estate values in his locality, we get a higher order of competency woven into the life of our program. Mr. MONRONEY. Well, I think it is the general feeling of the public and Congress that they have little question on FHA inspections and FHA handling of this program-at least as to the inspection. And I do not see why, if one agency can get competent people on a salary basis, VA could not arrange, on a fee basis, for FHA to do that work so that we would have one set of appraisals and one set of standards. I know you cannot meet FHA neighborhood standards where you are building out in the country, where FHA will not approve additions and things of that kind. But, as to construction standards, I do not see why one job could not be done instead of a duplicating job. Mr. KING. Mr. Congressman, I would welcome questioning along that line further after these gentlemen carry out their intention of obtaining the statistics on that subject because I think maybe there will be some surprises in those statistics. Secondly, if you will read last Saturday's Washington Star, you will find a statement by the Federal Housing Administration, or emanating from unnamed FHA officials, saying that FHA cannot give this inspection that it is supposed to be giving today and that it is not, in its own estimation, giving adequate inspections. Mr. MONRONEY. Well, that is partly the fault of the Congress in not providing sufficient funds in last year's bill. Mr. KING. Well, we are all blaming everything on Congress. Mr. MONRONEY. Obviously, if you are going to build a million houses a year, you cannot do it with a staff that is designed to carry a load of 500,000. We have got to realize that, if we are going to double the housing program, we have to pretty nearly double the inspection service. Mr. KING. We feel somewhat the same way, Mr. Congressman, regarding our present budget. Mr. MONRONEY. I might say that I think it is very poor economy not to have proper inspection, because we are putting $9,000,000,000, I believe you said, behind these loans and then cannot be sure our security is there for those loans; and we are not only doing ourselves an injustice, but we are also doing the veterans an injustice. Mr. KING. One more point in favor of the use of fee personnel is this: The use of fee personnel is splendidly conditioned to meet peaks and valleys. It has enough leeway and cushioning in it so that you do not have to put another 150 people on the pay roll today, or another 500 people, to meet this month's volume and then, 90 days from now, when the work slackens off, throw 150 people off the pay roll. Incidentally, I challenge anyone to tell me that they can get competent personnel to come on the pay roll on that basis. Mr. BUCHANAN. How long do you think it will take you to get these statistics so that you can submit them to the committee? Mr. KING. Mr. Congressman, I understood you were to get them. They are not available to me. Mr. BUCHANAN. So far as your Veterans' Administration program is concerned your inspection program-you made a statement here that, so far as the Veterans' Administration inspections are concerned, they would not bear out the popular complaints that the difficulty has been with your inspection rather than with Federal Housing Administration's inspection. The complaints we get from the Housing Expediter's office, wherein the complaints have given cause for action in the courts against builders, in my particular district, have been as a result of the Veterans' Administration inspection program and not as a result of the Federal Housing Administration inspection program. Mr. KING. Mr. Congressman, I can give you an analysis as to your district which I can get from Veterans' Administration records. I can also make some assertions in a letter to this committee as to what incidents of complaints we have had or have been directed to our attention as a result of our inspection service, but I can fairly confidently tell you that those would be fairly few. I suggested to you that the statistics which would be revealing as to that would be in the hands of other agencies-mostly the Office of the Housing Expediter and those statistics are not available to me on my request. They would be available to you or to this committee on your request. Mr. MULTER. You do not permit your fee personnel to determine minimum construction requirements; do you? Mr. KING. No, sir; we have prescribed the minimum construction requirements for this fee personnel. As a matter of fact, Mr. Congressman, they have in hand the Federal Housing Administration Minimum Property-Requirements booklet. Mr. MULTER. It is intended to continue to use Federal Housing Administration minimum construction requirements in connection with future GI loans? Mr. KING. Yes, Mr. Congressman, for the reason that I mentioned to the chairman earlier: that we do not want to confuse the builder by handing him two sets of Government standards. Mr. MULTER. Then, why do you recommend in this bill that the Administrator-meaning the Veterans' Administration Administrator -be given the power to establish minimum construction requirements? Mr. BUCHANAN. Section 401. Mr. KING. Because there are many of the loans that are made under this program that are not made under Federal Housing Administration auspices at all, and Mr. MULTER. Whether they are made under Federal Housing Administration auspices or not, if you are taking Federal Housing Administration requirements as your minimum construction requirements, why do you have to have the power in the Administrator to set up new minimum requirements? Mr. KING. For this reason, Mr. Congressman: That the Federal Housing Administration minimum construction requirements are not as rigid as a steel building or steel superstructure. According to the words of a very high Federal Housing Administration official, "they are changeable from day to day." If you will look at a single page of those minimum construction requirements, you will find, as to individual specifications, that in four or five places on that page it will say, "as determined by the chief underwriter." So, they are subjective requirements. Veterans' Administration, therefore, in the daily working process, is required to supplement that feature of the minimum construction requirements by saying, "All right; the use of that material will suffice. We do not and will not make our requirements lower than those prescribed by the Federal Housing Administration." Mr. MULTER. You would have no objection to having this section amended to read: unless the property conforms to the minimum construction requirements prescribed by the Administrator, which shall in no event be less than those prescribed by the Federal Housing Administration. Mr. KING. I would be very glad to have it put that way. Mr. BROWN. Mr. King, several other members of the committee desire to interrogate you, and I wonder if you could come back some other time. We have scheduled for tomorrow morning at 10 o'clock, Mr. Foley, so I wish you would see the clerk and arrange with him at what time to come back. Mr. KING. I will be glad to do so, Mr. Chairman. Mr. BROWN. Thank you for appearing before us this morning. (Further statement and suggested amendments submitted by Mr. T. B. King appear at p. 205.) Mr. BROWN. The committee will adjourn until tomorrow morning at 10 o'clock. (Whereupon, at 12:30 p. m., the committee adjourned, to reconvene at 10 a. m. Wednesday, July 27, 1949.) HOUSING AMENDMENTS OF 1949 WEDNESDAY, JULY 27, 1949 HOUSE OF REPRESENTATIVES, COMMITTEE ON BANKING AND CURRENCY, Washington, D. C. The committee met, pursuant to adjournment, at 10 a. m., the Hon. Brent Spence (chairman) presiding. Present: Messrs. Spence, Brown, Patman, Monroney, Rains, Buchanan, Multer, Deane, Mrs. Woodhouse, McKinnon, Addonizio, Dollinger, O'Hara, Kunkel, Talle, Cole, and Hull. The CHAIRMAN. The committee will be in order and we will resume hearings on H. R. 5631. Mr. PATMAN. Mr. Chairman, I want to express my appreciation to you for putting on all these witnesses at the same time-that is, the American Legion witnesses and the witnesses who supported the American Legion bill for cooperative housing. This morning I believe you have Mr. Alessandroni, the national vice commander of the American Legion, but he is not here at the present time. However, Mr. Giesecke is here, and he is chairman of the national housing committee of the American Legion, if you wish to hear from him. The CHAIRMAN. Very well. Mr. POSTON. Mr. Chairman, my name is Robert R. Poston. I am chairman of the legislative committee of the American Legion. It gives me pleasure to appear before you today and introduce Mr. Giesecke, who already this session has appeared before you. He will comment upon the various titles of the bill, excluding title IV, concerning amendments to the Servicemen's Readjustment Act. Mr. Alessandroni, whom we hope will be here before the hearing is adjourned today, will testify on that subject. The CHAIRMAN. Very well, Mr. Poston. STATEMENT OF BERTRAM E. GIESECKE, CHAIRMAN, NATIONAL HOUSING COMMITTEE, THE AMERICAN LEGION Mr. GIESECKE. Mr. Chairman and gentlemen of the committee, I am happy to have this opportunity of presenting to you the American Legion's viewpoint on several of the titles of H. R. 5631. I want to express for my organization its appreciation of the increasing realization on the part of the members of this committee of the fact that the general housing problem is a most important one and of the further fact that its impact on the young veterans of World War II is most serious. Last October, the American Legion at its thirtieth annual convention, which was held in Miami, Fla., adopted a series of resolutions looking toward the accomplishment of a comprehensive and wellrounded housing program which would help toward making possible the provision of adequate, decent, sanitary, and livable housing, through home ownership, where practicable or by lease where more advisable, for all Americans of all income levels, with special preferences and opportunities to be provided for those who so recently have served this Nation in its armed services. These young men and women who served you and me for four long years had no opportunity of accumulating a part of the monetary profits which are the result of the lush business of wartimes. In the main, they were of the enlisted personnel with an average pay of $100 per month-less deductions for laundry, insurance, and home allot ments. On their return to civil life they were faced with the necessity of replacing clothing, furniture, tools of their trade, and other necessities in a market highly inflated. They did not, and they do not yet, have the backlog of savings which might give them an "even break" with the average nonveteran of the same income bracket. In its housing program for 1948-49, the American Legion recognizes that there are basically three income groups which must be served: 1. The lower 10 percent for whom private industry has not been able to provide adequately for and whom Federal aid is essential. By Resolution No. 771, the American Legion endorsed public housing and slum clearance, and its officers and staff gave all-out support to H. R. 4009 and S. 1070. 2. We recognize that there is an upper bracket group, representing probably 23 percent of the population whose members can afford homes costing $9,000 and over. For this group the financing aid which the Federal Housing Administration has been giving for the last 14 years seems entirely adequate. 3. The remaining 67 percent of our population is generally classed as being the "middle-income group.' As legislation has now been provided which should materially assist both those of the lower-income group and those in the upper bracket, our consideration next goes to the 67 percent just referred to as the middle-income group, and we believe that the bill now under consideration makes an honest attempt to solve the housing problem of that large group in several ways. First, as to title I, section 111. This section of the bill contemplates the establishment of a new section 213 of the National Housing Act to implement the cooperative housing program in 1948. The American Legion has realized for some years that housing construction costs cannot soon be expected to be brought down to a level where the average family can expect to be able to build, to buy, or to rent an adequate, livable home within its means under the present speculative building practices. Numerous local posts of the American Legion have experimented with different methods of solving this problem and some success has been met in those instances where posts have organized nonprofit veterans' housing cooperatives, despite the fact that those experimental cooperatives did not have the advantages of the governmental assistance now available under section 207 of FHA. |