TA
23

FEDERAL EMERGENCY ADMINISTRATION
OF PUBLIC WORKS
WASHINGTON
CIRCULAR No. 1
THE
PURPOSES, POLICIES, FUNCTIONING
AND ORGANIZATION OF
THE EMERGENCY ADMINISTRATION
THE RULES PRESCRIBED BY
THE PRESIDENT
JULY 31, 1933
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON: 1933
DEPOSITED BY THE
UNITED STATES OF AMERICA
SEP 18 '33
TABLE OF CONTENTS
Article I. Purposes of the act, duties of the administration of the act.
Powers of the President….
Sec. 1. Purposes of title II.
Sec. 2. Duties of the Administration as to Federal projects..
Sec. 3. Its duties as to non-Federal projects. Classes of projects
eligible
Sec. 4. President's power to make grants to public bodies_
Sec. 5. Other powers of the President.
Sec. 6. The Executive orders appointing the Special Board for Public
Works and the Administrator___
Article II. Policies and rules of the Emergency Administration__
Sec. 1. Labor policy
Sec. 2. Sec. 206 of the act.
(a) Planning and research board.
(b) The labor board..
The technical board of review.
(d) The units of central organization.
Sec. 3. Rules..
Sec. 4. Construction-contract provisions.
Sec. 5. Bidding not to be confined to local contractors_
Sec. 6. Tests for eligibility of projects..
Sec. 7. Preferences as between projects.
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Sec. 1. Functions of boards…..
Sec. 2. Duties of State engineers.
Sec. 3. Organization of boards.
Sec. 4. The immediate program_.
ARTICLE V. Methods of financing projects of public bodies
Sec. 1. Bond and lease methods__
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Sec. 8. Test for the grant to public bodies.
Sec. 9. Price of bonds and interest rate of public bodies.
Sec. 10. Amortization_.
Sec. 11. The contract between the United States and any applicant__
Sec. 12. Labor Board of Review..
ARTICLE III. Duties, functions, and organization of the Emergency
Administration_
Sec. 1. The three functions of the Administration_
Sec. 2. The central organization__.
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Sec. 3. Travel allowances
Sec. 4. Control and method of meeting expenses of field forces..
Sec. 5. Method of providing funds to finance improved projects__
Sec. 6. Processes of central office__ _
Sec. 7. Registration and promulgation of comprehensive program
ARTICLE IV. The State advisory board and State engineer.
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Sec. 5. Leasing opportunities and procedure-
Sec. 6. Illustrations of possible situations and procedure_
Sec. 7. Policing of construction contracts__
Sec. 8. Construction contract bonds_
ARTICLE VI. Regional advisers_
Sec. 1. Headquarters-
Sec. 2. Functions_.
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Sec. 2. Bidding on bonds.-
Sec. 3. Options to public bodies as to amount of bond issue_
Sec. 4. Future bonding authority.
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IV
PART II. Loans to private corporations (other than housing).
ARTICLE I. The projects of private corporations eligible for loans
Sec. 1. Projects and private corporations eligible.__
Sec. 2. Policies with regard to loans on private projects.
Sec. 3. The application_
PART III. Housing-
A
Sec. 1. Self-liquidation.
Sec. 2. Interest_
ARTICLE I. Type of development which may be financed.
Sec. 1. Summary of sections applicable to housing...
ARTICLE II. Policies of the Administrator applicable to housing.
ARTICLE III. Public regulation or control_ _
ARTICLE IV. Financing-
Sec. 6. Equity investment.
Sec. 7. Contracts_
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Sec. 3. Amortization, percentage, and period of loan_
Sec. 4. Type of security.
Sec. 5. Sales projects...
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ARTICLE V. Labor and employment conditions.
Sec. 1. Rules_
ARTICLE VI. Subsistence homesteads.
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PART IV. Applications heretofore made to the Reconstruction
Finance Corporation___
Sec. 1. Applications not approved by Reconstruction Finance Cor-
poration Board___
Sec. 2. Applications approved by Board..
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I
Circular No. 1
THE PURPOSES, POLICIES, FUNCTIONING, AND ORGANIZA-
TION OF THE EMERGENCY ADMINISTRATION-THE RULES
PRESCRIBED BY THE PRESIDENT
ARTICLE I
Circular No. 1 states the purposes of the National Industrial
Recovery Act (title II, Public Works), and the purposes, policies,
functioning, and organization of the Emergency Administration of
Public Works, created by the President to effectuate title II.
It also states the rules and regulations prescribed by the President
pursuant to section 209, as necessary to carry out the purposes of the
title. These rules and regulations control all contracts let for con-
struction of public works, financed under the act, whether Federal or
non-Federal, and all loans and grants pursuant to title II. Any vio-
lation of any such rule or regulation is punishable by fine not to exceed
$500 or imprisonment not to exceed 6 months, or both.
SECTION 1. Purposes of title II of the act.-(1) The comprehensive
program of public works. The act (sec. 201) provides that the
Administrator, under the direction of the President, shall prepare a
"comprehensive program of public works." The comprehensive
program is to be related to the reconstruction legislation of which
the Recovery Act is a part. The purpose underlying the entire scheme
is, as stated in the declaration of policy of the Recovery Act, "to
increase the consumption of industrial and agricultural products by
increasing purchasing power, to reduce and relieve unemployment, to
improve standards of labor, and otherwise to rehabilitate industry
and to conserve natural resources."
The formulation of a comprehensive plan of public works thus
requires consideration of the functioning of the national economy as
a whole. This in turn involves consideration of ascertained trends of
population and industry, its centralization and decentralization,
changes in the habits of the people caused by the substitution of
the machine for human labor, the automobile, changes in railroad
rates, in charges for electric current, the effect of massive projects
like Boulder Dam, Tennessee Valley, and the St. Lawrence River
improvement.
The formulation of the immediate comprehensive plan (which is
necessary to provide employment quickly) involves the formulation
of a long-range national plan to follow and be consistent with the
immediate plan. To that end the President has directed the crea-
tion of a long-range planning board more particularly described låter.
Obviously the purpose of the act to provide employment quickly
cannot await the complete formulation of the comprehensive program.
But it is possible to select projects which will be consistent with such
program when formulated. The President and the Emergency Ad-
ministration under his direction will not await complete formulation,
(1)
2
but, "with a view to increasing employment quickly, while reasonably
securing any loan made by the Administrator", will aid in the con-
struction and financing of any public works project deemed worthy of
inclusion (sec. 203).
The policies adopted by the Administrator, by the authority of the
President, hereinafter set forth, are designed to provide an immediate
program, Federal and local.
SEC. 2. The duty and function of the Emergency Administration
as to Federal projects and/or public works is to determine eligibility
from the standpoint of national planning, and to determine and effec-
tuate allotment of funds appropriated under the act, and to aid in
obtaining compliance by Federal contractors with the rules prescribed
by the President. It is not necessary to describe this process in detail
in this circular.
SEC. 3. But as to non-Federal projects it is necessary to describe the
duties, powers, organization, and iunctioning of the Administration.
The classes of non-Federal projects (public works) eligible for loans.
under the act are set forth in section 202.
(a) Construction, repair, and improvements of public highways and
parkways, public buildings, and any publicly owned instrumentalities
and facilities (such as bridges, tunnels, docks, viaducts, waterworks,
electric power and light plants, canals, markets, etc.).
NOTE. $400,000,000 has been allotted for highways under another section of
the act. This allotment does not preclude consideration of additional highways
and parkways.
(b) Conservation and development of natural resources, including
the control, utilization, and purification of waters, prevention of soil
or coastal erosion, development of water power, transmission of
electrical energy, river and harbor improvements and flood control,
and also the construction of any river or drainage improvement,
required to satisfy any obligation incurred by the United States
through a treaty with a foreign government, heretofore ratified, and
to restore or develop for the use of any State or its citizens water
taken from or denied to them by performance on the part of the
United States of treaty obligations, heretofore assumed.
NOTE. The State Advisory Board, later described, will instruct projectors of
river and harbor improvements and of the river or drainage improvements pur-
suant to treaties to forward their applications direct to the Administrator.
(c) Any projects of the character heretofore constructed or carried
on either directly by public authority or with public aid to serve the
interest of the general public.
NOTE. As to such projects not constructed or carried on directly by public
authority, see Part 2 of this circular.
A VE
(d) Construction, reconstruction, alteration, or repair under public
regulation or control of low-cost housing and slum clearance projects.
NOTE.-See Part 3 of this circular.
(e) Any project (other than those included in the foregoing classes)
of any character heretofore eligible for loans under subsection (a) of
section 201 of the Emergency Relief and Construction Act of 1932
as amended, and paragraph 3 of such subsection (a), shall for such
purposes be held to include loans for the construction or completion
of hospitals, the operation of which is partly financed from public
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funds, and of reservoirs and pumping plants and for the construction
of dry docks.
NOTE. Such hospitals, reservoirs, pumping plants, and dry docks are thus
within the classes eligible for loans. See Part 2 of this circular.
G
Other classes of projects, not included in (a)–(e) of section 202, and
enumerated in the Emergency Relief and Construction Act are:
(1) Loans to private corporations to aid in carrying out the con-
struction, replacement, or improvement of bridges, tunnels, docks,
viaducts, waterworks, canals, and markets devoted to public use and
which are self-liquidating in character.
(2) To make loans to private limited-dividend corporations to aid
in financing projects for the protection and development of forests
and other renewable natural resources, which are regulated by a
State or political subdivision of a State and are self-liquidating.
NOTE.-As to (1) and (2), see Part 2 of this circular.
Returning to the Recovery Act itself, section 203 (a) (4) empowers
the President, through the Administrator, to aid in the financing of
such railroad maintenance and equipment as may be approved by
the Interstate Commerce Commission as desirable for the improve-
ment of transportation facilities.
NOTE. State advisory boards are not concerned with applications by rail-
roads for financing railroad maintenance and equipment. Such applications
are to be made direct to the Administrator. A separate circular will be issued
on railway maintenance and equipment.
SEC. 4. President's power to make grants to public bodies.-Excerpts
from the act relevant to the grant follow:
((* * *
* * *
The President is authorized and empowered
upon such terms as he shall prescribe to make grants to States,
municipalities, and other public bodies for the construction, repair,
or improvement of any such project (those within (a)–(e) above), but
no such grant shall be in excess of 30 percentum of the cost of the
labor and materials employed upon such project” (sec. 203 (a)).
"Provided that in deciding to extend any aid or grant to any
State, county, or municipality the President may consider whether
action is in process or in good faith assured therein, reasonably de-
signed to bring the ordinary current expenditures thereof within
the prudently estimated revenues thereof" (sec. 203 (a)).
SEC. 5. Other powers of the President.-(a) He may extend the
benefits of the title to public bodies notwithstanding limitations.
on their power to borrow.
"The President, in his discretion, and under such terms as he may
prescribe, may extend any of the benefits of this title to any State,
county, or municipality notwithstanding any constitutional or legal
restriction or limitation on the right or power of such State, county,
or municipality to borrow money or incur any indebtedness" (sec.
203 (a)).
This provision is related to the leasing provision of the act which
follows.
(b) The President has power also to acquire any real or personal
property in connection with any projects within the classes (a-e,
above) approved by him to construct or finance the construction there-
of and to lease such projects with or without privilege of purchase as
appears by the following excerpt:
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"The President is authorized and empowered
* * * (3) to
acquire by purchase, or by the exercise of the power of eminent domain,
any real or personal property in connection with the construction of
any such project or (and) to lease any such property with or without
the privilege of purchase
*")
* (sec. 203 a).
*
* * *
(c) The President may sell any security or property acquired:
The President is authorized and empowered
* * * to
sell any security acquired (in connection with loans made by the
United States under the act), or any property so constructed or
acquired (by purchase or by exercise of the power of eminent domain)
in connection with the construction of any project" (sec. 203 a).
(d) Power of President to prescribe rules:
"The President is authorized to prescribe such rules and regulations.
to carry out the purposes of this title and any violation of any such
rule or regulation shall be punishable by fine of not to exceed $500
or imprisonment not to exceed six months or both (sec. 209).
The act throughout is permissive only. The President may exercise
all, any, or none of the powers it invests in him.
SEC. 6. The Executive orders appointing the Special Board for
Public Works and an Administrator.
:
The President has appointed a Special Board for Public Works
consisting of the Secretary of the Interior, chairman, the Attorney
General, the Secretaries of War, Agriculture, Commerce, and Labor;
the Director of the Budget, Henry M. Waite (Deputy Administrator),
and Assistant Secretary of the Treasury Roberts.
On July 8, 1933, the President appointed Harold L. Ickes (Secretary
of the Interior) as Administrator to exercise the powers of that office.
The President has prescribed rules and regulations to carry out the
purpose of the title. (See art. 2, sec. 3.)
The Administrator, with the approval of the President, has adopted
policies to control the administration of the act.
ARTICLE II. POLICIES OF THE EMERGENCY ADMINISTRATION OF PUBLIC
WORKS
SECTION 1. Labor policy.
(1) Opportunities for employment on projects authorized under
the Emergency Administration of Public Works shall be equitably
distributed among the qualified workers who are unemployed, not
among those who merely wish to change one good job for another.
(2) These work opportunities shall be distributed, geographically, as
widely and as equitably as may be practicable. (3) Qualified workers
who, under the law, are entitled to preference shall secure such
preference. (4) The wasteful cost and personal disappointments due
to excessive increase of labor in the vicinity of work projects shall be
avoided. (5) Local labor required for such projects and appropriately
to be secured through employment services, shall, as far as practicable,
be selected from lists of qualified workers submitted by local employ-
ment agencies designated by the United States Employment Service.
Highly skilled or organized labor shall not be required to register for
work at such local employment agencies, but shall be secured in the
customary ways through recognized trade-union locals. In the event
such highly skilled organized workers are not furnished by such
locals within forty-eight hours after request is filed with them, then
5
such workers shall be obtained through local employment agencies.
designated by the United States Employment Service.
SEC. 2. "All contracts let for construction projects and all loans.
and grants pursuant to this title shall contain such provisions as are
necessary to insure (1) that no convict labor shall be employed on
any such project; (2) that (except in executive, administrative, and
supervisory positions), so far as practicable and feasible, no indi-
vidual directly employed on any such project shall be permitted to
work more than 30 hours in any one week; (3) that all employees
shall be paid just and reasonable wages which shall be compensation
sufficient to provide, for the hours of labor as limited, a standard of
living in decency and comfort; (4) that in the employment of labor
in connection with any such project, preference shall be given, where
they are qualified, to ex-service men with dependents, and then in
the following order: (a) To citizens of the United States and aliens
who have declared their intention of becoming citizens, who are bona
fide residents of the political subdivisions and/or county in which
the work is to be performed, and (b) to citizens of the United States
and aliens who have declared their intention of becoming citizens,
who are bona fide residents of the State, Territory, or district in
which the work is to be performed: Provided, That these preferences
shall apply only where such labor is available and qualified to per-
form the work to which the employment relates; and (5) that the
maximum of human labor shall be used in lieu of machinery wher-
ever practicable and consistent with sound economy and public
advantage" (sec. 206).
SEC. 3. Rules prescribed by the President to carry out the purposes
of title II (sec. 206).
(1) No convict labor shall be employed on any project financed in
whole or in part by funds provided by the United States.
No materials manufactured or produced by convict labor shall be
used on any projects so financed.
Violation of this rule may be notified by the agency of the United
States, executing the contract, to the district attorney of the appropri-
ate district, who will proceed, if so directed by the Attorney General,
to bring a criminal action for the violation of this rule.
(2) Thirty-hour week so far as practicable and feasible. This
requirement shall be construed to permit hours of work per week
as provided for any class of labor in the code covering such class,
adopted pursuant to title I of this act. If the class of labor be not
covered by such code then persons in classes not covered shall be
permitted to work only 30 hours per week. This requirement shall be
construed:
(a) To permit working time lost because of inclement weather or
unavoidable delays in any one week to be made up in the succeeding
week or weeks of any calendar month.
(b) To permit the limitation of not more than 130 hours' work in
any one calendar month to be substituted for the requirement of not
more than 30 hours' work in any one week on projects in localities
where a sufficient amount of labor is not available in the immediate
vicinity of the work.
It shall not be considered practicable and feasible to apply either
of these limitations to work located at points so remote and inacces-
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sible that camps are necessary for the housing and boarding of all the
labor employed and if so determined by the State engineer (P.W.A.)
prior to advertisement: Provided, That in such cases no individual
shall be permitted to work more than 8 hours in any one day or more
than 40 hours in any one week.
Violations of this rule may be notified by the Administrator or by
the agency of the United States executing the contract to the district.
attorney of the appropriate district, who will proceed, if so directed
by the Attorney General, to bring a criminal action for the violation
of this rule.
(3) Just and reasonable wages. Such wages shall be compensa-
tion sufficient to provide, for the hours of labor as limited, a standard
of living in decency and comfort.
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NOTE. It is intended that schedules will be furnished the State advisory
boards and the State engineer (P.W.A.), which will determine minimum wages:
(a) All wages shall be paid in full not less often than once each
week and in lawful money of the United States, in the full amount
earned by each individual at the time of payment. There shall be
no deductions on account of goods purchased, rent, or other obliga-
tions. Such obligations shall be subject to collection only by legal
process.
Any violation of rule 3 (a) may be notified by the Administrator, or
by the agency of the United States executing the contract, to the
district attorney of the appropriate district who will proceed, if so
directed by the Attorney General, to bring a criminal action for the
violation of this rule.
(4) The contractor under any construction contract entered into
by the Administrator, or by any agency of the United States, financed
by funds appropriated under the National Industrial Recovery Act,
shall post in a prominent and easily accessible place at the site of the
work a clearly legible statement of all wage rates to be paid the several
classes of labor employed on the work.
Any violation of this rule may be notified by the Administrator, or
by the agency of the United States executing the contract, to the
district attorney of the appropriate district, who will proceed, if so
directed by the Attorney General, to bring a criminal action for the
violation of this rule.
(5) If it shall be found by the Administrator, or by the agency of
the United States executing the contract, that any laborer or mechanic
employed by the contractor or any subcontractor under any contract
financed in whole or in part by funds appropriated under the authority
of the National Industrial Recovery Act, has been or is being paid less
than is prescribed in the contract, the Administrator, or the agency of
the United States executing the contract, shall notify such contractor
or subcontractor to pay such laborer or mechanic all wages due him
according to the prescribed rate. Upon 10 days default on the part
of such contractor or subcontractor, the Administrator, or the agency
of the United States executing the contract, shall notify the district
attorney of the appropriate district, who will proceed, if so directed
by the Attorney General, to bring a criminal action for the violation
of this rule.
SEC. 4. Construction. contract provisions.—(1) There shall be no
requirement in any construction contract providing price differentia-
tions for or restricting the use of materials to those produced within
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the Nation or State, provided, however, that preference shall be given
to the use of materials produced under codes of fair competition
approved under title I of the National Industrial Recovery Act, if
prices, quality, and quantities available are satisfactory to the
Administrator or to the agency of the United States executing the
contract.
NOTE 1.-The above provision, insofar as it prohibits_restriction of materials
to those produced within the Nation, does not apply to Federal contracts.
NOTE 2.—To the extent that it is feasible and practicable and does not involve
higher costs, inferior quality, or insufficient quantity, it is the policy of the
Administrator that local materials should be used.
(2) All construction contracts shall provide that the Administrator,
through his authorized agents, shall have access to all pay rolls, records
of personnel, invoices of materials, and other data relevant to the
performance of the contract.
(3) Every person who performs the work of a laborer or of a mechanic
on a project financed in whole or in part by funds appropriated under
the act shall be entitled to the benefits of the labor and wage provisions
thereof, regardless of any contractual relationship between the con-
tractor or subcontractor and such laborer or mechanic
(4) All construction contracts and subcontracts shall prescribe
minimum wage rates as determined by the agency of the United
States executing the contract, which contractors shall pay to classes
of skilled and unskilled labor. Such minimum rates shall be stated
also in the advertisements for bids and in all proposals of bids sub-
mitted, including those of subcontractors.
(5) Preference in the order stated in sec. 206 (4) shall be given.
to ex-service men with dependents where qualified. The contractor
will be furnished with lists of such ex-service men from the United
States Employment Service.
NOTE.-Instructions will be issued stating procedure in case of dispute as to
the application of this provision in connection with section 1 (5) of this article.
(6) To the extent that the work may be accomplished at no greater
expense by human labor than by the use of machinery, and labor of
requisite qualifications is available, such human labor shall be
preferred. The State engineer (P.W.A.) will make this determina-
tion before advertisement.
SEC. 5. Bidding not to be confined to local contractors.-Bidding shall
be open to all qualified contractors. The State engineer (P.W.A.)
will determine what contractors are qualified, pursuant to instructions.
to be furnished by the Administrator.
SEC. 6. Tests for eligibility of projects.
The Administrator, the State advisory board and the State engineer
(P.W.A.) will apply the following tests in determining the eligibility
of each project submitted:
(1) The relation of the particular project to coordinated planning,
and its social desirability.
NOTE. No project will be considered which is a mere makeshift to supply
work. No non-Federal project will be considered which will require for its
maintenance or operation an additional outlay by the Federal Government.
The Administrator and the State board will consider ascertained
trends as to changes in population, industries, and other social and
economic factors. (See art. III, sec. 2.)
8
(2) Economic desirability of the project; i.e., its relation to unem-
ployment and revival of industry.
(3) The soundness of the project from an engineering and technical
standpoint.
(4) The financial ability of the applicant to complete the work
and to reasonably secure any loans made by the United States.
(5) The legal enforceability of the securities to be purchased by
the United States or of any lease to be entered into between the
applicant and the United States.
SEC. 7. Preferences.—(1) Projects integrated with and consistent
with a State plan are to be preferred to the isolated or inconsistent.
(2) Projects which can be started promptly are to be preferred to
those requiring delay. (3) Projects near centers of unemployment
are to be preferred.
SEC. 8. Tests for the grant to public bodies.-The President is em-
powered to make grants, to States, municipalities, or other public
bodies, for the construction, repair, or improvement of any project
approved by him, not in excess of 30 percent of the cost of the labor
and materials employed upon such project. The terms are to be such
as the President shall prescribe.
The President has prescribed and the Administrator will apply the
following test to enable him to determine whether to make the grant,
and if so, to what extent: The social and economic significance of the
project and its relative importance in the comprehensive national
program of public works contemplated by the act, and the extent its
construction will provide employment and purchasing power in the
vicinity.
The following classes of projects will be preferred as to the grant:
(1) Waterworks projects not unduly burdening the community
with debt and necessary for its health and convenience; (2) sewer
projects of the same character; (3) sewage-disposal projects sufficiently
comprehensive to render a river or lake system, used by many commu-
nities, safe as a water supply, and other sewage-disposal projects; (4)
other projects, which, like the foregoing, are regenerative, i.e., tend to
stimulate further projects, such as highways, bridges, and tunnels,
opening of new territory for homes and industry, projects for the trans-
mission of electrical energy into territories not now served. The
President, in determining whether to allow or withhold the grant, will
also consider to what extent the budget of the applicant is balanced or
in process of balancing and will prefer those public bodies which put
their finances in order.
The grant will not be allowed unless the public body either (a) has
power to sell to the United States its bonds in sufficient amount to
reimburse the United States for its outlay (less the grant if allowed) in
connection with the project and enters into a contract so to do and
to complete the project, or (b) has power to convey the site of the
project to the United States and contracts so to do, and to pay rental
sufficient to reimburse the United States for its outlay less the grant
if allowed, and to complete the project, or (c) is in process of securing
the necessary powers and the Administrator is convinced that such
powers will be obtained, or (d) in special cases as the President may
determine.
SEC. 9. Price of bonds and interest rate of public bodies.-The United
States will bid par and accrued interest, for bonds to finance projects
9
of public bodies, approved by the Administrator, provided all bonds
bear interest at the rate of 4 percent or more. In the event such
bonds bear interest at the rate of more than 4 percent the difference
between 4 percent and the coupon rate will be refunded by the
United States from time to time during the period while such bonds.
remain in the possession of the United States.
SEC. 10. Amortization.-Bonds and obligations under contract of
lease are to be annually amortized pursuant to State statutes and ac-
cording to the life of the project not to exceed 30 years except in the
case of such projects as obviously have a longer life and in no case to
exceed 50 years.
SEC. 11. The contract between the United States and the applicant
(public bodies and others) for benefits under the act.
When the applicant shall have furnished information and evidence
sufficient to assure the fulfillment of the legal, financial, engineering,
and social requirements of the act, and the project has been approved
as to eligibility and terms, a contract will be drawn embodying such
approved terms and if agreed to, will be executed by the Adminis-
trator and the applicant. The contract will state all the terms,
including the wage and labor conditions, and will provide for super-
vision by the Administrator to a degree sufficient to insure compliance
with the construction and other terms thereof.
SEC. 12. There shall be created a Labor Board of Review which
shall hear all issues arising under the operation of these contracts and
such problems as may result from fundamental changes in economic
conditions during the life of these contracts. The Board of Review
to be created shall consist of one representative of labor, one repre-
sentative of the contractors, and a chairman representing the Admin-
istration. The decisions of this Board of Review shall be binding
upon all parties.
OF THE
ARTICLE III. DUTIES, FUNCTIONS, AND ORGANIZATION OF
EMERGENCY ADMINISTRATION
SECTION 1. The act (title II) requires the performance of three
functions: (1) The formulation of the comprehensive plan. This
involves the application of the factors described above (Art. II,
sec. 6, p. 7) to determine the eligibility of any project for inclusion in
the plan. It involves also the ascertainment of the facts as to the
feasibility of the project from an engineering, financial, and legal
standpoint. (2) The negotiation and drafting of a contract between
the United States and the applicant when the project has been ap-
proved by the Administrator. (3) The supervision and policing by
the Administrator of the performance of the contract.
In order to effectually and promptly perform, these functions,
the administration is organized decentrally with centralized control.
SEC. 2. The central organization. (a) The Planning Board. Its
functions are (1) To advise and assist the Administrator in the
preparation of the "Comprehensive program of public works'
required by the Recovery Act, through-
1. The preparation, development, and maintenance of comprehen-
sive and coordinated plans for regional areas in cooperation with
national, regional, State and local agencies; based upon
10
2. Surveys and research concerning (a) The distribution and trends
of population, land uses, industry, housing and natural resources;
and (b) the social and economic habits, trends and values involved
in development projects and plans; and through
3. The analysis of projects for coordination in location and sequence
in order to prevent duplication or wasteful overlaps and to obtain the
maximum amount of cooperation and correlation of effort among the
departments, bureaus, and agencies of the Federal, State, and local
governments.
(b) The labor board. This board will advise and assist the Ad-
ministrator as to the requirements of contracts insofar as they affect
labor. This board will function in cooperation with the Department
of Labor.
(c) The technical board of review. To be referred to this board
are projects approved in principle by the Administrator but of an
unusual character and/or involving difficult questions of engineering,
finance, or law. To it also will be referred projects of a controversial
character for the hearing of objectors.
(d) Units of central organization. Units are set up with appropriate
technical personnel for the consideration of the following classes of
projects: (1) Federal; (2) projects of public bodies (other than hous-
ing); (3) housing; (4) private projects, i.e., those of public facilities
operated by private corporations devoting their property to a public
use (bridges, tunnels, docks, viaducts, waterworks, canals, markets,
hospitals, reservoirs, dry docks, and limited dividend corporations
for the protection and development of forests and other renewable
natural resources; (5) railroad maintenance and equipment for ap-
proval by the Interstate Commerce Commission.
(e) Serving the Administration as a whole, legal and financial units
are set up.
SEC. 3. Travel allowances.-Allowances for authorized travel by
the various classes of officers and employees of the Federal Emergency
Administration of Public Works will be computed as prescribed by
existing laws applicable to such classes, but shall be paid from the
funds made available by the provisions of the National Industrial
Recovery Act.
SEC. 4. Control and method of meeting expenses of technical field forces
by the central administration.-The central office will appoint and
direct a State engineer, who will advise with the State advisory board.
The central office will utilize and direct the disbursing officers of the
Treasury in the disbursement of Federal funds for the payment of
allowances and expenses of the State advisory boards and the regional
advisers.
SEC. 5. Method of providing funds to finance approved projects.-The
central office will utilize banks of the Federal Reserve System as
depositaries of securities purchased by the Administrator and as
fiscal agents for the disbursement of Federal funds to finance the
construction of approved projects. This matter will be covered by
bond-purchase contracts to be executed by the applicant and the
Administrator.
SEC. 6. The central office will receive projects forwarded by the
State boards, by the Reconstruction Finance Corporation, the Federal
departments and independent offices, and will consider them in
accordance with the policy declarations described in article II.
11
It will submit through the Administrator to the President for his
approval all projects deemed eligible for the benefits of the act and
for the determination of the grant (if the projects are those of public
bodies) and of other terms. This submission will be in the form of
a recommendation supported by a brief summary showing the nature
of the project, the name of the applicant, its estimated cost, its social
desirability, to what extent its construction will provide employment
and such other supporting information as may be appropriate.
The central office, through the appropriate State advisory board,
will elicit from the applicant such additional information and data.
(if any is necessary) as will make possible the drafting of a contract
embodying the necessary terms and conditions, and will agree with
the applicant on such terms. Upon the execution of such contract
the central office will forward a copy thereof to the appropriate State
engineer with other information to enable him to supervise and police
the execution of the contract. The central office will also arrange for
the disbursement, pursuant to the contract, of Federal funds to the
applicant for the financing of construction.
SEC. 7. Registration and promulgation of comprehensive program.-
The Administrator will designate an officer whose duty it will be to
register the comprehensive program as projects, Federal and non-
Federal, are from time to time approved by the President, or by the
Administrator under his direction. It will be the duty of such officer
to attest the inclusion of such projects and from time to time cause to
be printed a list of projects so included and attested for the informa-
tion of the Federal departments, public bodies, and others as may be
appropriate.
ARTICLE IV. THE STATE ADVISORY BOARDS AND STATE ENGINEER
(P.W.A.)
SECTION 1. Functions of State advisory boards.—(a) To stimulate the
submission of projects, (b) to inform the public of the classes of
projects eligible for the benefits of the act, (c) to elicit from applicants
the supporting data (social, engineering, legal, and financial), neces-
sary for the consideration of the project, (d) to consider the project.
from the standpoint of local coordinated planning, social and eco-
nomic desirability, provision of employment, diversification of em-
ployment, engineering soundness and otherwise in accordance with
the policies set out in article II, (e) promptly to submit to the Admin-
istrator with its recommendations all projects considered.
SEC. 2. Duties of State engineers (P.W.A.).—(a) General duties.
The engineer will be appointed and directed by the Administrator and
responsible to him. The engineer will be the executive officer of the
board, will organize its office and employ and direct its personnel,
receive, record, and examine all applications and report to the board
on each from the standpoints stated in section 1 (d) of this article.
(b) Procedure as to applications. When an application (in four
counterparts) is received and recorded the engineer will examine it to
ascertain whether it includes all necessary engineering, financial, legal,
and other information, and will elicit from the applicant further
information if needed. When all needed information has been sup-
plied the application will be listed for final examination according to
the priorities stated in article II, section 7. Upon completion of
12
examination the engineer will submit the application to the board and
the board to the Administrator with its recommendation.
SEC. 3. Organization of State advisory boards. Compensation to
each member will be $10 per diem, subsistence at $5 per diem, and
reimbursement for expenses other than subsistence (as allowed by
Government travel regulations). They are authorized to employ such
clerical assistance as is necessary and approved by the Administrator.
Each board is authorized to employ, on a per diem basis not exceed-
ing $15 per diem (expenses as above), such legal, financial, publicity,
and other personnel as may be approved by the Administrator, to
enable it to perform its functions
SEC. 4. The immediate program.-Each State advisory board
promptly will apply itself to the formulation and submission to the
Administrator of an immediate State program of public works. In
some States official agencies have approved programs of projects.
The board will obtain such programs, examine the projects thereon
as to conformity with the policies set out above and expedite the sub-
mission to the Administrator of such as conform.
In those States where no officially approved program exists the
board will proceed to formulate an immediate program of its own.
To that end it will call meetings of such State, municipal, and other
officers, persons, and agencies as it deems qualified in the premises.
The immediate program shall include only such projects as (1) can
be started within 30 days; (2) are safe and sufficient from an engineer-
ing standpoint; (3) are necessary and convenient from a social stand-
point; (4) the applicant has a balanced budget, is in process of bal-
ancing it, or action toward such balancing is in good faith assured.
To the extent such projects are before it, the Board and the State
engineer will give priority in the following order: (1) Waterworks and
sewage projects; (2) sewage-disposal projects sufficiently compre-
hensive to render river or lake systems safe as water supply for large
masses of the population, and other sewage-disposal projects; (3)
other regenerative projects as defined in article II, section 8; (4) other
projects that are socially necessary and economically sound.
The Board will not hold for the completion of the immediate
program projects satisfying the above tests and priorities, but will
submit each project considered by it to the Administrator (after
obtaining the fulfillment of engineering, financial, and legal require-
ments). Forms of reports and recommendations will be furnished
the State engineers. (P. W. A.)
ARTICLE V. METHOD OF FINANCING PROJECTS OF PUBLIC BODIES
SECTION 1. A project of a public body approved by the Adminis-
trator will be financed on the basis of either (a) purchase of the bonds
or other obligations of the public body issued to finance the project,
or (b) lease, in that event the United States acquiring and holding
title to the property until paid for its outlay (less the grant, if made)
through rental or payment of purchase price.
SEC. 2. In the case of purchase of bonds, the United States will
bid on the bonds of a public body to finance a project approved by
the Administrator. The United States will bid par and accrued
interest, provided the bonds bear 4 percent interest, and will be
amortized as provided above.
NOTE. The terms of the bond purchase, including the application of the grant
if allowed, will be covered by a contract to be drawn by the central office after
agreement with the applicant.
+
13
(a) Non-revenue-producing projects.-The usual method of financing
such projects is by the sale of general obligation bonds. Most public
bodies now have statutory authority to issue this type of security.
When available this method should be adopted.
(b) Revenue-producing projects. Some States authorize public
bodies to issue bonds with debt service limited to the earnings of
the utility (waterworks, electric-light plants, etc.). The courts in
some of those States have decided that such bonds are not debts within
constitutional or statutory limitations. In other States the courts
hold that such bonds constitute debt if issued for extensions to an
existing utility and are made payable out of current revenue, as dis-
tinguished from new revenue to be earned through the extension.
Applicants will ascertain and state the law on these points in con-
nection with their applications.
(c) District special assessment bonds.-State law may authorize
such bonds, and if so, their purchase will be considered.
(d) Details of bond procedure.-(1) Such procedure will be the same
as that prescribed by local legislation for sales in the open market,
including advertisement, receiving bids, award, approval by recog-
nized bond attorneys, etc. (2) Bonds may be serial; maturities
distributed through the life of the project. (3) The bonds, if pur-
chased by the United States, will be handled according to the bond
purchase contract. It may be said now that if delivery of the bonds
cannot be made in negotiable form in the first instance, the applicant
will agree to substitute at any time negotiable bonds of the same
character upon demand of the United States and without expense to it.
SEC. 3. Options to public bodies.-They will decide whether the
issue of bonds be for the amount of the entire cost of the project, as
approved, or such amount less the Federal grant, if made. In the
former case the grant may be utilized to meet the debt service for the
early years, possibly 4 or 5, of the life of the bond issue. The effect
of this plan of financing is shown in the accompanying tables; table
I-A, for a $1,000,000 project, life 30 years; table II-A for a project of
the same amount, life 20 years.
In case the public body decides to issue its bonds for only its
portion of the total cost (total less grant) the cost of retiring its issue
will be borne by it. The effect of this plan is shown in the accom-
panying tables; table I-B for a $1,000,000 project, the public body
issuing $750,000, life 30 years; and table II-B, 20-year life.
The tables assume that the State law permits postponement of
payment of any principal maturity for the first 5 years. If this is
not permitted, the table must be revised to accord with local law.
SEC. 4. Future bonding authority.-When the public body has not
now requisite authority but is in process of obtaining it, it is contem-
plated that such prospective authority will be utilized to the extent
necessary.
SEC. 5. Leasing opportunities of the act and procedure thereunder.—
1. The act (title II, sec. 203 a (3)), provides that the United States,
through the Administrator, may acquire by purchase (from the public
body for the benefits of the act or from another), or by the exercise of
the right of eminent domain, the site or other property, necessary for
the construction of any project and may lease such project, together
with the improvement constructed thereon, with or without the priv
ilege of purchase.
14
2. Option to public bodies.—The applicant may, if it considers the
leasing provisions of the act most convenient, make its application
accordingly. To what extent the exhaustion of the applicant's bond-
ing capacity is a condition precedent to the approval of an application
for the exercise of the Administrator's leasing powers, depends upon
the nature of the project. (See policy art. II.)
3. Lease with optional-payment contract (installment method of
repayment).—Further, when the municipality has not the requisite
borrowing authority it is also contemplated that the Federal Govern-
ment may finance the cost of the approved project and enter into a
contract with the public body, if it has legal authority so to do,
whereby the latter agrees to purchase such project on the installment
plan through a period of years.
SEC. 6. Illustrations of possible situations and procedure as to each.
Case 1.-The applicant has borrowing margin sufficient to deliver
its bonds in face amount equal to 100 percent of the estimated cost of
the project. The applicant desires to defer debt service for the first
4 years. In such case the Administrator, upon execution of the
appropriate contract, will allot funds in the amounts and at the times
specified in the contract and as the initiation and progress of the
work requires. The funds will be made available to the applicant
month by month when it shall have delivered (for example) its serial
bonds in face value equal to the estimated cost of the project for that
month; the acceptance of such bonds to be subject to the opinion of
recognized bond counsel as to their enforceability. This opinion is
to be obtained prior to the execution of the contract. In such case,
if the public body so requests and the Administrator approves, the
contract will provide that the United States will apply the amount
of its grant (30 percent of the cost of labor and materials employed
on the project), to the extinguishment of the serial bonds maturing
earliest (or other bonds as the case may be), together with interest,
and during such period, estimated at 4 years, as the amount of the
grant shall allow. Thus the applicant, to the extent stated, will be
relieved of all payments during the period of expected recovery. The
bonds of the applicant delivered to the United States will be sufficient
in amount to include as a capital sum the deferred interest. (See
tables.)
Case 2.-The applicant has sufficient borrowing margin but has
not authorized the bonds. In this case the applicant will perform
the legislative and other acts necessary to issue its bonds as its legally
enforceable obligations. The further procedure will be as in case 1.
Case 3.-The applicant has only partial borrowing margin. In such
case the procedure will be as in cases 1 and 2, as the situation may
require and as to the residue as in-
Case 4.-The applicant has no borrowing margin. In this case
the leasing provisions of the act may be most convenient, as where
the applicant has power to sell sites and/or lease projects, or there is
reasonable prospect that it will promptly obtain such power. In
said situations the United States may acquire title and the improve-
ment may be constructed thereon by the applicant with funds pro-
vided by the United States.
Case 5.-In any of the situations described in cases 1, 2, and 3, the
applicant may prefer to exhaust its grant at the outset, i.e., to deliver
its bonds to the United States in face amount equal only to the cost of
15
i
!
the project less the grant. In that event the bonds will be delivered
in such face amount.
NOTE. In all cases a bond-purchase contract or contract of lease will be
entered into which will fix procedure and details.
The contracts will have such provisions as to public bodies having
power to refund bonds as to enable them to do so.
Such contracts will provide for seasonal notice to the public body
in case the United States desires to sell its bonds so as to provide op-
portunity to the public body to repurchase its bonds if it so desires.
Case 6.-The applicant (public body) may be able to finance its
projects in whole or in part otherwise than by sale of its obligations
to the United States and wishes nevertheless to obtain the grant. In
such case the grant (30 percent of the cost of labor and materials
employed on the project) will be made if the project is approved by
the Administrator and the public body enters into a contract with
the United States whereby the project is constructed under the con-
ditions of sec. 206 and the requirements of article II, sections 1 to
3, inclusive, of this circular.
SEC. 7. Policing of construction contracts. (a) The administrator
will supervise and police the performance of contracts, including the
labor and wage provisions.
SEC. 8. (a) Construction contract bonds.-The Administrator will
require the adequate bonding of construction contracts. Instructions
in this regard, including provision for bonding, to protect labor and
material men, will be supplied.
ARTICLE VI. REGIONAL ADVISERS
SECTION 1. Functions.-(a) To assist the planning board to formu-
late a plan for each region. In such formulation the regional adviser
will consider State plans and apply, so far as applicable, the statement
of functions of the planning board (art. III, sec. 2 (a), p. 9). The
said board will advise and assist the regional adviser in the premises
and he will accumulate and collate and submit to said board all
available information useful to it.
The regional adviser will endeavor to stimulate, by publicity and
otherwise, so far as may be within his power, public interest in
regional and general planning.
SEC. 2. Each regional adviser will obtain from the State advisory
board of his region lists of projects under consideration by them and
a copy of their recommendations and rejections. Each regional
adviser will from time to time visit the offices of the State advisory
boards in his region and will advise and consult with them to the
end that their action may be consistent with sound regional planning.
PART II. LOANS TO PRIVATE CORPORATIONS
(Other than for Housing)
ARTICLE I. PROJECTS OF PRIVATE CORPORATIONS ELIGIBLE
FOR LOANS
SECTION 1. For the projects and private corporations eligible see
article 1, section 3 of this circular.
It will be observed that loans can be made to private corporations
for projects that can be considered as either bridges, tunnels, docks,
16
1
dry docks, viaducts, waterworks, reservoirs, pumping plants, canals,
markets, hospitals, when devoted to public use and when self-
liquidating in character.
NOTE. As the determination of whether any project constitutes 1 or more of
the above 11 types rests solely with the Administrator and not with the applicant,
it is suggested that if there be any doubt in the applicant's mind about the
project being eligible for a loan within the above restricted list, the applicant
should, before making out his application, ascertain by correspondence or other-
wise from the appropriate State advisory board whether the project proposed
does or does not lie within the limited scope permissible under the law.
M
Loans can also be made to private limited dividend corporations,
for the protection and development of forests and other renewable
natural resources, which are State regulated.
SEC. 2. Policies with regard to loans on private projects. The
policies of the Federal Emergency Administration of Public Works
(set out in art. 2, secs. 1-7, inclusive, of this circular) apply to loans to
private corporations. The act does not authorize a grant of 30 per-
cent of the cost of labor and materials or any grant whatever in
connection with loans to private corporations. The rates of interest
governing loans to private corporations and as to each particular loan
will be determined by the Administrator when all other controlling
conditions are known. Pending such determination the applicant
should use 5 percent. All loans to private corporations must be self-
liquidating in character, that is, the project must earn sufficient net
revenue to pay interest on and to retire all its outstanding indebted-
ness together with the indebtedness incurred by the loan within the
conservatively estimated life of the structures which constitute the
project. If the project is an extension to an existing business or
enterprise, then either the revenues of the new project may be shown
to support and repay the new indebtedness caused by the project,
or the revenues of the enterprise as a whole including those of the
project may be shown to support both the prior debt and the new
debt.
-
All loans to private corporations must be well secured. If the
prudently estimated revenues of the project are more than ample to
liquidate the loan, then this margin of safety over and above the
minimum requirements will in itself offer some measure of security,
but in general the applicant will be required to offer as security
collateral or a mortgage on property worth, as appraised by the
Administrator, at least 50 percent in excess of the amount of the
loan. The Administrator will not lend money to reimburse previously
incurred expenditures, nor to purchase existing facilities, unless such
items of cost are clearly necessary to create or accomplish the project.
Consideration will be given to applications involving such expendi-
tures provided they aggregate less than 15 percent of the total loan.
No loans will be made to private corporations for a period of more
than 10 years from the date of the loan; but if the prudently estimated
revenues of the project will liquidate at least 50 percent of the loan
in this period, thus indicating the ability of the project to obtain
refinancing in a normal money market, the Administrator will accept
an obligation to repay, the remainder of the loan, not exceeding 50 per-
cent, at the end of the 10th year. Loans will not be made to private
corporations where the project can be shown to injuriously compete
with existing and adequate facilities.
17
Loans will not be made to private corporations which are not in
possession of any required certificate of convenience and necessity, or
of any required municipal, State, or Federal permit. If no agency ex-
ists to give such certificate or permit, the Administrator will not make
a loan unless he deems such project entitled to such certificate or
permit.
The Administrator may require public letting of all construction
contracts financed by loans under the act.
The labor and wage conditions set out in section 206 and the rules
prescribed by the President and set out in part 1 of this circular
(art. 2, sec. 3) will be a part of every construction contract.
If any land forms a part of the security offered, a certificate of a
recognized title company or counsel as to the sufficiency of the
applicant's title will be required.
SEC. 3. Application.-Owing to the diverse and varied nature of
possible loans to private corporations, no standardized form of applica-
tion blank will be issued.
NOTE. The information required with applications for loans to private
corporations other than for housing will be supplied by the Administrator on
application to the State advisory board.
Applicants should address their applications to appropriate State
advisory board and in four counterparts.
PART III. HOUSING (1)
ARTICLE I. TYPE OF DEVELOPMENT WHICH MAY BE FINANCED
UNDER THE PROVISIONS OF THE ACT
SECTION 1. Summary of sections applicable to housing.—The act, sec.
202 (a) directs the Administrator to prepare a comprehensive pro-
gram of public works which shall include construction, reconstruction,
alteration or repair under public regulation or control of low-cost
housing and slum clearance projects. Not only construction but also
reconstruction, alteration, or repair of housing, is provided for. Slum
clearance and low-cost housing are differentiated so that slum clear-
ance need not necessarily involve the construction of low-cost housing,
and vice versa.
NOTE (1).-Applications for housing and slum clearance projects will be made
direct to the Administrator at Washington.
Section 203 (a) (1) authorizes the Administrator to construct, fi-
nance or aid in the construction or financing of such projects.
Section 203 (a) (2) authorizes the Administrator to make grants to
States, municipalities, or other public bodies for the construction, repair,
or improvement of low-cost housing and slum clearance projects, but
provides that no such grant shall be in excess of 30 percent of the
cost of labor and materials employed upon such project. Under this
section grants can be made to States, municipalities, or other public
bodies, having the power to undertake housing projects directly, in
aid of such projects and either in conjunction with, or independently
of, loans to them. Even though such bodies do not have the power
to undertake housing projects directly, they can assist such projects
by the construction of adjacent parks, playgrounds, etc., in aid of
which they would be eligible for a grant as well as a loan.
18
ARTICLE II. POLICIES OF THE ADMINISTRATOR APPLICABLE TO
HOUSING
1. General. The Administrator in formulating the comprehensive
program of public works directed by section 202 of the act will con-
sider each project with regard to its relation to the entire program.
In formulating this program the Administrator will endeavor to keep
in mind trends in the shift of population and the relocation of industry.
2. Employment. The declared purpose of the act is to further em-
ployment. The building industry includes both skilled and unskilled
workers. It distributes purchasing power promptly; payrolls con-
stitute a very large proportion of the cost of housing. The construc-
tion of adjacent parks, open spaces, playgrounds, etc., will provide
employment for additional groups.
3. Groups to be housed.-What is low-cost housing must necessarily
depend upon local conditions. The Administrator will prefer projects
for those lower-income groups for which modern sanitary housing is
not now available and in which preference in tenancy is given to such
groups. In order to insure low-cost housing, the applicant must be
limited by law or charter provision as to rents, dividends, and interest
on securities. No loans will be made to speculative building projects.
4. Location.-New housing should preferably be located with ref-
erence to a long-term plan for the economic development of the com-
munity, and with particular reference to availability of employment,
existing housing, transportation facilities, schools, and utilities. It
should not be confined to urban regions or crowded centers but should
also include sections where the price of land is such as to permit the
furnishing of housing for the lowest-income groups, while maintaining
standards of design set forth below.
5. Land. Since the purpose of the act is to further employment,
projects on low-cost land and involving a low ratio of land cost as
compared with labor and material cost will be favored. Preference
will also be given to projects which include land as part of the equity
investment and which consequently permit the maximum use of
Federal funds for eonstruction.
The Administrator will consider the value of land on the basis of
earnings reasonably to be anticipated from its use for low-cost housing.
Costs in excess of such value, whether based on speculative considera-
tions or on the alleged value of the land for other purposes, will not be
recognized.
6. Standards of design.—(a) The project is to be conceived as a unit
in a neighborhood community. The distribution of various types and
sizes of single and multifamily dwellings should be fixed with respect
to variation in income groups and in the size of families. The monot-
ony resulting from excessive repetition of one size or type of dwelling
should be avoided.
(b) Preference will be given to projects with a low coverage.
Site-planning should be such as to insure permanent light, air, out-
look, recreational facilities and garden setting.
(c) Projects should utilize existing streets and physical utilities
insofar as possible and should be isolated from through traffic but
convenient to transportation and highway facilities.
19
(d) The buildings should be simple in design but well constructed,
to insure low maintenance and operating cost. Preference will be
given to fireproof construction, in order that a low depreciation
factor may be safely used.
(e) The project may include provision for subsistence gardens,
stores, and such other commercial facilities as may properly be con-
sidered part of a housing development.
ARTICLE III. PUBLIC REGULATION OR CONTROL
Regulation or control will be exercised by the Administrator by
contract and charter provisions and by agreements for the trustee-
ing of capital stock. In States where State housing commissions or
other regulatory bodies have been created by law and are actually
organized and in effective operation, the Administrator will ordina-
rily require that application shall be made also to such bodies.
ARTICLE IV. FINANCING
SECTION 1. Self-liquidation. No housing loans will be made
which cannot be safely self-liquidated during the useful life of the
building.
SEC. 2. Interest.-For the purpose of making application a rate of
4 percent may be assumed, with the understanding that this may be
subject to adjustment.
SEC. 3. Amortization, percentage, and period of loan.-The per-
centage of loan will be determined with relation to each particular
project, and the rate of amortization will be based on the useful life
of the building. No loan will be granted for a period greater than
the useful life of the building, not to exceed 30 years, which will be
determined by the quality and character of construction. For the
purpose of making application, an amortization period of 30 years on
fireproof and of 25 years on nonfireproof buildings may be assumed,
with the understanding that this may be subject to adjustment.
Savings in interest resulting from the reduction of the loan will be
added to the amount of amortization due each year, so that the an-
nual sum of interest and amortization payments will be uniform
throughout the life of the loan.
SEC. 4. Type of security.-The type of security will depend upon
the character of the project. In most cases the Administrator will
purchase first-mortgage bonds in the principal amount of the loan
granted, issued under and secured by an indenture and mortgage
running to a trustee approved by the Administrator. Where housing
projects are undertaken by States, municipalities or other public
bodies, the Administrator may purchase the general obligation or
revenue bonds of such bodies.
SEC. 5. Sales projects.-Where the sale, rather than the rental of
housing units, is contemplated, the Administrator will ordinarily
require that the units be rented for the period of the loan, the tenant
to be given the option to purchase at the expiration of the period and
to apply past rental payments on account of the purchase price.
Obviously in such case the loan would be, not for the period of the
20
useful life of the building, but for the customary period of installment
sales contracts of units of this type. The Administrator will allow
the sale of an individual unit before the expiration of the period, upon
the completion of all payments only if the release of the unit from
under the mortgage would not impair the value of the remaining units.
SEC. 6. Equity investment.-The equity investment, through the
purchase of securities or otherwise, may be furnished in the form of
cash, land, materials, services, or labor. Municipalities and other
governmental bodies may contribute equity to the project in the
form of land through street vacations and also by acquiring for park
purposes land which would otherwise be needed to provide adequate
open spaces surrounding the improvements.
SEC. 7. Contracts. In all cases the cost of the entire project must
be guaranteed by the applicant. All subcontracts and purchase of
materials must be awarded on a competitive basis. In case a general
contractor has already been selected which precludes competitive
figures being taken in the letting of the general contract, a guaran-
teed maximum cost of construction shall be stated which shall include
an agreed, stated amount as the contractor's fee. Under this type of
contract all construction costs will be audited and the loan adjusted
accordingly. In other cases competitive figures in the letting of the
general contract will be insisted upon.
ARTICLE V. LABOR, WAGE, AND EMPLOYMENT PREFERENCE CON-
DITIONS OF CONSTRUCTION CONTRACTS. (SEC. 206)
SECTION 1. The text of this section appears in article 2, section 2 of
this circular. The rules prescribed by the President appear in
article 2, section 3. Every construction contract and subcontract
financed in whole or in part by loans under the act must contain as
conditions the rules prescribed by the President.
ARTICLE VI. SUBSISTENCE HOMESTEADS
A circular will follow dealing with the subject.
PART IV. APPLICATIONS HERETOFORE MADE TO THE RECONSTRUC-
TION FINANCE CORPORATION
SECTION 1. All applications for loans of a self-liquidating character
heretofore submitted to the Reconstruction Finance Corporation
under the Emergency Relief and Construction Act of 1932 and which
have not been approved by that Corporation will, upon written re-
quest, of the applicant to the Administrator, be reexamined under the
provisions of the National Industrial Recovery Act.
Such reexamination will be done at the central office in Washington,
and if the applicant has furnished all the information requested by
the R.F.C., no additional information need be furnished, unless re-
quested by the Administrator.
SEC. 2. The Administrator will not consider applications for loans
on any project which stood approved by the board of directors of the
Reconstruction Finance Corporation as of June 26, 1932. Should
the said board hereafter rescind its approval of any such project, the
applicant may then make application for aid in financing the project
through the appropriate State advisory board.
21
TABLE I-A.-Showing spread of costs between Federal and local governments:
$1,000,000 project; serial bonds; 30-year life; interest 4 percent; cost, estimated,
Federal, $250,000; local, $750,000

1..
2...
3_.
4..
5
6_
7
8.-
9__
10...
11...
12...
13..
14.
15..
16.
17...
18....
19...
20...
21..
22
23
24
25-
26.
27
28
29
30..
1
2
3.
4..
5
6
7
8..
9__
10...
11...
12..
13..
14..
15.
16.
End of year
17..
18..
19_.
20..
Total....
Average annual
cost..
End of year
Annual cost
Total....
Average annual
cost..
Princi- Inter-
pal
est
$33,000 $40, 000
33,000 38, 680
34,000 37, 360
33,000 36,000
34,680
33,000
34,000 33, 360
33,000
32,000
33,000
30, 680
34,000 29, 360|
33,000
33,000
34,000 25, 360
33,000
24,000
33,000 22,680
31,000
33,000
33,000
28,000
26,680
34,000
33,000
33,000
34, 000
18, 680
17, 360
Annual cost
Total
Princi- Inter-
pal
est
$50,000 $40, 000
50,000 38,000
50,000
36,000|
34,000)
50,000
50,000 32, 000
50,000 30,
30, 000
50,000 28,000
50,000 26,000
50,000| |24,000
50,000) 22,000)
50,000 20,000.
65,000
63,680
63, 360
61,000
59, 680
59, 360
57,000
55, 680
55, 300
$73,000 $33,000 $40,000
71, 680 33, 000
38, 680
71, 360
34,000 37, 360
69,000 33,000 960
67, 680
67, 360
53,000
51,680
51, 360
49,000
47,680
47, 360
45,000
43, 680
43, 360
34,000 21,360|
33,000
20,000
33,000
34,000
33,000
33,000
16,000
14, 680
34,000 13, 360
33,000
12,000
33,000
10, 680
9, 360
8,000
34, 000
41,000
6,680
39, 680
39, 360
33, 000
33,000
5, 360
4,000
34, 000
33,000
33,000
37,000
2,680 35, 680
1,360 35, 360
34, 000
1.000, 000 620, 400 1, 620, 400 133, 000 117,000 250,000 867,000
Total
Paid by Federal
Government
Princi- Inter-
pal est
80, 00
78, 000
Total
76,000
74,000
72,000
70,000
68,000
66,000
64,000
62, 000
$73,000
71, 680
71, 360
33, 960
Princi- Inter-
pal est
Paid by Federal Gov-
ernment
$90,000 $50,000 $40,000 $90,000
88,000 50,000 38,000 88,000
50,000|||| 22, 000 72,000
86,000
84,000
$2,000
Paid by local government
TABLE II-A.-Showing spread of costs between Federal and local governments.
$1,000,000 project; serial bonds; 20-year life; interest 4 percent; cost, estimated,
Federal, $250,000; local, $750,000
Total
Princi- Inter-
pal est
$33,000
34,000
33,000
33,000
34,000
33,000
33,000
34,000
33,000
33,000
34,000
33,000
33,000
34,000
33,000
33,000
34,000
33,000
33,000
$35, 040
34, 680
33, 360|
32,000
30, 680
29, 360|
28,000
26,680
25, 360
24,000
22, 680
21, 360
20,000
18,680
17, 360
16,000
14, 680
13, 360
12,000
10, 680
9,360
8,000
6, 680
5, 360
4,000
2, 680
1, 360
503, 400
Total
$35, 040
67, 680
67, 360
65,000
63, 680
61, 360
61,000
59, 680
59, 360
Princi- Inter-
pal
est
57,000
55, 680
55, 360
53,000
51, 680
51,360
49,000
47, 680
47, 360
45,000
43, 680
43, 360
41,000
39, 680
39, 360
37,000
35, 680
35, 360
1,370, 400
45, 680

Paid by local government
$14,000
$50,000|| 34, 000|
50,000 32, 000
50,000 30,000
50,000 28,000
50,000 26,000
50,000 24,000
50,000 22,000
50,000 20,000
50,000 18,000
50,000
16,000į
50,000 14, 000)
50,000 18,000
50,000 16,000
50,000 14,000
50,000 12,000
50,000 10,000
50,000
62,000
60,000
58,000
60,000
50,000 8,000
12,000
50,000 10,000
50,000 8,000
50,000 6,000
56,000
50,000 4,000 54, 000
50,000 2,000 52, COO
58,000
56,000
50,000
6,000
50,000 4,000
50,000 2,000
54, 000
52,000
1,000,000 420,000] 1, 420, 000] 150,000 100,000 250,000 850, OCO| 320,000 1,170,000
58,500
Total
$14,000
81,000
82,000
80,000
78,000
76,000
74,000
72,000
70,000
68,000
66,000
64, 000
22
TABLE I-B.-Showing spread of costs between Federal and local governments.
$1,000,000 project; city issues $750,000 bonds; serial bonds; 30-year life; interest
4 percent principal payments deferred for 5 years; cost, estimated, Federal,
$250,000; local, $750,000

1
2
3.
4.
5
6....
7 .
8
9
10...
11..
12
13.
14.
15.
16.
17..
18.
19.
20
21.
22
23.
24
25
26.
27
28
30.
1...
2
3.
4..
5.
6.
7.
8.--.
9___.
10...
11.
12
13.
14.
15
End of year
16.--.
17.
18...
19.
20
Total.....
Average annual cost..
End of year
Total..
Average annual cost.
Principal
$30,000
30,000
30,000
39,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,000
30,009
30,000
30,000
30,000
30,000
30,000
750,000
Princi-
pal
Annual cost
Interest
$30,000
30,000
о
26, 400
25, 200
24,000
22,800
21, 600
20, 400
19, 200
18, 000
16.800
15, 600
14,400
30,000
30,000
30,000 30,000
30,000 30,000
30,000 60,000 $30,000
28,800
58,800
27,600
57,600
13, 200
12,000
10, 800
9, 600
8,400
7,200
Total
6,000
4,800
3,600
2,400
1,200
$30,000
30,000
Annual cost
56, 400
55, 200
54,000
52,800
51,600
50,400
49, 200
48,000
46,800
45, 600
44,400
43, 200
42,000
40,800
Paid by local government
Principal Interest Total
Interest Total
30,000
30,000
30,000
30,000
30,000
30,000
30.000
30,000
30.000
39, 600
38, 400
37,200
30,000
36,000
30,000
34, 800
33,600
30,000
30,000
30,000
32,400
31, 200 30,000
540,000 1,290, 000 750,000
30,000
30,000
30,000
30,000
30,000
30.000
30,000
30.000
30.000
Princi-
pal
$30,000
30,000
$30,000
30,000
30,009
30,000
30,000
30,000
30,000
30,000
$50,000
50,000
50,000
50,000
30,000 80,000
28,000 78,000
26,000 76,000
24,000 74,000
50,000 22,000 72,000
50,000 20,000 70,000
50,000 18,000 68,000
50,000 16,000 66,000
50,000 14,000 64,000
50,000 12,000 62,000
50,000
50,000
10,000 60.000
8,000 58,000 50,000
50,000
50,000
6,000 56,000
50,000
4,000 54,000 50.000
50,000
2,000
52,000 50,000
750,000
390,000 1,140, 000
750,000
$30,000 $30,000
30,000
30,000
30,000
30,000
30,000
TABLE II-B.-Showing spread of costs between Federal and local governments.
$1,000,000 project; city issues $750,000; serial bonds; 20-year: interest 4 percent;
principal payments deferred for
deferred for 5 years; cost,
5 years; cost, estimated, Federal, $250,000;
local $750,000
30,000
30,000
30,000
30,000
28,800
27,600
$50,000
50,000
50,000
50,000
50,000
50.000
50,000
50,000
50,000
50,000
50,000
26, 400
25, 200
24.000
22,800
21,600
20, 400
19, 200
18,000
16,800
15,600
14,400
13, 200
12,000
10.800
9,600
8,400
Paid by local government
Interest
60,000
58,800
57,600
7,200
6,000
36,000
4,800
34, 800
3,600
33, 600
2,400
1, 200
32, 400
31, 200
540,000 1,290, 000
43,000
$30,000
30,000
30,000
30,000
30,000
30,000
28,000
26, 000
24,000
22,000
20,000
18.000
56, 400
55, 200
16,000
14,000
12,000
10,000
54,000
52, 800
51,600
50, 400
49, 200
48,000
46,800
45, 600
44,400
43, 200
42,000
40, 800
39, 600
38, 400
37, 200


8,000
6,000
Total
$30,000
30,000
30,000
30,000
30,000
80,000
78,000
76,000
74,000
72,000
70,000
68,000
66,000
64, 000
62, 000
60,000
58,000
56, 000
54,000
52,000
4,000
2,000
390,000 1, 140, 000
57,000

FEDERAL EMERGENCY ADMINISTRATION
OF PUBLIC WORKS
WASHINGTON
CIRCULAR No. 2
INFORMATION REQUIRED WITH
APPLICATIONS FOR LOANS TO STATES
COUNTIES, MUNICIPALITIES, AND
OTHER PUBLIC BODIES
AUGUST 1, 1933
THERE IS NO FEE FOR FILING AN
APPLICATION
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON: 1933
DEPOSITED BY
UNITED STATES OF AME
SEP 18 3
Circular No. 2
Information required with applications for loans to
STATES, COUNTIES, MUNICIPALITIES AND OTHER PUBLIC
BODIES
I. General Instructions.
Four (4) complete copies of the application and the accom-
panying papers and drawings should be submitted to the State
Advisory Board, Federal Emergency Administration of Public
Works, whose office is situated in the State in which the project
is located. If the project is located in two or more States the
application and other papers should be submitted to the State
Advisory Board in the State in which the principal office of the
applicant is located.
All exhibits attached to the application should be given a
convenient reference number.
The estimated costs required to be given should be based on
the labor requirements and other special conditions set forth in
the National Industrial Recovery Act, particularly section 206.
A study of the application may disclose the need for addi-
tional information. In order to expedite action on the applica-
tion such information should be furnished promptly on request.
The application should state substantially the information
called for below and in the order called for.
NOTE. For the purposes, policies, functioning and organization of the Emer-
gency Administration and the rules prescribed by the President, see Circular
No. 1 dated July 31, 1933.
II. Summarized General Information
(a) Full corporate name of applicant and the date of its
organization.
(b) Name, title, and address of the official representative
or representatives with whom correspondence should
be conducted.
(c) Name and address of the applicant's attorney.
(d) Name and address of the applicant's consulting engineer
or architect.
(e) The applicant's population in 1910, 1920, and 1930
(give brief explanation of any abnormal increase or
decrease in population).
4038° -33
2
III. The Loan Requested
(a) Amount.
(b) Security (kind of obligation offered) i.e.-general obliga-
tion bonds, revenue bonds, etc.
(c) Period of the loan and maturities (annual amounts if
serial maturities).
(d) Preferred method of application of grant if allowed (see
Circular No. 1, page 14).
(e) Schedule showing dates when funds will be needed and
amounts.
IV. The Project
(a) General description with drawings sufficient for a
thorough understanding of the project; and report of
consulting or other engineer or architect if available.
(b) Estimate of the cost of the project subdivided into prin-
cipal sections or items, in sufficient detail to permit
checking, showing separately the following subtotals:
(1) Preliminary expenses;
(2) Cost of land, rights of way, and easements;
(3) Construction cost, subdivided into principal
structures or classes of work, and showing (i)
labor and (ii) material cost for each subdivi-
sion;
(4) Engineering charges;
(5) Legal, administration, and other overhead
charges;
(6) Interest during construction;
(7) Miscellaneous costs in reasonable detail.
(c) Statement of the economic and social value of the
project.
(d) Statement as to whether or not project is part of a larger
plan or long-range program of development, and if so,
give description of other parts of plan or program.
(e) Statement as to whether or not the applicant has a city
or regional planning board, whether this project has
been submitted to such board, and the views of such
board, if any, in regard to it. (Report of planning
board should be attached, if available.)
(f) Statement as to whether the community is part of a
metropolitan district and, if so, whether the project is
coordinated with the plans for metropolitan develop-
ment.
IV. The Project-Continued
3
(g) Statement as to all endorsements that are known to
have been made by civic groups and other similar
bodies in respect of the project or the application,
together with names and addresses of such endorsers.
(h) Statement as to all objections that are known to have
been made in respect of the project or the application,
together with the names and addresses of such objectors;
if no such objections have been made, that fact should
be stated.
(i) Statement as to whether or not the project will compete
with any similar enterprise.
(j) Statement as to status of drawings and specifications;
when construction can be commenced; and when
project will be completed.
(k) Statement of estimated average number of men to be
employed each month, directly on the project, giving
the number of months.
V. Revenue and expenses (Information to be submitted where loan,
in whole or in part, is to be secured by pledge of revenues derived
from the project.)
(a) If project is an extension of an existing system, give
statement with appropriate subdivisions showing for
each of the past three fiscal years:
(1) Operating income;
(2) Operating and other costs.
Statement should also show for each such year, the
extent of the business of the system, as indicated by
number of consumers or users, quantity of production.
or sales or other similar data.
(b) Give estimate with supporting data of annual operating
income and of operating and other costs reasonably to
be anticipated from the project if a new system, or
from the existing system as extended or improved by
the project, for the life of the loan. Give estimate
showing for each year the extent of the business of the
system as completed or as enlarged and extended, based
upon the estimated number of consumers or users,
quantity of production or sale or other similar data.
(c) A statement showing application of estimated income
and disposition of surplus for each year during the life
of the loan.
(d) Discuss any unusual conditions affecting present or
estimated future operating income and expenses.
4
V. Revenue and expenses-Continued
(e) Give schedule of rates now in force and proposed rates
after completion of the project, stating whether such
rates are subject to approval by other public authority.
VI. Financial Data
(a) Statement of assessed valuation of taxable property
(showing real and personal property separately) for
each of the last 3 fiscal years and ratio which such as-
sessed valuation bears to actual value.
(b) Statement of gross funded debt at date of application,
giving purposes for which each item of debt was in-
curred, classified as follows, and showing amount out-
standing, interest rate, and maturities for each item:
(1) General obligation bonds,
(2) Revenue bonds,
(3) Assessment bonds, and
(4) Other kinds of funded obligations.
(c) Statement of sinking funds, showing amounts applica-
ble to each item of debt, and details of sinking-fund
investments.
(d) Statement of gross floating debt at date of application,
showing separately amount borrowed in anticipation of
taxes and amount borrowed in anticipation of creation
of funded debt, and showing interest rate and date of
maturity for each item.
(e) Statement of gross debt of all overlapping taxing or
assessment districts (i.e. school, paving, or other dis-
tricts wholly or largely within the territorial limits of
the applicant).
M
(f) Statement that all outstanding financial obligations of
applicant and overlapping districts have been included
in (b), (d), and (e) above.
(9) Statement of any defaults or postponements in payment
of the principal of or interest on any outstanding
obligations at any time, with explanation if any defaults
or postponements.
(h) Statement of present total tax rate per $1,000 of assessed
valuation, showing separately rate for State, county,
city, school and any other overlapping taxing districts.
(i) Statement showing separately for each of the last 3
fiscal years amount of taxes levied (stating whether of
total taxes, or of taxes levied for municipal purposes
only), amount uncollected at delinquent date, and
amount now uncollected.
On
5
VI. Financial Data-Continued
(7) Statement of dates on which taxes are levied, on which
they become payable, and on which they become
delinquent.
(k) Statement of penalties on delinquent taxes.
(1) Evidence that the ordinary current expenses are within
the prudently estimated ordinary revenues, or that
action is in process or in good faith assured designed to
bring this about. Attach last complete financial state-
ment, and a statement showing, in reasonable detail,
receipts and expenditures for next preceding 4 years,
separating, as far as possible, ordinary receipts and
expenditures from extraordinary items, such as capital
improvements and creation and payment of debts.
(m) Brief general description of community, including in-
formation regarding railroads and main highways by
which served, chief industries or commercial activities,
products of surrounding country, and any other items
of interest.
VII. Legal data.-A legal memorandum signed by counsel for the
applicant discussing in detail all legal questions arising in connec-
tion with the project and the incurring of the proposed indebted-
ness should be attached to the application. Among other points
the memoranduin should cover:
(a) Reference to any general, special or local laws and State
constitutional provisions pursuant to which the appli-
cant was organized.
(b) If the applicant has a special charter, furnish a certified
copy together with a certificate by proper officer to the
effect that such copy is a true and complete copy of
the present charter including all amendments to date.
(c) Give constitutional or statutory debt limitation. Give
constitutional or statutory tax limitation and state
whether such limitation includes debt service.
(d) State deductions which are allowed in ascertaining net
debt stating separately amount of present gross and
net indebtedness and character and amount of indebted-
ness for which deduction is claimed.
(e) Give reference to provisions of constitution and of
general, special, or local laws empowering the applicant
(1) To construct the proposed project; and
(2) To issue the proposed obligations or otherwise
finance the project in the manner proposed.
6
VII. Legal data-Continued
(f) Is authorization by voters required? If election has
already been held, submit certified copies of all pro-
ceedings taken in respect of such election, including
authorization for election, notice, ballot, and certificate
of result.
(g) In authorizing construction of proposed project and
issuance of proposed obligations, does applicant act by
ordinance or resolution?
(h) Is it necessary for such ordinance or resolution to be
published before taking effect?
(i) Is it necessary for applicant to obtain any franchise or
other permit from any public agency or other authority
to construct and/or operate the proposed project?
If so, state character of franchise or permit, from whom
necessary, what steps, if any, have been taken to obtain
it, or if not yet obtained, what steps must be taken and
within what approximate time may such franchise or
permit be obtained.
(j) May applicant sell proposed obligations at private sale,
or is it necessary to sell such obligations at an advertised
public sale? If public sale is required, state manner
and time required for giving notice.
(k) State maximum rate of interest which proposed obliga-
tions may bear.
(1) State minimum price for which proposed obligations
may be sold.
(m) Is it necessary for applicant first to offer proposed
obligations to any other authority before such obliga-
tions may be sold to the public? If so, state to whom,
giving reference to appropriate section of statute.
(n) Give reference to provisions of statute regulating ma-
turities of obligations, stating time within which first
installment of obligations must become due and maxi-
mum period within which last installment must become
due.
(0) If statute regulates amount of obligations falling due in
any given year, state restrictions, giving reference to
appropriate section of the statute.
(p) Are proposed obligations negotiable instruments under
the negotiable instruments law?
(q) Are the proposed obligations legal investments for ad-
ministrators, trustees, and other fiduciaries, and for
savings banks and insurance companies organized
under the laws of the State in which the applicant
is situated?
VIL Legal data-Continued
7
(r) May proposed obligations be made registerable as to
principal only or as to both principal and interest?
(s) Do proposed obligations and the proceedings for their
issuance have to be approved by the attorney general
of the State or any other authority? If so, by whom?
(t) Are the proposed obligations required to be registered
in the office of any State, county, municipal or other
authority prior to their issuance?
(u) Will proposed obligations be exempt from all taxation
(except estate, inheritance, and gift taxes) under the
laws now in force of the State in which the applicant
is situated?
(v) Will interest to be paid on proposed obligations be
exempt from all taxation (except estate, inheritance,
and gift taxes) now or hereafter imposed by the United
States under the Constitution now in force?
(w) Is any litigation now in process, pending or threatened
(either in State, local, or Federal courts), in anywise
affecting the corporate existence of the applicant, the
authorization, execution, sale and delivery of the
proposed obligations, the construction of the proposed
project, the levy and collection of taxes to pay the
principal of and interest on the proposed obligations,
the boundaries of the applicant, or the incumbency of
any of its officers?
(x) Will it be necessary to obtain property by condemnation
proceedings, or otherwise? Give reference to law author-
izing proposed proceedings and state approximately how
long it will take to acquire such property.
(y) Give name and address of bond counsel of recognized
national standing who will furnish opinion on proposed.
obligations.
(2) If the proposed securities are what are generally known
as revenue bonds, and are payable only from the rev-
enues to be derived from the operation of the project,
the holder thereof having no recourse for payment to
the general taxing power of the municipality, then-
(1) Does the issuance of such securities constitute
the incurring of a debt by the municipality
within any State constitutional or statutory
provision or limitation? Has the court of last
resort in the State in which the applicant is
situated passed upon this question? If so,
cite decisions.
8
VII. Legal data-Continued
(2) Has the court of last resort in the State in which
the applicant is situated held that revenue
bonds or other like obligations issued for the
construction of extensions or improvements to
an existing municipally-owned revenue pro-
ducing utility, when made payable from and
secured by a pledge of the revenues of the
existing utility as extended or improved, con-
stitute debt? If so, cite decisions.
(3) Are proposed obligations payable from the
gross or net revenues of the existing utility as
extended or improved, or are such obligations
payable from the gross or net revenues defi-
nitely allocable to or shown to be derivable
from the proposed extensions or improvements
to the existing utility?
(4) In the event of failure on the part of the munic-
ipality to perform the covenants and agree-
ments to be set forth in the ordinance or
resolution authorizing the issuance of the
proposed obligations, what will be the remedies
of the holder of such obligations?
(5) If the proposed obligations are additionally
secured by a mortgage or trust indenture, has
the court of last resort of the State in which
the applicant is situated passed upon the
power of the applicant to make such a mort-
gage or trust indenture? If so, cite decisions.
(aa) If the proposed securities are what are generally known
as "special assessment bonds" or other like obligations,
then state:
P
(1) How are such special assessments fixed and
when do they become final?
(2) In the event of default in the payment of the
principal of or interest upon such obligations,
what are the remedies of holder?
t
(3) What character of lien have such special assess-
ments on the properties benefited and is this
lien superior or junior to the lien of other
taxes?
(4) Is there any additional security for the pay-
ment of such obligations other than the
special assessments?
(5) Does the issuance of such obligations constitute
the incurring of a debt?
VIL. Legal Data-Continued
9
(bb) If the applicant has no power to issue general obliga-
tions or special revenue bonds, give reference to pro-
visions of general, special, or local laws empowering
applicant to convey site upon which project is to be
constructed to the United States and enter into a lease
with the United States relative to the project and
obligate itself to pay rental therefor.
о
FEDERAL EMERGENCY ADMINISTRATION
OF PUBLIC WORKS
WASHINGTON
CIRCULAR No. 3
INFORMATION REQUIRED
WITH APPLICATIONS FOR LOANS
TO PRIVATE CORPORATIONS
(OTHER THAN LOANS FOR HOUSING PROJECTS AND
FOR PROJECTS FOR THE PROTECTION AND DEVELOP-
MENT OF FORESTS AND OTHER RENEWABLE
NATURAL RESOURCES)
AUGUST 10, 1933
THERE IS NO FEE FOR FILING AN
APPLICATION
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1933
DEPOSITED BY THE
TATED STATES OF
LUG 3 0 '33
Circular No. 3
Information required with applications for loans to
PRIVATE CORPORATIONS
(OTHER THAN LOANS FOR HOUSING PROJECTS AND FOR PROJECTS
FOR THE PROTECTION AND DEVELOPMENT OF FORESTS AND
OTHER RENEWABLE NATURAL RESOURCES)
I. General Instructions
Four (4) complete copies of the application and the accom-
panying papers and drawings should be submitted to the State
Advisory Board, Federal Emergency Administration of Public
Works, whose office is situated in the State in which the project
is located. If the project is located in two or more States, the
application and other papers should be submitted to the State
Advisory Board in the State in which the project principally
lies.
All exhibits attached to the application should be given a
convenient reference number.
The estimated costs required to be given should be based on
the labor requirements and other special conditions set forth in
the National Industrial Recovery Act, particularly section 206.
A study of the application may disclose the need for addi-
tional information. In order to expedite action on the applica-
tion such information should be furnished promptly on request.
The application should state substantially the information
called for below and in the order called for.
NOTE. For the purposes, policies, functioning, and organization of the Emer-
gency Administration and the rules prescribed by the President, see Circular
No. 1, dated July 31, 1933.
II. Summarized General Information
(a) Exact corporate title of applicant, state of incorpora-
tion, specific statute under which incorporated, class of
corporation (e.g., "public service corporation") as
classified under the statute, and date of incorporation.
(b) Address of applicant.
(c) Name, title, and address of the official representative
or representatives with whom correspondence should be
conducted.
5485-33
(1)
2
(d) Name and address of applicant's attorney.
(e) Name and address of applicant's consulting engineer
or architect.
(f) Population of the municipality or community in which
the project will be located for the years 1910, 1920, and
1930 (give brief explanation of any abnormal increase
or decrease in population).
III. Loan Requested
(a) Amount.
(b) Security: State in detail the lien (e.g., first mortgage)
offered as security, giving an adequate statement of
the property to be subject to such lien.
(c) Period of the loan and maturities (annual amounts if
serial maturities).
(d) Schedule showing dates when funds will be needed and
amounts.
IV. The Project
(a) General description with drawings sufficient for a
thorough understanding of the project; and report of
consulting or other engineer or architect if available.
If the project includes more than one of the types for
which loans can be made to private corporations (e.g.,
a dock and market), the statement should show clearly
what portion of the project constitutes each type. If
a loan is sought for the construction of any incidental
facilities, such incidental facilities should be described
in detail, stating the need for the same, the capacity
thereof and showing that they constitute an integral
and indispensable part of the eligible project.
(b) Detailed estimate of the cost of the project subdivided
into principal sections or items, in sufficient detail to
permit checking, showing separately the following
subtotals:
(1) Preliminary expenses;
(2) Cost of land, rights of way and easements;
(3) Construction cost, subdivided into principal
structures or classes of work, and showing:
(i) labor; and
(ii) material cost for each subdivision.
(4) Engineering charges;
(5) Legal, administration, and other overhead
charges;
(6) Interest during construction;
(7) Miscellaneous costs in reasonable detail.
3
(c) If the project is the improvement or extension of an
existing system, set forth a complete description of the
existing system.
(d) Statement of the economic and social value of the
project.
(e) Statement as to whether or not project is part of a
larger plan or long-range program of development; and
if so, give description of other parts of plan or
program.
(f) Statement as to whether or not the area served has a city
or regional planning board, whether this project has
been submitted to such board, and the views of such
board, if any, in regard to it. (Report of planning
board should be attached, if available.)
(g) Statement as to whether the community served is part
of a metropolitan district and, if so, whether the project
is coordinated with the plans for metropolitan develop-
ment.
(h) Statement as to all endorsements that are known to have
been made by civic groups and other similar bodies in
respect of the project or the application, together with
names and addresses of such endorsers.
(i) Statement as to all objections that are known to have
been made in respect of the project or the application,
together with the names and addresses of such objectors;
if no such objections have been made, the fact should
be stated.
(j) Statement as to whether or not the project will compete
with any similar enterprise. If so, give name and
address of owners or operators of the competing
enterprises.
(k) Statement as to status of drawings and specifications;
when construction can be commenced; and when project
will be completed.
(7) Statement of estimated average number of men to be
employed each month, directly on the project, giving
the number of months.
V. Revenue and Expenses
(a) If project is an extension of an existing system, give
statement with appropriate subdivisions showing for
each of the past 3 fiscal years:
(1) Operating and other income;
(2) Operating and other costs.
Statement should also show for each such year, the
extent of the business of the system, as indicated by
4
number of consumers or users, quantity of production
or sales or other similar data.
(b) Give estimate with supporting data of annual operat-
ing and other income and of operating and other costs
reasonably to be anticipated from the project if a new
system, or from the existing system as extended or im-
proved by the project, for the life of the loan. Give
estimate showing for each year the extent of the busi-
ness of the system as completed or as enlarged and ex-
tended, based upon the estimated number of consumers
or users, quantity of production or sale or other similar
data, appropriately classified.
(c) State application of estimated income and disposition
of surplus for each year during the life of the loan.
(d) Discuss any unusual conditions affecting present or es-
timated future operating and nonoperating income and
expenses.
(e) Give schedule of rates now in force and proposed rates
after completion of the project, stating whether such
rates are subject to approval by State, county, or muni-
cipal authority and, if so, status of such approval. If
approval has been obtained submit certified copy of
documents containing such approval.
VI. Financial Data
(a) Brief history of the applicant (including its predeces-
sors, if any) and business, including a review of past
operations and a statement of the general character
of business now transacted, with a detailed statement
of the manner of conducting the business.
(b) Capitalization, stating the essential details of each class
of stock, including:
(1) Designation;
(2) Par value;
(3) Number of shares authorized;
(4) Number of shares outstanding;
(5) Dates issued;
(6) Consideration received for outstanding shares
and, if other than cash, a specific description
thereof, together with a statement of the basis
of valuation and the present value thereof;
(7) Preferences as to dividends, liquidation, etc.;
(8) Voting rights.
(c) Funded indebtedness, with essential details of each issue
including:
5
(1) Class of indebtedness and designation;
(2) Authorized indebtedness;
(3) Date of issue;
(4) Maturity;
(5) Interest rate;
(6) Consideration received and, if other than cash,
specific description thereof, basis of valuation
and present value thereof;
(7) Security;
(8) Miscellaneous provisions (redemption, con-
version, etc.).
(d) Statements corresponding to those required under sec-
tions (b) and (c), as to any capital stock or funded
indebtedness (including the proposed loan) to be issued
in connection with the carrying out of the project.
(e) Financial statements:
(1) State the dates of the beginning and ending of
the fiscal year (present or proposed, as the case
may be);
(2) Balance sheets as of the latest available date
(in any event within 3 months) and as at the
end of each of the preceding 3 fiscal years;
(3) Profit and loss statements for each of the pre-
ceding 3 fiscal years;
(4) Analysis of surplus account for each of the
preceding 3 fiscal years;
(5) Pro forma balance sheet reflecting the pro-
posed loan and any other financing in connec-
tion with the project and showing the acquisi-
tion of any properties to be acquired in
connection therewith (and showing the basis
of valuation thereof).
These financial statements should be accompanied
by sufficient explanatory data to show clearly the pres-
ent financial condition of the applicant and its financial
condition after the carrying out of the project, and to
justify the book value of assets as shown on any said
balance sheets.
(ƒ) A statement showing application of estimated income
and disposition of surplus for each year during the life
of the loan, including:
(1) Estimated operating expenses;
(2) Interest on proposed loan;
(3) Principal payments on proposed loan;
(4) Sinking fund on proposed loan;
6
(5) Interest, principal, and sinking-fund payments
on any other indebtedness;
(6) Other nonoperating expenses;
(7) Preferred stock dividends;
(8) Balance available for other corporate purposes.
(g) Officers and directors:
(1) Name and address of each director;
(2) Name and address of each officer;
VII. Legal Data
(3) Statement of the amount of stock and/or
bonds, notes, or other obligations of the appli-
cant owned by each officer and director, and of
any indebtedness of any such officer or director
to the corporation;
(4) Compensation, including salary, bonus, fees,
and any other emoluments received from the
applicant by each officer and director.
(h) If 30 percent or more of the common stock of the appli
cant is owned or controlled by another corporation or
affiliated corporations, data in respect of such control-
ling corporation or affiliated corporations corresponding
to the information set forth in sections (b) to (e) in-
clusive, and in section (g).
(a) The following documents should be included in the
application:
(1) Certificate of incorporation, with all amend-
ments, certified by the Secretary of State (or
other appropriate officer) of the State of in-
corporation. This should include (where re-
quired) articles of association or agreement,
certificate and all pertinent documents, any
agreements of merger or consolidation, etc.,
necessary to show clearly the complete organi-
zation of the applicant;
(2) In case the applicant was organized by special
statute, a duly certified copy of the statute and
all amendments thereto and of any applicable
provisions of general statutes, and any amend-
ments adopted pursuant to general statute;
(3) Copy of the by-laws of the applicant, with all
amendments to date, certified by the secretary
or assistant secretary of the applicant under
its corporate seal;
7
(4) Copy of resolutions of the board of directors
and stockholders (if necessary) authorizing
the making of the loan application.
(b) A legal memorandum covering fully the following
matters:
(1) Formalities in connection with the organiza-
tion or standing of the applicant, includ-
ing particularly any necessary consents of
public service commissions or other State, mu-
nicipal, or other public bodies and a short state-
ment of annual or franchise tax reports to be
filed by it;
(2) The corporate power of the applicant to enter
into and construct the project and to incur and
secure the proposed indebtedness. The mem-
orandum should include appropriate citations
from the articles of incorporation and any
applicable statutes;
·
(3) The legal proceedings, formalities, and cor-
porate action required in connection with the
construction or operation of the project,
**
including:
(i) Permits or franchises from Federal,
State, or local public bodies, for such con-
struction or operation, with appropriate
citations of statutory provisions concern-
ing the granting of such franchises or ap-
provals. There should be included a state-
ment of any legislative authority necessary.
in connection with such construction or
operation;
(ii) Approval by State board of health of
the plans and specifications for water sys-
tem, etc.;
(iii) Approval of rates by public service
commission or other appropriate body;
(iv) Grants of lands or of easements or
other rights in lands by public bodies, cit-
ing statutory provisions and judicial de-
cisions concerning the authority of such
bodies to make such grants;
(v) Present status of such authorizations,
approvals, grants, etc., and a full statement
of the proceedings necessary to secure the
8
same, estimating the time necessary for
completing such proceedings.
(4) Legal proceedings, formalities and corporate
action taken and to be taken by the applicant
in connection with the proposed loan, includ-
ing the following:
(i) Action by board of directors;
(ii) Necessity of stockholders' consent and
how such consent may be given;
(iii) Necessity of consent of public service
commission or other public body, and pro-
ceedings necessary for securing such consent;
(iv) Legal limitations as to amount of in-
debtedness, interest rate, and sales price of
securities;
J
(v) Power of applicant to mortgage the
property to be covered by the lien securing
the loan. Particular attention should be
paid to mortgaging franchises, property
granted by public bodies, and other rights
in which the public might have an interest.
(5) Acquisition of property by the applicant, in-
cluding:
(2) Right of eminent domain or condemna-
tion and proceedings for exercise of the
same;
(i) Acquisition of land or rights therein
from private persons, including statement as
to any disability of such grantors or other
complication in connection with the transfer;
(iii) Acquisition of property from public
authorities and power of such authorities to
transfer the same. Discuss fully questions
arising in connection with property (such as
land under water) held "in trust for the
public ", etc.;
(iv) Statement of what property has been
acquired and what property is to be
acquired.
(6) Statutory or other provisions for the recapture
or other acquisition of the project or any part
thereof, by Federal, State, municipal or other
public authority.
9
(7) A full statement as to any litigation in process,
pending or threatened, which might in any
way affect the project, the proposed loan, the
security therefor, or the financial condition of
the applicant; if there is no such litigation, so
state.
(8) A brief description of the terms of all exist-
ing and proposed contracts, leases, and other
agreements with respect to the project or the
financing, construction, operation, mainte-
nance, or use thereof. Certified copies of all
such agreements should be attached to the loan
application as exhibits.
(9) If the applicant is a parent or subsidiary cor-
poration or is affiliated with any others, a full
statement of any special circumstances arising
out of such relation which might affect the
proposed project, the proposed loan, the secu-
rity therefor, or the financial condition of the
applicant, together with all other relevant in-
formation with respect to the intercorporate
relations.
(10) The eligibility of the applicant and the project
for a loan under the National Industrial Re-
covery Act, showing under what specific sec-
tion the loan is sought, what specific type of
eligible project is proposed and showing clearly
that the project comes under one of the author-
ized classes specified in said act, or the Emer-
gency Relief and Construction Act of 1932.
The memorandum should discuss the actual
application of the proceeds of the loan, show-
ing that such proceeds are to be expended for
eligible purposes and whether any portions of
the project or of any related plan or program
are without the scope of the Act, or are con-
sidered eligible as being incidental to an eli-
gible project.
M
(NOTE.-The memorandum should cite all constitutional provisions, statutes,
ordinances, regulations, charter or by-law provisions, etc., applicable to the
project, or the financing, construction, or operation thereof, or the revenues to
be derived therefrom, or the proposed loan or the security therefor, and any
franchises, approvals, permits, licenses, etc., obtained from Federal, State,
municipal, or other public authorities, and any proceedings taken by the appli-
10
cant with respect to the project or its financing. Copies of all such constitu-
tional or statutory provisions and other documents, or applicable portions
thereof, should be attached to the memorandum.)
(c) An opinion of counsel for the applicant to the
effect that:
(1) The applicant is a corporation duly organized
and existing and in good standing under the
laws of the state of incorporation (specifying
the same) with an authorized capital stock as
stated in such opinion.
(2) The outstanding stock (stating the number of
shares, par value, and classes so outstanding)
of the applicant has been duly and validly
issued and is validly outstanding (stating
whether the same is full paid and nonas-
sessable).
(3) The applicant has full corporate power and
authority to construct and operate the project.
(4) There are no legal obstacles which would pre-
vent or unreasonably delay the carrying out
of the project, the creating of the indebtedness,
the issuing of evidences thereof or the giving
of security therefor.
(5) The loan application has been duly executed
on behalf of the applicant by its duly author-
ized officer or officers.
(6) The proposed evidences of indebtedness will,
upon issuance, be valid and binding obligations
of the applicant in accordance with their
terms, secured as set forth in the application.
(7) The proposed obligations are (or are not)
legal investments for administrators, trustees,
and other fiduciaries, and for savings banks
and insurance companies organized under the
laws of the State or States in which the project
is situated.
୦
C**
3
4
FEDERAL EMERGENCY ADMINISTRATION
OF PUBLIC WORKS
WASHINGTON
CIRCULAR No. 4
INFORMATION REQUIRED WITH
PRELIMINARY APPLICATIONS FOR
LOANS FOR LOW-COST HOUSING OR
SLUM CLEARANCE PROJECTS
AUGUST 11, 1933
THERE IS NO FEE FOR FILING AN
APPLICATION
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON: 1933
DEPOSITE
UNITED STAT:
AUG 20 '33
Circular No. 4
Information required with preliminary applications for loans for
LOW-COST HOUSING OR SLUM CLEARANCE PROJECTS
General Instructions
(See Circular No. 1, Part III, for information as to general policies
relating to loans for housing projects)
In order to save applicants unnecessary expense in preparing de-
tailed plans, specifications, and financial statements, only the infor-
mation outlined below will be required for a preliminary application
for a loan. If the examination of such a preliminary application
indicates that the project is of a satisfactory character, the applicant
will be encouraged to prepare the additional plans and data required
for a final application.
This form of application is designed for private limited dividend
corporations formed to undertake the particular housing project.
Other applicants may be required to furnish some additional
information.
Applications, together with supporting data, should be submitted
in duplicate direct to the Administrator of Public Works, Division
of Housing, Washington, D.C. Preliminary applications for loans
for low-cost housing or slum clearance projects should not be sub-
mitted to State advisory boards.
The estimated costs required to be given should be based on the
labor requirements and other special conditions set forth in the
National Industrial Recovery Act, particularly section 206.
Information Required
I. The Applicant
(a) Name and address.
(b) Name, title, and address of official representative or
representatives with whom correspondence should be
conducted.
(c) Name and address of applicant's attorney.
(d) Name and address of applicant's architect and con-
sulting engineer.
(e) Name and address of each officer and director of the
corporation.
5360°-33
{
2
II. Construction Period
(a) Estimated time that will elapse after funds are allo-
cated before-
(1) Work can be commenced.
(2) Project will be completed.
(b) Estimate of average number of men to be employed 30
hours per week directly on the project.
III. Character of Project
(a) Site:
(1) A map, showing the location and area:
NOTE.-Physical features should be shown by two
maps:
(I) Key map of city showing these facilities and
proposed site.
(II) Sectional map showing these facilities in
greater detail.
(2) A statement of the assessed valuation of the
land necessary for the project and the estab-
lished ratio between assessed value and fair
cash value.
(3) Tax rate.
(4) Any unusual conditions adversely affecting the
cost of the project.
(5) Description of present improvements, existing
utilities, etc.
(6) Approximate number of present owners and
proposed method of acquisition of site.
(7) Brief statement of advantages and disadvan-
tages of the site for this particular project.
(8) Relation to planned growth of the city, em-
ployment and shopping centers, transporta-
tion facilities, schools, recreational facilities,
etc.
(b) Proposed improvements:
(1) Character and type of building (fireproof, fire-
resisting, ordinary construction, number of
stories).
(2) Number of apartments or houses.
(3) Estimated number of persons to be housed.
(4) Ground coverage.
(5) Number and size of stores (if any).
(6) A sketch of the site layout and sufficient specifi-
cations and architectural drawings of a typi-
cal unit in sketch form to illustrate the type
and character of the buildings contemplated.
3
IV. Management
A description of the proposed permanent operating and manage.
ment organization.
V. Summarized Cost and Income Statement
(a) Cost.-An estimate of the cost of the project summar-
ized under the following items:
(1) Land (cost per square foot and total).
(2) Utilities, landscaping, streets, and other im-
provements.
(3) Buildings (cost per cubic foot and total).
(4) Architects' and engineers' fees.
(5) Preliminary and organization expense.
(6) Carrying charges during construction.
(7) Other costs.
(8) Total.
(9) Condensed estimates of the cost of labor and
materials, stated separately.
(b) Financing:
(1) Amount of mortgage loan.
(2) Equity interest.
(3) Total.
(c) Annual income:
(1) Number of rooms and rental rate per room per
month.
(2) Total annual rental.
(3) Linear feet of stores, rental rate, and total
annual rental.
(4) All other annual income.
(5) Total gross income.
(6) Deduction of allowance for vacancies.
(d) Annual expense:
(1) Operating expense, number of rooms, and rate
per room per annum.
(2) Taxes.
(3) Insurance.
(4) Total cost of operation.
(5) Balance available for interest and amortiza-
tion.
(6) Interest on mortgage loan (assume 4 percent).
(7) Amortization (assume a constant rate of 1.35
percent on fireproof construction and of 2.4
percent on ordinary construction).
(8) Total interest and amortization.
(9) Balance available for dividends and reserves.
4
VI. Planning and Related Data
(a) Statement as to whether or not project is part of a
larger plan or long-range program of development
and, if so, give brief description of other parts of plan
or program.
(b) Statement as to whether or not there is a city or re-
gional planning board and/or housing board, whether
this project has been submitted to such board, and the
views of such board, if any, in regard to it.
(c) Statement as to whether the community is part of a
metropolitan district and, if so, whether the project
is coordinated with the plans for metropolitan
development.
(d) State whether the project has been approved by gov-
ernmental or civic bodies and, if so, by whom. Give
any other evidence of local sentiment favoring the
project.
O.
}