(The information referred to above is as follows:)

TABLE I.-Substandard dwellings, United States, 19501

The Housing Act of 1949 expired on June 30, 1954. Under title V of this act, the Farmers' Home Administration was authorized to make loans to farm owners to construct and repair farm housing and other buildings, provided credit was not available to the applicants on reasonable terms from other responsible credit sources.

No request was made for funds in the 1954, 1955, or 1956 budget message of the President to continue this program. It was decided administratively by the Eisenhower administration during the 1953 fiscal year to discontinue making housing loans under sections 502, 503 and 504 of the Housing Act of 1949. This action was taken in anticipation of congressional sanction of the proposed elimination of the farm housing loan program as authorized under the expiring act. However, Congress did not lend support to the elimination of this program. Subsequent Housing Acts in 1954 and 1955 have authorized the Farmers' Home Administration to continue title V loans. However, no funds have been appropriated, mainly due to failure of Eisenhower administration to make budget requests.

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DEFINITION OF A FARM

For purposes of determining eligibility, Congress has defined a farm as land * operated as a single unit which is used for the production of one or more agricultural commodities and which customarily produces or is capable of producing such commodities for sale and for home use of a gross annual value of not less than the equivalent of a gross annual value of $400 in 1944 * * *." Thus housing loans may be made on farms which are too small to meet the efficient family-farm unit requirement of the Bankhead-Jones Farm Tenant Act. Housing loans under title I of the Bankhead-Jones Farm Tenant Act are only incidental to the main purpose of the loan.

REPAYMENT TERMS

Loans are amortized for a period not longer than 33 years and bear 4 percent interest.

Section 502 loans

These loans are made to qualified farm owners who are able to repay such loans in full from farm income and other sources. They are made to construct, improve, alter, repair, or replace dwellings and essential farm buildings, including-provided such items are purchased in connection with a loan to improve the house-heating, lighting, cooking, and refrigeration facilities.

Section 503 loans

These loans may be made to qualified owners whose present incomes from farming and other sources do not appear adequate to make the full annual payment for the first 5 years. Under this section, the Government may make contributions in an a mount equal to the interest and 50 percent of the principal due each year. Such loans may be made for the some purposes as section 502 loans, and, additionally, funds may be included to purchase additional land or to develop the farm of the borrower when necessary to provide the income needed to support the family and enable them to repay the loan.

Section 504 loans

Under this section, loans, grants, or a combination of loans and grants may be made to quaified owner-occupants of farms (see farm definition above) for repairs and improvements to make the dwelling safe and sanitary and to remove hazards to the health of the applicant, his family, or the community. Repairs may be made also to other essential farm buildings in order to remove hazards, and the loans under this section may include funds to enable a borrower to buy additional land or to develop his farm to the extent necessary to supply income sufficient to eliminate or reduce the need for a grant.

FARM HOUSING LOAN REPAYMENT RECORD OF THE FARMERS' HOME ADMINISTRATION

As of December 31, 1954, matured principal and interest amounted to $16,668,296. As of the same date, total payments on farm housing loans amounted to $17,596,774, not counting refunds and extra payments. Thus, the rates of principal and interest payments to matured principal and interest due was 106 percent as of the above date.

If extra payments and refunds in the amount of $1,788,311 were added to the total payment figure of $17,596,774, the ratio of payments to matured principal and interest due, as of December 31, 1954, would be upped to 116 percent. Number and amount of farm-housing loans, by fiscal years

The CLERK. Mr. Chairman, the next witness is Mr. George W. West, on behalf of the Chamber of Commerce of the United States.

Mr. BROWN. I want to say that my friend, Hon. George West, is from Atlanta, Ga. He is a good citizen, and one of the most outstanding businessmen in my State.

He is here today representing the United States Chamber of Com

merce.

Mr. TALLE. Mr. Chairman, may I say to you Mr. West, that our acting chairman, Mr. Brown of Georgia, is a very able Congressman? Mr. BROWN. Thank you, Dr. Talle.

Mr. WEST. Mr. Chairman, and the other members of the committee, let me say that he has long since been entitled to be Congressmanat-Large in Georgia, and we all claim him.

Mr. BROWN. Thank you. You may proceed in your own way, Mr. West.

STATEMENT OF GEORGE W. WEST, ATLANTA, GA., REPRESENTING THE CHAMBER OF COMMERCE OF THE UNITED STATES

Mr. WEST. I am George W. West, Atlanta, Ga., a member of the board of directors of the Chamber of Commerce of the United States. The national chamber is a federation composed of 3,200 chambers of commerce, and trade and professional associations with an underlying membership of 1,700,000 business and professional men.

TITLE I-PROPERTY IMPROVEMENT LOANS

We believe it is desirable to extend the FHA title I provisions as provided in H. R. 9537. The experience of 22 years' operation of the FHA title I program has adequately demonstrated the stability of this arrangement for encouraging home repair and improvement. The low loss ratio about 1 percent-is evidence of public maturity in the use of this type of credit.

We believe that extending the maximum insurable amount of the loans to $3,500, and $15,000 on multifamily units, and extending the payment period to 5 years and 32 days are all justified by the low loss record of title I. The extended payment period and the increased insurable amount would permit homeowners to undertake more adequate home improvements.

An opportunity for furthering the conservation and rehabilitation of the existing supply of housing is presented by the title I provision of the bill.

Millions of homes can be improved as a result of this portion of the proposed legislation in conjunction with home-improvement year which has grown out of the nationwide home-improvement campaign called Operation Home Improvement. Operation Home Improvement is doing much to interest more people in improving their homes and encouraging the home-improvement industry actively to serve the people's desire for better housing.

I have with me copies of a booklet on Operation Home Improvement which describes the extent of the efforts by construction industry manufacturers and distributors, periodical publishers, business associations, and the Chamber of Commerce of the United States to stimulate home improvement. I shall be glad to supply copies of this booklet to the committee.

TITLE IV-PUBLIC HOUSING

The national chamber opposes the proposal in H. R. 9537 (and other bills) for additional federally subsidized public housing.

Federally subsidized public housing is not needed to stimulate employment, as was claimed during the depression years. It is not a cure-all for slum clearane, as has been argued in recent years. It is not necessary as a solution to housing shortages, since this postwar condi

tion has been adequately handled by the construction of more than 10,500,000 privately financed dwelling units since World War II.

This tremendous volume of housing construction has been accompanied by a surge in homeownership. Since 1940 the number of nonfarm homes owned has more than doubled. During this period close to 14 million families have become homeowners. Whereas in 1940 only 41 percent of all nonfarm families owned their homes, today 59 percent own their homes.

This growth in homeownership comes as no surprise when we consider that about 1,200,000 families annually join the ranks of those with yearly incomes of more than $5,000.

We oppose additional federally subsidized public housing for these

reasons:

1. Federally subsidized public housing does not fit in a framework of government which is "of***, by ***, and for the people ***99 Public housing puts the Federal Government in the role of doing things to the people. It fosters special-privilege groups who are given subsidized housing while other people of equal or lower incomes are forced to pay taxes to provide the subsidy.

2. Federally subsidized public housing ghettoizes certain income and racial groups by forcing them all to live in project areas when they accept occupancy in public housing. These people are marked as being wards of the Government.

3. Federally subsidized public housing occupancy arrangements have the effect of destroying incentives because occupancy privileges may be withdrawn when incomes go beyond certain brackets.

4. Public housing which is subsidized by the Federal Government tends to be political housing. Tenants are beholden to the system and to the people who gave them the special privilege of living in housing for less than the full expense of providing it. It would be possible for decisive political power to rest in the hands of those who control public housing if such housing was produced in the quantities recommended by S. 3855. Public housing subsidized by the Central Government is considered a necessary part of socialistic programs. But it is an obsolete and reactionary method of providing decent, safe, and sanitary housing in a free, private, competitive economic system.

We believe that the Federal Government can be a better long-range influence on adequate housing for the American people by encouraging the State and local governments to accept the responsibility for achieving decent, safe, and sanitary housing for needy families.

We urge that the Congress place more emphasis on balanced community development, so that housing, which is just part of community development, can be upgraded through programs of enforcement of adequate housing codes and voluntary rehabilitation. We believe in the competency of the people in their communities to develop such balanced programs.

The national chamber is actively helping community leaders to organize citizen groups, in each of the 2,700 communities having local chambers of commmerce, in our federation, to study their communitydevelopment problems and plan ways to solve these problems.

We have prepared an Urban Development Guidebook which is available to all community leaders and is being used in hundreds of cities in the growing movement to increase local responsibility in all prob

lems of development, including housing. (We have supplied copies of the guidebook to all members of the House Banking and Currency Committee.)

Therefore, the Chamber of Commerce of the United States urges the Congress to eliminate any provision for additional federally subsidized public housing and thus give the American people the opportunity to better their living through the more progressive channels of private sources of housing.

TITLE V -COLLEGE HOUSING

The national chamber believes that the college housing loan program should be terminated.

As an emergency aid under the pressures of the post-World War II period, the Housing Act of 1950 authorized Treasury borrowings of $300 million for long-term loans to institutions of higher learning for construction of student and faculty housing. The housing amendments of 1955 broadened the definition of eligible facilities to include dining halls, student unions, infirmaries, and other essential service buildings and reduced the maximum interest rate on such loans to 234 percent. The Treasury on its own long-term borrowing has recently paid interest at the rate of 3 percent to 314 percent.

Thus a program directed at the GI emergency now has become a lending activity of general aid to colleges and universities.

Private investors, who in recent years have been increasingly attracted to long-term dormitory revenue bonds, cannot compete with the extremely low subsidized interest rates charged on the Government loans. Available lending authority for the college-housing program is expected to be exhausted in fiscal year 1957 and an increase of $100 million has been requested. For 1957 the program is estimated to show a net loss of $631,000.

This program should be terminated. Such termination would not only reduce Government spending but would reduce Government competition with private investors in the lending field.

OTHER PROGRAMS

Loans for public works: We recommend termination of the Federal program of loans for public facilities and suggest that the bill be amended for this purpose.

The Housing and Home Finance Administrator is authorized by the housing amendments of 1955 to make loans to States and municipalities for public works or facilities. Statutory priority goes to small communities of under 10,000 population and loans are limited to applicants unable to obtain funds from other sources at reasonable rates. The program is financed by a Treasury borrowing authorization of $100 million.

This program involves the Federal Government in a business which should be handled by private lending institutions or by State and local governments. Municipalities should be encouraged to handle, on their own initiative, problems of urban development.

The Federal program of loans for public works should be terminated. This program is expected to operate at a deficit of $518,000