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Juno 14, 1945
Tho Honorable Robert F* Wagner, Chairman
Banking and Currency C omit too
Uhitod States Sena to
Washington, D# C#
Dear Senator 13agner:
In response to your lottor of May 22, I am glad to answer tho question you
have raisod with regard to the Full Employment Bill of 1945•

(1) Among tho basio responsibilities of the Foderal Government
in the maintenance of full employment are the following:
(a) Tho gathering, organizing, and publishing of full
information regarding tho conditions that affect produce
tion and employment* This should4cover the condition
of business and credit in general, specific industries
of major importance, specifio conditions and prospects
in agriculture, and the situation as regards fiscal and
financial background• This information should be
organized on a regional basis as well as on a national
basis and should take account, though in less dotail,
of foreign conditions and the prospects of international
(b) The recognition by Government of tho employment*
making function of business and a careful consideration
as to whether any particular legislative or administrative policy assists or deters tho expansion of highly
productive and well-paid amploynont*
(c) The assumption of the residual responsibility for
providinc employment when private employment undor
favorable conditions has boon unablo to do so*
(2) Tho specific improvement in tho Bill which should be considered
by the Banking and Curroncy Committee is tho elimination of the
provision for long-range forecasting called for in Section 3 and
tho procedure called for in Paragraph (c) of that Seotlon* The
most valuable feature of the Bill in question is its provision for
tho current reporting of tho conditions which determine the
polioios which the Bill establishes* A dangerous feature of the
Bill is the proposal that this information be used as the basis
for dotomining what shall be done throughout the following fiscal
year* It involves the element of prophecy* I seriously doubt if
prophecy is possible* As an example, the question may well be

Honorable Robert F* Wagner


June 14, 1945

asked whethor an administrative body or group of experts in
January of 1937 could have predicted the conditions which would
provail for that fiscal year as thoy actually bogan to show in
tho period from Juno on* Tfo cannot prophecy clearly enough to
make those advance do to ruinations* What wo can do is to keep
currently informed of a situation to which wo oan adjust current
policies* The Bill should be amended to this effect*
(S ) With the important amendment suggested above and with such
other changes as may appear wise after further considerations in
heariijgs and by tho Committee, I would urgo that the purposes of
this Bill be enacted into legislation* It will s t i l l bo ineffective
in producing the results desired, however, unless Government fiscal
policy is geared to the program and unless many measures which
come under (1) (b) above etro also taken care of* Furthermore,
thoro should bo a concentrated drive for gotting local, State,
and Podoral projects out of the wplanningtt stage into the lfplans
and specifications stage* Tho sholfw of Government projects
i s more of a dream than a reality* Thoro is necessity far both
loading tho sholf and rostraining tho temptation to unload i t
and plaoe oontracts for anything except tho most accessary projects
at times when their initiation would not havo tho most favorable
effect on the maintenance of omploymont*
(4) It is not a question as to whether tho nooossary cooperation
would be obtained* It must bo obtained* Jh other words, tho
passage of the Bill in a satisfactory form is highly important,
but i t i s only the beginning of the process of assuring employment*

Besides the above answors to your specific questions, I would like to add a
few remarks on the subject of tttho right to useful, remunerative, regular,
and full»timo employment" set forth in the third and fourth lines of
page 2 of the Bill*
This right to a job is a right T/hioh I myself havo come, after much thpu^fyfe,
to accept as an objoctive imhich our society may attain* It is a right
which has to be organized and is not quite comparable in this respect to
the rights of free speech and freedom of assembly established in the Bill
of Rights*
Cho of the characteristics of the Bill of Rights i s that the privileges i t
confers como automatically to the citifcon unless ho is restrained from
exorcising them* Preserving rights i s , therefore, a matter of overcoming
With these rights go certain duties** In tho abovo case, thoro is the duty
to resist those who sook to restrain, and that duty to resist oxtonds even
to suffering wounds and death* This'mis tho extent to vhich our duties wore
carried in the W r of tho Revolution, and to which, in tho American view of
the conflict, thoy are being carried in this Second World Yfar*

Honorable Robert F. Wagner



une 14, 1945

right to a job is not clearly established on the same basis* As stated
above, it has~only recently become clear to mo that it is a right, at all.
If it is a rigit, it is so by virtue of the complexity of our modern economy
which makes it less and less easy for the individual to find rewarding work than
was the case in pioneer days and in the generations immediately following in
this country*
If we admit the right to a rewarding job as one of the human rights, we must still
note certain diffsrancos between it and those set forth in the Bill of Rights*
We do not assure ourselves of a job by a simple resistance to some person or
some group who is keeping jobs from us, as in the case of those who seek to impede
free speech and free assembly. The duties involved in supporting that right are
of a completely different sort* They involve constructive action, cooperatively
undertaken by many different elements of society in a rather difficult field of
Some of these duties, without which the right cannot be implemented, devolve on
the individual* Some devolve on business enterprises, some on organized labor,
others on local :xad State Governments, and still others on the Federal Government*
The individual has no right to a job unless he is productive and self-reliant,
and energetically seeks employment* To assign the right to individuals who do
not possess these qualities is to subsidize idleness and social parasitism*
On business devolves the duty of operating at its best possible efficiency and
of thereby making it possible for it to expand production and employment, which
it should do to the limit of its capacities for solid, sustained growth* It
has no duty to furnish employment at a continued loss, since this would reduce
the volume of employment fvarnished, rather than increase it* Business can likewise properly be curbed in activities *4\ich seek to contract employment and
expansion by eliminating competition*
Organized labor has serious responsibilities in iinplamenting the right to a
job* That right cannot be established without the cooperation of labor unions
and the abandonment of practices -which in some instances defeat the objective
of this Bill, Besides specific practices of this sort, there is a general
responsibility resting on union negotiators to see to it that wage, hour and
production standards sought by the union do not form ports of a total aggregate
which so upsets the wage-cost-*pr ice relationship as to decrease the total volume
of employment*
Local and State Governments have duties in connection with the wisdom of their
tax policies, the effectiveness of their preservation of human and property
rights and, in particular, the timing of construction work and any other expenditures which are not on a current basis.
The Federal Government has very large and sorious duties to perfona if the right
to a job is to be made effective. It must do much more than store up work for
release when unemployment is large. It must prevent the growth of that unemployment by policies "which encourage business to expand and investors to undertake
new ventures*

Honorable Robert F. Tfegner


June 14f 1945

All of the above are prerequisites to the Governments assumption of its
final responsibility of furnishing work itself when employment lags.
This list of prerequisites is not to be understood as being a series of
hurdles over which the unemployed worker must loap one after another before
he bocomes eligible to Federally provided work* All of these duties which
implomont tho right and all of the activities which are required by these *
duties have to bo carried on simultaneously. With this dono, at any givon
moment tho number of unemployed to be taken care of by tho provisions of
tho SU11 Bnploymont Bill may bo brought small enou. h so that the available
useful work will actually meet the need.
There still remain certain difficulties, both in the amount of Government
work which can be provided and in having the required amount of work ready
at tho time and place at which it is neoded.
Some years ago, I was one of the authors of a book entitled "Toward Jtill
Bnployment." The position taken in that book was in favor of tho provision
of Government employment on productivo work v/hen privato employment failed.
I have since, howovor, com© to the conclusion that it is exceedingly difficult to provide Government work on a largo scale. I would, thoroforo, now
emphasize the nood for employing ovory means to roduco tho number who must
bo supported by Government employment. Furthermore, tho last few remaining
millions of unemployed will bo of the problem typo and exceedingly difficult
to handlo by Government omploymont. There will bo concentrated in those
last foxv millions individuals who aro problems in themsolvosj also there
will bo various localities and industries which prosont special situations
which it will bo difficult to moot by any gonoral provision of employment.
For instance, the Missouri Volloy Authority development could not oasily
take caro of unemployment in Sou thorn toxtilo mills. Nevertheless, Governmental expenditure, proporly proportioned and proporly timod, is ono of the
important weapons in tho arsenal for fighting unemployment.
Referring again to the scale on which the Government provides jobs, it is
impossible to have this on the enormous scale which would have been required
by the Great Depression, except by controls "which approach the organization
of a totalitarian government. We have had such enormous Government employment during the war, but to provide tho same volume in peace-time, it would
bo necessary to continue tho totalitarian features of war-tiine control.
Tho scale on which Government work is to bo provided must be kopt to a
minimum if wo aro to implement the right to a job. Tho right to a job is
roal, but it can nover be realized without tho caroful and intelligent
performance of tho dutios whose performance will alone make it possible
to implement the right.

As you doubtless know, tho Cormaitteo for Economic Devolopmont is studying
the questions involved in tho purposes of this Bill. Tho objective of the
CED is the attainment and maintonanco of a high lovol of productivo and
profitable employment. Earlier in this letter, I spoko of tho responsibilities of business. Tho fiold work of CED is a definite ondcavor on the

Honorable Robert P. Wagner


June 14, 1945

part of business, regionally and locally, to perform its part in expanding and
maintaining private employment*
Furthermore, it is,the purpose of the Research Committee, of which I am Chairman,
to examine and report on all those other factors "which moke the tfclimateft in which
business operates, so that we may have the best possible conditions for business
to operate under in performing its part in the increase and maintenance of employment.
This letter is a personal response to your inquiry and is not at all a CED document. It has been my past experience in the work of the Research Committee that
my ovm opinions have become modified by the rigorous discipline to which we
subject qurselves in the joint examination of these problems by bysinessmon and
sodial scientiosts. It is, therefore, quite probable that, at a later date, I
may see reason for modifying some of the opinions herein expressed.
Sinja^rely yours,

Ralph E. Flanders
Cos: Senator Murray
Senator OfMahoney