PARKWAYS

The bill as passed by the House recommends an annual authorization for parkway construction in the amount of $7,500,000, and your committee recommend that no change be made in this amount for either of the 2 fiscal years. However, it is recommended that a proviso be inserted in connection with the authorization for parkways similar to that added to the authorization for park and monument roads, so that such parkways will be constructed in conformity with regulations jointly approved by the Secretary of the Interior and the Federal Works Administrator.

LANDS ADJACENT TO HIGHWAYS

The House bill contains language which would authorize the States to use Federal funds for the purchase of adjacent strips of land of limited width and primary importance for the preservation of natural beauty through which highways are constructed, and authorizes States desiring to purchase such adjacent lands to use not to exceed 5 percent of the Federal aid funds apportioned to such State for such purpose without requiring that such funds be matched by the States. Your committee recommend that such funds, when used for the purchase of adjacent land, be matched by the States, and suggest that not to exceed 3 percent of the apportioned Federal funds be utilized by any State for such purposes. Your committee are of the opinion that while a program of this nature is desirable, it should not be begun on as large a scale as would be possible under the House language.

LOANS FOR RIGHTS-OF-WAY

The committee recommend that section 12 of the bill as passed by the House of Representatives granting authority to the Reconstruction Finance Corporation for making loans to States and municipalities for the purchase of highway rights-of-way and providing that such loan loans shall be secured in part by a pledge of the Federal-aid highway apportionments be stricken from the bill. Testimony before the Senate Committee on Post Offices and Post Roads revealed that the Reconstruction Finance Corporation now has authority to make loans of this type, and the officials of the Corporation seem perfectly willing to proceed with such loans where they are predicated on a sound financial basis. Such being the case, the committee felt that there was no necessity of inserting in the bill additional legislative authority for the Corporation.

FLIGHT STRIPS

Contained in the measure as passed by the House is language authorizing the Commissioner of Public Roads at the request of any State to perform engineering services and to furnish technical aid and advice in connection with the location and development of flight strips adjacent to public highways or adjacent to roadside development areas for the landing and take off of aircraft, when the construction of such flight strips is not in conflict with the Civil Aeronautics Act of 1938. Your committee recommend that the authorization thus contained in the House bill be eliminated since it is understood

that the Commissioner of Public Roads now has ample authority to furnish engineering advice to State highway departments for any purpose, and your committee are of the opinion that the relation between the construction of highways and a provision for emergency landing fields or flight strips adjacent to such highways is somewhat questionable.

TRAFFIC SURVEYS

Your committee recommend that authority be included in the bill for the Commissioner of Public Roads in cooperation with the State highway departments to continue to make the traffic surveys and State-wide highway planning surveys which have been carried on for the past several years and which have contributed so much to intelligent road planning throughout the United States. Previous legislation limits the Federal contribution to such surveys to 11⁄2 percent of the Federal-aid funds appropriated to any State.

DUTY OUTSIDE THE UNITED STATES

Your committee recommend that an amendment be added to the bill to authorize an increase of not to exceed 25 percent of the compensation of Public Roads Administration employees assigned to perform engineering services outside of the continental United States at the request of any agency or governmental corporation of the United States. Similar provisions are contained in other statutes authorizing Federal employees to perform technical services outside of the boundaries of this country, and justice would seem to require that the Public Roads Administration engineers be treated in the same

manner.

REAPPORTIONMENT OF FUNDS

Your committee recommend that there be added to the bill an amendment authorizing the reapportionment to all of the States of any funds withheld by the Public Roads Administration from any State because of violation by such State of provisions of section 12 of the 1934 Highway Act, which, as will be recalled, set up penalties for the diversion from highway purposes of the proceeds of special taxes upon highway users. Unless such a provision is placed in the bill, any apportionments withheld because of diversion will revert to the Federal Treasury rather than being expended for highway pur

poses.

AVAILABILITY OF SECONDARY FUNDS

Your committee recommend that a new section 15 be added to the bill to continue the availability of secondary- or feeder-road funds until June 30, 1941, in any case where the apportionment of such funds to any State would expire on June 30, 1940. The amendment is temporary in its character and is limited to expire in 1 year. It is felt by the committee that its insertion in the measure would prevent any inequitable situation arising in any State because of the necessity of readjusting State laws to conform with the secondary-road program.

ENGINEERING ON MILITARY ROADS

A new section 16 has been added by the committee to allow Federal funds to be available for paying the engineering cost incurred by State highway departments in the surveys and preparation of plans for roads of strategic importance when the construction of such highways is ordered by the Federal Works Administrator upon the request of the Secretary of War, the Secretary of the Navy, or other authorized national-defense agency. The committee felt that the Federal Government was justified in paying the cost of such engineering work rather than imposing the burden upon the States since such roads would be for national military use and would be in no sense local roads.

O

June 20, 1940 (legislative day, May 28). 1940.-Ordered to be printed

Mr. WALSH, from the Committee on Naval Affairs, submitted the

following

REPORT

[To accompany H. R. 9822]

The Committee on Naval Affairs of the Senate, to whom was referred the bill (H. R. 9822) to expedite naval shipbuilding, and for other purposes, having considered the same, report favorably thereon with amendments and, as amended, recommend that the bill do pass. Amend the bill as follows:

Page 1, line 5, delete the word "any" and insert in lieu thereof the word "the".

Page 1, line 6, insert after the word "President" the words "on September 8, 1939", and after the word "Navy" insert the words. ", or the Secretary of the Treasury in the case of Coast Guard contracts,".

66

Page 1, line 9, delete the word "he" and insert in lieu thereof the words "such Secretary".

Page 1, line 10, strike out the words "he shall require".

Page 1, line 11, strike out the period and insert the following words "shall be required."

Page 1, line 11, delete the word "He" and insert in lieu thereof the following words "The Secretary concerned".

Page 2, line 9, delete the words "of the Navy" and insert in lieu thereof the word "concerned", and after the word "report" insert the words "every three months".

Page 2, line 10, delete the words "at the beginning of each regular session".

Page 2, line 12, strike out "Sec. 2." and insert in lieu thereof "Sec. 2. (a)".

Page 2, line 14, delete the word "any" and insert in lieu thereof the word "the".

Page 2, line 15, after the word "President" insert the words "on September 8, 1939".

Page 2, line 20, delete the words "equipment, with-", and delete all of lines 21, 22, 23, 24, and 25, and on page 3, delete all of lines 1 and 2, and insert in lieu thereof the following:

similar equipment, with or without advertising or competitive bidding upon determination that the price is fair and reasonable, and deliveries of material under all orders placed pursuant to the authority of this section and all other naval contracts or orders shall, in the discretion of the President, take priority over all deliveries for private account or for export: Provided, That the Secretary of the Navy shall report every three months to the Congress the contracts entered into under the authority of this section: Provided further, That contracts negotiated pursuant to the provisions of this section shall not be deemed to be contracts for the purchase of such materials, supplies, articles, or equipment as may usually be bought in the open market within the meaning of section 9 of the Act entitled "An Act to provide conditions for the purchase of supplies and the making of contracts by the United States, and for other purposes", approved June 30, 1936 (49 Stat. 2036; U. S. C., Supp. V, title 41, secs. 35-45).

(b) After the date of approval of this Act no contract shall be made for the construction or manufacture of any complete naval vessel or any Army or Navy aircraft, or any portion thereof, under the provisions of this section or otherwise, unless the contractor agrees, for the purposes of section 3 of the Act of March 27, 1934 (48 Stat. 505; 34 U. S. C. 496), as amended

(1) to pay into the Treasury profit in excess of 7 per centum (in lieu of the 10 per centum and 12 per centum specified in such section 3) of the total contract prices of such contracts within the scope of this subsection as are completed by the particular contracting party within the income taxable year; (2) that any profit in excess of 7.53 per centum of the cost of performing such contracts as are completed by the contracting party within the income taxable year shall be considered to be profit in excess of 7 per centum of the total contract prices of such contracts, and

(3) that he will make no subcontract which is within the scope of such section 3, unless the subcontractor agrees to the foregoing conditions.

Page 3, line 6, delete the word "shall," and insert in lieu thereof the following:

and as made applicable to contracts for aircraft or any portion thereof for the Army by such Act of April 3, 1939, shall, in the case of contracts or subcontracts entered into after the date of approval of this Act and.

Page 3, line 7, delete the word "any" and insert in lieu thereof the word "the".

Page 3, line 8, insert after the word "dent" the following words: “on September 8, 1939".

Page 3, lines 10 to 24 inclusive strike out all of section 4 and insert in lieu thereof the following:

SEC. 4. In the case of every contract or subcontract for the construction or manufacture of any complete naval vessel or Army or Navy aircraft or any portion thereof which is entered into (whether before or after the date of approval of this Act), the Secretary of War or the Secretary of the Navy, as the case may be, after agreement with the contractor or subcontractor, shall certify to the Commissioner of Internal Revenue as to (a) the necessity and cost of special additional equipment and facilities acquired to facilitate, during the national emergency declared by the President on September 8, 1939, to exist, the completion of such naval vessel or Army or Navy aircraft or portion thereof in private plants and (b) the percentage of cost of such special additional equipment and facilities to be charged against such contract or subcontract. For all purposes of section 3 of the Act of March 27, 1934 (48 Stat. 505; 34 U. S. C. 496), as amended, such certification shall, subject to such regulations as the President may prescribe, be binding upon the Commissioner of Internal Revenue. The part of such cost chargeable against the contract or subcontract in pursuance of such certification, shall, for the purposes of such section 3, be considered to be a reduction of the contract price of