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Senator LEHMAN. May I ask this: Does Mr. Freeman's plan assume compulsory insurance or voluntary insurance?

Mr. FREEMAN. I don't think compulsory insurance would work, sir. People don't like to be told.

Senator LEHMAN. I know they don't. But what I am getting at is this: I think it is perfectly true this thing might be self-supporting within a reasonable time providing you can widen you base.

Mr. KELLY. That is right. You could have such a widening of the base without compulsions if lending institutions would feel that such coverage should be carried for their own protection. For example, we have had within the last 10 years a tremendous enlargement of the amount of windstorm or extended coverage carried because the loaning institution which made a loan on real property required that protection.

In the same way, if loaning institutions would insist that the owner of the property, in order to protect the loan, would carry flood or disaster coverage, you would get the wide base which you need to make the plan operate.

Senator LEHMAN. Thank you very much.

Mr. KELLY. Thank you very much.

Senator LEHMAN. I want to clear up this Lloyds proposal for the record. We have had information that Lloyds no longer writes insurance on real property. Does the quotation that was given you cover real property or personal property?

Mr. FREEMAN. I would say you have been misinformed. Am I right, Mr. Kelly? Does Lloyds still write coverage on real property in this country?

Mr. KELLY. They do. Lloyds is licensed in two States as a licensed insurance company. It operates through reinsurance, of course, in almost all of the other States. It has sometimes been accused-and I do not represent them so I can't ask for the fifth amendment as a defense-they have sometimes been accused of writing direct insurance on property in States in which they are not licensed.

Mr. FREEMAN. We don't like it.

Senator LEHMAN. Well, if they quote any rates such as you have mentioned, to all intents and purposes they do not offer insurance, because that would be perfectly prohibitive.

Mr. FREEMAN. In London last year I went right to the chairman of the London Lloyds about this, because I had two specific cases where they had taken specific business from us and I didn't like it, and they were stopped.

Mr. FOGARTY. I would like to ask one question, Senator, to get clear in my mind. Mr. Freeman, in your closing statement you made a statement that you hoped that the Members of Congres would urge the Army engineers to get going a little faster on this barrier in Narragansett Bay and left the inference, as you said it, that maybe this estimate for the 1 costing $6.2 million might be the answer. Did you mean to infer that that would be the best one?

Mr. FREEMAN. I'm very sure of that. There are 2 plans that are practically identical, the McGuire plan and the Main plan, and they run between $6 million and $7 million. The dam is within about a hundred feet of one location or the other. And rather than wait 13.

months for the Army engineers to complete this tremendous program, I say let's get going and take care of Providence, because out of the $70 million of damage, $50 million of it occurred in Providence.

Mr. FOGARTY. Maybe I should know more than I actually do about it, but I read the article that was in the paper this morning talking about this proposed dam down at South Street I think it was. Mr. FREEMAN. That's right.

Mr. FOGARTY. Costing $6 million. Then further down, around Fields Point, another estimate of $15 million, another one at $18 million, and then another 110 to 170 million dollars at the entrance to the bay.

Mr. FREEMAN. That's right.

Mr. FOGARTY. If the Army engineers made a determination that it is best for the city of Providence and the bay area that this project be built at Fields Point instead of South Street, I would think that we'd be bound by their advice, because they are the ones who know more about it than I. How do you feel about that?

Mr. FREEMAN. Well, I have served on Mayor Reynolds' committee for a year now, isn't it, Mayor?

Mayor REYNOLDS. About that.

Mr. FREEMAN. We have studied every report for every location. And outside of that, a group of us hired this outside engineering firm. We are, of course, primarily interested in Providence because this is practically a city-State here whether we admit it or not. Sixty percent of the people are in the city. It is a very important factor. I just don't feel we can afford to let this thing go on and take this risk. I think we have just got to get Providence protected.

Sure, it's too bad about the people just the other side of the dam, but we have just got to get going on this thing. Hurricanes and floods are not going to wait.

Mr. FOGARTY. I mean is there any engineer who told you that this project could be completed within a year?

Mr. FREEMAN. Within about 18 months; yes, sir.

Mr. FOGARTY. From the time you get the money?

Mr. FREEMAN. From the time we get the money to go ahead. Mr. FOGARTY. I do not know how Congress could appropriate the money unless they had the advice of the Army engineers. I do not think that project would get priority from Congress under any appropriation without the specific recommendation of the Army engineers as to where that project should be located in the overall plan on Narragansett Bay.

Mr. FREEMAN. I agree with you, but I think you can tell the Army engineers that you want them to report on Providence immediately, and then they give you the report on Providence and we can get your appropriation and go ahead with that.

Mr. FOGARTY. But if they tell me, "Well, maybe this one down at Field's Point is going to be better, economically it will be better for the city of Providence as a whole than this $6 million estimate will be at South Street," what am I to do then?

Mr. FREEMAN. I don't want to do the mayor's talking for him here, but his committee has studied this, and we are convinced that to do the job for Providence the dam at South Street is the answer.

Mr. FOGARTY. I am just as anxious as you are to get this job completed, and I think that we, Mr. Forand and I and Senators Green

and Pastore, were able to get this survey authorized last year and get the full appropriation that the Army engineers recommended for the survey to start. We hope that we will be able to get the appropriations that they will ask for in this coming spring for the next fiscal year to continue the study and to do something about these catastrophies. But I am still not clear as to the authority in this. After the Army engineers have had a chance to complete the study, if they come up with a recommendation that maybe Fields Point is better than South Street or the entrance of Narragansett Bay area, I would think I would be almost forced to go along with their recommendations, which would be based on their experience and their background and their knowledge of this particular situation which they claim is unique in engineering research.

Don't you agree with me on that?

Senator LEHMAN. Congressman, may I say I think you must understand that we have a number of other witnesses, and this is a hearing on a general proposition of disaster insurance, and while I would be only too glad to have you discuss this thing at greath length with Mr. Freeman and his associates, I do not think this committee can spend the time, the very limited time at our disposal. I have to leave for New York within an hour.

Mr. FOGARTY. I will not ask any more questions. I just wanted to make that remark and clear it up.

Senator LEHMAN. I am sure you will have ample opportunity. Mr. FOGARTY. You have been very generous, and I appreciate it. Senator LEHMAN. I would like to give you as much time as you want, but I am sure you will be able to discuss this thing at your leisure many times privately or in public.

Mr. FOGARTY. You have been very generous, Senator, and I appreciate it.

Senator LEHMAN. May I express my thanks to Mr. Freeman. It has been very helpful indeed. It certainly will receive very careful consideration. I want to also thank Mr. Ambrose Kelly as well as you for his great help to our staff in giving us information which could be used and has been used helpfully in our staff study.

Mr. KELLY. Thank you.

Senator LEHMAN. I hope other insurance groups will be equally helpful.

I am going to ask Mr. Thomas F. Policastro, president of the Rhode Island State Industrial Union Council, CIO, to come forward. I understand you have several people with you.


Mr. POLICASTRO. Very briefly, Senator Lehman, we are from the Rhode Island CIO. There is no need for us to present to you lengthy testimony today, because in Boston yesterday Brother Belanger, who is chairman of the New England Conference of CIO Councils, presented lengthy testimony to you and your committe. However, for

the record, we of the Rhode Island State Industrial Union Council are heartily in favor of a Federal disaster insurance just as soon as we possibly can obtain it.

However, when we state that we are for something, our position on this issue was the result of much hardship, much suffering on the part of our rank-and-file membership, and today I have with me Brother Joseph Desrosiers, of the Rubber Workers Union, Local 224, in the city of Woonsocket, Brother Lionel Gauvin from the same local union, and from the Warwick area Brother Lawrence Houle and Brother John Scallon, of Local 4408 of the United Steelworkers of America, Mr. Houle, will you please speak first?

Mr. HOULE. My name is Lawrence Houle. I heartily agree with all the witnesses who have testified for the need of disaster insurance. I know this firsthand, for in a few moments I lost the result of 20 years of hard labor, self-denial, and just plain "do without."

Even so, I count myself fortunate, for I just barely evacuated my wife and 3 children by seconds from the immediate area that claimed the lives of 2 of my neighbors.

When you lose your home and your possessions you just don't start from scratch. You don't start from scratch. You immediately plunge yourself into debt. In the case of a middle-aged worker with three children to rear, the future seems rather bleak.

While it is true that I now possess comparatively few of the world's goods, I am still as independent as the man that stands on the top of this building. I am opposed to a handout. I believe that the worker eventually can and will pay for anything he receives. He always has and I imagine he always will.

Thanks for the hearing.

Senator LEHMAN. Did you own your house?

Mr. HOULE. I did, sir.

Senator LEHMAN. Did you have a mortgage on it?

Mr. HOULE. No mortgage, sir. I cleared it up.

Senator LEHMAN. It was paid up?

Mr. HOULE. Paid up.

Senator LEHMAN. Was the house destroyed or damaged?

Mr. HOULE. The house was destroyed. It wasn't completely destroyed, but it was destroyed to this point: The heating plant was gone. The front of the building was gone too, cleared right off. Of course, in a city that lacks sewage facilities you can understand what happens when the water piles up 5 or 6 feet in the yard and what backs into the house. It's almost unlivable. For all practical purposes my home was destroyed, and it was only through the efforts of friends and myself working you might say around the clock that we put it back in livable condition. Even today it is not what it was formerly.

Senator LEHMAN. Did you get any assistance from any Government agency or the Red Cross?

Mr. HOULE. I did. I received assistance from the Small Business Administration and I am paying for that now.

Senator LEHMAN. Now, you

Mr. HOULE. I plunged into debt.

Senator LEHMAN. Thank you very much. How long a loan was that, may I ask? For what period was that loan?

Mr. HOULE. For 15 years.

Mr. DESROSIERS. My name is Joseph Desrosiers from what they call the social district in Woonsocket. I have 5 children, 2 of whom are in the service in Germany. I don't own a house but I have a tenement apartment of seven rooms. When the flood came that went to a foot from the ceiling and it destroyed all my furniture and left a foot and a half of mud in the house.

To get back on my feet I went out and I took a $500 loan at 8 percent, and I cashed some life policies that I had on the children. I had aid from the Red Cross and from the Catholic diocese and also from the Help Thy Neighbor Committee in Woonsocket. But I mean it's a thing that set me back I'd say to the time I started my family, and I heartily am in favor of getting an insurance for the small man. After hearing all this talk about millions of dollars, it set my head whirling. After all, I mean

Senator LEHMAN. It does mine, too.

Mr. DESROSIERS. That's probably all I can say about it.

Mr. GAUVIN. My name is Lionel Gauvin, 20 Nourse Street, Woonsocket. That is part of the social district. The same thing happened to us. Everything was wiped out by this water.

I had just renovated and put in a new heating system, hot-water system, a little convenience to make the homelife easier. Now that's all gone and I cannot replace it unless I borrow it.

Senator LEHMAN. Do you own your house?

Mr. GAUVIN. No, sir, but it's under the understanding that I do the repairs because I pay a low rent. At the same time, the plant in which I am employed, United States Rubber, suffered a great deal of damage which left us out of work. So we were, I believe, about 13 days out of work. But the bills keep coming in just the same. And we have these added bills coming in also now.

Senator LEHMAN. Did you have to borrow after this?

Mr. GAUVIN. Oh, you have to borrow, sir.

Senator LEHMAN. No, I don't mean on that, but I meant you say your heating system was destroyed.

Mr. GAUVIN. That's right.

Senator LEHMAN. And other things. Are you replacing those? Mr. GAUVIN. I can't replace them right now. I mean the heating system I have replaced because I need it, but as far as the other things, that takes time.

Senator LEHMAN. Was your furniture destroyed?

Mr. GAUVIN. The furniture is destroyed.

Senator LEHMAN. Did you have any insurance at all?


Senator LEHMAN. All right.

Mr. HOULE. Mr. Lehman, I'd like to add, too, my furniture was destroyed in its entirety, and I also received greater assistance than what I mentioned. The CIO helped me quite a bit, but I consider it a loan. Though they refused repayment, I still consider it as a loan. And I did borrow $1,000 immediately from my credit union. Without the credit union and without the help of the CIO, I would have been destitute, because I want to point out at the time that the plant that I work in was also crippled at the time, so not only were all my possessions destroyed but my livelihood was gone, too. I didn't know at the time this plant was going to open up as quick as it did.

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