availability of new housing in an area which must continue to provide for the people who seem to continue coming to Southern California, whether we have jobs for them or not.

I think this is something that the people are beginning to understand. They are beginning to tie these changing conditions to the changing conditions at the top in our economy, to which preceding witnesses have referred so eloquently.

The pattern of complaint that I am getting by mail indicates that the untiring efforts of the chairman of this committee have somehow come through. People are beginning to associate our problem with interest rates and the failure-I don't say the unwillingness, but the failure thus far-of Government to address itself in a meaningful way to this problem. That is why I hope that this committee will lose no time in passing the resolutions which are before it. They will serve to put Congress on the side of taking the steps which seem to me to be essential if we're going to compel the rollback of prime interest rates, which do determine what happens throughout our economy.

Thank you very much, Mr. Chairman.
Chairman PATMAN. Thank you, sir.

The gentleman from Texas, Mr. White.

STATEMENT OF HON. RICHARD C. WHITE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS

Mr. WHITE. Mr. Chairman, and members of the committee, I appreciate the opportunity to come before you today to speak on behalf of H. Con. Res. 525, along with my colleagues, and the companion bills, calling for the administration of lower interest rates.

I recently conducted an opinion poll in my district, asking what steps the Government can best take to assist low-income residents to secure proper housing. This was a multiple choice question and while the results are still being tabulated, it is clear that the favored choice is "greater assistance to people in buying their own homes."

And, one of the most frequent solutions mentioned was "lower interest rates." "A home of their own" is still a great and vital part of the American dream. This Congress, 2 years ago, in the Housing and Urban Development Act, approved a goal of 26 million new homes in the next 10 years. This is almost building a new nation. It would provide employment in the very areas where unemployment is becoming a major problem. And yet, the task of meeting this goal is being stifled by the high cost of financing.

Now, Congress has approved special legislation making it easier for low-income citizens to own their own homes. The President, within the last week, has called for reemphasis on this assistance, but the call will be but empty words, unless we can lower one of the major costs in building or buying a home-financing it.

Housing is only one field in which our efforts are being stifled because of high interest rates. In my district, as in other areas of the country, cities have turned down bond issues for schools and for various civic improvements, with the high cost of interest being one of the major reasons.

Local governments at various levels have hesitated to contract for needed improvements, because of the high cost of financing.

With this resolution, we can show the administration that this country, and this Congress believes that this Nation, launched through the operation of free enterprise, can undertake one of the great domestic building programs in its history, that is in the history of this country and solve many of the problems of the great cities, make our rural areas more attractive and more modern, and improve our image in the eyes of the world.

To accomplish this, we must have financing at reasonable rates.

Strangely, high interest rates were invoked as a measure against inflation. Instead, as House Concurrent Resolution 525 recounts, it has served to stimulate inflation; and the high cost of financing is a built-in part of everything we buy.

I think Mr. Adams mentioned this as I came in.

Mr. Chairman, I hope this committee will overwhelmingly report to the House House Concurrent Resolution 525 and allied resolutions.

Thank you.

I ask, Mr. Chairman, that my statement be presented in the record as offered.

Chairman PATMAN. Without objection, so ordered.

Mr. WHITE. Thank you very much.

(The prepared statement of Mr. White referred to follows:)

PREPARED STATEMENT OF HON. RICHARD C. WHITE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS

Mr. Chairman, I appreciate the opportunity of joining my voice with that of my colleagues in support of H. Con. Res. 525 and companion bills calling for the administration of lower interest rates.

I have recently conducted an opinion poll in my district, asking what steps the Government can best take to assist low income residents to secure proper housing. This was a multiple choice question, and while the results are still being tabulated, it is clear that the favored choice is "greater assistance to people in buying their own homes." And, under comments one of the most frequent solutions mentioned was "lower interest rates."

"A home of your own" is still a great and vital part of the American dream. This Congress, 2 years ago, in the Housing and Urban Development Act, approved a goal of 26-million new homes in the next 10 years. This is almost like building a new nation. It would provide employment in the very areas where unemployment is becoming a major problem. And yet, the task of meeting this goal is being stifled by the high cost of financing.

Congress has approved special legislation making it easier for low income citizens to own their own homes. The President, within the past week, has called for reemphasis on this assistance. But the call will be but empty words unless we can lower one of the major costs in building or buying a home-financing it. Housing is only one field in which our efforts are being stifled because of high interest rates. In my district, as in most areas of the Nation, citizens have turned down bond-issues for schools and for various civic improvements, with the high cost of interets being one of the major reasons. Local governments at various levels have been hesitant to contract for needed improvements because the high cost of financing.

With this resolution, we can show the administration that this Congress believes that this Nation, largely through the operation of free enterprise, can underake one of the great domestic building programs of all history, solve many of the problems of the great cities, make our rural areas more attractive and modern, and improve our image in the eyes of the world. To accomplish this, we must have financing, at reasonable rates.

Strangely, high interets rates were invoked as a measure against inflation. Instead, as H. Con. Res. 525 recounts, it has served to stimulate inflation because the high cost of financing is a built in part of everything we buy.

Mr. Chairman, I hope this committee will overwhelmingly report to the House H. Con. Res. 525 and allied resolutions.

Thank you.

Chairman PATMAN. Now, we will forgo asking any questions, or I will, myself, until the other members have had an opportunity, and first, I would yield to the gentleman from Pennsylvania, Mr. Barrett. Mr. BARRETT. Mr. Chairman, I certainly do not want to ask any questions of these members here today. They have all made very fine statements. They ought to be commended for their interest in low-interest

rates.

However, I do want to state, and, I emphasize, that Mr. Alexander made a very, very fine statement. He is one of our young, very capable and knowledgable members. On page 3 of his statement, he said he received a letter from a banker in Arkansas, saying that "inflation was bad, but that an economy policy in the hands of politicians was even worse."

Now, I'd like to say for the benefit of the members here this morning offering their testimony-I don't think there is any member of this committee who is not for low-interest rates. I observe here this morning that all the members testifying are Democrats. The bankers should indicate the politicians in whose hands they would not care to have economic policy.

Certainly I don't think they could point to any Democratic politicians who are using anything but the proper means to get the interest rate back to where we think it rightfully belongs, at 6 percent. These accusations, without clarification, keep everybody confused.

Mr. ALEXANDER. Mr. Chairman, would the gentleman yield?
Chairman PATMAN. Had you finished?

Mr. BARRETT. Yes.

Chairman PATMAN. You may be recognized for an additional state

ment.

Mr. ALEXANDER. Mr. Barrett, I would like to add, if I could, by way of comment, that the resolution is bipartisan and cosponsorship, and we have both Democrats and Republicans on the resolution and it may be that we don't have any Republican witnesses here today, because, by coincidence, there is a Republican caucus being conducted at this time. I would just like to add that comment.

Mr. BARRETT. I agree with your statement, but I think clarification ought to be made, particularly when it is made by bankers who are the beneficiaries of high-interest rates.

Chairman PATMAN. Mr. Widnall.

Mr. WIDNALL. Thank you, Mr. Chairman.

I would like to congratulate all of the witnesses for the words they have spoken before the committee and the help they are going to give us in analyzing the resolution and deciding whether or not it should be passed out by the committee.

Mr. Chairman, I would like to also repeat what has just been said by one of the witnesses with respect to the Republican caucus today, and call your attention to the fact that every time there has been a Democratic caucus, we have not had a meeting of the committee. But today, that just didn't seem to happen and unavoidably, because of that, there are many absent members on my side who would prefer to be present, as members of the full committee to hear what you have to say.

I would like to ask this one question: When we are talking about unemployment rates, I think one of you just mentioned 4.7 in San Diego; do you have any idea as to the length of unemployment of those people who are counted in the 4.7?

I understand that there is a tremendous turnover in actual persons who are counted as unemployed. Now, while the rate might be higher, it is not a continuing rate as to any one person. There is this terrific turnover, and there is only a short time involved when most of them are being unemployed.

Do you have any figures on that?

Mr. VAN DEERLIN. I think that where my community is concerned, the gentleman is very likely to be correct. We don't have the protracted unemployment that many parts of the country do on particular individuals, except where age and these other factors get fed in.

We have been fortunate in having a relatively short-term history for individuals; it's in the total figure

Mr. WIDNALL. All unemployment is unfortunate, but in many cases it is chosen by the person himself, or herself they decide they are not going to work any longer and their circumstances change and they move from one section of the country to another, and I have noticed in trying to run some of these things down that figures are not as alarming as they might seem when you attempt to analyze who are the unemployed, why they are unemployed and how long they have been unemployed.

Mr. VAN DEERLIN. Well, in my district, Mr. Widnall, it hits first in the black and unskilled, and there is very little unemployment by choice in that area.

Mr. WIDNALL. Thank you. That's all, Mr. Chairman.

Chairman PATMAN. I'm sorry that we didn't know about your Republican caucus until we got here this morning. If the gentleman from New Jersey, the ranking minority member, would like to have a special meeting for the Republican members, it will certainly be called and an opportunity given for them.

Mr. GIBBONS. I will be glad to come back; I don't want to take advantage of them.

Mr. WIDNALL. Nobody said you were doing that.
Chairman PATMAN. We just didn't know about it.

Mr. Reuss?

Mr. REUSS. Thank you, Mr. Chairman, and congratulations to the six of our colleagues who contributed so much. I am interested, Mr. Alexander, in that northeast Arkansas banker, and I don't want to know his name or anything like that, but let me ask a few questions about the nature of his banking business.

Is he from a large bank or a small bank?

Mr. ALEXANDER. Mr. Reuss, the letter came from Little Rock, which is not in my congressional district, and this gentleman is a very experienced and knowledgeable chairman of the board of one of the largest banks in Arkansas.

Mr. REUSS. Does that bank have a branch in London, England, and can they repatriate Eurodollars as the big New York banks can? Mr. ALEXANDER. No, sir, I am sure they do not.

Mr. REUSS. Is that bank a member of a bank holding company system and does it have a nonbanking subsidiary which can issue promissory notes and thus drag in a great deal of additional lending power, as is true in many of the cases of New York banks?

Mr. ALEXANDER. Mr. Reuss, I am really not knowledgeable of the actual internal structure of the bank, and I may be doing a disservice

to comment in that regard, because I am really not that familiar with the bank's organization.

In fact, I haven't met this gentleman, except by letter. I would like to show it to you, along with my reply.

Mr. REUSS. I would like to see it.

Mr. ALEXANDER. I will insert the letter I received from William H. McLean, of the Commercial National Bank, Little Rock, Ark., with my reply to him in the record at this point.

(The letters referred to follow :)

Re monetary policy and interest rates.

Hon. BILL ALEXANDER,

House of Representatives,

Washington, D.C.

COMMERCIAL NATIONAL BANK,
Little Rock, Ark., March 5, 1970.

DEAR CONGRESSMAN ALEXANDER: The Gazette column in the morning paper today carried an article telling about the effort of you and others to force the Federal Reserve Board to roll back interest rates to an artificial figure, and this really dismays me. I think that a continuous period of unusually high interest rates can be harmful, but I think that economic policy in the hands of politicians is far worse. Congress delegated monetary policy to the Federal Reserve Board because its members have spent long years in the study of economic problems, and they are not subject to the same political pressures as our Congressmen face.

I don't see how we can have low interest rates until the American people face up to the real root of our problem. Congress has gone along year after year with large deficits, and the rest of the world has begun to lose confidence in the dollar and in our ability to manage affairs. Not only that but organized labor continues to demand wage settlements which are far in excess of annual increases in productivity. This all leads to the question of why anyone in his right mind would lend money out at 6% interest for 25 years to finance a home when inflation is eating away 4% of the lender's dollar each year. For these and other reasons I fail to see why the Nixon administration is responsible for these problems.

What I am going to say next should not be construed as any reflection upon your integrity or motives because I do not mean it to be, and I do not intend to be critical because you hold views which are different from mine; but I do say this. Many of our political leaders have been in Washington for a long time, and they are in the rut of reaching decisions based on political expedience rather than intellectual honesty. You are new in Washington and regardless of what views you may adopt from time to time, I hope that you will be a statesman rather than a politician. The country has more of the latter than we can afford. Best wishes to you for a successful career, and please accept my thanks for taking the time to consider my views.

Sincerely,

WILLIAM H. MCLEAN.

MARCH 12, 1970.

Mr. WILLIAM H. MCLEAN,
Vice Chairman of the Board,
Commercial National Bank,
Little Rock, Ark.

DEAR MR. MCLEAN: Your letter of March 5 letting me know of your reaction to my comments and actions concerning the high interest rates was very much appreciated. I have tried to keep an open mind on all subjects since becoming a member of Congress, and your thoughts were most helpful to me in this regard. First, let me say that we are in agreement that "a continuous period of unusually high interest rates can be harmful." This is the basis of my position. We are also in agreement that "economic policy in the hands of politicians" is equally bad. This is the reason that I chose to introduce a House Concurrent Resolution which would express the "sense of the Congress" rather than to introduce a bill which would require mandatory actions.

While I agree with you that economic policy must remain flexible and in the hands of experts in the field, I also feel that the people of this country have a right to be heard on the subject. It is these people whose very lives are affected by economic policies over which they have no control. The passage of this