I would urge that the committee make sure that substantial amounts be expended for projects not on the Federal systems, for the unfilled need for the construction of such roads in the Seventh District of Kentucky is retarding efforts to revive the economy of this area. It would be appropriate I think for the committee to earmark $500 million for this purpose.

Source: Net income after taxes have been taken out from the Sales Management Survey of Buying Power, May 1961.

Mr. BALDWIN. Could I ask one question, Mr. Chairman?
Mr. FALLON. Yes.

Mr. BALDWIN. Mr. Perkins, the Area Redevelopment Act that went into effect last year undoubtedly applies to all the areas you have described, I imagine. You mentioned the percentage of unemployment. Can you tell us to what extent that Area Redevelopment Act has put men to work in your district?

Mr. PERKINS. Well, the large county that I mentioned, Pike County, Ky., there you have the city dimensions that the Area Redevelopment made along, across the Tug River from Pike County, Ky., to Williamson, W. Va.; and that project will employ about 150 people, and I think under the retraining provisions of that bill, they are going to retrain about-they are going to retrain people for this particular job, and maybe 100 or so others. There have been several loans made by the Area Redevelopment Administration, several loans in the area, but to really tackle this problem and keep those people from migrating out of those remote sections, I just wish that I could take the committee down there and show you some of the greatest scenery in the world where you have to take a jeep to get into certain areas. If the WPA had gone on another couple of years, they would pretty well have covered it, but we never had a worse unemployment rate during the days of the depression than we have at the present time from the standpoint of the coal miner.

Mr. BALDWIN. Well, do I understand, then, that basically the Area Redevelopment Act has not solved the unemployment problem in your

area?

Mr. PERKINS. I am very sure the gentleman knows that the amount of funds in the Area Redevelopment Act is limited and it would be impossible to solve a great problem like this, a great, huge unemployment problem. It will be very helpful. It will be very helpful but what we really need is this accelerated public works program down there to make those areas attractive for industry, and then the area redevelopment legislation, in my judgment, will be more effective, because when we get to roads and sewage and other public buildings there that can be constructed under this legislation, I think the area redevelopment bill then certainly will play a great part in the upgrading of our economy down there.

Mr. FALLON. Mr. Blatnik?

Mr. BLATNIK. Mr. Chairman, at the outset may I say that I worked very closely with my colleague and my good friend from Kentucky, Mr. Perkins. I think I can say very candidly no man in his quiet, modest but effective and determined and persistent manner has given study and thought and actual effort and posed legislation to this very serious problem which occurs not only in his district, but quite a few other districts across the country.

It also includes my district. Where you have the depletion of coal, we have the depletion of iron ore and competition from oil from Venezuela and Canada.

I want to commend the gentleman on his statement, his work and thoughts. We have discussed these matters with the gentleman back in the depression of 1953 and 1954, the recession, and also in 1956 and 1957 and 1958. At that time we were discussing the need of working out a public works program on a short-term basis to upgrade whatever facilities would be of help to other industry, such as your tourist industry. It is extremely important, for example, so important in my northern Minnesota section, that at times when iron ore is low, the income from tourism brings in more dollars than iron ore. Agriculture is first, and iron ore and tourism next fluctuating back and forth depending on the volume of iron ore shipments, and I know the support and the work that this gentleman has given to area redevelopment.

This is a long-term program. It takes a little time to develop it because of the procedures set up by Congress which involve local development groups to be set up. These groups must work up an overall area comprehensive planning for the area, must be approved by the State agency, and approved by the Federal agency. The participation involves local funds, both private and public. It involves State funds and Federal funds jointly, so on a joint venture of that type, it takes more time to get off the ground.

The area redevelopment bill passed Congress twice in the last 6 years. Three times, I mean. The first two times in 5 years it was vetoed. It had strong support in Congress and had that program been operating for the last 5 years, by now it would have been in full steam. In the meantime it would have established a record of performance and accomplishments that we in Congress could have reviewed, and in those areas where it was operating, we could have beefed it up to be more effective in these hard core unemployed areas where it was cumbersome or not working too well, that it could have been streamlined or cut down, you see, and improved.

So, the area redevelopment has not been given an opportunity to really get going.

In the meantime, we have this choice: Shall we pay people through unemployment compensation or support them through welfare programs and relief rolls, or shall we put them to work on bona fide community facilities, on resources, projects that are badly needed that will upgrade the community prospects and potentialities and serve a useful function for the next 40 or 50 years?

I think it should be brought out that the gentleman has taken the lead in paying attention to young people. The author and chairman

of the subcommittee has twice gotten through his committee the Youth Opportunity Act which provides programs for young people in the municipalities and smaller communities, and has also a section for youth, a program similar to the Youth Conservation Corps of the early 1930's, so I commend the gentleman and express my wholehearted support of his proposition.

Mr. Perkins, your recommendaton that attention ought to be paid to areas of severe and acute economic distress at once without waiting for the overall national picture is a sound one, and I think you recognize that the President himself was acutely aware of that when he recommended an immediate program involving $600 million to go into effect and to be applied for such projects in the depressed areas and in labor surplus areas, so that would be in line with the recommendation that you have made in the proposed amendment you have made, would it not?

Mr. PERKINS Yes, sir.

Mr. BLATNIK. I thank the chairman, and I commend

Mr. PERKINS. I want to make one brief observation. When I was county attorney in 1942, along in July we had a serious flood in eastern Kentucky, particularly on Troublesome Creek, and a bridge washed out down at the mouth of Curt Creek, and across that creek and up those hollows you have a population of some 1,200 or 1,300 people. The gentleman who was in charge of the WPA program at that time was a fellow by the name of George Goodman at Louisville, Ky. I got in contact with him and told him about our financial circumstances, and within a matter of days the resident engineer had those plans ready and construction was underway within, I would say, 2 or 3 weeks.

The problem I am driving at here, I hope Mr. Whitton will come up with some language, and pursuant to my conversation with him. yesterday, I have some language in my prepared statement, where we can get rid of so much of this redtape and actually get some construction underway.

Now, there was no problem in any of those projects, and that bridge is still there today. It is a narrow gage bridge, but now needs to be rebuilt, and that is a particular example, in order to let the school buses run across that bridge where we need a new bridge, and if we can get some real construction along that line from the Bureau of Public Roads, some recommendations, and if the committee will consider to take place in these counties where we have this unusually high insured unemployment rate, I think the members of this committee will do a great service to this country and cause these rural communities to again get on their feet, and I am hopeful as the result of legislation along this line that these pockets of unemployment certainly will be alleviated and we will make great progress in the country. And unless we do something along that line, I just don't know how we can better it.

I thank you very much.

Mr. FALLON. Thank you, Mr. Perkins.

Mr. Gudeman.

STATEMENT OF EDWARD GUDEMAN, UNDER SECRETARY OF COMMERCE; ACCOMPANIED BY WILLIAM L. BATT, JR., ADMINISTRATOR, AREA REDEVELOPMENT ADMINISTRATION; AND REX M. WHITTON, FEDERAL HIGHWAY ADMINISTRATOR, DEPARTMENT OF COMMERCE

Mr. GUDEMAN. Mr. Chairman and members of the committee, I am Edward Gudeman, Under Secretary of Commerce. On my right is Mr. Whitton, Federal Highway Administrator of the Department of Commerce, and on my left, Mr. Batt, Area Redevelopment Administrator of the Department of Commerce.

Mr. FALLON. I might say the reporter probably needed an introduction of Mr. Whitton, but the committee doesn't. He has been here a number of times and has always been a very fine witness.

Mr. GUDEMAN. Thank you, sir.

Mr. FALLON. You may proceed, Mr. Gudeman.

Mr. GUDEMAN. Mr. Chairman and members of the committee, both Mr. Whitton and Mr. Batt have statements to make, and if agreeable, all three of us will make our statements and then try to answer any questions.

I appreciate very much this opportunity to appear before your committee and present the views of the Department of Commerce on the proposed Standby Capital Improvements Act of 1962. This proposal is embodied in H.R. 10318 and several additional identical bills. In addition, I wish to present the Department's views on the President's proposal for an immediate $600 million accelerated capital improvements program, as described in his letter to the chairman of this committee dated March 26, 1962.

This committee has already heard from a number of Government witnesses. The record is quite detailed regarding the nature of the proposals. I will not further burden the members of the committee or the record with a repetition of the basic explanation of the program the enactment of which we urge upon the Congress.

I should like to concern myself this morning with a brief discussion of the basic philosophy and objectives underlying the President's program. It is a program that flows naturally and logically from a whole series of actions and proposals which have come from this administration. It is a part of the basic administration goal of furthering our free-enterprise system by the full utilization of the resources of our Nation. It is a program designed to make economic recessions occur as infrequently as possible, to keep them from ever becoming severe, to end them just as quickly as possible, and to mitigate the effects of recession on its victims.

This administration believes not only in talking about economic growth but in pursuing policies which would assure it. In this pursuit of maximum economic growth, the Commerce Department is bending every effort to make its contribution. Only as we achieve this goal, can we hope to meet both our great needs at home and our important obligations abroad.

There are two aspects to the achievement of maximum economic growth. One is an increase in productivity to the highest possible level; the other is operation of the economy at such high level of