DISTRIBUTION BY TYPE OF PROJECT

On page 28 there is a table that shows this program by type of project. The significant thing in this table is that this break-down by type is the result of the request from the local people and the States. We do not influence them and say, "You cannot have money for this kind of project, or you should have it for another." But it shows that we have stayed away from highways, roads, and streets mainly by our own regulations. The Public Roads Administration through the Federal-aid highway program and the States' highway program should take care of most of such projects. The roads, streets and highways, for which we have made advances are mainly city streets, some city bridges and some county work that is not within the Federal-aid program. It shows that the big bulk of this problem is in sewer, water, and sanitation, as well as schools and educational facilities. Those are the kinds of projects that the local communities can finance. As I said before, they can finance them through revenue bonds and through general obligation bonds.

The school programs generally are handled through general obligation bonds. There has been a hold-up on the actual construction of schools because of the shortage of material for housing, but there is a tremendous demand for additional school facilities. Most of the communities have the bonding power to float bonds for that work.

On page 30 are shown the projects on which plan preparation has actually been completed, and I think during the month of May we will probably complete plans on an addditional 100 or so projects. This number will increase each month.

We were somewhat apprehensive of the fact that perhaps the completion of plans was being retarded by requiring too many things in the completed plans. However, I made a personal review of that in a couple of our field offices. I found that when the plans are completed by an architect or an engineer and the communities send them into us for final payment, we have to tell them many times that additional information is needed. We sometimes have to tell them that they have not completed the take-off of the quantities, or they have not completed the plans to the point where they could actually let a contract. Most of them welcome our suggestions in that regard, and now we believe that the plans will be complete and ready for use.

Page 32 shows the break-down of the applications received; the advances approved, and those in review. Whenever we start running out of money, the volume of applications begins to drop off, but on an average, we have been getting applications at the rate of $5,000,000 per month.

We think that the job that we have ahead for the next year would require that we have available at least $50,000,000.

We arrived at that in this way: We soon discovered when we started this program that we had to find out what the local communities were planning on their own. We found, after a very careful review, that there had been plans completed for about $960,000,000 of public works. But 40 percent of that was in New York State alone, and of that about half of it was in the city of New York. We found that in the smaller communities where they did not have architects and engineers on their staffs, they were still holding back. We found when the war was over that architects and engineers came back to the communities and they were beginning to do some preliminary planning on

their own. We made a review of that and found that they had about $3,500,000,000 to $4,000,000,000 of public works on which they, themselves, were starting to make some preliminary plans. Their difficulty was in getting them completed to a point of letting contracts.

GOAL OF THE PROGRAM

We think that we should have in this country a reserve of completely planned public works of about $5,000,000,000. That is the goal for which we have been striving for some time.

The highway program will take care of about $1,000,000,000 of that a year. That leaves $4,000,000,000; and probably $500,000,000 will be Federal public works, in which we have no part. We think that if we could get $50,000,000 to take care of getting another $1,500,000,000 of State and local public works completely planned, and put it into all of the communities throughout the country, then they will be ready, when men and materials become available, to start construction on about 31⁄2 billion dollars of State and local public works the normal annual rate.

We are not encouraging them to start construction at this time. As a matter of fact, I think there are only certain kinds of public works that should be constructed at this stage. Private construction has taken most of the men and materials. Most of the available materials and skilled mechanics are necessary for housing and repair work on commercial and industrial plants. That should not be interfered with.

On the other hand, there are some kinds of public works that will need to move forward in connection with the housing program. That is mainly for sewer, water, and school projects.

I think these records show that the local people recognize that and they are getting ready to build those types of public works with their own funds, because they are the kind that they will have to start constructing first.

ABILITY OF LOCAL COMMUNITIES, ETC., TO FINANCE PUBLIC

WORKS

Mr. CANNON. You think that they will require Federal assistance and cooperation, or do you not think that if they were turned loose as soon as men and material are available, they could go ahead without Federal cooperation?

Mr. FIELD. I think that they will go ahead because of the fact that they have the capacity. I think that the Federal Government during the war has taken on a big burden itself. The local and State governments are in better shape financially than they have been in a long time. We know that so far as the State government's projects are concerned, if the money is not already appropriated and if their legislatures meet next January, they will be able to appropriate, because they have the capacity.

EFFECT OF REDUCTION IN PROGRAM

Mr. CANNON. In those circumstances, do you not think we could afford to taper off this program?

Mr. FIELD. We think the planning part of it should not be tapered off, for various reasons. One of them is that they are not going to

be able to go ahead with that construction. When they cannot go ahead with their construction, they do not get the local cash to go ahead with their planning. When they are going ahead with construction, they are selling bonds, starting work, and they are having the cash in their own local communities to move ahead with.

At that time private engineers and architects will do a certain amount of this planning work on the cuff. But here you have a condition where the Federal Government is saying to these communities, "You cannot go ahead, with this construction. We need the materials and the manpower for private housing." But I think that we ought to encourage them to complete the plans and be ready for construction as soon as materials and labor are available.

Where a community knows that it is going to build some schools and they have the bonding capacity, I do not think we should tell them to go and sell bonds now but then not permit them to start construction for a year or two. It would cost them money during that period for interest on their bonds. We should be able to tell them that we will give them an advance to complete plans during this period, and then when they can get the manpower and the materials to start construction and then pay us back.

Engineers and architects who normally are engaged in local public works, do not get the money that they normally would get for supervision of construction because the construction of that kind of work has not been going forward. Ordinarilly this provides them an opportunity to get credit to complete the plans.

Mr. CANNON. Now, the money up to this time has been allotted, under the law, to States. It has been allotted in accordance with the statutes.

Mr. FIELD. That is right.

Mr. CANNON. That being true, there would be no State that would suffer any disadvantage, any individual disadvantage, from our failure to appropriate this $50,000,000 if the committee should decide that in view of the condition of the country it is not advisable to make the appropriation of $50,000,000 for this purpose at this time.

Mr. FIELD. There would be no discrimination, that is true. But I think that you would be telling them that they cannot go ahead with their plan preparation which up to this time has been encouraged by the Federal Government. Furthermore, the authorizing legislation approved by Congress only lasts until June 30, 1947.

The State and local communities are expecting this appropriation or some appropriation, to be made within that time, and I think it would be unfortunate to stop this program now.

Mr. CANNON. You said just now that you had ahead of you $1,500,000 of construction. It was my understanding that you were making an estimate now for a shelf of $2,500,000,000.

Mr. FIELD. $3,500,000,000.

Mr. CANNON. If that is true, it is reasonable to suppose that they gave priority to the most urgently needed projects, and the work that you now have under way and started is the most urgently needed. How much is there under construction at this time-the total?

Mr. FIELD. The projects for which we have actually advanced money provides for public works costing $1,000,000,000, but the most urgent projects are not necessarily the ones that are planned.

PROJECT TO BE PART OF OVER-ALL PLAN

There is another requirement in our law that before we make an advance to plan an individual project, we have to make sure that that particular project fits into the over-all plan of the community. In some communities they have not made requests to draw the plans for the individual project, until they could get their over-all plans completed.

An example of that is in Omaha, Nebr., where over the last 6 months they have been developing an over-all plan for their city. They have finally gotten that approved. They have had some general meetings of their council, and I think there was even a vote of the people. They did not want to plan any individual project until they had an over-all plan.

Now, they are coming to us ready to plan individual projects that fit into this over-all plan.

Mr. CANNON. It seems to me that we have had a statement here, or that we could make a deduction from your tables submitted, that you have now provided for 40 percent of your total program at this time and that you have ahead of you 60 percent.

Mr. FIELD. That is about right.

EFFECT OF DELAYING PROGRAM

Mr. CANNON. With this 40 percent under construction and already planned for, could you not deter the 60 percent for a while and await changed conditions? The whole country is in a state of flux. Many of these things have not yet sufficiently crystallized as to permit a permanent plan. Could you not await changing conditions to just see what will turn up?

Mr. FIELD. I am afraid that if you do that you are going to find a year from now, or a year and a half from now, that you are going to get a tremendous pressure on the Congress for grants for construction. But I think if you will let us go forward with this program and get the things planned for which they can finance construction on an advance that they will pay back, you will be in a much better position when the pressure comes for construction to say, "Here is a program as completely planned as possible that you can finance yourselves."

If you drop this program now, you may find a year and a half from now that you are in the other position. I think it would be money well spent and an insurance of the Federal Government that there is in this country a well-planned program of State and local public works that they can finance themselves.

ADMINISTRATIVE EXPENSES

Mr. CANNON. You have set up here 3 percent of what you have for administrative expenses, on page 8. I note that you have there, apparently, an unallotted balance as of April 30, 1946, of $199,762. Will that carry you through?

Mr. FIELD. Through June 30.

Mr. CANNON. To the end of the fiscal year?

Mr. FIELD. Yes, sir; this fiscal year. You remember when we started this program, we were also operating the Lanham Act program, and the administrative organization of our Bureau operated

as a unit. Last January, when we were up here to discuss recission of Lanham Act money, you asked us to put our over-all organization on a fiscal-year basis. We have done that, and we have in the back of this presentation a statement showing the complete organization of the Bureau. We estimated the staff that would be devoting

Mr. CANNON. We will come to that presently. Now, you go beyond this 3 percent for administrative expenses in the additional amount that you are requesting. The amount that you are requesting is $1,690,000. That is 3.38 percent. Just how do you account for that?

Mr. FIELD. The reason is that it was not estimated on a percentage basis-you will recall that in the first appropriation for planning that came out of this committee, you gave us 4 percent for administration. But, when we got to the Senate, we advised them, because of the fact we had people who were doing both Lanham Act and planning work, that during this fiscal year we would try to get along on the planning for 3 percent and, when we came to the next fiscal year, we would justify our administrative staff of what we actually needed. We think this is the minimum amount of our total administrative costs that we will need in the next fiscal year for the planning program.

In some cases we have one engineer engaged in a program of completing Lanham Act, disposing of property and also helping in the planning program. We have to make estimates of how much time is spent on each program. This estimate is based on actual time records that were kept during this last fiscal year. While we have been operating Lanham Act construction and services, planning work and the Virgin Islands program, we have kept time records and, on the basis of them, we divided up the administrative cost of our Bureau as shown here.

ADVANTAGES OF ADVANCES TO LOCAL COMMITTEES

Mr. RABAUT. I want to ask one question and maybe two. Under ordinary circumstances, when a municipality or subdivision of Government places a bond issue, as soon as they have placed the bond issue for a given improvement or proposed improvement, is the planing money included in the bond issue?

Mr. FIELD. That is right.

Mr. RABAUT. So that is the reason, then, you ask for this money; that is one of the reasons why you talk about these loans to these municipalities; because otherwise they would have to float a bond issue to get money even to do this planning?

Mr. FIELD. That is right.

Mr. RABAUT. In other words, if they do not get this money they are held up or have to have some new basic State law, or something, to have the right to do the planning?

Mr. FIELD. That is right.

Mr. RABAUT. Which would hold up the whole program. Is that general, or is that only in some sections of the country?

Mr. FIELD. There are about five States that have made some State funds available. In Michigan they made some State funds available on a grant basis for half of the cost of planning. In those cases, the advance we make is only what they cannot supply themselves, and it may be half of the cost, or may be a third of the cost.