period of time, and that he cannot operate unless the necessary power is available. It is a very important consideration in dealing with a matter of this kind. Then I would suggest, respectfully to the committee, that some language be included in the bill whereby the Administrator can make at least modest funds available out of the whole amount to colleges and universities that are very much interested in this field. In southern Illinois we presently have the University of Southern Illinois. It serves as a sort of a cultural center for about 30 counties in the State and when we first did some work on securing funds for a pilot plant to do work in the field of timber resources, the logical place to put it, of course, was under the jurisdiction of the University of Southern Illinois. The technicians are there, the scientists are there, they are dealing with the resources in that section of the State. The Administrator should be empowered out of the funds made available herein sums to do the kind of work that I have in mind in the hope that the resources that are there will be fully utilized. Now, perhaps the committee would like to give attention also to whether or not there ought to be State approval for any of the projects that are set up. That may or may not be necessary, but cretainly it is in the interest of good cooperation between a Federal agency and the appropriate State agencies. Finally, if you are going to set up a plant in a given community where you may fortunately employ as many as 500 people, promptly you have a housing problem. That means that if this is to be an overall and wholehearted approach, obviously there must be housing for the people who are going to work in a plant of that kind. We presently have, I don't know how many hundreds, perhaps thousands, who drive 40 miles, 50 miles, 70 miles to places of employment. That is spending an awfully long time on a highway, and in an automobile. If the jobs can be brought closer to the places of distress, then the housing must be brought closer. It would require perhaps some modification of the appropriate sections of the Housing Act to make sure that housing can then go forward in connection with industrial development. So much then, Mr. Chairman, for the first approach, namely, to do those things that might attract industry, make it easier to set up an industry in the hope that durable jobs will be created. Now, the second section of Senator Douglas' bill deals with assistance to useful facilities. That, of course, would include schools, hospitals, airports, all that sort of thing, and certainly will create jobs, although when the construction is done it would be more or less temporary and might run out after a period of a year or two. I think here, again, the funds that are made available should be allotted to the States on the basis of need, with some portion of the overall fund available within the discretion of the Administrator, and, secondly, I envision, of course, that this will involve some schools and public facilities, and I believe very properly an antisegregation provision ought to be written into that section of the bill that deals with facilities, because that problem is before us. It is in the school bills that are pending at the present time, it is part and parcel of the whole theory that has been advanced by the Supreme Court, and has been mandated on the States. I am a conformist in that respect, and I think, very properly speaking, where these funds are available for that purpose that provision ought to be incorporated in the bill. Those are rather informal suggestions. The record will speak for itself. I trust that the committee will give these suggestions respectful attention, and I know they will. Senator DOUGLAS (presiding). May I apologize to my colleague, and to the other witnesses, for being late this morning. I started from my house at 9 o'clock, but the icy condition of the streets held me up, and I regret very much that I was not present when you began your statement. Senator DIRKSEN. I can say to my colleague I have a ready appreciation of that condition. Senator DOUGLAS. Senator Neely? Senator NEELY. Off the record. (Discussion off the record.) Senator DOUGLAS. Senator Goldwater? Senator GOLDWATER. I would like to take advantage of the Senator's being here, inasmuch as he is a member of the Appropriations Committee, to ask if he would have any further light to throw on the situation that developed last year, where, as a result of the President's recognizing the distressed area problem, and having made recommendations in his economic report to the Congress regarding it, recommendations that in turn were held up and approved by the Joint Committee on the Economic Report, the Congress did not give the additional funds needed to increase the personnel in this particular office? Do you recall the details of that? Senator DIRKSEN. Well, may I say to you, Senator Goldwater, that actually work in this field began in 1946. It was then tied, of course, to the defense aspects. Considerable money was expended. I think perhaps over $200 million, and a good many thousands of jobs were created, but always it had a defense tag on it. However, the interest in that agency in the Department of Commerce continued, and they did want to do more work. I noticed in the economic report in January 1955-the President alluded to it-that there was a request in the estimates for appropriations for fiscal 1956 for more funds. Unfortunately, of course, the funds were not made available. The Senate did add to the amount $100,000 in the committee, $75,000 on the floor, but the item was stricken finally in conference. I may say I had the same difficulty in trying to secure $2 million for pilot plant operations for the distillation of coal. I was so anxious about it, because of the scientific encouragement I had gotten in that field, but for reasons best known to those who were not at the time interested, it was taken out of the bill. However, I want to say this: That quite aside from sponsorship or anything else, distress is not a political or partisan thing. I am deeply anxious that we do something because when we have done everything that we can reasonably do in the lower reaches of our own State we will still have the problem, because of mine abandonment, and the jobs that have gone down the drain as a result thereof. That is the job which lies before us. Senator GOLDWATER. That is all I have. Senator DOUGLAS. Thank you very much. Senator DIRKSEN. Thank you, Mr. Chairman. Thank you. Gov ernor. Senator DOUGLAS. The next witness is the Honorable Frederick Payne, Senator from Maine. Senator Payne, we are glad to have you here. We heard your colleague last week, and we are very glad to welcome you today. STATEMENT OF HON. FREDERICK G. PAYNE, A UNITED STATES SENATOR FROM THE STATE OF MAINE Senator PAYNE. Mr. Chairman, members of the committee, I want you to know that I appreciate very much your invitation to state my views on the question of Federal assistance to economically distressed areas before this distinguished subcommittee. At a time when the vast majority of Americans are enjoying unprecedented prosperity, the continued existence of scattered pockets of chronic unemployment is a matter of deep concern. In the State of Maine at the present time, according to the November 1955 United States Department of Labor Bimonthly Summary of Labor Market Developments in Major Areas, the Biddeford-Sanford area is classified as a substantial labor surplus area; and Portland, our State's largest city, is listed in group C, indicating that the number of job seekers is from 3 to 6 percent in excess of job openings. The United States Department of Labor, in cooperation with the Maine Employment Security Commission, has just completed making a survey of unemployment conditions in Washington County, Maine, to determine whether or not this northeasternmost county in the United States can be classified as a labor surplus area so as to be eligible for assistance under existing Federal programs. The economic difficulties in Washington County are due primarily to the availability of only seasonal work for its labor force. In 1955 the usual available employment was seriously reduced because of the extremely small herring catch which resulted in many sardine canning factories either closing or not opening at all. Unfortunately, Washington County has too sparse a population to be designated a substantial labor-surplus area. According to the findings of the United States Department of Labor, and I submit the letter under date of January 6 from the Department of Labor with reference to their findings. (The letter referred to is as follows:) Hon. FREDERICK G. PAYNE, DEPARTMENT OF LABOR, United States Senate, Washington, D. C. DEAR SENATOR PAYNE: In accordance with arrangements made by Mr. Albert L. McDermott, special assistant to the Secretary, and a member of your staff in a telephone conversation on December 8, we have received and reviewed the report on labor market conditions in the Calais-Eastport area. This survey, prepared by the Maine Employment Security Commission, indicates that although there is sizable unemployment, the area has a labor force of less than 15,000 and does not meet the minimum-size criteria for classification as an area of substantial labor surplus by the Department of Labor. Staff members of this Department have discussed the problem of smaller areas with representatives of the Department of Commerce and the Small Business Administration. Consequently, we are referring the problem of the CalaisEastport area to Mr. Frederick H. Mueller, Assistant Secretary of Domestic Affairs, United States Department of Commerce, to provide suggestions in com munity economic and industrial development and to Mr. T. G. Waale, Director of the Office of Production Assistance, Small Business Administration, for attention to the small businesses located in the area. As you know, the Small Business Administration is empowered by legislation to assist small plants both with respect to securing Federal procurement and with regard to loans. In addition, we would like to call your attention to the enclosed amendment to Defense Manpower Policy No. 4 providing that areas too small to classify, the local employment security office shall be authorized to furnish a bidder with a certification (when specified conditions are met) that the area in which he is located is one of substantial labor surplus. Since the Calais-Eastport area currently has sizable unemployment, this procedure would be of assistance to firms in this area submitting contract bids at this time. I sincerely hope that these arrangements will be helpful to the Calais-Eastport area. Sincerely yours, Rocco C. SICILIANO, Assistant Secretary of Labor. Senator PAYNE. There are also other areas in Maine which also warrant continuing attention, such as Brunswick, where the town's principal industry, a textile mill, was closed last June. Since I know that the subcommittee has complete information in its files on unemployment conditions not only in Maine but throughout the country, I will not take up your time by elaborating further and repeating information you already have or will receive from Maine commissioner of development of industry and commerce, Carl Broggi, when he testifies. Incidentally, I might say that my distinguished colleague, the senior Senator from Maine, will introduce Carl Broggi, but I want to mention the fact that Carl happened to serve as a very distinguished member of the State Senate of Maine from York County, while I served as Governor. I followed the excellent work that he did in the Sanford area in particular, where he is a native, in relieving much of the economic distress there. I feel that Maine is to be highly congratulated for having a man of his type, of his ability, initiative, and drive, heading this most important department. Senator DOUGLAS. You seem to be developing a bipartisan system of cooperation in Maine, Senator Payne. Senator PAYNE. Mr. Chairman, that is true. The Governor, as you know, a very splendid gentleman, happens to be of your party. Mr. Broggi, however, was a Republican senator when he served in the Maine Senate. Senator DOUGLAS. We are always happy to recognize merit wherever it occurs, and in those few instances where it occurs in the Republican Party we are glad to recognize that. Senator PAYNE. Thank you. Department of Labor statistics indicate that the present unemployment situation is serious in some 19 major and 74 smaller labor market areas. In other words, there are still people in this country who, through no fault of their own, are not enjoying the benefits of national properity. So long as this disparity exists, no matter how small it may be, I am certain that none of us will be satisfied, for economic quality of opportunity is an essential part of a healthy society. The Eisenhower administration has continually indicated its deep concern in regard to the problem of chronically distressed areas. Under Defense Manpower Policy No. 4, Executive Order 10582 implementing the Buy American Act, and the policy on accelerated tax amortization for labor surplus areas, some assistance has been channeled into distressed areas. On July 30, 1955, in a statement on the Senate floor, and in letters to the Secretary of Commerce, the Secretary of Labor, the Director of Defense Mobilization, and the Chairman of the Council of Economic Advisers, I indicated my feeling that these existing programs were not adequate and recommended that they be reviewed. Assurances were received from administration leaders that such a review was being made, and, subsequently, Dr. Arthur Burns announced in Denver in October that the administration would submit a program to the Congress this year to provide for a more concerted attack on the distressed-areas problem. It is my understanding that the administration plan will be submitted to the Congress today, and I should like to take this opportunity to urge this subcommittee give it careful study because I know that it is based on conclusions reached only after a thorough review of the distressed-areas problem. Senator DOUGLAS. I can assure you that we will give it most careful consideration. Senator PAYNE. The only major differences of opinion I know of on this matter are in regard to the role the Federal Government should play in alleviating conditions in economically distressed areas. The primary responsibility for industrial development rests with State and local governments and private industry. A Federal program alone, no matter how comprehensive, will not solve the problems of substantial labor surplus areas. Only alert, aggressive State and community industrial development programs with such Federal assistance as may be necessary can alleviate the present problem. Mr. Chairman, in making that statement, may I say in due modesty that to my knowledge there is no person in the State of Maine who has had a more lengthy, or a more close interest in this particular field than have I. My efforts in this direction started over 22 years ago. Through those efforts, together with those of community leaders and State leaders, we were able to arouse interest at the community level particularly and thereby develop programs that did bring into being a revitalized industry in many of the communities of Maine. Time does not permit me to go into all of those cases, but I can assure you that they go from the northern section of the State right down through to the southern section of the State. In practically every instance industries brought in and developed during that 22-year period are still in operation and today are still making a remarkable contribution to the prosperity of Maine. They were brought in when the same situation that exists today existed then. Furthermore, any Federal program should aim at lasting improvement in local conditions rather than at just temporary relief. It should also be designed to create new job opportunities rather than merely transfer job opportunities from one community to another. In addition to expanding present Federal programs under Defense Manpower Policy No. 4, etc., it is believed that a Federal loan participation program should be developed to assist in bringing new industries into distressed areas, and that there should be an appreciable expansion of Federal technical assistance to local and State industrial development gencies. I will leave the details of the Federal program to the administration experts, and to the members of this distinguished subcommittee. |