The bill, it seems to me, might perhaps be specific in requiring the Department of Agriculture, at least in this instance, to do the sensible thing; namely, to introduce into the stomachs of the hungry a larger share of the surplus products of the farms. As it now is, it almost looks as though the Agriculture Department is not really desirous of distributing its food surpluses to hungry Americans but prefers to cherish and hoard these food surpluses like King Midas his gold.

Now, Mr. Chairman, now that I have given you and the committee my reactions as frankly and as fully as I believe you wanted me to state them, let me say that I agree strongly with Senate bill S. 2663, and urge its adoption because I am sure it could accomplish great good; I feel that certain minor adjustments could be made which would facilitate the achievement of the bill's laudable purposes.

Finally, permit me once again to commend you and the members of the committee for your acute awareness of a very real national problem, and for the forthright courage and determination with which you are facing it.

And thank you for the opportunity of testifying.

Senator DOUGLAS. Thank you very much, Governor Williams, for your very able and constructive testimony.

Do you have any questions, Senator Neely?

Senator NEELY. In my opinion the subcommittee owes a debt of gratitude to you, Governor Williams, for pointing out the ways and means by which you have greatly relieved the unemployment distress in your State and for your valuable suggestions regarding the solution of the unemployment problem.

Governor WILLIAMS. Thank you, Senator Neely.

Senator DOUGLAS. Governor Williams, you made a very interesting suggestion about greater cooperation betwen the Federal Government and the States in this matter. I wondered if you would be willing to develop that in greater detail. How do you think this desired cooperation between the Federal Government and the State governments in dealing with depressed areas should be effected?

Governor WILLIAMS. I think, sir, in the first place that in many instances the State itself, if it acted quickly enough, could effectuate the necessary remedies. If the Federal Government had imposed on the States the obligation to do that, those States which have not taken the necessary steps would be compelled to do so in order to save face, if nothing else.

But I think further than that, that the Federal Government could use the States as a kind of clearinghouse so the less stringent matters could be dealt with on a local basis and only the more important problems could come before them.

Secondly, it seems to me that the State would be in possession perhaps of more local data which would permit various local aids. In other words, perhaps shifting employees from one job area to another or also they should have more information as to the industries within the State looking for industrial sites.

Now, I think almost all of the industrial States, or would-be industrial States, now have some kind of industrial development program. And I think the States would be in a position to equate that kind of a service where they must have listings of all the industries seeking new areas with their own areas which need industry.

Senator DOUGLAS. The proposal has been made that no Federal loans should be made to an industry in a locality, and no Federal public works project be carried out, unless it has received prior approval by a State body. In other words, the Federal Government could not deal directly with localities except through the intermediary approval or request of some State body. I wondered if you would be willing to express your opinion on that.

Governor WILLIAMS. Well, I would agree with that idea to the extent that I think it would be advisable to channel the local requests through the State. But I do not think it is necessary that the State should have the veto power. I think that if the Federal Government feels that it should have a loan, why, then, they should go ahead and give it. But I think the State might be in a position to help the Federal Government get a view of the priority of the emergencies within its own community.

Senator DOUGLAS. In other words, there should be full consultation between any Federal agency and the States, but the States should not have veto power over what the Federal Government does.

Governor WILLIAMS. No. I do not think the States should have the veto power, because the Federal agency would probably set up its own rules and regulations. And they should be the final interpreters of them; but I think the State could be helpful in sorting out the problems and sending them on up.

Senator DOUGLAS. Then, do you feel that all local requests should channel through the State and be passed up with either a recommendation for approval or disapproval; or could the locality approach the Federal Government directly?

Governor WILLIAMS. Well, I feel strongly that it would be more appropriate to have it come up through the State for two reasons. One, I think the States have got to preserve their functions with respect to the local communities within the State. And, secondly, I think that the State should have some of its own initiative to help these communities and should make the first contacts with them.

Senator DOUGLAS. The papers should be passed on, perhaps, as they are passed on in the military, through the successive echelons; but the final decision should not be made on the State level.

Governor WILLIAMS. No. I don't think so. But I think the State might, as a corollary, find some of its own functions which would be of assistance.

Senator DOUGLAS. We appreciate your testimony very much, Governor Williams. It has been very constructive.

Governor WILLIAMS. Thank you very much. And I might say that this is an unusual opportunity for me, because my first position after leaving law school was in the Social Security Board. And there I cut my teeth on unemployment compensation by reading one of your earlier books. So, to be able to testify before you is an interesting switch.

Senator DOUGLAS. You have been able to conquer that difficulty, I

am sure.

Governor WILLIAMS. Thank you.

I want to express my appreciation to Senator McNamara for being here with me.

Senator DOUGLAS. We were very glad to have you, Governor Williams.

We are also very happy to have with us another great Governor of another great State, Governor Leader of Pennsylvania. Would you come forward?

We are very happy to have you here, Governor. We know that your schedule is crowded in Harrisburg, and we are particularly indebted to you for taking the time from your duties there to come down here. STATEMENT OF HON. GEORGE M. LEADER, GOVERNOR OF THE STATE OF PENNSYLVANIA; ACCOMPANIED BY WILLIAM R. DAVLIN, SECRETARY, DEPARTMENT OF COMMERCE, COMMONWEALTH OF PENNSYLVANIA

Governor LEADER. Thank you very much, Senator Douglas, Senator Neely, members of the Subcommittee on Labor of the Committee on Labor and Public Welfare of the United States Senate.

I am George Leader, of Pennsylvania, and on behalf of the Commonwealth, and particularly on behalf of the people of the distressed areas of Pennsylvania, I want to thank you, Senator Douglas, and members of your subcommittee, for this opportunity to come before you on so vital a matter.

The introduction last July of Senate bill 2663 by Senator Douglas, with the cosponsorship of Kilgore, Kefauver, and McNamara, Humphrey, Neely, Murray, and Kennedy, was a heartening thing to Pennsylvania.

As you well know, its title reads:

A bill to establish an effective program to alleviate conditions of excessive unemployment in certain economically depressed areas.

Pennsylvania well knows what depressed areas are. It will be a fair statement that 2,250,000 of our 10,500,000 citizens, 21.5 percent of our total population, according to the 1950 census, live in areas of substantial labor surplus. The majority of these people live in chronically depressed areas.

Senator DOUGLAS. Might I interrupt you to say that the figures which I have seem to indicate that, as of November, there were slightly over 870,000 persons in your State who had been certified as eligible to receive donated commodities, food commodities?

Governor LEADER. Yes; that is substantially correct, if my memory serves me right. I think that Pennsylvania is receiving_almost half of the surplus food that is being distributed by the Federal Government.

We have had some difficulties with regard to the standards to be established. When I came into office, the Federal Government was attempting to curtail Federal surplus food distribution in Pennsylvania by lowering the eligibility, or rather, lowering the income that one could have in order to be eligible for Federal surplus food.

Senator NEELY. Senator Douglas has indicated that 800,000 Pennsylvanians are now dependent upon food supplied by the Federal Government.

Is it not a fact that last March and April the number was more than a million?

Governor LEADER. I think those figures would be correct, Senator Neely.

Senator NEELY. It was shown upon a hearing held in Altoona last spring that much more than 10 percent of all the people in your Commonwealth were then living on food supplied by the Federal Gov

ernment.

Governor LEADER. Yes, sir. At that time the Federal Government, the Department of Agriculture, was considering cutting these standards and did cut them some, but we worked out a compromise which I thought was fairly reasonable.

Right now we are working on the matter with the area supervisor up there, and they are again trying to curtail the amount of distribution of surplus food in Pennsylvania. We are under considerable pressure on the matter.

Last March I delivered an economic message before a joint session of our general assembly, and in referring to the distressed areas, I said this:

They drain our unemployment compensation fund—and incidentally, we just moved into the next higher schedule in unemployment compensation, and if we drop another $50 million in our fund, we will go or rather, $45 million in our fund-we will go into the final bracket, which means that all industry in Pennsylvania will go to the 2.7 rate.

They draw millions of dollars from our public assistance appropriations. They cannot pay their way in the public economics of the private industrial enterprise of this State. More important still, we have an interest, as the fellow citizens, of the people of the areas affected. We owe it to them; we owe it to our belief in this society, that we not stand by unmoved and unconcerned while hardship is visited upon several hundred thousand Pennsylvania homes, while whole communities deteriorate and decay, while we develop ghost areas in whole counties and in whole regions of our State.

To assist these areas and to foster industrial and general economic growth and stability throughout all of Pennsylvania, I have submitted an economic development program to our general assembly. It is made up of quite a number of factors, but briefly, I think I can summarize by saying there is a research section which provides $500,000 for coal research, both economic and new uses for coal, possibly throughpossibly in the chemical industry. It provides for a geological survey, $400,000 as a beginning, to be worked out in conjunction with the Federal Government, who would do it on a cost basis, in order that we can find just what of the newer minerals we have in Pennsylvania that may be useful in attracting industry.

It provides for financial assistance in urban redevelopment in order to make some of our communities that have deteriorated a little more attractive, which is important.

It provides for financial aid to the local industrial development groups in Pennsylvania which are quite good. I think we have probably some of the outstanding local industrial development groups in the country.

Most everyone, I think, is familiar, for example, with the Scranton plan. It provides for an industrial development authority about which I will talk a little later on.

We have quite a substantial program there. Some of it has passed the House of Representatives and is before the Senate of Pennsyl

vania. A good portion of it, in fact, is before our senate, where it has remained in committee.

In my message, I made this further point: Gradually, slowly, painfully, the Nation is beginning to realize that these areas are areas of economic decline, and in a period of national prosperity they are a national problem, too.

Early in March, prior to my message to our general assembly, your Joint Committee on the Economic Report recommended a loan and technical assistance program, and the President's economic message had dealt with the general problem of distressed areas.

That problem, as a national problem, shortly after received formal legislative recognition in a bill which Senator Douglas and his colleagues introduced in July, Senate bill 2663, and in the companion bill, House bill 7857, which our Representative Flood introduced in the House.

This was real encouragement to us, and we look forward to participating with the Federal Government in the programs we trust will grow out of this fact. We were glad to note, also, the recent introduction of a bill on the same matter by Representative Fenton of Pennsylvania, the sponshorship of the Eisenhower administration.

I am aware of the fact that Congressman Flood and Mr. Lurye Matheson, Mr. William O. Sword, Mr. Irving F. Wingeard, appeared before this committee and have given you a great wealth of information. There is no need to amplify this rich body of detail, but I think the situation can be summarized in this manner:

There are, according to the most recently available data, 19 major labor market areas in the United States classified as having a substantial labor surplus. That is 6 percent-that is 6 percent or more of their labor force unemployed.

Five, or one-fourth of these areas, are in Pennsylvania. There are 74 of the smaller labor market areas classified as substantial labor surplus, and 9 of those are in Pennsylvania.

Three of Pennsylvania's five major labor market areas with a substantial labor surplus have had such a surplus for more than 3 years-Altoona, Scranton, and the Wilkes-Barre-Hazleton areas, and those are very important areas in our State. They are not minor to any degree.

Four of Pennsylvania's nine smaller labor market areas with a substantial labor surplus have had it for more than 3 years. Clearly, Pennsylvania has a very large share of the Nation's labor surplus areas. With only 3.5 percent of the national labor force currently reported unemployed, 5.5 percent of the Pennsylvania labor force is unemployed, or roughly, about 10 percent of the national total.

The decline of anthracite production in markets, the growth of mechanization in the mining of bituminous coal, technological changes in other industries, such as steel, the dieselization of the railroads, migration of the textile industry, these, as you have been told, are the basic causes behind unemployment in Pennsylvania, and its chronic persistence in several sections of our State.

This, of course, has meant a staggering burden on the financial resources of State and local governments in Pennsylvania for unemployment compensation and public assistance. It has left the State and local governments with the problem of providing public facilities