sissippi law and arguing for more restrictive provisions. This memorandum pointed out:

Neighboring States have, instead of Mississippi's $30 maximum, the following maximum benefits: Louisiana and Georgia, $25; Alabama, Tennessee, and Arkansas, $22; and Texas, $20.

It is customary for employers, in fighting better benefits, to make similar comparisons of provisions in other States.

We would have more success in the State legislatures if they were truly representative of industrial areas. But a great many do not give equal voice to the large population now concentrated in cities. The people who need unemployment insurance are completely outvoted by representatives from rural areas who follow the wishes of the organized employers.

Unless Congress acts, therefore, benefits will continue utterly inadequate.

The improvements in financing incorporated in the Forand bill are valuable in themselves and will help bring about more humane benefits. The bill would make Federal grants available to a State like Rhode Island so that she could pay more adequate benefits without raising her tax rates still further. Such a provision would be far better than the other Reed bill, H. R. 5173, which the House passed last year, before the recession began.

A memorandum from the Interstate Conference of Employment Security Agencies, supporting that Reed bill, clearly revealed the desire of the State administrators to hold down benefits in Rhode Island. That memorandum was introduced in full in the record of the Senate Finance Committee. In dicussing the provision of the Reed bill for repayment of the loan through raising the Federal tax, the interstate conference memorandum states:

Belt tightening by both-labor and management-would be essential to simply getting out of trouble. If, in addition, a loan had to be repaid when the system was again solvent, further and protracted belt tightening would be required. As long as the loan didn't have to be repaid and more could be had without definite repayment strings, why cut benefit rates and raise contribution rates, etc. In this sense the loan without definite repayment proviso would be worse than a grant.

Rhode Island is not the only State in which harsh provisions for repayment of loans will tend to hold down benefits. The heavier the unemployment in the months and years ahead, the greater the number of States that will find that the reserves they have accumulated will be too small for making adequate unemployment insurance payments.

The Forand bill would give Rhode Island aid without forcing her taxes higher; H. R. 5173 has the unfortunate effect of forcing up rates, putting pressure on benefits, and thus accentuating unemployment in the States.

The Forand bill has other improvements in regard to financing. Thus it would provide a $25 million contingency fund for meeting unforeseen increases in administrative costs.

Even more important, it would change the Federal standard in regard to State-tax arrangements by permitting States to provide for uniform rate reductions to all employers. The present Federal clause permits States to reduce taxes below the 2.7 percent rate only on the

basis of individual experience. This has led to most disastrous forms of rate reduction, lowering employers' taxes not because they have actually stabilized employment, but because they have successfully kept former employees from receiving benefits.

Passage of the Forand bill would thus bring many improvements in unemployment insurance. We would, however, like to see this bill go even further.

For example, we believe it would be desirable to introduce another standard in connection with the ceiling that States place on individual benefits. If a State's average weekly wage is lower than the national average weekly wage, then we believe that the ceiling on benefits in that State should be two-thirds of the national average rather than the State average. Our unions have been successful in collective bargaining in wiping out many regional wage differentials. We think

it would be better to avoid too great variations in ceilings among States, especially where the State average is reduced by a heavy proportion of low-paid industries as compared to high-paid occupa

tions.

Another change which we should prefer would be to require that the individual's primary benefits should be not less than 65 percent of his weekly wages, with additional amounts for dependents.

But rather than dwell on these further improvements, let me urge in the strongest terms that you set Federal minimum standards for benefits, for duration, and for disqualifications, and that you adopt the other provisions in the Forand bill.

If Congress instead enacts the two Reed bills, H. R. 5173 and H. R. 8857, the net effect will not be progress but severe damage to the protection now afforded our members. Combined with the inadequate appropriations so far made available for the Federal and State agencies, such action will present a black picture as unemployment grows.

In closing, I request that my supplementary statement, with attachments, be incorporated in the record as part of my testimony. Mr. KEAN. Mr. Carey, is this the supplementary statement that I have in my hand?

Mr. CAREY. We have some additional material that we would like to have included in the record.

Mr. KEAN. It is not too voluminous, is it?

Mr. CAREY. It is not voluminous.

Mr. KEAN. All right, without objection, it is so ordered. (The data referred to follows:)

1 Where 2 figures are shown, the smallest does not include dependents' allowances.