three or four dollars a month in addition to the C. C. C. earnings of another member.

Senator HALE. But you might give the father employment?
Mr. WILLIAMS. Yes.

Senator HALE. And then a member of the family is also getting this help from outside?

Mr. WILLIAMS. Yes.

Senator HALE. Then they may be getting it from both agencies outside?

Mr. WILLIAMS. No; they only get it from one and W. P. A.

Senator HALE. Then you do have a rule that you allow one but do not allow two?

Mr. WILLIAMS. It works out that way.

Senator HALE. So you do make inquiry as to whether they are getting other assistance?

Mr. WILLIAMS. Oh, yes. These people, before they ever get a job from us, have to go through the relief agencies.

Senator HALE. Do you make any inquiry as to whether they are also getting help under the Social Security Act-unemployment insurance, for instance?

Mr. WILLIAMS. The relief agencies have case records and every dollar that comes into the family is known.

Senator HALE. Do any of those that you employ get help from unemployment insurance?

* Mr. WILLIAMS. Well, Mr. Altmeyer is here and he is going to speak on that shortly. Do you want to leave that until he talks or do you want me to answer it?

Senator HALE. No; from your point of view.

Mr. WILLIAMS. Well, from our point of view, we have a very clear understanding on unemployment compensation that when anyone is eligible he is expected and required to make application, and when he receives that benefit he leaves W. P. A. and takes his benefit under employment insurance.

In old-age assistance, we also require that they go off and take oldage assistance except, Senator, in some few States where the assistance is very low that we have made exceptions where they insist on their right to work.

Senator HALE. And in such cases you deduct from what you would pay them under the W. P. A. on account of their receiving help from these other sources?

Mr. WILLIAMS. No. In these instances, there would be only three or four dollars a month from this old-age assistance, and that doesn't amount to much.

Senator HALE. Very few receive old age pensions as low as three or four dollars a month?

Mr. WILLIAMS. In some of the States that is the sum that they receive.

Senator HALE. Yes; but very few. What if they received $30$15 from the State and $15 from the Federal Government?

Mr. WILLIAMS. Then they are not kept on the W. P. A. rolls.
Senator HALE. Out?

Mr. WILLIAMS. Absolutely; there are practically none that are receiving old-age assistance and also getting W. P. A. work.

Senator ADAMS. You or Mr. Altmeyer could inquire as to how many many people are off your rolls by reason of unemployment insurance and old-age insurance and who would otherwise be on your rolls.

Mr. WILLIAMS. I think you would do better to let Mr. Altmeyer go into that fully because he has the whole statement right there.

Senator BYRNES. The question does come up with W. P. A. in this way: The people who are certified to W. P. A. are certified by an organization within the State and that organization determines whether or not the individual is in need?

Mr. WILLIAMS. Yes, sir.

Senator BYRNES. If the organization within the States after investigation of the individual concludes that the cost of unemployment insurance would not be certified, then you would never get it?

Mr. WILLIAMS. No, sir.

Senator BYRNES. But when it comes to you and if you give a man a job, you can't fix a different wage for an individual because he happens to be getting unemployment insurance?

Mr. WILLIAMS. No, Senator, W. P. A. workers are paid in accordance with the work they perform. But we wouldn't let a worker stay on our rolls if he were eligible for unemployment insurance even though that insurance paid him only $8 or $9 per month, as it does in many instances.

Senator BYRNES. The skilled worker who is a man certainly in the unemployment insurance would not get so much as he would get under this security wage job or the W. P. A.?

Mr. WILLIAMS. That is right, but we require that he leave our pay roll and take that insurance. I want to qualify that to this extent: Until the unemployment insurance machinery is working, we will not force those people out, but wherever the machinery is working, they must go and take their insurance.

Senator BYRNES. Up to this time you have not got rid of many many because they have not been paying anything?

Mr. WILLIAMS. No.

Senator HALE. There are about 400,000 now receiving unemployment insurance.

Mr. WILLIAMS. Mr. Altmeyer can answer that better than I. Senator TOWNSEND. Mr. Williams, let me ask you a question: What are the variations in what they receive?

Mr. WILLIAMS. Well, I would rather leave that to Mr. Altmeyer, if you don't mind.

I will go ahead with my statement. In 1936 the Federal Government spent over $4,000,000,000 more than it withdrew in revenues. This included the bonus payment. In 1937 the net execss of expenditures over revenues declined to $867,000,000.

In keeping with this general upturn in business, W. P. A. rolls were reduced from a peak of over 3,000,000 in February 1936 to about 2,000,000 in May 1937. By September 1937 another 600,000 workers had been dropped, bringing the total employed to 1,450,000. In June the E. R. A. Act of 1937 was passed, appropriating $1,500,000,000 which was 25 percent below the previous year. Due to this smaller appropriation and to the provision that the money be used over the year, and to the fact that we were trying to synchronize W. P. A. employment with private employment, it was necessary to make this sharp reduction in W. P. A. employment.

46941-38- 2

The rapidly expanding business situation was stopped abruptly in the latter part of 1937. Industrial production from August to December declined almost 30 percent. Further declines were registered during January 1938. This decline was the sharpest ever recorded in so short a period of time. In certain major industries the drop was very great. For example, steel operations declined 77 percent from the first week of September to the low point in December. The decline in Federal expenditures from their peak in 1936 was extremely rapid, and probably accounted for part of the fall in general business activity. The monthly contribution of Federal spending to purchasing power fell from a peak of $550,000,000 in June 1936 to less than $20,000,000 monthly in the closing months of 1937. This curtailment undoubtedly affected adversely the general business situation.

Employment declined sharply with the fall in production and public spending. During the last several months some 3,000,000 people have lost their jobs. In October 140,000 people became unemployed. In November this increased to 870,000. In December the number was 820,000. These figures include the declines in nonagricultural employment as reported by the Bureau of Labor Statistics, combined with estimates of the decline in agricultural employment. Although final figures are not yet available, indications are that more than 1,000,000 persons lost their jobs in January.

The full effect of this increased unemployment is now being felt in the relief offices in all parts of the country. In November, shortly after the first mass of unemployed were let out, cities and towns everywhere began to report increases in relief. We had expected a seasonal increase in the need for W. P. A. jobs and we were in a position to expand to meet some of the winter needs. W. P. A. employment rose slightly in November, but it was apparent that the local relief offices would be confronted with a problem beyond their power to meet. Accordingly, in December Mr. Hopkins authorized a further increase in W. P. Á. employment of 350,000. We limited the increase to this figure simply because we had to make the entire appropriation last through June 1938.

The effects of the increased unemployment can be seen in the flood of relief applicants all over the country. In the last 4 months local direct relief has increased from 1,300,000 cases to 1,800,000 cases in January. Over four-fifths of this increase occurred in December and January. These figures do not measure the full extent of the recent increase in relief needs since there are areas where relief offices do not exist and others where additional relief could not be granted.

Senator HALE. When did this first begin to manifest itself?

Mr. WILLIAMS. It began to manifest itself along about the latter part of September, Senator, and it increased by leaps and bounds in November, December, and January

Senator HALE. All right. By that time it was evident that you were going to have trouble, was it not?

Mr. WILLIAMS. Well, it was evident that we had a considerable number of unemployed people on our hands.

Senator HALE. Why did you not let us know something about it? Mr. WILLIAMS. I beg your pardon?

Senator HALE. Why did you not let us know something about it? Did you take it to the President?

Mr. WILLIAMS. We hoped that conditions would improve. I was not willing until the latter part of January to say that we could not meet the situation. As soon as I became convinced that we could not I notified the President.

Senator HALE. You mean that you hoped that conditions would get better?

Mr. WILLIAMS. I hoped that conditions would get better. We are meeting the situation in the several cities of the country as far as giving able-bodied unemployed people who were sent to us from relief was concerned. We were able to meet the demands made upon us by relief offices for employment of able-bodied people coming to them for relief, and until I couldn't do that I was unwilling to go and say that we needed any more money. At the end of January it became apparent that we could not any longer hope to meet the need with the funds available.

Senator HALE. Why was that? Because their demands were increasing all the time?

Mr. WILLIAMS. Their demands were increasing at a great rate. You will understand, as you study this problem, that there is a lag of 8 to 10 weeks between the time when a man loses his job and when he applies to a relief agency. He doesn't come at once. He goes through a period of hope when he doubles up with his relatives and does everything in the world he can, and finally, as a last resort, he comes for assistance. As a result of this much of the increase in need did not reach us until January.

Senator TOWNSEND. Then you have not filled the applications for January and will not probably for a month or 6 weeks?

Mr. WILLIAMS. Not all of them; no, sir.

Mr. BYRNES. Your job was to report it to the President. You could not submit an estimate or deficiency to the Congress? Mr. WILLIAMS. No, sir.

Is that the first time you

Senator BYRNES. When did you report it to the President? Mr. WILLIAMS. The second of February. Senator BYRNES. The 2d of February. reported the increase in the number of applications for assistance? Mr. WILLIAMS. No, sir; I reported the increase from time to time, but I also reported to him that I was meeting the situation with available funds.

Senator RUSSELL. That is, when you reported, the $10,000,000 was gone beyond your available resources?

Mr. WILLIAMS. Yes, sir; I notified the President of our increases, and also said that we were hopeful that we would be able to meet the situation.

Senator MCKELLAR. You were hoping all the time that you would be able to meet the situation?

Senator HALE. So when you give 3,000,000 who have gone out of employment during the last few months, you are not basing it on the applications that have been made to you, but you are basing it on your knowledge of the situation?

Mr. WILLIAMS. That is right.

Senator HALE. All right. And you expect to get applications covering those people in the very near future?

Mr. WILLIAMS. Well, I expect to get a portion of them. We will never get all of them, because, as Senator Byrnes said, not all the unemployed apply for aid.

Senator TOWNSEND. Do your reports indicate that February will increase the number at the rapid rate as January did over December? Mr. WILLIAMS. Well, Senator, it is always a dangerous thing to forecast what will happen because so many things can come in the picture and change it. If there is an upturn this spring in the automobile industry or in the steel industry, then we won't get anything like the same percentage.

Senator HALE. Have you given up hope of improvement?
Mr. WILLIAMS. I beg your pardon?

Senator HALE. Have you given up hope of improvement?
Mr. WILLIAMS. No, sir, I have not.

Senator HALE. Then you think there is a very good chance of improvement in business conditions?

Mr. WILLIAMS. I certainly hope there is.

Senator HALE. You do not anticipate any further legislation that will discourage it?

Mr. WILLIAMS. Well, I am not here to discuss that, sir. Continuing my general statement I have here a tabulation of the number of relief cases that received State and local general relief in the past 7 months, and I would like to put that in the record.

(The table is as follows:)

TABLE 2.-Total cases receiving general relief, July 1937 through January 1938

The local relief officials in these cities report that in January the relief rolls held large numbers of employable families in the sense that they contain a person able and willing to work. As a matter of fact, the relief agencies regard 60 percent of the January relief cases in the 90 cities as employable. This, together with the fact that almost all of the recent increase in relief has occurred in the last 2 months as the direct result of the decline in private employment, indicates that a substantial proportion of the people on the direct relief rolls today are employable and eligible for employment on W. P. A. projects.

However, our experience with relief agencies' estimates of the number of employables on direct relief shows that they tend to be high. Careful investigations on the part of our representatives in the field and our past experience in matters of this kind indicate that there remain on direct relief at least 500,000 who are in need and willing to work. Another 250,000 unemployed, willing and able to work and in destitute condition, are in areas where relief offices do not exist or where further relief cannot be granted, making a total of 750,000 in immediate need of work relief. The expansion of the W. P. A. up to 2,500,000 will give employment to about 500,000 and will relieve the most severe pressure of need. It will not meet it all.