All agenices have prepared inventories of records essential in an emergency and have taken steps for their transfer and preservation. Warning systems and procedures have been established which automatically trigger readiness measures in proportion to the crisis. All agencies receive and respond to that warning system and have developed internal alerting systems.

All major departments and agencies are now interconnected with the White House and OEP by a special teletype network capable of simultaneous transmission.

ACTION ON ALASKA CRISIS

When the Alaskan crisis struck, we needed to know within a matter of hours what each agency who has responsibilities in Alaska was prepared to do and could do. We requested such information over this system at 11 o'clock in the morning, and a 5 o'clock deadline, that same day and we had our replies in.

EXECUTIVE RESERVISTS

Over 3,000 executive reservists have been appointed in 10 departments and agencies including 222 in OEP. They consist of qualified executives from industry and the professions who have volunteered their services to fill key governmental positions in an emergency.

Senator MONRONEY. Do you think you could consider all the rest of this statement as placed in the record, and then spotlight the important matters? Our time is limited here.

Mr. CHAMBERS. Yes, sir.

The research and development part has already been explained by Mr. Green.

STATE AND LOCAL PREPAREDNESS PROGRAM

I want to comment very briefly on the State and local preparedness program because, as you know, the Congress gave us $1.5 million last year which was the first increment of a $3 million program.

With the $1.5 million that was made available to us, we have made considerable progress in this program.

John, how many States are we contracting with under this year's increment?

Mr. COSGROVE. We propose to contract with 31 States and 2 territories-Guam and Puerto Rico. Under the contracts the States will establish their own emergency capability to manage their economies temporarily under Federal guidelines if Federal control is not available or is interrupted. This is the mechanism that this program would help to build. As Mr. Chambers indicated, we are at a point now where we believe we can, with this fiscal year 1964 appropriation, contract with 33 of these jurisdictions. We are now requesting the second half of this program.

Mr. CHAMBERS. This is a 2-year program. It can be financed in 2 years. And we hope by two and a half years' time to have it completed. All States have appointed emergency planning directors; all but 10 have their planning committees working; all but 11 have formed task groups in the various emergency areas. We believe that this program is coming along. It is supported strongly by most of the Governors.

We think that if we can get this capability built into the States, that if we are disjointed for a while as a result of nuclear attack on the country, that there can be a substantial and unified effort made by the States.

In other words, what one State will be doing will be consistent with other States, so that we can gradually reconstitute a Federal control of resources.

DISASTER RELIEF ACT

Another item that I want to mention very briefly, because it is so important to us at the moment, has to do with the Disaster Act. Senator ALLOTT. What page is that?

Mr. CHAMBERS. Pages 28 and 29, sir.

We have a summary of the disaster allocations during fiscal 1964 which total up to approximately $30 million.

We have an estimated additional allocation for the balance of 1964 of $54 million, because of basically the Alaskan situation and the Ohio and the Crescent City situation.

The estimated gross allocations for 1964 are $85 million. We are asking for an appropriation of $20 million to the fund in order to keep the fund at about the same level that we have found most workable over the years.

DISASTER FUNDS REQUEST

Senator ALLOTT. Now, Mr. Chambers, you say it is now $85 million. You are requesting another $20 million.

Mr. CHAMBERS. The $85 million is our estimated gross allocation; is what we expect during the balance of 1964.

Senator ALLOTT. Now, is this for the President's Emergency Fund? Mr. CHAMBERS. Yes, sir.

Mr. RICE. Not appropriated to OEP but to the President.

Senator ALLOTT. But, it is what is ordinarily known as the President's Emergency Fund?

PRESIDENTIAL EMERGENCY FUNDS

Mr. McLEAN. Sir, the President has two emergency funds. He has a fund, called the President's Emergency Fund, which runs about a million dollars a year. This is used primarily for internal government expenses. When a group or commission is created-for example the Peace Corps-it would be initially financed out of this fund.

The President's Disaster Relief Fund is the one we are talking about here. This provides financial assistance to the States in case of natural disaster.

Senator ALLOTT. And $20 million is what you are asking for? Mr. CHAMBERS. That is correct.

DAMAGE TO ALASKA

Senator ALLOTT. You have mentioned the Alaskan disaster several times. I realize you do not have everything down but, what do you contemplate, at this point, you are going to have to put into Alaska?

Mr. CHAMBERS. Senator, the problem falls into two categories. The disaster, as you know, is a most serious one. The impact on public utilities and facilities and the federally owned facilities logically will be supported either out of appropriations made directly to the Departments, such as the Department of Interior for the repair and maintenance of the Alaska Railroad, or through the President's Disaster Relief Fund, which is covered by Public Law 875. We estimate that this could run well over $50 million. But that is not the serious disaster up there, Senator. The serious disaster is what happened to the private sector. And there is nothing on the books now that permits you to go in, except in long-term low-interest-rate loans and things of that type.

For example, the fishing industry has substantially disappeared. And yet this is one of the basic industries of Alaska.

Senator ALLOTT. The problem is really the reconstruction of the complete economy.

Mr. CHAMBERS. Yes, sir; an economy with a tax base destroyed. And there is a fairly good, but very early, summary of the economic effect on Alaska, Senator, which might be of considerable interest to you; this was prepared with the assistance of the Department of Commerce.

But, as you know, the President has appointed a Commission, chaired by Senator Anderson, that is supposed to be looking at the longer range economic and rehabilitation problems. That is where the chairman and Mr. McDermott are at the moment.

You really have to start from scratch in rebuilding an economy of the State.

This is a type of problem with which we have never been confronted in our Nation before.

Mr. RICE. Of course there are many indirect problems, such as the fact that the State income tax is based upon the Federal income tax, and many will be relieved of virtually all Federal income tax, based on legislation of several years ago; which means that in many instances there will be no State tax, because a percentage of nothing is nothing.

Mr. CHAMBERS. If I could give you a couple of examples of that, sir. A man at 5 o'clock on Good Friday, had signed a $40,000 mortgage on a very nice home. At 5:37 he did not even have the lot the house was on, nor the house-all he had was a $40,000 mortgage. He also had a business down at Anchorage, and that disappeared. So the problem we are all very deeply concerned aboutand I am afraid that Congress is going to have to solve this one-is what do you do? To go in and offer this man a long-term, lowinterest-rate loan on top of the debts he already has is one approach to it. But it is not going to be a complete answer.

ALASKA RAILROAD SITUATION

We are making substantial progress on the public side. For instance, the Alaska Railroad has now got its lines into Fairbanks operative again, and the port of Whittier is supposed to be open by the 15th of this month. The port of Whittier is one of the ports that

is now ice free. But it needs a hundred-ton gantry crane that disappeared. We have one coming from Oregon, which will get there on the 14th. So the port of Whittier should be opened on the 15th. One of the main ports of entry of course was Seward. It was a terminal of the railroad. One of the major economic problems is, are they going to rebuild the railroad to Seward-there has been heavy damage to it and reopen the port of Seward.

Almost everything north of the Brooks Range in Alaska is served through the port of Valdez. Where we managed to get a temporary bargelike pier operating, and they are beginning to move material through the port. But a delegation from Fairbanks was down this week, and they tell me that something more has to be done if they are able to proceed in the north.

The Alaskan problem is with us, and is going to be with us for a long time.

ACTION OF AGENCY FOLLOWING DISASTER

Mr. COSGROVE. Immediately after the disaster, our regional director went into Alaska and three other members of the regional staff have gone in and are operating in Anchorage a central emergency coordinating point for the Federal Government. The early reports they sent back to us, preliminary reports, indicated very heavy damage to State and Federal property, because I think it was easier to measure this. Increasingly, now, you see the reports coming in, still of a preliminary nature, showing the private loss, the private sector loss, which is mounting now very steadily.

RETROACTIVE INSURANCE

Senator MONRONEY. Can you have a program that will supplement the loans with some grants to the private sector?

Mr. CHAMBERS. As you know, Senator Jackson along with other Senators has introduced a bill on retroactive insurance which is being discussed today. There are various plans that have been advanced. You have a basic problem of establishing precedents, Senator.

Senator ALLOTT. We do have a real national emergency here possibly to a depth we have never had before.

Senator MONRONEY. A larger area and more people involved, and so far removed.

Mr. CHAMBERS. The only blessing on this thing is we have such a light casualty loss, Senator. You have the question of rebuilding some of these towns and cities in the same specific locations. The Geological Survey is in there now with nine teams trying to give us the best advice. It looks like the Port of Valdez is going to have to be shifted several miles in order to get away from the faults.

From our standpoint, it has been a 24-hour, round-the-clock operation with us ever since it happened. We are coordinating all the Federal agencies. We are using the Corps of Engineers in Alaska as our contracting agency, except in Kodiak, where we are using Yards and Docks. The establishment of priorities and the allocation of resources and seeing what can come out of Seattle first in the way of supplies and whatnot is a very minor part to what we would have if we had a nuclear attack on the United States. Here we have the whole United States to draw on. But if this situation were spread

out to the United States, some of the planning that we are doing may turn out to be very useful.

Senator MONRONEY. Thank you very much, Mr. Chambers.

Mr. CHAMBERS. Will the balance of the statement be in the record, sir?

Senator MONRONEY. It will be carried exactly as it was prepared for us.

(The balance of the statement referred to follows:)

STATEMENT OF EDWARD A. MCDERMOTT-Continued

While we have achieved considerable progress in this program, certain elements need to be substantially upgraded in order to prevent obsolescence and to accommodate new developments and changes in military technology. This is particularly true in the Federal relocation arc. The arc was originally designed when the main threat was from manned aircraft with a probable advance warning time of several hours. The system assumed reliance on unprotected facilities located at a relatively safe distance from Washington. All of this has changed. We now need to improve key elements of the arc to protect communications and to support essential operations. Also, in order to protect against surprise attack, certain critical functions can be permanently relocated to mitigate the consequences of only a few minutes warning time. We are now developing the detailed specifications for this improved system.

In developing these specifications, our cost effectiveness studies have shown that we must reduce to an austere, absolute minimum the essential functions requiring both relocation and permanent location. We expect to complete these determinations at the headquarters level in this fiscal year and in fiscal year 1965 we shall extend these determinations to the field.

STATE AND LOCAL PREPAREDNESS

Up to now, I have been speaking of the actions we have taken to improve our readiness at the Federal level; however, the devastation from a nuclear attack might make it impossible for the Federal Government to begin immediately its program for the economic rehabilitation and recovery of the Nation. Communications between the Federal Government and the States might be scattered and disrupted. Isolated areas may escape relatively intact, but with transportation and communications cut off. Even those States whose services remain largely operative would be faced with an immediate flood of complex supply and resupply problems. For these reasons we must rely upon State and local governments temporarily to carry out some of the Federal Government's traditional functions of resource management and economic stabilization in a national emergency until the Federal Government is able to function on a nationwide basis. To achieve this end, we have established the comprehensive program for the survival of Government and management of resources. This program consists of two parts:

One, a series of legislative and other actions to insure the survivability and continued functioning of State and local political authority.

Two, the development of a capability on the part of each State to manage essential resources with the active participation of the private sector of the economy.

We have stressed this participation since, unlike civil defense, the skills required for resources management are not normally found in Government. Government does not schedule steel production nor does it route rail traffic. The managerial expertise to accomplish such ends can only be found in the private sector of our economy and it is therefore imperative that leaders from this sector be brought into a working partnership with Government.

I am pleased to report that a substantial amount of progress has already been achieved on the comprehensive program. The legislatures of 34 States have approved a constitutional amendment which permits legislation dealing with lines of succession and other continuity measures. Legislation dealing with lines of succession has been enacted in 40 States, with emergency relocation in 39 States and with records preservation and management in 18 States.

With regard to resource management, all 50 States have now appointed Emergency Planning Directors, 42 States have established Emergency Resource Planning Committees, and 507 task groups have been organized in those States to develop detailed plans for mobilizing and managing specific resources.