The CHAIRMAN. I know of one city in my State where I think they employed about 3,000 men in a roundhouse. The roundhouse has disappeared. They tell me they put the experts on the diesel engine and repair them as they travel. The roundhouse is fast disappearing everywhere. Isn't that true? Mr. KENNEDY. That is correct. The CHAIRMAN. We might persuade them to go back and find some way to burn coal. Mr. MUMMA. The C. & O. switched to diesel a hundred percent, didn't they? Mr. KENNEDY. I think they did. However, we have reached a point in the development of this new engine that we believe it can be operated cheaper and more efficiently than the diesel engine. The CHAIRMAN. I am happy to hear about any development which will help bring prosperity back to the coal mines. Mr. O'HARA. Mr. Kennedy, I am keenly interested in your statement in the first paragraph on page 2 where you state from your wide experience and certainly nobody in this country has a better understanding from experience than you have that "only younger men could obtain employment in new industry." Am I to conclude from that statement that if this program were inaugurated and the Government subsidized new industries, that in those new industries a man 40 years of age or older couldn't find employment? Mr. KENNEDY. That is correct, unless the Government would take steps to prevent it. Mr. O'HARA. Then certainly you would suggest that if the program should be authorized, that there should be a provision in it that would make it compulsory to employ in any new industries established men regardless of age? Mr. KENNEDY. That is right. I think the new law in Pennsylvania so provides. The FEPC Act so provides. Mr. HOLLAND. That is right, Mr. Chairman. Mr. KENNEDY. I think the Congressman might know. Mr. HOLLAND. I wrote it. Mr. O'HARA. I was further interested in your statement, Mr. Kennedy, that—and I take it this applies to the coal industry— Even in the coal industry a few firms now have an age limit for employment, which does not contemplate employing men beyond the age of 40. Mr. KENNEDY. Not in the coal mining industry, Congressman. We don't have that in the coal mining industry. Mr. O'HARA. I wanted to clarify that. I wondered whether your statement applied to the coal mining industry. Mr. KENNEDY. No. Mr. O'HARA. Thank you very much. I have found your statement especially interesting and very interesting in this phase as regards age. Mr. KENNEDY. Thank you. Mr. WIDNALL. Mr. Chairman. Mr. WIDNALL. Mr. Kennedy, what do you feel is the chief reason for the failure to hire people over 40? Mr. KENNEDY. Well, I think probably some of the pension arrangements might save something to do with it. Mr. WIDNALL. Does salary have anything to do with it? Mr. KENNEDY. No, I wouldn't think so. We raised, in the city in which I live, a million dollars to bring in new plants and we did. I have been checking around and find that there are very few people beyond 35 years of age that are employed in those plants. Mr. WIDNALL. You feel that is substantially because of the pension funds? I don't know. Mr. KENNEDY. That may be one reason. Mr. WIDNALL. Isn't another factor that most companies can hire a young person who has less assumed responsibilities at a lower rate than an older person who would normally have a family and have far more by way of material requirements? Mr. KENNEDY. Well, that might be the case in plants that are unorganized, but it is not true in the organized plants, because generally the rates are on the jobs and not on the individuals. The CHAIRMAN. Mr. Vanik? Mr. VANIK. I have no questions, Mr. Chairman. Mr. BETTS. I was interested about that Schuylkill situation. Is that typical of the coal industry, Mr. Kennedy? Mr. KENNEDY. It is typical of what we might call the coal counties in Pennsylvania. Mr. BETTS. Do you know anything about Ohio, West Virginia? Mr. KENNEDY. In West Virginia most of the unemployment is in the southern end of West Virginia, in the southern fields, where the bulk of mining is being conducted. There is not much unemployment in the northern part. Mr. BETTS. Is that true of Ohio? Mr. KENNEDY. That is true of Ohio, but I think that the situation will improve in Ohio, because of the new plants that are being built along the Ohio River. Mr. BETT. What is the overall situation in the coal industry? I am sort of interested. The chairman raised a question about it. Is the business on the increase or decrease? Mr. KENNEDY. The bituminous business has been increasing for the last 8 months, and I think they are out of the woods. I think it is going to continuously improve. And anthracite is about on the status, the present basis, with no movement either up or down. I might add that the mechanization problem in the industry is one that has caused a lot of unemployment. For instance, we are producing now in the bituminous mines of the United States average of 10 tons per day per man, as against, take England and the Continent, 1.24 tons per day per man, or less than 1/2 tons. I think that is the trouble with the British coal industry. Mr. BETTS. Mr. Kennedy, you referred to this dumping of residual oil. Could you give us some idea of how the Government could control this? Mr. KENNEDY. Yes. We had a bill in here the last session to control it on the quota system. Say, take 10 percent of last year's dumping, because I don't think you can reach it with a tax. I don't think you could reach it with a tax because it is waste material. It is dumped in here and sold for as low in some instances as 2 cents a gallon, in competition with coal, and probably natural gas. Mr. BETTS. You mention there was a bill in... Is there any way the Government can do it now? Mr. KENNEDY. Yes. We had a bill in, but unfortunately we didn't get it through. I mean, in the general bill that was up before the Congress in the last session. Mr. BETTS. Under present law could we control it? Mr. KENNEDY. I doubt it. Mr. BETTS. I am glad you brought that to our consideration. I think it is pretty important. Mr. KENNEDY. It is. Mr. BETTS. That is all I have, Mr. Chairman. The CHAIRMAN. Mr. Holland? Mr. HOLLAND. Governor, I think I know a bit about Pennsylvania and the coal mines. Mr. KENNEDY. You know as much about it as I do, I guess. Mr. HOLLAND, What percent do you think is being displaced by automation in the coal mines? Mr. KENNEDY. Going back to 1920, 23 had about 700,000 men employed in the mining industry, producing roughly about 400 million tons. Today we have about 225,000, producing, I believe, 550 millions of tons, so it has been more than cut in half since 1920. Mr. HOLLAND. Of these 65,000 men who are employed in the mines of Pennsylvania at the present time, how many of them are on partial employment? Mr. KENNEDY. Up until recently, Congressman, in the bituminous, they were working on an average of 3 days a week. There has been an increase in productivity in the last 6 months, so that, especially in the captives, we are now working, all of them, 5 days per week. In the anthracite it is averaging about 3 days a week. Mr. HOLLAND. In other words, there are a lot of people still getting no partial unemployment payments in addition to the work in the mines? Mr. KENNEDY. That is right. Mr. HOLLAND. They are carried in Pennsylvania as a member being employed? Mr. KENNEDY. That is right. Mr. HOLLAND. In the anthracite districts especially, due to the fact that they have such a scarcity of employment, our school districts in those communities are all distressed. Mr. KENNEDY. That is right. Mr. HOLLAND. In other words, they have to procure money from the State to carry on their schools. Mr. KENNEDY. That is correct. Mr. HOLLAND. That is bad, so bad in the district that they can't collect the taxes. Mr. KENNEDY. They couldn't raise any money even under this bill that is before your committee. Those communities couldn't raise it. Mr. HOLLAND. There is one other thing: Do you think it would be a good idea for the Government-we do a little bit for the farmers— why can't we subsidize the difference in freight rates so that the coal can be exported? Mr. KENNEDY. I don't see any reason in the world why we shouldn't. It would never hit the height of even 82 percent parity. Mr. HOLLAND. You wouldn't hit 82 percent? Mr. KENNEDY. No. It wouldn't even hit five. Mr. HOLLAND. I don't see why we can't do something to cut the cost of transporting it because it means more consuming power for the Americans over the long run than what we would spend în subsidizing. Is that correct? M. KENNEDY. That is right. If we take industry that we have at the present time and try to build it up and rehabilitate it, I think it is better for the American people and better for everybody. Mr. HOLLAND. There is another question: As you know, I was on the committee trying to get industry in Pennsylvania. I don't think the State could do it. It is too big a job alone. But with the Federal Government, some manufacturers who think about coming into the coal industry objected to the mines of slag that had been there and unsightly hillsides. Do you not think they would have to beautify the surroundings for some of those industries and we might get them in faster? Mr. KENNEDY. We are trying to do that now, Congressman, up through the fields. They are leveling off these banks and the State is supplying miles of trees to be planted in those waste areas up there. Mr. HOLLAND. Of course, that doesn't help your industry get on its feet by bringing in other industry. Mr. KENNEDY. No. I think in bringing in industry, they are more concerned about the profit angle than they are about anything else. Mr. MUMMA. The profit angle? Mr. KENNEDY. Yes rather than conditions of the countryside. Mr. MUMMA. I notice the Germans have two stripping machines. I saw them on TV the other day. They take 65 tons a bite. Have you seen those? Mr. KENNEDY. This new shovel of Pittsburgh Consolidated, opening up next week, I think it is the largest in the world. It is 65. Mr. HOLLAND. You should see the new drills. The CHAIRMAN. There is a call of the House. We will have to adjourn. We are very glad to have your contributions, Mr. Kennedy. Your views will be considered when the committee goes into executive session. Mr. KENNEDY. Thank you. (Whereupon at 12 noon, the committee adjourned, to reconvene at 10 a. m., Thursday, April 19, 1956.) AREA ASSISTANCE ACT OF 1956 THURSDAY, APRIL 19, 1956 HOUSE OF REPRESENTATIVES, COMMITTEE ON BANKING AND CURRENCY, The committee met at 10:20 a. m. Hon. Brent Spence (chairman) presiding. Present: Chairman Spence (presiding), and Messrs. Brown, Multer, O'Hara, Fountain, Ashley, Vanik, Talle, Betts, Mumma, McVey, and Nicholson. The CHAIRMAN. The committee will be in order. We will resume our hearings on H. R. 8555. Mr. Batt is the first witness. You may proceed as you please, Mr. Batt. If you have a written statement, you may read it without interruption and then subject yourself to interrogation, or proceed just as you please. STATEMENT OF WILLIAM L. BATT, JR., EXECUTIVE SECRETARY, TOLEDO INDUSTRIAL DEVELOPMENT COUNCIL, TOLEDO, OHIO Mr. BATT. Thank you, Mr. Chairman. I would like to talk from notes, if I may. First, Mr. Chairman, I would like to identify myself. I am William L. Batt, Jr., executive secretary of the Toledo Industrial Development Council, in Toledo, Ohio, although I understand that your committee asked me to testify, not in relation to Toledo, which is not, fortunately faced by this problem of chronic unemployment. For 5 years previous to going to Toledo I was special assistant to the Secretary of Labor, assigned to develop programs to help areas of heavy unemployment throughout the United States. I have written about the subject on a couple of occasions. I was for about 3 months assigned to the Randall Commission as senior economist, working on the problem of displaced workers as a result of import competition, and went to Toledo 2 years ago, because of their very serious problem of cyclical unemployment, due to the recession in the automotive industry in the years 1953 and 1954. Our problem there is a cyclical problem. It is not a chronic problem. I am happy to say that we have been able to be of some help. We have, through our Industrial Development Council, been influential in bringing about 6,750 new jobs into that area in the last 2 years. In the broader sense, of course Toledo is dependent upon a prosperous America, and I would like to say that this a very crucial subject you are attacking, and I am delighted to see the Congress taking it on. |