Evening star., 1932-05-23
Text of Hcover's Letter
Writes Richard S. Parker, of Society of Civil
Engineers, Expressing Opposition to Bond Issues
For "Non-Productve" Public Works.
Nv the Associated Press.

BY the Associated Press.
The text Of President Hoover's letter
Yesterday to Herbert S. Crocker, presl-
dent of the American Society OF Clvl!
Engineers, follows
4 am in receipt Of your kind letter
Of May 10, and have also the presen-
tation of the subcommittee OF the So
-iety suggesting that the depression
can be broken by a large issue OF Fed
eral Government bonds to finance new
program of huge expansion OF PUBIC
works construction, in addition to the
already large programs now provided
for in the current budgets. The same
proposals have been made from other
quarters and have been given serious
consideration during the past few days
Lists Possible Aid Measures.
"The back of the depression cannot
be broken by any single Government
undertaking. That can only be done
with the cooperation of business, bank
ing. industry and agriculture IN con.
junction with the Government. The aid
the Government may give includes:
"(A) The quick, honest balancing OF
the Federal budget through drastic re-
duction of less necessary expenses ano
the minimum increase in taxes.
"(B, The avoidance Of issue OF FUR
ther Treasury securities as the very
keystone of national and international
confidence upon which all employment
rests.
"1C) The continuation of the work
of the Reconstruction Corporation
which has overcome the financial strain
on thousands Of small banks, releasing
credit to their communities, the
STRENGTHENING of building and loan as
sociations, the furnishing OF credit to
agriculture the protection Of trustee in
stitutions and the support OF financial
stability of the railways.
"(D) The expansion Of credit by the
Federal Reserve banks.
"(E) The organized translation OF
these credits into actualities FOR busi-
ness and public bodies.
"(F) Unceasing effort at sound
strengthening of the foundations OF
agriculture.
"(G) The continuation Of such pub
lie works In aid to Unemployment as
does not place strain on the taxpayer
and do not necessitate Government
borrowing
"CD Continuation of national, com.
munity and individual efforts in relief
Of distress.
"(D The introduction Of the five-day
week in Government, which would save
the discharge of 100000 employees and
would add 10000 to the present list.
"(O The passage of the home loan
discount bank legislation, which would
protect home owners from foreclosure
and would furnish millions OF dollars OF
employment in home improvement
without cost to the Treasury.
"CK) Financial aid by means OF loans
from the Reconstruction Corporation to
such States as. due to the long strain,
are unable to continue to finance dis
tress relief.
cd The extension Of the authority
Of the Reconstruction Corporation not
only in a particular I called attention
last December-that Is, loans ON sound
security to industry where they would
sustain and expand employment-bu:
also in view of the further contraction
of credit to increase its authority to
expand the issue of its own securities
up to $1,000 ,O0o,000 for the purpose OF
organized aid to income producing
works throughout the Nation, both OF
public and private character.
Remote Usefulness"
II. The vice in that segment Of the
proposals made by your society and
others for further expansion of pub
lie works is that they include public
works Of remote usefulness; they i'm
pose unbearable burdens upon the tax
payer; they unbalance the budget and
demoralize Government credit. A larger
and far more effective relief to un-
employment at this stage can be Sc
cured by increased aid to income
producing works
'I wish to emphasize this distinction
between what for purposes of this dis
cussion we may term income producing
works (also referred to as self
Iquidating works) on the one hand
and productive public works on
the other. BY 'income-producing works
I mean such projects of States, counties
and other subdivisions as Waterworks.
toll bridges, toll tunnels, docks and any
other such activities which charge for
their service and whose earning ca
pacity provides return upon the in
vestment.
with the return Of normal times
the bonds of such official bodies based
upon such projects can be disposed of
to the investing public and thus make
the Intervention of the Reconstruction
Corporation purely an emergency ac-
tiv1ty. I include in this class aid to
established industry, where it would
sustain and increase employment, with
the safeguard that loans &c thase DUR
poses should be made on sound Sc
curity and the proprietors of such in
dustries should provide a portion of
the capital.
productive public works in the
sense Of the term here used include
public buildings, highways, streets, river
and harbor improvement, military and
Navy construction, etc., which bring no
direct income and comparatively little
relief to unemployment.
"2. can perhaps make this distinc-
ton clear by citing the example of the
recent action of the Reconstruction
Finance Corporation IN the matter Of
the Pennsylvania Railroad Co. on one
hand, and the recent bill passed by the
House Of Representatives for increased
road building on the otheA The railroad
company applied to the Reconstruction
Corporation for loan of 4s5, ,000, 900 to
help finance fund of over S6S, S,000, 900
needed to electrify certain Of its lines.
By 20 doing 1t would employ directly