Senator Wagner in his very able presentation has touched rather fully on that subject.

Although other nations throughout the world have been conscious of the existence and the evils of slums for many years and have been working toward a solution of this problem, the United States until very recently has remained indifferent to the problem. In this respect we have lagged behind other civilized countries.

It must also be recognized that the problem of unemployment is still pressing and probably will continue to be so for some time to come. Large numbers of our unemployed are from the building trades and the industries that depend upon building. The revival of the building industry would have a beneficial effect upon this unemployment situation.

The replacement of slums by adequate housing for families of low income requires a long-term program and a definite policy. The activities of the Housing Division of the Public Works Administration are being conducted under the provisions of title II of the National Industrial Recovery Act and the Emergency Relief Appropriation Act of 1935. All sums made available to the Division under these acts have been allotted to projects now in the course of construction and no funds are available to meet the insistent demand for additional projects from many communities throughout the country.

The CHAIRMAN. Can you state the amount of funds allotted to the Housing Division?

Mr. ICKES. I will touch on that later in the next paragraph.

The CHAIRMAN. I think the committee, Mr. Secretary, would like to have a full report of the amount of money that has already been spent in the housing activities on the part of the Federal Government, and also just what progress has been made.

Mr. ICKES. We will be very glad to furnish that information to your committee, Senator.

The acts referred to are concerned primarily with the immediate relief of unemployment. They provide no housing policy for the Nation. One consequence of operating on an emergency and workrelief basis has been that desirable projects, the construction of which could not begin immediately, were necessarily abandoned. A result of obtaining money from emergency appropriations has been that original allotments to the Housing Division have subsequently become unavailable due to the necessity of using such funds for more direct relief. Of the $154,200,100 allotted to the Housing Division under title II of the National Industrial Recovery Act (of which $10,971,600 and a later $1,670,000 was for limited-dividend projects, and $135,325,500 and a later $6,230,000 was for Federal housing projects), $110,000,000 was subsequently impounded for other purposes. Of the $249,860,000 recommended for allotment by the Advisory Committee on Allotments under the Emergency Relief Appropriation Act of 1935, $221,982,000 was actually allotted for Federal housing projects, but of this latter amount $120,608,950 was later withdrawn. Such a curtailment of funds has necessarily been followed by the abandonment of projects. The resulting uncertainty has discouraged, or at least seriously hampered, any planned or sustained effort on the part of local communities.

If projects are to be constructed economically, plans and specifications must be carefully prepared, and the proper selection of project sites also involves careful city planning. All of these considerations are inconsistent with an emergency program and make a permanent housing policy essential. The proposed bill lays the foundation for such a policy.

The cardinal points which any realistic public-housing program should embody are briefly: (1) Decentralization of responsibility; (2) adequate safeguards to protect legitimate private enterprise against governmental competition; (3) the recognition of the necessity of Federal assistance by way of loans and grants to local communities; and (4) appropriate measures to keep the expenditure of Federal funds at a minimum by encouraging as large an investment of private capital as possible.

It is extremely desirable that there be as much decentralization of responsibility as possible in the execution of a long-range slum clearance and low-rent housing program. At the time of the organization of the Housing Division of the Public Works Administration there were no local public-housing agencies authorized by law to engage in such activities. The only method of providing low-cost housing was through direct Federal construction. Since its organization, the Housing Division has followed the consistent policy of encouraging the enactment of State legislation authorizing local communities to engage in housing activities. Twenty States have already adopted such legislation. If the proposed bill should be enacted, most of the remaining States would probably enact suitable legislation of this character. It should now be possible to begin the decentralization of responsibility and the proposed bill expressly provides for such a policy. Decentralization would undoubtedly greatly stimulate local interest and tend to focus the attention of numerous cities upon their own slum problems. The bill realistically recognizes that such a goal cannot be achieved overnight and that there must be a transitional period during which Federal construction of housing projects must continue in those communities which are not yet prepared to assume full responsibility.

It is essential that legitimate private enterprise should not have to meet competition resulting from permitting families who can afford to pay economic rents to reside in such Government-financed projects. Moreover, unless such projects are available only to families of low income, they would not be justified. The proposed legislation contains adequate safeguards to avoid encroachment in the field in which private enterprise can operate profitably, by expressly providing that only families of low income shall be permitted to live in such projects and by placing the duty upon the proposed authority to maintain the low-rent character of the projects constructed.

I believe that it is possible to exaggerate the fear that a program of public housing will adversely affect private enterprise. The largescale public-housing program in Great Britain has been accompanied by a substantial boom in private housing construction. Both private and public agencies have recognized the validity of each other's work. Each has supplemented the other. There is no reason why similar results should not follow in this country. Privately financed

complementary building activities are already beginning to materialize in the cities where P. W. A. projects are nearing completion. It is my opinion that Federal aid should be continued for the purposes contemplated by this bill. The financial condition of local governmental bodies renders it impossible for them to finance, without assistance, an extensive long-range, low-rent housing and slumclearance program. Constitutional limitations upon the indebtedness that may be incurred by States and their subdivisions, as well as the absence of statutory power, are other factors which necessitate Federal aid. It should also be borne in mind that the Federal Government itself has a definite interest in correcting the social maladjustments that exist in slum areas since they affect adversely the welfare of the Nation.

It is important that the use of public funds be kept at a minimum. In order to do so, it is necessary to encourage the investment of private capital. This would be accomplished under the bill by loans to limited dividends housing corporations and by the sale of securities of local housing agencies to the public.

In my report on S. 2392, introduced by Senator Wagner at the previous session of Congress, I stated that while I favored the principles of the bill I had certain objections to various provisions contained therein. In the present bill the provisions heretofore objected to have been eliminated.

However, there is one provision in the present bill which, as it seems to me, is open to serious objections. It is set out that the Housing Division, which has been under my supervision as Public Works Administrator, shall be transferred to a newly created, independent, corporate agency, the management of which is vested in a board of five persons, of whom one shall be the Secretary of the Interior, ex officio, the others to be appointed by the President. The salaries of the four members other than the Secretary of the Interior are to be at the rate of $10,000 a year.

The Secretary of the Interior would thus be placed in the anomalous position of apparent responsibility for a program in connection with which, however, he would be almost totally lacking in authority. The CHAIRMAN. The President would have authority to designate a chairman independent of the Secretary of the Interior, of course ? Mr. ICKES. Yes. That is the presumption. It may be stated, in the

bill.

The CHAIRMAN. It does not state that the Secretary of the Interior shall be chairman?

Mr. ICKES. No, Senator; it does not.

It does not seem to me that a member of the Cabinet should be placed in a position that would almost inevitably be embarrassing to him. If, upon full consideration it is decided to set up a board to carry out almost purely administrative duties, then I respect fully suggest that all five members be appointed from outside of the present regularly constituted officials of the Government.

When the duties to be conferred are quasi-legislative or quasijudicial, there is sound reason for the appointment of a board or a commission. But it is my firm conviction, based not only upon my own experience, but upon that of others who have been charged with executive responsibilities, that a single executive can function much

better than a board, when the duties are purely administrative. I will go so far as to say that a board or commission is not only not an aid in administration; it is at best a positive drag, and may, in extreme cases, prevent the performance of the duties that it is set up to perform. To make every administrative act, even those of a minor character, the subject of a debate which may in course of time become partisan, it seems to me, would go far to defeat the humanitarian and statesmanlike conceptions upon which this bill is based.

The duties to be performed under this act are no more onerous, no more varied, and no more complicated than are the duties now performed successfully by many bureau chiefs in the regularly established departments of the Government.

There seems to me to be no more reason for setting up five executives for this Housing Authority than there would be to enact a law providing for four additional Secretaries of the Treasury, of Agriculture, or of the Interior. Every businessman and every administrator of a public office knows that divided responsibility makes for irresolution, delay, inefficiency, overlapping of authority, and unnecessary expense leading to final results that are far from satisfactory. Moreover, a multiplicity of independent establishments that are not responsible to the President through a member of the Cabinet is both undesirable and unnecessary.

I, therefore, earnestly recommend that all of the administrative powers of the proposed United States Housing Authority be vested in the Secretary of the Interior. I suggest, further, that he be given the power to appoint an advisory committee on the basis of actual expenses and a reasonable per diem.

I do not know whether the Director, of the Budget has advised whether this bill would or would not be compatible with the financial policy of the President. Accordingly, the views that I have expressed are to be regarded as my personal and not as my official views.

There is one other matter not covered in my formal statement. Paragraph (b) of section 4, page 7, provides:

The Authority shall, without regard to the civil-service laws and the Classification Act of 1923, as amended, appoint and fix the compensation of such officers, attorneys, and experts

and so forth, without regard to such laws, and appoint such other employees, and so forth.

The effect of that would be to take the Authority out of the operation of the civil-service laws, and I very seriously doubt the advisability of that.

Senator WAGNER. Mr. Secretary, the words down here are, "and with regard to such law appoint such other employees", which puts them into the civil-service law.

Mr. ICKES. When you take it in connection with the subsequent paragraph (d), where it provides—

At the expiration of sixty days from the enactment of this Act the Housing Division of the Federal Emergency Administration of Public Works shall cease to exist, and all its obligations shall be assumed by the Authority and all its assets, equipment, records, and employees shall be transferred to the Authority, for the purposes of this Act. No employee shall acquire by such transfer a permanent or civil-service status, but within 90 days after such transfer the

Authority may certify to the Civil Service Commission the names of such transferred employees as it desires to retain and as are required to be under the civil-service laws by the provisions of section 4 (b) of this Act.

Then, as I understand that language, it means that upon the transfer of the present Housing Division there would be a period of 90. days during which, if the Authority saw fit, it could discharge every member of that very highly qualified and efficient group and bring in others, and the others could be blanketed under civil service.

The CHAIRMAN. Is the personnel of the Federal Housing Division. now under civil service?

Mr. ICKES. It is not under civil service, because it is one of the emergency organizations but has been appointed purely on the basis of efficiency without regard to political consideration, and whatever considerable body of knowledge and experience that exists today within any housing group in the United States is lodged there. If we have any experts on slum clearance and housing, those experts. are now employees of the Housing Division.

I should regret very much seeing any enactment of law which would make it possible for any consideration to discharge those efficient men and replace them with men without experience, appointed on a political basis, then blanket the new men under the civil-service law.

Senator WAGNER. Mr. Secretary, I am interested in the samething. Would you suggest they be blanketed under the civil service? Mr. ICKES. If there is to be any blanketing I think the present employees should be blanketed.

Senator WAGNER. This limits it to the present employees.
Mr. ICKES. Does it?

Senator WAGNER. Those at present employed.

Mr. ICKES. It provides that no employee shall acquire by such transfer a permanent or civil-service status, but within 90 days after such transfer the Authority may certify to the Civil Service Commission the names of such transferred employees as it desires to retain and as are required to be under the civil-service laws by the provisions of section 4 (b) of the act.

Senator WAGNER. You object to that description?

Mr. ICKES. I think under this language that there could be a wholesale dismissal immediately after the agency has been transferred and the substitution of new untrained employees.

Senator WAGNER. But they must have civil-service status.

Mr. ICKES. Are they not exempted under that?

Th CHAIRMAN. Where are they exempted?

Senator WAGNER. This provides that the appointment of employees except experts can only be made under the civil-service law. The CHAIRMAN. Where is that?

Senator WAGNER. Page 7, line 23.

The CHAIRMAN. I take that paragraph to indicate that certain employees named, namely attorneys, experts, architects, engineers, appraisers, negotiators, and real-estate brokers, and skilled and unskilled labor are exempt. What other employees are there left?

Senator WAGNER. Of course skilled and unskilled labor, you would not consider typists and people of that character such, they have a different classification. This has to do with laborers you may employ. If the Federal Government itself intended to construct a