Secretary MILLS. I have not come to the buildings yet. I am still dealing with the $45,500,000 for river and harbor and floodcontrol projects.

SENATOR BLAINE. I believe you said something about "this item." What item do you refer to?

Secretary MILLS. I think Senator Couzens asked what item I was talking about. This has reference to $45,500,000 for river and harbor and flood-control projects.

Senator WAGNER. Were you talking about what States it will be spent in?

Secretary MILL. Yes.

Senator WAGNER. Well, I have viewed this from a national standpoint, from the effect throughout the country. I do not think we can afford in a crisis like this to be provincial upon this question.

Secretary MILLS. This is not a question of being provincial, but it is very important to see what it will do in the matter of unemployment in the centers of unemployment and New York happens to be one of the centers of unemployment. It would give work to 985 men in the State of New York, just as your other proposal, the road proposal, would give 1,683 men work there. So that here with an appropriation of $165,000,000 you will be giving work in one of the biggest centers of unemployment to just 2,500 men.

Senator WAGNER. But to how many indirectly? Have you any means of knowing that?

Secretary MILLS. I have figures when it comes to public buildings because that is a matter under my jurisdiction. But in the matter of public road figures, and rivers and harbors, you ought to go to the departments that make up the figures. I am not prepared to be crossexamined on those figures.

Senator BLAINE. If you will permit an interruption, Mr. Secretary, I will say that Mr. McDonald testified that for every man employed directly you should multiply him by three in order to ascertain the total number of men employed directly and indirectly; but that those employed indirectly went back so far, as to the building of the machinery that is used in road making and for road materials

The CHAIRMAN (interposing). Or the manufacture of cement.

Senator BLAINE. Yes; for the manufacture of cement, and for transportation, building of railroads, cars, and so forth, that it meant three for one.

Secretary MILLS. Very well. If you multiply it by three, taking the matter of roads, you are going to put approximately one hundred thousand men to work by an expenditure of $120,000,000.

Senator BLAINE. I am merely telling you what Mr. McDonald said. Secretary MILLS. And I am willing to accept Mr. McDonald's figures, and will assume those figures to be correct. So that instead of taking the figure 33,193 men you will get a figure of approximately 100,000 men. But if you question these other figures I have given you, I think you ought to call General Pillsbury and get him to explain his figures.

The third major item is $100,000,000 for public-building projects, none of which have been specifically authorized to date. Of this amount, taking into consideration the time required for acquiring the sites, preparing the plans, and letting the contracts, it is estimated that $24,500,000 could be expended during the fiscal year 1933, of which $11,500,000 would be for land and $13,000,000 for construction.

So

It is estimated that the $13,000,000 for construction will provide direct employment for 2,600 men, and indirectly to 7,800 men. that an appropriation of $100,000,000 will provide employment for just 10,400 men on public buildings. And these figures were made up in the Treasury Department. I am prepared to stand on them.

Senator BLAINE. That does not include post-office facilities that are under lease where the lease expires or there is an option to purchase by July 1, 1934. I think the results of those is four and threequarters millions of dollars in round numbers. So that that would be a sort of self-liquidating proposition.

Secretary MILLS. Well, to the extent of that your rent exceeds your cost of maintenance and operation and fixed charges, that is a saving.

Senator BLAINE. Well, the rent runs a trifle over 12 per cent. So that you could build those buildings in the saving of rentals over a period of 12 years.

Secretary MILLS. All that I am pointing out is as to a definite appropriation of $100,000,000, and this is the unemployment relief section.

Senator BLAINE. Immediately, you mean.

Secretary MILLS. In the course of the next 12 months that would provide work for 10,400 men at the maximum.

Senator BLAINE. But if you include the post office leases on buildings that are under lease, and construct these buildings within the year, it would take care of a much larger amount.

Secretary MILLS. Well, I should prefer that you would ask Mr. Heath and Mr. Martin, who are here, as to that matter.

To summarize appropriations aggregating $265,000,000 will result in the direct employment of 53,943 men during the next fiscal year. These figures prove beyond question that this method of attack is wholly ineffective in solving the unemployment problem. This factor alone is sufficient to warrant the committee in eliminating the provision.

It becomes all the more necessary when you consider that an unbalanced Budget and the abandonment of sound financial practices will cause a further shock to public confidence, tend to retard business recovery, and so not only prevent reemployment on a large scale, but very possibly add to the number of those already unemployed. There is much greater hope not only of relief to unemployment but of actually stimulating a business revival, through the loans provided for under section 2 (a) for so-called projects of a self-liquidating character, though on the one hand the list of projects could be advantageously added to, and on the other the protective features need strengthening. I should like at the appropriate time to discuss the details of this provision with the committee.

Turning, now, to the provision for loaning $300,000,000 to the States for relief purposes, I approve heartily of the principle that the Federal Government should create something in the nature of an emergency fund that can be loaned to a State that has exhausted its own resources and actually needs funds for the relief of destitution. Senator COUZENS. Might I ask a question there?

Secretary MILLS. Might I complete this first? I am almost through.

Senator COUZENS. All right.

Senator GORE. I should like to ask

Secretary MILLS (continuing). The section as drafted, apportioning $300,000,000 among the several States in proportion to their population and not in accordance either with their needs or their ability to meet those needs, is not only a direct invitation to all States to apply for Federal funds, but creates such a rigid process of distribution as to insure the grant of Federal funds to States that do not need them at all and in an amount unrelated to their needs or

resources.

The only limitation is the certification by the governor as to the necessity for such funds. This does not seem to be adequate. Certain definite tests should be specifically provided in the law adequate to demonstrate that the State needs the funds and has exhausted its own available resources before it shall be permitted to turn to the Federal Government for relief. Whether the State has complied with these requirements should be determined by duly authorized agents of the Federal Government. I know of no conceivable reason why great, rich States like New York and Pennsylvania should receive a grant from the Federal Treasury or be invited to accept one. They are well able to take care of their own.

The bill should be so drafted as to provide for an emergency fund for the States that need it; not for a gratuitous distribution to all States on a per capita basis irrespective of need or resources.

I shall be glad, if the committee so desires, to make suggestions as to possible amendments to this section.

In conclusion I find myself in agreement with much in this measure, subject to amendments along the lines I have suggested. I am, however, very definitely opposed to the public-works proposal as ineffective and inconsistent with sound financial principles.

Estimated distribution of appropriation of $45,500,000 for river and harbor and floodcontrol works

Estimated distribution of appropriation of $45,500,000 for river and harbor and floodcontrol works-Continued

Senator GLASS. Mr. Secretary, assuming that all of the States would apply for this aid, upon what basis would you apportion a distribution of the fund?

Secretary MILLS. I deny the fact that I would ever permit all of the States to so apply. There may be

Senator GLASS (interposing). I am not asking about what you would permit. I am asking upon the assumption that the governors of all the States would make application, then upon what basis would you make a distribution of the fund? You understand that I am opposed to the whole business. I don't think a State has a right to exist that can not take care of its own interests. I should be ashamed of my State, Virginia, if I thought it could not do it.

Secretary MILLS. Ánd I would be ashamed likewise of New York if I were faced with the spectacle of the governor coming down here, hat in hand.

Senator GLASS. But you are criticizing the propositions contained in this bill, and so far as I am concerned, I would reject it all. But

I am asking you the question upon the assumption that all of the States would apply, then upon what basis would you make a distribution of the fund?

Secretary MILLS. I am not making any such assumption, and I say that I would never permit it.

Senator GLASS. But how could you prevent it?

Secretary MILLS. Oh, of course, you could not prevent them from applying, but it is my thought that no State should get one penny of Federal funds unless it were shown that it had reached a point where its own resources were no longer adequate.

Senator GLASS. I could draft for you in five minutes a provision where no State could get any of the funds. But that is not what we are dealing with here in this bill.

Senator WAGNER. I am trying to relieve the situation of destitution. My bill was not drafted with the purpose of preventing the destitute from getting something. My bill was drafted with the purpose of giving relief to the destitute where the facts justify it. Secretary MILLS. Well then, if this is

Senator WAGNER (continuing). And that is where we are working toward opposite objectives. I am trying to alleviate destitution, and you are trying to prevent that being done.

Secretary MILLS. Oh, no. But, Mr. Chairman, if this provision is intended to appropriate $300,000,000 and give it out to all of the States on the basis of population irrespective of their resources, and irrespective of their needs, then I will say that I am unqualifiedly opposed to it.

Senator WAGNER. That is not my bill, and you know that that is not this bill.

Secretary MILLS. That is the net effect of the bill, becauseSenator WAGNER (interposing). Must we not trust the men selected by the people of the States to represent them? Have we got to the point where we can not trust every public official? Can not we rely upon the honor of a governor not to certify that his State needs the money for the destitute unless that is an actual fact? Now, I will say that I have that much confidence and faith in the integrity of the governors of our States.

Secretary MILLS. I am not questioning the integrity of the governors of the States.

Senator BULKLEY. I should like to ask

Secretary MILLS (continuing). May I answer the Senator from New York?

Senator BULKLEY. Certainly.

Secretary MILLS. That is not the point, Senator Wagner. But when you create an appropriation based on population and get away from the standpoint of need, get away from the standpoint of the resources of a State, and then simply ask the governor to certify as to the necessity of his State for funds; why, there isn't a governor in the Union to-day who could not do full justice to his conscience and say they need funds in his State. Of course they need funds. But the question is, whether they are going to get those funds from their own people or are going to the Federal Government for them. New York State needs funds and you and I know that, Senator Wagner. They need funds for relief work to-day. But the question is whether the Governor of the State of New York is going to call the State legislature into session and ask additional income taxes let us say, for