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c o p fgr y CONGRESS OF THE UNITED STATES HOUSE OF REPRESENTATIVES WASHINGTON, D.C. December 1, 1937 Honorable Franklin D. Roosevelt, The ihite House, Washington, D. C. Dear Mr. Presidents It was my privilege and pleasure to listen carefully to every word of your Housing Message when read in the House yesterday, lou chart the way for further progress along this important avenue toward business recovery, but does it promise enough? The touch-stone, of course, is a method that will attract adequate private capital without extravagant Government underwriting or subsidy. I dislike to criticise any constructive policy without being read to offer for consideration a supplemental suggestion. Here it is: In a recent conversation with Honorable J. H. Allen, Mayor of the City of Des Moines, Iowa, there was unfolded an idea which impressed me as having great merit. Why shouldn't the police power of sovereign states extend to the humanitarian end of eliminating slum districts by long-term financing through the special assessment method? If a State can create drainage and sewer districts whose bonds are supported by the taxing power, unquestionably we can establish rehabilitation housing districts in our cities and towns to the same end. It seems to me that comparatively slight federal, support of such financing would foster the prompt adoption by the State Legislatures of the enabling legislation that may be necessary to permit cooperative municipal action. I am submitting this suggestion also to Chairman Henry B. Steagall of our Bank and Currency Committee. Sincerely yours, (s) Edward C. Eicher ECE:g Edward C. Eicher, M.C. c 0 p I fgr U. S. S. POTOMAC, Dry Tortugas, Florida.. 5 December, 1957. Dear Mr. Eicher:I am happy to have the suggestion contained in your good letter of 1 December, 1957. I appreciate greatly your interest and you may be sure I shall have the matter thoroughly studied. "With best wishes, Very sincerely yours, Honorable Edward C. Eicher, M.C., The House of Representatives Vv ashington, D. C. THE WHITE HOUSE WASHINGTON TJ. S. S. POTOMAC, Enroute Miami, Florida* 4 December, 1937. Memorandum For Mr. Marriner Eceles:The President has asked me to send to you the attached letter from Congressman 1. C. Elcher. With the return of the Congressman^ letter would you please indicate your reaction to the suggestion contained therein? Have had five days of fine weather and some good fishing. Best wishes - /7"?^7W James Roosevelt, etary to the President. Honorable Marriner Eceles, Chairman, Federal Reserve Board, Washington, D. C, Enclosure:(2) December £1, 1957 Memorandum for Mr. James Roosevelt Froms Chairman M. S» Secies This is in reply to jour memorandum of December 4 with which you enclosed a letter to the President from Congressman Eicher, dated December 1, in which the Congressman suggests a new type of legislation to escourage SIUB clearance. His idea is that the police po*er of the States and communities should be •xtead.ed to the hu~ sanitarian end of eliminating slum districts by the issue of long term bonds to be supported by the special assessment method. Mr. Eicher argues that if a St&te caa create drainage and se«er districts, the bonds of •alms are supported by the taxing power, then it can likewise establish rehabilitation housing districts in cities and towns in order to serve the same purpose £ of public health* He then goes on to su&'gest that some slight Federal support of such financing would encourage the adoption by the several State Legislatures of enabling legislation to generate such type of construction. Responding to your request th&t I give you sy reactioa to the above suggestion, I think the gener&l aia of the plaa is «Lr-«dable but I believe the Congressman haE overlooked Boae -mry serious financial hurdles which I think are fatal to the idea, the underlying quality of a special improvement bond is that it is & first lien against property of which the v&iue is a good a&ny times the aaouat of the lien. In fact, tmftt is one of the reasons that the property owners in • given district are willing to subject their property t© the lien* If an improvement district, however, is to consist of improvements which are perhaps several times tha value of the land on which th#y are built, there arises a well-nigh impossible situation* In the- first place, owners of real estate would be very lo&th to subject their property to such a heavy prior lien and ia the second place if you could conceivably get the property owners to subject their l&nd to saefa a heavy H e n , the investing p&blic would eert&ialy not look with a&y favor upon a bond issue which hag such a ssall eushioa of private ownership to insure the performance of the mortgage obXig&tioa. There are, B O doubt, other vmry **r%s*m problems, both legal asd practical, t^i&t would be encountered in attempting to tr&nsl&te Hr. Sicher's saggestion into legislation ai^i thereafter into actual accoaplishaeat ia the way of housi^ eoastructioa* In aany States th©re are coastitatioual liaitations cm the t&x l© 1 ^ that may b® fixed by awaieipalities both as to the a*©is»t of the levy as well as the proportion it bear© to the assessed valuation of the property, la eum, evea if it were at ell possible, I thixdc it would take a long time to geaerate any coastraetioa vmder Mr. Bicker'@ plan* On the other hand, it smms to me a good start has beea made ia the directioa of gln» clearance by the existing program of the United States Hoasing Authority. It would seea to ae that if there is a necessity for the furtlier wtcowrageaeat of States and municipalities to carry oa slum cle&r&aee progra»e, the indicated action is through extension or ealargewent of the present program of that ageacy* Siacerely, M. S. Eccl@8 Chairman
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