property, direction of war production, and allocations and priorities on materials.

But the final authority must rest with the board on general policies governing:

(1) The establishment of voluntary goals for maximum production, employment, and capital investment in the transition and post-war periods.

(2) The termination of war contracts.

(3) The utilization or disposition of war property.

To make the task of the national board possible, a bureau for the formulation of programs is needed to supply technical information to the board and the executive director. This bureau would act as a central clearinghouse to bring together all available information from public and private agencies, Federal, State, and local.

From this bureau the board would derive the information on which to formulate voluntary goals for maximum production. During and after the war, American business must be encouraged to set itself the objective of expanding output as rapidly as possible, industry by industry.

At the start of the war we failed to control the program of war production by means of a centralized agency and a planned national program. We arrived at the notion of a centralized agency only piecemeal by halting steps during the war effort. The result of this delay was the waste of manpower, the waste of facilities, the waste of resources and the overwhelming costs of these various wastes, not only to the Government but to the economy as a whole.

Labor early supported a program for a central agency for war mobilization.

Now, as we enter the period of cut-backs, the detailed programing of the return to peacetime production should be carefully worked out by one central agency. That means that cut-backs must be planned in relation to manpower needs, the extraordinary emergencies of further war production, the problems of small business, the essential needs of civilian workers and perhaps above all-as a promise for the future-in relation to the increased needs of our foreign requirements and foreign trade. Programing of cut-backs is an exercise of our will to keep the economy going at full production, and I think that the lessons that we learn in this will carry over into the post-war period. Industry by industry we must prepare to match cut-backs with expansion of production.

To make such expansion possible we shall need to join together with the board and the bureau of programs a system of industry councils in each of the basic industries. These should include management, labor, and wherever appropriate agriculture should also be represented. From such councils should come comprehensive programs for achieving voluntary production goals.

The national board will stand or fall on its use of certain powers which must be included in any bill if labor is to lend its support. These powers include the right of every member of the board of full access to any information gathered by the several production agencies, the right to an adequate staff for each board member so that he may keep himself fully informed, and the power to call officials of the office and its constituent agencies before the board.

Among the problems to which the board must devote its early attention are the relations of termination of war contracts, the making of cut-backs, and the disposition of war properties to the general program for an orderly transition to a post-war economy. All of these operations which are primarily concerned with property relationships have the utmost importance not only for owners and managers but for the community as a whole.

We are well aware of the importance of carrying out these operations on behalf of property with the utmost dispatch. We must point out, however, that if these operations are too narrowly conceived they will result in the recreation of a scarcity economy after the war. These measures can only be justified as a means of clearing the decks for an expanded economy.

The acceptance by labor and other groups in the community of a "free enterprise" economy cannot extend to the strengthening of a scarcity economy. We will do everything that is compatible with our role in the community to assist those elements in business who desire an expanding economy. The C. I. O. has already gone on record as favoring speedy contract settlement, adequate provision of reconversion credit, speedy removal of war goods and materials from the plants of war producers.

We especially recognize the needs of the small subcontractors, and urge this committee to pay particular attention to the needs of those small businesses which have contributed to the war effort. They need to have their position strengthened by legislation, and where necessary and possible, they should have a chance to appeal against alleged unfair treatment or delays by their prime contractors. And some will need quick financial settlement of their claims in part or whole where they cannot get it from their prime contractors. Probably these smaller businesses also need access to Government guaranteed credit or even direct financial assistance for reconversion. We congratulate Senator Murray on the provisions in S. 1718 which protect small business in its contract terminations.

Side by side with provisions for demobilizing the firms and corporations which have had the contracts for war production, we need to prepare for demobilizing our manpower and woman power, not only from the armed forces but from war industry.

It may be worth while at this point to pause to reflect once more upon the magnitude of the job ahead of us as we go down the road from war to peace. We shall benefit from a better realization of what the war has done for the United States: In 1939 there were 40.9 millions gainfully employed including the armed forces. In 1943 there were 57.4 millions gainfully employed, including the armed forces (B. L. S. figures, excluding self-employed, proprietors, domestic servants and casual workers).

In 1939, we produced 52,799,000 net tons of steel; in 1943, 88,837,000. In 1939, we produced 2,141 military planes; in 1943, 85,920. In 1939, we produced 341,219 dead-weight tons of merchant shipping; in 1943, 19,296,000. In 1939, our railroads carried 364.7 billion tonmiles; in 1943, 772.4 billion. In 1939, we had a gross national product of 88.6 billion dollars; in 1943, 186.8 billion dollars.

In 1939, the steel industry employed 388,400; in 1943, 516,000; (includes blast furnaces, steel works, and rolling mills). In 1939, the aircraft industry employed, excluding engine makers, 40,000; in 1943,

720,000. In 1939, the ship-building industry employed 70,000; in 1943, 1,040,000: (All employment figures are the B. L. S. monthly averages for the years involved.)

In short, we cannot consider what we have today as full employment. We must regard those in the armed services as additional workers in need of jobs, as indeed they are. If we do that, we shall realize that we need to provide millions of new jobs, after the war. Our productive economy must run at high levels indeed if we are to have an orderly transition to an expanding post-war economy. Moreover, it will take time to shift more of our people into service jobs and professional employment, and properly to organize our educational and training programs to prepare them for the new economy.

Clearly, this will take the best efforts of our whole people, working together. A measure of statesmanship is called for, not only by the representatives of the American people but by the people themselves, such as we have never had to display in any period of our recent history.

I do not think it is too much to say that we face today, economically, a situation which is comparable in its breadth and depth to that which faced the Founding Fathers at the time of the Constitution of the United States.

Unless we arrive at solutions in our economic life as effective as those achieved politically by the Constitutional Convention of 1787 I hesitate to say what perils seem to me to lie ahead. I am not an alarmist. I have the utmost confidence in America, its institutions and its people. It is my studied judgment that we will emerge with a wholesome solution to the problems now confronting us. We cannot

do so, however, especially now in the midst of the greatest war in history, without a unity which exceeds anything seen since the war began.

We find today growing pools of unemployment at the same time that we find alleged labor shortage areas. The representatives of various C. I. O. unions will appear before this subcommittee to portray the situation in their respective industries. They will demonstrate, I know, that industry by industry the lack of any adequate program for interconnected cut-backs and expanded war production programs is hampering war production and rapidly creating local crises which need never have arisen.

These developing manpower problems are not new, but they threaten to become more unmanageable if we do not tighten up the relationship of the various parts of our production program. Hitherto we have had the cushion of expanding war production.

To cushion the effects of a transition from war to peacetime operation, there is no substitute for high level production. But even at its most efficient this activity must be supplemented by adequate emergency unemployment benefits and educational opportunities for returning servicemen and dismissed war workers. It also calls for the continuation of a Federal system of employment exchanges, and the constant improvement of their operations to meet an increasing load.

Even when there is a job at the end of the journey, millions of our workers and their families will need transportation allowances, if they are to get a new start in a city far from their war job. Many of the members of the C. I. O. also are covered by contracts under which

their employers are obliged to pay dismissal wages, and it is necessary that any legislation on contract termination permit the payment of such contractual obligations.

It is of the utmost importance that we have increased emergency unemployment benefits for the period immediately ahead, the transsition to peacetime operations. These benefits should provide minimum maintenance, full duration for the period of unemployment, and complete coverage of the working population. Title V of the Kilgore bill provides the minimum standards which we would endorse. Labor does not consider unemployment benefits any substitute for jobs, but in the period ahead there will be temporary unemployment of those transferring from war jobs to peacetime employment even at high production levels. We repudiate any proposals for dropping the American war worker or serviceman into the relief brackets, and insist on adequate benefit payments.

The Senate has already passed legislation to provide service men and women with emergency unemployment compensation benefits, which are to be provided by Federal payments which represent increases in most States of the sums ordinarily available for workers. The duration of benefits is also greatly extended. Because of the emergency character of post-war unemployment it is only proper that the Federal Government should supplement State benefit payments for a stated period during and after the end of hostilities. If this is done, Federal standards should be included in the emergency legislation. (The C. I. O. is already on record as supporting the WagnerMurray-Dingell bill, but we feel that a section should be included in this bill to provide emergency unemployment compensation.)

No difference in unemployment compensation benefits should be permitted between civilians and service men and women. Moreover, these payments should be administered by the same agency, as I understand General Hines has already declared.

The C. I. O. has proposed an additional measure to cushion the transition and to establish a floor under community living wherever our members are organized. The United Steelworkers have taken the lead in this demand for a guaranteed weekly and annual wage. This is their contribution to economic security through full employment.

Such a demand can be met if the industry will produce on a regularly planned basis during peacetime as it is doing in the war. Moreover, in the case of the steel industry and indeed of practically all the larger firms in America today, refundable Federal taxes provide a backlog to make such guaranteed wages possible.

It is not necessary to elaborate here upon the benefits to the steel communities which would flow from an orderly payment of income to the workers in that industry. The whole community would be established on a new, firm footing, shopkeepers, small businessmen, professional groups, as well as the wage earners themselves.

We do not propose here that the annual wage be enacted into law. That is not our object. We believe it can be secured now in certain industries by collective bargaining, and the Steelworkers' Brief to the War Labor Board Panel includes that demand. We urge it to this committee merely as an example of the approach which Government and industry should accept and encourage as a means of solving our problems of transition.

Only an orderly program, largely voluntary in character, will carry us safely through the transition period. The guaranteed weekly and annual wage is one part of such a program. Congress should endorse it for various reasons, among others because of the public benefit deriving from elimination of unproductive direct relief payments.

The principle which the legislation now before this committee and especially S. 1823, recognizes is the need for sustained economic activity at the highest possible levels. This in turn depends upon placing the Government squarely behind such sustained levels of activity. Indeed, the more the Government succeeds in achieving its goal by merely acting as the intermediary for bringing the various groups in the community together for cooperative action, the less will actual Government intervention be needed.

The less successful the cooperative undertaking, on the other hand, the more will Government have to intervene. This means that heavy unemployment benefit payments, large scale make-work projects and the like will be a confession of failure, not of the Government necessarily, but especially on the part of the dominant industries.

We must recognize now that because of the magnitude of the task ahead, the production-employment board must be prepared with a broader program than is called for at any other moment of time. America's unfilled post-war needs are enormous. Many of them cannot be supplied by the activities of any one corporation or group of corporations, operating for profit. They are essentially needs of the whole community and the program must prepare to supply them as such.

These will include reforestation, soil and water conservation, prevention of stream pollution, regional flood control and power projects, highway construction, airport, and other projects. Our communities likewise call for a comprehensive program of urban decentralization, rehousing, and reconstruction to provide good shelter in pleasant environment for all groups. Private firms have their place in both planning and executing these programs but the major responsibility is public.

To accomplish these and other tasks which lie ahead we shall need a fiscal policy which will strengthen our full employment program. This means promoting the constant circulation of purchasing power. Only by such means can we relieve the burden of servicing our war debt. The higher the national income, the lighter the debt burden.

The war has seen the underwriting by the Government of extension of credit to war producers. The role of the banks has actually increased during the war, because of this underwriting. There are certainly lessons to be learned from this during the post-war period, especially in the field of foreign trade.

We cannot expect Uncle Sam, however, to prolong the demand for war goods, and in fact the decline in Government spending has already begun. For 4 years the effective demand from the Federal Government for all that war industry could produce has sustained an enormous boom, and brought us to our current unprecedented levels of production.

In the transition period ahead we shall need an effective substitute, and to carry this load we propose the passage of a comprehensive bill to create a production-employment board in an office of war mobilization and adjustment. We would also suggest modifying S. 1823