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Mr. CRYSTAL. I believe it would be, sir. It is my opinion. Otherwise I don't think I would have said it.

Senator Bush. I did not mean that you would say anything that you did not think would be generally helpful. But I do not believe you have thought all the way down to the riverbed, so to speak, on this.

You are a pretty big insurance man, according to my advice about you, and a very good one.

Mr. CRYSTAL. Thank you, sir, I appreciate the compliment.

Senator Bush. But I do not believe you have many customers who are in the category of our stricken families.

Mr. CRYSTAL. Our office insures 30,000 one-family houses in the State of New York, and I am fully aware of the problems and difficulties they have. That is one of the reasons that prompted me to write the statement. Many of them in New York State here have suffered losses which they cannot recover. Many of them have gone to their savings banks and loan institutions and borrowed on openend mortgages to replace the damage they could not collect on their present insurance.

Senator Bush. Mr. Chairman, I will not pursue this, but I want to congratulate Mr. Crystal on coming up here. He was in touch with me a couple of years ago in connection with disaster insurance. I know his whole purpose is to try to be helpful to this committee. I think we are very grateful to him.

Senator Ives. I want to thank Mr. Crystal for coming here. I think he has contributed very substantially to our hearings.

Mr. EDELSTEIN. Mr. McKenna of our staff would like to describe the help Mr. Crystal has been to the staff.

Mr. McKENNA. Mr. Crystal has not only contacted the Senators involved, but he has worked very closely with the staff and expressed a sincere interest in this problem, including the days we were holding hearings on the war damage.

Senator LEHMAN. I have been tremendously interested in the testimony of Mr. Crystal. However, I do not agree with him with regard to the coverage of personal property. I think personal property should be covered by insurance, at least to some degree.

Mr. CRYSTAL. That is left to the wisdom of the legislators who know more than I do.

Senator LEHMAN. I want to point out that that was a very debatable point in the testimony of a number of witnesses who appeared before us in Washington. Some of them felt that it should not be covered, and others felt that it was essential.

Senator Ives. It is very difficult to draw the line.

Senator LEUMAN. But I want to thank you very heartily and tell you how helpful you have been to the committee.

Our next witness is Congressman Frank Thompson, Jr., of the Fourth District of New Jersey. We are very glad to have you here.



Mr. THOMPSON. Thank you, sir.

sir. I am sorry I do not have a mimeographed copy of my statement.

I would like to thank you for the opportunity of appearing today on behalf of a comprehensive program of Federal disaster insurance. Many people in the United States have been aware of the necessity for such a program for a considerable period of time. But the major foods in the Northeastern part of the United States during August served to emphasize the fact that the need is now urgent, and that something should be done immediately.

I, like you, Mr. Chairman, issued a statement calling on the Congress to undertake a study to discover the best way that such a need could be met, and I promised my constituents that I would introduce legislation to accomplish this as soon as the Congress meets in January. The response to the statement was immediate and very favorable from all of the districts affected. Letters have come to my office almost daily since that time, urging me to do whatever was necessary to secure such legislation. Constituents have stopped me on the street to tell me what an excellent idea they feel the legislation would be, and newspaper comment has been overwhelmingly favorable.

As a matter of fact, I would like to quote briefly from an editorial which appeared in the Trentonian, one of the major papers within my congressional district, on last Tuesday. The editorial said in part":

Hurricane Diane and the August floods caused damage estimated at $27,325,000, destroyed 93 homes, and resulted in 10 major injuries in New Jersey. In Pennsylvania, including the hard-hit Yardley area, the total damage is estimated at $70,206,000, with 88 deaths, 96 major injuries, and an unaccounted number of homes destroyed. All told, in the northeastern portion of the Nation, 179 persons lost their lives, 6,992 were seriously injured, and at least 813 homes were destroyed. The total damages of $457,000,000 were caused. These are figures listed in a final summary by the Department of Commerce.

Senator LEHMAN. May I interrupt you? I want to point out that there is a great deal of difference of opinion as to the accuracy of these figures. Many people have testified and reported that the damage was far greater than the $157 million. But under any circumstances, this figure of $457 million does not include the damage done in North and South Carolina, which had very disastrous floods, nor does it include the damage done by the rains of 2 weeks ago.

Mr. THOMPSON. That is correct, Senator. And I might add that the farmers in my district have an incalculable loss. As you know, we had had a drought, and then we had 14 inches of rain. My district includes the most productive tomato-growing land, I think, in the world. That crop was completely lost because of the 14 inches of rain that they had.

To continue with this quote:

They tell a grisly tale of death and destruction visited upon an unsuspecting, unwarned, and unprepared populace. Some victims will never recover from the staggering financial blow dealt them in this disastrous 3-day period. As was quickly established, virtually all homeowners were without flood insurance. Some sort of insurance should certainly be made available against disasters such as struck New Jersey, New York, Connecticut, and Pennsylvania, and other Northeastern States in August. Let's hope that out of the hearings will come a sound program of protection. It is too late to mitigate the August catastrophe, but apparently the Northeast can expect more hurricanes and more floods in future years, so it would be wise to prepare for them as best we can.

This committee is now considering how best to implement a program of disaster insurance for the benefit of all of the people of the Nation. You have before you for consideration a tentative bill which Senator

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Lehman and I intend to introduce in January, with whatever changes seem desirable as these hearings are completed. I know that the bill is not perfect as it stands, but it does serve to indicate fairly well the scope of the problem and the general methods which we would like to see followed in attempting to solve that problem.

The Eisenhower administration has indicated that they support the general principle of flood insurance, but on a more modest scale than I consider would be enough.

I hope that the hearings will serve to indicate just how widespread the need is.

One of the very real needs that this bill would help to meet is the necessity for centralized control in time of emergency. Many of my friends in the Fourth Congressional District have indicated that their experiences in the recent floods showed only too clearly that some such control was vitally necessary during emergencies so there would be less duplication of effort and more speed in handling situations as they arise. During any kind of emergency, speed saves lives as well as property. And consequently, anything which serves to increase the speed of aid is of the utmost importance.

News stories concerning this legislation have stressed the fact that the bill as it was made public will be of great benefit to those who have suffered because of floods. Now, it is true that the introduction of the legislation was triggered by the August floods. But I think that it should be stressed that the legislation as written will be of benefit not only to those suffering flood damages, but to all other types of natural and man-made disasters, where people are no already protected by private insurance.

As the bill itself says:

As used in this title, the term "natural disaster" shall mean any flood, tidal wave, hurricane, tornado, blizzard, duststorm, hailstorm, or other severe storm, earthquake, explosion, landslide, snowslide, severe freeze, drought, smog, radioactive contamination or other air pollution or volcanic eruption.

The bill would also cover losses incurred as war damages or as a result of the perils of war.

It should be clear from the foregoing that the bill will not serve to benefit only those who happen to live along rivers and streams, but in addition includes the disasters that the whole country is subject to.

The Government already undertakes to provide relief in disaster areas for the protection of inhabitants against immediate peril. The services rendered by the various branches of the Armed Forces and the relief of distress by the American Red Cross are still vivid in the minds of most of us here today. But this relief is at very best of a short-term character and does not help to rebuild badly stricken areas. It is true that a certain measure of aid is granted by the Red Cross to those whose need is greatest, and that this help is greatly appreciated. It is beyond the limited capabilities of this fine organization, however, to provide the aid needed to rebuild whole communities.

It is also true that the Small Business Administration provides loans to individuals and businesses under certain circumstances. But as many of us are finding out at the present time, this aid is hedged about with a great deal of redtape, and even then is ligely to be so limited as to be of only small value.

It is perfectly clear that providing insurance against losses such as those suffered by the Northeastern States is beyond the abilities of the private insurance companies. It is possible for them to provide such insurance, but the premiums would be well beyond the means of any but the wealthiest of individuals. It thus seems clear that it is up to the Federal Government to do something about this particular problem. Nor is such a task without precedent.

As the New York Times said yesterday: The Federal crop-insurance program may well provide a useful precedent. It protects farmers in nearly one-third of the Nation's agricultural counties against losses on many kinds of crops from weather, isects, and disease. After several years of experience, premiums have not proved sufficient to cover actual losses.

To sum up

Senator Bush. Mr. Chairman, may I ask a question in point there. Are you in on this experimental crop-insurance program down in New Jersey ?

Mr. THOMPSON. No, sir; not in my district.

To sum up, it seems to me that the floods prove conclusively, if such proof is still needed, that there is need for some type of insurance protection against natural and man-made disasters.

Secondly, the magnitude of the task is clearly beyond any agency other than the Federal Government.

And finally, the Federal Government has both the experience and the personnel to make such a program a successful one.

I do not want to claim that the bill under consideration is a perfect one. On this, I am sure you will agree, Mr. Chairman. That is why the hearings were called. I do want to insist, however, that something of this nature must be undertaken, and it must be done now, not after years of study.

Finally, I would like to insist that the legislation, when it is put into its final form, be sufficiently broad in in character to be effective to meet all the demands upon it. Anything short of that would be folly.

It has been said by the Senators in discussing Governor Harriman's testimony that the insurance is only part of the program. My congressional district fortunately was not completely devastated, not nearly so much as areas of Massachusetts and Connecticut. But I live on the Delaware River, as do all of my constituents. And that great stream must be harnessed for the future. We have the greatest, fastest growing industrial area in the world in the Delaware Valley. The only way that our economic well-being can be secure, since our industries are almost all located on the river, will be to control the river from the New York State origin all the way down, by a flood-control project, and to deepen the river to make commerce more available to the area.

Thank you very much. Senator LEHMAN. Thank you very much. Senator Ives. Senator Ives. I do not have very many questions to ask. I would like to ask the Congressman what action is already being taken by the House of Representatives in this type of legislation.

Mr. THOMPSON. A number of Members are preparing legislation. I have been working with Senator Lehman's staff since immediately after the flood, and many Members from Pennsylvania, from Connecticut, from Massachusetts, have contacted me for copies of it and will introduce it on the first day of the session.

Senator Ives. The same bill as yours?
Mr. THOMPSON. Yes, sir.
Senator Ives. To what committee in the House will it be referred !
Mr. THOMPSON. I would hope to the Public Works Committee.

Senator Ives. This is the Banking and Currency Committee here. I wonder if it would not go to the same committee there.

Mr. THOMPSON. I would think so. I am in error. The Parliamentarian has not yet answered my inquiry on that.

Senator Ives. The reason I asked the question is because sometimes the House refers bills to committees that do not seem to be appropriate in the Senate.

Mr. THOMPSON. I am aware of that. And I think since the Senate Banking and Currency Committee is having the hearings, that even if it is necessary to change some language, so that the Parliamentarian will be able to send it to the proper committee in the House, we will do that.

Senator Ives. Could you do anything to get him to do that? It would help expedite the legislation a great deal if it went to the House Banking and Currency Committee.

Mr. THOMPSON. I think I can.

Senator LEHMAN. Just for the record, I want to draw your attention to the fact that the bill introduced in the House in the 82d Congress was referred to the Committee on Banking and Currency.

Senator Ives. Then this undoubtedly will be, too.

Senator Bush. I just have one question. You spoke of the various types of hazard covered by the Senator's bill which you have sponsored. It is also in a bill which was drafted at my request, but I do not know whether I will introduce that yet or not. But the thing that has brought this to a head in recent years has been the big floods in Kansas in 1951, the hurricanes of 1954, and the inland flooding resulting from the hurricanes and otherwise in 1955.

One thing gives me some concern, and I wonder if you have thought about it. What we are worried about right now is flood insurance, and if we get this bill to cover every other kind of a disaster, I am just wondering whether it would not be somewhat of a handicap to getting flood insurance. I wonder whether the Congressman has thought about that.

Mr. THOMPSON. I have thought about it, Senator. I have thought about it, I am sure, in the same terms that occurred to you originallythat the immediate need would be flood insurance. However, we have a practical situation to face. The State of North Carolina and the Northeastern States were affected. I have been in North Carolina since the floods, in Congressman Barden's area, New Bern, which was very badly hit. No doubt this will have great appeal to Congressman Barden. But I think at the same time if we are going to institute an activity of this type, that it should have some appeal to other areas of the Nation where they are faced with different problems, such is drought, for instance, and so on.

I remember very clearly in the closing days of the last session a huge appropriations bill, a special bill for relief of those affected in the Texas City disaster was passed. There was a rather nebulous legal question–Did the United States Government have any responsibility in tort for that? Well, you cannot sue the Government. But

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