it has been told so often of so many communities throughout the Nation. These aroused citizens voted to revise an archaic city charter, one which dated back to 1888. A new charter was approved and became effective April 30, 1953. A unicameral city council replaced the old bicameral council. The mayor was given real authority.

An industrial development commission was named in December 1953. Out of this came a voluntary fund-raising drive which would give the commission members capital with which to work. Over $400,000 was pledged. Factory workers and store clerks participated through the medium of payroll deductions.

Yes, gentlemen, Woonsocket has started on the road to recovery but it is a long and difficult journey. Up to this point the Industrial Development Foundation of Greater Woonsocket has not been able to offset job losses sustained as a result of factory closings. But how much more difficult our lot might be were it not for the efforts of these civic-minded citizens. It is imperative that this foundation continue but its financial resources are limited. Your bill would provide the means which would enable them to pursue the new industry which we so badly need.

Your bill could be of great assistance to communities like our own by making capital improvements possible.

We can and will do much on our own. With the help of the Federal Government we could do more in a shorter period of time.

Thank you.

Senator DOUGLAS. Thank you very much.

Mr. COLEMAN. I have been requested to add an excerpt from the annual message of Gov. Dennis J. Roberts of the State of Rhode Island, which was delivered upon the opening of the January session of our general assembly, and I quote:

I urge you to memorialize Congress to adopt legislation which would give meaning to the Federal Full Employment Act which would provide for labor-surplus areas, loans at reasonable terms, to finance much-needed construction and reconstruction of industrial facilities which would guarantee a Federal procurement policy, which would give these areas their fair share of Federal purchases and which would make available funds for essential public construction. Anything short of such a program is mere lip service to the principles of full employment. I would like to present that for the record, Senator, along with a copy of the resolution which was adopted by the general assembly carrying out the Governor's wishes.

Senator DOUGLAS. Thank you very much, Mayor Coleman. (The resolution referred to follows:)

MEMORIALIZING THE CONGRESS OF THE UNITED STATES TO ENACT LEGISLATION PROVIDING EFFECTIVE AID TO LABOR-SURPLUS AREAS

Whereas the Congress of the United States, in 1946, enacted a Full Employment Act, enunciating the principle that full employment is a national responsibility; and

Whereas any surplus-labor area which has a hard core of unemployment is entitled to relief; and

Whersas Rhode Island is such an area containing a skilled and well-equipped labor force; and

Whereas it is vital to the economy of the country that implementation be given to the principle of full employment by providing for the use of such a labor force; and

Whereas the Rhode Island contribution to the income of the Federal Government is disproportionately greater than any Federal benefits which it receives: Now, therefore, be it

Resolved, That the General Assembly of the State of Rhode Island and Providence Plantations hereby urges the Congress of the United States to enact legislation which would give meaning to the Full Employment Act by providing loans for labor-surplus areas to finance much needed construction and reconstruction of industrial facilities, guaranteeing a Federal procurement policy assuring labor-surplus areas their fair share of Federal purchases, making funds available for essential public construction, and providing suitable training for the unemployed; and be it further

Resolved, That the Senators and Representatives from Rhode Island in said Congress be, and they are hereby earnestly requested to use their concerted effort to bring about the enactment of such legislation; and be it further

Resolved, That the secretary of state be, and he is hereby authorized and directed to transmit to the Senators and Representatives from Rhode Island in the Congress of the United States duly certified copies of this resolution.

Senator DOUGLAS. The final witness this morning is Mr. William J. Farrell, executive director of the Industrial Development Foundation of Greater Woonsocket, about which Mayor Coleman has spoken. Mr. Farrell.

STATEMENT OF WILLIAM J. FARRELL, EXECUTIVE DIRECTOR, INDUSTRIAL DEVELOPMENT FOUNDATION OF GREATER WOONSOCKET, WOONSOCKET, R. I.

Mr. FARRELL. Mr. Chairman, I appreciate the opportunity to be heard on this very important subject matter, and I hope that you will find my testimony truly complementing that of Mayor Coleman and not to too great an extent repetitious.

I am the paid executive director of the industrial development foundation to which the mayor referred.

In Woonsocket, upon coming there some 10 months ago, I found an isolated small metropolitan area of some 125,000 population with 50,000 of this crowded into 8.8 square miles of the city itself. The population of the city has not increased substantially in the past 10 years, so it is not surprising to find that there has been no new industrial construction during this same period.

The number of industrial plants operating in Woonsocket approximates 118. Of these, 79 are engaged in some phase of textile manufacturing. Of the 11,225 persons employed in industrial activity, 70 percent are in the textiles. There would seem to be no need on my part to repeat to you gentlemen the problems that come with this concentration of and dependence upon one type of industry. The more so when this principal industry is textiles because of seasonal and other fluctuation factors which are always related.

All the reasons for diversifying industry are present in Woonsocket. The situation cries out for the introduction into the area of new industries that are in the growth category elsewhere in the country. Industries that provide steady and permanent healthful work in an atmosphere to encourage acceptance of responsibility for community progress are what would help in Woonsocket.

Mayor Coleman and far-sighted citizens recognized the problem and 2 years ago an industrial development commission was formed. This progressive group, acknowledging that it had no expert knowledge, traveled to other cities and studied methods employed elsewhere to combat industrial stagnation. Out of their investigations came the need for a drive to provide operating funds and the establishment of a nonprofit, nonpolitical organization to sell Woonsocket to in

dustry. Next came the recognition that, although the city had many substantial factory buildings in good condition for sale or for lease there were not the type that would work the transformation so sorely needed. Else why should this changeover not have been taking place over the years?

Senator DOUGLAS. Are these mill buildings of the old type, 3, 4, 5-story buildings?

Mr. FARRELL. Yes.

Senator DOUGLAS. They are not the modern one-story buildings? Mr. FARRELL. No, sir. It is significant those we have been successful in filling up with the other industries have all been essentially onestory plants even among the old existing factories.

Further self-study convinced the trustees of the foundation, the organization that developed from the mayor's original commission, that even in New England Woonsocket suffers because of geographical location. Despite proximity to all of New England's largest cities, it could never hope to supplant Boston as the distribution center for New England. And it could never hope for direct and immediate access to highways south or west.

Yet the city has a very valuable asset in its skilled work force, conditioned to industrial employment. To overcome geographical disadvantages to put these people to work some unusual inducement was recognized as necessary. It means so much to industry to have available an already existing new modern facility, that this was conceived as the means of attracting industry to Woonsocket. New buildings, completely financed, with no work on the part of the industrialist but to turn the key in the door, is what is needed to vitalize Woonsocket.

The moneys raised by the people to help themselves cannot alone accomplish the removal of this community from the list of chronically depressed areas. $400,000 was pledged. After costs of acquiring suitable land, preparing the site, administering the program, and financing the initial building are deducted, not enough money will remain for continuing the program for the span of years required to insure a steadily improving economic situation for Woonsocket. To achieve this continuity over a span of years calls for conservation of the funds of the foundation.

In Rhode Island there functions a development credit corporation known as the Business Development Company of Rhode Island. Its resources are pledged by 13 financial institution members and it now has on call some $1,657,000. It has supplied second-mortgage financing for some of the former textile mills which the foundation has been instrumental in converting to diverse uses. Incidentally, these activities have resulted in the creation or the saving of some 760 jobs for Woonsocket. The Business Development Co. has also agreed to supply all the capital and, if necessary, to continue as the owner of a new 1-story 40,000 square-foot building to be constructed in a so-called industrial park owned by the Industrial Development Foundation of Greater Woonsocket. And this, even though we have no present occupant for the building.

Referring to the fact that the Business Development Co. is going to put up the initial building, we are going to be faced with the problem of financial resources for carrying on this program of self-help. The commercial banks who have provided the first mortgage money in the transactions to date are also the member institutions in the

development credit corporation. It is pretty plain that for the steady long pull we are going to have to find a source of second mortgage funds. In fact, our organization right now is searching for financing for a speculative building which we are committed to build to complement that of the Business Development Company of Rhode Island. Plainly, if we are to lift ourselves out of the chronically economically depressed classification for good we need the availability of Federal funds for financing new construction. If, as this bill of Senator Douglas proposes, two-thirds of the cost of construction were available on loans for terms up to 40 years it would be possible to really put a substantial dent in the unemployment problem in Woonsocket. The attractiveness of existing new and available structures, for industry on the move, is no myth. It is an established and proven fact. Private industrial developers first demonstrated its worth. The point is, however, that private financial resources cannot provide for the sustained building program required to correct chronic unemployment in any given area.

Nor will they participate in this speculative building program without tenants or occupants which may be required to continue this program in Woonsocket.

The problem generally is one of such importance as to warrant the establishment of a single agency to coordinate all the Federal assistance available to localities in economic distress. This need would seem to be borne out by the fact that, despite the existence and availability of some of these needed services in the administrative organization of the Federal Government, these have not been availed of by depressed communities and their depression continued chronic.

To be worthy of Federal assistance, indeed to justify the expenditures of Federal funds, a community should have demonstrated certain measures of self-help. In our community, gentlemen, we have already accomplished city charter reform government and it is functioning with honesty and economy. We have established a city planning board and we are taking advantage of services provided by the State of Rhode Island for the study of a master plan for the community to qualify for development and redevelopment under the Federal Housing Act of 1954. We are contemplating bond issues for improving community services to the extent that flood rehabilitation costs may permit. We do have a privately financed industrial development organization to sell the city abroad and direct the construction of new facilities.

Although classified a labor surplus area, Woonsocket is far from depressed in the broad sense of the term. It would welcome the lift which the terms of this bill offer. Right now the Industrial Development Foundation is actively pursuing the matter of suitable training and retraining of the unemployed. It seeks to coordinate Federal assistance with vocational facilities soon to be provided by the State of Rhode Island. It acknowledges the merit to providing unemployment insurance benefits beyond normal expiration periods to workers undergoing retraining. It appreciates the additional attraction to industrialists, if locating in an area of chronic labor surplus may mean accelerated depreciation for new plants and plant expansion. We want preferential treatment in these matters and in the matter of governmental procurement to be on the basis not alone of contribution to defense but also on the basis of contribution to local employment.

In our own little way and with our own limited resources we are working for expanded opportunities for our established employers. We urge the adoption of the proposed bill S. 2663 to coordinate all of these Federal services under a separate administration with a single administrator. Except for expressing a strong opinion that, where local committees are already in existence they should be the organization to work with the administrator in lieu of any group he might appoint, we say let's get on with this legislation. The problem certainly has Federal ramifications. In some instances chronic regional unemployment is the result of national policies adopted for the national common good and the solving of the problem cannot help but work to the advantage of the Nation at large.

Senator DOUGLAS. Thank you very much, Mr. Farrell.

Senator Kennedy, this is in your bailiwick. Do you have any questions?

Senator KENNEDY. No. I think, as pointed out by Mr. Farrell, that it is important to have such funds available, and that if such funds were available it would make a real dent in unemployment.

What about the Small Business Administration? Have they been of any assistance to you?

Mr. FARRELL. They have no present setup for assisting substantially in financing of new construction, particularly on a speculative basis. If they would adopt a more liberal policy with regard to the position that they might take in the loan structure, such as agreeing to take even third position behind whatever participation local banks might contribute, or the State development credit corporation, and also possibly liberalize their terms to the point of deferring principal payments for a certain period of the term of amortization in order to interest and encourage new industries to locate in the area, it would be of substantial assistance to the program.

Senator KENNEDY. I think you and Lawrence have been hit harder by this problem than other cities in the country.

Mr. FARRELL. Yes, sir.

Senator DOUGLAS. This completes the list of witnesses. There will be another scheduled meeting of the subcommittee on January 23d to consider primarily the problems of Michigan and Minnesota. (Whereupon, at 12:25 p. m., the committee adjourned.)