Do you think that is the proper approach to reducing welfare rolls! Mayor WALSH. I am sorry you call me an expert in this field. I have been mayor for 7 years. I had the secure feeling when I was welfare commissioner but being mayor I don't have that secure feeling. As a mayor I know a lot of things about a lot of things but I am not an expert in anything anymore.

You get a lot of mixed feelings about welfare as you move around the city and the country. I was shocked the other day when I was down at this Job Corps area and I still have not come up with the answer yet, one of the girls who is down there training, a young 18-year-old illegitimate mother with two children and very, very distraught about her situation and very concerned that she have some kind of a job hopefully and she would not accept anything like the minimum wage. She was very emphatic about that. She asked the question, what is wrong with welfare? It is a little hard to answer a person who has known nothing but welfare all her life.

Apparently, I found out afterwards this was the case with her. So this is the problem that we are faced with.

I think the previous speaker mentioned motivation. I don't know that we can motivate people, but I do think that we can create conditions that will help them motivate themselves and I think this is what we try to do in many of the programs in welfare.

I think any program that orders people to take training of any kind in a welfare situation should be examined closely to make certain that it is applied properly.

I don't think just everyone on welfare should be forced to take training nor should they.

I am thinking of a mother with several children whose best place is probably in the home taking care of the children. I think the decision should rest with her as to whether she takes training.

Senator JAVITS. We will reconvene the hearing so that the Senator from New York may have an opportunity to put some questions to the witness.

First, this is with the permission of the chairman, Senator Clark. Mayor Walsh, may I first express my pleasure at your being here to testify and the very distinguished honor you have been accorded in being chosen to testify on behalf of the U.S. Conference of Mayors.

I have browsed through your testimony and I know its general import. It is mainly directed to the manpower bill which has been introduced by a large number of Senators with Senators Prouty and myself as the principal sponsors, S. 3249.

That bill offers certain approaches which we felt were not raised specifically in Senator Clark's bill. While we have great respect for Senator Clark's bill, we hope the final product will have a greater effect.

You will notice the order of magnitude in our bill is something like 300,000 jobs immediately. Is that order of magnitude appreciable enough in your judgment to make the major impact which your testimony calls for?

I know it is not optimum. It is not optimum for us, either.

Is it appreciable enough?

Mayor WALSH. The conference had originally requested 500,000 jobs. Certainly 300,000 would make a solid impact on the need but it

would still fall short of what we are hoping for, but we recognize the fact, Senator, that you never get all that you want.

Senator JAVITS. Under our bill, a rule is provided for the States if they can qualify through meeting the criteria set by the Secretary of Labor. Forty percent of the money provided under the bill could go through the States and in turn be used either for State programs or for redistribution to lower levels of government.

I know you are a mayor and this is the Conference of Mayors, but if we could get some guidance as to the views of the mayors upon this matter, bearing in mind both the pressures which we have from the States to administer these programs totally through them and the feelings of many mayors that they wish to do business directly with the U.S. Government, it would be most helpful. We have tried to work out a compromise, some rule of thumb, by providing 60 percent of the fund distribution directly from the Government of the United States to local governments and private groups. Would you give us your view on that?

Mayor WALSH. On this matter I can only speak for myself since the Conference of Mayors has not taken a position on this bill, but from my experience as a member of the Vice President's Commission on Intergovernmental Relations and knowing the vast difference in the 50 State organizations and the discrepancies in the way they relate to local government I would say that you get a vast difference of opinion from the mayors around the country as to how they would want this handled.

Speaking personally, and as a mayor of a city in New York State, I have no qualms whatsoever about having a program go through our State government.

We have excellent relations with State government. I think they have a degree of sophistication which in many cases is far beyond that of what we see in some of the people in the Federal Government and in some of the agencies.

I have no hesitancy whatsoever in saying that I would support a program where some of the funds went to the State.

Senator JAVITS. Assuming that is so, do you nonetheless feel the criteria should be strict so that the Federal Government, one, could be sure the State funds will be used effectively in accordance with the policy of the Federal statute and, second, if they are not used satisfactorily or in accordance with the criteria that the relationship between the State and Federal Government may be canceled and the money used directly?

Mayor WALSH. I think there would be need for very strong standards that would regulate the use of the money at the State level. I would certainly advise it because I know again from my experience with the Commission on Intergovernmental Relations that there would be a vastly different approach in many of the States and I would hesitate to just give them the money unless there were strict controls on it. Senator JAVITS. The other innovative aspect of our bill relates to the organization, by the people whom the bill is designed to help, of local service companies and with the provision it technical assistance for such companies with the idea of encouraging entrepreneurship by the poor and hard-core unemployed.

We draw that provision of our bill in part from the experience in the Bedford-Stuyvesant section of Brooklyn where, following a mas

sive community cleanup by individuals, they organized companies to go into the lines of business in which they were engaged in the cleanup-painting, decorating, repairing, carpentry, and the like.

Have you had any experience with that, Mayor Walsh, and can you give us any help on that aspect of our bill?

Mayor WALSH. From my experience with the poverty program, Senator, I am not dedicated to the concept that there must be meaningful participation of the people that you are trying to help.

I think that programs can best be run by people who are used to assuming responsibility, who are used to making decisions and who are used to acting on the basis of well-thought-out decisions.

So, I would always have some hesitancy and I did in the poverty program, of letting the disadvantaged, for instance, run the program without strong guidance and direction from the Government.

If this could be done, I think with the direction of the Governmentand I think this is needed because it is only at this level and in this way that you are going to get people who have experience and have the expertise in running these programs and are used to making the hard and tough judgments that are necessary.

So, I would support it provided it did have this type of builtin safeguard.

Senator JAVITS. Mr. Mayor, I think we have not pinpointed precisely for you what we have in mind.

What the bill calls for is a preference where there are brought into existence such privately owned service companies if those service companies have some ownership among the poor themselves or the hardcore unemployed themselves.

It does not mean it has to be exclusively owned by the poor nor does it mean it has to be managed by the poor or hard-core unemployed.

The bill provides for technical services to be given through development companies in order to stimulate such service companies. The idea is to encourage entrepreneurship in this field and to encourage people to go into business for themselves.

I feel I must emphasize the word "encourage.'

There is no mandate that that is the only way it should be done and that was the basis upon which I gave that.

Mayor WALSH. This is similar to what we are attempting to do in the field of housing. We have the Syracuse Housing Development Corp. which has been drawn up and it does provide for participation from those who are going to be helped.

I think it is good as long as they don't overwhelm the organization. They will contribute a great deal to the direction and I am sure it will be a give and take proposition.

I thing this would be well as long as it is not completely managed by those whom you are trying to help.

Senator JAVITS. Would you say in ghetto areas that entrepreneurship represents a good factor in morale and for dealing with the general economic depression which generally surround such a community?

Mayor WALSH. I think there is no doubt about the effect it would have upon those living in those areas. If they would see businesses being developed by people of their own nationality and race, I think it would have a very helpful effect.

There is no reason why it could not be done. Many of the services we need so desperately now we cannot get. A window washing company could be set up and various types of services of that nature could be set set up that would give well-paying jobs to people.

There is no reason why they couldn't be run and managed by the poor with proper advice from people who have some expertise in that. Senator JAVITS. I am certainly gratified to get that from you because that is what we have in mind.

Another innovative aspect of the bill is in relation to what we call an economic community corporation; that is an effort to bring the business community effectively into this area, in addition to what is being done by the Urban Coalition and the National Alliance of Busmessmen, headed by Henry Ford, through a national corporation, nonprofit, which would give technical assistance and advice and actually go out and solicit a helping hand from American business.

If it could develop the necessary capital and even provide some seed money, it would be institutionalizing on a corporate basis the part of American business in the effort.

Would you think well of that idea?

Mayor WALSH. Yes; again, it is similar to the same housing program that I talked about where they are going out in business raising the seed money to provide this and I think it is a very hopeful sign.

I think if any sign of hope has come out of disorders and the disturbances that we have had in the last couple of years, it is finally the recognition by business and industry and the power structure that they are their brother's keeper and I think this is the one hopeful sign that is coming out.

Many of them do recognize that they have a responsibility to those who are less privileged than themselves.

Senator JAVITS. We speak on a very somber morning after the murder of Dr. Martin Luther King, Jr. I think our situation is quite sensitive and hanging in the balance and this is a uniquely important morning in his memory to speak of constructive efforts of building and reconciliation of the type we are speaking of, and I am sure you agree with me, Mr. Mayor.

Lastly, in our bill we give a choice of either tax credits as an inducement to employ the hard-core unemployed or compensation out of the on-the-job training program of the difference between the employee's actual earnings and his economic value to the employer. We give that option to business to take either course.

Does the Conference of Mayors have any policy on that question, Mr. Mayor?

Mayor WALSHI. I would have to ask Mr. Gunther to speak to that. Mr. GUNTHER. Yes, Senator.

In January of this year and maybe before, but I know that in January we repeated it. We did endorse a whole series of incentives, many of which are in here including those to get the private sector in. We have taken the position with the private sector in talking with them about it "You tell us what you need."

The mayors keep saying that to the corporation executives. "Don't ask us how to do it. You are the geniuses in this country. You won World War II, now win this one for us. We will help you in the Congress, in the city and State legislatures."

They have said what they want and we have been supporting them. Senator JAVITS. Do you think the conference would think well of the idea of making it optional for individual employers so that they could take either route, either the tax benefit route or the route of actually being paid through the manpower program?

Mr. GUNTHER. From our discussions with the business community, I think you would find that would be more acceptable to them to have the option.

Probably some of them would object to the grants and they would find less objection in the corporate boards to the tax-incentive system. Senator JAVITS. And others might take a different view.

Mayor WALSH. Yes, there are all kinds of ways.

Senator JAVITS. Thank you very much, Mr. Mayor, and thank you, Mr. Gunther, for your patience in allowing us to get in some additional questions on this specific point.

The hearing will now stand adjourned, subject to the call of the Chair.

(Whereupon, at 11:55 a.m., the subcommittee hearing was adjourned, subject to call.)