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Chapter 2

People or Projects

The Works Progress Administration Versus the Public Works Administration Reconsidered as Economic Theory and Ideology

The Cabinet Room of the White House is dominated by a single long table, an oval of darkly gleaming wood. Containing stark white walls, heavy leather chairs, and rich carpeting, the room resembles nothing so much as a turn-of-the-century corporate boardroom, a place of probity and prudence (or of corruption and ruthlessness). But in 1935, the Cabinet Room was a different kind of place altogether—it was the meeting place of the National Emergency Council (NEC) and, more specifically, the NEC’s 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, from the NEC’s ACA to the WPA itself.

Characteristically, 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, and he argued that direct job creation could accomplish recovery without destabilizing the private sector. Third, Lewis Baxter formalized their arguments into a model of the U.S. economy that had the public and private sectors as complementary halves that could produce full employment to absorb the whole of the labor-market surplus, and he argued that the business cycle could be corrected by public action.

These precepts would shape the WPA’s thinking and action in 1935. First, it convinced Hopkins and his aides that the scale of response was critical to the success or failure of direct job creation. Second, it made the WPA’s experts skeptical about whether traditional public works were capable of generating sufficient employment to close the employment gap in full. For the WPA then, the competition over the ERA funding was about more than money.

The WPA’s Ideology

Job creation advocates had already begun developing an ideology in 1933–1934, inspired by the new “democratic philosophy of relief.”

It departed sharply from the old poorhouse ideology of the eighteenth and nineteenth centuries that had dominated American social welfare policy.¹⁵ Traditionally, the unemployed were seen as morally corrupt (thus requiring social control and reform) and responsible for their own sad plight. More important than this moral-flaw diagnosis, though, policymakers believed that work was inherently painful and undesirable. Fear and coercion had to be applied to drive the working class through the factory gates. FERA administrators rejected this view altogether. Their direct experience with the unemployed made it clear that the poor were perfectly ordinary workers who were cut off from employment by forces beyond their control, and that they wanted nothing more than to find work.

Much like the radical social workers in the 1960s and 1970s who fought for welfare rights decades after the Depression, direct job creation advocates in the 1930s wanted to eliminate the invidious distinction between the “worthy” and “unworthy” poor. For them, work was the ideal vehicle for accomplishing this aim. In contrast to traditional paternalism, they came to view work as an expression of the creative spark and a critical component of self-worth in industrial society as opposed to a penalty imposed by capitalism. The provision of employment to the destitute unemployed was refigured from the terror of the Victorian workhouse to a liberating force that would restore morale, skills, and ultimately economic citizenship.¹⁶

Countless interviews with relief clients undertaken by FERA social workers and millions of CWA job application interviews both bolstered the findings of opinion surveys and made it clear that the unemployed overwhelmingly preferred work over relief. Moreover, work clearly had a psychological impact above and beyond the provision of income: unemployed workers hired onto job creation schemes developed a militant self-image that associated work with heroic masculinity. CWA workers described themselves in their newspapers as an “army of the unemployed” who would “slay the dragon of the Great Depression through work,” and they lionized a New York City administrator who died at his desk as a modern Leonidas at Thermopylae who had been “KILLED IN ACTION.”¹⁷

These influences led the experts who had worked for FERA, CWA, and now the WPA to expand direct job creation’s ideological objectives to encompass the “right to the job.” During his time on the Committee on Economic Security (CES) in 1934, Jacob Baker had argued that economic security had to begin with “job assurance for all…. [T]his will provide security for those who are now working as well as those at present employed” in that job assurance would give current workers the knowledge that, should they lose their jobs in the future, the government would provide new ones for them.¹⁸

This certainty offered an entirely new relationship between the citizen and the state. “If a government job is certain for every employable person,” Baker argued, “he will have economic security through job assurance,” as opposed to economic security through social insurance.¹⁹ As he saw it, this required a major sea change in federal policy—the government must “make certain that every employable person at the bottom get a job. Employment should gradually ascend the scale of need as far as necessary at any moment,” over time becoming an expected right for workers displaced by economic downturns.²⁰

At the time, this perspective was held by only a few, even within this circle of experts. However, in the critical period between the completion of the work of the CES and the passage of the ERA, this kind of thinking had begun to spread well beyond Baker. In 1935 memos to President Roosevelt, Hopkins and his aides called for a “fresh, vital … real employment program” to take the place of work relief.²¹ As part of a “Program for Social and Economic Security,” they “propose[d] as fundamental policies … that the government assume the obligation of providing the opportunity for gainful work for all its citizens able and willing to work” (a phrase that would reappear in 1945).²² After the passage of the ERA, they went even farther: the act, they argued, implied that the government had “assumed the responsibility for those thrown out of work by the depression.”²³

In addition to their growing commitment to the right to a job, WPA advocates came to see a sharp division between their views and those of PWA partisans intent on building traditional public works projects. The competition between these two schools sharpened their differences. After all, if direct job creation was to be the “fresh, vital” alternative to the status quo, it would have to displace both the PWA and public works. Throughout 1935, therefore, the WPA studied its rival and developed arguments about both why direct job creation was superior and why the counterargument could undermine the WPA.

Using the PWA’s own statistics against them, WPA analysts were convinced the PWA could not possibly achieve the goals of an expanded employment program, due to its insistence that local communities take out and then repay federal loans in order to keep the federal government’s balance sheet in balance. Local communities could not really afford to contribute more than 30 percent of the total costs of a job program, even with $10 million a month in additional federal support if communities borrowed money for self-liquidating projects.²⁴ Moreover, the heavy construction favored by the PWA would dramatically increase nonlabor costs (land, materials, and machinery), which consumed 55 percent of the PWA’s budget. By contrast only 37 percent of PWA spending went to direct labor costs—so a PWA model would produce relatively few jobs per dollars spent.

Using FERA and CWA statistics, Baker estimated that the new WPA could limit nonlabor costs to 30 percent of the total, while providing federal grants rather than loans.²⁵ In this way, poor communities where the unemployed and the poor were concentrated could actually be assisted by the federal government. Crucially, nonlabor costs would be limited, allowing a focus on the job-creating potential of a given amount of federal spending rather than fiscal orthodoxy.

This last point was the most ideologically salient—economic theory had primed WPA bureaucrats to think of larger payrolls as the straightest line to recovery; their growing commitment to the idea of a right to a job made every additional job that could be created out of the ERA’s appropriation both an economic and a moral advance. Direct labor and nonlabor costs allowed them to quantify the virtues of the two approaches. Every percentage of ERA funds that could be wrested from nonlabor to labor costs meant thousands and thousands of people saved from destitution. At the same time, the WPA’s experts were well aware that the great mass of the unemployed to whom they had provided relief through FERA and jobs via the CWA were overwhelmingly unskilled workers who had been out of the private labor market for several years. Private contractors who worked with the PWA preferred to use skilled workers, who knew how to use machinery to maximize productivity and minimize labor costs. If the PWA’s model were to succeed, the unskilled unemployed would have no place.²⁶

In 1935, this was the ideology of the WPA, influenced by ideas about unemployment rates and consumer demand, rooted in an identification with the poor as frustrated workers and with work as a liberating force, and convinced that traditional public works would condemn millions to poverty. These policymakers cut across two tracks of social policy. The WPA primarily served a clientele that composed mostly white men, blue-collar workers but also professionals, and frequently older men who were heads of households. (Younger men were covered by the CCC, and school-aged men and women were covered by the National Youth Authority [NYA].) After the New Deal, these workers would be covered by social insurance, which was a source of privilege and a spur to postwar inequality, as Ira Katznelson shows in his book When Affirmative Action Was White. Moreover, WPA clients contributed their labor in the same way convention retirees were seen to have “earned” their Social Security benefits through contributions deducted from their wages. That parallel put the WPA in a different light from noncontributory welfare programs.

Yet direct job creation was not wholly within the boundaries of social insurance, because it hired from among the ranks of those on relief. As much as they tried to also incorporate the unemployed not on relief, at the end of the day, the administrators of the CWA and WPA had to deal with the fact that there were twenty million Americans on relief, of whom 3.5 million were able-bodied unemployed workers that desperately needed jobs. As much as we would hope that the public would view them compassionately, more traditional attitudes that singled out those on relief as members of the “unworthy poor” (by making them take the pauper’s oath, for example) persisted.²⁷ This attitude continued despite the fact that these workers were older white males, complicating the narrative of public assistance as an inherently female and nonwhite “track.”

Thus, the WPA existed between social insurance and social welfare, neither one nor the other.

The WPA’s Plan of Action

As a first step toward the right to a job, direct job creation advocates had developed a plan for action, using the CWA as a model. The WPA would employ the jobless, pulling as many as possible off the unemployment rolls.²⁸

In 1934, these experts (then working for the FERA and the CWA) modeled a number of different scenarios in a series of studies, including “The Cost of an Expanded Public Employment Program,” “Summary of Relief Requirements,” “The Work Program,” “A Plan to Give Work to the Able-Bodied,” “Comparing PWA to FERA,” “Transition from Work Relief to the Work Program,” “The Works Program,” “Two Pages on Politics,” “Memorandum to the President,” and “A Program for Social and Economic Security.” They ended with “A National Work Program.” Collectively, these reports represent a spectrum of proposals, of which the initial plan to extract 3.5 million workers from relief rolls was only the starting point.

Following these proposals, Emerson Ross, Jacob Baker, Gill, and others in the WPA crafted a series of plans that sought to mimic the size of the CWA, providing three million jobs to relief workers and an additional 1.5 million jobs for the unregistered unemployed, on a long-term basis. Other proposals envisioned a graduating job program for six to eight million, where the majority would be ordinary, unemployed workers who had “graduated” from the ranks of relief recipients back into the status of “regular” workers. At the high end, WPA administrators proposed offering jobs to 60–80 percent of the unemployed, and they couched the plan as a first step toward realizing the right to a job.²⁹ Their ambitions grew over time. In the early part of the year, they were thinking in modest terms. By October they were up to six million—covering a majority of the unemployed.

Rather than their ultimate goal, 3.5 million jobs was the minimum number that the WPA advocates were willing to live with, corresponding to the entire “employable” population of the twenty million on relief.³⁰ While the WPA leadership hoped to be universal and take every person in need of work, the somewhat limited financial scope of the ERA led them to restrict their program to those most in need of support: relief clients who had been unemployed the longest, and heads of households (to uphold gender norms and spread available support across as many households as possible). However, they continued to plan for the future and lobby for an expanded job program down the road that would more closely resemble a universal “right to a job.”

Similarly, while WPA planners sought to establish wages well above the paltry limits of relief or work relief, they were trapped between their desire to hire as many people as possible and the limited amount of federal funds provided by the ERA. Wages would have to take a seat behind jobs as a priority. WPA administrators were willing to continue their policy of offering “security wages,” based on wage rates of relief programs. Some of them, like Gill, feared higher wages would disincentivize workers from accepting job offers from the private sector, if the latter offered wages lower than government scale—but most of them accepted the policy only as a matter of necessity and a way to maximize the number of jobs created. Even so, not a few WPA staffers welcomed more expansive “prevailing wages” when they thought it politically possible and also when they could win additional appropriations to pay for it.

Baker and Ross especially were creative about finding projects that were low in materials and equipment costs but very labor-intensive. Baker pointed to the “improvement of public resources” and publicly owned utilities and also included “housing and building construction for low-income groups and impoverished communities” and “production and distribution of goods needed by the unemployed” as key fields of action.³¹ A common thread there was attending to the human needs of city dwellers: “low-cost housing for cities” was conceived of as part of a package with “schools, auditoriums, community houses,” or “fuel, clothing, bedding, shoes, household furnishing, and a variety of food products.”³² These goods transcended the boundaries between public and private, which under a new WPA would be provided by and for the poor, under public auspices. Each category of goods was defined in terms of the workers it could employ. Public parks and utilities were thought of as skilled and common labor projects; production for use required factory, textile, and clothing workers (and were more likely to include women).

WPA analysts had a firm understanding of the difference between what they wanted to do and what public works traditionally did. In their minds at least, direct job creation and public works were two very different policies. As Baker explained in one of his policy memoranda, “The greatest difference between the programs … is in the fact that [direct job creation] is based on the maximum decentralization, a maximum use of force account, and an insistence that the one in need be the center of attention. This centering on individuals [sic] would be impossible if he were to be grouped in the usual [public works] contract methods.”³³

His perspective conforms to the “jobs-first” thinking of the WPA by devoting the maximum percentage of funds to wages rather than machinery, materials, land, and profits (as was the case under traditional public works). Light construction projects were deemed preferable and given priority in the WPA because they provided for human needs, such as housing, education, and health care, rather than for the needs of industry. WPA advocates always viewed the projects themselves as more of a by-product of employment rather than the ultimate goal of their program. Production provided added legitimacy to direct job creation in the sense of “balancing” labor costs with production values and forestalling accusations of “boondoggling,” but the ultimate objective was putting people back to work.

Job creation advocates did share certain ideas with their counterparts in the PWA. Both WPA and PWA staffers saw housing as a critical issue. Baker referred to housing as “a great present need of the country.” Paralleling the arguments of PWA advisors, Baker wrote that “this is particularly true of low-cost housing which has to be built under public ownership so that it can be financed so that it can be developed without the heavy cost of private financing.”³⁴ Even the WPA, with its focus on job creation, could not ignore the importance and potential of the product it intended to create.

Duration was also critical. The WPA’s administrators did not want their program to appear either “temporary” or “emergency.” Because their economic theory emphasized mass unemployment as a characteristic of “normal” economic life in a capitalist system and their ideology included work as a basic social right, WPA advisors like Gill argued that there was a need for a permanent job system. Just as social insurance advocates believed that a permanent Social Security Board would allow them to modernize their field, Gill called for a “permanent Federal Department of Welfare” to ensure “coordination of the functions of existing agencies on all three levels of government, increasing adequacy of benefits, and extension of public assistance.”³⁵ A permanent department would have a “civil service staff” to ensure professional expertise, and “a change in the manner of making appropriations to permit great correlation between the extent of unemployment and the size of the program,” a policy that would permit both greater independence and permanent, countercyclical planning.³⁶

The dream of a permanent status is visible in Gill’s proposal for the organizational setup of an independent WPA. He envisioned a Cabinet department, with a permanent bureaucratic structure. This “Federal Works Authority Board” would report directly to the president and link up with the NRPB to engage in economic planning that would coordinate a broad range of programs—conservation, rural electrification, drought and erosion programs, housing, poor relief, federal departments involved in construction, public work, and public works.³⁷ It was a broad and ambitious agenda that would see the WPA become the center of virtually every plan or program that interacted with poor and working-class Americans. It would be married to major intellectual movements of national planning and administrative reorganization; it could become an NRA for the American worker.

Even Baker, whose proposals often differed dramatically from Gill’s, shared this enthusiasm for a united and permanent system. In his 1934 proposal titled “A Program for Social and Economic Security,” Baker argued that “the Federal Emergency Relief Administration should be abolished and in its place there should be established a Department of Social and Economic Security.”³⁸ This proposal especially stressed the virtue of permanence: “a work program of this sort should be promoted from a central place in Washington—a single cabinet department” that could provide “central controls, engineering, and financial standards.”³⁹

When we consider the amount of time and energy devoted to proposals for permanent job programs and a Cabinet-level department devoted to work or social welfare, it becomes clear that the WPA leadership no longer thought of its remit as a temporary response to economic calamity. Instead, it was a durable institution because capitalism displayed periodic imperfections that resulted in debilitating unemployment.⁴⁰ While the WPA’s continued existence ultimately depended on the $4.88 billion authorized by the ERA and subsequent legislation, Gill, Baker, and others continued in their efforts to win a permanent status and viewed the scramble for the lion’s share of the funds as merely the first step in achieving their ambitions.

In multiple funding proposals put forward in 1935, the WPA’s advisors were unanimous that, in its first year, the WPA would require $1.8 billion to operate a job program for at least three million. Even to complete its first ten months would require $855 million. To expand the program to create 3.5 to 4 million jobs would require $3 billion a year.⁴¹ To get this money, given the limitations of the ERA’s appropriation, WPA planners needed to win the majority of unallocated funds and even get their hands on funds already allocated to the PWA and other programs that had not yet been spent. Since they had managed to grab $400 million of the PWA’s money to fund the CWA a year or two earlier, WPA experts turned their attention to the PWA as their rival in the work program.

Thus, by the time that the WPA’s proposals were brought to the ACA, they contained an economic theory that explained the Great Depression and how it could be fought, a political ideology that explained why the government’s response to the Great Depression should be the provision of jobs, and a plan for action that sought to use force account (i.e., direct employment by the government), light construction, and rapid mobilization to realize theory and ideology. The fiscal demands of these plans would limit the scope for compromise and shift the outcome toward a zero-sum game.

In the Other Corner: The Public Works Administration

In 1935, the PWA was in a strong political and intellectual position. To begin with, its advocates had more experience. They had lobbied longer and thought harder about the purposes of public works.⁴² In 1932, long before the advent of the New Deal, progressive senators such as Robert Wagner (D-NY) and Robert LaFollette (Progressive-WI) and congressmen like Sam Garner (D-TX) had pushed through a public works program over President Hoover’s opposition. They were seeking countercyclical reforms and had staked their public influence on battles over municipal socialism a generation earlier.

Ickes aimed to burnish the public image of his agency by emphasizing probity and efficient use of public funds, which gave public works a certain amount of political cover against accusations of inefficiency and corruption.⁴³ Moreover, after three years of operation, the PWA had built up a strong clientele of supporters—construction firms, contractors, and subcontractors’ lobbies. American Federation of Labor (AFL) craft unions in the building trades, as well as heavy-industry lobby groups, profited from the demand for steel and concrete and similar products; hence these groups saw the PWA as a life raft in a time of desperation. Public works was comfortable, familiar, operated through time-honored contracts that offered “cost plus” guaranteed profits, and allowed contractors to operate freely.

A PWA chart regarding the “estimated total value of construction” showed that the volume of construction grew from $11.5 billion in 1925 to $12 billion in 1928, with private construction making up 78 percent of the industry and public construction a mere 23 percent. When the Great Depression hit, the volume of construction fell rapidly from $12 billion in 1929 to only $3 billion in 1933. The biggest toll was on the private side. Public construction held relatively steady. As a result, the ratio shifted dramatically, so that by 1932, the public/private ratio was exactly 50–50.⁴⁴ (As the New Deal’s public works programs came online, this pattern would continue until after World War II, with public construction averaging 54 percent of all new construction from 1933 to 1945.⁴⁵) As these figures make clear, the PWA had become the driving force in American construction, equal in size to all other firms put together, and in its impact it was much larger, given the critical importance of both its contracts to general contractors and subcontractors and its orders to materials firms.

The PWA cannot be understood solely for its material benefits, however. Ickes, his subordinates, and especially the civil engineers who staffed the institution all traded on their own vision of political economy, their own ideology, and their own plan for action, rooted within the mainstream of New Deal policies. In every way, the PWA was an equal contender to the WPA.

The PWA’s Economic Theory

The vision of political economy that the PWA’s administrators shared was broadly in sync with a variety of economic theories shared by the New Deal Left. They embraced a relatively loose understanding of countercyclical action that in 1935 had yet to be transformed by the theories of John Maynard Keynes. They admired the Soviet Union’s Five-Year Plans that had achieved rapid industrialization and modernization. They were convinced that economic planning was the solution to the Great Depression.⁴⁶ The common thread was an understanding of the Great Depression as a crisis primarily in production, and only secondarily in consumption.⁴⁷

From the perspective of PWA administrators, industrial corporations had overproduced in the 1920s, especially in the realm of capital goods. Supplies used to construct new factories, railroads, and highways—all the goods needed for an expanding economy—were left on the sidelines without sufficient buyers. When demand for these goods failed to clear the market, a glut produced paralysis in the core sectors of the economy. Producers sat on overpriced stocks of material and then slashed production in response. The glut led them to stave off restarting production even when the economy started to improve. The economy was experiencing a “demand crisis” to which the only effective response was government purchasing to stimulate demand. Contracts for public works construction increased the demand for raw materials.

In contrast to the proposals of the WPA, the PWA would create jobs indirectly, “bubbling up” from the foundations of the American economy. As Ickes wrote, “Who is to say which is the more important—the laborer who pours the cement at the dam, the one who digs the limestone in the quarry, or the one who hauls the finished product? … In all three cases they are usually workmen who, if not for the PWA program, would be unemployed.… PWA is giving employment all down the line and any distinction between direct and indirect labor is both misleading and unimportant.”⁴⁸

In addition to this immediate, countercyclical recovery effect, the PWA experts hoped that public works would also advance a different kind of public intervention into the economy: long-term economic planning led by government agencies whose actions would produce new avenues for growth and smooth out the business cycle.⁴⁹ In the minds of PWA experts, public works would be both economically progressive and fiscally prudent.

The PWA’s “National Construction Plan” exemplifies the theory. It characterizes the Great Depression as primarily a failure in the construction market: “From 1925 through 1929 total dollar volume of annual construction was within the range of $[11 billion] to $[13 billion]…. It is estimated that private construction at the present time is at the rate of $[2.5 billion] to [3 billion] a year.”⁵⁰ To reverse this trend, the PWA advocated boosting production, rather than enhancing consumer demand—“a government program of $[5 billion] a year would bring the total construction volume to the figure mentioned about as representing an adequate amount of construction to give a volume of employment equal to that prevailing from 1925–1929.”⁵¹ The emphasis here is on the material factors, the volume of construction, the works themselves, as the key factors driving the economy.

Back to Work: The Story of the PWA, Ickes’s account of the program’s history and importance, focuses on the multiplier and transformative effects of new production relative to new consumption: “Wide highways offer possibilities of easier and more profitable trade for the farmers; higher standard of living for his family,” he noted. “Upon roads depend the prosperity of millions…. [A]t the present time the greatest potential source of national wealth lies undeveloped in our rivers…. [E]ach gallon of water falls is a possible source of electric current, which possess the god-like qualities of heat, power, and light.”⁵² Public institutions had the capacity to expand and improve the physical and moral environment of the United States. As Ickes put it, “Roads bring civilization.”

FDR’s economic planners were all convinced that eliminating unemployment was critical. But the road to that end wound through different policies. The WPA sought to use direct job creation to lower joblessness, while the PWA thought the same thing could be done indirectly through the multiplier effect of public purchases. For the latter, public works would produce substantial numbers of government jobs (the PWA employed some 650,000 people in 1935, after all). But the real impact would come in “secondary effects” as moribund core industries fired up the plants to meet new orders and then brought back their old workers. This was the key argument of the “National Construction Program”: