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"Clearly Vicious as a Matter of Policy": The Fight Against Federal-Aid

PART TWO: Unease in the Golden Age (Page 1 of 3)

The nickname for the 1920s, "The Roaring Twenties," applied equally well to the BPR and the State highway agencies. Compared with the early years of the Federal-aid highway program, progress in the 1920s was staggering. In 1922 alone, projects totaling 10,247 miles were completed at a cost of $189 million, three times as much mileage as had been improved since the start of the program in 1916.

Through 1928, the Federal Government had helped the State highway agencies improve over 73,000 miles, with another 11,000 miles under construction. And by 1929, the States had improved 90 percent of the Federal-aid system (about 170,000 miles) to some degree, about half of it under the Federal-aid highway program. This same year, the BPR approved the first projects to reconstruct segments of the Federal-aid system that had previously been improved with Federal-aid.

These improved roads were not concrete links in transcontinental highways. Most of the projects involved graded earth, sand-clay, or gravel surfaces. The projects, however, were consistent with the BPR's policy of stage construction. Needs were so great, particularly in view of the limited available funding, that the BPR encouraged the States to make improvements consistent with traffic needs and financial resources in a way that would ensure future upgradings retained the investment in the earlier stage of improvement.

By decade's end, MacDonald could claim that, "the American road building program of the last decade never has been equaled in the history of the world."108 Roadbuilders of the period described their era as the Golden Age of Road Building.

They also had to fight off those who wanted to bring it to an end.

President Calvin Coolidge's Campaign Against Federal-Aid

After campaigning for a "return to normalcy," Harding would preside over one of the most corrupt Administrations in American history. In 1923, while returning from a trip to Alaska, Harding died in San Francisco on August 2. Calvin Coolidge became President on August 3, 1923; in 1924, he was elected to a full term in the wake of the "Coolidge prosperity" the country was enjoying.

The Vermont native was an opponent of the Federal-aid concept. This opposition was consistent with his general view that the Federal Government should play a more limited role than it had played in recent years. For example, he did not believe the Federal Government had a role in regulating the stock market or helping farmers through hard times. His philosophy of government was summed up by a comment he made to Senator James Watson (R-In.): "Senator, don't you know that four-fifths of all our troubles in this life would disappear if we would only sit down and keep still?" He earned the nickname, "the Prince of Laissez-Faire."109

The new President supported highway development. "No expenditure of public money contributes so much to the national wealth as for building good roads," he said in his first Annual Message to Congress on December 5, 1923. The President's problem was with the Federal-aid concept, which was used for highways, but also for activities as diverse as vocational education, cooperative agricultural extension work, maternity and infant hygiene, and industrial rehabilitation. He began speaking against Federal-aid on January 21, 1924, just 5 months after taking office, during a meeting of the Business Organization of the Government.

He explained that, "There is scarcely an economic ill anywhere in our country that cannot be traced directly or indirectly to high taxes." He was in favor of sound administration as opposed to the tendency "to lapse into the old unbusinesslike and wasteful extravagance." After much thought, he had concluded that "the financial program of the Chief Executive does not contemplate expansion of these subsidies." He explained his concern:

My policy in this matter is not predicated alone on the drain which these subsidies make on the National Treasury. This of itself is sufficient to cause concern. But I am fearful that this broadening of the field of Government activities is detrimental both to the Federal and the State Governments. Efficiency of Federal operations is impaired as their scope is unduly enlarged. Efficiency of State governments is impaired as they relinquish and turn over to the Federal Government responsibilities which are rightfully theirs.110

Although President Coolidge based his opposition to Federal-aid on economy in government affairs and his support for lower Federal taxes, sympathetic State officials saw the debate he had launched from their perspective. Governor Albert C. Ritchie of Maryland, a Democrat who strongly opposed Federal intrusion in State affairs, joined the denunciation of Federal-aid in a speech to the Governors' Conference at Poland Springs, Maine. After complaining that the Federal Government collected more in taxes from residents of Maryland than did the State government, Governor Ritchie explained one of the causes for "this Federal invasion of the pocket-books of the people":

One of the contributory causes of this Federal invasion of the pocket-books of the people is maintenance of an enormous and growing overhead of bureaus and commissioners, of which some are not needed, while others should be curtailed, and still others do work and spend money for purposes which should be turned back to the states...

He particularly disliked the 50-50 Federal-aid concept that he said had begun in 1914 with Federal land grants. In fact, he considered the term a misnomer:

The Federal Government can scarcely be said to "aid" the states, when all it does is take money from the people of the states and then give it back to them again. Most certainly the Federal Government does not "aid" the states, when what it actually does is give back only a part of what it collects from them, and keep the rest to pay the cost of expensive bureaus maintained for the purpose of giving it back.

But his primary objection was even more serious:

The granting of Federal Aid means the taking of Federal control over local subjects in a manner which could not possibly be done directly under the Constitution. The Federal Government would have no conceivable right to interfere at all in the management by any state of its health conditions, of its schools, or of its works of internal improvement. But when the Federal Government gives Federal Aid, it does so on conditions. It always demands the right of supervision. It can withdraw its appropriation at any time if its directions are not observed by the state. So that instead of being an "aid," the thing is really a trade in which the Federal Government buys the right to superintend activities which primarily belong to the States...

He also questioned the quality of the Federal supervision:

Then the everlasting annoyance of Federal inspectors and investigators and agents, often irresponsible and incompetent, prying into business which ought to be private and into affairs which ought to be personal, and exercising supervision and demanding reports and audits of almost every conceivable kind.

He was not singling out the Federal-aid highway program, but he did point out what he considered another injustice by using roads as an example:

The charge falls on all alike. But when the money goes out of the Federal Treasury, gross discrimination is involved... Maryland began her splendid system of state roads about 1910, and was far ahead of other states when Federal Aid for highways commenced in 1916. Other states have since been helped with Federal money in starting their improved road work. Maryland carried her burden alone for at least six years.111

Members of Congress contributed to the debate. Senator James W. Wadsworth, Jr. (R-NY) denounced Federal intervention during a Lincoln Day Dinner on February 12, 1924. He begged the audience's indulgence to comment on a proposal "for the Federal Government to contribute from its Treasury to the support of undertakings at present carried on in the several States." He was referring to "the principal [sic] of Federal aid, so called." Based on his experience in the State legislature and the United States Senate, he explained:

I know but little of the Federal Government, but enough to know that the people of this State, for example, are competent through their own government to take care of their own affairs, and that nothing in the way of efficiency will be gained from the State surrendering to the Federal Government at the price of Federal money the control of those things which they have had under their control for a century or more.112

Representative John Philip Hill (R-Md.) expressed similar views in the House on December 29, 1924, during debate on the Treasury and Post Office Appropriation Bill:

Most of the causes for which appropriation from the States are asked are meritorious to [sic] themselves. Those backing them are zealous, persuasive, and tireless. Once on the statute books, the States hesitate to refuse the doles; they want their share. The movement being launched, there comes insistent demand for more and more money, more and more employees, until the States awake to the fact that there is another well-intrenched Federal agency in their midst with ever-increasing activities.113

On February 6, 1925, Senator William C. Bruce (D-Md.) summarized the argument against Federal-aid during debate on a bill authorizing funds for the Federal-aid highway program for FYs 1926 and 1927:

My objection to the general system of Federal aid or subsidy is... fundamental. In my judgment it constitutes the stealthiest, the most insidious, the most perilous, the most effective invasion of State rights that has ever been known in the history of our country. A more skillful, a more ingenious method on the part of the Federal Government of robbing the States of the full measure of their State sovereignty could not be devised; in other words, this system of Federal aid is simply an indirect, oblique method of filching from the States the domestic powers that properly appertain to them...

Like Samson when robbed of his omnipotent locks by Delilah, the people of the United States have permitted themselves to be deprived of a large portion of the State authority with which they were originally endowed... I do not quarrel with any proper exercise by the Federal Government of the power to establish post roads. That is one of the objects to be subserved by the Federal power, just as much as any other object that falls within the domain of the power. I do object, however, to this system by which the Federal Government lures the State governments into the surrender of that State sovereignty, and that is not all; by which it tempts the State governments often into most imprudent, improvident, and extravagant expenditure of State funds.114

As might be expected, the BPR followed the debate closely. When Senator Simeon D. Fess (R-Oh.), a Federal-aid supporter, referred to the BPR's program as being of the hit-or-miss variety, Chief MacDonald wrote to clarify that the program "is not on a haphazard basis, but is strictly confined to a system of roads, interstate and intercounty in character, limited to not more than 7 per cent of the total road mileage." His February 5 letter enclosed a map of the Federal-aid system of 174,350 miles, and explained that, "We are completing this system at the rate of about 9,000 miles per year." MacDonald explained that the goal was to do the major work of surfacing the system in a reasonable manner over the next 12 to 15 years, after which other work could be done, such as eliminating dangerous railroad crossings.

The Mississippi River, MacDonald continued, was something of a divider in highway policy. In the more populated States east of the river, Federal-aid projects involved higher types of surface, such as bituminous macadam, brick, and Portland cement concrete. West of the river, the less populated States requested assistance in "stage construction":

This means that we first do the grading and other necessary fundamental work such as the building of culverts and bridges, and pour on the surface a covering of gravel or sandclay [sic] to be used until funds are available and the traffic has reached a point where such a surface can no longer be economically maintained.

MacDonald concluded his letter with a general response to critics:

There are no arbitrary policies established with respect to the administration of Federal aid. Under the Federal Highway Act the States' rights and authority are very carefully preserved, and the question of State versus Federal rights is not raised in our actual operations. There is close cooperation between the State highway departments and the Bureau of Public Roads. Each respects the good faith and judgment of the other, and we approach the problem of road building as engineers seeking to accomplish the same objective and to be mutually helpful in this immense task.

Senator Fess had the letter read into the record of the debate.115

Despite concerns about the concept, Congress approved President Coolidge's request to continue, but not expand, the Federal-aid program, with $75 million for each of FY's 1926 and 1927. The President signed the act on February 12, 1925.

Backlash

The western States, with their sparse population and large amounts of nontaxable public land, were particularly concerned about the anti-Federal-aid rhetoric. One of the outspoken defenders of Federal-aid for roads was Harvey M. Toy, a hotel man from San Francisco who served as chairman of the California State Highway Commission. His State was separated from transcontinental traffic by States that did not have sufficient tax base to upgrade their through routes on their own. He began an article in the September 1925 issue of The American County by saying, "Eastern politics, plus a misconception of the purpose back of Federal-aid, may imperil the present highway policy of the National Government." The West would, he said, demand continuation of Federal-aid "as an income to which it is entitled" in view of the large amount of nontaxable Federal lands" across which roads must be built "for the accommodation and pleasure of Eastern tourists coming westward in ever-increasing numbers."

In response to those who complained that their State paid more in Federal taxes than they receive in Federal appropriations, Toy asked, "Are we a nation or a confederation of States? Shall all taxes paid on Broadway be expended on Broadway, or for other necessary governmental purposes throughout New York City?"

He concluded:

Interstate highway transportation is more important today than ever before in our history. We must fight the forces of disintegration by making it easy for the people of every part of the Nation to visit the other. We must become one Nation, one people.

Federal aid means continuity in our highway construction - a truly National system of highways reaching into every part of the country. The work of building such a system, now well planned under the present policy, will be impeded, probably halted altogether, if Federal aid is not continued... America does not want many unconnected State highway systems. It needs and must have one great National system of improved roads.116

In October 1925, President Coolidge proposed to slash the Federal-aid highway program from what a "White House spokesman" (presumably Coolidge himself) referred to as "$170 million" a year. His announcement prompted a strong backlash in the West. Using the BPR's most recent annual report, the Morning Oregonian on November 1 suggested that, "President Coolidge was misinformed as to the actual yearly cost of Federal-aid roads." According to the report, the article said, the correct figure had been $95 million. "The fact that this figure is something more than half as large as that used by the president is puzzling even expert statisticians." (BPR's annual report for FY 1924 stated that the total cost of Federal-aid projects completed during the year was $242.9 million, with a Federal share of $111.3 million. Because projects can take more than a single year to complete, the "actual disbursements of the Federal funds" to the States for the completed projects and progress payments for projects begun during the year totaled $95.7 million.117)

The article speculated that Congress would ignore the President's proposal, and perhaps increase funding for Federal-aid highway projects from $75 million a year to $90 million:

The chief ground for this assumption is that a majority of the states are now embarked upon highway construction programs to which they have devoted many millions of dollars of their own funds. They took such steps in the belief that the federal government would continue to bear a proportionate share of the burden, and now intend to hold it to the implied agreement.

Leo A. McClatchy of the San Francisco Bulletin explained the President's view in an article datelined November 3:

In the case of road-building... the president is represented as believing that the government is being "milked" to some extent under the present scheme by which federal cash is put into state road projects. He favors such cooperation when the roads can properly be classed as "main arteries" of national importance, but is opposed to federal aid on roads of merely local importance. The states should undertake this work themselves, he feels, and he thinks this can be done without unduly burdening the taxpayer.

McClatchy pointed out that the President conceded that in fairness, exceptions should be made for States where much of the land is owned by the government and, therefore, not taxable.

Western States organized against the reported cutback. Motor Land magazine, published by the California State Automobile Association (CSAA, representing northern California), reported:

Federal aid in the construction of a national system of highways is in genuine jeopardy with the system as it is now laid out less than one-half completed... Forward progress in the campaign to insure continued appropriations for Federal aid, which is of national importance and the lifeblood of highway construction in practically all of the western states, was further complicated by a persistent and apparently well-founded rumor from Washington to the effect that President Coolidge would recommend curtailment of Federal aid in his annual message to Congress.

On November 28, 1925, the association wrote to the President to express hope that the report was in error. Motorists across the West, the letter said, "are 100 per cent in favor of full continuation if not increased Federal highway aid under existing laws until the government program is completed." After explaining that a nationwide system of coordinated highways was vitally necessary from military, commercial, and tourist standpoints, the letter said, "we earnestly urge you to eliminate recommendation for curtailment at this time and take steps to ascertain the real sentiment of the country regarding this most important matter." The association also called on Senators and Representatives to call upon the President to urge him to support Federal-aid in present amounts, if not increased amounts. Automobile clubs in the 11 western States sent similar letters to the President.

Meanwhile, efforts to solidify motorist support throughout the country were underway. In late November, State auto club representatives and the AAA executive committee met in Detroit to develop a coordinated plan for ensuring continued funding. Plans were worked out for requesting support from civic associations and other motoring groups, with AAA assuring the States of the support of its 750 affiliated clubs. The CSAA was delegated to organize the AAA motor clubs in the 11 western States. On November 21, 1925, according to an article in the San Francisco Examiner the following day, CSAA representatives "called on President Coolidge and other high government officials to present the demands of the western states for a continuation of Federal aid."

Farm organizations joined in expressing concerns about the reported policy change, since the President had indicated he particularly objected to Federal-aid funds for the "secondary" portion of the Federal-aid system, encompassing farm-to-market roads. In Sacramento for its annual convention, the National Grange passed a resolution demanding the continuation of Federal-aid as a national necessity and obligation, according to an article in the San Francisco Examiner on November 22, 1925.

AASHO Fights Back

AASHO, which had played a key role in creating and shaping the Federal-aid highway program in 1916, 1919, 1921, and 1922, began fighting back in the fall of 1925.

It published articles in the October 1925 issue of its magazine, American Highways, on the theme. The first, "Who Pays Uncle Sam's Bills," addressed the source of Federal tax revenue, observing that "tabulation of receipts for the Federal Treasury, by States, is misleading, unfair and in many cases far from the truth as to who meets the assessments." In a lengthy section, the article addressed the claims of New York State, one of the leading opponents of Federal-aid. Although the State claimed to contribute 25 percent of Federal revenue, the article noted that while corporations are based in the State, the revenue they generate comes from elsewhere. For example, the Union Pacific and Southern Pacific Railroads, while paying taxes from corporate offices in New York, ran trains that got no closer to the State than Kansas City (Union) and New Orleans (Southern). Similarly, the United States Steel Corporation paid corporate taxes from New York, but had plants and warehouses around the country, plus 153,350 stockholders "who really paid this income tax," only 32,322 of whom lived in the State.

A second article discussed "Federal Responsibility For Our Highways." The article began by pointing out that Federal funds for interstate roads "are not a charitable contribution to an indigent public, but rather a fitting appropriation to a public necessity indisputably national in character." It quoted President Coolidge in support of highway development from his message to Congress on December 6, 1923 ("Highways and reforestation should continue to have the interest and support of the Government"), then asked, "How can they have real support from the Government without financial backing?"

The article quoted early American leaders on the importance of good roads and the necessity of Federal involvement. In 1801, Alexander Hamilton, who believed in a strong central government, had said:

The improvement of the communications between the different parts of our country is an object well worthy of the national purse, and one which would abundantly repay to labor the portion of its earnings, which may have been borrowed for the purpose. To provide roads and bridges is within the direct purview of the Constitution.

It cited President Madison's 1816 message to Congress, regarding the need to develop a comprehensive system of roads and canals, subject to a constitutional amendment, and quoted Calhoun in 1817:

Let it not be said that internal improvements may be wholly left to the enterprise of the States and of individuals. I know that much may be justly expected to be done by them; but in a country so new and so extensive as ours there is room enough for all the general and state governments and individuals to exert their resources.

In 1819, while serving as Secretary of War, Calhoun had said:

It is in fact, one of the great advantages of our country, enjoying so many others that, whether we regard its internal improvements in relation to military, civil, or political purposes, very nearly the same system, in all its parts, is required. The road or canal can scarcely be designated which is highly useful for military operations that is not equally required for the industry or political prosperity of the community.

The article also summarized the provisions of the United States Constitution that justified Federal participation:

Preamble:--"... provide for the common defence, promote the general Welfare."

Article I, Section VIII -

  • "... provide for the common Defence and general Welfare of the United States."
  • "To regulate Commerce with foreign Nations, and among the several States..."
  • "To establish Post Offices and post Roads."
  • "To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States or any Department or Officer thereof."

After analyzing each provision, the article summarized the history of Federal involvement since creation of the U.S. Office of Road Inquiry in 1893. Having described the good that resulted from Federal involvement, the article cited the Republican and Democratic platforms adopted prior to the 1924 Presidential election, both of which supported continued Federal-aid highway funding. The article concluded:

That the Federal government has plenty of Constitutional powers over the highways there is abundant proof. How she can have control and then repudiate any responsibility for those highways is incomprehensible. Curtailment of the program of construction as it is now moving forward would not be a real saving. There is plenty of evidence to show that it would be an economic loss. No Federal function today is giving the people more for the funds involved than for highways. A solemn agreement was made with the States and the completion of the system should go forward with sound, business alacrity.

When AASHO met in Detroit for its annual meeting on November 18-21, 1925, the threat to Federal-aid was a prime topic of discussion. Frank F. Rogers, Michigan State Highway Commissioner, used his address as president of AASHO to address the topic. After summarizing the historical and other arguments in support of Federal-aid, he turned to President Coolidge's views:

President Coolidge has said, or at least the press has credited him with saying, that "When the National Treasury contributes half, there is temptation to extravagance on the part of the state. Yet there are constant demands for more Federal contributions. Whenever by that plan we take something from one group of states and give it to another group, there is grave danger that we do an economic injustice on one side and political injury on the other. We impose unfairly on the strength of the strong and we encourage the weak to indulge their weakness." Later the same person, in an Omaha address, said: "I can see no merit in any unnecessary expenditures of money to hire men to build fleets and carry muskets when international relations and agreements permit the turning of such resources into the making of good roads, the building of better homes, the promotion of education, and all the other arts of peace which minister to the advancement of human welfare." This is more encouraging.

Rogers' response was similar to the material in the October 1925 issue of American Highways. He concluded:

I wish to be emphatic in saying that there is no loss of initiative when the State and Federal engineers jointly strive for the best there is in highway practice. Under such a system most of the states have produced a rather large number of trained engineers who are in charge of the work and who, for the most part, take pride in building the best roads they can produce. Neither group feels that it has lost anything by contact with the other and I can not see wherein any state's rights or local home rule principle is violated in this kind of a partnership, which is producing at the rate of between 11,000 and 12,000 miles a year of the best roads of the various types that were ever built on the surface of the globe.

AASHO adopted a resolution in support of continued Federal-aid for FYs 1928 and 1929 at a level of $80 million a year.

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FOOTNOTES

  1. MacDonald, Thomas H., "More Motoring Mileage," American Motorist, February 1929, p. 44.
  2. Smith, Gene, The Shattered Dream: Herbert Hoover and the Great Depression, William Morrow and Company, Inc., 1970, p. 48-50.
  3. "Extracts from the Public Addresses of the Hon. Calvin Coolidge, President of the United States." This compilation is from a file called "FEDERAL-AID (prior to 1927)" maintained by the U.S. Bureau of Public Roads. It includes news clippings, typed excerpts from speeches, and magazine articles on the subject. The file is part of a Vertical File of material in the U.S. Department of Transportation Library.
  4. Ritchie, Albert C. "Back to States' Rights!" The World's Work, March 1924, pages 525-529.
  5. "FEDERAL-AID (prior to 1927)."
  6. "FEDERAL-AID (prior to 1927)."
  7. "FEDERAL-AID (prior to 1927)."
  8. "FEDERAL-AID (prior to 1927)."
  9. Toy, Harvey M., "West Must United in Support of Continuation of Federal Aid for Highway Construction," The American County, September 1925, p. 5-6.
  10. MacDonald, Thomas H., Report of the Chief of the Bureau of Public Roads, October 15, 1925, p. 5-6.
Updated: 10/15/2013
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