Government and Unemployment: The Use of Public Works before the New Deal

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The huge public works programs initiated during the New Deal period became landmarks on the American road to the welfare state. But while their usefulness in the fight against unemployment was seemingly self-evident to the New Dealers, it had taken several decades for the idea to become accepted in governmental circles and by the public at large. Much discussion among reformers, government officials, and not least construction entrepreneurs took place in the attempt to clarify the issues and to identify the possibilities. A certain amount of experimentation, mainly on the state level and oftentimes not too successful, also contributed to the narrowing of the options. The Roosevelt administration thus built on the experience of the preceding generation when it formulated, and then undertook, its programs. However, while good studies exist for the New Deal actions, far less is known about their prehistory, which indeed can be traced to its origins before World War I. How the idea of public works as a governmental tool developed over the two decades preceding the New Deal, and in what ways it was being implemented, is the subject of this article. It will be shown that various people interested in the alleviation of unemployment recognized the measure's potential early enough but that, for both practical and theoretical reasons, state and federal governments as a rule shied away from using it. Before the entry of the United States into the war, the American public was not yet prepared to countenance large-scale governmental intervention in the social sphere. The economic disturbances caused by demobilization and the recession of 1921, on the other hand, passed too quickly to give actionminded unemployment fighters a chance to secure more than token governmental interest. As a consequence, it was left to the experience of the early 1930s to reveal that only massive programs could make an impact. But such programs required more money than could be found in either state or federal coffers. States, moreover, were generally hampered by constitutional limitations to borrowing. For its part, the Hoover administration could have resorted more easily to deficit spending, but adherence to traditional tenets regarding the role of government, in particular the desire for a balanced budget, kept it from doing so. The distress caused by the Great Depression, however, exerted enough pressure materially to debilitate statutory as