REVOLVING LOAN FUND FOR KLAMATH INDIANS JUNE 22, 1937.—Committed to the Committee of the Whole House on the state of the Union and ordered to be printed Mrs. Honeyman, from the Committee on Indian Affairs, submitted the following REPORT [To accompany H. R. 5976] The Committee on Indian Affairs, to whom was referred the bill (H. R. 5976) authorizing the establishment of a revolving loan fund for the Klamath Indians, Oregon, and for other purposes, having considered the same, report thereon with a recommendation that it do pass with the following amendment: Strike all matter after the enacting clause and substitute the following in lieu thereof: That the Secretary of the Interior shall cause to be established on the books of the Treasury, out of any unobligated tribal funds of the Indians of the Klamath Reservation in Oregon (hereinafter referred to as the "Klamath Indians") on deposit in the Treasury of the United States, a capital reserve fund for said Klamath Indians. Such fund shall be created by setting aside the sum of $50,000 for the fiscal year 1937, and shall be augmented by additions of $50,000 for each fiscal year thereafter. Such fund shall be held in the Treasury of the United States and shall bear interest as provided by law. The interest upon such fund shall be used, insofar as it is sufficient, for the payment of the expenses of administration of the Klamath Indian Reservation in Öregon. SEC. 2. The Secretary of the Interior shall cause to be established on the books of the Treasury, out of any unobligated tribal funds of the Klamath Indians on deposit in the Treasury, a reimbursable loan fund from which loans may be made to enrolled Klamath Indians for industrial and agricultural assistance and the construction and improvement of homes (including the purchase of land and interests in land, building material, farming equipment, industrial equipment, trucks, livestock, feed, food, seed, tools, machinery, implements, household goods, bedding, clothing, or any other equipment or supplies necessary to enable such Indians to fit themselves for or to engage in farming, the livestock industry, or such other industrial or agricultural pursuits or avocations as will enable them to become self-supporting); for the educational advancement of such Indians; for financial assistance in cases of illness, death, or other emergency; for the maintenance and support of the aged, infirm, and incapacitated Klamath Indians; and for the repayment of reimbursable loans previously made to such Indians from tribal funds. For the establishment of such loan fund, the Secretary of the Interior shall immediately set aside the unexpended balance of any funds hereto fore appropriated or authorized to be used out of the tribal funds of the Klamath Indians for the establishment of reimbursable loan funds for industrial assistance or for any other purpose; and in addition thereto, out of any unobligated tribal funds, $100,000 shall be set aside for the fiscal year 1938 and $50,000 for each of the next 3 fiscal years. SEC. 3. The reimbursable loan fund provided for in section 2 hereof shall be administered, under and subject to such rules and regulations as the Secretary of the Interior may prescribe, by a loan board composed of Klamath Indians of not to exceed five members: Provided, That the expenses of administering such fund, including such per diem for members of the loan board as may be authorized by the Secretary of the Interior, shall be paid from such loan fund. After the fiscal year 1939 the aforesaid expenses of administration shall not exceed the amount received from service fees, surcharges, and interest paid in on loans. SEC. 4. For the purpose of providing adequate security for any loans made from the revolving reimbursable loan fund provided for in section 2 hereof, the Klamath Indians are hereby authorized to include in the securities offered therefor, in addition to any unrestricted real or personal property owned by them, any lands, interest in lands, rights, funds, future per-capita payments and other distributions of tribal assets, and other property, real, personal, or mixed, of any nature whatsoever, belonging to individual Klamath Indians, heretofore regarded or classed as trust or restricted Indian property. SEC. 5. All repayments made upon any loans made from the reimbursable loan fund herein provided for, all repayments made upon any loans made from reimbursable loan funds for industrial assistance or for other purposes heretofore established out of Klamath tribal funds, and all interest, surcharges, and service fees paid upon any such loans, shall be credited to the reimbursable loan fund herein provided for and shall become available for the purposes herein authorized. SEC. 6. The amounts which the Secretary of the Interior shall cause to be added to the capital and loan funds established at his direction under the provisions of Sections 1 and 2 of this Act during each fiscal year shall not exceed the amount of unobligated Klamath tribal funds on deposit in the Treasury of the United States available for that purpose. This bill provides for the creation of a capital reserve fund and a revolving loan fund, out of tribal moneys, for the benefit of the Klamath Indians of Oregon. The policy of the bill is to conserve tribal assets, and to make them available, through loans, to individual enrolled members of the Klamath tribes in such form as to enable such members to engage in individual enterprises that will enable them to become self-supporting. Under this bill, if enacted into law, the sum of $50,000 will be placed into the capital fund annually, out of the annual income of the Klamath tribes from the sale of timber. This fund, with annual augmentations will remain on deposit in the Treasury of the United States, and will draw interest in accordance with existing law. The annual interest accruals will be used to defray the cost of administration of the Klamath Reservation insofar as it is sufficient. The revolving loan fund, to be built up over a period of 3 years, will contain approximately $300,000 when fully established. This fund, under the administration of enrolled members of the Klamath tribes, subject to such rules and regulations as the Secretary of the Interior may prescribe for safeguarding the fund, will be lent to enrolled members of the Klamath tribes to enable them to purchase capital assets with which to earn their own living. Provision is also made for the support of the aged and infirm and the education of the young members of the tribes. This bill does not entail the expenditure of any public funds. The Secretary of the Interior recommends the enactment of this bill and the Bureau of the Budget advises that, as amended, it does not conflict with the financial program of the President. The Indians affected desire the enactment of this bill. This bill has received the unanimous vote of your committee. The report of the Secretary of the Interior follows: Hon. WILL ROGERS, INTERIOR DEPARTMENT, House of Representatives. MY DEAR MR. CHAIRMAN: Further reference is made to your request for a report on H. R. 5976, authorizing the establishment of a revolving loan fund for the Klamath Indians of Oregon and for other purposes. This bill is the cornerstone of a well-considered financial program proposed by the delegates of the Klamath Indian Tribe after a careful consideration of the financial position of the Klamath Indians as well as their present needs and desires. This bill apparently is intended as a companion to S. 2053, upon which I am submitting a report to the Committee on Indian Affairs of the Senate. In order that the two bills may be identical, I recommend that all after the enacting clause of H. R. 5976 be stricken out, and that the language contained in the enclosed draft be substituted therefor. The Klamath Indians have upon their reservation as a tribal asset, probably the finest stand of timber to be found anywhere in the United States. The sale of stumpage at the present time produces an annual net revenue of approximately $500,000, all of which, under existing law, is placed in the United States Treasury; there is now approximately $175,000 of Klamath Indian funds on deposit there. Due to the damage being caused by the inroads of the pine bark bettle and to further a beneficial forestry program, it will be necessary to increase the sale of stumpage in the next few years, so that a conservative estimate of the proceeds during the next 3 years would probably be about $600,000 a year. Realizing that the present heavy stand of timber on the Klamath Reservation is not inexhaustible and realizing also the effect of market fluctuations on the annual tribal income, the Klamath Indians, through their delegates, propose to create a capital reserve fund into which they plan to place annually the sum of $50,000, which will remain in the Treasury of the United States and draw interest as provided by law. The interest thus accumulating each year is to be applied insofar as it is sufficient to the payment of the expenses of administration of the Klamath Reservation in Oregon. The principal of this reserve fund will not be available for other uses except at the specific direction of Congress. Section 1 of the bill provides for the creation of this capital reserve fund. Section 2 and the remaining sections of the bill provide for the creation of and the machinery for the operation of a reimbursable loan fund to be available, under such rules and regulations as the Secretary of the Interior may prescribe, to enrolled Indians of the Klamath Reservation. The purposes for which this money may be loaned, upon proper security, to such Indians are divided into three main classes: 1. For industrial or agricultural assistance or the construction and improvement of homes to enable such Indians to become self-supporting. 2. To provide for the maintenance and support of the aged, infirm, or incapacitated members of the Klamath Reservation, and 3. To assist in the educational advancement of such Indians. Loans from this fund will also be available for financial assistance in case of illness, death, or other emergency and for the repayment of reimbursable loans previously had by such Indians from tribal funds. In order to create this fund immediately, the Secretary of the Interior is authorized and directed to set aside for this purpose $100,000 during the fiscal year 1938 from any unobligated funds from the Klamath Indians on deposit in the Treasury of the United States in addition to the unexpended balance of any reimbursable loan funds heretofore established out of the funds of the tribe. The Secretary of the Interior is directed to set aside an additional $50,000 for this purpose during each of the fiscal years 1939, 1940, and 1941. Section 2 of this bill, as outlined above, will serve to provide capital in sufficient amounts so that enrolled members of the Klamath Reservation may acquire capital assets which will enable them to achieve financial independence either through farming or industrial employment or through the benefits of an education. The provisions for the maintenance and support of the aged, infirm, or incapacitated members of the tribe will serve to give people in these classifications a decent standard of living during their declining years. Inasmuch as the revolving fund is to be created out of the assets of the Klamath Indians it will be in furtherance of the present policy of this Department to have the fund administered by the Indians themselves. Section 3 of the bill, therefore, provides for the creation of a loan board composed of members of the Klamath Indian Reservation, who will be in immediate charge and have direction of the operation of the fund under such rules and regulations as the Secretary of the Interior may prescribe. The remainder of section 3 provides for the payment of necessary expenses and per diem not to exceed, after the fiscal year 1939, the amount received from the service fees, surcharges, and interest paid in on loans. Section 4 of the bill defines the types of property that may be offered as security for any loans made from the reimbursable loan fund thus set up and authorizes the use of restricted or trust property and the pledge of future per-capita payments or other individual distributions including any payments which may be made in lieu of allotments from tribal assets for this purpose. Section 5 of the bill permits the use of repayments upon loans and the interest, service fees, and surcharges as well as the repayments, interest, service fees, and surcharges on any reimbursable loan funds previously created out of tribal assets for the purposes authorized in this bill. For the reasons given above, I am of the opinion that this bill marks a large forward step in the attitude of the Klamath Indians toward the proper conservation and use of their tribal income. It shows a desire to conserve tribal assets and to make them available in such form to the individual members of the Klamath Reservation as to enable them to become self-supporting. The Acting Director of the Bureau of the Budget, in commenting upon my proposed report on S. 2053, advised- While there would be no objection to the presentation of your proposed favorable report to the Committee, it seems to me that the first section of the bill should be amended to make it plain that the annual augmentation of the capital reserve fund in the amount of $50,000 is to be made from tribal funds, that the amount deposited in the capital reserve fund in any year shall not exceed the amount of tribal funds available for that purpose, and that the latter provision also be made applicable to the annual amount to be placed in the reimbursable loan fund under section 2 of the bill." The suggestions of the Budget Bureau have been incorporated as section 6 in the proposed substitute for H. R. 5976. If amended as suggested, I recommend that H. R. 5976 be enacted. Sincerely yours, |