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The CHAIRMAN. What proportion of the population engages in mining coal?
Mr. HUGHES. I would say in that area more than 60 percent of the population are in the counties affected by coal. It is more than half. The CHAIRMAN. What percentage are now employed?
Mr. HUGHES. The percentage of our people now employed in the coal mining?
The CHAIRMAN. Yes; in the coal industry.
Mr. HUGHES. Of the people employed in the coal mines now it would be about 15 percent.
The CHAIRMAN. That are employed?
Mr. HUGHES. That is right. We have had a big drop.
As I stated here, in the State-these are State figures, but our area, which represents 40 percent of the State, it dropped from 85,000 in 1920 to 29,000 in 1950, then it dropped to 26,000, 21,000, 17,000, and down to 15,000, and we have about 40 percent of 15,000, which would be 6,000 or 7,000 of our people are coal miners in those coal-producing counties.
In the county where I was raised, Franklin County, there used to be 27 deep-shaft mines operating. As of today there are only 5. Mr. BROWN. Only 15 percent are employed now?
Mr. HUGHES. Fifteen percent of the people in the area.
Mr. BROWN. I understood you to say only 15 percent are employed now in the coal field region.
Mr. HUGHES. As coal miners. They have other employment. Our figures on unemployment show that we have in the area-getting back to exhibit No. 2-Franklin County has 3,800 men unemployed and these figures were furnished by the Illinois State Employment Service, and Franklin County has a population of 48,000, with 4,800 people unemployed. That means 10 percent of the total population, which would mean possibly 30 or 35 percent of the people who ordinarily are employable. If 10 percent of the total population are unemployed, say there is 1 employed person out of every 5, you see what it amounts to? It could go as high as 40 percent.
The CHAIRMAN. Are you high-cost producers of coal? Are you able to meet the competitive market?
Mr. HUGHES. No. There are two things working against us. One, we are deep-shaft mines, and the other one is that we have to depend entirely on rail freight, and rail freight has recently taken an advance as you know, 6 and 7 percent nationwide, and there has been some other things taken off that has caused the freight competition to work adversely to our interests. So the two things are hurting us very badly.
The CHAIRMAN. So you have been largely put out of the market by the cheaper production of coal, the cheaper access to the market? Mr. HUGHES. The two things have worked adversely in our case, you are right.
The CHAIRMAN. If the coal industry was up, you would be in pretty good shape, wouldn't you?
Mr. HUGHES. We would be in better shape than we are now, of course. the strip mines in the outer fringes, the coal has a tendency to outcrop as you go east and south, and the strip mines are working a little better than the deep-shaft mines, but our deep-shaft mines have a very high grade of hard bituminous coal. It has a very ready
market, and if we could compete equally, we would be all right, but we are having adverse competition of other people having canals, and even though their distance is much further, they can take markets that we would otherwise have, if we weren't landlocked.
As I make my plea I am not so much interested in shipping coal out as I am to burn this coal up in the coalfield to make those other 5,000 manufacturing jobs that I was talking about awhile ago. The CHAIRMAN. What are your railroad facilities?
Mr. HUGHES. We have wonderful railroads down there. We have 6 or 7 or possibly 8 of the major trunk lines of the Nation. We have wonderful railroads.
The CHAIRMAN. How much of that area borders the Ohio River? Mr. HUGHES. This area runs up the Ohio River about a hundred miles and across to the Mississippi about a hundred miles. It is almost a triangle.
The CHAIRMAN. Do you have water transportation there?
Mr. HUGHES. Wonderful. The best water transportation in the world, on both sides of our area, but we are landlocked, 75 miles over in the middle or 50 miles. The coalfield would start some 35 to 50 miles from the rivers, and in there is a great deposit of coal that will last for 1,000 years.
The CHAIRMAN. The coal mines are on the railroads, aren't they? Mr. HUGHES. That is quite true. We have the high freight rates and we can't compete with barge transportation. These big companies, four big companies that have looked us over on aluminum, Olin-Mathieson, Reynolds, Kaiser, Alcoa, I have been with 2 of them and the other 2 have been in there. They are looking for a place where there is coal, water in great quantities for generating electricity, and barge transportation. We just don't have that.
The CHAIRMAN. Where is the normal market for your coal?
Mr. HUGHES. The normal market was-the railroads used to take a big percentage of it. They don't take any any more. We ship coal to Chicago, St. Louis, up-State Illinois, and we are losing to those river generating plants all up the Missouri River and all up the Mississippi River, north; even the markets down in Florida have been lost to us because we can't ship coal and you can't ship any coal by import, because you can't ship coal across the Nation. You have to ship it down to Mobile and across that way. You still have a tremendous rail freight charge to get it down there.
The CHAIRMAN. All those railroads operate diesel engines?
The CHAIRMAN. All of them?
Mr. HUGHES. All of them, every one.
Mr. BROWN. The railroads do not take any of your coal now?
Mr. HUGHES. I wouldn't say any, because they do have a few switch. engines around. For the main lines, they actually switch. I saw them switching out of West Frankfort the other day with a diesel engine, switching coal.
The CHAIRMAN. They have done away with the roundhouse they used to have.
Mr. HUGHES. Yes, sir. They used to employ a great many people. Practically every railroad had a roundhouse that employed several people at high wages. They are all gone.
We have a very kind feeling toward the railroads, but we think that the time has come for us to protect the major interests, the material interests of the area rather than look out for the welfare of any par
Mr. BOLTON. Mr. Chairman?
The CHAIRMAN. Mr. Bolton.
Mr. BOLTON. You mentioned that the coal producing in your area is the hard bituminous coal, is that correct?
Mr. HUGHES. That is correct. It is high-grade bituminous coal. Mr. BOLTON. What type industries use that coal? What is it used specifically for; for furnaces? For heating?
Mr. HUGHES. It is wonderful for heating where they still use heating in the big towns. It is wonderful for electrical generation, and there is some manufacturing by blending. They use it in the cooking process, by blending.
Mr. BOLTON. It is my understanding the aluminum plants need water, cheap transportation for their bulk materials to come in, and thirdly, they need coal; is that correct?
Mr. HUGHES. That is correct. Then water for the generation of electricity, cooling of condensers.
Mr. BOLTON. Do they use that to generate electricity?
Mr. HUGHES. They use that to generate high-pressure steam, which turns the turbines. We can generate electricity with southern Illinois coal, we are actually doing it at 4 mills per kilowatt. Hydroelectric on the west coast, where there is transportation involved, can't compete with us. The coalfields of this area, Kentucky and West Virginia and Illinois and Indiana-the coalfields are coming back, and this industry is a great natural for them, because they can do such a good job producing aluminum where it is needed, not 3,000 miles away on the Pacific coast.
Mr. BOLTON. Your remarks about need for transportation, and transportation rate of coal interests me. We have the same problem in our area. I wondered whether you had tried in southern Illinois the same solution, which is the use of either a pipeline or of a continuous-flow operation, if you are only 50 or 75 miles from the water. This would seem a feasible suggestion.
Mr. HUGHES. We have thought of that. It seems to us since we need the water also that the canalization program-since the river has been declared navigable for more than 50 years-would be a simple little process, actually, to make it navigable. We would open up a whole bunch of seaports all through that area that has such a dense population. Those counties up there have forty to fifty thousand people in them. There is quite an accumulation; 250,00 people are up in this area I am talking about, a quarter of a million.
Mr. BOLTON. Actually either the belt or the pipeline could be produced and put in at a far less cost, couldn't it?
Mr. HUGHES. I haven't any figures on that.
Mr. BOLTON. I see. Thank you.
The CHAIRMAN. I believe I interrupted you. I didn't know you had an additional statement you wanted to make.
You may proceed.
Mr. HUGHES. I would speak to the point on this.
On page 2 you talk about the Federal assistance in line 6:
Should enable communities to achieve lasting improvements and enhance their domestic prosperity by establishing stable and diversified local economies and new opportunities.
My program is based on all that. I think that is very good. We approve that and applaud it.
Down here in section 101, line 16:
To make grants for technical assistance for such areas.
We are not too optimistic about that. Too frequently technical assistance furnished us is just a hometown boy: he becomes a specialist when he gets 50 miles from home. We are not very enthusiastic about that, but No. 2:
To provide financial assistance by loans, participations in loans
and so forth.
We like the idea there very much.
We could develop our timber further, our food-freezing and foodprocessing program, our coal utilization program. We would like to have this tie in with our university. We have one of the fastest growing universities at southern Illinois, at Cardondale, and they have technicians that know the area, lived there, and they could make contributions to the coal, chemical process, the fruit process, recreation, and even to housing for the aged. I understand there is something coming along that is in your thinking on that.
Now, over on page 4 you talk about when skills of the labor force in the area are certified, and so forth, and it talks about increasing the employability. I think I stressed that and expressed myself very forcibly on that.
Down in line 18, though, you talk about the Secretary of Health, Education, and Welfare, through the Commission of Education, may provide assistance.
I would like to change that word from "may" to "must." I think you people in Congress know that there is a feeling that sometimes your best intents are not served, especially if an administrator wants to be just a little bit reluctant or indifferent. I like for the Congress—I think they know what they are talking about and I like for them to say "must" directly, instead of "may" and "authorize."
On page 5 you talk about achieving a lasting improvement.
Now, I don't believe this bill has enough money in it to achieve a lasting improvement for, I think, 190 distressed area counties. I figured it up. It will amount to about $250,000 per county. If there is no loss in administration, and some of these single towns could do that. Now, that would be a great boost, but if I were you, I would press forward to spending more, if possible.
Now, in our area, this will serve to a good advantage because over on page 6 you talk about "rehabilitating existing structures."
We have coal mine buildings, railroad buildings, roundhouses that are no longer used that we might be able to put back into some usable form.
Over on page 8, this bill talks about planning grants for similar planning work.
Now, we have had all kinds of planning agencies and all kinds of studies made of the problems of southern Illinois. We get write-ups
like this in magazines. They usually stress the things that are wrong with us. There is about 75 or 80 percent of the things that are right with us. I wouldn't have you think that everything is wrong in southern Illinois. It isn't. A lot of things are right.
Mr. PATMAN. Mr. Hughes, would you yield for a question?
Mr. HUGHES. Yes.
Mr. PATMAN. You represent several areas known as distressed areas, do you not?
Mr. HUGHES. I represent an organization known as Southern Illinois, Inc. A nonprofit economic development organization for the lower counties of southern Illinois, and there are 16 counties that are actively associated with my organization.
Mr. PATMAN. Have you contacted the Small Business Administration for the purpose of ascertaining whether or not help could be provided through that organization?
Mr. HUGHES. Yes. Last summer we had a workshop in our office, and we had the Small Business Administration people there all the way from Washington, Chicago, and St. Louis down there, and we had about a 4- or 5-day workshop there and we called in all of the people in the area, and they expressed their problems, and those people were very sympathetic with them. Then we had the procurement people from some of the defense organizations of Air Force and Army and Navy, and so forth, and we tried to get some of those subcontracts down there. You know distressed areas, we were promised there would be a quick tax writeoff and there would be advantages of subcontracting material and we had qualified contractors there and we sort of beat our brains out on both the loans and the others and it just didn't add up.
Mr. PATMAN. You were just spinning your wheels?
Mr. HUGHES. That is a nice way to say it. I am a field advisor for Small Business Administration.
Mr. PATMAN. You didn't get anything?
Mr. HUGHES. Just a little trickle, and it takes so long to get it. It takes so long.
Mr. PATMAN. I want to invite your attention to the fact that the Small Business Administration has the power to take prime contracts. I think you should bring real pressure to bear on Small Business Administration to take a large prime contract for work that you can accomplish in one of these areas, and get the Small Business Administration to allocate it to the people in your area who can perform the work.
Now, that is possible under the law. They can do it. They have never taken one prime contract. I think the administration is vulnerable there.
Now, it is true that in order to get a prime contract they must negotiate with the Defense Department, but certainly the Defense Department would cooperate, and where it was shown that you had an area down there, an orgaization of small producers, who are capable of performing good work and turning out things that are needed in the Defense Department, I am sure that the Defense Departme would cooperate with Small Business Administration, and le Business Administration have that prime contract. Then it sublet.