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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.

Secretary ICKES. We expect to do that.

Senator BYRNES. Those that you have sold, you have sold at : premium?

Secretary ICKES. We sold them at a premium. We made a litt profit on them.

Senator MCKELLAR. Mr. Secretary, some of the States have not had their legislatures in session since the Public Works really began. Secretary IсKES. No.

Senator MCKELLAR. Now, I know of one State, my own, in which the legislature meets next January.

If the legislature undertook to act, it would be too late insofar as the present appropriation is concerned?

STATES' SHARE IN PROJECTS

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

Senator DICKINSON. In your statement before the House, did you not 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 eligible 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. on non-Federal projects about $124,000,000 to date, which has We have paid out 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.

with reference to labor?

Senator DICKINSON. When you advance only 30 percent, do you impose upon them certain rules and regulations, and requirements Secretary IсKES. 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 reason of those impositions and those restrictions? Secretary ICKES. No; very few.

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

made Secretary ICKES. They supply it.

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

eally!

ater

SUPERVISION OF WORK

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

Senator ADAMS. What do you do in the way of charging against 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, where does the Government of the United States get any money to grant anyway?

Secretary ICKES. Under the law.

Senator GLASS. I am not talking about where it gets it. That is, was 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

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 on 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

prevailing wage scale to common labor, not only in this depressi but for all time, and you have demoralized the whole farming industr there for the Lord only knows how long in wage matters.

Now, what particular good was done in my community in th transaction?

Senator DICKINSON. Before you reply to that, let me suggest to the Senator that my little town

Senator GLASS. Let us get through with my home town first. Senator DICKINSON. I want to give this illutstration, that after the had made application and got the grant, the restrictions were impose and they canceled their application because they did not want to comply.

Senator GLASS. My town was not as wise as yours. I want to find out, when I go back, how they have benefited.

Secretary ICKES. I would not pretend to say, Senator, that it is to the best interest of every community to come in for a loan and s grant. Now, I notice on the bonds that you have referred to, that municipal financing for them to have proceeded as they had originally intended, sell their bonds-they had a market for their bonds-and go ahead with their own enterprise; but when they come to us, we do not look into those questions, naturally. If the security they offer is not good security, then we become rather searching in our questions; but if they come in under the act, as they are entitled to come in, we

deal with them on that basis.

get a gift while they

repay.

Senator OVERTON. Mr. Secretary, Senator Glass made the statement that this 30 percent is not a gift and the taxpayers will have States, and I assume we take, for instance, the city of Lynchburg, ultimately to pay for it. That is the taxpayers throughout the United they get a 30 percent grant, but it is not a burden that is imposed taxpayers of the United States, and I was going to say that I think that like to come in while these Santa Claus gifts are being bestowed and a great many of these municipalities and these State subdivisions exclusively, but which are borne by the general public. taxes into the Treasury of the United States as Virginia alone pays, 13 Western States which together do not pay as much internal-revenue my community, and every other community in the State, is go get an increased tax bill. We have not had courage enough ncrease the taxes, because the elections are too near by; but we Sing to get an increased tax bill that will clearly indicate to them that they have not gotten any gift at all, but are being brought further Sa debt in that transaction. My community is being thrown further and most of it is labor-all of it is labor, outside of the material hrnished for the work-for one-half of the wages actually paid by e debt by that transaction, because it should have employed the Public Works. So that in the end instead of getting a gift they will be mulcted with taxes.

are being distributed, which they do not have to

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P.W.A. CONTINUANCE

Senator HAYDEN. I want to get back to this broad question, Mr. ecretary, and get your opinion of the advisability of expending the mount that may be available in this act beyond $500,000,000. I nderstand you have applications amounting to about $3,000,000,000. Secretary ICKES. Three and a half billion, but $2,000,000,000 of hat would be good projects.

Senator HAYDEN. Would be good projects?

Secretary ICKES. Yes.

Senator HAYDEN. Now, if Congress were to place the funds in your hands so that this $2,000,000,000 worth of work could be done, it will be done on a 70-30 basis?

Secretary ICKES. A great proportion of it will, Senator. There are some Federal projects. For instance, we have already allotted funds to Federal projects. We have done that during the past year and we will have to carry them on in the second year and complete the work. Senator HAYDEN. From now on, new works would receive that money in major proportions.

Secretary ICKES. Yes.

Senator HAYDEN. If there were $2,000,000,000 worth of thrifty or good projects.

Secretary ICKES. Yes, sir.

Senator HAYDEN. Under your plan there would be a direct burden on the taxpayers of 30 percent of the $2,000,000,000 or $600,000,000 that would have to be paid by the taxpayers.

Secretary ICKES. Yes, sir.

Senator HAYDEN. There would be a return to the Treasury over a series of years $1,400,000,000 in the nature of repayment of loans? Secretary ICKES. That is correct.

Senator HAYDEN. Now, do you feel in your own mind, as a result of the work that you have done up to date that Congress should pursue that policy further? That is, what is your advice to us as to what we should do in that respect?

Secretary ICKES. Of course, I wish we might be put in a position to do a considerable portion of these projects. I think it would give us greater assurance that the recovery program was going to go over and as you said the 70 percent would be returned with interest at 4 percent. It is going to be a great disappointment to many, many of these communities if we have to throw their obligations out through 1 lack of funds, for the Public Works Administration is splendidly equipped now to give quick results. We are functioning everywhere I in good shape, I think. It is generally admitted, and it is all a question of policy for the Congress to determine whether it wants to go ahead with this program of public works decided upon last year, on a substantial basis.

Senator McKELLAR. Mr. Secretary

Senator HAYDEN. What is your advice in that regard? Are we putting people to work and are we accomplishing results?

Secretary ICKES. I do not think that there is any doubt in anybody's mind but what we are doing constructive work not only so far as direct labor is concerned, but indirect labor in the factories, in the quarries, and in the mines, on the transportation systems, the railroad

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