Senator DOUGLAS. Critical areas or critical defense areas?

The CHAIRMAN. Critical defense areas. That is all we have. There is no other critical area.

Mr. MCMURRAY. There is a critical area under Public Law 96, which is for the purpose of controlling rents, and under Public Law 139 under the Defense Housing Act of 1950.

Sometimes they make an area critical under Public Law 139 in order to permit builders to get liberal financing and, when regulation X was in effect for relaxing it. Thus under Public Law 139 when an area is declared critical it is not for the purpose of controlling rents.

The CHAIRMAN. Then it is not for the purpose of rent control. So we are not interested in this situation.

Senator DOUGLAS. Do I understand that you have roughly 11 communities with roughly 11 million people under the critical defense provision, with about 36 million under critical areas?

The CHAIRMAN. If the Senator will yield, we placed that in the record this morning. I made the statement, asked if anyone knew my figures were wrong, or if they found they were wrong later to correct them, because I don't want to put in any figures that are not correct in the record. The figures were obtained from the Rent Director.

There are 46 States and Alaska and Puerto Rico which have some areas under control. There are 130 areas in those States, which does not include New York. There are 1,300,000 units only. In noncritical areas still under rent control as a result of World War II legislation there are 4,300,000 units, or a total of 5,600,000 units. So we are only concerned with 5,600,000 units out of a total of approximately 50 million housing units, both owned and rental. So we are talking about 10 percent of the housing accommodations in the United States when we discuss this subject at the moment.

I want to get back then to the Secretary of Defense and the Director of Defense Mobilization, that they can under the existing law decontrol any critical area in the United States.

Mr. VANDERSLICE. The fact remains that there are a number of these areas that have been declared critical, and the agencies by their own admission have later taken them out from under controls.

The CHAIRMAN. Section 203 of the act provides for the Defense Area Advisory Committee, which gives the Director of Defense Mobilization authority to appoint an advisory committee. And we set forth in that section how it will be composed.

So the present law gives the administration the right to decontrol. every critical area in the United States if they so choose to do right It also gives them the right 30 days after they have decontrolled, to recontrol it if they want to.

now.

Mr. VANDERSLICE. As I started to say, the fact remains they have declared areas critical on facts that they later admitted were not

correct.

The CHAIRMAN. Your big complaint is they have declared areas critical which are not critical?

Mr. VANDERSLICE. That is right. They even went out to Denver I have a letter from Denver which shows it seems to be a contentious spot. The letter states that someone from the Washington office offered them a 25 percent increase in rents if they would cease their fight against rent control.

The CHAIRMAN. We shall ask the Secretary of Defense and the Defense Mobilizer to check into these areas to see whether or not they ought to be decontrolled and to recheck them to see whether they should be continued to be controlled,

We will direct a letter to both of them to that effect.

Hon. HOMER E. CAPEHART,

United States Senate.

THE SECRETARY OF DEFENSE,
Washington, March 27, 1953.

DEAR SENATOR CAPEHART: Reference is made to your letter of March 19, 1953, requesting a review of all critical defense-housing areas by March 30. Because a majority of the critical areas were so designated for the benefit of military activities, the Department of Defense has, during the past year, maintained continuous surveillance over all critical areas involving military establishments in order to determine current conditions and significant changes in each area. Such efforts were undertaken to assure that the responsibilities of the Secretary of Defense were properly discharged in accordance with the provisions of the Defense Production Act of 1951, as amended, and Defense Mobilization Order No. 20, issued pursuant to such legislation.

In March a year ago, a directive was issued by the Department of Defense to establish a procedure to be followed by the military departments for reviewing and reporting quarterly on all certified areas in which military installations are located (DOD Directive 4165.3, dated March 26, 1952, copy attached). As a result of the review made in December 1952, the Department of Defense ascertained not only the extent of changes in the military situation but whether the designation as critical was still justified in those areas certified for a year or more. In a large majority of military areas, it was determined by the Department of Defense that there was no basis for any change in area status; however, 27 areas required further study by the military departments to evaluate current status, leading to recommendations for the continuation or removal of the critical-area designation. A similar review is now in process which, upon completion of a checkup on local conditions by the military, will provide for current appraisal of all areas certified for the benefit of military activities.

A representative of the Department of Defense serves on the Defense Areas Advisory Committee established under authority of the above-mentioned law and participates in the determinations and recommendations for all critical areas. The advisory committee has recently adopted a procedure for automatically reviewing each area and is currently reviewing a large number of certified critical defense-housing areas. This Department is responsible for supplying information on in-migration and housing problems at military installations and for recommending appropriate action for military areas. The other agencies on the advisory committee are responsible for determining whether local housing and rent conditions meet the criteria of law.

Sincerely,

THOMAS P. COOGAN,

Director, Armed Forces Housing Agency.

DEPARTMENT OF DEFENSE DIRECTIVE

Number: 4165-3-Critical defense housing areas, quarterly review and report of changes in status of military activities (DD-MB (Q) 518).

1. The Advisory Committee on Defense Areas has adopted a policy which requires a periodic review and reconsideration within 90 days of the last action date of all cases processed under authority of Public Laws 96 and 139. purpose of this review is to determine that

or

The

(a) Previously reported facts and considerations are essentially the same;

(b) Specific changes in strength, housing, or rent conditions impend or have occurred which might revise or revoke the last action taken or require program changes.

Accordingly, the military departments are requested to undertake a review of all cases previously submitted to the Office of the Secretary of Defense in order

that current conditions and status can be determined every 90 days. Reports submitted during and prior to November 1951 shall be examined first. This review should be completed and the results reported to this office by April 15, 1952, and every 90 days thereafter. A review will not be necessary at this time for areas for which original reports have already been revised or supplemented since the beginning of December 1951.

2. Reports prepared and submitted by the military departments during December 1951, and which have not been revised or supplemented since that time, shall be reviewed and the results reported to this office by April 30, 1952, and every 90 days thereafter. January 1952 reports shall be reviewed by May 15, 1952, and every 90 days thereafter, etc. Areas for which no changes in conditions have occurred shall be reported but may be listed in one memorandum stating this fact; otherwise, a separate memorandum is required for each area indicating any current changes.

3. The areas in which the departments have a direct interest and for which reports were submitted to the committee are shown in the attached lists, which have been prepared as a guide for compliance with this quarterly reporting requirement. 4. On the basis of information furnished by the three military departments to date, a total of 294 reports on military activities have been submitted to the Advisory Committee on Defense Areas by the Department of Defense. These reports involved military activities in 208 areas. Of the 294 reports forwarded to the advisory committee, 109 were for Army activities, 78 for Navy activities, and 107 for Air Force activities. A total of 160 areas have been certified to date under Public Law 139 for Defense housing and community facilities, and 100 areas under Public Law 96 for imposition of rent controls. Of the remainder, 47 of the areas covered by these reports are under active consideration, 32 were deferred for future consideration or action and the remainder are still pending.

5. The initial or first report requested by the Armed Forces Housing Agencyor initiated by your department for consideration and action by the Advisory Committee on Defense Areas (DPA)—on a specified defense area, previously required under reports control symbol DD-M&P-2, will be continued under reports control symbol DD-MB(AR)-518 in accordance with the attached format, Other reporting requirements under the former symbol are superseded by the periodic reporting requirements of this directive which will be submitted under reports control symbol DD-MB(Q)-518. Reports control symbol DD-M&P-2 i herewith rescinded.

Hon. HOMER E. CAPEHART,

THOMAS P. COOGAN,

Director, Armed Forces Housing Agency.

EXECUTIVE OFFICE OF THE PRESIDENT,
OFFICE OF DEFENSE MOBILIZATION,
Washington 25, D. C., March 27, 1953.

United States Senate, Washington, D. C. DEAR SENATOR CAPEHART: This is written in response to your letter of March 19, 1953, requesting a review of all critical defense-housing areas by March 30, 1953 It may be of interest to you to know that the ODM Defense Areas Advisory Committee has had in effect a review procedure for the past 90 days. The committee deems it necessary to make such reviews in view of the provision in Public Law 96, the Defense Production Act Amendments of 1951, which states that "maximum rents in any critical defense-housing area shall be terminated at such time as the Secretary of Defense and the Director of Defense Mobiliza tion, acting jointly, shall determine and certify to the President that such ares is no longer a critical defense-housing area ***"

The procedure provides for an automatic review of each area after it has beet certified 1 year. Also, the procedure provides for an interim review if informstion comes to the attention of the committee that suggests that conditions har" changed. Such review may arise from a request by a responsible local organis tion, a city, or from a member agency of the committee.

The review procedure parallels the procedure in ODM order No. 20 for init recommendation for certification of an area. Under this procedure the Office of Rent Stabilization is responsible for assembling the pertinent data and su mitting a recommendation to the committee. Sources of information include the Department of Defense, Housing and Home Finance Agency, Depart of Labor, Office of Rent Stabilization surveys of local areas, or other defense secas The decision, however, rests with the committee.

The review actions of the committee during the past 90 days may be summarized as follows:

Interim reviews

Two areas: Information given at public hearings raised a question as to the substantiality of inmigration. Committee review resulted in decertification of these areas on the basis raised.

One area: Local officials questioned the substantiality of inmigration and housing shortage. Committee review resulted in decertification on the basis 'aised.

One area: Local officials questioned substantiality of inmigration and housing hortage. During period of review the city decontrolled rents by local option. The review sustained the committee finding but no further action was taken or Federal recontrol.

Four areas: Committee member agencies provided information which on eview resulted in recommendation for decertification.

One area: Geographic area definition reviewed and redefined to exclude one ounty as a result of information provided by a committee member.

Three areas: Now under review as result of local requests.

Annual postcertification

Seventy areas reviewed to date:

Three areas recommended for decertification.

Nineteen areas temporarily deferred to secure additional information on military lans, housing, or rent conditions.

Six areas to be rereviewed in June or July, if Public Law 96 is extended, when ousing projects will be completed which should solve housing shortage or seasonal mployment plans can be determined.

Forty-two areas recommend indefinite continuation of certification.

There have also been 10 areas completely decontrolled by local option under he Housing and Rent Act. The committee considers that it is the intent of Congress that local option decontrol supersedes Federal certification for rent conrol. Accordingly, no further action is deemed necessary by the committee with espect to locally decontrolled areas.

As a result of the functioning of the review procedure, there are some 60 areas vhich have yet to receive the annual, automatic review. Our past experience hows that it requires at least 3 weeks to collect information from the local area and to complete such a review. The committee is proceeding as rapidly as possible to review interim requests and make progress on the annual review. If there are any areas which you feel should be reviewed on an interim basis, I shall appreciate your advising me. In order to comply as nearly as possible with your request, I am ordering the committee to give precedence to the review function. I shall be pleased to keep you informed of the committee's progress.

Sincerely yours,

ARTHUR S. FLEMMING, Acting Director.

The Chairman Do you have anything else?

Mr. VANDERSLICE. I had just about started when you came in.. The CHAIRMAN. Your prepared statement is in the record.

Mr. VANDERSLICE. One reason we are against standby controls is that we had a similar situation where the controls were standby, strictly speaking, in Chicago, and a year and a half later they were recontrolled.

I think when you accept standby controls you are accepting a philosophy that controls are sound in principle. I don't subscribe to that. I think the philosophy of controls is unsound. I also feel that Congress is elected by the people, and they should accept the responsibility and not delegate or surrender their power to others, the executive department.

I was taught at school many years ago about the checks and balances and how perfect our Government was with those checks and balances. We have gotten away from that considerably. I think we should go back to it.

The CHAIRMAN. I agree with you 100 percent, excepting I would like to avoid that period between the time a grave emergency strikes and the Congress is able to act. Otherwise, you and I agree 100 percent.

Mr. VANDERSLICE. Well, there is another thing about standby controls. It is always a continual threat to business. I know from actual experience where those controls are nearby the people keep their rents up or they keep their prices up, because they feel that if the controls are going to be put on again they want to be frozen at a higher price. I think it is against the principle of our economy.

The CHAIRMAN. If the standy controls could not go into effect except in a great emergency, would you still say the same thing?

Mr. VANDERSLICE. No, sir; I want the Congress to declare that emergency. Our Constitution says that our Congress shall declar war. I don't think they should delegate that power. I know you wouldn't delegate that power to any one person. That is all tied into it.

The CHAIRMAN. I think we are just trying to be realistic and practical and say that perhaps we will not have another declaration of war. We have had one going on for 3 years in Korea, without a declaration of war. I think you might as well be practical about it Whether it is a good or bad thing, I am not arguing that point. think it is a bad thing, personally, that we do not have a declaration of war. I do not think we will get it again. Therefore, we have to do the best we can under existing circumstances.

Mr. VANDERSLICE. I can't conceive of a situation existing with the policies we have now.

The CHAIRMAN. If we get into a big war as big as World War II. then do you think that prices, wages, and rents ought to be controlled Mr. VANDERSLICE. I am a great believer in what you call the free enterprise system.

The CHAIRMAN. Why can't you answer that question?

Mr. VANDERSLICE. I am not for controls.

The CHAIRMAN. If you get into a war as big as World War II, do you think then we ought to control prices, wages, and rents?

Mr. VANDERSLICE. No, no more than we did in the First World' War. I think if you have controls you should freeze everything They won't do that, and you know that as well as I do. They may do it for a temporary period.

Our trouble stems from special consideration for this or that. I heard one of the gentlemen testify, when I happened to be here a couple of days ago, that it was all right with him if he was exempted He said that the controls were all right for the other fellow. I believe if we reach a point where our country is at stake, then I think every thing should be frozen and everybody should be in, and not any exemptions whatever.

The CHAIRMAN. I can agree with you on that. Do you think s long as the Korean war continues and they are shooting planes dow in Germany and attacking planes off Alaska that we might well be plunged into a big emergency any hour or any minute?

Mr. VANDERSLICE. No, sir; I don't feel that way about it.
The CHAIRMAN. You do not?

Mr. VANDERSLICE. No, sir. I think if that time comes Congress should be the one to decide.