Comparison of operatinb expenditures to business generated operating expenditures-Continued 1 Fiscal year 1937 figures cover known obligations incurred since July 1, 1936 plus cash disbursements since July 1, 1936 covering obligations incurred in prior fiscal years. 1 Includes home mortgages and large-scale housing mortgages accepted for insurance. Allocation from Reconstruction Finance Corporation_. Total___ Disbursements: Fiscal year 1935, Reconstruction Finance Corporation__. Total___. Unexpended balances: Disbursing officer's cash. Treasury cash_. $24, 000, 000, 00 245, 036. 22 1, 000, 000. 00 25, 245, 036. 22 5,711, 837. 55 245, 036. 22 999, 841. 41 11, 566, 859. 13 158.59 4, 621, 636. 53 23, 145, 369. 43 867, 544. 31 1, 232, 122.48 2,099, 666. 79 Unexpended balance, disbursing officer's cash_---- 7, 594. 11 The 1938 estimate as originally submitted to the Budget Bureau provided for $12,000,000 for the maintenance of the offices already established in Washington and throughout the United States. This estimate has been reduced to $8,500,000. If this is accepted as the final figure for the Federal Housing Administration, it will be necessary to materially curtail the field activities throughout the United States and to eliminate a large number of State offices in order to bring the expenditures within this minimum. It is believed that a program as new and as far-reaching as the Mutual Mortgage Insurance System would ordinarily take approximately 5 years before it is on a self-sustaining basis. If the number of field offices were reduced to a minimum merely because the volume of business has not yet been generated in sufficient quantities to cover the total operating expenses, it would involve a question of policy that extends to the basic purposes of the National Housing Act. To carry out such a policy fully at the present time would mean a reduction in field-office activities in areas where population is relatively scattered, as compared with the larger cities and metropolitan districts. That would retard the extension of the insured-mortgage system into the very communities where local funds are most scarce, and where the low charges and favorable terms of insured mortgages would bring the greatest relief to home owners. The appropriation language must be carefully drawn in order that it will not be subjected to adverse rulings of the Comptroller General and hamper the operations of the Federal Housing Administration. One of the problems of the Federal Housing Administration is that of inspection of property within the metropolitan area of the official station of the employees. Rather than to purchase and maintain government-owned and operated vehicles, it has been considered that a personally owned car was part of the equipment of an employee engaged in inspection work. Under the broad provisions of the National Housing Act the per mileage allowance of 4 cents was paid such employees for the inspection of property wheresoever located within or without the corporate limits of their official station. This has worked to the advantage of the Government without working any hardship on the employee. Employees who are not engaged in the inspection of property are governed by standardized Government travel regulations. This procedure of governing travel within and without the corporate limits of the official station of the employee was approved by the Comptroller General of the United States after carefully considering all of the factors involved ORGANIZATION AND WORK OF THE HOUSING CORPORATION UNDER TITLE I Mr. WOODRUM. We would now like you to make informally a brief statement on the Federal Housing Administration, its organization, problems, set-up, work, and future. You may make whatever reference you wish to the justification statement which has now been made a part of the record. Mr. McDONALD. Mr. Chairman, answering your inquiry as to the objectives of the Federal Housing Administration, its past work, and its future, I would say that the brief that has been submitted herewith appears to cover the ground briefly and thoroughly, and I subscribe to it. The Federal Housing Administration activities have covered a period of approximately 21⁄2 years. It was born as a result of the depression. The activities are roughly divided into two different types of work. One, known as title I, was a campaign of modernization and repair, to stimulate building recovery, put people to work, and was an emergency measure. The emphasis of the Administration was put upon that portion of the act immediately, because it was conceived that it could do more good more quickly than anything else. At the time of the passage of the act, there was no building construction or even repair going on any place in the United States. Neither had there been any repair work, it was estimated, for a period of 5 years, or something like that, and statisticians thought that they saw an enormous field for modernization and repair which would put a great number of people to work. Incidentally, the material used in doing that work would, in turn, at the factories where the work was being done, provide work for many other people; for instance, oil-burner material manufacture, roofing material manufacture. That would put a great many peo ple to work and that cycle would go on. Therefore, through the Federal Housing Administration Administrator, who at that time was Mr. Moffett, there was gathered a staff of men who came together largely with the idea of doing something for the country. His original staff of men were men who were not attracted by the salaries paid by the Government. He had such men as the vice president of the National City Bank, who was an expert in personal loans and credit. He also had with him the vice president of General Motors. Mr. WOODRUM. Could you give the names of those gentlemen? Mr. McDONALD. Mr. Roger Steffan, vice president of the National City Bank; Mr. Alfred Dean, vice president of General Motors; Mr. Paul Fitzpatrick, who was formerly Mr. NICKSON. He really started the personal-loan business in the United States. Mr. McDONALD. He was one of the founders of the Commercial Credit Co.; Mr. Flanders, who was also one of the founders of the Commercial Credit Co. and is still with us; Mr. George Buckley, a vice president of the National City Bank. There were several other men of that type and character. At that time very few banks, probably not over three or four hundred banks all over the United States, had ever made a business of personal long-term installment loans. The campaign which these men laid out was to get as many banks as possible to make loans for modernization and repair without collateral and over a long term of years, at comparatively a low-interest rate. So, at the same time, to put on a tremendous publicity campaign and cause in as many cities or towns as possible a local community campaign to be organized, to popularize the method of modernization and repair, and so forth. So these departments were organized. First, the bankers department, to educate the bankers in making that type of loan; secondly, to get the communities organied. And I must say that the people throughout the United States rallied to that with tremendous enthusiasm. Over 8,000 different community campaigns were started, and chairmen appointed who were the leading citizens in their respective communities. They were supplied with various types of literature by the Housing Administration, ideas of how to go ahead; speakers were furnished to them. They were told how to get the cooperation of the radio people, the newspapers, and so forth, and the thing went off with a big boom. That was done without regard to political affiliation; it was done without regard to politics, or anything of that kind. Every city of 10,000 in the United States had a chairman appointed and repair and modernization was the hue and cry. |