with the Department of Agriculture and use the State agricultural departments and colleges. The Department of Commerce, through the Bureau of Census has already demonstrated its ability as a fact-finding organization. The figures and data obtained and analyzed in the census reports have the respect of the entire industry, as well as the consumers. It must also be considered that the Department of Commerce has already, with the approval of Congress, established a Construction Division which is assembling valuable data and statistical studies touching on the construction industry, including housing. The Department of Commerce has facilities in the field, of spot checking the data from time to time. These facilities may be enlarged to serve all the objectives anticipated in the provisions of title II of the act. We are also familiar with large scale research now being undertaken by private enterprise. This will be a further aid to the housing industry. INTRODUCTION TO STATEMENT OF TITLES III, IV, V, AND VI Our approach to the analysis of the provisions of titles III, IV, V, and VI is best explained by a section taken from my report to the membership and presented to it at the annual meeting on November 15, 1945, from which I quote: There is a serious housing shortage throughout the entire Nation and mortgage funds are required for industrial and commercial expansion. The mortgage banker has a grave responsibility and must give every assistance possible, and the best of his talents, to avoid an inflationary trend. We have maintained that this can better be done at the lending level than at the price level and this is what the Director of the Office of War Mobilization and Reconversion meant at point 4 of his six point program, which reads as follows, and I quote: "The Federal credit agencies will cooperate to discourage excessive and unsound lending on mortgages and enlist voluntary cooperation of private lenders to minimize the danger of inflated prices due to excessive demand." To those of us who have conducted a mortgage business during World War I and through the boom and depression which followed there is recognized no more serious hazard in our business than overlending. When once started, it grows in our economic system like a cancer in the human body, and can end only in ruining the fine tradition of the mortgage as a sound investment. Legislation, price control, and all of the regulatory measures are of little value, if we, ourselves, do not watch our day to day transactions. The trend toward overlending is manifesting itself in every area and through many lending agencies. This charge applies to many members of our association as well as those that are not. The pressure to get the funds employed is great, and the same specious arguments that we heard 25 years ago are being used to justify our acts today. We would like to draw the committee's attention to the following schedule showing the total mortgage debt in the United States as of December 31, 1944, which shows that the Savings and Loan Associations held approximately $4,750,000,000 of mortgages compared to the total mortgage debt of $31,656,000,000. I present that table of figures because I did not find it in any other testimony, and I think it will give to the committee some figures which were compiled by our association to show the distribution of mortgage money as we find it today. That means that the total mortgage debt held by the various groups classified here is about $31,000,000,000. Percentagewise, the amount of mortgages held by the Savings and Loan Associations is approximately 14 percent of the total, or about one-seventh. These mortgages are fairly well distributed. That is, the life insurance companies hold about $6,600,000,000; the Savings and Loan Associations $4,750,000,0000; the Mutual Savings Banks $4,297,000,000; Commercial Banks $4,344,000,000. And the fraternal societies and associations and organizations, which are largely through the Middle West, are also becoming an important factor in the mortgage field. The detailed figures are as follows: Total mortgage debt in the United States as of Dec. 31, 1944 Urban mortgages of Federal agencies: Home Owners' Loan Corporation_ Total____. Farm mortgages of Federal agencies: Federal land banks Federal Farm Mortgage Corporation 3. Farm Security Administration Total for Federal agencies___. Urban and farm mortgages of private agencies and others: We are of the opinion that any legislation designed to assist the housing program should give encouragement to all the important lendng groups which include the life insurance companies, the mutual savings banks, commercial banks, and trust companies. We must not overlook the fact that there are almost 150,000,000,000 dollars in liquid assets in the hands of individuals which will eventually find their way into purchasing power and investment. There are approximately 70,000,000 life insurance company policyholders; likewise, there are about 45,000,000 savings depositors; there are somewhere between 8 and 10 million members of fraternal organizations. There are also the millions who purchase War and Victory Bonds. These are thrifty Americans whose interests must be protected against inflation and future loss. The superabundance of investment funds on one hand and the ultimate $300,000,000,000 national debt presents a situation which makes it essential for private enterprise and Government, alike, to take whatever steps are necessary to avoid inflation which would bring eventual loss to those millions of thrifty citizens. The most extravagant estimates of new housing requirements are 12,500,000 in the next 10 years; most estimates are about half that number. We can, therefore, make the deduction that the people now requiring housing, although their needs are acute because of the building restrictions of the last 5 years are relatively few in relation to our entire population. This does not mean that we should not take a sympathetic attitude toward the housing situation and do all within our power to correct it, but at the same time we must maintain a stable economy. We have talked to thousands of builders within the last few months in search of information which would help us to solve this importan national problem and the universal response from builders and ma terial men is the same from all sections of the country. It can be stated simply as follows: The building industry is ready and willing to proceed in the most active building program that this country has ever known, but the industry wants to move with the minimum governmental control and restraint, and above all, without govern mental competition. Secondly, if the uncertainties in the Office of Price Administration could be cleared up, it would be the greatest help that could come to the building industry, and it would seem to us that with the assist ance of the Federal Housing Administration, the OPA could develop a formula on rent restrictions for new construction which would further encourage active building. I personally am rather inclined to believe that if private enterprise and governmental departments could hold firm at the lending level and all restrictions be lifted or rents for new construction, the present housing shortage could soort be relieved. As to public housing, our association has gone on record as op posing public housing, and we are definitely of the opinion that the credit of the Government should not be used for the development of housing needs except in case of catastrophe. We are naturally going to be asked the question: "How about housing for the lowe income groups?" and as this bill pertains, in a large measure, to housing for the lower income groups, we feel that this question should be answered here. We would direct the committee's attention to the fact that the average cost of all types of dwellings has been reduced from $4,38 in 1930 to $3.263 in 1912. The averages were distorted by war housing in 1943; however, we find the average cost in that year was $2.830 and this was in a year of high building costs and the scarcity of labor. We believe that further reductions can still be made. Senator MITCHELL. Are you saying there, Mr. Mahan, that private lending is meeting the need for housing in the lower income group? Mr. MAHAN. I say that it is gradually eliminating the problem. I would not say it has completely done so. But I am trying to point out to the committee at this point that over the years, in spite of higher building costs, the average cost per dwelling unit is being lowered constantly. Senator MITCHELL. When would you estimate that the job will be done? Mr. MAHAN. I wish you would let me finish, and then I will come back. With increased wages and full employment, and a continued effort on the part of the building industry to decrease the cost of individual dwelling units by more efficient construction methods and larger scale housing, we believe that a large sector of our population known as the lower income group could be supplied with adequate and decent homes. There is a sector of our population which would be classified as the handicapped, the indigent, the pauper, the laggard, and these require public aid. This, however, is a social problem and should be approached by the local communities and States. Senator MITCHELL. Do you have any estimate of the total percentage of the population which would be in that group? Mr. MAHAN. I have been trying to get figures from the reports which I have read, and the thing that confuses me is that all the figures showing the lower-income group which have been supplied to me, generally include this sector of our population. Senator MITCHELL. But that sector would be a very, very small percentage of the total population? Mr. MAHAN. As a matter of fact, it is pretty large. Senator MITCHELL. One-fifth of the lower-income group would fall in this category? Mr. MAHAN. That is purely a guess. Senator MITCHELL. How can you guess? Mr. MAHAN. Well, you can take various localities. In some localities, the percentage runs high, or low. You know the number of people in your institutions. Senator MITCHELL. The testimony here has indicated that the housing situation makes the people you are talking about here. Mr. MAHAN. Well, I do not entirely agree with that. I have lived in the country, and I have lived in the city. I know the habits of our city people, and I know the habits of the people in the rural areas. You will always have a large factor, a large sector of these people who are classified in this group. Senator MITCHELL. Of course that is a varying sector? Mr. MAHAN. I would say it is quite general. I see them in good times and bad. I saw them in the depression. Senator MITCHELL. I mean across the country. Mr. MAHAN. Yes. I have seen them in good times and bad. That type of people, I think, have been with us through the ages. Senator MITCHELL. But your 20 percent is based only on your own observation? You do not have any specific figures to support that? Mr. MAHAN. I do not believe there are specific figures on that, but I think some of the social agencies have figures which would more or less support that estimate. The CHAIRMAN. Did you read the testimony of Mr. Blandford here? Mr. MAHAN. Yes, I did. I did not read it completely. I saw it last night, and only went over it very hurriedly. The CHAIRMAN. Well, he had estimates on the lower-income group, how much is needed for them, the shortage of housing there, and questions like that. Mr. MAHAN. The best studies that I have seen on the subject have been made by independent agencies. I saw one from New Haven, Conn., made by the Association of Public Health, I believe is the agency that made it. And I am convinced in my own mind that the census figures and the deduction taken from the census figures does not make a proper differentiation between the people of this group and the people who are really unable to project their services into an income which is sufficient to support good housing, or a good home. Another thing, while we are on that subject, I would like to poin out some observations which are not matters of housing at all. I have seen, and you have seen two families-here is a family that earns twelve or thirteen hundred dollars a year. Right next door to th family is a family who have the same identical earning power, twelve or thirteen hundred dollars a year. The one family is a thrifty fang ily. They buy their groceries and they pay for them. They have a comfortable home and they maintain it. The other family is al ways The CHAIRMAN. Is this on $1,200 a year? Mr. MAHAN. Yes, sir. I have seen very comfortable homes main tained on $1,200 a year. The CHAIRMAN. With a family? Mr. MAHAN. With a family. The CHAIRMAN. Is that so? Mr. MAHAN. They do it through thrift. They all work. Th daughters and children work. They are thrifty. Right next to the is the same identical kind of a family, who do not have any of the elements of thrift. Senator MITCHELL. To have that illustration stand up, you woul have to tell us the whole background of the two families, in order have it mean anything to the committee. You would have to tra it all the way down, to show whether housing had anything to do with the thriftiness of one family and the waste of the other. The illustra tion by itself does not mean a thing. Mr. MAHAN. The isolated instance, no. But you can pattern tha I have spent all my life in credits. For 30 years I have done nothing but handle credits for financial institutions, for myself or organiza tions which I represented. And that is an element which you must recognize. Now I will refer to Missouri, for instance. The CHAIRMAN. Where? Mr. MAHAN. The State of Missouri. While we are on the subje we will take St. Francis County, which is not an industrial count It is a farm area. Some years ago they brought to St. Francis County a great many miners to work in the lead mines of St. Francis County St. Francis County ceased to be a mining area, and those families mained there. They were not adapted to agriculture. They were not adapted t working in the fields, growing crops. They were purely miners. A the result, that county in Missouri has always been a social proble Now the point I am making here is that the problem is not housing in that county, it is a social problem. And that projects itself int so many studies that you make of those particular problems. It is social problem, which means rehabilitating those people and conve ing them to areas where they can be productive citizens, in the p |