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see.

Mr. DITCHY. That is true.

The CHAIRMAN. If it doesn't do that, then it doesn't do anything, and I am against it. I have been rather sympathetic toward it. I can see where it, properly handled, properly administered, may well relieve the necessity for so much public housing. That is the only virtue it has, if it has any virtue at all.

In other words, I would rather the Federal Government would spend-for example, if you are going to spend a billion dollars on public housing, the taxpayers' money, I would much prefer to spend a billion dollars on this sort of thing knowing, maybe, that maybe a third of them would never pay for them, and I would have to have them back on my hands.

Bút, saving the taxpayers two-thirds of it, I think it would be better economically, better for the taxpayer, better for the Government. I am not as much interested in that as I am in the fact that you have these people out in individual homes and individual units, where they have some pride in ownership. As I said earlier today, of course many of them today are in the slums and tomorrow they might have good jobs and start on their way to becoming President of the United States, or a Senator, or a millionaire. A lot of people today who are up there, can't make their payments maybe 2 years from now, and might lose their homes, and they end up in slums, you

So that is the virtue of it, if it has any virtue at all. That is the only reason why it is in the bill, and that is the only reason why it was recommended. It is trying to find some better way of housing people that can only pay a small amount each month, other than in public housing, and get them out in the country, get them out into individual units and say, "Here, now, pay $25 a month, and some day, 40 years from now, you will own it. Or, if your economic condition gets better in 6 months or a year or two, you can pay

it off in full, or increase your payments and get it paid sooner.

That is the only virtue it has. If it doesn't have that, it doesn't have anything.

Mr. DITCHY. We realize that. There is no question about the philosophy of it. Beginning back with the depression, when our mortgage field was really in a tough shape, and before that, the development in the mortgage field has

been to The CHAIRMAN. That's right. But I think here we have to keep in mind that the purpose of it is a partial substitute for public housing.

Mr. Ditchy. We feel that public housing should be in the picture until we have taken care of this fringe.

Senator FREAR. Certainly, Mr. Chairman, I don't think you were trying to say you would yield to inferior construction.

The CHAIRMAN. No, just the opposite.
Mr. Ditchy. This is just a realistic observation.

Senator FREAR. It is a very fine, paragraph. I think it is a realistic one.

Mr. Ditchy. Yes. We do not criticize the philosophy at all. This thing has been approached from both ends. People have looked at this fringe by saying, “We'll take care of the incompetent, the insane; we'll put them in fireproof housing with the latest advantages.” And then if you are sane, that's a different story; you can't be helped. And it has been approached from both angles.

But the realistic view of it is this, that whatever we do in this regard has to be done with some circumspection.

The CHAIRMAN. You have made a very fine statement. We appreciate it very much.

Mr. DrTchy. Thank you.

The CHAIRMAN. Before we recess today, I want to say that tomorrow our wtnesses will be Congressman Deane, of North Carolina; the National Association of Real Estate Boards, the Congress of Industrial Organizations—that is the CIO; the National Retail Lumber Dealers Association; and the Trailer Coach Association.

We will recess now until 10 o'clock tomorrow morning, and will reconvene in this room.

(Whereupon, at 12:05 p. m., the committee recessed, to reconvene at 10 a. m., Thursday, March 18, 1954.)

HOUSING ACT OF 1954

THURSDAY, MARCH 18, 1954

UNITED STATES SENATE,
COMMITTEE ON BANKING AND CURRENCY,

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

Present: Senators Capehart, Goldwater, Douglas and Lehman. The CHAIRMAN. The committee will please come to order.

Our first witness will be Congressman Charles B. Deane of North Carolina.

Congressman Deane, why don't you proceed in your own way?

STATEMENT OF CHARLES B. DEANE, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF NORTH CAROLINA

Representative DEANE. Thank you very much, Mr. Chairman. I have a prepared statement which I will glance at as we proceed. My purpose in appearing this morning, Mr. Chairman, is to ask that the Banking and Currency Committee extend title V of the rural housing program previously and even now administered by the Farmers Home Administration.

The Department of Agriculture proposes to drop title V of the Housing Act of 1949 beyond July i, 1954. The House and Senate bill, I assume likewise carries that provision to no longer extend title V.

It was extended July 15, 1952, and again extended July 30, 1953.

Mr. Chairman, I have watched with interest and appreciation the operation of title V. It is my reasoned judgment that title V is the best way, and I feel the only way, that we can continue to assure a workable and practical farm housing program.

I note that Mr. R. L. Farrington, Director of Agriculture Credit Service, Department of Agriculture, testified before your committee on last Thursday that it is the recommendation of the Department of Agriculture that the farm housing program be carried on through the Bankhead-Jones Farm Tenant Act by increasing the interest rate to the borrower from 4 percent to 5 percent and the guaranty to the lender from 3 percent to 4 percent.

Up to the present time, Mr. Farrington has not appeared before the House committee. We are about to close hearings on our side, and I have admired, Mr. Chairman, your interest and the interest of the Senate committee in the housing program. I know that your interest in this rural program is great. But I do feel that this hard money policy and restricted rural housing plan recommended by the Depart

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ment of Agriculture, if adopted by Congress, will seriously curtail needed housing for the rural people. The farmer will be forced, if he can find the money, to borrow at a higher rate of interest in order to build needed farm housing.

The reason I have left my own Committee on Banking and Currency this morning to make this brief appearance is that our House committee has no recommendation from the Department of Agriculture for farm housing, even the Bankhead-Jones proposal. It appears, therefore, that it is up to this committee to again look after the interests of the farmer.

I am not against using the Bankhead-Jones Act, but I contend it is not broad enough to take care of the expanding rural homeownership program. I feel that the interest factor of the Bankhead-Jones Act is not in favor of the farmer in view of the ever-increasing problems facing the farm economy.

As this committee well knows, the Bankhead-Jones Act would not take care of the rural dweller who is not dependent entirely on farming as the source of his livelihood. Bankhead-Jones would bar loans to those persons who live in the country and carry on basic farm operations, who may have some work in the town or the mill. These rural people, who have found it absolutely necessary to meet the everincreasing cost of living, and who may have part-time work in the mill or the store, are indeed making a definite contribution to the rural economy.

Am I to be a judge that these folks are not true sons of the soil?

I point out, also, Mr. Chairman, that these rural people who would be ineligible for rural housing loans are in the low-income bracket. They were not, as the records will show, able, prior to the availability of loans through title V, to secure home financing for needed home building:

A review of the accomplishments of the Farmers Home Administration farm housing program under title V will reveal the great service that this program has rendered the rural people throughout the country since 1949.

I requested Mr. McLeaish, the Administrator of the Farmers' Home Administration, to submit to me a table, which he has done, indicating the progress of this program, and up through December 31, 1953, a total of $93,992,181 in loans has been made. The total number of loans was 18,401, of which 7,675 were to veterans.

The CHAIRMAN. May I suggest that those who are going to testify today sit at these little tables and give other people a chance to occupy your seats? In other words, you who are going to testify, if you will just seats at this middle table right in the center, and then the other folks that are standing in the rear can have your seats.

Thank you very much.

Representative DEANE. Continuing, Mr. Chairman, through December 31, 1953, the total number of loans amounted to 18,401, of which 7,675 were to veterans. I hold in my hand, Mr. Chairman, a letter here, signed by Mr. McLeaish, dated February 16, and I quote this paragraph:

As of the end of January this year, the reports received from our State offices indicate that there are on hand 5,020 applications for farm housing loans, and of that amount, 1,971 are from veterans. The applications on hand, multiplied by $5.800, the estimated average loan size for the 1934 fiscal year, would amount to $29,116,000.

The farm-housing funds remaining unobligated for the 1953–54 fiscal year are $3,291,226. The loans in process will use these funds by April 1.

I point out, Mr. Chairman, the operation of the farm-housing program has enabled more than 18,000 American families since 1949 to borrow sufficient funds with which to carry on needed construction of rural homes.

And if I may, Mr. Chairman, at this point, I would like to insert in the record, because I feel the Senators would be interested in what is happening in each of the States of the Union, what is taking place under title V, and under date of February 2, I inserted this table in the Congressional Record.

With your permission, Mr. Chairman, I would like to insert that as a part of my remarks at this point.

The CHAIRMAN. Without objection, it will be inserted in the record. (The table referred to follows:)

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