Statement on Emergency Relief and Construction Legislation.

THE PRESIDENT said:

"I am glad to see the adoption by the Senate and House of the principle of generous relief to unemployment. They have adopted the major provision for which I have been contending by proposing to extend the authority of the Reconstruction Corporation to use its credit to make advances on adequate security up to $1,500 million for construction work of the type which will pay for itself, and for which plans are immediately ready and therefore can begin the employment of men. The Senate has also adopted the principle for which I have asked of $300 million loans from the Reconstruction Corporation to the State governments who are not able otherwise to finance their relief of distress. While these features in the Wagner and the Garner bills are not in the form and are not as well safeguarded as they should be, they are in line with major objectives I have been advocating.

"On the other hand, I intensely regret that these major provisions for relief of unemployment in both the Garner and the Wagner bills should have been made the vehicle for committing the Federal Treasury to the expenditure of from $500 million to $1,200 million for nonproductive public works because these provisions have the triple vice of being a charge on the taxpayer, of unbalancing the budget and of providing only a small amount of employment and that to a large extent in localities where it is not needed.

"Any study of many of these public works provisions will indicate plainly their pork-barrel characteristics. A large part of the expenditures proposed are wasteful in the present times. They impose tremendous future costs on the people for maintenance; they are not economically needed. Much of it represents a squandering of public money. Much of it is mechanicalized work. The reports of the different technical bureaus of the Government show that they would produce direct employment during the next year to an average of less than 100,000 men out of the many million unemployed.

"These expenditures cannot be recovered; they must be met by the taxpayer now or in the future. In order to execute them appropriations must be made to different departments and thus a deficiency created in the budget of anywhere from $500 million to $1,300 million. Such a deficiency cannot be disguised by accounting phrases. We have worked for 4 months in heartbreaking struggle to bring about a balanced budget. We have imposed $1,100 million in taxes upon the people; we have reduced Government expenditure by $600 million or $700 million through which many Government employees will have lost employment all in order that we might maintain the integrity of Federal credit. To start now to break down that credit and stability will result in the eventual unemployment of far more men than this comparatively few who are benefited. We cannot restore employment in the United States by these methods.

"It would be far better to increase the authorizations to the Reconstruction Corporation to make loans for reproductive works which will be repaid by the additional amounts proposed for nonproductive public works than to resort to these dangerous courses. It also would give more actual and continued employment.

"There is another phase of the bill as passed which is disheartening. The $300 million which I recommended should be loaned to such States as are unable to finance care of their own distress were to be made on proper loan terms, and the whole sum was to be available for application to the points of need. It has been transformed into a pork barrel operation by being apportioned amongst all States according to population, irrespective of their needs. The amounts assignable to States which have major burdens of unemployment are insufficient for their purpose, and the great majority of States which have the ability and will to take care of their own are now invited to dip into the Federal Treasury.

"It was unfortunate also that the provision for agricultural relief through the Reconstruction Corporation was omitted. The authority is needed to assure term credits for storage and carrying of these commodities so as to restore orderly marketing in the normal way. That proposal is the most fundamental of all in agricultural relief and could stop the debacle in agricultural prices. These products are today stagnant because of the fear of manufacturers, processors, and dealers that they cannot be sure of continuous credits at fixed rates to carry their stocks in normal fashion and thus the burden of carrying national reserves is thrust on the farmer with the the result of demoralization of prices.

"There is, however, a possibility of immediately rectifying these destructive factors and delinquencies of the bill. The Senate bill and the House bill differ totally in text. I am advised that it is within the power of the conferees to rewrite the bill perfecting the fine, constructive provisions and eliminating these wholly destructive proposals. I earnestly hope that this may be done."