where it is assembled. I am wondering if it is fair to charge up an expenditure which goes, 85 percent elsewhere and 15 percent on that job.

Secretary ICKES. We would take that into account and we are also trying now to break down our own figures. Take the case of these ships: We are trying to apportion that more justly as between Maine and say Pennsylvania or New York, or those States where the material is fabricated.

Senator BYRNES. Where the money actually goes.

Secretary ICKES. Yes.

Senator BYRNES. I think that that is fair.

Senator HALE. If that were done, with our naval allotment, you would find that it would take up most of the allotment.

Secretary ICKES. And, I might add that you have not asked for any money. These are Federal projects. We cannot press a favor upon an unwilling bride, you know.

Senator HALE. That is quite true.

Senator GLASS. I think though that in Virginia

DISBURSEMENTS TO DATE

Senator DICKINSON. I would like to refer to page 244 of the hearings of the House covering the actual disbursements to date.

As I understand it, there has been paid out on non-Federal projects only $105,127,310.

Secretary ICKES. Actually paid out.

Senator DICKINSON. Actually paid out.

Secretary ICKES. The actual allocations have been far in excess of

that.

Senator DICKINSON. I understand that, but you do not put any money to work until you get it out of the Treasury.

Secretary ICKES. That is very true.

Colonel WAITE. That is 60 days behind the estimates.

Senator DICKINSON. Is this figure correct, where you have paid out on Federal projects $972,300,000.

Colonel WAITE. That is about right.

Senator DICKINSON. In other words, the total expenditure from all of your operations, both Federal and non-Federal, have approximately reached a little over a billion dollars.

Secretary ICKES. Yes, but it will go much faster from now on, Senator. It is slow to start, necessarily. We started from scratch. There was no program of public works when this administration took office. There was no program of public works begun or attempted until last July. We have been in operation less than a year. It takes time on any construction job to prepare your plans and specifications and let your contracts, and then other questions are involved in a great many instances, as there have to be new ordinances, or maybe new laws; or maybe the municipalities have to go to the legislature for enabling acts. There have to be referendums on bond issues. It is not as simple as it looks. It is not a case as between two private individuals, where, for instance, I am a banker and you come to me to borrow money to go out and start the building of a house. You do not have to ask anyone's consent except the banker, and if he will lend you the money, you could start building. You do not have

to obtain an ordinance; you do not have to go to the legislature; you do not have to have a referendum.

Senator DICKINSON. The thing that I have in mind here in the first place is this and you have given the very plausible reason why you have not paid out more money; but in the second place, I am wondering whether or not the people that are put to work and the actual benefits to unemployment is sufficient under a program of this kind to warrant the expenditure even on behalf of the municipalities and the Federal Government.

Secretary ICKES. Well, that is a question of policy. It seems to me that it is self-evident that we are going to spend money for relief and it is a whole lot better to put that in useful improvements that give bona fide employment and adds to the capital assets of the country. It is better than handing it out as a dole; or better than using it for raking leaves.

Senator DICKINSON. The query that immediately comes is whether or not you are imposing on many of these communities a carrying charge for the future that is not going to be a benefit, but is going to be a burden to them.

Secretary ICKES. Well, if a community needs water works or a sewage system, they can do those improvements under this plan. We give them 30 percent, and we give them a loan of 70 percent at 4-percent interest, repayable in 30 years. How could they finance it to a better advantage than that?

Senator DICKINSON. Yes; but the question arises immediately as to whether or not they would be able to get along without those facilities. Secretary ICKES. Well, they can follow Maine's example, and not come in for it.

Senator DICKINSON. Maine has been a pretty wise old State for a good many years.

Senator BYRNES. You do not solicit?

Secretary ICKES. We do not solicit business. We turn customers away.

Senator BYRNES. Let me ask you this, Mr. Secretary. The $105,000,000 is of what date?

Secretary ICKES. May 18.

Senator BYRNES. $105,127,310 had been paid out on May 18.

Secretary ICKES. Yes, sir.

Senator BYRNES. May I ask one other question?

Secretary ICKES. Yes, sir.

SALE OF SECURITIES

Senator BYRNES. What is your policy with reference to these securities of the municipalities that you have secured on these non-Federal projects? Have you the authority to sell those securities?

Secretary ICKES. We have already sold some, Senator. We sold practically three-quarters of a million of them at a premium, and that money went back into the United States Treasury. We would like to have it come back into our own funds.

Senator BYRNES. If investment banking opens up, why could you not sell more?

Secretary ICKES. We expect to.

Senator BYRNES. And bring back some money into the Treasury.

ss. We expect to do that.

Es. Those that you have sold, you have sold at a

ts. We sold them at a premium. We made a little

'L

ELLAR. Mr. Secretary, some of the States have not the satures in session since the Public Works really began. ~MN LIKES. No.

NUTELLAR. Now, I know of one State, my own, in which the frosne meets next January.

siature undertook to act, it would be too late insofar the sect appropriation is concerned?

STATES' SHARE IN PROJECTS

SICKES. Well, if we had $500,000,000, if we only get 800.00, while there is $3,500,000,000 in applications, you see that will not last very long.

cator DICKINSON. In your statement before the House, did you Say that over $2,000,000,000 of those could be approved? Colonel WAITE. About $2,000,000,000.

Senator DICKINSON. Yes.

Colonel WAITE. That is true.

Senator BYRNES. You mean that you have got $2,000,000,000 edible for approval?

Senator MCKELLAR. You have got about $2,000,000,000 unexpended balance?

Secretary ICKES. The unexpended balance, of course, is all allocated. Senator DICKINSON. Referring to your previous question, here is the way Colonel Waite has explained it to me. We have paid out on non-Federal projects about $124,000,000 to date, which has actually gone out into the public works. That is not a true picture. Take a case such as the State of Massachusetts, where they have not come in, generally speaking, for loans and grants, but merely for grants. We give them 30 percent and they are financing 70 percent on top of our 30 percent, so that the amount of money going into construction work all through the country is greatly in excess of this figure here.

Senator BYRNES. You mean they do not borrow the 70 percent. Secretary ICKES. No. They take the 30 percent grant and raise their own 70 percent, instead of borrowing it. We have had a number of instances where they originally had applied for the loan in addition to the grant and then they found out that the stock market was favorable and they changed and asked only for the grant and sold their bonds, but there is an additional 70 percent going into construction that does not show in our figures here.

Senator DICKINSON. When you advance only 30 percent, do you impose upon them certain rules and regulations, and requirements with reference to labor?

Secretary ICKES. Absolutely; they have to come in with a public works contract and we supervise the contract and the construction. Senator DICKINSON. Has there been considerable cancelation by resson of those impositions and those restrictions?

ry ICKES. No; very few.

Senator MCKELLAR. Where do they find the money, this 70 percen that is put up under exactly the same restrictions as you have men tioned?

Secretary ICKES. They supply it.

Senator MCKELLAR. And you impose the same restrictions as i they had borrowed all of the money from you?

SUPERVISION OF WORK

Secretary ICKES. We supervise the work with our own engineer and we are looking out for chislers and short cuts, just as if we ha put in the whole 100 percent.

Senator ADAMS. What do you do in the way of charging agains the project the expenses of your engineers?

Secretary ICKES. We pay for the engineers and in some of the big projects that is provided for additionally.

Senator ADAMS. That is an additional grant?

Secretary ICKES. Yes.

Senator GLASS. When you speak of a grant, Mr. Secretary, wher does the Government of the United States get any money to gran anyway?

Secretary ICKES. Under the law.

Senator GLASS. I am not talking about where it gets it. That is as distinguished from the pockets of the taxpayers.

Secretary ICKES. Yes.

Senator GLASS. Now, that is not a grant. It is not a gift. The Treasury has no money to be giving away. What I have in mind is and what puzzles me is I have not been home since January-but in my home town, if we are going into local matters

-I

Senator MCKELLAR. Certainly.

Senator GLASS. In my home town they appropriated or authorized the issuance of a half a million dollars of bonds to replace a gravity pipe line, stave line, with a cast-iron pipe, partially. The bonds were offered for sale, and responsible banking concerns bid a premium or the bonds. Instead of selling the bonds to this banking house at a premium and employing its own labor at the usual wage standard of that community and going to work under the supervision of the city authorities, the then Governor of the State headed a committee, went around to every community in Virginia, and advised them to borrow money from the Federal Government and get a gift of 30 percent, which was nonsense. It is nonsense. There is no gift occurred to the State of Virginia. The State of Virginia will have to pay every dollar back He prevailed upon the council and deluded the city manager into proceeding in that way. You took the bonds here. You have sold $200,000 or $250,000, I do not recall which, at a premium. My town has the best credit record of any town in Virginia. Its bonds are always at a premium.

I cannot figure out what advantage to that community it was to come here and borrow Federal funds and get a so-called "gift" of 30 percent, which is not any gift at all, and demoralize the whole wage standard of that whole territory, strip the bonds of common labor so that they cannot employ them anyhow, while this work is going on I would just like for you to explain to me what particular advantage that was to the town. You are paying a wage scale there double the