So those two pieces of legislation together would wrap up generally the entire recommendations of this special committee, with the exception of some tax revision proposals. I have been chairman of many committees in Congress, but I never have seen a more diligent, intelligent, and hard-working committee than these distinguished gentlemen that I had the honor to serve with on that special committee. Senator PROXMIRE. It is certainly an impressive group.

Senator MUSKIE. May I comment on your question, Mr. Chairman, on Senator Kennedy's bill?

I think the committee as a whole recognizes that its program and recommendations are modest in terms of what is being done in European countries. But we recognize that the initial efforts at least must be within the framework of institutions and policies and programs that are already established if we hope to get acceptance and a start.

And I am sure that if we were allowed to, there would be no political limitations on our imaginations and ingenuity, and we could have developed much more extensive and justifiable programs than we did. Insofar as Senator Kennedy's suggestion is concerned, it is worth much more consideration than we have been able to give it in the few minutes since he presented it.

It strikes me, however, this may go beyond what is politically realistic at this point. And it may be an idea that the National Advisory Committee could consider and digest and present subsequently. I am saying this without passing final judgment on it, as an amendment to the present legislation. But what we have tried to do here with this urban renewal approach is to bring this program within the limits and in the context of a current program.

I think I ought to refer to section 107 of the bill, which reads as follows: "To assist in the preservation of historic structures, both within and outside of urban renewal areas, the Secretary is authorized to make loans."

So the program does make a beginning, a modest one. The committee would be the first to admit it is modest, outside of the urban renewal program. But we are trying to get acceptance. This is a new field, in a year when it is difficult to get new programs accepted. We are trying to make this modest beginning in the hope that a few steps, or even one step forward now would be something more than we have taken up to this point.

Senator PROXMIRE. In view of that statement, I hesitate to ask my last question, but I think I have to do it, because you gentlemen, including Senator Muskie, are the experts here.

Can you give us any advice on whether or not there should be a dollar limitation here and what kind of dollar limitation would be realistic and sensible.

Mr. RAINS. Of course it is obvious that we can't set out a dollar limitation. I certainly go along exactly with what Senator Muskie said, because the committee realized that we can't do what England is now doing, and we can't do what other countries are now doing as the first step.

So I emphasize the fact that I think it should not be too expensive a program to begin with, and I am unable to say exactly what it should be. I really don't think you should set a specific figure on it.

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I think that would have to be a matter that would be determined in the course of a little more study before maybe the Appropriations Committee and so forth.

Senator MUSKIE. It was very difficult to try to develop a dollar limit for the authorization bill. Justification, as the Senator knows, would have to be made before the Appropriations Committees. We hope by that time we may be able to develop some figure.

Mr. RAINS. Also you will consider this question again as you start authorizing, if and when you do, urban renewal money and things of that type. Because it becomes a facet of existing programs.

Senator PROXMIRE. Thank you very much, gentlemen. It was most helpful and enlightening.

We have a statement from Congressman Widnall who was unable to be present. Without objection, we will include it in the record at this point:

STATEMENT OF WILLIAM B. WIDNALL, U.S. CONGRESSMAN FROM THE STATE OF NEW JERSEY

To add many words to those of Congressman Rains, Governor Hoff, and Mr. Gray in behalf of historic preservation would seem to me to be mostly superfluous. They have well stated the situation as it exists. Their recommendations of Senator Muskie's bill, S. 3097, which is identical to H.R. 13790 which I introduced simultaneously into the House of Representatives, are as welcome to me as I am sure they are to Senator Muskie.

I would like to take this opportunity to express my appreciation for the cooperation Senator Muskie has extended to me and to my staff in the preparation of these bills. This has been truly a bipartisan effort and the Senator has made it so in the best interests of the Nation.

In addition, I would like to stress to the committee, its chairman and its members, that in S. 3098 you have before you a well-considered measure. Some of the best minds at work in the field of historic preservation contributed to the findings and recommendations which Senator Muskie and many of his colleagues have placed before you and propose to translate into laws. What you have is not perfection. I am sure that Senator Muskie would welcome amendments to that end, if the amendments also retain the goals sought.

In any event, you do have, let me emphasize, a proposal in which time was long ago of the essence. As a nation, we have unfortunately, not done all we could to preserve our historic heritage. We have left it to individuals, to private bodies, and on the face of it this is a very public matter; and, an urgent one. Senator Muskie and those that have joined with him deserve great credit for bringing the subject to your attention.

If I have any message to leave with you, it is this one of urgency. The Rains' committee's report, "With Heritage So Rich," tells rather poignantly, in pictures as well as words, what we have already lost, what we are losing, and what we may lose. We need a governmental body of high standing to hold that loss to a minimum, to reduce it if possible, and to provide through constant and unending effort the capacity to retain for our generations yet to come a living record of what we have created.

There are those who believe, and I am sure honestly, that we have the organizations-both public and private-to do this now. If so and I cannot pay too much tribute to the work of a man of the caliber of Gordon Gray and the National Trust for Historic Preservation-these organizations and their members do not have the powers, the resources, and the legal authorities, to do the job they would like to do. That is why Mr. Gray appeared before you today. That is why Mr. Rains is here, and why Governor Hoff appeared before you. The legislation that is before you is a much-needed start toward the preservation of our historic and cultural heritage. Any delay in its implementation is the Nation's loss; any impetus the Nation's gain. I recommend it to you most highly for early action. Thank you.

We have as our final witnesses, Mr. Harlan Geldermann and Warren Haight. You gentlemen have been already well introduced by Sena

tor Inouye, who is a very distinguished Senator, and I thought gave you glowing introductions. He says, as I recall it, that he approved of what you are saying. So you come in with a lot of support.

STATEMENT OF HARLAN S. GELDERMANN AND WARREN G. HAIGHT, REPRESENTING OCEANIC PROPERTIES AND GELCO CORP.

Mr. GELDERMAN. My name is Harlan Geldermann. On my left is Mr. Warren Haight. I will make my remarks brief in the interest of conserving your time.

This statement is presented by Harlan S. Geldermann and Warren G. Haight, representing a joint venture in the development of a new community on 12,000 acres of land in San Jose, Calif. A subsidiary of Castle & Cooke of Honolulu, Hawaii, of which Mr. Haight is treasurer, is also developing a 2,000-acre new community on the outskirts of that city. The following comments in support of certain features of the housing legislation under consideration are pertinent to both of these substantial new community developments.

Our remarks will be in support of S. 2977 introduced by Senator Sparkman, chairman of the Subcommittee on Housing, of the Senate Committee on Banking and Currency.

Last year the Congress enacted a significant new program of mortgage insurance for privately financed land development, which encouraged the formation of new communities. There was thus established as national policy the principle that the creation of such communities is one valid ingredient of urban expansion. And urban expansion there will be, sooner than most realize. The Nation's cities must expand to accommodate 200 million people in the next 20 years. For example, Honolulu, small among American cities, with its half-million population, will nearly double in size in this period and require urbanization of 25,000 acres of the scarce land on the island of Oahu.

If this urban expansion is to occur in an orderly and planned fashion, it must take place in the form of new communities and, unfortunately, the $10 million limitation imposed on the FHA mortgage insurance program for land development in last year's legislation is inadequate. We have before us the cash flow requirements for a new community within the city limits of San Jose. This statement, based on over a million dollars of planning, research, and engineering work and generated by computer, shows that a cash amount in excess of $20 million is required for this development. Clearly, only organizations with vast resources can undertake such a development. Passage of Senator Sparkman's measure will make it possible for smaller developers and builders to participate in the way urban America should and must grow.

Further, the latitude given the Secretary of Housing and Urban Development, in extending the term of such mortgages beyond 7 years is important. Again referring to the cash flow for the new community in San Jose, we find that 11 years are required for the developer to recover his investment of cash.

While the conference of mayors has opposed this legislation, it is significant that the city manager of San Jose and the mayor of Hono

lulu are both strong advocates of the two new communities with which we are concerned and of the legislation which we endorse today.

Adoption of title II will provide the spur to the proper urbanization that the American public aspires to and which our economy and technology are capable of producing. Although almost entirely profit motivated, the housing industry has, nonetheless, repeatedly demonstrated its anxiety to create a better living environment for Americans of every income level. The greatest and most dramatic opportunity to accomplish that objective has, in recent years, been couched in comprehensive preplanned urbanization. Unfortunately, however, after much probing over the past two decades, involving vast expenditures of private capital, one fact has become inexorably clear: The success of the new communities concept requires Federal assistance. Specifically needed are (1) single source, large, long-term, low-interest loans; and (2) a clearinghouse set up to efficiently amass, organize. and disseminate factual information relating to this vast new industry. There are no conventional sources for the type of loan required. Smaller builders must either compromise the concept of the new communities development or resort to exorbitant interest payments-12 percent is not unusual-plus some "sweetener" to attract the lender. The added inducement may take the form of an option on a large share in the equity or other collateral participation in the success of the venture. Conventional financing for land development is usually for a term of 3 years or less, while the development of a true new community will take from 10 to 20 years to complete.

Adoption of title II will have a multiplicity of benefits:

1. It will permit better housing and a better environment to be put on the market at lower prices.

2. It will insure smaller developers an opportunity to participate in the new communities concept by providing credit sources not now available to them.

3. It will permit devotion of greater areas to open space and the provision of more generous amenities.

4. It will permit better quality throughout.

5. It will insure better planning.

6. It will permit the creation from the outset of an environment balanced as to residence, recreation, open space, and employment.

7. It will provide properly sized utilities and roads which will yield economies in the future thereby reducing the capital cost of the facilities as well as the service costs to the homeowners.

8. It will make for comprehensive planned coordination of transportation, greenbelts and open spaces, regional parks, recreational facilities and other regionwide cultural and physical amenities.

9. Because all of the regular amenities, such as schools and public buildings, will have been provided, it will do much to insure the success of the new communities concept, as this is directly related to the confidence of the home buyer in the ultimate outcome of the project. May we make one final point.

The very small builders and contractors have been concerned that encouragement of the new communities concept would somehow divert construction business away from them and to the bigger contractors While we cannot speak for others, valid business considerations in both San Jose and Honolulu have led us to quite the contrary position. As

a result of extensive and comprehensive market studies and analyses, and upon the unanimous recommendations of our consultants, we plan not to build ourselves, but, once having developed the basic roads, utilities and amenities, to encourage a number of builders with a vast divergence of styles and price ranges to come in and build competitively within the general framework of our controlled and operational master plan.

Thank you, Mr. Chairman and members of the committee, for allowing us to express our feelings on this subject.

Senator PROXMIRE. Thank you. This is a very persuasive statement. The last point you make here, I happen to be the chairman of the Small Business Subcommittee, and we are concerned with the problems of small contractors, and we have seen some cases where massive construction projects seem to make it difficult in two ways for small business. In the first place it is difficult for the small businessman to move in and provide commercial facilities, in competition with thẹ big chain operations, and then in the second place for-in the second place, because it is a big, often a big comprehensive overall program, the small contractor seems to be very much ruled out.

So even though you make it available, is there any likelihood that the little man won't be in a position, because he won't have the capital, to go in there?

Mr. GELDERMANN. Mr. Chairman, in speaking of that I will be somewhat repetitive to the statement. Our economists, and we have had three evaluate this particular project in the San Jose area, have, as I said, unanimously told us that our penetrations, our anticipated market penetrations, will be based solely upon this divergence of styles and designs and of course price ranges which really can only be created by the introduction of various building companies or builders into the project.

I think this has been evidenced by specific developments, some of which I can cite to you if you want to go into it, where a developer does become stereotyped within a given area, and the success of this new community approach will definitely be based on the encouragement of the smaller builders coming in, 20 lots here, 100 lots here, 30 lots there, and building on that scale.

Senator PROXMIRE. I understand that this is strictly an insurance program, you are not asking for any Federal grant, any Federal loan, all you are asking for is Federal insurance programs.

Mr. GELDERMANN. That is correct.

Senator PROXMIRE. Why can't private enterprise provide this? Especially in an area like Honolulu, or in any other city for that matter, the people who move into the suburbs are the well-to-do people, by and large the land has big value. Why can't this be handled by private institutions?

Mr. GELDERMANN. Since you mentioned Honolulu, I would like Mr. Haight to take that question.

Mr. HAIGHT. The amounts of capital needed for a program of this size are immense. As we mentioned, $20 million, or somewhat more than that perhaps. Under conventional financing, a single institution or even a group of them are seldom interested in commiting that much to one project, whereby we feel they would, with the Federal insurance