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a policy in a connected fashion. The establishment of a single national housing agency is essential to achieve and maintain the high level of home-building activity that is required for at least the next decade in order to meet the housing needs of this country.


Government aids to housing, are interrelated. The extent or delimitation of mortgage insurance, the conditions which control or define the flow of Government secondary credit, and the amount of subsidized housing are forces which have their consequential effect in the communities of our Nation. In that framework you will find few informed persons who will not recognize that these are parts of a common pattern. When through one or the other of these recognized methods of Federal aid there is overstimulation or understimulation of the demand or supply of housing, it is acutely noticeable in the places where people live—in their home towns and cities and farms.

The housing inventory of the community is inseparable. Too much public housing adversely affects private capital; too little, affects the community's tax structure and well-being; too little middle-income housing forces people who can afford to pay their way either into inadequate shelter or else into excessive debt when they reach for a home above their means; too much higherincome housing may tend to upset the economic soundness of investments in residential mortgages.


We shall need unity of effort—a conviction that governments—local, States, and Federal—home builders, material suppliers, financing institutions, and others must work together. The Federal Government has the responsibility of showing the way; it has elected to provide specific aids to housing; it must by act and deed recognize the essential Oneness of its work in this field. If we are to look with any confidence to a full role for the home building industry during the next decade, the Federal Government will need to show qualities of real leadership. This can best be done if its own program is based on an amicable and complementary utilization of its own aids to the industry. This it must accomplish without usurping the role of the home building industry itself. By all this I merely mean that a permanent National Housing Agency will be sorely needed. I hope you will pardon one personal reference. I came to Washington in the latter days of 1941, as did many others who were anxious and eager to help the war effort. Housing was my avocation—not my profession. What I found as I started to work was disillusionment and disgust because of the conflicts and confusion that were our daily diet as we tried to provide the housing that was necessary to man our production lines. To some who today question the need for a united Federal Housing Agency, I utter a friendly reminder: Think back to the confused days of 1941 and the early months of 1942. t The National Housing Agency, created as it was by Executive order in February of 1942 under the War Powers, did not provide the perfect union. An Administrator, whose tenure at best extended only to 6 months after the end of the emergency, presiding over constituents with long-term statutory powers and with long-established relationships with special citizen and professional groups, was confronted with a situation calling for utmost tact and careful administration. His task was to speedily mobilize the construction industry, all our Government resources, our manpower, and our financial and material assets to relieve an extreme shortage of housing in areas where it was sorely needed to provide shelter for war workers, without whom our war production effort could not succeed. That job had been performed creditably and economically. Cooperation replaced bickering, and clear-cut over-all policy replaced catch-ascatch-can confusion. In many respects, the postwar assignment of our Federal housing machinery possesses many of the general characteristics of the war assignment. We need a speedy mobilization of the construction and housing industry to relieve tremendous housing shortages in scattered localities, the existence of which are being increasingly felt as veterans return and families reshuffle. Of course, the methods will be different. The role of the locality will assume greater significance. Yet, the role of the Federal Government will be of tremendous consequence. Its instrumentalities will need to be used in harmony

one with the other—to complement and supplement each other to even a greater degree than in the past. In such a situation, it occurs to me that we should go forward by perfecting our wartime arrangements, rather than backward to the chaos and conflict of 1941. Certainly, it must be said that those who would reconstruct the conditions of yesterday assume a burden of proof much greater than those who seek to advance and perfect what we have today.


The opponents of a unified housing agency frequently charge that the head of such an agency would favor public housing to the detriment of the private lending functions. It must be noted that the FPHA is merely one of three constituents. From the character of this argument, one would think that the policies of the National Housing Agency would be the responsibility of the Public Housing Commissioner. Such a position assumes that the Administrator of the National Housing Agency will be an unfair person conceived with achieving some reprehensible aim, rather than an upright person seeking to do an intelligent job of public administration. Such assumptions can carry one to very ridiculous ends. Why not assume that the FHA or FHLBA Commissioner will be against the operation that they administer? Or that the FPHA Commissioner will be opposed to public housing? It is obvious that such an argument runs not to the merit of the proposed reorganization as much as it does to a fear of people who may be appointed to perform the tasks involved. Certainly the President with the consent of the Senate can be relied upon to secure good people of honest purpose to assume these responsibilities.

Based upon my experience with housing, it is my firm conviction that the establishment of a single national housing agency under Reorganization Plan No. 1 of 1946 is good business and sound administration. It will better enable Congress to formulate a sound national policy and will better assure that policy's being administered effectively.

The housing problem is interrelated and calls for a unity of approach; there-' fore, it is essential that there be a unified agency which can measure up to its tremendous responsibilities of helping to achieve a high and sustained level of home building for at least the next decade.


Washington, D. C., June 13, 1946. Hon. CARTER MANASCO, Chairman, Committee on Expenditures in the Executive Departments,

House Office Building, Washington, D. O. DEAR MR. CHAIRMAN: May I submit the following observations for consideration in connection with hearings before the Committee on Expenditures in the Executive Departments on the proposed reorganization plans submitted by the President to the Congress as House Documents Nos. 594, 595, and 596.

Section 5 (a) of the Reorganization Act of 1945 provides in part as follows:

"No reorganization plan shall provide for, and no reorganization under this act shall have the effect of

“(1) Abolishing or transferring any executive department, or the functions thereof; or

“(2) Or of establishing any new executive department; or

"(3) Continuing any agency beyond the period authorized by law for its existence, or beyond the time when it would have terminated if the reorganization had not been made; or

“(4) Continuing any function beyond the period authorized by law for its exercise, or beyond the time when it would have terminated if the reorganization had not been made, or beyond the time when the agency in which it was vested before the reorganization would have terminated if the reorganization had not been made; or

“(5) Authorizing any agency to exercise any function which is not expressly authorized by law at the time the plan is transmitted to the Congress ; or

“(6) Increasing the term of any office beyond that provided by law for such office.”

Many of the agencies and functions dealt with and effected by the proposed plans owe their existence to Executive orders issued under the First War Powers Act approved Deceinber 18, 1941, authorizing the President to “make such redistri

bution of functions among executive agencies as he may deem necessary, including any functions, duties, and powers hitherto by law conferred upon any executive department, commission, bureau, agency, governmental corporation, office, or officer, in such manner as in his judgment shall seem best fitted to carry out the purposes of this title” (“to expedite the prosecution of the war effort") "Provided further, That the authority by this title granted shall be exercised only in matters relating to the conduct of the present war."

The latter act in section 5 of title 1 also provides that “Upon the termination of this title all executive or administrative agencies, governmental corporations, departments, commissions, bureaus, offices, or officers shall exercise the same functions, duties, and powers as heretofore or as hereafter by law may be provided, any authorization of the President under this title to the contrary notwithstanding."

It also provides in section 401 of title 4 that "Titles 1 and 2 of this act shall remain in force during the continuance of the present war and for 6 months after the termination of the war, or until such earlier time as the Congress by concurrent resolution or the President may designate."

It would appear that neither the First War Powers Act nor the Reorganization Act of 1945 permitted the creation of new agencies or any new executive department. It appears nevertheless that the proposed reorganization plans provide for both as well as for the making of many temporary agencies permanent and the continuation of functions contrary to the limitations contained in the Reorganization Act of 1945.

If this interpretation be correct, it would appear clear that enactment into law of the proposed reorganization plans by the failure of both Houses of Congress to express disapproval within the statutory period can have no legal effect in the matters referred to. In other words, results cannot be lawfully accomplished by the lack of disapproval by the Congress, which the Congress has itself declared can only be accomplished by its express approval. With kindest personal regards, believe me, Sincerely yours,




My name is Joseph Meyerhoff. I am a builder and have built homes in Baltimore, Md., for more than 25 years. I am president of the National Association of Home Builders, which is the trade organization of the home-building industry. Our membership totals nearly 10,000 and our members construct probably 80 percent of all the houses built in the United States. Our organization is composed of nearly 100 affiliated local home-building associations.

I appear before you in favor of the resolution, and ask that you vote to reject Reorganization Plan No. 1.

Naturally, as the people who build the Nation's homes, the home builders of the United States, are tremendously concerned with part V of plan No. 1. That section would establish, by Presidential decree, a permanent National Housing Agency. It would accomplish this by "consolidating" the Federal Housing Administration, the Home Loan Bank System, and the Federal Public Housing Authority. In so doing, it would place these formerly independent agencies under the direction and control of the National Housing Administrator, and would make permanent the present emergency NHA which itself was established by Executive order for the duration of the emergency to perform a war function of programing war housing.

The men whose business it is to construct houses, including the building of veterans' housing, feel that this plan is unsound and inadvisable. It is not an orderly grouping of the Government's housing functions; it does not promote their efficiency, nor does it enable reduction of the Government establishments concerned. Rather it seeks, in the name of efficiency and economy, to superimpose permanently on three existing agencies a top-heavy central office, vested with great power and exercising strong controls. It does not promote efficiency in any way; rather it hooks the controversial operation of public housing onto two successful private housing agencies and attempts in that way to popularize public housing. It fails to group all Government housing agencies together, since it neglects to include the Veterans’ Administration, which now is performing

a most important housing function through operation of the GI bill of rights housing program. We have previously registered our opposition to such a consolidation as proposed before the Subcommittee on Housing and Urban Redevelopment of the Senate Special Committee on Postwar and Economic Policy and Planning, and again before the Senate Banking and Currency Committee. The home builders have consistently opposed this theory of lumping public housing in which the FHA and the Home Loan Bank Administration, just as these two agencies themselves have opposed it. We do not feel such a consolidation is a carefully thought out operation to be undertaken in the name of efficiency; instead, it is a “shotgun wedding” of different types of Federal housing functions. We oppose this plan for the following reasons: 1. This plan is based on experimentation with the two basic home-financing aids provided to the American people by the Government. Home building in this country is financed mainly through lending institutions operating either through the FHA system of mortgage insurance or as members of the Home Loan Bank System. Impairment of either would immediately react adversely on home building. Both of these agencies have been outstandingly successful. Their records speak for themselves. Starting from scratch in the depths of the depression, they reinvigorated home financing to form a broad and solid base for the intense construction activity prior to and during the war. Their success stemmed largely from the fact that the basic acts under which they operated were wisely conceived by the Congress, but even more so from the sound businesslike quality of the administration which the two agencies enjoyed. Their policies were soundly based on actual experience in the field and on close and constant touch with the realistic problems of home building. I ask your committee to consider the splendid record of the FHA. Home construction is dependent upon home financing. The home-building industry, prior to 1934, never had an assured system of financing. Such a system was provided by the FHA. Not only did the FHA make it possible for American families to purchase their own homes, but it contributed enormously to improving the kind of houses we built. It raised our standards of construction; it made possible better housing, better development, better land planning. At the same time it did all this, it lowered the cost of buying a house by creating a liberal plan of financing, such as private enterprise never had before. We maintain, and we think it is abundantly clear, that the FHA and the Home Loan Bank System, both eminently satisfactory, going concerns, cannot preserve their identities or maintain their enviable records if merged into a permanent superagency and subordinated to a top level of authority exercised by an administrator—who by reason of many other activities will be subject to influences inimical to private home building and financing as we have known it. 2. If the private financing agencies are forced into the same administration with the public housing operation, the inevitable result will be the loss of their autonomous operations as worth-while and important aids to the home-building industry of this country. The plan provides bluntly and without reservation that the heads of the two agencies can only operate their constituent units subject to the authority of the National Housing Administrator. The plan specifically states that this Administrator shall have “general superintendence, direction, coordination, and control of the affairs of the National Housing Agency and its constituent units.” Further, the National Housing Administration is given power to carry on all research and statistical activities of the constituent units; has absolute discretion in reviewing the rules and regulations before issuance by the Commissioners, and unlimited power to reorganize and combine the functions of the constituent units as he sees fit. Under these provisions FHA would be powerless to collect its own data or make its own decision on such important matters as cost levels, interest rates, appraisal procedures and technique, and the volume and types of housing which it found economically sound to insure in any area or any time. Similarly, the Home Loan Bank system could be required by the Administrator to install appraisal systems and adopt methods of supervision of member institutions; the appointment of executive officers of regional home-loan banks would be subject to his approval, and he could fix discount rates and procedures at such levels within the existing acts as he saw fit. Thus, the independence of the two private agencies which has allowed them to operate with such success in the past would be destroyed, and with it the confidence of private industry with which they have worked so closely.

3. The home builders of the United States are under enormous pressure to get houses built to meet the current housing shortage. The proposed plan will not give them additional tools to do the job. It is, in fact, based on extending greater Governmental control over the industry. Home builders cannot be expected to increase production by having more controls imposed. Under increasing Government control you cannot expect maximum production, and this is imperative today if veterans and other families are to be housed. Actually, the Government is shifting from facilitating construction of housing through provision of Sound aids, to greater control of housing. This is an ominous development. It is carried a step further by the reorganization plan. 4. One of the reasons given for the reorganization plan is that it will advance efficiency. But it is obvious that there will be no reduction in operating expenses of any of the agencies involved. There will merely be placed over them a superagency duplicating in most instances the functions of the existing agencies and in many other instances duplicating the work now done by various other Government departments such as the Department of Commerce or the Civilian Production Administration. I wonder how many members of this committee have ever seen an organization chart of the NHA-the agency you are asked to make permanent. As an example, I would like to place in the record the NHA organization chart as of May 20, 1946. This illustrates plainly what I mean when I talk about superagency and duplication. I think you will be interested in it, and suggest that you look it over. Notice all the divisions, subdivisions, units, offices, branches, and subbranches. Many divisions, sections, and functions are certainly duplications of work being done by other agencies at the present time. This is the organization you are asked to perpetuate in the name of economy and efficiency. 5. During the war, NHA was set up as a temporary war agency to “program” war housing. It was its job to assist in the proper distribution of scarce building materials, and to see that war housing was assigned to the areas that needed it. That was its only function. Now that function has ceased, and with it, we believe the agency should cease. Instead, it is asking to have its life made secure and that it be allowed to assume new duties. The agency served a useful purpose in war; it has no place in peacetime. It is of interest to note that the building industry is virtually united against the proposal to make NHA permanent; only the Government people are for it. That is a point well worth some thought. 6. Although the plan is advanced as covering “the main activities of the Government relating to housing,” it falls very short of this stated goal. It still leaves out the Veterans' Administration, with its important GI program. It is estimated that from 3 to 5 million homes will be built in the next 10 years for the veterans of World War II. Veterans' houses may amount to as much as 30 to 50 percent of the whole market. Much of this housing will be financed under the GI bill of rights. But this tremendous part of the housing market is not to be touched by the reorganization plan. The plan, therefore, does not consolidate the housing activities of the Government for efficiency. It merely groups public housing with two of the well-established and popular private home-financing agencies, and will by so doing hamper and divert these agencies from doing the jobs they were set up to do for American families wishing to purchase a home. 7. Finally, we feel that this attempt to set up a far-reaching agency virtually snatches from the hands of the Congress the decision as to whether such a step should be taken. It does so with little or no opportunity for the Congress to study the intricate questions involved. The plan goes even beyond the proposal in the Wagner-Ellender-Taft housing bill, which is still before the House, and which we likewise Opposed. That measure embraces changes in the Government housing agencies, and is pending now before the House Banking and Currency Committee. Also pending before that committee is H. R. 6025, introduced by Congressman Wolcott, which would provide a different type of housing organization and also make certain changes in exisiting housing functions. Failure to disapprove the plan would have the effect of foreclosing the House from full consideration of these bills or any amendments or substitutes and would veto the action of the Senate on S. 1592. The reorganization plan substitutes a preemptory administrative decision in lieu of careful congressional consideration of a highly controversial question, and its approval could only have a tremendously detrimental effect on the home-building industry, and through it, on our entire economy.

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