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OARWIN J . MESEROLE
PRESIDENT
LOUIS H. PINK
ALFRED J. BOULTON
JOHN A. RYAN
MARY KINGSBURY SIMKHOVITCH
SECRETARY-TREASURER
VICE-PRESIDENTS
DIRECTORS
C
LEOD D. BECKER
HARRIOT STANTON BLATCH
ALFRED J . BOULTON
CHARLES K. GILBERT
JONAH J. GOLDSTEIN
HELEN HALL
F. ERNEST JOHNSON
RALPH JONAS
HARRY W. LAIDLER
OWEN R. LOVEJOY
NATIONAL
DARWIN J. MESEROLE
HENRY NEUMANN
LOUIS H. PINK
WALTER B. SEYMOUR
MARY KINGSBURY SIMKHOVITCH
UNEMPLOYMENT
CHARLES STELZLE
FLORENCE GUERTIN TUTTLE
FRANK P. WALSH
ACNES D. WARBASSE
CHARLES C. WEBBER
LEAGUE
(INCORPORATED 1O23)
Object: To secure employment for all workers in times of business depression through
the establishment of public works by Federal, State and Municipal Governments.
42
13 EAST 37TH STREET
NEW YORK
January 27, 1939
MURRAY HILL 3-3699
Hon. Lawrence Clayton, Assistant to the Chairman
Board of Governors
Federal Reserve System
Washington, D.C.
Dear Mr. Clayton:
Thank you for the courtesy of your letter of January 26.
The Times did publish my letter,copy of which I enclose.
C
You refer to the last paragraph of my letter to Mr.Eccles.
In this connection the enclosed pamphlet entitled,"unemployment and The Stabilization of Business", issued by our
League in 1924, may be of interest. It is our appeal to the
business man, but was unheeded as we had "entered the New
Era" and there "would be no more business depressions".
Very sincerely yours,
DJM:HC
c
Economists of America on Public Works
A confidential Washington Hews Service recently sent out the following
statement:
"One of the most conservative advisers of the Government has stated very
emphatically that the country is in for five years of depressed conditions unless the Government spends from 8 to 10 "billions on public works,
and does so promptly."
One hundred and fifteen economists from our largest universities and colleges
signed a statement in January, 1931, of which the follOY/ing is the closing "paragraph:
"Public works, projected on a scale to check the present "business depression, would, of course, require hundreds of millions of dollars, or possibly a billion, to be effective, but the cost cannot be compared to the
loss sustained "by all classes of the Nation if such expenditures are not
made. Taxation for such projects, equitably distributed, would not "be
seriously felt by any group. It is difficult to understand the timidity,
in this crisis, of business men and legislators. The need of the hour
is courage to act along lines of long-established economic principles.
The time has come to tent them on some adequate scale."
Professor Wallace Brett Donham, Dean of the Graduate School of Business
Administration, Harvard University» says in his "book "Business Adrift",
publi&h&dAn 4pril.,. 1951:
"Whenever an unemployment emergency exists for any reason the government
should steadily offer to the unemployed work on such (public works) projects...As projects were undertaken by the government the need for "buying
materials would stimulate industry and particularly raw materials. The
effect would "be to stabilize industry and employment.,.
"The charges imposed on capital, industry and the government budget by
such a general plan would in my judgment "be far less than will inevitably
result from prolonged bad business and consequent burdens unless something
is done to cure the present situation."
Leo Wolman, Professor-elect of Economics, Columbia University, and author
of "Planning and Control of Public Works", published by National Bureau
of Economic Research (1930), in an article in Few York Evening Post,
April 11, 1931, says:
"In view of these plain and accepted facts, it is a fair question whether
the time is not ripe for the adoption of a bold and constructive program
of business recovery. Such a program, formulated many times in the
course of the depression, but indubitably most appropriate and effective
at this juncture, Involves the flotation of a Federal bond issue in the
amount of three billion dollars to be expended as quickly as possible in
various forms of public construction...Conservatively estimated, the
expenditure of three billions should result in the direct employmet of
some 750,000 workers and the indirect employment of substantial numbers
in the preparation of materials and machinery, not to speak of the encouraging influence that such a measure will have on the state of mind
of the leaders of business and industry."
(Over)
Activities of the National Unemployment league
420 Madison Avenue, Hew York City
December, 1922: League organized. Its chief object - to secure employment
for able-bodied workers in times of business depression and unemployment
by the extensive expansion of public works by Municipal, State and
Federal Governments. Officers and Board of Directors practically unchanged since organization.
February, 1923: Bill sponsored by League ("Frelinghuysen-Zihlmann Bill") introduced in both Houses of Congress. Purpose of Bill - advance planning
of public works so that when a business depression and acute unemployment
period occurred there would be blue prints of work of a necessary and useful nature, in the hands of the proper Departments of the Federal
Government, in readiness for any bond issue or appropriation Congress
might authorize.
This Bill was re-introduced in later Sessions of Congress, in both Houses,
but no action was taken*
March, 1930: League's Appeal to the President and Congress for appropriate
legislation for the inauguration of a system of public works to meet the
requirements of the acute and menacing situation in our country was
unanimously adopted by the League's Board of Directors on March 7th.
This Appeal was subsequently endorsed by several hundred leaders of business, economic, religious and social welfare groups.
-
April, 1930: April 27th was designated "Unemployment Sunday". Religious, social welfare and other groups throughout the country were urged to endorse
the national Unemployment League's Appeal.
June, 1930: On June 4th all signed Appeals and Resolutions were personally
handed to the President by the League's delegation. The President gave
a full hearing but was unwilling to recommend to Congress action along
the lines suggested.
February, 1951: following months of intensive work, a Bill (H. R. 17279) sponsored by the League, providing for a $3,000,000,000 Federal bond issue,
was introduced in the House of Representatives by Hon. George Huddleston,
of Alabama. The amount specified, three billion dollars, was the sum designated in the so-called "Hoover Plan" presented to the Conference of
of Governors in New Orleans in November, 1928, by Governor Brewster of
Maine, in the name of President-elect Hoover and at his request.
March, 1931: By the action of the social F/elfare agencies and the Prosser
Committee in appealing to the City of Hew York's Board of Estimate (see
p. 3, leaflet attached) social responsibility was placed upon Government,
where the taxing power resides. Communication from the League's Board
of Directors to the Board of Estimate herewith.
Next objective: To secure a Special Session of Congress for the purpose of
enacting into la?/ our Bill, or a similar measure, for the relief of present intolerable conditions.
( Over )
This article is protected by copyright and has been removed.
The citation for the original is:
Meserole, Darwin J. “Senator Byrd Disputed: Federal Debt Called ‘Insignificant’ as Against
‘Failures’ Laid to Business.” New York Times, January 20, 1939, p. 14.
LOUIS H. PINK
ALFRED J . BOULTON
JOHN A. RYAN
MARY KINGSBURY SIMKHOVITCH
VICE-PRESIDENTS
DARWIN J . MESEROLE
PRESIDENT
SECRETARY-TREASURER
DIRECTORS
o
L E O D D . BECKER
HARRIOT S T A N T O N B L A T C H
ALFRED J. BOULTON
C H A R L E S K. GILBERT
JONAH J . GOLDSTEIN
HELEN H A L L
F. ERNEST J O H N S O N
RALPH JONAS
HARRY W . L A I D L E R
O W E N R. LOVEJOY
NATIONAL
D A R W I N J . MESEROLE
HENRY N E U M A N N
L O U I S H. P I N K
W A L T E R B. SEYMOUR
MARY KINGSBURY S I M K H O V I T C H
UNEMPLOYMENT
CHARLES STELZLE
FLORENCE GUERTIN TUTTLE
FRANK P. WALSH
AGNES D. WARBASSE
CHARLES C. WEBBER
LEAGUE
(INCORPORATED 1023)
Object: To secure employment for all workers in times of business depression through
the establishment of public works by Federal, State and Municipal Governments.
42
13 EAST 37TH STREET
NEW YORK
MURRAY HILL 3-3699
January 18, 1939
Hon. Marriner S. Eccles
Federal Reserve Board
Washington, D. C.
Dear Mr, Eccles:
I read carefully Senator Byrd's statement in Mond a y ^ press, in reply to your letter of last month, and the
enclosed copy of letter to the New York Times is my reaction,
which, however, may not be Mfit to print", although the Times
usually does print my letters on unemployment.
I was glad to read that it is your intention to continue the controversy in the press and on the radio. No
greater public service could be rendered during the next few
months, and until the relief appropriation for the fiscal
year 1940 has been made by the Congress,
I am also enclosing some data, which may be of interest showing, as it does, that there is a demand, from
many directions, for Federal expenditure "to the extent of
the need of the surplus unemployed workers of the Nation,n
Thanking you for your open advocacy of this principle of the responsibility of government for the relief of
the unemployed as well as for the stabilization of businessfor they constitute in reality a single problem - I am
ours,
Presi
January 16, 1939
Editor of The New York Times:
Senator Byrd, in his reply to Mr. Eccles1 letter, states
his belief that if the Federal Government had adopted a policy of
retrenchment and balancing the budget, from 1933 on, business recovery would have been assured, as private industry would have expanded and the unemployed been given work.
Senator Byrd then states that when "our fiscal actions
were sound", from March,1933 to July,1933, "the greatest increase
of business activity occurred in any same period in the history of
the Nation* Many men were put back to work. The Federal Reserve
Board Index of industrial production stood at 60 in March,1933; 100
in July, 1933."
What then prevented private industry from continuing production and sustaining the recovery? The financial and business
interests, and the investors, had ample means to continue production
and reabsorb the unemployed. The investors of the Nation had received in dividends and interest in the first ^hree years 6* the
depression - 1930,f31 and '32 - $5,000,000,000 more than in the peak
years of 1927, '28 and *29; yet, in that same 5-year period, the industries of the country, from which this increassd income was distributed from the surpluses of these great corporations, had cut
from their payrolls 12,000,000 workers to be supported by public
or private charity, or relief. The Federal Government only began
its public works relief program, and its direct relief allowances,
to keep millions of its citizens from starvation, when it was
evident that private industry was not sustaining production. Had
not the Administration and the Congress, in the exercise of power
under the public welfare clause of the Federal Constitution, assumed this elemental obligation of government, the result would not
only have been an economic chaos far worse than that of March, 1933,
but also social disorder which would have threatened our internal
peace.
The social and economic problems confronting us are not
easy of solution. But surely the way out is not in decreasing
public expenditures while there are still over 10,000,000 unemployed, and cutting taxes in the hope that private industry will
at once respond and employ the unemployed.
T&e failure of business to assume its responsibility
to produce has already cost, in the present 9-year "business depression", over $200,000,000,000; or, if computed on our potential
power to produce, over #400,000,000,000.
In the light of this stupendous waste, the increase in
the Federal debt of $24,000,000,000 sinks into insignificance in
comparison.
Very truly yours,
c
Darwin J. Meserole
President
January 26, 1939
Mr. uarwin J. Meserole, President
National Unemployment League
13 East 37th Street
York
Dear Mr. Meserole:
Mr. Ecc^Les has asked me to acknowledge - • • • •
and thank you for your letter of January 18 with, which
you enclosed a copy of your letter of January 16 to the
Editor of the iMew Yonc Times. You are to be complimented for the tnought contained.in the last paragraph"
of your letter namely, that solving the problem of the
unemployed will of itself bring aoout the stabilization of business. Business men as a class overlook the
fact that the government's IUPA program is in reality a
free warehousing rservice for the laoor supply which ousiness uses only when times are good and discards immediately when activity slows up. If a wholesaler had an
over-supply of trucks and.when business fell off found
that these surplus trucks could be warehoused and kept
in reasonably good condition by the government, I imagine
he would be grateful for the arrangement. ^hen people
deal with human material, however, their mental processes
change.
Yours very truly,
• Lawrence Clayton
assistant to the uhairman
LC/fgr
*
r
A
COMPARATIVE
SUGGESTED
COST
OF
BUSINESS
SOCIAL
UNITED
EXHIBIT
STATES WARS
AND
DEPRESSIONS
Cost of all wars of the United States - Revolutionary War, War
of 1812, War with Mexico, Civil War, War with Spain and World
War(World War cost $41,765,000,000):
$45,189,000,000
Cost of one 9-year Business Depression
(computed on basis of income produced in
1929 - #80,000,000,000):
230,000,000,000
Cost computed on potential power to
produce:
414,000,000,000
@FedFRASER