Senator KING. The Government policy, as I recall (it has been a year or two since we had the matter before the Finance Committee) our plan was hostile to theirs, and they felt they could not assume both responsibilities.

Dr. LUBIN. They could continue to assume part of it. Some firms did.

COST OF DEPRESSION TO GOVERNMENT

Dr. LUBIN. The question I should like to turn to now is: What has the failure of our system to work efficiently cost our Government? (The chart referred to was marked "Exhibit No. 49" and appears on this page. The statistical data on which this chart is based are included in the appendix on p. 224.)

Dr. LUBIN. This chart shows the number of households and persons who are receiving aid under the works program and emergency relief. You will note it is estimated that approximately 6,990,000 households are at the present time affected by either the works program, emergency program, or direct relief. That many families are getting some income in one or the other of these three categories at the present time. In terms of the number of persons affected, it is estimated that approximately 22,230,000 people are affected.

The CHAIRMAN. What was that figure again?

Dr. LUBIN. Twenty-two million two hundred and thirty thousand. Senator KING. That includes those who would get social relief.

Dr. LUBIN. These do not include widows, mothers, and unemployment insurance recipients. Public assistance under the Social Security Act does come into this picture.

The CHAIRMAN. May I interrupt? On this side of the chart are the figures, millions of households, but that applies only to the lower line. Is that correct?

Dr. LUBIN. Exactly.

The CHAIRMAN. And the figures on the other side refer to millions of persons, and they apply to the upper line?

Dr. LUBIN. Yes.

The CHAIRMAN. So that you are telling us that while there are about six and a half million of households directly affected by some phase of the emergency program, there are in excess of 22,000,000 persons benefiting directly by that program.

Dr. LUBIN. That is right.

The CHAIRMAN. May I ask what relation does that 22,000,000 of persons affected there have to the number of unemployed? When we speak of the number of unemployed, we are speaking of wage earners, chiefly.

Dr. LUBIN. That are looking for work.

The CHAIRMAN. Available for work, and when we are speaking of the number of persons who are directly affected by relief to households, we are referring not alone to the wage earners, but all the members of their families.

Dr. LUBIN. Yes, everybody in the family, including the baby.

The CHAIRMAN. Of course, you are not referring to pensions which are paid to ex-soldiers.

Dr. LUBIN. No.

Senator KING. Going back for many, many years, and for other forms of relief that are given that do not fall under the term of "emergency relief?"

Dr. LUBIN. It doesn't include any of the private relief.

The estimated cost of these programs is $5,638,000,000 for 1938. Incidentally, this figure includes all State, Federal, and local money that is used either for direct assistance, which is the upper line, or for the works program, or for public works which includes not only the P. W. A. but also such public work as is undertaken directly by the Federal Government.

The significant thing in this chart is that we reached our peak of public works in 1936. It came down in 1937 and it just about held its own in 1938. On the other hand, in terms of the work programs, we were spending in 1936 about two and two-thirds billion dollars, and in 1938 we were spending just about the same, whereas in 1937 it was somewhat less.

(The chart referred to was marked "Exhibit No. 50" and appears on p. 69. The statistical data on which this chart is based are included in the appendix on p. 225.)

Dr. LUBIN. The way that money has been spent for the most part is shown by this chart.

(The chart referred to was marked "Exhibit No. 51" and appears on p. 70. The statistical data on which this chart is based are included in the appendix on p. 225.)

Dr. LUBIN. This chart1 includes employment from, not only expenditures on emergency relief, P. W. A., W. P. A., but also all Federal expenditures such as the Army and Navy, civil employes, construction from regular Federal funds, C. W. A., C. C. C., and emergency relief. Back in 1934 we had the C. W. A. Its place was later taken in part by work relief. That was later changed into W. P. A. and other works programs. A very marked decline took place from the early part of 1936 to the fall of 1937 and in 1938 it increased again. The total number of persons estimated to be affected today is 4,946,000, which includes, of course, all the activities financed in whole or in part by the Federal government.

Senator KING. I understood you to say that the figures which you have given include appropriations or allotments made by the States and their political subdivisions.

Dr. LUBIN. I did on the other chart.2

Senator KING. Would that include the amount which has been appropriated, for instance, by New York City? They have a special tax there, as I recall, and a considerable sum which is used to supplement the appropriations of the State and made by the Federal Gov

ernment.

Referring to exhibit No. 51, p. 70.

See exhibit No. 50, above.

Senator KING. So you have communicated directly or indirectly with the municipalities, counties and States and obtained from them all the expenditures they have made for relief purposes?

Dr. LUBIN. These are Works Progress Administration figures. The CHAIRMAN. Dr. Lubin, is there an apparent discrepancy between the figures indicated on the lower line of the chart entitled

"Estimated Net Total Number of Households and Persons, etc.," 1 and that indicated in the chart entitled "Persons Employed by the Federal Government and on Works Programs" 2 for the year 1938? Dr. LUBIN. Yes; there is a difference between those two. I think there are various reasons for it. This figure here, 4,946,000, gives the number of people employed in all activities, including military and the civil. They show the actual number of individuals. On the other hand, it is possible for one individual to help two or three households-he helps his father and mother as well as his wife and children. Moreover, one chart does not include direct relief, cash payments made by cities, States, and so forth, and the other does. The CHAIRMAN. This includes payments made by cities and States and direct cash relief by all agencies, and this covers actual employment financed in whole or in part by the Federal Government." Dr. LUBIN. Yes.

Senator KING. Would these figures include the amount which the chest obtains?

Dr. LUBIN. No.

Senator KING. For instance, this city is seeking to raise over $2,000,000 for relief. Your figures would not include what it has raised.

Dr. LUBIN. No.

The CHAIRMAN. Dr. Lubin, might I ask you to have one of your assistants bring forward the chart that you used this morning on monthly income payments?

Representative SUMNERS. I would like to ask a question before we leave this chart. Dr. Lubin, you put a little explanatory statement there, 1934. Take these two charts together." In 1934 there were about 27,000,000 people being benefited, and moving over to this other line, at less than $4,000,000,000, whereas in 1938 there are about 22,000,000 persons and the expense is almost $6,000,000,000. Would you put some explanation in?

Dr. LUBIN. According to the Works Progress Administration there are a number of reasons for the increase after 1934 in expenditure for relief and Work programs per person aided.

For one thing, the comparison should be with the average number aided throughout 1934 rather than the peak figure of 27,000,000 which you have cited. After the Civil Works Administration was discontinued early in 1934, the number aided fell off substantially.

Secondly, the relief problem was not being met on an adequate basis in the early years of the period, in terms of the number of needy families aided, or the amount of assistance they received. Direct relief was provided on a budgetary deficiency basis in 1934, while employees on the present works program are paid standard monthly wages for the work they perform.

Many families are now receiving more adequate aid under the public assistance programs of the Social Security Board than they received under the direct relief program in 1934.

Also these data include not only Federal expenditures but State and local expenditures as well, and the States and localities have greatly

1 Exhibit No. 49, supra, p. 67.

Exhibit No. 51, supra, p. 70. 'Ibid.

Exhibit No. 14, supra, p. 21.

Exhibits Nos. 49 and 50, supra, pp. 67 and 69.

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