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a compromise, recognizing the fact that the bulk of the money was being furnished by the Federal Government, and at the same time there was an appropriate State veto put in under section 222, which enables them to offset certain parts of it, so I believe it is equally balanced in the proposal that now sets up the committee.

Therefore, I think it is probably the best method that could be arrived at at this time.

Mr. CRAMER. Your analysis is if the States recommend no single State can veto, but a single Federal representative can.

In section 214 I notice you suggest, on page 7, there should be an additional APW authorization. That would be about the way I have described this $90 million supplemental fund contained already in section 214. Would you agree that is already in the bill?

Governor SMITH. I think it is, part of it, because certainly this fund would be able to help and aid, as I understand it, the various programs that fit in this that would be allocated as necessary, but I would think, although I don't propose it as proper or germane to this act, that there should be additional accelerated public works programs considered by this Congress and at a later date given consideration.

Mr. CRAMER. You mean applicable to the entire United States? Governor SMITH. Applicable to the entire United States, yes, sir.

Mr. CRAMER. Of course that is the feeling of some of us with regard to this total act; we think if they are going to do it, they ought to make it applicable to the entire United States and not on a regional basis.

Mr. Jones. The only difficulty we have with Mr. Cramer's suggestion is we could not get him to go along on APW.

Mr. CRAMER. APW was not the approach. There are some things in this act which would be acceptable. I have a little difficulty in that Florida is not in it and never will be.

I will shorten my questions in view of the quorum call.

The State of West Virginia received, as I recall, a few years ago about 360 additional miles in the Interstate System, did it not?

Governor SMITH. Not that much, sir. Over a period of 2 or 3 years, it was almost that amount. It was 180 miles in 1961, and then there was some in the previous administration, something like 89 or 90 miles that was allocated in 1957 or 1958.

Mr. CRAMER. Has the State gotten its tax structure in condition where it can pay its matching share of all available highway funds now?

Governor SMITH. Mr. Cramer, the State of West Virginia passed a bond issue of $200 million at the last general session for its matching requirements, which is enough to meet immediate needs and also to take care of its proposed obligations under the provisions of this act.

Mr. CRAMER. How much is proposed to be used for the present program, and how much for the new program!

Is that $200 million all for highways?

Governor Smith. It is all for highways, and only for highway construction. These programs that we have proposed under the Appalachian program have been fitted into the funds that are going to be made available under that bond issue, so they will take care of it.

Mr. CRAMER. What is the breakdown? How much is for this program?

Governor SMITH. Sir, I do not know the exact details, but we have $40 million that will be made available during the coming year which will enable us to have matching funds for this year. We expect to get 16 or 18 miles of this underway and to catch up annually with the funds that are provided under the bond issue, and this will be determined to match whatever is necessary to be done so this program, which has a 5-year run, will be able to match the other, and also be able to take care of the Interstate System, which has a 10-year run.

Mr. CRAMER. As I understand it, West Virginia has 437 miles estimated; $235 million would be required solely to match this program.

Governor SMITH. Is this program not on a 70–30 program?

Mr. CRAMER. I am glad you mentioned that. The act says 50 percent except under special circumstances, and it has been my impression that most of the planning has been on the basis of going ahead and using 70 percent, regardless of the fact that Congress says 50 percent except under special circumstances.

That appears to be the attitude of most of the people who have appeared; they expect to get 70 percent, even though the Congress says 50 percent is the basis.

Even if you received 70 percent, your State costs would be about $135 million. Is $65 million enough to do the rest of your highway matching program?

Governor SMITH. We feel it will be available as it moves along, because there are other funds becoming available. This $200 million is not all the funds which are available; this in addition to our regular highway program.

Mr. CRAMER. I understand that, but up to this time you were not able to match your funds.

Governor SMITH. Yes; however, we will be caught up with the Federal funds as far as the program is concerned on the Interstate System, as well as on the ABC, and we anticipate the funds becoming available from regular or general revenue and highway users' taxes in West Virginia, plus the proceeds from the issuance of these bonds, which will enable us to meet the requirements for orderly construction of this road program outlined in the present bill.

Mr. CRAMER. That is all I have, Mr. Chairman.
Mr. CLEVELAND. I have just one question.
Mr. JONES. Yes, Mr. Cleveland.

Mr. CLEVELAND. The Governor of your State testified before this committee in reference to the period 1961-64 that it "has been one of great economy recovery for the State, with a new peak of cooperation reached between the people and all levels of government."

He then cited the fact:

Unemployment, which stood at 105,000 in 1961, has been gradually cut down to less than 60,000 early in 1964. We have beautified and cleaned up the State to make it more attractive to new industry and tourists and many new plants and a great increase in the tourist trade are the results. We were the first State to institute a State work and training program-providing for both the dignity of the individual and means of earning a living—to thousands of unemployed fathers, and this program has been so effective it is being recommended as a model to other States.

That is the quote. Then the committee cites the fact: The value of private building contracts for industrial plants in West Virginia awarded during 1962 was $119,500,000_about 4.7 percent of the U.S. total of such contracts. This is significant in view of the fact that the population of West Virginia is only about 1 percent of that of the United States. This statement was made last year, but I would like to ask you

if you

feel that statement was true last year, and that this resurgence is continuing under your administration?

Governor SMITH. That statement was true last year, and the same situation is going on at the present time. There has been some increase in unemployment because of seasonal factors, but generally the unemployment picture is remaining constant. We have stabilized our outmigration of population. There are still a lot of things to be done, and the greatest handicap we have now, of course, to further growth, is the need for development roads and a better educational program, and both these have been attacked by my administration, and the previous administration, by providing more funds through increased sales taxes in West Virginia to aid in the educational program.

By the passage of the bond issue, we are attacking the road program, so the combination of these two, with the assistance we hope will come under the Appalachia bill, and the other bills of Federal aid we have been working with, hopefully we will be enabled to continue this growth.

Mr. CLEVELAND. Thank you. That is all, Mr. Chairman.
Mr. JONES. Are there further questions?
Again, thank you,

Governor SMITH. Thank you very much.

Mr. JONES. Next we have the representative of the Governor of North Carolina, Dan K. Moore, who is represented by our distinguished colleague, Mr. Basil L. Whitener, who will make a statement in behalf of the Governor of North Carolina.



Mr. WHITENER. Mr. Chairman and members of the committee, Gov. Dan Moore of North Carolina asked that I present his statement to the committee today and say to you that he regretted so much it was not possible for him to be here in person.

Mr. JONES. You do not have to make any apology for the Governor so long as you are the representative.

Mr. WHITENER. Thank you, sir. I think I should explain to you that you are deprived of his presence because of the necessity of his addressing the legislature today, which opened this week in the State of North Carolina, and he just could not be here. But I will read his brief statement.

(Governor Moore's statement follows as read by Mr. Whitener:) The Appalachia Regional Development Act of 1965,

H.R. 4, presents a challenge, an opportunity, and a responsibility. The challenge is the goal of the program as stated by the President's Appalachia Regional Commission:

"The introduction of Appalachia and its people into fully active membership in the American society."

The opportunity is the approach: A true local-State-Federal cooperative endeavor to provide the region with the investments and the tools with which to achieve the goal. The responsibility is that of effecting these new programs within the greater context of continuing State government.

Appalachia is a region where economic growth has lagged behind the rest of the Nation. While geography has been a deterrent to full maturity of the region, at the same time it presents us with great natural potential. But this potential can only be achieved when accessible. The accessibility is essential to the eocnomic development program embodied in the bill.

Our country's history of economic development is eloquent testimony to the fact that economic activity is stimulated by routes of transportation providing access and interchange among the various centers of production, consumption, and recreation. The rugged geography of the Appalachian region creates tremendous transportation problems in addition to much higher construction costs. As a result, Appalachia is not readily accessible, which has led to a lack of economic development.

Highway building proposals contained in H.R. 4, both for developmental highways and a system of access roads, strike at the heart of the problem.

These will go far in overcoming the regional isolation in Appalachia and will supplement the basic transportation system of the State. Once these highways are provided and other capital improvements permitted under this act are available, the region will have the tools needed to achieve the goal of economic partnership in the American economy.

As I said before the Senate Public Works Committee, the people of the Appalachian counties are not to blame for their predicament. They are resourceful, self-reliant and courageous. They have worked hard and have accomplished much. They have never wavered in their determination to rise economically. It has frequently been discouraging.

I am a native of the Appalachian region of our State and know firsthand the problems and potentials of the area. We have too often seen the fruits of the new industrial evolution bypass us—but not for a lack of effort. In fact, the leaders of the western counties of our State have been most active in attempting to solve their own problems. The Western North Carolina Associated Communities, the Western North Carolina Regional Planning Commission, and the Northwest North Carolina Development Association have been very active and effective in this regard.

But our experience indicates that major capital expenditures are needed to stimulate the region. The combined efforts of all levels of government must be focused on this and this the Appalachian Regional Development Act of 1965 proposes to do.

I endorse H.R. 4 as the means to achieve the goal of economic development in the region and appreciate the promptness and efficiency of Congress in handling this bill.

That is the end of the Governor's prepared statement.
Thank you very much, Mr. Chairman.

Mr. JONES. You tell the Governor he vested himself in a good representative when he let you come before the committee.

Mr. WHITENER. I certainly appreciate that, but I certainly would not hold myself out as an adequate representative of our distinguished Governor.

Mr. CRAMER. May I say I agree with the chairman in complimenting the distinguished gentleman from North Carolina as being a very distinguished member of the Judiciary Committee, and well able to represent the State of North Carolina before this committee.

Mr. JONES. Mr. Everett is with us today, as I indicated earlier, for the purpose of introducing the representative of Gov. Frank G. Clement of Tennessee.

Mr. EVERETT. Thank you, Mr. Chairman. To save time, as there is a quorum call on, it is my pleasure and honor to present Mr. Harlan Matthews, who is the commissioner of finance and administration of the State of Tennessee.

We likewise have a State legislature in session and the Governor is detailed there, and Mr. Matthews is just going to file the Governor's statement for the record, and I will certainly appreciate it.

Mr. JONES. Mr. Matthews, you have come a long way, and you are going to be given every consideration. Mr. Everett says you would like to file the statement. Is there anything you would like to add ? STATEMENT OF HARLAN MATTHEWS, COMMISSIONER OF FINANCE


I would like it if you would permit me to say just a word. I have the Governor's statement here with me. It has been furnished to the committee, and he had hoped very much to be present himself.

Mr. JONES. Mr. Matthews, let me say this to you: we have an extraordinary circumstance we did not anticipate, and certainly it is not the desire of the chairman or the members of the committee to cut

you off.

Would you care to remain over until tomorrow and come back before the committee?

Mr. MATTHEWS. I would be happy to if the committee would like that.

Let me say simply in view of the circumstances, Tennessee finds this bill completely acceptable and we are in full support of it. The Governor has been both a participant and a supporter of the bill. Mr. JoNEs. Thank

you. As I say, we will welcome you tomorrow if you can be here.

We are not going to let the Volunteer State down. Mr. MATTHEWS. I will file the statement with the committee and leave it to the committee's discretion. If I may be of service, I will be delighted to come.

Mr. JONES. Thank you very much.
Mr. MATTHEWS. Thank you very much.

(The prepared statement of Governor Clement, of Tennessee, follows:)

TESTIMONY OF FRANK G. CLEMENT, OF TENNESSEE Mr. Chairman, members of the committee, my name is Frank G. Clement, Governor of the great State of Tennessee.

I wish to present testimony, for the record, in support of H.R. 4, the Appalachian Regional Development Act of 1965. It was my privilege to testify and zake Tennessee's position known last year before appropriate congressional

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