The testimony is fairly convincing that stabilization can be accomplished in industries which were once regarded as being seasonal in their every aspect.

Fifteen bills dealing with unemployment insurance have been introduced in six State legislative bodies since 1915, and none of them has been successful. Probably the so-called Huber bill, introduced in the Wisconsin Legislature, came nearest to adoption, and its author, Dr. Commons, advised your committee that it "was as dead as anything could be."

In many industries, as the evidence will show, a reserve fund for unemployment which offers protection in the form of insurance has been adopted. The testimony of Dr. Commons as to the practice in the Chicago clothing industries is important as well as the reports of the industrial relations counselors.

Whatever legislation is considered on this subject, your committee is convinced, should be considered by the States. The States can deal with this subject much better than can the Federal Government. But in any discussion of legislation, your committee thinks consideration should be given to the arguments of Dr. Commons that the plan of reserve funds or insurance confined to one company or plant rather than to all industries, should be adopted.

Dr. Commons stresses the fact that the insurance idea as practiced in the Chicago market follows the experiences gained from the adoption of disability compensation plans in various States. Employers were moved to adopt every precaution against accidents when they realized that accidents were costly under the plans for disability compensation. In the same way, employers and employees will be more likely to fight the causes of unemployment within their industries when they have seen tangible evidence of the cost of unemployment, according to the arguments advanced in this evidence. On the other hand, Dr. Commons insists that, "the paternalistic and socialistic" schemes adopted in foreign countries, penalize success in that the employer who stabilizes his employment does not escape the burden of paying for unemployent in other industries.

Your committee cannot leave this subject without suggesting that consideration be given to the benefits of stabilized production-the finer morale of the workers, the better workmanship, the increased production, the lowered costs of production, and the elimination of the cost of training the unskilled recruits. The testimony proves conclusively that the workers who cooperate with their employers and who are given a chance and encouraged, contribute tremendously to the success of the enterprise.

(D) CURTAILED PRODUCTION, CONSOLIDATION, AND ECONOMIC

RECONSTRUCTION

This subject covers so vast a field that it also immediately becomes imponderable. To exhaust it seems impossible. A committee of Congress could proceed with a study on this one phase of the unemploy ment problem and could continue indefinitely.

The general opinion given your committee on this score is that undoubtedly just at this time we are experiencing a program and a

problem which are no different to those occurring since the advent of machines in industry. The difference is, however, that undoubtedly at this time the developments are far more extensive and far more intensive than they have ever been in our history.

Of course there is going to be individual suffering, for example, the suffering of the musician who discovers that a machine is forcing him to forgo his life work and to seek employment in new fields. How to answer the many questions which arise with every minute of consideration for this topic is what makes the subject imponderable. The printed evidence contains suggestions of the shortened working day and the reduced working week, has contentions that new industries are arising constantly out of the graves of departed trades and the workers are thus absorbed. Your committee is convinced, however, that it is the duty of society to provide for these workers during the period of readjustment, as many employers are now doing.

Conflicting opinions are offered as to the effect of the vast consolidations of wealth. One side contends that the day of the small businessman is passing, that the individual merchant can no longer compete with the national chain, while another will contend that no nationally organized chain can overcome the personal effort put into a business by the individual businessman.

However, in the time your committee had for this subject no opportunity presented itself for the consideration of legislation on this subject, and your committee has nothing to suggest at this time.

(E) THE PLANNING OF PUBLIC WORKS WITH REGARD TO STABILIZATION

Another committee of Congress, the Committee on Commerce, has considered this subject and has reported legislation which is now before the Senate. The legislation is commonly referred to as the "Jones prosperity reserve bill." Your committee would suggest that the evidence submitted with reference to that bill should be read in connection with this study.

There is some testimony of interest on this subject in these hearings, but your committee did not devote a great deal of time to this topic, because no one disagreed with the suggestion that the Government and all other public agencies should so order their public works that they would offer a buffer in time of unemployment.

The evidence is very clear that the Federal Government may set a valuable example to the States in the adoption of a practical scheme for the planning of public works. Of course, the States and the other divisions of Government will have the greatest opportunity to provide this buffer because the expenditures by the Federal Government for public works are not large as compared with the expenditures by the States and other civil divisions. There should be no delay upon the part of the various governments, Federal, State, city, and other minor subdivisions in the adoption of such plans.

There are minor objections to this scheme but your committee is convinced they can be overcome without difficulty.

(F) THE FEASIBILITY OF COOPERATION OF FEDERAL, STATE, AND PRIVATE AGENCIES WITH RESPECT TO ALL THESE SUBJECTS RELATED TO THE UNEMPLOYMENT PROBLEM

Your committee has discussed this phase of the survey as it has proceeded with this report and there is little to add. In general, it is the opinion of your committee that the responsibility should be kept as "close to home" as is possible. Private agencies should make the first effort and should do everything they can for themselves. The States should contribute only that service that private agencies would find impossible and the Government should merely coordinate the work of the States and supply any effort which is entirely and purely of national character.

Your committee will now endeavor to sum up the suggestions and recommendations:

1. Private industry should recognize the responsibility it has to stabilize employment within the industry. The Government should encourage this effort in every way, through sponsoring national conferences, through publishing information concerning the experience had by industries in this work, and through watching every opportunity to keep the thought of stability uppermost in the minds of employers.

2. Insurance plans against unemployment should be confined to the industry itself as much as possible. There is no necessity and no place for Federal interference in such efforts at this time. If any public insurance scheme is considered, it should be left to the State legislatures to study that problem.

3. The States and municipalities should be responsible for building efficient, unemployment exchanges. The Government should be responsible for coordinating the work of the States so as to give a national understanding of any condition which may rise and so as to be able to assist in any national functioning of the unemployment exchanges.

4. The existing U.S. Employment Service should be reorganized, and every employee should be placed under civil service.

5. Efforts should be made to provide an efficient system for obtaining statistics of unemployment. The first step should be taken by the Bureau of the Census in 1930, when the Bureau should ascertain how many were unemployed as of a certain date and how many were not seeking employment and yet were unemployed as of that date.

6. The Government should adopt legislation without delay which would provide a system of planning public works so that they would form a reserve against unemployment in times of depression. States and municipalities and other public agencies should do likewise.

7. Further consideration might well be given to two questions, the effect had on unemployment by industrial developments such as consolidation of capital, and the necessity and advisability of providing either through private industry, through the States, or through the Federal Government, a system of old-age pensions.

SUMMARY OF AN INVESTIGATION OF UNEMPLOYMENT BY THE BROOKINGS INSTITUTION

(Statement by ISADOR LUBIN before the Senate Committee on Labor and Public Welfare)

The evils of unemployment have been too often heralded to need elaboration here. The reduction or entire loss of family incomes with the consequent expenditure of family savings, the almost inevitable piling up of debts, the loss of physical possessions, and the frequent dispossession of families from their homes have all been too well portrayed in the past to need comment here.

Reports of the Department of Labor, of social agencies, of trade unions, of mayors' committees, and the testimony of court officers, personnel directors, and leaders of industry bear testimony to the deteriorating effect of unemployment both upon workers and industry. Nor need one do more than refer to the incalculable losses which results from the workers being forced into lower standards of living, from the impairment of health and vitality, and from the general lowering of the morale and self-respect of the worker as a result of unemployment.

Without exception, it was the opinion of all who testified before your committee that unemployment is primarily a problem of industrial organization nad not one of individual character. No impartial observer of industry would today attribute the existence of any but a relatively small share of unemployment to the workers themselves. The view widely held in the past that the unemployed are themselves to blame for not having jobs, and that all who really wanted work could find it if they tried hard enough, has long been discarded. Recurrent business depressions with as many as 25 percent of the able-bodied workers deprived of the means of a livelihood have shown the fallacy of the assumption that the laborer is at such times responsible for his plight.

Although the dramatic spectacle of millions of unemployed working the streets of our industrial communities during recurring periods of business depression temporarily makes vivid the enormity of the problem of unemployment it must be borne in mind that there are millions of workers to whom the loss of employment is a spectre which threatens during every year of their working existence. Unemployment is a persistent factor in modern economic life. The industries and plants which can give regular employment to all of their laborers, even in times of prosperity, are few indeed. The records of the State of Massachusetts for the years 1908 to 1922, based on returns from labor organizations, show that on the average 7.7 percent of the membership of the trade unions reporting were involuntarily out of employment, due to lack of work, during these years. An investigation of the extent of unemployment in the urban centers of the United

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States from 1902 to 1917 places the minimum number of unemployed throughout this period of 15 years at 1 million-the average proportion of workers without work fluctuating from 16 percent of the total possible workers in 1915 to 4.7 percent in 1917. And these figures incidentially do not include any of the agricultural workers of the country. A statement published in the press of September 29, 1924, by the Russell Sage Foundation estimated the extent of unemployment in the United States in any one year as running from the minimum of 1 million to a maximum of 6 million, depending upon the general industrial conditions prevailing at the amount.

The committee on elimination of waste in industry of the Federated American Engineering Societies in its report, "Waste in Industry, published in 1921, to which the Honorable Herbert Hoover wrote the forword, further substantiates these facts. It states: "In the best years, even the phenomenal years of 1917 and 1918 at the climax of wartime industrial activities, when plants were working to capacity and when unemployed reached its lowest point in 20 years, there was a margin of unemployment amounting to more than a million men. This margin is fairly permanent; seemingly 1 or more wage earners out of every 40 are always out of work."

Unemployment, as was aptly stated to your committee, may be considered both as a price society must pay for progress, and as a price to be paid for decay. It may be the result of efficient management and it may be the result of inefficient management. Many of the unemployed, in other words, are today out of work because the progress of modern industry, the development of mechanical processes, and the revolutionary changes in methods of manufacture make them no longer necessary for the production of the goods we need. Others, on the other hand, are thrown out of work because of the decay of industries which formerly required them. This is particularly true of the raw-material industries, when they find their source of supply diminishing as well as of industries such as cotton hose and corset manufacturing, where a change in the consumer demand eliminates in turn the demand for the services of labor.

Thus, also, the efficient executive by eliminating wasteful processes or budgeting his output frequently finds that he can secure the same output with fewer workers regularly employed throughout the year than with his former labor force intermittently employed. Here, stabilization leads to regular employment for some and no employment for others. The inefficient executive, on the other hand, unable to meet the competitive demands of the market also adds to the army of the unemployed; bandruptcy and shutdown having the same effect upon the dispossessed worker as displacement by machinery.

Unemployment cannot be considered as a malady which can be attacked with a single remedy. Such unemployment as exists at any one moment may be due to any number of causes, and an attack must be made upon those forces which can at the time be segregated. A considerable amount of unemployment is recurrent. It occurs at more or less regular intervals. Such, for example, is unemployment due to general business depressions and unemployment due to the seasonal ups and downs of industry. Some unemployment is persistent. It is always with us. Thus, men are daily being thrown out of work because of technological changes, financial failures, the movement of plants