LIQUIDATION OF WAR HOUSING AND VETERANS' RE-USE HOUSING Recommendation No. 14 That the liquidation of the war housing, veterans' re-use housing, the Subsistence Homesteads and Greenbelt Towns programs be accelerated. LOANS TO COLLEGES FOR HOUSING Recommendation No. 15 That the program of loans for college housing be terminated. PREFABRICATED HOUSING LENDING PROGRAM Recommendation No. 16 That the liquidation of the prefabricated housing lending program be accelerated. ALASKA HOUSING LOANS AND DISPOSAL OF REPOSSESSED HOUSING Recommendation No. 17 That the liquidation of the Alaska housing loans be accelerated. Recommendation No. 18 That the Government dispose of all repossessed housing units held by it as soon as practicable. Recommendation No. 19 URBAN PLANNING That the program of urban planning and reserve of planned public works in the Housing and Home Finance Agency be terminated. LOANS FOR PUBLIC WORKS Recommendation No. 20 That the authorization of the Housing and Home Finance Agency to lend money for public works except as they are necessary for public housing projects be repealed. Recommendation No. 21 That the operating functions of the Housing and Home Finance Agency be made subject to the Government Corporation Control Act. FINANCING AGRICULTURAL ACTIVITIES FARM CREDIT ADMINISTRATION Recommendation No. 22 That the acquisition of stock in the banks for cooperatives by their borrowers be accelerated. Recommendation No. 23 That the banks for cooperatives be required to place their holdings of United States securities in the Treasury in return for a non-interestbearing credit. 94642-57- 2 Recommendation No. 24 That the 143 production credit associations in which the production credit corporations own stock be prohibited from paying dividends to their stockholders until all Federal capital has been repaid. Recommendation No. 25 That the production credit corporations be liquidated, and that pending liquidation they deliver their holdings of Government bonds (which amounted to $41,809,000 on June 30, 1954) to the Treasury in return for non-interest-bearing credits. Recommendation No. 26 That, in order to effect mutualization, the Federal intermediate credit banks charge a premium on loans to facilitate the acquisition of their stock by their borrowers. Recommendation No. 27 That the United States securities held by the Federal intermediate credit banks (amounting to $50,208,000 on June 30, 1954) be turned over to the Treasury either (a) to reduce the Treasury's investment in the banks by that amount or (b) in return for non-interest-bearing certificates of indebtedness of the United States. Recommendation No. 28 That (a) the authroization of the Federal Farm Mortgage Corporation to furnish $500 million of funds to the Federal land banks be rescinded, (b) the Federal land banks continue as liquidators of the Federal Farm Mortgage Corporation, (c) the land banks deduct liquidation costs from collections and pay the net collections to the Treasury, and (d) that the Congress require the mineral rights to be transferred immediately to the Secretary of the Interior without waiting for the date originally fixed by law. Recommendation No. 29 That (a) the $150 million stock in the banks for cooperatives held by the Agricultural Marketing Act revolving fund be returned to the Treasury for future redemption by those banks, and (b) the remaining assets and the liabilities of the fund be turned over to the Treasury for liquidation. DEPARTMENT OF AGRICULTURE FARMERS HOME ADMINISTRATION Recommendation No. 30 That the Farmers Home Administration instruct the county committees advising the agency to screen more carefully applicants for loans to insure compliance with the criteria for loan applicants contained in the law. Recommendation No. 31 That the Farmers Home Administration require adequate equities under all its loan programs except disaster and emergency crop and feed loans. Recommendation No. 32 That the Congress require the Farmers Home Administration to charge interest, premiums, or other fees on loans made by the agency sufficient to cover the administrative expense of the lending program and the cost of money to the Treasury. COMMODITY CREDIT CORPORATION Recommendation No. 33 That periodic inspections of commodities held in storage for the Commodity Credit Corporation be made to determine their condition and that the Congress be informed of the decline in value resulting from deterioration. Recommendation No. 34 That the Commodity Credit Corporation discontinue its program of advanced payment on commodities and that it make only purchase agreements at the price-support level offered to producers. FEDERAL CROP INSURANCE CORPORATION Recommendation No. 35 That premiums charged by the Federal Crop Insurance Corporation be increased to an amount which will cover losses, the cost of administration, and provide reserves. RURAL ELECTRIFICATION ADMINISTRATION Recommendation No. 36 (a) That the Rural Electrification Administration be reorganized on a self-supporting basis; (b) Secure its financing from private sources; and (c) As reorganized, be made subject to the Government Corporation Control Act. FINANCING BUSINESS FEDERAL DEPOSIT INSURANCE CORPORATION Recommendation No. 37 That the authorization of the Secretary of the Treasury to lend the Federal Deposit Insurance Corporation up to $3 billion be carried on the books of the Treasury as a contingent liability. EXPORT-IMPORT BANK Recommendation No. 38 That (a) The Export-Import Bank cease normal commercial shortterm import-export loans; (b) The Export-Import Bank be set up as the sole Federal instrumentality for making long-term export loans, loans for development of foreign resources, and loans to foreign governments; and (c) Congress provide by annual appropriation the funds necessary for the purposes described in (b). SMALL BUSINESS ADMINISTRATION Recommendation No. 39 (a) That the Small Business Administration be brought under the Government Corporation Control Act so as to secure its comprehensive audit by the General Accounting Office on a business basis. (b) That it be continued for another 2 years during which period it will have an opportunity to demonstrate its usefulness to small business on sound business principle. (c) That, in the meantime, it should charge sufficient interest to earn its operating expenses arising out of lending and to pay interest to the Treasury on Government funds equal to the cost of money to the Government. VETERANS' LIFE INSURANCE Recommendation No. 40 That the veterans' life insurance program be reorganized on a selfsustaining basis, paying its own administrative expenses and be made subject to the Federal Corporation Control Act in order to secure the advantages of more efficient organization under that act. INTERNATIONAL MONETARY FUND Recommendation No. 41 That the Congress review the International Monetary Fund with a view to determining whether its service is any longer necessary from the standpoint of the United States. GENERAL RECOMMENDATIONS Recommendation No. 42 That the Congress revise the Government Corporation Control Act to provide for Federal charters for Government corporations having greater uniformity in standards, requirements, and practices. Recommendation No. 43 That the Secretary of the Treasury be required to impose rates of interest on the agencies discussed in this report for Federal advances or contributions equal to the going rate of interest paid by the Treasury on its obligations of comparable maturity. Recommendation No. 44 That all lending and guaranteeing agencies charge such fees to their borrowers as will permit them to reimburse the Treasury for the cost of money advanced to them and cover their own administrative expenses. Recommendation No. 45 That the recommendation made by the 1947-49 Commission on Organization of the Executive Branch be adopted: We recommend that all Government business enterprises be required to surrender to the Treasury all United States securities held, up to the amount of the capital furnished them by the Government, and that they receive in return noninterest-bearing credit in the Treasury. They should not be allowed to invest their idle funds in any other securities Recommendation No. 46 That all nonmutualized agencies engaged in lending, guaranteeing, and insurance be required to report each year to the Congress and the Treasury in a form determined by the General Accounting Office the total amount by which earned income failed in the previous year to Cover: (a) operating expenses; (b) interest on advances by the Government at a rate equal to that on the public debt of comparable maturity; (c) losses on loans or investments; (d) reserves against losses; and (e) if the agency is not paying a return on the Government's investment, interest received on holdings of United States securities up to the amount of the Government's investment. Recommendation No. 47 That a representative of the Secretary of the Treasury sit ex officio on all boards or commissions having the power to affect the fiscal policy of the United States. His major function when serving in this capacity would be to convey to such agencies the credit policy of the Federal Government. Recommendation No. 48 That the General Accounting Office expand and strengthen its inspection of the business activities and policies of these agencies in addition to the comprehensive audit and that it report its findings to the Congress. Replies Received From the Departments and Agencies DEPARTMENT OF AGRICULture, Hon. WILLIAM L. DAWSON, OFFICE OF THE SECRETARY, Washington, D. C., March 29, 1957. Chairman, Committee on Government Operations, House of Representatives, Washington, D. C. DEAR CONGRESSMAN DAWSON: This is in reply to your letter of February 15, 1957, and consists of a progress report on new policies or procedures which this Department has put into effect as a result of the Hoover Commission recommendations on lending agencies. This Department's report of May 17, 1955, stated in part as follows: "Four principal agencies of this Department provide financial assistance to farmers throughout the country in one form or another. These are the Farmers' Home Administration, the Commodity Credit Corporation, the Federal Crop Insurance Corporation, and the Rural Electrification Administration. The Commission on Organization of the Executive Branch of the Government has made specific recommendations with respect to the operations of each of these agencies and in order to reply to your inquiry it appears advisable to treat each agency separately, as we have done in the attached statement." |