UNEMPLOYMENT RELIEF

THURSDAY, JUNE 2, 1932

UNITED STATES SENATE,

COMMITTEE ON BANKING AND CURRENCY,

Washington, D. C.

The committee met, pursuant to call, at 10.30 a. m., in room 301 Senate Office Building, Senator Peter Norbeck presiding.

Present: Senators Norbeck (chairman), Goldsborough, Townsend, Walcott, Blaine, Carey, Watson, Couzens, Steiwer, Fletcher, Glass, Wagner, Barkley, Bulkley, Gore, Costigan, and Hull.

Present also: Senator Barbour, of New Jersey.

The CHAIRMAN. The committee will come to order. The committee was called together this morning for the purpose of a hearing on S. 4755 offered by Senators Wagner, Robinson of Arkansas, Pittman, Walsh of Montana, and Bulkley; and S. 4727 offered by Senator Barbour. The bills will be made a part of the record at this point. (The bills, S. 4755 and S. 4727, will be printed at this point.)

[S. 4755, Seventy-second Congress, first session]

A BILL To provide for grants and loans to the several States to aid in relieving unemployment, to facilitate the construction of self-liquidating projects, to provide for the construction of certain authorized Federal public-works projects, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) to aid in furnishing relief and work relief to the needy and distressed people residing in the several States and in relieving the hardship resulting from unemployment the Reconstruction Finance Corporation is authorized and empowered to make grants to the several Stares for such purposes out of the funds made available by the reconstruction finance corporation act, under the terms and conditions hereinafter set forth, and in an aggregate amount of not to exceed $300,000,000. Such amount shall be apportioned among the several States in the proportion which their population bears to the total population of the States of the United States according to the Fifteenth Decennial Census. Such apportionment shall be made by the corporation within ten days after the date of enactment of this act, and the corporation shall immediately certify to the governors of the several States the amount apportioned to each State. The amounts so apportioned to any State shall be available for payment to such State for the purposes of this section until the expiration of two years after the date of enactment of this act.

(b) The aggregate amount of the grants made to any State under this section shall not be in excess of the amount apportioned to such State. The amount of the grant or grants to each State shall be reimbursed to the Reconstruction Finance Corporation by making annual deductions, beginning with the fiscal year 1937, from moneys payable under regular apportionments made from future Federal grants in aid of the States for the construction of highways and rural post roads, of an amount equal to one-fifth of the share which such State would be entitled to receive under such apportionment, except for the provisions of this section, or of an amount equal to one-fifth of the grant or grants made pursuant to this section, whichever is the lesser, until the sum of such deductions shall equal the total amount of such grant or grants. Whenever any such

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deduction is made, the Secretary of the Treasury shall immediately pay to the Reconstruction Finance Corporation the amount so deducted.

(c) Any State making application for funds under this section shall, through its governor, certify the necessity for such funds. In any State having a State department of welfare or charities, such department shall administer the funds granted to the State pursuant to this section, except that in any State in which, in accordance with the laws of the State, there has been set up a special emergency organization for the administration of relief, such special organization may administer the funds so granted to such State: Provided, That in any State where no state-wide board of charities exists, or no special emergency organization has been set up, the amount allotted to such State shall be distributed by the joint action of the governor and the State board constituted for controlling the financial affairs of such State, if such board exists, or by the governor, if such board does not exist.

(d) The amount of any grant authorized under this section shall be paid to the State upon delivery by the State to the Reconstruction Finance Corporation of a receipt for such amount, which receipt shall state that the grant is accepted subject to the terms of this section.

SEC. 2. (a) The Reconstruction Finance Corporation is further authorized and empowered to make loans (1) to States, municipalities, and political subdivisions of States, public or quasi-public corporations, and public or quasipublic municipal instrumentalities of one or more States to aid in financing projects authorized under State or municipal law and which are self-liquidating in character; (2) to private limited-dividend corporations to aid in financing housing, slum clearance, or other similar projects which are self-liquidating in character; and (3) to private corporations to aid in carrying out the construction of bridges, tunnels, docks, viaducts, waterworks, and similar projects devoted to public use and which are self-liquidating in character. The aggregate amount of such loans shall not exceed $1,460,000,000. Such loans shall be made under such terms and conditions, with such security, and in such amounts and for such periods as the Reconstruction Finance Corporation may prescribe. For the purposes of this subdivision a project shall be deemed to be self-liquidating if such project may be made self-supporting and financially solvent and if the construction cost thereof will be returned within a reasonable period by means of tolls, fees, rents, or other charges.

(b) The Reconstruction Finance Corporation is authorized and directed to advance to the Secretary of Agriculture, in addition to the amounts allocated and made available to him by section 2 of the Reconstruction Finance Corporation Act, not to exceed $40,000,000, of the amounts made available under section 3 of this act, for the purpose of financing sales of agricultural products in the markets of foreign countries in which such sales can not be financed in the normal course of commerce, but no such sales shall be financed by the Secretary of Agriculture if, in his judgment, such sales will affect adversely the world markets for such products.

(c) All amounts received by the corporation in repayment of any loan or advance under the provisions of this section shall be used exclusively for the purpose of retiring its notes, bonds, debentures, and other such obligations, the proceeds of which are made available for carrying out the provisions of this section. SEC. 3. (a) For the purpose of providing funds for carrying out the provisions of section 2 of this act the Reconstruction Finance Corporation is authorized and empowered to issue its notes, bonds, debentures, or other such obligations in an aggregate amount of not to exceed $1,500,000,000. Except as to dates of maturity, which may be fixed by the corporation at not to exceed twenty-five years, such notes, bonds, debentures, or other obligations shall, so far as practicable, be issued in the same manner and be subject to the same terms and conditions as the notes, bonds, debentures, or other such obligations issued pursuant to section 9 of the Reconstruction Finance Corporation act.

(b) No loan shall be made by the Reconstruction Finance Corporation under section 2 of this act to any financial institution, corporation, railroad, or other association or organization of a class to which loans may be made under the Reconstruction Finance Corporation act.

(c) The Reconstruction Finance Corporation shall submit monthly to the President and to the Senate and the House of Representatives (or the Secretary of the Senate and the Clerk of the House of Representatives, if those bodies are not in session) a report of its activities and expenditures under sections 1 and 2 of this act, together with a statement showing the grants, loans, and advances approved by it. Such reports shall, when submitted, be printed as public documents.

SEC. 4. (a) For the purpose of providing for emergency construction of certain authorized public works with a view to increasing employment and carrying out the policy declared in the employment stabilization act of 1931, there is hereby appropriated, from the emergency construction fund hereinafter created the sum of $500,000,000, which shall be allocated as follows:

(1) For expenditure in emergency construction on the Federal-aid highway system, $120,000,000. Such sum shall be apportioned by the Secretary of Agriculture to the several States by the method provided in section 21 of the Federal highway act, as amended and supplemented (U. S. C., title 23, sec. 21). The amounts apportioned to the States shall be available as a temporary advance of funds to meet the provisions of such act as to State funds. The amount apportioned to any State under this subdivision may be used to match the regular annual Federal-aid apportionments made to such State (including the one for the fiscal year ending June 30, 1933), and when so used such amount shall be available for expenditure in paying the share of such State in the cost of Federalaid projects. No amounts apportioned under this subdivision shall be advanced except for work on the Federal-aid highway system performed before July 1, 1933: Provided, That the amounts so advanced shall be reimbursed to the Federal Government over a period of ten years, commencing with the fiscal year 1938, by making annual deductions from moneys payable under regular apportionments made from future authorizations for carrying out the provisions of such act, as amended and supplemented: Provided further, That all contracts involving the expenditure of such amounts shall contain provisions establishing minimum rates of wages, to be predetermined by the State highway department, which contractors shall pay to skilled and unskilled labor, and such minimum rates shall be stated in the invitation for bids and shall be included in proposals or bids for the work: And provided further, That in the expenditure of such amounts, the limitations upon highway construction, reconstruction, and bridges within municipalities contained in section 4 of the act approved May 21, 1928 (U. S. C., Supp. V, title 23, sec. 6b), and the limitations contained in the Federal highway act, as amended and supplemented, upon payments per mile which may be made from Federal funds, shall not apply.

(2) For expenditure in emergency construction on public roads during the fiscal year ending June 30, 1933, $16,000,000, as follows: (A) For the construction and improvement of national-forest highways, $5,000,000; (B) for the construction and maintenance of roads, trails, bridges, fire lanes, and so forth, including the same objects specified under the heading "Improvement of National Forests in the Agricultural appropriation act of the fiscal year ending June 30, 1932, approved February 23, 1931 (46 Stat. 1242), $5,000,000; (C) for the construction, reconstruction, and improvement of roads and trails, inclusive of necessary bridges, in the national parks and national monuments under the jurisdiction of the Department of the Interior, including national parks authorized to be established under the act of May 22, 1926 (U. S. C., title 16, sec. 403), and national park and monument approach roads authorized by the Act of January 31, 1931 (46 Stat. 1053), $3,000,000; (D) for construction and improvement of Indian reservation roads under the provisions of the Act approved May 26, 1928 (U. S. C., Supp. V, title 25, sec. 318a), $1,000,000; and (E) for the survey, construction, reconstruction, and maintenance of main roads through unappropriated or unreserved public lands, nontaxable Indian lands, or other Federal reservations other than the forest reservations, under the provisions of the act approved June 24, 1930 (U. S. C., Supp. V, title 23, sec. 3), $2,000,000. The Secretary of Agriculture and the Secretary of the Interior, respectively, are authorized to make rules and regulations for carrying out the foregoing provisions of this section with a view to providing the maximum employment of local labor consistent with reasonable economy of construction.

(3) For the prosecution of river and harbor projects heretofore authorized, $30,000,000.

(4) For the prosecution of flood-control projects heretofore authorized, $15,500,000.

(5) For the continuation of construction of the Hoover Dam and incidental works, as authorized by the Boulder Canyon project act, approved December 21, 1928 (U. S. C., Supp. V, title 43, ch. 12A), $10,000,000.

(6) For expenditure by the Department of Commerce for air navigation facilities, including equipment; and for the construction of lighthouses, vessels, and other construction projects of the Lighthouse Service, Department of Commerce, heretofore authorized, $7,500,000.