 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? From the CBS television news staff, Larry Lassur and Griffin Bancroft. Our distinguished guest for this evening is Albert M. Cole, Federal Administrator of Housing. The politics being what they are, very few people are surprised when a new scandal breaks in Washington. But the sums of money involved in the new housing scandals are almost unprecedented. Now, a few people know the story better than our guests tonight. So, last the Housing Administrator, just who is to blame for these tremendous losses to our taxpayers? The blame rests upon the officials in FHA who, through their negligence and laxness, permitted these things to occur. I think that the primary blame belongs with Clyde Powell, who was Assistant Commissioner. Well, Mr. Cole, wasn't it true that a very liberal law was drawn up during the war to provide people with housing? Oh, yes. Is this where the loopholes came? No, I don't agree that this is where the loopholes came. It is true that a very liberal law was passed. The liberal law was passed in order to help the people obtain housing after World War II. But the real difficulty in the windfall problem came about by reason of the fact that the officials in FHA were so negligent and so lax in their operation of the program that they permitted the windfalls to occur. Well, Mr. Cole, you lay all the blame, apparently, on these officials, especially on Mr. Powell. Does no blame at all attach to the builders and contractors who did business with FHA? Well, I think the blame falls upon those sponsors and those contractors who took advantage of the lax attitude and the negligent positions on the part of the FHA. Of course, those people are at fault and are to be blamed. But do you think there was any trouble with the law itself, Mr. Cole? Weren't you a member of Congress and the Banking and Housing Committee when that very liberal law was drafted? No, I was a member of the House Banking and Currency when the law was reenacted. That is true. However, the point I'm making is this. It is a liberal law, was a liberal law, which terminated in 1950, but it was not such a law that caused the difficulty. The difficulties which arose by reason of the windfall cases arose by reason of fraud, negligence, crime, frankly, which occurred once more involving the people in FHA as well as some of the builders and sponsors. Well, Mr. Cole, are you satisfied with the law as it stands now? Now that that 1952 has come and the law... The law terminated in 1950. Yes. There are somewhat similar provisions in the present law. Most of those provisions are not quite the same as there were in the 608 program, and the Congress has corrected them satisfactorily, I believe. Mr. Cole, from what you've said, I take it that they were legal and illegal in windfalls, or were they all illegal? Well, I think I would put it this way. It's difficult and it's impossible to put all of the windfall cases in one basket and say they're all the same. They're not all the same. Some builders were able to, by careful construction, by efficient building, out-guess the appraiser and therefore obtained more money than the estimated cost of his building. He did not commit any crime. He did not cause any misrepresentation to secure that money. There were other builders and contractors, however, that obtained windfalls by reason of misrepresentation, fraud and crime. Those are the ones whom I believe should be prosecuted or suits should be brought against them to recover the fund. Well, in other words, a builder who did get too much of a loan but pays it all back, he will be in the clear as far as you're concerned. Certainly, if a builder got too much money and paid it on the mortgage itself, I do not believe there could be any complaint. The complaint was that after receiving the additional amount of money, he distributed it to himself in violation of the law, regulations, and the charter under which he obtained the corporation. Mr. Cole, have we received all the bad news about these windfall profits or are there more to come? We have not received all the bad news so far as the pattern of the situation is concerned. We have not received all the bad news with respect to certain individuals, certain corporations, or certain situations. But the pattern has been established very definitely. Well, on that bad news, perhaps we're a little more politically conscious in Washington than we should be, but down there we hear that a lot more of this is going to break between now and election times. Would you anticipate that? Well, there will be some break between now and election time. I understand the federal grand jury will be in session tomorrow. I'm not sure, but that is my opinion, and I don't know when they will report. Additional information may be obtained through the report of the K-Part Committee if it reports prior to election time. Yes, there will be some additional information obtained. These officials that you blame, were they all Democratic appointees or were there any culprits in the Eisenhower administration? If you place it on the basis of culprits, they were all Democratic appointees. You are a Republican. I am a Republican. Yes, sir. What about Mr. Guy Holiday? Wasn't he an Eisenhower appointee? Mr. Holiday was an Eisenhower appointee and was an Eisenhower Democratic Republican appointee. That is true. Well, would you be discharged by Mr. Eisenhower? No, Mr. Holiday resigned at the request of the President. To get another point, is there any possibility of forcing these builders who reap these windfall profits to return some of the money? I think there's a very definite possibility. As you probably know, the FHA has filed suit to recover some of these funds and will continue to prosecute that litigation until it is determined that the money can or cannot be returned. Well, Mr. Cole, I'd like to ask you about another matter and that is public housing that we've heard discussed a lot and this last session of Congress, as you know, didn't give President Eisenhower as much public housing as he had asked. Do you plan to fight for a renewal of that public housing in the next session of Congress? The public housing asked for by the President was not all that he requested. He received about half of the program which he requested. Therefore, we will continue to ask for additional allotment of units at the next session of Congress. Do you think these scandals imply that the federal government's role in housing is too large and that perhaps some of the responsibility for housing should go back to the states and communities? Or can they do that thing themselves? No, I don't believe that the scandals themselves imply that the federal government is expanding too far. I refuse to admit that the federal government cannot conduct its business in a sound, honest, decent fashion. The federal government has a public interest and that public interest can and will be carried out, I believe. That's the purpose of this investigation. That's the purpose of our inquiry to re-establish the fidelity of the operation of the agency involved in these transactions. I think it's being done. I think it will be done. And I think it can be done. The scandal or no scandal, of course, the building boom continues to boom on. Mr. Cole, how do you account for that? And do you expect it to continue? I think the building boom or the high level of building will continue for a long period of time. Part of the reason is that the economy of the country is sound. It's an ever-expanding economy and yet a stable economy. There's a great demand for houses. During the war, people were unable to buy or build or rehabilitate homes. Now that demand is increasing. The demand is there, the funds are there, and the ability is there. The people want more and more homes and I think they will be able to get them. Well, Mr. Cole, in all this, is there any chance that the price of homes will come down? I know a lot of people are wondering about that. I think that's a very real possibility. I'm a great believer in competition. I'm a great believer in the free market. And I think by reason of the free market and competition, that prices will come down. And as we continue to expand the production of homes, I believe that prices of homes will come down. Do you plan to ask Congress for more laws to make it easier for the individual to finance their home? I know of no immediate proposals along that line. The Housing Act of 1954, which was recently adopted by Congress and signed by President Eisenhower, provides most of the basic tools which we need to assist the people of America to obtain these homes. If those tools are actually used and I believe they will be used, then they can secure the homes that they require. Mr. Cole, you have a new housing law. Are you releasing some of the provisions one by one to keep the boom stimulated? No, not quite in that framework. However, there are some tools, there are some provisions which are retained in the background, shall we say. In event that they are needed, in event that there becomes a decline in the economy, then we are in a position to support certain programs of housing and do the thing which you suggest. Mr. Cole, may I ask, is there any large monopoly in housing? Is there a general motorist? I won't say it's a monopoly, but is there a large group that has great weight in housing? No, that's one of the very interesting things about housing. The housing industry is composed of thousands and thousands of small businessmen. I see no possibility of any monopoly on the part of home builders or housing contractors. Mr. Cole, I'd like to ask one thing. What do you see as a future for the prefabricated houses? I think there's a great future for prefabricated housing. Pretty much in its industry, in its infancy, this is an industry which is expanding and has a great possibility. May I ask you, Mr. Cole, do you think that the housing shortage is over? No, the housing shortage is not over, but the demand for housing has kept up pretty well with the pace of the construction. Let's say the housing shortage is alleviated, is assisted now, and it's in pretty good condition. Thank you very much, Mr. Cole. It's been very interesting to have you up here tonight. The opinions expressed on the lawn-gene chronoscope were those of the speakers. The editorial board for this edition of the lawn-gene chronoscope was Larry Lasser and Griffin Bancroft. Our distinguished guest was Albert M. Cole, Federal Administrator of Housing. That time is money is known to every buckaroo who rides in the rodeo. Prize money is paid on a time basis and seconds count. The world's championship rodeo at Madison Square Garden in New York is one of the important rodeos timed to 100th of a second by lawn-gene, the most honored watch in the world of sport. Lawn-gene timing insures a square deal for contestants, judges, and spectators alike. 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