 It's time for the Lawn Jean Chronoscope, a television journal of the important issues of the hour brought to you every Monday, Wednesday, and Friday, a presentation of the Lawn Jean Wittner Watch Company, maker of Lawn Jean, the world's most honored watch, and Wittner Distinguished Companion to the World Honored Lawn Jean. Good evening. This is Frank Knight. May I introduce our co-editors for this edition of the Lawn Jean Chronoscope? Larry Lusser from the CBS television news staff and August Hector, chief editorial writer for the New York Herald Tribune. Our distinguished guest for this evening is the Honorable Homer Capehart, United States Senator from Indiana. A couple of months have passed since the Federal Housing Administration slipped and fell into a sticky morass of scandal. Nearly 10 years were told, sharp operators have made windfall profits out of various FHA projects. Now our guest tonight as chairman of the Senate Banking and Finance Committee is investigating the scandal. So we'd like to ask Senator Capehart, since some prominent names have been mentioned in this mess, both builders and their backers, all these people actually guilty of violating the law. Well, I don't know that I should answer that question there because we're investigating it with the moment and I'm chairman of the committee and I always try to be fair and honest with these people and I don't think I should prejudge them. However, I will say this that it looks as though at the moment there's been a lot of irregularities. It looks as though there has been a lot of miss or maladministration on the part of those administering the law and laws in the past and it's been very loosely handled. Whether there'll be violations remains, of course, for the courts to decide. Well, would you pass this on to the Department of Justice? Your findings? Oh, yes, of course. And the Department of Justice, of course, have someone sitting there each day at our hearings. Senator Capehart, when did these hearings begin? They began on Monday of this week. And how long will they continue to expect? Well, I suspect it's going to take the biggest part of this year. I doubt very much if we finish before December. Well, Senator, do you think this is going to be a political issue? Actually, the the malfeasance was started perhaps in the previous administration, but it has been going on apparently on the present administration now. Is there any political angle to it? Well, I don't think we certainly are not doing it for political reasons, but however, as I have repeatedly said, we're going to let the chips fall where they may. And of course the the 608 projects that you read so much about on the papers happened a hundred percent, of course, under the Democratic administration, because the law was passed in 1940 and expired in 50. I would say that all the rental properties that are involved, and that is the big end of it, of course, happened prior to Eisenhower's administration. Now, the Title I, that's loans for repair purposes to homes. That has been going on since Mr. Eisenhower took office, and I suspect there's been some irregularities since that time, but you want to remember that the President of the United States and Mr. Cole, the top administrator, are the ones that exposed this whole matter and called it to the attention of the Congress and the American people and asked it something to be done about it, and they have discharged quite a number of high government officials. Well, Coleman Andrews says that about 65 and a half million dollars has been made hay out of, and now is there any chance of recollecting that money? I can't answer that. That's a matter for the courts to decide. It's hard for us at this stage to say whether it can be collected or not. I just don't know. Senator Capehart, have these irregularities been due, do you think, to basic effects in the law or to bad administrators? I think it's been due to both. I think the law was loosely drawn. I think it was bad administration, and then I think part of it is just the good old ingenuity of the American people or the American businessman to get around the loopholes. Well, Senator Capehart, the administration has been counting as President Eisenhower said on a booming housing program to keep the national economy in balance. Now, is this going to hurt the housing program, you think, to scandal? This shouldn't hurt it. It ought to help it, because it ought to get more what I call real honesty and constructive ideas into the housing business. Well, now the housing bill, as I understand it, is in conference. Has that bill taken into account, the defect that has been shown up? Yes. The House had passed the bill before the irregularities broke. We in the Senate had finished our hearings, but we had not handled the bill in committee. And when the so-called scandals broke, we held some hearings, primarily with government officials. And we believe that we have written into the existing law a sufficient legislation to stop all the loopholes. And is the new housing program more liberal in its credit terms? Does it make it easier for people to build homes? There's no question what the present housing bill that we're considering at the moment, and I think will become a law within the next couple of weeks, is the most liberal it has ever been offered to the American people. In other words, the scandal hasn't hurt the liberality of the program. Well, that's correct. But have any provisions been written in to close the difference between the estimated cost of building and the amount that allowed under these FHA mortgages? We have written into the law that when a builder is finished with this project that he adds up the total costs and then certifies that that is the cost and then the government only insures 90 or 80 or 85 or 95 percent, depending upon what the law is under specific titles, that amount. And we certainly are going to stop what we what we know and think of as windfall profits. We're not going to permit that anymore. Do you think the American people don't want it? And I don't think the builders want it. That is the honest builder. I don't think he wants it. Well, is it at least some dwellers in multiple housing projects have refused to pay their rent for a while? Are they legally in their rights to do so? I don't think they're legally within their rights. And we've heard very little of that. And I think that if we find that any of them are within their rights, that ought to be adjusted peacefully and they ought not to organize and get excited about the matter. Because that won't help any. Senator Capehart, will this housing bill formed, do you think, an important part of the president's program? Will it be an important issue in the coming campaigns? I mean, an issue just to prove that the Republicans are doing something constructive and good. As I said before, it's the most liberal housing bill ever offered the American people and it ought to go and will go a long ways towards particularly furnishing houses for the more they low income people in the United States. And and we and we have a new angle in this housing bill that that will that will eliminate slums in the future. We're we're trying to avoid the slums occurring rather than waiting until we do get a slum condition and clear it up. We're we're we and this bill we've written in some features that if it works and I think it will work and I hope it will, we hear in the future, we will never have slums. They will stop them before they develop in the slums. Well, Senator Capehart, now that you're talking about the work of the president administration, actually, now that your party has the authority and the responsibility for running the country, how do you still feel that the standby controls which you were once against and then favored should be a part of the national economy in this international situation? I was ever against them, but I certainly am in favor of them. And I've always been in favor of standby controls. I I think we ought to have a standby controls, giving the president of the United States the right to impose imposed price, wage and rent controls the minute an emergency occurs rather than waiting either even 24 hours. Senator, I think I've always been in favor of that and and think that we ought to have that sort of a law. Now, you remember, I introduced it last year and tried to get it through. But I failed and I see no chance to do it this year. Well, Senator, speaking of the international situation as a member of the Foreign Relations Committee, you made an intensive tour of Latin America last year, I guess it was. And when you were down there, did you think there was anything we could do to prevent these Latin American countries from adopting extreme political systems? Well, yes, I think what we ought to do is to pay more attention to Latin America. And I think we ought to cooperate with the more than we have in the past. And I think we ought to loan them more money on longer terms. And when I say loan more money, I'm not mean. I don't necessarily mean the government. I'm talking about private enterprise. I think we ought to give them longer terms on the things that we sell them. I think we ought to know more about them and we ought to encourage them to build up their own production, their own factories and their own processing of food plants. And we ought to help them to build up their own industry, thereby giving jobs to their own people. Well, how about our tariffs? Are you in favor of reducing those simple trade bill? I think the tariff is the least end of our this international trade business. I I I'm not for either extreme high tariffs, and I'm certainly not for free trade. But I think we pay too much attention to the tariff. I think the thing that we ought to pay more attention to is is long terms and and more loans and more credit rather than the tariff, because our tariffs in comparison to other nations are quite low. And we we do not have export taxes as they do. And while I think we ought to pay attention to the tariffs, I don't think they ought to be too high. Nevertheless, I can't see much good in in in throwing 10 million Americans or 10,000 Americans out of work in order to give 10,000 people someplace else jobs. I'd rather handle it on the basis of loaning the money and helping them to create their own factories, thereby having money to so they can sell and buy among themselves. I want to create more jobs in in foreign countries as well as more jobs here. I don't I don't want to handle this whole business on the basis of throwing people out of work here in order to give jobs there or throwing people out of work there in order to give jobs in this country. I think it can be handled on a basis of of everybody having a job. But then you feel that as the jobs are built up and the factories are built up in the other countries, the trade with our country increases. That's right. That's no question about how about these dollar shortages as these other countries complain of, sir. Well, of course, they got dollar shortages. I've always had a dollar shortage, too. And I suspect you have. I don't know anybody in the United States that hasn't had a dollar shortage. I've never had enough dollars. They don't have enough dollars. Therefore, we ought to give them more credit. So make the dollars that they do have go farther. That's what we do in the United States. We sell on the installable. Well, should the government do this or should private industry give this to the long term? Government possibly can do part of it, but it primarily ought to be done with with by private industry. Well, thank you very much, Senator Kaplan, for a very frank discussion. Well, thank you, sir. The opinions expressed on the Laun Jean Chronoscope were those of the speakers. The editorial board for this edition of the Laun Jean Chronoscope was Larry Lissere and August Teccher. Our distinguished guest was the Honorable Homer Capehart, United States Senator from Indiana. What does the name Laun Jean mean to you? It means a watch to be sure, but much more. The name Laun Jean on the dial of a watch means that here is one of the finest of all the world's watches. 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