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of people whose heaviest losses were of household furniture and personal property. His thinking is confined by the limitations and practices of private insurance in a field in which private insurance experts themselves concede they cannot operate successfully.

Instead of real protection for the public, he offers merely a laboratory experiment, in the pious hope that perhaps sometime in the remote future a real program can be worked out. And that would be fatal. If this is the best the national administration has to offer, I am bitterly disappointed. This is certainly not what I was led to expect by President Eisenhower at our meeting in Hartford and in the correspondence I have had with the President of the United States as chairman of the New England Governors' Conference.

The same weaknesses appear in most preliminary drafts of proposed bills, which set the limits of total insurance coverage from as low as $500 million in the first year up to $2 billion. To limit the total insurance written to any such sum would defeat the purposes of the program,

The highest limit of coverage presently set by the various tentative proposals is $2 billion. This is less than the total value of real and tangible property in Rhode Island alone. Yet the program purports to be one designed to embrace the entire Nation. Such an arbitrarily small limit of coverage would mean one of two things. Either coverage would be limited to the worst risks or coverage would be spread so thin across the Nation that no area would be given more than token protection.

The fact that a general program of disaster or flood insurance is new does not justify such extreme caution. Comprehensive disaster or flood insurance is certainly new, and it must consequently be experimental, but only in the sense that we must allow for flexibility in its initial organization and administration, and we must be prepared to review the program frequently in the early years, in the light of experience.

We have an excellent example of a successful, and even larger, federally-sponsored insurance program which was designed to provide broad coverage and protection from its inception-unemployment insurance. As was true of unemployment insurance in the middle 1930's, the need for disaster insurance is real and immediate. We cannot afford to wait until an ideal program is developed. We need protection against disaster and flood now. And the program to provide that protection must be big enough and comprehensive enough to do the job.

Rhode Island and I am sure New England governors join with me in making that request of the Congress and the administration through this committee. I am certain that they enjoy the same sense of appreciation and gratitude to you as chairman, to the members of the committee, and to all those who have cooperated in this type of need in the New England area.

As Governor of Rhode Island, Senator, I am very happy that you have been with us this morning and express to you the thanks of the people of Rhode Island for your kindness in coming to our State.

Senator LEHMAN. Thank you very much indeed, Governor Roberts. I think your report has been most valuable, most informative, and I can assure you that the committee, and I know the Congress, will

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give very careful thought and consideration to what you have said and what the New England Conference of Governors has said or will say on this matter.

Governor ROBERTS. Thank you.

Senator LEHMAN. I do want to say one word. Both you and I and others have been very critical of the delay in receiving cooperation and assistance in this matter from the Federal administration. want to express my regret that Senator Bush, of Connecticut, who is a member of this committee, is not here to speak up in defense of the administration. He has been prevented from being here. He has presented what he believes to be a defense of the administration in the past. He pointed out that this is a very complex and difficult subject, and, of course, we recognize that it is just that. But that seems to me to be all the more reason to have the administration's proposal before us without delay.

I am going to hold the record open, however, to receive Senator Bush's comments on your testimony and on my comments just to be completely thir to him in this matter.

Governor ROBERTS. It was my thinking, Senator, if I may take another moment, and concurred in by the New England governors, that we request the President to direct the Secretary of Commerce to use the resources of his agency to make the studies necessary for a recommendation to Congress of an administration bill for disaster insurance, and we did that, feeling that the Secretary of Commerce by reason of the responsibility vested in his Department and in the Secretary of Commerce under the law and the concept of that agency, would have a greater appreciation of the need of insurance in this area because of the fact that his responsibility is in industry and in business, and so forth.

We had the concern in mind of turning it over to Mr. Jones. I don't know whether that was the particular individual at that time, but to that agency. I think it is Housing and Home Finance. That was getting into the area of insurance, and we have got to face up to the fact that disaster insurance, if it was an insurable risk, would be written by private companies. Private companies cannot do it because of the nature of the losses and so forth, and, therefore, it requires immediate action, and it requires a subsidy in my opinion from the Federal Government to meet a need to meet a need that is of vital interest to the Federal Government, because repeated losses of this kind will destroy the economy of an area, will destroy eventually the economy of the Nation, and we cannot afford to have our economy either nationally or regionally weakened in any respect whatsoever.

The Federal Government has a responsibility for that, to the State governments, the local governments, industry, the people of the United States. That is the reason we directed our resolution to the Secretary of Commerce rather than to the agency that is now dealing with it because we felt they would have a better grasp of the need, a better feel of the situation.

Senator LEHMAN. Well, I think obviously there is a very little difference between your comments and my remarks.

Governor ROBERTS. That is right.

Senator LEHMAN. But I am going to hold the record open so as to be entirely fair. I believe your comments and my remarks were timely, necessary, and appropriate.

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Governor ROBERTS. Thank you.
Senator LEHMAX. I want to be entirely fair in the matter.
Governor ROBERTS. Thank you.
Senator LEHMAN. Thank you again, Governor Roberts.

Governor Roberts, it has been suggested—I believe the suggestion has come from the Hoover Commission task force—that State and local governments should assume responsibility for flood control. I think I can speak for New York because of my long experience there, but I want to ask you as Governor of your State could the State of Rhode Island protect its citizens and property against flood!

Governor ROBERTS. To answer your question, Senator, neither the State of Rhode Island nor any other State in the Union can protect itself against flood because the watersheds where the floods originate when these waters start to accumulate are regional.

Here in Rhode Island we are visited by floods that originate in the upper part of New England and accumulate velocity and volume and so forth and wreck the area that they visit here in Rhode Island.

I think that a suggestion that a State can handle flood control projects is not practical. It indicates that they have not given thought to lines of responsibility.

The State of Rhode Island cannot affect a watershed lying in Massachusetts or Vermont. The Federal Government is the only agency that can do it. The Federal Government in its flood-control programs has been trying to do it.

It is the experience here in New England, and it will be agreed by all, that if some of the New England States had cooperated with the Federal Government and given authorizations, if some of the comimunities had been cooperative in giving authorizations in the past, many of the projects that were necessary to protect the New England area against Hood damage would have been completed and we would have some degree of protection, more so then we have now.

The reluctance on the part of many of the communities and many of the States has been because they have had an opposition to the multipurpose dam. They are always fearful of public power. One of the things that Rhode Island needs or that the New England area needs, whether it be public or private, is cheap power so we can utilize the resources of our people here in the New England area.

But that has been a basic reason for refusal to approve or to authorize certain projects in the upper part of New England that have afl'ected Rhode Island.

I doubt that any State would have the ability to finance a complete protection project for flood control. It goes beyond State borders. İt is extremely expensive. It can best be done by one agency, and that agency is the Corps of Army Engineers of the Federal Government, who are doing a good job if they could get the cooperation of finances to do it.

I think the Hoover Commission in making that report indicates that they have not had the real information that is necessary in the fieldl. It is an opinion that perhops looks well on paper but as a practical matter is an impossibility.

Senator LEHMAN. This was a report, a report of the Hoover Commission task force, which, however, became a public document and was submitted to the Members of both Houses. I am convinced, Gov

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ernor, and I said so yesterday and on previous occasions as strongly and as vigorously as I could, that if we once adopted the theory that the States would have the responsibility of carrying on flood control, flood-control work would very nearly cease entirely.

Governor ROBERTS. I agree with you, Senator. There would be no flood control whatsoever.

Senator LEHMAN. There is just one other question I would like to ask you.

You referred to the fact that this disaster insurance should be experimental. By that I understood you to mean that it should not be experimental as to time but should be flexible and subject to change as conditions justify.

Governor ROBERTS. The idea that I tried to convey is this, Senator: That it should not be experimental in the sense that we are going to have a pilot or a miniature or a laboratory experiment, that the only essence of experiment that you want in this is after it is in full operation and after it is comprehensive and adequate enough to meet the entire need throughout the Nation that if you want to review it after 4 years and see if better procedures of administration could be brought out or if some details of financing could be brought about, that's it. But I gather from the testimony of Mr. Jones before your committee that he is thinking of approaching this problem in a timid attitude with a sense of inadequacy and lack of security. He wants to just sort of approach it on a miniature basis, a basis that is not comprehensive, not real enough to meet a need. I feel that he does not appreciate the need and he hasn't the concept of the tremendous damage and the tragedy that results from these natural disasters, whether it be New England or the Missouri Valley or the Columbia Valley or whatever it is.

It affects our people, it affects our economy, it affects the well-being of the Nation, and Mr. Jones should be devoting all his resources to following out the charge of the President of the United States to bring to the Congress of the United States something that is real and something that is adequate to meet a need that is confronting the people of the United States and the New England region particularly at this time. Not next year or 2 years from now,

but now. Senator LEHMAN. Well, I think your analysis is exactly the impression I got of Mr. Jones' testimony.

Senator GREEN. Senator, may I comment? I made reference in my brief remarks to the message of the President of the United States in May 1952. I wonder whether that is a part of your record ?

Senator LEHMAN. I do not believe it is, Senator.

Senator GKEEN. Well, I was reminded by what we have heard in the most interesting statements that have already been presented to this committee that this is just a repetition of what we have been through 3 or 4 years ago resulting from the great floods in Kansas, Missouri, and Oklahoma in 1951, and it seems to me that the message of President Truman about that time is quite appropriate now.

He began in this message:

Last summer, following the great floods in Kansas, Missouri, and Oklahoma, I recommended that the Congress establish a national system of flood-disaster insurance. As I said then, the lack of such an insurance system is a major gap in the means by which a man can make his home, his farm, or his business secure against financial loss.

He goes on in an eloquent message and encloses a proposed draft bill.

It seems to me that we might well make that message a part of the record of this meeting.

Senator LEHMAN. We would very much like to place that in the record. It is not in the record now. Our staff has been making a study of this thing for some months, but it is not in the official record of the committee.

It will be placed in the record.



Last summer, following the great floods in Kansas, Missouri, and Oklahoma, I recommended that the Congress establish a national system of flood-disaster insurance. As I said then, the lack of such an insurance system is a major gap in the means by which a man can make his home, his farm, or his business secure against financial loss.

In order to be of help to the Congress in its further consideration of this matter, I have had draft legislation prepared embodying the views of the executive agencies concerned as to the best way to set up a sound and workable flood-insurance system. A copy of this draft legislation is attached to this message, and the agencies that prepared it, particularly the Reconstruction Finance Corporation, stand ready to give the Congress any further help they can.

The reasons for enacting such legislation are very clear. At present, insurance against flood damage is virtually unobtainable from private insurance companies, nor does it seem likely that the private companies, by themselves, will find it possible to write flood insurance at reasonable rates. The need for such insurance, however, is urgent. Homeowners, farmers, and businessmen may have their assets and their savings of years wiped out in a few hours if a disastrous flood strikes their property. We have seen it happen year after year.

To meet this situation, we can and should make available to those in potential flood areas the opportunity to protect themselves against the financial losses which such foods bring. I am sure that the great majority of the people concerned want to provide in advance out of their own resources for protection of their property against floods—just as they do now against fire and other hazards.

A Federal system of flood insurance is the logical answer. It would enable individual property owners to pool their risks and to meet a large part of their losses out of their common funds rather than forcing them to rely upon emergency relief, as is too often the case now. It would provide funds needed to restore property damage in floods, without requiring people to borrow heavily against their future incomes.

Insurance is especially important under present circumstances when our systemp of protection against floods is so incomplete. Flood insurance, however, has more than short-run significance. It is also necessary as part of our long-run attack on the flood problem. Dealing with floods at their source, by doing the necessary work on the land and in the stream beds to catch and hold foodwaters, will always be our major weapon for preventing flood damage. Limits also need to be placed on the use of the flood plains, through State and local zoning laws, wherever the cost of complete protection from floods would be prohibitive. But flood insurance will always be necessary to protect people against the financial losses which may be caused by unexpected and catastrophic floods which it is impossible to prevent.

The attached draft legislation would authorize the Reconstruction Finance Corporation to provide either insurance or reinsurance against losses resulting from floods. If private insurance companies wish to do so, under this bill they could write insurance against floods and could then reinsure themselves against excessive loss by paying appropriate premiums to the Reconstruction Finance Corporation. Or, alternatively, the Corporation would be authorized to issue insurance policies directly. The Corporation, of course, should not compete with private insurance companies. The draft bill would prohibit the issuance of Federal policies in cases where private insurance is available at reasonable rates. In addition, it would require the Corporation to work through private insurance companies in administering the program.

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