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which I refer at the conclusion of this statement is another example of how agencies can be grouped without consolidation.

The difficulties of consolidating all housing activities in one agency is shown by the fact that this proposed National Housing Agency omits one of the most important of the Federal Government's housing agencies. That is the Veterans' Administration. The National Chamber's organization members, in the referendum to which I referred earlier, have expressed themselves in favor of continuing in the Veterans Administration the assistance which the Government is giving veterans in the purchase of homes. There is no other practical way to handle such assistance, even though it injects another Government agency into the Federal Government's activity in the housing field.

For at least the next 10 years the Veterans' Administration will be the most important single Federal agency in the mortgage field. Yet it is not considered practicable by the Government planners themselves to bring this Administration under the same supervision as is proposed for the Federal Housing Administration and the Federal Home Loan Bank Board.

Congress should at once restore the Federal Housing Administration and the Federal Home Loan Bank Board to their previous positions of influence, leadership, and responsibility. This will do more than any other single action to encourage housing progress in this country. Congress can do this most effectively by refusing to favor the President's proposal to set up a permanent National Housing Agency and by giving careful study and consideration, in connection with pending permanent housing legislation, to the proper places in the Government's organization structure for both the private credit as well as the welfare functions of the Government which relate directly to the public's interest in better housing.

In making this recommendation I have no doubt it leaves you with the same question in your mind as I have in mine, namely, if we are not to place the Federal Housing Administration and the Federal Home Loan Bank System in a permanent National Housing Agency, where then are we to place them?

There was a time when these two agencies, together with the Reconstruction Finance Corporation, were grouped together in the Federal Loan Agency. It is to be noted that this Federal Loan Agency was set up by President Roosevelt acting under authority of a previous reorganization act of 1939, which was somewhat like the present Reorganization Act of 1945.

The Federal Loan Agency was broken up as a result of action taken by the President under his war powers. By Executive order he transferred the Federal Housing Administration and the Federal Home Loan Bank Board to the National Housing Agency. He transferred the Federal Loan Agency itself together with the Reconstruction Finance Corporation and its subsidiary corporations to the Department of Commerce. Later on Congress separated the Federal Loan Agency and the Reconstruction Finance Corporation from the Department of Commerce.

The members of the National Chamber have urged that the Federal Loan Agency be made active again and that the Federal Housing Administration and the Federal Home Loan Bank Board be returned to

this Agency. It seems to me that we should frankly face the necessity, from a Government reorganization standpoint, of either restoring the Federal Loan Agency to its prewar status of prestige and influence or of transferring all of the agencies formerly grouped under it to the Treasury Department. Certainly the President, as the chief administrative official of this great Government, cannot do his job properly if he has too many agencies reporting to him. We are in sympathy, therefore, with his objective of reducing the number of agencies which do report to him, although we find ourselves compelled to disagree with his proposal to set up a permanent National Housing Agency. We believe that his reorganization purposes would be served better by keeping the private credit functions of the Government in one grouping and its welfare functions an another. Mr. WEST. I think the institutions around the country would have bought a greater quantity of stock than they were actually compelled to under the law in the Federal Home Loan Bank System had they had some assurance in the last few years as to where they would ultimately go. We speak of the Federal Home Loan Bank Board as an entity because it was the operator of these four institutions I first described. We do know that the President abolished that Board. That Board was a Board of five men appointed by the President and confirmed by the Senate, and left that Federal Home Loan Bank Board, a Federal Home Loan Bank Administration with a Commissioner operating it. It has operated that way under the National Housing Agency. It seems to me that the Federal Home Loan Bank System, the 12 banks, and the Federal Savings and Loan Insurance Corporation had little, if anything, to do directly with the war question. They were originally independent agencies of the Government or departments, and in the one case, they are a reserve credit agency, and in another case an agency set up to give the people of this country an insurance up to $5,000, that well-known limit, the same as on bank deposits, for people who put their money in Savings and loan associations and the type institutions I described. They have among their stockholders, insurance companies. Therefore, certainly it is a reserve credit system, that is, the bank system. The insurance corporation is certainly a corporation that institutions are permitted to call themselves a member of that affords that security which I described a while ago, ultimately that the Government, up to $5,000, will say that the money in these institutions, either shares, or investments or accounts or deposits is good from day to day and at par. These institutions have served a great credit purpose. Of course they have induced people to save their money in these institutions, some $6,000,000,000 worth and in turn it is loaned to people to own homes and to provide shelter for themselves. Therefore, these agencies are agencies to stimulate private enterprise, and so it can be said of FHA. Now the question comes to you gentlemen as to whether or not we are going to consider everything that has the remotest touch to housing and place it all under what is called a National Housing Agency because the President in his reorganization plan, you gentlemen have before you, proposed a National Housing Agency as a permanent agency of government.

If we study the question, we certainly are aware of the fact that the National Housing Agency is dominated by officials who think in the main about public housing and welfare housing, housing for the poor people of the country with Government subsidy and maybe a direct ownership. I call your attention to the fact that the Congress has quite properly delegated to the Veterans' Administration, a plan of guaranty to a veteran of this war a home on a most liberal basis. Certainly none of us can imagine that that authority could be delegated to any other part of the Government. I might say again, and I speak for my own institution, because I know about it and I do not know about everybody else's institutions, that we have made loans of over $2,000,000 to servicemen to buy homes under the GI bill of rights. That is 461 loans. They are closed and are not conversation. We do not feel that the Federal Home Loan Bank Board as originally constituted for the 12 reserve banks, or the Federal Savings and Loan Insurance Corporation, or the Federal Housing Administration, that they belong with the public housing group. The CHAIRMAN. Do you object to my interruption? Mr. WEST. Not a bit, sir. The CHAIRMAN. Why do you object to having the lending agencies under the same head as the building and operating agencies? Mr. WEST. We do not think that we belong in the charity department of Government. The CHAIRMAN. Are they not both in a way socialized institutions? I thought the Chamber of Commerce was opposed to the Government being in business at all. Mr. WEST. Well, the Federal Reserve Bank System belongs to the bankers, they put up the capital for it ultimately, and to that extent they own the capital, yet it is under a wing of the Federal Government and is a reserve credit system to the bankers. The CHAIRMAN. Things like the FHA, are loans guaranteed by the Treasury of the United States? Mr. WEST. No, sir; the Federal Housing Administration does not loan money. The CHAIRMAN. They are in the insurance business? Mr. WEST. Yes, sir. The CHAIRMAN. It looks to me like both of them are in a way nationalized industries. Mr. WEST. If you should ask me whether or not I agree with Federal Housing that would probably, Mr. Chairman, be another question. I will be very glad to express my personal views on the subject. . The CHAIRMAN. The same is true of the Federal savings and loan institutions. Mr. WEST. Congress, of course, about 80 years ago decided that 48 States had laws about banking and they decided to afford the bankers of the country and the people a uniform system, so they offered to the bankers at that time a national charter and they are associations under that law. So they did with savings and loan associations in this country, in 1934. They said to the savings and loan people, and homestead associations, which are largely in the central South and cooperative banks in the New England States, “If you want to con

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vert to a Federal charter and be under Federal supervision, you can do so" and they said ultimately to the people of this country, "If you are in Seattle and you see the words 'Federal savings and loan association you have same assurance if you came from Charleston, that you are dealing with one and the same kind of institution.”' One State at least in the Union still has no regulatory authority of any kind over savings and loan associations. Other States have miscellaneous kinds. Some were second mortgage companies, some were third mortgage companies and some did various and sundry things. However, the public now has the assurance when they see Federal savings and loan, and they must incorporate that much in their charter, that they are dealing with the same kind of institution in Detroit that they deal with in Birmingham.

The CHAIRMAN. What I am trying to find out, since they are both operated by the Government, under Government supervision and control, the Government money is used, why is there any difference between the two operations?

Mr. WEST. I think when the United States Government came to Atlanta under Mr. Ickes and built two housing projects with public funds, and owned them outright, that that is entirely a different kind of operation from my savings and loan association in which the Government has no money

of
any

kind. The CHAIRMAN. They put no money in your savings and loan association nor did they guarantee your desposits?

Mr. West. Congress authorized the putting of money originally in savings and loan associations the same as it did the purchase of preferred stock in banks, that was preferred for a while and then they withdrew it.

The CHAIRMAN. In the Federal land banks Congress put up money for Federal land banks, permitting them to pay out obligations, is that not the Government in business just the same as building houses?

Mr. West. Well, the savings and loan associations that did take that money have paid it all back. It has all been paid back for the most part.

The CHAIRMAN. We have been building houses for everybody, and the Government is doing the job, saying they will pay out in 40 or 50 years.

Mr. WEST. I do not think there is any plan at all for the Atlanta Housing Authority to disgorge its home in Atlanta, it is intended that the city of Atlanta will own those houses always, with the Federal Government paying for them and the city is going to get it free when the Federal Government gets through paying for it.

The CHAIRMAN. They are supposed to pay it back to the Federal Government.

Mr. West. It will never go to private enterprise.

The Chamber of Commerce, I am willing to say, Mr. Chairman, recognizes some of these things as all-time affairs. I do not think the Chamber of Commerce has ever resoluted against all sorts of subsidy in Government. I do not think any of us could do that. I think we would start off then with the air lines, air mail, post offices and dozens and dozens of other things that we as taxpayers are all willing to make some contribution to.

Mr. RANDOLPH. Those are subsidies in the first instance, but later pay dividends to the American people.

Mr. WEST. Which ones? Mr. RANDOLPH. The air mail, for instance. Mr. WEST. I do not know about that. Certainly, in the case of public housing, I do not think they ever intend to pay the Government any dividends. Do you have a question about that? Mr. RANDOLPH. If I were to start questioning, I would wonder if the reorganization plans of the President, each and every one, is going to be opposed, because some group does not want to come under a new grouping. I think if we are going to have efficiency and economy, that these reorganizations plans by and large must pass and become actual reorganization, rather than just proposals to the Congress. Mr. WEST. We are in favor of consolidation of governmental agencies, too. Of course, to get back to the very law that you gentlemen passed as to why the reorganization should be lood, certainly we all agree with those six reasons but I cannot see to start with our own bank system now that we think we own, and ultimately will own all of it, must pay a tribute to another administrator in this process. We do now. I mean the National Housing Agency, under that Agency now, and notwithstanding the abolition of the five-man board and only one man has been operating during the war, we now as a banking system are paying money to maintain the National Housing Agency at the present time which we did not pay before. Under this proposal of the President, the National Housing Administrator is going to be a decidedly superior man to the man that operates the bank system and is total boss. We simply feel that the money which we would like to see saved in that Reorganization Act there is going to a superagency in the Government in the process of duplicate management. It was the belief of the members of the Chamber of Commerce of the United States that these agencies which I have described, the Federal Home Loan Bank System, Federal Savings and Loan Insurance Corporation, and Federal Housing Administration should be placed back in the Federal Home Loan Agency. That is from whence they last came, at any rate. They are not concerned with the question of public housing. - The CHAIRMAN. Has your operations been crippled any since they have been put under the National Housing Agency? Mr. WEST. I cannot answer that question, sir. I think we have all traveled on an artificial basis up until this morning, since the war started. I do not know whether we have been crippled or not, but I do not think we have been benefited. The CHAIRMAN. You have been under it for 4 years, now, have you not? Mr. WEST. Yes, sir. I would not want a man who is thinking about public housing and welfare housing, housing the poor people of the country, to be mixed up with private enterprise that must make a living from its own resources and its own operations. Mr. WHITTINGTON. I think that is a fair statement, but I think the chairman's question is fair, that regardless of what we think, if you have been actually under the Federal Housing Administration for 4 years, I think it is in order that you tell us what injustices have been done to your organization and wherein you have been in any way pre

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