Mr. Chairman, the people of this region have understood for a long time now that they were not maintaining an economic expansion commensurate to the needs of the area, and this despite the high degree of local initiative that has been put forth. The people in my area began, back in 1960, to find ways in which they could fulfill their economic potential. The establishment of the Western Maryland Economic Conference in 1961 was a step in this endeavor. Drawing together various interest groups involved in this problem-agriculture, business and industry, labor, Government-we studied and discussed the situation with which we were confronted, in the hope that the exchange of ideas would bind us together and yield a fuller understanding of how to combat depressed industry, depressed agriculture, and unemployment.

From this conference, Mr. Chairman, we agreed upon the need to retain and emphasize local initiative. We were able to establish liaison between the counties and communities involved and to agree upon the need for a united effort to uplift the entire area; indeed, an entire region of the country.

Now, we are at the point of needing further assistance. Individuals, communities, counties, and States are ready and willing to act in a concerted effort with the Federal Government to attack the problems of the region. As partners, we can accomplish much.

One of the great needs of the area is better and more roads and highways. We need roads in order to economically convey the substantial natural resources of the area to their markets. Highways can and will open the area to tourism, a real and largely untapped potential for this region of astounding beauty.

Another great need, Mr. Chairman, is the appropriate development of water resources-water needed by industry, water needed by the people for consumption and recreation, and the dams, of course, for flood control and protection.

Where highways may benefit one area most, dams may benefit other areas better. We have, in my opinion, to consider the economic differences of the region and maintain a flexibility that will enable us to assist communities and counties in the manner in which they most need assistance.

I realize the committee may be of the sentiment that changes should perhaps not be made in the bill as now proposed. But, the Senate has seen fit to amend the bill to include an area of New York.

I am hopeful that we can see our way to broadening the substantive provisions of the bill to include more attention for water problems and community projects such as sewer development.

Many needed community projects cannot be built without grant moneys because many communities cannot bear the total cost. At a future date it might be possible, having experienced economic growth, to bear such costs. But without help now we get into the problem of which comes first, the chicken or the egg.

Economic development and expansion is dependent upon adequate facilities for industry, and with adequate facilities we can develop and expand. Without them, we cannot. Thus, many community facilities are needed now.

I want to return for a moment to the matter of water resources. Our President has seen the need for such development in my area.

On his tour of the Appalachian region the President stopped in Cumberland. He said:

Your Senators tell me that the Bloomington Dam would attract industry, increase jobs, help Washington water supply, and provide a great deal of happiness for the people of Cumberland.

We must find ways to expedite this project because it will provide employment for unskilled labor and at the same time provide a greater flow from our watersheds.

Mr. Chairman, what the President said is true, and this bill provides the opportunity for us to fulfill the need of which the President spoke.

Abundant in human and natural resources, in labor supply, with water potential, and a determined spirit, this area can thrive. As I said at the outset, individuals, communities, counties, and States are ready to move. Federal cooperation and assistance are necessary. This bill provides the opportunity for appropriate and meaningful cooperation and I hope it will be enacted.

Mr. JONES. Thank you, Mr. Mathias.

Our next witness will be our colleague, the Honorable John P. Saylor, of Pennsylvania.

STATEMENT OF HON. JOHN P. SAYLOR, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA

Mr. SAYLOR. Mr. Chairman and members of the Special Subcommittee on Appalachian Development, I appreciate this opportunity to discuss with you legislation to provide public works and economic development programs and the planning and coordination needed to assist in the development of the Appalachian region. My interest in this legislation is based upon several factors—not the least important of which is the fact that the three counties I have the privilege of representing in the Congress are included in the definition of the Appalachian region. However, I am also interested in this legislation because of a sincere belief that we, as a nation, can be only so strong economically as our weakest part.

I do not think it is necessary to reiterate the dismal statistics indicating the unfortunate economic conditions in Appalachia for these data have been repeatedly spread upon the record of public hearings before distinguished committees of both bodies and upon the public conscience by national communications media.

Mr. Chairman, I have introduced H.R. 146-an Appalachian regional development bill. Primarily, my bill is identical with the bill which was reported favorably by the House Public Works Committee last year. Therefore, it does not include the various changes from last year's bill which were included in H.R. 4 this year.

I do not have any objection to the various changes contained in H.R. 4. There is one significant difference between my bill and H.R. 4 which I would strongly urge the committee to incorporate in any bill favorably reported. This change is found in the provision for an Appalachian development highway system contained in section 201. Section 201 (f) of my bill provides for a maximum of Federal assistance up to 80 percent of highway construction costs as compared with a maximum of 70 percent in H.R. 4. This proposed increase of 10

percent in the Federal contribution could have a significant, beneficial effect on developing an Appalachian highway system in the area which we all admit is suffering from severe economic distress. As an indication of the hardship which the 30 percent State contribution under H.R. 4 would place on States in the region, may I call your attention to a statement made by Gov. Hulett Smith, of West Virginia, before the Appalachian Subcommittee of the Senate Committee on Public Works January 21, 1965.

The Governor said:

I must say in frankness that even 30 percent of the cost will be difficult to provide in a State such as West Virginia, which lies entirely within the Appalachian Range and has a limited capital base from which to draw revenues for highways. However, we are determined to do our best.

The good folks of West Virginia may be determined to do their best to meet the 30-percent State contribution to highway construction, but it seems to me if the Congress sincerely wishes to provide real help, the State contribution should be reduced to 20 percent.

There may be some areas of the Appalachian region that would be better able to make a large contribution to highway construction. Establishing the 80-percent maximum on Federal contribution would permit some areas to carry a larger share of the program if they were financially capable. Mr. John Sweeney, chairman of the Federal Development Planning Committee for Appalachia, told the Senate Public Works Committee that he thought all the highway program would be built on the 70-30 basis. This is not required by the act but rather it is permissive. For this reason, I feel it would be more beneficial to increase the ratio from 70-30 to 80-20 and require some areas to come into the program at less than the maximum Federal participation. I think this section could still be carried out within the $840 million authorization for appropriation even with the increase in maximum Federal participation in some States.

Mr. Chairman, despite my general approval of this legislation, my reading of the Senate committee report on S. 3 (S. Rept. 13) has caaused me a little bit of concern as to whether we are inadvertently including some new guidelines for water resource development. The Senate committee report states on page 16:

The committee also understand from testimony that, in conducting the water resources survey, the Corps of Engineers will not delay authorized study programs or the reporting of existing studies which contain favorable recommendations. Further, the committee understands that this section will enable the Corps of Engineers to review areas where in the past it had not been able to recommend development work under existing criteria, and the committee understands that revised reports will be made on projects which might qualify under criteria developed from this act.

I would suggest that any witnesses from the Corps of Engineers to appear before this subcommittee on H.R. 4 be questioned in deptl as to what sort of development work which the corps has been unable to recommend underexisting criteria that might now be possible under criteria contained in this act.

Mr. Chairman, again I would like to express my appreciation for this opportunity to present my views today and repeat my sincere urging that the committee favorably consider my suggestion to in

crease Federal participation on the highway program to a maximum of 80 percent.

Mr. JONES. Thank you, Mr. Saylor.

Our next witness is our colleague, the Honorable John Watts.

STATEMENT OF HON. JOHN WATTS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF KENTUCKY

Mr. WATTS. Mr. Chairman, I appreciate this opportunity to appear before this committee and testify in behalf of H.R. 4, the Appalachian Regional Development Act of 1965, legislation to provide public works and economic development programs, and the planning and coordination needed to assist in the development of the Appalachian region.

Bounded by mountains which appear strong, but keep it chained in weakness, Appalachia stretches from the depleted red clay of northern Alabama, across eastern Kentucky, to the barren coalfields of Pennsylvania. Despite the fact that federally aided welfare payments in the area total $41 million a month, the region and its 15 million inhabitants remain impoverished, enervated, and without hope.

Unfortunately, this Federal assistance is merely a holding operation treating only the outward symptoms and helping sustain conditions as they are, rather than curing the disease. The enactment of H.R. 4 would initiate an attack on the causes of the disease, as should be done.

Tragically Appalachia lags far behind the rest of our Nation in employment, education, and housing. In Appalachia one family in three lives on $3,000 a year or less, compared to one in five for the rest of the Nation. And in Kentucky our people in Appalachia have the lowest median income of any of the 11 affected States-$2,302.

In this impoverished section of Kentucky the unemployment rate is high. In 1962, it was 8.4 percent compared to 4.1 percent for the rest of the State. Over a fourth-28 percent-of Kentucky's population resides in this needy area.

The late President Kennedy was shocked and disturbed by the human misery he saw when he toured Appalachia. Now President Johnson has declared an all-out war on poverty so these long-neglected human beings may be restored to a decent, respectable place in society and share our Nation's economic wealth as is only equitable. In order to achieve this goal, a well organized and planned campaign on all fronts must be mapped. No war was ever won piecemeal fashion. And the war in Appalachia is no different.

The bill before this committee represents a concerted war against poverty. The proposed plan to develop highways and access roads into Appalachia is essential. It will open up areas and create developmental potential where commerce and communication have been impossible in the past because the areas were inaccessible.

In addition to benefiting the residents and contributing to the industrial potential, a good road system will provide recreational potential and attract tourists to the area. An adequate network of roads will also contribute to developing a consolidated school system.

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Programs, as provided for in H.R. 4, to use more fully the region's great natural resources of coal, timber, and arable land, will help bring prosperity to this region. Today the hardwood forests of Appalachia are producing at only a mere fraction of their true capacity.

The construction of facilities to utilize and to control the abundant rainfall of Appalachia will enhance the future of this region. The establishment of an upstream program will reduce floodwater, sediment, and erosion damage on the flood plain where most of the region's investment is concentrated.

It will provide a municipal and industrial water supply and also water quality control. Today 77 percent of the population in Appalachia has either no public water supply or has one that does not meet health standards. The construction of sewerage treatment facilities will prevent the pollution of the region's streams and protect the health and welfare of the people.

The enactment of those provisions of H.R. 4 which provide for the full restoration of the greatest of all natural resources-the human beings who live in this area-is essential. Of extreme importance is the proposed vocational education program. Only through increased education will the potential of the people be developed, making them truly independent and self-sufficient and full members of society. The improved health facilities proposed will contribute to the basic physical health and welfare needs of these people who have just barely existed for so long on a meager diet.

I believe that one of the most compelling reasons many people are rallying to support this legislation is the fact that private enterprise will be the ultimate employer in Appalachia.

We in Kentucky believe, as Under Secretary of Commerce Franklin D. Roosevelt, Jr., has stated, the Appalachian blueprint provides "a plan to create an economic base on which private enterprise can build."

Due to the intertwined complexities of Appalachia, the Federal Government must act on many fronts to rehabilitate the area initially, but only if private industry is the ultimate employer will the economic future of the region be secure. The programs as proposed in H.R. 4 would stimulate and improve Appalachia to a level where private industry would be encouraged to establish new plants.

Of the counties specifically listed in the legislation comprising Appalachia, six are within the Sixth District of Kentucky which I have the honor of representing in the Congress. I am intimately familiar with the needs of these counties, and I believe they reflect the general need of the entire Appalachian region.

I feel that the enactment of H.R. 4 would give this area, neglected for so long, an opportunity to reenter society and share equally in the great bounty of our prosperous Nation.

Mr. Chairman, I should like to point out at this time, I believe that with the enactment and fulfillment of H.R. 4, designed to rehabilitate Appalachia, we may also acquire information helpful in solving a growing nationwide problem. Appalachia may well be the first step by a government-through rehabilitating displaced workers and guiding them to useful lives in another endeavor-a first step to preserve the Nation itself from internal revolution and decay, due to automation producing more and more goods but requiring less and less workers.