I point out to them that it is harder now than ever to accumulate the little nest egg necessary to make the downpayment. Taxes are heavy, because of our waste in foreign spending, and the foolishness of our foreign policy. The fact that we are throwing our money away and that we have inflation and that we are heavily in debt, that we have no leadership in government and the men at the White House have been accused of taking bribes, could not deter us from doing this good thing for the potential of the homeowners of America.

The young couples starting out now need every help they can get to make a go of it. It is my firm belief that the proportionate number of divorces will decrease as the number of homes for our people increase. When a couple has a home of their own, even though heavily mortgaged, they have a pride in it, and work together to make it comfortable, presentable, and to add to it and improve it, think together of the finances, and work together toward the amortization of their mortgages and indebtedness. It inevitably means harmonious teamwork.

I have also pointed out to those who oppose this legislation that, on other occasions, the Government of these United States has stepped in to help the homeowner. We have the home-loan banks and we have had the Home Owners Loan Corporation. We have had the Federal Housing Authority. We have had home institutions built under the Farm Security Administration. I have mentioned the GI bill of rights above, and we all know that the Veterans' Administration has long recognized this role in helping the veteran to get a home.

Now we come to the legislation before us today. All it does is reinsure up to 90 percent of 20 percent of the amount of the mortgage, or 18 percent. When the loan is paid down to 50 percent the guaranty

expires.

Actually, it is an opportunity for those building and loans and other institutions which are hampered now by the restrictions, to enlarge their field of loans, to be of more service to the community, and to encourage home ownership.

I want to associate myself with any good thing that encourages homeownership. I believe this legislation will, and I hope this committee will soon bring it to the House of Representatives for action. Infinite to those who oppose this legislation, and I am satisfied honestly so, I am quoting here, verbatim, a letter I received today from Mr. C. Douglas Wilson, of Greenville, S. C., whose institution has been wonderful help to the builders in my district. Mr. Wilson is sincerely interested, and I hope this committee will take into consideration the things pointed out in his letter in considering this legislation:

Your letter of July 9 is greatly appreciated, and although you disagree with me, I want you to know that I respect your position. I have always admired people who have the courage of their convictions and who do not hesitate to make known their position even though their views may be in opposition to mine.

I also note that it is your considered opinion that the building and loans do a great service. I thoroughly agree with you, and I am very friendly with the presidents of several building and loan associations, and cooperate with them just as they do with us on many things.

Assuming that there is a need for the type of program as contained in H. R. 10637, do you not feel, as I do, that it is discriminatory inasmuch as practically no other investors except savings and loan associations have access to it? The

Mortgage Bankers Association of America has spent over a year working with savings and loan officials endeavoring to work out a proposal which would benefit all segments of the industry. The MBA thought they were making progress toward this end, but during the latter part of May the savings and loan industry redrafted their proposal to make it perfectly clear that no organization which is not a member of the Home Loan Bank System could take advantage of the new guaranty program. The savings and loan industry has access to the GI loan program and to the FHA loan program just the same as all other investors. They are not at a disadvantage by dealing through the FHA and GI loan programs, yet they do want other investors in the Home Loan Guarantee Corporation program. Is this fair?

It was certainly kind of you to write me, which I appreciate, as well as the nice reception you gave me when I called on you in Washington in April. If it is not too much trouble, I would appreciate your consideration of this bill from the standpoint of its being discriminatory. One member of the committee has changed his views because he feels that the proposed program should not be confined to one particular group.

I have previously written to Mr. Wilson telling him of my being in favor of the legislation. I am still in favor of the legislation but I hope you can satisfy all those who are interested.

I thank you for allowing me to appear. I will be glad to try to answer any questions the committee may have.

Mr. RAINS. That is a very fine statement, Mr. Hemphill. I suggest this to you: If we do get it through the committee and get it on the floor of the House, if you would make that speech in support of it, it would help considerably.

Mr. HEMPHILL. Sir, if I can get the time I would be most happy to. Mr. RAINS. I like your suggestion in which you recognize that the bill as of now is not a polished piece of legislation and that if it is to be, this committee has got to do some work on the bill which we intend to try to do. I think its objectives as you stated, are good, and I think you would agree that this committee should do its best to see that the home purchaser, the Government, and the lender as well, are all treated fairly in the deal and that is what we want to do. Mr. HEMPHILL. Certainly.

Mr. RAINS. I appreciate your coming before the committee. Any questions?

Mr. ADDONIZIO. I have no questions, Mr. Chairman. I just_want to congratulate Mr. Hemphill on a very fine statement and I was certainly pleased to see that you have an open mind on this particular legislation and are willing to accept the judgment of the committee as far as amendments are concerned.

Mr. HEMPHILL. I have every confidence in your committee, sir. I came to appear because I wanted not only my people but your committee, to know of my support of the legislation.

Mr. ADDONIZIO. Thank you.

Mr. RAINS. Any questions?

Mr. MCDONOUGH. No, except to thank you for your appearance and your views and recommendations. We are glad to have you. Mr. HEMPHILL. Thank you, sir.

Mr. RAINS. Thank you very much.

Our next witness is our friend George Miller, of California. Come around, Mr. Miller.

STATEMENT OF HON. GEORGE P. MILLER, A REPRESENTATIVE IN CONGRESS, STATE OF CALIFORNIA

Mr. MILLER. Thank you, Mr. Chairman.

Mr. Chairman, and members of the committee, I appear here today in support of a bill that I introduced, H. R. 13306, that would amend title IV of the Housing Act of 1950 with respect to college housing and the definition of educational institutions.

This is similar to a bill introduced by Senator Douglas and is identical with bills that have been introduced here by other members, including Mr. Harlan Hagen, who is here present.

The bill would amend the provisions of the college housing act to allow student cooperatives to borrow funds directly from the Government as do the educational institutions themselves under the college housing program.

These loans would finance low-cost dormitory facilities to be owned and managed by cooperative organizations of students on various college campuses throughout the country. The amendinent applies to title IV of the Housing Act of 1950. The bill technically will make student cooperatives eligible for direct loans on the same basis that funds are now available for loans to colleges for dormitories to be operated on a rental basis.

Student cooperatives, however, provide ownership of the facilities by students themselves with a greater sense of responsibility placed on them. Student labor for the maintenance and operation of these housing facilities provides training in the assumption of the responsibility in management. These factors strengthen the democratic processes of college education.

I have a rather long statement here, Mr. Chairman, that I am not going to burden the committee with at this time.

Mr. RAINS. You may put it all in the record and answer a few questions.

Mr. MILLER. Well, I will put part of it in the record, but I do want to bespeak consideration of college cooperatives.

One is operated at the University of California that presently is providing cheap housing for over 900 students. It has physical assets of over a million and a half dollars. The university is anxious to see this expanded by another 500 housing units that would again attract and make provision for students of that category. Of course, the bill provides that this will only be available where none of the profit inures to any individual or group, and it is the application of the cooperative effort that has worked out so well in other fields of our endeavors, particularly agriculture, to students and to those seeking to obtain college educations.

It allows the e people to earn a part of their sustenance, obtain it by furnishing the services such as waiters, janitors, or caretakers of the institution. It is a real self-help project in the best American tradition.

Mrs. SULLIVAN. Mr. Chairman, at that point could we ask the Congressman to tell how a student participates. What does a student do when he comes into this co-op housing plan?

Mr. MILLER. The student joins the cooperative like a person joins any such group. The one at the University of California dates back to

the depths of the depression when about a dozen students living in a substandard manner banded themselves together and rented a house and induced other students to join them and work with them. They did their own cooking, laundry, and so forth, and thus supported themselves.

In many cases the total cost of their living only required about $21 cash a month. Many of them could not have gone through college but for the fact that through this cooperative effort they were able to live and able to proceed.

The movement has grown and developed at the University of California until it now has over 900 membership. It owns real estate and housing, as I say worth about a million and a half dollars. They want to expand their facilities. I understand there are about 6 other universities and colleges throughout the country that have this type of student cooperative for worthy, willing, or needy students to help themselves through college.

Mrs. SULLIVAN. Congressman Miller, this has now been going on for a number of years?

Mr. MILLER. Since about 1933 at the University of California. Mrs. SULLIVAN. Now if a student comes into college today and wants to participate or get into this type of co-op housing, how would he go about it?

Mr. MILLER. They apply, and if there are facilities for them they are admitted. It is not a proposition where they can go in and just pay their board and rent. The have to participate in the activities and the activities may run anywhere from 1 hour a week to 5 hours a week work, depending on the circumstances, and that contributes to their fee for maintenance in the cooperative.

Mrs. SULLIVAN. In other words, they apply for that type of living accommodation and then if they are accepted they participate. Mr. MILLER. Yes.

Mr. RAINS. I am sure the committee and I know something about this situation. I lived in a similar situation except mine was a medical barracks during the depression in college. I know we are sympathetic to the idea, Mr. Miller, but this poses a difficult legal question for the committee. The concept of college housing is that there shall be back of it a legal entity and an institution that would make the loan by the Federal Government safe and secure; just like on loans to cities, we require the signature of the cities, and so on. I just know that we want a legal entity. So I want to ask you two or three questions. Would your institution be willing to sign as a cosigner?

Mr. MILLER. I believe it is contemplated that the institution-this could only be done at the instigation of the institution-there is a provision presently in the bill, which provides that upon the dissolution of which all property purchased or proceeds from the sale of any such property pass to such institution, that is the parent institution.

Mr. RAINS. That is the next question I was going to ask. That would be essential.

Mr. MILLER. Yes, and this institution, incidentally, a member of the faculty sits in on it and it is recognized by the university.

Mr. RAINS. Well, it is a part of the institution, and therefore, I believe it ought to have another saving clause in it, that the loan shall

be granted in the name of the cooperative and that the institution which is the parent institution where the cooperative operates become a cosigner and in addition in the event of dissolution-you say it is in your bill-that all of the facilities would go back to the institution. Mr. MILLER. That is right.

Mr. RAINS. I hope we can write it. I am sure everybody favors it. It is just a matter of whether or not we can get the technicalities ironed out.

Mr. MILLER. Well, I believe that this very fine committee of yours that has struggled with many more difficult problems can polish that up.

I am not a lawyer. I haven't tried to set the thing up, but I am convinced that this is a way in which students can help themselves. This is like any cooperative where they help themselves.

Mr. RAINS. There are some people who think you could do this now under section 213, which is the cooperative section of the Housing Act, but I assume it would be better, since it has to do with college housing, to come under the college housing section.

We will do our best.

Any questions?

Mr. McDonough.

Mr. MCDONOUGH. I appreciate your appearance here, Mr. Miller, and I appreciate your suggestion. The question in my mind has been partially answered by the question of the chairman.

Also, you stated-and you seem to be quite familiar with thisthat over the years this organization at the University of California has developed assets of more than a million dollars.

Mr. MILLER. Yes, sir; so I am informed.

Mr. MCDONOUGH. You don't know from what source they obtained their capital funds to develop these houses and facilities?

Mr. MILLER. No; I do not. I am told that there are so many people that have passed through it that some of their graduates have eventually come back to help them. I suppose through prudent management over those years and the fact that these people aren't looking for things that are too plush that we have succeeded in doing this. I have letters here from the university itself, from the members of the faculty and graduates.

Mr. MCDONOUGH. However, all of the assets that they have now were obtained without any Federal help at all.

Mr. MILLER. That is right.

Mr. MCDONOUGH. And now you are proposing that an authorization of funds in this bill be provided for future acquisition of property and facilities. Now, under "Facilities," do you mean the furnishings for the houses?

Mr. MILLER. I don't know. I have not given that any particular thought. That is not included. I think if you helped them get the house, they would manage to get the furnishings.

Mr. MCDONOUGH. In other words, then, just to get your idea, you would be satisfied with an authorization for a certain sum of money for the acquisition of land and buildings in the same manner as the college housing section of the bill?

Mr. MILLER. I would say I would. On the other hand, if it would be possible to write the law so that those things that are particularly