STATEMENT OF HON. HARLEY M. KILGORE, A UNITED STATES SENATOR FROM THE STATE OF WEST VIRGINIA

Senator KILGORE. I am delighted to have an opportunity of appearing before this subcommittee in support of the Senate bill 2663, of which I have the privilege of being one of the cosponsors.

The problem of depressed areas which this bill will go a long way toward solving is one of the most critical problems facing us today. A country with pockets of severe chronic unemployment in every section cannot in good conscience boast of a prosperity.

This problem cries out for special and immediate attention. Action must be taken and taken promptly. Congress has the duty of enacting legislation to alleviate this ugly condition of continuing and extensive joblessness. Failure to do so would neither be understood nor excused by those many hundreds of thousands of our fellow Americans who are without employment through no fault of their own, and who cannot find jobs in spite of their eagerness to provide their families with the necessities of life, which are now lacking to many of them. Very often the background of the creation of a depressed area is entirely outside the control of the local community and is due to national or international factors. The reasons are varied. Sometimes a natural resource is depleted or the demand for it disappears; a big plant on which the area depends is closed down; the introduction of mechanization, so-called automation, requires fewer workers. Now, may I add to my prepared statement?

My State is particularly a heavy sufferer due to automation. Mines in West Virginia are now getting out as much coal with one-fourth the workers needed previously because of automation. It is true there is a heavy capital investment in this automation, much more than appears to the average person. The day when we could open up a mine with a $10,000 tipple is gone. The tipples now cost from 2 to 3 million dollars. That is needed to clean the coal after it comes out automatically mined. They get it out with fewer workers. Although there is an abundance of coal and there is a lot of coal being mined, automation is responsible for a good deal of unemployment.

This is particularly true in West Virginia where as my colleague on this subcommittee well knows, we have for years encouraged our miners to buy their own homes. And they have their capital invested there. And then they are out of employment. And they have their families. It is hard for them to move.

Increasing mechanization has been a major factor in the coal industry for at least a generation. Automatic mining machines are brought in to maintain equal or decreased production and miners are dropped from the rolls. No one opposes technological advances. Yet something must be done to find and work for men so displaced.

And may I say on that also that age is a terriffic handicap to a man in a mechanized mine. You must be young and very agile to work around that fast-moving machinery. Your older experienced miners, the best miners you have, are automatically shoved off on the slag pile, and they have no place to go.

One ugly result is the creation of new ghost towns with stranded populations, a few examples of which are shown in photographs displayed here today. Marginal mines which cannot compete with

mechanized pits are closed down, and where the community is dependent on them, and where no other opportunities exist, a ghost town develops.

Incidentally, in West Virginia we are having a great number of mergers. Big companies are buying out other big companies and consolidating in order to further their mechanization plans and get out more coal, because that gives them a greater capital to work with.

Some of the communities facing this general problem, and their aroused residents, have banded together to find a solution. Groups in various areas have developed plans to encourage new industries or expand existing ones in order to create new jobs. Or there may be other alternatives.

You may recall that some months back, in my own State, citizens of Follansbee forced the abandonment of plans to dismantle its steel mill which was to be shipped elsewhere, and consolidated it with another steel mill.

Senator DOUGLAS. That was done with the assistance of Mr. Cyrus Eaton; was it not?

Senator KILGORE. It was.

Senator DOUGLAS. And the company is now making money.

Senator KILGORE. They always had made money, Mr. Chairman. In fact, one of their big assets was because the carryback, carryover provisions of the tax bill. Other companies would have gladly absorbed that corporation to get the carryback, carryover credits that were available.

Senator NEELY. Mr. Chairman, please let me observe that Mr. Cyrus Eaton and President John L. Lewis of the United Mine Workers both rendered great service in the Follansbee steel mill matter. Only the heroic opposition of these distinguished men prevented the removal of the mill from West Virginia to a distant State.

Senator KILGORE. That is absolutely correct.

That steel mill, incidentally, represented another factor which I pointed out a little earlier. It had been in existence for years and years and years. The men working in the mill were the children and grandchildren of the first workers there. They had bought and built nice homes. The town, as my colleague well knows, was a very nice town. There were no company houses there. Everybody owned his own home. You couldn't pick those houses up and move them away, and those people had all their savings invested in homes. They had a good school system, and it would have been disastrous to have moved that plant else. Fortunately, we were able to prevent that and the mill is running very profitably.

But the key factor, as Senator Neely well said, was that Mr. Eaton and the United Mine Workers and others got together and worked it

Follansbee is an exception. Results show in almost all of the cases where communities took action themselves only a partial solution has been achieved at best. Most of them are still in the class of depressed areas. Although unemployment may be reduced, the unfortunate fact is that many of their displaced workers are still without jobs. The introduction of new industries does not automatically mean the rehiring of workers previously fired.

It should be clear by this time that a local community, even with State aid, cannot solve this problem by present means. It needs the

resources of the Federal Government behind it. More must be done than the locality can do by itself. Financial assistance is often essential. Temporary jobs must be provided before new job opportunities are available. Adequate relief measures are necessary in the intervening priod. Most important, displaced workers must be retrained so that they will acquire new skills and be able to work in the new plants developed.

Senator DOUGLAS. That is one feature of the present bill; is it not? Senator KILGORE. It is and that is one of the most important features of the present bill.

There is also this, may I say, Mr. Chairman, which applies to West Virginia and to a number of States. Local banking facilities are not adequate to finance the location of new plants because of the loan limitation based upon their capitalization. In order to get a plant started, you have to go someplace else to get the necessary loans. I have run into that repeatedly where local banks simply could not finance. As we all remember, one of the big problems we had with small plants in the past was the fact that the RFC didn't like to make small loans. This bill sets up a new method of getting loans.

This means that the problem of depressed areas, which is national in scope, must be attacked on a national basis. Unfortunately, in spite of pledges that have been made, little has been done in the past 3 years. A look at some of the figures shows the problem is more serious than when this administration took office. In January 1953, there were 18 major and 19 smaller depressed areas. By November 1954, the figure for major areas had jumped to 48, then dropped to 26 by September, and 19 by November. The number of smaller areas has also increased, with the latest tabulation showing 64 which, however, is the lowest since May 1954.

Though there has been some improvement, the situation is still serious. The immediate outlook, according to the Labor Department, is not encouraging. Job increases in the immediate future are expected to remain in the small-to-moderate range. There is no reason to anticipate further reductions in labor surplus areas without some type of Federal aid such as this bill provides.

Obviously, the time for action is here. We in the Congress responded to this need when Senate bill 2663 was introduced last July 28. The administration made a belated move in the same direction when on October 24, Dr. Arthur F. Burns, Chairman of the President's Council of Economic Advisers, proposed a program of aid to depressed areas. In view of Dr. Burns' recognition of the urgency of this problem, I am sincerely hopeful that the administration will do its utmost to support the bill before us now.

Mr. Chairman, as Senator Kennedy pointed out, there were efforts made to get contracts for smaller plants in depressed areas, because the Government is the biggest buyer we have in this country now. But it just has not worked out. This theory of contracts in depressed areas didn't work out because the people doing the buying didn't want to take the trouble to go down and analyze the situations in local

areas.

Mr. Chairman, my State is an example of the necessity for prompt passage of this legislation. A number of communities in West Virginia are seriously affected by chronic unemployment. These include the major areas of Charleston, Huntington, and Wheeling, and the

so-called smaller areas of Beckley, Bluefield, Clarksburg, Fairmont, Logan, Morgantown, Parkersburg, Point Pleasant-Gallipolis, Ronceverte-White Sulphur Springs, and Welch.

Two of our counties are also included in surplus labor areas of other States. They are Mingo County, which is included in a Kentucky labor surplus area, and Mineral County, which is included in a Maryland surplus area.

Charleston, our largest labor market, is classified as a 9- to 12-percent unemployment area, a slight improvement from its previous designation of above 12 percent unemployed.

Huntington and Wheeling are listed in the 3- to 6-percent jobless classification, somewhat better than their previous 6- to 9-percent listing.

Though unemployment is somewhat lower in these areas in recent months, it is still too high for complacency.

Three of the ten smaller areas-Clarksburg, Morgantown and Parkersburg-have just been dropped from the labor surplus classification, according to figures from the Labor Department released December 21. Reason for removal is that unemployment is expected to remain below 6 percent for the next 4 months, which is hardly a comfortable figure. The other seven smaller areas, as well as Mingo and Mineral Counties, remain centers of continuing serious unemployment.

It is interesting that unemployment figures in Germay at present are said to be less than 2 percent, and we have been trying to help them over there with generous amounts of foreign aid.

One of the most striking features of this unhappy picture is the failure of unemployment compensation to sustain an area of extended unemployment. As of September last, unemployment benefits in my State were being paid to just under 8,000 beneficiaries, which is less than 23 percent of some 35,000 who reported jobless that month.

In other words, less than one-quarter of the unemployed were receiving benefits, the reason being that most of them were without jobs for such a long period they were no longer eligible to collect benefits. How were those twenty-seven-thousand-odd workers getting along? They and their families? One graphic indication of their need is the figure of the State department of public assistance, showing that as of December 15 more than 210,000 individuals were receiving surplus food distribution, mainly in the coal areas. This is an unwholesome feature of an otherwise prosperous Nation.

Senator NEELY. Senator Kilgore, you will recall that the number of 210,000 which you mentioned, who last December were keeping their souls and bodies together in West Virginia with Government food, was last April 65,000 more-a total of 275,000 notwithstanding the fact that the population of our State is less than 2 million. In other words, much more than 10 percent of the people of West Virginia were entirely dependent upon Government food products as recently as last April.

Senator KILGORE. That is right; over 10 percent of the population. Senator NEELY. Mr. Chairman, when our subcommittee held its hearings in March and April of last year, it was shown that there were only two other States in the Union whose distressed area problems approached those of West Virginia. Those States were Pennsylvania and Kentucky.

The hearing held at Altoona last year disclosed the fact that more than a million people of Pennsylvania were, at that time, dependent upon Government food.

Senator DOUGLAS. You mean the food relief?

Senator NEELY. That is correct.

A few days later, upon a hearing held at Pikeville, Ky., it was shown that 13 percent of the population of that State was living on food furnished by the Government. At Altoona and Pikeville, it was proved that the unemployment distress in these communities was greater than it was at any time during what was commonly known as the Hoover depression from 1929 to 1933. Similar testimony was presented to the subcommittee at Williamson, W. Va., regarding the dire distress of multitudes of the "Mountaineers."

In the circumstances, the people of that State hope and trust that the pending bill will be promptly enacted into law.

Senator KILGORE. To show the causes of that, an analysis of developments in the coal industry leaves little room for optimism about displaced coal miners at the present time, unless this bill becomes a law.

The bright side of the coin is that coal output is on the increase. Bituminous coal production is expected to reach close to 465 million tons in 1955, compared with 392 million tons in 1954, and 457 million tons in 1953. I refresh my colleague's recollection on this, to show that West Virginia mines are producing coal.

As the Senator well knows, there have been definite freight car shortages. Some mines have been shut down, because of freight car shortages in the State, 3 or 4 days a week. Even with coal being mined in increasing quantities, more and more machines are doing the work of displaced miners. Production up and employment down: That is the core of the problem in these areas.

The United Mine Workers estimated on November 14 of last year that, over the Nation, some $155,000 abled-bodied coal miners were still without jobs.

The West Virginia Chamber of Commerce, in the September 1955 annual review number of the West Virginia Business Index, referred to "The permanent disemployment of an estimated 70,000 coal miners" in West Virginia alone. I stress these ominous words "permanent disemployment."

The same publication noted that the population of West Virginia has declined progressively in each of the past 4 years. That is truly a reason for alarm. West Virginia is losing its fine young people. They cannot find jobs opportunities, and being without ties, they are free to move out-a permanent loss to the State.

The older workers with families and homes find it difficult to pull up stakes and leave communities where they have lived all their lives. They are displaced and they will remain so until this bill comes to their aid.

Along that line, Senator Kennedy, you were mentioning conditions in New England. One of your big tool manufacturing companies came down and operated in West Virginia during the war, and they said the miners and miners' sons were the easiest men to train on mechanical work that they had ever had. They said it took a very