driven practically all night to get there and yet were ready to work a full day. I took them down to a clean-up job we were doing and they went to work. Along about the middle of the afternoon I came by them and said "Don't you want to quit a little earlier and get cleaned up?" They said, "No; we will work until sundown." And they did. They stayed overnight, worked the next day to sundown, had supper, and went home.

We cleaned up 271 homes in Stroudsburg alone, as well as a great many homes on the opposite side of the creek in East Stroudsburg. We furnished food for 120 homes, clothing to 1,200 individuals. We distributed 29 trailer loads of furniture, which was brought to us largely as a result of Kiwanis Club solicitations across the State of Pennsylvania. There were 407 families in all who received help from the work done at the church.

The housing problem is what we are struggling with now. About 3 weeks ago I went to the borough council and asked them to establish a housing authority so that we could do something with housing. They, of course, told us under Pennsylvania law it required the county. and they were not big enough, as a borough, to do it. The next day I went before the county commissioners and requested they do something about the housing. I gave them the facts of the situation. The result has been the establishment of a housing authority.

The housing situation is this. We had 93 homes destroyed in Stroudsburg and East Stroudsburg, according to the Red Cross count. We have a different evaluation. The borough authorities of the 2 borough report 107 destroyed. There are 225 homes on the Red Cross list that suffered major damage and 293 on the borough list. There is a difference of 58 there. The Red Cross said there were 322 homes that suffered minor damage, and our borough list has 244. But, when you get those figures all together, the totals come out only 4 apart, either 640 or 644. So that I think we have pretty accurate figures as to the exact damage done. We had before the flood 4,200 homes in the area, so that we have as a result 15 percent of our homes affected. I have served on the advisory committee of the Red Cross and have a most friendly relationship with the Red Cross, but they deal on the basis of need and not on the basis of loss. In other words, they come into a disaster area to administer to the minimum needs of the family, rather than to meet the loss that the family has suffered. The result is that a family that has some savings and had some losses must pay for their own. Those who have no savings and had some loss are given the same amount and perhaps even more, of course, as the family who has some savings of their own. In other words, they are taken care of. The Red Cross in Stroudsburg has had 963 cases in Monroe County. They have granted $931,896.18 on the basis of need; 336 homeowners have been assisted. Of the 640 dwellings which were affected, they will rebuild 39 out of the 93 that were destroyed. They will repair 297 out of the 547 damaged. They will take care of a total of 336 out of 640 destroyed or damaged homes. We have a good-sized group of homes which are not being taken care of by the Red Cross. There are 54 private homes which were destroyed, and there were 250 homes which were damaged, not being taken care of by the Red Cross,

Senator BUSH. That is because they did not establish a case of need, is that right?

Rev. STIMSON. Partly. There are 6 families who were refused aid who did apply, and there are 55 families who applied and then withdrew their application after discovering what the policy of the Red Cross was, and partly because they objected to the type of investigation which the Red Cross carries on. They did not feel as though they wanted to reveal all the facts about their private finances and internal affairs in the home as the Red Cross insists in the investigation.

We have had quite a bit of contention over that matter in Stroudsburg, and while I do not want to overdraw the picture, I think it is part of the total problem involved in the Red Cross helping people. The independent American spirit does not like to have someone come along and say "You must give us the facts about everything under the sun you own, all your investments and everything that you may have." A number of people have insisted to me they did not like the policy of the Red Cross in investigating as thoroughly as they did. I can understand why the Red Cross does it. Yet people object to being charity cases.

The caseworker of the Red Cross is like the caseworker of the family society. It is like a person was applying for charity. They investigate it as they would a charity case. For that reason, there is a spirit of resistance to the Red Cross situation. Hence, there are a number of families who did not apply to the Red Cross.

The Small Business Administration has made in Stroudsburg only 36 loans for home repairs. Some of these overlap the Red Cross cases, because the Red Cross would give them a grant which is not sufficient, and the Small Business Administration would give them a loan to make up the difference.

We have 270 homes, in other words, that according to our figures of destruction and damage, were without assistance, even if you add the 36 aided by the SBA to the ones that the Red Cross has helped.

Senator LEHMAN. What was the amount that the Red Cross expended?

Reverend STIMSON. The rebuilding grant on the 39 homes has averaged $7,000 apiece. That is a total of $273,000 for 39 homes. They have gone up as high as $11,000 on some of them. For instance, there was a woman who had a $15,000 home who is getting a $7,000 home because her family is just 3, and they gave them a 2-bedroom house. They had a four-bedroom house before. This one is not comparable at all, but it satisfies the need of the family. However, she is very much disturbed about that, naturally, and she felt as though the Red Cross should replace what she had. But the Red Cross does not replace. It simply tries to fill in the minimum need of the family.

That is true about furniture also. The furniture replacement has been on the minimum for the need of the family. For instance, say a family has a dining room. They give them a kitchen set with four chairs, which is not a dining room set or at all comparable. They will give them chairs for a living room on the basis of the number of members of the family, and if they have visitors they must get some camp stools or borrow something from the neighbors.

Fortunately, that is the one place where I think the church has supplied more help than anything else, in its filling in around the Red Cross grants of furniture. As the figures work out, we have 297 homes

repaired by the Red Cross at an average of about $800 apiece, making $237,600. The Red Cross has spent on property, in other words, about $500,600. The private repair, if you estimate it on the same basis as the Red Cross estimate, would mean that we had 60 homes destroyed, at $7,000 apiece, and that would be $420,000, and 250 homes, which if they averaged $800 apiece would be another $200,000. So that you would have just as much not covered. And you would have furniture losses for the same homes of about $541,000 besides.

The total losses, as I estimated from these figures gained from the Red Cross, and statements on what has not been met by the Red Cross, is $1,661,800.

This is a minimum picture of the situation in Monroe County.

We, of course, must supply some of the homes for people who did not own their homes. Some of these homes which were not repaired are rental property. The Red Cross does not repair rental property. Anybody who owned rental property had no protection against the flood.

I feel as though flood insurance on a Federal basis is necessary, because it is the one place where there is no possibility of buying insurance for real property. There is some available, I think, for furniture, in some cases, but not in general.

The average homeowner has no protection against flood.

Our area is not an area which is normally flooded. This is the only flood of that size that has ever happened in recorded history. It was a flash flood caused by 13 inches of rain in 4 hours. It had stopped raining in Stroudsburg before the flood arrived around us. The hurricane had pulled the water up in the mountains, and it all streamed down through, and the debris on Broadhead Creek piled up in back of a railroad bridge and created an artificial dam, and that artificial dam after a while gave way, and that brought a 30-foot wall of water down into Stroudsburg with a loss of 86 lives.

Senator BUSH. Do you know how much the artificial dam raised the height of the water at that point?

Reverend STIMSON. There was a backup of debris on the sides of the hill, running back 5 miles, of water laying behind that railroad bridge that let loose.

Senator BUSH. So that piling up of debris against the bridge actually raised the height of that flood by 30 feet.

Reverend STIMSON. That is right. We had 22 feet of water that laid in Stroudsburg long enough to put a mark on the walls of the houses. I could take you there and show you where the waterline was. Senator BUSH. Did anybody claim that the bridge was poorly designed for the river at that point?

Reverend STIMSON. I think not.

Senator BUSH. Or that the abutments were coming out into the river too far, or providing an obstruction in the riverbed?

Reverend STIMSON. I do not think anybody has ever raised that question. Of course, there were other obstructions along the way. too. There were some highway bridges that gave way. We lost 27 bridges in Monroe County in this flood. Every major highway was cut off. We had to go over the mountain by a county road in order to get in and out of Stroudsburg.

Senator BUSH. The Army engineers, of course, have been in there with you.

Reverend STIMSON. Yes. The flood-control program is not actually underway yet.

Senator BUSH. They have been in there doing emergency cleanup work.

Reverend STIMSON. Yes.

Senator BUSH. Did they make any comments about obstructions in the riverbed that added to the disaster?

Reverend STIMSON. No; I heard no such comment. They believe that the people responsible for the flood control should get on the job right away, because they said there was a threat of further floods. We had had that situation, as we have had a couple of heavy rains, that people from the flood area, some of whom have gone back to their homes now, have come out of the area to stay overnight with somebody else. Several came to the church and stayed overnight. We do not maintain a shelter all the time, but we have conducted some overnight.

Senator BUSH. How have you conducted services?

Reverend STIMSON. The church sanctuary was the one place in the building not touched, except as we opened it every day for a place of prayer. We conducted services right through, and had a Sunday school in the church sanctuary, a general assembly, but not individual classes.

My feeling is that the common man needs very much the protection of the Federal flood insurance, and at a rate which is possible for him to obtain it, not such that it is beyond his reach. The man who pays from $40 to $50 a month needs it just as much as the fellow who owns his own home.

Senator LEHMAN. Any questions?

Senator BUSH. No; I have no questions. I think that is a very interesting story, and not an entirely unfamiliar one. But I am glad to get a picture of the way this thing struck in Pennsylvania. We were reading about you and realized you were right in the thick of the Pennsylvania flood. I certainly want to congratulate you on the way you and your church have stepped into this picture. Reverend STIMSON. My community, sir.

Senator BUSH. Your community, too.

Reverend STIMSON. The Presbyterian Church went along with us on the program. They are in the same block with us. They did not get into it quite as quickly or quite as deeply, but they were right with us.

Senator Bush. I think that is a very moving and fine story.

Reverend STIMSON. You are from Connecticut, sir-and I am a Wesleyan man and also Harvard Theological Seminary.

Senator BUSH. No wonder you did so well.

Senator LEHMAN. I want to thank you, too, doctor, for a most interesting recital. I was interested in everything that you said. I was particularly interested in that part of your report which explained the policies of the Red Cross in relation to the rebuilding and rehabilitation of these homes. I did not realize to what an extent

they handled this as a purely need proposition.

Reverend STIMSON. That is right. That is their policy.

Senator LEHMAN. I think that was very valuable. I do not know whether you have anything, Mr. Monatt. Do you want to testify?

STATEMENT OF SAMUEL M. MONATT, STROUDSBURG, PA.

Mr. MONATT. My name is Samuel M. Monatt. I am a certified public accountant and a writer on income taxes. On August 31, 1955, wrote to the Honorable Francis E. Walter, House of Representatives, who is our Congressman of our district:

The

The recent flood in our county, as you know, raised tremendous havoc with many of our neighbors and has affected every resident in this county. Now that the dust has cleared and we are able to survey our damage and also count our blessings, I find that the businessman is the forgotten man in this situation. If my information from the Small Business Administration and from the Red Cross is correct, they have very little aid for him. The Red Cross advises that it will only help the one-man business and then only in a negligible way. Small Business Administration advises that while they can stretch the security requirement of a loan by taking whatever security is available, they have no authority to help those who do not possess earning power. For example, one of our clients suffered a $25,000 flood loss, and while his business shows earnings before depreciation, it shows a loss after depreciation. Consequently, he is not in a position to receive any aid from the Small Business Administration due to this lack of earning power. The result is that this man is either forced out of business or must borrow additional moneys from sources other than the Government.

I wish to call to your attention as forcefully as possible that the employee is entitled to unemployment insurance during the period of unemployment. The farmer has crop insurance through the agricultural program. The homeowner could have had flood insurance on his contents, not his building, if he had purchased homeowner coverage C. Larger businesses have the financial capacity to borrow. Where does the small-business man fit in? He is, as you know, the backbone of this Nation, since he is the largest employer.

Personally, I believe that the disaster damage is not a matter for the Red Cross, where one must be completely wiped out in order to receive aid, but it is a matter for the United States Government, who has been a partner in a man's business by collecting taxes, to rehabilitate the businessman in a manner befitting an American citizen. He should not be required to hold out his hands for funds which have been solicited in the form of begging from the American public.

I sincerely believe that the United States Government, with billions of dollars for foreign aid, should have sufficient provision for a disaster of this kind. We have all kinds of security, social or otherwise, but none for the businessman. The only aid the small-business man has is a possible tax refund, and even here the door is almost closed. Please note that the flood occurred on August 18. 1955, and any refund due to flood losses cannot be claimed until the due date of the return, which is March 15, 1956, or April 15, 1956, depending on the form of business. And then the Commissioner has a right to wait 90 days before making a refund. On larger amounts he will, in all likelihood, based on my assumption of past experience, conduct a tax examination before refund. This means that in all instances there will be either additional taxes or a diminution of refund. as well as additional delays until the revenue agent's report can be processed through regular channels.

I wish, by the way of suggestion, to call to your attention our needs. First. outright Government grant for business directly affected by the flood. Second, a national insurance program similar to the War Damage Corporation, where the entire country voluntarily insures their propety against flood damage, so in the event of disaster anywhere in the United States, a man need not go out of business through an act of God nor does he need to stand in line for a charitable handout. We are Americans and we want the Government to honor the businessman's desire to emerge from this disaster situation with dignity.

I had a response from the honorable Congressman which states: Re your letter, one of the reasons I am in Washington now is to insist that those in flood-stricken areas be given at least as much consideration by the Government as is given to foreign countries. Suggest all small-business men in need of aid file application with Small Business Administration, advising the facts in each particular case and when formal application submitted.

FRANCIS E. WALTER.