The President in his budget message recommended an additional authorization of $200 million for capital grants for the fiscal year 1959, $250 million for the fiscal years 1960 and 1961, and $200 million for the fiscal years 1962-64. These recommendations have been incorporated in section 302 (d) of S. 3399, which is pending before your committee. In the circumstances, the Department would be opposed to the greater increase that would be immediately provided by S. 3548 and recommends consideration of the authorization in S. 3399 in lieu of action on S. 3548. The Department has been advised by the Bureau of the Budget that there is no objection to the submission of this report to your committee. Very truly yours, LAURENCE B. ROBBINS, Acting Secretary of the Treasury. TREASURY DEPARTMENT, May 23, 1958. Hon. J. W. FULBRIGHT, Chairman, Committee on Banking and Currency, United States Senate, Washington, D. C. MY DEAR MR. CHAIRMAN: Reference is made to your request for the views of this Department on S. 3713, "To amend title IV of the Housing Act of 1950 (college housing) to authorize loans to educational institutions for the construction, rehabilitation, alteration, conversion, and improvement of classroom buildings and other academic facilities." The proposed legislation would amend title IV of the Housing Act of 1950 to authorize $250 million in loans to educational institutions for the construction, rehabilitation, alteration, conversion, or improvement of structures for use as classrooms, laboratories, and related facilities necessary or appropriate for the instruction of students or the administration of the institution. S. 3399, the administration housing bill, and S. 3163, the administration bill relating to aid to education, do not contemplate the type of assistance that would be provided by S. 3713. In the circumstances, the Department would not favor the enactment of the proposed legislation. The Department has been advised by the Bureau of the Budget that there is no objection to the submission of this report to your committee. DEAR MR. CHAIRMAN: Reference is made to your request for the views of the Department of the Army with respect to S. 2865, 85th Congress, a bill "To amend title I of the Housing Act of 1949 to authorize in certain cases financial assistance for community relocation." The purpose of the bill is to permit Federal assistance in the development of urban renewal projects on sites selected in substitution of urban areas that will become flooded by reason of Federal, State, or other public works involving the construction of a dam. Financial assistance under title I would be available from the Administrator, Housing and Home Finance Agency at the new site without regard to other statutory restrictions concerning eligibility for grants. The Department of the Army has considered the above-mentioned bill and recommends that action be deferred pending an overall study being made by the Department. The Chief of Engineers, under the supervision of the Secretary of the Army, is responsible for a principal segment of Federal water-resources development, including projects requiring the construction of dams. This Department is therefore vitally interested in any legislation that would assist affected communities or individuals in their adjustment to conditions created by these projects. In the absence of statutory authorization to relocate specific facilities, the essential criteria are those developed by the courts in condemnation proceedings for the acquisition of property required for a Federal purpose: (1) market value shall be paid where value can be ascertained by reference to the market and (2) the value of roads, streets, or utilities is measured by the cost of providing substitute facilities if, in fact, substitute facilities are required. Highway, railway, and utility relocations are also authorized in dam and reservoir projects under the control of the Department of the Army by section 2 of the Act of June 28, 1938 (52 Stat. 1215) and section 9 of the Flood Control Act of 1946, approved July 24, 1946 (60 Stat. 641, 643). Accordingly, if all the property in a town is acquired and the town reestablishes itself at a new site, streets, roads, and utilities will be relocated at the expense of the Federal project. The Department of the Army is also authorized by section 401b of the Act of July 14, 1952 (66 Stat. 606, 624) to reimburse owners and tenants for certain moving costs and expenses, not in excess of 25 percent of the value of acquired property. The Secretary of the Army and the Chief of Engineers have long been concerned with the manifold problems of relocation imposed on communities and individuals affected by Federal projects. However, a review of pending projects indicates that a comparatively small number of communities could avail themselves of the specific limited benefits proposed in S. 2865. Enactment of the bill would therefore not be of material assistance to owners and tenants generally or to this Department in facilitating the construction of water-resources development projects for which it is responsible. It is suggested therefore that action on S. 2865 be deferred pending further consideration by the Department of the Army of the best means to approach the solution of the overall problem of assuring adequate and proper compensation to all affected by Federal projects. This matter is receiving attention at this time and specific recommendations will be made shortly. You will be advised of the conclusions reached. Should the committee nonetheless desire to consider S. 2865 at this time, the Department of the Army believes that the Administrator, Housing and Home Finance Agency is in a better position to comment on the underlying principle involved in amending title I of the Housing Act of 1949 to include projects that would replace areas that are not slums, blighted, deteriorating, or deteriorated. If the committee favors this principle, it is suggested that consideration be given to the desirability of uniformity in connection with Federal public-works projects, the necessity of assuring that projects are not impeded, and that the replacement site is available for those required to move from the project area. These objectives could be achieved by (1) enlarging the scope of the bill to include financial assistance whenever the relocation of a community, urban or rural, is required in connection with any Federal public-works project; (2) imposing time limitations within which affected communities could take advantage of the benefits of the legislation; and (3) providing priorities at the new site to owners and tenants displaced by a project. Enactment of this legislation will have no apparent effect on the budgetary requirements of the Department of the Army, since all costs for which the Department is now responsible in connection with its water-resources development projects will remain as project charges. Federal financial assistance proposed by the bill would become the responsibility of the Housing and Home Finance Agency, which is therefore in a better position to advise the committee concerning its fiscal implications. The Bureau of the Budget advises that there is no objection to the submission of this report. Sincerely yours, WILBER M. BRUCKER, Hon. J. W. FULBRIGHT, GENERAL COUNSEL OF THE DEPARTMENT OF DEFENSE, Chairman, Committee on Banking and Currency, United States Senate. DEAR MR. CHAIRMAN: Reference is made to your request to the Secretary of Defense for the views of the Department of Defense with respect to S. 3399, 85th Congress, a bill to extend and amend laws relating to the provisions and improvement of housing and the conservation and development of urban communities, and for other purposes. Section 112 (a) of the bill would amend section 803 (a) of the National Housing Act so as to authorize the Federal Housing Commissioner to insure mortgages under title VIII of the act pursuant to commitments to insure issued before June 30, 1960, whereas under present law this authority expires on June 30, 1959. The Department of Defense contemplates that the $2,300 million aggregate amount of mortgages which the Commissioner is authorized to insure under title VIII will permit the construction of approximately 145,000 units. At the present time, the Department of Defense has placed under contract 37,530 units. In order to allow orderly programing of the remaining units authorized, the 1-year extension effected by section 112 (a) is strongly supported. Section 112 (b) of the bill would authorize the Federal Housing Commissioner, under title VIII of the National Housing Act, to insure mortgages bearing an interest rate not to exceed 5 percent. Public Law 85-364 raised the maximum rate from 4 to 41⁄2 percent, and it appears that this increase will be adequate for present purposes. However, in order to provide sufficient flexibility for the future operation of the title VIII program, the Department of Defense recommends that the interest rate be increased to 5 percent. In addition to authorizing an increase in the interest rate, section 112 (b) provides that mortgages insurable under title VIII may have a maturity of 30 years, while under present law the maturity may not exceed 25 years. In view of the statutory limitations on the use of quarters allowance to amortize title VIII mortgages, the proposed increase in the interest rate makes necessary an increase in the mortgage period. Accordingly, the Department of Defense strongly recommends the enactment of S. 3399. It is believed that enactment of the subject bill would have only a minor effect upon the budgetary requirements of the Department of Defense. The Bureau of the Budget advises that there is no objection to the submission of this report, and that enactment of S. 3399 would be in accord with the program of the President. Sincerely yours, L. NIEDERLAHNER, (For Robert Dechert). Hon. J. W. FULBRIGHT, GENERAL COUNSEL OF THE DEPARTMENT OF DEFENSE, Chairman, Committee on Banking and Currency, United States Senate. DEAR MR. CHAIRMAN: Reference is made to your request for the views of the Department of Defense with respect to S. 3484, 85th Congress, a bill to amend section 404 of the Housing Amendments of 1955. The purpose of the bill is to amend section 404 of the Housing Amendments of 1955, which now provides for the acquisition of housing projects constructed under title VIII of the National Housing Act as in effect prior to August 11, 1955 (Wherry projects), so as to provide for the acquisition of housing projects constructed under section 207 of that act. Section 404 at present makes mandatory the acquisition of Wherry projects which are located at or near military installations where the Secretary of Defense has approved the construction of housing under the amended title VIII of the National Housing Act, and S. 3484 would make mandatory the acquisition of section 207 housing projects under such circumstances. In addition, the bill would make applicable to such acquisitions all the other provisions of section 404, including the provision establishing a maximum acquisition price, the provision authorizing the use of the revolving fund, etc. The Department of Defense opposes enactment of S. 3484. Because of the low cost limitations applicable to housing construction under the mortgage insurance provisions of section 207, it is in most cases inadequate to meet public quarters standards. Furthermore, unlike Wherry housing which is for the most part located on Government-owned land, 207 housing is not only off base, but in many cases an integral part of the civilian community. Accordingly, even though 207 housing might be "at or near" a military installation where new title VIII housing had been approved, so that its acquisition would be mandatory under the subject bill, the Department of Defense would be administering isolated areas of housing within the civilian community. The Department of Defense has consistently objected to the concept of administering housing over which it had no control with respect to design, location, or cost. In addition, the Federal Housing Commissioner has certified with respect to any such title VIII housing, that it would not substantially curtail occupancy in existing housing covered by mortgages insured under the National Housing Act; this certification, which evidences the lack of competition between 207 housing and title VIII housing, is a further reason for the Department's position that acquisition of 207 housing is inappropriate. As it is difficult to estimate, without a detailed study, the existing outstanding mortgages, equities, and the amounts necessary to rehabilitate, furnish and operate the housing in question no worthwhile estimate of the fiscal effects of this legislation can be made. The Bureau of the Budget advises that there is no objection to the submission of this report. Sincerely yours, ROBERT DECHERT. HON. J. W. FULBRIGHT, DEPARTMENT OF THE INTERIOR, Chairman, Committee on Banking and Currency, United States Senate, Washington, D. C. DEAR SENATOR FULBRIGHT: This responds to your request for the views of this Department on S. 2865, a bill to amend title I of the Housing Act of 1949 to authorize in certain cases financial assistance for community relocation. This Department makes no recommendation regarding the enactment of the bill, but suggests it be amended, if it is favorably considered. S. 2865 would amend title I of the Housing Act of 1949 by providing for financial assistance when all or a part of an urban area is flooded as a result of the construction of a dam or reservoir project. The only activities of this Department which could result in the flooding of an urban area by reason of the construction of a dam or reservoir are those which are undertaken by the Bureau of Reclamation. However, section 14 of the Reclamation Project Act of August 4, 1939 (53 Stat. 1187), specifically provides authority to be exercised in the case of relocations made necessary in the construction of reclamation projects and additional authority, such as that which would be provided by S. 2865, is not necessary in those cases. Whether the authority which would be granted by the enactment of the subject bill is either necessary or desirable in those cases where the flooding results from the construction of dams and reservoirs by agencies other than the Bureau of Reclamation is a matter upon which we are unable to give helpful information or advice. However, in the event your committee should consider the bill favorably, we suggest that it be amended to provide that no financial assistance shall be made available under its authority in those cases where other authority, such as that which is cited above, exists. The Bureau of the Budget has advised that there is no objection to the submission of this report to your committee. Sincerely yours, FRED G. AANDAHL, Assistant Secretary of the Interior. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, May 13, 1958. HON. J. W. FULBRIGHT, United States Senate, Washington, D. C. Chairman, Committee on Banking and Currency, DEAR MR. CHAIRMAN: This letter is in response to your request of February 4, 1958, for a report on S. 3213, a bill to increase by $250 million the borrowing authority of the Housing and Home Finance Agency for College Housing loans. This will would amend section 401 (d) of the Housing Act of 1950 as amended by striking out $925 million and inserting in lieu thereof $1,175 million. Office of Education projections of college and university enrollments show that enrollments may be expected to increase by one-third by 1960 and to more than double by 1970. The President's Committee on Education Beyond the High School has indicated that present college enrollments may be tripled by 1970. There is no doubt as to the need for funds to construct facilities required in order that institutions of higher education may serve their purposes and meet these tremendous demands that confront them. From a nationwide study of college and university facilities, now in progress in the Office of Education, it is evident that institutions are planning a substantial amount of construction during the next several years of the type of facilities eligible for loans under the college housing program. The development plans of these institutions indicate proposals to finance much of the construction of these income-type facilities through the sale of revenue bonds. Present residential and other service facilities are overloaded. In view of the existing need for the type of assistance afforded by the college housing program, this Department favors an appropriate increase in the present borrowing authority of the Housing and Home Finance Agency for that purpose. However, the amount of the increase which would be appropriate depends not only on the need for facilities but also on the availability of non-Federal sources for financing such facilities. As you know, the increase in the existing authorization recommended by the administration bill (S. 3399) is $200 million, as compared with the $250 million proposed in the present bill. The amount of increase proposed in the administration bill was fixed in the light of other changes in that program recommended by the President and contained in S. 3399-including a new program of debt service guaranties of taxable bonds of educational institutions which are designed to encourage private financing. The Bureau of the Budget advises that it perceives no objection to the submission of this report to your committee. DEAR MR. CHAIRMAN: This letter is in response to your request of February 20, 1958, for a report on S. 3281, a bill to amend the Housing Act of 1950 in order to provide for loans to colleges and universities for science equipment and facilities, and your request of February 26, 1958, for a report on S. 3351, a bill to amend title IV of the Housing Act of 1950 to authorize loans under the college housing loan program for the construction of science buildings and libraries at educational institutions. S. 3281 would amend title IV of the Housing Act of 1950 to increase by $325 million the borrowing authority of the Housing and Home Finance Agency for the college housing program and to authorize loans to institutions of higher learning for the construction or remodeling and initial equipping of facilities for teaching physical sciences, mathematics, and engineering, the amount of such loans outstanding for this purpose not to exceed $150 million of the total loan ceiling. S. 3351 would amend title IV by increasing the borrowing authority for college housing loans by $200 million and by authorizing loans to institutions of higher learning for the construction or remodeling and initial equipping of facilities for teaching physical sciences, mathematics, and engineering and for the construction of library facilities, the amount of such loans outstanding for this purpose not to exceed $200 million of the total loan ceiling. This Department is deeply concerned with the problem of improving the quality of education-particularly in fields of study related to the national security-at every level of our educational system. We have recommended that the Congress enact S. 3163, now before the Senate Committee on Labor and Public Welfare, which would authorize a Federal program designed to assist and encourage State, local, and private efforts to overcome educational deficiencies which are dangerous to our national security. This recommendation is based upon the most careful consideration of educational needs and the relative urgency and priority in terms of Federal action to help meet those needs. The Housing Act in its present form provides for direct Government loans to colleges and universities for the construction of facilities that are self-liquidating |