A commonly asked question is why invest in Redfields to Greenfields during this economically challenging period in our history. Interestingly, there have been a number of occasions when our nation has embarked on major infrastructure projects during “down years” with transformative outcomes for our economy. Below are examples of such projects.
Erie Canal – 1817
In the aftermath of the War of 1812, the American economy experienced a boom and subsequent bust, characterized by a banking crisis, high unemployment, plummeting commodity prices, etc. Conditions were very dire by 1820
The Canal Fund, commissioned by the New York Legislature, borrowed nearly $8 milling to complete the canal. Despite the large debt incurred, they were all repaid within 11 years of canal operations; $500,000 were raised in tolls in just 1826, five times the interest due on outstanding bonds.
Funding: Public (New York State)
Transcontinental Railroad – 1862
Constructed during the unsettled political climate of the years just preceding and during the American Civil War, the Pacific Railroad Act was enacted by Congress and signed into law by Abraham Lincoln on July 1, 1862. The Act authorized right of way grants and issued $60 million in government bonds to the Union Pacific, which was in turn authorized to sell $100 million in stock.
Funding: Mixed (Federal Subsidies)
Panama Canal – 1904
Following the Spanish American War and during an economic depression caused by the over-built railroad industry, the United States, under President Theodor Roosevelt, began work on the Panama Canal in 1904. The constructed canal created a 48 mile shortcut between the Atlantic and Pacific Oceans, and was completed in 1914, two years ahead of schedule.
National Park Service and US Forest Service – 1933
By the end of the 19th century, widespread industrialization has left many Americans worried about whether the country will have any pristine land left. Congress has yet to establish clear judicial authority or appropriations for the protection of the parks.
Established in 1933 to relieve the unemployment resulting from the Great Depression and provide natural resource conservation, this New Deal program employed more than 3 million men as construction and maintenance workers.
Electrification – 1935
During the Great Depression, the Rural Electrification Administration, one of the New Deal agencies created under President Franklin Delano Roosevelt, was created, on May 11, 1935, with the primary goal of promoting rural electrification. The REA made loans available to local electrification cooperatives, which operated lines and distributed electricity.
By 1939, the REA served 288,000 households, prompting private business to extend service into the countryside and to lower rates.
Funding: Mixed (Federal loan system)
Tennessee Valley AUthority – 1935
The Tennessee Valley Authority is a federally owned corporation created to provide navigation, flood control, electricity generation and economic development in the Tennessee Valley, a region particularly impacted by the Great Depression.
Funding: Mixed (public sold to private)
Interstate Highway System – 1945
I 56tre3Interstate Highway System is a network of limited-access highways. The entire system, as of 2006, has a total length of 46,876 miles making it both the largest highway system in the world and, at a cost of $114 billion, is the largest public works project in history.
Funding: Public (90% Fed, 10% state)