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FEDERAL EXPENDITURES FOR REGIONAL DEVELOPMENT AREA D EV ELO PM EN T E X P E N D IT U R E S AND ECONOMIC ST A B IL IT Y IN LOCAL AREAS D epa r tm en t of C om m erce Statement submitted by Frederick H. Mueller, Acting Secretary of Commerce The Office of Area Development does not administer a public-works program or dispense funds for such purposes; accordingly, no com ment is provided on item 1 of your memorandum. W ith respect to items 2 and 3, it is worth noting that the root prob lem with a significant number of the local communities that seek the counsel of this Office is the presence, or the threat, of economic in stability. In many of these cases, one important recommendation in any long-term remedial program is for a type of public-works pro gram such as: (a) replacing or extending the water and sewerage system, (l>) refurbishing or extending of street or highway system, (c) enlarging the water supply by addition of wells or storage reser voir, or ( d ) providing for improved transportation by dredging or straightening existing navigable watercourses. All these measures are services required by industry and they are commonly critical plant-location factors. I f they are not present and cannot be supplied by the community its chance of providing new business and job opportunities are negligible. In addition to essential industrial location factors such as water or sewerage systems, an increasing number of cases come to the fore in which a community must spend money to enhance its appearance, to provide recreation outlets or similar kinds of improvements. In the face of intense intracity competition for industrial development, these seeming luxury improvements become necessities and take on a greater significance in the minds of industrial managers than they formerly had. I t is recognized that these so-called marginal improvements can, and often are, provided by private sources, but if their need is revealed by a civic-minded group, in all probability the problem will become one for solution by public action, and a search for publicworks funds at State and Federal levels will ensue. In fact in many quarters forthright action by community governments on matters of this kind is regarded as one of the primary earmarks of a good busi ness climate. While it is true that not all area-development programs require a public-works type of input in order to succeed, it is clear that indus trial development and potential economic stability are extremely 803 804 ECONOMIC GROWTH AND STABILITY forceful arguments to use in selling a local public-works program. A danger exists therefore of overselling public-works projects of m ar ginal or questionable value, and the administrators of such programs should be aware of this possibility. Two reports prepared by this office call attention indirectly to the close relationship between public-works activities and economic sta bility at the community level. These reports are Checklist for Com munity and Area Development Business Service Bulletin 145, and Federal Programs for Community Assistance, United States D epart ment of Commerce Business and Defense Services Administration, Office of Area Development.
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