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Memorandum of Disapproval of the Area Redevelopment Bill.

September 06, 1958

I AM WITHHOLDING my approval from S. 3683 the Area Redevelopment bill.

Every year for the past three years I have strongly urged the adoption of a program of Federal assistance to communities of substantial and persistent unemployment for the purpose of assisting those communities to develop a sounder and more secure economic base. I regret that no action along these lines has been taken by the Congress until this year and, needless to add, I am greatly disappointed that I find myself unable to approve the present bill.

My disapproval need cause no unnecessary delay in initiating a sound area assistance program. Even the unsound program contemplated by S. 3683 could not be of immediate help to any community because the Congress, before adjournment, failed to provide any money to carry out the bills purposes. Until the next session of the Congress, the needs of areas of severe and persistent unemployment can be met in part through the new program of loans to State and local development companies under the Small Business Investment Act of 1958 which I recently approved.

The repeated recommendations of the Administration recognized that the major responsibility for planning and financing the economic redevelopment of communities of chronic unemployment must remain with local citizens if federal programs are to be effective. The present bill departs from this principle, and would greatly diminish local responsibility. In doing so, and in including other undesirable features, it defeats any reasonable chance of giving effective help to the communities really in need.

S. 3683 provides for less local participation in the costs of local development projects than is proper or necessary to stimulate and assure the continuing interest and support of local governmental and private interests. The Administration recommended loans, for periods of 25 years, in amounts not exceeding 35 per cent of the cost of redevelopment projects. S. 3683, on the other hand, provides for loans for such projects for periods of forty years, at artificially low interest rates, in amounts up to sixty-five per cent of the total cost of a project.

S. 3683 proposes in addition a program of Federal grants for public works in redevelopment areas under which it would be possible to have no local participation whatever. Moreover, the criteria for making these grants are so loosely drawn that, without indiscriminate use of funds, administration of these provisions would be almost impossible. This is a field in which, if the federal Government participates at all, it should be able to rely upon local judgments backed by significant local contributions.

S. 3683 is also defective in my judgment because its assistance in certain instances, would be available in areas in which unemployment is traceable essentially to temporary conditions. federal assistance to communities where unemployment is not clearly chronic would necessarily mean the assumption of responsibility by the Government for the direct support of local economies--an assumption of responsibility that would have the most profound consequences.

I also believe it would be a grave mistake to establish, as this bill would, an area assistance program in the Housing and Home finance Agency. Such a program should be lodged, not with an agency concerned with residential housing and related matters, but rather with the Department of Commerce which has primary responsibility for business and industrial development and a long experience in extending to local areas technical aid for economic development.

S. 3683 also contemplates Federal redevelopment assistance, including loans, in rural areas. There is serious question as to whether federal loans for the construction of industrial buildings in rural areas would be a proper or effective approach, much less a permanent one, to the problems of surplus labor in essentially agricultural communities.

It is my intention next January when the Congress reconvenes to request the Congress to enact area assistance legislation more soundly conceived to carry out the purposes which I have repeatedly stressed as being in the national interest. It is my hope that Congress at that time will move with all possible speed to enact such an area assistance program.

DWIGHT D. EISENHOWER

Dwight D. Eisenhower, Memorandum of Disapproval of the Area Redevelopment Bill. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/233998

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