used to lay the blame upon labor for 
the lack of a more effective production job. The blame does not rest upon 
labor. Or it is used to advocate the establishment of some kind of compulsion 
in the labor market, compulsion unjustified either by the need or by sound 
public policy. 

The fact is there is a serious and continuing problem of unemployment facing 
the country. The cry of labor shortage has been one of the excuses for a 
growing refusal to face that problem. 

According to the Congress of Industrial Organizations' last estimate there 
were, in May, 7,184,000 unemployed. Additional employment during the coming 
year at best can provide only two and one-half million jobs. If the total Army 
is increased another million this will make a possible gross increase in employ- 
ment of three and one-half million. This would be strongly offset by an unusual 
growth in the available labor force coming in particularly from farms, from 
women not heretofore actively seeking jobs, and from many self-employed. 

If, for example, the same percentage of workers in the working age group 
were employed now as were employed in 1918 we would have an actual working 
population at least 15,000,000 larger than it is now. I submit that a very sub- 
stantial portion of this 15,000,000 is available for work under proper conditions. 

Furthermore, the productivity of individual workers is growing apace, so that 
employment is increasing much less rapidly than production. For example, 
industry production in the first 6 months of 1941 was 34 percent higher than 
industry production in 1929. Manufacturing employment, however, in 1941 
was only 12 percent above 1929 and total employment barely 1 percent. 


Thus, we submit that there is no warrant whatever for fears about general 
labor shortage. The country does, however, face the necessity for making the 
fullest possible use of the great reserve labor force. 

It is true, of course, that the United States Employment Service in particular 
has reported specific shortages of labor in a number of particular skilled 
occupations. I think, however, that such figures should be treated with great 

In the first place they represent only a partial survey of the labor market 
since the coverage of the public employment offices is still incomplete. In the 
second place, they represent the general attitude on the part of employers that, 
if they need a skilled worker of a certain occupation, they can expect to get 
him immediately available in the labor market. 

This last practice is exceedingly important in the evaluation of the situation 
in the labor market. It might be called "depression-minded hiring." The great 
majority of employers still think in terms of depression-hiring conditions. This 
means that they expect to be able to open the doors of their employment offices 
at any time and get any kind of qualified labor they expect. This kind of 
hiring practice has grown up, of course, during the past 10 years of enormous 
unemployment. It contains a large number of operating methods wholly 
unsuitable to a period of increasing or full employment. Many industries which 
still spend months or even years laying out their floor space, preparing equip- 
ment and buying supplies, still expect to get the most important part of their 
manufacturing process, that is the workers, simply by whistling at the factory 
gate. They still also cling to discriminations on the basis of age, color, birth 
place, and qualifications which strain out a large majority of available competent 

It is here submitted that the effective use of our labor supply can be made 
by American industry only if they adopt the attitude and practice of a full 
employment economy. Such an attitude involves the understanding that no 
longer can skilled and experienced workers be found available on the market 
at any time. Such workers must be trained within the plant through ap- 
prentice and upgrading systems. Most of the new labor must be employed at 
the bottom, unskilled and inexperienced. When new plant expansions are laid 
out, it must be expected to plan for the procurement and training of labor 


well in advance. Employers must, that is, expect to plan and conserve the 
use of labor as the precious national resource it really is. 

On the part of the Government, the effective use of the labor supply essen- 
tially involves sound planning of all measures to improve and facilitate the 
desirable mobility of labor. Mobility is here used in the broadest sense. Among 
other things this means : 

1. An effective public-training program to supplement within-industry training. 

2. A most efficient public-employment office system. 

3. Careful allocation of plants and defense work in relation to available labor 

4. Provision and protection of working and living conditions for workers to 
improve desirable mobility. 

Most important, however, in adjusting the labor supply is the enlistment of 
effective cooperation of organized labor. The labor movement has patriotically 
offered its fullest cooperation to the national-defense effort. As yet that offer 
of cooperation has not been met by enlisting labor in representative and responsible 
capacity in the defense effort. 


For a long time now under the European dictatorships, labor coercion has been 
established in one form or another. That coercion has been set up in the name 
of effective utilization of the labor supply. 

There are persons and agencies in this country who are playing with the idea 
of labor priorities or coercion of one kind or another. The Congress of Industrial 
Organizations is fundamentally opposed to such measures as both unnecessary 
and repugnant to the American way of doing things. 

The public-employment office system and the social-security system have been 
used abroad for pushing labor around. I know that in certain public-employment 
office circles in the country, these devices have been discussed. We in the Congress 
of Industrial Organizations urge most emphatically that our social-security 
system and our public employment offices shun with continued determination any 
proposal to use these systems for coercive measures to be inflicted upon labor. 

The enlistment of labor's patriotism by giving organized labor a responsible 
capacity in the defense effort would make unnecessary any other devices for seeing 
that the labor supply was efficiently utilized. 


Among the steps that should be taken to guarantee full use of available labor 
supply are : 

1. Integrated planning of defense production which would be the basis for ac- 
curate information about labor needs in the future. There is now no such informa- 
tion and can, therefore, be no training program really related to the needs. The 
establishment of industry councils as proposed by the Congress of Industrial 
Organizations could be the base for an effective job in this respect. 

2. The location of plants should be made in such a way as to tap the reservoirs 
of labor supply. 

3. Proper housing should be provided, particularly in places where additional 
labor supply is needed. So-called shortages could easily arise at defense plants 
if workers are not provided with decent housing conditions. 

The present defense-housing program is only a miserably small bite at the real 
job which should be done in housing defense workers. In many places, therefore, 
what may be branded as labor shortages will really be housing shortages. 

4. Wage rates in industries should be up to union standards. Workers can 
hard'y be expected to move to lower wage rates. 

The worst possible method of getting workers where they are needed is to shut 
down an industry such as the automobile industry and then expect nature to 
bring unemployed workers where they are supposed to be needed. This is the 
cruelest and most inefficient method that possibly could be devised. 

5. Seniority rights should be protected for workers who are asked to shift to 
defense jobs from their regular employment. 

6. Collective bargaining should be vigorously extended to all industries. Al- 
ready there is clear evidence that the existence of collective bargaining has 
greatlv improved the orderly adjustment of wage rates, preventing unhealthy 
competitive bidding 

Furthermore, as has been pointed out by business publications, the best organ- 
ized areas, such as Michigan, are ones in which the turn-over of labor has been 


council shall be known as an industry council ; for example, the steel industry 
council, etc. 

Each council shall promulgate the aims and scope of the national-defense pro- 
gram in its respective industry from time to time in consultation with the National 
Defense Board (hereinafter outlined), and shall be charged with the responsibility 
of expediting the defense program, and assuring the adequate production of 
domestic, or nonmilitary, goods, subject to the review of the National Defense 


To these ends the duties of the councils shall be to — 

1. Ascertain the domestic and armament requirements of each respective in- 
dustry, coordinate the production facilities of each industry to meet these require- 
ments speedily and accurately, and expand production facilities where they are 
inadequate to fulfill these requirements. 

2. Reemploy unemployed workers in each respective industry and in the com- 
munities and regions in which the industry operates as quickly as the accelerated 
pace of the industry permits, fill the labor requirements of the industry from the 
available supply, and train workers for those occupations in which the council 
finds a shortage. 

3. Achieve the greatest possible output as quickly as possible by bringing into 
full use all the production facilities in each respective industry. This covers 
the granting and reallocating of armament contracts, fulfilling in advance known 
domestic requirements so as to clear the way for the peak in armament pro- 
duction, and eliminating bottlenecks created by one concern having a dispropor- 
tionate amount of armament contracts that it cannot complete within the 
necessary limit of time, and other bottlenecks caused either by contractual or 
technical factors. 

4. Promote industrial peace through the perfection and extension of sound 
collective-bargaining relations between management and organized labor, and 
the adherence to all laws affecting the rights and welfare of labor, such as 
the social-security law, the Wages and Hours Act, the National Labor Rela- 
tions Act, the Walsh-Healey Act, and others. In this field of endeavor the 
statement of labor policy of the National Defense Advisory Commission shall 
be a guiding principle. 

Each industry council shall be adequately staffed, all necessary Government 
information shall be made available to it, and each member of an industry 
covered by a council shall make available to his respective council all information 
necessary for its work. 


The President of the United States shall establish a National Defense Board 
consisting of equal numbers of representatives for industry and organized labor 
of which the President shall be the chairman. 

The Board shall assist the industry councils in the collection of pertinent 
data on the aims and scope of the defense program, and the granting and 
reallocating of armament contracts, facilitate the program's successful exe- 
cution by acting as an appeals agency for the several industry councils, and 
coordinate the work of the councils by serving as a clearing house for inter- 
industry matters. 

The authority and jurisdiction of the industry councils, subject to the review 
of the National Defense Board, to promulgate national policies relating to 
national defense and to execute same for their respective industries shall be 
subject to all oustanding Federal laws. 


The objectives of this plan of reorganization are : 

1. To guarantee the production of armaments in needed quantities and on 
time, by achieving the highest possible productive efficiency of American in- 
dustry, through the full and complete cooperation of industry, organized labor, 
and government. 

2. To guarantee the production of domestic, or nonmilitary, goods in ade- 
quate quantities so as to further improve and extend the American standard of 
living through a more equitable distribution of the national income, thereby 
improving the morale of the American people, and preventing a chaotic break- 
down of our domestic economy when the national-defense program is com- 


3. To preserve the basic democratic rights of the American people; namely, 
the freedom of speech, assembly, and worship, and the free right to organize 
into independent associations for lawful purposes, such as the right of labor 
to organize into unions of its own choosing for collective bargaining and other 
mutual protection. 


The President of the United States is already in possession of the legal 
powers, through the National Defense Act of 1916 and other legislation, neces- 
sary to create the administrative machinery for the defense program proposed 
in this memorandum, to provide it with the necessary operating funds, and to 
keep it in operation. 


The Chairman. Now, what is the part, if any, that the C. I. O. is 
playing in the training program? 

Mr. Carey. The C. I. O. is making a sound contribution in that 
program. Not only do they have within their ranks the people who 
understand the job that has to be done by the employed worRer, but 
they also understand the job that has to be done with the unemployed — 
that is the job of training itself. They are mechanics themselves, 
the producers, and they are the logical ones to assist in carrying for- 
ward this training program. 

They can secure through their own organizations the rolls of unem- 
ployed. They know how many mechanics are members of their unions, 
and how many are now unemployed or only partially employed. They 
also have the figures in respect to the number of people who are now 
working below their skills — people who can do jobs that require greater 
skill than the jobs they are now performing. 

With that knowledge and with the knowledge of the organization 
itself, the C. I. O. can make a far better contribution than they are 
making now, provided, of course, labor is given proper recognition 
and real participation. 


The Chairman. What does your organization feel about the housing 
phase of the national-defense program ? . Do you think housing is 

Mr. Caret. We think it is far below what is required at the present 
time. We know that is one reason that we find in certain sections a 
so-called shortage of labor — really a result of inadequate housing. 
People just can't live in those areas. The plants are built without a 
proper realization of the need for housing. 

The Chairman. In other words, our industries pitch in and make 
guns and bullets, but don't think about how the workers are living, 
is that the idea? 

Mr. Caret. Yes. They will think in terms of the requirements of a 
plant; they will consider for months the problem of getting the neces- 
sary materials, and so forth : and they will also study for a long period 
of time the facilities that are necessary, and then after the building 
is completed they will open the gates and say: "We need 1.000 em- 
ployees."'' They will put an advertisement in the paper. And then 
they will cry at the shortage of labor, when they find there are not a 
thousand of the type of employees with the required skills applying 
that day. 


There is no real planning and coordination of the needs of industry 
with the supply of labor in the community. 



The Chairman. I think you know, Mr. Carey, that the Congress 
appropriated $300,000,000 for housing and community facilities, and 
the President has recommended $300,000,000 more. Do you think that 
is adequate? 

Mr. Carey. No, sir ; not for the present need. 

The Chairman. Dr. Parran, the Surgeon General of the United 
States, testified this morning that he thought we shall need $1,500,- 
000,000 before we get through. 

Mr. Carey. We need it for several reasons. It would be a contribu- 
tion toward meeting the present unemployment problem and putting 
the people to work as well as the need for housing. 

The Chairman. Have you any other recommendations in regard to 
housing ? 

Mr. Carey. We have in the brief. There is a section devoted to 

housing for large families neglected 

The Chairman. I was convinced in going about the country, start- 
ing at San Diego and then visiting Connecticut and New Jersey and 
Maryland, that the provisions for adequate housing for men with 
families of five or six children are totally inadequate. 

We had one witness who testified that he and his wife and six chil- 
dren were living in a one-room apartment — a total of eight in the 
family — and he paid $18 a week for his room. Despite that, the houses 
that are being built there now contain only two or three or four rooms, 
and are built for families of only three or four members. In olden 
times a large family brought prestige, but apparently now it is a 
handicap. Do you find that to be true ? 

Mr. Carey. I might put it this way. We appear, on the surface, to 
be engaged in a 50-yard dash. This is just a temporary boom, and 
unless it is given a better base in real production, it will be just that, 
and we will face a chaotic condition later. But actually below the 
surface, this question that we face is something of a 5-mile run. It is 
not as temporary as most people think. 

We have to provide housing suitable for the people over a long 
period of time, and I think we should do some planning to provide 
that, and avoid thinking that this is just temporary. 


The Chairman. What, specifically, has the C. I. O. done to work 
for a more adequate defense housing program? 

Mr. Carey. The C. I. O. has given that matter thorough consider- 
ation. We have a committee on housing. We have drawn up certain 
minimum requirements for proper housing facilities for the average 
American family, and our recommendations are available. 

The Chairman. What about rent increases? Have you made an 
investigation of the trend ? 


Mr. Carey. We hear reports from our organizations from time to 
time. We know that increases in rents are just another— well, a form 
of a wage cut ; they reduce the standard of living, particularly in the 
industrial centers. Our reports indicate there that the increase in 
rents is widespread at the present time. 

The Chairman. We are very much concerned. Mr. Carey, with the 
removal of people from State to State. We are interested in how 
they are getting along, in their housing and in their health. Those 
matters are directly within the scope of this committee. We are also 
much concerned about what is going to happen afterward, don't you 
see, because the consequences of migration in times of industrial slump 
are far more serious than what we are witnessing today. We are 
spending money now, and we do not know what our condition will be 
at the end of this. Then what is going to become of these people? 
Have you any thoughts on what could be done now, regarding savings, 
compulsory or otherwise, to take up that shock after the war is over? 


Mr. Carey. We don't think the way to approach, that is to adopt a 
compulsory savings plan, because that would result in freezing the 
high unemployment rolls. 

We believe that we should expand civilian-goods industries, and 
continue to produce and produce in larger quantities. If saving is 
possible, and people have the money, they will voluntarily engage in 
a program of savings : but a forced-saving program at this time would 
tend to intensify our after-the-emergency problem. 

We don't agree that that would be a solution of the present problem 
at all. 


The Chairman. What do you think about the curtailment of em- 
ployment on account of priorities ? 

Mr. Carey. That is one of the most serious problems that we face 
today. It is going to have a great bearing on the question whether 
we are able to meet the problem that will confront us after the emer- 
gency period is over. We think the very establishment of a priority 
is an admission that a mistake has been made. We think resorting to 
a program of priorities is in itself a very serious mistake. We think 
there are no real substitutes in our economy for steel or aluminum. 
The lack of planning in the whole defense program is resulting in 
what we term priorities unemployment. People are being laid off and 
people are being told that we should engage in a program of training 
labor when we are working short time on account of a lack of ma- 
terials. All these things are just creating a situation that is going 
to break down; and the break, in our opinion, will come in the very 
near future. 

The Chairman. Steel is the principle material in manufacture, of an 
automobile; but at the same time steel is needed for ships and guns and 
airplanes. What are we going to do about that situation? 


Mr. Carey. We are going to increase our capacity to produce steel, 
if we approach it in the proper way. because if we have a cut in the 


automobile industry, it will result in considerable unemployment. It 
will result in a saving of steel, perhaps ; but then you go into the ques- 
tion of how are you going to ration automobiles; and the C. I. O. is 
anxiously waiting to be informed how you are going to ration two- 
thirds of an automobile as a result of the cut. Is the automobile that 
is for sale going to the highest bidder or to the person with the best 
contacts? In what manner will that be done? As you reduce the 
number of units made, you are going to increase the cost of producing 
those units. You are going to create a condition of rising prices. 
Dealers wouldn't be able to pass through their offices sufficient cars 
to keep the dealers themselves operating, and there will be unemploy- 
ment there as well as in the plants. 

We are told a cut in automobile production will result in saving 
managerial ability and skilled labor — make it available for defense 
production — so as to release facilities for defense production and all 
of that, 

In our opinion, that will not be the result. The facilities that are 
not used in the manufacture of automobiles will just remain idle. It 
will not result in any effective saving of labor, because it would be 
much easier to convert labor engaged in the production of peacetime 
goods, like automobiles, into the manufacture of defense goods without 
destroying the production unit. 


It will merely throw the people out of jobs, and they will have to 
wait until nature takes it course. They will go through the difficult 
process of finding a job at some later date in some defense work. 
Instead of changing over from a production unit of civilian goods — 
automobiles, for instance — to the production of some necessary de- 
fense material, say, aviation — it would be much easier to convert 
these production units, rather than destroy them as they are doing 
now with these cuts in production. 

The Chairman. As I understand you, Mr. Carey, you, as a repre- 
sentative of the C. I. O., are not worried about a shortage of labor 
at all ; you are worried about the increase of unemployment at this 
particular time ? 

Mr. Carey. Yes, sir; and the great losses that will result from a 
lack of planning. 

The Chairman. You can see that coming, on account of priorities, 
and because boys are becoming of age and going into industry, and 
you can see women coming in, so you feel there won't be any scarcity 
of labor? 

technological displacement of manpower 

Mr. Carey. And also there is the important factor of increased 

The Chairman. By that you mean mechanization and technological 
changes, new methods and so forth. 

Mr. Carey. That is a very important factor. 

The Chairman. Have you any idea about effects of the reduction 
of output in the automobile industry on such other industries as rub- 
ber, glass, parts, and auto bodies ? 

Mr. Carey. Yes; When you talk about the automobile industry 
you cut across practically all of American industry. Take glass, for 


instance. A very high percentage of the output of glass goes into 
automobiles, and the same thing is true of rubber and a great many 
other products. This means that some industries will be completely 
wiped out. 


The Chairman. Has the C. I. O. felt that union representation in 
decisions on production policy has been adequate 

Mr. Carey'. No, sir; We thought we had a start in having a 
Knudsen-Hillman set-up as a cooperative framework for this pro- 
duction effort of management and labor equally represented, but we 
find that it stopped there ; it did not go down to the operating end, 
down where it is very necessary right within industry itself. 

You should have management and labor getting together and shar- 
ing the responsibility for solving these problems. In that way they 
would be solved by the people who actually have to do the job, tak- 
ing industry as a production unit rather than taking companies 
as individual groups. 


The Chairman. Will you describe in some detail the Murray In- 
dustrial Council plan and tell us whether in your estimation the 
O. P. M. has given the council plan thorough consideration? 

Mr. Carey. The Murray plan takes the best practices of a modern 
corporation and puts them in operation. Instead of taking the plant 
as an individual production unit, we take the industry itself — we 
treat, for example, the steel industry or the automotive industry as a 
production unit. Then we establish in that production unit those 
practices that will result in maximum production. 

The Murray plan would bring into our industrial set-up labor and 
management on equal terms, having a Government chairman ; they 
would be given the problems and requirements of the defense and 
civilian needs of that industry which they could cany out in a demo- 
cratic way. 

AW would have an over-all planning board, which is absolutely es- 
sential at the present time. The lack of such a board is one reason 
we have the problems of priorities and so forth. There hasn't been 
sufficient and proper planning which is necessary in order to do the 
job that has to be done today. With this over-all planning board, 
we would be able to secure the needs of the Army, the Navy, and the 
Maritime Commission, as well as civilian demands. 

The planning board would allocate to the industry councils the 
requirements of the Government in that particular industry and then 
labor and management with a Government chairman in that industry 
would do the job. 

They would carry the load. They would have a voice in the alloca- 
tion of Government orders; they would have a voice in prices; they 
would have a voice in the actual responsibility of carrying out produc- 
tion schedules. 

In other words, the job would be done right where it should be done 
and can only be done — right in the industry itself. 

That, in brief, is the Murray plan of industry councils that was sub- 
mitted to the (). P. M. some time ago. It has not been given serious 

60396 — 41 — pt. 17 10 


consideration as yet, but there is a growing feeling that this is the 
only way this job is going to be done. 

There is considerably more interest in such a plan today than ever 
before. We find that a great number of employers are considering 
it now and we feel that with their recognition of the needs of putting 
a plan of this type into effect the Government will eventually do 
something about it. 

The Chairman. In regard to plant expansion, we understand that 
the C. I. O. some time ago proposed expansion of aluminum capacity. 
That expansion is now taking place. To what extent do you attribute 
the delay in getting the expansion program started and is it following 
along (lie lines recommended by the C. I. O. ? 

Mr. Carey. We attribute delays very definitely, and correctly, to the 
monopoly set-up in that industry. We find that the practice is still 
carried out of ascertaining their capacity and then saying that the 
capacity needed just happens to be the capacity that they have on 
hand. The capacity to produce aluminum is still not enough to meet 
the civilian and defense needs. In fact, there is not enough capacity 
in aluminum to meet defense needs alone even if no aluminum went 
into civilian needs, and that also increases the present problem. Take, 
as an example, the manufacture of fractional horsepower motors, 
where "a small amount of aluminum is used in the process. It was 
necessary to substitute for the aluminum a copper process. That re- 
quired new tooling, bringing out old obsolete machines and tooling 
them up in order to use this copper process. It required a training of 
new people. The net result is an inferior product requiring a lot 
of copper to replace a small amount of aluminum. All the tool work 
that had to go into the new machinery burdened the already over- 
burdened tool industry. As a result a substitute for copper will have 
to be found because copper is a critical material. All this leads us 
to believe that if this job is going to be done properly some planning 
must be done. 

The Chairman. Do you believe the O. P. M. has moved sufficiently 
rapidly in expanding plant facilities in other industries such as steel? 

Mr. Caret. No, sir. There is an inadequate supply of steel and 
there will continue to be, and the needs will be greater, of course. 
This is partly due to the fact that our requirements have increased. 
We shoot too low. We think that if we expand it will intensify our 
problems later, so with this in the back of our minds we under- 
estimate our requirements of steel. 


All employers have in mind that if they expand their present 
set-ups it will jeopardize their price controls in the future after the 
defense problem is over. That, I would say, is the biggest obstacle 
in the way of the defense effort ; namely, fear of the future : If we 
expand we will intensify our problems later. 

Actually, if they don't plan an expansion program the result will 
be a construction drunk. That is, they will just go ahead and ex- 
pand to meet the needs as they come along, instead of working 
the problem out in a proper way. We must make certain that we 
are utilizing all our present capacity. We must then determine our 


further needs and find what expansion is necessary, then plan that 
expansion according to those needs. 


The Chairman. Mr. Carey, does the C. I. O. organization find 
discrimination — that is, racial, religious, and so forth — against the 
workers in the defense program ? 

Mr. Carey. We find there have been a great number of practices 
in industry that have prevented full use of our resources in man- 

There is, of course, the race question. Negroes haven't been given 
sufficient opportunity to perform at jobs other than janitor work. 
There we have an almost untouched area that we can move into 
and see that Negroes are given opportunity for training. We can't 
list all the cases where Negroes were discriminated against but it 
is true that many such cases exist. 

We would not be painting a proper picture if we said: 

"Well, there have only been a thousand or so cases where Negroes 
were denied machinists' jobs." 

When we look into this we see how many times Negroes are dis- 
criminated against by being denied an opportunity to train for these 
skilled jobs. It will take a long time to break down the barriers 
that have been created. Employers often use as an excuse the fact 
that workers won't work with Negroes. When we get into the plants 
in industry we find this to have no basis in fact. Our members ex- 
press no recognition of race or religious lines and work in complete 
harmony in industry today. I think employers are just using this 
as an excuse for not hiring Negroes — saying that they would hire 
Negroes if their workers would work with them. 

This is something that has to be worked out through collective 
bargaining, and it is being worked out, but certainly not rapidly 

The Chairman. I understand that the C. I. O. in its constitution 
and otherwise, does not advocate discrimination of this kind? 


Mr. Carey. No, sir; and there is no reason why we should; in 
fact, it would injure our own program. 

If we set up barriers against Negroes — wouldn't take them into 
our unions, they would be a labor supply that would be willing to 
work for lower wages than other people. We find there is no reason 
to set up race barriers. In fact we are extremely anxious to break 
these barriers down. 

There have been practices in unions, however, where Negroes were 
kept out and there are practices in existence today where union 
constitutions contain discrimination clauses, but there are no cases 
of race discrimination in the C. I. O. — not one case like that. 

The Chaerman. In other words, not only on the grounds of 
humanity but of self-defense, it is a good program to follow? 

Mr. Carey. And also from a patriotic standpoint. Negroes can 
make a contribution to the Nation and every additional pair of hands 


working at a higher skill is a contribution to our Nation and everyone 
benefits as a result. 

The Chairman. Congressman Arnold? 

Mr. Arnold. No questions. 

The Chairman. Dr. Lamb? 

labor's representation on national defense organizations 

Dr. Lamb. Mr. Carey, you complain, I think, in your statement, on 
the lack of representation of unions on some of the national defense 
organizations. For example, priority committees and the like. 
Hasn't there been a recent organization in Mr. Hillman's division set 
up specifically to benefit labor and the labor movement? 

Mr. Carey. Yes; we are having a reorganization day which will 
be some indication that we have not obtained perfection over the 
period of a year. The change that is taking place is to establish 
additional advisory committees, but we have some question as to 
whether or not advisory committees will satisfy the present needs- — 
whether labor can make a contribution through an advisory commit- 
tee, especially when one has difficulty finding people who are willing 
to take the advice. 

These advisory committees that are now set up in industry are not 
in any sense actual and equal participation of labor. 

Where labor desires participation is where the policies are formu- 
lated and carried out, and that is not done in the advisory committees 
that are set up under the new programs established by Sidney Hill- 
man. The most that one could say is that they are a step in the right 

Dr. Lamb. You think that is a step in the right direction? 

Mr. Carey. A very small step in the right direction, I would say. 

Dr. Lamb. You speak as if there was opposition to union repre- 
sentation in the defense effort. Who is responsible for the opposition 
that you say exists? 

Mr. Carey. I suppose naturally there would be a lot of opposition 
in industry — that is, management, which has had the feeling that it is 
their divine right to operate the production forces of the Nation. 
They desire to continue exercising this right. 

To question this authority you find the same opposition that you 
have in attempting to gain recognition of a union to deal with man- 
agement in collective bargaining. 

Dr. Lamb. You are making a rather general and sweeping state- 
ment as to what you imagine it is. Have you any specific examples 
to bear out your statement ? 

Mr. Carey. Yes; I will refer to the aluminum situation that this 
Nation faces today as a result of labor's being denied a voice in 
determining whether the capacity would be sufficient to meet the 

Representatives of corporations come to Washington and negotiate 
contracts with their own associates of the same corporation. The 
figures taken to determine the capacity requirements in aluminum 
are given by people who formerly were or are at present officials of 
the Aluminum Corporation of America, and naturally represent the 
corporation's point of view. 


We find that the dollar question was involved to a greater extent 
than the question of proper national defense. 

There is no question at all that labor is not properly represented 
in the present defense set-up. All the operating divisions, including 
priority committees are dominated completely by representatives of 

Dr. Lamb. You also made some rather sweeping criticisms with 
respect to the failure to expand. Do you know of any published 
statements by manufacturers or groups of manufacturers opposing 
expansion ? 

Mr. Carey. Well, of course, it wouldn't be necessary for them to 
oppose expansion in a public statement, but it was done and you 
Lave the statement of the Gano Dunn report — the original report 
and the revised report. It stated that we had sufficient steel to meet 
our requirements and then a couple of weeks later we found that we 
didn't. We also have the report made by Ed Stettinius which stated 
that we had sufficient aluminum, but two weeks following that state- 
ment he declared that we would have to put in operation a voluntary 
priorities system; two weeks later a mandatory priorities was put 
into effect. 


We have any number of statements. The last statement I can 
recall is the statement of Mr. Fuller. Mr. Fuller said we had ade- 
quate steel. I think in a couple of months' time we will discover 
that we had an actual shortage. I believe he said the same thing 
with respect to aluminum. But the whole position of industry is to 
protect monopoly. There is a fear that any expansion may jeopardize 
that ; therefore they don't expand. 


Dr. Lamb. The C. I. O. has recently gone into the field of organiz- 
ing construction workers. What is the situation with respect to 
priorities in this field? Have you any information on that subject? 
Have priorities been invoked in the field of construction ? 

Mr. Carey. Of course, if a priority is invoked in steel or in metals 
that are used in building construction, the housing program will be 
seriously affected. The whole living standards of the citizens of the 
country will be affected. 

A priority in any one of those fields will tend to affect refrigerators, 
the type of refrigerators you can buy — the materials that are in them. 
The same thing is true of radios, automobiles and everything else. 
Everything connected with the building of a house, particularly a 
large apartment house will be affected also by steel priorities. 

Dr. Lamb. But you have no knowledge of the direct invocation of 
priorities in the field of building? 

Mr. Carey. No; I am not particularly familiar with that. 

Dr. Lamb. Getting back to the question of the reorganization of 
Mr. Hillman's division; how do you secure representation on those 
committees? Are your members given the right to nominate mem- 
bers on those committees? 


Mr. Carey. In the present set-up of the new advisory committees 
we are called upon to nominate people qualified to represent labor, 
and then they are appointed by the O. P. M. 

Dr. Lamb. But you do nominate them ? 

Mr. Carey. Yes, sir. 

Dr. Lamb. Your own representatives? 

Mr. Carey. Yes, sir. 

Dr. Lamb. You are satisfied, then, with the right to nominate those 
people, are you not? 


Mr. Carey. Yes, sir; but we are not satisfied with their position 
being solely advisory. We think they should be in the operating 
end and formulating the policies. Because labor's representation is 
solely on an advisory basis, it merely represents policies of the O. P. M. 
in the ranks of labor, instead of taking tha views of labor and repre- 
senting those views in carrying out the program of the defense effort. 

We have a good example of how labor is represented in the case 
of the steel priorities committee. You have a chairman of the prior- 
ities committee. The representative of labor is someone from the 
Department of Labor. He is the labor consultant on that com- 
mittee. There is a consumer consultant who is the president of the 
Continental Can Co., not a representative of the ultimate consumer 
at all. So you have one consultant from labor or representing labor, 
a consumer consultant and all the others. 

According to the organizational plan, the chairman of the committee 
listens to the views of the consultants but he is not bound in any 
way by their decisions. Nor are there any votes taken. This type of 
representation is inadequate and unsatisfactory. 

defense training 

Dr. Lamb. You understand that this committee is interested in 
such matters as the operation of the Office of Production Manage- 
ment, running only insofar as it is concerned with the interest of 
workers moving from State to State in search of jobs or insofar as 
it runs in terms of substitute labor supplies which will prevent such 

That is the reason the committee investigates and questions with 
respect to these matters, and particularly interests itself in total 
community problems or in problems of training. 

In the training sphere you are very critical of the present proce- 
dure because you feel that the workers are not given an adequate 
opportunity, according to what you said. 

The principal training within industry is carried out by workers, 
under supervision, to be sure, but nevertheless by workers. It seems 
to me that the workers have adequate representation there. 

Mr. Carey. Most of the representatives of the O. P. M. in the 
present in -plant training and in-industry training are representatives 
of industry. 

Dr. Lamb. I wasn't referring to the national organization within 
industry training, I was referring specifically to the operations where 


the training 1 takes place. Those are workers engaged in training 
workers, aren't they? 

Mr. Carey. Yes, sir; and that is where the training should be 
placed. That is where it has to be done. 

Our chief criticism of the present set-up is that there is tre- 
mendous waste as a result of priorities, as a result of a lack of 
coordination of a number of governmental agencies engaged in the 
training program. 

The governmental agencies are working more in cooperation today 
than ever before. That is just of recent date, however. Our criti- 
cism of the training program is in part a criticism of the whole 
thing — of the lack of proper planning, a lack in coordinating the 
requirements in skills and manpower with the training program. 

The problem is to supply people with the proper skills at the 
proper time. There is very little coordinaion between the job and 
the people required and the "jobs that we have available. 


Dr. Lamb. One last question. The committee, in its field hear- 
ings, has heard from representatives of labor organizations with re- 
spect to their activities locally, on housing — committees of one sort 
or another that have been set up in an attempt to secure adequate 
local housing. Has the national organization accumulated the record 
of the efforts of those groups in a form which might be transmitted 
to this committee? 

Mr. Carey. Yes; we can have that transmitted this afternoon. 
They will send over a copy of the housing plan. 

Dr. Lamb. We will be glad to have it. Your earlier testimony was 
quite inadequate and vague with respect to that. 

Mr. Carey. That is because we have treated that in a brief. 

(The material referred to above is as follows:) 

Memorandum on Defense Housing Submitted to the Office of Production 
Management by the Congress of Industrial Orc.anizations Housing Commit- 
tee, January 23, 1941 

Enough has been said already concerning the importance of adequate housing 
for workers as a factor in the current defense program to make unnecessary any 
restatement or reemphasis of this subject. 

Congressional recognition that housing deserves prominent consideration along 
with plant expansion in the gearing of the industrial machinery of the Nation to 
the defense program, is indicated in the passage of legislation some months ago 
appropriating funds to provide for nearly $300,000,000 worth of housing. As in 
other phases of the defense program, the problem now is not one of authorization 
or appropriation, but one of production. 

Under the terms of the legislation and the program which lias been formulated 
in accordance with it, the two principal Federal agencies undertaking direct 
construction are the Navy Department and the Public Buildings Administration 
of the Federal Works Agency. As between these two, about four-fifths of the 
direct construction has been assigned to the Public Buildings Administration. 

The record of this agency to date deserves serious consideration. The Lanham 
bill, which appropriated $150,000,000 to build an estimated 50,000 houses, was 
submitted to Congress in August of last year and was passed before the middle 
of October. It was indicated with its submission that Public Buildings Admin- 
istration would be the operating agency under it. As of December 31, 1940. it is 


officially reported that Public Buildings Administration has under contract only 
6,800 dwelling units involving 21 separate projects, of which 1 project in San 
Diego alone comprises nearly half of this total. Thus, in 4 months after the intro- 
duction of this legislation, and two and a half months after its final passage, con- 
tracts have actually been let for less than one-seventh of the total number of 
dwelling units to be constructed under but one of the two authorizations to 
Public Buildings Administration. 

It should, furthermore, be noted that there is a substantial time lapse between 
contract award and completion date. On the contracts let thus far, completion 
times are specified but not guaranteed for from 125 to 300 days from the date 
of aw.ard. This means May 1 to October 1, 1941, before even this small portion of 
the total job is ready for use in the national-defense effort. 


While housing may not yet be a real retarding influence in the defense program, 
from the record there is clear indication that it is potentially one, and will 
become such as soon as plants now under construction are ready to go into produc- 
tion. Now, however, is the time to do something about the situation, not later 
when the retarding influence appears. Strange as it may seem, housing is a 
more extended task from the point of view of time than the construction of the 
plants which it is intended to serve. It should, therefore, have been started in 
advance of plant extension. It is now obviously lagging far behind plant 

Housing from a production standpoint is a peculiar and specialized part of 
the construction industry. While it may be indicated that Public Buildings 
Administration, for all of its record in heavy construction, is almost wholly 
inexperienced in the production of small single-family houses, a similar charge 
of inexperience in actual building could be made against almost every other 
governmental agency. This fact merely aggravates the gravity of the situation. 

It can be stated that conditions have been harmed rather than helped by placing 
a tremendously big job in the hands of one agency. Leaving aside for the moment 
the nearly $50,000,000 worth of housing which Public Buildings Administration has 
been assigned to do for the Army, that agency has a task of 50,000 houses in 
approximately 300 separate projects. Each project involves hundreds of indi- 
vidual decisions concerning site, plans, labor problems, material sources, etc. 
To place under contract 1 project per day, a rate not yet attained, would mean 
that the last houses would not be started until late 1941 and could not be ex- 
pected to be ready for occupancy until 1942. This does not mean that all of the 
housing needed for national defense will be ready by 1042. It means that only 
the first 50,000 of the 700,000 units which the Housing Coordinator estimates may 
be needed for a full defense effort can be expected by 1942. Statements by defense- 
housing officials give a false impression of progress by claiming credit for all 
normal building, as well as the limited defense program. 


Coordination does not mean loading one agency beyond its physical capacity to 
produce. To get the presently authorized housing planned and under contract 
in a reasonable time calls for a division of the effort along some logical lines, 
so that decisions can be made. There are other agencies as well equipped and 
other personnel equally or better equipped to handle housing, to whom portions 
of the task could be* assigned. The legislation involved makes this clearly 

But the problem goes beyond that of merely getting the job under contract. 
Actual production will not necessarily follow smoothly and automatically. The 
construction industry is for the most part local in its characteristics, and as such 
has definite limitations to its local capacity and to its local powers of expansion. 
In the problems of Army encampment construction already encountered, this 
fact lias been apparent to those who understand the construction industry. 

The difficulties which were faced in this Army encampment work will be multi- 
plied many times when the construction of defense housing is undertaken. The 
problem, to begin with, is not as simple as in the case of the Army encampments. 
It is the assumption of all concerned that private construction is expected to 
shoulder a fair share of the defense housing load. These private operations must 
continue. It is not necessary to cite an illustration of what may occur. A 


specific case may be cited where it will occur. In San Diego, Calif., it is re- 
ported that Public Buildings Administration has recently let a contract for 3,000 
dwelling units for aircraft workers. The time specified for completion is 300 
days. Records indicate a local private building program going at the rate of 
2,400 houses per year, and these were undoubtedly assumed as potential for the 
coming year in determining the number of units to be built by direct Government 
effort. The construction workers will come from the San Diego area. Their 
importation from other sources is an almost impossible task. While there is a 
national supply of building trades workers adequate to meet the demand of even 
the extensive construction program now under way, it does not follow, from a 
practical standpoint, that at a particular spot, any given program can be met. 
Such being the case, it may be assumed that adequate local labor will not be 
available for both the 2,400 units expected from private sources and the 3,000 
expected from the Government Housing needed for defense must fall short 
in either one category or the other. 

Another illustration is supplied by the problem in Charleston, S. C, where 
rapid expansion of shipyards is under way. There, 1,600 dwelling units have 
been allocated for direct Federal construction. Yet statistics indicate an annual 
rate of residential construction for the past 15 years of not to exceed 300 houses 
per year. A 500-percent expansion of the local construction industry is possible 
but not probable. It becomes less probable in the face of additional construc- 
tion work at the navy yard itself. 


Thus, by doing defense housing entirely under conventional patterns, the 
local building industry and labor supply are entirely absorbed on these projects 
while normal building operations are suspended. On the other hand, if the 
shell of the house and its parts are prefabricated in factories away from the 
site of erection, it spreads the work and lessens the disruption of building now 
in progress or planned. 

These are but a few of the problems involved in the defense housing program. 
The implications of potential failures sufficient to seriously handicap the general 
defense effort are extremely serious. If any of these problems are receiving 
serious consideration by the agency charged with the task of producing defense 
housing, it has not thus far been indicated. With a job big enough to call for 
the best effort of all groups concerned, defense housing seems to be thus far 
regarded more as a plum to be handed out to a select group of contractors with 
the understanding that it be used for the profit of a select group of crafr labor 

As thus far administered the defense construction program has operated to 
entrench vested interests of industry and labor with little or no regard for 
maximum efficiency or fair play for the workers. This program would seem 
to offer an opportunity for mass production methods in construction that would 
serve to bring this industry abreast of twentieth century industrial methods. Yet 
so far it has operated only to promote conventional building technics and narrow 
craft procedures that have long been held responsible for excessive costs, time- 
consuming delays, and exploitation of both the public and labor. 

A maximum constructive purpose cannot be served, however, by a purely criti- 
cal approach. It has already been indicated that the bottleneck in making de- 
cisions must be broken in order to get needed defense housing under contract 
within the immediate future. A logically severable portion of the task must he 
assigned to another agency capable of independent decisions. 

A second great bottleneck, that of production after decisions are made, calls 
for ingenuity in many cases which must go beyond orthodox procedures. 

Under date of October 14, 1940, the Congress of Industrial Organizations ad- 
dressed a letter to the National Defense Advisory Commission urging that due 
consideration be given to the possibilities of prefabrication in meeting defense 
housing reeds. 

Since that time, it has come within our province to make a considerable study 
of the potentialities of the so-called prefabricated-houses industry. For the most 
part, they are pioneers in a new field. Their current efforts, however, are not 
the efforts of the moment, but represent more than a score of years of research 
and study. Their record on production may not appear Lo be tremendously exten- 
sive, but the handicaps to date have been in the field of marketing, rather than 
in any technical field. Any honest appraisal of the industry will show conclu- 


sively that from a technical standpoint they are today out of the experimental 

We feel that this industry has something of great value to offer to the national- 
defense program. We make no claims that all defense housing could be cheaper, 
better, and more quickly produced by prefabrication. The industry is not big 
enough to do the whole job. We are sure, however, that in a number of situations 
the industry has a more perfect answer to the problem than anything else 


We would point to those areas where the isolated nature of the defense work 
being done makes it inconceivable that the housing needed for defense workers 
could for a long time in the future be absorbed in a normal market. To proceed 
in these areas by conventional methods must mean at some later time a long 
period of real-estate inactivity. The cost of housing is thus increased by the real- 
estate financial losses which must inevitably follow, plus the unemployment and 
stagnation of the building industry. To areas such as these, prefabrication can 
offer housing which may be used for the duration of the defense emergency, and 
which may later be easily removed to other areas where housing is vitally needed. 
Reference is made to the rural housing needs of the South: to the needs of the 
Bureau of Indian Affairs ; and to the needs of many other governmental agencies 
where good, low-cost housing is a real part of worth-while social programs. 

Prefabrication, likewise, can make a distinct contribution in those areas where 
current private building is going at full capacity and where to try to add to the 
housing supply by conventional means can only mean a shift of the available 
labor from privately sponsored projects to public sponsored projects with little, 
if any, net increase in the number of housing units to be made available. Here 
prefabrication would make it possible to get a substantial portion of the work 
done elsewhere in areas where defense work is not going on, thus adding to the 
housing of the defense area with a minimum disturbance of the local building 

Thirdly, the prefabricated-house industry can make a distinct contribution in 
those areas where building by conventional means involves the expensive impor- 
tation of labor not locally available. Most dramatic of these cases are the numer- 
ous island bases. In these areas prefabrication not only offers tbe fastest and 
cheapest answer, but fabrication in continental United States will preserve much 
of the labor for American workmen. 

The logic of its use to meet a portion of the defense housing needs parallels 
the current problem of airplane production. In that case not only was the 
organized aircraft industry expanded to capacity, but resort is being had to the 
automobile industry to augment production. The construction industry is now 
operating close to efficient capacity in building plants as well as needed housing. 
Prefabrication can augment this production without subtracting from what is 
being done. 

These situations where prefabrication offers the most logical solution to a de- 
fense housing problem have been already indicated in the need analysis work of 
the Defense Housing Coordinator. These cases can present a clearly severable 
portion of the defense housing program, which can and should be taken from 
Public Buildings Administration to lighten their presently almost impossible 
task. The character of the problems involved is so distinct that there can be 
no charge of another and duplicating agency. Perfect coordination in this case 
is served best not by overconcentration, but by the decentralization which this 
change would involve. Prefabrication is not a field in which Public Buildings 
Administration can boast of a particular knowledge. Just as a matter of fact, 
there are no existing agencies in the Federal Government who can show an 
extensive experience in the large-scale construction of small single-family dwell- 
ings, likewise, there are no agencies with an extensive experience in the pre- 
fabrication field. In several, however, there have been successful experiments 
on a small scale and the personnel knowledge and imagination is certainly in 
existence to do the job. 

An idea such as has been here presented may be called visionary or imprac- 
tical. Such charges often come too easily from a decadent civilization. If we 
are going to continue progress, it must be with bold minds. The ingenuity of 
this country has always been its outstanding characteristic. 



In a wider sense, the proposal here made may be revealed by comparison to 
be most conservative and practical. Prefabrication as the term is commonly 
understood and here used, is not a complete change in method but a mere step 
in a line of development. The lirst step in that line came when the first piece 
of lumber was sawed to a standard size at a sawmill instead of being hewn to 
shape at the construction site, or when the first bricks were made. Today, pre- 
fabrication of all equipment, of kitchen cabinets, windows, and doors, is an 
accepted procedure. The additional step here under discussion relates only to 
an addition refinement in the construction of the shell. 

Furthermore, these are extraordinary times calling for extraordinary meas- 
ures. The "prefabrication" of cargo-carrying vessels would not have been con- 
sidered a dozen months ago. Today it is a specific proposal and program. 

As far as doing something which hasn't been done before, that is now more 
often the usual than the unusual thing. Typewriter manufacturers make ma- 
chine-gun parts without past experience ; tugboat builders contract to produce 
destroyers, and tanks go into production in automobile plants. Each of these is 
a far greater deviation from normal fields than for segments of the construction 
industry to carry the processing of building materials one step further, or for 
larger building units to be assembled away from, rather than actually on the 
final site. 

In fact, it may be insisted that it is no more experimental or impractical to 
attempt to handle a portion of the defense housing need by processes of prefabri- 
cation, than it is to put into large-scale production at the site either a contractor 
who has previously operated only on a few houses at a time where trial and 
error and cut and fit were adequate, or a contractor who lias done large buildings 
but has never attempted a multitude of small houses involving radically different 
■construction procedures from those involved in limestone and steel skyscrapers. 


Labor recognizes that the methods by which things are done measure impor- 
tantly the amount of accomplishment. The program here urged may not bulk 
large in terms of the dollar costs of the entire defense effort. Housing itself is 
but a small part of the tremendous industrial expansion upon which the country 
is embarking. That portion of defense housing which will most satisfactorily 
yield to the changed procedure here urged is again limited. However, in these 
cases where it is needed, it is of controlling importance. A review of defense 
housing needs, area by area, will show that in almost every case whore adherence 
to orthodox methods must inevitably result in bottlenecks in housing, lack of 
housing will, likewise, result in immediate bottlenecks in defense production. 
The suggestions here made have an importance, therefore, which transcends 
the dollar value of the field which is involved. We may not be talking about a 
majority of the housing needed for defense, but we are talking about the most 
important housing needed for defense. 

The proposals herein advanced will make possible the prosecution of this 
program of defense housing with a minimum of disturbance to the normal home- 
building of the Nation which should not and need not be sacrificed under cover 
of the emergency. 


Mr, Carey. We will send over a copy of the housing plan with some 
additional information secured from the committees coming to Wash- 
ington to appeal for better housing. 

Dr. Lamb. To appeal to whom * 

Mr. Carey. Through the Housing Authorities here in Washington 
with Mr. Palmer's office. 

Dr. Lamb. You have had such meetings with them? 

Mr. Carey. Yes, sir. 

Dr. Lamb. And you got satisfaction from them ? 

Mr. Carey. We received some clarification on what has to be done 
in order to secure proper housing in Toledo and other similar places. 


Those committees will come here and meet with the authorities to see 
whether or not something can be worked out to meet the individual 
problem locally. 

We are very hopeful that something can be done. We think that it 
is long overdue. 

Dr. Lamb. That is all, Mr. Chairman. 

The Chairman. Thank you very much, Mr. Carey. We appreciate 
your coming here. 

The committee will stand adjourned until 10 o'clock tomorrow 

(Whereupon, at 3 : 45 o'clock p. m., the committee adjourned until 
10 o'clock a. m. Saturday, July 19, 1941.) 


SATURDAY, JULY 19, 1941 

House of Representatives, 
Select Committee Investigating 

National Defense Migration, 

Washington, D. 0. 
The committee met at 10 a. m., July 19, 1941, in room 1015 of the 
New House Office Building, Washington, D. C, Hon. John H. Tolan 
(chairman) presiding. 

Present were : Representatives John H. Tolan, of California (chair- 
man), and Laurence F. Arnold, of Illinois. 

Also present were: Robert K. Lamb, stuff director; Mary Dublin, 
coordinator of hearings ; Creekmore Fath, acting counsel ; F. Palmer 
Weber, economist ; and John W. Abbott, chief field investigator. 
The Chairman. The committee will please come to order. 
The first witness, Mr. Reporter, is Mr. C. B. Baldwin, Administrator, 
Farm Security Administration. 


The Chairman. Mr. Baldwin, we want to say to you we appreciate 
your coming here this morning. We have been holding hearings all 
this week here in Washington. We have heard the heads of the 
various departments and I think you are very familiar with the work 
of this committee and we will not repeat it. 

We followed up our hearings of last year by going to San Diego, 
Calif. ; Hartford, Conn. ; Trenton, N. J. ; and Baltimore, Md., and then 
back to Washington, focusing the investigation on the subject of 
migration resulting from the national -defense program. That is the 
reason that the Congress continued our committee. 

At this point we shall introduce your statement into the record and 
then Congressman Arnold has some questions that are based upon 
your statement, which, incidentally, I think is very fine. 


This brief statement is intended to summarize the more complete statement 
which I have submitted to the committee. The longer statement consists of four 
separate papers, prepared at the committee's request, which outline the effects 
of the present emergency on the work of the Farm Security Administration 
and on the supply of farm labor. I want to make it plain that the conclusions 



drawn in these papers are based on necessarily hurried and incomplete studies 
by our field staff, and therefore should be regarded as tentative. We are hopeful 
that the work of this committee eventually will give us a much better-rounded 
picture of the impact of the defense program on the problems with which Farm 
Security is dealing. 


The last decade has seen migrations of great numbers of people within our 
country. A multitude of causes are responsible for this movement. More than 
any other single factor, however, rural poverty has been at the root of recent 

No part of the Nation's economy was so stricken by depression as agriculture ; 
and no one has known poverty any worse than that suffered by the poor farmer. 
Several million poor farmers were caught in the vise of collapsing foreign and 
domestic markets on the one hand and foreclosures, mechanization, and drought 
on the other. 

Thousands of these families were pushed off their land because they could 
not make it pay, because tractors took their place, or because they were ruined 
by drought and erosion. Most of these displaced farm families became migrants. 
They joined the army of workers who follow the crops from State to State, 
looking for seasonal jobs on big commercial farms. 

The Farm Security Administration has tried to do something to relieve the 
worst aspects of migration, and to halt unnecessary migration at its source, by 
striking at the basic causes of rural poverty. I believe the committee already 
is familiar with this work as a result of earlier hearings. 


More and more of our entire economy is being thrown into the effort of 
national defense. The effects of that effort go far beyond the production of 
planes and tanks and guns. Under the impact of the defense program, great 
changes in patterns of production are taking place. To determine the impact 
of defense on interstate migration, we must look first at such underlying factors 
as rural poverty to see how they have been affected by the defense program. 

We in Farm Security can best gage what is happening to the neediest group 
of farmers through the operations of our rural rehabilitation loan program. 
Borrowers served by this program are typical of great numbers of farm people. 
What defense does to them and for them is important, since we can infer that it 
affects from two to three million other low-income farmers in about the same 

So far, only one inference has been possible : The defense boom has not yet 
made any substantial inroads into rural poverty. 

There has been no let-up in the demand for Farm Security Administration 
assistance. Standard rural rehabilitation loans made by the Farm Security 
Administration total about the same this year as last. 


There are several reasons why defense activity has not cured the economic and 
social problems which made necessary the Farm Security Administration pro- 
gram. It is natural that the most direct stimulus of defense has been felt in 
industry. Agriculture as a whole has felt the effects more slowly and in- 
directly, through expansion of the domestic market. To speak of effects on 
agriculture as a whole, however, is misleading. Our agriculture consists of 
many sections, and all of them have not been affected equally. 

Greatest effects of defense activity have been seen in areas where the most 
defense work is concentrated. Unfortunately, there has been least defense 
activity in those very regions where there has been most need for Farm Security 
Administration assistance. About 44 percent of all Farm Security borrowers 
are concentrated in the South, but only 10 percent of all defense contracts have 
been placed there. On the other hand., less than 3 percent of Farm Security 
Administration borrowers are in the northeastern section of the country, which 
has received 45 percent of all defense contracts. 

Secondly, even when they live near defense projects. Farm Security Adminis- 
tration borrowers are at a disadvantage in the competition for new jobs. They 
are, in general, older than the average industrial worker. More than half of 
all clients served by Farm Security Administration this April were at least 45 
years old. Most of them are inadequately trained. Few of them have the 
mechanical skills for which defense industry is calling. 


The Chairman. When we report back to Congress we would like 
to have both sides of the story. 

Mr. Arnold. The association you represent has never polled its 
membership on the question of the employment of Negroes, has it? 

Mr. Sargent. No, sir. 


Mr. Arnold. In its recent hearings, the committee has heard sev- 
eral panels of prominent defense industrialists. Almost without ex- 
ception they have expressed concern over the shortage of housing 
for their defense workers. What does the National Association of 
Manufacturers think of the work of the Division of Defense Housing 
Coordination % 

Mr. Sargent. We have made no study of that. We believe that 
the housing problem is one which must be settled in each locality 
according to its needs. I may have some supplemental observations 
to make in view of the obvious and well-known shortage of housing 
which exists in many communities where new or additional defense 
plants are being created. 

It would seem entirely logical that the Federal Government should 
concentrate its own housing activities in the defense field and elimi- 
nate for the time being any emphasis upon the insistence of housing 
construction in nondefense areas. 


Mr. Arnold. Has the National Association of Manufacturers made 
any studies of the effect of poor housing on labor turn-over? 

Mr. Sargent. Not for many years. We were interested in that 
subject rather actively, immediately during and following the World 
War; but in recent years we have had the feeling that that was 
largely a question which had to be settled in the light of local condi- 
tions, and that they varied so widely from one section of the country 
to another that it would be inadvisable for us to adopt any general 
national policy or recommendation. 

Mr. Arnold. Do you know of any specific industries which have 
had difficulty in holding their workers because of housing shortages? 

Mr. Sargent. I have heard of none which has had difficulty in hold- 
ing workers. I have heard of several, where new plants are being con- 
structed which will go into operation in 1941 and 1942, which are seri- 
ously concerned over the housing situation in the areas of those plants, 
as affecting their ability to secure workers when the plants are supposed 
to come into operation. 


Mr. Arnold. What recommendations has the National Association 
of Manufacturers for meeting the post-defense problems which may 
be expected to emerge? 

Mr. Sargent. We are engaged in a comprehensive study of that 
particular problem. 

We organized in 1936 a committee on the study of depressions, 
which was supposed to examine the causes of both booms and depres- 

60396 — 41— pt. 17 9 


sions and to make recommendations for their alleviation, if not their 

Subsequently, beginning this year, that committee has been ex- 
panded and is now our committee on economic policy, which is 
studying this very problem. 

In the report last December of the then committee on the study of 
depressions, we did make some specific recommendations as to govern- 
mental labor and planning policies which would tend to relieve the 
situation which might otherwise confront the country at the end of 
this defense period. We are still studying that problem. As you 
realize, it is a broad and comprehensive problem, a very complicated 
one; but we expect to amplify our previous recommendations with 
subsequent recommendations. 


We have also made a survey very recently of views of all the mem- 
bers of the American Economic Association, as to whether they 
thought there was likely to be a post-armament depression, and if so, 
why, and what measures might be taken either now or at the end of the 
armament period in order to alleviate the situation. 

In addition to that, I had the pleasure of appearing a week or so 
ago before a subcommittee of the House Labor Committee, which 
is studying a bill sponsored by Representative Voorhis, of California, 
for the establishment of a commission on which governmental and 
nongovernmental groups would be represented, to study these prob- 
lems. I testified in favor of the measure, recommending some modifi- 
cations that we thought would improve it. 

Mr. Arnold. That is all, Mr. Chairman. 

The Chairman. What recommendations have you to make with 
reference to the post-war period? Have you anything in mind now, 
Mr. Sargent? 

Mr. Sargent. Well, we believe post-war conditions will depend to 
a large extent upon such things as, for example, the tax policy to be 
adopted by Congress, the labor policy of the Government on the one 
hand and of management and labor on the other ; and to a consider- 
able extent upon whether we have some such coordinated study of the 
effects of priorities as I indicated, rather than scattered applications. 

Those are fields in which we believe real study and real success could 
be achieved. 


The Chairman. Well, suppose all that were accomplished, and yet 
at the end of this emergency we have, say, 5,000.000 people, who have 
left their states of legal residence and are broke and unemployed. 
What can we do now in anticipation of such a condition? Can we 
do anything? 

Mr. Sargent. Various suggestions have been made. Of course, Mr. 
Keynes over in England has proposed — and I believe some people in 
this country have concurred — a form of enforced savings under which 
money would be collected from workers in the defense industries in a 
compulsory manner and returned to them after the period is over. 

Mr. Lubin, I think, advocated a special social-security tax as a sup- 
plement to the present taxes for that purpose. 


Thirdly, it must bo recognized that rural poverty in recent years was not 
simply a result of the depression. There are major, long-time trends working 
against the small farmer. For example, increased mechanization and com- 
mercialization in agriculture have been responsible for much of the distress 
of the poorer farm families. 

Both mechanization and commercialization continue unabated. In fact, recent 
rumors about the danger of farm-labor shortages have led to greatly increased 
purchases of farm machinery in some places. 

Some of the farm population will doubtless be drawn into defense industry. 
But that movement will be offset at least in part by the constant decrease in 
the number needed to carry on agricultural operations. 

In summary, we may conclude that while agriculture is undoubtedly sharing 
in some of the benefits of increased industrial production, there remain wide 
(areas in which the effects have been slight, and in which the basic trends 
continue to make great hardships for the more handicapped part of the farm 


It may seem contradictory to speak of farm-labor shortages, and at the same 
time say that there is still a substantial number of impoverished farmers. How- 
ever, this very contradiction points to one of the keys to the problem. It is 
entirely possible to have the greatest poverty in one farm area and a shortage 
of farm labor in another. Dislocation of agriculture has produced maldistribu- 
tions of labor supply. In fact, much of recent agricultural migration was simply 
a peculiarly painful method of overcoming that maldistribution. 

It has been predicted that labor shortages will be one of the major problems 
to be faced by agriculture in the coming months. The Farm Security Adminis- 
tration has not attempted to make forecasts of the farm-labor situation. How- 
ever, reports submitted by our field people do give a partial picture of the farm- 
labor situation as it is developing this year. 

These reports cover 36 States. In almost every one of these States some farm 
labor shortages have been rumored. Nevertheless, the actual shortages so far 
have been local in character, and confined to a relatively few areas. It seems 
probable that in many places fears of labor shortages have been exaggerated. 
There can be little doubt that the total supply of farm labor is being reduced: 
but the general surplus still is so great that in most areas the problem seems 
to be less one of actual shortage, than of proper use of the existing supply 
of labor. 

In some places, it appears that enough workers are available, but that higher 
wages will be required to bring them into the labor market. Farm wages have 
risen during the past year, but they remain far below industrial wages. 
With rising industrial activity throughout the country, low wages in agricul- 
ture are less attractive than ever. 

Here is a brief summary of the reports on farm labor we have received 
from our field people : 

In 5 of the 36 States, it was reported that farm labor shortages of some mag- 
nitude were developing this year. These States are New Jersey, Maryland, 
Connecticut, Virginia, and North Carolina. In all 5 cases, wage levels were 
mentioned as a main factor producing shortages. In 14 of the 36 States it 
was reported that slight or highly localized shortages existed, while in the 
remaining 17 States reports of shortages were inconclusive. 

Further details of the Farm Security Administration reports on farm labor 
shortages are contained in our more complete report. 


A special type of Farm Security Administration activity, which is of im- 
portance in any discussion of migration, is our program of farm family labor 
camps. Defense activity so far lias nol eliminated the need for any of the 
already established camps. It has, however, created a different type of need 
for camps in new areas. 

The first camps were built by the Farm Security Administration in California 
in 1036. They were designed to meet needs fell most sharply in California, 
hut occurring also in other parts of the country. On the one hand, large num- 
bers of low-income farmers, driven from their farms by drought, mechanization, 
and the generally depressed condition of agriculture, were forced to look for 
work as farm laborers. On the other hand, in many places there was a demand 
for plentiful supplies of wage labor during the harvest seasons. As a result, 


hundreds of thousands of landless farmers moved to areas where they hoped 
to find seasonal work, no matter how low the wages. 

Housing facilities for these families usually were inadequate. They slept in 
tents and makeshift shelters on the roadsides and ditchbanks. Constantly 
undernourished, they were subject to all sorts of sickness. Since they con- 
tinually moved from spot to spot, they constituted a general public-health 

Housing and sanitation were the two primary needs which the Farm Se- 
curity Administration camps were designed to meet. However, as the program 
grew, other uses for the camps developed. Occupants of camps were given 
every possible assistance in finding work. Also, local farm operators found that 
the camp residents constituted convenient pools of available labor to draw upon 
for peak needs. 

Recent requests for establishment of new Farm Security Administration 
camps have come from areas where farm labor shortages are feared. The 
Farm Security Administration is willing to do all in its power to assist 
in such situations. Clearly it is essential to national defense and to the 
general welfare of the people of this country that agricultural production shall 
not be hampered; and there undoubtedly are situations in which the Farm 
Security Administration camps can be most useful in relieving labor shortages. 
For example, one factor causing farm labor shortages in some areas is the 
inefficient use of available labor supplies. Farm Security Administration camps 
in such places are already beginning to be used as central points from which 
to recruit farm labor for jobs on nearby farms. 

Furthermore, lack of adequate housing often keeps farm workers from 
entering some areas where they are needed. In such cases, Farm Security 
Administration camps might be of great service to local growers. 

However, there are certain limitations under which the Farm Security Ad- 
ministration camp program must operate. In the first place, the camps cannot 
be built overnight, particularly since defense demands have made it difficult 
to get equipment and material for camp construction. If we plan an extension 
of the Farm Security Administration camp program into new areas, we cannot 
expect the new camps to assist in relieving farm labor shortages before the 
crop season of 1942. Secondly, a Farm Security Administration camp can 
only help to relieve a shortage where poor housing is largely responsible. Nat- 
urally, this is not always the case. Third, with a very genuine need for more 
Farm Security Administration camps in many areas, it would be wasteful to 
build camps in places where the need for them is essentially temporary. 

Within these limitations, the Farm Security Administration program can 
contribute much to better organization of the farm labor market, and to help 
relieve those farm labor shortages which are primarily the result of inadequate 


One new type of Farm Security Administration activity may be of interest 
to the committee. Millions of acres of land have been taken over by the Army 
for construction of factory sites, munitions dumps, cantonments, and maneuver 

As a result of the purchase of these great tracts, thousands of farm families 
had already been displaced by July 1 of this year. The Farm Security Admin- 
istration has assisted in the relocation of nearly 9,000 of these families. 

As the defense effort grows, more lands will be needed, more families will 
l>e displaced, and in the process of relocation, assistance from the Farm 
Security Administration will continue to be necessary. Details of this major 
job of relocation are contained in the attached statement. A few examples may 
be cited here. 

Of 413 families displaced at Milan, Tenn., 12fi required Farm Security Ad- 
ministration assistance. 

At the Fort Jackson project in Columbia. S. C, 20."> families were displaced. 
More than half received help from the Farm Security Administration in 
moving and finding new homes. 

In the area around Fort McClellan, Ala., 329 families had to move. Of 
these, 242 needed assistance. 

It should also be noted that the problem of relocation spreads far beyond 
the area actually evacuated. Farm families relocated in new areas have some- 
times created problems there. The Farm Security Administration is having to 
give assistance in cases of secondary displacement — that is. to farmers, espe- 
cially tenants, displaced by the influx of families who had to leave the defense 



In conclusion, I want to emphasize the fact that poverty in farm areas has 
not been wipe;l out by defense activity. It still exists, and it requires continued 
assistance of the kind provided by the Farm Security program. 

Migration resulting from rural poverty has been augmented by new types of 
migration resulting from the defense program. We arc attempting to modify 
and develop the Farm Security Administration program to meet these new needs. 
In this attempt, I am hopeful that we will receive considerable assistance from 
the findings of this committee. 

(The four-part statement to which reference is made at the begin- 
ning of Mr. Baldwin's paper, with a section marked "Appendix A," 
is as follows :) 


Part I. Defense in the Farm Security Administration Standard Loan 


Despite the general impact of the defense program upon the Nation, tiiere nas 
been no appreciable slackening of the demand for assistance from the Farm 
Security Administration. In May of this year new standard rural rehabilitation 
loans totaled 10,440; a year ago the figure was 10,882. A comparable demand for 
loans has been evident month by month (see table I). 

Table I. — Number of new loan agreements to individuals for operating goods 
approved each month, July 1937 to May 19^1 





New loans approved 















2. 117 









2, 138 

1, 646 








2, 562 











New loans approved 




5, 229 
12, 569 
10, 163 



18, 425 
20, 948 
27, 285 
24, 887 




10, 882 




18, 561 
10, 449 

Source: Finance Division, F. S. A. 

This does not mean that Farm Security Administration borrowers have not 
felt the effect of defense activity. At a later date we shall be able to furnish 
the committee statistical data that will indicate the extent of the movement of 
low-income farmers from rural areas. At the present time, we are able to 
offer only a qualitative analysis since presenting the data we have started to 
gather in its present incomplete form would he misleading. 

In general, it can be said that the influence of direct defense activities is 
confined to the immediate areas in which they take place. In California, for 
example, it has been found that borrowers located near defense industries or 
defense-construction activities are managing to supplement the family income 
through part-time or full-time employment of family members. Beyond a 
radius of approximately 50 miles this influence is negligible. In our seventh 
region, which includes the States of Kansas. Nebraska, and North and South 
Dakota, defense activity is fairly heavy in Kansas and virtually nonexistent in 
the other States. A report on 200 borrowers in the entire region who left their 
farms this spring, showed that in Kansas 50 percent took diivet defense em- 
ployment, in Nebraska only 20 percent, whereas in North and South Dakota 
the movement that did occur was unrelated to defense. All reports from the 
field produce this same general impression. 

For those borrowers who have been affected by defense activities the chief 
benefit has been, as noted above, the securing of supplemental employment by 
the borrower or by meml>ers of his family. In terms of the operation of onr 

60396— 41— pt. 17— —11 



program, this means that in many cases borrowers have abandoned the man- 
aged farm plan worked out with them and for them, but have not abandoned 
the farms. In some eases, it is felt that borrowers or members of their fiimilies, 
in taking such employment, have jeopardized the success of their farming 
enterprises. In others, the temporary earnings at industrial rates have in- 
creased their security on the farm and even lessened the pressure for addi- 
tional financing. 1 

Regardless of proximity to defense activities, our present conclusion is that 
where Farm Security Administration clients are located on sound farms, they 
do not tend to drop farming, their normal occupation, for industrial employ- 
ment. Some indication of this absence of movement is afforded by a sample 
study covering the 6-month period ending December 1, 1940 (see table II). The 
number of standard rehabilitation borrowers who moved to villages, towns, and 
cities was 15,979 or 3,8 percent of the 42U,0!J0 active borrowers at that time. 

Table II.— Proportion of standard borrower families who moved to village, town, 
or city during the period July through December 19JfO 

Reeion and State 

United States . 

Region I 





Massachusetts. _ 
New Hampshire 

New Jersey 

New York 

Pennsylvania. . . 
Rhode Island. ._ 

Region II 




Region III 






Region IV 


North Carolina- 


West Virginia_- 

Region V 




South Carolina . 

Region VI 




of active 

426, 090 

14, 265 












20, 998 


66, 336 

10, 342 
12, 922 

59, 007 

14, 170 
15, 743 
10, 369 
10, 098 

79. sso 

29, 058 
25, 778 
13, 326 

52, 365 

19, 483 

13, 238 
19, 644 


or city 

15, 979 






















Region and State 

Region VII 

Kansas ' 


North Dakota- __ 
South Dakota 

Region VIII 

Oklahoma 2 

Texas 2 

Region IX 



Rest of Cali- 



Region X 

Colorado 3 



Region XI 




Region XII 

Colorado (south- 

Kansas (south- 

New Mexico 

Oklahoma 4 


i Except southwest. 
2 Except Panhandle 
' Except southeast. 
* Panhandle. 
6 Not available. 

of active 


or city 

32, 999 

10, 224 

48, 519 

20. 717 
27, 802 


( 5 ) 

( 5 ) 



12, 795 

























( 6 ) 

( ! ) 




1 Appendix A presents in detail a qualitative estimate of the effects of defense on the 
Farm Securitv Administration program and on low-income farmers in region IV of the 
Farm Security Administration. It is included to furnish a basis for a more mitimate 
understanding of some of the generalized statements in the report proper. 


Apart from defense industry and construction, it is anticipated that the 
Selective Service Act will influence the status of Farm Security Administration 
borrowers and low-income farmers in general. Field reports, thus far, do not 
indicate any appreciable effect upon the Farm Security Administration program. 
It is calculated, however, that of a total of 2,350,000 men who will have been 
inducted by June 1942, approximately 1,000,000 will come from farm areas. 


The general effect of defense on agriculture is conditioned by the limited nature 
of the outlet for farm products and the uncertainty of the demand. At the same 
time, in the current agricultural expansion, there are factors present which 
threaten to intensify the problems of small-income farmers. 

The increasing demand for farm products is based primarily on developments 
in the domestic rather than in the export market. Although forecasts indicate 
substantial increases in exports, due largely to shipments under the lend-lease 
program, this development will have a limited effect on our total agricultural 
situation. For a limited number of crops our major concern will be with the 
possibility of a shortage rather than relieving the burden of a surplus; but cotton, 
tobacco, and wheat with their extensive carry-overs are virtually untouched. Nor 
is there any immediate prospect for improvement in this situation. 

The current pick-up is based almost exclusively upon improvement in the 
domestic market ; and the domestic market is being stimulated by an emergency 
situation in which substantial gains are being made in industrial worker^' pur- 
chasing power. This increase in consumer purchasing power is, of course, making 
itself felt in agriculture, and it follows that agricultural income as a whole is 
approaching closer to parity. 

Despite this stimulus, pressure for assistance from the Farm Security Adminis- 
tration has not abated. This is because these benefits have not reached that vast 
submerged group of which, to date, only a fraction have been assisted by the 
Farm Security Administration. Many of these people are remote from the 
regions of increased consumption requirements for dairy products, truck crops, 
and fruits. They are engaged in the production of cotton, cereals, and other 
staples. Moreover, their production of cash crops is limited, so that their pro- 
portionate benefit from rising prices is far less significant to their scale of living 
than to that of full commercial farmers. Even these small gains — in fact, the very 
foothold of these people on the land — may be jeopardized by increasing rents 
through which landlords might seek to capitalize on improved farm prices. The 
defense program generally has benefited the more prosperous levels of American 
agriculture, and these are outside the province of the Farm Security Administra- 


At first glance, one is apt to be misled into thinking that perhaps Farm 
Security Administration borrowers have not taken full advantage of defense 
opportunities. This is not the case. Aside from the patriotic desire to serve 
the defense program which Farm Security Administration families share with 
all other Americans, the higher pay in industrial employment offers every induce- 
ment to the agricultural worker and the small farmer to leave the farm, especially 
when his income is at the lowest end of the scale (table III). 



Table III. — Median average net incomes of active standard borrowers, 1940, 

by State 1 

United States 

Region I 




Man' land 

Massachusetts. _ 
New Hampshire- 
New Jersey 

New York 


Rhode Island 


Region II 




Eegion III 






Region IV 


North Carolina . 



West Virginia 

Region V 




South Carolina. - 

Average net 
income of 

for IdJfl 

. 1,714 

- 1,319 
_ 1, 154 


- 1, 485 
_ 1,271 


Region VI 




Region VII 



North Dakota 

South Dakota 

Region VIII 



Region IX 1, 102 

Arizona 1,162 

California 1,100 

Nevada 1,156 

Utah 1,084 

Region X 978 

Colorado 622 

Montana 1,204 

Wvoming 1,175 

Region XI 1,038 

Average net 
income of 

for 1940 




Washington . 

Region XII 



New Mexico. 




• Figures furnished by Planning and Analysis Section. Rural Rehabilitation Division, Farm Security 
Administration, July 2, 1941. 

Industry's higher wages have not resulted, however, in any wholesale migra- 
tion of Farm Security Administration borrowers to the cities. A description 
of the people served by the Farm Security Administration will make clear 
why this is the case. Of the 474,548 clients of all types served by the agency 
in April 1941, approximately 50 percent were 45 years or older. Some familiar- 
ity with machinery may safely be presumed to he part of a farm background, 
but specific defense skills are not common. Inadequate education characterized 
the majority of Farm Security Administration clients, even if so low a stand- 
ard as the completion of the fourth grade is adopted. 

Defense industry is calling mainly for skilled and semiskilled workers. The 
survey of some 115 industrial areas recently completed by the Bureau of 
Employment Security indicated that employment in these areas will expand 
by more than 1,500,000 workers, during the next 12-month period. About 500.- 
000 of these jobs will be filled by skilled and semiskilled persons migrating 
into the industrial areas, hut practically no outside unskilled labor will be 

Defense contracts, furthermore, have not been awarded in relation to the 
geographic distribution of Farm Security Administration borrowers. This is 
made strikingly clear in the following table : 



Table IY.—Defens( contract* in relation to geographic distribution of Farm 
Security Administration borrowers 

[April 1941] 


Northeast. - 
Pacific coast 






These data on the einployability of Farm Security Administration clients and 
the availability of defense work should make it abundantly clear why no very large 
numbers of Farm Security Administration families have left the farm forr 
defense employment. 


It is of course possible that the expanded defense effort may modify the basic 
situation which made the Farm Security Administration necessary. How much 
can the defense program be expected to relieve the economic aud social con- 
ditions which created the need for tbe Farm Security program? 

Out of a total agricultural labor force of some 12,000,001) including opera- 
tors and family workers, approximately 2,000,000 are unemployed and 3,000,000' 
are underunemployed. In 1929 more than 1,000,000 farms produced an average in- 
come of less than $600; 900,000 farms, an average income of less than $400; 
and some 400,000 farms, an income of less than $250. Seven years later, in 
1936. investigators reported that about 1,600,000 farm families were receiving: 
less than $500 annually, and that the income of about half of these families 
was less than $250 a year, including everything they produced for home use. 

Leaving aside the problem of farm prices and income, three important forces 
underlay these dangerous signs of agricultural distress. These are technologi- 
cal displacement of labor on farms; increasing commercialization of agricul- 
ture ; and the absence of urban opportunities for displaced farm workers. 


Normal agricultural requirements, domestic and export, were produced by 
1,000,000 fewer farm workers in 1939 than was the case 20 years earlier. It 
is in this period that mechanization has made its greatest advance. 

That, over a million workers became "unnecessary" in two decades is an 
indication of the growing use of modern machinery by American farmers. The 
following figures may make this vast increase in machinery more striking: 

Tractors : 

1920 343,000 

1939 1, 610, 00O 

Trucks : 

1920 140, 00O 

1936 1, 000, 00O 

Coin pickers: 

1920 10,000 

1939 70, 000 

This enormous substitution of machines for manpower is one of the factors 
making Farm Security Administration necessary. What effect will the defense 
program have upon the trend to mechanization? Will the defense program 
accelerate or retard the substitution of the machine for men? 

The process of agricultural mechanization can hardly be expected to be re- 
tarded by the defense program. The prediction was made in 1940 that 'within 
the next decade the number of tractors used in the South will nearly double, 
and that as a result some 300,000 families living on farms may he dis- 
placed * * *. It seems likely that during the next decade at least 350,000,. 
and perhaps as many as 500,000, will be displaced by mechanization over the 
entire country." 2 

2 See footnote on p. 6842. 


This trend is anticipated unless (1) wage rates are lowered so that workers 
may be retained and unless (2) production is increased sufficiently to permit 
profitable employment of workers regardless of the extent of mechanization." 

Since farm wage rates have already moved slightly upward and since agricul- 
tural production has remained fairly constant, except for some advancement in 
some areas and in certain crops, the rate of mechanization may be expected to 
continue. The farm labor subcommittees of various State land-use planning com- 
mittees are, in fact, advising operators to mechanize at points where they have 
not done so. 3 


Another of the trends in agriculture which the Farm Security Administration 
program must meet is the growing commercialization of farming. 

Commercialization in agriculture has tended, in the first place, to concentrate 
land ownership, displace small owners and tenants, and swell the ranks of the 
landless. Up to 1935 both small subsistence farms and large commercial farms 
increased in number. "In the 25 years from 1910 to 1935, high-percentage in- 
creases in the number of farms under 20 acres and in those over 500 acres are 
indicated. Farms in the middle sizes barely held their own in number, while 
those from 100 to 174 acres declined about 8 percent." i 

But whereas the 839,166 farms of less than 20 acres contained only 1.2 percent 
of all farm land in 1935, the proportion of all land in farms of 500 acres and over 
increased from 19 percent in 1910 to over 29.4 percent in 1935. s Although acreage 
is not a precise economic measure of farm size and income, the above figures sug- 
gest a concentration of farm ownership in the very large and the very small 
tracts, and an increasing pressure of underprivileged farm groups upon the land. 

The extent of displacement of established farm families accompanying shifts 
in land ownership during the early 1930' s is not clearly revealed by the above 
data. Because of general inability to compete with larger commercialized farms, 
many small operators became tenants during this period. Of the 6,812,350 farm 
families in the United States in 1935, 2,865,155, or 42 percent, were tenants. Be- 
tween 1930 and 1935 the percentage of tenancy remained unchanged but the abso- 
lute number of tenants had been increasing by nearly 40,000 each year. 6 Included 
among the tenants were more than 700,000 sharecroppers who, in general having 
no livestock or equipment, had not much more security than seasonal farm 

The 1940 census clearly shows growing instability among small farmers and 
tenants. Consolidation of farm units continues. According to data contained in 
the agricultural State bulletins (first series) on 12 Southern States, the total 
number of farms under 50 acres in size decreased by 17 percent since 1935, while 
the number of farms 500 acres or more in size increased by 5.4 percent. 7 The 
number of sharecroppers in these States decreased by 218,171 during the past 
decade. The latter fact points to a relegation of sharecroppers to the still less 
secure status of day worker. "The traditional plantation and sharecropper sys- 
tem of farm organization in parts of the South is passing even without the me- 
chanical cotton picker. Prices of cotton and wages of labor have given income 
advantage to operators using hired rather than share labor. The result has been 
an increase in the proportion of cotton grown with wage labor. This has been 
particularly true where additional economies could be achieved by the use of wage 
labor and power machinery." 8 

As commercialization has continued, therefore, small farmers and tenants have 
been forced down to the bottom of the agricultural ladder; again they become 
landless people competing for day labor. The rehabilitation of these families has 
been one of the grave tasks assigned to the Farm Security Administration. 

The effects of defense on commercialization in agricnltnre are most difficult to 
gage. In a negative sense, there are no apparent reasons why increased agricul- 
tural prosperity should reverse the trend of the past decade. On the positive 

2 Technology on the Farm. August 1940, p. 65, Bureau of Agricultural Economics, U. S. 
Department of Agriculture. 

a See Report on the Farm Labor Situation in Maryland, by the subcommittee on farm 
labor, State land-use planning committee, April 1941, p. 16. 

♦Pacific Coast Regional Committee, Social Science Research Council, subcommittee on 
labor in agriculture, Agricultural Labor Research, Stanford University, 1940, pp. 21—23. 

6 Source : Census of Agriculture, 1935. 

* Special Committee on Farm Tenancy, Report of the President's Committee, Washington, 

7 F. S. Census. 1940. Reports on Agriculture, first series. 

8 Technology on the Farm, p. 63. Bureau of Agricultural Economics, D. S. Department of 


side, it is apparent that benefits from such immediate improvement in the agri- 
cultural situation as may occur will go to those who are most actively and 
expansively engaged in the production of commercial crops. 

There is also some possibility that improvement in agricultural prices will be 
reflected in increasing land prices, perhaps even of a speculative nature, and in 
increasing land rents. This, too, would promote commercialized farming. Thus, 
it can be anticipated that the trend toward commercialization can scarcely be 
retarded, much less reversed. 

The consequences of displacement and dislocation in agriculture were intensi- 
fied by contraction in nonagricultural employment opportunities during the 1930's. 
Prior to 1929, industrial expansion tended to absorb a substantial portion of 
the agricultural labor force displaced by technological advances. The depres- 
sion da nniicd up this flow of excess population from rural to urban areas. By 
1940 the farm population was estimated to number 32,345,000, the highest on 
record since 1917, representing an increase of some 2,000,000 since 1930, as con- 
trasted with a decrease of l 1 /^ million during the previous decade. This expansion 
of rural population was less a result of a back-to-the-land movement than of 
a reduced rate of rural-urban migration and of the relative high rural rate of 
natural increase. 8 

Another way of recording this situation is to point out that as against a net 
farm-to-town migration of 6,000,000 during the 1920's, only slightly over 2,000,- 
000 left the farms during the 1930's. Since a considerable portion of those who 
remained on the farms were young persons, the increased competition for jobs 
depressed farm wages. Underemployment and unemployment in rural areas 
reached an all-time high, with at least 3,500,000 rural families reported as having 
received public assistance at some time during the depression. 

To what extent, then, will industrial expansion in urban areas draw workers 
from the farms and place them in nonagricultural employment? Available data 
and estimates cast some light upon the probabilities for the next year or so. 

As has been indicated, of the 12,000,000 workers attached to agriculture, ap- 
proximately 5,000,000 are unemployed or underemployed. Total unemployment 
in the United States at the present time is estimated at between 4,000,000 10 and 
7,500,000 u workers. It has been stated that during the next 12 months employ- 
ment will increase by 2,500,000 to 3,000,000 workers. 12 This indicates that, if an 
allowance is made for a 600,000 annual increase in the total labor force, there will 
be from 1,600,000 to 5,600,000 persons unemployed in July 1942. The American 
Federation of Labor estimates that unemployment in June of 1942 will be ap- 
proximately 5,000,000. 

The increase in employment will occur primarily in areas of intense defense 
activity. Surveys by the Federal Security Agency, covering 115 defense areas, 
indicate that employment in these areas alone will increase by about 1,500,000 
workers. Most of the increase will occur in the skilled and semiskilled occupa- 
tions and about 500,000 of these will come from areas other than those surveyed. 
It is unlikely that a large part of the agricultural unemployed and underem- 
ployed will benefit directly by this increase. The surveys indicate that only 
skilled workers are not available in sufficient quantities. Only if up-grading or 
dilution of .skills tends to make for vacancies in unskilled occupations, would 
the unemployed with agricultural backgrounds, many of whom undoubtedly will 
migrate into these areas, be able to fill the available jobs. 

On June 27 the Secretary of Labor asserted that : 

"There will still be a reservoir of unused labor power available in July 1942. 
Tbere will still be unemployment, especially among unskilled and older workers, 
and we shall hardly have begun to draw upon the huge reservoir of underemployed 
workers on farms and of women not in the labor market." 

It appears, tberefore, that although farm-to-city migration may increase as the 
unemployed move for work into regions of defense production, failure to obtain 
such employment may result in a return migration to rural areas with depleted 
funds and a need for still greater assistance than at the present time. 

Despite the cityward flow of migrants and reported farm labor shortages in 
several specialized crop areas at the present time, the number of people on farms 
is believed to be greater than it has been for many years. Although many of 
these people are not considered essential to the production of an adequate supply 
of food and fiber to meet the Nation's normal and emergency needs, each of these 

8 U. S. Department of Agriculture, Farm Population Estimates, January 1, 1940. 

10 National Industrial Conference Board. 

11 Congress of Industrial Organizations. 

12 Bureau of Labor Statistics, Department of Labor. 


families is an essential part of the country's population and must continue to have 
hope of access to the rehabilitative assistance which the Government can lend in 
the vital effort to maintain them decently upon the land. This assistance must 
in part be rendered through the continued work of the Farm Security Adminis- 
tration since employment opportunities in the defense program appear to be rela- 
tively narrow as far as farm families are concerned. 

The prospects that the defense program will favorably modify the basic situa- 
tion out of which the need for a Farm Security Administration grew do not seem 
to be too favorable. 

Part II. Fabm Secubity Administration. Farm Family Camps, and the Defense 


Another side of the Farm Security Administration program hinges on the 
provision of farm-labor camps for wandering American families uprooted from the 
soil. The defense program, general opinion has it, has heavily tapped the rural 
labor surplus. 1 The apparent inference follows that since a scarcity 2 may have 
supplanted the characteristic glut there is no longer any need for farm-labor 
camps. Yet the somewhat contradictory opinion must be conisdered that just 
because of this reputed labor shortage, labor camps are needed to insure an efficient 
concentration of rural labor at the right place and at the right time. 

With this in mind, a brief resume of the development of Farm Security Admin- 
istration camps will be helpful in defining their potential use and limitations in 
easing the dislocations of the farm-labor market caused by defense. 

The first Farm Security Administration camps were built in California in 1936. 
They were designed to provide rough shelter where it was desperately needed. An 
army of migrants, numbering tens and even hundreds of thousands, searched 
the valleys of California, looking for work and finding it only part of the time. 
Housing which they could afford to rent was substandard and hard to find. Some 
of them slept on ditch banks and in makeshift shelters. 

In this familiar situation the Farm Security Administration demonstrated 
that there was an economical and efficient way of providing camp housing. At 
the same time the health of the entire communities through which the migrants 
moved was protected. In the beginning the immediate needs of sanitation were 
in the foreground. Later, as the camp program expanded, other problems were 

Today the Farm Security Administration operates 53 camps of various types 
throughout the country. Some of the camps are more or less permanent. 
These "standard" camps accommodate from 200 to 350 families. For some fam- 
ilies, platforms ou which tents can be erected are provided. For others, 1 
room shelters of frame or metal have been built. Each camp has sanitary 
buildings, generally in the ratio of 1 to 40 or 50 families. Here are provided 
toilets, showers, and laundry tubs. Most of the camps have a children's clinic 
and nursery served by a registered nurse and visited by physicians. There 
is sometimes a small repair shop where migrants cau repair their cars. Finally, 
the camps are provided with community buildings in which religious services 
are held and around which a healthy community life within the camp can be 

In addition to the standard camps, mobile units have been built. The stand- 
ard camp is located along a route of fairly constant and heavy migration. 
There are other areas in which need for emergency housing is great but only 
for short periods of time. The mobile type camp was developed to meet this 
need. All equipment in a mobile unit can be loaded in trucks, moved, and 
reassembled. The only housing provided consists of tents and tent platforms. 
Trailers are used for first-aid stations and children's clinics aud for showers 
and laundry tubs. A large community tent is also transported. 

W T hereas the Farm Security Administration camps were built first to provide 
badly needed emergency shelter and to counteract the menace to public health 
of a large body of people moving from one community to another without 
adequate sanitary facilities, in good time other uses quickly developed. Oc- 
cupants of camps were encouraged to register with local employment offices, and 
in other ways were given whatever aid possible iu finding work. Similarly, 
from the point of view of local farm operators, the camp populations became 
pools of available labor to be drawn on for peak labor needs. 

1 Cf. In pt. I for general estimate of this situation. 

2 A digest of farm labor shortages in the light of experiences of Farm Security Administra- 
tion field men appears in a separate report. 




During the past decade far-reaching changes in our agricultural techniques, 
the depiction of soil resources, mechanization, urhan unemployment, and a 
surplus population on the farms have been accompanied by vast migrations 
of people to the Western States particularly to California. 

As a result of the steady advance of technology, labor requirements on the 
farms of this country have been cut, and displacement of large sections of 
the farm population has become the rule. Technology in addition to displacing 
labor, "has widened the gap in general well-being between farmers who are 
able to embrace it and those who are unable," to the point where the 3,000,000 
poorer farmers in this country are sinking to lower levels of poverty each year. 

As a result of these forces factory farms have developed alongside of the 
dispossessed millions in agriculture. During peak seasons, and generally for 
not more than a few months of the year, large numbers of these dispossessed 
are employed on the large farms. Because mechanization itself has not been 
uniform in the different branches of crop production — its progress has been 
relatively slight in harvesting fruits, berries, truck, and a number of specialty 
crops — sharp peaks in demand have created large valleys of unemployment, 
and the surplus labor forces thus released augment the migratory stream. 
The net migration into California during the 1930's totaled more than 
1,100,000 persons, and represents about two-fifths of the net relocation across 
State lines of all migrants in the United States. 

The vast stream of farm families from the Great Plains areas to California 
throughout the past decade thrust itself forcibly upon American attention, 
and tended to remove our attention from other important agricultural migra- 
tions, mainly of a seasonal character. Fruits, vegetables, and cotton in Cali- 
fornia, cotton in Texas and the Mississippi Delta, fruits and berries in the 
Mississippi Valley and North Central States, sugar beets in the Mountain 
States, and vegetables along the Atlantic seaboard and in Florida all require 
large numbers of farm workers during peak seasons. Because of the overlapping 
of seasons, there is always a large demand for seasonal workers. 


There have been many estimates of the numbers involved in seasonal agri- 
cultural migration, most of which, to be sure, are -inconclusive. A year ago 
a figure in the neighborhood of 1,000,000 was the one on which there would 
have been fairly general agreement. Migration involved innumerable hardships 
and frequent destitution. The disorganization of the labor market often resulted 
in the curious situation that workers remained unemployed in the very areas 
where farmers needed them. 

One result of increasing defense activity to be hoped for is that the rise 
in industrial employment will remove some of the inequities in the rural labor 
markets and especially those affecting receipt of relief by migratory workers. 
A measure of the need for such relief is found in studies of earnings of 
migratory workers conducted by the Labor Division of this Administration. 
These are recapitulated in table V and show median annual earnings, by 
surveyed areas, ranging from $1G6 to .$659. 

Table V. — Median yearly total incomes of migratory agricultural wage-workers 
and their families reported in various surveys conducted by the labor division 
of Farm Security 

Place of survey 

Year of 


of in- 
comes re- 


Place of survey 

Year of 


of in- 
comes re- 


Sanford, Fla.. 

Lakeland, Fla... 

Belle Glade, Fla 

Manatee, Fla 

Hastings, Fla 

Hammond, La 

Copiah County, Miss 
Benton and Washing- 










White Countv, Ark 

Chadburn, N. C. 

Elizabeth City, N. C. 

Northampton, Va 

Hightstown, N. J 

Burlington, N. J 

Western Kentucky 

Western Tennessee 

Meggett, S C 






The availability of these farm migrants for industrial employment is measured 
in part by their characteristic age and in part by their occupational back- 
grounds. These are shown in tables VI and VII. With the exception of the 
Burlington, N. J., area, 75 percent of the heads of migrant families surveyed 
were under 45 years of age and hence in an employable age group. A sur- 
prisingly high percentage also show experience in nonagricultural jobs with 
30.5 percent having experience in specified nonagricultural trades. 

Table VI. — Percentage of all migrant agricultural roorkers 45 years old, or older, 
chief agricultural breadwinners and unattached workers, by survey anas 

Florida: Percent 

Sanford 6.9 

Lakeland 6. 4 

Belle Glade 20.4 

Manatee 9.3 

Hastings 11.3 

Louisiana: Hammond 24.1 

Mississippi: Copiah County 9.1 

North Carolina: Percent 

Chadbourn 20.2 

Elizabeth City 11.3 

South Carolina: Meggett 22.9 

Western Kentucky 19. 5 

Western Tennessee 14. 5 

New Jersey : 

Hightstown 9. 6 

Burlington 65. 5 

Table VII. — Real work 2,841 migratory agricultural workers surveyed by Labor 
Division of Farm Security Administration 1939-40 

Type of employment for which worker considered himself primarily 
qualified : 

Agriculture and animal husbandry 37. 

Nonagricultural, specified trades 30. 5 

Nonagricultural, odd jobs 10. 5 

No real work 22. 

Total 100.0 

There is an even gloomier side to the picture, for it will be some time before 
all the slack in unemployment is absorbed. As yet, there are no indexes avail- 
able from which we can derive the rate at which reemployment will affect rural 
as compared with urban .unemployed or underemployed. In addition, most of 
the migrants are drawn from areas where there is little or no opportunity for 
industrial work; Mexicans from the border States of the Southwest, Negroes 
from the Southeastern States, and native whites from the Ozark-Appalachian 
region. Moreover, the long-term forces at work in agriculture are adding 
even increasing numbers to the agricultural labor supply, acting as a further 
irritant. The expansion of industry actually may be no more than sufficient 
to take care of new additions to the rural labor market as they occur yearly, 
let alone encroaching on existing surpluses. 

Though defense may not draw heavily and directly on distressed rural fam- 
ilies in many parts of the country it is clear that there will be some stimulation 
of the movement of seasonal agricultural workers to urban centers. This will 
not create shortages of catastrophic proportions for agriculture unless the de- 
fense program speeds up. Table VIII compares camp population, by States, 
for camps that were in operation during the first 5 months of 1940 and 1941. 
These indicate that, insofar as camp population is acceptable as a general 
measure of migration to an area, defense has not made heavy inroads into 
this mobile group. A fuller report on the general problem of shortages is 
offered elsewhere. 



Table VIII. — Comparative average number of families in Farm Security Admin- 
istration standard camps for first 5 months of li))fi and 1941 

Average number of families during month of— 

State in which camps are 















































1, 165 






1, 783 







From the above analysis it is apparent that no visible slackening in the need for 
standard camps has been felt as yet. Reduced supply of labor may still mean that 
there are plenty of workers left in the locality to do all the required work. It is to 
be remembered also that even should the number of workers diminish in an area 
where camps are located this does not indicate a corresponding decrease in that 
area's requirements for migratory labor. In general, it is true that even where 
demand and supply of migratory workers are closely adjusted to each other the 
camp will perform an urgently needed function as a sanitary and housing unit. 


From the above picture of the Farm Security Administration camp program it 
may be seen that there are two primary ways in which the camps can be of help 
where farm labor shortages develop or where other dislocations result from 
defense activity : 

1. In some instances migratory farm workers may be deterred by lack of ade- 
quate housing from entering areas where their work is needed. Under such cir- 
cumstances, a Farm Security Administration camp might encourage necessary 
movements of workers into the area and so assist in relieving farm labor shortages. 

2. Farm Security Administration camps may be considered pools of reserve 
labor supply and be used its central points for recruiting and dispatching labor. 

Implied in the effective use of Farm Security Administration camps as central 
points for recruiting and dispatching of farm workers is the assumption that use 
of such farm labor will be more highly rationalized than has been commonly the 
case in the recent past. All available information points to the unpleasant fact 
that rather less than half of the working time of the average migratory worker 
has been used in the past. In this sense, supplies of farm labor customarily con- 
sidered normal actually included large surpluses. If these surpluses are being 
reduced today by the attraction of employment in other fields, it should still be 
possible to avoid farm labor shortages but only by reasonable use of the remaining 
labor supply. 

It has always been desirable from the point of view of farm labor to attempt to 
decasualize seasonal farm work; it may now become necessary to do so from the 
point of view of farm production. In this process the Farm Security Adminis- 
tration camps can be most useful. If farm operators in a given area attempt to 
dovetail their labor requirements, and if there is a large-scale clearance of farm 
labor through the State employment services, the Farm Security Administration 
camps may be used readily both as central points for recruitment of labor and 
to provide shelter for migrants who may be waiting for work to start. 

Recent experience in California and Oregon illustrates this use of the Farm 
Security Administration camp program. As Oregon strawberries ripened this 


spring, it was feared that there would not be sufficient labor on hand for picking. 
On the other hand, it was reported that there were surpluses of farm labor in 
California. The employment services of Oregon and California and the Farm 
Security Administration took joint action. Labor was recruited in California, in 
considerable part from the residents of Farm Security Administration camps. 
Transportation was arranged by the employment services through the medium of 
gasoline credit slips financed by Oregon processors to be used at key service sta- 
tions along the way. Newly arriving workers were given Farm Security Admin- 
istration camp shelter in Oregon, and until work began were carried over by Farm 
Security Administration emergency grants. 

The entire operation was carried out successfully to the expressed satisfac- 
tion of all parties involved. There was, nevertheless, one flaw in the picture. 
Workers came into the Gresham camp in Oregon from California as early as 
May 7. Three weeks later it was reported that for the week ending May 28, 
126 pickers had been sent out from the camp but it was also reported that 
their earnings for the week had averaged only $1.32 per picker or $3.33 per 
family unit. In explanation it was stated that full scale picking had been 
delayed. Whatever the explanation, the fact remains that after much activity 
on the part of several agencies not only was there no longer a shortage but 
actually a surplus had been created, at least temporarily. 

The recent experience on the west coast described above is instructive. 
It illustrates first of all that the Farm Security Administration camp program 
can be used in conjunction with activities of State employment services to 
handle effectively some kinds of labor shortage situations. But it also illus- 
trates the relative and sometimes ephemeral nature of shortages, and points 
to the danger that action aimed to relieve farm labor shortages may turn out 
to have been merely shadowboxing. 

The Farm Security Administration camps have gained wide acceptance as a 
means of providing emergency housing for migrant farm workers quickly and 
efficiently. In States where the program was once opposed bitterly, it is now 
welcomed. Requests for further extension of the program continue to come in, 
particularly from areas where the pressure of farm labor shortages is being 
felt or is feared. 

In considering these requests we must be guided by the factors outlined 
above even though it has never been felt that the camp program at its present 
level does more than scratch the surface of the problem of rural housing. 
Nevertheless, the very fact that there is real need for new camps for migrant 
farm workers, coupled with the fact that funds are scarce, makes it imperative 
that locations for new camps be chosen with the greatest care. 

Some of the requests for immediate extension of the camp program in 1941 
have lost sight of the limitations under which the Farm Security Administra- 
tion must operate. In the interests of public service, certain conditions must 
be satisfied before the Farm Security Administration can wisely allot funds 
for construction of a camp. 

First of all, it must be recognized that camps are not built overnight. Mobile 
units can readily be moved, but in starting from scratch with a standard camp 
a year must be allowed if there is to be adequate planning and preparation. 
There have been requests for immediate extension of the Farm Security Ad- 
ministration camp program into new areas. For such places it is only prac- 
ticable to think of the aid that might be received from the Farm Security Ad- 
ministration camps for the crop season of 1942. 

Secondly, it must be remembered that the Farm Security Administration 
camps were not built in the first instances to relieve labor shortages. A farm 
worker's camp can only assist in relieving a shortage insofar as housing is a 
factor contributing to the shortage. The factor of bad housing is not neces- 
sarily always present, and certainly there are always other factors. 

Third, some shortages are temporary and may not recur for years. A 
Farm Security Administration camp built under such conditions might sr.-md 
idle after a brief period of use. Similarly, peak demands for labor and there- 
fore for housing in some localities may be recurrent but for only brief periods 
each year. Here, too, construction of a Farm Security Administration camp 
would be largely a waste. 

In spite of these limitations, the Farm Security Administration camp program 
can play a significant part in organizing the farm-labor market and in smoothing 
the path of defense activity in other ways. So far, emphasis has been on camps 
that might ease pressure on agricultural production. It is perfectly true that 
throughout the American economy problems of production must be considered 


first. But it is also true that a program for the defense of democracy will he self- 
defeating unless it is planned to protect the rights and standards of living of low- 
income groups as well as to turn our bombers, tanks, and ships. And in this sense 
Farm Security Administration camps have a great contribution to make to the 
defense of an American democracy. The entire program of the Farm Security 
Administration lias demonstrated ways of attacking the problem of rural poverty. 
Insofar as that program is succeeding in loosening the grip of poverty, it is also 
reinforcing the foundations of democracy and strengthening the national will to 

In summary, the following points may be made concerning the use and possible 
modification of the Farm Security Administration camp program to meet current 
needs in the field of farm labor: 

1. Expansion of the Farm Security Administration camp program will help 
relieve labor shortages, particularly in 1942, where inadequate housing is a main 
factor keeping farm workers out of an area and where there is fair expectation 
of efficient use of the newly built camps. 

2. It will probably be most useful to place greater emphasis on construction of 
Farm Security Administration camps of the mobile rather than standard type, 
where emergency housing needs exist and customary routes of migration are not 
clearly established. 

3. It will be profitable, from the points of view of both agricultural production 
and farm labor, to use Farm Security Administration camps as central points for 
better organization of the farm-labor supply, pointing toward decasualization of. 
farm work. 

Part III. Relocation Problems in Rural Areas Created by Acquisition of Farm 
Lands for Defense Activities ' 

Great tracts of farm lands throughout the United States are being taken over 
by the Army to make room for the construction of factory sites, munitions dumps;, 
cantonments, maneuver fields, etc. 

Of a total of 4% million acres, the purchase of which was authorized by Congress- 
for the fiscal year ending June 30, 1941, 3.8 million acres had already been acquired 
by June 1, 1941. By July 1, 1941, the acquisition of 1% million acres had brought 
about the displacement of 8,811 families. Part of the remaining two-mill ion-odd 
acres already taken over, on which the Farm Security Administration does not 
have information, was also farm land. The rest of the acquired acreage was 
timberland, cut-over, desert, and range land. It is estimated that farm land 
constitutes about half of the land taken over for military purposes. 

This number is undoubtedly a minimum figure for those families who have been, 
forced to give up their homes to make way for military and industrial defense 
projects. These 8,811 families are those of whom the Farm Security Administra- 
tion has knowledge because it has aided in their relocation. It is felt that there 
may be many more families already affected by this program who have not come 
to the attention of the Farm Security Administration. 

It is impossible to estimate accurately the total number of families who will 
have to give up their homes and farms in the future. However, with a possible 
doubling of the number of men under arms and the acquisition of equipment for 
an Army of 3.000.000 men, probably twice as much space as has already been taken 
over will be needed. If this program is carried out, probably another 9,000 families 
will be displaced by July 1, 1942. 

Because the need for relocation aid exists in varying degrees and mannf rs in- 
many parts of the Nation and because Farm Security came into the picture after 
the problem had arisen, it has usually been a difficult task to determine the exact 
degree of need. It is difficult enough with existing records to find out the approxi- 
mate number of farm families living within the defense areas at the time of 

This number is estimated to be 8,811. The need of these families can be indi- 
cated roughly by quoting figures on the number of Farm Security Administration 

l A full statement of the problem was outlined to the committee in a report from the 
Farm Security Administration made at the end of March 1941. This can he found in pt. 11, 
Washington hearings, pt. 11. March 24. 25, and 20, as exhibit 37, pp. 4735-4742. 

This report differs from that previously made, in that it selects particular problems, and' 
on the basis of field reports in the files of the Farm Security Administration, attempts to- 
show the extent of the need facing the displaced farmers. 

Below (p. G853) is a table, by region and State, of all defense projects involving the 
acquisition of land, in which the Farm Security Administration is helping to relocate 
displaced families. 

Also appended are several spot studies of defense areas, outlining the problems facing the 
Farm Security Administration. 


borrowers among the displaced families and by the number which needed financial 
aid in moving, relocating, and operating after relocation. 


Among the 60O families displaced at the Jefferson proving grounds in Indiana 
were 50 to 60 Farm Security borrowers. The Du Pont powder plant at Childers- 
burg, Ala., pushed 321 families off the land, and of these, 76 were operating under 
rural rehabilitation loans. At Spartanburg, S. C., 15 of 228 families forced to 
move because of the erection of Camp Croft, were rural rehabilitation borrowers. 
At Portage County, Ohio, Burlington, Iowa, Milan, Tenn., Wilmington, 111., and 
Columbia, S. C, from 5 to 8 of the displaced families in each area were borrowers 
under the Farm Security Administration program. 


In Portage, Ohio, 11 out of a total of 95 families displaced who were surveyed 
were in need of aid. Of 41 secondary displacements caused by the relocation of 
the Portage families, 6 needed aid. Three families out of this total of 17 needed 
financial aid and 3 needed work. At Rolla, Mo., displaced families were recipients 
of 21 grants and 7 nonstandard loans. 

At Milan, Tenn., 413 families were directly displaced by defense land acquisi- 
tions. Of these, 125 needed Farm Security Administration assistance and 203 
received assistance from other sources. It was estimated that 125 additional 
families would be displaced and require Farm Security Administration assistance 
by the process of relocation of the families immediately moved from the defense 
area. It is extremely difficult to control and measure this secondary displacement. 
However, primary assistance in the several categories available through Farm 
Security Administration was furnished in the Milan area to families in the 
following numbers : 

Number needing Farm Security Administration aid to June 30, 1941 : 

Loans 5 

Grants for moving 120 

Grants for subsistence 75 

Grants for other purposes 120 

Number of families needing Farm Security Administration aid to continue 
farming 75 

Estimated number of families needing Farm Security Administration aid 
July 1 to Dec. 31, 1941 : 

Grants for subsistence 75 

Grants for other purposes 25 

The vast majority of 586 families displaced at Hinesville, Ga., were unable to 
pay their own moving expenses. Subsistence grants were also necessary for most 
of these families, since they lacked the cash on which to live. In all, 204 families 
from Hinesville were given either moving or subsistence grants, or both, by Feb- 
ruary 11, 1941. The families occupying the defense area taken over were ordered 
to leave by March 1. In all likelihood many more than 204 had to be aided by the 
time all the families were moved out of the area. 

At the Fort Jackson project in Columbia, S. C, 134 families out of 205 displaced 
received grant checks from Farm Security Administration. These grants were 
small — averaging $29 each — just enough to cover moving expenses and bare sub- 
sistence. These 134 grants had been made by February 13, and all the families 
were due to vacate by March 15. 

At Childersburg, Ala., 24 families had moved out of the defense area by Feb- 
ruary 15, and 19 Farm Security Administration grants had been made, rash 
grants had to be given to 132 of 263 displaced families at Spartanburg, S. C, before 
they could afford to move. 

Only 87 of 329 families moving off the expansion area around Fort McClellan, 
Ala., were able to move on their own resources. All the others had to be helped 
with grants and loans, and given advice in seeking new homes. 

At. the defense project in Bowling Green, Va., 238 of the 350-odd families to be 
moved by September 1, 1941, need Farm Security Administration assistance. 


The secondary displacement of farmers raises as many problems for the Farm 
Security Administration as the original displacement around a defense area. 
Reports from the regions reveal the extent of the problem. 


Will Connti/, III. — The farmers who have moved out of rliis project area to other 
farms are causing secondary and subsequent displacements, with effects that can 

be felt as far as a hundred miles away. 

Portaye County. Ohio. — The displacement which has already occurred illus- 
trates the secondary and subsequent displacement problem which the Farm Se- 
curity Administration faces. One farmer rented a farm 200 miles away, displac- 
ing a tenant. The dispersal of these farmers from a comparatively small area 
into a Large area where they are lost to sight has led some officials to feel that the 
problem is settled. The Farm Security Administration, however, is feeling wide- 
spread repercussion. 

A survey was conducted at an early stage of the relocation activities and a con- 
siderable amount of secondary displacement was disclosed. Of 95 displaced 
faii>'li«»s surveyed. 50 had caused secondary displacements. 

Anniston, Ala. — The displacement problem among the tenants in Calhoun County 
has been aggravated by the fact that some of the displaced farm owners are able 
to buy farms, thereby displacing other renters in the vicinity. 

ChUdersburg, Ala. — The problem is aggravated by secondary displacement, when 
the wealthier farmers buy farms and displace poorer tenants in the vicinity. 


In addition to the secondary displacement caused by the purchase or renting of 
farms occupied by other farmers, there is displacement of farm families by indus- 
trial workers on the defense projects. These workers are able to pay higher rents 
for occupying farmhouses than tenant farmers are able to pay for house and land. 
This condition is common to all defense industrial areas. 

Jackson County. Mo. — While some of the displaced farmers are finding tempo- 
rary employment in the construction area, other tenant farmers in the surround- 
ing area are being forced to move because workers are offering to pay higher rent 
for farmhouses within commuting distance of the plant than owners formerly 
received for the entire farm. 

Clark County. Ind. — The displacement of farmers living in the surrounding ter- 
ritory is far in excess of those displaced in the immediate defense area. Industrial 
workers are willing to pay more for a house than the rental value of the entire 


The problem of displacement, primary or secondary, is acutely aggravated in 
those instances where industrial workers crowd the surrounding neighborhood, 
thus preventing displaced farmers from renting or buying the all-too-few avail- 
able farms. This is particularly true in the already overcrowded South. Field 
reports emphasize this problem ; they often point to the number of farmers 
who are forced to move long distances away from their homes, the number of 
instances in which the Farm Security Administration found few available 
farms even far removed from the area vacated, and to the number of farmers 
who were not satisfactorily relocated even where there was no influx of in- 
dustrial workers. 

At Ravenna, Ohio, of 95 families displaced, 15 were not satisfactorily relo- 
cated. Ten of these 15 families had relocated on farms and 5 in townsi 
Of 41 families displaced by the Ravenna families, 7 were unsatisfactorily re- 
located, 4 on farms and 3 in towns. 

A survey of 500 families displaced at the Jefferson proving grounds in Indi- 
ana disclosed that 20 percent were unable to find land to farm at the time the 
survey was made. The 191 families pushed off the land in Des Moines County, 
Iowa, included, at the time the survey was made, 28 who moved in with rela- 
tives. These families, it was felt, were only temporarily located and would 
need aid in relocating. 


One of the immediate effects of the defense construction in rural areas is 
the acute housing shortage. Report after report emphasizes miserable living 
conditions. A serious situation has arisen in these areas as a result of the 
fact that thousands of workers have moved there while, at the same time, dis- 
placed families finding employment on construction work and in plants have re- 

Ravenna, Ohio. — Crowded conditions in the area have made housing and 
health serious problems for local governmental units, and the situation is get- 


ting worse all the time. There was one Negro settlement located in a low 
undrained area. Althongh the location is most unhealthy and the housing 
inadequate, more than 600 Negro families, most of them working on the plant 
construction, live in this settlement. The State health department is con- 
cerned about the situation and now has made a rule that owners must provide 
garbage disposal, sewerage system, etc., for the land. If they fail to do so, the 
county will provide these facilities and assess the landowners concerned in 
special taxes. 

Rolla, Mo. — The tremendous influx of labor into this area has made housing 
conditions as bad as anywhere in the country. The town of Waynesville, start- 
ing with a population of 390, now has thousands of people living in every con- 
ceivable form of shelter. It is almost impossible to rent a room in the area — 
the best you can do is rent a bed. In one instance, 53 people were found sleep- 
ing in a single 6-room house. Thousands live in unregulated trailer camps 
and slab shacks ; and tenants have trucks strung along the highway for miles 
around. Under these circumstances, it is naturally difficult to find housing for 
those families which have to move out of the area. A local Farm Security Ad- 
ministration supervisor describes living conditions around Fort Wood as follows: 

"The living conditions continue to grow more serious as tents are going up 
every day and the whole county is beginning to look like a circus. The differ- 
ence is that instead of the signs saying 'wild animals', the signs say 'bunk 
houses.' Some of the workmen say they have not had their clothes off for 
a week and I personally saw one man sitting on the edge of the road changing 
his socks. 

"One house in Waynesville is rooming 53 people. There is only one out- 
door toilet for this house and the water is being hauled 30 miles. There 
are no facilities for heating the water and no plans have been made to make 
any other modern facilities available." 

Burlington, Iowa. — At the latest report, 4.500 people were employed in con- 
struction and the housing situation was acute. The Iowa Legislature, how- 
ever, turned down a housing bill. 

La Porte, Ind. — Housing is already a serious problem and will become more 
so when a new plant goes into actual operation. It is expected that the plant 
will empJoy 6.000 workers, one-half of them women, at its peak. 

Clark County, Ind. — Housing conditions in the area are extremely acute. 

Milan, Term. — Sixty-five families were interviewed, and it was found that 
each of five houses was occupied by three families, and each of three houses 
by two families. In one case, 12 persons were living in a 4-room house, and 
in three cases, 7 persons were living in a 3-room house. 


The effect of displacement is often postponed. This is true for those farmers 
who have obtained jobs at construction work or in the defense industry plants 
erected in rural areas. This is indicated by Farm Security Administration 

Rolla, Mo.— A large part of the relocation problem has been postponed until 
June 1, 1941, or after, because of the availability of construction employment 
on the project. At least one member of most families in the area — indeed 
of most families within a radius of 10 or 15 miles — is employed on construc- 
tion. The families hope that their employment will last a year and this makes 
them less worried about getting relocated than perhaps they should be. How- 
ever, the employment peak was reached at about 35.000 men. and the con- 
struction was expected to be finished in June. Farm Security Administration 
may have to extend more help to the families at that time. 

Burlington, Iowa. — Very little Farm Security Administration aid has been 
needed so far, but when construction employment is ended more aid will prob- 
ably be needed. 

La Porte County, Ind.— Eighteen hundred men are employed on construction and 
it is anticipated that this employment will last at least months. The industrial 
activity is attracting many workers from agriculture. This will, however, 
relieve the tenancy problem only as long as industrial activity lasts. 



Defense projects involving acquisition of land, in which the Farm Security 
Administration is helping to relocate displaced families, classified by Geo- 
graphical Division, July 1, 19^1 


Name of project 

Purpose of project 


of families 


Now Jersey 

Fort Dix 

Army training camp expan- 
sion for target range. 

16, 346 

75, 000 

32, 000 

70, 000 
106, 000 
26, 500 
10, 640 

360, 000 
17, 100 
32, 000 

196, 000 

2 97, 000 
39, 078 


19, 405 

32, ono 

20, 506 




60, 000 


17, 000 
1 41,000 


74, 000 







Armv camp. 



Milan: Wolf Creek Ord- 
nance Plant. 

Caroline County 

Onslow County 

Anniston: Fort McClellan.. 


Maneuver area, First Army 



Expansion of facilities. .. 

] 403 


Do .. 

Childersburg: Alabama 

Ordnance Works. 
Hinesville: Camp Stewart... 
Spartanburg: Camp Croft... 

Columbia: Fort Jackson 

Santee-Cooper (Moncke 

Hattiesburg: Camp Shelby '. 

Little Rock: Camp Robin- 

Alexandria: Camps Beaure- 
gard, Livingston and Clai- 
borne: near Leesville, 
Camp Polk. 

Fort Sill 

Smokeless powder plant (Du 



South Carolina 

Infantry replacement center.. _ 



Dam project (South Carolina 
Public Service Authority). 

National Guard Camp: Ex- 
pansion of facilities. 3 

National Guard: Military 
maneuvers, camping, serv- 
ice practice, etc. 3 

National Guard camps 3 

Additional artillery firing 







Fort Riley 



Ravenna Ordnance Works 

Sandusky: Plum Brook 
Ordnance Plant. 

Charlcstown: Indiana Ord- 
nance Works. 

Charlestown: Hoosier Ord- 
nance Plant. 

Madison: Jefferson Proving 

Union Center: Kingsbury 
Ordnance Plant (near La 

Burns City... . . 

Shell-loading plant 



TNT plant 





Smokeless powder plant (Du- 

Bag-loading plant 

Ordnance proving grounds 





I 150 


Wilmington: Kankakee 
Ordnance Plant. 

Wilmington: Ellwood Ord- 
nance Plant. 

Burlington: Iowa Ordnance 

Rolla: Fort Leonard Wood.. 

Independence: Lake City 
Ordnance Plant. 

Weldon Spring (St. Charles 

Ogden _ 

Taeoma: Fort Lewis 

TNT plant 


Shell-and-bag-loading plant... 
TNT plant 





Training area 

Small-arms plant 

TNT plant 







Ordnance and general depot... 






1 Part of Camp Shelby is being leased by the Army from the State of Mississippi, which, in turn, is buy- 
ing the land from the owners. 

2 Of this, only 8,843 acres were private land. The rest was part of the DeSoto National Forest. 
1 Under Army regulations, sites for National Guard camps are leased rather than purchased. 


H— pt. 11 



Part IV. Analysis and Digest of Farm Labor Shortage Reports 

The Farm Security Administration has received reports concerning the farm 
labor situation from its representatives in 36 States. 

These reports were not intended to be forecasts. They were based on all 
available information which could be gathered by the Farm Security Adminis- 
tration's regional labor relations specialists, and so give a picture of the farm 
labor situation as it has developed so far this year. 

shortages exaggerated 

A few main facts emerge from this material. Starting with last winter and 
growing in volume as the harvest seasons approached, there has been a fear 
that a shortage of labor was threatening agricultural production. Few of the 
States covered failed to report some shortages. However, the closer one comes 
to the situation and the more the available facts are sifted, the more it appears 
that the asserted shortages have been exaggerated. 

This is not to say that there have not been localities in which farm labor 
supply may be inadequate. It certainly is true that the huge surpluses of 
farm labor which existed in recent years have been reduced. And it is entirely 
possible that by next year or the year after, if the defense effort continues to 
swell industrial employment, labor shortages may be general throughout agri- 

There are several explanations for the fear of immediate labor shortages. 
First of all, a farm labor shortage appears to mean different things to different 
people. In this connection it might be illuminating to quote from a report of 
the farm labor subcommittee set up by the Wisconsin State Land Use Planning 
Committee. In a report dated May 28, of this year, the Wisconsin subcom- 
mittee stated its belief that a county subcommittee should attempt to "determine 
to what extent any prospective shortage is — 

"(a) An apparent shortage that may be remedied by reasonable adjustments 
in living and working conditions and in wage rates ; 

"(b) A seasonal shortage that may be adjusted by appropriate organization 
of local labor supplies ; 

"(c) A shortage of such extent and kind as to require the movement of labor 
from areas where there is a surplus." 

It would appear that many of the shortages reported thus far this year 
have belonged to the first two categories mentioned by the Wisconsin subcom- 

Some fears of shortages seem to have been based on exaggerated notions of 
the rate at which industrial expansion and selective service would draw man- 
power from farm areas. In some cases it may be suspected that the cry of 
shortage has been used to make sure that the supply of farm labor would 
remain sufficiently above actual needs to keep a firm rein on wage increases. 
At its worst, this position has led to violent attacks on all effective relief 
programs at a time when reemployment is admittedly incomplete and poverty, 
both rural and urban, continues. 

importance of wage rates 

The importance of wage- rates in the farm labor situation is another main 
factor. It appears that thus far shortages of farm labor resulting from defense 
activity have been reflected mainly in somewhat higher wage rates. Industrial 
wages have advanced markedly, with correspondingly increased wage demands 
by farm workers. With accelerating industrial activity throughout the country, 
low wages in agriculture are less attractive than ever. The possibility of 
shortage emerges where the farmer cannot or will not advance wages sufficiently. 

In 5 of the 36 States covered by reports from Farm Security Administration 
labor relations specialists it appeared that farm-labor shortages of some mag- 
nitude were developing this year. In all five States — New Jersey, Connecticut, 
Maryland. Virginia, and North Carolina — the level of wages was mentioned as 
a key factor producing the shortages. In Connecticut (in shade grown tobacco) 
and in Maryland (in the Eastern Shore strawberry harvest) there were marked 
increases in wages, beyond the general Nation-wide advance in farm-wage 
rates, as efforts were made to meet the situation. 

In 14 of the 36 States from which analyses of the farm-labor situation were 
received, it was reported that slight or spotty shortages existed. In each of 


these States — Pennsylvania and Delaware in the East; Ohio, Indiana, Illinois, 
Michigan, Minnesota, and North Dakota in the Middle West ; Mississippi, 
Louisiana, and Arkansas in the South: and Montana, Oregon, and Arizona in the 
West — wages were mentioned as being at least one of the main factors. Nat- 
urally, others factors were also mentioned. Reports from the Middle Western 
States emphasized the fact that in many instances alleged shortages were found 
to he not shortages of all farm labor, but shortages of particular kinds of farm 
laborers, that is, farmers were unable to hire men of the same ages and back- 
grounds as in the past years. Questionnaires received from all county agents 
in Mississippi indicated a feeling that where shortages were anticipated a 
major cause would be maintenance of Work Projects Administration projects 
at security-wage rates. 

In the remaining 17 of the 36 States surveyed, there was no conclusive evi- 
dence of farm labor shortages. Statements that shortages might occur were 
flatly contradicted by at least equally authoritative statements that they would 
not. In some of the reports on these 17 States the relation of wages to farm- 
labor supply was mentioned anyway. It was stated that in West Virginia, 
Nebraska. South Dakota. Kansas, New Mexico, and Wyoming there was a 
sufficient supply of farm labor hut it might require a fair wage to bring it into 
the market. The New Mexico Agricultural Planning Committee, for example, 
recommended that, to insure proper distribution of what appeared to he an ade- 
quate labor supply, several steps be taken, including standardization of wage 
rates as well as provision of proper transportation and housing facilities and 
use of the State employment service to the fullest degree. 


Bridging the gap between farm and industrial wages is no easy matter, of 
course. Neither can it be dismissed as completely impossible. For purposes of 
stabilizing the farm-labor supply it would not be necessary to bring the average 
of farm wages all the way into line with the average of industrial wages. The 
farm worker who goes into industry generally is unskilled and stands to 
receive only the lowest industrial wages. Therefore, the problem is essentially 
one of bringing farm wages only up to the lowest level of the industrial wage 

It is sometimes argued that farm wages are chained to farm prices and 
income. Raise wages and you raise prices, because the farmer-employer cannot 
afford to pay more. Raise farm prices and the danger of inflation is increased. 
There is no simple answer to this problem. To find the answer it would be 
necessary to study the costs of operation on both large scale and small farms. 
It is quite likely that such a study may be necessary if the farm-labor situa- 
tion becomes critical. However, there are some already known facts about 
farm wages which should be carefully noted. In testimony presented before 
the Senate Committee on Education and Labor in May 1040, Louis H. Bean 
made the following statement : 

"Farm-wage rates since 1032 have not borne the same relation to farm and 
nonfarm income as they did throughout the period 1010-32. They seem to be 
at present at least 15 percent lower than the past relationship would sug- 
gest * * *. This discrepancy is apparently related to the prevalence of surplus 
labor in agriculture, to unemployment in other industries, a lessened demand for 
farm labor due to a reduction in the size of the total farm enterprise, and to an 
increased number of acres and livestock that can be handled per worker." 

To supplement this statement it might be pointed out that during the past 
year farm wages have indeed increased, perhaps by as much as 11 percent, but 
farm prices and income have risen at least as fast or faster. 

It is possible that we may soon have to go much deeper into the problem 
of adjusting farm wages where shortages arise. In England, under the stress 
of a wartime economy, the problem of insuring an adequate labor supply for 
every vital field of production, including agriculture, has necessitated measures 
which to us would still seem extreme. On the subject of adjustment of farm 
wages, an English economic journal The Economist's "Commercial History of 
1040" contains the following : 

"For the future agricultural historian, the two outstanding events of the year 
1040 may well be the rise in minimum wage rates in June by about one-third to 
48 shillings a week, and the survey of individual farms carried out by the county 
war agricultural committees. The first measure removed at one stroke most of 
the ancient disparity between rural and urban wage rates. * * *" 



The following is a summary of the findings of the Farm Security Administra- 
tion's regional labor relations specialists : 


Connecticut. — A field investigation revealed that the most serious prospects 
of farm-labor shortages were faced by growers in shade tobacco. These growers 
are for the most part operators on a large scale and have had past experience in 
out-of-State recruitment of labor. The great concentration of defense activity in 
Connecticut is cited as a main cause of possible shortages. Wages are reported 
considerably increased. Effort is being made to tap new sources of labor, not- 
ably school boys on vacation. 

New Jersey. — Fears of shortages in New Jersey appear to be based on the 
expectation that the number of migratory farm workers entering crop areas 
will be reduced this summer, partly as a result of a child-labor law passed by 
the New Jersey legislature last year. A report of the New Jersey State Land 
Use Planning Committee indicated that wages were an important factor, but 
maintained that prices were too low to permit sufficient raises. 

Maryland and Virginia. — Reports of shortages have come mainly from Eastern 
Shore truck crop producing areas. Original estimates of shortages were higher 
than those made now. As in other States, greatest difficulty in getting enough 
labor is anticipated later in the summer when seasonal needs reach the peak. 

North Carolina. — Reports from North Carolina have been somewhat conflict- 
ing, although there are frequent assertions that labor will be short. It was 
reported during the spring that strawberries in the Chadbourn and Wallace areas 
were left unpicked because of labor shortgae. However, it was also reported 
that wages for strawberry pickers were decreased while the harvest was in 
progress and that market conditions also affected decisions not to bring in the 
whole crop. 

Pennsylvania and Delaware. — Reports from Delaware are contradictory. Field 
investigation in Kent and Sussex Counties indicated no difficulties in sight, but 
there are some indications of shortages in predominantly industrial areas. In- 
formation from Pennsylvania is scanty, with shortages only vaguely indicated. 

Indiana, Illinois, and Ohio. — It is indicated that the total supply of farm labor 
has been reduced, but it is reported that shortages are not a great threat for 
1941. It is also said that migration into industrial areas in these States has been 
artificially stimulated by the failure to utilize Negroes already in the industrial 
labor market because of discriminatory hiring practices. 

Mississippi, Louisiana, and Arkansas. — Shortages are reported in limited areas. 
Low wages are definitely mentioned as a factor. In some instances it is reported 
that men with previous industrial experience are attempting to return to industry 
on defense jobs. 

Michigan, — Shortages appear to be in prospect in areas near defense production 
centers where the attraction of higher industrial wages is greatest. Unfilled 
orders placed with the State employment service are reported. 

Minnesota and North Dakota. — Reports of shortages are accompanied by 
statements that wages are a factor of great importance and that in some instances 
the shortage is mainly of the most highly employable farm workers — younger 
men skilled in handling machinery. Heavy sales of farm equipment are reported 
in Minnesota, indicating an attempt to meet possible shortages with inci'eased 

Montana. — Only localized shortages are reported. Wage increases in an effort 
to prevent shortages are reported. 

Arizona, — Reports of shortages are concerned primarily with cotton picking. 
Fear is expressed that migrants who usually work in Arizona en route to the 
west coast may not stop off this year because of the attraction of possible em- 
ployment in southern California aircraft plants. 

Oregon. — Reduction in the supply of farm labor is apparently being met by 
more efficient use of the available supply. The situation in Oregon appears some- 
what more stringent than in Washington or Idaho. During the spring berry 
season, cooperation between the employment services of Oregon and California 
and the Farm Security Administration effected transfer of pickers from Cali- 
fornia to Oregon. However, this action does not necessarily imply an acute 
shortage since there are indications that the shifted labor force may not have 
been fully employed. 



Texas, California, Colorado, Washington, Idaho, and Wisconsin. — In the States 
in this group there was no strong evidence <>f shortages impending. For the 
Western Stales in particular it is indicated that the problem is essentially one of 
proper use of available supplies of labor. 

Wyoming, New Mexico, South Dakota, Nebraska, Kansas, West Virginia, and 
Missouri. — Reports from these States indicate quite consistently that the problem 
of farm labor supply is not serious, although too low wage rates might not draw 
farm labor into the market. 

South Carolina, Georgia, Alabama,, and Florida.- — Reports for these States 
indicate that any shortages would be likely to result only from local conditions, 
not from the total available supply of farm workers, which is considered ample. 
As evidence that shortages are not probable, it is stated that farm wage rates 
remain at low levels. 

Appendix A. Effect of the National-Defense Program on the Program of the 
Farm Security Administration in Region IV, States of Virginia, West Vir- 
ginia, Tennessee, North Carolina, and Kentucky 

The national-defense effort has been a mixed blessing for the low-income farm 
families in the five States of Farm Security Administration's region IV, compris- 
ing the States of Kentucky, North Carolina, Tennessee, Virginia, and West 

A substantial number of low-income families who are borrowers under the 
rural rehabilitation program have been helped materially by the defense work, 
especially those families who could continue their farming operations while one 
or more members of the family normally unemployed or underemployed in farm 
work, could take defense jobs. 

The availability of jobs at good wages in the defense program is, however, a 
serious threat to the security of a great many families who are in danger of 
losing their hold on the land and their opportunities for making a living on farms 
as a result of having given up their farming operations to enable the heads of the 
families to take defense jobs. 

The problem of preserving opportunities for farm people to return to farms 
after the emergency employment demands have been met is one of national im- 
portance. In general, the effect of the defense effort has been to aggravate and 
stimulate certain trends in American agriculture that have been obvious for a 
number of years. The trend to larger farm units, increased mechanization, 
change from tenant system to day-labor system, are being encouraged by the 
withdrawal of low-income farm families from farming to defense jobs. 

For instance, a tenant leaves his farm for a defense job, although usually 
the high-cost of housing and food in the defense areas leaves him liitle better 
off in the end. The owner, however, in fear of being unable to keep tenants, 
decides to change his operation and thenceforth farms the former tenant's 
acreage by tractor. When, or if, the tenant seeks to return to his place on the 
farm, the door of his opportunity will be closed. 

The much-talked-of shortage of farm labor, while not materializing to any- 
where near the extent feared, has also had the effect of encouraging mechaniza- 
tion and any other operating methods which reduce labor requirements on the 

As an example of this effect, the comment of Eugene W. Smith, secretary- 
treasurer of the Dunn Production Credit Corporation at Dunn, N. C, is of 
interest: "We have noted one outstanding fact since the opening of the de- 
fense work, more applications for loans to buy tractors and other power equip- 
ment have come in than ever before, which to me indicates an anticipation 
of a manpower shortage." Such substitution for labor is permanent and the 
one-time farm laborers, returning from defense jobs after the emergency 
has passed, will find no place in their former occupations. 

As far as the program of Farm Security Administration is concerned, how- 
ever, there has not been serious abandonment of farms, although there is some 
indication of abandonment of farm plans. 

The rural rehabilitation loans are based on a carefully planned, over-all 
operation of the farm and home, a plan of operation which provides the maxi- 
mum amount of food and feed for consumption in the horn* 1 and on the farm, 
as well as conservation of soil and water resources. 



The abandonment of these plans means that the family simply employs its 
available manpower in a different way. Certain parts of the farm operation 
are abandoned to allow the workers in the family to take defense jobs instead. 

Of course, abandonment of farm plans may be of any degree. Some families 
may make very little change in their planned operation, some may only give up 
those crops which require the greatest amount of labor, while others may 
abandon the entire operation. Wherever the defense job is near the farm 
home, the farm workers may continue with their gardens and subsistence live- 
stock which they can care for before and after working hours. 

A policy has been established in region IV whereby farm family heads who 
want to give up their farming operations to take defense jobs, but who expect 
to return to farming, may leave their chattels in care of another farmer, 
usually relatives, without being dropped from the Farm Security Administra- 
tion program. Such cases are then classed as "collection only" cases and the 
borrower remains fully responsible for the debt. In each case, the county super- 
visor must satisfy himself that the mortgaged chattels will be properly cared 
for. Very few borrowers, however, have availed themselves of this opportunity. 

Most of the borrowers who are abandoning either their farms or their plans 
are paying up their loans in full, as is evidenced by a comparison of the number 
of loans paid up in full during the first 6 months of 1940, before the defense 
program started, with the fir?^ fi months of 1941. 

For the first 5 States of region IV, there were 82 loans paid up in full in the first 
G months of 1940. During the same period of 1941 a total of 2,620 loans were 
paid up in full. It should be pointed out, however, that the general increase in 
farm income may account for the increase in loans paid up during the latter 
period. In many cases, of course, this increase in farm income is directly attrib- 
utable to the defense program, the demand for food for defense, etc. In addition, 
we expect to have a continually increasing number of loans paid up each year 
as the program progresses. Most of our rehabilitation loans are for 5-year 
periods, and the first 6 months of 1940 saw the wind-up of 5 years on the program 
for our oldest standard rural rehabilitation borrowers. 

At the same time the number of paid-up cases were increasing the number of 
cases dropped from the program decreased. For the region, the first half of 1940 
saw 1,652 borrowers dropped, while for the same period a year later only 1,086 
cases were listed as "dropped." In this connection, the term "dropped" cases in- 
cludes all the ways in which families may separate from the program, save com- 
plete payment of the loan. 

The following table shows the number of loans paid up in full, and the number 
of cases dropped for the first 6 months of 1940. compared with the first 6 months 
of 1941, by States : 

Table I. — Paid-up and dropped cases, Farm Security Administration, region IV, 
January to June 1940 and January to June 1941, by States 


Region IV 


North Carolina 



West Virginia. 

Paid up Dropped 


Paid up Dropped 



The general Increase in farm income, resulting from the national agricultural 
program, results of 5 years of soil building, the increase in prices of agricul- 
tural products, and the increased demand for foods, is also reflected in improved 
collections on loans during the same two periods, the first half of 1940 compared 
with the first half of 1941. 

In the first half of 1941, collections improved by 70 percent over the first half 
of last year, for the region. In all the 5 States of region IV, collections im- 
proved between these two 6-month periods. The following table shows the approxi- 
mate percentage increase in collections, adjusted for increased maturities on 
loans : 



Table II. — Repayments on rural rehabilitation, loans. Farm Security Administra- 
tion Region IV, January to June Ul'jO and January to June 191(1, by States 

State : °f increase 

Region 70 

Kentucky 60 

North Carolina 100 

State— Continued. of increase 

Tennessee 95 

Virginia 60 

West Virginia 45 

These figures indicate the effect of the studied effort of county supervisors to 
encourage borrower families to take the fullest possible advantage of opportuni- 
ties resulting from defense activity, whether in the production of foods needed 
for defense, or in taking off farm employment. 

We believe also that a substantial measure of this increase in repayments 
on loans is due to improved farm and home management practices. Not only 
has the technique of our own personnel improved, but the families themselves are 
now "carrying the ball" toward the goal of more production and preservation of 
foodstuffs on the farm, better health, better soil, and more productive lives. 

The table below shows the progress the rural rehabilitation borrowers have 
made in region IV. The figures are from the progress report letters from the 
Administrator to Members of Congress: 

Table III. — Progress of rural rehabilitation borrowers in Farm Security Ad- 
ministration, region IV, 1940, by prograss of average borrower 


Increase in net worth 1940 compared with year before 
borrowing from Farm Security Administration 

Increase in net income 1940 compared with year before 
borrowing from Farm Security Administration 

Value of goods produced for home consumption in 

Value year before borrowing 

Gallons of milk produced for home consumption in 

Pounds of meat produced for home consumption 

Quarts of vegetables and fruits canned for winter 




















These figures are not the results of 1 year's efforts — under the impetus of 
the defense program — but they indicate the contribution the rural rehabilitation 
borrowers have made to the national effort to improve diet and health. This 
is, of course, the Farm Security Administration's prime responsibility in the 
defense program, and points the way clearly to the need for even greater efforts 
in the same direction under the defense program. 

Our supervisors not only have advised the families on such matters as giving 
up farming for the high hourly wage defense work, but also on the use of the 
extra income. For instance, a borrower came into the Farm Security Ad- 
ministration office in a North Carolina county this spring and said he was going 
to use the money he was earning at an Army camp construction job to buy a 

He said he wanted that radio very much, and since he was current in repay- 
ments on his loan and had a "going concern" in his small farm, there was no 
reason why he should not put the extra money into a "luxury" item. The only ad- 
vice our supervisor gave him was not to buy the radio on the installment plan. 
It was fortunate that he did, because his job ended about ."> weeks later. 

It seems apparent from the comparatively small proportion of Farm Security 
Administration borrowers who have left farms that the Farm Security Admin- 
istration clients have a better hold on the land than thousands of other low in- 
come farm families. We feel the determination of Farm Security Administra- 
tion borrowers to maintain their ties to the land indicates some measure of 
success in helping these families to attain greater security and a sence of re- 

But the influx of the thousands and thousands of farm workers to the defense 
areas indicates to some extent the numbers of low income farm families— dis- 



tressed families — who are not receiving the assistance they need, or who have 
no ties to the land. 

This is borne out by census figures. Although 16 Southern States showed a de- 
cline of some 340,000 tenants in the 10 years from 1930 to 1940, the increase in 
the number of owners took up only 145,000 of these. There was a net loss of 
about 195,000 families on the land. At the same time there was an increase in 
rural population in every State. Where did the 195,000 "lost" tenants go? The 
answer was seen in part at the employment offices around defense projects. 
These were the people who had lost most of their property stake in democracy, 
but they were offering their labor in the fight for democracy. 

Still another index to the effects of the defense program on the low-income 
farm group is shown in the number of transfers among the counties in the five 
States of region IV. The number of transfers is nothing but the movements of 
families from one county to another. 

In the first half of 1939, throughout the region a total of 218 families moved 
from one county to another, usually but not always in the same State. In 1941, 
this number jumped to 1,062. 

The movements in defense areas were roughly one-third greater in defense 
areas than in the nondefense areas. The specialists of the Bureau of Agricul- 
tural Economics and the members of land use planning committees in the various 
States determined these areas for us, giving us a list of the counties most affected 
by defense activity, and those least affected. 

Generally speaking, no county in the region is wholly unaffected by the defense 
program. Some counties, however, including the surrounding counties as well 
as the actual locale of the defense project, have had their entire economies 
tremendously affected. In comparison, the counties far removed from the scene 
of industrial activity and those not in the top flight of agricultural production, 
have felt very little effect. The effect on these counties might be termed 
secondary, resulting not directly from the defense program, but from the gen- 
eral improvement in agricultural markets. 

The following table shows the number of transfers by States, for defense, and 
nondefense areas, during the first 6 months of 1939, compared with the first 6 
months of 1941. 

Table IV- 

-Transfers reported to regional office, January to June 19J/0 and 19'tl, 
by States, defense areas, and nondefense areas 




North Carolina 



West Virginia.. 

All counties 

1940 1941 




1940 1941 





These figures are all "in" transfers; that is, they reflect the new locations of 
these farm families. The areas, ''defense" and •'nondefense" do not include all the 
counties in the States. 

Some studies now being made, but not yet complete, seem to indicate that the 
"attraction" of the defense jobs is lessening somewhat, probably not because of 
reductions in the demand for labor but because the families still on the land, unat- 
tracted so far by defense jobs, are harder to pull off the land. They are holding 
on tighter. The basis for this belief is that the number of families moving into 
defense areas and nondefense areas and those families in the two areas having 
one or more members going into off-farm emloyment is beginning to equalize. 
At first the effects in the defense counties were considerably greater. 

We have recently begun to collect reports which show the number of families 
each month who have one or more members in off-farm employment, but we do 
not have this information for a long enough period to show the effect of defense 

The information received to date, however, indicates that a considerably 
greater number of our families have one member in off-farm employment than 


we have families leaving farms for other employment. There are several factors 
to be considered here. 

For the most part, our borrowers compose a supply of unskilled labor only. 
This would mean generally that they are eligible for employment at the time of 
construction of big plants, but that they do not have the necessary skills or 
temperament for industrial types of employment to qualify them for employment 
in operation of the plant itself. 

Frequently this unskilled employment is for only a short period and in eases 
in which the family has broken its ties with the land, its home county, and its 
own farm, a considerable hardship may be worked when the family loses the 
employment and is forced to look for another farm. Many of these families are 
not accustomed to handling money by weekly pay checks and And themselves 
considerably worse off at the end of the period of employment. The money is 
usually gone, debts may remain unpaid or new ones made, and it may be 6 or 8 
months before the customary renting period for farms opens. 

The very incomplete inquiries we have made into these conditions and their 
effects seems to suggest that most defense employment does not offer the average 
Farm Security Administration family continued security off the farm. It does, 
apparently, offer temporary high wages and high income, but our experience 
indicates further that Farm Security Administration families who leave their 
farms for this employment are within a year or two competing as part of a group 
of unskilled laborers for the reduced number of jobs remaining, and that ordi- 
narily the farm operator cannot compete successfully with experienced industrial 
labor. From the standpoint of the maximum benefit for the Farm Security 
Administration family, it appears that part-time off-farm employment for the 
head of the family or full-time off-farm employment for a member of the family 
not needed in the farm operation offers a source of immediate cash income which 
will benefit the family materially. 

Nearly every trend in agriculture in America today is working against the 
family which leaves the farm for temporary employment. One of the greatest is 
an actual shortage of farms. We are experiencing considerable difficulty in 
finding farms already for families displaced from the areas taken over for defense 

We are finding it difficult to find farms for applicants under the Bankhead- 
Jones tenant purchase plan. In the best agricultural counties, land costs are 
too high, and in the poor agricultural counties, the Tarver amendment limita- 
tions prevent prospective borrowers under the tenant purchase program from 
borrowing enough to set up a sound farm operation. 

These restrictions have in several cases made it impossible to relocate families 
displaced from the defense areas. In the sections in which large acreages have 
been taken over for Army camps, proving grounds, munitions plants, etc., the 
acquisition of land and the displacement of farm families has in every case 
been accompanied by an increase in the price of farm land. Th's condition may 
reach into several counties removed from the county in which the project is 

Prospects are fearful if the tapering-off of th-i defense effort and the forced 
return of additional workers to the farms, similar to the return-to-the-farm 
movement after the depression, leaves many families in the same situations al- 
ready faced by many tenants and sharecroppers moving out of defense areas. 

Only a few of the families who have moved out of these areas have been 
Farm Security Administration borrowers, prior to their moving. One of our 
major responsibilities in the defense program, however, is assisting the low- 
income families moving from these areas. 

In view of the extremely fair price policy of the Government agencies ac- 
quiring land, owners of land have been able to provide for themselves. Tenants 
and sharecroppers, however, have fared in proportion to their status. 

There are three military and munitions areas in region IV where the large 
numbers of families have been displaced. They are: 

Onslow County (Jacksonville. N. C.) marine base, 85,000: 505 families dis- 

Caroline County (Bowling Green, Va.) artillery maneuver ground, 70,000 
acres; 300 families displaced. 

Wolf Creek Ordnance Plant (Milan. Tenn. ). shell-loading plant, 23,000 acres: 
413 families displaced. 

The expansion of several Army posts in region IV. as well as the establish- 
ment of new ones, has caused some displacement in each case, but none of the 
proportions of the three named above. 


There have been numerous cases of secondary displacement, that is, tenants 
moving from the defense areas who own their tools and workstock displacing 
other tenants less able to bargain. As far as employment is concerned, the im- 
mediate shock of the displacement has been cushioned by the availability of 
jobs constructing the various camps or plants. In the cases of the Army camps, 
however, all jobs are gone when construction is complete. 

Farm Security Administration, working closely with the other agencies of 
the United States Department of Agriculture, has helped many displaced families 
find new homes. Field workers of the several agencies are on the lookout for 
suitable farm land, and sending their information to the Farm Security Admin- 
istration office at the project. Facilities of nearly all agencies of the Depart- 
ment have been used in the relocation work, including trucks owned by Civilian 
Conservation Corps. 

Farm Security Administration is concerned primarily with those families who 
do not have sufficient resources to acquire land, move and set up new farming 
operations. Rural rehabilitation loans are being made to families who can get 
land, to enable them to bridge the gap made by a forced move at midseason and 
to establish new and sound farm operations. Special loans are also being made 
to assist families to move. 

A special program has been established to assist those families — usually share 
renters or day laborers — who are wholly unable financially to move. Land has 
been purchased by State relocation corporations and subdivided into subsistence 
units large enough for garden and subsistence livestock, and prefabricated houses 
erected on each unit. 

A total of about 225 houses is being erected under this program, 75 at Milan, 
Tenn. ; 75 at Jacksonville, N. C. ; and 75 at Bowling Green, Va. About one- 
fourth of the houses at Milan are occupied, while the first families have moved in 
since July 1 at Jacksonville and Bowling Green. 

This housing is temporary, and it is planned that the residents will have employ- 
ment in the construction of whatever building is done on the land acquired. In 
every case, through agreements worked out between contractors and the State 
employment services, job preference is given to the families moved out of the 

Cooperation among the various agencies of the Department of Agriculture, as 
well as those of the Social Security Board and Federal Works Administration, 
has been effective through the county land use planning committees. These 
groups, bringing together all the interests of agriculture in a county, have been 
uniformly helpful in the job of easing the shock and relocating the displaced 

A great many of the families displaced from the various defense areas have 
found temporary employment, in both defense and nondefense industry outside 
of the project which displaced them, and have made temporary housing arrange- 
ments, usually with relatives. These families will, in nearly every case, be 
looking for farms within the next 2 years. 

Because of the speed with which the land acquisition was carried out, many 
of the families were forced to move before Farm Security Administration was 
ready to assist them. At Jacksonville. N. C, this resulted in conditions that 
threaten to be highly grievous. A number of Negro families, acting with initi- 
ative and a determination to help themselves, agreed to purchase 100 acres of 
land. Twenty-three families are now on this land, living in all manner of shelter, 
principally shacks. There are no water or sanitary facilities of any kind, and the 
land is poor. 

Thirty-five of the 75 prefabricated houses being erected for the evacuees of 
the Onslow base will be for Negroes. The 2?» Negro families who have con- 
tracted for land, however, may be in a different situation, and for the sake of 
health and future security, it is important that special attention be given their 

Only 1 of 12 resettlement projects in region IV has been seriously affected by 
the defense work. A total of 32 families have left Scuppernong project in North 
Carolina since the defense program started. They have gone to the Norfolk 
area, to Gamp Davis, to Fort Bragg, and to Wilmington. Two of this number, 
however, have gone into the Army and 11 have taken the places on farms and in 
mills of others who have gone into defense work. A total of 22 families have left 
Roanoke farms, in northeastern North Carolina, mostly for defense work in the 
Norfolk area. 

Seven of the projects have not lost a single family to defense jobs, but a total 
of 240 men living on the projects have obtained defense employment and are 


keeping up their farm operations and maintaining their homes on the farms. 
Of this number, 102 are in the Negro suburban subsistence project, Aberdeen 
Gardens at Hampton. Va. The men are employed in the shipyards. 

The developing pattern of agriculture, which depends on day labor and forces 
tenants and sharecroppers out ahead of advancing mechanization and expanding 
farms, developed an unexpected weakness along the Atlantic seaboard this spring. 
Fear of a labor shortage for the harvesting of berries, truck crops, and potatoes 
swept the entire section. 

There appeared to be good reason to expect such a shortage, because construc- 
tion jobs at several large defense projects had absorbed workers otherwise avail- 
able for the harvests. The growers of the berries and truck crops, most of whom 
are small farmers, began analyzing their own situation and their labor problems. 

Uniformly, from the South Carolina border to the eastern shore of Virginia, 
the growers realized that better housing for migrant agricultural workers was 
imperative if they ever expected to compete with the defense jobs for labor. 

Local health authorities, in every area of production of these crops, eagerly 
encouraged interest in better housing because of the obvious threat to health in 
the conditions in which most of the migrants lived during their visits to the 
various crop areas. As a result of both interests, requests were made to Farm 
Security Administration for the establishment of migratory labor camps in six 
producing areas. Preparation is now being made for the operation of five mobile 
camps next year. They will operate from the Chadbourn and Wallace straw- 
berry areas of southern North Carolina to the potato and truck section of 
Virginia's eastern shore. 

In connection with the improvement of housing conditions in these areas, the 
work of the North Carolina State Employment Service and the Virginia State Em- 
ployment Service, as well as the county agents, deserves special mention. Repre- 
sentatives of the employment services and the county agents worked closely with 
Farm Security Administration and assisted farmers in organizing committees to 
take some action looking toward improved housing conditions for the migrants. 

In both Virginia and North Carolina the labor subcommittees of the State 
land-use planning committees worked closely with both Farm Security Adminis- 
tration and the employment services. State directors of Farm Security Admin- 
istration in both Virginia and North Carolina are members of the labor sub- 
committee and in both States plans are being prepared for relief of the problem. 

The sudden absorption of available labor by the defense projects brought a 
realization of the changes that have been occurring in agriculture. Mr. C. W. E. 
Pittman, farm placement supervisor, of the North Carolina State Employment 
Service, has prepared a statement on "Some Aspects of Agricultural Employment 
in North Carolina." His paper was turned over to Farm Security Administration 
for submission to the committee and is attached. 

The threatened shortage of labor in the berry, truck crop, and potato areas was 
not as serious as feared by the farmers nor as serious as indicated in the press. 
In general, there were about 25 percent fewer workers available along the seaboard 
than in past years, but short crops and unfavorable market conditions, in berries 
especially, reduced the demand for labor. 

The labor shortage, however, was keenly felt by growers in areas near large 
defense projects. 

The labor subcommittees of the land use planning committee has been effec- 
tive in West Virginia, with Farm Security Administration working in close 
cooperation. The pattern of agriculture is slightly different in this mountain- 
ous State and industrial workers habitually return to small subsistence farming 
operations during periods of unemployment. There was a decided increase in 
the numbers of small farm operators, both tenants and owners, from 1930 to 
1040. and many of these workers are now returning to industrial employment. 

The defense program, and the national emphasis on improved diet, lias given 
a tremendous impetus to the program Farm Security Administration has been 
carrying out for .~i years. The effect has been noticeable, not only in the renewed 
vigor and determination on the part of the personnel of Farm Security Admin- 
istration to aid and encourage low income farm families to provide better food 
for themselves, but also in the public support of this phase of our program. 

Tins work is more important in the South than in any other section of 
America. During the same week that President Roosevelt proclaimed our youth 
the keystone of defense, the Census Bureau reported that the number of youth 
was declining in every section of America except in the South. 

For this and other reasons, the problems of southern agriculture are the 
problems of America. Its real meaning was dramatically expressed by Mr. 


Jonathan Daniels, editor of the Raleigh (N. C.) News and Observer in a speech 
before the Progressive Education Association at Ann Arbor, Mich., on July 8, 
and reported in the Christian Science Monitor the following day. 

"In terms of the people it supports, southern agriculture is declining," said 
Mr. Daniels. "To save the land itself, it should support fewer still. It should 
give the agricultural South which had half the farmers but only a fifth of the 
farm implements, a chance at successful farming. But people displaced are not 
people disappeared. And in terms of defense spending, the South's industrial 
development when it is most needed and the most money is available beside 
national necessity, has until recently been denied. And too much denied where 
the greatest labor resource in America exists. 

"Even in this mechanized age, men are the first resources of war. 

"Even in this battle for democracy abroad, the meaning of democracy at home 
is important — more important probably than ever before. Democracy is not 
only ballots, but bread and a chance to earn it by sweat and not to take it in 
charity — charity begrudged sometimes by those who deny its recipients the 
chance to work. 

"Increasingly, the powers in this conflict are not merely the powers of planes, 
tanks, ships — essential as they are. The issue has been raised beyond the 
battlefields — indeed sometimes the battlefields seem to be disappearing — the war 
is fought where people are — and the war will be won where the courage and 
faith of the people stand." 

Speaking of the need for permanent industrial employment in the South in- 
stead of temporary construction jobs, Mr. Daniels said the South still had unem- 
ployment while cries of shortage were heard : 

"They stand in line waiting while America talks of a boom," said Mr. Daniels. 
"We have a right in national defense to urge a defense which is national and 
which considers the strength, the welfare, and the will to participate, of all the 
regions and people of this country." 

Farm Security Administration program in the South thus becomes a first line 
of defense, defense against hunger and waning opportunities. The effect of the 
defense program has been to readjust sights, to focus more clearly on the basic- 
problems of people and land, to strengthen democracy at its roots, by an ag- 
gressive and progressive effort to relieve poverty on the land and relieve the 
poverty of those forced off the land. 

"Conservation of human, soil, and water resources" means strengthening the 
foundations of democracy, preserving opportunities as well as institutions, re- 
placing and renewing the stake in democracy and society for millions who are 
losing not their will to democracy but their share of it. 

Raleigh, N. C, July 12, 1941. 

Some Aspects of Agricultural Employment in North Carolina 
by o. w. e. pittman, faem placement supervisor 

A large tobacco grower recently requested the employment service to secure 
100 harvest hands for him, stating that he had enough empty tenant houses on 
his place to quarter them for the 4 weeks' harvest period. The workers were 
secured from four towns within a radius of 50 miles of his farm. Some referred 
were his own displaced tenants. 

Here is pictured a change in agricultural pattern that is spreading widely and 
rapidly in North Carolina. First, there is the increased use of machines for the 
planting and cultivation of crops that makes it possible for the farmer to greatly 
reduce his working force for '.) or 10 months of the year. It is no longer necessary, 
nor is it good business, for him to maintain on his farm for 12 months the 
relatively much larger force needed for harvest. A second element in the picture 
presents the emptying of tenant houses and the concentration of displaced tenants 
in nearby towns and villages where they seek casual or Work Projects Adminis- 
tration jobs until crops which they have not planted or cultivated are ready for 
harvest. The picture is completed when the farmer at harvest time recalls his 
displaced workers for a few weeks' temporary employment. 


The traditional pattern of agricultural employment in this State has been that 
of the landlord and a large or small group of tenant families living and working 
on the farm for 12 months of the year. The number of tenants maintained de- 


pended on the amount of work to be done. Since the preparation of soil and 
cultivation of crops was done wiih simple types of equipment, there were no very 
meat differences in the labor demands of the seasons. It was possible, and good 
business, for the farmer to maintain on his farm all year approximately all the 
labor he needed to harvest his crop. The pattern was characterized by the 
closeness and the relative stability of the bond between farm workers and farm 
jobs, a bond that was expected to hold for a minimum of 12 months. The pattern 
was fun her characterized by the absence of any marked unbalance in seasonal 
labor demand. While the system left much to be desired with respect to both 
social and economic considerations, it presented few difficult recruitment, trans- 
portation, and living-quarter problems. 

Certain factors have operated for the last decade or so to seriously disrupt 
this traditional, simple, relatively stable employment pattern and to substitute 
for it a pattern characterized by the looseness of the bond that connects farm 
workers and farm jobs. The increased use of machines in nonharvest opera- 
tions and the difficulty of adapting machinery to harvest operations have pro- 
duced a marked unbalance in the amount of labor needed throughout the sea- 
sons. It is no longer necessary, or good business, to maintain on the farm 
for 12 months all the workers needed during the 2 or 3 harvest months. .Ma- 
chinery has made it possible to dispense with many workers for most of the 
year; the general status of farming as a not very profitable industry has made 
it desirable to do so. 

Farming for many farm folk has become temporary, short-period employment 
in the harvest of crops which they did not plant or cultivate ami for which 
they must leave their new town or village homes in the morning, ride 30 or 
40 miles in a truck, work all day, and return home at night. Still others find 
it necessary to leave their homes for weeks or months at a time and travel 
hundreds of miles in order to maintain contact with farm jobs that are nc 
longer stable either as to space or time. As this is being written, trucks are 
being loaded with workers at three of our offices for employment in Delaware. 
Several hundred have in the last month been sent to Virginia, Maryland, Dela- 
ware, and New Jersey. 

Other factors than technological change are operating to undermine the old 
patterns. General economic conditions, affecting adversely the prosperity of 
our farmers, have given rise to crop curtailment programs which have, at 
times, reduced the plantings of important crops by almost one-third. This 
has correspondingly decreased the number of farm jobs available. The device 
of effecting curtailment of production through compensatory benefit checks has 
tended to increase the number of wage workers and decreased the number of 
sharecroppers and renters since wage hands do not share in benefit payments. 
Increased industrialization and commercialization, especially in fruits, berries, 
and vegetables, have substituted newer patterns which cause tremendous influxes 
of seasonal harvest workers. 

Under the older system, sharecropping was the most important pattern of 
farm employment. Although it is still deeply embedded in the agricultural 
system of the State, it now shows unmistakable signs of breaking up under 
changed conditions of the present day. By nature, sharecropping charges the 
farm with a fixed labor force for the whole 12 months of the year. As we 
have seen above, this is no longer necessary and, from the standpoint of 
management, it is most often undesirable. Benefit payments for compliance 
with agricultural adjustment programs influence farmers to produce more crops 
with wage labor and less with tenants and sharecroppers who would participate 
in benefit payments. Sharecroppers have decreased 13 percent in number since 
1930. All types of tenants decreased more than 10 percent during this period. 


More wagt labor used. — With the decline of sharecropping there has come 
a compensating increase in wage labor. The wage worker does .not call for the 
splitting of benefit checks. Neither is he a charge on farm resources during 
dull periods. In many important respects he fits the newer conditions better 
than the sharecropper or the renter. Field observation of employment service 
workers indicate a large and a rapid increase in wage workers. 

Space scparat(x workers and jobs. — When sharecroppers and renters move 
off the farm they most often go to the nearby towns and villages, where they 
subsist on casual and Work Projects Administration employment during the 
9 or 10 months when the farms offer no jobs for them. These concentrations 


of erstwhile rural workers form reservoirs of unemployed or underemployed 
workers from which farmers draw their casual and seasonal workers. During 
harvest seasons, trucks ply hack and forth between these labor concentrations 
and the farms, hauling workers from their homes in the morning and back 
in the evening. One hour's travel for a truck is usually considered a reason- 
able distance to transport these workers, although when labor is scarce much 
longer hauls are made. One farmer hauled his bean pickers 76 miles twice 
a day last year. 

Fruits, berries, potatoes, and vegetables in several areas create such heavy 
demands that enough labor can not be found within an hour's driving radius to 
harvest them. This gives rise to a differing pattern characterized by the neces- 
sity for quartering workers for weeks at a time. Operations are not large 
enough or profitable enough to enable all farmers to provide adequate quarters. 
Makeshifts are quite common. Tobacco pack houses, barns, and other out- 
buildings are often pressed into service. These are not always in good repair. 

A map is attached which shows the area of labor supply for the Chadbourn 
strawberry area. The lines on that map show the various labor concentrations 
that contributed to the labor force for the 1941 season. (See exhibit A.) 


With so much needed labor separated by such distances from farm jobs, 
methods of recruitment are necessary. 

There are two important recruiting patterns commonly used. One is the 
"labor runner." This person is just what the name implies. He accepts orders 
from employers and does the almost incredible amount of foot work necessary 
to recruit this type of worker. The runner charges an agreed amount for 
each worker recruited. These charges range from 10 cents to $2 per worker 
delivered. The most usual price is 50 cents per head. 

The group leader is another most important recruiting agent. These farm 
workers tend to cohere in groups of from 5 to 50 around some individual worker 
who acts as leader. The group leader usually gets his remuneration in the form 
of an increase in wage over that of the average worker. In return he keeps the 
group together and renders the farmer simple supervisory services and personnel 
services while the workers are on the premises of the employer. The essential 
differences between the runner and the group leader are that the runner "sells" 
his workers at so much per head and ordinarily does not remain with them on 
the job. The group leader does not "sell" his workers and does remain in charge 
of them on the job. 

Much of the work of the employment service has been visiting potential labor 
concentrations, locating cohesive groups, and establishing working relationships 
with their leaders. Over 200 such groups have been located in eastern Carolina 
tins spring. 

The employment service is doing more and more each year to bridge the gap 
between the farm worker and the farm job. It has filled about 15,000 such jobs 
this spring. 


While mechanization and changing economic forces have subjected farm work- 
ers to severe pressure in their rural area homes, the increased production of 
vegetables in widely scattered and relatively small areas of highly concentrated 
production creates a vacuum that sucks workers into a succession of short-time 
employments as crop maturities follow each other in the various areas. These 
two forces, a push from diminishing job opportunities at home and a pull from 
increasing worker needs in distant production areas, set the stage for extensive 
and wide migrations synchronized with crop maturities. These migrations are 
becoming more and more important in this State in that they both augment the 
available labor supply at certain times by bringing into the State thousands of 
workers, and decrease it at other times by taking workers out of the State. 


There have been two large defense projects in progress in the State during the 
winter and spring. Both are now practically complete but, during the spring 
and early summer, both drew heavily on farm labor reservoirs. 

Construction was under way at both Fort Bragg and Camp Davis during 
the strawberry harvest. Most strawberry pickers are women and children. 


Therefore, construction work does nor directly affect them as a potential labor 
supply for the berry harvest. The indirect effect, however, is great. When 
the head of a family is making good wages, as the men employed on defense 
work did, the economic pressure on the family is eased, and the women and 
children do nor go ro low-wage jobs a long way from home. Since economic 
pressure is a most important force in recruiting strawberry pickers, rhe relief 
Of this pressure by defense employment greatly curtailed the number of workers 
available. Employment-service employees, while recruiting workers for spring 
and summer crops, found that the number of cohesive groups of workers were 
materially decreased and that the number of individuals in the groups was 
also greatly reduced. The best estimate is that these reductions indicate at 
least a 25-percent decrease in labor availability, due almost entirely to defense 

The employment service made a survey of Harnett County in January in 
order to estimate the problem being created there for farmer employers. The 
survey revealed rhar at that time very many farm workers were employed at 
Fort Bragg, and that there was a definite shortage of wage hands, that share- 
croppers and tenants were quite generally taking time off their defense employ- 
ment to start crops in anticipation of a return to the farm in March or April. 
Most farmers were glad for their tenants to get this winter employment and 
confidently believed they would return to their crops in the spring. There is 
some, not very conclusive, evidence that this anticipated return to the farm 
was not as prompt or as general as was anticipated. The agricultural agent 
for the county wrote me in March : 

"It was the thought, generally speaking, of our people that a number of this 
type of laborers would return to the farm on or about March 1. However, 
this apparently has not materialized as I have heard more discussion in the past 
few days than before of the shortage of this type of labor. There seems to 
be a tendency on the part of our farm owners here to feel that they will not 
need as many tenants as in former years; however, there is a very definite 
shortage in this county in this connection. We have had no requests for help 
along this line; however, this may develop a little later on." (C. R. Ammons. ) 

In order to give a fuller picture of the effect of a defense project on farm 
employment in a nearby rural county, I quote below statements made by 
representative residents of Harnett County, which is near Fort Bragg. These 
statements were made in January of this year. 

Mr. 0. T. Lattimer, secretary-treasurer, National Farm Loan Association, 
Dunn, N. C. : "I do not believe that any of these farms will lose their allotments 
because several of these owners have told me they will just run their rows 
and stick the seed or plants in the ground. Many have told me that by Feb- 
ruary 1 they will have made more clear money than they have cleared in the 
last 2 years." 

Eugene W. Smith, secretary-treasurer, Dunn Production & Credit Corporation, 
Dunn, N .C. : "We have noted one outstanding fact since the opening of the 
defense work, more applications for loans to buy tractors, and other power 
equipment have come in than ever before, which to me indicates an anticipation 
of a manpower shortage." 

A farmer: "No shortage at all. Only difference is, before work began at the 
fort I had two applications for every farm where I only have one now. All my 
farms are rented except one I just took over this week." 

A farmer: "Day labor is mighty hard to get. If the farmers don't return to 
their homes by March 1, there will be plenty of farms laying out. Only man I 
know needing a tenant, is J. R. Sorrell." 

A farmer: "The Fort Bragg work has helped the farmer, both tenant and 
landlord, more than anything else. They are making enough to pay out on last 
year and the landlords are not having to furnish them now. Excepting day 
labor, everything looks better to me than if has in a long time. I'm in favor 
of letting them eat good and eat long while they can. They'll all come home 
when the time comes. No shortage at all." 

A farmer: "No shortage except wage hands. Big land owners who have been 
Cultivating their crops with day labor are the only ones hollering." 

A farmer: "No; there is no shortage. If it hadn't been for the work at Fort 
Bragg there would have been a panic in this section. We have all the tenants 
we need. You will be able to tell more about idle farms about the middle of 
March. Most of our farmers quit Fort Bragg long enough to sow their plant 
beds and then went back." 


A farmer: "Fort Bragg work is fine stuff. But if them soldiers come in run- 
ning over our land we are going to fight them, and there's plenty others like me. 
If they stay in the roads, all right, but don't let none of them run over my tobacco 
patch. No shortage." 


Mr. Arnold. Mr. Baldwin your statement has been made a part of 
the record, and with your permission I shall ask you some questions 
based on your statement. 

Mr. Baldwin. Yes. 

Mr. Arnold. Will you describe for the committee the effect of the 
defense program thus far upon your rural rehabilitation loan program ? 

Mr. Baldwin. Mr. Arnold, the need for these loans in the rural 
areas of the country among low-income farm people does not seem to 
have been diminished greatly as a result of the defense program. 

We have thought it advisable to make some adjustments in the work 
we were doing, and we have had some additional loads thrown upon 
us as a result of certain defense activities. 

The number of people involved in some of these defense activities 
have been relatively small, but the additional work that is thrown on 
our agency has been out of proportion to the families involved. 

For instance, there have been about 14,000 families displaced because 
of the location of defense plants and military establishments, and so on, 
and these families, many of them, have had no place to go and no 
means by which they could relocate themselves, so we have tried to do 
what we could to take care of them. Farm Security has helped nearly 
9,000 of these families to get relocated. 

We have been, at the request of the President and the Coordinator of 
Housing, using our facilities for small-house construction and for the 
building of some dormitory facilities for defense workers. We have 
handled that. We have also set up some trailer camps to take care of 
families who recently migrated to defense areas and who have employ- 
ment, but for whom there were no decent living accommodations. We 
were asked to do that, I guess, largely because of our experience in han- 
dling or managing the migratory labor camps over the country, and 
that has been proceeding fairly smoothly, I think. 

Perhaps the most important thing, though, that we are doing at the 
present time that is related to the defense program, is our part in the 
development of agricultural products — food products for defense ac- 
tivities — increasing the production of certain foods that are needed 
both in this country and by the democracies. 

We have, through our county supervisors and our whole Federal 
organization, been advancing funds and giving whatever encourage- 
ment we could to low-income farm families to engage in that great 

I think that is a rather brief but a general statement about the 
changes that have taken place as a result of the defense effort. 


The Chairman. These rehabilitation loans are for the purpose of 
keeping farmers at home and, of course, that is one of the solutions of 
this migration problem, isn't it ? 


Mr. Baldwin. Yes. 

The Chairman. In other words the Farm Security Administration 
goes in and makes loans to these farmers for feed, for livestock and 
so on so that they can remain on the land? 

Mr. Baldwin. Yes, sir; that is correct. But, Mr. Chairman, in 
some few instances it might be possible that we have kept some fam- 
ilies on the land who didn't belong there, but our feeling has been — 
and this has been particularly true in recent years in the northern 
Great Plains section where they have had recurrent droughts over a 
number of years — that if they left home that their suffering would be 
greater than if they remained there. It has been true that in some 
areas we have helped people where there was very little opportunity 
at home for them. 

Something more substantial should be done for them. How- 
ever, we don't look on our job as merely to do something to stabilize 
a community. We want to stabilize them in a community in which 
they have an opportunity. 


The Chairman. How many families have you helped, Mr. Bald- 
win I 

Mr. Baldwin. Over 1,000,000 families since this program started 
about 6 years ago. 

The Chairman. And have you a waiting list? 

All-. Baldwin. We have a constant waiting list that doesn't seem 
to diminish very much. We generally have about 400,000 families 
who have applied to us for help whom we feel could be rehabilitated 
on the land that they are on now. 

We have been increasing the numbers of families we reach about 
100,000 each year for the past few years but we cannot complete the 
rehabilitation of 100,000 families each year, so our case load has been 
continually growing. 

We have never been able to expand enough in any one year to 
take care of the obvious need. 

The Chairman. Well, this whole thing is based upon the idea that 
they are to pay these loans back. How have these farmers that you 
have been helping been getting along? 

Mr. Baldwin. Well. Mr. Tolan, I think perhaps the greatest 
accomplishment of this program is not in terms of the money that 
i hey have paid back, although I want to give you those figures be- 
cause I think it is rather amazing — I think there has been an awfully 
strong prejudice in this country among many people against poor 
people. Some folks have felt that poor people were poor just because 
they were, to use the common expression, "no account" and they were 
••unwilling to work." 

I think our greatest accomplishment has been that we have blasted 
that idea as far as low-income farm people are concerned. It simply 
isn't true. 

We do not measure rehabilitation in the terms of collections: we 
measure it in the terms of the things that are happening to those 
families — the things that are happening to the children and the new 
opportunities that are open to them because of whatever additional 

60396— 41— pt. 17—13 


income they can get and the feeling of the rest of the community about 
them — the increased respect that they get from the community be- 
cause of the economic progress they have made. But on the collec- 
tions, we have collected approximately $200,000,000 from these families 
and that is out of advances — I will have to correct these figures for the 
record— of about $550,000,000. 

Now, these loans are for 5 years so most of the money isn't due yet. 
Approximately 75 percent of the loans that have matured have been 
paid. We thought we were optimistic a few years ago when we said 
we thought our ultimate recovery from these families who couldn't get 
credit from any other source would be about 80 percent. 

I think that we will soon be able to revise those figures and say that 
these families that other credit institutions have not reached will 
repay substantially more than 80 percent. 


The Chairman. Mr. Baldwin, coming down to the question that 
Congressman Arnold asked you, what effect has the defense program 
on these rehabilitation loans ? 

Mr. Baldwin. Well, Mr. Chairman 

The Chairman. Of course, there is a feeling in the United States 
that this national-defense program of spending has relieved unem- 
ployment but, as a matter of fact, we had testimony here yesterday 
and the day before that there were over 5,000,000 unemployed who 
have made application through employment agencies and are still 

Now, the question I want to get at is simply this : These rehabili- 
tation loans have been made in every State of the Nation, I presume. 

Mr. Baldwin. We have made rehabilitation loans in every State in 
the Union. That brings on this question : 44 percent of our loans 
have been made in the South. That takes in, I guess, Oklahoma 
and Texas and all the way to the eastern seaboard and through 
Virginia — from Virginia south. Forty-four percent of our loans 
have been made in those areas; 10 percent of the defense contracts 
have been awarded in those same areas. But even that wouldn't give 
you an entirely accurate picture because even the 10 percent which has 
gone to the South and Southwest is concentrated in areas where it 
doesn't reach these rural families and where it is difficult for them to 
get out and get the work that might be available. 

Less than 3 percent of our borrowers are in the northeastern States, 
and those States have received about 45 percent of all the defense 
contracts. As you see, defense contracts have not had an appre- 
ciable effect on our program or on our families. 

Mr. Arnold. Did I understand you to say 14,000 families to whom 
you have made loans have been affected by defense industries? 

Mr. Baldwin. Approximately 14,000 families, and that number is 
growing each day, have actually been uprooted because a defense 
plant or a military establishment has been placed on the land on 
which they were living. 

Now, of those families we have helped about 9,000. The rest of 
them had sufficient equity or have been able to relocate themselves with- 
out Government help. 


We have had to help more than half of them but, however, with re- 
gard to the others who have relocated themselves without Federal as- 
sistance, they create a secondary displacement problem which does 
affect us because they may go out and rent or buy a farm and some other 
family will move off and then that family becomes a problem for our 


Mr. Arnold. Do you know how many of your clients have left 
their farms in search of defense employment? 

Mr. Baldwin. No; I do not, sir. That is a rather difficult figure 
for ns to get at. We have a figure based on reports that our county 
supervisors have submitted, indicating that approximately 1 percent 
or somewhat less than 1 percent of our clients left their farms for 
industrial employment during the month of May. 

That figure by itself I don't think means very much because there 
is always some movement of that sort even in normal times. The 
only statement that I would venture would be it hasn't been a very 
important factor yet in our operations. 

Mr. Arnold. If they still owe the Government money, would they 
have to get permission from your county agent to move ? 

Mr. Baldwin. No; they are free to move whenever they want to. 
Of course, they have a responsibility for the chattels or the goods 
on which we have a mortgage. We have very few cases where they 
walk off and leave property without taking it up with the supervisor 
and giving the supervisor an opportunity to help them work out of 
the situation. 

We like for them to do that, of course, and expect them to do it. 
Of course, we have had a considerable movement from time to time 
in areas where cantonments are being built. 

For instance, families would go in and get some temporary work 
and then move back to the farm when the work was completed, which 
helps them to a certain extent. 

Mr. Arnold. Is there any way a check of your rehabilitation super- 
visors could furnish an estimate of how many of your clients or 
members of their families have obtained defense employment? 

Mr. Baldwin. I think it would be almost impossible to get the 
figures of those who have gotten defense employment per se. We 
are working on it, however, and we hope to develop some better 
method than we now have for getting statistical information about 
the movement from farm to industrial centers, but I don't think that 
any figure-; we could submit right now would he very accurate. 


Mr. Arnold. Have you any figures as to how the selective service 
has affected your program? 

Mr. Baldwin. No, sir; we have not. The average age of the re- 
habilitation clients is 45. Of course, there will be a good many cases 
in which the sons of clients have probably been drafted, but we have 
no method of getting at that in any accurate way. 

Mr. Arnold. Is the geographical location of your clients such that 
they can take advantage of the defense employment? 


Mr. Baldwin. Well, as I mentioned just a few minutes ago, nearly 
half of our clients are in the South and only 10 percent of the de- 
fense contracts have been placed there. 

Only 3 percent of our borrowers are located in the North, and 45 
percent of the contracts have been placed there. 

Mr. Arnold. Of course, there will be a great deal of defense effort 
in the South by these plants that are being built now. 

Mr. Baldwin. Yes. Of course, there is a good deal — there is going 
to be a large, a very large proportion of the Army trainees who 
will be in the South and we hope that that is going to afford some 
better outlet for farm products that we haven't had a southern market 
for heretofore. 

We are working on that phase of it. 

Mr. Arnold. From the point of view of occupational skills could 
Farm Security clients obtain much defense employment? 

Mr. Baldwin. Well, again, the matter of age enters into it. The 
average age is about 45. I think the best opportunities would be for 
the children. These children, if they are afforded proper opportuni- 
ties — which unfortunately have not been open to them in the way 
that they have been among other economic groups — for training I 
think they would develop skills as quickly and as satisfactorily as any 
other group. 


Mr. Arnold. How has the obtaining of defense or industrial em- 
ployment affected the carrying out of the farm plan of your clients? 
Have the farm plans been reorganized? For instance, in the south- 
eastern sections of the country where agricultural defense activities 
have been changing the type of farming, have the farm plans been 
reorganized ? 

Mr. Baldwin. The farm plans have been reorganized on the basis 
of the program that the Secretary of Agriculture announced in 
April, urging increased production of certain products — dairy prod- 
ucts, poultry products, and some fruits and vegetables. 

We have made an effort, a strong effort, particularly in the South, 
to reorganize farm plans to comply with the "food for defense" pro- 
gram and we are getting reports on it now that are really very 
encouraging — very heartening. 

Mr. Arnold. I don't know whether I understood whether you have 
as many applicants on your waiting list as you have had since the 
program was initiated. I was wondering if the improved farm 
situation has improved to the point where the need for the F. S. A. 
has diminished ? 

Mr. Baldwin. Of course, the only basis that I have for reply to 
that question is the results through this past fiscal year. We had 
as many requests in the last fiscal year for assistance — that is the 
year ending July 1 — as we had in the previous fiscal year, and 
the previous fiscal year we had more applications than we had had 
in the whole 6 years in which this program has been operating. 

There are, perhaps, areas where there have been and will be a 
diminution of requests, but in the country generally, no — there is 
no indication of any falling off. 



Mr. Arnold. Wouldn't you think that the improved industrial em- 
ployment with consequent improvement in the price and demand for 
farm products would cut down rural poverty? 

Mr. Baldwin. To a certain extent; yes. But I think the thing 
that has to be borne in mind about the farm situation and the prob- 
lem of rural poverty and low-income groups in agriculture is that 
50 percent of our farm families, and these are the so-called farm- 
operator groups — that is the owners, tenants, sharecroppers — 50 per- 
cent of these families only get 12 percent of the farm income. The 
top 50 percent get approximately 88 percent of the farm income. 

So, just from those figures alone it seems to me to be pretty 
obvious that you cannot cure this situation by price measures alone. 
You have got to get at so much more fundamental difficulties if 
you are going to help these people, because, of course, it is helpful 
to a low-income farm family to get a better price for their produce, 
but their share in the market is so small that any assistance that they 
are going to get purely through price increases and increased con- 
sumer demand is not going to give them a standard of living that 
we would like to call an American standard of living. 

Mr. Arnold. In other words, they don't raise so much for the 
market. They operate small farms. I think I understand that 
thoroughly. I have one of your tenants on a farm that I own 
and they raise more of what they need and feed on the farm and don't 
have a very big cash income. 

Mr. Baldwin. That is right. 

Mr. Arnold. It is more of subsistence farming. 

Mr. Baldwin. The first thing that is a very important part of 
rehabilitation is to encourage the raising of more food that will 
be consumed at home and give them a better balanced diet; but 
the bottom 50 percent of the farmers in this country haven't been 
an important factor in commercial farm production. 


Mr. Arnold. Has not the increased demand for farm produce in- 
creased the need for more farm workers, thus relieving agricultural 
unemployment considerably ? 

Mr. Baldwin. I think the defense effort will have to go a lot 
further than it has yet to relieve what we have called "agricultural 
unemployment," or I think a better term might be "agricultural 

Undoubtedly agriculture could operate with many families less 
than are now on the land. Those figures vary. I think there are 
at least a million and a half or a million eight hundred thousand 
surplus farm workers now on the farms that are not essential to our 
agricultural production. 

Mr. Arnold. Do you have any way of knowing how many farm 
families in and out of your program have been forced off of the 
land because of the Army's land purchases ? 

Mr. Baldwin. Approximately we have helped about 9,000. There 
have been about 14,000 families that have been forced off because of 


defense activities. About 9,000 of those have been helped in some 
way by Farm Security through loans or grants or through, in some 
cases, the purchase of land which will subsequently be sold to them 
or in other ways. 

The Chairman. Of course, there will be many forced off of the 
land whom you will not help and because of that you would have 
no way of knowing how many have been affected by the Army pur- 
chases of land. 

Mr. Baldwin. In many cases we wouldn't have that information. 
Of course, in certain areas we were advised soon enough and 
we were able to make a rather complete survey of the number of 
families in the area and then we know the number that we have had 
to help, but there have been a good many who relocated themselves of 
whom we would have no record of, I am sure. 


Mr. Arnold. Could you tell me, in view of the movement of many 
farm workers to the industrial centers, of any critical farm-labor 
shortages and, if so, in what areas do you have knowledge of that? 

Mr. Baldwin. We have had reports from five States in which farm- 
labor shortages of some magnitude seem to be developing. They 
are New Jersey, Maryland, Connecticut, Virginia, and North 
Carolina. In all five cases the wage levels were mentioned, however, 
as a main factor in producing the shortage. 

In 14 of the 36 States we have had reports of slight or highly local- 
ized shortages and in the remaining 17 States there were apparently 
no shortages of any magnitude. 

In one of our reports, which I am submitting for the record, we 
have gone into that in greater detail. 

Mr. Arnold. Do you have any figures showing the wages paid to 
farm laborers in those five States ? 

Mr. Baldwin. I don't think we have. I don't think that has been 
submitted for the record. 

Mr. Arnold. Do you have any areas where there has been an actual 
failure to get the crops harvested because of a labor shortage? 

Mr. Baldwin. I know of but one area in which that has prob- 
ably occurred. In the harvesting of the strawberry crop in North 
Carolina this last spring and early summer there were some reports 
that the shortage of farm labor there had resulted in all of the crop 
not being harvested. 

I think perhaps the marketing situation had something to do with 
that. As I understand, strawberry prices were very low at that 
time and it is rather difficult to get at the real cause of the failure to 
harvest the crop, but there was a shortage of farm labor there in 
that area. 

That is the only area that we have knowledge of where it became 
so critical that crops were not harvested. 


Mr. Arnold. Does the F. S. A. play a large part in the subcom- 
mittees on labor of the State land-use planning committees? 


Mr. Baldwin. We have 12 regional offices throughout the country. 
In each of those regional offices we have a labor-relations representa- 
tive who has worked with these farm-labor subcommittees to the 
extent that it was possible to do so. 

Mr. Arnold. Is any check made here in Washington on the short- 
ages estimated by these committees before they are given publicity 

Mr. Baldwin. You mean on the land-use planning committees? 

Mr. Arnold. Yes. 

Mr. Baldwin. I don't think so. I think up to this time, anyway, 
they have issued their reports independently without reference to 

Mr. Arnold. How can Farm Security help out where there is a 
critical farm-labor shortage? 

Mr. Baldwin. In areas where we have mobile labor camp equip- 
ment we can probably help out if the problem is a problem of 
housing shortage or facilities for workers. 

We have also, of course, worked with the Farm Placement Service 
in a good many of the States in reporting situations and also in 
helping them direct the flow of migrant workers into areas where 
employment opportunities were best. 

Mr. Arnold. Can you give me those States? 

Mr. Baldwin. I think the best illustration of that was the situ- 
ation in Oregon recently where both of our regional offices, one lo- 
cated in San Francisco and the other in Portland, Oreg., cooperated 
with the Farm Placement Service in assisting to get additional labor 
into the State of Oregon, which I think worked out fairly well. 

Mr. Arnold. I thank you, Mr. Baldwin. That is all the questions 
I have. 

I just want to say that this committee is interested in what is 
going to happen after this defense effort is over with respect to 
workers who have migrated to take positions in defense areas. It 
is my opinion that the Farm Security Administration will have an 
even greater work to do in relocating these families. 

I know from my own personal knowledge of the great work that 
has been done — in fact it has been my opinion since the depression 
started that many of our citizens had to be satisfied on a small 
farm without much cash income, but able to make a living and 
go along and become good, useful, self-respecting citizens such as 
you have outlined in the case of your farmers — the citizens who 
are poor but who have gained their self-respect and the respect of 
the community and I think that has happened very largely in the 
case of the families your organization has assisted. 

That is all, Mr. Chairman. 

The Chairman. Mr. Baldwin, I want to say to you that the Farm 
Security Administration has been of great assistance to this com- 
mittee all during our existence and we appreciate that very much. 

We may call upon you through the committee's staff from time. to 
time for further figures. We intend to make another report to Con- 
gress within a few weeks, dealing with the testimony that we have 
obtained regarding this defense migration and you probably have 
many figures and statistics that will be helpful to us. 


I repeat again the committee is very grateful to the Farm Security 
Administration and to yourself for coming here this morning. 

Mr. Baldwin. I appreciate the privilege of appearing before the 
committee, and we are glad, of course, to cooperate with the committee 
in any way we can. 

The work already done by this committee has furnished us one 
of the best possible guides in properly administering our program, 
and we want to reciprocate by helping in any way we can. 

The Chairman. Of course, we heard about you through our differ- 
ent hearings, especially in Nebraska and Oklahoma, and I guess the 
committee was of some assistance to you in holding back about $20.- 
000,000 or $25,000,000 worth of loans. 

Mr. Baldwin. Yes, sir. 

The Chairman. Thank you very much, Mr. Baldwin. 

Our next witness is Mr. Palmer. 

The Chairman. Mr. Reporter, this is Mr. Charles F. Palmer, Co- 
ordinator, Division of Defense Housing Coordination, Office for Emer- 
gency Management. 


The Chairman. Mr. Palmer, I want to say to you that the com- 
mittee appreciates very much the manner in which you and your office 
have cooperated with us by making available the records of your office. 

We are glad to have you here again so that we may hear an account 
of your work in the interval since last March. 

As you know, we have just returned from a series of field hearings 
held in San Diego, Calif.; Hartford, Conn.; Trenton, N. J.; and 
Baltimore, Md., where we heard a great deal of testimony with re- 
spect to regional or local needs. In other words, Mr. Palmer, during 
the last session of Congress we traveled throughout the United States 
investigating the migration of destitute citizens and reported back to 
Congress. Now, of course, we are concerned with the problem of 
migration resulting from the national-defense program. 

We have visited different places, as I say, to see just how housing, 
for instance, is getting along. Dr. Lamb has some questions based 
on your statement, Mr. Palmer, that he would like to ask you. 

Mr. Palmer. Mr. Chairman, the Division of Housing Coordina- 
tion shares very definitely the feeling that it is an opportunity which 
we welcome to confer with you in order to get your views and to 
make available to you all the information we have. 

The hearing last March developed angles that were helpful to us. 

The various investigations you have conducted in different parts 
of the country — as Dr. Lamb knows, and as you do, sir, and the mem- 
bers of your committee know — we have kept actively in touch with 
and have profited by them, so if you care to have me, Mr. Chair- 
man, I would like to read this statement which touches upon the 
many questions you very thoughtfully gave us in advance. We will 
stick to those and at the end of the statement it will be a pleasure to 
try to answer any other questions that you or any member of the 
committee may care to ask, if you would care to proceed in that 


The Chairman. Mr. Palmer, we have tried that out in a good 
many instances and we find that there is a lot of duplication. In 
other words your entire statement will be incorporated in the rec- 
ord. As you know, we have some prepared questions based on your 
statement and we would like to proceed that way unless you would 
lather read it. 

Mr. Palmer. I should like to do this — I should like to read, if 
you concur, just the first two pages of my statement which will give 
us a foundation on which to proceed. 

The Chairman. All right, you may go ahead. 

Mr. Palmer. Then we have some charts that touch upon different 
developments that possibly could be included in the record. 

The Chairman. You may proceed. 

Mr. Palmer. I should like to read the first two pages, if I may. 

Mr. Chairman and gentlemen of the committee, your primary interest 
concerns migration. Well, we certainly have something in common 
there, because if it weren't for the migration of workers the problem 
of defense housing would be much simpler. As the hundreds of thou- 
sands trek across the country, each to do his job for Uncle Sam, we 
have to provide housing and so because of this great common interest 
between the constructive hearing your committee is having and the job 
we are required to do, you will probably want to hear first from me 
what our duties are. [Reading from statement referred to above.] 

On January 11, 1941, the President established by Executive order 
the Division of Defense Housing Coordination as a part of the Of- 
fice for Emergency Management of his Executive offices. 

He delegated to the Coordinator the following duties and respon- 
sibilities quoted from the order : 

To facilitate proper coordination of. and economy and efficiency in, the pro- 
vision of housing facilities essential to the national defense; anticipate the need 
for housing in localities in which persons are engaged, or are to he engaged, in 
national-defense activities; facilitate the fall use of existing housing accommo- 
dations ; formulate and recommend to the President coordinated defense housing 
programs, and advise each Federal housing agency of its part in each proposed 
program; facilitate the execution of approved housing programs through pri- 
vate industry or through appropriate governmental agencies and take appro- 
priate steps' to eliminate obstacles which impede the expeditious provision of 
defense housing. 

Copies of that Executive order, which I should like to place in the 
record, were transmitted to all the agencies concerned, together with 
a letter from the President, dated January 17, 1911, which further 
emphasized the duties and responsibilities delegated to me. 

I should like to read that letter : 

The White House, 
Washington, I). ('.. January 17, l'.t' f l. 

In order to provide for the more effective coordination of the Government's 
defense housing program, I have recently established, by Executive order, a 
Division of Defense Housing Coordination within my own Executive offices. 
At the head of this Division I have appointed Mr. Charles P. Palmer and have 
delegated to him responsibility for assuring that the delays and shortages in- 
volved in providing adequate defense housing facilities are quickly eliminated. 

I am requesting Mr. Palmer to prepare for me a statement covering the imme- 
diate status of the defense housing program and to submit to me thereafter a 
weekly consolidated report describing the progress being made by the several 
housing agencies, in meeting established housing needs, and indicating the 
points at which the program is lagging. 

The coordinated and expeditions development of housing in strategic defense 
areas will require the unstinting cooperation of the numerous Federal agencies 


concerned with this vital feature of our defense effort. I am, therefore, request- 
ing the several agencies of the Government and the Advisory Coniruission to give 
every assistance to the new Coordinator, to the end that our defense housing 
activities may progress in an orderly and expeditious fashion. 
Sincerely yours — 

And signed : "Franklin D. Roosevelt." 

(After reading the above introductory portion Mr. Palmer sub- 
mitted his prepared statement, the body of which follows, together 
with the Executive order to which reference is made above. These 
documents are as follows:) 



You have requested "a general statement with regard to defense housing needs, 
indicating how estimates of need are made, and the steps being taken to meet 
them." A booklet recently issued so fully describes this procedure, that I ask 
permission to have pages 10 through 20 which cover this point made a part of the 
record. 1 Of course, we shall be glad to furnish additional copies of this booklet. 

In accordance with your request for information concerning the "effect of title 
VI of the National Housing Act on private building in defense centers," I am fur- 
nishing a graph which tells more than many words. 2 Note that this chart shows 
that construction under title IV is clearly in addition to the total volume of other 
construction under the Federal Housing Administration plan. Prior to title VI, 
activity under title II during the early months of 1941 was running substantially 
ahead of last year. After title VI began to function, business under title II main- 
tained just about the same margin over last year as it had done before, and the 
large volume of operations under title VI was added to the great activity under 
title II, producing in 14 weeks of operation applications for mortgage insurance 
on over 22,000 buildings, which will accommodate slightly more than that number 
of families, since some of them are multiple dwellings. Actual construction dur- 
ing this 14 weeks' period was started on over 5,400 homes and the rate is rapidly 
climbing. Last week, 992 were placed under construction. There is one other 
aspect of the operations under title VI which I should like to bring out : namely, 
that the major part of this business has been concentrated in a relatively small 
number of the defense areas in which title VI operates. 

In reference to your request for information concerning homes registration 
bureaus in defense centers, summarizing the number of applications made and the 
rooms and homes registered, classified according to rent range, I am submitting the 
attached tabulation. This statement shows that up to the present time homes 
registration offices have been organized and are now operating in 86 cities and 
that they are in process of organization or under consideration in 164 additional 
cities. For 30 of these cities we have already received reports of operations which 
indicate that up to about the end of May the offices had registered a total of over 
8,000 family dwelling units and about 20,000 rooms. They have received applica- 
tions from about 6,500 home seekers and over 2,500 single persons looking for fur- 
nished rooms. Of the applicants, over 2,100 have been placed in family accom- 
modations and over 1,800 in rooms. These figures represent only the beginning 
of the operations of the homes registration offices. Most of the offices have been 
organized for so short a time that the reports do not represent the volume of activity 
to be expected when the organization is completed. In many cases, the period of 
operation has been so short that no report at all is yet available. The record to 
date, however, is sufficiently impressive to show that the homes registration offices 
can easily become one of our most important instrumentalities in finding accom- 
modations for defense workers and in facilitating the full use of existing residen- 
tial accommodations. 

You have also asked for a statement about private construction and our pro- 
grams for private enterprise. The available statistics on private construction 
leave many important areas inadequately canvassed, but it can be very approxi- 
mately estimated f hat during the fiscal year just ended private builders started 

1 See p. 6885. 
a See p. 6906. 


work on some 515,000 homes in the nonfarm sections of the United States. Of 
these, perhaps three-fifths or two-thirds were in defense areas. The total repre- 
sents' an increase of about 21 percent over volume turned out in the 1939-40 fiscal 
period. While these homes ranged in cost all the way from less than $2,000 to 
more than $25,000, the average value is believed to have been slightly more than 
$5,000. In point of view of units, however, well over half, and perhaps as many 
as' three-quarters, cost less than $5,000. Most of these houses were for sale, but, 
even so, they have resulted in a substantial addition to the rental market. In 
one recent test that we have had made (covering Washington, D. C.) , it was found 
that nearly 6 out of every 10 people building or buying houses come from rented 
houses. Thus the builders of homes for sale or for owner occupancy contribute 
materially to the supply of homes available for rent. Under title VI of the 
National Housing Act, the proportion of direct rental properties has been higher 
than in private building generally, and it now appears that at least a quarter of 
the units currently being built under that title are rental properties. 

Because of the' vast number of communities in which there is some defense 
activity, it has been neither possible nor practical to set up specific programs for 
private building in every one of these places. This does not mean, however, that 
private builders are not being counted upon in every defense area. On the con- 
trary, if private building fails to do the lion's share of the necessary home 
construction in most defense centers, the task which will be left to public 
housing will be many times that presently envisaged. Thus far the performance 
of private builders in supplying local needs has been too mixed to permit any 
generalizations. In communities like Boston, Canton, Jacksonville, Washington, 
San Francisco, Oakland, and Alameda private construction appears to be pro- 
viding its full share of the housing needs. On the other hand, a pick-up in the 
rate of private building is needed in Buffalo, Bridgeport, Philadelphia, Pitts- 
burgh, and South Bend, if the needs of the defense program are to be met. 

You have expressed an interest in priorities ; we tried to be foresighted in this 
matter and have worked out between the Priorities Board and our Division 
general principles of an agreement, details of which are being developed and 
which it is hoped will be announced in a few days. This arrangement will 
facilitate granting priorities assistance for public-defense housing projects and 
such private housing as serves defense needs. For the record I submit a state- 
ment of the general agreement between Mr. Stettinius and myself. 

With reference to your request for "a summary of the arrangements made 
for regional and State coordination of Federal housing agencies," it is impor- 
tant to note that we have tried, in our work of coordination, to disturb as 
little as possible the normal program of some 13 housing agencies and to assist 
all of them in fulfilling their maximum capabilities in meeting the need. In 
doing this, we have considered that coordination at the Federal level was ade- 
quate since we operate with each agency through its own field organization. In 
this connection, we have used the facilities of the State and local defense 
councils, a part of which is a housing committee composed of local citizens. 
When appropriate, we have urged the use of the splendid facilities of State 
housing boards and commissions and local housing authorities as we do in our 
phase of housing. The local housing committee conducts the homes registration 
offices, stimulated by the Division of Defense Housing. 

In order properly to coordinate housing with other defense agencies, there 
are now written statements of relations between offices of the Coordinator of 
Health and Welfare, Price Administration and Civilian Supply, and Civilian 
Defense. The splendid machinery which has been developed, will begin presently 
to show the benefits of mutual understanding of the functional areas of opera- 
tions of the various agencies concerned with the problem confronting us. 

Mr. Chairman, it has been a pleasure to appear before your committee. I 
am pleased to report such progress to you. The loyal and energtic leadership in 
the various housing agencies bespeaks the ability of our Nation to meet the 
need for housing in terms of defense, a preparation for the real job in the 

Exhibit A. — Executive Order 

coordination of national defense housing 

January 11, 1941. 
By virtue of the authority vested in me as President of the United States 
by the Constitution and the statutes, in order to define further the functions 


and duties of the Office for Emergency Management of the Executive Office of 
the President with respect to the national emergency as declared by the Presi- 
dent to exist on September 8, 1939, and for the purpose of providing for the 
effective discharge of responsibilities imposed upon me by the statutes men- 
tioned in paragraph 1, and for assuring proper coordination of all defense hous- 
ing activities, it is hereby ordered as follows : 

1. The term "defense housing" as used in this order shall include all housing 
authorized by — 

(a) United States Housing Act of 1937, approved September 1, 1937 
(50 Stat. 888), as amended, so far as projects developed under the authority 
of this Act relate to national-defense activities. 

(b) Title II of the Act of June 28, 1940, 54 Stat. 676, 681. 

(c) Second Supplemental National Defense Appropriation Act, 1941, 
approved September 9, 1940 (Public, No. 781, 76th Cong.). 

(d) Act of June 11, 1940, 54 Stat. 265 (including housing authorized 
by allocations from emergency funds available under such Act). 

(e) Act of June 13, 1940, 54 Stat. 350 (including housing authorized by 
allocations from emergency funds available under such Act). 

(f) Act of October 14, 1940, Public, No. 849, 76th Congress. 

2. The term "Federal housing agency" as used in this order shall include 
all executive departments and independent agencies, including corporations in 
which the United States owns all or a majority of the stock, either directly or 
indirectly, which — 

(a) Plan, construct, or operate defense-housing facilities. 

(b) Grant loans or subsidies for public-housing purposes. 

(c) Encourage or assist the financing or construction of private housing. 

(d) Conduct surveys or analyses of housing conditions and housing 

3. There is hereby established within the Office for Emergency Management 
of the Executive Office of the President, a Division of Defense Housing Co- 
ordination at the head of which there shall be a Coordinator of Defense Hous- 
ing appointed by the President. The Coordinator of Defense Housing, here- 
inafter referred to as the Coordinator, shall perform his duties and functions 
under the direction and supervision of the President and shall report to the 
President through the Liaison Officer for Emergency Management. The Coor- 
dinator shall receive compensation at such rate as the President shall approve 
and in addition shall be entitled to actual and necessary transportation, sub- 
sistence, and other expenses incidental to the performance of his duties. 

4. Subject to such policies, directions, and regulations as the President may 
from time to time prescribe, the Coordinator, in cooperation with all depart- 
ments and agencies which have responsibilities for defense activities, and 
utilizing the services and operating facilities of Federal housing agencies to 
the maximum, shall perform the following duties and responsibilities : 

(a) Establish and maintain liaison between the several departments and 
establishments of the Government and such other agencies, public or pri- 
vate, as the Coordinator may deem necessary or desirable, to facilitate 
proper coordination of, and economy and efficiency in, the provision of 
housing facilities essential to the national defense. 

(b) Anticipate the need for housing in localities in which persons are 
engaged, or are to be engaged in national-defense activities ; analyze re- 
ported defense-housing needs ; coordinate studies and surveys of Federal 
housing agencies in areas of national-defense activity ; and facilitate the 
full use of existing housing accommodations. 

(c) Formulate and recommend to the President coordinated defense- 
housing programs with the objective of avoiding shortages, delays, dupli- 
cation, and overlapping in defense housing : and advise each Federal hous- 
ing agency of its part in each proposed program. 

(d) Facilitate the execution of approved housing programs through pri- 
vate industry or through appropriate governmental agencies and take ap- 
propriate steps to eliminate obstacles which impede the expeditious pro- 
vision of defense housing. 

(e) Advise with private and Federal agencies in the formulation of 
plans, terms, rental, and management policies, and other factors involved 
in developing and operating approved defense-housing projects. 


(f) Keep continuously informed of the progress of the defense housing 
program, and report regularly thereon to the President and to the several 
interested departments and agencies. 

(g) Review proposed or existing legislation relating to or affecting defense 
housing activities and recommend such additional legislation as may he neces- 
sary or desirable to assure the effective and expeditious provision of adequate 
housing facilities for persons engaged, or to be engaged, in national-defense 

( h ) Perform such other duties relating to the coordination of defense 
housing as the President may from time to time delegate. 

5. Within the limits of such funds as may be appropriated to the Division of 
Defense Housing Coordination, or as may be allocated to it by the President 
through the Bureau of the Budget, the Coordinator may employ necessary per- 
sonnel and make provision for the necessary supplies, facilities, and services. 
However, the Division of Defense Housing Coordination shall use insofar as 
practicable such statistical, informational, fiscal, personnel, and other general busi- 
ness services and facilities as may be made available through the Office for Emer- 
gency Management or other agencies of the Government. 

Franklin D. Roosevelt. 

The White House. 

Regulations Governing Defense Housing Coordination 

January 11, 1941. 
Pursuant to the Executive Order of January 11, 1941, entitled "Coordination of 
National Defense Housing," the following regulations are prescribed in the 
interest of effective coordination of national-defense housing : 

1. The definition and use of the terms "defense housing," "Federal housing 
agency," and "Coordinator" contained in the above-mentioned Executive Order 
of January 11, 1941, shall also apply to these terms as used in these regulations. 

2. All defense housing programs or projects requiring certification, approval, 
allocation of funds, a finding, or other action by the President as prescribed by any 
of the statutes mentioned in paragraph 1 of the Executive Order of January 11, 
1941, mentioned above, or in any statute now or hereafter enacted relating to the 
provision of housing for persons engaged in national-defense activities, shall, prior 
to presentation to the President, be submitted by the Federal housing agency con- 
cerned to the Coordinator for his review and recommendation. The recommenda- 
tions of the Coordinator shall cover all items to be determined by the President un- 
der the legislation pursuant to which such defense housing is being provided and 
shall further cover the relationship of such housing to the defense housing program 
of the Government, method of financing, agency to be utilized, character of the 
project, development, operation, and management plans, and such other considera- 
tions relating to the coordination of the defense housing program as may be perti- 
nent. All submittals to the President as required by the above-mentioned statutes 
shall be accompanied by the recommendations of the Coordinator. Any revisions 
in such defense housing projects effected subsequent to review and clearance by the 
Coordinator substantially changing the scope and character of the original project 
shall be reported to the Coordinator, who shall advise the agency concerned of 
the effect of such changes upon the coordinated defense housing program. 

3. Each Federal housing agency shall promptly furnish to the Coordinator for 
his review and recommendation the standards which it has established, or which 
it proposes to establish or revise, for the development, operation, and management 
of defense housing projects with respect to — 

(a) Physical characteristics, including standards of design, construction, 
site selection, amenities, and community facilities. 

ib) Labor standards. 

(c) Standards of occupancy, operation, and management, including rent 
levels and policies. 

Any Federal housing agency submitting a proposed defense housing project to the 
Coordinator for his review and recommendation, as set forth in paragraph 2. shall 
certify that the standards established for such agency have been or will be com- 
plied with, except as the project proposal may indicate. 

4. In order to coordinate site acquisition for defense housing purposes, all pro- 
posed site locations under consideration for defense housing projects shall be 


reported to the Coordinator by the Federal housing agency concerned. The 
Coordinator shall advise such agency of the relationship of its proposed sites to 
other actual or propose defense housing sites in the same locality. 

5. Each Federal housing agency shall furnish to the Coordinator copies of 
such available housing surveys and reports and such other available information 
and data relating to housing needs and housing markets as he may request; 
and shall cooperate with the Coordinator in obtaining and developing additional 
information necessary to a determination of the amount and character of defense 
housing needs. 

6. Each Federal housing agency shall keep the Coordinator advised reason- 
ably in advance of all proposed housing surveys and investigations relating to 
housing conditions and the housing market in any locality where the defense 
program has or is expected to have a significant effect on the need for housing. 
The Coordinator shall advise each agency of the correlation of its proposed survey 
and investigation activities with other surveys and analyses completed or in 
progress in the same locality. 

7. Each Federal housing agency shall promptly furnish to the Coordinator, at 
his request, such reports with respect to its activities and the progress of its 
program as may be necessary in coordinating and expediting the financing, con- 
struction, and operation of public and private housing facilities. 

8. The Coordinator shall furnish to the Director of the Bureau of the Budget 
such information and reports with respect to the planning, development, and 
progress of the Government's defense housing program, in such form and at such 
times, as the Director may require. 

Feanklin D. Roosevelt. 
The White House. 


Mr. Palmer. I think it is of vital importance, as we get into the 
matter, to understand what onr responsibilities are, and to see that 
they are clarified for the information of the committee. 

I shall be very happy for you to proceed informally, Mr. Chairman, 
if that is the way you would like to do. 

The Chairman. Yes. Dr. Lamb has some questions he would like 
to ask. 

Dr. Lamb. Mr. Palmer, does your organization maintain its own 
field force for an independent check on the housing needs in a given 
area ? 

Mr. Palmer. We use all the Federal agencies who themselves are in 
a position to reflect any light at all upon the needs, frequently checking 
their information by our own representative after the consolidated re- 
ports have come in to us from F. H. A., from the Home Owners' Loan 
Corporation, from W. P. A., and others w r ho have made exhaustive 
surveys in the areas, plus the home rooms registration department; 
and then we sometimes have local hearings. 

Probably the best example of the w r ay a determination is made would 
be that which happened in Pittsburgh. In round numbers last year, 
I think about 3^,000 houses were built in Pittsburgh. The expansion of 
the defense industries there has been so great that it was determined, on 
the best available information, that probably 15,000 houses should be 
produced there during the next year. 

There was no opportunity to curtail production of steel. Automo- 
biles were being curtailed in Detroit — to help in the solution of fur- 
nishing housing for employees. Unlike that city, Pittsburgh saw no 
curtailment. Consequently it was decided that probably 5,000 houses 
should be built with public funds — houses which could be integrated 
after the emergency into the slum clearance, low-rent-housing program 
of Pittsburgh and Allegheny County; and 10,000 houses w T ere to be 
produced by private industry through title VI and otherwise. 


That was such a startling statement, particularly among the people 
of private enterprise. It was immediately questioned whether 5,000 
houses should be built with public funds in the Pittsburgh area. 

Consequently, Dr. Lamb, we got them all to come down to Washing- 
ton. They spent the entire day here. We had the representatives of 
the private enterprises, the chamber of commerce, as well as the repre- 
sentatives of the local housing authorities, the labor organizations and 

At the end of that day they came out with a joint statement, which 
they all had signed, saying that 5,000 houses built by public funds and 
10,000 houses by private interests were what we should aim at. 

That, in general, gives you the Avay we go about making a determina- 
tion of need. 

Dr. Lamb. You cited certain governmental agencies which were re- 
lied upon to assist you in these estimates, and you mentioned the Fed- 
eral Housing and the Home Owners' Loan Corporation. Which 
agency or agencies do you most frequently call upon ? 

Mr. Palmer. Probably the Bureau of Employment Security. They 
are doing a great many surveys for us and then wo reimburse them. 
The Bureau of Labor Statistics also gives us a great deal of help and 
we also work with Mr. Hillman's office. 

We will be very glad, Dr. Lamb, if you would care for it, to put in a 
complete list of the agencies. 

Dr. Lamb. Yes. 

(The document referred to above is as follows:) 

Exhibit B. — Program of Surveys Relating to Defense Housing Needs 


The Division of Defense Housing Coordination has the responsibility of co- 
ordinating the special defense activities of the various Federal agencies engaged 
in the defense-housing program, and subject to Presidential approval recom- 
mends allocation of the funds provided by Congress for public defense housing 
construction. In order to discharge its responsibilities, the office of the Co- 
ordinator must have full and accurate information on all aspects of the housing 
situation in defense areas. 

The important factors considered by the Coordinator of Defense Housing 
in determining whether or not a need exists for additional housing facilities 
in a given defense area include — 

(1) The amount and type of prospective additions to the labor force. 

(2) The supply of suitable labor already resident in the area. 

(3) The supply of suitable housing currently vacant. 

(4) The current tempo of private building activity. 

(5) The real-estate market conditions in the locality, and prospects for future 
private building. 

The Coordinator relies mainly upon four existing Federal agencies to secure 
information on these points. The Bureau of Employment Security, in collabo- 
ration with State employment agencies, is equipped to make surveys of labor 
demand and supply throughout the country. The Work Projects Administra- 
tion lias facilities for making accurate, detailed vacancy surveys on a uniform 
basis promptly in all sections. The Bureau of Labor Statistics is the official 
source for information on the volume of private residential construction. The 
Federal Housing Administration has an extensive housing market analysis 
organization which for years has guided Federal Housing Administration 
insuring operations. 

The office of the Coordinator submits to one or more of these agencies 
requests for surveys of the four specialized types noted above for areas in 
which data on defense contract awards, or on military or industrial plant 


expansions, indicate defense housing may be needed. The number and type 
of surveys requested for any particular area depend upon the size and type 
of the area and the nature of the defense activity therein. In many cases the 
local situation can be covered adequately by the report of the Bureau of Em- 
ployment Security or the Federal Housing Administration alone. Where two 
or 'more surveys are made in a given area, each agency restricts itself to 
its own specialized field, so as to avoid duplicate requests for the same 
information and to minimize overlapping interviews with the same persons. 

Ordinarily the Bureau of Employment Security's labor survey is the first to 
be made in a locality, securing primarily data on the extent of the need for 
importation of workers. In the employment survey brief data on housing as it 
affects the labor supply are secured from employers and others from whom labor 
information is obtained, but no effort is made to secure housing data from other 
sources. The Work Projects Administration similarly restricts its activity to the 
making of the house-to-house vacancy survey, after making preliminary inquiries 
as to the existence of recent complete vacancy surveys by local agencies. The 
Federal Housing Administration ordinarily does not begin its survey until a 
labor report is available for use by Federal Housing Administration field men in 
the preparation of estimates of housing demand which are incorporated in their 
reports on the current housing situation. The Bureau of Labor Standards pre- 
pares monthly reports on the number of houses started based on building-permit 
information supplemented, where necessary, by other sources. 

Other surveys than those of the types described above are made by State and 
local organizations, and by Federal agencies concerned with other aspects of 
defense housing needs. Those made specifically for the use of the Coordinator's 
office include surveys of labor and housing in rural areas by the Farm Security 
Administration in cooperation with the Bureau of Agricultural Economics. Sur- 
veys of rental change are made at the joint request of the Office of Price Admin- 
istration and Civilian Supply and the Coordinator of Defense Housing, by the 
Bureau of Labor Statistics in the larger cities and metropolitan areas, and by 
the Work Projects Administration in smaller cities. A vacancy count is usually 
made by the Work Projects Administration in connection with each of its rental 

Other surveys, not made at the direct request of the Coordinator's office fre- 
quently are of great assistance. Among the additional surveys made by Federal 
organizations are the surveys of the need for additional community facilities 
made by the Work Projects Administration, in cooperation with other Federal 
agencies, and surveys of migration into defense areas made by the same agency. 

The local homes registration offices which operate in cooperation with the 
Coordinator's office also supply useful informat:on to the Coordinator, through 
the periodic reports on their operations and through making available reports 
prepared by local organizations which come to their attention. 

It is the policy of the Coordinator's office to utilize the above surveys and not 
make surveys itself. However, the regional coordinators are in the field with 
great frequency and thus observe first-hand local conditions. 


Dr. Lamb. This committee is interested in the procedure by which 
your office resolves differences of opinion on the part of various in- 
terested groups in a community, as to estimates of needed housing, and 
in that connection I would like to read a couple of excerpts from the 
Hartford hearing of this committee, in order to indicate to you what 
I mean by the "difference of opinion which might arise." 

For example, Governor Hurley, of Connecticut, a witness at the 
Hartford hearing, said [reading] : 

"I would not be overstating the fact if I should tell you that in every 
community in our State w T here there is production for defense, there 
is a great housing shortage and, morover, that housing shortage will 
not be met despite the sporadic housing construction that is in progress 
here and there. On the contrary it will probably occur in a more grave 
housing situation." 


On the other hand, Donald Sammis, works manager for the Under- 
wood-Elliott-Fisher Co., who has been connected with the State Defense 
Council in a committee on housing of that council, testified [reading] : 

"The tendency has been for us to have more of the roomer type of 
new employees, so I think that even though our estimate of 12,000 
has gone to 15,000 and then to 19.000 new employees in the area, we 
are apparently going to be adequately covered." 

Now, those are the two poles. The Governor's statement, of course, 
as quoted here does not refer to any individual community in Con- 
necticut, other than by suggesting that the communities where pro- 
duction for defense was taking place were so affected. Mr. Sammis 
does refer, apparently, to Bridgeport specifically. 

Would you indicate how your office proceeds in resolving such 
differences in order to get action? 

Mr. Palmer. The objective is to house defense workers. That means 
workers, of course. Consequently, the employment schedules of the 
industries we are trying to serve are of vital importance to us. 

Sometimes schedules will be set up, Dr. Lamb, that they expect to 
meet, and we go in and program accordingly. There may be a lag- 
in getting their employees or they may speed up ; consequently, our one 
barometer is that which is factual and can frequently dispel rumors 
that come from the opposite poles, just as you said. However, our 
sources must primarily be labor sources. Then we have, of course, 
building permits and construction agencies and all on the type of hous- 
ing supply as against the type of influx of labor supply. 

Now, Dr. Lamb, if the committee will take what is called our locality- 
program report on every one of several hundred areas, you will find all 
of the details of those programs, the sources, the people consulted, and 
the reasons for the final determination. Those are called locality- 
program reports and they have been given to you before. 

Dr. Lamb. Yes; I appreciate that. 

Mr. Palmer. Now, there is in this booklet, which I should like to 
offer to the committee members individually, and parts of it for the 
record, in connection with this statement 

Dr. Lamb. The reporter will make that an exhibit at this point. 

(The exhibit referred to is as follows:) 

Exhibit C. — Finding Housing Needs 1 

To carry out the duties under the Executive tinier, the Division of Defense. 
Housing Coordination must, first of all. gather facts. An Analysis Division, 
therefore, is charged with the duty of accumulating the information necessary 
to ascertain housing needs and to program projects to satisfy them. In accom- 
plishing this purpose, defense housing relies on a wide assortment of Government 
and private agencies, each of which can supply information either of a special 
or general nature. 


Homes registration offices report the status of vacancies and available housing 
in their areas, where such offices exist. 

Reports of plant expansions and, in this connection, notice of placement of 
large Government contracts which might result in such expansions are received 

1 Excerpt from booklet. Homes for Defense, a statement of function. Division of Defense 
Housing Coordination, Office for Emergency Management, Executive Office of the President, 
Washington, 1941. 

60396 — 41 pt. 17 14 


The Army and Navy submit statements of need for housing in the areas affected 
by their activities. 

State and local defense councils and their housing committees cooperate hi 
supplying information for their districts. 

Field studies are made for the Division by the Bureau of Employment Security, 
the Work Projects Administration, the Bureau of Labor Statistics, and the 
Federal Housing Administration. 

The Analysis Division also reviews periodic survey information from any 
Government agencies which may be in possession of pertinent facts, and the 
regional coordinators of the Division of Defense Housing Coordination report 
any information they may receive directly in the course of their trips in vhe field. 

All these contribute to the fund of knowledge of housing needs which is neces- 
sary for the successful operation of a programming and coordinating agency, such 
as the Division of Defense Housing Coordination. 


Before formulating a specific program for a defense area several preliminary 
steps are necessary, of which the foremost is a thoughtful and thorough examina- 
tion of the community problem. Such examination aids materially in preventing 
dislocation of the normal life of the community, which is a vitally necessary 

The Division gathers all available information on the amount of housing 
available, proposed establishment or expansion of military or industrial 
plants, and the amount of additional labor which must be brought in — both 
that which is directly concerned with such establishments or expansions 
and that which is necessary to service the increased population. 

In the case of military establishments, the Army or Navy provides infor- 
mation with the addition of other data from Federal and local sources. The 
Office for Emergency Management, Government housing and fact-finding agencies, 
and local groups supply information on problems which arise in connection 
with defense industry. Studies of housing conditions in general, construction 
activity prior to and during the period of defense emergency, and available 
vacancies are made in the field. On the basis of material so gathered, an 
estimate can be made of the amount and type of defense housing which is or 
will be necessary to accommodate the workers. 


The Division also considers with great care such questions as the availability 
of transportation facilities. Meeting the need for housing in any locality neces- 
sarily means taking into account the convenience of transportation by electric 
lines, railroads, and highways. It is often possible to use houses in nearby 
towns and cities if commutation is feasible. The Division of Transportation 
of the National Defense Advisory Commission reviews programs recommended 
by the Coordinator for possible use of dwellings made available in this manner. 

Investigations are also made in each locality to determine the number of 
large buildings and homos which may be converted and modernized in order 
to increase the number of net dwelling units in the area. Modernization may 
be recommended, in some localities, in lieu of, or in addition to. new con- 
struction. The Federal Home Loan Bank Board and the Federal Housing 
Administration are actively interested in modernization, both in relation to 
meeting defense housing needs and in rendering the usual benefits of such 
remodeling to the neighborhood and community. 

Vacancy surveys, preliminary to setting up registration of houses, apart- 
ments, and rooms available, are made at the request of the Defense Housing 
Coordinator. The resulting figures are used in estimating need for now 
const i notions. 


After all possible alternatives have been studied and analyzed, the net need 
for now construction is ascertained. It must be determined in relation to 
present and future use of the houses, based on Army. Navy, and industrial 
expectation, and the present and future local real-estate markets. As the 
location of housing in relation to plants and also to the local and regional 
plan are of particular importance, recommendations taking this factor into 


account are made to the constructing agencies. Plans for locating new plans 
by the Army and Navy are submitted to the Coordinator for possible coopera- 
tion in producing new houses or using existing houses. 

The function of determining whether or not a need can be met by private enter- 
prise is specifically assigned to the Coordinator. The answer to this question is 
based on the local real-estate market, present and expected development, avail- 
ability of construction materials and labor, and direct advice from the Federal 
Housing Administration and the Federal Home Loan Bank Board. The urgency 
of many situations to date has caused the Coordinator to recommend immediate 
construction by Federal agencies with public funds, leaving a proportion of the 
need for private enterprise to care for. If, after a reasonable time, the private 
builders have not made progress in solving the problem, the program is again 
studied with the view of poceeding with the provision of housing with the assist- 
ance of the Federal Works Agency and the Defense Homes Corporation. 


For purposes of illustration let us suppose that in a given communily the 
coordinator hnds there is an immediate need for 1,600 dwelling units. 

It is determined that 1,500 of these units will be needed for the shelter of 
families of workers in defense industries. The remaining 100 units will be nec- 
essary for the families of enlisted personnel. 

When a description of need has been agreed upon, a program is laid out based 
on the legislative and Executive authority of the respective cooperating agencies. 
The over-all determination of the program for a specific locality is then submit- 
ted to review and comment to those offices within tbe Office for Emergency Man- 
agement which are concerned, and to the various housing agencies. These include 
the service initially reporting the need, the agency which is requested to execute 
the construction, and the agencies which can best gage the feasibility of private 
capital's participation. 

After these steps, the Coordinator issues the approval locality program report, 
presenting the current recommendation for the handling of defense housing need 
in the community. 

The report is sent to the President for his approval. Funds are made available, 
in the case of Government building, and the specific agencies concerned take over 
the task of carrying out the construction. 

Defense Town, U. S. A. 

Defense Town. U. S. A., a community whose suddenly expanding industry has 
called in thousands of workers from outside its commuting area to man the de- 
fense machines. This sudden bulge in population has created critical housing 
shortages. To find out the extent of such shortages, the Division of Defense 
Housing Coordination swings into action and prepares the locality program 


Locality Program Report, Defense Town. U. S. A. : This locality program report 
supplants tbe special locality program report approved bv the Coordinator, 
January 30, 1941. 

/. Summary 

1. Report of need: It appears that due to the construction of the new airplane 
factory of the Defense Aircraft Corporation, a new industry in Defense Town 
will result in the need for at least 1,245 family dwelling units. 

2. Housing situation: If is reported that on January 27, 1941, Defense Town 
had a 0.7 percent vacancy ratio not including substandard dwellings, but 0.4 
percent of the units for rent were under $50 per month. 

1 The following locality program report has been taken from the flies of the Division of 
Defense Housing Coordination and reports actual programming of defense-housing needs. 
Only the name of the city lias been omitted and the names of the companies whose expanded 
activities created the housing shortage. This report graphically portrays how various 
agencies of the Government, along with private enterprise, were marshalled to alleviate these 
defense-housing needs. 



II. Detailed discussion 

1. Report of need : The total report of need of 2,245 family dwelling units has 
been arrived at after several conferences with the personnel director of the 
Defense Aircraft Corporation. This is a new industry requiring almost entirely 
new personnel. 

2. Defense activity : The Defense Aircraft Corporation purchased the Defense 
Town plant of the Benson Aviation Manufacturing Co. and a large expansion 
program is now under way. As the additional plant facilities are now completed, 
the labor requirements for the operation of the plant are large. 

Recommendation -for locality program 










T, or 



When needed 


tion or 


Aircraft workers. 






July 1, 1941 
Aug. 1, 1941 


PA 849i. 




40012 (T). 
40012 (T). 
40012 (T). 
4001 2 (T). 

Aircraft workers. 





50 Tr. 
200 Tr. 
200 Tr. 
200 TD. 













Mar. 10,1941. 
Apr. 10,1941 
May 10,1941. 

PA9 2 -. 


PA9 2 -. 

PA 9 »_. 






Aircraft workers. 









Aug. 15,1941 
Oct. 1, 1941 


PA 849 85 

Private. 4 


1 Presidential finding Feb. 3, 1941. 

2 Presidential finding Mar. 18, 1941. 

3 Finding of need by the President May 2, 1941. 

4 By virtue of the Presidential finding dated Apr. 9, 1941, the financing provisions of title VI of the National 
Housing Act are available in this area. 

6 Subject to the availability of funds. 

These recommendations are subject to the conditions stated in pt. IV. 

Note. — Explanation of symbols: 

D.— Dormitory units. For workers who arrive before their families. 

Fam. — Family dwelling units. 

C— Civilian employees of Army, Navy, or defense industries. 

T. — Temporary shelter: These units are to remain no longer than until an equivalent number of family 
units in permanent housing is provided. 

Q.— Considered desirable as permanent additions to the locality's housing supply, though period of use 
in connection with defense activity is uncertain. Projects designated as "Q" but built under PA 781 or 
PA 849 will probably be used for low-rental housing purposes after the emergency is over. 

Off.— Construction off present military reservation. 

Tr— Trailers. 

PA— Public Act— PA 849 enacted by 76th Cong.; PA 9 enacted by 77th Cong. 

FWA — Federal Works Agency. 

DH Corp. — Defense Homes Corporation. 

FSA — Farm Security Administration. 

3. Labor requirements and supply : The Defense Aircraft Corporation reported 
on March 1, 1941, that a peak employment of from 7,000 to 7,500 workers will be 
reached by the latter part of September 1041. This will represent an increase of 
from 6,000 to (1,500 workers since September 1940, at which time approximately 
1,000 aircraft workers were employed. 

It is estimated that about 2.300 of the new workers will be imported from 
outside the commuting area. It is estimated that at least 50 percent of these 


importees will be married and require housing. It appears thai the minimum 
wage will be 50 cents an hour for a 40-hour week for nonproductive employees, 
of whom there will be a small number. 

Productive employees will start in at 50 cents an hour for a 40-hour week for 
the first 2 months of service, then receive 55 cents per hour for the next 4 months; 
60 cents per hour for the following 2 months; and 62.5 cents per hour per month 
thereafter. This classification will probably total about 75 percent of the work- 
ers. Skilled workers will receive $1.10 and $1.25 per hour for a 40-hour week. 

4. Housing situation. 

General description. — The Bureau of the Census reports that Defense Town 
had a population of 1(57,402 people on April 1, 1940. an increase of 8.8 percent 
during the last decade, and the county had increased 15.4 percent during the same 
period, having a total population of 257,267 people. 

Defense Town combines the advantage of ready access to many raw materials, 
plus its position as the commercial capital of the South, which makes it the logical 
distribution center for a wide area. Located in the center of the richest agricul- 
tural section, it has become the natural market for grain, garden products, fruits, 
meat, and dairy products. Industrial development of the city has been well 
diversified, but cellophane and rayon are of primary importance among the 
products of the metropolitan area. 

Vacancies. — According to the April 1, 1940, housing census, there were 1,635 
vacant family dwelling units for sale or for rent in Defense Town, a 3.4-percent 
vacancy ratio. In the county there were 2,520 family dwelling units for sale or 
rent — a 3.6-percent vacancy ratio. 

On November 4, 1940, the Defense Town Housing Authority reported that its 
survey of 25,711 dwelling units in the predominantly substandard housing areas 
of Defense Town revealed that 19,198 units were substandard in character. Out 
of 13,159 of these dwellings for which the tabulations and data were available, 
890 units were vacant and 808 of these were definitely substandard. 

The Defense Aircraft Corporation reported on March 4 that the latest in- 
formation derived by the Defense Town Housing Authority survey, the Defense 
Aircraft Housing Department survey, and the real-estate board shows that 
on January 27, 1941, there was a 0.7-percent vacancy in Defense Town not 
including substandard dwellings. Only 0.4 percent of the units for rent were 
under the rate of $50 per month. It must be remembered that approximately 
one-third of the population of Defense Town is colored, and in all probability 
a large part of the vacancies are in the colored sections and not available 
or acceptable as housing for the white workers to be imported into the area. 

Public housing. — There are two public-housing projects in Defense Town 
which are being constructed under loan agreements between the United States 
Housing Authority and the Defense Town Housing Authority. One of the 
projects consists of 386 units and the other consists of 480 units. Neither of 
the projects is to be used for defense housing purposes. 

New construction. — The Bureau of Labor Statistics reports that building 
permits for 1,032 dwelling units, including 689 United States Housing Authority- 
aided housing project units were issued in Defense Town during the first 11 
months of 1940, and building permits for 1,325 units were issued in all of the 
county during the first 9 months of 1940. 

It is reported that large-scale construction is limited to 4 operative builders 
who can handle about 100 houses each per year. During 1940, when it was 
estimated that the construction industry was operating at a maximum effi- 
ciency, one of these builders constructed 107 homes and the others built far 
less than that number. 

During the period' 1922 to 1929 an average of about 600 homes were con- 
structed in Defense Town, but during the last decade private construction 
fell well below that average. This would seem to indicate that private enter- 
prise does not have the capacity or cannot be expected to supply all of the 
housing needed for defense workers, and at the same time meet normal housing 

///. Determination of net need 

The number of units as programmed in locality program reports 1 and 2, 
their tentative rental schedules, and their allocation are as follows: 

(a) Three hundred family dwelling units for families of civilian aircraft 
workers, proposed for construction by the Federal Works Agency under Public 
Act 849, for which tentative and approximate rentals are as follows: 300 units 
at $20-$30 monthly shelter rent. 


(b) Two hundred family dwelling units for families of civilian aircraft work- 
ers, proposed for construction by the Defense Homes Corporation, for which ten- 
tative and approximate rentals are as follows: 200 units at $35-$40 monthly 
shelter rent. 

(c) Two hundred demountable dormitory units for civilian aircraft workers.* 
These are to remain no longer than until an equivalent number of family units 
in permanent housing is provided. (See locality program report No. 2 (TS-1: 
temporary shelter) dated March 11, 1941, and approved by the President March 
18, 1941.) 

(d) Pour hundred and fifty trailers to accommodate 450 families of civilian 
aircraft workers. These are to remain no longer than until an equivalent number 
of family units in permanent housing is provided. (See locality program report 
No. 2 (TS-1 ; temporary shelter) dated March 11, 1941, and approved by the Presi- 
dent March 18, 1941.) 

(e) In consideration of the report cited above and the housing presently avail- 
able, it appears that a program of at least 745 family dwelling units in addition 
to those programmed in locality program reports Nos. 1 and 2 should now be 
provided in Defense Town for aircraft workers. 

The number of units, their tentative rental schedules, and their allocation in 
the same order as tabulated in C of part II are as follows: 300 family dwelling 
units for families of civilian aircraft workers proposed for construction by the 
Federal Works Agency under Public Act 849 for which tentative rentals are 
approximately as follows: 300 units at $20-$30 monthly shelter rent. 

These units considered desirable as permanent additions to the locality's 
housing supply, though period of use in connection with defense activity is uncer- 
tain. These units designated as Q but built under Public Act 781 or Public Act 
849 will probably be used for low-rental housing purposes after the emergency 
is over. 

(f) Two hundred and fifty family dwelling units for families of civilian air- 
craft workers, proposed for construction by October 1, 1941, by private enterprise, 
for which tentative rentals are approximately as follows: 250 units at $20-$30 
monthly shelter rent. 

(g) One hundred and ninety-five family dwelling units for families of civilian 
aircraft workers, proposed for construction by October 1, 1941, by private enter- 
prise, for which tentative rentals are approximately as follows : 195 units at 
$30-$40 monthly shelter rent. 

2 For workers who arrive before their families. 






yi. i> 
















£ Z Z 



IV. Management plans 

The recommendations for the Government housing projects contained in this 
locality-program report necessarily cannot include, in the present stage of 
these projects, plans! for management, except tentatively with respect to rental 
range and intended type of occupants. Therefore, this report contemplates 
that the agency to which management of a Government project is assigned 
will transmit to the Coordinator for clearance, at least 60 days prior to initial 
occupancy, specific proposals for the management thereof. 


Mr. Palmer. As I say in this booklet there is a typical locality- 
program report. In other words, we take what we call a defense 
town and we go right through the whole matter of need determina- 
tion and the way the need is supplied. 

Dr. Lamb. So that we can gradually build for the committee a pic- 
ture of your procedures, I want at this point to inquire further into 
the difficulty of determining locations for new housing. 
In connection with what you said about the difficulty of determining 
locations, we understand that on occasions estimates by industries 
have not been correct as to the rate of expansion. 

The committee held hearings in San Diego in the middle of June, 
and knows that the Consolidated Aircraft estimated at that time an 
addition to its pay roll of about 8,000 men by the end of this year, 
bringing the total to around 25,000. But at the rate at which they are 
now hiring they will probably not reach that figure and their failure 
to do so has resulted in reducing the pressure in San Diego ac- 

Mr. Palmer. That is very true. Just to substantiate that, Dr. Lamb, 
we have a letter we gave to the Public Buildings and Grounds Com- 
mittee in hearings this week on the expansion of the Lanham bill, 
which came in from Lieutenant Black, heading the housing group 
of citizens in San Diego, substantiating just what you said — that ade- 
quate housing had been provided in advance and that it was not over- 
programmed at all and that they were all delighted with the situation. 
The letter includes an enclosure which we would like to give for the 
record here. 

Dr. Lamb. We would like to have that for the record. 

(The letter and enclosure referred to above are as follows:) 

Exhibit D. — Letter From Lt. Max I. Black, Chairman, San Diego Defense 

Housing Committee 

Commandant's Office, 
Eleventh Naval District, 
San Diego, Calif., San Diego, Calif, July 7, 1941. 
Mr. Charles F. Palmer, 

Coordinator of Defense Housing, 

Executive Office of the President, Washington, D. C. 
My Dear Mr. Palmer: In reply to your letter of June 20, 1941, I wish to than* 
you for your efforts in helping us solve the problem of the housing of trainees 
in this area. The telegram authorizing the use of five dormitories to house 
National Youth Administration enrollees was received on Friday, June 27, and 
the entire National Youth Administration resident project was moved by June 30. 
It would appear at the present time that more dormitories for trainees may be 
needed. I am working out the details with Farm Security Administration and 
National Youth Administration officials, and if sufficient funds are allocated to 


National Youth Administration for enlarging the project, we will inform you as 
to our needs and as to the availability of the dormitories for this use. 

I wish at this time to thank you and your staff for your expression of appre- 
ciation for the job we are trying to do, and I wish also to tell you that we feel 
that you and your staff are doing an excellent job. 

In brief, the situation in this area has been greatly relieved, and we feel that 
we now have the situation well in hand. The very fact that we now know where 
we stand is a great comfort to everyone here. There is no comparison between 
the situation now and the chaotic condition of 6 months ago. We know that the 
present condition is due solely to your efforts. 

In regard to the third paragraph of your letter, please accept my apologies for 
the mistake in the dates. I only had a few hours to write that report to the Tolan 
committee, and in the rush to have some 60 copies printed I did not check it as 
carefully as I should have. 
With kindest personal regards, 
Sincerely yours, 

Max I. Black, 
Lieutenant, United States Navy (retired), 
Chairman, San Diego Defense Housing Committee. 

(Accompanying the above letter was the following newspaper story 
clipped from the San Diego Union :) 

Defense Housing Overbuilt Here, Carmody Says — Congressmen Tou> of Great 
Pressure Causing Condition * 

Washington, July 11 (A. P.). — John M. Carmody, Federal Works Admin- 
istrator, said today he was terribly disappointed in a defense-housing situation 
at San Diego. Carmody said that at that city great pressure had caused over- 
building for housing. He did not go into further detail. His remarks were made 
before the House Committee on Public Buildings and Grounds in behalf of a 
proposed additional $300,000,000 authorization for defense housing. 


Carmody testified the national-defense housing program was 96 percent on 
schedule and that projects completed or under way had cost all but $16,000,000 
of the $300,000,000 Congress appropriated for housing last October. 

Questioned by Chairman Lanham (Democrat, Texas) concerning reports of 
numerous vacancies in dwelling units already completed, Carmody said the 
instances were scattered and resulted from "undue pressure on Government 
agencies by communities seeking defense funds." Lack of cooperation and buck- 
passing among Government agencies had resulted in some inadvisable housing 
construction, he declared. 


Statements by John M. Carmody, Federal Works Administrator, in Wash- 
ington that San Diego had overbuilt defense workers' homes brought expres- 
sions of surprise from two members of the San Diego Defense Housing Com- 
mission. "I presume that Carmody's statements refer to the building of dormi- 
tories for unmarried defense workers," commented Lt. Max I. Black, commis- 
sion chairman, "for that is certainly not the case in regard to homes for 
married defense workers." 


"Even though we may at this time have more dormitory space than is needed, 
the large number of unmarried defense workers it will be necessary to bring in 
when the peak of employment is reached in various defense industries probably 
will more than fill these dormitories." 

John N. D. Griffith, member of the commission and realty board executive 
secretary, said he could see no basis for Carmody's remarks. "We do not con- 
sider San Diego to be overbuilt." he said. "The last check I had on vacancies in 
the city showed them to be about 2 percent. The housing situation as it now 
stands seems stable to us." 

1 See telegram from Mr. Carmody to Lieutenant Black, pp. 6948-6949. 


Exhibit D-l ] 

Executive Office of the President, 

Office for Emergency Management. 
Division of Defense Housing Coordination, 

Washington, D. C, July 25, W',1. 
Hon. John H. Tolan, 

House of Representatives. 
My Dear Mr. TolaJn: We have just had the opportunity to review the text 
of the hearings held in San Diego on June 12-13, 1941. The information in these 
hearings constitutes an extremely valuable study of the whole San Diego situation. 
There is one fact which I believe might appropriately be added to the record. 
Prior to the hearings, this Office was requested to consider the possibility of making 
dormitory accommodations available to National Youth Administration trainees. 
I note that this need is one which is referred to on several occasions throughout 
the testimony. 

At the request of this Office, the Farm Security Administration made available 
for National Youth Administration trainees 5 buildings of 70 units each, or a 
total of 350 units. The National Youth Administration pays $12 per month per 
person. All services are furnished by the Farm Security Administration except 
room service, which is furnished by National Youth Administration trainees in 
hotel work. One building of 70 units is for the use of Work Projects Administra- 
tion trainees. 

It is felt that these arrangements will assist in meeting what appeared to be an 
urgent need, and I am glad to offer this information for the record. 
Sincerely yours, 

C. F. Palmer, Coordinator. 


Dr. Lamb. The committee feels, with respect to San Diego, that had 
the Consolidated Aircraft maintained its hiring schedule as projected 
in June, the amount of housing might not have been adequate, but 
that, because the schedule as estimated by the Consolidated Aircraft 
was not kept, the housing has approximated needs, although there 
were certain cases which Mr. Tolan knows about, such as the one 
which was brought out by the newspapers, in which hardships were 
worked because of the size of the family. But I don't want to dwell 
on that at this point. 

Have your estimates of needs for defense housing, on which you 
based your original recommendations for funds for defense housing 
last year, turned out to be substantially correct or were they too low 
or too high? 

Mr. Palmer. They turned out to be miraculously accurate. We 
were surprised ourselves because they had to be nebulous at the time, 
but they almost hit the thing right on the nose. For example, in 
the Hampton Roads area, which was probably the worst situation, 
a total of about 7,000 houses were programmed, and they are now 
all practically complete. 

A group of citizens came in from the Hampton Roads area 3 
weeks ago and said, "The problem is now solved except for some 
more housing that will be needed for some Negroes in the Newport 
News area. We want you to stop the defense program of housing," 
which we had already done anyway because it was solved at that 
point, "unless there is further migration into the area. We consider 
the whole thing adequately handled." 

1 Reprinted from San Diego hearings. 



Dr. Lamb. With respect to these estimates and to the actual hous- 
ing built and made ready for occupancy, what part has been built 
by private enterprise? 

Mr. Palmer. We have a complete statement on that. That is in 
here categorically — about five-sixths. 

Dr. Lamb. About five-sixths of the total housing built and made 
ready for occupancy has been built to date by private enterprise? 

Mr. Palmer. That is right. The available statistics on private 
construction leave many important areas inadequately canvassed, but 
it can be very approximately estimated that during the fiscal year 
just ended private builders started work on some 515,000 homes in 
the nonfarm sections of the United States. Of these, perhaps three- 
fifths or two-thirds were in defense areas. The total represents an 
increase of about 21 percent over the volume turned out in the 
1939-40 fiscal period. 

While these homes ranged in cost all the way from less than $2,000 
to more than $25,000, the average value is believed to have been 
slightly more than $5,000. But in point of units, well over half and 
perhaps as many as three-quarters cost less than $5,000. 

Most of these houses were for sale but even so they resulted in a 
substantial addition to the rental market. In one recent test which 
Ave have made, which covered Washington, D. C, it was found that 
nearly 6 out of every 10 people building or buying houses moved into 
those homes from rented homes. Thus the building of homes for 
sale or for owner-occupancy contributes materially to the supply 
of homes available for rent. 

Under title VI of the National Housing Act the proportion of direct 
rental properties has been higher than in private building generally, 
and it now appears that at least a quarter of the units currently 
being built under that title are rental properties. 

Dr. Lamb. I would like to ask you whether your over-all figures 
refer to the volume of houses built in the defense areas as a whole, 
or the housing built specifically for defense workers? 

Mr. Palmer. It is the total volume of housing built as a whole. We 
can take specifically the public housing because that is built exclusively 
for defense workers. 

On the private industry, I should like to offer a little bit more. Dr. 
Lamb. Private industry is shown to be lagging in some areas. But 
because of the vast number of communities in which there is some de- 
fense activity, it has been neither possible nor practical to set up specific 
programs for private building in every one of these places. 

This does not mean, however, thai private builders are not being 
counted upon in every defense area. On the contrary, if private build- 
ing fails to do the lion's share of the necessa ry home construction in most 
defense centers, the task which will be left to public housing will be 
many times that presently envisaged. 

Thus far, the performance of private builders in supplying local 
needs has been too mixed to permit any generalizations. In communi- 
t ies like Boston, Canton, Jacksonville. Washington, San Francisco. Oak- 



land, and Alameda private construction appears to be providing its full 
share of the housing needs. 

On the other hand, a pick-up in the rate of private building is needed 
in Buffalo, Bridgeport, Philadelphia, Pittsburgh, and South Bend if 
the needs of the defense program are to be met. 

Now, we have an exhaustive exhibit that goes into the whole detail 
which I should like to offer for the record. 

(The exhibit referred to above is as follows:) 

Exhibit E. — Role of Private Construction in Defense Areas 

report by division of defense housing coordination. office for emergency 
management, executive office of the president, washington, d. o. 

July 18, 1941. 
Any attempt to make an accurate accounting of the amount of privately 
financed construction that is being done in the United States is handicapped 
at the outset by the fact that available satistical reports fail to cover many 
of the areas where building has been most active in recent years. Using 
the best material which is currently available, however, it can be estimated 
that in the fiscal year ended June 30, 1941, work was started on about 515,000 
privately financed homes. This compares with some 425,000 homes started in 
the previous 12 months, as may be seen in table I. 

Table I. — Nonfarm homes provided — Privately financed homes 


First quarter 

Second quarter.. 

Third quarter 

Fourth quarter. . 

Fiscal year 

106, 000 
98, 000 
89, 000 

132, 000 

133, 000 


107, 000 

i 163,000 


425, 000 

515, 000 

i +21 

i Preliminary. 

Of the total units started during the last fiscal year, it is believed that nearly 
two-thirds were in or around communities in which there was defense activity 
of some sort. 


Estimates on the average value of privately constructed homes are subject to 
the same qualifications which hold for the figures on volume. Based upon 
Federal Housing Administration experience, it is believed that private homes built 
in 1940 had an average value, including the cost of both the house and the land, 
slightly in excess of $5,000. It must be borne in mind, however, that houses were 
built last year ranging in price all the way from less than $2,000 to more than 
$25,000. There is good reason to believe that in terms of units, between two- 
thirds and three-quarters of all the houses built in 1940 cost less than $5,000. 
Figures for five specific communities in which a joint Bureau of Labor Statistics- 
Work Projects Administration survey has been made of construction activity 
clearly show, however, the wide variations in cost distributions in different areas. 



Table II. — Distribution of new construction, by cost classes, July 1, 1940, to date 


Norfolk, Va., 
as of Feb. 28 


N. H., as of 

Mar. 31 


Conn., as of 

Jan. 31 


N. J., as of 

Mar. 31 


Mass., as of 

Apr. 30 

Permit value 


cent of 


cent of 


cent of 


cent of 


cent of 

Cost classes: 

$5,000 and up 




























$4,000 to $4,999 


$3,000 to $3,999 


$2,000 to $2.999 


$1,000 to $1,999 


Under $1,000... . . 












Thus, it will be seen that based upon building permit values, houses costing 
less than $5,000 ranged all the way from 92 percent of the total in the Norfolk, 
Va., area to only 51 percent in the Hartford, Conn., region. 


In most of the defense areas in which the housing situation is critical, the 
most urgent need is for rental properties. On this score, Assistant Administra- 
tor Draper of the Federal Housing Administration reports : 

"On the basis of reports received from the State and District Insuring Office 
of the Administrator, however, it may safely be said that of the total volume 
of title VI projects for the country as a whole at least 25 percent of the dwelling 
units will be rental units." 

The percentage of rental properties varies widely among individual places. In 
areas where the demand for rental housing is very acute, the proportion of rental 
units tends to run well above the national average. Thus in the District of 
Columbia, the Federal Housing Administration estimates that at least 75 per- 
cent of the title VI projects will be for rent, and in Columbus, Ohio, the ratio 
is running close to 50 percent. 

Building new properties specifically for rent is not, however, the only means 
of adding to the supply of available houses for rent. A study conducted by 
the Work Projects Administration in the District of Columbia disclosed that in 
the 15 months ended March 31, 1941, nearly 6 out of every 10 people who bought 
new homes moved from rented units. Hence, the construction during that period 
of 2,675 houses for sale or owner occupancy is estimated to have made available 
about 1,550 rental units in the District. 


In view of the vast number of communities throughout the country in which 
there is some defense activity, it has been neither possible nor practical to 
attempt to set programs for private housing in all of them. Rather, it has 
seemed best to program each locality separately and frequently to program for 
private only an amount sufficient to complement the public program and pro- 
vide the housing needed for the defense workers in the area. The programs are 
in reality only guide posts along the road rather than the ultimate goal itself. 
The fact, therefore, that in the appended tabulation, which presents the pro- 
gram for private construction as set forth in the locality progress table of the 
Division of Defense Housing Coordination, there is no program for Los Angeles 
does not mean that no private building is expected in that area. On the con 
trary, it merely means that thus far the formality of setting forth a private 
program for this area has not hern carried out. Similarly the programming of 
only 80 private houses for New Orleans does not mean that that is the goal set 
for private builders in that city in 1941. It merely represents the number of 
private homes needed to round out a public project at the Army air base. In 
fact, in both Los Angeles and New Orleans, as well as in a host of other com- 



munities whose Dames fail to appear in the program for private building, private 
construction is being counted upon to do the lion's share of the building necessary 
to meet the housing needs. Without the cooperation of private builders, it 
would be necessary to have a public program many times the size of that now 

On the basis of such information as is available for specific areas during the 
first 4 months of 1941, however, there has been a wide disparity in the perform- 
ance of private builders around the country. In communities such as Boston. 
Canton, Jacksonville, Washington, San Francisco, Oakland, and Alameda, private 
building has been keeping up to the goals set in the locality program. On the 
other hand, a pick-up in the rate of private building is needed if private enter- 
prise is to fulfill its requirement in Buffalo, Bridgeport, Philadelphia, Pittsburgh, 
and South Bend. 

Program for Private Construction 

(Includes recommendations in approved locality program reports as well as 
recommendations from the second program list. Second program list recom- 
mendations have date October 21, 1940.) 

Programs for private construction 

State and locality 

Gadsden . 

Muscle Shoals 


Alameda-Oakland . 







New Britain 

New London 

District of Columbia: 




Key West. 



Georgia: Macon. 


Rock Island 



Fort Wayne 

Kingsbury-La Porte. 


South Bend... 
Iowa: Burlington. 


Kansas City 



New Orleans 

Maine: Bath 

Maryland: Baltimore. . 
Massachusetts: Boston. 


Army ordnance plant (Civ. 

rrivate industry (Civ. I). . _ 

Naval air station (Civ. G) _ 
Private industry (Civ. I)... 
Navy yard (Civ. G) 

Private industry (Civ. I) 




Naval submarine base (Civ. 

Navy vard and air station 

(Civ. G). 
Government agencies (Civ. 

Army War College (Civ. G). 

Naval air station (Civ. G) . . . 

Naval station (Civ. G) 

Naval air station (Civ. G) . _ 

Arrnv air base, McDill Field 

i Civ. G). 
Private industry (Civ. I).... 

Army ordnance plant (Civ. 

Private industry (Civ. I)._. 
Arrny air base (Comm. Off.). 
Armv ordnance plant (Civ. 

Armv proving ground (Civ. 

Private industry (Civ. I).. . 
Army ordnance plant (Civ. 


Private industry (Civ. I) 

Armv post, Camp Polk 

(Comm. Off.: Civ. G). 
Army air base (Comm. off.) 
Private industries (Civ. I) . . 


Date locality 
program re- 
port approved 

May 2, 1941 

Jan. 30,1941 

Feb. 28.1941 
June 23, 1941 
Apr. 16.1941 

June 13,1941 

June 23,1941 

Apr. 17, 1941 

May 2, 1941 

Apr. 16, 1941 

Mar. 15, 1941 

June 23, 1941 

Mar. 15, 1941 

Feb. 26,1941 
Apr. 16, 1941 
Feb. 26, 1941 
Nov. 19, 1940 
Feb. 26,1941 

Apr. 16, 1941 

Feb. 26,1941 

Oct. 21,1940 

June 23,1941 


Apr. 16,1941 

June 23. 1941 

Oct. 21,1940 
Apr. 16,1941 

May 26, 1941 
June 23,1941 

May 26, 1941 

June 23,1941 
May 26, 1941 
June 23,1941 
Nov. 19. 1940 

ber of 



















Rent scale 

$30 to $35. 

$30 to $65. 

$30 to $50. 

$35 to $60. 
$35 to $50. 
$30 to $45. 

$25 to $50. 

$30 to $45. 

$35 to $65. 

$25 to $50. 

$20 to $50. 

$25 to $50. 

$20 to $50. 


$21 to $45. 

$50 to $60. 
$30 to $50. 

$35 to $50. 
$35 to $75. 
$35 to $60. 

$35 to $50. 

$35 to $60. 

$30 to $50. 
$30 to $40. 

$40 to $120. 

$35 to $75. 
$30 to $50. 
$35 to $50. 

1,000 | $30 to $45. 


Programs for private construction — Continued 

State and locality 


1 Detroit 



Meridian ... 

Missouri: Rolla- Waynes ville. . 

New Hampshire: Portsmouth- 
New Jersey: 


Northern New Jersey 

New York: 



North Carolina: 

C harlotte 







Ravenna- Warren 


Allent own-Bethlehem. 

Bucks Countv 



Ell wood City 



Delaware County 

South Carolina: 





Nashville ... 


Corpus Christ i 
Dallas-Fort Worth 


San Antonio 


Wichita Falls. 
Do .. 
Utah: Ogden 



Norfolk . 



West Virginia: 



South Charleston . 
Wisconsin: Manitowoc 


Private industries (Civ. I).. 

Air Corps school (Comm. 

Army air base (Comm. Off.). 
Army post, Fort Wood (Civ. 

Navy yard (Civ. G) 

Army arsenal (Civ. G)._. 
Private industry (Civ. I). 



Army air base (Comm. Off.). 
Army post, Fort Bragg 

(Civ. G). 
Army post, Camp Davis 

(Civ. G). 

Naval ordnance plant (Civ. 

Private industry (Civ. I) 


Army ordnance plant (Civ. 

Private industry (Civ. I) 




Date locality 
program re- 
port approved 




Navy yard (Civ. G)__ 

Army post, Fort Jackson 
(Civ. G). 

Army ordnance plant (Civ. 

Private industry (Civ. I) 

Naval air station (Civ. G) . . . 

Private industry (Civ. I) 

Navy shipyards (Civ. G) . . . 

Army post. Fort Houston 
(Civ. G). 

Army flying school (Comm. 

Armv training school 
(Comm. Off.). 

Armv training school (Civ. 

Armv industrial establish- 
ment (Civ. O). 

Naval torpedo station (Civ. 

Army post. Fort Belvoir 

(Civ. G). 
Naval operating base (Civ. 

- do 

Navy yard (Civ. G) _ 

Private industry (Civ. I) . . 

Army ordnance plant (Civ. 

Private industry (Civ. T) . . 

May 26, 1941 
Feb. 26,1941 

June 23, 1941 

Apr. 16,1941 

Dec. 21,1940 

May 26, 1941 
June 23, 1941 

Apr. 16,1941 
Feb. 26,1941 

June 23.1941 
Feb. 26,1941 

May 2, 1941 

Apr. 16, 1941 

June 23. 1941 
May 26. 1941 
June 13,1941 

May 26, 1941 



May 2, 1941 
Jan. 30,1941 
May 26, 1941 
May 2, 1941 
May 26,1941 

Dec. 21,1940 

Apr. 16.1941 

May 2, 1941 

Dec. 21,1940 
May 2. 1941 
Feb. 26,1941 
Jan. 10,1941 

June 23,1941 



Jan. 30, 1941 

Mar. 15.1941 


Jan. 10,1941 
.. do 

Mar. 13.1941 
June 23. 1941 

Jan. 30,1941 

June 23. 1941 
Oct. 21.1940 
Jan. 30, 1941 

ber of 

10, 000 





4, 000 










10, 000 
















Rent scale 

$30 to $60, 
$35 to $60 

$35 to $75 


$30 to $60 

$35 to $50 


$35 to $45 

$35 to $50 
$30 to $35 

$35 to $75, 
$21 to $45 

$20 to $50 

$35 to $60, 


$30 to $60. 

$35 to $45. 

$30 to $35. 
$30 to $40. 
$35 to $45. 

$25 to $45. 


$21 to $45. 

$40 to 65. 

$20 to $30. 

$30 to $50. 
$25 to $75. 
$30 to $50. 
$21 to $45. 

$35 to $75. 


$30 to $50. 
$25 to $50. 

$30 to $45. 
$36 to $45. 
$20 to $50. 
$30 to $50. 


$30 to .$45. 

$35 to $50. 

$30 up. 



Dr. Lamb. In these cities is included Pittsburgh, which you men- 
tioned previously, and for which you said 5,000 public housing units 
and 10,000 private units were programmed. Can you give the com- 
mittee a figure at this point on the number of private houses which 
have been built in Pittsburgh in this interval of time? 

Mr. Palmer. The complete program, I think, came out about 2 
months before, but that can be given to you for the record. I don't 
have it now. 

Dr. Lamb. You mentioned a lag, and I wanted to establish here 
what caused that lag in this particular case. 

Mr. Palmer. We will be very glad to provide that for you. 

Dr. Lamb. It will be made a part of the record when received. 1 

Mr. Palmer. Those situations, of course, Dr. Lamb, are watched care- 
fully from day to day, and if there is a bog-down on the part of pri- 
vate production we have to go in with the public houses and anticipate 
it so we will be there quickly enough. 

As Mr. Forest said : "Get there fustest with the mostest men," or 
something like that. 

Dr. Lamb. So, to sum up your answer to a previous question, it 
isn't possible to say what the relationship is between the number of 
private houses built and the needs of defense workers, except on a very 
general basis — that the defense worker who wants a rental is able to 
get it through the moving out of people into new private housing 
for sale? 

Mr. Palmer. Not necessarily. A great many units are being pro- 
duced for rent. The generalization would be an inaccuracy for each 
community. Each defense area is almost a sphere of its own, so we go 
right into those in detail. 

Now. with title VI the production. 

Dr. Lamb. If you don't mind, I would like to ask you about title VI 
in a moment. The committee is concerned with two groups of defense 
migrants, as you know — the families of the armed forces in and around 
camps, and workers in defense plants, and I take it your office is simi- 
larly concerned. 

Mr. Palmer. Yes. 

Dr. Lamb. Let us take the families of the armed forces in and around 
camps first. How many of these families have actually been rehoused 
in houses built by private enterprise? 

Mr. Palmer. I don't know if anybody has any real idea. 

Dr. Lamb. And there would be no way of getting that figure ? 

Mr. Palmer. Oh, I presume it could be secured but it would be a 
very difficult one. 

Dr. Lamb. What proportion of your estimates for new defense hous- 
ing needed is related to these groups? 

Mr. Palmer. We have broken that down on the basis of families 
of enlisted persons. We can put that in the record. 

Dr. Lamb. Will you at this point, Mr. Reporter, save an exhibit 
number for this exhibit when it comes in ? 

(The material referred to above is as follows:) 

1 The Committee was subsequently informed by Mr. Palmer's office that building permits 
for 4.252 residential structures were issued in the Pittsburgh area during; the period Julv 

1, 1040-June 30, 1941 


Exhibit F. — Defense Housing Financed by Public Funds 

(Source: Executive Office of the President. Office for Emergency Management, Division of Defense 

Housing Coordination] 

Number Oi States and territories 

Number of localities 

Number of projects 5 

Number of family dwelling units (regular) . 

Civlian industrial workers in private 
defense industry 

Civilian industrial workers in Govern- 
ment plants 6 . 

other civilians, employed by the 
Army and Navy : 

Married enlisted personnel 

Number of family dwelling units (trailers) . 

Civilian industrial workers in private 
defense industry 

Civlian industrial workers in Govern- 
ment plants . 

Number of units for single persons 

Allocated l 

July 12 




107, 383 

July 5 




107, 383 

17,455 47,455 

19, 201 ' 19, 201 


30, 085 

10, 642 

3, 594 

S. Mil 



Under construction 
contract 3 

July 12 





24, 440 

13. 701 

8. 559 

3, 23 1 

3, 234 





70. 146 

24, I to 

8. 509 



Completed « 

July 12 




20, 865 




July 5 


18, 947 






1 This summary includes only that portion of the defense housing program which is being financed by 
public funds. Defense housing financed by private capital, which makes up a substantial part of the total 
program, is not carried in this report. 

J Includes all allocations of public funds authorized by Public, Nos. fi71 and 7S1, 76th Cong.; findings under 
Public, No. 849, 7(ith Cong.; findings under Public. No. 9, 77th Cong.; and projects approved by the Board 
of Directors of the Defense Homes Corporation. Includes projects for which construction contracts have 
been signed. 

3 Includes all projects financed by public funds for which construction contracts have been signed. 

< Includes all projects, whether wholly or partially complete, in which family dwelling units are completed 
and available for occupancy. 

5 Includes 7 projects for trailers to be used for family dwelling units. These projects are located in localities 
which already have regular housing projects. 

6 Arsenals, navy yards, and Government-operated powder plants, ordnance works and ordnance depots. 
' The division between civilian and enlisted personnel of the Army and Navy is as yet undetermined in 

a number of projects; in such cases the ratio of civilian to enlisted personnel in other joint projects in which 
a specific break -down is available has been used to determine a definite number for each category for use in 
the tabulation. 

60396— 41— pt. 17- 




Table II. — Allocations, construction contracts, and completions (as of July 

12, 191,1') 

Family dwelling units 

Units for single persons 

Legal authorization and construction 


tion con- 



tion con- 


1. Projects authorized by Public, No. 671, 
76th Cong., for construction by- 
Local housing authorities with 
United States Housing Author- 
ity 2 --- 













2. Projects authorized by Public, Nos. 
781 and 849, 76th Cong.: 

(a) Under Public, 781 for construc- 
tion by- 

15, 352 



Total -- - 

16, 177 



(b) Under Public, No. 849, 76th 
Cons., by transfer of funds 
from Public, No. 781 for con- 
struction by Public Build- 

13, 055 

12, 200 


(c) Under Public, No. 849, 76th 
Cone., for construction by — 
Office of Federal Works Ad- 

19, 456 

23, 515 




13, 775 


15, 764 





1, 159 


Public Buildings Adminis- 




Local housing authorities 
with United States Hous- 

Local housing authorities — 




Farm Security Administra- 

Tennessee Valley Author- 


Division of Defense Hous- 



67, 266 


107, 383 


32, 191 




20, 865 





3. Projects of Defense Homes Corporation 

Total, regular family dwelling units 

4. Projects authorized by Public, No. 9, 

77th Cong., for construction by Farm 





i Includes all allocations of public funds authorized by Public, Nos. 671 and 781 , 76th Cong.; findings under 
Public. No. 849. 76th Cong.: findings under Public, No. 9, 77th Cong., and projects approved by the Board 
of Directors of the Defense Homes Corporation. 

2 In addition to the projects included in this table, which are being constructed specifically for defense 
housing purposes, four projects constructed by local housing authorities as low-rent projects under the 
regular United States Housing Authority program have been converted in part to defense use. In this 
way, 433 dwelling units have been reserved for occupancy by families of enlisted men or other defense 

3 Includes 1,573 completed units purchased by the United States Housing Authority under Public, No. 
849 from United States Housing Authority slum-clearance project. 

* Trailers for family dwelling units and dormitories for single persons. 



Table III. — Purpose (as of July 12, 19^1) 


Legal authorization 

1. Projects authorized by Public, No. 671, 76th Cong. 

2. Projects authorized bv Public, Nos. 781 and 849, 

76th Cons.: 

(a) Under Public, 781 

(6) Under Public, 849 by transfer of funds 

from Public, 781 

(e) Under Public, 849 

3. Projects of Defense Homes Corporation 

Total, regular family dwelling units 3 

4. Projects authorized by Public, No. 9, 77th Cong. 


Number of family dwelling units for 


16, 177 

13, 055 

67, 266 


107, 383 

Civilian industrial 


In Gov- 
plants i 

1,500 I 3,096 

ees of 
Navy * 


42, 025 
1, 530 

47, 455 

1,880 4,582 

250 i 1,917 
13,095 3,055 


19, 201 

* 10, 642 












* 30, OSS 

1. Projects authorized by Public, No. 671, 76th Cong. 

2. Projects authorized by Public, Nos. 781 and 849, 

76th Cone.: 

(a) Under Public, 781 

(6) Under Public, 849 by transfer of funds 

from Public, 781 

(c) Under Public, 849 

3. Projects of Defense Homes Corporation 

Total, regular family dwelling units 

4. Projects authorized by Public, No. 9, 77th Cong. 



16, 035 


32, 191 





24. 440 




13. 701 







10, 330 



1. Projects authorized by Public, No. 671, 76th Cong.. 

2. Projects authorized bv Public, Nos. 781 and 849, 

76th Cong.: 
(a) Under Public, 781 . . 










4 677 

(6) Under Public, 849 by transfer of funds 
from Public, 781 


(c) Under Public, 849 



3. Projects of Defense Homes Corporation _. . 


Total, regular family dwelling units 

20, 865 





4. Projects authorized by Public, No. 9, 77th Cong, 

1 Arsenals, navy yards, and Government-operated powder plants and ordnance works. 

2 Civilian employees of the Army and the Navy other than those in Government-operated industrial 

3 In addition to family dwelling units allocations have been made for 8,891 units to house single persons. 
The break-down by purpose is as follows: 4,372 units, single civilian industrial workers in private industry; 
3,624 units, single civilian employees in Government plants; 895 units, single civilians of the Army and the 
Navy other than those in Government-operated industrial plants. 

4 The division between civilian and enlisted personnel of the Army and Navy is as yet undetermined in a 
number of projects; in such cases the ratio of civilian to enlisted personnel in other joint projects in which 
a specific break-down is available has been used to determine a definite number for each category for use 
in the tabulation. 



Dr. Lamb. What would you say was the average or normal income 
of the bulk of these families — that is, noncommissioned officers and 
enlisted men ? What can they afford to pay for rent ? 

Mr. Palmer. They can afford to pay from $11 to $26 per month for 
rent and the houses are produced for them on that basis and are rented 
to them on that basis. 

Dr. Lamb. Public housing, you mean ? 

Mr-. Palmer. Yes ; public housing. 

Dr. Lamb. What new housing is provided by private enterprise for 
an amount these people could afford to pay? 

Mr. Palmer. For the families of noncommissioned officers and en- 
listed personnel? 

Dr. Lamb. Yes. 

Mr. Palmer. Private enterprise cannot supply them. They cannot 
get a return on their capital invested in amounts necessary to give them 
sanitary housing. 

wages in defense plants 

Dr. Lamb. Now, turning to the workers in defense plants : An esti- 
mate of the incomes of defense workers presented to this committee in- 
dicated that 80 percent of these workers have incomes of under 
$30 per week at the present time. Would 3 r ou say that is substantially 
correct ? 

Mr. Palmer. Since the wage agreements, as far as we know, were 
renegotiated in some of these areas and since there has been some 
overtime work, it is felt that the incomes will run about $30 or $35. 
The average was for a time well under $30. It went to about $-24 per 
week. We feel that the income is a little higher now than it was a few 
months ago. 

Dr. Lamb. In that connection the committee heard a good \\q;\\ of 
testimony from defense workers and from employers which indi- 
cated that the average worker was receiving something in that neigh- 
borhood, provided that he was not working much overtime. We also 
heard a good deal of testimony to the effect that in many of these 
defense centers a transfer to a three-shift basis was contemplated, in 
which case overtime would disappear and, consequently, the average 
weekly wage would recede to this earlier level. In that event, would 
you agree that these figures are probably the proper base for the longer 

Mr. Palmer. We would agree substantially with those figures and, 
of course, we were amazed to find that as many as 80 percent — and 
that is what our figures show — are in that very low income bracket in 
the defense industries. 

Dr. Lamb. What do you regard as the proper housing expenditure 
ior workers in this group? 

Mr. Palmer. About 20 percent of their gross income. 

Dr. Lamb. So that if they were getting approximately $125 a 
month you would say $25 a month was the proper rental? 

Mr. Palmer. For their shelter rent, yes. We do feel that the num- 
ber of children in a family and a good many other things like that 
affect it basically; but for the generalized statement, yes. 



Dr. Lamb. What housing is being provided by private enterprise 
for this group? 

Mr. Palmer. Private enterprise cannot produce housing which is 
adequate for families at $25 per month and less. 

Dr. Lamb. To what extent is public housing being provided these 
income levels? 

Mr. Palmer. The figures that we have for you show we have allo- 
cated 107,000 houses now for them. 

Dr. Lamb. For public housing? 

Mr. Palmer. For public housing — public defense housing. 

Dr. Lamb. What about the estimates or allotments for private 
housing by comparison with that — what would that figure be? 

Mr. Palmer. The gross allocation for private housing to lay right 
down beside the public housing just actually cannot be taken off that 
way because we can tie down to defense workers your public housing 
in their income groups. 

Dr. Lamb. I understand that from your previous testimony. But 
are you taking the difference, say, between the civilian employees and 
the enlisted personnel? 

Mr. Palmer. I have left the enlisted personnel entirely for the 
question of civilian defense workers. Well, the ratio there is about 
75,000 — in round numbers, 75,000 for the civilian workers of the 
public housing and about 25,000 for the families of enlisted personnel. 
Now, we can put in the record the actual break-down of these which 
shows as of July 12 the 107,383 dwelling units allocated and then the 
amount under construction and so forth, and so on. 

Dr. Lamb. You said a moment ago that private enterprise could not 
provide housing for this group at a shelter rent of $25 a month ( 

Mr. Palmer. That is right. 


Dr. Lamb. I am trying, you see, to get at the number of private 
houses which might rent anywhere near the $25 figure in order to get 
at the approximate number vacated by people moving into the new 
housing that is made available to that same income bracket. 

Mr. Palmer. Dr. Lamb, private enterprise can in this very low 
income group sometimes produce housing that will be sanitary and 
adequate by rehabilitation. We are going into the rehabilitation 
angle now in some detail with the thought that there are probably 
about 15,000 dwellings in defense areas that could be brought into 
use as multiple dwellings — old houses that will be reconditioned. 

We are not ready to announce the approach to the question yet, but 
we have programmed in public housing the needs of practically all of 
those people who have come within that low-income group, feeling 
that private enterprise cannot serve us. 

I think that probably answers the question. 

Dr. Lamb. Well, perhaps I should state it another way. then : What 
proportion of the total number of defense workers do you think this 
low-income group would be? I have an impression from what you 
said earlier that that group was preponderant — if the average wage 
is $120 or $125 a month. 



Mr. Palmer. "Well, of course, you then have the question of indi- 
vidual workers and families which come into it. 

Dr. Lamb. We were discussing only the family housing. 

Mr. Palmer. Well, the answer to that is that practically all of that 
has to be done by public funds. 

program under title vi 1 

Dr. Lamb. Now, going to title VI, you said a few moments ago that 
under title VI of the Federal Housing Act homes were being produced 
for defense workers. Will you introduce the chart at this point? 

(The chart referred to above is as follows:) 




E . 

A ri ! 

' \; S 

• V 

• 1 1 
1 1 



J « 

• 1 1 
■ 1 ' 

• • ; 

■ • 


J ,- TOTAL (Titles EandSL 341 
• i 
', J 

f , 
5 , 

1 1 
/ I 
j I 

• ■ > 

.' A AS* 
.....i • : : : i 

. I\/ i ?" 


'• .- Title TI-I94I 

\A v JV \ / V A 

"-Title TI-1940 ] A 

5 . 


2 , 

i . 


FEB 1 


1 APR 1 MAY 

JUNE ' JULY ' AUG ' ^F=T ' J.;- ' "f,OV 

1 OEC 

Mr. Palmer. Yes. The lower line is solid black and shows the 
production by F. H. A. in its normal program in 1940, under what is 
called title II. That is mostly small homes. 

'The toxt of title VI appears in this volume as Exhibit .T, p. 6960. 


The dotted line right above it is the performance, the normal per- 
formance of F. H. A. in 1941 in the same field. 

The line which is superimposed above that shows title VI. Title VI 
comes in with a very substantial production of homes on top of the 
normal business, which is proceeding as it had in the year past almost 
exactly, in its peaks and curves. 

I should like to interpret that more specifically. 

Dr. Lamb. May I interrupt to ask whether you have tabulations as 
well as the chart I 

Mr. Palmer. Yes. Would vou like to have me elaborate on the 
effect of title XV. 

I am furnishing a graph which tells more than many words. You 
will not that this chart shows that construction under title VI is clearly 
in addition to the total volume of other construction under the F. H. A. 
plan. Prior to title VI, activity under title II during the early months 
of 1941 was running substantially ahead of last year. 

After title VI began to function, business under title II maintained 
just about the same margin over last year as it had done before, 
and the large volume of operations under title VI was added to the 
great activity under title II, producing in 14 weeks of operation 
applications for mortgage insurance on over 22,000 people, which 
will accommodate slightly more than that number of families, since 
some of them are multiple dwellings. Actual construction during 
this 14 weeks' period was started on over 5,400 homes and the rate 
is rapidly climbing. Last week 992 were placed under construc- 

There is one other aspect of the operation under title VI which 
I should like to bring out, namely, that the major part of this 
business has been concentrated in a relatively small number of de- 
fense areas in which title VI operates. 

Dr. Lamb. How many areas? 

Mr. Palmer. Well, over 100. 

Dr. Lamb. Do you find any slackening in the rate of applications ? 

Mr. Palmer. There has been a little slow-up; the applications have 
not been slackening but they have not expanded quite as rapidly as 
the first acceleration would indicate because the $100,000,000 is prac- 
tically gone and they don't know whether they are going to get any 

Dr. Lamb. The increase is continuing but not at the same rate? 

Mr. Palmer. That is right. 


Dr. Lamb. Mr. Cleveland R. Bealmear, chairman of the Housing 
Authority of Baltimore, who appeared before the committee recently, 
was asked to comment on your statement to the committee which was 
submitted for the Baltimore hearing/ and I want to quote from the 
exchange which occurred and to ask you whether you wish to comment 
on it. 

In questioning Mr. Bealmear, I said: 

"He — that is you — was calling for 9,000 units in this restricted price 
class during 1941 and 1942. 1 think tiiis presupposes building from 
the 1st of July 1941 to the 1st of July 1942, and I am concerned with 

1 The statement submitted by Mr. Palmer's office tor tlie committee's Baltimore hearing 
appears in Baltimore hearing as Exhibit 19, p. 6253. 


how much of that stated need is likely to be provided for under the 
Mr. Bealmear stated : 

I don't think there is any chance that private industry is going to be able 
to build 9,000 houses in the next calendar year in the price range that you 
mention. My experience with the builders is that they are beginning now to 
stop, look, and listen on account of the cost of construction. In other words, 
a lot of these houses that have been sold in that price range have been sold 
at a small profit and it wouldn't take very much increase in labor and material 
costs, plus the delay in getting that material, to carry the cost of those houses 
beyond what they are selling such houses at today. 

Do you want to comment on that statement ? 

Mr. Palmer. I should think that his statement is probably true. 


Dr. Lamb. And then in the testimony of John E. Sloane, the 
vice chairman of the New Jersey State Planning Board and State 
chairman of the National Committee on Housing Emergency. Inc., 
of Newark, N. J., at the committee hearing in Trenton, the following 
exchange occurred. The chairman said : 

"Can you tell me how many units of low-rent houses have been 
built by private builders in New Jersey in the past year? 5 ' 

Mr. Sloan said: "I don't think any low-rental housing lias been 
built other than those by the Government." 

That agrees with your earlier testimony with respect to the in- 
ability of private builders to build in this class of $25 rents? 

Mr. Palmer. That, I think, is a very sweeping statement. That 
would have to be examined very carefully. 

Dr. Lamb. Mr. Sloane's statement? 

Mr. Palmer. Yes. 

Dr. Lamb. But you would say that the title VI building was not 
in this rent class? 

Mr. Palmer. Not $25 and under ; no. 

Dr. Lamb. What is the range of rental on a title VI house ? 

Mr. Palmer. The actual rents will probably range around $37. 
Some can get down as low as $30 and some as high as $40. 

Dr. Lamb. But $37 would be a fair average ? 

Mr. Palmer. $37 would be a fair average; yes. 

Dr. Lamb. Which would be in excess of the figure that the group 
roughly classed as "defense workers" could pay ? 

Mr. Palmer. Well, if you take an average for the group, yes; but 
many in that group are not limited to the average figure and could 
be supplied with housing under title VI. 

home ownership not an alternative 

Dr. Lamb. Assuming that title VI is serving part of this group 
within the income level of defense workers, is it your opinion that the 
encouragement of home ownership, particularly without down pay- 
ments, is a sound treatment for defense workers whose jobs are 
migratory and incomes temporary ? 

Mr. Palmer. I think your question answers itself, Dr. Lamb. The 
answer is definitely "no." I think that labor should not be encour- 


aged to purchase homes if labor knows at the time that it is there only 
for a transitory period. 

Dr. Lamb. Then wouldn't yon say that the majority of the work- 
ers in a defense industry are in that class — not necessarily migrants 
from other communities but workers whose source of income cannot 
be described as steady or permanent, or secure from a long-range 
viewpoint ( 

Mr. Palmer. Well, probably no more so than is true of that group 
throughout their lives and if that group can be encouraged to save 
by equities at $5 or $10 per month out of their increased income that 
they will have during the defense effort, it would seem to me to 
be constructive. 


Dr. Lamb. Is there any guaranty that the equity which they have 
there will be maintained if the prices at which this construction is 
taking place are above the normal peacetime rate? Would their 
equities be absorbed in the shrinking that might take place later? 

Mr. Palmer. No more guaranty to that buyer than any other 
individual entrepreneur or capitalist; no more than there is to the. 
man who puts down his whole 20 or 30 percent or who bought a 
house last year. 

However, if anyone can devise a scheme of equity insurance, we 
would like very much to find it out because we have been trying 
for over a year ourselves to find out some w 7 ay to insure equities, 
especially of these people who might be encouraged to save while 
they have bigger incomes than they normally had before. 

Dr. Lamb. Wouldn't the equity of a builder who invests in prop- 
erty for rent be better safeguarded than that of these individuals 
whose income is unstable? 

In other words, is not the landlord in a position to spread his 
rents over a period of years and consequently equalize them — the 
relatively high rents of this period against the lower rents of a later 
period % 

Mr. Palmer. That is actually being done. That is what title VI is 
doing. You see, title VI is really permitting the individual operator 
to build and rent these houses on a basis that was not possible 
before, under 207 of the National Housing Act. 

Dr. Lamb. What I am getting at is whether the adjustment under 
title VI is sufficient. Apparently it is not sufficient to induce builders 
to go into the lower brackets. 

"no money in housing poor people well" 

Mr. Palmer. Well, to go way into the lower brackets is impossible 
on a capitalistic basis because after maintenance and amortization 
and taxes there isn't enough left to pay a return on the capital itself. 
That is the justification for the low rent public housing that is done. 
Basically probably the whole thing can best be stated this way : 
Maj. Harry Barns, of London, probably one of the greatest housing 
authorities that we ever knew — he died a short time ago — made a 
statement : 

"There is no money in housing the poorest people well; there is 
always money in housing them ill." 


That basically is the whole thing. There is no money in housing 
the poorest people well and yet they must be well housed in order to 
protect their fellow citizens from the spread of disease and vice that 
are threatened in bad housing; but there has always been money in 
housing them ill. 

Dr. Lamb. We are discussing the solid bulk of the defense em- 
ployees rather than the poorest people in this particular discussion. 
A wage of $120 or $125 a month, if it is average for defense workers, 
is certainly above the national average of income in ordinary times. 
That is to say, $125 times 12 is $1,500 a year which in ordinary peace- 
times is certainly well above the national average. 

Mr. Palmer. Of course, you are talking about one of the greatest 
problems that our country confronts and has confronted for many 
years, namely, the housing for those workers whose incomes are 
between $1,200 per annum and $2,000 per annum. 

You remember the old poem by Kipling : u He wasn't good enough to 
go to Heaven and wasn't bad enough to go to hell." 

He couldn't get either place. Now, you have the workers who 
get $1,200 a year and less. They must be put in subsidized hous- 
ing to protect the community. Those who get $2,000 a year and 
more and can pay a good return on capital regardless of the num- 
ber of children. And then you have a great middle class there com- 
prising hundreds of thousands of our citizens with incomes between 
the $1,200 per year and $2,000 per year, which is sort of twilight 

Dr. Lamb. But that group forms the backbone of the defense 

Mr. Palmer. That is right; and we are caring for them where 
they cannot be provided for by private capital. Uncle Sam does that 
and we swing into it fast. 


Dr. Lamb. That is what I am getting at. 

Now, is the speed record being made on defense housing projects 
satisfactory ? 

Mr. Palmer. No. 

Dr. Lamb. That is as far as production is concerned once the 
money is made available? 

Mr. Palmer. No; it is not. 

Dr. Lamb. Would you compare the speed of building public proj- 
ects with that in private projects, taking into consideration not only 
the construction period but the time taken to raise the money and 
develop the financing? 

Mr. Palmer. Indications of title VI probably show that private 
housing is proceeding much more rapidly than public housing in 
many instances as far as the actual construction goes after the money 
is available. 

Dr. Lamb. Do you regard it as a part of your responsibility, in 
making recommendations with regard to defense housing, to appraise 
the speed of operations of the various agencies engaged in this hous- 

Mr. Palmer. To quote specifically, the President has stated that 
Ave have the responsibility for assuring that the delays and shortages 


iii providing adequate defense-housing facilities are quickly 

Dr. Lamb. On the basis of your records, have you any observations 
as to which agencies are meeting their schedules most satisfactorily? 

Mr. Palmer. Well, that is a matter that naturally we go into in 
a great many details. 


Dr. Lamb. Would you indicate for the committee in outline the 
arrangements made for regional and State coordination of Federal 
liousing agencies? 

Mr. Palmer. Yes, sir. With reference to your request for a sum- 
mary of the arrangements made for regional and State coordination 
of Federal housing agencies, it is important to note that we have 
tried, in our work of coordination, to disturb as little as possible the 
normal program of some 13 housing agencies and to assist all of them 
in making effective their maximum capabilities in meeting the need. 

In doing this we have considered that coordination at the Federal 
level was adequate since we operate with each agency through its own 
field organization. In this connection we have used the facilities of 
the State and local defense councils, a part of which in each locality 
is a housing committee composed of local citizens. When appropri- 
ate we have urged the use of the splendid facilities of State housing 
boards and commissions and local housing authorities. The local 
liousing committee conducts the home registration offices, stimulated 
by the Division of Defense Housing, and now also with the Federal 
agencies that are not directly in defense housing, you might say, such 
as the Office of Coordination of Health and Welfare and that of 
Price Administration and Civilian Supply and Civilian Defense. 
Various procedures have been carefully worked out with them to clar* 
ify the operation in the field for all of us. 

"competition among various agencies'' 

Dr. Lamb. At the committee's Hartford hearings Governor Hurley 
and other witnesses testified on this subject. I would like to quote 
the statement of Governor Hurley : 

"It seems to me that there is a competition in our State among the 
various agencies. I know that I have talked to the mayors of the 
municipalities. These mayors have set up housing authorities and 
also registries where migratory workers can go and find out what the 
rents are and where available housing facilities are located. But it 
seems to me that the Agriculture Department and the Work Projects 
Administration and the United States Housing Authority are in com- 
petition with one another as to setting up these housing projects in our 
various cities. I have heard that one city was waiting because an- 
other Federal agency had made an offer that seemed more advanta- 
geous to the city. There doesn't seem to be any coordination." 

Would you care to comment on that statement oil the Governor's? 

Mr. Palmer. The statement the Governor made undoubtedly was 
made merely because of lack of information. The Federal Works 
Administration, for instance, goes in with certain housing of a par* 
ticular type. The Farm Security is handling the temporary shelters, 


and so forth. Those are all described in detail in this booklet which 
we have given you for the record. 


Dr. Lamb. Dr. Parran, the Surgeon General, in testifying to this 
committee yesterday, said that over one and a half billions is needed 
for housing to meet the emergency situation. Does this approximate 
your estimates? 

Mr. Palmer. He said one and a half billion ? 

Dr. Lamb. Yes. 

Mr. Palmer. Well, our figures now run a little over $1,000,000,000 
on a justifiable basis. At the present time we are using, in round num- 
bers, $593,000,000 in all of the activities. 

There is before the Public Buildings and Grounds Committee of the 
House a request for an extension of the Lanham Act by $300,000,000 
more, which would bring it up to $393,000,000. 

The request to expand title VI will come up soon and that will carry 
this above the $1,000,000,000 mark. 


Dr. Lamb. We understand that your office is withholding decision 
on defense housing in the Detroit area pending further determination 
of curtailment of automobile production. 

Have you received any advice from the O. P. M. in this regard? 

Mr. Palmer. We keep in touch with them every day and we have 
programmed 1,000 houses in there. 

Dr. Lamb. And they will go ahead regardless of any curtailment 
of automobile production? 

Mr. Palmer. Yes, sir. We consider they are needed regardless. If 
25 percent curtailment is put in effect, 93,000 defense workers will be 
released, but a worker living in Detroit can produce a tank just as well 
as he can produce an automobile and still live in the same house. 

It is a very difficult problem until we know exactly what the cur- 
tailment is, but we keep in touch with Detroit daily on long-distance, 
and we have men in the area frequently. 

Dr. Lamb. Have priorities in materials already affected your pro- 
gram for defense housing expansion ? 

Mr. Pamer. Yes, sir; but with the splendid cooperation of the 
O. P. M. we have been able to expedite orders for vital materials to such 
a degree that I don't think any defense project has really lagged on 
that account. However, anticipating our responsibilities, a statement 
was worked out with the Priorities Division under Mr. Edward Stetti- 
nius and myself, which I should now like to put in the record. 

Dr. Lamb. It will be received. 

(The statement referred to above is as follows :) 

Exhibit H. — Program Providing Priority Aid for Defease Housing 

A broad program providing priority aid for defense-housing projects, designed 
to assure the completion of such projects as promptly as possible, was announced 
jointly today by E. R. Stettinius, Jr., Director of Priorities, and Charles F. Palmer, 
Coordinator of Defense Housing. 


This program puts defense housing a head of civilian- and non-defense-housing 
projects and will assure a steady tl< >\v of necessary building materials to the 
I 'injects deemed essential to the national-defense program. 

Under the terms of the agreement, no priority aid will be granted for defense 
housing, whether publicly or privately financed, until these requests have been 
cleared through the Coordinator or his field representatives in accordance with 
the procedures being developed. 

The Division of Defense Housing Coordination is to supply the Priorities 
Division of the Office of Production Management with — 

(1 ) A complete list of all publicly financed defense-housing projects for which 
priority assistance is recommended. 

(2) A list of areas in which an acute shortage of housing either exists or 
impends, thereby threatening to" impede or interfere with national-defense activ- 
ities, together with figures on each area indicating how much defense housing 
is needed. 

(3) A formal definition of what shall constitute defense housing. 

Under this new program, priority assistance may be given either to a publicly 
financed defense-housing project, or to private defense projects within a desig- 
nated area. 

With the concurrence of the Army and Navy Munitions Board, the Priorities- 
Division will be prepared to give each publicly financed defense-housing project. 
or any area named by the Defense Housing Coordinator, a preference rating 
considered appropriate in the light of the national-defense activity to be served. 

Plans are being worked out under which these projects or area ratings may be 
extended to applicants by local representatives of the Government to be desig- 
nated by the Coordinator with the approval of the Priorities Division. 

The ratings to be assigned will aid contractors engaged in defense-housing work 
to speed up delivery of materials to be specifically named on a defense-housing 
critical list now being prepared. 

The ratings may be used only for orders or contracts for these critical-list 

This critical list will contain only those items on which, in the opinion of the 
Priorities Division, preference ratings are necessary to obtain the quantities and 
delivery dates required. The list will exclude items of a vital defense nature — 
such as aluminum, copper, nickel, bronze, zinc, etc. — except when the Defense 
Housing Coordinator demonstrates that these items or products containing these 
items are absolutely essential and that adequate substitutes cannot be used. 

The defense-housing critical list will be subject to revision when necessary. 
When items needed are not on the list, but priority aid is still considered neces- 
sary, applications will be made to the Priorities Division on its Form PD-1 
through the designated local representative of the Coordinator. 

Representatives who are designated to handle applications for priorities for 
privately financed defense construction may only extend an area rating when they 
are satisfied that the housing will be suitable for, and reasonable preference in 
occupancy will be given to, workers engaged in the designated defense indus- 
tries- that the intended sales price is $6,000 or less or the intended shelter 
rental is $50 per month or less: and that the housing is, in general, necessary 
in connection with defense-housing needs. 

It was pointed out. however, that exceptions may be made for such other 
proposed residential construction as may, in particular cases, be necessary to 
meet defense needs. In such cases the necessity must be demonstrated to the 
Coordinator through his designated local representatives, and the Coordinator 
will make appropriate recommendations to the Priorities Division. 

It was stated thai the procedures being developed will apply to rehabilitation 
of existing structures, as well as new construction, where a dwelling unit not 
otherwise habitable would thereby be made available. 

The Division of Defense Housing Coordination has for the past few months 
given aid for defense housing, both publicly ami privately financed, and the new 
agreement has been developed in order to establish regular procedure. 

The present agreement will clarify the priorities situation with relation to 
residential defense construction and, it is hoped, will remove any hesitancy on 
the part of builder-;, lenders, and others to undertake this type of construction. 


Dr. Lamb. You expect, then, priorities will affect the program, 
whereas previously they have not? 


Mr. Palmer. I think priorities will help keep defense housing go- 
ing and that as conditions get tighter in the United States normal 
building will fall off. 

Dr. Lamb. Who is legally charged with responsibility for decisions 
as to the need for building-material priorities for defense housing? 

Mr. Palmer ; The O. P. M. 

Dr. Lamb. You have no jurisdiction in that matter? 

Mr. Palmer. They requested that we recommend procedures and 
also the areas and projects that should get priorities. The decision is 
not ours. 

Dr. Lamb. Would you state what your office determines in regard 
to housing built by each agency coordinated by your office? I would 
like to go down the list of determinations. For instance, who deter- 
mines allocation ? Who determines the allocation of the project and 
who determines it in the local community ? Who sets the rents and who 
sets the restrictions as to who may live in the projects? 

I will start with the first. Who determines the allocation '. 

Mr. Palmer. The President, upon our recommendation. 

Dr. Lamb. And who determines the location of the project ? 

Mr. Palmer. The agency which is to construct it, after advising 
with us regarding its relationship to the coordinated program. Some- 
times four or five agencies are building in the same community, and we 
keep each one informed of the activities of the others so that it will not 
be competing for the same site and its purchase and so on, 

Dr. Lamb. Who is responsible for the location of the project? 

Mr. Palmer. The responsibility is with the Federal Government. 

Dr. Lamb. What about setting of rents? 

Mr. Palmer. The Lanham Act, if we are using or working under 
that act. It states that the rents shall be reasonable and fair and 
that those rents should be what defense workers can afford to pay, 
so the general principle has been established through consultation of 
all the agencies together in our offices, and then a general principle set 
up. But the actual determination of the rents right down to the penny 
is with the construction agencies doing the job. 

Dr. Lamb. Who sets the restrictions as to who may live in the 

Mr. Palmer. The standards are set up in general by our office and 
then they are reviewed by the various agencies participating. 

comparison with local rents 

Dr. Lamb. Can you tell the committee how the rentals set by your 
agency for trailers and dormitories compare with local rents? 

Mr. Palmer. There is practically no competition, because theie 
aren't trailers and there aren't dormitories for rent in most communi- 
ties. But our rents compare very favorably with what would be 
charged for a room in a private house. However, the trailer rent in- 
cludes furnishings — you see those go at about $25 to $30 per month, in- 
cluding the furnishings. The rents for dormitory rooms run from 
$3.50 up to about $5 per week. 

Dr. Lamb. And is there such a thing as a dormitory trailer ? 

Mr. Palmer. For single men ? 

Dr. Lamb. Yes. 


Mr. Palmer. Not at the present time. We have, by the way. just 
worked out two sets of utility trailers in which are shower baths, 
laundry tubs and toilets, in order that they can move into a community 
much more rapidly and set up trailer camps of a real decent standard 
than has been true in the past, when it was necessary to set up those 
utility buildings and build them in the old orthodox way. 

There is also now an accommodation for families that have children 
in these trailer camps which will come in on wheels and will be 8 
feet wide only, but can immediately expand to a width of 18 feet, which 
gives us over 22.000 cubic feet of space in that little building; and yet 
it can be put on wheels and moved right away again later. Those will 
be put in the various trailer camp's to take care of the larger families 
more commodiously than before. 


Dr. Lamb. What is the record of occupancy of trailers and dormi- 
tories ? 

Mr. Palmer. In San Diego the occupancy at the present time is lag- 
ging because the employment schedule of the Consolidated Aircraft 
Corporation hasn't been up to scratch. Some of the National Youth 
Administration trainees are using part of the dormitories there. 

Now, in other place they have been completely occupied immediately. 

Dr. Lamb. When the committee was in San Diego they understood 
ihe rent charged was $7 a week for a trailer. Is that correct? 

Mr. Palmer. That is approximately correct, for a family. 

Dr. Lamb. You spoke of the N. Y. A. occupying dormitories in San 
Diego at the present time. Would the dormitory rents be out of line 
with the rent for trailers? 

Mr. Palmer. They would probably be a little higher than the rents 
that will be paid in the permanent housing when it is completed 
on Kearney Mesa because we want to encourage the people to get out 
of the trailers as fast as they can. 

Dr. Lamb. Do you think it is having a discouraging effect, tem- 
porarily, on their moving in? 

Mr. Palmer. I don't believe so. 

Dr. Lamb. Another situation which lias been described to the 
committee is that of Orange, Tex., where I think there are 4 
dormitories with 408 units, or something of that kind, at the present 
time. Do you have those figures? 

Mr. P.m. mi r. We will be glad to get those for the record. 1 

Dr. Lamb. And. we were told that there are vviy few occupants of 
that unit at the present time. 

Mr. Palmer. I don't know how long it has been opened. I don't 
know how their employment schedule is. But we can check on any 
of tin 1 individual instances fur you. 

Dr. Lamb. We would like to have that. 
_ We understand that rents there are as you staled — $:}.5() a week for 
single and $5 ;i week for a double room, but that there are local rents 
available and that that accounts Cor the lag in occupancy. 

'Tin' figures .-is given above by Or. Lamb were subsequently found to be correct. 


Mr. Palmer. Of course, we are delighted to have some of our 
projects partially vacant — not that there are many that way, un- 
fortunately — because if every project filled right up as soon as we put 
it in you wouldn't be able to expand your labor supply, and we have 
programmed, in many instances, looking into the fall, of course, and 
have come into the market very quickly. 


Dr. Lamb. Could you give the committee a list of members of your 
National Advisory Committee? 

Mr. Palmer. That is in the booklet. 

(This list, as given in the booklet "Homes for Defense," follows:) 

Executive staff: C. F. Palmer. Coordinator: Jacob Crane, Assistant Coordi- 
nator; Carl Henry Monsees. executive assistant : Herbert S. Colton, counsel: 
Ferdinand Kramer, program supervisor; Davis W. Snow, information adviser; 
J. W. Abney, administrative officer ; Samuel J. Dennis, Director, Analysis Divi- 
sion : Howard Strong, Director, Homes Registration Division; Carl L. Bradt, 
Director, Temporary Shelter Program ; William V. Reed, Director Standards Divi- 
sion : M. Allan Snyder, management adviser : Frank A. Vanderlip. Jr., Regional 
Coordinator, Region II; Clarence W. Farrier, Regional Coordinator, Region III; 
J. W. Cramer, Regional Coordinator, Region IV; Winters Haydock, Regional 
Coordinator, Region V. 

Organization advisers: Morton Bodfish, executive vice president. United States 
Savings and Loan League, 333 North Michigan Avenue, Chicago, 111. : Mr. Walter 
Blucher, executive director, American Society of Planning Officials. 1313 East 
Sixtieth Street, Chicago, 111. : Mr. Stanley M. Buckingham. National Association 
of Building Owners and Managers, 1315 Williamson Building, Cleveland, Ohio; 
Miles L. Colean, research director, housing survey, the Twentieth Century Fund. 
522 Transportation Building, Washington. D. C. : Miss Harlean James, executive 
secretary, American Planning and Civic Association, 901 Union Trust Building. 
Washington, D. C. ; Herbert U. Nelson, executive vice president, National Associa- 
tion of Real Estate Boards, 22 West Monroe Street, Chicago, ill.; Mrs. Samuel I. 
Rosenman. chairman, National Committee on the Housing Emergency, 6 East 
Forty-fifth Street, New York, N. Y. ; Boris Shishkin, American Federation of 
Labor, Ninth and Massachusetts Avenue NW.. Washington. D. C. ; Allan A. 
Twichell, technical secretary- committee on the hygiene of housing, the American 
Public Health Association, 310 Cedar Street, New Haven, Conn. ; Gardner Wales, 
comptroller of the united construction workers organizing committee. Congress of 
Industrial Organizations, 1106 Connecticut Avenue NW., Washington. D. C. ; Cole- 
man Woodbury, director. National Association of Housing Officials, 1313 East 
Sixtieth Street, ( liicago. 111. 

Advisers: John C. Bowers, John C. Bowers Co., 4(i2S Broadway, Chicago. 111.: 
Harold D. Hynds. 12 Rochambeau Road. Scarsdale, N. Y. 

Consultants: Virgil Bankson, consultant. Labor Relations; David Cushman 
Coyle, Cosmos Club, Washington, D. C. ; Ernest M. Fisher, Washington, D. C. : 
James Ford, Lincoln, Mass. ; Joseph A. Fowler, special consultant ; Justin Hartzog, 
special consultant ; Robert P. Taylor, consultant, racial relations. 

Dr. Lamb. Does that list include representatives of all community 
groups — is it a comprehensive sort of citizens' committee? 

Mr. Palmer. It is a good cross section of all the activities in the 
United States interested in housing. Would you like to have me 
read a sample now? 

Dr. Lamb. I don't think we need it at this moment. The next 
witness is waiting, and I shall not keep you any longer. Thank you 
very much, Mr. Palmer. 

The Chairman. Mr. Palmer, we thank you very much for your 
valuable contribution to our record. 


(Supplemental material on the organization and operations of 
homes registration offices was submitted by Mr. Palmer, including a 
mimeographed "Guide" to this subject, which is held in committee 
files, and the following statement :) 

Exhibit I. — Operations of Homes Registration Offices 


The purpose of the homes registration offices organized with the cooperation 
of the Division of Defense Housing Coordination is to facilitate the full use of 
existing residential accommodations by persons engaged in defense activities. 
These offices aid incoming defense workers and others seeking residential 
accommodations in defense areas to rind suitable dwellings as quickly and as 
easily as possible. At the same time, they act to till vacancies as rapidly as 
they occur and thus return housing to use without delay. They operate to 
increase the total supply of both family accommodations and looms available for 
rent by securing the cooperation of landlords in conversion of existing housing 
to provide more dwelling units and by appealing to local residents to throw 
open to the incoming workers rooms that would ordinarily not be found in the 
rental market. 

To achieve this purpose, homes registration offices are being established in 
the principal defense centers. As of July 15, offices have been established 
and are in active operation in 86 cities. In addition, offices are in process of 
organization or under consideration in 164 other cities. A list of the offices now 
in operation and those in process of organization is attached. 

Local homes registration offices under the jurisdiction of the Division of 
Defense Housing Coordination are agencies of the local governments. lu 
most instances they are established under local defense councils. In some 
places they may be arms of State, regional, or district defense councils, or 
may be established under housing committees appointed by the city govern- 
ment. The Division of Defense Housing Coordination is active in working 
with these local groups in the establishment of the registration offices and in 
providing advice and suggestions concerning their operation. In a number of 
cases, the Division of Defense Housing Coordination has been able to arrange 
for clerical assistance for the local offices through a Work Projects Adminis- 
tration project sponsored by the Division. However, because of the local char- 
acter of these offices, the Division of Defense Housing Coordination exercises 
no administrative control over them. The relationship is rather one of co- 
ordination and cooperation. In view of this fact, the procedures of the local 
offices differ from place to place and the quality of the services which these 
offices render is likewise variable, depending upon the extent of the local 
support which they receive. Where local groups are thoroughly convinced of 
the value of the registration service and where adequate provision has been 
made for capable direction and suitable staff, the local offices are able both 
to serve landlords and home seekers efficiently and to make extremely valuable 
reports concerning their operations. In other cases, the service is less effective 
and the reports less usable. 

In the •".() cities for which reports have been received up to date, the local 
honies registration offices have registered a total of 8,131 family dwelling units 
and 19,789 rooms. They have also received 6,457 applications from home seek- 
ers and 2,559 applications from persons looking for rooms; they have placed 
2,129 of the applicants for family accommodations and 1,814 of the applicants 
for rooms. These operations (which exclude a small amount of work done 
by the offices in connection with public defense housing projects) are sum- 
marized in the attached table. In general, the placing of families has been 
more difficult than the placing of single people desiring only rooming accommo- 
dations. Of the total number of applicants for rental dwelling units, one-third 
have found accommodations through the homes registration offices, while nearly 
three-quarters of the applicants for rooms have been placed. 
60396— 41— lit. IT— 16 



At the end of May the homes registration offices in these 30 cities had in their 
active files a total of 4,229 rental dwelling units available for occupancy. These 
rental units were distributed among the various rental groups as follows : 

Monthly rent 

Rental units of 
indicated rent 

Under $20... 

$20 to $29 

$30 to $39 

$40 and over. 
Not reported 

Total. _ 

i Based on number for which rent is reported. 

At the same date, the registration offices reported a total of 3,443 applicants 
who had not yet found accommodations and whose applications were still 
active. These applicants desired rental dwelling units of the following rentals : 

Monthly rent 

Applications desiring 
rental units of indi- 
cated rent 

Under $20... 

$20 to $29 

$30 to $39 

$40 and over. 
Not reported 


1 Based on number for whom desired rental is reported 

Comparison of this distribution with the table given above suggests that the 
greatest difficulty in placing applicants is in the rental ranges from about $20 a 
month to about $40 a month. 

The number of rooms listed with the homes registration offices as available 
amounted to 15,808, while the number of active applicants who had not yet been 
placed was 604. These figures on the active listings and active applicants as of 
the end of May are smaller, of course, than the figures cited above for total listings 
and applications during the period of operations, since numerous family units and 
rooms have been removed from the lists, either because they have been filled 
through the homes registration offices or because they have been rented direct by 
the owners or their agents, and since many applicants have been placed or have 
withdrawn their applications. 

The active listings as of this date represent the numbers of rental dwelling 
units and rooms registered with the homes registration offices. They do not 
necessarily represent the total number of vacant family units or vacant rooms in 
these cities. Vacant family units which are for sale but not for rent are excluded 
from these data. Furthermore, in many communities the demand has been 
primarily for certain types of properties within certain rental ranges (usually 
the lower rental groups), and the homes registration offices have concentrated 
their activities in securing listings of these types of property without making a 
specific effort to secure complete listings of types of properties for which there 
was little immediate demand. In many cities the registration offices are still in 
process of building up their files and have not yet reached the point where they 
are able to find and list all of the vacant properties within the area of their 
operations. Therefore, these listings do not generally represent complete vacancy 
surveys of the communities covered, though they give exceedingly valuable indi- 
cations of the extent and nature of the operations of the homes registration offices. 

The full extent of the role which the homes registration offices are to play in 
finding dwelling accommodations for defense workers is not yet apparent from 



these early reports. Most of the offices have been organized for so short a time 
that the reports do not represent the volume of activity which they will reach .is 
their organization is perfected. In many cases the period of operation has been 
so short that no report at all has yet been submitted. On the basis of these lust 
reports, however, it is clear that the offices are becoming an exceedingly important 
instrument for assuring full utilization of the existing housing supply. In most 
of the cities for which information is now available they have developed a large 
supply of rooms and have had marked success in finding accommodations for 
single persons. The supply of rooms for single defense workers made available 
through these offices will undoubtedly far exceed the number of rooms contained 
in dormitories which it will be necessary to construct from public funds. The 
development of large supplies of family accommodations appears more difficult, 
but final experience may very well show that the number of units made available 
through the homes registration offices will be substantial in comparison even with 
the large volume of public defense housing in the same areas. 

Homes Registration Offices, July 15, 1941 

oc: HAT INC 

Alabama : 




Arkansas : 

Little Rock. 
California : 

San Diego. 


Connecticut : 



East Hartford. 


New Britain. 

New Haven. 

District of Columbia 

Florida : 



Key West. 

Georgia : 



Alabama : 





California : 




Long Beach. 

Los Angeles. 



San Francisco. 


Colorado : 

Connecticut : 



New London. 


Florida : 

Panama City. 





Georgia : 







Illinois : 

Rock Island. 




North Chicago. 

Iowa : 


Kansas : 


Kentucky : 


Louisiana : 

Baton Rouge. 

Maine : 

Maryland : 


Massachusetts : 

Michigan : 



Nebraska : 

New Hampshire: 



Illinois : 
East St. Louis. 

Indiana : 

Fort Wayne. 

South Bend. 

La Porte. 


Iowa : 

Council Bluffs. 


Kansas : 


Arkansas City. 



Kansas City. 




El Dorado. 

Louisiana : 


Lake Charles. 

New Orleans. 


De Ridder. 
Maine : 

Maryland : 

Massachusetts : 






Michigan : 




Bay City. 

Mississippi : 

Missouri : 

Kansas City. 



New Hampshire : 




New Jersey : 

New Mexico. 
New York : 


Niagara Falls 



North Carolina : 
New Bern. 

North Dakota. 







Oregon : 



New Jersey : 

New Brunswick. 

Jersey City. 




Bound Brook. 







New Mexico. 
New York : 



Albanq city and county (Cohoes) . 














North Carolina : 



North Dakota. 








Newton Falls. 


Oklahoma : 






Pennsylvania : 

Beaver County. 



Bucks County (Hatboro). 

New Kensington. 



Rhode Island : 

South Carolina 


South Dakota. 
Tennessee : 




Texas : 

Corpus Christi. 





Wichita Falls. 

Utah : 

Vermont : 

Virginia : 









West Virginia : 


Wisconsin : 






Pennsylvania : 

Allegheny County. 





Ellwood City. 




Washington County. 

Westmoreland County. 


Delaware County (Chester). 

Montgomery County (Hatboro) 

Bucks County (Bristol). 
Rhode Island : 

South Carolina. 

South Dakota. 
Tennessee : 


Alcoa-Mary ville. 






Texas : 

Fort Worth. 

San Antonio. 


Port Arthur. 



Mineral Wells. 


Virginia : 

Fairfax County. 

Arlington County. 



Newport News. 

Virginia Beach. 

Suffolk County. 


Montgomery County. 
Washington : 


West Virginia : 


Wisconsin : 


West Allis. 


Fond du Lac. 




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The Chairman (after a short recess). The committee will please 
come to order. Mr. Reporter, the next witness is John M. Carmody, 
Administrator of the Federal Works Agency. 


The Chairman. Mr. Carmodv. we appreciate very much your com- 
ing up here this morning. I would like to say to you that this com- 
mittee made a general investigation of the migration of destitute 
citizens and reported to the Congress last year. Following that report 
we were continued this session of Congress to investigate the migration 
resulting from the national-defense program. 

I think to start with it would be enlightening for you to tell us just 
what part the Federal Works Agency is playing in the picture of 
Federal housing. 

Mr. Carmody. You are speaking now with reference to defense 

The Chairman. Yes. 

Mr. Carmody. Under the Lanham Act the Administrator of the 
Federal Works Agency is made responsible for carrying out the pro- 
visions of that act. There is a provision in the act which says that 
the need shall be certified by the President, and it has been my under- 
standing that the President set up an organization to find that need. 

When the Coordinator of Defense Housing makes his recommenda- 
tion to the President as to need, and the President signs a letter, he 
thereby directs us to proceed with construction, and from that point 
on it is the responsibility of the Federal Works Agency to carry 
through the construction and under the act to dispose of houses built 
under that act at the end of the emergency. 

I dare say the committee has on file a copy of the Lanham bill. 

The Chairman. Yes; we do have. 

Mr. Carmody. That was Public 849. 

The Chairman. It was the bill appropriating $150,000,000. 

Mr. Carmody. Yes. The Lanham Act w T as amended to provide for 
community facilities for defense purposes. An appropriation of 
$150,000,000 was made by the Congress to carry out the purposes of 
that act. It was really title III of the Lanham Act. 1 

The Chairman. Do you think that is going to be adequate, Mr. 
Carmody ? 

Mr. Carmody. Well, we are now just beginning to shape up projects 
for final recommendation to the President on the basis of field studies 
made by other agencies of Government before the act w T as passed, and 
on the basis of some checking that our regional and field engineers have 
done, it appears that that will not be enough to meet all of the present 
applications. But I am not prepared to say today because we have not 
analyzed them in detail, and some of those applications will wash out. 

I think we shall find that some of them do not have the direct de- 
fense connection that is essential in order that we may recommend 
them for prosecution. 

The Chairman. Mr. Carmody, when the report of your recom- 
mendations is in shape and ready for release, if this committee could 

1 See p. 5007, San Diego bearings. 


have a copy of it it would be very helpful to us, because we are 
reporting to Congress in a few weeks with certain recommendations. 

Mr. Carmody. We will be glad to keep this committee informed as 
projects are actually approved and ready for work, and we shall be 
glad to let this committee know what we think about projects — projects 
that we think are worthy of allotment for funds. 

The Chairman. Do you think, Mr. Carmody, that the original esti- 
mates of needs for defense housing made by the Housing Coordinator's 
office last year were substantially correct — too low or too high? 

Mr. Carmody. Mr. Chairman, inasmuch as it is not my responsibility 
for finding the need, I have set up no machinery to check anybody 
else's inquiries into the need. I assume that the Coordinator depends 
largely on those agencies of Government that have already made stud- 
ies, such as the F. H. A., which has a large staff reporting regularly on 
needs as they see them, as well as on other agencies that have made 
similar studies. As a matter of fact, W. P. A. has made some sam- 
ple inquiries over the country over a long period of time, and all of 
the data that they have gathered have gone to the Coordinator's office 
for his information. 


The Chairman. Has your agency made any studies at all, Mr. 
Carmody, of the amount of rent that defense workers should pay, in 
view of the fact that 80 percent of the defense workers earn approxi- 
mately $30 a week? 

Mr. Carmody. In every case we are incmiring into the actual earn- 
ings of the tenants and attempting to adjust the rents to their earn- 
ings, as directed by the act itself. In other words, we are following 
the spirit of the act. 

I understand that some discussion has been had recently before the 
Public Buildings and Grounds Committee, which is now considering 
an additional appropriation. Consideration has been given to the 
question of setting the rents on a basis of complete economy ; in other 
words, establish the rents on an economic basis. We have not done 

We understood the act to say that rents should be fair in relation 
to the worker's earnings. After a good deal of discussion with a 
good many people — the Coordinator's office and many other people 
who have had experience in this field — we agreed that approximately 
20 percent of the income would be about what people normally pay 
as rent. That is the maximum. The average is about 17 percent. 

The Chairman. The committee investigated the Kearney Mesa 
project at San Diego. Have you seen the project, Mr. Carmody? 

Mr. Carmody. I have not seen it, I am sorry. I am practically the 
only person in Washington who hasn't been out there. 

The Chairman. It is about 5 or 6 miles from San Diego, and I 
think it is about half completed. I was very much impressed with the 
thoroughness and the freedom from confusion and the speed with 
which they are putting up the houses. 

They gave me a demonstration there one day as to what they 
could do. When I saw the building there was nothing but the floor- 


ing. They put up the frames and windows and the roof in 12 
minutes. Of course, everything was precut and assembled. 

I think those three- and four-room houses would rent for approxi- 
mately $22 a month, so that would keep them in line with what you 

One feature that I thought proBably might be improved on is the size 
of the liouse. A good many witnesses have testified before the commit- 
tee in reference to that. For instance, one man said he had s ; x chil- 
dren, who, together with himself and wife, made eight in the family. 
He stated that he looked around for a long time but could not find a 
house and finally got a one-room apartment with a kitchen for which he 
paid $18 a week. That was private property. I was very much inter- 
ested in that case. I asked him how much he was making and he told me 
$135 a month. I suggested to him that he should lay something aside 
to take care of the family when this thing is over. He asked how 
he could do it and take care of a family of eight and pay approxi- 
mately $80 a month for his room. 

What I want to point out is that our Federal housing program 
does not provide for large families like this man's. The units are uni- 
form in size — three- and four-room houses. 


Mr. Cabmody. You see the Congress set a limit of $3,000 average for 
the cost of the houses in the original bill. That has now been amended 
to raise the limit to $3,500, but it was the understanding when that 
limit was raised that it was raised to enable the construction agency 
to use more masonry and clay products. The change was made wholly 
and solely, so far as I was able to see — and I attended all of the hear- 
ings — upon the representation of the clay and brick people that they 
had not got a fair share of business out of the new construction 

With a limit of that kind it hasn't been possible to build many five- 
and six-room houses. But I think you are quite right. I think in a 
project of that size perhaps we do need to put in some houses to accom- 
modate families of six, and maybe here and there eight. In our future 
planning we must take that into account. 

Dr. Foreman reminds me we are doing that in Pittsburgh, where we 
are building 5,000 homes. 

The Chairman. I call your attention to the migrants who have ap- 
peared before our committee. Many of these had large families. They 
all testified that they had had considerable difficulty in finding places to 
live. I took the matter up with various officials, and they agreed some 
provision should be made for them. 

Is there an acute shortage of housing right now in defense centers? 

Mr. Carmody. Well, again, I am very sorry to say that I haven't made 
any study of it. I only know whatever one gets from the newspapers. 
As a matter of fact, Mr. Chairman, whenever a complaint about an 
acute shortage comes to my office it goes immediately to the office of the 
Coordinator of Defense Housing. 



The Chairman. Do you know how many units. Mr. Carmody, your 
agency has constructed? 

Mr. Carmody. At the end of June, and actually ready for occupancy, 
10,086. They are being completed at the rate of about 240 a day. 

The Chairman. And how many have been contracted for ? 

Mr. Carmody. Construction has begun on 42,215. 

The Chairman. And how many units have funds been allotted for ? 

Mr. Carmody. Eighty thousand one hundred and forty-four. 

The Chairman. And is the rate at which allocations are being made 
enabling you to keep production abreast with the need, so far as you 
know, Mr. Carmody ? 

Mr. Carmody. I have suggested to the Coordinator's office that it 
would be very much better for production if we could be informed the 
day the decision was made to build houses, to get started rather than 
to have his office accumulate a list over a period of anywhere from 3 
weeks to a month. I was told this morning that as a result of that sug- 
gestion the Coordinator now says he will undertake to send through a 
list each week. That will be an improvement over the past procedure. 

The Chairman. Do you think, Mr. Carmody, that in centers of de- 
fense industry like shipbuilding or aircraft, the construction of the 
plants gets ahead of the housing? Are we a little bit behind with the 
housing or not? 

Mr. Carmody. Well, we have had varying experiences there, Mr. 
Chairman. Let me give you a case in point : 


We were told on November 20, 1940, to prepare to build 1,050 
houses to take care of the shipbuilders at the Fore River Shipyard 
in Quincy, Mass. — the Bethlehem Steel Corporation. 

It developed that at that time a slum-clearance project in Boston, 
owned by a Boston housing authority, was about ready for occupancy. 
It contained approximately 823 units. We were urged by the Co- 
ordinator to buy it. 

I know Quincy a little bit ; I know Boston a little bit ; I know the 
Bethlehem Steel Corporation a little bit ; and I wondered why we were 
pressed to buy a property in South Boston, twenty-odd miles away 
from the shipyard, when there was plenty of land available in the 
area nearer to the shipyard. 

As a matter of fact, representatives of some of the shipyard workers 
came to me and said that we ought not under any circumstances to 
try to house those people in South Boston ; that we ought to provide 
homes nearer to the yards. 

However, the Coordinator pressed us to buy this property in Boston 
because it was ready for occupancy. The land cost was very much 
higher than land could have been purchased for precisely the same 
purpose near the yards. I resisted the purchase in South Boston. 
We had some argument about it. We discussed it in my office. The 
Coordinator was very insistent that we do it. 

I finally decided to do it, against my better judgment. We bought 
that property and paid $1,000,000 more for it than we ought to have 
paid for such accommodations. 

Thirty days went by and not one single shipyard worker rented 
a home in that project. Finally I appealed to Joe Larkin, vice presi- 


dent of the Bethlehem Steel Corporation and assistant to President 
Eugene Grace, whom I have known for 25 years. We worked to- 
gether on employment and management problems for years. 

Mr. Larkin undertook to persuade, or to get his company to per- 
suade, people to go there. They didn't go. We had to throw the 
project open to other defense workers. We started with the workers 
in the Cnarlestown Navy Yard in Boston itself, and in spite of n 
special drive it is not 50 percent occupied now. 1 

We did that because the Coordinator flashes his Executive order 
in front of us every time we question any recommendation made by 
his office. You know the President is my boss, too, but I've known 
him too long and have too much respect for him and his defense 
burden to bother him with small irritations. And then, too, in this 
case it was one man's judgment against another's and there is always 
the possibility the other fellow may be right. The Coordinator had 
had a good deal of experience and he had talked to real estate men 
in Quiney where the shipyards are located. Both of us learned a 
lot from that transaction — the difference is that he has never admit- 
ted it on the record and I have. I used to think I knew what "co- 
ordinator" meant. I thought it was the term for a man whose job 
was to get people to work together. I didn't know that it was spelled 
with the letters that we now use for "dictator." 

However, we actually bought that property. The property is there. 
It has done the Bethlehem Steel Corporation no good; it has done 
the shipyard workers do good, and I understand that it was in their 
interests that that recommendation was made. 

Now, we have nor built the 177 units, the difference between what 
we bought and the 1,000 originally called for. We did buy a prop- 
erty at North Weymouth, within walking distance of the shipyards, 
and were prepared to build there until we found some difficulty in 
the local community. The people said that the shipyard workers 
would be taken care of b} r private building and so on and so forth. 
I felt that we ought not to build the 177 until we are dead sure thev 
will be occupied. 

\ow, it happens in addition to this, that at the time this recom- 
mendation was up there was parking space there for about 2,000 cars — 
around the Bethlehem yards — but because of the increase in the num- 
ber of ways that they built, that parking space was reduced to a point 
where it would accommodate about 1,000 cars. That was another 
reason why it seemed to be better judgment to build the houses for 
the shipyard workers within walking distance. However, it didn't 


Now, in San Diego we built a dormitory. We were under terrific 
pressure from the Coordinator's office to build a dormitory in San 
Diego. They told us we were not cooperating and so on and so forth. 
So we finally decided to build the dormitory. As a matter of fact 
some of our lawyers are doubtful whether we have authority under 
the law to build dormitories. 

We met that by building what can easily be transformed into 
living quarters for families. But anyhow, we built the dormitory. 
We built 750 units in 30 days. No other agency that I know of has 

1 See exchange of telegrams in Exhibil I), pp. 6946-6947. 


done a faster construction job. We did it because of the terrific pres- 
sure and urge from the Coordinator's office. After being built these 
houses went for weeks without a single occupant. I am told now that 
there are still no occupants. 1 

The Chairman. We have been given many "horrible examples" 
of workers housed at great distance from their jobs. We had a wit- 
ness in Trenton, N. J., who testified that he leaves his home for his 
work at 5 o'clock in the morning, gets to his work at 8; he quits at 
5 o'clock and he gets home at 8 at night. And we have had similar 
instances of that in every place we have held hearings. 

Mr. Carmody. Now, Mr. Chairman, at this point I would like to 
say I am not an expert in this housing field, but what I think the 
whole housing business needs is a good dose of good common sense. 

The Chairman. I think you are right. 

Mr. Carmody. From all of us. 

rent range set by f. w. a. 

The Chairman. I think you are right about that. Now, Mr. Car- 
mody, is the rent range that your agency has set adjusted to that of 
the other housing agencies ? 

Mr. Carmody. Well, in the first place, as I have already said, we 
have this thing which looks like a directive in the law. We also have 
had from the Coordinator's office — and also before it was disinte- 
grated, from the Advisory Commission on Defense — suggestions about 
rents — the range of rents. As a matter of fact I think the Coordi- 
nator still puts on his locality progress reports, which come to us for 
each project, a suggested rental range. The actual rents are deter- 
mined by the management division within the Federal Works Agency. 

In determining those we try to follow the law. We are guided by 
what the Coordinator recommends and guided also by what the 
manager finds on the project when he deals with the employers and 
with the tenants themselves and that is where the specific amount is 
really determined. 

The Chairman. A witness suggested yesterday to this committee 
that all nondefense housing construction of a public sort be discon- 
tinued for the duration of the defense emergency. What do you 
think about that? 

Mr. Carmody. Well, that is a difficult question for me to answer 
because one of the agencies in my own group is the United States 
Housing Authority. 

I think generally that the housing they provide is as badly needed 
by the people who get an opportunity to live there as any other hous- 
ing, and to that extent all housing today is defense housing if we are 
thinking in terms of national morale and in terms of having a unified 
front for the American people. 

The fact of the matter is that the regular United States Housing 
Authority program has been greatly slowed down because they had 

1 S«e telegram. Exhibit P, pp. 6948-6049. Also see San Diego hearings, pp. 4856, 4881, 
and 49rO-N. 


practically exhausted their appropriation and were able to revive it 
only by making new arrangements which enable them to recover 
some sums which they are putting in some slum-clearing projects. 

It boils down to this: Is the emergency so great that those who 
ought not to have lived in slums at all will be compelled to live there 
for another indefinite period? 


The Chairman. We had a number of witnesses testify before this 
committee that, wherever possible, a clause should be written in the 
present public housing construction contracts to the effect that at 
the close of the defense emergency an equivalent number of slum 
units should be demolished. Do you care to express an opinion 
about that ? 

Mr. Carmody. Well, I wouldn't without giving some considera- 
tion to how much that would cost and what cooperation might be 
obtained from the local communities. 

These new defense-housing projects, in many cases, are going into 
communities that had not previously had any public housing experience. 
In many cases I feel confident that the best disposition of these defense 
homes in the public interest will be through the local housing authori- 
ties as part of their broader slum-clearance program, but I would not 
like to be required to say specifically today that that would be the 
lest policy everywhere. 

We are, in some cases, undertaking to build demountable houses 
with the hope that when the emergency is over and they will not be 
needed in those areas, they may be moved somewhere else. How 
successful that will be only time and a little more experience than 
we have had thus far will tell. 

Mr. Chairman, I might put into the record that table on sub- 
standard dwellings and new nondefense residential construction and 
recommended public defense housing, dated July 15, 1941, which 
shows certain cities and for each of them the total number of 
dwelling units in the city, the number of occupied substandard dwell- 
ing units, date of real property inventory on which this is based, the 
number of dwelling units valued at $4,000 or less built by private 
funds since the date of the real property inventory, the number of 
United States Housing Authority nondefense dwelling units and 
the number of defense housing dwelling units recommended for 
assignment by Defense Housing Coordinator. 

I think if that were to go into the record it might give the com- 
mittee a good idea of the problem that is presented by these cities — 
Gadsden, Ala.; Hartford, Conn.; Boston, Mass.; Detroit, Mich.; 
Wilmington, N. C; Philadelphia, Pa.: Pittsburgh, Pa.; and Al- 
legheny County, Pa., excluding Pittsburgh. 

The Chairman. We will have it inserted in the record at this 


The table referred to is as follows : 

Exhibit A 

Substandard dwellings, new nondefense residential construction, and recom- 
mended public defense housing, July 15, 19-bl 

City or area 

Gadsden, Ala ' 

Hart ford , Conn 

Boston, Mass 

Detroit, Mich 

Wilmington, N. C 

Philadelphia, Pa 

Pittsburgh, Pa 

Allegheny County. Pa. (exclud 
ing Pittsburgh) 

of dwell- 
ing units i 



44, 977 


414, 658 

9, 585 
532, 631 
154, 074 

156, 373 

of occupied 
and dwell- 
ing units I 


Date of 
real prop- 
erty in- 






42, 908 


70, 781 




74, 588 


56, 491 


90, 079 


of dwell- 
ing units 
valued at 
$4,000 or 
lcs< built 
by private 
funds since 
date of real 

inventory 2 




of United 








5. 474 


of defense 
units rec- 
for assign- 
ment by 



3 1, 500 
1, 120 
1, 275 


' Source: Real Property Inventory. 

2 Estimated from building permits data supplied by the Bureau of Labor Statistics, Division of Con- 
struction and Public Employment. 

3 Includes 1,000 defense housing dwelling units being constructed by United States Housing Authority 
under Public 671. 

4 Not available. 


The Chairman. Will you compare the speed on building public 
projects with private projects, taking into consideration not only 
the construction period but the time taken to raise the money and 
to develop the financing? 

Mr. Carmodt. I have here, Mr. Chairman, a table that shows 
the date for allotment of money, the date construction started and date 
of completion for some of the early P. W. A. projects. These go 
back about 6 or 7 years to the first public housing program. Shall 
1 read them and then ask if this table may go into the record? I did 
not select these. I have taken the very first ones that the P. W. A. 
program turned out. 

The first one on my left is at Techwood Homes, Atlanta, Ga. The 
money was allotted on the 12th of April 1934. Construction was 
started on the 12th of February 1935, and it was completed June 
26, 1936. 

University Homes, Atlanta, Ga., was very much the same except 
that the money was allotted on the same date, April 12, 1934, and 
the project started April 22, 1935, and it was completed on March 
17, 1937 — nearly 3 years later. 

The Cedar-Central Apartments, Cleveland, Ohio, allotted April 
12, 1934, construction started June' 18, 1935, and completed March 
15, 1937 — a total of about 3 years. 

Lockefield Garden Apartments, Indianapolis, Inch, allotted April 
12, 1934, started July 15, 1935, and completed February 16, 1938— 
nearly 4 years. 


Riverside Heights, Montgomery, Ala., allotted December 3, 1934, 
started October 16, 1935, and completed October 23, 1936. 

The William B. Paterson Courts, Montgomery, Ala., allotted De- 
cember 3, 1934, started July 1, 1935, and finished November 10, 

Now, I put that in the record no) as ;i criticism of P. W. A. but 
merely to indicate how long it actually took to get some of these 
projects started in those early days when so few people knew how 
to organize them. 


But let me go back a little bit and say this with respect to this con- 
struction we are talking about. It just happens much of my early 
training was in the field of production itself. I was superintendent of 
a structural steel plant when I was a very young man and there I met 
Harrington Emerson, one of the greatest industrial engineers of all 
time and a man who did as much management engineering in foreign 
countries as he did in America over a period of 30 years. 

I also met Frederick W. Taylor, who was for many years regarded 
as the father of scientific management in America, and Frank Gil- 
breth, who organized motion study and work simplification in 
American industry, and applied it, if you please, to surgery here as 
well as abroad. 

I knew all of those men intimately. I belonged to the same man- 
agement engineering society that they belonged to. and I worked 
directly under Harrington Emerson and his associates. As a result 
of that training I became production manager of a manufacturing 
institution in Cleveland. I spent several years there. My job w T as 
that of producing in a seasonal industry where we had to undertake 
to keep people busy. As a matter of fact that was the first plant in 
the United States that guaranteed to its workers in a seasonal indus- 
try 41 weeks' work. We guaranteed to pay them whether they 
worked or not. But we never paid out a dollar under that guarantee 
because we not only planned our regular productions and sales but 
through research we developed products outside our regular line to fit 
our equipment and the skills of our employees. That was my job. 

Subsequently I became editor of Factory and Industrial Manage, 
ment, which was at that time the leading management journal in 
this country. In that capacity I had occasion to visit practically all 
of the manufacturing establishments in this country and to become 
acquainted with all of the good production men and all of their pro- 
grams and processes — their planning, and so on and so forth. 

Out of that experience I think I have some notion of how to get 
a job going. 


When this program started we undertook to set up a schedule of 
performance that would give us speed. I don't mind telling you that 
it was a bit difficult, because we were dealing with three or four agen- 
cies — agencies that had not had the same kind of commercial drive for 
production that I had to have to meet a payroll and to meet customer 
demands for delivery of product. 

60300— 41— pt. 17 IT 


If you don't deliver it somebody else will, and that is the thought of 
the school that I grew up in. We don't have that in government, but 
we are trying to put some of it in. 

Now, we started out with anybody's guess of how long it would take 
to buy land, for instance, or to do the necessary legal work, or to make 
plans for a wholly new town, and we wound up with this schedule from 
the time the President's letter reaches my desk until the job or the 
project is assigned to a specific agency, whether it be the U. S. H. A. or 
a local agency or local authority or the Navy or P. B. A. It takes a day 
to put the assignment through the works. We allow for the site selec- 
tion 10 days. There are cases where it has taken 30 days to select a site 
because of the many, many interests involved and the many, many 
ramifications — the many objections and suggestions, and so on, and so 

But our schedule calls for 10 days. We also give 10 days to the 
boundary-line survey and 2 days more to the topographical survey. 

I shall furnish to the committee a copy of this chart to put in the 

(The chart referred to follows:) 








































































Mr. Carmody. Those operations are overlapping sometimes. A 
boundary line survey takes the full 10 days — sometimes a little bit less 
and sometimes more. We have bought parcels of land where there 
are 200 separate owners and nobody knows specifically where the line 
is and you know probably better than I the land records aren't very 
good. They are certainly very uneven in various parts of the country. 

For the design and working drawings we allow a period of 24 days. 
The architects said in the beginning that it was a very tight schedule. 
However, it is being achieved in many, many cases. 

Then there is the question of site possession. It is not enough to se- 
lect the site, it is not enough to get the surveys. We have to get ap- 
praisals, options. The lawyers have to be sure the descriptions are 
absolutely correct. We get a check from the Treasury. We pass the 
business through the Department of Justice and the courts take care 
of it. We allow 8 days for that. 

Then a bidding period of 10 days. We must require that. The law 
permits us to negotiate contracts for construction. And in the early 
da} 7 s we did negotiate contracts to expedite the work. We negotiated a 
good many contracts. After some 30 or 40 had been negotiated I asked 
the second agency that came into the picture, the United States Hous- 
ing Authority, to go ahead with its regular process of getting bids, and 
I was convinced that we would get better results by bidding and we did 
get better results and we have gone to bidding now on all of our jobs 
except in extreme cases where perhaps some other delay has cost us 
so much time that we ought to take extraordinary measures to catch 
up on time; but generally speaking we are asking for bids. 

Then 5 days for the award of the contract and 1 day for notice to 
proceed. That is a total of 59 days. 

We haven't achieved that on the average. The average achievement 
now is 71 days, or 12 days over this very tight schedule. 


In order to achieve this record we have to set up in my own office 
in the Federal Works Agency a production-control unit. There is in 
each of the construction agencies a man or a small staff of two or 
three men who keep track of every single operation every day so that 
they know precisely who is working on what and whether or not any- 
body is off his schedule. Once a week all of the representatives of all 
of the agencies and their own production-control men meet in my office 
and there a chart on the wall shows every delay at every stage and 
everybody in that meeting knows precisely where he stands and where 
everybody else stands with respect to his work. 

Now, m the beginning also I found that because it had been 
customary and because usually the practice had been to ask a con- 
tractor Iioav much time he wanted for a job, he would ask for 300 days 
or for 250 days and they actually go that time on contracts. I don't 
see every contract. I spend too much of my time signing papers now 
and I can't see them all, but when we put that on schedule I said: 
''That's entirely too much time ! This is an emergency. We must 
cut construction time in half or even less." 

But we are now getting jobs done in 90 days and up. The average 
is 126 calendar days for the construction of the projects that range 
from 100 to 500 or 1,000 units. I wouldn't take in Kearney Mesa, be- 


cause that is a 3,000-unit job and must be considered separately, al- 
though there, too, the contractors and others have been complimented 
on the speed that they have achieved. 

Now, that is how we have gone at this job. I have said from the 
very beginning that nothing we do will be done well enough and 
nothing that we achieve in the way of speed will be fast enough 
for a defense program. 

I have been sitting for the last couple of years where I ought to 
have some notion of the speed that is required in a defense program. 
We live under the shadow of the Capitol of this country and it is a 
little difficult some times where we have to work through so many 
different people. There is naturally some friction. 

That is on the construction side. We conceive it to be our business 
first to live within the cost limits set for these homes. We do that by 
design by attempting to keep abreast of the changing costs in the 
market ; we do it by as careful planning as we can. We do it by 
working with contractors. 


I shall put into the record a letter that I send regularly to every 
contractor who gets a job, to remind him of the kind of job that he 
is doing and of the need for economy check costs and, incidentally, 
with our policy of firm bidding, you see we are in a much better posi- 
tion to see what our costs are going to be than w T ith the other kind of 

(The letter referred to is as follows:) 

Exhibit C 

Federal Works Agency, 
Office of the Administrator. 

Washington, D. C. 

Gentlemen : You have just been awarded a contract to build defense houses 
under appropriations provided by the Congress of the United States for this 
purpose. Wholly apart from the terms of the contract with which you are 
familiar, it occurs to me that it might be useful to say a word about this 
program in general, and a word about what is expected of all of us by the 
general public. 

The defense program itself grows out of a need for common unity in the 
defense of our country that calls into action the highest patriotism that any 
of us can express. In this particular situation that expression finds it greatest 
usefulness in the maimer in which we do our job, in the honesty that we put 
into it, in the efficiency that we put into it, in the integrity and the skill that we 
put into it. 

We are not just building some more buildings ; we are not just doing another 
construction job. We are in a very real sense contributing to the defense of 
our Nation. Back of this contract lies a finding of fact with respect to the 
need for these houses, determined in the first instance by the Coordinator of 
Defense Housing, in response to requests from military departments of Gov- 
ernment. These findings of fact have been approved by the President. The 
very project that you are working upon has been approved by the President of 
the United States. If nothing else set it apart, this fact alone would seem to 
me to do it. This fact suggests to me that none of us can do less than a first- 
class job, down to the last detail. 

Unless the spirit of this enterprise permeates every division of Government 
having to do with this defense housing program, as well as every single depart- 
ment of a contractor's organization, the job will not be well done. 

It is not my thought here to make a speech about your duty and mine to 
our common country, nor that of the superintendents and men who will work 


upon the buildings. It is my thought rather that if I failed to call attention 
to these special qualities that surround this contract I would be remiss in my 
own duty, and I would be doiug you a disfavor. 

Tbe Congress, the President, and the general public expect us to build good 
houses, of sound materials, in the shortest possible time, and wholly and com- 
pletely without irregularities of any kind anywhere, and without waste and 
without superfluous administration. They have a right to expect this. The 
men and women and children, who, while living in these houses and paying 
rent for them or buying them will themselves be making a definite contribution 
to the defense of our Nation, have a right, too, to expect this of all of us. 

A word about safety. Let us not forget the importance of safety. The 
construction industry does not have too good a record for safety. The problem 
becomes acute when organizations are thrown together hastily or expanded 
rapidly. I am asking to see accident records of all contractors on defense 
housing. Too many men are injured or killed unnecessarily. We start out 
with a clean slate. Let's keep it clean. 

Another word — this time about racial discrimination on federally financed 
defense construction. Special regulations applicable to all Federal Works 
Agency defense housing projects have been issued and printed in the Federal 
Register, issues dated January 9, 1941, and March 21, 1941. These have the 
force of law as applied to these contracts. 

I am taking the liberty to write you because out of several years experience 
as a public administrator I expect the public to make serious, and severe, and 
critical demands upon me, and through me upon you. I want to be in a posi- 
tion to face any group anywhere and say that you and your organization, and 
every other contractor's organization that gets a contract from this Agency to 
build defense housing, have done a job that could not be excelled anywhere 
in this land. The eyes of the world are upon us. Let us do a first-class job. 

John M. Cabmody, Administrator. 


Dr. Lamb. Mr. Carmody, in that connection, I don't know whether 
yon heard Mr. Palmer testify to the effect that in his estimation the 
speed being achieved on private building under the defense program 
exceeded that of public building. Do you agree? 

Mr. Carmody. I don't know. I have made no inquiry into how 
rapidly private building is being done, and I doubt if he is in a 
position to say. I doubt if he has any data to back that statement 
up. I would like to see the specific data. I should like to go into 
any town where one of these projects has been built, and see whether 
or not private industry has built 1,000 homes as rapidly as Ave have. 
We can take San Diego or Pittsburgh — any of them, I don't care 
which one. 

I think the committee would like to have specific cases. We will put 
down for each project specifically how long it has taken and I would 
like to see it alongside of the figures Mr. Palmer will furnish for private 

The Chairman. From what you say you have made a decided im- 
provement over the building time in 1934. Now you are doing it in 
120 days. I think that is remarkable. 

Mr. Carmody. We are not satisfied yet. We think we have a lot 
to do and there are still some weak spots. There are places where 
the delay is too great. They tell me that it has rained, and so forth, 
but when they tell me at the end of the third week it rained, that is a 
little too thin. 

The Chairman. You cover a great deal of territory, don't you. 


Mr. Carmodt. Yes, sir. 

The Chairman. And have a lot of other handicaps? 

Mr. Caemody. Yes, sir. And I will say that many people are talk- 
ing about housing — about prefabricated houses, having them in a pack- 
age and ready for delivery. They completely overlook the fact that 
the job is to put in the utilities and foundations and dig the trenches 
and get the pipes in and get all the water and gas and sewerage 
system and electric service into that property. Those are really the 
big jobs on these housing projects that no one ever speaks of. We 
have to live through that mud period. 

The Chairman. Mr. Carmody, are you satisfied with the degree of 
coordination of housing activities in the various localities? 


Mr. Carmody. Well 3 I would say in general we get pretty good 
cooperation but we have had some difficulties. I think some of our 
difficulties in New Jersey have been brought to the attention of the 
committee. If we were to do what some local people suggest 
we would build no houses at all for defense workers. Now, of course, 
we can't do that. We have to build them. The law requires us to build 
them and the President says they must be built. That is our job and 
we do it. Now, we like to do it with the maximum local cooperation, 
but there are times when that is difficult. 

The Chairman. And, of course, Mr. Carmody, this housing that 
we are speaking of and health and fire and police protection for these 
workers are a part of the national program — they concern the morale 
of the people. 

Mr. Carmody. Definitely so. I have been interested in this, Mr. 
Chairman. A couple of weeks ago, over a week end, I drove up through 
Pennsylvania and out as far as Pittsburgh and along the Ohio River 
to Aliquippa, where we are building some houses. We got on some 
of the projects Saturday night and again on Sunday night, very late — ■ 
oh, half past 8 or 9 o'clock. It was perhaps half past 9 before we left 
there and I was impressed by the considerable number of men and 
women who came there. This was just in the early construction 
period. Some of the foundations were in. I was impressed with the 
considerable number of people who wanted to know all about the 
project, how soon they could move in, and all that sort of thing. 

The Chairman. That is what we have had in the testimony before 
the committee. The first problem of these people is to find a house. 

Mr. Carmody. We think, in general, the projects are needed. We 
think this Boston business and the San Diego business are exceptions 
that could have been overcome by a little more horse sense at the out- 
set, instead of a formula. 

The Chairman. I don't know whether you understood correct^ a 
question I asked you a moment ago. What I meant to ask, if I did not 
do so, is whether you are satisfied with the degree of coordination of 
housing activities in the local communities — the coordination of the 
defense projects. 

Mr. Carmody. I will say this, that except in rases where we have 
been delayed in getting the job started because of failure to get 
cooperation with respect to water and gas and such, in general I am 
not discouraged about it. I think it would be better if some meetings 


were not called to explain what is going to happen, and called by 
people who are not going to do the work. There has been a good deal 
of confusion, but in general, I think we are ironing that out. 

"little green books" 

The Chairman. Have you any recommendations, Mr. Carmody, 
looking toward speeding it up? 

Mr. Carmody. Well, I don't have one with me, but in government, 
you know, we have those little green books — you know, traveling 
books — requisitions 

The Chairman. Yes. 

Mr. Carmody. I think if some of them were impounded we would 
have less trouble. I think there are too many of them at large. It is 
too easy for representatives of many agencies of Government to jump 
into the field, call meetings, give half-baked explanations of programs 
they only vaguely understand themselves and then leave the clean-up 
for those who must come to the locality to build the project. 

The Chairman. And in addition to that there are too many people 
with those books who haven't the background that you have in sales- 
manship and construction, so probably they have to use them a little 
bit more than you do, Mr. Carmody, in order to learn what it is all 

Mr. Carmody. Maybe so. 

The Chairman. Dr. Lamb? 


Dr. Lamb. I would like to ask a couple of questions. The first, Mr. 
Carmody, is, whether you know about the Camden housing situation, 
particularly with respect to what the committee heard called at Trenton 
"the Camden plan," and whether that arrangement will take in those 
groups in whom the committee is particularly interested — that is to 
say, the migratory or out-of-State defense workers who have moved 
into the Camden area for defense jobs. 

Mr. Carmody. Let me tell you a little story about that. 

In 1933 I was chief engineer for the Civil Works Administration. 
At that time Lawrence Westbrook was State administrator in Texas, 
As part of my job I came to know all of the State administrators, 
and I came to know something about their work and sometimes 
aBout the special jobs they were doing. 

Because he had been interested in public housing, Lawrence West- 
brook developed in Texas a project known as Westlake. He talked 
a great deal about Westlake. He built some inexpensive homes out 
in an area where people could have fresh air and freedom. I was 
interested. I was intrigued but not sufficiently to go to Texas to study 
it. As a matter of fact, as time went on and I went on to other 
responsibilities, his project went completely out of my mind until 
one day I came up here to the Senate. I dropped in upon a meeting 
of the T. N. E. C. 1 and there Lawrence Westbrook was presenting what 
looked like an amplification of the so-called Westlake project. 

I was interested again. I was invited by the chairman to sit with 

1 Temporary National Economic Committee. 


him. I listened for perhaps 2 hours to his presentation of that project. 
I had other business and ]\\< program went out of my mind again. 

When this program started Lawrence Westbrook was regional 
director in New Orleans and in the New Orleans area for W. P. A. 
He came into my office one day and said: 

"John, this housing business intrigues me and I would like to find 
out if there is any way by which I can fit into the program and get 
something done about this program that. I myself have been working 
on for a long time. I have given it a good deal of thought." 

In the meantime he had been trustee for four colonies that we set 
up in the early F. E. R. A. days and they were in Arkansas and 
Cherrydale in Florida and two others, and Matanuska, Alaska. I 
said : 

"Lawrence, a program of this character is big enough, it seems to 
me, to warrant sound experiment somewhere in it — what it is I don't 
know but let us see if we cannot work it out." 


Within 2 days John Green, who is president of the ship workers — ■ 
I don't know the formal name, 1 but I remember John in the N. li. A. 
days when he organized the shipyards — came in with a committee of 
ship workers and they asked whether there wasn't some plan by which 
they could work into this program some arrangement by which they 
could perhaps buy the houses or engage to buy them or do something of 
that kind. 

I listened to their story and I suggested that they talk to Law- 
rence Westbrook and that he talk to them. 

He went up to Camden and that committee came back and with 
the committee came some architects and I think perhaps a lawyer, 
because committees are like administrators — they usually have a 
lawyer around them — but the net result was a go-ahead signal for 
Lawrence Westbrook to work out in the Camden area an arrangement 
that would be satisfactory to the ship workers, provided that we 
kept our costs down and that we did everything else that we would 
do for any defense housing project. 

That led to the so-called mutual ownership arrangement. I think 
that all of the details are not yet wholly worked out. I am sympa- 
thetic with that sort of thing if it can be done — if we can be sure of 
financial stability and soundness. I am more particularly impressed 
by it because of the experience that I had as Administrator of the 
Rural Electrification Administration. I don't know how much you 
men know about the long fight that farmers made to get electricity 
at reasonable rates, but at any rate after many many years not 10 
percent of all the farmers of the United States had electricity in 1935. 

At that time, urged largely by Morris L. Cooke, another line engi- 
neer whom I have known for 20 years and who made the giant power 
study that was made about L924 when I was in the mining industry 
in West Virginia, the President gave his support to a measure for 
setting up the rural electrification program. 

1 Industrial Union of Marino and Shipbuilding Workers of America. Mr. Green, as a 
witness at the committee's hearing in Trenton, N. J., on Juno 28, 1941, discussed such 
an arrangement in some detail. See testimony, Trenton hearings, p. 57-16 ff. 


Senator Norris, John Rankin, and many others got behind the bill. 
Out of that came the R. E. A., which made it possible for the Federal 
Government to lend money to build rural lines. Now, at the time the 
program was set up I have a feeling that those who began to admin- 
ister it felt that if the terms on which the money could be made avail- 
able were satisfactory to the private companies they would borrow that 
money and extend their own lines into the farming areas. 

Negotiations looking toward that were carried on with a good many 
companies, and I think at one time the program might have gone off on 
that foot had it not been for the fact that Mr. Cook was not satisfied 
with the rates that those companies said they would make for 


I think when he heard the rates he was displeased and said that 
something else must be done. The R. E. A. then turned to cooperatives. 
It had every reason to turn to cooperatives because the very act itself 
says that preference shall be given to cooperatives and to limited- 
dividend companies and to nonprofit organizations to use this money. 

So Mr. Cooke brought in Boyd Fisher, who had had a lot of experi- 
ence with cooperatives in Ohio and who had a considerable knowledge 
of what the Farm Bureau and other farm agencies were doing. It's 
a long and inspiring story, but the cooperative way won through. 

I don't have the figures, but I daresay perhaps 30 percent of all the 
farms in the United States are electrified, almost wholly through the 
development of electric farm cooperatives made up of farmers them- 
selves, organized by themselves and managed by themselves as trustees, 
with the understanding that every dollar they borrow will be returned 
to the Federal Treasury, and that they, at a definite time, will become 
owners of the properties. 

Now, the act itself provided that the amortization period might be 
25 years. Before I became Administrator Mr. Cook had set that at 
20 years and we retained that for 2 years, until there was terrific pres- 
sure in the country to change the period of amortization to 50 years, 
which I thought would destroy the integrity of the program and per- 
haps lead many people to believe that they would not have to return 
the money ; so we went to the 25-year period. 

But my point is that here is a pattern that we ought not to lose sight 
of in our whole housing business. 

I am not prepared to say today that that is the way that all public 
housing should be done. I do feel that this country is big enough, 
this program is big enough, and there are enough intelligent people 
in it to warrant our experimenting with some of these projects — ex- 
periment from the beginning and not after the whole program is over. 

Dr. Lamb. I have only one further question, Mr. Carmody, and 
that is 

Mr. Carmody. Does that answer the question? Or did I sajr too 
much ? 

Dr. Lamb. I don't think so. 

The Chairman. It was very applicable. 

Mr. Carmody. At this point I want to tell you something a fellow 
asked me. He asked a question the other day and I gave him a very 
very long answer and at the end I said : 


"I gave you that long answer deliberately because I wanted you 
to forget the question you asked," and he said: 
"I have forgotten the question." 


Dr. Lamb. Well, I remember my question, but so far as the record is 
concerned, I am satisfied with your answer. 

As you know, the committee is very much interested in the migra- 
tion of workers, for example, to shipbuilding projects. One of these, 
in which the chairman is especially interested, is in Vallejo, Calif., 
and we have been told that the pressure for housing there is very 
heavy, and that possibly with the exception of San Diego the situation 
is as serious there as any other place on the coast. 

It was impossible for the committee to hold a hearing in the bay 
area at the time of the San Diego he aring, but we had enough evidence 
of pressure to justify going there and holding a hearing had it been 

Have you any statement that you would care to make with respect 
to the situation there? Is it correct that a location was made some- 
time since for housing in that area ? 

Mr. Carmody. Well, I don't have the complete Vallejo record be- 
fore me but I can say that I have been aware of that pressure from the 
very beginning, coming even from Secretary of the Navy Knox, who 
has talked to me about it on more than one occasion. 

I am less pleased with our accomplishment in Vallejo than in any 
other single place. We fooled away a great deal of time to study 
demountable houses. There has been a big argument as to how prac- 
tical demountable houses are. We had figures from a good many 
people who said they could build these houses and then when the 
time came to build them they backed out on us and we had to start 
over again. I am thoroughly dissatisfied with our whole accomplish- 
ment in Vallejo up to this time. But I think we are on a new basis now 
out there and I am satisfied that within a comparatively short time we 
will have a record out there that we are not ashamed of. But I am 
frankly ashamed of what we accomplished, or what we failed to accom- 
plish, over a period of several months out there. 

There has been a lot of conversation about demountable houses 
and how demountable they are, and so on, and so forth, but this is 
a fact so far as we can gather in talking to lots and lots of people : 
Nobody had ever built demountable houses before — nobody had ever 
built a demountable house project and allowed people to live in 
it and then torn it down and erected it somewhere else. 


Now, when I made that statement before a large group of prefab- 
ricators one of them ran out to the edge of the District here and tore 
down a house that he had built a few days before and moved it a 
few hundred feet and then sent for me to see it. 

Now, I think the men who are undertaking to do that are serious 
but they just hadn't had enough practice and enough experience and 
none of them had had enough large-scale business. I found that most 


of the advocates of prefabricated houses were not using them them- 
selves in their own business. You know how it is — tell the other 
fellow to do it. 

We have done this: We have not only worked with all of these 
men — well, let us go back a little ways and let us be frank. I got a 
good many complaints from pref abricators in the early days that some 
of our agencies had refused to work with them and didn't want to see 
prefabricated houses used. 

After a while it seemed to me that perhaps we were putting as many 
stumbling blocks in the way of these men as we could, rather than 
trying to help them find their way to a better procedure. 

I called a meeting of them — as many as would care to come, and I 

"Gentlemen, you want to sell us parts of houses f. o. b. factory. 
We are not concerned about buying parts of houses f. o. b. factory 
anymore than we are interested in buying our tires in Akron and our 
wheels in Detroit and our automobile bodies in Janesville, Wis. We 
want a car delivered to the door that we can get in and drive ; we want 
a house from you house builders that we can put tenants in and let 
them start to live there. Now, when you think in terms of delivering 
us a house, or, as we call it, a turn-key job, we will be glad to do 
business with you." 

It came as a shock to them. They said : 

"We will have to hire somebody to build the utilities," and I said : 

"If you don't, we will." 

And then they told us about the labor problem and I said : 

"You want us to hold the bag there too." 

I said, "Now, let us have this understanding, let us be practical. 
You are in the business of selling the houses. It is our job to buy 
them. We have no other interest in this except to buy them ready 
for people to live in. When you are ready to sell them on that basis 
we are ready to buy them on that basis." 

It took 3 or 4 weeks or a couple of months for them to come to their 
senses, but they have, and we are now buying large quantities 
of houses that we think are quite satisfactory, delivered on the job, and 
we walk into them when they are done. They have all the responsi- 
bility from the time they get the order until they deliver the houses, 
as they should have, and as every other manufacturer and fabricator 
ought to have. 

Now, the demountable houses we are not sure of; we are not sure 
that we are doing the best we can. We are using the best brains that 
we can find in the industry to develop really demountable houses with 
the greatest possible salvage value. 


Dr. Lamb. I find there is another question, and this is the last. It is 
with respect to our maximum construction costs for projects. You do 
fix an arbitrary maximum construction cost, do you not? 

Mr. Carmody. The law fixes $3,950 as the maximum. I think I know 
the reason for that. I think that the members of the committee, and 
perhaps the Congress, felt that if there was not a maximum, somebody 
would get a $12,000 or $15,000 house — and I wouldn't say he wouldn't — ■ 
with, you know, 100,000 houses being built, and 300 projects, and 


thousands of people handling them. I wouldn't say he wouldn't 
have got it, and it would be there before we knew about it. But he can't 
do it now. That is the maximum that we can spend. 

Dr. Lamb. But your offices fix an arbitrary maximum below the legal 
limit, do they not ? You mentioned earlier a shelter cost of $3,000. 

Mr. Carmody. Yes, sir ; we try to stay under the $3,000. There are 
cases in which we must go over that. On a firm bid basis 14,000 dwelling 
units figure out $2,687. The cost of 950 fixed units in other places 
averaged $2,760. Now, I can't tell you where the 950 are, but I have 
even later figures than that, and this is what we do, Doctor: 

Before the money is allocated for a project I have to see a break-down 
showing what the money is to be used for, and everybody in our shop 
knows if that figure is getting up around the $3,000 figure I want to see 
somebody about it, I want to know whether that is a trend or whether 
that is a spurt in the costs. 

But I think perhaps in some cases we have been a little too con- 
servative. We didn't know when we started this program of $150,- 
000,000 what these costs would be. Xobody had built houses of this 
character for this money before. It was very conservative estimat- 
ing, but it was there, it was in the law, and I felt that we must 
stick to it because if we started with run-away costs immediately we 
would be sunk and we would be coming back for deficits. Even as it 
is, some of our projects have run over ; they have overrun considerably. 
You know it takes pretty fast acting on a construction job to see that 
you are not exceeding your estimates, and at the outset we didn't put 
enough men on the jobs, enough experienced men. We have them 
now, and we have a better control. 


Dr. Lamb. You say you have been exceeding the estimates, but that 
you are still well below the legal limit ? 

Mr. Carmody. Oh, yes; we are below the limit. The $3,000 ($3,500 
when masonry construction is used) is average. In spite of overruns in 
a few places, our average cost is still under the legal limit. We have not 
built anything in excess of the $4,750. We may have to in Alaska. I 
understand that Colonel Eyster testified before the Public Buildings 
and Grounds Committee the other day that the costs in Alaska may 
run 60 to 80 percent higher, and that some of the houses may cost 
$6,000 if they go into the interior. 

Dr. Lamb. But, in general, you think it is a good idea to stay well 
within that limit ? 

Mr. Carmody. I think so. I think, Dr. Lamb, that we should make a 
little resume of all our costs, and we ought to see if there are things that 
we could put into a house and stay within these costs, that logically and 
legitimately belong there. 

If, for instance, we have cut down the storage space a little too 
much; if we could allow T a little more bedroom size here and there; 
if, as the chairman suggested, we might put up a few houses with an 
additional bedroom over and above our present top limit, it would 
be helpful. I think we ought to do it. I think that we have reached 
the point now where the next step for us to take as sensible people 
is along those lines. 


On the other hand, I want to remind you that I spent a bad 
couple of hours before the Rules Committee explaining—not ex- 
plaining, they said I didn't explain — but talking about "frills" and 
things of that kind, you know. 

Dr. Lamb. Yes ; I remember that. That is all. 

The Chairman. Well, Mr. Carmody, I want to say to you that I 
haven't met a Member of Congress yet who didn't think you were 
doing a fine job as the head of the Federal Works Agency, and I 
am more impressed with the job you have done after your state- 
ment this morning, because I want to say for the purpose of the 
record you did a fine job this morning, too. 

Mr. Carmody. Thank you very much, Mr. Chairman, and members 
of the committee. But no matter what we do we won't do enough 
and we don't do it fast enough. I am sure of that. 

The Chairman. Well, when you have finished everybody will know 
that you have done a good job. 

Mr. Carmody. Thank you very much. 

(The following material was submitted by the witness and accepted 
for the record:) 

Exhibit D. — Housing Project in South Boston for Workers at Fore River 


[Copy of telegram] 

F W Washington, D. C, 159P—May 17, 1941. 
Mr. Joseph Larkin, 

Vice Pres., Bethlehem Steel Corp., Bethlehem, Perm.: 
On November 20, 19 10, the President authorized this Agency to construct 1,000 
homes for defense workers in the Fore River shipyards of the Bethlehem Steel 
Corporation. We were advised by the Coordinator of Defense Housing that the 
need for these homes was so urgent that rather than take the time to construct 
a new project we should purchase the housing project that had been built for 
slum clearance in South Boston. Despite the fact that this slum-clearance project 
was on very expensive land and some distance from the plant we acquiesced in the 
Coordinator's suggestion in order to cooperate in every way with the national- 
defense effort. The purchase was consummated, and in March the Boston Hous- 
ing Authority, acting as my agent, delivered to your plant 5,003 registration 
blanks to be distributed to the workers who might be interested in moving into the 
new homes. None of these blanks were returned to the Boston Housing Au- 
thority. On April 10 the Authority supplied your plant with 16,000 application 
blanks, after Mr. Edwin C. Geehr of the Fore River plant agreed to post bulletins 
announcing that the homes were available and to distribute the application blanks 
among the workers. More than a week passed, and no returns were received. 
Then the Boston Housing Authority itself distributed some of the blanks and 
received more than a hundred applications. Feeling that there must be some 
difficulty resulting from the manner in which you were distributing the blanks, we 
offered to open a booth across the street from the plant so that the workers 
might receive information about the project. At the earnest request of Mr. 
Geehr we postponed that move and Mr. Geehr offered the Boston Housing Au- 
thority office space in a building in the Fore River plant and he also offered to 
send out applications through the mail. We were told that you were unwilling 
to supply us with a list of your employees but that if we would pay for the 
clerical help you would have the envelopes addressed and the application blanks 
mailed. We agreed to this but were later told that the matter would have to 
be referred to the home office in Bethlehem, Pa., and that we might therefore 
expect a delay of a month or more. Such delay seems to us unjustified and 


the Boston Housing Authority again started distributing the application blanks 
directly to the workers. When this was done Mr. Houghton of the Fore River 
plant called the Housing Authority and said that it would be unnecessary after 
all to take the matter up with the home office and that the applications would 
be sent out by mail if the Government bore the cost of the clerical work. 
After some time the applications were mailed to those workers who lived 
closest to the plant, although it was our understanding that the greatest need 
for this project was for the workers who were being inconvenienced by long 
trips to and from work. After approximately 2 months of effort on our part 
to make these homes available to your workers, and thus to help that part of 
the national-defense effort on which you are working we have received only 400 
applications from workers in the Fore River plant. We do not feel that we are 
justified any longer in holding these homes vacant when so many other people 
in the area also need better housing. For that reason I have notified the 
Boston Housing Authority that they may now accept as tenants in this project 
defense workers in other plants also engaged in important defense work. I 
am disappointed Joe because frankly we went far out of our way to make 
these homes available to your employees to snap up the defense program at a 
crucial shipbuilding point. I am notifying you of this decision so that you 
will be informed that any housing difficulties which your workers may be 
enci untering are in no way the fault of the United States Government, because 
of these special efforts to assist you. 

John M. Carmody, Federal Works Administrator. 

[Copy of telegram] 

WUL20 393— CD NEW YORK, N. Y., May 22-539 P. 
John M. Carmody, 

Federal Works Administrator: 

Reply to your telegram of May 17 has not been made earlier because I 
wanted to make a complete personal investigation into the whole situation 
which I have done. My findings are as follows. We were in no way responsible 
fir the survey winch revealed the supposed need for 1,000 homes for defense 
workers, nor for the decision of the Coordinator of Defense Housing that the 
need was so imperative that time could not be taken to construct housing but 
necessitated the purchase of an existing slum-clearance project in South Boston. 
With reference to the statement that there were delivered to our plant 5,000 
registration blanks for men who might be interested in moving to the new 
homes, the number of registration blanks so delivered was about 500 and not 
5,000. Such blanks were received at the plant only after repeated inquiry by 
our plant people for information from the Boston Housing Authority. Some 
of these 500 application blanks were distributed to our employees and the others 
posted on our plant bulletin boards. Early in February 1941. there were deliv- 
ered to us about 12,000 qviestionnaires, which questionnaires we mailed to every 
individual employee on our pay roll at his home address. These were mailed 
in the presence of a representative from the Boston Housing Authority. The 
answers to these questionnaires were to be mailed directly to Sumner K. 
Wiley, director region I, United Slates Housing Authority, 18 Oliver Street, 
Boston, Mass. In April 1941, 16,000 application blanks were received from the 
Boston Housing Authority. Some of these application blanks were posted upon 
plant bulletin boards, and between April 29 and May 6 others were mailed to 
each and every employee of our Fore River yard in the presence of a repre- 
sentative of the Boston Housing Authority. 

In addition, office space in the yard was provided by us to a representative 
of the Boston Housing Authority who was stationed there for 3 weeks and was 
given every possible assistance by our people. Replies to the application blanks 
were requested to be made direct to the Boston Housing Authority, post office 
box 2037, Boston, Mass. My investigation shows a continuing record of co- 
operation on the part of our plant people with your representatives. 

I am very appreciative of the interest you have personally taken in respect 
to this housing question. With my kindest regards. 

J. M. Larkin. 

S : 00 A. M., May 23, 1941. 


Exhibit E. — Housing Project in Baltimore 

[Copy of telegram] 

Washington, D. C, June 28, 19',1- 
Glenn L. Martin, 

Glenn L. Martin Co., Middle River, Md.: 
On representations to the government that a great number of employees of 
the Martin Co. were eager to find homes in Baltimore we did not take time 
to build a defense housing project — instead we bought Armistead Gardens and 
reserved 600 of its 700 homes for Martin Co. workers. You were advised on 
May 15 that 200 units were ready for immediate occupancy and that the others 
would be available in a short time. Your company was urged to cooperate 
with the Federal Works Agency and its agent, the Housing Authority of Bal- 
timore City, to the end that Armistead Gardens be tenanted as quickly as 
possible. We have made every effort to inform Martin workers that housing 
is available, but for reasons we are unable to understand in face of your 
earlier representations of need through coordinator of defense housing we have 
not received from your company the cooperation expected. The result is that 
today there are nearly 300 vacancies in Armistead Gardens. Because of this 
serious situation I have directed the housing authority to open the project to 
qualified defense workers employed by other companies in the Baltimore area. 
Meantime I am curious to know whether the apparent lack of enthusiasm on 
the part of your organization in getting Armistead Gardens fully tenanted with 
your own workers is due to the fact that the Government did not elect to build 
defense homes on your site. You are aware that work is being pushed on 300 
additional homes and that an allocation has been made for 750 others to be 
constructed in the immediate vicinity of Armistead Gardens. We ought to 
decide definitely and promptly whether to go ahead with this construction or 
stop it. It was started to provide homes for your workers brought in because 
of the expanding production program. In the face of your failure to fill 
Armistead Gardens are we to understand your housing needs are taken care of? 

John M. Carmody, 
Administrator, Federal Works Agency. 

Exhibit F. — Correction of Newspaper Report of Statement on San Diego 

Housing * 

[Copy of telegram — -Day letter] 

July 22, 1941. 
Lt. Max I. Black, 

Commandant's Office, 

Eleventh Naval District, San Diego, Calif.: 
My attention has been called to newspaper references to statement I made before 
Public Buildings and Grounds Committee of the House of Representatives in con- 
nection with its inquiry into need for additional defense homes. I am reported to 
have said that San Diego has been overbuilt. What I said was that under terrific 
pressure to make accommodations available for single men we completed a 750 
unit dormitory in 33 working days only to find that apparently it was not needed. 
I am informed that there have been only 10 applications for accommodations and 
no occupants. It is further reported to me thai as a result of a survey 1,000 rooms 
are available in private homes for single men. My statement to the committee was 
not intended to discourage building of homes where they are actually needed but 
to discourage repetition of recommendations for dormitories or other structures 
when they are not actually needed for defense purposes. We understand our man- 
ager, Mr. Voight, has been working in full cooperation with your committee and 
with other local officials to do everything humanly possible to meet housing needs. 

1 See enclosure in Lieutenant Black's letter, p. 6893. 


Ive him 

We appreciate your cooperation and shall thank you for any help you can 
to salvage what we can out of this dormitory investment. 

John M. Carmody. Administrator. 

Exhibit G 

Dates in construction process, first Public Works Administration Housing 

Division projects 



Date construction 



1. Techwood Homes, Atlanta, Ga., H-1101 

Apr. 12,1934. 




Dec. 3, 1934.. 

Feb. 12, 1935 
Apr. 22, 1935 
June 18, 1935 
July 15, 1937 

Oct. 16, 1935. 
July 1, 1935.. 

2. University Homes, Atlanta, Ga., H-1102 

:i. Cedar-Central Apartments, Cleveland, Ohio, H-1001 

4. Lockeneld Garden Apartments, Indianapolis, Ind., 


5. Riverside Heights, Montgomery, Ala., H-2201 

6. William B. Faterson Courts, Montgomery, Ala., H-2202 

Mar. 17,1937 
Mar. 15,1937 
Feb. 16, 1938' 

Oct. 23, 1936 
Nov. 10, 1936 

1 Date initial occupancy. Contractor did not complete construction. 

Note.— Demolition work required on these projects was performed between date of allotment and date 
construction started as reported above. 


Miss Dublin. Mr. Chairman, I should like at this time to introduce 
into the record certain material received from sources not represented 
by witnesses before the committee. 

The Chairman. You may proceed. 

Miss Dublin. Mr. Chairman, as exhibit 1 I offer for the record a 
paper entitled, "How to Bring Forth an Ideal Solution of the De- 
fense Housing Problem," written by Waller Gropius, chairman of 
the department of architecture, Harvard University, and Martin 
Wagner, assistant professor of regional planning, Harvard Univer* 

(The paper referred to above is as follows:) 

Exhibit 1. — How to Bring Forth an Ideal Solution of the Defense Housing 

Problem ? 

by walter gropius, chairman of the department of architecture, harvard 
university, am) martin wagner, assistant professor of regional planning, 
harvard university 

In answering the question, "How to Bring Forth an Ideal Solution of the 
Defense Housing Problem?", the authors of this paper are fully aware of the 
fact that their advice for a more ideal solution at a time when defense pro- 
duction is in full swing might come belated. Iron-clad necessities have already 
pushed forward solutions of provisional character. But, since the acute want 
of belter housing cannot be considered as a mere wartime emergency problem 
ami will arise again as a post-war demobilization and rehabilitation problem of 
firsl rank, we should like to scrutinize it also from the latter point of view. Of 
course, suggestions regarding an "ideal solution - ' must certainly entail measures 
more complex and radical than those which have been taken up to now. 
60396— 41— pt. 17 18 




(1) While food, clothing, and other everyday goods can be bought by the 
average man at reasonable prices adapted to his income, a decent, up-to-date 
dwelling is out of reach for the poorer classes. 1 Although 45 percent of the 
capital given by the Government for Federal Housing schemes is a subsidy with- 
out any return* the rent for these dwellings is still too high for the average income 
of $1,0*00 to .$1,500 per family. The reason why the prices for dwellings, in spite 
of public subsidies, are out of proportion compared with other commodities for 
living is the fact that the building market, the most complex in its structure, 
has not yet been absorbed by the machine and that it is less efficiently organized 
than the industry. One glance at the enclosed diagram 2 reveals that the increasing 
wages for the still large amount of handwork involved in building have doubled 
the price of dwellings during the same period in which the price for the Ford car 
could be halved. No doubt the quantity-production method which has produced 
the low-co-t automobile could as well be applied successfully for more efficient 
low-cost houses. But the conditions for prefabrication have not yet been pre- 
pared sufficiently. The lack of coordination in the building field has delayed the 
issue, causing serious disadvantages also for the present defense crisis in 

(2) The sudden and spasmodic influx of a large number of workers into 
organically grown communities must automatically cause symptoms of illness 
against which all the sound parts of the body will react with measures of 
defense. It is therefore quite understandable — 

(a) that landlords and house owners oppose new defense housing schemes 
of permanent character in fear of seeing their local housing markets deranged 
after the war has passed ; and 

(h) that municipalities see their budgets thrown out of balance by being 
burdened with additional expenditures for schools, police, hospital service, and 
so forth, during the war boom and with relief costs of all kinds when this 
boom is over ; and 

(c) further, all brackets of the working class will resent seeing the "labor 
supply depots" of their communities inflated and thus their own chances to 
get jobs and decent wages threatened when the war industry is forced one day 
to lay off masses of workers. 

For all these reasons we do not believe that the building of new permanent 
dwellings of the usual type and shape represents the ideal solution of the 
housing problem in defense regions. We hesitate to recommend such a hous- 
ing policy, even in cases where newly built dwellings of permanent character 
are supposed to replace later on slum dwellings, because we doubt whether 
the past housing policy of clearing the slums — intended to pour new wine 
into old bottles, so to speak — has been on the right track toward solving the 
housing problem at all. Experienced housing experts and town planners all 
over the world emphasize that any housing policy ought to start from a survey 
on permanently available working places, for it is the income-ensrendering 
working place that generates rent which people can afford to pay for newly 
built dwellings. If the income-producing working places are not insured for 
the same life span for which the dwellings are built, ghost houses and ghost 
towns will be the logical consequence of such a disintegrated housing policy. 
This is exactly what happened in the past and what has mainly caused the 
development of blighted areas and slum districts in all the larger and smaller 
towns, as well as in the agrioultui'al regions. Land developers, contractors, 
and housing experts often did not realize that the life span of income-produc- 
ing working places in our period of fast and vast technological progresses is 

1 From Bulletin No. 18 of the National Housing Committee (figures given are for the 
State of New York) : 

Rent (per year) 

Food (^er year) 

Clothing (per year) . . . 
Furniture (per house) 











Percent dif- 




No change. 

See footnote on opposite page. 

N AT M ) N A L I ) E F K N S E M I G RAT I O N 


by far shorter than that of the dwellings which are supposed to live for 
25, 50, or even 100 years. The incongruity between the life span of working 
places and that of dwelling places is one of the most serious causes for obso- 
lescence in housing and for waste of capital spent for new, permanent houses, 
built for the working classes. 

But, apart from this incongruity, there is another serious drawback to be con- 
sidered in regard to the housing of defense workers in the usual permanent build- 
ings. In the race with time which usually occurs when a war boom starts, 
governmental agencies or private contractors are in most eases unable to keep 
pace with the rising want for new dwellings if they try to supply this demand by 
building new, permanent houses when these are especially "made to order," as 
usual. The following evaluation of war housing during the first World War, 
where about 360,000 workers had to be rehoused, gives a clear evidence of this 
fact : 

1. Private builders cared for about 30,000 workers, or about 8 percent of the 

2. Governmental agencies cared for about 46,000 workers housed in new dwell- 
ings, or about 13 percent of the total. 

3. The home registration service placed in existing dwellings about 100,000 
workers, or 28 percent of the total. 

4. Through transportation improvements in the environments of plants about 
184,000 workers, or 51 percent of the total, could stay in their homes and travel 
to work. 

(From Conference on the Expansion of Industrial Communities, University 
of Michigan, November 29, 30, 1940; p. 9.) 

Tiiese figures and the fact that many of the housing projects planned and built 
by the United States Housing Corporation were not ready to be used until 3 months 
after the end of the war show impressively that the present methods of building 
permanent houses for the working classes cannot keep pace with tlie need, either 
in quantity or in time. 

Although the authors have not reliable figures at their disposal for the defense 
housing need in the present war, they assume that the housing shortage in locali- 
ties for defense work surpasses all ligures of the first World War, and this pre- 
sumably all the more since the defense orders have doubled and tripled in this 
time as compared with 1917-18. 


Our present technological age tends to uproot working places, shifting them 
from town to town, from region to region, and from State to State. This fact 
has become especially apparent in the last two decades in agricultural as well 
as industrial regions and begins now to endanger the working places in almost 
all the bigger and smaller towns. This process of technological new orientation 
in industry and agriculture seems not to be slackening. On the contrary, being 

2 The diagram referred to above appeared in American Architect and Architecture, February 1938, accom- 
panying an article by Dr. Gropius entitled "Toward a Living Architect." As reproduction of the diagram 
in this volume was not feasible, the information it contained has been restated in tabular form, as follows: 

Average cost of family dwellings 

Wholesale building material 

Living cost 

Automobiles, Ford 








From the article which accompanied this diagram, the following explanatory material 
has been excerpted : 

"In 1928, I discovered in this country a most illuminating diagram, roughly comparing 
the trend of prices for building and for automobiles between 1913 and 1926. It shows 
the r markable fact that, within the same period i 13 years), the average costs of building 
were d ui led. whereas tie price of the Ford car was halved. The greater proportion of 
hind work involved in building increased the price in accordance with the increasing labor 
eosts. Refinement of mass production methods, on the ether hand, considerably lowered 
the price of automobiles. A decenl dwelling became unattainable tor the poor, yet the car 
became an everyman's tool. The up-to-date completion of the diagram shows thai the price 

of the average car has steadily declined, whereas the cosl of the avi rage dwelling has I rj 

only slightly lowered since 1926. This diagram reveals that our building methods being 
far behind the times — aro not fit to solve the problem." 


in its first stage only, it might easily get a new impulse when the whole impact 
of new post-war world economies may be felt in its full strength in this country. 
In such a period it may not he wise to build dwellings of a 50-year life span 
for men whose working places may last perhaps only for 5 years. It seems to us 
that a new type of house is urgently needed which is not definitely fixed to 
the site during its whole life-span but could be dismounted and built up again 
in locations where shelter facilities are lacking. Dwellings of the future should 
be made more movable in order to follow the migrating working places. There 
seem to be neither technical nor financial reasons serious enough to hinder the 
designing and building of fully serviced demountable houses. We have the 
necessary technical means today to mass-produce such houses in factories speci- 
fied for high quality for perhaps only half of the cost of the present permanent 
"made to order" houses. These dwellings must by no means be provisional 
in character regarding their workmanship and size. On the contrary, in all 
their details they should comply with up-to-date requirements of technique 
and equipment. They have to be of light but durable construction, alterable, 
time-saving, economical, and highly efficient for their occupants. Man and the 
various functions of his life at home — living, sleeping, bathing, cooking, and eat- 
ing — are to be the basis determining the type and appointments of the dwelling. 
The criterion is the ratio of expense to living value to be measured from the 
degree of success attained in reducing the onerous features of every-day life 
to a minimum. Being built as demountable units, such factory-built houses 
would have also the advantages of being mobile — of being put on stock — of 
being bought and sold second hand and third hand ; hence, of being produced 
and traded as a commodity. As long as the house was inseparably fixed to the 
noncommodity "land," it could not be traded as a commodity. 

We are even inclined to go a step further, advising that schools, hospitals, 
and shops composed of standardized room units be prefabricated also and be 
put on stock in order to be shifted to all those places where they are needed. 

If such an adaptable system of prefabrication had already been developed 
in the past, no acute housing shortage could have arisen anywhere caused either 
by dislocation of working places or by sudden defense measures which call for 
extension or contraction of existing residential quarters. That a steady demand 
for movable houses tridy exists even in peacetime is evident from the House 
Report No. 360 — of the Seventy-sixth Congress — on Interstate Migration. Accord- 
ing to the figures given there, not thousands, but hundreds of thousands, of mov- 
able shelter units seem to be needed in the present period of economic transition. 


In addition, modern mobilized warfare has its bearing not only on arms but 
also on buildings for military purposes. In the present time of total warfare the 
civilian and the military way of life are no longer strictly separated as in the 
past. The battle lines are no longer front lines. The whole hinterland of the 
country has become a battlefield. These and other changes indicate that the types 
of shelter for both military and civilian purposes begin to assimilate each other 
in purpose, shape, and function, for — 

( 1 ) Modern warfare exerts so much strain upon the body and the nerves of 
shock troops, aviators, parachutists, etc., that they ought to be housed at least 
as comfortably as civilians. (Compare the "villas" of the German aviation corps 
with the old-fashioned mass encampments, where fiO or more persons are forced to 
share 1 room in a barrack.) The housing provision of the modern army should 
be based on smaller units, fully serviced, that would fit small groups of a few 
men only. Such units could correspond more or less in size and type with the 
dwelling for a civilian family. 

(2) Aerial bombardment constitutes great danger for civilian settlements as 
well as for military camps. Therefore, for both of these, adequate shelter pro- 
vision points to adopting a more decentralized pattern of shelter that ought to be 
built up of small, detached, one-story units rather than of highly visible and 
therefore vulnerable barracks which are more easily hit and difficult to camou- 

(3) Steady changes in othe organization and location of military formations — 
especially if they are built up for defense — call for interchangeable and movable 
shelter units which can be taken from stock and be put back on stock. 

Such a system of building movable houses to be assembled or dismounted at 
will, for the needs of the Army, the Navy, and the working classes combined, 


would nut only save time in building up military encampments and defense settle- 
ments but would also save money for the taxpayer by putting 80 to 90 percent 
of the building job into the factory, where it can bo finished more efficiently and 
independently of weather conditions with greater speed and loss cost, it would 
enable authorities in case of any emergency t,, call for standardized shelter units 
from — 

(a) Their own stocks; 

(b) The stocks of manufacturers ; 

(c) The stocks of second-hand traders; or 

id) Private owners from whom they can be bought or requisitioned. 

According to the census made by the Department of Commerce in October 1940, 
about 4 to 5 percent of all the dwellings in the United States are empty and 
these cannot be used as they are permanently fixed to their locations. If they 
could be dismounted and be put up again for reuse in oilier regions, where a 
shortage of dwellings exists, a sudden crisis could be considerably lessened and 
idle capital be profitably reinvested. 

The importance of such a unification and standardization of military and 
civilian shelter in times of war can drastically be illustrated by the recent events 
in war-haunted regions of the European countries — particularly in England — 
where thousands of permanent houses had to be evacuated and thus made useless, 
while their inhabitants could not find adequate shelter and community facilities 
in other towns or rural regions. And similar conditions arise in peacetime, caused 
by hurricanes, floods, earthquakes, epidemics, drought, or total unemployment. 
In all such catastrophes the urgent call for shelter could be satisfied only by 
movable houses, quickly assembled, and provided by governmental agencies. Thus 
we believe that the preparation for wartime shelter should be linked to peacetime 
shelter provisions in order to avoid a desperate shortage in either case. In 
creating such a flexible system of shelter, one should by no means rely only on 
mere private initiative or on the so-called free play of forces. The times have 
passed where automatic solutions following supply and demand of the free mar- 
kets are to be considered the only means of bridging an acute crisis. It is up to 
the Government to insure against the hazards of sudden emergencies and, by pre- 
paring well in advance, make the country shock proof. 


Although all the necessary technical means seem to be available for construct- 
ing movable shelter, the building industry has not yet been able to bring a house 
type on the market which could satisfy the many requirements necessary in 
respect to construction, price, shape, and flexibility. The explanation for this 
shortcoming has clearly been given in the following statement : "Mass production 
implies a mass market. A mass market cannot be obtained until the cost has 
been reduced considerably, and the cost cannot be reduced very much until mass 
production on a prefabricated basis has been accomplished. Thus we have a 
vicious circle which has produced a stalemate." (Senate committee print of the 
Temporary National Economic Committee, monograph 8, Toward More Housing.) 
This vicious circle, however, could be broken by the military authorities or by the 
Federal Government which has the necessary power and money to launch the 
preliminary research work so badly needed before mass production can set in. 

If is true that several Federal agencies like the Forest Products Laboratory 
and the National Bureau of Standards have been engaged in the past, from 
time to time, in housing research. The means put at their disposal, however, 
have been scanty, and the scope of their work has been restricted as com- 
pared with the millions of dollars appropriated for research to the Advisory 
Committee for Aeronautics or to the Department of Agriculture, each in their 
special field. In view of the present war — and post-war— emergency, more 
drastic steps should be taken to further the aim of building better and cheaper 
houses for the masses, starting with more intensive research into exploring 
the whole range of problems involved in housing. The former method of 
subsidizing new housing projects for the lower classes in the slum regions 
is rather a costly remedy and even questionable as to the final result. We 
do not believe, therefore, that perennial subsidies lead to the real solution 

of the housing problem. Subsidies oughl to be considered only as a measure 
of transition until means and ways are found for solving the housing problem 
economically and in a strict relation to the income-producing working places. 
We believe that permanent dwellings should be erected only where working 
places can be assured of a longevity presumably equal to that of the dwellings 


We suggest that an Institute of Building Integration should be created, in 
which Federal, State, and municipal authorities would cooperate with archi- 
tects, engineers, contractors, manufacturers, realtors, bankers, and trade- 
unionists as their advisers, to produce a final solution of the pressing need 
for adequate housing. All the existing institutions for public and private 
research in building practice should cooperate, exchanging their experiences 
and results, simultaneously acquiring a better knowledge of the difficulties 
of corelated problems. The key plan to be set up by such an institute would 
aim at embracing everything expected to raise the social standard, to decrease 
the prices of houses, and to secure their movability in accordance with the 
fluctuation of the working places. Primary considerations would involve — 

Regulating regional planning by interstate legislation, for example, zoning 

Furthering the lease of land for housing for limited periods. 

Preparing the investment market for prefabrication and for the new idea 
of a housing service (shorter amortization and lower interests). 

Improving building regulations by adapting them to new building techniques. 

Research for socially and economically most suitable types of dwellings. 

Research for suitable standard sizes of the component parts of dwellings ; 
these parts to be interchangeable for different types of houses. 

Research for actual prefabrication, including mechanical units such as kitchen, 
bathroom, and air-conditioning plant. 

Simplification of the building organization in offices and at the site. 

There are many brilliant attempts made in these various fields, but they are 
rather isolated from one another instead of being parts of a well-tuned oi-ga- 
nism which is so badly needed. The suggested Institute of Building Integra- 
tion should fill this gap but, as so much organization work would be involved, 
the idea of rationalization must be safeguarded against red tape which would 
stunt its only aim ; namely, to promote creative progress. 

The cost of such an institute, to be put up by the Government, would be 
irrelevant when compared with the savings to be expected from economizing 
on housing costs throughout the country by such means of concentration and 
integration. The efficiency of money spent for housing could probably be 
doubled and bring the key problem of social welfare close to its final solution, 
simultaneously increasing private initiative and employment. 


The transformation of the present war economics into the future peace 
economics will certainly entail for the Federal Government a task even greater 
than the launching of the war boom itself. The unsolved crisis of 1929-30, 
caused by technological unemployment, might appear again in all its brutal 
consequences and it might even become increasingly dangerous on account of 
further technological improvements, as well as on account of the overstrained 
financial burdens laid upon the taxpayers and the public agencies. Of course 
the demand for large-scale public work will soon return again. Any respon- 
sible leader in the field of economics will then point to the hard necessity that 
only such works should be started by public authorities as would lead to a 
final solution of the crisis and to enterprises that are of themselves economi- 
cally balanced by giving continuous employment to men, material, and capital. 


It might be difficult for the Federal Government to decide which type of profit- 
able work ought to be done by public agencies. Among all such tasks, however, 
there is one of predominant social and economical character, namely, the resettle- 
ment of those people in urban and rural regions who will probably never find 
profitable work again in the neighborhood of their present domicile. This task in 
its last consequence includes not more and not less than the creation of a new type 
of settlement which offers the highest possible economic, social, and cultural 
attraction for the establishment of new working places. 

In proposing the planning and building of a new type of township, say, new 
"country towns," we are aware that the solution of such a gigantic task would 
mean asking the Federal Government and Congress to tackle the post-war emer- 
gency problems from their very roots. The urgency of a more radical approach 
to these problems, however, seems to be evident from the following considerations: 

1. Since the present railway traffic system is doomed to lose more and more 


transports of coal, building materials, and passengers to the increasing automo- 
bile, bus, and truck traffic with its improved door-to-door service, the building up 
of a new system of superhighways, as proposed to Congress in 1930 by President 
Roosevelt, ought to become tbe backbone of post-war settlement projects, planned 
better to fulfill "the ideals and objectives of our national life." 

2. As the railways in the past have caused almost all of our larger cities to 
form a too concentrated and economically as well as socially most vulnerable 
pattern, the new superb ighways, spreading over the whole country, should be 
used as a new organic source for originating a better type of settlement of a more 
decentralized character. Planned to be of higher social quality, of greater eco- 
nomic efficiency, and also less vulnerable in times of crisis, they would open up 
working places for townsmen and farmers, letting the farmer profit directly from 
the townsman and the townsman from the farmer. 

3. The economic attraction of creating new working places in tbese ''country 
towns" may be found in the following outline: 

(a) As a matter of fact, today, completely self-sustained settlements can be 
built up on open ground for less than half the cost per capita the people had 
to pay in the past for the old towns — now grown obsolete; this, of course, 
could be achieved only if they were carefully planned for, say, not more than 
about 5,0UO souls and then built, according to modern principles of mass pro- 
duction, at one stroke. 

{b) Being planned on the basis of walking distances, the settlements could 
be fed from the surrounding farms and much of the present costs for local 
transportation and food distribution could thus be saved. 

(C) New working places could be offered in these "country towns" to indus- 
tries which had been forced to leave the larger towns on account of increasing 
land prices, taxes, and wages. Finding there the opportunity of more favorable 
economic conditions, these industries could settle down again with better 
prospects for a permanent success. 

(d) A new system of commun ty administration and of labor policy could be 
set up in these "country towns" that would exclude many evils so deeply rooted 
in the economic, social, and political framework of the old towns now close to 


A fundamental framework as outlined above would constitute a sound basis 
for building up a town pattern fit for the Twentieth Century machine age from 
tbe social as well as from the economic and cultural points of view. It would 
gradually overcome the costly defic'encies of present towns which, suffering from 
beir>sj unplanned, grew up wildly as hopelessly chaotic and vulnerable bodies, 
unfit for both peace and war conditions. We doubt, therefore, the advisability 
of trying to solve the housing problems onV by patching and repairing tbe old, 
morbid towns. Town organisms have a life-and-death cycle sinrlar to that of 
human beings, as Time is an irresistible creator and destroyer of shapes and 
values. Many of the present towns are dying, and piecemeal methods of re- 
habilitation have proved that these are not only the most expensive ones 
imaginable but that they also perpetuate soe"al shortcomings Repairing a 
machine while it runs is hardly possible: rebuilding a store while in constant 
use costs more than constructing a new one: rehabilitating the town adeouately 
while it is ; n full function would necessarily entail such a tax load for its 
eit''z°ns that it would surpass their financial capacities even in boom times 
during the rap'd growth of their city. Moreover, the younger generation has 
outb'ved the shapes of the old towns and houses and it calls for new ones fitted 
to raise the standard of livinsr and to offer an improved inner and outer living 
space, more health, and more happiness. 

A coincidence of various factors calling for immediate remedy, combined with 
the pressure caused by tbe national emergency, seem to indicate that the time 
has come to mobilize a powerful attempt to rebuild the country on a large settle. 
Complacency and dissonance, wherever they may have retarded, so far a badly 
needed progress in the building field, should be overcome by farsighted coopera- 
tion and coordination of all public and private agencies to be directed by a 
national key plan. 

To sum up: Tbe ideal solution for the defense-housing problem according to 
our oninion would be — 

1. To create a regional framework with new, fully serviced, and economically 
balanced communities these to be carefully linked up with the location of the 
working places and with their probable lifespan. 


2. To create a new type of low-cost dwelling of high quality with up-to-date 
amenities and composed of standardized parts which should he interchangeable 
for use in different types of houses of varying sizes. These dwellings to be 
demountable for reerection but simultaneously to be qualified also for permanent 
use when desired. 

3. To create a broad-minded public agency for coordinating the badly needed 
research for such resettlement and housing which, with power and determination, 
would give birth to a new impulse for the future life of the people at the end of 
this war. 

The following material, received subsequent to the hearing, is in- 
cluded in the record in accordance with instructions from the chairman : 

Exhibit 2 — Text of Lanham Act, as Amended 

(In the San Diego hearings (p. 5007), Public Law 137, 77th Cong., 
was printed for reference purposes. Inasmuch as this law amended 
the original "Lanham Act," approved October 14, 1940, by adding the "com- 
munity facilities" title and as the entire act is referred to by witnesses and 
members of the committee, the amended version of the "Lanham Act" is here- 
with given in full. At the time this hearing goes to press, a bill authorizing 
a further appropriation of $300,000,000 is proposed, making a total of $001),- 
000,000 which will be available under the provisions of the act, if the additional 
appropriation is passed.) 

[Public; — No. 849 — 76th Congress] 
[Chapter 862 — 3d Session] 

[H. R. 10412] 

AN ACT To expedite the provision of housing in connection with national defense, and 

for other purposes 

Be it enacted by the Senate and House of Representatives of the United States 
of America in Congress assembled 



Section 1. In order to provide housing for persons engaged in national- 
defense activities, and their families, in those areas or localities in which the 
President shall find that an acute shortage of housing exists or impends which 
would impede national-defense activities and that such housing would not be 
provided by private capital when needed, the Federal Works Administrator 
(hereinafter referred to as the "Administrator") is authorized: 

(a) To acquire prior to the approval of title by the Attorney General (with- 
out regard to sections 1136, as amended, and 3709 of the Revised Statutes) 
improved or unimproved lands or interests in lands by purchase, donation, 
exchange, lease (without regard to section 322 of the Act of June 30, 1932 

(47 Stat. 412), as amended, the Act of March 3, 1877 (19 Stat. 370), or any 
time limit on the availability of funds for the payment of rent, or condemna- 
tion (including proceedings under the Acts of August 1, 1888 (25 Stat. 357), 
March 1, 1929 (45 Stat. 1415), and February 26, 1931 (46 Stat. 1421)). 

(b) By contract or otherwise (without regard to sections 1136, as amended, 
and 3709 of the Revised Statutes, section 322 of the Act of June 30, 1932 (47 
Stat. 412), or any Federal, State, or municipal laws, ordinances, rules, or 
regulations relating to plans and specifications or forms of contract, the ap- 
proval thereof or the submission of estimates therefor) prior to the approval 
of title by the Attorney General to make surveys and investigations, plan, design, 
construct, remodel, extend, repair, or demolish structures, buildings, improve- 
ments, and community facilities, on lands or interests in lands acquired under 
the provisions of subsection (a) hereof or on other lands of the United States 
which may be available (transfers of which for this purpose by the Federal 
agency having jurisdiction thereof are hereby authorized notwithstanding any 
other provisions of law), provide proper approaches thereto, utilities, and trans- 
portation facilities, and procure necessary materials, supplies, articles, equip- 


ment, machinery, and do all things necessary in connection therewith to carry 
(int tin' purposes of this title: Provided, That the cost-plus-a-percentage-of-cosl 
system of contracting shall not be used, but this proviso shall nol be construed 
to prevent the use of the cost-plus-a-fixed-fee form of contract: Provided, That 
the cost per family dwelling unit shall not exceed an average of $3,500 for 
those units located within the continental United States nor an average of 
$4,000 for those located elsewhere, and the cost of no family dwelling unit 
shall exceed $3,950 within the continental United States or $4,750 elsewhere, 
exclusive of expenses of administration, land acquisition, public utilities, and 
community facilities, and the aggregate cost of community facilities shall not 
exceed 3 per centum of the total cost of all projects: Provided further, That 
all items of cost with respect to each such family dwelling unit shall he 
separately estimated with a view toward economy, and no movable equipment 
shall hi' installed in such units, unless the Administrator shall, in any particular 
case, deem such installation to he in the public interest. 

Seo. 2. As used in this Act (a) the term "persons engaged in national-defense 
activities" shall include (1) enlisted men in the naval or military services of the 
United States; (2) employees of the United States in the Navy and War Depart- 
ments assigned to duty at naval or military reservations, posts, or bases; (3) 
workers engaged or to be engaged in industries connected with and essential to 
the national defense; (b) the term, "Federal agency" means any executive depart- 
ment or office (including the President), independent establishment, commission, 
hoard, bureau, division, or office in the executive branch of the United States 
Government, or other agency of the United States, including corporations in 
which the United States owns all or a majority of the stock, directly or indirectly. 

Sec. 3. The sum of $300,000,000, to remain available until expended, is hereby 
authorized to he appropriated to carry out the purposes of this title in accord- 
ance with the authority therein contained and for administrative expenses in 
connection therewith: Provided, however, That the Administrator is authorized 
to reimburse, from funds which may be appropriated pursuant to the authority of 
this title, the sum of $3,300,000 to the emergency funds made available to the 
President under the Act of June 11, 1040, entitled "An Act making appropriations 
for the Navy Department and the naval service for the fiscal year ending June 30, 
1911, and for other purposes" (Public, Numbered 588), and the sum of $6,700,000 
to the emergency funds made available to the President under the Military 
Appropriation Act, 1941, approved June 13, 1940 (Public, Numbered 611). 


"defense public works 

"Sec. 201. It is hereby declared to be the policy of this title to provide means 
by which public works may be acquired, maintained, and operated in the areas 
described in section 202. As used in this title, the term 'public work' means any 
facility necessary for carrying on community life substantially expanded by the 
national-defense program, but the activities authorized under this title shall be 
devoted primarily to schools, waterworks, sewers, sewage, garbage and refuse 
disposal facilities, public sanitary facilities, works for the treatment and purifi- 
cation of water, hospitals and other places for the care of the sick, recreational 
facilities, and streets and access roads. 

"Seo. 201'. Whenever the President duds that in any area or locality an acute 
shortage of public works or equipment for public works necessary to the health, 
safety, or welfare of persons engaged in national-defense activities exists or im- 
pends which would impede national-defense activities, and that such public works 
or equipment cannot otherwise he provided when needed, or could not he pro- 
vided without the imposition of an increased excessive tax burden or an unusual 
or excessive increase in the debt limit of the taxing or borrowing authority in 
which such shortage exists, the Federal Works Administrator is authorized, with 
the approval of the President, in order to relieve such shortage — 

"(a) To acquire, prior to the approval of title by the Attorney Genera] if nec- 
essary (without regard to sections 1136, as amended, and 3709 of the Revised 
Statutes), improved or unimproved lands or interests in lands by purchase, dona- 
tion, exchange, lease (without regard to section 3L!L' of the Act of June .'in, 1932 
(47 Stat. 412), as amended, the Act of March 3. 1X77 (l!l Stat. 370), or any time 
limit on the availability of funds for the payment of rent ). or condemnation (in- 
cluding proceedings under the Acts of Augusl 1, 1S88 (25 Stat. 357), March 1, 
1929 (45 Stat. 1415), and February 26, 1931 (40 Stat. 1421)), for such public 



"(b) By contract or otherwise (without regard to sections 1136, as amended, 
and 3709 of the Revised Statutes, section 322 of the Act of June 30, 1932 (47 
Stat. 412), or any Federal, State, or municipal laws, ordinances, rules, or regula- 
tions relating to plans and specifications or forms of contract, the approval thereof 
or the submission of estimates therefor), prior to the approval of title by the 
Attorney General if necessary, to plan, design, construct, remodel, extend, re- 
pair, or' lease public works, and to demolish structures, buildings, and improve- 
ments, on lands or interests in lands acquired under the provisions of subsection 
(a) hereof or on other lands of the United States which may be available (transfers 
of which for this purpose by the Federal agency having jurisdiction thereof are 
hereby authorized notwithstanding any other provisions of law), provide proper 
approaches thereto, utilities, and transportation facilities, and procure necessary 
materials, supplies, articles, equipment, and machinery, and do all things in 
connection therewith to carry out the purposes of this title. 

"(c) To make loans or grants, or both, to public and private agencies for public 
works and equipment therefor, and to make contributions to public or private 
agencies for the maintenance and operation of public works, upon such terms 
and in such amounts as the Administrator may consider to be in the public in- 
terest. As used in this paragraph, the term 'private agency' means any private 
agency no part of the uet earnings of which inures to the benefit of any private 
shareholder or individual. 

'Sec. 203. (a) In carrying out this title — 

"(1) no contract on a cost plus a percentage of cost basis shall be made, 
but contracts may be made on a cost plus a fixed fee basis : Provided, That 
the fixed fee does not exceed 6 per centum of the estimated cost ; 

"(2) wherever practicable, utilization shall be made of existing private 
and public facilities or such facilities shall be extended, enlarged, or equipped 
in lieu of constructing new facilities ; 

"(3) public works shall be maintained and operated by officers and em- 
ployees of the United States only if and to the extent that local public and 
private agencies are, in the opinion of the Administrator, unable or unwill- 
ing to maintain or operate such public works adequately with their own 
personnel and under loans or grants authorized by this title ; 

"(4) public works shall be provided on the basis of need and in determin- 
ing need no discrimination shall be made on account of race, creed, or color. 

"(b) No department or agency of the United States shall exercise any super- 
vision or control over any school with respect to which any funds have been or 
may be expended pursuant to this title, nor shall any term or condition of any 
agreement under this title relating to, or any lease, grant, loan, or contribution 
made under this title to or on behalf of, any such school, prescribe or affect its 
administration, personnel, curriculum, instruction, methods of instruction, or 
materials for instruction. 

"(c) No department or agency of the United States shall exercise any super- 
vision or control over any hospital or other place for the care of the sick (which 
is not owned and operated by the United States) with respect to which any funds 
have been or may be expended under this title, nor shall any term or condition 
of any agreement under this title relating to, or any lease, grant, loan, or contri- 
bution made under this title to, or on behalf of, any such hospital or place, pre- 
scribe or affect its administration, personnel, or operation. 

"Sec. 204. The sum of $150,000,000, to remain available until expended, is 
hereby authorized to be appropriated to carry out the purposes of this title and 
for administrative expenses in connection therewith, including personal services 
and rent in the District of Columbia and elsewhere, printing and binding, and 
purchase, repair, operation, and maintenance of motor-pr>jpelled passenger- 
carrying vehicles. 


"general provisions" 

Sec. 301. When the President shall have declared that the emergency declared 
by him on September 8, 1939, to exist, has ceased to exist (a) the authority con- 
tained in section 1 hereof shall terminate except with respect to contracts on 
projects previously entered into or undertaken and court proceedings then pend- 
ing, and (b) property acquired or constructed under this Act shall be disposed of 
as promptly as may be advantageous under the circumstances and in the public 


Sec. 302. Where any Federal agency has funds for the provision of housing 
in connection with national-defense activities it may, in its discretion, make 
transfers of those funds, in whole or in part, to the Administrator, and the funds 
so transferred shall be available for, but only for, any or all of the objects and 
purposes of and in accordance with all the authority and limitations contained 
in this Act, and for administrative expenses in connection therewith. 

Sec. 303. Moneys derived from rental or operation of property acquired or 
constructed under the provisions of this Act shall be returned to the appropria- 
tion authorized by this Act and shall be available for expenses of operation and 
maintenance including administrative expenses in connection therewith, and the 
unobligated balance of the moneys so deposited shall be covered into the Treasury 
at the end of each fiscal year as miscellaneous receipts. 

Sec. 3C4. Notwithstanding any other provisions of law, whether relating to 
the acquisition, handling, or disposal of real or other property by' the United 
States of to other matters, the Administrator with respect to any property 
acquired or constructed under the provisions of this Act, is authorized by means 
of Government personnel, selected qualified private agencies, or public agencies 
(a) to deal with, maintain, operate, administer, and insure ; (b) to pursue to final 
collection by way of compromise or otherwise, all claims arising therefrom; (c) 
to rent, lease, exchange, sell for cash or credit, and convey the whole or any part 
of such property and to convey without cost portions thereof to local municipali- 
ties for street or other public use: Provided, That any such transaction shall be 
upon such terms, including the period of any lease, as may be deemed by the 
Administrator to be in the public interest: Provided further, That the Adminis- 
trator shall fix fair rentals, on projects developed pursuant to this Act, which 
shall be within the financial reach of persons engaged in national defense: 
Provided further. That any lease authorized hereunder shall not be subject to the 
provisions of section 321 of the Act of June 30, 1032 (47 Stat. 412). 

Sec 305. In carrying out the provisions of this Act the Administrator is author- 
ized to utilize and act through the Federal Works Agency and other Federal 
agencies and any local public agency, with the consent of such agency, and any 
funds appropriated pursuant to this Act shall be available for transfer to any 
such agency in reimbursement therefor. Nothing in this Act shall be construed 
to prevent the Administrator from employing or utilizing the professional services 
of private persons, firms, or corporations. 

Sec 306. The Administrator may enter into any agreements to pay annual 
sums in lieu of taxes to any State or political subdivision thereof, with respect 
to any real property acquired and held by him under this Act, including im- 
provements thereon. The amount so paid for any year upon any such property 
shall not exceed the taxes that would be paid to the State or subdivision, as the 
case may be, upon such property if it were not exempt from taxation. 

Sec. 307. Notwithstanding any other provision of law, the acquisition by the 
Administrator of any real property pursuant to this Act shall not deprive any 
State or political subdivision thereof of its civil and criminal jurisdiction in and 
over such property, or impair the civil rights under the State or local law of the 
inhabitants on such property. 

Sec. 308. The Administrator is authorized to make such rules and regulations 
as may be necessary to carry out the provisions of this Act, and shall establish 
reasonable standards of safety, convenience, and health. 

Sec. 309. Notwithstanding any other provision of law, the wages of every 
laborer and mechanic employed on any construction, repair, or demolition work 
authorized by this Act shall be computed on a basic day rate of eight hours per 
day and work in excess of eight hours per day shall be permitted upon compensa- 
tion for all hours worked in excess of eight hours per day at not less than one and 
one-half times the basic rate of pay. Not less than the prevailing wages shall be 
paid in the construction of defense housing authorized herein. 

Sec 310. If any provision of this Act, or the application thereof to any per- 
sons or circumstances, is held invalid, the remainder of this Act, or application 
of such provision to other persons or circumstances shall not be affected thereby. 

Sec 311. At the beginning of each session of Congress, the Administrator shall 
make to Congress a full and detailed report covering all of the transactions 
authorized hereunder. 

(Because of references made to it in the committee's hearings, there 
is here inserted, on instructions of the chairman, the text of Public 
Law 24 (H. R. 3575) under title VI — Defense Housing Insurance.) 

Exhibit 3 

[Public Law 24 — 77th Congress] 

[Chapter 31 — 1st Session] 

[II. R. 3575] 

AN ACT TO amend the National Housing Act, and for other purposes 

Be it enacted by the Senate and House of Representatives of the United States 
of America in Congress assembled. That the National Housing Act, as amended, 
is amended by the addition of the following title at the end thereof: 


"Sec. 601. As used in this title — 

"(a) The term 'mortgage' means a first mortgage on real estate, in fee simple, 
or on a leasehold (1) under a lease for not less than ninety-nine years which 
is renewable; or (2) under a lease having a period of not less than fifty years 
to run from the date the mortgage was executed ; and the term 'first mortgage' 
means such classes of first liens as are commonly given to secure advances on,. 
or the unpaid purchase price of, real estate, under the laws of the State in 
which the real estate is located, together with the credit instruments, if any, 
secured thereby. 

"(b) The term 'mortgagee' includes the original lender under a mortgage, 
and his successors and assigns approved by the Administrator ; and the term 
'mortgagor' includes the original borrower under a mortgage and his successors 
and assigns. 

"(c) The term 'maturity date' means the date on which the mortgage in- 
debtedness would be extinguished if paid in accordance with periodic payments 
provided for in the mortgage. 

"(d) The term 'State' includes the several States, and Alaska, Hawaii, Puerto 
Pico, the District of Columbia, and the Virgin Islands. 

"Sec. 602. There is hereby created a Defense Housing Insurance Fund which 
shall be used by the Administrator as a revolving fund for the carrying out of 
the provisions of this title, and mortgages insured under this title shall be 
known and referred to as 'defense housing insured mortgages'. For this 
purpose, the Reconstruction Finance Corporation shall make available to the 
Administrator such funds as he may deem necessary, not to exceed $10,000,000, 
and the amount of notes, debentures, bonds, or other such obligations which the 
Corporation is authorized to issue and have outstanding at any one time under 
existing law is hereby increased by an amount sufficient to provide such funds : 
Provided, That the Secretary of the Treasury is authorized and directed lo 
cancel from time to time, upon the request of the Corporation, notes of the 
Corporation (which notes are hereby made available to the Secretary of the 
Treasury for purposes of this seel ion), and to discharge its liability, as respects 
all sums due and unpaid upon or in connection with such notes at the time of 
such cancelation and discharge in a principal amount equal to the funds made 
available to the Administrator by the Corporation under or by reason of this 
title together with interest paid to the Treasury thereon: Provided further. 
That any evidence of indebtedness with respect to funds so disbursed by th J 



Corporation shall be transferred to the Secretary of the Treasury; that the 

Secretary and the Corporation arc authorized and directed to make such 
adjustments on their books and records as may be necessary to carry out the 
purposes of this section: that the amount of notes, debentures, bonds, or other 
such obligations which the Corporation is authorized to issue and have outstand- 
ing at any one time under the provisions of (his section shall be correspondingly 
reduced by the amount of notes so canceled by the Secretary, and that any sums 
at any time received by the Corporation, representing repayments or recoveries 
of funds so disbursed shall forthwith be covered into the general fund of the 
Treasury: And provided further. There shall be allocated immediately to the 
Defense Housing Insurance Fund the sum of .$5,000,000 out of funds made avail- 
able to the Administrator for this purpose. General expenses of operation of 
the Federal Housing Administration under this title may be charged to the 
Defense Housing Insurance Fund. 

"Sec. 603. (a) The Administrator is authorized, upon application by the mort- 
gagee, to insure as hereinafter provided any mortgage which is eligible for 
insurance as hereinafter provided and upon such terms as the Administrator 
may prescribe to make commitments for the insuring of such mortgages prior 
to the date of their execution or disbursement thereon : Provided', That the 
property covered by the mortgage is in an area or locality in which the Presi- 
dent shall find that an acute shortage of housing exists or impends which would 
impede national-defense activities: Provided further, That the aggregate amount 
of principal obligations of all mortgages insured under this section shall not 
exceed §100,000,000: And provided further. That no mortgage shall be insured 
under this section after July 1, 1942, or after such earlier date as the emer- 
gency, declared by the President on September 8, 1939, to exist, has by his 
declaration ceased to exist, except pursuant to a commitment to insure issued 
on or before July 1, 1942, or such earlier date, whichever first occurs. 

"(b) To be eligible for insurance under this section a mortgage shall — 

"(1) have been made to, and be held by, a mortgagee approved by the 
Administrator as responsible and able to service the mortgage properly; 

"(2) involve a principal obligation (including such initial service charges, 
appraisal, inspection, and other fees as the Administrator shall approve) 
in an amount not to exceed 90 per centum of the appraised value (as of the 
date the mortgage is accepted for insurance) of a property, urban, sub- 
urban, or rural upon which there is located a dwelling designed principally 
for residential use for not more than four families in the aggregate, which 
is approved for mortgage insurance or defense housing insurance prior to 
the beginning of constuction, and (i) the construction of which is b^gun 
after the date of enactment of this title, or (ii) the construction of which 
was begun after January 1, 1940, and prior to the date of enactment of 
this title, and which has not been sold or occupied since completion. Such 
principal obligation shall not exceed — 

"(A) $4,000 if such dwelling is designed for a single-familv residence, or 
"(B) $6,000 if such dwelling is designed for a two-family residence, or 
"(C) $8,000 if such dwelling is designed for a three-family residence, or 
"(D) $10,500 if such dwelling is designed for a four-family residence; 

••(3) have a maturity satisfactory to the Administrator but not to exceed 
twenty years from the date of the insurance of the mortgage; 

"(4) contain complete amortization provisions satisfactory to the Adminis- 
trator : 

"(5) bear interest (exclusive of premium charges for insurance) but not 
to exceed ."> per centum per annum on the amount of the principal obligation 
outstanding at any time, or not to exceed 6 per centum per annum if the 
Administrator finds that in certain areas or under special circumstances the 
mortgage market demands it; 

"6) provide, in a manner saisfaetory to the Administrator, for the applica- 
tion of the mortgagor's periodic payments (exclusive of the amount allocated 
to interest and to the premium charge which is required for mortgage in- 
surance as herein provided) to amortization of the principal of the mortgage- 


"(7) contain such terms and provisions with respect to insurance, repairs, 
alterations, payment of taxes, default reserves, delinquency charges, fore- 
closure proceedings, anticipation of maturity, additional and secondary liens, 
aud other matters as the Administrator may in his discretion prescribe. 

"(c) The Administrator is authorized to fix a premium charge for the in- 
surance of mortgages under this title but in the case of any mortgage such 
charge shall not be less than an amount equivalent to one-half of 1 per centum 
per annum nor more than an amount equivalent to iy 2 per centum per annum 
of the amount of the principal obligation of the mortgage outstanding at any 
time, without taking into account delinquent payments or prepayments. Such 
premium charges shall be payable by the mortgagee, either in cash, or in deben- 
tures issued by the Administrator under this title at par plus accrued interest, 
in such manner as may be prescribed by the Administrator : Provided, That 
the Administrator may require the payment of one or more such premium 
charges at the time the mortgage is insured, at such discount rate as he may 
prescribe not in excess of the interest rate specified in the mortgage. If the 
Administrator finds upon the presentation of a mortgage for insurance and the 
tender of the initial premium charge or charges so required that the mortgage 
complies with the provisions of this title, such mortgage may be accepted for 
insurance by endorsement or otherwise as the Administrator may prescribe; 
but no mortgage shall be accepted for insurance under this section unless the 
Administrator finds that the project with respect to which rhe mortgage is 
executed is economically sound. In the event that the principal obligation of 
any mortgage accepted for insurance under this title is paid in full prior to 
the maturity date, the Administrator is further authorized in his discreiion 
to require the payment by the mortgagee of an adjusted premium charge in 
such amount as the Administrator determines to be equitable, but not in excess 
of the aggregate amount of the premium charges that the mortgagee would 
otherwise have been required to pay if the mortgage had continued to be insured 
under this section until such maturity date; and in the event that the prin- 
cipal obligation is paid in full as herein set forth, and a mortgage on the same 
property is accepted for insurance at the time of such payment, the Adminis- 
trator is authorized to refund to the mortgagee for the account of the mortgagor 
all, or such portion as he shall determine to be equitable, of the current un- 
earned premium charges theretofore paid. 

'"(d) Any contract of insurance heretofore or hereafter executed by the 
Administrator under this title shall be conclusive evidence of the eligibility of 
the mortgage for insurance, and the validity of any contract of insurance so 
executed shall be incontestable in the hands of an approved mortgagee from 
the date of the execution of such contract, except for fraud or misrepresenta- 
tion on the part of such approved mortgagee. 

"Sec. 604. (a) In any case in which the mortgagee under a mortgage insured 
under this title shall have foreclosed and taken possession of the mortgaged 
property, in accordanct with regulations of, and within a period to be deter- 
mined by, the Administrator, or shall, with the consent of the Administrator, 
have otherwise acquired such property from the mortgagor after default, the 
mortgagee shall be entitled to receive the benefit of the insurance as here- 
inafter provided, upon (1) the prompt conveyance to the Administrator of title 
to the property which meets the requirements of rules and regulations of the 
Administrator in force at the time the mortgage was insured, and which is 
evidenced in the manner prescribed by such rules and regulations; and (2) 
the assignment to him of all claims of the mortgagee against the mortgagor or 
others, arising out of the mortgage transaction or foreclosure proceedings, 
except such claims as may have been released with the consent of the Admin- 
istrator. Upon such conveyance and assignment the obligation of the mortgagee 
to pay the premium charges for insurance shall cease and the Administrator 
shall, subject to the cash adjustment hereinafter provided, issue to the 
mortgagee debentures having a total face value equal to the value of the 
mortgage and a certificate of claim, as hereinafter provided. For the purposes 
of this subsection, the value of the mortgage shall be determined, in accord- 
ance with rules and regulations prescribed by the Administrator, by adding 
to the amount of the original principal obligation of the mortgage which was 


unpaid on the date of the institution of foreclosure proceedings, or on the 
date of the acquisition of the property after default other than by foreclosure, 

the amount of all payments which have been made by the mortgagee Cor taxes, 
ground rents, and water rates, which are liens prior to the mortgage, special 
assessments which are noted on the application for insurance or winch become 
liens after the insurance of the mortgage, insurance of the mortgaged property, 
and any mortgage insurance premiums paid after either of such dates and by 
deducting from such total amount any amount received on account of the 
mortgage after either of such dates, and any amount received as rent or 
other income from the property, less reasonable expenses incurred in han- 
dling the property, after either of such dates: Provided, That with respect to 
mortgages which are foreclosed before there shall have been paid on account 
of the principal obligation of the mortgage a sum equal to 10 per centum of 
the appraised value of the property as of the date the mortgage was ac- 
cepted for insurance, there may be included in the debentures issued by the 
Administrator, on account of the cost of foreclosure (or of acquiring the prop- 
erty by other means) actually paid by the mortgagee and approved by the 
Administrator an amount — 

"(1) not in excess of 2 per centum of the unpaid principal of the 
mortgage as of the date of the institution of foreclosure proceedings 
and not in excess of $75 ; or 

"(2) not in excess of two-thirds of such cost, whichever is the greater. 

"(b) The Administrator may at any time, under such terms and con- 
ditions as he may prescribe, consent to the release of the mortgagor from his 
liability under the mortgage or the credit instrument secured thereby, or con- 
sent to the release of parts of the mortgaged property from the lien of the 
mortgage: Provided, That the mortgagor shall not be released from such 
liability in any case until the Administrator is satisfied that the mortgaged 
property has been sold to a purchaser satisfactory to the Administrator, and 
that such purchaser has paid on account of the purchase price, in cash or its 
equivalent, at least 10 per centum of the appraised value of such property as 
determined by the Administrator as of the date the mortgage is accepted for 

"(c) Debentures issued under this section shall be in such form and denomi- 
nations in multiples of $50, shall be subject to such terms and conditions, 
and shall include such provisions for redemption, if any, as may be pre- 
scribed by the Administrator with the approval of the Secretary of the 
Treasury, and may be in coupon or registered form. Any difference between 
the value of the mortgage determined as herein provided and the aggregate 
face value of the debentures issued, not to exceed $50, shall be adjusted by 
the payment of cash by the Administrator to the mortgagee from the Defense 
Housing Insurance Fund. 

"(d) The debentures issued under this section to auy mortgagee shall be 
executed in the name of the Defense Housing Insurance Fund as obligor, shall 
be signed by the Administrator by either his written or engraved signature, and 
shall be negotiable. All such debentures shall he dated as of the date fore- 
closure proceedings were instituted, or the property was otherwise acquired by 
the mortgagee after default, and shall bear interest from such date at a rate 
determined by the Administrator, with the approval of the Secretary of the 
Treasury, at the time the mortgage was offered for insurance, but not to 
exceed 3 per centum per annum, payable semiannually on the 1st day of Janu- 
ary and the 1st day of July of each year, and shall mature three years after 
the 1st day of July following the maturity date of the mortgage on the property 
in exchange for which the debentures were issued. Such debentures shall be 
exempt, both as to principal and interest, from all taxation (except surtaxes, 
estate, inheritance, and gift taxes) now or hereafter imposed by any Terri- 
tory, dependency, or possession of the United States, or by the District of 
Columbia, or by any State, county, municipality, or local taxing authority, and 
shall he paid out of the Defense Housing Insurance Fund, which shall be pri- 
marily liable therefor, and they shall be fully and unconditionally guaranteed 


as to principal and interest by the United States, and such guaranty shall be 
expressed on the face of the debentures. In the event that the Defense Housing 
Insurance Fund fails to pay upon demand, when due, the principal of or 
interest on any debentures issued under this section, the Secretary of the 
Treasury shall pay to the holders the amount thereof which is hereby author- 
ized to be appropriated, out of any money in the Treasury not otherwise 
appropriated, and thereupon to the extent of the amount so paid the Secre- 
tary of the Treasury shall succeed to all the rights of the holders of such 

"(e) The certificate of claim issued by the Administrator to any mortgagee 
shall be for an amount which the Administrator determines to be sufficient, 
when added to the face value of the debentures issued and the cash adjustment 
paid to the mortgagee, to equal the amount which the mortgagee woidd have 
received if, at the time of the conveyance to the Administrator of the property 
covered by the mortgage, the mortgagor had redeemed the property and paid 
in full all obligations under the mortgage and a reasonable amount for neces- 
sary expenses incurred by the mortgagee in connection with the foreclosure 
proceedings, or the acquisition of the mortgaged property otherwise, and the 
conveyance thereof to the Administrator. Each such certificate of claim shall 
provide that there shall accrue to the holder of such certificate with respect 
to the face amount of such certificate, an increment at the rate of 3 per centum 
per annum which shall not be compounded. The amount to which the holder 
of any such certificate shall be entitled shall be determined as provided in 
subsection (f). 

"(f) If the net amount realized from any property conveyed to the Admin- 
istrator under this section and the claim assigned therewith, after deducting 
all expenses incurred by the Administrator in handling, dealing with, and dis- 
posing of such property and in collecting such claims, exceeds the face value 
of the debentures issued and the cash paid in exchange for such property plus 
all interest paid on such debentures, such excess shall be divided as follows: 

"(1) If such excess is greater than the total amount payable under the 
certificate of claim issued in connection with such property, the Adminis- 
trator shall pay to the holder of such certificate the full amount so payable, 
and any excess remaining thereafter shall be paid to the mortgagor of such 
property ; and 

'(2) If such excess is equal to or less than the total amount payable 
under such certificate of claim, the Administrator shall pay to the holder 
of such certificate the full amount of such excess. 

"(g) Notwithstanding any other provision of law relating to the acquisition, 
handling, or disposal of real property by the United States, the Administrator 
shall have power to deal with, complete, rent, renovate, modernize, insure, 
make contracts or establish suitable agencies for the management of, or sell 
for cash or credit, in his discretion, any properties conveyed to him in exchange 
for debentures and certificates of claim as provided in this section ; and not- 
withstanding any other provision of law, the Administrator shall also have 
power to pursue to final collection, by way of compromise or otherwise, all 
claims against mortgagors assigned by mortgagees to the Administrator as 
provided in this section, except that no suit or action shall be commenced by 
the Administrator against any such mortgagor on account of any claim so as- 
signed unless such suit or action is commenced within six months after the 
assignment of such claim to the Administrator, or within six months after the 
last payment was made to the Administrator with respect to the claim so 
assigned, whichever is later: Provided, That section 3709 of the Revised Stat- 
utes shall not be construed to apply to any contract for hazard insurance, or 
to any purchase or contract for services or supplies on account of such prop- 
erty if the amount thereof does not exceed $1,000. The power to convey and 
to execute in the name of the Administrator deeds of conveyances, deeds of 
release, assignments, and satisfactions of mortgages, and any other written 
instrument relating to real property or any interest therein heretofore or here- 
after acquired by the Administrator pursuant to the provisions of this Act, may 


be exercised by the Administrator or by any Assistant Administrator ap- 
pointed by him, without the execution of any express delegation of power or 
power of attorney: Provided, That nothing in this subsection shall be construed 
to prevent the Administrator from delegating such power by order or by power 
Of attorney in his discretion, to any officer, agent, or employee he may appoint. 

"(h) No mortgagee or mortagor shall have and no certificate of claim shall 
be construed to give to any mortgagee or mortgagor, any right or interest in any 
property conveyed to the Administrator or in any claim assigned to him; nor 
shall the Administrator owe any duty to any mortgagee or mortgagor with 
respect to the handling or disposal of any such property or the collection of any