lessness which attended mass unemployment in the great depression. This is followed by a technical by a readable discussion of the then current debate over technological unemployment. It was authored by Alvin II. Hansen, who later became one of the first architects of full employment policy proposals. The article by Julius Barnes is a view of unemployment as seen from the "businessmen's" point of view.

**** If then, I am right ***" said Keynes in 1931, 5 years before publication of his General Theory, "*** the fundamental cause of the trouble is the lack of new enterprise due to an unsatisfactory market for capital investment**** It was the investment function which was to play a central role in the General Theory and the Keynesian Revolution. Richard A. Lester describes the futility of the generally held business view that price stability would restore confidence and start the Nation toward prosperity again while at the same time workers were being laid off and incomes were declining. E. Wight Bakke describes the experience of a typical individual actively seeking work in 1933. “The Hungry City" was written by Joseph L. Heffernan, then mayor of Youngstown, Ohio, and is an account of the frustrations encountered by a public official attempting to deal with the problems of mass unemployment and the timidity in seeking new solutions. Part I of this series concludes with a look backward at 1929 by John Kenneth Galbraith from 1954.

By way of prefacing part II of this volume, which deals with depression programs and proposals, a chronology of congressional efforts to stabilize employment before the depression has been included. Edward Eyre Hunt, writing in 1929, describes President Hoover's recognition of unemployment as a national problem since 1921, and his concern about it. Senator James Couzens, of Michigan, reviews the hearings on unemployment before the Senate Education and Labor Committee in 1929 and the recommendations based thereon. statement by President Hoover in March 1930 is famous for the expressed conviction that the worst effects of the collapse were over. "Prosperity cannot be restored by raids upon the Public Treasury," stated President Hoover at the end of 1930 in response to efforts in Congress to increase relief measures. The Congressional Digest summarizes the Hoover unemployment program.

The

"What shall we do about unemployment?" is the editorial query of the Nation magazine in December 1930, and recommends enactment of legislation sponsored by Senator Wagner of New York to establish a national unemployment insurance system and a national public employment service. "Responsibility in Albany" affords a look at Roosevelt as Governor of New York, those who surrounded him, and the thinking of the team that was to enter the White House in March 1933. H. R. Mussey reviews the three proposals being considered to deal with unemployment in 1930. Charles A. Beard, prolific observer of the American scene, proferred a "5-year plan" for the country in mid-1931. President Hoover's message to Congress at the end of that year claimed that data from the Public Health Service showing declines in sickness and mortality rates proved that the unemployed were being "protected from hunger and cold;" it protested further involvement of the Federal Government, and expressed faith in the ability of the economy to recover because it had always done so in the

past. Sumner Slichter describes the extent of joblessness in 1932 and the size of the relief burden. He also discusses the weakness of public works efforts, the futility of attempts to "spread work" among 11 million unemployed and a host of other programs and proposals.

The Agenda of Reform reviews variations in thinking of leading economists in the early thirties, some of whom were to become influential in the "New Deal." Gifford Pinchot demands that tax rates on upper income brackets be increased to provide funds for Federal relief. Senator Robert F. Wagner discusses the need for a compulsory national unemployment insurance program and reviews the extensive development of such programs in other countries. Isador Lubin reviews the testimony of witnesses on questions of economic planning before the Senate Committee on Manufactures. A bill, sponsored by Senator Robert F. LaFollette, Jr., proposed creation of a National Economic Council, similar in function to the present Council of Economic Advisers. Frances Perkins, who was to become Secretary of Labor in the Roosevelt Cabinet, poses unemployment insurance as an alternative to "the dole." A debate over the merits of Senator Wagner's employment service proposals is reproduced as it appeared in the Congressional Digest in January 1931. Mauritz A. Halgren gave another view of relief needs and responsibilities.

By March 1933, the depression had persisted for more than 3 years. According to estimates made later, joblessness rose from 1.6 million persons in 1929 to 12.1 million in 1932. E. Wright Bakke describes the early experience and impact of unemployment relief efforts. Covington Gill describes the direct relief program under the Federal Emergency Relief Administration. Otto Nathan reviewed the NRA in the context of what it might contribute to long-run stabilization. In "Jobs for All," a New Republic article appearing in July 1935, Jonathan Mitchell gives a critical appraisal of employment relief programs.

"The year 1935 marked a watershed," wrote Arthur M. Schlesinger, Jr., "... the strategy of the New Deal experienced a subtle but pervasive change." In "The Ideology of the Second New Deal," he describes the many facets of that change, and the inroads that Keynes was making in the prevailing concepts of political economy. "Roosevelt's Tree Army" is a discussion of the Civilian Conservation Corps. "Can We Employ the 8 Million?" is really a debate over whether or not industry could recover unaided. With unemployment at 8 million John G. Jones cites the "unfilled need for nearly a million skilled workers." The rejoinder states that industry cannot possibly cope with the situation alone, and suggests that one reason for the shortage of skilled workers is that too many people are going to college. Emerson Ross examines the unemployment situation in early 1937 and its implications for future programs. In "Unemployment and Recovery," Edwin E. White looks at the need for skilled workers and calls for a "revival of apprenticeship." Sumner Slicher examines the recovery policies of the New Deal. The wait for the economy to right itself had thus far been in vain. President Hoover was convinced that government intervention would prevent recovery, intensify unemployment, and that relief would demoralize workers. On inauguration day "the fog of despair hung over the land." In Prologue, 1933, Arthur M. Schlesinger describes the mood of the country and the ride

of Hoover and Roosevelt from the White House to the Capitol. "This Nation asks for action, and action now," stated Roosevelt in his first inaugural speech. "Our greatest primary task is to put people to work." The "New Deal" had commenced.

The "Blue Eagle," as the National Recovery Administration became known, was one of the early programs of the New Deal. An early appraisal of its effectiveness was undertaken by J. M. Clark, professor of economics at Columbia University.

Dean Brimhall reviews the accomplishments of the WPA. Paul Webink's article is an overview of unemployment and New Deal programs from the vantage point of mid-1940. The volume concludes with Robert L. Heilbroner's classic and uniquely literate treatment of Lord Keynes.

The material in this and subsequent volumes dealing with the history of employment and manpower policy was compiled and organized by Frazier Kellogg, staff economist of the subcommittee. The task of gathering material contained herein was made eminently more efficient by the able assistance of Peter Sheridan and his staff at the Legislative Reference Service in the Library of Congress.

JOSEPH S. CLARK, Chairman, Subcommittee on Employment and Manpower, Senate Committee on Labor and Public Welfare.

PART I. THE CRASH AND DEPRESSION

[From Survey, Apr. 1, 1929]

RECENT EMPLOYMENT MOVEMENTS

(BY SUMNER H. SLICHTER)

For the first time in the history of this rapidly growing country, employment in our two largest branches of industry-farming and manufacturing—is manifesting a definitely downward trend. The drop has not been a momentary slump such as business depressions have often produced. It is a longtime trend which has been going on in agriculture since about 1910, and in manufacturing since 1920, and which may continue for some time to come. In addition, there has been a substantial decrease in the number of railroad workers since 1920, and employment in mining has remained substantially stationary.

The greatest drop has occurred in farming. The agricultural census of 1925 indicates that farm population diminished by 2,500,000 between 1920 and 1925, and the Department of Agriculture estimates that there was a further fall of nearly 1,300,000 between 1925 and 1928. Not all of the persons who left the farms were employed in agriculture, but if the proportion so employed was the same as in the total farm population of 1920 (admittedly a conjectural assumption), then there has been a drop of approximately 1,200,000 in agricultural employment. The decrease in factory workers between 1919 and 1925 was over 800,000. The change since 1925 is uncertain, but the index of the Bureau of Labor Statistics indicates that factory workers in 1928 were 200,000 less numerous than in 1925 (assuming that the bias in the index, due to its failure to take account of new plants, has been the same since 1925 as it was between 1923 and 1925). The decrease in railroad employment since 1920 has been about 300,000 (exclusive of the drop in the shop forces which is counted in the decrease in factory employment). In all, there has been a decrease of about 2,300,000 during the last 8 years in the number of persons employed in four major branches of industry-farming, manufacturing, railroading, and mining.

Between 1920 and 1928, the population of the country increased by 13,600,000. Were it not that employment in many branches of industry has grown at a spectacular rate, we should undoubtedly be confronted with unemployment of unprecedented volume. But between 1920 and 1927 the number of workers in the building trades increased by possibly 300,000. The more than two-fold gain in automobile registrations has led to an increase of roughly 750,000 persons engaged in selling and servicing automobiles and of more than 500,000 in the number of hotelworkers. Public-school teachers increased by 135,000

between 1920 and 1926, and telephone employees by over 78,000 between 1920 and 1927. L. B. Mann estimates that there are now 100,000 more life insurance agents than in 1920. Bobbed hair and a substantial rise in the purchasing power of salaries and wages have produced a boom in the barbering and beauty-parlor businesses and an increase of nearly 200,000 in the number of barbers and hairdressers. Finally, the students in secondary schools and colleges have increased from 3,100,000 in 1920 to nearly 5,200,000 in 1926, or 67 percent. Whether or not the net result has been a growth in unemployment no one knows, because there are too many uncertain items on each side of the balance sheet. One thing, however, is certain-occupational shifts of almost revolutionary size and rapidity have been occurring. These shifts are the outstanding characteristic of the present labor market. What causes lie behind them and what problems of public policy do they create?

The recent shrinkage in agricultural, factory, and railroad employment and the stationary employment in mining have not been caused by a drop in production. Agricultural output it is true, was slightly less than in 1927 than in 1920 but factory production increased 22 percent, the output of freight-ton-miles by the railroads about 4 percent, and the output of mines about 20 percent. The growth of physical output in the face of shrinkage or stationary employment has led many persons to attribute the displacement of men to labor-saving methods and machines. Fewer workers are said to be needed because each man is producing so much more. It is pointed out, for example, that whereas the average output per factory worker actually diminished by about 5 percent between 1909 and 1919, it increased about 30 percent between 1920 and 1927.

But this explanation is too simple to fit the facts. In the first place, in neither mining nor railroading has production per employee grown so rapidly since 1920 as it did during the decade ending with 1919. Yet between 1910 and 1920, the number of mine workers and railroad workers increased. In the second place, the shrinkage of employment in manufacturing has occurred to a great extent in industries which have suffered from contraction of markets rather than in those in which technical change has been most rapid. Ship and boat building, which lost 337,000 men, alone counts for over half the total drop among wage earners in manufacturing between 1919 and 1925. The agricultural depression is mainly responsible for the decrease of employment in the farm-implement and fertilizer industries, and changing fashions and social habits largely account for the fewer workers engaged in the manufacture of buttons, needles, hooks, pins, eyes, snap fasteners, hairpins, combs, jewels, cigar boxes, sewing machines, and sewing-machine cases and attachments. In about 23 industries a major, if not the major, reason for the shrinkage of employment has been contraction in the market. These industries account for about three-fourths of the total drop in factory employment between 1919 and 1925. In the third place, the industries which have been characterized by most revolutionary technical changes do not necessarily employ fewer workers. The petroleum-refining, automobile, pottery, cement, and cast-iron-pipe industries have all experienced radical technical changes during the last 7 or 8 years, but in every instance there has been a substantial increase in their total employment since 1920.