USA > Massachusetts > Middlesex County > Somerville > Report of the city of Somerville 1956 > Part 10
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concerned about long-range planning and the building of an economic floor beneath our economy. One of the major lessons which emerged from the protracted struggle in the abyss of depression was the urgency of introducing mechanisms into our social economy which would insure income maintenance and concomitent consumer purchasing power.
Eventually, there were evolved the plans which became in- corporated in the Social Security Act, which was enacted on August 14, 1935. The Social Security scheme envisioned two approaches to the problem of establishing an economic level beneath which the preponderance of the population would not fall. One phase was that of Social Insurance and the other aspect was that of Public Assistance. The Social Insurance features of the Act were embodied in the provisions for Old Age Assistance, Survivors' Insurance and Unemployment In- surance. In 1956, the Act was amended to include Disability Insurance for totally and permanently incapacitated persons over fifty years of age, but this program will not become ef- fective until July 1st, 1957. The Assistance facets of the Social Security Plan included Federal Grants of Aid for Old Age As- sistance, Aid to Dependent Children and Aid to the Blind. In 1950, a fourth type of assistance, namely Disability Assistance, for totally and permanently incapacitated persons over eighteen years of age was included. Incidentally, in Massachusetts, Aid to the Blind is administered by the State Department of Educa- tion, and therefore does not fall within the perview of our im- mediate consideration. In order to define more exactly our aim in this discussion, we would like to point out that in refer- ence to Public Assistance, we are concerned principally with the four major programs administered by local Welfare Agen- cies, namely, Old Age Assistance, Aid to Dependent Children, Disability Assistance, and General Relief, or Temporary Aid, as it is sometimes called.
The first three types of Assistance call for Federal partici- pation and the costs are also shared by the Commonwealth. The fourth type of Assistance, General Relief, commonly called Welfare Relief, is almost exclusively a local function, with the State reimbursing for a certain minority of cases which are called "non-settled."
As we have mentioned above, it should be indicated for the record, that Massachusetts enacted a so-called 'Mother's Aid' law in 1913, which anticipated by more than a generation, the Aid to Dependent Children provisions of the Social Security Act, although the latter were much more liberal. So also, the
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Massachusetts Legislature, which had been studying proposals for Old Age Pension legislation since 1907, enacted an Old Age Assistance Law to be effective in 1931, some five years before the operative date of the Social Security Act. When the national act became effective, the Massachusetts law was modified and liberalized to conform with Federal standards.
We have come a long way since the days when we were en- gulfed in the trough of depression. Indeed, there are some who cherish the illusion that we eventually worked our way out of the depression. The fact is, however, that from the psycho- logical atmosphere of the economic debacle, there evolved some revolutionary changes in the patterns of our thought and of our behavior, as a nation.
As in the case of war, the emergencies of the depression era, highlighting, as they did, the impotence of the lesser civic autonomies to cope efficiently with the problems at hand, pre- cipitated and immeasurably expedited the processes of central- ization. As a result, the Federal Government usurped a com- prehensive primacy of power which many authorities contend was never contemplated by the founding fathers who framed the Constitution of the United States.
A second factor which deserves particular attention, is that the exigencies of the decennium, 1929-1939, focused the searchlight of popular knowledge on the intimacy of relation- ship that exists between political science and economic func- tioning, or, more starkly, between Government and Business. It was charged, twenty years ago, that the New Deal repre- sented an untenable intrusion of Government into private enterprise. It is now alleged that, in contrast to the previous situation, Business controls Government. There are those of us who abhor equally either arrangement.
Furthermore, there can be no question that World War II and all the scientific development of the last twenty years have contributed to altering our social status in the international orbit. The depression which proved ecumenical in character, served to manifest the economic inter-dependence of the na- tions. World War II demonstrated the significance of the political and military inter-dependence. Nuclear Fission and the latest of electronic communication and aeronautical trans- portation have all tended to emphasize the universal unity of humanity and the essential community of nations. At the same time, these developments have contributed to shattering the identity and minimizing the influence and importance of the
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lesser autonomies. In a world of mass thinking, mass willing and collective action, the human personality, the neighborhood community, the civil entity and even the regional polity dwin- dle in effectiveness.
At first glance, these elements may seem unrelated to pro- grams of Public Assistance, but the contrary is true; for Public Assistance is but a part of the vast network of Social Welfare planning, the necessity for which is now generally assumed.
In a field of human interest as fraught with controversial questions as that of Public Assistance, it is imperative that we. distinguish carefully between extreme positions. Historically, it seems rather ironical that "Laissez-faire" individualism should be succeeded by the so-called "welfare state," much less the collectovist or totalitarian hegemony who now domi- nates a great portion of the world. Hence, when we make sheer statements of fact, they should not be considered as philosophical commitments. Once we have the facts martialed, it will be easy to state our exact convictions.
Probably the best approach to the heart of the subject is to answer the question: "Who are the people now receiving Pub- lic Assistance?" The answer is readily available. Two-thirds of our Public Assistance recipients are the Aged; and two- thirds of the expenditures for Public Assistance go to maintain them. More than two-thirds of the Aged are women. Most of the women are widows or spinsters. The plurality of recipients, while they are eligible at age 65, have not actually requested public Aid until they were over seventy years of age. A very high percentage of the total caseloads of Aged persons are suffering from chronic, progressive, degenerative diseases which require specialized and expensive medical care.
A study of male recipients of Old Age Assistance, whom we have been interviewing for over twenty years, indicates to us that nearly all of them are unskilled laborers who never en- joyed, or in a few isolated instances, never took advantage of adequate educational or training opportunities. The signifi- cant segment were immigrants from European agricultural provinces. Moreover, many of the men who were on the Old Age Assistance rolls until recently were victims of the depres- sion, who were unemployed during several of those years at the very time when they were rearing their families. Accord- ingly, these unfortunate people were unable to save any money against the eventual 'rainy day.'
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As for the women, large numbers of them were simply housewives, whose late husbands were in the same class as the men aforementioned. Rarely, if ever, do we find any women with professional backgrounds or technical qualifications re- ceiving Public Assistance. A good many of the women have been unattached all of their adult lives and have eked out a meager living in domestic or other unskilled labor.
"Who else receives Public Assistance?" Perhaps the sec- ond largest group are those who are beneficiaries of the Aid to Dependent Children programs. The title of this program defines its scope. It is primarily for children who are economi- cally dependent because of the death, incapacity, desertion, or other separation from the father, who is ordinarily the chief wage earner and head of the household. In the beginning, this program went to aid especially children who were paternally orphaned. More recently, with the expansion of the Survivors' Insurance phase of the Social Security program, the preponder- ance of the Aid to Dependent Children cases are attributable, not to the death or incapacity of the father, but to divorce, separation and illegitimacy. In other words, we are witnessing an appalling disintegration of family life and the community is being asked to bear the consequent burden.
"What is the solution to this enormous problem which has reached catastrophic dimensions in our nation?" The answer is fundamentally a moral one and therefore outside the prov- ince of Public agencies. In a democracy, such as ours, we do not recognize any universally accepted norms of morality.
Someone will immediately suggest that all deserting hus- bands should be tossed into jail and they naively suppose that this would solve the principal problem of parental irresponsi- bility. Any such approach, however, is both superficial and peripheral. We already have thousands of deserters in jail, and we are endeavoring to ferret out hundreds of others, many of whom have absconded beyond State boundaries and whose whereabouts are unknown. The business of searching out these culprits is costly and incarcerating them has not proven ef- fective, either from the remedial or the deterrent viewpoints, for the most part. It usually simply means that we subsidize the maintenance of the fathers in prison while we support his abandoned family on the relief rolls.
The third category of relief recipients comprises those who are permanently and totally disabled. The majority of these individuals are beyond fifty years of age and the plurality of
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them have no or very little work history. They include spastic paralytics, polio victims, congenital heart and deformity cases, the mentally-retarded, epileptics, arrested tubercular cases and the like. The medical costs of maintaining these persons is usually extraordinarily high, since many of them, like the ad- vanced Aged, must be placed in expensive nursing homes and chronic hospitals and not infrequently must be provided with prosthetic devices.
The final classification of indigence is that which falls under the title of recipients of General Relief or Temporary Aid. These are persons who characteristically are ineligible for the more sustained programs of Assistance because they are in acute distress, either because of temporary unemploy- ment or because they require emergency medical care which they cannot afford.
There are many persons and families who can surmount the ordinary contingencies of life but who cannot hurdle extraordinary expenditures necessary for hospitalization, chronic illnesses or other types of medical care. It will prob- ably come as a startling surprise to many to learn that of the $128,000,000.00 spent for Public Assistance in Massachu- setts during the calendar year, 1956, well over a fourth of the total sum, actually something over $35,000,000.00, was con- sumed by medical care.
Few persons are acquainted with the relative costs of our four major Public Assistance programs. In terms of our rapidly expanding national economy, the fact is, that, comparatively speaking, the current expenditures, in the light of other re- alities, may be considered amazingly small.
The usual index utilized in gauging our degree of prosper- ity is our "Gross National Product," which is the total amount expended for goods and services in the nation, as a whole. It is interesting to observe that in 1936, when the Social Security Act first became effective, the Gross National Product of the United States equalled $82,743,000,000.00, whereas in 1955, the Gross National Product totalled $390,860,000,000.00. Correlatively, in 1936, the total expenditures for Public Assist- ance, throughout the country, totalled $655,086,000.00; and in 1955, the comparative figure was but $2,748,489,000.00.
Percentage-wise, this means that in 1955, the sums ex- pended for Public Assistance were equivalent to .7% of the
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Gross National Product. This is exactly the same fraction, that is seven-tenths of one percent, as prevailed in 1936.
Now let us take a look at the cost of Public Assistance, compared to expenditures for National Defense. In 1936, ex- penses for National Defense, that is for the maintenance of the Army, Navy, Air and Defense Departments, amounted to about $150,000,000.00 more than the $655,000,000.00 spent for Public Assistance. In other words, in 1936, expenditures for National Defense were well under a billion dollars, namely, $809,000,000.00; but in 1955, the bill for Defense operations had mounted to $35,532,000,000.00, in contrast to the $2,748,000,000.00 spent for Public Assistance but a more graphic estimate may be obtained when we consider the total expenditures for the twenty years, 1936 to 1955 inclusive. In this two-decade period, the total expenditures for National De- fense amounted to $523,325,000,000.00, as compared to $31,053,785,000.00 expended for Public Relief. In the one year, 1956, we know that the budget of the Defense Depart- ment was over Thirty-five and one half Billion Dollars and the estimate included in the 1957 budget, recently submitted to the President, calls for an outlay of over Thirty-eight Billion Dollars.
Assuredly, we need not introduce any profound analysis about the cost of war, of defense against war, of the fact that weapons become obsolete soon after they are perfected, of the fact that these weapons are designed for human destruction, while the objective of Public Assistance is the conservation and improvement of human life. The cost figures for Public As- sistance, incidentally, include the expenditures of the Federal, State and local Governments.
Statistics are sometimes rather dry, but they contain the key to many significant and intimate problems. The costs of war are not only apparent in the expenditures for Defense, in the vast preponderance of our national debt and the interest charges thereon, but also are evidenced in our expenditures for the maintenance of the Veterans' Administration. It is appro- priate to indicate that whereas in 1936, the expenditures for Public Assistance were slightly over $655,000,000.00, in the same year, the bill for the Veterans' Administra- tion totalled $3,839,120,000.00. So also in 1955, while the disbursements for Public Assistance equalled a little over $2,748,000,000.00, the outlay for the Veterans' Administra- tion was $5,329,981,000.00. In summary, during the twenty- year period, 1936 to 1955 inclusive, while the grand total for
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Public Assistance was $31,053,785,000.00, the aggregate cost of the Veterans' Administration was $75,996,398,000.00.
There are other facts which highlight the state of our na- tional economy. It seems almost incredible now, in view of the facts, that when the Social Security Act was being advocated, it was opposed, among other grounds, on the assumption that it was a conspiracy, or at least a plan, conceived with the inten- tion of undermining the private business of Life Insurance. Moreover, for the argument has been repeated even recently, it was contended that the enactment of the Social Security pro- gram would conduce to destroy and sentence to personal thrift. Let us take a look at the facts. A quarter of a century ago, in 1931, the total coverage by U. S. Life Insurance companies equalled $108,886,000,000.00. In 1955, this figure had sky- rocketed to $389,081,000,000.00. So also in 1931, total Per- sonal Savings for that year equalled $2,507,000,000.00, whereas, in 1955, the figure was $16,602,000,000.00, the lowest in five years. In fact, in 1952 and in 1953, the figure was upwards of $19,000,000,000.00. The fantastic character of the claim made by those who state, that the prospect of Social Security payments tends to diminish tendencies to thrift, is evidenced not only by the fact that personal assets of every kind, including Life Insurance, Savings Bank Deposits, and Se- curities, have multiplied unprecedentedly during recent years; but such an allegation is patently voided by the relatively paltry payments made to Social Security beneficiaries and Aged As- sistance recipients.
For example, at the end of 1955, some 4,473,971 workers, retired because of superannuation, were receiving an average monthly benefit of $61.90 and 1,181,900 Aged wives of such retired workers were receiving an average monthly payment of $33.12. Thus the seductive allurement of less than $100.00 per month pension for an aged couple supposedly constitutes the Utopian status which undermines the rationale of conserv- ing personal resources for the non-productive years. As far as Old Age Assistance is concerned, at the end of 1955, we had, throughout the nation, some 2,563,000 recipients and they were receiving an average of $53.90 per month.
There are various other facets which we might well con- template in order to see Public Welfare in perspective. We may, for instance, take a glance at our national economy from another entirely different viewpoint. For example, in 1936, when we spent $655,000,000.00 for Public Assistance, we ex- pended in the same year $3,175,000,000.00, for Alcoholic
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Beverages and opened our pocketbooks to the tune of $1,535,000,000.00 for Tobacco Products, whereas in 1955, while we were spending $2,748,000,000.00 for Public Wel- fare, we were simultaneously siphoning $9,050,000,000.00 for Alcoholic Beverages and $5,373,000,000.00 for Tobacco Prod- ucts.
All this talk about billions of dollars may cause a little vertigo. Presumably, everybody knows what a Billion Dollars is, but perhaps we should remind ourselves that a Billion Dollars is a thousand times a Million Dollars; or inversely, a million times a Thousand Dollars. Consequently it is interesting to point out that in the twenty-year period under review, as a nation, we expended $131,515,000,000.00, for Alcoholic Beverages and $67,261,000,000.00 for Tobacco Products. Both of these figures contrast vividly with the $31,000,000,000.00 which we spent for our Aged, Disabled, Dependent Children and Temporarily Unemployed unfortunates. In the same pe- riod of time, incidentally, our distribution of dollars for "User Transportation" (Automobiles, Bicycles, Etc.) reached the stag- gering pinnacle of $234,954,000,000.00.
Yet there is still another vantage point from which we can judge our costs of Public Assistance, that is in comparison with the enormous distribution of money which we have made for Foreign Aid. Foreign Aid, on the vast scale that we now know it, is a relatively new phenomenon in our history, but during World War II alone, in the era of 'Lend Lease,' from July 1st, 1940 to June 30, 1945, we shared our largesse to the magnifi- cent magnitude of $49,223,000,000.00. Since 1945, through 1955, we have expended so vast and so continually that con- siderable doubt prevails as to the exact costs of our Foreign Relief. Official fiscal releases of the U. S. Treasury point to the total expenditures for Foreign Aid from 1940 through 1955 equivalent to $102,204,000,000.00. A more recent estimate of the Legislative Bureau of the Library of Congress indicates that the total expenditures for the period were more than $112,000,000,000.00. In any event, it is obvious that our expenditures for Foreign Aid from July 1st, 1940 to the end of the fiscal year 1955, were well over three and one half times the $31,000,000,000.00 spent for Public Assistance to our own people, since 1936.
The abandon, with which our extravagant outlays have been disbursed, has been demonstrated beyond cavil by the series of investigative studies and consequent reports by dif- ferent committees of Congress, during recent months. In
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passing, we would also suggest that you take time to read a pertinent article in the Readers' Digest, on this subject, in the April, 1957 issue, by Representative George Meador of Pennsylvania. Moreover, we have been informed by the Special Committee, appointed by President Eisenhower, under the Chairmanship of Benjamin Fearless, former Pres- ident - U. S. Steel Corporation, that our distribution of dollars for Foreign Aid should continue indefinitely at not more than $8,000,000,000.00 annually. Incidentally, this same report tells us that the 1956 figures for Military, Economic and Tech- nical Foreign Aid totalled 9.6 Million Dollars. We may remark here that in the light of present facts, it appears rather ironical that the English Colonists, who first settled in Massachusetts, considered any expenditure of Public money for non-residents in need, an unwarranted waste of funds. Perhaps they would revise their opinion had they lived to see their 'Mother Coun- try' the chief beneficiary of our unparalelled munificence.
In this connection, I would like to include here a letter which I received from the Committee on Foreign Relations of the U. S. Senate under date of December 1, 1955; in reply to a request of mine asking for a detailed breakdown on an annual basis of the expenditures incurred by the Federal Government for Foreign Aid during the period of Lend-Lease. My inquiry was prompted by the fact that communications to other Federal agencies in this respect had proven futile. The following let- ter, by Mr. Carl Marcy, is, to my mind, startling in its impli- cations.
"Your letter of November 17, 1955, with respect to a yearly breakdown of foreign aid figures from 1940 to 1945 has been received.
We requested this data and have now received the follow- ing information from Dr. Ernest S. Griffith, Director of the Legislative Reference Service of the Library of Congress:
"This question has come up many times in the past and we have long since asked the Office of Business Economics of the Bureau of Foreign and Domestic Commerce, U. S. Department of Com- merce, to give us a breakdown by year.
We have been told that such a breakdown is not available, in fact, cannot be made because reconciliations and additional debits have so be- clouded the accounting status of all lend-lease
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credits that the Business Office at last decided to give merely a total war figure in broad classifica- tions."
I regret that the breakdown in which you are interested is not available."
International Aid has only one of the myriad types of sub- ventions underwritten by our generous Uncle Sam. There exists a whole system of subsidies ordained to the advantage of sundry private interests and corporations which receive but very little public notice. Curiously enough, the term "subsidy" itself, has taken on a rather nebulous vesture since it is not readily definable in simple terms. A recent unpublished study, entitled, "Subsidy Payments by the United States Government with Particular Reference to the Period Since 1940," loaned to us by the Library of Congress, states: "A subsidy may be de- fined as an act by the Government involving either: (1.) A pay- ment; (2.) A remission of charges; or (3.) Supplying commodi- ties or services at less than cost or market prices, by means of which private individuals or corporations are induced to supply to a general market a product or service which would be sup- plied in as great a quantity, only at a higher price, in the ab- sence of the payment or remission of charges."
Under the general caption of 'subsidies,' therefore, we may include Government loans made at lower than the market in- terest rate; and Government Insurance provided at lower than private insurance premium rates. Even more important are the major programs, such as the war-time subsidies of the Com- modity Credit Corporation; the war-time direct subsidies of the Reconstruction Finance Corporation; and the subsidies of the Maritime Commission, granted for both the construction and operation of ships. So also, we have:
(1.) Annual contribution by the Federal Housing Authority to local housing authorities.
(2.) Conservation and use of agricultural land re- source payments.
(3.) Agricultural Adjustment payments.
(4.) Parity payments.
(5.) Purchases and losses under the program en- titled "Exportation and Domestic Consumption of Agricultural Products."
(6.) Sugar Act payments.
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In addition, we should list: (1.) Preferential tax treatment for particular categories of persons or groups, such as Coop- eratives; and persons or corporations installing war facilities; (2.) Surplus property sold below costs that can be re-sold or used for productive purposes; (3.) Property liquidation by the Government and turned over to the private corporations at less than market value, such as electric power units; (4.) Loan guarantees, enabling borrowers to get funds or to get them at lower interest rates; (5.) Deficits of the Post Office Depart- ment, - particularly on Second Class Mail, redounding to the benefit of magazine publishers and a score of similar subsidy programs including those concerned with financing Air Mail. In fact, as is well known, the initial capital outlay, and most of the planes used by commercial carriers today, has been under- written by the Federal Government.
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