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been met. Incidentally, at no time has it assumed the significant proportions that some people would have us believe, It has nowhere near attained the proportions that we saw in 1949, and of course any attempt to compare it to the 1930's is ridiculous.

In addition to that there is one other figure I want to emphasize, as I have before, our civilian labor market has taken over some 250,000 Government employees who have been let out. It has absorbed those, plus some 600,000 boys who have been in the services, who have been returned to civilian life from the uniform since the end of the Korean war. A gentleman of the opposite party said in a recent public speech, for every boy that is returned from Korea, two have returned from Detroit. Well, aside from being an untrue statement it certainly is filled with cynicism and defeatism.

I say the fact that we are reverting to a peacetime economy is the significant thing, and I think the administration is doing a great job in actually bringing about prosperity with peace. It can be done, and we do not need any war in order to solve the unemployment problem.

Mr. FORAND. Mr. Chairman, will the gentleman yield?

Mr. CURTIS of Missouri. I yield to the gentleman from Rhode Island.

Mr. FORAND. I would like to hear the gentleman tell us just what the administration is doing to take care of the large unemployment situation, if it is doing such a fine job.

Mr. CURTIS of Missouri. One thing is that it is encouraging private industry for a change, and making it possible for business to go ahead; it is creating new employment opportunities because it is encouraging private business.

Mr. FORAND. Does the gentleman know there are more business failures now than there have been in the past?

Mr. CURTIS of Missouri. I am saying what the unemployment figures show. Never in the history of the country were so many people employed.

Mr. FORAND. Never in the history of the country was the population so large or never was the population increasing at such a rapid rate.

Mr. CURTIS of Missouri. If you will compare these figures on a percentage basis, the percentage of employed to unemployed and to the total population, the result will show that we are in no serious circumstances, particularly when it is realized that we have in less than a year reverted from a wartime economy to a peacetime economy. [From the New York Times of July 8, 1954] EMPLOYMENT UP 989,000-MOST OF INCREASE ON FARMS

WASHINGTON, July 7.-Employment rose 989,000 from May to June, most of it on farms. The rise in unemployment was negligible-not more than 42,000. After allowance for seasonable factors, the downtrend in nonfarm employment appeared almost completely halted in June.

The unemployed total was estimated at 3,347,000, compared with the May total of 3,305,000.


Neither the employed nor the unemployed totals moved as much as seasonal patterns of the past would indicate. The rise in unemployment was significantly small, because seasonal factors usually increase the total 10 to 11 percent in June as students and graduates enter the labor market. A 10 percent A 10 percent increase in unemployment would have meant a rise of 334,700.

The Census Bureau, which makes the general employment and unemployment estimates, said the number of students entering the labor force between May and June was somewhat smaller than in most other postwar years.

A joint release by the Commerce and Labor Departments said that as June progressed there was a further decrease of unemployment among adult workers.

Some of the other highlights of the month's developments were these:

June brought the first break of any consequence in the number of relatively long-term unemployed (those without jobs for 15 weeks or more), which had remained at the 1 million mark since March. In June, this group dropped by about 200,000 to an estimated 850,000.

New unemployment, as measured by initial claims for State unemployment insurance, continued to decline seasonally during June. By the week ending June 28, the volume had fallen to 265,000, the lowest level for any week since October 1953, and 5 percent less than in May.


As in the last 2 months, many previously jobless men found employment in construction work, and there was some easing in unemployment in other business areas as


The two departments, reporting on new construction, said the seasonal rise in June expenditures made a total of $3,300,000,000 for the month and a 1954 first-half total of $16,600,000,000.

The number of employees on nonfarm payrolls, which excludes the self-employed, domestics, and unpaid workers in family enterprises, rose 142,000 to 48,100,000 in June, while factory employment remained unchanged at 15,800,000.

The workweek of factory production workers averaged 39.6 hours in June, a third of an hour higher than in May, the Bureau of Labor Statistics reported. This June average, however, was 1.1 hours below that of June 1953.

The CHAIRMAN. The time of the gentleman from Missouri has expired.

Mr. FORAND. Mr. Chairman, I yield 5 minutes to the gentleman from Pennsylvania [Mr. KELLEY).

Mr. KELLEY of Pennsylvania. Mr. Chairman, since this discussion has developed into one about employment and unemployment, I wish to say that my congressional district, which is Westmoreland County of Pennsylvania, has been in distress for many months. Unemployment is a serious matter in my district. The miners are idle, steelworkers are idle, electrical workers are idle, and there are idle men in the glassmanufacturing plants. I am therefore interested in the amendment to be offered by the gentleman from Rhode Is

The level still was 1,800,000 under the peak land [Mr. FORAND], because most of my for the month attained last year.

The total employed during the survey week early in June was estimated at 62,098,000, compared with 61,119,000 a month earlier.

people who are unemployed have exhausted compensation benefits and are now dependent upon relief or charity and some aid from surplus Government food.

Just recently the Pittsburgh area as defined by the Labor Department has been placed in the No. 4 category as a critical area. That does not indicate that there is any improvement in the situation there in employment; it indicates that it is getting worse.

As long as the steel industry operates at less than 70 percent of capacity, you will never have any prosperity in this country, you cannot have it for basic industry, and that is what it has been for some months now, and it is getting


It is not a recession in my view, it is a depression. It is a depression in my district. My people view it as a depression and not a recession. They are the ones who are suffering, they are the people without employment, and many have been for months.

Mr. Chairman, the people in Westmoreland County, Pa., in the center of Pennsylvania's bituminous coal, steel, and electrical industries, do not believe in beating around the bush. They believe in speaking straight-out.

When some of the Republican newspapers in our county started to apologize away this recession by calling it an "inventory adjustment" and things of that kind, the miners and the steelworkers and electrical workers and our other industrial workers adopted their own phrase for it. They call it "Ike's depression."

They remember the last depression and they remember we had a Republican administration at that time. They tend to associate Republican and depression as words which go together.

Frankly, Mr. Chairman, I cannot blame them, particularly when I see the fraud we are perpetrating on the people through a bill like this which pretends to be an unemployment compensation bill.

Jobless workers in Westmoreland County who have used up their full 26 weeks of benefits and still do not have jobs can starve, as far as this bill is concerned. There is nothing in it for them. Those who are still on unemployment compensation and drawing a meager $30 a week top benefit, trying to feed and care for a family on that, can limp along as best they can for there is nothing in this bill for them either.

I will be happy to join with Congressman FORAND and other Democrats in trying to write into this bill a higher system of benefits-half-pay up to a top of two-thirds of the average weekly wage.

That would raise the top benefit in Pennsylvania to about $44 a week, which is not very much on which to run a household these days but is a whole lot better than the present $30 top.

I am sorry the administration refused to help us to get a better bill than this one now before us. I am sorry it is shutting its eyes to the magnitude of the unemployment problem and the hardships that go with it.

In my county, however, it is just about what the rank-and-file industrial worker would expect from a Republican administration and so there will be no surprises there.

They just call it "Ike's depression" and let it go at that. What burns them up

most, Mr. Chairman, is that they have to wait 2 more years for a chance to vote in a presidential election.

Mr. REED of New York. Mr. Chairman, I yield 8 minutes to the gentleman from Wisconsin [Mr. BYRNES].

Mr. BYRNES of Wisconsin. Mr. Chairman, I intend to support this bill. I voted in the committee to report it to the House. I must say, however, that I am not too pleased with two sections of the bill, and as a result I filed dissenting views with respect to the section on the extension of tax to employers of four or more employees, and that provision relating to experience rating.

It seems to me that when we approach this problem of unemployment compensation we face one basic issue: The matter of States rights. When this program was conceived, the general purpose of the Federal Government coming into the picture at all was to encourage States that at that time had not acted to adopt unemployment compensation plans. The Federal Government gave its stamp of approval to the idea, the theory and the objective of unemployment compensation, and took steps to encourage the States to adopt State plans. Fundamentally, all through the history of unemployment compensation it has been conceived as an area for State legislation with assistance from the Federal Government. We levy a Federal tax and we today collect a Federal tax from employers, not for the purpose of providing a fund from which benefits can be paid but only to provide administrative funds to assist the States in the

administration of the State program. But we have always left the fundamental decisions, the details, the benefits, the length of benefits, also the area of the employers to be covered, particularly in that troublesome field of employers in small business, to the States to act on the basis of the conditions existing in

the various States.

I do not know why it is that we in the Congress so often take the attitude that we here are so much smarter than are our counterparts in the State legislature, that all the brains rest here in Washington, and that the legislatures and the State administration in the State capitals are absolutely devoid of any reasonable intelligence and that we have to make the decisions. Having served in a State legislature, I would like to say that at least as far as this Member of Congress is concerned, he has a very high respect and a very high regard for the wisdom of the State legislatures in meeting the problems in the various States. To me many things that we meddle with here could much better be done if they were left to the decision and the determination of State legislatures and local communities.

Mr. Chairman, that is what we run into as far as this particular bill is concerned and it is what we run into in connection with the amendments to be offered by the gentleman from Rhode Island [Mr. FORAND]. I know that there has been for a long period of time a great effort on the part of some people to completely federalize the unemployment compensation program. These people feel that we should not leave the


decisions to the State. They say: Let us get it all down here in Washington and federalize it, let us disregard the conditions that exist in the various States and let us have a national pattern, that is the only way it can be done. Underneath it all, I suppose, is this idea that all wisdom rests in Washington; which idea, of course, I do not subscribe to at all.

Mr. Chairman, it is this matter of States rights, States prerogatives and the recognition that this program is basically a State program with Federal assistance and Federal encouragement that is at issue when we consider the Forand amendments that are to be offered. Make no mistake about it, those fered. Make no mistake about it, those amendments have only one purpose and one objective and that is to federalize the program and take away from the States the right to determine the amount of benefits, the length of benefits and all the various other factors which today and historically we have left to the States.

On that basis I am opposed to the Forand amendments. I think it is on that basis that the President himself has said that some of the provisions of the Forand bill are good provisions but they are provisions that should be adopted by the States and not superimposed from above by the Federal Government.

It is because the extension of the tax encroaches upon the State prerogatives, encroaches upon the State prerogatives, that I oppose that particular section of the bill.

There is nothing in the Federal law today that says to a State, "You cannot bring employers under the unemployment compensation provision if they employ less than 8 employees." We say the States can go as far as they want to. They can cover employers that have only one employee at any time. In fact, some States have done so. But, is

that not the State's right? Is that not up to the State to decide?

Another matter we should recognize is that this bill does not provide for benefits. If you look at section 1 of the bill, it simply imposes a tax. It does not insure any benefits. It imposes a tax on employers of four or more employees. It does not say what benefits the employees are going to get or that they are going to get any benefits.

All we do is

say we are going to tax employers of four or more employees.

Certainly we assume the States are going to act to cover employers of four or more employees, thus having them pay a certain part of the tax to the State government and get credit against their Federal tax. It is logical and certainly I think we can all assume that that is what is going to happen. But, as far as this section 1 is concerned, it gives benefits to nobody; all it does is impose a 3-percent Federal tax on employers of 4 or more employees.

That matter of what employers should be excluded has been up in the States at various times. Some State legislatures have had bills introduced to lower the standards-"standards" may not be the proper word-but to lower the number of employees in a given plant who will be covered by unemployment compensation.

In some States they have adopted lower standards such as one or more employees at any time as the test. Others, however, have turned down legislation or bills introduced in their legislatures to accomplish similar objectives. Is it not right for them to make their own determination? Can they not respond to the needs of their own people and the desires of their own people? It seems to me they can, and it is for that reason that I oppose section 1 of the bill.

The reason I am voting for this bill is the provision in the bill which covers Federal employees. It seems to me that Federal employees should be on a par with employees generally throughout the country. The Federal Government as an employer should have similar responsibilities toward its employees that other businesses have toward theirs, and certainly should have the same responsibility toward its employees that we by law say to private industry they must adopt toward their employees.

So, Mr. Chairman, on the basis of the coverage of Federal employees, I believe this bill is a much-needed piece of legislation. It is only because in my judgment that factor does outbalance the provision which I do not approve of in the bill that I am going to support it. I wish it were possible under the rule to strike out section 1 relating to the extension of the tax on employers of 4 or more employees and also that section which reduces the experience-rating provision to 1 year rather than a 3-year base. Unfortunately, that is not possible.

In closing, Mr. Chairman, I would simply make this one observation: Let us not try to take unto ourselves here in

Washington all prerogatives and juris

diction over matters which we all know

in our hearts can much better be done at a State or local level of government. Let us not act in a way which will give rise to the feeling that we here in Washington have lost confidence in the ability, in the integrity, and in the wisdom of our State governments.

10 minutes to the gentleman from PennMr. COOPER. Mr. Chairman, I yield

sylvania [Mr. EBERHARTER).

Mr. EBERHARTER. Mr. Chairman, I listened with a great deal of attention and with a great deal of respect to the

gentleman from

Wisconsin [Mr. BYRNES]. He makes a very strong argument, from his point of view, that we should leave this matter entirely to the States; do not let the Federal Government interfere at all.

Mr. Chairman, if that is a good argument, why did the Federal Government in the first place pass an unemployment compensation measure? In other words, if we follow his argument to its logical conclusion, the Federal Government should not at any time or in any instance pass any Federal unemployment compensation legislation. So that when it comes to that, the only thing we have to consider is the matter of degree in the setting of standards by the Federal Government. This bill merely sets up minimum standards with which the States must comply in order that employees will get the benefit of unemployment compensation.

It is a well known fact, known to anybody who has made any study of the subject, that the States have not kept pace with economic conditions, with economic factors. We know that the benefits do not rate nearly as high as they did 8 or 10 years ago or even 5 years ago. We know that the duration of the benefits is not as satisfactory as it was 7 or 8 or 5 years ago or 3 years ago. We know that the States, as a matter of history, have fallen back in this respect and that this measure effects nothing whatsoever for the working men and women in this country.

Everybody admits that the economy is in a better condition than it was 10 years ago. Standards of living are higher. We do not believe any more in unemployment. That used to be accepted as one of the natural results that follow from our economic system. But I think we have advanced in our thinking throughout the country. We have come to believe that we should do something to alleviate the distress that occurs by reason of unemployment.

Let us look at this from the standpoint of the employee. If a man works for a company that has eight employees and he loses his job through no fault of his own, he is entitled to unemployment compensation. But a man or a woman who works for an employer who employs only three people gets no protection whatsoever so far as Federal statutes

are concerned.

Some States have seen the inequity of this situation, that if 1 employee who works for a big company is entitled to compensation, why is not an employee who works for a company with only 1 or 2 employees? Is not his unemployment a matter of just as much distress as it would be to an employee who works for a big corporation?

Mr. Chairman, as I see it, the situation is such today that this legislation is entirely inadequate to meet the social thinking of the country and to meet the economic necessities. Why are we including in this measure, forcefully including, if we want to say so, all Federal employees? Because we recognize that when a Federal employee loses his position he is just as much in distress as a man who works for some big corporation. So we include him in this. But they object very, very strenuously to including employees when there are only 2 or 3 employees of a small business. From that standpoint, I do not think this bill is accomplishing nearly what the general public expects. I do not think it is coming anywhere near the recommendations of the President of the United States.

I know it will be broadcast over the land that the forward-looking program and the liberal program of the President takes another step forward, but this bill does nothing whatsoever. One of One of the main features of the bill is to permit reduction in taxation which goes toward building up these unemployment-compensation funds. It will be a great boon to some businesses, of course. That is a feature which, while I have no particular objection to it, I think some people would have, as was expressed by the gentle

man from Wisconsin [Mr. BYRNES] a few of seeing their profits are greater and minutes ago.

I think it is up to the Federal Government. We embarked on a step of practically compelling all the States of the Union to set minimum standards whereby unemployment compensation would be paid, and now because some of us want to go a little further and increase the minimum benefits there is great objection because we are supposed to be interfering with States rights. To me that does not seem logical at all. The bill does a little bit of good, of course, by taking in Federal employees, but I cannot see any other benefits from the bill whatsoever. The situation with regard to unemployment is much more regard to unemployment is much more serious than most people realize. In the western Pennsylvania area there are there are great steel mills which have been operating for a number of years at practically 100 percent of capacity. But now, Mr. Chairman, they are operating at 59 percent of capacity, producing 40 percent less steel than they did a few years ago.

The unemployment situation in the Pittsburgh area is 7.9 percent. Thousands upon thousands of employees have practically exhausted their unemployment compensation benefits, thousands upon thousands are suffering loss in take-home pay by reason of working a less number of hours than 40 hours a week. week. The situation is much, much worse than it is portrayed by the morning newspapers, when a very Pollyanna statement was put out that there are more employees now than there have ever been in the history of this country. of course, they fail to mention the fact that the population has increased. They fail to mention the fact that there are hundreds of thousands of boys and girls who have graduated from schools and who are now in the position of seeking employment. I might call attention, employment. I might call attention, Mr. Chairman, to the fact that this Pollyanna statement just issued was taking in a period of the first 12 days taking in a period of the first 12 days in June. So it does not take into account the many, many hundreds of thousands of employables who graduated from schools since June 12. So I do not think they should be too happy do not think they should be too happy about the employment situation. Of course, we see, Mr. Chairman, that the stock market is rising, hitting an alltime peak. Profits are getting greater time peak. Profits are getting greater and greater. The incentive for investing in stocks is getting greater and greater. But unemployment is getting greater and greater and hardship and distress is occurring. Fifty-nine areas of the country have been acknowledged and certified to by the President of the United States to be distress areas. What is a distress area? A distress area can mean only one thing, if we take into account the definition of what distress means. That means families including children and wives of workingmen are suffering distress. I am sure it is not because they do not have enough clothing. I think it is because they do not ing. I think it is because they do not have enough to eat. So I think it is time for the Federal Government to step in and consider those things once and a while. I think this Congress is giving too much attention to the matter

is worrying too much that business will be taxed, and does not have enough regard to perhaps a reduction in taxes for those people who need a little spending money so as to bring about a greater circulation of money and increase the purchasing power of the great masses of the people. Piling up great fortunes in the hands of a few people is not going to make for the general prosperity and general welfare of this country. The businessmen right now-the smallbusiness men are paying and paying heavily for the folly of many of their policies adopted during the last 2 years. Walk along the streets and talk to the businessmen who cater to the masses of employees and they will tell you how business is. They are not making any profits. They are losing money day after day, giving credit to people whose unemployment compensation has run out, and giving credit to people who are on relief. How are you going to have prosperity? We are not here in this Congress to legislate only for certain types of people and certain types of organizations. Our greatest concern should be the great masses of the people and not just a few.

Mr. REED of New York. Mr. Chairman, I yield such time as he may desire to the gentleman from Ohio [Mr. JENKINS).

Mr. JENKINS. Mr. Chairman, it is a well-recognized fact in our country that the problem of the workingmen, especially those who are ill or who have suffered accidents, has been taken care of and has been considered by the State governments and the Federal Government, and is a matter that should be taken care of. I remember many years ago in our great State of Ohio, we passed what we called the workmen's compensation law and that has proved to be very popular and very necessary. The Federal Government takes cognizance of this problem of unemployment under the unemployment compensation program. This program is a joint Federal-State undertaking.

Pursuant to recommendations made by the President for improvement in our unemployment compensation laws, the Committee on Ways and Means has made an extensive study of the matter. The result of that study is contained in this legislation which is before the House of Representatives today, H. R. 9709. This bill will make four improvements in our unemployment-insurance laws.

These improvements are: First, 1.3 million additional workers would be brought into the system through the extension of unemployment-insurance coverage to employers of 4 or more in 20 weeks. Present Federal law provides for coverage of employers of 8 or more in 20 weeks. I am proud to say that in our great State of Ohio we have for many years had a more far-reaching provision in that we have extended coverage to employers of 3 or more at any time.

The second improvement contained in H. R. 9709 is in the reduction from 3 years to 1 year of the experience-rating

principle to new or newly covered employers. This provision will mean that small business and new businesses will have the advantage of paying reduced tax rates where they have had a favorable employment experience in 1 year. Such business will not have to wait for the 3-year period before being eligible for this tax benefit. It should be pointed out that this reduction in the experience-rating period is optional with the States and merely extends to the States the privilege of taking advantage of this amendment.

The third important change has to do with the method of making tax payments under the program. Because of the expanded coverage it became administratively necessary to eliminate the present quarterly payments and to require annual Federal payments.

The fourth important change was an extension of unemployment insurance coverage to 22 million Federal workers. A Federal worker out of a job is as much in need of unemployment insurance as a worker who has lost his job in industry. Therefore, the Committee on Ways and Means has deemed it appropriate to permit Federal workers to participate in the program.

These amendments are all proper prerogatives of the Federal Government. Suggestions have been made for Federal legislation to require increased benefit levels and extended periods of benefit payments. The Committee on Ways and Means rejected these proposals because they are matters appropriately within the scope of State determination. It has historically been the States' prerogative to set the minimum and maximum benefit amounts and to establish

the duration of such benefit payments. H. R. 9709 would do nothing to deny to the States control over those aspects of the unemployment insurance which have traditionally been a matter of State determination.

I would like to commend my colleagues on the Committee on Ways and Means for this constructive legislation which is before the House today.

Mr. COOPER. Mr. Chairman, I yield such time as he may desire to the gentleman from Pennsylvania [Mr. GRANAHAN].

Mr. GRANAHAN. Mr. Chairman, a statement in the next to last paragraph of the minority report on this bill, signed by five of the Democratic members of the Committee on Ways and Means, should be painted on a big billboard outside the Capitol so that every Member of the House could read it every day while going to and from the Chamber. It might have some good effect.

It is this:

This Congress is about to go home to face millions of unemployed workers. It will go with empty hands, so far as meeting their needs for unemployment-insurance payments adequate as to weekly amounts and number of weeks' duration. They have asked us for bread, paid for on insurance principles; we are about to give them a stone.

Mr. Chairman, in recent weeks we in the Philadelphia area have had the shock of having our city and the surrounding area declared a distressed area. Factory payrolls alone are nearly 8 percent

below a year ago. Unemployment in our area is estimated at nearly 7 percent of the total labor force, and is double what it was a year ago.

This is not just for Philadelphia proper, but for Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties in Pennsylvania, and Burlington, Camden, and Gloucester Counties in New Jersey. This is the great Philadelphia metropolitan area-Greater Philadelphia-and it is a distressed area of substantial unemployment.

The unemployed in our area are largely people who have been working in the metalworking industries and in such other factory-type work as apparel, transportation equipment-ship, aircraft, motor vehicle and railroad production-in electrical machinery, textiles, and so on.

More than 17,000 have lost their jobs in the transportation equipment industry, 11,000 in apparel production, and

thousands in the other industries.

An unemployment compensation bill— even an adequate bill of that naturecould not by itself solve this great employment problem. But an adequate bill could help to cushion the hardship and suffering which result from involuntary unemployment. This bill before the House today is far from adequate in that respect; actually, it does virtually nothing for the unemployed worker in the Philadelphia area.

It does not raise the present maximum benefits of $30 a week. It does not increase the present maximum duration of benefits of 26 weeks. For the average worker in my State, it does not do a single thing. It does not cover in a

accumulated. After that, they went

into debt.

into debt. I do not see how they can hold out until next January 1 to begin collecting unemployment compensation, in case they still have not found employment.

I make this point, Mr. Chairman, because we are dealing with a situation in which workers-no matter how willingin thousands of cases just cannot find employment. This is particularly true of some of our Federal employees who have spent a lifetime in the Federal career service and are now at an age where industry hesitates to employ them. It is most unfortunate for older women among them-they just cannot find new jobs.

If our economy were booming and new job opportunities were opening up, this would not be such a problem. But the evidence shows the job market in the Philadelphia area and elsewhere among centers has been major industrial shrinking, and with all the youngsters coming out of school and entering the labor force, the situation becomes worse.

I am deeply disappointed, Mr. Chairman, that the majority members of the House Ways and Means Committee refused to approve the bill introduced by Representative FORAND, of Rhode Island, and cosponsored by 85 of us on the Democratic side. As I informed the committee during hearings on that bill and the others which the committee considered, the Forand bill would mean substantially increased unemployment compensation benefits for our workers in the Philadelphia area-up to a top of $44 a week under present conditions, for a maximum of 39 weeks, instead of the

single additional non-Federal employee present top of $30 a week for 26 weeks. into the system, because we now have wider coverage in Pennsylvania than this inadequate bill proposes.

There is one thing and one thing only that this bill does for any unemployed Pennsylvanian. If he happens to be a Federal employee who has lost his job in a reduction-in-force, he can now be covered into the unemployment compenbill. That sation system under this sounds fine, for we have had thousands of Federal employees discharged in the Philadelphia area in the last year and a half, in budget cuts; particularly at the Navy Yard. I have long been urging their inclusion under unemployment compensation.

But I would not advise any of those discharged Navy Yard workers or other Federal employees in my district to get excited too quickly about their prospect of collecting unemployment compensation under this bill. I would not advise them to order anything from the grocery store with a promise to pay it right away with an unemployment compensation check. For under this bill, the unemployed Federal employee will have to wait until next New Year's Day to begin collecting unemployment compensation benefits.

Many of them have been out of work for many months, using up their accrued annual leave, their contributions to the retirement fund which they had to draw out and spend for food and shelter, and then whatever other savings they had

The Reed bill now before us, on the other hand, does not increase benefits a single cent or increase their duration in Pennsylvania by so much as a single day.

I will support the amendment proposed by Mr. FORAND to this bill to increase benefits along the lines of the formula originally suggested by President Eisenhower in his plea to the individual States-a plea which none of the States has heeded and which the Republican members of the Ways and Means Committee refused to write into this bill. From the temperament of the Republicans in the House, however, it looks very much as if the Forand amendment will fail. If it does, then each Republican Member of this House, as he prepares to go home to campaign for reelection, should remember the words of the minority report on this bill-the words I cited at the start of my talk,


This Congress is about to go home to face millions of unemployed workers. It will go with empty hands, so far as meeting their needs for unemployment insurance payments adequate as to weekly amounts and number of weeks' duration.

Mr. COOPER. Mr. Chairman, I ask unanimous consent that all Members who desire to do so may extend their remarks at this point in the RECORD on this bill.

The CHAIRMAN. Is there objection? There was no objection.

Mr. RODINO. Mr. Chairman, within the last 6 months Congress has noted

with ever growing concern the increasing magnitude of unemployment in these United States. If we are, as statistics If we are, as statistics seem to show, in the first phases of a recession, we must immediately take steps to assure ourselves that the recession does not automatically turn into a depression and wreck the country on the shoals of economic disaster. Surely, as men on whom the economic destiny of the country has been placed, we have learned sufficient lessons from the past 30 years to avoid that hazard.

Unemployment is not, at this time, a theoretical threat. It is a real and present danger. As of early May, 3,305,000 of the labor force were out of work. The

Chairman of the Economic Advisors of the President, Mr. Burns, has indicated just how serious this figure is when he


A level of unemployment which exceeds two or two and a half million is something to be taken very seriously by the Government and the country.

H. R. 9430 is a serious consideration of this problem. It gives due recognition to the fact that unemployment is governed by nationwide economic forces, and should be realt with on a nationwide basis. If we do not take up this matter, if we rely on local responsibility, we shall develop the same bottleneck of labor mobility that the Elizabethan poor laws created, where every laborer, in order to receive benefits, had to stick closely to the parish in which he was inscribed. We are an industrial nation, dependent on labor mobility. We would be the laughing stock of the world, if we borrowed a page from an era that even Adam Smith decried as blocking progress in the 18th century.

According to statistics available as of June 19, 1954, the national average for insured unemployed drawing payments is 5.4 percent for the Nation. At the same time it was 6.3 percent for the State of New Jersey, which is above the national average. This does not include those who have exhausted their benefits, or those who are unemployed but not covered by unemployment insurance. As of May 1954, the city of Newark was in class III, showing a slight labor surplus, chiefly in the fields of electrical machinery, transportation, and shipbuilding. Throughout the Nation there are 51 major areas with anywhere from 6 to 12 percent of unemployment, that is in class IV denoting substantial or very substantial labor surplus.

Percentages are cold figures. What these percentages mean in actual round numbers are such totals as 2,213,000 insured unemployed in the last week of February, and 2,174,000 in March. One hundred and fifty thousand of these benefit claimants exhausted their benefits in March 1954, and to this must be added the 351,000 who had exhausted their benefits previous to that month. We arrive at a figure of those not receiving any compensation that edges above one-half million. Most of these major Most of these major layoffs were in the mining, manufacturing, and so forth, industries, primary industries, whose slowdowns or shutdowns affect the whole economic tempo of the Nation.

Moreover, as the public members of the Committee on Intergovernmental Relations of the Federal Advisory Council point out:

Some of the major concerns of the Federal Government in this field seem to be: (1) The instrument of unemployment insurance has become the accepted first line of defense against loss of income due to unemployment and provision should be made that it will be so used in all parts of the country. (2) The investment and liquidation of sizable unem

ployment insurance reserve funds has a significant impact upon the functioning of the banking system, the security markets, and the fiscal policies of the National Government.

H. R. 9430 is intended as the inte


grated answer to this problem of unemployment insurance. It also represents the culmination of a total economic proThe House of Representatives in passing the revision of the Social Security Act on June 21, 1954, provided for that segment of the working population which is retired, or some day will retire. It thereby showed intelligent concern for the purchasing power of those no longer in the labor force. Further, Congress has shown its concern with the purchasing power of farm income in passing Public Law 312, which increased the borrowing power of the Commodity Credit Corporation to enable the Corporation to maintain the price-support program entrusted to it. In addition, the Congress is sympathetically considering a further increase in the CCC's borrowing power.

Can we pass such laws and then act as though we had no realization of the necessity of keeping up the purchasing power of the unemployed? Unless we do so, we are going to be in the disastrous and ridiculous position of being a master architect of a two-legged stool. For without improvements to the unemployment compensation system that is all we

In taking action on unemployment compensation along lines indicated in H. R. 9430, the Congress provides itself with an unparalleled chance to complete the work already well begun. This bill affords us an opportunity to provide adequate benefits to those members of the labor force faced with a break in their employment record.

I put my emphasis on the word "adequate." And in line with that objective I urge the Congress to pass H. R. 9430, the only bill which has a comprehensive program of strengthening the whole unemployment compensation system. Moreover, in addition to the 86 congressional cosponsors of the bill, persons of good will and interest, particularly those who represent the laboring class, have expressed their approval of its provisions.

One aspect of the situation that must be pointed out, is that we are faced with this problem not on grounds that there are not enough funds in most States, but because of the great reluctance of the States, in economic competition with each other, to be too liberal with their reserves. These reserves have reached a level of almost $9 billion at the end of 1953. Yet only about $1 out of each $3 in lost wages and salaries is being re


placed by unemployment-insurance payments. This is not sufficient to ease substantially the impact of unemployment and to avoid its repercussion on the economy of the country as a whole, and particularly in local communities where there is substantial unemployment. small slump will so greatly impair buying power that ever expanding circles of unemployment will follow. The importance of properly providing aid during this transition period cannot be too emphatically stressed.

The President of the United States has stated:

Unemployment insurance is a valuable first line of defense against recession. * * * But even as a first defense the system needs reinforcement.

H. R. 9430 provides this needed reinforcement. The Congress has the duty and the responsibility of bringing about these improvements by establishing minimum standards for size of weekly payments, duration of payments, disqualifications and financing. Only by such action can the system be made adequate to carry out its intended purpose of providing basic protection to unemployed workers.

H. R. 9430 proposes three things, each of them simple; each of them of paramount importance for the accomplishment of a genuinely workable system of unemployment insurance. First of all, it would extend unemployment compensation to new categories of workers; secondly, it would set minimum standards with respect to the conditions under which such compensation will be paid as well as to the amount and duration of such compensation; and thirdly, it will make other overall improvements in the structure and administration of the unemployment compensation system. Let us look at each of these in turn:

First. New categories of workers will be brought under the unemployment compensation provisions.

The definition of "employee" is changed to make various persons outside the common-law relationship of employer and employee which presently prevails come within the definition. In fact, the definition is the same as that used in the OASI provisions of the Social Security Act and covers persons who would formerly have had the status of independent contractors because they were employed as agent-drivers, or commission-drivers, full-time life insurance salesmen, persons working according to specifications of an employer but within their own homes, or traveling or city salesmen engaged in full-time solicitation business. The only exceptions are those individuals who have a substantial investment in the facilities used in connection with the performance of services, or persons performing services which are in the nature of a single transaction.

The definition of "employer" is enlarged to include persons having at any time during the taxable year one or more individuals in employment. First of all, this concept of "at any time" does not mean every casual employee who comes along. The act expressly excludes from the concept of employment people who

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