I should point out that our State office in California serves California, Nevada, and Hawaii, which must be a substantial part of the land territory of the United States.

Farming is, so far as agricultural loans are concerned, farming is spotted and generally characterized by large farms, so that the problem of our people working with family farmers in the agricultural area is most difficult. It is also one of the most rapidly urbanizing States in the Nation, which makes even rural housing programs difficult. So that in a very real sense, California is a special case.

Self-help housing, on the other hand, is something of a special case, too. The problem of organizing a mutual society, as it were, to build their houses without friction, without conflict, is a long, slow educational process. Whereas we can process normal conventional housing loans rather quickly, it does take what may seem to be an inordinate amount of time to go through the process of being sure that a group organizing itself for mutual self-help purposes, actually does have a common understanding of the undertaking they are assuming.

Hence, from the time the idea is born of a mutual self-help group and the time they begin construction is often longer than it would take for a conventional housing loan program.

We do have a significantly effective program of self-help housing in California, I believe. We have, if my memory is correct, about 160 self-help houses now under construction, something like 150 in which construction is completed. This is the biggest program of this sort that we have in any of the States, I think.

Because our total workload in California, Nevada, and Hawaii is scattered and limited, our manpower resources are of necessity also scattered and limited.

I think in the area in the San Joaquin Valley to which you referred, Mr. Chairman, we have perhaps seven employees and I believe that Self-Help, Inc., has 52 just working on self-help housing. Self-help housing is perhaps 10 percent of the responsibility that those seven employees of ours have in that area. I am sure that the good people involved in directing and stimulating self-help housing programs in the San Joaquin Valley, with 52 people working for them, will generate a great deal more interest than our seven people who spend, let us say, 10 percent of their time responding to that interest will ever be able to keep up with, and I do not suggest that the answer is necessarily a concentration of our personnel there.

I believe that we will work out of this. I realize, suddenly, that I am not responding at all to your question about admonitions against frills. We have an authority in our section 502 housing loans to construct modest but adequate housing. There is a very great tendency on the part of our employees, as well as on the part of applicants for housing, to pick housing plans out of colored slick paper magazines which show two fireplaces and air conditioning, and game rooms, and patios and a bathroom with every bedroom, and obviously, we have to establish some kind of standards as to what is moderate.

There is always a tendency on the part of the employees of any organization to take quite literally guidelines that we give them. We have given them guidelines that indicate that fireplaces generally are not necessary in constructing moderate homes. For families who never

experienced inside plumbing at all before, we have an inclination to frown upon double-plumbing.

Mr. RESNICK. I think this did not get involved, notwithstanding the limits of their income, with the limited amount of money available, but I was thinking in terms of very little extra, very modest amounts, that the housing could be made to look a lot nicer, rather than bare bones and that sort of thing.

I am sure that if you look in the testimony, early in the testimonyI would be very happy to try to find it and dig out that particular part-that basically, what they were saying was simply that with very little extra things could look better. It wasn't a question of extra bathtubs, but the exterior of the house could be made to have much more value and look much nicer, and that the Farmers Home Administration seemed to be against a good-looking home. That was the gist of it. There was also involved in the State of California the local authorities, who gave them a pretty bad time out there.

Mr. BERTSCH. We certainly have no allergies where esthetics are concerned. We are delighted to see our borrowers build nice-appearing homes, landscape them nicely. In fact, we include funds in our loans for landscaping, for making houses pleasant in appearance.

I recall reading this testimony and being quite surprised by it. I had, incidentally, spent much of the previous day before the witness we are referring to testified, meeting with him. He raised no such question. as I recall, in our meetings. I think that we will reach a meeting of the minds with the self-help enterprise people in California, and I am sure that we have no requirements that you would find, or that any other fairminded person would find unreasonable or ridiculous as such a regulation would be, in my judgment, if we simply objected to houses because they were nice in appearance and no more costly.

Mr. RESNICK. I just wondered if that was Farmers Home Administration's idea here in Washington, or some local man on the scene.

Let me ask you this question. What cooperation have you received from the States and local government bodies? Have they been cooperative? Have they gone out of their way to help you or, generally, ignored the problems of housing in rural America?

Mr. BERTSCH. With respect to housing, we respect, and insist upon our borrowers respecting, the various zoning codes of local public bodies, codes for electrical wiring, for plumbing, for all such limitations that authorized local regulatory bodies impose. Other than this, our relationship is primarily with families with respect to our housing program.

There is one exception here and that is in our rental housing program in which we do make loans or insure loans to local nonprofit associations, or public bodies, for the construction of rental housing for, earlier for senior citizens, but more recently the senior citizen requirement has been removed and we make loans for such rental housing in rural areas for any low-income family.

Mr. RESNICK. Does this cover migrant workers?

Mr. BERTSCH. This particular authority does not. However, we do have an authority to make loans and provide subsidies in connection with housing for domestic farm laborers.

Mr. RESNICK. This seems to be an area that needs a great deal of attention and money. Of all the areas of rural housing, it is the migrant housing that is the worst.

Mr. BERTSCH. This is certainly true and it has been a disappointment to us that this program hasn't resulted in more housing for domestic farmworkers, particularly since the Congress has seen fit to authorize us to subsidize such housing up to two-thirds of its cost. I think we in the Farmers Home Administration have not done as well as we might do in advancing this program.

I think, however, that one of the real obstacles here is the reluctance of local communities and their leadership to vigorously promote the development of good housing for the domestic farm laborers living in their midst. I think they feel sometimes that if they wait long enough this problem will simply go away and, of course, it isn't going to go

away.

I think that you can rely upon us to do a better job in the years ahead than we have done in the 2 or 3 years during which we have had this authority. We have done a relatively good job of housing domestic farm labor in Florida because we have had very good cooperation from local health authorities, local housing authorities. We have had a great deal of difficulty in California, principally because the farm labor housing programs there seem to be principally the responsibility of public housing authorities.

The public housing authorities, in order to meet the legal requirements, must take housing proposals to a referendum of the people in the community and this is a slow and laborious process and often a very difficult process because, quite frankly, there are situations in which the people in the community don't want domestic farm labor housing there because they don't want farm laborers there, feeling that they create social problems and tax problems, and school problems, et al.

This is going to be a long, slow process, I think, Mr. Chairman, but we are going to keep concentrating on it.

Mr. RESNICK. I wish you would do a little work in New York State because I think that is another State that is distinguished by its lack of State cooperation and State facilities. I know we have had witnesses here from southern New York, and I know other areas of the State where the type of housing that is available is a disgrace, and certainly you couldn't even distinguish it by calling it substandard. It just meets no standard at all. It is zero standard, and New York State doesn't seem to be doing anything about it.

Mr. BERTSCH. We have had applications, at least one that I recall, from Suffolk County for a loan and a grant for farm labor housing. If we make a grant in connection with such a project, the sponsor must be a broadly based community group that is interested in improving housing as a community project. We are not authorized under the statute to make such a loan to a group of growers whose primary purpose is to assure themselves a stable labor supply.

This has created administrative problems for us because primarily the people interested in sponsoring such housing are the growers. The group, as I recall it, in Suffolk, who applied were primarily motivated by just a few rather substantial growers and we undertook to help

them broaden the base of their association, but I believe to this moment our undertaking hasn't been fruitful.

Mr. RESNICK. I would say this whole area of migrant housing, rural housing, as you so well point out, needs a lot more work, and I personally believe in investing in new programs of the self-help and self-help cooperative programs. I would suggest that more publicity should be given to it, again, I know in my area we do the best we can to let everybody know about these programs, but very little is known about self-help.

The local CAP committees, for example, found out about it through us. And, again, I don't want to burden you with my problems, but the State OEO is supposed to have a local representative, and he is supposed to go around and tell these various people about what is available to them. We haven't seen him. We don't even know who he is.

So the burden really falls back to Washington again. Unless Washington does an adequate job, we get blamed for it anyway, but unless we do an adequate job, these people simply aren't going to have the knowledge to help themselves. One suggestion that I wanted to make is that if the local building supply people could be informed of self-help projects, they could get the word out. The building supply people stand to benefit from self-help projects because they will sell all the lumber and materials. By using them to publicize the program I think we can get the word out to the people who need it so desperately.

Mr. BERTSCH. I think recently there has been a fairly good take in this area. Trade papers, the medium of the building association people have done a remarkably good job, it seems to me, in publicizing this program.

I don't want to belabor this point but at this moment we have more people working for us in bringing applicants to our offices in this area than we can say grace over. I do not suggest that we ought to quit letting people know about our services, but I think that clearly is not the limiting factor at this time with respect to the number of people

we can serve.

Mr. RESNICK. The limiting factor is what?

Mr. BERTSCH. The limiting factor is our own manpower situation. Mr. RESNICK. But, how about money for the loans?

Mr. BERTSCH. We are

Mr. RESNICK. These self-help loans.

Mr. BERTSCH. This raises rather a sensitive issue. We did have direct loan funds in the amount of $15 million for all direct housing loans in fiscal 1967. This included loans, direct loans to the elderly for individually owned homes. It included loans for people in areas stricken by natural disasters, and it included self-help housing loans which we included because we could make these loans at 4-percent interest.

We obviously couldn't find private money to insure at 4-percent interest. When we ran out of direct money, rather than close the selfhelp housing program down, we authorized its continuance on an insured basis at 5-percent interest.

My alternative seemed clear. To me, I either had to stop it or resort to the higher percent interest rate, and I chose the latter course. This meant $50 a year increased payments on a $7,000 loan.

Mr. RESNICK. I don't imagine

Mr. BERTSCH. I didn't think it was going to be very important, but I probably received more correspondence on that one administrative decision than I have on all the administrative decisions I have made for the last 611⁄2 years.

Mr. RESNICK. For or against?

Mr. BERTSCH. All against; all against.

Mr. RESNICK. Who posed that type of

Mr. BERTSCH. All sponsors of self-help housing around the country, and I don't blame them. Probably I didn't make the position with which I was confronted altogether clear. We have resources. We have fund resources at the 5-percent rate under our insured-loan program.

Mr. RESNICK. I wouldn't imagine you get too many people who want to put money out at 5 percent these days.

Mr. BERTSCH. Even at that rate, Mr. Chairman, we have a device by which we can pay, add premium rates to the investor. We pay the investor at this time about, oh, from 5.8 to 6 percent, depending upon the term for which he takes the money.

Mr. RESNICK. Discount.

Mr. BERTSCH. And out of our housing insurance fund, we pay the difference between that and the 5-percent rate we charge the borrower. We do not vary the rate to the borrower, however.

This gets me to the point that it isn't the availability of funds, if funds being available at 5-percent interest is adequate, that limits us. It is the availability of administrative staff.

I am not going to dwell on this too long, because I know this is not the Appropriations Subcommittee before which I am appearing, but I just read a history of this organization the other day in draft form. A young man up in the Northeast wrote it as a doctoral thesis.

In 1942, this organization had 19,200 employees, and loaned $170 million. Last year we loaned $1,300 million with 6,400 employees.

Now, obviously, we are not doing the kind of supervisory job, the kind of hand-holding job, the kind of intimate personal helping job we were able to do in 1942 with three times as many employees and 10 percent the size program we have today. This is the record.

Mr. RESNICK. Can you tell me in this direct loan, this $15 million, what would that come out per-thousand poor, as compared to what is available per-thousand poor in the cities.

Mr. BERTSCH. No; I can't tell you. I am sorry.

Mr. RESNICK. I think that would be an interesting figure, because when you consider the number-if we took all the statistics and finally boiled it down to the person living in the urban areas, there is one chance out of eight of his being poor. If he lives in the rural area, it is one chance out of four.

And as for the amount of money available for housing in the rural areas, I imagine the percentage on a per-thousand basis must be just a tiny percent of what is available in the cities.

Mr. BERTSCH. Of course, we shouldn't concentrate, I believe, too narrowly on that $15 million of direct-housing loan fund available to us because we do have other resources which are almost unlimited, thanks to congressional action in the last session.

Mr. RESNICK. I recognize that, but I recognize that millions that go into an urban renewal program, and that certainly is direct loans and