neighborhood. We surveyed that. We know those families are there. Our school records could probably give a complete record of these migrations.

Mr. MUELLER. Did your Chamber of Commerce go down and try to get those people?

Mr. VANIK. They are bringing them in all the time. We are afraid they are going to be on the relief rolls at some time, if there is a slackening of employment. That will be a burden and responsibility of our local community. We are concerned about that potential obligation that we may not be financially able to undertake.

Mr. MUELLER. You know Detroit had that problem when they brought up a whole lot of colored people from the South to work in the automobile plants, right after the end of the World War II. They had a very difficult situation, but in the meantime they have been absorbed.

I do not know whether there is an answer to that, sir, because I think it would be very difficult. You have got one group or groups in your community who are pushing for that, who are going out and bringing those people in. Then you have got other groups who might be the taxpayers, you might say the taxpayers are interested, who say that is not too good a thing for the community. It seems to me that that is a community responsibility, to resolve among themselves.

Mr. VANIK. I differ with you on that, because I think it is a national concern. The national Government has, or should have, a concern with the migration of peoples. These problems of the migration of people ought to be the concern of the Department of Commerce. When people move as they have a right to, from one part of the country to another, the problems of the adjustment of those people and the added burdens, the cost in the depressed area of a depressed labor market; the cost in an urban area of an inflated housing demand, ought to be Federal Government concern. They are interstate problems and have relationship to the migration of people from one area to another. I think we should encourage their migration but I think that in justice to all of the parties concerned, we ought to do something for the communities that have to face the impact of the people that are swelling the urban areas.

Mr. NICHOLSON. Mr. Chairman.

The CHAIRMAN. Mr. Nicholson.

Mr. NICHOLSON. Have you got a list of establishments that the Federal Government has that are in competition with private enterprise?

Mr. MUELLER. I am afraid it would be quite a list. I do not know that we have got it, but I certainly would get it for you.

Mr. NICHOLSON. Do you know that there are plenty of businesses that the Governemnt is doing that private enterprise could do just as well or better?

Mr. MUELLER. I think the record of this administration has been that we have been trying to get out of that as fast as we can but there have been certain instances where we have tried to sell those to private industry where the Congress in its wisdom and judgment has made it impossible for the sale, as now.

Mr. NICHOLSON. About a year ago the Department put out an order doing away with a rope walk up in Massachusetts. They were going

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that sentence caught my eye as I read the statement and again as I heard you read it. Don't you think it would be well to develop a brief statement on that?

Mr. MUELLER. Mr. Talle, if the chairman will permit, we would be very glad to introduce all of the pamphlets that we produce.

The CHAIRMAN. I don't think we ought to make the record too cumbersome, but without objection you may introduce some material. Mr. MUELLER. Or a statement of what has been accomplished in line with what Mr. Talle requests. We will make a short written statement which we will introduce, then, and eliminate the pamphlets.

Mr. TALLE. Is that satisfactory, Mr. Chairman?

(The statement requested above is as follows:)

STATEMENT ON WORK OF OFFICE OF AREA DEVELOPMENT, BUSINESS AND DEFENSE SERVICES ADMINISTRATION, UNITED STATES DEPARTMENT OF COMMERCE, WITH REFERENCE TO LABOR SURPLUS AREAS

ORIGIN OF THE OFFICE OF AREA DEVELOPMENT

Since its initial establishment as the Area Development Division by departmental order No. 65 on March 20, 1947, and its subsequent elevation to the status of an office on August 12, 1955, the Office of Area Development of the United States Department of Commerce has served as a focal point and clearing house in the Federal Government in providing assistance to States, communities, and private groups and individuals for the purpose of establishing programs aimed at economic development and relieving conditions of local area unemployment.

TYPES OF UNEMPLOYMENT PROBLEM AREAS

Areas of spot unemployment are principally of two types-the temporary type which appear and vanish with the fluctuations of the national economy and those of a chronic type which may persist even when the national economy is at a high level. The latter areas particularly present special problems and needs. Causes for their current difficulties may be attributed to various factors: Technological changes; exhaustion or depletion of natural resources; the inroad of competing products; insufficient industrialization or inadequate diversification of industry. The present statement is confined, first, to several observations about the problems and needs of areas with long-term unemployment problems, and second, to how the program of the Office of Area Development attempts to assist these communities in resolving their unemployment and related problems.

NEEDS OF SURPLUS LABOR AREAS

Areas of long-term unemployment have these characteristics, among others: (1) They need either a complete revitalization of their existing industries or, where these industries face a shrinking future, new activities—a new economic base are necessary to keep pace with national progress and to provide increasing job opportunities.

(2) Many of these areas, schooled exclusively in the development of one type of resource or industry, are not prepared to move into new product fields or to serve new and changing markets.

(3) There is often lacking the know-how with which to take the necessary steps in developing a revitalized local economy based on local resources and advantages.

(4) Similarly lacking are the knowledge and ability to make use of existing State and Federal aids in buttressing local area development efforts.

(5) Despite the most arduous local efforts at arriving at a solution-which usually is determined to be the establishment of new lines of industry-these efforts sometimes die on the vine because effective contact has not been made with private industry executives whose decisions as to new and branch plant locations are a vital key to expanding job opportunities.

LIAISON WITH STATE DEVELOPMENT AGENCIES

Under the pattern of operation of the Office of Area Development, initiative and responsibility for area development activity remain with the local and State

levels, while the available resources of the Federal Government are made to supplement rather than duplicate or displace local efforts.

The identity of interest between the Department of Commerce and the official State development organizations in the economic development of the Nation and its separate States formed the basis for establishing a close working relationship between the State agencies and the Office of Area Development. In actuality, the original Area Development Division was formed largely at the request of a delegation representing these State agencies.

The working relationship with the State planning and development agencies has proved mutually beneficial. For example, under the joint sponsorship of the Office of Area Development and the Association of State Planning and Development Agencies, there is held an annual conference, where Federal and State officials discuss their common problems and arrive at ways and means whereby their efforts to meet these problems can be geared together most effectively.

DEVELOPMENT AIDS AND BULLETINS

The Office of Area Development has prepared numerous industrial development aids for use by communities in establishing new industry and thereby increasing local employment opportunities. For example, a canvass was made of local and State programs, and the actions of many Communists were summarized in a checklist for community and area development. The checklist comprises a summary of the types of action that various communities have taken dealing with industrial development problems, retail and service trade expansion, tourist and recreation development, local government aids, and similar topics associated with area-development procedures. The checklist also enumerates what States can do to assist local groups in their economic development efforts.

Another self-help tool that the Office has provided to meet the know-how needs of many local areas for establishing new industry based on local resources is a Community Industrial Development Kit. This kit covers a range of area development topics, including the technique of making a factual survey of what prospective industry wants to know about a community, the promotion stage indicating how to find industrial prospects, and information as to how other communities have gone about expanding and strengthening their economic base. The Office has found that many communities have been successful in establishing new industries through the device of a planned industrial park, which in effect is the industrial counterpart of a planned residential development. To make these experiences available to other communities which are determined to expand and diversify their economic base, the Office has prepared a how-todo-it publication entitled "Organized Industrial Districts: A Tool for Community Development."

The Area Development Bulletin, a bimonthly publication, brings to the attention of communities and private groups recent Federal information and programs that may assist them in their economic development efforts, as well as detailed accounts of how other areas are meeting similar problems.

TECHNICAL STUDIES

The Department of Commerce has recognized that very often certain research must be completed before needed changes in local economies can take place. Technical studies made with reference to the locational requirements of growth industries are an example, the problem being to assist the areas of unemployment in their efforts to share in the industrial expansions which are taking place throughout the Nation. A recent study prepared by the Office of Area Development, Location Factors in The Petrochemical Industry, is a case in point. This study provides estimates of requirements for a number of petrochemicals over a period of years and indicate areas, including labor surplus areas, which have very real advantages as locations for this particular growth industry. Both the industry and the designated favorable location areas can use this report in any future industrial development efforts.

DEVELOPING COMMUNITY-INDUSTRY CONTACTS

A vital part of the program of the Office of Area Development goes to the heart of the matter of establishing new industry to take the place of old or declining industries in areas of surplus labor. Once a community has organized for this effort, its prime need is to come into direct contact with firms planning

expansion. In this connection, the Office has tried various devices to assist communities in need.

Several times a month, for example, leading executives from various types of private industry are called to industry conferences held by the Department of Commerce. Time is allotted on the agenda of these conferences for discussion of the problems of surplus labor areas and the stake of private industry in their solution, and the conference is asked to give earnest consideration to the advantages of these areas in planning future plant locations.

DIVERSIFYING EXISTING INDUSTRY: NEW PRODUCTS EXHIBITS

The solution to replacing a worn-out economic base in local areas of unemployment does not rest entirely in establishing new industries or branch plants. Much can be done in expanding existing local industry through opening up new markets, introducing new products, or improving old products by new processing methods or design.

A Michigan group, concerned with its areas of substantial labor surplusDetroit at the time was one of them-sought suggestions on their objective of stabilizing, as well as expanding, local economies through industrial diversification. Out of the initial conference held to discuss this problem emerged the idea of creating a regional exhibit of new products and processes with Federal, State, and local governments, and private industry and labor unions cooperating. Since the Federal Government spends several billions annually on researchrelated mostly to defense requirements--such an exhibit not only provided an opportunity for businessmen to share in the results of this research, but also provided a medium for the Department of Defense to broaden the mobilization base and to encourage civilian production capacity and know-how with respect to newly developed, noncritical materials, new processes, and new items having defense significance in time of mobilization.

Following its customary pattern of cooperation with other public and private agencies, the Office of Area Development worked together on this project with other units of the Department of Commerce and the Michigan Department of Economic Development. Michigan leaders formed a nonprofit corporation to undertake the detailed planning of the exhibit and encourage the participation of manufacturers established in the region. Funds were raised legally by voluntary contribution from business and labor organizations and private individuals. Over 5,000 people, representing 1,258 firms located in 158 Michigan communities, viewed the exhibit. Representatives from 18 other States and 4 foreign countries also were present. On exhibit were some 25 displays of federally developed new products or processes and some 70 displays provided by private exhibitors. A number of months after the exhibit, personal interviews were conducted with 269 businessmen who had attended the show. Of these, 61 (over 20 percent) indicated that they had already adopted a product or process which they had examined at the exhibit or had definite plans for doing so.

So gratifying was this result that only recently a similar new products and processes exhibit was held in the New England area, in Boston. It is anticipated that more exhibits of this type will be initiated in the future in other regions of the Nation.

ON-THE-SPOT COMMUNITY ASSISTANCE

Another important activity of the Office has been on-the-spot assistance to State and local groups in combatting problems of local unemployment. On-thespot visits are always conducted in cooperation with State planning and development agencies, with which the Office of Area Development maintains a continuing close working relationship; at the same time, the activities of the Office are coordinated with pertinent functions of other Federal agencies, such as the Small Business Administration, the Department of Labor, the Department of the Interior, the Housing and Home Finance Agency, and Department of Defense.

A survey made in eastern Oklahoma provides an excellent example of how the Office of Area Development works with State and local groups in bringing available Federal assistance to bear on their surplus labor problems. Eastern Oklahoma has been severely affected both by drought and by the inactivity of its coal mines. Community and county groups in this area appealed to their congressional representatives to help in the solution of their problems. These Congressmen thereupon met with the Under Secretary of Commerce, who directed the Office of Area Development to make a survey of the situation and assist the affected area in whatever way it could.