mony that there has been some criticism of spending the amount of money proposed.

You are aware, of course, that the Federal Government is in debt at the present time?

Mr. NEWMAN. Yes, ma'am.

Mrs. DWYER. Now, in order for the Federal Government to help the municipalities in this program, as I see it, they loan money at approximately 2% percent, and then, in turn, they must go out and borrow money at 4 percent. Would you say that was good business? Mr. NEWMAN. I would say that the problem that we are facing here now is a menace to the public health of our Nation. Many of our smaller communities in particular and by small, I am referring to towns of 15,000 population and under-are not in position to provide adequate sanitary sewer systems or disposal systems for themselves, at a time when the public health laws have been strengthened.

Insofar as the differential in the interest rate is concerned, as I understand it, this program is not an outright grant. It is rather the lending of money to these local communities.

Mrs. DWYER. Lending at a loss, if you please, as far as the Federal Government is concerned. This program is not confined to just the smaller municipalities. It also takes in the cities as well.

Mr. NEWMAN. Yes, I am aware of that.

Mrs. DWYER. That is all, Mr. Chairman.

Mr. SPENCE. Mr. Newman, there is one industry that the city has been successful in operating, and that is furnishing water to its people. Don't you think that the water system, and the sewage system, would be a very appropriate basis for revenue bonds?

Many of these cities can't obtain the funds because of statutory or constitutional restrictions on borrowing. The sewage system, when once constructed, is practically indestructible. We know that in Rome and other ancient cities sewers were constructed before the beginning of the Christian era and still remain. Don't you think that this character of construction, and the indestructible nature of the systems, make them very appropriate bases for revenue bonds?

Mr. NEWMAN. We certainly do, yes, sir. And as a matter of fact, I would suppose that most of the current construction going on in the area we serve is being done through revenue bonds.

Mr. SPENCE. Can't the condition that exists be called an emergency notwithstanding it has existed a long time? Living in the Ohio Valley as I do, it seems to me there is an emergency. There is a need to clean up that river. It has been a deterrent to industries locating there because proper water facilities are not available for industries. The health of the people is endangered.

All of those things might be solved, in great measure, by the enactment of legislation such as this, might they not?

Mr. NEWMAN. I believe so, yes, sir.

Mr. SPENCE. Its impact would be very great also on the unemployment situation. Don't you think that would be true?

Mr. NEWMAN. Yes, sir, I believe it would be true.

Mr. SPENCE. It would not only tend to increase the population of the towns, which would stimulate housing construction and also bring industries which would create employment.

I think that we could do nothing better than to stimulate an adequate, potable water supply for the people, and a means by which sewage could be treated and disposed of without being a menace to the health of the people of America.

Thank you very much for coming here and testifying on this bill. Mr. NEWMAN. Thank you kindly, Mr. Chairman.

Mr. SPENCE. Are there further questions?

If not, you may stand aside.

Mr. NEWMAN. Thank you, Mr. Chairman.

Mr. SPENCE. The committee will stand in recess, to reconvene tomorrow morning at 10 a.m.

(Whereupon, at 11:45 a.m., the subcommittee adjourned, to reconvene at 10 a.m., Wednesday, April 22, 1959.)

COMMUNITY FACILITIES ACT OF 1959

WEDNESDAY, APRIL 22, 1959

HOUSE OF REPRESENTATIVES,

COMMITTEE ON BANKING AND CURRENCY,

SUBCOMMITTEE No. 1, Washington, D.C., April 22, 1959.

The subcommittee met, pursuant to adjournment, at 10 a.m., in room 1301, New House Office Building, Hon. Brent Spence presiding. Present: Messrs. Spence (presiding), Brown, Rains, Healey, Widnall, Mrs. Dwyer, and Mr. Halpern.

Mr. SPENCE. The committee will be in order.

Our first witness this morning, as we resume hearings on H.R. 5944, will be Mr. Andrew Biemiller, for a long time a distinguished Member of the Congress of the United States. He comes here to speak for the AFL-CIO, for which he is general counsel.

We are very glad to have your statement, Mr. Biemiller, and we are happy that you can come back again so that we may renew our pleasant associations with you.

Mr. BIEMILLER. Thank you, Mr. Chairman.

Mr. SPENCE. You may proceed as you please. You may read your statement without interruption and then subject yourself to interrogation.

STATEMENT OF ANDREW J. BIEMILLER, DIRECTOR, DEPARTMENT OF LEGISLATION, AFL-CIO; ACCOMPANIED BY PETER HENLE, ASSISTANT DIRECTOR, DEPARTMENT OF RESEARCH, AND GEORGE TAYLOR, ECONOMIST, DEPARTMENT OF RESEARCH

Mr. BIEMILLER. Thank you, Mr. Chairman.

For the record, my name is Andrew J. Biemiller, director of the Department of Legislation of the American Federation of Labor and Congress of Industrial Organizations. My office is at the AFL-CIO Building, Washington, D.C.

I am accompanied by Mr. Peter Henle, assistant director of the Department of Research of the AFL-CIO, and Mr. George Taylor, an economist with our Department of Research.

Mr. Chairman, the AFL-CIO wants to congratulate this committee in taking the important step of holding public hearings on what could become one of the most significant legislative achievements of the 86th Congress.

Essentially, H.R. 5944, introduced by the distinguished chairman of this committee, Congressman Spence, and a companion bill introduced by Congressman Rains, represent a proposal for the Federal Government to assist localities throughout the Nation in meeting some of

their most pressing needs for water purification and distribution, for treatment of sewage, and for construction of public health facilities.

In the pending bill, assistance by Federal Government would be available in the form of loans to individual localities or through the purchase of their securities. A $1 billion revolving fund would be authorized for this purpose.

Admittedly, this is a new program and perhaps a controversial one. Nevertheless, we are convinced that the need for this legislation is critical, that the legislation itself has been carefully modeled after existing successful loan programs, and that the resulting program would bring substantial benefits to all Americans.

In this testimony we would like to outline why the AFL-CIO and its affiliated unions have become so interested in this legislation, and why we are here to give it our support.

Our membership is located in every part of the country and in every type of community, in the small towns as well as in the large urban centers, in the countryside and in the suburbs as well as in the central city itself.

We are proud that our union members take an active interest in the welfare of the community in which they live. Many of them serve on local government bodies, on appointed boards and commissions, and on advisory groups to school administrators, mayors, or city

managers.

In almost every locality, our members report that their communities have not been able to keep pace with the tremendous expansion of population that has taken place throughout the country in the years since the end of World War II.

While it is true that all parts of the country have not been subject to th same population pressure, there are communities in every single State that have found it impossible to keep up with the demands of an expanding and shifting population. In these cases the community simply cannot provide the necessary roads, schools, water supply systems, sewage disposal, libraries, recreational areas, and a host of other necessary public facilities. The public simply has to do without or utilize completely outmoded or obsolete facilities.

Let me discuss a few specific examples. Perhaps the most serious problem has been the matter of transportation facilities. The rapid growth of the suburbs, the increased ownership of automobiles, the expansion in the use of trucking facilities have all put an insuperable burden on our existing network of roads and highways.

States and localities find that funds available to them for road construction and repair are totally inadequate. The Federal Government has now moved into this area by developing a greater Federal program to provide funds for the construction of interstate highways. Yet too often it is the network of secondary roads that most needs improvement.

Another critical area, of course, has been the problem of school facilities. The shortage of classrooms, of qualified teachers, and of facilities for higher education have been the focus of public attention in all parts of the Nation. Despite the most energetic activities by both local communities and State governments, shortages of educational facilities still persist. Various committees of Congress are now wres tling with the problem of whether the Federal Government should

intervene more actively in order to make certain that these shortages can be overcome.

Another related area has been the adequacy of the airports and airport facilities. Certainly the continuing increased use of air travel, the congestion so evident at many of our airports, and the need to install the most modern safety equipment, all point to the necessity for an accelerated program for airport facilities. Congress has moved in this session to provide Federal funds for such a program.

In these three areas, highways, schools, airports, Congress has taken or is seriously considering specific measures for Federal financial assistance to meet these pressing problems.

In addition, there are other equally urgent needs in the field of community facilities for which assistance is badly needed. We are thinking particularly of the needs for adequate supplies of clean, pure water; for the effective treatment of sewage to help remove the pollution from many of the Nation's streams and rivers, for public health facilities, particularly to take care of our aging population; for recreational areas which so frequently become squeezed out of community plans for an expanding population; for libraries and other necessary public buildings. All over America, there are pressing needs for different types of public facilities which the local communities have been unable

to meet.

Consider, for example, the problem of water. Demands for water generally will double between 1958 and 1975, according to the U.S. Geological Service. With the expected population increase, water needs for municipalities, particularly in our proliferating metropolitan complexes along the Atlantic seaboard, in the Middle West, and in California, will continue to multiply. The necessity of firming up the water supply and assuring the use of available water by pollution abatement will become more and more crucial.

While domestic and stock watering calls on available water supply constitute only a little more than 10 percent of all beneficial consumptive uses, this proportion will increase with the jump in population. New uses for water in the home-air conditioning, automatic washers, and the like-will further add to the pressures.

The nationwide problem of pollution, therefore, must be more effectively attacked, and this attack must of necessity be mounted primarily by the States and localities.

The Federal Government has been contributing and should continue to contribute to the broad planning, research, and national inventorying of our needs and capabilities in the field of water. The financial problem for State and local governments is complicated by the fact of nature that causes river systems to ignore State boundary lines. Thus, the dimensions of a program to handle pollution and obtain pure water for human uses are often financially beyond the capabilities of State and local government.

This situation underlines the need for expanded Federal financial assistance to meet the capital costs of water facilities and to establish proper administrative standards for so doing.

From available Government sources it has been estimated that pollution control-construction of waste treatment facilities for all presently outdated industrial and municipal facilities-will cost $5 billion. Obviously, a task of this magnitude calls for both a short and longer