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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 committee* III* IV* 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* 7* Put Social Security to work more rapidly by speeding up and liberalizing payments under old-age and dependency provisions* VI* 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* VII* 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: 1958 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* 1959 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 - ^ ^ ^ ******£* 1# 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* 2-14-38, 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 • (4) 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 education* 2-14-38« Outline of Suggested Program IV*-sub-5* Establish a broad program of federal support for health and education* Health 1# 2* 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 million* 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# Education 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* 2-14~38« Outline of Suggested Program Social Security* Old Age and Invalidism* 1# Adrance the date of payment to 1939 instead of 1942• 2* Change formula resulting in increase in average benefits from $12#50 to #17#50* 3* 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* 4* Payment of invalidity pensions* #150 million in 1939* This would call for about Total under Old Age and Invalidity #400 million*