AMERICA'S CAPACITY TO PRODUCE

The war has demonstrated the almost unlimited extent of America's capacity to produce.

In spite of wartime regulations and restrictions, the actual volume of production has exceeded anything ever achieved or dreamed of in the past. American enterprise has demonstrated that, free from such hampering restrictions and regulations, it can provide a level of employment and a standard of living far above that set in any of the artificially created "goals" which have been established by planners, public and private.

By "high level of employment" we mean that level of job opportunity which will permit the individual to satisfy his wants and needs to the full extent of his willingness to work. It implies a freedom of exchange which will permit him to receive full return for the service he performs; and a freedom of choice and opportunities which will give him a reasonable chance to use his skills and abilities, his training, and his tastes to the maximum extent.

Such a high level of employment will stem from productivity. The wants and needs of the people cannot be satisfied by deferred production; and production cannot be permitted the lag while grandiose schemes are developing to "create" purchasing power.

Our program for maximum employment is aimed at the direct stimulation of a level of production and distribution so high that it will command and maintain the consistent purchasing power resulting from man's willingness, ability, and opportunity to work. The Legion's program goes direct to the heart of the sales, distribution, and production chain in preference to more roundabout and fanciful proposals for stimulating purchasing power. We reject pump priming, fiat money, and other fiscal devices for subsidizing consumption and bolstering pur-' chasing power. Unwise fiscal policies will deter, rather than encourage, the development of a high level of production.

We recognize the necessity of distributing opportunity fairly and widely. We support those principles of fair exchange which permit equal returns to those who pursue their opportunities with equal merit and ability. We reject any device or practice which tends to limit productivity, and we reject any thought of an economy of scarcity.

Only through free development of the productive capacity of America, through an adequate program of sales, service, and distribution, can we bring about that high level of employment which will afford real job choice and job opportunity. Our problem is to find the means of mobilizing this potential productive capacity in peacetime for our continuously increasing service to each other.

The American Legion program for maximum employment has pointed the way to achieve this. Since the publication of that program, the American Legion's national employment conference in Washington, D. C., April 5 and 6, 1945, and regional employment conferences sponsored by the Legion in every section of the country, have supplemented and implemented the program for maximum employment.

As a result of presentations made, and the discussions engaged in by labor, industry, Government, agriculture, educational leaders, and members of the Legion's employment committee at those conferences, the committee now makes certain recommendations which it believes the American Legion should embrace as principle fundamental to our concept of full employment and to a level and type of productivity which will satisfy the needs and wants of our people.

Some of these principles may readily be accepted as guides in determining our day-by-day course and as criteria in making our day-by-day decisions. Others call for careful research to discover the existing factors which interfere with their effective operation, and study to develop the procedures which will implement them. Some of these principles follow:

1. The prime objective in any occupation must be high levels of production and distribution within the framework of our free competitive private enterprise, with full and efficient utilization of raw materials and productive and distributive facilities.

2. The solution to the historical unbalance between agriculture and industry must be found by developing in industrial pursuits and urban areas the principle of full production and flexibility in price which result in full demand for, and consumption of, agriculture products. Only in that way may a proportionate relationship be maintained between agriculture and industrial prices. There is no prosperity in city or farm through limited production.

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(a) Production must be as sensitive as possible to the needs and the wants of the people, both urban and rural. To this end selling, advertising, and distribution practices must be improved to develop the widest possible markets, and to offer the greatest possible freedom of choice to producer and to consumer. Market research and kindred techniques must be expanded, both to stimulate public demand and purchasing power, and to reflect and interpret that demand and purchasing power to the producer, so that production and consumption may be brought into increasingly closer relationship. Prices and production must not be made to bear the price-depressing burden of accumulations and rates of production not related to expressed public wants and needs.

(b) The so-called service industries must be extended and expanded. The use of new modern equipment must not be retarded by lack of facilities for its maintenance and repair. The use of new goods must not be retarded by lack of adequate distributive facilities, and the use of perishables must not be retarded by restricted availability. Finance, transportation, and all other aspects of this field must be geared to the calculated needs and possibilities of production and consumption, from the grass roots up.

(c) The growth of monopolies and trade barriers must be resisted. Existing monopolies and trade barriers must be identified, reduced, or eliminated. Since distribution is the major problem in attaining full production and employment, distribution facilities must be unimpeded, and distribution costs must not be burdened with expenses which do not contribute proportionately to the distributive function. Free flow of foods and services, as well as free opportunity to develop production and distributive functions, are essential.

(d) Production and merchandising costs must be continually reduced as experience and technological progress permit greater efficiency, and these reductions must be passed along in the form of lower prices and higher wage levels as a stimulus to increasing utilization of the goods and services.

3. Each tax policy must be examined for its effect on productivity and employment. The "power to tax is the power to destroy," and each tax imposed must be designed to give the maximum encouragement to production and expansion of business. Taxes must be made to serve the people, not to restrict them; and the basic purpose and effect of all taxes must be kept under constant scrutiny.

(a) Risk capital must be encouraged. Going businesses must not be restricted, new enterprise must not be discouraged by the existing or anticipated tax burdens. Tax requirements must not force the transfer of business ownership from an independent status into consolidation or monopoly, or into the hands of new and untried management, nor must the tax burden be so great as to force business to abandon initiative and the development of new enterprises to governmental agencies.

(b) Tax policy should be studied and projected for longer periods into the future so that they can remain relatively stable and can be anticipated and planned for by business. Budget balancing, deficit financing, and debt retirement should be based on long-time trends, and should be considered in relation to their over-all effects on production, distribution, and employment over the long pull.

4. Employment policies, including wages and hours, should be designed to provide the maximum stability of employment and income from the worker, coupled with the highest degree of continuing productivity by the maximum number of people who can be continuously employed, provided only that monopolistic exclusions are not practiced.

(c) Prohibition of overtime pay during a peak period of seasonal activities would restrict an individual's productivity and income to the extent that slack weeks occurred in that season. Overtime penalties, therefore, should be imposed on the basis of the time worked by the individual in excess of the total normal time for the appropriate seasonal period.

(b) Wages and profits must assure an efficient distribution of labor and capital between city and country. Wages in general, and even within a given industry, should be flexible enough to maintain this balance. However, wage policies should be designated to yield the worker the highest share in the American way of life and prosperity not inconsistent with expanding production and a properly corresponding decrease in unit cost. To this end, employers should relate total wage disbursements to the earning power of business, and collective bargaining should have to do with labor's share in the earning power of the business rather than with cents per hour.

(c) Since stability of employment and income, for the worker, and continuity of production are desired, labor and management and Government should study and pursue the techniques and devices by which work can be average out over

reasonable periods by offsetting production peaks. Fluctuations and interruptions in production and employment should be avoided and work and income of employees should be made as nearly constant as possible, so that the worker, too, may more closely forecast his income and budget his expenditures. It must be remembered that wages and employment can be guaranteed only by the ability of management to produce, and the willingness of workers to work, and for that reason discussions of such things as a guaranteed annual wage should be approached with caution. Averaging out of production, constancy of production, wages and employment must be made economically profitable for employer and employee alike, while preserving full flexibility and freedom of choice for both.

5. Government should restrict itself to rendering those services for which adequate provision cannot be made by private initiative. The Federal Government should not attempt what the State can do: The State should not undertake what municipalities can do, and no governmental functions should invade the proper fields in which the individual or organized groups can operate effectively and efficiently.

(a) When a service must be rendered by a local, State, or Federal Government on behalf of an identifiable segment of business or industry, the cost of that service should be assessed against the beneficiaries whenever it is feasible to do so. (b) When a public responsibility can be assigned to an identifiable business or industrial individual or group, the cost resulting from the business failure to fulfill the responsibility should be assessed against the offenders rather than become a part of the general tax burden.

(c) The field of Government restrictions and standards imposed upon business must be approached with the utmost caution. Substitution of Government standards and grade labels for accepted American brand names would discourage production, discourt initiative and business expansion, restrict distribution, and ultimately stifle free competitive enterprise. Application of Government standards, as in the case of the pure food and drug acts, should be closely regulated by law, and a minimum of discretionary power placed in the hands of administrative agencies. Rights of individuals and organizations should be protected, and the means provided for them to enforce their rights and recover any losses from undue governmental regulation through the regular processes of judicial system. The American Legion believes in government by law not government by men.

It is the belief of the national employment committee that close adherence to these principles will bring a major contribution to the establishment of a maximum level of production and employment.

It is our belief, too, that implementing the Legion's program for maximum employment and the Legion's program for veteran's employment, they will go far to assure every veteran a full share in American prosperity, American economic opportunity, and American freedom.

NATIONAL COUNCIL OF JEWISH WOMEN, NEW YORK, N. Y.

FULL EMPLOYMENT BILL-TESTIMONY OF THE NATIONAL COUNCIL OF JEWISH WOMEN ON H. R. 2202 BEFORE THE HOUSE COMMITTEE ON EXPENDITURES IN EXECUTIVE DEPARTMENTS

The 65,000 members of the National Council of Jewish Women, believing that true peace can come only with prosperity, urge passage of the full-employment bill, H. R. 2202, as a step toward the establishment of that prosperity. We ask this committee to report the bill without limiting amendments.

The experience of the war years illustrated the soundness of governmental planning to accomplish victory. The training of our armies and our tremendous output of military supplies were the result of foresight and planning by government, industry, and labor. The members of the National Council of Jewish Women believe that they express an opinion held by all Americans when they state that the task of eliminating depressions and establishing prosperity should command that same wisdom and foresight.

We cannot afford to leave the accomplishment of full employment and high production to chance. The legislators who drafted H. R. 2202 recognized that. The provisions of this bill place responsibility for sustained full production and employment in the hands of the only agency that can accomplish it, the Federal Government.

This bill commits the Federal Government to a study of our economy and to the preparation of a coordinated program of activity by its various agencies designed to produce full employment. Adoption of that program would then depend upon Congress.

This bill, of itself, does not guarantee this country against future depressions. It does provide an essential tool for coping with our economic problems. H. R. 2202 instills confidence in working men by giving Government recognition of his right to a job. It gives Government the opportunity of developing long-range policies which will encourage economic expansion. It encourages private enterprise by its statement of government policy to provide full employment. In general, this bill proposes cooperative effort of all branches of our economy toward full production and employment.

For these reasons, the members of the National Council of Jewish Women endorse H. R. 2202, and urges its passage.

NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE

Hon. CARTER MANASCO,

Committee on Expenditures in the Executive Departments,

House of Representatives, Washington, D. C.

DEAR SIR: Pursuant to action of the membership of the District of Columbia branch of the National Association for the Advancement of Colored People, I am enclosing a copy of a resolution adopted at the October meeting of that organization.

This resolution endorses the Full Employment Act of 1945, S. 380.

We urge your support of this legislation and ask that you use the influence of your chairmanship of the House Committee on Expenditures in the Executive Departments to secure its enactment.

Very truly yours,

ALFRED E. SMITH, Secretary.

RESOLUTION ON FULL EMPLOYMENT ACT OF 1945

Whereas a high level of full-time employment at useful occupations will promote the general welfare of the Nation; and

Whereas gross unemployment will result in economic dislocation, hunger, suffering, and strife which are destructive to our internal peace and domestic tranquility: Therefore be it

Resolved, That the District of Columbia branch of the National Association for the Advancement of Colored People endorses S. 380, known as the Full Employment Act of 1945, and urges its immediate enactment by the Congress of the United States.

Adopted: District of Columbia branch, National Association for the Advancement of Colored People.

OCTOBER 22, 1945.

ALFRED E. SMITH, Secretary.

BRYN MAWR, PA., October 23, 1945.

In opposition to full-employment bill.

Hon. CARTER MANASCO,

Chairman, Committee on Executive Expenditures,

House Office Building, Washington, D. C.

DEAR SIR: The disturbing increase of unemployment cannot be attributed to any one maladjustment. There are many such maladjustments.

Those arising from acts of government (Federal, State, and local) are perhaps the most devastating in their effects, because they are beyond control of the people to correct and the most difficult for industry, trade, and labor to readjust to.

Government therefore cannot assure full employment unless it is itself prepared to readjust its takings from trade to within the ability of trade to spare without damage to employment. This means of course that any Federal act, to govern the degree of all employment in the land, must also recognize the fact that State and local takings are a large part of the total Government take in the United States and in large measure the cause of unemployment.

It is needless here to comment on the necessity for labor also to adjust itself at times to the money flow generated by trade, otherwise there cannot be full employment. Everyone employed at less wages often creates more buying power than partial employment at higher wages. A high price for an hour of labor is very apt to depreciate the purchasing power of the dollar for goods as it simultaneously increases the tax coefficient in the dollar. If the tax supported and tax exploiting part of the Nation could be persuaded or separately held down without a wage increase and the wage increase applied only to the trade pursuits, a wage increase would accrue somewhat to their benefit and mutual employment. Full employment in peacetime is therefore really a condition wherein the tax coefficient of the dollar will permit full employment for those not on the Government-supported list. The longer the Government list, the shorter the pay rolls in self-sustaining occupations, because they have less left after taxation for their own mutual buying power and employment, for the takings of taxes and bond issues are then greater per man employed.

If then, what is left after Government takings becomes inadequate to reach around all those seeking to be on someone's pay roll or on the pay roll of some industry, there is bound to be unemployment unless everyone in the self-sustaining occupations agrees to work for less or unless everyone in Government-supported occupations agrees to work for less so that more people can get on Governmentsupported pay rolls.

Industry cannot pay out more money than it has left after taxes, nor can government pay out more money than it gets from taxes and bond issues. This places the responsibility for unemployment on Government and labor. It is unfair to blame free enterprise.

The only way in which industry can get more money for pay rolls and employment is for Government (Federal, State, and local) to reduce its percentage of takings. The dollar then has more buying power for "goods" and less for governmentals. The "goods" percentage in the dollar doubles itself in every trade, otherwise Government could not be supported and business expand.

This is a fact that seems to be lost sight of in the prevailing discussion on full employment. The assumption so far has been that unemployment can be cured by public works, etc., when so-called private enterprise fails. Little consideration seems to be given to the fact that too many dollars diverted away from trade and into governmentals means a reduction in double duty trade dollars and therefore less money flow to tax for the support of one dollar pursuits.

Too much dependence cannot be placed on the labor of machinery alone to support an overgrown body of governmentals. As it is governmentals now amount to upward of $1,000 per annum per man employed in the self-sustaining pursuits, or, in round figures, to more than workers in theseperations get for producing the Nation's living. In 1791, when production was largely dependent on hand labor, $5 or $6 per man employed put an industry in the marginal class. Now that the use of power machinery and endless fuel makes possible the support of upward of half the population on tax-derived pay rolls, there is still a point beyond which taxes cannot be pushed without deterioration of employment. As long as taxation is levied solely for the most necessary and useful public services these services pay their way in usefulness and help to the self-sustaining occupations. Beyond that point tax-supported public works and services become less and less remunerative. The idea, therefore, of curing unemployment by adding to the tax burden on the self-supporting occupations to support more governmentals is not to cure unemployment but to make it worse, to make it chronic. It is the equivalent of forcing the people to buy less bread and eat more government, with less employment all around.

Now, there may be those in this Nation who can devise ways and means to get around a situation of this kind by monetary or other manipulation, but, generally speaking, there is nothing quite so satisfactory to the people at large as full employment based on a percentage in the dollar for purchase of goods which overbalances the percentage for purchase of governmentals. As matters stand now it is the other way around.

If, however, it is not in the power of government or the will of the electorate to correct this situation, it is to be feared that a greater or less degree of unemployment is inevitable.

In computing the tax burden it seems to be generally assumed that, if something can be done to relieve employers of some of the taxes on business, business will spring ahead. To some extent this is true. Some businesses that are now marginal or submarginal would be able to go ahead within the limits of the markets set by unrepealed taxation. But in a rigidly tax-restricted economy such