THE KEY TO ACTION
Without the ability to convert the politicians and to convince the politicians of the necessity and wisdom of making provisions for old age, we would never have had the old-age and survivors insurance system or any of the other social insurance systems. Sometimes a little guidance helps them; sometimes they develop this pattern entirely on their own account. Don't ever scorn the politicians. They are really the key to these situations in which we now deal. And I want to say this right now: the need for unemployment insurance was even more critical at that time, in 1933, than the need of the aged who could have been handled under large appropriations for relief without having their relief come as a matter of right through insurance. But the unemployment insurance idea was full of hazards for many people, and particularly for the politicians, who tended to take the old-fashioned view that there was something wrong with people who were unemployed, and that they ought to bear the burden of their own sins. If you go back to medieval writing, and on into early 19th- century writings, you find this theme coming up all the time. There are some people who won't work and, of course, they will always be unemployed and stagger along somehow. Now you know and I know that there are an extraordinarily few persons who will always be unemployed and who either don't want to, or can't, because of physical or other disabilities, get the kind of work they can do. But it's always easy to say, "Well, he should have learned to do, something and "No, he shouldn't be covered." Thus, when the bill was debated in Congress there was always opposition to the unemployment insurance based on opinions such as: "Well, a man shouldn't be taxed with this and for that when it isn't his fault." "The employer should not have to pay a tax into the unemployment insurance fund because he's not to blame for it. He can't help it."
And on the merit rating: "Well, if you don't produce any unemployment, why should you pay a tax into the system?"
Of course, we lost on merit rating, and I've always regretted it. I think that some time, in the wisdom of this country and some President who's interested in the matter, we'll wipe out merit rating. You don't have to administer it, so you don't know what a headache it is. But this is what causes the problems in the administration of unemployment insurance today in the various States and under the various State laws.
The public interest in old-age insurance became very great. Earlier, I had conceived it as New York State Commissioner of Labor to establish some kind of old-age and unemployment insurance in the State of New York. Where did the idea come from? I don't know. I must have picked it up in the general reading that one does; in the general conversation of other socially minded people; in the discussions that went on between intelligent and educated people about the English system and how they managed things; in the conversations with people who had just been to England and thought it was such a nice idea that Lady Jones' maid had a little book, and when Lady Jones paid her, she wrote in the maid's little book and this was going to take care of the maid when she was old — when she was 70 years old or 65 years old, she could collect something. Now wasn't that a good idea? Thousands of people thought it was a fine idea
We looked into this, and we fell back upon the report of Mayor's Committee on Unemployment which was written in 1919 and 1920 and had recommended some form of unemployment insurance. We started on a program of writing a report on unemployment insurance in 1922, in the State of New York — on a State basis — because we were in the midst of a depression — a little depression not a big one. At that time I conceived the idea to stir this thing up. I got the Governor to authorize me to go to England to study their system. The English system was full of horrors to me because of their recordkeeping arrangements, which I went to see at Kew.
Now you know all about recordkeeping here. I have observed this enormous building that you have erected to keep your records in, and it's almost as big as the one at Kew, which terrified me because it was so big. And we have the benefit of the IBM which the British didn't have when they began their handwritten system. I remember seeing ladies climbing up on great high stepladders and getting files out of shelves — dusty, dirty — many wearing gloves so they wouldn't get their hands dirty while hunting through the files for John Jones' record. A terrific problem of recordkeeping! You don't do that today.
I'll never forget how startled I was when I saw the first IBM machine throw up records in front of you. It's an amazing convenience! You don't realize what it would be otherwise unless you have tried it.
At any rate, in the State of New York, while Roosevelt was Governor and we were in the midst of this depression in the early twenties I did get him sort of worked up about it. At that point education was the whole thing, you see. We had to et people used to the idea.
American manufacturers and businessmen were coming back from England and saying, "Oh, they have the do over there. The dole is horrid!" Nobody then knew what the dole was. I do now. It wasn't so bad even then, but it was getting something you yourself hadn't paid for. When the depression came, the English put unions into the unemployment insurance system other than those who had originally begun it and paid into the fund.
What else were they going to do with them? They had to do something with the unemployed. They had to provide some form of relief, but it was greatly resented by the older, stable, skilled trades organizations, who had thought they would get up a fund for themselves, to find that their Government put everybody that was unemployed on that fund. It wasn't really very nice, but it wasn't wicked, although the American manufacturer though it was, so that we had a big group of businessmen who would say: "Oh, no; terrible, the dole! Don't mention unemployment insurance to me. That's nothing but the dole."
And I would mention old-age insurance to them to make it easier, but they would say, "No, that's the dole too. I don't believe in the dole."
Franklin Roosevelt was greatly opposed to the dole: "Oh, we don't want the dole; not the dole!" I had a great time to get him quiet down and stop talking about the dole; to try to think about the realities.
GETTING ORGANIZED
Anyhow, this was what we finally did: first, we appointed a committee for the relief of the unemployed in New York State. That was our first duty. Then we conceived the idea of calling a conference of Governors of the surrounding States because at that time every study of unemployment insurance or old-age insurance brought us up flat against this: How can this possibly be done by one State alone?
The conditions are so different in different States. The revenue situation is so different; the tax laws are so different; the industries are so different; the composition of the population is so different. There are great collections of aged people in some States and very few aged in others. California at that time was not the prize old-age State that it is today. But there were equally notable differences between the States. How could Arizona, how could Alabama, how could the State of Maine with its disproportionate population of old people, its decline of youth (because they all left Maine to go to the city)--how could they possibly have individual old-age insurance systems or unemployment insurance systems? How could they rely upon their own villages to collect enough money from the unemployed or the aged (when they were working) to carry such a system? It was also a very difficult thing to do with the small actuarial exposure of the various States. We couldn't ever figure it out for New York State, which is a large, rich State with high tax values and all that sort of thing. There just wasn't enough exposure and there wouldn't have been enough collected to warrant the program.
We discussed this in this Governors' meeting and we hit upon the idea — which I think Roosevelt had already plotted in his mind — of a possible regional pattern. The New York Port Authority had just gone through, so that there was a treaty between New York State and New Jersey to develop the Port of New York. These adjoining States, these contiguous States which have similar industries and similar population problems, might join together to form systems.
The interesting thing is, however, that we talked about unemployment insurance and we talked about old-age insurance, as insurance, and we talked about it for four mortal days. Paul Douglas of Chicago, then a professor of social subjects at the University of Chicago and now a Senator in Congress, was the guiding hand as the secretary of this conference. We ended up with a proposal to think of some form of unemployment insurance on a regional basis. Well, that was as much as you could do in the winter of 1932.
In the spring of 1932, Franklin Roosevelt had gone out to Utah to the Conference of Governors. He was, already, of course, sub rosa, a candidate for the Presidency of the United States — although he hadn't been nominated. Therefore, his action, I may say, was both brave and daring, and at the same time it was subtly attractive to the voter. He made a speech which was full of pleasant hyperbole of one sort or another — flattery to various Governors--but at one point he began to discuss the great problems now facing this country, and he spoke about unemployment. Then he said, "I am for unemployment insurance but not for the dole."
Photo: Roosevelt Signs The Social Security Act: President Roosevelt signs Social Security Act, at approximately 3:30 pm EST on 14 August 1935. Standing with Roosevelt are Rep. Robert Doughton (D-NC); unknown person in shadow; Sen. Robert Wagner (D-NY); Rep. John Dingell (D-MI); Rep. Joshua Twing Brooks (D-PA); the Secretary of Labor, Frances Perkins; Sen. Pat Harrison (D-MS); and Rep. David Lewis (D-MD).
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