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The difficulties of areas of critical economic distress are really the fruits of neglect. In particular, they are the fruits of our Nation's failure to make adequate and continuous provision for the growth and maintenance, among the local communities comprising it, of capacity to cope with emerging area problems. The weaknesses to which the troubles trace are usually an unintended result of the centralization of business control and the centralization of government activities during the past several decades.

These forces have served to tear up the roots from which once grew the selfreliant attitudes and the associated capacity to cope with the merging community problems for which American communities have been distinguished.

The difficulties came because comparatively little was done to make up for what was being destroyed. Progessive withering of capacity at the local level to initiate and carry out adequate programs for coping with local problems has been the result.

With this quote as a background and using the Wilkes-Barre situation as a criterion, I believe that the most valuable assistance that the Federal Government could give to an area such as ours would be that after a community had demonstrated its willingness to try to help themselves to the best of their ability in creating a community enterprise such as our industrial fund, or call it what you will, be it a creation by the citizens themselves to do something for themselves, the Federal Government could loan up to 25 percent of the aggregate cost, up to 20 years for (1) erecting industrial buildings, (2) renovating industrial buildings, and (3) preparing industrial land.

I believe that a program such as outlined in H. R. 8555 would do more to ease the financial burden which a depressed area must face than almost any other device.

To those of us who are engaged in industrial development work and have the responsibility of obtaining satisfactory financing for either new or the expansion of established industries, the problem of second mortgage money is always the greatest stumbling block. Usually it must come from free money that has been contributed by the citizens; however, there is a limit to the amount of free money that is available. A community can only contribute so much, and when this is exhausted, there is just no place to go for much-needed help. House bill H. R. 8555 would be of invaluable aid in helping distressed areas in their efforts to get new industries and would help to alleviate the problem of securing second-position money.

The other provisions of this bill are, in my opinion, practical and would be of great help to chronic distressed areas. May I emphasize again there should always be the first condition that the community or the area should have first demonstrated its willingness to do something for itself.

The CHAIRMAN. What has the city of Wilkes-Barre, the municipality, done to secure industries?

Mr. CROSBY. You mean the city as a city?

The CHAIRMAN. I say, what has the city itself been able to do to secure industries? Has it been willing to exempt new industries from property taxes for a period of 5 years to get them to come in there? Can it do that?

Mr. CROSBY. Yes. The city of Wilkes-Barre has been most cooperative in every respect.

The CHAIRMAN. I know in some municipalities in my State they are limited as to tax rate, indebtedness, and limited to expenditures. They can't expend more than the revenues of the year. Are your cities tied up in that way?

Mr. CROSBY. No.

The CHAIRMAN. They have no constitutional limitation?
Mr. CROSBY. No.

The CHAIRMAN. They can exempt new industries as an inducement?

Mr. CROSBY. They can, but they have not.

The CHAIRMAN. How long can they exempt them from taxation, for what period?

Mr. CROSBY. That I don't know, sir.

The CHAIRMAN. You know they have been willing to do that? Mr. CROSBY. They have been willing, but they have not done it. We have not requested them to do it. Let us put it that way.

Mr. BROWN. I want to congratulate you on the fine statement, and the willingness of your people to help in your community. Mr. CROSBY. Thank you, sir.

The CHAIRMAN. The funds you speak of having collected, are they merely private contributions?

Mr. CROSBY. Voluntary contributions through drives put on by the fund which, through 1952, we raised some $652,000, and our last one last year we raised $745,000.

The CHAIRMAN. It speaks well for the public spirit of your citizens. Are there any questions?

Mr. MUMMA. I would like to join in, Mr. Chairman, in saying that I thought it was a very fine statement. It bears out that I think the communities in Pennsylvania have gone ahead and not waited for Government support.

You agree that this bill is generally all right?

Mr. CROSBY. For our particular needs, I do, yes, sir. We have advanced much further than many other communities, perhaps. The CHAIRMAN. This bill provides, as a condition precedent to getting a loan from the Federal Government, that the local community must furnish 15 percent of the cost of the improvement. Do you think that would retard the operation of the law?

Mr. CROSBY. That, sir, has not been our experience. We are more inclined to believe that the community should contribute or make some contribution to it.

The CHAIRMAN. Do you think it should contribute to that expense? For instance, there is a million dollars to be invested. The corporation needs a million dollars. It can get $250,000 as a loan from the Federal Goverunment, on the condition that it obtain $150,000 locally. Do you think that is a proper balance?

Mr. CROSBY. Yes, sir, I do.

The CHAIRMAN. Your community is rather a rich community, isn't it, ordinarily?

Mr. CROSBY. Well, we have had tremendous unemployment, but I think that you have to review, sir, more of the history. We did lose our textile industry. There is no question about it, but in their place this all started back in 1934 when the textile industry started to go South, but in their place started to bring in the needle trades, so that while we do have tremendous male unemployment, it does not mean that there are that many families without income, because the wives and daughters are working in the needle industry.

For instance, in the Duplin Silk mill in Hazleton, McGregor Sportswear, we bought that with the help of the fund. We purchased the

building and McGregor now occupies it. Leslie Fashions is there. We are rapidly becoming a shoe center of the shoe industry. We have many shoe industries that are now established in Wilkes-Barre.

Gradually that slack we picked up, but the problem we had was that whenever we get the most discouraging part-we get a new industry that may employ 300 men and the next day, due to high cost mining or something, the coal industry may close a coal collery and 400 are out of work. However, it has been our experience, with industries that have come in that they are very well satisfied with the labor, and they find that they can adapt themselves very readily and are very highly productive.

The CHAIRMAN. How large a town is Wilkes-Barre?

Mr. CROSBY. 76,000, but you just cross one street to another when you go to another community, so that within 9 miles there is 250,000 people.

The CHAIRMAN. They cooperate, the municipalities?

Mr. CROSBY. Yes, sir. We showed that in the vocational training program. We realized at the start of this industrial development. In fact, we had lost industries because we did not have an adequate vocational training program that would guarantee industry a trained supply of workers, so our first job, as I outlined in here, was to get the 15, what we call westside boroughs, the school boards of those boroughs to go together to form the Wyoming Valley Technical Institute, to train workers so we could say to industry, "We have the facilities to train the people you need in specialized training, whether it be welding, light welding, brazing, whatever you need." We would train the workers for them.

The CHAIRMAN. The community organization represents the whole community?

Mr. CROSBY. That is right.

We do not confine our efforts to Wilkes-Barre. For instance, in Kingston, across the river, we have established 3 new plants, 2 in Nanticoke, which is 8 miles from Wilkes-Barre. We do not confine it. The greater Wilkes-Barre Industrial Fund does not confine its efforts to Wilkes-Barre alone. It takes in the entire Wilkes-Barre

area.

The CHAIRMAN. Are there any questions?

Mr. MUMMA. I want to ask one question.

Do the coal companies contribute to this industrial fund?

Mr. CROSBY. Yes, sir, they do.

Mr. MUMMA. They are back of it?

Mr. CROSBY. Yes, sir, very definitely. They have all contributed very well, the largest one being Glen Alden, who has always come in with the largest contribution.

Mr. MUMMA. I understood-Mr. Fox told me that there was a developing market for small sizes in connection with the coke; that they mix the hard coal with the soft coal and it increases the efficiency of the blast furnace.

Mr. CROSBY. That is correct, sir. It does that, and it also eliminates the smoke, or part of the smoke nuisance which, as you know, this occupational disease and such as that is rapidly coming to the front nationwide.

Mr. MUMMA. Where is your 1,500 acres, over on the west side?

Mr. CROSBY. No, at Mountain Town. It is up on the central part of Mountain Town. We have the Scranton-Springbrook water supply, and the Pennsylvania Power and Light.

Mr. MUMMA. Thank you.

Mr. MULTER. Mr. Chairman.
The CHAIRMAN. Mr. Multer.

Mr. MULTER. What was the maximum percentage of unemployment in your city in the last 10 years?

Mr. CROSBY. I really don't know that figure, sir. As of January 15 it was 12.6 percent.

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Mr. MULTER. How much higher was it?

Mr. CROSBY. I think it ranged from 10 to 15 percent over the past years. That would be a guess. But it would be close.

Mr. MULTER. Your city is still listed among the highest unemployment areas in the country; is that correct?

Mr. CROSBY. That is true.

The CHAIRMAN. What is the unemployment there at the present time?

Mr. CROSBY. About 12.6 percent of the total available force.
Mr. MUMMA. Does that include everything?

Mr. CROSBY. Yes, sir, that is the Wyoming Valley: Exeter, Wyoming, the various boroughs.

The CHAIRMAN. Is a large part of that due to coal mining?
Mr. CROSBY. Yes, sir.

The CHAIRMAN. What percentage is due to that?

Mr. CROSBY. Nearly all of it. Nearly all of it.

The CHAIRMAN. That is due to the improved machinery?

Mr. CROSBY. Not so much, sir, in anthracite. I heard the statement made by these gentlemen from the bituminous area, but you see, anthracite is a hard coal and for that reason you cannot use all of the mechanization that you can apply to bituminous-coal mining. Anthracite production is only around 234 tons per man per day.

The CHAIRMAN. Then what is the reason that you have unemployment?

Mr. CROSBY. Loss in markets and high-cost mining, I would say, are your two chief reasons. In other words, there has not been much incentive for the development of mines in the past 10 years, as you know. They have been losing to competitors. That statement that Mr. Fox made to this gentleman over here, it is true that the smaller stem sizes are now begining to take a larger part of the industrial business.

The CHAIRMAN. Has the use of anthracite increased?

Mr. CROSBY. Anthracite was primarily a household fuel and not used very much in industry. For the reasons that we have just cited here, that it does away with a part of your smoke nuisance, it is becoming more rapidly accepted by industry, but still the major market was household heating.

The CHAIRMAN. Has production of anthracite decreased?

Mr. CROSBY. It decreased up until last year when it went up slightly. I don't know the exact figures.

The CHAIRMAN. The same causes haven't produced unemployment in the anthracite region that there have been in the bituminous region? Mr. CROSBY. The anthracite region, the primary reason for unem

ployment is, as I say, your inroads made by competitive fuels. You are in a pushbutton region. Anthracite had the adavntage of a product going in and coming out.

The CHAIRMAN. What advantages are there in anthracite?

Mr. CROSBY. Other than some improvements in the mechanization of anthracite, the problem with anthracite was the improvements in the burning of it, improvements in the equipment in which it was used. It is like the gasoline industry without the automobiles or improvements in them. The gasoline industry wouldn't amount to much in that case. It was improvement in the equipment for burning of anthracite to make it easier and more convenient for the consumer to use it. That is where they have spent, I would say, the greater part of their research.

The CHAIRMAN. The production of anthracite by each individual miner has not increased as it has in the bituminous coal?

Mr. CROSBY. No, sir, not through mechanization. It has not.
The CHAIRMAN. Mr. Multer?

Mr. MULTER. What is the usual situation in your State; are most of the industries unionized?

Mr. CROSBY. Yes, sir; and despite the fact that we have had a very bad labor reputation, the facts do not bear that out. Our labor relations have been very good. In fact, we may have labor representation-the president of the CIO is on the board of directors of the Greater Wilkes-Barre Industrial Fund, president of the AFL is on the board of directors of the Chamber of Commerce, the president of the Electrical Workers is on the board of directors of the Committee of 100, and we have wonderful tie-in with labor in both securing new industries-in fact, labor has accompanied us on many occasions when we visited and tried to interest industries in coming into our area. Mr. MULTER. When the needle trades came into Wilkes-Barre, where did they come from in the main?

Mr. CROSBY. I don't know as I could point out any particular spot they came from. They came from all over.

Mr. MULTER. Didn't most of them come out of New York City? Mr. CROSBY. Some did; yes. I would say the majority of them did. Mr. MULTER. Was the wage rate paid to the needle trades in your city less than they were getting in New York?

Mr. CROSBY. I don't believe so. I don't believe so, because in working out with the unions, let me say this to qualify that, in working out with the unions the wage rates for different industries, for instance, if let's put it this way: We had a prospect some time ago, engaged in the manufacture of kitchen equipment. We didn't have any such union in our area, so we take the wage rates that are paid in Philadelphia, and Pittsburgh, and use that as the wage rate that would be paid for that particular work in Wilkes-Barre.

Mr. MULTER. What was the main advantage held out for them to leave New York City to come to your city?

Mr. CROSBY. Because of employment, because we had such a tremendous number of unemployed women who were skilled.

Mr. MULTER. Wasn't it actually the difference in wage scale?
Mr. CROSBY. That I don't know.

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