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Mr. MULTER. There was unemployment in New York City in the needle trade industry at the time many of them moved over to your citv, wasn't there?
Mr. CROSBY. Well, there seemed to be a general exodus of many of the needle trades from New York City into one area or another. Now, whether we got them because of labor or wages. I don't know.
Mr. MULTER. Whatever the reason was, you will agree that the needle trades that moved into your city were not an expansion of existing plants in New York City but they moved the plants from New York City to your city?
Mr. CROSBY. That would be true in about, I would guess, perhaps half of the cases. The other half were only branches. They do have other plants in other localities.
Mr. MULTER. In other localities?
Mr. CROSBY. That is right.
Mr. MULTER. Outside of the city of New York?
Mr. CROSBY. That I don't know, how many of them are still in New York.
Mr. MULTER. Let's take a look for a moment at the shoe industry. Most of the factories that came into your city in the shoe industry came out of the New England States; isn't that so?
Mr. CROSBY. Yes, sir.
Mr. MULTER. There, too, it was not an expansion of the facilities in the New England States but they gave up their factories in the New England States and established in your city?
Mr. CROSBY. That is not true in all cases either.
Mr. MULTER. In the majority of cases?
Mr. CROSBY. In some of the better ones. We have lost, of coursewe lost I. Miller Shoe Co. because they consolidated and moved into one large operation in the metropolitan area.
The Andrew Geller Shoe Co., the lastest one, this is a branch known as the Geller-Penn. They manufacture under so many different names it is a difficult question to understand. The same company makes so many different brand names.
Mr. MULTER. You can see what I am driving at? Here we have unemployment in certain places. It was much worse in the New England States in the shoe industry than in the needle trades in New York City. Unemployment was much worse. Yet these factories picked up, moved out of one unemployment area into another. I don't mind your area improving its conditions, but I think we have got to be very careful that this bill is not going to be the instrumentality of using Government funds to help a company move out of one unemployment area into another, or if in moving into the unemployment area it is going to create unemployment in the area from which it moved.
Mr. CROSBY. Mr. Multer, perhaps that is true. Let's for instance, take the case of the Eberhard-Faber Pencil Co., our latest acquisition. They were located in about 16 different buildings down in Brooklyn, a tremendously high-cost operation. They can't build a 265,000-squarefoot building in Brooklyn and get it all on one floor. The only way they can get rid
Mr. MULTER. I am not ready to concede that.
Mr. CROSBY. The only way they can get rid of certain conditions is to move. We just lost Hazard-O'Cannit, principally because one of their largest customers was the anthracite mines and wire rope; second, the insulated cable division. Very little of that is used today. They consolidated and moved to North Brunswick, N. J. They did that to get rid of a high-cost operation which was no longer profitable to them; and industry moves.
Mr. MULTER. I can't see that there is anything that the Government can or should do to prevent private enterprise from moving from one place to another, to get a more economical or more profitable operation, but what I am concerned about with this bill-and I am in favor of the principle of the bill-but I am concerned that we should not get the Government into a position where it is going to help, with Government funds, private industry to do those things that we have just indicated. I am not ready to concede that the pencil company couldn't have done just as good a job in New York City or in Brooklyn, where they were. There are plenty of places around New York City and in New York City where they could have done just as good a job if there weren't other considerations, profitwise and economywise, that caused them to move away from the city of New York; but just as I wouldn't want the Federal Government or any other government to step in and say, "You, Mr. Private Industry, can't move at your own expense because you want to move," at the same time I don't want to put the Government in the position to say to any private industry, "We are going to help or subsidize you or give you aid of any kind to move from one area to another, when the result is going to be slight improvement in one area to the detriment of the area from which you are moving." I think you will in principle agree with that.
Mr. CROSBY. Yes, sir; I would. We do not have too many of those cases. Many of the new industries-of the five that we got last year, only one really picked up its roots and moved. That was EberhardFaber. The rest were all expansion-Foster-Wheeler, and such as that.
The CHAIRMAN. Have you solicited those people to come?
Mr. CROSBY. Yes, sir. We are around sitting on the front doors of presidents' offices all the time.
The CHAIRMAN. And offered them inducements to come?
Mr. CROSBY. Yes, sir; tried to point out to them the real advantages. I think there have been many industries that have wanted to get out of the so-called metropolitan areas and get away from, as they put it, target areas.
Mr. MULTER. The newspapers gave considerable attention
Mr. CROSBY. We may have our trouble with those coal strippings, sir.
Mr. MULTER. The newspapers gave considerable attention only 2 weeks ago to the fact that the Governor of West Virginia went up to Connecticut, over the protest of the Governor of Connecticut, in order to induce some of the industries there to move down to West Virginia. West Virginia needs help, but Connecticut also needs help, and he goes into an area which is already depressed and tries to take some industry out of there and further depress it.
Mr. CROSBY. Most of your leads come from industries that are going to move somewhere. Eberhard-Faber had definitely made up its mind to go south, and something happened that we don't know about, so they came back into our area. We worked on them for 2 years. They were going to go somewhere, so naturally we were going to try to get them or any other industry that is going to go somewhere-we are going to try to get them.
Mr. MULTER. I don't blame you for it.
Thank you, Mr. Chairman.
The CHAIRMAN If there are no further questions, we will adjourn. I believe we have received some requests for filing statements in the record, Mr. Clerk?
The CLERK. Yes, sir, Mr. Chairman, the American Municipal Association, the American Paper and Pulp Association, the Ohio Chamber of Commerce, and the Rosiclare Community Development Association have requested permission to file statements on the bill. The CHAIRMAN. Without objection, they may be filed.
(The statements follow :)
STATEMENT OF AMERICAN MUNICIPAL ASSOCIATION
To the Congress of the United States:
One behalf of the municipal officials whose names appear below, the American Municipal Association urges legislation which will speed up the redevelopment of communities that suffer from chronic unemployment.
Persistent and substantial unemployment causes hardships to individuals and to the entire community. Unemployment weakens the economic base of the community and consequently reduces the financial ability of the area to cope with its problems. City officials in these communities find it increasingly difficult to provide an adequate level of education and a host of other municipal services. Unemployment also brings with it increased demands for social services, such as relief and welfare, which the community finds it difficult to supply.
City officials are aware of their responsibilities and are pledged to continue to do all in their power to redevelop their communities. The causes of unemployed, however, are very complex and often national in scope. Changes in national tastes, depletion of local natural resources and technological changes are all factors in the decline of employment in these areas. What is needed is a many sided attack on the problem. There must be neighborly cooperation between all levels of government and private industry. Each must act without unnecessary interference with the other.
Because of the effects on the national economy of areas of chronic unemployment, the Federal Government has a responsibility to help these communities help themselves. Present Federal technical assistance, loans, and aid to community planning must be increased. Programs to provide aid to private business in these areas must also be expanded.
All levels of government, as well as the citizens in these areas, have a large stake in a program of redevelopment. We urge the quickest possible action to help solve the problems of chronic unemployment areas.
Mayor Litz McGuire, Logan, W. Va.; Mayor R. T. Hicks, Jellico, Tenn.;
The Honorable BRENT SPENCE,
AMERICAN PAPER AND PULP ASSOCIATION,
Chairman, Banking and Currency Committee,
The House of Representatives, Washington, D. C.
DEAR MR. SPENCE: We are submitting this letter to the Committee on Banking and Currency of the House of Representatives, in lieu of personal appearance. The American Paper and Pulp Association is the overall national association for the pulp and paper industry, America's fifth largest industry. We are vitally concerned with H. R. 8555, the so-called Area Assistance Act of 1956 which is now pending before the Committee on Banking and Currency, and particularly with the implications of this proposed act.
As a result of careful study of H. R. 8555, we can only conclude that this bill as presently drafted, or as it might conceivably be redrafted, would be designed primarily to create another governmental agency which would be authorized to put the Federal Government into competition with private business through the guise of loans or outright grants. Our industry and indeed all industry today is embarked upon heavy capital investment programs which are designed to increase production of products and bring about efficiency of operation and which, incidentally, are providing tremendous vehicles for increasing employment of workers.
We are opposed to any legislation which has as its purpose the placing of the Federal Government in a position where it, for all practical purposes, will be operating business in competition with private enterprise. Where there is a legitimate need for the construction of a plant or a factory, private capital is not lacking, nor indeed a desire on the part of private industry to establish a plant or factory in that area. There are many examples also of where local communities have by cooperative effort on the part of industry, labor, and the public been able to attract new industry into temporarily economically depressed areas. Municipal governments frequently have cooperated with such private enterprise efforts by providing tax relief and other legitimate inducements at a local level.
We therefore respectfully request the Committee on Banking and Currency to act adversely and vote not to report H. R. 8555 in its present or any amended form, or any legislation of similar intendment.
We also request that this letter be made a part of the record of the hearing on this legislation.
Very truly yours,
E. W. TINKER, Executive Secretary.
STATEMENT OF CHARLES H. SLAYMAN, CRAGIN, LANG, FREE & Co., CLEVELAND, OHIO, AND CHAIRMAN, INDUSTRIAL DEVELOPMENT COMMITTEE OF THE OHIO CHAMBER OF COMMERCE, REPRESENTING THE OHIO CHAMBER OF COMMERCE, COLUMBUS, OHIO My name is Charles H. Slayman. I am most happy and privileged to have the opportunity to present to this committee my views in its consideration of H. R. 8555, Spence, of Kentucky (S. 2892 and companion bills in the House), because it is of extreme importance not only to my State of Ohio but because it challenges the established economic procedures that have progressed at such a splendid rate and which have kept the United States in the world's forefront in industrial expansion and production of manufactured products.
By way of identification, I am an associate of the real estate firm of Cragin, Lang, Free & Co., of Cleveland, Ohio-an organization that has been engaged in the industrial and commercial real estate business in Cleveland since 1867.
I submit this statement as a representative of the Ohio Chamber of Commerce, whose 5,000 corporate members constitute the largest organization representing business in Ohio. I am a member of the chamber, and have been a member of its industrial development committee for more than 15 years, and am committee chairman at the present time.
For the record, I have been engaged actively in the industrial development field for more than 25 years. During this time, I was industrial commissioner of the Pere Marquette Railway until that railroad was merged with the Chesapeake & Ohio Railway Co. At that time, I was named general industrial commissioner of the whole Chesapeake & Ohio system, a position I held until 1951 when I joined with Cragin, Lang, Free & Co.
I have been a member of the American Industrial Development Council for more than 25 years and helped found its regional counterpart, the Great Lakes States Industrial Development Council, serving as its first president. During my term of service with the Chesapeake & Ohio, I was a member of the American Railway Development Association, serving as president of that organization in 1946 and 1947, and since have been elected to honorary life membership. Presently, I am a member of the Society of Industrial Realtors, a national organization whose members collectively handle most of industrial plant sales and leases throughout the country.
It generally is agreed in industrial location circles that industry is anxious, eager, and willing to locate in a community where it can be happy, can prosper, live, and possibly expand.
Industry carries on a continual search for communities which have what they consider a favorable climate in which to live and do business. Industry wants, and has shown a strong desire to locate in smaller communities-communities that can provide facilities, services, and a friendly, considerate, and cooperative atmosphere in which it can thrive. It is a fact not generally accepted or even known by many, not directly engaged in the industrial development field, that industry is seeking a location in the right town--it could be yours-just as much as your community is seeking to attract that industry.
Reputable industry, by past performances, has shown that it is willing, anxious, and shares the resultant burdens brought about by its entrance in the community, such as new schools, sewerage, highways and streets, water, fire and police protection, recreation, churches, etc., through taxes, assessments contributions, and in other ways, provided a favorable business climate exists and is maintained. The industrial development field is highly competitive between areas and States as well as between communities within these areas and States. In other words, neighbors as well as strangers vie for new industries and the resultant additional employment and tax revenue.
It also is my experience that obtaining sufficient funds to finance a building has been the simplest part in influencing a new and reliable industry to locate