bility, is similar to a convention of physicians voting perpetual perfect health for everybody. But, medicine did reduce disease and mortality rates greatly in the past century. How did the doctors attack their problem? They conducted research in each particular disease-typhoid, smallpox, etc. As a result the scientists devised methods to prevent a particular disease. Typhus, cholera, and smallpox, the scourges of a century ago, have been effectively prevented. Scientists also found means of curing particular diseases like pneumonia and tuberculosis. Similarly, our Congress in Washington must study individual unemployment problems. Is unemployment in the building industry due to the gap between the wages of masons and of tenants? Can a $20-a-day mason be kept employed building homes for clerks who earn $25 a week? Is the high cost of building affected by uneconomic labor practices and rackets such as Attorney General Thurman Arnold pointed out in his congressional testimony before the Truman committee? Are workers in the electrical-equipment industry idle because the SEC is breaking up the utilities instead of consolidating them into regional systems as the law requires and as the British did with their railways? Are railroad workers idle because the Government is subsidizing the competitors of the railroads? There is no panacea for general unemployment. Each particular industry must be studied. When Louis D. Brandeis was asked "What is your social philosophy?" he answered, "I have no general philosophy. All my life I have thought only in connection with the facts that come before me."

The United States Government has few jobs and it can create relatively few. The Soviet Government, which is in business, has many jobs and can create others. But it has a very low wage scale and low standard of living, lower than our relief clients. It is so low that in the Potsdam Declaration, the Big Three agreed to keep Germany's standard of living below the average of European countries, excluding Soviet Russia, which was presumably too low even for a defeated enemy.

Whoever produces goods, whether the private businessman or the capitalist state, can give jobs. In the United States, business is still conducted by private enterprise. All the Government really can do is to see that suffering due to widespread unemployment is alleviated. The Government can increase employment by encouraging the job givers. Encourage the entrepreneur, or, at least, cease penalizing him unduly by taxes on production and by wasteful labor practices, which raise costs.

The question of full employment can be made clear through the income account of a business. Profit is what makes the economic machine go. Profits create employment. Periods of maximum employment are periods of maximum profits. Periods of maximum unemployment are periods of maximum losses. If the costs exceed the selling price, a business loses money. Costs must be reduced. Then labor is discharged temporarily. If not, the employer becomes bankrupt and the jobs disappear permanently.

In the order of priority of claim, wages come first, and dividends, if any, come last. To employ workers involves risks. The volume of employment depends on the risks, economic and political. But when our Government employs, it takes no risks. It "passes the buck" to business, which provides the taxes. But when the Soviet Government employs workers, it does take a risk. It cannot transfer the responsibility. There is no private business which provides income for taxes. Therefore in Soviet Russia wages are fixed to leave a profit. Therefore there is full employment.

The Soviet Government can take responsibility for full employment because it has power over wage rates. Strikes are not allowed. No union dare fight the Soviet State. The American employer has no such power over wage rates. American unions, however, undertake to manage, but refuse responsibility for business losses and resulting unemployment. They look to Government to bail them out. The Government then assumes the responsibility for union policy, We talk about the profit motive and then permit or foster policies which prevent profits and create unemployment.

It is a fallacy to say that the Government can employ workers if industry won't. If there is a profit, industry will operate. But if there is a loss, even a Government cannot operate permanently. Permanent subsidies for unprofitable public business is impossible. The full employment bill must be checked against a businessman's statement of income, or profit and loss.

Public works, the reliance of bill S. 380, are not important factors in employment. Look at the record from January 1934 to January 1939. Our unemployment figures were about the same at both dates. But our debt increased about

$13,000,000,000. When a national income falls by $20,000,000,000 a public-works program is insignificant.

What we need are flexible wages. When selling prices decline, costs must decline. Only under flexible wages is constant high employment possible. Dividends average about 6 percent of the national income and wages about 70 percent. Even if the stockholders were wiped out, and the workers took over the business, costs could not exceed selling price. Wages would then have a ceiling, determined by selling prices. Today there seems to be no ceiling.

In a simple primitive economy the wages of the artisan depends upon the selling price of his product. That is clear. In our complex modern economy of mass production by coordinated specialists, wages must also be determined by selling prices. That is not so clear. It is the task of economists to enlighten the public. We should not talk in generalities. We must study individual causes of unemployment. We must change our attitude to the railroads and the utilities. The British in 1921 consolidated their 126 railroads into 4 systems. None went bankrupt ever since. Orders for locomotives and cars were fairly steady; employment was steady. We do not have a single Nation-wide telephone service. But we did not permit our railroads to consolidate. Almost 40 percent went bankrupt in the last 10 years the highest in history. Their orders for equipment fluctuated violently; then workers in the railroad-equipment industry lost their jobs.

We are breaking up the utility-holding companies. In 2 years, 1934-35, orders for electric-utility equipment declined 80 percent below the average of 1919 to 1933. We should not disintegrate but consolidate the utilities as the law demands, We could thus stimulate expansion and employment.

If selling prices remain flexible, as our antitrust laws contemplate, wages must remain flexible. Rigid wages would require rigid selling prices. Labor monopoly requires industrial monopoly. High employment requires balance between wages and selling prices. Not legislation, but bookkeeping tests, will give us full employment.

The full employment bill, S. 380, has embarked on a huge undertaking in Government control of business. We might well recall a dissenting opinion, by Justice Louis D. Brandeis, on the right of the State of Oklahoma to control the manufacture and sale of ice (1932): "We have been none too successful in the modest essays in economic control already entered upon. The new proposal involves a vast extension of the area of control. Merely to acquire the knowledge essential as a basis for the exercise of this multitude of judgments would be a formidable task."

This wise man, in a letter to Robert W. Bruere in 1922, wrote: "And do not pin too much faith on legislation. Remember that progress is necessarily slow; that remedies are necessarily tentative; that because of varying conditions there must be much and constant inquiry into facts * and much experimenta

tion."

By all means, let us keep in mind the high goal of full employment. But let us concentrate more on the method of attaining this goal. There is no immediate danger. We need not worry about long-term unemployment immediately, or even for several years, until the unsatisfied demands of consumers are met. Then, long-term unemployment may become a pressing problem.

Therefore, let the Congress appoint a committee of experts to study the causes and cure of unemployment, not merely in its broad aspects but also industry by industry. Let this committee of experts point out what evil practices, by business, by Government, and by labor, prevent employment and create unemployment. Here is a task for practical social idealists. The passage of the bill as it stands can only result in failure to realize the goal and thus discredit the lofty aim with which there is universal agreement—“useful, remunerative, regular, and full-time employment."

CARTER MANASCO,

[Telegram]

NEW YORK, N. Y., September 27, 1945.

Chairman, House Committee on Expenditures in Executive Departments, House of Representatives, House Office Building, Washington, D. C.:

I regret that I will not be able to accept your kind invitation to testify before your committee on the full-employment bill, but I do wish to avow my complete support for the measure. Not merely because there can be no fair employment without full employment, nor because fascism festers only among the insecure,

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the jobless, the frustrated, but because America needs a new freedom, the freedom to work without which all other freedoms languish. All liberty-loving Jews in America endorse this measure. Will you be good enough to have this telegram made a part of the transcript of your hearing?

STEPHEN S. WISE, President.

STATEMENT OF JULIUS A. THOMAS, REPRESENTING THE NATIONAL URBAN LEAGUE

On August 27, 1945, the National Urban League presented to President Harry S. Truman a full report on the probable effects of reconversion on the status of the Nation's Negro population. The report, titled "Racial Aspects of Reconversion," includes a section dealing with the employment outlook for Negro wage earners in which we have registered our unreserved support of legislation designed to maintain full employment. With your permission I should like to make that report a part of my statement to this committee. I should like to include, also, a copy of an article titled, "How Reconversion Will Affect Negro Workers." This article was published last July in the magazine America, and was written by the director of industrial relations of the National Urban League. The chairman has already stated that the point of view which I am presenting to this committee represents the position of the National Urban League, an interracial social-work agency concerned primarily with the economic and social problems of the Nation's Negro population. I should like to add the following clarifying facts: There are 51 local organizations affiliated with the National Urban League, all of which are extending the work and the philosophy of the league to the level of community living. These organizations are today facing the biggest job they have had to do in the 35 years of the league's existence. What I shall say, therefore, must not be confined to the statistical material to be found in the reports to which I have already referred.

In almost every important industrial center in the Nation thousands of Negro workers are being laid off daily because of cut-backs in the production of war materials. In some cities as many as 50,000 Negroes will be affected by the sudden change in our economy. The problem which we face as an organization is that of advising and counseling these displaced workers. While they are reported statistically as so many workers in the labor pool, in our thinking they are people who today face the possibility of prolonged unemployment, unless our economy can be made to work more efficiently.

There will be many references to the social cost of this involuntary termination of earning power in the course of these hearings. I shall not take the time to do more than refer to that phase of the problem with which we are working daily. I think it worth noting that, by and large, the Negroes have always borne a disproportionate share of unemployment and have always paid a greater share of the costs in terms of higher death rates, substandard living conditions, higher rates of juvenile and adult delinquency, and many other social ills. I cannot believe, and I do not think you believe that Negroes, prefer to be pointed to as the Nation's problems. The Negro worker's wartime experiences went a long way in stimulating self-respect and self-reliance among them. Among other things they earned enough to provide some of the essential comforts for decent family living. They were engaged in productive jobs in which they took great pride. They came to know the meaning of such terms as selfsufficiency and job security-if only for a short while. The Negro worker looks to the future with serious misgivings.

H's experience has taught him that when jobs are scarce, he can hardly expect to get one. On the other hand, when there is work for all hands, the Negro knows he will find a job, even though it may not be the job for which he is best prepared and qualified. I realize, Mr. Chairman, that what I have said applies to many thousands of workers of various races, colors, and creeds. I do not intend to discount their just concern for the state of our postwar economy. If I seem to overemphasize the probable job problems of Negro workers, it is because the organization by which I have been employed for 22 years has had a continuing interest in the peculiar problems of Negro workers.

I cannot conclude my remarks here without some reference to the 1,000,000 Negroes who have served in our armed forces. In a few months they will be returning to civilian life and to jobs if there are any to be had. In the past 2 years I and other representatives of the Urban League have visited training camps and other training facilities for members of the armed forces. We have observed the results of the Army's training program as we watched hundreds of Negro youths handling all kinds of machines and technical implements of war.

These men will want to use these new skills when they return to civilian life. They will not be satisfied with the typical traditional porter and janitor job. Every day my mail includes letters from Negro soldiers in the South Pacific as well as from Army bases here at home inquiring about job possibilities in this or that industrial field. The occupational readjustment of these men will be a problem which, up to now, has not been officially recognized by the agencies responsible for directing veterans into productive employment. But it must be dealt with, and the best assurance that it will be adequately treated is the enactment of legislation to stabilize our peacetime economy.

Finally, Mr. Chairman, I do not see in the proposed legislation any great departure from the procedure which we have always adopted with respect to employment opportunities for American workers. To promote the general welfare an accepted responsibility of government, it seems to me-embraces the creation of an atmosphere favorable to the employment of our citizenry and in productive work. The only point of departure, as I see it, may be in the fact that we now propose to examine our economic machinery at regular intervals before it breaks down rather than after it breaks down. And having discovered the probable points of vulnerability, we propose to apply the remedies that will prevent a complete break-down. Perhaps this may be considered oversimplification of the problem, but I am convinced that it makes sense.

I am deeply grateful, Mr. Chairman, on behalf of the National Urban League, for the privilege of making this statement, and I urge your continued interest and action until this important legislation is enacted by the duly elected representatives of the people of our country.

EMPLOYMENT

The Negro worker seeks security.-The No. 1 domestic problem of the Nation during the years of transition and peace is full employment. The chief concern of 13,000,000 Negroes is the assurance that postwar America will find a way to use their skills properly. They remember all too well the long depression years when they constituted a disproportionate share of the Nation's relief load. Negroes look to the present administration to eliminate this condition.

Employment of Negroes during the war-Just as the Nation before VE-day reached an all-time high in the number of gainfully employed workers, Negro workers have similarly enjoyed better work opportunities recently than at any time in their employment history. This favorable situation has been the direct result of two forces: (1) The demand for labor in essential industry; and (2) the operation of manpower controls, particularly antidiscrimination measures. The Bureau of Labor Statistics reports that slightly more than a million Negro workers were added to the civilian labor force between April 1940 and November 1944, increasing the number of employed Negro men and women from 4.4 to 5.3 millions. This increase in job opportunities was characterized by a striking development which will affect postwar job prospects for these workers. Whereas only a small proportion of Negro workers were formerly employed in jobs other than unskilled labor, it is now estimated that 30 percent of these workers are engaged in semiskilled and skilled operations in a wide range of industrial processes. Significant also, is the fact that the number of Negroes on the Federal pay roll has increased from a peacetime total of approximately 69,000 to a total of 273,000 at the end of the war. Along with this increase in number of jobs, there has been a corresponding increase in the types of jobs available to them. In 1938, 90 percent of Negro workers in Federal service in Washington were classified as custodial workers, and 10 percent as clerical, technical, and administrative workers. Today, 40 percent of them are custodial, and 60 percent are in the higher categories.

Concentration in war production. According to the War Manpower Commission, 726,000 Negroes were employed in July 1944, in all industries engaged in the manufacture of materials of war. These workers were distributed in the following major industries:

The disproportionate concentration of Negroes in those industries which will suffer the greatest cut-backs after the war is one of the most unfavorable factors affecting their employment prospects.

Reconversion and Negro workers.-The majority of Negroes, therefore, now employed in essential industries will be forced to look for work in new fields. It should be noted also, that they have found employment largely in the congested industrial centers where competition for peacetime employment will be most acute. For this reason, a return to prewar discriminatory hiring practices will lessen the reemployment chances of displaced Negro workers. Moreover, Negro workers in most cases were the last to be hired; hence, the lack of union seniority will further retard their reemployment. The effects of cut-backs have already been felt in several shipbuilding and aircraft production centers where Negroes have been among the first workers to be released. It was estimated that some 400,000 Negro war workers would lose jobs between VE-day and VJ-day. Over-all displacement of Negro war workers because of cut-backs as well as the loss of war jobs to returning veterans whom they have replaced was expected to increase this total.

Postwar job prospects, full employment and fair employment practices.-The realization of our peacetime goal of full employment becomes extremely important to Negro workers. Experience has shown that because of their marginal status in industrial and commercial employment, Negroes suffer a disproportionate share of unemployment and underemployment during any period of economic regression. But it must not be assumed that their job problems will disappear even if we achieve a relatively high level of peacetime employment. There is always the possibility that some employers, relieved of the responsibility for continuing fair employment practices, will revert to discrimination against Negro job seekers. There is the possibility, too, that labor unions, acting under pressures, may attempt to protect jobs for their white members at the expense of Negro workers. These two possibilities lead to the conviction that special efforts will be required to continue the desirable wartime trend of distributing jobs entirely on the basis of a worker's skill and capacity—a practice which previously has not been followed where Negro workers are concerned. The achievement of full employment and fair employment practices instituted by legislation or administrative regulation are both necessary to the maintenance of an improved economic status among Negroes. Thus, two bills now before the attention of the Congress take an additional importance and demand a full hearing and early action by elected representatives of the people. The first is the Full Employment Act of 1945, S. 380, to provide for "full employment of American labor." The second is the Dawson-Scanlon bill to provide for permanent peacetime machinery to insure fair employment practice.

Management's attitude. It is significant to note that important sections of management, as revealed in a study of 300 war plants by the National Urban League, have reported favorably on the performance of Negro workers, notwithstanding the fact that the vast majority of them were newcomers to industry and had to be trained on the job. This revelation tends to give some assurance that progressive management will look with favor upon granting Negro workers a fair chance for peacetime employment provided, of course, our economy maintains a high level of production and consumption. It should be added, however, that a number of these industrialists have expressed the conviction that some form of permanent legislation would be needed to eliminate racial discrimination in employment.

Attitude of labor.-A heartening development during the war period has been the relaxation of exclusionist policies in the labor movement. Such information as is available indicates that approximately 1,500,000 Negro workers are currently members of labor unions connected with the CIO, A. F. of L., or independent unions. Notable exceptions in this regard are the railway brotherhoods, against whom action is now pending as a result of their refusal to comply with the FEPC directive. Some unions have partially relaxed their prewar policies, such as permitting the establishment of auxiliaries for Negroes only, or issuing special work permits for them. Obviously, these changes in policy do not give Negro workers a chance to work freely at the job of their choice, nor does it permit them to enjoy the protection of full union membership and participation. Certain local affiliates of international unions have failed to bring their practices in line with the policies of their respective internationals, and they are deliberately restricting freedom of choice in employment opportunities for Negro workers. Unless there is a more vigorous effort to secure fair labor practices in all labor unions, Negro workers will face an added barrier to equality of job opportunity.