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What method can be worked out to meet these conditions
within the framework of the old age insurance system?
How can we assure an adequate minimum of protection
after his death for the insured worker's actual dependents?
How can we assure that the money paid in death claims
increasing to a very sizable annual total in any event will
serve the socially constructive purpose of providing a con-
tinuing income for these dependent families?

These questions have been studied for more than a year
by the Social Security Board and the Advisory Council on
Social Security. Problems of administration and of financing
are receiving full consideration. A system of continuing
benefits to survivors rather than lump sum payments consti-
tutes a logical step forward in the evolution of social insur-
ance in the United States.



Amendment Season for Social Security

Field Representative, American Public Welfare Association

DURING the Seventy-Fifth Congress, twenty-eight
Senators and fifty-five Representatives introduced
198 social security bills of one kind or another.
These bills were introduced during what might be called
a "closed season" on social security, when it was generally
understood that congressional leaders did not intend to
3pen the Social Security Act for any amendments. But
1939 undoubtedly will be an "open season," with the
number of proposals to amend the act far surpassing in
number and scope those advanced during the last Congress.
The yen to amend social security is not confined to any
one title of the federal act, although it seems strongest
with respect to modifying the tax provisions, liberalizing
assistance to the aged and the coverage of the insurances.

Aid to the Aged Enthusiasm for increased old age as-
sistance probably will be greater on Capitol Hill than at
the other end of Pennsylvania Avenue. Earlier and larger
payments under the contributory old age insurance system
are likely, but any increases in government expenditures for
direct assistance for the aged will be made reluctantly, if
at all. This is not due to opposition to such aid, but rather
to a feeling that other groups, especially widows and de-
pendent children, the sick and disabled, are in more need.

Aid to Dependent Children Shrouded in mystery is
the origin of the provision in the present Social Security
Act that the federal government will pay only one third of
the cost of aid to dependent children, whereas it pays one
half of the cost of aid to the aged and blind. The unworthy
suspicion is harbored in the minds of many that there is
some connection between this discrimination and the fact
that children do not vote. Whether or not there is any
causal relationship, it is a fact that from August 1935 to
July 1938, although the number of dependent children
receiving aid increased approximately 120 percent (275,000
to 608,000), the number receiving aid for the aged in-
creased 450 percent (314,000 to 1,713,000), and the fed-
eral government is now providing only one eighth as much
for aid to dependent children as for old age assistance.

A resolution asking the Social Security Board to study
increased contributions for dependent children was passed
unanimously by a group of state welfare administrators
meeting in Washington in 1937. A number of state welfare
boards, by official vote, have seconded the motion. Several
bills embodying this purpose were introduced during the
past session and more are expected at the next one with
the American Legion, the American Association of Uni-
versity Women, the National League of Women Voters, the
American Association of Social Workers, and a number of
other national groups supporting one or another of them.

To finance the present program on a fifty-fifty basis
would cost the federal government an additional $9 million
a year and the states that much less. As such financing un-
doubtedly would stimulate more adequate care for children
and perhaps bring in the nine states which now have no
approved programs for aid to dependent children, it is likely
that it would result in a further federal cost of $8 million


a year, making a probable total increase of $17 million in
the annual cost to the federal government.

Considered as an offset against these increased costs
should be the present cost of caring for these children in
orphanages and on direct relief, the possible social saving in
reduced crime and delinquency, and the intangible saving
resulting from the prevention of broken homes.

Unemployment Compensation Amendments to the
unemployment compensation titles of the Social Security
Act which are likely to receive most serious consideration
are proposals: to consolidate unemployment compensation
and the employment service; to synchronize coverage and
definitions in unemployment compensation and old age in-
surance; to extend coverage; to extend the merit system to
unemployment compensation agencies and to prohibit politi-
cal activities by these employes.

MENT SERVICE: The basic unsoundness of having two separate
federal agencies with a primary administrative responsi-
bility for a program in which their two responsibilities
are inextricably interwoven has become obvious. Difficulties
have multiplied not only on the federal, but also on state
and local levels of government.

All parties concerned seem to agree that there needs to
be a consolidation of unemployment compensation and em-
ployment service on federal, state and local levels. The
only question is How. Should they be consolidated with
other labor functions, with other social security functions?
Had there been a consolidation a year or two ago, the
chances would have been greater than now of putting the
program under the Labor Department. Insofar as the ad-
ministration of the present program is concerned, there are
strong reasons why it should go into that department. But
the increasingly close relationship between administration
of unemployment compensation and old age insurance as
well as common problems with public assistance seems to
favor the administration of them all under one agency.
Potentially, the relationship with old age insurance may be
very close in that some day we may combine unemployment
compensation and old age insurance in a single agency using
a single set of records, as has been done with railroad em-
ployment. This would be very difficult if unemployment com-
pensation were in a separate department. In weighing the
probabilities, one can see perhaps a 20 percent chance for
the consolidation of unemployment compensation and the
employment service in the Department of Labor and a 30
percent chance of consolidation with other social security
"arms." But on such a controversial subject there is always
a 50 percent chance that nothing will be done.

PENSATION: Variations in definition and coverage between
the titles concerning old age insurance and unemployment
compensation taxes could be eliminated to the considerable
advantage of taxpayers and administrators. For example,
old age insurance has a $3000 maximum of wages taxed,
and unemployment compensation does not. Old age insur-


ance levies a tax on wages paid, and unemployment com-
pensation on wages payable. A very material difference is
that old age insurance covers employers of one or more,
while federal unemployment compensation taxes are levied
only on employers of eight or more. The definition of mari-
time employment is slightly different under the two titles.
Should the federal act be amended to iron out these varia-
tions it would be necessary to allow states at least two
years to bring their acts into conformity with federal law,
since most of the state legislatures will have adjourned be-
fore Congress in all probability would have taken action.

Among miscellaneous proposals for modifying the present
unemployment compensation scheme is one for a system of
re-insurance for state funds through a federal pool. Some
states are rinding heavy drains on their funds occasioned to
a considerable degree by problem industries such as coal-
mining in West Virginia, textiles in Rhode Island, and lum-
bering in Oregon. Re-insurance does not seem probable
while all the state funds are still solvent and until the fed-
eral government is willing to make a direct contribution.

Reporting by taxpayers might be simplified tremendously
by providing that one report cover the state unemployment
compensation tax, the federal unemployment compensation
tax, and the federal old age insurance tax. This would save
administrative costs by permitting the abolition of state tax
collection machinery. It would not be practical, however,
unless there were identical definitions of tax liability and
coverage in old age insurance, federal unemployment com-
pensation taxes, and state unemployment compensation.

There is not a great deal of pressure for nationalization
of unemployment compensation, nor will there be until after
a few state funds go "bust." When railroad retirement and
old age insurance both are paying benefits, provided they
do so with an efficiency comparing favorably with that of
the states in unemployment compensation, there may be
increased pressure for nationalization.

Since the proposal to extend the merit system to state
unemployment compensation officials was discussed recently
in Survey Midmonthly [November 1938, page 349] it need
not be discussed here except to say that indications point to
its serious consideration "on the Hill."

Old Age Insurance The election of Sheridan Downey
of California to the Senate on a "$30 every Thursday"
platform, and the remarkable showing of other candidates
endorsing bigger and better payments to the aged, are politi-
cal realities which members of Congress cannot afford to
overlook. To appease the oldsters to some degree and, at
the -same time, not to increase taxes might seem difficult to
a mere mortal, but to Congressmen who commonly achieve
the remarkable feat of straddling a fence while keeping both
ears to the ground, it will seem easy. Certain elements of
such a plan have been worked out and, believe it or not, in
addition to being politically a godsend it is, in the opinion
of some experts, both socially sound and economically ex-
pedient. It involves advancing payment date of the contribu-
tory old age insurance system to 1940 (before elections) and
increasing the benefit rate for the early years. As the reserve
in 1940 will be more than enough to pay these benefits, as
the additional cost involved will diminish with each suc-
ceeding year and as the beneficiaries in the earlier years are
limited in number, this apparently can be done with no in-
crease in the early contribution rates.

Of course, there still will be dissatisfaction with the in-

adequacy of payments during the early years. However, even
under the present method of computing benefits, there is a
heavy weighting in favor of those who have made only small
contributions. To illustrate by the most extreme case: A
person whose total wages amount to $3000 during the first
three years will pay a tax of 1 percent on the $3000 or a
total of $30. His benefit "shall be at a monthly rate of l / 2
of 1 percentum of such total wages" and he will receive $15
a month for the rest of his life. Of course, $15 a month
does not spell security, but during a normal life expectancy
of twelve years after retirement he will receive $2160 or a
return of seventy-two times his original investment of $30.

Among old age insurance experts there is a definite trend
in thinking away from the banking principle and toward the
insurance principle. It seems possible by a shift to the in-
surance principle to provide greater security at no greater
cost. At present we think of old age insurance as a system
of compulsory saving for old age with benefits limited to old
age. By considering the same payments as insurance, it is
possible to provide, with somewhat lower savings in the
upper brackets for old age, a great deal more protection
against current economic hazards by providing benefits to
widows and orphans [see page 371] and perhaps benefits
for total and permanent disability.

Permanent Total Disability It is likely that a start
toward some provision for permanent total disability cover-
age will be made in the coming session of Congress. Un-
doubtedly it will be a very conservative start with perma-
nent total disability so narrowly defined that no great
number of persons will qualify immediately. However, even
a small start would enable the government to build up ex-
perience and to perfect certification and other necessary ad-
ministrative machinery so that a few years hence it would
be in a position to deal with permanent and total disability
on a mass basis. Disability payments probably will have to
be calculated to amount to a little less than old age insur-
ance benefits for persons over sixty-five. Otherwise there
would be an incentive for all aged people to try to qualify
under the disability provision.

The Reserve On no subject has there been more heat
and less light than on the mythical $47 billion reserve. [See
Old Age Reserve, by Beulah Amidon, Survey Midmonthly,
September 1938, page 283]. However, most members of
Congress are inclined to accept the word of the Advisory
Council on Social Security which stated that its members,
"regardless of differing views on other aspects of the financ-
ing of old age insurance, are of the opinion that the present
provisions regarding the investment of the monies in the
old age reserve account do not involve any misuse of these
monies or endanger the safety of these funds."

No change in the reserve and no reduction of social secur-
ity taxes are likely during 1939 although oratory on the
subject, particularly by the least influential members of
Congress, will flourish and grow to luxuriant proportions.

Coverage There are approximately 52 million gain-
fully employed persons in the United States. At present
some 35 to 36 million of them are believed to be covered by
old age insurance. Exact figures are not available because
of the extensive movement of workers between covered and
uncovered employment. There are probably about 12 mil-
lion self-employed persons who are now excluded and about
5 or 6 million agricultural laborers and domestic servants.



Marn of these are already included under the old age in-
surance program because at some time they have worked in
covered employment. Other groups excluded from the old
age insurance program are the federal and state govern-
mental employes, employes of non-profit organizations, sea-
men, bank employes, people over sixty-five who still arc
working, and casual laborers.

There are no insurmountable administrative obstacles to
extending coverage to seamen, bank employes, employes of
non-profit organizations, and people who continue to work
after they are sixty-five. Such extension would bring in
nearly 2 million people. By and large, these groups desire
to be covered and although some of the non-profit organiza-
tions opposed coverage in the first place, the majority of
them are now interested in coming under old age insurance.

It seems likely that during 1939 coverage will be ex-
tended to people over sixty-five who still are working, to
seamen, and to employes of banks and non-profit organiza-
tions. It is not possible to predict whether coverage will be
extended to agricultural and domestic workers, but it seems
improbable that it will be extended to the self-employed.

The extension of coverage to agricultural and domestic
workers raises some practical difficulties, notably the collec-
tion of contributions. Probably a stamp system would have
to be used with the brunt of the administrative load falling
on the Post Office and the Treasury, neither of which are
likely to be enthusiastic about acquiring such a headache.

Extension of coverage of the federal unemployment com-
pensation tax is probably no more difficult than it is for old
age insurance insofar as bank employes and employes of non-
profit enterprises are concerned. Such extension seems likely.
The problems in agricultural employment, domestic service,
self-employment and other fields are difficult and it is doubt-
ful if they will be tackled during the coming year.

Health The expansion of public health, maternal and
child health services, construction and improvement of hos-
pitals and related facilities, medical care for needy persons,
and insurance against disability wage loss were not only
recommended by the Federal Interdepartmental Committee
to Coordinate Health and Welfare Activities but also were
endorsed by the American Medical Association.

The real need for these programs is scarcely questioned.
Discussion will revolve mainly around questions of finance

and administration. Discussions during the last Congress,
especially on increased expenditures for venereal disease con-
trol, indicated that many of even the most conservative
members were inclined to view increased expenditures for
better public health as a sound social investment.

The most heated controversy will center on proposals
for outright health insurance. The Technical Committee
on Medical Care has proposed a plan for grants-in-aid to
states to enable them to set up a general program of medical
care, either by the use of taxation or by state health insur-
ance programs, or by a combination of the two. This pro-
posal reaches into the problems of the ordinary citizen who
is usually self-supporting. Here the American Medical As-
sociation has balked, for the present at least, while the
American Public Health Association has endorsed the basic
objectives of the plan. In the opinion of many experts,
health insurance is the cornerstone of any real program of so-
cial security, the part of most concern to the average citizen.

There has been no definite crystallization of official
opinion on any one definite plan, but there is no lack of
prophets, ready and eager to point the way. No indeed.
From coast to coast they are already packing their bags and
in another month they will be pouring into Washington.
Behind every third bush in the Capital will lurk a patriot
with a plan of his own, and behind the other two bushes
will be hidden two other patriots with machine guns and
scalpels ready to fall on him as soon as he opens his mouth.
Labor, welfare, civic and other groups representative of the
ordinary citizen seem to be unterrified by possible adminis-
trative difficulties and are snatching muskets from over the
fireplace to fight for the protection and advancement of
some program which will provide the average citzen with
greater health security. No one knows where the country
is going with health insurance, but many with hope, and
some with fear, believe we are on the way.

Prospects for Action In Washington there are many
indications that Congress will materially amend the Social
Security Act during 1939. It is almost equally probable that
Congressional leaders will be unwilling even to discuss the
amendments during 1940, an election year. Such amend-
ments as are not made in 1939 are likely to hang fire a long,
long time. Thus, as many believe, the social security pro-
gram is at the crossroads.

A Juvenile Court Gets Its Face Lifted


THE old question of who shall take care of the doctor
when he is sick reaches with slight changes in termi-
nology-, far beyond the world of physicians. Not long
ago it hit with a heavy impact upon a group of citizens in
Sedgwick County, Kansas, who read it as, "Who reforms
the juvenile court when it is delinquent?" They found the
answer in themselves and in a new judge who had been
appointed to fill out an unexpired term, and stayed on
through two succeeding elections.

The question was certainly pertinent. In a largely rural
county lacking the usual delinquency factors of great indus-
trial centers, congested tenement sections, illiterate foreign
populations or organized gangs, delinquency rates were
alarmingly high. "Repeaters" were common, the two county

detention homes were overfilled, and the state reformatories
were protesting that the county was sending up far more
than its "normal expectancy" of children. In the detention
homes, dependent or neglected children were housed along
with the delinquents. Frequently "terms" were as long as
four years. Often there were no records as to why the chil-
dren were incarcerated or from whence they came. And into
this chaos stepped Clyde M. Hudson, five years ago, as
judge of the juvenile court.

Judge Hudson's first reform was to transfer the court to
his cheery private office where the hearings became heart to
heart talks. Idlers were excluded, and newspapers cooper-
ated in printing only what the judge suggested.

His next attention was to the probation officers, since in



Kansas probate matters absorb a large proportion of the
time of a juvenile court judge. A woman was assigned to
work with the younger children and was made referee of
the girls' division. She also heard the cases regarding sex
delinquencies of young girls. A man worked with the older
boys. A Negro woman was assigned to work among her race.

Then plans were laid or plans for plans starting with
a survey made by the National Probation Association fol-
lowed by a study of the county detention homes directed by
the Child Welfare League of America. And to assure suc-
cess there were sacrificial offerings : summer vacations of the
judge and his probation officers used to make a study of the
best juvenile courts throughout the country.

Crux of the whole reform was cooperation with social
workers, the public schools, county boards, the community.
The result, too, was cooperation. Surprised social workers,
whose labors formerly had been trampled underfoot by
roughshod court officers, attended the first case conferences
called by the new probation staff and returned to bask in the
glow of understanding. A child placing agency, skilled in
finding and supervising boarding homes, welcomed the
chance of doing this work for the court. Duplication of the
work between the juvenile court and the social agencies was
pared to the bone.

The schools, caught in the cooperative swirl, established

a confidential history exchange system. The park board
opened up recreational facilities in delinquency areas, with
a resultant decline in summer vacation delinquency. Attrac-
tive new programs of the Ys and Boy and Girl Scouts pro-
vided social outlets for restless children. Carrying it all
along to ultimate success were the understanding and ap-
proval of the community as a whole, nourished through a
wide publicity program and through a committee of thirty
representative citizens, who interpreted to the public the
policies and functions of the juvenile court and acted in an
advisory capacity in the formulation of general plans. The
success of this interpretation was proven by the number of
new volunteers who came to offer their services.

There is still delinquency in Sedgwick County, Kansas.
But the number of cases fell from 425 in 1927 to 295 in
1937. "Repeaters" too are fewer. The county detention
home for girls is being considered for another use.

Judge Hudson divides among the community at large,
the social agencies, and his own probation staff the credit
for pulling the juvenile court of his county out of the
swamp and the mire and putting it on dry ground. But it
could not have been done without a judge who changed
the function of the juvenile court from one of punish-
ment to a search for the causes of delinquency, its treat-
ment and cure.

The Unseen Plague of Chronic Sickness


Assistant Clinical Professor of Medicine, Columbia University;
Chairman, Committee on Chronic Illness, Welfare Council of New York City

RISING on New York's Welfare Island, on the site
of the old city penitentiary, is a great star-shaped
hospital building which constitutes the outward and
visible sign of the city's acceptance of its obligation to pro-
vide proper facilities for the care of its chronic sick.

The new building with its 1700 beds will cost, with its
equipment, about $8 million. It will be ready for use early
next year, the first municipally owned and operated hospital
for chronic patients in the country. Of course it will not

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