also the broadest kind of power over personnel in the Federal home loan banks and over examiners and supervisors of all these local institutions in your town and mine. It includes power by administrative law to say who can be the directors of these associations, locally, and to regulate the acts of local employees.

It includes power to prescribe appraisal and even to require Government appraisal. It includes power to prescribe minimum home sites and, therefore, to control subdivision of land. It includes power to prescribe building standards and, therefore, to control what kind of a house we can finance at the fork of the creek and much other power over many other local activities. Such power in one man in Washington in the first place will not work, and in the second place, is completely inconsistent with our whole system of Government and all of our methods of doing business.

The Federal Housing Administration was created by Congress in 1934 and has carried on a program which has been popular with the people of the country and with Congress. Substantially all the people who have studied that system, and who are interested in it, object to the provisions of this plan which would authorize the transfer or control of its most vital functions to the National Housing Administrator.

The facts are, gentlemen of the committee, that the uncounted thousands of building material producers in this country can, and will, produce building materials if permitted to do so. The forty-odd thousand home builders can, and will, build homes for the people, like the people want them, if they are permitted to do so.

Some 6,000 savings and loan associations, 15,000 banks, and a great number of insurance companies and mortgage companies and individuals will finance homes, and on the most favorable basis ever known in this country, if they are permitted to do so. After the fighting of the wars is over, we ought to be looking in the direction of permitting American economy to function instead of in the opposite direction of a national socialist economy.

The National Housing Agency, if you permit this plan to go into effect, will have such great power and will have such great means of propaganda that it can make it appear to the people that the only way to get a shelter over their head is to have the Government do it.

This is not true, and you gentlemen of this committee know it is not true. I have come to you after 25 years of study of thrift and home ownership in the United States. In the last 12 months I have traveled almost throughout this country and have discussed housing and home ownership and veterans' housing with all groups interested in the question. I never in my lifetime saw such confusion in the housing field as we have today. The average small builder is utterly unable to function. I never saw as unanimous opposition to any public question as we have from all of those interested in this question against title I of the Wagner-Ellender-Taft bill, which is part V of Reorganization Plan No. 1 of 1946.

This plan is the clearest illustration today of the method of taking advantage of emergency, or creating one, if necessary, to accomplish national socialist objectives. The first public housing was authorized in the excitement of 1933. The largest single public-housing program took place under the Lanham Act in the emergency of war.

In the teeth of the Lanham Act, which prohibits use of that housing as public housing, the National Housing Agency has come to Congress and got more than $400,000,000 in the last year to move Lanham Act housing and transfer it to the public housing authorities for public houses. A few units were moved to college campuses to camouflage the operation.

At present, with an admitted housing emergency, the situation is being implemented by a perfectly hopeless regulation so that the public is well-nigh frantic for housing. In this situation, when the Congress has declined, to date, to do the same thing in the WagnerEllender-Taft bill, we have an Executive order to accomplish the same result. It is your country and mine. I have great confidence in the House of Representatives.

Mr. Chairman, I would be glad to try to answer any questions if any members of the committee have any questions.

The CHAIRMAN. I think you made a very fine statement, and we thank you, Mr. Russell.

The next witness is Mr. Philip W. Kniskern, National Association of Real Estate Boards.

STATEMENT OF PHILIP KNISKERN, NATIONAL ASSOCIATION OF REAL ESTATE BOARDS

The CHAIRMAN. You may proceed, Mr. Kniskern.

Mr. KNISKERN. Mr. Chairman, I am Philip W. Kniskern, of Philadelphia. Among other activities, I am president of the First Mortgage Corp. of that city; chairman of the board of directors of the Quaker City Federal Savings and Loan Association; and a past president of the American Institute of Real Estate Appraisers. I appear here on behalf of the National Association of Real Estate Boards, of which I am a director and a past president. The National Association of Real Estate Boards represents 800 local real estate boards and their 30,000 firm members throughout the country.

I think I can take pardonable pride in the fact that during the days when the Home Owners' Loan Corporation was making its loans, I served as the appraisal adviser to the Federal Home Loan Bank Board, and in that capacity directed the appraisal activities throughout the country.

Through my present business connections I am in constant daily contact with the activities of the Federal Home Loan Bank Administration and the Federal Housing Administration, where I am originating and servicing FHA mortgages. Furthermore, I have had intimate contact with the Federal Public Housing Administration through service as chairman of the National Advisory Committee, cooperating with the war program of converting homes and other existing structures into residence units for war workers.

I am in opposition to the creation of a permanent National Hot ing Agency as proposed in Reorganization Plan No. 1. My reaso is for opposing this Reorganization Plan No. 1 may be broadly grouped into four general classifications:

(1) The plan is dangerous because superficially it sounds plausible and rather intriguing, but when one studies its real effects, it is found to be most misleading and very beguiling.

(2) The proposal does not accomplish the intent of Congress as set forth in the Reorganization Act of 1945, nor does it accomplish that which all careful thinking people believe should be the aim of our postwar reorganizations. It does not accomplish any savings, nor does it promise any increased efficiency.

(3) The program is unsound and not for the best interest of the Nation, nor for the best interests of the housing of the people of the Nation.

(4) There is no emergency and emergency action is not required, since the Veterans' Emergency Housing Act covers all immediate requirements.

The proposal is misleading and beguiling because upon superficial reading and consideration, it appears to place all of the housing problems of the Nation into the directive control of one individual.

However, as my presentation is developed, it will be evident that the wide divergence of the lines of Federal activity in the housing field make it essential that there be effective checks and counterchecks in order that one line of activity does not frustrate the activity in another essential line.

We oppose the continuation of the National Housing Agency in peacetime because it violates the stated purpose of the Reorganization Act, because there has been no opportunity for Congress to consider the proposal, because it would result in an extension of restrictive governmental controls over housing, and because it would unquestionably impair the splendid services which the Federal Housing Agency and the Federal Home Loan Bank Board have rendered to the construction industry, particularly to the thousands of small businessmen who build and finance and service the Nation's homes.

We have been led to believe, Mr. Chairman, that the principal purposes of governmental reorganization are to effect economies in government and to enable the Government to function more efficiently. Indeed, Public Law 263, known as the Reorganization Act of 1945 and approved December 20, 1945, specifically states that such reorganizations are intended, first, to reduce expenditures and promote economy; second, to increase the efficiency of the operations of the Government; third, to reduce the number of agencies; and fourth. to eliminate overlapping and duplication of effort.

The establishment of a permanent National Housing Agency as proposed in Reorganization Plan No. 1 would accomplish no one of these purposes and, indeed, would bring completely opposite results. Nowhere in plan No. 1 or in the message accompanying it, is there any hint of economy. Nothing is eliminated, except the authority of the heads of the constituent agencies which would be covered into the National Housing Agency, and they then become subordinate to one-man rule. Titles of officials are changed, responsibility is shifted from one official to another, but nothing of consequence is removed from the existing governmental structure.

To the contrary, the Administrator of the permanent agency is given broad new powers to engage in research and statistical activities and to dictate the policies and control the personnel of the constituent agencies.

Moreover, the very scope of the authority given to the Administrator is such as to guarantee an immediate demand for a huge super staff

to be assembled for the purpose of assuming sweeping control of housing activities, both private and public. That has happened time and again in the past, and there is good reason to believe it would happen again in this instance. Officials of the temporary National Housing Agency for many months have been hard at work planning their huge public housing program.

Nowhere do I find any hint of increased efficiency. Indeed, the purpose and effect of this plan are to subordinate the programs and activities of existing and highly respected agencies to the authority of a new official superimposed over those agencies. Far from increasing efficiency in government, plan No. 1 would remove all freedom of action which has enabled the constituent agencies to function successfully in the past.

The one outstanding result of this plan, Mr. Chairman, is not to effect economies or promote efficiency, but rather to add another peacetime agency to the long list now existing in the Federal Government.

Nor does the proposal in any way promise to eliminate overlapping or duplication of effort. The way is open, under the terms of the plan, for a National Housing Administrator to duplicate the statistical programs of the Census Bureau and the Construction Division of the Department of Commerce, which are far better qualified to assemble and analyze housing statistics.

If time permitted, elaborate and very ample proof could be given to your committee of the manner in which statistical studies and data have been warped and twisted to prove the points desired by interested agencies. This is a perfectly natural result, whether it be in connection with housing or any other human activity.

There can be no question but what the Government policies on housing would be much more sound and effective if they were based upon statistical programs and data accumulated by a bureau or group completely independent of those interested in any particlar theory or policy of government.

In addition, the Administrator could duplicate the construction research being done by other governmental agencies, and demoralize Federal credit policies.

We are convinced that, when Congress has had the opportunity to examine the scope and impact of this proposal, it will reject the idea in toto, and we urge that no such proposal be adopted until Congress has had a chance to look into all of the implications this plan involves. It is most significant that a similar, though less sweeping proposal, has been under consideration in Congress for many months, without final action.

Those who conceived this reorganization plan knew full well that neither branch of Congress would wish to accept so far-reaching a proposal without the most careful deliberation. They knew that the House of Representatives had not begun to consider the matter of coordinating the housing agencies. Many of us feel that is why they chose this method of rushing through their plans for a National Housing Agency.

There is no reason in the world, Mr. Chairman, why the House should not give full and complete consideration to this. This plan gives no new authority that the Housing Expediter does not already possess under the Veterans' Emergency Housing Act. Indeed, the Expediter's emergency powers extend beyond those provided in the

reorganization plan. Those powers continue for another 18 months, which means that Congress has ample time to consider this proposal and will in no way retard the housing program by taking time to deliberate and analyze the issues involved. In short, this is in no sense an emergency measure, and it in no way requires emergency action or hasty consideration. Establishing a permanent National Housing Agency now will not speed up the building of homes for veterans or shorten the housing emergency.

We object to this part of the reorganization plan also, Mr. Chairman, because it clearly is a device for extending the controls which have been established over housing during the emergency. The individuals who have been preaching the need for a super agency in the housing picture are the same individuals who believe that the Government should and must dominate every phase of housing. They are the same individuals who piously insist that private enterprise should be permitted to do all it can to meet the Nation's housing needs and then, in the next breath, insist that private enterprise is sure to fail.

They are the individuals who want federally financed public housing for nearly half the population, who want to say where our future homes shall be built, and what they shall look like. They are committed to the belief that Government control over housing is essential. They advocate subsidies and guaranteed markets in the home-building field.

Just as Reorganization Plan No. 1 would perpetuate an agency that was established purely as an emergency wartime measure, so do those individuals seek to perpetuate many of the controls set up to meet wartime conditions. The National Housing Agency would be their vehicle for continuing and expanding these controls. There is no sound or plausible reason for such an agency in peacetime; their real motive in seeking this permanent housing agency is perfectly plain to those of us who have studied their aims and public statement.

I have already stated, Mr. Chairman, that the establishment of a National Housing Agency would impair the services of the Federal Housing Agency, which insures loans on homes, and of the Federal Home Loan Bank Board which stabilizess mortgage credit.

The agencies were established to aid home building and home owners during the depression and have made outstanding records. They helped greatly to stimulate home building and home ownership before and during the war, and private enterprise has counted on them to perform equally valuable services in the future.

As a matter of fact, the Home Owners' Loan Corporation, the Federal Home Loan Bank Association, and the Federal Housing Administration, have established outstanding records of effective and efficient Government administration.

The policies and operations of these agencies in the past have been such as to build confidence in government and in its attitude toward those who provide the Nation's homes. The agencies have encouraged and faciliated a steady flow of capital for private housing and will continue to do so if left free to continue the policies they have followed in the past.

Builders, realtors, and financing organizations have learned by long experience that the Federal Housing Agency and the Federal Home Loan Bank Board were committed to aiding private enterprise in the housing field, but there would be no such assurance once these