years ago, they raised in excess of $400,000 from their distressed population and their businessmen in an attempt to pull themselves out of their troubles.

Someone has said why don't you do something about it, you people in Rhode Island. As I have said before, we have tried. In fact,

we are still trying.

Recently the Rhode Island delegation in the Congress held a meeting here in Washington with representatives of the several departments of the Federal Government. And we arranged for a series of meetings to be held in the State of Rhode Island, to be culminated by an exhibition, or exposition, whatever you may wish to call it, so that the manufacturers and other interested businessman may learn the needs of the Federal Government in the hope that they could set up their plants to produce the type of products that the Government needs.

One of these meetings was held only last week in the city of Woonsocket, in which officials of the United States Department of Labor, the Small Business Administration, the Department of Defense, Commerce, and others, joined by officials of management and labor in our State, in an attempt to partially alleviate the unemployment in that area. Despite all of our efforts, we find these communities still turning up year after year on the substantial labor surplus list.

Where does the answer lie? How can the country participate in some little way to alleviate the sufferings of the people in these areas! The answer should lie in legislation-legislation designed to bring relief to these areas of unemployment and supplement it with a policy of rehabilitation of their industries. Fortunately, more and more people now realize that the eradication of chronic unemployment is a problem that calls for teamwork, local, State and Federal. Today the necessity of Federal assistance is recognized by both political parties. In fact, support of many measures on this subject now pending in this committee and the House Banking Committee has been pledged by both sides of the aisle.

On March 21, 1957, I introduced in the House the bill H. R. 6244, proposing the establishing of an effective program to alleviate conditions of substantial and persistent unemployment in certain economically depressed areas. My bill is substantially the Douglas bill in the Senate, with one major exception. It contains a tax feature-one that I know and you realize could not be incorporated in a Senate bill, due to the fact that the tax feature has to originate in the House one that would grant any industry coming into a depressed area a tax amortization plan comparable to those now given to those industries engaged in defense production.

May I interpolate here, Mr. Chairman, that I have been reading about the Secretary of the Treasury's position on rapid amortization. I can agree with him in that in many instances so far we might say the plan has been abused. But I believe that that is one of the tools which the Federal Government would have to use in helping the depressed areas and if we were able to do it since 1950 for so many these industries, many of which were supposed to be engaged in defense work, but actually the word "defense" was stretched to a great degree, I believe that this is one place where we could use that type of rapid amortization in order to help industry settle in a depressed

of

area in the hope that they can appreciate the fact that they have got an opportunity to make some money and can be assured of at least a fair profit.

I would not expect anyone, no matter how charitable they may be, to just simply go into a community and invest their funds without the hope of realizing a profit, just to be so charitable as to say, "Well, I am going to come in and help these people get a job, and I am going to foot the bills."

Senator BUSH. Mr. Chairman? Do I understand, then, that, for instance, if General Electric, just to pick a large company by name, were to establish a new plant in one of the towns in Rhode Island that you have in mind, that your bill would give them a rapid amortization privilege?

Mr. FORAND. On that new plant, providing it was not moving certain operations from outside of our State, moving it into the State. We are not out to raid any other place. But if it was a matter of expansion, and a new plant was needed, and they were to settle in Rhode Island, they would be entitled, yes.

This tax feature would tend to bring new industry into the depressed areas for the mutual benefit of all, and it is so designed that it will not permit the transfer of business operations from one State to another just for the sake of getting tax relief. A Federal program in this field would ultimately benefit the Government far more than is realized. A taxpayer who is contributing to the Treasury of the United States is a far happier person and a greater asset to our country than one who has to depend on unemployment compensation or relief.

In conclusion, Mr. Chairman, I wish to state that I am not interested in getting my bill or any other particular bill passed. What I want is any bill that would do the job, the job of relieving human misery and poverty in those areas overrun with unemployment.

Senator DOUGLAS. Thank you very much, Congressman Forand. May I ask for approximately how long have these high percentages of unemployment prevailed in Rhode Island?

Mr. FORAND. Oh, I would say now for quite a number of years. It seems as though the 2 or 3 years previous to, say, 2 years ago, we made a better showing in employment. We seemed to be on the upgrade. Things were coming along. But even then we were still in a surplus area. But on 2 or 3 occasions, if I remember correctly, within the past 10 years, we have been in the major category. We have been having a great deal of trouble over a long period, particularly in view of the fact that our economy was based on the textile industry in the past. And as the textile industry started to leave, either through liquidation or moving to other areas, all of these organizations that I have named have been trying to bring into the State industries other than textiles, so as to try to diversify our employment opportunities, our industries. We have made some progress, but not enough to take care of the slack as it kept creeping in on us.

Senator DOUGLAS. You still have unemployment of over 9 percent in most of the industrial towns and cities of Rhode Island.

Mr. FORAND. That is correct. As a general average, we are still over the 9 percent. And as I said before, the Woonsocket area, which is the northern end of the State, which takes in Pascoag and Burrill

ville and Smithsfield and Manville, all of that area seems to be in that category, very close to the 20 percent.

Senator DOUGLAS. The United States Chamber of Commerce takes the position that these problems can be dealt with locally, that what is needed is local committees of development that will bring industry in, and that action by the Federal Government is not needed.

Mr. FORAND. Well, I have to disagree violently with that point of view. And I base my disagreement upon experience. Now, I have had an opportunity to watch pretty closely the operations in my State. As you perhaps know, I have been in Congress now for 19 years, and Woonsocket and that area is in my district. And as Members of Congress yourselves, you know that when these conditions develop, the people soon let you know what is going on. And I say to you that the people of my State, the people of the several communities, deserve commendation for their efforts in trying to pull themselves up by their bootstraps. But unfortunately we have not been successful, due to the economic circumstances under which we live.

As I said before, textiles at least was our major industry. And as that petered out-and I blame no one in particular for it-we know that circumstances change rapidly, we know also that cotton textiles particularly are going out, we know that the imports of textiles from all over the world, particularly from Japan right now, are all having a very depressing effect upon the industries in our State-and so long as those conditions persist, no matter how much our local people try, they just cannot pull themselves up.

Senator DOUGLAS. You are not afraid of the Federal Government interfering in these matters?

Mr. FORAND. Interfering, did you say? No-I think that the Federal Government has a duty to step in. I have always operated on the theory that the Federal Government should not get in anywhere, on any subject, if it can be handled locally. But if something cannot be handled locally, or on the State level, or it affects people across State lines, the Feder Government has a duty at least to lende ind, no necessarily take full control. I do not believe the Federal Government should take full control, and I do not believe they would. But the departments that have had representatives go to Woonsocket last week, the departments that I referred to, Defense and Small Business and Commerce and so forth, have been rendering this type of assistance in various parts of the country.

I understand that in Oklahoma-I cannot remember just what city it was conferences similar to those being held in Rhode Island have been held and have proven very successful.

Now, if it is a case where it is necessary for the Federal Government to say "Well, all right, we are going to have negotiated bids and give a break to the depressed areas on some of our contracts," I say it should be done. Because the country cannot be prosperous when parts of the country are depressed.

Senator DOUGLAS. Thank you very much.

Senator BUSH. I have no questions.

Senator DOUGLAS. We want to thank you very much, Congressman Forand, for appearing here.

I know that all of us are very happy that we have a number of members of European parliaments here with us. I would like to welcome

them. We have Mr. Georges Dejardin, of Belgium; Mr. Siegfried Moerchel, of Germany; Mr. Petur Petursson, of Iceland; Mr. Arnfinn Roald, of Norway; and Lt. Comdr. Stephen Maydon and Mr. Thomas Peart, of the United Kingdom.

Gentlemen, we are all very glad, indeed, to have you here. I hope to meet you personally. I am sure you would like to meet the distinguished Congressman from Rhode Island, Mr. Forand.

The next witness is Mr. Wallace J. Campbell of the Cooperative League of the United States.

STATEMENT OF WALLACE J. CAMPBELL, DIRECTOR, WASHINGTON OFFICE, COOPERATIVE LEAGUE OF THE UNITED STATES OF AMERICA

Mr. CAMPBELL. Mr. Chairman and members of the committee, my name is Wallace J. Campbell. I am director of the Washington office of the Cooperative League of the United States of America. The league is a national federation of consumer, supply, and service cooperatives. Its affiliated member organizations include in their membership approximately 13 million different families who own cooperative businesses of various kinds through which they obtain farm supplies, insurance, consumer goods, electric power, savings and credit, health services, housing, and other needs.

With the United States in what is commonly looked upon as an era of prosperity, it comes as a shock to many people to know how widespread and how festering are the economically depressed areas of the country. The intensity of unemployment, poverty and economic stalemate becomes apparent only when it is possible to get into those areas where the normal working of our economy has broken down.

This committee has had before it a number of experts who have outlined the economically distressed areas in our urban centers. You have also had in previous hearings before other committees, extensive testimony of the economic state of low-income families in the rural

We would like to devote most of our attention today to the problem of the low-income farm families and rural depressed areas and to indicate our strong support of S. 964, introduced by Senator Douglas and 18 of his colleagues. We are pleased to note the bipartisan support of this measure which is so important to our economy. In hearings before the Joint Committee on the Economic Report in 1955, Senator Sparkman reviewed the Department of Agriculture's report on "Development of Agriculture's Human Resources." He pointed out that "of the total of about 5.5 million farm-operator families in 1950, 1.5 million had cash incomes under $1,000. Many of these low-income farmers," Senator Sparkman pointed out, "are located on small farms and are concentrated in specific sections of the country." The USDA report says specifically:

There are nearly a thousand counties in the United States where more than half of the farmers are mainly dependent on the income from small poorly paying farms. What they are up against, in innumerable cases, is lack of enough good land, lack of equipment, lack of credit facilities, and often lack of the management information and skill which might open wider opportunity to them.

Under Secretary of Agriculture True D. Morse presented extensive testimony to the joint committee at that itme. Several of his state

ments are particularly pertinent for today's hearings. The Under Secretary said at that time:

There are large numbers of rural people with incomes so low they cannot afford the goods and services most of us take for granted. Many of them need special assistance if they are to improve their standard of living.

The poverty existing among some of our people, in good times and bad, has a weakening effect on the entire Nation. Production lost because of lack of edu cation and skills, poor health, and insufficient employment, can never be recovered. It is gone for good. The social conditions arising from low production and low incomes often generate an apathetic attitude. Community, educational, religious, and civic affairs suffer. Confronted with the overwhelming handicaps of chronic poverty, many people with very low incomes see no possibility of improvement using the inadequate resources and few opportunities available to them.

The development of agriculture's human resources is one of this Nation's most important economic and social problems. Very low incomes, that is, incomes in the range of less than $1,000 a year, are concentrated in agriculture. Less than one-fifth of the farmers in areas of low rural income produced and sold $2,500 worth of products in 1949. Investment in land and buildings is only about onethird of what it is elsewhere. Average schooling of adults on farms is 7 years. There are few outside jobs, and little use of machinery on low-income farms. This, we feel, is a very significant statement on the part of the Under Secretary of Agriculture.

It is largely because of these conditions that American farmers are migrating to the cities in an effort to attain a decent standard of living, The Department of Agriculture estimates that between 1930 and 1950 there was a decrease of 580,000 farms in the low-production cate

gory.

Senator DOUGLAS. Mr. Campbell, the last figures I have seen indicate there has been a decrease of approximately 600,000 in the total number of farms since 1952. That is, the total has gone down from approximately 5.5 million to approximately 4.9 million farms. So that these figures would indicate a decrease since 1930 of at least 1.2 million farms. Mr. CAMPBELL. That is right.

Even with this migration, which represented a 26 percent decline in the number of commercial farms with less than $2,500 in sale of farm products, the low-production farms remaining were 44 percent of all commercial farms in 1950. Put in other words, even with this number of farmers going to the city, the relative proportion of farm families falling in the low-production category has not shifted substantially over periods of depression and prosperity.

The impact of this problem was sketched out graphically to the Joint Economic Committee by Prof. William H. Nicholls, professor of economics at Vanderbilt University. He said that the "outmigration of people from low-income areas" will rarely solve the local economic problems unless, at the same time, capital also moves in. Dr. Nicholls called for a broad-scale attack on farm credit problems in low-income rural areas, using facilities of the Farm Credit Administration and Farmers' Home Administration, supplemented by a very substantial increase in funds for supervised intermediate-term farm improvement loans.

Another witness before the committee at that time, Dr. C. Clyde Mitchell, chairman of the department of agricultural economics of the University of Nebraska, put the problem in very dramatic terms. He said the amount of loan funds needed will be large, possibly in the neighborhood of $15 billion to $20 billion of new agricultural credit within the next 5 to 10 years. With these funds, he said, it would be