Then there is an apparent increase of $6,635 due to the transfer of this amount from the appropriation "Compensation, mechanical shops and power plants." With the Department of the Interior operating our mechanical shops, it will be necessary for the office of the Secretary to reimburse that Department for any necessary work performed in connection with the operations of that organization-repairing chairs, typewriters, or any other incidental things. The change in language is recommended to permit the dropping of the authorization for the expenditure of funds for building maintenance and upkeep, to permit the replacement during the fiscal year 1935 of an automobile used by the Secretary of Agriculture, and to provide authorization for the operation of the central storeroom of the Department during the fiscal year 1935. This appropriation is a miscellaneous expense appropriation which takes care of not only the cost of providing necessary materials for the office of the Secretary but also general charges, such as postage, drayage, freight and express, laundry, telegraph, telephone, ice, travel expenses for the Secretary's office, and so forth. RENT OF BUILDINGS IN THE DISTRICT OF COLUMBIA Mr. SANDLIN. The next item is: For rent of buildings and parts of buildings in the District of Columbia, for use of the various bureaus, divisions, and offices of the Department of Agriculture, $63,000. Mr. NELSON. We offer the following statement for the record: Increase, Budget 1935, compared with estimated obligations, 1934____ 18, 000 Includes $70,000 in regular appropriation for 1932, $50,000 supplemental appropriation for 1932 carried in Second Deficiency Act for 1931, and $9,100 supplemental appropriation for 1932 carried in Second Deficiency Act for 1932. 2 Exclusive of $17,300 estimated to be paid from appropriation "Miscellaneous expenses, Department of Agriculture", for fiscal year 1934. Exclusive of $17,300 estimated to be paid from appropriation "Miscellaneous Expenses, Department of Agriculture", for fiscal year 1934. The increase of $18,000 in working funds for 1935 is requested in order to provide for the continued occupancy, during the fiscal year 1935, of the structures now rented, as shown in the following statement. This request is made necessary by a combination of circumstances. The building program has not been main tained as originally scheduled and it is estimated that practically a year will elapse before the completion of the final portions of the South Building. In addition, it has been necessary to house the employees of the Agricultural Adjustment Administration in space designed for the use of other branches of the Depart ment. This action was imperative due to the emergency character of the work performed by that organization and the absolute need for close contact with the administrative offices of the Department. This has been accomplished by 2 and 3 shift operation and by reducing space assignments to the absolute mini mum. It is estimated that this action will result in a direct saving of at least $150,000 in the expenses of the Adjustment Act during the fiscal year 1934 and a much greater indirect economy because of the facility with which the operations have been conducted. With the agricultural program planned for continuation during the entire fiscal year 1935, it is not believed that it will be possible for the Department to abandon any of the present rented quarters during the same period and consequently the estimate is on the basis of a full year's rental. CHANGE IN LANGUAGE The elimination of the authorization for entering into additional leases, if found necessary, is recommended. If the appropriation requested is granted, it is not believed that the activities of the Department will necessitate rentals in excess of those for which provision has already been made. Statement showing buildings under rental by Department of Agriculture during fiscal years 1933 and 1934, and estimated rentals for fi. cal year 1935 $17,300 of this amount estimated to be paid from appropriation for "Miscellaneous Expenses, Department of Agriculture." Mr. NELSON. This shows an apparent increase for 1935 of $18,000. For the fiscal year 1934 it was decided that the South Building was sufficiently far advanced that it would not be necessary for the Department to rent all of the structures then occupied and a reduction in rental would be possible. However, due to two combinations of circumstances, it has been impossible for us to carry out that program. One reason is that the building has not advanced with quite the rapidity that we expected. Under the contract terms the final portion of the building, represented by this uncolored section on the chart, was to be done next June, but it is perfectly evident now that it will not be. In addition, we have provided housing for the Agricultural Adjustment Administration to the extent of 162,456 square feet. Roughly, that saved in excess of $150,000 in rental, and, of course, has aided in the performance of that work very materially, because it gave direct contact with the administrative offices which are located across the street in the main building. The Agricultural Adjustment Administration has authority to rent, but it was so evidently desirable to house them in this structure, if it could possibly be done, that some of our regular offices have been moved out, and others which were planned to occupy space have been held in their present temporary quarters in order that the Agricultural Adjustment Administration could be taken care of. Mr. THURSTON. Do you get your rent any cheaper this year? Mr. NELSON. Yes, sir. We "chiseled" $5,000 from one landlord, and $2,000 from another. Mr. THURSTON. What is your total reduction? Mr. NELSON. We reduced from $70,000 to $63,000, a saving of $7,000, or 10 percent. Mr. THURSTON. For business property in Washington they are paying now about half what they paid five years ago. Mr. NELSON. Yes, sir. Our rentals, I think, will show a very good ratio. The Atlantic Building and the McKinley Building are the largest structures we rent. For the McKinley Building we pay 35 cents a square foot per annum, and for the Atlantic Building 78 cents a square foot. Mr. THURSTON. What price did you pay 5 years ago for that same space? Mr. NELSON. For the Atlantic Building we then paid $35,000 instead of $30,000; for the McKinley Building we paid $16,000 as compared with $14,000. Mr. THURSTON. Then the rents you are paying have not diminished anywhere near in proportion to the diminution in the value of property? Mr. NELSON. No, sir; but with the ordinarily accepted standard of rentals in the District of Columbia of approximately a dollar and a half a square foot, these figures of 35 cents and 78 cents are really very much below the current market. The Atlantic Building is an old building that is not particularly in demand, and the McKinley Building is located on the grounds of the American University and the Department was able to get both at low rentals. Mr. THURSTON. The rentals within the last 5 years have not diminished in proportion to the diminution in the value of these buildings? Mr. NELSON. No, sir. Under the Economy Act we were compelled to demonstrate that we were not paying more than 15 percent of the market value. Assessments on buildings have dropped very materially, but ground prices are still rather high. Mr. SANDLIN. That obtains also with respect to apartment houses and hotels, does it not? Mr. NELSON. Yes, sir. Mr. CANNON. Have you any record of a decrease in the amount of taxes paid for these buildings? Mr. NELSON. The tax rate this year drops from $1.70 to $1.50. Mr. SANDLIN. You mean the assessed valuation? Mr. CANNON. Yes. Have you a record of such changes? Mr. NELSON. No; I haven't it with me, but in some cases there has been a material reduction. Mr. CANNON. Would you say more than 10 percent? Mr. NELSON. Not more than that; no, sir. We are showing this apparent increase of $18,000 for 1935, but actually what we have been compelled to do is to ask for an authorization to use some of our miscellaneous expense money to permit us to continue to occupy these structures during the current year. It is manifestly impossible for us to house the Agricultural Adjustment Administration and at the same time abandon these temporary rented structures. ALLOTMENT OF P.W.A. FUNDS Mr. SANDLIN. These emergency funds, amounting to $340,800, were allotted under the National Industrial Recovery Act? Mr. NELSON. Yes, sir. The following statements is presented for the record: Allotments under the National Industrial Recovery Act, aggregating $340,800 have been made for the physical improvement of Department buildings, as follow :: Replace obsolete elevator in 300 Linworth Place SW.. Install car position indicators and replace guide rails on all elevators in Supply reserve rotating element for all elevators in Department. Install additional distribution transformers Extend fire-alarm system to east and west wings and 300 Linworth Place SW.; also the enlargement of the central fire signal board in guard office.. Equip chemical laboratories with explosion and fire-prevention devices. Erect fire walls, fire doors, and provide certain extinguishing equipment Modernize toilets and cleaning gear rooms in the east and west wings. Painting the interior of the east and west wings and the Administration Extend direct current service in the South Building, for apparatus where Total.... $12, 000 5, 000 5, 000 20, 000 7, 800 20, 000 30, 000 125, 000 25, 000 6,000 1,000 6,000 10, 000 10,000 20,000 30, 000 8,000 340, 800 After these allotments were made, responsibility for building administration and maintenance was transferred to the Department of the Interior pursuant to Executive Order No. 6166, and the bulk ($338,108) of these funds was therefore transferred to that Department effective November 1, 1933, for expenditure. Subsequent to the compilation of the Budget, an addicional allotment of Public Works funds has been made in the sum of $10,725 for alterations, installation of additional equipment, etc., in connection with the Department cafeteria. Mr. SANDLIN. Does your Department have anything to do with spending that money? You Mr. NELSON. Not since the issuance of the Executive order. will note that on November 1 the transfer of this amount, $338,108, was made to the Secretary of the Interior in order that he might assume responsibility for the performance of the work authorized by the Public Works Administration under these projects. Mr. SANDLIN. Then you cannot tell us what he is doing with these sums now? Mr. JUMP. This list, I think, Judge, will cover what will be done, because the same things will have to be done. It is just a question of whether we would do it or whether the Interior Department would make the contracts. Mr. SANDLIN. Is there any further information that you can give us other than that which is already given in this statement? Mr. NELSON. No, sir; I do not think so. If you have any one item in mind, I would probably be able to explain what was contemplated. The largest item there is $125,000 for installation of automatic sprinkling systems in the buildings in order to reduce the existing fire hazards. With the number of laboratories operating in the Department, it has been recommended by the fire marshal that we provide either automatic water or carbon dioxide sprinkling systems in order to eliminate the dangers that now exist from explosion and fire. Mr. SANDLIN. Are any of these projects now being worked on? Mr. NELSON. Yes; they are all being carried on under the direction of the Secretary of the Interior. Mr. SANDLIN. Now? Mr. NELSON. Yes. Mr. CANNON. With the completion of this building, do you expect to eliminate all rented quarters? Mr. NELSON. If we can shrink the Agricultural Adjustment Administration down to the proper point, we can occupy just the Administration, the South Building, and the building at 300 Linworth Place. However, we are put in a position now of abandoning quarters on the Mall in front of the new Interstate Commerce Building, which may necessitate our having to provide quarters elsewhere. They are widening Constitution Avenue and the buildings that we have are in the way of that widening operation. We expect momentarily to be notified of the necessity to vacate. Mr. HART. Is that a Government building or rented building? Mr. CANNON. You do not expect, then, even eventually to house all of your activities in the main building? Mr. NELSON. Our present requirements are 1,416,311 square feet. We have in anticipation 1,292,977 square feet. So if the Agricultural Adjustment Administration requires the present ratio of space we will have a shortage of 123,334 square feet. Mr. CANNON. That is a temporary activity? |