rehabilitating houses taken in trade. The President's Advisory Committee has recommended that FHA encourage trade-ins still further.

All this, of course, will compete with new housing, just as some inexpensive method for making old cars new again would cut into the new-car market. If cities undertake rehabilitation programs, they will again compete with the suburbs. If the remodeling business gets going, the man with a house will yearn less for a brand-new one.

Yet there should be plenty of business for both remodelers and builders of new houses. As things now look, there will be over a million new starts in 1954. Emanuel M. Spiegel, president of the National Association of Home Builders, talks in terms of better housing for 2 million families a year: 250,000 trade-ins, 750,000 units rehabilitated in urban redevolpment programs, and a million new starts. Now Mr. Spiegel's predictions were made in a wave of enthusiasm following the completion of the report of the President's Committee, and even so he was careful to note that they would come true only if Congress enacted the committee's recommendations and if financing was made "available in adequate volume" by a Government-supervised mortgage facility.

Thus hedged, Mr. Spiegel's predictions may not be so extravagant as they sound. The building industry can and should aim not only to take care of the 800,000 or more new households that will be formed each year. It can and should aim to hasten the day when every American who works for a living can live in a house that is as much a credit to the productivity of America as the car he drives to work, or the office or factory where he earns his living.

The CHAIRMAN. If there are no other questions, we will recess until 10 o'clock tomorrow morning, in our regular committee hearing room, at which time our witnesses will be the National Association for the Advancement of Colored People, Mayor Russell G. Hileman, of Michigan City, Ind., the National Apartment Owners Association, the Architectural Forum, City of Philadelphia Housing Coordinator, and the United Community Defense Services. That is going to be a big hearing.

Does anyone else want to testify? Then we will recess until 10 o'clock tomorrow morning.

(Whereupon, at 3:10 p. m., the committee recessed, to reconvene at 10 a. m., Wednesday, March 24, 1954.)

HOUSING ACT OF 1954

WEDNESDAY, MARCH 24, 1954

UNITED STATES SENATE,

Committee on Banking and Currency,

Washington, D. C.

The committee met, pursuant to recess, at 10: 10 a. m., in room 301, Senate Office Building, Senator Homer E. Capehart, chairman, presiding.

Present: Senators Capehart, Bennett, and Frear.

Also present: Senator Burke.

The CHAIRMAN. The committee will please come to order.

Our first witness will be E. L. Bartlett, Delegate from Alaska. Mr. Bartlett, you may proceed.

STATEMENT OF E. L. BARTLETT, A DELEGATE IN CONGRESS FROM THE TERRITORY OF ALASKA

Mr. BARTLETT. Thank you, Mr. Chairman. My name is E. L. Bartlett, Delegate in Congress from the Territory of Alaska.

I requested this opportunity to appear before you so that I might voice my objection to the inclusion in the bill of section 305, which is to be found on page 70 of S. 2938.

The repeal would go to the Public Law 52 of the 81st Congress, known as the Alaska Housing Act.

I am not aware, Mr. Chairman, because the Housing and Home Finance Agency has not consulted with me at any time about this, why the repeal of subsection (b) of section 2 of the Alaska Housing Act is desired. However, I would like to urge the committee to consider this most carefully before adopting the proposed language. The Alaska Housing Act became law on April 23, 1919, after very extensive hearings before this very committee

The CHAIRMAN. Will you yield a moment? What did the House committee do with this section; do you know?

Mr. BARTLETT. No. I don't, and I was going to speak about that. The CHAIRMAN. They have closed their hearings.

Mr. BARTLETT. I did not appear before the House committee, because, to tell you the truth, I did not know this language was in the bill until yesterday morning. It is a long bill, and although I had known in a general way that the Housing and Home Finance Agency had taken a rather dim look at some of the provisions of the Alaska Housing Act, I did not know that they were suggesting an outright repeal of this very essential provision. So I am going to be required to resort to making my views known to the House committee by way of a letter, which makes me feel very badly. But I did not know it was in here.

The hearings before your committee legislatively, Mr. Chairman. back in 1949, ran more than 50 pages. This was very carefully considered. I want to say to you that the Alaska Housing Act has done the job in Alaska that you expected it to. It has been marvelously successful. Over 6,000 units have been built under it. My understanding is that by and large, as of the moment, most of the housing needs have been met. There are two situations where the secondary mortgage powers of the Alaska housing authority, as created by the Alaska Housing Act, subsection (b) of section 2 will probably be needed this year. But my point is this: That Alaska is in a fluid state. It is growing very rapidly, and the housing needs at Anchorage and Fairbanks, where they may have been met for the moment, we don't know what new community may spring up in Alaska the day after tomorrow.

The Defense Department may decide to make a whole new installation, which would necessitate a civilian community. I don't know why it wouldn't be well to leave the legislative authority existing, even if they didn't employ it for the time being. I simply ca it follow this sort of thing.

The CHAIRMAN. Well, we are looking up now the reason given ly Mr. Cole, the Administrator, for recommending it be repealed.

Mr. BARTLETT. While that is being done, Mr. Chairman, may I real just a couple of sentences from a letter sent to me by Mr. E. Gle Wilder, executive director of the Alaska Housing Authority, under date of March 19, 1954, about this very matter. Mr. Wilder appeared before the committee in consideration of the legislation originally. He wrote me, and I quote:

Unless there is some other device elsewhere, it would appear to me that a repea! of this section of the Alaska Housing Act would defeat one of the purposes of our whole program here; namely, to promote a self-sufficient private building industry in the Territory. If it tends to give the result of removing the potertial market of the Federal National Mortgage Association for mortgage loans, I would then say that section 305 would be very damaging to the Alaska housing program.

I don't have anything more to contribute to this, Mr. Chairman, but I hope that the committee will give very serious consideration to it.

The CHAIRMAN. We certainly will. We will give real serious consideration to it, and we will find out about it. There seems to be no direct testimony on it at all.

Mr. BARTLETT. There doesn't seem to be any harm done by leaving

this in law.

The CHAIRMAN. I will ask our chief clerk to ascertain immediately from Mr. Cole and the FHA people why they recommended it be repealed, so we can make it a part of the record. We will also give you the right to place anything in the record you might care to later.

Mr. BARTLETT. Thank you.

(The information referred to follows:)

MEMORANDUM FROM HOUSING AND HOME FINANCE AGENCY ON REPEAL OF SECTION 2 (B) OF THE ALASKA HOUSING ACT

(Public Law 52, 81st Cong., approved April 23, 1949, as amended)

The Alaska Housing Act (Public Law 52, 81st Cong.) was designed to promote the settlement and development of Alaska by facilitating the construction of necessary housing there. Section 305 (p. 70) of S. 2938, the proposed Housing Act of 1954, would repeal the provisions of subsection (b) of section 2 of the Alaska Housing Act, as amended, thereby terminating the existing special FNMA authority to grant preferences with respect to FHA-insured mortgages covering property located in Alaska, Guam, or Hawaii, and to make direct FHAinsured loans secured by property located in Alaska.

The proposed repeal of section 2 (b) of the Alaska Housing Act will not operate to deprive Alaska of the privilege of receiving special FNMA financial assistance since provision is made in S. 2938 for the inauguration of special assistance programs that could include programs having as their purpose the promotion of housing in the Territory of Alaska. For the reason that all of the authority for, and the limitations of, FNMA's operations have been included within the terms and provisions of S. 2938, it appeared to be desirable to repeal other acts or parts of acts which otherwise would be redundant, confusing, or inconsistent.

Attention is invited to section 301 (b) (p. 55 of S. 2938) of the National Housing Act, as it would be amended by the proposed Housing Act of 1954. That subsection states that one of the purposes of the proposed legislation is to authorize FNMA to

"provide special assistance (when, and to the extent that, the President has determined that it is in the public interest) for the financing of (1) selected types of home mortgages (pending the establishment of their marketability) originated under special housing programs designed to provide housing of acceptable standards at full economic costs for segments of the national population which are unable to obtain adequate housing under established home financing programs, and (2) home mortgages generally as a means of retarding or stopping a decline in mortgage lending and home building activities which threatens materially the stability of a high-level national economy."

Section 305 (p. 56) of the proposed new title III provides that the President, after taking factors described in the foregoing quoted language into consideramay authorize the association, for such period of time and to such extent as he shall prescribe, to exercise its powers to make commitments to purchase and to purchase such types, classes, or categories of home mortgages (including participations therein) as he shall determine. FNMA could of course, under these special assistance provisions, continue to assist in the development of Alaska housing (subject to Presidential discretion) by the issuance of advance commitments to purchase mortgages and by purchasing mortgages on an over-the-counter basis.

While section 305 contains no provisions which would permit FNMA to make direct FHA-insured loans to be secured by property located in Alaska, this omission is considered by FNMA to be of no material consequence since it is believed that the issuance of advance commitments will operate to make direct Government-insured loans largely unnecessary.

Section 302 (b) (p. 46 of S. 2938) of the proposed new title III imposes a $12,500 mortgage ceiling per living unit. The companion bill (H. R. 7839), as reported to the House of Representatives, contains the figure $15,000. On the basis of the Association's experience during the last 14 months a limitation of $15,000 would have no adverse effect on Alaska mortgage offerings. In that period, mortgages covering 1- to 4-family dwellings purchased pursuant to commitment contracts averaged $14,450 per family residence or dwelling unit; the average for each family residence or dwelling unit with respect to commitment purchases of multiunit housing mortgages was $12,465, and $14,210 with respect to 1- to 4-family dwelling mortgages purchased on an over-the-counter basis. FNMA's undisbursed commitments at December 31, 1953, for the purchase of Alaska FHA-insured section 207 multiunit rental housing mortgages show that such mortgages will average approximately $12,275 for each family residence or dwelling unit covered thereby.

The CHAIRMAN. Our next witness will be Mr. Arthur Sworn Goldman, who is a construction economist.