FURTHER STATEMENT OF RICHARD C. DYAS, CHIEF, HOUSING Mr. COLE. Do you have any agreements with Lustron? Mr. COLE. Are you able to state whether RFC is satisfied with the management of Lustron? Mr. DYAS. Let me say we are not dissatisfied. There, again, we have no yardstick we can switch to measure our views. May I amend my former remarks in one respect, Congressman, if I may take a moment? I gave you some statistics with respect to the number of loans we made under the National Defense Authority and the 102 authority. I would like to add to that that in addition to the statistics I gave you, we have made some 30 to 40 million dollars additional loans to aid in housing construction, the major proportion of which has been made to aid prefabricated houses. That is one amendment I would like to add to my previous remarks. Mr. MULTER. Possibly the way to help them with their problem is for Lustron to take back purchase money mortgages and sell them to FNMA. Mr. DYAS. I am glad you made that observation. The CHAIRMAN. We will meet tomorrow at 10 o'clock. (Whereupon, at 4:50 p. m., the committee was adjourned, to reconvene at 10 o'clock, August 5, 1949.) 94397-49- -29 over two or three houses a day. Next week we have to get him up to ten. The CHAIRMAN. How much is your production increasing, last month as compared with this month? Mr. STRANDLUND. It was almost twice. For August it will move up, I think, almost again as much, because we are just getting going. It will come fast at the present time. The CHAIRMAN. What do you have to produce today to make it profitable? Mr. STRANDLUND. That is an estimate, Congressman. With some people it will vary and it depends on the conditions, but I think you have to do 35 to 40 a day to break even. Of course, the capacity of the plant is well over 190. The CHAIRMAN. How many are you producing now? Mr. STRANDLUND. We are just working one shift to perfect production, but we are making 26 a day on that one shift. Mr. MULTER. How many days a week? Mr. STRANDLUND. Five. The CHAIRMAN. Have you a demand for all you can produce? You do not have trouble selling them, do you? Mr. STRANDLUND. We have a public demand way beyond what we can produce, Mr. Chairman, but I am just explaining how the time factor of our dealers getting on the same ratio geared up to supply their demand is the thing that kind of lags us. In other words, we may have a tremendous pressure with the dealer, but, in turn, he has a period of a month or two to go through to get his business geared up, both in capital and in tools and men, to keep pace with the orders that he has. The CHAIRMAN. How long do you think it will take you to gear it up to production to make it profitable? Mr. STRANDLUND. I think about 90 days. We are right on the eve. We are in production, we have our equipment now, we have an organization, and my estimate is about 90 days to get up to a basis of breakeven. At the outset, to give myself 30 days more leeway would not be too much, but I think our sales plans and production plans are pretty well knit together to do that. Mr. COLE. I am not sure whether I asked about the balance sheet and whether or not that may be made a part of the record. I asked that it be made part of the record and I ask if there is a ruling on it. The CHAIRMAN. I think in private enterprise, where the stock is not widely held, that it should not be made part of the record. It can be made available to the committee, but I don't think it should be part of the public record. Mr. BUCHANAN. The stock is not publicly held. Mr. COLE. I think the RFC holds it. I do not have it. The CHAIRMAN. Do you manufacture anything besides houses? Mr. STRANDLUND. No. The CHAIRMAN. Does your concern manufacture anything besides houses? Mr. STRANDLUND. No, it does not, just houses and component parts of the house. Mr. GAMBLE. Did you live in one of your own houses? FURTHER STATEMENT OF RICHARD C. DYAS, CHIEF, HOUSING Mr. COLE. Do you have any agreements with Lustron? Mr. COLE. Are you able to state whether RFC is satisfied with the management of Lustron? Mr. DYAS. Let me say we are not dissatisfied. There, again, we have no yardstick we can switch to measure our views. May I amend my former remarks in one respect, Congressman, if I may take a moment? I gave you some statistics with respect to the number of loans we made under the National Defense Authority and the 102 authority. I would like to add to that that in addition to the statistics I gave you, we have made some 30 to 40 million dollars additional loans to aid in housing construction, the major proportion of which has been made to aid prefabricated houses. That is one amendment I would like to add to my previous remarks. Mr. MULTER. Possibly the way to help them with their problem is for Lustron to take back purchase money mortgages and sell them to FNMA. Mr. DYAS. I am glad you made that observation. The CHAIRMAN. We will meet tomorrow at 10 o'clock. (Whereupon, at 4:50 p. m., the committee was adjourned, to reconvene at 10 o'clock, August 5, 1949.) 94397-49-29 HOUSING AMENDMENTS OF 1949 FRIDAY, AUGUST 5, 1949 HOUSE OF REPRESENTATIVES, COMMITTEE ON BANKING AND CURRENCY, Washington, D. C. The committee met, pursuant to adjournment, at 10 a. m., Hon. Brent Spence (chairman) presiding. Present: Messrs. Spence, Brown, Monroney, Buchanan, Multer, Dollinger, Mitchell, Gamble, Kunkel, Talle, McMillen, and Cole. The CHAIRMAN. The committee will be in order. Dr. O'Leary will be the first witness. Will you take the stand and identify yourself for the purpose of the record, Doctor? STATEMENT OF DR. JAMES J. O'LEARY, DIRECTOR OF INVESTMENT RESEARCH OF THE LIFE INSURANCE ASSOCIATION OF AMERICA Dr. O'LEARY. My name is James J. O'Leary. My statement has reference to H. R. 5631. It is respectfully submitted on behalf of the American Live Convention and the Life Insurance Association of America, jointly representing life-insurance companies which underwrite over 95 percent of the life insurance in force in United States companies. These organizations have a combined United States membership of over 225 companies, with resources exceeding $50,000,000,000, belonging to about 78,000,000 policyholders. A recent survey made by the Federal Reserve Board shows that 67 percent of all spending units-roughly analogous to families-with incomes from $1,000 to $2,000 and 84 percent of all spending units with incomes between $2,000 and $3,000 own life insurance. Seventyeight percent of all spending units own life insurance. The live-insurance companies, consequently, have a primary interest in the same broad mass of people in which your committee is interested. As I shall show later in this statement, the life-insurance business has played an important part in financing the postwar housing needs of this country, and we hope to play a continuing important role. It is for this reason that I appear here today to oppose H. R. 5631, particularly the direct Government lending provisions in the bill. This bill is not only unnecessary in the present housing market, but if passed it will undoubtedly further hamper the free flow of funds into housing via normal market channels. It is but one more step in a long series of Government measures which have been narrowing down the sphere of free initiative in the operation of savings institutions in the housing and mortgage lending field. |