promptly and on a liberal scale, both employer costs of production and governmental outlays would rise substantially. The report passes over lightly the question of how such increases would affect business profits or the Federal budget or the general price level. I find this question very troublesome at the present time. The deterioration of profit margins during the past decade is already a serious obstacle to achieving a high rate of economic growth. The protracted rise of the price level has already put severe pressure on our balance of international payments. This year's projected rise of Federal cash outlays already exceeds the increase of any peacetime year in our histody and, the international situation being what it is, military expenditures may soon need to be still larger. In view of these facts, unless great caution is exercised in pursuing programs that raise costs of production or public outlays, we may find that economic growth is curbed, that confidence in the dollar is weakened, and that our international political position is undermined.

(4) Apart from these dangers, the report fails to analyze how its recommendations would affect the volume of unemployment itself. The report seems to call not only for liberalizing the unemployment insurance system, but also for extending private supplements to unemployment insurance, for providing public subsistence payments to workers who undergo retraining, for lowering the age at which displaced workers can qualify for social security, and for using public funds to aid unemployed workers in moving to areas where jobs can be found. I deem it a duty to point out that if all these measures were adopted in quick order and on a substantial scale, some individuals who now are outside the labor force will see an advantage in entering it, while there will be others who, having quit or lost their jobs, will be tempted to take more time in settling on new ones. In other words, unless great care and caution are exercised in implementing the Committee's recommendations, the end result may well be the social misfortune of permanently higher unemployment.

(5) In large part, the shortcomings of the report are traceable to the pessimistic assumption on which it seems to proceed-namely, that there is a serious possibility that our Nation's economic progress will prove insufficient to provide jobs for all those who are able and eager to work. I have greater faith in our Nation's future. A tremendous expansion of prosperity lies within our power. The degree to which we attain it will mainly depend; first, on how much work people care to do; second, on how productive they wish to be; third, on how earnestly we pursue public policies to stimulate new, creative, and more efficient economic activities by business enterprises. If the report had started from this broad but fundamental premise, it would have dealt more constructively with the economic and human problem of unemployment.

COMMENT BY HENRY FORD II

I share wholeheartedly the concern over unemployment expressed in this report, and I applaud this Committee's desire both to speed industrial progress and to spread its human benefits more widely.

Few things are as costly to our Nation, or as crushing to the human spirit, as lack of work for those who are willing and able to work.

Because I hold these views so strongly, I feel compelled to state my belief that this report does not really get to the heart of the matter.

Its major premise is the assumption that automation and technological advance are in and of themselves significant causes of unemployment-an assumption that neither history nor an analysis of current unemployment supports. Technological advance has been with us for many generations. But, popular beliefs to the contrary, technological advance has not been accelerating. Figures from the Bureau of Labor Statistics show, for recent years, an increase in productivity well below the average rate for the postwar period and not much different from the average rate since 1909.

Moreover, the factual evidence strongly indicates that, while automation displaces some individuals from the jobs they have held, its overall effect is to increase income and expand job opportunities. History teaches us that, by and large, workers displaced by technological advance have moved rapidly into other employment, ultimately to better paying jobs. This is why we have had rising personal incomes, rather than mass unemployment, as new technology has come into use and productivity has increased.

As Solomon Fabricant has recently pointed out (in his introduction to John W. Kendrick's "Productivity Trends in the United States"):

"Better-than-average increases in output were usually accompanied by betterthan-average increases in employment of workers and tangible capital, despite

the more rapid rise in productivity. Correspondingly, less-than-average increases in productivity were usually accompanied by less-than-average increases (or even decreases) in output and in the use of labor and capital resources * * *. No one concerned with the rise and fall of industries, or to single out a currently discussed problem-with the effects of 'automation' on employment, may ignore these basic facts."

When the economy is prosperous, displaced workers quickly find new employment. This is illustrated by the movement of workers off farms and into industrial employment when times are good, and the slowdown in this movement when times are bad.

The Committee has recognized that the general problem of unemployment is the key problem, but its recommendations are concerned mainly with the important but secondary matters of retraining and mobility. A good employment service and unemployment compensation facilitate the transfer from one job to another, but these measures, even if accompanied by massive retraining, relief, and other social programs, will scarcely make a dent in unemployment when economic conditions are poor.

If, therefore, we would help persons displaced by technological advance, we must focus our attention not on relief or even training-though these, properly conceived and administered, will help-but on creating new jobs for people who seek them and can perform in them.

When wages rise faster than productivity in the economy, costs will rise and then either prices will go up or profits will come down-or both will happen. If profits come down, then incentive to save and to invest savings in new, jobcreating plants, enterprises, and industries must suffer. Moreover, unless inflationary measures are taken to support the higher wage, cost, and price levels, demand will not be adequate to maintain production and employment. when the integrity of the dollar is at stake, inflationary measures cannot be taken without calamitous results.

And,

We must find ways consistent with a free economy to keep wages and other costs from causing either unemployment or inflation.

I regret that the report does not make this focal problem the primary target of its comments and recommendations. For, when we have found and placed in operation those policies and practices that can keep costs from rising and forcing us into either unemployment or inflation, we will have done much more than could be accomplished by all other measures combined.

The recommendations in this report are concerned mainly with ways of preventing and relieving technological displacement. I personally endorse many of them, and the company with which I am associated has long followed practices similar to many of those recommeded in the report.

Nevertheless, I have the following general reservations about the character of the recommendations:

First, they cannot solve the problem of mass unemployment because they are directed primarily at helping people to find jobs-not at the basic need for more jobs.

Second, the massive program of public and private actions called for may have unexpected consequences that the Committee has not been able to evaluate. Indeed, I believe that the knowledge and experience necessary to evaluate this sweeping program do not now exist, and that it is therefore inappropriate and unwise for this Committee to place its stamp of approval upon such a program. For example, greatly expanded Federal assistance could very well destroy incentives that stimulate private economic activity and generate individual initiative.

Third, the endorsement of comprehensive, economy-wide programs in very general terms diverts attention from and complicates the search for carefully selected measures to meet particular problems. For example, I believe that the main result of a large-scale, nationwide program to retrain the unemployed might be to impede the development of useful local programs carefully tailored to existing job opportunities and the needs and abilities of individuals.

In addition to these general reservations, I have misgivings about some of the specific recommendations.

With respect to unemployment compensation, I believe that duration, coverage, and amount of benefits must be increased where they are inadequate. In addition, safeguards to protect against abuses should be strengthened. I do not endorse Federal standards, but believe the States should continue with responsibility for fitting their particular systems to their own conditions and needs.

I agree that in the main the recommendations for improving our school systems are good. In many areas and localities, however, the most urgent need is not more money but greater public concern with what is taught in our schools.

Arbitrarily shortening the workweek in order to decrease unemployment would be a confession of defeat. Not only a poor remedy, it is also a harmful one; for it would retard the growth needed for the safety and welfare of our Nation at this point in its history. We can and should look forward to normal increases in our leisure time, but they must come as our growing economy can afford them and not as expedient solutions to unemployment problems.

In summary, I find some things in this report of which I approve, and much of which I disapprove. Its goal of making certain that high employment accompany technological improvement and increasing efficiency has my full support. However, I believe that the general direction of its recommendations is not well calculated to achieve this goal. I believe, too, that the report's basic assumption concerning the relationship between technological advance and unemployment is in error.

Therefore, I feel it necessary to say, with reluctance, that I cannot concur in this report.

APPENDIX I

EXECUTIVE ORDER NO. 10918, ESTABLISHING THE PRESIDENT'S ADVISORY COMMITTEE ON LABOR-MANAGEMENT POLICY

By virtue of the authority vested in me as President of the United States, it is ordered as follows:

SECTION 1. There is hereby establishedt he President's Advisory Committee on Labor-Management Policy (hereinafter referred to as the Committee). The Committee shall be composed of the Secretary of Labor, the Secretary of Commerce, and 19 other members who shall be designated by the President from time to time. Of the 19 designated members, 5 shall be from the public at large, 7 shall be from labor, and 7 shall be from management. The Secretary of Labor and the Secretary of Commerce shall each alternatively serve as Chairman of the Committee for periods of 1 year, the Secretary of Labor to so serve during the first year following the date of this order.

SEC. 2. The Committee shall study, and shall advise with and make recommendations to the President with respect to, policies that may be followed by labor, management, or the public which will promote free and responsible collective bargaining, industrial peace, sound wage and price policies, higher standards of living, and increased productivity. The Committee shall include among the matters to be considered by it in connection with its studies and recommendations (1) policies designed to ensure that American products are competitive in world' markets, and (2) the benefits and problems created by automation and other technological advances.

SEC. 3. All executive departments and agencies of the Federal Government are authorized and directed to cooperate with the Committee and to furnish it such information and assistance, not inconsistent with law, as it may require in the performance of its duties.

SEC. 4. Consonant with law, the Department of Labor and the Department of Commerce shall, as may be necessary for the effectuation of the purposes of this order, furnish assistance to the Committee in accordance with section 214 of the act of May 3, 1945, 59 Stat. 134 (31 U.S.C. 691). Such assistance may include detailing employees to the Committee, one of whom may serve as executive officer of the Committee, to perform such functions, consistent with the purposes of this order, as the Committee may assign to them, and shall include the furnishing of necessary office space and facilities to the Committee by the Department of Labor. JOHN F. KENNEDY,

THE WHITE HOUSE, February 16, 1961.

APPENDIX II

STATEMENT BY THE PRESIDENT UPON ISSUANCE OF EXECUTIVE ORDER ESTABLISHING THE PRESIDENT'S ADVISORY COMMITTEE ON LABOR-MANAGEMENT POLICY, FEBRUARY 16, 1961

I am today issuing an Executive order establishing the President's Advisory Committee on Labor-Management Policy. The Committee is composed of the Secretary of Labor, the Secretary of Commerce, and 19 other members from the public, labor, and management. The Secretary of Labor and the Secretary of Commerce will alternate as Chairman of the Committee for periods of 1 year, the Secretary of Labor serving during the first year.

The purpose of this Committee is to help our free institutions work better and to encourage sound economic growth and healthy industrial relations. The Committee will study, advise me, and make recommendations with respect to policies that may be followed by labor, management, government, or the public which will promote free and responsible collective bargaining, industrial peace, sound wage and price policies, higher standards of living and increased productivity. The Committee has been directed to include among the matters to be considered by it: (1) policies designed to insure that American products are competitive in world markets, and (2) the benefits and problems created by automation and other technological advances.

I deem this a most important Committee. It will bring to the great problems in the fields of collective bargaining, industrial relations, wage and price policies, and productivity the experience and wisdom of labor, management, and public experts in these fields.

It is my hope that the Committee may help restore that sense of common purpose which has strengthened our Nation in times of emergency and generate a climate conducive to cooperation and resolution of differences.

It is my hope that the advice of this Committee will assist the Government, labor, management, and the general public to achieve greater understanding of the problems which beset us in these troubled times and to find solutions_consistent with our democratic traditions, our free enterprise economy, and our determination that this country shall move forward to a better life for all its people.

**** It is gratifying that I have been able to obtain the participation of such outstanding persons in the Committee's work. I greatly appreciate the willingness of these public-spirited citizens to serve their country in this way. The fact that such highly qualified persons have agreed to be members of this important Committee augurs well for its success.

VIEWPOINT OF INDUSTRY

Senator COTTON. Of course, industry itself would be human motives being what they are more interested in automation rather than finding the machine that can do the work of 12 rather than the other 11.

Secretary GOLDBERG. I think there needs to be an understanding on this.

Senator COTTON. I would like to ask you a selfish question. I was much impressed by the statement of my distinguished colleague from West Virginia. Do you as a Department have people to send out to visit communities in which there has been a sudden and general catastrophe in matters of employment and do you study and counsel what can be done?

Secretary GOLDBERG. Yes, sir; we do.

Senator COTTON. Before that is done, do you have to have the request or the approval of State departments of labor or anybody? Secretary GOLDBERG. While we have the authority to go in under the laws of Congress, we generally ask for an invitation and the cooperation of the State and generally the congressional people concerned.

CLOSING OF INDUSTRIAL PLANT IN NEW HAMPSHIRE

Senator COTTON. I was going to say that right this week my own local community is faced by the closing of the principal industry in it. Men didn't even get their last paycheck, and there are 370 people out in a community of less than 10,000 people. If you had a request from me would you have someone to send up and look into that situation? Secretary GOLDBERG. I certainly would. I regard that as part of our duty.

Senator COTTON. I will see that you get the request and I will publish the requests in the papers in my home State to show that I am on the job, too.

Secretary GOLDBERG. You will find, Senator, that your request will be promptly acted upon.

Senator HILL. I must say, Mr. Secretary, we were very much impressed with this report that Senator Byrd brought us about the fine accomplishments in West Virginia of the Department under your very able leadership, and we certainly want to thank you for your testimony here this morning. I have had the pleasure of hearing you on a good many occasions as you know, and you always bring us a most informative statement and one that is presented in a most intelligent manner. This morning you have brought us a most helpful and a very fine presentation and we certainly thank you.

Secretary GOLDBERG. Mr. Chairman and gentlemen of the committee. I thank you very much. I thank Senator Byrd for his very fine remarks.

Senator HILL. I am advised that Colonel Glenn has just gone into his second orbit just as was planned and just as scheduled. I know that will be very gratifying to all of us here.

PRESIDENT'S COMMITTEE ON EMPLOYMENT OF THE HANDICAPPED

STATEMENT OF MAJ. GEN. MELVIN J. MAAS, USMCR, RETIRED, CHAIRMAN

GENERAL STATEMENT

Senator HILL. We are delighted to have with us at this time the Honorable Melvin J. Maas, Chairman of the President's Committee on Employment of the Handicapped. I will strike the word "old" and say "ex" Marine with a very wonderful record in the Marines with service to our country. He has done a magnificent job on the President's Committee on the Employment of the Handicapped and we certainly welcome you this morning.

General MAAS. Thank you very much, Mr. Chairman.

Having distributed to the members of the subcommittee a prepared statement, I will not read through the prepared statement.

JOB OPPORTUNITIES FOR MENTALLY

HANDICAPPED

There are just a few points that I would like to emphasize. One is that the President gave us a valentine, the President's Committee on the Handicapped, on February 14 by signing a new Executive order which carried out one of the things you have mentioned to me 2 or 3 or 4 different years I have testified and that is "why we limited