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Supplement 1 October 17, 1955


1. Pursuant to authority contained in section 3, paragraph (c) of Public Law 875, 81st Congress, as amended by Public Law 134, 83d Congress, and Executive Order 10427, dated January 16, 1953, and for the purposes stated in the Federal Civil Defense Administration Disaster Order No. 2, dated August 31, 1955, the Administrator of General Services, with respect to supplies and equipment determined by him to be surplus to the needs of the Federal Government under regulations of the General Services Administration and pursuant to Disaster Order No. 2, is hereby directed:

(a) To issue appropriate directives and procedures to departments and agencies of the Federal Government authorizing said departments and agencies to make disposals of supplies and equipment to States for sale on a nonprofit basis to small-business concerns in need of rehabilitation as a result of disasters occasioned by hurricanes Connie and Diane of 1955.

(b) To establish procedures for the transfer of such property to the States and to provide rules governing sales to small-business concerns meeting criteria established by the Federal Civil Defense Administration. Sales under this order shall be at a charge by the States to return to the Federal Government not less than 10 percent of the acquisition cost of the equipment and supplies. Such sales may include a reasonable administrative charge by the States.

2. Section B, 2 of the Federal Civil Defense Administration Disaster Order No. 2 is amended by striking out the semicolon in the second sentence and substituting a comma therefor and thereafter adding the following words "except when such property is disposed of as provided in supplement No. 1 hereto." This supplement is effective immediately.

VAL PETERSON, Administrator.

Mr. AITKEN. Senator Bush, I want to thank you, sir, for your comments a few minutes ago. They are very appropriate and very much appreciated.

Senator BUSH. I think, Mr. Chairman, if he will submit that data we can decide whether it goes in the record. We don't want to burden the record too much, but I think this kind of thing may be in line with your questioning.

Senator LEHMAN. You made a statement a little while ago that you realized the difficulty, the vast difficulty, of evacuating a great city. I realize that too because we had that problem in the Second World War. But then you went on to say that your effort would be directed to diffuse the population, to lessen the density of population in any one place. You mentioned Washington. You said some of them would go to Virginia and some of them would go to Maryland and some of them would go other places.

I can make the statement to you that I have lived in Washington now for going on 7 years. I have been deeply interested in this problem. If a bombing attack should come, I wouldn't have the slightest idea where to "diffuse" myself, where to go. Not the slightest. I have never been told, and I think that is probably true of most of the other 900,000 people in the District.

Mr. AITKEN. Senator, you are absolutely right, and that is one of the reasons we think these surveys must be done, because we think that government, Federal, State, and local, has the responsibility to tell its citizens their greatest opportunity for survival. And we think that as a result of these surveys we know that as a result of

these surveys that people in this section of the city will be told which way they should go in the event it is necessary to evacuate the city.

Senator LEHMAN. I mean the District of Columbia, as I understand it, is a Federal Territory. Maryland couldn't tell me to come down to Maryland, and insist on my going. Virginia couldn't. Delaware couldn't. It would have to come from the Federal Government which is in control of the Federal District of Columbia.

Mr. AITKEN. Yes, sir.


Senator LEHMAN. This whole problem is not a very new one. mean, after all, we have been slightly worried about the atomic bomb, and now the hydrogen bomb, for several years.

Mr. AITKEN. Yes, sir.

Senator LEHMAN. I just wanted to point that out, and I hope you will bear it in mind.

Mr. AITKEN. Thank you, sir.

Senator LEHMAN. Thank you very much.

I did intend to ask the Small Business Administration to testify, but Senator Bush has to leave but is going to come back tomorrow, I am very glad to say, and he has asked that we change the order a little bit. So I am going to ask the HHFA to appear.

Mr. Meistrell, will you identify yourself now and then proceed in such manner as you desire?


Mr. MEISTRELL. I am Frank J. Meistrell, Deputy Administrator of the Housing and Home Finance Agency.

Mr. Chairman and members of the committee, I appreciate the opportunity to appear before your committee and furnish such assistance as I can concerning flood-disaster legislation. Mr. Cole, the Housing and Home Finance Administrator, is out of the city and has asked me to express his sincere regrets at not being able to be here today.

To assist in answering questions, I have with me Mr. Mason, the Federal Housing Commissioner; Mr. Follin, the Urban Renewal Commissioner; Mr. Hazeltine, the Community Facilities Commissioner; and Mr. Olmsted, representing the Public Housing Commissioner. Senator, your committee has indicated its interest in the manner in which Federal aid has been provided to victims of recent floods on the east coast. I propose to explain briefly the actions taken and the programs made available by this agency in the areas affected.

I am sure you will appreciate that the Federal Civil Defense Administrator now has primary responsibility for carrying out the relief work of the Federal Government in areas of major disaster, pursuant to the Disaster Relief Act, which is Public Law 875, 81st Congress, and I think Mr. Aitken has explained the basic authority contained within

that act.

The Housing Agency carries out such relief measures under that act as are directed by the Civil Defense Administrator. Additional aid may be furnished by the agency in disaster areas to the extent that it can adjust and make available for this purpose its regular programs relating to housing, community facilities, and urban development.

Immediately after the August floods on the east coast the Housing Administrator and other officials of the agency immediately went to the stricken area and conducted an analysis of the damage that had been inflicted. If you recall, the flood was on August 19, and I believe on August 21 or 22 the housing officials made this trip and covered a substantial part of the stricken area.

Immediately coordination with the Civil Defense Administrator and with State and local governments was undertaken. A special disaster office of the agency was opened for the States of Massachusetts and Connecticut, which, along with our agency regional offices, provided coordinated services to meet emergency housing needs and to inform the public and local official sof the aids that were available and to maintain close and constant contact with the distressed municipalities.

A statement of the aids available from the Housing Agency was immediately prepared and distributed to all other governmental agencies, the National Red Cross, appropriate State agencies, local chief executives, and community leaders who were concerned with providing housing or financing in their separate localities. I believe copies of these statements and instructions have been furnished your committee, Senator.

The first steps taken by our agency were directed, of course, toward meeting the immediate needs of shelter and other urgent needs of families who had been made homeless by the floods. Technical personnel of the agency were transferred to the stricken areas to help the various communities deal with their local disaster problems.

To meet the need for temporary shelter, we authorized all local housing authorities and managers of all federally owned projects in the affected areas to make vacancies avilable to flood victims upon certification of need by the National Red Cross. I think there were approximately 1,400 dwelling units that were made available for occupancy.

The agency also moved some 140 or 150 family trailers into 6 communities in Connecticut and I believe 1 in Massachusetts.

Three hundred units of our vacant defense housing at Groton, Conn., were transferred to the Civil Defense Administration for removal to the various urgent disaster locations.

In Waterbury, Conn., for example, 174 units of temporary war housing and in West Hartford, Conn., 227 units of such housing were made available to flood victims.

When the floods again affected the New England area some few weeks ago, eligibility requirements for admission to existing projects were relaxed and extended, and trailer units again were made available and moved into Danbury, Conn., for emergency housing use. As you know, Senator, the programs of the Housing Agency relate primarily to long-range urban planning and permanent housing and community improvements. These programs were adapted to the fullest extent possible to rehabilitation work in the flood areas as distinguished from temporary emergency operations which I have mentioned.

Every effort was made to adapt the FHA insurance operations to meet the home-financing needs of people in the areas. For example, the Federal Housing Administration authorized all lenders to work out with FHA borrowers whose homes had been destroyed or dam

aged arrangements to suspend payments temporarily on home mortgages and on FHA title I repair and modernization loans.

The FHA also removed for disaster cases the higher down payment and the shorter mortgage term requirements which had recently been adopted with respect to FHA home mortgages.

This assistance was in addition to that already available under provisions of the law which authorized FHA insurance for loans up to 100 percent of value to replace homes of disaster victims where the value does not exceed $7,000.

To assure adequate mortgage credit for home financing in the disaster area, the Federal National Mortgage Association is authorized to make advance commitments to purchase from private lenders FHAinsured and VA-guaranteed mortgages made to disaster victims. Senator LEHMAN. May I interrupt you there?

Mr. MEISTRELL. Yes, sir.

Senator LEHMAN. You say the Federal National Mortgage Association is authorized to make advance commitments to purchase from private lenders FHA-insured and VA-guaranteed mortgages made to disaster victims. Are these new loans?

Mr. MEISTRELL. Under a section, Senator Lehman, of the Federal National Mortgage Association Charter Act, there is a special-assistance provision which authorizes Fannie May to make advance commitments to lenders to purchase those loans.

Senator LEHMAN. Let us assume now the house is destroyed and the mortgage remains.

Mr. MEISTRELL. That is correct.

Senator LEHMAN. What happens?

Mr. MEISTRELL. The mortgage still remains.

Senator LEHMAN. What happens if the man wants to build another house?

Mr. MEISTRELL. Well, if he wanted to build another house the Federal National Mortgage Association would be authorized to make an advance commitment to a lender to finance that other home.

Senator LEHMAN. Does that have to be guaranteed too?
Mr. MEISTRELL. Yes, FHA insured or VA guaranteed.
Senator LEHMAN. There would be two mortgages on it?

Mr. MEISTRELL. There would be two mortgages, but since the later mortgage must be a first mortgage it would be necessary that the earlier mortgage be paid off with funds obtained either from the proceeds of the later mortgage or from other sources.

Under the urban-renewal program of our agency, financial assistance is available to clear blighted areas and prepare them for rebuilding. So far we have had 2 applications approved in I believe Scranton, Pa., and Waterbury, Conn., and applications have been received for similar assistance in tow other communities, and I am informed that applications are being prepared in 11 other cities.

A rough estimate of the total Federal aid contemplated for this purpose would be approximately $10 million.

Senator LEHMAN. Let me get this straight. Are those areas that are blighted because of this disaster or were they blighted before?

Mr. MEISTRELL. Under the Federal law the particular area has to be a slum, deteriorated, or deteriorating area at the time the contract. for Federal aid is entered into. This means, therefore, that the con

ditions in the area immediately following the flood would be considered in determining eligibility for title I Federal aid.

Senator LEHMAN. So that has no relationship to this disaster situation as far as I can see.

Mr. MEISTRELL. Yes. I think Mr. Follin, who is more familiar with the details of these loans, will explain that relationship in his statement.

Senator LEHMAN. Well, as you know, I favor loans on blighted areas for redevelopment.

Mr. MEISTRELL. I know you do.

Senator LEHMAN. But I don't want to get the record confused. I don't want to have it appear as if these loans are something that are a new undertaking. I mean the HHFA has always had that

Mr. MEISTRELL. That is correct.

Senator LEHMAN. Has been directed to do it.

Mr. MEISTRELL. I don't mean to create any impression in your mind, Senator, that this is a new program undertaken as a direct result of the flood.

The agency also has a program of urban planning assistance, and under this program funds approximating $90,000 have been approved to match an equal amount of State funds to provide planning assistance to 14 flood-stricken communities in Connecticut. An application is pending for a Federal matching grant of approximately $95,000 to aid in the replanning of 3 valley regions which were hardest hit by the flood-the Naugatuck, Farmington, and Quinebaug Valleys. Senator LEHMAN. May I return a minute to page 3, the bottom of the page, where you say:

The FHA also removed, for disaster cases, the higher downpayment and shorter mortgage term requirements recently imposed on FHA's home-mortgage program. This assistance was in addition to that already available under provisions in the law authorizing FHA insurance for loans up to 100 percent of value to replace homes of disaster victims, where the value does not exceed $7,000.

Can you tell us how many applications you received in these $7,000 cases?

Mr. MEISTRELL. No, Senator Lehman, I do not have the details, but I think Commissioner Mason who is here could give you the detailed breakdown of the applications.

Senator LEHMAN. You do not know how many were granted? I wonder whether Commissioner Mason can answer that question now. Mr. MEISTRELL. I think there have been very few applications filed so far.

Senator LEHMAN. I wonder while we are on this subject if Commissioner Mason could answer that question readily now?

Mr. MASON. Senator Lehman, it is really too early to get a very full report of this because of the time it takes. In the Connecticut area we have had 25 applications for section 203-that is, the singlehome mortgages-from people who were flood victims but who wanted to build better than the $7,000 house, and 3 applications from people who wanted the low-cost $7,000 house.

In Springfield, Mass., we have had one single-family house application for an amount of $8,000.

In New Jersey we have had no applications of this kind.

In New York City area we have had none.

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