People Must Live by Work. Steven Attewell
job creation was a policy that actually did get enacted at roughly the same time—so the question of why the legislative shift happened remains.
The answer may well be that, just as when Hopkins went directly to FDR in October 1933 to get funding for the CWA when he felt that the PWA was taking too long to get “shovel ready,” Hopkins might have gone to FDR to argue for a separate Emergency Relief Act as a plan B in case the CES got bogged down (this time with Harold Ickes as an ally), and that the plan B was put into effect despite the committee wrapping up its work in a timely fashion.139 However, it is equally likely that the reason for the bills being split was an artifact of the congressional process: the powerful Senator Robert Wagner had introduced his Social Security bill as a social insurance and welfare measure so that it would run through his Committee on Banking and Finance, and he may not have wanted to complicate passage of the law by having it run through the Senate Appropriations Committee (as the Emergency Relief Appropriation Act of 1935 was). The latter committee was chaired by the more conservative Senator Carter Glass (D-VA). Politically Wagner may also have considered it easier to get Congress to focus on social insurance and welfare specifically rather than to try to get buy-in on the committee’s vision of comprehensive social protection.
Conclusion
As fraught as its deliberations had been, and as complicated as the ultimate compromise between social insurance and direct job creation was, the CES proved to be the launching pad for job creation’s rapid growth in the New Deal. Within a month of signing the Social Security Act, 220,000 people were drawing paychecks from the WPA. By the time that the first fifty thousand lump-sum Old Age Insurance benefits were paid out in 1937, the WPA had already covered more than two million workers and their families.140
Direct job creation started out in 1933 as an experimental program, having to borrow personnel and budget from elsewhere. It was on the chopping block by early 1934 when the CWA was abruptly shut down, in no small part due to fears that the system was too radical a departure from traditional welfare practice. Now the policy had the explicit, lengthy endorsement of a presidential committee that represented virtually the whole of the Roosevelt administration. Its legislative authority and budget were enacted as one of the big bills backed by the president’s personal prestige, and job creation formed a major part of his campaign for 1936.141
Just as important for the future development of direct job creation, Jacob Baker, Emerson Ross, Corrington Gill, Aubrey Williams, Meredith Givens, Josephine Brown, Alan Johnstone, and the other Hopkins advisors had worked out a set of theories to justify a new policy model. They built goodwill and alliances for their efforts with many New Dealers whom advocates of a job program would need to appeal to when the WPA came into existence. At that point, everyone would be faced with a major conflict over which employment policy would be the dominant force within the New Deal.
Chapter 2
People or Projects
The Works Progress Administration Versus the Public Works Administration Reconsidered as Economic Theory and Ideology
The Cabinet Room of the White House is dominated by a single long table, an oval of darkly gleaming wood. Containing stark white walls, heavy leather chairs, and rich carpeting, the room resembles nothing so much as a turn-of-the-century corporate boardroom, a place of probity and prudence (or of corruption and ruthlessness). But in 1935, the Cabinet Room was a different kind of place altogether—it was the meeting place of the National Emergency Council (NEC) and, more specifically, the NEC’s Advisory Committee on Allotments (ACA).
President Franklin D. Roosevelt would sit at the head of the table in a specially designed chair, holding court among his advisors, gesturing with his cigarette holder, and forcing on them what were reportedly the world’s worst martinis. Around the table, those present included virtually every major figure of the New Deal: Secretary of the Interior Harold Ickes, a dour Chicagoan, always taking notes for his secret diary; Secretary of Agriculture Henry Wallace, a lanky Iowan from a long line of prairie populists; Secretary of Labor Frances Perkins, practical and determined to keep the discussion moving smoothly; the Works Progress Administration (WPA) administrator Harry Hopkins, a gaunt, fast-talking chain-smoker described by his peers as a cross between a priest and a bookie. Together, these New Dealers constituted an informal “spending” caucus within the Roosevelt administration.
The spending caucus sat across the table from the director of the Bureau of the Budget, Lewis Douglas, the odd man out as one of the last goldstandard, balanced-budget Democrats left in the Roosevelt administration, and Secretary of the Treasury Henry Morgenthau, his genteel, aristocratic supporter on the side of financial responsibility, who together sought to hold the New Deal to fiscal limits.
In addition to the movers and shakers of the New Deal, Roosevelt’s ACA also included a whole host of minor players: Frank Walker, the genial, peacemaking NEC executive director; the secretary of commerce; the attorney general; the chief of the Army Corps of Engineers; the heads of the Resettlement Administration, the Rural Electrification Administration, and the Forest Service; the vice chairman of the National Resources Planning Board (NRPB); as well as representatives of business, farmers, labor unions, and big-city mayors—of the latter, the most notable was the larger-than-life New York City mayor, Fiorello LaGuardia.1 As far as such a thing existed, the NEC was the wheelhouse of the New Deal, and Roosevelt himself sat at the helm, attending almost every meeting, deftly controlling the course of national policy by leaning from one side to the other.
Starting in the spring of 1935, the NEC would enter a new phase of activity. Before, the NEC had been an arena where New Deal policy had been hashed out, from the implications of National Recovery Administration (NRA) codes for consumers and the centralization of national economic power, to the impact of the Agricultural Adjustment Administration (AAA) crop-reduction policy on demand for farm labor, to the need for political unity within the New Deal.2 Now the NEC would have to decide how to parcel out the $4.88 billion of the Emergency Relief Appropriation (ERA) Act of 1935. It was a monumental task, because the ERA was two and a half times the size of the entire federal budget at that time, the single largest appropriation of public funds in American history to date, and the beginning of a long-term departure from historic trends of the size of American government.
This sudden influx of funds into the coffers of the NEC provided a major opportunity for many different programs to expand. It sparked a serious bureaucratic conflict over which agencies would control the funds and which agencies would receive the funds. More important, it also generated conflict over how the New Deal would or should attempt to fight the Great Depression.
Two major contenders emerged within the NEC. The WPA promoted the direct hiring of the unemployed by the federal government, which would add the purchasing power of new workers to the economy. On the other side, the Public Works Administration (PWA) urged instead a massive public works program directed through federal contractors to private construction firms, which would use the power of the multiplier effect to restore the critical construction industry, which in turn would increase demand for industrial products, such as steel, lumber, concrete, oil, coal, tools and machinery, and automobiles, and thereby indirectly stimulate demand throughout the entire economy.3
The ACA was the battleground where these two alternatives sought to dominate the policy landscape. Here, bureaucrats wielded regulations, definitions, and statutory authority like lances, always looking for advantage. But more important, ideas were pressed into service on behalf of each party. WPA experts marshaled the techniques of social investigation learned in progressive social work circles, adapted the latest economic theories, and completed the intellectual and ideological framework that supported direct job creation. Civil engineers on the PWA side drew on a long tradition of countercyclical theory, economic development theory, and economic planning theory to construct a long-term vision of an America transformed by public works, building a modern economy with networks of hydroelectric dams and interstate highways.
The struggle between these two agencies over this massive appropriation illuminates the ways in which