about risks, and these industrial projects in rural areas are usually rather risky.

If you could combine a bank loan with a loan from a Federal agency with the the Federal agency willing to take second position or take the soft part of the loan I think you would get more loans from the banks more and produce a lot more capital for rural industrial development.

Senator CURTIS. You do not have an opinion as to whether or not this limit should be raised to $10 million?

Mr. MURRAY. I had not heard, is it $5 million now?
Senator CURTIS. I think that is the figure now, yes.

Mr. MURRAY. I do not really have an opinion that it should be raised to $10 million. It would be my personal view that unless there were many projects which had been turned down and could not go because of this limit, then maybe they should take another look at it. But $5 million is a sizable amount and it should provide a great number of factories and other kinds of commercial establishments. Senator CURTIS. Well, the limitation, works out in a very harsh manner. For instance, they could not permit a concern that wanted to build a very large plant to have the $5 milion in tax-exempt bonds and then finance the rest of it another way, because that would not help small business. So consequently, in order to qualify to come within the $5 million limit, they measured it by the fact that over a period of years-I believe it is 3-there was to be no expansion of facilities in excess of $500 million, including what they built then. If a company finds it is necessary to expand they have violated the condition as of a previous bond issue and retroactively those bonds would become passive. Just boxed them in, they do not have elbow room at all.

This program is a workable program. It is not weighed down with Federal red tape. It costs the Federal Government nothing. It adds nothing to the national debt. It is a use of the local credit to promote local industry.

That is all, Mr. Chairman.

Senator HUMPHREY. Senator Bellmon?

Senator BELLMON. I have no further questions, Mr. Chairman. Senator HUMPHREY. You mentioned your views on the departmental reorganization, Mr. Murray. If the Department of Agriculture were reorganized into a combined farm and rural development department would you think this by the way is another proposal which has been advanced-would you think it desirable or undesirable to combine the REA loan program with the water, sewer, waste disposal and other community facility loan programs that now exist or might be added? I mention this because you may recall that when he first proposed it Senator Aiken suggested putting the water and waste disposal program in REA when he began his pioneer work that brought about the enactment of the original solid waste disposal legislation.

This does not mean the administration's reorganization program. This would be upgrading, so to speak, the Department of Agriculture into farm and rural development and putting all the community facility loan programs in REA.

Mr. MURRAY. Well, I believe we are talking about structure.
Senator HUMPHREY. Yes.

Mr. MURRAY. And certainly under the proposals that we make we would be suggesting that there be at least two subdepartments: one which had to do with rural development activities of the department, and the other which had to do with the agricultural

matters.

Under the rural development subdepartment, which we recommend an under secretary be in charge of, these agencies would certainly be grouped together.

Whether REA would have to lose its identification does not seem to me a necessary part of such an re-organization.

I would think that many of our members, because of their long association with REA, feeling that they had immediate access and long working relations with REA, would not support doing away with REA and putting it into another agency.

Senator HUMPHREY. There have been some discussions, as you know, of a so-called rural development bank to try to expand the credit facilities relating to rural America over and beyond the present Farmers Home Administration and Federal Land Bank. Has your organization given any thought to that type of structure? Mr. MURRAY. Well, we generally supported Senator Pierson's concept, his rural development bank which is a good one. It has many fine features. But it has been our observation that few of these bills have much chance of going any place, particularly a bank that is rural.

There have been many urban banks and presently there are proposals for banks that would be mainly to assist urban areas. I do not think that the rural areas have enough muscle to get a bank of the kind that Senator Pierson

Sentor HUMPHREY. Let us say we did have enough muscle, what would you say?

Mr. MURRAY. I think it would have to include the urban areas. I think you emphasized very effectively in your June 2 speech that one of our problems we have is rural urban competition. We have got to get rid of this. I agree with you.

But I sav if we had one

Senator HUMPHREY. I mean if it looked as if we could get such legislation what would be the view?

Mr. MURRAY. We would support it.

Senator HUMPHREY. You feel this kind of additional financing is required?

Mr. MURRAY. That is right. It is like good health, you cannot have too much of it.

Senator HUMPHREY. There is a difference between a bank operation and loans that are made year by year out of the appropriations made by the Congress of the United States. The bank operation would have funded capital, capital stock, and voting authority as compared to congressional appropriations just made on a fiscal year

basis.

Mr. MURRAY. Yes, I recognize this, and I also would point out that the legislation under which Farmers Home operates is much like a bank. It does not require appropriations from Congress.

It goes to the money markets which are located in the big cities. bringing that money out into rural areas. So in a sense the Farmers Home program for housing, for water and sewer, is a banking operation. Congress does not have to appropriate for it. The paper which Farmers Home gets from the borrower is sold on the market and the money is distributed in the rural areas. So you have this banking mechanism already established, and over the years it has proved very successful.

Senator HUMPHREY. We thank you very much, Mr. Murray, for your counsel and advice and particularly for the cooperation of the NRECA. Thank you.

Mr. MURRAY. Thank you very much.

Senator HUMPHREY. Our next witness is Mr. John S. Wilder, president of the National Association of Conservation Districts. Mr. Wilder, we welcome you.

STATEMENT OF JOHN S. WILDER, PRESIDENT, NATIONAL ASSOCIATION OF CONSERVATION DISTRICTS, SOMERVILLE, TENN.

Mr. WILDER. Mr. Chairman, members of the committee, it is a privilege for me to be here.

I am John S. Wilder. I am from Fayette County, Tenn. I am a soil conservation district supervisor from that county.

That particular county happens to be one of the low-income counties of the Nation and one which has been characterized as somewhat in social turmoil, tense city and so forth.

I am a member of the county court of that county. I am speaker of the Senate and Lieutenant Governor of Tennessee.

Senator HUMPHREY. You have quite an array of responsibilities there, Mr. Wilder. I wish you well.

Mr. WILDER. Thank you.

I am here today as president of the National Soil Conservation District.

My association certainly appreciates the opportunity to appear here. It is composed of some 3,021 legal entities of government in the 50 States, Puerto Rico, and the Virgin Islands. These legal entities of government are managed by some 18,000 soil conservation district supervisors as governmental officials.

I realize how precious the time of this committee is, so I will not go into a lot of detail about how awful rural America has become in a land of plenty.

The mechanization and industrialization of agriculture and the resulting migration of rural people to the cities is, of course, well documented. This migration has left the rural areas with diminished services of every kind.

There is evidence that the people of this Nation are ready to do something about this problem. Many no longer accept the idea that growth-in and of itself-is progress. The concentration of our population in a few mammoth metropolitan areas, and the congestion and pollution that results, are no longer considered inevitable. People are becoming convinced that the overall quality of life in this country, in both urban and rural areas, is decreasing.

The fundamental facts of this situation, of course, are the growth of population and its distribution. It is possible, no doubt, to calculate just how many people the resources of this Nation can support with a good standard of living. It can probably also be calculated at what density of population we can live in a manner that meets the expectations of our citizens.

We need a national growth policy that is founded on calculations of this kind. We also need a national land use policy that sets forth those areas best suited to agriculture, urban development, recreation, open space, timber production, public facilities, transportation, and industrial development; and the conditions under which such uses are considered acceptable. Growth policy and land policy are inseparable.

This country needs to take one further step. This is to take deliberate action, within the limits of the policies suggested above, to reduce further migration to the cities by encouraging the development of new centers of population in appropriate uncongested locations and upgrading the quality of life in what may always be expected to remain essentially rural areas.

In my testimony this afternoon, I would like to concentrate on this latter point; the improvement of life in rural areas.

The necessity of meeting urgent human needs in depressed rural communities has led us to funnel certain State and national resources into grants and programs for education, water and sewer systems, income supplements, public health, and other essential services. Obviously, such efforts to maintain and upgrade social services need to be continued and expanded. But just as obviously, it seems to me, we cannot continue-over the long run-to prop up rural areas and communities that have no vitality of their own.

Our association believes that if rural development is to succeed over the years ahead it must be based on the creation of employment through the wise utilization of the resources that exist in these areas. Jobs and income, and consequent tax revenues, are at the heart of sustained physical development and social services in rural areas. To continue forever to provide supplements to rural areas is to treat them as welfare cases.

Now can we concentrate on employment and resources development in these areas? First, we need to be sure that the rich don't get richer, and the poor poorer. We need to determine those areas most in need of assistance and focus on them, rather than simply allowing those areas most successful in creating employment to grow larger, leaving the poorer ones further behind.

Jobs are the reason people move out of rural areas to the cities. Indeed, they are the primary reason why anybody goes anywhere. Jobs in rural America can be created by upgrading agriculture, which is the fundamental business and job-generating activity in these areas; encouraging industrial development; stimulating tourism and recreation; and providing public employment.

There are three kinds of programs already under way in this Nation, and with which our conservation districts are intimately associated, which should be at the core of an expanded and more effective rural development process in the United States. They are upstream watershed projects, resource conservation and development projects, and river basin planning and development.

There are over 1,000 upstream watershed projects underway across America. They prevent floods which would otherwise damage crops, small towns, and businesses. They provide water for municipal use, recreation, and industries. They prevent erosion, increase farm income, and enhance natural beauty.

Construction of reservoirs and other structures in these programs has already provided 19.000 man-years of employment. Small local contractors handle much of this work. Their expenditures for gas and oil, concrete, seed and fertilizer, and other supplies have a significant impact in rural communities.

By 1970, 57.000 new jobs had been created through expansion of established industries in watershed projects and the arrival of new ones made possible by the flood protection and water supplies provided. Over five million visitor days of recreation have resulted, further improving local economies.

In addition to the 1.000 projects already sponsored by conservation districts and municipal governments, with assistance from USDA and State agencies, there are an additional 2,000 projects for which applications have been made. And there are another 6,000 projects that are potentially feasible under existing standards.

Resource Conservation and Development Projects are sponsored under the 1962 Food and Agriculture Act. The purpose of these projects, and there are 70 in operation, is to plan the use of soil, water, forest, recreational, and other natural resources for economic improvement on a multicounty basis. New ways to utilize and process agricultural products are developed. New crops with better markets are recommended and grown. Timber utilization industries are expanded. Water supplies are developed, and new industries attracted. Social and educational services are upgraded. Tourist and recreation opportunities are exploited. New parks and hunting and fishing areas are opened.

This is true rural development because it uses the unique resources available to the community on the basis of a comprehensive plan that is put to work, not laid on a shelf.

River basin planning, which integrates watershed projects, R.C. & D. projects, and other economic development work into a comprehensive whole, ties together such programs into a system that meets regional needs on a much larger scale. Such work needs further support, but we cannot emphasize it at the expense of the programs that meet day-to-day problems of people at the farm and local community level.

It may be more glamorous to set forth wholly new ideas for generating rural growth, but we are convinced that the concept of these programs is sound, and that their acceleration will be highly effective. Laws, funds, programs, and policies are of no use without leadership and social organization. The members of this committee are familiar with the network of conservation districts that exists throughout this Nation. These districts are no longer simply erosion control districts as they were in the late 1930's. And they no longer work exclusively with the Department of Agriculture in providing services to local landowners and communities.

Today's conservation districts are more representative of all the people in their communities, both rural and urban. They plan and