I believe further that we must grasp this chance to shape our destiny-grasp it here and now, without further delay-before the chance for choice eludes us. Thank you very much. Mr. KLUCZYNSKI. Thank you, Mr. Secretary. That was a job well done and done in record time. I am sorry we have to leave here for a few minutes as we have to answer a yea and nay vote on a very important bill. Mr. Secretary, I agree with you that the problems of the big cities, such as my own Chicago, will not be entirely solved until the problems of our small towns are solved. Isn't that right? Secretary FREEMAN. Yes, sir. I think that is right. Mr. KLUCZYNSKI. Chairman Evins, chairman of the Committee on Small Business of the House, had asked this subcommittee, I am happy to chair, to go into our smaller cities and small towns to see what we can do to help small business, to help the man who is in dire need. In the last 2 years we made the big cities of this country and now I am happy to say we are going to see how the people live in small cities and small towns. I was born and raised in Chicago and I know how they live in the big cities. Mr. Secretary, we are happy to have you as one of the members of the Cabinet. You know my votes for the farmers-I don't have a farmer in my district-in all these years whatever the farmer wanted, the city slicker, Mr. Kluczynski, has always been in their corner. Now, the chairman of the full committee, Mr. Evins. Mr. ÉVINS. Mr. Chairman, I appreciate your inviting me to come to your hearings and I appreciate the opportunity to hear Secretary Freeman. It has been a very wholesome report and I liked his statement about the rural-urban balance. We do have our problems in the cities-large and small. I have been reading the Secretary's speeches and I have been following his press announcements with great interest-and I have been saying that he has been preaching this gospel across the country of the importance of developing rural America and smalltown America. We have many programs, as you have indicated, and we are certainly going to review your statement and assessment of what can be done. The Department of Agriculture does a great work. It has many great programs. And I think that you may have thrown out a key suggestion here that we have not heard before-a tax incentive to industry to locate in small towns and rural America. We are all for our cities but some of their problems are becoming almost unmanageable, and as you have said and others have said, unless we solve the problem in small towns and rural America, our problems in the metropolitan areas are going to multiply. Your loan programs, your assistance programs and your guidance in agriculture are being most helpful to rural America-and this new suggestion of a tax incentive for industry to locate in rural and smalltown areas may well be a significant concept that may result in additional incentive for economic development and progress. We are going to review your recommendation, Mr. Secretary, and we appreciate your testimony immensely. Secretary FREEMAN. Thank you, Mr. Chairman. Mr. KLUCZYNSKI. Mr. Secretary, your statement made it a lot easier for us as members of this committee. Will you stay here with us about 15 to 20 minutes? We would like to ask you some questions. Secretary FREEMAN. Yes; certainly. Mr. KLUCZYNSKI. I recognize Mr. Horton. Mr. HORTON. Mr. Chairman, I have some questions, but I want to answer the rollcall. Mr. KLUCZYNSKI. Mr. Burton? Mr. BURTON. I would like to answer the rollcall, Mr. Chairman. Mr. KLUCZYNSKI. I don't want you to miss the rollcall, but I still don't want you to miss asking the Secretary some questions. Mr. HORTON. Can you wait until we get back? Secretary FREEMAN. Well, I just will. Mr. KLUCZYNSKI. All right, let's recess for about 10 minutes. Mr. Smith will be back. Thank you, Mr. Secretary, for being so kind as to stay with us. Mr. BURTON. An excellent statement. (A short recess was taken.) Mr. KLUCZYNSKI. The hearing will be in order. The Chair recognizes the gentleman from New York, Mr. Horton. Mr. HORTON. Thank you, Mr. Chairman. I want to commend the Secretary for his very fine analysis of the problems that confront us with regard to the small businessmen in rural areas. I would like to ask a few questions, Mr. Secretary. In your statement you talked about the policy of expanding planning on a multicounty level. I represent the 36th District of New York and it is an unusual district in that it contains part of the city of Rochester, a part of Monroe County, and Wayne County, a rural county just to the east of Rochester and Monroe County. Wayne County was classified as a distressed area in 1963 and has continued to maintain that status. We have been trying to work with Wayne County and some other counties in trying to set up one of these multicounty programs. So far we have been unsuccessful. The Economic Development Administration is the agency with which we have been working. Would you tell us how the policy that you have explained would dovetail with the program that the Economic Development Administration carries out, and whether this could be coordinated? We are talking about Now, we are talking about three departments. the Agriculture Department, the Housing and Department, and the Commerce Department. overlapping here. Would you comment on that? Secretary FREEMAN. Well, there could be, and I think it is a very timely question. First, in an area which has the designation as you have described it under the EDA, the primary responsibility in that area and the organization of the multiplecounty district area would rest with the Commerce Department. In that instance, we would not move into that area unless it was felt for one reason or another that we should, so we would avoid any conflict. If there were reason that we could be of service consistent with our outreach principle I outlined we would, of course, do so because one of the things I have tried to do and I think increasingly we are succeeding in doing is to make avail able the services of multiple programs we have in the Department of Agriculture in virtually every county in the United States. But the primary responsibility in this instance would rest with the EDA. It would be primarily in areas outside those areas designated distress areas that we would concentrate our efforts and in those areas again how much progress we could make would turn out not only on the effectiveness of the people we would have available but on the desire and the leadership of local people. Mr. HORTON. Now, as I understand your answer, the Economic Development Administration under the Commerce Department would have first crack at it. Their program would take precedence? Secretary FREEMAN. That is correct. Mr. HORTON. In other words, your program would not come into play? Secretary FREEMAN. In those areas so designated, that is correct. In terms of this multicounty planning, economic and total planning approach. This would be the initial responsibility of the EDA in the areas so designated. Mr. HORTON. If the area were not designated as an economically distressed area, would your program come into effect, would the Commerce Department program come into effect, or would it be some joint effort among the three departments? Secretary FREEMAN. The Commerce Department would not come into that area. In that area, the legislation now pending would come into effect, and if an area with local leadership that met the general requirements of a viable and optimal unit were organized with and through leadership of the local people, in this instance the duly elected local people, such an area would be designated under the proposed legislation and it would be brought to the attention of the Housing and Urban Development under the section 701, amended, planning provision and the resources for matching funds for planning purposes would then come from HUD working in cooperation with Agricul ture. Mr. HORTON. One of the problems I found in working with the people in my district, and I am sure this is true of other districts, is that they are not aware of these various programs. I arranged for a meeting with various Federal officials on our district's problems. I think there were eight or nine Federal officials from different agencies at the meeting. They were very fine and gave us their full cooperation. These officials from the Department of Housing and Urban Development, from the Commerce Department, and from the Agriculture Department came together, at my request, with officials from the local governments and from the towns of the area. One of the things that impressed me most was that there were many of these programs which these local officials just did not comprehend. It was overwhelming to have so many programs. I am concerned about duplication and about our overwhelming people with these programs. How do you coordinate the programs that you have been explaining with these other programs so that officials in the particular county that is concerned get information from one source rather than many? Secretary FREEMAN. Well, you put your finger, Mr. Horton on a problem and a question that is very pertinent and it concerns us all, 77-669-67-vol. 1-7 and let me try to answer it in this way by saying I think we will have to approach it from two different directions. I am personally persuaded that only when we have effective local organization and effective planning which sorts out the kind of direction a community wishes to move in and develops a plan with some sophistication and know-how, and then goes out for the program that fits the objective, that we are going to avoid some of the overlapping and some of the complications which you describe. One of the reasons I feel very strongly that we need to begin with a soundly based, supported, and understood plan, and I think that is going to require some professional planning to do an effective job. That is going to require some resources and if that is done, I think we won't have nearly the kind of confusion there tends to be today. On the other hand, we also must do everything that we can from a Washington level, and we are, to prevent overlapping in any kind of competition between programs which results in confusion. Now, for example, we spoke about the water and sewer program in my testimony. Now, there is a water and sewer program also in the Housing and Urban Development and there are Mr. HORTON. There is also one under the Commerce Department. Secretary FREEMAN. And there is also one under Commerce. So in this instance, what we have done is we have sat down together and worked out the various areas in which program availability would be made and in this instance, if it is a community of 5,500 or less it is the Department of Agriculture. If it is larger than that it would be in Housing and Urban Development. Now, there are some exceptions because of the laws that came from different places and we try to understand those refinments so that if it is possible, that in an area of even 5,500 or less, for one reason or another, perhaps we might be out of money and HUD might not, we could coordinate and work together and we are trying in a very careful manner to thresh some of this out and as you know to get together on these different programs and have them set down in a fashion that will be understandable for potential applicants. But I personally think that many instances of the frustration and confusion is because programs are applied for, applications are made out in instances where it probably is not sound in many cases to have that program at all. Mr. HORTON. Part of the problem, coming back to my own area, is that they usually get underway quickly with a planning program. They first have to hire experts. I have here with me the initial overall economic development program in Wayne County, N.Y., and they spent money to hire planners to do this. This is the initial step that they had to take. Then, they had to make these applications. This involves the question of where to make application. Normally, they make applications to all three agencies. This is part of the problem, I feel. I voted for and supported the Demonstration Cities Act. I have talked with Secretary Weaver on many occasions about the confusion as to where and how to apply for these Federal programs. People who need these programs and who want to get them underway shouldn't have to go to all these various agencies. I think that part of the solution to this problem is to establish one "shop" that they can go to to get information, so that they are not forced to have this large body of technical assistants that they are having to pay money for now, despite the real possibility of ending up with nothing. I wonder if some of the things that you are proposing in your statement couldn't be done better if coordinated through Housing and Urban Development rather than through the Agriculture Department. Secretary FREEMAN. Well, in effect the programs, you see, that we are-most of the programs we carry forward now are well-established programs that have been applied for an extended period of time. Some of the new ones are the ones that we are threshing around with a little bit. The one, to be specific again, is in this water and sewer program. Well, in this instance we find that there is in these communities offices and people who are there and who are now performing services and making loans for other things. They are knowledgeable in connection with this community and its need. They are located physically there. And the net result has been that in our judgment in examining these programs, the most effective and efficient way in order to reach them and to meet this need has been to reach them through the Farmers Home Administration which is an on-going loan agency which today loans in the neighborhood of $1,300 million. Mr. HORTON. Now you are talking about the loans? Secretary FREEMAN. Yes. Mr. HORTON. Do many of these programs provide for grants, in particular for sewerage and water? Secretary FREEMAN. Yes. Mr. HORTON. You don't have any grant programs? Secretary FREEMAN. Yes. There is provision for grants for planning and development purposes. Now, again, this another point that I think adds some confusion. When we get down to the planning question, in this instance these are grants to plan for the physical development of a water system or a sewer system or both to determine economics of it, physical layout, the area, what is desirable, et cetera. Now, that is a specialized kind of planning with a stated and clear purpose but what I was talking about in the multicounty overall plan would be the total planning of an area which would include such things, let as say, as water and sewer development, would include conservation and land use practices, would include industrial development location, would include education and health, et cetera, services, and where they should be and how they should fit in, would include intergovernmental relations between various units of local government, would include the total package, the total picture which would develop all the elements of a viable community as distinguished from the more limited direct target kind of thing that we are talking about if we are talking about planning for a water and sewer system or planning for education of some kind or planning a particular phase of a service program in an area. I am of a mind that this needs to be done on a total overall basis. Mr. HORTON. Well, I don't disagree at all with the proposal to have multicounty planning and have it done for a larger geographic area. The only question that I have is whether or not this should be done in one agency or whether it should be done in several agencies or departments. At the present time, this type of program can be |