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must exist if they are unable to assume it, there can be no valid contention that a program of Federal disaster insurance is an invasion of their proper field of operation.

It is entirely normal and proper for Government to undertake programs and projects which are in the public interest and which are too extensive, too involved, or too costly to be provided by private enterprise.

It is beyond any question that such a program is in the public interest. Much of the industrial life of our Nation is concentrated in areas adjacent to water. These areas cannot be abandoned. Business must be encouraged to maintain operations to provide the jobs and the payrolls that keep our economy strong. Yet these areas do involve a degree of exposure; and if business is compelled to absorb, without reimbursement, the losses that result from periodic floods, its ability to continue in operation is imperiled.

Immediately following the recent disaster assurances were expressed by Government officials that protection would be afforded against a repetition of the devastating losses that were experienced. These assurances were one of the motivating influences behind the remarkable rebuilding program that has brought about the resumption of operations of many of our stricken companies. Without them, some could not have found the courage nor the resources to reestablish. They now desperately need the fulfillment of these pledges which were made. Our people do not ask for a gift or subsidy from Government. They feel that such protection can be provided at rates which are within their ability to pay. They do not feel that it is contrary to the principles of Government to give such protection when they see payments already being made by Government to reimburse individuals for losses resulting from the rampages of nature.


Such an insurance program should not be limited by arbitrarily fixed ceilings on coverage. Any limits imposed should be proportioned to the value of the property covered. Only in this way can a program be equitable and effective. It is obvious that a ceiling of $300,000 would provide little inducement to a firm with a property investment of $5 million. But the loss of a $5-million firm to a community as a result of flood damage would be far more harmful to the economy of a community and more significant in the number of jobs involved than the loss of a small company. It is our belief that the protection of the insurance should be adequate to meet the potential losses of the owner.

A reinsurance program should be established, with Government support, to enable private insurance companies to sell a "package plan" to include flood, earthquake, tidal wave, hurricane, atomic radiation, and similar risks that insurance companies at present are unable or unwilling to underwrite. These risks would broaden the base of the program, inasmuch as the purchasers of these coverages would be not only those subject to flood damages. With a few years of experience, insurance companies might be willing to take on these risks because they would comprise a much broader base and thus would be more sound from an insurance point of view.

The Woonsocket Chamber of Commerce and its flood-control committee strongly appeals to this committee and to the Congress of the United States for prompt and favorable action in this vital matter of disaster protection.

When the Government concerns itself with crop insurance, it is protecting the farmer against the disasters of nature that can destroy crops. Note, for example, the fact that the recent floods destroyed the tobacco crop in the Connecticut Valley. The Federal Government paid hundreds of thousands of dollars for the destruction of this crop. The manipulation of tariff rates protects workers and industries against the disastrous effects of foreign competition. Farm subsidies protect farmers against the disastrous effects of lowered prices. Our Government has plenty of precedent to enable it to protect large segments of our population against the disastrous effects of floods, tidal waves, and hurricanes.

When disaster strikes in any part of the world, millions of American dollars are sent to alleviate distress in foreign lands. This is the humane and decent thing to do. After a war, our enemies are given disaster aid. Billions of American dollars have been spent to rebuild Italy, Germany, and Japan. American money has even gone to aid Communist Yugoslavia. On the international front, we consider it extremely important to protect noncitizens against the results of disaster. American citizens and taxpayers are worthy of at least the same consideration.

(The attachment referred to follows:)

Woonsocket industrial firms sustaining damages by floods of Aug. 19-20, 1955

[blocks in formation]







French Worsted Co___

The Garnett Corp-

Geltman Sponging Co

A. E. Goldstein_.

E. P. Hebert Knitting Mills_.

Joan Plush Mills__

35 Textile Processing Co___
100 United States Rubber Co____
30 Verdun Manufacturing Co.--
35 Winsor Manufacturing Co-
100 Woonsocket Dyeing Co..

Lafayette Worsted Spinning Co---- 125 | Woonsocket Falls_

Senator LEHMAN. Mr. Finkelstein, do you happen to know whether the industries of Woonsocket or any of them tried to get flood insurance on equipment or inventory?

Mr. FINKELSTEIN. Yes, sir. I can speak for ourselves.

Senator LEHMAN. Can you tell us about the rates that were quoted?

Mr. FINKELSTEIN. There were no rates given.

Senator LEHMAN. It was unobtainable?

Mr. FINKELSTEIN. Yes, sir.

Senator LEHMAN. Anywhere?

Mr. FINKELSTEIN. That's right, sir.

It was unobtainable.

Senator LEHMAN. It was obtainable from one source? Lloyds!

Mr. FINKELSTEIN. Lloyds refused to write it.

Senator LEHMAN. But at such prohibitive rate

Mr. FINKELSTEIN. They refused to write it.

Senator LEHMAN. I have been informed during the course of the hearings that while Lloyds once did offer that insurance they got out of that field.

Mr. FINKELSTEIN. They withdrew.

Senator LEHMAN. So from your own experience you can testify that insurance on inventory or on plants is unobtainable-that is, flood insurance?

Mr. FINKELSTEIN. We attempted to obtain it and we were refused it. Senator LEHMAN. Thank you very much.

Senator Green, did you want to ask any questions?

Senator GREEN. No.

Senator LEHMAN. Since the hour is already rather late, I think we will recess for lunch and meet here again at 2 o'clock.

(Whereupon, at 12:45 p. m., the committee recessed to reconvene at 2 p. m., this date.)


Senator LEHMAN. General Fleming, will you be the next witness? General Fleming, as you know, is division engineer of the United States Army Corps of Engineers.

General, we are very anxious to hear from you on what is happening in the way of flood control and what if any suggestion you can make.


General FLEMING. Thank you.

Well, Senator, as you know, representing the organization I do, I am supposed to be very impartial. You gave me an opportunity by the question you asked me earlier, however, to shed my cloak of impartiality, and I will plead guilty in advance to being a very rabid partisan on what I am about to talk about now, and that is the question of the status of the flood-control program in New England.

You quoted General Sturgis' testimony, and he was speaking about the United States as a whole. I am not quite sure of the figures I am going to give you now. I am digging them out of memory from having read that testimony, but, as I recall it, about $4.5 billion has been spent by the Federal Government on flood-control programs in the United States as a whole. There is about $4 billion for floodcontrol purposes in the backlog of which General Sturgis spoke, which at the rate of $200 million to $250 million per year would take 22 years to finish.

That would mean, sir, that of all of the authorized projects in the United States about one-half of them have been completed.

I think the situation in New England is very different from that. Our total authorized program of flood control in the New England area, of which I am in charge right now, totals about $330 million in authorized projects. Roughly $70 million has been spent. So the New England program compared to the United States average as a whole of roughly 50 percent complete is somewhat less than 20 percent complete, and that I think is the great problem here in New England the fact that the flood-control program here has lagged behind the comparable programs in the rest of the country.

I am obviously not an expert on insurance and I really do not think I am competent to comment on the disaster-insurance question which you are exploring today. I would like to say this, sir: That I do not think there is any one-shot solution to this problem and that anyone who from a very partisan standpoint argues that there is only one solution to the problem of disasters in New England just doesn't know what he is talking about.

We people who are interested in flood control certainly do not make that claim. From an engineering standpoint it would be possible to protect against every possible flood threat. From an economic standpoint, however, that is absolutely impracticable, because we would never be able to afford the tremendous expenditures involved. Therefore, even when we complete the authorized projects we now have in the books, which have been authorized by Congress in the past, I think that there will still be areas subject to flood damage. From an economic standpoint as far as construction of public works is concerned we must accept the possibility of taking some damage as a calculated risk, merely because we cannot afford to spend enough to protect everything. We do not know where the floods are going to come.

In this last flood in New England, sir, the damage which that did is almost indescribable. I was the deputy chief of staff of an Army corps in Europe which was given the job of mopping up the Ruhr, in the Ruhr pocket, after the surrender of that German Army group, and one of our jobs, of course, was to restore essential public facilities. Outside of the piles of rubble which were left around on the streets from the bombing of buildings, the damage which this storm did in New England in 2 days to public facilities is just as great as we did by 3 years of bombing in the Ruhr. It is almost indescribable.

The city of Woonsocket was just gutted. The damage in the State of Connecticut was more widespread merely because a larger area was involved.

Since then we have been involved in a four-point program. I have felt at times like a ringmaster of a four-ring circus. One of those, and the most immediate job of course, is cleaning up and providing disaster relief in places which were so badly hit in August and again in October.

The second program we have been carrying on is trying to decide and to crystallize thinking on what should be done in the immediate future as regards the projects which have already been authorized by the Congress.

The third point we have been working on is a restudy of the floodcontrol program in New England as a whole to find out what additional coverage is necessary in view of the very peculiar storm we had in August and also the equally peculiar one we had in October.

The fourth point is to pursue the hurricane study which was authorized by the Congress in the last session and for which we were given an appropriation this year of a million dollars.

Obviously I think in New England we are dealing with two separate but related problems. One of them is the problem which Mayor Reynolds mentioned to you this morning of the flooding from wind: it is a tidal flooding by the sea either at extremely high tides, hurricane-induced tides, or wind-driven tides. That was particularly damaging to the city of Providence, to New Bedford, and to certain areas of the Connecticut coastline.

We also have the problem now of the inland flooding of the water coming down.

The problem in New England I think is peculiar to New England. We have conditions in the streams here where you have very narrow valleys, extremely steep drops, and the possibility of getting a flash flood is much more prevalent here than it is in the midwestern part of the country, for example, where you have broader valleys, and there is a chance of getting warning when one of these floods is coming.

The Naugatuck River Valley in Connecticut is a good case in point. That is about 50 miles long. It drops 550 feet in that 50 miles. The valley itself is only 8 miles wide. During the height of the August flood we estimate that we had a flow past the city of Naugatuck, fairly well down the valley, of about 102,000 second-feet. It rose in some cases as high as 15 feet in 15 minutes. There was no possibility at all of getting any warning that that was coming.

So I mention the fourth point that we are working on there the hurricane survey. I think we have to attack each one of those twoproblems separately, and we have been trying to keep the people who are engaged in the hurricane study completely separate from this business of the inland floods so we can go forward on both of those fronts at the same time.

I mentioned that the total bill for authorized projects in New England now would be roughly $330 million.

Senator LEHMAN. That is for the New England area?

General FLEMING. That is the New England area, yes, sir. About $70 million of that has been spent, so the balance is about $260 million. We are not talking about a big program, sir. The total cost for the entire program up here to finish it is somewhat less than the cost of one project, one single project, in the Columbia River Basin.

The dams that we are talking about for flood-control purposes are all small dams. The Nitville Reservoir, for example, on the Westfield River in Massachusetts has a storage of 58,000 acre-feet. I would like to compare that with the Fort Peck Reservoir in Montana on the upper Missouri River which has a storage of 19 million acre-feet. So these projects we are talking about are all small projects.

Out of the two studies we now have underway, the review of the plans for the inland flooding, the flash floods coming down, and the hurricane floods, we expect to generate some additional projects. I think we will add to this total of $330 million. I would hesitate to even try to guess how much. I do not think, however, that very much will be added-comparatively I mean. We aren't going to double the size of the program. It will probably be in the neighborhood of somewhere around 25- or 30-percent increase. So the total program we are talking about, even actual now or potential, I think still remains a fairly small program.

Getting specifically back, sir, to this present flood, my instructions are generally to effect temporary restoration of essential public facilities. That is the wording of Public Law 875. I think that with the cooperation of the people in the States and the local officials we have. interpreted that word "temporary" and the word "public" just about as liberally as we possibly could. We have already spent or, rather, obligated, a total of about $8,152,000 in direct obligations that my office has undertaken.

69096-56-pt. 1-40

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