Housing – A Capitalist Crime, Dobbs Tells Senate Hearing (17 May 1948) (original) (raw)

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Farrell Dobbs

(17 May 1948)

Source: The Militant, Vol. 12 No. 20, 17 May 1948, pp. 1 & 2.
Transcription & Mark-up: Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Farrell Dobbs, Socialist Workers Party candidate for President, denounced the capitalist conspiracy on housing in the following statement submitted to the Senate Banking and Currency Committee on May 12.

I want to talk today about an iron curtain. This particular iron curtain was not fabricated by Russians or totalitarianism. This iron curtain carries the trade mark “Made in U.S.A.” – it was made by the capitalist system which is strangely called “free enterprise.” I am talking about the iron curtain that separates millions of American working class families from decent homes and in innumerable cases from any homes at all. I am talking about the iron curtain which separates the veterans and their families from the lofty promises of modern, livable and low rent housing accommodations which were made to them during the war.

The record proves beyond a doubt that Congress has not kept the promises which were made to the veterans. But this is all in the tradition of giving soldiers a promissory note to make them fight the rich man’s wars and then welching on the note when it came due for collection. The tradition is as old as America. The merchants and bankers of the revolutionary years led by their evil genius Alexander Hamilton contrived the great swindle of cheating the veterans of Valley Forge out of their earnings by manipulating the value of the currency. About seventy years later the corrupt agents of the industrial barons and the railroad kings swindled the Civil War veterans out of their homesteads – that too, gentlemen, might be called a housing scandal.

The war hysteria now being whipped up right here in Washington from the floor of Congress is not unconnected with the shortage of homes in this country. It is a method as old as class society itself. It began with the circuses the Roman slave masters employed to divert the attention of hungry, homeless and discontented people. Hitler and Mussolini brought this method to modern perfection – when concentration camps and jails proved inadequate they were quick to beat the war drums in order to divert the attention of German or Italian workingmen from their wretched working and living conditions.

The failure to provide housing is the failure of capitalism. By the same token it puts the mark of bankruptcy upon political parties which make the defense of the system of private profit the cardinal plank in their platform. Regardless of the turn in the economic cycle the housing-crisis has remained with us. Former President Roosevelt declared during the last devastating depression, in the first year of his administration, that one-third of the nation was ill-housed. Today at the peak of the postwar boom with national income at a record level President Truman tells us that the housing situation is “almost fatal.”

Seek Profit, Ignore Need

Way was there no genuine alleviation of the housing- shortage during the last depression? The banks had billions of dollars in idle capital. There were tens of thousands of unemployed building trades craftsmen and many more jobless in the building materials industries. Despite the great need for homes, the banks, mortgage and insurance companies and real estate interests deliberately blocked a building program for low cost housing because a profitable market was lacking – that is, because the earning power of working people was too low to pay the exorbitant rents which would make a large-scale building program profitable.

Since Roosevelt made his melancholy remarks about the housing problem, the crisis has become far more acute and aggravated. It is conservatively estimated that there are at least between 2,500,000 and 5,000,000 families who are doubled up with friends or relatives, crowded into unsanitary trailer camps and dingy hotel rooms – families who live under such conditions that they can best be described as homeless. This does not include between 18–21,000,000 non-farm city and rural families who live in substandard and slum dwellings. Most of these structures are in an advanced state of deterioration and many of them, now fully occupied, have long ago been condemned as uninhabitable by official agencies in the major cities.

When an innocent man is wrongly sentenced to die for a crime he did not commit there is a great outcry at such a miscarriage of justice. Even Congress might be prevailed to help redress the wrong. But the failure of capitalist business and its political representatives in the national government to alleviate the housing shortage is tantamount to a sentence of premature death to millions of slum dwellers in New York, Chicago, Pittsburgh, New Orleans, Detroit, Cincinnati, Columbus and other major cities. Yet there is no major outcry against this national injustice – at least none that can be heard over the din that is made for military preparation and war. These millions live under indescribable conditions, congested in overcrowded tenements, surrounded by filth, vermin, rats and disease, and live in perpetual danger of fire.

Those who boast of the “American way of life” must have in mind the fine mansions and sumptuously appointed apartments on Park Avenue in New York or on the Gold Coast in Chicago or in Detroit’s Grosse Pointe where it is pleasant to discuss the “housing problem.” While a handful enjoy such handsome accommodations, the iron curtain is drawn tight over the slums of New York’s Harlem or lower East Side, Detroit’s Black Bottom, Pittsburgh’s Hill District, New Orleans’ Irish Channel, Cincinnati’s Basin or the Sausage Row in Columbus.

The economics text books in the schools and colleges tell us that under the system of private enterprise capital seeks places of investment where demand is greatest. That was true when capitalism flourished as a progressive system in this country. But it is no longer true today.

The truth is that the big capitalist interests – the banks, insurance companies and real estate interests – are deliberately obstructing any substantial alleviation of the housing shortage. The present scarcity is far more profitable to them than would be the building of low-cost units on a large scale. It is estimated that a substantial profit could be realized with 15% of the housing units vacant. Today virtually every inch of space, from the attic to the cellar, is occupied by tenants who are paying exorbitant rents. The cost of maintenance and upkeep for these units has never before constituted such a small percentage of operating expenses. Profits from real estate stand at a record high.

Large scale new construction at low rentals would enter into competition with the present properties held by the real-estate interests and would tend to curb and lower these fabulous profits. Therefore, the monopoly interests seek to sabotage, obstruct and strangle a genuine housing program – regardless of the great demand.

There is further evidence that bears out this point. Real estate interests are not averse to building, provided the sales or rental price is well over a rigidly established minimum. There is no scarcity of high rental apartments and expensive homes. Builders consider 80amonthrentalinmajorcitiesthelowestprofitablebasisonwhichtobaseconstructionfigures.WehavebeforeustheexampleofconstructionunderthePatmanBill.Thisbilldippedintothetreasuryinordertogive400milliondollarsinbonusestomaterialproducerswiththeaimofconstructinghousesthatwouldsellata80 a month rental in major cities the lowest profitable basis on which to base construction figures. We have before us the example of construction under the Patman Bill. This bill dipped into the treasury in order to give 400 million dollars in bonuses to material producers with the aim of constructing houses that would sell at a 80amonthrentalinmajorcitiesthelowestprofitablebasisonwhichtobaseconstructionfigures.WehavebeforeustheexampleofconstructionunderthePatmanBill.Thisbilldippedintothetreasuryinordertogive400milliondollarsinbonusestomaterialproducerswiththeaimofconstructinghousesthatwouldsellata6,000 maximum and would rent for 50forfiveroomsintheNewYorkarea.Inpractice,however,salespricesrangedfrom50 for five rooms in the New York area. In practice, however, sales prices ranged from 50forfiveroomsintheNewYorkarea.I​npractice,however,salespricesrangedfrom10–18,000 in the area and rentals were set by OPA for three rooms at 79plus79 plus 79plus3 maintenance. Most of these houses were high-priced jerry-built shacks built with green lumber and inferior construction standards, small rooms on very small lots. Veterans and their families were the victims of this “free enterprise.”

This high-priced form of housing construction is completely out of the reach of the vast majority of America’s wage earning population. Some 18–21 million families pay rentals of 39orlessincitiesand39 or less in cities and 39orlessincitiesand29 or less in non-farm rural areas. With the present high cost of living, even this rent works a great hardship on large numbers. But the needs of the American people are of little consequence to the great monopoly interests. Big Business considers the American people no less objects for exploitation than it does Chinese coolies, Egyptian cotton pickers or Bolivian tin miners. They have, in effect, decreed, that the slums shall remain, that millions shall continue to be homeless because the profit, rate on low rental housing is not high enough to risk the investment of capital.

Congress of Homebreakers

What has been done since the end of the war? It is not correct to say that nothing has been done. Congress has been very active in that time. Active in blocking the development of any genuine housing program. Active in undermining rent controls, making it easier for the real estate sharks and the rent hogs to gouge the people. Congress has thus been serving the big banks and the real estate lobbies, guarding their interests against the growing mass of destitute Americans. It has been a Congress of Homebreakers.

Those who defend capitalism charge that socialism would break up the family. There is no socialism in this country, but what has happened to the family under capitalism? It is being reared today under such crowded and unhealthy conditions as to stunt and deform the bodies of the children, to debase all standards of morality and decency and to breed juvenile delinquency and crime on a scale unparalleled in American history. The home, for millions of the youth today, has become a hated, unorganized barracks, producing only the desire for flight.

The Taft-Ellender-Wagner Bill, which if I am not mistaken has been kicked around in Congress for the last two or three years, is a most pitiable caricature of a housing program. The bill calls for a total of 15 million homes to be built in the next ten years. That in itself would be a great achievement even though almost twice that many units are needed to rescue the American people from sub-standard and slum housing conditions.

But the joker is that out of the 15 million projected units, not more than a half million units – that is, those to be built by the government – stand a chance of being built’in the next five years. That amount won’t even cover demands created by the normal increase in population let alone seriously alleviate the distress among the millions doubled up with relatives and otherwise homeless.

The rest of the 14½ million units are mostly “castles in the air” as far as the average veteran and worker is Concerned. Private industry which is urged to construct these units has not and will not build low-cost housing on so large a scale. That fact has been amply demonstrated in the past years. There is even more direct evidence in New York City where generous grants given to private builders and insurance companies for slum clearance and low-cost housing resulted in a total of 12,400 new units, in a city which has an actual shortage of 264,500 units, not including the need to replace 861,110 units in condemned and sub-standard dwellings.

The real estate interests will not build low cost housing but they will use the provisions of the bill to continue their raids on the public treasury. They will unquestionably accept the half billion dollar federal appropriation to be matched by an equal amount for slum clearance by municipalities in order to purchase real property for a song. They will undoubtedly utilize the additional 1,600,000,000 dollars government guarantee of mortgages to further feather their nests. Homes for the rich and well-to-do may be a by-product of this plan, but to say that millions of working-men will find livable dwelling’s as a consequence of this bill is nothing but a deliberately sponsored illusion.

Even that section of housing to be sponsored directly by the government is not to be built by the government but merely financed by it. The building will be farmed out to private architects, bid out to private builders and sub-contracted to private contractors. This provides another opportunity for the building material interests and the building contractors, using all the infamous methods which have made the building industry the third most profitable in the country, to extract exorbitant profits at the government’s expense. Added to this is that other ingenious method of constructing government-built projects so poorly that they cannot enter into competition with higher rental privately-owned dwellings.

It is worthy of notice that with President Truman’s endorsement of this bill it becomes a bipartisan measure. This then is the very best that the two parties pledged to uphold capitalism – and it might be added the Wallace Party is likewise wedded to this system – have to propose in the richest and most prosperous country of the whole world. Only one home where almost 60 are needed!

We are not impressed with the argument that this pitiable half measure is better than none at all. The so-called liberals are worried that not even this bill will get through Congress. What a damning commentary it is that the only program of liberalism today is the acceptance of half-poverty, half-homelessness and half-slavery. Those who listen to this siren’s song will eventually be faced with total poverty, total homelessness and complete slavery.

This bill must be rewritten from beginning to end. The government must itself build not half a million homes but at least 29½ million. Such an enterprise is the very minimum required for the common decency of the millions of men and women who have labored to produce the great wealth of this country. Naturally such a program will meet the undying hostility of the powerful banks and trusts which rule us today. To them such a project is “pure socialism.”

These monopoly interests have reached a stage where they can no longer maintain a peacetime economy, they no longer have the desire or incentive to produce the works of peace. Profits for them today are inextricably tied up with producing instruments of death and the means of destruction. To remove their obstruction and sabotage is therefore the first prerequisite for a genuine housing program, for the welfare and happiness of the great masses of the people.

Where will the billions come from to initiate such a program ? Where did they come from when it was found necessary to build tanks, ships, guns and planes during the last war? Where did the billions come from that were required to build the Satanic Oak Ridge atom bomb development? We propose as a beginning that the billions once again being used to build the engines of death and destruction and to finance private armies all over the world be transferred to the housing program. We propose the complete reversal of the taxation program with the aim of exempting the poor and confiscating the fabulous billions in profits extorted from the government by the great corporations during the war and extorted from the public through inflationary prices after the war.

How will this program work?

First, the government would invoke the right of eminent domain over all lands and properties where it intends to build, instead of paying the king’s ransom the realty interests would demand for their property.

Second, the government will insure itself against a new profiteering raid on the treasury by nationalizing and operating under workers’ control all the feeder industries which provide building materials, to avoid paying the racketeering prices by which private industry makes cheap housing impossible.

Third, the government would set up a government planning board consisting of the outstanding architects and engineers and representatives of the workers in the building industry to carry through the project.

One of the by-products of such a program would be the teaching of skilled trades and the creation of jobs at decent wages for millions of men.

If carried to completion this program will help turn America into the garden spot of the world – not for a handful of parasites as it is today – but for the millions of America’s workers and farmers.

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