decided to put a little tiny plant at Gainesboro less than 30 miles from Celina, my county seat town, I guess my wife and I got 500 letters from people in Indiana wanting jobs, wanting to come home.

I wouldn't want to tell any public official in any town or city in Indiana anything about the problems of his office. But I will say this. I can't see how they can possibly make plans in the medium size and larger cities for slum clearance, urban renewal, public housing, new parks, new jails, new prisons, expanding public health and public mental health service, or expanding and improving their educational system without being absolutely bewildered at every turn. IBM computer machines won't ferret out and report to those people that a good one third of their city's population are a totally alien and rootless people. Those people, under the most favorable circumstances, are not likely to adjust to their new surroundings for at least two full generations. You can spend a billion dollars per big city every month trying to plan and execute new surroundings and new opportunities for people like these and you won't get enough results to shine your shoes with. Those with the lowest IQ and the poorest educational and skill backgrounds who leave here can adjust to one set of new opportunities. That, in my opinion, would be a permanent but, to many of them, bearable status on relief or welfare. Can the Federal Government or the cities or the State of Indiana afford this, indefinitely?

I believe this. If you want to get a continually growing national economy without all the violent disruptions we are having, you've got to do several things: You've got to give these boys and girls a job opportunity at home in Clay County or at one of our local growth centers like Cookeville within an hour's driving time of Clay County. To give them a real opportunity to hold a job, you've got to help guide them into a skill and a fairly good high school education. Usually that job is going to have to be in a factory or a store that is a small business. Time after time, over and over again they have proven themselves fine, stable workers at both Indianapolis and at Cooleville and in the tiny Douglas plant at Gainesboro, very close to Clay County. Now I'm not saying that the national economy could possibly afford to provide jobs within 100 miles of us for everybody who has moved up to Indianapolis. That's not possible. But I am saying that, if Indianapolis has to absorb 500 Clay Countians a year for the next ten, that city can only watch all of its community problems grow worse and worse.

How does all this fit into the small business picture across the country? I have been a small businessman, a groceryman and filling station operator, while I was out of office. That was in the tiny community of Moss, between Celina and the Kentucky State line. I bought my store just about the time the village of Moss unloaded about 250 of its 1,200 citizens on Indianapolis in one year. Moss and the trade area of four or five miles around it had a population of 1,200 when the people began to leave. Now it's down to under 500. My store and another store closed in the same year.

My strong feeling is that you have your best chance for small business to survive, if the small town and the small village and the small city survives. Wipe them out and you wipe out the segment of your small business community that has the best chance for survival. And at the same time, you wipe them out, you give the cities a dose of people that they can never hope to digest.

Judge HALSELL. Mr. Chairman, I have a letter here that I would like to have put in with that.

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

FORMER CLAY COUNTIAN OFFERS ENCOURAGEMENT TO FRANK B. HALSELL

Mr. FRANK B. HALSELL.

NAVARRE, OHIO, July 6, 1966.

DEAR SIR: I have just finished reading your article in the Celina Globe stating why you are seeking the office of County Judge.

I hope you are sincere in what you say when you stated you are interested in the future of Clay County and its people and why most of the young people leave their homes in Clay County to seek a better way of life. I am one of those who left the hills of Clay County to try and better myself such as a good job, good home, etc.

There has been times when I have longed to move back to Clay County to live where I was born and raised, but by now I doubt if I could find a job I could do that would support my family as you know, I can not vote for you, I certainly would if I could, but I do wish you every success in getting elected Judge this year and will do every thing you can to help the younger people in Clay County to better themselves and try to get more and better employment in the County. Sincerely yours,

Mr. KLUCZYNSKI. Mr. Horton, any questions?

V. L. CHERRY.

Mr. HORTON. I want to compliment you, Judge Halsell, for giving us the benefit of your firsthand experience in Clay County, Tenn. I also want to ask you a few questions.

Have you had any help from Federal agencies in bringing industry into the county?

Judge HALSELL. Yes, Congressman Evins has been of great help in assisting Celina and Clay County in obtaining Federal grants and assistance. For example, just last year Congressman Evins dedicated a new million dollar Hollow Federal Fish Hatchery near Celina.

In addition, we recently received a million dollar grant and loan from the Economic Development Administration to help finance new water and sewer facilities in Celina. This will be a tremendous help in attracting industry.

Our problem has been that industry requires these basic facilities before locating in a community-and the Federal Government wants assurance of industrial development before it will approve economic assistance grants and loans for development of basic utilities.

Fortunately, with the assistance of Congressman Evins, the Economic Development Administration, and others, we are breaking out of this situation and we are now looking forward to greater growth and progress.

In addition, we have formed an industrial development group and we are working to bring in businesses and industry to create jobs and opportunities for our people-to hold our young people at home.

Mr. HORTON. I mentioned earlier Wayne County in my district. It has a lot of unemployment and has been classified as a "surplus unemployed" area. They get certain assistance as a result of that classification.

Do you have any such classification as that in your area?
Judge HALSELL. Yes; we have. We are in that class.

Mr. HORTON. Are you in what they call a "distressed" area?
Judge HALSELL. Yes, sir.

Mr. HORTON. Have you any special assistance as a result of that classification?

Judge HALSELL. Yes, as I pointed out, the Economic Development Administration has approved a $1 million grant and loan for development of urgently needed utilities. This is a major breakthrough. Mr. HORTON. Have you formed a committee of citizens which is to try to attract industry?

Judge HALSELL. That is correct; yes, sir.

Mr. HORTON. Do you have some overall plan for your county development?

Judge HALSELL. Yes, sir; we do.

Mr. HORTON. Has that plan been accepted by the State and, in turn, by the Federal Government?

77-669-67-vol. 1-2

Judge HALSELL. I don't think it is in yet. We have it ready to get to them.

Mr. HORTON. In other words, you are just getting started on it? Judge HALSELL. Yes, sir; that is right.

Mr. HORTON. Are there any things that the Federal Government can do to be of assistance to the people in your county in attracting new industry into the area?

Judge HALSELL. Well, as I said, Mr. Horton-the Federal Government is helping us.

Mr. HORTON. I know you want to try to do it yourself first.
Judge HALSELL. Yes.

Mr. HORTON. Do we have programs or do you feel there are programs that the Federal Government could and should develop that would be of help to your people. I would like to get your thoughts on this point.

Judge HALSELL. We would like to have all the help possible and as I say they have been helping us prepare these statements-the State and the Federal Government, too.

Mr. HORTON. Do you have any industries in your county?

Judge HALSELL. We have one, that the chairman has mentioned. The Oshkosh Overall Factory.

Mr. HORTON. Aside from that, do you depend primarily on the tourist business?

Judge HALSELL. That is right. Of course, we have a few sawmills in the county and outside of that, that is all we have.

Mr. HORTON. Thank you very much, Judge.

My KLUCYZNSKI. Mr. Burton, any comments or questions?

Mr. BURTON. No. Thank you, Judge, for coming here this morning and telling us your story. You had a most sympathetic audience. Judge HALSELL. Thank you.

Mr. KLUCZYNSKI. Mr. Corman, any questions or comments?
Mr. CORMAN. No.

Mr. EVINS. I just learned this morning and I had not known itof the methods and techniques used by Judge Halsell, who is a great votegetter. He always leads the ticket; and now I have learned of his method. Maybe this will be helpful to all of the members of the committee. He not only campaigns in Clay County but he goes into Indianapolis, Ind., and he visits the people that formerly resided in the county-those who have outmigrated. This is a new techniqueI have never heard of it. This is a good point he has given us-the way to get elected with the shifting population trends which we are experiencing today. Maybe I had better come to Chicago, Mr. Chairman.

Mr. KLUCYZNSKI. You will be welcome, Mr. Chairman.

Judge HALSELL. Mr. Chairman, I would like to add one thing to my testimony. I kept up with my campaign dates back, last summer. I spent of course, in the county and out, 71 days campaigning.

Mr. EVINS. That is very revealing. It tells the story of outmigration but you still insist on them keeping their registration in Tennessee and voting by absentee ballot.

Judge HALSELL. Yes, sir.

Mr. EVINS. I think that is very good, also.

Mr. KLUCYZNSKI. Thank you, Judge. It is a pleasure to have you with us.

One of our ranking members, Mr. Wright Patman, was going to be with us this morning. As you know, he is the chairman of the Banking and Currency Committee. He was going to introduce the next witness but in his stead we have Mr. Richard Still, staff assistant to the Congressman.

Would you introduce the next witness, please?

Mr. STILL. Good morning, Mr. Chairman.

Mr. Patman will be here before the meeting breaks up. He wanted you to proceed so that you would not lose your order of witnesses.

It is an unusual privilege for me to be before you and introduce Mayor Chance. I think you will find this of interest. Before I came with Mr. Patman, I served as the Acting Commissioner and Deputy Commissioner of the now defunct Community Facilities Administra

tion.

My first experience with Maud, Tex., was during the accelerated public works program which you may recall began in 1962. It was the CFA grant that brought the first sewage system to the city of Maud, replacing obsolete septic tanks. Little did I know, a couple of years later, I would be here with Mr. Patman trying to continue the job we began in 1962 in Maud, Tex.

Mr. Chance will be able to relate for you the experiences of his town in trying to help itself, in its relations with four major departments or agencies of the Government under various programs.

I think this will illustrate that possibly there is some gap here; some need for coordination so that the small town can have its man in Washington, so to speak, so that all programs will do the job Congress intended them to do.

So it is a real privilege to introduce Jim Chance, who is the mayor of Maud, Tex., and a small businessman as well, and also one of the leading citizens in trying to pull together a small business or development company to establish Maud's first industry.

TESTIMONY OF MAYOR JAMES CHANCE, MAUD, TEX.

Mayor CHANCE. Thank you.

Mr. Chairman and members of the committee, Maud is a small community in the northeast part of east Texas, about 20 miles west of Texarkana, and is closely related to Red River Arsenal.

Maud was established about 1880 and was a busy community for many years; it reached a peak population of about 1,500 during World War II. At the present time, Maud has a population of approximately 1,000. Other than farming, ranching, and some small service and retail establishments in Maud itself, most local employment is based on the Red River Army Depot and Day & Zimmerman, and the peaks and valleys of employment depend upon the national defense requirements. The problems we have encountered are as follows:

Our downtown area is in bad condition. We have had many prospects come to Maud and turn away as soon as they saw the deterioration of the downtown areas, which consist of two blocks of business buildings on both sides of the street. About 50 percent of these building are vacant.

Our town people recognize that we did not have expert knowledge to do our own planning or how to go about getting a new industry. We did not have the money to hire specialists. We applied to ARA and they gave us a technical assistance grant to a firm of consultants who worked with us from that point on. With their help and the help of our Congressman, we filed applications with the Department of Housing and Urban Development; with ARA and EDA; with the Farmers Home Administration and the Small Business Administration and we checked with other agencies such as HEW and OEO.

Our situation at this moment is that we received a sewer system grant and loan from APW which was handled through the Community Facility Administration, which is now a part of HUD. Up to this point, we had individual septic tanks. At the present, we have pending in the Farmers Home Administration our application for a loan and grant for a water system and a sewer application to extend our system to the industrial park area. We also have a pending application with SEA for the Maud Industrial Foundation for a furniture plant to employ up to 200 people. This is under the SBA's title 502 program.

Maud is not eligible for EDA industrial loans because Bowie County lost its designation as a redevelopment area but Maud is in worse condition today than when ARA and EDA were formed because of its downward population trend.

Our experience with Federal agencies has pointed up these facts. By ourselves we are not equipped to handle the many programs they offer and to know which will help us.

We cannot plan beyond our own town limits without assistance. We are too poor as a community to participate as required in some programs the 20 percent SBA asks our local development company to put in the project is too much for us-we cannot come up with the required $75,000. We are also having trouble with 50 percent of the water-sewer application with Farmers Home Administration, and it is not certain that FHA can even give up to the 50 percent grant. If they don't, the water is out, and if we don't get the water, the industry will not come to Maud.

We are unable to obtain satisfactory private financing for the loan portion of the water-sewer system since municipal interest rates are exorbitant because of today's tight money situation. A Federal guarantee program similar to the present Federal programs for the development and purchase of individual homes should be considered by the committee.

An inconsistency and inflexibility in certain Federal requirements should be eliminated in cases where we are dealing with the first or "startup" industry as in Maud. In particular, there should be a greater allowance applied toward the 20 percent local contribution for that portion of the town's water and sewer system directly related to the development of the industry's site. This is the equivalent of, and in lieu of, cash contribution. It can be assumed that with a fully developed industrial tract, properly planned, that subsequent service industries will follow in due course.

Mr. Chairman, I would be most happy to attempt to answer any questions that the committee would desire to ask at this time.