Mr. CABLE. Then, in a number of States, the $50,000,000 appropriation could be materially curtailed?

Mr. MACDONALD. No. There are but very few States that estimate they will not use up their share of $50,000,000. Georgia is probably the worst example. They have estimated $1,881,000, while last year they put under construction $3,141,000.

Mr. LARSEN. Mr. MacDonald, is it not a fact that Georgia is prepared to go ahead and that they have voted a $75,000,000 bond issue this year, and would $50,000,000 meet their legitimate demands, under this appropriation of $50,000,000?

Mr. MACDONALD. No; $50,000,000 will not meet the program that they have carried on without a bond issue.

Mr. LARSEN. Without a bond issue?

Mr. MACDONALD. Yes.

Mr. LARSEN. Well, what amount will it take to meet the reasonable demands of the State of Georgia at the present time, and under the contemplated program and the program of last year-what amount should you have? What should be the amount of the governmental appropriation in order that we would be able to meet their demands?

Mr. MACDONALD. Well, it would be at least double its share of $50,000,000, Mr. Larsen.

Mr. ROBSION. Did not the director say how much would be eliminated by the 1st of July of all the available funds? We were talking about placing under construction, and so on, the projects of the States accepted and allotted. How much will be free for allotment on the 1st of July for the next fiscal year?

Mr. MACDONALD. There is no money available now for allotment for the next fiscal year.

Mr. ROBSION. What has become of it?

Mr. MACDONALD. It has all been allotted to the States.

Mr. ROBSION. So far as you can act on, have not most of the States taken their allotments?

Mr. MACDONALD. There are no new funds.

Mr. ROBSION. This $50,000,000 will all have been allotted?

The CHAIRMAN. As a matter of fact, Mr. MacDonald, as soon as an appropriation is made, this entire appropriation, less the amount retained for the running expenses of the department, is allotted to the States, is it not? And you do not allot to any particular project, but allot to each State?

Mr. MACDONALD. The law fixes that, and provides that we shall apportion for each fiscal year before the fiscal year begins, if an appropriation is available for that fiscal year.

The CHAIRMAN. It is not necessary that the money be allotted to any particular project, but to the State?

Mr. MACDONALD. To the State; yes.

The CHAIRMAN. And under that law, that allotment rests with the States? Mr. MACDONALD. Well, yes; with the proviso that if the States do not take advantage of it within two years after the fiscal year, it reverts. The CHAIRMAN. I had lost track of that.

Mr. ROBSION. Perhaps the director did not get it in here. I think that he did not understand, or that I did not understand him. Now, I am talking about the project statements submitted and the money allotted. Now, on the 1st of July, what do you think will be subject to further approval, not with regard to the contracts, but further approval? What further sum, if any, because I understand that you allot the money to the projects before the contracts are let?

Mr. MACDONALD. We have right now an unobligated balance of $77,000,000, and I suppose that $30,000,000 probably

Mr. ROBSION (interposing). What do you estimate that it will be?

Mr. MACDONALD. I suppose that perhaps $30,000,000 will be the unobligated amount that will be on hand on that date.

Mr. ROBSION. How much have you been from year to year, on an average; I mean excepting the project statements and the allocating of the money? Mr. MACDONALD. Well, of course, that has varied from year to year.

Mr. ROBSION. Say during the last year or the last two years, for instance. The CHAIRMAN. Mr. MacDonald, you could allot $500,000,000 a year if you had it, could you not?

www

Mr. MACDONALD. That is rather more extravagant than our ideas, Mr. Chair

man.

The CHAIRMAN. I mean if you made sufficient endeavors you could allot it? Mr. MACDONALD. We have allotted as much as $100,000,000 a year; obligated that much.

Mr. ROBSION. And if we appropriate $50,000,000, then with the balance you have over on the 1st of July, with all appropriations, you will have something like $80,000,000 to allot, subject to be allotted under project statements submitted and approved?

Mr. MACDONALD. That is approximately correct. I can give you the exact figure.

Mr. WARD. I have one question. Please understand me clearly, and let me have a clear answer to it. Is there or is there not evidence of pronounced advancement and growth, generally speaking, of road work, road development? Mr. MACDONALD. Yes, sir; indeed there is.

Mr. WARD. Upon that statement, do you not think that a $50,000,000 appropriation would work a material curtailment to the prospective plans of the various States of the Union, speaking as a whole?

Mr. MACDONALD. No, sir; I do not believe that more than about the number that I have specified would have their plans materially curtailed; that is, about 12 to 15 States. I believe the balances are sufficient to allow the other States to carry on their work next year at the rate that they have in the past. You see, I would like to bring this point out, that the same amount of money buys more roads; we get more miles of road for the same amount of money.

Mr. SANDLIN. In a good many States it will happen that those States that have been more progressive in road building will be penalized by the small appropriations?

Mr. MACDONALD. That is not entirely untrue.

Mr. WARD. Do you have a statement with you with regard to that?

Mr. MACDONALD. I have.

Mr. REECE. Would not the larger number be curtailed the second year under this suggested appropriation?

Mr. MACDONALD. The second year, more likely. If we curtail the appropriation now, it is going to be reflected year after next more than it will next year; yes, sir.

Mr. SANDLIN. What are the States that will be affected?

Mr. MACDONALD. The States-on the basis of what has been done that would have a smaller program for next year are Arizona, Georgia, Idaho, Iowa, Louisiana, Maine, North Carolina, Oregon, South Carolina, South Dakota, Tennessee, and two or three others.

The CHAIRMAN. Have they used all of their allotments, Mr. MacDonald? Mr. MACDONALD. On the basis of $50,000,000, their program for next year would be a smaller program than they had during the fiscal year 1921. The CHAIRMAN. Building program or estimated program?

Mr. MACDONALD. Building program, work actually put under construction. Mr. HUDSPETH. Would this last year, with the financial depression over the country, be a safe guide as to the amount of road that would likely be built? For instance, take my State-Texas. Last year all kinds of commodities were down-cotton, wool, live stock. Since the passage of the emergency tariff live stock has advanced, wool has advanced, and the conditions are better down there now. Yes; I voted for the emergency tariff and made a speech for it. You have got me on record for that. Now, would that be a guide as to what the road building would be in that State? Would not the amount of road building increase somewhat?

Mr. MACDONALD. Yes, sir; I think that it will be a guide in that section. Mr. HUDSPETH. They did not feel like voting bonds last year. Some of them could not vote anything.

Mr. MACDONALD. But there is also, to a large extent, the question of how much can be placed under construction; that is, there is always a limitation on the construction program that can only be increased gradually from year to year.

Mr. HUDSPETH. The people in my State did not feel like voting bonds last year. In fact, I doubt whether they could vote bonds or not.

Mr. MACDONALD. We have had plenty of bonds available right along. There have been bonds available right along.

Mr. HUDSPETH. In Texas?

Mr. MACDONALD. Yes; but there has not been a sale for the bonds at a reasonable rate.

Mr. CABLE. The emergency tariff did some good?

Mr. HUDSPETH. The emergency tariff advanced the prices of live stock. There is no question about it. I voted for it. And I made a speech for it.

Mr. WOODRUFF. Mr. Chairman, I would like to ask Mr. MacDonald one or two questions before we adjourn. I want you to put in the record whether or not your bureau is satisfied with the legislation as it is now, so far as it relates to the building of forest roads and trails?

Mr. MACDONALD. Yes.

Mr. WOODRUFF. I want you to put into the record also, if you will, whether or not you and the head of the Forest Service have worked out regulations under which you can both operate satisfactorily?

Mr. MACDONALD. Yes, sir; very satisfactorily.

(Whereupon, at 12.20 o'clock p. m., the committee adjourned.)

COMMITTEE ON ROADS,

HOUSE OF REPRESENTATIVES,
Washington, March 22, 1922.

The committee met at 10.30 o'clock a. m., Hon. Thomas B. Dunn (chairman) presiding.

Mr. SEARS. Before the Secretary makes his statement, there is a little something I wanted to say. It will take me about a minute, if you do not object, Mr. Chairman.

At the close of the hearing yesterday, the statement was made that there were only 13 States that would be handicapped by this appropriation and that they were the progressive States. It is unfair to Florida, because we have spent about $8,000,000 in my district alone for vitrified brick roads, grouted, and other good hard-surfaced roads. I think with 6,000,000 men out of employment, approximately, that Congress can not do better than make appropriations for roads and public buildings to put these men to work now, of all times.

I simply want to get that in the record, because it might show, while I was present yesterday, that I did not correct this statement. I do not think it was meant to reflect on Florida, but I think Florida is entitled to that statement, that we have built miles and miles and miles, perhaps as you know, of the very best roads in the world-vitrified brick, grouted-before the Government came in to help us.

Mr. WOODRUFF. I think that is true of many States.

Mr. SEARS. Yes.

Mr. WOODRUFF. I know it is particularly true of New York and Pennsylvania. Mr. SEARS. New York was brought out by the chairman very ably and forcibly. The CHAIRMAN. I did not understand what I brought out forcibly.

Mr. SEARS. About New York having good roads on which she has spent millions of dollars before Government aid started; and it would appear we were lagging behind from the report yesterday.

The CHAIRMAN. I did not criticize that.

Mr. SEARS. You did not; it came out in the hearing.

Mr. WOODRUFF. I think it is only fair, too, in respect to these States that have not taken up this Federal-aid fund as rapidly as some others, to say their neglect to do so was caused by the condition of their laws; they had no laws on the statute books by which to raise the necessary funds to meet the Federal funds. I think all the States are progressive enough when it comes to road building.

Mr. SEARS. Ours is owing to the prohibitive freight rates and high cost of labor during the war.

STATEMENT OF HON. HENRY C. WALLACE, SECRETARY OF AGRICULTURE.

Secretary WALLACE. I have nothing to say to you in regard to the details of our road program. Mr. MacDonald, of course, is much better posted than I am as to the details of administration. I think the Federal aid act which was passed last year, while it is not the beginning altogether, is the most constructive road act we have ever passed, and launched us definitely on a nation-wide system of road building. Because of that and in order that the States may

work to that definite program, it seems to me highly desirable that Congress should lay out a program of three or more years in advance, so that the various State legislatures when they meet can work to that long-time program.

The provisions made for interstate as well as intrastate highways in that act. together with the provision made for maintenance, are both extremely important. A good deal has been said in criticism of the Federal appropriations, because of lack of provision for maintenance by the States. That act removed any question that can be raised as to that and clears the way now for a systematic construction of thoroughly first-class roads.

I talked with the President about the matter not long since, and I left him with the understanding that a provision for appropriations of fifty, sixty-five, and seventy-five million dollars, respectively, for the next three years would meet with his approval.

Of course, there are a great many matters of detail in which you are interested on which Mr. MacDonald and Colonel Greeley, of the Forest Service, can give you better information than I can.

Mr. WOODRUFF. Would you permit an interruption there?

Secretary WALLACE. Surely.

Mr. WOODRUFF. Do not answer this unless you care to, but did the President indicate as to whether or not he would approve of a program of more than three years?

Secretary WALLACE. I do not remember that we spoke of that particular point, but I have the impression that he would prefer not to outline a program extending beyond his own administration. Naturally there would be some hesitation about that; but I do not remember that any detailed conversation on that point took place. My impression is that here would be a natural hesitation by any administration to adopt a program beyond its term.

Mr. WOODRUFF. We have before us, I believe, two bills which propose to make appropriations over a period of three years-one introduced by the chairman of the committee and one introduced by myself. The bill of Mr. Dunn provides $40,000,000 for the fiscal year ending June 30, 1923; $50,000,000 for the fiscal year ending June 30, 1924; and $60,000,000 for the fiscal year ending June 30, 1925. It also provides an appropriation for forest roads and trails of $2,500,000 for the fiscal year ending June 30, 1924, and $2,500,000 for the fiscal year ending June 30, 1925. It is proposed under that bill to bring the program for the forest roads and trails up to a level with the regular appropriations. The year ending June 30, 1923, is eliminated by reason of the fact that in the last bill we passed we incorporated an appropriation of $10,000,000 for forest roads and trails.

Now, the bill I introduced is very similar to this. It differs in this respect, that my bill provides the sums that you stated the President and you had agreed upon as the sums which should be appropriated for this purpose. It also provides an appropriation of $6,500,000 for forest roads and trails for the fiscal year ending June 30, 1924, and $7,500,000 for the fiscal year ending June 30, 1925. My bill also provides a penalty clause. I do not remember whether Mr. Dunn's bill does or not.

The CHAIRMAN. I modified the clause somewhat.

Mr. WOODRUFF. You modified the clause I had in my bill. I do not think you can make it too drastic. Certainly if the contractors and other people who have to do with the building of the roads of the country will read the penalty clause I propose and appreciate what it means to violate it, there will be no reason to ever impose any of the provisions of this penalty clause. Now, a penalty clause has never been written into a roads law, and do you not believe, Mr. Secretary, it would be a wise thing to write that into the law at this time? Secretary WALLACE. I think anything you can do to make sure we are getting the value of our money is good. There is no question but in times past there has been fraud in road and bridge building.

Mr. WOODRUFF. And inserting a clause at this time is merely an attempt to put an end to that particular thing.

Mr. DOUGHTON. Do you mean there has been fraud in building roads where the Federal Government has cooperated?

Secretary WALLACE. No; I was not referring to that; I was thinking particu larly of the things I have seen myself in building city pavements. Mr. DOUGHTON. I know there has been with the States.

Secretary WALLACE. I was not thinking of our general road system; I made that remark having in mind especially what I had seen in pavement building in the city of Des Moines. Any safeguards that will not be unfairly burden

some, I think it wise to provide. I have not examined this particular matter, and I do not care to express an opinion on that.

Mr. WOODRUFF. I presume you and the President agreed upon the figures you stated after a very comprehensive review not only of the road situation but the financial situation of the country.

Mr. ROBSION. I did not understand the Secretary to say they had agreed. Secretary WALLACE. I meant to say I left the President with the understanding that the figures I mentioned would be satisfactory to him.

Mr. WOODRUFF. Then I might ask, Mr. Secretary, if those figures are satisfactory to you as head of the department which would expend these funds. Secretary WALLACE. Yes. We have considered the matter carefully-that is, the whole situation. There are a good many things to keep in mind. If we could have a large appropriation, we could get this 7 per cent system completed much more rapidly, and I think that would be more desirable. If you had plenty of money and times were good, I would favor a larger appropriation. Mr. WOODRUFF. And I also.

Secretary WALLACE. But having in mind all of the conditions, the amounts mentioned probably will meet our most urgent needs. There is this to be kept in mind, that you can add to these appropriations; if the conditions change, Congress can add to them at any time and expand the work that much more rapidly.

Mr. WOODRUFF. That would meet with the approval of your department if the conditions were right?

Secretary WALLACE. On general principles I feel this way about it: The use of the roads has increased so much and is increasing so rapidly, especially their use by the larger freight-carrying vehicles, the trucks, that, conditions being favorable, I would favor as rapid completion of this 7 per cent system as could be brought about efficiently. But times are hard; taxes are high; it is the time for economy in our expenditures, and having that in mind I think the sums mentioned, provided for now, will enable us to go ahead efficiently and make fairly satisfactory progress. Then, if conditions change two years from now or three years from now, there is nothing to prevent Congress making additional appropriations and expanding the program more rapidly.

Mr. WOODRUFF. Do you care to say, Mr. Secretary, whether or not the President indicated, if times should change, if the country should become more prosperous, that he would favor an additional appropriation above the amounts specified in my bill?

Secretary WALLACE. I do not remember that was mentioned particularly. I remember that during the conversation the remark was made "Congress can always make appropriations"; but we did not go into that, and he did not indicate he would favor or disapprove. I do not remember that was discussed. The CHAIRMAN. You call this a fifty, sixty-five, and seventy-five million dollar program?

Secretary WALLACE. Fifty, sixty-five, and seventy-five million.

The CHAIRMAN. Would you care to say whether there was any question about the amount of participation being too high by the Federal Government? Secretary WALLACE. No; I could not.

The CHAIRMAN. I mean was that discussed at the conference? Secretary WALLACE. I do not remember that that was mentioned. The thing that the President has been much concerned about and was when we were considering the Federal highway act of last November is the matter of maintenance. He is very insistent that these roads must be maintained by the States; that the Government should not help to build roads which would be knocked to pieces and then the Government have to go in and help to rebuild them. He was very insistent upon that. That was the thing most in his mind in every talk I have had with him on these road matters.

Mr. WOODRUFF. You feel, Mr. Secretary, the law now upon the statute books fully protects the Government in that respect?

Secretary WALLACE. Yes; I do. I think that is an admirable provision. The provision is that if the State should not maintain a Federal aid road, the department must give 90 days' notice, and, if at the end of that time they have not taken the necessary steps to maintain it, we can go in and take the money allotted to the State and maintain it, and the State gets no more money until the amount has been repaid for maintenance; and when it has been repaid, it is covered into the general fund and apportioned among the States. Mr. WOODRUFF. Which is a real penalty.