Mr. MCDONOUGH. Mr. Chairman.

The CHAIRMAN. Mr. McDonough.

Mr. MCDONOUGH. Without attempting to be out of order, Mr. Chairman, I just wanted to continue the reading of the amendment, Mr. Multer read to the committee in last year's housing bill concerning public housing units, and from where you stopped I am beginning to read, Mr. Multer, which reads:

And during the fiscal year 1954, the housing and Home Finance Administrator shall make a complete analysis and study of the low-rent public housing program, and on or before February 1, 1954, shall transmit to the Appropriations Committee of the House and the Senate his recommendations with respect to such low-rent public housing program—

which is in relationship to the proposal the President made, and indicates that it is the desire of the administration to see that so many public housing units shall be built during the fiscal year. What the report of the Administrator to the House and Senate will be, I don't know, but that is part of the amendment, and consequently the desire of the Congress.

You say there isn't any legislation available. It is there. The authority is there. Any added authority that this committee might add to this bill is just a repetition to what is already on the books.

Mr. MULTER. How anything that you read in this law, requiring a report to be made to the Appropriations Committee, can affect the number of houses to be built is beyond me.

Mr. MCDONOUGH. It is certainly up to the judgment of the Housing Administrator.

Mr. MULTER. You have just read that all he is supposed to do is study and report. You can't get housing out of a study or report. You get it pursuant to authorizing legislation, not from a study or report. There is nothing in this that says if we report we need a hundred thousand units, that we will build a hundred thousand units. The study and report is merely informative to the Appropriations Committee. But why should the Appropriations Committee get that kind of information rather than this committee?

Mr. MCDONOUGH. Well, when Congress adopted the amendment they asked that the report be made.

Mr. MULTER. The President has said regardless of the report we need 35,000 new units a year.

Mr. MCDONOUGH. That is an indication of what the Administrator will recommend.

Mr. MULTER. That is what the President recommends as a minimum. It is a strange thing that the minority party must argue for the program of the President who was the candidate of the majority party. Mr. MCDONOUGH. Mr. Chairman, I have a question. The CHAIRMAN. Mr. McDonough.

Mr. MCDONOUGH. Mr. Cole, before I came in I understand Mr. Hiestand reviewed the possibility of an amendment to the bill which would limit the authority of the public housing authorities throughout the country so that they would be responsible to some extent to the appointive power. Do you think such legislation should be added to this bill, or do you think that the power of the public housing authority is a little too broad, and that there should be something in the bill to reduce it so that we wouldn't override or attempt to override the local authority?

Mr. COLE. Mr. McDonough, I am sure that some of the unfortunate occurrences which happened in the past would be eliminated perhaps if that were done. May I point out to you, however, that my own personal basic philosophy about matters of this sort would oppose that type of an approach. I don't believe the Federal Government should intrude on matters which are appropriately within the area of State control by State and local legislation.

I believe in this program being a local program, within all of the areas possible. It should be locally conceived, locally planned, locally programed, locally carried out.

Now, saying it in as nice a way as I can, if a community has badly planned, badly contracted for, carried out the program erroneously, we have certain responsibilities because we have a support-the Federal Government, I mean, we are assisting by subsidy. So we have a certain support.

But if you will take time to examine all of the reasons for local responsibility of the authorities in this bill, I would hesitate very much before I would recommend that the Congress, in its legislation, say that certain things must be done locally, and control taken away from the local people.

Mr. MCDONOUGH. I wouldn't say that any control should be taken away from them. I mean to say that they should have complete control, and that they should also have some jurisdiction over the autonomy that the public housing authorities now have.

Mr. COLE. I have been very disturbed about that problem, Mr. McDonough, not only as administrator but as Congressman. I have been very disturbed about the fact that an autonomous agency is set up in a community without any responsibility flowing to the elected officials, but I think it is their job to see that that does not happen. That is clearly a matter for the States to decide themselves.

In my judgment there are so many overriding reasons why the Federal Government should not interpose its judgment, either on the State Legislature or on the city in connection with this public housing authority, that I can't recommend it, even though I am quite disturbed about it.

Mr. MCDONOUGH. Let me give you an instance. If there had not been a voluntary compromise arrived at between the Federal Government and the Los Angeles public housing authority, the public housing authority could have proceeded, in defiance of the vote of the people of Los Angeles and of the State of California, to seek the funds from a bond issue, an attractive bond issue, that was bought very readily by the financial institutions, to build 10,000 public housing units in Los Angeles.

Mr. FITZPATRICK. It is not a matter of cooperative agreement, Mr. McDonough. It is a matter of the provisions in the State laws. Most of the State laws, as I recall them offhand, do provide for the appointment of commissioners on staggered terms, and also provide that they may be removed by the appointing power for malfeasance in office or failure to perform their statutory duties.

I do not know of any offhand which provide that they serve at the pleasure of the appointing power; there may be some. In any event, the State legislatures can so provide if, in their discretion, they deem it wise.

Mr. MERRILL. I think that under Indiana law the mayor has the power to remove every person he appoints in the city administration, which would mean in Indiana that we have decided we want to keep our finger on those things.

Mr. FITZPATRICK. I can check Indiana law for you, but it is a matter of the choice of the State legislature.

Mr. MERRILL. What we want to do is in our own wisdom, or foolishness, make our decision.

Mr. FITZPATRICK: That is right.

The CHAIRMAN. May I request some information from Mr. Fitzpatrick. Is there anything, other than in the definitions of the Public Housing Act, which has to do with the setting up of these authorities? Does a local housing authority come under the definition of a public housing agency under the law?

Mr. FITZPATRICK. Yes, sir, it does.

The CHAIRMAN. All right, let us settle this now and see if we cannot get somewhere on this question.

Section 9 of the United States Housing Act of 1937 states:

The definition of a public housing agency——

a public housing agency

means any State, any county, any municipality, or other governmental entity or public body, exclusive of the authority—

that is the Federal authority

which is authorized to engage in the development or administration of low rent housing and slum clearance.

Now, I assume from that that the local housing authority must have been set up by the State legislature, under such terms and conditions and limitations as stated in the enabling act setting up the authority, over which the Federal public housing authority has no jurisdiction any more than it would have jurisdiction over a municipality or State. Mr. FITZPATRICK: That is entirely correct, Mr. Chairman.

The CHAIRMAN. I think that perhaps we might place some limitation upon the authority which they have to meet the Los Angeles situation or any other situation, but under existing law, according to the law as I read it, I must agree with Mr. Cole that they have not any jurisdiction, administratively, over the local housing authority which has been set up under State law, any more than they would have over a municipality or a State which in itself is a distinct entity. The State can create a distinct political entity, which they call a housing authority, to deal with the Federal public housing authority in those respects; unless the act sets up other standards, then Mr. Cole is correct, that we have no jurisdiction over it.

There may be a looseness in the law in that respect, but, of course, if there is a looseness in the law then we must take into consideration that any tightening up of the law must apply as well to the States, themselves, or the municipalities.

Mr. FITZPATRICK. In Mr. Wolcott's own State, the legislature did choose to deal with it in a different way. They chose there to vest the basic powers in the city. Under the Michigan law, the power to issue the bonds, for example, may be exercised only by the city.

In Michigan the Housing Commissions function solely as an agent of the city, and the basic control, basic powers, are invested in the city.

There are 2 or 3 other States that have followed the same pattern as Michigan.

The CHAIRMAN. Let us be clear on this Los Angeles situation, now that we are on it. As I understand it, and I may be wrong, a new mayor was elected; a day or so before he was to take office the outgoing mayor appointed a public housing authority thereby, under the enabling act, tying the hands of the new mayor so that the new mayor could do nothing whatsoever about it.

Now, I ask Mr. McDonough and Mr. Hiestand this question: Is the public housing authority set up in Los Angeles a self-perpetuating unit, over which the State legislature has no jurisdiction?

Mr. MCDONOUGH. They have so declared.

The CHAIRMAN. Who has so declared?

Mr. MCDONOUGH. The Public Housing Authority.

The CHAIRMAN. Or is it a contract between the State and the Public Housing Authority which cannot be terminated by State law?

I have always sympathized with your problem out there, but I think it is purely and simply a State question and not a Federal question.

Mr. MCDONOUGH. The situation stems to the original contract made by the original Public Housing Authority of the previous mayor of the city of Los Angeles.

The CHAIRMAN. I am sure the question came to the Public Housing Authority here in Washington early. But the State legislature could have acted and made it possible for the new administration of Los Angeles to set up a new housing authority, which could have rescinded by resolution or otherwise the action of the housing authority which was given this autonomy the day before it took office.

I am sure the situation in Los Angeles would have been different, because the new public housing authority would have abided by the wishes of the new authority.

Mr. MCDONOUGH. The previous housing authority, under the previous mayor of Los Angeles, the judicial review of this authority in relation to the original contract was reviewed by the State Supreme Court, that it was a contract entered into in good faith and would have to be abided by.

The CHAIRMAN. It could have been rescinded, of course, only by the same agency that entered into the contract in the first place, so a new public housing agency, set up under a new concept of public housing under State law, could have rescinded the action taken by the then existing public housing authority.

I have never understood why the people of Los Angeles did not seek relief through the State legislature. I do not think we have any jurisdiction over the matter down there.

Mr. COLE. Mr. McDonough, isn't part of the answer to your question the fact that the Los Angeles situation has been settled, completely?

Mr. MCDONOUGH. No, I would not say that. The question that I am concerned about is that, from the autonomous action of the public housing authority in Los Angeles, that it appears to me that under

the existing legislation similar autonomous authorities could be created in other parts of the United States, and, in our case, if there was a fault on the part of the State legislature the fault became evident after we had been obligated to build 10,000 units against the will of the people and to assume an obligation of $100 million, or something of that sort.

The CHAIRMAN. Mr. McDonough, under the laws of every State that I know of, where a political subdivision of that State, the administrators of a political subdivision of that State, are not following the clear intent exhibited by the people, then they are all subject to removal by the Governor who is the chief executive of every State. I do not know of a State law which does not save to the Governor himself the authority to go in to any situation so long as it is a subdivision of the State.

Mr. MCDONOUGH. Down to the city level?

The CHAIRMAN. Below the city level, and remove anyone who has been set up, who is not responsive to the people.

Now, if the State of California has not reserved that right to the Governor, in law or by constitution, then it is not the fault of the Federal Government, it is the fault of the State of California.

Mr. BOLLING. Mr. Chairman.

The CHAIRMAN. Mr. Bolling.

Mr. BOLLING. If we are through with this phase of the problem I would like to ask a couple of questions about the Los Angeles situation. The CHAIRMAN. Could not we get back on the bill? Because I might say that if we are going ahead with these hearings we have got to close out on these subjects. Mr. Cole has a part of his original statement yet to cover, very important questions, and we can take up the interpretations of this law, it seems to me, in executive session, as well as here in open session, and not take up his time. Because we are going to be in a terrible situation if we do not dispose of these witnesses whom we have before us here this afternoon. We have got to start rolling tomorrow or this whole thing is going to be thrown into imbalance.

Mr. GAMBLE. Aren't we always that way with regard to housing over the years?

The CHAIRMAN. We would like to avoid it this year if possible.

Mr. BOLLING. Mr. Chairman, there is another facet of the matter which ought to be in the record, which will be very brief. Has there been any cost to the Federal Government through its reduction by voluntary agreement from 10,000 to 4,300 units?

Mr. COLE. Yes, sir.

Mr. BOLLING. What has that cost been?

Mr. COLE. It has been estimated at about $2 million. The final determination has not been arrived at.

Mr. BOLLING. Just out-of-pocket cost, $2 million, with nothing in return for it, for anybody?

Mr. COLE. Well, I do not know whether there is nothing in return for it. I suppose it is settlement of a most controversial and difficult problem, and that may enter into some of the cost, Mr. Bolling, and it was. It was a thing which caused more grief to the program of public housing, both pro and con, than anything else. It expanded far beyond the confines of the area.