Federal Emergency Relief Administration (FERA)
FEDERAL EMERGENCY RELIEF ADMINISTRATION (FERA)
Before 1929 public relief was not designed to cope with the continuing effects of mass unemployment. The responsibility for helping the destitute lay with towns, townships, and county governments whose efforts were supplemented by private charities. There was great faith in the ability of community representatives to judge who was, and who was not, entitled to public assistance. In order to prevent the growth of dependency, relief was always minimal and usually given in kind rather than cash.
As early in the Great Depression as the winter of 1930 to 1931, however, it was clear that the existing system could not provide sufficient help for the destitute in some parts of the country. Legitimate demands for assistance grew, but tax revenues declined and taxpayers resisted further calls on their contributions to local budgets. Gradually states were obliged to assist their local units, but state coffers were soon exhausted and in some cases constitutional limitations severely restricted the contributions states could make to the relief problem. Private charities engaged in vigorous fund-raising, but by 1932 many donors had lost the will, or the ability, to maintain contributions at a high level. In the vast majority of cases, public and private relief was given without proper investigation by a trained social worker, and record keeping ranged from poor to nonexistent. Many relief agencies expected the able-bodied to perform a physical task, such a wood chopping, before assistance would be given.
Before long the demands for federal intervention, which had previously been limited to help with natural disasters, became too strong to resist. In July 1932 the Emergency Relief and Construction Act made $300 million available for distribution to the states by the Reconstruction Finance Corporation (RFC). Federal funding could be secured by governors in the form of a loan, but only if it was shown that the resources of their states were insufficient to meet legitimate relief needs. In other words, federal loans were to supplement, but not replace, the states' own efforts. By March 1933 the $300 million had been exhausted, but the problems remained acute, and the public waited to see how the new president would respond.
THE FOUNDATION OF THE FERA
On May 12, 1933, Congress established the Federal Emergency Relief Administration (FERA). Initially $500 million was made available for the FERA to distribute to the states as grants rather than loans. The loan policy of the RFC was discontinued, and in June 1934 the requirement that the loans be repaid was waived. However, as with the RFC, all FERA applications had to be made by governors, who were required to give detailed information on how the grant would be used and to provide a full accounting of the resources available within the state. Like RFC funds, FERA funds were allocated on the understanding that they supplemented rather than replaced local efforts. The FERA, under its administrator, Harry Hopkins, was authorized to analyze requests and distribute the funds to individual states within the constraints of a newly devised regulatory framework.
The $500 million allocated by Congress was divided into two equal parts, with $250 million available to states on a matching basis. States could secure one dollar of federal money for every three that had been spent on unemployment relief over the previous three months, provided the standards of relief administration were consistent with those laid down by the FERA. The majority of grants advanced during the first few months of the FERA were made using this rigid formula, but it was soon clear that many states were unable to meet the matching requirements.
The second portion of $250 million was given to the administrator to allocate on a discretionary basis, and all future funding was distributed in this manner. This was a recognition that the impact of the Depression was regionally variable, as was the ability of individual states to cope with the problems posed by it. The imposition of a national formula was, therefore, unrealistic, but the FERA wanted to ensure that each state did what it could to help its own destitute. Hopkins was also determined to impose minimum professional standards for the delivery of relief, including the development of useful work relief projects that would both raise the morale of those employed on them and generate public support. Because its principal concern was loan repayment, the RFC had required governors to provide financial information with their applications. However, the FERA had a more broadly based agenda.
In order to make equitable discretionary allocations, the FERA demanded from all states monthly reports that included details of the numbers receiving relief, the case load, case load costs, the administration of relief operations, and the influence of seasonal factors on relief numbers. In addition, the states provided information on economic conditions, on taxation policy, on current and future debt, and on the possibility of raising additional tax revenue. The data played a crucial role in determining monthly discretionary allocations and in building up an accurate national picture of a wide range of complex social problems. Moreover, FERA field officers advised state relief administrations on federal policy; they also encouraged the adoption of best practice in, for example, determining eligibility for relief and methods of social investigation, and they provided a valuable link between Washington and those implementing policy. As the quality of the monthly state reports improved and the accounts of the field agents were absorbed, it became clear that hardship had many different causes and affected a wide variety of individuals and families.
The relationships that developed between the FERA, the states, and their political subdivisions were important to the functioning of FERA. Each state was required to create a central body known as the State Emergency Relief Administration (SERA), which each month would distribute FERA grants, usually to county relief committees. Appointments to SERAs had to be approved by Hopkins and private welfare agencies were excluded from the administration of FERA funds. Relief clients did not receive their wages or their grocery orders directly from the FERA, but from local relief agencies. The FERA was a state- and locally-run initiative based on cooperation with the federal government. However, where Hopkins judged cooperation deficient, the FERA could assume control of the state's relief administration, and during 1934 and 1935 six states had their relief programs federalized.
THE BUDGETARY DEFICIENCY PRINCIPLE
All applicants for relief were investigated by social workers at a local relief station in order to determine their eligibility. There was widespread support for the view that successful applicants for relief who were fit for work should perform some task that would help maintain work habits. Hopkins and his colleagues were determined that FERA work relief would emphasize projects that were of value to the community, and they encouraged the elimination of demeaning make-work tasks designed solely as a deterrent.
The general rule with all work relief projects was that they should not compete with private business and that remuneration must be sufficient to maintain morale but not so generous that private sector jobs became unattractive. The FERA issued regulations outlining the types of projects that were acceptable, but the selection, planning, and management of them was a matter for states and localities. Relief work was heavily skewed towards road improvements and the construction of public buildings. The unskilled were easily accommodated, but there were relatively few opportunities for white-collar workers and women. Hourly wage rates matched those for similar work in the private sector.
However, the weekly relief wage, or the value of relief in kind, was determined by the budgetary deficiency principle. In the course of assessing relief eligibility, social workers, following FERA guidelines, conducted a detailed investigation of the possible sources of income for each applicant. For example, help from churches or local charities, income from part-time work or the sale of garden produce, or the existence of savings were recorded. The investigation also required the social worker to visit the applicant's home, and an assessment was made of the applicant's needs: What was the cost of food, housing, fuel, and other necessities required to ensure that living standards did not fall below an unacceptable minimum. The difference between the incomings and the needs represented the deficiency in the applicant's budget and the amount of relief, either in work relief wages or in kind, to which the applicant was entitled.
The advantage of this system was that differences in circumstances, including the cost of living, could be taken into account. Moreover each relief applicant was, in theory, subject to a proper casework investigation. However, the exercise was initially very time consuming and also called for regular reinvestigation to ensure that any changes in the client's deficiency budget could be taken into account. There were also formidable managerial problems on relief projects because there was no standard working week. Each worker was employed only for as long as it took to earn the deficiency in his or her budget.
Although the FERA emphasized the need for carefully planned work relief projects paying wages in cash, it proved difficult for some states to deliver this program for their fit needy unemployed. In November 1933, the federal government decided to introduce a new initiative, the Civil Works Administration (CWA), which took over the FERA's role until April 1934. For a short while the CWA provided work for some four million unemployed, whether they were in need of relief or not.
EMERGENCY RELIEF PROGRAMS
After the CWA wound down, a new work relief program was introduced with the FERA and the states resuming the relationship they had established before November 1933. The budgetary deficiency principle that had been suspended under the CWA was reactivated and over five million cases received emergency relief each month during the first half of 1935. Although FERA officials were strong supporters of work relief for the able-bodied, during the first six months of 1935 less than half of all relief cases received work relief wages; the remainder were direct relief cases. Only some of the direct relief recipients were unemployable. It was clear that a number of states lacked the zeal and managerial efficiency required to establish effective work relief projects. In 1935 Roosevelt announced a major change in relief policy. With the creation of the Works Progress Administration (WPA), the federal government would provide a work relief program that would cater to the needy able-bodied. Unemployables would be cared for by the states and would no longer be a federal responsibility. When the president stated that he wanted the federal government to quit the business of relief, it was care of unemployables he had in mind. During the second half of 1935 the FERA was gradually eliminated.
The realization of the complexity of economic distress had persuaded FERA administrators to develop four special emergency relief programs that targeted specific groups. They were Rural Rehabilitation, Relief for Transients, College Student Aid, and Emergency Education. With the demise of the FERA, care for transients became the responsibility of the states.
The FERA was a bold initiative of great significance. The federal government assumed responsibility for the welfare of millions of Americans, both employable and unemployable, and did so by means of grants, not loans. FERA staff sought to improve relief administration standards, and they accommodated local problems and tried to support work relief wherever possible. Thanks to the FERA, relief provision became more generous and payment in cash rather than kind became much more common. The collection of detailed information on relief provision across the nation meant that both urban and rural hardship was better understood and could be addressed more systematically.
Total FERA grants to the states amounted to $3,022,602,326, which represented just over 70 percent of the entire expenditure on emergency relief during this period. Because so much of the allocation was distributed on a discretionary basis, some poverty-stricken states, mostly in the South, had over 90 percent of their spending on emergency relief provided by the federal government. This was an extraordinary and necessary intervention by Washington. The flexibility of the FERA and the high administrative standards it sought to impose on all states made it an excellent foundation for future relief initiatives.
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