per laborer, providing you spent the $100,000,000. Now you say it represents only about $13,000,000. Secretary MILLS. $24,500,000. You can not build a building if you do not own the site. Senator WAGNER. An expenditure for actual construction of $13,000,000? Secretary MILLS. The land happens to be very important. You can not build a building in the air. You have to acquire that land, and some of the $100,000,000 is going for land. Senator WAGNER. I am talking about Secretary MILLS. I am talking about the actual number of men that would be put to work under your bill to relieve unemployment, and my recollection is that out of the $220,000,000 that you propose to appropriate, you would give work to just 45,000 men directly, and, in the case of the buildings, indirectly. Senator WAGNER. Mr. Secretary, I am sure your recollection is inaccurate, because you left the committee with the impression— and some of the members discussed it with me afterwards that the number of men you cited, 10,000 men, represented an expenditure of $100,000,000. We were wondering how that was possible. Now, you say it represents an expenditure of $13,000,000. Secretary MILLS. It represents an appropriation of $100,000,000. Senator WAGNER. That is an entirely different proposition. You are begging the question. Secretary MILLS. I am not begging the question. The record will speak for itself, of course, but those are the plain facts. The bill is to relieve unemployment. Senator WAGNER. Yes. Secretary MILLS. All right. The test is, how many men are you going to put to work in the next year? That is the real point. I say that under your $100,000,000 appropriation for public buildings, directly and indirectly a little over 10,000 men are going to get work during the next 12 months. Senator WAGNER. Is that your only complaint that the appropriation is not high enough to put more men to work? Secretary MILLS. My complaint is that it does not solve the unemployment problem. The CHAIRMAN. I think the Secretary should go further than that. If it were all used for labor, how many men would be employed? Secretary MILLS. It is not all used for labor. The CHAIRMAN. How much of it is? Let us get more light on that. Secretary MILLS. I can give you exact figures. After you have gone through the process of selecting the sites, condemning the land, satisfying members of Congress, and satisfying the dissatisfied bidders through the Comptroller General, and gone through all the processes necessary to get a public building started by the Government, we can spend, during the fiscal year 1933, out of that $100,000,000, $24,500,000, of which $11,500,000 will be for land, approximately, and $13,000,000 for construction; and of the $13,000,000 for construction, employment will be given to a little over 10,000 men, directly and indirectly. That is on public buildings. Senate bill 4755-estimated expenditure thereunder for fiscal year 1933 SELECTED PROJECTS Group I. Projects where land is owned (47): Total limits of cost-- Group II. Projects where additional land only is required (68): Estimated cost of land__ Estimated cost of construction_. $28, 015, 000 $3, 634, 100 11, 746, 900 15, 381, 000 56, 604, 000 Total limits of cost__ Group III. Projects where new sites will be required (400): 100, 000, 000 TIME REQUIRED TO START Groups I and II.-All projects in these two categories would require special planning. An average of seven months would be the time required to place all these projects under contract provided private architects could complete plans and specifications within five months. Two months would be necessary for selecting architects, checking of drawings, advertising of work, awarding contract, and furnishing satisfactory bond. An average of 15 months has been used as the time required to complete construction as some of the projects are very large. Inasmuch as no payment is made during first month of construction, there would remain but 4 pay months during the fiscal year 1933, and since 4 months is approximately one-fourth of the average time of 15 months the expenditure for construction during the year would be about 25 per cent of $39,761,900, which is the amount involved. Expenditure for land under, (2) would approximate $3,634,000. Group III.-Beginning with the second month after legislation is obtained it is estimated that 30 sites per month could be decided and payments made for 240 sites during the fiscal year 1933. Using 20 per cent as the part of the limit of cost for land the probable expenditure for land would be $6,600,000-20 per cent of $33,000,000, which is three-fifths of $56,000,000, the estimated total for 400 site projects. Each 30 sites would, therefore, release for construction about $3,300,000 which is one-eighth of $26,400,000 available for construction for 240 projects. Using five months as the time required to get work started after site has been selected the following shows pay months for each 30 sites selected. EXAMPLE August, 1932, 30 sites selected. March-June, 1933, 4 months payment on average 12 months job-one-third of $3,300,000, or $1,100,000. The second 30 sites would show 3 months' payment, or one-fourth of $3,300,000, which is $825,000; the third group 2 months, or one-sixth, or $550,000, and the fourth group one pay month, or one-half, or $275,000. 1 Under miscellaneous arbitrary allowance has been made for expenditures for several costly sites which. could be acquired during year in addition to the 240 sites under Group 3. Also $250,000 is the arbitrary allowance for additional expenditures which might be possible through adaptation of standardized plans for a limited number of cases. Senator FLETCHER. In those cases sites have already been obtained.. I do not think there is any need to buy sites. Secretary MILLS. It is taking that into consideration. I asked the architect's office to work out for me the amount that could actually be expended, provided $100,000,000 was appropriated according to the terms of the Wagner bill. That is not guesswork. They have had long experience in determining the amount that actually goes into labor, and those are actual, detailed figures which they will be prepared to submit to you. Senator BULKLEY. Have you submitted any of that detail? Senator BULKLEY. I think we had better ask for it. Secretary MILLS. I had both Mr. Heath and Mr. Martin here the other day, ready to testify, but they were not questioned. The CHAIRMAN. I did not know they were here ready to testify on those matters. A number of inquiries came up at that morning meeting. Secretary MILLS. Senator, that was probably my fault, or my mistake in not telling you they were here. I should have done so. But those are the figures. Senator WAGNER. Mr. Secretary, you spoke about the time lost. in condemnation. As a matter of fact, you do not have to wait a minute for condemnation to acquire a site. The moment you decide to take a certain site you can file your declaration and the property becomes the property of the United States Government. Then you proceed Secretary MILLS. You have to get trained Post Office inspectors to go down and select the sites— Senator WAGNER. I understand. Secretary MILLS. You have all the arguments with the local popu-lation as to the site. When you get through with that you have all the arguments with Members of Congress who think they ought to have been consulted in selecting the site. You have to draw your plans. You have to ask for bids. When the bids are in the next to low bidder always finds that you have done something hideously unjust, and then it has to be referred to the Comptroller General. Taking all those factors into consideration, based on our experience, these are the figures given me by the architect's office. They have no incentive whatsoever to give false figures. Senator WAGNER. In order to relieve unemployment you could not expedite that work? Secretary MILLS. That is under the assumption that it is expedited. Senator WAGNER. Can you tell me this Secretary MILLS. Even under the extraordinary powers granted in the Garner bill-and I have not the figures before me, but he appro-. priated a great deal more than you did, and mentioned the projects— even then the relief to unemployment was insignificant. Senator WAGNER. Your idea is that if we gave that to a private individual to build, he would put more men to work than the Government? Secretary MILLS. No; not at all. Senator WAGNER. You are advocating private construction. Secretary MILLS. Because there is so much more of it. We spend a great deal of money of the United States Government, but if you consider the total income of the people of the United States it is a very small amount. If you drop three or four hundred million dollars into this huge aggregate which we are spending to-dayprobably sixty billions a year-your three or four hundred millions disappears. What you have to do to get real relief— Senator WAGNER. The alternative is nothing. Secretary MILLS. No; the alternative is not nothing. The real objective is to start the economic machine going, so that you can really give employment to these seven or eight million men. You are talking in terms of 10,000, 20,000, and 40,000. I am talking in terms of getting these millions back to work. Senator WAGNER. All right. Tell us how you are going to do it. Tell us the particular industries to be financed by the Government to begin these capital expenditures and put these people to work. Senator Bulkley has asked you for a list, and I have asked you for a list. It is easy enough to make general statements. Secretary MILLS. The general statements happen to be backed up by pretty substantial figures. Senator WAGNER. The reason our factories are not going is that there is no purchasing power among wage earners, to buy goods. Secretary MILLS. Why isn't there? Senator WAGNER. Because they are not working. Secretary MILLS. What are you going to do? Senator WAGNER. I am trying to do something to put them to work. You are not cooperating. Secretary MILLS. I am trying to do more. Senator WAGNER. I will go your way if you will show us the projects. All we have here is indefinite statements. Secretary MILLS. All right. You passed the Reconstruction Finance Corporation bill to help banks. You did not ask us to name the banks that needed money. We did not know. Senator WAGNER. We know the situation. Secretary MILLS. You know this situation: There are 8,000,000 unemployed. Senator WAGNER. Bring us the particular individuals who need credit and who can not get credit now. Secretary MILLS. I can tell you. Practically no industry can get long-term credit right now. There is no bond market. Senator FLETCHER. The banks tell us, Mr. Secretary, that they have plenty of money to loan, and they are anxious to loan money, but they do not find good security. They do not find any enterprise that wants to start up that can show an earning capacity, and they can not find safe loans. Secretary MILLS. Senator, the banks do not usually finance capital improvements. The banks finance the current needs of an industry. They do not loan them money to put up buildings. That is obtained, as a rule, through the sale of bonds, or through depreciation accruals, or from profits. The banks do not ordinarily finance capital improvements. Senator GOLDSBOROUGH. That is a seasonal operation, is it not? Secretary MILLS. Yes. Senator FLETCHER. Would you authorize the Reconstruction Finance Corporation to make loans to individuals to put up plants, erect buildings, and equip themselves? If you did so, they would go into the regular loaning business. Secretary MILLS. I want to break the ice, first, by loaning directly to industry so that some one will spend money, let us say, on replacing obsolete machinery, and then I expect the next occasion to come along and have a bond issue, perhaps, and I would underwrite the bond issue, and by the time you had sold one bond issue or two we might have a bond market again which backed up the demand which I think exists for the production of capital goods, would furnish the credit to put men to work. There is nothing the matter with the United States except that it has the worst case of "nerves" in history; and therefore it is necessary for the time being to provide Government credit indirectly so that people will do the things they would normally do if they were not beset with fear. There are two things we need right now: First, to restore confidence, and, secondly, to restore credit so that credit will be available for projects that would normally be carried out. We need confidence and then cheap money for a long period of time. But when you attempt to bust this depression with a $300,000,000 appropriation for public works it is just like asking a 10-year-old boy to go and pick up the Washington Monument and bring it to this room. Senator BULKLEY. Nobody ever said any such thing. That suggestion is the first time it has ever been mentioned. Secretary MILLS. Does not this bill provide for public works! Senator WAGNER. Yes; because I want to help to some extentSecretary MILLS. You are helping to the extent of 10,000 new or public buildings and spending $120,000,000 on roads, to put 35,000 men to work, directly, and at the outside, a hundred thousand men. Senator WAGNER. That is because your department has insufficient men, or else there is something the matter with it, when it will take all of that time, a whole year, to spend only $13,000,000 in the construction of buildings, when you have this long list of allocated structures, many of which you have already acquired the site of. Secretary MILLS. You must remember that we are spending, in any event, during that same year $125,000,000. Senator WAGNER. You had a right to hire outside architects. You could do a great deal more. Secretary MILLS. That is just questioning other people's methods and motives. Senator WAGNER. No; not motives; I am not questioning anybody's motives, just methods. Secretary MILLS. Yet $120,000,000 for public roads gives work to 35,000 men directly and at the outside 100.000 men indirectly. Those are Mr. McDonald's figures. Senator BULKLEY. I want to ask you this question, because you are criticizing the Wagner bill Secretary MILLS. I did not mean to criticize it. I am here to talk in favor of the Barbour bill. I thought I had done all the criticizing of the Wagner bill that was necessary. I was prepared to let it sleep. Senator WAGNER. I am not going to let it sleep. |