partly sewage also, unfortunately, will have to levy, I am told, 8 mills on the taxpayers to pay for that alone.

Mr. CRAMER. Well, sir, if they borrow the money through the Community Facilities, the Community Facilities has a half a billion dollars unloaned, and uncommitted at low interest rates

Mr. KALAHAR. I can assure you that we have asked for those funds, because we need them all in this program alone, but, of course, there are still the laterals to be put in.

Mr. CRAMER. And you pay for it out of the water revenue, do you not?

Mr. KALAHAR. Oh, no, not for the drains. The drains-it is drains and

Mr. CRAMER. Oh, I see.

Mr. KALAHAR. And combined sewage.

Mr. CRAMER. Where is the Federal Government going to get this money?

Where are we going to get this $2 billion this year and $2 billion next year, or more, for accelerated public works?

The local communities are having troubles. Do we not have troubles, too?

Mr. KALAHAR. I know that, Congressman, of course, but that is really your problem, I believe.

Mr. CRAMER. It is not exactly our problem where you indicate in Michigan, and in your area alone you could use $1,206 million worth of work.

Mr. KALAHAR. That is true.

Mr. CRAMER. Now you multiply that by the 50 States

Mr. KALAHAR. I do not anticipate

Mr. CRAMER. And thinking in terms of the many additional communities that have similar needs, and you have an insurmountable burden for the Federal Government if we are going to put a hundred percent of money, in special cases, in loans and grants and

Mr. KALAHAR. It is not intended that way, Congressman. Local funds will be used as soon as-planning money is one of the things that must be done before you can go ahead with these things.

Mr. CRAMER. There is nothing in this bill for planning money.
Mr. KALAHAR. Is there not?

Mr. CRAMER. No.

Mr. KALAHAR. I may have been misinformed.

Mr. CRAMER. There is nothing in this bill for planning money outside of the communities facilities program.

Mr. KALAHAR. Mr. Chairman, Mr. Connor would like to make a brief statement.

Mr. BLATNIK. Mr. Connor, for the record, what is your title?

Mr. CONNOR. Mr. Chairman, to identify myself, my name is Ed Connor, and I am a councilman in the city of Detroit, a member of the Wayne County Board of Supervisors, and, in addition, vice chairman of the supervisors, intercounty committee, and also a director of the national association of county officials.

Mr. BLATNIK. You may proceed with your statement.

Mr. CONNOR. Mr. Chairman, first of all, I want to apologize for not having a prepared statement that could be distributed to the members of the committee.

The reason for that is it was not until 2 days ago that I knew it was going to be possible for me to testify. I will, however, for the purposes of the record, if desired, furnish a written statement embodying what I will say here this morning, at a later date. Mr. BLATNIK. You will have permission to revise your remarks. Mr. CONNOR. Fine. I appreciate that very much.

Also I note that part of the reason I am here is because the common council of the city of Detroit, in informal session, has agreed to a formal adoption of a resolution which will take place tomorrow, endorsing the legislation that is under consideration by this committee and, in addition, endorsing the program as contemplated in the recent message of the President.

Now, the first point I want to make is that in the Detroit area we have a very serious unemployment problem, and I think, Mr. Congressman, the figures cited of 250,000 constitute the entire unemployment problem for the State of Michigan.

A portion of that, in the Detroit area, is around 160,000, I believe the total.

Now, this unemployment in Detroit has been occasioned by a number of factors that I know have been brought to the attention of this committee. Among those are such things as automation, a change in the policies and marketing procedures of the automobile industry, and a number of the usual factors that have had their impact.

There are certain particular communities, of which Detroit is probably the basic and most outstanding, also contributing to this unemployment position. It has been the policy of the Federal Government and the encouragement of the Federal Government, a policy of decentralization, which has particularly affected the automobile industry, and as a result, has particularly affected the city of Detroit and the southeastern Michigan area.

Add to that the encouragement given by the Federal Government to the building of new plants which has again particularly affected our area, because it has resulted in an opportunity for plant rebuilding that has outmoded many of our plants, and because of our situation, it did not result in equal opportunity being taken by private industry in the area, and we have had a serious, chronic unemployment problem extending over several years.

Now, this is more than just a local situation. The Detroit area has been one of the productive industrial and economic areas of the country, and its contribution to the Federal income has ranged about fourth in the entire Nation, and we are concerned over our continuing ability to make that kind of contribution to the whole economy.

This brush fire, which started in Detroit, could spread very rapidly. One of the things that has concerned us is this. Our foreclosure rate on mortgages up until 1960 was at a fairly steady rate and well below a thousand per year.

In 1960 mortgage foreclosures in Detroit went up to 1,500.

In 1961 they went up to 2,200, and at the rate that they are taking place this year, the forecasters are predicting that for the remainder of the year it will reach 3,500.

And we think that this is a significant factor, that all it wants in terms of the local area there is this rapid acceleration in this important economic indicator.

Now, this problem is one not only of providing help in the present unemployment situation, but helping us preserve an economic plant and add to it, in terms of increasing employment possibilities for the future, and one of the questions asked earlier this morning pertains to this. I think it is most important to us.

It means extension particularly of waterlines and more particularly of sewerlines, a field, incidentally, in which the Federal Government, to my knowledge, makes no direct contribution of any significance today. It is most important in terms of providing the community facilities which are a necessary counterpart or counterpoint to any largescale industrial expansion.

Now, the third point I want to make is that the impact on the local community is not merely in terms of unemployment or costs directly attendant thereto, such as our welfare cost, but we are also experiencing a direct loss of assessments, because long-continued unemployment, as a result, lowers the economic business plan of the community to the point that on real estate taxes and the like the valuations must come down, and it is significant to note that in the last month the city of Detroit has lost $170 million in assessments, approximately $115 or $120 million of that being in inventories and assessments on equipment, and the other $52 to $60 million being on real estate assessments.

This will result in a direct loss of revenue to the city, on the one hand, of close to $4 million, while, on the other hand, our welfare costs have been approximating $13 million and more a year.

Now, as a result of this I would particularly like to stress my being in favor of these bills, but to also urge that, in your consideration of those bills, serious consideration be given to the ability of the local community to contribute.

We like the principle, in general, of matching funds and, incidentally, I think in the Detroit area we have a long record of trying to do things for ourselves. As a matter of fact, the intercounty supervisors committee was established on the principle that we want to do at the local governmental level all that is humanly possible for us to do without calling on either State or Federal assistance, but this is a point where the responsibility is more in the local government and meeting the responsibility will take more than local resources.

Now, a community that has been attacked by unemployment like ours begins to lose its ability to participate financially immediately on a matching basis on these programs, and we would like to urge that, in your consideration of these bills, you give consideration to these four points:

First of all, the possibility of making a local contribution at as small a level as possible.

Secondly, possibly working out a program for deferred contribution by the local community in order that the work can be started immediately and at once.

Along with that would be the third point, and that is the possibility of scheduling the payment of the local contribution over a longer period of time, perhaps, such a period of time as the impact of the improvement would be felt in the local economy so that it would help to pay for its own costs; and, finally, that the local contribution, if deferred, the deferment would be at a low interest charge to the local community or no interest charge.

We feel that this legislation now under consideration is again one of the needed tools, along with the others, that the Congress has adopted, that we need very much and we urge most strongly enactment of bills along this line.

Mr. BLATNIK. Thank you very much, Mr. Connor. You will be given the opportunity to revise your remarks.

Mr. SCHWENGEL. Mr. Chairman?

Mr. BLATNIK. Mr. Schwengel.

Mr. SCHWENGEL. I would like to ask a brief question.

You say the common council of Detroit will introduce this bill at its session tonight?

Mr. CONNOR. The resolution endorsing the proposed legislation will be adopted tomorrow.

Mr. SCHWENGEL. Will be adopted tomorrow?

Mr. CONNOR. Right.

Mr. SCHWENGEL. How many members are there of the common council?

Mr. CONNOR. Our common council consists of nine members elected at large from the entire city on a nonpartisan basis.

Mr. SCHWENGEL. Now, how do you know that they will endorse this?

Mr. CONNOR. Because approval has been given in a meeting of the whole committee already.

Mr. SCHWENGEL. How many people have read this bill?

Mr. CONNOR. There have been considerable-like any other legislative body, I hesitate to speak for what my colleagues have or have not done.

I have read it, and I know that several of the others have read it, and there has been such discussion before the common council that I am sure all are familiar, at least, with the broad outlines and purposes and objectives.

Mr. SCHWENGEL. Do they know, for instance, that Mr. Meany testified before this committee that if it is fully implemented it would only employ 250,000 and mostly those would be on a temporary basis over the United States?

Mr. CONNOR. Mr. Meany, of course, was speaking on a mass level. I am speaking particularly in terms of the local level, local but still important in terms of the national economy.

A proper percentage of those 250,000 jobs in the Detroit area would be what we would hope to have, and we trust that it would be substantial.

Mr. CRAMER. You are limited to 1212 percent of all of the money spent, and if this State got 122 percent that would limit it very substantially for the State of Michigan.

Mr. CONNOR. We did

Mr. CRAMER. Twelve one-half percent of $25 million

Mr. CONNOR. We do not think that this bill

Mr. CRAMER (continuing). Would be very little this year.

Mr. CONNOR (continuing). Would be the total answer. We think it is one of the tools, some of which are available and some of which are in contemplation by the Congress that would help.

It is an important one of the tools, however, and we think it ought to be added to the weapons with which we have to attack this problem.

Mr. CRAMER. Will the gentleman yield?

Mr. SCHWENGEL. Yes.

Mr. CRAMER. The reason it was brought out when the Governor was here was because it was clearly shown that if Michigan got its full 1212 percent it would not mean more than the employment of 8,000 to 10,000 people a year.

Now, that is not the answer to Detroit's problem. And what disturbs me is that the Governor of Michigan and the Governors of some of these other States, and the mayors of some of these other communities, and the present representative of the American Municipal Association-do you represent the National Association of County Officials?

Mr. CONNOR. In this testimony I am talking in terms of the Intercounty Supervisors.

Mr. CRAMER. I see. But I understand we will hear from the county association later.

Mr. CONNOR. That is right.

Mr. CRAMER. But the impression that I assume is being left, and 1 know it is the impression being left throughout the country, is that for the unemployment and the communities which have these problems this is the answer; that this is going to employ our people; that this is the solution, a 100-percent Federal grant to these public works programs, when the truth of the matter is that this is "peanuts."

This is hardly a start on the real problem, and I think you put your finger on a lot of the substantial problems that exist, such as automation and what have you.

But to suggest, as the Governor did, for instance, by coming in and listing nearly $800 million worth of public works projects that could be financed by this in the State, and listing them in that manner, by that suggestion, why, every community in Michigan is now assuming that if this bill passes they are going to get some help.

It is false. If this whole program is instituted, these projects are not all going to get help, and this humdrum public relations support of this proposal, which is very small and very niggardly to start with, I am afraid, is leading a lot of people into believing throughout the country that this is the answer when, honestly, it is not the answer. At best, it is a very temporary thing on a minimal basis.

Mr. CONNOR. Mr. Chairman, I think I can assure the Congressmen that, at least in the Detroit area, we are not looking toward any one program as the total solution.

Our mayor will be here tomorrow to testify. We have a broad range and diversified attack that we are trying to make on this total problem which needs to be approached in several directions.

However, I must insist that even 8,000 to 10,000 jobs in our area would be important.

Mr. CRAMER. The whole State of Michigan, not just your area. Mr. CONNOR. Well, even five or six out of the whole State. We find that we are very much concerned with preserving jobs in our company and in our efforts to secure even 100 new jobs in our community. So if we can, through this one bill, receive aid and assistance which would provide 4,000 jobs, and half of the population of Michigan is in the Detroit area, that would be a big help.