FRIDAY, DECEMBER 17, 1937.

FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC

WORKS

STATEMENTS OF E. K. BURLEW, ADMINISTRATIVE ASSISTANT TO THE SECRETARY OF THE INTERIOR; H. A. GRAY, ASSISTANT ADMINISTRATOR, PUBLIC WORKS ADMINISTRATION; SAMUEL J. ELSON, CHIEF, GENERAL ACCOUNTS SECTION; CARL F. FARBACH, ASSISTANT GENERAL COUNSEL; CHARLES L. KADES, ASSISTANT GENERAL COUNSEL; J. J. MADIGAN, EXECUTIVE OFFICER; AND DAN H. WHEELER, ASSOCIATE DIRECTOR, PROJECTS DIVISION

ESTIMATE, FISCAL YEAR 1939

Mr. WOODRUM. We will take up the items for the Federal Emergency Administration of Public Works. We have with us Mr. Burlew, administrative assistant to the Secretary of the Interior and Mr. Gray, the Assistant Administrator of the Public Works Administration, and their staff.

The item of appropriation for the Federal Emergency Administration of Public Works is as follows:

Not to exceed $9,000,000, from funds on hand or to be received from the sale of securities, shall be available during the fiscal year 1939 for administrative expenses in connection with the liquidation of said Administration, including personal services in the District of Columbia and elsewhere; travel expenses, in accordance with the Standardized Government Travel Regulations and the Act of June 3, 1926, as amended (5 U. S. C., 821-833); printing and binding; law books, books of reference, and not to exceed $500 for periodicals, newspapers, and press clippings; procurement of supplies, equipment, and services; maintenance, repair, and operation of motor-propelled passenger-carrying vehicles, to be used only for official purposes; typewriters, adding machines, and other labor-saving devices, including their repair and exchange; not to exceed $1,000 for expenses of attendance, when specifically authorized by the Administrator, at meetings concerned with the work of the Administration; rent in the District of Columbia and elsewhere; and all other necessary administrative expenses: Provided, That except for the limitations in amounts herein before specified, and the restrictions in respect to travel expenses, the administrative expenses and other obligations of the Administration shall be incurred, allowed, and paid in accordance with the provisions of title II of the National Industrial Recovery Act.

JUSTIFICATION STATEMENT OF ESTIMATES, FISCAL YEAR 1939

Mr. WOODRUM. Would you care to make a brief, informal statement, about the work of the Public Works Administration and this estimate that has been sent up by the Budget?

Mr. GRAY. We have submitted a justification statement of the requested amount for the fiscal year 1939, to operate the Public Works Administration, both the field and Washington forces. It is somewhat an explanation, I think, in addition to the regular Budget statement of the amounts needed, and indicates also something of the economies effected and to be effected under this Budget.

Mr. WOODRUM. That statement may be made a part of the record at this point.

(The justification statement referred to is as follows:)

JUSTIFICATION FOR APPROPRIATIONS, FISCAL YEAR ENDING JUNE 30, 1939

SALARIES AND EXPENSES

The requested authorization for the expenditure of funds is for administrative expenses of the Public Works Administration and is in connection with the program during the fiscal year 1939.

It is now estimated that on July 1, 1938, about 1,338 projects costing approximately $988,206.000 will be uncompleted. It is further anticipated that 87 of those projects, estimated to cost $405,000,000, will be uncompleted on July 1, 1939. The attached graph indicates the number and estimated cost of the projects and shows the anticipated progress toward completion from November 1937. The necessary supervision of this substantial program is to be carried on through the staff of the central office and the field staff operating from regional offices in which the work of the former State directors and State engineer inspectors has been combined.

The functions of the various divisions, except Housing, are similar to those outlined last year, except that no applications are being examined. The housing activities of the Public Works Administration were transferred to the United States Housing Authority on November 1, 1937. The Engineering, Inspection, and Power Divisions were consolidated on November 15, and the loan supervision work of the Finance Division has recently been taken over by the Reconstruction Finance Corporation.

Seven regional offices were established to carry on the work previously conducted from the offices of 45 State directors and 34 State engineer inspectors. The regions include the following States, with headquarters as indicated: Region No. 1.-Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont; headquarters, New York City.

Region No. 2.-Illinois, Indiana, Michigan, Ohio, West Virginia, and Wisconsin; headquarters, Chicago, Ill.

Region No. 3.-Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia; headquarters, Atlanta, Ga. Region No. 4.-Iowa, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, and Wyoming; headquarters, Omaha, Nebr.

Region No. 5.-Arkansas, Colorado, Kansas, Louisiana, New Mexico, Oklahoma, and Texas; headquarters, Fort Worth, Tex.

Region No. 6.-Arizona, California, Nevada, and Utah; headquarters, San Francisco, Calif

Region No. 7.-Idaho, Oregon, and Washington; headquarters Portland, Oreg. (Associate regional directors are located at Harrisburg, Pa., and Columbus, Ohio.)

There has been a marked reduction in the personnel of the organization, including those transferred to the United States Housing Authority, in the past 13 months, as indicated below:

Further reductions in personnel are constantly taking place and must continue until the number is reduced to an average of approximately 3,000 for the fiscal year 1939-1,110 in Washington and 1,897 in the field.

On July 1, 1937, there were 1,909 uncompleted projects, these projects financed by Public Works Administration allotments of $771,424,100 involving grants of $442,175,710, loans of $329,248,390, with an estimated cost of $1,336,111,547. Since the beginning of the fiscal year 1938, there have been added to the Public Works Administration program net allotments of $167,814,635 for 1,205 projects estimated to cost $272,930,852. The allotments consisted of grants amounting to $110,620,635 and loans amounting to $57,194,000.

It will thus be observed that during the fiscal year 1938 it is anticipated that work on 1,776 projects, costing $620,836,399, will be completed.

NEW LANGUAGE

Mr. WOODRUM. Will you explain this change of language in the item reading

$9,000,000, from funds on hand or to be received from the sale of securities,

Mr. GRAY. That is the source of the money; it will come from the revolving fund.

Mr. WOODRUM. You are going to take it from the revolving fund instead of a direct appropriation out of the Treasury?

Mr. GRAY. Yes, sir.

STATUS OF CURRENT APPROPRIATION

Mr. WOODRUM. You had available for the fiscal year 1938 $15,000,000?

Mr. GRAY. $15,000,000; yes, sir.

Mr. WOODRUM. What is the status of that appropriation?

Mr. GRAY. We are in operation and I think we are going to make out with it. We have been cutting down to get within the appropriation.

Mr. WOODRUM. Have you put anything aside as a reserve?
Mr. GRAY. We have not been able to.

Mr. BURLEW. Mr. Chairman, we will have spent about two-thirds of our $15,000,000 by the 1st of January, which means that we will have to go for 6 months on one-third of the appropriation. That is one reason for the economies we have effected and we will have to effect still more.

In other words, we will continue to reduce the force until we get it down much lower than it is in order to finish out the year.

PRESENT NUMBER OF DEPARTMENTAL AND FIELD PERSONNEL

Mr. WOODRUM. How many people have you now?

Mr. BURLEW. We have 4,290.

Mr. WOODRUM. That is the total number, 4,290?

Mr. BURLEW. And we will have to get down below that.

Mr. WOODRUM. How is that divided as between departmental and field force?

Mr. BURLEW. 1,455 for Washington and 2,835 for the field. Our estimates, though, are based on an average number of employees. Mr. WOODRUM. What is that average?

Mr. BURLEW. We expect to have an average of 3,000 next year. Mr. WOODRUM. That is by July 1, 1938?

Mr. BURLEW. Well, sir

NUMBER OF PERSONNEL REDUCED

Mr. JOHNSON of West Virginia. How much of a cut will that represent?

Mr. BURLEW. That will be a cut from 4,290 to 3,000 or a reduction. of 1,290.

Mr. WOODRUM. That is between now and July 1?

Mr. BURLEW. Not exactly that. That will be our average for the next fiscal year. We may start the fiscal year with more than 3,000 but will reduce to make about an average of 3,000.

Mr. WOODRUM. You will wind up with less than 3,000?

Mr. BURLEW. Yes; we will wind up with less.

Mr. JOHNSON of West Virginia. Where are you reducing the number of employees?

Mr. BURLEW. Throughout the organization. We closed our 45 State offices and all of our State inspection offices.

Mr. HOUSTON. And you have established regional offices?

Mr. BURLEW. We have established regional offices; that is right. We terminated the services of about 305 employees in Washington effective on the 30th of November.

Mr. WOODRUM. What type of personnel does that represent?

Mr. BURLEW. Every type-executives and all the way down to file clerks and messengers and guards.

Mr. JOHNSON of West Virginia. In other words, a reduction through your entire force?

Mr. BURLEW. That is right.

Mr. JOHNSON of West Virginia. From top to bottom?

Mr. BURLEW. That is right.

Mr. WOODRUM. This 3,000 average that you estimate as of July 1, how will that be divided as between the department and the field? Have you an estimate on that?

Mr. BURLEW. One thousand one hundred and ten in Washington.
Mr. GRAY. And 1,897 in the field.

Mr. JOHNSON of West Virginia. That is in about the same proportion as you have it now?

Mr. GRAY. That is correct.

Mr. JOHNSON of West Virginia. That is, your reduction is in the same proportion?

Mr. GRAY. That is right. You see, it goes with the work.

Mr. WOODRUM. What is your estimate of how many employees you will have on July 1, 1939?

Mr. GRAY. We cannot tell exactly how many there will be on July 1, because we have an average figure.

I will hand you this chart, Mr. Chairman, which may help to explain. This is the chart of work [illustrating on chart attached]. This is the chart of the number of projects. Here is January [indicating]. Here [indicating] is July 1938. As you see, we are dropping down very rapidly.

This will be an average of the number of employees. It somewhat reflects the amount of the work. We will have more in the first part and less in the last part of the year. It tapers off as the projects and the money taper off.

Mr. WOODRUM. It seems to be in a rapid process of liquidation. Mr. GRAY. Yes, very much so; very decidedly, sir, as you can see from the chart.

NO NEW PROJECTS BEING UNDERTAKEN

Mr. WOODRUM. Are you making any new commitments of any kind?

Mr. BURLEW. No, sir.

Mr. WOODRUM. Is that literally true?

Mr. BURLEW. That is absolutely true.

Mr. GRAY. That is true, Mr. Chairman.

Mr. BURLEW. And the reason for it is that we have no money.

REVOLVING FUND

Mr. DIRKSEN. What happens to the money that is kicked back, if any, where projects are not carried out?

Mr. BURLEW. That is rescinded. We are operating in the red and have been ever since we started using the revolving fund. We have ostensibly $72,000,000 in the revolving fund, but we do not actually have the money. That money will be coming in during the next year from the purchase and sale of bonds. If we were to make an allotment now, we would be drawing on the future-that is, we would buy bonds we are now committed to buy and then we would have to sell them and use that money. We cannot do that, considering the state of the revolving fund at this time. It was all right to do that earlier, when we had plenty of money.

Mr. HOUSTON. How was that revolving fund created?

Mr. BURLEW. Through the sale of securities under statutory authorization. We buy securities from a borrower, usually a municipality or other public body, and then we sell them through the R. F. Ĉ.

ESTIMATE SUBMITTED TO BUREAU OF THE BUDGET

Mr. WOODRUM. How much did you ask the Budget for, for administrative purposes?

Mr. BURLEW. $9,000,000.

Mr. WOODRUM. They gave you as much as you asked for?

Mr. BURLEW. They gave us exactly what we asked for.

Mr. JOHNSON of West Virginia. Did you make a horizontal cut of 10 percent in your items?

Mr. BURLEW. No, sir. We have done more than that, you see; we have reduced much more than 10 percent.

NUMBER OF PROJECTS ON HAND AND NUMBER IN PROCESS OF

CONSTRUCTION

Mr. DIRKSEN. Mr. Chairman, I was going to suggest that it would be very interesting for the record and I assume the question will come up to have the number and percentage of projects out of all of those that were uncompleted at the time we made the appropriation, or earmarked some portion of W. P. A. funds last year.

Mr. BURLEW. You mean how many projects we have on hand? Mr. DIRKSEN. You had, I think, 4,800-was that it?

Mr. BURLEW. Four thousand one hundred thirty-five applications. Mr. DIRKSEN. And of that number

Mr. BURLEW. We allotted 1,225 projects out of that number. Mr. DIRKSEN. As I remember, hazardous schoolhouses number one on the list, then they went on down.

Mr. BURLEW. That is right.

Mr. DIRKSEN. Could you break that down into classifications and insert that statement in the record, because there will be a lot of questions asked on that, I think.

Mr. BURLEW. Yes. The question in the minds of everybody is why we stopped allotting when we had apparently all this money. As I have explained, it is because that money is available only in the future.

We do not have it now.