We hope that the committee will reach an agreement on this bill. It is going to be a nonpartisan bill which comes out of this committee to meet, not a temporary but inevitably a permanent condition.

May I repeat, because I think I did not make it clear, that there were an average of about 3,200,000 people unemployed during the whole of the last decade, from 1920 to 1930, before we had gotten the vast accumulation of productive capacity of this machinery constructed during that decade.

Senator BARBOUR. Do you know how much the population has increased during that period?

Mr. MARSH. Not very heavily. There has been some increase. There have been shifts of population.

Senator BARBOUR. I think the figure you speak of really represents a decrease in employment with relation to the population of the country.

Senator GORE. Was not a large percentage of it just floating labor, that was in transit from one industry or one locality to another?

Mr. MARSH. There is permanently a floating population, from lumber camps to mining and construction work, and harvesting, of between 750,000 and 800,000. Only this week Bernar MacFadden, in the New York Graphic, called for the declaration of martial law to meet this situation. Only yesterday, 28 mayors in session at Detroit, called by Mayor Murphy of that city, suggested a $5,000,000,000 Federal appropriation for public works, and that there be a permanent work or unemployed army created. That seems to me a great mistake, because I submit to you that we do not want to smash up the family. As far as possible, it is wise to provide employment in or near the homes of those who are unemployed. You can not do it completely, admittedly. It seems to me that there is a pretty wide discretion given in the principles of the Wagner bill for giving this employment where it is needed.

I would not worry as much as my friend Mr. Burns did over the pauperizing of the communities. There is not a single great fortune or income in America that is derived locally, with the exception of those from land values. The Astors are an exception. In 1930, approximately three-quarters of all the incomes of over $100,000 were received by residents of New York, Massachusetts, Pennsylvania, California, and Illinois.

Senator GORE. Three-quarters?

Mr. MARSH. Approximately three-quarters of all the incomes of $100,000 and over, and 94 per cent, on the average, of those having an income of over $100,000, was derived from property. In other words, the great fortunes in America, and the great incomes to-day, are based upon the efforts of the general public of America. They are not locally obtained. To ask these large fortunes to meet part of this emergency through Federal taxation, is not to saddle upon the rich any expense for which the communities are responsible. Unemployment, I believe we agree, is primarily due to Federal policies and only in a limited measure to State or local policies.

The point was made this morning-and I think erroneously-that if you appropriate $500,000,000 to be raised by bonds, you increase the deficit to that extent. I believe it is more accurate to say that

you increase the outlay of the Federal Government for the current year only by the carrying charges, amortization, and interest. I think that is a technical point which ought to be made.

But, gentlemen, I submit to you that what is in issue to-day is not the balancing of the Budget, but the stability and equilibrium of the Government of the United States, because of the concentration of wealth and income. Nobody wants to tax the rich from punitive motives now, but simply because people can not buy, unless they are given either charity-if you want to call it that. I think it is their right to have maintenance-or work. The mere fact that for two years there has been a continuous reduction in work because of this situation, it seems to me, indicates the absolute imperativeness of the prompt enactment of the principles of the Wagner bill. As I said, we would rather have these more extensive measures, but we recognize the difficulty in an election year. We are going to press for those measures, but I hope you will not adjourn without making available during the next few months at least the amount provided in the Wagner bill.

Let me repeat, if I may, that you should stipulate that the minimum of machinery should be used in the work undertaken.

Senator WAGNER. You notice we have a 30-hour provision in the bill.

Mr. MARSH. Yes.

Senator WAGNER. Do you think that would be helpful?

Mr. MARSH. I think that would be helpful-also a minimum of machinery and a very carefully restricted profit.

Senator GORE. Would you place any maximum limit on wages so as to employ as many people as possible?

Mr. MARSH. I think you would be thoroughly justified now in starting out to give the maximum number of people employment that can be at a living wage. I do not know what a living wage is. I figured up yesterday that the revenue bill which the Senate reported out levied $710,000,000 additional taxes on sales, exclusive of the $160,000,000 increase in postal rates, in addition to the $950,000,000 of taxes on sales in the present revenue bill. Therefore, you have to take into account that you have unloaded on the common people a very large part of this $4,340,000,000 Budget, relative to their ability to pay.

Senator GORE. A party connected with the Red Cross work and relief work in Oklahoma City has been connected with a very thorough study of the problem in Oklahoma City, and he says that a family of five could be maintained on $5 a week. Major Lever, I believe it is, at Tulsa, who is connected with the welfare work there, has a plan, and I put it in the Congressional Record here, by which one person can be maintained at 8 cents a day. Of course, that is minimum sustenance, but I put that in the record for whatever it might be worth; that is an extremely low limit, but this is relief work, and not wages. Of course, it ought to be made to go as far as practicable.

Mr. MARSII. That reminds me of a squib in the Philadelphia Bulletin about 15 years ago. Somebody asked, "Can a man be a Christian on $3 a week?" The answer was, "A man can not be anything but a Christian on $3 a week.'

It is my honest opinion that you may be able to provide, in lowest cost of living communities, a bare existence for a small family at $5 a week. That, I assume, would mean food and perhaps shelter. Senator GORE. Yes.

Mr. MARSH. But you can not maintain a decent standard of living on it.

Senator GORE. I think that was for food.

Mr. MARSH. You come to this point again. You have this enormous productive capacity. As Paul Warburg said three or four years ago, "We must realize that it may not be wise for us to try to monopolize the world's markets." We have a sufficient national income, and America is the only nation to-day with an adequate national income.

Senator GORE. What is your present estimate of our present national income?

Mr. MARSH. I have seen estimates for last year between $65,000,000,000 and $68,000,000,000, and others as low as $60,000,000,000. This year the estimates run from $50,000,000,000 to $55,000,000,000. The last year we have an official estimate for, was for 1929, when it ran about $92,000,000,000 or $93,000,000,000.

Senator GORE. I thought it was down to nearly $30,000,000,000 now. I might be mistaken.

Mr. MARSH. But, Senator Gore, if you have a million families, or two million families just barely existing, when you realize that we have as many people working in factories as they can find products for to-day, there is no hope for getting work there. You will realize that you are facing a situation more drastic and more terrific than we have ever faced before.

I asked a United States Senator in a southern State last fall, What are you going to do?" He said, "The farmers will get along on $100 cash income a year through the South." I said, What happens to mass production?" He said, "That is through." I said, "What happens to the factory employees?" He said, "They are through."

I submit to you gentlemen that you have this situation. You have to figure out how you can meet the problem with this minimum amount made available. This problem is put up to America, with adequate income, and the most marvelous resources, and with 4 per cent of the people in possession of approximately four-fifths of the national wealth, and with a situation where 312 per cent of the families get between one-fifth and one-sixth of the total national income. Mechanization has brought problems which no political theory can meet; nothing but sound economies can meet them. Senator Wagner will not feel that it is in derogation when we advocate the principles of his bill as a stop-gap, and something that is immediately imperative while we work out a program to meet the whole situation.

Senator FLETCHER. Mr. Marsh, the problem is to get people employed, to get people to work. I understand you to say you have to study that out a little later, during the summer. Can you get more people employed by going on with these public works that have been authorized by Congress, rivers and harbors improvement, public buildings, and all that sort of thing, than you can by making

loans to private enterprises, as suggested by the Secretary of the Treasury, and as provided in Senator Barbour's bill?

Mr. MARSH. I think you could, and for this reason-and I will answer briefly, Mr. Chairman, if I may. Private industry will get a loan if bankers can see a profit. The Government is the only agency which can provide work on the basis of no profit for anyone, and I think, on the whole, it is as efficient as private industry. The Government is the only agency that can provide work for the people so that they can maintain their families from their own work.

Senator BARBOUR. How would you reconcile the Government financing the work you speak of, without profit, in competition with private business? It would soon put private business out of business, would it not?

Mr. MARSH. Of course, the Government might hire contractors for these public works, or it might put its own engineers on them, but I submit, Senator Barbour, that we have reached a state where literally a fifth of our population is in a desperate situation, and, if it is necessary to compete, we have to do it.

Senator BARBOUR. I do not want to create a vicious cycle that is going to bring them all into the same category.

Mr. MARSH. I do not, either. We have gone through the deflation of labor. It is thoroughly deflated. It is my impression that there has been an average reduction of about 15 to 20 per cent in wages. Now, they are talking about increasing_commodity prices. That is going to get labor coming and going. I have my sympathy for the private enterprises, but the primary purpose of Government, as I construe it, is to provide the people an opportunity to make a living, where an economic system has grown up which deprives them of that opportunity. With the exception of housing, which is not involved

Senator WAGNER. Yes; I have housing provisions in my bill.

Mr. MARSH. I mean as a large item, directly. You restrict it to limited dividend corporations.

Senator WAGNER. Exactly.

Mr. MARSH. I was going to come to that. It is not the major proposition. Our bill would start with a large amount, but your bill, I think, follows, wisely, the same policy. You have to give to corporations, which are going to limit themselves to a very restricted profit-I do not say a dividend; they may not pay it out-but not to exceed a 6 per cent profit.

Senator Barbour, I was astounded, on reading a statement from the National Bureau of Economic Research, which is very conservative, in which they showed that in 1928 approximately four-ninths of the national income went to property, and only five-ninths to nearly 48,000,000 people working. The Treasury Department figures showed that nearly two-fifths of the property income went to about 1,000,000 families out of 26,000,000 families. I think, frankly, we have simply got to reduce the returns to land owners as rent, reduce interest rates, and reduce profits, to avoid having permanently an unemployed army of five or six million people.

We indorse the principles of this bill. I would suggest, perhaps, a combination-60 or 75 per cent on the basis of population, if necessary, and part on the basis of need.

Senator GORE. Mr. Chairman, I met two gentlemen this morning, Mr. Williams and somebody else, who wanted to submit a brief statement in regard to this proposed advance to the Secretary of Agriculture for the sale of wheat and cotton.

The CHAIRMAN. I promised Mr. Williams he could have 10 minutes. If he is in a hurry, we can put him on immediately. Senator GORE. I do not know whether he is here now, or not. The CHAIRMAN. We will hear Dr. Foster first.

Mr. MARSH. May I ask permission to insert in the record a statement of the American Farm Bureau Federation as to the need for roads?

The CHAIRMAN. Yes. It may be printed in the record. (The statement referred to is as follows:)

The American Farm Bureau Federation recently reported:

In the United States there are 2,484,822 miles of unimproved dirt roads, with many more miles of dirt roads with slight improvement in draining and grading. There are 2,747,732 farms located on these improved dirt roads and another 1,988,704 on the slightly improved dirt roads. Less than 500,000 farms in the United States are located on assured all-year roads."

STATEMENT OF WILLIAM T. FOSTER, DIRECTOR POLLAK FOUNDATION FOR ECONOMIC RESEARCH, NEWTON, MASS.

is?

Senator WAGNER. Will you tell us what your present occupation Mr. FOSTER. I am director of the Pollak Foundation for Economic Research, Newton, Mass.

Senator WAGNER. You have written a number of books upon different economic subjects, have you not?

Mr. FOSTER. Yes.

"Profits ";

Senator WAGNER. Will you enumerate some of them?
Mr. FOSTER. The titles of the books are: "Money";
Business Without a Buyer "; " The Road to Plenty."
Senator WAGNER. We will not ask you to enumerate them all.
Senator GORE. That is a rather long road, is it not, Doctor?
Mr. FOSTER. Yes.

Senator WAGNER. Doctor Foster, I would like particularly to call your attention to a section of the bill which seems to be in controversy, as to the principle involved, and that is the public works program provided in the bill that is under consideration, introduced by me. I would like to get your general views as to the desirability, during times of economic slack, of accelerating public works programs, and sort of retarding those works during times when the Nation is more prosperous.

Mr. FOSTER. Senator, the thesis of this book I just mentioned, The Road to Plenty, is that it is perfectly possible and economically sound for the Federal Government, in time of business depression, to expand expenditures for public works. That book was published in 1928.

Senator BARBOUR. By public works, do you mean public buildings principally?

Mr. FOSTER. No. The particular kind of public works which may best be constructed is another question.