Mr. WALLACE. Who said that?

Mr. JUDD. Chiang Kai-shek.

Mr. HOFFMAN. Do you, wholeheartedly and without reservation, endorse this bill that has in it the language on page 2, line 3:

All Americans able to work and seeking work have the right to useful, remunerative, regular employment?

Mr. WALLACE. Yes; I endorse the bill. You may remember, Mr. Congressman, that in response to the questions of Congressman Church, I indicated that it might perhaps be desirable to put in certain exceptions with regard to regular full-time employment.

Mr. HOFFMAN. I am not quarreling with the definition of the words "useful, remunerative, regular or full time," I am just drawing attention to the "All Americans have a right to employment." That is all. Mr. WALLACE. Of course, the

Mr. HOFFMAN. "All Americans have a right to employment." Do you endorse that?

Mr. WALLACE. I think they do.

Mr. HOFFMAN. Then that wouldn't exclude any man from a Federal job created under this, because he didn't belong to a union, would it? I just want to know whether or not in your opinion it is a bill to relieve all who are unemployed, or just the union unemployed.

Mr. WALLACE. I have been over this a great many times, Mr. Congressman. The point which troubles you I don't believe belongs in this bill. I don't think it should be considered in this particular bill.

Mr. HOFFMAN. Then, Mr. Secretary, you do not approve of that language, "All Americans have a right to an opportunity for employment," do you?

Mr. WALLACE. Yes; I do.

Mr. HOFFMAN. Then you wouldn't deprive a nonunion man of a job created by the Federal Government.

Mr. WALLACE. No; I wouldn't want to see a nonunion man deprived of a job.

Mr. HOFFMAN. And you think that no construction could be placed on this bill that would deprive a nonunion man of participation in a Federal-works program?

Mr. WALLACE. I don't think that belongs

Mr. HOFFMAN. Why don't you answer that right off? You do or you don't. You come here and endorse a bill which, on its face, says that all Americans have the right to jobs. Now, if you don't believe it, that is all right with me.

Mr. WALLACE. I do believe it.

Mr. HOFFMAN. All right, then. Then you don't believe that a man should be deprived of a job created by the Federal Government, and with tax money, just because he don't belong to a union; is that right? Mr. WALLACE. I think

Mr. HOFFMAN. I want to say that for a man with your experience, who has been so successful in the corn-breeding business, and in the Agricultural Department, and who has pleased so many farmers, I can't see why you should have so much difficulty with that little, simple question.

Mr. WALLACE. Your question is very complex.

Mr. HOFFMAN. Complex as to whether an American should have

the right to an opportunity for employment? I imagine there would be about 30 words in that question.

Mr. WALLACE. I feel, Mr. Congressman, that the amendment which you evidently will propose has no place in this bill.

Mr. HOFFMAN. That is the LaFollette amendment. You are familiar with the practices of some employers who, prior to 1935, required employees, if they belonged to unions, to resign and all applicants for jobs to sign a contract that they would not become a member of a union. The name they gave it was the "yellow dog" contract. Congress, in 1935, you recall, outlawed it. You remember that? Mr. WALLACE. Yes.

Mr. HOFFMAN. Now the unions, in practice, have established another contract or situation, wherein, in order to work in many industries, a man must sign on the dotted line and be a union man.

Mr. WALLACE. This bill does not

Mr. HOFFMAN. Never mind this bill. If this is a bill for employment. at all, I want to take care of the nonunion man as well as the union man. Don't you?

Mr. WALLACE. Yes; I definitely do.

Mr. HOFFMAN. Then why don't you say that, as you understand this bill, it doesn't exclude from a Federal job, under any collective-bargaining contract, the nonunion man? If it was wicked, and I think it was, for the employer to make and enforce that "yellow dog" contract, isn't it just as reprehensible for any group to say to a man over here in the corner, as they sometimes do, "Unless you join the union, you can't get a job?"

Mr. WALLACE. It seems to me an important thing not to run afoul of other Federal legislation in the amendment you propose.

Mr. HOFFMAN. I don't propose any amendment.

Mr. WALLACE. It seems to me you have some amendment in mind to handle the situation which is disturbing you.

Mr. HOFFMAN. No; I haven't a single amendment in mind.

Mr. WALLACE. I might add, you can work out an amendment to handle the situation; but, as I view it, this bill does not undertake to go into the question of whether a man is union or nonunion.

Mr. HOFFMAN. No; this bill is so much legislation that just attempts to avoid the issue, rather than attempt to meet it head-on and declare, as we should have in the Wagner Act, that a man should have the right to join a union and he should have the right not to join.

You will agree with this-that the higher-paid jobs are in the industrial area.

Mr. WALLACE. Definitely.

Mr. HOFFMAN. Beyond question; and they are practically all unionized, those industries, are they not?

Mr. WALLACE. Yes.

Mr. HOFFMAN. So that the higher-type, better-paid jobs now are in the hands of the unions.

Mr. WALLACE. That is true.

Mr. HOFFMAN. So that we are trying to take care of the unfortunate fellow who maybe has a low-priced job, or who can't find work; and yet, under your theory of it, we shouldn't consider at all giving him a job.

Mr. WALLACE. I don't agree with you that this bill as drawn discriminates in any way against the nonunion man.

Mr. HOFFMAN. On its face, it doesn't. On its face, it says "all"; but you know very well when you turn over to that fair standards and the NLRB, and all that, and go into these industrial jobs, that, as a matter of practice, that man either belongs to a union and keeps his dues paid up or he doesn't hold his job.

Mr. WALLACE. That doesn't flow from this bill.

Mr. HOFFMAN. It flows from the failure in this bill and the failure in other legislation to prevent the creation of a monopoly of labor; and if I was an employer, and without heart and unscrupulous, I would be glad to have a union have a corrupt boss so that he would sell me his slave labor right across the table when I slipped him something. That is my point. That is what might happen. It may be what has happened on some cases. That is all.

The CHAIRMAN. Mr. Secretary, I know you have had full employment today, and we will take a recess. Thank you very much.

Mr. WALLACE. I appreciate the splendid hearing all of you have given us.

(Whereupon, at 6:20 p. m., the committee recessed until 10 a. m. tomorrow, Wednesday, October 31, 1945.)

FULL EMPLOYMENT ACT OF 1945

WEDNESDAY, OCTOBER 31, 1945

HOUSE OF REPRESENTATIVES,

COMMITTEE ON EXPENDITURES IN THE EXECUTIVE DEPARTMENTS,

Washington, D. C.

The committee met at 10 a. m., the Hon. Carter Manasco (chairman) presiding.

The CHAIRMAN. The committee will come to order. We have this morning the Honorable Fred Vinson, Secretary of the Treasury. Mr. Vinson you may proceed.

Secretary VINSON. Thank you, Mr. Chairman.

STATEMENT OF HON. FRED VINSON, SECRETARY OF THE
TREASURY

The war has taught us many things about our economy.

It showed that when the people of the United States set their minds on doing a big job, that job will be done, and the whole resources of this great country will be mobilized for its accomplishment. Winning the war was, abviously, all-important. So we did our best to call into service every human and material resource which the country had at its command and put it to use either directly for the war effort or for the maintenance of the civilian economy.

The war elso revealed the tremendous productivity inherent in our economy. Our gross national product increased from $89,000,000,000 in 1939 to $199,000,000,000 in 1944. Some of this, of course, represented an increase in prices; but the product of the country, expressed in real terms, increased by about 75 percent.

We learned other important facts about our economy, too, in winning the war. We discovered that as a consequence of our all-out effort, unemployment disappeared. There were more employment opportunities than people seeking work. The job sought the man, - rather than the man the job.

We discovered that as a result of the effective use of our resources during the wartime period, the real standard of living of the civilian population was higher in 1944 than it had been before the war, despite the fact that nearly one-half of our production was for war

purposes.

The No. 1 problem which confronts the people of the United States here at home right now is how to apply the economic lessons of war to the peace. Now, at first glance, it mighht appear that there would be a hopeless disagreement in this country on how this can be done. But a more careful study will convince thoughtful men that there are important fundamentals upon which all can agree.

In fact, there are two fundamentals upon which the American people already are agreed. The first is that our economic problems must be solved within our system of free enterprise. The second is that the most important of these problems is to maintain full employment.

Mass unemployment is the source of most of our social and economic evils; it is the greatest menace to economic security in this country. We cannot periodically condemn 10,000,000 unemployed to bear this burden. We cannot declare these men and women industrial surplus and dispose of them in that way. That is not the American way of doing things.

I do not subscribe to the pessimistic view that unemploment is inevitable and that any effort to prevent it is a threat to free enterprise. Our people want to keep the economic system under which this country achieved leadership. They know it offers the best hope of continued economic progress and higher standards of living. They will never abandon this system so long as they can cherish this hope. The only threat to free enterprise in this country can come from mass unemployment. Our task is to remove this threat by meeting the problem.

And let me make this clear: Unemployment is not the fault of business. Businessmen do not want to stop production or to lay off men. They know that profits come from production. So long as they can find markets, they are prepared to employ labor and to produce goods. It is only when the demand falls off, when goods cannot be sold, that they close down or reduce their force. Give American business the markets, the demands for the output, and we will witness a new miracle of production that will surpass anything we have seen before. Unemployment is not the fault of business. On the contrary, business, like labor, is the victim of depression.

It is equally clear that unemployment is not the responsibility of business. When demand falls off, businessmen have no alternative; they must cut production. If they persist in producing goods for which there are no markets, they will incur losses that may force bankruptcy. In general, when businessmen produce efficiently, when they sell at fair prices, and when they pay good wages, they have done all they can do, and they are entitled to profits from production. Business cannot assume the responsibility on unemployment.

Now the fact is that somewhere there must be a responsibility on unemployment. There can be no vacuum, no void of responsibility, on the most important domestic problem confronting the American people. When we face the issue we must admit that all of us have a responsibility to see that our economic system works, to see that there are opportunities for jobs for men and women willing and able to work. This is a responsibility of all the people, and we must look to the Government, acting for all the people, to meet this responsibility.

There is nothing revolutionary in recognizing this responsibility. In every deep depression the Government has found it necessary to deal will unempolyment. In 1921, during the crisis of that year, President Harding called the Conference on Unemployment which met under the chairmanship of Herbert Hoover. In 1931, in the midst of an even greater crisis, Congress passed the Employment