Mr. Robert M. Ball:
It's my privilege today to present to you, really, the man who
more than any other person started everything off, as far as
social security is concerned. Mr. Altmeyer was the chief of
the technical group, advisory to the committee on economic security,
which developed the original Social Security Act. Then, as most
of you know, he became a member of the Social Security Board;
and, in a very short time, when Mr. Winant left the board, became
the Chairman of the Social Security Board followed by, in a
reorganization, becoming the first Commissioner for Social Security.
So that, really without any fear at all of contradiction, it
may be said that from the time that social security was just
the gleam in the eye of some planners to its firm acceptance
throughout the United States, its establishment and its successful
operations, our
Mr. Altmeyer was the leading and guiding force
in both the legislative work, the development of the program
in the formation of policy, and in the establishment of the
broad principles of administration that still guide the program.
This is a great legacy that he has left to those
of us who are now the trustees of this program. If I could just
comment on one aspect of his contribution, because perhaps it's
the least thought of part of his contribution. I think it's
always clear to people to see legislative advances, extension
of coverage, new program, changes in benefits; this is the kind
of advance that is clear and visible to the public. It's the
same even in fundamental policy; but the longer I have been
associated with a big organization and a growing organization
like this, and the more I have become acquainted with other
social security systems and their administration throughout
the world, the more I'm impressed with the tremendous importance
to the successful carrying out of a program of sound fundamental
administrative arrangement. The fact that in the United States,
from the very beginning, we had in the social insurance area
a unified national program operated through the civil service
is a tremendous asset all through the years ahead. Throughout
most of Europe and South America, perhaps most of the world,
social security is under a great handicap in operation because
of its inheritance of very complicated and involved administrative
setups growing out of historical situations that for one reason
or another seem to make it necessary for them to administer
their program through literally dozens and, in some cases, scores
of independent institutions, elected officials, highly complicated
and expensive arrangements; and it makes it a very difficult
and inefficient type of operation.
Well, Mr. Altmeyer's contribution to getting us
started off right rests, therefore, not only in his contribution
in program and in policy, which all the world knows, but also
in his firm insistence from the beginning that this should be
a career-oriented administration with a unified direction. The
great credit that we now have of a 2 percent administrative
cost system grows out of the sound arrangements that were set
up at the beginning.
I'm not going to spend the time to give you anything
like an adequate introduction of Mr. Altmeyer. I assume that
the great majority of people here know already a tremendous
amount about his career; and most important is that I feel it's
unnecessary to go into detail, because I would say that this
functioning institution is the logical development and further
expression of what Arthur Altmeyer has meant to social security
and in the formation of social security in the early years.
So I give you, at this point, the man who throughout this country
is known as the father of American social security. Mr. Altmeyer.
Well, I don't know whether I'm really the father
of social security or not. At one time nobody would claim its
paternity; now I think there are a great many who claim to have
had a hand in its procreation.
At any rate, I want to thank the Commissioner
for his kind remarks, and the Director, and all my dear friends
on the platform, in the audience here in this room, and throughout
this beautiful building, for having invited me here today to
view the wonders that have occurred during the last 30 years.
I really feel like Rip Van Winkle, on coming back to a scene
which was quite different from the one he left. In 1935, there
were a handful of devoted people, about 2 dozen, who sat around
rather disconsolately wondering what they could do what they
should do, to put into effect this great new program known as
the social security. They were on relief; I will tell you that,
right off the bat. We had presented a budget (now hold your
breath; we held our breath) of $1 million at the end of the
Congress of 1935. Your budget today, I guess is probably $300
million (I'm speaking of administration alone, not of benefits).
It's hard for me to visualize the great increase from a million
to 300 million.
I well remember when I went down to call on Buck
Bucannon, who was Chairman of the House Appropriations Committee
at that time, and he consented to hear my plea for a million
dollars. He cocked his head to one side (he had his feet up
on the table in front of him); and after I finished explaining
why I needed a million dollars, he said, "You know, I don't
believe you know a damn thing about it. I don't think you know
just what you are going to do with this million dollars, but
I'll give it to you nevertheless."
Well, that was one hurdle overcome, and it then
went through the House and got over in the Senate. Huey Long
was in his prime at that time and he was filibustering in the
dying days, dying hours, dying minute of the Congress of 1935.
He was discoursing on the virtues of pot liquor, and I sat in
the balcony watching that clock hand go around, just racing
around towards 12 o'clock midnight, and he was still speaking
when the hour struck. Congress adjourned, and we did not have
a nickel with which to operate.
So as I say, we were on relief, because we had
to prepare a research project for the consideration of the Work
Progress Administration. The research project consisted of research
as to how to administer the Social Security Act. Harry L. Hopkins,
the Director of the Federal Emergency Relief Administration,
who had been a member of the Cabinet Committee that drafted
the act, thought that was a very good project. He gave us the
$150,000 so we could at least pay salaries until Congress convened
the next January. So that's how we got started administering
the Social Security Act back in 1935.
I must say that if I don't watch myself the clock
will race around just about as fast as it did that night that
I was watching it as Huey Long spoke. I thought today I would
just reminisce a bit on the events of days gone by, and then
say something rather general about what I see coming for the
future in social security. The advent of social security in
this country some people have said was inevitable. We certainly
would have had something called--something. Whether it was called
social security, it would have been a social program of some
sort to provide the protection that we envisaged should be provided
under social security. Because 125 other countries have that
sort of program, we certainly wouldn't have been the only industrial
nation without feeling the need.
In that sense it was inevitable; but just exactly
what sort of a social security (as it is now called) we would
have was quite dependent upon the key figures on the theme at
the time the law was being developed, and the law enacted.
Of course, the great key figure was Franklin Roosevelt.
He came to his consideration of social security not at all unprepared.
He had been a State Senator and had participated in the passage
of the first workmen's compensation law in this country, in
New York, which is the earliest form of what we call social
security today. As Governor he had advocated unemployment insurance,
and he'd advocated old-age pensions. His Secretary of Labor,
Miss Frances Perkins, likewise had had experience in the administration
of workmen's compensation and was familiar with social insurance
in other countries. Harry L. Hopkins, a man of great imagination,
energy, and compassion, was also familiar with the field of
social welfare and the contribution that social insurance could
make toward social welfare. I was lucky enough to be Assistant
Secretary of Labor at that time, and so, as Mr. Ball has said,
I was made the chairman of the Technical Board that developed
the recommendations for the consideration of a Cabinet Committee
which the President set up.
I might say that when Congress adjourned in 1934,
it had gotten very hot. It had been a long session and tempers
were frayed, and the President suggested that Congress really
needed a vacation and, if they would go home--this was in June
1934--he would present to them a complete program of economic
security, as it was called at that time, for their consideration
when they reconvened in January of 1935. That gave us 6 months
to develop a program for the consideration of the Congress.
As the chairman of the Technical Board and as a good bureaucrat--good
executive, let's say--I immediately turned to a man from Wisconsin
whom I knew to be the executive director of a full-time staff
who whipped together the relevant data and the alternatives
for the consideration of the Technical Board of which I was
chairman, which in turn presented them to the Cabinet Committee.
The President gave us only two general admonitions.
The rest of it was left to us to develop. The two admonitions
were these: he wanted a program that was sound from an economic
standpoint, and he wanted a program that was administered in
a simple and direct fashion, as he called it, so that Mose Smith,
his farm manager, could go to the local office and find out
all he needed to know as regards his rights and duties and not
have to write to a faceless bureaucrat in Washington and get
a form letter in reply. We took those two admonitions very seriously,
and I think as you folks have lived through the years with this
program and have made it a living reality for the American people
that you have carried out this admonition very well.
The program when it got to Congress had fairly
easy sailing. Congress actually added several features that
were not included in the program submitted by the Cabinet Committee,
and changed the label from economic security to social security.
That was really a splendid thing because social security better
expressed the ideals incorporated in this program. As you know,
this magic phrase has spread throughout the entire world. Social
security is a magic formula; a great goal for all of the nations
of the world today.
But now, turning back to putting this great social
legislation into actual operation--as a lifelong civil servant
and as a student actually under a great economist at the University
of Wisconsin before I had even become a civil servant; I was
impressed with this fact, as drummed into me by this professor
of mine at the University, that administration is legislation
in action. That is so true, particularly of social legislation.
The law on the statute books is a dead thing. It does not come
into effect automatically, untouched by human hands. It only
becomes a reality as it is put into operation by trained and
dedicated human beings, such as you.
Our first job was to set up a core organization.
Many people have said it must have been very very difficult
to start from scratch to develop the largest organization that
has ever been developed under civil service in the United States.
It really wasn't. I don't want you to think that we are entitled
to any credit at all. We are entitled to this much credit; we
knew enough to pick about a half-dozen dedicated persons with
integrity and understanding of the social objectives to be achieved,
and we knew enough to let them be free to choose their assistants,
who in turn would choose persons of that same character. That's
all there was to it.
Charts of organization--I am going to step on
somebody's toes, I know, before I get finished with this--charts
of organization and procedures are needed. They are guidelines
to keep people informed as to what their respective functions
are and their relationships to others working toward a common
goal. There are no substitutes for human beings that work together
to carry out the objectives of the legislation. My goodness!
If you really weren't a well-intentioned and dedicated person
you could make a shambles of the best laid plans of mice and
men, in the form of a chart and work program and procedures.
Here's what we ran up against right off the bat.
We set up this training course, you know, of which I am very
proud. I think that was one of the secrets of our success, this
extensive and intensive personnel training program that started
as soon as we had an office in which to put a chair and a desk.
Of course, the cardinal principle was that the Social Security
Board was a social agency; and it is your responsibility, your
affirmative responsibility, to make that social legislation
achieve its social objective. You cannot sit back and do nothing
but wait for people to come to you, because they do not understand
their rights, will not understand their rights and their duties,
unless they are informed by you and helped by you to realize
those rights and duties. We ran up against this obstacle in
the form of the General Accounting Office. After we had trained
our people in that cardinal principle and they went out to the
local offices to carry out that principle. The General Accounting
Office said to us there is an 1837 statute that says that it
is a criminal offense for any employee of the Government to
encourage or promote a claim against the Government. There we
were, we had a statute on the books; it provided for rights
to certain benefits, and we were told that we could not assist
persons in achieving those rights which a statute had given
them. It took us quite a while to explain to the General Accounting
Office that this was contributory social insurance, and the
whole idea was that certain statutory rights to benefits were
incorporated in the statute, that it would be a mockery if we
did not help people achieve those rights that Congress intended
that they should achieve. This 1837 statute probably is somewhere
on the statute books, but at any rate we haven't heard about
it in the 25 or 30 years since then. (I hope if there is anybody
from GAO in the audience that they're deaf and haven't heard
a word of what I've said.)
You know as I walked through this building, with
its shining equipment, the electric data processing machinery
and all that sort of thing, I couldn't help contrasting it with
the Candler Building with which many or most of you here are
unhappily too familiar. The early days in the Candler Building
when we had the Flex-o-Line central index of which, incidentally,
we were very proud of at the time because it was better than
anything in existence at that time, by far. But that's a far
cry from that day, indeed. As a matter of fact, all of this
is quite amazing to me. I never expected things to work out
so well as they have. I was a little frightened. At the time
we'd hired an expert, the greatest living expert the private
life insurance companies could suggest to us, to tell us just
what we ought to do to carry out this law. After studying for
several months, he called for a full-dress meeting of the Social
Security Board. He stood up to address the Board; and we said,
"Just sit down; there is a chair over there. You don't have
to stand." He said, "I prefer to stand." He was talking about
the old-age benefits law. He said, "I've given this very very
serious detailed study. It is absolutely impossible to administer.
Don't you realize that you will have millions and millions of
little white slips of paper floating in on you like a blizzard;
and before you have dug yourself out from the first blizzard,
the next blizzard of little white slips--(from employers, you
know, making their wage reports. The first time the first reports
were individual employer wage slips, not payroll reports, as
we rapidly discovered was more feasible.) He said, "It is utterly
impossible."
Well, we said we have a law, and we can't very
well go back to Congress and say that we can't administer it.
So, we proceeded to develop the central organization here, over
at Baltimore, and he'd frightened us so much that we thought,
to be on the safe side, we'd better set up 12 production lines,
each one absolutely independent of the other. Then we'd have
a flying squadron which would go from one to the other, and
as one broke down the flying squadron would go in and get it
started again.
We would hope that the other 11 would keep on
going. Well, that is funny in retrospect; but it wasn't funny
at the time and it cost us a million dollars to have 12 instead
of 1 integrated production processing system in Baltimore. At
the end of 1 year, the 12 were consolidated; and since that
day you folks have been able, very successfully, to do the impossible.
I could go on and comment on other incidents.
We did fairly well, but we did run into some criticism in 1939
and 1940, after we had been going a year or so. We used an expression
for unidentified items that we should never use--we called them
John Doe's, and we put them in suspense. Some columnist got
hold of these John Doe's and they ran into the hundreds of thousands,
maybe several million; and while they were only a fraction of
1 percent of the total wage items, a million or two John Doe's
struck the imagination pretty forceably. The columnists started
speculating on what was going to happen to the rights of these
people whose wages had not been recorded properly.
So we ran into that sort of criticism, but on
the whole we were able to give a good enough account that we
went to the Congress for improvements in the Social Security
Act of 1939. As you know, the law before 1939 provided only
for small lump-sum payments and monthly payments to begin in
1942. Well, the law was liberalized so that instead of being
an individual old-age benefit law it became a family insurance
plan with dependents allowances, survivors allowances. Monthly
benefits started being paid in 1940 instead of 1942. I thought
that was an indication that we had not done too bad a job.
The war came along, and for 10 long years nothing
really was done to improve social security. The only thing that
was done was wrong, because there was a 1948 amendment that
excluded 600,000 so-called "independent contractors," to use
a legal expression--persons who were on the borderline, or liked
to be on the borderline between being employees and self-employed.
But then, in 1950 we had another breakthrough. We liberalized
the law greatly, and it needed it. Just think of the anomaly--in
1950 we had more persons receiving old-age assistance than were
receiving old-age insurance benefits, and the average monthly
amount of old-age assistance was higher than the average monthly
insurance benefit. So Instead of social insurance being the
first line of defense against destitution, assistance had become
the first line of defense, and the social insurance relatively
unimportant.
So, when we got the amendments of 1950 that was
a rather great landmark in the development of social security.
Of course, the inclusion of farm and domestic employees and
urban self-employed was a great accomplishment. There were other
accomplishments--the long struggle for disability benefits,
which I cannot recount to you; in fact, you are more familiar
with the details of that than I am probably. But we now have
disability benefits in this old-age, survivors insurance law,
so it is old-age, survivors, and disability insurance, a long
title but nevertheless descriptive.
Another landmark that I felt was very very significant
was the inclusion of farm operators; that is, farmers themselves
in 1954, as I recall. I'll tell you why it struck me so forceably.
From 1940 on, I had been urging the venerable chairman of the
Ways and Means Committee to include farmers. I would go to him
and have long talks with him. He was a grand old man, had been
a farmer himself. He said, "Doctor"--I always wondered whether
it was a compliment or a little disparaging title that he applied,
but at any rate--"Doctor, I will listen to you as soon as the
first farmer with manure on his shoes comes into my office and
says he wants to be covered. But up to this time not a single
farmer has ever written to me or come to my office saying he
wanted to be insured under your social security system. I am,
therefore, going to wait a while longer." But by 1954, social
insurance had proved itself sufficiently so that the farm groups
of this country wanted the protection. As a matter of fact,
I was given a citation by a farm group after I had left Government,
which I thought was rather ironic because that particular farm
group had been the one standout against having farmers covered
under social security.
So now, what about the future of social security
in America? I am going to disappoint you because I'm not going
to give you a blueprint. I don't think any human being can give
you a blueprint. I think it will have to be a consensus of the
opinions of many people upon the express needs of the constituents,
of the voters, the citizens of this country. But let me make
a few general observations regarding the considerations that
I think will need to be kept in mind in the future development
of social security in America. The first observation I should
like to make is that our so-called affluent society has by no
means reduced the need for our more adequate social security
system. On the contrary, it has increased the need in some respects,
anomalous as that may seem. Our per capita income has increased;
as a matter of fact, it's tripled since the Social Security
Act was passed, even taking into account the increased price
level.
But still there is an appalling amount of poverty
in the United States. I remember 1936, Franklin Roosevelt standing
on the steps of the Capitol and saying, "I see a third of the
Nation ill fed, ill clad, ill housed." If he were alive today,
he would tell us there are at least one-sixth still ill fed,
ill clad and ill housed; and that doesn't tell the whole story,
because the poverty is concentrated in certain areas, certain
groups of our population, which makes it all the worse. Furthermore,
our entire population whether they are in the low income group
today or the middle income group, or even higher, are exposed
to increasing hazards to their economic security, strange as
that may seem, because these great changes--industrialization,
urbanization, technological changes, and changes in consumer
demand--have resulted in a less self-sufficient family group.
It has resulted really in a greater reliance upon the continuity
of income, of the paycheck coming in every week, or every 2
weeks, because installment buying has increased far more than
has savings or than have any of the other means of private provisions
against economic insecurity.
The net result is that with this great general
increase in prosperity we still have a great deal of economic
insecurity against which we must provide effective protection,
in my opinion, through a contributory social insurance system
to the maximum extent possible. At least, we must provide a
minimum basic security against all of the major economic hazards,
such as old age, disability, sickness, death, and unemployment.
I stress basic, because I do think it is possible for people
to build upon this general underpinning of security--build more
effectively than if it did not exist. I think, of course, we
have to go a long way further in providing for social institutions,
social services of one kind or another, to prevent many of these
hazards occurring.
In deciding what form of social insurance we shall
develop to meet these hazards that I have touched on briefly,
I think we must decide which level of Government is going to
do the job. That level of Government should do the job which
can do it most effectively, whether it's Federal, State, or
local. That's a difficult decision many times to make. I think
we have to take into account the non-governmental arrangements
that are in existence, that have grown--the so-called fringe
benefits--in determining just what form of basic security we
provide through governmental measures.
I can't go further in giving you specifics at
this time, but let me say that I think our ultimate goal should
be a social security system which literally extends from the
cradle to the grave. I use that expression deliberately, because
I know it is considered sort of a double expression by many
people, who use it sneeringly to deprecate any governmental
plan to provide economic security. But these hazards do affect
us throughout our entire life span, and I think that's a good
expression. As a matter of fact, it's usually attributed to
Lord Beveridge, who developed the famous Beveridge plan in Great
Britain. He incidentally developed it at the insistence of that
arch-conservative Sir Winston Churchill, and he presented it
to his country when the bombs were still falling. I can testify
from personal experience that it was Franklin Roosevelt who
first used that expression, because he used it; and in looking
through my files the other day I verified it. He used that expression
in 1940 and 1941, and the Beveridge report did not come out
until 1942. So I think it's a good expression and will continue
to use it, even though to some it may be a little bit shocking
and smack of socialism, and welfare state, and a lot of other
things that are going to take away our initiative and our freedom
if we don't watch out.
It seems to me that the people who are fearful
that social insurance will affect the initiative and the freedom
of human beings don't really comprehend the meaning of those
terms, and the motivations that are involved. It seems to me
that it isn't fear that presses people on to high endeavor,
to do better and better, but hope; and I think social insurance
replaces fear with hope. Furthermore, when we talk about freedom
we should think of it in composite terms. Freedom means equality
of opportunity, not just to be let alone. Someone said many
years ago that everybody should be let alone so that he could
carry out--achieve his own rugged individualism and have the
right to work out his own "destitution," but that's not the
kind of freedom that is worthy of Americans.
We should trust our Government, because the Government
is us, really. It's a democratic government. After all, ourselves,
organized to provide for ourselves those things that we want
provided and which can be done better through government than
through individual uncoordinated action. I think that conservatives,
as well as liberals, should favor social security because in
my judgment it favors, it strengthens our system of free enterprise
by enabling it to encourage invention, improvement, elimination
of waste, variety and continuing adaptation to changing ideas
and circumstances without causing, at the same time, great individual
hardship and serious social problems to which I have already
referred. Indeed I think social security does even more. It
helps our democratic form of government to achieve its primary
obligation as expressed in the very first sentence of the United
States Constitution, which is to promote the general welfare.
Some people seem to have forgotten that.
In conclusion, may I say that I am absolutely
certain that all of you will continue to do your utmost to assure
that social security does, in fact, fulfill this high purpose.