May 28, 1945
To the Congress of the United States:
The Congress and the Executive Branch of the Government have already moved to
prepare the country for the difficult economic adjustments which the Nation will face during the
transition from war to peace.
1. The Congress has created the Office of War Mobilization and Reconversion to coordinate the
reconversion activities of all Federal agencies, and that Office has established basic reconversion
policies.
2. Specific laws have been enacted by the Congress setting forth the policies and providing the
administrative machinery for contract termination, plant clearance, financial aid to business, and the
disposition of surplus property.
3. Our military and civilian agencies have prepared themselves to expedite industrial reconversion
and reemployment.
4. As part of an over-all program for returning veterans the GI Bill of Rights provides
"readjustment allowances," weekly cash benefits to veterans until they are able to obtain jobs.
5. Congress has permitted business to carry back postwar losses against excess profits tax
payments during the reconversion period.
6. Congress has established support prices for agricultural products so that farmers will be
protected against a postwar collapse of income.
There remains, however, a major gap in our reconversion program: the lack of adequate benefits
for workers temporarily unemployed during the transition from war to peace. I urge the Congress
to close this gap.
I am confident that, with appropriate measures, we can avoid large scale and lengthy
unemployment during the transition period. However, some temporary unemployment is
unavoidable, particularly when total demobilization becomes possible. Even if reconversion
proceeds rapidly, no amount of planning can make jobs immediately available for all displaced
personnel. We must provide maximum security to those who have given so fully of themselves on
the fighting and production fronts. The transition from war to peace is part and parcel of the war
and we cannot shirk our obligation to those temporarily unemployed through no fault of their own.
To produce what is needed for the Pacific war, we must appeal to the workers to accept and
remain in jobs which they ultimately must lose when munitions production ceases. The Government
has thus incurred a moral obligation to these workers and to those who have stuck faithfully to
their posts in the past.
To fulfill this obligation, we must rely principally upon our existing system of unemployment
insurance. However, the existing State laws embrace three major defects:
1. Only about 30 million of our 43 million non-agricultural workers are protected by unemployment
insurance. The absence of protection for Federal Government employees--in Navy Yards, arsenals
and Government offices--is particularly inequitable, since these workers are subject to risks of
unemployment similar to the risks of those who work for private employers. Lack of protection for
employees in small establishments and for maritime workers also constitutes a serious shortcoming
in the present programs.
2. The weekly benefit payments provided under many of the State laws are inadequate to maintain
purchasing power and to provide a reasonable measure of economic security for the workers.
Most States fix a maximum rate of $15 to $18 a week. This is clearly inadequate to protect
unemployed workers against ruthless cuts in living standards, particularly if they have families.
3. The length of time for which benefits are paid is too short. In nearly one-third of the States, no
worker can receive more than 16 weeks of benefits in any year, and many workers do not qualify
even for this length of time.
Therefore, I recommend specifically that Congress take emergency action to widen the coverage
of unemployment compensation and to increase the amount and duration of benefits--at least for
the duration of the present emergency period of reconversion. Basically this can be accomplished
only by amending the Social Security Act so as to induce State laws to provide more adequately
for anyone who is unemployed.
To be sure, the States have large sums in the Unemployment Trust Fund. But since changes of
State laws cannot be effected overnight, I propose that the Congress, during this emergency
period, extend the coverage of unemployment compensation to include Federal employees,
maritime workers, and other workers not now insured. Moreover, I see no feasible way to make
benefits payable to such workers, unless they are financed entirely by the Federal Government
during the present emergency. The benefits should appropriately be administered by the States.
I also recommend that Congress provide, through Federal emergency benefit payments, minimum
standards for weekly rate and duration of unemployment benefits. Every worker should be entitled
to 26 weeks of benefits in any one year, if his unemployment continues that long. The maximum
payment, at least for the worker who has dependents, should be raised from present levels to not
less than $25 per week. In this connection, Congress will no doubt wish to reexamine the
readjustment allowance provisions of the GI Bill of Rights. All payments should be made through
the existing unemployment compensation machinery of the several States, just as payments to
veterans are now made.
These provisions are essential for the orderly reconversion of our wartime economy to peacetime
production. They are badly needed for the duration of the reconversion emergency.
Decent unemployment benefits would serve as a bulwark against postwar deflation. By assuring
workers of a definite income for a definite period of time, Congress will help materially to prevent
a sharp decline in consumer expenditures which might otherwise result in a downward spiral of
consumption and production. Adequate unemployment insurance is an indispensable form of
prosperity insurance.
Congress will soon deal with the broader question of extending, expanding and improving our
Social Security program, of which unemployment insurance is a part. Although such improvement
is fundamental, congressional deliberations on the broad issues will take time. On the specific issue
of unemployment benefits, we may not have time available. We are already entering the first
phase of reconversion; we must be prepared immediately for the far larger problems of manpower
displacement which will come with the end of the war in the Pacific.
I earnestly hope, therefore, that the appropriate Committees of Congress will undertake immediate
consideration of the emergency problem.
HARRY S. TRUMAN
To the Congress of the United States:
The Congress and the Executive Branch of the Government have already moved to
prepare the country for the difficult economic adjustments which the Nation will face during the
transition from war to peace.
1. The Congress has created the Office of War Mobilization and Reconversion to coordinate the
reconversion activities of all Federal agencies, and that Office has established basic reconversion
policies.
2. Specific laws have been enacted by the Congress setting forth the policies and providing the
administrative machinery for contract termination, plant clearance, financial aid to business, and the
disposition of surplus property.
3. Our military and civilian agencies have prepared themselves to expedite industrial reconversion
and reemployment.
4. As part of an over-all program for returning veterans the GI Bill of Rights provides
"readjustment allowances," weekly cash benefits to veterans until they are able to obtain jobs.
5. Congress has permitted business to carry back postwar losses against excess profits tax
payments during the reconversion period.
6. Congress has established support prices for agricultural products so that farmers will be
protected against a postwar collapse of income.
There remains, however, a major gap in our reconversion program: the lack of adequate benefits
for workers temporarily unemployed during the transition from war to peace. I urge the Congress
to close this gap.
I am confident that, with appropriate measures, we can avoid large scale and lengthy
unemployment during the transition period. However, some temporary unemployment is
unavoidable, particularly when total demobilization becomes possible. Even if reconversion
proceeds rapidly, no amount of planning can make jobs immediately available for all displaced
personnel. We must provide maximum security to those who have given so fully of themselves on
the fighting and production fronts. The transition from war to peace is part and parcel of the war
and we cannot shirk our obligation to those temporarily unemployed through no fault of their own.
To produce what is needed for the Pacific war, we must appeal to the workers to accept and
remain in jobs which they ultimately must lose when munitions production ceases. The Government
has thus incurred a moral obligation to these workers and to those who have stuck faithfully to
their posts in the past.
To fulfill this obligation, we must rely principally upon our existing system of unemployment
insurance. However, the existing State laws embrace three major defects:
1. Only about 30 million of our 43 million non-agricultural workers are protected by unemployment
insurance. The absence of protection for Federal Government employees--in Navy Yards, arsenals
and Government offices--is particularly inequitable, since these workers are subject to risks of
unemployment similar to the risks of those who work for private employers. Lack of protection for
employees in small establishments and for maritime workers also constitutes a serious shortcoming
in the present programs.
2. The weekly benefit payments provided under many of the State laws are inadequate to maintain
purchasing power and to provide a reasonable measure of economic security for the workers.
Most States fix a maximum rate of $15 to $18 a week. This is clearly inadequate to protect
unemployed workers against ruthless cuts in living standards, particularly if they have families.
3. The length of time for which benefits are paid is too short. In nearly one-third of the States, no
worker can receive more than 16 weeks of benefits in any year, and many workers do not qualify
even for this length of time.
Therefore, I recommend specifically that Congress take emergency action to widen the coverage
of unemployment compensation and to increase the amount and duration of benefits--at least for
the duration of the present emergency period of reconversion. Basically this can be accomplished
only by amending the Social Security Act so as to induce State laws to provide more adequately
for anyone who is unemployed.
To be sure, the States have large sums in the Unemployment Trust Fund. But since changes of
State laws cannot be effected overnight, I propose that the Congress, during this emergency
period, extend the coverage of unemployment compensation to include Federal employees,
maritime workers, and other workers not now insured. Moreover, I see no feasible way to make
benefits payable to such workers, unless they are financed entirely by the Federal Government
during the present emergency. The benefits should appropriately be administered by the States.
I also recommend that Congress provide, through Federal emergency benefit payments, minimum
standards for weekly rate and duration of unemployment benefits. Every worker should be entitled
to 26 weeks of benefits in any one year, if his unemployment continues that long. The maximum
payment, at least for the worker who has dependents, should be raised from present levels to not
less than $25 per week. In this connection, Congress will no doubt wish to reexamine the
readjustment allowance provisions of the GI Bill of Rights. All payments should be made through
the existing unemployment compensation machinery of the several States, just as payments to
veterans are now made.
These provisions are essential for the orderly reconversion of our wartime economy to peacetime
production. They are badly needed for the duration of the reconversion emergency.
Decent unemployment benefits would serve as a bulwark against postwar deflation. By assuring
workers of a definite income for a definite period of time, Congress will help materially to prevent
a sharp decline in consumer expenditures which might otherwise result in a downward spiral of
consumption and production. Adequate unemployment insurance is an indispensable form of
prosperity insurance.
Congress will soon deal with the broader question of extending, expanding and improving our
Social Security program, of which unemployment insurance is a part. Although such improvement
is fundamental, congressional deliberations on the broad issues will take time. On the specific issue
of unemployment benefits, we may not have time available. We are already entering the first
phase of reconversion; we must be prepared immediately for the far larger problems of manpower
displacement which will come with the end of the war in the Pacific.
I earnestly hope, therefore, that the appropriate Committees of Congress will undertake immediate
consideration of the emergency problem.
HARRY S. TRUMAN