created or will soon be available because of this guidance. Trinity Carpet Co., in Murray, Ga. is one of its success stories. The firm started business in July 1964. Six weeks later the initial investment was gone. A private line of credit remained, and the firm asked and got counseling from the center at Georgia Tech. At the end of the first year, sales totaled $1,250,000. They are climbing toward the $3million mark at this point. Jobs have increased from 15 to 65 and payrolls run $4,500 to $5,000 a year per capita for the employees.

This is just one small example of what can be done by focusing, although not exclusively, on the potential of the smaller firms.

With that, Mr. Chairman, I would be glad for my colleagues and I to try and answer any questions that you may have.

Mr. KLUCZYNSKI. Mr. Davis, I want to thank you for cooperating with the committee. Although your full statement will be part of the record. We appreciate your discussing the high points.

We will have several rollcalls this afternoon, and both Mr. Horton and I have to leave in about 45 minutes. So we will ask you a few questions and hope the bells don't ring for a few minutes.

Mr. DAVIS. Very good, sir.

Mr. KLUCZYNSKI. Mr. Potvin.

Mr. POTVIN. Mr. Chairman, I would like, if I may, to offer for the record two charts that were kindly prepared by EDA for submission for the record. The first of these is a chart showing the distribution of approved EDA projects by local population. The second shows approved EDA business loan projects which will employ 250 or fewer workers. I submit these for the record, Mr. Chairman.

Mr. KLUCZYNSKI. Without objection it is so ordered. (The material referred to follows:)

U.S. DEPARTMENT OF COMMERCE, ECONOMIC DEVELOPMENT ADMINISTRATION Distribution of approved EDA projects by local population 1

1 Population of cities or towns when specific project location can be identified.
2 Represents approximately half of all approved technical assistance projects as of Mar. 10, 1967.
Prepared by Operations Reports Division, Office of Planning Support, Mar. 15, 1967.

Approved EDA business loan projects which will employ 250 or fewer workers as of
Jan. 31, 1967

[Dollar amounts in thousands]

410

630

180

364

560

163

780

1,265

155

1,530

2,500

150

955

1,470

140

Approved EDA business loan projects which will employ 250 or fewer workers as of Jan. 31, 1967-Continued

M. B. Designs, Oakland, Calif.

Berkeley Instruments, Oakland, Calif.
Rainbow Carwash, Inc., Oakland, Calif..

T. K. Valve & Manufacturing Co., Hammond, La. Valve and pipe fittings.

Electronic telemeters..

Sun Plant Products, Inc., Gonvick, Minn..

Crow Industries, Hardin, Mont..

Drake Chemicals, Lock Haven, Pa..
Sunny M. Ranch, Winthrop, Wash.
Bayamon Can Co., Toa Baja, P.R....

Bennies Candy Manufacturing Co., Oakland,
Calif.

Nylon Engineering, Inc., Lowell, Mass.
Polar Missile Ice Cream Co., Turlock, Calif_
Lutsen Ski Corp., Lutsen, Minn

Industrial Rubber Applicators, Hibbing, Minn..
Walco-Lorain, Inc., Okmulgee, Okla.

Mr. KLUCZYNSKI. I am very much impressed with your statement, Mr. Davis. I don't know where you came from, but you are somewhat of a politician like we have in Chicago. You talked about a small town in Tennessee, and then you hit on a big city like Chicago. I happen to come from Chicago, which is quite a coincidence. You are very fortunate to have people like Frank Dooley, Larry Redmond, and Joe Swanner in your liaison office. I have worked with them for years, and they never turn us down when we want some information. They work with both the Public Works Committee and the Small Business Committee, and we are happy to have them attending this hearing today.

Mr. Horton, you have some questions, I imagine.

Mr. HORTON. Mr. Chairman, I have a lot of questions I would like to ask, but we do have a problem on time.

Mr. Davis, I realize that you have not been in this office except for 3 or 4 months, maybe a little longer.

Mr. DAVIS. October 15.

Mr. HORTON. I do appreciate the work that you are doing. I think it is very important. I have had some firsthand experience with the Economic Development Administration in my congressional district. I think all of the problems that can come up in any area have come up in my district.

When I first came to Congress, I contacted the U.S. Labor Department, and found that Wayne County, which is in my district, was classified as an economically distressed area. Therefore we have had there the benefit of some of your agency's programs mentioned in your statement. One of the high points of my experience is the cooperation we received from Mr. Batt when he, as Director of the Area Redevelopment Administration, helped us with the problems of Clyde, N.Y. I won't go into additional detail except to say that it is a good illustration of what the Federal Government can do, acting in partnership with local people interested in trying to save a num

77-669-67-vol. 1-12

ber of jobs that are about to be lost. The community was going to lose a plant, and as a result, it looked like it was going to lose some 450 jobs. By working with the Secretary of Commerce, Mr. Connor, and with Mr. Batt and others, however, we were able to come up with a plan which made it possible for them to find a replacement. This illustrates very well what can be done.

Mr. DAVIS. Mr. Horton, by some coincidence we seem to have included that Clyde, N.Y., episode on page 9 here.

Mr. HORTON. Yes, I noticed that. Our success in our efforts for that community is a high point in my experience.

Now, because I was so thrilled with these programs, I went out and got a lot of these experts to meet with constituents who had not been involved in these programs. We had an all-day session with the EDA people. Mr. Morris, who at that time was in this particular area was there. We also had representatives from HUD, Agriculture, and others who had any information bearing on the program.

As a result everyone was enthused. They developed a plan. I have a copy of it here. Their economic development plan was adopted by the board of supervisors. One chairman of the board didn't move fast enough on it and they got a different one. They wanted to move fast on this program.

Since that time, there has been very little implementation of this, however. They submitted these programs for sewers and water, which programs are very important to their development. For one reason or another, however, they have been turned down. I am very much concerned about this aspect of the program; namely, that the people get all excited about this; they spend money on the development programs, hire technicians, experts, and engineers, come in with these programs and then, as one of the letters says that I have here, "We do a lot of paper work but we don't get that piece of paper that says the program is approved."

Now, I realize you have limitations, but I think that I should point out that when you do tackle one of these projects, it is important to follow it all the way to a successful conclusion. I am somewhat concerned that the program, at least up to last October, had not been given this additional followthrough which is so very important.

Mr. DAVIS. Mr. Horton, I could not agree with you more. I don't know how much time you want to take on describing some of the problems from our point of view, but I would make two comments.

First, I would hope that in many of the communities where we are able to work, that this organizing and planning activity is the useful and effective solution to the problems of the community, regardless of whether they get anything in the way of public works from EDA, and that is why I said earlier that the trick to accomplish this is to utilize the total resources. I am talking about all the other agencies, in a rational and effective way, with a good sense of priorities, and in a way that gives you a high return on these expenditures, I also think, and perhaps I am a little biased in this, that those States that are organized, for example, into districts, in places where EDA is not authorized to work under its act because their problems are not that great, are nevertheless on the right track, that this is the way to promote economic development for their district.

Now, second, and I will try not to be too long on this, when I came in in October, I was faced with an extremely difficult if not impossible situation. It came down to this: that I had about $1,200 million worth of applications, many of them very good, in an absolute sense, and about $200 million to $300 million budget. So we had to set up some kind of priorities.

Now, heretofore, for reasons I will not go into, the program has operated in a reactive sort of way. We have our separate applications from all over the country from eligible areas.

For instance, in 1966, we had 1,148 eligible areas, and when we finally got all finished we had approved projects in only 336 of them. Then when we started in 1967, it was a totally new ball game, all new applications, and we were sprinkling it around again.

Now, I think this is the wrong way to do this.

I think, given your resources, you have to start someplace, hopefully with a good sense of priorities, and stay with that place, just as you described. Now, we have as a rule of thumb, in order to get us into this system of operation, decided that we would try and start in the places where the hardship is the worst as represented by the statistics, you know, 10-percent unemployment, 12-percent unemployment, and see what we could logically do there.

If there is something we can do, I hope then we will stay with that place, not only for this year but for next year, and maybe the following year, until that statistic comes closer to the national average, so that we will get this continuity of effort of which you spoke, and I think you are absolutely right. I don't think you can duck in, do one project and leave again. I think that is the wrong way to run the

program.

Mr. HORTON. I am very much concerned about our enticing these counties and small towns to expend funds, get their people all excited to do something, and then allowing them to end up against a stone wall, not getting anything from the Federal level. This, I think, is a problem that we have to be very much concerned about, and I am

sure you are.

I would like at some time to sit down and go over some of these files. I wanted to ask some questions about these cases. I won't do it here but I would like to discuss these with you.

now,

Mr. DAVIS. I will be very glad to.

Mr. HORTON. The other thing I would like to ask a question about is the so-called multicounty district program that you have, in which you set up an economic development center.

We heard some testimony yesterday from the Secretary of Agriculture, talking along the same line. I am concerned about the fact that these programs are being satellited and in some cases being duplicated. I see no reason for the Department of Agriculture, for the Department of Commerce, and for the Department of Housing and Urban Development to have the same programs. It seems to me that duplication is increasing.

Small towns have been enticed into trying to get some of these programs started. They are really up against the problem of trying to provide for new industries coming in or for new people coming in.