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

PART ONE: Unease in the Golden Age (Page 6 of 6)

Federal Highway Act of 1921

Senator Townsend reported his revised bill to the Senate on August 15. It had been modified again, with one change reducing the authorization to $100 million for only one year.

Discussion of the bill began on August 16. When the provision limiting Federal-aid to a 7-percent system was discussed, Senator Atlee Pomerene (D-Oh.) asked how 7 percent had been chosen as the cutoff point. Senator Townsend replied:

I do not know why they decided on 7 per cent, except that this is about the proportion of roads within a State which could reasonably receive Federal aid. Indeed, that is about as large a percentage as could receive State aid.

E. W. James, a BPR official who was involved behind the scenes, would discuss this question in a recollection written in 1967:

I have never had a better explanation than that of Markham, Secretary for years of the Association of State Highway Officials. Of course, 5 percent or 10 percent would have been a more natural figure, but why 7 percent? As Markham explained: Senators [Tasker L.] Oddie of Nevada, long gone, and Carl Hayden of Arizona, still on duty at 88 years plus or minus, were both strongly interested and concerned in the whole Federal Aid Road program. They wanted to be sure that their States would have at least two cross State roads, based on their certified public road mileage, one say east and west and one at approximate right angles north and south. Using undoubtedly incorrect or questionable mileage, they figured that 7 percent was the lowest fraction that would give them what they wanted and figured they needed. So they saw to it that 7 percent was written into the law. That's that. Whether Markham was right, I cannot say.89

The most surprising amendment of the bill occurred on August 17 when Senator Curtis, Markham's Kansas friend, moved to eliminate Section 3, which established the Federal Highway Commission. He explained:

I am opposed to the creation of any more commissions. I think the time has come for the Senate to express itself in regard to that matter... Arrangements have already been made in the Department of Agriculture for carrying on this work; the work has been satisfactorily carried on up to date, and it seems to me that a commission is unnecessary.

Surely, this Government has too many commissions now, and it would be a good thing if some of them were eliminated. Some of them were very good commissions, but we have some that are absolutely unnecessary and are doing no good; and if one looks over the amount of appropriations that we have made for commissions in the last 10 or 12 years I know he will be astonished and surprised at the amount of money that has been expended; I think much of it unnecessarily.90

The discussion of the proposition noted that Congress had appointed a joint committee to consider consolidation of the executive agencies and the inefficiency of necessary commissions such as the Interstate Commerce Commission (ICC). (Senator Henry Cabot Lodge, Sr. (R-Ma.), said the ICC "has done, on the whole, as well as a commission can do; but the delays there are simply intolerable, due to the endless discussion they are always carrying on.").

The vote to remove Section 3 was 36 to 15. With Senator Townsend acknowledging that "a good many changes" would now be needed to align his bill with the Federal-aid concept "because the measure is constructed on the other theory," Senator Curtis led the Senate in a series of amendments to insert the phrase "Secretary of Agriculture" in place of "commission" each time it appeared in the bill, as well as other corresponding changes needed following elimination of Section 3. Engineering News-Record called these actions "an overwhelming vote of confidence for the U.S. Bureau of Public Roads."91

The Senate also voted to reduce the $100 million authorization in the bill for FY 1922. Senator Townsend told his colleagues:

I have talked with representatives of the administration in reference to this bill, and I have been advised by the President, "Do not make it too large." I think it is believed and expected that an appropriation for roads will be made, but no amount has ever been indicated. We put this in at $100,000,000, which is the amount of last year's appropriation for roads.92

In view of the budget situation facing the country, the Senate reduced the authorization to $75 million for 1 year only, FY 1922, which had begun on July 1, 1921.

The amended Townsend Bill passed the Senate on August 19, sending the measure to Conference Committee to resolve differences between the House and Senate bills. In a post-mortem on the defeat of the proposed commission, Townsend reflected:

Neither Senator Curtis nor any other single Senator could have defeated the commission plan under ordinary circumstances. The fact is, however, that I was practically hopeless of success some time ago, when such a revulsion of feeling set in against commissions generally. Senator Norris had proposed a commission in his agricultural bill to look after farmers' credits, and especially relative to foreign markets. The decision against that commission was overwhelming. The Shipping Board has been under condemnation for a long time, and it in fact is a commission. I have seen the sentiment grow in the Senate against commissions for some time, and for that reason I repeat I was rather hopeless of success.93

Supporters of Federal-aid were disappointed when conferees did not meet to discuss the few remaining differences between the House and Senate versions before Congress went into recess at the end of August. The continuing concern about the budget appeared to play a part in the delay, with congressional leaders hesitant to appropriate even $75 million for the highway program.

In the view of Engineering News-Record, resolution of differences between the two bills should have been easy. The Townsend Bill as approved by the Senate was "radically different" from the Senator's original bill:

Months ago the plan for a national highway system, to be built and maintained entirely with federal funds, was abandoned by Senator Townsend so that the main issues on which there had heretofore been controversy had disappeared.

Nevertheless, with these "bones of contention removed," Congress recessed before a unified bill could be completed.94 The magazine explained that, "There is no disputing that several influential members of each House of Congress are not enthusiastic over the project [sic] of appropriating $75,000,000 at this time." Although they were in a position to delay the bill, the magazine speculated that "an overwhelming public demand for the highway money" would prompt the leaders to "forego dilatory tactics."

As a result there is some uncertainty as to just when the new federal-aid appropriation will be available for distribution, but no doubt is expressed in any quarter as to the final passage of the bill.95

According to Senator Townsend, the Senate had appointed its conferees on August 19, the day the amended bill was approved. The House appointed its conferees on August 24, the last thing it accomplished before recessing that same day, but did not formally notify the Senate of the action until October 3. As a result, Senator Townsend could make only informal contacts with the House conferees. He had tried to schedule a meeting but found that all the House conferees were out of town:

When Congress resumed its sessions after the recess I called up, or had my secretary call up, the various conferees, and even wrote to the conferees at their homes, telling them that I wanted a meeting of the conferees...

He had finally managed to schedule the first meeting of the Conference Committee on October 5, and even that occurred, the Senator said, only after Speaker of the House Frederick H. Gillett (R-Ma.) sent a telegram to the conferees calling on them to return to the city for the conference.96

As expected, the conferees did not need much time to complete their work. The Conference Committee completed a unified bill after extended sessions on October 6, 7, and 8. Although restoration of $100 million was considered, the committee retained the $75 million single-year appropriation in the Senate bill, with $25 million to become available immediately, and the remainder to be available on January 1, 1922. (The bill appropriated $5 million for FY 1922 and $10 million for FY 1923 for forest roads.) The Federal-State matching ratio remained 50-50, but the Secretary could increase the Federal share in public lands States.

Section 7 was altered to clarify that each State must "make provisions for State funds required... for construction, reconstruction, and maintenance of Federal-aid highways within the States, which funds shall be under the direct control of the State highway department." The committee also addressed concerns that Congressman Rayburn and others had expressed about the bill overriding State constitutions. States were given 3 years after passage of the Act to bring State laws into compliance.

Federal-aid highway funds would now be restricted to roads contained in a designated system of Federal-aid highways. The system would comprise up to 7 percent of all rural public roads in each State, but three-sevenths of the system must consist of roads that were "interstate in character." (Prior to designation of the 7-percent interstate system, the Secretary could approve projects "if he may reasonably anticipate that such projects will become a part of such system.") The roads that were "interstate in character" would have a right-of-way "of ample width and a wearing surface of an adequate width which shall not be less than eighteen feet, unless, in the opinion of the Secretary of Agriculture, it is rendered impracticable by physical conditions, excessive costs, probably traffic requirements, or legal obstacles."

During development of the bill, much debate had centered on whether to require the State highway agencies to use up to 60 percent or at least 60 percent of the Federal-aid highway funds on these interstate roads. The conferees settled on "not more than" 60 percent.

The legislation, like all previous versions, also addressed the President's concern about maintenance by strengthening the provisions of the 1916 Act. Section 2 of the new legislation redefined "maintenance" to mean "the constant making of needed repairs to preserve a smooth surfaced highway." Under Section 14, a State highway agency would receive a 90-day notice of a failure to maintain a Federal-aid highway. If the road was not "placed in proper condition of maintenance" during that period, the Secretary "shall proceed immediately to have such highway placed in a proper condition of maintenance and charge the cost thereof against the Federal funds allotted to such State, and shall refuse to approve any other project in such State" until the State reimbursed the Federal highway fund for the amount expended.

The legislation also redefined the term "State highway department" to be any department, commission, board, or official "having adequate powers and suitably equipped and organized to discharge to the satisfaction of the Secretary of Agriculture the duties herein required." (The Federal-Aid Road Act of 1916 had defined a "State highway department" as one that was empowered "to exercise the functions ordinarily exercised by a State highway department.")

The House approved the final bill on November 1, with the Senate acting on November 3. President Harding approved the Federal Highway Act of 1921 on November 9. Engineering News-Record pointed out that the signing "was accompanied by more than the usual ceremony, so that a motion picture could be made of the event which marks the establishment of an important precedent in the government's highway policy." The article described the ceremony:

There was a preliminary statement by W. C. Markham, of the Kansas Highway Commission, who has been acting as the legislative representative of the American Association of State Highway Officials throughout the consideration of the bill. His remarks were followed by a statement from the Secretary of Agriculture, who pointed out that the bill contains provisions for road maintenance, which should meet the full requirements specified by the President in his message to Congress. Senator Townsend then handed a specially wrought pen to the President who signed the engrossed bill. Others who participated in the exercises incident to the filming of the ceremony were John M. Parker, Governor of Louisiana; Thomas H. MacDonald, chief of the U.S. Bureau of Public Roads; the senators and representatives making up the conference committee which perfected the bill and Paul Wooton, Washington correspondent of Engineering News-Record.

An editorial in the same issue referred to the proposal to establish a commission to build national roads:

Perhaps the bitterest fight on any single feature of the new measure centered on the proposal of a federal highway commission to administer the work in place of the Secretary of Agriculture, through the U.S. Bureau of Public Roads. The commission plan was defeated and control will rest with the bureau which, during recent years, has demonstrated its ability to administer the work.

The passage of the bill, too, probably marks the end of the propaganda for a federal-built and maintained "national highway system." The federal-aid plan has come off victorious.98

Senator Townsend accepted the compromise established by the legislation. He called the legislation "the most progressive step ever taken by Congress in aid of good roads."99

Roy Chapin of the NACC issued a statement:

While the new highway act is not all that students of the question would like to see, the law as it now stands marks a distinct step forward in the evolution of our highway policy... [The] educational campaign waged by Senator Townsend to bring about a clearer appreciation of the importance of the highway problem, has been a successful one.100

Engineering News-Record praised "the assurance [the bill provides] of the adoption, by the states, of sounder policies of highway location, financing, construction and maintenance than existed in the past."

The western States were happy, as reflected in an article in Western Highways Builder that began:

A new era in the history of the West, as historians of the future will see it, was ushered in on November 9, when President Harding signed the Phipps-Dowell Federal Highway Act. From our present perspective, the tangible effect of the act will be merely to provide another Federal appropriation, $75,000,000, for road construction with certain concessions to the Western States in the amount of cooperation required on account of the vast extent of the public domain situated therein. But those of us who look ahead sufficiently can see the whole attitude of the Federal government toward the empire west of the Rockies changed in the next two or three decades.

The adoption of the graduated scale as a part of the Phipps-Dowell Bill constitutes nothing more or less than a tacit recognition of the Federal government's moral and financial obligations to the Public Land States. We cannot under estimate the immediate effect of the application of the graduated scale, but, beneficial as this may be, it is infinitesimal when considered in relation to its effect as a precedent by which the Federal government will be guided in other development work.101

The Department of Agriculture issued a statement summarizing the features of the 1921 Act. Regarding the 7-percent interstate system, the statement said:

The roads to be paid for by this money, if placed end to end, would encircle the earth and extend from New York to San Francisco on the second lap...102

AASHO held its 7th annual meeting in Omaha, Nebraska, on December 5-8, 1921. Chief MacDonald began his remarks to AASHO:

Again we meet in conference to measure critically our efforts of the year, and to plan more thoroughly, more understandingly, I trust, our future work together. With the deepest conviction I record my faith in the principles set forth in the Federal highway legislation founded on the certainty of the progress that is being made, and that will, in a larger way result from the new legislation.

He commented on designation of the interstate system:

The Act itself is remarkably comprehensive in defining and demanding a systematic plan, national in its extent, for future highway development. None of us has had, or is ever likely to have a more serious responsibility than the one imposed of selecting the Federal-aid system to be composed of the most important highways, articulating not only within the States, but with the systems of the contiguous States. Here is an opportunity to do a big, basic work, such as comes to few in the course of a life-time. The individual who fails to vision the importance of the task has no moral right to hold a position of authority in its performance.

He also put the bill in historical context:

From a conception of highways as a purely local institution, a viewpoint we held for over a half century of our national life, we progressed to an acceptance of their importance to the State. This attitude persisted for another quarter of a century, until through the universal use of the motor vehicle, the transportation crises of a great war, the repeated threats of extensive railroad tie-ups, and the results already secured with Federal aid, we have, in the short period of five years, visioned our more important highways extended and interconnected to form a vast network, serving local, State and national traffic, only limited by the confines of the United States. This is the conception which has been written into the law, and which, because of the projected effect of that which is done now into the future, lifts the importance of this requirement, that is, the selection of the Federal-aid system, above any other principle or duty therein announced.

Senator Phipps, in a letter regretting that he must decline an invitation to address ARBA during its annual meeting in Chicago in January, said he was proud that his name was connected with the measure, although he gave much of the credit to Senator Townsend, "one of the most stalwart champions of good roads for many years." Phipps recalled his thoughts while watching President Harding sign the bill:

As President Harding affixed his signature to the bill, it occurred to me that here was one measure concerning which there was no question, one legislative proposition which could not be called in any sense an experiment but which represented a forward step along sane and constructive lines.

There should be no difference of opinion as to the vital principles involved; there should be no sectionalism, no feeling of class discrimination; for, as a matter of fact, good roads inure to the benefit of all our people - the farm, the manufacturer, the local merchant and incidentally the tourist...

I believe that acting as a unit the people of the United States will establish at an early date a system of good roads second to none in the world.

A letter from President Harding, dated January 10, 1922, to ARBA stated:

There is now pretty nearly universal agreement that no single public improvement has done in recent years or will do in the coming years, more for the general good of the country, than the development of our highway system. The task is an enormous one, but better methods both in physical construction and in the relations of the community to highway development have been taking form in a most encouraging way.103

The Federal Highway Act of 1921 settled the long running dispute between advocates of long-distance roads and farm-to-market roads. The Federal Government would not build a system of national roads, as proposed by the AAA and other advocates. But it also would not devote its road funds to the county roads favored by farm advocates or let State and local officials use the funds on any road. That the legislation rejected the calls for Federal construction of national roads was a tribute to the efforts of MacDonald and others to make the Federal-aid highway program work, and their ability to find a compromise that both sides could consider a victory.

In addition, resolution of the dispute was a reflection of the times. Aside from the merits of the proposal, Congress was in a reactionary mood under Republican control following President Wilson's expansion of the Federal Government's activities before and during the Great War. As Russell put it:

The peace that was so little like its sloganed promise had spurred the high cost of living - as inflation was then known - had brought proliferating strikes, unemployed ex-soldiers, race riots, bombings by Reds and hysterical actions against them, a crime wave and prohibition. Wilson, a remote and silent invalid, inaccessible in his White House seclusion, became the subject of wild rumors. There was spreading dissatisfaction among ordinary, inarticulate Americans, the longing for a father figure to lead them out of the morass of the present to a prewar past that existed more serenely in the imagination than it ever had in fact.104

Congress was in no mood to approve Federal construction of national roads; the "golden mean" of the Federal Highway Act of 1921 maintained the balance between Federal and State responsibilities.

Contract Authority

On June 19, 1922, President Harding approved the Post Office Appropriation Act for 1923. With the economy rebounding, the legislation built on the foundation of the previous year's compromise by providing funds beyond the single year covered by the 1921 Act: $50 million for FY 1923, $65 million for FY 1924, and $75 million for FY 1925, plus $6.5 million a year for forest roads in FY 1924 and 1925.

The legislation included an unusual provision known as "contract authority," which replaced the statutory phrase "providing appropriation" with "there is hereby authorized to be appropriated." Although an appropriation of the authorized funds would still be needed, the Act stated that the Secretary of Agriculture's approval of a Federal-aid highway project "shall be deemed a contractual obligation of the Federal Government." America's Highways 1776-1976 explained that these changes "meant that the full sum of money authorized in the Act could be obligated before any legislation had been passed to provide liquidating cash - in the form of an appropriation - to pay the amounts claimed by the States.

In short, the Secretary's approval would commit or "obligate" the Federal Government to pay the Federal share even though Congress had not yet approved a separate annual appropriation act for the authorized Federal-aid funds for that fiscal year. With contract authority, the State highway agencies could plan multi-year programs with the assurance that they would be reimbursed for the Federal share.105

Even as the legislation enacted in 1921 and 1922 revitalized the Federal-aid highway program, the economy was rebounding from its post-war problems. "Fortunately," Gordon explained, "the depression of 1920-21 proved to be short-lived. New opportunities abounded in the 1920s and produced a decade of immense prosperity." He attributed the renewed prosperity to two new economic engines, electricity and the automobile. The spread of electricity was "one of the wonders of the twentieth century":

This astonishing rise in the use of electricity came about not only because more and more people were switching over to electric light, but also because more and more tasks were being powered by electricity rather than by other means.

Electricity affected individuals by providing efficient power to their homes, but the transformation of industry was just as significant:

The rapidly widening use of electricity also caused productivity to soar in the 1920s, increasing output per worker by 21.8 percent in that decade. This helped to push manufacturing output up by more than 90 percent.

As for the automobile, "It would be difficult to overestimate the impact of the automobile on the American economy by the 1920s," according to Gordon. The first commercial sale of an automobile in the United States had occurred in 1896. It was sold by the Duryea Brothers, the bicycle makers who had driven the country's first gasoline-powered automobile on September 21, 1893, in Springfield, Massachusetts. The industry had grown gradually until Henry Ford introduced the low-priced, efficient Model T in 1908. It was a car for the masses, not the wealthy who had been the market for most other automobile entrepreneurs, and a practical, efficient vehicle that was perfectly adapted to America's poor roads:

If the automobile was invented in Europe, the mass-produced automobile sold at a price the middle class could afford, was a purely American idea, an idea that transformed the American and world economies.

The automobile industry was America's largest, and the country's "seemingly insatiable national appetite for cars produced a decade of great industrial prosperity." While GNP increased by 59 percent from 1921 to 1929, GNP per capita rose by 42 percent. Personal income increased by more than 38 percent.

The growth of the industry had another side effect:

The automobile also greatly increased road building and paving, which became a major component of the construction industry and greatly stimulated quarrying and cement manufacture.106

The growing demand for automobiles coincided with the removal of the frustrating obstacles that had hindered the Nation's road builders during and after the war. Relations between Federal and State highway officials had become more of a partnership under MacDonald, who had resurrected the Federal-aid highway program from the grim days of 1919 when its end seemed near, and now worked with the States to designate the Federal-aid system.

Even before President Harding signed the Federal Highway Act of 1921, the BPR asked each State highway agency to certify its total highway mileage. Certified mileage totaled 2,859,575, so the 7-percent system was limited to 200,170 miles. The designation process included system maps drawn by the States, correlation with analyses by a BPR task force under E. W. James, and conferences between the BPR and the individual States as well as conferences with several States to ensure linkages at State borders. The process was completed on November 1, 1923, with publication of a BPR map of the Federal-Aid Highway System. America's Highways 1776-1976 summarized the results:

Because many States designated less than 7 percent of their total mileage on the Federal-aid system, the roads shown on this map totaled only 168,881 miles, or 5.9 percent of all U.S. roads. However, almost immediately, the system began growing and it has been growing ever since. By July 1923, Maryland, Delaware, and Rhode Island had completed their original systems to a satisfactory standard and had been granted increases by the Secretary.107
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  1. James, E. W., Letter to Frederic W. Cron of the FHWA, February/March 1967. The letter is available at https://www.fhwa.dot.gov/infrastructure/ewjames.cfm.
  2. Congressional Record, First Session, 67th Congress, Volume LXI-Part 5, p. 5102-5109. Senator Curtis served as Vice President under President Herbert Hoover (1929-1933).
  3. "Senate Passes Amended Townsend Bill," Engineering News-Record, August 25, 1921, p. 337.
  4. Congressional Record, p. 5065.
  5. Eldridge, M. O., "Improvement of Federal Aid Act Seen in New Legislation," American Motorist, October 1921, p. 18.
  6. "Federal Road Bill Delayed," Engineering News-Record, September 1, 1921, p. 345.
  7. "Confident of Road Bill's Passage," Engineering News-Record, September 8, 1921, p. 422.
  8. Congressional Record, p. 5989, 5992.
  9. "Conferees Agree on Federal-Aid Highway Bill," Engineering News-Record, October 13, 1921, p. 625.
  10. "President Signs $75,000,000 Federal-Aid Road Bill" (p. 831) and "Constructive Progress in New Highway Act" (p. 799), Engineering News-Record, November 17, 1921.
  11. Eldridge, M. O., "Many National Benefits Included in Passage of Federal Highway Act," American Motorist, December 1921, p. 24. Senator Townsend lost his bid for reelection in 1922. Chairman Dunn was not a candidate for reelection in 1922. As a result, neither Chairman was around to oversee the effect of the new legislation.
  12. "Chapin on the New Federal Aid Law," Good Roads, November 23, 1921, p. 239.
  13. Calcitrosus, "Western States Triumph in New Federal Highway Act," Western Highways Builder, December 1921, p. 14.
  14. "All States Will Receive Federal Aid for Highways," Highway Engineer and Contractor, December 1921, p. 27.
  15. Letters from Senator Phipps and President Harding to Colonel H. L. Bowlby, president, American Road Builders' Association, Good Roads, January 25, 1922, p. 50.
  16. Russell, p. 325.
  17. America's Highways 1776-1976, p. 206. Contract authority remains a vital part of the Federal-aid highway program today.
  18. Gordon, p. 296-301, 307.
  19. America's Highways 1776-1976, p. 108-109.
Updated: 01/31/2017
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