Changes

When FDR was inaugurated for his second term [[national income]], [[payroll]]s, and [[industrial production]] <ref>League of Nations Monthly Bulletin of Statistics, June, 1936. Percentage change 1929 to March 1936, United States -21.8%, rank number 13.</ref> were still 20 per cent below the 1929 figure and construction was still only about one third what it had been in 1929. By June, 1937 the Treasury boasted relief payments were less than in the same period the preceding year. But this was not so. The Treasury made a practice of cooking the books and producing phony numbers. It merely shifted relief payments to other accounts. They were, in fact, larger than the year before. Stock prices declined and by September the reality could be no longer hidden. By the end of October the market crashed. The budget was running a [[deficit]] at the time $300,000,000 a month.  

When FDR was inaugurated for his second term [[national income]], [[payroll]]s, and [[industrial production]] <ref>League of Nations Monthly Bulletin of Statistics, June, 1936. Percentage change 1929 to March 1936, United States -21.8%, rank number 13.</ref> were still 20 per cent below the 1929 figure and construction was still only about one third what it had been in 1929. By June, 1937 the Treasury boasted relief payments were less than in the same period the preceding year. But this was not so. The Treasury made a practice of cooking the books and producing phony numbers. It merely shifted relief payments to other accounts. They were, in fact, larger than the year before. Stock prices declined and by September the reality could be no longer hidden. By the end of October the market crashed. The budget was running a [[deficit]] at the time $300,000,000 a month.  

[[Robert H. Jackson]], Assistant Attorney General, and Secretary of the Interior [[Harold Ickes]] in December made speeches inspired by the President on the [[conspiratorial]] ''America's 60 Families.'' <ref>''New Deal Chorus'', Time magazine, [http://www.time.com/time/magazine/article/0,9171,758849-1,00.html pg. 1][http://www.time.com/time/magazine/article/0,9171,758849-2,00.html pg. 2], Jan. 17, 1938.</ref> In January, John D. Biggers staggered the administration with a report Roosevelt had commissioned that stated there were 10,870,000 people out of work. <ref>[http://www.time.com/time/magazine/article/0,9171,758790,00.html ''Two Schemes''], Time magazine, Jan. 10, 1938.</ref> Roosevelt realized that all the “pump priming” and spending $17 billion had failed. Despite the billions added to the debt, the Depression was back. He was now at the center of a tug-of-war with advocates of spending like [[Harry Hopkins]], [[Leon Henderson]] and [[Rex Tugwell]] on one side, and opponents like [[Henry Morgenthau]] on the other. DNC Chairman [[Jim Farley]] reports he had a talk on the subject with Roosevelt on March 28, 1938.  

[[Robert H. Jackson]], Assistant Attorney General, and Secretary of the Interior [[Harold Ickes]] in December made speeches inspired by the President on the [[conspiratorial]] ''America's 60 Families.'' <ref>''New Deal Chorus'', Time magazine, [http://www.time.com/time/magazine/article/0,9171,758849-1,00.html pg. 1][http://www.time.com/time/magazine/article/0,9171,758849-2,00.html pg. 2], Jan. 17, 1938.</ref> In January, John D. Biggers staggered the administration with a report Roosevelt had commissioned that stated there were 10,870,000 people out of work. <ref>[http://www.time.com/time/magazine/article/0,9171,758790,00.html ''Two Schemes''], Time magazine, Jan. 10, 1938.</ref> Roosevelt realized that all the “pump priming” and spending $17 billion had failed. Despite the billions added to the debt, the Depression was back. He was now at the center of a tug-of-war with advocates of spending like [[Harry Hopkins]], [[Leon Henderson]] and [[Rex Tugwell]] on one side, and opponents like [[Henry Morgenthau]] on the other. DNC Chairman [[Jim Farley]] reports he had a talk on the subject with Roosevelt on March 28, 1938.  

FDR told Farley he would have "to go in for pump priming or relief," then Roosevelt confessed to a difficulty that is little understood: what could he spend on?  There is only a limited number of things which the federal government can spend. The federal government can build schools, hospitals, roads, institutions of all sorts. But they are built in cities, counties, states and the activities which go on in these buildings are within the jurisdiction of the states. And the continuing perpetual maintainance of such things, like payroll, is the in the purview of the states. The federal government can spend money on agricultural experimentation, on scientific research, on national parks, on power dams, etc. But in the end the outlays on these things are limited. The one big thing the federal government can spend money on is the army and navy. Roosevelt explained to Farley that he could not spend on local projects because the states and cities did not want any more buildings and institutions which they would have to support. They were having trouble enough paying the bills of those already built. Roosevelt revealed to Farley that many [[WPA]] projects approved by the government were abandoned because the states and cities could not raise the money to support them. In the 1938 Congressional elections Harry Hopkins was spending as fast as he could without any regard to utility to meet the immediate political necessities of an election but couldn't go on indefinitely. And the whole problem was complicated by pressure from within his own party to balance the budget.

FDR told Farley he would have "to go in for pump priming or relief," then Roosevelt confessed to a difficulty that is little understood: what could he spend on?  There is only a limited number of things which the federal government can spend. The federal government can build schools, hospitals, roads, institutions of all sorts. But they are built in cities, counties, states and the activities which go on in these buildings are within the jurisdiction of the states. And the continuing perpetual maintainance of such things, like payroll, is the in the purview of the states. The federal government can spend money on agricultural experimentation, on scientific research, on national parks, on power dams, etc. But in the end the outlays on these things are limited. The one big thing the federal government can spend money on is the army and navy. Roosevelt explained to Farley that he could not spend on local projects because the states and cities did not want any more buildings and institutions which they would have to support. They were having trouble enough paying the bills of those already built. Roosevelt revealed to Farley that many [[WPA]] projects approved by the government were abandoned because the states and cities could not raise the money to support them. In the 1938 Congressional elections Harry Hopkins was spending as fast as he could without any regard to utility to meet the immediate political necessities of an election but couldn't go on indefinitely. And the whole problem was complicated by pressure from within his own party to balance the budget.