Commissioner PESQUERA. Section 1 is inapplicable to us. Senator WAGNER. It is now, but did you want to be included in that? Commissioner PESQUERA. Yes. Senator WAGNER. That is what the Senator asked you. Commissioner PESQUERA. If it would be possible to so amend the bill, stating that Puerto Rico shall be included in all sections. Senator WAGNER. In other words, wherever the word "State" is used you want that to include Puerto Rico? Commissioner PESQUERA. The island of Puerto Rico. Senator FLETCHER. We are very much obliged to you, Mr. Commissioner. We will take that under consideration. Commissioner PESQUERA. Thank you very much. (Thereafter the secretary of the American Engineering Council submitted the following statement for the record :) Hon. PETER NORBECK, AMERICAN ENGINEERING COUNCIL, Chairman Committee on Banking and Currency, United States Senate, Washington, D. C. MY DEAR SENATOR NORBECK: American Engineering Council, representing 60,000 professional engineers, holds the following views that have a bearing upon Senate bill 4755. In addition to presenting these views, this statement contains references to specific sections of S. 4755. We submit this with the hope that it will be of aid to the members of the Committee on Banking and Currency. Council holds that the business of the Government should be controlled by the same principles which govern all other sound business, and earnestly recommends: 1. That all governmental budgets be promptly balanced-Federal, State, municipal, and all their subdivisions. These budgets should be balanced by a courageous and intelligent reduction of governmental expenditures. Taxes should be increased as a last resort when necessary to balance sound and economical budgets. 2. That the functions of the Reconstruction Finance Corporation be so broadened that, with proper safeguards, it may make credit more readily available to industry. 3. Council approves in principle a normal program of Federal, State, and municipal public works construction as an effective and immediate means of in creasing purchasing power, stimulating trade recovery and reviving employment. 4. Council recommends that no governmental public works be undertaken which would essentially be in competition with private business. We respectfully call your attention to the following specific phases of S. 4755: Page 4, section 2a, line 7, item 1, providing for loans to States, municipalities and other political subdivisions for public works. It is the general consensus of opinion of the members of the assembly of council that it is highly inadvisable for the Federal Government to make loans to States, municipalities, and other political subdivisions for the purpose of financing their respective public works. Page 4, line 1, item 2, providing for loans to limited-dividend corporations. This is a sound provision and council is in favor of its adoption. Page 4, line 15, item 3, providing for loans to private corporations for construction of bridges, etc. This is likewise a sound provision, and council recommends its adoption. Page 5, line 16, section 2 (c), providing that all amounts received by corporations shall be used for retiring loans. This is a very necessary provision and we urgently recommend its adoption. Page 5, line 22, section 3, procedure to be followed by the Reconstruction Finance Corporation. We support in its entirety. Page 8, lines 6 to 8, section 4, providing minimum wage rates shall be stated in invitation for bids, etc. This is necessary and equitable and should be adopted. Page 10, section 4, line 1, item 5, Hoover Dam. It is very essential to increase the proposed appropriation for the Hoover Dam project over that provided by the House of Representatives. It is our understanding that the provisions in the House bill would make it necessary to stop the work on the Hoover Dam on or about October 1. If this should occur, waste would ensue and the completion of the project be materially retarded. The appropriation should be made ample to cover a year's operations under the provisions of the contract. Page 14, section 6, lines 3 to 5, inclusive, limiting the work week to 30 hours. The intent of this language is to spread work which is desirable, but it would lead to uneconomical operation. It would be much more desirable to state the number of hours that could be worked in a month so an employer would have more leeway in distributing the work among his employees. This would obtain a spreading of work on a more economic basis than would result under the language now prevailing in the bill. Furthermore, some classes of work are of such character that it would be practically impossible to strictly comply with the 30-hour per week provision. We, therefore, hope this language will be modified in the general directions suggested. We respectfully request your favorable consideration of council's position on the several aspects of this bill. We would appreciate having this statement entered in the records of the hearings on S. 4755. Respectfully submitted. L. W. WALLACE, Copy to each member of the Senate Committee on Banking and Currency. Senator FLETCHER. The committee will stand adjourned. (Whereupon, at 5.40 p. m., the committee adjourned.) UNEMPLOYMENT RELIEF TUESDAY, JUNE 7, 1932 UNITED STATES SENATE, COMMITTEE ON BANKING AND CURRENCY, Washington, D. C. The committee met at 10.30 o'clock a. m., in the committee room of the Senate Committee on Interstate Commerce, Hon. Peter Norbeck, chairman, presiding. Present: Senators Norbeck (chairman), Goldsborough, Couzens, Townsend, Walcott, Blaine, Carey, Davis, Glass, Wagner, Bulkley, and Morrison. The CHAIRMAN. The committee will come to order. We have under consideration this morning Senate bill 4632, together with an amendment to the same, both offered by Senator Davis. I suggest that the bill and its amendment be printed in the record at this point. (The bill, S. 4632, is here printed in full as follows:) [S. 4632, Seventy-second Congress, first session] A BILL To authorize the Reconstruction Finance Corporation to make loans to States and municipalities Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 5 of the Reconstruction Finance Corporation Act is amended by adding at the end thereof the following: "Within the foregoing limitations of this section the corporation may also make loans to States or municipalities or political subdivisions thereof to aid in temporary financing for unemployment relief, and when, in the opinion of the board of directors of the corporation, any such State, municipality, or political subdivision is unable to obtain funds upon reasonable terms through banking channels or from the general public and the character and value of the security offered are such as to furnish adequate assurance of ability to repay within the time fixed therefor and to meet other obligations in connection therewith: Provided, That the aggregate sums advanced under this paragraph shall not exceed $500,000,000." (The amendment to S. 4632 is here printed in full as follows:) [S. 4632, Seventy-second Congress, first session] AMENDMENT Intended to be proposed by Mr. Davis to the bill (S. 4632) to authorize the Reconstruction Finance Corporation to make loans to States and municipalities, viz: 66 On page 2, line 7, strike out the period and insert in lieu thereof a colon and the following: Provided further, That in any case where any such State, municipality, or political subdivision is unable to obtain a loan from the corporation for such purposes because of existing constitutional inhibitions or because it has already borrowed to the full extent authorized by State or municipal law, the corporation may, upon request of the governor of such 87 State or of the proper authorities of the municipality or political subdivision, make temporary advances for such purposes upon condition that the governor or such authorities shall agree to recommend to the legislature of the State and to the people thereof such action as may be necessary and appropriate to insure the repayment to the corporation of all amounts so advanced." The CHAIRMAN. The committee will hear first from Senator Davis.. STATEMENT OF HON. JAMES J. DAVIS, A SENATOR OF THE UNITED STATES FROM THE STATE OF PENNSYLVANIA Senator DAVIS. I just want to call attention to Senate bill 4632 and the amendment offered thereto, and to ask that in view of the fact that the President suggests $300,000,000 whereas I have suggested $500,000,000, that be given consideration. Senator TOWNSEND. Do you mean that just on the request of the governor alone a request for funds should be granted? Senator DAVIS. Yes; the governor would make his proposition to the Reconstruction Finance Corporation. It is a question with the Reconstruction Finance Corporation whether or not it will grant it after he makes his presentation. The bill is for general relief for States, municipalities, or political subdivisions which, because of constitutional inhibitions, are unable to raise money. They will present the matter to the Reconstruction Finance Corporation, and if that body deems it wise, the loan will be made. In other words, it provides: That in any case where any such State, municipality, or political subdivision is unable to obtain a loan from the corporation for such purposes because of existing constitutional inhibitions or because it has already borrowed to the full extent authorized by State or municipal law, the corporation may, upon request of the governor of such State or of the proper authorities of the municipality or political subdivision, make temporary advances for such purposes upon condition that the governor or such authorities shall agree to recommend to the legislature of the State and to the people thereof such action as may be necessary and appropriate to insure the repayment to the corporation of all amounts so advanced. Senator TOWNSEND. Would you mind adding that any Federal appropriations should be withheld until it is paid? Senator DAVIS. I do not think that it is necessary to do that, but I would not have any objection to that. I think that if the State of Pennsylvania made its request for a loan, and the request was granted, the loan would be paid back. Senator WALCOTT. Suppose the people do not vote to do that borrowing, and the money has already been loaned and spent? Senator DAVIS. I do not have any objection to that saving clause being put in. Senator WALCOTT. I think there ought to be some way of collecting it from a State. The CHAIRMAN. What was your suggestion? Senator WALCOTT. I say, in the event that the people do not vote to borrow, and the money has already been loaned to the State, the Federal Government would have no collateral and nothing at all but the pledge of the governor. How is the Federal Government going to be reimbursed unless the Federal Government has a lien on the assets of the State? |