(The statement referred to is as follows:)

Rental projects with premium paying loans closed during the year 1941

Mr. WIGGLESWORTH. Now, let me ask you in that connection about the final column, the valuation figure. How was that determined? Mr. FERGUSON. In the first place, all of these loans are on new houses, so we process them from the plans and specifications. We have a cost-estimating section that estimates the actual reproduction cost of that building, and then we have our local offices appraise the land, and so forth.

Then we estimate the cost of putting in necessary utilities, and we add that all together, and that is what we call the summation cost; and then

Mr. WIGGLESWORTH. This is land plus everything else, is it?

Mr. FERGUSON. Yes. It is land plus everything else that the act says we may include. There are certain things that the act says we may not include in the valuation, but the act is pretty specific as to what we shall include in it.

Mr. WIGGLESWORTH. Have you made valuations for land alone? Mr. FERGUSON. On these?

Mr. WIGGLESWORTH. Yes. I wonder if you could add another column for that table; in other words, so we could see the valuation of the land before the building is added?

Mr. FERGUSON. Oh, I think so, I think so. Of course, we value the land. We do not value the land as raw land. We value it as

improved land, what it is worth as a part of the improvement, and then we check that valuation against the capitalization value.

In other words, we will take that property and we will put the rent on it which our local directors tell us can be obtained, or which is fair, and we will take the whole project, and we will find out what it will earn at that rental after payment of reasonable expenses of operation, and then we capitalize the cost for the value of it from its income, and the we take the lesser of those two valuations, the summation or the capitalization valuation, we take the smaller of the two.

INCREASE IN PERSONNEL AND OTHER OBLIGATIONS

Mr. WIGGLESWORTH. You have given us a very clear statement of the increases you are asking for. I wonder if you can reconcile the Budget set-up as they have given it to us? Looking at the Budget work sheet, you would get the impression that there was an increase in personnel of 155 in the Department and of almost 500 in the field, and that there was a substantial increase in other obligations. Then they off-set that apparent increase by an item of $1,366,453, which they call "obligations resulting from appropriation contained in public law," in the fiscal year 1942. Do you know what that item refers to in the print?

Mr. FERGUSON. Perhaps Mr. Burrows can answer that and give the reason for it.

Mr. BURROWS. At the request of the Bureau of the Budget, the figures appearing in the 1942 column are the same as those appearing in the original appropriation, totaling $13,388.00, and we merely showed $1,366,453 in a lump sum at the bottom. We did not change any of the various items, salary, travel, and so forth.

Mr. WIGGLEsworth. What was that item?

Mr. BURROWs. The $1,366,453?

Mr. WIGGLESWORTH. Yes.

Mr. BURROWS. It consisted principally of additional travel and additional salary. I think small amounts came for some items of supplies, too. We suggested showing the whole amount of $14,754,453 completely itemized by objects in other words, restate the entire 1942 appropriation; but the Budget Bureau decided we could not do that, because the deficiency appropriation had not passed at that time, so we had to show that as it was originally.

Mr. WIGGLESWORTH. Is that the deficiency appropriation?
Mr. BURROWS. Yes; the $1,366,453 is a deficiency; yes.

Mr. FITZPATRICK. Do you insure loans on unimproved property?
Mr. FERGUSON. No.

Mr. FITZPATRICK. What would you call "improved" property? Mr. FERGUSON. It must be improved by a residence adapted for the use of one to four families. We do insure loans on a combination store and dwelling if the commercial part of the property does not occupy more than 25 percent of the area.

Mr. FITZPATRICK. Then you would call it "improved" only if there were grading and paving, water and sewer, and so forth?

Mr. FERGUSON, That is right. Of course, we insure loans on houses serviced by septic tanks, but they must have all the modern conveniences.

NUMBER AND AMOUNT OF SALARIES FOR DIVISIONS OF PUBLIC RELATIONS, EDUCATION, AND PERSONNEL

Mr. WIGGLESWORTH. I wish, if you have not given it to us, you would insert in the record the number carried and the salaries, in your personnel division, also in your division of education, also in your public-relations division, both departmental and field.

(The information requested is as follows:)

Mr. WIGGLESWORTH. How much will you spend, as a matter of fact, for education and public relations in the present fiscal year?

Mr. FERGUSON. Do you want me to answer that now? What is that, Mr. Burrows? I think there is a limitation in the act, isn't there? Mr. WIGGLESWORTH. The maximum is $300,000.

Mr. BURROWs. That is right.

Mr. WIGGLESWORTH. Are you going to spend it all?

Mr. FERGUSON. Oh, no.

Mr. WIGGLESWORTH. How much are you going to spend?

Mr. BURROWs. About $180,000.

Mr. WIGGLESWORTH. About $180,000?

Mr. BURROWS. Approximately; yes. It is $180,000 for 1943. The original figure, for 1942, I think was slightly larger.

Mr. WIGGLESWORTH. You want $180,000 for 1943?
Mr. BURROWS. 1943; yes. That is for both divisions.

STATEMENT ON WORK OF PUBLIC RELATIONS AND EDUCATION DIVISIONS

Mr. WIGGLESWORTH. Will you also give us, in that connection, a statement such as you gave us a year ago (p. 127 of the hearings), showing in detail the actual work in that field?

Mr. FERGUSON. Yes.

Mr. WIGGLESWORTH. Releases, articles, speeches, moving pictures, radio, cost of the moving pictures, and the number of showings, the number of hours of radio, and the stations utilized-all the detail in that general picture.

Mr. FERGUSON. We will do that.

(The information requested is as follows:)

The statement appearing on page 127 of the hearings on the independent offices appropriation bill for 1942 is herewith repeated.

One of the primary objectives of Congress in enacting the National Housing Act was the encouragement of private capital into the home-mortgage field, and of the building industry in its own rehabilitation. During the past year, which has brought residential construction up to the highest level since 1928, the Federal Housing Administration has continuously and consistently followed the policy of helping industry to help itself.

At present the Division of Education activites are largely those of an adviser to mortgagees, builders, manufacturers, and distributors of building materials as

to ways and means by which they may, through their own advertising, benefit in the sale of their goods and services from the provisions of the National Housing Act.

The work of the Public Relations Division is largely the dissemination of factual information on current Federal Housing Administration activities, policies, rules, regulations, and accomplishments.

At the same time, it must be kept in mind that there is no obligation on the part of financial institutions, the building industry, or the public to use the facilities offered by the Federal Housing Administration. If any of them, therefore, are to derive the benefits offered by the act, its provisions and congressional amendments, as well as administrative revision of regulations made from time to time, must continue to be explained to them.

The Federal Housing Administration has interpreted the title of the act as a specific mandate from Congress, and, consequently, has used every means at its command to place before the public the desirability of home ownership and the maintenance of home values. In doing so it has had the generous cooperation of newspapers, magazines, including trade journals, radio broadcasting stations, moving-picture theaters, and others, who have all given freely of time and space without cost to the Government.

This policy, it is believed, increases the protection to the borrower through creating greater soundness in Federal Housing Administration operations, because the greater the volume of insurance underwritten, the larger will be the income to the Government, and the greater the spread of the risk.

Division of Education.-Number of personnel and annual salaries compared to the same period a year ago:

Radio broadcasts.-Between June 30, 1940, and July 1, 1941, three 15-minute network_broadcasts were presented over the facilities of the National Broadcasting Co.

Over independent radio stations during the same period approximately 51,000 broadcasts were presented representing a total of 1,580 hours. The estimated value of these broadcasts, presented without expense to the Federal Government, is approximately $380,273.00 at the commercial rate. During the same period the Federal Housing Administration has furnished upon request script and transcription service to 568 radio stations.

Motion pictures.-One 10-minute technicolor short-We Americans-produced at no cost to the Federal Government and released June 26, 1941, now is running gratis at the rate of 400 showings per week in leading commercial theaters throughout the Nation. Additionally at the request of and in cooperation with the Department of State this and the other films for theatrical distribution have been made available for showing in South America, Canada, New Zealand, Australia, Switzerland, and Sweden.

FILMS FOR COMMERCIAL THEATER DISTRIBUTION DURING THE YEAR ENDING JUNE 30, 1941

Design for Happiness (technicolor short):

Showings.

Attendance..

Homes of Today (technicolor short):

19, 248 5, 335, 828

12, 520 3,092, 310

FILMS FOR NONTHEATRICAL DISTRIBUTION DURING THE YEAR ENDING JUNE 30, 1941

Exhibits and window displays for the period of June 30, 1940, to June 30, 1941:

Corrugated bank lobby displays and/or other bank counter cards displayed

in financial institutions..

5, 320

Window displays:

No. 10..

3, 200

No. 5..

10, 560

13, 760

Distribution upon written request of material by the Public Relations Division is as follows:

Mr. WIGGLESWORTH. Have you got a public relations and labor relations set-up in your organization?

Mr. FERGUSON. No, sir.

Mr. WIGGLESWORTH. Neither one?

Mr. FERGUSON. No.

Mr. WIGGLESWORTH. Is the maximum rate of interest under title I still 9.72?

Mr. FERGUSON. On the modernization loans, yes. On the mortgage loans it is 5 percent straight interest.

NONADMINISTRATIVE EXPENDITURES

Mr. WIGGLESWORTH. Will you give us the figure also for your nonadministrative expenditure; that is, what it has amounted to. (The information requested is as follows:)