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Road Building as a Depression-era Economic Stimulus Tool

Gaining momentum in the 1920s, the road-building frenzy was actually a well-orchestrated and mutually beneficial endeavor for both the states and federal government.

A universal numbering system was being established. Since the country was just about twice as long (east to west) as it was wide (north to south), it made sense to establish an adjustable, simple pattern of north-south roads with odd numbers increasing from east to west, and east-west roads with even numbers increasing from north to south. Numbering by 10s from 10 to 90 would provide the nine principle east-west routes. Numbering by 11s and 5s (1, 5, 11, 15, etc. to 101) provided 20 base-route numbers for the north-south pattern.

With this pattern in mind, the task fell to the Bureau of Public Roads to gain the support of several existing highway associations. One of the best-represented groups was the Lincoln Highway Association. The federal and state governments worked with this group to keep the U.S. 30 designation on as much as possible of this roadway as it was built across the country. As they were the strongest of the associations, once they were on board with the numbering system, no other association disagreed to any great extent.

The first coast-to-coast road was completed in 1928. Phenomenal growth in the number of automobiles and their use provided a growing base of user revenue for the states.

Then came Black Tuesday--- Oct. 29, 1929. The stock market crash brought the nation’s financial community to its knees. President Herbert Hoover called together the captains of industry to develop an extensive program of public works to keep the economy moving.

By the end of 1930 the entire program, some $80 million allocated to federal-aid roads, was in place. It was expected that the whole program, including the states’ money, would provide employment for 100,000 men.

Since the state coffers in most locations were depleted, a system of advancing money from the federal government to the states was devised. As a result, $80 million was appropriated as an advance to be paid back out of future reauthorizations, and it could be used to match regular federal-aid funds.

Always the voice of reason, Thomas MacDonald, former Iowa chief engineer then in charge of the federal Bureau of Public Roads, advocated a need for planning surveys in all states as a means of providing legislators and the public with much-needed facts to make better decisions about road building.

According to an article from American Highways, the advanced funds were to be repaid to the federal government over a period of 10 years commencing in 1938. The article voiced the concern that so much money was being advanced to the states that little would be left for construction in future years.

Adding to that concern was the inability of Congress to pass a reauthorization act that provided the initial funding for road construction. Each Congress since 1916 had provided a continuance of the federal-aid program for a two-year period, until the Congress that adjourned in 1933.

With no reauthorization to provide the bulk of federal aid, and most state road funds being diverted for other uses, the American Association of State Highway Officials (AASHO) felt the work of the last 40 years was in jeopardy. They suggested a federal-aid authorization of not less than $100 million for fiscal year 1935. This would balance the budget for fiscal year 1934, skip one year of reauthorization and at the same time, ensure a moderate 1935 construction program.

The record shows that $400 million was actually delivered through the Bureau of Public Roads. Some of the rest of a $3.3 billion package found its way to highways, delivered directly to municipalities, counties and other special entities. Lack of coordination caused a great deal of overlap and confusion.

Because many of the states saw the infusion of federal funding with no required match, they quickly diverted state road funds to other uses. At the same time, vast mileages of minor roads were transferred to the states without any revenue to go with them.

To turn the tide and convince the public and state legislatures of the need for non-federal funds for local roads, planning was hailed as the way to bring order to the chaos that had previously prevailed.

State highway engineers such as Frank T. Sheets of Illinois called for “rational planning, replacing the sentimental appeal of early good roads boosters with the highway economist armed with sound plans, fundamental facts regarding the dividend-producing aspects of improved highways, and convincing proof of the equity of proposed highway tax collection and distribution.”

Iowa followed (and continues to follow) the steps outlined by Sheets in the mid-1930s, including the performance of traffic and economic studies, and formation of a commission to study the information and plan a future highway program.

By 1934 the nation’s hysteria had passed and the Hayden-Cartwright Act provided for a return to the regular program of state-federal cooperation in 1936.


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