This Week in History:
November 7 - 13, 1933
The Civil Works Administration
Harry Hopkins (with daughter) shown with President Franklin D. Roosevelt.
Of all the highly significant events in recent history that occurred during early November— from the election of Abraham Lincoln in 1860, to the Nazis' 1938 Kristallnacht assault on Jews and Jewish institutions in Germany, to the 1989 fall of the Berlin Wall, and the assassination of Israeli Prime Minister Yitzhak Rabin in 1995— we have chosen to highlight the one which provides the most immediate lesson for the current period: the launching of the Civil Works Administration (CWA) by President Franklin Delano Roosevelt.
President Roosevelt signed the Executive Order establishing this jobs program on Nov. 8, 1933, upon the instigation of Harry Hopkins, who was already the head of the Federal Emergency Relief Administration (FERA). But, whereas FERA was limited to providing relief in the form of handouts to those who could prove their indigence, the CWA was devoted to creating jobs that paid wages, and stimulated the productive economy as well. Hopkins was designated the head of the new program.
Lyndon H. LaRouche, Jr.
For those who are looking for what Lyndon LaRouche means by a Roosevelt-style public-works program, the CWA provides a useful, but by no means strictly imitable, example.
First of all, the CWA was established as a clear, and unbureaucratic, response to an emergency, the fact that the onset of the winter of 1933-34 was likely to bring a level of privation, including starvation, that would devastate the country. The Public Works Administration (PWA), which had been established by the passage of the National Recovery Act, and had the mandate to carry out substantial public works in the area of infrastructure, was moving at a snail's pace, and not showing significant results in the job market. And the private sector was still collapsed.
Secondly, the CWA was a fully Federal program, in which those employed were Federal employees. The provisions called for one-half of the jobs to go to those who were on relief (today's welfare), and the other half to anyone else who needed work. In both cases, this meant a considerable upgrading of conditions. Those who came from relief now received wages at minimum wage, rather than charity— an increase from $6.50 to $15.00 a week. The other workers did not have to submit to a "means test," (proving you have absolutely no assets) in order to get an income.
It is also of interest to note that Hopkins was thus able to set conditions on providing the jobs, including that black and white workers get equal wages. While many of the Southern states did all they could to get around this, the principle was established.
Civil Works Administration workers on their way to fill a gully with wheelbarrows of earth during the construction of the Lake Merced Parkway Boulevard, San Francisco, California.
Thirdly, the CWA employed millions of people, fast. Operating initially with monies from the PWA, Hopkins set out the objective of creating 4 million jobs by Dec. 15, about one month after the establishment of the program. While he only reached 2.6 million by that date, he had employed a small army of 4.2 million by the middle of January.
This aspect of the CWA is distinct from what you would want from a public works program today. In concept, a massive public-works program should be directed to the completion of necessary projects, particularly substantial infrastructure, with employment as a byproduct, rather than the other way around. But, for the limited purpose of saving lives, it worked.
The CWA employment program, conceived as temporary aid to prevent social disaster during the winter, operated under enormous constraints, in terms of the projects it was given. The major purpose was to put income into people's pockets, and 80% of the monies went to salaries, out of the approximately $1 billion spent. In fact, political pressures forced Roosevelt to discontinue the program by April of 1934.
Yet, Hopkins was able to put people to work carrying out useful work, particularly in the areas of infrastructure. This was negotiated, in part, because the PWA had been so slow in carrying out its mandate. The CWA was allowed to pick up projects in the area of sewer treatment, waterworks, and bridge projects, which the PWA had not begun. Overall, 180,000 projects were completed.
More broadly, the CWA spending was dispersed as follows. One-third went to road and highway projects. The second-largest area of concentration was schools; 40,000 were either built or improved, and 50,000 teachers were employed to aid in adult and other education. In addition, 1,000 airports were either built or improved, 3,500 playgrounds built, and a multitude of other projects— including artistic and scholarly ones— were initiated.
Many of these projects produced infrastructure we still rely on today. There is no question but that a public works approach is going to be required, to repair, upgrade, and advance that infrastructure.
The original article was published in the EIR Online’s Electronic Intelligence Weekly, as part of an ongoing series on history, with a special emphasis on American history. We are reprinting and updating these articles now to assist our readers in understanding of the American System of Economy.