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One of the Depression's Depths: Henry H. Blood's First Year as Governor
Out of the Depression's Depths: Henry H. Blood's First Year as Governor
BY R. THOMAS QUINN
ON JANUARY 2, 1933, A SOLEMN CROWD OF UTAHNS assembled on Capitol Hill to witness the inauguration of their seventh governor, Henry H. Blood. The natural chill of that winter day was worsened by a cold fear in the minds of those present and those who heard via radio the installation of their new state officials. Utah's and the nation's economy were desperately out of control. A fourth of the country's work force was unemployed; many of the remainder were laboring at reduced wages or were employed only part-time. In Utah alone 33,000 families were on relief. By the early months of 1933 the bottom of the economic barrel had been reached, but there did not appear to be any means for the nation to extricate itself.
The dull "crump" of the seventeen-gun salute fired by the Utah National Guard as Blood finished taking the oath of office must have sounded to some who were there like the shots fired at a funeral. Could this silver-haired, rather frail looking, sixty-one-year-old man ease their pain by his words today or his actions in the months to come?
Standing behind a flag-draped rostrum. Governor Blood spoke in a clear, flat voice. As a lifelong student of history, Blood knew that far lesser shocks than the present ones had often resulted in violent revolution. He was also aware that such incendiary thoughts were being bruited about among some at that very moment. Thus, his opening remarks emphasized that the inaugural ceremony marked the "peaceful and willing" transfer of power from one group to another, typifying "the very genius of representative government and indicating its safety and strength."
He then launched into a review of the economic scene in Utah:
The order in which Blood surveyed the economic condition of the state reflected his rural boyhood and his adult commercial interests connected with agriculture as farm problems were listed first, followed by mining, business, and finance. Urban unemployment came last in the litany. His remarks on purchasing power are worth a moment's pause. During the early years of the depression, before its causes had been thoroughly analyzed by economists, not many saw under consumption as the real source of trouble. More than once in the year to come, Blood would express his belief that lack of purchasing power was a prime factor, both in bringing on the depression and for its continuation.
Having presented the dreary economic picture, Blood next took up the subject that no doubt held the greatest interest for his audience: the course on which he intended to set state government. His goal was to reduce the tax burden imposed by state and local government. To do so, the people must cooperate; they must not ask for additional services as they had in the past. Legislators must not come to the session due to convene the next week with proposals for expanding government functions. If state government reduced its activities to a minimum, Blood hoped that the good example set would cause cities and counties—which levied most taxes—to do likewise. Blood warned that the general fund was going to end the 1931-33 biennium with a substantial deficit; and, if state revenue continued to fall, the state treasury would be unable to bear the strain of the usual outlays, let alone any new burdens, unless additional sources of revenue were found. The governor's program was obviously not one of spending the state out of trouble.
Some aid from the federal government was expected. Blood said, for direct relief, for silver, and for agriculture. The governor did not dwell on federal programs, however. It would be several months before he and, for that matter, Roosevelt himself realized how extensive the New Deal antidepression measures would be.
As Blood's inaugural address drew to a close, he optimistically predicted: "Utah will come back." There were few, if any, outbursts of joy occasioned by what he had said or proposed; the speech itself lacked emotionalism. It presented a cool, sympathetic, and practical statement of things as they were and were likely to remain.
Blood spent the following week—night and day, he said later preparing his message to the Twentieth Legislature, due to convene in regular session on Monday, January 9, 1933.
The Democratic caucus named the officers and appointed the committees, as that party controlled both houses—51 to 9 in the lower and 13 to 7 in the upper. As a forecast of the economy-mindedness of the legislators, the caucus combined the posts of sergeant-at-arms and chaplain, thus saving five dollars per day. The Tribune called it "the most important" legislature since statehood and predicted it would "face problems calling for decisive, even hard-boiled action." The governor, addressing the legislature in joint session, said nothing to dispute that idea.
As in his inaugural speech, the theme throughout was one of spartan economizing. Blood reviewed the ominous financial situation of the state treasury. According to his estimate, the general fund deficit for the 1931 -33 biennium, ending June 30, would be nearly $2 million. To meet this shortfall, he urged the legislature to authorize a $2 million bond issue. As a new source of revenue, he proposed a selective sales tax on nonessential items for support of the state school fund. He did not suggest a rate, and at this time he did not connect the sales tax with what was to become its prime purpose: providing funds for relief.
A campaign promise of some legislators, Blood noted, was to abolish the income tax filing fee; but, he warned, if that were done, the cost of administering the income tax might exceed the revenue from it. In 1932 the filing fee brought in $199,000, while the income tax revenue was only $134,000.
The governor next presented a plan he hoped would result in a more efficient and more economical organization for state government. He proposed that the legislature create a joint committee of nine men, three from each house and three appointed by himself, to spend the next four weeks studying the present system of organization in order to recommend ways of combining some departments, eliminating others, and reducing costs in general. The report of this Committee of Nine was to be quite influential with the legislature.
With twenty-five banks having failed in Utah since 1929, the governor's proposal to strengthen the banking commissioner must have aroused keen interest. He called for legislation that would determine the extent of court supervision of the bank commissioner, provide the commissioner with a trained staff, and allow for greater efficiency in the liquidation of banks that had failed. He reminded his listeners that "The major activities of the Bank Commissioner should be to prevent disaster, rather than to take charge when it is too late to save the institution." He also asked that the bank commissioner be allowed to pledge the assets of a closed bank to the Reconstruction Finance Corporation in return for a loan to enable the institution to reopen.
Blood reviewed a list of measures to be introduced (though not by him) to the legislature that included a five-day, thirty-hour week for those employed on public works; a minimum wage for men and women; child labor laws; and old-age insurance. He cautioned that these proposals needed to be weighed against possible administrative costs.
Twelve thousand families in Salt Lake County alone were on some form of relief. Blood reported. Federal funds had helped, but he feared that this aid would be jeopardized unless state and local governments increased their efforts. He did not specify to what extent state and local efforts would have to be expanded, nor did he suggest a source of revenue for the recommended increase.
Coming to the end of his message, Blood surveyed the general economic scene, describing the depressed state of agriculture, mining, manufacturing, and business. Without suggesting remedies, he asked the legislature to "assume a friendly attitude...and render whatever assistance can be properly given" to farmers faced with mortgage foreclosures; and he recommended that Congress be memorialized in silver's behalf. Beyond that he did not go. He ended with an appeal to legislators to avoid "partisanship, sectionalism, and community advantage."
The governor's message was well received by the Tribune, which editorially called it "forceful" and "courageous." The newspaper especially approved of Blood's "rigid" economizing to permit the state to balance its budget in the future and "reestablish the government on a firm financial" basis. Although the Tribune accepted Blood's request for a $2 million bond issue, it warned the legislature not to get into the habit of resorting to bonds to pay expenses not met by regular sources of revenue.
Analyzing the governor's message decades later, one is struck by its conservative orthodoxy in fiscal matters, its lack of inventiveness in social welfare areas, and its somberness of tone. No doubt, however, the message, both in what it did and did not contain, reflected Henry Blood's philosophy of government. He did not see state government as the righter of economic calamity. He was not an experimentalist in putting the pieces back together; rather, he was a conservator of what was left after the fall. There was little in the address to revive the spirits of the jobless and destitute. He did not propose a public works program, a mortgage moratorium, or any other device that might lift the cloud a little. The proposals on minimum wages, pensions, etc., were not his, and they were capped by a warning about their possible cost. Taxpayers would appreciate his promises of economy, but those able to pay taxes were obviously in relatively better shape than those who had no worry about taxes because they owned no property and had no income. To one educated in an era of expanding government service, deficit spending, and increasing social welfare legislation. Blood's program may seem somewhat pedestrian and cautious. Judged in the light of his times, however, the message was about what was expected: the governor cannot fairly be faulted for failing to be ahead of times or for not being somebody else with different concepts.
The Committee of Nine issued its report on February 10; its proposals were far-reaching and, to some, painful. Salary cuts averaging 15 percent for state employees were called for; suspension of the state's junior colleges and the branch agricultural college at Cedar City was advised; a doubling up of some positions was urged, e.g., the state banking commissioner would also serve as director of the securities commission; the abolition of some departments, such as the State Building Board, was advanced; and changing some salaried positions to per diem posts limited to $200 per year was proposed. Other specific proposals were all aimed at reducing expenditures to a recommended $4,634,600 for the 1933-34 biennium (in contrast to requests for $6,168,488). The governor, the report suggested, should be given broad power to slash departmental spending at will if, as feared, the $4.6 million estimated revenue proved optimistic.
These recommendations from the Committee of Nine formed the backbone of much of the financial legislation passed during the session. The proposal to give the governor wide authority over the budget was expanded so greatly that the newspapers, without malice, tagged it the "Dictator bill." It empowered the governor to increase or reduce expenditures, take money from one department and give it to another, spend as much money as his judgment dictated for relief, suspend schools for ninety days or any other state activity for an indefinite period, and reduce any payroll. The "Dictator bill" swept through both houses easily, passing the Senate unanimously. One senator declared that the measure violated the state constitution "forty ways" but voted for it anyway.
Public reaction to the vesting of such enormous power in the hands of the governor was favorable. The Tribune said the confidence was not misplaced. The editorial doubted that Blood would ever need or use most of the powers given to him but thought it was a sound idea to be prepared for any contingency. The newspaper praised the governor for his "courageous attitude in inviting these additional burdens to himself... regardless of the penalties attached."
Granting the governor power to act as his own budget committee was motivated by fear that state revenue would not match appropriations. This had already occurred in the 1931-32 biennium and had necessitated the $2 million bond issue, action on which was imperative. Tax anticipation notes of $1 million were due on January 31. To meet them the bonds would have to be sold immediately after their issuance was approved by the legislature. If either house failed to pass the measure by a two-thirds majority the bill would not become law until sixty days after passage—long after the due date of the notes.
The Neslen Emergency Bond bill was passed by the necessary majority in the House, but in the Senate all the Republicans voted nay. Thus, though the bill passed, the money was still out of reach. This partisanship is notable, as it was the only discoverable time during the session when the "loyal opposition" dug in its heels and declined to be accommodating.
The threat to the state's credit rating was met successfully anyway. Blood reached into the state road sinking fund, withdrew a million dollars in certificates of deposit, and traded them to the institution that held the tax anticipation notes. The deficit in the road fund was to be covered when the bonds were sold.
The other new revenue proposal, the sales tax, introduced later in the session as H.B. 218, caused great dissension. Originally, the sales tax had been suggested as a source of money for public schools; but Blood and some legislators soon saw it as a means of raising money for emergency relief, and many of them wanted it used exclusively for that purpose. Blood insisted, however, that at least a small part of the sales tax income go into the general fund. On this point and that of the rate a battle ensued that lasted up to the final hours of the session.
On March 9, just three days before adjournment. Blood sent a special message to the lawmakers urging them to act quickly on the sales tax. He predicted that the "generous" federal relief funds would be endangered unless the state showed its "ability and willingness" to assist. Most of the legislators agreed, but many resisted setting the rate at the 1 percent figure the governor believed was the minimum rate that would provide something for the general fund, too. The legislators favored a .5 percent rate.
The day before the session was to end, a joint committee visited Blood's office to declare that both houses had agreed that no money from the sales tax would be allowed to go into the general fund and that the rate would be set at .5 percent.
Blood must have been extremely persuasive, for when the group left they had agreed to a compromise on the rate—.75 percent—and that anything over $500,000 could be placed in the general fund to cover possible deficits. The agreement was adhered to by both houses.
The Twentieth Legislature adjourned on March 12, having passed 120 bills. virtually all the proposals Blood had made to the legislature were incorporated. The bond issue and the sales tax were there. A new Committee of Nine had been created to investigate government from the state level down to the school districts. The gasoline tax was still devoted exclusively to road construction and maintenance. The income tax filing fee had not been abolished. The powers of the bank commissioner had been clarified and expanded, and the governor had also had his authority over the banks greatly increased.
No doubt both the legislators and Governor Blood were glad the session was over. It had been tiring for all—maybe too tiring, for somehow during the rush to adjourn a slip had been made that would necessitate the calling of a special session. The legislature had failed to set the state tax levy.
With the lawmaking session over, the governor turned to budget-cutting. Until passage of the "Dictator bill" that gave the governor authority to cut departmental budgets. Blood could only request that expenditures be kept down; armed now with real power, he could compel obedience—and he did. He ordered every state agency to submit detailed lists of planned expenditures for the last quarter of the fiscal year ending June 30, 1933. Those that did not come to him already pared to the bone he personally slashed, bringing spending down 20 percent or more.
Layoffs and dismissals were the order of the day. Secretary of State Milton Welling discharged all twenty of his employees; all investigators for the Department of Agriculture, the State Tax Commission, and the Public Utilities Commission were released; and eight juvenile court judges—all Republicans—were dismissed and replaced with eight Democrats who also were to serve as probation officers at no increase in pay. A vacancy in the State Road Commission was filled by the governor's appointment of Attorney General Joseph Chez to the position, thus saving $3,000 in salary.
Of slightly more than one hundred formerly salaried positions filled by the governor's appointive power, only some twenty that year carried a regular paycheck; the remainder became per diem posts with a $200 a year limit. Blood's own staff was tiny in relation to the amount of work to be done. It consisted of George Sutherland as secretary and factotum, a stenographer, and a driver-handyman. The state had only 602 employees in April, and the number was further reduced. Survivors could look forward to an average of $90 per month pay.
The governor declined to support the State Fair for 1933 and 1934. He also rejected a request that Utah place an exhibition in the Chicago Century of Progress Exposition.
These and many other expense-paring acts were considered essential. Roughly half of Utah's property owners had failed to pay their 1932 property taxes. Revenue to the state from the corporation tax and the income tax for 1933 ran $82,000 behind the April 1932 figure; of those who had filed a return for the latter levy, only 8.2 percent, or 6,044, had incomes sufficient to pay any state income tax atall.2o
The red in the state's budget reflected great suffering by the citizens. Hundreds of them wrote to the governor appealing for help. Tragic stories, often scrawled in pencil on odd bits of paper, crossed his desk daily from men, women, widows, the elderly, and the young. Blood answered virtually all of them with advice when possible and commiseration in all instances.
As the Utah State Legislature neared the end of its two-month struggle to cut appropriations and as Governor Blood became immersed in reducing state activity to a minimum, the federal government was about to launch a program diametrically opposed to that undertaken in Utah. That the national leaders would find themselves on such a free-spending course was as great a surprise to most of them as it was to the people of the nation who, while praying for release from the grip of the depression, were unsure of the means of deliverance.
Late on the afternoon of March 2, Blood had sent an urgent message to the legislature asking for authority to declare a bank holiday. The abrupt request, the governor explained, was not due to any suddenly worsening conditions of Utah's financial institutions; they could handle normal demands. But, as the governors of all the surrounding states had officially closed banks under their jurisdiction, Utah would have to follow suit to prevent out-of-state deposit withdrawals and to avert local runs. The legislature complied quickly and by 8:30 P.M. Governor Blood had signed the proclamation declaring a five-day bank holiday starting March 3.
Public reaction was ambivalent. Bank runs were forestalled, but individuals and businesses found it difficult to function without cash. Editorially, the Tribune applied its favorite eulogium to the governor, calling his "timely" action "courageous."
On March 4—inauguration day in Washington—Roosevelt issued an executive order, effective March 5, declaring a national bank holiday. Blood wired approval to the president. Then, always a stickler for legal niceties, the governor issued another proclamation to extend Utah's holiday to coincide with the nationally declared moratorium; and when the latter was extended to March 10, Blood issued still another proclamation.
Called into special session on March 9, the new Congress received an emergency banking bill that offered government assistance to reopen banks with liquid assets and to reorganize those without. The bill was passed the same day. In Utah the state banks were examined by Blood and Banking Commissioner John Malia who applied the federal criteria with some adaptations. By March 14 all Utah banks, both state and nationally chartered, were open again. The speed with which this was accomplished was due, Malia explained, to the fact that Utah had already "been through the fire" with banks defaulting, and those that had survived through 1932 were "sound."
The successful culmination of the bank holiday for Utah and the nation was the first of many such successes that accrued to Roosevelt. The New Deal looked to be more than j ust a slogan; it might become a reality.
Governor Blood encouraged Utahns to support the president. During the first few days of FDR's term. Blood declared the following Sunday as a day to "conduct appropriate exercises in a spirit of patriotic devotion...." He called upon Utahns to show their complete willingness to support every move undertaken by the president for the "amelioration of the present deplorable economic conditions."
As the famed Hundred Days began to peel from the calendar, with almost every day bringing new legislation and new hope, the governor continued to further the cause of the New Deal.
When Utah's legislature adjourned on March 12, Congress was just getting into gear. With FDR and his Brain Trust feeding the mill, it ground fast—if not fine—and the bills flowed to the president's desk to be signed and dispensed like loaves of bread to the hungry. There was something for everyone. Among the measures that affected and/or benefitted Utah most were: the Federal Emergency Relief Act (FERA), the National Industrial Recovery Act (NIRA), and the Agricultural Adjustment Act (AAA). These basic pillars of the early or first New Deal were quickly formulated to grapple with the two initial and most pressing of the three "Rs": Relief, Recovery, and Reform.
These major facets of the New Deal diamond were still in the rough when Governor Blood announced on April 12 his decision to journey eastward to examine the federal stonecutters at work and possibly to stake out Utah's claim to the gem being prepared. Congress was beginning its second month, and legislation already enacted or under discussion was fostering hope but some confusion, too. Blood intended to get a clearer view of what was happening.
One of the first results of the New Deal had been detrimental to Utah as far as Blood was concerned. Federal road funds due Utah had been cut off, bringing to a halt the state's prime employer of the unemployed. Washington explained that the president was pooling all appropriated but unspent road funds to form a nucleus for financing the Civilian Conservation Corps (CCC). Blood, who had been chairman of the State Road Commission prior to his election as governor, intended to fight not only to release Utah's road funds but also for a continuation of the program and, if possible, for its expansion.
The National Industrial Recovery bill, being debated in April, held out a promise to Utah, too. Its public works section might provide Utah with much money. Blood had already prepared a list of projects that might qualify, and when he left for Washington he took with him proposals costing more than $57 million that included state buildings, sewage plants, irrigation and reclamation works, and highway construction. All the projects. Blood said, would "contribute to the permanent needs and future development of the state," ultimately pay for themselves, and provide many jobs during their construction.
During his four weeks in Washington the governor saw many officials, including the president, sat in many meetings, and achieved mixed success. He quickly discovered that the Public Works Administration (PWA) was not interested in individual projects at that time but was, instead, still trying to arrive at a total figure for public works that would be adequate for the entire nation. Therefore, the governor submitted his $57 million program for Utah's share and went on to other business.30
With the help of Secretary of War George H. Dern (Blood's predecessor as governor), he saw President Roosevelt and plugged for Utah's public works program, the silver interests, and highway construction. Blood became the most deeply embroiled and achieved his greatest success with his highway proposals. On his arrival in Washington the governor had found New Deal officials indifferent to highway construction both on its own merits and as a means of providing employment. The proposed federal budget for 1933-34 allocated little for road construction. Blood, drawing on contacts made while president of the National Association of Highway Officials, organized a lobby on the spot and paid a number of visits to the budget director and other officials.
With the Utah governor as spokesman, the lobby was able to wring a promise of increased funds for highway construction. The group also beat back an attempt to place highway construction under the control of the PWA whose boss, Harold Ickes, wished to allocate the monies on a basis of population. By keeping control of the federal road program in the hands of the U.S. Bureau of Roads, which had a different method of parceling out the funds. Blood estimated that Utah's share was increased by 50 percent.
In a second meeting of the governor with FDR, the president confirmed that Blood's requests and suggestions would be acted upon favorably. The Tribune's Washington correspondent said that federal officials were "frank to admit that Governor Blood's knowledge of highway problems and his influence with the administration were of inestimable value" in achieving success with the road program. Utah received $4,194,709 for highway construction in 1933- 34; and, in addition, the money due Utah but not delivered for the preceding biennium was released.
While in Washington, Blood also investigated the CCC and was pleased that 4,000 young men would soon be at work in Utah on conservation projects. He especially liked the provision that the CCC recruits would be from families on relief and that part of their pay would go to their families. His request that some of the CCC boys work on flood control along the Wasatch Front was deferred until a policy decision was reached on whether work could be done on private land.
When Governor Blood returned from Washington and its scenes of hectic but purposeful activity on May 4, he found the pot bubbling in Utah, too. Attorney General Chez had announced that the governor would have to reconvene the Twentieth Legislature. Queried en route home by a reporter. Blood was caught off guard and indicated his uncertainty; and, even if a special session had to be called, he did!not intend to ask the legislature to consider repeal of the state constitution's prohibition clause as some had suggested.
On reaching the State Capitol, Blood immediately asked Chez for an opinion on whether the State Tax Commission had the power to set the tax levy. Constitutionally, Chez insisted, the legislature only must fix the mill rate. That seemed to settle the first question: there would be a special session. An answer to the second question— would the agenda include consideration of the repeal of state prohibition?—was long in coming. Pressure on Blood to answer affirmatively came from the Utah State Bar Association, the Democratic State Central Committee, the Tribune, and other sources. The LDS church and other prohibition exponents were equally adamant that the question not be brought up.
In early June, Blood proclaimed July 10, 1933, as the date of the special session. Unwilling to accept responsibility for including the prohibition question on the agenda, the governor asked that the legislature take care of the mill levy and "consider any other matter which may be brought by the Governor to the attention of the Legislature in Special Session." He then let it be known that if the members wanted to take up prohibition they could petition him to that effect, and he would accede. This placed the onus on the legislators and put Blood in the position of merely bowing to popular will. The Tribune applauded his decision, caviling only at its being "belated," and confidently predicted that the legislators would act favorably on the liquor question as there had been a "remarkable change" in attitude since the regular session.
Attorney General Chez decided that if the special session acted to allow Utahns to vote on the state constitution's prohibition of liquor, the vote could be held in 1933 rather than 1934 by a change in the general election laws that heretofore had permitted general elections only in even years. By moving the state referendum up to 1933, both it and the Twenty-first Amendment to the U.S. Constitution could be disposed of at the same time and at a savings in cost.
The "wets" were delighted with the idea; and when the Democratic Caucus met, a petition was circulated—to Republicans, too— asking the governor to include both the state liquor question and the change of election dates on the agenda. Knowing now for certain just how eager the lawmakers were to take up the liquor issue. Blood cannily held off submitting it until other measures of greater importance to him had been acted upon.
These other matters that intruded on the legislature arose out of developments in Washington. Congress had passed the NIRA, and its terms required state legislative action to permit Utah to participate fully in both of its main antidepression features, the PWA and the NRA. To provide that help. Blood asked for legislation that would (1) authorize him to appoint advisory boards to coordinate state-federal action in the administration of the NRA and the PWA, (2) provide for such actions as would be necessary for the state or any of its political subdivisions to meet any requirements of the NRA or the PWA, and (3) provide the necessary financial support to enable Utah to make use of the federal funds and to provide for unemployment relief and for the support of the state government."
The increase from a .75 to a 2 percent sales tax, which Blood now began to fight for, was only partially for the benefit of the general fund. The revenue hike would be primarily used to qualify the state for its full share of FERA aid and PWA funds. Since PTRA relief dollars were to be matched in part by the states, the governor had every intention of seeing that Utah did the best it could. Another portion of the sales tax revenue would be used to qualify Utah for PWA funds. The PWA would pay 30 percent of a project's cost and loan the project's instigators the remaining 70 percent at low interest; the principal was to be met over twenty years from the selfliquidating aspects of the projects themselves. The interest. Blood determined, would come from the sales tax.
Opposition to raising the sales tax was strong, with the chief antagonists in the House. They resisted every effort to j ump the tax to 2 percent right up to the final day of the special session. Delaying tactics, in fact, caused the session to drag on for almost thirty days. The House wanted to boost the sales tax to 1 percent and to raise any additional revenue needed from increases in the corporation franchise and utilities taxes, or by imposing a new tax on chain stores, or by selling bonds. The nature of the alternative proposals and the House's refusal to move quickly brought down the wrath of the Tribune, which castigated its "stalling" and blasted the "eccentric bills" introduced by "agitators."
Governor Blood appeared icily perturbed, as reflected in the tone of a message sent to legislators as they entered the third week of deliberations: "I beg leave you will not think I am overstepping the bounds of respectful propriety when I inform you that the eyes of the people...are upon this Legislature, and your constituents have a right to expect you to complete your work without further delay." He also quoted from a news dispatch in which Harry Hopkins threatened to cut off federal funds to any state that did not provide money of its own for relief.
The obvious need for relief funds and PWA projects, the governor's insistence, the Senate's refusal to consider any increase other than the sales tax, and the heat of the summer ultimately combined to force the House to acquiesce. The tax was set at 2 percent, with such a rate estimated to bring in about $2 million a year. The Tribune remarked, half mistakenly, that the tax was an "emergency" levy and would, no doubt, be repealed as soon as conditions improved.
The fight over the sales tax had created much heat, but it did not impede the passage of other major legislation. Once the liquor question was before them, both houses quickly approved the joint resolution by the required two-thirds majority; the question of retention or repeal of state prohibition would be submitted to the public, with the governor empowered to set the exact date for the vote. Legislation was also enacted that would keep the state dry— except for 3.2 beer—after January 1, 1934, even if the state's dry provision was stricken from the constitution. This would give the state time to decide on policy and set up machinery to control hard liquor.
The PWA aspect of the NIRA was also reflected in state legislation. Boards appointed by the governor would sift through proposed building projects. The state, municipalities, and school districts were authorized to form corporations for the purpose of borrowing from the federal government, to enter into contracts with government agencies, and to lease from the PWA projects built by it. The interest payments on loans negotiated by towns and school districts were to be paid by the local political unit if possible, but where necessary the state would underwrite payments from the sales tax.
The legislature had armed the governor with all the powers he had thought necessary to combat the depression on the state level. These powers, for the most part, were to be used as auxiliary supports of New Deal legislation. The governor's role was really that of an expediter rather than innovator.
As expediter. Blood created a host of boards to correlate state and federal activities. He named Robert Hinckley, Ogden businessman, to head an expanded Public Welfare and Emergency Relief Board. This group acted as a clearinghouse for requests for funds submitted by county relief committees and distributed to them the available federal and state monies. This board, the Public Works Committee, and the governor decided on an 85-15 percent split of the sales tax revenue, with the larger portion going to direct relief and the smaller to public works' interest payments. Some critics urged that all the sales tax money go to relief, but Blood insisted that public works projects also be furthered to provide jobs and cut down on the relief rolls—which in August 1933 stood at 20,000 families. This, by the way, was a drop of 38 percent from the winter high earlier in the year. A combination of higher private seasonal employment and the various public works projects, notably road construction, had partially blunted the sharp edge of the depression.
The thousands who remained on relief still had to be cared for, and the sales tax supplied the state with its prime weapon. It was not popular with many Utahns (who, inevitably, called it "Blood money"), and the governor was forced to defend it more than once. In a September press statement. Blood said he had heard that merchants were apologetic or caustic when collecting the tax; the governor appealed to businessmen to "immediately impress [on] all...that their duty is to support every movement intended to relieve [the] suffering of those unable to provide for themselves."
By the end of the year the sales tax had brought in $660,893— almost all of which went for relief. The FERA provided an additional $2,186,702. The latter figure represents only money that passed through state hands. Several hundred thousand dollars more went directly to individual Utahns who became temporary employees of the Civil Works Administration. The CWA, also under the direction of Harry Hopkins, was created in the fall of 1933 to get the nation through the winter when it became obvious that the PWA was not stimulating enough jobs and the FERA was not providing large enough payments to those on relief. By dealing more directly with the people, it partially bypassed state and local relief boards. It also furnished work, not handouts. By December, 10,000 Utahns were on the CWA payroll and were receiving $133,430 total weekly wages.
The legislature had also enacted legislation to allow Utah to combat the depression by means other than relief doles, which were meant to boost consumption. Controlling production was another avenue that, with the creation of the National Recovery Administration, Utah traveled. Governor Blood, as did most everyone at first, placed high hopes in codes that would encourage harmony among related business interests and between management and labor. Upon passage of the NIRA he had endorsed the NRA, saying: "This is no time for an unfair minority to continue its self-seeking policies; it is the time for courageous action on the part of employers and industries generally." He believed prosperity could be enjoyed by the whole people if the president's plans were carried out.
Blood appointed members to the Utah State Recovery Administration, and this group worked closely with the federally appointed Utah Recovery Committee of the NRA. Blood served as joint chairman of an executive committee drawn from both organizations. National codes covering interstate business and industrial trade associations were rapidly adapted to Utah's intrastate needs. Enforcement of the state codes was delegated to citizens committees in the various communities. How these local groups would handle violations was rather vague, but in extreme cases they could appeal to the state courts. The governor signed the first state code, which covered Utah's coal industry—then rocked by labor strife—on September 26 and by the end of the year had approved sixteen more.
Blood had reluctantly vetoed as unconstitutional a bill declaring a moratorium on mortgages passed by the regular session of the legislature. Since then. Congress had enacted the Home Owners Loan Act (HOLA) which provided federal funds to refinance home loans. The HOLA was deluged with applications and could process them but slowly. In the meantime, Utah home owners had their backs to the wall. In August, Blood called a meeting of Utah's bankers and loan company officers and persuaded them to voluntarily grant a ninety-day moratorium, during which time Utahns could apply for federal refinancing and receive replies. The move was successful, and by the end of the year HOLA had forestalled mortgage foreclosures for 353 Utah families at a cost of $881,000. Farmers benefitted from the mortgage moratorium, too, and received a similar refinancing service from the government via the Farm Credit Act.
Historically, Utahns had experienced chronic water shortages. Although 1933 was a fairly dry year in Utah, it gave only a hint of what was to come. Blood hoped that the PWA would help in the construction of dams and irrigation systems to alleviate this perennial problem. His expectations were bolstered when two dams, Pineview and Hyrum, were approved by the PWA in August. That same month, the State Emergency Committee on Public Works— which Blood set up with himself as an ex officio member and William R. Wallace, a Salt Lake businessman and former Chamber of Commerce official, as chairman—began sifting through other requests from cities, counties, school districts, and the state. The projects ranged from sewers to tunnels and from roads to reclamation projects.
One of the first decisions reached by the committee was to ask the governor to return to Washington and shepherd the Utah projects through the intricacies of the PWA bureaucracy. Blood set out on September 26 with a $40 million portfolio of requests, including $17 million in reclamation projects for Moon Lake, Sanpete County, and Deer Creek3
His chief antagonist was PWA director Harold Ickes. During the eight weeks Blood was in Washington they confronted each other often—too often for Ickes, who confided to his diary:
Blood and Ickes looked at the problem differently. Blood put a high priority on his reclamation proposals, first, as a means of employment during their construction, and second, as essential to Utah farmers who often faced drought conditions. On the other hand, Ickes, supported by Secretary of Agriculture Wallace, viewed most reclamation projects as inimical to one of the major aims of the New Deal: to reduce crop surpluses. To these men more water meant more production, and more production would add to the existing surplus of commodities that were keeping farm prices down.
Blood haunted the PWA offices, trying to make people there see it his way. At first, Ickes and the PWA board put him off with promises of consideration "soon." But soon never came. Ickes finally told Blood that he had no intention of approving the reclamation projects for Utah unless FDR personally told him to do so. Blood accepted the challenge and went to see the president, who was busy. Blood was persistent and spent one entire day cooling his heels in a White House waiting room without seeing the president. Roosevelt, aware that Utah's governor was there, asked Dern what the problem was. Dern explained, and FDR arranged for Blood to see Ickes one more time. At that meeting, with the presidential blessing bestowed, Ickes reluctantly promised to approve at least part of the reclamation requests. A few weeks later $4.5 million was granted to the Deer Creek and Moon Lake projects. "May God bless you and yours," Blood wired Roosevelt when the announcement was made.
Though the governor's efforts to win acceptance of the reclamation projects by the PWA was the most frustrating and time consuming, delays in processing other requests submitted to the PWA added their strain to the governor's patience as well.
Utah had put in a bid for $1.5 million for construction of such edifices as a home economics building at the Utah State Agricultural College and a library at the University of Utah. At one point, the PWA even "lost" the applications for these projects, but Blood "found" them. The "soon" gambit was used frequently, too. Determined not to be put off, he became thoroughly nettled. Usually an even-tempered and soft-spoken man. Blood, after one particularly unsatisfying meeting with the PWA board, snapped:
A week later the governor got the approval he sought, and the colleges and other state agencies got their new buildings.
Most of a $12 million city, county, and school district collection of requests were also held up—but for once not by the molasses-slow PWA. These proposals were submitted but laid aside at the governor's suggestion until a decision affecting them was rendered by the Utah State Supreme Court. Constitutionally, political subdivisions were limited in their bonding capacity, and many such limits had already been reached. The question before the state's highest court was whether the legislation passed by the special session lifted the bonding lid. The new laws specifically authorized political units of the state to enter into long-term contracts with the federal government for loans to construct public works. Taking these loans from the government would have the same effect as being indebted from bond sales, but the difference was that the state government guaranteed to pay the interest charges from the sales tax revenue. The court did not pass on the subject until Blood had returned to Utah, so he could do little for the projects while in Washington. When the decision did come it upheld the constitutionality of the special session's enactments. This could have started the PWA wheels rolling again, but Ickes kept on the brakes. On December 6 he announced that Utah's other PWA fund requests would receive no further consideration until next year. According to his calculations, Utah had already been granted 270 percent of her share of the PWA's $3.3 billion kitty.
The keeper of the FERA's money was much more amenable than Ickes. Harry Hopkins saw Blood during his sojourn in Washington and was sympathetic and helpful. He was impressed with Utah's efforts to help itself with the sales tax proceeds and, when informed by Blood that relief needs still exceeded income, proposed that the FERA would make up any deficit between Utah's spending for direct relief and what was actually required. He also approved a special grant to help needy students at the state universities by paying them through the winter at twenty-five dollars per person.
Blood found time to join a delegation representing western sugar beet interests that paid a call on Secretary Wallace to lobby for high production allotments. Noncommital but friendly, Wallace showed proper concern for the beet growers' welfare. Blood, by way of the press, passed on the word that he was certain that Wallace would come up with a satisfactory program in the near future.
Returning to Utah after an eight-week absence,the governor announced "I [am] confident of having accomplished the things I went to Washington to do." He recounted his easy success with Hopkins and his hard-won partial victory over Ickes. He even sympathized with PWA bureaucrats who were handling about 550 applications per month.
In truth. Governor Blood's time in the nation's capital had been well spent. Additional relief monies, more CCC camps, the $1.5 million for state buildings, and money to start on the reclamation projects were on their way to Utah. The total granted was far less than the figure requested, but there was hope for more in the future; and, with the reclamation projects, at least,there is little doubt that they would not have been approved except for the stubborn persistence of the governor. The energy and initiative Blood displayed during his first year in office helped to set the state on a firm path toward recovery. Difficult years lay ahead, but the somber picture he had painted at his inaugural was slowly brightening.
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