Secretary TOBIN. I would say that probably 45 percent or better of wage earners are covered. About 22,000,000 workers are covered. We have about 15,000,000 factory workers in the country. These are covered. Then in trade there are certain provisions under the law-I would be delighted to have this, and I proposed it, all we would have to do, if you will join Senator Sparkman and put just this one phrase in the law, "affecting commerce," you will cover everyone practically in the country. That is all you need. Mr. RICH. If it is good for one class of people, why is not good for all? Secretary TOBIN. I did my best to convince the committees of both the House and Senate that would be a sound approach to it. Senator SPARKMAN. But getting back to the number, did you say there were about 22,000,000 covered? Secretary TOBIN. There are about 22,000,000 employees covered under the law. Senator SPARKMAN. And that is 22,000,000 out of about 50,000,000? Secretary TOBIN. Nonagricultural? Senator SPARKMAN. With nonagricultural, it would be about 50,000,000-22 out of 50. Secretary TOBIN. We have about 63,000,000 potential workers in the country. Senator SPARK MAN. Including agriculture? Secretary TOBIN. Close to 60,000,000 working now. That includes, say 812 million in agriculture. It includes Senator SPARKMAN. Military? Secretary TOBIN. Yes, the military; and the self-employed. I would say we probably have working for salaries and wages well above 40,000,000 people in the country, including all workers not covered as well as those covered. Senator SPARKMAN. Added to that would be those that are covered by the 26 State laws? Secretary TOBIN. Yes. Senator SPARKMAN. I do not mean covered by the Federal law but by some kind of a minimum wage law. Secretary TOBIN. Well, some of the State laws cover only women. Senator SPARKMAN. Yes. Secretary TOBIN. And some of the State laws cover both men and women. Then they establish the rates usually by industries. And some of them are not very helpful, they have pretty low standards. But, nevertheless, the principle is there. I would much rather take the Congressman's position and change the existing law to put in "affecting commerce," and then I believe we would bring in the great bulk of the workers. Mr. RICH. Does it not make it more difficult for those who are not under it now since we have it for certain segments of industry, make it more difficult for those in the low-income groups now to exist? Secretary TOBIN. That is true. Mr. RICH. In other words, it may help some few people but it is a hindrance to others? Secretary TOBIN. That is right. And then there are special exemptions written in the law excluding this classification and that one. Mr. RICH. I have another question, Mr. Chairman. Mr. RICH. Mr. Secretary, in this old-age and survivors insurance, I listened very intently to your statement in reference to your thought that the Federal Government was the one that should have the principal insurance. And then you made the statement that we are writing today more group insurance by companies. To your knowledge were there any companies or corporations who carried their insurance with insurance companies and like the industries you spoke of that went out of existence, or in bankruptcy, that could not meet their obligations? Secretary TOBIN. No, I know of no such companies. You see this great trend has come for a long period of time. About 1900 the first industrial companies started pension plans. They were quite moderate. And around the time of the First World War quite a few additional companies set up old-age pension plans. I suppose at that time it was as an incentive to hold help when the inclination was to move from place to place. Then there has been a decided surge in that direction in the immediate postwar period following World War II. And I do not know of my own knowledge of a single insurance company carrying that kind of insurance that failed during the period. Mr. RICH. Then if the corporations would go to these insurance companies and pay their premiums to them, and let them carry it, they naturally would leave the benefits accruing to them over a certain period of time until all the funds were exhausted, at least. Secretary TOBIN. Let me point this out to you: It would cost the company for the voluntary insurance policy much more to give the worker a vested interest in the policy than to have just an old-age, retirement insurance policy in which the employee had no vested interest, because in the writing of the rates the insurance companies would, from an actuarial point of view, determine the number of people who will leave employment, and the number of people who would pass away prior to arriving at the age of 65. So that the rate that the company has to pay is a decided factor in the kind of policy it is going to give to the employees. Mr. RICH. Yes. Secretary TOBIN. And that is why many of the policies were written with no vested right in the employee, with complete control of most of the insurance systems in the hands of the employers. Mr. RICH. The employee received a policy for those benefits. And if he received a policy, certainly the insurance company, if they do not go broke, ought to make good. Secretary TOBIN. Supposing there is a clause in that policy that merely says, "If you are with the company at the age 65." If the company is out of existence at the time, if the company has gone bankrupt, if it goes into the hands of new owners and they decide to abandon the policy, or if the man decides to change his job, there is no equity of any kind the moment any one of those happen. Mr. RICH. I do not suppose everything can be covered in an insurance policy. If you do it makes it complicated and difficult. You have got to have rules and regulations in any good-regulated business. Secretary TOBIN. If you want to give protection to the average American, a sound system is the old-age and survivors insurance sys tem under Federal security. There if the employer goes bankrupt, he still has it. If he changes his job, he still has his protection. Mr. RICH. Did I understand you to say a while ago that when a man becomes 65 you felt it was his duty to relinquish his job? Secretary TOBIN. Oh, no; I did not say that. I said there should be every encouragement to a man or a woman who has reached the age of 65 to carry on. Mr. RICH. That is right. I think so, too, and I misunderstood you then, because I was afraid you said when a man became 65 he should give his job up to somebody else. Secretary TOBIN. I said that one of the motivating factors behind the enactment of the old-age and survivors insurance in 1935 was the hope that eventually people reaching the age of 65 would be encouraged to leave the labor market. Mr. RICH. I am glad to have that cleared up. I have one other question, and that is in reference to the low-income families. Do you find them mostly in the cities or in the country? Is there any differential between the percentage to any great extent? Secretary TOBIN. Well, I will get that answer for you; I have not got it. But of the income families below $2,000 in the rural areas and this is not a direct answer at all-20 percent of those families have as a family head a person over 65 years of age. Could you answer that question, Mr. Stewart? Senator SPARKMAN. I believe it is given in our committee study. Secretary TOBIN. I think it is. Senator SPARKMAN. I believe we can find it in there. It is on page. 10, table 2. Mr. RICH. Mr. Secretary, yesterday it was stated here that there were 5,500,000 families that did not have wage earners, and 3,000,000 people that were out of work, who either did not want work or else could not find jobs. Can you give us the percent? Secretary TOBIN. You have got 59,500,000 people right now, as of November report, gainfully employed in the United States. And I think there are 3,400,000-I am drawing on my memory-who are unemployed. Mr. RICH. 3,400,000? Secretary TOBIN. Yes. Mr. RICH. I think they said 5,500,000 families did not have a wage earner. Secretary TOBIN. You take all of your people under old-age and survivors insurance, all of your aid to dependent children casesunder that system it is the desire to have the mother remain at home with her children rather than go to work-all of those families would not have a breadwinner, and all of those on old-age assistance, which is the charity form of help. So that if you took your 3,400,000I think that table is in here also. Senator SPARKMAN. Table A-2, page 62. Secretary TOBIN. Head of family not in the labor force, 5,520,000. That would take in all forms of old-age assistance, old-age and survivors insurance, aid to dependent children, where in most cases you would have no father as the head of the family, you would have a mother or invalid father. And then cases of probably the physically handicapped and unable to work, which make up that total. Senator SPARKMAN. The 5,500,000, according to the table, are not included in the labor force. Secretary TоBIN. No. Senator SPARKMAN. None of them are in the labor force. Secretary TOBIN. None of them would be in the labor force because anyone in the labor force is someone who desires a job and is capable of work. Senator SPARKMAN. That is given in another column. Secretary TOBIN. Yes. Mr. RICH. A statement was made here yesterday, Mr. Secretary, that 3 out of every 30 pupils that go to school find themselves at some time in their life in an asylum; that they were not mentally fit. And they stated there were 2,500,000 children that were not educated. Secretary TOBIN. You mean 3 out of every 30 children? Mr. RICH. That would be 10 percent of our children that go to school eventually find themselves in an asylum. Secretary TOBIN. You mean during the whole span of life? Secretary TOBIN. That is a figure which I am not familiar with, but I do know out of our 140-odd million Americans, approximately 1,000,000 Americans are in mental institutions of one kind or another during the course of every year. That might be for observation for a short period of time, and a percentage of them are permanent in mates. Mr. RICH. Mr. Chairman, may I insert in the record at this point a statement that was given to me in reference to that and gives the data and where it was gathered? Senator SPARKMAN. Yes. Mr. RICH. It is: The Statistical Abstract of the United States, 1947, reports at page 57, that in 1940 the number of inmates 14 years of age and over in the mental institutions of the United States totaled 591,365. This is less than one-half of 1 percent of the population over 14. Of the number reported, 342,945 were single persons, 178,554 married, 49,310 widowed, and 20,556 divorced. In the age grouping the largest number were in ages 45 to 54 years with 129,530, and 35 to 44 years with 119,183. Males made up 317,812, and females 273,553. Most of the inmates came from the North, 402,470, and the South had 129,852. City folks and rural nonfarm dwellers accounted for about 90 percent of the total inmates while only 48,358 were reported as coming from rural-farm communities. In 1944 the number of patients in hospitals for mental disease was reported to be 501,751 at the beginning of the year and the rate per 100,000 of estimated populations was 363.4. This means that the average rate is 3.634 per thousand or .3634 per 100 of the population. It is true that the rate of mental cases has been growing. In 1923 it was 241.7 per 100,000; in 1931 it was 273.0 per 100,000, and the peak was reached in 1943 when the rate was given as 365.4 per 100,000. From the statistics we have at hand, it does not seem probable that the statement of Mr. Thurston can be justified. PAUL O. PETERS. Secretary TOBIN. The figure of 3 out of 30 seems to me to be a very high figure. Mr. RICH. It seems so high to me I just could not believe that was the case, and I thought maybe you had some information with reference to that. Secretary TOBIN. No; I have not. Senator SPARKMAN. I heard Dr. Oberholtzer quoted this morning as saying it was substantially correct. Secretary TOBIN. If Dr. Oberholtzer said so, it is accurate, because he is one of the ablest men in the field. Senator SPARKMAN. The statement, if I may say so, was just used as a typical class of 30 students, and in it 3 out of 30, or 1 out of every 10 of our school children in the United States were destined to spend at least a part of their lives sometime in a mental hospital. Mr. RICH. When is our time coming? Senator SPARKMAN. Maybe we should have been there already and we passed it over. Secretary TOBIN. I have the statement. Senator SPARKMAN. Is that the statement that Mr. Thurston gave? Secretary TOBIN. Yes. [Reading:] It is estimated that 3,000,000 of the 30,000,000 children now in school suffer from serious emotional and behavior problems. Senator SPARKMAN. Read the sentence above that. As to preservation, we have hardly scratched the surface. Basic research in child development is a major gap. Nobody really knows how many millions of children are mentally or emotionally maladjusted but estimates by some authorities are appalling. Perhaps three children in every average classroom of 30 pupils are destined to spend part of their lives in a mental hospital. Senator SPARKMAN. That is the statement. Mr. HUBER. I think the alarming thing on that, Mr. Chairman, I assume those are in many of the States where they have facilities for institutional care. And there are probably many more that never come to the attention of any institution-many of those that are perpetrating the wave of sex crimes going on in this country today. I was thinking also about the low-income group here in social security. Can we not assume all indigents, either those who will not work or cannot work, have at least to some extent social security, and we are not going to let them starve? And they are going to be looked after and also have socialized medicine, or a national health plan, or some protection at least; that they are going to be hospitalized eventually? Secretary TOBIN. I have been a mayor and a governor, and I am somewhat familiar with some of these problems, but that would be a better question to be answered by someone from the Federal Security. I know in my own State that the statement you have made about their being cared for would be true. I am not sure that would be true in all States. Senator SPARKMAN. Mr. Secretary, I have one more question, and we will quit. Going back again to pensions, you said that in 1935 the Congress passed the original social-security law, and at that time they took a pretty bold step. Secretary TOBIN. Yes. Senator SPARKMAN. And that now if we would be equally bold, we would go beyond what the House proposes? Secretary TOBIN. Yes. Senator SPARKMAN. Let me ask you three things: What is the average pension under the present social-security law? What would |