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No. 78 "Work Relief: A Record of the Tragic Failure of the Most Costly Governmental Experiment in All World History," November 25, 1935. American Liberty League. 400dpi TIFF G4 page images Digital Library Services, University of Kentucky Libraries Lexington, Kentucky Am_Lib_Leag_78 These pages may freely searched and displayed. Permission must be received for subsequent distribution in print or electronically. No. 78 "Work Relief: A Record of the Tragic Failure of the Most Costly Governmental Experiment in All World History," November 25, 1935. American Liberty League. American Liberty League. Washington, D.C. 1935. This electronic text file was created by Optical Character Recognition (OCR). No corrections have been made to the OCR-ed text and no editing has been done to the content of the original document. Encoding has been done through an automated process using the recommendations for Level 1 of the TEI in Libraries Guidelines. Digital page images are linked to the text file. Pamphlets Available â˜… Copies of the following pamphlets and other League literature may be obtained upon application to the League's national headquarters: Statement of Principles and Purposes American Liberty League Its Platform An Analysis of the President's Budget Message Economic Security Inflation The Thirty Hour Week The Holding Company Bill Price Control The Labor Relations Bill The Fanners' Home Bill The TV A Amendments The Revised AAA Amendments The President's Tax Program Expanding Bureaucracy Lawmaking by Executive Order New Deal Laws in Federal Courts Potato Control Consumers and the AAA Budget Prospects Dangerous Experimentation Economic Planning Mistaken But Not New The National Labor Relations Act Summary of Conclusions from report of the National Lawyers Committee Straws Which Tell How to Meet the Issue Speech by W. E. Borah The American Bar The Trustee of American Institutions Speech by Albert C. Ritchie Fabian Socialism in the New Deal Speech by Demarest Lloyd The People's Money Speech by Dr. W. E. Spahr Legislation By Coercion or Constitution Speech by Jouett Shouse Recovery by Statute Speech by Dr. Neil Carothers The Impediment of Democracy Speech by Fitzgerald Hall The Test of Citizenship Speech by Dean Carl W. Ackerman Today's Lessons for Tomorrow Speech by Captain William H. Stayton "Breathing Spells" Speech by Jouett Shouse The Duty of the Lawyer in the Present Crisis Speech by James M. Beck The Constitution and the Supreme Court Speech by Borden Burr The Economic Necessity in the Southern States for a Return to the Constitution Speech by Forney Johnston Our Growing National Debt and Inflation Speech by Dr. E. W. Kemmercr Inflation Is Bad Business Speech by Dr. Neil Carothers â˜… AMERICAN LIBERTY LEAGUE NATIONAL PRESS BUILDING WASHINGTON, D. C. â˜… â˜… WORK RELIEF â˜… â˜… â˜… A Record of the Tragic Failure of the Most Costly Govern' mental Experiment in All World History AMERICAN LIBERTY LEAGUE ?*[aticmal Headquarters NATIONAL PRESS BUILDING WASHINGTON, D. C. â˜… â˜… Document No. 78 November, 1935 Work Relief When you have finished with this pamphlet please pass it on to some friend or acquaintance who might be interested, calling his attention to the membership blank on page SI. â˜… The most costly governmental experiment in all history is the Roosevelt administration's work-relief program. Its present status offers indisputable evidence of the need of adherence to constitutional procedure in the expenditure of public money. Early in January of the present year 1935 the American Liberty League sounded warnings against the administration's demands as "an abdication by the Congress of its proper responsibilities in an almost limitless field of legislation," "complete control by the President of the expenditure of an amount of money greater than total annual costs of the Government in the period just prior to the depression," "no legislative guidance whatever in the determination of policies which ordinarily engage the close attention of a half dozen or more standing committees in each branch of the Congress," "a step toward the European type of dictatorship in which the parliamentary body becomes a nonentity," "authority to the Executive to make rules and regulations for violation of which fines may be imposed," and "the creation of a vast new bureaucracy free from Civil Service laws and not answerable to the Congress." The fears at that time set forth have been more than justified by the record of tragic failure. At this writing the middle of November in 1935 seven months have elapsed since the enactment of the Emergency Relief Act of 1935 appropriating $4,880,000,000 for work relief and direct relief. The record as unfolded up to date is as follows;. 1. The administration, despite the billions at its command, has not even scratched the surface of the basic unemployment problem. 2. When present funds are exhausted, in the not far distant future, the problem again will arise of caring for the millions of unemployed. 3. Although business has been on the upgrade, commencing with the Supreme Court decision which threw off the hampering restrictions of the unconstitutional NRA, the work-relief and public works funds have not been a material factor in priming the industrial pump. 4. The work-relief program is proving an appallingly extravagant method of providing relief. 3 5. Early pretensions with respect to the worthwhile character of work-relief projects have been thrown to the winds in the scramble to create jobs. 6. Much of the made work has been of such a flimsy character as to offer no stimulus to the morale of relief recipients. 7. Large amounts of easy money have been diverted to projects promoted by crack-brained theorists and lacking specific approval by the Congress. 8. Availability of Federal funds for local projects has tended to encourage a shirking of proper responsibility of states, counties and municipalities. 9. Under the broad powers granted in the Work-Relief Act the President has exercised legislative authority in executive orders covering a wide range of activities ordinarily dealt with by the Congress. 10. Future generations must bear a heavy burden of debt due to expenditures lacking economic justification. History of Legislation The story of the enactment of the Work-Relief Act is that of an unprecedented attempt by the Executive branch of the Government to usurp legislative prerogatives. The joint resolution as introduced in the House of Representatives on January 21, 1935, to carry out recommendations by the President in his annual message, contained only the vaguest limitations upon the Executive's authority. The President was empowered to do virtually anything he pleased with $4,880,000,000 if it.would promote the general welfare by "providing relief from the hardships attributable to widespread unemployment and conditions resulting therefrom, relieving economic maladjustments, alleviating distress, and/or improving living and working conditions." Besides authority to spend the money for almost anything under the sun he was given various other powers, including the right to reorganize the entire governmental machinery. A subcommittee of the House Committee on Appropriations held a single hearing of less than one day behind closed doors during which it was made evident that the administration did not have anything like a detailed program for the expenditure of the work-relief fund. Despite a lack of adequate information the committee reported the resolution with but slight changes and the House under pressure from the administration passed it on January 24 by a vote of 329 to 78. The Senate Appropriations Committee refused to be stampeded into immediate action and insisted upon more extended hearings. This committee sought to obtain information from the administration as to its plans but failed to get anything save generalities. On the basis of such information as was available the committee incorporated a few restrictions on the President's authority, including an allocation of the $4,000,-000,000 intended for work relief among classes of projects. The resolution was approved by the Senate on March 23 by a vote of 68 to 16 after the administration had successfully resisted amendments further circumscribing the President's authority. The final legislation, after differences between the House and Senate had been adjusted, was approved by the President on April 8. Administrative machinery was set up by Executive order during the month of April. Seven Principles In his budget message the President recommended that $4,000,000,000 be appropriated by the Congress "in one sum, subject to allocation by the Executive, principally for giving work to those unemployed on the relief rolls." The additional $880,000,000 authorized in the bill as introduced was intended for direct relief and for the Civilian Conservation Corps. The President's annual message, submitted also during the first week of January, contained seven "practical principles" which the President said should govern the program. The seven principles, however, were not written into the legislation. Efforts to obtain their incorporation on the floor of the Senate were defeated at the instance of the administration. If these principles had been followed, the taxpayers would have had a better chance of not having their money wasted. First of the seven principles was that "all work undertaken should be useful not just for a day, or a year, but useful in the sense that it affords permanent improvement in living conditions or that it creates future wealth for the nation." The two chief administrators of the program have quarreled publicly over the desirability of insistence upon this principle. One wanted allocations only for useful projects. The other wished to use the money in such a way as to create the largest number of immediate jobs. The President sided with the latter, thereby scrapping Principle No. 1. The second of the seven principles was that "compensation on emergency public projects should be in the form of security payments, which should be larger than the amount now received as a relief dole but at the same time not so large as to encourage the rejection of opportunities for private employment or the leaving of private employment to engage in Government work." To this principle organized labor raised powerful objection. At its instance an amendment known as the McCarran Amendment was introduced in the Senate which would have compelled the payment of union hourly wages prevailing in the section where work was undertaken. The administration resisted this amendment and finally secured its defeat after weeks of effort. Now, however, we have seen this same administration yield to the pressure of organized labor and put into effect administratively exactly what it induced the Congress to prevent legislatively. In New York City and elsewhere union hourly wages for skilled labor have been allowed to prevail, the effect being to reduce the hours of employment to keep the total compensation within a prescribed monthly maximum. The taxpayers thus are getting less for their money than they would have otherwise. The workers have less incentive to find themselves jobs in private industry. The difficulties experienced by private employers in adjusting wage scales to prevailing conditions are increased. The third principle was that "projects should be undertaken on which a large percentage of direct labor can be used." This principle has been carried out at the expense of the promise of useful projects. The fourth principle was that "preference should be given to those projects which will be self-liquidating in the sense that there is a reasonable expectation that the Government will get its money back at some future time." This principle was sacrificed for the same reason as the first in the list. With respect to the bulk of the expenditure the Government will have nothing to show for it but a debt. The fifth principle was that "the projects undertaken should be selected and planned so as to compete as little as possible with private enterprises." Many of the work-relief activities are of such a character as to be highly disturbing to private industry. The sixth principle was that "the planning of projects would seek to assure work during the coming fiscal year to the individuals now on relief, or until such time as private employment is available." The whole work-relief program and other policies of the administration bearing on business are of such a character as to retard the absorption of the unemployed by private industry. The seventh principle was that "effort should be made to locate projects where they will serve the greatest unemployment needs as shown by present relief rolls, and the broad program of the National Resources Board should be freely used for guidance in selection." Little attention has been paid to the program of the National Resources Board which proposed projects it believed to be of a useful character. Political influence has been an important factor in the allotment of funds to localities. A Campaign Fund? Despite assurances that politics would not figure in the expenditure of the work-relief fund there are increasing evidences of lapses from such a policy. The potentialities along this line are such as to give reason for very grave concern. The separation of the machinery of government into three coordinate branches was a definite check upon the power which the Executive branch might use for political purposes. It was intended that the Executive should administer laws enacted by the Legislative branch. But in the Work-Relief Act the President was given the widest legislative authority. This delegation of power has been held by many authorities to be clearly in violation of the Constitution, but limitations upon the right of taxpayers to sue the Government are such as to have made it impossible to test the issue in the courts. No administration has ever had such a huge fund for allotment at its discretion. If political considerations are allowed to enter into the distribution of the fund, the situation will be no different than prevails in autocracies where a dictator uses all the powers at his command to perpetuate himself in office. In a radio address outlining his program on April 28, 1935, the President said that "no sectional, no political distinctions can be permitted." Nevertheless, the allotment to Kentucky of more than $42,000,000 of WPA and PWA funds during the ten days before the election of November 5 figured conspicuously in the campaign in that state. The Federal administration actively supported the successful state ticket. During the campaign Kentucky relief recipients received an unsigned letter mailed from Washington in which support for the Democratic ticket was asked on the ground that "President Roosevelt, a friend of the poor, provided relief so that those in need would not suffer." In defense of the administration it has been pointed out that Kentucky received no more money proportionately in the pre-election period than other states where there were no elections and that actual releases of large funds at that time were made by reason of the approval of Comptroller General McCarl rather than of the President who had acted weeks previously. Granting the truth of these assertions, it cannot be denied that the Democrats in Kentucky used the Federal grants as political ammunition to the fullest extent possible. The tendency to do so would be irresistible under prevalent campaign methods. The offering of a temptation of this character forms one of the evils of a system of executive allotments to the states. As to the part played by the Comptroller General, his function merely is to certify that allotments are in conformity with the law. He could not go back of the action of the Congress in granting broad power to the President nor could he exercise his judgment as to the value of the work-relief program from an economic standpoint. In Erie, Pennsylvania, persons employed on work-relief projects were circularized by a Democratic finance committee. The letter asserted that their employment "was only made possible through the Democratic Party." A ' financial contribution was requested. In Pittsburgh, 1,300 colored voters were reported to have been put on the payroll of work-relief projects the day before the election, although neither on that day nor on the following day, a legal holiday, did they engage in any activity except to vote. Regardless of the promise of freedom from politics, partisan loyalty has remained an essential in obtaining employment in governmental emergency agencies. Those who have secured positions in the Works Progress Administration, the Resettlement Administration and other agencies set up to administer the work-relief pro- gram have found it necessary to obtain endorsement from Democratic Committeemen in their home precincts or counties. This has been the rule throughout the alphabetical agencies whose payrolls are met by allotment of funds at the disposal of the President. Political factors have been apparent in conflicts between Federal officials and a number of states in connection with the work-relief program. Allocations from Fund Comparison of the actual allotment of work-relief funds with the totals for different classes of projects as listed in the law furnishes proof of the lack of an adequate plan at the time the legislation was under consideration. The earmarking of funds in the law was based on such information as was available to the Senate Committee on Appropriations. A clause in the law gave authority to the President to shift up to 20 per cent of the entire appropriation from one allocation to another. Under this authority the President by Executive order increased by $800,-000,000 the limitation of $900,000,000 for loans and grants to the states and municipalities. The allocations of the $4,000,000,000 in the law were as follows: 1. Highways, roads, streets, and grade-crossing eliminations, $800,000,000. 2. Rural rehabilitation and relief in stricken agricultural areas, and water conservation, trans-moun-tain water diversion and irrigation and reclamation, $500,000,000. 3. Rural electrification, $100,000,000. 4. Housing, $450,000,000. 5. Assistance for educational, professional and clerical persons, $300,000,000. 6. Civilian Conservation Corps, $600,000,000. 7. Loans or grants, or both, for projects of states, territories, possessions, including subdivisions and agencies thereof, municipalities, and the District of Columbia, and self-liquidating projects of public bodies thereof, where, in the determination of the President, not less than 25 per cent of the loan or the grant, or the aggregate thereof, is to be expended for work under each particular project, $900,000,000. 8. Sanitation, prevention of soil erosion, prevention of stream pollution, seacoast erosion, reforestation, forestation, flood control, rivers and harbors and miscellaneous projects, $350,000,000. Except for the amount for the Civilian Conservation Corps, the actual allocations show little relation to the totals in the law. At a recent date they were as follows: 1. Works Progress Administration........ $1,150,000,000 2. Civilian Conservation Corps........... 600.000,000 3. Highways and grade-crossing elimination ................................. 500,000,000 4. Miscellaneous allotments, chiefly to Government departments ............. 440,500.000 5. Non-Federal PWA projects........... 330,000.000 6. Resettlement Administration ......... 241.000,000 7. Low-cost Housing projects............ 100,000,000 8. National Youth Administration....... 27,000,000 9. Rural Electrification Administration .. 10,000,000 At the time of the compilation of the above table there remained unobligated the sum of $266,500,000. From this must be taken administrative expenses. The original $4,880,000,000 was increased to $4,925,000,000 by a balance of $45,000,000 from earlier relief appropriations. By reason of the temporary shifting of other funds to carry on direct relief and the work of the Civilian Conservation Corps while the Work-Relief bill was pending in the Congress, it was necessary to take $360,000,000 for reimbursements. Deduction of this amount from the $4,925,000,000 left $4,565,000,000 actually available for the work-relief program and remaining direct relief needs. The amount set aside from this fund for direct relief is $900,000,000, which is in addition to the amount included in the $360,000,000. Considerably more than the amount originally intended for direct relief thus is being used for this purpose. Of the $880,000,-000 in excess of the $4,000,000,000 originally asked for work relief, $750,000,000 was for direct relief and $130,000,000 for the Civilian Conservation Corps. The amount actually available for work relief is $3,665,000,000. PWA The Public Works Administration, which has charge of projects of a more permanent character than those under the Works Progress Administration, has been relegated to a minor role in the work-relief program. Projects recommended by the PWA to the amount of about $1,000,000,000 were rejected in favor of others which promised a larger amount of immediate employment. The National Industrial Recovery Act of June 16, 1933, established a $3,300,000,000 public works fund. Under subsequent legislation an 10 additional $400,000,000 was made available. By the sale of securities received in connection with loans to local bodies the fund was further increased by $250,000,000. Virtually all of this $3,950,000,000 fund has been obligated. A considerable part of the total has been expended through agencies other than the Public Works Administration. Actual expenditures for public works in the fiscal years 1934 and 1935 amounted to less than $1,700,000,000. Direct Relief In his annual message asking authority for the work-relief program the President said that of approximately 5,000,000 persons then on the relief rolls about 3,500,000 would be given work-relief jobs, the remaining 1,500,000 being un-employables who would be shifted to the responsibility of the states. It was implied that the Federal Government would discontinue direct relief soon after the first of last July. The $880,000,000, in fact, represented the estimate of funds needed for direct relief and for the Civilian Conservation Corps until July 1, 1935. The administration has failed to come anywhere near fulfillment of its schedule. Between July 1, 1935, the beginning of the fiscal year, and the middle of November nearly $400,000,000 was expended for direct relief. In the fiscal years 1933, 1934 and 1935 the total was about $2,600,000,000, to which should be added about $816,000,000 representing the cost of the Civil Works Administration under which about 4,000,000 persons were employed during the winter of 1933-1934. Nearly $770,000,000 was expended for emergency conservation work in the fiscal years 1934 and 1935. The peak of the direct relief burden was in January, 1935, when 4,617,838 families and 850,-629 single persons were on the rolls, the total number of persons dependent upon relief being 20,669,647, or 17 per cent of the population. In July, 1935, there were still 3,677,337 families and 666,534 single persons, representing a total of 16,100,497 persons, dependent upon relief, or 13 per cent of the population. The obligations incurred for relief during July were about $30,000,000 in excess of the amount in July, 1934, although the number of persons on relief had decreased by about 1,100,000. In August, 1935, the number of families receiving relief was still above 3,500,000, besides 500,000 or more single persons. 11 As late as August the President asserted that 3,500,000 persons would be at work under the work-relief program by November 1. Official figures issued on November 15 showed only 2,009,339 persons at work as of November 9. About 560,000 of the total were in the Civilian Conservation Corps which had a large enrollment even before the present program was inaugurated. Responsibility of States Wasteful expenditure by the Federal Government in connection with relief has encouraged the states, counties, municipalities and private agencies to shirk their proper responsibilities. In the first six months of 1935 total obligations incurred for emergency relief included about 77 per cent of Federal funds, about 11 per cent of state funds and about 12 per cent of local funds. In the calendar year 1934 the averages were respectively 72, 13 and 15 per cent, and in 1933, 61, 14 and 25 per cent. The figures show a steadily increasing reliance upon the Federal Government. There is grave danger that out of the present situation will grow a permanent system of Federal doles to the unemployed. It would be most unfortunate if this should happen. Students of the British dole system are convinced that it has had the effect of perpetuating a larger volume of unemployment than would exist without it. With such a system the incentive for the development of new industries is weakened and encouragement is given to indolence among the working classes. If the Federal Government assumes permanently the responsibility for relief, it may well be that the number of unemployed in the United States always will run as high as 5,000,-000 or 6,000,000 instead of 2,500,000 or less prior to the depression. Such a total would be comparable to that in the United Kingdom, taking into account the difference in population and industrial conditions. The total unemployed in the United States in recent months has been about 9,500,000, according to the estimate of the National Industrial Conference Board. While the work-relief program ostensibly involves the abandonment of direct relief expenditures by the Federal Government, it by no means returns the responsibility to the states except as to unemployables. The relief problem again will confront the Federal Government when work-relief funds are exhausted. 12 There is no express authority in the Constitution for relief expenditures by the Federal Government. Participation by the Federal Government in relief activities is justified only in an acute emergency. President Grover Cleveland on February 16, 1887, vetoed a relief appropriation authorizing a special distribution of seeds in a drought-stricken area in Texas. President Cleveland said: "I can find no warrant for auch an appropriation in the Constitution; and I do not believe that the power and duty of the general Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit. A prevalent tendency to disregard the limited mission of this power and duty should, I think, be steadfastly resisted, to the end that the lesson should be constantly enforced that, though the people support the Government, the Government should not support the people. "The friendliness and charity of our countrymen can always be relied upon to relieve their fellow-citizens in misfortune. This has been repeatedly and quite lately demonstrated. Federal aid in such cases encourages the expectation of paternal care on the part of the Government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood." Cost of Work Relief There is no question but that work relief is a much more expensive method of providing for the unemployed than direct relief. According to estimates of the National Industrial Conference Board, 3,500,000 unemployed could be cared for under direct relief at a cost of $989,000,000 annually. This estimate was based on the average cost of direct relief per case of slightly more than $280 per year which prevailed during the latter part of 1934. On the basis of the type of work relief which was carried on under the Federal Emergency Relief Administration the Board estimated that continuous employment for 3,500,-000 persons could be provided for a year at a cost of $1,475,000,000. This was on a basis of an actual average cost of FERA work relief of $420 per year which prevailed in 1934. The Board also estimated that employment for 3,500,000 persons for a year in public works would cost $5,250,000,000 with wages averaging $50 per month and a thirty-hour week, or $8,-054,000,000 if prevailing wages were adopted. 13 In the case of estimates for public works, materials and overhead represented 60 per cent of the total cost. The average annual cost per relief case for public works would be $1,500 and $2,300 respectively under the two estimates, the totals including the cost of materials. Senator Harry F. Byrd of Virginia, in vainly seeking in the Senate a reduction of the amount proposed for work relief, asserted that for every $100 expended only $50 would go for labor and the other $50 for materials. The actual cost of the present work-relief program will range about midway between the above estimates for work relief and public works. Originally it was proposed to divide the $4,000,-000,000 fund in such a way as to provide work for 3,500,000 persons for a year at an average cost of about $1,140, including materials. Under a tentative program it was found that the average cost per person would run to about $1,800. After more than two thirds of the fund had been allotted, it was found necessary to select projects for the remainder involving an average cost of not more than $900 in order to provide work for the entire 3,500,000. Morale of Workers The chief argument for work relief as against direct relief is that the former enables the workers to retain their self-respect. Continuous dependence upon relief, the President asserted in his annual message, "induces a spiritual and moral disintegration fundamentally destructive to the national fibre." The President asserted that the Federal Government must quit the business of relief and that he was "not willing that the vitality of our people be further sapped by the giving of cash, of market baskets, of a few hours of weekly work cutting grass, raking leaves, or picking up papers in the public parks." While it was the President's avowed purpose that the work be of a permanently useful character, the program has turned out otherwise. Much of the work is such as to give no greater support to the morale of the workers than if they were receiving direct relief. Thus huge funds are being wasted as against the much cheaper direct relief system. Inefficient Management Bungling and inefficiency have been characteristic of the administration of the work-relief program. The elaborate machinery which was 14 set up at the beginning involved so much red tape as to be unworkable. Many delays occurred on this account and it was necessary to change the procedure in important respects. The controversy between Mr. Ickes, Public Works Administrator, and Mr. Hopkins, Works Progress Administrator, exposed the lack of adequate planning. The shifting of relief recipients to work-relief jobs was marked by such incidents as that in New York City where Park Commissioner Robert Moses protested because of the assignment of thousands of men to the parks without any provision for their supervision. Officials of the Works Progress Administration were blamed by Mr. Moses because "hundreds of men have been lying around in the parks, doing absolutely nothing except jeering at workers, shooting craps, drinking and generally creating a nuisance and a menace to the public." The work-relief program is too vast in its scope for the Government to undertake with any assurance of avoiding waste and inefficiency. Trained personnel capable of handling projects of this magnitude is lacking in the Government service. Political factors make it impossible to develop such a personnel. The President promised while the legislation was under consideration that he would assume personal responsibility. It would be physically impossible, however, for one person to give intelligent consideration to the problems involved in thousands of projects scattered over the entire United States. Boondoggling The use of the taxpayers' money for all manner of non-essential purposes, including what is known as boondoggling, has become a public scandal. Much of the work-relief program consists of projects which may have some value in a community but which cannot by any stretch of the imagination be regarded as within the province of the Federal Government. The taxpayers of the country as a whole can expect no possible benefit from money so used. In defending the program Works Progress Administrator Hopkins estimated that 55 per cent of the funds under his supervision will go for street, highway, sewer and water construction. His own figures show the complete disregard for lines heretofore drawn 15 between proper activities of the Federal Government and of the states and local bodies. The following is a miscellaneous assortment of work-relief projects partly or wholly financed by the Federal Government taken at random from the official lists of those given approval: Removing 24,000 cubic yards of earth from 70 city blocks and alleys in Valley City, N. D. Filing, typing, bookbinding and other work in the Library of Colorado State College, Greeley, Colo. Reconstruction of Old Fort Vasquez, Greeley, Colo. Draining basement of schoolhouse by digging trench 300 feet by four feet and laying four inch drain tile in Harmony, Ore. Survey of downtown district of river in Portland, Ore. Construction of an aero-hydrocraft ambulance and harbor patrol boat in Portland, Ore. Sewing program for relief families in Columbia, 8.C. Manufacturing of cotton and woolen garments and distribution to families on relief in Hartford, Conn. Survey of industrial space and number of employees in various industries in Cleveland. Survey of occupancy of hotels and rooming houses in Cleveland. Educational exhibits on advantages of standard milkhouses and other sanitary farm structures in Cleveland. Survey of use of street frontage on business thoroughfares in Cleveland. A survey, appraisal and title examination of certain properties listed by Health and Fire Departments, with a view toward demolition of buildings that are hazards to public safety in Cleveland. Geographical analysis of 100,000 patients attending dispensaries connected with Cleveland hospitals. Survey, according to census reports of the movement of families within the Cleveland metropolitan area during 1934, to show definite trends and the effect on property values and mortgage investments. An inventory of all state property in Oregon. Providing nurses at the Multnomah County Hospital, Portland, Ore. Use of stenographer in County School Superintendent's office in Portland, Ore. Knitting of garments for relief departments in Concord, N.H. Sewing of garments for relief families in Danville, NB. 16 Sewing of dresses, sheets, pillow-cases, towels and comforters in Philmont, N.Y. Repairing shoes for needy school children in Mineola, N.Y. A workroom to make matresses and comforters for families on relief in Vermont. Providing mural decorations in courthouse of Middlesex Co., NJ. Supplying clerks for Old Age Pension Assistance Office in Butler, Pa. Canning food from surplus garden produce in Ashtabula, Ohio. Production of bedding, clothing and household necessities for state's unemployables at Cheyenne, Wyo. Operation of portable cannery for relief purposes in Lane Co., Ore. Physical instruction classes in Waco, Tex. Instruction of housekeepers with a view to rehabilitation of homes of needy families in New Hampshire. A sociological study of the Italian population of New York City to define the social and educational needs, facilities and possibilities of this group. A nursery school and parent education program in New York City. A study of the causes of depression and means of circumventing them, in New York City. A study of folk arts in New York City. A study by the Staten Island Historical Society of landmarks and architectural graphing. Preparation of a complete illustrated catalog of the forominifira fossils, involving the classification and cross-indexing of some 12,000 species in New York City. A study in New York City of the adjustment of aliens during the period between admission and naturalization, and the dissemination of information tn encourage better citizenship. Provision for stenographers and typists for Governor's and Lieutenant Governor's office at Albanv N.Y. A municipal orchestra for park and school programs at Birmingham, Ala. Establishment of a canning kitchen in Boise, Idaho. Stripping of top soil from 120 acres of forest preserve property in Cook County, 111. Recording of data for county histories, county guide books, the locating and marking of historic points of interest, and the preservation in permanent form of historic buildings by model-making and photography in the State of Wisconsin. Production of comforters, towels, pillow-cases and sheets in Mankato, Minn. 17 A study of actual psychiatric reports of the case records of all of the mental hygiene clinics in New York City to learn the incidence of mental disease among different national and racial groups. A study and investigation in New York City to aid aliens without source of income to return to their countries of origin. Use of newspaper editorial workers in New York City to gather information on projects. Organization and administration of a recreational project during the summer season, including life guards, play leaders, musicians, dramatists, etc. in Cleveland. Compilation of data for catalog of bibliographical and research material for use of libraries in Colorado. Revision of catalog in Central Library in Hartford, Conn. Classifying books, rearranging, sorting and checking books at State House in Providence, RX Repair and cleaning of library and museum specimens in various counties in Wisconsin. Rat extermination campaign in Cleveland. Training and work centers for women in Pineville, Ky. Sewing rooms for employing women on relief rolls to make garments and household furnishings for families of relief clients in Virginia counties. Making dresses and teaching women on relief rolls how to sew in White County, Ark. Socialistic Schemes Promoters of socialistic schemes and other visionaries have found berths in the work-relief organization. Never before have they had such an opportunity to try out their ideas at the expense of the taxpayers. Harold L. Ickes, Secretary of the Interior and Public Works Administrator, has frankly revealed one of his experiences with what he described as "pure theorists." "We have had to overcome grave difficulties in getting our slum clearance program under way," said Mr. Ickes in an address at Atlanta, Georgia. "It was one of the first things we undertook, but we had to build from the ground up. We had no precedents to guide us. We had no organization. In developing our program we soon discovered that while there are many men and women in the United States who regard themselves as experts on this subject, few of them have had any practical experience. We discovered, to our cost in precious time, that many 18 of these experts were pure theorists. They never got beyond the conversational stage. It was natural, but unfortunate, that in staffing our Housing Division we turned in the first instance to those who were perfectly sure themselves, and so proclaimed it, that all the wisdom extant in America on the question of slum clearance was carried around in their aching heads. After giving these fine but purely theoretical persons free rein for a number of months, it was borne in upon us, to our complete chagrin, that if any progress at all had been made, it had been backwards." Mr. Ickes ousted the "pure theorists" in that particular instance but this course has not been pursued generally. Paternalism In the light of present events it is amusing to recall the bitter controversies that formerly raged in the Congress over legislation of a paternalistic character, such as, for example, the Maternity Act. Whether or not the Federal Government should engage in anything of this character was then considered a proper subject for discussion and decision by the Legislative branch of the Government. Now paternalism is running riot in the work-relief program although one searches in vain for any specific authorization in law. The Federal Government has no authority over education, and yet a recent announcement stated that the National Youth Administration, with work-relief funds, is giving aid to more than 4,000 graduate students in colleges and universities. Four so-called work-relief projects have been set up under the National Youth Administration to provide part-time jobs for 94,000 young men and women. One consists of a course of training for leadership in community development and recreation, another provides training in rural youth development, a third in public service and a fourth in research. Reclamation and Power Projects Both under the public works program and the work-relief program promoters of western reclamation and power projects have fared well. Construction of many projects of such a questionable character as to have been rejected again and again by the Congress received allotments from the original public works fund. Additional 19 amounts have been made available from the work-relief fund. Allotments from the work-relief fund to the Reclamation Service include $23,000,000 for the Grand Coulee project in the State of Washington, $20,000,000 for the Central "Valley project in California, $15,000,000 for the Ail-American Canal in California, $10,000,000 for the Casper-Alcova project in Wyoming, $5,000,000 for the Yakima proj ect in Washington and smaller amounts for numerous other projects. The reclamation of arid lands in the West is being carried on by the Interior Department simultaneously with the movement for a curtailment of farm acreage by the Department of Agriculture. Power projects are being developed in areas which are already amply supplied with power. The Passamaquoddy project in Maine for the harnessing of tides is one which both public and private agencies refused to consider because of the prohibitive expense. Political considerations were responsible for its inclusion in the Government public works program. Executive Orders Besides the authority to allot money for almost any conceivable purpose the President under the Work-Relief Act has broad power with respect to matters of general legislation. Numerous Executive orders involving subjects with which only the Congress should deal have been issued under authority of the law. Some of the Executive orders are the following: 7027 Establishing Resettlement Administration with broad power to establish, maintain and operate communities in rural and suburban areas, initiate and operate projects respecting soil erosion, stream pollution, seacoast erosion, reforestation and flood control and finance the purchase of farm land and equipment. 7028 Transferring certain property, functions and funds from the Federal Emergency Relief Administration to the Resettlement Administration. 7029 Allocating funds to the Department of Agriculture for emergency conservation work. 7034 Establishing the Division of Applications and Information, the Advisory Committee on Allotments and the Works Progress Administration, all with unlimited authority to hire officials and employees. 7037 Establishing the Rural Electrification Administration with power to initiate and administer a program of projects with respect to the genera-20 tion, transmission and distribution of electric energy in rural areas. 7041 Transferring certain property, functions and funds relating to subsistence homesteads from the Secretary of the Interior to the Resettlement Administration. 7046 Prescribing rules and regulations relating to wages, hours of work and conditions of employment under the Work-Relief Act. 7057 Establishing the Puerto Rico Reconstruction Administration to provide relief and work relief. 7060 Prescribing rules and regulations relating to procedure for employment of workers under the Work-Relief Act. 7064 Authorizing the Public Works Administration to continue to perform all the functions authorized under the National Industrial Recovery Act and also to perform certain functions under the Work-Relief Act. 7065 Creating the National Resources Committee and abolishing the National Resources Board. 7068 Making appointments on the Advisory Committee on Allotments. 7073 Reestablishing the National Emergency Council, originally created under authority of the National Industrial Recovery Act. 7083 Prescribing rules and regulations relating to methods of prosecuting projects under the Work-Relief Act. 7086 Establishing the National Youth Administration with power to initiate and administer projects providing relief, work relief and employment for persons between the ages of 16 and 25. 7092 Prescribing general rules with respect to compensation of government employees in agencies established under the Work-Relief Act. 7096 Appointing members of the executive committee of the National Youth Administration. 7101 Appointing a chairman of the National Advisory Committee of the National Youth Administration with a per diem allowance of $25. 7117 and 7119 Amending earlier Executive order relating to wages, hours of work and conditions of employment on work-relief projects. 7120 Reorganizing under joint authority of the Work-Relief Act and the National Industrial Recovery Act, as extended, the consumers' agencies within the National Emergency Council and the National Recovery Administration. 7123 Appointing 33 members of the National Advisory Committee of the National Youth Administration, each with a per diem allowance of $25 in addition to transportation while away from home. 7129 Authorizing the acquisition of land on Isle Royale for emergency conservation work. 21 7130 Prescribing rules and regulations relating to projects administered by the Rural Electrification Administration. 7143 Prescribing rules and regulations governing the making of loans by the Resettlement Administration. 7151 Establishing a revolving fund for the centralized purchase of supplies and equipment in the work-relief program. 7152 Providing for the administration of relief and work relief in the Virgin Islands. 7157 Prescribing rules and regulations relating to wages of unattached workers employed under the Work-Relief Act. 7164 Prescribing rules and regulations relating to student-aid projects. 7180 Prescribing rules and regulations governing the making of loans by the Puerto Rico Reconstruction Administration. 7183A Authorizing construction of the Bluestone Reservoir project in West Virginia for purposes of power development, flood control and creation of navigation at a cost of $13,000,000. 7188 Increasing the limitation on loans and grants to states and subdivisions thereof from $900,-000,000 to $1,700,000,000. 7190 Broadening the authority of the Resettlement Administration so as to give blanket power to initiate and administer "other useful projects" besides those specified in Executive Order 7027. 7194 Establishing the Prison Industries Reorganization Administration. 7202 Appointing five members of the Prison Industries Reorganization Board, each with a per diem of $25. Under the above Executive orders the President has created new Government agencies, given authority for the hiring of thousands of officials and employees and redelegated to these agencies general power conferred upon him in the Work-Relief Act. The original order creating the Resettlement Administration headed by Professor Rexford G. Tugwell was broad in its terms as to specific classes of projects. A second order amending the first removes any possible limitation by giving authority to initiate and administer "other useful projects." The Government's invasion of the power business is extended by Executive orders. The regulations as to wages, hours and conditions of employment apply not only to Federal projects but to local projects to which the Government has contributed. Violations of any of the regulations issued by the 22 President under the Work-Relief Act are punishable by fines up to $1,000. Pump Priming The present administration a few months after taking office became converted to the idea of priming the industrial pump by an extensive public works program. The National Industrial Recovery Act of June 16, 1933, coupled a public works program with regulation of industry, the former being designed to activate capital goods industries, which "have furnished the most difficult unemployment problem. The public works program was intended to contribute to the administration's effort through monetary and other means to raise the general commodity price level. Just ten days after the enactment of the National Industrial Recovery Act one of the American delegates at the World Economic Conference at London offered a resolution proposing a synchronized public works program by the nations of the world. The conference was informed that the American Government was undertaking "the largest program of public works in the history of the world," that it would "energize production and consumption everywhere," and that "the adoption by other countries of such a policy moving in concert with the United States would exert a steadying influence upon foreign exchanges." In the resolution offered on behalf of the American delegation it was specified that Government expenditures for public works "shall not necessarily be included in the budget." The British Government already had experimented with public works programs and had found it undesirable to unbalance the budget by unusual expenditures of this character. Walter Runciman, President of the British Board of Trade, stated the position of his government in vigorous terms with the result that the American resolution was not approved. The experience in the United States has been largely the same as that of Great Britain as to the costliness of public works in creating employment and failure to accomplish the desired results. Apologists for our public works program have contended that there was too much delay by reason of insistence upon sound projects and safeguards against graft, that because of this delay there was lacking the increased purchasing power relied upon to neutralize added costs imposed upon industry by the NRA, that the public 23 works fund was not large enough and that the British experience was not conclusive because of an inadequate and unduly restricted program. In any event it is conceded that while some employment was given through public works expenditures the number involved, estimated at about 700,000 directly and indirectly in 1934, was small in comparison with the total unemployed and that no permanent stimulus was given to the capital goods industries. Available statistics show that public works construction has replaced rather than stimulated private construction activity. Despite failure of the original public works program the work-relief scheme implies continued faith in the efficacy of pump-priming through public works. If it is the administration's theory that money should be poured out until it produces results, the taxpayers are in danger of paying the cost of a third program when present funds are exhausted. Spending Theory Fallacious The expenditure of a reasonable amount for public works can be justified. Even in normal times the Federal Government has spent several hundred millions annually for this purpose. The Congress, to which properly belongs the determination of policies as to particular types of expenditures, has ordinarily refused approval of appropriations for public works except where it could be shown, first, that the amount involved was not so great as to endanger a balanced budget; second, that the project was self-liquidating in character or was highly desirable from an economic or social standpoint; and, third, that if was properly within the scope of activities of the Federal Government as established under the Constitution. A moderate enlargement of the normal public works program can be defended as a means of checking adverse business trends. There is no justification, however, when an excessive burden of debt is involved, when projects are unsound economically and when there is an entire disregard of proper limits of the prerogatives of the Federal Government. The mere spending of money for the sake of giving jobs has no support in sound theory or in experience. To grasp the reason why made work is futile as a pump primer it is necessary to understand the economic significance of the industrial process. In the last analysis goods and services 24 are exchanged for other goods and services. The monetary and price element merely furnishes a part of the machinery involved in the exchange. One person produces or has a part in producing one commodity. Another person produces or has a part in producing a different commodity. The first person is able to satisfy his desire for the commodity produced by the second person by offering what he has produced in exchange. The process is complicated by modern methods of distribution but fundamentally the system is one of the barter of goods and services of one person for those of another. Private industry under the capitalist system is a plan which furnishes a permanent income to those engaged in it. The goods and services of one unit of industry are exchanged for those of another. So long as the consumptive demands of the people as a whole are not entirely satisfied, industrial expansion can go on. Even though technological advances make it possible to produce goods with fewer workers, new industries have in normal times absorbed those thus displaced. In theory, according to the opinion of the best authorities, universal overproduction is not likely because the consumptive desires of the people as a whole have never been fully realized and would not be even if the entire present productive capacity of American industry were utilized. There have been maladjustments in the distribution process which have obstructed the completion of exchange transactions among commodities. Thus there has appeared to be overproduction of particular commodities. The worldwide depression, due to a variety of factors, has involved a dislocation of the industrial mechanism and created unemployment. Work Relief Does Not Create Goods What is necessary for business recovery is a stimulation of the automatic processes of private industry. Work relief, consisting of unessential employment, can play no part in the revival of industry because no goods are being created. There is nothing which can be exchanged for something else. Employment can be provided only as long as the Government's money lasts. When the money is gone more must be appropriated and even then there can be no lasting benefit. The profligate expenditure of Government money for public works and made work not only 25 does not help recovery but retards it. The borrowing of huge amounts by the Government diverts capital which if used in private industry would be a far more effective instrument for recovery. Taxes levied to pay the cost of public works form an extra burden upon citizens and consequent deterrent to recovery. The program in effect during the past two years has placed an undue load on the taxpayers for many years to come. It should be realized also that public works are not as a rule subject to taxation. If public enterprise is to be relied upon increasingly to provide employment it means that the cost can be spread only over private business operations. Use of the same money in private enterprise would add to the property subject to taxation for proper governmental purposes. The spending of money in a work-relief program is largely futile as a stimulus to the capital goods industries. The money will be of some benefit to the industries which produce consumption goods, food, clothing and other articles which the ordinary person buys. The consumption goods industries, however, have relatively little unemployment. To stimulate the capital goods industries, where most of the unemployment is centered, it is necessary to bring about a greater investment of savings. Restrictive policies have hampered needlessly the flotation of securities by industrial enterprises. Under uncertainties which have existed by reason of Government policies investors would prefer to buy taxfree securities of public bodies than to risk their money in private industry. Furthermore, work-relief policies do not promise any permanence of employment in which savings can be made. In the heavy industries labor cannot go back to work until capital goes back to work, and it is extremely difficult to induce capital to go to work when so large a percentage of the profits of the owners of capital is taken through taxation. The prime requisite for the revival of private industry sufficiently to take up the slack in employment is a shift by the administration to policies which will give encouragement to go forward. Budget Deficits It is disheartening to contrast budget deficits due to the public works and work-relief pro- grams with results in the form of employment. The employment given to perhaps 700,000 persons directly and indirectly in 1934 under the public works program was at the best of a temporary character. Considerably more than twice that number were put back to work in private industry during a period of a few months in the summer of 1933 before any of the emergency programs had become fully effective and with no stimulus other than the surge of confidence which swept over the country in the early part of the administration. The deficits of the fiscal years 1934, 1935 and 1936 will aggregate nearly $11,000,000,000. In the light of urgent relief needs a considerable deficit was unavoidable. To the extent of some billions of dollars of the amount, the taxpayers will be forced to pay the price of experimentation with unsound theories. The taxpayers not only are saddled with a tremendous debt but are paying the costs of an expanded bureaucracy, the greatest in all history. This bureaucracy has been fired with a zeal to regulate business activities and even the private lives of the people. Latest reports show that the Works Progress Administration has about 30,000 employees, the Resettlement Administration about 14,000 and the Public Works Administration about 8,000. These are only three of a score or more agencies that have to do with the distribution of the work-relief fund. The Alternative The solution of the unemployment problem lies not in the appropriation of more billions but in the rigid curtailment of expenditures and the adoption of policies which will give private industry confidence in the future. The continuance of large deficits will lead only to a breakdown of governmental credit, inflation and irreparable injury to the entire nation. At the earliest possible moment the problem of relief must be shifted back to the states, counties, municipalities and private agencies where it belongs under our form of government. When it is clearly demonstrated that the resources of a state are exhausted the Federal Government might properly loan it funds to carry on the work. Meanwhile the administration should adopt a direct relief policy which will be administered both economically and 27 wisely so as not to encourage either idleness or dependence upon public charity. Private industry will furnish the solution of the unemployment problem if given half a chance. It must know that fiscal policies of the Treasury are on a sound basis, that the attempts to regulate industry and agriculture do not mean that our form of government is being changed to Socialism, Fascism or Communism, that individual initiative is to be allowed to continue as a potent force in American life, that the incentive to work and take risks in business will not be destroyed by oppressive taxation and that future legislation will be kept within the bounds both of the Constitution and sound economic principles. Until these assurances are given it is idle for the President to attempt to shift to private industry the onus for failure to reduce more rapidly the number of unemployed. 28 AN INVITATION TO JOIN THE AMERICAN LIBERTY LEAGUE We extend to every American citizen who believes in the fundamental principles which gave birth to the Constitution of the United States an invitation to become a member of the American Liberty League. You may indicate your acceptance of this invitation by filling in the necessary information as to your name and address on the enrollment blank below and mailing it to American Liberty League, National Press Building, Washington, D. C. There are no fees or dues. If you are willing and able to give monetary help for the League's support your contribution will be appreciated, as our activities are supported entirely by the voluntary gifts of our members. I favor the principles and purposes of the American Liberty League and request that I be enrolled as a ENROLLMENT BLANK Date. Signati Name (Mr. Mrs. Miss) Town Street County State *As a contributing member I desire to give SL____ to help support the activities of the League: Cash herewith_Installments as follows:.__---