$75,000,000,000 in the period 1927-30, to an annual average of less than $51,000,000,000 in the period 1931–34.
In the next 4-year period, 1935-38, private construction and maintenance activity was increased, rising from an average of 7.0 percent of the national income for the previous period to 7.7 percent, as shown in table 22. To have provided a total construction and maintenance program amounting to 15 percent of the national income, a public expenditure equal to 7.3 percent of the national income would have been necessary. As the public expenditure of the preceding period (table 22) was 4.9 percent of the national income, this would have called for an increase equal to 2.4 percent of the national income.
As shown by table 24, the Federal expenditure was actually increased over that of the preceding period by an amount representing 1.9 percent of the national income. No part of this increase was provided through the normal Federal-aid highway expenditures. Relief expenditures for highways were increased by an amount equal to 0.6 percent of the national income, and the balance of the increase, amounting to 1.3 percent, was provided, 0.7 percent in normal construction operations other than highway work and 0.6 percent in relief expenditures for other than highway work.
But while the Federal Government was thus increasing its construction expenditures by 1.9 percent of the national income, other governmental expenditures for construction and maintenance declined by an amount equal to 1.4 percent of the national income, so that the net increase in public expenditures was only 0.5 percent, which with the 0.7 percent increase in private construction increased the total construction and maintenance program to only 13.1 percent of the national income from the lowest average of 11.9 percent registered in the preceding period. Nevertheless the national income increased from an annual average of less than 51 billion in the preceding period to more than $63,000,000,000 in the period 1935-38. Recovery was marked, but by no means assured, and unemployment was still large.
It remained for the threat of war to provide the stimulus necessary to raise the construction ratio to the 15-percent level suggested as desirable. The 14.8 percent ratio recorded for the 4 years from 1939 to 1942 was largely the result of expanded Federal construction operations incident to preparation for the war and its conduct in the first year. Private construction in this 4-year period dropped from 7.7 to 7.1 percent of the national income (table 22). Public highway construction, including maintenance and relief work, dropped from 2.9 to 2.2 percent of the national income (table 24). Relief expenditures for other than highway work dropped from 0.8 to 0.4 percent and non-Federal expenditures for other construction work increased only from 0.2 to 0.4 percent of the national income. The large increase occurred in Federal expenditures other than for highways, an increase from 1.3 to 4.5 percent of the national income. This increase was sufficient to offset the other declines and restore the total construction ratio to an average of 14.8 percent for the 4-year period. It was devoted largely to the construction of Army camps and other military and naval establishments and to plants for the manufacture of munitions of war—all, in their ultimate purpose, designed to train men and provide means for destruction. But nevertheless the effect
