country with incomes of $7,000 and over live in substandard housing, fully 12 percent of non-whites with such relatively good incomes are consigned to inadequate dwelling places.

The kind of wide-ranging physical and social reconstruction envisioned in the demonstration cities program is crucial not only to the future of our central cities but to the future health of our metropolitan areas. This is a fact that few of America's snug suburbanites realize except in a time of extremity, when rioters from Watts, for instance, go on forays through their neighborhoods. But our metropolitan areas are organic wholes. The cancer of central city decay infects the entire system.

The broad-scale treatment embodied in the demonstration cities program represent a new way of looking at urban reconstruction. Some of the elements of the program-such as involving the residents of a community in programs for rebuilding it, attempting to use renovation as a way of training the jobless in skills that may lead them into useful trades, establishing special information centers to help people in the slums learn what means are available to help them obtain better housing and improve their lot-are already mainfest in a number of pioneering efforts in cities throughout the country. But these attempts at dealing with our urban dilemmas have generally been too small and scattered to have much effect.

The importance of the demonstration cities program and of the other housing proposals before this Congress, particularly rent supplements and the President's call for legislation to end racial and religious discrimination in the sale and rental of all housing, lies in the fact that they mark a break with the housing legislation of the past. They are our first attempts to correct the awful discrepancies created by the earlier laws.

I hope we have begun to learn from the errors of the past.

We know now that building public housing units that perpetuate the sense of alienation their inhabitants feel is no answer. We know that taking people out of slum neighborhoods in which they have evolved some way of life no matter how wretched and disordered it may look to us and relocating them elsewhere without providing help to keep them from recreating the slums again, is no

answer.

The Harlem mother who told Mayor Lindsay in New York recently (N.Y. Times April 19, 1966), "I love Harlem. I've lived here all my life. I raised my children here I will not be forced out," was merely putting into simple words the complicated nature of our urban dilemma. To her and other inhabitants the wretched tenements of their urban ghetto, the story goes on to say, are "well-springs of future progress", not dead-end communities. The Times observes, "Speaking from a variety of social and political positions, the community voices say the New York City slums must be centers of hope, despite histories heavy with frustration. But, they say, they will need help."

I hope the Demonstrations Cities programs will provide the kind of sympathetic and understanding help these people need. I hope it will address itself to the task of remaking city neighborhoods so that they become staging areas that will prepare people to move freely anywhere they will and, at the same time, create such attractive environments that they will begin to draw people back from suburbia.

The need to create a livable environment right where people are was well put by the sociologist and city planner, Herbert J. Gans, in an article in Commentary magazine ("The Failure of Urban Renewal," April, 1965). He said, "we must clearly understand that moving the low-income populations out of the slums would not eliminate poverty or the other problems that stem from it. A standard dwelling unit can make life more comfortable and a decent neighborhood can discourage some anti-social behavior, but by themselves, neither can effect radical transformations. What poor people need most are decent homes, proper jobs, better schools and freedom from racial and class discimination. Indeed, if the choice were between a program wholly dedicated to rehousing. and a program that kept the low income population in the city slums for another generation but provided for these needs, the latter would be preferable, for it would produce people who were able to leave the slums under their own steam. Obviously, the ideal approach is one that coordinates the elimination of slums with the reduction of poverty."

S. 2842 brings us toward this objective. It provides the means for coordinating much legislation that already has the improvement of urban life for its focus. Our urban renewal efforts, our plans for more efficient mass transportation, our new aid to education laws, our anti-poverty programs would all be expected to become essential parts of any city's demonstration project.

The program would also have significant impact in that a demonstration project will affect as much as 15 or 20 percent of the substandard dwellings in a community.

Considering the enormity of the need, the $12 million the bill would authorize to help cities prepare their demonstration plans and the $2.3 billion authorized as a supplement to existing grants-in-aid programs over a six-year period are far from adequate. I know these sums are meant to provide a beginning, a demonstration of how the job is to be done. Even so, because delays and hitches in carrying out a demonstration program could be fatal and because continuity of program is imperative, I would recommend that the full $2.3 billion be made available upon contract authority as soon as this bill is passed.

This Committee might also give thought to the possibility of including in the bill a rural counterpart of the demonstration cities program. I think the Senate took a significant step in that direction, earlier this week, when it passed the Community Development District Act of 1966. That would provide the means for giving to rural areas the kind of planning assistance now available to urban areas. But Congress should go beyond planning and enact rural equivalents of rent supplements, the 221 (d) (3) program and other programs that would help rural people make better use of their human and natural re sources. If plans for city and suburb must be integral, so must the plans for rural and metropolitan areas.

Considering the criticism that the idea of a federal coordinator for each city demonstration program has aroused I would like to affirm the need for this office. Again, as in funding, delay is the enemy of such projects and a federal coordinator is essential if plans are to be expedited and if there is to be effective coordination of federal grant-in-aid programs with the comprehensive city demonstrations.

I also think the competitive aspect of the program is important. The benefits of the program should go to the most innovative and imaginative proposals for dealing with urban problems. And every effort should be made to see that there is a spread of cities of different sizes in different sections of the country.

Let me remind this committee, if it needs to be reminded, that there is no alternative to something like the Demonstration Cities Act. We must either find ways to make our cities vital and beautiful places to live or larger and larger areas of them will become jungles. By 1985, 180 million people, almost our entire present population, will be living in our major urban areas. The flareups in Watts and Harlem are premonitions of worse things to come if we do not find ways to meet the needs of people piling up in slums.

If four out of five Americans will be living in cities within 20 years, possibly three out of four will be voters and they can be expected to exert decisive influence on politics.

Finally, our economy needs this program. We are face to face with technological revolution. Automated machines will take over more and more routine jobs in manufacturing and service trades. If we are to avoid the dreadful prospect of jobless millions, idle and resentful, we must find new areas of employment. The reconstruction of our cities can provide many of the jobs; so can the cities' needs for recreation, health and educational facilities, and new mass transportation systems. The programs inaugurated by the demonstration cities can begin to create these new job opportunities.

As a man who lives and works in cities I am not ready to see them die. I cannot believe there is anyone here who does not see the folly and waste that will attend inaction. I would hope that all of us will heed the President's request, in his Message of January 26, and join in an effort at remaking our cities that will be "larger in scope, more comprehensive, more concentratedthan any that has gone before."

Senator WILLIAMS. My good friend and colleague from the Congress, Jonathan Bingham, who is one of the bright luminaries on the congressional scene, wanted to introduce you, Mr. O'Connor, but he is on other matters in the Congress.

STATEMENT OF FRANK D. O'CONNOR, PRESIDENT, NEW YORK CITY COUNCIL

Mr. O'CONNOR. Mr. Chairman, I am delighted to be here and I am very grateful for his kind gesture and I am happy

Senator WILLIAMS. He was here, by the way, this morning and made a statement. He was here with your associate, Mayor Lindsay. Mr. O'CONNOR. Mr. Lindsay is one of our partners in the fusion business in New York and I am glad to hear he was down here.

Senator WILLIAMS. We, around here, working on these bills that are before us, need that kind of fusion. It has been very bipartisan today. We have had Senator Javits and Mayor Lindsay, the mayor of Seattle, and Jonathan Bingham and now you weigh in with a good democratic vote.

Mr. O'CONNOR. In all seriousness, I agree with you completely, Mr. Chairman, that this is one of the areas where there should be no partisanship and no politics and I do appear here in all sincerity as a member of the administration of New York City, give full support to the statements made by Mayor Lindsay, and direct my remarks to the plight of the city with regard to transportation as I see it. So I have a prepared statement. I have submitted copies to the committee. May I read it?

Senator WILLIAMS. Fine.

Mr. O'CONNOR. Thank you very much.

I am grateful for your invitation to speak today and I consider it a signal honor to be identified with such a worthwhile project as that envisioned in Senate bill 2804.

I, of course, rehearse the obvious in recording New York City's acute interest in promoting the passage of this measure aiding mass transportation. The life blood of New York City is its transit system. Without it New York could not retain its status as one of the great cities of the world.

However, I do not appear before you just to champion New York City. I am here to champion an ideal of which all our great cities, and not simply New York City, can be a beneficiary. Instances are rare in our history where one can point to any measure as inaugurating a new approach to a vital function of government. The measure before you can well be part of this distinguished company.

Our concern in New York with this problem has been so great that, over 6 weeks ago, I introduced a resolution in the council, urging that Congress enact S. 2804, as well as the related S. 2339. In a press conference held jointly with Congressman Bingham at that time, I stated:

New York's bus and subway system have reached the crisis stage. Present funds are completely inadequate to maintain even the substandard service now being provided by the transit authority *** only substantial assistance from the Federal Government can prevent the complete deterioration of our mass transit system, and permit us to make the vital improvements so necessary for surivival of our City as we know it.

S. 2804 will go a long way toward accomplishing just that. It provides for Federal funds to meet the out-of-pocket, day-to-day operating losses that are crushing New York City's transit system. As I

understand it, the Urban Mass Transportation Act would be amended to authorize grants by the Secretary of Housing and Urban Development to any local agency providing mass transportation service-for example, New York City's transit authority-meeting up to two-thirds of its annual net operating deficit. Since the transit authority's actual operating deficit for the next fiscal year will be at least $84 million, our need for such help can hardly be overestimated.

The bill before you is not just another Federal handout, however. It most constructively conditions its grants on submission by the local agency of a comprehensive 10-year plan for capital improvements to provide more efficient, economical, and convenient urban commuter service. Moreover, the grant is limited to that 10-year period, within a maximum 5-year possible extension, and that only to help carry out an actual improvement plan.

This is just what we require in New York City. The transit authority's fiscal problems have been so overwhelming, just to keep operating, that it has been forced to keep its long-range planning to a minimum. Vast capital improvements are needed, and they must be set in motion right now; the Regional Plan Association, among others, has outlined thoughtful suggestions. In fact, however, we have just been through a catastrophic transit strike over a current wage increase the transit authority was incapable of meeting out of its own coffers. To meet our operating deficits, and at the same time continue large-scale modernization of our equipment and service, Federal grants must be forthcoming. That help is long overdue. Mass transit has always been the stepchild of Federal transportation aid. No one claims that help to automobiles and highways is not equally necessary. We do not begrudge the Federal subsidies to them, any more than we do to the airlines or other transportation media.

The cold fact is, though, that New York City depends on its mass transit facilities, and its need is for aid to those facilities. When Mayor Wagner declared a snow emergency and barred access to Manhattan by all private cars for several days, the city functioned without any but the most minor individual problems. But when the city's subways and buses were knocked out in January, we all know that the city was in chaos.

Indeed, by improving our subways and buses so that they become comfortable and convenient, we will be providing the greatest possible help to autoists. The more traffic we divert to mass transit facilities, the more we unclog our roads and tunnels-and the more driving, both in and to New York City, will become a pleasure instead of the grim chore it is now.

Thousands upon thousands of autoists would undoubtedly be only too glad to abandon jammed expressways and switch to subways and buses, if they were easily accessible, attractive and speedy. All of this can be done with a proper capital improvement program, once the burden of its overwhelming operating deficit is lifted from the New York City Transit Authority.

At this moment, Federal aid to our highways is being provided at the staggering ratio of $360 million from 1964-67, as opposed to some $12 million for mass transit a proportion of 30 to 1. Yet the fact is that 72 percent of the workers who enter Manhattan's central busi

ness district each morning arrive by subway, 11 percent by commuter railroad, and less than 10 percent by car or taxi. Obviously, from New York City's viewpoint at least, the vast bulk of Federal transit aid is wholly unrelated to our problems. The needs of our peopleand of our business, which depends on adequate transit to bring in its workers are simply not being met.

Nor, of course, can the transit authority any longer turn to New York City to bail it out. As you gentlemen must know, in New York City we are currently facing the worst financial crisis in our history. For the first time, we are contemplating a city income tax, taxes on banks and insurance companies, taxes on commuters-any number of drastic remedies about which none of us is happy, but all of which may be needed just to meet our going expenses, without facing our long-range transit needs in any way.

The panacea of self-supporting subway system has long been discredited, yet once again hordes of well-meaning people are urging a fare rise to solve all the subway's problems. But a 10-cent fare rise means a minimum tax of $50 a year on subway riders-and twice that for the tens of thousands in double-fare districts. With our many low-income families, this is an enormous burden. There is no more reason for our subways to be self-supporting than for our post office or our schools to be self-supporting. Subway deficits should be met by all the people, through city, State, and Federal aid, not by regressive taxation striking primarily at the poor.

I was therefore most happy to read Senator Williams' incisive criticism of the "Folklore of the Fare Box," in his excellent speech introducing this bill. I most heartily indorse not miniscule_grants conditioned on constant demands for fare rises-but massive Federal aid, conditioned on a long-range capital improvement program, which will eventually, in Senator Williams' words, "either lessen deficits to the minimal level where they can be totally borne by the State or local governments, or *** eliminate them entirely."

I should like to reiterate here my support also for S. 2339, sponsored by Senator Tydings as well as Senator Williams and, in the House, Congressman Bingham. That bill, which would permit State governments themselves to choose how to utilize Federal transportation aidwhether for highways or for mass transportation-fits in with all our American concepts of decentralization and local home rule. Only the individual State and local governments can know the true needs in their communities, and only they can correct the present malapportionment of Federal aid between highway and subway users.

In New York City, at least, the needs of the subways are the needs of the vast bulk of our people. I therefore applaud to the full, and unqualifiedly, the concepts that are translated into legislation in the proposal under consideration by your honorable committee. I pray that your searching deliberations will culminate in an affirmative committee report. On behalf of all the people in New York City who are directly concerned, I thank you again for the opportunity to serve as their spokesman.

Thank you, Mr. Chairman.

Senator WILLIAMS. Mr. O'Connor, it has been one of the great statements I have heard before this committee on problems of transporta