d Having said this I am very glad to call as our first witness our distinguished colleague from Massachusetts, Senator John F. Kennedy. Senator Kennedy, we are delighted to have you here with us. STATEMENT OF HON. JOHN F. KENNEDY, A UNITED STATES Senator KENNEDY. Thank you, Mr. Chairman. I ask if it might be possible for me to file a statement and then I can supplement it with some oral facts. Senator DOUGLAS. That will be done. It will appear at the end of your oral statement. Senator KENNEDY. I first want to express my appreciation to the chairman and compliment him on having called these hearings. This matter was before the Subcommittee on Labor, of which our distinguished present chairman is chairman. Senator DOUGLAS. It is sometimes said I follow this bill about. Senator KENNEDY. I think it is more accurate to say the bill followed you, and now you are chairman of the Subcommittee on Production and Stabilization of the Banking and Currency Committee the bill is before you again. In any case, as the present chairman of the Subcommittee on Labor, I want to express my wholehearted support of this bill. I filed a report on this bill last year when it came out of the Labor Committee and spoke at some length in favor of it on the floor. Senator DOUGLAS. The Senator from Massachusetts guided it through the debates on the floor, was the floor manager for the bill, and did a much better job than the Senator from Illinois could have done, I may say. Senator KENNEDY. I appreciate that statement, but I say that only to indicate that I have had a long interest in this, and I think it is most important, and it was most regrettable that the Congress did not complete action on the bill. The Senate acted on it, as you know, but the House did not. It is my hope that, spurred on by the Senator from Illinois and the Senator from Pennsylvania, we will get some action this year. This legislation is vitally important. I have had 2 indications in the last 2 weeks of the desirability of legislation such as you are considering. We have had witnesses down from Fall River, Mass., which recently slipped from a C area, labor surplus, to a D'area, and I accompanied them on their rounds. I must say that the facilities which can be offered by the Federal Government, even when the members of the administration and the executive branch are doing their best, are most inadequate. I had a very clear picture of the need for legislation such as S. 964, which I really feel would permit the Federal Government to do something about these areas of chronic unemployment. Senator DOUGLAS. If the Senator will allow me to interject, I hope that the delegates from Fall River made due contact with their Congressman, the Honorable Joseph W. Martin, the leader of the minority in the House. Senator KENNEDY. Yes. In addition, we have just had some 700 people thrown out of work in Adams, Mass. One of the problems is 91201-57-pt. 1-5 this question of the definition of unemployment; when is it possible for a community to receive the assistance. I hope in considering this matter the committee will give adequate consideration to this problem of a community dependent upon one source of employment, which is suddenly ended, and which finds itself with a substantial amount of unemployment, not over a long period of time-although, of course, if no action is taken, it will continue but which finds itself with a great many people out of work and with no hope of reemployment. I believe that the criteria prescribed by the administration bill to determine when an area is eligible for assistance are too tight. So I hope in considering this legislation that the problem of large unemployment with limited hope for the future-I hope that a community such as that will be given consideration. Secondly, one of the great problems is the problem of contracts. We originally had bid matching in the bill last year, when it was reported out of the subcommittee, but it was thrown out when the matter came to the floor. There is some reluctance on the part of many Members to provide for bid matching. I can understand it because they feel a firm which is the low bidder then finds the contract taken away from them, and it is sent to some other part of the country. Even though it does put people to work in other parts of the country, it causes tremendous repercussions in the Congress and the community and the company which had the low bid. Mr. Chairman, we have to do something about this because it seems to me it is in the area of procurement that the most immediate assistance can be given to a community. There is no doubt that the present provisions are completely inadequate. In the first 9 months of fiscal 1956, the total volume of supply procurement contracts placed in areas with surplus manpower as a result of the preference now in effect gave to these communities a total of only $2,700,000. This amounted to a little more than one-half of 1 percent of the total volume of supply procurement contracts placed by the Defense Department during this period in the same area. I know from personal experience that this program has been inadequate. I do not suggest it will be possible to get bid matching through the Congress, but I do hope that the subcommittee will call up the people who are responsible for giving defense contracts and examine the inadequacies of the present administrative arrangements in this field, and decide what more could be done. Some form of set-asides-it seems to me a more active form of setasides should be brought into play, because, as I say, in the case of Fall River or Adams, if we could get a governmental contract at a price not any greater than a bidder in another area, then it seems to me that is the most immediate form of assistance we can give to a community without costing the Government anything. Senator DOUGLAS. That is set aside a certain percentage of the Defense contracts in each of the three Departments Senator KENNEDY. That is right. I think if we set aside a large enough percentage without permitting a bidder to bid on it, so he does not feel he has been deprived of what is his, we can perhaps get more favorable action. The point I want to make is, the present provisions of the law are completely inadequate, or the way they are being administered is inadequate. The third point I want to make is the desirability of a separate administrator. I do not think it should be under the control of the Department of Commerce, because it involves Health, Education, and Welfare, and the Department of Agriculture, and the Commerce Department, and the Labor Department. We on the Committee on Labor are very interested in this program. It seems to me to balance off the demands of all the groups that it would be more satisfactory to have an independent administrator rather than having it in the Department of Commerce. Senator CLARK. Will the Senator yield on that? Senator KENNEDY. Yes. Senator CLARK. I have been a little puzzled as to whether it was administratively sound to take this agency out from under the Department of Commerce and to place it as another independent agency directly under the President, because of the multiplicity of organizations of that sort. But I was persuaded to concur with the distinguished Senator from Massachusetts' views in this respect, because the legislative history of this bill convinced me that the present Secretary of Commerce is out of sympathy with the whole purpose of the bill, so that I would be fearful we would not get much, if any, help if we did put it under the Department of Commerce. Since you were here last year and I was not, I wondered if you concurred in that view. Senator KENNEDY. Yes. We had quite a debate on the floor, and the argument was made that there are 65 separate agencies now reporting to the President. However, the fact of the matter is that only a comparatively few are required to be in very constant contact with the President. If the administrator is a man of any personality and prestige, it seems to me it is going to be far more important part of the governmental program if he is a separate administrator than if he is placed as Assistant Secretary in the Department of Commerce, which has not been notable for its sympathy with this whole problem. I would think it was of importance. I do not put it into quite the first category that I put some of these other points I mentioned, but I do think it much more desirable, not only because we will get more action, and not only because there is a Department of Commerce problem-which we have seen-but because there is so much interest in this program in other agencies, particularly Labor and Agriculture, now, with the rural part of the program and housing, due to the amendments put into the bill this year. The last point I wanted to make was, I thought the administration program was very inadequate in its financing. This need is large. We could absorb quite a lot of money, and one of the hopes in the city of Fall River was to secure some means of obtaining purer water, which they feel would lead to industrial relocation in that area. The Pollution Act gave them a very minor sum of money, and, because of the situation, they are not able to get any support from the Corps of Engineers, so the city is not able to undertake any project which would give them purer water. We could absorb a rather large sum of money. The need is great and it would directly furnish employment. It might cost $212 million, and yet we have other communities, such as Adams, which I have named, and the communities of Lawrence, New Bedford, Lowell, as well as Fall River. So I do not think the financing in S. 1433 provides anything significant to meet the problem, which is nationwide, and is particularly urgent in southern Illinois, Pennsylvania, some parts of Kentucky, and West Virginia. We are covering a wide area here. Senator CLARK. Will the Senator yield again? Senator KENNEDY. Yes. Senator CLARK. I am wondering whether you have had the opportunity to make a rough estimate as to how much Federal money could usefully be spent in Massachusetts under this program? Senator KENNEDY. No, I do not have good enough figures to give them but the mayor of Fall River is going to testify before the committee, and perhaps he could give you what they could beneficially use. Senator CLARK. It might be helpful. I am in the process of getting similar figures from Pennsylvania. I would concur strongly in your view that $50 million is just a drop in the bucket, compared to what is needed to get this program going. Senator KENNEDY. I agree this is not just a community problem, but these people in areas of high unemployment or these islands of chronic unemployment, which go on year after year, turn to the Federal Government for assistance, and some of this unemployment is stimulated by Federal policies of trade, and so on. So they come to us, the Federal Government, to meet our responsibilities in this area, and it has been met very inadequately so far, I think. I think the responsibility, therefore, is on all of us to meet this problem, and I think this is the way to do it. If the Congress fails to take action this time, I do not think there is any use in trying to tell the people of any of these communities that we are going to do something for them, because I went through this, as I said, 2 weeks ago, and I feel the facilities available to these communities for obtaining Federal assistance are very inadequate now. It is for that reason I hope that this year the House, as well the Senate, will take action on this much-improved bill. here. I want to thank the chairman for the opportunity to appear Senator DOUGLAS. Thank you very much, Senator Kennedy. You made a great contribution last year, and you make a fine contribution this year. Thank you very much. Senator KENNEDY. Thank you, Mr. Chairman. Senator DOUGLAS. Are there any questions? Senator CLARK. No questions, Mr. Chairman. (Senator Kennedy's prepared statement follows:) STATEMENT OF JOHN F. KENNEDY, A UNITED STATES SENATOR FROM THE STATE OF MASSACHUSETTS Mr. Chairman, I am very appreciative of this opportunity to present my views to the subcommittee on a problem which has had my close attention since I have been in the Senate. There is no doubt that the problems created by the continued existence of pockets of substantial and chronic unemployment throughout our country are more pressing than ever. For the longer these situations endure, the more difficult they become, and the greater the hardship on those affected. Therefore, I cannot emphasize too strongly that early action to provide some Federal assistance to labor surplus areas which are willing and anxious to address themselves to their own problems is of the utmost importance. As you know, several Massachusetts cities have for some time-some of them since 1951-found themselves in the position of having substantial surpluses of labor. Two striking examples of the situation in Massachusetts are the cities of Fall River, which recently slipped from a C to a D area of labor surplus, and Adams, which recently suffered a severe layoff of over 700 employees in the textile industry. These two cities are examples in my State of the kinds of situations which this bill is intended to alleviate. I want to emphasize the effects which chronic unemployment has on the human beings living in these communities, not only in Massachuetts but throughout our land. It is easy enough to talk in terms of percentages, gross numbers of unemployed, labor mobility, and so forth, but when we reduce these figures to the facts of everyday living-a male breadwinner out of work for 6 months or more with little real hope of obtaining employment-then it seems to me we are looking at the problem in its human dimension and it is this dimension that I believe it is extremely important that we emphasize. I think we have come a long way in creating that sense of social responsibility among legislators and citizens throughout our country which recognizes this problem as a national one, as well as one which has to be faced by local communities. No longer, I believe, do people regard the problem of chronic underemployment or unemployment in certain localities in our country as some accident of an impersonal economic system or local inefficiency. We now recognize that most of the people affected by chronic unemployment are victims of forces beyond their control. By this I do not mean that local communities do not have real responsibility and power to help alleviate the conditions in which they find themselves, but I do strongly insist that the conditions which give rise to chronic unemployment are of concern to all citizens and the Federal Government. As you know, a bill similar to those before you now passed the Senate during the closing days of the last session of Congress but was not brought up for action in the House, reportedly because of the lack of vigorous interest by the administration. I am hopeful that this year the administration will both take administrative action and push vigorously for legislation. It is not enough for the administration to make vague recommendations; general statements must be backed by strong action. I should now like to address myself to certain aspects of the legislation before you. Many of the provisions of S. 964 are directed to the correction of underlying causes of chronic unemployment, and this is altogether fitting and proper. However, I should like to draw particular attention to section 16 of the bill which is concerned with procurement by governmental agencies. As you know, the construction of a plan geared to the diversification of industry, refurbishing of industrial plants and the retraining of a work force in an area of surplus is a time-consuming job. In some communities, industrial development commissions and other public bodies have made considerable progress in this type of endeavor; and in those communities presumably the loan and grant provisions of the legislation before you would be of immediate value. However, there are other communities where such planing has not gone forward at a rapid pace. In these latter communities the immediate problem is to get people engaged in useful and productive employment. One of the principal means at our disposal is to channel Federal procurement into areas where there is substantial chronic unemployment. I do not believe that the program which the Government has followed since 1953 has been adequate to the needs of surplus labor areas. I believe the very least that could be done in this regard is to return to the bid-matching program, as provided in S. 964. Such a program would cost the Government nothing but would be of immense value to those areas where wage and salary payments have dropped to a level, in some cases, which will no longer support a family at a reasonable standard of living. I should also like to call the attention of the subcommittee to those provisions of pending legislation which have to do with job retraining. As you know, many of the areas of labor surplus with which we are concerned are communities where there has been an undue concentration of one industry--the so-called oneindustry towns. When, because of technological change, governmental policy |