It is obvious, if we propose to utilize these people, our basic program must be expanded and liberalized.

There is, at the outset, the natural and expected expansion of established industries. Inquiry reveals a large volume of such expansion planned, not only by plants, but by railroads and public utilities. Some already has begun.

There is the utilization of war plants as another market for jobs. But where there is one example, as at Willow Run, there are many other plants still idle and without prospects. It is going to take some enterprise and ingenuity and daring to utilize these plants if we are to get full employment.

Many cities are putting on campaigns to attract industry. In Massachusetts, Joseph P. Kennedy, one-time SEC chairman, is crusading up and down the State in behalf of getting new industries.

But, if the unemployed are to be absorbed, such campaigns must create new industries, not just move old ones from here to there.

It is a big job of readjustment, readjustment of ideas, readjustment of the whole approach in industry and labor.

It won't be done by just hoping that everything will come out all right. Here and there some forward-looking people in industry and labor are conscious of the problem. But it will take more interest by more people.

The old formulas won't work here.

We have set ourselves a new goal.

The CHAIRMAN. We have with us this morning our colleague, Hon. Jerry Voorhis, of California, who wants to make a statement on the full-employment bill.

STATEMENT OF HON. JERRY VOORHIS, A REPRESENTATIVE IN THE CONGRESS OF THE UNITED STATES FROM THE TWELFTH DISTRICT OF CALIFORNIA

The CHAIRMAN. Do you have a prepared statement, Mr. Voorhis? Mr. VOORHIS. No, Mr. Chairman.

Mr. Chairman and gentlemen of the committee, I view this bill, first of all, as a statement of policy on the part of the United States. In the second place it seems to me that it is a general over-all framework of procedure whereby that policy can be implemented with the final decisions being left obviously to specific congressional enactment in the future in accordance with the wisdom of whatever Congress happens to be serving at that particular time.

The central purpose of the bill, as I see it, is to state that it is the policy of the Congress to pursue a policy in which there shall be in the Nation opportunities for employment for those people who are ready and willing and able to work. I do not believe that we can afford, if we are concerned about the future of our country, to say less than that today.

There has been a good deal of discussion about whether or not Congress should guarantee the right to employment. I have never understood the bill to carry any implication that it was guaranteeing to any individual any right that he could demand in law from anyone, or any guaranty that any individual would have any particular job. If we go back to the Declaration of Independence we will find that in that document there is the statement that there are certain inalienable rights of men. It seems to me that this bill has the same general connotation as those great pronouncements that have been made in the past about what the obvious rights of men were; and in this day and age I think that one of the rights of men is the opportunity to earn a living.

I would like to point out that as the world is constituted today the American system of life and government and economics finds itself

in the sharpest kind of competition with other systems. We may well face that fact. We may well realize that ultimately the decision on the part of the peoples of the world as to whether they want to go in the direction of freedom or whether they want to go in a direction opposite to that, will be determined by whether or not a free system can offer a reasonable enough degree of economic opportunity and security so that the choice will not lie between freedom with insecurity, on the one hand, or submission to governmental dictatorial control, on the other, as the only means of achieving security.

To my mind the central purpose of this bill is to try to take a step, and an important one, as I see it, along the line of establishing in America a system of life and government wherein there can be both freedom and security. I believe that returning servicemen are going to be pretty pragmatic in their judgments and their attitudes. I believe they are going to judge our work largely by what actually happens to them; not by what we say, but by what their experiences actually turn out to be.

Democracy, after all, is the child of hope; and dictatorship is the offspring of despair. By that I mean that democracy only flourishes in its full flower under conditions where the people of the Nation feel that there is hope for a brighter future.

This bill does two things: First of all, it declares a policy. It declares it to be the policy of Congress to take such measures as may be necessary to maintain a national condition in which there will be opportunity to develop or find jobs by all who are willing and able to work. It provides for a national budget, which is, first, the best forecast that can be made and, second, the best outline that can be given to the scope of the problem in connection with the general national economic picture. That implies a certain responsibility on the part of Government for employment. By that I do not mean at all a responsibility necessarily for Government to give employment. I mean a responsibility on the part of Government to cooperate with all elements in the Nation in bringing about a condition in which employment will be available and possible.

This national budget obviously is not going to be one that will be perfect. It cannot be. Nothing in a democracy is perfect. No probem in a democracy is ever solved perfectly. It will be the best estimate that the President can make in the picture by the forecast of future economic conditions; and thereafter the Joint Committee of Congress provided for in the bill would proceed to a consideration of that budget and to an appropriate consideration of the types of measures that that committee believes ought to be reported to the two Houses, or at least considered by the two Houses, as a means of meeting the situation.

I am quite frank to say, Mr. Chairman, that it is my judgment that it is too much to expect that private industry can provide full employment for our people. I do not believe, in the first place, that private industry is set up to do that kind of a job. In saying that I do not mean that I do not think that all the jobs could be given by private industry, because I think they might well all be given by private industry, and the closer we approximate that situation the better, in my judgment. But what I do mean is that to expect private industry in America to assume a responsibility for employing all the people who

are ready and able and willing to work is not in accord with the fundamental structure of industry.

In the Senate hearings on the bill a man from St. Louis, Mo., by the name of Mr. F. R. von Windegger, who is president of one of the largest banks in that city, made this point, I think, very clear. He said [reading]:

The most enlightened business leaders today acknowledge that business alone, in this machine age, cannot furnish full employment to all those able to and seeking work. In fact, it is recognized that that is not the main purpose of business. Its main purpose is to make a profit. The furnishing of employment is incidental to the main purpose and dependent on the profit. Therefore, full employment being necessary to the continued existence of our economic and political system, and necessary for the general welfare, it becomes incumbent upon the Government to take whatever steps are necessary to fill the gap left by private enterprise. Under our present system, the only way to raise the necessary funds is by taxes or borrowing.

The question before this committee, as I see it, is, briefly, this: Will we, as the Congress, assume to take our share of the responsibility for creating this climate, if you will, or the conditions in the country which will make it possible for jobs to be available? The bill is very clear that it is its purpose for those jobs to be available in private industry rather than on Government pay rolls. And yet a great many people are opposing the bill on the ground that they believe they know what measures will be taken to maintain higher national production and employment, and because they do not like the measures that they believe will be taken. I would like to point out, in the first place, that it is within the power of Congress at any time to decide what those measures will be.

I do not believe that the bill as written, particularly as pased by the Senate, presupposes any particular kind of measure, such as deficit spending for public works to fulfill its purposes. The bill lists many fields of legislation in which Congress may be called upon to take action. I shall not read them, because I know the committee is more familiar with them than I; but they are on page 3 of subsection (d). I would like to take a couple of minutes, if I may, to indicate some of the approaches to this problem which might well be taken and to show that under deficit spending when reliance upon public works is necessarily going to be, or necessarily needs to be, the answer.

I will preface this by saying that, in my opinion, public works should be deliberately used for the purpose of stabilizing employment in the construction industry, and I believe, furthermore, that public works should be prepared ahead of time and, where necessary or useful to the national economy, should be able to be undertaken as soon as any serious drop in employment in the construction industry appears, instead of waiting until we get into the depths of a depression in that industry.

Going back to the theme that I spoke of a moment ago, in the field of taxation alone a great deal might be accomplished in the direction of bringing about full employment. We have yet to attempt in any vigorous manner the application of the principle of incentive taxation to our tax structure. How far that might go in increasing employment opportunities I do not think anyone knows. But what I believe we do know is this, that to gear the tax structure in the direction of making the tax burden fall upon idle funds and easing it upon

active employment getting investment as a policy of government, might have considerable effect. But I am also quite convinced, as the result of rather intensive study that I have given to the monetary and fiscal field, that the very first step to be taken in that field might well be an adaptation of the tax structure so as to discourage the keeping idle of a portion of the Nation's lifeblood, which is the circulating medium of exchange.

I believe that there is another avenue that might be taken quite as well as this one. Incidentally, I do not believe any one kind of measure is going to be sufficient nor that it would be at all wise in a democracy to rely upon any one kind of measure.

Let us suppose that the bill were passed and enacted into law; what would the situation be then? The President would present his budget. Let us assume that it would show that there were 10,000,000 unemployed. I might point out that if that were to be the case in the next few years, in all probability a very high percentage of those 10,000,000 unemployed would be men who have fought in this war. What would we do under those circumstances? It seems to me that opposition to this bill would imply that we were going to take no direct responsibility for that situation. Gentlemen, I do not believe we can take that point of view. I do not think we can afford to take that point of view from the standpoint of the protection of the basic American institutions to which I believe we are all devoted.

If we tried to say we were going to take no constructive steps such as are contemplated in this bill, where would we wind up? We would wind up, it seems to me, inevitably in the very place that some of the opponents of the bill say they do not want to wind up, namely, we would get to the point where Members would be getting up on the floor and saying that hunger is not debatable, that we have to have a relief program, and we would have a direct relief program with another WPA. It is to avoid that, as I understand the picture, that this bill comes here, and it certainly is to avoid that that I have asked for time. to come before you this morning.

It is true, and I will clearly recognize it, that there is another school of thought which under this situation would simply propose that we should run a governmental budget deficit and use the money on public works; and that would be pretty near all that they would propose. In my judgment, that would be a mistake almost as serious as the first one, thought not quite. I think public works have their place, because I think that certain public works are necessary to the functioning of our economy and the protection of the welfare of the people and to a better opportunity for private enterprise. For example, I happen to believe that in fields of industry like the generation of electric power, where all industry needs to use that power and where all consumers need to use it, there is a very good case to be made for measures to be taken to see that that basic necessity of our industrial life produces in the maximum needed quantity and at the lowest economically sound cost. But I think that the purpose of public works should be not primarily an employment-giving purpose, but rather a purpose of doing the job that they are intended to do, and that they should be undertaken at times when they can contribute to a leveling out of employment rather than at times when we already have perhaps the danger that we will overexpand the construction industry.

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What would Congress do if the bill were passed and if it were found that there were 10,000,000 unemployed? What measures would we take under this bill? I ask you to consider for a moment what has been the great failure, so far, in the industrialized nations of the world so far as maintaining a continuous situation of reasonable prosperity and employment of the people are concerned. I submit that that basic failure has been the failure in any such great industrial nation at almost any time to enable its own people to consume in proportion to production. Even the war was not exception to this, because at that time half of the production of America was devoted to the war. At other times there has been a shortage of buying power which has lain at the root of the failure of the market and, hence, the inability of our industries generally to keep going; that failure of the market displaying itself first, perhaps, in one or two lines, notably in agricultural products, sometimes; at other times in industrial products. Then, like a row of blocks that a child knocks down, it affects all the other industries in the country.

In my judgment, if the nations of the world wanted to do the one thing that would be the best guarantee of our peace in the future, aside from the control of atomic energy, that one thing would be to make an agreement among themselves that never again would any of those nations permit a situation to arise where their own people were not possessed of sufficient buying power to purchase what that nation might produce if it had full employment of its people. That is altogether possible.

The key to full employment, in my judgment, is the constant maintenance of buying power equivalent to the power to produce. And this can be achieved, Mr. Chairman and gentlemen of the committee, by measures which do not add one jot or tittle to the actual economic power of to the actual economic activity, even, of the Federal Government, if you want to do it that way-in other words, by a combination of wise tax policy coordinated for economic purposes, plus a scientific monetary policy which yould relieve the Nation of the necessity of paying interest upon its own credit when that credit needed to be put into circulation in connection with a system of social-security benefits broad enough to include not part of the population, but the whole population, and not to cover them for protection in the prime of life or for relief, as ordinarily known, but rather to protect the entire population against certain inevitable exigencies of life, such as old age: a social-security system that board, financed by taxation in times of prosperity and with the out-payment maintained at a stable level in time of declining market and declining employment, but maintained by securing the funds from other sources than taxation. Such a system, if broad enough, could give a means of stabilizing the buying power of the Nation from time to time, and could be a backlog quite as effective as public works to prevent a spiral of declining buying power in terms of threatening depression.

Mr. RICH. You speak of raising the money by some means other than by taxation. Will you enumerate the ways in which you could raise that money?

Mr. VOORHIS. The way I would raise it, Mr. Rich, is this. I would say that as long as we had a condition of reasonably full employment in the country I would raise all the money by taxation. I would, in