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This aenorstadGai i s .is. response to jftHKtf nqpNflt for my
and. suggestions om the ©tore biH as adopted yesterday
by the Senate* lou ask SNsrtlcularly how the financial
appear to fos«.r 0a the fiscal and noaestwy policy oi* the
lao imw tliese aaci ©flier pMVijtaHi cottpar& with tli«
variously made by the President» the Secretary of tfct
^ sad tint infoztaal O0Hdttt«e desigaated by tbe Secretary

! • examine the original b i l l whcai i t was referred to

the fre&anry hy the Presideat*
As fm 1movy the b i l l as reported' t^o the S^smte on
differed in s^sireral particulars fron Ite M i l as i a t r o February 24« I noaher of changes in the b i l l as reported
new been a&ile by the S@aat#f cad copies of the b i l l as adopted
by til© Senate will aot be &¥sllable until Tues€sy#

1 aa a,t the

disadvantage* therefore, of aot im-wtng tlie full text of ike Senate
b i l l in i t s present for® 'befo2*e M©, feat I sbmaiet B$LJ t M t , frcMi the
fiseal sud ;^onatary aspect, there are five prinelpal points to be

1# A corporation to be known &s the Onited State®
Sousing Authority is "created in the Department of the
Interior and amier th« general supervision of the Secretary
thereof,11 bat with a quasi-iadepesdaat board of three aasbere
that is authorised to raise ftaads by selling notes, bonds,
etc*, in the opca market and pledging the credit of th«?
United States for the payment of principal &M& interest of
its obligations*
£• The obligations of the corporation are exempted
from all taxes except sortaxee, estate, inheritance, sad gift

the proceeds froa 4IM sale of its bonds9 the
oorporatioa is authorised to sake loaas to State and local
public housing agencies. Lo&as made by the corporation are
to bear interest at *th«s going Federal rate8 (defined &s that
on the most recent Tre&surj iume hairing a ^s-turity of 10
years or isore) plus | of 1 per cent, and be ^secured in suefa
taarmer, end be repaid within such period not exceeding 60
jearss as say be cleeaed sdvisabl©11 by the corporation, Tlie
loans may be subor&in&t© to loans obtained by tm public
housing agencies from other sources, and the projects on
which Federal losais are aede may be those which are pledged
as security for each, other loans.

4» The corporation is authorised to sell #700,000,000
of its obligations over the next three years, the maturity
to be not m®TB th&a 60 yearr*, the rate of interest not more
than 4 per e@at, sad tb& terms, conditions, manner of issue,
a»4 prices to be prescribed by the board of the corporation,
*with the approval of the Secretary of the Tre&stiry,1*
5, Although the bill appropriates for tfcg current
flseal year only #26,000,000, the corporation is authorized
to sake cosmitasata daring the three fiscal years beginning
July 1, 1337, of approxiastely $1,247,500,000 for housing
subsidies* Of this sum, i§Q,GQO,000 i& authorized for capital
grsats duriag this three-year period aim 11,217,500,000 for

assimL contributions1* over & period of 62 years after the

©»&et»eat of the M i l *
Tha first three points eai^eratad above are incorporated
in the general aad pexaaneot provisions of the lrill| the fourth
rel&fcfts to the first, bat applies particularly to the operations of
the next- three je&x® idth respect to loans, as doe® the fifth with
respect to capital grants &nd contracts for amraal contributions*
In t&eir presast form, all five points would in &y opinion be object ionafcl© to the Treasury, and th© firsst sad fourth objectionable
also to the Board of Governors of the Federal Eeuerv© System* I
shall ratura to these sutterg presently and trjr to suggest

-4modifications that would in the a&irt meet such objections
alteriag the essenti&l purposes of the bill with respect to public
housing. It w i n be convenient at this point, however, to consider
the five points in question in the light of views previously expressed
by the President, the Secretary of the Treasury, sad the grotip of
advisers &ad eoamiltast© that I shall, refer t© hereafter la this
sesaorasdiaai simply as the frea.sur>r condt'tecr*
Discussing the Wagner bill with Secretary'' Morgeathau in
April, the Presideaat suggested, as a substitute for its subsidy provisions, a foraala predicated upoa local r^spoiasibility for initiating public-housing projects lay acquiring and p&ying for the laud
involved. The formula as givea ia the President^ haadwriting ig
its follows?

H,000 t 000

We gr&at 45%
and pay wages
of fill relief
Say 1C# of the
Gov. Contrib.

560, OCK)

$ 440,000

Financing: City pays
la cash for lead


O.S. p.£«ys in ce,sh


Balance to be financed


It is ay understanding, partij from
between Secretary Morgeatlsaa. and the Treasury eaanittcte,
pertlj from .my emu recollection of remarks by the President ot
White louse- conferences—particularly the conference at which tbe
President Aaked ®e to follow tbt ffagner bill lapl year aft&r lr«
Orium resigned frost the Trewsary—the.t thi President aesired a
Federal -subsidy for publie iaouaiag to be svailablQ only to o<m>~
jaunitiee which WST® tbeaselres willing to pat a sabsta&ti&L stale©
in the enterprise* Ho v^ueh requirement hag been coataiaea in any
of the ffegner bills, thomgh the Senate &i& this w<5^: am.s©d the
&s reported by etiding • stipulation, presumably to be inserted, la
Seetlon 10, thst a no p w t of th® fhHl feereia ;proffrided* should b®
•lit available unlegs atf until the State or local


^contributed or agree4 to {^>ntriLmie I per ccsit of the resital
subsidy herein provided.*
The laagusge- of this aaeadisMnt^ it is to ki acted. par^Qtbetically# is not altogether elear, M t what is cwid@ntlj aesst is
that the State or local genreraaeaft shall saake aa tsaamaX ecmitriburtloii
et^i&l to 5 per cssat of the annual Federal contribution* If the State
or local contribution* like the Federal contribution^ is to "*- in
cash rather than to soa^ other form (see* Section 15(7} m§ reported.,
which Is 15(6) as adopted) this also ought to fct clarified erbea the
bill goes to

The formula outlined by the President would indicate
that he had in stind &3 per eest of the original eost of • project
as the fair proportion to be provided by the ooaaiamity and SS to
45 per e«et as the fair proportion %o h® provided by the Federal
* The Wagner b i l l of l&et year set 45 per MMl of th©
or dervelopteai cant, as the jMadtissja Federal
The present b i l l pits the msxisaxm ^utborizm


is to be paid aaimally la^teaa of in a limp mmf at the
eqaiv&l&at of 108 per e«at of the project <x
computed, foe CKiatribation required of Vtm eosmmitj i s 5,4 p©r ee&t,
Aa I am »ritiag t h i s ja&aoi&a&m "after hours^* Mi do
not Imve the sssas of elieekiiig tbeae l a t t e r figures, I shaH ask
you to b&Te t t a l verifiod by oae of the treaaury &cttiarifr-s«


inpresslotit however, i s that for m-&r% #1,(XX) spent oa the acquisition or developaejxt of • project, th» Fedepal Gorerameat
bfe olsligated to pay, aa the- basis of the preheat vgoi2kg
rate of Interest • » • plus 1 per centiim*1 (Sectioa 10b) #55 a
^ear for 60 years 9 aad the locality fl.?5 a yeer for 60 years.
If these 8srt.iB.ates &r& correct, then the t o t a l subsidies involved
la such a project would be equivalent to t loapHsaa grant at the
present time of 11,154 for each #1,000 of M original coat of the
project—the Federal portion $1*080 and the local portion $54#
The jxj&sibilitles of the President*3 foraula were canvassed by the Tresmiry commit tee, and as • VNftlt of thia

thf. cofssitta? rtsjortec to i-ocr- - : * * iorgt&ath«uit in thv l a t t e r part
of Sky, that th<- flMHBlfl coula not *x S practical riMtf be- svall&d
of under existing State M i local houaiag legislation* » d that
essaatial pmrpo&ms of %hm i s ^ e r b i l l eoull W l fei MftHlMi—^»r
tlieir f—XlJMCtica would act ®ay rate te#j loag

>fi| i<wl IT the

forsml^ !*5.ero no*" ardc the basis of I'sderml policy* f t e glaple
id tuct, altiiaogli I majority of t t e States use sanj l o c a l i t i e s
fii%il©-l»'afiiig laglslatioa f thie l^gialatloa Is for tile sest ptzti
pore&UMfcii oa tti IMHHft policy of recent jears #ai oa t&e stibst-astiel eontios&tlon of tfest poliey ss conteapltitfMi In tiie saoees^tve ^agB^ir b i l l s .

It does aot -proride for isimi»~aaM outl&ye of

easily or for -MTUI! c:sfe oontrli5iatioiisf OB tht prrfc of the States
or t h e i r tjolitlcal stibdi¥lsiojis»
?>itfe these f&eis in aiinrf, Secretary larg€atbcm
us Ml alternative t o the Frssidsnt's formla f eeeordiag t<
lectioa f t"o#;t the MMten Fedeml grant *& 60 p«C c^tt of H i
developsiaat or &.0qni#itioa cost of a project 9 proildad that in.

of tiis pro;pertj fraa State wtf local IflHMk Mr»
the presort director of th& Hoasing Mvisiai of t t e Ptiblie
had e»pthadists.iiS th« p">int thftt* nalass a project

i t could not possibly be pat erlthia reach of the fsailies for

i t wan intended*

I understead that the Secretary

modified his suggestion to provide that tm local
raiglst tsike WH other fora tban complete tax exemption, so long
as the Ml result M i the same*
Sy further recollection i s that the Secretary suggested
the financing of the cost of housing projects, enter & d above the
asunmt of the Peders.1 grant, l^r IMMI through the Public ??orks
Adainistration, or through whatever body night aaeceed. i t , the
funds for sueh loans, however, to be provided "by the Treasury
not by the Mia of bondis of & IMMN& housiag corporation«
I t %M to ht noted, aoreover, that botfe the Presldont
the Secretary oo&teaplateci that th*< Federal subsiay would take the
form of capital gi^aats rather than aanuel contributions as provided
la the present iagner b i l l .

It i s iaj imderstfiadiag that the Presi-

dent and the Secretary alike viewed with great disfsTor i fiscal
arrangement tmder which Goagre8#es orer the next SO-odd yc-ers @oald
be obligated to sake annual approprletioaai i'or subsidies on projects
constructed during the taaure o£ the pMNft AdainietraticKu


Secretary farther took the position, as I iM&erstsad it,f that
the projects were In reality public storks, and since the funit to
coastract then wsr«? to be «idvaae@d wholly or for the isosrt part T y
the Federal Government over the nest few years, tliose faads should
be raised curreatlj throiagh tasstion or borrowing by the Treasury

la the MM nsmaer «i the foods for any other publie M i t t M
tiadeytskesi* Ion will notice tJb*t tore would be a l l the store
reason for t a t s procedure «iiea. th>- astount of sanual Feder&l cooMfrSfttaMj as aathsrlzcrd ia the ending b i l l , is ajor* than
cieat to aa&rtis-s, |gr equal ampMl pajHMOltf of principal aaei
tbe |7O0»000,000 of IMM « H M M
In to ttM M4lM4l of «ibsiflyf

in tfel b i l l .


fagaey b i l l (the Ssaator i s I recent convert to the
rs&thod; a* rejectee if yer.r wbsa I
i t os Ma sad told his that klfl proposed 45 per cent cenitai
mysCUi not release slam families) «ss p:r»f0»"fel6 to the cfe^it
by the Preslotat snd i'ecretary fergsutlma* Tais
wed costly snd disap;,K?iatiai.: duriag thfc Hm
it h£-d b^aa in op, ratios Xa the United tJtfttos, tmC
IK tPMft Britain H i on, the Contlm&t,* wh*-.rfc thf^rc lit^I bees & imeh
hmger jmfcUe-hoasing experieitee, this ca.pital^raat MUMtf liB,d. hMl
tried Mi loag sisce «.bBndoa^ for tkfl ansmal-eomt-rlbut.
Q tide other b£ad^ tine fve&BaTj committee felt tbst the
aad ^r© KfffwiiJlti adadnlstratiort oi' imhllc iMMteg th-1 sigbt
pMifcti nader Mi amaafi.l"-eoatriixitio^ a-etbod wms J^lt|M0tttei i s the
HI tei3Xf f i r s t t by tiic- fallure to retjajure • 5y.b^t.4:atlal local

(the "bill did Ml rc-qnire nay at o i l ) ; iwwwmiy fcy the

-laprovision whereby the Federal Goirerament si&at hi~ obligated to lead
the t o t a l eoui of my given project and then sake flastucel contritetioas each year HOTS then sufficient to amortize i t s lo&aj and,
third, by the provision that tbe ssount of the tnaadaoaa «inssal
Federal contribution M to be directly proportioned to HM expendit
ure for aeqoisition or cLevelopaeat if • project•
Eaeh oi1 tbe©e tkrae ©oaditioa© s^cstied to the Tr
comltted to be •aauifestly objectio&alde^ hot the three in
ticwi sea^d to iavitfe costly con struct ion9 if not actually to pot a
premlua on i t , and I M to be M&OMlA* i'roa the -point of view of
mw&& financial policy*

I t i i to ht note',;- that the second, .sad third,

eoaditioas are retained in tm b i l l as a d o p t s by the Senate, sad
that the f i r s t has beos modified only to DM extent of tvq
local pftrticipsiticm which, aa I hM* areviously point*xl out,
approximately th« .relationship of #54 to $1,080* I hOM M doubt
that g^ associates on U I Trefttfary esasraittee^ would. n^Sfi HMk a
local particiimtioja as too small t o as®ire the adraatagee ascribed
to the aaiaual-contributioa method of subsidy.
Fa,ciaf th© apparoat diiesuss re|>r©sented by the views of
the President and Secretary Morgentluiu and the los» sao. ©absidy proviBiooa of the fEagner b i l l , the Treasury cosuittoe suggested a mstito
of subsidy that on the one Mad ^ould avoid cos&Bitting Camgmem&
loag iato the future to vot© appropriation.s for HMUHUMI contract ad

for at the present tiaws, mo,f oa tibe ot&«ir hand, rould s t i l l preserve
the *iWfei0M of annual contributions as opposed to a capital grant.
I M s slternative aethod ooirte«plated, f i r s t , th&t the sus authorized
for loons froa year to year would be currently ippSJQpeistfeai aad
established to &. fiatd t© be known. ft$ tbe Public Sousing
Flood, oat of wkieii the loam© WpM %% aade as «uthoris6
th&t MM relatively a&all sum requires, for istaual
during the f i r s t two or three JNNI vould be currently aporoprietod
and allocated to this £tmd RS a. backlog} tMrd, that the aaaaal
federal coatrlbotiems payable to any local public bousing aga&ay
would 'be credited against the indebtedness of that %i«aey oa account
of loans aade to i t ©at of the fund; fourth, th&t the edinusl debt
senriee tins cr@<lit€^ or otherwise eoil&eted ^oul£- b© paid into the
fund to the aaooat o.f the &at3u»rised ooatribationa for each c a r r o t
«nd thcr balance credited, to atieoellfinecFue reeeiptc of the
In t h i s s&naer the loans made out of the flmd 5*ould threw
ia dsbt serried from year to year eaoagh BOBO? to amortize fully,
over e period of 60 years, c-verr loan mm mxt of the iwid on the
basis of tbs present


goiaf Federal M|0 ot interest 11 asd tba other

relersat provisions of tfee Wagner bill* The Treftsmxy
farther contemplated, however, that • provision requiring m
t i a l local participation would probably % iMftsjIii In t)ie b i l l before
i t s ©nactseat zm4 that the debt service os loans sa<ie oat of tltt

-12would therefore i t e m baek considerably sore than enough to take
e&re of a l l ssnusl Federal contributioas*
With respect to the asimiai of the; aimiial federal
bufcioa to be made to aay given project, the Treasury eoflodLttee
suggested tfe&t, in lieu of the provision of the lagner b i l l which
bases |1M aabsldy an the development or acquisition cos't—a foroula
wMch tend© to validate costly jrojt»ct& aiad to peoolize ao:re frugal
efforts—th& ikgsacy adalnisterlagr the b i l l be authorised to contract
t o pay a&eh jear, for a specified nuabdr of f M % Ite estimated
aanoal deficit iavolved $M auUdzig HM propfc-rtj ^.Taila.iiLe at the
outset of. operation to the income—group for which i t Is intendisd*
words, the rental figare to b* attained, ratiier then the
o i t t «oaM fee the basis for mmtm%%Mg the ^ubsidj»


t o t a l aacnmt of contrilKitioDS to be aisde in sny o&e year would s t i H
be limited, M 111 tlie pending b i l l t bat tlie flexibility of tke subsidy
ia relAtiaa to tlie need of any giTi® project woald ie gPMri^f iMMMM
low to revert to the five items that I ^mmeratei at the
•begiaaiag of thie a&Eorsndasu The _reriew thiit I \mvm given of suggeei
loas variously m&ele by the Freaidest, Secretary Sorgenthsea, mid the
Treftsury ^swsitte©! will I W Indicated in l«xj|e part nodifications
H 9 the President nay wish to consider tad thaa pase along to
Senator isgser and Coagr^ssaas SteagsH as a working teais for SR

if the Bouse cososiittee reports, and the Bouse p

-ISb i l l different fro® that p&saco by the Senate* These
sight result somwhat as follows*
1. file b i l l would be revised to (Mete in the Xtep&rtaent
of the Interior 9 in the aaaaer proposed in the b i l l as adopted
by the Senate, a Division of Public Housing, which aould be
uaser tfo gsaeral supervision of the Secretary of the Interior,
but administered by & Federal Director of Public Bousing to be
appointed hy the President by and with the schrice «md consent
of the Seaate* tfcftf would avoid the cumbersome operations of
a corporation and « board; i t #oul^. be in ccmforaity cith the
f a f c * ! reorganization ptal| and. i t VHftl give the n©^
direct access to the peraoaa«lf etgolpssBt) :r@eords? and
project plftns of th© Bousing Bivision or the Public Sorks Adadnistration, the present management of ^hich has apiHirsatly
profited greatly hy the mchp-eritieis&ed (no doubt too srach
eritleiftod) sdstaices or ais&dr^itures of the preceding asa&g<»~
aent» The sgency a^ime^ *0nlted States Bousing iathority," which
is proposed in the Wagner b i l l , «ould be replaced by on.® that
nor« accurately described the nature of the »g©acy*
2* T @ creation of a new class of taz^-exeapt securities
by the Federal Gorernaicait would be avoided if the modification©
here outlined were made in the b i l l .

In $2xj event, the reasons

for objectioas by the treasury to the granting of tlie ts»~exespt
privilege to • new class of securities are well fcnowu The b i l l

as i t now stand© bases both the aaaual contributions and the
interest rat# to be. charged M I M H OR the Rgoiag Federal
MM of i n t e r e s t , n mti not on the rate st which the- proposed
housing corporation would obtain i t s funds*

Hence the l a t t e r

rate sroulo to no way iaur^ to HM benefit of low-income families
housed o»d©r the provisions of the bill*
5. Th© b i l l would be revised to authorise the Federal
Director of Public Housing to make loans to State sad local
public housing sgeaeies, sueU loans to "be s&eured i s sush manner
as in th@ judgment of tit® Director would assure thsir amortisation
in substantially equal ammal payments of principal snd interest
orer a period aot exceeding 80 fMBHM Prcridedf that after
July I , 19S0J no such, loan could be made except oa the security
of the full faith and credit of the- State or political subdivision
thereof to which the loan was made* Provision would aim be sad©
tiriat M T annual Federal contributions p?5yftble to a local pablie
housinii sgsncy attist f i r s t be applied to the accrued indebtedness
of the agency to the Federal Gorernis^it if such indebtedness
exists* These modifications would strengthen a .provision of the
pending b i l l (Section 9) that Bessas in part to be 2»ich too liberally
or loosely iMH% sad to reader the security to be- given for
Federal loans somswb&t dubious* ^&e public bousing
appear for the laost .part tofeMNI^ e s estahlisfaed

-16legislation d e a r l y designed to present their obligations
fross becoming & ehsx-ze on anything but the low rents &n& the
Federal subsidies*
4* the b i l l ratifi fct revised to create I ftmd to be
.known M the Public Housing BevolviQg Fund, which would be
available to the Federal Director of Public Housing for Iflto
making of lo&as sac! annual contributions in aid of law~rent
housing projects* The Treasury would fee mitborlxad to make
such a naad available for loaaa in the anoints now provided
for loans In the %gaer b i l l , plus 15,000,000 for coatribatioas
in the current fise&l yesr end $12,500,000 for the
in the aaxt fiscal .year* flMM l a t t e r are the S'ua
in the lagntir b i l l for annual contributions la those years*
The sua to be appropriated for loans would be $200*000.000 ia
the eurreat fiscal year, 1250,000,000 in the fiscal year 1959,.
mi C:2S0t000.G0Q ia the fiscal year 1340* M i wold upset the
present calculations of the Bureau of the Budgefc, la the f i r s t
place, however, the probability of the current year1© authorisation being availed of within the fiscal year, or the three
ye-ars1 authorisations within tfcfl neaci three | W % i s reoote of the lestgth of time involTe^i in getting housing
projects under way ?n& cosapleting th«pa* In the MtMtf |fltei%
the revolving—fund arrs.ngeasi&nt i s preferable frost- e fiscal e,a<3noaetary ^ i a t of Tiew to the injection af a mew agaae^r into

the open mejrket with authority to issue

la the third place, the arrangeaent Is preferable

to one tfcrt makes the present Congress cosait future Congresses
to appropriations for subsidies over IIM next 60-odd years*
5. ffee b i l l would be rwised to authorize the Federal
Director of Pablle Housing to eater into OMftMMfei for- the
imysest of annual contributions in aid of lo*-rent


projects* over • period not exceeding 60 years, in saieh fiootmt
as, when added to anj State or local contribution contracted
for over the saae period In any given c&sey Httli in tbe js3%-*
MMt of the Director be sufficient to assure the lo««>r€3it
character of the project* the annual Federal contribution*
would be conditioned on State or local contributions of, s&y,
not lass thm SS 'per cent of the IMHHl of the Federal
botioas—that %B$ t-he Federal Ooveroaeat would gire 80 per
of the subsidy aoeded* the State or local government S3 per ceat*
Prorisloa would be made, however* t M t the State or local subsidy
might ta,kE- the fona of partial financing* lm.& tm whole or in
part, eoimi&ity f a c i l i t i e s or services* or partial or complete
remission of taxes f the annual value of which would h® determined
under regolatio&s prescribed by the Director*

under "this sharing

of tfci eo^t of the subsidy, the annual contrilxition© of $20*000,000
for 60 ymru prorided, for iM the peridiag b i l l eoulct be

-17$16,000,000, or by whatever percentage of the t o t a l subsidy
sight be required of Uw State or political sabdlviaioa*
The M B I M paid into the revolving ?m£ in. debt serriee OK
loans M£t out of the fund MNAI 'be W11 till i for th© p&yaeot
of tbe annual eostribettlGas contracted for by the Director.
Th» NfdMMfk of a substantial contribution oy the States or
political subdivisions

condition of the aaan&l federal

coartribtitioss, together with tlM revolviog'-iund method of
handling tbe loans -sac &ram&l contributions^ i*ould do away
with the &iK»saloa6 ©itmition is which, under the t®ress of the
pending "bill* tbe Federal Government could 'be put in the
position of making 100 per cent loans to public kMM&U agescle©
ana thss. giring a l l H m ^gesichm &U, tke money they would neaci
(aad isore) to pay aJU the interest M i amortise Iftn principal
in ftiii over i perioa of 60 years*
I t will be evident to you, I UtiUfHj, that in


these suggested aodifications I hav© undertaken to iricorporste
(a) the views of th& Prefildent srith regard to the local initiative
M i reaponsibility to be esso&ed ®< the avoidance of present commit*
meats obij^atiog fatare Congressesf (b) the views of
OB those »me points M the ua.ia fiscal sad
of the b i l l , (c) the views of Senator Wagner on the p
of soaual csoatributioBS sad tht ; principle of t o t a l subsidies ©qoivaloat
in pres^it value to the t o t a l ajgjotant of loans to he made, and. (d) the

-18iriew® o£. the treasury eomdttee on the method of providing the
funds for Mktag the loans and annual contribations*
ton will perhaps also liar© ootlead UNA I here omitted
an/ aentlon of* the capital-graat provisions of* HM pending b i l l
(Section 11) in the outline of suggested aodificatlon*

Them pro-

Tislcms ®>m to sse to be drawa in saeh a msnaer, ^heo eoatrssted
with the ssnner 5n p-hich Ha eiumal-eontributlon provisions aredrasmy as to Mks i t obrloas that they »oald not be an&led of.
The sum IBTOI^OC in thos, moreover9 is less thsn 5 per c^iat of
tfetft infolded Ln the housing to be subsidised l^ aaxmal contributions*

I cannot imagine that aaysme- would seriously objeet- i f t h i s

ssetion of the b i l l sere struck out and quickly forgotten.

-18views of the Treasury coaaittee on the method of providing the
funds for mafciag the loans and annual contributions*
Ion will perhaps tlso have noticed th&t I have omitted
anj mention of the capital-grant provisions of the pending bill
(Section 11) in the outline of suggested modification. These provisions sees to me to be draws in such a sasner, when contrasted
with the saaner in which the aanuaJL-coatributioa provisions are
drawn, as to sake it obvious that they would not be availed of.
The mm involved in them, moreover, is less than 5 per cent of
that involved in the housing to fat subsidised by annual contributions* I cannot imagine that aavone would seriously object if this
section of the bill were struck out and quickly forgotten..