APPENDIX Hon. CARTER MANASCO, OFFICE OF THE MAJORITY LEADER, House Office Building, Washington, D. C. DEAR CARTER: I am enclosing an interesting editorial on the full employment bill that appeared in the Boston Herald on August 27, 1945. While the Boston Herald is a very fine newspaper, from a political angle it is Republican. I thought this emphasized the value and importance of the editorial on the above bill. When hearings are held on the bill it might be well to insert this editorial as a part of the hearings. With kind regards, I am JOHN W. MCCORMACK. [From the Boston Herald, Monday, August 27, 1945] FULL EMPLOYMENT A notable feature of the discussion of the full employment bill is the absence of party politics. Democrats originated the measure and President Truman will ask for immediate passage of it, but various Democrats are opposed to it, and many Republicans are for it. If Dewey had been elected President, the situation would have been similar, perhaps, with Republicans taking the initiative and Democrats giving some assistance to it. The underlying principle is obviously so unexceptionable that the differences of opinion have to do with ways and means, not with fundamentals. Everybody is so fearful of the far-reaching social, economic, and political effects of protracted mass unemployment that the partisan issues which would have bulked big 5 or 10 years ago have become almost negligible. The nonpolitical approaches of Republicans and Democrats in and out of Congress are explained in part by the party platforms, the speeches of the candidates, the statements of practically all the Governors in 1944-including Leverett Saltonstall-and by State legislation designed to cushion the shock of unemployment. The Democratic platform speaks of full employment in the opening paragraphs. Governor Dewey said in his address of acceptance: "We Republicans are agreed that full employment should be a first objective of the national policy. By full employment I mean a real chance for every man and woman to earn a decent living. At a decent wage." Just as they had identical views of the Axis enemy abroad, the two parties saw the great post-war domestic problem eye to eye. The moderation and steadiness of President Truman have tended to weaken opposition to a full employment measure. If President Roosevelt had survived, many Republicans and Democrats would have objected to any such measure, in the belief that it would be administered poorly by officials who had a zeal for reform, further centralization of authority and drastic control of private business. These persons have more confidence in Truman and his associates as administrators than they had in President Roosevelt and the other pronounced New Dealers. "Planning" is not such a terrifying term as it was when the New Dealers made the plans. The pending bill has various provisions to which Republicans will object as Republicans. But the acceptance of the principle involved seems to point to the passing of legislation of some kind to check unemployment before it becomes so ominously large as to threaten another period of depression and ill-advised political innovations. NEW YORK 17, N. Y., November 12, 1945. Hon. CARTER MANASCO, Chairman, Committee on Expenditures in the Executive Departments, House of Representatives, Washington, D. C. MY DEAR CONGRESSMAN MANASCO: You were good enough to write me recently that you hoped to include my name among those called to testify before the members of your committee on the full employment bill. When I saw that the committee had closed the hearings I revised the statement for submission in writing. It is herewith enclosed. I hope that you will find time to examine this statement. It is based on 25 years of work in the employment field, including 7 years spent in following the effects of Government spending for Mr. Morgenthau. The statement points out that the bill in its present form would mean an annual expenditure of 10 to 20 billions even in good years. It proposes as a substitute for the present bill that Congress establish a special investigating committee to bring out a complete study of the issues involved in full employment. Sincerely yours, EDNA LONIGAN. STATEMENT ON THE FULL-EMPLOYMENT BILL, H. R. 2202, SEVENTY-NINTH CONGRESS, FIRST SESSION (By Edna Lonigan, economist, Brooklyn College, and formerly chief statistician, the New York State Department of Labor, and specialist in relief and employment for the Secretary of the Treasury) The proposed full employment bill may be considered in three clear-cut parts. The first (secs. 1 and 2) contains expressions of sentiment in favor of full employment, small business, and the American home, to which everyone would gladly subscribe in principle. It would be helpful if all these objectives could be achieved by legislation. The question here is whether this bill assists in achieving them, or whether it may be a barrier to the expressed purpose of maintaining full employment. the third part of the bill (secs, 5 and 6) contains specific, even minute, details, such as the provision that stenographic services shall not exceed 25 cents a page, or the exact way in which expenses are to be prorated between the two Houses of Congress. The middle part, by contrast, is extremely vague. But this section contains the heart of the bill, and gives what information is given about the vast new powers that are granted by it. This mid-section requires that the President shall submit annually a new kind of budget, so-called, with two new estimates, that are really new legal concepts. The first estimate is the labor force. The second is the amount of spending that the Executive thinks it is necessary to provide in order to create employment for all that labor force. By subtracting from the second item the volume of spending by private and local agencies that is expected in the coming year, the President arrives at the critical item, the gap between the expected volume of spending and that which the President thinks is necessary to employ the given labor force. This gap is given the name of the “deficiency in the national budget." The bill imposes on the Federal Government the responsibility of providing the extra expenditure that will be needed to close the gap. It puts on the President the duty to carry out a program of spending sufficient to make up whatever part of the deficiency he thinks private spending will not fill. This program for mandatory Federal spending whenever there is a gap must be submitted to the Congress, and the Congress is obligated to report by a given date. but nothing is said of any further procedure, because none is necessary. The Executive has, at the present time, the powers necessary to procced with such spending under its war funds and war powers. If Congress accepts the proposed national budget the Executive can go ahead. If Congress does not accept it, the President would still be obliged under the bill to proceed with the spending up to the limit of all other existing powers. Passage of the present bill will put the program into effect without any further action by Congress.-Any limitations on the operation of the program ought to be included in the bill, rather than left to be inserted in the budget, because the duties imposed by the bill are mandatory. This bill therefore gives to the Executive broad general powers to make policy on technical matters in terms which impose no limits whatever on Executive discretion in carrying out the bill. This bill is thus the newest and the largest of the lump-sum or general appropriations which have been granting to the Executive since 1933 virtually unlimited power over how Federal money is to be spent, and what it is to be spent for, on the assumption that social-economic problems are too technical to be defined in advance. Actually there is no such difficulty in defining the objectives of social legislation, and no basis for the early hope that the Executive would have access to knowledge that Congress did not have. If the Congress is to regain control over the policies covered by this bill, and lay down the requirements of law according to which the money is to be spent, it must define the broad general phrases in which the power is delegated. Otherwise it will have to deal with all the problems (on a larger scale) which confronted it with WPA and other lumpsum appropriations. How is the budget deficit estimated? Each of the items making up the national production and employment budget, and determining the size of the deficit, is a composite term, covering most important questions of policy. These items are nowhere defined. The first and most important figure is the labor force. This determines the estimated total spending needed, and therefore the total of Federal spending. A great many people have pointed out the technical difficulties of preparing this estimate, as well as the other estimates, in the new budget. I will pass over the statistical difficulties with the statement that I subscribe to the criticisms fully, and go on to certain administrative and policy issues. There is nothing in the bill to limit or define who are to be included in the labor force, for each member of which the Federal Government is assuming the liability to provide a full-time job. The definition in section 2 (b) includes all Americans able to work and seeking work. It is nowhere restricted to those dependent on a wage job. The labor force includes many people who are self-employed and not wage earners, and also many wage earners who are not dependent on wages for their full annual income. If Congress intended this bill to be limited to those regularly dependent on wages, that limitation will have to be inserted, or a much larger obligation will be binding. In addition to including all workers, the bill says that these workers are all entitled to full-time employment. But a large number of independent workers, like farmers and workers in villages earn a full year's income without working a full year. They are working for themselves in their spare time. Under the bill as it now stands, the Government must count people who are able to work for part of the year, even if they have earned a full year's income and are engaged in productive work for themselves. The Government also guarantees to provide spare-time cash jobs for all these people if they want them, regardless of what their earnings may have been. If Congress intended that this bill should provide work for wage earners who spend their full time in wage work and cannot get a job, it will need to add that qualification. Otherwise the President must include in the count of the labor force four or five classes of workers who are not fully dependent on wages, or not even in the habit of supporting themselves. Farmers whose crops are harvested in less than a 52-week year, and other self-employed persons, villagers, and workers in the open country who are partly self-employed, workers in seasonal industries whose wages are adjusted to an annual basis, peripheral workers, especially women who are half in. half out of the labor market, and marginal workers who cannot do a year's full-time productive work. If all these people are included in the count of the labor force this figure would be higher by many millions than any of the estimates, and there would be a proportionate increase in the spending necessary to employ the full force, and likewise in the national deficit which determined the amount of mandatory spending by the Federal Government. This is the same problem which plagued Congress in trying to make fair appropriations for WPA.-The relief acts did not define what was relief and who was eligible for relief. The act was originally designed to give Federal aid to workers dependent on wage work, who could not get jobs because of the world depression. As the number of unemployed workers declined, however, the FERAWPA reached out into the twilight zone and drew in all kinds of people who worked full time and had low incomes by urban-industrial standards, or who regularly worked part time, or perhaps had never worked at all, like widows. All these people were added to unemployment relief designed for industrial workers. The Congress knew that the need for relief could not be mounting, but they not get full information on where the new recruits were coming from. In April 1933, at the depth of family suffering from the depression, there were 51⁄2 million families receiving Federal aid, and the number was gradually declining. In 1939, when Congress finally cut down the funds, there were 7,000,000 families getting Federal aid. Expenditures had risen from a third of a billion in 1933 to almost $3,000,000,000 in 1939. It was drought relief and CWA that showed how any administration that had extra money could keep expanding the relief force by taking in border-line cases. This method was continued for 6 years. By it the relief agencies found means to replace all those who left relief rolls during the thirties and an additional million and a half above the total of depression years. The same method will add many millions to the labor force. Well-meaning technicians can always find the needy cases. Farmers would be drawn into the wage-earning class.-The concept of sparetime jobs for farmers is not new. Under WPA many farmers received and were glad to get road work or drainage work after the crops were in. The farmers had more money, but the village workers who had depended on these jobs were in turn unemployed, and the WPA then had to provide jobs for them. Economists of the United States Department of Agriculture were drawing up plans for spare-time work for farmers when the defense program started. The National Resources Planning Board estimated that about over 400,000 farmers had been given wage work under the relief program. It adds: "In a large proportion of the cases it represents more money than he could ever realize from his farm operations. * * The program has encouraged the farmer who barely ekes out a living from the soil to desist from all farm operations * and rely entirely on work program earnings." Since the WPA was financed by deficit spending this meant that the farmers on WPA were relying on borrowing from their neighbors, not a long-term cure for the difficulties of marginal fariners. Independent proprietors in other fields, like recreation and seasonal hotel work, musicians, and others, would also be eligible. It is not possible to ignore their rights, because many such workers were drawn into governmental wage work as a result of the work programs of the thirties, and many of them did not find their way back to self-employment until the works program was withdrawn. Seasonal wage workers in industry also have a claim to a secondary job.— Nearly all industrial wage work must be irregular. Irregularities are due to the seasons, as in cotton ginning or grain milling. Or they are due to weather, as in building or coal mining or clothing manufacture. Or to changes in fashion as in millinery. Irregularities in manufacturing are reflected in irregularities in railroads, trucking, trade. The New York State Department of Labor has exact records of employment month by month back to 1913. There is hardly a single industry in which employment is not irregular because of natural conditions. When the Government promises full-time work it is promising that it can disregard the rhythm of agricultural and industrial production. Among irregular workers in industry and transportation there might be many millions who would prefer a regular job for 52 weeks in Government to the struggle for self-support even with the help of unemployment insurance. Under the present draft of the bill, the Government would be obliged to create jobs for all of them. Village workers who now employ themselves in their spare time would be drawn into wage work.—Many village workers all over the Nation work for themselves when their wage work is finished. In northern Maine or in the Adirondack region of New York workers in the villages take wage jobs during the tourist season. When the tourists leave they build their own homes, cultivate their potatoes, cut wood, kill deer, and can their meat supply. They repair their own houses, barns, and cars. Sometimes the young men come to the large cities for wage work. When they return they may work for wages, work for themselves, or start a small business. These people have never been dependent on an employer to organize their work for them. The people of the farms and villages have self-direction. They are the people from whom many of our independent producers have always been recruited. But under this act, if some of them decided that it was easier to take a year-round Government cash job, the Federal Government is obliged to provide it for them. All over the rural and village sections of this country, men who have always been half-enterprisers will be offered strong inducements to seek a job organized for them by the State. |