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4-2278 FEDERAL WO.?.XS AGENCY WO:?.X PROJECJ:S ADM:i:HI STRATI OJ.IT For Reieas e to Morning News1Japers Friday, Octooer 3, 1941 BRO.A.DEN.ED PUBLIC WOP.KS PROGR.A}1I :NEEDED TO MEET POST-DEFENSE CRISIS , WPA OFFICIAL ~ECL.ARBS A public works prot;ram exceeding any that has been operated to a.ate me,y b e ;1eeded to solve the problem of post- defense unemployment if gains in agricultural and industrial production achieved. during the emergency cannot be maintained, F • H. Dryden , De1Juty WPA Commissioner , told . an audience of Maryland business and professional mon in Salisbury last night ~ The sudden cessation of our imlti-billion dollar expendi tm·es t) for a r mament s will result inevitabl y in large- scale economic displa cemo~1ts and in a nou wayo of unemp loyment exceeding that of tho early ' thirties, Mr . Dryden said, unless stops arc t alrnn nO\•T to avert such a cat astrophe ~ Tho :i;.i:cob2.blo nocessi ty of feeding a large part of Euro1)0 and replenishing the nation 1 s supply of consumer ' s goods may roaeliorate tho situation to some extent, ho continued, but a severe problem of unemployment almost is certain to ensue which will have to be mot by an enL:i.rgod and bro adened r,rogrD.Jn of public ,,rorks ~ S:9oaking a.t a dinner meeting of tho Rotery Club in r.is hone to\m. 9 the Fodor2.l works offi cial pointed out that our present rn.te of iJrodu.ctio,,i;i. . , is higher tho..11 ~t has ever boon , yet tho c9untry still has a residue of '· ap:Jroximc..toly 5 9 000 , 000 unc11Ij_Jloyed persons ~ 11 Tl1e defense program shows us, 11 ho said, 11 th.'.1.t we can go well beyond ~929 production levels and still have a substa.~tial unemployment problem~ In short , we must r2.ise :production levels a good deal higher if wo arc to give jobs to all who arc looking for them. " W'.aat can the Federal government clo when tho huge oxpcndituros for armD.I:1cnts become u_rmocessnry, the speaker nsked? 11 First , 11 ho declared, 11 tho nationa.l govcrnm~nt might attempt to go back to t:10 leve l of government o.x-j_)ondi turcs of 1929. This , in my opinion, would be disastrous . Digitized by Original from NORTHWESTERN UNIVERSITY NORTHWESTERN UNIVERSITY 4-2278 11 Or, we might go back to the level of goyernment expenditures that we had before the defense progr:J.lll got 1u1dor wa;r. This no doubt would prevent tho kind of doflation~y crash that occurred after 1929. tho economic m1.'..chine, at best, limp :Su.t ,.rouldntt along as it was doing in tho lo.to 1930 1 s? "I hope that we will bo courageous enough to take the thh·d course, tho pl2.cing in operdion of a largo program of public work in order to get buyil1g power into tho ha..r1d.s of the poo1)lo and to encourage business to mnke inyostli1onts. connection~ Somo l)rolimino.ry stops have already been te.kcn in this The Federal Government is prepcring a so-called I Public. Works Resorvo, 1 a list of public i:crprovononts needed throughout the nation~ This list, along with information on the location, cost, and nature of tho l)rojccts, is being gathered under a no.tion- wide WPA project spon~orod by tho Federal Works. Agency ['.na. the National Resources Plenning :So['.rd1 and fina.nced by 1·JPA funds~ Tho p:;.·ojocts in this Public Works Rcsor•!e will be ready ~o be placed in opcrn.tion on short notice to absorb post-defense Ui1omploymont~ "What would si.tch a l)Ost-o.ofenso work progrrun be like? First, it should be 0i)Cn to all able ano. willing workers who cn..'1not find jobs in :priv2.to industry. basis. It would be on a permanent rather than on a ~roo.:r to yo2.r Some of the projects would be mu.ch like those operated.under ooth the PWA ancl ~'1PA programs . Roads would be an inr_portant feature$ .AE you perhaps know, the WPA has been able to modernize about one-sixth of the nation 1 s entire road system. Tile WPA has built many schools and hospitals; such work would also be continued. 11 The however, pro 6Tam would go nm.ch beyond tho present WPA program~ It would perhaps inclua.o more health and conservation work, a greater eri!j_)hasis upon the reconstruction of blighted areas, better housing, Digitized by Original from NORTHWESTERN UNIVERSITY NORTHWESTERN UNIVERSITY 4-2278 sanitation, development of water re s ource s , and t h e expa..~ sion of needed publ i.c services . I n short we would have to broaden considerably our definition of public work. 11 0bvi ous l y , t he s ize of t he pr9 gTam required would depend on how thi ngs develop in the post-defonse era~ If our government makes huge donatio ns of food to a starving Eu.rope , fe..rmers w01..1.ld b onefi t and unonr_ploy,, ment ,.,ould bo loss in rural areas . If busi ness cooporatos to tho fullest by keeping prices dow'll so t hat p eople ca11 buy in quantity, production and employment will be susta.inod 0 Eut in an~,r c ase t ho public work program ,-, ill proba bly have to bo a l ar go one if wo a:i.·o t o keep t ho gai n s in na tional i ncome and omp lo:TTilOnt nmdc under tho defense pro grar,1. 11 oOo (Att a ch ed is full text of an address for deJ.i very by F . E. :pr ~rdon , Deputy Commissi oner , W9rk Pl·oj octs Admini s tration, before tho Salisbur y Rotary Club a t t h o Wico mico High Sch ool , S1:.lisbu.ry, M.'.:!.ryln.nd, at 7 P ~ M. ThUl·sday, Oct ober 2 , 1941. ) Digitized by Original from NORTHWESTERN UNIVERSITY NORTHWESTERN UNIVERSITY PLAN NOW FOR THE FUTURE President Sheldon a.l'J.d old friends: You kn.ow that it is a creat :pleasure that I come back home to talk with you of a :problem t hat is of much concern to those of us who have spent the grea t er pnrt of the l ast decade dealing with the 1mem:ployment and insecurity of t he mo.sses of our people . I H[:.nt to talk to you tonight in a serious fashion or. a serious problem. Todo.y , the world is ablaze . the fires of war ore bur:>1ing ,. In Europe, in Asi a , in Africa, .About four- fifths of the peoples of the world are engo.ged in open war. Thus fnr, fortuno.tely, ue have kept the conflngration from t his country. True, the flrunes of war have come close to our shores; our navy ruid our merchant shi!Jping have been fired upon without warning. The fleet has been given orders to deal with t h is threat . They con and will mr,,ke it extremely wmm for hostile warships in our sea lruies and vitnl waters. made to 11 We hope the hint will be token nnd no nttempt will be crowd 11 us any furt her. Our hopes are still for peace . It is exactly becnuse .America wonts to ovoid ,var that we are engaged in a great defense progr<'.f.l . strong. We cire deterr.:ined to mnke ours elves We are determined to creat e t he supplies needed by countri es resisting aggress ion . these supplies. We are determined to see that our friends receive .And we are not go ing t o call it quits until the threat to our national security is over. While we are concentrating on putting out a world-wide conflagration , it is not easy to think of the period after the war, to lay plans for the future . do . J3ut this is just what I want to emphasize tonight t,hat we must Unemployment and insecurity exist today despite the defense boom. There is a danger that the se problems will be more serious after the defense program is over . Now is the time to nake our pl ans for avoiding seri ous economic dislocations after World War II . A healthy economic structure, as we all know, depends largely upon full employment of our workers . It is up to us - to you and me and every thi1ucing American -- to see that we reach full production and employment in our defense effort as soon as we can. It is our problem, Digitized by Original from NORTHWESTERN UNIVERSITY NORTHWESTERN UNIVERSITY - 2 - too, to help in maintaining full employment after this war is over. We have the power to do this. a sound plan. And we !18.Ve the ab ility to create Tbe only question is whether we have the will to put that plan into effect . I a_o not wish to go into detail tonight . My purpose is s imply to outl i ne briefly some difficulties in the fi eld of unemployment we are facing today, and to make some general remarks concerning the future. The defense program is the bigges 4 thing in the economic s i tuation to d.ay . Lot's forge t about the military side for the moment and look a t the defense pro gram from the poi~t of view of production l evels and jobs for workers . It is a gi gant ic laboratory in which we are working out problems through the only kind of testing that really counts, the acid test of actual experience. And, a.lthough the program is still in its early stages , cert a in im~o rt nnt points can be seen. First , we can get some i dea of the tremendous effect of tho defense effor t by looking at nat ional income , which is a fairly good overall measure of the nation 1 s economi c activity. National income repre- sents, in billions of dollars, the net production of the country. It i ncludes the pro t uction of goods for use by the producePs t hemselves, such as farm produce consumed on tho farm. It includes tho various services and public wo rks produced by all levels of government . National i ncome incluclos consumers I goods ( such as food ancl clothing) and producers ' goocLs ( such as lat~1es ancl d;7namos) . national inc ome was 76 bill ion. In 1 940 , In 1941, tho go od.s and services :pro- duced will total about $88 billion. It is esti □atcd t hat national incono will reach $100 billion fo r 1942. Back in 1932, the total was only $40 billion. I n gener al terms , !k1.tional income measures the extent t o which wo use our power to produce . Do all workers have jobs? Are we pro- ducing as nany horacs, bas ic raw r.mto rials, tons of stool, and so on as wo need nnd as we arc capable of producing? will be a t a :maximun. If so, nationo.l income The close st we have ever come to go ing at full Digitized by Original from NORTHWESTERN UNIVERSITY NORTHWESTERN UNIVERSITY -3- blast, with the exception of recent months, was in 1929 when the economy as a whole was producing at about 80 percent of plant capacity. Now that the government plans to s:pend some $60 billion or more for armaments, we will undoubtedly go far beyond the 1929 record and come considerably closer to using our full productive capacity. Now, . how have these increases in production affected unemplo;vm'.3nt? Obviously, unenrployment has been given a strong body blow. In fact, although not specifically intended for the purpose , the defense p~ogram has done more to reduce joblessness than any other single progra~• Hpwever , although unemployment has been materially softened, it has ndt "been knocked out . Despite recent gains , we still have more than 5, 000 , 000 persons actively seeking work. have a substantial unemployment relief problem. Consequently, 1rre still Defense activities have not been of great benefit in some areas of the nation , particularly in the South and Mid-West . In fact dislocations caused by the defense program is causing a considerable amount of priorities unemployment in these areas . Furthermore , many of the unemployed do not have the skills requi red to obtain specialized defense jobs . The defen~e program shows us all that we can go well beyond 1929 :production levels and still have a substantial unemployment problem. In short , we must raise prod.uct i on levels a good. deal higher if we arc to give jobs to al l who arc looking for them. Thero arc , of course , certain points that must be cleared up if prod~ction levels aro to be pushed considerably higher over the next year . The question of how to get a big increase in plant capacity will be a hard nut to crack, Industry af t er industry is already r unning at or near capacity. As you know, new plants are being built . ·But Rome wasn 1 t built in a day. In many industries , much more than a year is required before plants can be bui l t and tooled ready to begin production. Shortages in materials are another fac to r that may keep down production. Substitutions are becoming more and more necessary. is a wise business man who can tell whether his finished goods s i x Digitized by Original from NORTHWESTERN UNIVERSITY NORTHWESTERN UNIVERSITY It months from now will be mLid.e of steel , copper , aluminum , or soy beans . In order to keep defense plants going at full blast , we are relying mol·e and more heavily on priori ties . :But priori ties• of course , do not result in increased production .as a whole, although they may · help in jc1,cking up deler..se production. Production is bound to fall in civilian industries tha t cannot obtain needed materials . Likewise , priori ties may speed u:;_::, employment in defense industries,. but they arc resulting in dismissal notices for workers in civilian. industries . For a year at least , pl·oduction a s a whole, and tho number of new jobs which open up , will be aff octod by tho shortages in materi als , as well as by other shortages in power , transportation facilities , and skilled labor . The WPA is d.oing what it can to holp in connection with the shortage of skilled workers . Workers arc given t~aining or r efresher courses as mechanics and machinists , _wolders , shoot metal workers , for ge 2,nd foundry worker s , and so on., We are empha.sizine; this work because we find tha t a hi fh pe:.·centage of WPA workers so tra ined re ... ceive private jobs . A.11 in a ll , the next. year will be a troubled one , with priority unemployment , bottlenecks , and many other difficulties we a_idn 1 t d.ream of a few years ago . But if ,1e all work t .ogether as a determined and united nation, we can gradually overcome most of our troubles . duction must go up hi gher . Employment should mount • Pro- .Armaments should uile u2_1 and we should be the decisive factor in this war. B1.1.t what of tho post- war period? Let u s l ook forward to peace . Let us be o:otimistic while we are at it . Let us hope t hat it is a stable peace , that no serious threat to our national safety remains , that we can cut our armament expenditures drastically. period after defense ex:penditures begin to taper off? What of t he What will happen to national income and employment totals when the flood of armament expondi tm·es turns into a small trickle ? In the first place, there will be plenty of headaches in shift... Digitized by Original from NORTHWESTERN UNIVERSITY NORTHWESTERN UNIVERSITY Millions of workers will have to bo s!1iftod ·oa ck to their old job s . And then there is tho pr otlom of demo bi lizing our dofonso army. Those men will ret·.ll'n to their home cornmu.ni ties , expecting to find jobs waiting for them. Some of them wi_l l get back their old jobs , but each one who doe s \vill displace the wo1·ker who "pinch- hi t 11 for him while he was away. E-,en under the best of circu.i11stance~ , with plenty of jobs available , a l l those shifts will not be easy. Unemployment after.the war c an be kep t down only if orders are pouring in for industry. But will production remain at hi gh l evels ? The burden of the proof seems to mo to bo with those who say it will. As far as I can soc , unless c er t a in tm l l - p l anned stops ar e taken , t her e is every re ason in th o world to su ppose t hat a period of sharp decline \vill oc cur. And with depression will come a shrinking national income , docroasod purchas ing power , lower standard.s of 1i ving , . and t ho ol d s i ght of worker s tr ampi ng tho street s look ing for job s . ii/hat factors can we count Ul)On to :prevent a collapse? Can we rely upon any gre a t rush of private investment in the fiel d of p lant and eq_ui::_)ment ? many fields. Capacity will have been built up to record highs in In view of the many ne w n J.an ts built to mee t war needs, will t here be any great i ncentive to a new flow of priva te i nves t ment? If not, we mus t a ccep t the cold har d fact that f ew jobs wi l l be pr ovi ded b~r nou p lant construction and equipment . What uill take the place of tho l a1·go government order s now ~oing given to cocroanies concornod with t ho production of stool , co pper , and other basic materials? Those or ders are now cr eating tho enormous v olume of :pur ch asing power tha t IJUshes us u:p to high levels of production a.:.'l.d. emp loyment . When these or ders st op u nless new demands for goods arise from some other source , the companies formerly busy with war or ders will cut production and emp loyment . The workers they d.is- chal· ge would lack purchasing power ; t h is would moan a falling of f in • demand f or a ll sorts of goods , and further unemployment . ]efore very long we uould bo on the toboggan a gain , i ~1 a manner similar to the Digitized by Original from NORTHWESTERN UNIVERSITY NORTHWESTERN UNIVERSITY Of co1:U'se, we don 1 t have to be taken for ·a toboggan ride unless we W8~t to. But, as I have said, it seems clear enough that a decline will occur 1.mles s unusual steps are tal::en. If we come close to full employment in 1943, it will be the· direct re sult of public expenditures for ~mament. year. These expenditures may well be about $25 billion a They will have made possiole ne,,r highs in production, national income and employment. But, once those large scale defense cxpondi• turos arc stop:;ood, or reduced to tho normal ratet some other factor must ariso to take their place . It is sometimes said tha t industry itself will take steps to insure maximum production and employment . Can we expect the thousands of independent concerns and business men to undertake for themselves such a complicated job of cooperative planning? Pas t experience has shown that mere exhortation will do ve":..'"j' little . The disappointing e.x:-.9erience of 1930- 32 can guide u s in tha t regard. Can we expect business men, in the future , any more than was the case after 1929, voluntarily to keep workers on jobs j_ndefinitely if no order s for goods are coming in? It is true that pent up demand for so-called goods 11 may help for awhile. 11 dur able conswncrs t That is , if _wo limit production in this field seriously over the next year or so 9 there may be a fairly good demand for autos, refri gerators , vacuum cleaners, etc ., after the war • .Also, there will be the problem of a starving Europe afte1; the war . If our government gives generously, as we always have in the past , farmers would benefit and this would help keep things moving i n many sections of the country. If these factors do not meet the situation , the ~roblem will -be left squarely in tho lap of government . tho national government . And by government , I mean Time has clearly shown that local govern- ments do not have the power to deal with unemployment . True , by certain measures they can affect labor and industry within their areas . ]ut tho vast sprawling enterprises of today lrnow no local or oven state boundarios--thoir regulation and stimulation present a Digitized by Original from NORTHWESTERN UNIVERSITY NORTHWESTERN UNIVERSITY problem for the Federal Government . What C.3.ll the national government do when the huge eJ<..'J)enditures for armament oecon;e urtnecessary? This can be answered in detail only when we know the kind of prob lem that will face this nation at tl.at ti1:1e . In general terms, we ca.n ass-i;me this :probl er.i to be ( 1) a deficiency of "buying power in the hands of consumers , and ( 2) an inadequate volume of investment by busi ness . In any event it seems clear that government will be faced lJy a choice runong three major lines of fiscal poli cy. First , the national government might attempt to go back to the level of government expcndi turos of 1929. Thi::; , in my op.inion, would be dis~strous . A worse crash than that of tho early 1930 1 s would almost surely result ~ SUiJposo, however , wo chose the second. road, and decided to go back to t he level of government cx:9enditures that we had before the defense program got 1.u1der way. after 1929~ This might avoid the kind of deflationary crash that occurred But wouldn' t the economic machine , at best , limp along as it was doing in the late 1930 l s ? r esources would lie idle. Much of our plant structure and other Once again wo. w·oulcl. be hit by a problem of porha:_ps seven to ~inc mi llion unemployed }JCrnons . We tvould be reeling back on the defensive, trying to explain w]?.y millions of able and wi lling workers wore boing doniod the right to work. I hopo that we will be courageous enough to sizo up the situation and to take tho thiTd course , the p l acing in operation of a lar go program of public wo r k in order to get buying power into tho hands of the people and to encourage business to make i nvestments . been t.:i.kc~ in this connection. called 11 Somo preliminary stops have already The Federal Government is preparing a SOM Pu~lic Works Roservo , 11 a list of public improvements needed ~hroughout tho n~tion. This list , along with informat ion on the location , cost , and nature of tho projects , is being gathered under a nation- wide WPA project sponso:ced by the Federal Works Agency and tho National Resources Planning J3o ard, n.nd financed by WPA funds . The pro jects in this Public Works RosoTvc will bo rondy to be pl aced in opc r~tion on short notice to absorb post-defense 111"\P.mn l r,~rmn-n+. Digitized by Original from NORTHWESTERN UNIVERSITY NORTHWESTERN UNIVERSITY What would such a post-dcfonse work program be like? should be op0:1 to all ablo ::privdo in~:ustry. y0ar be.sis. D..nd First, it willing workers who cannot find jobs in It would be on a ·permanent rather than on a. yea:r to So ,i10 of tho :;;,;.•ojocts would be much like those operated. under both tho P1tA and WPA prog;.•.:i.ms. Ro2,a.s would be an important feature~ As you ]_)orho.1) s know, the WPA has been able to modernize about one-si.x:th of the nationt s 0;1tiro ro ad system,. Tho . WPA has built many schools and hospitals; such wor~c would o..lso be continued• Tho l):i.· og;.•a.m would go much be;,,:ind. the present WPA :program, however~ It would ~)o:.·ho:.9s i nclude mo;.•o heal th and conso1·vation work, a greater emrhasis up on tho roconst;.•uction of blighted areas , bettor housing , sanitation, dovolo1)mo;1t of wo..tcr resources, and. tho ex-pansion of needed public services~ In short wo would have to bro.s.don considerably our definition of public work. ObviouslJr , tho size of tho program required would depeno. on how things develop in tho J,)Ost-dofen~? era. food. t;o If our government makes huge donations of sto.rving Europe, fur mers would benefit and unemployment would o., bo loss in r ~u· o..l ~ron.s . If busi~oss cooperat?s to the fullest by keeping prices d.o\fJ.l so th0t :;_Jcople ca."'l bu~r in qun.nt_ity, production and employment will be sustained. hn:V':3 to 00 a lo.rgo ]ut in any case the public work program will probably 0110 if ,-re are to keep ~he gains in national income and employment . mn.cle under the defense progr~. Tru~, there would be difficul tics • nocess2,l7. Detailed plruming wottld be A real over-hauling of our tux str,;i.cture to lift the heavy bur- den in consu.mors buying poNor will be required. If this country mnkos up its mind_ to do so , it can t o.c!do successfully even S\l,Ch a hugo progrc1lll as I dosc:tibc~ Tho J.~esult;s wou~d i:>o well worth the price~ In tho lo..st &"'lal;irsis, we would be pl~ying for pretty high sta.kes-su.rvivo..l of our prosent form of govcrn~ont ~ Democracy must prove i~self~ :Oemocrn.cy mu.sh show that it can conquer unemployment ~nd insecuritf~ Wo CC'.ll a.o this for ourselves if we all-industry• agricul~ure, and labor-~e willing to givo as well as take from our government. If we a.re Digitized by Original from NORTHWESTERN UNIVERSITY NORTHWESTERN UNIVERSITY -9- willing to give individual dollars and individual effort, we will got , in return, nntional wealth and security that will make us impre~nble as a. nntion~ We .:1.ro giving without stint today to sci.vo democracy from destruction~ Let us give in the same moo.sure tomorrow in order to make democracy moru1. even more to our children than it does to us. Lot us follow through our all-out effort for national defense with an all-out effort designed to me.kc .Amoricl'. the 1&7.d of peace and plenty we all know it can be. oOo Digitized by Original from NORTHWESTERN UNIVERSITY NORTHWESTERN UNIVERSITY
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