United States. Congress. Senate. Special Committee.

Post-war economic policy and planning. Joint hearings before the special committees on post-war economic policy and planning, Congress of the United States, Seventy-eighth Congress, second session, pursuant to S. Res. 102 and H. Res. 408, resolutions creating special committees on post-war economic (unit 6) online

. (page 37 of 49)
Online LibraryUnited States. Congress. Senate. Special CommitteePost-war economic policy and planning. Joint hearings before the special committees on post-war economic policy and planning, Congress of the United States, Seventy-eighth Congress, second session, pursuant to S. Res. 102 and H. Res. 408, resolutions creating special committees on post-war economic (unit 6) → online text (page 37 of 49)
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save time in transportation difficulties in reaching their places of
employment.

I feel that that should receive your first consideration, because the
health and the future of not only the cities of the State are confronted
with that problem, but there is a health problem involved also, and
it will not require as much money as some of the projects that are
being talked of here. So for that reason I am taking the liberty and
the advantage of your kind suggestion to bring that home to you, and
I hope that when the entire committee meets you will insist upon those
improvements to which I have called attention, because I feel they are
of the utmost importance.

Naturally, as one who has seen Chicago go from less than half a
million population to over 4,000,000, and who has helped in a small
manner to develop and bring about improvements, I am vitally inter-
ested in the people who have everything invested in a two-story build-
ing or a three-story building that might go to ruin unless something is
done to rehabilitate those sections which will not bo only to the benefit
of those property owners but also to the businessmen in that district as
well. Therefore, I beseech and urge you and ask you to give consid-
eration to those people, and I shall be after you and the entire com-
mittee to do that until such program is developed and carried out in
the interest of humanity and health of our citizens. Thank you very
much.

The Chairman. I just want to say that you have pointed out some-
thing that I think we should make very plain. I think it is the view-
point of the committee that there is not going to be any handing out
of Government funds indiscriminately. We expect, first, industry
to do its part and develop along lines that industry ordinarily does
develop in days of prosperity. While we look for a period of pros-
perity when the war has terminated, we are still not certain of it; and
what we are trying to do now is to build up a little insurance against
that unemployment. After industry has done its part, we expect the
States and municipalities to do their part; and only as a last resort —
and I think I speak for the entire committee on this — do we expect
the Federal Government to give out any aid.

Mr. Sabath. I am in full accord with that. I think frequently the
industry and private capital really rely too much on Government, and
then they charge the Government with giving out money. I feel that
every opportunity should be given to private industry, and they should
be urged to provide all of the necessary work for those who are coming-
back and wdio may seek employment. I think they can do it, too.
However, in regard to the Government dissemination of funds, I fully
agree with you that we should cooperate and aid wherever necessary
so that we can provide an insurance for unemployment in order that
prosperity will be ours for many, many years.

Naturally, I know from my experience in the House for many, many
years



POSTWAR ECONOMIC POLICY AND PLANNING 1991

The Chairmax. How many years ?

Mr. Sabath. For 39 years, with which we are confronted. I am
celebrating my seventy-ninth birthday today and I hope to be wdth
you for a long time yet.

The Chaiem.vn. I want to call the attention of the committee to the
fact that we have an appointment wnth Congressman Sabath because
we have a letter from him saying he would like to know w^hen w^e
reacli town so that he can show us the city hall and the Federal
buildings.

Mr. Sabath. I will do anything to make your stay pleasant and I
hope that j^ou w411 have a pleasant stay here.

The Chairman. I am sure that we will.

Mr. Sabath. From time to time we are criticized because w^e are
appropriating too much money, but invariably the people from every
section of the country demand and urge appropriations for their sec-
tions or for the things in which they are interested, but the moment it
does not interest them directly they are willing that that appropriation
should not be made. I presume that we will have these demands and
requests for large appropriations and expenditures, but I believe that
municipalities and the States should not really rely completely upon
the Government, which has been fair and very liberal with them.
However, from now on, I think, due to the great prosperity they have
all enjoyed, they should be able to finance to a great extent all of their
needs.

The Chaikjian. Congressman Gorski has a statement that he would
like to make.

STATEMENT OF CONGRESSMAN MARTIN GORSKI, CHICAGO

Congressman Gorski. I think, Mr. Chairman, this is a very timely
investigation and a great deal of good can be accomplished from such
hearings. We know that there are about 11,000,000 men and w^omen
in the services of our country, and if these men and Avomen are not
discharged all at one time we probably will not have much of an
unemplo3anent problem. I think that there is a vast amount of private
business which is waiting to get started. Therefore, if the reconver-
sion program does not come too suddenly, we probably wall not have
any unemployment.

There are now, I believe, being discharged around 400,000 men every
year from the armed forces. When the war is over in Europe, I think
that that probably will be increased considerably. Many of the cor-
porations are today gradually reconverting so that as they are able to-
get material they will be able to take on other work and make goods
for civilian consumption.

If by our planning we can bring that about so that the reconversion
does not come too suddenly and the corporations which are now^ en-
gaged entirely in making war munitions and war materials will be
given the chance to reconvert, I think that a lot of unemployment can
be avoided.

We know right here in Chicago, Mr. Chairman, that there is a vast
pentup demand for buildings. I believe it would run into the hun-
dreds of millions of dollars. This cannot be accomplished at this
time, but when these men who go into the building industry can get



1992 POSTWAR ECONOMIC POLICY AND PLANNING

the material, they can go ahead immediately. Your investigation in
that behalf can help considerably in promoting that work. I say
that because we want to be ready and be able to know what we want
to do before the time comes when we will be confronted with unem-
ployment. We do not want to have to be confronted with the possi-
bility of having conferences and investigations to find out what can
be done to overcome the unemployment that is confronting us and I
think that that is where this inquiry can help business considerably by
having plans all ready so that when the time does come, we will have
our blueprints ready and be all ready to go,

I agree with what Congressman Sabath has said, too. I do not
think any of us favor the dealing out or giving away of public money.
We want to leave all enterprise to private business and I am satisfied
that private business can do a good job and will do a good job. I
think they should only call upon the Government when they cannot
fulfill their obligations, but I believe for many years to come, there
will be enough business to keep everybody employed. I think that
your committee here by this investigation can help private business
considerably when the time comes if there should be any unemploy-
ment.

The Chairman. We will now hear from Congressman Link.

STATEMENT BY CONGEESSMAN WILLIAM W. LINK, CHICAGO, ILL.

Congressman Link. Mr. Chairman, I believe in this planning be-
forehand. I think that is one of the best things started at this time
because*!-' ^('' - esident r^' the board of local improvements at the start of
the last,'<^^ression, t had very few plans. We started practically
from sci-at .x, and \i ' works went up that could have waited for a
ninnberf:o ■years, bu' j had to make work immediately.

Of cour:-^, as we ker-t going on, we got into better planning; we had
tune to ' a littlf er and we put up some very useful improve-

ments. ■ "■ "■ 1 aid, but the city paid its share and those

impro. ve p .j are some of the finest improvements that we

have i) icago. However, as I said before, there was

quite ;■ noney wasted because we were not prepared

to star inemployment was confronting us. I be-

lieve f' - . . ^ thing to do at this time. It should be done

at this 3 so tl -. Q prepare and build intelligently for the

future. "^i

The ^^ /Airman, vv p - " " jw hear from Mr. Bonner of Minneapolis,
Minn. '''

STATE]\.-i^:NT BY JOnxJ BONNER, ASSISTANT TO THE ATTORNEY
OE MINNEAPOLIS, MINN.

Mr. Bonner. I am the assistant to the attorney of Minneapolis,
Minn., and I am representing the city of Minneapolis. Mr. Chair-
man and members of the committee, the city of Minneapolis is in dire
need of a Federal grant in the sum of $141,000,000, which may be
reduced by $25,000,000, depending on whether or not our present
program of slum clearance will get through the legislature. The
city of Minneapolis is the largest city in the State of Minnesota and



POSTWAR ECONOMIC POLICY AND PLANNING 1993

it is situated in a central part of the State and contains a population
of close to 500,000 people.

Minneapolis has in its immediate vicinity several war industries,
such as the Minneapolis Honeywell, the Twin City ordnance plant,
the Kosemount plant, which employs a large number of people, some
of whom live in tlie city of Minneapolis. After the war these indus-
tries will not employ the same number of people that they do now
em])loy. There will be the problem of some people wanting to stay
in Minneapolis and there will be the problem of some of them going
on relief and we will be confronted with the necessity of supporting
them in Minneapolis. In addition, after the war there will be a relief
problem which probably will be as bad as it was in Minneapolis before
the war.

The city is not interested in a loan. The city wants a grant of
these Federal funds. Breaking this sum down, the city wants a grant
of $75,000,000 for highways and grade separations. The highways
involve modernization of our streets and highways and the elimina-
tion of railroad grade crossings over a large area in the southern part
of Minneapolis. The railroad grade crossings have been a festering
thorn in the city of Minneapolis for something over 60 years. The
Milwaukee Railroad runs a grade along a large part of the southern
part of Minneapolis and the city by ordinance attempted to make
them separate the grade, and the railroads went into the legislature
and threw the whole thing into a controversy, and many, many hear-
ings were held between the railroads and the warehouse commission
over the question of whether it should be a depi>-ssion or f p^.-vation
of the grade crossing, and the railroad and a'rehouse ...-.ii\ussion
decided that there should be an elevation an 1 .'j^laced r>>!^- ilurd of
the cost on the city. That amount at that . ^ was estiiniited at
$1,400,000. At this time it probably would co55,o .closer to jy,O00,O00,
that is, the city's share of the grade separation. '' . ■ ■• . r

The city has appealed to the circuit court of L '^f^alf -Vrrhat has
been carried along hoping tliat the Federal GoV ^ .janei :^ come

in and assist both the railroads and the city, i- ■^■^ ^VVPA

was in existence we had an arrangement which\ \ ';.,prac-

tically made. The railroads agreed to it and thW^ • .agreed

^o it, and then came an order suddenly out of th^Qro*^ roject

would be apj^roved unless it could be completed v^'^ ,n a ye.

I believe that that was back in 1935 and this r ., d not p Ibly be
completed within a year and so that went by. ']^^ j^ourd. Ho- ver, we
very much need Federal aid on this grade- don proj^L.. We

have to have that aid because the city is in no >n to pay ^ nillion

dollars or any part of that sum for that purpc vd ^-^""^ '" j I

Our streets and highways are entirely inadequate to carry what we
predict will be the postwar traffic. We have a very complete system
of plans draw^n and these plans have been put up before the city coun-
cil and they have passed the blueprint stage and they show various
superhighways and other technical means of meeting this traffic con-
gestion which is sure to come.

Our public buildings are entirely inadequate, too. We have a court-
house that was built in 1895 and it is a combination city and county
courthouse. The city occupies one side and the county occupies the

99579 — 45— pt. 6 19



1994 POSTWAR ECONOMIC POLICY AND PLANNING

other side. The courthouse is overcrowded. It is one of the oklest
architectural monstrosities, built with brownstone with a lot of open
wells and waste spaces, and consequently the board of public welfare^
has to rent a l)uilding outside of the courthouse. Therefore, we
uro-ently need that building and we need a new public library. Our-
public lilirary was built in 1889 and it is inadequate and we need fire
stations and garages, et cetera, to house the city-owned vehicles. We^
need new schools, both new construction and deferred maintenance.

We have been letting the schools go because we have not had the
money to keep them up ]jroperly and they are inadequate. Most of
the school buildings are antiquated. We need a building if we don't
get a city and county building big enough for the board of public
welfare. It is unsound for the city to pay rent for office space for
our public welfare.

The Chairman. Do you think it is sound for the Federal Govern-
ment to come in and pay the cost of that ?

Mr. Bonner. I think that probably under ordinary conditions with
the normal tax situation, it would not be, but I think in view of our
financial condition which I intend to develop, it is quite sound and if
I may be permitted, I should like to continue.

The Chairman. Well, continue by all means, but I would just like-
to have you keep that point in mind.

Mr. Bonner. I will take up the next point of storm drams and
water mains. Our storm drains and water mains have been built a
long time ago and they are entirely inadequate, especially with our-
increase in population.

During the spring of the year when the water gets high, the storm
drains back up and there is constant flooding and discomfort. The-
sewage pipes are not adequate either. The city engineer has recently
placed before the council a postwar project of storm drains and water
mains involving the expenditure of $13,000,000.

The park boards need additional recreational facilities. The park:
board has been operating on a shoestring with a maximum limit of
3i/> mills which we hope the legislature, which is now in session, will
increase by 2 mills, but it has not had enough money to keep its parks-,
up properly and provide proper recreational facilities for a city of
nearly 500,000 population.

The last item is the reconstruction of blighted areas and slum clear^
ance. At the present time, we have no legal authority for engaging in
reconstruction of blighted areas or slum clearance on the scale which
is necessary to remove these large areas and to rehabilitate them.
There are several bills that have been presented to the legislature which
are now in the legislature and one is the bill which permits us to get
aid from the Federal Housing Administration, but we have not liked
that bill for many years and we do not like it now. I doubt very much
if the bill will pass.

However, there is a bill before the legislature which has been passed
on by the Illinois Urban Redevelopment and that bill permits private
capital to go in and aid in the redevelopment of blighted areas and
slum clearances. That bill has a great deal of sentiment in favor of it
and I believe it has a reasonable chance of passing, but as I say, if that
bill or something like it does not pass, you can clip $1^,000,000 off that
$141,000,000.



POSTWAR ECONOMIC POLICY AND PLANNING 1995

The next item is the question of the city's financial position which
the chairman indicated as being of good deal of interest to the com-
mittee. Now the city for many years, as a matter of fact since 1912
has sat supinely by and let the State take most of its money away from
It. In 1912 the legislature took the gross earnings of the railroad com-
panies, the telephone companies, and other public utilities away
from us and deprived us of $2,500,000 a year in property taxes for
those utilities. I liave endeavored with tlie aid of others interested
throughout the State to get the legislature to recognize the injustice of
that and pass a bill giving the municipalities and counties 40 percent
of the gross earning taxes, which so far as Minneapolis is concerned,
would give us about $900,000 or $950,000 a year. However I am vio-
lating no confidence when I say that the people in the statehouse have
turned a rather deaf ear to that plea, so we have lost that money and
we will probably continue to lose it.

Then we pay around $7,000,000 to the State, that is, the citizens of
Minneapolis pay $7,000,000 to the State per year in automobile li-
cense fees and gasoline taxes. We are trying to get $40,000 for Min-
neapolis rebates on taxes that are exemiDt, motor vehicle taxes that
are exempt and we are having a tough time and tough sledding in the
capitol at the present time on that.

The city's tax rate for many years has been held by sort of a gen-
tlemen s agreement at 100 mills because that is the property tax The
income tax which we hoped to be a replacement tax was knother tax
that built up a surplus in the State. It was allocated to the schools
for debt retirement and there it stays with about a $2^,000,000 sur-
plus now m the treasury which we cannot get any portion of, al-
though the city of Minneapolis and the citizens pay a substantial por-
tion of that. '■

Our experience has shown if you run over 100 mills tax on your gen-
eral property, you have a lot of tax delinquencies and vou have 2 000
or 3 000 answers filed in tax proceedings every year and your take is
less than if you kept it down to 100 mills.

Now in regard to our bond, our bond is only $11,000,000 and when

$iQ mn^nnn /p^^^' ^^'''^"^!'- ^^'^ ^^^'^^ ^ ^^''''^ '^ ^i^l be cut down to
^,000,000. If we get a relief problem back on our hands, the relief
load IS going to take that amount away from us. So to finance this
matter which I presented to you ourselves will take probably, if it
can be done at all, around 25 years and in the meantime, the city ig
gomg downhill and it is going down without needed improvements
It is^ becoming less and less a place in which to live and to bring up
children m. So we feel very strongly that in order to do this type
of work and I believe it is absolutely essential and necessary that
that work be done and not bypassed, we need a grant from the Federal
Government to finance it. We cannot do it our^selves

I am told by competent authorities that probably within the next
year there will be a couple of months of pay less paydays for the city
employees, and I am not heartily in favor of that sort of a pro-ram
So in order to keep the city solvent, the tax money must be devofed to
the bare necessities. We have lost revenue in several instances We
hacl a parking meter ordnance and we got money from the parking
meters, but then due to the fact that the automobiles are not bein?
driven as much today as in former years, that has dribbled dowS
considerably, and our revenue has been going down all the time



1996 POSTWAR ECONOMIC POLICY AND PLANNING

Therefore, we are up against ithe demand for the same municipal
services as in the past with a steadily declining income.

The Chaikman. Mr. Fogarty, do you have anything to ask?

Mr. Fogarty. It seems to me that you are having a tough time with
your State legislature.

Mr. Bonner. I agree with you.

Mr. Fogarty. A lot of your problems could be solved if you got
something out of the Statehouse ; isn't that correct ?

Mr Bonner. They could be solved to some extent through the di-
versification of this tax; that is, 40 percent of the gross earnings based
on a $14,000,000 gross earning tax for tliis last year. That would
bring us in probably $950,000. The gas refund tax does not amount
to very much. That is a tax on motor vehicles owned by the city and
used to repair the State highways and that amounts to only about
$40,000.

However, I assure you that I have not relaxed any effort to get this
money from the State legislature. I have been over there continuously
every day since the start of the legislature with the exception of the
last few days when I have been down here. But the farm bloc over
there just gang up and tell us that we cannot have it. We have got
to have it and they will not give it to us and they control the legis-
lature owing to the inequality of representation.

Mr. LeFevre. You spoke of $70,000,000 or $75,000,000 project for
your roads ?

Mr. Bonner. Yes.

Mr. LeFevre. Have you checked on the Federal road bill that was
passed at the last session as to what aid you will get from that for
the city and State high v/ays?

Mr. "Bonner. I think we would get some State and some Federal
aid there.

Mr. LeFevre. Has your State passed a law as to what percentage
they would give to get'^some Federal money on that ?

Mr. Bonner. I do not think that they have. I do not think they
have gone that far, but I will check that.

Mr. LeFevre. Getting your aid in that way, I believe you will find
you will get something.

Mr. Bonner. Certainly there are trunk highways which we get same
small amount of State aid on and I think the State gets some Federal
aid on the trunk highways, but there are other highways in that city
that are not trunk highways and then there are bridge constructions
over the Mississippi. One of our bridges has been condemned and
it will be necessary to put in at least two more bridges; if we can
get one of those bridges designated as a trunk highway, that will be
an advantage.

Mr. LeFevre. That bill will go a long way toward helping your
grade crossings, too, I am sure about that.

Mr. Bonner. That grade crossing has been a tremendous problem
that we have had over a period of years.

Mr. LeFevre. Is that on a through highway?

Mr. Bonner. No ; that is the trouble with the grade crossing, men
the Milwaukee Eailroad was built 75 years or more ago, they just
went straight along a grade and cut through the heart of Minneapolis
and most of that is at grade. So it crosses all sorts of streets. In



POSTWAR ECONOMIC POLICY AND PLANNING 1997

fact, it crosses every street from about Sixth Avenue or Washington
Avenue clear through ahnost to the city limits of the city of Minne-
apolis and the only way we could possibly figure to get any aid from
the Feoderal Government prior to this time was to make a WPA
project out of it. We had hoped that w^e would be able to do some
work on it in that way and then at the last minute that was limited
to a 3'ear.

The CiiAiRMAX. Mr, Bonner, we want to thank you for presenting
your sad picture here today. I think that probably Mr. Fogarty has
suggested your real difliculty, which is with the people of your own
State, the State legislature. Frankly, I am rather aghast at the pic-
ture that you have painted and at the same time I think it is fair to
warn you that the present disposition of this committee is not to go
along on making grants for construction. At the most, we might do
this : We might consider grants-in-aid for planning, as we have done
under the Reconversion Act which was passed last year and for which
the appropriation now is $35,000,000.

Plowever, it does not seem to me as though there is any chance
within the immediate future of the Federal Government coming to
the aid of a city to the extent that you have suggested. As a matter
of fact, we are receiving complaints about the high taxes. Of course,
we want to do everything we can, but we do not intend to have the
Federal Government run the business of the various municipalities.
So I think we all sympathize with your position and respectfully refer
you to your State legislature.

Mr. BoxxER. As I understood this letter which I received, it is a
subject matter to be dealt with to the extent tliat the Federal Govern-
ment must help the localities with the financing of public works
through capital giants or loans and grant. This should not be con-
fused with the Federal appropriation for Federal granting of public
works. I thought that that possibly indicated that you woulcl help
our city out in this respect.

The CHAiK:\rAX. We are glad to have your suggestions, but I think
I am expressing the opinion of the committee that at the present time
I do not think there would be a possibility of getting through the



Online LibraryUnited States. Congress. Senate. Special CommitteePost-war economic policy and planning. Joint hearings before the special committees on post-war economic policy and planning, Congress of the United States, Seventy-eighth Congress, second session, pursuant to S. Res. 102 and H. Res. 408, resolutions creating special committees on post-war economic (unit 6) → online text (page 37 of 49)