Nation: Big First Step

In the fight against urban slums, one huge reservoir of money and talent—the business community—has been largely overlooked. Now, with a powerful economy mood in Washington blocking any large new federal programs, urban spokesmen, both in Congress and the Johnson Administration, are looking for ways to lure private industry into the ghettos. Business, in turn, seems to be awakening to its opportunities as well as its responsibilities in the cities. Last week, as proof, the nation's life insurance industry pledged to invest $1 billion in the slums.

Initially, most of the money would go into housing, one of the most acute needs. Later, funds would also be channeled into new job-producing industries and businesses. Though new safeguards from the Federal Housing Administration would minimize the risks that have hitherto frightened most businessmen away, profits, in the current tight-money market, would unquestionably be lower than they would be from comparable investments elsewhere. Still, as one executive frankly noted, the $1 billion is a "good, long-range" investment.

Expensive Recording. "We do business with 125 million people in life insurance," he said. "We are interested in anything which will promote the health, wealth and income of the nation." "We want to record ourselves," added Gilbert Fitzhugh, chairman of the Metropolitan Life Insurance Co. and head of the industry committee that formulated the plan, "as sharing in the determination to find ways to improve the quality of life in the cities." As part of that recording, Metropolitan and Prudential, the two giants of the field, each promised $200 million.

The insurance companies had been closeted with Administration officials for weeks devising the project and President Johnson, who has shied away from any new federal projects in response to the summer riots, praised it as if it were his own,* jubilantly bringing a host of business and municipal leaders to the White House for the announcement. "What the Government does," he told the gathering, "really is only the beginning. Private efforts are not just essential to success—they are central to success."

Johnson had more than one reason for praise. The insurance companies' pledge may be the crucial factor in keeping alive his cherished rent-supplement program, which has been killed by the House of Representatives but approved by the Senate Appropriations Committee. Since much of the $1 billion would finance apartments for tenants supported by the rent supplements, it represents tangible evidence for conservative Congressmen that business not only supports the program, but will also provide more than enough private financing to get it under way. Given the need, even $1 billion is not a large sum, but as a breakthrough in bringing private enterprise into an area it has traditionally shunned, it may have an importance beyond all accounting.