percent, and on the other hand, the net return to me had dropped approximately 20 percent below the previous year. Mr. WHITTEN. You are not able to develop information close enough to date to see what effect and influence it may have? Mr. BARNARD. We have the figure of the cumulative percent of payments to maturities as of December 31. It dropped to 87 percent. Of course, generally in this type of loan the repayment record is less on December 31 than on June 30, when it dropped from 92 to 87. It probably will go back in the last 6 months. Mr. LASSETER. That is at least a 6-percent drop. Mr. BARNARD. We might catch some of that up before June. RESULTS OF BETTER COORDINATION PRACTICES Mr. WHITTEN. Mr. Lasseter, we have tried to point out from time to time, and I think in doing so we are reflecting the feeling of the American people, that, because of the many agencies dealing with agriculture, frequently there is duplication rather than this separation of responsibilities and duties. I have personally thought that the Soil Conservation Service has done a wonderful job, but they have done it on such a close and detailed basis that we may reach the point where the funds are not available before we get the job done. Last year I tried to point out to you and your force that those people who were borrowing money, either in production loans or farm-purchase loans, are also affected by the PMA and the Soil Conservation Service. I know you have made an effort to send out to the field the request that they make full use of those. What has been the result? Have you been able to see a change in the picture? Mr. LASSETER. There has been a decided change. As you recall, I immediately acted upon the suggestions that came out in the hearings last year. Our field people tell me that we have made more strides in good farming and taking advantage of all these programs in the last 8 months than we have made by far in any comparable period. There is only one adverse factor that entered into it. As we were working to get leveled out to arrive at a 100 percent job in this field when this disaster loan program came in. That has deflected us considerably from our regular work of following up our regular borrowers and giving them the help and supervision to see to it that they did take advantage of all these other programs. If that situation had not arisen I think we could have given you a much better report on that. I know my people will back me up in it. It is one of the best things that ever happened to us, to have that called to our attention up here officially, and I assure you we took advantage of it. Mr. HORAN. Mr. Bertsch here has been close to this. You will have to have that sort of coordination in the settlement of the Columbia Basin. Mr. LASSETER. That is right. Mr. HORAN. The things to be done are of such a nature that you will have there a pretty good clinic, will you not? Mr. LASSETER. Yes. Mr. HORAN. To test out the chairman's request there. Of course that will not come for a year or two yet, but there is so much to be done and coordinated that it will have to be very closely associated. Mr. LASSETER. I agree with that. Unless our borrowers take the full advantage of these programs I do not think they will have a chance. Mr. WHITTEN. I will say this: Unless they do take advantage of them and unless it is believed by your agency that they should, it raises a serious question of whether Congress is right in supporting these programs. If they are not valuable to another agency of the department, it would be hard for us to sell them to the average American farmer, would it not? Mr. LASSETER. I would go further than that. If I do not insist on that I am falling down rather badly. Mr. BRASWELL. During the past year we have instituted a progress report for all operating loan borrowers. One of the major items on which we are obtaining information is the extent to which borrowers participate in the program of other agencies. We have been particularly interested in such things as participation in soil conservation, production and marketing administration, and other related programs. We intend to find out by actual measurement whether or not they are doing the things that the other agencies are recommending as being beneficial. That will enable us in any State or section of a State to determine where our weaknesses lie and if they are of major importance we can correct them immediately. That is something we did not have until this past year. Mr. WHITTEN. I am glad to hear that, although we expected such cooperation from your agency when this was raised last year. We are glad we are obtaining it and we hope beneficial results will come from it. The question has been arised as to whether your loans and grants could not be handled by borrowing authorization such as the committee changed your other appropriations to last year. Could that be done or is it better to leave it as it is? Mr. ROBERTS. The loan part of it could be, Mr. Chairman, but the grant funds would have to be appropriated. Mr. WHITTEN. That was my thought when it was called to my attention. It is only the loan part that could be handled in that way. The grants would be a charge against the Treasury the minute they were made. Mr. ROBERTS. That is correct, sir. LANGUAGE CHANGES Mr. WHITTEN. I would like for you to briefly discuss the language changes, Mr. Lasseter. Mr. LASSETER. Mr. Barnard, will you do that? Mr. BARNARD. We have several, Mr. Chairman. (Discussion off the record.) Mr. WHITTEN. I will ask the budget officer to put that in the record. (The information referred to is as follows:) The estimates include proposed changes in language as follows (new language in italics; deleted matter enclosed with black brackets): "[For expenses necessary, including personal services in the District of Columbia, to] To carry into effect the provisions of titles I, II, and the related provisions of title IV of the Bankhead-Jones Farm Tenant Act, as amended (7 U. S. C. 1000-1032), the Farmers' Home Administration Act of 1946 (7 U. S. C. 1001, note; 31 U. S. C. 82h; 12 U. S. C. 371; 35 U. S. C. 535; 60 Stat. 1079, 1080); the Act of July 30, 1946 (40 U. S. C. 436–439) [, and] ; the Act of October 19, 1949 (Public Law 361); the Act of August 28, 1937, as amended (16 U. S. C. 590r590x, 590z-5), for the development of facilities for water storage and utilization in the arid and semiarid areas of the United States; and the provisions of title V of the Housing Act of 1949 relating to financial assistance for farm housing (Public Law 171, approved July 15, 1949), as follows: "Loans: For loans (including payments in lieu of taxes and taxes under section 50 of the Bankhead-Jones Farm Tenant Act, as amended, and advances incident to the acquisition and preservation of security of obligations under the foregoing several authorities): Title I and section 43 of title IV [(including payments in lieu of taxes and taxes under section 50), $15,000,000 of the Bankhead-Jones Farm Tenant Act, as amended, $20,000,000; title II of said Act, $85,000,000; the Act of August 28, 1937, [$3,000,000] $5,000,000: Provided, That not to exceed the foregoing several amounts shall be borrowed in one account from the Secretary of the Treasury on the request of the Secretary of Agriculture, at such rate of interest as may be determined by the Secretary of the Treasury, but not in excess of 3 per centum per annum; and the Secretary of the Treasury is hereby authorized and directed to lend such sums to the Secretary upon the security of any obligations of borrowers from the Secretary under the provisions of said Acts: Provided further, That the Secretary may utilize proceeds from payments of principal and interest under such Acts to repay the Secretary of the Treasury the amounts borrowed therefrom for the purposes of such Acts: Provided further, That for the purpose of making loans pursuant to [this paragraph] the foregoing authority, the Secretary of the Treasury is authorized to use as a public-debt transaction the proceeds from the sale of any securities issued under the Second Liberty Bond Act, as amended, and the purposes for which securities may be issued under that Act are extended to include such loans to the Secretary: Provided further, That repayments to the Secretary of the Treasury on such loans shall be treated as a public-debt transaction; and title V of the Housing Act of 1949 (except loans under 504 (b)), to be borrowed from the Secretary of the Treasury in accordance with the provisions of section 511 of said Act, $50,000,000, to remain available until expended. "Grants and loans: For grants for the purpose of section 504(a) and for loans under section 504(b) of the Housing Act of 1949, $5,000,000, to remain available until expended. "Salaries and expenses: For the making, servicing, and collecting of loans [, insuring] and insured mortgages, the servicing and collecting of loans made under prior authority, [and] the liquidation of assets transferred to Farmers' Home Administration pursuant to the Farmers' Home Administration Act of 1946, [$23,649,000] and the extension of financial assistance under the Housing Act of 1949, including personal services in the District of Columbia, $30,000,000, together with a transfer to this appropriation item of not to exceed [$40,000] $80,000 of the fees and administrative expense charges made available by subsections (d) and (e) of section 12 of the Bankhead-Jones Farm Tenant Act, as amended." The first and fourteenth changes merely alter the position in the text of the authority for incurring personal-service expenses in the District of Columbia. The second, eighth, eleventh, and twelfth changes represent minor editorial revisions necessary in order to conform with major changes in the language. The third change is proposed for the purpose of including reference to the act of October 19, 1949 (Public Law 361), authorizing loans, under the provisions of the Bankhead-Jones Farm Tenant Act, as amended, and the act of August 28, 1937, as amended, to homestead entrymen on public lands or contract purchasers of other lands of the United States in reclamation projects. The fourth, ninth, tenth, and thirteenth changes are proposed to include reference to financial assistance for farm housing, authorized in title V of the Housing Act of 1949 (Public Law 171, approved July 15, 1949). It is proposed that this activity be carried as part of this appropriation item in 1951. The proposed * * * language would make the amount of $50,000,000 to be borrowed from the Secretary of the Treasury for loans, and the amount of $5,000,000 to be appropriated for grants and loans, available until expended. This is in accordance with the provisions of section 511 of the act which provides that "The Secretary may issue notes and other obligations for purchase by the Secretary of the Treasury in such sums as the Congress may from time to time determine to make loans under this title (other than loans under section 504(b)) not in excess of $25,000,000 on and after July 1, 1949, an additional $50,000,000 on and after July 1, 1950, an additional $75,000,000 on and after July 1, 1951, and an additional $100,000,000 on and after July 1, 1952 Section 513 of the act provides "There is hereby authorized to be appropriated to the Secretary * * $2,000,000 for grants pursuant to section 504(a) and loans pursuant to section 504 (b) on and after July 1, 1949, which amount shall be increased by further amounts of $5,000,000, $8,000,000, and $10,000,000 on July 1 of each of the years 1950, 1951, and 1952, respectively The previous language contained in the Supplemental Appropriation Act, 1950, limited the availability of the amount to be borrowed from the Secretary of the Treasury for building loans to June 30, 1953, and the amount appropriated for grants and loans to the one fiscal year. The fact that grants for minor repairs and improvements and loans for enlargement and development from appropriated funds are generally made in connection with building-loan assistance from borrowed funds makes it essential that the two funds be available for the same period of time. * The fifth change is proposed to make clear that "advances incident to the acquisition and preservation of security of obligations" can be paid from loan funds as a recoverable charge against the borrower or as a capitalized charge against the security in those cases where security property is acquired by the Government. Occasionally the Government acquires real property or chattel security through foreclosure, voluntary liquidation, or otherwise, and certain expenses, such as minor repairs and improvements prior to resale, recording fees, etc., are incurred. This change will specifically authorize the payment of these advances as well as the payment of taxes and payments in lieu of taxes previously authorized, from loan funds, thus nullifying the implication that salaries and expenses funds are to be available for payment of these recoverable costs as a part of the expense of "making, servicing, and collecting of loans." The sixth change deletes the phrase "(including payments in lieu of taxes and taxes under section 50)" included in the amended language under the fifth change. The seventh change is merely to clearly identify titles I and II as being a part of the Bankhead-Jones Farm Tenant Act, as amended. The fifteenth change is proposed to raise the authorized amount to be transferred to this appropriation from the Farm Tenant-Mortgage Administrative Fund from $40,000 in 1950 to $80,000 in 1951. The actual amount transferred in 1950 is $30,000 or a reduction of $10,000 under the estimate. Administrative expense charges on outstanding insured loans and on loans to be insured in 1950 are expected to be about $80,000 in 1950 available for transfer in 1951. Insert on the last line of page 367 (a) of the committee print the following new italicized language: "Loans: For loans * * : Title I and section 43 of Title IV of the Bankhead-Jones Farm Tenant Act, as amended, $ of which not to exceed $5,000,000 may be distributed to States and Territories without regard to farm population and prevalence of tenancy, in addition to the amount otherwise distributed thereto, for loans in reclamation projects and to entrymen on unpatented public land." This change proposes that the language submitted in the budget be amended to insure that the amount of $5,000,000 included in the estimate for settlers on reclamation projects can be made available to those States in which such reclamation projects are located and for the purposes intended. The need for this change in language has become apparent since the printing of the budget, and therefore does not appear in the committee print. The inclusion of this language is recommended after informal discussion with the Budget Bureau. The budget estimates include an increase of $5,000,000 for farm-ownership loans under title I of the Bankhead-Jones Farm Tenant Act, as amended, to provide loan assistance to homestead entrymen, contract purchasers of Government lands and others on reclamation projects. Extension of assistance to settlers not previously eligible on reclamation projects was made possible by enactment of Public law 361, Eighty-first Congress, which provides that loans to homestead entrymen and contract purchasers of Government lands in reclamation projects may be secured by a first mortgage on the land. Public Law 361 further provides that the first installment on such loans or any other loan made under the Bankhead-Jones Farm Tenact Act, as amended, or the act of August 28, 1937, as amended, to the owner of a newly irrigated farm in a reclamation project may be deferred for a period of 2 years from the date of the first loan advance. In order to insure that the amount of $5,000,000 included in the estimate for settlers on reclamation projects can be made available to those States in which such reclamation projects are located and for the purposes intended, it is necessary that this amount be excepted from the distribution formula contained in the Bankhead-Jones Farm Tenant Act. Section 4 of title I of the Bankhead-Jones Farm Tenant Act, as amended, provides that funds available for farm-ownership loans shall be distributed to States and Territories on the basis of farm population and prevalence of tenancy, except that there may be distributed to each State such amounts as are necessary to cover bona fide applications from veterans. This provision would require that the total amount of $20,000,000 estimated for farm-ownership loans in 1951 be distributed to States and Territories on the basis of farm population and prevalence of tenancy. Homestead entrymen and others on reclamation projects who are veterans could be extended loan assistance under this provision within the allocated total available in each State, and above the individual State allocations if bona fide veteran applications in other States were not sufficient to utilize the individual allocations to such States. Substantially all of the homestead entrymen on unpatented Government lands in the fiscal year 1951 will be veterans, but a large group of other settlers on newly irrigated lands in reclamation projects who have title to their lands are nonveterans. The apparent purpose of Public Law 361 is to extend assistance to both veteran and nonveteran settlers on reclamation projects. In view of the preference given veterans for farm-ownership loans, nonveteran settlers can only be assisted if sufficient funds above the amounts required for veterans can be distributed to those States in which nonveteran applicants reside. Mr. STIGLER. Mr. Chairman, I have been very much interested in the tabulation shown in the committee's justification with reference to collections made by Mr. Lasseter's organization, and I want to compliment him on the showing he has made. Taking into consideration all the money that has been loaned and the percentage of collections as shown, it is unusually high. As one member of the committee, I want him to know I appreciate the way he has handled this matter since we were together last year. Mr. LASSETER. Thank you, sir. DISASTER LOAN PROGRAM Mr. STIGLER. I would like to refer to disaster loans for a few moments, Mr. Lasseter. How much money do you have on hand now? Mr. LASSETER. We have actually loaned or committed between 10 and 12 million dollars. Mr. BARNARD. The figure is as follows: In the fiscal year 1949, starting the latter part of April, we loaned for disaster purposes $985,000; in this fiscal year through January 27, 1950, we have loaned $10,613,000. Mr. WHITTEN. I wonder, Mr. Stigler, if I might interrupt right there and ask Mr. Lasseter at this point to briefly describe his operations, the authority, and the amount of money. Also, page 377 of the committee print should be inserted at this point. Then we can pursue the detailed questions. |