Senator TAFT. In other words, the total effect of this bill, so far as the next 12 months' period is concerned, would be to add $20,000,000 to the appropriation for the Rural Electrification Administration? Mr. ADAMS. The total effect of the bill would exceed that, because the contractors spent considerable in excess of that amount. Senator TAFT. Does this bill accomplish anything for you except to relieve you from going to the Appropriations Committee and asking for money? What purpose does the bill accomplish that could not be accomplished by appearing before the Appropriations Committee for supplementary funds? Mr. ADAMS. Except for this bill or some similar legislation the R. E. A. would be confined to $40,000,000 which is authorized in the Rural Electrification Act of 1936. This permits an enlarged program which will permit more farmers in the United States to receive electricity. Senator TAFT. My question is: What is accomplished by this bill that cannot be accomplished by an appearance before the Appropriations Committee with a supplementary estimate? Does this bill accomplish anything except to relieve you from the check of the Appropriations Committee on your expenditures? Mr. ADAMS. Senator, except as the Congress, in making available to us an extra $100,000,000 last year and considering making available to us this additional amount for rural electrification, the Rural Electrification Administration has always proceeded under the 1936 act which authorized an expenditure of approximately $40,000,000 a year. Senator TAFT. Do you mind answering my question? What is accomplished by this bill that could not be accomplished by appearing before the Appropriations Committee and asking for additional funds? Senator BARKLEY. Of course, merely appearing before the Appropriations Committee does not accomplish anything. Senator BYRNES. There is no authorization for anything in excess of $40,000,000? Mr. ADAMS. No. Senator BYRNES. And without an authorization the Appropriations Committee could not make an appropriation. You know that, do you not? Mr. ADAMS. Yes, sir. Senator TAFT. Of course they did that last year. They had both an authorization and an appropriation. Senator BYRNES. They can put it in the form of an authorization just as this committee can. The CHAIRMAN. This is also a standing committee of the Senate. Senator BARKLEY. You started with a 10-year program of $400,000,000, to be worked out in 10 years. You have still got 7 years of that to go, and at the rate of $40,000 a year, that would be $280,000,000 that you can spend over the next 7 years. One thing that this bill does is to increase that possible expenditure from $280,000,000 to $600,000,000 or $500,000,000 outside of the appropriation already made? Mr. ADAMS. Yes. Senator BARKLEY. In other words, it adds a possible $320,000,000 which you can expend for this purpose over the 7-year period to which I have referred? Mr. ADAMS. Yes. Senator BARKLEY. In view of applications which have been received and the interest of the rural sections in the R. E. A. program and the practically entire absorption of the $140,000,000 to which you have referred, do you think that this amount of money will be absorbed for this purpose by the people throughout the country, over that period? Mr. ADAMS. Senator, I can only add that after all these funds are spent, in addition to those which we have up to now, there will be still in the United States approximately 55 percent of the farms without electric service. Senator BYRNES. I would like to ask you now with reference to those applications. I wish you would put into the record a statement of the applications that you have investigated, the States, and the amounts involved. Can you do that? Mr. ADAMS. Yes. Senator BARKLEY. I have got to go, Mr. Chairman. I would like to say that I want the Secretary to put into the record the figures with respect to all these agencies that he has in mind or at handthe number of men that would be employed, the amount of materials furnished. I do not care about details and breaking the figures down. It is the total in which I am interested. Mr. MORGENTHAU. We will be prepared to do that, Senator Barkley. Senator BARKLEY. I am sorry that I have to leave. (The following letter and exhibits were subsequently submitted:) Hon. ALBEN W. BARKLEY, United States Senate. JULY 20, 1939. My dear SENATOR: I am attaching a statement and five tables which have been prepared under the direction of Isador Lubin, Commissioner of Labor Statistics, Labor Department, in response to your request that I furnish for the record statistics on the employment and use of materials which will grow out of the enactment of S. 2759, the self-liquidating program now under consideration by your committee. Sincerely yours, H. MORGENTHAU, Jr. ESTIMATES OF THE AMOUNT OF LABOR CREATED BY FEDERAL LOANS OR EXPENDITURES FOR CONSTRUCTION PROJECTS (Statement by Isador Lubin, Commissioner of Labor Statistics, Before the House Banking Committee, July 19, 1939, on Self-Liquidating Projects Act) The construction of public works has long been a first line of defense against unemployment in periods of depression. In judging the effectiveness of any program of public works as a means of reemployment, several groups of workers must be considered. First, there are the men who work on the job itself. They are carpenters, bricklayers, stone masons, ditch diggers, cement finishers, and a host of other skilled, semiskilled, and unskilled men who work with them. Second, there are the men in the factories who provide the brick, cement, lumber, and steel to be used on the job. Back of them are the miners, the loggers, and others who supply the raw materials for the factories; and last, there are the men on transportation systems which carry the materials to the factories and later to the job. Employment of these secondary groups of workers is just as important in any reemployment program as the employment of men at the site of construction. For a great many types of public works the materials, man-hours, and transportation men are numerically more important than the men working at the site of the construction projects. The vast majority of contractors and subcontractors working on construction projects financed in whole or in part by Federal funds send monthly reports to the Bureau of Labor Statistics showing the number of employees, amounts of pay rolls, and man-hours worked at the site of each construction project. Each contractor also notifies the Bureau of the type and value of materials which he purchases for these projects as well as the source of his supplies. This provides a record of the total value of materials used in relation to the cost of the job and to the size of the site pay roll. On the basis of the information furnished by the suppliers of these materials, the Bureau makes estimates of the number of man-hours of labor required in the manufacture and fabrication of these materials. Beyond this labor consumed in the manufacturing of these products purchased by the contractor is other labor used in making the raw materials that went into their production. For steel, cement, lumber, brick, plumbing and heating supplies, electrical products, and sand and gravel, the Bureau has traced the record far back along the line to the original supplies of raw materials. Mines, railroads, factories, and shipping lines opened their records for the personal inspection of the agents of the Bureau so that these facts could be obtained. The studies of the Bureau of Labor Statistics have now segregated the benefits to industry and employment arising from each major type of public works construction. They show what happens to men and machines when various types of public works construction projects are undertaken. With the material from these surveys, it is possible to forecast with a reasonable degree of accuracy, the results which might be expected from new construction programs. For example, for each $100,000,000 spent for non-Federal public works of the sort that were constructed under Public Works Administration, the Bureau estimates that there will be 34,400,000 hours of labor created at the construction site, and that 65,700,000 hours of work will be created in mines, forests, factories, and on transportation systems. (See table 1.) In addition to the number of hours of employment created in fabricating the materials, the Bureau's studies also show the dollar value of orders which factories may expect from different types of programs. For example, in a $100,000,000 building construction program, iron and steel mills may expect orders valued at $15,000,000; lumber and millwork firms, orders in the amount of $5,300,000; brick and tile plants, orders in the amount of $4,200,000, etc. For every $100,000,000 spent for self-liquidating transportation projects, approximately 47,500,000 hours will be created at the construction site and 66,900,000 hours in mines, forests, factories, and on transportation systems. (See table 2.) A rural electrification program of $100,000,000 will create approximately 34,000,000 hours at the site and approximately 47,000,000 hours in mines, forests, factories, and on transportation systems. (See table 3.) The program would provide for the installation of approximately 460,000 miles of line. This would involve among other things the purchase of 9,200,000 poles, 1,150,000 meters, 1,000,000 transformers, 400,000,000 pounds of copper, aluminum and steel. The program would serve a minimum of 1,150,000 rural familites. In addition to the foregoing the construction of these new lines would, during the first 6 months they were energized, result in the installation of approximately $115,000,000 of home wiring and the purchase of over $230,000,000 of home electrical appliances purchased by the families receiving electric service for the first time. Since approximately one-half of the cost of wiring represents labor (including that of the contractor) and one-half represents the cost of wiring materials, a market will be created by this program of over $230,000,000 for appliances and approximately $57,500,000 of wiring materials such as insulated copper conductor, outlets and switches. The figure on appliances is low; purchases during the second 6-month period would raise the total perhaps as much as 25 percent. Included in the appliances purchased during the first 6 months of service would be approximately the following totals: 1,000,000 radios, 950,000 hand irons, 550,000 washing machines, 300,000 refrigerators, 275,000 toasters, 200,000 water pumps, 200,000 vacuum cleaners, 100,000 small motors. So far we have been talking about the benefits the durable-goods manufacturers receive from public-works construction. The manufacturers and vendors of consumers' goods and services also benefit by public-works expenditures. From its studies of family expenditures, the Bureau has determined approximately how wage-earner families spend their earnings. It is estimated that a $100,000,000 Senator BARKLEY. In view of applications which have been received and the interest of the rural sections in the R. E. A. program and the practically entire absorption of the $140,000,000 to which you have referred, do you think that this amount of money will be absorbed for this purpose by the people throughout the country, over that period? Mr. ADAMS. Senator, I can only add that after all these funds are spent, in addition to those which we have up to now, there will be still in the United States approximately 55 percent of the farms without electric service. Senator BYRNES. I would like to ask you now with reference to those applications. I wish you would put into the record a statement of the applications that you have investigated, the States, and the amounts involved. Can you do that? Mr. ADAMS. Yes. Senator BARKLEY. I have got to go, Mr. Chairman. I would like to say that I want the Secretary to put into the record the figures with respect to all these agencies that he has in mind or at handthe number of men that would be employed, the amount of materials furnished. I do not care about details and breaking the figures down. It is the total in which I am interested. Mr. MORGENTHAU. We will be prepared to do that, Senator Barkley. Senator BARKLEY. I am sorry that I have to leave. (The following letter and exhibits were subsequently submitted:) JULY 20, 1939. Hon. ALBEN W. BARKLEY, United States Senate. My dear SENATOR: I am attaching a statement and five tables which been prepared under the direction of Isador Lubin, Commissioner of Labor istics, Labor Department, in response to your request that I furnish fc record statistics on the employment and use of materials which will grow the enactment of S. 2759, the self-liquidating program now under consid by your committee. Sincerely yours, H. MORGENTHA ESTIMATES OF THE AMOUNT OF LABOR CREATED BY FEDERAL LOANS OR ITURES FOR CONSTRUCTION PROJECTS (Statement by Isador Lubin, Commissioner of Labor Statistics, Before Employment of these secondary groups of wor reemployment program as the employment of For a great many types of public works the ma tion men are numerically more important than construction projects. have Stat or the out of ration Jr. EXPEND The vast majority of contractors and subcontractors working on constructform projects financed in whole or in part by Federal funds send monthly reports to the Bureau of Labor Statistics showing the number of employees, amounts of pay rots, and man-hours worked at the site of each construction project. Each contractor also hotties the Bureau of the type and value of materials which he purchases for these projects as well as the source of his supplies. This provides a record of the total walle of materials used in relation to the cost of the job and to the size of the site pay TOLL On the basis of the information furnished by the suppliers of these materials, the Burean makes estimates of the number of man-hours of labor required in the manufacture and fabrication of these materials. Beyond this labor consumed in the manufacturing of these products purwhrased by the extractor & other labor used in making the raw materials that went into their production. For steel, cement, lumber, brick, plumbing and beamng suppes, electrical products, and sand and gravel, the Bureau has traced the record far back along the line to the original supples of raw materials. Mines, railroads, factories, and shipping ines opened their records for the personal inspection of the agents of the Brean so that these facts could be obtained. The studies of the Bureau of Labor Statistics have now segregated the benefits to industry and employment arising from each major type of patue works conThey show what happens to men and machines when various types of pratile works construction projects are undertaken. With the material from these surveys, it is possible to forecast with a reasonable degree of accuracy, the results which might be expected from new construchom programs. For example, for each $1000000.000 spent for co-Federal poble works of the sort that were constructed under Plate Works Administrare, the Brear estimates that there will be 34.400.000 boars of labor created at the con struction she, and that 65.700.000 bots of work will be created in mines, forests, factories, and co transportation systeTIS. See table L In addition to the number of bours of employment created in fabricating the materials, the Burean's studies also show the dollar value of orders which factories may expect from different types of progres For example, in a $100.000 (0.000) building castruction program, iron and steel mills may expect orders valued at $15.000.000: Immber and millwork firms, orders in the amount of $5.300.000: bojek and the plants, orders in the sort of $4.200.000, etc. For every $100.000.000 spent for self-liquidating transportation projects, approximately 47,500,000 bors will be created at the constructive site and 6900.000 hours in mines, forests, factories, and on transportation systems. tatue 2.. See A rural electrification program of $100.000.000 will create approximately 34.000.000 Borrs at the site and approximately 47.000.000 bours in mines, forests, factories, and on transportation systems See table 3) The program would provide for the installation of approximately 460.000 miless of line. This would involve among other things the purchase of 9.200.000 poles, 1,150,000 meters, 1.000.000 transformers, 400,000,000 pounds of copper, and steel. The program would serve a minimum of 1.150.000 rural families. In addition to the foregoing the construction of abese new lines would, during The first 6 months they were energized, result in the installation of approximately 15,000,000 of home wiring and the purchase of over $230.000.000 of home etrical appliances purchased by the faces receiving ebecare service for the st time. ST cluding th als, a m ces and a ductor Bebon Include roximately one-half of the cost of wiring represents labor contractor) and one-half represents the cost of wiring macreated by this program of over $230,000,000 for appliy $57.500.000 of wiring materials such as insulated copper winchess The figure on appliances is low; purchases during iod would raise the total perhaps as much as 25 percent. iances purchased during the first 6 months of service would following totals: 1.000.000 radios, $50.000 band irons. imes, 300.000 refrigerators, 275.000 toasters, 200.000 water Im cleaners. 100,000 small motors. talking about the benefits the durable-goods manufacturers works construction. The manufacturers and weadors of Il services also benefit by pubile-works expenditures. From expenditures the Bureau has determined approximately ilies spend their earnings. It is estimated than a $100,000,000 |