COMMITTEE ON APPROPRIATIONS

SEVENTY-FOURTH CONGRESS

JAMES P. BUCHANAN, Texas, Chairman

Cont
Supt. Dre,
6-72-36

EXPENSES INCIDENT TO THE REPEAL OF THE BANKHEAD COTTON ACT OF 1934, THE KERR-SMITH TOBACCO ACT, AND THE POTATO ACT OF 1935

HEARINGS CONDUCTED BY THE SUBCOMMITTEE CONSISTING OF MESSRS. JAMES P. BUCHANAN (CHAIRMAN); EDWARD T. TAYLOR, WILLIAM B. OLIVER, JOHN N. SANDLIN, CLIFTON A. WOODRUM, JOHN J. BOYLAN, CLARENCE CANNON, JOHN TABER, ROBERT L. BACON, AND LLOYD THURSTON, OF THE COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, IN CHARGE OF DEFICIENCY APPROPRIATIONS, ON THE DAYS FOLLOWING, NAMELY:

THURSDAY, MARCH 5, 1936.

COMPLETION OF OPERATIONS INCIDENT TO THE REPEAL OF THE BANKHEAD COTTON ACT OF 1934, THE KERR TOBACCO ACT, AND THE POTATO ACT OF 1935

STATEMENT OF HON. MARVIN JONES, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS, AND CHAIRMAN OF THE COMMITTEE ON AGRICULTURE, HOUSE OF REPRESENTATIVES

The CHAIRMAN. We have Representative Marvin Jones, of Texas, chairman of the Committee on Agriculture, here this afternoon. He desires to make a statement to the committee in reference to House Joint Resolution 503, which he introduced, authorizing the completion of certain records and operations resulting from the administration of certain acts repealed and making funds available for those and other purposes.

Mr. JONES. Mr. Chairman, I introduced this particular resolution at the request of the Department of Agriculture. After this original $296,000,000 item was sent up, it was prepared as an amendment just about as it was introduced and attached to the appropriation bill. Later the Department sent up a request for substantially what is included in House Joint Resolution 503, asking that it be considered with the other, at about the time we had it ready to present. We did not want to complicate the $296,000,000 item at that time.

I do not recall whether they wanted that attached as an additional item, or whether it was to be taken out of the $296,000,000. At any rate, this particular resolution provides for allocating it out of the $296,185,000 available fund.

I think the statement of the Department in the letter of the Secretary is about as clear an explanation as could be made on this particular subject, and with the permission of the committee, I will read it, as follows [reading]:

Hon. MARVIN JONES,

DEPARTMENT OF AGRICULTURE,

Washington.

Chairman, Committee on Agriculture,

House of Representatives.

DEAR MR. JONES: It appears that the enactment of the bill (S. 3934) to repeal the Keer Tobacco Act, the Bankhead Cotton Act of 1934, and the Potato Act of 1935, which measure was approved by the President on February 10, 1936, so that the three acts were repealed effective as of that date, leaves the Government without funds to complete certain work necessary to be done relative to the administration of those acts.

In order to meet outstanding obligations, conserve Government records, and wind up the work heretofore carried out under the acts repealed, it will be necessary to furnish the Department of Agriculture and the Treasury Department sufficient funds for those purposes. The Solicitor of the Department of agriculture advises that under the language of the item for Payment for agricultural adjustment contained in the Supplemental Appropriation Act, fiscal year 1936, there is no authority to pay salaries and expenses heretofore or hereafter incurred incident to winding up and liquidating the work under the three acts, and that the existing funds available to administer those acts will not be available for any items of expense or salaries incurred after the approval of the repealing statute and, therefore, no obligation of such character should be incurred unless and until legislative authority is conferred.

To accomplish these purposes it is estimated that the following amounts will be necessary: For the Bankhead Act, $1,220,400; for the Kerr-Smith Tobacco Act, $233,700; and for the Potato Act, $25,000. These sums include unliquidated obligations accrued to date amounting to $530,000 for the Bank'head Act, $114,101 for the Kerr-Smith Act, and $22,475 for the Potato Act, a total of $666,576.

In addition to the foregoing, there is one additional item that urgently requires legislative attention at this time, as follows:

On June 25, 1934, by virtue of and pursuant to the authority vested in the President by the Emergency Appropriation Act, fiscal year 1935, there was allocated, by Executive Order No. 6747, to the Secretary of Agriculture the sum of $43,750,000 for the purchase, sale, gift, or other disposition of seed, feed, and livestock, and for the transportation thereof. On September 4, 1934, an additional allocation of $54,030,000 was made out of the $525,000,000 appropriation under Emergency Appropriation Act, fiscal year 1935, to the Secretary of Agriculture, who approved an allotment of the above amount for expenditure in the Agricultural Adjustment Administration for the purchase, sale, gift, or other disposition of seed, feed, and livestock and the transportation thereof.. Of these amounts allocated to the Secretary of Agriculture, $25,000,000 was allocated for the purchase of seed, of which $18,982,722 was expended for the purchase of approximately 20,000,000 bushels of wheat, oats, barley, flax, and sorghum, and contracts were entered into by the Secretary with some 2,500 country elevators which acted as sales agents for the transportation of seed, and the seed needs of cooperating farmers were supplied. At the termination of the act on June 30, 1935, there were, of necessity, unaudited vouchers and a large portion of some 6,000 freight bills unpaid and subject to adjustment due to weight discrepancies on shipments of seed grain.

Inasmuch as there existed some doubt as to whether or not the agricultural adjustment appropriation or the appropriation under the Jones-Connally Act was available for the performance of the administrative functions that remained to be completed, a decision of the Comptroller General was requested. His decision held that these funds were not available. It is necessary, therefore, that provision be made for the completion of this work. It is estimated that $42,825 will be necessary for this purpose, and it is therefore requested that a provision making this amount available be included in the proposed legislation. It is requested that funds for the foregoing purposes be made available out of the appropriation of $296,185,000 contained in the Supplemental Appropriation Act, fiscal year 1936, Public, No. 440, Seventy-fourth Congress, approved February 11, 1936, for meeting the obligations and commitments of the Department incurred under the Agricultural Adjustment Act prior to January 6, 1936, and for administrative expenses. It appears to be certain that that appropriation is sufficient to cover the expenditures above mentioned as well as to make the payments now authorized by it.

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Sincerely yours,

H. A. WAI LACE, Secretary.

Mr. TABER. There are two or three things I would like to know. There is a whole lot of money there for this Kerr-Smith Tobacco Act, and there is a whole lot of money for the Potato Act, and two or three other things, all of which are for future employment. I would like to have somebody tell us what there is for those people to do and how much that ought to cost, and why it is necessary to do anything in connection with those acts which are dead. The letter which the Secretary of Agriculture sent us does not cover any of those things.

Mr. JONES. I will state this, Mr. Taber, that these resolutions were requested at the time that I was very busily engaged in handling the farm bill, and I simply introduced this one and another bill of a different character. I assumed they were authorizations and expected them to go to my committee.

However, I think this measure should be considered by the Committee on Appropriations, rather than as an authorization, to be followed by an appropriation bill.

They tell me I do not furnish this as information; it is simply a statement that has been made to me-that they cannot pay any of the salaries for clearing up this matter at all, and that there were some salaries due on the 15th of February or the 1st of March that had to be left unpaid. Of course, there is a considerable amount of work to be done in winding up an activity of this character.

The Department can furnish that information, and I cannot. I expected that we would have hearings on this in our committee at the time I introduced it, and that is how it happens to be in this shape. It seems to me that it is a matter that needs immediate attention.

THURSDAY, MARCH 5, 1936.

COMPLETION OF OPERATIONS INCIDENT TO THE REPEAL OF THE BANKHEAD COTTON ACT OF 1934, THE KERR-SMITH TOBACCO ACT, AND THE POTATO ACT OF 1935

The CHAIRMAN. We have before us House Joint Resolution 503, introduced by Mr. Jones, of Texas, making $1,521,925 of the appropriation of $296,185,000, appropriated to settle up contracts of the A. A. A., available for payment of outstanding obligations and certain expenses incident to the repeal of the Bankhead Act, the Kerr Tobacco Act, and the Potato Act.

Who will explain the necessity for this?"

STATEMENTS OF W. A. JUMP, DIRECTOR OF FINANCE AND BUDGET OFFICER, DEPARTMENT OF AGRICULTURE; C. H. ALVORD AND E. L. DEAL, COTTON DIVISION; D. J. HARRILL, SUPERVISING FIELD AUDITOR, FINANCE DIVISION; F. W. DARNER, DIVISION OF TOBACCO, SUGAR, RICE, PEANUTS, AND POTATOES, AGRICULTURAL ADJUSTMENT ADMINISTRATION; AND J. E. BEETON, MISCELLANEOUS TAX UNIT, BUREAU OF INTERNAL REVENUE

Mr. JUMP. As Chairman Jones has no doubt pointed out in his conference with the committee, when the Bankhead Act, the KerrSmith Act, and the Potato Act were repealed and the Department

was left without authority under which money could lawfully be expended for winding up the affairs that are absolutely essential and necessary to an orderly cessation of these activities. Some legislation such as that which you now have before you in House Joint Resolution 503 is therefore necessary in order to make existing funds available for these purposes. We had to choose between coming before you to ask for a direct appropriation for this purpose or authority to utilize part of the $296,000,000 which you had made available for winding up the A. A. A. payments just before these three acts were repealed. The latter plan is contemplated by the resolution introduced by Mr. Jones.

I suppose you would like to take up these acts in their order, and in that event the first one would be the Bankhead Act.

The CHAIRMAN. It appears from the letter of the Secretary of Agriculture that this money is asked for clean-up expenses and to discharge obligations existing at the time of the repeal on February 10, 1936, of the Bankhead Cotton Act, the Kerr Tobacco Act, and the Potato Act.

According to his letter, the $1,479,100 provided in the resolution on account of these three acts is as follows:

Bankhead Act-.

Tobacco Act__.

Potato Act_.

Total_

$1, 220, 400 233,700

25,000

1,479, 100

Then there is $42,825 for auditing freight bills and other administrative expenses in connection with the purchase and sale of seeds. under the allocations to the Secretary of Agriculture for the purchase and sale of seed made pursuant to the emergency appropriation act, fiscal year 1935.

These four sums make the total of $1,521,925 which the resolution proposes to make available.

I will place in the record at this point the statement which Mr. Jump has just handed me showing the revised break-down of the amounts requested by the resolution.

(Statement referred to is as follows:)

Estimated amount needed to pay unliquidated encumbrances and necessary administrative expenses for purpose of completing work relating to the liquidation of certain repealed acts