of Agricultural Economics; Russell Smith of the National Farmers Union; and finally, Kurt Borchardt of the War Contracts Subcommittee staff. With the exception of Smith and Borchardt, all these men were civil servants who were operating at the nonpublicized, workhorse policy level of wartime administration. They all had a burning interest in postwar employment problems, and in terms of economic philosophy, they shared in the belief that the compensatory fiscal ideas stemming from the Keynes-Hansen analysis were basically sound.

On an average of twice a week from the middle of November to the middle of December 1944, this group met with Gross on Capitol Hill and helped him mold a full employment bill. The drafting process was controlled by Gross. At the first meetings he explained the nature of the problem: the desire to draft a bill which would have the sweep of the Patton amendment but which would be more acceptable politically and would answer some of the criticisms which Murray had received from the executive agencies and departments. In subsequent meetings, Gross submitted rough drafts and used the group as a sounding board. Out of the discussions came suggestions which were carefully weighed by Gross and often incorporated in later drafts. Between meetings Gross reworked his drafts with the aid of Charles Murphy of the Office of Legislative Counsel. He also kept Senator Murray informed of developments, and solicited comments from people "around town" like Alvin Hansen and Leon Keyserling. Hansen's advice was sought for obvious reasons. Keyserling, who was at that time General Counsel of the National Housing Agency, had won second prize in the Pabst postwar employment essay contest. His essay had suggested certain relationships between the executive branch and the legislative branch of the Federal Government in the development of an economic program which Gross found suggestive.18 Later on, in the summer of 1945, Keyserling became intimately associated with the redrafting of the full employment bill, and throughout the full employment fight, he acted unofficially as an advisor to Senator Wagner and the Banking and Currency Com

mittee staff.

Stylistic Strategy.-In preparing a bill on any controversial national issue there are certain governing rules of strategy. By far the most important is that a bill must be made to appeal to the widest possible group of potential supporters. This may seem axiomatic, but it is so axiomatic that it is often forgotten.

In this connection, the breadth of support a bill can claim in Congress is often in direct ratio to its viability as a symbol. It is for this reason that the early decision of Gross and the drafting committee to adopt as a draft title "The Full Employment Act of 1945" was of major significance. The term "full employment" was to cause the proponents of the bill numerous headaches and tactical defeats in the

17 Other members of the committee included Daniel S. Gerig and Anne A. Scitovsky of the Social Security Board, and Collis Stacking of the War Manpower Commission. 18 Specifically, Keyserling emphasized that planning and the development of economic policies had to be a joint executive-legislative affair. He suggested a continuing "American Economic Committee" to be established along the general lines of the TNEC with representatives from the House, the Senate, and the Presidential Cabinet, and with additional representatives appointed from industry, agriculture, and labor. See Fitch and Taylor, "Planning for Jobs" (Philadelphia, 1946), pp. 430-443.

year ahead, but the early drafters found it hard to imagine public opinion, pressure opinion, and congressional opinion mobilizing around a "Federal employment and production bill" or a "high-level employment and stabilization bill."

How conscious the drafters of the full employment bill were of this problem of style can be judged also by glancing at the opening words of the Patton amendment and then at the beginning clause of the first printed draft of the new bill. The Patton amendment stated dryly

In order that there shall be full employment and full production through provision of means for private enterprisers to plan their capital outlays and through provision of means of productive investment of the savings of the people*** 19

The new bill began—

The Congress hereby declares that every American able to work and willing to work has the right to a useful and remunerative job in the industries, or shops, or offices, or farms, or mines of the Nation.20

These words of Roosevelt had a familiar, and to many, an inspiring ring.

The substantive debate over "spending."-If the Patton amendment was cold, it was also rigid in its economic approach. Its concentration on Federal investment and the arbitrary figure of $40 billion as the guaranteed annual level of investment were immediately challenged. Although the weight of opinion among the participating economists in the drafting committee was on the side of compensatory Federal spending, there were minor differences as to whether the spending should be solely for investment and whether spending alone was a sufficient answer to the unemployment problem. Some argued that although the Government could tinker with the economic system through changes in tax laws, discount rates, social security laws, antitrust laws, and the rest, in the last analysis the only real guarantor of full employment was Government spending; so why not call a spade a spade? Others agreed, but claimed that raising purchasing power directly by tax rebates or "food stamp" plans was far better than spending Federal money on public works.21 Still others felt that the entire tool kit of private industry and the Government should be used to combat depressions and that spending should be considered only as a necessary last resort. Partly for political reasons, this last suggestion was adopted. Some people close to the situation are still of the belief that everything in the original bill except the spending provisions was window dressing. Both Senator Murray and Gross hotly dissent, however, claiming that the nonspending provisions of the bill and the emphasis on the initial responsibilities of private enterprise were sincere reflec

22

19 National Farmers Union, press release, Aug. 7, 1944.

20 U.S. Senate, a bill to establish a national policy and program for assuring continuing full employment. Senate Committee on Military Affairs, Subcommittee Print No. 1, 78th Cong.. 2d sess., Dec. 18, 1944.

1 The main protagonist for the position that the Government's chief responsibility should be to underwrite private consumption was John Pierson of the Bureau of Labor Statistics, who made his position known to the drafters thorugh Emile Benoit-Smullyan. Pierson was one of the pioneers in seeing the implications of Keynesian thinking for an integrated Federal full employment policy. See particularly his book, "Full Employment" (New Haven, 1941). See Alvin Hansen, "Economic Policy and Full Employment" (New York, 1947), p. 197, for an attack on the 'consumption' school.

This is certainly the position of Alvin Hansen (interview, Cambridge, Mass., Feb. 25, 1946).

tions of Murray's own thinking. It is difficult to analyze motivation in retrospect, but it is perhaps some indication of the importance which Murray and Gross originally placed on spending that the only antiunemployment device which was spelled out in detail in the bill was a Federal compensatory fiscal policy. All other Government activities were alluded to in the "basket clause" referred to in chapter II:

Such program may include, but need not be limited to a presentation of current and projected Federal policies and activities with reference to banking and currency, monopoly and competition, wages and working conditions, foreign trade and investment, agriculture, taxation, social security, the development of natural resources, and in such other topics as may directly or indirectly affect the level of non-Federal investment and other expenditures."

23

It is perhaps of further significance that the following clause appeared in the printed draft: "There are hereby authorized to be appropriated such sums as may be necessary to eliminate any deficiency in the national budget." 24 This authorization clause was dropped before the bill was introduced, but its place in the original draft is not without interest. There is no question that the drafters of the full employment bill edged away from the bald spending plan of the Farmers Union proposal. But it seems equally obvious that they retained a healthy respect for the Patton amendment's underlying theory.

Technical jargon.-In the technical sections of the early drafts of the full employment bill, the heavy hand of the professional economist is readily observable. Under Title IV (the national production and employment budget) of the December 18, 1944, print, sections may be picked almost at random to illustrate this point. For instance, section (c) reads in part:

To the extent that such increased non-Federal investment and other expenditure as may be expected to result from actions taken under the program set forth in accordance with (b) of this section are insuffiicent to provide a full employment volume of the gross national product, the President shall include, in the budget transmitted in accordance with section 201 of the Budget and Accounting Act of 1921, as amended, a general program of such Federal investment and other expenditure as will be sufficient to bring the aggregate volume of investment and other expenditure by private business, consumers, State and local government, and the Federal Government, up to the level required to assure a full employment volume of the gross national product."5

To the trained economist this type of language is readily intelligible, although professional differences of opinion have existed about the precise meaning of terms like "gross national product." To the skeptical politician, however, a passage of this sort might have seemed like intentional obfuscation, especially when compared with the dramatic, if ambiguous, language in the bill's opening declaration of policy. An interesting part of the bill's legislative history is the extent to which this technical jargon was simplified or abolished. The drafting economists were vaguely conscious of the political limitations of their technical language, for they appended to their draft a section on definitions. It is hard not to wonder, however, how lay readers must have reacted to the definition of gross national product as "the gross national production of goods and services, as calculated by the Department of Commerce." 26

23 S. 380, 79th Cong., 1st sess., Jan. 22, 1945, sec. 3(b).

24 Senate Committee on Military Affairs, Subcommittee Print No. 1.

25 Ibid.

20 Ibid., sec. 10.

Defining full employment.-We have suggested earlier that the use of the term "full employment" in the title of the new bill was fundamentally a political device. We have also suggested that the use of the term caused almost as many headaches as it prevented. Certainly the central issue was the not-so-simple matter of definition. Like "gross national product," "full employment" as a technical economic term has been a point of friction among professional economists.

Sir William Beveridge, whose book "Full Employment in a Free Society" had appeared too late to have any direct effect on the drafting of the American bill, defined the phrase as meaning "always more vacant jobs than unemployed men *** the jobs at fair wages, of such a kind, and so located that the unemployed men can reasonably be expected to take them." 27 The logic of Beveridge's definition, as the distinguished Englishman well knew, was possible government control over the location of new industry, over the mobility of labor, over the use of investment funds, and perhaps over prices and wages.

The drafters of the full employment bill never conceived of "full employment" as meaning that no unemployment would ever exist, or that there would always be, in Beveridge's phrase, "more vacant jobs then unemployed men." They believed that capitalism required a certain flexibility in its labor market and that full employment for the entire labor force at all times could be achieved only under a system of forced work. Both Germany and Russia during the thirties, and England (and, to a modified extent, America) during the war had virtually succeeded in abolishing unemployment by using the sanctions of government to freeze industrial labor in particular jobs. This as a peacetime arrangement would hardly have been acceptable to a najority of Americans.

But since the drafters agreed that "full employment" did not mean full employment, they were forced to try to work out a definition which would be politically acceptable and reasonably unambiguous. This turned out to be impossible. In the December 18, 1944, draft, "full employment" was defined as:

*** a condition in which the number of persons able to work, lacking work, and seeking work, shall be no greater than the number of unfilled opportunities to work, at locally prevailing wages and working conditions for the type of work available, and not below minimum standards required by law, and in which the amount of frictional unemployment, including seasonal and technological unemployment, and other transitional and temporary unemployment is no greater than the minimum needed to preserve adequate flexibility in the economy.

Not only was this definition cumbersome, it glossed over a whole series of problems and disagreements. What sense would "full employment" make to an unemployed worker in New York when job opportunities existed only in Seattle? By what standards was the labor force to be judged? Who would decide when "frictional" unemployment had become large enough to be considered pathological? And what would be the criteria for judging "adequate flexibility in the economy"?

There are few political slogans which are amenable to unambiguous definition.

27 William H. Beveridge, "Full Employment in a Free Society" (New York, 1945), p. 18.

Governmental mechanism: Economic analysis and planning initiative. It will be remembered that the Patton amendment placed the major responsibility for analyzing economic conditions in an existing joint committee of Congress.28 The drafters of the new bill were unanimous in agreement that the analysis of economic conditions and the planning initiative for a full employment program should be the responsibility of the President rather than of Congress. Furthermore, it was agreed that that part of the executive branch best equipped to help the President handle such duties was the Bureau of the Budget. In the first place it was a part of the Executive Office of the President and would therefore not be subject, the drafters felt, to departmental myopia. More important, perhaps, the Bureau seemed to be unusually well equipped to undertake these new responsibilities because of its past interest in the full employment problem, because of the very nature of the work of its staff in correlating budgetary data, and because of the fact that, through its Fiscal, Legislative Reference, and Administrative Management Divisions, it was committed to a bird's-eye view of the total governmental program.

At the time, such an arrangement seemed appealing to the drafters for another reason. The Bureau of the Budget had been originally created by Congress. It was "respectable." The path of the full employment bill might be eased, it was reasoned, by attaching it institutionally and semantically to the budgetary concept. To talk of a "national production and employment budget" smacked of bookkeeping, accounting, conservative business procedures. At one point the drafters even toyed with the idea of counteracting the evil connotations of "Federal investment and expenditures" by adopting the felicitous expression "balancing the National Budget." 29

Tied in with the concept of executive planning was the idea of executive discretion in adjusting the rate of Federal expenditures "necessary for the purpose of assuring continuing full employment." Changing business conditions, the drafters felt, needed a type of flexible stabilization program which Congress was hardly equipped to handle. Provision was therefore made in the bill for Presidential discretion in varying the rate of Federal expenditures to meet changing employment conditions.30

Many modifications were to be made in the sections of S. 380 dealing with the responsibilities and institutional mechanisms of the executive branch. It is important, however, to note at this point that the original draft of the bill was framed as an amendment to the Budget and Accounting Act of 1921. This was to have an important impact on subsequent legislative strategy.

Government mechanisms: the role of Congress.-One of the limitations on the effectiveness of the National Resources Planning Board had been the fact that its reports were unilateral declarations of Government goals. Congress had had no participating interest in the formulation of these goals and tended to resent the cloistered nature of NRPB's operations. Since the basic policy decisions to implement

The Joint Committee on Internal Revenue Taxation. See above, p. 24.

This phrase is actually used in the Year-end Report of the War Contracts Subcommittee. See "Building the Postwar Economy," p. 6.

30 Senate Committee on Military Affairs, Subcommittee Print No. 1, sec. 6.