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EXHIBIT A.-Retail and wholesale prices of meal and prices of live animals at Chicago,

by months, June 1951 to date

United States aver

age retail price per
pound 1

Wholesale prices, Chicago, per 100 pounds

Year and month

Steer beef carcass Cow beef carcass
Beef,
Pork,

Lamb Pork
Choice Lamb
includ-

carcass, prod600-700 500-600 500-600 500-600 ing

30-40 grade

ucts 3 lard pounds, pounds, pounds,

pounds, ComPrime Choice Good

Com-'mercial Utility pounds mercial

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EXHIBIT B.-- Retail and wholesale prices of meat and prices of live animals at

Chicago, by months, June 1951 to date

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$33.45 $30.93 $28.02 $29.08 $25.13 $21.36 $22. 12
33.05 30.00 27. 23 28. 50 24. 21 21.04 22. 50
33. 10 30.08 27. 23 28. 65 24. 37 21.07 22. 23
33. 73 30.82 27. 68 28. 97 24. 63 20. 98 20.84
33. 25 30. 29
27.06 28. 36

24. 31 20. 40 20. 59
33.03 30. 18 26. 90 27.22 22. 96 18. 63 18.69
32. 43
29. 72 26. 62 25. 29

22. 55 19. 64

18. 17 32. 27 29. 59 26.72 24. 26 21.96 19.04 17. 79 31. 90 29. 12 26. 46 23. 71 21. 65 18. 98 17.33 31.34 28. 17 25. 38 24. 29 22.07 19. 26 16. 77 31. 56 28. 16 25.88 24. 90

22. 62 19.54 16. 86

$34. 36 31. 90 31. 59 31. 44 31.29 30.80 30. 57 29.99 27.78 26.96 28.58

1 Corn Belt steers sold out of first hands.
140-50-pound carcass.
Source: Bureau of Agricultural Economics.

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MONDAY, MAY 19, 1952

HOUSE OF REPRESENTATIVES,
COMMITTEE ON BANKING AND CURRENCY,

Washington, D. C. The committee met at 10 o'clock a. m., pursuant to adjournment, the Honorable Brent Spence, chairman of the committee, presiding.

Present: Chairman Spence (presiding), Messrs. Brown, Patman,
Rains, O'Brien, Bolling, Burton, Fugate, Barrett, Hays, Wolcott,
Talle, Cole, Hull, Nicholson, and Betts.

The CHAIRMAN. The committee will be in order.
We will resume the hearings on the Defense Production Act.
The clerk will call the first

witness.
The CLERK. The first witness is Mr. Adin M. Downer, representing
the Veterans of Foreign Wars.

STATEMENT OF ADIN M. DOWNER, DIRECTOR, NATIONAL LEGIS

LATIVE SERVICE, VETERANS OF FOREIGN WARS
Mr. DoWNER. My name is Adin M. Downer, representing the
Veterans of Foreign Wars. I am grateful for the opportunity to
appear before your committee as the spokesman for the Veterans of
Foreign Wars.

The CHAIRMAN. We are always glad to have the views of the
Veterans of Foreign Wars. They are entitled to be heard.

Mr. DoWNER. Thank you, sir.

The last National Encampment of the Veterans of Foreign Wars held in New York City, August 26–31, 1951, adopted a resolution favoring the continuance of price and wage controls. Conditions have changed since that time and I am unwilling to assume that action taken in the light of former conditions would be reaffirmed under the conditions now existing:, I shall, therefore, confine my remarks to the provisions of this bill which relate to credit restrictions as they affect the veterans' home loan program.

The Servicemen's Readjustment Act of 1944 recognized the hardship that would be imposed upon returning veterans of World War II if they were not given legislative assistance in the acquisition of new homes. The assistance given the veteran home hunter under this act has proved socially sound and has proven surprisingly sound from the business or financial aspect. This is attested by the fact that the delinquency rate in VA-direct loans is less than half the delinquency rate of home loans held by large private investors. The claims paid on VA-guaranteed loans is less than one-half of 1 percent. This remarkable payment record by our Nation's veterans evidences

their responsibility and the soundness of making homes available to them without a down-payment requirement.

In view of this experience, we can see no reason for the provisions of section 104(d) of this bill, which would eliminate that part of the Defense Production Act which sets certain down-payment limits for housing guaranteed by the Veterans' Administration pursuant to the Servicemen's Readjustment Act. The result of eliminating this proviso would be to restore to the Federal Reserve Board and the Housing and Home Finance Agency discretionary authority with respect to down payments on VĂ-guaranteed homes.

You will recall that the original Defense Production Act gave these agencies discretionary authority to set minimum down payments and required that veterans preference accorded veterans under then existing law be preserved. However, the credit restrictions as subsequently promulgated violated this mandate of the Congress. You will recall the testimony before this committee less than 1 year ago during the course of which we submitted statistical evidence, which has never been contradicted, and that the veterans, particularly those who were unable to purchase homes above $12,000 were bearing the major brunt of the credit restriction program,

This committee and the Congress agreed with the Veterans of Foreign Wars on this point, and as a result a proviso was inserted in section 605, placing a limit upon the percentage of the minimum down payment which could be required for VA-guaranteed home loans. These were specifically not more than 4 percent on homes the sales price of which did not exceed $7,000; not more than 6 percent where the price did not exceed $10,000, and not more than 8 percent where the price did not exceed $12,000. This sufficiently lowered the required down payments to bring homes within the reach of many low- and middle-income veterans.

Conditions have materially improved since September 1, 1951, the date of relaxation of the credit restrictions as above described. This is evidenced by many factors, including the recent action of the Federal Reserve Board in suspending regulation W. Consequently, we are at a loss to understand why any consideration should be given at this time to increasing the restrictions applicable to the veterans' home loan program. The last National Encampment of the Veterans of Foreign Wars of the United States, held in New York City, August 26-31, 1951, adopted a resolution urging the Congress to abolish all credit restrictions on the purchase of new and used homes by veterans. We believe that changed conditions justify the Congress in taking such action at this time. In no other way can the assistance Congress intended to give home hunting veterans under the Servicemen's Readjustment Act be reinstated.

That concludes my statement, Mr. Chairman.
The ChaiRMAN. Are there any questions?
Mr. RAINS. Mr. Chairman.
The CHAIRMAN. Mr. Rains.

Mr. RAIN. What you are talking about is the removal of what we know as regulation X; is that right?

Mr. DoWNER. Yes, sir.

Mr. Rains. Did you see a statement the other day-I believe it was by Mr. Foley-well, I will say that the statement seemed to point toward agreement with your statement in this matter.

Mr. DoWNER. I read a story in the paper; yes, sir, to that effect.

Mr. Rains. I am one of those who agrees with you. I think the time has come for the removal of that regulation X because I can't see--and I am speaking only for myself--any good purpose which it now serves. You say that the people who are precluded, under that regulation, are mostly veterans; is that right?

Mr. DOWNER. Well, sir, the law as it now exists, sets the downpayment limits, as I mentioned in the statement, of 4, 6, and 8 percent for housing financed under the Servicemen's Readjustment Act.

The bill before this committee, as written, would remove that restriction, and place the veterans' home-loan program in the same category and place it all under regulation X.

Mr. Řains. Of course, one of the reasons for the regulation is not only to curb inflationary tendencies, but also because of the extreme shortage of building materials which now we are told have eased up considerably and are in much better shape than a year ago.

Mr. DoWNER. Yes, sir; I think that is correct.
Mr. RAINS. That is all.

The CHAIRMAN. You are interested entirely in the regulations on veterans' homes?

Mr. DoWNER. Yes, sir.

Mr. COLE. Mr. Downer, is the National Headquarters here receiving a lot of letters or complaints from its local posts about the housing situation?

Mr. DoWNER. Do you mean in regard to the scarcity of financing?
Mr. COLE. Yes.
Mr. DoWNER. Yes, Mr. Cole, we receive some such complaints.

Mr. COLE. On the basis of those complaints, is the attitude of your organization that something must be done to assist the veteran in his desire to purchase a home?

Mr. DoWNER. Yes, sir.

Mr. Rains. I would like to ask one other question, if I might. It has nothing to do with this particular

bill, but since you are here and representing the Veterans of Foreign Wars and in view of the question which Mr. Cole asked you, and since we are both of us on a subcommittee looking into shoddy and defective housing, let me ask if you are getting many complaints at the national office, from veterans who have bought houses, financed under the VA program, in which they complain of shoddy and defective construction?

Mr. DoWNER. We bave had hundreds of such complaints in the past. I don't recall that we have had very many recently. But over the past year or two we have had hundreds of such complaints from all parts of the country.

Mr. Rains. What did you do with them? Refer them to the Veterans' Administration?

Mr. DoWNER. Well, actually, in most instances there would be nothing we could do, except advise the veteran to consult a local lawyer to determine whether or not he had any right of action.

The CHAIRMAN. I think we will agree that it is not only essential that the veterans be able to secure homes, but that when they get homes they should be the type of homes they expected to get under the specifications. I think we should do everything we can to assist them on that score.

Mr. DoWNER. Thank you, sir.

The CHAIRMAN. Are there any further questions? If there are no further questions, you may stand aside.

Call the next witness, Mr. Clerk.

The CLERK. The next witness is Mr. Allan E. Brockbank, president of the National Association of Home Builders.

STATEMENT OF ALLAN E. BROCKBANK, PRESIDENT,

NATIONAL ASSOCIATION OF HOME BUILDERS

Mr. BROCKBANK. My name is Allan E. Brockbank. I am a home builder active in Salt Lake City, Utah, and appear before you today in my capacity as elected president, for the current year, of the National Association of Home Builders.

Our association has grown in the last few years to where at this time it has approximately 25,000 members in nearly 200 cities. We feel that our membership builds from 75 to 80 percent of the houses in this country. Like the former witness, we feel that our chief interest in the Defense Production Act concerns the regulation of housing credit. We are very much concerned about the fact that this bill not only extends the authority for the housing regulations, but it goes back to the old program which was in effect before the Congress, in our opinion very wisely, changed it last September. This bill does away with all the authority or changes that were made by Congress, and reinstates the old program, which we considered to be very discriminatory.

Now, if you will remember, last September the changes were made principally as to the houses selling for less than $12,000, and more particularly, as the former witness stated, with respect to the veterans housing program. We feel that there is no reason whatsoever that we know of why real estate credit controls should be carried on any further at this time.

As you remember very well, there were two reasons given for the establishment of credit controls. One of them was the need to conserve critical materials. The other one was to curtail the excessive flow of credit in the mortgage financing field, because it was felt that if that was not done it would add to the inflationary tendencies in the country, and that would seriously jeopardize our economy.

With respect to materials, I need only say to you that last Thursday the controls on materials were greatly relaxed-even to the extent that we could, beginning on the first day of July, build recreation centers and buildings which have been stopped for a long while. In fact, it was the first building that was stopped, and that is to be relaxed again on the first day of July so that we can go ahead with even that kind of construction.

I think this is indication enough that there is no need for further control of materials. In fact, so far as your program is concerned, with the possible exception of copper, we have had no trouble whatsoever obtaining materials all the way through the program since the Korean incident started. And we are told, by people who are in our business, so far as suppliers are concerned, that there is an ample supply-in fact, there may be even a larger inventory than normal in this country, in building materials.

So, of course, that is an indication that we no longer need the controls for that reason.

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