Evening star., 1933-05-25

The Federal Government II going TO
the aid of hard-pressed political subdivi-
sions in a way requiring them to pre-
serve the public credit. A plan to make
advances Of $2,5oo, 900 900 to States
and cities (s1 ,000, 900 900 Of it in direct
grants and $I,50o. .o0o. 600 in loans for
public works. was divulged yesterday
with the arrival Of a delegation Of
mayors seeking Federal assistance in
meeting their operating expenses, ac-
cording to a dispatch from Washington
to the New York Herald Tribune.
This is $4,000, 900 900 in excess Of the
fund already allocated by Congress for
direct doles to the States and estab-
hshes a precedent. President Roose-
velt's plan of procedure was outlined
authoritatively yesterday, disclosing how
he will distribute the s., SOC, 900 600
fund for public works carried lin the
national recovery bill now pending.
Under his discretion to distribute
that amount within wide limitations,
the President has projected an out
right appropriation of $1,000, ,000, 900
from the Treasury. Through either the
Reconstruction Finance Corporation or
his public works administrators or
both. the President, in addition. will
lend 81 500, 900 900 for non Federal pub
lie works.
OF the total appropriation Of 81 $780,
100000 for public works, $500, ,0O0, 900
has been allocated for outright grants
to finance Is per cent projects under
taken by political subdivisions; $780,
100000 has been allocated for Federal
public works yet to be specified, and
$400, 900 900 Is earmarked in the legis-
lation for public highways.
Balanced Budgets Necessary.
The pressure for maintaining the
public credit IS to be exerted in . stip-
ulation that no State, city or other po-
ntical subdivision shall be eligible to
participate In the $500, ,000, 900 Of : out
right grants for pubic works If It is
unable to show that its budget Is bal
anced.
The legislation empowers the Presi-
dent to appropriate for such non-Fed-
as he shall prescribe" The political
units which do qualify for parts of the
$500, ,000, 900 in outright grants will be
eligible. under the administration plan,
to receive approximately $1,500, ,000, ,000
additional in loans either from the Re-
construction Finance Corporation OF
from the Presidents public works ad-
ministration.
Since these loans are to be limited
to the political units qualifying to
share in the $500,000 600 of outright
grants, the Presidents requirement fol
balanced budgets will restrict $1,000.
100000 of the 1880 900 900 50 far allo.
Gated for assistance to States, cities ane
lesser political subdivisions.
Assistance Already Projected.
ALI this is exclusive Of any Fedora
aid toward meeting municipal operat.
ing expenses, which was the particular
objective Of the delegation Of mayor,
who saw the President yesterday. Step
also are under way for legislation K
help tide cities over the depression II
this respect
The assistance which already i
projected: definitely for political sub.
divisions Is as follows:
Direct relief grants t"doles')
outrisht Grants for public '0oo'ooo'oo'
Loans on these public works. 1.SooSoS.oSe SooSSoooSe
In realistic survey Of the situation
Ii - eotlfu6teQ IuaL the fe0efd Gov
ernment will get back not more thar
$3.50, 100000 of this outlay. In other
words, it Is figured that nearly so pei
cent OF the total loans Of 81, SOC. 900 ,00G
for non-Federal public works, such Al
hitter beds, sewers, city buildings, Will
be repaid. even though the loans Will
be available only to municipalities liz
sound financial condition,
The fact IS that of the 5000, 900 .0O(
program Of public works and relief
projected by the administration. the
Government does not hope to be reim.
bursed for more than $3,40O, ,OOO, ,O0C
OF 1t. Of1cials feel the expenditure viii
have been wise If the effect Is to
stimulate employment on the one hand
and heep large parts of the population
out Of distress at Q time when some
States and many cities have exhausted
their resources. They consider the plan
sound 50 long as it included provision
for amortization.
The figure 5000, ,oOo, 900 is accounted
for by adding to the $500, ,00o, ,000