xt7wwp9t2q46_10 https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/mets.xml https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/59m61.dao.xml American Liberty League 37 linear feet archival material English University of Kentucky This digital resource may be freely searched and displayed.  Permission must be received for subsequent distribution in print or electronically.  Physical rights are retained by the owning repository.  Copyright is retained in accordance with U. S. copyright laws.  For information about permissions to reproduce or publish, contact the Special Collections Research Center. Jouett Shouse Collection (American Liberty League Pamphlets), No. 13 "Economic Security: A Study of Proposed Legislation - Its Advantages, Its Dangers, and Its Background" February 4, 1935 text No. 13 "Economic Security: A Study of Proposed Legislation - Its Advantages, Its Dangers, and Its Background" February 4, 1935 2013 https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/59m61/59m61_13/Am_Lib_Lg_13_001/Am_Lib_Lg_13_001.pdf section false xt7wwp9t2q46_10 xt7wwp9t2q46 the lead. The· movement for such pensions traces ‘_
back to the White House Conference on the Care
of Dependent Children, called by President * *k
Theodore Roosevelt in 1909. This conference
directed national attention to the fact that it '
was not only socially desirable to keep depend-
ent children in their home environments, but
‘ also in many cases it was cheaper than main- •
taining them in state or local institutions.  
The first definitie legislation for mothers}; pen-
sions was enacte in Missouri in 1911, ut it °
applied only to the county in which Kansas City  
is located. The first statewide law was that of
Illinois, enacted in the same year. Colorado , I
followed suit in 1t9?2hand in 1913 me)thers’ pen-
sions were esta is ed in 17 ot er states. .
Mothers’ pensions are now being paid in all but A StudY of Proposed Logislaf I
three states. I- ‘ _
At first only widows were eligible, but the ` non Its AdVant&g€S’
laws were gradually broadened to ingzlude wom- 5 Its D&11g€fS, and Its
en who were dependent because o desertion,
divorce, imprisonment or insanity of their hus- Background
bands, or other causes. Several of the states
specifically include unwed mothers, and in
others unwed mothers are covered by adminis-
trative practice. The statutory age limit on * * *
allowances for children is usually 16 years, but
scarcity of funds during the depression has
caused some states to geduce the gimit ig actual j
practice to 14 years. tudies ma e by t e Chi - N .
dren’s Bureau indicate that about 280,000 chil- an 1:1gl0;:1;;,hi2;;;§g1;;m:;;;;?:;i:?nav:£(;
dren in 109,000 families are now covered by Segnd efd neegssa OH yefFede1_e1i iS_
mothers’ pensions. The average pension _is about laden for eeeuemileygeeuzty by attempgne
fzga m¤¤fh per family and $11 Per child- . .0 ......1, .. 0.. ...0 .............. .. ....1. ....0..
n act to provide Federal aid to maternity actual experience has provided guidance
and infant welfare was in effect from 1922 to fer the permanentl Safe direction ef Such
1929. Renewal of appropriations under this act eiferts ,, y
was recommended by Presidents Coolidge and A ` -1mmku¤ n.n¤¤m»e1¢
Hoover, but no action was taken by the Con- . .nmumy17.19ss
. gress. .
·I· ·I· I- ·I· ·I· ·I·
The pending Wagner-Doughton Bill covers a
tremendously broad field. If passed, none of
its provisions becomes effective before the fiscal
year 1936. The Federal tax on payrolls under ·*
the unemployment insurance plan is not effective
until January 1, 1936, and the tax on earnings
and employment for old age pensions not until
January 1, 1937. In these circumstances there
can be no excuse for hasty action. There should
be enacted after due consideration a law or laws AMERICAN LIBERTY LEAGUE
which within our Constitutional system will pro- NatamaI Haaaaaaatays
vide a substantial measure of economic security NATIONAL PRESS BUILDING
without jeopardizing the credit of the govern- WASHINGTON D_ O_
ment or imposing an excessive burden on in- °
dustry.
 4 * *
Document No. I3
j' February 4, 1935 C

 · ·   mittee on Economic Security is a most far-
ECOn0m1;S€cu¤tY   reachin§5 measiuge. It contains eight titles and
covers prin e pages.
l Title I provides for grants-in-aid to the states
The following basic principles are suggested 3 for old age pension systems. There is appro-
for consideration by the Congress in its action   grgated $50,000,000 for the fiscal year 1936 and
upon the pending Economic Security Bill:   1 5,000 000 for each fiscal year thereafter. Of
1. Existing conditions due to the depression   these funds 99% per cent shall be apportioned
warrant a most sympathetic attitude toward   pmong phi? sétates to match their outlays, the
— both unemployment insurance and old age pen-   imit o e eral contribution being $15 r
sions. i r; moéltb pciri person benefited. pe
2. The legislation is not of an emergency   it e appropriates $25,000 000 for easch
character. It should be given the most careful   fiscal year, commencing in 1936; for so-called
consideration by the Congress. The various sub- ‘ “In0the1‘S’ pens1ons" for the care of dependent
jects should be separated _into independent children. Of the amount 99% per cent shall be
measulres 1n accordance with the ordinary illipgftlglzid amongibhe stabeihon ac. basis rg lone]
l proce ure. 1r o e expen 1 ures o e s a es an oca
3. Any legislation enacted should be based governments.
on sound fiscal policies and should not impose Tltle IH imposes an "earnings tax" and an
an excessive burden upon the Fedeéal govern- l “?&nployment excise tax" to nnance a Federal
ment. A serious question as to the e ect of pro- l a 0 age Pe11Sl0n Syetem deficits of which would
_ posed old age pension plans upon the finances l be borne by the Federal government. The earn-
of the goyernment in future years has been E mgs WX ls levied UPOI1 all employees in all
· expressed in the report of the Pres1dent’s Com- l elaesei Ofgglduetlbi and agfleultufe Who, on Jan-
mittee on Economic Security. l uary , 7, are ess than 60 years of age, with
4, Any old age annuity system established by the eXeeptl0n of non-manual workers receiving J
the Federal government based on contributions more than _$250_per month. The employment
by temployers and employees should be self-   §}§ad_¤f elle Per eelllb the leur Per
Relief Administration or its successor agency. i Gem ld be dlylded equally beevveell the em"
There is a Federal system of voluntary annuities i Pl0Ye1` and the _emPleyee» Wleh e gradual
designed primarily for people of small incomes   Workms up te elx Per eerlr_rrlsr*eed dr dve
not covered by the compulsory system. This is l Pe? eedlb end the rume vvlllull vvluell We ge
administered by the Social Insurance Board. frem four Pe? cent le elx Perfellll to be Only
hln his message to tliiehCo3gress transmitting 10 yeere meeeed el 20 yee·re· .
t e recommen ations o is ommittee on Eco- -
nomic Security the President approved "compul- Th; greereILhburdeet.upenfleiduegietehee gui;
sory contributory annuities which in time will geehe releee e euee len e 1 he el 1 1 Y e e
establish a self·supporting system for those now ehle rex m eddleige   She tex fee ,51 eemplgye
young and for future generations." The bill as mehr meurehee' W1 Q e eeeeeeery e eenel ee
- 8 `

 this factordin) a readjustment to place the fund eg the e1§11'le1 gepulaliiieu of the eeulatfy is 111
On g Sou;] 3,giS_ S 8. BS W 10 &VG O 3gG p€I1S10I1 8.WS, WB
The Federal grants-in-aid toward meeting the are of the opinion that $50,000,000 will be
cost of pensions paid to old people under state SuH1<>1e11t 111 the f11‘St yeef to pay the Federal
laws are to be on a 50 per cent basis. While the Sh8»1‘e 0f_ the old age Pe11e1011 _e0StS· There-
Federal part of the east is limited to $15 per after,th1s figure will tend te increase rather
month in any case, there is nothing to prevent a 1`3P1d1Y,_&11d by 1980 may reach the great
larger contribution by the states. The Federal tetal estnnated by the &etu&1‘1ee· The est}-
government pays one-half the cost of adminis- mates _0f the aetuetflee eimeulted by th_1e
tration. Standards prescribed in the bill require Cemmittee Me 111 0u1‘ Judgment S0 hlgh 111
payment Of pgngigng to Old pggplg in nggd who 6Sl31II.18.ll€-d Hgl.lI'€S fOI‘   that fl1I'l»l1€1' C3.1’€— _
are citizens of the United States and have re- fu1_ Stl-1d1€S must he glven to them, Wlth the
sided within the state ive years or more and obieetive of finding ways and means for
who are 65 years of age or over, with the pro- reduction and_l1mitat1on of estimated gov-
viso that until 1940 any state may maintain a * ernment eentrrbutwns as of that year.
70-year age limit. States may grant pensions on _ “Obv10usly these figures will _be reduced
a more liberal basis if they wish to do so. The 1f a_c0rnpuls01y system of contributory an-
Federal grants-in-aid are designed to stimulate   nuities is established simultaneously with
all states to enact liberal old age pension laws the Federal grants-in-aid. Sound financing
to care for those who do not come under the demands this simultaneous action. The es-
compulsory contributory Federal annuity system. timates of the actuaries indicate that if a
The old age pensions by the States are intended compulsory system of contributory annuities
to be on a non-contributory basis and it will be 1S started by January 1, 1937,_ the Federal
impossigblg thi-zrefore to avoid a·continuous cost grants-infaidlgogotlgetrion-co$rib;1gory pen;
to the e era overnment. sions W1 y o a ess an per cen 1
g qf the am<{)unt they will reach by that date
. i a contri utory system is not started."
St°·t°'A1d System Also Costly Tléere its a wide v?·ianc¢i of opinion as to the
· . . num er o persons w o wil receive old age pen-
anQ£§3§}I?Ol}a§3g€§1;ngg€£Bg,} ?§&g}égug;,;?n(%,`;'1?i?§ sions. It is estimated that at the present time
the bill a - there are between 7,000,000 and 7,500,000 people
ppropriates only $50,000,000 for the 65 f b t 4 .11. h
fiscal year 1936 and $125,000,000 for each year Over 70 years 0 ?tg€’ a Oud gu golillvgog 8*53
thereafter, 99% per cent of the amounts to be Oli? yemzoo age fem 3     *,6 d
apportioned among the states, a study of the re- El; (:3 gm $$5 th yearilf bagg 000 @068 Ima 25
port of the President’s Committee shows that the a Y Bm W1 B * * OVGY
mal ea Wm me e much lager total- ”i€i§§ €§§.£‘€Stl°5’ tiZ?.°at’?2.31“hEi?2fii;S‘{S’.;SBi2
On thm pomt the report Bays' now above 65 years of age have been reduced to
"Only approximate estimates can be given a state of dependence. On a basis of 3,750,000
regarding the costs of the proposed grants- i)uchhpe£`so1ns, an expenditure of1d$15 per rgonth
‘ in-aid. If a compulsory contributory an- ’¥ y t e e era government wou require 675,-
nuity system is not established at the same L 000,000 instead of $125,000,000 as appropriated p
time, actuarial estimates indicate that the * by the bill. The $125,000,000 appropriation is
Federal share of the cost of the non-con- Q based on the assumption that many of these de-
tributory old age pensions may in the first ° pendents will continue to be cared for by rela-
year reach a total of $136,000,000; in the tives or otherwise. _
second year $199,000,000 and would increase The third part-of the program for old age
steadily thereafter until it reaches abmaxi· security, tlllat wgichFp§ovides for voluntary ain-
mum of $1,294;-300,000 by 1980. We elieve nuities un er t e e era government, is e-
that these estimates are too high, particu- signed to give citizens an opportunity to pur-
larly in the earliger yeitrsi as fzllrey do not al- chase old age liannuitieis at ccist. hThe Fegieral
low suiiicienty or t e ag i ely to occur government wi contri ute ony t e cost o ad-
s before all the dependenéa aged hwill actually ministratgm, purchaselrs of anngities receiving
be granted pensions. ince t e total now amounts ased upon t eir contri utions. While
expended for old age pensions is less than the purpose is stated to be to issue annuities for
$40,000,000 per year and more than half smaller amounts than are ordinarily sold by life
· 10 11

 irgsurcigce c<;mpanies,tthe bill should be bso as- by the states. Both the majority and the ri-
s r1c as o preven any compe ition y e nority reports favored tax concessions by t e
government with these companies. Federal government to employers making pay-
The doubtful points in connection with the ments into unemployment reserve funds.
entirfe field of old age security are so varied and Surveys which were made four years ago by
perp exing that no action should be taken with- the Bureau of Labor Statistics and by employ-
out exhaustive study._ This does not mean that ers’ organizations showed that at that time about
the Coriglress sliioulgi igniore the prloblem or fail 200,000 workers were covered by volunltary un-
to give e nee s o age persons t e most sym- . emp oyment insurance plans. Meanw ile un-
pathetic attention. employment insurance legislation was being
_It 1S regrettable that many people have been pressed in the legislatures of all the industrial 0
mislled irrtp tthénkmg thatha rgantasticd plrgoposal states. Commissions were appointed to investi-
suc as a nown as t e ownsen an is gate the subject in several of the statesand an
within rltlge Hnanciagl possibilitgegégf) our goxgleién- interstate commissipn, rmi];/iresenting the governors
ment. epropose pension o a mont or Y of New York O io assachusetts Pennsyl-\
all persons above 60 years of age as contem-   vania, New Jersey and Connecticut, was organ-
pllated under tlgat plan might mgan an anhnual \ ized on the initiative of Franklin D. Roosevelt,
c arge upon t e government o as muc as ··=‘ then Governor of New York. The report of that
324,000,000,000. Inasmuch as the total national commission in February, 1932, recommended
income last year was not more than $40,000,- compulsory establishment of statewide systems
000,000 the payment of such a huge sum would of unemployment reserves corresponding closely
be utterly impossible. The proposed two per in detail with the system for which provision was
cent tax on all financial transactions of whatever made in Wisconsin in a law enacted January
kind would mean a pyramiding which would 28, 1932.
cause an enormous increase in the cost of liv-
ing. The tax also would not raise sufficient · ·
money to finance this scheme. There could be The Wlsconsln Plan _
no other outcome for such a plan, 1f put into The only unemployment compensation plan
operation than its comp ete collapse. which has reached the statute books of any
l state to date is the Groves llaw in Wisconsin.
B k d f • 1 The plan was approved by t e leg1slature only
ac groun O Soma Inéurancc after 1t had been modified, at the suggestion of
Social insurance has been a subject of agita- Governor LaFollette, to give Wisconsin employ- e
tion in this country for a number of years. Ac- ers an opportunity to carry out their expressed
tuag] experience has been much less extensive than desire tolestablish unemployment reserve plans
in uropean countries. voluntari y. The compu sory features of the law
Bills for unemployment insurance have been were not to take effect if employers of at least
pending in Congress since 1915. The Senate 175,000 persons had established, by June 1, 1933,
Committee on Education and Labor made an voluntary plans approved by the Wisconsin In-
investigation of the subject six years ago, re- _ dustrial Commission. Otherwise, the act was to
porting that government ini}erference in the es-   go into effect July 1, 1933, at which date con-
tablishment and direction o unemployment in- , tributions were to begin. The effective date of
surance was not necessary or advisable at that   the law was postponed by the legislature in 1933,
time. It recommended that private employers   but it was permitted to come into force on July
should be encouraged to adopt voluntary sys- 1, 1934. Benefits are to be payable beginning
tems. A special Senate committee three years July 1 1935. r
ago also reported against a national system of The’law applies to employers, including the
unemployment insurance, suggesting that the state and its subdivisions, who had ten or more
situation be dealt with either by state laws or persons on their payrolls for at least four months
by voluntary reserves maintained by the indus- during the preceding calendar year. Farm labor-
tries themselves with the cooperation _of the em- ers, domestic servants, teachers, employees of
ployees. The ideal solution, according to the interstate railroads, and a few other classes are
Senate Committee, was voluntary establishment _ specifically excluded from its provisions. Un-
of adequate reserves byb eachf plant employer. employment reserves are to be created through
Senator Wagner a mem er o that committee payment by each employer of two per cent of
submitted a minlority report favoring legislation his payroll into a cen