for consideration by the end of August 1953. Thus by that date the dollar volume of the applications for commitments greatly exceeded the total amount of FNMA's available dollar authorization, and it was obvious that contracts could not be issued against a large number of the applications.

It did appear, however, that under a policy and procedure which provided for consideration of all applications in the order of their receipt by the Association, all of the applications relating to minority group housing (other than any that may have been excluded by the statutory $3.5 million State limitation) received by the Association through August 31, could receive commitments. In those circumstances and to minimize avoidable delays in the construction of housing covered by the pending applications, FNMA's Board of Directors determined to adopt that policy.

The $35,820,700 in applications received by FNMA through August 31 for cooperative housing commitments under Public Law 94 were reported as providing for 4,098 units of housing in 18 different States. These applications included $12,985,100 represented as providing for 1,791 units of housing for minority groups in 10 different States. With respect to the applications received by the Association through August 31, the Association initially approved the issuance of advance commitments amounting to $25,491,200 providing for 2,999 units of housing in 17 States, and bringing the total commitments outstanding close to the statutory limitation of $30 million. Of these commitments, $11,160,700 related to housing for minority groups for whom the approved applications were reported as providing 1,575 units of housing, or 52 percent of the total horsing assisted by FNMA commitments under Public Law 94 at August 31. Between August 31, 1953, and January 31, 1954, the Association received additional applications for cooperative housing commitments amounting to $30,998,400 and providing for approximately 3,471 additional units of housing. This increased the total volume of applications received under Public Law 94 to $C6,819,100 and the number of housing units provided thereby to 7,509 units of housing in 25 different States, including applications aggregating $24,158,850 reported as providing 3,193 housing units for minority groups in 16 different States. Of the total applications submitted for consideration, $40,734,200 (approximately 60 percent) could not be approved because FNMA's available commitment funds had become exhausted before such applications could be reached for consideration. As a result of the large volume of applications submitted, some of those received on August 31 and all applications received subsequent thereto could not be considered because of the exhaustion of the available commitment authorization. The excess applications were returned to the applicants with the understanding that if and when funds for commitment purposes become available (by reason of the purchase of mortgages pursuant to outstanding e mmitments, or because of the expiration, cancellation, or withdrawal of existing commitments), the applications would then be considered in the order they were initially received by FNMA, taking into account the maximum amount of commitments that may be issued in any one State under the law.

Additionally to the cooperative housing commitments issued by the Association as of August 31, 1953, FNMA through January 31, 1954, approved advance commitments, including adjustments, in the net amount of $593,700 providing for a net increase of 48 units of nonminority type housing. These activities increased the total commitments issued by the Association for the purchase of cooperative housing mortgages through January 31 under Public Law 94 to $26,084,900, thereby providing for 3,047 units of housing in 18 different States. Of the total commitments issued, $11,171,200 relates to the purchase of section 213 mortgages reported as providing for 1,575 units of minority group housing in 10 different States and representing 52 percent of the total units of such housing so far assisted by FNMA commitments. The commitments issued in connection with housing for minority groups represented 46 percent of the total minority group housing applications received; the commitments issued in connection with nonminority group housing totaled 35 percent of the total such applications received.

We are pleased to have the opportunity to furnish this information for inclusion in the record of the hearings now in progress before your committee concerning the pending housing legislation.

Sincerely yours,

J. S. BAUGHMAN, President.

Mr. HENDERSON. Thank you, Senator. Would you ask them to reply before you do your final writing of this bill, please?

The CHAIRMAN. Yes. Of course, under this plan in Indianapolis that I was telling you about, we handled that out there by the State administrator simply holding up commitments until they had agreed to do it. That was under title IX, Defense Housing, which is pretty much going out, as you know.

Mr. HENDERSON. Yes, sir.

The CHAIRMAN. So, at the moment, there aren't any of these commitments, except under title IX.

Mr. HENDERSON. I understand that.

The CHAIRMAN. We have to find some way to make certain that a portion of the Government's guaranty, and a portion of these new houses, are made available to minority groups. No one should be opposed to that. I don't like to see it in legislation, because I don't consider minority groups inferior citizens, and therefore we ought not to be legislating for or against them, as such. That is one of those things that ought to be handled by administration.

Senator FREAR. Mr. Chairman, I agree with what you have said, and I think the meaning that Mr. Henderson has given on this "effective housing demand" statement is, that it doesn't only mean sufficient housing for any particular minority group, but for all groups, whether they be minority or majority, as is the case in some instances that I know of, where the minority groups are not Negroes, for instance, but are of a particular foreign extraction. They want to live in a segment of housing together. I think what you have suggested and what the chairman has said would include groups of that type. Am I correct on that?

Mr. HENDERSON. Yes, sir. I am not limiting this to anyone. I am merely saying that under the present, or at least the past operations of the FHA, Negroes, as one minority group, among others, and among many segments of the population, have not gotten anything like a fair deal under the new housing that has been constructed.

The advances that have been made in housing for the minority groups have been in the taking over of old properties as other people move into the new housing that the Government is financing. We believe that is very unfair. We believe we should have at least access on a fair basis to the new housing, and the FHA can remedy that, in our judgment, to a certain extent.

We know that for this type of housing the primary responsibility lies with the housing industry. As long as the Federal Government is going to play the major and important role that it is playing under existing legislation and will play under this legislation, we believe that the Government ought to see that industry takes certain steps to see that this thing is done on a fair and just basis. That all segments of the population, if they are able to pay for it can take advantage of the housing to be constructed.

The CHAIRMAN. I said in the opening statement when we started these hearings-and I want to read it again:

Every member of this committee is also concerned with the problem of helping to provide good and decent housing for our Negro citizens and other minority groups. Too long have these groups been on the outside of a good housing program, and before I vote for any provisions in this bill, I shall have to be satisfied that a substantial volume of better housing will be provided for them.

44750-54-pt. 1--20

That is where the need is in the country. The Federal Government doesn't need to help a man that is capable of buying a $25,000 house. He can sell his mortgage or get money to build it from a dozen different directions. He doesn't need to worry. He doesn't need a Federal housing plan to help him. We need a Federal housing plan to help the man with a limited income, where there are circumstances beyond his control. We in the past have just not been able to get this program working so that the minority groups, and particularly Negro groups, got their share.

Mr. HENDERSON. I am very gald to know your interest in it and am very glad to hear that statement.

The CHAIRMAN. I don't like legislation that specifically says you must do this for Negoes and this for whites. I don't like that sort of thing, because we are all citizens, and one is equal to the other, as far as citizenship is concerned. But even when you write that sort of thing into legislation, you still have to have the proper type of administration.

Mr. HENDERSON. There is no doubt about that. I want to say that some segments of the building and financing industry are waking up to this. It is probably due in some degree to efforts of persons like yourself, to speeches that Mr. Cole has been making around the country, and also to the pioneering work that some enterprises, like the Mutual Insurance Co. of New York, have undertaken, and people from Memphis that have appeared before this committee.

The CHAIRMAN. One feature that would be helpful to Negroes, of course, would be repairing and rehabilitating old houses. Of course, I don't agree with you particularly that a man has to have a new house. I have never lived in a new house in my life. Frankly, I would rather take an old one, and rehabilitate it, because they are better than these cheap new ones that are being built.

Mr. HENDERSON. But you wouldn't want to be shut out of these new houses, in case you wanted to have one.

The CHAIRMAN. No, I wouldn't want to be shut out. The point is what we all want is a decent house, whether it is new or old. The minute you move into it, after you have been there 30 days it is an old house. It is just like a new automobile. After you drive it around the corner, it is a used automobile.

I think that feature of this bill will be very helpful. It should be very helpful.

Mr. HENDERSON. We don't object to that. In fact, we look upon it with great interest. I have studied it and hope its consequences are good.

The CHAIRMAN. We are talking about very long terms and very small downpayments, which is obviously attractive to your folks.

Mr. HENDERSON. Yes.

The CHAIRMAN. But they should not be shut out of new houses. I don't know how we're going to do it, but we are certainly thinking about it.

Mr. HENDERSON. I hope the FHA will reply to your letter before this bill is passed.

The CHAIRMAN. Yes. Let's write them a letter and find out how they propose, under this legislation, to take care of minority groups, if they feel we ought to do something further in respect to this legislation.

Mr. HENDERSON. I just want to add this other specific suggestion, and that is in line with our general conception of the role of the Federal Government. We don't believe the Federal Government should underwrite discrimination. When FHA allows itself to be used to insure property where owners intend to discriminate in selling it or renting it, we think that is very, very unfair. We hope that the committee will consider some type of amendment to the legislation which would have FHA prohibit the granting of insurance to properties of that kind, if the owner does not agree that he will not practice discrimination. Now, going to FNMA, I remember very well last year when I appeared here, and the results of your and the committee's consideration of the problem of advance commitments by FNMA for cooperative housing, and the language that was included in the report of the bill in 1953. But, unfortunately, although after the advance commitment authority of FNMA was extended for 2 months, and although Negroes did acquire some benefit from that, the precise instructions and the reasons for extending the advance commitments were not carried out by FNMA.

We had a meeting with them toward the end of the year, where they admitted, in the presence of Mr. Cole, that they did not give priority to minority groups. That was the only reason for the extension of the advance commitment authority last June, when this committee asked that it be done, and that those advance commitments that were given out, be on a first come, first served basis.

The CHAIRMAN. You will agree in our report we made it perfectly clear what we wanted them to do.

Mr. HENDERSON. Certainly.

The CHAIRMAN. You say they did not do it?

Mr. HENDERSON. They did not do it. And for you just to say it, that' doesn't mean they are automatically going to do it.

The CHAIRMAN. I am going to ask Mr. McMurray, one of our staff members here, to go into the matter with FNMA, and report back to the committee on where they failed to follow out our instructions.

Mr. HENDERSON. Of course, the water is over the dam now, because that program ended last September.

The CHAIRMAN. I would just like to know why they did not follow our instructions.

Mr. HENDERSON. They may show an impressive number of units that were made available.

We are interested in new approaches for low-income groups. A large percentage of our people fall into that category. We are not so bound by tradition that we can't see advantages in new ideas, but we don't believe that the proposals that have been made in this bill can immediately be accepted as a substitute for public housing.

I recall reading what Senator Maybank stated the other day. I believe he felt that public housing should be continued until the experiment with the new approach-which I am in favor of in this billis approved.

The CHAIRMAN. This committee a few years ago authorized 810,000 units. That legislation is still in existence, but it looks like the Appropriations Committee, by their action, have made that legislation null and void. If they have, and if we are going to have public housing, we will have to have new authorizations.

Mr. HENDERSON. I hope you will consider that

The CHAIRMAN. The committee passed that in 1949, I think. That was what Senator Maybank was talking about.

Senator FREAR. Did Senator Maybank offer an amendment?
The CHAIRMAN. Yes. He did.

Senator FREAR. Have you read that proposed amendment?

Mr. HENDERSON. No, but when it is offered we will endorse it. We believe public housing should be continued and expanded until some other approach has been proved to be effective to meet the needs of low-income people. The industry has admitted they can't do it, unless this new idea works. But, until this new idea proves itself

The CHAIRMAN. I just don't like to see a big, high building with people living in it, that will certainly develop into a slum, as you know. I just don't like the idea. I would much prefer to see individual homes or small two-apartment units. I would like to see them out in the suburbs, out in the country, because most of these publichousing projects are all downtown, in very undesirable locations, as you know.

So, I am inclined to think in terms of individual units, which we could sell these people, or some plan where they could eventually own them, even if we have to get long terms and maybe lose some money on them. There are a lot of people today that are in public housing that 6 months or a year from now will get some very fine jobs and get into the position, say, 3 or 4, or 5 years from now where they would be able to pay off a mortgage. Most successes in America, you know, are from men that started in very, very poor circumstances, on the wrong side of the railroad tracks. Therefore, I would like to see some plan where a man could have ownership and take an interest in his property.

Mr. HENDERSON. I agree with you. We are now bound to the public housing idea. We are trying to find some way of meeting the need temporarily until the new idea proves itself.

Now, a word about slum clearance before I conclude, Senator.

We have had serious difficulties with the slum-clearance program, as I have stated many times before this committee, where in the name of redevelopment

The CHAIRMAN. Will you yield just one moment?

Mr. HENDERSON. Yes, sir.

The CHAIRMAN. I hold in my hand an amendment to be proposed

by Senator Maybank, to S. 2938.

Mr. HENDERSON. We endorse that heartily.

The CHAIRMAN. You are 100 percent in favor of it?

Mr. HENDERSON. Yes, sir.

The CHAIRMAN. I think we will have it printed in the record at this point.

(The amendment referred to follows:)

[S. 2938, 83d Cong., 2d sess.]

AMENDMENT

Intended to be proposed by Mr. Maybank to the bill (S. 2938) to aid in the provision and improvement of housing, the elimination and prevention of slums, and the conservation and development of urban communities, viz: On page 94, after line 11, insert the following new section: