The blight of unemployment in a country as prosperous as ours is a paradox, yet unemployment casts a dark shadow on many sections of the country. Marginal rural areas and places of seasonal operations are deeply affected by this overcast of unemployment, as well as those major industrial areas obviously needing redevelopment.

Naturally, I am deeply concerned with northern Minnesota, and its specia problems of our Indian populations and various seasonal operations. I also have a particular interest in the problems of various rural areas of our State. However, I know that our outstanding young Governor, Orville L. Freeman, will, in his testimony before you, devote considerable attention to current conditions in Minnesota.

Let me therefore make a few introductory comments. It seems to me that, too frequently, in our complacency with our own good fortunes, we find it easy to overlook the areas of our ecoonmy that are suffering through their own small depressions. Too frequently we shrug our shoulders and assert that it is a problem for each particular locality to solve. But I think that most of us in Congress-Republicans and Democrats alike-recognize that when a recession moves into a part of our national economy, it is the responsibility of government to take steps to aid in promoting recovery. We can ill afford to sit back and watch these small depressions accumulate and spread. They just might accumulate like Topsy, and we could have a national depression which "just growed." After the testimony you have heard in this subcommittee, I am confident that you will agree that the answer does not lie in uprooting these areas by removing the people and plowing under the community which once was there. We cannot ignore the ties and roots of a community, or we deny one of the basic reasons for living.

Permit me to reiterate an opinion I offered a year ago: Depression is not only an economic matter; it is a state of mind. People who have worked hard and who have done what they thought were the right things, find themselves without work, unable to support themselves or their families. This is disheartening and disillusioning. It undermines the faith of people in many of the things they had believed in.

In some of the areas covered by this measure, so-called pocket depressions have existed for 20 years or more. Surely some of these places can never get back on their feet. The conditions which brought on unemployment have existed too long, and prospects for recovery are slight. But many others can be saved, and this Redevelopment Act can do the job-I am convinced of that.

I said earlier in my testimony, as a Minnesota Senator I am interested in three phases in particular-the rural development aspects, the help to Indian communities, and the assistance to areas involved with seasonal operations.

Since the last time I appeared before you, rural redevelopment to alleviate persistent underemployment and hardship for low income farm families has been emphasized as part of this measure, and I heartily concur in these new provisions. Insufficient family farm credit, and farmers' chronically adverse terms of trade have caused long-standing rural poverty, and we as a nation must face the needs of these people. You have heard expert testimony on this matter, and I shall not take up your time going over the various aspects of the problem.

Those farm family members who desire to obtain part- or full-time off-farm jobs should be provided with job-finding assistance and vocational training facilities in an expanding full employment economy. Opportunities for employment should be made available wherever possible to help these marginal rural areas so that our prosperity can be meaningfully shared.

Under the provisions of this bill, current and prospective employment opportunities in such areas would be determined first, and then the availability of manpower for supplemental employment. Machinery is provided to expedite these determinations.

Poor land, larger and more highly mechanized farms, increasing competition, all these have gradually been undermining the livelihood of farmers. According to the 1954 census, presented by the Department of Agriculture, one-third of more of the commercial farmers in 458 counties in 24 States had sales of less than $1,200 that year.

Uprooted rural Americans, like those in distressed industrial areas, are told that they have no alternative but to pack up and move on. This is a kind of fatalism which flies in the face of the American tradition. I think we can lick the problem by facing up to it. The Area Redevelopment Act provides us with the tools. A mass migration would sap this Nation of its productive strength and end in human tragedy at a huge social cost.

I am pleased that S. 964 specifically takes cognizance of our Indian communities. Action must be taken to alleviate the joblessness now contributing to the deplorable conditions which exist in many Indian communities in many States. Work opportunities must be made available to these people. They are now more than willing contributors and producers in our national economy. All they would like is a chance.

Section 8 of the bill provides for making loans to assist in financing the purchase or development of land for public facility use, and the construction, rehabilitation, alteration, expansion, or improvement of public facilities within any redevelopment area if this help will provide more than a temporary allevia. tion of underemployment. Given sound Federal backing, I am confident that many States and local governments will move energetically to expand public works projects to help Indian communities now plagued by unemployment or seasonal occupations.

I regret that more cognizance cannot be given to "seasonal operations" prob lems in determining qualifications for "redevelopment areas" in terms of the present bill. I believe there are some instances of chronic unemployment which may not come under the 3 criteria set forth-12 percent for the preceding 1 year, 8 percent for 15 months preceding the 18-month period, and 6 percent for 8 months in each of 2 preceding years.

I am thinking particularly of an area which does have chronic unemployment, but which sometimes has seasonal employment causing temporary improvement. The latter removes it from the categories set forth in "redevelopment areas."

Such an area might be the Duluth-Superior area, where the shipment of iron ore has its seasonal fluctuations and consequently results in variations in the level of employment. The Duluth area was considered "surplus labor region" from 1951 until July of last year, according to the Department of Labor. Except for the seasonal layoff in winter, the employment picture in the area improved considerably. This may have been due to a temporary spurt, but undeniably this region still has it problems, and I would hope that legislation such as S. 964 would help ease them. I know that this subcommittee is giving consideration to these seasonal operations areas.

In conclusion let me simply say this: When industry moves out of an area or when for some other reason a section of the country becomes distressed, there is a resulting drop in the standard of living. From this unfortunate scaling down, health, education, crime rate, morality, family life, and community good are adversely affected. Are these not a nation's concern? Are not conditions a drag upon our whole economy that diminishes prosperity for all of us? S. 964 is not a breadline handout. Rather it is designed to stimulate local initiative and assist those who want assistance. Under it a locally formed committee will make the determination of community needs based on prior surveys. This local committee, as you know, will prepare plans to attract new industries to the area and will enlist the support of local citizens and private and public lending agencies for financing construction of new plants. Without local support and encouragement, the Federal support would be worthless. This program demands and encourages local concern and participation. Let me urge that this bill be favorably reported.

Senator DOUGLAS. I have a resolution from the House of Representatives of the State of Minnesota approving S. 964, which will go in the record.

(The resolution referred to follows:)

To the SECRETARY, UNITED STATES SENATE,
Washington, D. C.

STATE OF MINNESOTA,
HOUSE OF REPRESENTATIVES,

April 4, 1957.

DEAR SIR: I enclosed herewith a copy of Legislative Resolution 13, which was passed by the House of Representatives of Minnesota on the 3d day of April 1957. 1957.

Very truly yours,

G. H. LEAHY,

Chief Clerk, House of Representatives.

HOUSE RESOLUTION NO. 13

A resolution requesting enactment of area development legislation now being considered in the Congress of the United States.

Whereas a high and stable level of employment and prosperity is vital to the best interests of Minnesota and the United States; and

Whereas many communities and areas in Minnesota need and want expanded development of their local resources to alleviate unemployment and underemployment to secure their fair share of our national income; and

Whereas the area development bill, S. 964, now being considered by the Congress of the United States is written to provide for the elimination of unemployment and underemployment and to obtain the policies and purposes set out above: Now, therefore, be it

Resolved, by the house of representatives, That the Congress be requested to support and enact the area development bill, S. 964; be it further

Resolved, That the chief clerk of the house of representatives be instructed to transmit copies of the resolution to the chief officers of the Congress of the United States.

Senator DOUGLAS. The next witness is Mr. Albert Whitehouse. Mr. Whitehouse, we are very glad to have you here. Go ahead. STATEMENT OF ALBERT WHITEHOUSE, DIRECTOR, INDUSTRIAL UNION DEPARTMENT, AFL-CIO

Mr. WHITEHOUSE. My name is Albert Whitehouse. I am director of the industrial union department of the American Federation of Labor and Congress of Industrial Organizations. This department is an arm of the AFL-CIO, operating under rules consistent with the purposes of the parent body to promote the interests of industrial unions. Seventy-six AFL-CIO unions are, in whole or part, affiliated with the department for a total membership in excess of 7,500,000. I would like to thank the members of this committee for their kind consideration of our views.

The industrial unions of the AFL-CIO have a deep and abiding concern with the problem of distressed areas. Our unions are directly affected by the unemployment that persists despite current general prosperity and which reflects itself most disastrously in the distressed areas. Existence of these areas adversely affects our ability to carry out our collective-bargaining functions. More seriously, however, they create among our industrial workers acute suffering and hardship not of their making and certainly not of their asking.

The overall performance of the American economy has reached unprecedented heights. Gross national product reached the all-time high of $412.4 billion in 1956 and is running at an estimated annual rate of $427 billion for the first quarter of 1957.

More Americans than ever before are working in our farms, factories, and offices. The number in the total civilian labor force reached a record 67.5 million in 1956, a rise of 1.7 million or 2.6 percent over

the preceding year.

Not everyone, however, is sharing in this prosperity. The latest figures indicate that 2.9 million workers are currently jobless, despite a March rise in employment of nearly half a million. Even during our greatest prosperity, unemployment in America has consistently ranged between the 2 million and 3 million mark. In the first 2 months of this year unemployment exceeded the latter figure.

In March 1957, the United States Department of Labor listed 19 major labor markets and 59 smaller labor markets as areas of sub

stantial unemployment. An average of 9.3 percent of the total labor force in these 78 areas were unemployed, a figure double that for unemployment in the country as a whole. Over 10 percent of the presently unemployed workers in the United States are in these areas. There is little doubt in my mind that we will continue to be plagued with such statistics as long as we fail to resolve this distressed area problem.

Yet, even now, there are those who place innocent trust and abiding faith in an invisible hand, who still believe that the problem, if let alone, will resolve itself. Such faith must inevitably be shaken by an examination of the facts.

Seven of the 19 major labor surplus areas have been continuously on the Department of Labor list since the current labor-market clas sification system was introduced in July 1951-and that is 6 years. One has been continuously on the list since September 1951, 1 since November 1951, 4 since May 1952-or, in other words, 13 for 5 or more years, 1 since May 1953, and only 5 have been on the list for less than 3 years.

The proponents of laissez faire would do well to reevaluate their position in the light of such facts.

Whether a community is large or small, chronic unemployment is one of the worst horrors that could be inflicted upon it. I speak to you today as one who has seen in the recent past the results of chronic unemployment. I am, at the present time, also president of the Kentucky Industrial Union Council, and I am also director of district 25 of the United Steelworkers of America which centers in the Greater Cincinnati area.

My work has taken me into coal-mining towns of Kentucky and West Virginia. I have seen the deterioration that sets in after industrious men have been without work for idle months. I have seen what happens to the families of these men. I have seen what happens to the pride and to the spirit of these God-fearing Americans. I would not wish such a fate upon anyone. Hundreds of thousands of Americans, who cannot understand why, are being condemned to mental and spiritual decay by the ugly dryrot of involuntary idleness.

This problem cannot be seen in economic terms alone, although this appalling waste of human resources has already cost billions. This is a social problem that will weaken the moral fiber of America unless intelligent action is taken to end it. It is, above all else, a problem of individual human beings who feel forgotten and unwanted in a land where so many have such great prosperity.

Imagine, if you will, looking out your door upon the America of today and knowing that you have no real share in it. Imagine a world in which you must skimp upon the cheapest grades of food, or per haps, exist upon public relief. Imagine the strains and stresses of family life and even contempt from your children.

I have seen these things in today's America. I have talked with jobless miners and with jobless textile workers. I know that these men and women want to become an accepted part of our national community and that they are willing to work hard to earn their keep. These citizens now look to their Government to help them to help themselves with measures that will provide gainful employment and

the creation of wealth for all.

Aside from the social cost in terms of human suffering and deprivation, and the debilitating effects on morale, there is the waste of physical facilities in these depressed areas. Libraries, parks, civic buildings, private business property, and similar facilities are not fully utilized. They deteriorate from improper maintenance, and neglect in turn gives way to drabness and slum conditions.

Senator DOUGLAS. And, Mr. Whitehouse, if these people leave and go elsewhere, homes will have to be built for them, schools will have to be built for their children?

Mr. WHITEHOUSE. That is right.

Senator DOUGLAS. There will be some added strain upon the road systems and highways systems in the new places to which they go. Water and sewer systems will have to be extended. Additional churches will ultimately have to be built. So that there will be a duplication of social capital in the new areas to which they are going which will not be counted as a direct business expense but which will be a social expense, while these facilities lie idle in the communities which are being depleted of manpower? Is that not right? Mr. WHITEHOUSE. You are very right, Senator.

Senator DOUGLAS. Thank you.

Mr. WHITEHOUSE. Unemployment in an area comes about through a variety of causes. An area may lack diversification. There are literally hundreds of communities in America which depend upon 1 or 2 companies as a source of income. And stringent economic conditions for such companies have devastating repercussions on the work force in these communities.

Technological change and increased productivity can cause unemployment if not accompanied by increased demand. Evidence of this can be seen in the depressed mining areas of Pennsylvania, Kentucky, West Virginia and Illinois, or the textile communities of Lowell, Lawrence and other centers in New England.

We cannot force consumers to buy more of a product as it is more efficiently produced. Nor do we want to interfere with the freedom of consumer choice when unemployment occurs as a result of a shift in demand. We cannot, nor would we want to, stop consumers from using gas instead of coal, or synthetic fibers instead of traditional fibers. But we can attempt to understand the causes of such change and meet the problems with constructive policies, policies that would offset unemployment and its adverse effects.

There is still another cause of unemployment in some communities which merits attention. This is the problem of runaway plants.

We stand in favor of the industrialization of communities not presently industrialized or not sufficiently industrialized. But no man in his right mind can call it progress when unemployment is simply shifted from one area to another by virtue of plant relocation. Industrialization of nonindustrial areas is a sound objective when the entire economy is benefited, when total imcome, employment and production are increased. But when cheap labor is the lure, when the burden of unemployment is shifted rather than alleviated, the total economy is not benefited.

The answer to the problems of distressed communities, both large and small, cannot be mass migration of workers from them. Such migration would cause a new problem for every one it might solve.