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 two schools of economic thought and political ideology competed for power and influence within the New Deal. Critical to the success or failure of either side was their explanation of how the Great Depression had happened in the first place, what was causing the continuing crisis, and what the most effective federal action would be to bring it to an end. The outcome—the victory of both the WPA and direct job creation—was a genuine turning point in the New Deal. It opened the way for more substantial fiscal intervention and a larger public presence in the private economy, a more profound connection between the New Deal and the “one-third of a nation” struggling with economic deprivation, and greater development of American job policy.
The Other ERA
In the winter of 1935, the New Deal emerged from a period of uncertainty and drift caused by ongoing conflicts over the NRA’s industrial codes, the crop-reduction policies of the AAA, and the nature and extent of economic intervention needed to produce recovery. The 1934 midterm elections provided an opening for a new burst of activity: fourteen more seats in the House and ten more seats in the Senate gave the Democrats a filibuster-proof two-thirds majority, with a much stronger progressive wing than had been the case during the Hundred Days. At the same time, the need for a new round of intervention was stark: ten million workers were on the unemployment lines, eighteen million Americans were on relief, and industrial production was stubbornly sluggish.4 Beginning with the dramatic paired introduction of the Social Security Act and the Emergency Relief Appropriation Act, accompanied by hard-hitting presidential messages that spoke of an intensified commitment to the poor and downtrodden, the Roosevelt administration began pushing forward with a new agenda.
Historians refer to this period as the Second Hundred Days and the start of a Second New Deal.5 The Emergency Relief Appropriation Act was central to the moment. Introduced within a package with the Social Security Act, the ERA if anything drew more press attention with its record-setting request for funds, hailed by President Roosevelt in his presidential message as “a permanent program … based on the principle … that the right to work is the birthright of every citizen” that would protect “the unemployed, the rural groups, and others not benefited by the social security act.”6
Debate over the bill was fierce, albeit one-sided—but, in the end, the size of the Democratic majority enabled an easy triumph: 317 to 70 in the House and 66 to 11 in the Senate.7 Indeed, as Edwin Amenta and Drew Halfmann have argued, the passage of this bill was part of a formative process of wielding the Democratic majority into a working coalition, as rural Southerners and Westerners traded their votes on the relief bill in return for favorable votes on agriculture bills from urban Democrats from the Northeast and Midwest.8
The ERA gave President Roosevelt an unusual amount of flexibility in deciding how to spend the $4.88 billion. The act appropriated the funds “in order to provide for relief, work relief, and to increase employment by providing for useful projects … to be used in the discretion and under the direction of the President” and authorized spending for highways, streets, rural rehabilitation and relief, conservation and irrigation, rural electrification, housing, the Civilian Conservation Corps (CCC), and a host of other purposes.9 The act granted Roosevelt wide latitude in prescribing rules for “the employment of labor … to persons receiving relief,” in regards to wages and hours, as well as in creating any new agency to oversee such work, authority that would later be used to establish the work program’s key features,
