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Mr. GOLDSBOROUGH. Your answer was that you had no idea employment would be relieved.

Mr. FARRINGTON. My thought is, in answering your question, that it would be just as Mr. Walker put it; it would be a very vague guess, and I would not hazard a guess as to the number of men put back to work as a result of the operation of the repairs campaign. I do not believe it is possible to estimate that.

Mr. PRALL. You do not doubt that some would be put back to work, do you?

As I understood your criticism of Mr. Walker, it was that they estimated the number at five million, and you say that is not capable of mathematical demonstration. Of course, obviously it is not. But you do not dispute the fact that some will be put back to work, do you?

Ér. FARRINGTON. Of course that will depend upon the success of the campaign. How can we say, under section 3, dealing with modernization, how many will be able to avail themselves of that, even if the money is given to them in this manner, on the installment basis, at reasonable terms, if their own homes are held under mortgages due or about to come due?

No one will repair his home or put on a new roof, for instance, because the Johns-Manville agent comes down, if he knows that within 6 months he will have to meet the problem of refinancing his home.

Mr. PRALL. That is not true in all cases, is it?

Mr. FARRINGTON. That is true in about half the cases. There are something like 51 percent of the home mortgages of this country that are straight mortgages.

Mr. Sisson. Would not that same argument apply, not as to details, to the Home Owners Loan Act? There were a great many mortgagors, home owners, whose equity had been entirely wiped out, and in those cases there was no relief that could be given them. But that is not a conclusive argument against the Home Owners Loan Act.

Mr. FARRINGTON. That is correct.

Mr. Sisson. If even a half or a quarter of them would be helped out, there would be sufficient reason for Congress to give relief.

Mr. FARRINGTON. But why should the Government insure corporations that are doing this now, and have been doing it for years? Why should the Government set up elaborate machinery to insure the very institutions who are advertising that they will give that insurance?

Mr. PRALL. Are they doing it?
Mr. FARRINGTON. They are advertising it.

Mr. PRALL. As a matter of fact, do you not know that they are not doing it; regardless of whether they are advertising that they will do that, you know and I know they are not doing it.

Mr. FARRINGTON. The Johns-Manville Co. did that on Saturday night on the air.

Mr. PRALL. There may be an isolated case here and there, but generally they are not doing it, and we all know that.

Mr. FARRINGTON. But that is so as to that one corporation, at least, and they will take up a very considerable part of the repair move

ment, because, after all, repairs probably will get a great deal more interest from the home owner than would any modernization.

Mr. PRALL. Yes; and it will give mechanics work in practically every hamlet, every village, and every town

Mr. FARRINGTON (interposing). That is true.
Mr. PRALL (continuing). In this country; and that is what we need.
Mr. FARRINGTOX. How is the home owner going to pay for it!
Mr. PRALL. A great many of them can; they are not all broke.
Mr. PRALL. And they are not all paupers.
Mr. FARRINGTON. No; but they may not all do it.

Mr. PRALL. If it is a half of them, or even if it is only a portion of them, that is something, is it not?

Mr. FARRINGTON. Oh, undoubtedly, that is something. Do not misunderstand me as saying that this would mean nothing; of course not. A reasonable number

Mr. PRALL (interposing). This, as I understand it, is an emergency matter; it is not merely going into the building business to help the home owner only. This is an emergency proposition to get men back to work.

Mr. FARRINGTON. The repair program is; yes. Mr. PRALL. And it seems to me that everywhere in the country this will operate where hardly anything else we might do would operate.

Mr. FARRINGTON. The repair program only is an emergency.
Mr. PRALL. That is what I am speaking of.

Mr. GOLDSBOROUGH. Mr. Prall was not present at some of the hearings to hear some of the testimony. I do not think he heard Mr. Bodfish's explanation and the explanation of those persons who were the draftsmen of the bill, such as the president of the General Motors Acceptance Corporation and one of the officers of the JohnsMansville Co.; I do not think he heard all that testimony. I do not think he heard either your testimony this morning, Mr. Farrington, in which you so clearly stated the enormous profits made by the General Motors Acceptance Corporation and the General Motors Corporation from the activities of the General Motors Acceptance Corporation during 1932 and 1933, and when you explained that organizations such as that would get the benefit of this bill, and that the lawyers and officers of those organizations actually wrote the bill. I do not think he is familiar with the evidence in the record on that subject.

Mr. PRALL. If the gentleman will yieid.

Mr. GOLDSBOROUGH. I will yield in just a moment. I do not think he is aware of the fact that on Saturday night Floyd Gibbons, who was evidently employed by the Johns-Manville Co. to make a speech in favor of this bill, was immediately followed by the representatives of the Johns-Manville Co. on the radio. I want to call attention to these facts.

Mr. PRALL. I would say to the gentleman from Maryland (Mr. Goldsborough) that my remarks do not attach to the bill, as the bill is written. I say that a measure, any bill, that would have for its object the employment of men in the repair of homes, many of which have not been repaired in years, due to the depression, is a good bill,

and can be productive of great good in the employment of men that are idle.

I do not say that this bill is perfect. And I do not care who wrote the bill. But I do say that this committee is competent to rewrite the bill to meet that situation that the country demands and that the people demand at this time. I do not care who it was that helped to write the bill.

But this committee could rewrite this bill and cover just what is needed in the country. I live in a district a part of which, Richmond County, is, I think, the fourth largest in point of assets of building-and-loan activity in the State of New York. It is essentially a county of homes, and it is very much interested in a bill of this kind. I know hundreds of people in that one county that are able to meet whatever it might cost, up to $2,000, to repair their homes, provided they can meet the cost in easy payments. They are not broke, and their homes are not going to be foreclosed. But they do need repairs, and under a bill of this kind, under an idea of this kind, they would be glad to get enough to make those repairs and to have time with which to meet the payments.

Mr. GOLDSBOROUGH. If you think it is a fair question, do you think it is the proper procedure for an executive department down in the city of Washington to engage, together with New York bankers and representatives of insurance companies and great industrial organizations, for months, months, and months in the writing of a bill without consulting a single member of the Banking and Currency Committees of the two Houses, and then bring it up here and hand it to us for passage? Do you think that is proper procedure? That has been going on for months.

Mr. PRALL. I do not know that that is true.
Mr. GOLDSBOROUGH. It is a fact.
Mr. PRALL. But I would like to say-

Mr. GOLDSBOROUGH (interposing). The reason I am emphasizing that is because it has been going on and it has gotten to be a sort of racket.

Mr. PRALL. I would like to see the heads of our bureaus have the cooperation of some members of our committees in the framing of all legislation. I would not care what department it was; I think the Agricultural Department might take in some of the members of the Committee on Agriculture in the House and the Committee on Agriculture in the Senate when they are contemplating the framing of legislation, and I believe it would be a good idea in all those cases. But I am not criticizing the way the bill was drawn, or who prepared it. I am simply supporting the idea, and if the bill is not what this committee would have it to be, then surely we are competent to redraft that bill so that it may meet the needs of the communities and follow through with the employment of men that are now idle.

Mr. GOLDSBOROUGH. I will say to you, as to the proponents of this bill that no two of them have the same explanation of what is in the bill, and they all attempted, instead of telling us what was in the bill, to give their construction of how the bill would operate.

Here we are legislating, with the responsibility of legislating for 120,000,000 people, and we do not know what is in the bill; that is, I

mean, we do not know what is behind the bill. It is, it seems to me, an extremely difficult situation for every member of the committee.

Mr. Sisson. Did Mr. Walker testify before this committee! I do not think it is so much a question of the brains that were employed in the preparation of the bill. We can make certain changes in it, if we desire to do so. I would not object if the much-criticized “brain trust” wrote it.

Mr. GOLDSBOROUGH. I would not either, Mr. Sisson.

Mr. Sisson. I have great respect for Mr. Walker, whom I regard as one of the best business brains of the country. If he helped to write the bill that would give it some presumption in my mind for favorable consideration.

Mr. GOLDSBOROUGH. He may be the best business brain in the country, I do not know about that, because I never heard of the man until the other day. I do not know anything about him at all. I do know, however, that these people have had an opportunity to manipulate the language for months and months and months and to cover up its actual meaning, if they so desire. It is extremely difficult for a legislative committee to find out what is in a bill, and I think when they find out who wrote the bill and what was the motivation behind the writing of the bill it helps them in deciding just what the bill really means. That is what I had in mind.

Mr. PRALL. The first bill that was introduced in Congress at this session which was referred to our subcommittee was introduced by Congressman Wadsworth, of New York. That was the first biil that was introduced in reference to repairs, renovation, and so forth. Mr. Wadsworth is a man for whom I have the highest regard.

Mr. GOLDSBOROUGH. And so have I.

Mr. PRALL. And his legislative record is such as to commend him, and it was he who first introduced a bill looking to the employment of men everywhere practically at one time in the provision for repairs and improvements.

Mr. GOLDSBOROUGH. Mr. Prall, Mr. Wadsworth's bill might have been very different from this.

Mr. PRALL. It was a very simple bill; it covered not more than

two pages.

Mr. GOLDSBOROUGH. As far as my analysis of this bill goes, and I have attempted to analyze it very carefully and very fully; I have been here and heard most of the testimony before the committee and have read the testimony in the hearings of the Senate committee. As far as I can see, this bill is not written in the interest of the home owner or the owner who wants the improvements put on his property. It is written in the interest of those who either have already loaned money on real estate or who desire to loan money and get the benefit of the Government's guarantee. That is the way I see it.

Mr. PRALL. My theory about this situation is that there are two angles only that we should consider. The first is to protect the home owner's property by making necessary repairs. The second is to see to it that local labor is employed to make those repairs.

Mr. GOLDSBOROUGH. You may be able to find that in this bill, but I have been unable to do it myself.

The CHAIRMAN. Will you proceed, Mr. Farrington?

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Mr. FARRINGTON. Before I do so, my recollection, Mr. Prall, is that you were not here this morning.

Mr. PRALL. No; I was not.

Mr. FARRINGTON. I think you were not here on Saturday when one of the joint chairmen of the Home Owners' Protective Enterprise was testifying, so you were not aware of the fact that the Home Owners' Protective Enterprise is in hearty accord with any movement that will bring about the restoration by the large amount of repair work, that has been neglected for 3 or 4 years on the homes of this country.

There is no question where we stand on that. The question has been as to whether the home owners' interests were properly protected under sections 3 and 4, and that has all been pointed out. I had been discussing that proposition at the time you asked me the question, that proposition with reference to section 5 and title II, which must be considered together.

Mr. PRALL. My understanding was that your conclusions were that as far as the provisions of this bill went as to the employment of idle men, that that meant nothing and nobody could tell anything about it; that it might be 5,000,000 or it might be 3,000,000, or more or less.

Mr. FARRINGTON. I have not sought to convey that impression.
Mr. PRALL. I thought that was your idea.

Mr. FARRINGTON. When it comes to the question of the modernization program of this bill, we are offering some definite amendments, on the theory that the bill as drawn is what is going to be passed.

If I may say so, Mr. Prall, there has been a great deal of testimony needed here because the bill itself is one thing and the plan some gentlemen talk about is another thing.

Mr. PRALL. I think some of the gentlemen who did participate in that admit that perhaps it is not what they would like it to be.

Mr. FARRINGTON. I think so; yes, sir.

Mr. PRALL. I am not saying that I am in harmony with the bill as drawn, but I do believe our committee could revamp this bill

Mr. FARRINGTON (interposing). I have not the slightest doubt about it.

Mr. PRALL (continuing). And make it a very, very important cog in our machinery of recovery.

Mr. FARRINGTON. We have not the slightest doubt of that, and that is why we have asked to be heard. Again referring to section 5, which covers the insurance of the amortized mortgages, and particularly to that feature that runs throughout the plan and the testimony concerning that plan, I want to call your attention to just this, because it speaks eloquently respecting that tendency toward the regimentation of the home mortgage financing of this country.

Mr. Riefler, testifying on page 55 of the hearings of the Senate eommittee, said:

However, mortgages on commercial properties, on expensive apartment houses, hotels, and that sort of thing, would not be eligible for insurance.

He had been discussing the low cost of housing.
Then this colloquy followed :
Senator WAGNER. Where do you draw the line? What is eligible and what
is not?

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