Excerpts from the Press Conference at Warm Springs, Ga

Q. Mr. President, would you care to tell us about the dispute between Moffett and Ickes over housing? That all came out of Washington. We didn't get anything here at all.

THE PRESIDENT: Do you want me to talk, off the record?

Q. That will be fine.

THE PRESIDENT: This has to be off the record. There is no use of injecting me into it, because somebody will say it was denial, and some it is affirming, and some it is settling a row ....

Now, the real answer is a perfectly simple one. We have four and three-quarter million people on relief. Probably half of them are living under very terrible conditions. There are probably another four and three-quarter million people who are not on the relief rolls· Now, that just does not mean people, that means that the four and three-quarter million people on the relief rolls represent eighteen million people on relief.

Taking the two groups living under undesirable conditions, it means that there are nearly forty million people who are of such low earning capacity that they cannot get credit. They cannot get credit, and private capital won't give them credit—I am not saying "improperly." You take the ordinary person, if he hasn't a job or any special capacity, private capital isn't going in and lending him money to build a house. Obviously not. Now, what are we going to do? Are we going to leave him where he is just because he hasn't security to offer for a private loan?

If he falls into the higher class, he comes to Moffett. Now, the simplest illustration is this: that of all the loans made through the Housing Administration today, the average earning capacity of the people get. ting loans is $2,750 a year. Now, that figure of $2,750 a year is nearly three times the average family income in the United States. Therefore the Housing Administration is taking care of people with sufficient earning capacity to obtain a private loan, and it is doing a grand job. It is taking care of the very large number of people, millions of people, who fall into the category of having an income of somewhere, let us say, between $1,500 and $3,500 a year. Those people have found it difficult to go to the bank and get a loan at a low rate of interest because the bank was not certain of things. Therefore Moffett's organization (Federal Housing Administration) goes to the bank and says, "If you put this thing through, it is your responsibility, but you will get Government insurance up to a certain point."

Now, that is doing well for certain people, for that group, but it was never intended that the Housing Administration could persuade banks to lend people with incomes of $750 a year. There is not enough security there. Nor could they do it for people on relief who haven't any income except what they are getting from a Government job or through relief.

That raised the question, "Are we going to call ourselves licked?"

The very simple fact is that in the City of New York there are probably a million people—there are probably two hundred thousand families alone—that is probably a rough guess—whose earning capacity brings them under the thousand dollar a year class. They probably ought not to pay, out of that thousand dollars or less, more than a hundred and fifty dollars a year, let us say, for their rent. They cannot afford it because they have to eat and buy clothes.

Now, what does that mean if the cheapest rooms in the City of New York rent for $12 a room? That means that the whole family can afford to live only in one of those $12 rooms and no other room. They have to cook, to eat, and everything else in one room. If, on the other hand, you can get them rooms for $6 a month, the family can use two rooms.

What is the result? They are living today under most terrible conditions, in old tenement flats, on the East Side, on the West Side. We all know the conditions they live under. They are able to get, on the average, perhaps two rooms at $5 to $6 a room. There is no sanitation, no light— nothing. They are pretty terrible living conditions.

Now, some say, "We are licked. Private capital could not afford to build for $5 or $6 a room. That is not enough." That is their answer, "We are licked."

They say it is not the prerogative of the Government. It is unconstitutional. Like T.V.A., it is illegal. They say the thing, over a period of years, will work itself out some way. Then they also say, "If you go in and tear down these tenements, you are going to cut real-estate values very much." Well, that is true. The value of tenements in the City of New York, including the city-assessed valuations, is much too high. They are being held at those high prices with the hope of the owners that some fairy godmother is going to come along and take them off their hands at this price.

And that is the great difficulty of the Government going in to remove slum conditions in the big cities— the fictitious cost we would have to pay for that land. Yet I suppose there are tens of thousands of parcels of land in the City of New York which are only bringing in 1 1/2 or 2 percent on the assessed value, which is higher than what they can sell them for. But· there is always the hope on the part of the owner that something is going to happen.

Q. If the Government built these homes, who would own them?

THE PRESIDENT: In the case of a tenant there are practically only two methods. One is tenant ownership, which has been used in a 'great many buildings in the City of New York, such as the Bronx buildings that the labor people put up. The tenant, by making extra payments over and above the rent, eventually, in twelve or fifteen years, owns his own apartment. That is tenant ownership.

The other method, especially in those places where you have a floating population that moves out and in a great deal, is a straight Government proposition which, after the Government has been paid back, could probably be sold to private people. In other words, it does not mean that the Government would stay in forever.

Some people also talk about the terrible socialism in what has been done in Germany and England and Vienna in cleaning up slums. They say it was just straight socialism and of course that we couldn't do anything like that. But if you had knowledge of what happened in Germany and England and Vienna, you would know that that so-called socialism has probably done more to prevent communism and rioting and revolution than anything else in the last four or five years. Vienna has practically cleaned out her slums and has done a grand job.

Then, of course, there are the other phases, such as rural housing. We talked about that the other day and you understand the whole objective of it. There, again, we have to put up homes that private capital cannot put up. We have to reach an entirely different group in the community ....

Now, who can buy, for example, a $3,800 house? None of the people on relief. It is too much. It will be taking too much of a chance for private capital to take a fellow off the relief rolls and put him into that house. Now, there are what I call the "marginal" people who are just out on the line, people who have a job, a little bit of a job, making $20 a week as a family. Private capital cannot afford to put them into a $3,800 house. They are too close to the line. It is not a good risk. So, what we are trying to do is to put up houses where these people can go in and where, because of the much lower monthly payments, there is a chance of getting the money back. Private capital cannot do it. It is a field into which Government alone can go, and Government only can do it.

Government cannot say, "We are licked." Other countries have done it and have put up good houses at $1,500 and $1,600. We can come close to doing it here. It does not interfere in any way with the outlet for private capital, not one bit, because they would not go into that field at all.

Q. How much money does it cost the Government?

THE PRESIDENT: It depends on the program. In other words, when it comes down to that, you can take your program and run it from $ 100 to a hundred billion. I mean, that becomes a matter of financing rather than a matter of policy.

Q. Is this on the record?

THE PRESIDENT: No, this is all off the record.

Q. On this housing program we were just talking about, has that been decided on at all?

THE PRESIDENT: In figures, no. In policy, yes.

Q. Could we use that fact?

THE PRESIDENT: Depends on what you use with it. In other words, if I were writing the story today I think it would be perfectly all right to say this, without putting it on me: It has been made increasingly clear by people coming to Warm Springs to see the President (laughter), meaning the press (laughter), that the Government recognizes as a matter of policy its obligation to those people in the United States whose standards of living are so low that something has to be done about it, but whose pocketbooks are so small that private capital cannot properly lend them money. And if somebody asks the question, "Is Government going to consider itself licked in its effort to take care of people who cannot otherwise be taken care of?" the answer is, obviously, "No!" And further, as a matter of policy, the Government is going to continue every reasonable effort—that answers Stevie's question, and I cannot give you any figures- continue every reasonable effort to give the lowest income group in the United States a chance to live under better conditions, for the very simple reason that if Government does not do it, nobody else will or can.

Now, of course, a Government program of that kind is not all one-sided. My "missus" suggests a very excellent addition to it: that it means a very definite lift to the heavy industries not only during the construction period, but also after that period is over. For there will be an additional consumers' demand because, once people get a better standard of living, they are going to insist on maintaining it.

In other words, the policy story is all right, as long as you don't try to get too factual about it, because I haven't any more idea than you have as to the dollars and cents, or whether it will be done, or anything of that kind. . . .

MR. MCINTYRE: In connection with what you said about housing policy, would you have any objection to the use of that part in which you pointed out that there is no conflict?

THE PRESIDENT: That is perfectly all right to use. There was absolutely no conflict. The private dollar won't go into the Government housing that we are going ahead on. If private dollars show any desire to come in, we will be willing to give them every opportunity so to do.