Federal Highway Act
Limited federal and state funds were available for road construction in the late nineteenth and early twentieth century. Road development and improvements took off after federal funding for roads began with the Federal-Aid Highway Act of 1916 and continued with the Federal-Aid Highway Act of 1921.
Federal-Aid Highway Act of 1916
In 1916 Congress passed the first formal highway policy with a regular appropriation of funding to the states. By this time, the number of automobile registrations in the country had reached 2.3 million, and the auto industry and motorists were heavily lobbying for programs and funds to improve roads. The Federal-Aid Highway Act, signed by Woodrow Wilson on June 11, 1916, marked the first time the federal government was directly involved in road-building efforts. Approximately $5 million was appropriated the first year, with the funding escalating in annual steps to total $75 million by 1922. Funding, managed by the Secretary of Agriculture, was allocated by a formula based on a state's population, land area, and road mileage. Under this act, the federal government would finance up to 50 percent of the cost of construction, not to exceed $10,000 per mile.
The passage of the Federal-Aid Highway Act of 1916 discouraged the haphazard construction of roads by counties without state supervision by requiring states to establish a highway department that met the approval of the Office of Public Roads. The state highway commission had the responsibility for the preparation of plans and specifications and all construction and maintenance, while the federal government held the right to inspect all projects. This meant that states had to devote financial resources to highway development and utilize skilled engineering for road designs.
Federal-Aid Highway Act of 1921
Congress continued federal funding for highway construction with the passage of the Federal-Aid Highway Act of 1921, matching state funds on a 50/50 basis. This act provided states with financial aid for the construction of highways under the seven-percent system, in which each state was eligible for assistance for the construction of seven percent of its highways. Within two years, each state was required to designate three percent of their primary roads and four percent of their secondary roads as part of the federal aid highway system. These designated roads were eligible for funding under the act.
Wisconsin received $1,894,816 of the total $75,000,000 appropriated to the states for the fiscal year ending June 30, 1922. To qualify for funding, road designs were required to adhere to the federal government's standards for minimum width, grade, and adequacy of roadbed type for the traffic load. Each state was required to submit their plans to the US Secretary of Agriculture for approval before funds were allocated.
The 1920s were a boom for highway construction and improvements, with over $10 billion invested in roads nationwide. Most states, including Wisconsin, financed this significant road construction through increased taxation and bonds, including general property tax levies, proceeds of county bond issues, revenues from motor vehicle license fees, state appropriations, and contributions from local units of government.