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(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 Āgency 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

agencies were consolidated with and made subordinate to a superagency of the sort contemplated in the reorganization plan.

There is grave danger that the sources of private credit would quickly dry up, once these Federal lending and insuring agencies were covered into a permanent agency committed to restrictive governmental control over private enterprise. There would be no assurance, and no expectation,

that the Government would continue to facilitate private building. The confidence so ably and successfully built up in government would be lost, and home building would suffer.

There is, and always will be, marked differences of opinion between the so-called private housers and public housers. Call this what you will, competition, rivalry, or sincere differences of opinions, it is a fact that it does exist. It is too much to expect of any one individual that he find the "happy balance” which should be the Nation's goal.

It is our belief that the credit functions of the Federal Government in the housing field should be coordinated, but not consolidated as would be the case under this reorganization plan. We recommend that these agencies be returned to their prewar status in the Federal Loan Agency to be coordinated with other Federal lending functions. To isolate the Federal Housing Agency and the Federal Home Loan Bank Board in a housing agency would bring grave risk of unbalancing the national credit structure.

All parties who discuss this housing question, including the most enthusiastic supporters of public housing, state that the housing problem of the Nation should first be answered to the extent that it can be answered by private enterprise. And then the government, whether Federal or local, should supply the void which private enterprise cannot fulfill. Again they all agree that the only way to determine the extent to which government should enter this field should be determined by accurate date and statistical studies.

By some I may be accused or classified as a strong private houser; however, I have always recognized that there is a field which private business possibly cannot fulfill for our underprivileged people.

It is my sincere belief, and I respectfully but strongly recommend to this committee and to the Congress, that when a permanent housing program is developed, it should be based on the following premises, given in the order of their importance. First, private enterprise should be encouraged and supported to help on the housing which it can create. Second, a source completely independent of the private housers and public housers should make statistical studies and analyses which would determine the extent to which private enterprise has met the housing problem or can be expected to meet the housing problem.

Then, based upon these disinterested studies, a division of government should be authorized to assist and activate a public housing program within the boundaries indicated by these disinterested analyses.

Studies of this housing question made by our association late in 1944 indicated that the most effective way to accomplish this end would be to have all agencies of government, having to do with home finance, gathered into one group; then that there be statistical work, analysis, and research in another entirely independent group; and finally that the public housing activities be grouped with other public activities, such as public works, public buildings, and public roads.

In summary, Mr. Chairman, we urge that the committee reject the dangerous and totally unnecessary proposal to establish a permanent national-housing agency which, far from encouraging and facilitating the construction of housing, would undermine the entire private-housing industry and prolong the housing emergency which we all are working to overcome.

The CHAIRMAN. The next witness will be Mr. Guy Hollyday, of the Mortgage Bankers Association of America. STATEMENT OF GUY T. O. HOLLYDAY, VICE PRESIDENT AND CHAIRMAN OF THE EXECUTIVE COMMITTEE, MORTGAGE BANKERS ASSOCIATION OF AMERICA The CHAIRMAN. You may proceed, Mr. Hollyday. Mr. HOLLYDAY. It is my desire to testify regarding Reorganization Plan No. 1.

My name is Guy T. O. Hollyday, and I live and have my offices in Baltimore, Md. I am president of the Title Guarantee & Trust Co., of that city. I appear as vice president and chairman of the executive committee of the Mortgage Bankers Association of America.

Our association was organized in 1914 and our membership consists of life insurance companies, commercial banks and trust companies, mutual-savings banks, mortgage companies, title companies, and mortgage-loan correspondents. It represents as nearly as we can determine something in excess of 70 percent of the available funds for mortgage lending in the United States, excluding investment funds of individuals. Our members are direct investors in city and farm loans and we come from every kind of city and State in the Union.

It is our membership, gentlemen, which composes a great portion of the market for veterans loans and other types of home loans. We deal daily with the Federal Housing Administration and we have a direct interest in proposals which will modify or rearrange our relationships with this agency.

I am, therefore, appearing today before your committee to discuss that part of the President's Reorganization Plan No. 1 which would make the National Housing Agency permanent and which would extend the jurisdiction of that Agency to control completely the policies and operations of the Federal Housing Administration, the Federal Home Loan Bank Board, and the Federal Public Housing Authority.

Before going into detail as to the merits of this portion of plan No. 1, I would like to emphasize, before this committee, that the Mortgage Bankers Association is affirmatively in favor of a thoroughgoing, practical reorganization of those agencies of the Federal Government which deal with financing or the extension of credit to private lending institutions.

I repeat, our association as we have stated before other congressional committees, is in favor of such a reorganization, and we have previously set forth some concrete suggestions as to the form which such a reorganization might take. Our association is not only willing but anxious to lay before any committee of Congress which wishes to hear it, our suggestions on this matter.

However, in our opinion that part of the President's Reorganization Plan No. 1 which is now before your committee for consideration,

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