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under the United States Department of Commerce. There are many other provisions in the Douglas-Flood bill calling for vocational training, technical aid, and loans dealing with public works of a necessary and essential nature.
I make this statement in fairness to the Senate and House, in fairness to the local news services, the local people, in fairness to myself; and in order to remove any impression that may be created by the introduction of this latest piece of legislation on this same subject.
I was pleased that the President's state of the Union message contained reference to this subject of distressed economic areas. I hope and pray that in this session a bill on this subject will be passed.
The title of the Douglas-Flood bill when introduced will be "Area Redevelopment Act," to help relieve chronic unemployment in areas of substantial labor surplus. In other words, the purpose of the bill is to help distressed areas to help themselves.
As a result of the widespread interest in the provisions of the Douglas-Flood bill, as indicated above, a series of hearings were held in many cities in several States, in order that we could obtain the best available information, suggestions, ideas, criticisms, and so forth with reference to the proposed law. An analysis of the testimony taken in all of these hearings made necessary a series of corrections and additions to the original draft of the bill, which is now being. prepared and will be introduced in the Senate by Senator Douglas and by myself in the House within a week.
May I point out that as of May 1955 there were 154 major and minor areas in 42 States classified as having unemployment in excess of 6 percent by the Department of Labor's Bureau of Employment Security. The worst and most persistent unemployment is centered in textile, railroad, and mining regions in Massachusetts, Pennsylvania, West Virginia, Kentucky, southern Illinois, and eastern Ohio. Areas of light industry, including chemicals, rubber, aircraft, farm machinery, and ordnance, in other States, also experience excessive unemployment.
The Douglas-Flood bill provides for the establishment of a Redevelopment Areas Administration and would:
1. Make loans up to 75 percent of the cost for the construction of industrial plants or commercial facilities in depressed areas;
2. Make loans and grants for the construction of needed public facilities such as highways, hospitals, schools, water and other community facilities in areas of chronic unemployment;
3. Provide retraining, reemployment, and vocational education and rehabilitation for the unemployed in such areas;
4. Extend unemployment benefits for an additional 13 weeks to individuals who accept retraining;
5. Aid industries and firms in distressed areas to gain contracts for supplies and services from Government procurement agencies. This bill establishes an Administrator who shall have the power to appoint local industrial development committees to plan for and advise the Administrator on means of relieving chronic unemployment in the local areas.
Mr. Chairman, we cannot leave these distressed industries and areas to rot away. The lives of too many human beings are at stake to sit by and do nothing for these pockets of depressed industries and locali
ties while much of the rest of the country enjoys a high standard of life.
Mr. Chairman, I would like to give you a digest of the DouglasFlood bill. I point out that this analysis refers only to the original act as introduced by Senator Douglas and myself last year, and while many of the provisions of the original analysis will be included in the revised act about to be introduced, many important amendments and additions will likewise be included in the revised version of the bill: Purpose
To provide assistance to communities, industries, enterprises, and individuals of depressed areas to enable them so to adjust their productive activity as to effectively alleviate excessive unemployment within such area.
1. Creates Depressed Areas Administration with Administrator.
2. Advisory Committee consisting of heads of major Federal bureaus.
Depressed areas defined
1. Areas where 9 percent unemployment has existed for at least 18 months, or 2. Areas where at least 6 percent have been unemployed for at least 3 years. (Studies made to determine these facts by Administrator and Department of Labor.)
1. Once such area is determined, local industrial committee is appointed by. Administrator, consisting of five citizens.
May make loans in financing construction of industrial plants:
1. Need established by findings showing:
(a) construction of facility reasonably calculated to alleviate unemployment;
(b) funds for construction not otherwise available;
(c) amount of loan plus private funds available to insure completion;
(d) construction of facility will not rob another depressed area or cause another area to become depressed;
(e) facility constructed will not be merely temporary.
2. No loan in excess of 66% percent of cost of construction, nor for longer than 40 years.
3. $100 million authorized for making loans.
Assistance to public facilities
1. Administrator directed to make studies of need, and with advice of Advisory Committee can by loans or grants initiate programs of public facilities with or without proposals from States, municipalities, and private organizations. 2. $100 million authorized for such public facilities assistance.
Funds for industrial plants and public facilities
Administrator with approval of President issues notes and obligations not exceeding $200 million. Secretary of the Treasury may purchase and sell such notes.
Governmental departments shall procure supplies and services from local firms where practicable.
Administrator shall furnish areas with technical assistance and information from governmental agencies and departments.
Powers of administrator
1. Hold hearings, issue subpenas, establish rules.
2. Secure assistance from all other governmental agencies.
1. Provides fast tax write-off benefits for new plants.
1. Secretary of Labor to provide suitable training for unemployed.
2. Cooperation with existing retraining facilities and State programs.
1. Agree with State for payment of supplementary payments in depressed areas for those engaged in retraining program.
2. United States will pay additional period of 13 weeks beyond State benefit payments.
Commodity Credit Corporation to distribute processed food to homes and institutions.
The original Douglas-Flood Act on page 12 thereof, under the heading "Tax relief" contained certain taxation provisions which of necessity directed the Flood bill to the Committee on Ways and Means of the House. This provision has been deleted in the revised act and this act, when introduced, will come properly within the jurisdiction of the distinguished Committee on Banking and Currency of the House.
May I point out, Mr. Chairman, in the hearings thus far held, that 35 separate units of the Chamber of Commerce have testified in support of the Douglas-Flood Act from the States of Pennsylvania, Ohio, Illinois, Maine, Massachusetts, New Mexico, and others, as well as many individuals and organization witnesses from the many communities affected, speaking through their elected officials, civic leaders, business leaders, labor leaders, etc. Always it must be kept in mind that in the midst of the great world problems confronting this Nation, there are deeper problems, the human problems, that go far beyond narrow self-interest or group interest or sectional interest.
The Douglas-Flood bill is a moderate approach to the needs of areas in need of economic help. In addition to the authorizing of loans to communities for new industries, it would lengthen unemployment compensation periods for workers in retraining programs, and this, we of these areas know, is of basic and material necessity. This program would offer research facilities, technical information, and tax relief to assist towns where there are cast-off workers that are ready and available, skilled and nonskilled who want only to work. It would seem beyond the peradventure of reasonable doubt that the least the Federal Government could do to aid these communties, where as many as one-fifth of the skilled workers are on relief, where some veterans of World War II never had a decent job. We feel that the test taken from these hearings, and the widespread knowledge of the facts now will propel this bill through the House and Senate where previously we have only had sympathetic words.
Under no circumstances must this be considered a giveaway program. Without the full cooperation of the State and local municipal government, and the communities concerned this program cannot succeed. The responsibilities of all are required and conditions precedent to the successful operation of the program. The distinguished Governor of Pennsylvania, in making a statement to the Pennsylvania
General Assembly in submitting a bill very similar in nature, and for the same purpose, said as follows:
But all such things, desirable as they are, can only come as the return we gather from a productive society. They are the good fruit born by a functioning economy. They are the payment we make mutually to our community from the proceeds of our individual initiative and labor.
Our basic job, our most pressing job, therefore, is to protect the economy of Pennsylvania. We must maintain it where it is strong; shore it up where it is weakened; protect it, build it, strengthen it, expand it. I regard that effort as the primary task before us.
May I emphasize, Mr. Chairman, that the purpose of this bill is to awaken and maintain a sense of civic responsibility and enlighten self-interest in these areas, with emphasis on private financing wherever humanly and reasonably possible will be far more effective than anything any government or combination of governments can do by themselves. I maintain that America's secret weapon is its people. Our greatest resource is the skilled, ambitious, capable workmen of the Nation. More and more they are aware of the common problems, looking for leadership, eager to participate, and in many areas, including mine, successfully they have banded together in community organizations of great strength and vigor to their own progress. These great people, better than all bureaucrats, can work their own destiny.
I have the honor to represent the great anthracite area of Pennsylvania. We know that our coal districts and railroad towns have been particularly hard it. In all the Nation, there are only 9 large areas where more than 12 percent of the working force is unemployed. Four of those nine areas are in Pennsylvania. There are 45 smaller areas of very substantial unemployment in the Nation. Eight of those 45 areas are in Pennsylvania.
We know that throughout the Nation, communities, States, and regions are in fierce competition for industrial expansion.
We know that energy sources are changing rapidly in our technology; that there is great pressure to close obsolescent plants and integrate operations in modern and efficient structures; that an old town, grimy and unattractive, has less chance to attract a new industry than a community which understands and exhibits the art of pleasant living.
The economy of Pennsylvania historically has found its chief support in our mineral resources-first among them, coal. Here again, we took a great resource for granted.
We have taken more than 13 billion tons of coal out of the Pennsylvania earth. In the last 62 years we have marketed $31 billion worth of Pennsylvania coal. No wonder we all are hurt when coal is hurt.
Our error was the common human one-when all was well and times were piping time, we did not plan for a future in which the coal industry could no longer support the jobs of hundreds of thousands of Pennsylvanians. We did not diversify our economic base in time. Now, the problem is upon us in full force. It does not mean that we should write off coal, or the coal areas. It is altogether likely that the slump in coal is temporary; that the future will demand, greedily demand, the energy that is in our many billions of tons of remaining coal reserves and find economical ways, competitive ways, of utilizing that energy.
The justification for this law lies in necessity. Its termination will come forthwith if normal economic processes show that they are doing the job. Gradually, slowly, painfully, the Nation is beginning to realize that these areas of economic decline in a period of national prosperity are a national problem too.
We have properly been concerned with shoring up the economy of such far places as West Berlin, Japan, the Arab countries, South Vietnam, but we seem all too unconcerned with the economy and the employment potential of these depressed areas. The current Federal program for American areas of economic distress is sadly feeble. It has no impetus, no drive, no spokesman in the national Government. Mr. Chairman, may I close with a quotation of the Joint Congressional Committee on the Economic Report of March 14 of this year:
We are very concerned with distressed conditions which persist in certain industries and regions, even in an expanding economy. We believe that action is required now and that much can be done through public works to assist these communities. The Federal Government should recognize its responsibility to those areas and industries by promoting research to discover new products and new processes. Consideration should be given to the possibility of modifying the employment compensation programs to meet the special problems of retraining and readjusting facing those areas. Loans, technical assistance, and, as the President recommends, an expanded area development program should be provided those to help them adapt to changed economic conditions.
STATEMENT OF HON. CHARLES A. VANIK, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO
Mr. VANIK. Members of the committee, I want to preface my remarks by stating that I am in support of legislation to help the depressed areas of this country. America will not achieve the widescale development which is its heritage and potential if some sections of the Nation cannot share in a reasonable uniformity of prosperity. The unemployment and distress of a depressed area is a national problem and only the Federal Government can provide adequate machinery for maintaining the economic stability of a depressed area. It is an interstate problem in every sense of the word inasmuch as areas of depression place in migratory motion millions of workers and residents from one section of the country into another and at the same time create distress in the area of low employment for those unable to participate in the transition. The problem of the depressed area is not only a problem of that area but it also creates problems for the community which must face the impact of people migrating from depressed areas.
With respect to the current legislation, I regret the placing of the depressed area program in the Department of Commerce and feel that an independent agency should be established to coordinate and administer the Federal program on a permanent basis. In all possibility, there will always be some areas of the Nation that can be defined as depressed areas which will face extensive unemployment and an exodus of workers and residents to other sections of the country. As a Representative from the city of Cleveland, I want to call this committee's attention to the fact that we have faced a tremendous impact by reason of the migration into our city by citizens from the depressed areas. They have come to seek employment in our more