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The Bureau of the Budget advises that it has no objection to the submission of this report.

Sincerely yours,

VICTOR E. COOLEY,

Acting Director.

Hon. LISTER HILL,

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE,
Washington, D. C., February 17, 1956.

Charman, Committee on Labor and Public Welfare,

United States Senate.

DEAR MR. CHAIRMAN: This letter is in response to your request of July 30, 1955, for a report on S. 2663, a bill to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas. The bill would establish, within the executive branch of the Government, a Depressed Areas Administration under the direction and control of an Administrator, appointed by the President with the advice and consent of the Senate. The Administrator, upon determining that any area is a "depressed area" within the definition of the bill, would appoint a local industrial committee, and upon application by the local committee, he would be authorized to make loans to assist in financing the construction of industrial plants or other industrial or commercial facilities. The Administrator would conduct continuing studies of needs throughout depressed areas for useful public facilities and could make grants or loans for public projects.

For unemployed individuals residing in depresesd areas, the Secretary of Labor would prescribe and provide suitable vocational training utilizing existing governmental facilities or contracting with public or private agencies for the provision of such additional training facilities as may be necessary. The Secretary of Labor could enter into agreements with States whereby the State, acting as agent of the United States, would make supplementary payments of unemployment compensation to unemployed individuals within depressed areas while undergoing vocational training, after expiration of the State unemployment compensation and for a period not exceeding 13 weeks.

The bill would also amend the Agricultural Act of 1949 to provide that the Commodity Credit Corporation bear the cost of processing surplus food supplies. The Department of Commerce has transmitted to the Congress an Administration proposal to accomplish the basic objective of S. 2663-the alleviation of unemployment in areas of prolonged and substantial unemployment-and this proposal has been introduced as S. 2892. This Department is in agreement with the objective of S. 2663 but prefers the approach embodied in S. 2892, believing it is a better way of achieving the same objective.

S. 2663 contains two provisions of direct concern to this Department on which we would raise objections. Specifically, we would object to the provisions relating to unemployment insurance in S. 2663 on the ground of unjustified differential treatment under a social insurance program. Although this Department does not have administrative responsibility for the unemployment insurance program, we are nevertheless concerned with the adequacy of protection for all workers under all social insurance and related programs. We recognize that there are now inadequacies in amounts and duration of unemployment insurance benefits and believe that the Federal Government should continue to encourage and assist the States to improve the protection of these programs. We would seriously question, however, the appropriateness of Federal action to raise the protection of one group of workers above that of other workers covered by the same program merely because they happen to reside in localities determined to be distressed areas under the bill.

While we believe that suitable vocational training opportunities should be made available for unemployed individuals in these areas who need retraining, reemployment, vocational education or vocational rehabilitation, we would raise objections to the specific provisions of S. 2663. Administrative responsibility for Federal assistance to States and communities for programs of vocational education and vocational rehabilitation, is now lodged in this Department. S. 2663 would make the Secretary of Labor responsible for all vocational training to be afforded under the bill and would authorize the provision of such training by the Federal Government directly as well as through established State and local programs and agencies. We believe that the provisions on vocational training in S. 2892, which authorize this Department to provide assistance to

State vocational agencies in making available vocational education services needed in designated areas, are greatly to be preferred over the corresponding provisions in S. 2663 as much more conducive to effective action in this field.

While other provisions of the bill, such as the organizational provisions of the bill and the provisions for grants and loans for the construction of public facilities, present problems for us in view of potential impact upon or duplication with existing and proposed programs of this Department, we would defer to the views of other departments having a more direct interest in such provisions. We would, therefore, recommend that S. 2663 not be enacted by the Congress but that this committee give favorable consideration instead to the legislative proposal made by the Department of Commerce to accomplish the same objective. The Bureau of the Budget advises that it perceives no objection to the submission of this report to your committee.

Sincerely yours,

Hon. LISTER HILL,

M. B. FOLSOM, Secretary.

DEPARTMENT OF THE INTERIOR,
Washington, D. C., January 20, 1956.

Chairman, Committee on Labor and Public Welfare,

United States Senate, Washington, D. C.

MY DEAR SENATOR HILL: This responds to your request for the views of this Department on S. 2663, a bill to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas. There has been introduced S. 2892, a bill to assist areas to develop and maintain stable and diversified economies by a program of financial and technical assistance and otherwise, and for other purposes, which more adequately meets the area redevelopment program recommended by the President than does S. 2663. Therefore, we recommend enactment of that bill in lieu of S. 2663. The Bureau of the Budget has advised that there is no objection to the submission of this report to your Committee.

Sincerely yours,

Hon. LISTER HILL,

FRED G. AANDAHL,
Assistant Secretary.

DEPARTMENT OF LABOR,

Washington, D. C., November 28, 1955.

Chairman, Committee on Labor and Public Welfare,

United States Senate, Washington, D. C.

DEAR SENATOR HILL: This is in further response to your request for my comments on S. 2633, a bill to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas.

The bill is designed to provide several types of assistance to communities, industries, enterprises, and individuals in areas where there has existed unemployment of not less than 9 percent of the labor force for at least 18 months, or 6 percent of the labor force for at least 3 years. The types of assistance to be afforded to enterprises and individuals located in such areas would include loans for the construction of industrial plants and public facilities, preferential treatment in the awarding of Government contracts for services or supplies, accelerated tax amortization for emergency facilities, and vocational training and supplemental unemployment compensation for those in need of reemployment.

The formulation of an overall plan to achieve long-range rehabilitation of the economic problems and resources of depressed areas is a matter of great importance. The President has indicated that he will submit to the Congress a program to aid the surplus-labor areas. I believe that any measure such as S. 2663 should be considered in the light of the President's program.

The Bureau of the Budget advises that it has no objection to the submission of this report and that it considers that the area redevelopment program recommended by the President, although partially covered by the provisions of S. 2663, would be more adequately met by enactment of S. 2892.

Sincerely yours,

JAMES P. MITCHELL,
Secretary of Labor.

OFFICE OF THE POSTMASTER GENERAL,
Washington, D. C., January 26, 1956.

HON. LISTER HILL,

Chairman Committee on Labor and Public Welfare,

United States Senate.

DEAR MR. CHAIRMAN: Reference is made to your request for a report on S. 2663, a bill to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas.

Section 5 of this bill provides that the Administrator of the Depressed Areas Administration shall, in carrying out his duties, consult with an advisory committee composed of a number of designated Government officials, including an Assistant Postmaster General.

Section 9 (a) provides that the Administrator, in consultation with members of the Advisory Committee, shall conduct continuing studies of needs throughout depressed areas for useful public facilities with a view to determining the probable cost of construction and the estimated number of jobs which would be provided. Section 9 (c) authorizes the Administrator, after consultation with the entity most affected, to initiate public facilities construction programs, and section 9 (d) authorizes the Administrator to select projects to be constructed on the basis of the degree to which such construction will most effectively alleviate unemployment in the particular distressed area. Under these provisions, the Administrator could decide that there is a need for a postal facility at a given location despite a finding to the contrary by the Post Office Department. The decision as to where postal facilities should be constructed should be made by the Postmaster General.

Section 9 of the bill should be amended to exempt postal facilities. This could be accomplished by the addition of a subsection (i) to read: “(i) This section shall not apply to postal facilities."

It is not possible, of course, to estimate the effect of the provisions of section 9 on postal expenditures, if the section is not amended as suggested.

Section 11 (a) provides that each Federal agency engaged in the procurement of supplies or services for use by or on behalf of the United States shall, to the maximum practicable extent, procure such supplies or services from contractors in depressed areas or from contractors who in furnishing the same will undertake to provide for the employment of additional individuals in depressed areas. This provision could result in the requirement that the agencies make such procurements in depressed areas regardless of whether more favorable prices are available in other areas. If this would be the effect of this provision, it would have an adverse effect on postal expenditures.

Section 13 (b) would authorize the Administrator to secure directly from any executive department information, suggestions, statistics, and estimates needed in the performance of his duties. This feature, also, could react unfavorably on postal finances.

Section 15 (a) provides that the Secretary of Labor shall utilize and extend the facilities of all Government agencies to provide suitable training for unemployed individuals in depressed areas who are in need of retraining, reeinployment, vocational education, or vocational rehabilitation. It is possible, but not likely, that this provision could affect postal costs.

No provision is made for the Department to be reimbursed for expenses incurred under the provisions of this bill.

Section 5 of title 41, United States Code, requires that, with certain exceptions, purchases and contracts for supplies and services for the Government may be made or entered into only after advertising a sufficient time previously for proposals. From the language of this bill, it is not clear whether this measure will supersede the provisions of title 41, United States Code, section 5, in appropriate cases.

In view of the foregoing, this Department is opposed to the enactment of this measure.

The Bureaeu of the Budget, in advising this Department with respect to this report, stated that the area redevelopment program recommended by the President, although partially covered by the provisions of S. 2663, would be more adequately met by enactment of S. 2892. It is understood that in its report to the committee, the Bureau of the Budget recommended enacment of S. 2892 in lieu of S. 2663.

Sincerely yours,

MAURICE H. STANS, Acting Postmaster General.

SECURITIES AND EXCHANGE COMMISSION,
Washington, D. C., October 18, 1955.

Re S. 2663, to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas

Hon. LISTER HILL,

Chairman, Committee on Labor and Public Welfare,

United States Senate, Washington, D. C.

DEAR SENATOR HILL: We have examined S. 2663, 84th Congress, 1st session, which you sent to us, and we find that it would not have any significant impact upon the functions and activities of this Commission. We, therefore, have no comment to offer on it.

We note, however, that section 13 (c) of the bill refers to the Securities and Exchange Act of 1934. Your attention is called to section 1 of Public Act No. 291, 73d Congress, which provides: "This act may be cited as the 'Securities Exchange Act of 1934.' ”

Sincerely yours,

J. SINCLAIR ARMSTRONG, Chairman.

Hon. LISTER HILL,

DEPARTMENT OF THE TREASURY,
Washington, D. C., January 19, 1956.

Chairman, Committee on Labor and Public Welfare,

United States Senate, Washington, D. C.

MY DEAR MR. CHAIRMAN: Reference is made to your request for the views of this Department on S. 2663, to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas.

The President has recommended a program of assistance for areas of chronic unemployment which has been incorporated in S. 2892. Accordingly, the Department recommends favorable consideration of that bill in lieu of S. 2663. The Department has been advised by the Bureau of the Budget that there is no objection to the submission of this report to your committee.

Very truly yours,

W. RANDOLPH BURGESS, Acting Secretary of the Treasury.

Senator DOUGLAS. We are very happy to welcome as our first witness the Senior Senator from Maine, Senator Margaret Chase Smith. We are always glad to have you here, Senator Smith.

STATEMENT OF HON. MARGARET CHASE SMITH, A UNITED STATES SENATOR FROM THE STATE OF MAINE

Senator MARGARET CHASE SMITH. Thank you very much, Mr. Chairman, and members of the committee, I want to thank you for giving me the opportunity to appear before you and give you something of the situation in my State of Maine on depressed areas.

My statement to you will be brief, because on January 9, one of the witnesses before your committee will be the Honorable Carl Broggi, Maine's commisioner of development of industry and commerce. He is Maine's expert on the subject which you are considering.

Previous to his appointment last fall to the newly created position he holds, Mr. Broggi had a distinguished career not only as a public official and outstanding member of Maine's State Senate, but even more dramatically as a civic leader in rallying the good people of Sanford, Maine, to an economic comeback.

To be sure, that comeback is far from completed and still has a long way to go, but it has been effectively and inspiringly started by Carl Broggi and his associates in Sanford.

As a matter of fact, this thrilling story was the subject of a recent national telecast called The Town That Refused To Die.

I relate these things, Mr. Chairman, for the purpose of showing you the basic attitude of Maine people on this problem. They have the will and the determination to help themselves. They have a zeal for self-reliance. They seek no permanent crutches, but their inherent honesty and practical realism leaves no room for any false pride.

Major economic difficulties in Maine have centered generally on the textile industry. There are many reasons for this. There is the cutrate cheap labor competition from Japanese imports. There is the textile migration to the South because of lower wage rates in the South, local tax exemptions favoring the location and construction of new plants, and other factors.

Obvious corrective action on these conditions is a closer scrutiny of our reciprocal trade agreements and policy and the elimination of regional and sectional wage differentials.

As a steady and consistent supporter of reciprocal trade legislation, I say that as in everything else, there is a factor of reasonableness to be considered in the support of it and that there is a point beyond which we cannot in all good conscience to the people of our own country go in building up the industry and trade of other countries to the detriment of our own labor and industry.

It is unfair to expect our labor and industry to compete with cheap labor of other countries which pay only a fraction of what we pay our workers and which are receiving continued economic and knowhow help from us through the very heavy taxes paid by some unemployed because of competitive foreign cutrate cheap labor.

To a lesser extent, the same observation can be made in our own country in a region-by-region comparison; namely, the lower wages of the South as compared to New England and other sections of the country. That is why at the beginning of this Congress last year I introduced a dollar minimum wage and a bill proposing repeal of the Fulbright amendment to the Walsh-Healy Act.

Passage of a $1 minimum wage bill at the end of the session last year and the recent ruling of the Federal court on the right of the Secretary of Labor to determine prevailing minimum wages on a Nationwide basis have provided needed corrective action on this problem, but because of the time lag between action and results, it will be some time before the equity of these developments is felt in Maine and New England.

Two of Maine's most troubled spots are (1) the Biddeford-Sanford area; and (2) the Washington County area. Much of the difficulty of the Biddeford-Sanford area stems from the fact that it was a one-industry area-textile.

Sanford was a one-company town to a great extent. When it lost that company, it was faced with economic chaos. The economic trouble of this area is more recent and of shorter duration than that of the Washington County area where economic difficulties have been severe for a long time.

It is chronic in Washington County, while in Biddeford-Sanford, it has been, and I hope will be, only temporary. In other words, the distinction between these two troubled areas of Maine, as I see it, is in the fact that the economic trouble of the Washington County area is chronic, and because of this, I would appreciate very much if

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