much, and which I think offers the best chance for the future to relieve congestion in our cities.

If congestion cannot be relieved, at least we hope to keep it from becoming worse by making it more and more desirable to live in rural areas; where electricity will be available; where, if this committee has its way, through water loans and sewage grants and loans, we can make life in the country just as desirable and more so. Certainly, rural areas have many advantages against the overcrowded cities. We have been proud to have a part in changing your policies through the years, including the recent emphasis on insured mortgages, which spreads your ability to meet some of these rural needs. We have tried to make additional personnel available, including a substantial increase last year. To that I have to add that we are disappointed that $56 million, that the Congress appropriated for water and sewage grants, has been placed in "reserve," as they say on that side of the table; on this side of the table we say "frozen." We have been disappointed that the Farmers Home Administration has not had available to it each year the total amount that Congress has appropriated.

I want to say again that we feel that within the limitations that have been imposed by the Office of Management and Budget, and with the many, many other problems which have existed-part in the economy and elsewhere Mr. Smith, you have done a fine job under all these circumstances. I have mentioned some of these things in advance of your general statement so that you might touch on them.

If in your general prepared statement you have not, I hope you will feel free in the enlargement of your statement to give us the total number of houses that we have made available, the total number of loans and applications you have had in housing, and the total number of requests you have in your various programs.

We would like to know, too, the requests you have had for water loans and sewage loans, as well as grants, what part you have been able to meet, where they stand now, and what the average grant has been.

All of this we would like to have you give attention to. We realize we are just raising these points, although I am sure you anticipated some. Feel free in connection with your remarks to supply the information.

I believe first we might hear from Dr. Cowden who has the overall responsibility for this segment of the Department. He is a long-time friend of ours and has come here and appears in connection with other programs.

STATEMENT OF ASSISTANT SECRETARY THOMAS K. COWDEN

Mr. COWDEN. Thank you, Mr. Chairman and members of the committee.

FARMERS HOME ADMINISTRATION

Applications for Initial Loans and Grants on Hand and Received
Fiscal Years 1970 and 1971 through February 28, 1971

Information on these programs for 1970 is not available.

The following tables show the number and amount of direct and insured rural housing loans made for 1970 and the estimates for the 1971 fiscal year and the number of housing units for the same periods:

The following table shows the number and amount of direct and insured water and waste disposal loans, as well as grants, obligated in fiscal year 1970 and estimated for fiscal year 1971. Amounts are in thousands of dollars.

The average grant in fiscal year 1970 was about 23.6 percent of the total project

costs.

ture, with primary responsibility for programs tha cort Tute directly to building and revitalizing the rural economy. These programs are an integral part of our effort to improve the quality of life in rural America, and to balance our future national growth.

The work of the Department of Agriculture is largely people-oriented, and certainly this is true of Farmers Home Administration. The wide range of its supervised credit services is aimed at benefiting both farm and nonfarm rural people.

The Congress is further strengthening the ability of Farmers Home Administration to serve the rural sector. The 91st Congress passed the Byrnes Bill, making it possible to finance an expanded water and sewer loan program through authority to sell tax exempt bonds. Other legislation broadened the housing loan authorities of the Farmers Home Administration.

There have been other significant actions during the past year. Farmers Home Administration is subordinating its liens and cooperating with other lenders to stretch its loan dollars. There has been great emphasis on local decisions and involvement of the private sector.

The rural housing program is at record levels. Grants and loans for housing are approximately $1.49 billion in fiscal year 1971. This compares with $794 million in 1970.

In this session of the Congress, hearings have been held on an operating loan bill. The bill is designed to introduce more flexibility into the funding of this important program by insuring operating loans and making technical amendments concerning the loan account.

The proposed budget for Farmers Home Administration has increased, as have the responsibilities of the agency. With the rapid growth of Farmers Home Administration, we are working on improved methods for strengthening the internal administration of the agency.

There is still an important job to be done. Generally speaking, the people of rural America have lower incomes, lower educational attainment and a higher incidence of poverty than the rest of the nation. Farmers Home Administration, with the support of the Congress, will continue to be a leader in the job of improving the countryside.

Mr. James V. Smith, Administrator of the Farmers Home Administration will furnish specific 1972 budget requests.

Mr. SMITH. Before beginning, may I thank the chairman for his comments at the outset of this hearing. I believe, Mr. Chairman, the quickest and most effective way is to read the statement.

Mr. WHITTEN: We would be glad to have you proceed in that way. Mr. SMITH. Mr. Chairman and members of the committee, in my previous appearances before this committee, you have been most considerate of me, of my staff, and of the Farmers Home Administration programs and objectives. I assure you that your thoughtfulness is much appreciated, and it is being translated directly into service for farmers and other citizens of rural America.

Your continuing support of the rural credit programs of Farmers Home Administration is helping to build a stronger rural America. By the end of our present fiscal year, Farmers Home Administration