Mr. ANDERSON. Yes, sir. This testimony is not personal. This is the testimony prepared and thought through carefully over a period of time for your consideration by all of the educational agencies representing higher education in America.

Mr. BROWN. Dr. Anderson, do you believe the rate of interest should be increased?

Mr. ANDERSON. No; it should not be increased, sir.

Mr. BROWN. You are against increasing the interest?

Mr. ANDERSON. Indeed, sir.

Mr. BROWN. Why are you against increasing the loans?

Mr. ANDERSON. Because the present bill protects the Government or the people, the taxpayers adequately by providing for a loan rate based on the average return on all Government borrowings.

Mr. BROWN. Some witness testified the other day that the Government now had to pay 3 percent interest on loans.

Mr. ANDERSON. Sir, it is quite possible that in a given period of time, on some loans, the interest rate would be higher than this. What we are talking about is the average rate of interest on all Government borrowings. Now if that average rate goes up, the law provides this now, if that average rate goes up, then this rate to the colleges will go up with it.

In other words, we are not and never have taken the position that this ought to cost the taxpayer anything. We simply have tried to help provide or help suggest a formula which would protect the public, and still give the educational institutions the opportunity of borrowing at a rate of interest which would encourage the development of those facilities which we need so badly to carry forward the program with the larger college enrollments that are in the offing.

Mr. BROWN. I notice the administration is advocating an increase for the housing loan policies in the amount of a hundred million dollars. The Rains bill calls for $250 million.

Mr. ANDERSON. That is correct. We are favoring the Rains position on this, for the following reason: Not because of any casually or quickly reached conclusion, but because we have made estimates of the probable need growing out of applications at the rate in which they are now being processed and we have come to the conclusion that the Rains formula is closer to the facts of the situation than the other bill which involves a lesser increase. In other words, we are not guessing at this, Mr. Chairman.

Mr. BROWN. My attention has been called to the fact that you pay one-fourth of 1 percent, plus what the money costs the Government. Mr. ANDERSON. That is correct. The one-fourth is for administrative purposes. The question is, is that adequate? Figure it up. All you have to do is take one-fourth of 1 percent of 500 million, which is the amount now without the increase and you get over a million dollars annually, which is more than the administrative agency says it needs to operate on.

In other words, the administrative agency has felt it needed a million dollars to operate this program. One-fourth of 1 percent of just 500 million, exclusive of the additional 250 million, would produce over a million, which is more than the administrative demands of the situation. So that the one-fourth of 1 percent covers the administrative cost, plus.

Mr. BROWN. What do you think of the proposal in the Rains bill to make 50-year loans at 32 percent available to nonprofit corporations to build housing for the elderly, along the lines of the college housing program.

Mr. ANDERSON. Well, sir, I am not-I represent the educational agencies, and it is not-we are not experts in this field, I think, and I have not been authorized to speak on that, sir.

Mr. BROWN. Dr. Talle, are there any questions?

Mr. TALLE. Mr. Chairman-I remember your testimony of last year, President Anderson. It was first rate.

Mr. ANDERSON. Yes.

Mr. TALLE. I want to wish you continued success in your important work.

I was wondering if you have any figures on the length of life of well-constructed school buildings, that are maintained reasonably

well.

Mr. ANDERSON. There is an absence of definitive statistical material on this, but you, I think yourself, were an administrative officer at one time of an educational institution, I recall, and I think we all well realize that 50 years-buildings are not half used when they are only 50 years old. These educational buildings go on and on and on, and even the temporary structures last longer than they should, but the 40 or 50 years in this bill for the amortization period is much less than the life of the college and university buildings in America by a lot. A good many of these buildings are 100 years old and more, and still being used. They have to be remodeled and cared for carefully, of course, but these buildings have a tendency to last and last and last. We can't afford to do anything else. We have to make them last.

Mr. TALLE. There is a little country school out in the Middle West that pupils used to leave their initials on, especially the old desks, and it is still in use and in good condition. I wasn't born yesterday and my father attended that little country school. If school buildings are well taken care of, they last a long time.

Mr. ANDERSON. Yes; they do. They have to be well cared for because they had to last. That is part of the problem of running our educational plants. We have to make them last. They will last a long time.

Mr. TALLE. Thank you, Mr. Chairman.

Mr. BROWN. Mr. McDonough?

Mr. MCDONOUGH. No questions.

Mr. BROWN. Mr. Betts?

Mr. BETTS. Dr. Anderson, did I understand, this program is available to both private colleges and public supported colleges?

Mr. ANDERSON. That is correct.

Mr. BETTS. Do you have any figures or does your association have any figures which would show the amount of money that has been distributed between public institutions and private?

Mr. ANDERSON. I don't happen to have it here, but I am sure we could supply the committee with those figures if you would like to have it.

(The data requested above follows:)

College housing program: Distribution of loans by type of institution1

? Preliminary reservation of funds; loan approval dependent upon review of full application.
Application under review prior to preliminary reservation of funds.
Institution controlled by State, municipal, or district governments.

Mr. BETTS. I think another witness was asked the same question. I think that is important. As I remarked the other day, I am interested in the small private college, because I think the public supported institutions have a lot more opportunity to avail themselves of public money than the private colleges.

Mr. ANDERSON. Of course, we all know there are certain ways in which public institutions have of financing operations that private institutions do not have. These bills or this bill, of course, is special, well, especially advantageous to the private institutions, of course, but it is also an advantage to the public supported institutions.

Mr. BETTS. You feel the privately supported college is taking advantage of this program?

Mr. ANDERSON. They are beginning to, sir. I have been in this type of institution all my life, and I know a little bit about how this has worked in relation to these institutions. They are really the bulk of the Association of American Colleges. You may have noticed that I speak for the Association of American Colleges. I happen to be the chairman of one of their major committees and I know what has happened to these colleges.

Since the change in the interest rate from 314 to the base which has now been operating for a period, at 234's, which will go up and down as the average rate on Government borrowings goes up and down, when with that lower interest rate the private colleges-and I am sure this would also be true of the public institutions but the private colleges have found it possible to build these dormitories and charge the room rent that is necessary to amortize them.

You see the trouble is you get the room rent too high if the interest rate is too high.

The institutions in the Midwest, for instance, which you know very well

Mr. BETTS. Like in Ohio, there are a lot in Ohio where I come from. Mr. ANDERSON. I happen to be, too, and I know the institutions in Ohio very well. I know what the room rent rates are in those institutions. It wasn't until the interest rate was dropped below the 34 point that these, many of these midwestern institutions found it possible to construct the very badly-needed residence facilities.

This bill was set up in the hope it would provide a way to accomplish what we all need in the field of higher education without costing the taxpayer. That is the possibility of all this. Now it is going to

work. This is my point. It is beginning to work. When it is beginning to work, let's not tamper with it. Let it go and get the facilities constructed that we need. We are not putting a burden on anybody. This isn't a gift. This is a loan operation, dedicated to the improvement of American educational facilities. It is a sound business arrangement. The interest rate is low enough to repay the Treasury, in terms of the average rate on its borrowing. While we have got this thing moving, let's not tamper with it. That is our only point, really.

Mr. BETTS. I think there is one situation where a public-supported educational institution might have an advantage over a private institution. That is in planning the college housing. The public-supported college, like a State university, could probably use public funds to initiate the planning, and then turn that over to the Government housing authorities and say "Here is what we want". Whereas, the private college would be at a loss for funds to even do that.

As I understand it, there is some provision in some of this pending legislation which would permit advances for that purpose. Mr. ANDERSON. That is correct.

Mr. BETTS. Do you have any

views on that?

Mr. ANDERSON. We think that is a very desirable addition.
Mr. BETTS. You would be in favor of that?

Mr. ANDERSON. Yes.

Mr. BETTS. That would be putting it on equal footing.
Mr. ANDERSON. We think that is an improvement.

Mr. BETTS. That is all. Thank you.

Mr. BROWN. Are there any other questions, gentlemen?

(No response.)

Mr. BROWN. Thank you, Doctor, for testifying. We appreciate your views very much.

Mr. ANDERSON. Thank you very much.

Mr. BROWN. Are there any other questions, Mr. Betts?

Mr. BETTS. I have no further questions.

Mr. BROWN. Call the next witness, Mr. Clerk.

Mr. CARDON. Mr. Chairman, the next witness is Mr. Wallace J. Campbell, director of the Washington office, Cooperative League of the United States of America.

STATEMENT OF WALLACE J. CAMPBELL, DIRECTOR, WASHINGTON
OFFICE, COOPERATIVE LEAGUE OF UNITED STATES OF AMERICA

Mr. BROWN. All right, Mr. Campbell, you may proceed.
Mr. CAMPBELL. Thank you very much.

Mr. Chairman, and members of the committee, my name is Wallace J. Campbell. I am a director of the Washington office of the Cooperative League of the United States of America.

The cooperative league is very pleased to have an opportunity to present its views on the proposed housing act of 1956. We feel this is an area of very great need and one in which we feel this committee can provide able and constructive leadership.

The cooperative league, is a national federation of consumer, supply and service cooperatives, including cooperative housing associations. Its affiliated member organizations include in their member

ship approximately 13 million different families who own cooperative businesses of various kinds through which they obtain farm supplies, insurance, consumer goods, electric power, savings and credit, health services, housing and other needs. These 13 million families represent a very large group of American taxpayers who have a general public interest as well as a specific interest in cooperatives as such. For that reason, we are in support of many of the general provisions of the bills which are before you, because these provisions are in the public interest. As taxpayers we expect to carry our portion of the load of any of the costs of programs of slum clearance, public housing, and other developments in this field which make for better cities and a better nation.

To speak first in very general terms, the cooperative league believes that for part of the American population it will be necessary to subsidize housing for those who cannot afford decent housing under present-day circumstances. The Housing Act of 1949 made a great stride toward achieving that goal by authorizing what we believe to be an adequate program of public housing and slum clearance. Unfortunately, the provisions of that act have not been carried out. They provide the kind of target for which we should aid in this year's legislation.

I am happy to point out the Senate, in approving its bill yesterday, approved that formula in the public housing field.

Measures to implement that act are included in the bill introduced by Senator Lehman and seven of his colleagues in the Senate, and are embodied in House bills H. R. 10296 and H. R. 9517, introduced by Congressmen Davidson, of New York, and Thompson of New Jersey. There are a large number of provisions in these measures which we would urge this committee to give careful consideration.

The bill now before your committee, H. R. 10157, introduced by Congressman Rains, of Alabama, is a very practical and effective piece of legislation to meet the immediate needs ahead of us. We are happy to give this our sincere endorsement.

We feel, as do many other of the organizations which will appear before you, that middle-income housing is still the greatest unmet need and that a great deal of constructive work needs to be done in that field. An adequate, effective program could make it possible for hundreds of thousands of people to acquire their own homes and to achieve the measure of independence that comes with such ownership without any subsidy of any kind on the part of the Government. Our most urgent appeal, therefore, is that this committee find a way to set up a program for housing for middle-income families and elderly persons through a mortgage corporation which could facilitate the work of cooperatives and other nonprofit organizations in bringing homeownership to more people. It would be possible to do this by cutting out the direct loan program for individual families which is contained in the middle-income sections of the Lehman, Davidson, and Thompson bills, omitting that, and enact the remainder of that section as it is now drafted.

In simple terms, such a program would make it possible for the Government to make a comparatively small investment in a mortgage corporation. Additional investment could be secured from tradeunion pension funds, retirement programs, and other sources of capital which cannot now tie up their funds for long periods of time such