For instance, our servicemen are facing a warlike situation in many trouble spots today, such as Berlin, Formosa, the Mediterranean, Korea. The light of history may one day consider that persons serving in such locations as these were serving under warlike conditions.

Not only that, but boys serving in this country, working with the terribly devastating and dangerous nuclear weapons and many weapons under our new weapons system, are incurring as great a danger as many of the boys did in the time of actual war; and I see no reason why a discrimination should be made against them simply because we have tabbed them with labels of "War Service" and "Peacetime Service."

There is one other thing, Mr. Chairman, that I should like to discuss with you briefly. That is the section-section 4-which would make post-Korean veterans eligible for Veterans' Administration guaranty loans for the purchase of homes, farmlands, and equipment for farming operations.

The principal feature of this section would extend to post-Korean veterans the existing benefits now afforded to World War II and Korean veterans to assist them in financing the purchase of the new or existing home.

This would be done either through the loan guaranty program whereby the Federal Government guarantees a lender against loss in case of default, or the direct loan program whereby the Federal Government makes a direct loan to creditworthy veterans living in rural or semirural areas, remote areas, inaccessible to adequate credit for home-purchase purposes.

The proposed extension would do three things. It would continue the existing limitations on maximum amounts; that is, $7,500 or 60 percent of the loan for the guaranty program and $13,500 for the direct loan program. It would continue maximum interest rates, which are presently 44 percent but will become 514 percent if the housing bill which has already passed the Senate passes the House and becomes law.

And, finally, it would continue maximum maturities of 30 years. The one important difference in the proposed program would be the premium charge to be made by the Federal Government of one-half of 1 percent of the principal amount of the loan for the purpose of accumulating the reserve fund to take care of future losses. The existing loan guaranty program contains no such provision and is supported by appropriated funds. The direct loan program, on the other hand, is self-supporting.

By the use of Treasury funds borrowed at a low rate of interest and loaned to the veteran at 4 to 434 percent interest, or it would be 54 if the new housing bill becomes law, this program realized a profit to the Federal Government.

At the end of 1958 the direct loan balance sheet showed a gross profit of $44,500,000.

By the way, Mr. Chairman, may I interject the figure there which I have in mind? I don't guarantee as to its absolute accuracy, but it can be ascertained. I believe that, on direct loan program to date, even though it is a small program and affects only creditworthy veterans in remote areas who cannot obtain funds through the usual

channels, there has been a gross profit to the Government of $44,500,000. That, I think, indicates the very fine program that it has proved to be.

It is relatively small as housing programs go, but it has done a tremendous good to those who otherwise would not have been able to get decent homes for their families.

Senator YARBOROUGH. Senator Sparkman, I want to commend you for your leadership on that. Because I know, coming from a rural area that in this period, both before the war and during World War II and post-World War II, credit has been available in the cities when it wasn't available in the rural areas. That has been a factor that has driven many farm families off the farm. They could move into town and work and get long-term, low-interest-rate loans. They couldn't get similar credit on the farm; and it has been a disadvantage to the agricultural economy of this country.

I think your leadership there has been noteworthy in the field of aiding the agricultural economy and aiding people who generally wanted to live in the rural areas.

And it has been some aid in stopping the flight of people from farms to cities that has gone on at such a terrific rate. Your leadership on public housing in the Senate is known all over the country, as well as your leadership on these veterans bills.

And the thing I want to express my appreciation to you on is: I think your efforts and leadership have been not merely beneficial to some families, but I think they have been and are beneficial to the national economy; what you have done.

Senator SPARKMAN. Well, I appreciate those remarks. I, too, think it has been a tremendous boost to the national economy; not just this veterans bill but the overall housing program which, of course, as you know, has many, many facets to it.

By the way, Mr. Chairman, I don't want to use all my time in reminiscing this morning, but it is always interesting to think back how these programs originated. That thought for the direct loans for veterans was not original with me. It was suggested to me by a man that I suppose would be the last one that anyone would think of a banker. A banker suggested this program to me. He was the president of a bank in a medium-sized town, small place. He wrote me a letter and said:

We would like to help our returning veterans. entitled to a reasonable opportunity to a house. portfolio because of our limitations.

He said:

We think all of them are We can only carry a small

But after we get it full, we can't make any more loans. I think the Government ought to provide a direct loan to help those veterans who live in areas such as this where mortgage money is not available, help them get their houses.

I thought it was a good idea. I got busy and drafted the proposition and offered it as an amendment to a pending bill that was being considered by the subcommittee of which I was chairman. I was successful in getting it passed.

Senator YARBOROUGH. I think that is a very interesting narration of how thoughts come straight from the people in a democracy and are written into law. If you happen to have his name there, Senator Sparkman, if you wanted to state it

Senator SPARKMAN. Mr. Marshall Duger, the president of the First National Bank of Tuscumbia, Ala.

By the way, I saw him just a few days ago, and we talked over this incident.

Senator YARBOROUGH. I am glad you are giving this history of this legislation in the past and these ideas. We will have it printed in the record. It will be available for the use of the Senate. It is most interesting history, particularly to me. I have been here just 2 years, and it has been very beneficial.

Senator SPARKMAN. I shall not take much more of your time. But, of course, as the chairman well knows, this proposal would simply pick up the program-I am not talking about housing now; I am talking about the GI bill of rights-would pick it up as of February 1, 1955. In other words, every boy that went into service up to that time or prior to that time was covered by these various veterans

programs.

Now, my contention-and I am sure it is the contention of the chairman of the committee-is that these boys who went into the service on February 1 are entitled-just as were those who went in on January 31, 1955-to these benefits. I believe it would be a good thing to have a continuing program of this kind.

May I just make this point and then I will quit.

Back in 1942 I think it was, we had the servicemen's pay bill, the Pay Act of 1942.

I had noted through the years how a young man could go into the Navy, learn a trade, serve 20 years, come out still a young man on a 50-percent pension, and be able to carry on his trade in private life. I thought it was a fine thing.

By the way, the Navy never did have to use the draft to get recruits for its service. And I wondered why the Army-of course, then, we only had the Army, Navy, and Marine Corps-and I wondered why the Army couldn't do the same thing.

And I used to work very hard to try to get the Army to adopt some such program. I was successful in getting an amendment to the Pay Act that gave a person going into the Army as a career the privilege of retiring on 50-percent pay after 20 years' service.

In other words, make it the same as the Navy. But for some reason the Army never adopted a program of making it possible for the boy that goes in to learn a trade.

Now, I think there has been more of that in modern times since the development of electronics and new weapons and things of that kind.

But I think a measure such as this, in the absence of that training program incentive that the Navy has had through the years but that the Army hasn't had, would be an incentive for young men to go into the service.

I have been greatly concerned from time to time with young men just graduating from high school who come and talk with me and ask me what they should do. If they went to get a job the first question asked them was: Have you done your military service yet?

If they went to school they didn't know how long they were going to be able to stay there.

They have had difficulty in charting their course and planning their lives. I think this would help.

As a matter of fact, to my way of thinking the ideal way for a boy to do when he finishes high school is to volunteer for his service right then, whatever type it might be. Get it over with; get it behind him. Then he can plan his future.

And this kind of a program not only makes that possible, but also it says to him that, if you will come here and volunteer for the service, you may look forward to a college education depending upon the length of time that you have spent there, or job training, or things of that kind.

It is really in lieu of the training program that the young man who goes in for a year in the Navy gets.

And certainly I think that as long as our boys are drafted, this one is taken and this one is not, I believe that they ought to receive some benefit to recompense them for the time that they have lost out in their work, in their school, or whatever their life might be.

Senator YARBOROUGH. And, Senator, in that draft isn't it often that the economic connotation is this: If a young man is able to go to college by making proper grades, he postpones the draft, and if he has no money and is financially unable to go to college he is drafted?

Senator SPARKMAN. That is right. The fact that a boy is able under his own steam to go to college gives him an advantage over the boy who can't go on his own finances.

Let me please close with this statement. I want to quote Representative Olin K. Teague, who is chairman of the House Veterans' Affairs Committee. I saw the other day that he had made this statement. I am quoting it:

Young men are entitled to some sort of school aid as long as the draft is in effect and as long as they are called to serve tours in Japan and Germany, Korea, and other oversea areas.

It is heartening that our good friend, Congressman Teague, has made this statement.

I know, Mr. Chairman, that you are strongly in favor of the bill's passage. This support bodes well for the passage of this cold war GI bill.

Certainly it has my ardent support, and I want to do whatever I can to help toward its enactment.

Senator YARBOROUGH. Senator Sparkman, the subcommittee appreciates your appearance here, and we appreciate this very fine statement on behalf of this legislation. We appreciate also the history you have given of these other veterans bills. It will be printed in this record and will be of value to the Senate and, I am sure, to the House, too, in its consideration of this legislation.

And, as a Member of the Senate and as just an American citizen, I want to thank you for what you have done on housing programs for all the people in your service in the Congress and the Senate and on all these veterans bills and these veterans programs.

You have been pretty modest this morning in the little credit you claim for the really great leadership you have given this country in housing and educational training for the benefit of all the people of the country-in raising our standard of living and in raising our economic well-being through increasing the gross national output of this Nation.

LIDDADIES

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Senator SPARKMAN. Thank you, Mr. Chairman. I will say this: I have taken seriously the directive that has been given to us under the law of the land and act of Congress. It directed us to do our best toward obtaining a decent home in decent surroundings for every American family. It makes no distinction as to where he lives. Whether he is rural, urban, or what not.

By the way, Mr. Chairman, I am sure you have this already, but it may not be a part of the record.

It seems it might be well to put in the record, perhaps as an exhibit or an appendage to my statement, a listing showing the establishment, extensions, of the VA guaranty home loan program, and also the establishment and extension of the VA direct home loan program. It has a rather interesting history.

Senator YARBOROUGH. That will be received and printed as an appendage to your statement.

(The document follows:)

ESTABLISHMENT AND EXTENSIONS OF THE VA GUARANTY HOME LOAN PROGRAM

1. Public Law 346, 78th Congress, established the VA guaranty home loan program and provided that a veteran could exercise his rights thereunder within 2 years after discharge, or within 2 years after the end of the war (as established by the Congress), whichever was longer, except that in no event could the period exceed 5 years from the date of the veteran's discharge.

2. Public Law 268, 79th Congress, amended the original eligibility time by providing that a veteran would remain eligible for a VA-guaranteed home loan until 10 years after the termination of the war (as fixed by the Congress).

3. Public Law 237. 80th Congress, established the end of World War II as July 25, 1947 (pursuant to Public Law 268, 79th Cong.-this meant that the home loan guaranty program would terminate on July 25, 1957).

4. Public Law 898, 84th Congress, extended the termination date of the program for 1 year, until July 25, 1958. In addition, this law provided that the VA would have until July 25, 1959, to close out the program.

5. Public Law 364, 85th Congress, extended the program for 2 years, until July 25, 1960, and extended the administrative "closeout" time until July 25, 1961.

ESTABLISHMENT AND EXTENSIONS OF VA DIRECT HOME LOAN PROGRAM

1. Public Law 475, 81st Congress (1950), established the VA direct loan program and fixed the termination date for the program as June 30, 1951.

2. Public Law 139, 82d Congress, extended the program for 2 years, until June 30, 1953.

3. Public Law 101, 83d Congress, extended the program for 1 year, until June 30, 1954.

4. Public Law 438, 83d Congress, extended the program for 1 month, until July 31, 1954.

5. Public Law 611, 83d Congress, extended the program for 11 months, until July 30, 1955.

6. Public Law 88, 84th Congress, extended the program for 2 years, until June 30, 1957, and further provided that the Veterans' Administration would have an additional year to close the program out, so that the final termination of the program insofar as administration was concerned would be June 30, 1958.

7. Public Law 102, 84th Congress, extended the program for 1 year, until June 30, 1958, and also extended the administrative time for closing out the program until June 30, 1959.

8. Public Law 364, 85th Congress, extended the program for 2 years 25 days, until July 26, 1960, so that the direct loan program and the guaranty program would have coterminus dates. This law also provided for coterminus dates (July 25, 1961) for the administrative windup of both the direct loan and guaranty programs.

(The prepared statement of Senator Sparkman, follows:)