earned in them has been supplemented by road-construction employment. The small farms yield only grudgingly to man's efforts to make a living; technology has replaced the demand for coal, and for hand labor in road construction; geographical distribution of markets limits the lumber production.

San Miguel County, which has lost nearly 11 percent of its population since 1950, has, nevertheless, had an average of 12 percent or more of its labor force unemployed during the last 3 years. Las Vegas, the largest town in the area, was the trade center for the many sheep and cattle ranchers in the county. Previous to conversion to diesel power, a railroad shop was located in the town. Continued drought has caused small-farm owners to desert their lands and seek work in urban areas. Several thousand workers migrate to Northern States in the spring for lambing season and to Colorado for the potato harvest in the fall. Roadbuilding and construction of public buildings in Las Vegas has provided some extra work during the summer months. Activity of this type, however, is limited in scope. Several years ago, a small plant was established to supplement family earnings through the employment of women and youth as sewingmachine operators. The inability of this plant to get contracts has caused its employment to fluctuate from around 300 to zero. It has had contracts for the manufacturing of overalls, shirts, and parachutes. At present it is closed for lack of a contract. Lumber operations in the woods are shut down because of deep snow, public construction planned is nearing completion, and over 19 percent of the labor force was unemployed in February. Included in this supply are 250 railroad-track laborers.

Total unemployment in Rio Arriba County has exceeded 14 percent for the past 3 years and was 18 percent in February 1956. The major industry is lumbering in which employment fluctuates from nearly 500 in July, August, and September to less than 100 when winter weather closes woods activity. Several thousand workers migrate to Colorado for the beetfield harvest. The town of Espanola furnishes construction and service workers to the nearby town of Los Alamos, but all must return home when unemployed. Proximity to this installation and the hope of obtaining work at it has been a large contributing factor to Rio Arriba County being the only one in the area to show a decrease in population during the last 5 years.

The labor force of Sandoval County centers around the town of Bernalillo with its sawmill and nearby woods operation. Construction of the AlbuquerqueSanta Fe Highway caused employment to be higher in 1955 than is usual. In spite of this activity over 11 percent of the labor force was unemployed. This ratio is now 15.8 percent. Lack of job opportunities causes labor-force participation to be only 26 percent of the population and per capita income to be next to the lowest in the State.

The drought has caused natives of Guadalupe County to dispose of a large part of their cattle and resort to serving tourists traveling on Route 66. The population has decreased over 11 percent since 1950, and average unemployment was over 11 percent last year. Due to decreased winter travel it is estimated to be 12.1 percent at present.

Colfax County, which in the forties was a thriving area with large cattle ranches and 1,200 workers in the coal mines, has had a drop of nearly 13 percent in population since 1950. Conversion of the Santa Fe Railroad to diesel power has reduced mine employment to less than 100 and caused crews who manned the extra engines required to pull over the Raton Pass to leave the area. Drought has forced ranchers to reduce the number of cattle. Lumbering accounts for the largest part of manufacturing employment but is closed down 6 months or more of the year due to snow. Earnings in the local area are supplemented by workers moving to harvest in Quay, Curry, and Roosevelt Counties. Over 60 men leave the area during the summer for railroad-track work. A small electronics plant was established in the town of Raton but difficulty has been experienced in securing contracts, although numerous bids have been made for Government contracts. At present 10.7 percent of the labor force are unemployed and the average over the last 3 years has not been below 7.9.

The economy of Harding County is largely dependent on that of Colfax County since workers commute to jobs in Raton when they are available. A drop of nearly 34 percent in population has occurred since 1950 but in spite of this decrease over 11 percent of the remaining labor force is presently unemployed.

The lack of job opportunities in Taos County causes labor-force participation to be only 26 percent of the population. While the area has numerous subsistence farms, citizens are dependent on seasonal activity in lumbering and railroad

gang track work for the per capita income of $648 recorded by the University of New Mexico study. Yearly, several thousand leave the area for harvest work in Colorado. The average unemployment has been well over 8 percent for the last 3 years and at present is nearly 12 percent.

Mora County ranchers have depleted their herds and over 25 percent of the population has moved to other areas for employment since 1950. Participation in the labor force is low, 27.7 percent, yet unemployment has averaged over 6 percent for 3 years. Snow seasonally closes lumbering, and at present unemployment is up to nearly 9 percent.

Uunemployment in Santa Fe County does not fluctuate so much as in the northern counties, but has been over 7 percent for the last 3 years and in February was 9.7 percent. The population, which is centered around the State capital, has decreased only slightly during the last 5 years. While about 450 are employed in manufacturing, the economy of the area is dependent on Government and tourist business. During the winter months both the tourist travel and lumbering in the area are slowed and unemployment reaches its peak in February.

The economy of Socorro County is dependent on agriculture, mining, and tourist trade. Employment in mining has fluctuated with the manganese market. Recent exploration for uranium has helped the mining industry slightly. Agriculture activity gives employment to about 500 during the harvest season, but during other months family workers meet the need of this industry. Over 7 percent of the labor force has been unemployed for over 3 years.

Local and State groups have recognized the seriousness of the problem in these distressed areas. As mentioned earlier, a small manufacturing plant has been established in Las Vegas and one in Raton. Assistance in securing Government contracts has been requested by these firms. Government stockpiling of manganese gave impetus to the mining in Socorro County last year, but most of these workers are now unemployed.

No distressed area in New Mexico was able to comply with the Department of Labor classification of a labor force of 15,000 until the amendment to Defense Manpower Policy No. 4 in July 1955. This amendment provided further that firms which are located in areas not classified by the Department of Labor shall be eligible for participation in set-asides if these firms submit a certificate from the local employment security office that a substantial labor surplus exists in the area in accordance with standards prescribed by the Department of Labor. While the above 10 counties can easily be certified as labor-surplus areas the economy of the area does not contain the necessary established firms to request this certification. The distance from markets has not been conducive to manufacturing in these areas. Processing of extractive resources requires a financial investment which local capital has been unable to meet. Until assistance is given these areas a labor force of 45,000 is unemployed a large part of each year, many of whom are underemployed even when employed, and 153,000 of our citizens living on incomes averaging less than half of the national average.

STATEMENT BY BERL HUFFMAN, EXECUTIVE DIRECTOR OF THE NEW MEXICO ECONOMIC DEVELOPMENT COMMISSION

One of the missions of the New Mexico Economic Development Commission is to bring aid to the distressed areas of our State. To you gentlemene who are frequently called upon to deal with the problems of our Nation's entire population, the relatively small number of people-some 153,000 in New Mexico's 10-county depressed area may seem very small. They do, however, constitute nearly one-fifth of the people of our State, and their problems are very serious ones in the economy of New Mexico. We feel, as I am sure you do, that a hungry and underclothed family in northern New Mexico is just as much a blight on our country's economy as is a hungry and underclothed family in our more populous centers such as Chicago, Baltimore, or Detroit.

The plight of these people is very serious. In some of the communities of this area we are currently witnessing distress as severe as it was during the great depression.

Other New Mexico officials have provided you in some detail the extent of unemployment and the consequent heavy welfare burden which is its direct result. The only evidence I would add merely reinforces what they have said; namely, that the incomes of the people in this 10-county area reflect the serious

underemployment situation. These low incomes give rise directly to the welfare

problem.

These 10 counties are the ones which with one exception (Santa Fe) ranked as the lowest in the State in per capita income during 1955, as is shown by an exhaustive study of incomes recently completed by the bureau of business research of the University of New Mexico. This study showed that the average of the per capita incomes in these counties in 1955 was only $858 as contrasted with a per capita income for the Nation as a whole of $1,770 in the preceding year. This extremely low level of income has become chronic in these counties as the result of recent economic changes. In 1949, according to the Bureau of the Census, 29 percent of the families in this 10-county area received, as an entire family, less than $1,000 income. This may be contrasted with the 14 percent of the Nation's families who received less than this amount. In 1 of the counties those families who received less than $1,000 income constituted 53.7 percent, and in 5 of the counties in this area more than 33 percent of the families received less than this admittedly inadequate family income.

Why these areas are distressed

While I don't wish to burden you with further details concerning the extent of unemployment, low incomes, and heavy welfare burdens, I would like to take a few minutes to discuss the underlying causes of the contraction of employment in this area-causes which we feel are not the fault of the people who live in this area, but are on the contrary the effects of economic changes of which these people are the victims and over which they have no control. By way of introducing this discussion, however, I should like to digress briefly to point out that the counties which we are discussing here are in a very real sense a single area. Socorro County is an exception in that it is not contiguous with the other counties. Yet the economy of Socorro County is very similar to that of the others, and the basic causes of its difficulties are very much the

same.

When these areas were originally settled, they were extremely isolated. Their only contact was with Old Mexico, and this could be accomplished only by dint of a journey requiring months of hardship. Consequently they developed a pattern of resource utilization-making a living-which was based on almost complete self-sufficiency. Nearly all of the people lived on small subsistence farms from which they extracted virtually everything they required for a living. When lumbering, livestock raising, or mining were developed at all, they were primarily supplementary activities. The people lived for centuries in this environment which required no cash income and involved no sale of products in order to make a satisfactory living.

The introduction of commercial livestock raising and large-scale mining for other than domestic use was made largely by newcomers to the area, just before and after the American occupation. To a large extent these activities passed over the people who made their living from the small farms, and they continued to live in a noncash economy-one in which specialization of activity and sale of products to market had little part.

Although with the passage of the years some of these people have adapted themselves to quasi-urban conditions, those who have become merchants and proprietors of small service establishments have for the most part served the vast majority who have remained on their small farms, working out their subsistence on a few acres devoted to such variety of crops and livestock as contributed directly to their consumption. Thus, even those who have engaged in nonagricultural pursuits base their fortunes tied to subsistence agriculture.

This type of subsistence agriculture based on a small acreage of crops directly consumed by the operator's family has become uneconomic in today's economy, as you gentlemen are well aware. Our market-oriented economy is based on specialization and exchange. It has made possible our higher standards of living. But it requires cash. And the little subsistence farmer has had nothing to sell to obtain cash except his own labor for which, in an area devoted to subsistence farming and large-scale ranching, there is little market. Under these conditions the small subsistence farmer has in many instances felt forced by economic circumstances to sell his small holdings to those who were financially able to consolidate small holdings into large ones suitable for cattle or sheep raising.

What has happened is borne out by successive censuses of agriculture. In 1940, 48.9 percent of the farms in this 10-county area were under 30 acres in size. More than half of these were under 10 acres. In the period from 1940 to 1954

the total number of farms in the area decreased 37.8 percent. More than half of this decrease (51.2 percent) was in farms of less than 30 acres. In this process of consolidation into farm units of suitable economic size, nearly two-fifths of the farm families of the area were uprooted and separated from their means of existence. Moreover, because livestock ranching requires less labor than crop farming, these uprooted families could not find employment on the ranches. Consequently the net reduction in agricultural employment in this area since 1940 has been 31 percent, about equal to the reduction in the number of farms.

Although the principal activity of this area has always been agriculture, three other activities did become oriented to changing economic conditions and national markets during the early part of this century. These were cattle raising and, in Las Vegas and Raton (San Miguel and Colfax Counties), coal mining and railroad work. Largely because of the drought, the cattle industry of the area has suffered badly during a period of high (although recently falling) prices, and this has served to further curtail employment opportunities. At the same time the two principal markets for the coal mined in this area-commercial and residential heating, and fuel for the railroads-have practically disappeared because of the inroads of natural gas and the conversion of rail locomotives to diesel oil. The conversion to diesel locomotives has also destroyed the employment formerly available in the railroad shops at Las Vegas and Raton.

It can be suggested that a people thus finding themselves in uneconomic pursuits should get themselves into other employments which better meet the demands of a changed economic environment. In answer to this suggestion we would point out three considerations:

1. Many of the people of this area have migrated to find other employment. 2. Many more of these people resist migration because of sentimental ties and economic considerations.

3. Migration is not an adequate nor an economic solution to the area's problems.

In the period from 1940 to 1955 the population of this area declined from 170.700 to 152,600, a decrease of 10.6 percent. This occurred despite one of the highest birthrates in the Nation. In the period from 1950 to 1955 alone the net outmigration has been equal to 19 percent of the 1950 population. The vast majority of these outmigrants have been younger people; the older ones tend to stay put.

The resistance to migration among the people most affected by declining employment opportunities-the rural Spanish-Americans-is very strong. Not only are they bound to the area by strong family and religious ties, they have a deep love for their homes in the mountain valleys and on the high mesas. Not the least among these ties is the high degree of home ownership among these people. In these 10 counties more than 66 percent of the families own their homes, and of those most affected by the problem, the rural people, nearly 75 percent are homeowners. This contrasts with 55 percent of the Nation as a whole. These people's resistance to migration is further strengthened by the feeling that they cannot successfully compete for jobs in the industrial labor markets with workers who have been trained in, and whose experience is in, industrial occupations. Moreover, many of those who have not moved to areas of more employment opportunity cannot do so because of the inability to finance the costs of migration.

We feel strongly that migration, while it may be a partial answer, is not the solution to the problem of these northern counties. For the most part, migration is a solution sought largely by the younger and more resourceful people of the area. So long as this solution is encouraged, it can only deepen the troubles of the area, for it leaves behind the older and the less adaptable. Thus, a larger and larger proportion of the population are the unemployed and the unemployable. And the relief rolls grow and grow, until the entire area becomes an unbearable burden upon the rest of the State, dragging down the entire economy.

Viewing the problem in this fashion, we have become convinced that the only solution which offers any hope for the future is one which can bring about a rehabilitation of the area by increasing the job opportunities and restoring the people to a productive role in the economy of the State and the Nation. What New Mexico is doing about it

In airing our problems, we do not want to create the impression that we feel that the Congress is responsible for the plight in which the people of our northern counties find themselves, nor do we wish to imply that we think it is the responsibility of the Federal Government to solve this problem. Since we are here to

ask for favorable consideration of the depressed-area bill, we know that it is only proper for the committee to ask, "What are you people in New Mexico doing about this?" So I want to say a few words to explain what we are doing and what we hope to accomplish.

In the first place we are, jointly with the Federal Government, contributing heavily to provide public assistance under the various welfare programs, and we think we have about reached our reasonable limit. Mr. Hintz has dealt with this aspect in detail. But we do not regard this program as a solution to the problem. It is only a palliative and a stopgap. The only long-term remedy is to provide employment through which the people of the area can raise their incomes to a level adequate to make public assistance unnecessary.

With this in mind, our legislature in 1955 provided an annual appropriation-a large sum for a State of our small size and financial resources-of $100,000 to reactivate the State's economic development commission which I have the honor to represent. Very briefly our program-which we recognize will take a long time to work out—is this:

1. We nave initiated basic research studies to identify the specific causes of underemployment and low incomes in those areas of the State in which these constitute problems. As an early result of some of these studies, we have been able to identify the underlying causes of some of these problems.

2. In cooperation with chambers of commerce and other community organizations throughout the State, we are undertaking, and we have in progress, studies which seek to define the industrial resources of every area of the State and appraise the possibilities for better utilizing these resources.

3. On the basis of the results of such studies, we plan to assist communities in promoting the establishment of enterprises suited to the resources and situation of the communities by disseminating information to prospective enterprisers, both local and from out-of-State, by giving both the communities and the prospective enterprisers every technical assistance we can afford, and by bringing together prospective enterprisers, suppliers of capital, and competent management.

There are other phases of the overall program, consisting of a rather complete job of information collection and dissemination; the organization of advisory committees to assist both communities and industries in finding solutions to their problems; cooperative action programs with other State and Federal agencies; industrial location surveys with private research and consulting groups; and other activities common to most developmental agencies. But the heart of our program is discovering and promoting opportunities for expanding employment, and all of our activities are directed toward that primary goal. New Mexico's interest in the proposed legislation

Our interest in the bill you have under consideration is this: We hope you will give it favorable consideration because we think that the loans and the technical assistance which it will make available to such areas as we have described will greatly augment, and make more effective, our own efforts to bring additional employment opportunities to the depressed areas of New Mexico. Before I explain why, let me say that we are not here looking for handouts. We do not think handouts provide a permanent solution to our problem, and we do not regard the proposed legislation as another handout. We do think that the assistance offered by the proposed legislation provides a means by which we can, by working with our communities, achieve the objectives of our developmental program much more readily than we could without such assistance.

Let me explain why we think such assistance is particularly important to our program in New Mexico.

These 10 counties of New Mexico whose difficulties we have outlined have been quite isolated from the industrial advance of the United States. For that reason they are not well known. Prospective enterprisers do not automatically consider for location areas with which they have little or no knowledge, and indeed, the lack of knowledge about New Mexico, particularly its northern counties, is almost appalling and takes such almost ridiculous forms as inquiries concerning the problems involved in currency exchange, import and export regulations, and whether we have public schools and indoor plumbing facilities.

Under these circumstances, it is difficult to attract venture capital or enterprise to New Mexico. We feel that the bill under consideration goes a long way to helping us attract enterprisers by making it possible for them to secure part of their capital under especially favorable terms.

With the assistance offered if this bill were enacted into law we feel that we could more effectively overcome the disadvantages to our industrial development imposed by lack of knowledge about our resources and our people.