tives. I had hoped that this legislation would not only broaden and extend the coverage in this field of unemployment compensation, but would also liberalize it. I fear that H. R. 9709 as presently written does little in the way of liberalizing legislation. It does broaden it by It does broaden it by bringing under coverage employers who employ less than 8 individuals, if they are not employing less than 4. I understand that will probably bring 1.3 million additional people under coverage.

I was interested in the remarks of the gentleman from Wisconsin [Mr. BYRNES], who was opposing that provision, and I would like to say that I can see no reason why the protection accorded in the way of unemployment compensation should be any different as between employers who employ 8 people and those who employ only 4 people. I can see that many of those smaller employers might be farm people. I could readily understand that in the remarks of the gentleman from the State of Wisconsin. That is a matter where the reaction is local and does not approach it from the standpoint of national consideration.

Mr. BYRNES of Wisconsin. Mr. Chairman, will the gentleman yield? Mr. BAILEY. I yield.

It

Mr. BYRNES of Wisconsin. My only point was that each State should be able to make that determination itself. There is nothing to prohibit a State from covering employees and employers in two-man plants, where there is just an employer and one employee. That is the only point I wanted to make. should be a question for the States. I am not saying at all that some States should not cover, as they do today, employers of one or more employees, but it would seem to me that various areas in the country have different problems, and their State governments should be able to make that determination unrestricted by federally imposed minimums. Mr. BAILEY. I thank the gentleman for his comments.

when he is unemployed as though he were 1 of 5, as the gentleman from Pennsylvania [Mr. EBERHARTER] said.

I am also in favor of the provisions that the President recommended, but I think the States should do it and I was wondering why the State of West Virginia had not done it.

Mr. BAILEY. West West Virginia, Mr. Chairman, is more vitally interested in the amount of the weekly payment that is made available to the unemployed. Presently our maximum is $30. Under the proposal which will be offered by the distinguished gentleman from Rhode Island [Mr. FORAND], those weekly payments would be upped to a total of $46 as against $30 in the present payments. Mr. FORAND. Mr. Chairman, will the gentleman yield?

Mr. BAILEY. I yield.

Mr. FORAND. Is it not a fact that one of the principal reasons why the State of West Virginia has not come down to one employee or that the benefits have not been increased or that the benefit period has not been lengthened is because of competition of other States? It is a protection seeking to protect the industry in a given State that keeps the State from broadening out whereas if we had a Federal scale under an act of Congress they all would come under it.

Mr. BAILEY. That is a fact. I appreciate the comments of the gentleman from Rhode Island. Let me say that in a State like my State of West Virginiaand it is true in many others, that there is considerable unemployment at the present time. If there is any excuse for unemployment compensation it is to stabilize the national economy-and I have to bring up a discussion of our trade policies-unemployment is down in the State of West Virginia due to the fact that 5 or 6 of our major industries are affected by foreign imports. We have some hundred thousand or more unemployed, we have 136,000 people getting Federal grants of surplus food. It is a Mr. KEAN. Mr. Chairman, will the situation in which if $46 a week were gentleman yield?

made available instead of $30 it would Mr. BAILEY. I yield to the gentle- stabilize to a certain extent the purman from New Jersey.

Mr. KEAN. I notice in a chart in the hearings that in the gentleman's State of West Virginia they only cover employers of eight.

Mr. BAILEY. That is right.

Mr. KEAN. Your State has been under the control of your party for a great many years. Why has not the State of West Virginia gone out and covered employees of one, as most States do now?

Mr. BAILEY. Let me say to the gentleman from New Jersey that my State was one of the first States to enter the unemployment compensation field. We started off with 26 weeks at $25 a week. Our legislature some years ago changed that to 24 weeks at $30 a week, minimum payment. That is the present rate of

pay.

Mr. KEAN. But you still do not cover employers of less than eight, as most of our States do. We in New Jersey are now down to 4 and a bill has passed the Assembly for 1, and I am very much in favor of 1; because a man who is the sole employee is just as much out of a job

chasing power of those unemployed people; it would tend to make better business for the merchants and other people who are in business in that area by making more purchasing power available. We are very much in favor of the proposal that will be made by the gentleman from Rhode Island in his attempts to liberalize this bill. I regret tempts to liberalize this bill. I regret only that he is not extending the period only that he is not extending the period of weekly payments above the present 21-, 22-, 24-, or 26-week limit, as the case may be, to a greater length of time.

While it looks as though our employment situation in West Virginia is improving it is due to the fact that many unemployed have drawn all their unemployment compensation. Because of this such people are not longer carried as unemployed, although in fact they are and, the unemployment compensation payments have been reduced. But that does not account for the fact that there is still unemployment and that the unemployed have not returned to work.

I am very much interested in lengthening the number of weeks the payments

may be made. That is in the bill originally introduced by the gentleman from Rhode Island and of which I am one of the co-sponsors, but it will not be in the two proposals he intends to offer today to the legislation.

I want to associate myself with the gentleman from Rhode Island, and I am sure that the Representatives from all of the States that are vitally affected, as my State of West Virginia is, are interested in bringing some relief to this serious situation.

Mr. COOPER. Mr. Chairman, I yield 7 minutes to the gentleman from Maryland [Mr. GARMATZ].

Mr. GARMATZ. Mr. Chairman, when the people of this country read in the newspapers that we are taking up and debating an unemployment compensation bill, I am sure they will be under the impression that we are actually doing something about the present inadequate benefits.

They will be in for a rude shock if they read down further in the account and see what it is we are actually taking up. In Baltimore, as in most cities, the people generally know we are in a situation of unemployment crisis. In Baltimore, for instance, we have twice as many people on the unemployment compensation rolls in the city alone as there were last year in the whole State of Maryland. And the Baltimore Sun reported Tuesday that the number of jobs in Baltimore City fell off 2,700 more from April to May, contrary to the usual seasonal upswing.

In other words, instead of unemployment dropping in that period, as it usually does, we saw it increase.

With all of our joblessness, and idle plant capacity, and virtually closeddown shipyards and other installations, however, we in Baltimore are not as badly off as are many of the other major industrial areas of the Nation which recently went on the distressed list. So we can only imagine the extent of the crisis in cities with 6 or 12 or even a higher percentage of unemployment.

And bad as the situation is nationally, we have the forecast from the National Planning Association that if the economy continues at its present level without substantial change or improvement, we shall have anywhere from 5.5 to 6.2 million unemployed in the country by next spring.

This will mean nearly a doubling of present unemployment. And the present level of unemployment has already been described by the Chairman of the President's Council of Economic Advisers, Dr. Arthur Burns, as intolerable. It is hard to find the right adjective to describe a situation twice as bad as intolerable.

Under the circumstances, Mr. Chairman, it is obvious that the administration and the Congress should be taking powerful corrective steps. But nothing of the sort has been undertaken.

Instead, we have here a bill which purports to improve the unemployment compensation system, but an analysis of it will show that it will have practically no effect whatsoever in Maryland or in many other States.

It would cover in under the unemployment compensation program workers in businesses employing four or more persons. In Maryland, and in many other States, we already do at least that wellin Maryland we cover in all employees otherwise eligible, regardless of the number their employer has on the payroll. So that will have no effect in Maryland.

The bill will also cover in Federal employees. That is an improvement I heartily support and which I urged upon the Ways and Means Committee in my testimony on this matter last month. But the bill as it has been reportedand under the rule it cannot be amended from the floor in this particular-specifies that unemployment compensation cannot be paid to jobless Federal employees until after next December 31. I trust that most of the slashing of Federal agencies has already taken place and that most of the employees slated to lose their jobs have already done so by now, so that this, too, would have no effect right now and probably very little effect after January 1.

Otherwise, the bill does nothing for any worker in Maryland. It does not raise benefits for a single unemployed worker. It does not increase the period

of benefits.

So I would describe this bill, Mr. Chairman, as a garden hose to use on a three-alarm fire. The unemployment situation is dangerously acute; yet this bill is of no significant value in combating it or in alleviating the hardships of unemployment.

The Republican leadership here in the House must be painfully aware of the pitiful limitations of this measure to have brought it up here under the circumstances it provided for House debate. We have in effect a gag rule-no amendments except two intended to be offered for the Democrats by the gentleman from Rhode Island, Representative FOR

One would extend the maximum period of benefits to 26 weeks-which is what we already have in Maryland. The The other would increase maximum benefits to one-half a worker's regular pay, up to a limit of two-thirds of a State's average weekly wage. In Maryland, this would mean an increase in the top basic benefit of about $11 a week-from $30 to about $41.

Only the second amendment would help unemployed Marylanders. I shall, of course, support both amendments, because I believe all States should be brought up to at least the 26-week standard. I would like to go further and see the maximum period increased to 39

weeks.

That was one of the many additional improvements proposed in the Forand bill, which I and more than four-score other House Democrats joined in cosponsoring. But under the rule imposed upon us for consideration of this bill, we cannot even propose that amendment from the floor.

I object to this kind of gag rule on so important a legislative issue, affecting so many American workers. It is unfortunate that the Republican leadership has imposed such a gag, but as

I said, it is understandable. To open I said, it is understandable. To open up this bill to general amendment from up this bill to general amendment from the floor would expose its weaknesses and limitations and show up the inadequacy of the administration's approach to the unemployment problem.

There is nothing dynamic about this bill. It is a bust.

[From the Baltimore Sun of July 4, 1954] JOBLESS IN UNITED STATES SEEN DOUBLING BY NEXT YEAR-PLANNING GROUP URGES GovERNMENT TO ACT TO END INEXCUSABLE IDLENESS IN NATION

WASHINGTON, July 3.-The National Planning Association said today unemployment will nearly double over the next year at the present rate of economic activity. It urged the Government to consider action to end inexcusable idleness of part of the Nation's gigantic production machine.

The report said that if the economy runs along over the next 12 months at about the present pace of $25 billion gap will develop between national production and the level of production that would provide full employment.

CONGRESS COULD BE CALLED

The study group, a private association of businessmen, labor union leaders, economists, and bankers, said it assumes the administration is now reexamining defense needs.

ticipate)," the association said, "that national security calls for bigger defense spending, a special session of Congress in the fall could consider legislative authorizations and supplemental appropriations for the additional measures."

"If this reexamination shows (as we an

If the administration decides there is no

ing, the group said, "then measures should urgent need for stepped-up defense spend

be considered to promote expansion" of the economy to "full employment" levels.

SIGNERS ARE NAMED

The report was entitled "Opportunities for Economic Expansion." It was signed by international banker, H. Christian Sonne, chairman of NPA's steering committee and

chairman of the board of Amsinck, Sonne &

Co.; and by the 10 other members of the steering committee. These included Frank

Altschul, chairman of the board of General American Investors Co.; Soloman Barkin, di

rector of research of the Textile Workers Union of America; Clinton S. Golden, executive director of the trade-union program at Harvard University; marketing adviser, Elmo Roper; and New York businessman-economist, Beardsley Ruml, author of the pay-asyou-earn income-tax collection plan now in use. Another signer was Gerard Colm, econo

mist for NPA.

Administration economic advisers asked for comment on the report made no response.

The NPA, which periodically brings out studies on the national economy, based its current report on the assertion that "it is ment, production, and purchasing power, certain we do not have 'maximum employstated as an objective of United States policy in the Employment Act of 1946."

"Involuntary total or partial idleness of a substantial number of workers and underutilization of productive capacity," the report said, "are inexcusable in a perilous world situation."

SEVENTEEN-BILLION-DOLLAR GAP

NPA said that the business downturn which started last midyear-which NPA said has apparently run its course-reduced the Nation's total annual production of goods and services from the $367 billion of 1953 to a rate of $358 billion in the first quarter of this year. The $367 billion gross national production of last year, NPA said, was the full

Virtually standing still economically, the committee said, would boost unemployment next year from the 3,305,000, or about 5 percent of the labor force, to about 8 or 9 percent of the labor force. Colm told a news conference on the report that an addition of about 1 million to the labor force could be expected during the year. The committee was, therefore, estimating that, if the economy remains at virtually the present level over the next 12 months, unemployment would rise by next spring to between 5,500,000 and 6,200,000.

The committee attributed the recent recession to the failure of private demand to rise in accord with the rise in productive capacity at a time when Government spending and business spending for expansion began to level off.

The committee pronounced itself unfit to pass on defense needs or national strategy. But, it said, unless four questions it posed could all be answered "yes" it felt security mittee said, "with actual production runoutlays should be stepped up. And, the com

ning about $15 billion below capacity and with some idle resources in men, plants, and materials, it simply makes no sense to contend that national defense programs must be reduced for economic reasons.'

Administration spokesmen say frequently that they are trying to reduce defense spending to avoid putting an undue strain on the economy.

Mr. GARMATZ. Mr. Chairman, I ask unanimous consent to revise and extend my remarks at this point in the RECORD, and include an article.

The CHAIRMAN. Is there objection to the request of the gentleman from Maryland?

There was no objection.

Mr.

Mr. REED of New New York. Chairman, I yield 4 minutes to the gentleman from Kansas [Mr. REES].

Mr. REES of Kansas. Mr. Chairman, I take this time, if I may, to propound 2 or 3 questions in respect to this proposed legislation, particularly with reunderstand this legislation, you are putgard to the Federal employees. As I ting about 2.5 million Government employees under this law that have never been covered before. Is that correct?

Mr. REED of New York. That is correct.

Mr. REES of Kansas. What are we going to do with Federal employees who work for short periods of time? Suppose someone is employed in my office or anywhere else in the Federal Government and works for 2 or 3 or 4 up to 6 months. Does he come under this law and does he get any benefits under it? Mr. REED of New York. If he is out of employment.

Mr. REES of Kansas. How do you figure out how much you are going to pay him?

Mr. REED of New York. Well, it is covered by the State law. Under the bill the Federal workers' benefits are determined under the unemployment-compensation law of the State where they were last employed.

Mr. REES of Kansas. In other words, if someone who comes from the State of Ohio works for me in my office and becomes unemployed, what becomes of him?

Mr. REED of New York. The bill does not apply to elective legislative officers.

Mr. REES of Kansas. If a person who worked for the War Department, who came from Ohio, became unemployed, he would possibly then get different compensation than if he came from New York; is that right?

Mr. REED of New York. No. That would be based on the law of the District of Columbia.

Mr. REES of Kansas. Because he was employed in the District Mr. REED of New York. Mr. REES of Kansas. he worked for the Federal Mr. REED of New York.

of Columbia? That is right. Even though Government? That is right.

Mr. REES of Kansas. The fact that he worked in the District of Columbia determines the question of compensation that he gets?

Mr. REED of New York. That is the criterion.

Mr. BYRNES of Wisconsin. Mr. Chairman, if the gentleman will yield, I think it might be made clear to the gentleman from Kansas that it depends on where the Federal employee is working. The employee that came from Kansas, let us say, and worked for the Federal Government here in Washington would be paid on the basis of the District of Columbia unemployment compensation law, but if that same employee went from Kansas to Wisconsin and was employed in Wisconsin, let us say, in the Veterans' Administration office there and then became unemployed, he would get his unemployment compensation on the basis of the Wisconsin law.

Mr. REES of Kansas. As I understand the chairman of the committee, then, a person who works in a congressional office or legislative office is not included under this act. Is that right? Mr. REED of New York. He is included unless he is an elected official. Mr. REES of Kansas. Are there other exceptions for Federal employees?

Mr. Chairman, we have no more requests for time.

Mr. COOPER. Mr. Chairman, I yield 10 minutes to the 10 minutes to the gentleman from Michigan [Mr. RABAUT).

Mr. RABAUT. Mr. Chairman, I take this time to make it known that I am in favor of the amendments to be offered by the gentleman from Rhode Island [Mr. FORAND]. I understand that the first amendment is to fix nationwide the benefits to be paid the unemployed; the maximum to be 66 percent of the State average weekly wage and the minimum not less than 50 percent of the individual worker's weekly wage. The second amendment is to fix the duration of benefits at 26 weeks.

There is nothing new in these amendments of the gentleman from Rhode Island [Mr. FORAND], so far as the administration is concerned, because we had it on the President's own testimony, in the Economic Report, where it says:

*

*

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

Among specific specific proposals, under "Benefits" it says further:

It is suggested that the States raise these dollar maximums so that the payments to the great majority of the beneficiaries may equal at least half their regular earnings.

Further, as to "Duration," it specifies 26 weeks.

The Secretary of Labor in the Republican administration, Mr. Mitchell, in his letter to the State Governors under date of February 16, said, on the subject of benefits:

At its most recent meeting in January the Federal Advisory Council on Employment Security took action supporting the President's recommendations on improving weekly benefits. The Council recommended that in each State, the maximum weekly benefit amount should be equal to at least 60 to 67

percent of the State's average weekly wage.

With reference to duration he recommended the same period, 26 weeks.

The Assistant Secretary of Labor, Mr. Ciciliano, in a letter to the heads of the State unemployment compensation. agencies, dated February 16, said:

As also pointed out in the letter to your Governor a recent recommendation of the Federal Advisory Council, in line with the President's Economic Report, suggests as a ceiling on weekly benefits that weekly maximums be equal to 60 to 67 percent of the State's average weekly wage.

When the President was asked what

Mr. REED of New York. Yes.

Mr. REES of Kansas. The 2.5 million Government employees?

governors in the matter of calling the State legislatures into session to implement his own recommended program, he said that he had no intention to urge them. He said he did not think he would

Now he is going to meet with Now he is going to meet with the governors in July. He made this statement in his press release, I think it was on June 16. Now the country has an announcement from the first industry in the United States of America, the automobile industry, that in the second half of this year they intend to cut production, that production is going to

be cut, it is understood, 33% percent. If that takes place, and I want my colleagues from Michigan on the Republican side to listen to me, it is going to put on the unemployment rolls in Michigan alone 300,000 people. It is well enough for the people here in the House to say this is a State problem. We had a governor that grabbed the ball with the President of the United States, and he is a Democratic governor, G. Mennen Williams, in the State of Michigan, and he went down the field for a goal. But when the Republican legislature of our State acted they used an eyedropper when it came to putting some more funds in the compensation bill. A $3 increase, that is what they gave. Three dollars in a man's family life in the economy of today is something that does not need much explanation to anybody in this House who deals with the money problems of this country.

The legislatures of several States have met, but only three have acted-Virginia, California, and Michigan. Michigan has done the best by her unemployed, but it was not enough. We have the record-in my own State-providing a 26-week period-but there is a jigger in it requiring that work be performed for 39 weeks in the current year. I do not know how they are figuring the short week period in that 39 weeks for several of the big industries of Michigan are on a 3-day short week.

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

Mr. RABAUT. I yield to the gentleman from Pennsylvania.

Mr. EBERHARTER. I noticed an item in one of the newspapers in Washington yesterday where a survey was made of the dealers in the automobile industry throughout the country and it was the consensus that the dealers recommended to the producers a further reduction in the production of automobiles; so evidently the dealers are overstocked now with too great an inventory, so we can look for further reductions.

Mr. RABAUT. I thank the gentleman for bringing that to my attention. Auto production in the second half of the year will be at least 333 percent below the present rate. The new-car inventory was 638,000 as of May 31 comparted to 430,000 as of the same date in 1953.

Do the Members of this House who are going out in the fall to give an accounting of their stewardship intend to use the television so they will be away from the voters while they make their appeal, or do they intend to dress themselves up with a mask and a chest protector of a baseball outfit to walk among the people? This is going to be serious. The automobile business is the largest business in this country. Mr. Fairless and Mr. Grace, of the steel industry, say that they are optimistic, that the 72 percent production of today will continue. How is it going to continue with this fall-off that was announced by the automobile industry, the cutback of 33% percent? The auto industry is the best steel customer in the United States of America and no one denies that.

Mr. RABAUT. I yield.

Mr. EBERHARTER. I remarked before that today steel production is only 59 percent of capacity. A few years ago is was 100 percent production.

Mr. RABAUT. You know we get these figures. They are handed to us and we are supposed to take them. We take them for what they are worth, but the figure was given to me that steel production is running 72 percent of capacity. If it is lower than that, the result is going to be worse.

Do not think when I speak to you, ladies and gentlemen of the House, that I am addressing only the people in Michigan. The automobile has affected every section of America. It is important to your district. You know it as well as I do. It is time we did something here until these State legislatures act. It is time we took charge of the situation. It has been recommended by a Republican President. It has been written about by a Republican Secretary of Labor. It has been encouraged to the State unemployment compensation agencies by the Assistant Secretary of Labor. Why should we not do something about it? We ought to get behind this Forand amendment; and if you do, you will be assisting the unemployed and benefiting the economy of our Nation.

Mr. COOPER. Mr. Chairman, I yield 5 minutes to the gentleman from Virginia [Mr. SMITH).

Mr. SMITH of Virginia. Mr. Chairman, if I may have the attention of the gentleman from New York [Mr. REED]: in the colloquy which the gentleman recently had with the gentleman from Kansas [Mr. REES] I understood the gentleman from New York to state that the employees in the legislative branch of the Government were not included. wonder if that was an inadvertent statement.

I

Mr. REED of New York. That was an inadvertent statement. Legislative employees are covered by the bill. The exclusion which I had reference to is as to elected officials.

slump in fabricating industries which the whole country is experiencing.

Mr. Chairman, a year ago my district was still economically healthy. Some industries were experiencing economic hardship, but employment was high. In this past year there has been a drop in factory employment of 10 percent. The worst information that can come to a district like mine is that the United States Department of Labor has declared it a so-called group IV area. Reading was classified group IV in May. The designation "group IV" means that over 7 percent of the total nonagricultural work force is out of jobs and looking for work. It signifies an area of substantial labor surplus. The Department of Labor has classification which signifies greater hardship.

These are more than mere statistics. Behind the figures are thousands of families whose income has been cut by two-thirds or three-fourths or more. They represent husbands and wives and children who do not know whether they can meet the next rent payment, who know that if illness strikes, they cannot meet their medical expenses. The number of families who have been forced to go on relief has increased, and as those in this Chamber know, relief payments are far below the minimum requirements for a reasonable standard of living.

The fall in the purchasing power of these people will be felt far beyond their own doorsteps, Mr. Chairman. The fact that these people do not have money with which to buy the things they need will inevitably affect the small-business men and farmers of the community. Then, it will further affect the adverse employment situation in industries manufacturing semidurable and durable goods.

Mr. SMITH of Virginia. Then the employees in the legislative branch are included under the bill? I wonder if the gentleman would know how long they have to be in the employ of the Federal Government before they become eligible under the terms of the bill?

amendments.

Mr. BYRNE of Pennsylvania. Mr. Chairman, will the gentleman yield?

Mr. EBERHARTER. Mr. Chairman, I yield 5 minutes to the gentleman from Kansas [Mr. MILLER].

Mr. MILLER of Kansas. Mr. Chairman, I come from a district and a State that will not be so greatly concerned at the present time with the provisions of this bill. But as I have listened to the arguments it occurred to me that we are doing nothing in the way of prevention. When some years ago it was permissible to mention China without any apologies, we heard that over there they had nothing but preventive medicine. They hired physicians to keep them well rather than to make them well. I am wondering whether our economic situation does not need some preventive medicine rather than curative medicine, such as we are discussing today.

There seems to be at the present time considerable unemployment, and there seems to be fear that it will become worse. In this Nation where there is so much to do, it seems this Congress is taking the attitude that all we can do when a man is out of a job is to pay him until he can find a job of similar kind in similar employment. That is all we can do about it.

I would like to ask the chairman of the committee, the gentleman from New York [Mr. REED], if this bill contains any provision by which pains are taken to find jobs for these men rather than simply to pay them while they are out of work?

Mr. REED of New York. Let me tell you something that I would like you to relay to your people and tell everybody: We have just sent a bill to conference which, if it is passed, will greatly increase employment throughout the country, and that is the bill H. R. 8300. Many telegrams and telephone calls are coming in to the office, the effect of which is that as soon as the House bill H. R. 8300 is passed we will put 10,000 people to work. That is something that will help labor. It is not in this bill; it is in that bill.

Mr. MILLER of Kansas. I thank the gentleman very much. I do not know what the nature of that bill is, but I have in mind personally some things that could be done. Not too many days ago we passed a bill through this House appropriating a good many hundreds of millions of dollars for soil conservation and flood control, but we made very little provision for implementing such programs. That is the most important legislation that could possibly be before this House with the exception of immediate national defense.

I introduced a bill into this body when I first came here over a year ago requesting that this House create a commission under the direction of the President to study and provide a program of soil conservation so that at any time we have slack employment there will be a place to put these men to work where they will be doing something for the good of the country for all time.

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

I have said here will remain in the minds of the present Congress, for I do assure you that we are rapidly losing the best soil that we have in this country-400,