The Bureau of the Budget advises that it has no objection to the submission of this report. Sincerely yours, VICTOR E. COOLEY, Acting Director. Hon. LISTER HILL, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, Charman, Committee on Labor and Public Welfare, United States Senate. DEAR MR. CHAIRMAN: This letter is in response to your request of July 30, 1955, for a report on S. 2663, a bill to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas. The bill would establish, within the executive branch of the Government, a Depressed Areas Administration under the direction and control of an Administrator, appointed by the President with the advice and consent of the Senate. The Administrator, upon determining that any area is a “depressed area” within the definition of the bill, would appoint a local industrial committee, and upon application by the local committee, he would be authorized to make loans to assist in financing the construction of industrial plants or other industrial or commercial facilities. The Administrator would conduct continuing studies of needs throughout depressed areas for useful public facilities and could make grants or loans for public projects. For unemployed individuals residing in depresesd areas, the Secretary of Labor would prescribe and provide suitable vocational training utilizing existing governmental facilities or contracting with public or private agencies for the provision of such additional training facilities as may be necessary. The Secretary of Labor could enter into agreements with States whereby the State, acting as agent of the United States, would make supplementary payments of unemployment compensation to unemployed individuals within depressed areas while undergoing vocational training, after expiration of the State unemployment compensation and for a period not exceeding 13 weeks. The bill would also amend the Agricultural Act of 1949 to provide that the Commodity Credit Corporation bear the cost of processing surplus food supplies. The Department of Commerce has transmitted to the Congress an Administration proposal to accomplish the basic objective of S. 2663-the alleviation of unemployment in areas of prolonged and substantial unemployment-and this proposal has been introduced as S. 2892. This Department is in agreement with the objective of S. 2663 but prefers the approach embodied in S. 2892, believing it is a better way of achieving the same objective. We S. 2663 contains two provisions of direct concern to this Department on which we would raise objections. Specifically, we would object to the provisions relating to unemployment insurance in S. 2663 on the ground of unjustified differential treatment under a social insurance program. Although this Department does not have administrative responsibility for the unemployment insurance program, we are nevertheless concerned with the adequacy of protection for all workers under all social insurance and related programs. recognize that there are now inadequacies in amounts and duration of unemployment insurance benefits and believe that the Federal Government should continue to encourage and assist the States to improve the protection of these programs. We would seriously question, however, the appropriateness of Federal action to raise the protection of one group of workers above that of other workers covered by the same program merely because they happen to reside in localities determined to be distressed areas under the bill. While we believe that suitable vocational training opportunities should be made available for unemployed individuals in these areas who need retraining, reemployment, vocational education or vocational rehabilitation, we would raise objections to the specific provisions of S. 2663. Administrative responsibility for Federal assistance to States and communities for programs of vocational education and vocational rehabilitation, is now lodged in this Department. S. 2663 would make the Secretary of Labor responsible for all vocational training to be afforded under the bill and would authorize the provision of such training by the Federal Government directly as well as through established State and local programs and agencies. We believe that the provisions on vocational training in S. 2892, which authorize this Department to provide assistance to SECURITIES AND EXCHANGE COMMISSION, Re S. 2663, to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas Hon. LISTER HILL, Chairman, Committee on Labor and Public Welfare, United States Senate, Washington, D. C. DEAR SENATOR HILL: We have examined S. 2663, 84th Congress, 1st session, which you sent to us, and we find that it would not have any significant impact upon the functions and activities of this Commission. We, therefore, have no comment to offer on it. We note, however, that section 13 (c) of the bill refers to the Securities and Exchange Act of 1934. Your attention is called to section 1 of Public Act No. 291, 73d Congress, which provides: "This act may be cited as the 'Securities Exchange Act of 1934.'" Sincerely yours, J. SINCLAIR ARMSTRONG, Chairman. Hon. LISTER HILL, DEPARTMENT OF THE TREASURY, Chairman, Committee on Labor and Public Welfare, United States Senate, Washington, D. C. MY DEAR MR. CHAIRMAN: Reference is made to your request for the views of this Department on S. 2663, to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas. The President has recommended a program of assistance for areas of chronic unemployment which has been incorporated in S. 2892. Accordingly, the Department recommends favorable consideration of that bill in lieu of S. 2663. The Department has been advised by the Bureau of the Budget that there is no objection to the submission of this report to your committee. Very truly yours, W. RANDOLPH BURGESS, Acting Secretary of the Treasury. Senator DOUGLAS. We are very happy to welcome as our first witness the Senior Senator from Maine, Senator Margaret Chase Smith. We are always glad to have you here, Senator Smith. STATEMENT OF HON. MARGARET CHASE SMITH, A UNITED STATES SENATOR FROM THE STATE OF MAINE Senator MARGARET CHASE SMITH. Thank you very much, Mr. Chairman, and members of the committee, I want to thank you for giving me the opportunity to appear before you and give you something of the situation in my State of Maine on depressed areas. My statement to you will be brief, because on January 9, one of the witnesses before your committee will be the Honorable Carl Broggi, Maine's commisioner of development of industry and commerce. He is Maine's expert on the subject which you are considering. Previous to his appointment last fall to the newly created position he holds, Mr. Broggi had a distinguished career not only as a public official and outstanding member of Maine's State Senate, but even more dramatically as a civic leader in rallying the good people of Sanford, Maine, to an economic comeback. To be sure, that comeback is far from completed and still has a long way to go, but it has been effectively and inspiringly started by Carl Broggi and his associates in Sanford. As a matter of fact, this thrilling story was the subject of a recent national telecast called The Town That Refused To Die. I relate these things, Mr. Chairman, for the purpose of showing you the basic attitude of Maine people on this problem. They have the will and the determination to help themselves. They have a zeal for self-reliance. They seek no permanent crutches, but their inherent honesty and practical realism leaves no room for any false pride. Major economic difficulties in Maine have centered generally on the textile industry. There are many reasons for this. There is the cutrate cheap labor competition from Japanese imports. There is the textile migration to the South because of lower wage rates in the South, local tax exemptions favoring the location and construction of new plants, and other factors. Obvious corrective action on these conditions is a closer scrutiny of our reciprocal trade agreements and policy and the elimination of regional and sectional wage differentials. As a steady and consistent supporter of reciprocal trade legislation, I say that as in everything else, there is a factor of reasonableness to be considered in the support of it and that there is a point beyond which we cannot in all good conscience to the people of our own country go in building up the industry and trade of other countries. to the detriment of our own labor and industry. It is unfair to expect our labor and industry to compete with cheap labor of other countries which pay only a fraction of what we pay our workers and which are receiving continued economic and knowhow help from us through the very heavy taxes paid by some unemployed because of competitive foreign cutrate cheap labor. To a lesser extent, the same observation can be made in our own country in a region-by-region comparison; namely, the lower wages of the South as compared to New England and other sections of the country. That is why at the beginning of this Congress last year I introduced a dollar minimum wage and a bill proposing repeal of the Fulbright amendment to the Walsh-Healy Act. Passage of a $1 minimum wage bill at the end of the session last year and the recent ruling of the Federal court on the right of the Secretary of Labor to determine prevailing minimum wages on a Nationwide basis have provided needed corrective action on this problem, but because of the time lag between action and results, it will be some time before the equity of these developments is felt in Maine and New England. Two of Maine's most troubled spots are (1) the Biddeford-Sanford area; and (2) the Washington County area. Much of the difficulty of the Biddeford-Sanford area stems from the fact that it was a one-industry area-textile. Sanford was a one-company town to a great extent. When it lost that company, it was faced with economic chaos. The economic trouble of this area is more recent and of shorter duration than that of the Washington County area where economic difficulties have been severe for a long time. It is chronic in Washington County, while in Biddeford-Sanford, it has been, and I hope will be, only temporary. In other words, the distinction between these two troubled areas of Maine, as I see it, is in the fact that the economic trouble of the Washington County area is chronic, and because of this, I would appreciate very much if August 2, 1955: North Star Woolen Co., manufacturers of North Star blankets, move entire operation to Sanford mill property from Lima, Ohio. August 2, 1955: R. Kolodney Co., Hartford, Conn., expands operations to Sanford. Sanford Dress Co. manufactures Betty Hartford dresses. September 22, 1955: Colonial Aircraft Corp. purchases space for manufacture of their amphibious plane, the "Skimmer." September 1955: Prevore-Sanford Dress Co. leases new building built in Springvale for manufacture of inexpensive dresses. November 10, 1955: Sanford Plastics, Inc., purchases mill property for manufacture of plastic sheeting. December 1955: Nasca, Inc., moves to Sanford. Will manufacture sweaters from llama wool. The total employment for new companies is 471. Senator DOUGLAS. Thank you, Senator Smith. I notice that in the telegram from the Washington County Chamber of Commerce it states the coastal towns of Washington County from Jonesport to Robbinston should be classified as a distressed area. It states that the almost total failure of sardine fisheries has left hundreds of families there destitute and with no other employment available. Is there any explanation as to the relative failure of the sardine plants these past years? Senator MARGARET CHASE SMITH. I think there have been several reasons. I don't know that I can go into details, but one is, the run has been very slow this year, the run of fish up there. Secondly, of course, the imports interfere with the selling. There hasn't been as great a demand for sardines as in previous years. Senator DOUGLAS. I have heard reports that the temperature of the ocean has increased by 1 or 2 degress and that this seems to have had its effect on the fisheries; is that true? Senator MARGARET CHASE SMITH. I don't know that. Senator DOUGLAS. The industry of Washington County in the past has been largely based on fishing, has it not? Senator MARGARET CHASE SMITH. Fishing, lumber, and blueberries. There has just come to me a special delivery letter from C. Arnold Brown, president of the Washington County Chamber of Commerce which I would like also to include in the record which is his report on the economy of Washington County, which may help on some of these questions. (The information referred to follows:) WASHINGTON COUNTY, MAINE, CHAMBER OF COMMERCE, INC., Senator MARGARET C. SMITH, Senate Office Building, Washington, D. C. DEAR SENATOR SMITH: Glad to have this opportunity to furnish you these few facts relative to the economy of Washington County. Also attached is a copy of the economic report prepared in 1954 which covers conditions here very well. We sincerely appreciate your interest in the economic condition of Washington County and are hopeful that some results may be obtained from your efforts. Sincerely yours, C. ARNOLD BROWN, A REPORT ON THE ECONOMY OF WASHINGTON COUNTY, MAINE In the years prior to 1920 the economy of Washington County was sound and there was employment for all who desired it. The county population during this period numbered about 45,000 people employed in the long lumber mills, the granite quarries, coastal and ocean shipping, fisheries, wooden-boat building, small-farm agriculture, logging, and numerous other small enterprises. Since 1920, with the passing of many of the above industries, the economy has changed, and the population has dwindled down to about 35,000 people. Most of the present population is dependent on seasonal industries for their livelihood, and, were it not for unemployment benefits, many would rely on the municipalities and the State for support. Long distances from the markets of the United States, high freight rates, and the lack of abundant electric power are the main factors which have discouraged new industry from locating in this area. Washington County has plenty of good labor, willing to work, and anxious to share in the prosperity enjoyed by other sections of the United States. Here are some of the possible answers to the economic problems of Washington County. 1. The United States Government should set up a definite program of economic aid in this area, as they have done in the South, the Northwest, and in other areas of this country and throughout the world. 2. Encourage and build, either by the Government or private capital, the Passamaquoddy tidal power project, so that Maine and New England will share in like manner to the Tennessee Valley, Columbia River Basin, and other areas where similar projects have been built. 3. Assist our seaport towns in the construction of harbor and docking facilities similar to what Canada is doing for the seaport towns of the eastern Provinces. 4. Go ahead with the proposed St. Croix Island memorial project which has been planned for some years. 5. Make more credit available through the Federal Farm Loans Bureau to encourage more extensive farming and poultry production. 6. Take the Princeton Airport, upon which the United States Government has already spent $1,500,000 and make it part of our chain of defense bases. 7. Some agency of the Federal Government should place a research group in eastern Maine to explore the whole economy of the area and find out what can be done to give the people a sound economy. NOTE.-Attached to these proposals is the economic report of Washington County prepared in 1954. Conditions have deteriorated somewhat since this report was issued due to a very poor sardine packing season and a poor blueberry crop. WASHINGTON COUNTY CHAMBER OF COMMERCE-ECONOMIC REPORT AND RECOMMENDATIONS FOR WASHINGTON COUNTY During a part of 1953 and in January 1954 there was widespread publicity concerning alleged distress in Washington County and suggestions were made that relief be applied for from the State and Federal Governments, in forms not specified but presumably in the nature of grants and gratuities. These suggestions were rejected by responsible Washington County spokesmen as not being warranted by the facts, and as not having been adequately sponsored or authorized. The Washington County Chamber of Commerce thereupon called a countywide conference of leaders in all fields of economic activity in the county, together with representatives of all State and Federal agencies concerned, to determine the actual economic condition of the county, and to propose a recovery program based on self-help, with only such aid from outside sources as might be accepted without unfavorable implications. This conference was largely attended, and a series of reports by panels of it, representing all major industries and interests, showed that the economy of Washington County was basically sound, but that remedial action was desirable in special fields. After checking carefully on changes since the conference was held, certain recommendations have been approved for submission to the Governor, former Governor Cross during his term of office, having indicated a desire that this be done; and to the Maine delegation in Congress, at the suggestion of Senator Margaret Chase Smith. There are still others constituting a program for promotion and implementation by our own people. |