more than 1,500 chambers of commerce, 500 trade associations, and more than 700,000 underlying members on insurance problems from an objective point of view.

"The policies of the national chamber are established by referendum vote of organization members.

"I wish to bring to the committee's attention views respecting the inadvisability in Reorganization Plan No. 2 appearing in the President's message to the second session of Congress as printed in Document No. 595 and particularly section 3 which transfers the functions of the United States Employees' Compensation Commission to the Federal Security Agency to be performed in such manner and under such rules and regulations as the Federal Security Administrator shall prescribe.

Such

"On this point we wish to point out that we do not believe the transfer of this agency meets or has a bearing which would be of any benefit to either employees or employers. In fact, such a transfer might result in great confusion. a transfer would not come under point 1 of the President's letter re: To facilitate orderly transition from war to peace. The Employees' Compensation Commission is not a war emergency agency, although it performed outstanding service to the war effort. The duties of the Compensation Commission were worked out and tested for a period of more than 30 years prior to the termination of World War II and to make a change at this time would upset sound practices and tested work that has been very satisfactory.

"Nor would a transfer meet the President's point 2, "To reduce expenditures and promote economy.' Such a transfer would result in great expense not only by way of Government expenditures in promulgating new rules and procedures, but also in great expenses to insurance carriers and self insurers who would be affected by this proposed transfer. On point 3, 'To increase efficiency,' we feel that the immediate result would be a decrease in the efficiency since the Administration will be placed in totally inexperienced hands. We know of no lack of efficiency in the present Administration and can see no justification for assuming that even ultimately the Federal Security Agency could administer the law more efficiently.

"On point 4, "To group, coordinate, and consolidate agencies and functions according to a major purpose,' this change is ill advised. The Compensation Commission, as now constituted, corresponds to like agencies created under State law in the several States and to make such a change would break an established precedent.

"On point 5, "To reduce the number of agencies having similar functions,' we believe the administrative semijudicial functions of the Compensation Commission are entirely different and in no way similar to other agencies now under or proposed to be put under the Federal Security Agency.

"On point 6 we do not believe there is any overlapping or duplication of effort or if any does exist, it is not enough to warrant the great disadvantages and increased work on both the part of Government and business if the change is effected.

"We urge Reorganization Plan No. 2 be disapproved and further study be made by Congress."

Sincerely yours,

A. L. KIRKPATRICK, Manager.

STATEMENT OF H., R. NORTH UP, SECRETARY-MANAGER, NATIONAL RETAIL LUMBER DEALERS ASSOCIATION, BEFORE HOUSE COMMITTEE ON EXPENDITURES IN THE EXECUTIVE DEPARTMENTS ON REORGANIZATION PLAN No. 1, JUNE 6, 1946

My name is H. R. Northup, and I am secretary-manager of the National Retail Lumber Dealers Association with offices at 1713 Rhode Island Avenue NW. This association represents 23,000 retail lumber dealers located in practically every community in the United States. In normal times, our industry plans, builds, and finances more than 70 percent of the homes built in this country. At the outset, I would like to have it understood that this association has consistently backed every sound, constructive proposal which encourages individual home ownership. It is one of the original advocates of the establishment of the Federal Housing Administration. Any plan which will accomplish any one of the six purposes set forth in section 2 (a) of the Reorganization Act of 1945 also will have the unqualified endorsement of this association.

We have carefully studied Reorganization Plan No. 1 and the message of May 16, 1946, transmitting this plan to the Congress, and we fail to see how the establishment of a National Housing Agency on a permanent footing, with the Federal Public Housing Authority, the Federal Housing Administration, and the Federal Home Loan Bank Administration as constituent units, will effectuate efficiency, economy, or provide for the elimination of overlapping and duplicating functions of the Government.

Our industry opposes this reorganization plan not only because it establishes the National Housing Agency on a permanent basis, but also because it would give that agency control over the home-financing institutions of the Federal Government. The Federal Housing Administration and the Federal Home Loan Bank Administration are mortgage-financing institutions and properly would be a part of the Federal Loan Agency. This would restore these agencies to the status President Roosevelt placed them in under the Reorganization Act of 1939. The Federal Public Housing Authority should properly be under the jurisdiction of the Federal Works Agency.

As you know, President Roosevelt's Executive order which created the National Housing Agency as the coordinating agency over the Federal Housing Administration, the Federal Home Loan Bank Administration, and the Federal Public Housing Authority was explicitly a wartime measure and clearly provided for the restoration of these agencies to their prewar status after the termination of the war. We have never taken issue with President Roosevelt's handling of these agencies and we would like to see these agencies restored to the status intended by President Roosevelt when he created the National Housing Agency to serve the wartime emergency.

In the transmittal message accompanying Reorganization Plan No. 1, emphasis is placed on the veterans' housing program. It is hard to tell whether the author of this mesasge was confused or is attempting to confuse. The veterans' housing program is in no way affected by this proposed plan. The Administration has ample power under the First War Powers Act to maintain the present temporary National Housing Agency as a coordinating body. The Administration has ample authority under the Second War Powers Act and the veterans' emergency housing legislation to deal with the veterans' housing problem. Congress has at least 18 months to consider the advisability of creating such a permanent organization. Possibly some people question whether it is advisable to let Congress pass on this question but prefer to present the Congress with the fait accompli. Obviously, the veterans' housing program is a smoke screen and is another instance in which the symbol "GI" stands for "Ghost Issue." We strongly suspect that the advocates of this plan are fearful that Congress will not finally approve the Wagner-Ellender-Taft bill; otherwise, they would have left it to the proper determination of Congress.

Some advocates for a permanent National Housing Agency claim that through technical research the National Housing Agency will develop better and cheaper housing accommodations. Since its inception, it cannot point to one single technological development in the housing field. We have the best War and Navy Departments in the world, yet never have I heard those Departments claim that they were responsible for the development of the best fighting machinery the world has ever known, nor have I ever heard those Departments criticize industry for its lack of initiative. Yet strangely enough, the National Housing Agency would have one believe that the only solution to technological developments in the housing field is through the creation of a Federal bureau which will show industry how the job can be done.

We never stood in a better position to encourage individual home ownership. Restore the Federal Housing Administration and the Federal Home Loan Bank Administration to their relatively independent status, free the building industry from wartime restrictions so that we can rapidly get back on a competitive basis, and you may be assured that the American people will be provided with the very best housing at the lowest possible cost. Continue crippling restrictions and Federal interference in the housing field, and you may be assured that the solution to the housing problem will be seriously retarded. The best way is the way we have always done it-under our free, competitive system.