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Previous reports have also pointed out the embarrassing situation in which the Department frequently finds itself with respect to such of its employees as have been in Government service for many years. This Department, like many others, frequently finds itself in the dilemma either of maintaining on its rolls persons who have outlived their usefulness and thus impairing departmental efficiency or of discharging many who by reason of long and faithful service deserve more considerate treatment. Such a situation can best be obviated by the establishment of an equitable system of retirement under such terms as shall subserve the interests of efficiency and economy, and at the same time insure fair financial provision for the old age of faithful employees.

TRAINING OF WORKERS. The duty of encouraging the wageworker to prepare himself for more profitable employment is clearly within the scope of this Department. Again referring to the organic act creating the Department of Labor, we find the clause charging it with advancing the opportunities of the wage earner for profitable employment. It has been proved, not only in this country but in others as well, that the most effective method of increasing and improving the workers' capacity for production is through training opportunities within the industries themselves.

As part of his war duties the Secretary of Labor was charged, in January, 1918, by the President with the creation of an agency that would furnish “a satisfactory method and administration for training of workers.” In accordance with that mandate the Training and Dilution Service, later known as the United States Training Service, was organized within the Department. Although directed principally toward those industries affected by the war, its activities have, as a matter of fact, been far more reaching in their effect. Under their stimulus many industries, realizing the value of training in time of peace as well as during war, have endeavored to continue their efforts toward training workers, although the guidance and encouragement of the Government have been withdrawn.

It is believed that increased skill on the part of the workers, and its consequent stimulus toward greater production, is even more important in peace than in war. And it is felt that the work formerly conducted by the United States Training Service, with the ideal of establishing a means whereby wage earners may continuously advance in industrial growth and development, is so urgently needed

I Act August 1, 1914, ch. 223, sec. 13, Stat. 680.

by industry throughout the country as to warrant continuation of its activities. I recommend, therefore, the enactment of legislation to accomplish that end.


I also desire again to call attention to certain hardships laid upon many persons engaged in travel for the Department. Under the terms of the appropriations granted to the Department, the total amount which can be allowed outright for subsistence is $4 per diem. This limit was fixed upon originally August 1, 1914. At that time the limitation was quite reasonable and no doubt necessary in order to limit unnecessary extravagance and waste of public funds. Since then, however, there has been a marked increase in the cost of living, and in particular of the two principal items (food and lodging) embraced within the meaning of the term subsistence. The figures of the Bureau of Labor Statistics, which are most conservative, indicate that the cost of foodstuffs during the period since the adoption of the limitation has greatly advanced Thus the purchasing power represented by $4 to-day is equivalent to only $2.27 at the time of the adoption of the rule. In consequence faithful employees of the Department find themselves forced to draw upon their own means to make up the deficit between their actual expenditure and the permitted sum. The greater number of these persons are those who are serving the Government at modest salaries, which have not kept pace with the cost of living. They can least afford further drains upon their means.

I therefore feel that an increase in the amount allotted for subsistence is imperative and recommend that it be advanced from $4 to $6 per diem.


Not the least of the factors which made for national efficiency during the war was the proper distribution of labor. Prior to the war it was our custom to disregard the fact that while large numbers of men were seeking employment in some parts of the country, production was seriously hindered for lack of man power in others. During the war efficiency was brought about by bringing together these two vital and complementary factors in production through the United States Employment Service. Unfortunately since the war the department has been forced to so drastically curtail the activities of that service as to render it ineffective of its purpose. If the department is to fulfill the purposes for which it was created not only must legislation be passed permanently establishing the Employment Service, but it must receive liberal appropriations as well.

1 Act August 1, 1914, ch. 223, sec. 13, Stat. 680. 142901-LAB 1919-20

If we are to deal adequately with the problem of unemployment, however, we must not stop with the mere distribution of labor. Distribution itself would be sufficient if the number of opportunities for work and the number of men seeking employment were approximately equal. This, however, is not the case. Normally, there are many more men seeking work than we can properly provide for in our various industrial and agricultural undertakings. The ultimate remedy lies in the creation of new opportunities for employment. Such new opportunities may only be created by a more adequate use of our land and natural resources. To that end I urge that legislation substantially in accord with the views presented elsewhere in this report (pp. 195–199) be enacted.



For convenience of reference at this time when the functions of the Department of Labor have become exceptionally important, the following outline of the origin of the Department of Labor is reproduced from my Fourth Annual Report (pp. 127-129):

Although the Department of Labor is the youngest of the Executive Departments, suggestions and proposals for such a department appear to have been urged continuously since the Civil War. They were so numerous and persistent over the long period intervening between the earliest of them and the creation of this Department, an interval of nearly half a century, as to indicate a steadily strengthening popular demand for some such act of Congress as that under, which this Department operates:

Early proposals.-In 1865 a department of the Federal Government with reference to the welfare of wage earners, and with a Secretary in the President's Cabinet to speak for them, was advocated by prominent labor leaders. Their suggestions appear to have been officially adopted in 1865 by labor organizations of that period.

“Probably the only earlier proposal in any wise of similar character was that of a bill introduced in Congress in 1864 by the Hon. Gottlieb Orth, then a Representative from Indiana, for the creation of a ‘Department of Industry.'

Numerous formal measures bearing on the subject were proposed in Congress from that time forward during the following 40 years or more. More than a hundred bills and resolutions anticipating the present Department of Labor and introduced between 1864 and 1902 are summarized at pages 13 to 21 of the public document entitled "Organization and Law of the Department of Commerce and Labor,' published from the Government Printing Office in 1904 and now out of print.

In 1867 congressional action was secured, but only on a resolution instructing the Committee on Rules to inquire into the expediency of the creation of a standing labor committee.

Some of the measures introduced in Congress, both before and afterwards, were more intimately related to the commercial and business side of industrial affairs than to the wage-earning side. Others, however, distinctly anticipated the present Department of Labor and its principal functions.

First congressional action. Among the latter was a bill, passed by the House of Representatives in 1871, for the appointment of a commission on the subject of wages and hours of labor and the division of profits between labor and capital in the United States. There were also bills for establishing a 'Bureau of Labor,' a 'Labor Bureau in connection with the Department of Agriculture,' a 'Bureau of' Labor, with a Commissioner of Labor,' a 'Bureau of Labor Statistics,

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a 'Bureau of Labor Statistics in the Interior Department,' and a 'Department of Industry. None of these bills was enacted. But several others of similar tenor and purpose, introduced at the first session of the Forty-eight-Congress (1883-84) were followed in 1884 by preliminary legislation in the direction of the present Department of Labor.

Bureau of Labor.-Among those bills was one in the Senate for a Bureau of Labor Statistics,' introduced by Senator Blair. In the House there was one for a ‘Bureau of Statistics of Labor and Industries,' by Representative Willis; one for a ‘Bureau of Labor Statistics,' by Representative O'Neil; one for a “Department of Labor Statistics,' by Representative McKinley (afterwards President); one for a 'Department of Industry,' by Representative Foran; and one for a ‘Bureau of Labor Statistics,' by Representative Lamb. Out of these an act was framed. As a result, therefore, of 20 years of agitation over the country and of effort in Congress for a department of the Federal Government especially representative of the interests of wage earners this act, approved June 27, 1884, created a bureau in the Department of the Interior by the name of the Bureau of Labor.'

“That original Bureau of Labor,' transformed in 1888 into an independent department by the name of the Department of Labor, with a Commissioner of Labor as chief, and therefore not of sufficient rank to be called into the Cabinet by the President, was placed in 1903 under the jurisdiction of the Department of Commerce and Labor as the ‘Bureau of Labor.' It has now come under the jurisdiction of this department as the ‘Bureau of Labor Statistics.'

"Department of Commerce and Labor. Meanwhile the original agitation for a Department of Labor with a Secretary of Labor in the President's Cabinet continued. In 1885 Representative Weaver introduced a bill for an executive Department of Labor with a Secretary of Labor. Gen. Weaver's bill was referred to the Committee on Labor and got no farther; but during the next 18 years several bills having the same or a similar purpose were introduced, and at the end of that time substantial legislative progress was made.

"In form these bills were of considerable variety, although their purpose appears to have been much the same, and some were in title quite like some of those introduced during the period preceding the creation of the original Bureau of Labor. Among them were bills to establish, respectively, a Department of Agriculture and Labor,' a

Department of Industry and Bureau of Labor,' a 'Department of Labor,' a 'Department of Agriculture and Industry,' and a ‘Department of Industries. None was enacted.

' “During this second period, however, several bills of a somewhat different character and purpose were introduced which ultimately played an important part in the creation of the present Department of Labor. Whatever the title any of them may have borne, the object of all was a Department of Commerce.' These proposals for an executive department in the interest of commercial business being finally blended with those for an executive department in the interest of the welfare of wage earners, the Department of Commerce and Labor was created by act of Congress approved February 14, 1903.

Department of Labor.–For 10 years thereafter the welfare of wage earners of the United States was consequently intrusted to an executive department designed to represent the interests also of em


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