Evening star., 1932-05-23

and indirectly for one year niore than
% 900 men. distributed over 20 different
States. An arrangement was con-
cluded by which the Reconstruction
| Corporation undertook to stand behind
the plan to the extent Of $4,000 900
the railway company finding the bal
ance. This s27 900 is to be loaned
on sound securities and will be returned
capital and interest, to the corporation
"Direct Charge on Taxpayer"
THE Reconstruction Corporation is
acting as agent to make available other
wise timid capital for the Pennsylyania
Railroad in providing employment
There is no charge upon the taxpayer.
On the other hand, the proposal Of the
House of Representatives is to spend
S132, ,000,00 for subsidies to the States
for construction Of highways. This
would be a direct charge on the tax
payer. The total number of men to be
directly employed is estimated at $4,000
and indirectly 10000 more. In other
words, by this action We would give en-
| ployment to only 5000 men at the
expense by the Government of s132,-
| 900. 900. which will never be recovered
In the one instance we recover the
money advanced through the Recon-
| struction Corporation. We issue no Gov
! ernment bonds, We have no charge on
| the taxpayer. In the other instance we
have not only direct cost to the tax
payer, but also a continuing mainte-
nance charge, and, furthermore, the
| highways in many sections have now
been expanded beyond immediate pub
| lie need.
o1c ~
sion of public works have a vital re-
lation to balancing the Federal budget
and to the stabilizing of national credit.
| The financing of income producing
works by the Reconstruction Corpora
| ton is an investment operation, requires
no congressional appropriation, does
not unbalance the budget, is not a
drain upon the Treasury, does not in
volve the direct issue of Government
bonds, does not involve added burdens
upon the taxpayer either now or in the
| future. It is anemergency operation
which will liquidate itself with the re-
turn Of the investor to the money mar
kets
| tive public works of the category ]
have described necessitates making in
creased appropriations by the Congress
These appropriations must be financed
| by immediate increased taxation or by
the issuance of Government bonds
| Whatever the method employed, they
are inescapably a burden upon the
taxpayer. If such a course is adopted
| beyond the amounts already provided
in the budget now before Congress for
the next fiscal year, it will upset all
possibility Of balancing the budget; it
will destroy confidence In Government
securities and make for the instability
OF the Government, which in result will
deprive more people of employment
than will be gained.
Public Works" Expanded.
-. have for many years advocated
the speeding up of public works in
times OF depression as an aid to bust
ness and unemployment. That has been
done upon huge scale and is proceed
ing at as great a pace as fiscal stability
will warrant. All branches of govern
ment-Federal, State and municipal
have greatly expanded their public
works and have now reached a stage
where they have anticipated the need
for many such works for a long time
to come. Therefore, the new projects
which might be undertaken are of even
more remote usefulness.
From January, 1880, to July /, 1882,
the FederA Government will have ex-
pended S1,500,000,0 900 on public works.
The budget for the next fiscal year
carries further $575,00O,000 of such
expenditures compared with about
S250,O00,000 normaD and includes all
| the items I have felt are justified by
sound engineering and sound finance.
Thus by the end of next year the
Federal Government will have expend-
ed over $4,000 100000 on public works,
which represents an increase over
normal of perhaps $1,000, ,o00,0 900. Thus
We have largely anticipated the future
and have rendered further expansion
remote usefulness and certainly not
justified for some time to come, even
were there no fiscal difficulties. They
represent building of community be-
yond its necessities. We can not thus
squander ourselves into prosperity.
IS. A still further and overriding
reason for not undertaking such pro-
grams of further expansions Of Federal
public works Is evident If we examine
the individual projects which might be
undertaken from an engineering and
economic point Of view. The Federal
public works now authorized by law
COVcI WUIkS WHICH IL was ulttIlUSu W
construct over long term of years and
embrace several projects which were
not of immediate public usefulness. In
any event. the total of such authorized
projects still incomplete on the 1st of
July will amount TO perhaps $1,000, ,000,-
600. If we deduct from this at once
the budgeted program for the next
fiscal year-$575,0 ,000,00O-we leave
roughly S725, 100000 Of such authorized
works which would be open for action.
If we examine these projects in detail,
we find great deductions must be made
from this sum.
Take Years for Completion.
CONSTRUCTION Of many projects physi-
cally require years for completion, such
as naval vessels, buildings, canalization
Of rivers, ETC., and therefore, as an
engineering necessity. this sum could
only be expended over four CT five
years. A portion of the projects not
already started will require legal and
technical preparation and therefore
could not Be brought to the point Of
employmaAt It labor during the next