Committee on Economic Security

Unpublished CES Studies

Trend of Interest

TREND OF INTEREST IN ECONOMIC SECURITY

A survey of recent newspapers, magazines and organizational activities reveals a vast amount of interest in the various phases of economic security and in the Committee on Economic Security. While not all of this interest is favorable to an economic security program, there is no doubt that by and large most of it is at least open-minded.

Newspapers and Magazines

There is considerable editorial discussion about an economic security program in papers throughout the country. The following are typical extracts:

"The rush to high-pressure the federal government into old age pensions is typical of Americans at their worst . . . The average citizen seeing misery about him thinks indignantly that 'there ought to be a law.' There should be, but not one which is rushed on the statute books without regard to economic realities.

The problem of old age pensions will be with us for a long, long time and it will take the collective brains of American industrial, political and social leaders to furnish a satisfactory solution."

Buffalo News, October 12, 1934

"National legislation is coming. The welfare of the country demands that it shall be confined within workable lines, and that such burdens as may be imposed shall be so distributed as to avoid injury to the other economic machinery on the functioning of which ultimate security in the final analysis depends."

Philadelphia Bulletin, October 15, 1934

(It should be noted that the Bulletin has been known as a conservative paper.)

Our state system, furthermore, was a serious hindrance to progress in that direction--federal initiative and leadership being barred while industrial competition between sections made uniform action in social security legislation almost impossible among the states.

The United States is now in a serious plight because of its excessively heavy expenditures on the relief of some twenty million impoverished people . . . Waste and corruption, meanness in passing along more local and state obligations to the federal government than can be justified--all this is largely the penalty of unpreparedness in social insurance and security."

Springfield (Mass.) Republic, October 13, 1934

Dallas (Texas) Morning, News, October 15, 1934

The task of caring for the unemployed, the injured, the aged, is now generally recognized as something which can not be evaded safely or wisely. Social insurance is the most efficient and cheapest way to do the job."

Washington, D. C. News, October 15, 1934

The problems involved in drawing up a program of old age security were the subject of a critical article by Professor Earl E. Muntz, New York University, in the Chicago Daily News. He termed the American pension system "essentially an extension of poor relief for needy aged persons without means of support." He noted that the chief problems facing the Committee on Economic Security involve coverage, premiums, eligibility for benefits and amount of benefits and concluded that it behooves us to wait for a scientific measure, rather than to impel the federal government into a hurried experiment."

Many journalists who are watching the activities of the Committee are predicting that unemployment insurance and old age pensions will head the list of security measures likely to receive attention this winter. Some say that it is probable that workers and employers will be asked to contribute to an insurance fund on the basis of wages, not payrolls. The Scripps-Howard papers, in particular, have pointed out that unemployment insurance and old age pensions should be enacted by Congress this winter.

In advocating the adoption of periodic pre-payment health insurance plans in the various communities as the best meams for bringing adequate medical care within the reach of persons of average means, Dr. Robert B. Greenough, President-elect of the American College of Surgeons, drew the editorial approval of health insurance of such papers as the Boston Post, Boston Transcript, the New York Evening Post and the New Tork Times. An extract from a New York Evening Post editorial reads, "With the idea of social insurance at least gaining a foothold in the United States, the doctors would do well to steer the development with their own plans and retain control over their profession."

Increasing newspaper attention is being given to foreign systems of economic security. The Scripps-Howard papers recently ran a series of articles entitled, "We Can Learn From England" which went into some detail about the English unemployment insurance system. The visit of Mrs. Margaret Wintringham, member of British Parliament, occasioned interviews on England's social security program. "Insurance Basis for Jobless Aid Seen by a Briton" ran a headline in the Waco, Texas, News-Tribune; this story was based on an interview with Lawrence Robson, a candidate for Parliament, who happened to be visiting Texas.

Mrs. Roosevelt devoted one of her widely-syndicated columns to a discussion of old age pensions. "01d age pensions," she wrote, "have been brought very much to the fore again in the Congressional campaigns on the coast this year, and there is no doubt that some type of this form of relief will be a part of the social program proposed to the next Congress . . .

There is no question in my mind but that old people who have given of their strength and youth to the bringing up of a family and have been unable to save should not in their old age have to live off their children's bounty or on charity. Older civilizations have long conceded this right and I feel that taking this group out of industry a little earlier would be a great help to another group which is now very much menaced--these men and women between 45 and 60 who are finding it harder and harder to get jobs. Every citizen, it seems to me, should study this question and give his support to discussions of it in Congress in the hope that some really workable plan may be found and established in every state in the Union."

The magazines, too, are devoting attention to the matter of social security. The current issue of the North American Review is running an article entitled, "Social Insurance for America", by P. W. Wilson; the October American Mercury contained an article entitled, "Social Security-Fiction or Fact," by Abraham Epstein.

Business Opinion

Business is both thinking and writing about unemployment insurance, in particular.

The Nation's Business, organ of the Chamber of Commerce, recently had several articles about unemployment insurance. "Unemployment Government Job," was the title of an article, by Ralph E. Flanders, President of the Jones and Lamson Machine Company, in the August, 1934 issue.

It should be noted that Mr. Flanders is a member of the subcommittee of the Business Advisory Council which is studying unemployment insurance in cooperation with the Committee on Economic Security.

Mr. Flanders begins his article with this striking statement: "Any proposal to end unemployment must begin with the premise that the problem is a permanent one and not merely an incident of depression." He goes on to propose a three-point program to solve the problem of unemployment. He suggests the setting up of unemployment reserves, a permanent public works administration and a national system of employment offices.

Employers should contribute the benefit funds and the state the administrative cost of unemployment insurance writes H. W. Story, Vice-President of the Allis-Chalmers Manufacturing Company, in the October issue of Nation's Business. Story insists that the state should stand the entire administrative cost of the system. "But this," he says, "should be the limit of the state's responsibility, lest the system develop social evils which will offset its social benefits . . . If the state contributes to the benefit funds the system is certain to degenerate into a creature of politics, an unlimited endowment of idleness like the dole in England." Admitting that the employer's benefits would not be adequate, Story proposes that each employee have a personal reserve for supplementary benefit; this personal-reserve would serve to preserve the individuality of the worker, explains Story.

Questioned at his press confcrence about the attitude of business on unemployment insurance, Secretary of Commerce Roper indicated that the attitude of business is favorable; he further pointed out that the cooperation of the Business Planning Council's sabcommittee on unemployment with the Committee of Economic Security was a significant trend.

President Roosevelt's conferences with business men and the increasing Administrative cooperation with business is seen as an indication by several newspapers that business will approve a social security program. President Roosevelt last week reiterated at his press conference the necessity of an economic security program; he also announced that the Government may underwrite the administrative cost of unemployment insurance.

A number of general magazine articles play up the fact that business men are in general wary about any new Administration developments which may mean increased taxation; some articles definitely refer to a costly social insurance program. W. M. Kipplinger, head of the business news agency of that name, in an article entitled, "Why Business Fears Washington," in the October issue of Scribner's, emphasizes the whole matter of business fear of legislation which will bear heavily on business profits; Kipplinger hints of a business revolt against the Administration's policies.

Social Workers and Organizations

A comprehensive program of job insurance and security for workers in sickness and accidents was declared to be imperative by John Colt, Chairman of the New Jersey Relief Council in a report to the state legislature. Colt's statement, which he said would be the first of a series devoted to the problem, suggested the necessity for reserve funds for jobs, sickness and accident insurance, established with state and federal funds and to continue until replaced with the accumulation of employer and empioyee contributions. An unemployment insurance system, Colt said, would be adequate for normal periods of unemployment but would have to be supplemented by governmental relief during periods of business depression.

Unemployment insurance was urged by Covenant of the Protestant Episcopal Church in a resolution which read, "If our industrial system depends upon masses of workers, hired when wanted and discharged when not wanted, and who are too old for employment in what is called the middle life, industry itself should pay the cost of this involuntary idleness and premature old age.

Such insurance, received as a right, not as a dole, maintains the self-respect and dignity of the worker. We are to judge every economic measure by its effect on personality as manifested in the stature of the fullness of Christ. The curse of present industrialism is that it regards man as a tool for producing goods, a thing interchangeable with a piece of mechanism and a commodity subject to the anonymous element of price.

The National Conference of Catholic Charities took up the problem in some detail at its latest meeting. Prof. George K. McCabe of the University of Pittsburgh, in an address before the Conference discussed the necessity of unemployment insurance; Albert L. Denne, Deputy Housing Administrator and President of General Motors Holding Corporation, offered his "mutual security" plan to the Conference.

Unemployment insurance and old age insurance were deemed federal tasks by Rev. Dr. John O'Grady, Secratary of the National Conference of Catholic Charities, in an address before the annual meeting of the Ohio

Welfare Conference. He termed the Wagner bill "the most concrete proposal for unemployment insurance, on a national scale." But he questioned whether it would "give us a national system of protection against unemployment or 48 different systems."

He stated that a complete national system of employment exchanges was an essential part of a program of unemployment insurance. He would have unemployment insurance rather than a system whereby reserves would be built up by each industry; he expressed preference for old age insurance funds, contributed to by employees and the state, to old age pensions. Protection against illness and invalidity, on the other hand, should be a state rather than a national duty, the Reverend O'Grady declared.

The American Federation of Labor

The 54th annual convention of the American Federation of Labor went on record on behalf of the general principles and some specific forms of social insurance. In its report to the convention, the executive council of the American Federation of Labor brought to the attention of the organization the various problems of economic security. A number of resolutions concerning economic security were also submitted by delegates. The American Federation of Labor unanimously adopted the following policies:

"The personnel of the committee created by the executive order of the President on economic security, together with their technical board, is one from which Labor may reasonably expect a forward-looking report. The validity of the experience with the social insurance in Germany and Great Britain will be properly appraised by these experts. The importance above all of laying the foundation for a nation-wide system of Labor exchanges for employment, training and counseling will also receive proper consideration. Labor's interest in the outcome of this report and recommendation is paramount."

Unemployment Insurance

"The growth of sentiment in favor of Unemployment Insurance has been exceedingly striking; it has come with the prolonged depression. The role of State action has become clear. While the Federal Government cannot enact a national law it can aid states by Federal subsidies as provided. in the Wagner-Lewis bill, which deserves support."

Workers Without Jobs

"Unemployed youth has become one of our most perplexing problems. To turn boys and girls out of school and deny them employment opportunities develops restlessness and irresponsibility. Some better provision for dealing with these people is indispensable. For other workers who are without jobs the wise provision of establishing unemployment insurance was endorsed by the Cincinnati convention. The necessity for unemployment insurance has been clearly demonstrated by the indiscriminate way in which relief is dispensed. It is reaffirmed as a specific measure."

Old Age Pensions

"The necessity of a sound program of old age pensions to deal intelligently with this problem is one upon which the Federation has already expressed an affirmative opinion. It has become a more clearly demonstrated need during the past year to relieve the pressure on jobs and provide a measure of social security."

Old Age Security

"Attention is called to the fact that twenty states are still lacking old-age security laws. Attention was also directed to the failure of Congress in enacting an old age security law for the District of Columbia. It is to be regretted that both our National, as well so many of our state governments, have failed thus far to respond to this great and humane requirement. We direct every possible effort be made to remedy this grievous situation and recommend approval of this section of the report of the Executive Council."

Sickness

"The hazards of illness to wage earaers are many and varied. The opportunities for adequate medical care are strictly limited. The need for some assurance of adequate medical care for all in the low income group is clear and should be provided."

Relief Principles

"Relief will be necessary for some time to come, until an adequate program of social security has been developed. In administering that relief social planning is indispensable."

Editors

The National Industrial Conference Board, well-known business research organization, recently addressed a questionnaire to 12,076 editors of newspapers and farm journals, seeking to establish the attitude of the public toward curreat economic problems. According to the Board, the editors were asked to disregard the political policies of their publications, as well as their own personal views, and interpret public opinion in their communities. Over 5,000 responded by answering some or all of the questions. Here are the findings of the Board:

On a percentage basis, 58% of the editors believe that their community is opposed to a compulsory system of unemployment insurance, but 64% believe that public opinion favors a comrulsory governmental system of old age pensions; 89% find sentiment opposed to a further increase in national debt; 87% believe that their constituents favor reducing the number of employees on the government payroll.

The editors were asked to submit their personal views as to the factors which would do most to increase business confidence. 72% of the editors, representing 77% of the circulation answered, "decreasing governmental control"; 71%, representing 72% of the circulation, answered "decreasing government expenditure."

Townsend and Deane Plans

The Townsend Plan appears to be gaining a great deal of publicity and adherents throughout the country. Governor Merriam, Republican candidate for re-election in California, has endorsed the Townsend Plan and has announced that he will commend it to Congress. If Upton Sinclair is defeated for the Governorship it will be because Merriam has taken up the Townsend Plan, declares J. G. Hayden in a newspaper article syndicated by the North American Newspaper Alliance.

"Sinclair supporters insist", writes Hayden, "that the California Republicans are endorsing the Townsend Plan with their tongues in their cheeks. They point out that Governor Merriam and his state convention could speak in favor of it quite safely since it demands action by the federal rather than the state authority. So great has been the agitation in favor of the proposition, however, that practically every candidate for Congress in California, regardless of party, and a number of candidates in other states have endorsed it."

The Republican New York Herald-Tribune recently carried a two-column feature article which looked with favor upon the Townsend scheme; the Minneapolis Journal carried a half-page story which accepted the Townsend Plan quite seriously and pointed out that there were some 4,000 Townsend adherents in Minneapolis. Both the New York Tribune and Minneapolis Journal give credulence to the rumor that the Administration is seriously considering adoption of the Townsend Plan.

Washington, D. C. newspaper men have evinced interest in the report that Dr. Townsend is to set up quarters in Washington soon.

"$200 a Month and Stay Idle" is the title of an article in the Democratic Boston Post which points out that the Townsend Plan is sweeping the country and is backed by huge propaganda. Significant extracts of this article follow:

"Millions of persons firmly believe that a month or more after Congress meets in January a bill giving every man and woman who has reachad the age of 60 years a pension of. $200 a month will be passed and signed by the President.

The idea seems fantastic, but there are behind it millions of eager people directed by a most efficient propaganda organization reaching every part of the country. . . The political possibilities are enormous. Between ten and eleven million persons, nearly all of them voters, would be eligible for the $200 a month pension.. . .

Sad disillusionment waits those men and women who expect this munificent bounty from the government. They have been led to believe that they would be performing a patriotic action in being willing to help spend the nation into prosperity.

It is cruel to raise such hopes in the minds of earnest, honest people, for the collapse of them will be a great tragedy."

Discussing the Townsend Plan in one of her syndicated columns, Mrs. Roosevelt points out, "the snag comes in paying for the pension. There have been innumerable petitions and signatures in favor of the plan, but I doubt if any of the people favoring it have really worked out how it is to be financed."

The "Mutual Security" plan proposed by Albert L. Deane, President of the General Motors Holding Corporation, now with the National Housing Administration, is being widely publicized through speeches made by Mr. Deane before the National Conference of Catholic Churches and the Mobilization for Human Needs Conference. It apparently has considerable support in business circles and among some social workers. Arguing that no plan of unemployment insurance has yet been devised "which could withstand the drain of such a prolonged depression as that through which we have been passing", the Albany Knickbocker Press has endorsed the Deane Plan. The Press believes this plan would largely eliminate the so-called vicious spiral by which laying off men reduces public buying power, cuts down purchases and so produces further lay-offs because of lack of orders."