Senator SPARKMAN. That will be all until 2: 30 this afternoon when we meet in the Old Supreme Court Chamber on the second floor of the Capitol. By the way, Mr. Cole, we shall want somebody from Public Housing here at a later time, not today. Mr. COLE. Yes; we will be happy to. Senator SPARKMAN. You realize we have some disposal of publichousing units. Mr. COLE. Off the record. (Discussion off the record.) Senator SPARKMAN. We want someone with reference to the disposition of these particular housing projects. Then we want the record to carry some data, information, as to the progress of the program, and so forth. Mr. COLE. All right. Senator SPARKMAN. The committee will stand in recess until 2:30. Then we will meet in the Old Supreme Court Chamber on the second floor of the Capitol. (Whereupon, at 12:50 p. m., the subcommittee recessed, to reconvene at 2: 30 p. m., the same day, in the Old Supreme Court Chamber, United States Capitol.) AFTERNOON SESSION (The subcommittee was reconvened at 2:35 p. m., Senator John Sparkman presiding, in the Old Supreme Court Chamber, Capitol Building.) Senator SPARKMAN. Let the committee come to order, please. Senator Bible has a brief statement to make in support of his bill. What is the number of that? STATEMENT OF ALAN BIBLE, A UNITED STATES SENATOR FROM THE STATE OF NEVADA Senator BIBLE. S. 1569, Mr. Chairman. Senator SPARKMAN. S. 1569; we are very glad to hear you at this time. Senator BIBLE. Thank you, Mr. Chairman and Senator Capehart. I welcome this opportunity of appearing before you for a few moments on behalf of S. 1569 which has been introduced by Senator Malone and myself at the request of the city administration of Las Vegas, Clark County, Nev., conveyed to us through the members of their city housing authority. I am personally acquainted with this project, the sale of which to the city is the subject matter of this bill. I watched the growth of this particular project since the early days of World War II. The housing authority of the city of Las Vegas, Nev., has been operating this so-called Kelso-Turner project for persons of low and medium income since September of 1947. During all this time, priority has been given to veterans and servicemen and their families. Prior to the operation of this project by this authority, through lease from the Public Housing Authority, the project has been operated by the housing authority of the county since its construction in 1941. The takeover by the housing authority of the city of Las Vegas was in 1947. The project has filled the needs of veterans, servicemen, and civilian employees of nearby Nellis Air Force Base, as well as migratory workers, during all of these years. The need of this type of housing within the financial ability of low- and middle-income families still definitely exists, and in the event housing of this nature would be taken out of the market many families would suffer considerably due to the fact that there they are unable to secure decent, sanitary housing within their capacity to pay. It is the desire of this Commission, this housing authority of Las Vegas and, as you probably are well aware, they are a voluntary group of men serving without remuneration and simply as a public service to continue the operation of this project by their legally constituted authority to meet the present and future needs of this segment of the overall economy. This authority has agreed to pay to the Federal Government a fair and just price, which price has been set forth in the bill which Senator Malone and I have introduced, a figure of $452,200. The authority agrees not only to return to the Government a just price for the project but to continue supplying safe and sanitary housing for these low-income families without any subsidy from the Federal Government. I think the records will show that low-rent housing projects are now being constructed with the assistance of the Federal Government on a subsidy basis. Las Vegas Housing Authority emphasizes it will return to the Government more than the original investment and give the same service to the families of low- and middle-income groups. The independent and Federal rent surveys which have been made to establish the rents in that particular area and to indicate those being charged in the project show that they are comparable to the private accommodations within the city. And certainly the authority has no intent whatever of raising those rents. On the question of payments in lieu of taxes, the Las Vegas Housing Authority has in the past been authorized by the Federal Government to make a payment in lieu of taxes equal to the taxes that would be paid if the project were privately owned. This has been done for many years, since its operation, I think, in 1947. And the authority will follow the same procedure if and when title is transferred to it. This particular project in this Kelso-Turner tract was built, as I said earlier, in World War II. It was built originally to further the war effort. And the need for housing of veterans, servicemen, and migratory workers still definitely exists. It is the plan of the authority to continue this type of service to this segment of the economy of that particular area. In the opinion of the authority, without governmental supervision by the authority the project could easily revert to a slum. In the event that this condition should arise in the future, the whole project could then be demolished, the land reverted to much-needed parks, recreational areas, and so forth in that particular area, and one of the streets, namely, 12th Street, which is also known as Maryland Parkway, could be extended to meet the overall master plan of the city. The project is classified as Nevada 26021 as a permanent Lanham housing project specifically built to meet the needs of the then McCarran Field, now Nellis Field, situated about 9 miles north of Las Vegas. The project is built on approximately 19 acres of land. About 6 of these acres are now in use for playgrounds and park areas. I will submit for the use of the committee two maps, one showing the definite location of the Kelso-Turner project within the city of Las Vegas, the other showing the types of units within the project itself. The project does consist of 125 units, 46 duplex and 33 single buildings. I have included in the statement a breakdown of the various types of units, some 1-bedroom, 2-bedroom, and 3-bedroom units, with the rents that are now being paid-21 1-bedroom units (approximately 650 square feet each unit); 72 2-bedroom units (approximately 750 square feet each unit); 32 3-bedroom units (approximately 850 square feet each unit). Rents, including utilities, are as follows: 1-bedroom, $63 per month; 2-bedroom, $70 per month; and 3-bedroom, $75 per month. The buildings are of concrete block construction, with low, flat roofs and concrete floors. The utility lines, the gas, water, and sewer, the streets are all project owned and maintained. It is a project which has to be operated as a unit and one which could not conveniently or expeditiously or successfully be broken away from unit operation. Mr. Chairman, I would like the permission of the committee to insert at this place in the record a letter from the acting mayor of the city of Las Vegas, Nev., indicating the interest of the city council and mayor. They are the appointing board of the housing authority, and they indicate the same general reasons which I have outlined. I would also like the privilege of leaving with you for your further information-though, of course, I assume it would not be made a part of the reported transcript-copies of the two maps which point out the exact location of the area and of the 1-, 2-, and 3-bedroom units within the Kelso-Turner tract. Senator SPARKMAN. Without objection, the letter will be included in the record, and the two maps referred to will be made part of the committee's files. (The letter referred to follows:) CITY OF LAS VEGAS, NEV., HOUSING AUTHORITY OF THE CITY OF LAS VEGAS, 811 North I Street, Las Vegas, Nev. March 8, 1957. (Attention Mr. Herbert Gerson, executive director.) GENTLEMEN: Reference is made to your discussion with Mayor C. D. Baker relative to the trip to Washington, D. C., by members of the Housing Authority of the city of Las Vegas for the purpose of securing agreements and legislation to enable the housing authority to purchase Kelso Turner, Nev 26021, by negotiated sale. I understand that in this discussion Mayor Baker was advised that the Nevada congressional delegation requested an expression from the mayor and board of city commissioners on the subject matter. We feel that the efforts of the Las Vegas Housing Authority to purchase Kelso Turner for the continued housing of low- and middle-income families of veterans, servicemen, and others is very commendable and certainly fits in with the overall master plan and redevelopment plan of the city of Las Vegas. The necessity for the relocation of families who would be displaced by the contemplated urban renewal and redevelopment program within this city must be considered, and if the city is to be successful in the elimination of slums and blight it is absolutely essential that the housing authority be in a position to do its just part by the combined operation of this and other housing projects for the unfortunate families. In addition, the continued housing of essential migratory workers, veterans, and servicemen, within their capacity to pay, is a must in the overall economy of this city. Therefore, you are hereby authorized and directed to inform our Nevada congressional delegation in Washington that the mayor and board of city commissioners of the city of Las Vegas do heartily endorse the proposal to secure this Kelso Turner housing project by the housing authority for the purposes enumerated above through a negotiated sale at fair and just value, and it is hoped that they will use their good offices toward this accomplishment. Sincerely yours, REED WHIPPLE, Mayor pro tempore. Senator SPARK MAN. Senator Capehart? Senator CAPEHART. Who arrived at the price of $152,000? Senator BIBLE. The figure was arrived at, Senator Capehart, by an independent appraiser. I do not have the name of the independent appraiser. It was made by an independent firm selected by the housing authority and the Government itself. Senator CAPEHART. Your interest, of course, is in selling it regardless of the price-that is, providing it is a decent price? Senator BIBLE. That is correct, and we are interested in meeting the standards of full cash value, and that is what the report of the appraiser shows-that this is the full and true cash value at the time that the appraisal was made. Senator SPARKMAN. You are interested in selling to get it out of the Government's hands and also in buying in order to get it into the hands of the city authority, are you not? Senator BIBLE. That is correct. Senator SPARKMAN. In other words, they will operate it? Senator SPARKMAN. As I understand, it will be operated as a unit to give relief to the housing situation there in the city of Las Vegas. Senator BIBLE. And I believe the housing authority, as I have previously stated in my testimony, have operated this particular unit for a period of 10 years, since 1947. You would have to see the unit. I think the map points it out. It can be operated only as a housing authority unit. It could not be broken up. Senator SPARKMAN. We have no report from the Agency yet on the bill. Is it your understanding it will be approved by the Agency? Senator BIBLE. It is my understanding that the Agency is in full accord with the bill and will so recommend. The bill was introduced just a few days ago. Senator SPARKMAN. Yes. Senator BIBLE. Time has not been sufficient to get a report. Senator SPARK MAN. I understand the report is under preparation. Senator BIBLE. That is correct. Senator SPARKMAN. We will have it shortly. Thank you very much. Senator BIBLE. Thank you very much, Mr. Chairman. (The following was received for the record:) UNITED STATES SENATE, Hon. JOHN SPARKMAN, United States Senate, Washington, D. C. DEAR SENATOR: My colleague, Senator Bible, has submitted a statement for your subcommittee in support of Senate bill 1569, which was introduced by Senator Bible for himself and me. I wish to join Senator Bible in his statement and I hope it will be given favorable consideration. With best wishes, I am GEORGE W. MALONE. Senator SPARK MAN. Our next witness this afternoon is Mr. Ralph H. Stone, the Assistant Administrator of the Veterans' Administration. And Mr. Sweeney accompanies you? STATEMENT OF RALPH H. STONE, CHIEF BENEFITS DIRECTOR, ACCOMPANIED BY THOMAS J. SWEENEY, DIRECTOR, LOAN GUARANTY SERVICE; JOHN W. DERVAN AND PHILIP N. BROWNSTEIN, DIRECTOR'S STAFF; CARL SINGER, ASSOCIATE CHIEF ACTUARY; AND T. F. DALEY, ASSOCIATE GENERAL COUNSEL FOR LEGISLATIVE SERVICES, VETERANS' ADMINISTRATION Mr. STONE. Mr. Chairman, I am Ralph H. Stone, Chief Benefits Director of the Veterans' Administration. Mr. Sweeney is Director of Loan Guaranty. And we have Mr. Dervan and Mr. Brownstein of the Director's staff. We have a rather summarized statement that we desire to put into the record and to answer any questions, of course, that you may ask of us. In accordance with the request of your letter of March 8, 1957, the Veterans' Administration is pleased to report to your subcommittee on the matters under consideration by your committee which are related to the veterans' housing program. In connection with certain of these subjects, the Veterans' Administration has furnished reports with detailed comment to the committee on S. 88, S. 726, S. 912, and S. 929. In substance, the Veterans' Administration has opposed the proposals to use the reserves of the national service life insurance fund as a source of governmental support for veterans' loans. Among other factors, it is noted that since the NSLI reserves are not maintained as liquid credits by the Treasury Department, it would be necessary to raise whatever funds as might be used in support of veterans' loans by refunding a portion of the present certificates held in the NSLI account with the proceeds of new issues offered to the public. The proposal such as that in section 2 of S. 88 which would require the Veterans' Administration, together with the Federal Housing Administration, to prohibit or regulate the discounts, fees, or charges payable by builders or sellers, attendant on the origination or sale of Government guaranteed or insured mortgages in the private secondary market, is not regarded by the VA as a desirable measure. Our experience with section 504 of the Housing Act of 1950 has led us to the conclusion that aside from the serious administrative difficul |