UNEMPLOYMENT AND BUSINESS CONDITIONS
THE PRESIDENT. The Departments of Commerce and Labor have been engaged in their usual monthly business and employment survey, and in this connection particularly with view to determining what results have been obtained from the various measures set in motion last November to overcome the hardship and distress brought about following the stock exchange disturbance.
Those surveys are not as yet entirely complete, but there are certain conclusions that are evident, and we will give you the memorandum from the two Secretaries giving the figures and statistics, which, I think, you will find are very interesting and very pertinent
There are certain conclusions that I can draw. One is that unemployment amounting to distress is in the main centered in 12 States. The authorities in the remaining 36 States indicate that only normal seasonal unemployment exists or that any abnormal unemployment is rapidly vanishing, and that there is no particular strain.
The low point of business and employment was reached in the latter part of December and early January. Since that time employment has been steadily increasing, and the situation is very much better now than it was then. The Departments will give you some active figures on that.
The nationwide response to the request for increased construction programs by the public authorities, the railways, utilities, has had a most material result. Construction contracts in those categories show about a 40 percent larger volume for January and February than ever before in the history of the United States, and the total construction program for this year, 1930, shows every assurance of being larger than 1929. The undertakings to uphold wages have all been held. The amount of unemployment is considerably less than one-half and probably not more than one-third of the volume of unemployment at the same period in the cycle following the crash of 1907 or that of 1922.
The measures that were taken to ameliorate interest rates have resulted in a continuous decrease since last December, thus affording lower rates for business and industry and enabling an increased volume of bonds to be placed for public improvement. Available money, however, for mortgage purposes in business and agriculture has lagged behind the other segments of credit. But there are some fundamental improvements there in the decrease in the demands made upon insurance companies for loans by their policyholders, thus freeing insurance company money again to a considerable extent to the mortgage market. And the measures taken by the Federal Reserve System should stimulate the availability of credit for mortgage purposes and enable the resumption of residential construction, which has been lagging behind the other categories.
All the facts indicate that the worst effects of the crash on employment will have been passed during the next 30 to 60 days. The resumption of employment throughout the seasonal trades, with the spring, the gradual strengthening of the various forces of recovery, and the successful and active work of the agencies that have been cooperating in restoration are all finding fine results, and I believe will remedy a very large portion of the existing hardship and distress.
I would particularly call attention to the memorandum from the Secretaries which we will give to you, but I won't read it. It is the result of careful research.
Q. May we have that memorandum?
THE PRESIDENT. We will give you that mimeographed in a few minutes.
Note: President Hoover's ninety-fifth news conference was held in the State, War, and Navy Building at 4 p.m. on Friday, March 7, 1930.
The White House also issued a text of the President's statement on unemployment and business conditions (see Item 77).
In his remarks, the President referred to a memorandum on unemployment by the Secretaries of Commerce and Labor, and an index of employment by the Bureau of Labor Statistics, which were based on departmental surveys of industries and on information furnished by Governors, mayors, and other sources. Texts of the memorandum and the index follow:
MEMORANDUM BY SECRETARIES OF COMMERCE AND LABOR
The number of persons engaged in gainful occupations in the country is probably 45,000,000 or 46,000,000 of whom about 25,000,000 to 26,000,000 are employees. There are no detailed statistics as to the unemployed, and they can only be approximated. The forthcoming census will show the first real determination of unemployment.
Upon a basis of a canvass of trades employing some 17,000,000 people, and applying the same ratio to the whole, we arrive at an estimated decrease of perhaps 1,000,000 and certainly not more than 1,250,000 in the number of persons employed at this date, as compared with one year ago. To estimate the total unemployed, an addition to such number must be made for the winter seasonal unemployment and the number always idle in the shifts from one employment to another. What the total number is can not be estimated, but every evidence indicates that the volume is one-third to one-half that we suffered in the last two previous great disturbances.
The normal seasonal unemployment in the building trades at this time of year is about 30%, while returns show actual unemployment in this field to be about 40% at this time, or an abnormal number of about 10%. In addition to the building trades, workers in agriculture and in certain branches of many manufactures and transportation which are of a seasonal character naturally flock to the cities in winter and increase their burden of unemployment. For example, a good deal of present unemployment in ports on the Great Lakes is due to winter closing of lake transportation and will soon be relieved.
Various surveys show that, based upon all trades, there has been an increase in employment in the country of somewhere from 600,000 to 1,000,000 since the low point at the beginning of this year. In factory industries as a whole employment has increased about 8% in this period. The following are among the industries which show improvement: automobiles, car building and railway supplies, iron and steel, agricultural implements and electrical trades, millinery, shipbuilding. The situation in some other trades has been either stationary or showing slight declines, the latter being particularly those industries affected by changes in the tariff.
The distribution of abnormal unemployment shows that for -+36 states the amount is unimportant, and any pressure is being cared for by local authorities. The unemployment is therefore concentrated in 12 states and is concentrated in the large industrial centers.
The forces of recovery are steadily gaining strength; the winter seasonal unemployment will soon relax and therefore the next 30 to 60 days should show much further improvement.
It would assist greatly during this period if every business concern and every householder able to do so, would survey their situation as to repairs, clean-ups, and betterments that must be undertaken sooner or later, and have them put in hand now with view to relieving the immediate distress in their localities. It is, of course, of paramount importance that the governmental bodies, the railroads, public utilities and industries should continue their able cooperation toward recovery by every prudent expansion of their construction and betterment programs.
ROBERT P. LAMONT
JAMES J. DAVIS
INDEX OF EMPLOYMENT
The index in October, 1929, was 98.3. The index dropped to 86.0 on December 30, 1929. The index increased to 92.8 on February 17, 1930. Between October and December 30 there was a decrease of 12.5 percent. Between December 30 and February 17 there was an increase of 7.9 percent. The index numbers are--
October 98.3 December 2390.2
November 94.8 December 3086.0
December 91.9 January 688.9
December 1691.6 January 1391.8
January 20 92.3 February 10 93.0
January 27 92.6 February 17 92.8
February 3 92.9
Herbert Hoover, The President's News Conference Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/211574
Filed Under
Categories
Location
