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 48 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 48 of 49)
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Bates Street and Missouri Pacific 450,000

Wilmington Avenue and Missouri Pacific 350, 000

Overpass, Delor Street and Missouri Pacific 300, 000

„ ^ 2,050,000

7. Street openings, widenings, and improvements :

Opening Forest Park Blvd. through Forest Park

to Union and DeBaliviere $750, 000

Widening Grand Blvd., Arsenal to Chouteau 400, 000

Opening and widening Clara Ave., Natural Bridge

to Bircher . 600, 000

Widening Goodfellow Ave., Delmar to Natural

Bridge 2, 600, 000

Widening Vandeventer Ave., various sections

( north ) 750, 000

Widening Union Blvd., Bircher to West Floris-
sant 500, 000

Widening Vandeventer Ave., various sections

(south) 700, OOO

Widening 14th St., Park to Victor 650, 000

Widening Spring Ave., Vista to Market 400, 000

Widening 18th St., Gratiot to Chippewa 1, 650, 000

Widening Newstead Ave., Manchester to West

Florissant 2, 300, 000

Widening Macklind, Loughborough to Man-
chester 1^ 2.50, 000

Widenmg Lafayette, Grand to Vandeventer 250,000

V\^idening Chippewa St., Marine to Grand 500, 000

Widening Glasgow Ave. and Ferry St., St. Louis

to Broadway •_ 750, 000

Widening St. Louis Ave., Grand to city limits 900, 000

Widening Manchester Ave., East Ave. to city limits. 1, 000, 000

Widening Lillian Ave., Bircher to Riverview 900, 000

Opening and widening Gratiot, 7th to 39th 1, 200, 000

Widening Bates and Eichelberger, Broadway to

Cologne to Hampton 1, 100, 000

o „ ,. . '■ 19„150,000

8. Zoohgical park: Additional buildings for animals 2.50,000



2072 POSTWAR ECONOMIC POLICY AND PLANNING

St. Louis B. — List of essential projects not included in the postwar public works
program of the cit)/ of St. Louis, Mo. — Continued

9. Extensions to airports :

Field between Weber Road and River des Peres— $1, 150, 000

2 downtown airfields with elevated runways 10, 000, 000

Field at Broadway and Riverview 1,000, 000

Field at Hampton and Columbia 1, 650, 000

$13, 800, 000

10. Police department: 4 new police stations, fourth, seventh,

eleventh, and twelfth districts 800,000

11. Water system : New service building and reconstruction of pipe

yard 500. 000

12. City plan commission projects :

Northern river front $10, 000, 000

Southeni river front 6, 400, 000

Expansion Memorial Plaza 3, 000, 000

Bridges over River des Peres 300, 000

Street grade separation :

Linden and Grand 650, 000

Lindell and Kingshighway 500, 000

Grand and Market 600,000

Grand and Gravois 650,000

Extensions of traffic-control system 1, 750, 000

23, 850, 030

Total for all projects 74,300,000



Exhibit No. 10

STATEMENT OF HERBERT D. FRITZ, ASSOCIATE DIRECTOB, AMERICAN PUBLIC WORKS

ASSOCIATION

/. Information needed for the selection and timing of public construction programs

Comprehensive and continuing information is vitally needed to guide the timing,
type selection, and geographic placement of public construction programs.

Assuming that data on the availability of manpower and materials are avail-
able from established agencies, additional specific information should be collected
and analyzed to show the following: (1) The extent of detailed planning, financ-
ing, and land acquisition for public projects by cities, counties. States, and all
Federal constructing agencies; (2) the volume of definitely scheduled private
construction including industrial, commercial, and housing broken down by metro-
politan areas, counties, and States; and (3) the relation of the combined con-
struction programs to the ability of the construction industry to handle these
programs.

The public and private agencies engaged in securing and analyzing data of the
type described above are listed in a publication of the United States Bureau of
the Budget entitled "Statistical Activities of the United States" (p. 539). Refer-
ence is made to the work of the United States Deparment of Commerce and the
United States Department of Labor in collecting information bearing upon the
subject. In the matter of private construction statistics, the work of the F. W.
Dodge organization stands out. The private reporting facilities of the McGraw-
Hill Co. of New York, publishers of the magazines Business Week, Engineering
News-Record, and other technical an^ business periodicals, have contributed
much to the mass of information already available. The continuity of the
McGraw-Hill statistics is particularly valuable in providing a week-to-week and
month-to-month picture of public and private construction planning.

The Nation-wide study made by the Federal Works Agency cooperating with
the United States Bureau of the Census at the request of your committee un-
earthed extremely valuable and timely information as of July 1, 1944. The need
for information of this sort on a continuing basis and the magnitude of the job of
collecting and analyzing this data are obvious to people close to public works
and the private construction industry.

The formulation of long-range public construction programs by Federal agencies
Including the Public Roads Administration, the Public Building Administration,



POSTWAR ECONOMIC POLICY AND PLANNING 2073

the Corps of Engineers, the Department of the Interior, and other agencies, and
the attempt at coiTelation, through the Bureau of the Budget, of the Federal
works programs are steps in the right direction at the Federal level. Without
atteuiptii g to delve too deeply into the tremendously involved problem of
administrative reorganization of Federal constructing agencies, it becomes in-
creasingly apparent that the Federal Government should "put its own house in
order" at the earliest possible moment so that its own work programs shall be
properly coordinated.

The recent move of the Federal Works Agency in creating nine geographical
divisions with a division engineer of the Bureau of Community Facilities, another
of the Public Roads Administration and another of the Public Buildings Adminis-
tration in each, is a step in the right direction. Under the proposed reorganization
now beir.g carried out by FWA, one of the division engineers will be named
chairman of the division, and this office will be rotated. It seems to me that
here we have the framework of an effective fact-gathering organization. In order
to properly integrate the construction pi'Ograms of all agencies at the local,
State, and Federal levels, the FWA division chairman might well be assisted by
a division committee drawn from the administrative heads of State departments
of public works and/or highways supplemented by leading public works officials
from the local level. The division public works committee then could proceed
to set up State advisory committees, which in turn could set up county or
metropolitan area public works conmiittees. The personnel of these local com-
mittees should include leading officials of cities, counties, and special districts
engaged in public works construction and operation. Here then would be a.
Nation-wide fact-gathering and advisory organization that could supply detailed
statistical information collected at the local level, channeled through the State-
public works committee, and collected and analyzed by the FWA division chair-
man. The time appears to be right for such a set-up inasmuch as we are approach-
ing the vastly extended Federal-State-lccal street and highway program. It is
emphasized that streets and highways form only a part of the total pub ic-works
construction picture. Other construction involving sewerage, water works, public
buildings, and the like might well be studied and reported by the local, State, and
divisional committees.

The part played by local, county, and State agencies in the made-work programs
including CWA, FERA, WPA, and I'WA should serve as a reminder of the im-
portance of properly correlating governmental agencies in the common approach
to postwar public work. It is felt that a high degree of cooperation can be
secured in the collection of statistical information and in the formulation of
policies and procedures to govern future expanded public-works programs.

//. Demarkation hettveen normal and recurring local projects, and Federal aid
reserve projects
It is not an easy task to draw a sharply defined boundary between types of
public-works programs or specific construction projects. It is notable, how-
ever, that much thinking has been turned in this direction. City planning agen-
cies, and those of other governmental units have in many instances attempted
to assign priorities to their various projects which generally break down into-
three main divisions. This demarkation is determined largely by the knowledge-
that there is a minimum standard which must be met in order to provide the
basic essentials of community life as against those which raise the standards
of community living, or which tie into a large-scale State oi- National develop-
mental program. Thus we might be enabled to set forth three main priority
classes of public-works projects, as follows :

A. Projects which are useful and are needed now.

B. Projects which are useful and desirable but of secondary urgency.

C. Long-range developmental projects which normally could not be financed
by local or State agencies without resorting to outside assistance or heavy bond
issue.

Projects generally found in the (A) classification are those involving deferred
maintenance, replacement, or reconstruction of basically es.sential facilities such
as streets and highways, sewerage and water supply, refuse disposal ; and
public buildings such as schools, police and fire stations, equipment garages, and
the like. These facilities generally have been built in the past with little outside
assistance, except by WPA and FWA. There will be a considerable volume of
essential work of this sort, regardless of the extent of financial help from higher
levels of government.

99579 — 45 — pt. 6 24



2074 POSTWAR ECONOMIC POLICY AND PLANNING

The rising standards of community living (here I am thinkinsr of "community"
in the larger sense and am applying it to the State as well as local levels) are
reflected in the demands for increased health facilities, better transpf)rtation
facilities, stream-pollution control, more easily available recreational facilities,
improved educational physical plants, and the like. Projects intended to meet
this ever-increasing demand fall into classification (B). Funds may not be
available locally or at the State level for such projects. The use of revenue
bonds sometimes s(dves the local financing problem created by the demand for
physical improvements, but these are applicable only to those projects of a
proprietary nature. The inadequacy of the local tax base in financing these
projects is brought into sharp focus when local administrators try to find the
means to meet the demand for increased public facilities.

The (C) classification includes loTig-range and developmental programs in-
cluding housing. Nation-wide highway and airport facilities, public health centers,
public power expansion, reclamation and flood control, and similar public works
affecting wide areas beyond the boundaries of nuuiicipalities and States. In this
group lies the greatest opportunity for long-range planning which will bring
together local, regional, and national forces.

Although there will be instances of close interrelationship between the various
levels of Government in the consn-uction progi-ams under all thi-ee of the above
-classifications, it becomes apparent that local responsibility is primary in the
(A) classification. In the (B) classification local responsibility shades into
that of higher levels of Government; and in (C) might be found the bulk of
the Federal-aid reserve projects.

I, therefoi-e, would place the zone of demarkation within the ( B) classification,
allowing plenty of room for judgment in the assigning of priorities of responsi-
bility in the other two classifications.



Exhibit No. 11

Chicago 37, III., May 9. 1943.
Representative Walter A. Lynch,

Chairman. Huhcomwittee of the Snecial Committee on Postwar
Economif Folic]/ and Planning.

House of Representatives, Washington, D. C.
Dear Mr. Lynch : This letter is in response to your kind invitation at the time-
of the conferences of your committee members and others at which I was ))resent
on April 5 in Chicago to submit a statement relating to local postwar construc-
tion, and in direct response to the letter of April 13, 1945, of your committee
consultant. Dr. A. D. H. Kaplan. Dr. Kaplan in his letter requested for your
committee a statement "illustrating the line of demarcation between normal and
recurring local projects, on the one hand, and the tj'pes which should go on a
•shelf for Federal aid if, as, and when required."

The following fairly represents the municipal consensus with respect to the
planning policies of the Federal Government, with respect to proposed Federal
subsidization of local planning of postwar public works, and with respect to
possible Federal subsidization of local governments in the actual construction of
postwar public-works projects.

1. A single planning agency should be established in the Federal Government
to operate within the Federal sphere and as an agency to advise inuni('i])alities.

2. A Federal postwar planning and construction policy should be formed and
made known so that the lower governments may coordinate their plans with those
of the Federal Government.

3. Since municipalities prefer to finance their own needs to the extent that
their fiscal resources permit, new fiscal relationships should be established to the
end that municipalities may be freed from dependence upon either the State
or the Federal govenunents.' New and satisfactory fiscal relationships between
municipalities and their parent State governments are being developed slowly and
with limited success.

4. Federal grants to subsidize establishment or operation of planning agencies,
to assist them in performing their noi-mal functions, are not necessary and are
not favored, but Federal grants are favored for the purpose of assisting State
and local governments in the planning of specific projects which exceed the normal
public-works requirements of the community, or where State laws prohibit the



POSTWAR ECONOMIC POLICY AND PLANNING 2075

use of State or local funds for public works planning, when it is intended that
the timing of the construction of such projects shall coincide with periods of
unemployment.

r.. While Federal grants to municipalities to assist in the planning of specific
normal public-works projects are not favored, grants for the planning of projects
which exceed the normal public works requirements of the comnmnity, such plan-
ning being for construction for the general purpose of reducing unemployment,
are favored.

6. The same position (as in item 5) is held with respect to subsidization of
actual construction of such projects.

7. In view of the narrow tax base available to local government, if a huge
public-works program "intended to cushion the shock of reconversion, demobi-
lization, or unemployment is determined upon as a Federal policy, neither plan
preparation nor construction of such a program can be financed wholly by the
municipalities, and grants from the Federal Government would be required to
carrv such a program forward.

S. If a Fedeal program of subsidization of local public-works construction is
initiated by the Federal Government, the planning of projects, determination of
construction priorities (i. e., which project shall be undertaken first), and man-
agement and supervision should be subject to the control of the local government.

STATE PARTICIPATION

State financing of local public-works construction cannot be anticipated in any
State. The reserve funds of the States, while aggregating approximately .$2,000,-
OOQ.OOO, are being earmarked and will be devoted wholly to participation in the
construction of State facilities only. Substantial amounts of the State expendi-
tures will be for construction of State institutional facilities and for highway
construction.

It is apparent that the much-advertised "good financial condition" of the States
is not reilected in municipalities. With very few exceptions, there is no pros-
pect that State reserves will be apiilied to the planning of local postwar public
works: and with no exceptions, there is no prospect that State reserves will be
applied to local postwar public-works construction.

INABILITY OF MUNICIPALITIES TO FINANCE PUBLIC WORK RELIEF

AVhile the financial position of the American municipalities is stronger at
present that at any time in the past 25 years, the municipalities are in no con-
dition to support an extraordinarily costly program of work relief.

It is true that municipalities in 21 States now have authority to set up reserves,
and numbers have created reserves in varying amounts. In addition, municipal
bond yields at present are extremely favorable to municipalities, due in part to
small but constant liquidation of the over-all municipal debt in each year since
1942.

But with respect to the postwar ability of municipalities to finance relief
activities, the current financial situati(tn ()f municipalities is apt to be misinter-
preted. We must warn against illusions. We must recognize the fact that a
substantial part of the balances which are in municipal trea.suries are the result
of deferred maintenance and construction. And the same is true with respect to
most of the reserves of the States. Indeed, if it were not for the increased war-
time costs of nondeferrable maintenance and current operations the reserves
would be greater than they are.

As for debt capacity, some of the useful capacity accumulated since the war
began is also the result of deferred construction. But it is more important to
note that the legal debt margin for future debt of many large municipalities does
not indicate that these municipalities have the economic and tax-collecting
ability to service additional debt within the maximums.

Virtually all the war-deferred spending power of the majority of the municipal
governments is already more or less committed to taking up maintenance and
normal deferred construction work which was postponed for the duration.
Because of higher levels of cost which may hold over into the postwar period,
and because the greater expenses of local governments in performing nonde-
ferrable services and maintenance during the war period, it is entirely possible
that municapal reserves will not be suflicient to meet the purposes for which
the funds are committed.



2076 POSTWAR ECONOMIC POLICY AND PLANNING

Many municipalities are not permitted to accumulate reserves for deferred
maintenance and construction or for any purjwses. Unless these units of
government have created new debt capacity by amortizing prewar indebtedness
or unless they shall be permitted to increase their tax income, many ©f these
communities will scarcely be able to meet in the immediate postwar period many
of their normal deferred requirements.

• Even when authorized to do so, municipalities which are centers of war pro-
duction as a rule have not been able to establish reserves or accumulate credit.
Indeed, many war-afe?cted municipalities have been so hard pressed that the
Congress found it necessary to provide Federal funds for grants under the
Lanham Act by the Federal Works Agency to finance the deficits accrued as the
result of expanded municipal services and new construction necessary to protect
the health and insure the safety of war workers and personnel of the armed
services. For this purpose an additional $2),OC0,0(X) was appropriated by the
Congress only a few days ago — to finance construction and services which munic-
ipalities, after three w^ar-boomed years, are unable to finance because of the
limitations upon their local tax resources.

Underlying all this is the fact that municipalities obtain their revenues sub-
stantially from a shrinking local property tax base. In 3982 the assessed valua-
tion of property was .$163,317.0r 0,000; by 1941 the valuation had declined to
$144,636,000,000. There is evidence that property valuations have continued to
decline during the war period — a phenomenon, since most other values have risen,
which may be rooted in the rent ceilings held by the Ottice of Price Administration
and in the apparent reluctance of assessors to adjust valuations with respect to
speculative values upon war-boomed residential property.

The reserves will melt away in the financing of expenditures which normally
would have been made before now. The reserves, so-called, are artificial. Most
municipalities soon after the war will face again the familiar question of how to
finance more and more necessary construction and maintenance and services with
less and less revenue.

Municipalities are shrouded with fiscal limitations. Statutory or constitu-
tional debt limits are common. In many States the rates of taxation by munici-
palities are limited by statute. Assessment rates are sometimes controlled. This
situation has long demanded a new fiscal relationship between the parent State
governments and the municipalities. Unfortunately, in only a few States is there
any possibility of early developments toward an equitable redistribution of tax
resources among the various levels and units of government.

In addition, vast areas of property have been deleted from the local tax rolls
by virtue of their acquisition by agencies of the Federal Government whose
properties are exempt from local property taxes.

There is no evidence at this time to warrant a bright outlook for municipal
financial situations soon after the war. It is obvious that if municipalities un-
dertake a program of large-scale current or deficit spending for relief purposes,
the majority would soon exceed their constitutional or statutory debt limits or
shortly would imperil their solvency and destroy the currency of their bonds.
Municipalities must regard postwar relief of dislocated war workers and re-
turning service people or unemployed workers in general as a joint responsibility
of all levels of government to be financed jointly by the units at the various levels.

THE SHELF OF PUBLIC WORKS

It has been variously estimated that municipal public works will provide em-
ployment for from 3 to 8 percent of the people who want to work after the war.
The normal deferred and normal postwar construction rennirements of the mu-
nicipalities, if initiated as construction projects at times when the national level
of employment volume otherwise tends to sink, could be used as a stabilizing
factor. Projects which provide a high percentage of exnenditure for labor could
help regulate the national level of employment volume if initiated at the op-
portune time.

It is also a fact that the stabilization factor could be morp broadlv exercised
with reference to periods of inflation. Initiation of constmction of local public-
works proiects which hold hisrh potentials of employment in a period of inflation
obviously would contribute further to an inflation spiral.

There is a serious nuestion. however, as to whetbor thp average municipality,
with the fisr'Pl realities being what thev are, can afford to enirineer construction
projects and hold these for construction, exclusivelv within their own limited
resources, at times which are determined by a condition of economic stress.



POSTWAR ECONOMIC POLICY AND PLANNING 2077

The objection is not so mucli the fact that such a program is contrary to
tradition, but rather the fact that public works are not built for themselves but
rather to provide public services and meet public needs within the scope of the
municipality's fiscal capacity.

It follows that the abnormal timing, and the nature and the extent of public
works which exceed the normal requirements of the community and exceed the
normal fiscal capacity of the community government can be justified only in the
measure of results which will transcend those relating to the normal purposes of
the construction. If the project is to be timed to produce a si)ecific economic
end of State-wide or national value, i. e., to be controlled in the timing of its
initiation for the purpose of lifting the national income level, it follows that
to some degree the Federal and the State governments should share the cost.

Municipalities are not interested in Federal subsidies for normal construction
of local public works. However, they must point out the distinction between
normal public-works projects initiated with respect to the twin factors of 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 48 of 49)