for which the grant is made and shall be subject to terms and conditions prescribed by the Administrator to carry out this section. The Administrator is authorized, notwithstanding the provisions of section 3648 of the Revised Statutes, as amended, to make advance or progress payments on account of any planning grant made under this section. There is hereby authorized to be appropriated not exceeding $5,000,000 to carry out the purposes of this section, and any amounts so appropriated shall remain available until expended.

RESERVE OF PLANNED PUBLIC WORKS

SEC. 702. (a) In order (1) to encourage municipalities and other public agencies to maintain a continuing and adequate reserve of planned public works the construction of which can rapidly be commenced whenever the economic situation may make such action desirable, and (2) to attain maximum economy and efficiency in the planning and construction of local, State, and Federal public works, the Administrator is hereby authorized, during the period of three years commencing on July 1, 1954, to make advances to public agencies from funds available under this section (notwithstanding the provisions of section 3648 of the Revised Statutes, as amended) to aid in financing the cost of engineering and architectural surveys, designs, plans, working drawings, specifications, or other action preliminary to and in preparation for the construction of public works: Provided, That the making of advances hereunder shall not in any way commit the Congress to appropriate funds to assist in financing the construction of any public works so planned.

(b) No advance shall be made hereunder with respect to any individual project unless it conforms to an overall State, local, or regional plan approved by a competent State, local, or regional authority, and unless the public agency formally contracts with the Federal Government to complete the plan preparation promptly and to repay such advance when due.

(c) Advances under this section to any public agency shall be repaid without interest by such agency when the construction of the public works is undertaken or started: Provided, That in the event repayment is not made promptly such unpaid sum shall bear interest at the rate of four percentum per annum from the date of the Government's demand for repayment to the date of payment thereof by the public agency. All sums so repaid shall be covered into the Treasury as miscellaneous receipts.

(d) The Administrator is authorized to prescribe rules and regulations to carry out the purposes of this section.

(e) There is hereby authorized to be appropriated not exceeding $10,000,000 to carry out the purposes of this section, and any amounts so appropriated shall remain available until expended. Not more than 5 per centum of the funds so appropriated shall be expended in any one State.

DEFINITIONS

SEC. 703. As used in this title, (1) the term "State" shall include any State, territory, or possession of the United States, including the District of Columbia; (2) the term "Administrator" shall mean the Housing and Home Finance Administrator; (3) the term "public works" shall include any public works other than housing; and (4) the term "public agency" or "public agencies" shall mean any State, as herein defined, or any public agency or political subdivision therein.

TITLE VIII-MISCELLANEOUS PROVISIONS

SEC. 801. Section 607 of the Act entitled "An Act to expedite the provision of housing in connection with national defense, and for other purposes", approved October 14, 1940, as amended, is hereby amended by adding the following new subsection at the end thereof:

"(g) The Administrator may dispose of any permanent war housing without regard to the preferences in subsections (b) and (2) of this section when he determines that (1) such housing, because of design or lack of amenities, is unsuitable for family dwelling use, or (2) it is being used at the time of disposition for other than dwelling purposes, or (3) it was offered, with preferences substantially similar to those provided in the Housing Act of 1950 (64 Stat. 48), to veterans and occupants prior to enactment of said Act, or (4) it is to be sold with a requirement that it be removed from its present location."

SEC. 802. (a) The Housing and Home Finance Administrator shall, as soon as practicable during each calendar year, make a report to the President for

submission to the Congress on all operations under the jurisdiction of the Housing and Home Finance Agency during the previous calendar year.

(b) Section 311 of "An Act to expedite the provision of housing in connection with national defense, and for other purposes", approved October 14, 1940, as amended; section 6 of "An Act to provide for the advance planning of nonFederal public works", approved October 13, 1949, as amended; and sections 5 and 402 (f) of the National Housing Act, as amended, are hereby repealed. (c) The National Housing Act, as amended, is hereby amended

(1) by striking the heading "ANNUAL REPORT" immediately after section 4 and inserting "TAXATION"; and

(2) by striking from subsection (e) of section 406 the word "Congress" and inserting "Housing and Home Finance Administrator".

(d) The first sentence of section 7 (b) of the United States Housing Act of 1937, as amended, is hereby amended to read as follows: "The annual report of the Housing and Home Finance Administrator to the President for submission to the Congress on the operations of the Housing and Home Finance Agency shall include a report on the operations and expenses of the Authority, including loans, contributions, and grants made or contracted for, low-rent housing and slum-clearance projects undertaken, and the assets and liabilities of the Authority."

(e) Section 106 (a) of the Housing Act of 1949, as amended, is hereby amended by striking "; and" at the end of paragraph (3) thereof, inserting a period in lieu thereof, and striking paragraph (4).

(f) The Federal Home Loan Bank Act, as amended, is hereby amended by striking the second sentence of section 20.

SEC. 803. The Housing and Home Finance Agency, including its constituent agencies, and any other departments or agencies of the Federal Government having powers, functions, or duties with respect to housing under this or any other law shall exercise such powers, functions, or duties in such manner as, consistent with the requirements thereof, will facilitate progress in the reduction of the vulnerability of congested urban areas to enemy attack.

ACT CONTROLLING

SEC. 804. Insofar as the provisions of any other law are inconsistent with the provisions of this Act, the provisions of this Act shall be controlling.

SEPARABILITY

SEC. 805. Except as may be otherwise expressly provided in this Act, all powers and authorities conferred by this Act shall be cumulative and additional to and not in derogation of any powers and authorities otherwise existing. Notwithstanding any other evidences of the intention of Congress, it is hereby declared to be the controlling intent of Congress that if any provisions of this Act, or the application thereof to any persons or circumstances, shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder of this Act or its applications to other persons and circumstances.

The CHAIRMAN. We are very glad to have back with us this morning Mr. Albert Cole, who was an outstanding member of this committee at one time and is now the Administrator of the Housing and Home Finance Agency.

We are very pleased to welcome you back before us, Mr. Cole.
Mr. COLE. Thank you, Mr. Chairman.

The CHAIRMAN. With Mr. Cole is Mr. Hollyday, Commissioner of the Federal Housing Administration, and Mr. Fitzpatrick, general counsel for the Housing and Home Finance Agency.

Mr. Cole has a statement and, without objections, Mr. Cole may proceed without interruption with his statement, after which, of course, he will be very glad to submit himself to whatever questioning there may be by the members of the committee.

Mr. COLE. Mr. Chairman, may I make a suggestion. I think the bill is so constituted that we may, at the end of certain segments,

pause for questioning. For instance, as we finish with FHA titles we will so indicate, and ask Mr. Hollyday to make his statement then and we will submit ourselves to questioning on FHA.

Following that the proposals with respect to the secondary mortgage facilities, and then we will submit to questioning upon that. If that is satisfactory.

The CHAIRMAN. The committee will proceed as suggested.

Mr. COLE. Thank you, Mr. Chairman.

The CHAIRMAN. You may proceed, Mr. Cole.

STATEMENT OF HON. ALBERT M. COLE, HOUSING AND HOME FINANCE ADMINISTRATOR

Mr. COLE. Mr. Chairman and members of the committee, I appreciate very much the opportunity to appear before your committee. It is my purpose to extend to you such assistance as I can in your consideration of H. R. 7839, a bill to aid in the provision and improvement of housing, the elimination and prevention of slums, and the conservation and development of urban communities.

H. R. 7839 is a very extensive housing bill. It covers eight titles in its 107 pages. A rather detailed section-by-section summary of its provisions has been made available to your committee, so I shall try in my statement to cover generally the major features of the bill. I should like to emphasize the fact that this legislation, which embodies a number of measures designed to promote the efforts of our people to acquire good homes and to assist our communities to develop wholesome neighborhoods in which American families can live and prosper, ranks high among the proposals included in the program which President Eisenhower has recommended to the Congress. On January 25 of this year, the President transmitted to the Congress a special message containing his recommendations for housing legislation. In that message the President pointed out that the development of conditions under which every American family can obtain good housing is a major objective of national policy, stating:

It is important for two reasons. First, good housing in good neighborhoods is necessary for good citizenship and good health among our people. Second, a high level of housing construction and vigorous community development are essential to the economic and social well-being of our country. It is, therefore, properly a concern of this Government to insure that opportunities are provided every American family to acquire a good home.

To help find the best ways of meeting this major objective of national policy, the President last fall appointed an Advisory Committee on Government Housing Policies and Programs. Its membership consisted of leading citizens experienced in the problems of housing, mortgage finance, and community development. For the information of your committee we have supplied a list of the names of its members. This Advisory Committee, as you gentlemen know, made an exhaustive study of the existing Federal housing legislation and programs. Also it analyzed numerous proposals looking toward the development of a housing program better adapted to current requirements. I can testify from personal experience that the members of the Advisory Committee worked long and hard on the task assigned to them, for I served as chairman of the committee, and I stayed with

them day after day, night after night, and week after week in their efforts to develop a well-rounded program to better the living conditions of American families. I think the members of this Advisory Committee did an excellent job and performed an important public service.

The conclusions and recommendations of the Advisory Committee were set forth in the report which it submitted to the President on December 14, 1953. I have sent copies of that report to each member of your committee. Most of the conclusions of the Advisory Committee, as well as the results of our own studies and experience in administering the existing housing legislation, were reflected in the recommendations contained in the President's special housing message, and are included in the pending bill.

I desire to advise your committee that I have been authorized by the Bureau of the Budget to state that the enactment of the bill would be in accord with the program of the President. Since the clearance letter contains specific comments with respect to two or three provisions of the bill I am submitting a copy of that letter for the information of your committee.

The CHAIRMAN. Without objection the list of members of the President's Advisory Committee may be inserted in the record at this point.

(The document referred to is as follows:)

MEMBERS OF THE PRESIDENT'S ADVISORY COMMITTEE ON GOVERNMENT HOUSING POLICIES AND PROGRAMS

George L. Bliss, president, Century Federal Savings and Loan Association, New York, N. Y.

Ernest J. Bohn, director, Cleveland Metropolitan Housing Authority, Cleveland, Ohio.

Ehney A. Camp. Jr., vice president and treasurer, Liberty National Life Insurance Co., Birmingham, Ala.

Miles L. Colean, economist and author, Washington, D. C.

A. R. Gardner, president, Federal Home Loan Bank of Chicago, Chicago, Ill. Richard J. Gray, president, Building and Construction Trades Department, American Federation of Labor, Washington, D. C.

Richard G. Hughes, first vice president, National Association of Home Builders, Pampa, Tex.

Rodney Lockwood, past president, National Association of Home Builders, Detroit, Mich.

William A. Marcus, senior vice president, American Trust Co., San Francisco, Calif.

Norman P. Mason, treasurer, William P. Proctor Co., North Chelmsford, Mass. Robert M. Morgan, vice president and treasurer, the Boston Five Cents Savings Bank, Boston, Mass.

Thomas W. Moses, attorney, Pittsburgh, Pa.

Aksel Nielsen, president, Title Guaranty Co., Denver, Colo.

Robert Patrick, financial vice president, Bankers Life Insurance Co., Des Moines, Iowa.

James W. Rouse, the Moss-Rouse Co., Baltimore, Md.

Bruce C. Savage, Bruce Savage Co., Indianapolis, Ind.

John J. Scully, vice president, the Chase National Bank of the City of New York, New York, N. Y.

Alexander Summer, Alexander Summer Co., Teaneck, N. J.

James G. Thimmes, chairman, CIO Housing Committee, Pittsburgh, Pa.

Ralph T. Walker, past president, American Institute of Architects, New York, N. Y.

Pan! R. Williams, architect, Los Angeles, Calif.

Ben H. Wooten, president, First National Bank, Dallas, Tex.

MY DEAR MR. COLE: This will acknowledge your letters of January 15 and February 9, 1954, transmitting drafts of a bill which you desire to present to the Congress, entitled "The Housing Act of 1954."

The major provisions of this legislation were reviewed and agreed upon prior to January 25 when the President sent forward his message to the Congress. The revised draft, as your letter of February 9 indicates, incorporates changes made in the course of these and later drafting sessions in addition to certain changes recommended by the chairmen of the Banking and Currency Committees. Title I includes a new section (sec. 129) authorizing the Federal Housing Commissioner to insure advances made pursuant to "open end" provisions in mortgages. Authority of this type is clearly needed, but this Bureau questions the necessity for the last proviso exempting such advances in determining the aggregate amount of mortgages which may be insured under the National Housing Act.

Title III would drastically revise the present Federal National Mortgage Association, with the objective of shifting as rapidly as feasible to private ownership and control most future assistance to the secondary market for home mortgages. This would be accomplished by requiring each mortgage seller to make payments of nonrefundable capital contributions of not less than 3 percent of the amount of mortgages involved in any purchases or contracts for purchases. The certificates issued evidencing these capital contributions would be convertible into capital stock of the Association when all of the outstanding stock and obligations of the Corporation held by the Treasury have been retired. During this interim period, however, no return would be paid on these certificates. In the interest of encouraging more extensive use of the secondary market and more rapid retirement of the Government stock, this Bureau suggests that provision be made for payment of interest on these certificates at the same rate as provided under section 303 (a) for capital stock held by the Secretary of the Treasury.

During the initial period when the Federal Government would still own and control the secondary market operations of the Association, it would be required under section 309 (c) to make payments to the Treasury in amounts equivalent to Federal corporation income taxes with respect to the secondary market operations. The Treasury Department suggests that the desired objective could be achieved more effectively and with benefit of better public understanding if the Association were subjected directly to income taxation on a parity with private enterprise. Presumably, under this approach if returns were paid on the convertible capital certificates as recommended above, they should be treated as nontaxable expenses of doing business.

Title IV would broaden the existing Federal authority to make loans and grants to local public agencies for slum clearance and urban redevelopment by authorizing similar assistance for other types of urban renewal. The Adminis trator under section 414 also would be authorized to make grants to local public agencies "to assist them in developing, testing, and reporting methods and techniques, and carrying out demonstrations and other activities for the prevention and the elimination of slums and urban blight." The necessity for this additional authority is not apparent, since the activities under the broadened urban renewal program in the normal course of operations, if properly administered, should provide ample opportunity for developing new methods and techniques without requiring separate Federal grants for this specific purpose.

Title VI includes in section 603 (2) detailed legal provisions spelling out the authority and procedures for the Home Loan Bank Board in enforcing its rules and regulations and in appointing conservators or receivers for Federal savings and loan associations. The provision of legislative standards for the appointment of conservators is highly desirable, but the need to prescribe detailed administrative procedures is not apparent.

While this Bureau questions the necessity of desirability of the specific provisions mentioned above, the bill otherwise adequately carries out the recommendations made by the President in his message of January 25 to the Congress. Accordingly, you are advised that there is no objection to the presentation of