to do that. By making application to the Housing and Home Finance Agency, and by fulfilling the criteria that we set up, they may obtain this advance free of interest, while they plan it and prepare to construct it. It is our hope that they would construct the project within, say, 2 or 3 years, and as a part of the law, that money is returnable immediately the construction starts. Mr. ASHLEY. I see. Thank you. Mr. DAVIDSON. Mr. Chairman. Mr. DAVIDSON. Mr. Chairman, just for the sake of my colleage, Mr. Ashley, whom Mr. Cole said was under a misapprehension, I would say it is pretty hard to say that he was under a misapprehension, because it depends on what department you are in as to what the policy of the Government might be. For instance, as Mr. Cole points out, in his present sphere of work the Government is very active to assist in all of these local projects, and so on and so forth. If you were in the realm of Health, Education, and Welfare, whatever would not meet with Secretary Hobby's pleasure would be referred to as a local problem. I have found that to be the case recently in connection with some conferences and correspondence I had with her and Dr. Scheele. So it is not exactly correct to say that you are entirely wrong or that you are right, Mr. Ashley. It depends on what stable you are in at the time. Mr. MULTER. May I suggest that we are getting into the field of politics, and that we should get back to the field of Government. Mr. Betts. Mr. BETTS. Has there been any reimbursement made on any of these projects? Mr. HAZELTINE. We prepare no plans, Mr. Betts. Mr. BETTS. Whatever your costs are. Mr. HAZELTINE. The cost which we advance is the cost that their engineers or their consulting engineers charge them for preparing this plan. Then, when this plan goes into the construction stage, when the contract is let for the construction, after they have voted their necessary bonds and have the money in hand, they then repay us 100 percent, without interest. If they do not do it at that time, we then assess 6 percent interest and proceed to attempt to collect. Mr. BETTS. Has this gone far enough that you can make a statement as to what the situation is with respect to reimbursements? Mr. HAZELTINE. We have had a history on the first and second advance planning, which is somewhat similar to the present advance planning law, except that the third advance planning law, we expect to administer in such a way as to get much more of a return. On the first advance planning, which was Public Law 458 of the 78th Congress, passed in 1944, there were $46 million, approximately, advanced, and that provided for an estimated project cost of some $2,500 million. At the present time there has been about 44.1 percent recovery. These first plans were all completed plans, and many of them went into obsolescence, because of our rapid strides in technology, or also because of changing conditions, and the rapidly growing areas. In the second advance planning program, which was enacted in 1949, there was $16.5 million advanced, and then it went into liquidation, due to the fact that the Korean war came on and this particular program was stopped. Of that, we have also gotten back, oddly enough, 44.1 percent. We expect to get quite a bit more back out of second planning program, because it is just now getting to a point where construction should start and we should be regaining a great many of these advances for that reason. In the third advance planning program, where we only advance for preliminary plans rather than completed, we expect to get a very much higher return. Mr. BETTS. Thank you, sir. I always like to see the local communities fulfill their obligations. Mr. MULTER. Do you have any other witnesses or any other statement, Mr. Cole? Mr. COLE. I think not. Mr. MULTER. We appreciate your attendance before us, Mr. Cole, together with the other members of your staff. It is always a pleasure to have you with us. Mr. COLE. Thank you very much, sir. Mr. MULTER. The committee will stand in recess until 10 o'clock tomorrow. (Whereupon, at 12:43 p. m., Tuesday, May 24, 1955, the committee adjourned to Wednesday, May 25, 1955, at 10 a. m.) HOUSING AMENDMENTS OF 1955 WEDNESDAY, MAY 25, 1955 HOUSE OF REPRESENTATIVES, COMMITTEE ON BANKING AND CURRENCY, Washington, D. C. The committee met at 10 a. m., Hon. Brent Spence, chairman, presiding. Present: Chairman Spence (presiding), and Messrs. Brown, Patman, Rains, Multer, O'Hara, Mrs. Buchanan, Mrs. Sullivan, Mr. Fountain, Mrs. Griffiths, Messrs. Vanik, Davidson, Bell, Wolcott, Gamble, Talle, Kilburn, McDonough, Betts and Bass. The CHAIRMAN. The committee will be in order. Mr. HALLAHAN. The first witness is Mr. Floete, Assistant Secretary of Defense for Property and Installations. The CHAIRMAN. We are glad to have you with us, Mr. Floete. Mr. TALLE. Mr. Chairman, it is a pleasure for me to report that our witness, Mr. Floete, is from the State of Iowa, and we feel out there that he is one of the ablest officials in the Federal Government. STATEMENT OF HON. FRANKLIN G. FLOETE, ASSISTANT SECRETARY OF DEFENSE FOR PROPERTY AND INSTALLATIONS Mr. FLOETE. Mr. Chairman, and members of the committee, I have delivered to the clerk a series of charts, which are now being delivered to you. I would like to discuss this matter with your permission under three heads: A statement as to the requirements and needs for dependent military housing; a statement as to the methods we have considered to meet the requirement, and, thirdly, certain comments on the bill now under consideration before your committee. With your permission, I will read the first statement concerning the requirements, and then we can discuss the charts themselves in whatever detail you may wish. One of the most serious problems confronting our Armed Forces is the lack of adequate family housing for military personnel and their families. Today we must be ready for combat on short warning, and this requires that a large part of our operating personnel live on or near our installation. Our experience has also demonstrated that the morale and efficiency of military personnel are greatly affected by the quality of family living conditions. From the economic point of view, any increase in our reenlistment rate will result in substantial savings to the Government. More important, years of experience of incalculable value are saved to the armed services when trained personnel reenlist. Our surveys have shown that the reenlistment rate is much higher where there is good housing than where there is not. The experience shows that 80 percent of the officers in the Army and Navy are married, and 85 percent in the Air Force; among the enlisted men the general average is 20 percent married, and from those figures we develop the total gross requirement, based on the 2,859,000 military strength, projected as of June 30, 1956. Developed on the same basis, the requirement within the continental United States is for 538,000 units. To meet this requirement we have the following units available: Permanent public quarters, built from appropriations heretofore made by Congress, 32,600; certain Navy rentals, 17,000; Wherry units, generally known as title VIII, 78,800 units, and 11,600 units developed under Public Law 785, passed by Congress last year. That gives us a total of 140,000. Since our gross requirement in the United States was 538,000, this leaves a deficit of 398,000. However, we have not yet given credit for the number of units privately opened, which may be available. Admittedly, that figure is a difficult one to determine, because you actually know it accurately only when you go to the particular community, the community you are considering, and make a detailed survey. However, from our experience, we know that some figure around 45 or 50 percent of our deficit can be filled locally from privately owned dwellings, and we have used that figure, which we believe is conservative. The services feel that maybe our figures are too conservative. We admit that there is some variation, but we do not think it is major. Therefore, on that basis, we calculate that there are 218,000 units available from privately owned sources, leaving, therefore, a deficit in the continental United States of 180,000 units, broken down into 53,000 for the Army, 37,000 for the Navy, and 90,000 for the Air Force. In addition to this deficit in the continental United States of 180,000, there is a similar deficit of 11,000 in the territories and possessions, and 56,000 in foreign countries. The total worldwide deficit, therefore, is 247,000 units. In recent years the requirement has been augmented by the rapid increase in the size of our Armed Forces and the increase in marriage rates. Furthermore, adequate provision has not been made for replacement of deteriorated housing of wartime construction. The result is that the military personnel who are paid a monetary quarters allowance are forced to compete for houses in a highly competitive and inflationary civilian housing market. Much of the housing has been inferior and high rental rates have been prevalent. This does not mean, however, that the Government has been unmindful of its obligation to meet this humane requirement. It has encouraged and assisted civilian housing in providing housing through such statutory devices as the Wherry Act and other laws administered by the Federal agencies. These programs have been a substantial help in alleviating the shortage, but they have fallen far short of meeting the total needs. The family housing situation has grown so acute that it is imperative that a comprehensive program be inaugurated at this time. Such a program is needed not only as a significant moral factor, but also to end the cost of maintaining converted barracks and other temporary struc |