Mr. MUTLER. What is your objection to them being released? Mr. WHITLOCK. I am not concerned with that one instance. I am raising a question of broad policy. In this title you would be giving this very same type of administrator, who suppressed the statistics in 1946, and who, at the direct command of the Bureau of the Budget, released those statistics-although it was too lote to do any goodauthority to prepare and submit statistics on the progress being made. You would be giving him, under this act, a command to do that same thing. We are opposed to statistics being placed in operating agencies. We believe the statistics should be gathered and correlated in this Government by statistical agencies like the Bureau of the Census. Mr. MULTER. This section requires that they be publicized, that they be given to the Congress. Mr. WHITLOCK. We believe you should publish these statistics through the statistical agencies of the Government. Mr. COLE. How about the Bureau of Standards? Mr. WHITLOCK. The Bureau of Standards should cooperate in the research. Mr. COLE. Your point is you do not like the Administrator to develop the research and statistics? Mr. WHITLOCK. That is right. We are opposed to putting into an operating agency which has finance, has research, has loans, buys mortgages, and does all these things, such an authority. We believe that should not be the responsibility of an operating agency. We believe statistics and research should be kept by proper agencies of the Government. Mr. COLE. It might help them to propagate themselves. Mr. WHITLOCK. We have had proof of them helping to propagate themselves. In 1946 the Bureau of the Budget had to commend the NHA to release statistics, which they withheld because it interfered with the program they were proposing to this Congress. Mr. COLE. Then you do not particularly object to research on the part of Government in housing? Mr. WHITLOCK. I have no objection to research by Government in housing, in cooperation with industry through proper agencies and set up in a cooperative way without involving and the misuse of funds, the smothering and suppressing of statistics. The experience we have had makes us very dubious of the broad powers you would be giving to this administrator without safeguards to protect one-fifth of the national economy. Mr. COLE. Then, your objection is to personnel rather than to principle. Mr. WHITLOCK. I am objecting to the principle. I believe that statistics should be gotten by the Bureau of Census. I believe research should be done with research organizations. And I believe finance transactions should be done by financial organizations. see no reason why one man, an administrator, or a housing agency operating in the housing field, should have these broad powers to disrupt one-fifth of our economy. Mr. Chairman, going on-and by the way, here again, we come to another question of the cost of this bill; on page 37, section 303, line 13, there is authorized to be appropriated such sums as may be necessary to carry out the purposes of this title. We do not know what those sums are. There is no one who can tell. But we know from experience in industry that research is very costly. We know that statistics and their gathering is very costly. This is one place where the appropriation procedure of Congress is required in order to undertake it, and they would have to come back to this Congress in order to get their appropriation. Mr. COLE. But nobody has told this committee whether it will be $50,000 or $50,000,000. Mr. WHITLOCK. No one has put any figure, to my knowledge, before this committee or the Senate or has ever stated on the floor of either House what the cost of this particular title III would be. We have found out that this is a $9,602,500,000 bill, but we do not know what these indefinite amounts are. Mr. BUCHANAN. Mr. Whitlock, will you furnish us a break-down of the figure that you use on page 3 of your statement? Mr. WHITLOCK. I will be glad to. In order to be absolutely impartial in this, because, of course, this has been a highly debatable point in the propaganda surrounding this particular bill, we went to a certified public accounting firm, Synder, Farr & Co., and asked them to give us a CPA analysis of the cost of this bill. I should like very much to file this and make it a part of the record, because it is a completely disinterested organization of certified public accountants, and may I point out that the grants and contributions which they have figured are $9,602,500,000, and they add this paragraph: In addition to the direct financial commitments, the Federal Government is committed to the expenditure of indeterminate amounts for housing research, under title III, technical services and research, under title VII, section 705, plans and specifications for suitable housing for paraplegic veterans, title VIII, section 802, part IX (3), administrative costs, losses on insurance commitments and direct loans authorized under the act. Due to the number of Government departments involved and the lack of adequate information on which to base an estimate, no attempt has been made to determine the probable cost of these items. Mr. MONRONEY. That is title VI? Mr. WHITLOCK. No; this is the entire bill. Mr. MONRONEY. No; but I am speaking about that last paragraph that you read. I presume that refers to our contingent liability under the $2,000,000,000 of title VI. Mr. WHITLOCK. Under title VI, title II, and title I, because you are touching all of those bills. Mr. MONRONEY. They did not figure that into the cost of this bill at all? Mr. WHITLOCK. Not at all. And they pointed out the placesMr. MONRONEY. Did they figure the interest rate on what the title VI loan originally is, plus the 20 years it has to run? Mr. WHITLOCK. No. They found that due ot the fact that the information was inadequate, they could not get from the Federal Housing Administration material with which to give any estimates on that. Mr. MONRONEY. But they do not figure the interest over the period of the title VI loan? Mr. WHITLOCK. I have extra copies of this if you would like to have them. Mr. BUCHANAN. I would like to have a break-down of the summary, as to where you get the figure of $9,602,000,000. Just a 1-page summary is all I want for the purposes of the record. Mr. WHITLOCK. The summary is in the document. The CHAIRMAN. Is there objection to the statement going in? (No response.) The CHAIRMAN. If not, the statement may be incorporated in the record. (The document referred to is as follows:) FINANCIAL COMMITMENTS OF THE UNITED STATES GOVERNMENT UNDER S. 866 AS PASSED BY THE SENATE Mr. DOUGLAS WHITLOCK, Chairman, Building Products Institute, Washington, D. C. SNYDER, FARR & Co., Washington 5, D. C., May 19, 1948. DEAR SIR: At your request, we have examined S. 866, as passed by the Senate on April 22, 1948, and referred to the Committee on Banking and Currency of the House of Representatives, for the purpose of determining the total financial commitment of the Federal Government under this bill. The direct financial commitments of the Federal Government, as specified in S. 866 and detailed in schedule attached hereto, are summarized as follows: Direct loans and credits_. Grants and contributions_ Total direct financial commitments___. $2,625, 000, 000 6, 977, 500, 000 9, 602, 500, 000 In addition to the direct financial commitments, the Federal Government is committed to the expenditure of indeterminate amounts for: Housing research (title III), technical services and research (title VII, sec. 705), plans and specifications for suitable housing for paraplegic veterans (title VIII, sec. 802, pt. IX (3)), administrative costs, losses on insurance commitments and direct loans authorized under the act. Due to the number of Government departments involved and the lack of adequate information on which to base an estimate, no attempt has been made to determine the probable cost of these items. Respectfully submitted. SNYDER, FARR & Co., By G. R. SNYDER. Financial commitments of the United States Government under S. 866 as passed Title of the bill by the Senate Direct loans Grants and contributions Title I, sec. 102: Authorizes the Reconstruction Finance Corporation to make loans to and purchase the obligations of any business enterprise for the purpose of providing financial assistance for the production of prefabricated houses, or prefabricated housing components, or for largescale modernized site construction. The total commitments for loans made and obligations at any one time shall not exceed. Title II, sec. 204: Authorizes the Secretary of the Treasury to purchase the capital stock Authorizes, with the approval of the President, an additional amount Title IV, sec. 710: Authorizes the Secretary of the Treasury to make See footnote, p. 783. Financial commitment so fthe United States Government under §. 866 as passed by the Senate-Continued Title of the bill Direct loans Grants and contributions Title VI, sec. 605: Authorizes the Authority to enter into 40-year contracts providing for annual contributions not to exceed $32,000.000 per annum for each of the years beginning July 1, 1948, July 1, 1949, July 1, 1950, July 1, 1951, and July 1, 1952 Title VII: Authorizes the Secretary of Agriculture, to assist in providing for dwellings, improvements and enlargement of adequate farms, to: Sec. 710: For the purpose of providing funds to make 33-year loans, to issue notes and other obligations, over a 4-year period, in an aggregate amount not exceeding. Sec. 711: In connection with loans made under Section 703, to make annual contributions for a 10-year period in the form of credits on the borrowers' indebtedness in the years beginning July 1, 1948, July 1, 1949, July 1, 1950, and July 1, 1951, aggregating not more than. Sec. 712b: To make grants under Section 704 over a 4-year period in an aggregate amount not to exceed.. Title VIII: To assist paraplegic veterans in acquiring suitable housing units with Total... 1 The United States Housing Act of 1937, as amended, provided for a maximum aggregate amount of notes and obligations that could be issued of $800,000,000. S. 866 converts this into a maximum amount that may be outstanding at any one time of $800,000,000. This authorization amounts to an additional commitment of $800,000,000. Mr. KUNKEL. Mr. Whitlock, as I understand it, that statement shows a definite amount where the certified public accountants have been able to calculate the definite amount? Mr. WHITLOCK. Yes. Mr. KUNKEL. Then, over and above the definite amount at which they arrive, they call attention to the fact that there are certain indefinite amounts which they cannot include because they do not have any data on which to estimate the cost; is that correct? Mr. WHITLOCK. That is correct. I might point out, while we are discussing this, that there is one point in this bill at which the language is so indefinite that it makes a difference in interpretation of $5,000,000,000. In order to be as conservative as we could as to the cost of this bill, we took the interpretation which leaves the amount at around $6,000,000,000 instead of $11,000,000,000, and I would like to point that out to you. On page 88 of this bill, under section 605, in which the annual contributions authorized for public housing are given, you will notice the language says: With respect to projects to be assisted pursuant to this act, the authority is authorized in addition to the amount heretofore authorized to enter into contracts on and after the 1st day of July 1948, which provide for annual contributions aggregating not more than $32,000,000 per year That means that there is a limit-July 1, 1948-of $32,000,000. Then it says which limit shall be increased by further amounts of $32,000,000 on the 1st day of July in each of the years 1949, 1950, 1951, and 1952. In the statement made on the floor the other day by Mr. Buchanan, he indicated that that was a $6,000,000,000 amount, meaning $32,000,000 for the years 1948, 1949, 1950, 1951, and 1952. The language says that in 1948 the limit shall be $32,000,000 per annum, which limit shall be increased by further amounts of $32,000,000. We question whether or not that can be interpreted to be $64,000,000 for the next 4 years. If it can be, it would make a difference of $5,000,000,000 in the liability created for contributions. In order to try to understand that, we began to look back at other places where the similar language was used, and we found-for instance, on page 61, and at the bottom of page 60-when we were going back to the question of slum clearance: To obtain funds for loan under this title the Administrator may, on or after the 1st day of July 1948, issue and have outstanding at any one time, notes or other obligations for purchase by the Secretary of the Treasury in amount not to exceed $10,000,000, which limit, on such outstanding amounts, shall be increased by $200,000,000 on the 1st day of July 1949, and by further amounts— that is not the limit and by further amounts of $200,000,000 on the 1st day of July in each of the years 1950, 1951, 1952, and 1953. In other words, where they had a similar situation, the language is different and lends itself to an interpretation of a $1,000,000,000 liability, but over here the limit seems to be increased and we cannot tell whether the interpretation is for ten billion four hundred and some million dollars or for six billion four hundred and something. Mr. BANTA. In other words, that might be interpreted as permitting an additional $32,000,000 each year? Mr. WHITLOCK. $32,000,000 in 1948, 1949, 1950; and so forth. Mr. WHITLOCK. It says the limit will be increased by $32,000,000 and the limit was increased in each of those years by $32,000,000. Mr. BANTA. If the limit were increased in each year by 32, the first year would be 32, the next 64, the next 96, and so on? Mr. WHITLOCK. Gentlemen, we are trying to point out-not to belabor that point too much-that here is ambiguous phraseology in this bill of 115 pages and 22,000 words, and if those of us have to try to live with this bill are able to find all sorts of interpretations for the language, loosely drawn, ambiguous, with broad powers and ambiguous phrases, we would not begin to know how the industry or the Administrator could live with it. If I may go on with the bill, I will turn to title IV. We have here, in title IV, this question of setting up of insurance for low-rental housing co-ops, and we raise this question: It is a question that this committee of Congress should consider in relation to the type of risk, and the possibility of heavy loss to this Government--although we realize the intention is to assist low-income families. Here you are setting up insurance on cooperative apartments, in which the occupants are to be the poorest risks. There is a serious question about the possibility of those apartments working out on any financial plan-I am not speaking of public housing now, but of cooperative apartments. Further, in this title, we have again the 95 percent basis which Mr. Foley in 1945 said would practically destroy the multibillion dollar financing of this Government if it were enacted. |