Public Works: Advantages of Orderly Planning

Attention has been focused upon public works as a possible stabilizing factor on employment, by the vast sums spent by the Federal Government in this field in the past few years for unemployment relief. The paper presents facts as to the construction industry as a whole, its relation to national income, and the share of public works in the industry, for the years 1925 to 1935, inclusive, the period for which detailed statistics were available. For public works themselves, analysis is made of expenditures in this period by the Federal Government, by the States, and by local governmental units.

During the depression expenditures in the construction industry as a whole (which in the pre-depression period accounted for one-sixth of the national income) dropped far more rapidly than the national income, primarily because of the great slump in private construction. Public works declined considerably after 1930, notwithstanding the greatly increased expenditures of the Federal Government, since the excess of Federal expenditures was nullified and much more than offset by the sharp drop in expenditures by counties and municipalities. Contrary to the general impression that the past few years has been a period of substantially increased activity in public works, the facts are that the country's public works program was a full year behind schedule by the end of 1935.

The theory of a controlled public works policy, by which construction will be retarded to some extent in prosperous times and expanded to relieve unemployment in periods of depression, is noted. This principle has not yet been given a fair trial since what has been done thus far has been done under pressure of an emergency and without the benefit of advance planning. The recent depression has taught its lessons, however, which may serve to guide future policy. Some of these lessons are stated. The importance of advance planning of public works and long-term budgeting, whether or not a policy of controlled public works as a stabilizing factor is to be attempted, is reviewed. Suggestions are offered whereby orderly advance planning may be made effective, thereby promoting efficiency in administration and economy in government.