Mr. BISHOP. That is right. Small firms that go out and do not have a chance of success over the long pull.

Senator DOUGLAS. Senator Proxmire, you have some cutover counties in the northern part of Wisconsin. Did you have any questions you wished to ask?

Senator PROXMIRE. I certainly do have some cutover counties there. Senator DOUGLAS. You have a witness from your State coming on immediately after Mr. Bishop.

Senator PROXMIRE. I am looking forward to that.

Senator DOUGLAS. Would you like to ask any questions of Mr. Bishop?

Senator PROXMIRE. No; I do not have any questions to ask.
Senator DOUGLAS. Thank you very much, Mr. Bishop.

The next witness is Prof. Kenneth Parsons, of the University of Wisconsin.

1

STATEMENT OF KENNETH PARSONS, PROFESSOR, UNIVERSITY OF WISCONSIN, MADISON, WIS.

Mr. PARSONS. Senator, I did not come with a prepared statement. I read your bill and the other bills and tried to check through some of the experience in Wisconsin to see if I could put two or three ideas together that might have some relevance to your problem.

I think you may be interested to know that in Wisconsin we have one of the pilot demonstration counties of rural development sponsored by the Department of Agriculture which is up in the cutover country, which we in Wisconsin think about as the low-income area. Senator DOUGLAS. What is the name of that?

Mr. PARSONS. Price County.

Senator DOUGLAS. What is the county seat?
Mr. PARSONS. Phillips is the county seat.

This is what we generally consider our low-income area in Wisconsin. I know you have had a lot of information here on these lowincome areas, but I thought you might be interested in a few details. First of all, on these studies we are currently making in Price County we have some research going on in the college of agriculture in two or three different departments. For the most part, we find the same thing that everybody else finds when they look at these lowincome areas; namely, there is a heavy outmigration of people and there is a distribution of population in these farm areas which has a good many old folks in it.

One of my colleagues in sociology made a chart of the population pyramid in Price County which might be of some interest to you.

(The chart referred to follows:)

Figure 1 Age-Sex Distribution of Open-country Population
in Price County, Wisconsin, 1956

Reproduced from a study released April 23, 1957, prepared by the Univ. of Wis. Dept. of Rural Sociology, College of Agriculture, Emmit F. Sharp and Douglas G.

Marshall.

Senator DOUGLAS. I notice this age chart has what would have been called 50 years ago an Anna Held waist. You are too young, of course, to know what that means.

Mr. PARSONS. Yes; I am too young for that.

Senator DOUGLAS. You are too young to remember Anna Held, but she was a very beautiful woman who had an almost nonexistent waist. I would say this age distribution is on the Anna Held model.

Mr. PARSONS. The first thing that strikes one in studies in areas like this is the fact that we are losing the young people. In this particular chart, it shows that there are only approximately one-third as many young men in their twenties as there are boys in their teens. Other studies indicate that three-fourths of the people who have left the farm homes in this county have gone outside the county, and so forth. This is the typical thing. It is also usual in areas like this to find a very heavy percentage of farmers engaged in off-farm work. In Price County, where this study was made, we find that about 40 percent of the farmers in the county can be called full-time farmers. The other 60 percent fall into some other classification. Forty percent are full time, I suppose, partly because they don't do anything else. Some of them may not have more than $300 or $400 income. About 10 percent of the farmers can only be called retired people, and the other 50 percent really divide their time between farming and industrial employment.

Of course, as is true elsewhere, the farm people who are engaged in farming full time are, on the average, older than the other people. They are the people with the lesser education, and the people with lower incomes than the people who combine farming and nonfarming work.

In a part of this same research program at the college we have taken farm management schedules on the farms in this county, and with a particular eye to trying to see how many of them could reasonably be developed into full-time farms that would meet the criteria you laid down when you started out, that is, sufficiently efficient to be prosperous. They asked all the people who were interviewed in Price County what they were interested in doing and whether they were interested in farming or doing something else. They also asked them about their capacity and ability, as there are lots of disabled people in these areas. Taking into account the age of these people, our farm management folks decided that approximately one-third of the farmers in this county might reasonably be considered candidates for a rural development program that would develop their holdings into efficient farms. We have not yet worked out precisely what changes would be required, but since a very high percentage of these farms are in the census bracket of commercial farms, bracket VI or VII, most of them below $2,500 gross, it is obvious there would have to be a good deal of adjustment. I do not have any figures as to what that would take, but we do have one study in the United States Department of Agriculture on dairy farming in Wisconsin showing the capital requirements. I presume it would take something like $10,000 or $15,000 per farm to bring these farms up to commercial size. However, that is only a

guess.

Anyhow, as I see this problem, as we look ahead, we do not have very much chance of converting more than a third of these people into full-time farmers. It is an area in which we can expect to have a good many people retire. In this cutover country, with lake country and timber, there are a fair number of people there who just would drift that way and stay there. The houses are there, and they might live out their days there. Our people rather expect a good many folks will stay in this country as a place to retire in, with a modest sort of income. But when people in the communities look at this migration of people, of course, they get quite excited about what is happening

to the country. Basically, the population is going downhill, so it comes around to the other alternative, which is the primary concern of your bill, namely, that of industrial development.

Senator DOUGLAS. That is, bringing industry to the people.
Mr. PARSONS. That is correct.

Senator DOUGLAS. So they can find employment rather than compelling all of the people to leave the area to find employment elsewhere.

Mr. PARSONS. That is correct. I thought it might be interesting to review with you very briefly some of the things we have been doing in Wisconsin in the way of industrial development in this type of situation.

Senator Proxmire might know more about the details of some of these things than I do, but I have tried to get acquainted with the State programs and I visited our people in the State capital and our school of commerce, who are doing work like this. I found 3 or 4 items that were of some significance.

In the first place, there is a long history in Wisconsin of trying to do something about what you here call the depressed areas. Actually, this area in northern Wisconsin which we speak of as 17 northern counties, and sometimes a different number, is an area which at the turn of the century and about the time of the First World War was heavily logged off. Twenty-five years ago there was a lot of trouble there. It was cutover country when I first went there. The college, especially the agricultural extension service and the other State services did a great deal to bring back this area.

Now, Senator, and you may have driven through it, you know it has a lot of timber, and recreational facilities have been developed a great deal. Also it is an area in which you get small areas of pretty good farms, but it is a mixture of farming with a recreational potential. Through a number of measures the area has been brought up considerably from the depressed conditions that were found there after the First World War. More recently, of course, there has been a lot of talk about local development of industry and a great deal of activity. We have in Wisconsin something like 150 local development corporations. They are not unique to Wisconsin, for they are everywhere. Most of these have been sponsored in the small towns and cities, most of them in the area really of somewhat depressed rural conditions, although they are scattered all over the State.

One of my colleagues in the school of commerce, Professor Fine, has made a study on the achievements of these development corporations, which I was privileged to see. It is just now at press. There are 2 or 3 points in there which I thought quite interesting.

In the first place, these development corporations number roughly around 150. The number varies from 125 to 175( depending on how you count them. It is Professor Fine's judgment that these corporations have been reasonably successful in what they set out to do. From half to two-thirds of them-depending on how much life you give them, because the new ones cannot be expected to have done anything but half to two-thirds have been successful in finding industry to locate in their particular towns. The usual thing is they put up a building or take an old building and lease it to this firm."

In addition, we have a State organization working on this which is called the industrial development division. We have a bureau out in

the university extension service called the community development bureau, which has been doing a lot of work on the analysis of the local industrial potential. When I talked to the people in the State capital they were quite impressed with the achievements of these organizations, and some of the folks tell me they think they are doing the job and there is nothing left to do.

When one looks at these organizations and what they have achieved, Senator Douglas, there are 2 or 3 things that can be said. Apparently most of the plants that have come in in this way are branch plants out of Chicago, Milwaukee, or the Twin Cities-more likely Chicago, Milwaukee, and the surrounding area. That is important in one respect, which is that there are relatively few, but there are a few, of these industries which represent the utilization of technological innovations. We have a few of them.

The wages in these areas are relatively somewhat lower than they are in the industrial centers, and I have a somewhat unspecified impression that there are a good deal of employment of women in these industries, as is true generally, of course.

Senator FREAR. Is this seasonal? Do these branch employers move out there for seasonal employment or is it year-round employment? Mr. PARSONS. The cases that have come to my attention, show that the local communities have shown a good deal of good sense in the plants they have gone after. I do not know how much the seasonal factor is involved in the employment in these industries, but I have the impression that they are not particularly seasonal any more so than they are anywhere else. They are looking for year-round plants that will give year-round employment.

The figure that one usually gets, as to the amount of money involved in local communities, is roughly $100,000. They are not running in the millions, or the tens of thousands, but it will be a plan that costs $100,000 to $150,000, which is underwritten in one way or another by the local community.

So these people are careful in the companies that they make arrangements with. All that I can say, not having studied this point particuiarly myself, is that there seems to be a good deal of satisfaction with what has so far been achieved by bringing in these plants.

Senator FREAR. Do they recruit their labor forces from non farm, or both?

Mr. PARSONS. On this point I think this is one of those fuzzy areas of understanding of this problem.

Senator FREAR. That is the the first time I have heard anyone from Wisconsin say there was something fuzzy about Wisconsin. I have usually found them to be pretty clear.

Mr. PARSONS. I will eliminate this fuzz in just a minute. The local people in these small towns who are sponsoring these industries are not particularly thinking about the county, but about their towns in Wisconsin. In Wisconsin we call them villages and cities. I suspect, however, that the employment is pretty well spread out over the county.

I might add, Senator Douglas, that there is a drift in Wisconsin in the direction of trying to make this sponsorship of local industry a function of the county board rather than of the city or village board. Senator FREAR. May I ask a question, Mr. Chairman ?

Is there much of a dairy industry in Price County?