Real estate transactions by their very nature are inherently local in character and as far removed from the interstate flow of goods as one could imagine. Overwhelmingly, in Michigan and elsewhere, the great bulk of real estate sales and rental transactions involve the sale or rental of an existing structure or space therein by one resident to another resident of the same State. Quite obviously, the renting of rooms in a private dwelling has utterly no connection with the free flow of commerce between the several States. Even with respect to newly constructed properties, the materials and goods which may be incorporated therein are obtained overwhelmingly from local sources and any interstate origin of these goods and materials has long prior been divested. Thus, to assert that the legislation proposed will facilitate and augment the free flow of commerce either from a qualitative or quantitative standpoint is plainly to assert the fatuous. Absent any rational relationship between local and real estate transactions and the free flow of commerce between the States, one must gravely dispute the foundation of the proposed legislation on the commerce clause. The purpose of the legislation in question is to promote racial integration and not to enhance the quality or quantity of the flow of interstate goods and services. To pursue the former objective while professing to serve the latter goal is simply not to be candid with the people of these United States.

Nor do we feel that S. 3296 can be legitimately claimed to rest upon the foundations of the 14th amendment. Never in the history of constitutional law in this Nation has it ever been successfully asserted that the 14th amendment or any other provision of the Constitution afforded to any man the right to acquire the use of the property of another man without the latter's free consent. On the contrary, the thrust of the 14th amendment has been against State action or governmental action at lower levels of government and not with the private relationships or acts of citizens in their private lives. Since the legislation proposed is directed at the latter, the 14th amendment foundations are palpably illusory.

With respect to the individual homeowner who would be forced to sell his home to the minority purchaser aspirant, one may well question the fairness of the law if for no other reason than the fact that it would deprive such an owner of the right to make his determination with due regard for the feeling and sensibilities of his friends and neighbors who, by continuing to remain in any given neighborhood, must bear the impact of what he does. However, the operation of this and comparable legislation at State and municipal levels is particularly unfair and poignant with respect to those persons and organizations who earn their living in the housing market. Here we speak primarily of real estate brokers operating as the market media, subdividers and developers of real estate and apartment owners. Typically, legislation of this kind would, in effect, withdraw the real estate broker's services from a substantial segment of the market who in their present state of enlightenment would be unwilling to list their properties with the broker on an open occupancy basis. Here the purpose, of course, is to coerce the property owner by depriving him of the broker's services and to utilize the broker and his livelihood as a pawn for its accomplishments. No regard whatever is shown for the finan

cial well-being of the broker and the losses it will inevitably be his to bear along with those for whom the broker is the breadwinner. Similarly, to force a subdivider in a newly developed subdivision to sell to a minority prospect irrespective of the impact of the sale on the development of his subdivision is to subject him to confiscation of his investment without redress. Much the same observation can be made of the apartment owner who, irrespective of his tenant's wishes, is forced to rent to a minority prospect.

With particular reference to brokers, subdividers and developers and apartment owners, one must recognize that their actions are dictated by self-protection which in turn is controlled by the effect of what they do upon those with whom they may be called upon to deal as clients, customers or prospective tenants. Neither the subdivider nor the apartment owner have any personal interest in the race of the prospective tenant or purchaser as such. They definitely do have such a concern when they contemplate the effect of a sale or rental to a minority prospect in terms of what the reaction of their prospective tenants and purchasers will be. Thus their conduct is symptomatic and not the source of the problem to which this legislation is addressed. Paradoxically, legislation of this sort by its very nature can never be addressed to those who are the source of the ultimate problem; namely,. those of the white population who are neither buyers, sellers, nor renters at any given moment but whose attitudes dictate the livelihood of those who are prominently identified in the market place through real estate brokerage, subdividing and the rental of multiple dwellings. Elementary fairness we submit would dictate that neither real estate brokers nor property owners should be subjected to the force of coercive law of this character and the financial detriments which will flow therefrom without compensation or redress from the Government which imposes the loss or risk of loss. In this regard, S. 2396 is silent as are all comparable legislative enactments of which we have knowledge.

As knowledgeable real estate brokers exposed to the realities of the real estate market, we unreservedly point out two fundamental factors which underlie the whole of the problem of intergroup living, namely: 1. The white majority exhibits a marked pervasive preference to seek out and live among persons comprising its own racial group and, to a considerable extent, the same impulse is manifest among the minority groups.

2. The white majority will not willingly tolerate a racial composition in any given neighborhood wherein the white residents thereof become a minority in that area or neighborhood or are exposed to the risk of becoming such.

Now S. 3296 is not addressed at all to these factors and the problems which they engender for interracial living. Neither are the counterparts of this legislation to be found at State or municipal levels. Implicit in such legislation is the assumption that it is the primary office of Government to abrogate and destroy the preference of the majority to live as it will irrespective of the consequences. Such is simply to emphasize the demands of a vocal minority without just regard for the legitimate concerns of the majority.

Proponents of coercive legislation of the type exemplified by S. 3296 simply ignore the phenomena above mentioned and their impact

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on the real estate market. To such as these it seems sufficient through coercive laws to arm the American Negro with a legal weapon with which to force his entry into areas and neighborhoods preponderantly white and markedly hostile to reception of the Negro newcomer. Yet the whole history of legislation of this character has demonstrated its abject ineffectiveness for accomplishing integration in private living and its marked tendency to accelerate the exit of white people from our urban areas. And so it will continue to be as long as white majorities, apprehensive over the possibility of its becoming a minority in a given area, has the freedom to move and to choose a new location free from the risk above mentioned. The minimal accomplishments of legislation of this sort and its grave trampling upon traditional property rights and the human rights of free choice and preference should in themselves suggest that, although the end may be legitimate, the means calculated to produce the end of integration in private life are hapless and unacceptable.

As real estate brokers, members of the Michigan Real Estate Association are concerned about adequate housing for all groups, racial, ethnic, or otherwise. We are far more concerned that the American Negroes dwelling in our cities be afforded a better housing supply than such housing supply be upon an integrated basis. It is to the development of an augmented supply of better quality housing for the American Negro that the efforts of the Government and private capital should be addressed, coupled with the frank acknowledgement that it does not truly lie within the power of either private or Government to provide the American Negro with Caucasian neighbors. We do feel, however, that given the opportunity to acquire housing which is a fair equivalent to that enjoyed by his white counterpart, the American Negro's experience in living in such new accommodations and the environment which they should produce will make them vastly more acceptable to the white majority in the years that lie ahead to the point where interracial living may be accomplished on a consensual basis with increased facility.

Instead of employing the crude methodology of S. 3296 and similar legislative acts at State and municipal levels, we submit that Government should address itself toward providing a legal climate in which due regard will be given to the control of those factors which produce keen hostility on the part of the white majority toward interracial living. Here we have in mind that interracial living can gradually be accomplished once the white majority in any given area or neighborhood is assured that it will not be inundated with minority prospects and that the neighborhood will be fairly stabilized during and after the integration process. This suggests the need for quotas under the benevolent auspices of Government which would serve as an assurance against the threat of inundation. Concededly under our existing legal framework, such quotas would be of the most doubtful legal validity. The point, however, is that laws can be changed and it is in this direction that change had best produce beneficient effects.

We further suggest the possibility that land developers, subdividers, and the owners of multiple-housing accommodations be guaranteed against loss incidental to their voluntary acceptance of minority applicants in some benign proportion. We submit that the bearing of this

loss could well be a function of Government and worthy of the most serious consideration. Such approaches would be fully in accord with our legal traditions that no man should be compelled to unwillingly sell or contract for the sale or rental of his real property regardless of the circumstances. These methods would also be calculated to encourage experiments in interracial living in new housing developments and in multiple-dwelling accommodations by providing assurance to those whose investments hang in the balance that the risks therein will not be theirs to bear alone.

In summary, Michigan Real Estate Association submits that S. 3296 represents neither good law or sound public policy by reason of the following considerations:

1. The Federal Government's constitutional power to control private residential real estate transactions in the communities comprising this Nation lacks clear legal validity, and the assertion of such authority augurs ill for the continued vitality of the Federal system itself.

2. The proposed legislation, in its coercive aspects, is inequitable in that it visits hardships, pecuniary and otherwise, upon private homeowners, real estate brokers, and those in the business of building or renting private real estate.

3. It tacitly assumes that America is neither large enough nor flexible enough to provide good housing for all, and yet accommodate the understandable wishes and preferences of many of our various religious, racial, and ethnic groups to speak out and find and live among those for whom they feel the greatest affinity.

4. The methodology of this proposed legislation as a means for proposing intergroup residential living has been singualarly ineffecand in multiple-dwelling accommodations by providing assurance to accomplish. Such is the lesson of experience with State and local laws of similar character.

5. Finally, to pursue a policy of integrated housing through legal force is to divert the energies of Government from other noncoercive methods which may be shaped in such a manner as to be properly regardful of the rights and the desires of majorities and minorities alike, and which could be so fashioned as to ameliorate the financial risks of experimental intergroup housing through private capital under the benevolent auspices of Government. It is to the latter course of action that Michigan realtors respectfully invite the attention of the Goverment and the exercise of continuing statesmanship.

Senator ERVIN. Mr. Kenyon, are you a lawyer?

Mr. KENYON. I am not, sir.

Senator ERVIN. Mr. Trebilcock, are you a member of the bar?
Mr. TREBILCOCK. Yes, sir.

Senator ERVIN. I would like to address one or two questions to you which are partly legal and partly factual. Can you think of anything which is more local than residential property?

Mr. TREBILCOCK. No, sir; I cannot.

Senator ERVIN. Have you ever seen any residential property moving in interstate commerce?

Mr. TREBILCOCK. No, sir.

Senator ERVIN. Now, if I were to buy from Mr. Kenyon, either as a realtor or as a homeowner, a resident in the State of Michigan, what interstate commerce would be involved in that transaction?

Mr. TREBILCOCK. In my judgment, none, sir.

Senator ERVIN. As a matter of fact, isn't a home a place where a man goes when he ceases to travel not only in interstate commerce but intrastate?

Mr. TREBILCOCK. I would say so.

Senator ERVIN. Hasn't it been an accepted principle of law in the United States since the foundation of this Government that the power to regulate the title to real estate and to prescribe the terms of contracts relating to real estate rests in the State and not in the Congress? Mr. TREBILCOCK. Heretofore it has, sir.

Senator ERVIN. Have you ever in your experience as a member of the bar encountered any act of Congress, which undertook to regulate the title to real estate or the terms of contracts applying to real estate any State of the Union? Mr. TREBILCOCK. No, sir.

in

Senator ERVIN. As a matter of fact, do we not have in virtually all States of the Union, as well as in all countries that derive their law from the common law of England, a set of statutes known as the Statutes of Fraud which provide, in effect, that no contract or transaction relating to real estate is binding unless it is reduced to writing and signed by the party sought to be charged in the case?

Mr. TREBILCOCK. Yes. Michigan has one of these.

Senator ERVIN. This was passed to prevent fraud from being practiced in transactions or alleged transactions concerning real estate; is that not true?

Mr. TREBILCOCK. Yes, sir.

Senator ERVIN. Would not this bill nullify such laws as to all matters covered by title IV?

Mr. TREBILCOCK. There is a dangerous tendency to do so.
Senator ERVIN. Wouldn't it give oral claims legal effect?

Mr. TREBILCOCK. They would in an action brought under the act as it is presently written.

Senator ERVIN. Where there was any alleged claim of discrimination in violation of title IV, title IV would nullify these very salutary laws which have been enacted by the States to prevent fraud in real estate transactions?

Mr. TREBILCOCK. It might have such an effect.

Senator ERVIN. Mr. Kenyon stated in his statement that an attempt is made to support the constitutionality of title IV under the 14th amendment and the Interstate Commerce clause. Is it not true that the 14th amendment does nothing but prohibit certain types of action on the part of a State, such as a State denying the person due process of law or depriving him of the privileges and immunities of citizenship or denying him equal protection of the laws?

Mr. TREBILCOCK. It has been consistently so held.

Senator ERVIN. In your opinion as a lawyer, is there a single word in the 14th amendment that would justify legislation of this character? Mr. TREBILCOCK. No, Mr. Chairman.

I would further venture the opinion that it has never heretofore been regarded as a privilege and immunity of U.S. citizenship that one may acquire from another, without his consent, his real estate.

Senator ERVIN. As a matter of fact, the 14th amendment not only confines its application to action by States as contradistinguished from