sale of community structures to cooperatives of homesteaders and also the loan of operating capital to any such cooperative duly obligated to conduct or aid in community enterprises.

SUBSISTENCE HOMESTEADS-SEC. 208, CHAP. 90, NATIONAL INDUSTRIAL RECOVERY ACT-FUNCTION AND SCOPE.

Generally, undertakings reasonably calculated so to improve the economic status of homesteaders that they will be better able to pay for them, or undertakings reasonably calculated to create an environment appropriate for a residential community under presently accepted standards of living, are embraced within the conception of aiding in the purchase of subsistence homesteads.

SUBSISTENCE HOMESTEADS-FEDERAL SUBSISTENCE HOMESTEADS CORPORATION— POWERS.

The Federal Subsistence Homesteads Corporation may construct and equip schools, community buildings, roads and other community facilities, and dispose of them by sale or such dedication as will make them available to a subsistence homestead community.

SUBSISTENCE HOMESTEADS-FEDERAL SUBSISTENCE HOMESTEADS CORPORATION—

INHIBITIONS.

The Federal Subsistence Homesteads Corporation may not lend financial aid to private enterprises to be conducted within subsistence homestead communities for profit and not primarily for the benefit of the homesteaders. SUBSISTENCE HOMESTEADS-SEC. 208, NATIONAL INDUSTRIAL RECOVERY ACT. Section 208, Chapter 90, of the National Industrial Recovery Act, does not contemplate that community buildings or facilities shall be supplied to homesteaders gratuitously, but requires that the cost thereof shall be repaid into the subsistence homestead revolving fund.

SUBSISTENCE HOMESTEADS-FEDERAL SUBSISTENCE HOMESTEADS CORPORATIONLEASES OF LAND TO INSTRUCTORS.

The Federal Subsistence Homesteads Corporation may lease plots to teach ers, social workers and technicians who serve a subsistence homestead community.

SUBSISTENCE HOMESTEADS-FEDERAL SUBSISTENCE HOMESTEADS CORPORATION— TEMPORARY OCCUPANCY OF LAND.

The Federal Subsistence Homesteads Corporation may permit such temporary occupancy of land acquired for a subsistence homestead project as it may deem expedient whenever it has been administratively determined that such property is not immediately useful for subsistence homestead purposes. SUBSISTENCE HOMESTEADS-INTEREST EARNED DISPOSITION.

Interest earned by subsistence homestead expenditures must be covered into the Treasury of the United States as "miscellaneous receipts."

MARGOLD, Solicitor:

Twelve questions propounded by the Director of Subsistence Homesteads have been referred to me for opinion. These questions have arisen in connection with the administration of Section 208 of the National Industrial Recovery Act by the Federal Subsistence Homesteads Corporation.

A Solicitor's opinion dated June 15, 1934 (M-27702), was responsive to an earlier submission of the Director of Subsistence Home

steads concerning the activities of Federal Subsistence Homesteads Corporation. The history of the corporation and its method of doing business were the subject of a preliminary statement of fact in the opinion of June 15, 1934. It seems unnecessary to repeat that statement here.

The present submission of the Director of Subsistence Homesteads is in the following language:

It is planned to organize the homesteaders of some of the subsistence homestead communities into co-operatives. Each of such co-operatives will be organized under the laws of the particular state in which the project is located. All of the homesteaders will become members of the co-operative, and only the homesteaders will be admitted to membership. (In some instances, however, a small number of individuals, not homesteaders, who are especially qualified as technical personnel, may be likewise admitted to membership). The existence of such co-operatives of homesteaders will enable the carrying out of several experimental forms of community organization which are being considered.

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1. May Federal Subsistence Homesteads Corporation (hereinafter referred to as the Corporation") convey land and buildings to the co-operative of the homesteaders, rather than directly to the homesteaders, the co-operatives in turn to execute leases of individual tracts to homesteading families? (This procedure is being considered for some projects because it will enable all the properties to be co-operatively owned, and will avoid speculation by individual homesteaders on a rise in land values.)

2. May the Corporation, after entering into contracts with individual homesteading families for the outright sale to such families of small homestead tracts and dwellings, convey to the co-operative of homesteaders a tract of land to be held by such co-operative for use as pasture, woodland, cemetery plot, athletic field, playground, parks, general farm, or general orchard, for the equal benefit of all of the homesteading families? (It is frequently uneconomical to break up all the land into individual homestead tracts; the topography and nature of the soil, and the location of the individual tracts frequently make it desirable, or even imperative, that a large piece of land be set aside for pasture, woodland, play-ground, general farm, etc., for the equal benefit of all the homesteaders; so, too, some crops intended for the use of the homesteaders can be grown more economically on one large general farm or general orchard, in the products of which all the homesteaders may share.)

3. May the Corporation expend money made available in Section 208 to construct and equip any or all of the below listed properties, and then convey such properties to the co-operative of the homesteaders which will operate the properties, so as to give employment to some homesteaders, and make available to all homesteaders products, services and materials at cost:

(a) A dairy or poultry farm? (A herd of 100 cows may be adequate to supply milk, cream, cheese and butter for 200 families; one large poultry and dairy farm can more economically and efficiently provide for the needs of 200 families than 200 separate small farms. In such cases it is contemplated to have the livestock and equipment owned by the co-operative, with all homesteaders sharing equally in the products.)

(b) A general merchandise store? (It is desired to secure the economies of large scale purchases of food and other staples, seed, fertilizer,

clothing, and other general small articles, which may then be sold to homesteaders at cost.)

(c) A first-aid clinic or small hospital? (This can be inexpensively equipped. Where it is many miles to the nearest hospital, this may be essential. A nurse or doctor may be included among the homesteaders.)

(d) A small handicraft shop or factory? (To provide employment for cash income for some of the homesteaders, to manufacture small articles needed by the homesteaders, and to enable all the homesteaders to share in any profits from the sale of such articles.) 4. May the Corporation make a loan to such a co-operative of the homesteaders for operating capital?

5. May the Corporation make a loan to a private industry for operating capital where part of the consideration for such loan will be an undertaking by the borrower to employ the homesteaders so as to supply them with a source of cash income? May the Corporation sell or lease a small tract of land to such an industry? (Some such inducement is frequently necessary to induce an industry to locate near the subsistence homestead community.)

6. May the Corporation purchase and then sell to the co-operative of homesteaders farm implements and farm machinery? (Heavy farm machinery is sometimes needed for economical operation of the agricultural tracts. It is frequently uneconomical, however, for each of the homesteaders to attempt to purchase or lease such machinery. It is contemplated to have such machinery purchased by the co-operative and made available for use by all homesteaders as needed.)

7. May the Corporation build, equip and convey to the co-operative of homesteaders a school building? May the Corporation make a gift of such completed school building to the co-operative of homesteaders? (Frequently the local county or township is not in financial position to build and equip a needed school building for the community, and existing school facilities may be totally inadequate to meet the increased demand. If such a building can be supplied without cost to the county, the county will frequently be willing to pay the salaries of teachers and to meet other operating expenses.)

8. May the Corporation build and equip a community house, containing study rooms, reading rooms, assembly hall, kitchen, and similar facilities, and then convey such community house to the co-operative of homesteaders? May the Corporation make a gift of such community house to the co-operative of homesteaders?

9. May the Corporation set aside a small number of homestead tracts to be leased to teachers, social workers, and professional technicians? (It is fre quently desirable to include in the community individuals who can render special services, but who do not wish to become permanent homesteaders. Such special services are those which teachers, social workers, agricultural experts, and others, may provide. It would be desirable to secure their residence within the community by leasing homes to them from year to year.)

10. After a community plan has been laid out for the establishment of a subsistence homestead community, may the Corporation convey to the local counties, or dedicate to the public, the following: roads, streets, walks, parks, and parkways, which have been constructed with moneys made available in Section 208? (After such dedication, the expense of maintenance is assumed by the local authorities.)

11. Should moneys paid to the Corporation by homesteaders as interest on amortization or on advances made by the Corporation, be deposited to the

credit of the revolving fund created in Section 208, or should such payments be covered into the Treasury as miscellaneous receipts"?

12. Where part of the land which has been acquired cannot immediately be used by the Corporation for building or other operations, may such land be temporarily leased by the Corporation? Should the rentals from such leases be deposited to the credit of the revolving fund or covered into the Treasury as "miscellaneous receipts"?

The first question concerns a proposal that the Federal Subsistence Homesteads Corporation "convey " land and buildings to "co operatives of homesteaders", and that each co-operative in turn lease home sites to homesteading families.

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Authority for the conduct of any subsistence homestead enterprise must be found in Section 208 of the National Industrial Recovery Act (48 Stat. 195, 205). That section permits the use of an appropriated fund “for aiding in the purchase of subsistence homesteads." In a decision concerning this section, rendered to the Secretary of the Interior October 4, 1933, the Attorney General stated that," while land may be purchased and houses built thereon with a view to reselling them to homesteaders', it should be borne in mind that the statute necessarily contemplates that the persons who occupy the land and the houses erected thereon will actually purchase them." In concluding this opinion the Attorney General added: "You may enter into such agreements with settlers and prospective settlers as you may find proper for any land, having in mind, however, in addition to the other things suggested, that the settlers must be purchasers, or properly obligated prospective purchasers of the land which they occupy." The question now propounded by the Director of Subsistence Homesteads makes it necessary to decide whether the purchase of subsistence homesteads must be by the homesteaders individually, or whether an organization or association of homesteaders may be the purchaser of a community of home sites.

It is significant that Section 208 contains no detailed directions for or restrictions upon the expenditure of the subsistence homestead appropriation. Moreover, the appropriated sum of $25,000,000 is plainly insufficient for curing the evil of overpopulation in industrial centers. Undertakings of Federal Subsistence Homesteads Corporation, therefore, must be essentially experimental, pointing the way for larger undertakings of similar character. Such experimentation involves the trial of projects of many types, variously organized. While the statute requires that there be a purchase of subsistence homesteads, I cannot find that the letter of the law forbids purchase by an organized group of homesteaders and occupancy by the individual homesteader under a leasing agreement with the group. And, if such a plan seems a worth while experiment, the undertaking would seem to carry out the intention of Section 208.

Since neither the form of co-operative organization nor the manner of Federal control over selection of homesteaders and development of projects under such a form of organization has been evolved, particular criticism of the proposal is difficult. It is quite possible, however, that complication of structure would result without compensating advantage. My answer to question 1, therefore, is in the affirmative, without expression of opinion, however, upon the desirability of undertaking the proposed experiment.

Certain general observations seem pertinent and properly preliminary to consideration of the second and following questions. In a Solicitor's opinion dated June 15, 1934, the conclusion was reached that a subsistence homestead may properly include a home site and such incidental equipment and chattel property as may be essential to the support and maintenance of a family. It also seems reasonable to assume that Congress intended that subsistence homesteads be, not isolated shelters of pioneer families, but homes in an improved community. It is the purchase of such homes which is the subject of Section 208 of the National Industrial Recovery Act. Federal Subsistence Homesteads Corporation is authorized to employ an appropriated fund " for aiding in " such purchases. Every expenditure of this appropriated fund must justify itself as a reasonable method of aiding in the purchase of subsistence homesteads. However, the choice of methods of aiding involves broad administrative discretion. Undertakings which have as their immediate objective, either (1) the improvement of the economic status of the homesteader so that he may better be able to pay for his homestead, or (2) the creation of an environment appropriate for a residential community according to presently accepted standards of living, seem reasonable methods of aiding in the purchase of subsistence homesteads.

Section 208 of the National Industrial Recovery Act is one phase of a legislative scheme for relieving a national emergency. The "redistribution of the overbalance of population in industrial centers" is the express purpose of the section. It must have been recognized by Congress when it enacted this section, and it must be recognized now, that subsistence homesteads established to serve such an end must be located in rural or suburban areas. Moreover, it must have been realized that many subsistence homesteads would be occupied by families which had not been self-supporting in their former environment. Therefore, the mere physical removal of families to a new place and their installation in new homes under purchase contracts would be a futile gesture and could not have been contemplated by Congress. Economic advantages and opportunities must be provided in order that the homesteaders may pay for their homes and at the same time earn a reasonable subsistence. To afford or assist in affording such economic advantages and opportunities