That is the purpose of this act. We think that this committee can well write something in that will permit that, because FHA's directions now are that unless they get the final insurance job, so to speak, they will not give you the firm commitment, and they demand that. They preface any agreement you try to enter into with that understanding. One last comment which the Legion testifies to. I do not know whether it is going to be made a part of this record or not. It concerns itself with the Senate Labor Subcommittee.

The Legion made its position very clear, especially with reference to an individual who testified on behalf of the Legion.

No. 1, as the chairman knows, the only people who can testify for The American Legion in this Congress are those who have been authorized by the National Legislative Commission. Anybody else who testifies is testifying for himself alone, and the record should always be made crystal clear. If someone else does, I hope the chairman will ask him for his authorization.

Secondly, there has been an attempt, a bold-faced attempt, to use a veterans' organization to cause two things to occur: (1) Raise the interest rate on a GI loan a half percent, and, of ocurse, we have always said if it ever does go a half percent, FHA by regulation can also go up. (2) to create a secondary market that will be not only 100 percent for all kinds of Government-supported loans but will go back to the very beginning of time. So that overnight these people who have had 4-percent loans can dump them on the market and go into those things that can make more money.

For instance, they can take that 3 or 4 million dollars that they have converted, saddled on to the Government, and instead of reconverting them into GI loans, they can do as is necessary in some States in the country today, when the builder comes to them, they will tell the builder: "No. 1, we want 6 percent as a premium, and you pay that at that window; secondly, we want 6 percent interest, and we want it in advance."

This is the money that they have turned over to this secondary market that they are asking for.

I have no objection to that. I have no objection to any organization, responsible organization, coming in and testifying. But I say that this committee ought to look behind any organization that calls itself a veterans' organization-and I am not talking about any of the national organizations that have been created by this Congress-and ask who supports it, who is paying for the thousands of dollars worth of literature that is going out to mayors, to councilmen, to veterans' organizations, with forms as to how they should pass their resolutions, booklets-I have received four of them-air-mail stamps of 18 and 20 cents on each occasion.

And its only purpose is to make this committee believe that the veterans want this change, this total unrestricted secondary market, and an increase of a half percent. And there is no basis in fact for it. I am sure that this committee will, on the proper occasion, look into that if it is brought before them.

This is most important because it refers to our rural friends. In our testimony this morning before the House the question came up: What can we do with an individual who has a farm, and as we know most farms already have a mortgage on them? We think probably the only way to help that individual is to make available to him the

provisions of the GI bill. We think that can be done by permitting the VA to take a second mortgage against that property.

Today they cannot do that. If there is a first lien on it for the entire farm, they are prevented from doing it.

We think that can be done very simply by section 500-B, striking out the words "shall be secured by a first lien on realty."

Senator SPARKMAN. 500-B of this bill or the Adjustment Act?

Mr. ALESSANDRONI. Servicemen's Readjustment Act. It would have to be made clear by the committee's report here that we do not mean this to be extended to everybody. We mean it to be extended to farm loans only.

Senator SPARKMAN. Why would not the farmer-owner be entitled to come under the loan provisions of S. 1070, which is now law? Mr. ALESSANDRONI. He could.

Senator SPARKMAN. Through the Farmers' Home Administration? Mr. ALESSANDRONI. He could.

Senator SPARKMAN. Then why would we need this?

Mr. ALESSANDRONI. It merely gives him another opportunity to apply. For some reason or other, it has not been too successful. Senator SPARKMAN. It was just signed into law a week ago. Mr. ALESSANDRONI. I thought you were talking about theSenator SPARKMAN. S. 1070, which set up a new farm-housing provision.

Mr. POSTON. Senator, may I make a comment on that? Mr. Rains raised the question, and I believe it was raised on the idea that under S. 1070 they would nowhere cover requirements.

Senator SPARKMAN. That is true. It is entirely too small to take care of the needs. But a veteran can qualify under that.

Mr. ALESSANDRONI. That is correct. This would merely open another avenue and make more funds available that VA might have. Senator SPARKMAN. Did you suggest the language amendment to the House committee?

Mr. ALESSANDRONI. We told them we would file a supplemental statement to that effect.

Senator SPARKMAN. Would you do that here?

Mr. ALESSANDRONI. Yes, sir. We would be glad to do that. (The following was subsequently received for the record:)

AMENDMENT TO H. R. 5231 AND S. 2246 Proposed to facilitate the use of the guaranty benefit for the construction or improvement of a farmhouse where a first lien on the farm property is outstanding

Page 77, line 9, change (b) to (c).
Page 77, line 18, change (c) to (d).
Page 77, line 23, change (d) to (e).

Page 77, insert after line 8 the following:

"(b) By changing the period at the end of the section to a semicolon and by adding the following proviso: Provided, That the Administrator may in his discretion except any loan for the construction or improvement of a farmhouse from the first lien requirement imposed by subsection 500 (b) of this part."

Senator CAIN. I would like to ask one question of Mr. Clorety. In your last paragraph, the last sentence in fact of your prepared statement you say:

America's housing needs can be met by prompt and sufficient action on all fronts in our efforts to convert the national housing policy into 1,500,000 actual new homes annually for the next decade.

Do you see 1,500,000 homes annually for the next decade in legislation which has either been passed or is before the Congress at this time?

Mr. CLORETY. Between the legislation which has been passed and this bill, we see the building industry approaching very close to the 1,500,000. Perhaps they will still be short 100,000 or 200,000. But we believe this bill can narrow that gap substantially.

Senator CAIN. I think it is reasonable to say that presently we are finishing homes about 900,000 a year on the average.

Mr. ČLORETY. Yes, sir.

Senator CAIN. Your feeling is that there are approximately 600,000 more homes in what has been passed and in what is being considered? Mr. CLORETY. Yes, sir.

Senator SPARKMAN. Summarizing your views very briefly-we may have another roll call in a minute-it is your view that the rate of interest ought not to be increased, that the 4 percent should stay; you believe that the present restrictions on FNMA should be relaxed to the extent that credit may be more easily available for GI loans, for 4-percent loans; you believe that we should do away with the doubling up of loans, the combination loans; and you do endorse generally and in most instances personally, because your organizations have not issued mandates on it, a provision for cooperative housing?

Mr. POSTON. We have a specific mandate in the FHA type of housing, following Senator Kefauver's bill on that subject.

Senator SPARKMAN. I gather from your testimony that you also believe that we ought to have the direct loan as provided for in here, to back up further the credit made available to veterans.

Mr. GIESECKE. Under the GI bill.

Mr. ALESSANDRONI. I would like to emphasize, which I did not in my testimony, that we think that should be done on an area basis only, that it is a back-up program.

Senator SPARKMAN. It is a last recourse.

Mr. ALESSANDRONI. Yes, sir.

Senator CAIN. In addition to your summary, is it not true that your veterans' organizations, all of them, believe that no Lanham Act housing should be set aside for low-rent purposes, which can be satisfactorily and reasonably used for individual home ownership? Mr. POSTON. That is correct.

Senator CAIN. Do I state your position reasonably well?

Mr. ALESSANDRONI. I think that is reasonably correct. We do not want to get ourselves in a position, however, of indicating that there are not a number of units in urban areas, many of them nonconforming, to which the local communities have already stated through their elected representatives, that it is their desire to operate them and that they will give first preference to veterans in a certain income group.

We cannot be against that.

Senator CAIN. I do not think I said that. I said that I thought your position is that you were opposed to disposing of Lanham Act accommodations for low-rent purposes which can be used by the veteran purchasers of America, and other priorities that are set up in the bill.

Mr. GIESECKE. We believe that the veterans should be given the first opportunity of buying.

Senator SPARKMAN. Insofar as they are adapted to individual home ownership.

Mr. GIESECKE. Yes, sir.

Senator CAIN. Are you in position to say, as a group of people, that with reference to the 32,000 houses set aside in this bill, that none of those projects-some 120 in number-are suitable for purchase by individuals?

Mr. ALESSANDRONI. We do not know that. There may very well be a number of those that could be made suitable by individual or cooperative housing to private individual veterans.

Senator SPARKMAN. Of course, you do not know that either.
Mr. ALESSANDRONI. That is correct.

Senator CAIN. You just do not know with reference to that? Mr. ALESSANDRONI. It is not just that. If you say I do not know and put it by itself, that indicates that I do not know anything.

Senator CAIN. No. I think your testimony has been very valuable. But with reference to the 32,000 projects set aside in this bill, you do not know the character and characterization of the 32,000.

Mr. ALESSANDRONI. Individually, we do not.

Senator SPARKMAN. You are neither endorsing nor opposing that section. I believe you made that statement in the beginning.

Senator CAIN. If they knew more, they might be for it or against it. They are not in position to subscribe to their own position.

Mr. ALESSANDRONI. That is a non sequitur and it does not follow at all.

Senator SPARKMAN. You find those things rather frequent around here.

Mr. ALESSANDRONI. I have no objection to being charged with anything I have testified to, but I do object to having charged to me what the good Senator testifies to.

Senator SPARKMAN. Mr. Carter?

Mr. CARTER. On those projects for which an offer has been made, certainly we should get consideration as to whether that offer is valid. Senator SPARKMAN. We have another roll call. Senator Kefauver is here and is very much interested in all housing, particularly in veterans' housing. I think we can be back this time in 10 minutes. STATEMENT OF HON. ESTES KEFAUVER, A UNITED STATES SENATOR FROM THE STATE OF TENNESSEE

Senator KEFAUVER. Mr. Chairman, I want to express my very strong endorsement of S. 2246 and congratulate you as chairman, and the committee, upon filing it and the vigorous way in which it is being pursued, and especially to express my appreciation.

I know the American Legion witnesses have had, or will discuss in more detail including the main provisions of S. 1249. I would like to file a statement.

(The statement referred to by Senator Kefauver follows:)

STATEMENT OF HON. ESTES KEFAUVER, A UNITED STATES Senator FROM THE STATE OF TENNESSEE

It is a pleasure for me to voice my entire approval of S. 2246 and to call particular attention to that part of the measure which would provide for cooperative housing, a plan endorsed by the American Legion. Title III of the bill, which is an inclusion of my bill S. 1249, would provide a means whereby families of the

middle-bracket groups could be offered adequate housing commensurate with their income.

It has been my feeling that this middle-income group which comprises a large portion of our population has been overlooked in our efforts to set up a comprehensive housing program. The idea of cooperative housing would do much to aid this group and at the same time alleviate the present crowded conditions. The proposal would encourage and assist nonprofit cooperative ownership housing corporations. Veterans would have the opportunity of joining with other ex-servicemen to form these groups and many who could not otherwise expect to fulfill their hopes of obtaining home ownership would be able to participate in this program. Under the plan the veteran with an average income would be able to buy into a housing cooperative with a comparatively small down payment. There would not be the many extra expenses which so often confront the individual home buyer and which often result in an overburdening of the family finances and an eventual loss of the home. Veterans who are in need of housing would be spared the experience of making hasty and overpriced investments in poorly constructed homes. Membership in a cooperative housing unit would insure them of a dwelling in attractive and wholesome neighborhoods with a relatively sound assurance that they will not have to suffer an overwhelming loss in the event they desire to sell their interest in the cooperative. Apartment houses and apartment units would be uniformly constructed and would afford participants all the pride of personal possession that is experienced by the owner of an individual home. In addition the participants would realize the benefits of the economies of operation which are obtainable in cooperative housing enterprises. There would be no major upkeep costs to the participants and the savings reflected in this would add to the security of their financial future. There are many well organized and efficiently functioning housing cooperatives but it is the general feeling of private investors that housing cooperatives, as a rule, are not soundly conceived nor properly planned. These private investors are unwilling to lend money on such risky terms and seek more secure investments. It is clearly indicated therefore that there is a decided need for the Government to provide the necessary assistance and technical advice to remove these deficiencies.

I believe that it is our responsibility to initiate a housing program that will not only cure the existing undesirable housing conditions but will also provide a means whereby all who desire can participate in a mutual housing cooperative.

It is my earnest desire that the committee will favorably report this bill. Senator SPARKMAN. Do you have anything further? We have about finished, have we not?

Mr. POSTON. Yes, sir. But I would like to make this remark, and I think I speak for most of the representatives at this table.

I think all of us had a small contribution to what we have in S. 2246. It took a great many compromises. All of us did not get everything that we initially started to obtain. I think it affords a reasonable compromise in the thinking of at least the veterans' groups.

We do appreciate you, sir, affording us the opportunity to express our views.

Senator SPARKMAN. We appreciate your appearing here, and we appreciate all the help that the various veterans' groups have given us all the way through in trying to formulate workable legislation. We have felt a very keen deficiency in that phase of the building program relating to veterans' loans, and did feel that something very definite needed to be done.

All of you have been a great help to us in trying to work out, as you said, a workable compromise.

Mr. GIESECKE. We thank you very much, and other members of the committee.

Senator SPARKMAN. I have a statement from Mrs. Marie Jordan, of the Gold Star Wives of America, Inc., which will be inserted in the record at this point.