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Letters Calling for Reductions in Expenditures for Construction.

August 03, 1946

[Released August 3, 1946. Dated August 2, 1946]

To the Secretary of War:

My dear Mr. Secretary:

The Acting Director of the Bureau of the Budget has heretofore informed you that I plan for 1948 not only to balance the Budget but to manage the fiscal program of the Government so that a substantial surplus may be used in the reduction of the national debt. If this is to be accomplished and we are to continue with a balanced Budget in subsequent years, it is essential that we hold back our capital outlay for construction so that we do not commit the Government to heavy expenditures either for fiscal 1947 or for subsequent years by initiating too much work at this time. We must go ahead with some programs that are absolutely necessary, such as the veterans' emergency housing program and the veterans' hospital program. In each public works program we should keep in mind the conservation of materials with which to accomplish the most necessary construction. We should at the same time be careful not to interfere with private construction and the overall job of reconversion.

The Federal Government should not compete with private industry for scarce materials, neither should it compete in any area for scarce labor. To do so is to add to inflationary pressures and, in effect, to retard reconversion. Accordingly, it is my desire that all postponable public works be deferred until private demands for goods and services slacken off.

In order to carry out the above program of curtailment of public works, the Director of War Mobilization and Reconversion will issue a directive providing that for a period of sixty days, until October 1, 1946, there will be a moratorium on new Federal public works, contractual obligations, and force account work. This directive will also provide that after October 1, 1946, there will be a screening of Federal construction programs before any new commitments of Federal funds can be made.

In accordance with this deferment program, I ask you to take steps to limit expenditures and commitments for future expenditures where possible, through postponement of work on all projects which can be deferred. I would like you to so plan your work program that maximum total expenditures will not exceed $95 million for flood control for fiscal 1947 and $110 million for fiscal 1948. Likewise, will you limit the expenditures for rivers and harbors and related work to $90 million for fiscal year

1947 and $95 million for fiscal year 1948. Within the latter two limitations, I will expect you to hold the expenditures for new work in each year to $25 million. In addition, I ask you to explore and recommend any possible further reductions, especially for fiscal 1947, below the figures above mentioned for flood control and river and harbor work. For above civil functions, such as cemetery operations, I would like to have your judgment as to the possibility of planning an expenditure program in consonance with the above efforts towards expenditure limitation.

Please let me know promptly the measures you take to carry out these instructions.

Sincerely yours,

HARRY S. TRUMAN

Note: Similar letters were also addressed to the Secretary of Agriculture, the Secretary of the Interior, David E. Lilienthal, Chairman of the Board of Directors, Tennessee Valley Authority, and Thomas H. MacDonald, Commissioner, Public Roads Administration, Federal Works Agency, requesting that construction expenditures for their respective agencies be kept to a minimum consistent with curtailed activities in other Federal public works. Maj. Gen. Philip B. Fleming, Administrator of the Federal Works Agency, was sent a copy of Mr. MacDonald's letter together with a similar request regarding public works activities in the Federal Works Agency.

Harry S. Truman, Letters Calling for Reductions in Expenditures for Construction. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/231991

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