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 39 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 39 of 49)
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cities of Michigan have gone far in developing the program of plans
and they will be ready if we have an unemployment period so that
we will not have to go to leaf -raking jobs in Detroit and in Michigan.

I think ]\Ir. Weeks pretty well covered that part of our program.
Other cities are setting aside what money they can, many of them, but
we are hoping that the State government will realize that they have a
responsibility in this continuous tax problem and will give back to
the cities those taxes which we think we deserve and then we will all be



POSTWAR ECONOMIC POLICY AND PLANNING 2005

in a shape to carry on a constructive program of worth-wliile projects
in Michigan.

The Chairman. Mr. Fogarty, do yon have anything?

Mr. FoGATKY. Nothing.

Mr. LeFevre. In regard to Mr. Richards' report, I think Michigan
should be congratuhited for the fine start they have made on this whole
postwar plan.

Mr. Richards. Thank you very much, sir.

The Citair:man. Do you have any questions, Mr. O'Brien ?

Mr. O'Brien. No, sir.

The Chairman. I am very much interested in the statement that
you made here in reading from the mayor's remarks, that the city
should not enter into competition for men and material during pros-
perity periods. I think if we bear that in mind, we will })robably be
able to continue the prosperity era a good bit longer than if the oppo-
site takes place, where the cities and States are competing with in-
dustry during prosperity periods on works that are not essential.

I realize, as you do, there must be a certain amount of competition,
but not to the extent that it would cause an inflationary spiral either
of materials or of labor. I think that is a very fine statement that has
been submitted.

Mr. Richards. I wonder if I might take about 2 more minutes.

The Chairman. Certainly, go ahead.

Mr. Richards. I mentioned the airport program. I appeared be-
fore a committee of the House m Washington about 2 weeks ago to
discuss the national airport plan and airport financing which is a part
of our need in this country. As Mayor Jeffries mentioned in his paper,
there is a big profit coming back to the Federal Government from air
mail and this year I think it will be fairly close to $50,000,000. When
you consider that they have raised the rate on the letters and they have
cut the rate to the air lines on what they pay them for carrying the air
mail, they are going to make a tremendous sum this year. In the past,
all forms of transportation have been subsidized in their early stages
of development by the Federal Government. We think that this is a
very important form of transportation and if there is a subsidy need,
it should be furnished by the Federal Government. We do not believe
it should be expected of the cities who have been doing the subsidiz-
ing so far.

Detroit has furnished an airport for air transportation up to the
present time and now we have got to build a new airport for scheduled
lines. We haven't received any Federal assistance for airport con-
struction and we feel that this is a responsibility of the Federal Gov-
ernment. They have always subsidized all forms of transportation
and we do not think that the present set-up in which cities do the
subsidizing is right.

You gentlemen will be voting on that bill, no doubt, and I would
just like to bring it out, that some legislation should be set up and I
think soon, because it is very important to the development of our air
transportation system for the financing of the key terminal facilities
that we are going to be needing. The present bills being considered
are not adequate for large airports that are going to be needed on our
interstate and international transportation systems. I am hoping
that you are giving that a lot of thought in Washington now and that



2006 POSTWAR ECONOMIC POLICY AND PLANNING

you will come out with better legislation than that proposed and
something that will really do a job.

The Chairman. Is your airport in Detroit operated at a loss ?

Mr. Richards. Every airport in the country is operated at a loss
if you take into consideration the amortization of that airport. No
airport that I know of, and I have checked into all of them, except
one privately owned airport in California which is subsidized by an
aircraft company — no airport in the country does more than pay the
day-to-day operation of that airport.

The Chairman. I think that is all, Mr. Richards. Thank you very
much for your presence here today.

We will now hear from Mr. H. Dale Bossert, director of planning,
Illinois Postwar Planning Commission.

STATEMENT OF H. DALE BOSSERT, DIRECTOR OF PLANNING,
ILLINOIS POSTWAR PLANNING COMMISSION, CHICAGO, ILL.

Mr. BossERT. Mr. Chairman and gentlemen, long-range programs
for postwar public works construction have been submitted by the
State of Illinois, by all but 1 of the 102 counties, and by municipalities
and other local governmental units representing a large majority of
the population.

Are you interested in the State postwar plans, or just local plans ?

The Chairman. Yes, we are interested in any plans.

Mr. BossERT. The long-range State program totals some $300 000,-
003 for buildings and utilities. Approximately one-third of this
amount, plus an item of $10,000,000 for State aid to promote local
public works planning, is proposed for the biennium commencing July
1, 1945. State surplus funds are available to construct all of this pro-
posed biennial program. Any expansion or speed-up of the State pro-
gram would probably require Federal grants.

The long-range State program for highways and highway structures
totals approximately $210,000,000, of which about one-half is expected
to be activated during the first postwar biennium. With revenues
from State motor-fuel and vehicle taxes, plus scheduled Federal aid,
this long-range highway program should be accomplished within the
first decade after the war.

The public works program contemplated by the State of Illinois
can be financed to the extent of some $200,000,000 in the next biennium
by State funds plus existing Federal-aid highway funds.

The long-range county program totals some $114,000,000, of which
$111,000,000 is for highways and highway structures and $3,0;)0,000 is
for public buildings, et cetera. Over half the counties, representing
about three-fourths of the total construction program, indicate that
they will require outside financial aid for their postwar public works.
Less than one-third of the counties say they will not require such aid.

At the end of 1944, Illinois counties had a balance in the State treas-
ury of 12% million dollars representing their share of m. f. t. — motor-
fuel tax. The Federal Aid Highway Act authorizes appropriations
for secondary and feeder roads which will amount to about 4.% million
dollars annually for Illinois. The motor-fuel tax funds must be
spent on the State-aid system, 21,637 miles out of the 104,924 miles
of county highways, first for maintenance and then for imj)rovements
as funds are available.



POSTWAR ECONOMIC POLICY AND PLANNING 2007

The need for county road improvements is large in most counties
and funds available for such improvements are extremely limited
after maintenance expenditures are met. In order to permit the coun-
ties of Illinois to continue their essential improvement programs and
make up construction schedules lost during the war, despite the loss
of funds through motor-fuel tax reduction due to travel restrictions
and despite higlier post^Yar costs compared to prewar levels, Federal
aid will be necessary.

The postwar public works programs contemplated by the counties
in Illinois to the extent of some $114,000,000 cannot be financed for
construction within what may be a desirable short period of time —
that is, within the short time that may be desirable in order to expend
employment — unless Federal aid, preferably in the form of grants
of at least 35 percent, is made available.

Ngtk. — Approximately half of the people of Illinois live in Chicago, whose
■consolidated postwar public-works program for city departments, bureaus, school,
park, and other special districts has been reported to the extent of some
$946 000,000. The question of financing the Chicago program is being discussed
by others here today and is, therefore, omitted from this statement.

The total postwar public-works program reported by down-State
local governmental units — exclusive of counties- — amounts to some
$292,000,000. This is known to fall short of total needs in several
phases. For example, only $41,000,000 has been indicated for new
school construction, whereas the long-range junior college program
alone would require the major part, if not all, of this amount. Again,
only $20,000,000 has been indicated for water-supply treatment and
•distribution, whereas it is estimated that to meet the needs for public
water-supply facilities in Illinois would cost over $90,000,000.

Although the municipalities' share of MFT funds and the use of
special assessment and revenue bonds will permit the financing of a
•considerable part of certain types of local ])roject£ — types which com-
prise about two-thirds of the total down-State local program — the
•entire cost cannot be borne locally. The bonding povcer of local gov-
•ernmental units in Illinois is too small to permit general boul fiTaiic-
ing. Furthermore, per capita costs in the small communities, even
aside from the factor of increased prices, tend to prohibit certain de-
sirable improvements. For example, waterworks projects for com-
munities under 500 cost an average of $84 per capita, according to
an analysis of PWxl contracts from 1933 to 1939, whereas in commu-
nities of 1,000 to 10,000, the average per capita cost was only $45.

Note. — It is estimated that these costs will be approximately 50 percent higher
in the early postwar years compared to 1934—40.

The postwar public- works programs contemplated by local govern-
mental units in Illinois, excluding the city of Chicago and excluding
the county programs, to the extent of some $292,000,000, cannot be
financed for construction within what may be a desirably short period
of time unless Federal aid is made available, preferably in the form of
grants of at least 35 percent plus; in addition, loans for certain types
of self-liquidating projects. With such aid, probably a program con-
siderably larger than $292,000,000 could be justified.

A total postwar public-works program in excess of 406,000.000 could
!)€ sponsored in Illinois by local governmental units, exclusive of the
program of the city of Chicago, if sufficient Federal aid in the form
of grants and/or loans were to be available. It is believed that a



2008 POSTWAR ECONOMIC POLICY AND PLANNING

grant of at least 35 percent Avill be necessary if the objective is to
maximize emplojanent in public works during the first few postwar
years, and that additional loans will be desirable for certain types of
j)rojects.

In order to avoid setting or perpetuating undesirable and inefficient
patterns in the provision of public facilities, it is essential that safe-
guards be established and maintained as to the use of Federal aid
for local public works.

The provisions of the Hospital Construction Act now before the
Congress, S. 191, Hill-Burton, with respect to clearing through a
central State agency for approval of hospital projects, are excellent.
Similar provisions should be established in regard to other projects,
especially those for the construction of new school facilities.

The Chairman. You spoke about a $10 000,000 State aid for gov-
ernmental units that contemplated a 10-year period? Did I under-
stand you to say that ?

Mr. BossERT. I did not make that clear. The Illinois Postwar Plan-
ning Commission has drafted a bill, which has not yet been acted upon
by the general assembly, calling for an appropriation of $10,000,000
for aid to the local governmental units during the next biennium in the
preparation of plans for postwar public works.

The Chairman. You mentioned a long-range plan. Did you have
reference to the local governmental units in that long-range plan or
did you have reference to the State program ?

Mr. BossERT. The larger State program of some $500,000,000 would
be a long-range program of perhaps 10 or 15 years, and so would the
$406,000,000 local public-works program — that likewise would be a
long-range program. The $104,000,000 State program is an immedi-
ate 2-year program.

The Chairman. And it would be that long-range program that
would have to be compressed into a shorter period of time in the
event there was any extensive unemployment?

Mr. Bossert. That is correct. This $10,000,000 for aid to local
public- works planning would be expendable within an 18-month
period or some short specified period of time and would be matched
with local funds.

The Chairman. For planning?

Mr. Bossert. For the preparation of local plans. That is divided
up something like this : Three percent for administration, $6,475,000
for the municipalities, $1,500,000 for the counties, $1,250,000 for the
school districts and the rest for the sanitary and park districts.

Most local construction projects will be financed through some type
of bond issue that cannot advantageously be consummated now for
construction to be started at some future undetermined time. The
expense of plan preparation normally is included in the amount of the
bond issue. Consequently, the local taxing units, while desirous of
developing detailed plans now for needed community public works
to be constructed after the war, are handicapped because of limited
available funds.

An analysis of the local postwar public-works programs submitted
to the Illinois Postwar Planning Commission reveals that outside
financial assistance in the form of a grant for partial payment of the
cost of j)reparing detailed plans and specifications for specific projects



POSTWAR ECONOMIC POLICY AND PLANNING 2009

is essential to 64 percent of the reportino; counties, 94 percent of the
rei^orting municipalities, and 92 percent of the reporting school
districts.

Reports from 13 of the larger sanitary districts, 28 districts in Illi-
nois, including the Chicago Sanitar_y District, indicate that 3 districts
are not contemplating postwar construction and that 3 districts, in-
cluding the Chicago district, can develop their project plans without
financial assistance.

Only 7 park districts — there are 83 such special-taxing districts in
Illinois — have reported programs and each has indicated that major
outside assistance will be required for the construction of their con-
templated projects as well as for plan prepai-ation.

The need for State aid to provide financial assistance for plan
preparation of specific postwar ])ublic-works projects has been empha-
sized by local governmental units throughout the State, and the grant-
ing of State aid would make funds available to every community in
the State that wishes to benefit by such financial assistance.

Contemplated postwur puhlic-ivorks progmui, Illinois local yovcntniental

u)iits, Marcli 10'i5

BEC^VPITULATIO'N

Couuty government — 101 counties, including Cook County, of the
total of 102 counties :

Highways and highway structures $110, 955, 594

Public buildings, etc 2, 807, 750

Total 113, 823i 348

Detailed plans and specifications completed or in progress (43 per-
cent) 49, 272, 148

Sketch plans completed or in progress (23 percent) 25, 390, 300

Surveys completed or in progress (8 perceut) ._ 9,671,000

Preliminary estimates only (26 percent) 29,483,900

Total (100 percent) 113,823,348

Down State — municipalities, sanitary districts, park districts,
school districts, and townships :

Street improvements 51, 774, 888

Sanitary sewers and storm drains 60, 131, 583

Sewage-treatment works 19, 078, 240

Water supply and distribution 18, G73, 425

Water treatment 1, 526, 698

School buildings 41, 455, 110

Other public buildings 20, 396, 676

Bridges and grade separations 36, 037, 390

Parks and recreational facilities 10, 125, 179

Airports and airfields 5, 837, SOO

Electric generating plants and distribution 10, 376, 000

Othea- 11, 074, 645

Total 292, 487, 684

Detailed plans and specifications completed or in progress (18 per-
cent) 53, 070, 435

Sketch plans completed or in progress (22 percent) 65, 472, 513

Surveys completed or in progress (10 percent) 28, 412, 702

Preliminary estimates only (50 percent) 145,531,984

Total (100 percent) 292,487,634

99579 — 45— pt. 6 20



2010 POSTWAR i^^CONOMIC POLICY AND PLANNING

Contemplated postwar puUic-works program, Illinois local governmental
units, March 1945 — Continued

RECAPia ui>AiioN — con t i nued

-Chicago, city departments and bureaus and other local administra-
tive bodies (Chicago Plan Commission's report) :

Health ^f)^ Srg. 401

Water 134^ 730^ O^q

Sewage HI, 42y, 514

Fire 5, 166, 831

Police 2, 077, 532

Municipal buildings 9- 455, £oo

Parks and playgrounds 77, HI OOq

Boulevards and parkways 18, 285, 500

Schools 30- 202! 000

Libraries 9, 547, 750

Rapid transit I75, 200, GOO

Expressways 167, 317, 000

Major thoroughfares 31, £63, OOO

Street lighting and traffic control ll| 277] 000

Secondary streets 25, 45o', 000

Grade separations 53,' 256,' 000

Bridges 16, 495, 000

Parking 30,000,^000

Water improvements 9, 124, OOO

Airports 26,' OCO,' 030

Total 946, 799, 528

Note. — Status of plan preparation on specific projects was not included in the Chicago
^•eport.

Mr. Arthur. Would that money be paid out as grants or as loans
that are repayable ?

Mr. BossERT. The $10,000,000 for plan preparation would be paid
out as grants by the State to the local governmental units.

The Chmrman. On a matching basis?

Mr. BossERT. Yes; except for the very small communities. They
would be permitted to use State akl, without matching, for two kind's
of projects only, and those two are water and sewerage projects. We
feel that public health is a State-wide problem which justifies those
exceptions.

The Chairman. We want to thank you very much, Mr. Bossert, for
your very fine statement.

We will now hear from Mr. Kinsey, president of the Board of
Public Service of St. Louis.

STATEMENT OF MILTON M. KINSEY, PRESIDENT OF THE BOARD OF
PUBLIC SERVICE OF THE CITY OF ST. LOUIS, MO.

Mr. Kinsey. Mine is rather an unusual title and perhaps I had
better explain it to you: I am the chief engineering executive of the
city and in addition, I preside over the board which supervises all of
the executive departments of the city with the exception of the legal,
financial, and tax assessing and collecting. With those exceptions, our
board supervises all executive offices of the city.

The city of St. Louis is justly proud of the Nation-wide acclaim
which we have received for our leadership in postwar planning and
construction. That we are far ahead of most every other city of the
United States is almost universally conceded.



POSTWAR ECONOMIC POLICY AND PLANNING 2011

For example, the Engineering News-Record in its issue of October
19, 1944, under the title of "St. Louis Shows the Way," published an
editorial in which it was stated that St. Louis can claim, and I quote:

The national championship in postwar public works planning.

Ajid again, the Construction Methods magazine in its February
1945, issue states, and I quote :

By virtue of its initiative, integrity, and independence in facing facts and
taking a i-ealistic action to meet them, St. Louis has entered the front rank of that
select group of cities which have both blueprinted postwar public improvements
^nd provided the funds to pay for them.

These quotations are typical of many which might be given from
other magazines and periodicals published in various parts of the
country. You gentlemen might be interested in a brief resume of the
theories that our city has followed in attaining this enviable record
and you may wish also to be advised of our recent progress in making
our program a reality.

We started out by requiring each city department head to prepare
ii list of postwar projects for his department together with their esti-
mated cost and to file these lists at a central point. Simultaneously,
our fiscal department commenced a study of our financial program
and they prepared estimates of the additional bonded indebtedness
which the city might safely carry. At this point we had recommenda-
tions for several hundred projects totaling approximately $165,000,000.

On the other hand, we had a statement from our comptroller that no
more than §35.000,000 of new bonds could be issued, to wliich there
might be added approximatel}^ $20,000,000 of various funds authorized
or on hand.

The $lio5,C00.0C0 figure therefore had to be cut to approximately
$'55,000,000. This was done by a very small group of high city of-
ficials who rated all of the proposed projects based on their knowledge
of the city's needs and having in mind a formula which gave high
priorities to projects using a high percentage of local labor and mate-
rial and low priority to projects which would have a tendency to
increase future city operating expenses.

That formula was not rigidly adhered to in all instances, but it was
kept before us as a guiding principle. Toward the last of this weed-
ing-out process, numerous projects were arbitrarily dropped in order
to make the program fit our financial ability. About this time, our
mayor appointed a large committee of outstanding citizens who were
charged with the duty of investigating each of the projects and make
recommendations as to their suitability.

A list of our proposed projects were given to the committee which
included some 165 items totaling, as I said before, approximately $55,-
COJ,000. Due to the size of the task, the 165 projects were divided into
11 main groups and the subcommittee of the citizen's committee was
assigned to each of these groups. Each of these committees reported
on the group or project assisoied to it and in most instances, recom-
mended changes in the list which had previously been proposed by the
city officials. In fact, they added projects so that the total reached
$63,000 000 and the bankers on the connnittec also assisted in a restudy
of the bond situation, tb.e final decision being that we could stretch the
.bond issue to ^3,500,000.



2012 POSTWAR ECONOMIC POLICY AND PLANNING

While this procedure was being carried out, the hiwyers prepared
the bond issue procedure, the ordinances and the proposals to be
voted upon. Last Au<iust, the voters carried this bond issue of $43,-
500,000 by a majority of more than 5 to 1. Now in St. Louis we have
a program and we have the money to pay for it.

I would like to leave for your record what I will mark as "St. Louis
Exhibit A," which is 'a detail of the program showing all of the
})rojects and also how each of the various 11 groups is financed. (See
exhibit 8, p. 206G.)

Briefly, I might say that the program includes hospitals and insti-
tutions, $3,350,000; parks and recreation, $4,150,000; fire protection.
$800,000; fire and police, telephone and telegraph system, $2,200,000;
sewers, $8,000,000; bridges and viaducts, $2,285,000; street openings
and widening and improvements, $8,600,000 ; zoological park, $750,000 ;
airport facilities, $14,000,000; city art museum. $250,000; and water
system, $19,000,000, making a total of $63,385,000.

Since the passage of the bond issue, we have been energetically pro-
ceeding with the preparation of plans and specifications to the end
that we will have actuallj^ blueprinted a large portion of our program
by the time that hostilities cease. Thus we will be prepared to let
contracts and place work on the market if employment conditions
require.

At the present time, we have more than 10 percent of the total pro-
gram blueprinted and on the shelves ready for the taking of con-
tractor's bids. Another 15 ])ercent is in tlie final stage of design and
will be totally completed within the next 2 or 3 weeks.

An additional 25 percent of the program is on the drafting boards
and is scheduled for early completion. Preliminary work for the
remainder is well under way. To accomplish this result we have
utilized private engineering and architectural talent as well as all of
the forces employed by the city. This use of outside technical serv-
ice is rapidly expanding so that we now feel confident that our entire
program of $63,385,000 can be placed under actual contract and con-



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 39 of 49)