of industrial sites. This is of extreme importance in the Kentucky develop ment effort.

Eastern Kentucky has many thousands of acres of forests. However we have been unable to maximize utilization of this great resource. The department of commerce has a wood utilization division which, in cooperation with other agencies both public and private, attempts to develop or locate wood-using industries in all sections of Kentucky, particularly in Appalachia. We have been handicapped in this program by a lack of both quantity and quality of certain types of timber. The Appalachian Act will help overcome this handicap. The department of commerce also has an agricultural development program which, in cooperation with other groups, attempts to create food-processing industries throughout the State. It is obvious that supplies of raw materials must be available before the creation of processing plants is feasible. Improved and expanded pastures will increase eastern Kentucky's meat and dairying potential. This will buttress our efforts to obtain food processors for the area.

Kentucky's already fine vocational education system is simply inadequate to meet the needs of Kentucky Appalachia. We need more vocational schools to train our labor force in the skills to be needed by the industry of tomorrow. The act before you will provide for this.

Kentucky has made great strides in organizing locally for total development. The "local development district" concept of this legislation is already in effect in Kentucky. However many of our greatly needed projects are stymied by the inability to obtain full financing. Provision of financing, as set forth in the Appalachian Regional Development Act of 1964, will materially enhance our development and implementation of greatly needed projects.

I have selected features of this legislation especially important to Kentucky development for comment, although many other features will be helpful to the State and localities.

I would like to again emphasize that passage of this legislation will be of great benefit to Kentucky in its all-out program for development.

STATEMENT BY R. K. KELLEY, UNIVERSITY OF KENTUCKY

Mr. Chairman and members of the committee, I am R. K. Kelley, chairman of the eastern Kentucky resource development project. This project is conducted by the Cooperative Extension Service of the College of Agriculture and Home Economics, University of Kentucky, and is supported financially by the W. K. Kellogg Foundation and the Commonwealth of Kentucky.

This is an action-oriented project which was launched in 1961 as a pilot for the Appalachian region and has as its major objective the supplying of technical, educational, organizational, and developmental assistance to a 30-county area in eastern Kentucky. This assistance is provided through a team of 12 resource development specialists located in the heart of the region.

Since the problems of eastern Kentucky and Appalachia have been well documented, I would like to take this brief opportunity to share with you some of our major findings and conclusions to date, as they may relate to the proposed Appalachian regional program which you are considering.

Our experiences during the past 3 years have led us to the following basic conclusions:

(1) The eastern Kentucky problem is a part of a larger Appalachian problem. Consequently, solutions to many of the basic economic and social problems of the region can best be approached on a regional basis. This is particularly true with regard to the problem of isolation and the development of the region's natural resources.

(2) The people of eastern Kentucky are willing to commit time and financial resources toward finding solutions to their problems. This is most evident in the fact that every county in eastern Kentucky now has some form of local development council dedicated to the formation and implementation of plans and projects for improvement. Each county group participates in an area development council which is concerned with multicounty programs and problems. It is evident, however, that in the absence of the necessary technical and educational assistance and of certain basic facilities such as transportation, flood control, etc., the efforts of local individuals and groups will show limited results. (3) Permanent and effective solutions to the complex and deep-rooted problems of the region call for comprehensive, long-range approaches. These long-range

solutions must place major emphasis on the development of both the human and natural resources of the region. Implementation of a total program of development with the necessary input of technical and financial resources will maximize results and enable the region to move rapidly toward self-sufficiency.

STATEMENT BY B. F. REED, Drift, Ky.

Mr. Chairman and distinguished members of this committee, my name is B. F. Reed, I served as the original chairman of the Eastern Kentucky Regional Development Commission.

It is in this capacity that I want to speak, on behalf of our commission and all citizens of eastern Kentucky, to express our sincere gratification to you for your consideration of the Appalachian Recovery Act, and to urge your favorable action on this legislation to allow us, finally, to commence real progress on a problem which has plagued our people for too long.

Our commission consists of nine men, representing all areas and interests in our region, who serve without pay and who have worked hard in their efforts to come up with an effective program for development. Our paid staff has consisted of one man-John Whisman, who is testifying here today, also, and who is also a hard worker-and a "wearer of many hats," as you will see. The commission was formed from a voluntary citizens group and was given statutory basis in Kentucky after the disastrous flood of 1957 struck a terrible blow, and proved to be an inspiring challenge, for our people.

On January 1, 1960, our commission presented our recommendations to Gov. Bert Combs. The Governor adopted our Program 60, as we called it, and put many of its recommendations into effect. Gov. Edward T. Breathitt has since succeeded Governor Combs and is continuing the special action to the limits of the State's abilities to carry out this program.

Program 60 is well reflected in the report of the President's Appalachian Regional Commission and in the Appalachian Recovery Act.

We of the Eastern Kentucky Commission know our people and we know our country thoroughly. We have rejected impossibility in looking at our problems, but we are interested in nothing but a realistic approach. We reject the air of pessimism which the national press has expressed for our region, in recent times. But we know that our job ahead is a tough one, requiring hard work and sacrifice on every hand. We have outlined a program which only gives us the opportunity to do this tough job in a good fashion.

Our people in eastern Kentucky are carrying out more development action now than ever before in history, without an adequate chance for success against our overburden of problems. We know these people and we know that they want to go to work to justify your faith in their ability to make this program a success.

STATEMENT BY DR. ALEX SPENCER, WEST LIBERTY, KY., CHAIRMAN, THE EASTERN KENTUCKY REGIONAL DEVELOPMENT COMMISSION

Mr. Chairman and distinguished members of this committee, I am Dr. Alex Spencer and I am the current chairman of the Eastern Kentucky Regional Development Commission.

My purpose here is twofold: First, I want to urge your approval of the Appalachian Recovery Act and to assure you that you are considering a sound and workable program to meet one of the Nation's most critical and insufferable problems. You consider here a program which is identical in base outline to our commission's Program 60. This program was presented to eastern Kentuckians in 1960. It has met careful study and has been approved over and over again by the people of our region as well as by many technical and professional groups. Many parts of this program are now in action in my region and your approval of H.R. 11065 will make possible a complete strategy of action for the first time.

Second, I want to reject the pessimism which has been painted in much of the picture of Appalachia given to the Nation in recent press coverage, and to replace it with our full confidence that, with this program, we can build new opportunity and solid growth in our region.

The current heavy national attention has been focused on this region because of the response of the late President Kennedy-and now by President Johnson

and by your committee-to the problems of many of us in the region,, through our Governors, for a sound program of development. I think it is most unfortunate that almost all of the press coverage has dwelt only upon the problems of our people, without at least a reasonable reporting of our positive development program which you are now considering.

I am concerned, not because we are thin skinned in Appalachia—we know about our problems and we have faced them. My concern is because we are frankly proud of the efforts our people are making, even now, in trying to handle these almost impossible problems, and we are also proud of the total program of development we have dreamed of and designed. Now we are really hopeful that your approval will give us the final action we need to put this program to work.

The Nation is hearing about Appalachia today, not just because we have problems-we've had them a long time-but because we are trying to do something about them.

Appalachia's problems mean more to Americans today because those same problems-increasing distress and unemployment in the midst of a wealth of resources- -are beginning to trouble this whole Nation. And the program you consider here has importance to the Nation, not just because Appalachia is a problem to the Nation, but because this program is a pioneering effort for the Nation in cooperative action for sound regional development.

But, the important thing for now, gentlemen, is that people in this great part of America are living without American opportunities. This problem has been at emergency levels for several years—it must be dealt with now. Yet, in this program for our people, we do not ask you to give even opportunity to us in response simply to our need. We do ask you to help us create a foundation upon which we can build our own opportunity. This program could have been designed in other ways if help or gifts were our only problem. This program is designed to put us to work.

On behalf of our people, please, let us begin.

TESTIMONY RE APPALACHIA BY KENTUCKY CHAMBER OF COMMERCE, LOUISVILLE, KY.

My name is G. J. Tankersley. I am president of the Kentucky Chamber of Commerce, a statewide business association of more than 3,500 members, with principal offices at 670 South Third Street, in Louisville, Ky.

It is the desire of my organization to speak for the record with regard to H.R. 11065 and/or H.R. 11066 and the several titles involving Appalachia.

Our organization has been cognizant, for many years, of specific problems in the Appalachian area of our State. We know full well that the area has been blighted, due to conditions of nature and the shortcomings of men. There is little question but that the topography of the land, itself, has made costly and delayed the building of needed access roads in the area. This same topography has caused major problems of flooding when excessive rains are experienced in the area. The road problem created isolation of a great population of people and the problems of flooding brought on numerous periods of devastation and frustration.

Manmade problems of the area must focus on the extraction of basic resources such as coal and timber. We all know that the manpower utilized in coal production today is but a fraction of previous peak periods. Timber and wood utilization industries have not provided the basic employment which might logically have been expected from a region which seemingly is capable of splendid wood crops under sound management practices.

We know the people of the area to be fine folks, having a high percentage of Anglo-Saxon descendants in the populace. The people, by and large, are proud and desirous of being good citizens.

Underlying the entire problem area of Appalachia, the most glaring deficiency which compounds the many ills is the matter of formal education. The area simply has not done an adequate job of educating its young people in conditions of one-room schoolhouses with, oftentimes, underpaid and, in many cases, dedicated but unqualified teachers.

A lack of education appreciation on the part of parents has been a problem in terms of keeping the children in school. The fact that "mom and dad" for several generations have only gone to the second or third grade, served to establish educational levels for the children, even now when many areas have new

modern schools. Dropouts have been a costly feature and illiteracy became a drag on the entire area.

There may be surprise on the part of some people that we, a chamber of commerce, would endorse a program such as is contained in H.R. 11065. We have taken a close look at the entire proposal made by the President's Appalachian Regional Commission. We held meetings with our business leadership in the affected area. On April 13, 1964, at our annual meeting, Mr. John Whisman, Executive Secretary to the President's Appalachian Regional Commission, summarized to our convention the final report to the President on Appalachia. On April 14, 1964, the board of directors of the Kentucky Chamber of Commerce adopted a resolution supporting the report of the President's Appalachian Regional Commission. The board of the Kentucky Chamber of Commerce is bipartisan in composition and is a blue-ribbon group of some 77 of Kentucky's leading industrialists, bankers, main street businessmen, and professional men. There was not a dissenting vote on adoption of the resolution just referred to. If one were to categorize the basic philosophy of the chamber's board, it would have to be described as "conservative in nature."

Our Congressmen and Senators from Kentucky are well aware of our consistently conservative stands on other issues involving Federal action or intervention.

My purpose in making this last reference regarding the chamber's action is to emphasize that we see in this proposal a logical reason for the Federal Government to be of help in correcting deficiencies in the Appalachian area. Our earnest hope in this proposal to solve the ills of Appalachia is that the job be done as expertly and businesslike as possible-that the taxpayers of the Nation get a dollar's worth of results for every dollar expended.

We feel it is important to pose the question: "What is the Appalachian area costing the Nation's taxpayers today?" Testimony by Mr. Franklin D. Roosevelt stated that the Federal Government is now putting $41 million a month into the Appalachian region in welfare payments, or almost a half billion dollars annually. We note that this expenditure is not for corrective measures, but only to sustain conditions as they are. The future must provide something better than merely a relief program. The area must rid itself of relief and become productive and self-sustaining.

The entire campaign to cure Appalachia must not become a boondoggle or a political experiment. It must bring about results, or it will be a waste of re

sources.

We further note that Mr. Franklin D. Roosevelt, Jr., again in his testimony, referred to the Appalachian blueprint as "a plan to create an economic base on which private enterprise can build." This statement is one in which the Kentucky Chamber of Commerce concurs and would want it to serve as the real basis for any action in Appalachia. We feel that the Federal Government should do those things which are normally in the province of Government, to provide, but certainly the Government should not get into areas where private enterprise can do the job.

For the record, Kentucky's people in Appalachia have the lowest median income of any of the 10 affected States. Our Appalachian area median income was $2,302 in 1959, according to the 1960 census. The range was from a low of $1,324 in Owsley County to a high of $5,055 in Boyd County. The area median referred to compares to a statewide median income of $4,051 for the same year.

Another example of comparing the Appalachian region of Kentucky to the rest of the State would be unemployment. In Kentucky's Appalachia, the unemployment rate was 8.4 percent in 1962. For the rest of the State, unemployment was 4.1 percent. Twenty-eight percent of Kentucky's population is in the Appalachian region (or some 853,700 people).

Earlier, I mentioned that we had conducted meetings in which recommendations of the President's Appalachian Regional Commission were studied. One of our most prominent business leaders of the area stated that "three primary courses of action would solve the problems in our area. First, we need a system of highways to open up our area to tourists and commerce. Second, we need to control the streams and rivers to prevent recurrences of tragic floods. And, third, we need to do a better job in basic education by combating illiteracy; decreasing dropouts; and promoting programs of vocational rehabilitation."

All of us quickly recognize that the heart of the program for developing Appalachia rests in those three areas.

The concepts and proposals of remedy in the President's Appalachian Regional Commission program are varied and, in many cases, not specific. Nonetheless, the fundamental aspects of the report offer an approach to the solution of longstanding problems. We have commended the President's Appalachian Regional Commission concept to our local chambers of commerce and encouraged them to closely identify themselves in its support; particularly to furnish business leadership as often as it might be utilized in the orderly implementation of the program. We feel that businessmen can well serve to assure maximum benefit results of every tax dollar invested.

I would be remiss if I didn't comment on the testimony advanved by Interior Secretary Stewart Udall, and the assurance he gave that the area was unsuited for a Tennessee Valley Authority treatment. In the reporting we received, he was quoted as saying that such a development would not be adaptable to the region's topography or needs.

I can assure you that there would be strong and emphatic resistance by the Kentucky Chamber of Commerce to a program of competition by the Government as a utility operator or to the elimination of segments of private enterprise in Appalachia because of Government.

We have taken note of TVA Chairman Aubrey Wagner's testimony which hinted that TVA was ready to join the fight on problems in Appalachia. There seems little justification to accept Mr. Wagner's gracious offer in our opinion. Mr. Wagner himself has stated that about one-third of Appalachia is within the TVA territory-some 103 counties. If TVA is indeed a medicine man, why then are these 103 counties included as problems in Appalachia? The Tennessee Valley Authority is not exactly in its infancy as a Federal agency and it seems that if it has any curative powers then its medicine would have worked by now. We also note that TVA constantly makes huge purchases from foreign manufacturers-something which isn't exactly helpful to our own unemployment problems here in this country. Most recently a $2.9 million contract was awarded an Italian firm for galvanized-steel towers. Land purchase practices in the Land Between the Lakes area of western Kentucky by TVA have come in for strong criticism in recent weeks. This mammoth agency we contend should be contained to its original purpose and not be given predatory carte blanche to roam throughout the land merely because, as an administration official was quoted: "After all TVA has to justify its existence, too." We would agree with the latter part of this same quoted statement which said: "Of course if TVA had done the job in its own area, the need for this new program would not be so great."

We state this to assure you of our strong opposition to TVA having any role in the Appalachian program.

Yes, we want to see a program of development to cure the ills of Appalachia that is why we look with favor on the President's Appalachian Regional Commission proposal, but we do not want to see elements of government introduced which would create doubt as to the real intent of the program and which compete with private enterprise.

The only valid purpose for a program to assist Appalachia has to be aimed at what ultimately helps the people. Solutions which would transfer these people from "relief roles" to payrolls and then to "tax rolls" would be most welcome. Such a transition is not only desirable, but mandatory if these people are ever to contribute rather than subtract from the Nation's resources. We know that a serious cancer of low morale exists with a great segment of the population in the affected area. Further, too many have not been able to make any contributions to citizenship or to the responsibilities of citizenship.

In conclusion, may I say that government and business could do well to work more closely together for sound results in solving the complex problems of an advanced society in this day and age.

Our forefathers established our form of representative government long ago. Somewhere in the interim, the paralleling roads of cooperation for the national interest from government and business have gotten too far apart.

I believe business truly wants to be a full partner in molding the decisions of economic and national destiny. It is in this spirit that I make this statement here today. I thank you.

Mr. DAVIS. We will now hear from Governor Clement, the Governor of the sovereign State of Tennessee.

Governor, we are delighted to have you present today. We are especially happy that you were escorted in this room by Hon. Robert