Various other indexes indicate total decrease of activity from 1928 of from
15 to 20 per cent.
There are many factors which give encouragement for the future. The fact
that we are holding from 80 to 85 per cent of our normal activities and
incomes; that our major financial and industrial institutions have come
through the storm unimpaired; that price levels of major commodities have
remained approximately stable for some time; that a number of industries
are showing signs of increasing demand; that the world at large is
readjusting itself to the situation; all reflect grounds for confidence. We
should remember that these occasions have been met many times before, that
they are but temporary, that our country is to-day stronger and richer in
resources, in equipment, in skill, than ever in its history. We are in an
extraordinary degree self-sustaining, we will overcome world influences and
will lead the march of prosperity as we have always done hitherto.
Economic depression can not be cured by legislative action or executive
pronouncement. Economic wounds must be healed by the action of the cells of
the economic body--the producers and consumers themselves. Recovery can be
expedited and its effects mitigated by cooperative action. That cooperation
requires that every individual should sustain faith and courage; that each
should maintain his self-reliance; that each and every one should search
for methods of improving his business or service; that the vast majority
whose income is unimpaired should not hoard out of fear but should pursue
their normal living and recreations; that each should seek to assist his
neighbors who may be less fortunate; that each industry should assist its
own employees; that each community and each State should assume its full
responsibilities for organization of employment and relief of distress with
that sturdiness and independence which built a great Nation.
Our people are responding to these impulses in remarkable degree. The best
contribution of government lies in encouragement of this voluntary
cooperation in the community. The Government, National, State, and local,
can join with the community in such programs and do its part. A year ago I,
together with other officers of the Government, initiated extensive
cooperative measures throughout the country.
The first of these measures was an agreement of leading employers to
maintain the standards of wages and of labor leaders to use their influence
against strife. In a large sense these undertakings have been adhered to
and we have not witnessed the usual reductions of wages which have always
heretofore marked depressions. The index of union wage scales shows them to
be today fully up to the level of any of the previous three years. In
consequence the buying power of the country has been much larger than would
otherwise have been the case. Of equal importance the Nation has had
unusual peace in industry and freedom from the public disorder which has
characterized previous depressions.
The second direction of cooperation has been that our governments,
National, State, and local, the industries and business so distribute
employment as to give work to the maximum number of employees.
The third direction of cooperation has been to maintain and even extend
construction work and betterments in anticipation of the future. It has
been the universal experience in previous depressions that public works and
private construction have fallen off rapidly with the general tide of
depression. On this occasion, however, the increased authorization and
generous appropriations by the Congress and the action of States and
municipalities have resulted in the expansion of public construction to an
amount even above that in the most prosperous years. In addition the
cooperation of public utilities, railways, and other large organizations
has been generously given in construction and betterment work in
anticipation of future need. The Department of Commerce advises me that as
a result, the volume of this type of construction work, which amounted to
roughly $6,300,000,000 in 1929, instead of decreasing will show a total of
about $7,000,000,000 for 1930. There has, of course, been a substantial
decrease in the types of construction which could not be undertaken in
advance of need.
The fourth direction of cooperation was the organization in such States and
municipalities, as was deemed necessary, of committees to organize local
employment, to provide for employment agencies, and to effect relief of
distress.
The result of magnificent cooperation throughout the country has been that
actual suffering has been kept to a minimum during the past 12 months, and
our unemployment has been far less in proportion than in other large
industrial countries. Some time ago it became evident that unemployment
would continue over the winter and would necessarily be added to from
seasonal causes and that the savings of workpeople would be more largely
depleted. We have as a Nation a definite duty to see that no deserving
person in our country suffers from hunger or cold. I therefore set up a
more extensive organization to stimulate more intensive cooperation
throughout the country. There has been a most gratifying degree of
response, from governors, mayors, and other public officials, from welfare
organizations, and from employers in concerns both large and small. The
local communities through their voluntary agencies have assumed the duty of
relieving individual distress and are being generously supported by the
public.
The number of those wholly out of employment seeking for work was
accurately determined by the census last April as about 2,500,000. The
Department of Labor index of employment in the larger trades shows some
decrease in employment since that time. The problem from a relief point of
view is somewhat less than the published estimates of the number of
unemployed would indicate. The intensive community and individual efforts
in providing special employment outside the listed industries are not
reflected in the statistical indexes and tend to reduce such published
figures. Moreover, there is estimated to be a constant figure at all times
of nearly 1,000,000 unemployed who are not without annual income but
temporarily idle in the shift from one job to another. We have an average
of about three breadwinners to each two families, so that every person
unemployed does not represent a family without income. The view that the
relief problems are less than the gross numbers would indicate is confirmed
by the experience of several cities, which shows that the number of
families in distress represents from 10 to 20 per cent of the number of the
calculated unemployed. This is not said to minimize the very real problem
which exists but to weigh its actual proportions.
As a contribution to the situation the Federal Government is engaged upon
the greatest program of waterway, harbor, flood control, public building,
highway, and airway improvement in all our history. This, together with
loans to merchant shipbuilders, improvement of the Navy and in military
aviation, and other construction work of the Government will exceed
$520,000,000 for this fiscal year. This compares with $253,000,000 in the
fiscal year 1928. The construction works already authorized and the
continuation of policies in Government aid will require a continual
expenditure upwards of half a billion dollars annually.
I favor still further temporary expansion of these activities in aid to
unemployment during this winter. The Congress will, however, have presented
to it numbers of projects, some of them under the guise of, rather than the
reality of, their usefulness in the increase of employment during the
depression. There are certain commonsense limitations upon any expansions
of construction work. The Government must not undertake works that are not
of sound economic purpose and that have not been subject to searching
technical investigation, and which have not been given adequate
consideration by the Congress. The volume of construction work in the
Government is already at the maximum limit warranted by financial prudence
as a continuing policy. To increase taxation for purposes of construction
work defeats its own purpose, as such taxes directly diminish employment in
private industry. Again any kind of construction requires, after its
authorization, a considerable time before labor can be employed in which to
make engineering, architectural, and legal preparations. Our immediate
problem is the increase of employment for the next six months, and new
plans which do not produce such immediate result or which extend
commitments beyond this period are not warranted.
The enlarged rivers and harbors, public building, and highway plans
authorized by the Congress last session, however, offer an opportunity for
assistance by the temporary acceleration of construction of these programs
even faster than originally planned, especially if the technical
requirements of the laws which entail great delays could be amended in such
fashion as to speed up acquirements of land and the letting of contracts.
With view, however, to the possible need for acceleration, we, immediately
upon receiving those authorities from the Congress five months ago, began
the necessary technical work in preparation for such possible eventuality.
I have canvassed the departments of the Government as to the maximum amount
that can be properly added to our present expenditure to accelerate all
construction during the next six months, and I feel warranted in asking the
Congress for an appropriation of from $100,000,000 to $150,000,000 to
provide such further employment in this emergency. In connection therewith
we need some authority to make enlarged temporary advances of
Federal-highway aid to the States.
I recommend that this appropriation be made distributable to the different
departments upon recommendation of a committee of the Cabinet and approval
by the President. Its application to works already authorized by the
Congress assures its use in directions of economic importance and to public
welfare. Such action will imply an expenditure upon construction of all
kinds of over $650,000,000 during the next twelve months.