The paper traces the legislative history and philosophical assumptions of the Rural Development Act of 1972, one of the most important pieces of rural development legislation to be enacted. This paper examines Title I of the Act, which transformed and amended the Consolidated Farmers Home Administration Act of 1961 to encompass more rural development programs, and added major new loans and grants for rural industrialization. An overview of rural industrialization research examines the economic, community, and agricultural effects of this development, consistently indicating that industrialization does produce more jobs in the nonagricultural sector of the economy. Several studies also report, though, that only a small number of the jobs are filled by unemployed local persons; most are taken by people from outside the area. Rural industrialization guarantees very little in terms of overall community improvement, and, because of the quantity of small towns (there are about 300 in Missouri alone), answers for most communities must come from other sources. More than anything else, the need in rural development acts is for a far more critical analysis of the legislation before it is passed. (KM)