quick method of this reorganization plan, are based on conditions which are considered even by proponents of this measure to be temporary in nature.

The President, in submitting the plan to Congress, stated in the accompanying message:

I do not need to stress again at this time the urgent necessity of taking all possible measures to alleviate the present critical housing shortage * * * If the Government is to mobilize to fullest effectiveness our resources for dealing with the housing emergency, an indispensable step * * * is the establishment of a housing agency on a permanent basis.

There is a seeming inconsistency in arguing for permanent consolidation of these agencies on the basis of a purely temporary emergency situation. The powers granted to the Housing Administrator by Executive order and by the Veterans' Emergency Housing Act are ample, and considered by many people more than ample, to deal with the present temporary housing emergency. When the House of Representatives first passed the Veterans' Emergency Housing Act of 1946 it set June 30, 1947, as the termination date, later extended to December 31, 1947, by the conference committee.

That is recognition of the temporary character of the emergency. In further justification of this permanent reorganization, the President's message states

* * * It (National Housing Agency) is not infrequently looked upon as an organization which, now that peace has come, may be abolished in the relatively near future. This has made for uncertainties which have inevitably placed the National Housing Agency at a disadvantage. In order that it may proceed on its program with the fullest confidence that it has a position equivalent to that of any other permanent Government agency, its organization should be confirmed at the earliest possible date.

To say the least, this is a highly rationalized argument. No specific example of the alleged "disadvantage" has been advanced. The fact of the matter is that all the components of the National Housing Agency which are essential to the execution of the emergency housing program are permanent units. These are the Federal Home Loan Bank Administration, the Federal Housing Administration, and the Federal Public Housing Authority. All these organizations have worked in a fine spirit of cooperation; and if the housing program is not moving at the rapid rate for which early hopes were entertained, the principal reason is the shortage of building materials. There is nothing in the proposed reorganization plan which would in any way facilitate increased production of those short-supply materials. That has been taken care of, in part at least, by the Veterans' Emergency Housing Act, to which I have previously referred.

Title I of the pending Wagner-Ellender-Taft bill, officially desig nated as the General Housing Act of 1946, would effect this permanent consolidation by regular legislative process; it passed the Senate on April 15 and is now pending in the House of Representatives. Since many objections to title I have been voiced, and since there is some doubt as to speedy enactment of the Wagner-Ellender-Taft bill by the House in its present form, this action of the President in seeking to effect such consolidation under the Reorganization Act has the appearance of an attempt to rush a highly debatable matter through Congress without adequate consideration by that body.

Objections to the proposed permanent consolidation, in whatever manner it might be effected, are twofold:

1. Under the proposed merger, a single administrator would have authority over the home-financing functions of the Federal Home Loan Bank Administration, the mortgage-insuring functions of the Federal Housing Administration, and the loan and grant functions of the Federal Public Housing Authority. The commissioners of these several constituent agencies would be reduced to the status of deputy administrators. The politically appointed Administrator would thus exercise a power over housing finance as great as, or even greater than, the power of the Federal Reserve Board over the commercial banking system.

You will understand the Home Loan Bank System and member institutions have assets of $6,000,000,000, the Federal Housing Agency has mortgage insurance outstanding of over $6,500,000,000. That is a tremendous amount of private fund savings of the people of this country; and to date, as far as I know, no private or public institution with any such assets has operated under the direction of a single individual.

Critics of the title I proposal urged strongly that in any such consolidation the policy-making function should reside in a governing board; it has been suggested that such board should include the heads of the several constituent agencies of the National Housing Agency and representatives of the Veterans' Administration and the Department of Agriculture, both of which agencies have important homefinancing functions.

2. A second objection is to the consolidation of the Federal Public Housing Authority, which functions in the field of subsidized public housing, with the other two agencies which have to do with facilitating private housing finance. Many people consider it preferable that the Federal Home Loan Bank Administration and the Federal Housing Administration be restored to their former status as constituent parts of the Federal Loan Agency, and that the Federal Public Housing Authority be made a part of the Federal Security Agency. Summarizing the position of the Commerce and Industry Association of New York, I would state that:

1. We believe that a concurrent resolution should be adopted by both Houses of Congress, disapproving of Reorganization Plan No. 1 of 1946 as it relates to the establishment of the National Housing Agency as a permanent body because: First, there is no justification for creation of a permanent body to treat with a temporary condition; and

Second, the various component units of the National Housing Agency, when permanently reassigned, should not be incorporated in the same agency because the Federal Housing Administration and the Federal Home Loan Bank Administration are engaged in activities entirely unrelated to those of the Federal Public Housing Authority; and

Third, no one administrator should have the tremendous permanent powers which this reorganization plan would confer; and finally if Congress vetoes by joint resolution this consolidation feature of Reorganization Plan No. 1, the consolidation proposal can be considered by the House of Representatives as title I of the proposed General Housing Act of 1946, the Wagner-Ellender-Taft bill. This bill has been referred to the House Committee on Banking and Currency, which committee could take ample time to consider the objec

tions to the proposed consolidation in connection with the long-range measures proposed in the other 10 titles of that bill.

It may appear somewhat odd to request the Senate to vote disapproval of permanent consolidation of these housing agencies under Reorganization Plan No. 1 when the Senate has already approved such consolidation by passing S. 1592, the Wagner-Ellender-Taft bill. However, there are strong reasons for believing that the Senate passed S. 1592 under the impression, deliberately created by advocates of that measure, that its enactment was essential to the temporary housing emergency, which is not in accordance with the facts. It is also apparent that the Senate was persuaded into hasty action by having accepted as factual what was actually an exaggerated picture of the present housing situation and an erroneous picture of the longrange housing needs of the country.

Important facts on the housing situation have been published by the Census Bureau itself since the Senate passed S. 1592, facts which are sharply at variance with public statements previously made in support of that measure.

This report of the Census Bureau was published May 16, 1946, 31 days after the Senate passed the Wagner-Ellender-Taft bill. The report was based on a spot survey of housing conditions made in November 1945. That survey showed a very substantial improvement in housing conditions in this country between 1940 and 1945, in spite of the handicaps of war conditions. It showed sizable increases in the number of dwelling units, in the proportion of the total having running water, private baths and toilets, central heating, and electric wiring. It showed a substantial reduction in the proportion of dwelling units needing major repairs. It showed less overcrowding in November 1945 than in April 1940. In short, the statements made by about the amount of substandard housing in this country, previous to passage of this bill by the Senate, have been proved to be unrealistic and erroneous by this census report.

Yet 2 months previous to the belated publication of this report, and a month previous to passage by the Senate of S. 1592, Mr. Chester Bowles said in a radio speech, on March 16, 1946:

Naturally, the condition of our homes got a lot worse during the war-meanwhile the 7,000,000 substandard units grew to 101⁄2 million.

The census report showed a trend directly the opposite of that indicated by Mr. Bowles' statement. It showed that only 4.3 millions of occupied dwelling units were in need of major repairs in November 1945, as compared with 6.3 million in 1940. Mr. Wyatt also used in public statements the same erroneous and misleading figures I have quoted from Mr. Bowles' statement. It is not charged, sir, that these gentlemen had personal knowledge of the essential falsity of their statements at the time they were made.

However, emergence of these facts which are in conflict with earlier statements which gave an inaccurate picture of the country's housing situation, indicates strongly that time should be given to the House of Representatives to give adequate and extended study to the WagnerEllender-Taft bill. Adequate time cannot be afforded to the House for such study if the President succeeds in legislating title I of the act under the guise of a reorganization plan. I strongly urge that the Senate join with the House in voting positive disapproval of that

part of Reorganization Plan No. 1 which would make NHA a permanent agency.

Senator HUFFMAN. Did you mean to imply that the House has voted on Reorganization Plan No. 1 and do you mean the Senate should join with the House in this approval?

Mr. HOLDEN. Yes, it must be disapproved jointly. I understand the House has not acted as yet.

Senator HUFFMAN. That is my understanding as well.

Mr. SOURWINE. Mr. Holden, can you make it clear whether you are opposing plan No. 1 on the grounds that it is illegal or on the grounds that it is administratively unwise?

Mr. HOLDEN. I am opposing it on the grounds that it is administratively unwise. I am not a lawyer and do not feel competent to pass on the legality of it.

Mr. SOURWINE. You stated, that to date, no corporation with large assets as the Home Owners' Loan Corporation has operated under a single individual. Has not the Home Owners' Loan Corporation been operating under a single individual since Executive Order 9070 became effective?

Mr. HOLDEN. I said nothing that large by any such combination of such organizations.

Mr. SOURWINE. Have not the component parts of this combined organization been operating under a single individual as a controlling head since Executive Order 9070, which set up the National Housing Agency?

Mr. HOLDEN. I believe it was before that, the Home Loan Bank System and the Home Owners' Loan Corporation operated under the Home Loan Bank Board. The effect of that Executive order as I understand it, was practically to eliminate the Board. I do not think the fact that that was done in wartime makes it desirable to continue it as a permanent arrangement for peacetime.

Mr. SOURWINE. I was not attempting to put words in your mouth, but simply to let the record show that for a period of some 2 years these agencies have been operating actually under a single head. Have you any complaints about the operation under that single head during the past 2 years, since Executive Order 9070 was approved? Mr. HOLDEN. The operations during that period have been wartime operations, sir, and had to do with the wartime conditions, which were emergency conditions. We had to deal with the housing needs of the war period by special measures, by priorities, special financing, and so on. I do not think those wartime conditions exist today. We have a new type of emergency situation which I believe is going to pass in a comparatively short time. The effort to continue something that was regarded as necessary under emergency conditions to peacetime with long-range commitments by Congress, I think is bad, administratively, and not in the public interest.

Mr. SOURWINE. The point you are making is not necessarily that the operations of these agencies under a single head has been bad as an emergency measure, but you anticipate it would be bad administratively as a permanent peacetime measure?

Mr. HOLDEN. Yes; indeed.

Mr. SOURWINE. Apparently from your statement you have serious objections to the placing of a single control over public housing and over Government's aid to private housing, is that correct?

Mr. HOLDEN. I would not say that I feel strongly in that particular. I feel there are two ways in which this reorganization plan might take place. One which is indicated, which is the view of many people, is that the agencies having to deal with private finance are more closely related to the other Government lending agencies than they are to the public housing, and properly belong in a coordinated group of financial agencies. I personally would not object to consolidation of public housing agencies with these others, provided there were a wellconstituted policy-making board to direct the affairs of such agency, so that there is a balance of opinion as to the different phases of your housing finance and a division of authority among a number of individuals whose backgrounds would vary, so you would get policy determinations which would inspire more confidence than if they were made by a single individual governing all of these different institutions.

Mr. SOURWINE. What you object to is not consolidation, but coordination under a single head?

Mr. HOLDEN. Yes, I think that any institution as big as this proposed consolidated institution deals with the peoples' savings should be put under the direction of a well-selected board and not under any individual, I do not care who the individual might be. If I were to be the administrator, I would beg Congress to give me a board to share the responsibility with me for such a large undertaking.

Senator HUFFMAN. Is that your suggestion, Mr. Holden, that the Federal Public Housing Authority be made a part of the Federal Security Agency?

Mr. HOLDEN. There is one suggestion that has been made, sir. If it is determined that that is not desirable, to consult with the agencies dealing with private housing finance, a logical place to put the Federal Public Housing would be with a security agency. Public housing is a social welfare enterprise. The other is a matter of directing, assisting and coordinating the private mortgage finance. The motivating power in the making of decisions with regard to finance, loans, and all the rest, are quite different in the case of one, private financing, and in the case of a social welfare program.

Senator HUFFMAN. Are there any further questions? The next witness is Guy T. O. Hollyday, of the Mortgage Bankers Association of America.

You may proceed, Mr. Hollyday.

STATEMENT OF GUY T. O. HOLLYDAY, VICE PRESIDENT AND CHAIRMAN OF THE EXECUTIVE COMMITTEE, MORTGAGE BANKERS ASSOCIATION OF AMERICA

Mr. HOLLYDAY. My name is Guy T. O. Hollyday and I live and have my offices in Baltimore, Md. I am president of the Title Guarantee & Trust Co. of that city. I appear as vice president and chairman of the executive committee of the Mortgage Bankers Association of America. Our association was organized in 1914 and our membership consists of life insurance companies, commercial banks and trust companies, mutual savings banks, mortgage companies, title companies, and mortgage loan correspondents.

We deal daily with the Federal Housing Administration and we have a direct interest in proposals which will modify or rearrange our relationships with this Agency.