inson and Hoover proposals included virtually identical provisions for $300 million in direct relief aid. The relief funds, according to a provision devised by Senator Robert Wagner, would be in the form of "loans" to be deducted from future highway grants. Although Progressives in Congress and social workers disliked this approach, they temporarily dropped their opposition to get a relief bill passed. 95
There followed a politically charged debate over the public works provisions of the bill and the role of the Reconstruction Finance Corporation, which was designated to distribute loans to the states. From the outset, Hoover opposed a Democratic plan for a $500 million bond issue for federal public works. Then John Nance Gamer, the House Speaker and a contender for the Democratic presidential nomination, proposed that RFC loans be provided directly to "any person" who needed aid, not just corporations and states. 96 The conflict over these issues, which dragged on through July, has created the impression that Hoover continued to resist a federal relief program. This is not the case. Both sides had agreed on the relief formula in May; the delay in passing a bin was as much the product of political posturing by the Democrats as by recalcitrance on Hoover's part. 97 Finally in late July, with relief having been discontinued in Philadelphia and on the verge of collapse in Chicago and with recipients subsisting on bread and milk in Detroit, Hoover signed the Emergency Relief and Construction Act of 1932. The bill contained compromise provisions for federal and state public works, but the most important element, for our purposes, was $300 million in federal aid for local relief. Despite the fig leaf that these were temporary "loans," the reality was that the federal government had permanently entered the field of means-tested relief.