1938: Relief In The United States

Unemployment and Government Recovery Measures.

To relieve distress caused by the economic recession and to promote recovery, Federal, state and local governments found it necessary to expand their several security measures during 1938.

Unemployment in the United States, which had dropped from an all-time high of over 15,000,000 in March 1933 to 8,000,000 in September 1937, rose again rapidly during the following winter. By New Year's Day there were 11,000,000 out of work, by June nearly 13,000,000.

To meet this situation the Federal Government formulated a recovery program in the spring of 1938 that provided for a considerable increase in expenditures on public work. It included expansion in the operations of the Works Progress Administration, resumption on a large scale of the construction program of the Public Works Administration, continuation of the extensive conservation activities of the Civilian Conservation Corps, and increases in the youth program of the National Youth Administration as well as in the rural rehabilitation loan-and-grant program of the Farm Security Administration. The recovery program likewise included additional appropriations for Federal housing activities and rural electrification and also an increase in the construction of Federal public buildings. Other elements in the recovery program were the increased lending authority given to the Reconstruction Finance Corporation, the destabilization of gold held by the Treasury, and the relaxing of reserve requirements in the Federal Reserve System.

During the winter of 1937-38 the flexible WPA had increased its employment to meet the growing need. From an all-time low of about 1,500,000 at the end of September, the number of WPA project workers rose steadily in successive months until a total of nearly 2,800,000 was reached by the end of June 1938.

In the same period the number of families and single persons receiving relief from state and local agencies likewise increased. General relief rolls rose from 1,270,000 in September 1937 to a peak of 2,028,000 in February 1938. After that month — principally as the result of large-scale transfers of persons on relief to WPA projects — the general relief figure sank again, reaching 1,685,000 in June.

Unemployment Insurance and Benefits.

Payment of unemployment compensation benefits was an important factor in preventing a still greater increase in public assistance during the half year ending June 1938. Such payment, which had been in effect in Wisconsin for some time, was begun in 21 states and the District of Columbia in January 1938 and in two additional states in April 1938. A total of 2,500,000 persons received unemployment-insurance payments during the first six months of the year, and about 1,000,000 persons received these benefits during the month of June.

The number of persons receiving old-age pensions, aid to dependent children, and aid to the blind, continued to increase during the first half of 1938. These increases, however, were not caused by the recession: they represented further growth in the categorical assistance measures in which the Social Security Board participates.

Employment Recovery.

In September 1937 the estimated total number of persons benefiting from various relief and work programs in the United States had dropped from the depression high of 27,749,000 persons in 7,916,000 different households (in February 1934), to a low of 13,993,000 persons in 4,689,000 households. By June 1938 the recession had raised the number up again to approximately 21,297,000 persons in 6,711,000 households, or about 17 per cent of the country's entire population. These June 1938 estimates do not include some 1,000,000 unemployed workers receiving insurance benefits or the 26,000 farm families that received rural rehabilitation loans from the Farm Security Administration.

June 1938 was the turning point of the recession. Steady recovery was evident during the latter half of 1938. Unemployment dropped from the recession peak of 12,800,000 reaching 11,250,000 by November (Committee on Economic Security estimate). General relief rolls decreased from 1,685,000 in June to about 1,550,000 by November. The number of persons receiving unemployment compensation benefits, 1,000,000 in June, had dropped to 800,000 by the end of November.

The WPA found it necessary to continue expanding its operations for four months after the beginning of recovery. Many unemployed workers, who for a time could rely on insurance payments, savings, and other expedients, were eventually forced to seek WPA jobs. Another important factor was the desperate situation of tenant farmers and laborers in the cotton-producing areas of the South. WPA-project employment rose, as a result, from 2,767,044 in June to a high of 3,262,669 in November before it began to drop again. At the end of the year it had sunk below the 3,000,000 mark — to 2,989,976.

Similarly the estimated total number of persons benefiting from various relief and work programs in this country continued to rise slightly, from June's 21,297,000 in 6,711,000 households to 22,437,000 persons in 7,089,000 households in November. It was expected that these figures would remain about the same in December, since seasonal increases in the relief roll would counterbalance the drop in WPA employment.

WPA Projects.

The primary function of the WPA during 1938, as during the two and a half years preceding, was to provide work on useful projects for unemployed persons. Experience had shown that work was better than direct relief for such persons because it preserved their skills and morale, better also for the country as a whole because it built up public property and provided many needed services.

Certain characteristics which the WPA had acquired in the course of its development remained essentially unchanged during 1938. Its projects were carefully adjusted to the skills of the persons whom it employed, and were carried on, almost always, in the localities where the WPA workers lived. Its projects conformed also with the local needs of the communities where they were operated — this being assured through local sponsorship of the projects. The flexibility of the program, which enables it to meet sudden changes in need, was well demonstrated during the recession.

Wages; Personnel.

The monthly WPA wage varies with the section of the country and with the size of the community in which the worker lives, as well as with his skill. Despite slight increases granted in 1938 to workers in certain Southern states, the average monthly wage remained about the same throughout the year — $53.

The proportion of WPA workers taken from the relief rolls has always been high, ranging upward from about 94 per cent in the early years of the program to about 97 per cent in 1938. As in earlier years, local relief agencies certified workers for WPA employment during 1938, while actual assignment of workers to projects was left to the WPA.

Expenditures.

During the first six months of the calendar year 1938, the WPA spent about $818,000,000 of the funds allocated to it for use during the fiscal year 1937-38 (which ended on June 30, 1938). The Emergency Relief Appropriation Act of 1938 appropriated $1,425,000,000, together with unexpended balances from the preceding fiscal year, for WPA use from July 1938 to February 1939 inclusive. About $87,000,000 of these funds were subsequently transferred to other agencies. Of the remaining amount the WPA had spent about $939,000,000 by Nov. 30, 1938. More than 85 per cent of this money went directly into the pockets of WPA workers.

WPA project expenditures were supplemented by local sponsors' funds aggregating about $388,000,000 during the first 11 months of 1938. This money was devoted mainly to other than labor costs — to materials, equipment, etc. Local sponsors' share in the cost of WPA project work decreased somewhat during 1938, from an average of 19.7 per cent in the first half of the year to an average of 17.9 per cent in the next five months.

WPA Accomplishments.

The extent and diversity of the WPA program were indicated by the list of physical accomplishments made public early in 1938. Individual reports from more than 150,000 WPA projects throughout the United States were tabulated by major types of activity to show the amount of work completed in a little over two years, from the beginning of the program to Oct. 1, 1937. No summary of the work accomplished during 1938 will be available until early in 1939, but the work done during 1938 was proportional.

More than three-quarters of the WPA program (on the basis of employment as well as of expenditures) was devoted during 1938, as before 1938, to construction work. More than two-fifths of all WPA workers in 1938 were on highway, road and street projects, as compared with about a third during earlier years. About a tenth each were on public buildings, parks, public utilities, white-collar work, and sewing projects. Some idea of the work accomplished in 1938 can be secured from a few outstanding figures for the two preceding years:

More than 205,000 miles of roads had been built or improved by Oct. 1, 1937 — about 6 per cent of the total estimated road mileage of the entire country. More than 19,000 new bridges had been completed, 18,000 old ones reconstructed and improved. About 50,000 public buildings had been newly built, remodeled, renovated, or erected as additions to existing structures. More than 4,300 miles of new water lines had been laid, 1,400 miles of old lines replaced or reconditioned; about 6,300 miles of new storm and sanitary sewer lines put down, 2,000 miles improved.

More than 121,700,000 articles, 95,000,000 of them clothing, had been made in WPA sewing rooms for relief clients; over 36,000,000 pounds of food had been canned and preserved; and more than 129,000,000 lunches had been served to undernourished school children.

Hundreds of thousands of persons who could not pay for such services had received aid from WPA medical clinics and nursing service.

Approximately 1,145,000 persons were enrolled in WPA educational classes in October 1937.

About 51,500 paintings, drawings, murals and sculptured works had been produced by the Federal Art Project. Music performances, averaging about 4,500 a month, had attracted a monthly attendance of more than 3,100,000. Approximately 2,800 theatrical performances had been given each month, with monthly attendance exceeding a million. The Federal Writers Project, chiefly occupied in producing the American Guide series that has won recognition as an outstanding contribution to this field of American literature, had completed 116 books and pamphlets in a steadily growing list.