Representative DEANE. The program of title V, in my State of North Carolina, has not been abused. The same is true of the program throughout the United States.

Mr. Chairman, it would be interesting to know who is opposing title V of the rural housing program.

You would be interested in studying the record of this program in your own State. I can tell you about how it has worked in my State of North Carolina.

Today, 700 families have attractive rural homes that would not have had homes were it not for title V; about 6 percent of the North Carolina borrowers have constructed new homes at an average cost of $7,900. It is a well-built house with three bedrooms, on the average, and complete utilities.

The borrowers have contracted an average of about $625 additional in labor and materials toward the construction of the home. About 40 percent of the North Carolina borrowers made themselves completely responsible for construction, furnishing their own labor and hiring and supervising the labor of others.

Mr. Chairman and members of the committee, we are hearing a great deal during our hearings in the Banking and Currency Committee about a $7,000 house. I have a feeling that title V offers the practical and the only plan whereby we are going to be able to find an enduring and sound $7,000 home.

Under title V of the Housing Act of 1949, borrowers have been able to pay back these loans over a period of 33 years on a basis suitable to their financial ability to make repayment. In the case of each borrower, a study has been made by the Farmers' Home Administration officials concerning the borrower's ability to repay the loan, whether on an annual basis, a quarterly basis, a monthly basis, or a semiannual basis. And at this point, I would ask that you review the testimony given to this committee by Mr. Farrington on last Thursday, and he points out, "It has been very difficult to administer the program under these conditions."

He is speaking now about trying to analyze the difference between a completely rural family and a rural family who spends as much time on the farm as he may spend in the mill. And I do feel that these people, as I have indicated before, are making a very definite contribution to the farm economy.

The philosophy underlying the Bankhead-Jones Act is that of helping an economically submerged group-the tenant farmer. The underlying philosophy of title V of the Housing Act of 1949 is rather to provide mortgage credit to farmers who are perfectly sound economic risks, but may simply live in areas where there is a lack of mortgage money or where bankers simply prefer not to lend on farm housing.

Since the farm housing program under title V, through the Farmers' Home Administration, is operating in a very satisfactory manner, I urge your committee to provide again the necessary funds and legislation that would bring about the necessary appropriations to carry on this program.

Mr. Chairman and members of the committee, where will our rural people turn for housing credit with an interest rate they can afford

if the Farmers' Home Administration farm housing program is either permitted to dry up or go beyond their reach at this time?

All of you gentlemen know that the income of the rural dweller is seasonal, depending upon when their crops or other produce are sold. They do not have a steady monthly income, as the urban dwellers who work for a salary and can, therefore, foretell when they can make regular repayments on a loan.

In the light of current information that is reaching us, indicating that economic conditions throughout the country are tightening up, unemployment now increased to almost 4 million people, and farm credit and prices in a state of unpredictable flux, it seems to me, gentlemen, that we must make every move we can here to plug every leak in our dikes and to make sound credit available to our rural people. What I am advocating, gentlemen of the committee, is to ask that you assure our great rural population the needed credit for home and housing construction in a normal and what has proven to be a most effective way.

I ask you respectfully, Mr. Chairman and members of the committee, to extend title V.

The CHAIRMAN. Thank you very much, Mr. Congressman. We will certainly get into it.

Representative DEANE. Thank you very much, Mr. Chairman. The CHAIRMAN. I will try to find out why it was left out of the bill. I think Senator Frear wishes to ask some questions on this subject, but he isn't here. Does anybody have his questions? He is very much interested in this particular phase of the legislation.

We will certainly get into it. I can't tell you why it was left out. Representative DEANE. I might point out, Mr. Chairman, that Senator Sparkman has introduced a bill to extend this program, and I am not reasoning against the Bankhead-Jones Act, but I think it would be interesting for your staff to determine just how slow the operations have been under the Bankhead-Jones Act because, as I have indicated, it is basically for the tenant group, the very low farm income group, and if they can find financing at 5-percent interest, it would be interesting to me.

The CHAIRMAN. I might say this, that we ought to have all housing in one place.

Representative DEANE. I agree with you.

The CHAIRMAN. It ought to be in one place where you can get w it, and get to it in a hurry. That is No. 1.

Secondly, I don't know why we shouldn't help the farmers. Do you, Senator Lehman?

Senator LEHMAN. Not a bit.

The CHAIRMAN. I understand from Mr. McMurray here that possibly the reason it was left out is that they couldn't get clearance from the Agriculture Department. I am not certain of that.

Representative DEANE. I questioned Secretary Benson when he appeared before our committee, but unfortunately we spent much of the time talking about farm policy in general, and not some of the basic needs, like housing. And he reasonably was not advised about the housing program, and, as I indicated in my statement, Mr. Farrington appeared before your committee, but we have nothing before ours.

44750-54-pt. 1—27

The CHAIRMAN. Well, No. 1, I am in favor of having housing all under 1 roof in 1 place. And, secondly, I don't know why we shouldn't help the farmers on housing if we are going to help everybody else.

Representative DEANE. Thank you, Senator.

The CHAIRMAN. Thank you. It was nice to have you.

Without objection we will place in the record at Senator Sparkman's request a letter addressed to Senator Sparkman from the Institute of Farm Brokers. Likewise, without objection, we will place in the record a statement of James G. Patton, president of the National Farmers Union.

(The documents referred to follow :)

INSTITUTE OF FARM BROKERS

OF THE NATIONAL ASSOCIATION OF REAL ESTATE BOARDS,

Chicago 3, Ill., February 22, 1954.

DEAR SENATOR SPARKMAN: There are as many slums in in rural America as in the urban areas. All you have to do to prove this for yourself is to take an automobile ride on a back road or main highway. There is as great a need for improvement of rural housing as there is for slum clearance in the most rundown section of any big town in the Nation.

This letter is to solicit your active support in obtaining legislation to improve rural housing. The answer is really simple-provision of credit for farm families who want to build better homes.

In most of the towns of America an urban citizen can invest a few hundred dollars through the FHA or the VA and become the occupant of a decent house. Now President Eisenhower has urged even more liberal housing financing, but his recommendation did not include one word about financing homes for farmers. It is the rural family who gets no assistance whatsoever from existing housing let the proposition be completely one sided. Let's amend this legislation to make it easier for farmers to obtain financing to build homes.

The problem faced by a farmer who wants to build a better house is that he cannot find a lending agency to finance that house. The reason is that extra handling charges involved in such loans cut down the lender's margin of profit so the lender puts the money out where it will bring the most return-to builders and buyers in urban areas. If the lenders could make as much profit by making loans to farmers they would be quick to do so. guarantee loans for farm homes at present. inducement to make the loans.

There is no reason FHA cannot
It's just that the lenders need

A simple little amendment to the President's housing bill could have just that effect. It should provide for the FHA or some other governmental agency to subsidize rural home building to a limited extent, i. e., to the extent of paying lending agencies an additional 1 or 2 percent interest above the regular interest rate charged the borrower. This would equalize the cost of making loans to farmers and would encourage lending institutions to make loans for construction of rural housing. Don't be afraid of the word "subsidized." Just remember that every house built by FHA so far has been subsidized. It's just a matter of extending the benefits to farmers.

Another provision that would expedite clearance of our rural slums would be to provide for setting aside of small acreages and assuring a clear title to home sites on rural properties on which mortgages are outstanding. This would qualify the rural builder for a loan and would not endanger the securities of the existing mortgage holder. Already this is being done by some insurance companies financing properties in suburban areas. It should work equally as well in rural sections.

Your support of such legislation would be greatly appreciated by the lending institutions of the country and by the farm people. It would be a patriotic service to your country. Thanking you for any consideration you may give my suggestions, I remain,

Sincerely yours,

B. E. GRANTHAM,

First Vice President, National Institute of Farm Brokers.