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MAINTENANCE

Agreement.-A satisfactóry agreement on the efficient operation and maintenance of the system shall be provided to the purchaser by the installing company.

Testing.The purchaser shall be instructed to test the system each week.

Inspection.--The installer shall provide, at a reasonable cost, a routine test and inspection of the system at least once each year.

Records. The installer shall keep a complete record of the tests and inspections of each system. The record shall be available for examination and where required, reported to the authority having jurisdiction.

CODE OF ETHICS

Covering the sales, installation, and maintenance of automatic fire detection and alarm systems.

SALES

Sales approach.No salesman shall misrepresent his status, or in any way falsely imply that he represents a fire department, building department, or any other public authority. The salesman should leave a card at the home of each prospect called upon.

Demonstration.--No salesman shall make any misstatement or exaggeration of fact concerning the performance of automatic fire alarm systems, approval by public authorities, or insurance relationships, or make any other claims or statements which cannot be fully documented by published information from authoritative sources.

Order form and contract.-No salesman shall have the authority to alter in any way the basic terms of the installation company's printed sales contract; nor shall he expressly or by implication offer any guaranty of equipment or commitments for service, or any further inducements, other than those guaranties, commitments, and inducements which are provided for in the company's printed contract form.

All equipment shall be guaranteed for a period of 1 year against defects in workmanship and materials; and any equipment found defective shall be promptly repaired or replaced without charge to the purchaser.

No sales contract shall contain a clause providing a penalty for the cancellation of the contract unless it also provides a reasonable waiting period before the penalty clause becomes effective; and in no instance shall such a penalty clause take effect until 2 days after the original signing of the contract.

All requirements of the lending institution, as well as any insuring organization which may be involved together with the lending institution, shall be completely satisfied.

Pricing.-A schedule of prices for various types and sizes of installation shall be filed with the bank or lending institution by the installation company and strictly adhered to by the company's sales representatives. If a departure from the standard price is required because of an unusual installation condition, a full explanation and justification of the new price shall be attached to and made a part of the sales contract.

INSTALLATION

All systems should be permanently installed in a workmanlike manner and in accordance with the Standards of the Automatic Fire Alarm Association.

MAINTENANCE An adequate service arrangement shall be provided for each system, and the installing company shall make full provision for carrying out its service commitments under all circumstances, including the failure or discontinuance of the installation company itself.

A complete record of every installation shall be kept by the installing company and open to inspection by proper authorities. In case of failure or discontinuance of the installation company, their records shall be turned over to:

(a) The manufacturing company from which the installing company held a franchise;

(b) If no such manufacturing company is involved, to the appropriate committee of the Automatic Fire Alarm Association.

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The installation company shall transmit promptly to the appropriate committee of the Automatic Fire Alarm Association full reports on all instances of :

(a) All fires occurring in premises protected by automatic fire alarm systems, with full information as to the performance of the system, extent of damage, etc.;

(6) All instances of false alarms, failure, etc. which might contribute information useful in improving the knowledge and standards of the industry.

RESPONSIBILITY The installation company shall maintain an adequate program of active supervision over its sales and installation personnel to insure the enforcement of this code.

Any manufacturer or distributor having franchised dealers shall maintain a program of active supervision over such dealers to insure the enforcement of this code.

All participating companies agree to accept the authority of the Automatic Fire Alarm Association, and to cooperate fully at all times with accredited representatives of the Automatic Fire Alarm Association, in all matters pertaining to the enforcement of this code.

Senator SPARKMAN. Congressman Robert E. Jones, of Alabama, was to have appeared before the committee this morning in connection with the farm housing bill or proposal. He had to preside over at a House hearing and was not able to come. He will offer a statement. Without objection, it will be included in the record if it is received in time.

All statements and letters I have and any that may be received in time will be inserted in the record. This concludes the hearings. The subcommittee will stand adjourned.

(Whereupon, at 12:10 p. m., Friday, May 20, 1955, the subcommittee was adjourned.)

(The following letters and statements were received for the record :) Alaskan housing

UNITED STATES SENATE,
Committee on Interstate and Foreign Commerce,

May 17, 1955. Hon. JOHN SPARKMAN, United States Senator,

Senate Office Building, Washington 25, D. C. DEAR SENATOR: As you are no doubt aware, I have been interested for some years Alaskan housing problems. Unfortunately, due to factors beyond control of the people of the Territory, conditions creating hardships upon builders there have arisen.

Builders have been encouraged by the military as well as housing officials, to plan and build a number of subdivisions in the Territory. Due to factors beyond the control of the builders a number of these subdivisions are in a distress situation.

The economy of the Territory, as I am sure you are aware, has not been as robust as had been expected. However, it is felt that there is a relatively normal healthy market for these properties provided that mortgage arrangements, roughly comparable to those in the 48 States, can be achieved.

There is a bar, however, to achieving such mortgage relief, in that the Housing Act of 1954 effectively precludes FNMA from acting to aid the situation. My study of the problem indicates that the various interrelated factors involved in the present problem can be worked out if the authority of FNMA, which is now restricted to $15,000 in such matters, is increased by the normal 50 percent permitted to take care of higher costs in the Territories.

As part of my analysis of the matter, I wrote to the Administrator of the Housing and Home Finance Agency, setting forth what looks to me to be a feasible plan to alleviate the hardships involved and dispose of the matter in a satisfactory way for all concerned, including of course, the Government. It is my understanding that the Administrator and the various agencies involved are not adverse to the plan suggested in my letter. A copy of my letter to Albert Cole is attached hereto.

Time is very important in this matter. It occurs to me that you may have before your committee a bill which might prove a logical vehicle for an amendment to the 1954 Housing Act—that portion dealing with FNMA's authorization. I had thought of suggesting an amendment to S. 1645, but that bill, of course, has already gone through the Senate.

The following language either as a separate bill, or as an amendment to legislation as suggested above, would meet the problem:

Section 302 (b), of 1954 Housing Act, at the end thereof, add the words: “except that for mortgages upon properties in the Territories of Alaska, Hawaii, and Guam, the original principal obligation may exceed $15,000 by not more than 50 percent thereof."

I will appreciate your reaction to this proposal.
Kindest personal regards.
Sincerely,

WARREN G. MAGNUSON, U. S. C.

APRIL 25, 1955. Hon. ALBERT COLE,

Administrator, Housing and Home Finance Agency, Washington, D. O. DEAR Mr. COLE: As I am sure you are aware, I am keenly interested in Alaskan matters. If you will remember, I was active in sponsoring the Alaskan Housing Authority Act, the Alaskan Public Works Act and related statutes.

Unfortunately, I now find that a very difficult situation concerning housing has arisen. From information furnished me, it appears that a number of housing projects are now in an extremely precarious financial position.

As I am sure you know, the housing picture has changed very drastically in Alaska in the last 2 years. The military have apparently cut back their expansion plans in Alaska. Perhaps of even more significance is the construction of directly authorized quarters in large numbers by the military. As a result, the demand for housing units has been considerably less than was originally anticipated by all concerned.

The housing projects that I am referring to are FHA insured and, I believe, the mortgages are owned in most, if not in all cases, by FNMA. The reason, of course, that these mortgages are owned by FNMA is that private mortgage money has not been available in Alaska in any amount for many years.

I know you will agree that the Government's interests will be best served if ways can be developed for the individual units to be sold by the sponsors to private parties in accordance with the originally conceived plans. As it is now, from the information that I have gathered, it appears that sales of the various units are being held up almost entirely by financial and economic considerations.

Unlike conditions in the States, including those in the State of Washington and in the area surrounding Washington, D. C., as examples, very substantial down-payments must be exacted by sponsors in Alaska from their purchasers. Not only are the sponsors unable to even waive payment of settlement charges, as appears to be the case in the Washington, D. C. area, but the sponsors in Alaska are required to secure down-payments in amounts averaging $5,000 a unit.

Unfortunately, the economic reaction of prospective buyers appears to be the same in Alaska as in the States. Purchasers seem to be as completely unwilling or unable to make $5,000 downpayments in Alaska as they are in the States.

In trying to find a solution to the impasse, it has been suggested to me that a very sensible way to cure the situation is to refinance the various projects in accordance with the requirements of the 1954 Housing Act. If the 1954 act formula was to be used and the valuations remain more or less the same, it would be possible for the mortgages to be increased an average of perhaps $2,000 a unit. If, then, the builders, as a condition to such an arrangement, were to be required to reduce the sales price, perhaps $2,000 plus, the downpayment required from the purchaser would need to be something less than $1,000. The best information that I have received from Alaska is that such a downpayment is entirely within the ability of prospective purchasers to pay.

Further, if the formula of the 1954 act is used, the mortgages could be written for a 30-year period, thus decreasing the monthly payment to an average of perhaps $125 a month instead of a present average of approximately $180 a month.

It appears to me that the only way the problem in Alaska can be solved is by means of some such plan as that set forth above. It is obvious that the ultimate objective, of individual ownership of the housing units built, cannot be secured under the present financial requirements, regardless of who attempts the sale of the properties.

As I know you are aware, no private mortgage funds are presently available for use in Alaska and if any housing construction is to proceed there, it must be pursuant to the special assistance provisions of the FNMA authority. It is my understanding that your agency has either already taken a favorable action on the special assistance question or that such a decision is impending.

In looking at the 1954 Housing Act, it develops that, through an apparent oversight, the FNMA authority is restricted to $15,000 mortgages or less. Apparently, by error, the normal language present in other housing acts, whereby a differential is permitted in the Territories to take care of the higher costs, was omitted.

It seems to me that if amendatory words, to take care of this omission, were added to the act, perhaps through my bill, S. 1645, providing for the extension of FNMA commitments under certain circumstances, a workable basis for solving the situation would be brought into being.

With FNMA's authority to handle the situation straightened out, I am informed that it is entirely practicable to expect that all of these troublesome projects can be placed on an owner-occupant basis by the end of this season. This plan is particularly appealing to me since it will enable the Government to avoid something that we all fear-a substantial number of foreclosures, with the Government being projected more forcefully than ever into the ownership and operation of individual housing.

It is my plan to sponsor the necessary change in the FNMA authority mentioned above. I am, of course, assuming that if such a legislative change is made, the present Alaskan housing difficulties will be on their way to a solution. Accordingly, since I am advised that S. 1645 may be acted •on by the committee within the next 3 or 4 days, please let me have your reaction within that time. Kindest personal regards. Sincerely,

WARREN G. MAGNUSON, U. S. S.

Public housing

CHAMBER OF COMMERCE OF THE UNITED STATES,

Washington, D. C., May 18, 1955. Hon. JOHN SPARKMAN,

Chairman, Subcommittee on Housing, Senate Committee on Banking and
Currency,

United States Senate, Washington 25, D. C. DEAR SENATOR SPARKMAN: The Chamber of Commerce of the United States urges you to reject the public housing provisions of S. 1800.

The 3,100 Chambers of Commerce and trade associations in our federation have opposed subsidized Government housing, or public housing, as it is frequently called, ever since the program was inaugurated by the Federal Government. These members have said, among other things:

"The shelter requirements of needy families in housing of acceptable minimum standards should be taken care of by the State and local governments."

Since World War II, 91/2 million privately financed dwelling units have been built and occupied. This means that 1 out of 5 families in this country have moved into a new “home.” This new housing has been built in all price ranges, and construction continues at a high level. No place in the world has there ever been such a record made. Why should we jeopardize it?

Advocates of a federally subsidized housing program, in the early years during a depression, argued for it as a means for halting a decline in employment. Later the program was advanced as a supplement to slum clearance and later, still, as a means of meeting housing shortages engendered by war activity. Arguments more recently used have reverted to an alleged need for public housing in connection with slum clearance activities.

The problem of slum clearance, however, is only a part of the much larger problem of the renewal of our cities. We need programs initiated by the cities themselves, for the conservation and rehabilitation of the existing supply of housing as well as the continuance of a high level of new building. Through programs of conservation, houses now in good condition are prevented from becoming dilapidated; through programs of rehabilitation, the great bulk of substandard houses can be restored to reasonable standards of livability.

The serious housing shortages, which heretofore have stood in the way of relocation of families living in houses not susceptible of rehabilitation to minimum standards, have largely disappeared. The increasing flexibility in the housing supply permits going forward vigorously with local rehabilitation programs and of programs for clearing and rebuilding blighted areas.

Rehabilitation can be accomplished through rigorous enforcement of local sanitary and housing ordinances to insure that existing housing will meet acceptable minimum standards of health and decency. Many cities over this country are actively going forward with such programs, notable examples being Milwaukee and Baltimore.

The problem of hopelessly blighted areas should be dealt with under urban redevelopment laws enacted by States to empower cities to assemble and clear blighted areas and to encourage their rebuilding by private initiative and private investment.

Such programs of rebuilding and rehabilitation are necessarily time-consuming and are inherently a continuing community responsibility in our dynamic society.

S. 1800, besides extending existing contractual authorization, would provide for 35,000 public (tax finan ed) housing units in each of the next 2 years. How was this figure derived? Why not one-half that number, or twice as many, or 10 times as many?

The number of public housing units which will be built is not the only issue. Any precise figure does not answer the fundamental question: In what sense is it the responsibility of the National Government (the taxpayer) to provide housing for certain citizens? Every million dollars of tax money taken from the people for public housing must make it a little harder for some lower, or moderate income people to build their own homes. If the concept of public housing grows and grows, it may become an accepted way of life. It could induce more and more people to look to the Federal Government for all or part of the cost of their housing. It inevitably will reduce the incentive for some of our citizens to try to build their own homes. Throughout history, the effort to better one's position has been the great incentive which has helped raise our production and our incomes.

Why taxpayers generally should subsidize the building of new homes for certain families, when often such taxpayers cannot afford to build new homes of similar quality for themselves, should be questioned.

Furthermore, when Government enters a relief field, it has generally been assumed that all persons within the relief category should be equally eligible. But in the very nature of public housing, one public housing installation will be located here, another one there, while vast numbers of other families in a similar financial category will receive no such subsidy, just because they happen to live in a village, town, city, or county where no public housing project happens to be launched. This is discrimination.

In the interest of nondiscrimination and equality before the law, no Government relief program should be launched, unless all individuals or families in that relief category have equal access to the subsidy.

Furthermore, these public housing projects are creating social problems. Children in the same general neighborhood are made to fall into two classes. One group comes from self-supporting families, and the other group gets taxpayersubsidized housing. This establishes community conflicts, class distinction, and can lead to endless friction.

Finally, such public-housing expenditures, like all other nonessential or less essential expenditures, make it that much harder to balance the annual budget. We request that this letter be made a part of the record of your hearings. Cordially yours,

CLARENCE R. MILES.

STATEMENT OF EARL W. SMITH, PRESIDENT, NATIONAL ASSOCIATION OF

HOME BUILDERS

Mr. Chairman and members of the committee; my name is Earl W. Smith and I am an active home builder from El Cerrito, Calif. I am very happy to have this opportunity as president of the National Association of Home Builders to submit to you the views of this association on S. 1800, the Housing Amendments of 1955, and related bills now before you.

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