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established by the census. The census of 1930 gives no information on that at all. There are other data, however, that did rather establish the fact that 112 million of the homes are mortgaged.

I want to call your attention to the fact that he said that the average mortgage is in the neighborhood of $3,000. Now I am not entirely sure, for I have not the record, but he did say, I think, that at least represented the building-and-loan mortgages. If that is an average mortgage that would indicate a much larger mortgage debt than 21 billion, for 3 thousand times 112 million looked to me like 342 billion. Of course, that is too high. The actual fact is, gentlemen, that all the figures that are available show that there are now about $21,000,000,000 on 112 million homes. That amounts to approximately 63 percent of their value today. And if you pass section 5, you will throw every one of those homes, as the mortgages come due into the necessity of curtailing so as to come within the 60 percent that will make them available for the benefits of this bill. Now you do another thing. Over half of the mortgages in the urban real estate are straight loans. You make it necessary for every one of the straight loans, and there are in the neighborhood of five to six million homes that have the straight loan every one of them would have to be refinanced. Furthermore you would put us up against the necessity of starting curtailments when, for 4 or 5 years, we have been struggling to keep our interest paid, to keep our standing. Gentlemen, most of the home owners want to keep their credit. We are not asking that we escape our responsibilities; we just want to find a way to pay, and we do not want you to make it harder for us.

If you will let us alone and not throw on us all of the burden that is involved in this bill, we can work out our problem. The collective action of home owners of America, dealing with decent and reputable and fair-minded business men, will work out our common problems.

Now what need is there for doing this sort of thing? I hold in my hand, Mr. Chairman, a section of last night's Star, which I have cut out. Here are six reputable loaning agencies in Washington, one of them representing the Metropolitan Life, another the Prudential, another an insurance company on its own initiative, who are loaning, and they are advertising for borrowers. Why load us with the expense and with the burden of this bill?

You call it a National Housing Act. I hope, if you pass this billGod grant that you don't, but if you do, I hope you will change it from "National Housing Act" and call it "National housing bill ", with the accent on the "bill"; because the only possible excuse for calling this a housing act is that the home owners of the country are going to pay the bill, and they are going to pay in two ways. They are going to pay as home owners, and then they are going to pay again as taxpayers. There is not another excuse for calling this a housing act. You might as well call a savings-bank law a baby-fund law; an insurance law, a widows' and orphans' fund, as to call this thing a housing act, drawn in the interest of the home owner. If you want any other evidence of it, I will call your attention to the fact that every one of the nongovernmental witnesses who have appeared before this committee are either money-lending brokers-most of them were that-or they are the business men who make money out of home owners. That is one point.

I am not going to take much time, but just let me restate, please, Mr. Chairman, the importance that Mr. Russell was putting on the withdrawal of $4,000,000,000 was to meet the objection that we made that this thing will throw millions of homes into further danger of foreclosure. Now I need not go any farther with that, except to say this, that I do not think the President of the United States had any such intention, and I do not think he would back this bill if he had the time to read it himself. It is humanly impossible for the President of the United States to read these bills. We have had young men up here talking to us about plans. You would think this committee was going to recommend for enactment an essay on the mortgage field. Young men have been talking here about plans and ideas and all that sort of thing; but where are these ideas in the bill?

For example, we have heard about low interest to the home owners. There is not a line in this bill that protects the home owner from excessive interest. In my own experience, after a study of 3 years of this mortgage problem, and after conferences in our office with something like 3,000 home owners-it is my observation that the vermin of usury is not the least bit choosy as to whether it feeds on an amortized loan or on a straight loan; they like both and they infest both. I do not see that it is the function of Congress to tell me whether I shall take a straight loan or whether I shall take an amortized loan. It does not make any difference to me whether you tell it to me in blunt terms through officials here in Washington, or whether you so rig the financial market that I must steer the course that you lay out for me. I do not think that we ought to expect such legislation from legislators who represent a party that stands for initiative, for the rights of the States, and the rights of the community. I do not think we are going to get it from them.

Now I would like to call your attention, gentlemen, that the 23,000,000 urban homes are owned by 46,000,000 home owners23,000,000 of them are women. The home is one piece of property which you cannot pledge unless you have the woman's signature on the dotted line. She is not going to be so easy to persuade as you may think. She is getting more obstreperous all the time, thank God. I heard the Secretary of Labor say here, in answer to a question, that under certain circumstances it is right for the home-owning family to go into debt for the sake of giving another man a job. I do not believe any such thing. What is more, I do not believe that the home-owning family, with its back against the wall, fighting for the protection of its children, fighting for a way to live in some other way than on Mr. Hopkins' relief rolls is going to jeopardize the family shelter for any such purpose. I think it is nothing short of a crime to use the money of the taxpayers to incite people to go into debts they do not know how they are going to meet and by which they are going further to jeopardize the family shelter.

There is only one justification that I can see for going further into debt, when a home is already menaced by a mortgage. If you are a mortgage holder on my home and the home needs repair, and you say to me "You have kept up your payments and your taxes and I am willing to leave my money on your home. But there is a leaking room on your house that is going to destroy that property, hurting my security as it hurts your equity. I will raise the mortgage or ar

range so that you can get money to fix that roof, or that foundation, to protect your property and to protect my loan. If you will keep up the interest and the taxes, we will extend the first mortgage until such time as you have paid off that repair loan, which helps me as a mortgage holder and helps you as an owner." Now, that is the only basis upon which I think the Government has any right to conduct this campaign.

May I say I think, on that basis, that the business of the country would get more money and get it in a way that would mean the restoration of the building industries; because I do not have to argue to you gentlemen that the building industries will never really revive unless you revive faith in the wisdom of home ownership, and that is dead or dying in millions of people now. You only can revive that faith when you can arrange for the stabilization of the mortgage. And remember "stabilization of the mortgage" is not just a pretty phrase; it means if I pay up what I owe in the way of interest and taxes-in other words, secure the income to the people who own the capital-then the people who own that capital won't demand it now. That is the basis upon which renovation can be done with justice to the home owner and lasting benefit to the industries.

And may I say to you gentlemen that we went before the Reconstruction Finance Corporation on the 18th of January, after having had our conferences with a number of bankers and fiscal agents. We made just one request of them. We asked the Reconstruction Finance Corporation that has been, you know, making loans on first mortgages, if they would accept as security soundly made second. mortgages as security for collateral trust notes, when those mortgages were made for the exclusive purpose of putting repairs on the house, or of making the necessary curtailments of the first mortgage. And we did that for this reason: With 50 percent of the homes already having mortgages on them, you cannot manage this campaign. unless you make use of low-cost second-trust loans.

On the 20th of January, following our hearing, the R.F.C. issued a statement to the effect that the Corporation would accept both second and first trusts, for the purpose of modernization.

We do no need any legislation. The big insurance companies are advertising now for borrowers. More agencies will lend if a degree of liquidity were maintained warranted by the emergency, for companies whose capital structure and whose credit warrant. On appraisals that are sound, and with advice to the home owners to see to it they were not incited to go into debt other than for just absolute protection of their equity and their security, you would have a billion dollars invested in repairs that would revive faith and stimulate reemployment.

I have talked to you now as a fact finder. I just want to say one word about the Home Owners' Protective Enterprise, because Mr. Farrington, our attorney, will tell you where these dangers that I have charged against the bill will come to the home owner. The Home Owners' Protective Enterprise was incorporated a year and a half ago for the purpose of getting the home owners of the country on their own job, in cooperation with the legitimate lending agencies, to work out their own problems, to get the home ownership on a sound basis. Gentlemen, judging from the results of the four

coast-to-coast broadcasts that we have had, there are probably about 150,000 to 200,000 home owners now organized in local associations. I am eliminating those that are supported by the National Lumber Association and building and loan associations-not because we have anything against them, but they are promotional; they are not organized for the exclusive purpose of benefiting the home owner. In our office are applications and inquiries as to how the local associations can be linked up into a national association either by affiliation with the Home Owners' Protective Enterprise, or by coming in en bloc. These inquiries have to be referred to our State policy committees, because this organization is built along the line of the United States Government. We work through States and local committees. The mortgage stabilization problems have to be approached through State policy committees. The national organization, of which I am governor, can do no more than simply get to these committees the information until such time as the national policy committee, made up of two members autonomously chosen from each of the States, gets into action. Because they are not yet in full action is the reason I can only talk to you as a national officer of the corporation. Before long the national policy committee will control absolutely the policies of the national organization and speak to you for the membership.

Now, Mr. Chairman, our attorney, Mr. Marvin Farrington, who has had 27 years in the field of mortgage finance is present and I hope you will hear his analysis of this bill from the viewpoint of the home owner. Who is going to get the benefit of this bill will also appeal from his testimony.

I thank you very much.

The CHAIRMAN. We thank you for your statement and shall be glad to hear Mr. Farrington. Let me say, however, the committee does not desire that you conclude your remarks until you feel that you have finished what you desire to say.

Miss OBENAUER. That is very kind of you and I would like to answer any questions.

The CHAIRMAN. All right, if there is nothing further, we shall be glad to hear Mr. Farrington.

Miss OBENAUER. I would like for you to keep in mind that the mortgages on existing homes are already 63 percent.

Mr. GOLDSBOROUGH. Just one point: I think I know what you have in mind; but, for the record, would you state specifically, if you can, just how you think the present mortgagor will be detrimentally affected by this bill, and why?

Miss OBENAUER. Yes. I am a mortgagor; I am a home owner. I have a mortgage on my home for an encumbrance that probably might be regarded as 61 percent, coming due about a year from now. Now let us say that the firm with which I have dealt for 10 years, buying one home, paying the mortgage and building the other, selling that and building another, will be in such a position with these insurance provisions that you have here, in competition with these Government-coddled national mortgage associations, that they will have to say to me "Miss Obenauer, we want to have our mortgage insured. You will have to curtail so as to bring it down within the 60 percent and you will have to make it an amortized

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basis because we cannot get it insured if it is not." Now it just happens that a straight loan suits my purpose a great deal better than an amortized mortgage. I have been able to get it at a reasonable figure. The mortgage men have never overcharged me. If they have, they have had a vigorous protest and it has always been straightened out. But now, Mr. Goldsborough, when they say that to me, when for 4 years we have been swimming around in the red" pledging stocks and securities and everything else we have had, in order to keep our credit, because equally with our homes it is important to keep our credit when, when now you force them to say you will have to begin making curtails, what will that do to me? I will have to go to a second trust market. If you pass this bill, I will have to throw my home on the market and pretty quick, too, and there are thousands of others who would have to do the same thing. Why should you do that to us?

Mr. GOLDSBOROUGH. That is what I had in mind.

(The committee thereupon adjourned until Monday, June 4, 1934, at 10:30 a.m.)

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