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General MARSHALL. As an emergency man; yes.
The CHAIRMAN. A-dollar-a-year man?

General MARSHALL. No; he was in the Army. He was cominis. sioned in the Army.

The CHAIRMAN. If you could get one man in the Army to come in here and make that same statement, half of the members would fall off of their chairs. Is he an engineer?

General MARSHALL. I assume that he is.
The CHAIRMAN. You do not know then?
General MARSHALL. Mr. Hollister says he is.
Mr. HOLLISTER. He was trained as one.
General MARSHALL. He was from Indiana, I believe, originally.

The CHAIRMAN. You spoke at the outset about the Army engineers work. The Army engineers, as I understand it, prepare the plans and they figure out the limit of cost of a project. Say it is $75,000. They ask for bids on that project and say the lowest bid they receive is $85,000; the Army engineers then come in and do the job themselves and show it can be done for $75,000. Is that not correct?

General MARSHALL. They think they do.
The CHAIRMAN. Oh; they do it, do they not?
General MARSHALL. I think not.

The CHAIRMAN. There is always a disagreement between the civil engineers and Army engineers on that, and it has never been settled.

General MARSHALL. No. I say that by using an example like that you can only get into a discussion. Each side can prove its case.

The CHAIRMAN. At the same time, do not you think that is a wonderful check upon the contractors and, furthermore, it is beneficial to the Government when you have a limit of cost and make the contractor get under it.

General MARSHALL. Surely that is; but I do not think it is beneficial to the country when they are going to do the work and when they keep sixty or seventy million dollars' worth of equipment on hand to do it with which most of the time is idle, and no contractor and no business concern in the world could keep that equipment on hand and do the volume of work they are doing and stay solvent for two years.

The CHAIRMAN. But you admit that that check upon the contractor is a good thing?

General MARSHALL. Of course you have to have a check. In other words, the Government official has to know his business; that is what you are saying.

The CHAIRMAN. The Engineer Corps of the Army require the contractor to do the job according to the estimate that they think it should cost?

General MARSHALL. Surely.

The CHAIRMAN. In other words, if the Government spends a dollar, it gets 100 cents worth of work for the work it does in river and harbor work?

General MARSHALL. Surely; but they have no corner on that; other branches of the Government do the same thing.

The CHAIRMAN. Now you take it here in the construction of buildings, you select an architect to draw the plans.

General MARSHALL. Yes.

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The CHAIRMAN. The more that architect can make that building cost, the more he gets, does he not?

General MARSHALL. I do not think so.

The CHAIRMAN. Why not? He gets 4 or 5 per cent for doing his work?

General MARSHALL. I can not answer your question, because I am not positively acquainted with the method of paying him; but I would think what would be done would be this: They would say, “This building is going to be a $25,000 building, and we will pay the architect a thousand dollars, or twelve hundred dollars for draw. ing the plans and specifications. The CHAIRMAN. În some cases; but in other they do not. General MARSHALL. I would think so.

The CHAIRMAN. You take it in St. Louis, my own city, $2,225,000 has been set aside with which to construct a 10-story building. Now the architect says it is going to cost $1,250,000 more to construct that building. Of course, that architect is a high-class man; you mentioned the name a while ago-Mauran Russell and Crowelland they want to have that building as a monument to their work. Now is it reasonable to assume they are going to be as careful with the Government's money as the Government architect would be himself?

General MARSHALL. Well, the definition of that word "careful" is, I think, the essence of your statement. The local architect knows his local situation and should be able to specify there to better advantage than a man in a centralized agency, as a general proposition. Now there are going to be exceptions to everything; there are always going to be some mistakes made, some waste, some this, some that, and some the other. That is always the concomitant of everything done on earth, and one mistake does not prove anything one way or the other; a number of coincidents do. It is difficult for me to believe that the great architectural profession of this country is not better equipped, on the whole, to do our architectural work than a centralized one. It is difficult for me to believe it. The same way with engineers; they are specialized in the civilian world; there are 200,000 engineers in this country, graduates from colleges all over the country. Now, some of them develop into special lines. Now, when a specialty is required it is better to get that man who knows that specialty, than it is a leading general organization. Those theories, I think, are sound, but of course you can get into exceptions ad libitum.

The CHAIRMAN. Let me show you what the situation is there: On this one corner is the city hall, one grand granite building; over here, on this corner, is a 20-story civil courts building just completed [illustrating]. Now, across the street is a Federal job. Now, any kind of a monumental building on that site, in view of what is around it, would be sufficient, would it not?

General MARSHALL. I would think so, on your general statement.

The CHAIRMAN. There is this 20-story building that in no manner, shape, or form conforms to the city hall. Now, here is a 10-story building to go up here [illustrating]: Now, any kind of a real monumental building would fit in there?

General MARSHALL. I would judge so, from what you say.

The CHAIRMAN. Then do not you think the architect here in Washington could design a monumental building when he had the facts and figures with reference to the space needed by the various Government agencies?

General MARSHALL. Oh, he may be able to; but I think you put your point right on the sore. He has got to maintain 4 or 5 people capable of doing a monumental building, when he only has 1 in 10 years; and you ought to get a monumental expert for that monumental building and not keep experts in the Government service, all ready for that kind of service, when they only have 1 in 10 years.

The CHAIRMAN. You had the same kind of service in Cincinnati at additional cost for your public building, did you not?

Mr. HOLLISTER. That is on the city.

The CHAIRMAN. General, if you will submit for the record now something specific as to where savings can be effected, you are going to help the committee.

General MARSHALL. I said I would submit one; I did not say but one.

The CHAIRMAN. We hope you submit it.
General MARSHALL. I will.

The CHAIRMAN. And we are going to publish your suggested bill in the record at the point where you referred to it.

General MARSHALL. All right, sir.

(General Marshall submitted the following additional statement at the request of the chairman:)

I was requested at the hearing to submit an illustration of economy which would result from a consolidation of the construction functions of the Gov:ernment. In an extension of my remarks in answer to a similar question by Mr. Shafer I have in part covered the subject. At this time I desire to call attention to a realm of economy which I inadvertently did not develop in my testimony.

The point in this: It is the natural and human desire and ambition of all bureau chiefs to increase the importance and influence of their respective bureaus. This is said in no unkind spirit. As a result of this very natural desire there is a marked tendency of each bureau to regard its functions as of paramount importance and benefit to the public. Hence a constant effort is made to expand its activities, personnel, and expenditures beyond the needs of the Nation and without due regard for other public needs. In short, there developes a bureau-mindedness rather than a national-mindedness.

I am convinced that an administration of public works would evaluate proposed construction projects from a national point of view and would therefore curb ambitions which advocate injudicious expenditures. To put it another way, the administrator would be a sort of alter ego of the Director of the Budget in the evaluation of proposed Federal construction projects.

It can not be denied that the Bureau of the Budget by viewing appropriations in a national rather than a bureau sense, has saved millions upon millions of dollars. Like results will undoubtedly follow from viewing the construction needs from a national rather than a bureau sense.

(The committee thereupon adjourned until to-morrow, Saturday, March 12, 1932, at 10 o'clock, a. m.)

PUBLIC WORKS ADMINISTRATION

SATURDAY, MARCH 12, 1932

HOUSE OF REPRESENTATIVES, COMMITTEE ON EXPENDITURES IN EXECUTIVE DEPARTMENTS,

Washington, D. C. The committee met at 10 o'clock a. m., Hon. John J. Cochran (chairman) presiding.

STATEMENT OF HON. OGDEN L. MILLS, SECRETARY OF THE

TREASURY

The CHAIRMAN. Gentlemen, Secretary Mills is here and we will proceed. Mr. Secretary, we have two bills before the committee one introduced by Mr. Williamson, and one introduced by myselfproviding for an administrator of public works. I want to say, as I have stated to everyone who comes before this committee, that the bill I introduced was drawn and introduced solely for the purpose of getting the question before the committee. As the set-up, of course, will affect the Supervising Architect's Office, the committee was very anxious to hear from the Treasury Department with reference to the measure and to get such recommendations as the department sees fit to make. The committee will be pleased to let you proceed without interruption, if you so desire, until you complete your statement.

Secretary Mills. I think it would be better, Mr. Chairman, if I submitted the prepared statement which I have here; then, of course, I will be glad to answer any questions which the committee may care to ask.

The Treasury Department has been in charge of the construction of Federal buildings from the early days of our Government. There was no system of handling this work prior to 1853. At that time, so far as can be ascertained, there were 23 buildings belonging to the Government in the custody of the Treasury Department, and Congress had authorized 15 more. In his annual report for the year 1853, Secretary Guthrie says:

The construction of these buildings is confided to the department, and almost everything but the amount of the appropriation left to the discretion of the Secretary. No system had been devised for the performance of this duty, nor had the management of the business been confided to any particular branch of the department.

With a view to a more efficient management, application was made to the Secretary of War for a scientific and practical engineer, to be placed in charge of these buildings, and Captain Alexander H. Bowman of the Engineer Corps was detailed and assigned to that duty. General regulations for the conduct of the business have been adopted and sent to those in charge of the respective works, and a department of construction organized for the supervision of the whole 112189–32-12

173

*

The construction branch of the Treasury Department thus set up by the Secretary of the Treasury continued for a number of years without direct congressional recognition. The first direct appropriation for salaries of the employees in the construction branch of the Treasury appears in the deficiency appropriation act approved March 14, 1864. Thereafter appropriations have been made in one form or other for the construction branch, which soon became known and designated as the Office of the Supervising Architect of the Treasury Department. This office, while functioning as a bureau, is technically a unit of the office of the Secretary of

the Treasury. It is the instrumentality provided by Congress to enable the Secretary of the Treasury Department to give effect to public building legislation, and broadly speaking it is charged, under departmental supervision, with the duty of constructing and maintaining those public buildings which by law are placed under the custody and control of the Treasury Department. It is also empowered by law, upon the request of executive departments and independent establishments, and with the approval of the Secretary of the Treasury, to prepare plans and specifications for buildings which the heads of such departments or establishments have been authorized to construct. It has done considerable of this class of work, along diversified lines.

Unlike the ordinary architect, who turns the keys over to the owner upon the completion of a building, the Supervising Architect's duties do not end at this stake. It provides for the equipment, maintenance, and repair of such buildings as are purchased or constructed out of appropriations under the control of the Treasury. There are at this time approximately 1,528 such buildings, and the cost, including sites, was $355,570,608.42.

The Supervising Architect's Office is handling in an efficient and satisfactory manner the largest public-building program in all probability that has ever been undertaken by any government. The status of the program is as follows:

Status of $700,000,000 program as of February 29, 1932

Total specific authorization to date.

$496, 424, 692. 26 Completed, 152 buildings, total limit_

47, 391, 569. 04 Under contract, either in whole or in part, 310 projects, total limit

248, 039, 700.00 Sites purchased in the District of Columbia---

27, 368, 116.00 Bids in, on market or in the specification stage, 91 projects, total limit_

42, 352, 500.00 Drawing stage: Supervising Architect, 94 projects, total limit_

12, 570, 900.00 Private architects, 135 projects, total limit..

101, 515, 023, 22 Land owned, ready for drawings, 1 project, total limit_.

375,000.00 Sites selected, title not yet vested, 12 projects, total limit-- 9, 755, 000.00 Sites advertised for, examined, and awaiting selection, 7 projects, total limit-

2, 300,000.00 Held for amended legislation or for other reasons, 14 projects, total limit-

3, 445,000.00 Available for purchase of sites in the District of Columbia. 1, 311, 884.00

Total specific authorizations--

496, 424, 692. 26

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