FEDERAL COOPERATION IN UNEMPLOYMENT RELIEF

MONDAY, MAY 9, 1932

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON MANUFACTURES,

Washington, D. C. The subcommittee met, pursuant to call, at 10 o'clock a. m., in the committee room, 224 Senate Office Building, Senator Robert M. La Follette, jr., chairman, presiding.

Present: Senators La Follette (chairman), Cutting, Wheeler, and Costigan. Also Senators Sheppard and Wagner and Congressman

Lewis.

Senator LA FOLLETTE. The committee will be in order.

This subcommittee has under consideration S. 4592, introduced by Senator Costigan, which will be incorporated in the hearings at this point.

(The bill is as follows:)

[S. 4592, Seventy-second Congress, first session]

A BILL To provide for cooperation by the Federal Government with the several States in assisting persons, including veterans of the World War, who are suffering hardship caused by unemployment, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) for the purpose of cooperating with the several States in providing temporary emergency relief from the hardship resulting from unemployment, there is hereby created a special fund in the Treasury to be known as the emergency relief fund and to be administered by the Federal Emergency Relief Board created by section 2. For the purpose of providing funds to carry out the provisions of this act the Secretary of the Treasury is authorized and directed to borrow from time to time on the credit of the United States, not to exceed $500,000,000, and to issue bonds therefor, to be known as emergency relief bonds, in such form as he may prescribe. Such bonds shall be in denominations of not less than $50, shall mature ten years from the date of their issue, and shall bear interest at such rate as may be fixed by the Secretary of the Treasury, but not to exceed 4 per cent per annum. The prin cipal and interest of such bonds shall be payable in United States gold coin of the present standard of value, and such bonds shall be exempt, both as to principal and interest, from all taxation (except estate, gift, and inheritance taxes, and surtaxes) now or hereafter imposed by the United States, by any Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority.

(b) Such bonds shall be first offered at not less than par, as a popular loan, under such regulations to be prescribed by the Secretary of the Treasury as will give all citizens of the United States an equal opportunity to participate therein. Any portion of the bonds so offered and not subscribed for may be otherwise disposed of by the Secretary of the Treasury at not less than par. No commissions shall be allowed or paid in connection with the sale or other disposition of any such bonds. All amounts derived from the sale of such bonds shall be paid into the Emergency Relief Fund.

(c) All moneys in such fund are hereby authorized to be appropriated for allocation to the several States by the Federal Emergency Relief Board, and for other expenditures as provided in section 3 (b).

1

SEC. 2. (a) There is hereby created a Federal Emergency Relief Board (hereinafter referred to as the board), which shall consist of four members to be appointed by the President, by and with the advice and consent of the Senate! No more than two members of the board shall be of the same political party. The board shall have full power of allocation of funds under the provisions of this act, and shall exercise the functions provided for in this act. The members of the board shall elect their own chairman, and shall receive no compensation for their services as members, except that the members shall be paid a per diem compensation of $25 for time devoted to the work of the board, and necessary traveling and subsistence expenses, within the limitations prescribed by law for civilian employees in the executive branch of the Government. The board shall cease to exist upon the expiration of two years after the date of enactment of this act, and upon the termination of the board's existence all unexpended moneys held by it shall be covered into the Treasury as miscellaneous receipts.

(b) The Chief of the Children's Bureau in the Department of Labor shall be the executive officer of the board and, with the approval of the board, may appoint and fix the compensation of such experts and, subject to the provisions of the civil service laws, appoint, and, in accordance with the classification act of 1923, as amended, fix the compensation of such other officers and employees as are necessary to carry out the provisions of this act; and may make such expenditures (including expenditures for personal services and rent at the seat of government and elsewhere and for printing and binding) as are necessary to carry out the provisions of this act.

SEC. 3. (a) Sixty per centum of the amounts appropriated pursuant to this act shall be apportioned among the several States and the District of Columbia in the manner hereinafter provided, in the proportion which their population bears to the total population of the States of the United States and the District of Columbia according to the Fifteenth Decennial Census. Payments made in any year out of the amount of the appropriations apportioned to any State or to the District of Columbia on the basis of population shall not be in excess of twothirds of the amounts appropriated or otherwise made available for such year by the State, by the civil subdivisions thereof, and/or by private contributions from within the State, to be expended for emergency relief as defined in section 10 of this act.

(b) The balance of the amounts appropriated under this act shall be available (1) for administrative expenses of the Federal agencies under this act, and (2) as a reserve fund for emergency allotments, as provided in section 8, to the States where the amounts apportioned on the basis of population are insufficient to meet the need.

(c) The amounts apportioned or allocated to any State under this act shall be available for payment to and expenditure by such State, for the purposes of this act, until the expiration of two years after the date of enactment of this act; except that at the expiration of the fiscal year 1933, if the amount certified prior to the expiration of such year for payment to any State out of amounts apportioned on the basis of population under this act in the manner hereinafter provided is less than one-half of the total amount apportioned to that State on the basis of population, the difference between the amount so certified and one-half of the total amount apportioned shall be added to the reserve fund and shall be available for allotment to the several States on the basis of need.

(d) So much, not to exceed $350,000, of the appropriations set aside in the reserve fund, as the Chief of the Children's Bureau with the approval of the board shall estimate to be necessary for administering the provisions of this act, shall be deducted for that purpose, to remain available until expended.

(e) If the State agency designated or created in accordance with section 4 of this act, shall certify to the board that it is without the funds necessary to obtain the information specified in section 5 of this act as a basis for State plans, the board may authorize immediate payment to such State of not to exceed $5,000, and the amount of any such payment shall be deducted from the apportionment to such State on the basis of population.

SEC. 4. (a) In order to obtain payments out of the appropriations authorized in section 1 of this act a State, through its legislative authority, shall designate or create a State agency to cooperate with the board; except that if the legislature of any State is not in session and has not made provision to that end, the governor of such State may designate or create an agency to cooperate with the board. In any State having a State department of welfare or charities such department shall administer the provisions of this act, except that in any State in which, in accordance with the law of the State, there has been set up a special

emergency organization for the administration of relief, such special State agency may be the administrative agency of the State under this act.

(b) Relief shall be administered within each State under rules and regulations adopted by the State authorities.

SEC. 5. Any State making application for funds under this act shall, by the agency designated or created to cooperate with the board, submit at such times and for such periods as may be prescribed by the board plans for carrying out the provisions of this act within such State. The plans shall include (1) information as to the amounts actually expended for relief by public and private agencies in the State for such periods as the board may prescribe; (2) estimates of the amounts appropriated or otherwise made abailable; (3) amounts necessary to meet the emergency relief needs in the State in the fiscal year ending June 30, 1933, and, upon call of the board, in the fiscal year ending June 30, 1934; and (4) shall make provision for adequate administrative personnel, and for securing the benefits contemplated by this act to persons within the State, irrespective of the period of residence within the State. When such plans are in conformity with the provisions of this act and reasonably appropriate and adequate to carry out its purposes, they shall be approved by the board, and due notice of such approval shall be given to the State agency.

SEC. 6. Within ten days after an appropriation has been made under authority of this act, the Chief of the Children's Bureau as the executive officer of the board shall make the apportionment on the basis of population provided in this act, shall certify to the Secretary of the Treasury and to the treasurers of the several States the amount apportioned to each State on the basis of population, and certify to the Secretary of the Treasury the amount estimated to be necessary for administering the provisions of this act. Such estimate shall be subject to subsequent review and revision by the board.

SEC. 7. Within thirty days after an appropriation has been made under the authority of this act, and as often thereafter while such appropriation remains available as conditions may warrant, the board shall certify to the Secretary of the Treasury, as to each of the several States, (1) whether the State has designated or created an agency to cooperate with the board in compliance with the provisions of this act; (2) the amounts, if any, which have been made available by such State, including funds made available by civil subdivisions thereof and private contributions from within the State; (3) whether plans have been submitted and accepted pursuant to the provisions of this act; and (4) the amount of the payments, if any, to which the State is entitled under the provisions of this act. Such certificate unless revoked as provided in section 9 of this act shall be sufficient authority to the Secretary of the Treasury to make payments to the State in accordance therewith.

SEC. 8. (a) Whenever, from the statement furnished by the State agency and verified by the board, it appears that the combined moneys available from local and State funds within the State, supplemented by any moneys paid or to be paid to the State from the apportionment on the basis of population, will fall below the estimated needs for emergency relief in any State, the board shall consider the State eligible for allotment of the reserve funds to be allotted to the several States on the basis of need; but no such allocation shall be made to any State unless the board is satisfied that the State or its political subdivisions have made reasonable efforts within their resources to provide for emergency relief expenditures.

(b) The board is authorized, either in cooperation with the several States, through special grants or otherwise, or by such other means and agencies as it may determine, to make payments out of the reserve fund for the purpose of extending relief to migratory workers and their families, who are not obtaining relief under State plans.

SEC. 9. Each State agency cooperating with the board under the provisions of this act shall make such reports concerning its operations and expenditures as shall be prescribed or requested by the board. The board may revoke any existing certificate or withhold any further certificate provided for in section 7 whenever it shall determine, as to any State, that the State agency has not properly expended or supervised the expenditure of moneys paid to it in accordance with the plans approved under this act. Before any such certificate shall be revoked or withheld from any State the board shall give notice in writing to the State agency stating specifically wherein the State has failed to comply with such plans.

SEC. 10. The term emergency relief," when used in this act with respect to State expenditures, means relief in the form of money or commodities furnished by the State or its civil subdivisions or by private contributions from within the