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

PART THREE: To Control The Levers (Page 3 of 6)

A New 2-Year Bill

As required by law, Secretary Wallace apportioned the $200 million authorized for FY 1939 on December 31, 1937 (i.e., by the January 1 before the start of the next fiscal year on July 1, 1938). On that same date, the Secretary wrote to each Governor to request that the States not submit any FY 1939 projects for his approval. After explaining that he had apportioned the funds to the States as required by law, the Secretary said:

I am directed by the President, however, to invite your attention to the recommendations regarding highway authorizations which he made in a special message to the Congress under date of November 27, 1937, in which message he recommended the cancellation of the 1939 authorizations.

While no action was taken on this recommendation during the special session of Congress, the President desires that Congress be afforded, prior to the approval of any projects under the 1939 apportionments, a further opportunity to give consideration to his recommendation for the cancellation of the 1939 authorizations. He will appreciate, therefore, your cooperation, and that of your State highway department, in deferring the submission of projects under the 1939 apportionment until this matter has received the further consideration of Congress.

The President followed up in his budget message to Congress on January 5, 1938. He called the attention of the public to "the fact that a very large proportion of our total expenditures represent fixed charges which cannot be reduced by Executive action." He cited several examples before turning to public expenditures for capital improvements, such as highways, river and harbor projects, and other public works. "All of these items can be contracted or expanded to conform with the contraction or expansion of Government income." He said:

This year I recommend that such items be curtailed. First, because expected Government income will be less, and second, because it has been amply demonstrated that they do not provide as much work as do other methods of taking care of the unemployed.

For example, we have appropriated as Federal aid to new permanent State highways almost $1,500,000,000 during the past 5 years; and an equal sum has been spent during the same period for constructing, repairing, and improving roads and streets by Federal agencies administering unemployment relief. These vast expenditures have put our highway systems far in advance of what would have been normal expansion. I do not propose eliminating Federal aid to highways, but I do ask that such aid be restored to approximately the predepression figures.

We have a great accumulation of unliquidated "matching" authorizations for aid to States running into the year 1940, but the States also should be encouraged to bring their highway budgets back to a more normal figure. Therefore I hope that the Congress will start at this session to cut down the actual appropriations used to match State funds.

The Committee on Roads held 3 weeks of hearings, during which each witness was asked to comment on the proposal to cut Federal authorizations for road building. The consensus was that the witnesses were willing to take a cut, but only if all other Federal activities were cut by the same amount. Briefer Senate hearings resulted in the same answer.

Given that congressional agreement with the President's request to cut the 1939 authorizations was unlikely, Secretary Wallace wrote to the Governors again on March 18 to advise them to submit projects covering the 1939 funds. This action followed instructions from the President to the Secretary. The Secretary's brief letter summarized the circumstances leading to the earlier request not to submit projects, then explained:

The President now feels that you should not be asked to further delay the submission of road-building projects of your State, and accordingly I suggest that such projects be now submitted in the order of their priority.

The cooperation manifested by you and your State highway department in this matter is greatly appreciated.

The House Committee on Roads approved its bill unanimously in April and forwarded it for consideration by the full House on April 29. Cartwright went on the National Broadcasting Company's radio network to explain why a new authorization bill was needed. The primary reason, he explained, was timely planning:

The imperative need for consideration of the bill now lies in the fact that 44 of the State legislatures will meet in regular session in 1939. Forty of these assemble only biennially. The State highway budgets must be prepared during the fall months prior to the beginning of these sessions early next year. The States should, and must, if they are to act with certainty, have knowledge of definite approval by Congress of this bill in order to make provision for their participation in the continuing highway construction program... The best results cannot be obtained through measures affecting practically every community in the United States if the actions required are forced into an emergency status and characterized by lack of thoroughness or by inadequate preparation.

He stressed that motor vehicle users paid $360 million from manufacturers' excise taxes in 1937, compared with $238 million a year in Federal-aid highway funds. That left a balance of $122 million contributed by motorists that goes for other purposes. Moreover, he said, the industry and business of highway transportation employed 6 million people in 1936:

It is well established that between 80 and 85 percent of the total expenditure in the construction of highways goes to labor. It should also be borne in mind that in handling the Federal funds for roads the State highway departments have, in cooperation with the Bureau of Public Roads, required the contractors to take, whenever possible, the employees for their work from the unemployment rolls. Between 85 and 90 percent of the people hired for these purposes are taken from the rolls of the unemployed.166

He ended by expressing the earnest hope that the House would soon approve the bill.

The House approved the bill on May 6 with a unanimous vote. The bill authorized the same overall amount as for 1938 and 1939, namely $238 million a year. The bill was referred to the Senate and assigned to Senator Hayden's subcommittee.

Chairman Hayden introduced a similar bill with the amounts left blank. He and Senator McKellar, who had become Chairman of the Committee on Post Offices and Post Roads at the start of the 73rd Congress on March 9, 1933, intended to talk with the President before proceeding, but they informally let MacDonald know that they were willing to reduce the House amount by about 40 percent.

The President had not abandoned his goal of reducing road expenditures. D. W. Bell, Acting Director of the Bureau of the Budget, sent a memorandum to the President on May 14 seeking guidance on how to proceed. Bell described the House action, then said:

I am advised that Senator Hayden has discussed the matter with you and an agreement reached as to the total amounts to be authorized for the fiscal years 1940 and 1941.

Bell pointed out that Congress had taken no action on the President's request to eliminate the contract authority provision of existing law. Under the House and Senate bills, "the new roads authorization bill, if enacted, will operate in accordance with the existing law." Bell asked the President for "your present attitude with respect to the matters above mentioned."

President Roosevelt replied on May 16:

  1. I think the House amendment can and will be drastically reduced in the Senate if you talk with McKellar and Hayden. Use every effort to get the total as low as possible.
  2. My statement of November 27, 1937 in regard to eliminating contractual obligations by the Secretary of Agriculture still stands. Push for its enactment.

Consistent with Senator Hayden's agreement with the President, the Senate bill made drastic cuts in the amounts contained in the House bill. Authorizations amounted to $128.5 million for FY 1940 and $186 million for FY 1941. The Senate passed the bill on May 16, the same day the President expressed his views to Bell, without a recorded vote.

The Conference Committee called to resolve differences between the two bills completed its work on May 31. The House and Senate compromised on FY 1940 ($100 million for the Federal-aid system instead of the Senate's $75 million and the House's $125 million; and $15 million for secondary roads instead of the Senate's $10 million and the House's $25 million), but retained the Senate amounts for FY 1941. In all, authorizations totaled $158.5 million for FY 1940 and $191 million for FY 1941, compared with $238 million for each of the previous 2 years. The final bill retained the standard procedures of the Federal-aid highway program, including contract authority. The President signed the Federal-Aid Highway Act of 1938 on June 8.

Engineering News-Record, in discussing passage of the bill, explained how the compromise had been reached:

The final bill is a compromise between the economy recommendations of President Roosevelt and the desire of many congressmen, particularly in the House, to continue road expenditures at an undiminished rate. It was accepted only after assurances by the Bureau of Public Roads that on Jan. 1, 1939 (when the Secretary of Agriculture will apportion the new funds to the various states) there will be available a [total] carryover [in all categories] of $150,000,000 which will be available to supplement the reduced amounts authorized. In addition, a large part of the new relief program appropriation will be used in road and street construction.

While addressing AASHO's annual meeting in 1938, Cartwright recalled the President's budget message and the fact that the President based the proposed Federal budget for FY 1939 on the assumption that Congress would cancel the year's authorization, then added:

On January 6 of this year, I took the bull by the horns and introduced a bill, H.R. 8838, to provide for the continuation of Federal highway aid without any reductions through the fiscal years 1940 and 1941.

That left it squarely up to the Congress as to whether or not Federal support for orderly highway growth would be continued in the United States. [Italics in original]168

Funding authorized by the Federal-Aid Highway Act of 1938 was reduced, he acknowledged. "The principles of the legislation, however, were kept intact... This was an important victory for roads!"

Planning for the Future

Section 13 of the Act was directed at the ability of the Nation's interstate highways to handle the growing traffic:

The Chief of the Bureau of Public Roads is hereby directed to investigate and make a report of his findings and recommend to the Congress not later than February 1, 1939, with respect to the feasibility of building, and cost of, superhighways not exceeding three in number, running in a general direction from the eastern to the western portion of the United States, and not exceeding three in number, running in a general direction from the northern to the southern portion of the United States, including the feasibility of a toll system on such roads.

This provision emerged from an initiative that President Roosevelt supported even as he attempted to curtail highway expenditures and alter the Federal-aid procedures.

The paving of many of the Nation's main roads had been completed, including U.S. 30 (November 1935), U.S. 40 (July 1938), U.S. 61 (February 1939), and U.S. 66 (May 1938). The BPR's annual report for FY 1938 noted the improvement of the main roads:

The system of main highways in the United States is by far the most extensive of any in the world. Only the most out-of-the-way places cannot now be reached over a surfaced road. Many miles of main highways are broad, direct routes over which vehicles can travel continuously at the touring speed selected by the driver without the need for slowing down because of sharp curves, steep grades, or other obstacles and there is frequent opportunity to pass overtaken vehicles.

The next stage, modernization of the main highways, had emerged as the most important goal of the Federal-aid highway program:

Many of our most used and important roads are among those that must now be classed as very inadequately improved. These are the roads that were first recognized as of outstanding importance and as such were first improved with surfaces of the highest type designed according to the standards of early road builders. There was general acceptance of these standards as sufficiently advanced - in fact, there was much opposition on the grounds that they were too advanced. The great increase in highway use and the recent marked increase in vehicle speed have forced the adoption of much higher standards.

The report cited the need for widening, longer sight distances, and reduced curvature as among the most pressing needs. In heavily populated areas, divided four-lane highways, although expensive, were needed. "It is evident, therefore, that the provision of facilities of this general class is lagging very far behind actual needs."169

The BPR had received many proposals for addressing the deficiencies, as the annual report explained:

There has been wide public interest in the creation of a system of multiple-lane highways, built according to the highest standards of grade and alinement, with opposing traffic separated by a center parkway, bypassing all cities, with structures separating streams of traffic at all highway and rail crossings. The large volumes of traffic that flow between densely populated areas, when not too widely separated, in many instances appear to justify the high cost of such improvement.170

President Roosevelt was a supporter of such highways and, more specifically, a network of toll superhighways. This interest was reflected early in his Administration. On Sunday evening, May 7, 1933, the President delivered his second radio address to the Nation, the first having been delivered shortly after his inauguration. The purpose of the second address was "to tell you what we have been doing and what we are planning to do." When he had taken office, the country was "facing serious problems. The country was dying by inches." More "appeals from Washington for confidence and the mere lending of more money to shaky institutions could not stop that downward course." He summarized the legislation Congress had passed to create jobs for the unemployed, and indicated he planned to ask for legislation to support more public works, "thus stimulating directly and indirectly the employment of many others in well-considered projects."171

On May 9, 1933, his wife Eleanor's uncle, David Gray, wrote the new President regarding his address to the Nation. The letter also discussed "your idea of building toll roads through unimproved country as part of the public works program." Gray suggested several routes for the Atlantic Coast region that would be "quickly self-liquidating." He told the President:

I believe your scheme is sound and practicable, assuming of course that the new links were skillfully devised and engineered. In fact I think you have hit upon the logical scheme for self liquidating public works. When the federal government should do this with its own organization or lend the money to localities retaining the right of supervision and a lien on the receipts is a detail.

Although the President had not mentioned toll roads in his remarks, he replied on May 19 that Gray's "mind works along with mine":

I am very keen about the idea of toll roads. The chief problem is to get surveys and land condemnation put through inside of the usual two or three years and get the work started.172

This basic idea remained with him throughout his involvement with the future Interstate System.

On December 9, 1934, the President dictated a memorandum regarding his suggestions for transcontinental toll roads. He described the routes, specified that they should avoid all cities, and stated the sequence for building the roads. The memorandum began:

The President dictated to me the following memorandum which were suggestions for transcontinental toll roads. He wants a strip two miles wide starting from Worcester, Mass. to Danbury, Conn., avoiding all towns.

From Danbury south it should connect up with the Westchester County park system.

From Danbury west it should go from Putnam County, connecting with Bear Mountain Bridge. West of the Hudson it should start at the Western border of Bear Mountain Park to the Delaware Water Gap. 20 miles east of the Gap it should branch off into two main highways - one to Florida and one to San Francisco.

The San Francisco highway should run west along the New York-Pennsylvania line south of Erie, Pa., south of Cleveland and there in direct line to point half way between Kansas City and Omaha, avoiding all cities. From there west two strip highway to San Francisco.

From northern New Jersey start four strip highway south running east of Harrisburg, west of Baltimore, west of Washington, west of Richmond, west of Charleston and Savanah [sic] - from Washington south two or three strip road.

Another road running north and south in the Mississippi Valley on the east side of the valley from somewhere in Illinois roughly to New Orleans.

Another road not to be undertaken yet. From western North Dakota to eastern Montana to El Paso or as a substitute following eastern foothills of the main chain of the Rockies from Billings to Denver and from Denver to Demming [sic], New Mexico.

Road starting half way between Charleston and Savanah [sic] running west through Montgomery, Alabama, Baton Rouge and thence roughly to Los Angeles and roughly 100 miles north of the Mexican border.

From north of Chicago to Twin Cities and thence to Seattle running roughly 50 miles south of the Canadian border.

Road from Canadian border to Mexico running roughly 75 to 100 miles inland from the Pacific Ocean.

Order of preference on which these roads should be planned and built.

  1. Northeast stretch.
  2. New York to Washington.
  3. South of Cleveland.
  4. A road from Chicago either running northwest or south.173

He called a meeting to discuss the idea with Secretary of the Interior Harold L. Ickes, Treasury Secretary Morgenthau, Works Progress Administrator Hopkins, Admiral Christian Joy Peoples, Director of the Treasury Department's Procurement Division, and MacDonald. Ickes' diary for December 13, 1934, mentioned the meeting:

I went over to the White House this afternoon at two-thirty to a conference called by the President on the proposed transcontinental highway... At intervals during the last year I have suggested the possibility of such a highway to the President. He has always been rather taken with the idea, but it has now really struck his imagination and he is giving very serious thought to it. Recently at one of our conferences to consider a program of public works for next year, the President outlined a route for a transcontinental highway from east to west and routes for two or three north and south highways. The meeting today was to consider these routes as outlined on a map of the United States and to consider costs, etc.

Throughout the 1930s, private individuals and Members of Congress conceived superhighway proposals. Senator Robert J. Bulkley (D-Oh.) introduced one of the most prominent proposals. His bill, S. 3428, called for creation of a United States Highway Corporation to build three transcontinental and seven north-south superhighways, linked by spurs and connectors. The key feature of Senator Bulkley's plan was that it would be self-liquidating. The corporation would issue $2 billion in bonds to get the work started (eventually, it would issue between $6 and $8 billion). Bonds would be retired with revenue from two sources. First, tolls would be charged. Second, the corporation would build the superhighways on a 600-foot wide strip of land, with the excess land leased or sold to concessionaires as a source of revenue.

The "New York State method" of condemnation, employed by the State's great bridge, park, and road builder, Robert Moses, would be used to acquire the land. The corporation would condemn the land, take it over, and begin work immediately. Payment for the land would be agreed to later either through negotiation or the courts.

In early February 1938, before introducing the bill, Bulkley met with the President. The New York Times described the meeting in a front page article on February 7:

$8,000,000,000 Highway Project
Wins Encouragement of Roosevelt

Bulkley Shapes Bill for East-West and North-
South Transcontinental Toll Spans -
Favored if "Pump-Priming" Is Needed

Washington, Feb. 6. - Should President Roosevelt decide to spur recovery by some form of "pump-priming," as some of his close advisers are urging, he may support legislation for the construction of a transcontinental system of self-liquidating super-highways.

The movement for such legislation is gaining popularity among members of Congress, some of whom are searching for an appropriate form of government construction to benefit their constituents in an election year, and the plan is said to have support in the War Department, the Bureau of Public Roads, and from at least one member of the Board of Governors of the Federal Reserve System...

The President was reported to have told the Senator that he had been thinking of a similar plan for some time, and to have told him to draft a bill.

On February 7, the President met with what The New York Times referred to as 31 "left-wing members" of the House to discuss applying a self-liquidation test to a permanent spending program:

Mr. Roosevelt's comment on a long-range construction program was ascribed to the following legislative proposal:

"Establishment on a sound, permanent basis of a public works program capable of absorbing all able-bodied unemployed workers in periods of business recession or depression. This program should aim among other things at the meeting of major national social needs such as elimination of the slum and should include the planned, full development and careful conservation of all our national resources..."

According to participants, the President cited toll bridges and highways, rural electrification, and other potential revenue producers as meritorious projects. By contrast, he did not see construction of schools and other public buildings, which could not be built on a self-liquidating basis, as appropriate for re-employment objectives. The President also cited Senator Bulkley's plan as an example of a program that could be employed during a slump in employment and halted when employment was normal. The New York Times explained one of the related concepts the President discussed:

In connection with his discussion of a program of capital improvements, Mr. Roosevelt mentioned a government-constructed six-lane highway outside London.

He told how the British Government had condemned a right-of-way half a mile wide, had sold highway frontage for business purposes and small trade tracts behind at $500 an acre. In seven years, according to the story, the project had returned to the government two-thirds of the initial expenditures.

The President was reported to have said that this type of investment was particularly appealing because nearly all other sound projects for employment had been tried and exhausted. It was also consistent with his efforts to balance the budget because expenditures would be returned through the self-liquidating mechanism.174

The President also cited the concept of excess condemnation for self-liquidating transcontinental highways during a meeting on February 8 with Mayors Edward J. Kelly of Chicago, Richard W. Reading of Detroit, Harold H. Burton of Cleveland, and B. F. Dickmann of St. Louis. According to The New York Times:

President Roosevelt is understood to have emphasized again in his talk with the Mayors the desirability of working out a long-range program of self-liquidating public works of the type mentioned to the thirty-one left-wing Representatives who discussed the problem with him yesterday.

The President was reported after today's conference to have spoken enthusiastically of a transcontinental highway project calling for the construction over many years of two East-West highways and another traversing the country from North to South. Workers on the projects might be required to send home a certain amount of their earnings, as required under the CCC program.

Mr. Roosevelt is understood to have explained to the Mayors the technicalities of the "excess condemnation" method, which he outlined to the members of Congress... It was reiterated by the President at his press conference that more attention should be given by States and municipalities to the possibilities offered by self-liquidating projects, so that money spent for relief would be eventually returned to the Treasury.

It was apparent, however, that in discussing a long-range program of self-liquidating public works, the President has no intention of taking care of the immediate problem of relief in that manner.175

An article in The Christian Science Monitor on February 14, 1938, described the Bulkley concept based on a discussion with the Senator:

Sites would be leased [on the excess right-of-way] for hotels, for eating establishments, great and humble, for gasoline and service stations and garages, and for many other purposes which would be rendered desirable by the proximity of such a highway... Every effort would be made to keep the highways attractive and interesting, with a generous park strip separating traffic into two-way streets. Each direction would have six traffic lanes, according to the plan...

Of course, much of the land would be under cultivation, or in forests or pasture. Prices would be graded according to the use of the land, on an entirely business basis.

The article stressed the President's "serious" interest in the proposal, indicating that, "The success of a similar highway between London and Brighton in England, on which President Roosevelt had recently had a report, has stirred up much of the present interest here."176

In an interview with Charles M. Upham, Engineer-Director of ARBA, Senator Bulkley explained that the tolls would not be in the nature of a tax. "They will be in the nature of payment for value received." For example, he cited savings in gas and oil from reduced travel time and less stop-and-start driving. As illustrated by Germany's autobahn network, Senator Bulkley anticipated savings by cutting down the number of accidents. National defense was another consideration, because the Bulkley superhighways would "facilitate transportation of men and materials and would also be particularly important if it became necessary to evacuate certain areas." Of course, the project would increase employment - at first, directly on the roads, then among suppliers, and finally in the general economy.177

The plan did spark some cynicism. The Monitor noted:

Senator Bulkley is facing a stiff re-election fight, and much roadbuilding material and machinery - steel, and so on - is fabricated in Ohio... The scheme is thought likely to be popular. Both as a vote-getting and as an economic stimulus.178
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  1. Radio Address of Hon. Wilburn Cartwright, of Oklahoma, on April 29, 1939, Reprinted in Extension of Remarks by Hon. Sam C. Massingale of Oklahoma, U.S. House of Representatives, May 2, 1938, "Why It Is Necessary to Make a New Authorization for Roads at This Session of Congress," Congressional Record - Appendix, May 3, 1938, p. 8242-8243.
  2. FDR Library, OF 1e, Box 11.
  3. Cartwright, Wilburn, "Future Roads and Federal Road Legislation," American Highways, January 1939, p. 7.
  4. MacDonald, Thomas H., Report of the Chief of the Bureau of Public Roads, 1938, p. 2-3.
  5. Annual Report, 1938, p. 5.
  6. "The President's Address," The New York Times, May 8, 1933.
  7. FDR Library, Highways, P.P.F. 454.
  8. FDR Library, File Highways, P.P.F. 455.
  9. Belair, Jr., Felix, "Roosevelt Favors Only Public Works That Pay Own Way," The New York Times, February 8, 1938.
  10. Belair, Jr., Felix, "President to Ask More Relief Funds Before Week Ends," The New York Times, February 9, 1938.
  11. "Super-Highways: Help for Jobless Seen in Projects," The Christian Science Monitor, February 14, 1938.
  12. Upham, Charles M., "System of Super Highways Being Planned by the Federal Government," Mississippi Highways April 1938, p. 26
  13. Despite the highway plan, Senator Bulkley lost his bid for reelection in 1938. He returned to Cleveland to resume his law practice.
Updated: 06/27/2017
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