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wait some time for actual construction of dikes, dams, reservoirs, and dredging, and if our plants must remain vacant because prospects are unwilling to risk machinery and inventory losses, the city will suffer property-valuation depreciation and serious payroll losses.

We respectfully call the attention of the committee to the fact that the immediate availability of flood insurance will very greatly assist the foundation not only to induce industries to come to Woonsocket but also to help those we already have.

After the flood of August 19, our sales approach was that it was a very rare and unusual happening and that flood controls would surely come before a recurrence. Within 2 months, however, we suffered a second serious flood threat and industries in factories along Fairmount Street and Singleton Street again had to spend wasteful time and money removing goods to upper floors. Now we have no sales appeal that can overcome flood scars to buildings.

In a city with a work force of approximately 24,000 people, nearly 5,000 are unemployed or subject to seasonal layoff. During the 18month period the foundation has been operating, it has sold or leased 7 buildings to diversified industries and can account for 750 jobs. The State development lending agency, a private finance group, thinks the program of sufficient merit to construct a new building on foundation land at an approximate cost of $300,000 even though we have no known tenant or purchaser at this time.

The people of Woonsocket are willing to go to the limit with this program of self-help. But to overcome the losses caused by repeated Hoods we need Federal assistance. We are not qualified to recommend the details of a flood-insurance policy. There are, however, certain fundamental matters before this committee and we can state our position with regard to these:

1. If private insurance companies cannot underwrite a policy that provides practical and adequate coverage, the Federal Government should at least provide the supplementary coverage to fill the gaps. This might take the form of reinsurance.

2. The protection provided should not prescribe an arbitrary limitation on the amount for which a property may be insured except for an insurance-to-value factor.

3. Personal property should be included in the coverage.

I leave to the discretion of the committee whether or not this operation is deserving of immediate Federal assistance on a flood-insurance program.

Senator LEHMAN. Thank you very much, indeed.

Let me ask you this: You say that the State development lending agency thinks the program of sufficient merit to construct a new building on foundation land at an approximate cost of $300,000 even though you have no tenant at this time. Is that a State expenditure?

Mr. FARRELL. No; that is private enterprise.
Senator LEHMAN. Private enterprise?
Mr. FARRELL. Yes, Senator.
Senator LEHMAN. Thank you very much.
Is Mr. Barrett in the room?

Mr. FINKELSTEIN. Mr. Barrett is not here, but I represent the committee. My name is Robert Finkelstein, and I am a member of the flood-control committee and am prepared to make our presentation since Mr. Barrett has not arrived yet.

Senator LEHMAN. Then we will wait for a little while on that because I want to ask General Fleming to testify.

There is just one question I want to ask you, Mayor. Would your community in your opinion be in a position to purchase insurance against floods on a community basis for its citizens ?

Mayor COLEMAN. The city of Woonsocket? The local government?
Senator LEUMAN. Yes.
Mayor COLEMAN. I am certain that we would not.
Senator LEHMAN. Certainly would?
Mayor COLEMAN. I am certain we could not.

Senator LEHMAN. Could not? Would that be because of State or local law?

Mayor COLEMAN. I am not thinking of the law, Senator. Well, maybe before I give you an answer I had better make certain I understand the question. Are you asking if the city of Woonsocket could offer this type of insurance for its citizens?

Senator LEHMAN. No, no. It has been suggested that instead of confining the purchase of insurance to individuals or corporations there might be cases where the cities themselves would wish to acquire insurance on a community basis in protection of its citizens.

Mayor COLEMAN. I can't answer the question. I don't know.
Senator LEHMAN. How about you, Mayor Reynolds?
Mayor REYNOLDS. I don't believe so, Senator.

Senator LEHMAN. Well, I don't know whether you can add to that, Governor. I don't know whether it would be possible or legal.

Governor ROBERTS. I understand there has been a suggestion that the municipality purchase from either the Federal Government or any other source insurance coverage for the industry, commerce, and individuals in the community of Providence or Woonsocket.' In other words, you would be paying the premiums, Mayor, for the entire community.

Mayor ČOLEMAN. Would the city pay the premium?
Governor ROBERTS. Yes.
Mayor COLEMAN. I can answer your question now. No, we can't.

Senator LEHMAN. I can characterize that as a very forthright answer. I wanted to have the facts.

Governor ROBERTS. I might say, Senator, that Mayor Coleman has done a remarkable job in the city of Woonsocket. Its economy has been very bad over the years, and he has given new life to the city and encouraged people to make investments, and I think he is well qualified to talk about the expenditures he might be able to make as mayor of that city. I think when he says they cannot afford to pay it, he is telling you the exact truth.

Senator LEHMAN. Thank you very much.

I am not sure whether in the course of your testimony you estimated the loss to the city of Woonsocket.

Mayor COLEMAN. To public facilities?
Senator LEHMAN. No, public and private.

Mayor COLEMAN. Total? I would say seven and a half to eight million.

Senator LEHMAN. How much of that would be public?
Mayor COLEMAN. Oh, maybe one and three-quarters million.
Senator LEHMAN. Mayor Reynolds, have you any estimate?

Mayor REYNOLDS. I think we expended about $1.6 million for municipal buildings and so forth, and I think about $52 million in private.

Senator LEHMAN. How much?
Mayor REYNOLDS. $52 million.
Senator LEHMAN. Thank you very much.
Do you know when Mr. Barrett will be here?
Mr. FINKELSTEIN. I am not quite sure.
Senator LEHMAN. How long will your testimony take?
Mr. FINKLESTEIN. Just a short time.

Senator LEHMAN. Will you give it then, please? Will you identify yourself for the record ?

STATEMENT OF ROBERT FINKELSTEIN ON BEHALF OF FLOOD CON.

TROL COMMITTEE, WOONSOCKET CHAMBER OF COMMERCE Mr. FINKLESTEIN. My name is Robert Finklestein, partner in the firm of Jacob Finkelstein & Sons, one of the firms that got its feet wet.

The city of Woonsocket, its industries, its business firms, and its people have been exposed to the dangers of floods for many years. Within the relatively short span of the past 30 years, we have suffered seriously on not less than 6 occasions from the rising waters of the Blackstone and the Mill Rivers, which have their confluence in Woonsocket.

Not all of these floods have been catastrophic. None of them previously has ever approached the extent of damage and devastation that was experienced last August. But each of them has extracted its toll of suffering and loss, and each time the individuals and the business enterprises affected have had to absorb their losses and attempt to reestablish themselves.

They have not always been successful. Some of the industries lost to Woonsocket during the past 30 years can be considered as the casualties of these previous foods. They were unable to survive the heavy financial strain imposed upon their resources by conditions which were entirely beyond their control.

It was this previous flood experience which brought into existence the flood control committee of the Woonsocket Chamber of Commerce many years ago. The group has worked intermittently on the effort to secure Federal action on food protection, but these efforts were ineffectual insofar as practical results were concerned until 1952.

Early in 1952, members of our committee learned that a flood-control program, designated as the Woonsocket Channel improvement project, had won Federal approval in 1949 and that notice of this approval had been transmitted by the Corps of Engineers to the then city government as far back as 1949. This notice required that local assurances of cooperation be given in executing the program through undertaking to meet the local aspects of expense connected with the project. Lacking such local assurances the project would expire within 5 years.

The then city government neither acknowledged this notification nor made public its existence. When it finally came to the attention of our committee in 1952, the chamber of commerce immediately authorized the committee to proceed with efforts to obtain the necessary local assurances to the end that the long-sought-for program might become a reality.

Since 1952, our committee has had the complete cooperation of the present city government, along with the help and assistance of State officials and representatives of the Corps of Engineers. As a result, , the necessary local assurances were certified in 1953 and there have since been two Federal appropriations to advance the project through the planning stages. It is our assumption that Congress is prepared at its next session to make the additional appropriations that will result in the actual construction of the planned project.

These facts are set forth for one purpose: to indicate the extensive time lag that is involved between the realization of the necessity of a protective program and its actual construction.

The only immediate protection that can be extended is that which would be available through insurance. We feel very strongly that it is the obligation of the Federal Government to initiate a disaster-insurance program to prevent economic disaster.

We have cited our previous experience with floods. In each of the floods which occurred in 1927, 1936, 1938, 1944, and 1954 many of our business firms suffered financial losses. Some were unable to meet the heavy financial burdens of rehabilitations and were forced out of business. Others managed to survive, but their recovery was long and arduous. They were encouraged by the hope that protective works would someday be built to safeguard their properties.

Many of our industrial firms went to considerable expense to protect themselves insofar as it was possible to do so against future flood losses. In some cases, extensive construction changes were made to protect the properties against flood levels. In many instances, expensive pumping facilities were installed. Certain areas in some of the plants which were subject to flooding were restricted to limited use to reduce the potential damages resulting from floods. All of these undertakings imposed an added financial burden on the property owners. Beyond the complete abandonment of the properties, they represented the best that could be done to insure the owners against future flood losses.

These protective devices, geared to cope with the levels of previous floods, were completely inadequate to withstand the unprecedented levels of the 1955 flood. Areas of the community which had previously escaped damage were this time affected. And the areas which had had previous flood experience were this time subjected to much higher water levels.

As a result, the losses inflicted upon property owners, industrial firms, and business establishments by the 1955 flood were far heavier than ever before. While Woonsocket was fortunate that it escaped without loss of lives, it was not so fortunate in the material damages that it sustained.

To indicate the severity of this economic blow to the community, we cite the fact that Woonsocket has approximately 120 industrial firms, providing employment for something over 11,000 workers. Of this number, our chamber of commerce records show that 34 firms, employing over 6,000 workers, or more than half our total industrial work force, were the victims of flood damage. The losses to individual companies ranged from a minimum of a few thousand dollars to a maximum of over $750,000. The aggregate damage to our industrial

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firms, exclusive of production losses, is estimated at $4.5 million, an amount which may not appear large by some standards but which represents a serious blow to the economy of a city of the size of Woonsocket. A list of the firms and the approximate number of employees is appended to this statement.

Woonsocket's commercial losses, while more widespread and involving a far larger number of individual firms, were lower in total dollar value. Nearly 200 commercial firms, many of them small owneroperated businesses and the great majority comprising retail stores located in the heavily concentrated social business district, were reduced to almost total loss. In many instances, the accumulations of a lifetime of hard work were entirely wiped out. The individual losses ranged from a few hundred dollars in some of the smaller establishments to losses well in excess of $100,000 in a few instances. No completely accurate figures are available for the aggregate loss in this category, since many of the victims are unable to estimate their losses. We estimate it to be somewhat in excess of $2 million.

Other representatives of Woonsocket's community life are prepared and have testified pertaining to other aspects of the losses visited upon the city during these recent floods. Their testimony supports the need for Federal action to provide protection against such calamitous losses in the future.

Woonsocket's economy was not strong before the visitation of the 1955 floodwaters. The depressed conditions prevailing in the textile industry, upon which the community depends to a substantial degree, ha created extensive unemployment through loss of industry and many of the firms still operating were encountering financial difficulties. Unfortunately, many of these same firms were located in floodaffected areas and are now faced with the added burden of rehabilitation costs. The economy of the community will be drastically harmed if inability to meet these flood-incurred costs should result in the further loss of industry. Had there been an adequate flood-insurance program in operation prior to the floods, the damage would be substantially minimized.

In summary, Woonsocket's flood problem is twofold. First, there is obvious need of an effective flood-control program and the community is working aggressively toward the achievement of this goal. Second, and this is the aspect that is within the province of your committee, there is absolute necessity of an insurance program that will make it possible for business and industry to obtain protection against the unpredictable financial losses that are occasioned by floods and similar disasters caused by conditions entirely beyond the control of the potential victims.

We would point out that few individuals would risk their capital in business ventures were it not possible to obtain insurance protection against the eventualities of fire, theft, liability, and similar catastrophes. Yet in most industrial communities, located as they are along the river valleys where water is available for processing and for power, the danger of loss by floods is equally grave. And in this important area of exposure only limited insurance is available, but at such high costs as to make it prohibitive.

Private insurance companies have expressed their inability to provide such protection. Since this is so, and recognizing that the risk

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