AREA ASSISTANCE ACT OF 1956

TUESDAY, APRIL 24, 1956

HOUSE OF REPRESENTATIVES,

COMMITTEE ON BANKING AND CURRENCY,

Washington, D. C.

The committee met at 10:30 a. m., the Honorable Brent Spence, chairman, presiding.

Present: Chairman Spence (presiding), and Messrs. Brown, Patman, Multer, O'Hara, Mrs. Griffiths, Messrs. Ashley, Talle, McDonough, McVey, and Bolton.

The CHAIRMAN. The committee will be in order.

We will resume the hearings on H. R. 8555.

Will the clerk call the first witness?

The CLERK. Mr. Chairman, the first witness is Mr. Goffrey Hughes, executive director of Southern Illinois, Inc.

The CHAIRMAN. Mr. Hughes, you may proceed as you wish. If you have a written statement, you may read it without interruption if you desire.

STATEMENT OF GOFFREY HUGHES, EXECUTIVE DIRECTOR, SOUTHERN ILLINOIS, INC., CARTERVILLE, ILL.

Mr. HUGHES. Representative Spence, chairman of the House of Representatives Committee on Banking and Currency, and other committee members:

I would like to make a written statement, then after that I would like to speak extemporaneously on some of these matters.

As executive director of Southern Illinois, Inc., and in behalf of my board of directors and the membership of our organization, I want to express our appreciation for the privilege of this appearance at the hearing on H. R. 8555 and the opportunity of acquainting you with the economic problems of the southern communities of Illinois. Unless otherwise stated, I shall direct your attention to the need of the 16 southern counties, with a total population of 355,303, the 1950 census.

The cause of our distress is traceable to many factors, each of which is affected by the others. I cannot say that any one circumstance or condition produced our problems, but would have you understand that a diversity of conditions has developed, leaving us with a persistent problem of unemployment, with its attendant-necessary but deplored-public relief and general assistance cases in numbers that reflect unusually high percentages of the total population (see pages 2 through 6 and attached newspaper layout-"Fifteen Illinois Coun

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ties Struggle for Survival," St. Louis Post-Dispatch pictures section, pp. 2-3, April 15, 1956).

I would like at this time to call attention to these pictures that came out. Christopher is my home town. I recognize that place, course. Royalton is a coal mining town. This picture is an abandoned coal mine at Royalton.

Down below is main street of Johnson City, in Williamson County, and here are the counties generally that are considered the 19 depressed area counties of southern Illinois.

This picture at Cobden is an abandoned farm.

In my testimony I will say that several thousand farms have been: abandoned.

Orient, I know the school principal there. His name is Cecil Eberhardt. He is looking at an abandoned schoolroom at a time when schoolrooms are crowded over the Nation. There is an actual picture.

Here is Anna; people standing in line for surplus commodities. Now, our organization, Southern Illinois, Inc., did not provide these pictures, did not have anything to do with that, but a good part of the material presented here is factual and certainly reflects a rather true situation in southern Illinois.

Our organization, rather than talk about these deplorable things, likes to talk about the brighter side. We take the constructive and optimistic attitude.

Over to the right are some of the things that have been done. Our university provides a program of community uplift for Eldorado, and it is being passed around the other communities.

At Herrin they have done a considerable amount of attracting and developing new industry. They developed some home industries there. Our university has technical training.

Over here is Devils Kitchen Dam, an impoundment of water for industry, and the Federal Congress has granted 2 allotments of $1 million each to get this completed.

Over to the left there is Big Muddy River. That has been known as a navigable river for a good many years, and our hopes are tied in with these things down here and some other things that I shall report to you in my written statement.

If you should like to know what Southern Illinois, Inc., is, you will find it here, a community organization representing the lower counties of Illinois. It is supported by chambers of commerce, civic clubs and organizations, professional groups, labor unions, a great group of people, professional, business people, interested in the welfare of our

area.

On the subject of coal mining, I will read from the statement.

For years, five of our most populated counties-Franklin, Jackson, Perry, Saline and Williamson-depended on our basic resource, coal. Employment in the shipping mines of Illinois declined from 85,037 men in 1920 to 28,246 in 1950. Further reduction followed with employment 26,936, 21,674, 17,201, and 15,252 in the subsequent years extending through 1954. Our southern counties were producing about 40 percent of the total tonnage but since World War II a disproportionately higher reduction was suffered because of higher coal costs in old deep shaft mines.

Our coal industry once enjoyed four major markets, namely, the domestic, manufacturing, steam railway locomotive and the generation of electricity. Substitute fuels have made great inroads in the domestic market and in the factories. The diesel locomotive has all but replaced the steam engine on the railroads, but

This is exhibit material showing the unemployment report from the State Labor Bulletin, some statements from the employment offices, the actual population and decline in population, the number of people on assistance, and I want to point out that we are spending $1,127,193 per month in those counties.

This is just a crude drawing to show you the area that I am talking about and some of the proposed developments and some that we hope to have.

The next page over here, I want to call your attention particularly to that. I will refer to it again later. This is a copy from one of Congressman Spence's State papers, the "Courier Journal," Central City, Ky.: "Green River Development Work Spurs Optimism in Coal Region."

We have praised those people for their aggressiveness in getting these things. We think that is the answer to some of these coal problems, barge transportation.

I want to call your attention to the fact that we don't have that, and we would like to have it. We don't envy those people. We applaud their aggressiveness in getting it.

On the righthand you will see on that page a statement from "Business Week" of January 28, 1956, in which the "Olin Deal Fulfills Three Dreams" appears.

Olin Mathieson Chemical Corp. was looking for a place to manufacture primary aluminum, and they found that the Pittsburgh Consolidated Coal people have developed the first low-temperature coal carbonization plant. They found out that the American gas and electric people were people with a tremendous amount of money and imagination and they put those two operations together and provided electricity almost at cost or possibly a profitable byproduct. Olin insisted upon that, and so there is a three-way tie-up between the coal company and American Gas & Electric Co. and the Olin Mathieson Co.

I think that is one of the great future prospects for our depleted and our distressed coal fields, is the tying up of the chemical industry with the electrical industry, with the aluminum industry. It is already demonstrated.

Those people are to be applauded for having those fine aggressive companies that could do that.

(The material referred to above follows:)

FIFTEEN ILLINOIS COUNTIES STRUGGLE FOR SURVIVAL

CRISIS IN SOUTHERN PART OF STATE IS DUE PRIMARILY TO THE CLOSING OF COAL MINES, CAUSING A GENERAL SNOWBALLING OF UNEMPLOYMENT-AREA IS TRYING TO ATTRACT NEW FACTORIES, PULL ITSELF UP BY BOOTSTRAPS

(By Robert E. Hanon of the Pictures Staff)

In southern Illinois, abandoned coal-mine tipples stand like tombstones in an industrial graveyard. Once they hummed with activity, signifying prosperity in an area where coal mining was the chief industry. As oil and gas

gradually displaced coal, mines closed down, and now the silent tipples symbolize the area's economic distress. Paradoxically, this dismal scene presents itself in the heart of a prosperous Nation.

Decline of Illinois coal mining is attested by a few statistics. In 1923, when the industry was at a peak, 103,000 men were employed in 1,136 mines. After the depression of the 1930's, production climbed to another peak in World War II, but the manpower shortage brought on mechanization. In 1951, there were 302 mines and 29,000 were employed.

Last year, only 198 mines operated, and only 13,000 men worked-and they worked only 2 or 3 days a week. Over the years, some mines were abandoned because the coal was exhausted, but others closed when it became too costly to get the coal out, or the product was uncompetitive in distant markets. There still are billions of tons of coal in the southern Illinois fields.

Production actually is up somewhat from the postwar low in 1954, indicative of industry efforts to regain lost markets and create new ones. But employment remains at a low level. Coal is producing only 38 percent of the Nation's energy, a 25 percent drop in 10 years. It lost a huge outlet when railroads converted from steam to diesels. It has lost one-third of its home and building heating customers to oil and gas. Many industries no longer use coal to fire smelters, mill and factory boilers.

In the 15 counties that comprise southern Illinois' depression area, coal's decline naturally has had a tremendous socioeconomic impact. With thousands of miners unemployed, trade and service industries that depended on miners' paychecks have slumped. Unemployment snowballed, until now more than 31,000 persons are out of work, according to Representative Kenneth Gray, whose congressional district covers 14 of the counties. These represent about 19 percent of

the area's employable work force.

In the last 5 years, 25,000 persons have left the area to find work elsewhere, and 6,000 farmers have moved off the land. Almost 30,000 persons are receiving public aid; the relief bill totaling more than $1 million a month. Thousands more are living on unemployment compensation or pensions. Altogether, 51,000 people are receiving Government surplus food in Gray's district.

While the collapse of coal was the main cause, other factors have contributed to the area's ills. Fluorspar mines, unable to compete with Mexican imports, also have shut down. In recent years several large factories closed, some because of cutbacks in war production, others because of technological changes. Agriculture never flourished; the land is poor and most farms are small, submarginal operations. Much of the area is unproductive forest land. Fruitgrowing, a major industry in some places, is a risky venture; last year a late freeze destroyed the peach crop.

Such cold statistics and facts, however, fail to portray the human misery, suffering, and hardships that are consequences of a sick economy. Nor do they reflect its far-reaching, self-multiplying effects. Economic disaster may not be as dramatic as a flood or tornado but it is, nonetheless, devastating.

Most southern Illinois towns have been hard hit, and they show it. Many houses and store buildings are vacant and need repair. Streets are deserted. Retail trade has fallen. Property values have tumbled. Tax revenue has shrunk. Streets, sewers, water systems, and public buildings need rehabilitation. Many of the residents who are employed work elsewhere and commute long distances daily or weekly. School enrollment is dropping. Young people are leaving, and with them goes potential leadership. Their absence is reflected in a birthrate that is the lowest in the State.

There are a few bright spots in southern Illinois; communities have solved their economic problems by attracting new industries. Towns like Chester, Herrin, Marion, Carbondale, and Mount Vernon resent being classed as part of the depressed area, but their well-being only serves to point up the plight of their neighbors.

Another bright spot is Southern Illinois University, at Carbondale, a small teachers' college a few years ago and now a large, progressive educational institution dedicated to the area it serves. It is providing much-needed leadership for the economic, social, and cultural improvement of the region. Ten towns have undertaken community redevelopment programs in cooperation with the school. The university's vocational-training institute and extension courses are doing much toward raising the level of education and skills in the area.

Southern Illinois' basic need is industrial diversification. The area possesses most of the resources required for a broad economic base-raw materials, labor,

transportation, good geographic location, and land that could be productive under proper use.

Admittedly, it lacks water, but geologically the area is suited for a chain of artificial lakes that would assure not only a supply for domestic and industrial use but also provide recreational facilities. The area also needs a general facelifting and sprucing up in all regions of community life.

Since such projects would cost money that the area obviously doesn't have, outside financial aid is needed. Most communities are doing their best to help themselves within their limited means. The State's new division of industrial planning and development is trying to interest new industries in the area. Most promising source of help, however, is a Federal-aid program proposed by Senator Paul Douglas, of Illinois, under which $200 million would be made available for loans and grants to promote economic recovery in depressed areas throughout the United States.

Sources: Estimates of Illinois State Employment Service offices, except Hamilton County, which was estimated by the Illinois Public Aid Commission, McLeansboro.

[From Illinois Labor Bulletin, November-December 1954]

TWENTY THOUSAND AVAILABLE WORKERS IN SOUTHERN ILLINOIS

(Surveyed by Illinois State Employment Service and Division of Unemployment Compensation in Cooperation With Southern Illinois University)

Over 20,000 workers reporting to the unemployment compensation, ISES, local offices, whose territories cover 30 southern Illinois counties,1 filled out questionnaires in a survey made last summer. The questions related to their last regular job, occupation, dependents, and whether they were permanent residents of southern Illinois and homeowners.

The replies in this survey represent workers who were seeking employment through ISES from May 15 to July 15, 1954.

WHERE WERE THEY LAST EMPLOYED?

Of the 20,697 workers replying in the survey, 15,552, or 75 percent stated their last job was in southern Illinois. Ten percent of the workers had worked elsewhere in Illinois, 13 percent had last worked outside the State, and 2 percent had never worked or did not report on their previous work experience.

1 Counties included in the survey: Alexander, Clay, Clinton, Crawford. Edwards. Effingham, Fayette, Franklin, Gallatin, Hamilton, Hardin, Jackson, Jasper, Jefferson, Johnson, Lawrence. Marion, Massac, Perry, Pope, Pulaski, Randolph, Richland, Saline, Union, Wabash, Washington, Wayne, White, and Williamson.