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One factor, Major Stuart, that I feel sure enters into this situation, as it does in all the bureaus, is the fact that during the past two years the ability of the department to purchase transportation from employees by reimbursement has become tremendously impaired and, in some cases, absolutely nullified due to the uniform travel act and the comptroller's decisions thereunder, which greatly limits the use of the cars. There is a case in court right now on a private action brought by an employee where there is an attempt to determine just what the law does mean as to authority to reimburse a man for use of his car at or in proximity to his official station. And in that case, which involves a forest ranger in Virginia, the comptroller contends in his answer that his official station is the entire forest he covers, and he can not collect for use of his car within his forest. Is not that the case in the Shenandoah Forest?

Mr. MAHURIN. Yes, sir.

Mr. JUMP. The whole subject of the use of these cars by reimbursement is up in the air at this time; it is one of the principal operating problems that we have on hand in the department at the present time. But the comptroller, within the last few weeks, has issued a new decision which improves the situation to some extent, and we have hope for some relief in a revision of the uniform regulations covering this transportation.

Mr. BUCHANAN. On the other hand, he can go out and hire a car and thereby pay a higher price for the use of it, and the bill will be paid; is not that correct?

Mr. JUMP. Yes, provided there is no cheaper common carrier available.

Major STUART. There is no question about it; it has become exceedingly difficult in the Government service to effect economies.

Mr. Jump. The constant effort to do business under complications of this type is a great drain on the appropriations.

Mr. BUCHANAN. What per cent of your forest roads and trails, taking all avenues of communication in the forest, can be traveled by car?

Major STUART. I should say anything we could dignify with the name "road" can be traveled by machine.

Mr. BUCHANAN. What per cent of your roads, then?
Major STUART. All of our roads can be traveled by machine.

Mr. BUCHANAN. What per cent of your travel is communication in the forests?

Major STUART. Any figure I give on that, that is, on the question of what percentage of roads traveled by a forest officer is inside of the forest, as against the amount outside, would be an estimate. But let me approximate it. I should say 70 per cent of our forest officers' time is spent on the roads within the national forests boundaries, and the other 30 per cent on adjacent roads that they must necessarily cover to get about.

Mr. BUCHANAN. To get from one section of the forest to another?

Major STUART. Or to come from a valley country into the forest, or to go from one part of the forest, through the valley, into another part of the forest.

TUESDAY, NOVEMBER, 29, 1932.

PERMANENT, INDEFINITE APPROPRIATIONS, AND

SPECIAL FUNDS

Mr. BUCHANAN. We now come to the permanent annual indefinite appropriations.

Major STUART. The next item, Mr. Chairman, covers permanent, indefinite appropriations, and special funds. These are fixed liabilities. They include refunds to depositors of excess deposits, national forest fund, and items which follow.

REFUNDS TO DEPOSITORS

This first item, refunds to depositors, is an appropriation necessary in order to permit refunds to depositors of money deposited by them in excess of the amount due the United States. It is necessary to have the appropriation in order to make the refunds. The amount carried here is the same as 1933-$75,000.

NATIONAL FOREST RESERVATION COMMISSION

Similarly, the next item, national forest reservation commission, is an item set up each year. For the fiscal year 1934 it is $475, the same as for the fiscal 1933, to cover the necessary expenses of the commission.

PAYMENTS TO STATES AND TERRITORIES

The next item, payments to States and Territories, national forests fund, is an amount that goes to the national forest States, representing 25 per cent of the national forest receipts. For the fiscal year 1934, the estimate is $940,000, as contrasted with $1,240,000 for the current fiscal year, the decrease being due to the anticipated decreased receipts.

Mr. BUCHANAN. That is payments to States and Territories?

Major STUART. That constitutes 25 per cent of our estimated gross receipts from the national forests for the fiscal year 1933, on which the appropriation for the fiscal year 1934 is based.

Mr. BUCHANAN. It becomes net receipts when paid to them, so far as they are concerned?

Major STUART. The States receive 25 per cent.
Mr. BUCHANAN. I understand-net.
Major STUART. Yes, sir.
Mr. BUCHANAN. It costs them nothing?
Major STUART. It costs them nothing.

Mr. BUCHANAN. Yet we pay them 25 per cent of our gross receipts and it becomes 25 per cent of the net receipts when it reaches them, so far as they are concerned?

Major STUART. True; in that sense, yes, sir.

Mr. BUCHANAN. And we lose on the operation of the national forests, of course?

Major STUART. We are taking in less money than the cost of administration.

Mr. BUCHANAN. Surely.

do so.

or use.

Major STUART. It is well understood, however, that the national forest enterprise is not set up to be a paying proposition. There could be larger receipts obtained from it, if an effort were made to

Mr. BUCHANAN. Well that is a peculiar statement, in a way. You mean there could be larger receipts obtained from it, without injury to the national forests or the future supply of timber, if an effort was made to do so?

Major STUART. There are many provisions made by Congress for the use of national forests that involve small or moderate return. One provision is that timber may be given free to prospectors, miners, and settlers; another is, as to settlers and homesteaders, that under certain conditions timber is sold to them at the cost of administration. As to our grazing fee—a question which was discussed yesterday-it has always been the policy of the department to fix a reasonable grazing fee—not as large as the market or competitive value of the grazing privilege. And so as to the other uses of the national forests that are made, such as for hunting or recreation, no charge is made for that privilege; except where it becomes an exclusive occupancy

If a party wishes to lease an area or to put up a structure for his exclusive use, we charge him for that privilege. If on the other hand, he wishes to go into the national forests to hunt, or for general recreation, there is no admission fee-no charge of any kind incident to it.

Mr. BUCHANAN. Have you ever figured out of course this 25 per cent of gross receipts of national forests goes to the States in lieu of the taxes, I guess in the main, that would be derived by the States if they were not owned by the Government. That is the basis for it, is it not?

Mr. BUCHANAN. Have you ever figured out whether or not this 25 per cent of the gross receipts is more than they otherwise would have received for taxes, if the land had been in private ownership?

Major STUART. It works out diversely. By and large, the 25 per cent of the receipts paid directly to national forests' counties, plus the 10 per cent additional and other appropriations that go for the construction of roads and trails within the national forests

Mr. BUCHANAN. In such State or county? Major STUART. Yes, sir—is broadly equivalent, if not in excess, of the amount of money that would come to those counties if those lands were privately owned. I speak of the situation being diverse in this respect, Mr. Chairman, because those receipts go only to those counties, of course, within which receipts are obtained. There are places where, due to the inaccessibility of the country, the sale or use of the national forest resources is nil, or very small; so that those particular counties might not, for that year, or for a period of years, get any return.

Mr. Sandlin. It is paid to the counties, then, instead of the States?

Major STUART. It is paid to the States for distribution to the counties; but if there are no receipts from the national forest in that particular county, that particlar county does not get any receipts.

Mr. SANDLIN. Therefore, I say it goes to the counties, really, instead of to the States?

Major STUART. It goes to the counties through the State, under State legislation built up for the purpose. The State is required,

under the Federal statute, to disburse the funds sent to it (the State) for this purpose, on the basis of the area of the respective counties in national forest land. So the State simply becomes the disbursing means, under a well-prescribed method, of getting this money to the counties.

Mr. BUCHANAN. I expect the State takes its part of it.
Major STUART. It can not under the law, Mr. Chairman.
Mr. BUCHANAN. I wonder.

Major STUART. If the committee wishes to go into this question of what the 25 per cent of the receipts means in relation to State and county finances, I would be very glad to submit for the record what we have found out in relation to the situation; for example, in Washington, or any other State.

Mr. BUCHANAN. It won't be very long, will it?

Major STUART. No. It should be borne in mind that much of these lands in the national forests are lands that are so inaccessible that they have small value; some would have no value, in fact, they have been, in years past, open to settlement and entry, but have had such small value that nobody felt justified in settling on them, or taking them under permissive law. So I shall be pleased to go into that question just as far as the committee would like to go into it.

Mr. BUCHANAN. I guess, Major, if you have those facts in reply to the first question I asked you on that 25 per cent, you had better put them in the record and let us see what it is. I would like to know whether or not it is in excess or not equal to; or, if in excess, what it is in excess of what ordinarily would be received from taxation.

Major STUART. Yes, sir.

Mr. BUCHANAN. In my judgment—I am not speaking of these permanent and indefinite appropriations of the Department of Agriculture alone, but I think all these indefinite appropriations ought to be gone into and their merits investigated thoroughly and perhaps some reform made in the manner of handling them, the amounts, and so forth.

CONFORMITY WITH CHAIRMAN'S

STATEMENT BY MAJOR STUART SUBMITTED IN

REQUEST

In 1927 two bills were before Congress proposing that the State share of gross national-forest revenues be increased to 50 per cent. To secure a correct understanding of the situation the Forest Service made a detailed study of the conditions prevailing during the preceding 5-year period. First, it determined for each State the exact average payments made under the 25 per cent provisions, the sums expended in highway, road, and trail construction, and the approximate value of the cooperation extended to the States and counties. By this process the average net effect of national-forest administration upon the financial status of each State was specifically determined.

The next question was: “Would the same lands have contributed more largely and effectively towards State financial welfare had they been subject during the same period to some other form of ownership, control, management, and use; provided they had been given approximately the same degree of protection and management in order to conserve their economic and public values." Two general courses of action were practicable of adoption. One was to allow all of the national-forest lands adapted to permanent private management to pass to private ownership and become subject to taxation; the State adequately to protect and administer all lands remaining or revested in public ownership, meeting all costs without Federal aid other than that generally applicable in all States, and deriving in return not only the taxes from the privately owned lands but also

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the gross revenues from the public lands. The other was the free cession to the States of all national-forest lands for permanent administration as State forests, the States to bear all costs of protection, management, and development, and to retain all gross revenues.

To determine the possibilities of the first course county records were studied in detail to ascertain the acreages of other than urban lands subject to taxation, the assessed values thereof exclusive of improvements, the rates of taxation, and the actual taxes levied. The detailed classifications of the national-forest lands were then used to determine the parts thereof which probably would be privately appropriated if the national forests did not exist. The probable assessed values and tax levies of such lands were then computed by comparison with lands of the same character and value actually subject to taxation in the same county. By this process the potential taxability of the national-forest lands was computed. To this there later were added the probable revenues derivable from the lands remaining or revested in public ownership by comparison with the known returns from such lands under national-forest management. Then estimates were made of the costs of protecting and administering on acceptable standards the lands which would remain in or revert to public ownership. The deduction of these costs from the combined total of estimated tax returns and revenues indicated the net effect upon State and county finances which could be anticipated under the conditicn described.

The possibilities of the second possible course of action, namely, administration as State forests of the lands which during the period of the study actually had been administered as national forests were computed by assuming the possibility that the States would derive a 10 per cent greater revenue from the lands and could administer them at 20 per cent lower cost than actually was the case under national-forest management during the period. There were no valid grounds upon which to base such assumptions, as there are no facts to support the theory that higher revenues could be obtained from the natural resources of the lands or that the same standards of administration and management could be maintained by State agencies at any lower cost than those actually incurred; but to minimize doubt the computations were made as above stated.

The results of the study described are summarized in the following table, which shows conclusively that, even under the conditions prevailing during the fiscal years 1923–1927, the benefits and advantages derived from the national-forest areas, under the prevailing principles of State participation in national receipts and Federal participation in road construction and maintenance, were as great and in most instances greater than the States and counties could have derived in any other way. A similar study covering the current situation would make the comparison even more favorable to national-forest administration than the attached table would indicate. During the intervening five years the values of types of forest lands such as characteristic of the national forests have declined markedly and such lands are reverting to public ownership through tax delinquency in constantly increasing degree. A current study of the potential taxability of nationalforest lands undoubtedly would yield results much below those shown in the table and the income the States would derive if the national-forest lands were subject to unrestricted private appropriation would fall substantially short of that theoretically computed on the basis of the 1927 study.

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