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2378 1937

CONGRESSIONAL RECORD-SENATE

Interior Ickes to the effect that any problem involving Hillside Homes will not be determined by Mr. Straus, but will be referred to the Secretary direct. That point, however, is incidental. The larger question involved is the question of policy in handling housing projects. Mr. Straus was the promoter and builder of a very famous housing project in New York known as Hillside Homes. I think perhaps it is one of the largest in the country. It is built on a portion of what was formerly a farm in the Bronx area in New York City on the Boston Post Road. It is built on the farm which Mr. Straus inherited from his father. Without going into any of the details, the point at issue, the point in controversy originally, turned on the fact that after Mr. Straus had obtained $5,000,000 from P. W. A. by way of a loan in respect to this low-cost housing project, and after he had located this project on his own farm, or on a portion of it, he withheld from the transfer a strip of land 100 feet wide across the entire front of the project, retained it to himself, and subsequently developed it as a private enterprise, after the housing project had created a community at that point. When this matter first came to my attention I was completely shocked by the contemplation that a housing project could thus mingle what seemed to me to be a private interest with a public interest; in other words, that Government money could be used to create an enormous housing project upon the one band, and that the creator of the project on the other hand could reserve unto himself 100 feet of land in front of it which he subsequently could develop to his own personal ·profit. It did not occur to me that there could be any defense for such a thing. On that basis I asked the committee to bear Mr. Straus. The able junior Senator from Utah [Mr. THoMAS] arranged the session yesterday, and Mr. Straus appeared. Mr. Straus dealt with the matter with complete candor. He freely accepted the facts as I have stated them; namely, that he did withhold the 100-foot strip in front of the project, that he did develop it for his own personal gain, if possible, and be stated that his only embarrassment was that the ·venture had not been profitable, and that he bad to concede that he had not been able to make any money out of it. · But, Mr. President, he also presented a philosophy of action which was entirely new to me, but which I was immediately bound to concede as entirely persuasive, and inasmuch as this matter had been bruited about in the press so much, it seemed to me that it would be worth while, so far as I am concerned and so far as Mr. Straus is concerned, to settle it once and for all. Mr. Straus takes the position-and I repeat that it is a persuasive position-that if you have any hope of intetesting large private investment in a large low-cost housing project on land which is to be purchased cheap enough to permit an appropriate housing enterprise, you must permit an adjacent development in the interests of the private parties themselves. Let me put that differently. I should say Mr. Straus presents the proposition that you must choose one of these two alternatives: Either you must buy all of the land at a high price, which may be too high to permit of the construction of a low-cost housing project, or you must permit the sale of a portion of the land at a low cost, and then permit the adjacent development as a private project by way of compensation to the owner of the sum total of the land. · This is what Mr. Straus did. He sold at a very low figure for the Hillside project that portion of his farm which is used for housing. I think it was demonstrated that it is probably the lowest square-footage price of any housing project of a major character in the United States. I think it is fair to say, and I am anxious to be the one to say it, that a powerful argument may be made in behalf of the theory that it is to the advantage of the housing project to purchase land at a low cost and permit the vendor to compensate himself through the development of the adjacent facilities. It is upon that theory that Mr. Straus proceeded; and I repeat

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that while It was a novel philosophy to me, it certainly can be defended with a powerful argument. I am still of the unregenerate opinion that it would be far preferable in connection with these housing projects that all of the land in a common project should be developed for the benefit of the project and as a common whole. On the strength of the situation as I have described itand I think I have fairly presented the situation-! withdrew any objection I had to Mr. Straus' confirmation. I stated to Mr. Straus that I would make this statement upon the floor, and that I would support his confirmation. Mr. THOMAS of Utah. Mr. President, I am very happy that the Senator from Michigan [Mr. VANDENBERG] made the statement that he did. I am glad to be able to report to the Senate, in presenting the nomination of Mr. Straus, that the committee stood 100 percent in favor of his confirmation. I should also like to say that the committee passed upon the worthiness of Mr. Straus. As far as his particular theories as they represent his actions in regard to the Hillside property are concerned, we, of course, are in hearty agreement with him and with what the Senator from Michi.gan said. Probably this development will be one unique in the history of housing in the United States. Mr. President, we did not pass upon Mr. Straus' philosophy of housing, and we trust that his philosophy of housing is not limited entirely to the theory advanced in this particular project. Housing in America must be a very complex affair, because conditions are di:fferent almost everywhere. We trust, though, that in case conditions may be found similar to those of the Hillside project Mr. Straus will not be at all backward in moving in identically the same way that he moved in the development of that project. As I have said before, we cannot expect to have very many projects identical. We did not pass upon housing philosophy. We expect Mr. Straus to know that he must carry on his administration in conformity with the housing law, and we trust that he will develop very many different philosophies in regard to housing in America. Mr. WAGNER. Mr. President, I want to thank the senior Senator from Michigan [Mr. VANDENBERG] for his statement regarding Mr. Straus' business enterprise. I was prepared to explain the enterprise as I knew it, and have known it, but the Senator has explained it better than I can. There is just one thing that, perhaps, might be added. Mr. Straus did find a part of the land which was not taken by the limited-dividend corporation at the time the construction took place. It was vacant and adjoined the commercial enterprise. Mr. Straus leased to the Hillside Corporation, at a rental of $1 per year, that vacant land so that it might be utilized for recreation by the children living in the project and in those houses. I think a close examination will show that Mr. Straus disclosed his philanthropic attitude in this matter as he did in other matters. I know Mr. Straus did not seek this place, but the office sought him. New York was proud to give his services to the country, and I am sure that when the time comes for appraisal none of us will regret that we have confirmed his nomination. I happen to have known Mr. Straus from his boyhood. His family name of Straus is a household word among all the underprivileged and sickly and poor in the city of New York, as my colleague is able to testify from his familiarity with the a-ctivities of Nathan Straus in behalf of the unfortunate poor in New York. I know he came in contact with them during his service as commissioner of health in New York City. This boy grew up holding firm to the great name of Straus established by his father and relatives. He has devoted most of his time to philanthropic purposes and to public service. He served for two terms as a State senator and, by the way, was elected both times in a district that had been overwhelmingly Republican. The people expressed their confidence in his integrity and capacity by electing him overwhelmingly on each occasion.