"Well, Father, I am going to have some new people for your church before long."

He said, "You mean those buildings down there?"

And I said, "Yes."

"Well," he said, "we are not much interested in that kind of people.” I said, "Why not?"

"Well," he said, "those people live in those buildings." He said, "They don't own a home, they don't own anything, and they very seldom come to church." He said, "They don't contribute very much."

The point I am trying to make is that it is the home owner-90 percent of the people who go to church are generally home owners. They take an interest in the community, in their surrounding, their church, the school, the bond issues, the election. They vote, and things like that. And that is America, to me. And when you lose sight of that thing, she's going right down.

Senator MCFARLAND. Well, thank you very kindly.

Do you have any questions?

Senator CAPEHART. I don't think so. Mr. High, I think your statement is excellent, and I wish more people felt as you do.

Mr. HIGH. There was a statement made here before by another gentleman that I would like you to ask me about. He said that when we had an abundance of material why didn't we produce a lot of houses. Well, my answer to that would be that we did produce a lot of houses. We built them until they stood empty and we couldn't sell them, and then we rented them. And my theory on this thing is that housing is like a tire with air in it. When you build a new unit, even if it costs a $100,000, a man moves out of another unit, another man moves into that unit, and it simmers down to the bottom. It simmers down to the worst structure. Now, if we have urban redevelopment to get rid of those dead buildings, when they do get rid of them, consumption is the answer to production. As we kill them off, bury them, tear them down. We build them, just keep going like that, and our standard of houses will automatically come up because we will be getting rid of the worst ones all the time. It just seems like a very natural process. So all we need is a green light and material, and we will do the job for you.

Senator CAPEHART. Thank you.

Senator MCFARLAND. Thank you very kindly.

Mr. HIGH. Thank you, gentlemen. Good-by.

(Whereupon, at 12:30 p. m., an adjournment was taken until tomorrow, Friday, January 25, 1946, at 10:30 a. m.)

GENERAL HOUSING ACT OF 1945

FRIDAY, JANUARY 25, 1946

UNITED STATES SENATE,

COMMITTEE ON BANKING AND CURRENCY,

Washington, D. C.

The committee met at 10:30 a. m., pursuant to adjournment on yesterday, in room 301, Senate Office Building, Senator Ernest W. McFarland, presiding.

Present: Senators McFarland (presiding), Taft, Capper, and Capehart.

Senator MCFARLAND (presiding). The committee will come to order. I believe Mr. Smith is the first witness this morning. Please come around and take a seat at the committee table.

STATEMENT OF RUSSELL SMITH, LEGISLATIVE SECRETARY,

NATIONAL FARMERS UNION

Mr. SMITH. The National Farmers Union is glad to endorse wholeheartedly the general housing bill, S. 1592, and to express its warm appreciation of the energy, the cooperative spirit, and the solicitude for the public welfare displayed by the distinguished authors of the measure. We believe that the bill represents a notable advance toward meeting one of the most pressing of American problems and hope that it may be enacted at the earliest possible date.

Designed as it is to establish a permanent housing program, the bill naturally does not deal with certain elements of the immediate housing crisis, and for that reason we believe that it should be supplemented by the adoption of additional legislation now pending in Congress. One of these bills, the Patman bill, H. R. 4761, seeks to stabilize values and to ward off inflation. The other, S. 1729, the Mitchell-Kilgore bill, seeks to establish new, emergency methods of meeting emergency needs.

The adoption of these bills is of special importance to farmers and to veterans. Unless the inflationary tide in real estate values is checked, we fear that the effectiveness of S. 1592 may be impaired and its beneficial results set back for several years. S. 1729's encouragement of new production methods, of the use of new materials, and of the use of surplus war materials, while aimed at the immediate necessities of veterans, unquestionably would establish patterns and afford experience that would be of very great value in dealing with the specific rural aspects of housing. We believe that these bills are intimately related to the success of S. 1592 and therefore wish to mention them to the committee at this time.

Our view of the need for S. 1592 has been well voiced by Senator Taft, who said in the Senate on November 14:

We have an interest in seeing that there is provided for every family in this country at least a minimum shelter, of a decent character, which will enable the American family to develop.

The bulk of our testimony will be devoted to discussing the extent to which S. 1592 attains for farm people the ideal so well stated by Senator Taft, and to suggesting various additional ways whereby his objective can be reached.

We should like also, however, to emphasize our endorsement of the bill in general. As members of the committee may recall, the National Farmers Union was among the earliest advocates of full employment legislation and strongly supported the full employment bill passed by the Senate. Indeed, our organization was the first, I believe, to propose a specific legislative formula for the attainment and maintenance of a full-employment economy. We have felt that it was essential to the well being of farmers that Congress not only state that its policy is the provision of an opportunity to work to all Americans, but that this policy be implemented by actual authorization and appropriations. Thus, we regard this bill as in a sense another aspect of full employment legislation. It is generally accepted by economists that housing and construction expenditures have an intimate relationship to the general level of incomes, of production, and of buying power. The Senate could choose, from that standpoint, no more significant field than that of housing in which to act to carry out the policy which it endorsed by an overwhelming majority in the passage of the full employment bill.

Since virtually all agricultural economists, officials, and organizations have agreed that the crux of the postwar farm problem lies in the maintenance of full industrial employment, there appears no need to emphasize the fact that we have supported other measures and now support this measure primarily because we have regarded them as in the broadest sense agricultural measures.

There appears no necessity, however, for me to discuss the nonagricultural provisions of the measure, since they have been adequately covered by other witnesses more competent in those fields. I shall therefore undertake to discuss title VII, section by section, in order to give the committee the attitude of the National Farmers Union as to the specific farm and rural housing proposals of the bill.

Section 801, of course, eliminates the present requirement that 15 percent of mortgage proceeds must go for materials and labor if F. H. A. insurance is extended to farm housing. We believe this to be a step in the right direction, and that such a change need not cause the difficulties for the cooperative farm credit institutions foreseen by Secretary Anderson in his testimony. We believe that, in general, insurance of farm housing mortgages has a limited usefulness as compared with such insurance in urban areas, but whatever benefits can be derived from it certainly should be made available to farmers. The section might well include a provision requiring close liaison between F. H. A. and the credit agencies of the Department of Agriculture in the extension of such insurance in order to meet the conditions mentioned by the Secretary.

However, this section and the other sections of the measure are not nearly so important, in our view, as section 802, providing for 40year loans at 3 percent interest, with recognition of the need for permitting variable annual payments to be raised or lowered according to the fluctuation in the income of the farm. This section is perhaps the wisest and most far-reaching farm housing provision yet seriously put forward in Congress. We are strongly in favor of it and believe that it should be further strengthened.

The authors of the bill and all of the agricultural witnesses before the committee have emphasized the distinction between a farm house and an urban house, and the fact that the former actually is a part of the farm plant itself. We urge the committee, therefore, to add to this section an additional authorization, under the Bankhead-Jones Act, for farm-enlargement loans to be administered by the Department of Agriculture in conjunction with the farm housing program. As has been pointed out repeatedly to the committee, the collateral for a farm housing loan is the income from the farm itself. In cities, the income has no relation to the house. But if a farm housing program is to be of considerable proportions, then it must tackle the problem of farms that are too small to return an income adequate to permit the farmer to amortize a loan sufficiently large to give him a decent home. Like most other problems of farm operators, then, the inadequacy of farm units is a governing factor.

We believe emphatically therefore that the committee should provide in this section authorization for the Department of Agriculture to make 40-year 3 percent loans, for the purchase of land to enlarge farm units now too small, and that such a program should be administered by a single agency.

It is also our conviction that a land acquisition program for the purchase of large absentee- or corporation-owned farms, to be subdivided into family units, also ought to be undertaken by the Government. Such a program is far preferable to attempting to meet the farm and rural housing problem through a large-scale construction program based on a general agricultural production and population pattern that is likely to shift greatly in the next decade. Instead of seeking, for example, to enable a landlord to construct homes for the number of tenants now on his land—a number which may be greatly reduced in the next few years-it would appear sensible to provide a program for acquisition of large units now owned, for example, by insurance companies, to subdivide those into family farms, to establish as many tenants as possible on such farms, and along with that establishment to provide good housing for them.

We will realize, however, that this committee probably will not desire to move into the general agricultural legislative field as far as this proposal would require and accordingly do not urge it at this time. We believe, however, that the committee should take such matters into consideration in the consideration of S. 1592.

The next section, 803 authorizes the provision of adequate housing for seasonal agricultural workers. We approve this section with the suggestion that the committee may wish to think about the desirability of vesting administrative responsibility for the program in the Secretary of Labor rather than in the Secretary of Agriculture.

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