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statement from Commissioner Raymond M. Foley, of the Federal Housing Administration, which deals with the insurance of privately financed housing, and from Commissioner Philip M. Klutznick, of the Federal Public Housing Authority, which deals with public housing. I want to express also my belief that any administrator of a national housing agency under Reorganization Plan No. 1 should regularize and continue to follow the practice in which I have been engaging, of frequent discussions of matters of general policy with the commissioners of constituent units under his general supervision. It is also my viewpoint that, in a long-range organization, the administrator of a national housing agency should deal with broad matters of reconciling policies and with certain common functions, leaving to the constituent units the regular operations of the affairs entrusted to them by statute.

I shall deeply appreciate it if you will bring these materials to the attention of the members of the committee and have them inserted in the record of your hearings. Needless to say, I shall be glad to furnish any additional information or to take any other steps that may help to clarify this whole situation. Sincerely yours,

WILSON W. WYATT, Administrator. (Enclosures.)

NATIONAL HOUSING AGENCY,
FEDERAL HOUSING AMINISTRATION,

Washington 25, D. C., June 13, 1946.
Hon. CARTER MANASCO,
Chairman, Committee on Expenditures in the Executive Departments,

House of Representatives, Washington, D. C. MY DEAR MR. MANASCO: The President's reorganization plan, setting up a permanent National Housing Agency, contemplates an organizational set-up, designed and motivated to carry out the intents and policy of the Congress with respect to activities of the Government, concerning housing. Its success in so doing will depend very largely upon the abilities of the persons selected to head, not only the over-all, but also the constituent agencies. Since these heads will all be selected by the President and be subject to the confirmation of the Senate, it follows that power to control rests in the Congress, not only in its legislative and appropriation powers, but also in the human side of the direction.

Testifying briefly on this subject, in re the Wagner-Ellender-Taft bill, I declared my belief that a coordinating agency for housing activities is not only désirable but necessary. From the viewpoint of a commissioner charged by law with responsibility for the insured mortgage systems of the National Housing Act, I pointed out certain administrative difficulties that might result from the type of agency therein proposed-and certain suggestions as to the manner of operations of an over-all agency that might be specifically covered in such legislation. In my opinion none of those suggestions are inconsistent with the President's reorganization plan, and the plan would, in no way, prevent functioning in such fashion as to incorporate them in practice, if found necessary. I believe the agency can and under the present administration would be so administered as to result in no destructive limitation or constriction of the operation of the Federal Housing Administration. Sincerely yours,

RAYMOND M. FOLEY, Commissioner.

STATEMENT OF PHILIP M. KLUTZNICK, COMMISSIONER, FEDERAL PUBLIC HOUSING

AUTHORITY, CONCERNING THE ESTABLISHMENT OF A NATIONAL HOUSING AGENCY UNDER THE PRESIDENT'S REORGANIZATION PLAN No. 1 OF 1946

The country is faced today with a grave housing emergency. Millions of our veterans have been demobilized and are seeking to start life anew, but they are finding it impossible to establish homes of their own. For many years before the war, there had been a steady increase in the number of the Nation's families, without a corresponding increase in the number of homes produced. As a result, there is a great housing shortage today, with millions of families living doubled up or under substandard housing conditions. Congested and depressed housing conditions are a rule in most localities. The alleviation of these conditions calls for a coherent national housing policy. It calls for the administration of such

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.

INTERRELATION OF GOVERNMENT AIDS

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.

UNITY OF EFFORT

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. 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.

CONCLUSION

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; therefore, 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.

House. OF REPRESENTATIVES, Washington, D. C., June 13, 1946. Hon. CARTER MANASCO, Chairman, Committee on Erpenditures in the Ea:ecutive Departments, House Office Building, Washington, D. C.

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 December 18, 1941, authorizing the President to “make such redistria 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.

INTERRELATION OF GOVERNMENT AIDS

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.

UNITY OF EFFORT

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. 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.

CONCLUSION

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; therefore, 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.

House OF REPRESENTATIVES, Washington, D. C., June 13, 1946. Hon. CARTER MANAsco, Chairman, Committee on Erpenditures in the Ea:ecutive Departments, House Office Building, Washington, D. C. 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 December 18, 1941, authorizing the President to “make such redistri

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