veterans, and report back to said city council at our earliest convenience giving them a complete report, with recommendations, of the steps necessary to complete the acquisition of these developments, including the cost to the city of Los Angeles. Enclosed please find two certified copies of said resolution. In addition, the housing authority has also been requested to acquire these three projects by its veterans' advisory committee which consists of the commanders of the county councils of all recognized veteran organizations in Los Angeles County. Two copies of a resolution duly adopted by said committee on March 3, 1949, is also enclosed. The Los Angeles County Council of the American Legion adopted a special resolution requesting the authority to acquire said projects at its regular meeting held on March 4, 1949. Two copies of said resolution are enclosed. In connection with this matter your attention is directed to a letter dated March 30, 1948, addressed to your then regional director, Mr. Jesse Epstein, from me as chairman of a subcommittee of the mayor's emergency housing committee, to consider the advisability of locally acquiring federally owned war housing projects located in the city of Los Angeles. That letter enclosed a copy of this subcommittee's report which was approved by the mayor's emergency housing committee and by the mayor of the city of Los Angeles. The report is divided into two parts, viz, acquisition of permanent war housing projects and temporary war housing projects. Your attention is specifically directed to that part of the report concerning the acquisition of permanent war housing projects wherein it specifically recommends that if after a reasonable time the residents of Channel Heights, Normont Terrace, and Dana Strand Village have not submitted a satisfactory proposal for the acquisition of these projects that the housing authority exercise its priority and acquire said projects for the purpose of low-rent housing for the families of veterans. You will note that the report confirms previous action taken by the mayor's emergency housing committee on September 13, 1946, in this regard. A copy of that letter and the report are enclosed. For your information no reply was ever received from the PHA to this letter. We would deeply appreciate your consideration of this matter and advising us concerning same at the earliest possible date in order that we may comply with the request of the city council previously referred to. Very truly yours, HOUSING AUTHORITY OF THE CITY OF LOS ANGELES. CITY CONTROLLER, GREETINGS: At the meeting of the council, held August 2, 1949, the veterans' affairs and public housing committee submitted the following report: "In the matter of communication from the Housing Authority of the City of Los Angeles, recommending that the council approve the acquisition, by said housing authority, of three federally owned war-housing projects located in the Wilmington area, designated as Channel Heights, Dana Strand Village, and Normont Terrace, pursuant to provisions of Senate bill 2246 and H. R. 5631, now pending before Congress: "The housing authority calls attention to the fact that under the provisions of said legislation these projects can be acquired without expense to the city other than tax exemption, but even on this point payment in lieu of taxes up to 10 percent of the annual shelter rent collected is authorized; also that occupancy in the projects will be limited to the families of veterans and servicemen of low income, and adequate safeguards are provided to assure compliance with this provision. "We recommend, in accordance with recommendation of the housing authority that the acquisition of said projects by the housing authority, pursuant to provisions of said legislation, be approved." On motion duly made and carried, said report was adopted by the council. Respectfully yours, WALTER C. PETERSON, City Clerk. CERTIFICATION STATE OF CALIFORNIA, County of Los Angeles, ss.: I, Walter C. Peterson, city clerk of the city of Los Angeles and ex officio clerk of the City Council of the city of Los Angeles, do hereby certify and attest the foregoing to be a full, true, and correct copy of the original letter embodying action of the council of the city of Los Angeles taken at its meeting held August 2, 1949. File No. 36973 on file in my office, and that I have carefully compared the same with the original. In witness whereof, I have hereunto set my hand and affixed the seal of the city of Los Angeles, this 2d day of August 1949. [SEAL] WALTER C. PETERSON, STATEMENT OF HON. J. FRANK WILSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS Mr. WILSON. Mr. Chairman, I would like permission to insert into the hearings on H. R. 5631 before your committee a communication, dated July 28, 1949, which I received from Mr. W. W. Salmon, assistant secretary-treasurer, Southern Trust & Mortgage Co., Dallas, Tex., which pertains to a duplication in appraisals by the Veterans' Administration and the Federal Housing Administration in processing GI loans. (The letter referred to is as follows:) Congressman J. FRANK WILSON, SOUTHERN TRUST AND MORTGAGE CO., House Office Building, Washington, D. C. DEAR FRANK: I understand that recently RFC, of which Federal National Mortgage Association is a part, was granted a $500,000,000 appropriation on the basis of a House and Senate resolution, pending the outcome of permanent legislation for additional appropriations partially for the use of FNMA in purchasing paper on FHA- and VA-approved home loans. Since we sell a good deal of our GI paper to FNMA, we, as undoubtedly other lending institutions throughout the country, are interested in certain requirements of the Agency which have previously been imposed either by the act or by regulations under the act. The most disturbing of these embodies the following statement to which the lender is now required to certify and is contained in their seller's certificate, FNMA Form 39, a copy of which I am pleased to enclose: "(6) The housing with respect to which each mortgage was made meets the construction standards prescribed for insurance of mortgages on the same class of housing under the National Housing Act, as amended:" This has been interpreted by us and by others as meaning that the lender must certify to such construction as would be acceptable to the FHA in order to be in compliance with the construction standards in the National Housing Act, as amended. Frankly, we have not felt that we could honestly certify to construction acceptable to FHA for insurance. As a result, we have required, and we understand there are others who have followed the practice of requiring builders to obtain FHA firm or conditional commitments on proposed or existing construction in order to feel safe in making the certification even though the sale of the loan to FNMA might be contemplated as a straight GI 501 transaction. In other words, in discussions on this point with officials of RFC, both locally and in Washington, we have been told that it is the lender's responsibility to certify to the sufficiency of construction, irrespective of whether FHA approval is obtained. There are many ramifications to the National Housing Act and it has been our feeling that since FHA has operated under the requirements of this act longer than any other Government lending institution of its kind, we should certainly feel safe in having their approval of the construction since the standard of their requirements is in strict compliance with the act. The fact that the lender (or seller in the language of FNMA) is considered to be solely responsible for making this certification has encouraged the lender to protect himself insofar as possible by obtaining the opinion of FHA in the form of their approval of the construction. Equally as many or perhaps more loans are sold to FNMA as straight 501 transactions. In such cases, although the approval of the man and the construction has been obtained from the Veterans' Administration, we still have not felt secure in executing the certification without having FHA's approval, since the language in the certification refers to the National Housing Act, and since there seems to be some question as to whether the requirements of the act are recognized as being applied to VA's operation in the same sense as FHA. Consequently, the cost of obtaining a GI appraisal, as well as an FHA appraisal, has been present in connection with all the GI loans which this organization has made. My point is simply this: Would it not be possible, since the purpose of VA is thought to be generally the same as FHA, either to amend the certification to specifically refer to FHA or VA approval, which must be obtained in any case where a loan is sold to FNMA, or in some fashion to have it clearly understood that VA's construction requirements recognize standards of the National Housing Act, and that their appraisal would be recognized equally as to such standards for the purpose of the sale of loans to FNMA? In this way the veteran borrower or whoever might be paying for the appraisal would be avoided the cost of an FHA appraisal fee as is now required under our operating policy. Furthermore, the lender would feel perfectly safe in making a certification on the basis of a GÍ appraisal which is not now the case. Please understand that some lenders do not require both appraisals when making a GÌ loan. There are others, however, who do; and, perhaps while the matter involves purely a technicality, we have not wanted to have any repercussions later on loans sold to FNMA and have felt that by obtaining the certification of the agency which applied the requirements of the National Housing Act, our position would be much more substantial in the event some question should arise. My purpose in bringing this to your attention is that if there is a bill pending in which might be incorporated the tools for operating on the basis of either agency's approval of a loan, it would certainly make it less costly to process a GI loan and conserve considerable time. I am perhaps somewhat presumptuous in assuming that matters of this nature might come within the scope of your operation, and it is not my wish to burden you with something which should be referred to someone else. I shall consider it a favor, therefore, if you will not allow yourself to be burdened with this matter unless you consider it to be something for you to handle. I shall, however, appreciate whatever you might be able to develop toward curing this situation. Thank you very much for your past courtesies and always feel free to call on me if I can be of assistance to you. Yours very truly, W. W. SALMON, Assistant Secretary-Treasurer. (The following communications were received for inclusion in the record:) Hon. BRENT SPENCE, HOUSE OF REPRESENTATIVES, Washington, D. C., August 10, 1949. Chairman, Committee on Banking and Currency, House of Representatives, Washington 25, D. C. DEAR MR. CHAIRMAN: I am prevented by pressure of other duties from appearing personally before your distinguished committee in behalf of a favorable report on the so-called middle-income housing bills-my own bill is H. R. 4517— and therefore I should like to take this means of expressing my enthusiastic support of the principles embodied in these bills. This is said with a realization that necessarily discussion and debate will show administrative defects of the basic drafts which can properly be remedied by orderly procedure of the House. As to the fundamental purpose of the various bills submitted, I have no such reservations. This, I believe, is the proper and democratic way of encouraging and making possible the widest possible individual home ownership. This is the way to make and hold faithful adherents of our democratic way of life-by encouraging and making secure the capital investment in a democratic America of the little man. The man who owns property will never listen to the siren call of false ideologies; he will have a stake in his own country as important to him as that of a millionaire. I hope sincerely that the committee will favorably report one of these bills, or a new clean bill embodying the basic principles, in this session; and I pledge my support now. With kind regards, I am Sincerely yours, ARTHUR G. KLEIN, AMERICAN LEGION, Hon. BRENT SPENCE, Indianapolis, Ind., August 1, 1949. Chairman, House Banking and Currency Committee, House Office Building, Washington, D. C. DEAR CONGRESSMAN SPENCE: I understand that Department Commander Whittemore of the Department of California today testified before your committee on the housing amendments bill of 1949, and that during the testimony he questioned the right of National Vice Commander Walter Alessandroni to speak for the American Legion on this bill. Should his question have raised any doubt in your mind, or in the minds of any of the members of your committee, please let me assure you that Mr. Alessandroni, as a national vice commander and also in his capacity as consultant to the American Legion's housing committee, was entirely within his rights and had been specifically requested to testify as to title 4 of the bill by Mr. Bert Giesecke, who this year is chairman of the national housing committee. Will you please so inform the members of your committee, and say to them also that the American Legion appreciates the courteous attention which you and the members of your committee, who were present last week, gave to the testimony presented by Bert Giesecke and Walter Alessandroni. Very truly yours, PERRY BROWN, National Commander. (The following statements and communications were received for inclusion in the record:) STATEMENT OF BERNARD WEITZER, NATIONAL LEGISLATIVE REPRESENTATIVE, JEWISH WAR VETERANS OF THE UNITED STATES OF AMERICA On behalf of the Jewish War Veterans of the United States of America, I appreciate this opportunity to register our support of Chairman Spence's bill, H. R. 5631, which has been duplicated in identical bills introduced by some 40 other Members of the House. The objectives of the bill were essentially approved at the Fifty-third Annual Encampment of the Jewish War Veterans at Kiamesha Lake, N. Y., September 1948. At that encampment, our organization also approved the objectives since included in S. 1070 and H. R. 4009, the Housing Act toward the passage of which your committee contributed so greatly. Your committee has had, during its hearings, a surfeit of evidence which has not been successfully contradicted regarding the need of housing at a cost which can be met by that great group of American families, a very large percentage of whom are veterans, whose income is in the vicinity of $2,500 to $4,000. Those who have opposed H. R. 5631 have been almost entirely representatives of the same organizations which fought so bitterly the passage of H. R. 4009, plus representatives of mortgage finance groups. All of these have voiced practically the same line of arguments which they voiced against H. R. 4009. Practically all of them approved those sections of H. R. 5631 which grant them immense benefits of Government help, including the help of the Federal Treasury. But they opposed bitterly those sections of the bill, such as the aid to cooperatives, which are the only means to provide decent housing at rentals approximating $50 to $80 per month. On that issue, the real estate interests and the financial groups stand together. Again they have raised the cry of "statism and socialism." Again they point with pride to their marvelous record of the number of homes built and the number and total volume of mortgage financing. Somewhat grudgingly, they yield a measure of credit to the VA and FHA loan programs. As to the FHA program, all of us remember how they first fought, ignored, and belittled it. Then they reluctantly accepted it and now want more and more of it, plus "Fannie Mae," plus the right to charge higher interest rates. They have no hesitancy in getting direct loans from the Government for themselves through the use of the mortgage-purchasing power of "Fannie Mae." But they lift the right index finger sternly against loans to cooperatives as provided in title III of H. R. 5631. The financial groups have shown no interest in financing cooperative buildings for the $2,500 to $4,000 a year income earners on terms which these middleincome earners can afford for the housing they need. As a matter of fact, the financial groups practically admit they cannot make such loans at a profit but they are opposed to having the Government do, what they can't do. They cry "socialism and statism." The reality is they insist that those who need home loans must pass through the toll gate and pay the toll which these financial groups demand. We respectfully urge your committee to report H. R. 5631 favorably. BERNARD WEITZER, National Legislative Representative. STATEMENT IN SUPPORT OF THE SPARKMAN-SPENCE HOUSING AMENDMENTS OF 1949, IN COMPANION BILLS S. 2246 AND H. R. 5631, PRESENTED BY WALTER H. AIKEN FOR NATIONAL BUILDERS ASSOCIATION, NATIONAL ASSOCIATION OF REAL ESTATE BROKERS, NATIONAL TECHNICAL ASSOCIATION, NATIONAL NEGRO BUSINESS LEAGUE My name is Walter H. Aiken, I am a contractor and builder of some 27 years standing. I am president of the National Builders Association which antedates the NAHB. The National Builders Association, National Association of Real Estate Brokers, National Technical Association, and National Negro Business League have authorized me to represent them in presenting testimony to the proper committees of Congress in support of the housing amendments of 1949 set forth in companion bills H. R. 5631 and S. 2246. These national organizations represent and speak for the thousands of builders, real-estate operators, lenders, brokers, bankers, savings and loan investors, technicians, and businessmen among Negro private operators in the planning, development, financing, marketing, and management of housing, with special reference to meeting the more acute but often neglected needs of Negroes and other racial minorities. Mr. Chairman and members of the House Committee on Banking and Currency, we very much appreciate this opportunity to bring before you our position in support of the Sparkman-Spence housing amendments of 1949 incorporated in House bill H. R. 5631 and Senate bill S. 2246. We should like, first, to express our appreciation to the Banking and Currency Committees of the House and Senate as well as to the Congress and the Executive for their long and continuous fight to afford opportunities to every American family to acquire decent housing within its means. To that end, the enactment of the Housing Act of 1949 into law by this Congress represents a monumental step for which we are all profoundly grateful. We have felt the beneficial results of governmental programs already authorized by the Congress and administered by executive agencies with due regard for minority-group participation in the benefits. Our people everywhere have been immensely encouraged in their search for decent homes and our families are deeply grateful. But, as you know, we represent a large and important segment of American families whose housing needs are recognized as still the most acute and the least adequately met. Therefore, based upon our practical experiences, which have been subjected to careful review and appraisal through a series of regional and national meetings held during the past year, we have attempted to define the specific obstacles and deficiencies encountered and to outline additional tools and assistance necessary to overcome them and provide equal opportunity to racial minorities, along with other groups, to acquire decent housing of their choice within their means. While we have already discussed these problems and objectives with local, regional, and national housing officials and are encouraged by the consideration received, we feel very strongly that they involve considerations of such high import as to merit further attention by the Congress as well as the Executive. It is with these considerations in mind that we are supporting the housing amend |