Federal Highway Aid and the Depression

December 24, 1932

Report Outline
Proposed Suspension of Federal Aid for Roads
Federal Aid for Highway Building, 1913–1933
Threatened Reduction of Road-Building Funds
Proposed Federal Aid for Farm-To-Market Roads
Highway Construction and Unemployment Relief
Special Focus

Proposed Suspension of Federal Aid for Roads

President hoover in his message transmitting to Congress the budget for the fiscal year 1934 recommended that the appropriation for federal highway aid for that year be restricted to the amount needed for expenditures under authorizations already made. He proposed that further authorizations for federal aid for highway construction be withheld “until the financial condition of the Treasury justifies such action.”

The annual federal highway allotment to the states, which stood for a number of years prior to 1931, at $75,000,000, was increased to $125,000,000 for the fiscal years 1931, 1932, and 1933. These sums were further augmented by emergency appropriations totaling $200,000,000, the large additional funds for road building being advanced as a means of giving work to unemployed men in every state. The proposal that federal-aid construction now be sharply curtailed appears to be based not only on the condition of the Treasury but upon the President's belief that public works appropriations in general can safely be reduced, since “the authorization of large programs of self-liquidation works to be financed by the Reconstruction Finance Corporation provides aid to employment upon an even larger scale without burden upon the taxpayers.”

Suspension of federal highway appropriations at this time is opposed by state highway officials and by those who look upon extensive road construction as a valuable means of providing employment. Although the federal-aid highway program has been speeded up during the last three years, improvements on only about one-half of the mileage included in the federal-aid system have been completed to date. Continuance of substantial construction activity by the states themselves is threatened in various instances by dwindling state revenues and by the rapidly growing practice of diverting proceeds of motor vehicle fees and gasoline taxes to other than highway purposes.

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Dec. 24, 1932  Federal Highway Aid and the Depression
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Economic Crises
Motor Traffic and Roads