kind of analysis was applied with increasing sophistication and accuracy in other States. A major improvement was the substitution of gasoline consumption for population increase as an indicator of future traffic growth.
The Cleveland Kegional Area Traffic Survey of 1927 brought all levels of government—Federal, State, county and city — together for the first time in a concerted study of the traffic problem in a single metropolitan region. The BPK which paid half of the cost of the survey, agreed to participate only on condition that the study be areawide without respect to political boundaries and that it lead to a general highway plan for the region. The study actually resulted in a 10-year improvement plan costing $63 million—a budget well within the capability of the region. The report of the survey ended with a note of caution which was to be a guidepost to future planners:
Traffic conditions, however, are constantly changing, and the recurrence of present conditions can be prevented only by careful and far-sighted planning based on a definite knowledge of these changing highway and traffic conditions. Proper highway planning must be a continuous process, based on a continuing series of facts in order that the constantly increasing traffic demands may be foreseen and met with improvements as required.[1]
The Highway Boom Continues
A decade of unprecedented national prosperity ended in 1929, although signs of a slowdown had appeared earlier. The building industry, which had been in slow decline for 2 years, went into a slump early in 1929. By late summer the building-related industries—steel, cement, lumber—were curtailing production. Automobile sales began falling, but the industry, in a runaway boom, produced 5,337,087 vehicles, a record not to be equaled for 20 years.[2]
After the stock market collapse of October 1929, deflation gained momentum as factory after factory reduced production. With a huge unsold backlog of 1929 cars hanging over the market, the auto industry cut back to 3.36 million units in 1930, 2.38 million in 1931, and 1.33 million in 1932 and laid off thousands of workers.[3] Nationally, unemployment increased from 1.5 million in 1929 to 12 million in 1932 as the gross national product dropped from its 1929 high of $104 billion to $58.5 billion in 1932.
Throughout this massive deflation, roadbuilding held up much better than other kinds of manufacturing. During the “Roaring Twenties,” the States built up their roadbuilding capability to the point where they could obligate $100 million of Federal aid per year. This rate exceeded Congress authorizations and was possible only because of the backlog of unexpended funds from the early years of the program. By 1928 this backlog was exhausted and the States began to cut back their programs to fit the authorizations, which were only $75 million per year. The slowdown became apparent in fiscal year 1929, when the completed Federal-aid mileage that year (initial construction plus stage construction) fell to 9,386 miles from its 1928 level of 10,174 miles, and it carried on into fiscal year 1930.[4]
After the 1929 crash, Congress, at the President’s request, sought to bolster the sagging economy by authorizing large sums for public works, including highways. The authorization of April 4, 1930 (46 Stat 141) increased the regular Federal aid for fiscal year 1931 by $50 million, to a total of $125 million, and authorized $125 million per year for 1932 and 1933. The Secretary of Agriculture apportioned the new 1931 funds immediately and also made the 1932 apportionments available for use in September 1930, instead of December, as in the past. This action made $175 million of Federal funds immediately available, which was more than many States were able to match, principally because their legislatures were not in session to make the matching appropriations and would not meet until January 1931, or later.
Congress met this situation by appropriating $80 million to be apportioned among the States in the same manner as Federal aid and to be used to match the regular Federal-aid apportionments. These funds were really advances to the States, not grants, and were to be repaid by deduction from the regular Federal-aid apportionments over a period of 5 years. Further, Congress required that all of these emergency funds be obligated by September 1, 1931.[N 1]
The States responded to this stimulus with commendable promptness. By June 30, 1931, they obligated $55 million of the emergency money and by August the entire amount, along with most of the regular Federal aid. Completed initial and stage construction jumped to 11,033 miles, and in 1932 it went far beyond that, to 15,997 miles.
In a small way, this highway construction helped to stabilize employment, particularly winter employment for farmers who had been hard hit by severe drought in 1930. Chief MacDonald reported that the early authorizations and the emergency loans had boosted employment on Federal-aid highway projects from 30,944 men in January 1931 to 155,466 in July 1931, while the total of all Federal and State highway employment that month was 385,349 men.[5] However, the stimulation was short-lived and by July 1932, total highway employment was only 305,372 persons.[6]
- ↑ Emergency Construction Act of December 20, 1930 (46 Stat 1030). The Hayden-Cartwright Act of June 18, 1934, converted these loans into outright grants.
Diversion of Highway Revenues—A Thorny Issue
In the early years of the Depression, there was a precipitous drop in the collections from income and property taxes. Personal income was down and destitution was widespread. Millions of people lost their life savings in the stock market crash and the wave of bank failures that followed. Drought and low agricultural prices wiped out tens of thousands of farmers who lost their farms by foreclosures and tax sales. The resulting shortfall of revenue was felt with particular acuteness by the counties and townships which had traditionally depended on property taxation for the support of schools and local roads.
Surprisingly, road-user revenues were remarkably stable. Motor vehicle registrations increased slightly in 1930 as compared to 1929, reaching the peak of an
- ↑ A Study of Highway Traffic in the Cleveland Regional Area, Public Roads, Vol. 9, No. 7, Sept. 1928, p. 152.
- ↑ 1971 Automobile Facts and Figures (Automobile Manufacturer’s Association, Detroit, 1971) p. 3.
- ↑ Id.
- ↑ Bureau of Public Roads Annual Report, 1930, p. 4.
- ↑ Bureau of Public Roads Annual Report, 1932, p. 2.
- ↑ Bureau of Public Roads Annual Report, 1933, p. 3.
