CUSHION FOR UNEMPLOYMENT In England, during the first year of the war, employment dropped 25 percent. There is going to be unemployment in this country, whether it is because of priorities or price control, or whatever the factors may be labeled back in Washington. Now, what is the cushion for that? Have you gentlemen given any attention to that question? Is it an increase in the unemployment compensation? Is it forced savings, voluntary savings, the dismissal charge, or what? Speaking now as one member of the committee, I think, unless we plan against the day, that post-war unemployment may be just as dangerous as any attack from without. I am just speaking for myself now. But I think it will be a whirlpool. Have any of you gentlemen of this panel given any thought to what we can do what Congress can do now to plan for that? Various schemes have been suggested; for example, public works. England is taxing its citizens to the limit and is saying that each one will get 10 percent back at the end of the war. But England may be broke, and we may not have funds available for public works at the end of this emergency. What can we do about it now? The representatives on this panel employ hundreds of thousands of individuals. What can you gentlemen do? Does anybody have an answer to that question? ENCOURAGE BUSINESS TO CUSHION UNEMPLOYMENT Mr. HILL. I can make one suggestion: Encourage research; encourage the development of business; put penalties on businesses that don't advance; develop new products; eliminate the tendency to discourage rather than encourage business to advance, so that during the war period, or at least toward the end of it, our research departments can continue their investigations and research for the development of new products. As Mr. Wilson mentioned, the demand is going to be there after the war, and we want to be in a position to supply those needs. Encourage public investment in businesses that are going to produce. We make the mistake of looking at business as institutions that produce products. It isn't products we produce, it is employment; and from employment we produce products. If we are discouraged in the production of products, we are discouraged in the production of employment. Congress and all Washington could look forward to the encouragement of what the businessman feels is the thing that produces employment, and that is profitable business, a business that can proceed without too much regulation so long as it lives within decent bounds. The CHAIRMAN. Any other suggestions? PAY AS YOU GO GOOD NATIONAL POLICY Mr. WILSON. I have thought a great deal on that point. I have some opinions of my own. I may be getting a little away from my experience, perhaps, but I will be glad to tell you what I think about it. The country has to pay for the thing in effort, actually and currently. Just for a moment, let us put money outside our discussion. What we actually produce for defense has got to come out of what we otherwise might have for ourselves. You can't borrow it from the past, because we didn't produce it in the past. The guns that you would make next year can't be used this year, so that actually the material and the labor and effort have got to be applied currently. Now, how you pay for all that, and finance it, is going to determine how bad the aftermath is going to be. The CHAIRMAN. Nobody knows that. Mr. WILSON. There is no reason why it should be very bad. Since you have produced the goods currently, the country should be able to go into an era of increased prosperity after this thing is over, because you stop the waste of labor and material, which is the same thing. You can't get material without human labor. Now, because of that, we should have a higher standard of living if we handle it intelligently after the war. The big thing is to avoid an inflation and a dislocation of business that will make it difficult to reorganize and get going again. Or are the ground rules going to be so different that no one will know how to go about business? Personally, I think this is the time for everybody to pay his debts. Individuals should not be going in debt at the same time the Government is going in debt at such a tremendous rate, because we can't all be in debt. We would be just stagnated then. So it would be a fine thing for the country if we would wind up this defense program with the citizens of the country having some savings, so that they then could start to spend for the things that they would like to have, thus raising their standard of living. The CHAIRMAN. Now you are talking my language. We addressed that question to migrant defense workers in many parts of the country: Are they saving? Mr. Wilson, you have close to 3,000,000 people who have left their home States to go to these defense centers. If they had five hundred or six or seven or eight hundred dollars in their pockets at the end of this war period, I think they would have gone a long way toward accomplishing what you have in mind. The Government may have to retrench at that time. That money would be the real cushion, don't you think, after all is said and done? Mr. WILSON. Certainly; that would be the best thing to stimulate business. The CHAIRMAN. But the sad thing is those workers won't have it. Mr. WILSON. That depends on how socialistic and nationalistic the country is by that time. It will depend on whether we have softened everybody down to where he is not used to looking after himself, or hasn't the courage or moral stamina to deny himself something, and whether he is going to compete in the market and get very little for the money he spends and contribute to the chaos of the present situation. The CHAIRMAN. If you gentlemen have any further suggestions or information that would be of interest to the committee, please feel free to send it to us. Our record will be held open for about 2 weeks. This is a mighty big problem, and I am very sorry we have to curtail this discussion. On behalf of the committee I want to thank each of you gentlemen for your fine presentation. It is a valuable contri-. bution. The committee will stand adjourned until 9:30 tomorrow morning. (Whereupon, at 4:40 p. m., the committee adjourned until 9:36 a. m., Thursday, September, 25, 1941.) NATIONAL DEFENSE MIGRATION THURSDAY, SEPTEMBER, 25, 1941 HOUSE OF REPRESENTATIVES, MORNING SESSION The committee met at 9:30 a. m., Hon. John H. Tolan (chairman), presiding. Present were Representatives John H. Tolan (chairman), of California; Frank C. Osmers, Jr., of New Jersey; Carl T. Curtis, of Nebraska; and John J. Sparkman, of Alabama. Also present: Dr. Robert K. Lamb, staff director; John W. Abbott, chief field investigator; Francis X. Riley and Jack B. Burke, field investigators; and Ruth B. Abrams, field secretary. The CHAIRMAN. The committee will come to order. Mr. Larned will be the first witness. TESTIMONY OF ABNER E. LARNED, STATE ADMINISTRATOR, WORK PROJECTS ADMINISTRATION, FEDERAL WORKS AGENCY, LANSING, MICH. The CHAIRMAN. Mr. Larned, Congressman Sparkman, of Alabama, will question you. Mr. SPARKMAN. Mr. Larned, will you state your name, address, and the official capacity in which you appear before the committee? Mr. LARNED. My name is Abner E. Larned. I am the State administrator of W. P. A. My home address is 8120 East Jefferson Avenue, Detroit. My Detroit office is 15020 Woodward Avenue, and my Lansing office is 1331 South Washington Street. Mr. SPARKMAN. I have rather hurriedly scanned the statement that you have prepared, which will, of course, be included in full in our printed record. (The statement referred to above is as follows:) STATEMENT BY ABNER E. LARNED, MICHIGAN STATE ADMINISTRATOR, WORK PROJECTS ADMINISTRATION, FEDERAL WORKS AGENCY During the past 6 years that the Work Projects Administration has operated in Michigan it has spent a total, cumulative to August 1941, of $494,812,923. A large part of this money has been allocated from Federal funds; the balance by local communities which have initiated and sponsored various Work Projects Administration projects. Through the expenditure of this money thousands of needy unemployed men were given work at times when no other work was available. This otherwise wasted labor resource was transformed into community improvements-roads, streets, schools, airports, athletic fields, community services that otherwise would not have been made. From already hard-pressed local counties and cities was lifted the burden of caring for thousands of destitute workers. Into the shops of local merchants there was diverted the millions of dollars paid in wages. The purchases of materials and supplies were a welcome aid to manufacturers and distributors. With the present industrial and general economic improvement, the present and future role of a works program naturally comes up for discussion. It is important to determine to what extent the Work Projects Administration program is involved in the problems resulting from our effort to gear our economy to the production of the essentials of war, the problems of industrial lay-offs due to priorities and material shortages, expansion in plants manufacturing defense material, and the migration of workers from one area to another. By an analysis of the past employment experience of the Work Projects Administration program and of current data secured by local Work Projects Administration offices working throughout the State, the possible present and future functions of the works program will be examined. WORK PROJECTS ADMINISTRATION EMPLOYMENT IN RELATION TO LOCAL NEEDS The Work Projects Administration program is closely geared to the varying needs of the counties and cities in Michigan. Subject to a necessary State and Federal supervision, local communities initiate and sponsor useful projects; local relief authorities refer all needy unemployed workers for Work Projects Adminis tration employment. Consequently to the extent to which community needs are recognized by local authorities, they secure full recognition from the Work Projects Administration. Table I indicates the number of applications for work received through the relief agencies throughout the State and also the number of certifications and recertifications for Work Projects Administration employment. To permit comparison, separate data are included for the Upper Peninsula and Wayne County. Since January 1940 the rate of applications has with minor variations declined. The decrease in applications from Wayne County has been more rapid than from the economically depressed Upper Peninsula. The number of certifications and recertifications followed the number of applications quite closely for each month, indicating prompt action by Work Projects Administration in approving certifications made by the relief offices for eligible workers. TABLE I-Comparison of applications to certifications and recertifications by State total, the Upper Peninsula and Wayne County, Michigan Work Projects Administration, January 1940 to July 1941 STATE WORK PROJECTS ADMINISTRATION EMPLOYMENT, EARNINGS AVERAGE HOURS AND The average monthly employment on Work Projects Administration projects in Michigan and average hours and earnings of project employees from 1935 to date is shown by table II. Employment levels have roughly followed general employment and business conditions in an inverse ratio. From a high employment level during the first quarter in 1936 Work Projects Administration employment, reflecting a general business upturn, decreased to a low of 43,215 persons in September 1937. During the following year an all-time high was reached in August. From this high point the Work Projects Administration employment lead decreased with seasonal fluctuations to the present low level of August 1941, of 33,476 workers. Average hours and earnings show only minor variations |