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Mr. WOODRUM. You are asking for $270,535 for administrative expenses against $220,000 for the current year.

Mr. PIERSON. Yes. That was reduced from $275,000.

Mr. WOODRUM. According to the statement you have filed with the committee, business is pretty good.

Mr. PIERSON. Yes; we are keeping very active.

What this comes down to is largely, I think, a very small amount for supplies and communications, which will be necessary because of an additional 13 employees. That makes up the $50,000, which is being asked for here.

Mr. WIGGLESWORTH. Sixteen employees?

Mr. PIERSON. Thirteen employees beyond the number estimated for 1942.

Mr. FITZPATRICK. Your business is increasing; that is the reason, I suppose?


Mr. FITZPATRICK. This operation is self-supporting; no money is taken out of the Treasury for it?

Mr. PIERSON. That is right.


We had our first 6 months financial statement prepared as of the end of the year, and our earnings were $3,854,708.61 after deducting expenses, but before paying dividends.

Mr. WOODRUM. That is for a half-year period?

Mr. PIERSON. Yes, sir. That is running at the rate of $7,500,000 a year, as compared with last year, of $5,384,000.

Mr. FITZPATRICK. That accounts for the increase in personnel that you are seeking?

Mr. PIERSON. As a matter of fact, we have no defaults if we can forget for the moment our old $46,000 Spanish peseta matter, which we have to mention each year. The Latin-American loans are all current.


Mr. Houston. How much of that money has been used in South America; for example, Argentina? Did they not get a credit of $120,000,000?

Mr. PIERSON. They had a $60,000,000 commitment from us. They have used part of that.

Mr. Houston. Has Peru used any of theirs?

Mr. PIERSON. No; Peru has used no part of theirs. They are stand-by credits for their central banks, but they have not used them.

Mr. HOUSTON. Was there not a bill introduced in the Senate, an Inter-American bank bill, on which no action has been taken?

Mr. PIERSON. That is right. The hearings, apparently, have not been completed on that.

Mr. DIRKSEN. Mr. Pierson, has it been possible to use any of the $90,000,000 of lend-lease funds which we made available to Brazil in lieu of any moneys that you might lend to the Republic of Brazil?

Mr. PIERSON. No. I think the attitude has been that they should not use lend-lease money for anything such as railway equipment or civilian needs.

Mr. DIRKSEN. Your loan to Brazil is current?

Mr. Houston. What has been done in the way of credits, in Brazil especially? I know that they are complaining about England and other countries giving them credit where we demanded cash.

Mr. PIERSON. There is no just ground for complaint at the moment except that since the war has become a little more violent, a lot of our manufacturers do not care much about export business. Activities are so good at home they brush off the export business, either by not answering the letters, or by loading the price. That has had an effect down there which is unfortunate, and we are trying to meet that by personal contacts with the leading manufacturers.

The real problem is not so much in Brazil, as it is a material problem from our standpoint.

Mr. Houston. And that will be a problem when this war is over.

Mr. PIERSON. Yes. We should have a good backlog when the war is over.


Mr. HENDRICKS. I notice in your justification that for the first 5 months of the 1942 fiscal year your earnings were $3,000,000 plus. How much is allocated to the import bank?

Mr. PIERSON. It has a total lending power of $700,000,000. At the present time our capital stock is $175,000,000.

Mr. HENDRICKS. In other words, you are doing a good banking business here.

Mr. PIERSON. We think it is a pretty good record.
Mr. Houston. It has always been a good paying proposition.
Mr. PIERSON. Yes, sir.

Mr. WIGGLESWORTH. Could you furnish, either for the record or to the committee, a list of the transactions during the past fiscal year?

Mr. PIERSON. Yes; we have a complete list here. I do not know whether you want to put it all in the record or not; it is rather bulky.

Mr. WIGGLESWORTH. You might leave it with the committee. Is there any objection to putting it in the record ?

Mr. PIERSON. I do not think so.

Mr. WIGGLESWORTH. Leave it with the committee and we can decide whether to put it in.

Mr. WiGGLESWORTH. Could you also furnish a statement as to defaults, as to both principal and interest, if any?

Mr. PIERSON. We do not have any.
Mr. WIGGLESWORTH. None, in either respect?

Mr. PIERSON. We have the Spanish tobacco exception. That is represented by the equivalent of $46,000 worth of Spanish currency. We do not call it a default, although we cannot get dollars out of it.

Mr. WIGGLESWORTH. That is the only default in either respect? Mr. PIERSON. That is right.


Mr. WIGGLESWORTH. I wish you would put in the record the figures for your nonadministrative estimate for the fiscal year, and what is the personnel now. You state in your justification 6 officers and 28 employees, but the Budget break-down would seem to indicate you are requesting 58.

Mr. PIERSON. It is higher now than when this was prepared.

Mr. WIGGLESWORTH. When you revise your remarks, I wish you would indicate what the personnel now is and what the request is.

Mr. PIERSON. All right, sir. (The information requested is as follows:) For the fiscal year ending June 30, 1943, the estimate for nonadministrative expenses is $10,000.

The bank now has 6 officers and 35 employees. The request for 1943 is for 6 officers and 52 employees.

Mr. WOODRUM. Thank you very much, Mr. Pierson.






Mr. WOODRUM. The next item for our consideration is that of the Federal Housing Administration, which is as follows:

Administrative expenses: Not to exceed $15,041,343 of the various funds of the Federal Housing Administration, as follows, (1) the mutual mortgage insurance fund, (2) the housing insurance fund, (3) the account in the Treasury comprised of funds derived from premiums collected under authority of section 2 (f) title I of the National Housing Act as amended (12 U. S. C. 1701), and (4) the defense housing insurance fund shall be available for expenditure, in accordance with the provisions of said Act for the administrative expenses of the Federal Housing Administration, including: Personal services in the District of Columbia and elsewhere; travel expenses, in accordance with the Standardized Government Travel Regulations and the Act of June 3, 1926, as amended (5 U.S. C. 821-833), but there may be allowed in addition to mileage at a rate not to exceed 4 cents per mile for travel by motor vehicle reimbursement for the actual cost of ferry fares and bridge, road, and tunnel tolls, and employees engaged in the inspection of property may be paid an allowance not to exceed 4 cents per mile for all travel performed in privately owned automobiles within the limits of their official posts of duty when such travel is performed in connection with such inspection; printing and binding; lawbooks, books of reference, and not to exceed $1,500 for periodicals and newspapers; not to exceed $1,500 for contract actuarial services; procurement of supplies, equipment, and services; maintenance, repair, and operation of two motor-propelled passenger-carrying vehicles, to be used only for official purposes; payment, when specifically authorized by the Administrator, of actual transportation expenses and not to exceed $10 per diem in lieu of subsistence and other expenses to persons serving, while away from their homes, without other compensation from the United States, in an advisory capacity to the Administration; not to exceed $2,000 for expenses of attendance, when specifically authorized by the Administrator, at meetings concerned with the work of the Administration; typewriters, adding machines, and other labor-saving devices, including their repair and exchange; rent in the District of Columbia; transfer of household goods and effects as provided by the Act of October 10, 1940, and regulations promulgated thereunder; and all other necessary administrative expenses: Provided, That all necessary expenses of the Administration (including services performed on a contract or fee basis, but not including other personal services) in connection with the acquisition, protection, completion, operation, maintenance, improvement, or disposition of real or personal property of the Administration acquired under authority of titles I, II, and VI of said National Housing Act, shall be considered as nonadministrative expenses for the purposes hereof: Provided further, That, except for the limitations in amounts hereinbefore specified and the restrictions in respect to travel expenses, the administrative expenses and other obliga tions, including nonadministrative expenses, of the Administration shall be incurred, allowed, and paid in accordance with the provisions of said Act of June 27, 1934, as amended (12 U. S. C. 1701): Provided further, That not exceeding $300,000 of the sum herein authorized shall be expended in the District of Columbia for purposes of the Public Relations and Education Division: Provided further, That not to exceed $50,000 of the amount made available hereby for administrative expenses may be transferred to the National Bureau of Standards to carry out specific projects of the Administration, upon the request of the Administrator, for studies of the properties and suitability of building materials with particular reference to their use in low-cost and low-rent housing, including the construction of such experimental structures as may be necessary therefor, and for printing, binding, and disseminating the results of such studies.


Payment of losses: Not to exceed $4,000,000 of the funds of the Reconstruction Finance Corporation, advanced or to be advanced to the Federal Housing Administration under authority of the National Housing Act of June 27, 1934, as amended (12 U. S. C. 1701), and not to exceed $4,000,000 of the funds (after allowance for administrative expenses as authorized under the heading, Administrative expenses, Federal Housing Administration) in the account in the Treasury comprised of premiums collected under authority of section 2 (f), title I, of said Act, shall be available for the payment of losses under insurance granted under section 2 and section 6, title I, of said Act.

JUSTIFICATION OF ESTIMATES Mr. FERGUSON. Mr. Chairman, I would like to submit for the record the following justification:

Justification of estimates Regular appropriation, fiscal year 1942..

$13, 388, 000 Supplemental appropriation, fiscal year 1942.

1, 366, 453 Base for fiscal year 1943.Increases and decreases required for fiscal year 1943:

14, 754, 453

Increase Salaries..

$352, 649 Communications.

$22, 175 Travel..

85, 000 Printing

12, 842 Rent.

70, 268 Equipment

20, 000 Transfers to other Government agencies

3, 990 Total

426, 907 140, 017 Net increase.

286, 809 Total estimate fiscal year 1943.

15, 041, 343 1, 280, 514. 12 34, 350, 549. 12



The Federal Housing Administration was established on June 30, 1934, pursuant to the National Housing Act of June 27, 1934, “to encourage improvement in housing standards and conditions, to provide a system of mutual mortgage insurance and for other purposes.

Under the provisions of the act, as amended, the activities of the Federal Housing Administration may be divided into four classes:

1. The insurance of lending institutions under title I against loss on loans made to citizens for the purpose of repairing, modernizing, and improving their property, and the building of new structures.

2. The insurance of lending institutions under section 203 against loss on loans secured by mortgages on one- to four-family dwellings.

3. The insurance of lending institutions under section 207 against loss on loans secured by mortgages on large-scale rental properties.

4. The insurance of lending institutions under title VI against loss on loans secured by mortgages on one-to four-family dwellings constructed in designated defense areas.

None of the activities of the Federal Housing Administration involve the lending of Government money, the whole theory of the act being to encourage the lending of private capital on a sound and profitable basis.

The following is a balance sheet of the Federal Housing Administration as of June 30, 1941:

Balance sheet, June 30, 1941


ASSETS Current assets:

Cash, exclusive of re

volving funds. $4, 105, 639. 23
Accounts receivable

other Government

12, 691. 96
Available funds Re-

construction Finance
Corporation (title I

insurance reserve)-- 133, 359, 693. 75
Inventory of stores... 60, 525. 90

$137, 538, 550. 84
Notes receivable

sale of title I prop-

19. 45
Notes receivable (title

I insurance losses
On notes insured

prior to Feb. 3,
1938, amenda

7, 146, 384. 50
On notes insured

under Feb. 3,
1938, amenda

6, 161, 436. 14
On notes insured

under June 3, 1939, amendment.

4,096, 572. 17

17, 404, 412. 26

$154, 942, 963. 10

Fixed assets:

Mortgage notes and purchased con

tracts—title I..
Real property-title I...

Furniture and equipment..
Mutual mortgage insurance fund, net.
Housing insurance fund, net.
Title I insurance fund, net.
Defense housing fund, net.

11, 003, 20 123, 173, 57 1, 146, 337. 35

1, 487, 915. 98 2, 393, 986. 01 4, 831, 314. 38

Total assets...

199, 287, 242. 71

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