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As a matter of fact, a bill of this kind by the time it got through the Senate and the House and got set up, would practically have no expenditures in it for the fiscal year 1948 anyway.

We have this year in the budget an estimate of 37%1⁄2 billion dollars under the Senate proposal of 33 billion dollars. If the whole thing is not upset by the conditions in the world at large-and we allow quite largely for that in the budget already, the 33 billion-I would hope that next year we might get down to something like 28 billion and ultimately to 25 billion.

As we reduce our expenditures for war and extension of war I would hope we might take up some part of that difference by an increase in the expenditures for public welfare. We may have to do it gradually, we may not be able to do it all at once but I think it is perfectly consistent in a Federal budget of $27,000,000,000 to include a total of $1,000,000,000 for public welfare, housing, health, education, relief of up to perhaps a billion dollars.

Senator ROBERTSON. Senator, is it not true, however, that subsection (b) of section 803 of your bill authorizes the Administrator to reach obligations up to $500,000,000?

Senator TAFT. Which section?

Senator ROBERTSON. It is on page 57. I assume that if they would be bought, the Government would have to guarantee them as to both interest and principal, and that no appropriations would be necessary; is that correct?

Senator TAFT. That is right. For the purpose of the loan sections. Of course he will have to be limited ultimately by the Federal Government's obligation to put up a total of $20,000,000 on pages 59 and 60. In other words, the loan that he is putting up is going to be a perfectly good loan. And I would doubt whether he would be • authorized to put that loan up until he was certain that the $4,000,000 is appropriated under 59. In other words, I think he will have to go to the corporations committee before he can set the machinery going here. That is the urban redevelopment section.

Senator ROBERTSON. I naturally assume that he would try to make good loans and sound loans, and I think our private banks undertook the same thing between 1920 and 1929, but when the depression came on they found that what they thought was a sound loan was not. But my point is this

Senator TAFT. But in effect, you are loaning it to the Federal Government itself if the project is a sound project. If you have looked at the thing properly, that loan will be repaid out of the guaranty of the Federal Government under pages 59 and 60.

Senator ROBERTSON. This is my primary point: If we authorize this Administrator to issue obligations, whether he issues the bond himself or whether he borrows the money from the RFC and the RFC issues bonds to the Treasury and the Treasury issues the money, when we get up to $500,000,000 of guaranteed obligations have we not increased the national debt by $500,000,000?

Senator TAFT. You have at the moment; yes. I say it is a temporary loan which is subject to being repaid, but that is not so important as the fact and which of course cannot be denied and is admittedthat you have increased the annual expenses of the Federal Government $20,000,000, more or less for good.

That is

I mean, as far as we are concerned for 30 years ahead. the important part, and there is no question about it. This program, this whole program, the loaning feature is an incidental one throughout. The whole program increases as I suggested the permanent expenses of the Federal Government $150,000,000 a year to try to solve the housing problem for as many years in advance as you can reasonably see. That is admitted. And that, $150,000,000 at present rates would, if you had a public debt of $7,500,000,000, would cost you in interest $150,000,000 a year.

You can do it either way you like. It certainly is equivalent toI mean the importance of the national debt to my mind is the interest charge $5,000,000,000 a year. You could do this whole job probably by increasing the national debt and that will cost you $150,000,000 a year too as far as I can see. I do not think it does it by that method. It does it by increasing the expense but it does not make much difference whether you do it one way or the other, except that it is wise to avoid the principal obligation if you can. this bill does attempt to avoid that.


The only loaning power is intended to be merely a temporary one to get the project started until you get back on this so-called expenditure or subsidy basis.

Senator ROBERTSON. Does all of this contemplated $5,000,000 under this section of the bill relate to farm housing?

Senator TAFT. No. That has nothing to do with farm houses. This is the urban redevelopment I was talking about, the cities. I even hoped that we might eliminate that provision in section 57 and put it entirely on the other basis.

Most of the experts feel that all of the bills before did provide for starting the thing with a loan until you could determine-you see when you go out to determine what is the cost of a housing project it is pretty hard to determine that definitely until you have bought up all the property and resold it, and until you determine that and determine what, therefore, the subsidy, so to speak, is to be, or what your ultimate obligation in grants is to be, it is better to loan the money temporarily until that thing is determined, so it would seem to be necessary in this particular case to have a loan authority in the


I might say about the farm-I am more doubtful about the proposed farm thing I think I ought to say a word about that-than anything else. I do not feel personally that I know enough about it to say definitely, "This must be the way it is." The farm housing is a more difficult problem. It has always been at the tag end of housing bills. This particular plan was proposed by Secretary Anderson. We put it up to the Department of Agriculture to come in with a proposal.

Farm housing is all tied up with the whole question of farm financing, financing of the farm, itself, and I certinly think this committee should hear Secretary Anderson and take expert advice as to whether this thing should remain or be taken up for further study. It is an entirely different kind of problem and the remedy of three different types of assistance which we put there is in line with the so-called Bankhead-Jones tenancy bill but I at least would feel better satisfied if more expert advise testimony could be obtained on it than we were

able to obtain last year. Particularly the farm organizations should be heard and I think their general advice should be followed.

Senator Buck. Thank you Senator, for discussing the bill to which you have given so much study.

Senator Ellender, the committee will be very pleased to hear from you sir, as one of the coauthors.


Senator ELLENDER. Mr. Chairman, I appreciate this opportunity. I have a prepared statement here that I would like to read in a moment, but before I do so, I would like to submit for the record, a comparison of the pending bill and the bill that was introduced last year, S. 1592, which might be of interest to the committee, and I would suggest that it be incorporated into the record.

- Senator BUCK. Yes; it may be.

(The above-mentioned statement is as follows:)

Sec. 101 (Sec. 2 of

8. 1592)

COMPARISON Of S. 866, Eightieth Congress (National HOUS-


This title provides for essentially the same national housing objective and national housing policy as the “Policy preamble” of S. 1592.


This title is parallel to title I of S. 1592.

Title I of S. 1592 would have continued, on a permanent basis, the present type of National Housing Agency with an Administrator and three constituent units-FHLBA, FHA and FPHAeach such unit, while subject to general policy supervision by the Administrator, being autonomous and to a large extent exer- / cising independently the powers vested in it by the Congress.

Title I of S. 1592, however, did not provide for the coordination, within this general policy supervision, of other substantial housing functions lodged in other Government agencies, although the report of the Taft subcommittee took cognizance of the importance of such functions-principally in the recommendation that the functions with respect to the guaranty of home loans under the GI Act be transferred from the Veterans' Administration to the National Housing Agency.

Title II of S. 866 seeks to carry out the basic principle of the recommendation of the Taft subcommittee report, i. e., that the function of the unifying agency is not one of operations but of resolving questions within the scope of policies established by the Congress; of insuring the consistent execution of these policies; of maintaining harmonious working relationships among the several agencies and resolving conflicts that may arise in their operations; of reporting to the Congress on the progress of the program; and of recommending modifications which experience indicates are desirable. Title II of S. 866 also takes cognizance of the important housing functions lodged in other agencies— notably Treasury, Veterans' Administration, Agriculture, and RFC which should be brought within this unifying function if it is to be fully effective.

Title II of S. 866 therefore provides for a permanent National Housing Commission composed of an Administrator (with his administrative staff) and a Coordinating Council composed of

the Administrator, the heads of FHLBA, FHA, FPHA, and representatives of the Department of the Treasury, the Department of Agriculture, the Veterans' Administration, RFC and any other Federal agencies that the President might designate. All of the powers of the Commission are vested in the Administrator. The Coordinating Council, which is an advisory body, provides the means for working out harmonious relationships with respect to the housing functions of the participating agencies.

Sec. 202 (a), (b),

(c), (e), (f)

Sec. 202 (d)

Title II of S. 866 provides that the Administrator, with the active advice and assistance of the Coordinating Council, is to develop coordinated housing policies and programs for the Federal Government, to interpret general policies and seek to resolve differences or disagreements that may arise with respect to the housing functions and activities administered in the agencies represented on the Coordinating Council, and to report to the President and to the Congress on the progress of the program and recommend legislation necessary or desirable in the furtherance of the national housing objective and policy estab- Sec. 202 (g) lished by title I of S. 866.

Each agency represented on the Coordinating Council is specifically charged with the duty to cooperate actively in the work of the National Housing Commission, and to coordinate and administer its housing programs consistently with the general housing policies and programs developed by the Administrator under the bill and with their other responsibilities and policies established by law. The bill recognizes that there are to be no directive controls or detailed administrative supervision by the Administrator over the agencies represented on the Coordinating Council (or other Federal agencies), who are to have full operating responsibility for the functions and activities relating to housing vested in them by the Congress.

Title II of S. 866 further contains-but in more summary Sec. 202 (g) form—the basic provisions of title X of S. 1592 as to inventories of housing needs and progress, vesting in the Administrator the duty of preparing (with the assistance of the Coordinating Council) and submitting to the President and Congress, estimates of national housing needs, and reports with respect to the progress being made toward meeting such needs.



The effect of this title is to provide that with the termination of Executive Order 9070 and the present National Housing Agency established thereby, the FHLBA, FHA, and FPHA are not to revert to the Federal Loan and Federal Works Agencies, nor are the organizational patterns of FHLBA or FPHA to revert to those in existence prior to Executive Order 9070. The FHLBA, the FHA, and the FPHA, therefore, would, in a sense, become independent agencies in that they are not constituent administrations within the National Housing Commission any more than are the Veterans' Administration, Treasury, Agriculture, or RFC with regard to their housing functions. However, the FHLBA, the FHA, and the FPHA would be subject to the coordinating and policy functions of the Administrator, as provided in title II of the bill.

Also, all of the direct housing functions of the Government (such as Lanham Act and other war and emergency housing) previously scattered among numerous agencies and which were consolidated into FPHA by Executive Order 9070 would, under the bill, remain so consolidated in FPHA, as would have been the case under title I of S. 1592.

Similarly, the HOLC, the FSLIC, the chartering and supervision of Federal savings and loan associations, and the Home Loan Bank System would continue to be administered in the

Sec. 401 (a) (201 (a) of S. 1592

Sec. 401 (b) (201 (c) and 202 of S. 1592

Federal Home Loan Bank Administration under a single Administrator (rather than by a board as was the case prior to Executive Order 9070), as would have been the case under title I of S. 1592.


This title is the parallel title to title II of S. 1592. It contains the same basic provision for a program of technical research and studies as provided in section 201 of S. 1592, except that it does not contain the express provisions for a director of housing research and for laboratory facilities.

Like title II of S. 1592, it calls for the encouragement of localities with respect to local market analysis and planning. It provides for technical advice and guidance by the National Housing Administrator for this purpose. It does not contain the S. 1592 Sec. 803 (c) and 909 provision for Federal grants-in-aid for this purpose. (Title IV (203 of S. 1592) itself also does not contain the provision in title II of S. 1592 for advance loan assistance for local studies and plans, but provisions to the same effect are contained in the urban redevelopment and public housing titles.)

Sec. 501 (a) (301 of
S. 1592)

Sec. 501 (b) (301 of
S. 1592)

Sec. 502

Sec. 301 of S. 1592

Sec. 301 of S. 1592

Sec. 503 (a) (302 (a) of S. 1592)


This title is the parallel title to title III of S. 1592 and like the latter relates to the already existing housing tools of FHLBA and FHA.

Federal Savings and Loan Association Operations

I. Provisions similar to those in S. 1592:

1. Like S. 1592, title V contains a provision authorizing Federals to purchase obligations fully guaranteed by the United States, as well as direct obligations of the Government, and to purchase obligations issued jointly by Federal home-loan banks, as well as those issued by individual banks. This title expands the S. 1592 provision by further authorizing the purchase of obligations issued by the Federal Savings and Loan Insurance Corporation.

2. Like S. 1592, this title authorizes Federals to participate without restriction in the FHA insurance programs, in the GI bill of rights' home-loan guaranty and insurance programs, and in any other home loan insurance or guaranty program of a Federal agency.

II. Provisions not contained in S. 1592:

1. Title V contains provisions authorizing Federals to convert into State-chartered institutions with the approval of FHLBA and FSLIC.

III. S. 1592 provisions not contained in S. 866.

1. S. 866 does not contain the S. 1592 provision authorizing Federals to participate in the yield insurance program.

2. S. 866 does not contain a clarifying amendment contained in S. 1592 designed to remove an ambiguity in the law as to lending powers of Federals with respect to homes with mortgages of more than $20,000 or located more than 50 miles from the home office. (This problem has since been met without the need for statutory amendment.)

Federal home-loan banks

I. Provisions the same as those in S. 1592:

1. Title V contains the S. 1592 provision authorizing homeloan bank advances to member institutions on loans insured by FHA or home loans guaranteed or insured by the Veterans' Administration or by any other Federal agency.

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