moved at much sacrifice. But if the automobile and other consumers' durable goods industries are able to convert to defense production, they will be able to convert back again, and their workers will be spared the ordeal of twice uprooting their lives. Moreover, curtailment of the output of automobiles and other durable goods over an extended period will give industry a large backlog of unfulfilled demands after the emergency. This should help to prevent a post-war slump. NATIONAL DEFENSE MIGRATION THURSDAY, SEPTEMBER 25, 1941 HOUSE OF REPRESENTATIVES, AFTERNOON SESSION Washington, D. C. The committee met at 1:30 p. m. The CHAIRMAN. The committee will please come to order. TESTIMONY OF WILLIAM HABER, PROFESSOR OF ECONOMICS, UNIVERSITY OF MICHIGAN, ANN ARBOR, MICH. The CHAIRMAN. Professor Haber, I feel we owe you an apology. We had scheduled your appearance for this morning, but we spent about eighty or ninety billion dollars, and it took considerable examination to develop just where that money was going; but we appreciate very much your coming here. We look upon you as one of our most important witnesses, and we hope we haven't inconvenienced you. Dr. HABER. Not at all. It was a very worth-while hearing. The CHAIRMAN. Professor, it has been a very interesting investigation. In the last session we visited New York, Alabama, Illinois, Nebraska, Oklahoma, and California. We were then investigating the migration of destitute citizens. Then we were continued to investigate nationaldefense migration, which involves a couple of million people who have left their home States and gone to these defense centers. As I understand it, you have been interested in that migration yourself, Professor Haber, and have been studying it? Professor HABER. Very carefully. The CHAIRMAN. I am glad to know that. As we go around the country, we don't attempt to cross-examine witnesses or assume any crusading role. We are simply a fact-finding body, and we have been received by the press and public very generously. Congressman Curtis will interrogate you. Professor HABER. If I may respond to your kind comment, Congressman Tolan, I think the hearings and the testimony accumulated by this committee are going to make a very genuine contribution toward an understanding of some of these problems. I have been immensely impressed with the report of your committee. It has in it observations dealing not only with the current situation, but some very significant findings in connection with the outlook after we are over the present emergency. The CHAIRMAN. Millions and millions have been spent for the perfection and regulation of the materials, the creations and tools of man, and a great body of law has been built up in this country to control the interstate traffic in these things. But this is the first time our Goverment has given its attention to the movement of the human element that is wandering aimlessly from State to State, looking for work. Because of your interest in this problem, Professor Haber, I am going to send you a brief in the case of Edwards v. The State of California, a case in which one Edwards was prosecuted for transporting his brother-in-law, Duncan, into the State of California. Edwards was convicted. It is now on appeal to the Supreme Court of the United States. It is a very interesting case, and I shall not forget to send you a brief. It is interesting to note that 28 States of the Union today make it a crime to transport a poor or indigent citizen from his home State to another State. Michigan is one of them, and here you have the Federal Government today urging them to leave for defense purposes. You may proceed, Congressman Curtis. Mr. CURTIS. What is your full name, Professor? Dr. HABER. William Haber. Mr. CURTIS. And with what institution are you connected? Dr. HABER. I am professor of economics at the University of Michigan. Mr. CURTIS. Located where? Dr. HABER. At Ann Arbor. Mr. CURTIS. And you serve also as chairman of a Presidential committee, do you not? STUDYING RELIEF PROBLEM OF PAST 10 YEARS Dr. HABER. I am chairman of a committee appointed by the President. The committee is one set up by the National Resources Planning Board. It is known as a committee on long-range work and relief policies. It has been studying the problem of public aid of the past 10 years, with a view of finding out to what extent our experience may guide us in the future, to what extent these measures have been of a transitory emergency nature, and in what directions we ought to go. The report of the committee is in its final stages, and will be completed in the next 2 or 3 months. Mr. CURTIS. And will be submitted to the President? Dr. HABER. That is correct. Mr. CURTIS. And how long has that committee been working? Dr. HABER. About 18 months with a staff gathering the data, in consultation with the agencies; but the committee is independent of any administrative agency, and is located in the National Resources Planning Board. Mr. CURTIS. How many persons are on the committee? Dr. HABER. The committee has eight members. 1 Select Committee Investigating National Defense Migration, committee print, Analysis of Material Bearing on the Economic and Social Aspects of the case of Fred F. Edwards v. the People of the State of Cairfornia (No. 17, October term, 1941, Supreme Court of the United States, Washington, 1941). Mr. CURTIS. Are all of you professors of economics? Dr. HABER. No; four of the members hold positions in agencies of Government, the Federal Security Agency, Office of Production Management, the Office of Civilian Defense, and the Department of Labor. Four are public representatives: Father Haas, of the Catholic University of America; Fred Hoehler, of the American Public Welfare Association; Mr. C. M. Bookman, director of the Cincinnati Community Fund; and myself. Mr. CURTIS. Professor Haber, will you please give this committee your views as to the adequacy of our system of unemployment compensation? We are particularly interested in your opinion as to the type of unemployment for which the present system was designed, and how the present system of benefits will stand up under the impact of priority unemployment. PRIORITY UNEMPLOYMENT Dr. HABER. I should like to start with the latter part of that question, about "priority unemployment". I have followed the discussions of this committee in the last 2 days on that subject. There is no doubt that it is a serious problem, very likely to affect not only thousands of workers in. Michigan, but perhaps millions throughout the country. I am more inclined to take the point of view of Congressman Sparkman this morning, the view that "priority unemployment" is inevitable. In an effort to achieve a national-defense economy, dislocations will take place. I think it would be unfortunate if, because of dislocations, we permitted ourselves to do anything to slow up our efforts of defense. What I believe we ought to do is deal with the problem which involves these people, rather than to attempt to slow up our defense efforts. I don't like the term "priority unemployment" because it tends to get our minds to think in terms of some special program to deal with "priority unemployment," and we will find ourselves very soon setting up a different kind of program to deal with a special type of unemployment. Today we call it priority unemployment. If 6 months from now we decide we are going to make only airplanes instead of tanks and the process of converting tank plants into airplane plants results in unemployment for tank workers, we would call it some other unemployment problem, perhaps conversion unemployment. There are many people who have proposed that we set up a separate scheme to deal with priority unemployment. I think it is important for us to realize that priority unemployment affects not only defense workers, but other workers, maybe just as much as a defense worker. It affects the Fuller Brush man-he may be unemployed because of priorities. The Fuller Brush man may be just as much subject to priorities unemployment as the automobile worker, if for some reason or other he can't get brushes or bristles. It seems to me that this concern is a commentary on our feelings, that there is something inadequate, about our methods of dealing with unemployment, of which priority unemployment is one. Mr. CURTIS. In other words, to a man who is unemployed and to his family and to his community and to the Nation at large, the problem is the same, regardless of the cause? Dr. HABER. Correct. We only complicate the matter by setting up special schemes to deal with special groups. If priority unemployment cannot be taken care of by present methods, then there may be other kinds of unemployment that cannot be taken care of. We ought, therefore, examine the entire schedule for dealing with the whole problem. Priority unemployment presents a special threat, first, because it is concentrated in certain areas, areas in which the defense industries have been concentrated, whereas the system of reserves for the States did not anticipate the type of unemployment to which they will be subjected. What I mean, Congressman, is this: Priority unemployment is a national problem. It happens to be located here, or in California, or in New Jersey. RESERVES FOR UNEMPLOYMENT INSURANCE The unemployment compensation law is a State law, on the basis of State reserves. We may talk about the $2,300,000,000 reserve for unemployment insurance in Washington. I think "reserve" is a misnomer. That $2,300,000,000 reserve is composed of 51 air-tight compartments. You can't transfer the surplus of one State to the deficit of another State. Priority unemployment in a State like Michigan may cause a serious drain upon the insurance fund, and introduce very genuine dangers in its preparation to meet possible defense unemployment. That is likely to be much more severe, both in magnitude and in duration, than priority unemployment. So my reaction to your question, Congressman, is to say, first, that the present unemployment compensation laws are not suited and ought not to be expected to deal with a problem the origin of which is national, but the incidence of which is State. We ought to recognize that. If we don't, we will weaken our efforts to get ready for the post-defense period. INADEQUACY OF UNEMPLOYMENT BENEFITS Second, one may raise some very serious question whether the amount of benefits we have and the duration of unemployment benefits are adequate for this particular group of workers. Even though priority unemployment is temporary unemploymentat least I hope to think of it that way-the problem should not be underestimated; but I don't think it should be exaggerated either. I am a little bit afraid that we are likely to get too excited about it. It is an inevitable problem, and we must deal with it; but I do not believe that a system which provides benefits for 10 weeks in terms of $10 or $12, taking national averages, is adequate to deal with any kind of unemployment. I believe we ought to avoid setting up emergency measures to deal with priority unemployment, because we will only confuse ourselves. We should definitely examine our methods of providing for the unemployed, as to whether they are adequate for any type of unem |