Mr. DOWELL. I want a little further information if I may ask another question. Do you take into consideration the cost price fixed in the contract for construction when you have the project up for approval?

Mr. MACDONALD. Yes, sir; absolutely. However, prior to that time we have an estimate which has been approved, and prior to giving approval to that estimate an analysis of the cost is made to see that the estimate is approximately correct.

Mr. DOWELL. Do you take into consideration whether or not the price under the contract is a reasonable one when you approve it or is that a matter that you leave to the State highway commission?

Mr. MACDONALD. We take the cost into consideration. In the first instance, under the regulations all work must be advertised or steps taken to secure competitive prices. In addition, estimates must be made by the State and submitted, also a sheet giving an analysis of the estimates; that is, showing the cost of the materials, the distance that the materials have to be hauled, and other elements which determine the cost. That is, either the bid price or the analysis of the estimated cost by the State are submitted to the bureau before the project agreement is executed.

Mr. ROBSION. I want to submit an observation at this point. I confess that I am getting very little out of this procedure. This proposition, as I understand, is arranged under distinctive heads?

Mr. MACDONALD. Yes, sir.

Mr. ROBSION. It sems to me if the director were permitted to take up one subject and let him make his statement on that subject and then give the members. of the committee the opportunity to exhaust him by examination on this subject and get all the information on it and then pass on to something else, instead of jumping from here to yonder, it looks to me like we would get something.

Mr. Rose. Allow me to make an observation. I listened, the other day, to our chairman who is now a good-roads enthusiast.

I did not know until this morning that this department has inspectors all' over this country. We were told that there are certain roads in New York that are absolutely worthless. I do not know whether they come under this department or not. But what is in my mind is how is it possible such a thing as that could occur without a correction being made or knowledge being brought to the authorities who have them under charge?

The CHAIRMAN. Are those State roads?

Mr. ROSE. Those are roads that are in the State of New York. It may be that that matter does not come under this jurisdiction.

The CHAIRMAN. I will tell you the roads that I referred to. There are certain roads in New York along the trunk line that were built before 1909 which have gone to pieces. But we spent in 1920, I believe, $9,000,000 repairing those roads, and they need as much more, if not double, and that, I thought, was the situation in a good many States where good roads had been built-the States had about all they cared to do to appropriate money enough to put the roads they already have in good use without building other roads this summer. Mr. WOODRUFF. I think the statement Mr. Rose has in mind is the statement with reference to some friend of yours who passed over the roads.

The CHAIRMAN. Mr. Rose made a statement. What was the statement you made to me, Mr. Rose? It was something about a fellow being stuck in the mud?

Mr. ROSE. I can not locate the place, but it was where a man made as much as $75 a day hauling automobiles that were stuck along the road. I can not recall the paper I saw it in.

Mr. HUDSPETH. Charged them $75 for hauling them 20 yards?

Mr. ROSE. Yes, sir. The point I want to know is where do these inspectors inspect? Do they report; and if so, to whom?

The CHAIRMAN. These in New York are not under the Bureau of PublicRoads.

Mr. MACDONALD. Only the Federal aid roads are under the Bureau of Public Roads. I should like to proceed if it is the pleasure of the committee. I do not believe the subject can be covered except by subjects, however.

The CHAIRMAN. That is all right. The committee, when they met, said they wanted free and full discussion, and I would be willing to let you make your statement and then the committee may have the subject open.

Mr. MACDONALD. I have said something about the great need in general of highway improvement. The traffic that has come upon our highways and the

necessity for a very large and orderly highway-improvement program in order that this factor in highway transportation may not continue an obstruction in the path of our agricultural and general development is worthy of further very serious consideration. The Congress in its wisdom has made generous appropriations, and in continuing these appropriations last November very measurably strengthened the Federal legislation controlling Federal-aid road work by providing that in the future all Federal funds must be expended upon a well-defined and correlated system of primary and secondary roads, and further provides much more effective maintenance methods. I have shown you some of the tentative plans that have been submitted by the States in compliance with the act of November 9 last. These maps tentatively outlining the so-called 7 per cent system are, as soon as they are submitted, being studied. in detail with the utmost of care in order that they may not only be approved as soon as possible, but when they are approved no mistakes may be made. They will be approved route by route as the studies proceed and are completed. All of the Federal funds appropriated under the last act must be expended upon the roads in the system outlined therein. The procedure in initiating and carrying forward the improvement of road projects under the last, or the Federal highway, act will not be very much different than that which has been followed heretofore, and in the description I shall give of the procedure which has been and is now being followed I will at the same time, to all intents and purposes, be giving the future procedure.

The initiation of a project for the improvement of a Federal-aid road lies with the State. It submits a project statement therefor describing the project in detail. Such a statement is the one from our files here shown. It is for the improvement of a road in New York State between Albion and Batavia in the county of Genesee. The name of the road is given, its location, the terminii, the length, its present condition, the traffic it carried, the prospective traffic, the importance of the project as a part of the State's system of roads, the type of road it was proposed to build (in this case portland cement concrete), an estimate of the total cost of the improvement, the amount of Federal aid requested, and such other supporting data as was required in order to enable the bureau and the Secretary to determine the fitness of the project to participate in Federal aid and the preparedness of the State to prosecute the improvement to conclusion.

The project statement was submitted to the Secretary through the Bureau of Public Roads and was received first by our district engineer at his office in the United States post-office building in Troy, N. Y. Upon receipt the statement was turned over by the district engineer to his New York State assistant, who made a field examination, and went over every foot of the ground to substantiate the statements given in the State's application, and then proposed a detailed report of his findings. A copy of his report is here shown.

The project statement was next given consideration by the district engineer and thereafter forwarded by him to the bureau headquarters in Washington with the letter of transmittal here shown, in which he recommended the approval of the statement. The statement was sent, given favorable consideration by the headquarters engineering branch of the bureau, and passed to the chief of the bureau, and by him to the Secretary of Agriculture, who approved the statement as attested by the papers in the folder here shown. The State was then notified of the approval of the project statement and proceeded with a survey of the road and the preparation of plans and estimate of cost. During the preparation of the plans and estimate of cost our local representative examined the work from time to time and made such suggestions as his judgment indicated were necessary in order to facilitate the approval of the plans upon their completion. Upon the completion of this set of plans in sufficient detail for use in awarding the construction contract, blue prints of which are here shown, they were examined by our district engineer in Troy, together with the report of his New York State assistant, which you see here in the folder.

The district engineer considered the plans in proper shape and the estimate reasonable and forwarded them to the headquarters officer in Washington with the letter of transmittal recommending approval. This recommendation of approval carried with it authorization for the State to proceed with construction. These papers are here shown.

You see here a copy of the estimate submitted with these New York State plans and with it a detailed analysis of the unit prices shown in the estimate showing the cost of each of the materials used, f. o. b. the cost of freight haul

cost of hauling, cost of hauling from railroad station to the job, the cost of manipulation and contractor's profit. This analysis of the unit prices is required to determine the reasonableness of the estimate items and totals.

In Washington the plans and estimates were given consideration similar to that received by the project statement and in due season they were approved, as the papers here shown indicate. Following the approval of the plans and estimate a project agreement, copy of which is here shown, was prepared in the headquarters office and executed by the New York State highway commission and the Secretary of Agriculture. Upon the execution of the agreement the Secretary of the United States Treasury was notified as provided in the Federal aid act which stipulates in connection therewith: "The Secretary of the Treasury shall thereupon set asside the share of the United States payable under this act on account of such project," etc. It is at this point in the proceedings that the money is expended so far as the United States Treasury is concerned although it is not actually paid out until construction is completed and the State renders a voucher certifying to that fact and requesting payment.

As above stated, when the district engineer recommended the approval of the plans, he, in compliance with the rules and regulations promulgated by the Secretary, at the same time authorized the State to proceed with construction. Thereupon the State advertised for bids to do the construction. Copies of the advertisement are here shown. A bureau representative attends the opening of bids. Here is a certified copy of the bids actually obtained on this New York project. There were six bidders and the contract was awarded to the lowest bidder.

This New York contract was let and construction proceeded in a satisfactory manner. On an average of once a month during construction, inspections were made by our representatives from the district engineer's office in Troy, and when the job was finally concluded, a final inspection was made which disclosed that the work had been done in a satisfactory manner and in complete compliance with the approved plans and specifications. Copies of the inspection reports are here shown. Each one of these reports shows the date upon which the inspection was made, the name of the man making the inspection, the name of the people with whom he made the inspection, followed by a statement in detail showing the amount of work done on each item of work and the condition in whch it was found at the time of inspection. These reports show the equipment in use, the number of men employed and the wages paid as nearly as they could be ascertained. During the progress of the construction, estimates were made by the State of the work done and its value, and based upon these, vouchers were prepared by the State asking for a payment of Federal funds on account of the work done. These vouchers were submitted by the State through the district engineer's office, where they were carefully checked and either approved and recommended for payment, or returned to the State for correction. These approved vouchers then came to headquarters in Washington, where they were given an additional check, and if found correct, they were passed to the disbursing officer for payment. Copies of the vouchers paid on this New York job are here shown, and on them you may note the names of the approving officers. You may note that on one voucher is shown an item of 1,800 cubic yards of earth excavation. Upon the completion of the work, the final voucher was submitted and treated in the same way. This project is now completed, has been entirely paid for, and is being maintained by the State. Copy of the first maintenance inspection report is here shown. You also see here copies of test made of all the materials used, showing that these were satisfactory.

The procedure outlined above for this New York project is followed for each and every Federal aid project approved,

Mr. ROBȘION. Are those estimates, or is the actual work checked up by your Federal engineers on the ground?

Mr. MACDONALD. Prior to that time we have the plans with the estimates on them; then our engineers go over the ground and submit these reports, which show the progress of the work, and we can check the quantities from the progress reports.

Mr. ROBSION. You say that progress report shows 1,800 yards of earth excavation. Does your engineer check that?

Mr. MACDONALD, He does not actually go out and measure that in the field, but the State highway department does so, We have the detailed plans for the project, which show the amount of excavation by stations, all the way through the project; that is, by hundred-foot stations all the way through the project. Now, each one of these stations is marked on the ground by a stake

on which is shown in red or blue crayon the cut or fill at that point. These must agree with the plans and as each station is completed, we know the amount of excavating that has been done. If a stake is marked "cut 6 feet" it is compared with the plans to see if it agrees. By constant practice a man by mere inspection can easily tell if cut as made is in disagreement with the cut marked on the stake.

Mr. ROBSION. But if the estimate should show 20,000 yards and, as a matter of fact, there were only 10,000 yards, if it should be padded in that way, how would you determine it-what check would your department have on that? Mr. MACDONALD. It could not be so padded without discovery by the inspectors.

Mr. ROBSION. My question is what check has the Federal Government, or what means has it of knowing that these things are right?

Mr. MACDONALD. By our continual inspection.

Mr. ROBSION. How will you know unless the engineer goes out on the ground and finds out?

Mr. MACDONALD. He does go out on the ground.

Mr. ROBSION. He finds out how many yards there are and how much earth is removed?

Mr. WARD. He makes the check in the first instance.

Mr. MACDONALD. This is the way we know. I will quote from an inspection report picked out haphazard

Mr. ROBSION. I thought you said you had the estimates. Did your engineer go upon the ground to find out if there was so much earth removed, so much rock removed, and so much put in of this or that?

Mr. MACDONALD. We do not take a level or transit and go and actually crosssection, the State does that; we determine from the plans the work done to date. 'Grading to station 254 plus 60; to station 510 plus 66." The work is staked out on the ground in agreement with the plans, and our men, by inspecti on, can determine if the work is done as it is staked out.

Mr. ROBSION. But the State engineers furnish that, do they not?

Mr. MACDONALD. No; this is our engineer's inspection.

Mr. ROBSION. Well, how does he get it and from where does he get his figures? Mr. MACDONALD. He goes on the ground and inspects it.

Mr. ROBSION. Well, but he takes the figures of somebody else, does he not? Mr. MACDONALD. Our engineer is working under this set of plans, which has been checked.

Mr. ROBSION. But my question is this, Mr. MacDonald. Suppose some fellow has padded the plans, what means has the Federal Government to find that out? The plans are padded, and here is a fellow who puts in a padded proposition and it goes on through. Now, can you catch it up at any place?

Mr. MACDONALD. The plans can not be padded as you suggest; they are checked in our district offices and here in Washington. The cross-sections show certain cuts and fills, and the quantities are computed on that basis. Then these same cuts and fills are marked on stakes driven in the field, and it would be a very simple matter for our inspector to detect any discrepancy.

Mr. ROBSION. Suppose the statement is made in the plan there is so much earth to be removed and so much rock

Mr. MACDONALD. If the statement is made in the plans, we check the plans for their correctness, and then we check the marking of the stakes in the field and the work with them.

Mr. ROBSION. Check up by what-just by the plans, do you not?

Mr. CABLE. The county surveyor makes these plans under the direction of the State engineer, does he not?

Mr. ROBSION. I am trying to find out what steps the Federal engineer takes to find out whether the county engineer or the State engineer is submitting plans according to the conditions on the ground.

Mr. CABLE. The Federal engineer does not know anything about it until the State and county engineers have completed it.

Mr. ROBSION. If that is true, then we accept what the other fellow says. Mr. MACDONALD. Let us go back to the beginning. The State makes a survey. After the survey is made the survey is plotted in pencil form. This is the general procedure; a pencil drawing is made. That pencil drawing is turned over to our engineer, who goes out on to the road, and he examines the profile step by step in detail all through.

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Mr. LARSEN. Pardon a question right there. Does the State do that, or the county engineer? That might be very important, because the county itself is permitted to make a bid on it. Now, which one does the initial work?

Mr. MACDONALD. All plans are made under the direction of the State. They may employ the county engineer or they may employ their own organization. Mr. LARSEN. In point of fact, which do they usually do?

Mr. MACDONALD. There are more made by the State organizations than by the county organizations.

Mr. ROBSION. I think this will answer my question: The Federal Government. has no man to go there and measure with the State or county engineer, has it? Mr. MACDONALD. Yes; indeed. I think I have said that several times before, that as soon as the profile is received in its initial form our man goes on to the ground and goes over it station by station and examines it.

Mr. ROBSION. He walks over it and looks at it, or measures it?

Mr. MACDONALD. Exactly. He does not run a line; no. He does not do the actual surveying.

Mr. ROBSION. How can he tell? Unless he sees it done or has a part in doing it, then it is a matter of his eyesight, and there is considerable of a guess about it, is there not?

Mr. MACDONALD. I should not say so; no.

Mr. ROBSION. Can he go along a road, over any proposed project that has the plans laid out, and look at it, and he finds here they are going to remove 20,000 yards of earth [illustrating], and he can tell, by looking at. it, whether they are going to remove that much or not?

Mr. MACDONALD. Yes, sir; he could not tell whether they are going to remove 20,200 yards or 19,800 yards, but he could tell whether it was 20,000 or 25,000 yards.

Mr. ROBSION. But the fact is, no Federal engineer goes on the ground and measures it.

Mr. MACDONALD. No, sir: not in the way you state, but the inspection as I have outlined it, I believe, fully protects the interests of the Federal Government.

Mr. CABLE. The Federal engineer has nothing to do with it until the plans of the project reach the Federal Government, does he?

Mr. MACDONALD. We follow the law in that respect.

Mr. ROBSION. But there is no time that the Federal engineer does any measuring, is there?

Mr. MACDONALD. If he is suspicious; yes, sir; if anything arises to make him believe there has actually been any discrepancy or any error in the amount billed, we go into that.

Mr. ROBSION. That is what I was trying to find out, whether the Federal Government just accepted these figures and statements the other fellow put up to it, or whether you dug into that.

Mr. MACDONALD. Yes; we endeavor to check every item of the work and, if necessary, to the extent of taking the cross section figures.

Mr. ROBSION. I am not making any criticism; I am just trying to see how thoroughly we are taking care of the Federal moneys that the public may know that.

Mr. MACDONALD. I understand, sir.

Mr. ROBSION. I am satisfied it is all right.

Mr. MACDONALD. There is one important point that I have not developed. With this set of plans there is submitted to our engineers on a large scale a cross section of the road, showing the contour of the surface of the road and a cross section of it at each 100-foot station.

Mr. WOODRUFF. That is before any work is done?

Mr. MACDONALD. That is before any construction work is done. This drawing here is typical, but the sections themselves are in greater detail. For example, this is at a station. We will say that is the original surface of the ground [indicating]; we propose to make a cut of 5 or 6 feet

Mr. ROBSION. I understand that. Mr. MacDonald, but I once represented a contractor who was building a section of grade for the L. & N. Railroad, where the railroad engineers owned up and said this is what it is; but, when we got other engineers to look at it, we found they just chiseled the man out of a good many thousand yards, a good many thousand dollars, and I just wanted to know what sort of a check was made.

Mr. MACDONALD. We have the cross sections on a large scale submitted and they are checked over in our offices, both in the district and Washington offices,