Mr. WHITTINGTON. I think the idea is to cut out the funds to the National Housing whether this Administrator is called the National Housing or Farm Home Loan Housing or any other type of administrator. It is up to the Congress to cut that money off. If we don't continue to provide for public housing, there will be no public housing. Mr. WEST. The National Housing Administration says, according to the Atlanta newspapers, that they are going to inspect houses being built before and after construction so the people and veterans getting houses now would not be misled.

We have a city building inspector and a county building inspector. Mr. HOFFMAN. Do you mean private homes, if I am going to build a home they are going to inspect my plans as well as the plans of every house that is built?

Mr. WEST. They will inspect every one, that is right. They will inspect every one that is built right now. You cannot build a house now without a permit from the Federal Government anywhere. In order to get that permit they fix the price on it that it can either rent or sell for and you must offer it to a veteran 30 days after it is finished and they are going to inspect your plans before it starts and after it stops, notwithstanding the fact that every city has a building inspector.

Mr. HOFFMAN. Day before yesterday a man who has the money to build a home came to me with his plans and with his building material and he said, and his builder said, that he and his brother and his dad are going to do much of the work, that they can build that home for $6,200, but he cannot get a permit out of Detroit, Mich., because they say it will cost him more than $10,000. Now where, if any place, do you come into that picture?

Mr. WEST. Well, on the loan man's side, we are not much concerned with all that directly, it is almost like the Congress asking me the question somewhat like, Why don't you stop beating your wife?; but we are affected by every restriction as a loan man on homes that the Government puts on the construction of homes.

Mr. HOFFMAN. You do not come into this veteran's picture because he has the money.

Mr. WEST. That is right, sir. What is your question to me?

Mr. HOFFMAN. I thought maybe you knew something more about these loans than I do.

Mr. WEST. He has the price fixed. You cannot get a permit under PR 33, which requires an HH priority from the Civil Production Administration and the Civil Production Administration employs the Federal Housing Administration to service those priorities up to $10,000.

Mr. HOFFMAN. Do you mean a priority on material?

Mr. WEST. I am speaking about a priority to build a home. I am referring to the total cost of house and lot.

Mr. HOFFMAN. Well, he has the land and he has part of his material and he has his labor. The people tell him it is going to cost him $6,200, but the Federal office of Grand Rapids says he cannot have priority to get what additional material he needs, that would be in that $6,200, because in their opinion the home is going to cost him more than $10,000.

Mr. WEST. Well, in the case of oak flooring you cannot get it except on an HH priority. The total supply must go on HH priority.

Other terms are percentagewise which are changed from time to time by the Civil Production Administration. Your man is in a jam.

Mr. HOFFMAN. Well, if there is some Government agency that can call a block on his plans when he has the money, and knows where he can get the material, what is the use of the GI bill of rights? I must answer this fellow. That is what is the matter with me. He has a broken back, and he and his wife have been after me, and every time I go home they get after me and I am going home next week and I want your answer or somebody's answer.

I cannot duck it any longer.

Mr. WEST. The National Housing Agency, Mr. Congressman, has just invoked a plan in which they have said that in New Orleans a house of a certain size can only cost certain price, one in Atlanta can only cost a certain price, and one in Chicago can cost a certain price, and so forth. It is a very elaborate proposition. I should be glad to submit it to you.

Mr. HOFFMAN. I don't want anything submitted to me. I have too much trouble now.

Mr. RICH. Do you not understand that the bureaucrats nów tell you everything you can do, even to the extent of telling you whether or not you can have a loaf of bread? If you want a loaf of bread you must get permission from somebody.

Mr. HOFFMAN. How am I going to tell this fellow to get this permit to build this house?

Mr. WEST. This fellow is probably responding to information he has received similar to that which I give in my territory; I tell them to see their Congressman. You gentlemen passed the law.

That happens to be a right of a free citizen that you cannot avoid, sir, I am sorry.

Mr. Chairman, we still think that these agencies should go back under the Federal Loan Agency, because they have nothing to do with subsidized housing in this country, the housing of poor people, which I choose to call glorified poorhouses.

Mr. WHITTINGTON. You spoke also now about tribute to the Housing Administrator. During the past 4 years, what sort of revenues have been levied against your organization that were not levied for the propaganda or the support of the National Housing Administration when you were under the Federal Loan Agency?

Mr. WEST. It is a very definite sum, sir. I do not have it with me, but it is submitted to Congress in the regular report of the Federal Home Loan Bank Commissioner. I do not have it with me.

Mr. WHITTINGTON. Do you mean there has been levied during the last 4 years, against your organization a tribute fund for the propaganda of National Housing by the Administrator of that housing, or an equivalent fund that had never been levied against you when you were under the Federal Farm Loan Agency, is that correct? Mr. WEST. I was never under the Federal Farm Loan Agency. Mr. WHITTINGTON. The Federal Loan Agency.

Mr. WEST. The Federal Home Loan Bank System.

Mr. WHITTINGTON. Just a minute. Were you under the Federal Loan Agency before you were consolidated under the Executive order? Mr. WEST. That is right, a superagency.

Mr. WHITTINGTON. That is what I am asking you, please, sir.

Mr. WEST. The difference between what we paid the Federal Loan Agency-and we did not like that-and what we now pay the National Housing Agency, I do not happen to have, sir. I am sorry. Mr. WHITTINGTON. What generally did you pay the Federal Loan Agencies, what sort of fees for supervision did you pay them?

Mr. WEST. My institution is the Federal Savings and Loan Association in Atlanta, Ga., that owns stock in the Federal Home Loan Bank System and the Federal Home Loan Bank System in turn pays me a dividend on my stock. It is like the Atlanta Federal Reserve Bank pays a dividend to the National Bank of Atlanta that it owns. The Federal Home Loan Bank in Winston, one of the 12, is assessed, incidental to being under the National Housing Agency, it is an amount I could get for you, but I do not know what it is.

Mr. WHITTINGTON. I did not ask you that at all. I asked you about the tribute that has been paid for propaganda purposes.

Mr. WEST. The National Housing Agency has 90 men on their present pay roll.

Mr. WHITTINGTON. I asked you a simple question. It was not that. It was as to the amount that has been levied against your agency during the last 3 years for the maintenance of this top administration as compared with the amounts that had been levied by Federal Loan Agency when you were under their supervision, and you opposed being under that, in your statement. That is all I asked you, sir. Mr. WEST. I do not know what it is.

Mr. HOFFMAN. Do you think it is important? Perhaps he can find

out.

Mr. WEST. I can find out.

Mr. WHITTINGTON. I did not mention it, you see, he told me. It was a large amount and very expensive. I just thought we should have the facts.

Mr. RICH. He could probably check back on that.

Mr. WEST. It is available here somewhere, I imagine, around the table.

Mr. JUDD. Under 9070, the board of directors, the board of trustees and the Federal Savings and Loan Corporation-it not abolished, its functions were taken over by the Administrator of NHA.

Mr. WEST. I find the Member of Congress is no more confused than I am.

Mr. JUDD. I am speaking of the Federal Savings and Loan Cor poration.

Mr. WEST. There is no such thing. There is a Federal Savings and Loan Insurance Corporation, is that what you referred to.

Mr. JUDD. Did I not read insurance?

Mr. WEST. No, sir.

Mr. JUDD. I am sorry I left that out.

The Federal Savings and Loan Corporation, that insures the loan that you have in your company, does it not?

Mr. WEST. What is your question about that now?

Mr. JUDD. Were not the functions of its board of trustees taken over by the NHA under 9070?

Mr. WEST. The functions originally operated by a board of five men, the Federal Home Loan Bank Board, as trustees of that insurance corporation. That board was abolished. That was abolished

and turned over to Mr. Fahey, and that was put under the National Housing Agency.

Mr. JUDD. That is what I wanted to know. My point is, did you suffer under this new or different administration as compared to when you were under the five-man Board?

Mr. WEST. I think when you have a nonsympathetic department of Government dealing with you, you always suffer, sir.

Mr. JUDD. You prefer to be under the five-man Home Loan Bank Board?

Mr. WEST. As far as the Chamber of Commerce is concerned, we think it ought to be back to the Federal Loan Agency, because we think these three functions which I have described, apart from all the others, are functions that involve in one case, reserve credit and in the other case, the insurance of savings of the people, and in the other case, the insurance of mortgages.

Mr. JUDD. Nevertheless, you want to have all the private industry in one field and all that which is public, with public money in the other field?

Mr. WEST. That is right, sir.

Mr. RANDOLPH. Although saying you are a private credit agency, yet you have been helped with public funds, governmental funds, is that not correct?

Mr. WEST. Mr. Chairman, I dislike to try to find out even what the Congressman means, because I would like to answer you directly. When you say, "me" do you mean my institution or do you mean the Federal Home Loan Bank in Winston or the Board in Washington? Mr. RANDOLPH. I speak of the over-all private credit organizations. Mr. WEST. Now what was your question?

Mr. RANDOLPH. I say that although they are private, are they not governmental, have they not had the Federal funds, although you call them private?

Mr. WEST. The Federal Home Loan Bank System was originally chartered with Federal money, $134,000,000, and then our institutions bought into that stock. The Federal Savings and Loan Insurance Corporation was chartered with several million dollars of Government money and it is still Government money. We simply pay a certain amount for our deposits. It is an insurance corporation.

Mr. JUDD. You actually get no Federal money from this insurance corporation unless you go broke?

Mr. WEST. I would not get it because they would lock my door and throw me out.

Mr. JUDD. I mean your company and your business, your Federal savings and loan association business does not actually use Government money unless it gets into financial difficulties?

Mr. WEST. It has accumulated now some $65,000,000 worth of reserves. It is intended when we-and the law will explain I think, better than I am trying to tell-accumulate that $100,000,000, that reserve which has been paid in by us, plus its earnings on its investment in Government bonds, will replace the Government's credit entirely. It is similar to FDIC, and I am sure you know about that, where you chartered it with $300,000,000.

Mr. RANDOLPH. You are opposed to public credit functions, yet in the first instance there was public money involved, is that not true?

Mr. WEST. Yes; I think there is public money involved in every one of them.

Mr. WHITTINGTON. With regard to your Federal Savings and Loan Insurance Corporation, do you make loans on residences or other houses that are constructed?

Mr. WEST. We make them on residences; yes, sir.

Mr. WHITTINGTON. In 1936, 1931, and 1932, did these Government home owners' loan corporations take out from your institution many of your borrowers that were not able to pay their accounts, bail them out so to speak, so as to get rid of your undesirables?

Mr. WEST. At that time my institution was not chartered.

Mr. WHITTINGTON. I do not believe that is the question I asked. Mr. WEST. They took four out of mine; yes, sir.

Mr. WHITTINGTON. Now whether it be four, four hundred, or four thousand, with all deference, whenever you came to the Government to get Government help, whether it is you, I, or any other individual, we are going to pay the penalty.

Mr. WEST. I am not questioning that, I agree with you.

Mr. WHITTINGTON. It makes no difference whether you had four or four hundred, the Government is not going to let you, when you want to get out, step out and let the other fellows stay in.

Mr. WEST. From that particular, I can only answer for myself, and the Chamber of Commerce, we did not petition the Government to start the Home Owners' Loan Corporation. They not only did that, but they bailed out defaulted institutions, many of which were banks and insurance companies.

Mr. HENRY. Mr. West, if I understand you correctly, I think you were speaking of your own savings and loan institution in Atlanta, Ga., when there was some mention made of comparison of your profits during the last 3 or 4 years, as compared to the previous period. If I understood you correctly, I think you said one of the reasons for profits being maintained or increasing, was the fact you had an increase in the volume of savings.

Mr. WEST. That is right.

Mr. HENRY. Those savings were investable. Now is it not true that if you could be assured of that volume being maintained or increased, you would not be so worried about your profits?

Mr. WEST. We would not, sir, but we do not ever expect to loan money on a public housing project, because Congress does it themselves.

Mr. HENRY. I understand you make quite some volume of profits, do vou not, from sources other than loans on homes?

Mr. WEST. We do not do so, except on Government bonds. We cannot put our money in anything else.

Mr. HENRY. Supposing you did not have a single loan, they were all paid off, but your savings increased in such a volume that you could invest it all in United States Government bonds, you would still be making a profit, would you not?

Mr. WEST. Hardly sir, when we pay 2 percent and all of my competitors pay 3 and 311⁄2 for money.

Mr. HENRY. I know it is true because in the case of many banks, and I cannot see why it would not be true in a savings and loan institution.