We cannot overemphasize the urgency and necessity of governmental direct loans which will either make mortgage financing on equal terms and conditions available to racial minorities or will encourage competing private financing resources to provide funds on this basis. Our sole criticism of the amendments in this respect is that they would limit the direct loans only to cooperative and nonprofit housing. Actually, this recourse should be available under any circumstances where economically and structurally sound housing is obstructed solely because credit is withhold on discriminatory grounds. We would urge your committee to take this serious deficiency into consideration. It is essential to afford racial minorities a truly equal opportunity to improve their housing conditions. Beyond this point of emphasis, we would indicate only that the amendments appear to be eminently sound and potentially invaluable in meeting the urgent housing needs of the millions of families now neglected in housing's no-man's-land. We would appreciate your placing this letter of our endorsement in the record of the hearings before your committee. Sincerely yours, MARY MCLEOD BETHUNE, Founder-President. Average value, average interest rate, and holder of first mortgage on 1-family nonfarm owner-occupied property, by race of occupant, for the United States, 1940 Source: Adapted from Sixteenth Census of the United States, 1940: Housing, vol. IV, Mortgages on Owner-Occupied Nonfarm Homes, table A-4 (p. 9), table A-10 (p. 13), and table A-13 (p. 17). NATIONAL ASSOCIATION OF HOUSING MANUFACTURERS, Hon. BRENT SPENCE, House Office Building, Washington, D. C. MY DEAR MR. SPENCE: The Banking and Currency Committee has given much attention to the problem of reducing housing costs. Last year, a notable study of this subject was completed by a Senate Subcommittee on the High Cost of Housing. Its conclusions included recommendations to reduce housing costs by stimulating mass production of housing through the use of industrial techniques which have proven successful in other manufacturing fields, and have given America industrial leadership throughout the world. Congress accepted these recommendations of the Subcommittee on the High Cost of Housing and included section 102 in the Housing Act of 1948 which authorized RFC to make loans for the mass production of housing through either factory production or large-scale on-site operations. Several loans have been made under this authorization and a number of producers have expanded their operations to achieve lower housing costs. However, as was pointed out by Mr. Raymond Foley, Administrator of the Housing and Home Finance Agency, a major obstacle has arisen in the achievement of lowering housing costs through mass production. That obstacle is the difficulties and delays in obtaining ade quate consumer financing, which has made impossible the mass distribution that must accompany the mass production of these manufactured houses. Experience has proven that existing systems of mortgage financing are not geared or adapted to the mass marketing and distribution of houses coming off assembly lines. As president of the General Panel Corp. of California, this has been our experience, and I am told by other companies they have encountered the same problems. Consequently, if the benefits of lower housing costs are to be achieved by mass production of housing, it is necessary to enact the amendments to section 102 contained in H. R. 5631. The present section 102 does only half the job-the production half. Unless the other half is done of enabling mass distribution of these houses, the purpose of this legislation will not be accomplished. The present obstacles to mass distribution of these manufactured houses would be overcome by two provisions in the H. R. 5631 amendments to section 102: (1) The provision increasing the authorization by $50,000,000 which would provide working capital financing to large-scale developers who are undertaking a mass distribution of the houses of manufacturers who stepped up their production with loans under the original authorization under section 102; and (2) The provisions which will enable producers to accept mortgages in connection with the sale and distribution of houses, and thus avoid the difficulties and delays in obtaining adequate consumer financing. These difficulties and delays in consumer financing have prevented mass distribution of manufactured houses and, therefore, the people have not gotten the advantages of mass production. It is essential that these amendments in H. R. 5631 be adopted in order that the purposes of section 102 may be accomplished and progress achieved in reducing housing costs through the economies which have typified other mass production and mass distribution operations in American industry. I would appreciate it if you would incorporate this letter in the hearings on H. R. 5631. Respectfully yours, ALBERT WOHLSTETTER, Vice President, National Association of Housing Manufacturers. STATEMENT OF MRS. MARIE JORDAN, CHAIRMAN OF THE BOARD OF THE GOLD STAR WIVES OF AMERICA, INC. During the past 5 years the Servicemen's Readjustment Act of 1944 has aided many veterans in establishing themselves in civilian life by making it possible for them to obtain loans for the purchase of homes. The proposed amendment to the Housing Act of 1949, H. R. 5631, would greatly liberalize this opportunity and make it much easier for veterans to obtain such loans in the future. Thus a great many more veterans will be aided in providing for the security of themselves and their families. The families of those men who gave their lives in service, however, have never been extended these advantages. The widow of the deceased serviceman now has the full responsibility as the head of her family. It would help her greatly in establishing a better way of life for herself and her children if she would find it possible to finance a home of her own. A little over a year ago, our organization sent out questionnaires to war widows in 45 States. Over 60 percent of these women reported that their housing accommodations were entirely inadequate. When asked if it would help their situation if Government-guaranteed loans were made available to them, 55 percent expressed a desire to purchase their own homes if they were given this opportunity. Thus, based on a total of 97,000 war widows in the country, approximately 53,350 would, in all probability, apply for loans. This is a small group, compared with the number of veterans taking advantage of these provisions, but a group that greatly needs such assistance. Senator Myers, of Pennsylvania, and Senator McMahon, of Connecticut, have introduced in the Senate an amendment to S. 2246, which is similar to the House bill, H. R. 5631. This amendment would give war widows the same opportunities for home loans that would be extended to veterans under this proposal. The members of the Gold Star Wives of America, Inc., all of whom are widows of men who died in service, believe that this amendment is a most constructive means of helping the country's war widows provide better living conditions and security in the future for themselves and their children. ECKSTEIN Co., Hon. BRENT SPENCE, Pittsburgh 12, Pa., August 10, 1949. Chairman, House of Representatives Banking and Currency Committee, House Office Building, Washington, D. C. DEAR SIR: As wholesale distributors of heating, plumbing, and roofing equipment we frequently have occasion to observe the importance of FHA title I loans to our dealers and their customers. We know that a very large percentage of the homes in this country are owned by people of moderate means. We know that heating, plumbing, and roofing equipment wears out eventually and must be replaced. That means a major outlay for the home owner that he often can ill afford and that must be financed through a time payment plan. FHA title I therefore makes possible repairs and replacements for several hundred thousand home owners who otherwise might not be in a position to keep their property in good condition and enjoy proper health and comfort standards. We therefore recommend the lifting by the Banking and Currency Committee of those sections of H. R. 5631 having to do with FHA title I. We further recommend that the committee report the foregoing favorably to the House for passage. We believe that FHA title I should be set up on a permanent basis and that it be separately legislated and permitted to continue without deadline subject to annual review by the Congress. Please arrange to incorporate this letter in the official records of the public hearings on this subject, and further please give the subject your own favorable consideration. Yours truly, J. E. ECKSTEIN. CLEVELAND, OHIO, July 30, 1949. Hon. BRENT SPENCE, Chairman, House of Representatives, Banking and Currency Committee, House Office Building, Washington, D. Č.: As representatives of 25,000 dealers in the warm-air-heating industry we recommend the lifting of sections from H. R. 5631 having to do with title. I of the National Housing Act. That title I should be separately legislated and permitted to continue without deadline subject to annual review by the Congress. A very high percentage of the approximate 10,000,000 warm-air-heating systems in our country are owned by people of moderate means. Furnaces wear out and must be replaced at an estimated annual rate of 400,000 units per year. Title I makes possible repairs and replacements to several hundred thousand furnace users, who otherwise might not be in a position to keep their property in repair and enjoy proper health and comfort standards. Please arrange to incorporate this message in the official records of the public hearings on this subject. NATIONAL WARM AIR HEATING AND AIR CONDITIONING ASSOCIATION, The CHAIRMAN. The committee will now adjourn, to meet Monday morning at 10 o'clock. (Whereupon, at 12:30 p. m., the committee adjourned to 10 a. m.,. Monday, August 8, 1949.) HOUSING AMENDMENTS OF 1949 MONDAY, AUGUST 8, 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, Hays, Rains, Buchanan, Multer, Deane, Mrs. Woodhouse, Messrs. McKinnon, Mitchell, O'Hara, Kunkel, Talle, and Cole. The CHAIRMAN. We will hear Mr. Boggs, who was once a very useful and able member of this committee. We will be glad to have his views. Mr. BOGGS. Mr. Chairman, I appreciate the opportunity to appear here before my old committee. The CHAIRMAN. We all know who you are, but state your name. STATEMENT OF HON. HALE BOGGS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF LOUISIANA Mr. BoGGs. My name is Hale Boggs. I represent the Second Congressional District, which is the best district in Louisiana. Mr. Chairman, I missed being on this committee, but I want to compliment the committee. When I was on it, we never got anything passed. The CHAIRMAN. That is all right. Now that you are properly identified, you may proceed. Mr. BOGGS. Mr. Chairman and members of the committee, I have a little prepared statement here. It will take just a few minutes to read, if I may. Before reading it, however, I would like to make a brief preliminary statement. Last year on the committee the gentleman from Georgia, my good friend, Mr. Brown, was extremely vocal in attempting to do something practical and constructive about this problem of a secondary market for GI loans. As a matter of fact, if my memory serves me correctly, practically every housing bill that was introduced or that was considered on the floor in both the first session and the second session of the Eightieth Congress, Mr. Brown offered amendments to achieve that result, all of which I supported very vigorously, but at best we succeeded only to a partial extent, in my opinion. Now, I feel that we have got a problem here. I do not pretend to have any solution or any pride of authorship in my solution, but I trust that in the deliberations of the committee with the bill now before you that some genuine effort--and I am sure it will be-will be made to work this problem out. On April 1, 1949, I introduced H. R. 3989. At that time I had made a survey of the reasons for the decline in the GI home loan program. The results of that survey showed clearly, in my opinion, that one of the principal reasons for the decline in home loans guaranteed under the GI Act was a very limited secondary market which was holding down the $10 holder and available home mortgage credit. I just completed a second and a more extensive study of the homeloan program which in my opinion again emphasizes a need for more adequate market facilities, such as those I proposed in 3989. In order to help expedite consideration of and a decision on various proposals for assisting the GI loan program, I recommend and urge that the provisions of H. R. 3989 be considered as amendments to H. R. 5631 now before the committee. I urge that the provisions of my bill be incorporated in H. R. 5631 and from a practical point of view amendments can be worked out on pages 20 and 21 so that we may have a more expanded secondary market as soon as possible along with other expanded facilities to assist the financing of homes of veterans and others. The total amount of GI home loans made to date is approximately 81⁄2 billion dollars. The bulk of these loans were made prior to April 30, 1948, when the total stood at about $6,800,000,000. This date is of relatively great importance as I shall show. Public Law 864 and Public Law 901 of the Eightieth Congress specified April 30, 1948, as the beginning date for the acceptance of privately financed home mortgages on both the GI and FHA basis by the Federal National Mortgage Association. This association was authorized by Public Law 804, to which I referred, to purchase home mortgages from approved lending institutions, providing the loans were under $10,000 ceiling. It further provided that no lender could sell more than 50 percent of his eligible loans made after April 30, 1948. I think that date and the other restrictions helped account for a good part of the decline in the GI home-loan program. I think there has been a slight pick-up recently, but insufficient to indicate that there will be any major upswing until some of these restrictions on the secondary market can be eliminated. In my home State of Louisiana I am very familiar with the operation of building and loan associations and homesteads, as we call most of them, which have always done a splendid job in financing homes for our citizens. I might say, Mr. Chairman, that those are very conservative institutions and very sound institutions, financially. I believe that I can justify before this committee with complete good faith, when private enterprise is involved, because I think I was as active as anybody in the Congress in supporting the general public housing bill which was recently enacted by the Congress, but it is my feeling that we have to use every conceivable device of private enterprise of government to meet the problems of housing at this time. Therefore, I shall use savings and loan associations as a major example in a brier résumé as to how the GI loan program has dropped off and why. Looking at this picture naturally, we find that prior to April 30, 1948, savings and loan associations throughout the United States |