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of Appalachia, were eliminated entirely, then the giant operators would rapidly fill the market themselves, replace the 100 million tons per year produced by the small operators and the UMW welfare fund would benefit by some $40 million per year. Although there is already being paid into the union welfare fund approximately $125 million a year, and the fund covers only 60,000 men, none of these men have a vested right in 1 cent of the UMW pension fund. If they are laid off work and go to work for one of the small independent mines then they forfeit all rights in any pension that they might have become entitled to at a later date. Many men have forfeited these rights because they would rather work than stay on relief and wait for their pension. Their industry and initiative deserve the encouragement of the Congress.

The UMW is aware that any provision in the Appalachian bill to encourage coal production would redound to the benefit of the small operators, so help for coal in the pending bill has become a political issue. I respectfully ask the committee to consider the merits of what can really be done to help employment in Appalachia and I ask it to pass a bill which contains the proposed amendment attached to my statement which, essentially, adapts the timber development provisions to coal development. I would further request that the bill be amended at lines 24 and 25 of page 33 to permit the financing of industrial plants, and the purchase of machinery if such financing and purchasing is done through a nonprofit agency.

Senator RANDOLPH. Senator Cooper, I think you would want to comment first, you are interested in this particular type of matter.

Senator COOPER. Mr. Chairman, a few days ago when Mr. Sweeney testified before the administration on this bill, I directed to him some of the questions that have been raised today by Mr. Holcomb. I would not agree with that part of your statement, when you said:

You can have highways and byways in and out of Appalachia, but the area will not change until the standard of living rises and the only way to cause the present standards to rise is to provide employment. Coal is the key to employment.

I think we know that eastern Kentucky and perhaps other parts of Appalachia have had chiefly a one-product economy depending on coal. But we hope that one of the consequences of this bill will be that roads are constructed and airports are built, and that, when there is greater flood protection and development of the water resources, it will be possible to build a more viable economy in this area to provide larger employment and induce local investment, as well as attract outside investments.

Mr. HOLCOMB. Senator Cooper, I would like to make it plain that we do support highways and we do support the positions of this bill and are very much in favor of it, but we think it is derelict in its duties when coal is left out of it.

Senator COOPER. As I said to Mr. Sweeney the other day, I have felt for a long time, although I support the bill strongly, that there is a tendency in the administration to leave the policy of direct development assistance to eastern Kentucky and perhaps the other regions to existing programs, while establishing a better overall framework in this bill. I have supported all of these programs such as the Area Redevelopment Act, the Economic Opportunity Act, and

now the Appalachian Development Act, with the purpose of creating more opportunities for employment in this area, and providing better living standards and better opportunities.

On the other hand, for the people who want to work and live there, as Senator Randolph knows, there are other policies of the Government which have struck at coal, which is the chief industry in the area, and I think will continue to be, at least for many, many years.

I won't go over all of them, such as the policy on residual oil. I am not here to argue whether residual oil should or should not be imported, but in recent years their quotas have been steadily increased, not simply to give residual oil the opportunity to capture its part in the new markets but to give it the whole market.

I know also that by reason of the facts you have stated, there is a growing concentration of the coal industry in a few large companies with the funds and capacities to buy at least large acreages of coal land, to install this tremendously expensive labor-saving equipment, and thereby, because they can produce greater tonnages of coal, to secure the railroad spurs which will enable them to load full trainloads of coal. As you say, that will result in lower freight rates for the large companies, reducing the competitive opportunities of smaller companies.

As I said before, if this continues to happen, then you will have a few companies located in a few areas of this region. The result will be the destruction of the smaller companies which now produce over half the coal and are located throughout the area, and which sustain not only the operators but the thousands of employees and their families, the local communities, the merchants, the bankers, and provide a major tax base. The communities and the companies will be seriously threatened, if not destroyed.

Now I have thought if there could be some provision which would enable the smaller operator to join together and get assistance to build these expensive types of machinery, such as coal cleaning equipment, and to secure then the railroad spurs which would enable you to load full trainloads of coal and thereby enjoy a lower freight rate, it would in fact preserve the existing economy in many, many of these counties.

I don't think the administration or the Congress have given thought to this proposal, and I believe great weight ought to be given to your suggestions and presentation.

You

This is no new position. I have argued it for many years. have said you cannot get consideration for these proposals in the executive branch and have gotten very little in the Congress. The United Mine Workers is a great union, it has done a great deal for its employees and should be treated fairly, but this subject is a matter of collective bargaining.

If they cannot persuade these other miners to join their unions, it is a matter of collective bargaining, and the smaller coal companies ought not to be penalized because of this fact. I think it is very hard for people who do not know anything about the coal industry to visualize what you have been talking about and the situation we in the area have known for so many years.

We can look at the area and see that the inevitable result of all of the present policies would be to establish great coal companies here

and there at a few places throughout the area, and so destroy the small coal mines located generally throughout the area. If that happens in the next few years, the whole region will be in a very much worse condition.

Mr. HOLCOMB. One thing I would like to point out in advocating this amendment to this bill is the fact that in Pike County, Ky., in the last 5 years we have created approximately 3,500 new jobs in small mines. Now the concept of unit train transportation has come along. Not only the 3,500 new jobs-there were approximately that many there are in jeopardy because these small mines do not have the facilities to participate in unit train shipments, and they are in danger of obliteration.

One of the things we had hoped to accomplish would be to start through this amendment to this bill on a small mine coal cooperative basis to the establishment of coal cooperatives so that not only the existing people who are employed but more people could be given work.

We feel strongly if we can get these cooperatives into operation that in the next 4 or 5 years the employment in small mines throughout the Appalachian area will be doubled or tripled because coal production in the Nation as a whole is going to go up, and that is the one big reason that we would like to see this amendment added.

Senator COOPER. I will ask you this question.

Can you tell the committee how many of the total miners employed in eastern Kentucky are employed in the type of mine you represent? What percentage of the coal production is produced by these mines?

Mr. HOLCOMB. At the present time approximately 71 percent of the production which is produced in these small mines, and they have about 90 percent of the total labor force.

Senator COOPER. Do you know how many men are employed?

Mr. HOLCOMB. Throughout the small mines are concentrated chiefly in eastern Kentucky, and there are some 23,000 men employed in them at the present time.

Senator COOPER. What is your record for safety?

Mr. HOLCOMB. We set a new safety record in 1962 and another one in 1963, another one in 1964.

Senator COOPER. Does it compare with the record of safety in the large mines?

Mr. HOLCOMB. Our record is better.

Senator COOPER. What is it?

Mr. HOLCOMB. Title 1 and title 2. Our record is much better than the record in title 2 mines.

Senator COOPER. I am sure that will be argued forever.

Mr. HOLCOMB. I imagine it will be.

Senator RANDOLPH. We thank you very much for your testimony, Mr. Holcomb.

Senator Cooper, you have brought out for the committee the socalled small mine operations in Kentucky and other areas of the Appalachian region are very important in the production of this product. It is not a small industry, it is a big industry, but it is made up of small units, just a few men working in the mine; is that correct? Mr. HOLCOMB. Yes.

Senator RANDOLPH. Thank you very much for your helpful testimony. Your recommendations will be considered in the executive session of the committee, I assure you of that, sir.

The hearings on Senate 3 are now concluded.

We will receive additional statements from our colleagues in the Senate and the House of Representatives. These, and statements from other interested persons, will be received until 4 o'clock tomorrow afternoon.

We also have a letter and statement which will be included in the record from Governor Tawes of Maryland, a telegram from Governor Rhodes of Ohio, a statement from Governor Harrison of Virginia, and two statements from Senator Nelson of Wisconsin.

Senator COOPER. Mr. Chairman, might I ask that there be included in the record this report by the Improvement Association of Jackson County called Natural and Human Resources. I think it is quite representative of the situation in these counties and also reflects the local interest of the counties.

Senator RANDOLPH. Yes, that material will be included, Senator Cooper.

(The statements and material referred to follow :)

ANNAPOLIS, MD.,

January 22, 1965.

DEAR SENATOR RANDOLPH: Inasmuch as I have already testified on the Appalachian Regional Development Act, I will not take up the time of your committee by appearing in person, but am forwarding my views in the enclosed statement. As you know, we in Maryland have waited a long time to see the ideas embodied in this legislation become a reality, and have ever been in the forefront of those who have urged its passage. It will mean new life and new hope for those of our citizens living in the western part of our State.

The State of Maryland is already well advanced with its plans to implement this legislation as soon as it becomes law. For the past several years the Maryland Department of Economic Development has been working with the economic development agencies of our three western counties in perfecting the procedures that will enable us to make the best possible use of this new legislation.

The promise of this much-needed aid has been dangled before our people for over 4 years. Now is the time, not for words, but for action. I urge the passage of this bill with all the forcefulness at my command.

Sincerely yours,

J. MILLARD TAWES, Governor.

STATEMENT BY J. MILLARD TAWES, GOVERNOR OF MARYLAND

Mr. chairman and members of the committee, this is a day I have looked forward to for 4 years 4 years ago yesterday, on May 20, 1960, the first conference of Appalachian Governors was held at my invitation in Annapolis, Md.

In my opening address to that conference, I made this statement: "Nothing significant can be accomplished for our distressed counties of western Maryland except as part of a program whose aim would be to rebuild and revitalize the economy of the entire Appalachian region."

Today this committee has such a program before it. It is a program which has been evolved during the past 4 years through continuing effort by the Appalachian Governors conference and the Federal Government. It is a program which has been developed from the bottom up, not from the top down. It is a program based on the recognition by the Governors of 10 States that they shared a common problem which could only be solved by common action.

The conditions in the Appalachian area are familiar to all of you, and I will not take your time to detail them here. At that meeting in Annapolis 4 years ago I said: "It is shameful and intolerable that in this year, 1960, there should be children in the United States who are dying of malnutrition, and entire families who are living on a government subsistence handout which is only 30 percent of minimal nutritional needs. It is intolerable that we should have

whole counties where the yearly family income is less than $400, and where children can't go to school because of lack of clothes and shoes."

These feelings have been echoed many times since then, and I know that they underlie President Johnson's deep and burning desire that something finally be done to eliminate the apalling conditions which are plainly visible to any traveler in Appalachia.

To me one of the most significant features of the present bill-in addition to its being based on a cooperative Federal-State-regional approach-is the fact that it is aimed specifically at the causes, and not merely the symptoms, of the economic distress of the region.

If you will permit, I would like to quote again from the address which I made before the first conference of Appalachian Governors 4 years ago. "We can never," I said at that time, "arrive at a permanent solution to the problems of the Appalachian region until we stop thinking of the mountains as a 'distressed area' and begin to think of them as an underdeveloped region with vast untapped human and natural resources—a region that can only find its rightful economic level through a plan of overall economic development, programed for a period of 5, 10, or even 20 years. This program must not only deal with the basic problem of correcting the growing imbalance between manpower and job opportunities, but should also concentrate on the building of new highways. flood control projects, and * * * increasing educational and vocational training levels throughout the region."

This approach, I am happy to say, is exactly the one to be found in this bill. In that connection, I am especially pleased to note the emphasis which this bill has placed upon highway construction. Here we see an approach to roadbuilding that was first developed by the ancient Romans-the use of roads not simply to serve traffic already there, but to open up a region for economic development and growth.

Isolation has long been the curse of Appalachia. The high mountains running north and south effectively blocked the region from the primarily east-west flow of American economic development. Highway and rail builders usually found it easier to bypass Appalachia than to traverse it. Only a good, modern road network can end this age-old condition.

And this condition must be ended, not only for the good of Appalachia, but for the welfare of the trading areas that lie east and west of the mountains. Our port of Baltimore, for example, would benefit greatly from increased economic activity in Appalachia-activity which would provide products for export from the port and an interior market for goods and supplies coming into the port.

As a Governor of a State which has three counties in the Appalachian region, I can only add my own voice to the call for urgency which has been sounded so clearly by our President.

The people who live in the Appalachian area are no strangers to promises. They have stood on their street corners and outside their homes for many a year in the past and listened to the brave promises of well-meaning candidates for political office.

All too often these promises have turned to ashes, not because they were insincere, but because, once in office, the former candidate found himself powerless, with the limited means at his disposal, to accomplish anything truly meaningful for the people of Appalachia.

No State has the resources to cope with conditions that are as widespread and as economically deep seated as we find in Appalachia. This is why the present program is so desperately needed. This is also why the people of Appalachiafor the first time-have permitted themselves to believe that at last something effective is really about to be done.

I travel frequently in the three Maryland counties in the Appalachian region, and I can assure you that the usual skepticism of the people has been put aside as far as this program is concerned.

They have faith in President Johnson and in this Congress.

As far as this bill is concerned, they have laid aside their normal protective shield of pride and silence. They have exposed themselves and their plight for all to see. It would indeed be a cruel hoax if we let them down now when their hopes are highest. Before closing, I would like to quote once more from my address before the first conference of Appalachian Governors in 1960.

Incidentally, I quote from these remarks not because I am fascinated by my own words, but to make the point very clear that this bill represents something

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