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

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 One you are dealing with one and the same kind of institution.” 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 effected, 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

vented from carrying out the objects for which you were established; one, two, three. Now, what has been done?

Mr. WEST. I would say that if you would take a private enterprise organization like the Federal Home Loan Bank System, and Ì am sure the Congressman meant not the FHA we were under.

Mr. WHITTINGTON. The organizations that you represented, those that you have been under, the Housing Administrator for the last 4 years, now where and to what extent have you been damaged in carrying on your legitimate functions, or that you have been hindered or delayed in any way?

Mr. WEST. The Federal Home Loan Bank System, Congressman, must have had a good reason for naming a five-man board to operate that system at one time. The board was abolished.

Mr. WHITTINGTON. I do not believe I would ask a question that I do not intend to receive an answer to. I did not ask you what Congress had done. The chairman has asked you the question, my colleague from West Virginia has asked you the question. I will repeat my question: I understand, for the sake of argument, that the Board had been abolished and I understand that it has been under National Housing, but what we want to do is get to what we think is an important matter: Wherein under this National Housing Administrator has your organization in any way been impeded in the discharge of your functions, regardless of your fears about what is going to happen in the future, and wherein has money been extracted from your treasury and used by the Federal Housing Administrator?

Mr. WEST. I think I can answer your question, sir. In my town, I am dependent on making loans on homes. I think when housing facilities have been afforded to people on a subsidy basis, in my competitive market, with me, to the extent of seven or eight thousand families through the National Housing Agency's activity, that I am vitally affected, because they took that many people out of circulation. Number two, under the program of seeking additional housing in war, the Home Owners' Loan Corporation, operating for the National Housing Agency, went to your town and mine and carried on a leasing facility with old homes that they could cut up into five or six apartments, and they did that work and performed that service for the National Housing Agency through contracts with the owners on a seven-year basis to rent these properties, giving them up sooner if they so desired, with the money that the Government spent to make that improvement, so-called, going to the owners. All of that was not only in competition with my business, but when they took a 10room house and a nice old piece of property on the street and cut it up into five apartments, some of which put the bathroom on the front porch, which you would not approve of, and next door I have a loan on a man's home, or hope to have, I think they affected my business. In the name of war, I could not be much of a complainant.

Mr. WHITTINGTON. Your complaint is that the Congress of the United States provided funds for that organization to do that work. Now has that work been done worse by your being under the agency than it would have done if that agency had been independent and done exactly what you complained of and what the members of Congress do not believe in? That is my question.

Mr. WEST. Mr. Congressman, I think it is a basic fact that fowl do not run with fish, just basically.

I do not agree with Public Housing. I do not agree to any extent with Public Housing. Poor people do not live in public housing projects.

Mr. WHITTINGTON. Congress has provided for it and if we make a mistake I think Congress is going to do what they have already done. They have quit the appropriations in peacetime for Public Housing. They have confined it to this war housing that you complain of.

Mr. WEST. There were, of course, other types of that housing. In other words, every public-housing project now in the country has been solicited by the National Housing Agency through their FPHA in the last year with a set of forms about 4 inches thick, to ask them how much additional public housing that town needed, of what kind, an l how

soon.

Mr. WHITTINGTON. Yes, sir; I agree with you that sort of thing should not be permitted, whether that organization is over you or whether that organization is aside in another organization.

Mr. WEST. Then I do not want to run with it.

Mr. WHITTINGTON. Wait a minute. Then that is not confin d to the National Housing I opposed.

Now back to the question: How is the income of your organiz tion down there in the last 3 years, as compared with its income in the prior prewar years?

Mr. WEST. The interest rate that we charge people has declined for the last 4 years, and according to our last audit, our last interest rate is 4.9, and we started off 4 years ago, we were paying a 4 percent dividend to people for that money. The difference has been wrung out of the savers of this country who generally are regarded as poor people too.

Mr. WHITTINGTON. I think you are making a fair answer now. How does your income on the average for the last 3 years, what item for your organization only, came within your income from 1933 to 1936?

Mr. WEST. Our income has materially increased because our savings have materially increased, incidental to the money people have in their pockets to jingle, as you well know.

Mr. WHITTINGTON. Well, if your income is increased even under this set-up that you oppose, you suffered no financial injury, did you?

Mr. WEST. When my mayor went to Miami and made a speech about public housing and came back and found the Public Housing people in my town meeting in the community centers which they had built for that purpose, to tell them to vote against him because he was going to raise their rent, and when man and wife in my town vote, it is half the votes, because in the normal election they live in public housing. There are 33,000 families living in Cincinnati that you helped pay the rent for today.

Mr. WHITTINGTON. Don't look at me, I am opposed to it, and I think Congress should quit appropriating for it.

Mr. WEST. I do not want to ride with them in the same coach. Mr. RICH. Mr. Chairman, while you are discussing these questionss of how much it is affecting this gentleman's business, just remember they are all going in debt and the Federal Government is getting in debt so bad that eventually you are all going to be wrecked because you are not going to be able to take care of the enormous expense you are laying on the Federal Government to do these things. There will come a time eventually when you are going to get over the bridge.