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does it not?
Mr. BUCHANAN. It decreased the amount available for loans by Mr. HoFFMAN. Yes, sir. Mr. BUCHANAN. It is not a receipt. Mr. HOFFMAN. The Treasury carries it as a receipt, of course. Mr. BUCHANAN. I know, but it is only an appropriation that is not Mr. HOFFMAN. Yes, sir. warehouse receipts now held and you state here that the principal
Mr. BUCHANAN. You collected a little over $39,000,000 in cash and outstanding is $31,780,082.58? Mr. HoFFMAN. Yes, sir.
Mr. HOFFMAN. Yes, sir. The figure $1,700,000 underneath that is interest withheld when we made the loans in 1931. We withheld the interest up to maturity date.
Mr. BUCHANAN. Of the amount loaned out, $70,965,800.29, you have collected both in cash and are holding warehouse receipts to a total value of $39,185,715.71?
Mr. HOFFMAN. Yes, sir. Mr. BUCHANAN. Making, according to these figures, 55.2 per cent of the amount loaned out.
Mr. HOFFMAN. Yes. Mr. SANDLIN. That went back into the Treasury? Mr. HOFFMAN. That went back each fiscal year. Mr. Buchanan. Are you going to spend half a million dollars that we appropriated for you this year?
Mr. HOFFMAN. We have spent already $321,000 of the $500,000 that was appropriated this year. You see, a large amount of that money was spent for recording fees, recording our mortgages.
Mr. Buch ANAN. Taking new mortgages? Mr. HoFFMAN. Yes, sir. In some cases we have to pay as high as $2.50 for recording our mortgages.
Mr. BUCHANAN. With reference to the amount of interest withheld from the loan, that means just a smaller amount that was loaned out,
Mr. HOFFMAN. That was transferred from the several appropriations to miscellaneous receipts in the Treasury. Under the ruling of the Comptroller General, all interest either paid or withheld must be covered into the Treasury as miscellaneous receipts.
Mr. BUCHANAN. So that $1,700,000, which represents that figure, merely means the amount available for loans was reduced by that much.
Mr. HOFFMAN. Yes, sir, Mr. BUCHANAN. It could not be said to be interest collected, because it was never advanced.
Mr. HOFFMAN. That is right. vanced? Mr. BUCHANAN. It was just deducted from the principal as adMr. HOFFMAN. Yes, sir. That is all it is. You loaned out nearly $71,000,000?
ADMINISTRATION EXPENSES FOR COLLECTION OF SEED LOANS
Included in the amount of money that we loaned was also approximately $1,500,000 that was loaned to individuals from the $20,000,000 appropriation to purchase capital stock of agricultural credit corporations. We had some expenditures and still have some expenditures from the $500,000 that was appropriated for this work in connection with the collection of those agricultural loans.
Mr. BUCHANAN. That was over a million dollars?
Mr. BUCHANAN. From the $20,000,000 that was authorized in the Interior Department bill?
Mr. HOFFMAN. Yes, sir.
Mr. BUCHANAN. And the money to administer that came out of the $500,000?
Mr. HOFFMAN. Administrative expenses incident to the collection of these loans comes out of the $500,000, yes.
Mr. BUCHANAN. Do you know how much that amounts to?
Mr. HOFFMAN. There has not been so very much during this last fiscal year, starting July 1, 1932. The only expenses have been for some four or five people who are paid from the seed-loan pay roll. Last year, of course, there were some expenses. Committees were formed in each State to pass on applications and their traveling expenses were paid, stenographic help, etc. All of these expenses were paid from the $45,000,000 seed-loan appropriation, because the Comptroller General held that the $20,000,000 item was an amendment of the $45,000,000 act, and the expenses had to be paid from that item instead of being paid from the $20,000,000 appropriation,
Mr. BUCHANAN. I am just wondering how the Comptroller General could rule to divert money appropriated for the purpose of seed loans to administer an act for the purpose of purchasing stock from agricultural credit corporations.
Mr. HOFFMAN. The item in the Interior Department bill was an amendment to the $45,000,000 drought appropriation. Mr. BUCHANAN. I understand, but we appropriated $500,000 to
of this work. You have no collections to do in connection with these agricultural credit corporations?
Mr. HOFFMAN. I did not mean to convey the idea that the expenses of the agricultural credit corporations for the last fiscal year came out of the $500,000. They are coming out of it this year, though.
Mr. BUCHANAN. You do not exactly understand the point I have in mind. We appropriated $500,000 for this fiscal year for the express purpose of collecting these loans.
Mr. HOFFMAN. Yes, sir.
Mr. BUCHANAN. Now, the Comptroller General holds that any administrative expenses in connection with the activities of the agricultural credit corporations come out of this fund. I am just wondering how he can hold that you may divert any portion of this $500,000 appropriation for administrative expenses here to pay the administrative expenses of the agricultural credit corporations.
Mr. Hoffman. I imagine that he held that last year because there was no specific appropriation made for any expenses in connection with the making of agricultural credit corporations loans.
reimburse the $20,000,000 appropriation. his ruling. Congress had rushed this legislation through. There was a great demand for it. There was a great hue and cry everywhere was put through with all kinds of special dispensation. Now, I imagine when he found that the wording was deficient in that it did not provide any means with which in detail to accomplish the major much dis patch, the comptroller took a liberal view. purpose of the act that had just been passed by Congress with so the money out of that appropriation. Mr. BUCHANAN. It seems to me that his liberality was in taking Mr. JUMP. I would say that, too. There must have been some because his liberal view would have been to take the position that language in the other appropriation that led him to take that course,
Mr. BUCHANAN. You see the point, do you not, Mr. Jump?
Mr. JUMP. I see the point. I remember that when that money was appropriated in the Interior Department act, the language was deficient in that it failed to carry that specific administrative expense authority.
Mr. BUCHANAN. I understand, but suppose that is so. Suppose there is no money to administer that fund. Does that authorize the Comptroller General to just look around through the agricultural bill and pick out an appropriation made for a specific purpose and rule that that money may be diverted from the purpose for which it was appropriated, to be applied to another purpose?
Mr. JUMP Under ordinary conditions, it would not. But this was a very emergent situation. Congress enacted in an emergent manner in making this money available. I have no doubt that in the comptroller's decision on that point, he gives his legal theory to justify that
Mr. BUCHANAN. Of course, you know that an emergency is an occasion for legislative action, and not for the misconstruction of legis
Mr. JUMP. I have to admit that that is correct, yes.
Mr. BUCHANAN. The Comptroller General, the President, and every other officer of the Government would protest against yielding authority created specifically by law for a specific purpose.
Mr. JUMP. I think there must have been some language in the $45,000,000 enactment that covered the whole field of emergency loans. Am I correct in that? Mr. Hoffman. There is no language at all. It was silent, because
amendment to the $45,000,000 act that provided for all expenses in connection with the administering of that act. Therefore comptroller held that the $45,000,000 item was exclusive. As a
we had incurred expenses and had spent some $40,000 or $50,000 from the $20,000,000 appropriation and we were required to transfer that money from the $45,000,000 appropriation, to 000,000 was to take care of the stock in these agricultural credit corporations; that may be all right. I am just questioning his authority to come over here and take some of this $500,000 appropriation,
a specific purpose by Congress, and apply it to a different Mr. JUMP. He must have found something in those acts to justify
it was an
made for purpose.
while Congress did not provide specifically for the payment of the necessary and reasonable expenses to accomplish this out of this $20,000,000—he must have had language in the other act on which to base his ruling.
Mr. HOFFMAN. The language in the $45,000,000 act says, for all expenses in connection therewith, the $20,000,000 being added as a second paragraph to the original $45,000,000 appropriation.
Mr. BUCHANAN. I expect that would authorize that holding.
Mr. Jump. I think he must have relied on that; otherwise he would have said to go ahead and use part of that $20,000,000.
Mr. BUCHANAN. However, this was made for the specific purpose of collecting loans.
Mr. JUMP. No, sir; not this money.
Mr. Hoffman. This year's money, but it names all of our acts, though.
Mr. BUCHANAN. But it is for collection.
Mr. BUCHANAN. To enable the Secretary of Agriculture to collect moneys due the United States on account of loans made under the provisions of those acts.
Mr. HOFFMAN. Yes, sir.
Mr. BUCHANAN. But what I am talking about is that part of it was expended for taking stock in the agricultural corporations.
Mr. SANDLIN. I understand that. Mr. BUCHANAN. And charging the expenses of the administration of that branch to seed collections loan, or taking it out of seed collections loan.
Mr. SANDLIN. Does the wording of the act say including $20,000,000?
Mr. HOFFMAN. Yes, sir.
Mr. Jump. No. Mr. Buchanan makes the point this money was only for collection.
Mr. BUCHANAN. Yes; only for collection.
Mr. Jump. Now, Mr. Hoffman, this fiscal year, is not the amount that is being used a very small amount?
Mr. HOFFMAN. Oh, yes; for collections.
Mr. JUMP. For doing anything in connection with agricultural credit. It is almost inconsequential.
Mr. HOFFMAN. We are engaged in the collection of loans made to buy this stock. The loans to buy this stock were made direct to individuals and the people who are employed in this work now are engaged in the collection of loans made to individuals to purchase capital stock in these corporations.
Mr. Jump. Only that?
the purpose of economy, so that we would not have two sets of men Mr. HOFFMAN. That is right, and thereby reducing expenses. Mr. BUCHANAN. Who is administering those crop production loans? Mr. JUMP It is administered under the direct supervision of the through an office set up known as the crop production loan office. everything else is, but it is administered directly by the Secretary,
Mr. HOFFMAN. That is right. have to do with it in the department.
Mr. JUMP. I guess Mr. Hoffman, who is attached to it in an advisory capacity, can tell you more about it than I can. We do not
Mr. JUMP. Then that changes the whole thing around. Mr. HOFFMAN. I thought that was understand. Mr. JUMP. I could not understand that myself, because there had only been $60,000 loaned this fiscal year
from department money for agricultural credits ; so there could not be much money spent to make
Mr. Buchanan. So this Comptroller General's opinion holds you can use this money to collect loans made direct to those people to enable them to buy stock in these corporations?
Mr. JUMP. Yes. That is based on common sense, because the Government ought to be able to get the money back in the best way
Mr. BUCHANAN. That is all right; my criticism was made on a misunderstanding of the facts. AMOUNT EXPENDED FOR PERSONAL SERVICES IN THE DISTRICT OF
Mr. BUCH ANAN. I see you reduce the amount expended in the District
of Columbia from $80,000 to $60,000; is that correct? Mr. HOFFMAN. Yes, sir. Mr. BUCH ANAN. What is the reason for that?
Mr. HOFFMAN. The number of employees engaged in the collection of these loans varies according to the chances for the repayments and each year, as the loans become older, it takes fewer employees to take employees the moment we are able to do so. care of the work. Accordingly, 'we reduce the number of our
COOPERATION WITH CROP PRODUCTION LOAN OFFICE Mr. BUCHANAN. I believe you said the employees of your bureau or division are being used by the Crop Production Loan people to in the field approximately 607-field men paid from their appropriation.
Mr HOFFMAN. To this extent: The crop production loan office have We have in the field about 60 field men whose salaries or expenses are paid from our appropriations. The work has been consolidated for Mr. BUCHANAN. MAnd each man'is collecting what he can on account
CROP PRODUCTION LOANS
collect their loans?
of any loan?