the bill through charity, or through the cost of crime, the payments offer little possibility of any advance for mankind.

The problem should be, and in my opinion will be, solved best by industry itself. There is no panacea for curing this great "blot" on our economic system. The most effective thing that can be done at this time is to arouse the conscience of the employing group. This was well said by Daniel Willard, president of the Baltimore & Ohio Railroad, when he appeared before the committee. He put the whole situation pithily. In the first place, he described the old days of intensive individualism where goods were produced largely in individual shops and by hand labor. Now we have tremendous factories, mass production, wealth pouring from machines and moving on for the benefit of society. If society is going to take the benefits, then society must also accept the burdens, Mr. Willard contended. A man out of work, discontended and suffering, constitutes a danger to society. As he put it, a man is going to steal before he starves, and the word "steal" may cover a multitude of other crimes-crimes perhaps on the part of the man who steals-but crimes of far greater magnitude on the part of that society which permits conditions which induce or invite men to steal. Mr. Willard said:

It seems to me that those who manage our large industries, whatever the character of their output may be, whether it be shoes, steel, or transportation, should recognize the importance and even the necessity of planning their work so as to furnish as steady employment as possible to those in their service. Not only should that course, in my opinion, be followed because it is an obligation connected with our economic system, but I fully believe that such a course is justifiable from the standpoint of the employer because it tends to develop a satisfied and contented body of workmen which of itself would improve efficiency and reduce costs.

Other witnesses, who are employers of men and women, said substantially the same thing-that it is largely a matter of awakening the consciences of those who have the power to assist in solving the problem. This is not to say that employers are to be wholly condemned for the present situation because until their consciences are awakened it is difficult to blame anyone for not acting. To act in a case like this is enlightened selfishness, just as we have seen it proved during the last decade that it is enlightened selfishness to pay adequate compensation to the workers. Nothing, in my opinion, has sustained our prosperity more than the maintenance of adequate incomes to the great masses of our population. Every employer has not seen this or acted on it but such numbers have done so as to constitute a large factor in the prosperous condition of the Nation.

Enlightened selfishness will solve the unemployment problem. It has been generally assumed that only the unemployed suffer as a result of the irregularity of employment. We are becoming more familiar each day with the fact that when large numbers of our people are unemployed it reacts all the way down the line. True, those with adequate incomes do not feel the same physical discomforts that the unemployed do. To help awaken their consciences was largely the hope of the Senate committee. When we can make them understand that they not only owe an obligation to society but that they themselves indirectly are penalized for failure to do so, we will have accomplished much.

Our Senate committee summed up its suggestions and recommendations under six heads:

1. Private industry should recognize its responsibility to stabilize employment within the industry. The Government should encourage this effort in every way. Stabilization has been sought and obtained in various ways. One employer who came before us had placed practically all his workers on a salary basis, has assured them of continuous wages through the year, and has placed upon them the responsibility for making the industry succeed. Others have established reserve funds, and have so arranged them that executives and workers strive to prevent them from being drained. Others have so ordered their production that it is spread throughout the year. Still others have set about the production of articles which are related to their general businesses but which can be produced in periods which formerly were marked by idleness in their plants. Undoubtedly there are too few industrial leaders interested as yet, but there is reason to believe their number will increase, and that simply because of economic pressure. The employer who does not stabilize his employment, and thus retain experienced workmen, is the employer who is going to fail.

The

2. Insurance plans against unemployment should be confined to the industry itself as much as possible at this time. States can deal with this phase of the subject much better than can the Federal Government. But in any discussion of legislation, consideration should be given to the plan of reserve funds or insurance confined to one company or industry rather than to industry in general. Private employers should adopt systems of unemployment insurance and should be permitted and encouraged to adopt the system which is best suited to the particular industry. Dr. John R. Commons, of the University of Wisconsin, stressed the fact that unemployment insurance as practiced in the Chicago clothing market follows the experiences gained from workmen's compensation systems in various States. Employers were moved to adopt every precaution against accidents when under these systems they came to realize that accidents were costly. In the same way, employers and employees will be more likely to fight the causes of unemployment within their industries when they see tangible evidence of the cost of unemployment.

Just as the efficient businessman is stabilizing the return for capital invested, by building up reserves for dividends, so should he establish a reserve for return to labor in the hours of adversity. And why? The testimony from witness after witness stressed the point that there is no suggestion of charity in this effort, no idea of being philanthropic, no desire to have the industry become paternalistic. True, in most cases where the plans were started because an industrial leader became conscious of some of his obligations to society. But there is general accord on the proposition that the plan is "good business"; that it has increased profits. One witness asked, "Shall the businessman who expands his business without consideration for future requirements escape his responsibility?" Morris E. Leeds, of Leeds and Northrup, Philadelphia, testified: "I was convinced a good many years ago of the element of unfairness and social wrong that modern industry had gotten into by freely hiring people and, with equal freedom, firing them."

3. The States and municipalities should be responsible for building up efficient unemployment exchanges. The Federal Government should be responsible for coordinating the work of the States so as to bring national understanding to any condition which may arise and so as to be able to assist the exchanges to function on a countrywide scale. Today, the number of State exchanges is so small that they do not even offer the skeleton of a national system. Thirteen States have no employment offices whatsoever.

4. The existing U.S. Employment Service should be reorganized, and every employee should be placed under civil service. The service should become an organization of experts coordinating the work of the States.

5. Efforts should be made to set up an efficient system for obtaining statistics on unemployment. The first step should be taken by the Bureau of the Census in 1930, when the Bureau should ascertain not only how many are unemployed as of a certain date but how many of these are seeking employment. If we do not have accurate information, we may rest assured we are going to have plenty of inaccurate information. The subject is one which is very articulate in inself. And in this connection it might be well to reflect on the truth that the facts will permit sound thinking and that an absence of facts will produce a condition of fear and panic which may be far more costly to the country than would be the cost of maintaining a system for measuring unemployment.

6. Congress should adopt legislation without delay which would provide a practical scheme for the planning of public works so that these shall form a reserve against unemployment in times of business depression. The evidence is very clear that the Federal Government may set a valuable example to States and municipalities which will have the greatest opportunity to provide this buffer because their expenditures transcend those of the Federal Government. There should be no delay upon the part of the various governments-Federal, State, city, and county-in adopting such plans.

Our committee felt that consideration might well be given to two further questions: The effect had on unemployment by industrial developments, such as consolidations of capital; and the necessity and advisability of providing either through private industry, through the States, or through the Federal Government, for a system of oldage pensions. The man of mature years is not so successful, when competing with a machine, as a younger man.

Some of the experienced witnesses who appeared before our comittee stated that new industries absorb the labor turned adrift by machine development. The automobile, the airplane, the radio, and related industries were suggested as examples. Undoubtedly there is much truth in these statements, but nevertheless we are not relieved of the individual problem. It offers little to the skilled musician to say that he, who has devoted his life to his art, may find a job in a factory where radio equipment is manufactured. Then there is the delay, that inevitable period of idleness when readjustments are being effected, the suffering, the loss, the enforced change in environment. True, this may all be "the price of progress," but society has an obligation to see that all this "price" does not become the burden of the worker.

STATEMENT BY PRESIDENT HERBERT HOOVER, MARCH 7, 1930

The Departments of Commerce and Labor are engaged in the usual monthly survey of business and unemployment, and especially of the results obtained from the measures which have been in progress since the last of November to reduce unemployment and the hardship following the dislocation from the stock exchange crash. The survey is not as yet complete.

There are, however, certain conclusions that are evident:

1. Unemployment amounting to distress is, in the main, concentrated in 12 States. The authorities in the remaining 36 States indicate only normal seasonal unemployment, or that the minor abnormal unemployment is being rapidly absorbed.

2. The low point of business and employment was the latter part of December and early January. Since that time employment has been slowly increasing, and the situation is much better today than at that time.

3. Nationwide response to the request for increased construction and improvement work by public authorities, railroads, utilities, and industries is having a most material effect. Construction contracts in these categories in January and February were from 40 to 45 percent higher than ever known in these months. The total construction work for 1930 seems assured to be larger than even 1929.

4. The undertakings to maintain wages have been held.

5. The amount of unemployment is, in proportion to the number of workers, considerably less than one-half (probably only one-third) of that which resulted from the crashes of 1907-08 and 1920-22, at this period of the situation.

6. Measures taken to ameliorate interest rates have resulted in continuous decrease since December, and money is available at lower rates for business and commercial purposes. One result is an increasing volume of bond issues have been placed for public improvements. Available money for mortgage purposes of homebuilding and agriculture has lagged behind other forms of credit. But a decrease in demands of policyholders for loans on the insurance companies and the action recently taken by the Federal Reserve System should result increased supplies for credit, especially for residential building, which in turn has lagged behind other construction.

7. All the evidences indicate that the worst effects of the crash upon unemployment will have been passed during the next 60 days, with the amelioration of seasonal unemployment, the gaining strength of other forces, and the continued cooperation of the many agencies actively cooperating with the Government to restore business and to relieve distress.

[From the Congressional Digest, January 1931]

EMERGENCY AID FOR EMPLOYMENT

PRESIDENT HOOVER'S PROGRAM

When Congress convened in December, President Hoover, in his annual message, took occasion to review the steps taken by the Executive during 1930 to meet the immediate problem of unemployment in the Nation. This statement not only includes his general program of action for emergency relief, but contains observations on unemployment prevention. The President said:

Economic depression cannot be cured by legislative action or Executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body-the producers and consumers themselves. Recovery can be expedited and its effects mitigated by cooperative action. That cooperation requires that every individual should sustain faith and courage; that each should maintain his self-reliance; that each and every one should search for method of improving his business or service; that the vast majority whose income is unimpaired should not hoard out of fear but should pursue their normal living and recreations; that each should seek to assist his neighbors who may be less fortunate; that each industry should assist its own employees; that each community and each State should assume its full responsibilities for organization of employment and relief of distress with that sturdiness and independence which built a great nation.

Our people are responding to these impulses in remarkable degree.

The best contribution of government lies in encouragement of this voluntary cooperation in the community. The government-National, State, and local--can join with the community in such programs and do its part. A year ago I, together with other officers of the Government, initiated extensive cooperative measures throughout the country.

The first of these measures was an agreement of leading employers to maintain the standards of wages and of labor leaders to use their influence against strife. In a large sense these undertakings have been adhered to and we have not witnessed the usual reductions of wages which have always heretofore marked depressions. The index of union wage scales shows them to be today fully up to the level of any of the previous 3 years. In consequence, the buying power of the country has been much larger than would otherwise have been the case. Of equal importance, the Nation has had unusual peace in industry and freedom from the public disorder which has characterized previous depressions.

The second direction of cooperation has been that our governments, National, State, and local, the industries and business, so distribute employment as to give work to the maximum number of employees.

The third direction of cooperation has been to maintain and even extend construction work and betterments in anticipation of the future. It has been the universal experience in previous depressions that public works and private construction have fallen off rapidly with the general tide of depression. On this occasion, however, the increased authorization and generous appropriations by the Congress and the action of States and municipalities have resulted in the expansion of public construction to an amount even above that in the most prosperous years. In addition the cooperation of public utilities, railways, and other large organizations has been generously given in construction and betterment work in anticipation of future need. The Department of Commerce advises me that as a result, the volume of this type of construction work, which amounted to roughly $6,300 million in 1929, instead of decreasing will show a total of about $7,000 million for 1930. There has, of course, been a substantial decrease in the types of construction which could not be undertaken in advance of need.