Federal Aid and Area Redevelopment

Abstract

FEW people, if any, would quarrel with the objective of federally directed programs to alleviate poverty in economically depressed areas. Similarly, few would argue that the federal government has no place in fashioning the economic destiny of the Nation. However, in deciding on the role to be assigned to the federal government, it is obviously desirable to discover whether, in practice, the governmental machinery will actually operate in such a way as to bring about the results which it is hoped to achieve by any given governmental program. The following article is a short report of the findings of a research project that evaluated the actual decisions about the allocation of aid made by the Area Redevelopment Administration as compared with the apparent intent of the legislature in creating this agency. The Area Redevelopment Act1 elicited Federal assistance in the form of loans and grants to alleviate structural unemployment and underemployment in redevelopment, or depressed areas, throughout the United States. It authorized, as an experimental measure, the establishment of the Area Redevelopment Administration (the ARA) within the Department of Commerce to carry out the legislative intent. ARA began operations in 1961 and was terminated in August, 1965, although its functions were absorbed by the Economic Development Administration. By 1955 it had become apparent to many legislators and others that all communities in the United States were not sharing in the general prosperity of the Nation. Some urban areas, such as the coal mining regions of West Virginia, for example, were suffering from structural unemployment. Other rural areas with low incomes were not sharing in the general prosperity because of disguised unemployment, or underemployment. These conditions became a matter of public concern in 1955 and legislation was finally passed in 1961 which, among other things, specified the criteria to be used in qualifying an area for assistance under the program. Redevelop-