Although this bill expresses an aim and purpose to utilize private enterprise in carrying out the proposed program, the facts are that if this bill were to become law the probable effect would be to discourage rather than encourage private enterprise and decrease rather than increase non-Government employment.

We believe that if our Government officials really desire to encourage private enterprise and private capitalism they should foster private competition. The Government should not compete unfairly with private enterprise. It should encourage hard work, prudence, saving, and self-reliance, and cease to cultivate the theory that the Government owes all citizens a job and a living and that selfreliance is no longer a virtue.

An important question presented to the people of this country by this bill is whether their thinking and activities are to continue in the direction of preserving and enlarging the freedom of the individual or whether they are to follow those of Socialist and Communist nations abroad.

Very truly yours,

RAY LEEMAN, Executive vice president.

THE VERMONT STATE CHAMBER OF COMMERCE,
Montpelier, Vt., October 13, 1945.

Hon. CARTER MANASCO,

Chairman, Committee on Expenditures

in the Executive Departments, Washington, D. C.

DEAR CHAIRMAN MANASCO: We are opposed to the passage of H. R. 2202. We recognize the opportunity of the Federal Government to assist the alleviation of cycles of widespread unemployment by timing the construction of necessary public works to coincide with periods of unemployment. As a national policy, we approve.

We disapprove, however, the enactment of legislation which declares that it is a legal right of any citizen to demand of the Federal Government that he be provided with a job. Such a principle is foreign to the basic philosophy of private enterprise and initiative.

The assumption by government of full responsibility to make jobs for everyone necessarily implies that the Government must manage and direct the operation of all business enterprise. Such is implicit in the bill even in spite of high-sounding phrases denying the right of government to coerce.

These implications are too dangerous to be tolerated by those who still believe that the greatest happiness and progress of our people are best accomplished through our system of private enterprise and endeavor.

Yours very sincerely,

HAROLD P. PARKER, President.

STATEMENT OF THE WEST VIRGINIA CHAMBER OF COMMERCE, CHARLESTON, W. Va., IN OPPOSITION TO H. R. 2202, THE FULL EMPLOYMENT BILL

Presented to the Committee on Expenditures in the Executive Departments, House of Representatives, Washington, October 17, 1945

Gentlemen of the Committee:

The West Virginia Chamber of Commerce, an organization composed of nearly 1,000 of the principal enterprises in the State of West Virginia, employing more than three-fourths of the industrial population of the State, desires to be recorded in opposition to the enactment of H. R. 2202.

We oppose enactment of this measure on the ground that it contemplates a fundamental change in the character and responsibilities of our Government. It is also opposed on the ground that its provisions cannot be enforced nor its objectives attained. Therefore its enactment invites frustration and discord among our people.

A governmental guaranty of full employment must necessarily be accompanied by a guaranty of full consumption, which latter guaranty can be met only at the sacrifice of maintaining our national solvency.

The fallacy of the broad proposal to guarantee full employment by means of forecasting business trends, is illustrated by the fact that Federal authorities,

in presenting the annual budgets to Congress during the most recent 10-year period, 1935-44, have had, as we are informed, an average annual error of 150 percent in estimating the net deficit. There is no apparent reason to hope that performance in this field will be better in the future than it has been in the past.

The West Virginia Chamber of Commerce, and its members individually and collectively, heartily support the ideal of regular employment for all available workers at useful jobs and at sound wages. Under these conditions, business is prosperous and workers contented. But attempt on the part of government to guarantee full employment as proposed in H. R. 2202 will, in our opinion, discourage rather than promote a high rate of employment in private enterprise, the foundation of our economy.

Respectfully,

R. S. SPILMAN, President.

TESTIMONY OF EMMERT L. WINGERT IN BEHALF OF THE WISCONSIN STATE CHAMBER OF COMMERCE BEFORE THE HOUSE COMMITTEE ON EXECUTIVE EXPEND TURES, H. R. 2202, OCTOBER 17, 1945

To the Committee on Expenditures in the Executive Departments:

For the record, my name is Emmert L. Wingert. I am an attorney practicing at Madison, Wis., and am counsel for the Wisconsin State Chamber of Commerce in matters relating to social security and labor relations.

The Wisconsin State Chamber of Commerce opposes bill H. R. 2202, with the earnest conviction that its enactment would be seriously detrimental to the well-being of the American people.

We think the bill is unworkable. Its basic assumption that a program of Federal action to keep the economy of the Nation working at concert pitch can be developed annually on the basis of estimates of current and prospective labor force, private and governmental investment and expenditure, price levels, and volume of additional expenditure needed to produce a given volume of employment, is fallacious. The complexities and uncertainities of our vast national economy, with its hundreds of thousands of units, are so enormous, the available data so inadequate and confusing, and economic behavior so unpredictable, that it would be impossible to make the required estimates with enough accuracy so that a sound program could be based upon them. Far-reaching policies would have to be adopted on the basis of a series of guesses.

The bill does not meet the problem of economic timing. The lapse of time between the making of the national production and employment budget and congressional enactment of a program which would require at least 6 months and probably much longer, would generally witness such changes in the underlying economic factors that by the time the program was enacted the economic picture might be very different. Business changes come rapidly and Congress moves slowly, as it must if it is going to remain democratic.

A program of Federal action based on miscalculated or obsolete estimates or on misinterpretations of obscure data, would be likely to do more harm than good. It has been well said that "the pattern of economic relationships is so complex, slow-moving, and in some parts obscure, and the data themselves inevitably lag so far behind the events, that a corner ordinarily cannot be recognized until several months after it has been turned. Hence the machinery proposed in this bill might well result in Government spending at the wrong time-that is, at such time as to enhance inflationary pressures."

The bill is based on a fallacy, i. e., that there can be full employment everywhere at all times in a free economy. It overlooks the fact that there must always be some unemployment if people are to remain free to move from job to job and if capital is free to try new ventures and take new risks.

The bill apparently gages full employment as that situation which exists when there are exactly as many or more opportunities for employment than there are unemployed persons, but it makes no attempt to define what constitutes an unemployed person, particularly in the light of such factors as part-time workers, the self-employed, and similar factors. The permanent creation of more jobs than people seeking jobs will not only draw into the labor force many who should be at school, retired, or otherwise engaged, but also will create such inflationary forces that absolute Federal control of the Nation will become imperative and permanent in the end.

The bill fails to cope with such issues as regional dislocations of employment,

degrees of skill and aptitude, unemployment through management-labor disputes, and similar questions. If we have an unfilled demand for workers in Texas and a surplus of unemployed workers in New England, are these simply to be balanced off on the budget or are we to use Federal money to transport New England workers to Texas or, if the latter decline this Federal transportation subsidy, what then? Are we to start a PW program in New England and let Texas suffer with labor shortage, possible inflation, and like factors? If we have need for textile workers but have an oversupply of unemployed machinists, are we again to balance this off one against the other, or are we to use Federal funds to get machinists to work and let the textile shortage "go hang"-or are we to try with Federal funds to train machinists to operate textile looms? And what about seasonal shifts in employment? Are we to provide such a plethora of job opportunities that all shall be employed at all times and that there will be no slack available to handle seasonal crops, to take care of seasonal bulges in shipping and transportation, to meet the peak demands which arise at times through some of the so-called act-of-God causes-epidemics, flcod, fire, and the like?

Enactment of the bill would give rise to expectations that cannot possibly be fulfilled even with the most drastic Government controls. It would tend to create the belief on the part of the workingman that he is entitled to a job at Government expense regardless of his productivity or the demand for his product; and the tendency would be to consider himself entitled to a particular job at a particular place and at a particular wage. If the Government is to underwrite jobs, it must inevitably seek control of manpower, job placements, investments, starting of new enterprises, etc.

The bill would be inflationary in effect. Notwithstanding the purported safeguards, it would be almost certain to result in frequent embarkation on large-scale Federal spending programs-the familiar "pump priming" under a different guise. It is probably too much to expect that a President would attempt to stop a boom by advocating a deflationary policy, but on the other hand some unemployment could always be found to give apparent justification for a spending program. Political pressures to that end would be well-nigh irresistible.

Experience in the 1930's has shown that Federal spending is not the panacea for the ills of the economy in general or for unemployment in particular, but on the contrary is likely to depress business activity and thus depress employment. In operationg the bill would tend to depress rather than promote the functioning of private enterprise and would thus tend to reduce rather than augment the volume of employment opportunities. Notwithstanding its expressions about the fostering of free enterprise, the bill contemplates Federal spending as the panacea for unemploymement and carries the threat of higher taxes, increased Government debt, inflation, and ever-greater Government interference in business. This threat is well calculated to diminish that confidence in the future possibilities of legitimate profit in private enterprise which is so essential to an expanding volume of private enterprises.

The bill will necessarily result in increased intervention of Government in business and increased Government control of the economy. It visualizes in essence a "planned economy" under which a corps of "experts" in the executive department will determine the needs of the economy and prescribe therefor. Attempts to plan the economy inevitably result in more and more drastic controls and lead to a vicious spiral of more and more Government intervention and control, moving toward the all-powerful authoritarian state.

While the program recommended by the President can take effect only if enacted by Congress, Congress would be largely at the mercy of the statisticians in the executive department. Congressmen are too busy with too many important matters to be able to go behind the estimates presented by the President's experts and satisfy themselves independently as to the validity of the bases on which the program is recommended. The time element would prevent careful scrutiny, because if a program based on estimates for a year in advance is to be effective, obviously action must be taken before that period is largely past.

In short, the bill would tend to aggrandize the Federal Government at the expense of the States and municipalities and private enterprise and to aggrandize the executive department at the expense of Congress and the people.

For these reasons, the Wisconsin State Chamber of Commerce respectfully urges the committee to withhold its approval of bill H. R. 2202.

The CHAIRMAN. The next witness is Dr. Walter E. Spahr, speaking on behalf of the National Association of State Chambers of Com

merce.

STATEMENT OF WALTER E. SPAHR, PROFESSOR OF ECONOMICS, NEW YORK UNIVERSITY, NEW YORK, N. Y., ON BEHALF OF NATIONAL ASSOCIATION OF STATE CHAMBERS OF COMMERCE

Mr. SPAHR. Chairman Manasco and members of the committee, the National Association of State Chambers of Commerce has asked me to appear before this committee to present my views as an economist on the full employment bill now under consideration.

Mr. COCHRAN. Just a moment at that point. Are you a member of this organization?

Mr. SPAHR. No; I have no connection with the organization.

Mr. COCHRAN. They just simply asked you to appear and speak for

them?

Mr. SPAHR. Well, it was hardly as simple as that. I think my next statement will make that clear.

Mr. COCHRAN. I understand, but I would take it you will make a statement based largely upon your own opinions. Let me put it this way: Did you attend the meeting where this discussion took place, and did you hear the views of the various members of this organization expressed?

Mr. SPAHR. I did not attend the meeting, I did not hear the views expressed, but I did go over the material which was furnished me and determined their views to that extent in that manner.

Mr. COCHRAN. It seems to me it would be a very unusual procedure for a businessman to go outside of his organization and secure an individual to come and speak for them when he has not attended a meeting at which the conclusion was reached.

I

Mr. SPAHR. My next sentence, if I may be permitted to give it, think will answer you very definitely as to that matter. Now, of course, it is a matter of procedure. This connects up, and I think it will be clear if we approach it that way.

Mr. RESA. May I interrupt to ask this question: How many of the officers are referred to in this sentence?

Mr. SPAHR. I was contacted by the officers of the national association, and I do not know how many of those men read this article, or the pamphlet.

Mr. RESA. Do you know that more than one read it?

Mr. SPAHR. Of my own personal knowledge I do not know, and I could not say definitely.

Mr. RESA. Or that anyone did. So that the statement that some of their officers read it may or may not be an accurate statement?

Mr. SPAHR. That was the statement that was given to me, that their officers had read it, and I accepted that statement at face value.

Mr. RESA. Does that refer to officers of the National Association of State Chambers of Commerce, themselves?

Mr. SPAHR. Yes, it refers to the officers of that organization. Mr. RESA. It does not refer to the officers of the State chambers of commerce themselves?

Mr. SPAIR. Congressman, I understood that they had passed copies of my article out before they asked me to come down to speak for them, and that the conclusions that I had expressed in there were coincidental with the conclusions that they had arrived at, and it was for that reason that they asked me to appear.

The CHAIRMAN. At this time, Dr. Spahr, let me ask you this question: Mr. Charles A. Eaton, Jr., the president of the National Association of State Chambers of Commerce was responsible for your being here?

Mr. SPAHR. That is quite true. It came about in a regular orderly

way.

The CHAIRMAN. And did Mr. Eaton advise you, speaking in his official capacity as president of that organization, that Dr. Spahr's pamphlet had been read and recommended by the National Association of State Chambers of Commerce?

Mr. SPAHR. He certainly did. He told me that.

Mr. EATON. May I say a word there? Maybe I can explain this. The CHAIRMAN. You may proceed, Mr. Eaton. Make your state

ment.

Mr. EATON. At the meeting of the State Chambers of Commerce here in Washington on September 26, 1945, this measure was discussed, and it was agreed that we would invite Dr. Spahr to speak for us, if he were available to do so, in the light of the fact that we had gone over the statements which had been set forth in one of his pamphlets, a pamphlet that we read and had read with considerable satisfaction and approval, and in fact it represented our views. It just so happened, however, that it was expressed better than we could express it.

Mr. COCHRAN. Have you read Dr. Spahr's statement, Mr. Eaton? Mr. EATON. Oh, yes; oh, yes. I have read it, I have gone over it most carefully. The National Association of State Chambers of Commerce would not present anyone here, unless they had made absolutely certain that the views that they would express were, in fact, the views of that association.

Mr. COCHRAN. Do you know whether the presidents of the various State organizations have read it?

Mr. EATON. I am not at liberty to give an absolute statement on that. I would say that at the meeting in Washington, those were present, those members were present, they would be the officers of those associations, and of course they had read it.

Mr. COCHRAN. I am very anxious to hear Dr. Spahr, but it is a most unusual procedure, for an organization such as yours, where you have a large number of States belonging to it, and you cannot have one of your own members come here and speak for you on this question. You bring in a gentlemen to make a statement to this committee for your organization.

Mr. HOFFMAN. The men who appeared yesterday, the difference is that they simply read off something that was prepared for them, whereas this gentleman is here representing his clients' views, and that he says is his own statement, which I assume they employed him to make and which they approved. He is subject to examination.

Mr. BENDER. I would like to make a comment here, Mr. Chairman. Can we not bring him in on his own behalf? That is perfectly all right with me.

The CHAIRMAN. That is satisfactory to me. I think that our committee is entitled to have the benefit of the views of some experts on this bill. We need some experts to express their opinions on this bill. We have had the views of a lot of people who have just come up here and have said what they thought about it, say that they want to have