Roosevelt established an institutional framework that divided authority among his subordinates, while giving himself maximum flexibility. The new Division of Applications of the NEC, headed up by Frank Walker, would receive the project applications, pouring in from all forty-eight states and thousands of municipalities, counties, and relief administrations, and pass them on according to their merits. The new WPA, led by Harry Hopkins, would analyze the applications for their capacity to increase employment and then provide a list of relief clients in the locality of each project. The PWA under Harold Ickes was supposed to be the main planning and building institution, undertaking the heavy lifting of the work program by carrying out the public works, using the manpower assigned to it by the WPA.
Theoretically, this system should have worked smoothly. Local applications for projects would flow into the Division of Applications, which would sift out the good proposals from the bad. The WPA would certify that enough labor was available in the area to undertake the project, and the PWA would start building. However, two factors would destabilize this institutional setup and give direct job creation advocates a chance to dominate the agenda. First, there was a fundamental difference in philosophy between the hiring and building sides of the system. Ickes and his administrators in the PWA did not believe that relief workers (often unskilled or semiskilled workers who had been unemployed for several years) were qualified to efficiently carry out the complicated and demanding work of the kinds of “heavy” construction that would make for valuable, long-lasting, and, above all, “self-liquidating” public works that could repay the cost of construction through user fees (toll bridges and tunnels, for example).
Ickes and his civil engineers preferred to work with experienced building contractors, including the future corporate leviathans of Bechtel and Halliburton, which had the skilled workforce, technical expertise, and machinery needed to construct complex structures such as Boulder Dam. For their part, Hopkins and his advisors in the WPA viewed traditional public works as too slow and cautious, ultimately unsuited to the task of reducing unemployment. After all, when major projects were steered to construction firms, the accompanying dollars went to men already employed, and construction firms were reluctant to do more than add on workers at the margins, let alone hire the millions of Americans in desperate need of work.
Second, FDR made a number of structural decisions that created tension within the work program. The WPA, as the certifying authority for public works projects, was in a position to choke off the PWA by refusing to certify their projects on the grounds that they were not employing enough unemployed workers. Moreover, at Hopkins’s behest, Roosevelt had, through an executive order, granted the WPA the authority to “recommend and carry on small useful projects designed to assure a maximum of employment in all localities.”10
This provision of the executive order may have been intended to provide President Roosevelt the leeway to speed the work program up. After all, Secretary Ickes had been slow to launch the PWA in 1933–1934 while Hopkins had created the Civil Works Administration (CWA) in record time. In any case, the loophole gave Hopkins an opening to proceed with direct job creation, independent of the PWA’s authority. Finally, the NEC itself retained the ultimate authority to allocate funds to projects, leaving the WPA, PWA, and the Division of Applications without any clear hierarchy of authority among them. Accordingly, each party could advocate for itself on equal terms before the NEC.
It is hard to tell from the historical record to what degree FDR was aware of the impact that these decisions would have. Certainly, the split into three agencies was consistent with Roosevelt’s tendency to make lieutenants compete with each other and rely on his decision making as a means of keeping a handle on the sprawling dimensions of the New Deal.11 Especially in regards to the “small useful projects” rule, it may have been the case that FDR knew what Hopkins would do with it, and that he accepted direct job creation as a “plan B” if Ickes took too long to roll out his public works. From the president’s draft press release on the work program, for example, we can see that “the Works Progress Administration … [is] responsible for the honest, efficient, speedy, and coordinated execution of the Work Relief Program as a whole … in providing employment [for] the maximum number of persons in the shortest time possible.”12
The ultimate structure of the work program, however untidy it might have been, provided a mechanism for the resolution of political conflict over ERA funds. Applicants before the ACA would face an adversarial setting in which to make a case for their share of the finite lump of ERA funding. The ACA itself would provide a majoritarian solution by voting requests for allotments up or down, and the work program’s separate parts would proceed independently. This institutional structure would also be a major spur to the creation of rival camps, as it encouraged both sides to repeatedly justify their own proposals, attempt to win over the people who would be casting votes on the future of their program, and thus gain control over New Deal employment policy.
While the NEC’s structure did not please administrators of either the WPA or PWA, who had hoped for exclusive control of the federal program, it was nonetheless the result of years of advocacy on both their parts. Virtually from the moment that he had arrived in Washington as the new secretary of the interior, Harold Ickes had pushed for a “major program of public works,” calling for a $5 billion appropriation.13 Rebuffed by a still-hesitant FDR in the early days of the New Deal, Ickes had persevered, bringing together allies such as Frances Perkins, Rexford Tugwell, Donald Rich-berg, Raymond Moley, Senator Robert Wagner of New York, and even his erstwhile rival Harry Hopkins into a loose pro-spending caucus within the New Deal.14 These policymakers had collaborated on passing the $3 billion in public works attached to the National Industrial Recovery Act of 1933 that had funded the PWA and the CWA; they also allied against antispending advocates such as Lewis Douglas. In the Emergency Relief Appropriation Act of 1935, this coalition had achieved a real victory in expanding the fiscal footprint of the New Deal.
The stakes for both public works and direct job creation were higher than ever before. Previously a sideshow to political struggles over the NRA and Social Security, the Emergency Relief Appropriation Act of 1935 pushed the issue of work relief and public works into the spotlight of national politics, with presidential messages placing FDR’s prestige behind the effort, and a massive source of funds independent of NRA or the Social Security Board. To win in the ACA would mean more than success for the WPA or the PWA as government departments; it would signal that the ideas behind these programs would become integral to the New Deal, and it would become the means by which the mass unemployment of the Great Depression would be defeated.
Two Visions of Relief and Recovery
When the members of the WPA and the PWA sat down around the long, dark table of the Cabinet Room to fight for their proposals in the spring of 1935, they brought with them more than bureaucratic imperatives and printed charts—they also carried their own intellectual heritage that explained, justified, and legitimated their policies. To understand the arguments made by both camps and the impact they had on the outcomes, one must first explore the intellectual background of these competing ideologies.
In One Corner: The Works Progress Administration
The WPA’s Economic Theory
As described in Chapter 1, the chief administrators of the WPA had begun to develop an economic theory during their time at the Federal Emergency Relief Administration (FERA) and the CWA. It stood on three legs. First, Jacob Baker’s purchasing power theory diagnosed the Great Depression as a crisis of mass unemployment caused by a collapse in consumer demand. He therefore recommended direct hiring of the unemployed as the most efficient means of both boosting consumer spending and reducing unemployment. Second, Corrington Gill’s institutional analysis of the labor market showed that the confluence of structural and cyclical unemployment would trap the country in permanent double-digit unemployment unless the government intervened,
