Government Subsidies to Private Industry

April 26, 1933

Report Outline
Administration Plan for Stimulating Production
Proposals for Emergency Subsidies to Industry
Wartime Mobilization and Financing of Industry
Early Public Subsidies to Railroads and Shipping
Present Subsidies to Shipping and Aviation
Special Focus

Administration Plan for Stimulating Production

Provision of financial aid to private industry, in the form of Reconstruction Finance Corporation loans and a possible government guarantee against loss on increased production, is being considered by the Roosevelt administration among its plans to mobilize industry and create new purchasing power. The President is reported to hold the opinion that granting of assistance to industries agreeing to expand their production would better enable them to take full advantage of the purchasing power resulting from increased employment on public works projects, while at the same time adding to that purchasing power through the increased manufacturing and retail employment thus made possible.

Under the plan, so far as its tentative provisions have become known, allotment and control of production would be vested in an agency comparable to the War Industries Board, whose decisions would be binding on the R. F. C. in the granting and guaranteeing of loans to industry. The whole scheme would be coordinated with the administration's plans for regulating wages and hours of work under the amendments to the Black (D., Ala.) 30-hour week bill sponsored by Secretary of Labor Perkins.

Senator Wagner (D., N. Y.) introduced a bill, March 20, 1933, to revise the Emergency Relief and Reconstruction Act of July 21, 1932, by authorizing the R. F. C. to make loans to states and municipalities for public works which are “needful and in the public interest” rather than necessarily self-liquidating. The bill also provides authority to make loans to private corporations to aid in the construction or improvement of self-liquidating bridges, tunnels, docks, and other public works. A similar bill was passed by the Senate, February 20, 1933, by a vote of 54 to 16. Its provision for loans to private, corporations would have to be enlarged to carry out the administration plan for loans to manufacturers. An authorization for R. F. C. loans to any person or industry, included in the relief bill passed by the House in June, 1932, led to a sharp controversy between Speaker Garner, its sponsor, and President Hoover, who vetoed the bill on the ground that it would put the government into “a gigantic pawnbroking business.”

ISSUE TRACKER for Related Reports
New Deal, Great Depression, and Economic Recovery
Feb. 20, 2009  Public-Works Projects
Jul. 25, 1986  New Deal for the Family
Apr. 04, 1973  Future of Social Programs
Nov. 18, 1944  Postwar Public Works
Apr. 12, 1941  Public Works in the Post-Emergency Period
Mar. 08, 1940  Integration of Utility Systems
Feb. 26, 1938  The Permanent Problem of Relief
Jun. 08, 1937  Experiments in Price Control
Jan. 05, 1937  Credit Policy and Control of Recovery
Nov. 27, 1936  New Deal Aims and the Constitution
Oct. 16, 1936  Father Coughlin vs. the Federal Reserve System
Sep. 25, 1936  Roosevelt Policies in Practice
Feb. 11, 1936  Conditional Grants to the States
Dec. 11, 1935  Capital Goods Industries and Recovery
Sep. 25, 1935  Unemployment Relief Under Roosevelt
Jul. 17, 1935  The R.F.C. Under Hoover and Roosevelt
Jul. 03, 1935  Six Months of the Second New Deal Congress
Jun. 04, 1935  The Supreme Court and the New Deal
Mar. 05, 1935  Public Works and Work Relief
Feb. 16, 1935  Organized Labor and the New Deal
Dec. 04, 1934  Rural Electrification and Power Rates
Oct. 26, 1934  Federal Relief Programs and Policies
Jul. 25, 1934  Distribution of Federal Emergency Expenditures
Jul. 17, 1934  Debt, Credit, and Recovery
May 25, 1934  The New Deal in the Courts
Mar. 27, 1934  Construction and Economic Recovery
Mar. 19, 1934  Price Controls Under N.R.A.
Feb. 15, 1934  Federal Promotion of State Unemployment Insurance
Jan. 10, 1934  Government and Business After the Depression
Jan. 02, 1934  The Adjustment of Municipal Debts
Dec. 12, 1933  The Machine and the Recovery Program
Dec. 05, 1933  Winter Relief, 1933–1934
Nov. 11, 1933  Power Policies of the Roosevelt Administration
Oct. 28, 1933  Buying Power under the Recovery Program
Oct. 19, 1933  Land Settlement for the Unemployed
Sep. 20, 1933  The Capital Market and the Securities Act
Jul. 18, 1933  Public Works and National Recovery
Jul. 01, 1933  The Plan for National Industrial Control
May 03, 1933  Economic Readjustments Essential to Prosperity
Apr. 26, 1933  Government Subsidies to Private Industry
Mar. 25, 1933  Rehabilitation of the Unemployed
Feb. 17, 1933  Federal Cooperation in Unemployment Relief
Nov. 16, 1932  Systems of Unemployment Compensation
Nov. 09, 1932  Policies of the New Administration
Aug. 18, 1932  Emergency Relief Construction and Self-Liquidating Projects
Dec. 28, 1931  Relief of Unemployment
Aug. 01, 1931  National Economic Planning
Jul. 20, 1931  Dividends and Wages in Periods of Depression
Feb. 19, 1931  Insurance Against Unemployment
Jan. 19, 1931  Business Failures and Bankruptcy Administration
Jan. 01, 1931  Federal Subsidies to the States
Dec. 08, 1930  Federal Relief of Economic Distress
Sep. 25, 1930  The Extent of Unemployment
May 16, 1930  Politics and Depressions
Dec. 20, 1929  The Federal Public Works Program
Jun. 08, 1929  The Federal Reserve System and Stock Speculation
Apr. 14, 1928  The Federal Reserve System and Price Stabilization
Feb. 25, 1928  The Federal Reserve System and Brokers' Loans
Economic Crises
Economic Development
Manufacturing and Industrial Production