Would authorize the Secretary to establish such advisory committees on local affairs as he may determine to be desirable in furtherance of purpose of the act. Makes the usual provision for (1) compensation of the principal officers; (2) a seal of office; (3) succession in the event of absence or inability of the Secretary and other principal officers; (4) transmission by the Secretary to the Congress of an annual report of the activities and accomplishments of the Department; and (5) delegation by the Secretary of his functions to other officers, employees, or boards of the Department, except those which the Housing and Home Finance Administrator is expressly prohibited by law from transferring; also, no change can be made in the organization or functions of the Federal National Mortgage Association in connection with its secondary market operations under the FNMA charter act, unless the Secretary finds that the change will not adversely affect any rights of owners of outstanding common stock under the charter act; the Secretary is required, to the extent he deems practicable, to give appropriate advance public notice of the delegation of any functions proposed by him and to afford appropriate opportunity for interested persons to be heard with respect to such proposed delegations; and the Secretary may from time to time effect, within the Department, such transfers of personnel records, property and unexpended balances of appropriations, allocations, etc., as he deems necessary to carry out the provisions of the act, but such funds may be used only for the purposes for which they were originally made available.

S. 609

S. 609 (Bush), to provide for the establishment of a Department of Housing and Urban Affairs.

Would establish a new executive department to be known as Housing and Urban Affairs, headed by a Secretary appointed by the President, subject to Senate approval; and provides for the appointment, in the same manner, of an Under Secretary, Assistant Secretaries and a General Consel who shall perform such duties as the Secretary may prescribe.

Would transfer to the Secretary all functions and powers of the Housing and Home Finance Agency, together with its agencies, personnel, offices, property, assets, liabilities, etc., including the function of the President of appointing officers heretofore within the Housing and Home Finance Agency.

Would authorize the President to transfer to the new Department such additional agencies and functions as he may deem desirable to further the purposes of the act, pursuant to such reorganization authority as may be vested in him by law; and would require him to submit to the Congress, on or before January 31, 1962, a report setting forth any such action taken or to be taken under this authority.

Directs the Secretary to (1) conduct a continuing study of problems peculiar to urban and metropolitan areas, including problems of coordinating Federal programs as they affect such areas; (2) provide technical assistance to State and local governmental bodies in developing solutions to such problems, including,whenever the Secretary deems it appropriate, the dissemination to interested bodies of the results of the studies undertaken; (3) make such recommendations to the Congress, as a result of these studies and after consultation with appropriate representatives of State and local governments, as he shall determine to be appropriate. For the purposes of these studies, the District of Columbia and Puerto Rico are included; and (5) to transmit to the Congress an annual report of the activities and accomplishments of the Department.

Abolishes the Housing and Home Finance Agency, together with the Offices of Housing and Home Finance Administrator and the Deputy, with authority vested in the Secretary to terminate any outstanding affairs of these agencies and offices.

Authorizes the Secretary to establish such advisory committees on urban affairs as he may determine to be desirable and in furtherance of the purposes of the act.

Makes the usual provision for (1) compensation of the principal officers: (2) a seal of office; (3) succession in the event of absence or inability of the Secretary and other principal officers; (4) delegation by the Secretary of the performance of his functions to other officials, employees, agencies or boards of the Department, except functions which the Housing and Home Finance Administrator is expressly prohibited by law from delegating; also, no change can be made

in the organization or functions of the Federal National Mortgage Association in connection with its secondary market operations under the FNMA charter act, unless the Secretary finds that the change will not adversely affect any rights of owners of outstanding common stock under the charter act; the Secretary is required, to the extent he deems practicable, to give appropriate advance public notice of the delegation of any functions proposed by him and to afford appropriate opportunity for interested persons to be heard with respect to such proposed delegations; and the Secretary may from time to time effect, within the Department, such transfers of personnel records, property and unexpended balances of appropriations, allocations, etc., as he deems necessary to carry out the provisions of the act, but such funds may be used only for the purposes for which they were originally made available; authorizes the Secretary to construct, maintain, and operate an office building in or near the District of Columbia to serve as the principal office of the Department but not to exceed the cost of $40 million, to be financed from funds in the mutual mortgage insurance fund created by the National Housing Act, which sums are to be periodically repaid within a period of 30 years with interest at 32 percent per annum on the unpaid balance.

Senator HUMPHREY. Senator Clark, I want you to proceed as the author of the bill S. 1633, the administration's bill.

Senator CLARK. Thank you, Mr. Chairman.

I have a prepared statement which I would like to have introduced into the record at this point.

Senator HUMPHREY. Proceed, Senator.

STATEMENT OF HON. JOSEPH S. CLARK, U.S. SENATOR FROM THE STATE OF PENNSYLVANIA

Senator CLARK. Mr. Chairman, I am honored to be the opening witness before your subcommittee to urge the passage of S. 1633, the administration bill to create a Department of Urban Affairs and Housing.

Long before I came to the Senate, when I was mayor of Philadelphia, I was one of the early advocates of a Cabinet department to deal with urban matters. My first speech as a U.S. Senator was on this subject, and one of the first bills I introduced was a predecessor of S. 1633. Last year, a similar bill which I sponsored was reported by the Banking and Currency Committee. This year I was proud to be authorized by President Kennedy to be the principal sponsor of his measure for the same objective.

The basic reason for the bill is this: Within the past half century, the United States has been transformed from a predominantly rural to a predominantly urban nation.

As late as 1910 fewer than half our people lived in urban areas and I use the census definition of "urban areas" as "communities over 2,500 population." Today, the proportion is 70 percent-and rising. The year 1970 will see some 160 million urban residents, or more than our entire national population of 10 years ago. By the year 2000 it is estimated that 300 million Americans will live in urban areas.

This unprecedented growth has brought, and is bringing, enormous problems. Central cities are beset with rising needs and declining tax bases as slums and blight spread and as high-income residents leave and are replaced by families of low income. Meanwhile, their suburbs struggle with the public service demands of the population explosion. In 1957, President Eisenhower said:

The needs of our cities are glaringly evident. Unless action is prompt and effective, urban problems will soon almost defy solution.

And 4 years later, his successor, President Kennedy, said:

Our national household is cluttered with unfinished and neglected tasks. Our cities are engulfed in squalor. Twelve long years after Congress declared our goal to be "a decent home and a suitable living environment for every American family," we still have 25 million Americans living in substandard homes.

The structure of the U.S. Government needs to be reoriented to reflect the physical transformation of the Nation. For almost a century the Department of Agriculture has been concerned with the needs of rural America. For an even longer period the Department of the Interior has served the interests, largely, of the more sparsely settled Western States. But while some of the facets of the problems peculiar to the densely populated regions of the Nation are dealt with by particular departments, no department of the Government has a general responsibility to take a broad view of the ills that afflict an urban America which is growing with almost overwhelming speed.

I don't begrudge the farmers their department, nor the westerners theirs. Both have rendered superb service. I merely urge that the majority receive equal attention with the minority. I urge that a Government structure ideally adapted to a 19th-century rural America be reorganized so as to be equally well adapted to a 20th-century urban America. After all, 75 to 80 percent of our productive capacity is concentrated in the standard metropolitan areas alone, not to mention smaller urban areas; what happens there concerns us all.

Historically, of course, urban matters have by their nature been the first concern of State and local governments. But the problems have long since outrun political boundaries. Cities must reach farther and farther into their hinterlands for water. Municipal sewage disposal affects water quality hundreds of miles downstream. Mass transit systems are regional in scope, not local. Few large communities can be self-sufficient in open space and outdoor recreation; their people must depend on what a region can provide. City planning must fit within the context of metropolitan regional planning. Our urban areas now blend into one another: one single metropolis extends almost unbroken from Maine to Virginia, through parts of 11 States and the District of Columbia. And even those services purely local in their effects have grown beyond the ability of local governments to finance.

Few people any longer deny that to help solve urban problems, the resources of all levels of government must be applied. The Federal Government contributes money and leadership over a wide range of local public services-highways, hospitals, stream pollution control, urban planning, urban renewal, low-rent housing, public assistance, and some aspects of education, and the Senate this year alone has passed bills for new programs of assistance to primary and secondary education, mass transit, and juvenile delinquency control. If anyone believes this trend is reversible, he need only recall the Joint Action Committee, which was established in 1957 by President Eisenhower and the Governors' conference to work out the transfer of Federal functions back to the States, but which died without having been able to bring about the devolution of a single function.

S. 1633 recognizes that the Federal role in urban matters is here to stay, and that the need is to make Federal participation and assistance more orderly, better coordinated, more rational, less arbitrary, less haphazard. It says that somebody in the Federal structure, with ap

propriate rank, should be looking at urban problems as a whole and at the impact of Federal activities and trying to make sense out of the entire tangled pattern.

The Secretary of Urban Affairs and Housing would serve this objective through four responsibilities, specified in the third paragraph of the bill's declaration of policy. I will briefly amplify each of

these:

First, "to achieve the best administration of the principal programs of the Federal Government which provide assistance for housing and for the development and redevelopment of our urban communities.' These programs are already concentrated in a single agency-the Housing and Home Finance Agency. This bill does not reshuffle a single function in or out of that agency. It merely confers status. But, in Government as elsewhere, the importance of status cannot be ignored. A major, no matter how able, cannot do a major general's job.

By every measure, the work of the Housing and Home Finance Agency, as now constituted, deserves departmental status. HHFA is entrusted with the expenditure of more money than 6 of the existing 10 departments. The housing industry, whose prosperity it serves, is perhaps the Nation's largest single industry. Concentrated in HHFA are not only the housing programs of the Government but its programs relating to urban development and redevelopment in general, which carry far beyond the field of housing.

The recent Senate bill raised to 30 percent the proportion of urban renewal funds which may be used for projects exclusively nonresidential. The Bureau of Community Facilities of HHFA provides aid for local water and sewer projects. HHFA administers grants for urban, regional, and metropolitan planning. It maintains what shelf of public works exists. It will administer the public facility loans and grants under the Area Redevelopment Act. It even provides loans for college dormitories, although that program is there perhaps by accident.

In brief, HHFA is now a department of urban affairs and housing in everything but name and prestige. The importance of its role justifies its being given these.

Second, "to give leadership within the executive branch in securing the coordination of the various Federal activities which have a major effect upon urban, suburban, or metropolitan development and redevelopment."

Almost any mayor can recite to you the consequences of uncoordinated Federal activity. His urban renewal program, supervised by one Federal agency, may be disrupted by the highway plan thrust upon him by another Federal agency. Federal money poured into highways hastens the bankruptcy of the mass transit upon which many a city's life depends. Federal tax policy singles out rail passenger transportation, including commuter traffic, as something to discourage. While one Federal agency seeks to stimulate homebuilding, another may pursue a credit policy which has the opposite effect. The Defense Department can disrupt all local planning by the manner in which it locates installations.

Creation of a Department of Urban Affairs and Housing will not, of course, correct all these difficulties. But, for the first time, a re

sponsible Cabinet officer will at least be charged with initiating action to bring about correction. State or city officials with complaints will have someone to whom to turn. A local official with an inquiry will be able to get "one stop service" instead of being bucked around from one Federal agency to another.

The Secretary of the new Department will not have coordinating authority in the sense of being able to give orders to other departments. Obviously, this would not work. But he will be responsible for initiating discussions among departments concerned, proposing solutions, and where necessary taking the matter to the President and his White House and Executive Office staff for coordination and decision.

Third, "to encourage the solution of urban, suburban, and metropolitan problems through State, local, and private action, including promotion of interstate, regional, and metropolitan cooperation."

There is vast need for research on urban problems and for technical assistance to State and local governments. If I may draw another comparison with agriculture, the Department of Agriculture can tell us what crops have been planted on almost every acre of ground in every county for the past quarter century. In contrast, no Federal agency has any data on urban land use. Yet urban land, acre for acre, has many times the value of farmland. We know more about farm buildings than about urban buildings. We spend more on research in the diseases of a single crop-potatoes, say, or corn-than on research into the causes and cure of the slums and blight which are the diseases of cities affecting scores of millions of people.

We need to know more about the economic base of communities, about land use patterns, commutation problems and transportation methods, public facilities, density patterns, urban planning. We need to know more about devices for cooperation among urban neighbors, about experiments in metropolitan government.

The Department will not itself conduct much of the research. But it will provide stimulation and leadership, it will provide a clearing house for the dissemination of what is learned.

Fourth, "to provide for full and appropriate consideration, at the national level, of the needs and interests of urban areas and of the people who live and work in them."

If I may refer again to mass transit as an example, some of us began to worry, a while ago, about the decline of transit facilities in our major metropolitan areas. Facilities were and are being operated at a loss; service has declined; so has patronage; and as more people have resorted to private automobiles, congestion has pyramided, all in a vicious circle. Local governments have been too fragmented and too limited financially to deal successfully with the transit problem. State legislatures have been too rurally-oriented to permit much State concern, and the issue is complicated because commuters in many areas cross State lines.

Here was, and is, a major urban problem, unsolved and growing, with national consequences. Yet we found that nobody in the Federal Government even had jurisdiction to consider it from the standpoint of the cities, as distinct from that of the transportation industry. The Commerce Department was concerned, it is true, about the financial health of the railroads, but that approach often leads to the wrong