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The President's News Conference

June 24, 1932

EMERGENCY RELIEF AND CONSTRUCTION LEGISLATION

THE PRESIDENT. I am glad to see the adoption by both the Senate and the 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 that will pay for itself and for which plans are immediately available 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 7 or 8 million unemployed.

These expenditures cannot be recovered; they must be met by the taxpayer either 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 this sort of 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 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.

RECONSTRUCTION FINANCE CORPORATION

I have one other small item, just for your own information. I understand that Senator Robinson made a mistake as to some statement issued at the White House this morning that I was appointing the President for the Reconstruction Corporation. The President of the Reconstruction Corporation will be appointed by the Board. I only sent the name of Mr. Cowles out. But that is a matter for the Board to determine. The Board can select someone who is not a member of the Board if it so wishes. I have a notion it is in the mind of the Board so to do if they wish to strengthen their staff. This is just for your information.

EMERGENCY RELIEF AND CONSTRUCTION LEGISLATION

Q. Mr. President, reverting back to your statement a minute ago-would you go as far at this time as to suggest that you might veto the bill unless these changes are made in it ?

THE PRESIDENT. One never makes a statement like that.

Note: President Hoover's two hundred and fifty-third news conference was held in the White House at 4 p.m. on Friday, June 24, 1932.

Although Gardner Cowles, Sr., became a member of the Board of Directors of the Reconstruction Finance Corporation in July 1932, he did not serve as president. On July 28, 1932, the White House issued biographical data on Charles A. Miller as a nominee to the Board of Directors of the RFC. Mr. Miller became president of the RFC in August.

On the same day, the White House issued a text of the President's statement on emergency relief and construction legislation (see Item 209).

Herbert Hoover, The President's News Conference Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/207105

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