Evening star., 1938-01-23
CREDIT Of STATES
WILL Be STUDIED
Senate Unemployment Com.
mittee Ends First Phase
of Hearings.
BY JOHN C. HENRY.

DS JoHN -. HENRY.
Financial credit of State and loca
governments and chronological unem
ployment, two widely separated field.
OF inquiry. will occupy the Senate Un'
employment Committee during tn,
coming week, it was disclosed yester.
day by Chairman Byrnes, as the com.
mittee recessed for an indefinite
period.
The credit question, the Senator
said. has been under quiet investiga.
ton by committee agents for severa
weeks, the issue arising out of realiza.
ton of the wide range of degree Of
financial participation by States anc
cities IN the unemployment relief pro.
grams financed principally by the
Federal Government.
Suspecting that many States and
cities are deliberately shirking q fair
share of such burden as long as the
Federal Government is willing to as
sumo it, members of the committee
hope to reach some basis for more
rigid matching requirements, it was
explained
Information Awaited.
In connection with the relief pro-
grams, the committee also is awaiting
requested information from several key
States as to the number of w. P. A.
workers who are supplementing their
income by part-tine private jobs and
the number who have been on the
w. P. A. rolls since inception of the
program.
Completing their first set of hear
ings, the committee yesterday heard
from spokesmen of the steel and con-
struction industries.
From the former. they received
notice in letter from Benjamin F
Falrless, president of the United States
Steel Corporation. that his company
and its subsidiaries are planning ex.
penditure Of SS0,00O,000 during the
first three quarters of 1888 for plant
modernization and expansion. More
will follow. Mr.. Fairless said, If bust.
ness conditions warrant.
From the construction industry, the
committee heard one of the most
penetrating analyses yet presented by
any industrial spokesman AS Thomas
S. Holden. vice president of the F. w
Dodge Corp, building statisticians. as
p sailed the almost nysterical alarm
that greeted the mild recession OF
private construction" in the latter part
OF 1887.
h1- q ioI 0t,
servers that it even had a great deal tc
do with the break in stock market
prices" Mr.. Holden said With notice
able sarcasm. The truth of the
matter is that a mythical bubble burst
a mirage was dissipated which had
been made up of false expectations of
a speculative housing boom"
Hits Housing Estimates.
Refuting the accuracy of estimates
OF housing needs, the witness declared
that the first realistic appraisal of
such need came only last December
and showed that the housing market
lies principally among families who
ordinarily are forced by income limita-
tlonS to live in third and fourth-h hand
housing.
Expecting housing boom from such
as these. he said, meant that "a
Chevrolet market was supposed to pur-
chase Buick-grade housing at rising
prices
Mr.. Holden scoffed at the posi-
bilities of housing booms such as the
Nation once experienced. pointing to
such reasons as the end of mass immi-
grafton, or rapid population increases
and other factors in development of
the country.
What we have witnessed in the
last few years has been no ordinary
depression" he said, but the coming
of age of great Nation, an important
turning point in our economic history.
The phenomena of adolescent growth,
OF which speculative exploitation of
real estate has been one of the most
outstanding, are not likely to be re-
peated"
Declaring that publicly subsidized
housing can take care of only part of
the need, the building statistician tes-
titled that industry expansion is a
prerequisite.
Need Cheaper Electricity.
THE largest potential expansion
program know of is that of the elec-
trio power industry" he said. Il
am not competent to pass on the
merits today in dispute between the
privately owned utilities and the Fed
eral administration, but I am con-
vinced that the country needs more
and cheaper electricity. and above all
else it needs an industrial expansion
program"
Commencing the development of
mass production home building in
England, Mr.. Holden observed that
rental housing for middle income
families offers the best opportunity
that We have for large-scale housing
developments. In time there will also
be place for large-scale community
developments of houses for sale"
With regard to reducing costs. the
witness specified that the Federal
Government can deal most effectively
with the financing problem, in which
respect he commended the activities
OF the Home Loan Bank System and
other New Deal housing agencies.
I am convinced" he concluded,
that low rates for electric power
and low rates for long-term money
will do more toward realization of en-
larged national income and the more
abundant life than any other funda-
mental things can name to you to-
day.
No Construction Crisis.
"As see it, there is no crisis at
this time in the construction indus
try, no emergency in the housing
program.
''As for this current year, I do not
anticipate any very considerable gains
In construction volume.
Returning business and invest
ment confidence, based on better I'm.
derstanding between Government and
private enterprise, could bring about
earlier resumption Of factory and pub