Message to the Congress Proposing Additional Disaster Relief Measures Following Tropical Storm Agnes.

To the Congress of the United States:

Tropical Storm Agnes has caused unparalleled destruction in many areas of the eastern United States. More than 128,000 homes and businesses have been damaged or destroyed, and whole communities have been dealt a heavy blow. The losses to so many individuals cannot be measured only in terms of destruction of property and belongings; they must also be counted in terms of loss of jobs, disruption of families, personal privation, and anxiety about the future. In the whole history of our Nation, we have not before encountered such massive destruction over so wide-spread an area as a result of natural disaster.

Individuals, private groups and governments have responded magnificently to this calamity in the finest tradition of neighbor helping neighbors. The stamina, the courage and the spirit to fight back and recover are already evident throughout the devastated areas. My statement of July 12, 1972 summarized these impressive efforts. I also pointed out at that time, however, that an unparalleled disaster requires extraordinary measures to help in recovery. I announced my intention to recommend to the Congress supplementary and massive measures aimed at short and long-term recovery. I herewith transmit those recommendations, and the proposed legislation to carry them out. My proposals are in three parts.

First, I propose the Agnes Recovery Act of 1972. This measure deals with disaster loans for homeowners, farmers and businessmen. Because of the unprecedented scope of the destruction, unprecedented measures to deal with it are required. Under the provisions of this proposal, disaster loans for Agnes victims would be changed from present law in the following ways:

--The maximum amount of principal which can be cancelled or forgiven would be increased from $2,500 to $5,000 on loans made by the Small Business Administration or the Farmers Home Administration.

--The forgiveness feature would be applicable to the first dollar of a loan rather than after the repayment of the first $500 of principal as is now the case.

--The interest rate on the loans would be dropped to 1 percent instead of its current rate of 5 1/8 percent.

This liberalized assistance to individual homeowners and small businessmen can mean the difference between recovery and bankruptcy or ruin. The situation is urgent. Individual people are now making decisions on whether to rebuild or not. While my proposal would apply retroactively to all victims of Agnes, it is important to them to know now the terms of assistance which will be available to them.

Therefore, I call on the Congress to respond to this emergency by acting on the Agnes Recovery Act so that it can become law within one week.

Second, I recommend supplemental appropriations totaling $1,569,800,000 for this emergency, the largest single request of its kind in our history. The vast majority of these funds would be used for disaster loans, with $1.3 billion for the Small Business Administration and $1.8 million for the Farmers Home Administration. The SBA funds would be used to provide loans for homeowners and small businessmen in disaster areas whose property has been damaged or destroyed. The FHA funds would provide sufficient personnel to process expeditiously loan requests in rural areas, for which adequate loan funds now exist. Also included in my supplemental request are:

--An additional $200 million for the President's Disaster Relief Fund, to speed repair and reconstruction of public facilities and to provide temporary housing, food and unemployment compensation.

--$40 million for the Economic Development Administration, $16 million for the Appalachian Regional Commission and $12 million for the Corps of Engineers, all to assist in the recovery of dam. aged communities. The funds for the Corps of Engineers would go toward flood control projects in the Susquehanna River Basin.

Third, I recommend that the existing authorization for appropriations for highway emergency relief be increased by $200 million. Current authority limits amounts to $50 million per year, which is clearly not adequate to cope with a disaster of this magnitude.

I urge that the Congress also act promptly on these second and third proposals.

The Federal Government must act quickly and decisively to do its part in providing relief and aiding recovery in a cooperative effort with the States and communities struck by Agnes. We can do no less. I am confident that the Congress will share this view.

RICHARD NIXON

THE WHITE HOUSE,

July 17, 1972.