Evening star., 1934-02-06

causes, but also because the effects OF
unemployment extend to every person
in the country and threaten the Ma
tion with ruin.
Points to Two Courses.
The only real problem today Is one
OF method, and there are two major
courses of action to choose between.
One Of these it the attempt to allevi-
ate disaster by makeshift devices after
it has descended upon us. The make
shift method has about as much merit
as man struggling to take off his
overcoat and boots after having fallen
into icy water. The very conditions
which create the emergency make it
difficult to get in a position to combat
it. The very attempts to strip for
action interfere with the main task
of swimming to the shore Thus a
vicious cycle Is created. It will be
years before we can measure the price
which we have paid for our unpre-
paredness in 1929. For three years
after the break occurred few people
pleaded for immediate action and Of
fered concrete proposals. But they
went unheeded because the public as
whole had not become accustomed
to thinking about what should be done
After that we resorted to charity, with
its pitiful inadequacy, its unfairness
to the giver and its generalization of
the taker. Finally we devised con-
structive methods for recovery. But
during the interval millions of people
were permanently disabled by depriva-
ton and fear. Thousands Of children
contracted ailments that will extend
far into the future.
The second method Of dealing with
the unemployment problem is pre-
paredneSS. Preparedness in economic
affairs means insurance or reserves.
Such devices will build up storehouse
for the use of the few people who will
be unemployed from time to time de-
spite our highest efforts. But their
greatest merit is that they will tend
to minimize, II not to abolish, the
likelihood Of depressions. Employers
when brought face to face with un-
employment costs will have a powerful
incentive to the Stabilization of in
dustry. The widespread payment of
benefits when Oppressive conditions
begin to operate will release new pur-
chasing power and swing the cycle
more quickly back to the prosperity
level.
Declared Way to Prosperity.
Some people may inquire why there Is
any need for unemployment insurance
or reserves If the economic mecha-
nisrns fashioned by the New Deal are
going to stabilize industry. Economics
is not an exact science, and the per-
feet stabilization of industry is un-
likely in the near future. Greater sta
bility than We have at present will not
decrease the valid't ty Of unemployment
reserves. 1t viii make them more
feasible and moe scientific, Just as
the development Of medical knowledge
has enhanced the utility of life and
health insurance. I may push this
analogy further. The study OF life
insurance problems has led to better
health and longer life. The study OF
unemployment insurance problems will
promote employment and prosperity.
In addition, there is no harm done
if protective funds are built up To
guard against a crisis that never ma
terializes The reserve funds do not
lie idle in a strong box. They are in
vested just the same as funds depos-
tied in bank. They are used to give
employment, to finance enterprise and
to earn additional income. But these
enterprises and income are earmarked
for the use of workers who may lose
their jobs. Thus the plan serves to
maintain purchasing power that other