we are firmly in favor of the public housing features of this bill and past bills.

Mr. WIDNALL. Public housing, if it is poorly planned, means only that you were just relocating slums-how is that a good thing? This involves good planning, just as much as you would have to have good planning for a cultural center, a commercial redevelopment area here and there. Anybody can pin down blocks and put them on a plan.

Mr. WISE. You are making an assumption that I am not prepared to make, that public housing is bad planning. Good, properly planned public housing, in a total context of the approach comprehensively to the needs of the community is good planning. And there are many good examples of that kind of planning.

Mr. WIDNALL. The point that I am trying to make is that I believe. that public housing officials themselves, the authorities and the administration, will admit that in a great many of these projects mistakes have been made in public housing, and that an entirely new concept is required. And they have not improved conditions, many of them feel. And I think that certainly planning is needed, but planning with respect to human needs is extremely important.

Mr. WISE. It is.

Mr. WIDNALL. And this is not a case of we are going to have rural houses here and something else there.

Mr. WISE. I agree with you.

Mr. WIDNALL. I am a little bit afraid of this new proposal for creating new satellite communities throughout the country. I think it will make a czar of one man, and that you will not be able to do anything by way of development unless you clear it with Washington and this will be completely destructive, to my way of thinking, of private enterprise initiative, creative effort on the part of individual builders of individual units.

Mr. WISE. May I respond to that, Mr. Widnall?

Mr. WIDNALL. Yes.

Mr. WISE. Over the last 2 years I have been actively engaged in planning for the State of New York, dealing with the development of a comprehensive plan. I pointed out in my testimony that in that small area of New York City it is expected that by 1985 to add another 6.1 million people to that area. Between 1950 and 1960 the population of the city of New York decreased by 200,000 people— it decreased by a million white and increased by 400,000 colored and 400,000 Puerto Rican families.

Mr. WIDNALL. That was due largely to the welfare program that was attracting the poor, and it kept the poor there in the city, did it not? You could get on relief in 24 hours?

Mr. WISE. On the contrary, I think it was largely due to a lack of housing opportunities in Suffolk and Westchester and Rockland Counties and other areas surrounding the metropolitan city of New York. As it was a matter of housing opportunities and welfare laws administered by the State of New York and by the State of New Jersey these are uniform generally throughout those areas. They had to locate. If I may finish, about the 6.1 million people that we affect in the city of New York, if it continues to lose population because of its deterioration between now and 1980, it will take 8 million people in New York metropolitan area. If you based that upon the present building pattern in that area where it is one-half and 1-acre, and

4-acre lots, as you get outside of the city of New York, you may well have to develop and urbanize totally all of the land between Riverhead and Poughkeepsie and the like. That is an enormous amount of area.

We have had under very serious consideration in the planning program for the State of New York the encouragement of new communities in order to concentrate effectively this massive population that is coming to the urban areas to provide an adequate decent school system and the like, to concentrate on our highway work, to provide a reasonable amount of housing opportunity. And the alternative we think is going to be a spread of single-house subdivisions at extraordinary costs. That will be in the cost of sewering and water, in providing bus service for the children to schools, and all of that kind of spread of development cost.

And I think the bill before you in the new community part of it gives the States and the counties in these new communities some leeway. And this must be done within the context of a local agency regional development plan. It gives them the opportunity to begin to call their own shots with regard to the way that the vast metropolitan area is being developed and contrasting it in a way with a lot that was done between 1950 and 1960 with tremendous sewer and water bills paid out in Suffolk County.

Mr. RAINS. I suggest that the committee go into recess until 2:30 o'clock this afternoon because we have two more witnesses.

Mr. McDADE. Am I the only one that wishes to inquire?

Mr. RAINS. There are others who would like to inquire. So if you can come back at that time, we shall proceed with you. Can you come back at that time?

Mr. WISE. I will be delighted to.

Mr. RAINS. The committee will stand in recess until 2:30 o'clock this afternoon.

(Whereupon, at 12:15 p.m., the subcommittee was in recess, to reconvene at 2:30 p.m. the same day.)

AFTERNOON SESSION

2:30 p.m.

Present: Representatives Rains (presiding), Mrs. Sullivan, Ashley, St Germain, and McDade.

Mr. RAINS. Mr. Wise, will you take the stand, please?

Mr. WISE. Yes, sir.

STATEMENT OF HAROLD F. WISE, ACCOMPANIED BY ROBERT L. WILLIAMS Resumed

Mr. RAINS. The committee is in session and the gentleman from Pennsylvania, Mr. McDade, has a question.

Mr. McDADE. Mr. Wise, I just wanted you to clarify for me, if you will, the example that you set out on page 3 beginning roughly with paragraph 3 and thereafter.

You relate generally the construction of what is apparently a residential area development that has no sanitary sewer systems. I hope these houses had septic tanks. Did they?

Mr. WISE. They certainly did.

Mr. McDADE. Well, I did not understand quite what the point is

here.

What point are you making here? Are you saying that-it certainly is not a responsibility of the Federal Government to look into such situations as this. I do not quite understand the import of this. Mr. WISE. Then I will be glad to explain it to you, Mr. McDade. It is normally, without any question, a function of local government to provide for the collection and disposal of sanitary sewage and the provision of clean water.

In the case of Suffolk County, that I have quoted here at some length, the population pressures were such and the ability to finance out track subdivisions were so organized and local governments kept approving subdivision after subdivision, initially with septic tanks and, secondarily, and then the next one and the next one, and the next one, to the point, where it became a very major health problem.

Now, there is not any danger of epidemics in Suffolk County today, but the local health officers in the State of New York, in their public health environmental health departments are very much concerned that the time has long since passed when the holding capacity of the soils will be exceeded or have been, and that it is now time for putting in a sanitary sewer system.

The real problem is that if they had anticipated this beforehand it would have been much more economical.

Mr. McDADE. Do you know, from your own knowledge, whether in this development the streets had been paved by the local municipal entity?

Mr. WISE. As a part of the subdivision process, for the most part all the streets were paved, yes.

Mr. McDADE. And if it is done, as it is in Pennsylvania, I certainly assume that the tax burden was placed upon the properties, the burden of constructing the streets and the curb lines and

Mr. WISE. There is no question about that.

Mr. McDADE. Well, I just do not understand the reason or it seems to me to be a real lack of insight there.

Certainly, the community

Mr. WISE. You got the point.

Mr. McDADE (continuing). The community can certainly gain tax revenue also from the installation of sanitary sewers, can they not? Mr. WISE. Well, the point is that after all of the subdivisions were there and there became pressure for domestic sewer systems what is the normal way to deal with it?

And that is to have a bond election, and when you have that everybody individually has a fairly individual function and they will be mortgaged to the hilt with the FHA, and they usually vote the bond issue down.

Where does this leave the State of New York? It leaves the State of New York, which has an environmental sanitary health enforcement responsibility, in the position of saying that the people won't build them there, so "we are going to have to provide the funds from the State of New York."

Now, in the State of Michigan

Mr. McDADE. Before we get to Michigan, where would you have the Federal Government intervene in a situation like this?

Mr. WISE. I would have it intervene specifically and directly in terms of this act, H.R. 9751, which expands considerably the provisions of the community facilities administration and, in fact, have recommended in my testimony that this be liberalized even further than this bill provides by making low cost long-term loans available to localities for the planning and construction of sewer and water facilities in advance of development.

This is the economical way of doing it. In the long run there is no question that the bill will still be paid by the locality, but the provisions are to be provided beforehand and not afterwards.

Mr. McDADE. I have no further questions at this time, Mr. Chairman.

Mr. RAINS. Any further questions?

Mr. McDADE. I am through, Mr. Chairman.

Mr. RAINS. Any questions?

Mrs. SULLIVAN. No questions, no, Mr. Chairman.

Mr. RAINS. Well, thank you, Mr. Wise. You have made a good witness.

Mr. WISE. Thank you.

Mr. RAINS. At this point in the record I would like to include a letter from the American Council on Education having to do with college housing, in which there is a suggested amendment to section 404 of the Housing Act, suggesting that it be amended so that the cost of either movable or fixed equipment, furniture, and furnishings, except expendable items, be included in the development costs.

I cannot see any objection to that. Dormitory furniture and equipment is clearly a special case and would remain part of the security. So I hope that we can put such an amendment in the bill to include that.

(The letter referred to follows:)

AMERICAN COUNCIL ON EDUCATION,

Hon. ALBERT RAINS,

OFFICE OF THE PRESIDENT, Washington, D.C., February 6, 1964.

Chairman, Subcommittee on Housing, Committee on Banking and Currency, U.S. House of Representatives, Washington, D.C.

DEAR MR. CHAIRMAN: As you are well aware, there are few programs which have been more beneficial to the broad community of higher education than the college housing program. It has been of inestimable value to almost all of our colleges and universities as they have sought to meet the needs of increasing numbers of young people.

There is, however, one way by which the program might be made of even greater value. In 1951 the Comptroller General ruled that movable furniture and equipment for buildings constructed under the Housing Act of 1950 might not legally be charged to title IV funds. This ruling has led to considerable difficulty, for it has required institutions either to borrow money from other sources to pay for such furniture and equipment or to design buildings with built-in fixed furnishings. This has inevitably led to greater expense in the financing of college housing and dining hall projects or to denying architects the flexibility of design which would give these buildings the greatest possible utility. As a matter of fact, in the case of heavy kitchen equipment, for example, it is difficult to distinguish between what is fixed and what is movable.

I respectfully suggest that section 404 (c) of the Housing Act of 1950 be amended so that the cost of either movable or fixed equipment, furniture, and furnishings, except expendable items, be included in the development cost. This provision would be in keeping with both the loan and grant provisions of the recently enacted Higher Education Facilities Act of 1963. It is our belief that such an amendment would add little to the demand for funds, since at the pres

ent time many participants in the program are using fixed equipment, in spite of the fact that it is not always economically desirable. On the other hand, the amendment might well permit greater economy of design.

We should be happy to suggest specific language for such an amendment if this seems to you desirable. Sincerely yours,

LOGAN WILSON.

Mr. RAINS. Our next witness is Mr. Harry Held, senior vice president of the Bowery Savings Bank of New York City.

Come around, Mr. Held.

STATEMENT OF HARRY HELD, SENIOR VICE PRESIDENT, BOWERY SAVINGS BANK, NEW YORK CITY; ACCOMPANIED BY DR. SAUL B. KLAMAN, DIRECTOR OF RESEARCH; AND ROBERT R. POSTON, DIRECTOR-COUNSEL OF THE WASHINGTON OFFICE, ON BEHALF OF THE NATIONAL ASSOCIATION OF MUTUAL SAVINGS BANKS

Mr. RAINS. I do not think you need any introduction to this committee, but I would like for you to introduce your associates, Mr. Held. I know them well but some members may not.

Mr. HELD. Well, my associates are Dr. Saul B. Klaman, who is the director of research of the National Association of Mutual Savings Banks, and Mr. Robert R. Poston, who is director-counsel of the Washington office of the National Association of Mutual Savings Banks, which represents the savings banks in the United States.

Mr. RAINS. We are delighted to have you and we are delighted to have your distinguished compatriots with you.

I think we ought to state for the record that we are pleased beyond measure to see Mr. Poston in his new position and I would like for the record to show that even though it may not get him a dollar increase in his salary, that he is a very influential man with this committee.

You may proceed, Mr. Held. We are delighted to have you.
Mr. HELD. Thank you.

I will skip the first page and mention, however, that our comments on this bill, H.R. 9751, will be limited to the areas of mortgage insurance particularly for land development and urban renewal.

Mr. RAINS. Before you skip that first page, I had underscored two lines that I would not pass by without special comment.

The bottom of the first paragraph contains the statement:

In each of the past 10 years, savings banks have placed more funds in FHA and VA loans than any other type of lender.

That is a real compliment. We want to be sure to emphasize it. That is quite an accomplishment, Mr. Held.

Mr. HIELD. Thank you very much.

Mr. RAINS. Now you may proceed.

Mr. HELD. Beginning on page 2: Section 201 of the bill provides for a new title X in the National Housing Act authorizing FHA to insure mortgage loans for land acquisition and improvement and for installation of various facilities necessary for subdivision sites and for complete new communities. One can hardly disagree with the basic purposes of these far-reaching proposals to achieve wellplanned, sound, and official land use patterns in subdivisions and com