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Mr. Chairman, in order to keep this testimony as brief as possible, I shall not review other Government policies which we feel are responsible for economic displacement-temporary or otherwise. The fact is that we are living in an era of international unrest. Our guard is going to have to be kept up until the free world has been able to stomp out all of the incendiary actions set off by the Kremlin, or at least until the Red forces have been driven back into their post-World War confines. This readiness program requires industrial flexibility that is not common to normal peacetime progress. Our mobilization base requirements place demands upon industrial capacity and manpower that could otherwise be left to self-adjustment. Our vital industries must be in a state of alert at all times. To maintain this standard may involve heavy investments on the part of our national Government; such investments, however, will constitute but a very small proportion of the overall cost necessary to safeguard our freedom. I believe that the most economical method of providing the employment necessary to take up the lag in distressed areas is through matching funds. I hope that such a plan will be recommended by this subcommittee and eventually adopted by the Congess. My State of Pennsylvania has already authorized the expenditure of $5 million for assisting distress areas, and the Federal Government should implement additional financial help to our States and communities.

In conclusion, Mr. Chairman, let me refer back to my opening statement in which I stated that the proposed legislation is vital to both the physical and mental well-being of our people. The first instance needs no explanation. Our families cannot have physical strength without proper nourishment; proper nourishment is impossible unless there is adequate family income. Mental comfort and health are impossible if one must constantly work about insecure employment conditions. Business is better in western Pennsylvania today than it has been since the decline of the postwar industrial activity first set in. Nevertheless, we still have hundreds and hundreds of unemployed persons in our midst. Distressed area legislation will make it possible for them to return to work. In addition, it will set up the machinery to provide assurance for those families who cannot forget the periodic recessions that have caused so much discomfiture in their homes in the past years. The machinery installed by this legislation will offer new hope for these people who will find solace and security in the knowledge that this machinery is there, ready to operate, and with the capacity to be speeded up to absorb surplus labor whenever the situation calls for such action.

Thank you Mr. Chairman, for giving me the opportunity to testify here this morning. I cannot emphasize too strongly that this legislation is badly needed in my district and similar pocket areas throughout the United States. It is my honest hope that this committee will provide a piece of legislation that meets the criteria so that my district and others can again be revitalized.

The CHAIRMAN. We thank you for your contribution. You have made a very excellent statement. If there are no questions, call the next witness.

The CLERK. The next witness is Hon. James E. Van Zandt, Representative of Pennsylvania.


Mr. VAN ZANDT. Mr. Chairman and members of the committee, it is a pleasure to have the opportunity of appearing before this committee in support of legislation to provide Federal assistance to depressed areas. As you probably know, over a period of years I have sponsored legislation on this subject. However, today I am appearing in support of my bill, H. R. 8223, which I introduced on January 9, of this year.

In my opinion, H. R. 8223 is an improvement over the bills introduced previously in the 83d Congress and during the 1st session of this Congress.

H. R. 8223 is a bill to assist areas to develop and maintain stable and diversified economies by a program of financial and technical assistance and for other purposes. In a few words, the bill provides a $50 million revolving fund for making loans in areas of substantial and persistent unemployment for industrial-development projects worked out on a local level and approved by the State.

The loans would be used for (a) preparing land for industrial use, (b) constructing new factories, (c) and modernizing old factories. In addition, a fund of $12 million would be authorized to provide technical assistance, including studies evaluating the needs of and developing potentialities for economic growth in such areas.

My interest in legislation of this type stems from the fact that I represent a congressional district in Pennsylvania whose economy is dependent upon the coal and railroad industries. Years ago substitute fuels and modernization of railroads gave indications that unemployment would result in those two basic industries. World War II and the Korean war simply postponed the day of reckoning. However, following World War II and until the Korean conflict, unemployment became a vexing problem with the Korean war absorbing the unemployed until a truce was declared.

Since the end of the Korean war, the stark specter of unemployment again began to rear its ugly head and for a period of over several years 18 percent of our employables were unemployed with the result that the United States Department of Labor classified my congressional district in group 4-B because of having a very substantial labor surplus. This condition brought hardship and suffering to thousands of good Americans.

During the period when my congressional district was classified in group 4-B, thousands of my constituents were forced to exist on unemployment insurance, and when their eligibility for such benefits expired they were compelled to rely on public assistance. To supplement the small benefits received through the public-assistance program, thousands of them received surplus commodities, and it may be of interest to you to know that at one time nearly 30 percent of the residents of my congressional district were eligible to receive surplus food. Words are inadequate to explain the hardship and suffering caused by this unemployment.

Mr. Chairman, I am happy to report that we have experienced a marked recovery in my congressional district to the extent that unemployment varies between 6 and 8 percent of our employables. This


unemployment can mostly be found in one of my counties whose basic industry is coal. It truly represents a pocket of unemployment that is distressing in its effects.

At the present time, over 36,000 of the residents of this particular county or about 40 percent of the total population are eligible and are receiving surplus commodities. This is truly a blighted area that is in need of the assistance that would be provided under my bill, H. R.


While there are smaller areas in my congressional district that represent pockets of unemployment, yet I want you to know that every single community in my congressional district faced with unemployment organized, some years ago with my assistance, an industrial development committee.

These committees were financed by the local citizens who, in addition to cash contributions, gave freely of their time and effort to bring new industries to their communities as a means of providing employ


These industrial development committees have been instrumental not only in attracting new industries to my congressional district but by their activities and their faith in the future have created an atmosphere of hope and confidence with the result that in the last 2 years existing and new industries have increased the industrial capital investment in that area by over $100 million. These industrial development committees are to be commended for the leadership they have provided in trying to solve the unemployment problem.

While not all of the communities have been successful, we can point with pride to the fact that hundreds of new jobs, have been created in the central Pennsylvania area through community effort.

Outstanding in the effort is the city of Altoona, Pa., where through the Altoona Enterprises, Inc., a subsidiary of the Altoona Chamber of Commerce, to date 10 new industries have been secured representing employment for 3,500 persons with an increased annual payroll for the area of approximately $15 million.

The $750,000 contributed by Altoona residents to finance this effort represents contributions on the part of a cross section of Altoona's population. In addition, it was necessary to borrow funds from the local banks. At this moment, the Altoona group has exhausted its borrowing capacity and this is a specific instance where my bill, H. R. 8223, will be of assistance.

Besides praising Altoona, Pa., I should like also to commend Curwensville, Coalport, Clearfield, Du Bois, Tyrone, Philipsburg, Martinsburg, and Houtzdale, because these communities are also pulling themselves up by their own bootstraps.

Even though the unemployment situation has improved, we still have pockets of unemployment that cannot be ignored; hence, we have a long, hard road ahead of us to build a stable and diversified economy capable of meeting the menace of unemployment.

Mr. Chairman, our experience in the central Pennsylvania area has convinced us that we cannot do this job alone. If we are going to lick these little depressions that stem from pockets of unemployment, we need State and Federal assistance in coordinating our efforts.

Already the Commonwealth of Pennsylvania has enacted a $5 million industrial-development program to aid communities in their efforts to attract industry. All that is left to be done is for Congress

to implement the State action by enacting my bill, H. R. 8223, which will provide Federal assistance to distressed areas.

Mr. Chairman, the people whom I represent are good Americans, thousands of whom have suffered as the result of distress in the coal and railroad industries. Modern-day progress in these two industries brought about this distress. By the facts that I have given you, my constituents without Federal or State financial aid have given of their own money as well as of their own time and effort to lick this economic problem. As I have stated, some progress has been made down the long hard road, but they need a helping hand to attain their objective.

Mr. Chairman, in concluding this statement and speaking for the people of my congressional district, if this Congress will enact a program similar to the program contained in my bill, H. R. 8223, I am confident that economic stability will be restored to the blighted areas of my congressional district and these little depressions resulting from pockets of unemployment will be a thing of the past. Thank you, Mr. Chairman.

The CHAIRMAN. That was a fine statement, Mr. Van Zandt. I am sure it will be considered by the committee.

Mr. McVEY. Mr. Chairman, may I ask a question?

The CHAIRMAN. Mr. McVey.

Mr. McVEY. I would like to ask one question of Mr. Van Zandt. I am very much interested in your statement. What is the difference between your bill and H. R. 8555, which we are considering?

Mr. VAN ZANDT. I think it is similar. If my memory serves me correctly, the chairman informed me once that he had introduced the administration bill, as I did.

Mr. MCVEY. How much money is provided in your bill?
Mr. VAN ZANDT. The same amount; I think $50 million.

Mr. McVEY. Thank you.

The CHAIRMAN. We thank you very much, Mr. Van Zandt.
Mr. VAN ZANDT. Thank you.

The CHAIRMAN. Call the next witness, Mr. Clerk.

The CLERK. The next witness, Mr. Chairman, is the Honorable Carl Perkins, Representative from Kentucky.

The CHAIRMAN. We are glad to have your views.


Mr. PERKINS. Mr. Chairman, members of the committee, the Seventh Congressional District, perhaps since 1953, has been one of the worst depressed areas of the whole country. The economy there primarily is dependent upon the welfare of the coal industry, and during the year of 1953, approximately one-third of the mine operations in the whole area closed down completely. I know that is difficult to visualize, since the Government is spending so much money for defense


One-third of the coal miners in eastern Kentucky are still unemployed, and the district that I represent happens to be a district that produces some of the best metallurgical coal in the whole world, and we have not only the best metallurgical coal, but any types and all grades of coal are prevalent in that area, particularly steam coal.

Now, this area, the whole area in eastern Kentucky, was classified by the Department of Labor in July 1953 as a critical and distressed


We tried to get some assistance, get some concessions from the Government through the coal-purchase program, and I think we got some orders to the extent of about a couple of millions-the entire State of Kentucky-to try to help alleviate this condition, but it is the responsibility of the Government to provide legislation to help these depressed areas, such as the eastern Kentucky area, and that is the reason I appear there this morning in support of this legislation.


Now, the bill that I introduced goes considerably further than the bill you are conducting hearings on. In fact, I introduced a bill very similar to the Douglas bill, because I believe that it is going to take some real aggressive action on the part of the Government if we are going to do something for these critical areas. I know that many of the utilities on the eastern seaboard that used to purchase our coal purchased the residual oil from Venezuela, and it was more or less just a dumping program, because they could always buy this black waste oil cheaper than they could buy coal. They brought it into the ports on the eastern seaboard in foreign-flag vesssls most of the time and it was so unrestricted that it certainly interfered with the coal production all over the country.

Be that as it may, where we have these areas that are depressed and are solely one-economy communities, every effort should be made to alleviate those conditions, to make those communities and areas attractive for other industry, and I feel that the legislation, although I don't think it goes far enough, just furnishing some money for technical assistance and know-how; so far so good, but I believe that the Congress should go further in these areas where we are handicapped from lack of improved navigational facilities, and industry will prefer not to come into the area because of the lack of modern facilities and conveniences, and lack of a good highway system, that the Congress should begin to move and not let these areas suffer and continue to suffer by the lack of initiative on their part.

That is just what has happened in the area that I am privileged to represent. I have the unemployment figures here to show you. We have one of the highest insured unemployment rates, and have had, in the Nation, to back up the statement I have just made.

It is a great pleasure for me to come here and ask the committee to report out a bill at the earliest possible date in order that we might do something for these critical areas. The legislation is long overdue, and I for one intend to enthusiastically support the best type of legislation to give some results to these distressed areas.

Mr. Chairman, with your permission, I want to ask unanimous consent that I insert in the record a prepared statement in lieu of the remarks and observations that I have just made.

The CHAIRMAN. We are very glad to have your views, Mr. Perkins. (The statement follows:)


The Nation's economy continues at a high level with a produc rate approaching an alltime record of $400 billion a year. The ov

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