to January 31, 1948. This permits until that date continued insurance of mortgages on residential property constructed for rent. Builders and representatives of financial institutions say that this is the only additional credit legislation needed to stimulate construction of more rental housing.

There is just one more step that I should like to suggest-and that is a bill introduced in the House of Representatives by Congressman Hope, of Kansas. It is identified as H. R. 1677, and sets up an independent Farm Credit Agency, thereby removing all farm-credit functions from political domination of the Secretary of Agriculture. We have several thousand farm brokers in our association, and they agree and urge that such a step be taken.

In conclusion I should like to summarize. We are violently opposed to S. 866, because the bill is misleading and fails to accomplish the purpose for which it was presented.

Congress can achieve a permanent long-range homes construction program by utilizing existing legislation and removal of controls on the industry. For that reason, we have suggested that the above proposed bills be introduced separately and stand or fall on their individual merits. We are of the opinion that legislation of an omnibus nature such as the WET bill is dangerous in itself. We want to build homes. We can build homes. We will build homes. Just cut the red tape and let us go.

Senator CAPEHART. Our next witness is Mr. Douglas Whitlock, chairman of the Building Products Institute.

Senator BUCK. Were you here last year?

Mr. WHITLOCK. I was not here last year on the Wagner-Ellender bill. The Producers Council was represented by Mr. Larry Hart, who was then president of the Producers Council.

Senator CAPEHART. Will you proceed with your statement?

STATEMENT OF DOUGLAS WHITLOCK, CHAIRMAN, THE BUILDING

PRODUCTS INSTITUTE

Mr. WHITLOCK. My offices are in the Shoreham Building, Washington, D. C. I appear as chairman of the Building Products Institute, an association of building products manufacturers devoted to economic research and analysis of trends in construction.

In accordance with the stipulation of the chairman, we shall confine our presentation to a discussion of the differences between S. 866 and the bill which was under discussion last year. It seems appropriate to say, however, that we question as to the soundness of that limitation, in view of the fact that so many members of the committee were not then serving in the Senate and did not have any opportunity to participate in the hearings held during 1945 and 1946.

In addition, we should like to point out that we oppose numerous of the sections which remain virtually unchanged in the new bill but which we are not privileged to discuss here.

Senator CAPEHART. Did the committee rule that the hearings were going to be limited on this legislation?

Mr. WHITLOCK. We were instructed that our presentation should be confined to the differences between the two bills, and we understood there was no process of analysis, or summary of the bill of last year, which since that instruction, I understand, is not going ahead. Senator BUCK. I am not aware of that.

Senator ROBERTSON of Virginia. I am not familiar with any such action.

Senator CAPEHART. Do you know of any committee ruling where the committee met and decided that the hearings would be limited to certain portions of this bill, on which people would be heard?

Mr. HILL. You are referring to 866 and the changes in the bill; is that correct, sir?

Mr. WHITLOCK. Yes; I pointed out in my statement here that we were instructed to limit our presentation to the changes in the bill from last year, rather than to discuss the effect of the entire bill.

Mr. HILL. There was a press release sent out to all of the newspapers about 10 days ago, 10 days to 2 weeks, which said that the Banking and Currency Committee had met and unanimously decided that there was no need of hearing repetitious testimony on the Taft bill, S. 866, and that they wished that the opponents and the proponents would limit their testimony to the changes in the Taft bill. In the press release they gave the changes in the bill, and the proponents stuck by that. Senator CAPEHART. You say the full committee met on that?

Mr. HILL. Yes, sir; and Senator Buck was present. You remember that day?

Senator BUCK. I think I do recall it now. Senator Tobey presided and he brought up the question of whether or not we could not save time, because we had these extensive hearings last year on similar bills, except for changes that were made in the one of last year.

Mr. HILL. At that time, they made the announcement that the arguments for and against would be available for the committee and the testimony this time would be limited to the changes in the bill.

Senator BUCK. I think that was done right at the opening of the hearing.

Mr. HILL. Yes, sir; at the opening of the hearing.

Senator ROBERTSON of Virginia. That, of course, did not preclude a witness from saying that, "I am against the bill," or "I was against the bill last year and still against it." We certainly would not prohibit a witness from telling us that he does not approve of the legislation. The purpose of that, as I understand it, was that we have the printed testimony about the other bill, and it was not necessary to give the same arguments over again that we have already heard and that have been printed.

Senator CAPEHART. I was not present when the committee made such a ruling, but I cannot speak for Senator Tobey, the chairman. of the committee, and I certainly cannot speak for the committee. Senator BUCK. I read a statement of Senator Tobey's.

Mr. HILL. That was on March 18.

Senator CAPEHART. I do not think it is necessary to read it. It seems as though the action was taken.

Mr. WHITLOCK. Those of us who are in opposition to this bill say that you are dealing with 20 percent of this total American economy, because that is what it represents. There are a number of members of this committee who are new and who did not have the advantage of the discussion and questioning in relation to the wet bill of last year. It is a very comprehensive piece of legislation affecting vitally the basic structure of our economy, and we believe the limitation of this to a few changes in the bill is perhaps unsound.

Senator CAPEHART. May I interrupt you a moment. Would you like to speak on the entire bill?

Mr. WHITLOCK. In my prepared statement I have dealt with those questions. Then, on the last page I have inserted in one, two, three form, other objections.

Senator CAPEHART. Do you know other people that would like to testify on the entire bill?

Mr. WHITLOCK. I think there are a number of people who would like to discuss the entire bill. This morning, one of the witnesses was advised by the Chairman that he might proceed to discuss the whole bill. That limitation did not apply, but in our preparation we were restricted to this, and we have accordingly done so.

Senator CAPEHART. I feel certain, and I will speak for myself only, that if there are any witnesses that can add materially to the discussion and understanding of this bill that want to discuss the entire bill, they should be given the privilege. I, for one, am in favor of giving it to them. My recommendation is that if you know people who would like to speak on the entire bill, or if you would like to do it yourself, I feel confident this committee will arrange to hear you.

Mr. WHITLOCK. We face this problem in relation to these hearings: We were told the opposition could have today and tomorrow, and I do not know whether in that time and the period we have that we will be able to readjust our presentations. We certainly believe that time should be taken by this committee and the Senate of the United States to give very careful consideration to the far-reaching effects of this complex bill on our entire economy, and particularly the 20 percent of the economy that construction represents.

This bill of more than 20,000 words covers so many complex questions of far-reaching importance to the economic welfare of the country that it is hardly possible for the committee or the Senate to give proper consideration to each of the major subjects with which the bill deals. Since this is in no sense emergency legislation, and since the bill will provide no additional homes whatsoever, it would be highly desirable, in our opinion, to split it into its principal topics and give full consderation to each.

A year ago, the comparable bill was presented in the guise of an emergency measure. Its sponsors claimed that it would provide additional low-cost homes for veterans. But that contention was inaccurate.

At that time there was a serious shortage of materials and no amount of legislation could alter that fact. We make this observation in case a similar claim is made with respect to the new bill. The available materials will build only so many homes, no matter who builds them. And homes built with Federal dollars will not cest any less than similar homes built with privately owned dollars. Indeed, the record shows clearly that private construction invariably costs less than publicly financed construction.

Turning to the provisions of the bill, title II would establish a National Housing Commission which is quite different from the agency which would have been set up under the earlier bill. Such a commission was proposed some months ago by the Building Products Institute.

We approve the establishment of a commission, but we do not approve the establishment of a housing administrator. Although an attempt is made to define the administrator merely as a coordinator and an interpreter of national housing policy, the fact remains that this official is expected to coordinate the programs of the governmental agencies which extend credit assistance to private enterprise with the

programs of the agency which controls public housing and with the slum-clearance program.

It is difficult to believe that this administrator could discharge these conflicting responsibilities with any degree of impartiality, especially when he himself is directly responsible for the operation of the urban redevelopment program.

The opportunities for expanding the public housing and the redevelopment programs at the expense of private enterprise would be most inviting for an ambitious administrator who wished to extend the scope of his authority. Aiding private enterprise through the FHA and the FHLBA would offer little chance for the Administrator to expand his operations. Those agencies are too well established.

On the other hand, urban redevelopment and public housing offer unlimited opportunities for a prejudiced administrator. It is not hard to see which way he would lean, nor to understand the consequences of such a policy. The danger of distorting policy to serve the ends of a special function is ominous, to say the least.

There is nothing the Administrator can do that the National Housing Commission could not do, if coordination of housing activities is the real aim of the bill. Thus, though the administrator defined in this bill might not have all the powers offered in the former bill, we hold that the office is both undesirable and unnecessary.

With respect to its financial provisions, the new bill increases by about $1,000,000,000 the total direct commitment of Federal funds, bringing the total up to nearly $7,000,000,000, just at a time when the Nation is attempting to reduce expenditures and is assuming new commitments abroad of an incalculable amount.

If this new financial burden were to come anywhere near providing an over-all solution to the country's housing problems, it might be viewed in a different light. But that is not the case. It means spending billions to solve a small portion of a problem which cannot and will not be solved except over a period of years by radically different methods.

We also are unable to approve the revisions which have been made in the section of the bill, title IV, which deals with research and statistical activities of the proposed Housing Administrator.

As for research, the proper division of responsibilities between government and industry is a complicated technical subject, which there is not time to discuss at length here today.

In broad general terms, we believe that the part which government should play in housing research should be limited to aiding private enterprise and the technical institutions of the country in the conduct of needed research and to aid in coordinating the various research projects. Yet the bill would authorize the Administrator to "undertake and conduct" a wide program of technical research covering the whole field of building materials production and home construction. And we emphatically believe that control of funds for statistical compilation and compilation of basic statistics should not be placed in the hands of an official who is responsible for the determination of specific policies or who is charged with operating functions, as would be the case under the bill.

The possibility of using such funds and statistics to serve political ends under such circumstances already has been amply demonstrated.

We believe that statistics should be compiled by an impartial agency and that the basic statistics as well as the conclusions derived from them should be made available to industry, government, and the public, so that any deliberate misuse or misinterpretation of the figures may be brought to light.

Finally, I should like to summarize briefly several other objections to the revised bill:

(1) The bill carries forward into the postwar era the crisis theory of government characteristics of the thirties, under which the only remedy for real or supposed defects in our economic structure was a resort to the Federal Government. The bill vastly increases the hold of the Government on the credit system and the construction industry at a time when it is evident that both have been suffering from too much control.

(2) The bill is unnecessary to assure an ample total supply of housing. The only devices it offers for improving the housing situation are credit devices of one sort or another.

At the present time credit is available in greater amplitude and at lower rates than ever before known. The further expansion of private investment awaits only the removal of government-created obstacles and the lowering of costs.

(3) The bill will add to the inflation of realty values and construction costs by making credit even more widely available than is now the case and by permitting construction by housing authorities at current high costs.

(4) The bill creates a new and hazardous basis for extending credit, wherein need rather than ability to pay is made the criterion of loan. Contrary to all sound practice, the most liberal credit terms are granted to those with the least resources and responsibility rather than to those most likely to and most able to meet their obligations.

(5) In its provision for "yield insurance" the bill provides a new extension of Federal influence and a large increase in the contingent liability of the Government, which is neither needed nor requested by the financial interests for the benefit of which it is devised.

(6) In its provision for subsidies for the assembly of blighted urban land the Government embarks upon another program under which payments once agreed upon cannot be altered over a 45-year period. It undertakes to stimulate the destruction of existing housing in a time of shortage and consequently will increase the demand for additional subsidized housing for displaced families.

(7) The bill revives the USHA program of subsidized public housing at a time of peak building costs, which will result, not only in unnecessarily high public expenditures but in increased difficulties in restoring a balanced cost level. It presumes that vast public expenditures will be required in this field before the ability of private industry to meet the housing needs of the country, under stabilized postwar conditions, can be demonstrated.

(8) The special provisions for farm housing in this bill duplicate facilities generously provided in the Farmers' Home Administration Act of 1946. In placing jurisdiction for farm housing in the Department of Agriculture and in public-housing authorities, the bill is directly contrary in point of view to other legislation—the Hope billnow before the Congress.