THE HOOVER PLAN: FATHER OF THE MURRAY BILL
Howenstine, E. Jay Jr.
The Hoover Plan: Father Of The Murray Bill By E. JAY HOWENSTINE, Jr. THE stage is set. The issue is: Should the Federal Government underwrite full employment as a national policy? By full...
...He proposed that a 3 billion dollar reserve of public works be on hand ready to throw into operation at a moment's notice...
...FOSTER and Catchings also expected the Hoover plan to solve the problem of periodic idleness...
...Do They Guarantee Full Employment...
...Obviously, whenever consumer, business, and Government expenditures are not equal to the total expenditures necessary to maintain full employment, that is a danger signal, and the time has come for preventive action...
...21, 1944...
...They are quick to point out, however, that the mere passage of the Bill itself will do nothing to guarantee full-employment...
...Second, if at any time these measures do not provide sufficient employment, then it is up to...
...It does not wait until millions of workers have lost their jobs...
...First, the President shall recommend and the Congress shall adopt measures designed to increase to the greatest possible extent the number of private jobs...
...Balancing the budget apparently took precedence over everything else...
...One of the chief virtues of the Murray-Patman Bill therefore is that it defines the economic responsibilities of Congress and the President and focuses attention upon the lines that public policy should take...
...declared that "Government's first job in the peacetime years ahead will be to see that conditions exist which promote widespread job opportunities in private enterprise...
...But that the Congress will sooner or later underwrite full employment as an objective of the American system, there seems little doubt...
...It was too hot a political potato...
...We can determine how many workers will be seeking work in a full employment economy, and we can determine how much consumers, business, and Government should be spending in order to provide the needed number of jobs...
...Just what chance this particular Bill has of passing, is anyone's guess at present...
...The enthusiasm of the supporters of the Hoover Plan knew no bounds...
...In his annual report of 1922 Hoover strongly urged that public works be used to compensate for fluctuations in private industry...
...28, 1944, that "every American able to work and willing to work has a right to a useful and remunerative job...
...Ralph Brewster of Maine (see Proceedings of Conference, p. 77), and Brewster brought with him Prof...
...But he "specifically asked that his views . . . should be presented to" the annual Conference of Governors in 1928 by the then (now Sen...
...Let us listen to Mr...
...LEST there be any doubt about the extent and sincerity of Mr...
...The Future of the Two Plans Few bills on economic policy in recent years have engendered as much controversy as the pending Senate 380, now reposing in the House in amended form...
...In 1924 he commended public works as an employment stabilizing device in the introduction to a research study by the President's Conference on Unemployment entitled Seasonal Operation in The Construction Industries...
...It was not nearly so elaborate as the Murray Plan, but it was designed to achieve the same purpose...
...These two discussions therefore give us a reliable and authoritative insight into Hoover's thinking on the problem at that time...
...REPUBLICAN politics .regarded the Hoover plan as a major blunder because it suggested the possibility of future unemployment and depression at a time when the Republican Administration was supposed to be the appointed custodian of the Golden Era...
...The focus of this controversy is the so-called Murray-Patman Full-Employment Bill (Senate 380), which has already aroused great comment in the Nation's press, has passed the Senate in diluted form, and is now pending in the House...
...One of the outstanding conclusions of the Conference was that proper public works planning could be a powerful stabilizing influence in years of depression...
...The Objective The original Full Employment Bill states as its objective : "All Americans able to work and asking work have the right to useful, remunerative, regular, and full-time employment, and it is the policy of the United States to assure the existence at all times of sufficient employment opportunities to enable all Americans who have finished their schooling and who do not have full-time housekeeping responsibilities freely to exercise this right...
...In 1921, as Secretary of Commerce, he instigated and was chairman of the President's Conference on Unemployment...
...Hoover was merely proposing a framework within which the spontaneous forces of intelligent cooperation could operate...
...Both political parties and practically all business, labor, and agricultural groups have endorsed this objective...
...Yet interestingly enough, over 15 years ago, Herbert Hoover, then President-Elect, proposed a plan that is surprisingly similar to the present Murray-Patman plan...
...W. T. Foster to discuss with the governors in a semi-official capacity the technical phases of the Plan (see pp...
...Nobody who understands the Proposed Plan imagines that it will prevent all of the unemployment which arises from disability and old age . . . But the Plan is expected to do away with the unemployment which is caused by a general decline in the country's business activity...
...It proposes a budgetary system for the national economy...
...A continued surplus of unemployed workers means decreasing wages, increasing hours and fear for the future...
...Republican nominee for President, Thomas'Dew-ey, in his speech at San Francisco Sept...
...MANY of the enthusiastic supporters of the Murray-Patman Bill have pointed out that one of its new and most desirable features is that, in the words of Sen...
...But it does establish a goal and framework within which to operate...
...In 1923, Secretary Hoover made practical application of the compensatory plan by writing a public letter to President Harding in which he urged that all nonessential Federal construction be postponed in view of the contemporary boom in private construction...
...Nevertheless, some people choke up, argue, and become greatly upset when it is proposed that the Federal Government should underwrite the permanent prosperity of the American free enterprise system...
...1 postwar economic objective...
...By full employment we mean an economy which provides an opportunity to do worth while work it a fair wage for everyone who wants it...
...Only six or seven governors enthusiastically endorsed the proposal...
...Hoover's interest in a compensatory public works policy, let us review briefly his official position prior to 1928...
...Here is the idea in brief, according to Foster and Catchings: "It is proposed that federal, state, and local governments, in addition to appropriating money the expenditure of which cannot be hastened or postponed, shall make certain credits available, in connection with public works planned well in advance, which credits shall be used only when specified, official indexes of economic conditions show that business appears to be headed for depression...
...Unlike the so-called 'Prosperity Reserve', as embodied in the Jones Bill before the last session of Congress, the Proposed Plan operates in the early stages of business fluctuations...
...It goes like the house that Jack built and unemployment is at an end...
...Hoover's Plan: What It Is and What It Is Not—A New Attack on Poverty" which appeared in the April, 1929, Review of Reviews...
...In 1919 he was vice-chairman of Wilson's Second Industrial Conference, which recommended public works as one of the most valuable approaches to the solution of unemployment...
...Full employment has become a driving force in American politics and cannot be lightly dismissed...
...President Roosevelt stated, in his Chicago speech Oct...
...Later, of course, when depression hit and the time for action came sharp upon us', Hoover, for some reason, had forgotten his ambitious plan to abolish unemployment...
...It is a substitute for breadlines and doles...
...After debating the merits of the plan at great length the Conference of Governors tabled it...
...Intense opposition has arisen in some quarters...
...Enthusiastic support has been forthcoming from other quarters...
...Hoover was not thinking in "small change" for his day either...
...the Government to eliminate the difference directly through its employment policies...
...Hoover never, himself, made an official pronouncement on his plan...
...Few people have seriously denied the fact that America's No...
...This of course makes allowance for approximately one and a half million unemployed workers who are normally in the process of changing jobs...
...In many quarters, such an objective has been regarded as radical, un-American, and unfitting as a purpose of Government...
...By contrast, the Hoover plan met an almost instant death...
...Murray, it "provides for preventing unemployment rather than for 'taking up the slack' after men are walking the street looking for work...
...How to Achieve Full Employment The mechanism of the Murray-Patman Bill is simple and sound...
...Under the provisions of the Full Employment Bill, therefore, two major lines of attack are called for...
...In 1921, he created the Division of Building and Housing in the Department of Commerce, which was the first important Government agency ever established to do research in construction with a view to stabilising its place in the economy...
...it is designed to prevent depressions...
...Hoover in his address at Newark on Sept...
...Brewster told the Governors' Conference in a statement authorized by President Hoover that, "The release of three billions in construction contracts by public and quasi public authority would remedy or ameliorate the situation in the twinkling of an eye . . . Follow the flow of those three billions to the contractor, to the laborer, to the material men, to the factory, to the factory employees, to the merchants, to the farmer...
...1 postwar objective is the maintenance of high levels of employment...
...18,1928, when he said: "I wish to lay down the proposition that the very prerequisite, the very foundation of economic progress to our industrial and business employees is full and stable employment...
...The supporters of the Hoover plan were quick to point out, however, that the three billion dollars public works reserve was not something that the Federal Government alone would control, but that the expansion of this amount was contingent upon the whole-hearted cooperation of state and local governments throughout the nation...
...This sounds as though it had come fresh from the pen of Alvin H. Hansen or Henry A. Wallace...
...If at any time there are not sufficient jobs in private employment to go around, the Government can and must create job opportunities, because there must be jobs for all in this country of ours...
...On the part of many, there has been a disposition to regard this Bill as something new, strange, and alien...
...79-84...
...Americans are now witnessing one of the great debates in history, referred to by Business Week as the "Great- Job Debate...
...Later Foster and his co-economist, W. Catchings, published a profound article entitled, "Mr...
...It will therefore be interesting to compare- the Murray-Patman Bill with the Hoover Plan in several significant respects...
...To protect labor, to maintain its prosperity, to abolish poverty, we must so organize our economic system as to provide a job for all who have the will to work...
...Conversely, it is proposed that measures shall be taken looking toward decreased capital expenditures when business appears to be headed for inflation...
...Hoover's plan has long since been buried...
...The preventive note in public policy is nothing new, however, for the Hoover plan aimed to achieve the same thing...
...Neither does it lay down specific policies by which private jobs are to be increased nor outline the extent or manner in which public spending is to supplement private spending...
...The mechanism of the Hoover Plan was also simple...
...Implementation must come later...
...Nevertheless, much of its spirit reappears in the Murray-Patman Bill today...
...It is not designed to alleviate the suffering due to business depressions...
...There is little doubt in the minds of the Murray-Patman Bill supporters about the ability of their plan to maintain full employment, provided the President, and the Congress carry out their responsibilities as defined in the Bill...
...In fact, Foster and Catchings, in describing the Hoover plan, said that "the first thing to observe about this plan is that it is preventive...
...Yet at the same time there is a widespread unanimity of opinion that full employment is our No...
Vol. 9 • November 1945 • No. 44
