We hope to be able to announce a list of these communities very shortly. But I think from this experience of these 15 or 20 projects, that we will be able to establish some prototypes that will be immensely helpful to other communities, the how-to-do-it type of thing, that already we are learning from experiences such as Dr. Varano described to this committee today.

I will be very happy, Mr. Chairman, to try to answer my questions that you and the members of the committee might have.

I know it is late in the day and I have purposely therefore kept my statement to the very minimum.

Mr. KLUCZYNSKI. I want to thank you, Mr. Boutin. Although you are still a young fellow, you are getting better with age-like good Kentucky bourbon.

Mr. BOUTIN. Thank you, Mr. Chairman.

Mr. KLUCZYNSKI. We are getting somewhere now. I am very happy to have these hearings, and this is one of the finest that we have ever had. As you know a couple of years ago we were in the big cities, Chicago, Rochester, New York City. We brought the Federal Government into Atlanta, Ga., on a hot summer day. It was 106 inside and about the same outside. Now we are going to the small communities, small town, USA.

With your remarks, Mr. Boutin, we are going to help that independent businessman.

I hope that you will read the testimony that was given this afternoon by Mayor Lentz and also by Ward Elliott of that great State of West Virginia. Mr. Elliott has had a problem over there that I hope you will be able to solve. I am sure that some of your men will be able to look this over this afternoon. We want to give Mr. Elliott some action. We want to do it for a great man here, Arch Moore.

We have some questions we want to ask of you, but I will recognize the gentleman from West Virginia right now, my good friend Arch Moore. This is neither a Democratic nor Republican committee as I said before. This is one happy family. We are all trying to help that fellow who needs the help.

Mr. MOORE. Mr. Chairman, regardless of whether the sun comes up, whether the Lord blesses us with bright and clear days or whether there is a major hurricane outside, you are as tranquil as the morning dew. I just want you to know that it is a privilege to sit here with you, John, and to sit in on your hearings. I sit here ex officio, as the ranking Republican on the full committee, and I want to say how much I appreciate the opportunity to hear testimony in this area.

I was particularly interested in the observation you made, Mr. Boutin, as to the manner in which you are treating the 502's and the local participation required. Chairman Evins and I tried to get John Horne to do that 3 years ago. We are pleased to see that you have reduced the percentage required from 20 to 10 percent.

Did you limit the reduction of the percent of participation to communities of a certain number of people.

Mr. BOUTIN. Yes, under 2,500.

Mr. MOORE. I see. Thank you very much, and thank you for your statement, Mr. Boutin.

Mr. BOUTIN. Thank you, Congressman.

77-669-67-vol. 1-6

Mr. KLUCZYNSKI. Mr. Burton? Mr. Burton is a new member, and we are very happy to have him as a member of the subcommittee. Mr. BURTON. I certainly am happy to be on the committee. It is nice to meet you, Mr. Boutin.

I think it is a fine thing that the chairman has agreed to hold hearings out in some of our smaller towns where the people are fighting for their very life. I want to tell you that your agency has done a lot to help save what is left of rural America, at least in the State of Utah.

Thank you, Mr. Chairman.

Mr. BOUTIN. Thank you, Congressman.

Mr. KLUCZYNSKI. Mr. Boutin, we also have that great man from Massachusetts who is always interested in small business. Mr. Conte. Mr. CONTE. I do not serve on this subcommittee, but I wanted to hear your testimony, Mr. Boutin.

I am also pleased to hear your statement. I hope that the next time representatives of SBA come to visit my hometown of Pittsfield you will let me know so I can share in providing for them our Berkshire hospitality. I read about the visit in the newspaper later on.

Mr. BOUTIN. When was this?

Mr. CONTE. About 6 weeks ago.

Mr. BOUTIN. I wasn't among those present. But I am sorry. That is one of the cardinal rules that we follow. I don't like to have my people go anywhere without the appropriate Congressmen.

Mr. MOORE. If you will yield on that point, the Administrator very graciously came into my district 2 weeks before the last election. Mr. BOUTIN. We had a real good day, too.

Mr. MOORE. We had a real good day, and you could not shake me if you tried. You did not. You gave me all of the notice and all of the courtesy, and for this I am deeply appreciative. I am sure this was an oversight.

Mr. CONTE. We would like to be able to show pitality.

you some of our hos

Mr. BOUTIN. That is very close to home, as you know.
Mr. KLUCZYNSKI. Mr. Broyhill?

Mr. BROYHILL. No. questions. I just wish to join with the other members of the committee in thanking Mr. Boutin for his appearance here today.

Mr. BOUTIN. Thank you very much, Mr. Congressman. In your State this 502 program has just been a fantastic thing. Next to Alaska, North Carolina has done the greatest job, taken the greatest advantage of the program.

it.

Mr. BROYHILL. The members know. I have talked to them about

Mr. BOUTIN. These communities down there have just been great, marshaled the local people, raised some money and it has been a terrific shot in the arm.

Mr. KLUCZYNSKI. Mr. Boutin, are title IV loans still limited to $15,000?

Mr. BOUTIN. No, we have administratively limited this program on the EOL-1 portion alone to $15,000. EOL-2 is $25,000 which is the statutory limit. Of course, our regular loan program has a

statutory limit of $350,000. But the EOL program by statute is $25,000, 15 years and other than EDA designated areas it is a 512 percent interest rate, Mr. Chairman. But, EOL-1 is limited administratively to $15,000. Insofar as we can determine, this is meeting the spectrum of need.

Could I make one more point, Mr. Chairman? I think it is important.

This morning I understand from one of the people who was here, that there was criticism on the way SBA processed some loans for an Indian reservation down in Arizona. I want to say that we had 19 loans referred to us by this SBDC. We approved 13, and we have 1 in process now. We had five declinations which is a pretty good rate of approval. But there has not been any foot dragging on it. With the new concept there is no layering of responsibility at all. Now, the SBA man is in on the ground floor. At the time the application comes in-I am trying to limit the time that it takes to process any kind of application unless it involved construction, where we had to get construction estimates-to not more than 21 days. I am happy to tell this committee that right now we are running at an average of 19 days, right across the country to process applications. So things have been simplified considerably from what they used to be.

Mr. MOORE. This is all applications, 7-A, 502?

Mr. BOUTIN. Everything except 502 because that normally involves construction.

Mr. MOORE. You were talking about approval of applications? Mr. BOUTIN. I am talking from the time the application is accepted until final action is taken, either declination or approval.

Mr. KLUCZYNSKI. I believe the witness said he had 50 applications and nothing has been done in 6 months.

Mr. BOUTIN. These have not, Mr. Chairman, come to us and obviously I don't want to dispute the gentleman. I can give you an idea in fact of type of applications that have been approved.

We have approved a loan for a silversmith, two for trading posts, four for filling stations and auto services, one for an animal clinic, one, believe it or not for a dance band, one for garbage disposal, one for sand painting-I understand this gentleman is good at rainmaking, too. Also, one for sand and gravel contractor and one for TV radio

sales and service.

Mr. KLUCZYNSKI. I understand $600 was given to some dance band and they are doing very well. So you ought to have that $600 very shortly.

You are commended for reducing 502 local participation from 20 percent to 10 percent. I am very much interested in that. You spoke about Alaska and North Carolina. There is such a thing as the State of Illinois.

Mr. BOUTIN. Yes, sir, indeed.

Mr. KLUCZYNSKI. There is a city of Chicago where we had the stockyards. Of course, the stockyards are all gone now. They have gone to Nebraska and elsewhere. So we have 1 square mile there, and after we get through with all these hearings, Mr. Kluczynski will speak with Mr. Boutin to see if he can help us out in Chicago.

Mr. Burton?

Mr. BURTON. Mr. MacDonald, who appeared before us this morning as a representative of the Navajo Tribe, told us of a problem, Mr.

Boutin, that I believe you can help resolve. The Navajo land is the size of West Virginia; it lies in Utah, New Mexico, and Arizona. When the Navajos have an application to file, depending upon where the particular Indian might be, they have to work with one of three different regional agencies. Mr. MacDonald would prefer to file all applications in one State, preferably, I trust, in Utah.

Mr. BOUTIN. I will make the commitment to this Congress and this committee that that reservation and Mr. Hendrick who is in charge of this program will assign some one region and one office to handle the whole reservation. That makes good sense and we will do it.

Mr. BURTON. Thank you, Mr. Chairman.

Mr. KLUCZYNSKI. Any further questions or comments?

Mr. Boutin, I want to tell you we are happy to have Mr. Burton on this committee and to bring him into this happy family. I know he will do very well.

Mr. Burton has been here all day, and I hoped you would attend all day.

Thank you, Mr. Boutin.

Mr. BOUTIN. If you have other questions yourself, or the members of the committee, that you would like to submit to us to have an answer for the record as these hearings progress, we will be delighted to do this, Mr. Chairman.

Mr. KLUCZYNSKI. Fine. Thank you.

Mr. BOUTIN. Thank you all.

Mr. KLUCZYNSKI. The meeting is adjourned until tomorrow at 2 p.m., at which time the Honorable Orville L. Freeman, the Secretary of Agriculture, will appear. At 3 p.m., the Honorable Robert C. Weaver, the Secretary of Housing and Urban Development, will appear before the subcommittee.

Thank you.

(Whereupon, at 4:55 p.m., Monday, March 20, 1967, the subcommittee recessed, to reconvene at 2 p.m. the following day.)

SMALL BUSINESS IN SMALLER CITIES AND TOWNS

TUESDAY, MARCH 21, 1967

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON URBAN AREAS OF THE
SELECT COMMITTEE ON SMALL BUSINESS,

Washington, D.C.

The subcommittee met, pursuant to recess, at 2:15 p.m., in room 2359 Rayburn House Office Building, Hon. John C. Kluczynski, chairman of the subcommittee, presiding.

Present: Representatives Kluczynski, Irwin, Horton, Burton, and Evins.

Also present: Representatives Multer, Dingell and Smith of the full committee; Representative Mize of Kansas; Gregg Potvin, subcommittee counsel; Myrtle Ruth Foutch, clerk; and John J. Williams, minority counsel.

Mr. KLUCZYNSKI. The hearing will come to order.

The hearings will resume today to receive testimony from a particularly distinguished panel of witnesses. For our first witness this afternoon, we are most honored to have appearing before us a distinguished American and administrator of outstanding capabilities. He has served with distinction as Governor of his State of Minnesota and has earned warm praise for his 6-year stewardship of one of the largest and most complex departments of the Federal Government— the U.S. Department of Agriculture.

It is both a privilege and a pleasure at this time to recognize the Secretary of Agriculture, the Honorable Orville L. Freeman.

It is a pleasure to have you with us, Mr. Secretary. The floor is yours.

TESTIMONY OF HON. ORVILLE L. FREEMAN, SECRETARY OF AGRICULTURE

Secretary FREEMAN. Thank you very much, Mr. Chairman, distinguished members of the House Small Business Committee, and ladies and gentlemen. I am delighted to be here. It is not often I have an opportunity to appear before this distinguished committee. I do appreciate your courtesy in hearing me and the very generous introduction that the chairman has so graciously accorded me.

In my presentation I hope to do three things: to point out the direction in which we are being swept by an unplanned and, in a sense, involuntary mass migration from country to city; to offer for your consideration what I believe to be a promising alternative;