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G 
 
THE PUBLIC WORKS ADMINISTRATION 
 
 Illinois Studies in the Social Sciences 
 Vol. XXIII, No. 3 
 
BOARD OF EDITORS 
 
 Ernest L. Bogart 
 John A. Fairlie 
 Albert H. Lybyer 
 
THE PUBLIC WORKS ADMINISTRATION 
 
 BY 
 
 Jack F. Isakoff 
 
 THE UNIVERSITY OF ILLINOIS PRESS 
 URBANA 
 1938 
 
1000—11-38—14436 
 
 UNIVERSITY 
 OF ILLINOIS 
 PRESS Si 
 
PREFACE 
 
 This study was undertaken in an attempt to analyze the functioning 
 of the Federal Emergency Administration of Public Works, more com- 
 monly known as the Public Works Administration. The writer has been 
 interested chiefly in the organization and policies of the establishment as 
 a problem in public administration, and he has therefore not considered 
 the broader economic, political, and legal problems except as they condi- 
 tioned the actual administration of the establishment's functions. The 
 reader will not, therefore, find in these pages an analysis of the function 
 of public works expenditures in the economic order. 
 
 Inasmuch as the statutes governing the P.W.A. have been few and 
 general in their provisions, and since no periodic reports have been 
 issued by the establishment, the writer has had to rely on a considerable 
 variety of sources for information concerning the activities of the 
 P.W.A. These include executive orders issued by the President, the 
 opinions of the Attorney General and of the Comptroller General, the 
 hearings before committees of Congress, and the publications of the 
 P.W.A. Considerable use has been made of administrative orders, press 
 releases, and similar materials generally issued in mimeographed form, as 
 well as of the rules and regulations available in printed form. Some use 
 has also been made of non-governmental publications. These sources 
 have been supplemented by personal interviews and by correspondence 
 with officials of the establishment. 
 
 The manuscript of this study was completed early in 1938. Since 
 then, a new public works program under the supervision of the Public 
 Works Administration has been inaugurated. It has not been practicable 
 to incorporate in the text the changes effected as part of this new pro- 
 gram. However, a summary of the present statutory arrangements has 
 been inserted as a footnote on page 28. 
 
 The writer wishes to acknowledge his great obligation to Professor 
 John A. Fairlie, of the Department of Political Science at the University 
 of Illinois, who suggested this study and who offered valuable criticism 
 throughout its preparation. He is indebted also to Professors Clarence 
 A. Berdahl and Charles M. Kneier, of the same department, for many 
 helpful suggestions. 
 
 Acknowledgment is due also to those persons connected with the 
 Public Works Administration who have answered the writer's inquiries, 
 and who have assisted him in obtaining information not readily accessible. 
 
 Springfield, Illinois J. F. I. 
 
 5 
 
Digitized by the Internet Archive 
 in 2014 
 
 https://archive.org/details/publicworksadminOOisak 
 
CONTENTS 
 
 I. Introductory Considerations 
 
 Public Works Proposals, 1918-1932. — The Public Works Title of the 
 Recovery Act. — The Emergency Relief Appropriation Acts. 
 
 9 
 
 II. General Organization and Functions 
 
 29 
 
 Transitions in the Organization of the P.W.A. — The Special Board 
 for Public Works. — The Administrator and Assistant Administrator. — 
 Staff Divisionsof the Administrator'sOffice. — The Executive Officer. — 
 The Primary Field Offices. — The Examining Divisions. — The Boards 
 of Review. — The Housing Division. — Project Supervising Agencies. — 
 The Planning Agencies. — Functional Organization and Overhead 
 Control. 
 
 III. Some Administrative Problems 56 
 
 Presidential and Congressional Control. — Corporate Agencies. — 
 Personnel. — National Planning. — The Consolidation of Public Works 
 Agencies. 
 
 IV. Finances and Allotments 79 
 
 The Size of the P.W.A. Program. — Allotments to Agencies of 
 the National Government. — Grants and Loans to Non-Federal 
 Agencies. — The $400,000,000 Highway Fund. 
 
 V. Project and Construction Policies 106 
 
 Project Preferences. — Power Projects. — Construction Conditions. — 
 Housing Under the P.W.A. 
 
 VI. Summary and Conclusions 136 
 
 The Objectives of the P.W.A. — Structure of the Establishment. — 
 Personnel. — The Nature of P.W.A. Activity. — Intergovernmental 
 Cooperation. — Direct Federal Action. — The Housing Program. — 
 The Future of the P.W.A. 
 
 Bibliography 
 
 155 
 
Chapter I 
 
 INTRODUCTORY CONSIDERATIONS 
 
 The Federal Emergency Administration of Public Works, more com- 
 monly termed the Public Works Administration, or, after the fashion of 
 the times, the P.W.A., came into existence on June 16, 1933. The execu- 
 tive order creating the organization was issued under the authority of 
 the National Industrial Recovery Act. As an agency charged with carry- 
 ing out a significant portion of the recovery program, the Public Works 
 Administration presents an opportunity for an examination of the prob- 
 lems involved in administering a major function newly adopted by the 
 government. 
 
 The Public Works Administration was not, however, created as an 
 experiment in public administration. Rather, the experiment was one in 
 national planning and national spending. For that reason, any complete 
 analysis must, to an appreciable extent, be conditioned by questions of 
 political policy and of economic theory. In this study it is not proposed 
 to examine these broad questions of policy and theory except as they 
 have played their part in bringing about the creation of the agency under 
 observation, and as they have affected the functioning of that agency. 
 The present study is primarily concerned with questions of administrative 
 organization and procedure. 
 
 Prior to the World War, the phrase "public works program" meant 
 little to the people generally. What discussion there was concerning pub- 
 lic works dealt chiefly with such topics as the location of river and 
 harbor improvements and of public buildings, and the desirability of 
 particular road and irrigation projects. Each community was interested 
 in obtaining its share of the national funds that were expended for such 
 purposes. Nor was there much said about the absence of a national 
 public works department and the consequent scattering of construction 
 functions among different agencies. There is no evidence that events 
 and suggestions in those years had more than a very remote bearing upon 
 the movement which ultimately resulted in the creation of the Public 
 Works Administration. 
 
 It was in the years immediately following the World War that other 
 aspects of what may be called the public works problem first came to the 
 fore. This was largely a result of efforts to analyze the phenomena of 
 business cycles and to suggest measures calculated to diminish or prevent 
 such fluctuations. It came to be accepted that the business cycle consists 
 of a constant recurrence of waves of prosperity and depression more 
 or less evenly spaced, and that, therefore, the down curve could be anti- 
 cipated and either be prevented from actually occurring or its effects be 
 
 9 
 
[O 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 partly alleviated. There were many persons who argued that such results 
 might be achieved through an adequately planned program of public 
 works construction. 
 
 No generally accepted body of theory exists as to the precise results 
 which may be achieved through such a program, but it is possible to 
 isolate several points of view. 1 It is generally thought to be necessary to 
 delay governmental construction activities in prosperous times and to 
 expedite such activities during times of depression. This may involve the 
 building up of a "prosperity reserve" to provide funds when needed, or 
 the government may, in the emergency, obtain the necessary funds 
 through the use of its borrowing power. At any rate, it is argued, the 
 government must place itself in a position to stimulate the employment 
 of labor and the consumption of materials in time of need. In that 
 manner it can to an appreciable extent alleviate the defects, inherent or 
 otherwise, in the existing system of private enterprise. 
 
 The necessity of planning for such a public works program is gen- 
 erally insisted upon. 2 Advance planning is said to be necessary not only 
 in order that useful and carefully designed public works may be under- 
 taken, but also in order that all possible difficulties may be anticipated. 
 Thus, a public works program once decided upon could be begun without 
 delay and be carried on without costly errors. There are those, however, 
 who insist that in the absence of advance planning for depression con- 
 tingencies, a public works program should then be inaugurated on an 
 emergency basis. 3 They see in such action distinct advantages over a dole 
 or direct relief. Furthermore, there is also a possibility of "priming the 
 pump of industry" by creating a demand for construction materials and 
 for the services of persons engaged in the building trades. 
 
 It was largely the efforts of those who subscribed to such tenets 
 that finally brought about the creation of the Public Works Administra- 
 tion. From time to time, however, the establishment of a national agency 
 concerned solely with public works gained support from those seeking the 
 consolidation of the construction activities of the national government in 
 the interests of economy and efficiency. It is now proposed to notice 
 some of the more important suggestions made in recent years. These 
 proposals, as will be seen, preclude the possibility of viewing the P.W.A. 
 as an agency which came into existence full grown, without relation to 
 the more general aspects of governmental policy and administration. 
 
 'See A. D. Gayer, Public Works in Prosperity and Depression (1935), chap, xiv, and the 
 authorities therein cited. See also H. W. Laidler, A Program for Modern America (1936), 
 chap. vii. An elaborate discussion may be found in O. T. Mallery, "The Long-Range Planning 
 of Public Works," chap, xiv in Business Cycles and Unemployment (1923), report of the Na- 
 tional Bureau of Economic Research. 
 
 President's Conference on Unemployment, Report of the Committee on Recent Economic 
 Changes, Planning and Control of Public Works, Including the report of Leo Wolman (1930), 
 pp. xxiv-xxvi. 
 
 3 Public works projects undertaken on such a basis include the internal improvements after 
 the War of 1812 and the river and harbor improvements following the Civil War. 
 
INTRODUCTORY CONSIDERATIONS 
 
 I I 
 
 Public Works Proposals, 1918-1932 
 
 Following the armistice halting the World War, the War Labor 
 Policies Board anticipated widespread unemployment as a consequence 
 of demobilization. 4 Its endeavors to formulate a program for the stimula- 
 tion of public works construction were, however, brought to an end by the 
 dissolution of the board. The war department itself discontinued similar 
 efforts when, by June, 1919, it became evident that the business cycle 
 was on the eve of a post-war upturn. 
 
 In Congress, Senator Kenyon of Iowa introduced a bill designed 
 to make flexible expansion and contraction of governmental public works 
 activities a permanent policy. 5 He proposed the creation of a United 
 States Emergency Public Works Board to cooperate with the states and 
 their political subdivisions in carrying out the purposes of the act. An 
 appropriation of $100,000,000 was suggested. A committee held hearings 
 on the bill, but failed to report it favorably. 
 
 The next significant development was the calling of a conference on 
 unemployment by President Harding in 1921. The conference urged that 
 the national government adopt the policy of expanding its expenditures 
 for public works during periods of depression and of reducing such ex- 
 penditures in periods of active business. Such a course, it was believed, 
 while only in the nature of relief from existing evils, would tend towards 
 the more even progress of business. 6 It seems that this proposal found 
 concrete form in the postponement during 1923 of such national public 
 works as were not deemed immediately necessary. 7 
 
 Senator Kenyon continued his efforts to secure the adoption of such 
 policies in a more definite form. One of his bills secured a favorable 
 committee report, but, after it reached the floor of the Senate, a heated 
 debate took place, and the bill was finally sent back to committee where 
 it died. 8 The opposition centered chiefly on the proposal to give the 
 President extensive powers with respect to retarding or expediting 
 construction. No new administrative agency was provided for in the bill. 
 The President would simply have been authorized to call upon the regular 
 agencies of the national government to prepare the necessary plans. 
 
 In the prosperous years that followed, the chief support for the cre- 
 ation of a public works establishment came from those who were con- 
 cerned with the prevailing lack of coordination in the construction 
 activities of the government. The movement for a general reorganization 
 of the administrative branch of the government, begun under President 
 
 4 MaIlery, op. cit., p. 240. 
 
 5 See the Hearings before the Senate Committee on Education and Labor on S. 5397, 
 Emergency Public Works Board, 65th Congress, 3d Session (19 19). 
 
 'Report of the President's Conference on Unemployment (Government Printing Office, 
 1921), part IV, particularly pp. 96-98. 
 
 'B. M. Stewart, Unemployment Benefits in the United States (1930), pp. 57-58. 
 
 8 S. 2749, 67th Congress, 2d Session. See Congressional Record, vol. 62, pp. 2587-2597, 
 2646-2658 (February 15 and 16, 1922). 
 
12 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 Taft, was now revived. President Harding and his cabinet recommended 
 to Congress that the Department of the Interior be given the duty of 
 constructing and maintaining national public works. A joint committee 
 on reorganization, consisting of three Senators, three Representatives, and 
 one person appointed by the President, presented a similar plan. 9 The 
 committee proposed to create in the Department of the Interior two sub- 
 divisions, one charged with administering the public domain and the other 
 with the administration of public engineering works. This was also the 
 scheme presented by W. F. Willoughby in his volume on administrative 
 reorganization. 10 Nothing came of these proposals. 
 
 During 1925 a bill designed to bring about a degree of public works 
 planning was introduced in the House of Representatives. It was sug- 
 gested that by properly timing the construction of public buildings the 
 government might assist in bringing about a stabilization of employment. 11 
 In 1926 an amendment to the public buildings bill was introduced with 
 the same purpose in mind. The amendment directed the Secretary of 
 the Treasury to consider the possible stabilizing effects of governmental 
 construction, and to report to Congress whenever the volume of con- 
 struction during any period fell more than one-third below the volume 
 of the corresponding period of 1925. 12 Neither of these suggestions 
 was adopted. 
 
 A more ambitious measure was introduced by Senator Jones of 
 Washington early in 1928. 13 His bill proposed to create a "prosperity 
 reserve" in order to stabilize industry and employment by expanding 
 the construction of public works during periods of business depression. 
 An appropriation of $150,000,000 was suggested for road building, river 
 and harbor works, flood control, and public building construction. No 
 funds were actually to be appropriated until the President communicated 
 to Congress his findings that a substantial decline had occurred in the 
 value of contracts awarded for construction work in the United States. 
 The bill failed to pass the Senate. 
 
 Senator Robert F. Wagner of New York began his efforts for the 
 adoption of a planned public works program at least as early as 1928. He 
 sponsored bills providing for a count of the unemployed as part of the 
 regular decennial censuses, for the organization of a national employment 
 agency system, and for the creation of a Federal Employment Stabiliza- 
 tion Board. These three measures were, in substance, enacted into law in 
 
 9 Both schemes may be found in House Document No. 356, 68th Congress, 1st Session, 
 serial 8274 (1924). 
 
 w The Reorganization of the Administrative Branch of the National Government (1923), 
 chap. x. 
 
 "International Labour Office, Unemployment and Public Works (1931), p. 55- 
 "Stewart, op. cit^ p. 58. 
 
 ,3 S. 2475, 70th Congress, 1st Session. See Gayer, op. ext., p. 12. The provisions of the 
 bill as amended by the Senate may conveniently be found in Wolman, op. cit., p. 177. 
 
INTRODUCTORY CONSIDERATIONS 
 
 13 
 
 1929, 1933, and 1931 respectively. 14 The Federal Employment Stabiliza- 
 tion Board was composed of the Secretaries of the Treasury, Commerce, 
 Labor, and Agriculture, assisted by a small permanent staff. The board 
 was required to report to the President whenever a state of depression 
 existed, or was likely to arise within six months, in the United States or 
 in any substantial part of the United States. The President was re- 
 quested by the law to transmit such report to Congress, together with 
 an estimate of the appropriation needed to undertake public works in the 
 area affected. The act included provision for appropriations for emer- 
 gency highway aid to the states and for the construction by the national 
 government of river and harbor, flood control, and public building proj- 
 ects. Public works undertaken by the government were to be selected 
 from six-year plans of construction needs which the several departments 
 were directed to prepare in cooperation with the board. Since the board 
 was created only after the emergency was already a fact, there was little 
 it could do except to submit periodic reports. Its functions were later 
 transferred to the Department of Commerce and then abandoned, due 
 to the failure of Congress to appropriate funds to continue the work. 15 
 
 With a business depression a reality during the winter of 1929-30, 
 many proposals for the utilization of public works expenditures as a 
 palliative were brought forward. There is also evidence that action was 
 actually taken by the national government to accelerate the construction 
 of projects already planned and to speed up the planning and execution 
 of new projects. 16 The staff of the supervising architect of the treasury 
 was increased, as were the appropriations for the improvement of 
 grounds and the construction of buildings. The Department of Justice 
 expedited the clearing of titles to needed sites. Furthermore, Congress 
 increased the appropriations for federal-aid highways from $75,000,000 
 to $125,000,000 annually, and the allotments were made by the Secretary 
 of Agriculture somewhat more speedily than usual. 
 
 Of even greater significance was the creation during 1932 of the 
 Reconstruction Finance Corporation with extensive powers to loan 
 federal funds in aid of business. 17 The capital stock of the corporation 
 was subscribed to by the national government, and the management of 
 the corporation was entrusted to a board of seven directors. The corp- 
 oration was authorized to make loans to banks, trust companies, building 
 and loan associations, insurance companies, various types of agricultural 
 credit agencies, and other similar institutions, as well as to railroads. 
 
 "46 Stat, at L., 21; ibid., vol. 48, p. 113; ibid., vol. 46, p. 1084. The new United States 
 Employment Service in the Department of Labor replaced an earlier agency in that department 
 which had few duties and no nation-wide organization. 
 
 "See Executive Orders Nos. 6166 (June 10, 1933), 6221 (July 26, 1933), 6623 (March i, 
 1934), and 6624 (March 1, 1934). The functions of the board lapsed June 30, 1934. 
 
 "Wolman, op. cit., p. 180. 
 
 "47 Stat, at L., 5. 
 
THE PUBLIC WORKS ADMINISTRATION 
 
 The Emergency Relief and Construction Act of 1932, enacted later 
 in the year, materially broadened the lending powers of the corpor- 
 ation and provided for the expediting of a public works program. 18 This 
 statute deserves extended notice since many of its provisions appear 
 in modified form in the statute creating the Public Works Administration. 
 
 The first title of the act authorized the Reconstruction Finance 
 Corporation to make available to the several states and territories the sum 
 of $300,000,000 to be used in furnishing direct and work relief. 19 Any 
 sums so advanced were to bear interest at the rate of three per cent. 
 The national government was to be reimbursed, except in the case of 
 loans to Puerto Rico and Alaska, by annual deductions from future 
 federal-aid highway allotments, unless other arrangements for repayment 
 were made. The act also provided that, with the approval of the gover- 
 nor of the state affected, and with that of the corporation, part of the 
 sum earmarked for any state might be made available to municipalities 
 and other political subdivisions. Such loans were required to be repaid 
 in much the same manner as other public debts. 
 
 The second title of the act empowered the corporation to make loans 
 for various types of self-liquidating projects. Such undertakings were 
 defined as projects that would be self-supporting and financially solvent 
 and that would permit of the costs of construction being repaid within a 
 reasonable period of time by means of tolls, rents, or similar charges, 
 other than taxation. In addition to a provision for certain agricultural 
 objectives, self-liquidating loans for the following purposes were au- 
 thorized by the act: 
 
 (1) Projects undertaken by states, their political subdivisions, or by other 
 public agencies such as public corporations or boards and commissions. 
 
 (2) Housing construction for families of low income or for the reconstruction 
 of slum areas, if undertaken by corporations formed wholly for such purposes and 
 regulated by state or municipal law as to rents, charges, capital structure, rate of 
 return, and areas and methods of operation. 
 
 (3) The construction, replacement or improvement of bridges, tunnels, docks, 
 viaducts, waterworks, canals, and markets, when undertaken by private limited- 
 dividend corporations and devoted to public use. 
 
 (4) The protection and development of forests and other renewable natural 
 resources, when undertaken by private limited-dividend corporations, if regulated 
 by a state or political subdivision of a state. 
 
 (5) The construction of publicly-owned bridges, the cost of which would be 
 returned in part by means of tolls, fees, rents, or other charges, and the balance 
 by means of taxes imposed prior to the passage of the Emergency Relief and 
 Construction Act. 
 
 Certain labor policies were made applicable to all projects financed 
 under this title. The use of convict labor was forbidden, and in selecting 
 workers it was required that ex-service men with dependents be preferred. 
 
 18 47 Stat, at L., 709. 
 
 19 Under the act not more than fifteen per cent of this sum could be allotted to any one 
 state or territory. 
 
INTRODUCTORY CONSIDERATIONS 
 
 '5 
 
 A thirty-hour week was required so far as practicable, except in ex- 
 ecutive, administrative, and supervisory positions. 
 
 The third and final title of the act appropriated a sum in excess of 
 $300,000,000 for public works. Most of this sum was for national 
 projects, and represented an effort by the government to do its share 
 in stimulating the construction industry. However, $120,000,000 of the 
 total was an appropriation of funds for distribution among the states, 
 to be used on the federal-aid highway system. This was in addition to 
 the regular annual appropriation for such purposes. The usual method of 
 apportionment was provided for, and, as customary, wages on such con- 
 struction were to be predetermined by the state highway departments. 
 The amount allotted to any state was considered merely an advance 
 payment on future appropriations, and corresponding deductions in 
 future years were provided for. The states were permitted to use these 
 funds to match previous apportionments, and limitations upon the con- 
 struction of roads within municipalities and on payments per mile were 
 waived. The funds could be used only for work performed prior to 
 July 1, 1933. 
 
 The Emergency Relief and Construction Act thus constituted a 
 frontal attack on the problems raised by the economic crisis. Its failure 
 greatly to stimulate public works construction was due largely to the 
 provisions requiring that loans be self-liquidating. Even the program 
 of federal construction met with delays, and only small sums were 
 actually obligated before the funds available for that purpose were 
 transferred to other uses. 20 
 
 Several even more elaborate public works bills failed of passage 
 in Congress. These included a proposal by Senators LaFollette and 
 Costigan for a five and one-half billion dollar "Administration of Public 
 Works." 21 The bill would have provided for an emergency construction 
 program involving not only direct action by the national government, 
 but also loans to the states and their civil subdivisions for works projects. 
 In addition, grants to the states for highway and related purposes, 
 and loans to limited-dividend corporations for the construction of 
 low-cost housing, would have been authorized. The title of administrator 
 was to be conferred on the head of the new agency, with his term and 
 tenure of office to be the same as that of the heads of the executive 
 departments. The approval of an emergency finance board, consisting 
 of three members appointed by the President and Senate, would have 
 been required for all loans under the act. The authors would also have 
 centralized in the establishment most of the construction agencies of 
 
 OT Gayer, op. cit., p. 87. 
 
 J, See the Hearings before a Subcommittee of the Senate Committee on Education and 
 Labor on S. 2419, Establishment of Administration of Public Works, J2& Congress, 1st Session 
 (1932). 
 
i6 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 the national government. Some agencies were specifically listed in the 
 bill, and the President would have been authorized to include others 
 by executive order. 
 
 The committee hearings on the bill seem to indicate that Senators 
 LaFollette and Costigan, and the committee itself, were more concerned 
 with the effects of such a public works program on unemployment than 
 with problems of administration. Two other bills, both introduced 
 in the House of Representatives, were, on the other hand, primarily 
 directed at the reorganization of the public works agencies of the gov- 
 ernment, as a measure likely to promote efficiency and economy. 22 Both 
 bills would have authorized the creation of a single comprehensive 
 public works establishment. These proposals had no relation to economic 
 stabilization, and were inspired by a message from President Hoover 
 dealing with the reorganization of the executive branch of the govern- 
 ment. 23 One item of that message had urged the creation of the office of 
 "Public Works Administrator," and the consolidation under that officer 
 of nearly all existing construction agencies of the government. 
 
 Those seeking the creation of such a public works agency were not 
 successful in their efforts, but a general reorganization bill was passed 
 by Congress. 24 Subject to certain restrictions, the President was au- 
 thorized to group, to coordinate, and to consolidate the executive and 
 administrative agencies of the government according to their major 
 purposes. Executive orders effecting changes were required to be sub- 
 mitted to Congress, and were to go into effect sixty days after such 
 transmission, unless disapproved by resolution of either chamber of 
 Congress. 
 
 Acting under this authority, President Hoover took action to consoli- 
 date the construction activities of the national government in a division 
 of public works within the Department of the Interior, despite his 
 earlier preference for a separate establishment. The President issued an 
 order providing that one of the assistant secretaries of the Department 
 of the Interior should be designated the assistant secretary of the interior 
 for public works, and that that officer should be given jurisdiction over 
 some fifteen construction agencies of the government, including the 
 bureau of reclamation, the geological survey, the office of supervising 
 architect of the treasury, and the bureau of public roads. 25 Most of the 
 non-military construction activities of the army engineers were likewise 
 included in the proposed transfer. This order was not something en- 
 tirely new ; similar proposals had been made during President Harding's 
 
 "See the Hearings before the House Committee on Expenditures in the Executive Depart- 
 ments on H. R. 6665 and H. R. 6670, Public Works Administration, 72d Congress, 1st Session 
 (1932). . 
 
 "Congressional Record, vol. 75, pp. 4109-4110 (February 17, 1932). 
 
 "47 Stat, at L., 382, 413. 
 
 ^Executive Order No. 5964 (December 9, 1932). 
 
INTRODUCTORY CONSIDERATIONS 
 
 1/ 
 
 administration, as has been seen above. President Hoover had, however, 
 been defeated in his campaign for reelection even before the order was 
 issued, and a Democratic House of Representatives disapproved this 
 as well as other projected changes in the organization of the administra- 
 tive branch of the government. 26 
 
 The Public Works Title of the Recovery Act 
 
 With the inauguration of the new administration on March 4, 1933, 
 proponents of the creation of a public works establishment as an efficiency 
 measure were relegated to the background, while the agitation for large 
 public works expenditures to combat the depression gained a new impetus. 
 It was not long before the Roosevelt administration let its plans be 
 known. On May 17, the President delivered to Congress a message 
 setting forth his recommendations for recovery legislation. 27 The mes- 
 sage foreshadowed both the national industrial recovery codes and the 
 public works program. Concerning the latter, the President said: 
 
 The other proposal gives the Executive full power to start a large program of 
 direct employment. A careful survey convinces me that approximately $3,300,000,000 
 can be invested in useful and necessary public construction and at the same time 
 put the largest possible number of people to work. 
 
 Provision should be made to permit States, counties, and municipalities to 
 undertake useful public works, subject, however, to the most effective possible 
 means of eliminating favoritism and wasteful expenditures on unwarranted and 
 uneconomic projects. 
 
 Following the delivery of the President's message, Representative 
 Doughton, chairman of the ways and means committee, introduced a bill 
 which one reporter termed "a 4,000 word translation of the President's 
 message." 28 At the same time Senator Wagner introduced a practically 
 identical bill in the upper chamber. 29 
 
 The status of the measure as both an emergency and administration 
 bill conditioned its entire legislative history. Within a month after the 
 introduction of the original bills, a substitute, differing in few respects 
 from those originally introduced, became law. 30 Both in committee and 
 on the floors of the two houses, every attempt was made to speed the 
 course of the legislation. In the House of Representatives, particularly, 
 deliberation was frowned upon, and the bill was passed with the assis- 
 tance of a special rule. The rule permitted only seven hours of general 
 debate, and only amendments offered by the ways and means committee 
 
 J6 House Resolution 334; see Congressional Record, vol. 76, pp. 21 10-2126. The several 
 orders, together with brief explanations, may be found in House Document No. 493, 72c! Con- 
 gress, 2d Session, serial 9682. 
 
 "Congressional Record, vol. 77, p. 3603 (May 17, 1933). 
 
 28 H. R. 6664. See New York Times, May 18, 1933. 
 
 20 S. 1712. 
 
 30 H. R. 5755, 48 Stat, at L., 195, 200. A substitute bill was introduced in order to allow 
 the committee to report a bill without amendments. However, the committee later offered a 
 series of eleven amendments to the public works title from the floor of the House, and these 
 were accepted. 
 
1 8 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 could be considered. 31 In the Senate, procedure was expedited by a 
 unanimous consent agreement which gave precedence to committee 
 amendments. 32 Many amendments were adopted in the Senate, some in 
 a spirit of toleration so as to allow them to go to conference. The public 
 works provisions of the statute differed only in minor respects from those 
 in the bills originally introduced. 
 
 The bill as it reached the President contained three major sections. 
 Title One dealt with measures for the control of industry and conditions 
 of employment. Title Two provided for the public works program, ex- 
 cept that several sections related entirely to taxation and were, in effect, 
 amendments to existing revenue laws. Title Three consisted of amend- 
 ments to the Emergency Relief and Construction Act of 1932, and in- 
 cluded also several miscellaneous provisions. 
 
 The act authorized the creation of the Public Works Administration 
 and the preparation of a "comprehensive program of public works." 33 
 This provision was apparently intended to introduce an element of 
 national planning into the program as a whole. The greater part of Title 
 Two was, however, concerned with an immediate program of expend- 
 itures designed to increase employment quickly. In sanctioning the fi- 
 nancing of various types of public works, the act simply included among 
 the eligible undertakings those embodied in the comprehensive program 
 together with some additional items. Some categories of projects were 
 specifically named, while others were included by making eligible such 
 projects as had theretofore been eligible for financing by the Reconstruc- 
 tion Finance Corporation. The act specifically exempted from the public 
 works program construction activities under the control of the Architect 
 of the Capitol or projects for which that officer was the contracting or 
 executive official. 34 The major provisions of the title were made ap- 
 plicable to works in the several states, the District of Columbia, Hawaii, 
 Alaska, Puerto Rico, the Virgin Islands, and the Canal Zone. 35 
 
 Eligible Projects. — The act did not attempt to set forth an exhaustive 
 list of all the specific projects which might be financed in whole or in 
 part under its provisions. Instead, it authorized in general terms the 
 financing of "any projects of the character heretofore constructed or 
 carried on either directly by public authority or with public aid to serve 
 the interests of the general public .... " 36 This blanket authorization 
 is, however, supported by the specific enumeration of certain classes 
 of undertakings: 
 
 '^Congressional Record, vol. 77, p. 4188 (May 25, 1933). An amendment may be found on 
 P- 4293. 
 
 32 Ibid., p. 5161 (June 7, 1933). 
 
 "48 Stat, at L., 195, 200, sections 201 and 202. 
 
 3i Ibid., section 202. This provision was, perhaps, inserted because of the architect's status 
 as an officer of the legislative branch of the government. 
 m Ibid., section 203 (a). 
 
 M Ibid., section 202 (c). See also section 203 (a) (1). 
 
INTRODUCTORY CONSIDERATIONS 
 
 19 
 
 (1) The construction, repair and improvement of public highways and park 
 ways, public buildings, and any publicly-owned instrumentalities and facilities. 8 ' 
 
 (2) The conservation and development of natural resources, including the 
 control, utilization and purification of waters, the prevention of soil or coastal 
 erosion, the development of water power, the transmission of electrical energy, 
 flood control, the construction of river and harbor improvements, and certain river 
 and drainage improvements. 38 
 
 (3) The construction, reconstruction, alteration, or repair under public regula- 
 tion or control of low-cost housing and slum clearance projects, and assistance in 
 the purchase of subsistence homesteads. 
 
 (4) The financing of self-liquidating projects formerly eligible for assistance 
 by the Reconstruction Finance Corporation, to which were now added the construc- 
 tion or completion of hospitals financed in part from public funds, reservoirs, 
 pumping plants, and dry docks. 89 
 
 (5) The construction of naval vessels and of aircraft required therefor, 
 heavier-than-air aircraft, technical works for the army air corps, army housing 
 projects, and original equipment for the mechanization or motorization of army 
 tactical units. 40 
 
 (6) The financing of such railroad maintenance and equipment as might be 
 approved by the Interstate Commerce Commission as desirable for the improvement 
 of transportation facilities. 
 
 (7) The advancing of the funds necessary for constructing and equipping an 
 annex to the Library of Congress, already authorized by statute, to be expended by 
 the commission having charge of the project. 41 
 
 In addition, the President was empowered to use portions of the au- 
 thorized appropriation for certain purposes not directly related to public 
 works. 42 The broad scope of the title was generally recognized. Before 
 the House committee, the Director of the Budget said that it includes 
 "every imaginable type of project publicly owned or constructed with 
 public aid. By that I mean it is very, very broad .... " 43 On the floor 
 of Congress similar expressions were made. 44 
 
 Congress appropriated the sum of $3,300,000,000 for the purposes of 
 the act. 45 Obviously, the question arises as to how this sum was arrived 
 at as the size of the new program. As already noticed, the President had 
 stated to Congress that a careful survey had been made which convinced 
 
 "Sections 204 and 205 constituted, in effect, a separate highway act. 
 
 38 The approval of Congress or the recommendation of the chief of the army engineers was 
 made necessary for river and harbor improvements. Cf. United States v. Arizona, 295 U. S. 174, 
 55 Sup. Ct. 666, 79 L. ed. 1371 (193s). Permissible river and drainage improvements included 
 those required to satisfy treaty obligations and those necessary to restore to the states or their 
 citizens water denied them by the performance of treaty obligations previously assumed. 
 
 39 Those previously eligible were bridges, tunnels, docks, viaducts, waterworks, canals, and 
 markets. 
 
 ■"•Subject to the discretion of the President and international agreements for the further 
 limitation of armaments. 
 
 "See 46 Stat, at L., 583. 
 42 Cf. section 220. 
 
 ■"Hearings before the House Committee on Ways and Means on H. R. 5664, National 
 Industrial Recovery, 73d Congress, 1st Session, p. 28. 
 
 ^Congressional Record .vol. 77, p. 4210 (May 25, 1933). 
 
 "48 Stat, at L., 275. See also section 220 of the Recovery Act. With some exceptions, no 
 limitations were imposed on the amounts that might be expended on particular types of projects. 
 The exceptions included: not less than $400,000,000 for apportioned highway grants to the 
 states; not less than $50,000,000 for highways and related projects in the national forests, parks, 
 public lands, and Indian reservations; not to exceed $50,000,000 for the Tennessee Valley 
 Authority; $25,000,000 for subsistence homesteads; and not in excess of $100,000,000 for the 
 Agricultural Adjustment and Farm Credit Administrations. These allocations totaled approxi- 
 mately $625,000,000, leaving $2,675,000,000 available for free allotment by the President. 
 
20 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 him that such a sum was necessary. On the floor of Congress, a state- 
 ment to the same effect was made on the authority of the Director of 
 the Budget. 46 It was claimed that the survey had indicated that useful 
 and needful public works totaling about two billion dollars could be 
 undertaken by the states and their subdivisions, and that federal public 
 works could be profitably undertaken to the extent of about $1,300,000,- 
 000. A request that the details of the findings be inserted in the Con- 
 gressional Record was not acceded to, and the precise nature of the 
 survey has never been revealed. That it was probably nothing more than 
 a rough estimate of the extent of needed public works is indicated by an 
 incident given wide credence in newspaper accounts, and stated as a fact 
 by Administrator Ickes. 47 It is reported that, in drafting the recovery 
 bill, the sum originally provided was three billion dollars. Senator Wag- 
 ner is supposed to have asked his secretary, in the din of a crowded 
 office, whether that figure included $300,000,000 for projects in New 
 York. Senator Wagner misunderstood an affirmative reply for one in 
 the negative, and raised the amount to $3,300,000,000. He then presented 
 this figure to the President as representing the sum his group believed to 
 be necessary. It has been estimated that the total volume of public con- 
 struction in the United States (federal, state, and local) totaled the same 
 amount in 1930, the year before the effects of the business depression 
 revealed themselves in such activities. 48 The estimate for 1932 totals only 
 slightly more than $2,000,000,000. 
 
 Method of Financing Projects. — The financial assistance provided for 
 by the public works title could be extended either as an outright grant or 
 as a loan, or as a combined grant and loan. In the case of projects under- 
 taken by some agency of the national government, the entire cost could 
 be met from the appropriation. To states and their subdivisions, and to 
 the territories, a grant of thirty per cent of the cost of labor and 
 materials was permitted, together with a loan of any other portion of 
 the costs. Insofar as non-public corporations were eligible under the 
 act, they could obtain loans but not grants. Individuals were not num- 
 bered among the beneficiaries of the fund. The actual construction of 
 any project might be undertaken either by contract or by workers directly 
 employed by the borrower or grantee, i.e., by force account. 
 
 This financial assistance was, of course, designed to stimulate con- 
 struction activity. So far as federal projects were concerned, the effect 
 of the bill was simply to appropriate the necessary funds, to be made 
 available for expenditure by the President through such agencies as he 
 might designate. The loans to other public bodies and to corporations 
 
 ^Congressional Record, vol. 77, p. 4204 (May 25, 1933). 
 "Back to Work (1Q35), p. 14. 
 
 48 A. D. Gayer, Public Works in Prosperity and Depression (1935), p. 65. 
 
INTRODUCTORY CONSIDERATIONS 
 
 21 
 
 were intended to provide them with funds at low interest rates. The out- 
 right grants were further intended to offset the increased construction 
 costs resulting from the new recovery codes and from the lahor provisions 
 of the Recovery Act itself. 
 
 The President was authorized to make allotments and to enter into 
 new construction only during a period of two years, until June i6, 1935, 
 or until such earlier date as might mark the end of the existing emer- 
 gency. 49 That event could be announced either by Presidential proclama- 
 tion or by joint resolution of Congress, but the power was never 
 exercised. The date of January 23, 1939, was fixed as the final limit for 
 the issuance of funds under agreements or commitments entered into 
 prior to the termination of the power to make new loans or grants. 50 
 
 Functions of the P.W.A. — The Recovery Act specifically authorized 
 the President to create a Federal Emergency Administration of Public 
 Works, all the powers of which were to be exercised by an adminis- 
 trator. 51 The Reconstruction Finance Corporation lost its authority to 
 make further loans for self-liquidating projects, 52 and the President was 
 empowered to delegate any of his functions and powers to such officers, 
 agencies, and employees as he might designate. Accordingly, the powers 
 of the P.W.A. while derived from Congress rest directly upon executive 
 orders assigning functions to it. 
 
 In his first delegation of powers, the President gave the P.W.A. 
 jurisdiction over only two classes of projects: the distribution among the 
 states of a sum not to exceed $400,000,000 for highway purposes, and the 
 allotment to the navy department of a sum not to exceed $238,000,000 
 for the construction of certain naval vessels. 53 The first allotment was 
 specifically provided for in the Recovery Act, while the approximate size 
 of the allotment for naval vessels seems to have been determined upon 
 even before the act was passed, although no specific sum is named in the 
 statute. 54 
 
 Subsequently, however, the President greatly broadened the powers 
 of the P.W.A. 55 It was authorized to construct, finance, or aid in the 
 construction or financing of any of the projects included in the compre- 
 hensive program of public works, and to aid in the financing of railroad 
 maintenance and equipment approved by the Interstate Commerce Com- 
 mission. The effect of this order was to make the P.W.A. the primary 
 
 "Section 201 (d). 
 
 M No special significance attached to this date; it was simply intended to give ample time 
 for the completion of projects initiated prior to the termination of the act. See the testimony 
 of Director of the Budget Douglas, Hearings before the House Committee on Ways and Means, 
 op. cit., p. 45. 
 
 "Section 201 (al. 
 
 52 Section 301. This authority was later restored. 
 "Executive Order No. 6174 (June 16, 1033). 
 
 M As early as May 19, 1933, the New York Times reported that the sum of $230,000,000 
 was earmarked for the construction of thirty-four naval vessels. 
 "Executive Order No. 6252 (August 19, 1933). 
 
22 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 beneficiary of the public works functions authorized by the Recovery 
 Act, but not the exclusive one. Thus, the Federal Civil Works Admin- 
 istration was created "to administer a program of public works as a part 
 of and to be included in, the comprehensive program under preparation 
 by the Federal Emergency Administration of Public Works." 56 The 
 Federal Emergency Relief Administrator was designated as the head 
 of this agency, and many small relief-work projects were undertaken and 
 financed entirely by the national government. Similarly, the functions in 
 connection with subsistence homesteads were originally entrusted to the 
 Department of the Interior, and later to the Department of Agriculture. 57 
 It would seem, however, that the P.W.A. was authorized to aid in the 
 financing of all projects provided for by Title Two of the Recovery 
 Act, with the sole exception of subsistence homesteads. Other delegations 
 of power to federal agencies were generally of advisory or planning 
 functions, and did not affect the power of the P.W.A. to make loans 
 and grants. 58 
 
 The P.W.A. continues to carry out the works program authorized by 
 the National Industrial Recovery Act, since the funds available for that 
 purpose have not yet been completely exhausted. This is due to various 
 causes: some projects require a considerable period of time for their 
 completion and, accordingly, for the expenditure of allotments ; other 
 projects have been delayed by litigation; and some allotments have been 
 withdrawn, thus making the funds available for re-allotment. Further- 
 more, allotments have been made under the Recovery Act from funds 
 obtained through the re-sale of securities obtained in connection with 
 loans. 59 
 
 At the end of the first year of the P.W.A., the administrator recom- 
 mended various changes in Title Two of the Recovery Act. 60 He sought 
 to increase the effectiveness of his agency by overcoming existing ob- 
 stacles to the construction of non-federal projects, and, for that purpose, 
 urged that an extensive study be made of possible means of making 
 more uniform the borrowing power of municipalities. He also recom- 
 mended that the existence of the P.W.A., and its power to make loans 
 and grants, be continued at least until June, 1937. He further expressed 
 the belief that a public works establishment of this type ought to be a 
 permanent agency of the national government. Congress was careful 
 not to extend the life of the Public Works Administration, but it did 
 appropriate a maximum of an additional $500,000,000 for the works 
 
 "Executive Order No. 6420B (November 9, 1933). 
 
 "Ibid., Nos. 6209 (July 21, 1933) and 7041 (May 15, 1935). See also Executive Orders 
 Nos. 7530 (December 31, 1936) and 7557 (February 19, 1937), 2 Fed. Reg. 9, 411. 
 
 M See, for example, the executive order creating the National Resources Board, No. 6777 
 (June 30, 1934). 
 
 e9 See chap, iv, infra. 
 
 '"Report of the Executive Secretary of the Executive Council to the President (August 25, 
 1934). P- 5- 
 
INTRODUCTORY CONSIDERATIONS 
 
 23 
 
 program. 61 The President actually set aside $400,000,000 for the P.W.A. 62 
 This sum was, however, later reduced, and was, at any rate, inadequate 
 to finance more than a small fraction of the many pending applications. 
 
 The Emergency Relief Appropriation Acts 
 The P.W.A. continued to be the primary public-works financing 
 agency of the national government until the middle of 1935. With Title 
 Two of the National Industrial Recovery Act about to expire, Congress 
 in April of that year enacted into law the Emergency Relief Appropria- 
 tion Act of 1935. 63 This statute, carrying the largest appropriation in the 
 history of the nation, made available to the President the sum of $4,880,- 
 000,000 for use until June 30, 1937. Four billion dollars of this sum 
 represented an entirely new appropriation, while the remainder was re- 
 appropriated from the unexpended balances of previous acts and from 
 the funds of the Reconstruction Finance Corporation. The entire fund 
 was to be used "to provide relief, work relief and to increase employment 
 by providing for useful projects . . . . " 
 
 The act listed the various classes of projects for which the appropria- 
 tion might be used. 64 These included highways and related works, rural 
 rehabilitation and agricultural relief, water conservation, irrigation, 
 reclamation, rural electrification, assistance for educational, professional 
 and clerical persons, the Civilian Conservation Corps, sanitation, foresta- 
 tion, housing, and loans and grants to the states, territories, possessions, 
 and their subdivisions. The projects authorized were grouped into eight 
 categories, and the maximum amounts available for each were specified. 
 This limitation, however, was relatively insignificant because of a provi- 
 sion permitting the President to use not to exceed twenty per cent of the 
 total appropriation to increase the sum available for any class of projects. 
 Twenty per cent of $4,880,000,000 is $976,000,000 — a sum large enough 
 to allow the President a very wide measure of discretion. 
 
 The Emergency Relief Appropriation Act specifically continued the 
 life of the Public Works Administration until June 30, 1937, and author- 
 ized the President to permit the P.W.A. to perform functions under both 
 the Recovery Act and the new statute. 65 The creation of other agencies 
 was made possible by a provision allowing the President to establish and 
 prescribe the duties and functions of agencies necessary to carry out the 
 act. 66 The act did not directly appropriate any funds to the P.W.A., 
 although the President was empowered to restore to that agency certain 
 funds which had been impounded or transferred to the Federal Emer- 
 
 m 48 Stat, at L., 1021, 1055. 
 
 ^P.W.A. Press Release No. 829 (July 11, 1934). 
 m 4Q Stat, at L., 115. 
 M 7M(i., section 1. 
 a Ibid., section 12. 
 M Ibid., section 4. 
 
24 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 gency Relief Administration. 07 In addition, the President possessed the 
 power to allocate funds to the P.W.A. from the general appropriation, 
 and Congress repeated an authorization to make additional loans from 
 funds obtained by the P.W.A. through the re-sale of such securities as 
 it might purchase in connection with grants and loans to non- federal 
 bodies. 
 
 The Works Progress Administration. — In accordance with the power 
 given him, the President created three important new agencies: the 
 Division of Applications and Information of the National Emergency 
 Council, the Advisory Committee on Allotments, and the Works Progress 
 Administration. 68 The Division of Applications and Information was 
 given the power to receive all applications for funds and to cause them 
 to be examined. So far as the P.W.A. was concerned, this meant that 
 the approval of an allotment by that agency would then be submitted to 
 the division as a formal request for an allotment of funds to the P.W.A. 
 for the project named. This division, however, soon became inoperative. 
 
 The Advisory Committee on Allotments was charged with the duty 
 of reviewing all applications and then making recommendations to the 
 President for the allotment of funds. The committee, as created, con- 
 sisted of about a score of members, with Mr. Ickes, the head of the 
 P.W.A., serving as chairman in his capacity as Secretary of the Interior. 
 Other members included various officials of the national government, 
 ex officio, and representatives of business, organized labor, the American 
 Bankers Association, farm organizations, and the United States Confer- 
 ence of Mayors. A supplementary order added the deputy administrator 
 of the P.W.A. 69 This committee also soon ceased to function. 
 
 The third new agency was the Works Progress Administration, of 
 which the Federal Emergency Relief Administrator was made the head. 
 To this agency was given the responsibility for the coordinated execu- 
 tion of the works program as a whole. Perhaps the P.W.A. should now 
 be considered as subordinate to that establishment, but there is no evi- 
 dence of such a relationship. Even in the determination of policies, the 
 P.W.A. retained a free hand except in the matter of the recruiting of 
 labor on projects, and even that control is often waived. 70 The lion's 
 share of the functions under the act was, however, entrusted to the 
 Works Progress Administration. 
 
 Functions of the P.W.A. and W.P.A. — The President did, however, 
 authorize the P.W.A. to continue to perform all of its functions under 
 the Recovery Act and delegated to it two duties under the Emergency 
 
 67 49 Stat, at L., 115, section I. 
 
 "'Executive Orders Nos. 7034 (May 6, 1935) and 7068 (June 8, 1935). 
 * 9 Ibid., No. 7056 (May 28, 193s) ■ 
 TO See chap, iv, infra. 
 
INTRODUCTORY CONSIDERATIONS 
 
 25 
 
 Relief Appropriation Act of 1935. 71 The powers under the new act 
 were to: 
 
 (1) .... make 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 twenty-five per centum of the 
 loan or the grant, or the aggregate thereof, is to be expended for work under each 
 particular project; 
 
 (2) .... carry out projects for slum-clearance or low-cost housing, or both. 
 Even in official circles there was no clear understanding of the dis- 
 tinction between the projects assigned to the P.W.A. and those over 
 which the Works Progress Administration had jurisdiction. In order 
 to clear up this confusion, a statement was issued over the signatures of 
 the Public Works Administrator, the Works Progress Administrator, and 
 the executive director of the National Emergency Council, with the 
 approval of the President. 72 
 
 The P.W.A., it was indicated, was to receive applications for con- 
 struction projects, other than those of a repair or maintenance character, 
 where the aggregate cost of completion was estimated to be more than 
 $25,000. Among the examples given were buildings of various types, 
 bridges, power distributing plants, highways, canals, subways, tunnels, 
 filtration plants, water distributing systems, and garbage and rubbish 
 disposal plants. It was made clear that the P.W.A. could make grants 
 and loans to public bodies for such undertakings, and, in addition, could 
 continue its program of slum clearance and low-cost housing. All appli- 
 cations for loans regardless of the cost or type of project, with the sole 
 exception of non-construction undertakings, were also required to be 
 submitted to the PW.A. 
 
 The Works Progress Administration, on the other hand, was to con- 
 sider applications involving only grants of federal money. It would 
 undertake work of a non-construction character designed to employ pro- 
 fessional, clerical, and other white-collar workers and construction 
 projects costing less than $25,000. In addition, it was indicated that ap- 
 plications rejected by the PW.A. should be submitted to the Works 
 Progress Administration. Since that agency was chiefly concerned with 
 providing work-relief, it might find the application eligible even though 
 the P.W.A., with its more severe rules as to financing, had been forced 
 to reject the application. 
 
 In short, the projects of the two agencies differ chiefly in their char- 
 acter and in the method of financing. 73 Those sponsored by the P.W.A. 
 
 "Executive Order No. 7064 (June 7, 1935). 
 
 "This "Statement of the President Defining the Jurisdiction of the P.W.A. and the W.P.A. 
 under the Emergency Relief Appropriation Act of 1935" was dated July 3, 1935 and was issued 
 in mimeographed form. It has been reprinted in American City, vol. 50, no. 5 (August, 1935), 
 P- 5- 
 
 ™Cf. P. V. Betters et a!., Recent Federal-City Relations (1936), p. 53. 
 
26 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 are generally more extensive, involve new construction rather than reno- 
 vation or maintenance, and are financed by a grant or by a combined 
 grant and loan. Works Progress Administration projects need not be 
 of a construction character and are frequently small undertakings costing 
 less than $25,000. The entire cost of Works Progress Administration 
 projects is paid by the national government except for relatively small 
 sums paid by the sponsor from his own funds. There are also some 
 differences in the labor policies of the two agencies. The Works Progress 
 Administration is chiefly concerned with getting people off the direct 
 relief rolls, and putting them on work-relief so long as may be necessary. 
 The P.W.A. seeks to stimulate the private employment of labor, whether 
 in need of relief or not. 
 
 The chief effect of these changes upon the P.W.A. was to limit the 
 potential beneficiaries of its assistance. Apart from legislation of 1938, 
 the P.W.A. could make allotments to other federal agencies or to private 
 corporations, only from appropriations made prior to 1935 or from the 
 sums realized through the sale of securities previously obtained in con- 
 nection with non- federal loans. An incidental result of these changes 
 was an increase in the permissible maximum of P.W.A. grants. The 
 Emergency Relief Appropriation Act of 1935 contained no provision on 
 that subject, Congress being content to leave the matter to the President. 
 Under his authority, the Advisory Committee on Allotments fixed forty- 
 five per cent of the total cost of the project as the normal grant. 74 As 
 pointed out above, under the Recovery Act the maximum was thirty per 
 cent of the cost of labor and materials involved. 
 
 The 1936 Statute. — The second works program was continued by the 
 First Deficiency Appropriation Act of 1936. 75 Title Two of that statute, 
 officially termed the Emergency Relief Appropriation Act of 1936, made 
 available to the President the sum of $1,425,000,000 for direct and work 
 relief. Various categories of projects were specified, together with the 
 amounts allowable for each, but again the President was given the power 
 to effect changes in the statutory allocations. It was not the intention of 
 Congress that any part of this sum be expended through the P.W.A., 
 except, perhaps, as that agency might be designated by the Works 
 Progress Administrator as his instrumentality for the prosecution of 
 certain projects. 76 
 
 The act did not materially change the existing provisions of law 
 governing the functioning of the P.W.A. nor did it extend the life of 
 the establishment beyond June 30, 1937. 77 It did, however, authorize the 
 
 "National Emergency Council Press Release No. 2-10 (May 24, 1935)- 
 ,6 40 Stat, at L., 1597. 
 
 "Hearings before a Subcommittee of the Senate Committee on Appropriations on H. R. 
 12624, First Deficiency Appropriation Bill for 1036, 74th Congress, 2d Session, p. 369. 
 "49 Stat, at L., 1608-1611. 
 
INTRODUCTORY CONSIDERATIONS 
 
 2 7 
 
 expenditure, in the form of grants, of $300,000,000 obtained through the 
 sale of previously purchased securities. Under existing law such sums 
 would have been available only for the making of loans. Grants made 
 from this fund were required to be limited to forty-five per cent of the 
 total cost of the project. 
 
 Present Status of the P.W.A. — The Public Works Administration 
 was thus marked for extinction on June 30, 1937. The fact that many 
 projects might still be under construction on that date was immaterial, 
 since the supervision of such construction could be completed by other 
 agencies. Nor was it a matter of substantial importance that some funds 
 might yet be available for allotment, since the President seemed to be- 
 lieve that the government should confine its efforts to work-relief 
 projects. Indeed, the P.W.A. largely ceased to make allotments during 
 the winter of 1936- 1937, and such allotments as were made were usually 
 based upon a system of so-called conditional grants. That is, the maxi- 
 mum grant continued to be forty-five per cent of the total project costs, 
 but the actual grant payments were limited to 115 per cent of the amounts 
 paid to workers taken from relief rolls. 
 
 At this juncture, Congress enacted into law the Public Works Admin- 
 istration Extension Act of 1937. 78 The P.W.A. was continued in exist- 
 ence until July 1, 1939, and its powers were similarly extended. The 
 statute made available to the P.W.A. the sum of $15,000,000 for admin- 
 istrative expenses, 79 and an additional $59,000,000 for grants. Both sums 
 were to be taken from the so-called revolving fund of the P.W.A., i.e., 
 the fund in which is deposited the sums obtained through the re-sale of 
 securities. At the same time, the P.W.A. was directed to discontinue 
 receiving and considering applications for non-federal allotments; the 
 appropriation was to be expended only on projects already approved by 
 the examining divisions of the establishment. Furthermore, various re- 
 strictions were imposed on the amounts that could be allotted to particular 
 classes of applications, restrictions that were of such a nature as merely 
 to allow the administrator to carry out allotments which had received his 
 tentative approval, and for most of which funds had previously been 
 available. These allotments had not actually been made due to a variety 
 of reasons, but particularly because of the unwillingness of the applicants 
 to accept the so-called conditional grants. It was obviously intended by 
 Congress that the establishment would now return to its earlier policy, 
 and this was done. 80 
 
 There can be little question but that Congress extended the function- 
 ing of the P.W.A. merely to permit the orderly liquidation of the estab- 
 
 ,8 50 Stat, at L., 357. 
 
 ,9 This was effected by amending the Independent Offices Appropriation Act of 1938, which 
 had set aside $10,000,000 for the liquidation of the P.W.A. See 50 Stat, at L., 351. 
 '"P.W.A. Press Release No. 3176 (June 25, 1937). 
 
28 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 lishment. The instructions to discontinue action upon new applications 
 constitute ample evidence of that intention. Yet the fact remains that 
 an agency originally created during 1933 for a two-year period has been 
 authorized to continue in existence until the middle of 1939. By that time 
 events may justify the further continuation of the P.W.A., perhaps in a 
 modified form. 81 
 
 "Certain developments which have taken place while this study was in press are of major 
 importance. The Public Works Administration Appropriation Act of 1938 (Title Two of Public 
 Resolution No. 122, 75th Congress, approved June 21, 1938) inaugurated a new public works 
 program as part of the current spend-lend scheme. The life of the P.W.A. was extended to 
 June 30, 1941, as were the existing powers of the agency. $965,000,000 were appropriated to 
 the P.W.A., and, in addition, loans may be made up to $400,000,000 in amount from moneys 
 realized through the sale of securities acquired from the appropriation, or with the proceeds of 
 such securities. This total of $1,365,000,000 may be expended by the administrator, subject to 
 the approval of the President, for projects which can be substantially completed prior to June 
 30, 1940. This limitation of time, moreover, does not apply to projects enjoined by any court. 
 The act sets up the following categories ot expenditure: (a) not to exceed $200,000,000 for 
 federal construction projects of specified types; (b_) not more than $750,000,000 for grants in 
 aid of non-federal projects, or for defraying the estimated non-recoverable portion of the cost of 
 projects constructed for lease to public bodies; (c) not more than $400,000,000 from the "revolv- 
 ing fund" for making loans in addition to those made from the direct appropriation; and 
 (d) $15,000,000 for administrative expenses for the fiscal year ending June 30, 1939- New appli- 
 cations for aid to non-federal projects may be received until September 30, 1938. 
 
Chapter II 
 
 GENERAL ORGANIZATION AND FUNCTIONS 
 
 Although the public works program was regarded as complementary 
 to the industrial control provisions of the National Industrial Recovery 
 Act, it was decided at an early date that separate agencies should be 
 created to administer the two major activities. While Congress was still 
 debating the passage of the act, the President is reported to have re- 
 quested General Hugh Johnson to formulate the necessary organization 
 plans. 1 General Johnson was primarily interested in the measures for 
 the regulation of industry, and called upon Colonel George R. Spalding 
 of the army engineering corps to organize the public works establish- 
 ment. 2 Colonel Spalding, without any formal authority, proceeded to 
 assemble a temporary staff. It was, of course, impossible to assure such 
 employees a permanent status, or to offer them any compensation for 
 their services. Colonel Henry M. Waite, who later served as deputy 
 administrator, acted as second in command of this unofficial organization. 
 
 The Public Works Administration came into existence legally almost 
 with the signing of the Recovery Act by the President. That same day 
 he created a Special Board for Public Works, of which the Secretary of 
 the Interior was made chairman and Colonel Spalding appointed as one 
 of the members. 3 The President also selected a temporary administrator, 
 Colonel Donald H. Sawyer, the chairman of the Federal Employment 
 Stabilization Board. He was authorized to employ, on a provisional basis, 
 such necessary personnel as the special board might approve. Within a 
 month, Colonel Sawyer's appointment was terminated by a brief execu- 
 tive order designating "Harold L. Ickes to exercise the office of Federal 
 Emergency Administrator of Public Works." 4 Mr. Ickes, as Secretary 
 of the Interior, had from the first been chairman of the special board, 
 and he continued to serve in that capacity. 
 
 Having passed through an unofficial stage, and through a temporary 
 status as well, the Public Works Administration now began functioning 
 as an emergency agency, as provided by the Recovery Act. The organiza- 
 tion of the establishment has not been a static one ; changes in structure 
 and in the allocation of duties have been made from time to time. In 
 the pages which follow, an attempt is made to describe the administrative 
 organization of the establishment in such manner that the major offices 
 in Washington and the field are first noticed. Then follows an examina- 
 
 *New York Times, May 19, 1933. 
 2 H. L. Ickes, Back to Work (1935), pp. 16 ff. 
 'Executive Order No. 6174 (June 16, 1933). 
 l Ibid., No. 6198 (July 8, 1933). 
 
 29 
 
3° 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 tion of the other divisions in approximately the order that an application 
 for funds was routed through the establishment. Finally come the 
 agencies engaged in the supervision of construction and in planning, 
 since the P.W.A. itself has not engaged in actual construction. Before 
 noticing the details of the establishment's organization, a few words may 
 be said concerning two major changes in structure: one effected during 
 1935 and the other during 1937. 
 
 Transitions in the Organization of the P.W.A. 
 
 The Public Works Administration as originally created was said to be 
 organized "decentrally with centralized control." 5 This rather unusual 
 phrase was actually descriptive of a very marked concentration of power 
 at Washington. Employees in the field had little real power or discretion. 
 They could make no definitive decision on any application for funds, and 
 were required to accord applications little more than a superficial exam- 
 ination. 6 Officers engaged in the supervision of construction also possessed 
 greatly restricted powers. This was deemed necessary largely because of 
 the lack of an experienced and trained staff of employees. 7 It was 
 thought, in view of that situation, that the highest possible degree of 
 efficiency could be attained only by centralizing responsibility and powers 
 at the Washington offices. This was designed to enable the administrator 
 to keep a watchful eye on the evolution of policies and the training of 
 workers. In addition, ten regional advisers were appointed to aid the 
 state units of the P.W.A. in the execution of their functions. These 
 advisers are generally thought of in connection with the planning activi- 
 ties of the establishment, and never assumed any very prominent role. 
 Their services were dispensed with early in 1934. 
 
 The recognized disadvantages of the then-existing concentration of 
 power caused the P.W.A. to give its state units greatly increased powers, 
 but far from complete autonomy, during the middle of 1935, following 
 the passage of the Emergency Relief Appropriation Act of that year. 
 This transition was facilitated by the fact that a temporary halt had been 
 called in the making of allotments, and by the further fact that a suffi- 
 cient number of adequately-trained employees were now available. 8 
 Greater speed in the operations of the P.W.A. and closer cooperation 
 with applicants were made possible by transferring many employees to 
 the field, and by giving them the power to make all but the final disposi- 
 tion of applications. 9 In accordance with popular usage, the term 
 
 B P.W.A., Circular No. i, The Purposes, Policies, Functioning and Organisation of the 
 Emergency Administration (1933), p. 9. 
 e Ibid., p. 11. 
 'Ickes, op. cit., p. 11. 
 
 8 Cf. Hearings before the Subcommittee of the Senate Committee on Appropriations on 
 H. R. 12624, First Deficiency Appropriation Bill for 1936, 74th Congress, 2d Session, p. 315. 
 'Administrative Order No. 23 (May 18, 1935) and P.W.A. Press Release No. 1389. 
 
GENERAL ORGANIZATION AND FUNCTIONS 
 
 31 
 
 "decentralization" will be used to describe this change, although the 
 term "deconcentration" is perhaps more accurate. 
 
 The second major change in the organization of the Public Works 
 Administration became effective November 1, 1937. The field organiza- 
 tion of the establishment, which had previously been functioning with 
 the several states as administrative units, was now converted to a 
 regional basis. These regional units, seven in number, replaced those 
 field offices of the P.W.A. that had been concerned with the examination 
 of applications and with the supervision of construction, i.e., the offices 
 of the state directors and the state engineer inspectors. This transition 
 was definitely an economy measure, and was instituted only after the 
 President had called a halt to further allotments of funds to non-federal 
 agencies. Accordingly, the new organization scheme is so obviously a 
 partial demobilization of the P.W.A. that it is of less significance than 
 the form of organization previously in effect. For these reasons, greatest 
 emphasis will be given in this description to the organization of the 
 P.W.A. during the period of its greatest activity. 
 
 The Special Board for Public Works 
 
 The President established the Special Board for Public Works pri- 
 marily as an advisory agency. 10 The board, as originally constituted, con- 
 sisted of the Secretary of the Interior, as chairman, the Secretaries of 
 War, Agriculture, Commerce, and Labor, the Attorney General, the Di- 
 rector of the Budget, Assistant Secretary of the Treasury Robert, and 
 Colonel Spalding, the head of the unofficial P.W.A. 11 Thus, of the nine 
 members, six held cabinet posts while two others also served actively in 
 other capacities. The creation of the board may be regarded as being in 
 the nature of a concession to the Senate. That body had adopted an 
 amendment to the recovery bill which would have placed the functions 
 of the P.W.A. in the hands of a commission consisting of three members 
 appointed by the President and Senate. 12 The amendment was, however, 
 lost in conference. 
 
 During the first months of PWA. activity, the board ordinarily met 
 twice weekly, but its members were frequently represented by alternates. 13 
 At first the board assumed a prominent role. It had been endowed with 
 the power to approve the distribution of the allotment to the states for 
 road purposes and the employment of personnel by the temporary admin- 
 istrator. It was also required to report within twenty days upon all ap- 
 plications submitted to it. 14 The further exercise of these powers lapsed 
 
 "Executive Order No. 6174 (June 16, 1933). 
 
 "Changes in the membership of the board were effected bv Executive Order No. 621 1 
 (July 24, 1933), replacing Colonel Spalding with Colonel H. M. Waite, and No. 6625 (March 
 S. '934), replacing Mr. Robert with Director of Procurement C. J. Peoples. 
 
 "Congressional Record, vol. 77, pp. 5299, 530R (June 8, 1933). 
 
 "Ickes, op. fit., p. 23. 
 
 "Executive Order No. 6174 (June 16, 1933). 
 
32 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 with the appointment of the permanent administrator, although in some 
 cases personnel appointments continued to be announced as having met 
 with the approval of the board. 15 
 
 The more permanent functions of the board were advisory in charac- 
 ter, and were exercised by it without the specific sanction of Presidential 
 decree. Legally, the administrator was all-powerful, subject to control by 
 the President, and was not bound by the wishes of the board. 16 Actually, 
 however, he found it convenient to have many of his decisions ratified 
 by resolution of the board. These resolutions have never been published 
 as a whole, but occasionally those of more importance have found their 
 way into press releases or other announcements. 17 
 
 The duties of the board seem to have been threefold. 18 It advised the 
 administrator on matters of policy regarding the carrying out of the 
 works program, it was consulted with regard to major appointments and 
 other matters of administration and procedure, and it made recommen- 
 dations as to projected allotments. Applications for funds coming from 
 agencies of the national government were regularly referred to a subcom- 
 mittee, prior to action by the board as a whole. In time, the board came 
 under the complete domination of the administrator, so that it did little 
 more than ratify his every wish. 19 This may be explained not only by the 
 advisory character of its powers, but also by the fact that nearly all of its 
 members were serving in an ex officio capacity. Their other duties must 
 have demanded the greatest part of their time and efforts. Furthermore, 
 Mr. Ickes was not only the administrator, but also the board's chairman. 
 There seems to be no way of determining the extent of the board's 
 services in the early formulation of policies, but it may well have been 
 considerable. 
 
 With the beginning of the second public works program in 1935, the 
 services of the board became superfluous. Other agencies had been created 
 by the President, outside the P.W.A. structure, to assist in the formula- 
 tion and administration of policies. 20 No formal order ending the services 
 of the board was issued, but for all practical purposes it no longer exists. 21 
 Even before its complete demise, regular meetings had been abandoned. 
 
 The Administrator and Assistant Administrator 
 While the appointment of Mr. Ickes to the special board was an 
 ex officio one, his appointment as administrator was in personam. 22 No 
 
 15 See P.W.A. Press Release No. 31. 
 
 ,6 Cf. L. F. Schmeckebier, New Federal Organizations (1934), p. 95. 
 "See, for example, P.W.A. Press Release No. 165. 
 
 18 Senate Document No. 167, Public Works Administration, 73d Congress, 2d Session, 
 serial 9705. P- 5- 
 
 l9 This statement is based on the prominent role assumed by the administrator in official 
 pronouncements, and is confirmed by officials of the P.W.A. with whom the writer has talked. 
 OT See chap, i, supra. 
 
 "Hearings before the Subcommittee of the Senate Committee on Appropriations, op. cit., 
 P- 315- 
 
 J, Cf. Executive Orders Nos. 6174 (June 16, 1933) and 6198 (July 8, 1933)- 
 
GENERAL ORGANIZATION AND FUNCTIONS 
 
 33 
 
 especial significance seems to attach to this fact, except that it may indi- 
 cate the desire of the President that the P.W.A. and the Department of 
 the Interior function separately from each other. 
 
 The office of administrator is the one position in the P.W.A. that was 
 specifically authorized by statute. The Recovery Act provided that all 
 the powers of the P.W.A. were to be exercised by a "Federal Emergency 
 Administrator of Public Works." 23 It said nothing, however, concerning 
 the method of appointment, term of office, or salary of that officer. Mr. 
 Ickes receives no compensation for his services with the Public Works 
 Administration. He serves at the pleasure of the President, who ap- 
 pointed him without action by the Senate. 
 
 Had any change been effected in the person of the administrator after 
 the enactment of the Emergency Relief Appropriation Act of 1935, the 
 consent of the Senate to the new appointment would, perhaps, have been 
 required. One provision of that act required such approval for the ap- 
 pointment of any administrator or other officer thereafter named to have 
 general supervision at the seat of the government over the program and 
 work contemplated by the joint resolution. This provision was limited 
 to officers paid at least $5,000 per annum from the funds appropriated 
 at the time. 24 
 
 Mr. Ickes' control over the Public Works Administration has been at 
 least as complete as his corresponding powers in relation to the Depart- 
 ment of the Interior. He is authorized to establish such agencies as 
 he may find necessary, to retain such employees as are needed, and to 
 prescribe their duties, responsibilities, and tenure. 25 On one occasion, 
 the President even gave the administrator power to alter or waive regu- 
 lations set forth in an executive order. 26 The administrator is, of course, 
 directly concerned with the larger problems of policy and with contacts 
 with other governmental officers and the public. 
 
 The assistant administrator, at one time called the deputy adminis- 
 trator, is appointed by his chief and also serves for an indefinite term. 
 He exercises such powers as may be agreed upon between him and the 
 administrator. The many duties of the Secretary of the Interior perhaps 
 explain the gradual ascendancy of the assistant administrator to a position 
 of real authority. 27 By the middle of 1935, the earlier personal regime 
 of Administrator Ickes was ending, and important powers were vested 
 in the assistant administrator. He was given the power to make the 
 
 J3 48 Stat, at L., 195, 200, section 201 (a). 
 M 49 Stat, at L., 115, section 3. 
 
 '"Executive Orders Nos. 6252 (August 19, 1933) and 7064 (June 7, 1935)- 
 2a Ibid. t No. 6929 (December 26, 1934). It was provided, however, that changes in rules 
 carrying criminal penalties required the consent of the President. 
 
 "The Attorney General, who is authorized to render opinions only to the heads of execu- 
 tive departments or the President, generally addressed matters dealing with the P.W.A. to the 
 Secretary of the Interior, but several early opinions were addressed to the P.W.A. Cf. 37 
 Op. Atty. Gen., 305, 413, 477. 
 
34 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 formal application to the President for allotments to the P.W.A., and to 
 execute offers to make loans and grants to applicants. 28 This was done 
 following several changes in key personnel, including the appointment of 
 a new assistant administrator. 29 In addition to his more general powers 
 of policy determination, that officer also exercises general supervision 
 over the functioning of the establishment. 
 
 Staff Divisions of the Administrator's Office 
 
 The administrator has from time to time created several offices pri- 
 marily concerned with aiding him in maintaining effective control over 
 the workings of the establishment. Among these may be numbered 
 several personal and executive assistants. The precise number of these 
 has varied, and, in addition, frequent use has been made of employees 
 of the Department of the Interior. Since the beginning, one of these ad- 
 ministrative assistants has headed the public relations division, which 
 edits and originates press publicity under the direct supervision of the 
 administrator. 30 The administrator has also been aided by a general 
 counsel, serving as his personal legal adviser, and by a liaison officer for 
 contacts with municipalities. 31 The office of general counsel was later 
 merged with the directorship of the P.W.A. legal division, and, among 
 other changes, an assistant on labor relations has been added. 32 A division 
 of investigations, noticed later in this chapter, also functions under the 
 close supervision of the administrator. 
 
 The creation of a division of coordination and control was ordered 
 by the assistant administrator during 1935, but the order was subse- 
 quently rescinded. 33 Had that division actually functioned as originally 
 intended, it would have been responsible for the effective speeding up 
 of the works program, from the time applications were initiated to the 
 final completion of such projects as were approved. 
 
 Personnel Officers. — Congress authorized the selection of personnel 
 by the administrator without regard to the provisions of the civil service 
 laws or the classification act. 34 The administrator first chose to exercise 
 this power with the aid of a division of appointments attached to his im- 
 mediate staff. The division was headed by an administrative assistant. 35 
 During 1935, however, a director of employment was created to handle, 
 
 ^Administrative Orders Nos. 21 (May 20, IQ35) and 68 (July 18, 1935). 
 
 M Ibid., No. 19 (May 17, 1935). The full title of this officer is "Assistant Administrator in 
 Charge of Public Works Administration." 
 
 ^Press releases have been issued at irregular intervals since the P.W.A. began to function. 
 The releases appear in mimeographed form, and are serially numbered (with some gaps), but 
 generally bear no date. 
 
 "Senate Document No. 167, op. cit., p. 7; and P.W.A. Press Release No. 74. 
 
 32 Information obtained by correspondence. 
 
 33 Administrative Orders Nos. 77 (July 31, 1935) and 123 (February 26, 1936). See also 
 note 42, infra. 
 
 M 48 Stat, at L., 195, 200, section 201 (b). 
 "Senate Document No. 167, op. cit., p. 7. 
 
GENERAL ORGANIZATION AND FUNCTIONS 
 
 35 
 
 under the administrator's direction, all applications for appointments. 
 The administrative assistant continues to care for matters relating to 
 employees already in the service. 36 
 
 Advisory Board on Contract Awards. — The Public Works Adminis- 
 tration is interested in the integrity of all bidders who offer to do work 
 on projects which it finances in part or in their entirety. Its approval is 
 necessary before any contract for construction may be awarded by recipi- 
 ents of P.W.A. funds. Information with respect to the integrity of 
 bidders was for a time obtained through a private bureau of contract 
 information, the services of which were retained by the P.W.A. This 
 practice was discontinued during July, 1935, largely, it appears, because 
 of the infrequent use of the bureau's reports and the fact that appro- 
 priate performance bonds have always been required from contractors. 37 
 A list of all contractors with whom the P.W.A. has had unsatisfactory 
 experiences has, however, been maintained at the Washington offices. 
 Awards to such bidders may not be made until the approval of the central 
 office has been obtained. It may be noticed, also, that agencies of the 
 national government do, by decision of the Comptroller General, possess 
 the right completely to debar individual bidders, at least on federal 
 projects. 38 
 
 An advisory board on contract awards was created on June 29, 1936. 39 
 The functions of the board related only to federal contracts, at least 
 according to the terms of the order establishing it. It was concerned 
 chiefly with contracts for housing and slum clearance. The five-member 
 board was given the power to investigate frauds relating to bids and con- 
 tracts, and to make recommendations for appropriate action to the admin- 
 istrator. This might include the debarring of the offender, for a 
 reasonable and definite period of time, from participation in future 
 P.W.A. federal contracts. 
 
 The Executive Officer 
 
 Next in the hierarchy of the P.W.A. is the executive officer. Once 
 described as a glorified chief clerk concerned primarily with matters of 
 procedure, 40 he seems to have assumed a position of some importance. 
 Although many of his duties are of a routine administrative character, 
 he is, nevertheless, the chief officer concerned with matters of general 
 administration, as distinguished from matters of policy or the technical 
 aspects of the establishment's work. 
 
 Through his immediate staff agency, the administrative division, the 
 
 38 Administrative Order No. 69 (July 22, 1935). The matter of personnel is treated at 
 some length in chap, iii, infra. 
 
 "Ibid., No. 65 (July 17, 1935). 
 
 ^See 14 Comp. Gen., 313, No. A-56726 (October 17, 1934). 
 "Administrative Order No. 149 (June 29, 1936), 1 Fed. Reg., 857. 
 *°S. C. Wallace, The New Deal in Action (1934), p. 216. 
 
36 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 executive officer supervises purchases, files, and correspondence. He 
 also sees to the preparation, and accounting for, of transportation vouch- 
 ers, pay rolls, and other disbursements. 41 By controlling such items, the 
 executive officer is able to bring about a coordination of at least the 
 more routine aspects of the procedure of the Washington and field 
 offices. 42 
 
 The purchasing of necessary supplies and equipment is handled 
 through the Department of the Interior, although the P.W.A. operates 
 its own storeroom and a shipping room for small parcels. Required 
 printing is taken up directly with the government printing office. For 
 some time, purchases were made on an emergency basis, without competi- 
 tive bidding or the use of regular government facilities. Subsequently, 
 however, orders were issued restricting emergency purchases to a mini- 
 mum, and it became necessary for the field offices to requisition the 
 central office for furniture, supplies, and equipment. Under the Emer- 
 gency Relief Appropriation Act of 1935, a measure of centralized 
 purchasing for all emergency agencies was made possible through the 
 creation of a revolving fund, from which purchases were to be made 
 through the procurement division of the Department of the Treasury. 43 
 The P.W.A. has frequently made purchases under contracts negotiated 
 by the procurement division, but has not made use of the revolving fund. 44 
 
 For a time, the executive officer had under his general supervision a 
 division of economics and statistics. This division was created to supply 
 statistical information and analyses, and to coordinate the statistical work 
 of the P.W.A. with that of other agencies of the national government. 
 During 1936, the division was consolidated with the projects division, 
 noticed later in this chapter. 45 
 
 The Primary Field Offices 
 
 State Advisory Boards and State Engineers. — In the early stages of 
 P.W.A. activity there was set up in each state an advisory board con- 
 sisting, generally, of three members. 46 Occasionally, state and local 
 officials were selected along with other persons. It has been said that, 
 by direction of the President, members of both major parties were 
 
 "The accounts of the P.W.A. have been subject to audit by the Comptroller General since 
 the beginning. See also the specific requirements of Executive Order No. 6549 (January 3, 
 1934) . 
 
 ^A "procedure staff" was set up under the executive officer during March, 1936. This 
 organization limited its activities principally to investigating the field offices, and establishing 
 therein standard filing systems and records. An earlier "methods staff" functioned from Febru- 
 ary to October, 1934, under the supervision of an administrative assistant to Mr. Ickes. This 
 unit made a number of studies relating to procedural matters, one of which led to the estab- 
 lishment of a control docket file as the repository for all project records of an official nature. 
 (Information obtained bv correspondence.) 
 
 "Executive Order No. 7151 (August 21, 1935). 
 
 "Information obtained by correspondence. 
 
 "Administrative Order No. 130 (March 19, 1936I. 
 
 "There were no boards in the territories. On the subject of the state advisory boards see: 
 P.W.A. Press Releases Nos. 25, 26, 65, and 77, and Circular No. i, op. cit., p. 11. 
 
GENERAL ORGANIZATION AND FUNCTIONS 
 
 37 
 
 chosen. 47 The members received a per diem compensation and reim- 
 bursement for their necessary travelling expenses. 
 
 The state boards had various functions. Their first duty was to 
 stimulate the submission of applications for allotments and to circulate 
 information as to the projects eligible for grants and loans. It was their 
 duty, also, to elicit from applicants the data necessary for an adequate 
 consideration of each request for funds. The boards were directed to 
 make a report as to each application, and to forward both the application 
 and the report to Washington. This did not constitute a final disposition 
 of any project, but simply either a favorable or an unfavorable recom- 
 mendation. In considering the applications before it, the boards were 
 directed to take into account the announced policies of the P.W.A. In 
 actual practice, the boards do not seem to have studied applications in 
 detail, but only to have reviewed the detailed reports submitted by 
 other personnel in the state offices. The boards merely recommended 
 approval or disapproval of the applications, basing their action upon these 
 reports and upon their own examination of the social desirability and 
 necessity of the projects. 
 
 As executive officer of these boards, there was assigned to each a 
 state engineer. Despite this title, these officers were employees of the 
 Public Works Administration. Through them, the boards were given the 
 authority to employ such necessary personnel as might be authorized by 
 the administrator. The engineers organized the state offices, and received, 
 recorded, and examined all applications. The examination made by these 
 engineers and their subordinates was the only detailed analysis made in 
 the state offices, and, it is believed, the advisory boards usually adhered 
 to the engineer's recommendations. Each analysis was required to cover 
 such topics relating to the project as: its necessity and social desirability, 
 its relation to coordinated planning, its technical soundness, the legal 
 authority of the applicant to construct and operate the project and to 
 issue the necessary debt obligations, and the assurances that the proposed 
 loan, if any, would be reasonably secured. In the case of wholly or 
 partly self-liquidating undertakings, the estimates of potential revenues 
 were required to be closely scrutinized in order to make certain that they 
 were not exaggerated. 48 
 
 The functioning of the state boards was considerably criticized by a 
 committee of the United States Conference of Mayors, which made a 
 survey of the activities of the P.W.A. 49 The boards were rather slow 
 in examining projects and in forwarding reports to Washington, largely 
 due to the lack of an adequate technical staff. Under the rulings of the 
 
 "Ickes, op. cit., p. 60. 
 
 48 P.W.A. Bulletin No. 1, Instructions to State Engineers, etc. (1933), p. 1. 
 
 "The report was published in P.W.A. Press Release No. 171 (September 29, 1933). 
 
38 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 Comptroller General, legal services could not be contracted for, 50 and, 
 in most cases, legal advice was not available except from Washington. 
 Criticism was also directed at the fact that applicants generally were not 
 given any opportunity for a hearing, nor were they always supplied with 
 a statement of the reasons for the boards' action when applications were 
 rejected. On February 17, 1934, the state advisory boards were notified 
 to turn all their records over to the state engineers, and the boards ceased 
 to exist on February 28. 51 This action constituted a partial demobiliza- 
 tion of the P.W.A. and was caused by a temporary exhaustion of funds. 
 
 State Directors. — With the abolition of the advisory boards, the state 
 engineers, who continued to function, became the principal representatives 
 of the Public Works Administration in the field. Because of the halt 
 called on the reception of further applications, the state engineers now 
 became chiefly concerned with the inspection and supervision of projects 
 previously approved. When additional funds were subsequently made 
 available, applications were once more solicited, but the state advisory 
 boards were not revived. However, the title of state engineer had been 
 productive of much confusion, since it was not always clear that this 
 official represented the national government. That title had apparently 
 been selected in the belief that the duties of the position would require 
 chiefly engineering training. Now, the new title of state director was 
 adopted, and the engineers were designated as acting state directors for 
 their respective areas. 52 This title was somewhat less confusing and more 
 indicative of the actual responsibility of the position. 
 
 It was at this time that the general decentralization, mentioned earlier 
 in this chapter, took place. Legal, engineering, and financial experts 
 were transferred from Washington to the state offices. They were given 
 the duty of examining applications, in addition to some supervisory 
 powers over projects. The state director was designated the executive 
 officer of the state office and its administrative head. All functions 
 formerly endowed upon the state engineers were now conferred upon 
 the state director. However, instead of relying largely upon his own 
 discretion, that officer was now required to act upon the advice of his 
 specialized personnel, assigned to him from Washington. 
 
 In addition to the director, and in a few cases an assistant director, 
 each state office was composed of four sections. The administrative 
 section, headed either by an assistant director or a chief clerk, consisted 
 of all non-technical personnel, such as stenographic, clerical, and like em- 
 
 60 Cf. 14 Comp. Gen., 632, No. A-59730, (February 19, 1935). 
 
 "Senate Document No. 167, op. cit., p. 8. In a few cases one state engineer served two 
 states. The number of such cases has varied from time to time. In the territories the chief 
 executive usually acted for the P.W.A., and applications from the District of Columbia were 
 handled from the central office. 
 
 "Administrative Order No. 20 (May 18, 1935). 
 
GENERAL ORGANIZATION AND FUNCTIONS 
 
 39 
 
 ployees. The legal section, under a chief counsel, included all counsel 
 and attorneys, whatever their rank or exact title. The engineering section, 
 under a chief engineer, who might also be the state director, consisted 
 of all engineers and engineer-examiners. The finance section, under a 
 chief finance examiner, included all employees qualified to review the 
 financial aspects of applications. 
 
 The three technical sections, each under their individual chiefs, were 
 alone given the power to draft the specialized reports on projects; it 
 was not contemplated that the director would attempt to perform these 
 services. Each section constituted a part of the director's staff, and was 
 subject to his control in ordinary administrative matters. Yet each was 
 also a part of the corresponding division of the central office, and was 
 subject to control from the division chiefs at Washington. The state 
 director was given the right to dissent from any action taken by his 
 technical subordinates, and to forward his recommendations along with 
 their reports. Obviously, the precise degree of real authority exercised 
 by the director would depend on the individual. The director's close 
 relationship to the administrator and assistant administrator 53 would 
 allow an aggressive individual possessing the confidence of his technical 
 assistants to exercise great influence, despite his lack of actual power over 
 them and their decisions. 54 
 
 The state director's office also had some functions relating to projects 
 under construction. These duties resembled those of a consulting engi- 
 neer, and not those of an engineer inspector. In connection with these 
 duties, too, the state director was expected to rely largely upon the 
 recommendations of his staff, but, since he himself was usually an engi- 
 neer, he ordinarily exercised considerable personal discretion. With re- 
 gard to projects under construction, the state director had the power to 
 approve or disapprove the award of contracts, to determine the desir- 
 ability of construction by force account, to mediate in labor disputes and 
 controversies as to payments for services and equipment, and to super- 
 vise the insurance on completed projects. 55 The director was expected to 
 visit projects under construction, and, in general, to keep the beneficiary 
 of P.W.A. funds advised of his obligations under the establishment's 
 regulations. Only in cases where otherwise unadjustable controversies 
 arose as to compliance with engineering and architectural specifications 
 did the state director become concerned with the direct inspection of 
 
 63 See Administrative Order No. 112 (December 30, 1935) and its revision, dated June 8, 
 
 1936. 
 
 M The extent to which these unusual relationships were caused by a provision of the 
 Emergency Relief Appropriation Act of 1935 would be difficult to determine. That act, among 
 other things, required the approval of the Senate for the appointment of any state or regional 
 administrator who was to be paid a salary of $5,000 or more from the funds appropriated by 
 the act (49 Stat, at L., 115). The only exception was in favor of persons already serving. Was 
 the state director given so little real power as a defense against the possible effects of senatorial 
 courtesy? 
 
 M Cf. Administrative Orders Nos. 74 (July 25, 1935) and 5, revised (February 4, 1936). 
 
4 o 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 construction. In all other cases, he was simply expected to obtain the 
 information necessary for competent inspection, to be used by the officials 
 charged with such duties. 56 
 
 In the case of rather elaborate projects, a special representative 
 charged with the supervisory duties of the state director was appointed 
 from Washington. While, at an early date, certain of these project engi- 
 neers reported directly to the central office, they later were required to 
 report to the director for the state in which the project was located. 57 
 
 Regional Directors. — During the first four years of activity, the 
 P.W.A. made very little use of regional areas as units of administration, 
 although some of the smaller states were occasionally grouped together 
 under a single state director. Similar groupings were at times made for 
 inspection purposes, under the state engineer inspectors described below. 
 It was not, however, until the fall of 1937 that regional areas were set 
 up as the basic administrative units. The change made at that time was 
 not motivated by the belief that it would be conducive to greater 
 efficiency, but by the desire to achieve economies in the costs of 
 administration. 58 
 
 The country was divided into seven regions, consisting of from three 
 to seven states, each headed by a regional director. 59 This officer was 
 placed in charge of the bulk of the work connected with the supervision 
 of construction, and of the surviving duties of the former state directors. 
 However, after the examination of applications for funds had ceased, 
 the regional directors did not exercise those duties of the state directors 
 that related to the consideration of applications. It appears, then, that 
 the regional directors now serve in a dual capacity; they act both as chief 
 consulting engineers with regard to the construction contracts and speci- 
 fications and as supervisory officers for the engineers assigned to watch 
 the progress of construction. 
 
 The Examining Divisions 
 
 Most applications for funds were first received at the state offices 
 of the P.W.A. , and were there examined. But, whether originally filed 
 
 ^Administrative Order No. 112, revised (June 8, 1936). 
 s "'Ibid., Nos. 66 (July 18, 1933) and 132 (March 23, 1936). 
 "P.W.A. Press Release No. 3251 (October 1, 1937). 
 
 "See ibid., Nos. 3258 and 3259. The seven regions, and their headquarters are as follows: 
 (1) Maine, New Hampshire, Vermont, New York, Massachusetts, Connecticut, Rhode Island, 
 Pennsylvania, Maryland, Delaware, and New Jersey, with a branch office at Harrisburg, and the 
 headquarters in New York City; (2) Wisconsin, Michigan, Illinois, Indiana, Ohio, and West 
 Virginia, with a branch office at Columbus, and the headquarters in Chicago; (3) Virginia, 
 Kentucky, Tennessee, North Carolina, South Carolina, Georgia, Alabama, Mississippi, and 
 Florida, with headquarters in Atlanta; (4) Montana, Wyoming, North Dakota, South Dakota, 
 Nebraska, Minnesota, Iowa, and Missouri, with headquarters in Omaha; (5) Colorado, New 
 Mexico, Kansas, Oklahoma. Arkansas, Louisiana, and Texas, with headquarters in Fort Worth; 
 (6) California, Nevada, Utah, and Arizona, with headquarters in San Francisco; (7) Washington, 
 Oregon, and Idaho, with headquarters in Portland. The chief officers in each region are the 
 director and assistant director, and associate directors in two instances, an engineer, and a 
 counsel. 
 
GENERAL ORGANIZATION AND FUNCTIONS 
 
 41 
 
 with the state or central office, all applications were scrutinized by em- 
 ployees of the examining divisions, about to be noticed. Prior to 1935 the 
 detailed examinations were made at Washington ; after that date they 
 were made in the field. The engineering division, described below, was 
 merged with the inspection division late in 1937. 
 
 Legal Division. — As its name would indicate, the legal division is 
 primarily concerned with the various problems of law affecting the ap- 
 plicants, the proposed projects, and the debt obligations issued as security 
 for any loan. 60 With regard to applications under consideration, the 
 division was authorized to investigate the eligibility of applicants for 
 loans and grants, their legal powers with respect to the application, and 
 their authority to issue such securities as might be involved. In short, 
 the division was expected to obtain all the information with respect to 
 the undertaking that a prudent investor should possess. The division 
 also was authorized to point out items of doubtful legality in the re- 
 ports of other examining divisions. 61 The legal division, furthermore, 
 supplies the establishment's officers with legal opinions and advice, and 
 its approval as to form and substance is ordinarily a prerequisite for the 
 issuance of bulletins and other official announcements. 
 
 Compliance with legal formalities is supervised by the division from 
 the time the application is initiated until the government's interest in the 
 undertaking has lapsed. In the case of projects financed by a loan, this 
 would mean until after the bonds issued have been redeemed by the ap- 
 plicant or sold by the P.W.A. 
 
 Engineering Division.- — The engineering division is concerned with all 
 engineering and architectural matters relating to projects. 62 The technical 
 soundness of all projects is, of course, a matter of great importance, and 
 the division was empowered to rule upon the competence of engineers 
 and architects employed by the applicant. The division was authorized 
 to determine whether the estimated costs were actually adequate and 
 reasonable, and whether the design was sound, and, in the case of 
 revenue-producing enterprises, to make a careful study of the financial 
 aspects of the projects. The division, in short, serves as both an exam- 
 ining agency and as a technical adviser to the administrator. 63 
 
 Apart from the examination of applications, the division possesses 
 supervisory powers over practically all matters relating to construction, 
 but does not actually supervise construction. It assists in the enforce- 
 ment of all regulations of an engineering nature, and, to that end, ex- 
 
 ^See, particularly, Administrative Order No. 48 (June II, 1935) and its supplements, 
 dated July 1-5, 1935, and October 16, 1935. 
 
 ^Ibid., Nos. 75 (undated) and 121 (February 21, 1936"). 
 e2 Ibid., No. 57, revised (February 4, 1936). 
 
 63 The division also compiled information as to unit costs of particular materials. See 
 P.W.A. Press Release No. 473. 
 
42 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 amines all advertisements for bids and the specifications accompanying 
 them. It is common for a representative of the field section of the di- 
 vision to attend bid openings, and to see to it that contracts are normally 
 awarded to the lowest responsible bidder. Following such awards, the 
 division examines the performance bonds and other security offered for 
 faithful performance of the contracts and for compliance with the 
 regulations of the establishment. The field employees of the division 
 may also make recommendations on the desirability of force-account 
 construction, on variations of the ordinary regulations in particular 
 cases, on the insurance of completed projects, and on other matters with 
 respect to which they are qualified to give judgment. 
 
 Finance Division. — The third examining division, the finance division, 
 inspects applications with particular regard to the security offered for 
 such loans as are requested, and to the ability of the applicant to 
 furnish his share of the project costs. This involves, of course, an ex- 
 amination of the applicant's financial condition. 64 The division gives 
 consideration to alternative plans for financing projects, supervises the 
 making of loan agreements, approves or disapproves of requisitions for 
 payments on account of such agreements, and maintains contacts with 
 recipients of loans in an effort to assist them in meeting payments on their 
 obligations. The division also makes recommendations as to the dispo- 
 sition of any bonds accepted, and, in cooperation with other officials, de- 
 termines whether and to what extent insurance is necessary on completed 
 projects in order to safeguard the government's interests. As may be 
 gathered, the division is more concerned with projects financed by a grant 
 and loan than with those in which only a grant is involved, although the 
 financial aspects of practically all applications come within the purview 
 of the division at one time or another. 
 
 Transportation Loans Division. — The transportation loans division, 
 which has no representatives in the field, was created to supervise loans 
 to railroads for maintenance and equipment. 65 The power to make such 
 loans was possessed by the P.W.A. only under the authority conferred by 
 the Recovery Act, and was limited to such items as might be approved 
 by the Interstate Commerce Commission. 66 Under that act, loans, but 
 not grants, were made for maintenance purposes, rails, and other equip- 
 ment, and for grade-crossing elimination. The division functioned in 
 accordance with policies created in consultation with the Federal Coordi- 
 nator of Transportation, during the period when that office was in ex- 
 istence. Applications coming from railroad corporations were accorded 
 an immediate preliminary consideration, but no detailed investigation was 
 
 64 Administrative Order No. 121 (February 21, 1936). 
 
 M P.W.A. Press Release No. 274. 
 
 e6 48 Stat, at L., 195, 200, section 203 (a). 
 
GENERAL ORGANIZATION AND FUNCTIONS 
 
 43 
 
 made until after the approval of the Interstate Commerce Commission 
 had been obtained. The division compiled credit and operation reports 
 on the carriers, and also prepared the necessary bond-purchase contracts. 
 After the P.W.A. abandoned its policy of making loans to the railroads, 
 the division restricted its activities to supervising the redemption of the 
 obligations that had been accepted. 
 
 Power Division. — A power division, created during 1935, 67 functioned 
 until late in 1937 for the purpose of giving special attention to applica- 
 tions relative to publicly owned power plants. The division was given 
 its own staff of legal, engineering, and financial technicians who 
 operated out of the Washington office. Except for the inspection of con- 
 struction and the maintenance of accounting systems, the division pos- 
 sessed complete jurisdiction over power projects, including even the 
 handling of many aspects of the litigation in connection therewith. Power 
 projects were at an early date defined to include gas as well as other 
 generating and distributing systems, but electric power projects are most 
 significant. 
 
 While applications for power projects were first considered in the 
 state offices, the division's control over such applications had been quite 
 complete. The state offices were required to give the right of way to 
 applications dealing with power projects, and to forward them to Wash- 
 ington promptly if it was found impossible to complete the examination 
 within a reasonable period of time. That period was defined as thirty 
 days. It was further required that applications were to be turned over 
 to the power division within twenty-four hours after being received at 
 Washington. Obviously, these detailed provisions reflect the great interest 
 of the P.W.A. , and of the President, in publicly owned power facilities. 
 The activities of the P.W.A. in this connection are designed to make it 
 possible for local governmental bodies to provide their residents with 
 cheap electricity, and, in some cases, to provide a market for the power 
 generated under the auspices of other agencies of the national government. 
 
 Projects Division. — The projects division is one of the more im- 
 portant units of the Public Works Administration. It prepares abstracts 
 of the reports submitted by the other examining divisions, and submits 
 such summaries to the higher authorities. The division removes from 
 the eligible lists applications against which an adverse report has been 
 lodged by any examining division, and submits such applications to the 
 assistant administrator for final action. It was with such duties that the 
 projects division was chiefly concerned so long as applications for funds 
 were being received. The division also had an important part in determin- 
 
 <5'P.W.A. Press Releases Nos. 1522 and 1534; Administrative Order No. 76 (July 31, 1935), 
 with supplement dated August 9, 1935, and No. 109 (December 19, 1935). 
 
44 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 ing the priority of allotments, and it reviewed correspondence relating to 
 applications and projects. 68 
 
 Two other functions of the projects division were inherited from 
 other offices that were abandoned. Applications sponsored by agencies 
 of the national government were originally cared for by a separate federal 
 projects division, but that agency was soon consolidated with the projects 
 division. 69 Since then, such applications have first been considered by the 
 projects division, but applications for federal projects have been few since 
 the middle of 1935. The projects division is also the agency entrusted 
 with gathering statistics and making incidental studies of a research 
 character, a function which it received after the dissolution of a division 
 of economics and statistics. 
 
 The Boards of Review 
 
 The P.W.A. has not always been satisfied to make its final decisions 
 as to allotments solely on the basis of the recommendations of these 
 examining divisions. Upon occasion, special boards have been constituted 
 to report on projects of an unusual size or on those which presented 
 highly technical problems. 70 In addition, several boards of review func- 
 tioned on a more permanent basis. 
 
 Technical Board of Reviezu. — A technical board of review was created 
 at an early date and attached directly to the office of the deputy ad- 
 ministrator. 71 It was composed of a permanent chairman and a varying 
 number of engineers in private practice, together with a staff of exam- 
 iners. The board was designed to consider applications of a technical 
 and controversial character, which had been approved in principle but 
 against which protests or adverse reports had been lodged. Other mat- 
 ters of a highly involved nature were also referred to the board from 
 time to time. 
 
 While obviously ineligible applications were set aside by the chair- 
 man, the board itself was authorized to hold public hearings on those 
 that were of doubtful eligibility or expediency. It considered claims 
 that full consideration had not been given the application by other 
 P.W.A. officials, or that supplementary facts placing the application in a 
 different light had been obtained. In such cases, the board would make 
 a new study of the issues presented in writing, both by the P.W.A. staff 
 and by other interested parties, as a preliminary to open hearings. The 
 
 ^See Senate Document No. 167, op. cit., p. 7, and P.W.A. Press Release No. 527. 
 
 M A rather elaborate investigation of the desirability of such action was made at the time, 
 and, so the writer has been informed, it was estimated that the consolidation would result in an 
 annual saving of $70,000 in personnel costs alone. 
 
 ™See, for example, P.W.A. Press Releases Nos. 657 and 11 76. 
 
 "Ibid., Nos. 94, 157, and 573. See also Circular No. 1, op. cit., p. 9. 
 
GENERAL ORGANIZATION AND FUNCTIONS 
 
 45 
 
 decisions of the technical board of review were transmitted to the as- 
 sistant administrator without being made public. 
 
 The board was at one time termed a "breakwater upon which the 
 waves of protest which follow a disapproval can beat to their hearts' 
 content" without impeding the flow of other applications. 72 Yet, in the 
 general reorganization during 1935, the board was first reconstituted and 
 then abolished. 73 This was done in view of the fact that thereafter ap- 
 plications, even if approved, were required to be submitted to a further 
 review by agencies outside of the P.W.A. The order dissolving the board 
 indicated that, in the future, applicants dissatisfied with the disposition 
 of their requests might secure a hearing before a committee consisting 
 of one representative from each of the several examining divisions. 
 
 Electric Power Board of Review. — An electric power board of review 
 functioned during the second year of the Public Works Administration, 
 but its duties were later absorbed by the power division, with which it 
 must not be confused. 74 Its functions were purely advisory and related 
 only to the immediate program. It reviewed disapprovals and special 
 conditions imposed by any division with respect to power applications, 
 and made recommendations thereon. The board was directed to formu- 
 late instructions for the guidance of the other divisions so that uniform 
 policies might be evolved. 
 
 The creation of the board was apparently due to the great variety of 
 conditions under which applications for the construction of power facili- 
 ties were made, the controversial character of certain projects, and the 
 important economic factors involved in the general question of power 
 development. The technical board of review and the projects division 
 were subordinated to the power board in accordance with its status as 
 an appellate body. 
 
 Labor Board of Review.- — The labor board of review, directly under 
 the administrator, was appointed to hear all labor issues arising in con- 
 nection with projects financed by the Public Works Administration. 75 
 The board consists of three members, who not only represent different 
 sections of the country but also different interests. One member, not 
 otherwise connected with the P.W.A., represents the establishment and 
 acts as chairman; another represents labor, but is not himself a member 
 of a building trades union, while the third member acts similarly in behalf 
 of the contractors. 
 
 "Ickes, op. cit., p. 71. 
 
 "Office Order No. 3 (May 13, 1935) and Administrative Order No. 50 (June 24, 1935). 
 
 ''^Report of the Executive Secretary of the Executive Council (August 25, 1934), p. 10. 
 See also P.W.A. Press Release No. 700. The board had three members. 
 
 "The appointees were: Dr. Lindsay Rogers, of Columbia University, chairman, James 
 Wilson, of Cincinnati, representing labor, and E. J. Russell, of St. Louis, an architect, repre- 
 senting the contractors. Ickes, op. cit., p. 76, and P.W.A. Press Release No. 337. For the 
 N.R.A. labor advisory board see Prentice-Hall, Inc., Federal Trade and Industry Service 
 (1st ed.), paragraph 28,006. 
 
46 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 The board is expected to study the problems arising during the life 
 of construction contracts, as caused by changing economic conditions, 
 and was originally expected to act as a liaison agent between the P.W.A. 
 and the Department of Labor. It considers such matters as wage disputes 
 and controversies relating to the classification of labor and to working 
 conditions. It attempts to settle such disputes as well as strikes and lock- 
 outs. The board's functions are carried on under provisions quoted 
 from Title One of the Recovery Act, but these are embodied in agree- 
 ments with the P.W.A. as a contract obligation, occasionally with some 
 modifications. The board was not, therefore, affected by the Supreme 
 Court's decision with respect to the illegality of the code-making pro- 
 visions of the Recovery Act. The decisions of the board are declared to 
 be binding on the parties, and actually seem to have been accepted 
 regularly. 76 Normally, of course, labor disputes would not come before 
 the board unless other officials of the establishment have been unable to 
 effect a settlement. 
 
 The Housing Division 
 
 The housing division was one of the first units of the P.W.A. to be 
 created. 77 An experiment with a housing corporation was brought to 
 an end as a result of difficulties in the transfer of funds to the corpo- 
 ration, 78 and the housing division consequently remained the one unit 
 of the establishment possessing authority to act in the field of low-cost 
 housing and slum clearance. The division possessed complete jurisdic- 
 tion over applications for such purposes, whether the request for funds 
 came from limited-dividend corporations or from other bodies. In ad- 
 dition to a director and an assistant director, and a varying number of 
 associate directors and consultants, the division had its own administra- 
 tive staff both in Washington and in the field. Field representatives, 
 however, were appointed only where projects were being considered 
 or constructed. 
 
 The major functions of the housing division were carried on by five 
 bureaus. The branch of initiation and recommendation considered re- 
 quests for both federal and non-federal housing allotments, and gathered 
 the necessary preliminary information, conducted field studies, and ex- 
 amined the financial and engineering aspects of proposed projects. The 
 branch of plans and specifications was concerned chiefly with the detailed 
 drafting of plans for federal projects. A local firm of architects was 
 generally retained, but the bureau's own staff made or suggested such 
 revisions as were necessary. The Comptroller General approved the re- 
 
 76 See A. D. Gayer, Public Works in Prosperity and Depression (1935), p. 99; and L. 
 Rogers, "The Independent Regulatory Commissions," Pol. Sci. Quar. t vol. 52 (1937), pp. 1, 11-13. 
 "P.W.A. Press Releases Nos. 17 and 855. 
 
 7S Ibid., No. 897. See also the section on corporate agencies, chap, iii, infra. 
 
GENERAL ORGANIZATION AND FUNCTIONS 
 
 47 
 
 taining of private architects, although it has been indicated by the Di- 
 rector of Procurement that it is more expeditious and economical to 
 have the entire task done within the governmental departments. 79 The 
 branch of land acquisition was charged with the examination of the titles 
 to required land, and with the duty of obtaining possession, either by 
 compatible purchase or by court action. It was assisted in this work by 
 the Department of Justice and also by private title-abstract firms. 80 
 From the beginning of construction until projects were ready for occu- 
 pancy, the plans were administered by the branch of field supervision and 
 construction. This bureau let the contracts for the demolition of existing 
 buildings and for the erection of new structures, and maintained a watch- 
 ful eye on the progress of construction. The branch of management was 
 created to operate the completed structures, including the leasing of space, 
 the maintenance of the projects, the collection of rentals, and the keeping 
 of the necessary accounts. 81 The establishment saw three possible alterna- 
 tives for the management of the federal projects: (i) direct operation by 
 the national government, (2) leasing of the projects to local public- 
 housing authorities or similar agencies, and (3) sale of the projects to 
 such agencies. Only the first two methods of operation were actually 
 utilized, the third being precluded because of the probable illegality of 
 selling the structures at less than their cost, and the impossibility of 
 selling them otherwise. 82 
 
 The housing division of the P.W.A. continued to function until late 
 in 1937, at which time the division was absorbed by the new United 
 States Housing Authority, a semi-autonomous unit within the Department 
 of the Interior. 83 The transfer of functions included jurisdiction over 
 projects, whether completed or not. In addition, all employees of the 
 P.W.A. connected with the housing activities of the establishment were 
 also authorized to be transferred. Since then, the Public Works Ad- 
 ministration has not been directly concerned with housing and slum- 
 clearance activities. 
 
 Project Supervising Agencies 
 
 The Public Works Administration has not maintained a construction 
 force, nor has it, save for federal housing and slum clearance, even 
 awarded contracts for construction. Such matters are left to the recipient 
 of the establishment's funds. From the beginning, however, the P.W.A. 
 
 n ij Comp. Gen., 351, No. A-53680 (May 15, 1934); Hearings before the Subcommittee of 
 the House Committee on Appropriations in Charge of Deficiency Appropriations, First Defi- 
 ciency Appropriation Bill for 1936, 74th Congress, 2d Session, Part I, p. 94. 
 
 80 Report of the Executive Secretary, op, cit., p. 12. 
 
 81 See also P. V. Betters et al.. Recent Federal-City Relations (1936), p. 62. 
 ''Hearings before the Senate Committee on Education and Labor on S. 1685, To Create a 
 United States Housing Authority, 75th Congress, 1st Session, p. 35. 
 
 "Executive Order No. 7232 (October 27, 1937), 2 Fed. Reg., 2707. 
 
4 8 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 has maintained an elaborate supervisory force whose duty it has been 
 to see to it that all proceedings affecting construction are carried on in 
 accordance with the regulations adopted by the P.W.A. and with the 
 conditions inserted in the loan and grant agreements. 84 
 
 Inspection Division. — The most elaborate supervisory agency of the 
 establishment is the inspection division. 85 The division is headed by a 
 director and a divisional executive officer, the latter being charged largely 
 with procedural detail. Other officers review the reports of field in- 
 spectors and other documents relating to construction, and maintain 
 liaison with agents in the field. Technical experts on various types of 
 construction are also located at Washington. An imperfectly developed 
 regional organization was abandoned during 1935, and until the end of 
 1937 actual inspection was in the hands of state and local representatives 
 of the division. At that time, the field units of the inspection division 
 were merged with the offices of the state directors to constitute the 
 regional organization described earlier in this chapter. 
 
 The state organization of the inspection division was quite distinct 
 from that of the state directors. The responsible head of each field office 
 of the inspection division was a so-called state engineer inspector. 86 Ordi- 
 narily a separate head was appointed for each state, but here, too, several 
 of the smaller states were occasionally grouped together for administra- 
 tive purposes. The state engineer inspector was responsible for the 
 effective discharge of the functions of the division within his area, and he 
 supervised the inspectors assigned to individual projects. These agents 
 have been generally termed resident engineer inspectors, or, in the case 
 of housing projects, supervising engineers. One or more such officer is 
 assigned to each project, although in the case of small undertakings one 
 inspector may supervise several different works, while fifty or more 
 inspectors may be found on major undertakings. The resident engineer 
 inspectors now operate out of the regional offices. 
 
 This inspection force has no direct control over the contractors on 
 projects, nor does it take the place of supervision by the contracting body. 
 Recipients of aid from the P.W.A. are required to maintain supervision 
 of construction in their own behalf, in addition to the supervision pro- 
 vided by the establishment. The P.W.A. inspectors begin their activity 
 
 w Even the supervision of construction has not been in the hands of the P.W.A. so far as 
 two classes of projects are concerned. Federal projects were normally supervised by the agencies 
 receiving the allotments, while the inspection of state and county highway projects financed by 
 the P.W.A. was entrusted to the bureau of public roads after March, 1934. Even before that 
 date, the bureau supervised the expenditure of the apportioned road fund of $400,000,000. The 
 more complete delegation of power was made in the interests of economy and efficiency; the 
 bureau possessed the necessary field force and experience, and the inspection force of the 
 P.W.A. was enabled to concentrate on more localized undertakings. Highway and related proj- 
 ects within municipalities are supervised by the P.W.A. P.W.A. Press Releases Nos. 575 
 (March 15, 1014) and 623. 
 
 K Ibid., Nos. 299, 452, and 1044 (October 28, 1934). For the detailed duties of the division 
 see the Manual for Engineer Inspectors (1934). 
 
 M P.W.A. Inspection Division Order No. 46 (December 27, 1935). 
 
GENERAL ORGANIZATION AND FUNCTIONS 
 
 49 
 
 immediately upon receipt of notice that contracts have been awarded and 
 that actual construction is about to start. In general, they are expected 
 to detect any attempt to deviate from the plans and specifications as sub- 
 mitted by the applicant and approved by the engineering division. 87 They 
 are also concerned with the enforcement of agreements between the 
 P.W.A. and the recipients of its funds, and of regulations governing the 
 performance of work and the supplying of materials. All violations are 
 corrected by an identical procedure, whether they relate to questions of 
 material, labor, or design. Summary warnings to contractors are per- 
 mitted, but, ordinarily, the resident engineer first notifies the contracting 
 agency of the violation. Unless an amicable settlement is reached, the 
 contract may be terminated for the breach of its provisions, or the P.W.A. 
 may terminate its financial assistance. 
 
 Division of Accounts. — The division of accounts was created to relieve 
 the administrative division which had become over-burdened. 88 The new 
 division was given a great variety of accounting functions relating to 
 non- federal and slum-clearance projects and to administrative expendi- 
 tures. The division audits the accounts of the establishment's disbursing 
 officers as well as those of the recipients of funds and of their contractors. 
 In the latter connection it supplements the work of the resident engineer 
 inspectors who are not primarily concerned with financial record-keeping. 
 Unlike most other units of the P.W.A., the division of accounts has from 
 the first functioned through regional rather than state offices. There are 
 nine regional units, each in charge of a district project auditor. Agents 
 working out of these offices visit projects under construction and examine 
 the accounts being kept. They are concerned not only with the accuracy 
 of the records themselves, but with any evidence that may reveal viola- 
 tions of P.W.A. regulations. 
 
 In order to expedite the work of the division, a manual of accounting 
 procedure and forms was compiled. 89 This model plan is not mandatory, 
 and the established policy of the division is to accept such accounting 
 systems as it may encounter, provided that they are adequate. Changes 
 in existing systems are required only when the records are such that 
 essential information cannot be obtained. 90 The detailed forms prescribed 
 by the P.W.A. for reports are such, however, that many public bodies 
 were probably forced to revise their accounting methods. Many of the 
 procedures outlined in the manual are applicable to regular municipal 
 services. 
 
 8, P.W.A. Press Release No. 462 and Inspection Division Special Field Order No. 43 
 (March 6, 1936). 
 
 ''Some purely routine accounting duties were later returned to the administrative division. 
 See Administrative Order No. 155 (July 22, 1936). 
 
 "'P.W.A., Manual of Financial and Accounting Procedure for Public Bodies (1014). 
 ">Ibid., p. 3. 
 
5o 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 The auditors are required, among other things, to cooperate with the 
 resident engineer inspectors and to supply them with necessary informa- 
 tion. Similarly, the auditors must discuss their reports with the inspectors 
 before leaving the site of the project. 91 
 
 Division of Investigations. — -The division of investigations operates 
 under the immediate supervision of the administrator and assistant admin- 
 istrator. It was designed to aid them in checking the activities of the 
 various offices and employees of the establishment, and to supplement the 
 work of the other divisions concerned with the examination of applica- 
 tions and the supervision of construction. For several years, a single 
 espionage service functioned for the Public Works Administration, the 
 Department of the Interior, and other agencies under the direction of Mr. 
 Ickes. This joint enterprise seems to have been caused by the high esteem 
 in which the division's chief, Louis R. Glavis, was held by the administra- 
 tor, and to the desire to benefit from his ability to the greatest possible 
 extent. Following the resignation of Mr. Glavis, a separate division of 
 investigations was created for the P.W.A. 92 However, agents assigned 
 to the P.W.A. had been segregated from other agents even before this 
 reorganization took place, due to the fact that the duties of these investi- 
 gators were such as to require considerable training of an engineering 
 character. The need for such specialized services may be taken to mean 
 that there would be no savings in personnel costs if these functions were 
 entrusted to the Department of Justice. 93 
 
 For the purposes of the division, ten regional areas were created, but 
 the number was later reduced to eight. Most of the agents are said to be 
 engineers, accountants, and investigators with legal experience, rather 
 than detectives of the old school. The division is not concerned with the 
 routine inspection of construction, and its agents are generally called in 
 only where indications of mismanagement exist or are likely to appear. 
 The division seeks out evidence of collusive bidding and violations of 
 labor regulations, and investigates cases of collusion between the recipi- 
 ents of government funds and their contractors, or between either of them 
 and the resident inspectors. The reports of the division are confidential, 
 and are not ordinarily available to persons lacking an official status with 
 the establishment. If circumstances warrant such action, criminal prose- 
 cutions are begun. 94 
 
 "■Manual for Engineer Inspectors, op. ext., pp. 50, 52. 
 
 M P.W.A. Press Release No. 2019. The head of the division was given the title of "assistant 
 administrator in charge of investigations." 
 
 93 See the testimony of Mr. Glavis, Hearing before the Subcommittee of the House Com- 
 mittee on Appropriations in Charge of Deficiency Appropriations, Deficiency Appropriation Bill 
 for 1914, 73d Congress, 2d Session, pp. 180-187. 
 
 "Early in 1937 it was reported that thirty-four persons, all contractors or their employees, 
 had been convicted. P.W.A. Press Release No. 3101 (February 17, 1937). 
 
GENERAL ORGANIZATION AND FUNCTIONS 
 
 51 
 
 The Planning Agencies 
 
 The divisions of the Public Works Administration which have already 
 been described are concerned chiefly with the immediate problems of 
 making allotments and expediting construction. The Recovery Act, how- 
 ever, also required the preparation of a comprehensive program of public 
 works as a step towards national planning. 95 Accordingly, several plan- 
 ning agencies were created to carry out the Congressional mandate. 
 
 National Planning Board. — On July 30, 1933, the administrator 
 created a National Planning Board of three members. 96 The board sat at 
 Washington, but was represented in the field by regional or district 
 offices. There were originally ten such areas, each under a regional ad- 
 viser, but later twelve districts, each headed by a chairman, were substi- 
 tuted. The boundaries of the original areas were fixed somewhat arbi- 
 tarily, but in setting up the new districts an attempt was made to group 
 the states on the basis of primary drainage, land use, and transportation 
 interests. The efforts of the board were directed at the stimulation of 
 public and official interest in the coordinated development of local, 
 regional, and national problems. The board sought to cooperate not only 
 with other representatives of the P.W.A. but also with state and local 
 planning bodies, both official and unofficial. 
 
 The immediate problems of the emergency were such that these 
 broader problems commanded but little attention from the P.W.A. as a 
 whole. Furthermore, their solution involves more than a consideration 
 of public works expenditures. Accordingly, the President created a gen- 
 eral planning agency apart from the P.W.A. This agency was the Na- 
 tional Resources Board, now the National Resources Committee. It 
 absorbed the National Planning Board of the P.W.A. as well as the 
 independent Committee on National Land Problems. 97 
 
 Other Planning Agencies. — Other planning agencies of the P.W.A. in- 
 cluded a Mississippi Valley Committee. 98 This committee sought to stimu- 
 late the formulation of a comprehensive plan of development for the 
 Mississippi-Missouri drainage area. The committee originally consisted 
 of five members, together with a representative of the army engineers, 
 but other members were later added. With the establishment of the 
 National Resources Board, the committee was reconstituted as the water 
 planning agency of that board. For a time, there were two similar com- 
 mittees concerned, respectively, with the Red River and Arkansas River 
 basins. 99 They reported through the Mississippi Valley Committee, al- 
 
 ^48 Stat, at L., 195, 200, section 202. 
 
 M P.W.A. Press Release No. 569 (March 11, 1934). See also Schmeckebier, op. cit., p. 107. 
 "Executive Orders No. 6777 (June 30, 1934) and 7065 (June 7, 1935). See also the sec- 
 tion on national planning, chap, iii, infra. 
 
 "Schmeckebier, op. cit., p. 100; P.W.A. Press Release No. 156. 
 
 "'The committees consisted, respectively, of seven and four members. See P.W.A. Press 
 Releases Nos. 160 and 161. 
 
52 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 though they were not responsible to it. Only the Mississippi Valley 
 Committee was able to prepare a report before these planning agencies 
 were dissolved. That report reviewed such matters as the failing water 
 supply, decreased soil fertility, and the lack of electric power in rural 
 areas, and recommended a coordination of electric power facilities by a 
 nation-wide linking of private and public systems, and urged an elaborate 
 long-term program of public works in the valley, including the construc- 
 tion of dams. 100 
 
 A National Power Policy Committee, consisting of eight members 
 under the chairmanship of the Public Works Administrator, has func- 
 tioned intermittently. Its creation was announced by the President, who 
 indicated that it was not to be merely a fact-finding body, but one for the 
 development and unification of a national policy with respect to power. 
 He indicated that meetings of the full committee were to be infrequent, 101 
 and the committee has been rather inactive. During 1935, however, it 
 prepared a report dealing with holding companies. 102 As might be ex- 
 pected, the committee did not look with any great favor upon such enter- 
 prises, and termed the existing concentration dangerous to democracy and 
 costly to consumers. The recommendations for national legislation in- 
 cluded: (1) the eradication of disclosed abuses and the maintenance of 
 continuing control through an administrative commission, (2) the pre- 
 vention of the use of holding companies to obstruct state regulation of 
 operating companies, and (3) the elimination of holding companies where 
 no demonstrably useful and necessary purpose was being served. 
 
 Functional Organization and Overhead Control 
 
 By way of summary, it may be said that the Public Works Adminis- 
 tration made the transition from a highly centralized form of organiza- 
 tion to a more decentralized one with every indication of success. In 
 these days when the trend seems to be towards more and more control 
 from Washington, that fact is of some significance. It must not be sup- 
 posed, however, that there is only a small measure of supervision from 
 the seat of the government. All policies are formulated there, and the 
 final review of applications has also been a function of the central office. 
 That degree of control seems desirable, although much depends on the 
 extent to which such final review resulted in a reversal of the judgments 
 expressed by field employees, a point on which the writer possesses no 
 specific information. 
 
 The several divisions and units of the establishment may be divided 
 
 ,00 Rcport of the Mississippi Valley Committee of the Public Works Administration (1934). 
 101 Prentice-Hall, Inc., op. cit., paragraph 29,522. 
 
 102 House Document No. 137, Report of the National Power Policy Committee, etc. 74th 
 Congress, 1st Session, serial 9928, particularly p. 5. 
 
GENERAL ORGANIZATION AND FUNCTIONS 
 
 53 
 
 into three groups: those concerned with administrative procedure and 
 problems, those engaged in the examination of applications for funds, 
 and those dealing with the supervision of construction. The housing divi- 
 sion of the P.W.A. has now been transferred to the United States Hous- 
 ing Authority, planning agencies have been absorbed by the National Re- 
 sources Committee, units to undertake construction were never created, 
 and even the divisions concerned with the examination of applications 
 are now functioning only to a very limited extent. It seems clear that the 
 P.W.A. is now marked for extinction unless a reversal takes place in 
 national policy. (See page 28, note 81, supra.) 
 
 The form of organization adhered to is a functional one, in the sense 
 that most divisions represent a major technical process or operation. In 
 a comprehensive department of public works we might expect a different 
 form of organization. There would probably be many units, like the 
 former housing division, each specializing in one final product or type of 
 enterprise. Such a "departmental" form is generally believed to be more 
 suited to governmental agencies, since it lends itself more directly to 
 budgetary control and to the placing of responsibility for a particular 
 enterprise. The functional type of organization is thought to be more 
 suited to an organization engaged in several highly technical processes 
 common to the organization as a whole, since it permits of a high degree 
 of specialization in each process. There is no indication that this scheme 
 has not worked well in the case of the P.W.A., but it may, perhaps, be 
 thought that the very organization of the establishment is such as to 
 render the P.W.A. unsuitable as the nucleus for a general consolidation 
 of the construction activities of the national government. 103 
 
 Until the end of 1937, the organization of the P.W.A. presented still 
 another unusual feature, in that it was represented in the states by two 
 responsible executives, each independent of the other. Since the state 
 director was primarily concerned with the examination of applications, 
 and the state engineer inspector with the supervision of construction, this 
 may not seem to be a serious fault. Yet, the combination under one officer 
 of these functions of administrative control simplifies relations with the 
 public and avoids the possibility that two different points of view may 
 result in confusion. Such a consolidation would also have prevented the 
 office of state director from being a superfluous one during periods when 
 funds were not available for allotment, and when the submission of appli- 
 cations was halted. In short, had there been but one executive officer at 
 
 ,03 An effective limitation on the functional form of organization, as contrasted with the 
 departmental, is the need for giving an executive control over all the processes requisite to the 
 effective completion of the major enterprises. There is the ever-present danger that processes will 
 be over-emphasized as against ultimate objectives. The chief danger of the departmental scheme 
 is that, where several divisions carry on similar technical processes, different procedures may 
 develop and that a considerable duplication of specialized personnel and equipment may result. 
 
54 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 the head of each state organization it would have been possible to liqui- 
 date the P.W.A. by gradually dismantling the state offices, without the 
 need for so radical a reorganization as was actually effected. 
 
 The position of the state director from 1935 to 1937 was so unusual 
 as to permit some further discussion. He did not possess complete control 
 over all the activities of his station, since the other employees there were 
 not completely subordinated to him. Instead, the major lines of responsi- 
 bility ran directly from the section heads in the state offices to their cor- 
 responding division chiefs at Washington. Thus, the finance examiners 
 in the state offices were technically subordinates of the state director, but 
 they were in a very real sense under the direct supervision of the head of 
 the finance division at the central office. The same situation existed with 
 respect to the other technical employees in the state offices. 
 
 One authority calls this form of relationship between the central and 
 field offices the multiple or functional type, as contrasted with the military 
 or territorial variety. 104 He does not lay down any rule as to the respec- 
 tive merits of the two types of organization, but does conclude that the 
 military or territorial form (the use of the term unitary is suggested) 
 should normally be preferred for governmental services. This plan of 
 organization would require that each divisional chief in the field be com- 
 pletely subordinated to his technical superior, and that control from 
 Washington be exercised through that superior. The supposed disad- 
 vantages of the functional form of organization are based on the experi- 
 ence of the Department of the Navy, whose yards were long organized 
 on the functional or multiple plan. As a result, each yard division was 
 entirely independent of other divisions in that navy yard, and a duplica- 
 tion of plant and equipment prevailed. 
 
 These objections cannot be raised in the case of the P.W.A. There 
 was little opportunity for uncoordinated activity, since the state director 
 did, after a fashion, possess some powers of routine administrative 
 supervision over the attaches of his office. Furthermore, since little 
 equipment was in use, there could be no great duplication of such items. 
 On the other hand, the functional plan of the P.W.A. does not appear to 
 have any important advantages, except that it permits of a clear division 
 of the work of the various examining divisions, both in Washington and 
 in the field. Even this is not of consequence during periods when appli- 
 cations for funds are not being received. It may be expected, therefore, 
 that the regional directors will possess more power over their subordi- 
 nates than did the state directors. 
 
 Until late in 1937, regional headquarters were little used by the 
 P.W.A., except as convenient bases from which the agents of the account- 
 
 ,(M W. F. Willoughby, Principles of Public Administration (1927), pp. 155-159. 
 
GENERAL ORGANIZATION AND FUNCTIONS 
 
 55 
 
 ing and investigating divisions operated. The respect maintained for 
 state boundaries was due to eminently practical reasons. Both in the 
 examination of applications and in the supervision of construction, there 
 was a need for determining the provisions of law applicable to the project 
 and the sponsoring body. Such laws and their interpretations are, to a 
 large extent, uniform within each state, but would vary as between the 
 states. This factor militated against the creation of regional combinations 
 of states, as well as against the creation of an administrative area cover- 
 ing a metropolitan community consisting of parts of two or more states. 
 The place which the states still occupy in the public mind and on the 
 political scene was another factor to be considered. It seems clear that 
 the regional organization now in effect would not have been adopted 
 save as part of a demobilization anticipating the liquidation of the 
 establishment. 
 
Chapter III 
 
 SOME ADMINISTRATIVE PROBLEMS 
 
 Several administrative problems of a general character seem to de- 
 serve somewhat extended consideration. These might have been discussed 
 in connection with the description of the organization of the establish- 
 ment, but that method would have made it more difficult to present a 
 clear picture of the administrative structure. These general problems 
 include: (a) the methods of Presidential and Congressional control, (b) 
 the use of corporate agencies, (c) personnel administration, (d) 
 planning, and (e) administrative consolidation. They may be distinguished 
 from the special matters incident to the allotment and use of funds which 
 are discussed in later chapters. 
 
 Presidential and Congressional Control 1 
 
 The Public Works Administration came into existence as a conse- 
 quence of statutory authorization, but was actually created by order of the 
 President. Since the President also possessed the power to create such 
 other agencies as he might deem desirable, one must look to the chief 
 executive as the immediate authority for the maintenance of the estab- 
 lishment and the performance of the functions assigned to it. The Presi- 
 dent could at any time grant the P.W.A. further powers, within statutory 
 limits, or intervene to order the discontinuance of particular functions, or 
 the dissolution of the establishment. Congress, too, could exercise similar 
 powers. In addition, both the President and Congress possessed the means 
 for continuing control over the activities of the Public Works 
 Administration. 
 
 The President and the Director of the Budget. — It seems to be char- 
 acteristic of most of the emergency appropriations that they were made 
 directly to the President rather than to any specific administrative agency. 
 This was true of both the 1935 and 1936 Emergency Relief Appropriation 
 Acts, and while the Recovery Act simply authorized the appropriation of 
 monies for the purposes of that act, a similar result prevailed. This was 
 due to a provision of the Fourth Deficiency Appropriation Act, fiscal 
 year 1933, which made the actual appropriation. It provided that the 
 fund was "to be expended in the discretion and under the direction of the 
 President." 2 The Attorney General pointed to this as an unusual pro- 
 vision, and held that, in effect, it amended the Recovery Act so as to 
 substitute the judgment of the President for that of the administrator as 
 
 'Some attention is devoted to judicial decisions in chap. v. 
 2 48 Stat, at L., 274, 275. 
 
 56 
 
SOME ADMINISTRATIVE PROBLEMS 
 
 57 
 
 to what expenditures should be made. 3 Under all these acts, however, the 
 President could delegate his powers to such officials and agencies as he 
 saw fit. By executive order, he endowed the administrator with powers 
 that were practically coterminous with those authorized by the Recovery 
 Act. 4 Under later acts, the grants of power were more limited, but 
 chiefly in that they were restricted to certain classes of projects. 5 From 
 time to time, however, the President reasserted his powers, either by 
 laying down specific regulations or by assigning functions to other agen- 
 cies, thus withdrawing them from the Public Works Administration. 6 
 
 Such spasmodic intervention by the President was not sufficient to 
 assure effective executive control over the functioning of the establish- 
 ment. It was supplemented by personal consultations and discussions 
 between the President and the administrator, and questions of policy were 
 probably also discussed at cabinet meetings. Soon, however, the multi- 
 plication of federal emergency agencies made direct Presidential control 
 difficult, if not impossible. The creation of an Executive Council and 
 later of a National Emergency Council, on both of which the P.W.A. 
 was represented, was only a partial solution. 7 These agencies served as 
 boards of strategy and as coordinating groups, but they could not hope 
 to supply effective means of day-to-day control. 
 
 Accordingly, the Public Works Administration and other emergency 
 agencies were required to furnish the Director of the Budget with the 
 information necessary to permit him to keep the President informed as 
 to the progress of the recovery program. Weekly reports of all alloca- 
 tions of funds and of obligations incurred were required. 8 The President 
 also ordered the submission of organization charts descriptive of the 
 functions of the internal units of the various agencies. 9 These measures, 
 of course, implemented other means of Presidential control over the 
 Public Works Administration. 
 
 During 1935, the President further extended the powers of the Di- 
 rector of the Budget with respect to the P.W.A. Since 1933, the 
 administrator had been, for all practical purposes, the sole judge of the 
 administrative expenses necessary for his agency. The P.W.A., with the 
 large fund at its disposal, was in a position to finance such charges with- 
 out recourse to specific executive or legislative authorizations. The 
 President now required that certain specified governmental agencies 
 
 3 37 Of. Atty. Gen., 460 (March 12, 1934). 
 4 Executive Order No. 6252 (August 19, 1933). 
 *Ibid., No. 7064 (June 7, 1935). 
 
 "Instances of the former were most common after 1935, of the latter prior to that date. 
 
 'Executive Orders Nos. 6202-A (July 11, 1933) and 6433-A (November 17, 1933). See 
 also ibid., No. 6889-A (October 29, 1034) consolidating the two agencies. 
 
 s Ibid., No. 6550 (January 6, 1934). This order applied to substantially all agencies except 
 the treasury department. It replaced an earlier order (No. 6548, January 3, 1934) prohibiting the 
 further obligation of emergency funds prior to the approval of estimates of expenditure by the 
 Director of the Budget. See also ibid., No. 6869 (October 10, 1934). 
 
 "Ibid., No. 6715 (May 23, 1934). 
 
58 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 submit to the Director estimates of the sums needed for administrative 
 expenses, even though they actually had the necessary funds available 
 to their credit, and it was requested that no such obligations be incurred 
 without the approval of the Bureau of the Budget. 10 The Public Works 
 Administration was not one of the agencies specified in the original order, 
 but it was soon added to those enumerated. 11 
 
 The conclusion that the President had at his command the effective 
 means for controlling the activities of the Public Works Administration 
 thus seems justified. Furthermore, since the middle of 1935, all allottments 
 of funds to the P.W.A. have been made by him for specific projects. 
 Attention should also be called to the Works Progress Administration 
 and the Advisory Committee on Allotments, which served as agencies for 
 coordinating the work-relief program as a whole. 12 An indication that 
 these instrumentalities of Presidential control were adequate may be seen 
 in the fact that, during 1936, a Congressional committee obtained what 
 information it sought with respect to the Public Works Administration, 
 not from that agency, but from the Acting Director of the Budget and 
 from the Works Progress Administrator. 13 
 
 Congress and the Comptroller General. — As contrasted with the Presi- 
 dent, Congress has not been in a position to exercise effective control 
 over the Public Works Administration and its activities. The most 
 serviceable means of securing information on the basis of which legisla- 
 tive control could be exercised has not been utilized. Periodic reports 
 were never required of the Public Works Administration and were never 
 submitted voluntarily. The Emergency Relief Appropriation Act of 1935 
 did require annual reports of the operations under that joint resolution, 
 but the reports are those of the Works Progress Administrator and deal 
 only incidentally with the Public Works Administration. 14 
 
 The only comprehensive report on the activities of the P.W.A. is one 
 submitted as of February 15, 1934, pursuant to a Senate resolution 
 specifically requesting the information. 15 All but a few pages of the 
 report consist of statistical tables concerning allotments and projects. At 
 about the same time, the Senate also obtained a statement of the number 
 of employees in the field service of the Public Works Administration. 16 
 Two years later, a list of the projects then pending before the P.W.A. 
 
 '"Executive Order No. 7126 (August 5, 1935). 
 "Ibid., No. 7174 (September 4, 193s). 
 
 "See chap. i. supra. 
 
 "Hearing before the Subcommittee of the House Committee on Appropriations in Charge 
 of Deficiency Appropriations, First Deficiency Appropriation Bill for 1936, 74th Congress, 2d 
 Session, Part II, passim. 
 
 "49 Stat, at L., 115, section 15. Cf. Works Progress Administration, Report on the Works 
 Program (1936). 
 
 "Senate Document No. 167, Public Works Administration, 73d Congress, 2d Session, serial 
 
 9795- 
 
 ^Ibid., No. 137, Employees in the Field Service of the Public Works Administration, 
 serial 9801. 
 
SOME ADMINISTRATIVE PROBLEMS 
 
 59 
 
 was requested and submitted. 17 Except for similar information submitted 
 on specific request, Congress has had to rely largely on press releases and 
 on testimony before its committees. There seems to be no reason why 
 regular reports should not be required of all government agencies. 
 
 Congressional committees, particularly those of the Senate, seem to 
 have explored rather carefully the processes of the Public Works Admin- 
 istration. The administrator generally appeared in person at the hearings 
 before these committees and not only gave his opinions as to future legis- 
 lation, but described in detail the organization of his establishment and 
 the purposes for which funds were being expended. 18 As might be ex- 
 pected, it was the appropriation committees of the two houses that were 
 particularly active in seeking such information. 19 Upon a few occasions, 
 legislation specifically affecting the Public Works Administration resulted 
 or was being considered. More generally, however, the committees were 
 interested in the relief problem as a whole, and, as has already been 
 pointed out, appropriations were not made directly to the Public Works 
 Administration. Some members of Congress seemed chiefly concerned 
 with the geographical distribution of positions and funds. 
 
 The most important instrument of legislative control over the Public 
 Works Administration has probably been the Comptroller General. His 
 power to examine the accounts of the various emergency agencies was 
 specifically confirmed by executive order. 20 Upon several occasions, the 
 Comptroller General held that certain proposed expenditures were with- 
 out the authority of law, and, accordingly, he refused to permit the pay- 
 ment of the claims presented. At times these decisions were in conflict 
 with opinions rendered by the Attorney General, and a deadlock resulted. 21 
 It was instances such as these that prompted the recent movement to 
 abolish the General Accounting Office and to substitute an Auditor 
 General, with power only to make a post-audit and to report his findings 
 to Congress. 
 
 Corporate Agencies 
 
 It was largely in an attempt to avoid the routine requirements of 
 ordinary governmental processes, that the Public Works Administration 
 proposed to use the corporate form of enterprise for certain of its 
 activities. The advantages and disadvantages of this form of organiza- 
 
 "Ibid., No. 183, Pending Non-Federal P.W.A. Projects, 74th Congress, 2d Session, serial 
 
 10015. 
 
 "Attention is invited to the bibliography, infra. 
 
 19 P.W.A., Accomplishments of the Federal Emergency Administration of Public Works 
 from July 8, 1933 to May 18, 1036 (G.P.O., 10.16), .is simply an extract of testimony before a 
 subcommittee of the Senate committee on appropriations. 
 
 20 Executive Order No. 6s4g (January 3, 1934). There has, however, been no complete post- 
 audit of the books of the P.W.A. 
 
 2, Cf., for example, 37 Op. Atty. Gen., 493 (April 19, 1934), and 13 Comp. Gen., 186, No. 
 A-52844 (January 5, 1934). See the section on corporate agencies, infra. 
 
6o 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 tion for governmental services need not be considered here, since only two 
 corporations were created and the experiment was soon abandoned. 22 
 
 Public Works Emergency Housing Corporation. — During 1933, it be- 
 came clear that private capital and local public bodies were unwilling or 
 unable to obtain P.W.A. funds for slum clearance and low-cost housing. 
 Accordingly, the Public Works Administration undertook such activities 
 directly, the only type of project which has been so favored. A Public 
 Works Emergency Housing Corporation was incorporated under the 
 laws of the state of Delaware, on October 27, 1933, to serve as an adjunct 
 to the P.W.A. 23 The incorporators were: Administrator Ickes, Secretary 
 of Labor Perkins, and R. D. Kohn, then the director of the housing 
 division of P.W.A. The minimum capital of the corporation was 
 given as $1,000, and three shares of stock without a par value were 
 issued, to be held by the incorporators in trust for the United States. 
 
 The powers of the corporation were very broad. It could construct, 
 reconstruct, alter, or repair low-cost housing or slum-clearance projects, 
 apartments, houses, homes, and structures of every nature and kind ; or 
 extend financial aid in the interest of such undertakings. It was em- 
 powered to do anything that a private contractor or builder could do, 
 even to the extent of manufacturing, purchasing, and selling building 
 materials. It could also acquire real estate and personal property, 
 whether or not in connection with actual construction. The charter pro- 
 vided that the corporation was to have a perpetual existence and might 
 borrow money for corporate purposes without limitation on amount. It 
 was admitted that these powers were very broad, but the administrator 
 indicated that the powers would not be used to such an extent as to 
 interfere with, or compete against, legitimate business. 24 
 
 In the case of a private corporation such broad powers may be usual, 
 but a governmental body is in a different position. The Comptroller 
 General interposed to question the legality of the powers of the corpora- 
 tion, and denied his approval to a transfer from the P.W.A. of $100,- 
 000,000. 25 His objections were based on the fact that an agency created 
 under the authority of a statute, in this case Title Two of the Recovery 
 Act, could not exercise powers in excess of those permitted by that 
 statute. He held that the transfer of funds to a corporate agency did not 
 divest them of their appropriation status, nor permit their use for opera- 
 
 "See the remarks of Senator Schall during which he introduced the full texts of the 
 charters of these and other emergency corporations, Congressional Record, vol. 77, pp. 1546 ff. 
 (February 6, 1935). 
 
 "Announced in P.W.A. Press Release No. 249 (October 29, 1933). 
 
 u Ibid. 
 
 "No. A-520S2 (January 11, 1934). This ruling does not appear in the volumes containing 
 the Comptroller General's decisions, but it may be found in Prentice-Hall, Inc., Federal Trade 
 and Industry Service (1st ed.), paragraph 29,515. For the incident see also: R. H. Schnell 
 and R. H. Wettach, "Corporations as Agencies of the Recovery Program," North Carolina Law 
 Rev., vol. 12 (1934), p. 77. 
 
SOME ADMINISTRATIVE PROBLEMS 
 
 01 
 
 tions otherwise unlawful. He insisted that it was imperative to prevent 
 even the possibility of an illegal expenditure, lest serious complications 
 result. 
 
 An attempt had already been made to restrict the powers of the cor- 
 poration through the filing of amendments to the original charter. 26 The 
 major change effected was the striking out of the provision permitting the 
 purchase of real estate when not needed for construction purposes. Fol- 
 lowing this action, the President had designated the corporation as an 
 official agency of the national government. 27 The Attorney General, who 
 had suggested the amendments, now gave it as his opinion that funds 
 could be legally transferred to the corporation. 28 He suggested, however, 
 that there were some reasons why corporate agencies of this character 
 should be formed under the laws of the District of Columbia, rather than 
 under those of any state. The reasons were not given. The corporation 
 continued to function nominally for some time, despite the continued 
 opposition of the Comptroller General, with its duties being performed 
 through the housing division of the Public Works Administration, so far 
 as that was possible. During 1935, its corporate rights were surrendered. 
 
 Public Works Emergency Leasing Corporation. — The Public Works 
 Emergency Leasing Corporation possessed, perhaps, even broader powers 
 than the housing corporation. 29 Its charter recited practically all the pro- 
 visions of the housing corporation's charter and of Title Two of the 
 Recovery Act. The powers enumerated are so many that the intended 
 functions of the leasing corporation can only be surmised. It is believed 
 that the intention was to undertake construction through the corporation 
 and then to lease the projects to private or public bodies, probably the 
 latter. This would have been a means of affording aid to those state and 
 local governments who were unable to borrow money from the P.W.A. 
 because of restrictions on their power to incur debts. If any announce- 
 ment was issued of the corporation's creation or of its intended functions 
 it has escaped notice. On the floor of Congress, Senator Schall criticized 
 the growing use of corporate agencies and directed special attention to 
 the leasing corporation. He characterized it as an agency whose existence 
 had been continually concealed, and pointed out that it was not listed 
 either in the Congressional Directory or in the publications of the United 
 States Information Service. That may be explained, probably, by the 
 fact that the corporation never actually functioned. It was dissolved on 
 January 2, 1935, the day before the first session of the Seventy-fourth 
 Congress convened. 30 
 
 26 November 21, 1933. See note 22, supra. 
 
 "Executive Order No. 6470 (November 29, 1933). 
 
 M 37 Op. Atty. Gen., 437 (February 7, 1934). 
 
 29 See note 22, supra. The charter was issued January 2, 1934. 
 
 30 National Emergency Council, United States Government Manual (1936), appendix. 
 
62 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 It is possible to see in these and other experiences with corporations 
 possessing extremely broad powers the need for guarding against such 
 instances in the future. The Public Works Administration has not, 
 however, undertaken to create any new corporations to aid it in the 
 execution of its duties. 31 
 
 Personnel 
 
 The Recovery Act, as well as later statutes, permitted the selection 
 of P.W.A. employees without regard to the civil service or classification 
 acts. 32 The administrator was given the power to appoint his subordinates 
 and to fix their compensation in any manner he saw fit. The Senate, to 
 be sure, had adopted amendments which would have restricted somewhat 
 his powers in this respect, but they were lost in conference. These 
 amendments would have required the consent of the Senate to the appoint- 
 ment of any person selected to act under Title Two at a salary in excess 
 of $5,000 per annum ; and would have prohibited a salary in excess of 
 that sum for any P.W.A. employees, except the members of the board 
 which the Senate wished to place at the head of the establishment. 33 A 
 partial survival of these amendments may be found in the early policy, 
 followed by the administrator, of requesting the approval of the special 
 board for the creation of any position carrying a salary in excess of 
 $6,000 per annum. 34 
 
 Both the 1935 and 1936 Emergency Relief Appropriation Acts con- 
 tained provisions requiring the consent of the Senate to certain appoint- 
 ments. 35 Senatorial confirmation was required for the appointment of: 
 ( 1 ) any administrator, other officer, or the members of any central board 
 or agency named to have general supervision at the seat of the govern- 
 ment over the works program provided for, if paid a salary of $5,000 or 
 more per annum from the funds then appropriated; and (2) any state or 
 regional administrator similarly compensated. Persons already serving 
 under the authority of other statutes were excepted from these provisions. 
 It is not clear whether the first provision is applicable to the P.W.A., and 
 it has never actually been applied, since no change has been effected in 
 the person of the administrator. The second provision has required the 
 consent of the Senate to the appointment of a considerable number of 
 P.W.A. officials. Accordingly, some officials of the establishment are 
 appointed by the President and Senate, and the others by the 
 administrator alone. 
 
 3, At least, none has been announced. 
 32 48 Stat, at L., 105, 200, section 201 (a) and (b). 
 ^Congressional Record, vol. 77, p. 5308 (June 8, 1933). 
 '"P.W.A. Press Release No. 31. 
 
 3*49 Stat, at L., 115, section 3, and ibid., pp. 1608, 1611. 
 
SOME ADMINISTRATIVE PROBLEMS 
 
 63 
 
 Joint Use of Personnel. — The several acts also authorized the Presi- 
 dent and administrator to utilize the services of regular federal personnel 
 and, with the consent of the bodies concerned, those of state and local 
 officials. Officers and employees of other federal agencies have not gen- 
 erally been utilized by the P.W.A., except that perhaps a dozen army 
 and navy officers served as expediters during 1933, and that the first 
 executive officer was also detailed to the P.W.A. by the Secretary of 
 War. 36 Furthermore, Mr. Ickes has made frequent use of his office staff 
 in the Department of the Interior for similar duties in connection with 
 the P.W.A. These instances, however, are exceptions to the general 
 practice. 
 
 The services of state and local officers and employees have also been 
 little used. The major exception is to be found in the fact that such 
 officials were occasionally to be found on the state advisory boards of the 
 P.W.A., which, however, were dissolved early in 1934. 37 Furthermore, an 
 order was later issued withholding P.W.A. funds from certain authorities, 
 boards, or commissions, any officer of which at the same time held a 
 municipal office. 38 This might be thought to indicate a disposition to 
 oppose joint office-holding of any type in any phase of the operations of 
 the P.W.A. But the limited scope of the order, and the circumstances 
 under which it was issued, indicate rather clearly that the move was a 
 political one, intended to effect the removal of Robert Moses, New York 
 City park commissioner, from the Triborough Bridge Authority. There 
 has been no blanket pronouncement against the use of state and local 
 officials. 
 
 The tangible objections to the utilization of non- federal agents by the 
 P.W.A. are to be found in the complexity and multitude of the tasks that 
 such an officer acting in a dual capacity would be expected to perform, 
 and the possible effects of a division of control over his activities. That 
 these objections are not conclusive has been indicated by the National 
 Resources Board, successor in functions to the planning board of the 
 P.W.A., which pointed out that: 
 
 .... It would be possible, for example, to unite several types of official 
 duties on different jurisdictional levels in one and the same person, who might 
 become an agent of three or more masters at one and the same time — a local offi- 
 cial with State duties as well, or with some national duties which could be con- 
 veniently carried on his official shoulders without weakening his backbone .... 39 
 
 However desirable and possible such experiments in intergovernmental 
 cooperation may be, one must look beyond the Public Works Adminis- 
 
 36 P.W.A. Press Release No. 870. 
 "Ibid., No. 25. 
 
 s8 For the incident and quotations from the order, see New York Times, January 4, 1935. 
 3 M Report on National Planning and Public Works, etc., (1034), p. 66. 
 
6 4 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 tration for the evidence. The general policy of that establishment has 
 been adverse to the utilization of state and local employees. 40 Had it 
 continued to function as a planning agency, the interrelationships of our 
 national economy might well have given the experiment a broader scope. 
 
 Recruitment. — The major task of carrying on the public works pro- 
 gram was entrusted to a staff of newly-recruited employees. The ex- 
 emption of these employees from the merit system was not unique to the 
 Public Works Administration. It was the usual situation with respect to 
 most of the emergency agencies, and was even extended to employees in 
 the regular departments when they were paid from emergency funds, or 
 performed functions in aid of emergency activities. Thus, when the 
 President conferred certain duties in aid of the P.W.A. upon the Federal 
 Power Commission, he provided that the necessary personnel might be 
 selected without regard to the civil service laws. 41 
 
 Some emergency agencies seem to have developed a well-defined 
 recruitment system amounting to an informal merit system. The P.W.A., 
 on the other hand, has never developed any special recruitment tech- 
 nique. Insofar as appointments according to merit and fitness have pre- 
 vailed, they have been due to an exacting personal method of selection. 
 It was no idle statement when Administrator Ickes said, "As Secretary 
 of the Interior, I have passed on personnel matters myself. I have done 
 the same as Administrator of Public Works. I shall continue to be my 
 own personnel officer." 42 Obviously, however, he has had to rely largely 
 on the recommendations made by scientific and other organizations, and 
 by persons in whose judgment he had especial confidence. One modest 
 announcement issued by the administrator was to the effect that a list 
 of appointees read "like a who's who in engineering, law, architecture 
 and public administration. The appointments have been made on the 
 basis of merit and accomplishment . . . . " 43 With that statement one 
 need not quarrel, but it may be suggested that the weakest point in a 
 personal recruitment system is likely to be the general clerical and 
 unskilled group of employees. 
 
 It would indeed be difficult to determine whether political considera- 
 tions ever assumed a prominent role, or whether such endorsements were 
 even desirable qualifications above and beyond the abilities and training 
 of the candidate for appointment. The general opinion seems to be that 
 the Public W'orks Administration has not been a haven for deserving 
 
 "On the subject generally, see J. P. Clark, "Joint Activity Between Federal and State 
 Officials," Pol. Sci. Quar., vol. 51 (1936), p. 230. 
 
 •"Executive Order No. 6251 (August 19, 1933). 
 
 42 This statement was issued at the time Emil Hurja was appointed administrative assistant, 
 an appointment that many believed was dictated by Postmaster General Farley as a means of 
 securing control over P.W.A. patronage. Administrator Ickes claimed that he had of his own 
 volition made the appointment, and that Mr. Hurja had neither applied for the position nor 
 been suggested by any one. Mr. Hurja later resigned to serve with the Democratic national 
 committee. P.W.A. Press Releases Nos. 70 (August 22, 1933) and 588 (circa March 15, 1934)- 
 
 "Ibid., No. 77 (August 29, 1933). 
 
SOME ADMINISTRATIVE PROBLEMS 
 
 65 
 
 politicians, and Mr. Ickes has on several occasions contributed to that 
 belief by statements in public addresses. This writer believes that personal 
 and partisan politics have not been completely absent, but that they have 
 not been permitted to outweigh considerations of merit and fitness. 44 If 
 partisan politics has been an insignificant factor, an explanation may be 
 found in the fact that Administrator Ickes has not been an active mem- 
 ber of the party in power, while his administrative assistant in charge of 
 personnel was, until recently, Ebert K. Burlew, a holdover from a Repub- 
 lican regime, with many years of service in the Department of the Interior 
 to his credit. 
 
 The recruitment of the force necessary to carry out the functions of 
 the Public Works Administration began under none too favorable cir- 
 cumstances. 45 An unofficial P.W.A., numbering about thirty-three per- 
 sons, had already been created without legal authority, and the official 
 status of that organization had been subsequently confirmed on a tem- 
 porary basis. In establishing the Public Works Administration on a more 
 permanent foundation, it was believed necessary to issue notices of 
 separation to these employees. In some quarters, this action was con- 
 demned as conflicting with the policy of placing in the emergency agencies 
 such deserving employees as had been forced out of the regular depart- 
 ments by economy measures. It appears, however, that many of these 
 temporary employees were subsequently rehired. 
 
 Undoubtedly, difficulties were encountered in the selection of em- 
 ployees. The scarcity of adequately trained men for the technical positions 
 with the P.W.A. was one of the reasons advanced for the highly 
 centralized form of organization first adopted. The functions of the 
 Public Works Administration were such as to require not only the or- 
 dinary administrative and clerical force, but also men with specialized 
 training in the fields of law, finance, engineering, and architecture. It 
 was possible to find a few employees among those who had formerly 
 constituted the self-liquidating loans division of the Reconstruction 
 Finance Corporation, and the nucleus of the legal division staff was taken 
 from firms specializing in municipal law and from the offices of the state 
 attorneys general. 46 
 
 "In his Back to Work (1935), p. 63, Mr. Ickes makes the following statement: " .... It 
 seemed, at times, as though everybody in the country, both male and female, had worked for 
 years for the Democratic Party at great personal sacrifice and that every one of these persons 
 had fixed upon a berth with PWA as his reward. Certain political leaders sent literally 
 thousands of job-seekers to us. I had a sympathetic understanding of the pressure brought to 
 bear by constituents upon their Congressmen. I wanted to give every possible aid to them in 
 their patronage difficulties but I made up my mind never to sacrifice the efficiency of the organi- 
 zation to politics. After all the best politics for PWA was an absence of politics. 
 
 "The same policy of putting efficiency above political expediency was carried out in the 
 actual administering of the money as well as in the selection of the personnel of the machine 
 which was to administer PWA . . . . " 
 
 45 See Department of the Interior, Memorandum for the Press (June 28, 1933) and Hear- 
 ings before the Senate Committee on Finance on S. 1712 and H. R. 5755, National Industrial 
 Recovery, 73d Congress, 1st Session, p. 331. 
 
 "Hearings before a Subcommittee of the Senate Committee on Appropriations on H. R. 
 12624, First Deficiency Appropriation Bill for 1936, 74th Congress, 2d Session, p. 371; and 
 P.W.A. Press Release No. 1687 (October 28, 1935). 
 
66 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 While some efforts were made to seek out qualified persons, in most 
 cases the person seeking employment filed an application of his own 
 initiative. 47 The form was one jointly used by the P.W.A. and the 
 Department of the Interior, and rather similar to the regular Civil Service 
 Commission form. As might be expected, the applicant was required to 
 set forth his training, experience, and qualifications, together with the 
 names of persons who possessed a knowledge of his qualifications and 
 were willing to support his application for employment. 
 
 A board of three examiners, some of whom had formerly served with 
 the Civil Service Commission, then rated the applicants according to their 
 training and experience. In the case of typing and stenographic positions, 
 performance tests were frequently given. In rating applicants for engi- 
 neering positions, the greatest weight was usually given to long and 
 specialized experience, rather than to formal academic degrees. The 
 board of examiners functioned only for the Public Works Administration, 
 but its list of eligibles was also used by the Department of the Interior in 
 selecting employees for work financed with emergency funds. 
 
 The registers of applicants were classified by states, although this was, 
 at least at first, not required by law. The Emergency Relief Appropria- 
 tion Act of 1936 did, however, require that employees in any state were 
 to be selected from among the bona fide residents of that state, so far as 
 not inconsistent with effective administration. 48 It is not clear whether 
 this provision had a legal application to the P.W.A., since none of the 
 funds appropriated by the act have gone to that agency, although the act 
 did make possible a wider use of funds received from the sale of bonds 
 purchased by the P.W.A. When a vacancy occurs in any field position, 
 citizens of that state are ordinarily recommended. 
 
 One of the effects of setting aside the civil service laws was, it would 
 seem, the not undesirable one of waiving the requirement that appoint- 
 ments to positions in the District of Columbia be apportioned among the 
 several states according to their respective populations. Yet, full ad- 
 vantage was not taken of this situation, and a distribution of appointments 
 at the seat of the government was made among the states to a considerable 
 extent. 49 While no exact quotas seem to have been adhered to, it must be 
 recognized that this is also the situation in the regular federal service. 
 
 When a vacancy occurs, the executive officer and the rating board 
 are normally consulted. For each vacancy, from three to ten names are 
 usually certified to the division head at Washington or to the responsible 
 field officer, formerly the state director or engineer inspector. That 
 
 "The discussion which follows is based in part on conversations with the employment 
 officers of the P.W.A. 
 
 48 49 Stat, at L., 1597, 1608. 
 
 "Hearings before a Subcommittee of the Senate Committee on Appropriations, op. cit., 
 p. 315. See 17. S. Code, title 5, section 633 (3). 
 
SOME ADMINISTRATIVE PROBLEMS 
 
 6 7 
 
 officer makes his recommendation on a form known as a justification. 
 The actual appointment is made by the administrator or, if made during 
 his absence, subject to approval by him. Other officers have been fre- 
 quently warned that they must not assume the responsibility for any 
 appointment, provisional or otherwise, except upon specific authority 
 granted by the administrator. 50 
 
 No evaluation of the efficiency of this recruitment system can be 
 attempted on the basis of the evidence which has been available. The 
 writer has, however, been impressed with the apparent abilities of those 
 occupying responsible positions at the central office in Washington. Many 
 of these are relatively young men who found that the government service 
 offered unusual opportunities in depression years. Personal, rather 
 than partisan, connections seem to have aided many of them in obtaining 
 employment. 
 
 In common with many governmental services, it is in matters of pro- 
 motion that personnel administration under the P.W.A. has probably been 
 least efficient. It would be too much to expect that an emergency estab- 
 lishment, with a short lease on life, could offer a career service ; yet, it 
 would seem desirable that vacancies occurring in the higher positions be 
 filled according to merit and fitness. Such vacancies have been generally 
 cared for by the promotion of persons already in the service, but the 
 factors that entered into the decisions to promote particular individuals 
 do not lend themselves to objective evaluation. At best, promotions 
 depend upon the unbiased opinions held by superior officers as to the 
 abilities of their subordinates. In the case of the P.W.A., there is no 
 evidence that such a test has not functioned well. It would certainly be 
 too much to expect that an emergency agency would develop a scientific 
 promotional technique. As of possible significance, it may be pointed out 
 that Administrator Ickes found it desirable to issue an order to the 
 following effect: 
 
 I have previously called attention to the impropriety of attempting to secure 
 political influence for advancement and employees are notified that hereafter repre- 
 sentations in their behalf from Members of Congress will not be considered. 51 
 
 This might be thought to imply that at an earlier date some consideration 
 had been given to such representations. 
 
 Salary Standardization and Classification. — Despite the statutory 
 authorization for exempting employees from the classification act, some 
 effort was made from the beginning to bring salaries into conformity with 
 that act. Administrator Ickes has stated, in a letter to the Comptroller 
 General, that, while compensation rates were fixed more or less arbi- 
 
 "•See, for example, Inspection Division Order No. 46 (December 27, 1935) and Inspection 
 Special Field Order No. 43 (March 6, 1936). 
 
 "Administrative Order No. 5, supplement 1 (undated, but probably early 1935). 
 
68 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 trarily, it was the practice to adjust the rates to those currently being paid 
 in the regular agencies of the government. He made it clear, however, 
 that no definite classification of positions had yet been made/' 2 
 
 Within about five months after the creation of the P.W.A., the Presi- 
 dent found it necessary to secure a greater uniformity in the rates of com- 
 pensation for employees in the various emergency agencies of the 
 government. 53 The need for such action was the excessive turnover of 
 employees in the regular and emergency services caused by the accept- 
 ance of more lucrative positions in those emergency agencies paying higher 
 salaries. The President ordered that the salary scale in the P.W.A., and 
 nine other emergency agencies, be fixed in accordance with a salary- 
 standardization plan which he prescribed. 54 This order applied to em- 
 ployees already in the service, as well as to those thereafter appointed, and 
 was soon extended to many other emergency agencies. 55 A subsequent 
 order altered the compensation scale, but did not affect the general intent 
 of the earlier mandate. 56 Per diem and part-time employees paid from 
 funds administered by the Secretary of the Interior and the administrator 
 of public works were later excepted from the provisions of the order. 57 
 A further measure to halt excessive turnover of employees may be found 
 in directions forbidding representatives of one establishment from con- 
 tacting employees in another with a view to affecting their transfer, ex- 
 cept with the consent of the head of the agency in which the employee 
 was then serving. 58 Restrictions were also imposed on subsequent salary 
 increases for such employees as did accept a new position. 59 The extent 
 to which the P.W.A. or any other particular establishment caused the need 
 for these measures, or was affected by the situation, would be difficult to 
 determine. 
 
 Still other difficulties arose as a result of the economy measures which 
 Congress had taken with respect to regular employees of the govern- 
 ment, chiefly in the nature of reductions in base compensation and 
 prohibitions on promotions. 60 These measures became fully applicable to 
 the P.W.A. only after the promulgation of the executive orders inaugurat- 
 ing a salary-standardization plan. 61 At that time, the rulings of the 
 
 52 See the text of the letter in 13 Comp. Gen., 272, No. A-54788 (April 10, 1934). 
 53 It should be pointed out that this discussion is concerned only with executive orders 
 affecting the P.W.A. 
 
 54 Executive Order No. 6440 (November 18, 1033). 
 
 !5 /birf., No. 6554 (January 10, 1934), as amended by Nos. 6622 (March 1, 1934) and 7102 
 (July 18. 193s). 
 
 M lbid., No. 6746 (June 21, 1934). 
 "Ibid., No. 7102 (Tuly 18, 1935). 
 ss Ibid., No. 7070 (June 12, 1935). 
 
 ™Ibid., Nos. 7333 (April 3, 1936) and 7446 (September 11, 1936), 1 Fed. Reg., 149, 1563. 
 m d7 Stat, at L., 1 5 1 5 ; ibid., vol. 48, p. 12. 
 
 6, Cf. 13 Comp. Gen., 3, No. A-49751 (July 6, 1933) and ibid., p. 197, No. A-53051 (Janu- 
 ary 17, 1934). For the failure of P.W.A. employees to receive any benefit from a reduction in 
 the economy measures, due to the fact that the payrolls carried no indication of a basic salary 
 and deductions therefrom, see ibid., p. 272, No. A-54788 (April 10, 1934). See also ibid., vol. 
 15, p. 100, No. A-64204 (August 5, 1935) and Executive Order No. 7092 (July 3, 1935). 
 
SOME ADMINISTRATIVE PROBLEMS 
 
 6 9 
 
 Comptroller General and the Presidential decrees resulted in considerable 
 confusion. The executive orders required salary rates to be fixed in ac- 
 cordance with the annexed schedules, and the Comptroller General 
 insisted that the economy measures be applied to the salaries so fixed. 
 This would have required the salaries of some employees to be reduced, 
 those of others to be increased, and those of still others to remain at their 
 former levels. The resulting attempts of the Public Works Administra- 
 tion to make the necessary adjustments in those cases where increases in 
 salary were deemed necessary presented some difficulties. It was, of 
 course, desirable that the rates paid be commensurate with the duties and 
 responsibilities of the position held, and, yet, promotions were prohibited 
 for the time being. The Attorney General informed Administrator Ickes 
 that adjustments upward as well as downward might legally be made, 62 
 apparently on the theory that a mere advancement in salary is not a 
 promotion. The Comptroller General disagreed with this point of view, 
 and the President found it necessary to issue an executive order speci- 
 fically providing that such increases were not to be deemed promotions. 63 
 Even then, the Comptroller General took occasion to warn that only minor 
 increases in salary would be permitted. 64 
 
 These problems largely disappeared with the expiration of the economy 
 act and with the consequent restoration of promotions and full compensa- 
 tion during the first half of 1935. Nor were they peculiar to the Public 
 Works Administration, although it appears to have been that agency that 
 most often ran counter to the opinions of the Comptroller General. Since 
 similar economy reductions are likely to be adopted during future periods 
 of financial stress, it may be suggested that it would not be sound practice 
 to exempt the employees of such emergency agencies as are then created 
 from the classification act. Certainly, less confusion and friction would 
 result if all governmental employees, whether employed regularly or only 
 for an indefinite period, were kept on a par so far as compensation is 
 concerned. That, of course, is also an argument for the extension of the 
 classification act to all field employees, instead of limiting its scope, as is 
 at present the case, largely to those serving in the District of Columbia. 65 
 
 The classification in force for P.W.A. employees is to some extent 
 comparable to that followed by the Civil Service Commission. The titles 
 to positions are in most cases different, but the duties are such that the 
 regular classification could be applied without great difficulty. The rates of 
 
 82 37 Op. Atty. Gen., 477 (April 4, 1934). It had earlier been held that employees fur- 
 loughed by one agency of the government and given an appointment in one of the emergency 
 agencies with different duties, and at a higher rate of compensation, were not to be considered 
 promoted in violation of the statute. 13 Comp. Gen., 63, No. A-50707 (August 30, 1933). 
 
 63 See Executive Order No. 6746 (June 21, 1934) and 13 Comp. Gen., 305, No. A-51743 
 (April 28, 1934). 
 
 M i4 Comp. Gen., 14, No. A-55907 (July 5, 1934). 
 
 65 See the general discussion and recommendations relative to classification in the Fifty- 
 First Annual Report of the United States Civil Service Commission (1934), pp. 19, 20, 26. 
 
7o 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 pay, it seems, are somewhat higher than those paid in most other federal 
 agencies. This is particularly true of the salary average for employees in 
 the field. 66 In other matters relating to personnel, the regulations of the 
 Department of the Interior apply with few modifications, a situation 
 largely due to the fact that the secretary of that department is also the 
 administrator of the P.W.A. 
 
 Personnel Statistics. — The annual report of the Civil Service Com- 
 mission for the fiscal year ending June 30, 1933, does not supply any 
 data as to the number of persons employed by the Public Works Admin- 
 istration. That agency had been created but two weeks before the date 
 mentioned, and no staff had yet been officially recruited. By June 30, 
 1934, 4,055 persons had been appointed, and the number of employees 
 subsequently became more than 10,000 (see Table I). More recently, the 
 partial demobilization of the P.W.A. has resulted in a marked decline in 
 the size of the staff. 
 
 Table I. — Number of Employes* 
 (As of lune 30th of the years indicated) 
 
 Year 
 
 Total 
 
 In the 
 District 
 of Columbia 
 
 Outside the 
 
 District 
 of Columbia 
 
 1934- • • • 
 
 
 4,055 
 
 2,092 
 
 1,963 
 
 1935 
 
 
 6,729 
 
 2,366 
 
 4,363 
 
 1936. . . . 
 
 
 10,719 
 
 3,315 
 
 7,404 
 
 1937- • • • 
 
 
 7,099 
 
 2,561 
 
 4,538 
 
 'Source: Annual Reports of the Civil Service Commission. 
 
 Of the force of employees on June 30, 1934, 2,092 were located in 
 the District of Columbia as against 1,963 in the field. The almost equal 
 division between the departmental and field services was indicative of 
 the high degree of supervision and direct control from Washington, a 
 situation that existed prior to the so-called decentralization effected during 
 1935. The ratio may also be explained, in part, by the fact that only a 
 fraction of the projects financed by the P.W.A. were yet under con- 
 struction. 67 As the months went by, more and more employees were 
 assigned to tasks connected with the supervision of construction, duties 
 that could not be performed at the central office. Accordingly, the field 
 service saw a steady growth while the departmental service remained 
 relatively stationary, until, by the middle of 1935, almost twice as many 
 
 68 A detailed listing of P.W.A. personnel and salaries for 1936 may be found in the Hear- 
 ings before the Subcommittee of the House Committee on Appropriations, Extension of the 
 Public Works Administration, 75th Congress, 1st Session, pp. 201-215. 
 
 e 'One may also take into account the fact that some of the employees listed to the District 
 of Columbia were merely stationed there for training prior to field assignment. 
 
SOME ADMINISTRATIVE PROBLEMS 
 
 7 ' 
 
 employees were located in the field as in the District of Columbia. This 
 ratio of one-third at the central office and two-thirds in the field remained 
 the normal situation as long as funds continued to be available for allot- 
 ment. The gradual disbanding of the offices of the state directors, which 
 were concerned primarily with the examination of applications, then 
 caused the size of the field force to decline more rapidly than did the size 
 of the departmental service. It is probable that the force in the field 
 will continue to diminish more rapidly than that at the central office. 68 
 
 National Planning 
 
 The P.W.A. was not the first planning agency of the national govern- 
 ment, nor even the first concerned primarily with public works. Further- 
 more, the duty of preparing a comprehensive program of public works 
 with respect to the development of water power and the transmission of 
 electrical energy was assigned to the Federal Power Commission, and not 
 to the P.W.A. 69 Aside from planning with respect to specialized prob- 
 lems, 70 the P.W.A. made attempts at methodical progress both in develop- 
 ing a comprehensive program of public works and in carrying on the 
 immediate program. 
 
 The Immediate Program.- — The immediate problem confronting the 
 Public Works Administration was, of course, the distribution of its funds 
 in such a manner as to create employment where it was most needed. 
 None of the statutes provided any general method of apportionment, and, 
 yet, it was impossible to finance all the projects that might be deemed 
 technically eligible. Obviously, it was desirable to finance projects in all 
 parts of the nation and, if possible, according to some formula that could 
 be defended. It appears that, at first, some attempt was made to distribute 
 allotments among the states according to a method of apportionment 
 giving seventy-five per cent weight to population and twenty-five per cent 
 to unemployment. 71 In each case, the amount of federal construction in 
 the state was subtracted before determining the quota of non-federal 
 projects. The National Planning Board, for a time, kept a record of the 
 types and locations of projects and called attention to such distortions as 
 appeared, both in the geographical distribution of funds and in the amount 
 of employment provided. Later allotments were based, in part, on a 
 report dealing with those factors submitted by the board. By the end of 
 1933, however, only eighteen states had received total allotments equalling 
 their quotas. 72 The exact basis for the distribution has never been made 
 
 ""Tabulations of personnel in typical field offices of the P.W.A. may be found in the Hear- 
 ings before the Subcommittee of the House Committee on Appropriations, Independent Offices 
 Appropriation Bill for 1938, 75th Congress, 1st Session, pp. 907-909. 
 
 ""Executive Order No. 6251 (August 19, 1933). 
 
 '"See chap, ii, supra. 
 
 "A. D. Gayer, Public Works in Prosperity and Depression (1935), p. 114. 
 n Ibid. 
 
72 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 clear, and the unemployment figure used must have been only an approxi- 
 mation. Furthermore, one is inclined to doubt whether all of the factors 
 taken into account in distributing funds lend themselves to schematic 
 expression. 
 
 The chief difficulty in fixing an equitable ratio of apportionment is 
 inherent in attempts to eliminate unemployment through expenditures on 
 public works. This is due to the fact that a large percentage of the cost 
 of each project is in payment for the manufacture and transportation of 
 
 Table II. — Distribution of the Material Dollar Spent on Public Works* 
 
 State Rating 
 
 Pennsylvania 678 
 
 Ohio 457 
 
 New York 353 
 
 Illinois 352 
 
 Washington 313 
 
 Alabama 281 
 
 California 221 
 
 Michigan 184 
 
 Oregon 162 
 
 New Jersey 159 
 
 Indiana 157 
 
 Wisconsin 130 
 
 Texas 103 
 
 Missouri 101 
 
 Mississippi 99 
 
 Louisiana 99 
 
 Massachusetts 89 
 
 State Rating 
 
 Arkansas 85 
 
 Tennessee 76 
 
 Connecticut 74 
 
 West Virginia 64 
 
 North Carolina 61 
 
 Georgia 56 
 
 New Mexico 54 
 
 Minnesota 52 
 
 Florida 49 
 
 Kentucky 47 
 
 Virginia 44 
 
 Iowa 42 
 
 Idaho 38 
 
 South Carolina 37 
 
 Maryland 35 
 
 Vermont 32 
 
 South Dakota 31 
 
 State Rating 
 
 Kansas 29 
 
 Oklahoma 21 
 
 Maine 18 
 
 Colorado 16 
 
 New Hampshire. ... 15 
 
 Montana 14 
 
 Rhode Island 9 
 
 Nebraska 9 
 
 Arizona 7 
 
 Utah 4 
 
 Dist. of Columbia. . 3 
 
 Wyoming 2 
 
 Delaware 1 
 
 Nevada 1 
 
 North Dakota 0.3 
 
 'Source: P.W.A. Press Release No. 3071 (January 3, 1937). This calculation is based on 
 figures compiled by the bureau of the census with respect to thirty-three basic construction 
 materials. Material production for a theoretical average state, one producing 1/48 of the na- 
 tional aggregate of construction materials, was taken as 100 and the several states rated accord- 
 ingly. It may be that the inclusion of the District of Columbia operates against the absolute 
 validity of these tabulations. 
 
 materials, so that only the remaining portion of the costs is actually of 
 benefit in providing employment at the site of construction. Furthermore, 
 the extent to which local materials are available will vary with the public 
 body being considered and the type of project proposed. It would thus 
 appear that the ordinary governmental body, considered by itself, will not 
 receive benefits commensurate with its expenditures on public works, 
 while other localities benefit from the amount of indirect employment 
 created by the need for supplies and materials. The National Planning 
 Board therefore suggested that only forty per cent of any allotment be 
 charged to the state in which the project was to be constructed; the 
 remainder to be charged to the several states according to tabulations 
 showing the distribution of the typical dollar spent on materials. 73 Such 
 a chart had been prepared by the Federal Employment Stabilization 
 Board, and one compiled by the P.W.A. may be found in Table II. 
 
 The determination of an equitable formula for the distribution of the 
 sums chargeable to on-site labor presented further difficulties. Such a 
 
 "National Planning Board, Final Report, 1933-34 0934). PP- 3 ff. and appendix, pp. 
 
SOME ADMINISTRATIVE PROBLEMS 
 
 73 
 
 formula can be justified only if it is actually a measure of the relief needs 
 of the various communities. No single factor constitutes a satisfactory 
 index of unemployment and of the need of the locality for outside 
 assistance. Accordingly, the National Planning Board suggested several 
 possible criteria and indicated their respective advantages and shortcom- 
 ings. The criteria considered included population, the number of unem- 
 ployed, the amount of local funds available for relief purposes, the 
 number of families already on relief, and the amounts contributed by the 
 locality to the federal treasury in the form of taxes. After considering 
 each of these possibilities, the board summarized its discussion by recom- 
 mending that forty per cent of each allotment be charged in accordance 
 with the location of the project by a combined factor giving weight to 
 population, unemployment, available relief funds, and the number of 
 families on relief. No exact ratios were indicated. The other sixty per 
 cent, as pointed out above, was not to be charged to the locality. 
 
 No analysis has appeared of the extent to which such planned, but 
 complicated, formulae have actually been adhered to by the Public Works 
 Administration in making allotments ; nor has the writer been in a posi- 
 tion to make such an analysis himself. There is, however, some evidence 
 that allotments were made according to what was considered an approxi- 
 mately equitable basis, and that, in addition, applications coming from 
 more prosperous communities were not greatly favored. 74 The fact that 
 any equitable apportionment must be made according to a complicated 
 formula, based on factors subject to frequent changes, would seem to 
 indicate the wisdom of omitting any statutory basis for the allocation of 
 funds. This has, of course, been the situation with respect to the P.W.A., 
 although not usually so in the case of regular federal grants-in-aid. 
 
 In various other ways, too, planning entered into the prosecution of 
 the immediate program of public works. For example, one factor in the 
 control of expenditures for construction purposes is the high degree of 
 seasonal activity. It was recognized by the Public Works Administration, 
 during 1933, that the advent of winter would hamper its efforts to 
 stimulate employment in some areas. Accordingly, studies were made 
 concerning the southward sweep of winter, and a map was prepared and 
 distributed embodying the results. It is claimed that efforts were made 
 to expedite the consideration of applications coming from areas where 
 work had to be begun early in order that actual construction could begin 
 before unseasonable weather set in. 75 
 
 The policies enunciated at the beginning of the public works program 
 indicated that the detailed examination of applications would be based on 
 
 "See, for example, P.W.A. Press Release No. 340 (December 1, 1933). 
 "P.W.A. Press Release No. 127 (October 2, 1933). It appears from this map that the 
 construction season in some areas ends as early as November 1st. 
 
74 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 planning considerations. 76 It was said that not only would all designs 
 have to be sound from a technical point of view, but that the relation of 
 each project to coordinated planning would also be taken into account as 
 a test of the social and economic desirability of the undertaking. Thus, 
 projects integrated with and consistent with a state plan were to be 
 preferred to isolated or inconsistent projects. The chief obstacle to the 
 enforcement of these policies was the non-existence of comprehensive 
 programs which could be used as standards in examining individual 
 applications. 
 
 The Comprehensive Program. — The major planning activities of the 
 P.W.A. were those relating to the development of a comprehensive pro- 
 gram for the future, rather than to the problems involved in the immedi- 
 ate program of allotments. The chief obstacle to the formulation of a 
 comprehensive program was the necessity of obtaining the cooperation 
 of all levels of government. The states, especially, had largely neglected 
 the preparation of plans for the future development of natural resources 
 and public works. Accordingly, the National Planning Board, with the 
 aid of P.W.A. funds, proposed to stimulate the creation of regional, state, 
 and local planning boards. This was made possible by an initial allot- 
 ment of $250,000, which could be used to provide technical assistance 
 to such bodies. Encouraged by this offer of assistance, the creation of 
 state and regional planning commissions proceeded apace. 77 
 
 The coordination of the work of these various agencies was no small 
 task. It was effected largely with the aid of a draft and report on a model 
 state planning act, prepared by the Harvard Graduate School of City 
 Planning, and urged upon the various states as suitable for their use. 78 
 In addition, federal supervision over the agencies receiving assistance 
 from the P.W.A. was enforced through the requirement of periodic 
 reports and the issuance of instructions and suggestions. Assistance was 
 sometimes given in person, through the assignment of advisers and con- 
 sultants, and at other times in the form of circular letters prepared by the 
 National Planning Board. 79 Also, a series of regional meetings was held 
 under the auspices of the board. Other agencies of the national govern- 
 ment were frequently called upon for help and guidance. 80 The matters 
 selected for investigation included the distribution of population, the 
 analysis of any trends that were indicated, and such topics as land use, 
 industrial development, housing, and natural resources. 81 
 
 ,6 P.W.A., Circular No. 1, The Purposes, Policies, Functioning and Organization of the 
 Emergency Administration (1933), pp. 7-8. 
 
 "See National Planning Board, Fifth Circular Letter (December 11, 1933) and National 
 Resources Board, press release datea December 5, 1934. 
 
 ,8 National Planning Board, Eighth Circular Letter (March 22, 1934). 
 
 "Thirteen such letters were issued at irregular intervals. 
 
 ^P.W.A. Press Release No. 49 (August 13, 1933). 
 
 "Circular No. I, Op. cit., p. 9. 
 
SOME ADMINISTRATIVE PROBLEMS 
 
 75 
 
 The problems involved in formulating a comprehensive program with 
 respect to these matters were such that existing political boundaries were 
 rejected as possible delimitations of planning research. Accordingly, the 
 local boards were advised to take into consideration the possibility of 
 using metropolitan or other regional areas as natural planning units. 82 
 Political boundaries, it was pointed out, were much less significant than 
 a community of interest or a similarity of problems. The true boundaries 
 for a plan for any metropolitan area were said to be determinable by such 
 factors as commuting distance, free delivery from down-town stores, 
 telephone tolls, trading areas, etc. In the case of larger regional areas, 
 topographic and economic factors were also to be considered. The Na- 
 tional Resources Board has pointed out that governmental changes 
 adopted to facilitate the solution of the problems relating to future 
 economic developments would have desirable effects: 
 
 Far from injuring local or central government, such readjustments would in 
 reality strengthen them, by allocating functions and powers to appropriate agencies 
 and units. Instead of leaving the smaller units of government to starve or eke out 
 a miserable existence in many cases, it is possible to revive and restore them by 
 setting them up in a vital relationship in which they may function practically 
 instead of theoretically. 83 
 
 In spite of these and other potentialities, the immediate program 
 consumed the greatest part of the energies of the P.W.A. ; nor did a 
 division of that emergency establishment seem to be the appropriate 
 agency for the formulation of a permanent program including many items 
 other than expenditures on public works. The National Planning Board, 
 therefore, recommended the creation of a permanent board responsible 
 directly to the President, to coordinate, but not to supplant, other similar 
 agencies. 84 It was in accordance with this recommendation that the board 
 was reconstituted as the National Resources Board and later as the 
 National Resources Committee. The President's committee on adminis- 
 trative management has recommended the establishment of such a 
 planning agency on a permanent footing, 85 but such action has yet to be 
 taken. A bill to establish a permanent national planning board had been 
 introduced in the Senate as early as 1935, but it was not enacted into law. 86 
 
 The Consolidation of Public Works Agencies 
 
 The theory underlying the creation of the Public Works Administra- 
 tion was, of course, the belief that is possible so to plan and control public 
 
 "National Planning Board, Second Circular Letter (September 30, 1933). 
 8 M Report on Land Planning and Public Works, etc., (1934), p. 66. 
 M Final Report, op. cit., pp. 35-38. 
 
 M Senate Document No. 8, Reorganisation of the Executive Departments, 75th Congress, 
 1st Session, pp. 49-53. 
 
 8e For various points of view, see the hearings on the bill: Hearing before the Senate 
 Committee on Commerce on S. 2825, National Planning Board of 1935, 74th Congress, 1st 
 Session. 
 
76 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 works expenditures that the problems of an economic emergency may be 
 alleviated. Obviously, the great number of agencies, even of the national 
 government alone, engaged in the initiation and prosecution of construc- 
 tion present difficulties in inaugurating and carrying on a planned pro- 
 gram. No useful purpose would be served in listing all the bureaus and 
 units of the national government that deal with construction in one form 
 or another, but it may be pointed out there are so many of them that the 
 movement for their consolidation is not a new one. The Roosevelt 
 administration brought about the creation of many new agencies, several 
 of them dealing with construction, thus only emphasizing the need for a 
 reorganization of the administrative branch of the national government. 
 The movement for a consolidation of public works functions is but one 
 phase of the agitation for a general reorganization and consolidation of 
 governmental agencies. 
 
 The National Industrial Recovery Act provided for the creation of 
 new agencies, not the abolition of existing agencies. Nevertheless, a 
 general administrative reorganization was possible under the provisions 
 of other laws. A statute, effective until March 3, 1935, permitted the 
 chief executive to abolish any existing administrative units other than 
 any one of the ten departments, and to transfer functions from one 
 agency to another, all by executive order. The act contained no provision 
 for the disapproval of these orders by Congress; but it did require their 
 transmittal to that body, with the normal effective date of the orders to 
 be sixty days after such submission. 87 
 
 Under this grant of authority it is conceivable that all activities of 
 the national government relating to construction might have been con- 
 centrated in the Public Works Administration. The chief objection to 
 such a course was the status of the P.W.A. as an emergency agency with 
 a limited life. Nor did the P.W.A. itself make a contribution towards a 
 consolidation, as it might perhaps have done, by retaining the right to 
 supervise projects undertaken with the aid of P.W.A. allotments by other 
 agencies of the national government. A measure of consolidation was 
 achieved through the creation of a division of procurement in the Depart- 
 ment of the Treasury, and through the transfer to that division of some 
 construction activities formerly entrusted to scattered agencies, 88 but 
 this has been offset to some extent by the establishment of other new 
 agencies possessing authority in various phases of the financing, planning, 
 and construction of public works. The desire of some persons that the 
 P.W.A. be continued on a semi-permanent basis has only emphasized 
 
 "Disapproval might, presumably, have been effected through a statute passed over the 
 President's veto. 47 Stat, at L., 1517, as amended by ibid., vol. 48, p. 16. 
 
 M L. F. Schmeckebier, "Organization of the Executive Branch of the National Government 
 of the United States," Am. Pol. Sci. Rev., vol. 27 (1933), pp. 942, 950. 
 
SOME ADMINISTRATIVE PROBLEMS 77 
 
 the need for a consolidation of the many construction activities of the 
 national government. 89 
 
 Several bills designed to bring about a consolidation of public works 
 functions have been introduced in Congress in recent years. It has gen- 
 erally been thought desirable to concentrate such activities in the Depart- 
 ment of the Interior. During 1935, both houses held hearings on bills 
 intended to achieve this end, 90 and these measures met with the support 
 of Secretary Ickes. 
 
 While no action was taken by the Seventy-fourth Congress, it now 
 appears that action in the future is not entirely improbable. Early in 1937 
 the President submitted to Congress a report proposing a general reor- 
 ganization of the national administration. The report did not attempt to 
 assign functions to particular departments, but did, among other things, 
 recommend the creation of a Department of Public Works: 
 
 To advise the President with regard to public works. 
 
 To design, construct, and maintain large-scale public works which are not 
 incidental to the normal work of other departments, except as their agent on 
 request; to administer Federal grants, if any, to State or local governments or 
 other agencies for construction purposes ; and to gather information with regard 
 to public works standards throughout the Nation." 
 
 The committee on administrative management, which was responsible for 
 this recommendation, did not mention the Public Works Administration 
 by name, but did urge that even emergency and temporary agencies be 
 brought within one or the other of the departments whose duties it 
 outlined. 92 
 
 In view of past experience, one feels confident that there is certain to 
 be considerable opposition to the transfer of public works functions from 
 existing agencies, no matter to what department they are sought to be 
 shifted. It is possible that such opposition may long delay or even pre- 
 vent the carrying out of the President's recommendations. Ultimately, 
 however, the undertaking of a public works program by the national 
 government can be justified only if the national government is in a better 
 position than are the states to plan and control construction expenditures. 
 So far as centralizing public works activities in one agency is concerned, 
 one of the factors that enter into a determination of that fact, the 
 national government still lags behind many of the states. 
 
 On the other hand, a staff of investigators from the Brookings Institu- 
 tion has concluded that the creation of a central public works organiza- 
 
 "Administrator Ickes, as might be expected, is personally convinced that the P.W.A. 
 should be made a permanent agency of the government, with a public-works general staff as an 
 irreducible minimum. P.W.A. Press Release No. 3054 (December 8, 1Q36I. 
 
 '"Hearing before the Senate Committee on Expenditures in the Executive Departments on 
 S. 2662, To Change the Name of the Department of the Interior, etc.; and Hearing before the 
 House Committee on Expenditures in the Executive Departments on H.R. 7712, Change Name of 
 Department of the Interior, etc.; both 74th Congress, 1st Session. 
 
 "Senate Document No. 8, op. cit., p. 107. 
 
 n Ibid., p. 109. 
 
78 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 tion does not appear to offer any advantages either in economy or 
 efficiency. 93 That conclusion is based on the fact that construction work 
 is generally incidental to the exercise of a broader function and is so 
 diverse in character that different types of specialists are required for 
 different types of work. If this point of view is accepted, and the govern- 
 ment adopts the practice of using public works programs as a means of 
 economic stabilization, then one can urge the continuation of the P.W.A. 
 as a means of securing continuity of policy and administrative technique. 
 This possibility was suggested in the Brookings report. 94 
 
 "Report on Governmental Activities in the Field of Public Works and Water Resources 
 Prepared by the Brookings Institution, Report No. 14 to the Senate Select Committee to 
 Investigate the Executive Agencies of the Government (Senate Committee Print), 75th Congress 
 1 st Session, p. 1. 
 
 M Ibid., p. si- 
 
Chapter IV 
 
 FINANCES AND ALLOTMENTS 
 
 The Size of the P.W.A. Program 
 
 The sums which Congress has authorized to be expended on public 
 works, both in the Recovery Act and in subsequent statutes, do not give a 
 clear indication of the extent of the program undertaken by the Public 
 Works Administration. This is partly due to the fact, already pointed 
 out, that such appropriations were not made directly and irrevocably to 
 any agency, but to the President, who, in turn, issued the authority for 
 actual expenditures or ordered transfers to other agencies. 1 Furthermore, 
 the P.W.A. has also received some sums through the resale of securities 
 purchased in connection with loans to non-federal agencies, and the sums 
 available from this source are not clearly evident from statutory authori- 
 zations. 2 Accordingly, the size of the public works program of the 
 P.W.A. may be shown most readily by taking into account the actual 
 allotments made and the sums expended (see Table III). As of December 
 
 Table III. — Expenditures on P.W.A. Projects by Fiscal Year* 
 
 Fiscal Year 
 
 Total 
 
 Non-federal 
 Projects 
 
 Federal 
 Projects 
 
 1934 
 
 $ 615,549,265 
 
 $ 156,111,958 
 
 ? 459,437,307 
 
 1935 
 
 918,832,845 
 
 291,758,721 
 
 627,074,124 
 
 1936 
 
 657,049,469 
 
 376,860,255 
 
 280,189,214 
 
 1937 
 
 423.697.706 
 
 300,434,052 
 
 123,263,654 
 
 1938 (6 months) 
 
 134,885,034 
 
 103,488,625 
 
 31,396,409 
 
 Sub-total 
 
 2,750,014,319 
 
 1,238,653,611 
 
 1,521,360,708 
 
 Allotted but 
 
 
 
 
 unexpended 
 
 459,739.906 
 
 420,171,110 
 
 39,568,796 
 
 Grand total 
 
 23.209,754.225 
 
 $1,648,824,721 
 
 $1,560,929,504 
 
 *Source: Data furnished by P.W.A as of December 31, 1937. The amounts are the 
 payments made by the P.W.A., not the disbursements from the treasury. 
 
 31, 1937, the P.W.A. reported total allotments of $3,210,000,000, of which 
 $2,750,000,000 had actually been expended. 3 These figures exclude 
 special and statutory allotments, as well as housing allotments of about 
 $150,000,000 which are now charged to the United States Housing 
 Authority. 
 
 'This has frequently been done by Presidential letter rather than by executive order. 
 
 s For a statement of the funds available to the P.W.A. under all acts, and the disposition 
 of such funds, see: Hearings before the Subcommittee of the House Committee on Appropria- 
 tions, Independent Offices Appropriation Bill for 1939, 75th Congress, 2d Session, p. 1423. 
 
 3 If all expenditures from the Recovery Act appropriation are attributed to the P.W.A., the 
 total authorized expenditures would exceed $4,500,000,000. 
 
 79 
 
8o 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 Of the sums allotted to federal projects, it is not clear as to what 
 proportion was devoted to permanent construction. 4 It may, however, be 
 said that the entire sum indicated above was expended on some form of 
 construction. This statement would not, however, be even approximately 
 true if one charges the P.W.A. with all expenditures made from the 
 fund of $3,300,000,000 appropriated under the Recovery Act, for what- 
 ever purposes such expenditures were made. If that were done, the 
 expenditures on federal projects would be fixed at about twice the level 
 stated above, and the division of expenditures between permanent con- 
 struction and other purposes would be in the ratio of approximately four 
 to three, or $1,600,000,000 to $1,300,000,000/' Only from the funds 
 
 Table IV. — Expenditures on Non-Federal Projects by Fiscal Year* 
 
 Fiscal Year 
 
 Total 
 
 Loans 
 
 Grants 
 
 1934 itf V * 
 
 $ 156,111,958 
 
 *i 54.297.765 
 
 $ 1,814,193 
 
 1935 
 
 291,758,721 
 
 256,845,398 
 
 34.913.323 
 
 1936 
 
 376,860,255 
 
 168,115,234 
 
 208,745,021 
 
 1937 
 
 300,434,052 
 
 54,869,613 
 
 245,564,439 
 
 1938 (6 months) 
 
 103,488,625 
 
 13,421,901 
 
 90,066,724 
 
 Sub-total 
 
 1,228,653,61 1 
 
 647.549.9n 
 
 581,103,700 
 
 Allotted but 
 
 
 
 
 unexpended 
 
 420,171,1 10 
 
 143,300,127 
 
 276,870,983 
 
 Grand total 
 
 $1,648,824,721 
 
 $790,850,038 
 
 J857,974.683 
 
 'Source: Same as for Table III. 
 
 authorized prior to 1935 or from the proceeds of bond sales has the 
 P.W.A. been able to make allotments to agencies of the national govern- 
 ment. 6 It is for that reason that expenditures on federal projects pre- 
 dominated during the earlier years and have since dropped sharply. 
 
 The expenditures for federal projects represent outright grants of 
 funds, but those for non-federal projects include both loans and grants. 
 Over the period of years, the amounts of the loans and grants are about 
 equal, but expenditures on account of loans were overwhelmingly greater 
 during the first two years of P.W.A. activity. The decline in expenditures 
 charged to loans in later years has been due to the ability of public 
 bodies to raise their own share of the costs as business conditions im- 
 prove, and to the increasing disinclination of the P.W.A. to extend loans 
 as its resources grew more limited. 7 Then, too, the establishment soon 
 ceased extending aid to private corporations, which were eligible only 
 for loans. 8 
 
 4 A more critical question would concern the division of expenditures as between con- 
 struction and non-construction purposes, but even such a statement has not appeared. 
 6 Cf. P.W.A. Press Release No. 3109 (March 1, 1937)- 
 
 "But during 1938 additional funds were made available for federal projects. 
 'Cf. P.W.A. Press Release No. 145. 
 
 'Railroad corporations were the chief recipients of such loans, obtaining approximately 
 
 $200,000,000. 
 
FINANCES AND ALLOTMENTS 
 
 8 1 
 
 Revolving Fund.- — As has been pointed out above, the P.W.A. has 
 of late been financed largely through statutory permission to use funds 
 obtained through the sale of securities obtained earlier in connection with 
 loans to non-federal bodies. The National Industrial Recovery Act per- 
 mitted such sales, but required the proceeds to be covered into the 
 treasury for debt-retirement purposes. 9 That act imposed no limitations 
 either as to the amounts to be sold or the purchasers. During 1934, 
 Congress authorized the Reconstruction Finance Corporation to purchase 
 from the P.W.A. any marketable securities deemed satisfactory by the 
 corporation, subject to the proviso that the R.F.C. was not to have in- 
 vested in such securities more than $250,000,000 at any one time. The 
 proceeds were made available to the P.W.A. for the making of additional 
 loans, but not grants. 10 The Emergency Relief Appropriation Act of 
 1935 again authorized such sales without restriction as to amount or 
 purchaser, but also limited the use of the proceeds to loans. 11 In 1936, 
 Congress authorized the P.W.A. to make grants totaling $300,000,000 
 from funds obtained through such transactions. 12 Finally, in 1937, this 
 maximum was raised to $359,000,000, and the R.F.C. was permitted to 
 have invested as much as $400,000,000 at any one time in securities pur- 
 chased from the P.W.A. 13 In order to distinguish the funds obtained 
 through these transactions from monies obtained through appropriations, 
 the proceeds of the security sales are usually said to constitute the 
 revolving fund of the P.W.A. Loans and grants from this fund have 
 been made under the provisions of both the National Industrial Recovery 
 Act and the Emergency Relief Appropriation Act of 1935. 
 
 This progressive relaxing of the purse strings by allowing the re-use 
 of funds simply represents one method of financing the operations of the 
 P.W.A. An alternative method of continuing the functioning of the 
 establishment would have been to provide a new appropriation, as was 
 done in two instances. It may be pointed out that the policy that has 
 generally obtained, combined with the fact that loans have been made with 
 some reluctance, means that the recoverable assets of the P.W.A. pro- 
 gram will in the end be almost insignificant. However, to such funds as 
 finally revert to the treasury after the payment of loans, there will be 
 added any profits made by the Reconstruction Finance Corporation in 
 disposing of the bonds purchased by it, less any losses that are sustained. 
 The government will also benefit from the payment to it of interest in 
 
 "48 Stat, at L., 195, 200, section 203(a). The P.W.A. at first sold the bonds in the open 
 market under regulations calling for competitive bidding; see P.W.A. Press Releases Nos. 528 
 and 556. Subsequent sales have been made to the R.F.C. which, in turn, sells the bonds to 
 the public; ibid., No. 1853. 
 
 10 48 Stat, at L., 1056. 
 
 a Ibid., vol. 49, p. us, section 12. 
 
 "Ibid., pp. 1608, 1609. 
 
 "Ibid., vol. 50, p. 358. See also ibid., pp. 351 and 358, which permit the use of $15,000,- 
 000 from this fund for administrative expenses. 
 
82 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 excess of the charges paid by the government on its obligations, since 
 all interest received has been paid into the treasury from the beginning. 
 Finally, the benefits received by the national government and non-federal 
 bodies, in the form of completed projects and in the stimulation of 
 employment, must also be considered assets, even though it may be 
 impossible to convert them into cash. 
 
 Allotments to Agencies of the National Government 
 
 The Recovery Act enumerated many projects of the kinds normally 
 built by agencies of the national government, and authorized the Presi- 
 dent to construct, finance, or aid in the construction and financing of such 
 undertakings. 14 The Public Works Administration was thus in a position 
 to make extensive allotments to federal agencies. These allotments were, 
 of course, outright grants carrying no obligation for repayment. Pre- 
 sumably the P.W.A. could have maintained control over the progress of 
 work on such federal projects, as it did in the case of non-federal 
 projects, but had it attempted to do so considerable friction might have 
 resulted as a consequence of one agency of the government supervising 
 the work of other agencies. Accordingly, the actual functions of the 
 P.W.A. with respect to federal projects were somewhat limited. No in- 
 vestigation of the technical or legal aspects of the undertaking was made, 
 so long as it was considered to be economically sound and capable of 
 providing a substantial amount of employment. 15 The labor and material 
 policies of the P.W.A. were made applicable to such projects, subject 
 to other federal law. 16 
 
 The many allotments that were made for federal projects may be 
 accounted for by several factors. An early beginning on actual construc- 
 tion was made possible since these outright expenditures could be 
 authorized without the necessity for drawing up loan and grant agree- 
 ments, and since no detailed examination of the structural specifications 
 was thought necessary. Many of the agencies already had plans developed 
 to a point where construction contracts could be let promptly once the 
 funds were made available. Then, too, these government agencies could 
 undertake the inspection of their own projects, and there was no need 
 for awaiting the creation of a P.W.A. inspection force, or the danger of 
 opening opportunities for the misuse of funds. The effect of allotments 
 was frequently only the expediting of construction that would otherwise 
 have been undertaken at a later date. Congress had in some instances 
 
 "See chap, i, supra. Allotments to the District of Columbia and to the territories may be 
 considered to be non-federal loans and grants. Cf. 48 Stat, at L., 12 15. 
 
 "Nor were even these factors considered when the allotment was directed by statute or 
 executive order. 
 
 "See P.W.A., Bulletin No. 51, Information Relating to the Negotiation and Administration 
 of Contracts for Federal Projects, etc. (1033). This bulletin was twice revised. 
 
FINANCES AND ALLOTMENTS 83 
 
 already authorized the projects, or had even appropriated the necessary 
 funds, but actual construction had been delayed by the failure to make 
 appropriations or by the impounding of such funds as were available. 17 
 
 Question of Congressional Intent. — When the Public Works Adminis- 
 tration was created, there was in existence a survey of building require- 
 ments made by an inter-departmental committee of the treasury and post 
 office departments. 18 Congress had authorized the expenditure of $100,- 
 000,000 for the construction of certain of these buildings, but the appro- 
 priation was later diverted to the Civilian Conservation Corps, except for 
 such sums as had already been obligated. It was apparently thought by 
 some members of Congress that the P.W.A. should first make allotments 
 for the buildings included in that survey. When, instead, the P.W.A. 
 financed such buildings only to a limited extent, that action was criticized 
 by members of Congress, particularly because many allotments had been 
 made for buildings that did not have such direct sanction by Congress. 19 
 Administrator Ickes' position was that he was justified in looking only to 
 the Recovery Act for his authority, and he called attention to the failure 
 of that statute to require a preference for any particular building projects. 
 
 There is, in fact, no evidence that the P.W.A. made an arbitrary 
 selection of federal projects. An inter-departmental committee was ap- 
 pointed to consider projects which were deemed to have been author- 
 ized by Congress, but for which no allotments had been made. 20 Further- 
 more, in many instances, the approval of the Department of the Treas- 
 ury and the Bureau of the Budget was obtained prior to the allotment 
 of funds. 21 Also, changed conditions caused many allotments to be made 
 in a lesser amount than estimated to be necessary in the original survey, 
 and other projects were rejected as being unnecessary. Finally, it was 
 pointed out at the time, over half of the buildings listed in the survey had 
 been approved by the P.W.A., but actual allotments to many of them 
 were precluded by a temporary exhaustion of funds. 22 
 
 There was also some criticism in Congress because allotments were 
 made for projects which, in the opinion of some persons, had previously 
 been disapproved by Congress. When one such case was called to the 
 attention of the administrator, the allotment was rescinded except for 
 
 "flayer, op. ext., p. 10; and P.W.A. Press Releases Nos. 92 and 224 (October 20, 1933). 
 
 "House Document No. 788, Construction of Public Buildings Outside the District of 
 Columbia, 71st Congress, 3d Session, serial 9380. 
 
 "Hearing before the Subcommittee of the House Committee on Appropriations in Charge 
 of Deficiency Appropriations, Additional Appropriations for Emergency Purposes, 73d Congress, 
 2d Session, pp. 215 ff. See also ibid., Deficiency Appropriation Bill for 1934, pp. 250 ff. 
 
 m Ibid. 
 
 "P.W.A. Press Releases Nos. 10 (July 14, 1933) and 108 (September 10, 1933). 
 
 "Some allotments for projects not on the approved list were made at the request of 
 postal authorities as a weapon with which to obtain favorable leases from the owners of sub- 
 station buildings. Cf. the testimony cited in note 19, supra, and the Report of the Secretary of 
 the Treasury, etc., fiscal year ended June 30, 1935 (serial 10036), p. 149. 
 
84 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 money already obligated. 23 At another time, the administrator was asked 
 if, when making allotments, he knew whether or not Congress had 
 previously refused to make appropriations for the projects under con- 
 sideration. He gave what would seem to be the only possible reply, that 
 he had not always known, but added, "I will say we will always know in 
 the future." 24 It is difficult to understand how this could be invariably 
 done, since the necessary information could be obtained only by a tabu- 
 lation of every project that had ever been rejected by either house of 
 Congress or by committees thereof. It might, however, be possible to 
 place the burden of supplying the necessary information upon the agency 
 seeking an allotment. The administrator was of the opinion that no 
 federal agency should ask for an allotment if Congress had denied an 
 appropriation for the project, or if one had been granted on the theory 
 that the amount provided was sufficient. 25 Obviously, allotments of a 
 supplementary character do violence to the legislative intent equally with 
 allotments to begin construction where Congress has refused an appro- 
 priation altogether. 
 
 In connection with some federal projects the P.W.A. made allotments 
 short of the entire amount needed for the completion of the undertaking. 
 This action had the effect of practically committing Congress to additional 
 appropriations for the completion of the projects, since further allotments 
 from the P.W.A. were not generally available. The possibility of such 
 situations occurring was somewhat lessened by a provision in the 
 Emergency Relief Appropriation Act of 1936. It was provided that no 
 federal project under that statute should be undertaken or prosecuted 
 until an amount sufficient for its completion had been allocated and ir- 
 revocably set aside. 26 This same purpose was sought to be effected by a 
 similar provision, Section 201 (h), of the Public Works Administration 
 Appropriation Act of 1938. 
 
 Other Questions. — As is generally known, the last few years have 
 seen the division of the national budget as between regular and emergency 
 sections. That in itself may be desirable, insofar as it permits a separate 
 analysis of the two categories of expenditures and prevents the confusing 
 of two quite distinct problems. It may be pointed out, however, that it 
 is not always easy to segregate emergency expenditures from ordinary 
 expenditures. When the Secretary of the Treasury reported to Congress 
 on the allocation of the $3,300,000,000 fund, he was able to divide the 
 allotments to regular agencies into two groups, ordinary governmental 
 
 "Hearings before the Subcommittee of the House Committee on Appropriations on H.R. 
 7527, Federal Emergency Relief and Civil Works Program, 73d Congress, 2d Session, p. 53. 
 "Additional Appropriations for Emergency Purposes, op. cit., pp. 240 ff. 
 
 "The only exception, he thought, should be instances in which the sums available had been 
 subsequently withdrawn, apparently meaning a diversion of funds without a repudiation of the 
 project. 
 
 M 4Q Stat at L., 160S. 
 
FINANCES AND ALLOTMENTS 
 
 85 
 
 expenses and emergency public works, but the allotments to the newer 
 agencies were all listed under the second heading. 27 It would seem that 
 there was a conscious attempt made to avoid segregating expenditures for 
 emergency construction purposes from the ordinary administrative and 
 clerical expenditures of the recovery agencies. It seems to be clear that 
 many of these agencies received allotments for non-construction purposes, 
 for, as pointed out earlier in this chapter, only about one-half of the 
 P.W.A. allotments for federal projects were for construction activities. 
 Among the agencies that received allotments, but that apparently did not 
 use the funds for construction purposes, may be listed the Executive 
 Council, the National Emergency Council, the Export-Import Banks, the 
 National Resources Board, and the Office of the Advisor for Foreign 
 Trade. 28 
 
 The tracing of the purposes for which emergency funds were ex- 
 pended is complicated by the fact that in many instances these funds 
 were expended for the same purposes as ordinary appropriations, some- 
 times at the same place and on the same undertaking. The Comptroller 
 General held that, in rendering accounts to him, it was necessary to 
 allocate expenditures as between regular and emergency funds, despite 
 complaints that a vast amount of accounting detail would be required. 29 
 He ruled that since P.W.A. allotments were made for individual projects 
 the accounting should be according to such projects, either on an ac- 
 tual basis or on an estimated pro rata cost distribution. It may also 
 be pointed out that the Emergency Relief Appropriation Act of 1935 
 prohibited expending the appropriation then made for the administrative 
 expenses of any agency of the government if such expenses were ordi- 
 narily financed from annual appropriations, unless additional tasks were 
 imposed as a consequence of the enactment of that joint resolution. 30 
 The evil this was designed to prevent must be apparent. As a conse- 
 quence of the decision of the Comptroller General and the act of Con- 
 gress, the basic data for a proper segregation of expenditures from 
 P.W.A. funds into regular and emergency purposes, and construction 
 and non-construction activities, is probably available, but no detailed 
 analysis has yet appeared. 
 
 The P.W.A. occasionally joined with other federal agencies in 
 financing particular projects, although such joint enterprises permitted 
 the accomplishment of an end that Congress had probably not anticipated. 
 For example, the P.W.A. earmarked $2,500,000 of its funds to aid in 
 
 "Senate Document No. 40, Statement Relative to Funds Under the N.R.A., 74th Congress, 
 1st Session, serial 9900. 
 
 28 See also the statement presented by the Director of the Budget as of March 31, 1936; 
 Hearing before the Subcommittee of the House Committee on Appropriations in Charge of 
 Deficiency Appropriations, First Deficiency Appropriation Bill for 1036, 74th Congress, 2d 
 Session, Part IL p. 430. 
 
 !9 i3Comp. Gen., 249, No. A-54128 (March 24, 1934). 
 
 30 49 Stat, at L., 115, section 11. 
 
86 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 financing projects undertaken by the Federal Emergency Relief Ad- 
 ministration. This was deemed necessary since relief funds could be 
 used to pay wages in lieu of direct relief, but could not, at the time, be 
 used in payment of the supervision of construction or the cost of ma- 
 terials. 31 Joint financing of projects was probably not illegal, but should 
 such practices generally prevail among the financing agencies of the gov- 
 ernment little real Congressional control over expenditures would exist. 
 P.W.A. participation in such enterprises seems to have been at least in 
 violation of the spirit of the statutes. It was empowered to make grants 
 only to a limited extent, the balance of the necessary funds to be supplied 
 by the applicant from his own resources or as a result of a loan from 
 the P.W.A. It does not appear to have been the intention of Congress 
 that the entire cost of the project be borne by the national government 
 except in the case of federal projects, a category into which many of 
 these joint enterprises do not fall. 
 
 It may be suggested that in future legislation Congress might well 
 insert a provision limiting federal participation in projects to one agency 
 operating under a single statute. Otherwise, several agencies each 
 operating under different restrictions may extend aid to the limit of their 
 powers, so that the result is one quite different from that intended in any 
 one statute. At present, however, such a provision is of doubtful utility, 
 since the Works Progress Administration has been empowered to finance 
 the entire cost of any eligible project. The P.W.A. itself has, however, 
 rather recently adopted a regulation removing some of the dangers in- 
 herent in joint financing of projects: 
 
 If the Applicant shall receive any funds (other than those received under the 
 terms of the Offer), directly or indirectly from the Government, or any agency or 
 instrumentality thereof, to aid in financing the construction of the project, to the 
 extent that such funds are so received the grant will be reduced, and in case the 
 Government has offered to purchase Bonds, to the extent that such funds so 
 received exceed the grant set forth in the Offer, the aggregate principal amount 
 of bonds to be purchased by the Government will be reduced. 32 
 
 The word government as used in the above quotation, except when it 
 first occurs, is synonymous with the Public Works Administration. 
 
 By way of summary, it may be said that so far as P.W.A. financing 
 of federal projects is concerned, several problems arose: the question 
 of legislative intent, the difficulties in accounting for emergency ex- 
 penditures as against regular expenditures, and the question of joint 
 sponsorship of projects by several federal agencies. In view of these 
 problems, one may question the utility of appropriating funds to the 
 
 31 P.W.A. Press Release No. 236 (October 25, 1934). See also ibid., Nos. 218 and 259. 
 These releases indicate that the P.W.A. made some grants of thirty per cent of the cost of the 
 project, presumably to the local sponsoring body, while the relief administrator supplied the 
 balance of the funds. 
 
 32 P.W.A., Terms and Conditions (1936), p. 3. 
 
FINANCES AND ALLOTMENTS 
 
 87 
 
 President or to a particular agency to be allotted to other agencies. 33 The 
 P.W.A., from 1935 to 1938, did not have the power to make allot- 
 ments to federal agencies, except from the funds appropriated prior to 
 1935 or from the proceeds of bond sales, a situation due to the limited 
 delegation of powers under the 1935 and 1936 statutes. That power, 
 however, continues to be exercised by the President and by the Works 
 Progress Administrator. If Congress is willing to appropriate funds 
 without any real restrictions on their use, there seems to be no reason 
 why the present system cannot be continued. If, however, continuing 
 legislative control over the purposes of expenditures is desired, lump- 
 sum appropriations to particular agencies would seem to provide ade- 
 quate elasticity and at the same time assure effective legislative control. 
 Should a permanent public works department be created, all appropria- 
 tions for construction activities ought probably be made to that agency, 
 whether for normal or for emergency construction. This would tend to 
 guarantee the maintenance of ordinary standards adhered to by the 
 government and would prevent the growth of new public works agencies, 
 which in time would again have to be consolidated. 
 
 This last point would also apply to appropriations for emergency 
 purposes in general, since, as is well known, the effect of appropriating 
 monies directly to the President has been a great increase in the number 
 of separate federal establishments. Where two or more agencies possess 
 similar powers there is not only likely to be a duplication of effort, but 
 the activities of one may hamper those of the other. Thus, public bodies 
 eligible for P.W.A. allotments frequently sought the more favorable 
 terms of other agencies, such as the Works Progress Administration. A 
 resolution adopted by the Advisory Committee on Allotments, with the 
 approval of the President, attempted to halt this practice. It was pro- 
 vided that if an application filed with the P.W.A. were withdrawn no 
 allotment by other works-financing agencies would be approved by the 
 committee, except with the consent of the P.W.A. Furthermore, no 
 allotment was to be made to applicants able to finance projects under 
 P.W.A. conditions but who refused or neglected to do so. 34 One wonders 
 how effective this resolution has been in preventing public bodies from 
 shopping among federal agencies for the most favorable terms. 
 
 The Public Works Administration has never shown any inclination 
 itself to undertake projects that fall within the scope of the functions 
 of other federal agencies. Yet, Congress was probably wise in inserting 
 in the Emergency Relief Appropriation Act of 1935 the following 
 provision: 
 
 33 In this connection see 48 Stat, at L., 351, 352, which provided that no part of the appro- 
 riation then made should be allotted for expenditure on a Civil Works Administration project 
 y any other department or establishment of the national government, except for certain stated 
 exceptions. 
 
 34 P.W.A. Press Release No. 1557. 
 
88 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 . . . . that rivers and harbors projects, reclamation projects (except the drilling 
 of wells, development of springs and subsurface waters), and public buildings 
 projects undertaken pursuant to this joint resolution shall be carried out under the 
 direction of the respective permanent Government departments or agencies now 
 having jurisdiction of similar projects. 35 
 
 This will, it appears, prevent the growth of emergency construction 
 agencies having functions similar to, or identical with, those of regular 
 government departments and establishments. 
 
 Grants and Loans to Non-Federal Agencies 
 
 Congress sought not only to provide for the financing of federal 
 projects, but also to aid the construction of undertakings sponsored by 
 non-federal agencies. Indeed, the latter were thought to be most desirable, 
 since many essential public services were associated chiefly with state 
 and local governments, rather than with the national government. As 
 the Director of the Budget said at the time the Recovery Act was being 
 considered by Congress, if reliance were placed almost exclusively on 
 federal construction, the result might be many unnecessary projects and 
 the imposition of a permanent and recurring charge on the treasury for 
 their upkeep. 36 The non- federal beneficiaries of P.W.A. assistance were 
 chiefly the states, municipalities, and other public bodies, which were 
 eligible for both loans and grants of federal money. In addition, the 
 P.W.A. has made loans to private corporations from the funds appro- 
 priated prior to 1935, or from the proceeds of the sale of securities 
 obtained by it in connection with other loans, but not from subsequent 
 appropriations. 
 
 Grants. — Under the Recovery Act, grants to public bodies were 
 limited to a maximum of thirty per cent of the cost of labor and ma- 
 terials employed on the project, 37 a figure that seems to have been ar- 
 rived at rather arbitrarily. The presidents of both the American Federa- 
 tion of Labor and the Chamber of Commerce of the LJnited States sug- 
 gested that a grant of the entire cost of the project should be permitted. 38 
 Had the normal practice with respect to federal subsidies been followed, 
 the grant would regularly have been fifty per cent of the total cost of 
 the project. At the committee hearings, Senator Couzens indicated that 
 he was disturbed by the fact that grants were not required to be uniform 
 and that, as a consequence, grants might in some cases be made up to 
 the maximum permitted, in others in a smaller amount, and in still others 
 not at all. Senator Wagner, one of the chief authors of the bill, disposed 
 
 "40 Stat, at L., 115, section 1. 
 
 ^Hearings before the House Committee on Ways and Means on H.R. 5664, National 
 Industrial Recovery, 73d Congress, 1st Session, p. 25. 
 ''48 Stat, at L., 195, 200, section 203 (a). 
 
 ^Hearings before the House Committee, op. cit., pp. 120, 135. 
 
FINANCES AND ALLOTMENTS 
 
 8 9 
 
 of this objection by stating that, in his opinion, the provision for grants 
 would 
 
 .... be helpful primarily to the small communities which may need some public 
 projects and have not the finances with which to finance the entire project, and 
 yet it might be desirable to keep the working people living in that section rather 
 than compel them to go to some other community in search of work. There he 
 [the President] may deem it a worthy thing and one in the interest of the general 
 public welfare to grant a portion of the cost of construction. I don't think it will 
 be generally used. If used at all, it will be used in those smaller communities. 
 That is my conception of it. 88 
 
 Senator Wagner proved to be a poor prognosticator, for the system 
 of grants has been an essential part of the P.W.A. works program. In 
 fact, there have been a great many cases where grants were made not in 
 conjunction with loans but as a complete transaction, the grantee ob- 
 taining the remaining funds from other sources. In the case of the 
 $400,000,000 road fund the entire amount was, of course, expended in 
 the form of grants. So far as is known, there was no financial aid ex- 
 tended to public bodies which did not include an outright grant. How- 
 ever, under the regulations first formulated, it was indicated that the 
 President had prescribed certain tests to determine whether to make the 
 grant and, if so, to what extent. 40 It was declared that the determining 
 factors would be the social and economic significance of the project, its 
 relative importance in the comprehensive program of public works con- 
 templated by the act, and the extent to which construction would provide 
 employment and purchasing power in the vicinity of the project. It was 
 indicated that certain classes of projects would be preferred: (1) water- 
 works projects not unduly burdening the community with debt, and 
 necessary for its health and convenience; (2) sewer projects of the 
 same character; (3) sewage-disposal projects; and (4) other projects of 
 a regenerative character, i.e., those which tend to stimulate further con- 
 struction, such as highways, bridges, tunnels, and the transmission of 
 electrical energy. 
 
 It was also said that the President, in determining whether to allow or 
 withhold the grant, would prefer those public bodies which had balanced 
 budgets or were in the process of putting their finances in order. This 
 was in pursuance of a provision of the Recovery Act which allowed the 
 President to prescribe the conditions under which grants might be made 
 to public bodies, with an added proviso that he might "consider whether 
 action is in process or in good faith assured therein reasonably designed 
 to bring the ordinary current expenditures thereof within the prudently 
 estimated revenues thereof." 41 This cumbersome provision applied to 
 
 39 Hearings before the Senate Finance Committee on S. 17 12 and H.R. 5755, National 
 Industrial Recovery, 73d Congress, 1st Session, p. 12. 
 
 ■■"Circular No. 1, The Purposes, Policies, Functioning and Organisation of the Emergency 
 Administration (1933), p. 8. 
 
 "48 Stat, at L., 195, 200, section 203 (a). See also Executive Order No. 6252 (August 
 18, 1933)- 
 
go 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 both loans and grants. Subsequent acts did not contain similar expres- 
 sions, and it is doubtful whether there were instances in which grants 
 were withheld solely because of a lack of balance between the revenues 
 and expenditures of public bodies. In one case, where funds were re- 
 leased to the city of New York after a budget-balancing program, the 
 actual allotment had been made at an earlier date, and the P.W.A. did 
 not rule as to whether the budget was actually balanced. 42 
 
 In limiting grants to thirty per cent of the cost of labor and materials 
 employed, the Recovery Act made it necessary to determine what portion 
 of the total cost of a project was attributable to labor and materials. 
 Presumably, this might have been construed to include all expenditures in 
 connection with the project, but costs merely incidental to actual con- 
 struction were at first excluded in fixing the grant base. In the beginning, 
 the grant was calculated on the basis of eighty-five per cent of the total 
 cost, that proportion being rather arbitrarily fixed as due to labor and 
 materials. 43 After December 20, 1933, however, a more liberal policy was 
 adopted which redefined labor and material costs so as to include the 
 cost of field supervision. In addition to that last item, the grant base 
 constituted the aggregate of payments pursuant to the contract for the 
 construction of the project or, if the work was done by force account, the 
 direct cost of materials in place. The new grant policy was not made 
 retroactive. 44 
 
 The Emergency Relief Appropriation Act of 1935, and the delegations 
 of power under that statute, contained no provision limiting the amount 
 of the permissible grant. There was, however, a provision that loans 
 and grants to public bodies could be made "where, in the determination 
 of the President, not less than twenty- five per centum of the loan or the 
 grant, or the aggregate thereof, is to be expended for work under each 
 particular project." 45 The meaning of this phase is none too clear, but 
 the limitation seems to require that twenty-five per cent of each allot- 
 ment be expended for on-site labor as against materials. This limitation 
 has not affected the Public Works Administration, since approximately 
 forty per cent of the total cost of a project, not merely of the allotment, 
 is ordinarily due to direct labor charges. 
 
 This failure of Congress to impose any limitation on the amount of 
 the outright grants enabled the P.W.A. to raise the maximum grant to 
 forty-five per cent of the total cost of the project. This was done during 
 1935, after the President had approved a resolution of the Advisory 
 Committee on Allotments: 
 
 "P.W.A. Press Releases Nos. 341 and 691. 
 
 43 P. F. Hopkins, "Public Works Administration," American Municipalities, vol. 59, no. 3 
 (December, 1934), p. 15. 
 
 M P.W.A., Manual for Engineer Inspectors (1934), p. 80. 
 45 49 Stat, at L., 115, section 1. 
 
FINANCES AND ALLOTMENTS 
 
 91 
 
 .... that the amount of the grant for the normally acceptable project be fixed at 
 45 per cent of the cost of such project; provided, however, that the Federal Emer- 
 gency Administrator of Public Works shall have authority after careful investiga- 
 tion of the financial condition of any applicant .... and the nature and work- 
 producing character of the project, to recommend to this committee a variation in 
 the amount of the grant. 46 
 
 Congress apparently approved of this administrative action raising 
 the ordinary maximum for grants to forty-five per cent of the total cost 
 of the project. At any rate, when Congress subsequently allowed the 
 use of $300,000,000 in the revolving fund for grant purposes, it fixed 
 the maximum grant at the same level. 47 Early in 1937, however, a 
 different policy was adopted, apparently as a result of verbal instructions 
 from the President. 48 
 
 An order sent to all field offices limited grants to 115 per cent of the 
 amount paid to workers taken from relief rolls. That is, the P.W.A. 
 indicated its willingness to pay as a grant only an amount equal to that 
 paid those workers on the project who were selected from relief rolls, 
 plus an additional 15 per cent of such amount in order to offset the high 
 costs and low efficiency incident to the use of such labor. In no case was 
 the maximum grant to exceed more than 45 per cent of the total cost of 
 the project. This new policy was not popular either with the P.W.A. or 
 with applicants, and many exceptions to it were made, both before and 
 after the new basis for grants became generally known. 49 During June, 
 1937, the establishment reverted to the policy of making grants equal to 
 45 per cent of the cost of the project, 50 but at about the same time a halt 
 was called to the receipt of further applications for funds. It seems clear 
 that the grant policy in effect during the first half of 1937 was motivated 
 by a feeling that pump-priming activities were less needed than ordinary 
 work relief. 
 
 Administrator Ickes has upon several occasions expressed the belief 
 that grants should not be made at a uniform percentage, but that they 
 should be measured by the financial ability of each applicant and by the 
 condition of local resources. He feels that the administrator should 
 possess wide discretionary powers to adjust the size of the grant to each 
 situation presented. Obviously, it would be no easy task to resist in- 
 sistent demands that the maximum permissible grant be made in each 
 instance, but he believes that such difficulties can be surmounted by edu- 
 cating the people generally, and those in public life particularly, to the 
 equitable character of a system of elastic grants. 51 His optimism is not 
 
 ■"National Emergency Council Press Release No. 2-10 (May 24, 1935). 
 "tqStat. at L., 1608, 1609. 
 
 48 Hearings before the Subcommittee of the House Committee on Appropriations, Extension 
 of the Public Works Administration, 75th Congress, 1st Session, p. 43. 
 4B Ibid., pp. 43-45- See also P.W.A. Press Release No. 3202. 
 t0 P.W.A. Press Release No. 3176 (June 25, 1937). 
 
 6, See his address before the United States Conference of Mayors, November 17, 1936. The 
 writer has used the advance, mimeographed release. 
 
9 2 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 shared by this writer, and it may be argued that such a system would 
 appear to penalize public bodies that have maintained a sound financial 
 condition. 
 
 The general policy of the P.W.A. has been such that grants have 
 normally been made in the maximum amount permissible. Nevertheless, 
 the grant average on non-federal projects, under all programs, is only 
 about thirty per cent of the total costs. 52 This is due to the exclusion 
 from the grant base of certain costs. Under the Recovery Act, such items 
 as land costs and the fees paid engineers and other specialized profession- 
 als were excluded from the grant base. In the case of allotments made 
 under later acts, land and planning costs were included, unless they had 
 been incurred prior to the date of the application's approval. 53 The cost 
 of movable articles of furniture and equipment has frequently been in- 
 cluded in the grant base, although the Comptroller General held, at a 
 rather late date, that this was not permitted under the National Industrial 
 Recovery Act. 54 
 
 At an early date, the question was raised as to the possibility of ad- 
 vancing part of the grant prior to the beginning of construction, in order 
 to expedite construction by making immediately available the funds nec- 
 essary for the formulation of the final engineering specifications. The 
 Attorney General ruled that such payments could be made, holding that a 
 grant for the construction of a project meant a grant to be employed in 
 construction activities, rather than a grant for a project completed with 
 the use of other funds. 55 The fact that the grant base could not be defi- 
 nitely determined until after the project was completed did not appear 
 to the Attorney General to be an "insurmountable obstacle to the advance- 
 ment, under proper contract and with proper estimates, of portions of the 
 grant prior to the actual employment of labor and material." The P.W.A. 
 has, accordingly, made both advance and intermediate payments of por- 
 tions of the total grant. The percentages of the grant advanced prior to 
 the completion of construction have varied, but the rules in effect during 
 the last few years are indicated in Table V. The advance grants may be 
 used only for limited purposes, such as architectural, engineering, and 
 planning fees, the costs of surveys and other preliminary investigations, 
 and the expenses involving in preparing specifications, contract documents, 
 and advertisements ; but not in payment of legal fees, or the cost of lands, 
 easements, or rights-of-way. 56 
 
 If the final cost of a project is in excess of the estimates upon which 
 the grant offer was based, only the amount offered in the original agree- 
 
 "P.W.A. Press Release No. 3178 (July 2, 1937). 
 
 53 But they were even then sometimes included. See Administrative Orders Nos. 153 (June 
 29, 1936) and 161 (August 18, 1936), 1 Fed. Reg., 857, 1406. 
 54 i6 Comp. Gen. 901, No. A-83053 (March 31, 1937). 
 55 3 7 Op. Atty. Gen., 413 (January 26, 1934). 
 
 5a See also Administrative Order No. 79, supplements 8 (May 19, 1936) and 1 (August 15, 
 1936), 1 Fed. Reg. 49s, 1342- 
 
FINANCES AND ALLOTMENTS 
 
 93 
 
 ment is paid, unless that agreement has been amended. If the final cost 
 is less than the original estimate, payments are limited to the maximum 
 percentage specified in the agreement, and will not reach the maximum 
 amount specified. Ten per cent of the grant base has been generally 
 withheld from the recipient of the allotment until after the completion 
 of the project in order to supply a margin of assurance that no grant 
 will be made in excess of the maximum percentage agreed upon. 
 
 Table V. — Grant Payments* 
 
 
 Where grant 
 
 is 30% of 
 cost of labor 
 and materials 
 
 Where grant 
 is 45% of 
 total cost 
 
 Advance grant 
 
 5-io% 
 20% 
 30% 
 
 15-25% 
 35% 
 45% 
 
 Intermediate grant (when 70% completed) 
 
 Final grant (after completion) 
 
 *Source: P.W.A. Forms No. 166, 179, 188, and 200. The percentages stated are the 
 maximum amounts allowed and are cumulative totals. 
 
 Loans. — The P.W.A. was authorized to make loans equal to the 
 entire cost of the project less the grant or, if no grant was involved, 
 of the entire cost. Certain corporations not eligible for grants were, 
 under the first works program, nevertheless eligible for loans. These 
 included railroad corporations, corporations of quasi-public character 
 operating certain self -liquidating projects, and certain other corpor- 
 ations. 57 Loans have normally been secured through the purchase of 
 the borrower's bonds, rather than by the acceptance of such bonds or 
 other property merely as security for the loan. In general, three types 
 of bonds have been accepted: (1) general obligation bonds, in connection 
 with non-revenue-producing projects; (2) limited obligation bonds, with 
 debt service limited to the utility, used only in connection with revenue- 
 producing projects; 58 and (3) special assessment bonds, where author- 
 ized by state law. 59 
 
 The practice from the beginning was to encourage public bodies to 
 apply for a P.W.A. grant, but to obtain the balance of the needed funds 
 from other sources. At present, even after the applicant has accepted a 
 loan offer, he may sell all the bonds to purchasers other than the govern- 
 ment, if such sale can be consummated on favorable terms. The prior 
 
 "See chap, v, infra. 
 
 58 If the enterprise is an extension of existing facilities, either the revenues of the whole 
 project or those of the portion financed by the P.W.A. may be pledged, whichever is required to 
 afford adequate security. 
 
 58 Circular No. 1, op. ext., p. 13. See also P.W.A. Press Releases Nos. 1097 and 3110 
 (March 7, 1937) • 
 
94 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 consent of the P.W.A. to such sales is not required, unless only a portion 
 of the bonds can be sold in the private market. In that event, the P.W.A. 
 reserves the right to adjust the maturities of the bonds purchased by the 
 establishment to its own satisfaction. 60 It has already been pointed out 
 that while the loans equal the grants in value over the period of years, 
 loans have been relatively few since 1935. 
 
 The P.W.A. has regularly bid par and accrued interest on the bonds 
 offered, and has taken the bonds at that price, provided private investors 
 or brokers did not bid the same or a higher price. 61 The interest rate 
 demanded of private corporations was generally between four and five 
 per cent. That charged public bodies has regularly been four per cent, 
 and, where the bonds offered carry a higher rate, the P.W.A. bids a 
 premium or otherwise refunds the difference. 02 The four per cent 
 interest rate represents a compromise between two factions of the 
 Special Board for Public Works. 63 This interest rate has not been re- 
 duced as the private market for bonds has improved. During 1935, it 
 was announced that for future loans the rate would be three per cent, 
 but the higher rate was soon restored. 64 This was done, apparently, 
 because at the lower rate public bodies, even those with reasonably good 
 credit ratings, were less likely to seek funds in the private market. 
 The P.W.A., with its limited funds, sought to make as few loans as 
 possible. 
 
 Administrator Ickes has, however, pointed to the possibility of using 
 government competition to improve the market for the obligations of 
 public bodies. In arguing that the P.W.A. should be made a permanent 
 agency, he indicated that, in addition to formulating public works plans 
 for future contingencies, it can perform other services: 
 
 There is another public function which PWA might properly perform. Take 
 a case of a municipality where the banks are insisting upon an unreasonably high 
 interest rate as a condition precedent to floating a bond issue for a school or 
 sewerage system or some other needed improvement. In such an instance PWA 
 might very well offer to take the bonds of that municipality at a reasonable rate 
 and thus prevent it from being bludgeoned into paying an exorbitant rate of 
 interest. 65 
 
 The redemption period for loans has been fixed in accordance with 
 state statutes and with the nature of the project. Normally that has 
 meant repayment over a thirty-year period, except in the case of projects 
 which obviously have a longer useful life, where the maximum amorti- 
 
 ^P.W.A., Terms and Conditions (September 15, 1937), p. 7. 
 m Cf. P.W.A. Press Releases Nos. 527 and 921. 
 62 Circular No. 1, of. cit., p. 9. 
 C3 H. L. Ickes, Back to Work (1935), p. 25. 
 
 "Administrative Order No. 26 (May 28, 1935) and National Emergency Council Press 
 Release No. 2-10 (May 24, 1935); Administrative Orders Nos. 40 (June 8, 1935) and 42 
 (June 12, 1935). See also P.W.A. Press Release No. 1427. 
 
 ''Quoted from the advance, mimeographed copy of an address before the United States 
 Conference of Mayors (November 17, 1936). Similar statements may be found in other addresses 
 made by the administrator. 
 
FINANCES AND ALLOTMENTS 
 
 95 
 
 zation period was fixed at fifty years. 66 Special arrangements have also 
 been made in individual cases. Thus, an amortization period of thirty 
 years on fireproof and twenty-five years on non-fireproof housing projects 
 was first announced, but later an amortization period of thirty-five years 
 was allowed for fireproof projects which also involved slum clearance. 67 
 These provisions applied only to limited-dividend projects. Railroad loans 
 were made for a period of from ten to fifty years, with the former most 
 common. Applicants were generally given the option of issuing bonds for 
 the entire cost of the project or for such amount less any grant which 
 was authorized. If the first alternative was selected, and state law per- 
 mitted the postponement of principal payments, the surplus over the net 
 cost to the applicant could be used to meet debt service requirements 
 during the first four or five years of the loan. 68 Serial bonds rather than 
 the establishment of a sinking fund were favored by the establishment. 
 
 It was frequently deemed necessary to emphasize the fact that the 
 repayment of all loans was expected. Some public bodies apparently 
 believed that Congress would later waive the obligation to the govern- 
 ment, and this belief was encouraged in certain quarters. 69 There has, 
 however, been no serious movement seeking the conversion of P.W.A. 
 loans into outright grants. 
 
 Financial Considerations. — The Public Works Administration has 
 seen some necessity for guarding against a too liberal policy of extending 
 federal aid. Particularly in the case of loans, public bodies already bur- 
 dened with an excessive debt have been at a disadvantage in applying 
 for allotments. This has been due to the desire to obtain adequate 
 security for all loans. It is doubtful, however, whether the policy of 
 denying aid to debt-burdened public bodies was carried to an extreme. 
 While intrinsically sound security was generally insisted upon, it was 
 recognized that improved business conditions would normally cause an 
 increase in the value of most securities offered. 70 Thus, the bonds of the 
 Sanitary District of Chicago were purchased at par although then selling 
 at less than seventy cents on the dollar. 71 While no estimate has been 
 made of probable losses, defaults have not been very large, and the ul- 
 timate losses are expected to be small. 72 This may be attributed to the 
 careful analysis of each application for a loan. If a public body had 
 defaulted on its bonds, had not kept within legal debt limits, was far 
 
 66 Cireular No. i, op. cit., p. 9. 
 
 m Ibid., p. 19, and P.W.A. Press Releases Nos. 151 and 154 (both dated September 25, 1933). 
 ''Circular No. 1, op. cit., p. 13, and Administrative Order No. 26 (May 28, 1935). 
 ^P.W.A. Press Release No. 285. 
 
 70 Cf. A. D. Gayer, Public Works in Prosperity and Depression (1935), pp. 109, 120 ff., and 
 P.W.A. Press Release No. 1687 (October 28, 1935). Dr. Gayer states that bonds having a 
 better than even chance of being repaid were deemed to be adequate security, while, if the 
 chances of repayment were only even, the amount of employment and the purchases of materials 
 involved were the decisive factors. 
 
 "P.W.A. Press Release No. 3101 (February 17, 1937). 
 
 ,2 Cf. ibid., No. 3096 (February 8, 1937). 
 
9 6 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 behind in its tax collections, or was at best in a doubtful position with 
 respect to repayment of the loan, the policy was to deny the application. 73 
 
 In the case of loans to private corporations, somewhat elastic stand- 
 ards of security seem to have been applied. In general, collateral worth 
 at least fifty per cent in excess of the loan was sought, although the 
 anticipated revenues, if more than ample to liquidate the loan, constituted 
 the measure of security in some instances. In addition, an investment on 
 the part of the corporation was often demanded. 74 
 
 Legal Considerations. — The Public Works Administration has also 
 been generally insistent that all bonds tendered be valid from the legal 
 point of view. Prior to 1934, the approval of recognized bond counsel 
 was required to accompany all bonds, but this requirement was abandoned 
 because of certain incidental results which proved to be so objectionable 
 as to outweigh the fact that such opinions facilitated the re-sale of the 
 securities. 75 The waiver of the approval of recognized bond counsel did 
 not, however, constitute any noticeable relaxing of the requirements as 
 to the validity of any security offered. In addition to the careful in- 
 vestigation by the legal division, it is made a condition of the loan that the 
 governor of the state in which the applicant is located will agree, in 
 writing, to recommend, and to cooperate in the enactment of, any legisla- 
 tion deemed necessary to validate the bonds, or to remedy defects, 
 illegalities, or irregularities in the proceedings incident to the issuance of 
 the bonds. 76 It has been said that, with respect to loans, the Public Works 
 Administration acted strictly as a banker and that, insofar as the legality 
 of the bonds is concerned, it is more careful than is the usual bond 
 attorney acting in the interests of a private purchaser. 77 
 
 This strict policy has been justified as being intended by Congress 
 when, in the Recovery Act, it first authorized P.W.A. loans to non-federal 
 public bodies. That statute authorized such aid with "a view to increasing 
 employment quickly (while reasonably securing any loans made by the 
 United States)." 78 That parenthetical expression is the statutory standard 
 for the validity of P.W.A. loans ; subsequent acts of Congress contained 
 no standard at all. As has already been indicated, the clause requiring 
 reasonable security has been construed to mean security that is both 
 financially sound and legally binding. 
 
 Another section of the public works title of the National Recovery 
 
 "Based on advance copy of an address by H. L. Ickes over the National Broadcasting 
 Company's network, on the Recovery Series of Radio Talks by Members of the Cabinet (Janu- 
 ary 8, 1934). For the information required of applicants, see P.W.A. Press Release No. 1687 
 (October 28, 1935). 
 
 '■'Circular No. 1, op. cit., p. 16. 
 
 75 Cf. P.W.A. Press Releases Nos. 500 (February 12, 1934) and 667. 
 
 "This was apparently required for the first time during 1935. See, for example, P.W.A. 
 Form No. 188, Rules and Regulations, etc. (1935), p. 1. 
 
 "C. C. Ludwig, "Cities and the National Government under the New Deal," Am. Pol. Sci. 
 Rev., vol. 29 (1935), pp. 640, 641. 
 
 "48 Stat, at L., 19s, 200, section 203 (a). 
 
FINANCES AND ALLOTMENTS 
 
 97 
 
 Act might, however, have been used as the authority for a very lenient 
 
 policy with respect to the legal validity of bonds tendered by public bodies: 
 
 The President, in his discretion, and under such terms as he may prescribe, 
 may extend any of the benefits of this title to any State, county, or municipality 
 notwithstanding any constitutional or legal restriction or limitation on the right or 
 power of such State, county, or municipality to borrow money or incur 
 indebtedness." 
 
 The President was thus authorized, but not required, to disregard or 
 ignore legal inhibitions on the validity of the security offered. He, in turn, 
 delegated the same power, in practically identical words, to the adminis- 
 trator. 80 On its face, the above-quoted provision would seem to indicate 
 that it was the intent of Congress, and of the President, to brook no 
 interference with the public works program and completely to ignore 
 the restrictive provisions of state constitutions and laws. It is possible, 
 if one is so inclined, to throw an entirely different light on the statutory 
 provision by reading it in conjunction with another section of the Re- 
 covery Act, one that has been repeated in subsequent enactments, which 
 authorized the President 
 
 . ... to acquire by purchase, or by exercise of the power of eminent domain, any 
 real or personal property in connection with the construction of any such project, 
 and to sell any security acquired or any property so constructed or acquired or to 
 lease any such property with or without the privilege of purchase . . . . 81 
 
 This power was also delegated by the President to the administrator. 82 
 While disclaiming any intention of making loans in violation of the 
 provisions of state constitutions and laws, it was believed by the Public 
 Works Administration that it would be desirable to undertake the con- 
 struction of projects and then lease them to public bodies under a pur- 
 chase option. Thus, public bodies that had reached their debt limits 
 might yet be aided by the public works fund. In the first rules promul- 
 gated by the establishment, public bodies were authorized to make their 
 application under the leasing provisions of the act if they considered that 
 most convenient. Furthermore, it was indicated that it might be possible 
 to draw up a contract under which the project could be purchased on the 
 installment plan over a period of years. It was said, however, that the 
 extent to which the bonding capacity of the applicant must be exhausted 
 before a lease would be entered into would depend on the nature of the 
 project. 83 A Public Works Emergency Leasing Corporation was created 
 by the P.W.A., perhaps to carry out the leasing activities of the establish- 
 
 n Ibid., section 203 (d). Cf. 47 Stat, at L., 709, 710, section 1 (d): "Nothing in this 
 section shall be construed to authorize the [Reconstruction Finance] corporation to deny an 
 otherwise acceptable application under this section because of constitutional or other legal 
 inhibitions or because the State or Territory has borrowed to the full extent authorized by law 
 . . . . " Similar provisions may be found in later acts relating to the functions of that 
 corporation. 
 
 ^Executive Order No. 6252 (August 18, 1933). 
 
 81 48 Stat, at L., 195, 200, section 203. See also ibid., vol. 49, p. 115, section 5. 
 82 £xecutive Orders Nos. 6252 (August 18, 1933) and 7064 (June 7, 193s). 
 "Circular No. r, op. cit.. p. 14. 
 
98 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 ment, but it is not believed that public bodies were informed of the ex- 
 istence of the corporation. 84 
 
 Any unduly exaggerated hopes that leasing arrangements might 
 actually be entered into with some frequency were soon dispelled as a 
 new policy was formulated. 85 It was announced that, where a community 
 possessed borrowing power, it would be required to issue bonds, and 
 that no lease would be entered into, even if it were claimed that the 
 electorate would not authorize a bond issue. Where communities lacked 
 any borrowing power which could be used, a leasing arrangement might 
 be entered into through the instrumentality of a corporation formed or 
 to be formed ; but only where the municipality had the legal power to enter 
 into such leases, could convey the site of the project to the United States, 
 and where the lease would permit repayment of the loan with interest 
 during the useful life of the project. In the case of those states which 
 lacked the power to borrow funds, it was announced that a leasing 
 arrangement might be made if the state could convey the property to 
 the government and if the project, when constructed, would be adapted 
 to federal or other use in the event of repossession. Furthermore, public 
 bodies were warned that such leases were in effect installment purchases 
 and would, under the laws of most states, constitute a debt and be within 
 constitutional limitations on indebtedness. 
 
 It is probably this last-named factor that caused the Public Works 
 Administration, in practice, to avoid leasing arrangements almost entirely. 
 Again, the legal validity of all debt obligations seems to have been insisted 
 upon. The only leasing arrangement actually entered into during the 
 first two years of the public works program appears to have been in con- 
 nection with the construction of the Georgia state prison. 86 The Attorney 
 General did, however, indicate that, if desired, leasing arrangements 
 under the Recovery Act could be entered into freely: 
 
 The National Industrial Recovery Act expressly authorizes the acquisition of 
 real and personal property, and the leasing of such property, in connection with 
 public works projects. The power to make such leases is not limited in any manner, 
 and the terms thereof are left within the discretion of the President, acting 
 through the Public Works Administrator or other agency .... the provision for 
 leasing properties acquired under the public works program is to be read, not as 
 contemplating a necessary profit for the Government, but in the light of the 
 declared purposes of the statute to rehabilitate industry and to increase 
 employment. 81 
 
 When the Public Works Administration somewhat relaxed its stand- 
 ards following the creation of the Works Progress Administration, several 
 
 84 See chap, iii, supra. 
 
 ^Based on a "Letter to State Engineers," signed by P. B. Fleming, executive officer of the 
 P.W.A. (December 20, 1933). The letter may be found in Commerce Clearing House, Inc., 
 Federal Trade Regulation Service (7th edition), paragraph pw 2700. 
 
 86 P.W.A. Press Release No. 242. 
 
 w 37 Op. Atty. Gen., 465 (March 19, 1934)- 
 
FINANCES AND ALLOTMENTS 
 
 99 
 
 types of security previously rejected became acceptable. These included 
 loans to Kentucky school districts payable from school building leases, 
 running for only one year but subject to renewal ; and loans to Indiana 
 municipalities whose tax levies were already in excess of the fifteen-mill 
 limitation. 88 The comparatively few loans made since that date would, 
 however, indicate that loans of doubtful legal validity were few in 
 number. 
 
 The P. IV. A. and State Legislation. — The provisions of state con- 
 stitutions and statutes constituted one of the greatest obstacles to this 
 experiment in intergovernmental cooperation. 89 This was particularly 
 true of limitations on public bodies as to the purposes for which funds 
 might be borrowed or expended and upon the total indebtedness which 
 might be outstanding at any time. There were also many procedural re- 
 strictions that hampered public bodies in obtaining and making use of 
 allotments with the speed that emergency conditions seemed to require. 
 Some of these impediments had a direct effect only on those agencies 
 seeking loans, but others also affected those agencies seeking only grants ; 
 since, in any case, some legal authority was requisite at least for the 
 expenditure of the public body's own share of the cost of the project. 
 The P.W.A. has made some allotments under conditions of doubtful 
 legality, but, in general, it seeks the enactment of validating legislation, 
 or of permissive statutes in advance of the actual obligation of the 
 allotment. 
 
 The efforts of the establishment to secure the enactment of such 
 laws constitute an interesting chapter in the history of the works pro- 
 gram. In addition to the gubernatorial letter, mentioned above, required 
 in connection with loans, the establishment has always been ready to aid 
 in the drafting of legislation which would expedite and facilitate the 
 making of allotments to non-federal public bodies. Late in 1934, the 
 President sent a letter to the governors of most, if not quite all, the 
 states, urging them to make use of this federal bill-drafting service. The 
 chief development seems to have been a great increase in revenue financ- 
 ing of public works ; that is, the creation of special districts to operate 
 the projects or of special non-tax funds from which to pay the costs. 
 Political scientists may regret the resulting increase in the number of 
 governmental units when the first alternative is used, but the device of 
 special districts or authorities has proved to be a useful one. Such 
 districts generally have their own debt limitations, apart from those 
 of other governmental units whose boundaries may overlap or coincide 
 
 88 P.W.A. Press Release No. 1687 (October 28, 1935). It is not clear whether these loans 
 are of doubtful legal or of doubtful financial soundness. See also P. M. Benton, "Public 
 Bodies and the P.W.A.," Investment Banking, vol. 6 (1935-1936), p. 53. 
 
 89 Cf. H. L. Ickes, "A Statement to the American Legislators," State Government, vol. 6, 
 no. 12 (December, 1933), p. 3. 
 
IOO 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 with those of the special district. If a special fund replenished only 
 from the revenues of the project is created, that, too, may present a 
 means of avoiding restrictive enactments, since obligations payable solely 
 from the revenues of a project are not generally construed to be within 
 constitutional and statutory inhibitions on indebtedness. This situation 
 results from the fact that neither the general credit of the community nor 
 its revenues are pledged to the support of the enterprise. Under either 
 alternative, public support for the necessary expenditures can be solicited, 
 and probably obtained, on assurances that only those making use of the 
 new facilities will be required to pay the costs, and that no general tax 
 levy will be necessary. 
 
 While this seems to have been the major development, the process 
 of federal sponsorship of state legislation has many other ramifications. 
 It is easy enough to see in such action an attempt by the government to 
 force its schemes upon the state legislatures through a manipulation of 
 the federal purse strings. On the other hand, such action may be con- 
 sidered necessary and justified as a means of promoting the national 
 welfare in the absence of any direct power of the central government over 
 local governments, a feature of our federal system. Over five hundred 
 separate bills were drafted by the middle of 1935 and the response of 
 the state governors was, in most cases, favorable. 90 Model statutes have 
 not generally been drafted, since varying conditions in different states 
 require different solutions. An analysis of the extent to which federal 
 sponsorship of state legislation has been practiced, and of the degree of 
 success attending such efforts, seems unnecessary in this study in view of 
 the fact that the matter has already received extensive treatment by 
 other writers. 91 It may be indicated, however, that the major problem 
 is not any failure of state and local governments to cooperate in securing 
 the necessary legislation, but the difficulties inherent in revising con- 
 stitutional and statutory provisions and judicial decisions. The law 
 governing the financing of public works by governmental bodies had 
 been formulated during an era when the greatest need was for restrictions 
 upon wasteful and unwarranted expenditures ; that law was now sub- 
 jected to revision on the theory that it is a matter of considerable im- 
 portance that public bodies be in a position to undertake the expeditious 
 construction of such public works as are deemed desirable. This made 
 
 M P.W.A. Press Release No. 1322. The bills covered a wide variety of subjects, including: 
 (1) the simplification of legal procedures, (2) the conferring of additional powers on public 
 bodies, (3) the revision of existing revenue-bond acts, (4I the validation of various proceedings, 
 and (5) proposals to facilitate slum clearance, low-cost housing, and rural electrification. 
 
 91 This statement has particular reference to the many articles written by E. H. Foley, Jr., 
 at one time genera! counsel and director of the P.W.A. legal division. Special attention may 
 be called to his "Legal Problems Affecting the Non-Federal Phases of the Public Works Pro- 
 gram" and "PWA and Revenue Financing of Public Enterprises." Both may be found in the 
 Summary of Proceedings of the First Annual Meeting, Section of Municipal Law of the Ameri- 
 can Bar Association (1935). 
 
FINANCES AND ALLOTMENTS 
 
 IOI 
 
 necessary the revision of both procedural and substantive law controlling 
 the powers of state and local authorities, something that could not be 
 accomplished without delay. 
 
 The $400,000,000 Highway Fund 
 
 In addition to providing for other allotments, the Recovery Act 
 authorized the President to apportion among the several states, the 
 District of Columbia, and the territory of Hawaii a sum of not less 
 than $400,000,000 to be used for highway purposes. 92 This was an 
 outright grant, intended to supplement regular federal-aid appropriations 
 then approximating $125,000,000 annually. 93 The statute provided for 
 the expenditure of the fund in accordance with the Federal Highway 
 Act of 1921, as amended and supplemented by subsequent legislation, 
 except as provided in the Recovery Act itself. The President directed 
 the P.W.A. to make the allotment, and provided that the actual distri- 
 bution was to be subject to the approval of the Special Board for Public 
 Works. 94 It is difficult to see any reason for this proviso, since the 
 effect of the statute was to require the allotments to be made through 
 the bureau of public roads of the Department of Agriculture. There is 
 no evidence that any useful purpose was served by requiring the board's 
 approval, nor that the board interfered with the administration of the 
 fund. The Special Board for Public Works confined itself largely to 
 attempts to expedite actual construction, doing this by correspondence 
 with the various state highway departments and by threats to revoke 
 allotments, although it seems clear that no power to withdraw funds 
 really existed. 95 In short, the P.W.A. played a minor role with respect 
 to these undertakings, and the approval of applications, the promulgation 
 of policies, and the supervision of construction were almost entirely in the 
 hands of the bureau of public roads. 
 
 Apportionment. — The fund was distributed by the Secretary of 
 Agriculture in accordance with the provisions of the Recovery Act. 
 After deducting six million dollars for administrative expenses, he appor- 
 tioned one-eighth of the fund among the several states according to 
 population and the remaining seven-eighths in accordance with past 
 practice, that is, one-third according to population, area, and rural de- 
 livery and star routes, respectively. Expressed in other terms, the 
 Recovery Act provided for a distribution in the following proportions: 
 
 w 48 Stat, at L., 195, 200, section 204. $400,000,000 was apparently believed to be the sum 
 that could be expended by the states within a year, but only about one-third was actually so 
 spent. Cf. Hearings before the Senate Committee on Appropriations on H. J. Res. 117, 
 Emergency Relief Appropriation, 74th Congress, 1st Session, p. 18. 
 
 m Congressional Record, vol. 77, p. 4210 (May 25, 1933). 
 
 ^Executive Order No. 6174 (June 16, 1933). 
 
 *Cf. P.W.A. Press Release No. 165 and section 204 (b) of the statute. 
 
102 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 ten twenty- fourths according to population, and seven twenty- fourths 
 each according to area and rural mail routes. The added sum dis- 
 tributed according to population was about one-twelfth of the fund, 
 since under the regular practice only one-third, or eight twenty-fourths, 
 of the fund would have been apportioned according to that factor. 96 
 
 The new importance assigned to population was a subject of much 
 controversy in Congress. The original bill had proposed to distribute 
 three-fourths of the fund in accordance with past practice and one-fourth 
 according to population alone. 97 This provision was opposed by some 
 persons as still not giving adequate weight to the need for creating 
 employment in the populous states, and it was proposed that the entire 
 fund be distributed according to population as perhaps the best index 
 of existing unemployment. On the other hand, there were others who 
 opposed any deviation from the earlier practice, largely because of the 
 fear that the new ratio might become the established usage and that 
 a permanent and continuing loss would be sustained by the less popu- 
 lous states, even though their areas were such as to require large 
 expenditures on highways. 08 The ways and means committee of the 
 House of Representatives reported in favor of adhering to the pre- 
 vailing method of apportionment, and its report was adopted. How- 
 ever, as a result of behind-the-scene conferences, an amendment was 
 later offered by the committee from the floor of the chamber restoring 
 the three-fourths, one-fourth provision. Despite the fact that nine- 
 tenths of the members of the roads committee of the House were said 
 to have opposed this action, the amendment was adopted and the pro- 
 vision in the original bill restored. The Senate again eliminated the 
 new ratio, but a compromise was effected in conference providing, as 
 noticed above, that one-eighth of the fund should be distributed according 
 to population alone, and the remaining seven-eighths by giving equal 
 weight to population, area, and rural mail routes. 99 
 
 The fear that this new ratio might become a relatively fixed feature 
 of federal-aid policy has apparently been justified. It was embodied in 
 the Hayden-Cartwright Act of 1934 and in the Emergency Relief Ap- 
 propriation Act of 1935, and in a considerably modified form in other 
 acts. 100 In none of these later acts, however, has the Public Works 
 Administration been given jurisdiction over funds required to be appor- 
 tioned among the states according to some formula. A provision of the 
 Emergency Relief Appropriation Act of 1935 which seemed to require 
 
 96 C7.5". Code, title 23, section 21. 
 
 97 H.R. 5664, section 204 (b). Hearings before the House Committee on Ways and Means 
 on H.R. 5664, National Industrial Recovery, 73d Congress, 1st Session, p. 6. 
 ss Ibid., pp. 136, 240. 
 
 ^Congressional Record, vol. 77 (1933), pp. 4362, 4366, 5312, 5358. 
 ,00 48 Stat, at L., 993; ibid., vol. 49, p. 115, section 1. 
 
FINANCES AND ALLOTMENTS 
 
 IO3 
 
 that loans and grants for highways and grade crossings be apportioned 
 was soon clarified so as to preclude that assumption. 101 
 
 Matching. — From the inauguration of the practice of making grants- 
 in-aid to the states for highway purposes until the end of 1930, the fixed 
 practice had been to require the states to match the allotment by the 
 national government. 102 The National Industrial Recovery Act continued 
 the more recent emergency policy, and no part of the funds apportioned 
 to any state was required to be matched. Indeed, it was further provided 
 that the sum appropriated could be used in lieu of state funds to match 
 the available balances of previous federal subsidies. This provision 
 was inserted in the act because of the financial position of certain states, 
 particularly Alabama, Arkansas, North Carolina, and Tennessee. These 
 states had been unable to obtain a total of about fifteen million dollars 
 of federal-aid money because of their inability to raise equal amounts 
 from their own resources. 103 
 
 The effect of waiving the matching provision is not easy to determine. 
 In some cases, states were still unable to proceed with comprehensive 
 road programs since they had reduced their highway staffs at the onset 
 of the depression. To at least one of these states, Maryland, its allocation 
 under the Recovery Act did not seem large enough to justify the expense 
 of preparing the detailed plans which were required before any funds 
 would be available. Such problems were sometimes solved by additional 
 P.W.A. allotments under the loan and grant provisions of the public 
 works title. 104 In general, however, the waiver of the matching provision 
 seems to have allowed many states to divert to other purposes portions 
 of their motor-fuel excises and other taxes levied primarily for highway 
 purposes. 105 Accordingly, some subsequent statutes, while permitting 
 a waiver of the matching provision where justified, imposed penalties 
 upon states diverting the revenues from motor-fuel taxes and from motor- 
 vehicle licenses. 106 This would seem to be an effective means for prevent- 
 ing the states from wilfully placing themselves in a position where they 
 are unable to match the federal dollar, and then pleading impoverishment 
 in order to obtain a waiver of the matching provision. 
 
 Permissible Uses. — The most significant innovations effected by the 
 Recovery Act with respect to road grants were changes in the purposes 
 for which the apportioned funds might be used. 107 It was provided that 
 
 10i Ibid., vol. 49, pp. 1 109, 1 134. 
 ,02 See ibid., vol. 46, pp. 1030, 1031. 
 
 103 Hearings before the House Committee on Ways and Means, op. cit., p. 296. 
 ,04 P.W.A. Press Release No. 490. 
 
 ""Hearings before the Subcommittee of the House Committee on Appropriations in Charge 
 of Deficiency Appropriations, Additional Appropriations for Emergency Purposes, 73d Congress, 
 2d Session, p. 263. 
 
 10e See 48 Stat, at L., 993, 995, and ibid., vol. 49, p. 15 19. 
 
 107 On the subject generally, see P. V. Betters, et al., Recent Federal-City Relations (1936), 
 pp. 63 ff. 
 
104 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 existing provisions greatly limiting the expenditure of federal-aid funds 
 within the corporate limits of municipalities were not to apply to allot- 
 ments under the Recovery Act, and these discriminations against incor- 
 porated places were later removed from the permanent federal highway 
 statute. In addition, municipalities benefited from still other provisions 
 of the Recovery Act and the rules issued thereunder. This was due to 
 the fact that the statute permitted the use of the fund for emergency 
 construction on the federal-aid highway system, including work on 
 extensions thereof into and through municipalities as well as on secondary 
 or feeder roads. 
 
 The possibility of discrimination against municipalities was lessened 
 by the issuance of regulations supplementing the Recovery Act, and 
 assigning the fund not only among the states but also among the various 
 categories of highways. 108 It was provided that not more than fifty per 
 cent of any apportionment was to be applied to projects on the federal- 
 aid highway system outside of municipalities ; not less than twenty-five 
 per cent on secondary or feeder roads, until provision had been made for 
 the satisfactory completion of at least ninety per cent of the initial 
 limited highway system in the state ; and not less than twenty-five per 
 cent on projects for the extension of the federal-aid highway system 
 into any through municipalities. This last provision was, however, some- 
 what qualified to allow modifications when needed improvements or 
 extensions into and through municipalities could be made at a lesser 
 expenditure, or where local authorities were unable or unwilling to 
 obtain the necessary rights-of-way. Much the same policy of earmarking 
 some definite portion of highway grants for work within municipalities 
 appears to have been followed under subsequent appropriations over 
 which the Public Works Administration has had no control. 109 
 
 Other provisions of the regulations resulted in road projects being 
 undertaken in an average of eighty-six per cent of the counties of each 
 state. 110 This was due to a requirement that at least one project be 
 located in each of at least seventy-five per cent of the counties of the 
 state, except where needed and suitable projects could not be found in 
 that number of counties or where the number in which a need for em- 
 ployment existed constituted a smaller percentage of the total. 111 
 
 The procedure in obtaining funds was such that each state was 
 required to submit a preliminary statement of the w r ork to be done. 
 
 108 For the certificate of apportionment and the regulations see Prentice-Hall, Inc., op. cit., 
 paragraph 28,819 ff. (1st ed.). The certificate carried a notation indicating that the approval 
 of the Special Board for Public Works had been obtained. 
 
 1M Betters, op. cit., p. 64. 
 
 n °Ickes, op. cit., p. 84. 
 
 m The Recovery Act itself amended existing highway acts by allowing the expenditure of 
 federal-aid funds for publicly-owned toll bridges or approaches thereto, if operated by a state 
 highway department. When the costs had been recovered, the bridges were to be operated free 
 of tolls. 
 
FINANCES AND ALLOTMENTS 
 
 Following the approval of the preliminary statement, detailed programs 
 were prepared which indicated the proposed termini of the roads, the 
 character of the work, the estimated costs, and the amount of federal 
 funds required. The following categories of projects were accorded a 
 priority of treatment: (i) closing gaps in the federal-aid highway system; 
 (2) landscaping of parkways and roadsides on a reasonably extensive 
 mileage; (3) correlating and supplementing existing transportation fa- 
 cilities and providing service to freight-receiving stations, airports, and 
 emergency landing fields ; (4) reconstruction designed to reduce main- 
 tenance costs and to decrease future expenditures for such purposes ; 
 (5) eliminating hazards to highway traffic and constructing facilities to 
 improve the accessibility and the free flow of traffic ; and (6) undertakings 
 involving a large number of small projects designed to employ a maximum 
 of human labor. 
 
Chapter V 
 
 PROJECT AND CONSTRUCTION POLICIES 
 
 In the present chapter it is proposed to notice in some detail the 
 policies adhered to by the Public Works Administration with respect 
 to those projects in connection with which it has had a considerable 
 measure of discretion. These include undertakings for which loans and 
 grants are made to non-federal bodies, and the low-cost housing projects 
 financed and sponsored by the establishment itself ; but exclude road 
 construction financed from the $400,000,000 fund and the work carried on 
 by other federal agencies with the assistance of funds from the P.W.A. 
 However, many of the construction policies of the establishment applied 
 to all undertakings financed by the P.W.A. 1 
 
 Project Preferences 
 
 The undertakings which have been included within the construction 
 program of the P.W.A. are so varied in character as to embrace almost 
 every conceivable type of public works project. The statutes and execu- 
 tive orders defining the items eligible for financing by the establishment 
 have already been noticed, but they serve only to emphasize the all- 
 inclusive character of the purposes for which funds have been available. 2 
 The major purpose for which funds are not available is the purchase of 
 land independently of any scheme for increasing employment. 3 In general, 
 the chief limitation has been the requirement that the facilities con- 
 structed be either publicly-owned or otherwise devoted to public use. 
 New construction, rather than repairs or renovations, has been generally 
 favored in making allotments, but any project which has as its aim 
 the relieving of unemployment through public works construction is 
 probably technically qualified for aid from the P.W.A., assuming that 
 the sponsor of the undertaking is also so qualified. This, at least, was the 
 situation when a halt was called to further allotments. 
 
 The eligible applicants for P.W.A. funds under the Recovery Act 
 included private corporations who proposed to build self -liquidating pro- 
 
 'The projects here excluded receive some attention in the preceding chapter. Highway 
 projects financed from the $400,000,000 fund were constructed under regulations laid down by 
 the bureau of public roads, subject to some rather indefinite powers of policy determination 
 exercised by the P.W.A. The wage regulations of the P.W.A. did not apply to such road 
 projects, nor to federal projects where the work was not done under contract. However, federal 
 employees engaged on construction projects financed under the N.I.R.A. were subject to the 
 limitations placed on employment, such as the thirty-hour week; 13 Comp. Gen., 35, No. A-50072 
 (August 2, 1933). 
 
 2 Chap. i, supra. 
 
 8 37 Op. Atty. Gen., 292 (October 5, 1933), 301 (October 21, 1933). See also ibid., p. 415 
 (January 26, 1934), holding that it would be unwise to undertake the maintenance of national 
 forest highways under the N.I.R.A. 
 
 IO6 
 
PROJECT AND CONSTRUCTION POLICIES 
 
 jects of various types. 4 It was soon announced that allotments of this 
 character would not be made where the proposed project would compete 
 injuriously with adequate existing facilities, or if the application were 
 unaccompanied by any certificate of convenience and necessity or other 
 permit required by law. 5 Actually, very few private corporations other 
 than railroads received allotments. As early as February, 1934, allotments 
 were limited to public bodies and to railroads subject to control by the 
 Interstate Commerce Commission, and loans to railroads were later 
 discontinued. 6 The disinclination of the P.W.A. to aid private bodies 
 was apparently due to the predominance of the profit motive in applica- 
 tions from such sources. 
 
 A statement of policy issued at an early date indicated that certain 
 preferences would be applied in the consideration of applications. 7 It 
 was said that all proposed work must be socially desirable in the sense 
 of contributing something of value to the equipment of the community, 
 and not a mere makeshift to provide employment. For applications 
 which survived this test, the following priorities were indicated: (1) 
 projects which could be begun at once and completed with reasonable 
 speed, (2) projects located in or near a center of unemployment, and 
 
 (3) projects which were integrated with other undertakings into a 
 significant plan. 8 A further preference may be found in the fact that 
 applications involving only grants have been favored. 9 
 
 Somewhat different general preferences were adopted under the 
 Emergency Relief Appropriation Act of 1935 ; tests were applied in 
 conformity with rules established by the President with respect to 
 the general work-relief program. 10 It was now required that: (1) all 
 projects be useful, (2) a considerable proportion of the costs should be 
 in payment of labor, 11 (3) projects promising an ultimate return to the 
 treasury of a considerable proportion of the costs should be sought, 
 
 (4) any funds allotted were to be expended promptly, (5) projects were 
 to be of a character such as to give employment to those on the relief 
 rolls, and (6) allotments were to be made to localities in relation to 
 the number of workers on relief. Except for the first, second, and fourth 
 rules, it does not appear that these preferences were actually stressed by 
 the P.W.A. , although it need not be said that they were entirely ignored. 
 
 'Some loans were also made to finance the repair or reconstruction of buildings damaged 
 by earthquakes during 1933; a power exercised by the P.W.A. as part of the functions trans- 
 ferred from the Reconstruction Finance Corporation. See 48 Stat, at L., 20. 
 
 "P.W.A., Circular No 1, The Purposes, Policies, Functioning and Organisation of the 
 Emernrncv Administration (1033), P 16. 
 
 "P.W.A. Press Release No. 637. 
 
 'Department of the Interior, Memorandum for the Press, Statement of Policy of National 
 Public Works Board (June 22. 1933'). 
 
 8 See also P.W.A. Press Release No. 239. 
 "Ibid., No. 1930. 
 
 '"Administrative Order No. 26 (May 28, 1935). 
 
 "On this point, see American City, vol. 50, no. 7 (July, 1935), p. 5. 
 
io8 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 Since few loans were made, there could be no substantial sums which 
 would ultimately be returned to the treasury, and the very nature of most 
 projects is such that skilled labor is required, a type of labor that 
 rapidly disappeared from the relief rolls as economic conditions im- 
 proved. Only in a general way, moreover, has the P.W.A. attempted 
 to allocate funds on the basis of relief needs. 
 
 A more significant indication of the project preferences adhered to 
 by the P.W.A. may be obtained from an examination of the types of pro- 
 
 Table VI. — P.W.A. Housing and Non-Federal Projects* 
 
 Type of Project 
 
 Number of 
 Projects 
 
 Allotment 
 
 Estimated Cost 
 
 Educational buildings 
 
 Hospitals and institutions for medi- 
 cal treatment 
 
 Other public buildings 
 
 Housing, limited-dividend 
 
 Housing, federal low-cost 
 
 Engineering structures 
 
 Flood control, water power, and 
 reclamation 
 
 Power, excluding water power 
 
 Sewer systems 
 
 Streets and highways 
 
 Railroads 
 
 Water systems 
 
 All others 
 
 Total 
 
 3,681 
 
 36i 
 701 
 7 
 5i 
 269 
 
 92 
 149 
 1,125 
 862 
 32 
 1,682 
 380 
 
 % 295,966,818 
 
 72,373,686 
 61,505,124 
 10,971 ,600 
 136,101,550 
 201,185,680 
 
 88,231,079 
 
 34,487,416 
 235-921,303 
 
 98,735,171 
 201 ,089,500 
 112,155,890 
 
 65,389,836 
 
 ? 551,520,483 
 
 156,140,573 
 136,725,792 
 12,846,341 
 136,101,550 
 300,028,895 
 
 135,915,270 
 51,925,684 
 352,174,957 
 204,267,836 
 201 ,089,500 
 185,256,644 
 109,139,920 
 
 9,392 
 
 $1,614,114,653 
 
 $2, 533, 133,445 
 
 *Source: Hearings before the Subcommittee of the House Committee on Appropriations, 
 Extension of the Public Works Administration, 75th Congress, 1st Session, p. 16. Data as of 
 January 30, 1937. 
 
 jects that have received allotments (see Table VI). 12 Waterworks and 
 sewerage systems, highways, bridges, tunnels, and electric power fa- 
 cilities have all been regarded as undertakings likely to stimulate further 
 employment, and so have been favored. Such projects have also met 
 with approval because they lend themselves to the use of unskilled 
 labor. Public buildings, particularly educational structures, have been 
 given a preferred status wherever a need for them existed. Housing 
 projects, noticed later in this chapter, constitute a significant aspect of 
 the work financed by the P.W.A., being the only type of undertaking 
 which the establishment has itself sponsored. This housing program 
 was apparently limited to a demonstrational basis only because of the 
 wishes of the President ; Administrator Ickes, if left to his own desires, 
 
 12 See also: Hearing before the Subcommittee of the House Committee on Appropriations in 
 Charge of Deficiency Appropriations, Additional Appropriations for Emergency Purposes, 73d 
 Congress, 2d Session, p. 213; and Circular No. 1, op. n't., p. 12. 
 
PROJECT AND CONSTRUCTION POLICIES IO9 
 
 would probably have undertaken housing construction on a much more 
 elaborate scale. 13 
 
 The data shown in Table VI are those that were available to Congress 
 when it was considering a bill, later enacted, to extend the life of the 
 P.W.A. until 1939. No criticism was offered with respect to the types of 
 projects favored, and so it may perhaps be assumed that the distribution 
 met with the approval of the national legislature. At any rate, in author- 
 izing the approval of certain classes of projects as part of a liquidating 
 program, Congress enumerated only one specific type of undertaking, 
 school projects — a type that had long met with favor from the establish- 
 ment. The other classes of projects named in the statute were those in 
 connection with which the applicant had already incurred substantial 
 obligations or for which funds had already been tentatively earmarked 
 by the administrator. 14 
 
 Power Projects 
 
 The power projects financed by the P.W.A. may be singled out for 
 special attention since they reflect governmental policies and problems 
 that are not confined to any one agency of the government. Many of 
 the projects are expected to be operated in conjunction with power 
 developments undertaken by the Tennessee Valley Authority, with 
 allotments from the P.W.A. furnishing public bodies with the facilities 
 with which to transmit to their patrons current and energy purchased 
 from the T.V.A. In addition, many communities not served by the T.V.A. 
 were also given allotments, largely for the development of steam gen- 
 erating plants. 15 
 
 The Public Works Administration's chief interest in power projects, 
 other than the desire to stimulate employment, appears to have been in the 
 rate-making aspects of the allotments. The policy enunciated was one 
 of limiting allotments to those communities in which the rates demanded 
 by private utilities were unduly high. Administrator Ickes suggested 
 as the test of the equity of prevailing rates "a reasonable return on a pru- 
 dent investment." 16 Public bodies applying for allotments for power proj- 
 ects were required, in addition to meeting the qualifications generally nec- 
 essary, to give assurances that the loan and grant would assure electricity 
 
 "The Emergency Relief Appropriation Act of 1935 (49 Stat, at L. 115I authorized the 
 use of as much as $450,000,000 for housing, but less than one-fourth of that sum was so 
 employed, apparently on instructions from the President. Some additional funds were obtained 
 from the Recovery Act appropriation. See also P.W.A. Press Release No. 1185 (January 19, 
 
 1935). 
 
 "50 Stat, at L., 357, section 20s. 
 
 15 P.W.A. Press Release No. 3121 (data as of February 1, 1937) indicates that the allot- 
 ments on the non-federal power program of the P.W.A. numbered 281 and totaled almost 
 $97,000,000 for projects with an estimated cost of about $129,500,000. These included distribu- 
 tion systems and hydroelectric, steam, and diesel generating plants. Construction on 65 projects 
 was retarded by litigation. 
 
 ie New York Times, December 21, 1934. 
 
I IO 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 to their communities at rates substantially lower than those otherwise 
 obtainable. In some cases where P.W.A. allotments were made, the 
 privately-owned utilities serving the area reduced their rates in an 
 attempt to avoid competition. Such reductions were acclaimed by the 
 establishment "as showing progress toward one of the aims of this 
 phase of the public works program." 17 It was announced, however, 
 that local bodies would not be deprived of the possibility of P.W.A. 
 support for their projects until such time as there was some assurance 
 that the rate reduction by the existing utility would be in effect on a 
 reasonably permanent basis. Obviously, P.W.A. funds were used for the 
 purpose of forcing a reduction in utility charges, a goal that state 
 regulatory commissions have sometimes been unable to achieve. 
 
 It is in connection with these allotments to local bodies for power 
 projects, that the Public Works Administration has most frequently 
 encountered legal barriers. Existing privately-owned utilities have often 
 brought suits to enjoin the construction of projects financed by the 
 P.W.A. Naturally, this litigation has had its effect upon the policies 
 of the establishment, and now, contrary to the earlier practice, the P.W.A. 
 does not embody any provisions for rate control in its loan and grant 
 agreements. In most of the litigation involving power loans, the decisions 
 seem to have rested upon factors varying with each project, such as 
 whether state laws authorized the undertaking or whether the franchises 
 of existing utilities guaranteed them against competition. The privately- 
 owned utilities thus applied for relief either as local taxpayers seeking 
 to prevent an illegal expenditure of public funds or as property owners 
 attempting to prevent infringements upon their rights. In addition, 
 however, some of the litigants also attacked the authority of the P.W.A. 
 to finance even projects that were authorized under local laws, it being 
 generally claimed that: (i) the Constitution did not permit Congress 
 to appropriate national funds to finance local competitive enterprises, 
 since such projects were not designed to promote the general welfare; 
 (2) the authority to select particular projects for financing was part 
 of an illegal delegation of legislative power; (3) there had been various 
 unlawful departures from the statutory authorizations; and (4) that 
 the plaintiffs would be injured by the alleged illegal allotments. 18 
 
 Although these legal attacks were directed primarily against the 
 recipients of allotments, and against the P.W.A. only incidentally, the 
 establishment soon became the focus of most of the litigation, so that 
 sixty-one power projects financed by the P.W.A. were under injunction 
 
 "P.W.A. Press Release No. 989. 
 
 "See P.W.A. Press Release No. 1507 (July 20, 1935). 
 
PROJECT AND CONSTRUCTION POLICIES III 
 
 at the time the Supreme Court finally settled some of the issues involved. 19 
 In a decision concurred in by all of the justices, the court upheld the 
 authority of the P.W.A. to make allotments for power projects to mu- 
 nicipalities possessing the authority under local law to construct and 
 operate competing plants and distribution systems, provided that the 
 allotment was not motivated by a desire to injure the existing utilities. 
 In reaching this conclusion, the court pointed out that the interest of a 
 taxpayer in the finances of the government is not alone sufficient to 
 enable him to maintain a suit to enjoin expenditures claimed to be un- 
 lawful, and went on to hold that: 
 
 The only pertinent inquiry, then, is what enforcible legal right of petitioner 
 do the alleged wrongful agreements invade or threaten? If conspiracy or fraud 
 or malice or coercion were involved a different case would be presented, but in 
 their absence, plainly enough, the mere consummation of the loans and grants will 
 not constitute an actionable wrong. Nor will the subsequent application by the 
 municipalities of the moneys derived therefrom give rise to an actionable wrong, 
 since such application, being lawful, will invade no legal right of petitioner . . . . 
 
 This being the case, the court did not find it necessary to decide whether 
 the administrator possessed the constitutional authority to make the 
 allotments in question. The decision rested entirely on the ruling that 
 the private utility had no actionable claim, and so was without proper 
 standing to maintain the suit. 
 
 The real constitutional issue would seem to be the interpretation of 
 the general welfare clause of the Federal Constitution. The courts may 
 ultimately decide either that the national government may expend money 
 for local power projects when such enterprises constitute but a small 
 part of a much larger program of spending designed to promote the 
 general welfare ; or that the authority to make such expenditures is not 
 granted by the general welfare clause. If the second conclusion is 
 reached, it may result either from a belief that the power to appropriate 
 money for the general welfare does not include the authority to finance 
 schemes for relieving general unemployment, or from a belief that the 
 power to expend funds for the general welfare does not include the 
 authority to finance projects of a purely local character. 
 
 Construction Conditions 
 
 The Public Works Administration has from time to time formulated 
 regulations governing the construction of projects which it finances. 20 
 
 "References to most of the cases may be found in U.S. Code Annotated, title 40, section 
 401 ff. The Supreme Court case here quoted is that of the Alabama Power Company v. Ickes, 
 et al., 82 L. ed. Advance Opinions, p. 263 (January 3, 1938). See also F. X. Welch. "The 
 Validity of Federal Loans and Grants to Municipalities for Construction of Power Plants," 
 Georgetown Law Jour., vol. 25 (1036-1037), p. 607. Other legal questions are noticed in the 
 section on housing, infra. 
 
 20 The regulations discussed in this section on construction conditions are to be found in a 
 series of pamphlets issued by the P.W.A. The rules formulated during 1933 are to be found in 
 Circular No. 1, cited above. The regulations promulgated during 1935 appear in: Rules and 
 
1 12 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 These rules were originally promulgated in the early summer of 1933, 
 and have since been amended and supplemented, both by the P.W.A. 
 itself and by Presidential order. The rules were completely revised 
 during 1935, following the passage of the Emergency Relief Appropria- 
 tion Act of that year. These construction conditions are of primary 
 importance, since the Congressional enactments simply laid down the 
 broad outlines to be followed. It is only in the regulations promulgated 
 pursuant to the legislative authorization, that the details of national policy 
 are revealed. Many of the rules governing construction relate only to 
 technical engineering matters, but those concerning the conditions under 
 which construction may be carried on, and the labor and materials 
 policies to be enforced, are of a more general significance. It should 
 be pointed out, however, that the Public Works Administration has 
 not always been able, on its own initiative, to prescribe all the procedures 
 and regulations to be followed ; Presidential orders, federal statutes, 
 court decisions, and rulings of the Comptroller General and the Attorney 
 General have all imposed limitations upon the establishment's freedom 
 of action. Public bodies receiving funds from the P.W.A. have similarly 
 been limited by provisions of state constitutions, statutes, charters, ord- 
 inances, and court decisions. 
 
 General Regulations. — Following the making of each non-federal 
 allotment, a contract is entered into between the Public Works Adminis- 
 tration and the recipient of its funds. In all such agreements, there are 
 embodied the terms and conditions under which the project must be 
 constructed. Compliance with these provisions is made a contractual 
 obligation, and, in addition, the body receiving the allotment agrees to 
 impose the same terms and conditions upon all contractors it may retain 
 to do the actual work. The establishment retains the right to inspect 
 construction to the extent necessary to assure the carrying out of the 
 terms of the loan or grant offer. In general, it is provided that all 
 reasonable requirements which the P.W.A. may make towards the 
 effectuation of the matters covered in the construction regulations shall 
 be observed. Access to all pay rolls, records of personnel, invoices of 
 materials, and other data relating to construction must be afforded to 
 the agents of the establishment charged with supervisory duties, regard- 
 less of whether the records are those of the body obtaining the allotment 
 or of its contractors. 21 Reports on the progress of construction are also 
 
 Regulations Relating to Applicants and Projects Under Title II of the National Industrial 
 Recovery Act, Applicable to Grants (PWA Form No. 200) ; ibid., Applicable to Loans and Grants 
 (PWA Form No. 188) ; Rules and Regulations Relating to Applicants and Projects Under the 
 Emergency Relief Appropriation Act of 1935, Applicable to Grants (PWA Form No. 179); ibid., 
 Applicable to Loans and Grants (PWA Form No. 166). Later revisions have been published in 
 three pamphlets bearing the uniform title Terms and Conditions (PWA Forms Nos. 210 — original 
 dated July 1, 1936, amended form dated August 1, 1937 — and 230, dated September 15, 1937). 
 
 2, It is a criminal act to make any false or fraudulent statement or to use or cause to be 
 made any false account, claim, certificate, affidavit, or deposition relating to any matter within 
 the jurisdiction of any governmental department or agency; U.S. Code, title 18, section 80. The 
 several statutes authorizing the works program also cgntained penalty provisions; see 48 Stat, at 
 L., 195, 200, section 209, and ibid., vol. 49, p. 115, section 9. 
 
PROJECT AND CONSTRUCTION POLICIES 113 
 
 required, as are statistical summaries to such other federal agencies as 
 the Department of Labor and the Works Progress Administration. 
 
 Full compliance with all P.W.A. regulations is necessary to avoid 
 the possibility of a rescission of the allotment. The policing of construc- 
 tion by the P.W.A. is designed primarily to keep the national government 
 informed as to whether labor and materials have been supplied according 
 to specifications. In addition, the sponsor of the project is required to 
 maintain an adequate and competent inspection force of its own. 22 If 
 violations of the regulations by any contractor or subcontractor are 
 discovered, the sponsor may, subject to the approval of the P.W.A., 
 serve written notice of its intention to terminate the contract ; or may 
 be required to serve such notice by the establishment. Actual termination 
 of contracts and rescissions of allotments because of the breach of their 
 provisions have been infrequent. 23 
 
 It is normally insisted that all work be done under contract, pre- 
 sumably in the belief that force-account construction is likely to mean 
 the entrance of partisan politics into the selection of labor and the 
 supply of materials. Construction by day labor has been permitted in those 
 cases where a public body ordinarily does its work in that fashion, or 
 where it appeared that the work could be done more economically in 
 that manner. 24 The insistence upon contract work probably meets the 
 Congressional requirement, in force since 1935, that full advantage be 
 taken of the facilities of private enterprise wherever practicable. 25 Offi- 
 cials of the governing body may not also act as contractors. 
 
 All payments for the construction of the project must be made from 
 a separate fund set up in a banking institution which is a member of 
 the Federal Deposit Insurance Corporation. 26 The sponsor of the project 
 is enjoined to deposit in this construction account all grant payments, 
 the proceeds from bond sales (exclusive of accrued interest), and any 
 other monies necessary for the completion of the undertaking. Dis- 
 bursements may be made only for the purposes approved by the P.W.A. 
 A separate bond fund must similarly be maintained where a loan has been 
 made, with the assets to be used only for payments on the principal and 
 interest of the bonds issued. In this fund must be placed any balances 
 remaining in the construction account, as well as other sums earmarked for 
 
 22 Cf. Administrative Order No. 127 (March 4, 1936). The sanitary district of Chicago was 
 apparently quite lax in maintaining competent inspection and was finally forced by the P.W.A. 
 to reorganize its force. P.W.A. approval was required for the appointment of the district's 
 inspectors; H. L. Ickes, Back to Work (1935), p. 75. The establishment also insisted that the 
 district follow the recommendations of a government commission as to the general method of 
 sewage treatment. See P.W.A. Press Releases Nos. 548 and 677 (May 5, 1934). 
 
 "For one such case, see P.W.A. Press Release No. 1046. 
 
 24 Force-account construction seems to have been allowed chiefly in the case of sewer and 
 water projects. 
 
 25 49 Stat, at L., us. section 8. See also Executive Order No. 7083 (June 24, 1935). 
 26 A requirement that the bank also be a member of the Federal Reserve System was 
 enforced until late in 1936. 
 
114 THE PUBLIC WORKS ADMINISTRATION 
 
 debt and interest payments. These provisions are designed to simplify 
 the task of auditing the accounts kept in connection with construction, 
 as well as to assure the safekeeping of all funds. 27 
 
 Bids and Contracts. — On projects to be constructed under contract, 
 which constitute the bulk of P. W.A. undertakings, it is generally required 
 that every opportunity shall be given for open and competitive bidding. 
 Advertisements must be offered as soon as possible after the establish- 
 ment's approval of the proposed contract documents, repeated once a 
 week for two consecutive weeks, and the bids opened within a reasonable 
 period of time after the end of the fourteen day period. These require- 
 ments, it must be understood, are subject to variation with the approval 
 of the establishment and in order to comply with local laws, which fre- 
 quently contain detailed provisions governing the letting of public con- 
 tracts. Opportunities to bid on P. W.A. projects are not permittted to be 
 confined to local contractors. 
 
 Contracts are ordinarily awarded to the lowest responsible bidder as 
 soon as practicable after the opening of the bids, but not until the 
 P.W.A. field director has authorized the award. That officer is represent- 
 ed at all bid openings by an agent who sees to it that all proceedings 
 are regular and who secures tabulations of all bids submitted. Upon 
 the basis of these data and the previously approved contract documents, 
 the establishment is in a position to see that all of its regulations are 
 followed. In determining the lowest responsible bidder, the price bid 
 is a prime factor, but consideration is also given to such questions as 
 whether the bidder (i) maintains a permanent place of business, (2) has 
 adequate plant equipment to do the work adequately and expeditiously, 
 (3) is in a position to meet his financial obligations, and (4) has had 
 adequate technical experience. The Comptroller General has held, with 
 respect to federal projects, that the government is not required to accept 
 a low bid where the contractor has had no experience in connection 
 with similar work. 28 Presumably, local laws also allow public bodies 
 some discretion in determining the lowest responsible bidder. In the 
 selection of materials and equipment, the P.W.A. has often permitted 
 the award of contracts to responsible bidders other than the lowest, in the 
 interest of standardization and ultimate economy. 29 Bids have occasionally 
 
 "Projects may not be named without the consent of the P.W.A. nor after any living 
 person. Appropriate signs for all projects have also been required during construction. See 
 P.W.A. Press Release No. 533 and Administrative Orders Nos. 4s (June 11, 1035) and 154 
 (July 17, 1936). The last-named order rescinds all previous regulations in conflict therewith 
 and may be found in 1 Fed. Reg.. 084. 
 
 28 i4 Comp. Gen., 305, No. A-58io=; (October n, 1034). Cf. ibid., vol. 13, p. 274. No. 
 A-5471R (April 12, 1034), in which the Comptroller General seems to assert his right to become 
 the judge of the qualifications of bidders. 
 
 29 Where not in conflict with local law. On force-account work, and sometimes in other 
 instances, purchases of supplies and equipment amounting to less than $1,000 have been made 
 on the basis of written quotations, without advertising or sealed bids. 
 
PROJECT AND CONSTRUCTION POLICIES 
 
 115 
 
 been rejected as being too high, and new bids called for, perhaps on the 
 basis of revised specifications. 
 
 Where identical low bids are submitted for work of equal quality, 
 lots are likely to be drawn or the contract divided. The earlier practice, 
 however, was to search for some other determining factor such as 
 different transportation or delivery costs, with the contract to be awarded 
 to the firm having the highest costs. Such a practice is, however, of 
 doubtful legality. 30 Identical bids were most often encountered while the 
 national recovery codes were in effect, but such problems continue to be 
 present in some degree. 
 
 Compliance with the general provisions of applicable recovery codes 
 was required by the P.W.A. until after the code-making provisions of the 
 Recovery Act were held invalid by the Supreme Court. The deletion 
 of the code-compliance provisions from all contract documents was 
 then made retroactive. 31 Much the same policies were later followed 
 with respect to contracts calling for the purchase of bituminous coal 
 on P.W.A. federal housing projects. 32 The experience of the P.W.A. 
 with the codes governing the conduct of industry was probably the 
 same as that of other bodies engaged in financing construction. The 
 prices bid seem to have been materially higher as a result of the code 
 provisions. Many public bodies obtaining funds from the P.W.A. were 
 concerned about these added costs, which had the effect of reducing the 
 value of the grant obtained from the government. In normal circum- 
 stances, the existence of a depression, with high construction costs at 
 the same time, would have deterred them from undertaking public works. 
 To meet these and other problems, the President permitted prices as 
 much as fifteen per cent below those required by the codes of fair 
 competition to be quoted by contractors when submitting bids to furnish 
 goods or services to agencies of the United States, or to any state, 
 municipal, or other public authority. 33 This would seem to indicate that 
 governmental bodies were unwilling to abide by regulations demanded 
 of business generally. 
 
 A frequent difficulty in public construction has been the making 
 of extra or change orders after bids have been let. Such changes often 
 result in a material increase in construction costs, and it is not always 
 easy to determine whether the changes are legitimate or designed as a 
 political favor to some individual. Wherever such changes have appeared 
 
 "Cf. 13 Comp. Gen., 233, No. A-54083 (March 1, 1934) and ibid., vol. 16, p. 538, No. 
 81117 (November 28, 1936). 
 
 "Administrative Order No. 31 (Tune 1, 19351. A supplement to this order (July 2, 1935) 
 explained that the right of labor on P.W.A. projects to organize and to bargain collectively was 
 in accordance with the continuing policy of the establishment, and would continue to be 
 guaranteed in the construction regulations, but without reference to Title One of the Recovery Act. 
 
 ^Administrative Orders Nos. 137 (March 28, 1936) and 150 (June 1, 1936). 
 
 ''Executive Order No. 6767 (June 29, 1934). 
 
u6 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 justified, they have been approved by the P.W.A. ; by the field offices 
 if the cost is less than ten per cent of the amount of the contract, or by 
 the central office if more. Except in emergencies, the approval of the 
 establishment must be obtained prior to the making of any changes. 
 Any alterations constituting a substantial change in the contract also 
 require the consent of the surety underwriting the performance of the 
 work. 
 
 Appropriate assurances that contractors will begin construction 
 promptly, and will carry on the work to a satisfactory conclusion, have 
 been regularly required. The recipient of P.W.A. funds is directed to 
 require a performance bond equal in amount to one hundred per cent 
 of the contract price, as security for the faithful performance of the 
 contract and the payment of all persons performing labor or supplying 
 materials to the contractor. 34 Where local laws provide for a separate 
 bond for the protection of laborers and materialmen, such a bond is re- 
 quired in addition to the performance bond. Public liability and property 
 damage insurance is also required, unless the work is not sufficiently 
 hazardous to require such protection. Workmen's compensation in- 
 surance has also been insisted upon. Every contract, surety bond, or 
 other document guaranteeing the performance of work becomes effective 
 only with the approval of the Public Works Administration. These 
 regulations are also enforced by the P.W.A. in connection with its own 
 housing projects. 
 
 Selection of Labor. — The National Industrial Recovery Act laid down 
 certain policies which governed the selection of labor on P.W.A. projects 
 until the middle of 1935. 33 Since then, somewhat different labor policies 
 have prevailed, particularly on projects financed under the terms of the 
 Emergency Relief Appropriation Act of 1935. The Recovery Act forbade 
 the use of convict labor, and required that in the employment of labor 
 preference be given to ex-service men with dependents, and then to 
 citizens of the United States and to aliens who had declared their intention 
 of becoming citizens ; no discrimination existed as between these two 
 groups. Excepting veterans, bona fide residents of the political subdivision 
 or county in which the work was to be performed were first to be selected, 
 and then residents of the state, territory, or district in which the project 
 was located. It was provided, however, that these preferences would 
 apply only where such labor was available and qualified. These require- 
 ments did not, of course, constitute very severe limitations, nor were they 
 repeated in later acts, except that convict labor continues to be excluded, 
 
 a, There have also been detailed regulations governing the time within which sums due to 
 and from contractors must be paid. 
 
 33 48 Stat, at L., 19$, 200, section 206. 
 
PROJECT AND CONSTRUCTION POLICIES 
 
 II 7 
 
 and that aliens illegally within the United States may not be employed. 36 
 It should be noticed that the Recovery Act did not require that relief 
 labor or persons in need be given a preferred status, although there was 
 a provision that the maximum of human labor should be used in lieu of 
 machinery, wherever practicable and consistent with sound economy and 
 public advantage. 
 
 The early policy of the Public Works Administration with respect to 
 the selection of labor on projects financed under the Recovery Act has 
 been summarized as follows: 
 
 1. Opportunities for employment on projects authorized under its administra- 
 tion shall be equitably distributed among qualified workers who are unemployed — 
 not among those who merely wish to change one good job for another; 
 
 2. These work opportunities shall be distributed, geographically, as widely and 
 as equitably as may be practicable ; 
 
 3. Qualified workers who, under the law, are entitled to preference shall 
 secure such treatment; 
 
 4. The wasteful costs and personal disappointments, due to excessive migration 
 of labor in quest of work to the vicinities of projects, should be avoided; 
 
 5. Local labor required for such projects, and appropriately to be secured 
 through employment services, should so far as possible be selected from lists of 
 qualified workers submitted by local employment agencies designated by the United 
 States Employment Service. 37 
 
 In the actual administration of these policies three major questions arose, 
 all of them due to the predominant position of organized labor in the 
 building trades. These matters related to the preference to be given 
 veterans, the use of local labor, and the creation of an employment 
 service. 
 
 A dispute involving the preference to be given to ex-service men with 
 dependents soon arose in connection with a project located in Minnesota 
 and financed by the P.W.A. The United States district attorney ap- 
 parently informed the union contractor that he could not hire non- 
 veterans until every veteran who was qualified and who desired em- 
 ployment had been employed. 38 The matter was referred to the Attorney 
 General, who held that a union contractor was required to give prefer- 
 ence among union workers to those who were ex-service men with de- 
 pendents, but that he was not required to employ non-union workers who 
 were ex-service men with dependents in preference to union workers 
 who had had no military service. 39 In arriving at this opinion, the At- 
 torney General seized upon the word qualified, used in the statute, and 
 held that the intention of Congress was not to limit the terms to technical 
 qualifications, but to effectuate what was a reasonable preference. Thus, 
 he ruled that a person qualified to do work is one whose services would 
 
 3a Ibid., vol. 49, pp. 115, 1608. 
 
 "Department of the Interior, Memorandum for the Press, Statement of Policy of National 
 Public Works Board (June 22, 1933). See also Circular No. 1, op. cit., p. 4. 
 ^Ickes, op. cit., p. 34. 
 
 m 37 Op. Atty. Gen., 305 (October 25, 1933). 
 
u8 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 expedite the performance of the work, and held that a person whose 
 presence would hinder construction could not be said to be qualified. 
 This interpretation of the statute meant that collective agreements be- 
 tween contractors and the building-trade unions would be unaffected by 
 P.W.A. labor policies; and that the danger of strikes in opposition to 
 the employment of non-union workers would be substantially eliminated. 
 In practice, qualified union veterans were given a preference over union 
 non-veterans by contractors operating under a collective bargaining 
 agreement, but non-union veterans received a preference only on projects 
 being constructed by non-union contractors. 
 
 Organized labor was also involved in the administration of the 
 statutory preferences for local residents. In an early case, the P.W.A. 
 had agreed to finance a project in Georgetown, Illinois, a community 
 having a heavy relief load. The lowest responsible bidder was a union 
 contractor from another city in the same county, who proposed to import 
 union labor because of the absence of such labor in the first community. 
 The establishment insisted, however, that the preference for local labor, 
 stated in the act, took precedence over the demands of organized labor. 
 The contractor was therefore required to obtain the preponderance of 
 his workers from Georgetown, even though they were non-union. This 
 action was apparently founded on the belief that the community paying 
 taxes in order to finance construction was at least entitled to a reasonable 
 opportunity to reduce its direct relief rolls. Union contractors were 
 cautioned that their bids should take into account the necessity of em- 
 ploying local labor. 40 
 
 In order to meet its needs for the recruitment of labor, the P.W.A. 
 proposed to expedite the creation of an employment service, already 
 under way in the Department of Labor. This action met with the oppo- 
 sition of organized labor, which feared that such an agency would 
 supplant the unions in supplying skilled labor. 41 A compromise provided 
 that local labor was, so far as practicable, to be selected from lists of 
 qualified workers submitted by local employment agencies approved by 
 the United States Employment Service ; but organized labor, skilled or 
 unskilled, was to be obtained in the customary manner through recog- 
 nized trade unions. If employees were not furnished by the unions 
 within forty-eight hours, Sundays and holidays excluded, all workers 
 were to be selected from the lists of the employment service. A rule 
 adopted somewhat later required that, in any case, preference was to be 
 given to those unemployed at the time of registration who, at the date of 
 selection, had no other available employment. 42 
 
 40 Ickes, op. cit., p. 34. 
 41 Ibid., p. 31. 
 
 42 For these regulations see P.W.A., Bulletin No. 2, General Information and Instructions 
 for State Advisory Boards and State Engineers (P.W.A.), (1933), p. 3; and its revision, P.W.A. 
 
 Requirements, etc. (1934), p. 5- 
 
PROJECT AND CONSTRUCTION POLICIES 
 
 II 9 
 
 These policies continue to be in force on projects financed under the 
 provisions of the Recovery Act, but quite different regulations have been 
 adopted as part of the second P.W.A. works program. The Emergency 
 Relief Appropriation Act of 1935 did not repeat the preferences con- 
 tained in the Recovery Act, and, instead, required that preference in the 
 employment of labor (except for executive, administrative, supervisory, 
 and highly skilled positions) was to be given to persons receiving relief, 
 where they were qualified. 43 Since this provision was contained in a para- 
 graph relating primarily to highway projects, it is not clear from the 
 context whether it was intended to apply to all undertakings financed 
 under the act. That application was, however, required by the President 
 who ordered that, on all projects financed under the act: 
 
 Preference in the employment of workers shall be given to persons from the 
 public relief rolls, and except with the specific authorization of the Works Progress 
 Administration at least 90 per cent of the persons working on a works project 
 shall have been taken from the public relief rolls.'" 
 
 Had this provision been fully applied to the Public Works Administra- 
 tion, the P.W.A. would definitely have become a work-relief agency. 
 
 The requirement that at least ninety per cent of the workers on 
 projects be selected from public relief rolls was first waived on P.W.A. 
 housing projects. An order of the Works Progress Administrator pro- 
 vided that non-relief workers could be selected where qualified workers 
 could not be found on the relief rolls. However, it was also provided 
 that, wherever practicable, work which did not require the extensive 
 use of skilled labor should be let under contracts containing the relief- 
 labor requirement. 45 This order was apparently designed to expedite 
 construction. 
 
 The waiver of the relief-labor requirement was, subject to certain 
 limitations, soon extended to P.W.A. non-federal projects as well. The 
 state representatives of the Works Progress Administration were author- 
 ized to exempt from the requirement projects with respect to which the 
 United States Employment Service, or other duly designated placement 
 agency, certified that there was an inadequate number of qualified 
 workers available within the vicinity of the project. 46 That area was 
 defined as one within which the worker could travel to and from the 
 project without an unusual expenditure of time or excessive transpor- 
 tation costs. As later clarified, organized labor was to be requisitioned 
 from locally recognized unions, with members on the relief rolls being 
 
 43 4 9 Stat, at L., us, section i. Congress later provided that persons in actual need whose 
 names had not been placed on the relief rolls were to possess the same eligibility as those whose 
 names were on the public relief rolls, and that the receipt of adjusted service compensation was 
 not to be a bar to employment. Ibid., p. 1608. 
 
 "Executive Order No. 7046 (May 20, 1935). 
 
 4s It was intended that these separate contracts cover such items as demolition and land- 
 scaping work. P.W.A. Press Release No. 1506. 
 
 ■"W.P.A. Administrative Order No. 26 (September 26, 1935). 
 
120 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 first selected, while unorganized labor was to be chosen from the lists 
 of the federal employment service, or other agency designated by the 
 Works Progress Administration to act as a placement service. 47 
 
 The policies of the P.W.A. with respect to the selection of labor can, 
 accordingly, be summarized about as follows. On projects financed under 
 the terms of the Recovery Act there is not, and has never been, any 
 specific requirement that relief labor be used. On projects financed under 
 later acts preference must be given to persons on the public relief rolls, 
 where such persons are available and qualified, but, insofar as organized 
 labor is concerned, this requirement means only that union members on 
 relief are to be preferred to those not on relief. Persons on relief who 
 are not members of an appropriate union have no preference over union 
 laborers, whether or not on relief, where the project is being built by a 
 union contractor. It is generally understood that, in recent months, ap- 
 proximately thirty per cent of the labor on projects financed by the 
 P.W.A. has come from the public relief rolls. 48 It may be recalled that, 
 during 1937, an attempt was made to increase this percentage by basing 
 the grant on the sums paid to relief labor, a policy that was later 
 abandoned. 
 
 In other respects, the regulations governing the selection of labor 
 continue in force without substantial change, except that ex-service men 
 receive a preference only on projects financed under the terms of the 
 Recovery Act. Convicts, aliens illegally within the United States, and 
 persons under the age of sixteen years are denied employment, as are 
 persons whose age or physical condition is such as to render their em- 
 ployment dangerous. Discriminations on account of race, creed, color, or 
 political affiliations are forbidden, and "yellow dog" contracts are out- 
 lawed as part of a guarantee of the right of collective bargaining. 
 
 Hour and Wage Regulations. — Limitations as to the hours of work 
 on projects have also varied somewhat. The Recovery Act required a 
 thirty-hour week so far as practicable and feasible, except for executive, 
 administrative, and supervisory employees. The rules promulgated under 
 later acts fix a forty-hour week as normal. An eight-hour day has been 
 the basic policy since the beginning. Emergencies, or other special cir- 
 cumstances, may result in variations of the basic limitations. 49 The use 
 of double shifts of employees has always been urged, in order that a 
 maximum number of workers may be given employment on each project. 
 
 "W.P.A. Administrative Order No. 39 (February 25, 1936). The earlier policy had re- 
 quired the selection of union labor in the following order of preference: (1) regular employees 
 of the contractor who were on the relief rolls, (2) other union members on relief, and (3) other 
 union members. 
 
 ■■'Hearings before the Subcommittee of the House Committee on Appropriations, Independ- 
 ent Offices Appropriation Bill for io?8, 75th Congress, 1st Session, p. 900. 
 
 "See Administrative Order No. 61, particularly supplements 13 (June 19, T936), 18 
 (November 18, 1936), and 19 (November 23, 1936); 1 Fed. Reg., 773, 2239, 2351. A monthly 
 maximum of 130 hours was enforced under the Recovery Act. 
 
PROJECT AND CONSTRUCTION POLICIES 
 
 121 
 
 The Recovery Act required that wages on projects financed by the 
 P.W.A. be just and reasonable, and "sufficient to provide, for the hours 
 of labor as limited, a standard of living in decency and comfort." So 
 far as the apportioned road fund of $400,000,000 was concerned, there 
 was a specific provision that the several state highway departments were 
 to establish minimum wage rates, but there was no specific provision 
 regarding the fixing of wages on other projects. Presumably, the P.W.A. 
 could have permitted the bodies obtaining allotments to establish mini- 
 mum rates, or otherwise to fix a standard of living in decency and 
 comfort. Actually, however, the P.W.A. itself fixed minimum rates of 
 compensation payable to skilled and unskilled labor on substantially all 
 projects other than those undertaken as a result of allotments from the 
 apportioned road fund. This was done with the consent of labor leaders, 
 although they had earlier opposed any minimum wages on the ground 
 that a minimum wage usually tends to become a maximum as well. 50 
 Under P.W.A. regulations, the country was divided into three zones and 
 minimum wages (rate per hour) were fixed as follows: 
 
 It was provided that these rates were not to be used to discriminate 
 against assistants, helpers, etc., who were not to be termed unskilled 
 laborers. 51 Nevertheless, considerable difficulty did arise with respect 
 to the minimum wages to be paid the various grades of intermediate 
 workers, as well as to professional and subprofessional employees. From 
 time to time, various regulations were promulgated to govern the wages 
 of these employees, generally requiring the payment of prevailing wages, 
 although occasionally specific minimum rates were fixed. There was no 
 pretense that the zone system adopted was scientifically exact, but it did 
 represent the general belief that living costs are higher in the northern 
 states, somewhat lower in the central states, and still lower in those of the 
 south. In the case of projects located in two zones, the wages applying 
 to the northernmost area were paid. The decisions of the P.W.A. labor 
 
 50 Ickes, op. cit., p. 33. 
 
 "The fixing of the wage rates was announced in P.W.A. Press Release No. 56 as being 
 arranged by the Department of Labor, signed by representatives of the American Federation of 
 Labor, and approved by resolution of the Special Board for Public Works. The zones were as 
 follows: Northern Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, 
 New York, New Jersey, Pennsylvania, Ohio, Indiana, Illinois, Michigan, Wisconsin, Minnesota, 
 Iowa, Nebraska, North Dakota, South Dakota, Montana, Wyoming, Idaho, Washington, and 
 Oregon; Central, Delaware, Maryland, District of Columbia, Virginia, West Virginia, North 
 Carolina, Kentucky, Tennessee, Missouri, Kansas, Colorado, Utah, Nevada, and California; 
 Southern, South Carolina, Georgia, Florida, Alabama, Louisiana, Mississippi, Arkansas, Okla- 
 homa, Texas, Arizona, and New Mexico. 
 
 Southern 
 Central. . 
 Northern 
 
 Zone 
 
 Skilled 
 Labor 
 $1 .00 
 1 . 10 
 1 .20 
 
 Unskilled 
 Labor 
 
 % .40 
 
 •45 
 •50 
 
122 THE PUBLIC WORKS ADMINISTRATION 
 
 board of review were declared to be final as to all disputes relating to the 
 classification of labor and the rates of compensation to be paid. 52 The 
 right to change the original rates was reserved, but retroactive changes 
 were never ordered. 
 
 To the minimum rates prescribed by the establishment, there was 
 added a proviso that if these rates were lower than those existing in any 
 community on April 30, 1933, for the particular kind of work involved, 
 then the prevailing hourly rates in effect on that date would apply. This 
 proviso also was inapplicable to highway projects on which the rates 
 were predetermined by the state highway departments. The effect of the 
 April 30, 1933, proviso was to give employees the benefits of the 1932 
 wage scale, since in many communities lower rates had been introduced 
 in May and August of 1933 in collective agreements and understandings 
 between employers and organized labor. Accordingly, union workers on 
 P.W.A. projects could be earning more than similar workers on private 
 projects, even in those communities where the specific minimum rates 
 set forth were not higher than the then prevailing rates. 53 It must be 
 supposed that union workers would, therefore, choose employment on a 
 P.W.A. project in preference to work on private undertakings at a lower 
 rate of pay. This has probably meant that contractors on P.W.A. wages 
 had their selection of the better qaulified workers. 
 
 The Emergency Relief Appropriation Act of 1935 stipulated that the 
 President should require the payment of wages which would not affect 
 adversely or otherwise tend to decrease the going rates of wages paid 
 for work of a similar nature, and specifically authorized him to fix 
 different rates of compensation for various types of work and for 
 different parts of the country. 54 This the President did, fixing rates for 
 unskilled, intermediate, skilled, and professional and technical work. Four 
 regions were created, and in each differentials were prescribed according 
 to the population of the largest municipality in the county or township 
 in which the project was located. These regulations applied particularly 
 to Works Progress Administration projects, and those of the P.W.A. 
 were specifically excepted. On projects exempted from the regulations, 
 the President decreed that wages were to be determined in accordance 
 with local conditions. 55 
 
 In order to avoid the complications inherent in maintaining two 
 wage standards, the P.W.A. now abandoned the former zone system, 
 
 B2 The functions of the board are treated in chap, ii, supra. 
 
 "The New York Times (February 15, 1936) reported that the P.W.A. had ordered the 
 payment of wages as much as $2 per day above the existing union scale in one community. 
 At the same time, Congress was debating the respective merits of prevailing and security wages. 
 
 64 49 Stat, at L., 115, section 7. The Emergency Relief Appropriation Act of 1936 (ibid., 
 p. 1608) required the payment of prevailing wages on projects paid under that act, but the 
 provision related chiefly, if not exclusively, to W.P.A. projects. 
 
 "Executive Order No. 7046 (May 20, 1935) as amended. See particularly ibid., Nos. 7119 
 (July 30, 1935), 7203 (October 1, 193s), and 7226 (November 13, I93S)- 
 
PROJECT AND CONSTRUCTION POLICIES 
 
 123 
 
 and the predetermination of wages in accordance with local conditions 
 was adapted to all projects on which contracts had not been let prior to 
 October 9, 1935. 56 In the case of non-federal projects, the wages were 
 to be fixed by the body receiving the allotment, subject to the approval 
 of the local state director of the P.W.A. That officer was given the 
 power to disapprove any rate, other than one fixed by statute or ordi- 
 nance, which was lower than the prevailing union rate, if the type of 
 work affected had normally been performed under union conditions in 
 the locality in which the project was to be constructed. On federal hous- 
 ing projects, the director of the housing division was to determine the 
 rates of compensation to be paid, subject to the power of the state 
 director, within whose area the project was being constructed, to dis- 
 sent on the grounds that the wages fixed were not consistent with local 
 conditions. 57 
 
 Some minor differences still exist as between the wages paid on 
 different P.W.A. projects. Obviously, much depends on whether the 
 contract for construction was let before or after October 9, 1935. In 
 addition, on force-account work, the provisions of state or local charter 
 provisions governing the fixing of wages must be adhered to ; and, on 
 other projects, there may also be statutory provisions which must be 
 complied with. The proviso as to April 30, 1933, has disappeared from 
 the establishment's regulations, being replaced for some projects by a 
 similar requirement that after July 16, 1935, the wages prevailing on 
 March 1, 1935, shall take precedence over the former zone rates on 
 recovery act projects. In general, however, the abandonment of the 
 three-zone system means that the wage regulations on all projects now 
 under construction are substantially identical in their general aspects. 
 The rates of compensation are determined by the body obtaining the 
 allotment in advance of the letting of contracts, and must be embodied 
 in all contracts let. 
 
 The actual payment of the wages required has been enforced by the 
 P.W.A. at all times. As already pointed out, appropriate bonds have 
 been required, and, in addition, a portion of the sum due the contractor, 
 generally ten per cent, has regularly been ordered withheld until such 
 time as all labor controversies may be adjusted. The payment of wages 
 weekly and in cash has generally been required, and deductions have been 
 prohibited, except for such items, provided for by law, as workmen's 
 compensation and medical insurance. 58 The enforcement of these regu- 
 lations has been aided by the enactment of the so-called "kick back" 
 
 56 P.W.A. Press Release No. 1646. 
 
 "Administrative Orders Nos. 26 (May 28, 1935) and 72 (July 24, 1935). 
 M For the establishment's concern about accident prevention, see P.W.A. Press Release No. 
 531 (February 25, 1934). 
 
124 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 statute, which makes it a criminal act to induce any person employed on a 
 project financed in whole or in part by loans and grants from the national 
 government to surrender any part of the compensation to which he is 
 entitled. 59 
 
 Materials Used in Construction. — Although the Recovery Act con- 
 tained no provision prohibiting the use of materials produced by convict 
 labor, the President decreed that such materials should not be employed 
 on PAV.A. projects. 60 This rule applied to all projects, including those 
 financed from the apportioned highway fund. In this respect the rules 
 governing the acquisition and use of materials have remained stable, but 
 in other respects the policies have fluctuated. 
 
 It was announced at an early date that a preference would generally 
 be permitted for materials produced locally, as against materials produced 
 in other parts of the United States, to the extent that such a preference 
 was feasible and practicable and did not involve higher costs, inferior 
 quality, or an insufficient quantity of materials. 61 It was indicated that 
 the announced preference for local materials should be regarded as 
 giving a favored status to the area geographically and economically 
 connected with the locality in which the project was situated, which area 
 need not be coterminous wtih the boundaries of a state. No price differ- 
 ential in favor of local materials has ever been permitted, nor were bids 
 by non-local plants permitted to be discouraged. It seems clear that the 
 preference for local materials was caused by the desire to concentrate 
 the benefits of the works program in the communities to which the allot- 
 ment was made. It would appear, however, that the administrative prob- 
 lems involved in so doing were almost insurmountable. In some localities, 
 the unemployment situation was not particularly acute, and it was de- 
 sirable, therefore, to spread the benefits resulting from public works 
 expenditures as widely as possible. Then, too, there were many difficulties 
 involved in determining what constituted a locality and, particularly, the 
 effects of such a preference upon ultimate costs and the quality of con- 
 struction. There were also many delays caused by the attempts of local 
 groups to favor local products as much as possible. Accordingly, the 
 preference for local materials was later retroactively waived. So far as 
 construction contracts already let were concerned, the enforcement of 
 local preference was made optional with the body receiving the allot- 
 ment. 62 Since the end of May, 1934, contracts let under P.W.A. regula- 
 tions have contained no preference for materials produced locally, except 
 
 "48 Stat, at L.. 948. 
 
 '"Executive Order No. 6252 (August 19, 1933}. For some subsequent exceptions of a minor 
 character, see P.W.A., Amendment to Rules (November 30, 1936), 2 Fed. Reg., 6. 
 
 "Circular No. I, op. cit., p. 7; Bulletin No. 2 (revised, 1934), op. cit., p. 6. See also Com- 
 merce Clearing House, Inc., Federal Trade Regulation Service (7th edition), paragraph pw 2017. 
 
 62 P.W.A., Manual for Engineer Inspectors (1934), p. 49- 
 
PROJECT AND CONSTRUCTION POLICIES 
 
 125 
 
 that, where prices, quality, and quantity are the same, the bodies receiv- 
 ing allotments have often been permitted to select any of the low bidders 
 or to divide the orders as they saw fit. In some cases, as pointed out 
 earlier in this discussion, the practice has been to award bids to the con- 
 tractor having the highest distribution costs. This is tantamount to a 
 preference for materials not produced locally in those instances where 
 identical bids are submitted. 
 
 A much more troublesome problem has been presented by the desire 
 to discriminate against imported materials in favor of domestic ma- 
 terials. On this point, too, the Recovery Act was silent. The House had 
 adopted a domestic-materials amendment, but it had been stricken out of 
 the bill by the Senate. 63 It was at first specifically provided by the P.W.A. 
 that no price differential, or other restrictive requirement favoring ma- 
 terials domestically produced, would be permitted, except on federal 
 projects and on undertakings financed from the apportioned road fund, 
 which were governed by existing statutes. A preference was, however, 
 provided for materials produced under codes of fair competition, where 
 prices, quality, and quantity were satisfactory. This, of course, did mean 
 some preferred treatment for domestic materials. 64 
 
 As a result of the passage of the Emergency Relief Appropriation 
 Act of 1935, different regulations relating to domestic materials were 
 promulgated by the establishment. 65 The new regulations provided for a 
 price differential in favor of domestic materials and applied to all pur- 
 chases within the continental limits of the United States, exclusive of 
 Alaska. Where the bid to supply foreign materials was $100 or less, 
 the differential in favor of local materials was fixed at one hundred per 
 cent ; where the foreign bid exceeded $100 but was less than $10,000, at 
 twenty-five per cent ; and where the foreign bid exceeded $10,000, at 
 fifteen per cent. If, after adding the applicable differential, foreign ma- 
 terials were still cheaper in price, the materials produced abroad were 
 required to be purchased. If, however, the purchaser was a contractor 
 rather than the body receiving the allotment, he was given the option of 
 selecting domestic materials. It is doubtful whether this option was 
 widely exercised, since it would have meant a reduction in the profits of 
 the contractor. 66 
 
 Later in 1935, all previous regulations concerning domestic materials 
 were superseded by a somewhat different administrative policy. 67 A 
 
 ^Congressional Record vol. 77, p. 5358 (June 9, 1933). 
 64 Circular No. 1, op. cit., p. 6. 
 
 6! See 49 Stat, at L., 115, section 13, and the statute there cited. 
 66 Administrative Order No. 27 (May 25, 1935). 
 
 "Ibid., No. 99 (November 25, 1935). The term domestic materials was defined so as to 
 include all unmanufactured articles mined or produced in the United States, and articles 
 manufactured in the United States substantially all from materials produced in this country. 
 Foreign materials include all other articles. 
 
126 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 differential of one hundred per cent in favor of domestic materials was 
 instituted where foreign materials were offered at a price of $100 or less; 
 and a differential of twenty-five per cent in the case of larger purchases. 
 This amounted to a raising of the earlier differential from fifteen to 
 twenty-five per cent on all purchases over $10,000. In addition, however, 
 it was provided that even after this differential was applied, and domestic 
 materials were still higher in price, they were nevertheless to be pur- 
 chased, unless the administrator gave his consent to the selection of 
 foreign materials. It was indicated that such consent would not be 
 forthcoming unless the purchase of domestic materials would unreason- 
 ably increase the cost of the project, or where it would be impracticable 
 to purchase domestic materials. Since the determination of these 
 questions presented some problems, it was decided to rely upon the 
 P.W.A. engineering division to decide whether costs would be unreason- 
 ably increased, and upon the practice of other government agencies, such 
 as the bureau of public roads and the procurement division, as to whether 
 materials should be classified as foreign or domestic and as to where 
 it was impracticable to apply the preference for domestic materials. It 
 is believed that the use of foreign materials has not often been permitted, 
 although the domestic materials preference has not been applied to such 
 items as asphalt, cork, and rubber products. It is also thought that the 
 absolute preference for domestic materials was brought about as a result 
 of the insistence of the steel industry and, to a lesser extent, of the 
 lumber industry. 68 
 
 The safeguarding of the quality of materials employed on all projects 
 financed by the P.W.A. has been effected through a rule that mill and 
 factory inspection and testing of materials shall be had wherever deemed 
 necessary by the establishment. Under regulations in force since early in 
 1934, the body obtaining the allotment assumes the obligation to see to it 
 that this requirement is complied with, and the P.W.A. reserves the 
 right to approve or disapprove of the testing laboratory employed. This, 
 of course, is in addition to the ordinary inspection in the field. 
 
 Control Over Completed Projects. — The regulations of the Public 
 Works Administration do not indicate that any control is ordinarily 
 retained over completed projects. Nor is it believed that such control 
 is generally provided for in the loan and grant agreements applying to 
 particular projects, except where loans are made payable from the reve- 
 nues of the undertaking. In such cases, efforts to protect the govern- 
 ment's investment may be found in measures requiring adequate hazard 
 insurance and the institution of accounting controls, in order to show that 
 all users of the service are properly billed, that there is no delinquency in 
 
 **Cf. Congressional Record, vol. 8o, p. 17 (January 3, 1936). 
 
PROJECT AND CONSTRUCTION POLICIES 
 
 127 
 
 collections, and that disbursements for operating costs are not excessive. 69 
 These, and similar measures which may be embodied in individual con- 
 tracts, are designed to prevent the danger of defaults in interest and 
 principal payments to the government. With respect to the great ma- 
 jority of P.W.A. projects, however, there has been no attempt at control 
 after the completion of construction, if only because many of those 
 projects have been financed by outright grants. Since the threat to with- 
 hold future grants could not be invoked in the absence of regular ap- 
 propriations for public works allotments, the establishment has not been 
 in a position to control the completed structures, except as provided in 
 the loan and grant agreement. Even in the absence of contractual ar- 
 rangements, the establishment might, however, be able to take legal action 
 to protect its rights as a bondholder in those cases where loans are made. 
 Where only grants are made, the establishment relinquishes control upon 
 completion of the project. These generalizations do not, however, apply 
 to housing projects, whether limited-dividend undertakings or directly 
 sponsored by the Public Works Administration. 
 
 Housing Under the P.W.A. 
 
 The activities of the Public Works Administration in the field of 
 housing are significant, not so much in terms of money expended as in 
 governmental problems raised and in the light of the experience of the 
 P.W.A. before it ceased to be active in this field, late in 1937. The Recov- 
 ery Act authorized aid in the construction of low-cost housing and in slum 
 clearance, where the undertakings were under public regulation or con- 
 trol. 70 This specific stipulation for governmental supervision in some 
 form constituted a recognition of the fact that the housing of the nation's 
 population was rapidly becoming a governmental problem. 71 
 
 Limited-dividend Housing. — It was expected at first that the estab- 
 lishment would be able to function effectively in the field of housing by 
 making allotments to non-federal bodies, chiefly loans to private corpo- 
 rations. The laws of a dozen states were such as to allow the formation 
 of limited-dividend corporations, thus providing the necessary public 
 regulation. 72 In the other states, it was thought that the needed regu- 
 lation could be effected through provisions in the contract under which 
 the Public Works Administration proposed to make the loans ; no grants 
 could be made to private corporations. It does not appear that any public 
 
 m P.W.A. Press Release No. 3 no (March 7, 1937). 
 ,0 48 Stat, at L., 195, 200. section 202. 
 
 "The Reconstruction Finance Corporation had previously been authorized to make loans 
 to corporations formed wholly for the purpose of providing housing for families of low income, 
 or for the reconstruction of slum areas; 47 Stat, at L., 711. Only one loan was actually made 
 under this authority. 
 
 "C Woodbury, "Strides Toward Low-Cost Housing," Public Management, vol. 15 (1933), 
 p. 242. 
 
128 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 bodies actually submitted applications for allotments, nor even that they 
 were in a legal position to do so. However, over five hundred applications 
 from private groups were received, of which seven were finally accepted. 
 
 The high mortality rate on these housing applications was due to the 
 rather strict requirements of the establishment with regard to the con- 
 ditions under which allotments would be made and to regulations de- 
 signed to subordinate the profit motive to more altruistic ends. 73 The 
 Public Works Administration was primarily interested in the stimulation 
 of employment and in demonstrating the possibilities of slum clearance 
 and low-cost housing. Applicants were required to provide as their equity 
 fifteen per cent of the estimated cost of the project, either in land or as a 
 cash investment, since the maximum loan was fixed at eighty-five per 
 cent. The loans carried an interest rate of four per cent, and a normal 
 amortization period of thirty years was provided for fireproof buildings. 
 The corporations were permitted a return of six per cent, and, except for 
 necessary financial reserves, surplus earnings are set aside and earmarked 
 for an eventual reduction in rentals. The high standards of design that 
 were insisted upon were also such as to discourage speculative under- 
 takings. The P.W.A. did not, however, entirely discourage sound sales 
 schemes. 
 
 Elaborate methods of control were evolved for the seven projects that 
 were approved before the policy of extending aid to private corporations 
 was abandoned. 74 The contract and annexed schedules for one project 
 in Philadelphia total one hundred and twenty-four pages — at least a 
 superficial indication of extensive control. 75 The management of this 
 project, as in the case of the others, is vested in the sponsoring corpo- 
 ration, but the government retained the authority to regulate, supervise, 
 and control the activities of the corporation in almost every important 
 respect. In addition to such regulatory powers as might be exercised by 
 other public authorities, the P.W.A. retained the right and power: to 
 require annual reports ; to examine the books and accounts of the corpo- 
 ration, and to prescribe uniform accounting forms and methods; to regu- 
 late salaries, commissions, and fees paid by the corporation ; to restrict 
 the contracts entered into ; to order that an adequate number of quali- 
 fied employees be retained, and to compel the discharge of any employee ; 
 to insist upon necessary or reasonably advisable repairs ; and to regulate 
 the sale, lease, and rental of units, including the right to revise the 
 
 ,3 P.W.A., Housing Division Bulletin No. 2, Urban Housing (1936), pp. 28 ff.; Circular No. 
 1, op. cit., pp. 17 ff.; and P.W.A. Press Release No. 3056 (December 9, 1936). 
 
 "The Federal Housing Administration is to some extent affording aid to private corpora- 
 tions engaged in housing activities, but only through the insurance of mortgages. See Federal 
 Housing Administration, Circular No. 3, Low-Cost Housing (rev., 1935). 
 
 75 The discussion which follows is based on an analysis of the contract documents by 
 W. H. Blucher, "Control of Housing Administration," Law and Contemporary Problems, vol. 1 
 (1934), p. 238. See also P.W.A. Press Releases Nos. 1164 and 1171. 
 
PROJECT AND CONSTRUCTION POLICIES 129 
 
 maximum, or maximum average, rentals. The corporation also agreed 
 not to sell the project without first offering it to the government, and an 
 option to purchase may be exercised by the government upon default of 
 any of the terms embodied in the agreement. It is not expected that these 
 powers will all be exercised, but it is not surprising that private corpo- 
 rations were loath to enter an uncertain field when, in addition, they were 
 to be subjected to such stringent regulation and supervision. These re- 
 quirements were undoubtedly considered necessary in order to safeguard 
 the establishment's loan, yet the P.W.A. must assume some responsibility 
 for the failure of private enterprise to participate more fully in the 
 housing program. 
 
 Federal Housing. — Although the National Industrial Recovery Act 
 did in general terms make it possible for the P.W.A. itself to engage in 
 the construction and operation of housing projects, the committee hear- 
 ings and the debates in Congress shed little light on whether or not direct 
 action by the government was anticipated. A private citizen did suggest 
 an amendment providing that funds be invested in slum clearance for 
 profit, with the proceeds to be used to retire any bonds that might be 
 issued, but no attention appears to have been paid to this suggestion. 76 
 The P.W.A. at first gave no evidence that it was considering direct action, 
 but ultimately did undertake a federal housing program because of the 
 substantial failure of non-federal public bodies and private corporations 
 to act. This federal housing program included fifty-one projects located 
 in thirty-six cities and two insular possessions. 77 
 
 The P.W.A. regarded this program as a demonstrative one in a field 
 where private capital cannot function because of the, at best, limited 
 possibility of a financial return. 78 Yet P.W.A. enterprise was re- 
 garded in some quarters as being hostile to private capital. This does not 
 appear to be the fact, although Administrator Ickes did on one occasion 
 compare the activities of the P.W.A. in the field of housing to those 
 of the government with respect to electric power facilities, and even 
 raised the question as to whether the national government might not 
 legitimately compete with private capital in both cases. 79 Even within 
 the P.W.A. itself, there were apparently some persons who were opposed 
 to direct governmental action, but a reorganization was effected during 
 1934, and a new director of the housing division was appointed. 80 
 
 "Hearings before the House Committee on Ways and Means on H.R. 5664, National Indus- 
 trial Recovery, 73d Congress, 1st Session, p. 304. 
 
 "For a rather complete report on these projects see: Hearings before the Senate Com- 
 mittee on Education and Labor on S. 1685, To Create a United States Housing Authority, 75th 
 Congress, 1st Session, pp. 10 ff. Congress has also authorized the P.W.A. to aid in efforts to 
 eradicate alley dwellings in the District of Columbia. See 48 Stat, at L., 930; Executive Order 
 No. 6868 (October 9, 1936) ; and J. Ihlder, "Accomplishments of the Alley Dwelling Authority 
 as of June 24, 1936." Am. Planning and Civic Annual (1936), H. James, ed., p. 133. 
 
 ,8 Cf. P.W.A. Press Release No. 339 (November 28 ; 1933). 
 
 ''"Ibid., No. 1096 (November 3, 1934); New York Times, November 24 and 25, 1934. 
 ""P.W.A. Press Releases Nos. 897 and 991 (September 29, 1934). 
 
130 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 The announced intention was to confine P.W.A. housing to congested 
 areas occupied by more or less obsolete and dilapidated structures. Vari- 
 ous developments caused the P.W.A. to shift its emphasis and to con- 
 centrate upon housing almost to the exclusion of slum clearance, using 
 vacant land at the outskirts of the communities. This, however, was not 
 done until difficulties in the acquisition of land in slum areas threatened 
 to block the entire program, for the establishment was anxious to reduce 
 the deleterious effects of slum areas. 81 
 
 The use of condemnation proceedings seemed at first to be a solution. 
 The exercise of the power of eminent domain was expected to result in 
 reasonable payments for land needed, it would assure the validity of the 
 government's title to any land that was obtained, and it would care for 
 those cases where the owners were unwilling to sell on any terms. The 
 general power of the national government to utilize condemnation pro- 
 ceedings had long ago been upheld by the courts, 82 but the use of such 
 proceedings in connection with housing projects presented a legal 
 problem. The question now raised was whether the exercise of the power 
 of eminent domain by the national government for housing purposes 
 constituted a taking for a public use. The Recovery Act had authorized 
 the exercise of the power of eminent domain in connection with the con- 
 struction of any works project, but this did not, of course, determine the 
 constitutional issue. 
 
 The leading case on the subject involves a project in Louisville, Ken- 
 tucky. Both the district and circuit courts denied the existence of any 
 national power to condemn land for slum clearance and housing pur- 
 poses. 83 The latter pointed to the broad discretionary powers vested in 
 the President and the administrator, and the fact that the Recovery Act 
 set no standards as to what constituted a slum, a low-cost house, or a 
 housing project, and failed to limit the location of projects or the sums 
 to be expended on their construction. Resting its decision both on the 
 doctrine of public use and on the nature of the national government's 
 powers, the court said, "The taking of one citizen's property for the 
 purpose of improving it and selling or leasing it to another, or for the 
 purpose of reducing unemployment, is not, in our opinion, within the 
 scope of the powers of the federal government." One judge dissented. 
 The case was appealed to the Supreme Court, but was later dismissed 
 on motion of the government, it being explained that the question had 
 
 8I On this subject, see P.W.A., Housing Division Bulletin No. i, Slums and Blighted Areas 
 in the United States (1935) by E. E. Wood; and P.W.A., Housing Division Research Bulletin 
 No. 1. The Relation Between Housing and Delinquency (1036). 
 
 st Kohl, et al., v. United States, 91 U.S. 367, 23 L. ed. 449 (1875). 
 
 ^United States v. Certain Lands in the City of Louisville, Kentucky et al., 9 Fed. Supp. 
 '37 (1935); ibid., 78 Fed. (2), 684 (1935); appeal dismissed, ibid., 297 U.S. 726, 56 Sup. Ct. 
 594 (1936). There were also several other cases in the district courts, some of which reflect a 
 different point of view. 
 
PROJECT AND CONSTRUCTION POLICIES 
 
 become a moot one since available funds had been diverted to projects 
 not involved in litigation. 84 In the absence of any definitive decision by 
 the Supreme Court, one can only speculate as to what that tribunal would 
 have held. 
 
 One authority on constitutional law, Edward S. Corwin, has given 
 it as his opinion that the entire housing program of the P.W.A. is valid, 
 including the exercise of eminent domain in connection with its housing 
 projects. 85 His conclusion is founded on the belief that the power to tax 
 is a definite substantive power and includes the right to expend the pro- 
 ceeds for the furtherance of the general welfare. If this point of view 
 be accepted, the fact that the housing program was part of a much 
 broader movement for the elimination of unemployment becomes signifi- 
 cant. For if such activity is held to promote the general welfare, then the 
 government is undoubtedly permitted to use any means necessary and 
 proper for carrying out its delegated power. It could hardly be argued 
 that the exercise of the power of eminent domain would not be necessary 
 and proper if the purpose for which it is used is a legitimate one. Dr. 
 Corwin also argues that the subsequent sale, lease, or rental of the projects 
 to private individuals is immaterial. If the original use is a public one, 
 there can be no legal hindrance to the exercise of eminent domain and 
 the subsequent employment of the property for non-public uses, since 
 the Constitution specifically authorizes the disposition of any property 
 no longer needed by the government. Dr. Corwin also denies that there 
 was any unconstitutional delegation of legislative power to the Public 
 Works Administration. 86 
 
 Financial Arrangements. — The entire cost of constructing these 
 federal housing projects was, of course, met by the government. From 
 the beginning, however, it was the policy of the P.W.A. to consider 
 housing on much the same plane as non-federal public undertakings, and 
 to make allotments on a plan analogous to the loan and grant basis. That 
 
 M P.W.A., Housing Digest, no. 3 (April, 1936), p. 49. In another case, it was held that the 
 statutes did not confer authority for the exercise of eminent domain for P.W.A. housing 
 projects in the District of Columbia. Judge Letts, of the supreme court of the district, held that 
 only the exercise of the power of eminent domain was involved and excluded other considera- 
 tions. He based his opinion on the fact that the Recovery Act was a general statute, with its 
 scope not limited to the district: "I have concluded that the use for which these lands are 
 sought to be condemned is not a public use; that Congress did not attempt to legislate for the 
 District of Columbia, having in mind local conditions; that Congress did not establish a public 
 policy based on information respecting conditions local to the District of Columbia; that Congress 
 did not legislate in the exercise of its police power over the District of Columbia; that the 
 United States is without constitutional authority to condemn these privately owned lands for 
 the use and purpose indicated . . . . " In re Acquisition of Squares, etc., 2 S. C. D. C. (N.S.), 
 
 77 (1935L . ... 
 
 ""Constitutional Aspects of Federal Housing," Univ. of Penn. Law Rev., vol. 84 (1935- 
 1936), p. 131. .... 
 
 M On the subject of a delegation of power, Dr. Corwin said: "It is difficult to conceive of 
 any course of reasoning whereby Title II of the N.I.R.A. can be made out to involve an uncon- 
 stitutional delegation of legislative power, that would not likewise invalidate the Budget and 
 Accounting Act of 192 1; that would not, in other words, condemn the national government to 
 a procedure in financial legislation which has been shown by history to be productive of log- 
 rolling, political favoritism, and senseless extravagance." Ibid., p. 155. 
 
132 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 is, the P.W.A. indicated an expectation of recovering for the govern- 
 ment a portion of the costs of construction. Under the Recovery Act, 
 allotments were made on the basis of a subsidy of thirty per cent, with 
 the balance of the cost being regarded as a loan to be recovered over 
 a period of forty-five years. The interest rate was fixed at three per cent 
 and land costs were also amortized. Later, during 1935, a retroactive 
 policy was adopted, and the financial arrangements for all projects were 
 made generally identical. A grant of forty-five per cent of the total cost 
 was made, and interest on the balance of the costs was fixed so as not 
 to exceed three per cent. The amortization period was fixed at sixty 
 years. Until the Comptroller General required such action, land costs 
 were not amortized, although an annual land-rent item was included. 87 
 
 The effect of these arrangements was such as to permit low rentals 
 to be charged, but it also meant that the government would recover only 
 part of the sums expended. That, however, would not seem to present 
 any difficulty, since on the projects financed by allotments to other federal 
 agencies no portion of the costs can be recovered. Nevertheless, the 
 Comptroller General insisted that there was no provision, either in the 
 Recovery Act or in subsequent enactments, indicating an intention on 
 the part of Congress that completed projects should be sold or rented 
 on a basis contemplating an ultimate loss to the government. 88 Had this 
 ruling prevailed, and had rentals been fixed at a level adequate to cover 
 the entire cost of the project, the low-cost (i.e., low-rental) element would 
 have disappeared from the housing activities of the P.W.A. This was 
 prevented by the enactment of a statute authorizing a continuation of 
 the policies described above. 89 The George-Healey Act authorized the 
 administrator to fix the interest rate on the government's capital invest- 
 ment, and permitted him to regard as much as forty-five per cent of the 
 cost as a grant, with the balance to be recovered within sixty years. The 
 statute also provided that rentals were to be adequate to cover the bond 
 retirement and operating charges against the project, and allowed the ad- 
 ministrator to retain out of the receipts such sums as he deemed neces- 
 sary to defray operating costs. This last provision may, perhaps, be 
 criticized as violating the principle of annual appropriations by the 
 legislative body. 
 
 Rentals. — When authorizing the subsidizing of housing, Congress also 
 laid down certain principles governing rental charges and the selection 
 of tenants. Living quarters were restricted to families who lacked a 
 sufficient income to enable them to live in decent, safe, and sanitary 
 
 87 P.W.A. Press Release No. 1475 (July 8, 19.15); 15 Comp. Gen., 619, No. A-65368 (Janu- 
 ary 17. 1936); ibid., vol. 16, p. 617, No. A-82300 (December 22, 1936). 
 Comp. Gen., 619, No. A-65368 (January 17, 1936). 
 M 49 Stat, at L., 2025. 
 
PROJECT AND CONSTRUCTION POLICIES 
 
 133 
 
 dwellings, and under other than over-crowded conditions. It was specifi- 
 cally provided, in addition, that no family was to be accepted as a tenant 
 if its aggregate income exceeded five times the rental of the quarters 
 sought, the term rental being used as including the average cost of heat, 
 light, water, and cooking fuel, where such utilities were to be furnished 
 by the P.W.A. 
 
 These statutory provisions were supplemented by administrative regu- 
 lations. While the latter varied to some extent from project to project, 
 certain policies were common to all. 90 The number of persons that might 
 reside in a dwelling was definitely limited, so as to prevent over-crowd- 
 ing, and no lodgers or groups of unrelated adults were admitted. In 
 each case it was required to be certified that the prospective tenants were 
 living in substandard housing and were unable to obtain standard housing 
 at rents which they could afford to pay. All tenants were required to 
 prove that they had resided in the municipality for at least one year, and 
 a preference was accorded to self-sustaining, low-income families with 
 children, whose head was a citizen or an alien who had declared his in- 
 tention of becoming a citizen. 
 
 It is possible to make some generalizations concerning the effect of 
 these policies and the high standards of construction upon rentals and the 
 average income of those selected as tenants. 91 The rents set for projects 
 averaged about $5.37 per room per month, with an additional cost for 
 utility services of $1.83 per room per month, or a total of $7.20. The 
 average income of families occupying the dwellings ranged from $765 
 to $1,107 a year. The capital costs of projects ranged from $946 per 
 room to more than $1,261 per room. Approximately two-fifths of the 
 rental charge on one project was due to capital costs and the remaining 
 three-fifths to operating costs. This is believed to be a typical distribution. 
 From these data it would appear that the P.W.A. was able to provide 
 housing for families of low income, but only as a result of a subsidy 
 equal to about one-half of the project costs. 
 
 Jurisdiction and Taxation. — A major problem soon arose in connec- 
 tion with the prospective operation of these housing projects by the gov- 
 ernment. At least one municipality announced that it would refuse to 
 supply the projects and tenants with governmental services, such as police 
 and fire protection. This stand was based upon the costs of such services 
 and upon the belief that, as federal property, the projects were not sub- 
 ject to taxation by the states or their subdivisions, except with the consent 
 
 "•For the typical regulations governing the selection of tenants, and for other data, see 
 the Hearings before a Subcommittee of the House Committee on Ways and Means on H. R. 
 1055 1, H. R. 10554, and S. 3247, Service Charges on Federal Slum Clearance Projects, 74th 
 Congress, 2d Session, pp. 61 ff. 
 
 91 See P.W.A. Press Release No. 3198 and the Senate Hearings on S. 1685, op. cit., pp. 
 
 33 ff- 
 
134 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 of the national government. This opinion was justified, since the im- 
 munity of national agencies from state taxation was established as early 
 as 1819. 92 Nor is there any exception from the general rule of immunity 
 with respect to such agencies of the national government as are engaged 
 in proprietary rather than governmental functions. Indeed, it has been 
 argued that all agencies created by the national government which have 
 a legitimate basis for existence serve as agents in the performance of 
 some power delegated by the Constitution, and hence are performing 
 functions which can only be termed governmental. 93 A more tenable 
 argument is that the principle of national supremacy takes precedence 
 over the rights of the states to maintain themselves through taxation. 
 If, however, federal enterprise of this character continues to expand, the 
 loss of revenues due to the exemption of property from state and local 
 taxation may well be considerable. 94 
 
 The P.W.A. did not actually seek complete immunity from the obli- 
 gation to contribute to the maintenance of the services of local govern- 
 ments. It early agreed to pay five per cent of the gross income on each 
 project to the local governments as a service charge in lieu of taxation. 
 Such a sum was believed to be somewhat more than the project sites 
 yielded under slum conditions, but somewhat less than would be raised 
 by a full ad valorem tax on the completed projects. The payment of 
 service charges was, however, declared by the Comptroller General to be 
 without the authority of law. He held that all monies received as rentals 
 were required to be used to retire the public debt. Furthermore, he 
 pointed to the benefits accruing to municipalities from the construction of 
 the projects, and indicated that they should be willing to supply necessary 
 governmental services without any fee. Finally, he presented the possi- 
 bility that the projects would, within a few years, be turned over to 
 private control, and thus become subject to local taxes. 95 
 
 To meet this situation, Congress passed the legislation necessary to 
 permit payments in lieu of taxes. 96 The P.W.A. was authorized to enter 
 into agreements with states and their political subdivisions for the pay- 
 ment of service charges. The act fixed no definite rule for determining 
 the amount of such payments, but did provide that the payments were 
 to be based upon the cost of public services supplied, taking into con- 
 
 K McCulloch v. Maryland, et al., 4 Wheat. 316, 4 L. ed. 579. 
 
 93 Cf. H. W. Stoke, "State Taxation and the New Federal Instrumentalities," Iowa Law 
 Rev., vol. 22 (1036-1937). P- 39- 
 
 **It might be conjectured that immunity from taxation should be granted only to such 
 clearly proprietary activities as are established with the consent of the states concerned. Cf. 
 Art. I, Section 8 of the Constitution: Congress shall have power to exercise exclusive jurisdic- 
 tion "over all Places purchased by the Consent of the Legislature of the State in which the 
 Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other 
 needful Buildings . . . . " 
 
 '"iS Comp. Gen., 295, No. A-65343 (October 10, 1935). 
 
 M 49 Stat, at L., 2025. This is the George-Healey Act, which also governed the financing 
 and renting of the projects. 
 
PROJECT AND CONSTRUCTION POLICIES 
 
 135 
 
 sicleration the benefits derived by public bodies from the construction 
 of the project. This last provision was apparently intended to impress 
 upon public bodies such benefits as the clearance of slum areas, the 
 elimination of fire hazards, and the demolition of buildings yielding little 
 in the form of taxes. As a further concession, the administrator was em- 
 powered, with the consent of the President, to dedicate streets, alleys, 
 and parks for public use, and to grant easements. 
 
 Congress also took the opportunity to guarantee the general juris- 
 diction of the states and their subdivisions. The act provided that the 
 construction of a project by a federal agency should not be held to im- 
 pair the civil or criminal jurisdiction of the states and their subdivisions 
 over the property involved, or to impair the civil rights of the tenants 
 under local law. Any jurisdiction lost prior to the enactment of the 
 statute was ceded back. 97 
 
 Disposition of P.W.A. Housing Projects. — The Public Works Ad- 
 ministration recognized at an early date that the housing projects could 
 probably be administered more effectively by local bodies, cognizant of 
 local problems. It was proposed to achieve such administration by leas- 
 ing the projects to local public bodies. The sale of projects was pre- 
 cluded by a ruling of the Attorney General that sales at less than cost 
 were not authorized, and by the fact that a sale at cost would make 
 necessary a substantial increase in the rental charges. 98 Accordingly, the 
 P.W.A. expected to lease projects in those communities where appro- 
 priate arrangements could be made, and, in other cases, to continue direct 
 operation by the national government. However, the administration of 
 the housing projects has now been transferred to the newly-created 
 United States Housing Authority. 99 Accordingly, the P.W.A. no longer 
 has a substantial direct interest in the housing activities of the national 
 government. 
 
 ^An earlier statute, passed just prior to the creation of the P.W.A., declared that the 
 commission or omission of any act upon places under federal jurisdiction, if a crime under the 
 laws of the state or territory in which the project was located, would constitute a like offense 
 against federal law, and be subject to like punishment, even if not otherwise a crime against the 
 laws of the United States. 48 Stat, at L., 152. 
 
 98 38 Op. Atty. Gen., 543 (January 13, 1937). 
 
 "Executive Order No. 7732 (October 27, 1937), 2 Fed. Reg., 2707. 
 
Chapter VI 
 
 SUMMARY AND CONCLUSIONS 
 
 It has been the purpose of this study to present an account of the 
 organization, functions, and policies of the Public Works Administra- 
 tion. It is recognized that this account has, to a large extent, been 
 descriptive rather than analytical. That may be attributed to the fact 
 that the establishment has continued to function on an emergency basis, 
 with its organization and policies colored by the fluctuations of political 
 and other exigencies. Under such circumstances, it is often difficult to 
 maintain an objective point of view and to fix standards by which to 
 judge the efficacy of the form of organization maintained and of the 
 policies adopted, much less to determine the significance of these matters 
 for the future. A further factor operating against any attempt at a 
 highly critical study has been the absence of any adequate survey of 
 the basic data upon which an analysis could be founded. 1 It is hoped that 
 the foregoing pages have to some extent met the need for such a com- 
 prehensive statement, and it is now proposed to attempt a synthesis of 
 the matters there presented, and some evaluation of the functioning of the 
 establishment with a view to possible future developments. 
 
 The Objectives of the P.W.A. 
 Public works construction financed by the government has long been 
 offered as a palliative, if not a panacea, for the economic ills of a nation. 
 It has been argued by many persons that governmental bodies should 
 retard their construction activities in times of relative prosperity, and 
 expedite construction with the onset of depression conditions, thus help- 
 ing to avoid extreme fluctuations in business activity. While some efforts 
 to adopt such a policy are reflected in the Congressional debates, and 
 even in the statutes, the business depression of the nineteen-thirties 
 found the national government largely unprepared to carry on a planned 
 program of public works. It was, however, soon decided to undertake 
 such a program on an emergency basis. The motivating factor seems to 
 have been the feeling that work relief possesses distinct social advantages 
 over direct relief, and that it might be possible to regenerate private 
 enterprise by creating a demand for construction materials and for the 
 
 'It may be recalled that the P.W.A. has issued no periodic reports and that, in the 
 absence of such reviews, the writer has had to rely largely upon data gleaned from the hearings 
 before committees of Congress and upon the administrative orders and other regulations issued 
 by the establishment. These he has supplemented by personal interviews and correspondence, as 
 well as by references to unofficial materials. Among the latter, he has found the following 
 three items to be most useful: H. L. Ickes, Back to Work (1935); A. D. Gayer, Public Works 
 in Prosperity and Depression (1935); and P. V. Betters et al., Recent Federal-City Relations 
 (1936). 
 
 I36 
 
SUMMARY AND CONCLUSIONS 
 
 137 
 
 services of many classes of labor. There were also some who thought 
 that large government expenditures might have a rerlationary effect, and 
 would forestall demands for radical changes in the monetary system. 
 
 The creation of the Reconstruction Finance Corporation during 1932 
 marked the beginning of the emergency works program. Although the 
 national government accepted responsibility for some efforts to combat 
 depression problems, it did not assume sole responsibility. The corpora- 
 tion was to function largely by making loans to private agencies for 
 the construction of self-liquidating projects and loans to the states for 
 relief purposes and for the construction of public works. The corpora- 
 tion was also authorized to make loans to various business enterprises for 
 non-construction activities. During 1933, the national government under- 
 took to finance a large part of the relief activities formerly cared for by 
 the states, and created the Federal Emergency Relief Administration. 
 Various other agencies were also brought into being to administer a 
 threefold program of relief, recovery, and reform. Among these, this 
 study has been concerned only with the Federal Emergency Adminis- 
 tration of Public Works, commonly referred to as the Public Works 
 Administration. 
 
 In accordance with the provisions of the National Industrial Re- 
 covery Act, under which this establishment was created, the P.W.A. 
 undertook the preparation of a comprehensive program of public works, 
 and the financing of an immediate program of construction and related 
 activities. The question naturally arises as to the ultimate objectives 
 which it was hoped to achieve. By June, 1933, when the establishment 
 was organized, the depression had already been in existence for several 
 years, and, obviously, the P.W.A. could not hope entirely to eliminate 
 the consequences of that condition. Furthermore, the exportation of gold 
 had already been forbidden and devaluation of the dollar was in sight. 
 It may, therefore, be doubted whether the P.W.A. was expected to solve 
 the monetary problem. Similarly, the creation of the Federal Emergency 
 Relief Administration would seem to be ample evidence that the P.W.A. 
 was not expected to solve the entire unemployment problem. It would, 
 accordingly, appear that the objectives of P.W.A. activity can be listed 
 as: (1) preparing a public works program to be undertaken in the event 
 of future necessity; (2) providing employment for workers in the build- 
 ing trades and in the industries supplying construction materials ; and 
 (3) "priming the pump" of industry by placing large sums of money in 
 circulation and by creating a demand for construction materials. Each 
 of these may be touched upon briefly. 
 
 The comprehensive program of public works, provided for in the 
 National Industrial Recovery Act, has not yet made its appearance. Nor 
 
138 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 is it likely to appear in the immediate future, since the P.W.A. has ceased 
 to be a planning agency. One must, therefore, look to other agencies, 
 such as the National Resources Committee, for the formulation of a 
 comprehensive program for the future. It is possible, however, that, 
 if a new construction program is commenced in the near future, a reser- 
 voir of work may be found in the applications already on file with the 
 P.W.A. Furthermore, the projects division of the P.W.A., acting for the 
 National Resources Committee, asked the construction agencies of the 
 national government to revise their six-year construction programs. 2 This 
 had the effect of continuing the planning activities of the former Federal 
 Employment Stabilization Board. 
 
 There has been no attempt in this study to measure the amount of 
 employment created by the P.W.A., nor to analyze the costs involved. 
 It may be pointed out, however, that in comparing these costs with those 
 of the Works Progress Administration one must first take into account 
 the fact that the costs per man year on P.W.A. projects are divided 
 between the national and local governments in about equal proportions, 
 while the cost on W.P.A. projects are defrayed almost entirely out of 
 the national treasury. Furthermore, the P.W.A. reasons that three 
 factors should be taken into account in measuring the amount of employ- 
 ment created. These are: on-site employment; primary indirect employ- 
 ment in industries supplying and transporting materials, which is believed 
 to be about two and one-half times as large as the amount of on-site em- 
 ployment created ; and, third, secondary indirect employment, which is 
 created in those industries supplying workers on projects and in factories 
 with their living needs. This secondary indirect employment is believed 
 to be twice as large as the on-site employment. Thus, the amount of on- 
 site labor must be multiplied by five and one-half in order to arrive at 
 what the P.W.A. considers to be the true employment which it has 
 created. 3 Since work-relief agencies do not create a substantial amount 
 of indirect employment, because of the low wage rates paid and the use 
 of but a limited amount of materials, the figures of such agencies as the 
 W.P.A. are likely to take into account only on-site employment. 
 
 The regeneration of private business, which, it was hoped, would 
 result from the activities of the P.W.A., is difficult to isolate. Certainly, 
 however, the large governmental expenditures in the past few years have 
 had a pump-priming effect. The indirect employment created by ex- 
 penditures on P.W.A. projects has played its part in bringing about an 
 increased purchasing power and in creating an effective demand for con- 
 sumers' goods. Title One of the Recovery Act, which provided for the 
 
 'National Resources Committee, Public Works Planning (1936), p. 19. 
 3 Cf. P.W.A., Aids to Education (1937). P- 17. 
 
SUMMARY AND CONCLUSIONS 
 
 139 
 
 adoption of codes of fair competition, was expected substantially to in- 
 crease these secondary effects. That is, the code regulations limiting the 
 hours of labor and providing for minimum wages were expected to cause 
 each dollar expended on public works to have a maximum effect on in- 
 direct employment, just as the hour and wage regulations of the P.W.A. 
 would cause on-site employment to be widely distributed. This cycle was, 
 at least to some extent, prevented by the fact that the codes were not 
 overly successful as recovery measures, and were finally abandoned fol- 
 lowing an unfavorable decision by the Supreme Court on May 27, 1935. 
 
 The Public Works Administration was not directly affected by the 
 dismantling of the National Recovery Administration, and continued to 
 function. Like its companion, the P.W.A. had originally been established 
 for a two-year period, but its lease on life had already been renewed 
 by the Emergency Relief Appropriation Act of 1935. 4 It was under 
 the authority of this statute that the President created the Works 
 Progress Administration. That agency, not specifically provided for 
 in the statute, did not assume powers of direct supervision over the 
 P.W.A. The Works Progress Administration did, however, become 
 a general coordinating agency for the work-relief activities of the national 
 government, and itself undertook to finance many small projects requir- 
 ing the use of a maximum of unskilled labor, the type of labor which pre- 
 dominated on the public relief rolls. The P.W.A. continued to finance 
 larger projects on which skilled labor is generally necessary. 
 
 Structure of the Establishment 
 
 The National Industrial Recovery Act specifically authorized the 
 President to create the P.W.A. and provided for an administrator 
 thereof, but otherwise was silent as to the structure of the establishment. 
 The action of Congress in omitting to detail the internal organiza- 
 tion of the P.W.A. is easily justified. Even in permanent agencies, 
 changes in the form of organization frequently become necessary, and 
 the making of such changes is facilitated by the absence of statutory 
 restrictions. In the case of an emergency agency, it would seem proper 
 to allow the chief executive the widest possible measure of discretion, 
 in order that he may adapt the organization to such conditions as may 
 arise. Similarly, the decision to vest the powers of the establishment in 
 a single administrator was undoubtedly caused by the desire to avoid the 
 delays incident to management by a multiple executive. Had a board 
 or commission been created by Congress, there would probably have 
 been slower progress, consequent upon deliberations and conferences 
 
 4 49 Stat, at L., 115. 
 
140 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 between the members. Such halting progress, at a time when a large 
 measure of speed was deemed necessary, might well have resulted in con- 
 siderable criticism. 
 
 There has been no change in the position of the head of the P.W.A 
 since a temporary administrator, Colonel Donald H. Sawyer, who served 
 for less than a month, was replaced with Harold L. Ickes. Mr. Ickes had 
 previously been appointed Secretary of the Interior, and in that capacity 
 served as chairman of the Special Board for Public Works, which had 
 been created to serve in an advisory capacity when the temporary ad- 
 ministrator was appointed. The board was largely composed of cabinet 
 members and it appears that these were chiefly concerned with their own 
 departmental affairs. While the board may have served a useful purpose 
 in the early formulation of policies, it soon became little more than a 
 rubber stamp for the wishes of the administrator. Instead of creating 
 some other advisory group, the President and administrator simply 
 allowed the board to cease to function. 
 
 Certain establishments were, however, created from time to time to 
 coordinate the activities of the various agencies engaged in administering 
 the recovery program. These included the Executive Council, which 
 was first supplemented by, and later consolidated with, the National 
 Emergency Council. During 1935, as has already been noticed, the Works 
 Progress Administration was established and also two other agencies, 
 the Division of Applications and Information of the Emergency Council 
 and the Advisory Committee on Allotments. Administrator Ickes was 
 designated chairman of the last-named group in his capacity as Secretary 
 of the Interior. W'hile these agencies served a useful purpose as general 
 coordinating bodies, they did not meet the need for some advisory body 
 within the P.W.A. itself. It is to be regretted that representatives of the 
 general public were not given a more prominent part in the formulation 
 of policies, especially as the enactments of Congress left much to admin- 
 istrative discretion, and since the program of the P.W.A. was largely a 
 new venture for the national government. 
 
 The internal organization of the P.W.A. was, during the first two 
 years, marked by an extreme concentration of power at Washington, a 
 situation considered necessary in order to permit a coordinated develop- 
 ment of policies and a uniform training of employees. The concentration 
 of power was most noticeable in the examination of applications for 
 funds, since the supervision of construction of necessity required that 
 much power be vested in the field force. The delays incident to frequent 
 correspondence between Washington and the field offices on even minor 
 matters, and the resulting congestion at the central office, caused the 
 adoption of a less centralized scheme of organization when the oppor- 
 
SUMMARY AND CONCLUSIONS 
 
 141 
 
 tunity appeared. This occurred during 1935, when the original fund 
 had largely been allocated, and when applications under the Emergency 
 Relief Appropriation Act were just beginning to be made. The change 
 was now feasible because the basic policies remained the same, and be- 
 cause an adequate staff of employees had been recruited and trained 
 in the establishment's procedures. Although termed a decentralization, 
 the transition was not marked by a complete dispersion of central control. 
 The power to make the final decision as to applications and to formulate 
 policies remained at Washington, but a large number of employees, to- 
 gether with their functions, were transferred to the field. 
 
 The field organization of the P.W.A. presented two unusual features 
 until a reorganization was effected late in 1937. In the first place, two 
 independent field organizations were maintained in each state: the office 
 of the state director, chiefly concerned with the examination of applica- 
 tions for funds, and the office of the state engineer inspector, concerned 
 with the supervision of construction. In the second place, the office of the 
 state director was so organized that that official had only a limited 
 amount of control over his subordinates, who were responsible directly 
 to division chiefs at Washington. Although both of these features 
 are unusual, no cause for substantial criticism has been found, and such 
 criticism would now no longer be pertinent, since the two offices have 
 ceased to exist. 
 
 The field organization of the P.W.A. is at present composed of 
 groups of states, each under a regional director. This scheme of organi- 
 zation was adopted in order to hold administrative expenses to a minimum 
 pending the liquidation of the establishment. Prior to 1937, regional offices 
 had not been used to any appreciable extent, and, even when utilized, 
 served largely as convenient bases from which certain of the establish- 
 ment's agents operated, rather than as centers of administrative activity. 
 The individual states were used as administrative units because of need 
 for paying considerable attention to the legal powers of public bodies 
 applying for funds. Such matters are fairly uniform within each state, 
 but would vary greatly as between the states. In a few instances, however, 
 one state director or state engineer inspector served two or more of the 
 smaller states. 
 
 Personnel 
 
 The National Industrial Recovery Act exempted the employees of 
 the P.W.A. from both the civil service and the classification acts. This 
 action was apparently motivated by the desire to expedite the recruitment 
 of the necessary force and by the belief that these employees would be 
 retained only for a short period of years. One need not quarrel with the 
 
142 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 exemption from the merit system, since many difficulties would be en- 
 countered in applying competitive examinations to temporary employees, 
 chietiy because of the delays and expense incident thereto. At most, 
 it might be argued that some sort of a pass examination should have 
 been given. The writer does, however, believe that some informal use 
 might have been made of the existing eligible lists of the Civil Service 
 Commission. It would almost certainly have been possible to find on such 
 eligible lists a large number of qualified persons who would have been 
 willing to accept a temporary appointment, and other applicants for em- 
 ployment might have been required to clear through the commission. 5 
 Had this been done, at least a superficial examination of their quali- 
 fications would have been made by an independent agency possessing 
 experience in the problems of recruitment. Such a system of temporary 
 appointments would have occupied a position intermediate between a 
 complete application of the merit system and its entire waiver. In actual 
 practice, all appointments to the P.W.A. have been made from the 
 central office and under the personal direction of the administrator. While 
 personnel officers have been maintained, no formal system of recruitment 
 by examination has been evolved. Nevertheless, it appears that the 
 establishment has been able to recruit an efficient force, and has main- 
 tained a marked degree of freedom from partisan political pressures. 6 
 The setting aside of the classification act cannot, however, be so readily 
 justified, and it may be argued that the principle of classification should 
 be maintained in all governmental agencies, whether temporary or per- 
 manent. The present statute, which applies almost exclusively to em- 
 ployees in the District of Columbia, 7 requires that positions be grouped 
 into classes according to the duties performed and fixes the salary ranges 
 for these classes. Since the act does not apply to the Public Works 
 Administration, and since there have been no specific appropriations for 
 personal services, the administrator was free not only to employ such 
 persons as he saw fit, but to fix their salaries at any level he chose. 
 His power actually to do so was, however, soon restricted by a series 
 of executive orders applying to substantially all emergency agencies 
 
 5 The Agricultural Adjustment Administration did make extensive use of the facilities of 
 the Civil Service Commission, although it was not required to do so prior to 1934. The Civil 
 Service Commission detailed a recruiting and liaison officer to assist the A.A.A., and the office 
 of chief examiner of the commission circularized the registers of eligibles and other qualified 
 persons who might be available. Those who were willing to accept a temporary appointment 
 were given clearance with letters stating eligibility for appointment. They were then given an 
 interview by the commission's liaison officer who was located with the A. A. A. Hearing before 
 the Subcommittee of the House Committee on Appropriations in Charge of Deficiency Appropria- 
 tions, First Deficiency Appropriation Bill for 1936, 74th Congress, 2d Session, Part L p. 1254. 
 
 6 Since 1935. the consent of the Senate has been necessary to the appointment of state or 
 regional administrators receiving a salary of $5,000 per annum or more, unless already serving 
 under an earlier law or paid from an earlier appropriation. While the practice of Senatorial 
 courtesy exists with respect to these appointments, the writer is informed that the administrator 
 has avoided possible deleterious effects by paying a lesser salary in those cases where the appoint- 
 ment of a strong partisan might otherwise have been expected to result. 
 
 'There is, however, a separate classification plan in force for the postal service. 
 
SUMMARY AND CONCLUSIONS 
 
 143 
 
 and installing a modified salary-standardization plan not greatly different 
 from that provided for in the classification act as amended. This, it 
 appears, was done in order to avoid the payment of high salaries in 
 some agencies and the consequent turnover of employees in the regular 
 government services and in those emergency agencies paying lower 
 wages. The writer has been unable to determine whether the P.W.A. 
 was responsible for the excessive turnover of employees, or whether 
 it suffered from any higher salaries being paid in other agencies. Never- 
 theless, the fact that the President soon found it necessary to take 
 measures calculated to effect a general standardization of salaries would 
 seem to be ample evidence that the classification act serves a useful 
 purpose, and that it should not be set aside even for emergency agencies. 
 
 The Nature of P.W.A. Activity 
 
 The Public Works Administration has not been a construction agency, 
 although it might have become one under the provisions of the Recovery 
 Act. The only projects which the establishment has itself sponsored 
 involved low-rental housing, and even these were generally constructed 
 under contract. 8 The P.W.A. has functioned chiefly by making allotments 
 to agencies of the national government, grants and loans to the states 
 and other public bodies, and loans to certain private corporations, chiefly 
 railroad companies. Since 1935, the P.W.A. has been engaged primarily 
 in making loans and grants to non- federal public bodies. Loans to 
 private corporations were discontinued early in 1934 and allotments to 
 other agencies of the national government were, in general, discontinued 
 during 1935. By the end of 1937, the P.W.A. had expended a total of 
 $2,750,000,000 on projects financed by it, exclusive of allotments directed 
 by statute and funds impounded and used for relief purposes. 9 
 
 It must be obvious that the entire program of the P.W.A. represents 
 an effort to increase government borrowing and spending at a time 
 when they would normally be decreased. Retrenchment in expenditures 
 has generally been the keynote, both in public and in private business, 
 during times of economic depressions. The radical change in policy was 
 deemed to be more in accordance with modern conditions, and necessary 
 if extreme fluctuations in business conditions were to be avoided. It 
 would, therefore, be a material contribution if it were possible to say 
 that the experiment had been tried and found to be sound, or even that 
 it had been attempted and shown to be unsound. This however, cannot 
 
 'With the major exception of certain housing projects in the territories. Cf. P.W.A. Press 
 Release No. 3214. 
 
 9 See chap, iv, supra. In response to an inquiry, the writer was informed that the P.W.A. 
 does not maintain a list of non-federal allotments distributed according to the type of applicant, 
 nor has he been in a position to compile such data. It is not possible, therefore, to indicate the 
 division of the allotments between states, counties, municipalities, etc. 
 
144 
 
 THi; PUBLIC WORKS ADMINISTRATION 
 
 be done. While it is impossible to say just how large a sum should have 
 been expended in order to give the experiment a sufficiently wide scope, 
 it seems that an expenditure of less than $3,000,000,000 over a period 
 of four and one-half years cannot have been adequate. This conclusion 
 is based upon estimates of the volume of public and private construction 
 in the years immediately preceding the creation of the P.W.A. It is 
 indicated that the total volume of construction, public and private, de- 
 creased from about $13,000,000,000 in 1928 to $4,000,000,000 in 1932; 
 with the volume of public construction being $3,600,000,000 and 
 $2,000,000,000 respectively. 10 While many other factors must be taken 
 into account if any definite conclusion is to be reached, one can at least say 
 that it has not been demonstrated that the actual expenditures by the 
 P.W.A. were large enough even to justify the expectation that they 
 would counteract the forces of a business depression in any marked 
 degree. The question whether or not it is possible to regenerate private 
 enterprise through governmental expenditures on public works therefore 
 remains unanswered. 
 
 If one were to attempt a definitive appraisal of the public works pro- 
 gram it would be necessary to make a detailed analysis of the projects 
 that were financed. Only in that manner could it be determined whether 
 the construction would have been undertaken even in the absence of any 
 federal grants and loans. The fundamental thesis of the works program 
 is the claim that it is possible to expedite construction during the period 
 of a business depression, not that it is possible to finance ordinary 
 maintenance, repairs, and extensions as emergency public works. The 
 P.W.A. did not generally make allotments for maintenance and repairs, 
 but it is doubtful whether allotments have been confined exclusively 
 to construction projects that would not otherwise have been undertaken. 
 
 The objectives of the P.W.A. have already been summarized in 
 such fashion as to emphasize the fact that the establishment was created 
 as a pump-priming rather than a work-relief agency. For that reason, 
 if for no other, an economic analysis of the public works program would 
 require a careful examination of the ratios, noticed above, which are 
 claimed to exist between on-site and indirect labor. Even then, however, 
 it would be exceedingly difficult to assign to this employment any 
 definite weight as a factor contributing to the general revival of 
 employment. 
 
 Similarly, it would be difficult to determine just what effect the 
 conditions under which construction was carried on had upon the 
 amount of employment that was created. This results from the fact 
 that the P.W.A. financed a public works program, and not ordinary 
 
 10 Gayer, op. cit., p. 62. For P.W.A. expenditures see p. 79, supra. 
 
SUMMARY AND CONCLUSIONS 
 
 145 
 
 work relief. Most of the construction financed by the establishment has 
 been done under contract ; few opportunities for employment have been 
 available to white-collar workers ; laborers have, with some considerable 
 exceptions, been recruited without reference to their presence on public 
 relief rolls ; and the wages paid have been at least equal to those paid 
 in private industry. In addition, various standards have been required 
 that have added appreciably to the expenses of construction. These 
 include limitations on the maximum working week, prohibitions on the 
 use of child labor, and guarantees of collective bargaining. While it may 
 not be in order to raise the question as to whether or not too much 
 was attempted, it must be recognized that these requirements may well 
 have made the expenditures per man year considerably higher than 
 would otherwise have been the case. 
 
 This study has not been directly concerned with economic or statis- 
 tical data, but the facts are of interest even to the student of administra- 
 tion. They explain why the P.W.A. has not fared any too well in recent 
 allocations of federal funds. The establishment has not been in a position 
 to demonstrate its employment-creating possibilities in any clear manner, 
 and has come to be regarded as being of chief service in bringing about 
 an increase in the consumption of durable goods, and a resulting increase 
 in the price of such commodities. When that service was no longer 
 deemed necessary, the establishment itself came to be regarded as having 
 outlived its usefulness. 
 
 These difficulties in the way of any evaluation of the functioning of 
 the P.W.A. are only increased by the frequent changes in national 
 policy and by the fact that the activities of the establishment have been 
 hampered by litigation. Some of the fluctuations in national policy 
 appear to have been due only to uncertainty as to what constituted the 
 wisest course, while others reflect definite changes in tactics, but all 
 have had their effect upon the construction policies of the establishment. 
 So much has this been the case, that there have been two instances 
 when the P.W.A. appeared about to become a work-relief agency, with 
 the labor on projects being recruited from the public relief rolls. In view 
 of the fact that the system of loans and grants was built up on a contrary 
 basis, many administrative problems arose, and it is understood that 
 many public bodies relinquished or refused their allotments because 
 of the increased costs and the danger of defective construction incident 
 to the use of inefficient relief labor. Even today, it still seems to be 
 the desire of the President that relief labor be used to the maximum 
 extent possible. The impact of litigation upon the functioning of the 
 establishment has been less serious, but it did have the effect of curtailing 
 the slum clearance program of the P.W.A. and temporarily halting the 
 
146 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 power program. In short, it may be concluded that the P.W.A. has 
 suffered from inherent difficulties in demonstrating the efficiency of its 
 program as an anti-depression measure, from the inconsistencies of 
 national policy, and from certain legal and constitutional problems. 11 
 
 Intergovernmental Cooperation 
 
 In administering its functions, the Public Works Administration has 
 at many points been brought into direct contact both with the individual 
 states and their subdivisions. The administration of the public works 
 program has emphasized such relationships as did exist and has brought 
 about many new interrelationships. The system of federal grants-in-aid 
 has been so expanded that the national government is extending not 
 only outright grants but also loans, and these to the subdivisions of the 
 states as well as to the states themselves. Yet, under our federal system, 
 the national government has no direct power of control over these 
 political bodies. 
 
 The states and their subdivisions were also attempting an experiment 
 when, encouraged by offers of federal funds, they sought to increase 
 expenditures during the existence of a depression. They, however, are 
 subject to the provisions of their own constitutions and charters. These 
 do not permit the various legislative bodies as large a measure of dis- 
 cretion as is available to Congress. There are many limitations on the 
 purposes for which public funds may be expended, and also on the 
 procedures to be followed. The Recovery Act authorized the President, 
 and he in turn authorized the administrator, to ignore constitutional and 
 legal limitations upon the powers of public bodies to borrow money or 
 to incur indebtedness. Yet the act also required that any loan made by the 
 United States be reasonably secured. In actual practice, it appears that 
 few loans of doubtful validity were made, and that the establishment 
 has been insistent upon both the financial and legal soundness of all 
 loans. This action would seem to be justified, since it can hardly be 
 termed a sound public policy for the national government to encourage the 
 states and their subdivisions to disregard willfully the limitations upon 
 their powers. 
 
 The various non-federal bodies have, nevertheless, thus been unable 
 to obtain loans that were illegal under their own laws, and yet were 
 expected to finance a major part of the cost of construction from their 
 own resources, either from current revenues or through the use of their 
 credit. In many cases, this meant that the project had either to be 
 abandoned or else delayed until the necessary permissive legislation 
 could be enacted. Obviously, this constituted a very real barrier to the 
 
 "These problems receive some attention in chap, v, supra. 
 
SUMMARY AND CONCLUSIONS 
 
 147 
 
 efforts of the P.W.A. to get construction under way with dispatch. 
 There were also some public bodies which were not in a position to 
 finance any substantial part of the costs of projects, because of their 
 straitened financial circumstances. One is led to the conclusion that it 
 was very likely to be these communities unable to benefit from P.W.A. 
 funds in which unemployment was most widespread. A possible solution 
 might be the adoption of an elastic system of grants, with the amount 
 of the grant to be larger than is normally the case wherever necessary in 
 order that construction might be undertaken at all. Such a solution 
 would, however, be open to attack as likely to result in insistent demands 
 from all communities for the maximum grant permitted, and as dis- 
 criminating against those communities that had maintained a sound 
 financial position. 
 
 The difficulties arising out of such situations, and the lack of an 
 adequate solution, will confront any public works program in the future. 
 That is, unless the national government is willing to finance the entire 
 cost of construction in such cases, or to accept rather nominal payments 
 by the local community. That has been true with respect to the Works 
 Progress Administration, but not the P.W.A. So far as the latter 
 establishment has met this situation, it has done so by securing the 
 creation of special districts and of special revenue funds. Where the 
 former alternative was adopted, the special district either was given no 
 taxing power, or has tax and debt limitations independent of other 
 political subdivisions whose areas overlap or coincide with those of the 
 special district. Where the special district was given no taxing power, 
 or where a revenue fund was created, the loan from the national govern- 
 ment is subject to repayment only from the revenues of the enterprise. 
 It would seem to be clear that neither solution would serve in the case of 
 projects that produce no revenue, except in those cases where a special 
 district has its own tax and debt limitations. 
 
 In other respects, too, the Public Works Administration has had 
 some effect on the statute books of the states. A great mass of proposed 
 legislation in aid of the works program was drafted at Washington and 
 introduced in the several state legislatures. The nature of this process 
 of federal sponsorship of state legislation is noticed in this study to 
 some extent, and has been treated by other writers, but no general con- 
 clusions can be formulated. This is due to the general absence of 
 model laws, and to the consequent difficulty in determining which laws 
 were proposed, passed, and defeated in each of the forty-eight states. 
 
 An exhaustive listing of the ways in which non-federal public bodies 
 have benefited from the activities of the P.W.A. would be almost 
 impossible to present, but some of the more tangible effects may be 
 
148 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 noticed. They were not only given outright grants of federal money, 
 but also loans on very favorable terms. The P.W.A. bid par on all 
 bonds bearing four per cent interest, at a time when the private market 
 for public obligations was greatly depressed. In addition, the standards 
 of design enforced by the P.W.A. were probably higher than those to 
 which many public bodies had been accustomed. The careful supervision 
 of construction insisted upon by the P.W.A. has also probably resulted 
 in closer compliance with specifications than would otherwise have 
 been the case. In return for these benefits, the government demanded 
 compliance with the labor and material policies which it laid down, 
 and adequate protection for any loans that were made. No general 
 control is maintained over completed projects. 
 
 Direct Federal Action 
 
 A considerable portion of the sums allotted by the P.W.A. have been 
 expended on projects sponsored by other agencies of the national 
 government. These allotments to federal agencies provided a means of 
 getting the works program under way pending the time when non-federal 
 applications in a large number, and of a suitable character, could be 
 considered and acted upon. Many agencies of the national government 
 had prepared advance plans of their construction needs, and thus were in 
 a position to undertake construction promptly and, since they assumed 
 no obligation for the repayment of the allotment, were quite willing to 
 receive funds from the P.W.A. 
 
 Various grounds may be stated in criticism of the practice of allocating 
 funds to one federal agency to be allotted to another. It is possible that 
 projects previously denied appropriations by Congress will be undertaken, 
 while others that have been tentatively approved will not. Then, too, when 
 Congress makes an appropriation, it apparently does so on the theory 
 that the amount provided is adequate, which should preclude the pos- 
 sibility of additional allotments from other sources. Furthermore, there 
 is the danger that an allotment may be made which is inadequate for 
 the completion of the project, and Congress may thus be placed in a 
 position where it seems to be committed to an additional appropriation. 
 These objections, and the general desirability of maintaining effective 
 legislative control over appropriations, support the view that the practice 
 of appropriating funds to a particular agency or to the President for 
 distribution among other agencies is unsound. It would seem that 
 sufficient elasticity to meet changing conditions could be had through 
 lump-sum appropriations to particular government departments and 
 offices. The purposes for which the appropriations could be expended 
 might be detailed in whatever manner seems desirable. 
 
SUMMARY AND CONCLUSIONS 
 
 149 
 
 On the whole, however, it is believed that the public works program 
 would have suffered had not some provision been made for direct action 
 by the national government. If the past few years have demonstrated 
 anything, it has been that the national government is capable of vastly 
 increasing its expenditures to meet emergency conditions, while the 
 state and local governments probably cannot do so to the same degree 
 and even encounter delays in spending money made available by the 
 national government. If a public works program is adopted in future 
 business crises, it would, therefore, seem desirable not to overlook the 
 possibilities of construction by the national government. All the more 
 so, if it again seems that the states and their subdivisions are not pre- 
 pared to take immediate advantage of such sums as may be made 
 available to them. The greatest danger in direct federal action is that 
 projects of doubtful utility may be undertaken. Every precaution 
 would have to be taken to assure the prevention of logrolling and the 
 absence of the pork barrel. In the case of federal projects financed by 
 the P.W.A., these evils have apparently been avoided. 
 
 The Housing Program 
 
 The Public Works Administration itself sponsored the construction 
 of low-rental housing and, to some extent, the elimination of slum 
 conditions. There is ample evidence that these measures, which were 
 originally undertaken to increase employment and to stimulate industry, 
 have already developed into a long-range, low-rental housing program 
 as a contribution to the social welfare of the low-income groups of 
 the population. Future developments rest in the hands of the United 
 States Housing Authority, created by statute, 12 which has taken over 
 the projects constructed by the P.W.A., and which is authorized to make 
 loans and grants to public bodies. This summary is concerned only with 
 the activities of the P.W.A., which, however, is no longer directly 
 concerned with housing activities. 
 
 In a report prepared for the National Association of Housing 
 Officials, a careful study was made of housing in the United States, 
 apparently with particular reference to the activities of the Public 
 Works Administration. 13 The conclusion reached was that private en- 
 terprise could not function effectively in carrying out three objectives: 
 providing adequate dwellings for the lower income groups, enforcing 
 adequate standards of repair and maintenance of houses held by different 
 owners, and clearing substandard or slum areas if no immediate demand 
 existed for other more remunerative uses for the sites. It was thought 
 
 "50 Stat, at L., 772. 
 
 ia Public Administration Service, A Housing Program for the United States (1935), 
 Publication No. 48. 
 
THE PUBLIC WORKS ADMINISTRATION 
 
 that public housing if confined to these purposes would not compete 
 with private enterprise, and that, in addition, the government might 
 properly undertake housing construction in order to relieve unemploy- 
 ment and stimulate industry, to carry on emergency work under experi- 
 mental conditions, to sponsor a demonstration program intended to show 
 how the work might be done even by private enterprise, or, finally, in 
 order to care for the special problem of housing negroes and other 
 racial groups to whom private enterprise did not cater. 
 
 If these demarcations of the proper field of public enterprise are 
 accepted, then it must be conceded that the P.W.A. did not invade the 
 field reserved to private capital. The program of that establishment was 
 confined to fifty-one projects, and thus remained on what may be con- 
 sidered to be a demonstrative plane. Twenty-seven of the projects 
 involved slum clearance, a factor accounting in part for the high costs 
 and one which would deter private capital from a similar course of 
 action. Nor was the problem of housing special population groups 
 neglected ; seventeen projects were designed exclusively for negro oc- 
 cupancy, six partly so, and three for native residents of our territorial 
 possessions. Furthermore, the entire program was undertaken as part 
 of an attempt to stimulate employment during the period of a business 
 depression. Final evidence of the lack of competition with private 
 enterprise may be found in the fact that living quarters in the projects 
 were definitely reserved for families of low income, and that, in order 
 to serve such groups, it was necessary to write off forty-five per cent 
 of the costs and to urge the states to grant a further subsidy in the form 
 of tax exemption. 14 
 
 The housing activities of the national government may well have 
 a considerable significance for the future. If a general works program 
 similar to that of the P.W.A. is inaugurated in future business 
 depressions, there will certainly be a substantial demand that a large 
 part of the funds be expended on the construction of low-rental housing. 
 That would have, as one of its by-products, the great advantage of con- 
 tributing to the solution of two major problems — those relating to 
 unemployment and to the environment of the moderately poor. It is 
 noteworthy, also, that the leadership in seeking to provide adequate 
 housing for low-income groups has been taken by the national govern- 
 ment, and not the states. We are led to suppose that one of the great 
 advantages of our federal system lies in the possibility that the individual 
 states will conduct experiments in the solution of economic and political 
 problems, without serious risk to the remainder of the nation. Yet the 
 
 "For details as to the projects, see: Hearings before the Senate Committee on Education 
 and Labor on S. 1685, To Create a United States Housing Authority, 75th Congress, 1st Session, 
 pp. 26-27. 
 
SUMMARY AND CONCLUSIONS 
 
 experiment in this case was begun on a nation-wide and not a state-wide 
 basis. 
 
 The Future of the P.W.A. 
 
 Those who are intimately concerned with the administration of 
 governmental functions are prone to urge an expansion of the establish- 
 ment with which they are connected, or at least its continuation without 
 substantial modification. Such persons are often able to present an 
 impressive mass of arguments to support their position, but these are 
 likely to be colored by the place which the agency occupies in their en- 
 vironment and ideals. Similarly, those who write concerning a particular 
 establishment must avoid subjective influences; one must not allow a 
 preference for writing in the present tense to influence his better judg- 
 ment, nor permit himself to become unduly imbued with the belief that 
 the establishment is serving a non-essential purpose. In view of these 
 dangers, and the lack of an adequate economic analysis of the functioning 
 of the P.W.A., the present writer is not in a position either to consign 
 the establishment to an early death or to suggest its continued existence. 
 Nevertheless, it seems desirable to attempt a brief statement of what 
 the immediate future is likely to bring. 
 
 The life of the Public Works Administration is, under present 
 statutes, continued until June 30, 1941, and the functioning of the agency 
 is similarly limited. This, however, obscures the fact that applications 
 for allotments are no longer being received and that, but for the 1938 
 program, allotments would no longer be made. The continuation of 
 the P.W.A. under such conditions could have little effect on the creation 
 of employment or the regeneration of industry. Why, then, did Congress 
 extend the life of the establishment? The chief reason for the Public 
 Works Administration Extension Act of 1937 15 was the fact that many 
 of the projects financed by the P.W.A. had not been completed, and the 
 funds allotted for these projects had not, therefore, been expended. 
 The evidence that this was the determining consideration may be found 
 in the provisions prohibiting the receiving of further applications and 
 in the failure of Congress to increase substantially the funds available 
 to the P.W.A. 
 
 The National Industrial Recovery Act, while it required that the 
 P.W.A. cease to exist two years after the date of the enactment of the 
 statute, fixed no time limit within which projects were to be completed, 
 and specifically allowed the issuance of funds until January 23, 1939, 
 on commitments made prior to the expiration of the power to make new 
 allotments. 16 Congress provided that the functions of the P.W.A. with 
 
 "50 Stat, at L., 357. 
 
 w Ibid., vol. 48, pp. 195, 200, section 201. 
 
152 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 respect to the issuance of funds and the supervision of construction 
 should be carried to completion, after 1935, by such agencies as the 
 President might designate. Later acts have extended the life of the 
 establishment until June 30, 1941. 17 These acts also provide that allot- 
 ments may now be made only for projects for which application was 
 filed prior to September 30, 1938. Furthermore, allotments under the 
 acts of 1937 and 1938 may be made only for projects which, in the deter- 
 mination of the administrator, can be commenced prior to January 1, 
 1939, and which can be substantially completed prior to June 30, 1940. 
 Even then, there is an exception in favor of projects enjoined in any 
 federal or state court. The fact that funds appropriated during 1938 are 
 available for expenditure until June 30, 1940, while funds previously 
 made available can be expended until June 30, 1941, may be thought to 
 make for an unusual situation. It is difficult to see why such a provision 
 was adopted, unless it was done because of the failure, in early allot- 
 ments, to fix deadlines for the completion of projects, so that, accordingly, 
 the allotments for some of these projects will not be exhausted for some 
 time after projects financed at a later date are completed. Indeed, some 
 projects may not be completed by June 30, 1941, but the force of any 
 argument for the continuation of the P.W.A. beyond that date is not 
 likely to depend on that circumstance. 
 
 It is a significant fact that the Public Works Administration was 
 able to go before Congress during 1937 and obtain an extension of its 
 life without, at the same time, asking or receiving any direct appropria- 
 tion, nor even a substantial increase in authorized expenditures. This 
 was done by pointing out that a large unobligated balance was still avail- 
 able, and that the functions of the P.W.A. could be continued without 
 a new appropriation. Thus it was possible to avoid the opposition of 
 those who sought a retrenchment in governmental expenditures. Further- 
 more, the plea for an extension of life was seconded by certain members 
 of Congress and by a representative of the construction industry. 18 The 
 question arises as to whether we have reached the point where govern- 
 mental spending during a business depression has created a "vested 
 interest" which must be reckoned with when the time comes to reduce 
 governmental expenditures. 
 
 Ultimately, the question of engaging in public works construction as 
 an anti-depression measure is a political problem. We can only express 
 the hope that the government of the day will follow sound advice in its 
 attempts at economic stabilization. Administrative problems will, of 
 course, be present, but they are not likely to be the determining factors. 
 
 "For legislation which was enacted in 1038, see note 81 on p. 28, supra. 
 
 "Hearings before the Subcommittee on the House Committee on Appropriations, Extension 
 
 of the Public Works Administration, 75th Congress, 1st Session, pp. 166 ff. 
 
SUMMARY AND CONCLUSIONS 
 
 153 
 
 Similarly, the judiciary may impose some constitutional and legal barriers, 
 but a complete application of the brakes from this source seems un- 
 likely. The political branches of the government will have to make 
 the final decision as to the policy of the government, and it would be 
 well if a decision with respect to future action were reached before 
 it becomes imperative to take some unplanned action. If it is decided to 
 seek economic stabilization through a public works program, then the 
 Public Works Administration may well be established on a more per- 
 manent basis. It could become a staff agency of the chief executive, to 
 function with a skeleton organization during ordinary times and as 
 a major agency of the government, with an expanded force and with 
 large appropriations, during times of emergency. In that fashion, it 
 would be possible to retain for the government the vast amount of 
 experience that has already been accumulated as a result of five years 
 of intergovernmental cooperation in public works financing and 
 construction. 
 
BIBLIOGRAPHY 
 
 Note: This bibliography lists the materials cited in the footnotes as 
 well as other items which have been consulted and which would have 
 been useful in the absence of certain official materials. It does not, 
 however, purport to be an exhaustive listing of all the forms issued by 
 the Public Works Administration, nor of all the articles which have 
 appeared in technical and popular periodicals. This bibliography supple- 
 ments one compiled by James T. Rubey and William H. Heers, Refer- 
 ences on the Federal Emergency Administration of Public Works and Its 
 \Work, Including the Public Works Housing Division (United States 
 Geological Survey Library, Bibliographical List No. 2), processed, 
 revised to March i, 1936. No attempt is made to include in the present 
 bibliography all the items therein listed. 
 
 The place of publication for the items listed in the first section is 
 Washington. Printed publications were generally available through the 
 Government Printing Office, processed publications from the issuing 
 office. 
 
 PUBLICATIONS ISSUED BY THE NATIONAL GOVERNMENT 
 
 Publications of the Federal Emergency 
 Administration of Public Works 
 
 Accomplishments of the Federal Emergency Administration of Public Works, 
 From July 8, 1933 to May 18, 1936, 1936 (extract from Senate committee 
 hearings) . 
 
 Administrative Orders (processed, serially numbered with supplements, and gener- 
 ally dated). Prior to the middle of 1935 there was no standard numbering 
 scheme, and many of the regulations were termed Office Orders. 
 
 Amendment of October 7, 1935 to Paragraph 1 of the Construction Regulations, 
 etc., (PWA Form No. 203), 1936. 
 
 Amendment to Construction Regulations Contained in PWA Form No. 203 (PWA 
 Form No. 203-A), 1936. 
 
 Economics of Planning Public Works, by lohn M. Clark, a study made for the 
 National Planning Board, 1935. 
 
 General Information and Instructions for State Advisory Boards and State Engi- 
 neers (P.W.A.) (Bulletin No. 2), September 12, 1933. 
 
 Homes for Workers (Housing Division Bulletin No. 3), 1937. 
 
 Housing and Child Welfare (Housing Division Research Bulletin No. 2), 1936 
 (processed) . 
 
 Housing Digest (An abstract and index of current thought on housing problems, 
 
 issued occasionally, processed). 
 Information Relating to the Negotiation and Administration of Contracts for 
 
 Federal Projects Under Title II of the National Industrial Recovery Act 
 
 (Bulletin No. 51), September 7, 1933, revised December 1, 1934, and October 
 
 1. 1935- 
 
 Information Required with Application for Aid in the Financing of Railroad 
 Maintenance and Equipment, Railroad Highivay Crossing and Other [Related] 
 Projects, Under the National Industrial Recovery Act (Circular No. 5), 
 November 25, 1933. 
 
 Information Required ivith Applications for Loans to Private Corporations, etc. 
 (Circular No. 3), August 10, 1933. 
 
 155 
 
i56 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 Information Required with Applications for Loans to States, Counties, Municipali- 
 ties, and Other Public Bodies (Circular No. 2), August 1, 1933. 
 
 Information Required with Preliminary Applications for Loans for Low-Cost 
 Housing or Slum Clearance Projects (Circular No. 4), August II, 1933, re- 
 vised October 25, 1933. 
 
 Inspection Division Orders (processed, sometimes entitled Field Order or Special 
 Field Order). 
 
 Instructions to State Engineers for Preparation of Reports on Applications for 
 Loans, and Outline of Reports (Bulletin No. 1), August 10, 1933. 
 
 Manual for Engineer Inspectors, Inspection Division P.W.A., July 3, 1934. 
 
 Manual of Financial and Accounting Procedure for Public Bodies, March, 1934. 
 
 Municipally Owned Electric Utilities in the United States, 1934. 
 
 National Planning Board, Circular Letters (processed, thirteen letters, 1933-1934, 
 ceased publication). 
 
 National Planning Board, Criteria and Planning for Public Works, a research by 
 
 Russel V. Black, 1934 (processed). 
 National Power Policy Committee, Memoranda to the Press (processed). 
 Organization Charts (various charts issued at different times). 
 
 Press Releases (processed, generally undated, but serially numbered; except that 
 some gaps exist and that the advance copies of addresses by officials of the 
 P. W.A. are not always numbered, although a release date is usually given for 
 such addresses). 
 
 Public Works Administration Aids to Education, 1937. 
 
 Purposes, Policies, Functioning and Organisation of the Emergency Administra- 
 tion, The Rules Prescribed by the President, The (Circular No. 1) July 31, 
 
 1933- 
 
 P. W.A. Requirements as to Bids, Contractors' Bonds, and Contract, Wage, and 
 Labor Provisions and General Instructions as to Applications and Loans and 
 Grants (Bulletin No. 2, Non-Federal Projects), revised March 3, 1934, and 
 March 1, 1935. (See supra, General Information and Instructions, etc.) 
 
 P.W.A., The First 3 Years, December, 1936. 
 
 Relation Between Housing and Delinquency, The (Housing Division Research 
 
 Bulletin No. 1), mimeographed, 1936. 
 Report of the Mississippi Valley Committtee of the Public Works Administration, 
 
 I934- 
 
 Rules and Regulations Relating to Applicants and Projects Under the Emergency 
 Relief Appropriation Act of 1935, Applicable to Grants (PWA Form No. 179), 
 1935- 
 
 , Applicable to Loans and Grants (PWA Form No. 166), 1935. 
 
 Rules and Regulations Relating to Applicants and Projects Under Title II of the 
 
 National Industrial Recovery Act, Applicable to Grants (PWA Form No. 
 
 200), 1935. 
 
 , Applicable to Loans and Grants (PWA Form No. 188), 1935. 
 
 Short History of the Federal Emergency Administration of Public Works, A, 
 
 (processed, undated). 
 Slums and Blighted Areas in the United States, by Edith Elmer Wood (Housing 
 
 Division Bulletin No. 1), 1935. 
 Statement of Policy of the Public Works Emergency Housing Corporation (P.W. 
 
 7395). March 2, 1934 (processed). 
 Story of PWA in Pictures, The, 1936. 
 
 Terms and Conditions (PWA Forms No. 210 and 230). There have been three 
 issues of this pamphlet, dated respectively: July i, 1936; August I, 1937; and 
 September 1, 1937. Amendments have been issued in mimeographed form. 
 
 Three-Year Record of the P.W. A., The, 1936 (processed). 
 
 Unit Plans, Typical Room Arrangements, Site Plans, and Details for Low-Rent 
 
 Housing, May, 1935 (includes explanatory notes). 
 Urban Housing, The Story of the P.W.A. Housing Division, 1933-1936 (Housing 
 
 Division Bulletin No. 2), 1936. 
 
BIBLIOGRAPHY 
 
 157 
 
 Other Government Publications 
 Attorney General, Opinions of the. 
 
 Central Housing Committee, Activities and Organization of Federal Agencies Con- 
 cerned with Housing, 1936. 
 Civil Service Commission, Annual Reports. 
 
 , Official Register of the United States (annual). 
 
 Comptroller General, Decisions of the. 
 Congressional Record (permanent edition). 
 
 Department of the Interior, Memoranda for the Press (processed) 
 Department of the Treasury, Report of the Secretary of the Treasury, etc. 
 (annual). 
 
 Executive Orders. 
 
 Federal Housing Administration, European Housing Policy and Practice, by 
 Ernest M. Fisher and Richard U. Ratcliff, 1936. 
 
 , Low-Cost Housing (Circular No. 3), revised December, 16, 1935. 
 
 House Committee on Appropriations, Hearing before the Subcommittee in Charge 
 of Deficiency Appropriations, Additional Appropriations for Emergency Pur- 
 poses, 73d Congress, 2d Session, 1934. 
 
 , Hearing before the Subcommittee in Charge of Deficiency Appropria- 
 tions, Deficiency Appropriation Bill for 1934, 73d Congress, 2d Session, 1934. 
 
 , Hearings before the Subcommittee on H. R. 7527, Federal Emergency 
 
 Relief and Civil Works Program, 73d Congress, 2d Session, 1934. 
 
 — — , Hearing before the Subcommittee in Charge of Deficiency Appropria- 
 tions, H. J. Res. 117, Emergency Relief Appropriation, 74th Congress, 1st Ses- 
 sion, 1935. 
 
 , Hearing before the Subcommittee in Charge of Deficiency Appropria- 
 tions, First Deficiency Appropriation Bill for 1936, 74th Congress, 2d Session, 
 two parts, 1936. 
 
 , Hearings before the Subcommittee, Extension of the Public Works 
 
 Administration, 75th Congress, 1st Session, 1937. 
 , Hearings before the Subcommittee, Independent Offices Appropriation 
 
 Bill for 1938, 75th Congress, 1st Session, 1937. 
 , Hearings before the Subcommittee, Independent Offices Appropriation 
 
 Bill for 1939, 75th Congress, 2d Session, 1938. 
 House Committee on Banking and Currency, Hearings on H. R. 5033 and S. 1685, 
 
 To Create a United States Housing Authority, 75th Congress, 1st Session, 
 
 1937 (revised print). 
 
 House Committee on Expenditures in the Executive Departments, Hearings on 
 H. R. 6665 and H. R. 6670, Public Works Administration, 726 Congress, 1st 
 Session, 1932. 
 
 , Hearings on H. R. 7712, Change Name of Department of the Interior 
 
 to the Department of Conservation and Works, 74th Congress, 1st Session, 
 1935- 
 
 House Committee on Rules, Hearing on S. 3404 and H. Res. 368, Authorising 
 Loans- — District of Columbia, 73d Congress, 2d Session, 1934. 
 
 House Committee on Ways and Means, Hearings on H. R. 5664, National Indus- 
 trial Recovery, 73d Congress, 1st Session, 1933. 
 
 , Hearings before a Subcommittee on H. R. 10551, H. R. 10554, an d 
 
 S. 3247, Service Charges on Federal Slum Clearance Projects, 74th Congress, 
 2d Session, 1936. 
 
 House Document, Construction of Public Buildings Outside the District of Colum- 
 bia (H. Doc. No. 788, serial 9380), 71st Congress, 3d Session, 1931. 
 
 , Reorganisation of the Executive Departments (H. Doc. No. 356, serial 
 
 8274) 68th Congress, 1st Session, 1924. 
 
 , Report of the National Poiver Policy Committee .... With Respect 
 
 to the Treatment of Holding Companies (H. Doc. No. 137, serial 9928), 74th 
 Congress, 1st Session, 1935. 
 
158 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 Library of Congress, Legislative Reference Service, Digest of Public General Bills 
 
 (A synopsis of pending legislation, issued at intervals). 
 National Archives, Federal Register (daily edition). 
 
 National Emergency Council, Press Release No. 2-10, May 24, 1935 (processed). 
 National Emergency Council, United States Government Manual (annual, loose 
 leaf). 
 
 National Resources Board, A Report on National Planning and Public Works, etc., 
 1934- 
 
 President's Conference on Unemployment, Business Cycles and Unemployment, 
 1921. 
 
 Report of the Executive Secretary of the Executive Council to the President, 
 August 25, 1934. 
 
 Senate Committee on Appropriations, Hearings on H. J. Res. 117, Emergency 
 Relief Appropriation, 74th Congress, 1st Session, 1935. 
 
 , Hearings on H. J. Res. 117, Supplemental Hearings, Emergency Relief 
 
 Appropriation, 74th Congress, 1st Session, 1935. 
 
 , Hearings before the Subcommittee on H. R. 12624, First Deficiency 
 
 Appropriation Bill for 1936, 74th Congress, 2d Session, 1936. 
 
 , Hearings on H. J. Res. 361, Emergency Relief Appropriation, 75th 
 
 Congress, 1st Session, 1937. 
 
 Senate Committee on Commerce, Hearing on S. 281 1, Parker Dam on the Colorado 
 River and Grand Coulee Dam on the Columbia River, 74th Congress, 1st Ses- 
 sion, 1935. 
 
 , Hearing on S. 2825, National Planning Board of 1935, 74th Congress, 
 
 1st Session, 1935. 
 
 , Hearings before a Subcommittee on S. Res. 210, Florida Ship Canal, 
 
 74th Congress, 2d Session, 1936. 
 
 Senate Committee on Education and Labor, Hearings on S. 5397, Emergency Public 
 Works Board, 65th Congress, 3d Session, 1919. 
 
 , Hearings before a Subcommittee on S. 2419, Establishment of Adminis- 
 tration of Public Works, ?2d Congress, 1st Session, 1932. 
 
 , Hearings before a Subcommittee on S. 3348, Additional Public Works 
 
 Appropriations, 73d Congress, 2d Session, 1934. 
 
 , Hearings on S. 2392, Slum and Low-Rent Public Housing, 74th Con- 
 gress, 1st Session, 1935. 
 
 , Hearings on S. 4424, United State Housing Act of 1936, 74th Congress, 
 
 2d Session, 1936. 
 
 , Hearings on S. 1685, To Create a United States Housing Authority, 
 
 75th Congress, 1st Session, 1937. 
 
 Senate Committee on Expenditures in the Executive Departments, Hearing on 
 S. 2665, To Change the Name of the Department of the Interior and to Co- 
 ordinate Certain Governmental Functions, 74th Congress, 1st Session, 1935. 
 
 Senate Committee on Finance, Hearings on S. 1712 and H. R. 5755, National 
 Industrial Recovery, 73d Congress, 1st Session, 1933. 
 
 Senate Committee on Post Offices and Post Roads, Hearing before a Subcommittee 
 on H. R. 8781, Emergency Construction of Public Highways, 73d Congress, 
 2d Session, 1934. 
 
 Senate Document, Electric Power Plants, Public Works Administration Allotments 
 for Gas and Electric Projects (S. Doc. No. 184, serial 10015), 74th Congress, 
 2d Session, 1936. 
 
 , Employees in the Field Service of the Public Works Administration 
 
 (S. Doc. No. 137, serial 9801), 73d Congress, 2d Session, 1934. 
 
 - — , Pending Non-Federal P.W.A. Projects (S. Doc. No. 183, serial 10015), 
 
 74th Congress, 2d Session, 1936. 
 
 , Public Works Administration ; Letter from the Administrator of Public 
 
 Works Transmitting .... a Report .... for the Period Ending February 
 15, 1934 (S. Doc. No. 167, serial 9795), 73d Congress, 2d Session, 1934. 
 
BIBLIOGRAPHY 
 
 159 
 
 , Reorganisation of the Executive Departments (S. Doc. No. 8), 75th 
 
 Congress, 1st Session, 1937. 
 , Statement Relative to Funds Under the N.R.A. (S. Doc. No. 40, serial 
 
 9900), 74th Congress, 1st Session, 1935. 
 Statutes at Large of the United States. 
 Supreme Court Reports. 
 
 United States Code (Code of the Laws of the United States of America in Force 
 
 January 3, 1935, and supplements). 
 United States Information Service, Services of the Federal Government to Home 
 
 Oivners and Tenants, 1935. 
 Works Progress Administration, Report on the Works Program, 1936. 
 
 NON-GOVERNMENTAL PUBLICATIONS 
 Books and Pamphlets 
 
 Achinstein, Asher, "Recent Efforts of the Federal Government in the Field of 
 
 Low-Rental Housing," in Economic Essays in Honor of Wesley Clair Mitchell, 
 
 pp. 1-25, New York, 1935. 
 American Legislator's Association, State Legislation to Aid National Recovery 
 
 (Bulletin BX 55), Chicago, July 8, 1933 (processed). 
 Betters, Paul V., Williams, J. Kerwin, and Reeder, Sherwood L., Recent 
 
 Federal-City Relations, Washington, 1936. 
 Brooks, Robert C, Political Parties and Electoral Problems (3d ed.), New York, 
 
 1933- 
 
 Chamber of Commerce of the United States, Chambers of Commerce and the Pub- 
 lic Works Program; Washington, June 21, 1933 (processed). 
 
 , Public Works Program Under Title II of Industrial Recovery Act, 
 
 Washington 1933-1934. (A series of pamphlets subtitled: Administrative 
 Arrangements, Public Works Program Creates New Interest in City Planning, 
 Statement of Policy, Suggested Principles, etc.) 
 
 Commerce Clearing House, Inc., Federal Trade Regulation Service, Chicago, 7th 
 edition, 3 volumes (loose leaf). 
 
 Editors of the Economist (London), The New Deal, An Analysis and Appraisal, 
 New York, 1937. 
 
 Federal Reporter, and Federal Supplement, St. Paul (decisions of United States 
 
 Circuit Courts of Appeals and District Courts). 
 Foley, E. H., Jr., State Financing of Public Works, an address delivered at the 
 
 annual convention of the American Bar Association, processed, August 25, 
 
 1936. Copies are available through the association, Chicago. 
 Folz, William Edward, Public Construction and Cyclical Unemployment (1919- 
 
 1931), M. S. Thesis, University of Illinois, 1933 (unpublished). 
 Gayer, Arthur D., Public Works in Prosperity and Depression (Publications of 
 
 the National Bureau of Economic Research, Inc., No. 29), New York, 1935. 
 Ickes, Harold L., Back to Work, The Story of PWA, New York, 1935. 
 , The New Democracy, New York, 1934. 
 
 International Labour Office, National Recovery Measures in the United States 
 
 (Studies and Reports, Series B, No. 19), Geneva, 1931. 
 , Public Works Policy (Studies and Reports, Series C, No. 19), Geneva, 
 
 1935- 
 
 , Social and Economic Reconstruction in the United States (Studies and 
 
 Reports, Series B, No. 20), Geneva, 1934. 
 , Unemployment and Public Works (Studies and Reports, Series C, No. 
 
 15), Geneva, 1931. 
 
 National Association of Housing Officials, A Housing Program for the United 
 States, Chicago, November, 1934. 
 
i6o 
 
 THE PUBLIC WORKS ADMINISTRATION 
 
 National Bureau of Economic Research, Business Cycles and Unemployment, New 
 York, 1923. 
 
 Pray, Joseph C, Public Works Administration and Its Grant-in-Aid to Local 
 Governments (thesis deposited in Harvard College Library, 1938, and which 
 was examined after the type for this study was set). 
 
 Prentice-Hall, Inc., Federal Trade and Industry Ser-vice, (loose leaf and kept up 
 to date by supplements; the number of volumes varies), Chicago. 
 
 President's Conference on Unemployment, Report of the Committee on Recent 
 Economic Changes, Planning and Control of Public Works, Including the 
 Report of Leo Wolman (Publications of the National Bureau of Economic 
 Research, Inc., No. 17), New York, 1931. 
 
 Public Administration Service, A Housing Program for the United States (Publi- 
 cation No. 48), Chicago, 1935. 
 
 Sch m eckebier, Laurence F., N ew Federal Organizations: An Outline of Their 
 Structure and Functions, Washington, 1934. 
 
 Stewart, Bryce M., Unemployment Benefits in the United States, New York, 1930. 
 
 Wallace, Schuyler C, The New Deal in Action, New York, 1934. 
 
 Willoughby, W. F., Principles of Public Administration, Baltimore, 1927. 
 
 , The Reorganization of the Administrative Branch of the National 
 
 Government, Baltimore, 1923. 
 
 United States Code Annotated, St. Paul, 1927 (including pocket supplements). 
 
 Periodical Articles 
 
 American City (contains many short items in the nature of news comment, as well 
 as special articles). 
 
 Benton, Philip M., "Public Bodies and the P.W.A.," Investment Banking, vol. 6 
 
 (1935-1936), pp. 53-6i. 
 Corwin, Edward S., "Constitutional Aspects of Federal Housing," University of 
 
 Pennsylvania Law Review, vol. 84 (1935-1936), pp. 131-155. 
 Dickinson, F. G., "Public Construction and Cyclical Unemployment," Annals of 
 
 the American Academy of Political and Social Science, vol. 139 (1928), pp. 
 
 175-209. 
 
 Foley, E. H., Jr., "Legal Problems Affecting the Non-Federal Phases of the Public 
 Works Program," American Bar Association, Section of Municipal Law, 
 Summary of Proceedings of the First Annual Meeting, 1935, pp. 29-50. 
 
 , "PWA and Revenue Financing of Public Enterprises," ibid., pp. 51-84. 
 
 , "Some Recent Developments in the Law Relating to Municipal Financ- 
 ing of Public Works," Fordham Law Review, vol. 4 (1935), pp. 13-14. 
 
 Gray. Howard A., "Public Housing and Taxes," American City, vol. 52, no. 4 
 (April, 1937). PP- 93-97- 
 
 Hackett, Colonel Horatio B., "How the PWA Housing Division Functions, with 
 Sample Plans for Low-Rent Housing Projects," Architectural Record, vol. 77 
 (1935). PP- 148-166. 
 
 , "Municipal Cooperation Aids PWA's Program of Slum Clearance and 
 
 Low-Rent Housing," American City, vol. 50, no. 2 (Feb., 1935), pp. 52-54 
 Hopkins, P. F., "Public Works Administration," American Municipalities, vol. 59, 
 
 no. 3 (Dec, 1934), PP- 13-18. 
 Horwitz, Leo, "P.W.A. Loans, Constitutional and Statutory Restrictions Upon 
 
 the Power of Municipalities to Incur Indebtedness," New York University 
 
 Law Quarterly Review, vol. 12 (1934-1935), pp. 107-117. 
 Hunt, Henry T., "The Creation of Employment by the Federal Government," 
 
 Annals of the American Academy of Political and Social Science, vol. 176 
 
 (1934), PP- 95-103. 
 
 Hurt, Peyton, "Who Should Reorganize the National Administration?" American 
 Political Science Review, vol. 26 (1932), pp. 1082-1098. 
 
BIBLIOGRAPHY 
 
 161 
 
 Ickes, Harold L., "Cities and the Public Works Program," City Problems of 1933 
 (the annual proceedings of the United States Conference of Mayors), pp. 
 91-101. 
 
 , "A Statement to the American Legislators," State Government, vol. 6, 
 
 no. 12 (Dec, 1933), pp. 3"S- 
 
 Ihlder, John, "Accomplishments of The Alley Dwelling Authority as of June 24, 
 1935," American Planning and Civic Annual, 1936, pp. 133-135. 
 
 "Low-Cost Housing and Slum Clearance," Law and Contemporary Problems, vol. 
 1, no. 2 (March, 1934), pp. 135-256. 
 
 Ludwig, C. C, "Cities and the National Government Under the New Deal," Ameri- 
 can Political Science Review, vol. 29 (1935), pp. 640-648. 
 
 Merriam, Charles E., "Planning Agencies in America," American Political Science 
 Review, vol. 29 (1935), pp. 197-211. 
 
 Mitchell, R. B., "Housing Program of the Federal Emergency Administration of 
 Public Works," American Statistical Association Journal, vol. 30 (1935), sup- 
 plement, pp. 309-3I3- 
 
 "Report of Committee of United States Conference of Mayors to Harold L. Ickes, 
 Administrator of Public Works, September 29, 1933," City Problems of 1933 
 (the annual proceedings of the United States Conference of Mayors), pp. 
 IOI-106. 
 
 Robinson, H., "Some Problems Confronting the Public Works Emergency Housing 
 
 Corporation," Cornell Law Quarterly, vol. 19 (1934), pp. 548-579. 
 Rogers, Lindsay, "The Independent Regulatory Commissions," Political Science 
 
 Quarterly, vol. 52 (1937), pp. 1-17. 
 Rowlands, D. T., and Woodbury, Coleman, editors, "Current Developments in 
 
 Housing," Annals of the American Academy of Political and Social Science, 
 
 vol. 100 (1937)- 
 
 Schmeckebier, L. F., et al, "Organization of the Executive Branch of the National 
 Government of the United States," American Political Science Review, vol. 27 
 (i933), PP- 942-956. 
 
 Schnell, Robert H., and Wettach, Robert H., "Corporations as Agencies of the 
 Recovery Program," North Carolina Lazv Review, vol. 12 (1933-1934), pp. 
 77-98. 
 
 Stoke, Harold W., "State Taxation and the New Federal Instrumentalities," Iowa 
 Law Review, vol. 22 (1936-1937), pp. 39-59. 
 
 Thoron, B. W., "The Federal Emergency Administration of Public Works," Muni- 
 cipal Year Book (1937), PP- 455-493- 
 
 Waite, Colonel Henry M., "A Public Works Program," City Problems of 1934 
 (the annual proceedings of the United States Conference of Mayors), 1935, 
 pp. 65-67. 
 
 , "Organization and Problems of the PWA, "Civil Engineering , vol. 3 
 
 (1933) . PP- 657-659- 
 
 , "Public Bodies and the P.W.A.," National Municipal Review, vol. 23 
 
 (1934) , PP- 246-247. 
 
 Welch, Francis X., "The Validity of Federal Loans and Grants to Municipalities 
 for Construction of Power Plants," Georgetown Lazv Journal, vol. 25 (1936- 
 1937). PP- 607-627. 
 
 Woodbury, Coleman, "Strides Toward Low-Cost Housing," Public Management, 
 vol. 15 (1933). PP- 242-246. 
 
INDEX 
 
 Accounting systems, 49 
 Accounts, division of, 49 
 Acquisition of Squares, 13m 
 Administrative division, 35 
 Administrative expenses, 57 
 Administrative management, committee 
 on, 77 
 
 Administrative reorganization, II, 16, 75 
 Administrator, 29, 32, 34, 50, 51, 60, 62, 
 64, 67, 75, 140; see also Ickes, H. L. 
 Administrator, assistant, 24, 29, 32, 44, 50 
 Administrator, deputy, see Administra- 
 tor, assistant 
 Advance grants, 92 
 
 Advisory board on contract awards, 35 
 
 Advisory boards, state, 36, 63 
 
 Advisory committee on allotments, 24, 
 26, 58, 87, 00, 140 
 
 Agricultural Adjustment Administra- 
 tion, I9n, I42n 
 
 Agriculture, Secretary of, 13, 31, 101 
 
 Alabama Power Company i\ Ickes, 11 in 
 
 American Bankers Association, 24 
 
 American Federation of Labor, 88 
 
 Amortization of loans, 94 
 
 Applicants, eligible, 106 
 
 Applications, receipt of, 27, 30, 31 
 
 Applications and Information, Division 
 of, 24, 140 
 
 Appointments, division of, 34 
 
 Apportioned civil service, 66 
 
 Apportioned highway fund, see High- 
 ways 
 
 Architect of the Capitol, 18 
 Arkansas River Committee, 51 
 Army engineering corps, 16, ign, 29, 51, 
 56 
 
 Attorney General, 31, 33n, 56, 59, 61, 69, 
 
 92, 97, 98, 112, 135 
 Auditor General, proposed, 59 
 
 Bids, 42, 114, 115 
 Bond fund, 113 
 Bonds, types accepted, 93 
 Brookings Institution, 77 
 Budget, Bureau of, 58, 83 
 Budget, Director of, 19, 20, 31, 56 
 Burlew, Ebert K., 65 
 Business cycles, 9 
 
 Centralization, 30 
 
 Chamber of Commerce of the United 
 States, 88 
 
 Child labor, 120 
 
 Civil Service Commission, 66, 69, 142 
 Civil service laws, 34, 62, 141 
 Civil Works Administration, Federal, 
 22, 87n 
 
 Civilian Conservation Corps, 23, 83 
 Classification of employees, 67 
 Classification Act, 34, 62, 141 
 Commerce, Department of, 13 
 Commerce, Secretary of, 13, 31 
 Comprehensive program, 18, 51, 74, 137 
 Comptroller General, 35, 36n, 38, 46, 58, 
 
 67, 85, 92, 112, 132, 134 
 Condemnation proceedings, 130 
 Conditional grants, 91 
 Congress, 13, 15, 16, 19, 20, 27, 56, 83, 
 
 102, 109, 134 
 Consolidation of public works agencies, 
 
 11, 15, 16, 75 
 Construction, conditions, 11 1 
 fund, 113 
 
 materials, 114, 124 
 
 volume, 20, 144 
 Convict labor, 14, 120 
 Coordination and control, division of, 
 34 
 
 Corporate agencies, 59 
 Corporations, private, 15, 20, 26, 106 
 Corwin, Edward S., 131 
 Costigan, Senator, 15 
 Couzens, Senator, 88 
 
 Decentralization, 30, 38, 52, 140 
 Deficiency Appropriation Acts, 26, 56 
 District project auditor, 49 
 Districts, special, 99 
 Domestic materials, 125 
 Doughton, Representative, 17 
 
 Economics and statistics, division of, 
 36, 44 
 
 Economy measures as to salaries, 68 
 Electric Power Board of Review, 45 
 Eligible applicants, 106 
 Eligible projects, 18 
 Emergency finance board, 15 
 Emergency Relief and Construction Act, 
 14, IS. 18 
 
 Emergency Relief Appropriation Act of 
 1935. 23, 24, 26, 30, 32, 36, 39n, 56, 
 58, 62, 81, 85, 87, 102, 107, iogn, 112, 
 119, 122, 125, 141 
 
 163 
 
THE PUBLIC WORKS ADMINISTRATION 
 
 Emergency Relief Appropriation Act of 
 
 1936, 23, 26, 56, 62, 66, 84 
 Employment, director of, 34 
 Employment created, 138 
 Engineering division, 41, 49 
 Examining divisions, 40 
 Executive Council, 57, 85, 140 
 Executive officer, 35, 36n, 63 
 Expenditures, 79 
 
 Farley, Postmaster General, 64n 
 Farm Credit Administration, ign 
 Federal-aid highways, 13, I9n, 21, 48n, 
 101, 10611 
 
 Federal Coordinator of Transportation, 
 42 
 
 Federal Deposit Insurance Corporation, 
 113 
 
 Federal Emergency Relief Administra- 
 tion, 22, 86, 137 
 Federal Employment Stabilization Board, 
 
 12, 29, 72, 138 
 Federal Highway Act of 1921, 101 
 Federal Power Commission, 64, 71 
 Federal projects, 20, 26, 32, 35, 80, 82, 
 148 
 
 Federal projects division, 44 
 Field offices, 36 
 Finance division, 42 
 Force-account construction, 39, 113 
 Functional organization, 52, 53 
 Functions of P.W.A., 21, 24 
 Future of P.W.A., 28n, 151 
 
 General Accounting Office, 59; see also 
 
 Comptroller General 
 General counsel, 34 
 George-Healey Act, 132, 13411 
 Glavis, Louis R., 50 
 
 Grants and loans, 20, 25, 80, 88, 90, 93, 
 128 
 
 Gubernatorial letter, 96, 99 
 
 Harding, President, II, 12, 16 
 Hayden-Cartwright Act, 102 
 Highways, federal-aid, 13, ign, 21, 4811, 
 
 101, io6n 
 Holding companies, 52 
 Hoover, President, 16 
 Hour regulations, 14, 15, 120 
 Housing, federal, 14, 19, 24, 25, 36, 60, 
 
 108, 115, 127, 129, 133, 149 
 Housing division, 46, 53, 60 
 Hurja, Emil, 64n 
 
 Ickes, Harold L., 20, 24, 29, 32, 33, 60, 
 63, 64, 67, 77, 83, 91, 94, 108, 109, 
 129, 140; see also Interior, Secre- 
 tary of, and Administrator 
 
 Identical bids, 115 
 Immediate program, 71 
 Inspection division, 41, 48 
 Interest rate, 94 
 
 Intergovernmental cooperation, 146 
 Interior, Department of, 12, 16, 22, 33, 
 
 34, 36, 47. 50, 63, 65, 66, 70, 77 
 Interior, Secretary of, 24, 29, 31, 33, 67, 
 
 140, see also Ickes, Harold L. 
 Interstate Commerce Commission, 19, 
 
 21, 42, 107 
 Investigations, division of, 34, 50 
 
 Johnson, General Hugh, 29 
 Jones, Senator, 12 
 
 Jurisdiction over housing projects, 133 
 Justice, Department of, 13, 47 
 
 Kenyon, Senator, 11 
 
 Kohl, et al. v. United States, 8211 
 
 Kohn, R. D., 60 
 
 "Kick back" statute, 123 
 
 Labor, Department of, 46, 113, 118 
 Labor, Secretary of, 13, 31, 60 
 Labor Board of Review, 45 
 Labor relations, assistant on, 34 
 Labor selection, 14, 116, 120 
 LaFollette, Senator, 15 
 Leases, 97 
 
 Legal considerations, 96 
 Legal division, 34, 41, 65 
 Limited-dividend housing, 14, 19, 108, 
 127 
 
 Loans, see Grants and loans 
 
 Materials, construction, 114, 124 
 
 Methods staff, 36n 
 
 Minimum wages, 121, 122 
 
 Mississippi Valley Committee, 51 
 
 Moses, Robert, 63 
 
 Multiple overhead control, 54 
 
 National Emergency Council, 24, 25, 57, 
 85, 140 
 
 National Industrial Recovery Act, 9, 17, 
 29, 33, 42, 46, 51, 56, 57, 60, 76, 80, 
 81, 82, 89, 92, 94, 96, 101, 106, 116, 
 119, 125, 127, 129, 13m, 132, 138, 
 139. 141 
 
 National Land Problems, Committee on, 
 Si 
 
 National planning, 10, 12, 71 
 National Planning Board, 51, 71, 72, 74 
 National Power Policy Committee, 52 
 National Resources Board, see National 
 
 Resources Committee 
 National Resources Committee, 22n, 51, 
 
 53, 63, 75, 85, 138 
 
INDEX 
 
 I6 5 
 
 Navy, Department of, 54 
 Non-federal projects, 88, 123 
 
 Objectives of P.W.A., 136 
 Overhead control, 52 
 
 Peoples, C. J., Director of Procure- 
 ment, 3m, 47 
 
 Performance bonds, 42 
 
 Perkins, Secretary of Labor, 60; see 
 also Labor, Secretary 
 
 Personnel, 30, 34, 62, 141 
 
 Personnel officers, 34 
 
 Personnel statistics, 70 
 
 Planning, national, 10, 12, 71 
 
 Planning agencies, 51 
 
 Power division, 43 
 
 Power projects, 43, 109 
 
 Present status of P.W.A., 27, 28n, 151 
 
 President, 11, 13, 15, 19, 21, 23, 24, 29, 
 3i. 33, 36, 43, 51, 56, 61, 77, 87, 89, 
 97, 101, 10911, 119, 124, 140, 145 
 
 Press releases, 34 
 
 Procedure staff, 36n 
 
 Procurement, division of, 36, 47, 76 
 
 Program, 18, 51, 71, 74, 79, 137, 143 
 
 Project-supervising agencies, 47 
 
 Projects, division, 36, 43 
 eligible, 18 
 favored, 108 
 
 federal, 20, 26, 32, 35, 80, 82, 126, 148 
 
 joint, 85, 86 
 
 non-federal, 88, 123 
 
 preferences, 106 
 
 self-liquidating, 14, 19, 21, 37 
 
 supervision, 48 
 Promotions, 67 
 Prosperity reserve, 10, 12 
 Public relations division, 34 
 Public roads, bureau of, 16, 48n, 101 
 Public Works Administration, unoffi- 
 cial, 29, 65 
 Public Works Administration Exten- 
 sion Act, 27, 151 
 Public Works Department, proposed, 77 
 Public Works Emergency Housing Cor- 
 poration, 60 
 Public Works Emergency Leasing Cor- 
 poration, 61, 97 
 Public works proposals, 11, 15 
 Purchasing, 36 
 
 Reconstruction Finance Corporation, 13, 
 14, 18, 19, 21, 23, 65, 81, 97n, io7n, 
 I27n, 137 
 
 Recovery Act, see National Industrial 
 Recovery Act 
 
 Recovery codes, 115, 125, 139 
 Recruitment of personnel, 64 
 Red River Committee, 51 
 Regional advisers, 30, 51 
 Regional areas, 31, 40, 48, 51, 54, 141 
 Regional directors, 40, 141 
 Relief labor, 27, 91, 117, 119, 120 
 Reports, 58 
 
 Representatives, House of, 12, 16, 17, 
 102, 125 
 
 Resettlement Administration, 22 
 Resident engineer inspector, 48, 50 
 Review, boards of, 44 
 Revolving fund, 26, 27, 81, 91 
 Robert, Assistant Secretary of the 
 Treasury, 31 
 
 Salary standardization, 67 
 Sanitary District of Chicago, 95 
 Sawyer, Colonel Donald H., 29, 140 
 Schall, Senator, 6on, 61 
 Securities, sale of, see Revolving fund 
 Senate, 11, 15, 18, 31, 58, 62, 102, 125, 
 I42n 
 
 Service charges, 134 
 
 Size of program, 79 
 
 Slum clearance, 14, 19, 25, 60, 130 
 
 Spalding, Colonel George R., 29, 31 
 
 Special Board for Public Works, 29, 31, 
 
 94, 101, 140 
 Special districts, creation of, 99 
 Staff divisions, 34 
 State advisory boards, 36, 63 
 State director, 31, 38, 53, 54, 66, 141 
 State engineer, 36 
 
 State engineer inspector, 31, 40, 48, 53, 
 
 66, 141 
 State legislation, 99 
 Strikes, 46 
 
 Subsistence homesteads, 22 
 Supervising engineer, 48 
 Supervision of projects, 48 
 
 Taft, President, 11, 12 
 Taxation of housing projects, 133 
 Technical board of review, 44 
 Tennessee Valley Authority, 1911, 109 
 Transitions in organization, 30 
 Transportation loans division, 42 
 Treasury, Secretary of, 12, 13, 84 
 
 LInemployment, census of, 12 
 Unemployment, conference on, 11 
 Union labor, 117, 120 
 United States Conference of Mayors, 
 24, 37 
 
THE PUBLIC WORKS ADMINISTRATION 
 
 United States Employment Service, 13, 
 117 
 
 United States Housing Authority, 47, 
 
 53, 79, 135 
 United States v. Arizona, io,n 
 United States v. Certain Lands, 130 
 
 Veterans preference, 14, 117, 120 
 
 Wage regulations, 14, 120 
 
 Wage zones, 121, 122 
 Wagner, Senator, 12, 17, 20, 88 
 Waite, Colonel Henry M., 29 
 War, Secretary of, 31, 63 
 War Labor Policies Board, 11 
 Willoughby, W. F., 12, 54 
 Works Progress Administration, 24, 58, 
 86, 113, 119, 120, 122, 138, 147