of having it correspond with the selling period, which is really over a 4-month period.

In other words, the dates are brought over late in the fall, and we have to hold them until the following fall. Most dates are sold during September, October, November, and December, with that long period of holding them from 1 year's crop to another.

In the old days we used to hold them in warehouses, and the minute the weather began to get a little cold we would rush them through, bringing about a large amount of speed and the wastefulness that goes with speed, and also some inferiority in quality.

So we finally devised a scheme of storing the dates under certain temperatures, and so on, whereby we pack them at more or less of a uniform rate, from January right through until December.

That would make our production curve more or less level throughout the year, whereas the sales curve right after the first of January would slump way down and stay down there until September, and then go up very high through September, October, November, and December.

We have had our plan in effect for about 11 years, with certain minor objections to it. It has worked, I would say, most successfully. Even in the very severe depression years of 1932 and 1933 we reduced our working hours from an average of 54 to an average of 40.

Mr. LEWIS. In your company, then, there was not a great reduction in the number of employees?

Mr. DRAPER. Not a tremendous reduction in the number of employees, no. They work less hours, and of course they got less pay. There is no question about that.

We could not afford to take the full effects of the depression because our sales slumped.

Mr. LEWIS. During predepression days, when you introduced your regularization, was there any violent reduction in the number of employees?

Mr. DRAPER. Oh, no. The point there was this

Mr. LEWIS (interposing). I mean during high production times. Mr. DRAPER. The point there was this, that in the old days we would hire about 200 employees for 8 months of the year, and about a thousand employees for the last 4 months of the year. Then on the 1st of January we would fire about 800 employees.

When we put into effect the regularization plan, we hired 200 employees until about the 1st of March, and then we jumped the number to about 600 employees, between 600 and 700, and then from that time on kept approximately that number right through the year.

When the slump came, these 600 employees slumped to-I do not like to talk figures without the figures on hand, but I should say about 500 employees, some figure around there, or possibly a few less.

Now, then, there is not any use generalizing on this subject simply from the experience of one little company. Also, it would be absurd to say that these methods can offset the full effects of what happens in a depression. Such claims as those would be ridiculous.

On the other hand, I think our experience has shown that to some extent, and to a very real extent, unemployment is a preventable disease.

Mr. LEWIS. That is, chronic unemployment.

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Mr. DRAPER. Chronic unemployment; yes. I approve of that word very much.

Mr. LEWIS. I think that describes your thought.

Mr. DRAPER. Yes; exactly. It is a preventable disease of industry, and managers of industry can have an effect upon its volume, within certain limits.

Mr. COCHRAN. In your business, what has been the fluctuation in the volume of new business, during the depression?

Mr. DRAPER. The volume of new business during the depression has been pretty nearly nil. Our sales have slumped, off-hand, I would say, about 35 percent, from 1930 to December 1933.

Beginning in December 1933 there has been a very decided push up in sales, largely, I think, as a result of the measures that the Government has put into effect, to uphold consuming and purchasing

power.

Mr. COCHRAN. What percentage would you say was the pick up in December 1933?

Mr. DRAPER. The pick up in December was for that month, over the same month a year ago, approximately 20 percent. And it has continued from December right up to the present time in a most amazing and encouraging way.

There again, it seems to me, is an argument in favor of payments for unemployment compensation, payment to workers, in that the consuming power of the workers is to a great extent upheld by payments to them in off times, while they are laid off. And I believe that has an effect upon the consuming power of the whole country. For instance, I think that the money put into the hands of workers recently by the United States Government has unquestionably had a very definite effect upon all consuming goods industries. That is exactly what this bill is designed to do, as I understand it. It is designed to help overcome the awful ravages of unemployment when men are laid off in large volume.

Mr. COCHRAN. You, of course, advocate the passage of this bill? Mr. DRAPER. Most enthusiastically.

Mr. COCHRAN. I want to ask you another question. It has not come to me, really, from your statement here. This bill seeks to provide unemployment benefits for the large group of people that produce goods.

Now, we have other groups that are vitally affected by unemployment groups that render services.

The statement is made that today 3,000 doctors are driving taxicabs in New York City. Should some measure of relief be afforded

such a group as that?

Mr. DRAPER. That is a difficult question for me to answer, because what reading and study I have given to the subject has been mostly in connection with workers in industry.

Mr. LEWIS. There is no pay roll there.

Mr. DRAPER. There is no pay roll, and there is no way

Mr. LEWIS (interposing). There is no one to pay taxes.

Mr. DRAPER. No; and there is no way to check that through some sort of a central management organization.

Mr. LEWIS. I may say to the gentleman from Pennsylvania (Mr. Cochran) that I had that problem to consider in a much more fundamental and radical treatment of this whole subject, and found

that the employer-employee relation seemed to be absolutely essential, if governmental institutional treatments were to be applied. In other words, the doctor is still an individualist, and the lawyer is an individualist. I shall insert an analysis of the treatment referred to (H.R. 5232) in connection with Mr. Andrews' summaries of the State bills.

Mr. COCHRAN. I appreciate that, but at the same time those groups

Mr. DRAPER (interposing). Are human beings.

Mr. COCHRAN. Yes, and they are the victims of the hardest part of a depression.

Mr. DRAPER. There is no question about that.

Mr. COCHRAN. In the present depression doctors, dentists, lawyers, and ministers have suffered.

Mr. DRAFER. Oh, yes.

Mr. COCHRAN. And have not received as much as sympathy.
Mr. DRAPER. That is absolutely true.

Mr. LEWIS. The suggestion occurs to me that the clergymen in the different church organizations do have their societies, principally those in which they take care of the ministers in their old age. Doctors, perhaps, might find fraternal organizations to be a method of treatment of this subject. Of course, the human argument is equally strong wherever a human being suffers.

Mr. DRAPER. There is one possible objection to this bill, in my mind, Mr. Chairman, and it is an objection which could easily be remedied. That is the question of the 5 percent tax.

I must say, as a member of industry, I have seen the efforts of many companies and many men, including our own company, to try to regain their feet. Five percent would appear to me to be somewhat too high.

I would think that figure could easily be somewhere between 2 and 3 percent, and that, even with a tax of 2 or 3 percent, a tremendous amount of good could be done in making payments to workers, and still have the burden on industry to be somewhat lightened just at this time, when so many of us are trying to beat back to normal times. That has nothing to do with the principle of the bill, but is merely a suggestion as a result of my observation and study.

Mr. LEWIS. Have you had time to go into the statistics of the subject enough to have an opinion as to whether, say, a 3-percent tax would be adequate to raise the necessary reserves to meet this chronic disemployment at the time when the benefits provided by the act areto be come available?

Mr. DRAPER. I have. I heard of a study of that matter several years ago by Dr. Leo Wolman, whom you all know. It was in connection with what would have happened in New York State if such a bill had been in effect for 5 years previous to the very drastic depression. As I remember it, he worked it out on a basis of 3 percent.

The result of it was, I believe, that something like $60,000,000 would have been available to the workers of New York State, when,. as a matter of fact, during the year in which we were then talking, I believe only about $25,000,000 had been available to these workers.. In other words, their lot would have been almost three times as well

off, and I want to reiterate and say that the lot of the community would have been almost three times as well off, because that would have provided so much more consuming power.

I hope we will not get away from the argument, which I believe is very powerful, that for the most part this money does not stay in the hands of the workers very long; it cannot, because they have to spend most of it in order to live. Therefore, this fund is gradually seeping through the channels of trade, and really helping every one. Mr. LEWIS. That is to say, it goes to consumable goods entirely. Mr. DRAPER. Exactly, that is the effect.

But nevertheless, it has a steadying effect, a cushioning effect all along the line.

I would like to make one other statement, if I may. It has been suggested by many people who have been thoughtful about this problem and I am very sure that they are sincere that the States should have more time to decide what form of insurance each State desires.

But, Mr. Chairman and gentlemen, with all due respect to these persons, I must say I am not very much in sympathy with that argument. We have been studying this problem off and on for something like 25 years, and it seems to me there is a body of materail all prepared, and a body of evidence all worked out, which is available to every State, and that therefore it would be a perfectly easy proposition for each State to study this problem right now, so we could get some action without delay. So often, even with all these studies that have been made, the reply is, we want more time to study it. Then the depression goes by and the whole matter is forgotten.

This has been so for the last 20 years, and I am afraid it will continue to be so for another 20 years if we do not really crystalize our thought and get some action.

I would urge that the matter not be postponed any longer, but that we bring it to a head in the hope that we can get some definite action before the next depression is on us.

Mr. LEWIS. We thank you very much, Mr. Draper.

The next witness this morning is Mr. Hart, of New York. Will you please give the reporter your full name, your address, and your relation to the subject matter under discussion?

STATEMENT OF MERWIN K. HART, NEW YORK, N.Y., PRESIDENT NEW YORK STATE ECONOMIC COUNCIL

Mr. HART. My name is Merwin K. Hart, of New York City, and I am president of the New York State Economic Council.

Mr. Chairman, I have prepared a statement of three or four pages in length, which, with the approval of the committee, I will follow rather closely, and then be very glad to try to answer any questions you may have to ask me.

Let me say first, Mr. Chairman, that the New York State Economic Council is an organization of members throughout the State of New York. We have members in every county, and our object is to improve economic conditions. Our object is to stimulate employment, believing that if that can be done all of the other benefits we desire will flow from it.

One of our principal objects is to reduce the cost of government, and hence to reduce taxes, but we are keenly interested in every provision we believe will help improve economic conditions throughout the State.

We object to this bill you are now considering, Mr. Chairman, and we urge the committee that it should not be reported to the House and should not be passed, for the following reasons:

It will lay an additional burden on employers at a time when a great majority of them are struggling to bear their present burdens and to keep going.

It is our belief that a majority of employers, probably a large majority of them, have been running in the red on their current operations for some time, and still are. Many of them have dipped heavily into accumulated surpluses; some of them have wiped out their surpluses and have been dipping into their capital.

Some weeks ago a man came to see me in New York, an employing printer who had had a successful business for 20 years. He had reached the point where he told me he did not know how he could keep on more than 60 days longer.

He employed a relatively small number of employees, a dozen or He mentioned the fact to me that the wages of some of them, I forget how many, were about $60 per week.

15.

He told me that he himself, after having used up his life insurance, and making other arrangements to cash in on whatever he could in order to keep the business going and to keep his men employed, had been able during the year 1933 to draw out an average of only slightly over $13 a week for himself and his family to live on.

What employees of that kind of employers need, Mr. Chairmanand I submit that illustration may be multiplied by literally hundreds of thousands-what the employees of employers of that kind need is not such a measure as this, which would require large burdens on their employers; they need to have the burdens removed from their employers, so that those employers may get on their feet and go on to higher and better economic conditions.

The greatest assurance to the employee of good wages and of proper working conditions is for the employer's business to be reasonably prosperous.

I have listened with much interest, Mr. Chairman, to the testimony of the gentleman who preceded me, and I dare say that any company that can face the prospect of an additional tax at this time is able to do so.

I am here today to speak for the man who cannot stand this expense. It is true that the vast majority of employers cannot stand any additional taxes, and if they have to do so many of them will be going out of business altogether, with the result that more and more people will become unemployed.

In the second place, Mr. Chairman, this is one of a number of movements designed to give greater security to the working people. Security is, of course, desirable as an abstract proposition.

But as a practical matter, not even the Government can guarantee security to all the people; because the only way by which the Government can get the means wherewith security can be guaranteed is from the people themselves, or from some of them.