picture is bright, but numerous areas and industries are not receiving an equitable share of the Nation's prosperity. Even that great motor metropolis of Detroit is suffering from a serious unemployment problem. The conditions in New England textile areas are critical and the coal industry has shown only a slight recovery from the depression levels of 1953. In my own State of Kentucky, which as a whole has shown a tremendous industrial growth during the past 5 years, we find the 35 eastern Kentucky counties, comprising the major coal region of the State, experiencing a disastrous drop in industrial activity. The number of workers covered by Kentucky's jobless-insurance law increased approximately 9 percent from 1950 to 1955, but the number of miners employed in these 35 eastern Kentucky counties dropped from 47,000 to 25,000 during the same period. In fact, the total number of workers covered by the State unemployment-insurance program in these 35 counties dropped from 85,000 to 66,500 between 1950 and 1955. During the same period the total wages paid in this area dropped from $60 million to $512 million. The population of these 35 counties dropped from 900,000 to 770,000 during this period. Thousands of persons are leaving the area each year searching for employment. The outmigration from Pike, Floyd, Perry, Bell, and Letcher Counties has been more than 1,000 a year each since 1940. In Pike County, which now has a population of approximately 75,000, at least 1 family in each 5 has left the county since 1940. The major portion of this outmigration has been to northern industrial centers such as Detroit. A drop in employment such as Detroit is now experiencing adds to the depression problems of eastern Kentucky. Many of Detroit's unemployed cannot profitably go south for either winter or summer as south to them means eastern Kentucky, where job opportunities are at their lowest ebb since the early 1930's. I use this eastern Kentucky area as an example of the problem faced in many other areas whether they be in New England, Pennsylvania, Illinois, Wyoming, or any other section of the country. They are victims of the postwar boom, forced to meet the higher cost of living with a lower income. Many of the boom areas have been made by Government-sponsored activities and defense spending. It is my considered opinion that plans should be developed to maintain the industrial and economic activity of all areas of the country with a specific Government program designed to alleviate the distress in those areas which have been bypassed in the development of a wartime and defense economy. This eastern Kentucky region which has been certified as an area of critical unemployment for the past 3 years contains billions of tons of coal reserves, including much of the finest metallurgical coal in the country. Many mines in this area are noted for their efficient methods of operation and the production cost is low. The real problem is the transportation cost, which can be overcome by the providing of water transportation. In fact, the canalization of the Big Sandy River would reopen the markets for the metallurgical coal in Pittsburgh and for domestic coal all along the Ohio River, including the new plants to provide power for the atomic plant at Piketown, Ohio. This area, rich in natural resources and oversupplied with experienced workers, continues to face economic distress during this prosperous period because it has received few defense contracts and no major public-improvement programs. It is time that action be taken by Congress to establish an agency with authority to take steps to equalize the economic opportunity in this and every similar area in this country. The effect of the Government purchasing program which approximates 20 percent of the national expenditure has become a major factor in our industrial life. The concentration of defense contracts in any one area in itself constitutes a local boom. At the same time, those areas which fail to receive the benefit of such Government purchasing rapidly become depressed economic areas. A major function of the Depressed Areas Administration should be to equalize or at least to alleviate the depressing effects in those areas which fail to receive a reasonable portion of the Nation's defense contracts and other Government activities. Grants and loans for public construction of such facilities as water conservation and floodcontrol projects; public power developments; improved transportation, including both highways and waterways; public school construction and technical assistance in the development of new industries can do much to improve the economic opportunities in such areas. The development of new industries can also be encouraged by a rapid tax amortization program. A vocational retraining program, as a cooperative project between Federal, State, and local agencies, is a necessary step in the revitalization of the industrial activity in any community. These and other essential steps may be developed by a Depressed Areas Administration. The CHAIRMAN. I know what you say is no exaggeration. There is a very bad situation in eastern Kentucky. Mr. PERKINS. I want to thank you very much for the privilege to appear. The CHAIRMAN. Call the next witness. The CLERK. The next witness, Mr. Chairman, is the Hon. Bernard W. Kearney, Representative from the State of New York. STATEMENT OF HON. BERNARD W. KEARNEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK Mr. KEARNEY. Mr. Chairman, I want to thank the Chairman and the Members of the committee for their courtesy in extending me this time this morning, and I am speaking not only in connection with H. R. 8994, the bill introduced, but also the companion bills along the same lines. The 32d Congressional District of New York, the district which I have had the honor to represent for the past seven terms, has been designated as a distressed or critical area by the United States Department of Labor. We have been witnessing the slow-but-sure cutoff on the employment rolls, particularly resulting from defense installations in Schenectady, N. Y. In that city is located the Scotia Naval Depot and the Army Depot at South Schenectady, N. Y. Going back a few years, the Navy Depots top employment figures were somewhere between 1,600 and 1,800 employees, and during the past few years, up to the present time, there are now approximately a little over 700 employees employed there. The Army depot at Schenectady had 3,139 employees, but now employ only about 2,156. Many of our people in the area of Schenectady have worked in the past at the Watervliet Arsenal at Watervliet, N. Y., and they, too, have suffered from layoffs during the preceding years. I have in my possession telegrams which, with the consent of the chairman, I ask unanimous consent to insert in the record from the various union leaders in the area, showing the employment figures of the various plants. The CHAIRMAN. They may be inserted in the record. (The letter and telegrams follow :) Hon. BERNARD W. KEARNEY, House Office Building, Washington, D. C. KEMPF BUICK, INC, Amsterdam, N. Y., April 24, 1956. DEAR SIR: Since writing you on April 11 regarding your bill H. R. 8994, "Technical and Financial Assistance in Critical Areas," I have additional information of which you may wish to use in any way you may see fit. In April 1955, there were 1,768 on the unemployment claims load. In April 1956, the claims load is 1,550. In April 1955, there were 2,900 persons unemployed or 11.8 of our workable forces were out of work. The present indication is that our labor forces have dropped considerably due to people moving out of the community and the picture is expected to run better than 10 percent of our people unemployed. Please bear in mind that in the textile business there is always an up and down in the claims load. As an example, in September 1955 there were 400 sewing-machine operators out of work and today there are none out of work. This could very well reverse itself during the summer month. We find in our survey work that many of our male employees are working in Connecticut and Massachusetts and coming home weekends. This would also drop the claims load but it still leaves us with a great number of people having to find employment elsewhere. Since April 1955, an accurate check shows that 280 families have moved directly out of Amsterdam. It is safe to say that this could be multiplied by 3 making 740 having left our community because they could not find work here. We expect that with the factory unemployment condition the way it is at present, additional persons are going to be laid off in stores, restaurants, etc., because the money being spent is greatly reduced. In our own business sales are down one-fourth over last year for the same period and over one-third from the year previous, even though we are stepping up sales effort, advertising, and every other means to obtain business. There are many small industries, 50 to 100 men, that would like to move from tight labor areas and come to Amsterdam, but they lack the moving capital to do so. In many instances, this capital requirement is a matter of $50,000; however, their statements do not show a net worth of sufficient amounts to permit banks or other loaning agencies to loan this capital, therefore it becomes risk capital. Many of them are sufficiently sound enough and have been in business long enough to warrant such loans. I hope that you are successful in getting your bill passed, as I assure you that there is a great need for the thing that you are attempting to do. If some sort of assistance doesn't come reasonably soon, I can assure you that many additional businesses will fold up because of our lack of jobs for the unemployed. Sincerely, KARL M. KEMPF, President. Also president of Industries for Amsterdam, Inc.; director of Empire State Chamber of Commerce; and past president, Amsterdam Chamber of Commerce. AMSTERDAM, N. Y., March 24, 1956. Congressman B. W. KEARNEY, House Office Building, Washington, D. C.: The Amsterdam joint board TWUA is requesting your support of the Douglas bill referring to distressed areas. We still have 1,700 people unemployed and we feel that the passage of this bill will be of great help to Amsterdam. FRED KROKENBERGER, Hon. BERNARD W. KEARNEY, SCHENECTADY, N. Y., March 25, 1956. House Office Building, Washington, D. C.: Employment at the General Electric plant in Schenectady is 6,200 less than it was January 1, 1954. This reduction of jobs was gradual over the 24 months' period and was the result of moving some of the departments to smaller communities. Under the decentralization plan of General Electric there will be 1,200 more displaced from their present jobs this year (1956) as the result of the industry control, department moving to Roanoke, Va., and the porcelain department moving to Baltimore, Md. JAMES J. COGNETTA, President, Local 301, IUE-AFL-CIO. Congressman BERNARD W. KEARNEY, AMSTERDAM, N. Y., April 24, 1956. House Office Building, Washington, D. C.: Please accept my apology. I was misinformed of the bill that was up for consideration. I am wholeheartedly in support of your bill, H. R. 8994. I was informed by Mr. Karl Kempf of its contents and I am sure it will aid our distressed community. FRED KROKENBERGER, Business Manager, Textile Workers Union of AMA. Hon. BERNARD W. KEARNEY, SCHENECTADY, N. Y., April 25, 1956. House Office Building, Washington, D. C.: Employment at American Locomotive Co. in Schenectady reduced from 6,500 in 1954 to approximately 3,100 at present. S. MORREALE, Recording Secretary, Local 2054, United Steelworkers of America. SCHENECTADY, N. Y., April 25, 1956. Re employment status American Locomotive. Hon. BERNARD W. KEARNEY, House Office Building, Washington, D. C.: Add to previous figures 700 salaried laid off during same period; 3,500 were factory only; total 4,200. S. MORREALE, Recording Secretary, Local 2054, United Steelworkers of America. Mr. KEARNEY. Along with the situation in Schenectady, I want to speak of the glove center in Fulton County, N. Y., namely, Johnstown and Gloversville, N. Y., where much unemployment has resulted, due to the fact that American workers cannot compete with the import of foreign-made gloves, whether they be of leather, made in Europe, or wool gloves made in Japan. Now, let me speak particularly of the situation in Amsterdam, Montgomery County, N. Y., which is the most serious. In 1953, January, with unemployment at approximately 1,000 people, the Amsterdam Chamber of Commerce started to investigate what could be done to supplement Amsterdam's 2 major industries, the 2 carpet mills, the Mohawk and the Bigelow-Sanford, with several small diversified industries. By October 1, 1953, it was decided that the best way to prove to interested industrial prospects that Amsterdam was a united community and wanted them to settle there, and the best way was to raise $250,000 to build a 50,000 square-foot building and offer it on a leaseor-purchase basis at cost. In the meantime, unemployment grew steadily worse, caused by cutbacks in defense orders that were being currently done at Watervliet and Schenectady, N. Y., plants, where between 2,500 and 3,000 Amsterdam residents had been working for a period of several years. By December 11, 1953, the Department of Labor released to the press the following, in brief: Unemployment filings are at 2,049 compared to November 13 filings of 1,430. To be added to this load are approximately 500 other persons not covered by the provisions of the State unemployment insurance law, but who are seeking jobs. By March 1, 1954, with employment steadily growing worse, a selfhelp drive was started to raise $250,000 in donations. On April 7, 1954, the drive reached $270,000, and by the end of April, had exceeded $300,000 in pledges. This was proof to any industry that the people of Amsterdam were sincere in their desire to welcome any small industry, let us say, ten to fifteen hundred employees, to their community. By November 30, 1954, with employment still getting worse-at this time there were 3,600 unemployed-a 140-acre plot had been purchased by industries for Amsterdam, Inc. That was the group that took over this critical proposition. Ground was broken for the first expandable type industrial building. By the end of December 1954, many persons had been laid off in other defense plants, and families were packing up and leaving Amsterdam to find work elsewhere. Over the period of the last 25 years, Amsterdam had no natural population or industrial growth, but had stood still. During the war years, no Government or private war plants were built with the consequent result that no buildings of modern type were available to attract new industry. At this time, Amsterdam was hit a hard blow on January 29, 1955. The second largest major industry, namely, the Bigelow-Sanford Carpet Mills, announced that it was consolidating its local plant with one in another State. This meant the loss of 2,500 more jobs by the end of 1955, in a community of 32,000 population. In October of 1955 the following were employed: Manufacturing, 8,350; nonmanufacturing or other fields, 6,000. Within a 17-mile radius there were 7,300 unemployed, and within a 34-mile radius there were 15,200 people unemployed. As soon as the Bigelow-Sanford Co. has completed its moving job, this city total of unemployed is expected to reach closely between 4,500 and 5,000 persons. This, of course, will include 200 families who have left or moved to other localities, where work is available. There is a steady decline of business. Each month store buildings become vacant, and other persons are thrown out of work. With this business decline, merchants lay of employees, and others are added to the unemployment problem. Factory payrolls in November of 1955 have declined 12.5 percent, compared with the same period 1 year ago. |