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M*E* 2-14-38

Elements of Suggested Program of Action

I* Housing - supplementary action to get actual construction started
in large volume*
II* Railways - Establish a federal equipment corporation to provide
prompt resumption of equipment construction, plus other measures
to reorganize and rehabilitate as recommended by special railway


Toll projects - Establish a Federal Toll Authority to finance
and build toll facilities where needed and justified; including
bridges, tunnels (urban and under rivers), roads, etc*
Conservation of human resources - Initiate a broad program of
work to conserve and rehabilitate human resources of fanners,
miners, unemployed, and the general public*


Put Social Security to work more rapidly by speeding up and liberalizing payments under old-age and dependency provisions*


Expand W*P*A* program to check the decline and to fill in the gaps
until actual disbursements under the other programs get fully
under way*


Action is needed to provide adequate credit now and later on
capital for future business expansion, for small concerns and
those hit by the recession* This problem is being cared for
by efforts of several special committees, of R.F.C, and of
S*E*C#, so it is only referred to here*

Suggested timing:
1* Increase W*P*A* and Rural Rehabilitation
2* Provide subsidy to private housing and extend public housing
3* Establish Federal Railroad Equipment Corporation and secure
authority to purchase non-cumulative preferred stock of
railroads* Begin operations*
4* Establish Federal Toll Authority
.5# Increase health and hospital expenditures
6* Amend Social Security Act*
1* Diminish W*P*A*
2* Diminish subsidy to private housing
3* Increase Equipment Corporation's operations
4* Begin Federal Toll Authority operations
5* Increase old-age and invalidity payments
6* Start education grant expenditures
7* Increase health and hospital expenditures

2 -14^38 •
Outline of Suggested Program


Housing -

^ ^ ^ ******£*


W#P«A# labor to provide n i t i l i t i e s and roads on public property
adjacent to a l l new construction*
2m Enlarge U#S, Housing; speed up operations by suspending 10$
contribution; authorize direct construction through subsidiary
construction corporation (to include building organization developed by F.S.A.); authorize use of available F«S#A# lirid
and W#P*A« labor by this corporation*
3 # (a) Establish two or more large-scale construction corporations
with federal money, to test practicability of reducing
costs by mass-production methods in housing above the subsidized low-cost type; and/or
3«(b) Provide a federal contribution (25 to 50$) to the capital
of private construction corporations to engage in massproduction of houses, on condition such corporations show:
(1) They will limit the return on the private capital
to 8J(.
(2) They wijl operate with annual-wage agreements for part
of their labor, including at least carpenters, bricklayers, and common labor•
(3) They will build continuously over a succession of housing units, planned in advance, for a period of at least
18 months•
(4) Other appropriate provisions to insure mass-production
purchasing and erection*

Outline of Suggested Program

TV. Conservation of human resources,

(1) Expand Rural Sehabilitation work, to enlarge lending
program to 250 million a year*
(2) Establish a parallel Miners1 Rehabilitation Administration—expending up to(y*7^millions a year#
(3) Authorize W#P.A. to establish a special service to retrain unemployed workers for new industries, and to support them during such re train ing •

Authorize W#P,A#, in cooperation with the Federal Vocational
Hehabilitation service, to expend funds for physical rehabilitation of unemployed*
(Operations for hernia, etc*)

(5) Establish a broad program of federal support for health and

Outline of Suggested Program

IV*-sub-5* Establish a broad program of federal support for health
and education*

Increased expenditures for maternal, child and general public
health work provided for in Titles 5 and 6 of the Social Security Act should amount to about $40 million in 1939.
Federal grants-inlaid to assist states to provide general medical care to needy poor and to others unable to obtain medical
care (otherwise self-sustaining). Immediate $50-$100 million*
Ultimate $100 millionto #150 million* This should be conditioned
on an equal sum from state and local bodies*

Points 1 and 2 with state and local 1938-39 - $150 - $250 million;
1929-40 $250 million - $350 million.
3* Hospitals, Deficiency of hospital beds now 400,000. At #3*000
a bed this amounts to #1*200,000,000* In addition, special hospitals for the chronic sick need #600 million more* In addition,
$250 million could be spent on modernization and needed outpatient clinics.
Fiscal 1939 with state and local - $200 million*
Combined psrogram 1938-39 - $350 - $450 million; 1939*40 - $450 - $550
Federal above 1938-39 - $200 - $250 million
1939-40 $250 - $300 million
Increasing interest in public health indicated by rapid spread of
purely voluntary group hospital insurance from 300*000 per sons in April
1937 to a million in December 1937#
The Advisory Committee on Education, after over a yearfs study,
will submit its report to the President shortly* It calls for a program
of increased federal aid to education, largely through grants to states.
They are recouoended to start at about 70 million more in the 1939-40
fiscal year, and increasing gradually up to about 200 million in the
1944-45 fiscal year* These carefully developed recommendations might
be endorsed as an appropriate part of the long-time program, Although
their immediate magnitute is not great*
Expenditures on health and education provide increased employment
in service occupations, contribute to the welfare and productivity of the
general public, yet do not involve any competition with private business*
Yiewid from the national interest as a n&ole, they are truly self-liquidating*



Outline of Suggested Program

Social Security*
Old Age and Invalidism*

Adrance the date of payment to 1939 instead of 1942•


Change formula resulting in increase in average benefits
from $12#50 to #17#50*


ProTide benefits for surviving widows and dependent wives
(50 per cent supplement)

One, two, and three would result in increased expenditures in 1939
of around $250 million*

Payment of invalidity pensions*
#150 million in 1939*

This would call for about

Total under Old Age and Invalidity #400 million*