controls the volume of each. It can expand or contract operations under any housing program whenever it desires.

Finally, the plan does not subordinate the private-housing programs to the public-housing program.

The CHAIRMAN. Mr. Wilson, any questions?

Mr. WILSON. I believe this plan would in effect attempt to make a permanent agency out of the Government building and housing and so forth, would it not?

Mr. LAWTON. No, sir; it would only make it permanent to the extent that Congress authorizes a basic program in housing of any kind, constructed by the Government, and financing such a program. This plan cannot create a function. It simply provides that the administration of certain housing functions that Congress provides will be located in a single-housing agency.

Mr. WILSON. It does in effect take a lot of war-created agencies and puts them under a permanent agency and providing Congress appropriates the money they would be able to spend it all right, would they not?

Mr. LAWTON. No, I would not say they are war-created agencies. In the first place, the Federal Home Loan Bank Board is not and the insuring-savings organization is not.

The

Mr. WILSON. Some are not, but some of them are, are they not? Mr. LAWTON. The only functions that are war created are the liquidation of the defense housing that was built during the war. defense-housing programs of the War and Navy Departments, the Maritime Commission, and the Federal Works Agency, are in this agency for liquidation and disposal under the terms of the Lanham Act.

The veterans' guaranty of housing loans to veterans, of course, is a postwar program. The Housing Expediter's functions are not included in this; they are temporary, but they are not in this agency. Mr. WILSON. What additional powers are granted by this reorganization plan, other than exists today by law?

Mr. LAWTON. There are no additional powers granted. It isn't a question of creating any housing functions. You are not passing a law that creates any functions; you are simply providing that instead of the Home Loan Bank Board system and the Federal Housing Administration reverting to the Federal Loan Agency on the expiration of title I of the First War Powers Act, 1941, and the USHA program reverting to the Federal Works Agency, they will be together in a housing and home finance agency.

Mr. WILSON. Is not this bill though in the nature of the WagnerEllender-Taft bill to a certain extent?

Mr. LAWTON. Only as far as the administrative provisions or the organizational structure of the Wagner-Ellender-Taft bill is concerned. It has nothing to do with any of the substantive features of the Wagner-Ellender-Taft bill, namely, the granting of additional authorities to various agencies, or the creation of functions.

Mr. WILSON. As a matter of fact, these present agencies already have just about as much authority as these other bills gave them? Mr. LAWTON. No, I think the Wagner-Ellender-Taft bill provides for a number of things that are not included at the present time. It has a connection with your urban redevelopment. It deals with expansion of publicly constructed housing.

Mr. WILSON. You are for this plan?

Mr. LAWTON. Yes, sir.

Mr. WILSON. That is all.

The CHAIRMAN. Mr. Jenkins.

Mr. JENKINS. The only thing I would like to ask, Mr. Chairman, is whether or not it is not a fact that by approval of this reorganization plan, we create a new housing administrator with his assistants and all the rest of it; in other words, a new left bureaucratic level over and above the one now existing.

Mr. LAWTON. Do you mean now existing by permanent law?

Mr. JENKINS. Now existing in relation to these various agencies that it is proposed to consolidate into one administration.

Mr. LAWTON. Let me answer that on two points: First, you now have a National Housing Agency. Of course, that is a temporary organization. You have a National Housing Administrator, who has more authority than this plan proposes to grant to the new Administrator. The present agency expires with the end of the War Powers Act.

In the present proposition, you have the permanent functions of two heads, the Federal Loan Administrator and the Works Administrator. Mr. JENKINS. Do you propose under this plan to dispense with both of those officials?

Mr. LAWTON. They will continue on to perform their other functions. We will not put housing functions under them. They will continue. You will have one Administrator here for the housing functions.

Mr. JENKINS. Whom you never had before.

Mr. LAWTON. Whom you did not have before, that is right.

Mr. JENKINS. Together with all his assistants, office personnel and all the rest of it.

Mr. LAWTON. Such as Congress provides; yes, sir.

Mr. JENKINS. Has the Bureau of the Budget a statement as to the number of personnel that will be required by this new Housing Administrator in connection with your study of this plan?

Mr. LAWTON. No, sir.

Mr. JENKINS. Do you not think that would be an interesting fact to have on the record for the guidance of Congress?

Mr. LAWTON. It will not be greater than is now provided during the current year for the National Housing Administrator.

Mr. JENKINS. I thought you said you had not made a study. Upon what do you base that latter statement?

Mr. LAWTON. In that the authorities involved in this job are no greater than, and to some extent less than, those. of the present National Housing Administrator.

Mr. JENKINS. But that set-up will expire. This reorganization plan proposes to make it permanent.

Mr. LAWTON. That is right; a corresponding set-up.

Mr. JENKINS. I understand. That is all.

The CHAIRMAN. Mr. Karsten.

Mr. KARSTEN. Mr. Lawton, I would like to ask you how many agencies it is proposed to consolidate under this one head?

Mr. LAWTON. Home Loan Bank Board, Federal Loan Insurance Corporation, and the Home Loan Insurance Corporation will be the bank

set-up. The Federal Housing Administration will comprise another unit. The Public Housing Administration (formerly the United States Housing Authority) and certain temporary war housing activities will constitute a third unit, which will be concerned with public housing. The Administrator will be the disposal agent of certain war housing functions.

That would otherwise revert to the Federal Works Agency and the War and Navy Departments.

Mr. KARSTEN. This liquidation function is only a temporary thing. That will go out of the picture.

Mr. LAWTON. Two years after the end of the war those houses are to be disposed of unless there is a need.

Mr. KARSTEN. I would like to ask you if you have this consolidation in your opinion, would it result in greater efficiency and perhaps reduce the expenses of the over-all agency if they were all under one head or authority?

Mr. LAWTON. I cannot answer that specifically. I can only answer it in this general fashion, that in the unification of the housing activities under one general direction.

Mr. KARSTEN. There is undoubtedly a lot of duplication in many of them right now; is there not?

Mr. LAWTON. There is some. There could be more if they were in separate agencies under separate direction and competing as they had in the past for their own programs.

Mr. KARSTEN. There apparently is a considerable amount of opposition to this bill. I haven't had a chance to read all these statements. I would not wonder if you have.

Mr. LAWTON. I haven't seen any of them, sir.

Mr. KARSTEN. I just wanted to get your reaction to them.

You are in favor of the present plan, are you?

Mr. LAWTON. Yes, sir.

Mr. KARSTEN. That is all the question I have, Mr. Chairman.

The CHAIRMAN. Might I ask this question: Does this unification give us the efficiency and economy like the reorganization bill that we passed last year on our committees, where we abolished so many committees and just had a few?

Mr. LAWTON. I am not competent to pass on the bill, sir.

The CHAIRMAN. That is what some of us are fearful of.

Mr. RIEHLMAN. I understand in section 2 of this reorganization Act here it specifically says to reduce expenditures and promote

economy.

I want to ask this question in referring to that: Referring to the Budget set-up for 1948 against 1947, I note that there is a differentiation and an increase of $3,707,000. Does that lend toward efficiency and economy in that grouping of those different departments, or agencies, together?

Mr. LAWTON. There is a differentiation in what, sir?

Mr. RIEHLMAN. In the budget for 1947 as against 1948; something like $3,707,000 more for the year 1948 than for 1947. Is that true? Mr. LAWTON. I do not have those figures at hand with which to verify it.

Mr. RIEHLMAN. I would like that if you have it, please.

(The information is as follows:)

The actual increases and decreases for the fiscal year 1948, as compared with the fiscal year 1947, are as shown in the following table:

Estimated administrative expenses of National Housing Agency and constituent

units

[Includes all revisions and amendments to budget for 1948 through June 9, 1948]

1 Includes $150,000 assessment against constituent units, which is also included in their figures.

+1, 195, 900

While the net increase of $1,195,000 shown in the above table is a correct figure, it does not coincide with the figure of $3,707,500 mentioned in connection with the question asked by the member of the committee. The latter figure is based on incomplete data. The two figures are reconciled as shown in the following table:

Reconciliation of reported increase of $3,707,500, fiscal year 1948 over fiscal year 1947, with actual increase as shown in table above

Increase as reported_

Deduct:

Pay Act costs in 1947, not reflected in above figure_- $2,066, 000
Decrease in administrative expense funds of the office

$3, 707, 500

9,400

Add adjustment for overstatement of FPHA administrative expenses, 1947 (shown as $18,009,400; should be $18,000,000) –.

Actual increase, 1948 over 1947_.

1, 195, 900

The corrected increase figure of $1,195,900 is a net figure, made up of increases and decreases. It will be noted from the first table above that the increases are all in the private housing programs, namely, the Federal Home Loan Bank Administration and the FHA; that decreases occur in the case of HOLC and the office of the Administrator; and that all the other decreases are found in the public housing programs, namely, the FPHA and the Defense Homes Corporation, Mr. RIEHLMAN. That is the only question I have.

The CHAIRMAN. Mr. Hardy?

Mr. HARDY. As I understand this plan, it proposes to put all Federal housing activities under one head. That includes your banking functions, with respect to private builders, and your public housing projects and programs.

Is not your public housing program somewhat in conflict with assistance to private buildings or banking aids for private builders?

Mr. LAWTON. Not necessarily at all. It may take care of a field which the private builder does not care to reach.

Mr. HARDY. That is probably correct, but is it not more logical to separate your banking functions from socialized housing, if you want to call it that? Are we not mixing here two things that do not mix very readily?

Mr. LAWTON. No; I do not think so, because one of the essentials of determining what sort of a housing program you need is a knowledge of what is going on in the housing field in a particular locality, a knowledge which is gained through your housing finance agencies, and certainly it will avoid unnecessary expenditure of Federal funds for federally constructed housing if there is adequate private housing being constructed in the same area.

Mr. HARDY. It does not necessarily follow that they would have to be under the same head to take care of that conflict?

Mr. LAWTON. It is much more readily dealt with when there is one person responsible for the housing program, rather than have its responsibility diffused among two or three other persons whose responsibilities are partly in that field but perhaps to a major extent in some other field.

Mr. HARDY. Your home-loan bank is essentially a proposition for assisting private builders, is it not-for making loans to private builders?

Mr. LAWTON. The home-loan bank system is, of course, a financing agency for the building and loan associations.

Mr. HARDY. That is for private construction?

Mr. LAWTON. Yes; for private construction.

Mr. HARDY. Is that not somewhat opposed in principle to the construction of public housing, the slum-clearance projects, in fact?

Mr. LAWTON. I do not think it is opposed in principle; not at all. The Congress, in establishing the United States Housing Authority and passing the United States Housing Act of 1937, providing for slum-clearance and low-rent housing, perhaps felt there was an area in which little would be done toward the improvement of housing unless there was some Federal aid to the local communities in providing such housing for persons who could not pay a rental that would make it profitable to privately construct those houses. That is a congressional policy. That is not involved in the plan.

Mr. HARDY. I understand that; but if you consolidate these two functions under a single head, is there not a danger that one will be subordinated to the other?

Mr. LAWTON. I would not think so; no. I do not see that danger unless you are envisioning the type of person who would deliberately pick which acts of Congress he wanted to carry out and which he wanted to slight.

Mr. HARDY. We do have that type in some bureaus; do we not?
Mr. LAWTON. I don't know that you do.

Mr. BOGGS. You are not holding yourself out here as an expert on housing problems; are you?

Mr. LAWTON. No, sir.

Mr. BOGGS. In the preparation of your statement, did you consult the various general counsels of the agencies involved here?

Mr. LAWTON. No.