The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-06-29
ICkeS BareS
Nest Egg of
700 Millions
Represents Money Realized
on Loans Made Under
First PWA Program.
BY RUTH FINNEY
Times Special Writer

WASHINGTON, June pa $780,
100000 rabbit has just been pulled
out of his hat by Secretary of the
Interior Ickes to insure construction
of expensive public works along with
cheaper projects in the work relief
program. During the coming year
Mr.. Ickes will have this much to
lend to states. cities and other pub
lie and quaSi-public agencies, en-
tirely apart from the S4,800,000 900
work relief fund.
1t is money realized from loans
he made under the first public works
program, in 1888 and 1884. This is
the way he gets the money:
PWA made grants of 80 per cent
and loans or 10 per cent of the cost
of projects undertaken under the
old $4,000, 100000 program. 1t took
bonds as security. Altogether 1t
has signed contracts to purchase
$500, 100000 of state and city bonds
and those of smaller political sub
divisions and 5000 100000 of railroad
and quasi-public organization bonds.
Free to Sell
These bonds PWA is free to sell
at any time, either to the RFC,4
through the RFC, or directly in the
open market. 1t has authority to
relend the money. taking new bonds
as security for the new loans. In
other words, it has $500, 900, 900 re-
volving fund which it can lend for
public works as long as any one
wants to borrow it,
Where cities and other bodies ask
a grant from the Federal govern
ment as we'll as a loan the grant
amounting to as much as per
cent of the total coSO will be made
out of the S4,880.000O0 work relief
appropriation. This must pass
through the Allotment Board and be
approved by the President. The loan
of SIS per cent or any lesser amount
the city may ask can be made by
the PWA without consulting any
one
PWA does not have the $700,000,-
900 worth of bonds on hand. 1t buys
the bonds from the issuing body
only as fast as money is needed for
work on the project being built.
Receives RFC Order
Mr.. Ickes has just received an
offer from the RFC, however, to buy
$145, 100000 worth of bonds and he
expects to turn these over He will
have approximately $55,0OO 900 left
on hand. Some time ago he sold
$100,000,000 worth of bonds acquired
in this manner at a profit of ap-
proximately $1,0OO,O0O. The proceeds
have now been lent.
While it holds the bonds PWA
collects interest on them at per
cent. 1t has taken in nearly three
quarters of a million dollars in this
way.
Public works projects have cost,
on an average, $2,132 per man per
year After the President laid down
his dictum that projects under the
new work relief program must cost
the government, on an average, not
more than $1,100 per man per year.
it looked for a time as if the per-
manent improvement type of prof.
ect would be left out.
Then Secretary Ickes figured out
that if the government donates only
As per cent of the cost of a project
the amount decided on for direct
grants-it would be providing a total
of only 1859 per man per year, a sum
we'll within the 81 LOO limitation.
The rest of the money would be lent
out of his revolving loan fund.
If he lends all of the 100000, 900
it will take $572 100000 in grants
from the work relief fund to match.