Whittington and his colleagues did not anticipate the means the Executive Branch would use to nullify the appropriations in excess of the President's requests. Mr. Roosevelt did not veto the authorization bill. However, in signing it on August 18, he warned:

"I wish to make it clear that during the present emergency I do not intend to submit estimates of appropriations or approve allocations of funds for any project which does not have important value in the national defense."

By the time the President signed the bill, the Bureau of the Budget had decided that impounding was the only means to halt projects which had no defense value but which had been tucked into appropriation bills that the President had to sign. The decision of Budget Director Harold Smith at the end of July, 1941, to halt War Department construction of certain flood control projects for which Congress had appropriated money in Public Law 71, was the result of four weeks of intermittent discussion and head-scratching within the Bureau:

On July 7, Budget Examiner Charles Curran of the War-Civil Unit in the Estimates Division called his superiors' notice to the impending authorization by Congress of public works projects, some of which the President had not approved. Curran had recently returned from a tour of some civil and military projects of the War Department and had been struck with the waste of money and effort on projects which could never be completed because they did not carry a priority rating to obtain scarce materials. Why, he asked, should not the Bureau of the Budget impound funds for nonessential projects to keep them from getting started in the first place?

Similar concerns were felt by most others in the Bureau, beset on all sides with demands for money to meet the emergency. There was, consequently, at least a partial attitude of receptiveness when Curran proposed that for the first time the Bureau should halt entire public works projects by impounding. Heretofore the Bureau had impounded funds almost solely to effect savings in programs undergoing readjustments which Congress could not have fully foreseen in making appropriations available. A number of times during the course of 1941, reserves were established to effect savings in the traditional manner. The programs of the Civil Aeronautics Administration for civilian pilot training, of the Civilian Conservation Corps and the National Youth Administration for the surplus labor force, and of the Surplus Marketing Corporation for surplus crops, all had begun to feel the pinch of the defense effort. Military pilot training, selective service, war production, and rising food needs demanded curtailment of these peacetime programs. To force curtailment in expenditures, the Budget Bureau impounded funds appropriated to each agency in amounts ranging from $1.6 million to $95 million.

Reducing the level of programs in this way was much safer politically than halting completely a specific project authorized and financed by Congress. To attempt the latter would place the Bureau in the risky position of running directly counter to the will of Congress-and of damaging the standings of individual Congressmen in their home districts, which stood to gain by these projects. A Congressman might easily give way on a question of broad national policy. But to cancel public works projects in his particular district was to hit him personally-and in his most vulnerable spot, his reputation as a good provider for his constituents. It was to threaten the Pork Barrel principle. Mindful of these considerations Curran's chief, Colonel C. L. Dasher, suggested that he sound out Fred Bailey, the Assistant Director for Legislative Reference. Curran recounts the story this way:

"Bailey gave me the impression that he thought I was trying to go a little too far. He pointed out that, in the past, reserves had been set up in order to prevent unapproved use of funds within an appropriation when a change in law had eliminated some requirement otherwise provided for or in order to give effect to the anti-deficiency law. Then he said, in effect, that the appropriation of money did not carry a mandate to spend . . . Now if Congress in its wisdom appropriated more for some program than the Budget thought necessary, there was a question of soundness in attempting to reverse Congress by impounding a part of the appropriation. Certainly, at least the proper segment of the Appropriations Committee should be consulted. Perhaps a case could be made and defended for holding back funds beyond those which could be expected to be used efficiently. But any reduction would need to be made

on a program basis. The executive or administering agency should determine where and how the program was to be modified . . .

"He went on to point out that deliberately stopping specific projects went far beyond general economy and efficiency. It was approaching an item veto. It was one thing to shrink a whole program, but quite another thing to go into the program and eliminate specific items-items individually endorsed or perhaps inserted by Congress. But he said all he would do was advise. It was up to me to put the issue to the Director."

Consideration of the proposed policy became a matter of immediate importance with the arrival in the Bureau of the War Department's request for apportionments for funds appropriated in Public Law 71. Hopefully, the hot issue was tossed to the National Resources Planning Board. But back it came; as far as NRPB was concerned, the question of project control via impounding was strictly a budgetary matter.

The Bureau Acts to Impound

Budget Director Harold Smith accepted the project impounding suggestion. In his letter to Secretary Stimson on July 29th, after quoting the President on the necessity of deferring nonessential public works, Smith went on to say:

"You are thoroughly conversant with the need of deferring the construction of public works which would interfere with the defense program through the diversion of manpower and material. Consequently you can see how the initiation of such works at this time would be out of harmony with the policy of the President as developed since the approval of the War Department Civil Appropriation Act (that is, since May 23, 1941) and would clearly be in conflict with his present program.

"I therefore suggest that you have placed in Budgetary Reserves, in addition to any other reserves, the sum of $1,605,000 of the appropriation 'Maintenance and Improvement of Existing River and Harbor Works' and $7,405,305 of the appropriation 'Flood Control, General.' The funds so placed in reserve under 'River and Harbor Works' would be released at such time as the President found the three projects for which the funds are earmarked to be of important defense value and the flood control funds placed in reserve would be available for initiation of authorized flood control projects when approved by the President as important to national defense."

As word spread that the Bureau of the Budget had halted certain public works projects, Congressmen began to make inquiries. Senator Wagner (Dem., N.Y.) wanted to know what constituted a defense project entitled to funds. Harold Smith replied on August 25, 1941:

"Two criteria for determination of defense value are whether the project is necessary to the armed forces and whether it is necessary to our industrial effort. The first can be determined most properly by those in command of the armed forces. The second can best be determined, particularly as to the relative present importance, by the Office of Production Management."

The Bureau Impounds Funds for Two Oklahoma Projects

The Bureau of the Budget was now to discover the politcal consequences of curtailing public works projects designed for the constituents of individual Congressmen. A sample of these consequences is the flurry caused by impounding funds for two Oklahoma flood projects: the Tulsa levees and Markham Ferry Dam.

On March 25, 1941, the Secretary of War had submitted a report to Congress from the Chief of Engineers recommending completion of a flood control levee on the Arkansas River at Tulsa and West Tulsa, Oklahoma which had been started some years before. The Secretary admitted that the Budget Bureau regarded the proposal as out of line with Presidential policy. Congress nevertheless called for the completion of the levee project, along with others, in a flood control authorization act of August 18, 1941 (Public Law 228 of the 77th Congress).

In submitting supplemental requests for fiscal 1942, the President asked no funds for the Tulsa project. But in the Third Supplemental National Defense Appropriation Act, 1942, passed December 17, 1941, $300,000 (which had been added in the Senate) was appropriated for the Tulsa levees. In the following year, $213,000 more was added, upon Senate initiative, in the War Department Civil Functions Bill for 1943, making a total of $513,000 of unrequested funds for the Tulsa project.

A $15.4 million power and flood control reservoir at Markham Ferry on the Grand Neosho River in Oklahoma was also authorized by Public Law 228 The Federal Power Commission had included the project in its defense program as a source of additional electric power, but the Office of Production Management (OPM, predecessor of the War Production Board) believed (a) that the surrounding area could not absorb the additional energy, and (b) that there was no defense need for the reservoir. No funds were requested by the President, but at Senate behest, $1.5 million was made available in the Third Supplemental, 1942.

On December 18, 1941, the day after Congress provided funds for the two disapproved projects at Tulsa and Markham Ferry, the attention of the Assistant Budget Director for Estimates was called to the two projects. A budget examiner explained to him that the request for funds for the projects had originated with Senator Elmer Thomas (Dem., Okla.), and not with any federal agency. Thomas had introduced into the hearings a number of letters from manufacturers in the area of Sand Springs and West Tulsa citing defense work and warning of the flood danger to their operations. Among the companies were Sheffield Steel, National Tank, and Wheatley Brothers Pump and Valve. The budget examiner recommended asking OPM about the defense necessity of the Tulsa levee project before allowing the Corps of Engineers to proceed. He recommended also that the Markham Ferry and Tulsa funds be placed in

reserve.

Budget Director Smith notified the Secretary of War on February 5, 1942. that $1.8 million for the Markham Ferry and Tulsa projects had been placed in reserve until evidence was received from OPM indicating that the projects had some defense value. Smith's impounding letter seemed only to spur the War Department, for on February 9, it requested $213,000 for the Tulsa project for fiscal 1943.

Not long afterwards a news item appeared in the Tulsa Tribune reporting the resentment of local officials over the stoppage of the levee project. Senator Thomas next informed the Tulsa Tribune (which printed the story on page one) that release of the funds depended upon the recommendation of the district engineer of the Corps of Engineers in the Tulsa area. (Actually, the decision on the defense value of any project had to come from the War Production Board or from the higher echelons of the War Department.) From the 16th through the 20th, Tulsa papers reported that the Chamber of Commerce was taking action to prove the defense worth of the levee project.

On February 18, the same day that budget examiners were recommending retention of the impounded funds, the president of the Tulsa Chamber of Commerce, N. R. Graham, sent a letter to the Budget Director:

"We wish to respectfully protest this decision. This decision overrules the judgment of Congress. Our people feel that we are having far too much government by decree rather than by law; and we have had many expressions of dissatisfaction over the action of your Bureau in this particular instance." Graham went on to emphasize the importance of the levee and reservoir projects for preventing a recurrence of the crippling flood experienced in November, 1941, and for providing additional power. Copies of his letter were sent to the Oklahoma delegation in Congress.

Undaunted, the Budget Bureau notified the War Department on February 24: no release of funds for Tulsa or Markham Ferry. Harold Smith replied to Graham on March 6, also sending copies to the Oklahoma Congressional delegation. He emphasized that when he approved the legislation authorizing Markham Ferry and other projects, the President had stated that funds would neither be requested for, nor allocated to, projects not important to national defense. Smith then explained the problem of materials shortages:

"The manufacture of hydroturbines (which would be needed were Markham Ferry to be undertaken) is in direct competition with the manufacture of guns and forgings. It is impossible for us to undertake at this time the construction of all those multiple-purpose flood control and hydroelectric power development projects which are desirable and economically justified."

On March 10, Director Smith informed Senator Josh Lee (Dem., Oklahoma. up for re-election that year) that the brief of the City of Tulsa in behalf of the levee project had been received and was under study, adding: “In this study, in addition to considering the views of local interests, the relative

importance of any project as determined by the federal agencies directly charged with prosecution of the war effort must be obtained."

About this time, the WPB, which had also received the Tulsa brief, indicated concern over the political ramifications of the Tulsa decision. It sent a legal aide to ask the Budget Bureau: since the levee project called primarily for earth-moving and would not require scarce materials, could funds be released simply on certification from WPB that it had no objection to the project?

No, WPB was told, the President's policy called for a positive statement that a given project was essential to the war effort. Furthermore, the materials question did not exhaust the burdens that the Tulsa project would place on the war economy, since it would require funds, machinery, and skilled personnel which should not be diverted from the more essential war activities. On February 20, when Congress was being petitioned for additional funds for certain flood control projects, Director Smith explained in a letter to Congress that the required sum to be appropriated might be reduced by $7.1 million by drawing upon existing appropriations held in reserve from the projects for which they had originally been intended. Included in the $7.1 million were the reserves for Markham Ferry. Congress acquiesced by appropriating amounts in line with the recommended transfer of reserves, thus "plowing under" the Markham Ferry project among others.

On the House floor on April 2, Congressman Jerry Voorhis of California protested the impounding of $37 million of Agriculture Department funds for the school lunch program since the start of fiscal 1942. Under questioning from surprised colleagues, Voorhis said he understood that the Budget Bureau claimed legal authority to impound funds under the Anti-Deficiency Act and Executive Order 6166. Voorhis disagreed that these justified the impounding of funds and pointed out two possible dangers: the Bureau might impound funds for the Legislative Branch, threatening representative government; or it might increase other appropriations by transferring funds placed in reserve. "When that time comes, the power of the purse of Congress will be gone," he warned. On April 9, Donald Nelson, chairman of WPB, informed the Budget Bureau that a study of the Tulsa project "fails to establish that the project may properly be described as essential to the national defense." "However," Nelson went on, in view of the small amount of materials and equipment involved, WPB "has no objection to the release for this purpose of $300,000 from the appropriation for 'Flood Control, General' of the Act of December 17, 1941."

After this finding by WPB, it was recommended within the Bureau that the $300,000 already appropriated for Tulsa should be kept in reserve and that $213,000 about to be appropriated should be put there.

A feeling of uneasiness seemed to come over the Bureau officials as the impounding process bit deeper. In a memorandum dated April 16, 1942, to Martin, Assistant Director for Estimates, Dr. R. D. Vining, a group head in that division, expressed doubt about the Bureau's legal authority to impound funds. Beyond that, he worried about the political wisdom of holding up projects for which Congress had appropriated funds. Vining felt that there was room for debate about the necessity of the Tulsa project, but even if it were clearly an unwise venture, responsibility for it would not rest with the Bureau. On the other hand, for the Bureau to impound the Tulsa funds was a sure way to court criticism that it had set itself above the law.

Soul-searching was going on at all levels within the Estimates Division.1 While Vining was writing to his chief, Curran was writing Vining (Curran's group head). Called upon by Vining to find a legal basis for impounding funds, Curran turned first to some suggestive, if not permissive language in certain Congressional reports and statutes. Specifically noted was the sentence in the Flood Control Act of 1941 (the sentence which the President had wanted strengthened): "The following works of improvement . . shall be prosecuted as speedily as may be consistent with budgetary requirements." Curran noted also that the House Appropriations Committee had recently spoken of appropriations as "authority to enter into contracts and incur bills," (his emphasis) rather than as mandates to do so.

1 As Vining put it years later. "There was unanimous opinion in the Bureau that no statutory authority existed for impounding funds under 'continuing' appropriations for specific projects as distinguished from annual appropriations for maintenance and operation of government agencies where apportionment was required under the AntiDeficiency Act of 1906."

Curran then turned to a second source of authority for the Bureau's action. the war power of the President. Recognizing that the Bureau's right to stop specific projects during peacetime might be questionable, he contended that the President's war power permitted "the President to prosecute (the) war in all its ramifications by all the machinery available to him." "

The President agrees:

Meanwhile the Civil Functions Appropriations bill for 1943 had gone over to the Senate Appropriations Committee, where Senator Thomas introduced more evidence from industrial plants along the Arkansas River of the need for flood protection. A short while later Curran called Assistant Director Martin's attention, to the fact that the bill was through conference, containing funds for a whole group of projects (including Tulsa) which had never received Presidential approval. With his memo, the budget examiner forwarded a draft of a letter ordering the impounding of certain funds which he hoped the President would sign and send to the Secretary of War at the same time he signed the Bill. Martin, however, had many doubts, including those which his assistant chief, Vining, had planted in his mind a week earlier. He ordered that the draft letter be submitted to the National Resources Planning Board, the second time in ten months that the issue had been shifted in its direction. With a few changes called for by the NRPB, the letter was cleared by the Budget Bureau and sent on to the President.

Casting an eye in the direction of Capitol Hill, the President's political advisers could discern both favorable and unfavorable portents. Four months earlier, Judge Tarver, chairman of the House Appropriations Subcommittee on Agriculture, had criticized the Budget Bureau for impounding $3.4 million for the Soil Conservation Service in 1941. On the other hand, the House Appropriations Committee as a whole had subsequently hinted that it would go along with the President in holding up non-essential public works. In a House report of March 6, 1942, the Committee stated that the President alone had the power to determine priorities among construction projects. This was important, coming from the committee which originated all appropriation measures and which focused upon government-wide problems in contrast to the narrower scope of the substantive program committees.

So the President went ahead. On April 28, he signed the Civil Functions Appropriation Act and immediately blocked the projects of which he did not approve by signing the impounding letter to the Secretary of War which the Bureau had drafted. Noting that Congress had made certain appropriations for public works in excess of his budget requests, the President asked the War Department, to establish in cooperation with the Budget Director, "administrative reserves in the amount which can be set aside at this time by the deferment of construction projects not essential to the war effort and by the suspension of the survey program." He said he would have no objection to a subsequent release of funds for any projects which are shown to be of importance for national defense.

The President's letter settled the internal problem within the Bureau of the Budget. On April 30, Assistant Director Martin issued a directive to the staff of the Estimates Division, referring to the letter as a "dec'aration of policy on the part of the President." The Bureau proceeded immediately to imp'ement the policy, after discussions with the Corps of Engineers, by impounding $17.8 million of the new appropriations for civil works, including $213,000 for Tulsa. The Corps was informed that no funds could be earmarked for Tulsa or Markham Ferry, among other projects.

The Fight for The Tulsa Project

The Bureau had now to defend its new impounding policy against the rising protests of Congressmen and their hurt constituents. Early in June, Budget Examiner Curran inspected the Sand Springs area near Tulsa. He found that the industries there, like most industries in the country at that time, did have some war contracts. But so far as he could tell, the real pressure for the levee project stemmed from the inhabitants of inexpensive cottages in the lowlands near the river. Estimating that the levee would cost twice the $513,000 held in reserve, Curran reiterated his conviction that the Tulsa project was not essential to the war effort and therefore should not be started.

A year later Chief Justice Stone was to say for the Supreme Court. "The war power of the national government is 'the power to wage war successfully.'" (Hirabayashi v. U.S. 320 US 81, 93)