Statement to the Committee on Labor and Human Resources, United States Senate, in consideration of S801, National Health Service Corps Amendments of 1981, April 8, 1981. The testimony discusses the doubts expressed by others that the expansion of physician manpower now in progress has any prospect of markedly influencing the geographic distribution of physicians. Based on their research, the authors do not agree with this. The number of board-certified physicians in smaller towns of 10,000 to 20,000 is growing disproportionately faster than in larger towns. Moreover, the numbers in small towns should continue to grow. Physicians are influenced by market forces. The authors give evidence from their research to back their claims.