civilization developed, and transportation became more of a factor in the economic life, this section began to dry up and the opportunities began to decrease simply because they were cut off from the rest of the world at a time when, if you were not connected with the rest of the world, you did not do very well economically.

Because of a lack of transportation and because of being locked in, industry did not develop there, and because industry did not develop there the young people, after finishing high school, would soon leave that area. We had one county year before last from which every single graduate of the high school has left the county for good. That kind of loss of human resources has made it difficult to provide the necessary leadership.

We find here a situation that needs some new encouragement and new effort if we are to break out of the downward spiral that the economy and the life is now taking in the Appalachian region.

North Carolina has not just been sitting around waiting for something to be done by someone else. The same services available everywhere in the State are available to the people of our Appalachian region. Among them are education, health, welfare, agriculture, industrial, and natural resource development. We put the same emphasis on industrial development and take all the possible prospects we can into this region.

We have four State-supported 4-year colleges in the region-two just made 4-year colleges. We have three industrial education centers to induce students for industrial training beyond high school. We have now a demonstration project in three of the counties dealing with illiteracy and technical training for dropouts in an effort to get them back into the economic manpower pool.

There are many things that are not done in other parts of the State, such as the development of the recreational industry through the North Carolina Recreation Commission. Also, North Carolina provided the right-of-way for the Blue Ridge Parkway which now brings millions of visitors in that part of the State.

The State has probably done more for the Appalachian counties than it has for other counties in proportion to the number of people there. I simply say this to say I do not think any of the States have been neglecting this region, but it is far more difficult to do something about.

We are talking about highway funds in this bill. We think it is the most essential part of it. Already we are spending almost 2 to 1 in ratio to the people there.

The report of the President's Appalachian Regional Commission shows we only have 17 percent of our population in these counties but over the past 3 years, and presently, we are spending 32 percent of all highway money. We are attepting to help them become connected with the rest of the State and the rest of the country, but nevertheless, in spite of this expenditure, we are not beginning to catch up because we have lagged so long and because the costs are so great in mountainous construction.

We also have an illustration that the people in this area are willing to take the lead and have taken the lead.

In 1948, the Western North Carolina Associated Communities made. up of most all the counties west of Asheville over to the Tennessee line formed themselves into this kind of an association.

One of the things they accomplished was to establish "Unto These Hills," an outdoor historical drama of the Cherokee Indians. This has been the most successful outdoor drama in America. People have not only come there in record capacities to pay an admission fee to get in, but they have also spent money for lodging, food, transportation, and they have done much to improve the economic life of the western type of the State.

They have also done a good many other things, including planning for the future and including encouragement of local communities to look to their own resources, recreational and industrial, and they have done much to bring new industries in where new industries can go.

We also have the Northwest Carolina Association and the Asheville Agricultural Development Council, and already these people have been working together.

I cite these simply to say that they have taken the initiative. They are now organized and ready to take advantage of any resources available to them. I think they could put to good use the development of their economy and the human resources and the natural resources that the provisions of the bill now before you provide.

We also have a problem of agriculture because simply no longer is it possible to farm in the same way it was found profitable 30 or 40 years ago. The farming techniques are not the same. The small farmer has simply been bypassed now. Technology has made the way he did it obsolete. We need a new approach to agriculture.

This bill provides opportunities for moving into new sources of income from the soil.

For example, it would develop pastureland. We have found in several counties where this has been done, this is a very profitable undertaking and can be done well and can be done more economically than cattle raising can be done in Texas. Here is an opportunity to help the small farmer get into something that he can do.

We also have made repeated efforts to put new industry there. North Carolina had led the Southeast in attracting new industry. We have not been too successful in western North Carolina and in the Appalachian region, not that the people are not willing to work, and not that the people are not the kind that could readily acquire skills, but simply because of transportation problems.

One or two sections where we have put the interstate highways, we have found industry is readily attracted because transportation is there, because the people are there, because people are anxious to learn and capable of learning and ready to go to work and work hard. In all other ways, it is very attractive to new industry. I felt all along we could solve most of our problems with careful planning and with the development of the community resources, and most of all, with the development of a better road network. And so, to get away from the disadvantage of poor access, we have been extremely interested in the provisions for interstate highways. We have spent a great deal of money there, but we could not spend it all there because here are less than 20 percent of the people, and nothing like 20 percent of the transportation, and in measuring highways for Federal aid, you must take into consideration the traffic counts and the potential use. We simply cannot justify building any more roads in the west than we are

now building because of the necessity for looking out for the bulk of our transportation needs elsewhere.

North Carolina ranks third in the Nation right now in the percentage of highway miles paved, but still we have not been able to do enough in western North Carolina. So we think the provision that provides new funds to get into areas long neglected, to open up country that people are leaving and where people who stay are suffering, that we will make a very wise investment when we spend money to build highways in these regions.

The provisions for providing matching funds, 50 percent, or up to 80 percent, to build highways of the standard of the interstate highways would certainly do much for the whole economic life, more than any other one thing. The additional 500 miles authorized for feeder roads would enable us to tie this in with almost any county making almost every community accessible to people and making transportation available in a way that would help the total industrial and economic development. We are ready to match our part of this.

North Carolina is ready to put up its share. We are ready to proceed with the design of the roads. In fact, we have already done some of the preliminary work so we will be ready for this program, or whatever program of roadbuilding we can eventually have authorized.

And so North Carolina is particularly interested as a means of selfhelp in developing its own economy to have the assistance of the Federal Government in building new highways and new access to its western counties.

Now, in saying that is our great interest, we also are well aware of the meaning of the long-range planning that would come from the work of a development council of this kind. We have seen it work on a limited basis in a few counties. We are satisfied that it will work even better with several States participating.

The only way I know you can get several States together in this fashion with the authority to act is through Federal legislation. So I think having the long-range view of things through the Appalachian Regional Development Commission will give us a chance to look at these problems as they continue to be solved, and to look for ways to solve them more readily. This kind of planning has been so well proven useful on a smaller scale that I am satisfied this would bring one of the great hopes of progress in the long run.

This also envisions the creation of smaller development groups, planning groups, and I think if we involve many, many people on the local level in looking to the future in developing plans for proper use of all the resources for the development of that future, we are getting at the basic root of the problem.

We also are interested in the timberland development potential that is provided in this bill. Also with the vocational rehabilitation, and although we have educational institutions in the region doing the job, we would like to have the resources to move into some of the areas we have not been able to get into under the present formulas.

Also, we are interested, not as acutely as some of the other States, in the water-pollution provisions. We have already done much in this in North Carolina, but many, many communities simply do not have the resources and under the present allocation formulas we cannot get the additional public works we need. Some of the communities simply

do not have the kind of attack structure that can support it. If we are to clean up the streams, and if we are to make that part of the State as attractive as it once was before man spoiled it, then we need this kind of assistance. We have already started our local people and city and town and county officials planning so we can take advantage of the water and sewage facilities as provided in the bill.

I think the people in western North Carolina, the people in the whole Appalachian region, are solid, hard-working people who, if they had any hope, could be extremely ambitious. I think that is a part of the country that could be extremely productive. I think it is ready to go. It simply needs our help and this bill provides that help. I certainly hope that Congress will act favorably upon this bill as presented by the President.

Thank you very much.

Mr. DAVIS. Thank you, Governor.

It is really gratifying to know that your own State on its own is making progress in this direction. You touched on pastureland, building access roads making it possible for men to go in and out from main roads. You touched on recreation.

I feel you think that just a little help given these worthy people would give them a strengthened morale. They would feel they would have a real opportunity in life. They are not satisfied to draw assistance or relief of one character or another.

We are very grateful to you for taking the time to come up here and express your views as the Governor of a State representing a great people.

Mr. AUCHINCLOSS. Mr. Chairman, I would like to say to the Governor that I have been very much impressed by the testimony being submitted on this subject by the representatives of the State because it is apparent that the States themselves are well aware of this situation and are trying to do something about correcting it. It raises the quesion in my mind and I would like to have your views-as to whether this proposed plan should be operated by the Federal Government, or under the control of the separate States with Federal aid-but controlled by the States to develop their own plans?

Governor SANFORD. Yes. I think the provisions of the bill generally provide that the States would have a strong voice. The Commission itself would be made up of a Federal representative and the Governor, or a representative of each Governor.

I think we need something to tie us together in a way we have the authority to plan and to act and to promote. We have discussed this, as you know, for almost 3 years since we started with an Appalachian Governor's Conference looking to plans as to how we might do something for the total region.

I think it is fair to say that all of the Governors, at least most all the Governors, concluded that just a loose arrangement was not adequate, and we needed something to put us together in a way we could do the job better. I think we also concluded that some of the problems spilled over State lines and we needed close cooperation and coordinated programs.

The highway would have to be designed as a total concept for the whole region. I think we have concluded, and I certainly share that conclusion, we need a cooperative effort and not just a Federal program-a cooperative effort under the benefit of Federal legislation.

So I do not think we are saying this is a Federal program imposed and handled by the Federal Government, but rather, it is a cooperative program sponsored by the Federal Government.

Mr. AUCHINCLOSS. Thank you very much.

Mr. BALDWIN. Governor Sanford, I am bothered by this bill. There is not only a provision for an Appalachian Regional Commission upon which apparently there is general agreement as far as the States are concerned, but in title IV of the bill there is also a provision for an Appalachian Development Corporation.

Now, it is true that the States do have representation on the Commission. Each State will have representation on the Commission. But if I read this bill correctly as to the Appalachian Development Corporation, the definition of the management of the corporation is in section 402, as follows:

The management of the Corporation shall be stressed in an Administrator, who shall be appointed by the President, by and with the consent of the Senate.

There is nothing in this about State participation in the administration of the Corporation.

Governor SANFORD. Yes, sir; I think you will find further down in the bill, perhaps, not only a voice for the States and for the communities that are borrowing money, or selling their bonds, but I believe the way this was originally contemplated, and I think it is written in the bill, ultimately it would pass entirely to these local groups and State groups that owned it by virtue of their purchasing stock in order to participate in the loan and grant features.

Granted, that is not clearly spelled out in the beginning of the title. I think it is anticipated that ultimately it becomes an almost private corporation controlled by the local governmental authorities. I think it bothers everyone.. It is a little bit of an unusual procedure.

On the other hand, it looked like it was a better procedure than simply dealing with the matter on the basis of grants from the Federal Government.

It looked as though this thing could be put on a self-supporting basis. It would give us investment money where investment money is hard to obtain. The people who studied this and worked on it, and our staff people who work almost every weekend for a year, meeting together here in Washington, concluded this might be the best approach because it would provide them with funds and provide them in a way that ultimately would be self-supporting.

Mr. BALDWIN. You mentioned that the States eventually under this act would be able to buy stock in this Corporation, but on page 30 of the bill, section 405 (a) says:

The Corporation shall have nonvoting common stock, and initially shall also have nonvoting preferred stock.

If I understand this correctly, when the States come into the picture and they can have the right to buy certain of this nonvoting common stock, the Administrator will still have complete independence.

Governor SANFORD. I think that is right for a while. Your staff people could answer that question far better than I.

Let me read you from page 4 of the analysis:

Title IV provides for creation, management, and financing of the Appalachian Development Corporation and describes its authorities and powers. The Corporation would initially have a mixed Federal and non-Federal ownership, al