Again, in this disaster the number of small-business people affected was higher than in the usual average disaster that we have experienced. So we had to do considerably more. We have been working very closely with the Small Business Administration and with the gov ernors' committee and with the local credit facilities. We may do the entire job sometimes. We may do part of a job with the Small Business Administration at other times, or with local banks. But in any case, whatever the Red Cross does, if it is a part of the job with the Small Business Administration, or someone else, it is in the form of an outright grant or gift. Senator LEHMAN. Can you give us for the record the average amount of these outright grants? Mr. BUNKER. We can and will supply it, Senator. I cannot give it to you offhand, but we will supply it for the record. Senator LEHMAN. Have you any limit on individual grants either to business concerns or individuals? Mr. BUNKER. We have no limit, Senator; no. I think the maximum grant in this disaster so far that we have given would be somewhere around $17,000 or $18,000. Senator LEHMAN. What was that for? Mr. BUNKER. That would have been for business-small business. Senator LEHMAN. Have you any idea what the average individual grant is for the rehabilitation of homes, including furniture? Mr. BUNKER. My assistant tells me, for example, in one community here in Unionville, the average was $4,000 for repair or reconstruction. But where the house has to be rebuilt completely, of course, that will run a good deal higher-$8,000 or $9,000 or $10,000, or more. Senator BUSH. Mr. Chairman, if I might be permitted to observe, I know of one case that I saw in Waterbury, where a grant of $16,000 was made to 1 family, consisting of a widow and 1 child. They got a new house, furnished, and their clothing restored, this little family, costing $16,000. Mr. BUNKER. Yes. Here is a case in Farmington of $4,567. Here is another case of a farmer who had a total grant of $9,824 for rebuilding his barn and repairing his house and replacing stock, and so forth. As I say, each individual case is handled separately and on its merits with an experienced Red Cross disaster worker and then, very importantly, I think, with the community advisory committee, who have functioned very wonderfully well in this operation everywhere. Every case is submitted to them for approval. Senator LEHMAN. As I understand it, out of the $15 million which you collected, approximately $3 million was used for actual immediate relief? Mr. BUNKER. A little over $2 million, Senator. Senator LEHMAN. And $13 million Mr. BUNKER. Out of $15,373,000 a little over $2 million went for the immediate. Senator LEHMAN. I had no idea of that. I would have thought the greater part of your funds were used in immediate relief. Mr. BUNKER. No, sir. It is a big, long job. Senator LEHMAN. Mr. Bunker, you stressed that the Red Cross disaster aid is given on the basis of need and not to replace all losses. So even with the very useful and valuable assistance of the Red Cross, disaster victims are not made whole for all of their losses. Mr. BUNKER. That is right. Senator LEHMAN. In this gap you agree there is room for an insurance program to operate? Mr. BUNKER. Yes. We do not operate as an insurance program, Senator. The Red Cross, as I say, attempts to fill the disaster-caused needs on the theory that the victim, to the extent he can, will want to help himself. We do not replace all losses. There is a gap between what we do and between what an insurance program would do. Senator LEHMAN. Can you establish for the record, let us say, and for our information, the need of a family for a particular sized grant for rehabilitation? How do you get at that? Mr. BUNKER. In that case the worker, the case worker works with the family and goes very carefully into their situation-their resources and their health situation and their loss. We have building advisers who advise on the cost of reconstruction or repairs to buildings. We have had very useful assistance from the Department of Health, Education, and Welfare, who have loaned us some of their staff who were trained as building advisers, and in each case we go into it in great detail. Then with the family we come to an agreement on what they will need for getting back on their feet and getting back to their predisaster basis of living. Senator LEHMAN. I want to make one observation. The estimates of the losses from the floods in August and in October ranged from about $700 million, including the Carolinas and New England and the Northeastern States, up to a billion and a half, roughly speaking. Mr. BUNKER. Yes, sir. Senator LEHMAN. The lowest estimate is around $700 million. Through your kind offices in the Red Cross you supplied $13 million for rehabilitation. I am not minimizing in the slightest degree the very valuable work that the Red Cross is doing. Mr. BUNKER. Yes; I understand. Senator LEHMAN. I think we must all be very grateful to you. But that does leave a gap of approximately very close to $700 million, and that is the minimum figure I have seen, which still has to be made up. That represents losses sustained by men, women, and children against which there is no insurance and no way of compensating them, and no way of putting them on their feet again, because they were unable to get flood insurance. I just want to make that very clear. While I think you have done a wonderful piece of work, it still only goes a very, very short way in solving the problem we have before us. Mr. BUNKER. Yes, sir. Senator, as I pointed out in the statement, of course the Red Cross has nothing to do with the losses in public. utilities, and railroads, and bridges, and highways, and anything of that kind. We do attempt to fill the needs of the small-business men, but obviously the large business which suffers and has suffered very heavy losses in this disaster we do not attempt to render any assistance to. What we do try to do is to fill all of the individual needs. As I say, we try to fill not the losses, but the needs of individuals and the small-business man who has been affected, and I believe, Senator, that when this relief operation is finished, every family and small-business man in need will have had those needs met by the Red Cross. 69096-56-pt. 1--47 Senator LEHMAN. Thank you very much indeed. Thank you for coming. We know how busy you are and I want to congratulate you again on your fine work. Mr. BUNKER. Thank you very much. Senator LEHMAN. Without objection, the tables attached to the prepared statement of Mr. Bunker will be made a part of the record at this point. (The tables referred to follow :) ATTACHMENT 1 Statistical and financial summary, eastern States floods, as of Nov. 11, 1955 2 Weather-caused disasters include hurricane, tornado, other storms, flood and flash flood. (Other types of disaster in the classification used by Red Cross are fire, explosion, wreck and miscellaneous.) (The following was subsequently received from Mr. Bunker :) Hon. HERBERT H. LEHMAN, THE AMERICAN NATIONAL RED CROSS, The United States Senate, Washington, D. C. MY DEAR SENATOR LEHMAN: During the course of my appearance before the Senate Committee on Banking and Currency you queried me concerning the average of Red Cross awards and categories of assistance extended in Massachusetts, Connecticut, Rhode Island, New York, New Jersey, and Pennsylvania following the floods of mid-August and mid-October. I informed the committee that I would submit in writing the answers to the questions. You were particularly interested in my statement that on the average "only 20 cents or less of each Red Cross disaster relief dollar is spent for such help (emergency assistance). Eighty cents or more of each Red Cross disaster relief dollar is spent in helping families and small businesses who are unable to reestablish themselves within their own resources." You will be interested to know that on the Eastern States floods only 15 cents of the Red Cross disaster relief dollar was spent in providing for emergency assistance while 85 cents was spent for long-term assistance enabling families and small businesses to reestablish themselves. The average award for helping families and small businesses for the total operation was $1,691. In the State of Connecticut, where the damage and destruction was the heaviest, the average Red Cross award was $2,004. Red Cross relief expenditures in the 6-State area now total $16,009,824. Of this amount $7,043,090, or 44 percent, represents expenditures for the repair or reconstruction of houses, business, farm, and other buildings. The next major expenditure in the amount of $5,305,366, or 33.1 percent, was for the provision of household furnishings; $1,875,998, or 11.8 percent, was expended for occupational tools, stock, fixtures, and equipment for small businesses; $1,785,369, or 11.1 percent, has been spent for food, clothing, and medical and nursing care. In addition to the relief expenditures set forth above, the Red Cross has incurred service and administrative expenditures amounting to $960,009. These costs represent only 5.7 percent of the total expenditures made by the Red Cross in this operation. I wish to express to you, on behalf of the American National Red Cross, appreciation for the opportunity of appearing before the Committee on Banking and Currency and wish to thank you personally for the courtesy shown me. With kind regards, Sincerely yours, ELLSWORTH BUNKER. Senator LEHMAN. Before I call on the next witness I want to place a letter in the record which I have received from Senator William A. Purtell, dated today. Hon. HERBERT H. LEHMAN, WEST HARTFORD, CONN., November 14, 1955. United States Senate, Flood Insurance Hearings, Supreme Court, State of Connecticut, Hartford, Conn. DEAR SENATOR LEHMAN: I regret that I am confined to my home by a heavy cold which prevents my appearance before your committee. However, knowing that many of my constituents desire to be heard at your hearing my appearance would have been brief in any event, since of course I shall have the opportunity to appear before the committee in Washington, and I would have allowed as much time as possible to our people here. As I have stated on many occasions and reiterate now, it is my strong conviction that flood insurance must be made available at reasonable rates to the people, as well as insurance covering other natural disasters which is not available at the present time. I would hope that this might be done through a plan by which private companies could write the insurance at reasonable rates, with the Federal Government reinsuring. I have tentative drafts of bills prepared and tentative drafts of legislation pending covering these matters which are based on this approach. This whole subject of disaster insurance is of course a very complex one, and your hearings will do much to develop the facts necessary for the determination of the best possible legislation to meet this need. We must see to it that insurance protection at reasonable and bearable rates is available to all of our people against damages and losses due to floods. I assure you of my continuing interest, effort and support in this matter. Sincerely, WILLIAM A. PURTELL, Senator LEHMAN. Now we are going to hear from the congressional representatives. We hope to complete their testimony before we recess for lunch. I am going to ask my administrative assistant, Mr. Edelstein, to call them in the order of their congressional districts. Mr. EDELSTEIN. Congressman at Large Sadlak. STATEMENT OF ANTONI N. SADLAK, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CONNECTICUT Mr. SADLAK. Mr. Chairman and members of the subcommittee, I am Antoni N. Sadlak, a Congressman at Large from the State of Connecticut, and I make my home at Rockville, 16 miles east of here. I have no prepared statement, but I would like to make a few brief observations. I believe, gentlemen, we have in this proposal of flood disaster insurance something that will appeal to our colleagues in both the House and Senate. It seems to me that we are not necessarily gradually, but somehow we are very quickly, reaching a point where all of us have a mutuality of interest with respect to disasters. From my observation of insurance history, where we have now provided for crop insurance and wind insurance, invariably there will be provision for endorsements of one on the policy of the other. I believe that we are heading for a comprehensive and overall disaster insurance policy. I am bolstered in that statement, gentlemen, by the fact that during the past many years we here in this particular area have not experienced the flood disasters that our fellow citizens have experienced in the Midwest and Far West. For that matter, hurricanes did not visit with any frequency this particular area, but somehow they used to confine their paths of destruction to Florida. That pattern has now changed tremendously, and I think that change has been more emphasized in the past 2 years. We have been visited by an unprecedented flood and only a week or 10 days ago a very large flood and windstorm had hit Washington State, where incidentally I was to be today with the Subcommittee on Narcotics of the Ways and Means Committee, whom I hope to rejoin in Chicago tomorrow to carry on that work. However, as has been mentioned by the chairman, I too came here for information today, so that I might be able to add the benefit of my legislative experience and, through knowing the area I might contribute in my small way to finding a remedy for this difficulty. I have no bill at the present time, but I am working on one and I hope to go over the draft when my subcommittee, which I have just mentioned, returns to Washington the first week in December to conclude their hearings. Then I will have an opportunity to go over the draft which I hope to submit when Congress reconvenes in January. I hope, too, after this committee has made its very serious survey, when the committee finally comes up with its bill that I will be invited to |