gence I am presenting to you again my original statement, with the following pointed and pertinent comments. They support immediate attention to the importance of getting something done about the matter of confusion, discomfiture and inconvenience which has confronted the homeowners, contractors, distributors, and lending agencies on each of the 13 occasions since 1934 when the Congress granted, through renewal or extension, the power of FHA to insure modernization and repair loans; and not taking into consideration the disruption in the operating procedure of FHA Title I Division of the Federal Housing Administration.

My remarks last July ended on the statement, "Why fiddle while Rome burns?"

On this appearance I can think of no better expression of my feelings as to what has happened to the FHA title I program than, "Why fiddle while Rome burns?"

What has happened since June 30, 1949, when title I was to have expired?

Let's review:

Senate Joint Resolution 109 extending FHA title I to August 31, 1949, was not concurred in by the House of Representatives, but rather presented as an amendment to the public housing bill-of all places-and finally, after approval by the Congress, had to await an appropriate date for public signing of the housing bill by the President. This resulted in a period when the public was without FHA facilities.

Came Septemebr 1, 1949, and again the home owner did not know until the very last minute whether needed repairs could be made; lending agencies were again frantically calling FHA Title I Division to learn what to do with late requests for insurance-then another 60-day extension hurriedly arranged as the House Members prepared to "go home" for a while.

The House of Representatives in regular session again, Congress suddenly in October 1949 once more temporarily extended FHA title I to March 1, 1950. My thanks to them, inasmuch as this is the longest period of peace and tranquillity our home improvement business has had since the early days of 1949.

Now March 1, 1950, approaches and we find the same confused and muddled situation as has confronted us on three previous occasions in the past 8 months—another expiration of FHA title I, or at most the possibility of further temporary extension.

I can't find many people up on Capitol Hill who believe the problem of what to do for the medium-income housing needs as proposed in H. R. 6618 and H. R. 6742 can possibly be settled by March 1, 1950, so I feel I am correct in the previous remark.

Maintaining the power of a home owner to secure insured loans on home modernization and repairs in the same legislation as that which covers new construction just doesn't make sense to me. It never has, as I have personally told so many of the members of this committee in the past, and it never will. What relation can there possibly be between providing new homes and in keeping old homes in livable condition? Everyone realizes the popularity and general use of FHA title I makes it an attractive inclusion in any controversial housing legis

lation, but, by doing so for the past 8 months 50,000 truly small-business men, doing from $25,000 to $100,000 annually, squirm and fret and worry about their business future, wondering "can I or will I" have the services of FHA title I.

If you depended on insured loans as these small-business men do, you would realize what that means to their future livelihood and peace of mind.

A member of this committee in questioning me last July criticized its actions in delaying the use of this FHA title legislation as a cat's-paw for promotion of other legislation.

Chairman Spence in an exchange of questions and answers with me last July, ended up by stating:

It seems to me that you ought to address your remarks to the objectives you desire to obtain rather than criticize the committee for what it has done in the past.

My reply to Mr. Spence was:

I have not meant to criticize, Mr. Chairman.

At that time I was not critical of the committee, because there was only one disheartening experience of continuation and expiration behind us. Since then, two more periods of uncertainty have been forced upon us and we face another dead line-March 1.

So now, in behalf of the 50,000 small-business men who have been hurt three times in the past year by the lack of attention to their appeals, I do want to be critical of someone, whoever it may be, who is responsible for not relieving us of the uncertainty and dread of constant expirations and temporary renewals. I sincerely believe this great industry of small-business men who daily are doing their part to keep the old homes of America in livable condition, deserve better consideration.

Our claim that FHA title I be set up as a permanent department of the Government has been approved by the administration through H. R. 6742. The only thing they "forgot to remember" is that new housing and home improvements are as different as day and night and should not be discussed or included in the same legislation. Everything about the operation of title I secured loans is different, including the type and kind of lending agencies who make the loans.

The Northeastern Roofing, Siding, and Insulating Contractors Association, Inc., is holding its annual convention in Atlantic City, February 13, 14, and 15, 1950. In conjunction with the meetings a display of materials used by home modernizing contractors will be shown in 80 exhibits. Every one of the 1,500 or more contractors who view these materials will have in the back of his mind, "Will I be able to sell them if I do place an order?"

I plead with you gentlemen that you not only do not let FHA title I expire March 1, but that you will before that time make a decision to establish the permanency of title I in separate legislation, thus ending for once and all any doubt about the continuity of insured loans for home improvements.

Please let me take to our convention a feeling that this committee will act in the interest of the billions of home owners using FHA title I and of the contractors who daily serve them.

(The statement referred to herein is as follows:)

STATEMENT BY C. N. NICHOLS, MANAGING DIRECTOR, NORTHEASTERN ROOFING, SIDING AND INSULATING CONTRACTORS ASSOCIATION, INJ., FOR A PERMANENT FHA TITLE I OF THE NATIONAL HOUSING ACT

Mr. Chairman, I am managing director of the Northeastern Roofing, Siding and Insulating Contractors Association, with headquarters in New York City. I speak to you in behalf of a $2,000,000,000 national business carried on principally by contractors doing 50 or 60 thousand dollars of business annually, with a very large number no more than 25 thousand dollars annually.

House Resolution 5631 is an omnibus bill, one in which a great many different plans are lumped together in order to take care of new homes for moderateincome families. All but one section of H. R. 5631 has to do with new construction.

The association I represent through its membership is not directly and specifically interested in new construction work; so therefore I would like to talk to you on just one section of H. R. 5631, the amendments to title I of the National Housing Act. We have no quarrel with other sections of the proposed legislation because we know very little about them, but the industry I represent does know considerable about the maintenance and repair of the millions of old homes and buildings, a great majority of which are now more than 20 years old.

According to FHA statistics, roofing, siding, insulating, and combination storm-window contractors represent almost three-quarters of a billion dollars in the $2,000,000,000 home improvement field. FHA records show that 587,000insured loans to this type of contractors were made through that Agency last year. These loans accounted for 43 percent of the total number of its loans and 35 percent of the more than $600,000,000 value of all loans insured by FHA under title I.

The figures are proof that the ability to initiate home improvements by the 50,000 active contractors I speak for as a necessary, substantial, and permanent addition to the home owner's investment in his home can only be possible by the continuance of title I of the National Housing Act as a permanent Government activity.

Roofing, siding, insulation, and combination storm windows are a lifetime investment. A large majority of the home owners who buy them are in the low-income brackets. These people are the most responsible group in America— those who have invested in a home which they possess in their own name and are trying to keep in a livable condition. Well-kept homes are an essential national asset.

Well over 50 percent of home improvement and preservation work is financed with instalment credit, and the great bulk of this financing is through FHA under title I. As stated before, the average user of FHA is in the low-income bracket, since a person of greater means in the higher-income brackets can and will usually pay cash. Lack of a permanent vehicle to promptly secure loans for home improvements will take away the opportunity for modernization of old homes, to make possible the standard of living to which we are striving to attain for every person in the United States.

Likewise, lack of this avenue can also affect the unemployment problem which threatens now to become a serious drain on our economy.

Mr. Chairman, I have given you this brief background of our business in order to more forcibly bring out a point which is most important to our great $2,000,000,000 home-improvement industry; I have desired to refresh your memory.

The 1949 home-modernization contractor has become a recognized businessman in his community. He has attained this goal because of good, responsible selling and his capacity to offer the low-income home owner a chance to have a modern home with all its benefits while, during an extended period, paying for the improvements through the use of FHA title I.

As originally indicated to you, H. R. 5631 is an omnibus piece of legislation dealing with controversial subjects. It has included in it, many ideas of different Members of Congress from both parties. In the due course of acting. effectively and intelligently on these controversial subjects, a section of the National Housing Act, title I, which is not controversial, must suffer the possible fate of all or any of these other disputed subjects. I have yet to find, although

there may be some, a Senator or Representative who does not indicate his complete approvel of titles I, II, and VI of the National Housing Act. As I have pointed out before in regard to the many other sections of H, R. 5631, I am not as completely conversant with titles II and VI as with title I, but our association can endorse all three.

Title I of the National Housing Act stands out and away from all other provisions' of H. R. 5631. It has no business, in my opinion, being included in any legislation which has to do only with new construction. It covers nothing but housing renovation and modernization, in itself a big business and an operation large enough for a Government agency to handle on a permanent basis.

If title I under H. R. 5631 is approved by this committee and passed by the Congress, a definite termination date as of July 1, 1952, is included for the title I program. There is no good reason for our Congress to place an expiration date on legislation which is the backbone of such an important business as home improvement. We are going to be faced with a continual improvement of older homes and buildings in 1952 and many years thereafter.

It was all right to have an expiration date on title I when it was an experiment-back in the days when the idea was new, unproven, and there was considerable question as to whether it was good or bad legislation. Surely, gentlemen, after 15 years of operation, all doubt as to the value of title I or a Government agency has been eliminated. The plan has proved good for all segments of the public, particularly the home owner in the low-income brackets. It has proved its value to lending institutions as well as suppliers of building materials used in the renovation and modernization of old homes. The program has been selfsupporting and without cost to the taxpayers.

Now that the title I plan has proven itself, nothing is gained by inserting an expiration date. True, we feel keenly that we want our Congress to review all governmental agencies from time to time and consider their operations in the light of current developments. The Commissioner of FHA must make an annual report to Congress; also annually he must appear before a committee of Congress to obtain an appropriation for the current year's operation. This periodic scrutiny, plus a ceiling on the amount of loans that may be outstanding at any one time, are, in my opinion, necessary safeguards to assure proper administration of title I on a permanent basis.

We object to this proven profitable plan under title I being made a means for possible enactment of legislation which may have all the merit possible but, at the same time, is highly controversial, much of which will be debated in this committee before your report to the House of Representatives and debated and debated again by its Members on the floor. We do not think it fair to the millions of low-income home owners nor to the 50,000 active contractors serving them for Congress to again make title I legislation a pawn to the interests of those supporting the many and divers housing bills passed or now under consideration in Congress, including H. R. 5631—all having to do with the building of new homes and none with housing renovation and modernization as proposed by title I in the National Housing Act.

We have only too recently gone through a period of confusion, waste, and unnecessary expenditures by contractors and lending agencies before and after when the Senate, through Senate Joint Resolution 109, took from Senate bill 712 sections of that legislation having to do with titles I, II, and VI. This joint resolution was presented and passed by the Senate at an early enough date to have prevented the seriousness of the facts stated above.

The House did not concur in the Senate Joint Resolution 109, rather preferring to make it an amendment to the public-housing legislation which was under consideration at that time.

Day after day passed with continuous debate on public-housing legislation which had nothing to do with this simple little amendment included in a great and controversial piece of housing legislation.

Then when the public-housing bill was passed by Congress, notwithstanding the fact that a further amendment was inserted making FHA insured lending power retroactive to June 30, 1949, the original expiration date, a period of about 15 days elapsed before the President of the United States signed the publichousing bill and officially placed FHA title I in operation again.

All this time the contractor could not guarantee the home owner a price and terms under which the necessary home improvements could be effected. Contracting for a home improvement is not just a matter of a salesman calling on a home owner, getting a signature to a contract, mechanics following him and doing the work quickly. It is rather a process where first the home owner must

decide whether he needs the improvement, then, more important, know definitely whether there is a way he can pay for it. He must call in those (contractors) who can give him an estimate and then ascertain the best price, and finally determine the responsibility of the contractor. This all takes time. How can the home owner or contractor know whether either can complete this contract unless each knows the terms and conditions under which it can be consummated?

Gentlemen, if you could have been in my position and listened to the hundreds of anguished pleas for help by contractors in an effort to know what to expect and how they might weather the storm caused by the long delay, you would feel as keenly about this as I do.

Businesses failed, employees were out of work, roofs leaked, furniture was damaged, people were inconvenienced—all for what? Because Congress failed to prevent a fine, worth-while service to the low-income home owner which was generally approved by its own Members from becoming a part of legislation in which it had no place, thus causing title I to lapse on June 30, 1949. But worse, to permit the uncertainty and direction of business transactions for 60 days: before that date.

The procedure of periodic FHA renewals is costly to those who for the past 15 years have continuously used the facilities offered by title I of the National Housing Act. It is costly to FHA in planning their work and certainly takes from this Government agency most of its efficiency and effectiveness during the period of transition between the then present and prospective expiration dates: of legislation affecting the agency.

As a closing sentiment for this appeal in support of a permanent title I of the National Housing Act as amended in H. R. 5631, I desire on behalf of our industry to pay tribute to a great Government department and to say that our association of contractors who participate so largely in its benefits pay respect to its purpose, its administration, and its personnel.

The Northeastern Roofing, Siding, and Insulating Contractors' Association, Inc., in convention assembled, has gone on record as favoring a permanent title I departmet of FHA rather than any temporary set-up as proposed in H. R. 5631. Title I has established itself as worthy of legislation placing it on a permanent basis.

Finally, I plead with all sincerity in behalf of those who have been confronted for almost 3 months with confusion, insecurity, and financial losses. They have just been drifting and now are confronted with another period of the same.

There is slightly more than a month to September 1, 1949, when the temporary grace period for title I expires. Each day brings more chaos to the homeimprovement field. Contractors can't sell, home owners can't improve.

Our request for immediate help involves no grave national or international situation with consequent study and serious decision, nor does title I require a study of any new legislation, as do the other sections of H. R. 5631. A plain, simple, little action on the part of this committee-lifting of sections from H. R. 5631 having to do with title I, then reporting them favorably to the House for passage, will do the trick.

Surely, as evidenced by Senate Joint Resolution 109 action previously, no opposition will appear in the Senate.

Why fiddle while Rome burns?

Mr. BUCHANAN. Thank you, Mr. Nichols.

Are there any questions?

If not, you may be excused.

Mr. NICHOLS. Thank you.

Mr. BUCHANAN. The committee will stand adjourned until 10 o'clock tomorrow morning.

(Whereupon, at 12 o'clock noon, the committee adjourned until 10 a. m. Tuesday, February 7, 1950.)