that my country has been working with this problem from its very inception.

I am aware that we must come to grips with some of these things and try to do what we can at the national level. I also am aware of the fact that there is a right and wrong way to do what is required. If we reflect on history we know this to be true.

I am much in favor of the objectives of this program. We have had programs come before us that are going to solve everything like the area redevelopment program. You will remember some of us questioned some of the procedures and whether or not some of these programs were sound while that was under consideration.

Now, this morning it is called to my attention by farmers who are here from Iowa that perhaps the people did not think about the fact that there are hundreds of millions of acres of land out of production in America today, something like 53 million acres out of production under Government programs. All of these acres are more productive than any that you could possibly bring into production in the Appalachian area.

These farmers, are very disturbed, sir, that you propose to bring in 9,500,000 acres of land in production, grassland production, for the raising of beef cattle in the Appalachian area when the cattle prices are so depressed and when they know that they can produce cattle in their country more economically than you can ever produce cattle in the Appalachian area under the program you have. As a farmer, you must know that a 25-acre farm is a pretty uneconomic unit to raise cattle. Is that not right?

Mr. ROOSEVELT. Now, first of all let me point out that we are not bringing into production 92 million acres. These are acres which are now being farmed on a subsidence basis all too often. What we are simply doing is to upgrade the capacity of these acres in a more proper type of farming.

Secondly, you refer to 25-acre farms. This bill refers to a grant of up to 80 percent of the pasture improvement, not to exceed 25 acres on any one farm. Then he can borrow from the farmers home loan for additional pasture improvement. Most of the land that is out of production today is cropland acreage. It is corn producing, wheat producing, soy bean producing.

This is not the kind of farming that is going on in Appalachia. There has been a big shift and I am sorry that you were not here when Mr. Baldwin brought up the cattle problem.

Mr. SCHWENGEL. I was here.

Mr. ROOSEVELT. Mr. Baldwin brought this up and the trend for the last 15 years in Appalachian farming has been away from the cropland type of farming and into more livestock type of farming. All we are saying here is, Mr. Schwengel, and you as not only a good but a great historian, know one thing, that what a farmer hates to do more than anything else is get off his farm.

If you want to tell these farmers in Appalachia that they should not continue to live on the farms that they and perhaps their daddies and granddaddies lived on, well, I don't want to do that bceause this is a free country and people farm where they want to farm.

All we are doing here is to tell them that we think the anticipated needs for beef and meat in the next 25 to 30 years is going to be fan

tastically higher than it is today and this area will be needed as a cow-calf source for the Iowa farmers who fatten these very calves.

Mr. SCHWENGEL. You mentioned this coming off the farm. Just how many people have come off the farm since 1932?

Mr. ROOSEVELT. An awful lot, all the young people.

Mr. SCHWENGEL. For what reason?

Mr. ROOSEVELT. Two reasons. One, because farming has become a highly mechanized operation today as opposed to what it was even 25 to 30 years ago. Secondly, because of the high investment in machinery required for mechanized farming you must farm on larger farms. The small farm is a much less economic unit.

Mr. SCHWENGEL. Right.

Mr. ROOSEVELT. Therefore, if one farmer sells to his neighbor it becomes a more economic unit and the neighbor can then mechanize and justify the capital investment in the machinery.

Mr. SCHWENGEL. And the farm programs we have had since 1932 have tended to take farmers off the farm. Now we are going back. If you are going to support up to 25 acres and the farmer can't have much more than 25 acres more than that, and a 50-acre farm, cattle farm or crop farm, is a most uneconomic unit. Isn't that true?

Mr. ROOSEVELT. First of all, I am not saying that the farm has to be limited to 25 or even 50 acres. That is what you just said but I don't say that.

Mr. SCHWENGEL. If you are only going to help them up to 25 acres. Mr. ROOSEVELT. No. The Secretary of Agriculture is then empowered by this bill to loan additional funds to improve the rest of his farm.

Mr. SCHWENGEL. Which he can do now.

Mr. ROOSEVELT. Yes; he can do it now and some of them are doing it now. That is why there has been this trend away from cropland farming into more cow-calf operations.

Mr. SCHWENGEL. Mr. Secretary, are you aware of this article in Reader's Digest by Charles Stevenson entitled "Is This the Way To Fight the War Against Poverty?"

Mr. ROOSEVELT. No; I am not familiar with it.

Mr. SCHWENGEL. The subtitle reads:

The Area Development Administration was set up for a highly worthy purpose but look at the way this U.S. agency is squandering tax dollars and callously ignoring the rights of individual citizens.

This is what a group of farmers called to my attention this morning and said you tell the Secretary to read that and then think again about the proposed farm program he has in this Appalachia bill. My farmers are truly upset.

Mr. ROOSEVELT. I don't think they have any reason to be.

Mr. SCHWENGEL. They may not.

Mr. ROOSEVELT. I think if they read the bill carefully they would realize that this is not a bill which is going to hurt the Iowa feed lot operator or the Iowa farmer, corn and feeder operator.

Mr. SCHWENGEL. It is going to be awful hard to convince Iowa farmers of that fact and there will be some testimony in here from them directly and from good, substantial, solid, qualified, thinking farmers who will have some pretty good searching comments.

Mr. ROOSEVELT. I hope to be here and listen to them. I hope the committee will give me a chance to rebut their testimony or to support

it. Mr. SCHWENGEL. I am also wondering about your testimony where you said you would treat these things on a regional basis. It is evident that you ignored the national farm problem, that this may add to it if we accept it in its present version. I want to have some better answers than have been given apparently up to this point.

I think the agriculture provision is one of the most inadequate thought out provisions coming before the Congress, reverting back to my other statement when I said there is a right and wrong way to do these things. I think we had better do a lot better job of studying this total question, not as it alone relates to that particular area but as it relates to the national interest.

You just cannot ignore the national interest. That is one of the troubles with a lot of these programs. To some it seems like a political answer rather than an economic answer. I am wondering if there is some truth in that.

Mr. ROOSEVELT. Congressman, Secretary of Agriculture Freeman' supports this Appalachian report and bill and he will be testifying, I think, later this week, and at that point, I urge you to discuss the matter with the Administration's agricultural leader.

Mr. SCHWENGEL. Again, Mr. Chairman, I want to say that the gentleman has handled his assignment very well.

Mr. ROOSEVELT. Thank you.

Mr. SCHWENGEL. I did not know you were a farmer. I am glad to know this.

Mr. ROOSEVELT. Too few people do.

Mr. SCHWENGEL. I will talk to you about some of these problems and let you know what Iowa people are thinking about. The farming problem is a very serious problem.

Mr. ROOSEVELT. It certainly is.

Mr. DAVIS. Mr. Secretary, Mr. Tuten is a member of the full committee, but not a member of the ad hoc subcommittee. As long as you are here, Mr. Tuten, do you have any questions you would like to ask Mr. Roosevelt?

Mr. TUTEN. No, sir.

Mr. DAVIS. Do you have any further witnesses today Chairman Buckley?

Mr. BUCKLEY. No, Mr. Chairman. I think the Secretary has explained very well the full Appalachian situation.

Mr. DAVIS. Mr. Buckley has appointed me chairman of this ad hoc subcommittee. Of course he will give us his counsel and advice as he has over the years, and he will be participating in the hearings and in the final writing of the bill, but if there is no objection, this committee will meet at 10 o'clock tomorrow morning in this room, and we will hear from the Secretary of Commerce, Luther Hodges.

We will insert the President's letter, summary report, and section-bysection analysis at this point.

(The letter, report, and analysis follow :)

Hon. JOHN W. MCCORMACK,

Speaker of the House of Representatives,

Washington, D.C.

THE WHITE HOUSE, Washington, D.C., April 28, 1964.

DEAR MR. SPEAKER: I am today sending to the Congress for its consideration a bill designed to make possible the economic development of the Appalachian region.

Appalachia straddles a 10-State area of more than 165,000 square miles, with more than 15 million Americans in residence. The general economic progress of the Nation has passed Appalachia by-for reasons which are cheerlessly clear: (1) Difficult-and in some instances-impossible access.

(2) Inadequate control of water-which breeds both floods and scarcity of water for industrial and recreational purposes.

(3) A mineral base of coal, timber, and agriculture sorely in need of creative attention.

The visible lag of Appalachia justifies the special programs I respectfully request you to consider.

But behind the description of the need of a region lies the desolation of a people.

I have seen the despair and the hopelessness in the faces of these citizens. What exists in this area is a challenge to the ingenuity as well as the compassion of the Congress.

The rollcall of deficiencies in Appalachia is not a happy catalog. In this region too little human potential is realized. Too ineffective a use of physical resources is a result. There is a shortage not only of promise, but of hope.

The investment I ask the Congress to make is as rooted in fiscal commonsense as it is in human compassion.

The Federal Government alone spends over $41 million in welfare relief in this area every month-nearly one-half billion dollars a year. With some 8.5 percent of the U.S. population, Appalachia receives 17 percent of all surplus commodity foods dstributed to the needy throughout the country.

This bill I submit to the Congress is the result of a year's study by the State governments and top Federal officials. It aims not merely at the symptoms of economic malnutrition, but at its causes. To label the region luckless or unblessed is no answer. Our response must be to put to this task the planning, the priority, and the money required to assist those who want and need help for themselves and their families. To this bill I attach a copy of the report of the President's Appalachian Regional Commission, appointed by President Kennedy.

The initiative and concern demonstrated by State governments is encouraging. They came together, bound by a common problem and allied in a common goal. They approached the solution without regard to partisan politics.

I met with the Appalachian Governors. I was witness to their sincerity—and their determination-to commit State resources to this attack on inadequacy. The Federal Government should not stand aloof from their efforts.

The Governor of Ohio has advised me that his State which was originally tendered an invitation by the Council of Appalachian Governors and the Presidents' Appalachian Regional Commission to join with the other nine States of the region in a joint effort to lift the economy of the area has decided to participate in the program. It is both appropriate and desirable that those portions of Ohio lying within Appalachia join with the remainder of the region and accordingly the bill I am sending to the Congress reflects this.

The programs are basic. They focus on clear and primary needs—such as access to the land-construction of public works—and improvement of mineral and land use:

1. A developmental highway system of 2,350 miles, with a total cost of $920 million and fiscal year 1965 cost of $90 million. Although the Federal and State contribution would be on a 50-50 basis, where the States are unable to meet this formula, the Federal share could rise to 80 percent.

2. An acceleration of water facilities construction with emphasis on flood control, industrial, and recreational impoundments, and sewage treatment. Fiscal year 1965 cost would be $45.8 million.

3. A pasture improvement program to convert marginal farmland to pasture for livestock production. Fiscal year 1965 cost would be $22 million.

4. An assistance program for timber management, manufacturing and marketing. Fiscal year 1965 cost would be $6.7 million.

5. Expanded programs for promoting new uses of coal, improved mining practices and land restoration following mining operations. Fiscal year 1965 cost would be $13 million. This figure includes a $10 million increase over the amount originally recommended by the Appalachian Regional Commission, based on my strong views in which I am joined by the Council of Appalachian Governors that the $10 million should be added.

6. Stepped-up human resources programs, with those programs administered by the Office of Economic Opportunity to be handled by that agency when it is established. Fiscal year 1965 cost would be $71 million of which $34 million would be administered by the Office of Economic Opportunity.

7. Establishment of a Federal-State regional commission for comprehensive planning to guide all levels of Government and private agencies in their continuing attack on the economic distress in the region.

This entire program-estimated at $228 million plus $34 million included in the antipoverty program-was included in the contingency item of $500 million in my 1955 budget submitted to the Congress last January.

This is an active beginning to end an old problem in Appalachia. It is the judgment of both the experts who labored on the details of the program and the Governors who monitored the plan every step of the way that this program will work visible improvements in a very short time.

I strongly urge the Congress to attach to this bill the urgency and the need that is so plainly written on the faces of Appalachian citizens. They are looking to you and to me for help so they can help themselves.

Sincerely,

LYNDON B. JOHNSON.

SUMMARY REPORT OF THE PRESIDENT'S APPALACHIAN REGIONAL COMMISSION

Appalachia is a region apart-geographically and statistically. It is a mountain land boldly upthrust between the prosperous eastern seaboard and the industrial Middle West-a highland region which sweeps diagonally across 10 States from northern Pennsylvania to northern Alabama. Appalachia measures to 165,000 square miles-an area slightly larger than California-and includes parts of Pennsylvania, Maryland, Ohio, Virginia, Kentucky, Tennessee, Alabama, North Carolina, and Georgia, and all of West Virginia.

Appalachia's rich natural endowment has benefited too few of its 15.3 million people. The average Appalachian, whether he lives in a metropolis, in town, on the farm, or in a mountain cabin, has not matched his counterpart in the rest of the United States as a participant in the Nation's economic growth.

The most serious problems which beset Appalachia are low income, high unemployment, lack of urbanization, low educational achievement, and a comparatively low standard of living. In Appalachia, almost one in three families lives on an annual income of $3,000 or less, compared to one family in every five elsewhere in the United States. The Appalachian unemployment rate is 7.1 percent compared to 5 percent for the balance of the United States. These are but a few indexes of the economic gap which separates the Appalachian region from the rest of the Nation. The recommended programs which follow are designed to lift the Appalachian economy to a level closer to that enjoyed by the balance of the country.

The Commission believes therefore that a coordinated, adequately funded, and sustained effort must be undertaken to restore th region's economic vitality. A number of recent developments have indicated clearly that the Appalachian people understand their problems and are determined to solve them. And although the Appalachian people are clearly striving to meet the challenge of deprivation, a process of regional development must begin now if Appalachia is to participate fully in the American society.

The major objective of this regional development process is clear; Appalachia must attain an employment base which can sustain its people at a level of dignity and prosperity comparable to the relatively affluent Nation of which it is part. The conversion and processing of its raw materials should be done locally to the fullest extent possible. New industries, dependent not on the resources of the region but on the strategic location and potential market which Appalachia