SMALL BUSINESS IN SMALLER CITIES AND TOWNS

THURSDAY, JUNE 8, 1967

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON URBAN AREAS OF THE

SELECT COMMITTEE ON SMALL BUSINESS

Atchison, Kans.

The subcommittee met, pursuant to notice, at 10:15 a.m., at FlemingJackson-Seever Legion Hall, Hon. John C. Kluczynski, chairman of the subcommittee, presiding.

Present: Representatives Kluczynski, Horton, and Burton.

Also present: Representative Mize, a Member of Congress from the State of Kansas; Gregg Potvin, subcommittee counsel; and John J. Williams, minority counsel.

Mr. KLUCZYNSKI. The hearing will come to order.

I am Congressman Kluczynski, of the State of Illinois, chairman of the Subcommittee on Urban Areas of the Small Business Committee and with me is my good friend, Congressman Horton, from the State of New York. We also have with us Congressman Laurence Burton, of the State of Utah. This is my first trip to Utah. We are here at the request of your great Congressman, Chester L. Mize. I have known him from the first day he got in Congress. I like him, and that's the reason we are here.

At this time I will ask counsel to mention the names of those present from the Federal agencies.

Mr. POTVIN. Mr. Chairman, may the record also show as present Mr. Richard Fernstrom from the Rural Community Development Service. He is here at the express request and direction of Secretary Freeman of the U.S. Department of Agriculture. Also present from the Department of Agriculture is Mr. W. R. Brady, County Supervisor for Farmers Home Administration for Atchison and Doniphan Counties. Either present or arriving is Mr. F. Jackson George, of Topeka, the State Director of Farmers Home Administration.

Also present will be Mr. Gerald Terry, Chief Economist, Department of Housing and Urban Development, from the Fort Worth HUD Office, who is here at your request and at the direction of Secretary Weaver.

Our reporter for the proceedings today is Mr. Dennis J. Jaeger, of Kansas City, Mo.

Mr. KLUCZYNSKI. Thank you, Mr. Potvin.

The subcommittee continues today a series of hearings on Small Town, U.S.A. We shall attempt to determine what is happening to our smaller cities and towns and what is being done to determine whether the future holds progress or stagnation for them.

We shall focus upon the role of small business in the areas which we study, both in terms of problems being encountered by these smaller firms and the role which they are playing in sustaining or rebuilding their local economy.

During the 89th Congress, the subcommittee made a comprehensive study of the problems of small business in our urban centers. Many of these problems arose from the rapid growth in population which our metropolitan areas are currently undergoing.

It is our feeling that if ways can be found to expand the economies of Small Town, U.S.A., and thereby prevent the outmigration to larger cities, we shall be killing the proverbial two birds with a single stone. Not only will the economies of the smaller towns be enhanced but the problems of the population centers will also be reduced. Indeed, it could be said that these hearings on small towns are an examination of the converse of our former hearings in the Nation's larger cities.

It is a real pleasure to be here in Atchison today. Although this is my first visit to your community, I have been aware for several years of the outstanding job the people of Atchison have done in rebuilding their community. On June 7, 1965, the then Commissioner of Urban Renewal, the Honorable William L. Slayton, appearing before this subcommittee, stated, and I quote:

Quite recently I had an opportunity to visit a city which is doing a superb job of creating an effective environment for its small businesses. While no one project can be considered typical of urban renewal projects as a whole, it does show what can be done.

Further quoting from Mr. Slayton :

Atchison, Kans., is a 111-year-old city of 15,000 on the Missouri River whose already decayed downtown was severely flooded a few years ago. Using its own resources and those of State and Federal agencies, Atchison has built a new, revitalized downtown that is a model for smaller cities.

It is my pleasure to be here with the members of the subcommittee and your outstanding Congressman. I have known many of your Congressmen because I have been in Congress a long time. I remember Al Cole when he was on the Banking and Currency Committee with me. He was defeated, I believe, in 1952 by a gentleman by the name of Smith. Then, of course, Bill Avery came in. Bill Avery was my neighbor in the Old Cannon Building in Washington, a great guy who resigned from Congress and became Governor. During the flood, in Topeka, Kans., in 1951, I was one of the members who came here. I have never seen anything like it in all my life and I have traveled all over the country. There were 16 feet of water for several days. I still can visualize those floods back in 1951. He was one of the leading members of the Public Works Committee, and I was happy to come out here and do everything possible to prevent further floods.

It is my pleasure to be here with the members of the subcommittee and your outstanding Congressman to see at first hand the outstanding job you people have done. Of course, if it weren't for Congressman Mize, we wouldn't be here. You'd be surprised how many cities and how many States would like to have a congressional committee come out. We are not an investigating committee. We are here to listen to your problems, and that we will do. If we can help you,

I assure you, as your good Congressman Mize will assure you, that things will be done to help you.

It is a matter of some pride that I note one of our Federal agencies, the Small Business Administration, has been deeply involved in the great job you have done.

With me here today, in addition to your distinguished Congressman, as mentioned before, is my good friend from Rochester, N.Y., Congressman Frank J. Horton. I was in his great city, and he was in my great city in Chicago, and he has never missed any of our hearings.

I am happy to have you with us again, Frank.

Mr. HORTON. It is good to be here, John.

Mr. KLUCZYNSKI. And also we have a great man from the State of Utah. I have never been in Utah in my life but I am going to be there tomorrow with my good friend, Congressman Laurence J.

Burton.

At this time the chairman will recognize that great man from the State of New York, Mr. Horton.

Mr. HORTON. Mr. Chairman, members of the subcommittee, and my good friend Chet Mize, gentlemen from Atchison and those who are here to testify, first of all, I want you to know that we consider this a great privilege and an opportunity to hear from you people the story of Atchison, Kans. We have heard about this story; we have read about it. This subcommittee, as the chairman pointed out, held hearings in the 89th Congress in Chicago, New York City, Rochester, N.Y., and Atlanta, and I think as a result of those hearings made some landmark movements ahead insofar as the problems of the small businessmen in the urban area were concerned. This year in the 90th Congress we are starting hearings to determine the problems of the small businessman in the rural and smaller communities across America. I'm sure, as a result of these hearings, that this story is going to be told. It is going to be helpful to other communities throughout this Nation to hear what has happened here in Atchison, Kans.

I want you to know also that these are busy times in Washington. We have had a very serious crisis just this week in the Middle East, and the crisis isn't over yet. This committee feels, however, that this matter is so important that we came here to hold these hearings today to hear this story in connection with this very serious problem that affects all of America, in spite of the fact that the House is in session today in these crucial times.

I also want to pay tribute to my very good friend, Chet Mize, who represents you folks in the Congress. I have known Chet since he first came to the Congress. Like the chairman I knew Bill Avery before Chet. I can tell you firsthand that you have a very outstanding young man representing you in Washington. As the chairman said, and he doesn't say this idly, the reason we are here today is because your Congressman has asked us to come here and has told us about this story. We feel it will make a very important contribution to the problem that we are very much concerned about.

I also want to emphasize to those of you who will be testifying today that the story that you tell here, the things that we see here, will be placed in the record of these hearings, and that record will be

made available to people throughout the United States. As a matter of fact, following the hearings in Rochester I sent five or six hundred copies of the hearings to people in that area. Then others went out all over the country and people read about the story of Chicago and New York and the problems that they had there, and they read of Rochester and Atlanta. It was a very important contribution to the solution of some of these problems of the small businessman in the urban area.

I want to emphasize how important your testimony is here today, not only to us as members of this subcommittee, but also to the committee on which we serve, the Select Committee on Small Business, and to the Congress. As a result of these hearings the story that you will be telling here today will be broadcast throughout the Congress, will be helpful in connection with future legislation, and will solve some of these problems of the small businessman.

In conclusion, I would like to say that we are very happy to be here. I understand this is the first time that you have ever had a committee of Congress here in Atchison, Kans. I just want you to know that we are very proud to participate in this event. I do want to add also again how much we appreciate your taking the time to come before us and to thank you again for sending us Chet Mize to serve in the Congress.

Thank you, Mr. Chairman.

Mr. KLUCZYNSKI. Thank you, Mr. Horton.

Gentlemen, as you know, this is one of the few committees in Congress that's neither Democratic nor Republican. We are all good Americans, and we are trying to help the small businessman who has had his problems he is the fellow who is drowning. That's our purpose in traveling all over the country. I have been a small businessman for a long, long time, and I know the problems that you have, and I am here to listen to them. I don't care how long we stay, as long as we can get out of here later on and go to Utah. It is unusual for a member of the minority to preside over any committee in the House or the Senate when the majority wasn't present, as happened last week, I turned the chair over to a Republican. Here he is. Let me introduce to you a first-termer on the committee who has been on the Hill for a long time and who knows what it is all about. I really like to have him on this committee because he never misses a hearing, and, as you know, it is not easy being a Congressman. The chairman has to ask you, or beg you, to make the meetings. This fellow makes them all. Let me introduce to you the gentleman from Utah, Mr. Burton. Mr. BURTON. Thank you, Mr. Chairman. I'd just like to add my sentiments to those of yours and Mr. Horton's, how pleased we are to be here in Atchison, Kans., today.

Kansas is rather my second home, Mr. Chairman. I spent nearly a year here, not in Atchison, but in Hutchinson during the Second World War when I was in the Navy Air Corps. It seems passing fair that a Navy man would be stationed for nearly a year in Hutchinson, Kans., but I was undergoing flight training there. I was impressed, as I am today, with the hospitality and the friendliness of the people. I think it is interesting, too, Mr. Chairman, that the first field hearings that have been held by this Select Committee on Small Business are being held in the district, first of all, of a Republican; second

of all, of a man who is not a member of the committee. I think that contributes, too, to the general estimation that we all have for your Congressman. I want to say that our host this morning was, as I understand it, Mr. Chairman, a good Democrat, Jay Dyer, and he has been most gracious. I hope that fortune never puts Mr. Dyer and Mr. Mize in the same race, because you'd have two exceptional candidates.

It is a pleasure to be here, Chet, and to meet your people. We are here to listen, to learn and to look, and I'm sure that it is going to be a profitable morning for us as well as for your own people.

Thank you, Mr. Chairman.

Mr. KLUCZYNSKI. I am going to tell them when I get back to Chicago that when we arrived in Kansas City a crepehanger picked me up. He had a big automobile; he says I had a big seat. He is a great guy, and he said a lot of fine words for your Congressman Mize.

Now, you have heard so much about your Congressman from us, and this is, believe me, right from the heart. We love him. I know you do too, and are proud of him. So at this time let me introduce the fellow we are talking about, Congressman Mize, who will introduce the first witness.

Mr. MIZE. Thank you, Congressman Kluczynski.

It is a real pleasure, of course, for me to welcome my three friends and colleagues from the Congress to my own hometown.

You know, many newspapermen and columnists take swings at Members of Congress about so-called junkets. Well, now, this is a junket. We were on the floor of the House late last evening, then raced to Baltimore to catch an airplane to fly in to Kansas City. We arrived late last night. These gentlemen are here today and, as Mr. Kluczynski has said, they are on their way to Ogden, Utah, tomorrow. Mr. Kluczynski has to be back in his Chicago office on Saturday. The other two gentlemen also have to return to their own congressional districts for appointments they have this weekend. So, anybody who thinks that Members of Congress taking these junkets are subject to criticism, in my modest opinion, are dead wrong. They are hard workers, and they are here because they want to hear firsthand from people out in the field, citizens, their constituents, my constituents, what problems they have in connection with urban renewal, small business, and so forth, so that they might be able to introduce perfecting legislation to laws already on the books.

Gentlemen, I again want to personally thank you from the bottom of my heart for taking time out from your very busy schedules to come to my hometown and listen to the problems of my folks.

The first speaker is going to be my very good friend and neighbor, the mayor of Atchison, Hazen T. Shaeffer.

Hazen, do you want to come up, please.

TESTIMONY OF HON. HAZEN T. SHAEFFER, MAYOR,

ATCHISON, KANS.

Mr. SHAEFFER. Honorable Chairman, Mr. Kluczynski, and your colleagues in the U.S. Congress, Hon. Chester L. Mize, Hon. Frank Horton, Hon. Laurence J. Burton, other distinguished guests and friends all, on behalf of the city of Atchison I wish to extend to you a most hearty welcome. It is a great pleasure to have you with us