THE U.C.C. QUARTERLY
VOLUME 3, NO. 1 WINTER, 1945
Logging Operations
EMORY • inV LIBRARY
PUBLISHED BY
UNEMPLOYMENT COMPENSATION COMMISSION OF NORTH CAROLINA
PAGE 2 THE U. C. C. QUARTERLY Winter, 1945
The U. C. C. Quarterly
Volume 3; Number 1 Winter, 1945
Issued four times a year at Raleigh, N. C, by the
UNEMPLOYMENT COMPENSATION COMMISSION OF
NORTH CAROLINA
Commissioners: Judge C. E. Cowan, Morganton; C. A. Fink,
Spencer; R. Dave Hall, Belmont; R. Grady Rankin, Char-lotte;
Dr. Harry D. Wolf, Chapel Hill.
State Advisory Council: Capus Waynick, High Point, Chair-man;
Willard Dowell, Raleigh; Marion W. Heiss, Greens-boro;
H. L. Kiser, Charlotte; Dr. Thurman D. Kitchin, Wake
. Forest; Robert F. Phillips, Asheville; Mrs. R. J. Reynolds,,
Winston-Salem; Mrs. Bmil Rosenthal, Goldsboro; W. Cedric
Stallings, Charlotte.
A. L. FLETCHER Chairman
WILLIAM R. CURTIS Director
MRS. FRANCES T. HILL Editor
Regular Contributions in each issue from the
UNITED STATES EMPLOYMENT SERVICE FOR
NORTH CAROLINA
Agency of the War Manpower Commission
Cover illustrations represent typical North Carolina
industries under the unemployment compensation
program.
Cover for Winter 19^5—Logging Operations. Illustration from
the N. C. Department of Conservation and Development.
Logging and sawmilling comprise one of the most important
basic industries in North Carolina. As an industry feature,
this issue of the Quarterly presents a forward-looking arti-cle
on timber resources and cutting practices by C. F. Kor-stian,
Dean of the Duke University School of Forestry and
President of the North Carolina Forestry Association.
Sent free and upon request to responsible individuals, agencies,
organizations and libraries. Address: U. C. C. Informational
Service, Raleigh, N. C.
CONTENTS
Page
Mrs. Bost Becomes Commissioner 2
Unemployment Compensation—1944 Review,
By A. L. Fletcher. 4
U. C. Legislative Recommendations
Recent Plant Awards 8
Merit System Administration and Operation,
By Frank T. DeVyver 10
Cigarette Paper Plant Made Industry Indpend-ent,
By Bill Sharpe 13
Timber Cropping Destined to Replace Mining
of North Carolina's Forests, By C. F.
Korstian 14
Workmen's Compensation in North Carolina,
By T. A. Wilson__ 17
Post War Unemployment, By Silas Campbell 22
U. C. C. Operations 26
1945 Tax Savings to Employers of Four and One-half
Million Dollars
Compensable and Non-compensable Claims
U.C.C. Cuts Out Red-tape Reporting for Employers
Over 3,000,000 Separate Forms to be Eliminated
The Course of Unemployment
Research and Statistics Bulletins
Manpower Priorities Referral Plan in Opera-tion
in State 29
MRS. W. T. BOST BECOMES
U. C. COMMISSIONER
Mrs. W. T. Bost of Raleigh is our most recently
appointed member of the Unemployment Compen-sation
Commission of North Carolina. She was
chosen by Governor Broughton to fill the vacancy
created by the resignation of Mrs. Frank L. Fuller
of Durham, and took the oath of office at the Com-mission's
early fall meeting.
Mrs. Bost is well known throughout the state in
her former capacity of Commissioner of Public
Welfare—a post which she held for 14 years. During
this period, she became identified with the movement
to establish a system of unemployment insurance in
North Carolina, serving in 1934 as a member of the
legislative commission which undertook an intensive
study, prepared a report, and drafted a bill looking
to an unemployment compensation law for this state.
Thus the newest U. C. C. commissioner had a hand
in framing the program which, with some modifi-cation,
was eventually enacted into law and forms
the basis of the present administration.
Among Mrs. Bost's other distinctions is that of
being a charter member of the American Public
Welfare Association, as well as a member of its board
of directors. She was one of the few women heading
state welfare administration in the nation. For
years she has been a member of both the State Con-ference
for Social Service and the National Con-ference
of Social Work, serving in 1937-1938 as
president of the state organization. From 1934 on
she served as chairman of the Eugenics Board of
North Carolina, and has been a member of the State
Commission for the Blind, the State Board of Cor-rection
and of Training, the State Recreation Com-mittee,
and the State Council of Defense.
The Women's College of the University of North
Carolina, where Mrs. Bost was graduated in 1903,
awarded her an honorary Doctor of Laws degree in
1942. In 1941-1942, Mrs. Bost served as vice-chair-man
of the National Council of State Public Assis-tance
and Welfare Administrators. She is a past
president of the Raleigh Woman's Club and served
for three years before her appointment as welfare
commissioner as executive secretary of the State
Federation of Women's Clubs.
The picture which was taken at the time of ad-ministering
the oath of office to Mrs. Bost in the
EDITOR'S NOTE
This issue of the Quarterly is the first number of
Volume 3. In consideration of paper shortages and
printing loads the fourth number of Volume 2 has
been omitted. An index to Volumes 1 and 2 is in
preparation and will appear as a supplement to the
next issue.
Winter, 1945 THE U. C. C. QUARTERLY PAGE 3
Photo by Lewis P. Watson.
Governor's office in ther Capitol includes, from left to
right
:
J. Melville Broughton, former Governor of North
Carolina, 1940-1944.
William R. Curtis, Director of the U. C. Division and
Secretary of the Commission. Mr. Curtis has been
with the U. C. C. since its first year of operation.
He organized and directed the Bureau of Research
and Statistics until he was named U. C. Division
Director in August of 1941. He holds the degrees
of A. B. and M. A. from the University of North
Carolina and a Ph. D. in economics from the
University of Illinois. Acting Commission Chair-man,
May-December 1942 and May 1943 to June
1944.
E. B. Denny, Associate Justice of the Supreme Court
of North Carolina.
Charles A. Fink of Spencer, Commissioner. Mr.
Fink has been President of the State Federation of
Labor since August 1937, former President of the
Salisbury-Spencer Central Labor Union, and mem-ber
of the Commission's State Advisory Council
for two years before his appointment as Commis-sioner.
Judge C. E. Cowan of Morganton, Commissioner.
Judge Cowan is a lawyer and former Judge of the
Burke County Court. He is active in Bar Asso-ciation
circles in the state, and has been attorney
from its organization of the Burke-McDowell
Electric Membership Corporation. Judge Cowan
took both his undergraduate and law degrees at
the University of North Carolina.
Ralph M. Moody, Chief Counsel for the Commission
at the time this picture was taken before his resig-nation
to accept the post of Assistant Attorney
General.
Col. A. L. Fletcher, Commission Chairman, appointed
in July 1941 when he was called here after serving
at Selective Service Headquarters in Washington.
Col. Fletcher was formerly Assistant Administra-tor
of the Wage & Hour Division of the United
States Department of Labor; he served as State
Commissioner of Labor for seven years. Absent
on leave for military duty in Washington from
May 1942 to July 1944.
Mrs. W. T. Bost, Commissioner.
R. Dave Hall of Belmont, Commissioner. Mr. Hall is
President of the Southern Combed Yarn Spinners
PAGE 4 THE U. C. C. QUARTERLY WINTER, 1945
Association ; Secretary and Assistant Treasurer of
the Stowe Thread Company ; Sales Manager of the
Climax Spinning Company, the Sterling Spinning
Company, and the Majestic Manufacturing Com-pany.
He is a graduate of Davidson College and
past Department Commander of the American
Legion in North Carolina.
R. Grady Rankin of Charlotte and Gastonia, Com-missioner.
Mr. Rankin is an official of the Duke
Power Company. He was formerly President of
Ridge Mills, Inc., Secretary and Treasurer of
Hanover Mills, Inc., Member of the Board of Gas-ton
County Commissioners, and State Senator
from Gaston County. He is also serving on the
War Manpower Commission's State Management
Labor Committee.
Dr. Harry D. Wolf of Chapel Hill, Commissioner.
Mr. Wolf is Professor of Economics at the Uni-versity
of North Carolina. He was Executive
Secretary of the North Carolina Commission on
Unemployment, 1934-1935, provided by the General
Assembly to make a special report; W. P. A.
regional advisor on labor relations, 1936; and a
member of the industry committee under the Fair
Labor Standards Act. He is editor of the Southern
Economic Journal and author of The Railroad
Labor Board and various articles on labor condi-tions.
He received his graduate degrees from the
University of Chicago.
Unemployment Compensation—1944 Review
By A. L. Fletcher, Chairman Unemployment Compensation Commission of North Carolina
During this past year of 1944, in the midst of
which I returned from active military service to
reassume my duties as Chairman of the Unemploy-ment
Compensation Commission, a number of de-velopments
have taken place of utmost importance
to our employment security program.
Intense war production on the part of industry has
continued. Although employment has slackened and
shifted slightly in some quarters, on the whole we
have seen increased business and increased payrolls
throughout the state, as in 1943, with a correspond-ing
decrease in unemployment. The levels of each
have reached a maximum and a minimum never
before recorded in North Carolina.
The Commission has had a constantly dwindling
claim load on the one hand, and a constantly growing
number of worker wage accounts and a growing re-serve
fund balance on the other. It is expected that
these trends will continue into 1945, or until the first
big cutbacks are made. During the last few months
our load of claims from unemployed workers has
been close to the vanishing point. We have been
paying checks each week to less than 500 workers
on the average. The number of insured workers
currently employed is around 585,000. The number
of established wage credits against which benefit
payments might be charged is close to a million
;
while the funds available for unemployment benefit
payments is now over $90,000,000.
Except for the decrease in the claim load, the Com-mission's
assigned responsibilities have increased.
Yet it has been carrying on operations with a greatly
reduced personnel force and an administrative bud-get
periodically cut and restricted by the Social
Security Board which allots federal funds for this
purpose.
SPECIAL MENTION
There are some aspects of our activities which I
believe deserve special mention. While Mr. Ralph
Moody was still with us as Chief Counsel, a number
of cases came up for decision by the Commission in
which claimants protested our having denied them
benefit payments because their unemployment stem-med
from a labor dispute in which they were in-volved.
In all these cases, the Commission sustained
the earlier determinations, finding after a thorough
review that although the claimants had not them-selves
participated in the labor disputes, they be-longed
to a grade or class of workers who had so
participated.
Through North Carolina's adoption of the inter-state
plans for the reciprocal coverage of employers
and for combining the wage credits of workers, a
more equitable system of interstate collections from
employers and of benefit payments to workers has
been made possible.
Under our plan of employer experience rating,
during the past year 3,536 employers have been mak-ing
tax payments to the Commission at reduced
rates. Many more will be entitled to tax reductions
on their 1945 payrolls. Most employer reserve ac-counts
are in a fairly strong position now, with
relatively few charges against them for unemploy-ment
over the past three years. Our computation
for 1945 tax rates which has just been completed
indicates that some 5,022 employers will now be en-abled
to save substantial portions of their unemploy-ment
tax.
Furthermore, our employers in 1945 will have a
greatly lightened responsibility as to wage reporting,
because during the last few months, the Commission
has been able to obtain new equipment and set in
operation machines which make it possible for us to
process individual wage reports submitted on a list
form. Thus, employer reports to the Commission for
1945 can be merely a carbon copy of the list report
required by the Federal Government, eliminating the
necessity of filing with us separate wage slip reports
for each individual worker. Accordingly, more than
three million separate clerical operations annually,
will be spared employers in the future.
LOOKING AHEAD
As an unemployment compensation agency, the
war activities of the Commission have been largely
Winter, 1945 THE U. C. C. QUARTERLY PAGE 5
a hold-the-fort program, standing ready to serve a
future need, accumulating reserves and preparing
for their use as a cushion for post-war economic re-adjustments.
With the skeleton force the Commis-sion
has retained, training programs have been
instituted designed to prepare this nucleus of per-sonnel
as a corps around which an expanded staff
must be built to handle additional claim loads.
The present system of unemployment compensa-tion
grew out of the urgent need for a program of
this kind which was demonstrated during the catas-trophic
years of this country's so-called "big de-pression."
In facing post-war problems, there is now
a well-organized program of unemployment in-surance,
with large reserves at its command, which
was wholly lacking before. It is recognized that the
adequacy of this program probably faces a major
test in the months and years that lie ahead.
On the question of adequacy, the Commission has
made several studies on various aspects of its pro-gram:
fund solvency under likely postwar situa-tions,
operation of the benefit formula and the ratio
of exhaustions to maximum duration, the adequacy
of present coverage provisions, and the inadequacy
of certain restrictive requirements, etc. The results
of these studies are contained in bulletins prepared
by our Bureau of Research and Statistics under the
direction of Silas F. Campbell, and comprise much of
the substantive material on which the Commission
bases its recommendations for revisions of the law.
ADDITIONAL RESPONSIBILITIES
In addition to claims from workers already covered
by the unemployment compensation law, the Com-mission,
because of its experience and facilities, was
designated by the Veterans Administration to handle
in this state the readjustment allowance provisions
of the "G. I. Bill." Claims from veterans for re-adjustment
allowances became payable for the week
beginning September 4th, 1944. These are taken,
processed and paid by our Commission, with reim-bursement
from the Veterans Administration.
Eligibility requirements for veterans closely
parallel those of the state law, but they are given a
uniform $20 weekly payment and a maximum
duration of 52 weeks—the actual duration being
determined by the length of the veterans' active
military service. The potential number of claimants
would include all North Carolina men and women in
service, which has been estimated at around
325,000.
Since September, the number of claims received
from veterans has steadily increased, until during
December we have been writing more checks for
unemployed veterans than we have for unemployed
workers. The amounts paid to veterans are, of
course, much larger than those paid to workers under
our present state law where benefits are determined
by the amount of previous earnings with a $15 a
week maximum. The total amount paid in readjust-ment
allowances to veterans in this state in 1944
came to $108,371.00.
Additional federal legislation has been proposed
which might also bring within the jurisdiction of the
Commission the payment, on a reimbursable basis,
of unemployment benefits for federal employees who
have been working in this state. Also, a revision of
the Federal Unemployment Tax Act has been advo-cated
to remove the present exclusion of maritime
workers and to extend the payroll tax, which now
applies only to employers of eight or more workers,
to employers of one or more. These changes would
bring additional administrative work to our state
agency. The experience of other states where un-employment
compensation laws now cover employers
of one or more indicates that the Commission, if
coverage were thus extended in North Carolina by
either federal or state action, would be handling
wage accounts for 15 percent more workers, and con-tribution
accounts for more than three times as
many employers.
RE-EMPLOYMENT PROGRAM
In view of these developments and prospects of
handling benefit claims for larger numbers of persons
who may become unemployed, it becomes increas-ingly
urgent that the Commission regain control of
the Employment Service which has been on loan to
the Federal Government since the beginning of 1942.
Both veteran and worker claims are filed through
local employment offices where the applicants must
be registered for work. If the speedy re-employment
of benefit recipients is accepted as a prime con-sideration
of the unemployment compensation pro-gram,
then the Commission must have an employ-ment
service under its direction.
INTERSTATE ORGANIZATION
Our Commission is a member organization of the
Interstate Conference of Employment Security
Agencies which studies problems affecting the states
as a whole. North Carolina has participated in the
meetings and the work of this Conference, chiefly
through the representation of William R. Curtis, our
director and acting chairman during my absence.
Mr. Curtis was elected a Conference Vice President
for Region IV which includes Maryland, Virginia,
West Virginia, the District of Columbia and North
Carolina. The primary objective of the Interstate
Conference has been to improve the administration
of the employment security program, and at the
same time, preserve and advance our state systems.
When unemployment compensation came up for
discussion last spring and summer by the national
Congress, state administrators presented testimony
before the Senate and House committees. Repre-sentatives
of the Interstate Conference demon-strated
that the adequacy of state funds to meet
present liabilities was pretty well assured with re-serves
of nearly 5*4 billions of dollars at that time.
For example, North Carolina's state fund on June
30th stood at $81,097,140.29. The funds are regu-larly
increased each quarter by additional employer
contributions. Added to these is United States
Treasury interest, amounting in our own state to
approximately $360,000 each quarter. The states
could with their 1944 reserves, pay their highest
average benefits to over 18,000,000 workers for their
PAGE 6 THE U. C. C. QUARTERLY Winter, 1945
maximum duration. The North Carolina fund could
pay 91 percent of the covered workers currently em-ployed
a weekly benefit amount of $11.00 for 16
weeks.
As to benefits, the average amounts paid increase
in proportion as wages earned have increased, up to
the allowable maximum. It may be expected that,
even with present benefit schedules, average pay-ments
in the postwar period will be substantially
higher than those paid in the past, because they will
be based on war-time earnings. In June, the average
weekly benefit amount for the country as a whole
had risen to $15, and in 1945 it will probably be
higher under present laws. The states started out
with a $15 a week maximum payment; but many
have raised that maximum on their own initiative.
In a number of states the maximum is now $20 ; one
has $22.
Under state laws, the maximum duration of bene-fits
varies from 14 to 24 weeks. The longer periods
represent the progress the individual states have
made over durations specified in their original laws.
Moreover, many states have substituted a flat dura-tion
for variable durations. North Carolina took the
lead in this respect, and now 17 other states have
adopted flat durations.
As to workers in small business—that is for em-ployers
of fewer than eight workers—the postwar
layoff problem is a small one, but their protection is
being further considered. Twenty-seven states have
already amended their laws to cover employers of
fewer than eight workers; thirteen go all the way
and cover employers of one or more.
INSURANCE FOR SICKNESS
UNEMPLOYMENT
Kecognition has also been given by the Conference
to the serious gap which exists in the employment
security program in the general lack of any form of
insurance for workers against the risk of unemploy-ment
and loss of pay at such times as they are too
sick to work. A worker who suffers industrial acci-dent
or injury may recover wage loss under work-men's
compensation acts. An insured worker who
loses his job may apply for unemployment compen-sation—
but only if he is well, able to work, and
seeking work.
The worker who is temporarily unable to work and
earn his living needs some cash income for himself
and his family during such periods of enforced idle-ness
just as much if not more than does the worker
who is without a job for economic reasons. The risk
of wage income loss that workers face through sick-ness
is equally insurable with unemployment. One
state, Rhode Island, has had such an affiliated in-surance
program, financed by the workers them-selves,
in operation for nearly two years. Many other
states have considered and are reconsidering similar
legislation.
NATIONAL DIRECTION
The alternate proposals for federal legislation with
regard to unemployment compensation which have
been made in recent months appear to spring from
differing social philosophies: (1) that government
should provide for the people, and that provisions
should be bounteous and uniform without regard to
varying circumstances ; (2) that the people have a
responsibility to take care of themselves, with a
minimum of governmental direction and guidance;
and that localized as much as possible. We believe
that unemployment compensation is best conceived
as an insurance program of local groups by local
groups—a system that is consistent with the Ameri-can
idea of individual and local community responsi-bility,
as opposed to a nationalized program con-templating
hand-outs and controls that, carried to
logical extremes, could impoverish the country, both
economically and morally.
In thus far refusing to enact measures for nation-alized,
or nationally extended unemployment com-pensation,
Congress has left in the hands of state
governments that responsibility for strengthening
their own employment security programs, which
state governors and administrators have claimed and
asked permission to discharge. These have been
strongly urged, however, to broaden their programs,
especially where these are close to minimum stand-ards,
as in North Carolina.
RECOMMENDATIONS FOR
NORTH CAROLINA
At regular sessions throughout the year, our Com-missioners
have studied many technical reports and
have considered methods by which the unemploy-ment
compensation program in this state could be
broadened and its services extended. The U. C.
Commissioners include Mrs. W. T. Bost, recently ap-pointed,
Judge C. E. Cowan of Morganton, Charles
A. Fink of Spencer, R. Dave Hall of Belmont, R.
Grady Rankin of Charlotte, Prof. Harry D. Wolf of
Chapel Hill, and myself as Chairman. At our
November meeting we unanimously agreed on our
recommendations for legislative revisions in the
North Carolina law.
U. C. C. LEGISLATIVE RECOMMENDATIONS
The chief recommendations for revisions in the
present unemployment compensation law which the
Commission believes should be made by the General
Assembly were agreed upon and approved unani-mously
by the several Commissioners at their regu-lar
bi-monthly meetings held in Raleigh. Meeting
with the Chairman, Col. Fletcher, were Commission-ers
Mrs. W. T. Bost, Charles A. Fink, R. Dave Hall,
R. Grady Rankin, and Prof. Harry D. Wolf, and W.
R. Curtis, Secretary.
The Commission's recommendations and the
reasons for their adoption are as follows:
(1) Veterans. With regard to paying benefits
from the state unemployment fund to veterans,
technicalities in the law which now operate to ex-clude
many veterans from receiving compensation
should they become unemployed or continue without
work after exhausting their rights to federal read-
WINTER, 1945 THE U. C. C. QUARTERLY PAGE 7
justment allowances under the "G. I. Bill" ought to
be modified. The Commission considers that all
veterans should be enabled to share equally in the
insurance protection afforded by the state unemploy-ment
compensation program. The thought was ex-pressed
in the meeting that regardless of provisions
made by the Federal Government for unemployed
veterans, the state also has an obligation of its own
to those whose employment was interrupted by
service—to make the benefit rights established by
them before going to war available to them on their
return, should occasion arise, after using up G. I.
allowances.
(2) Coverage. The Commission agrees that pro-tection
of unemployment compensation coverage
should be extended to workers now excluded because
their employers do not have as many as eight
workers. That means that the law should include
employers of one or more workers, as well as those of
eight or more as at present, so as to afford unemploy-ment
insurance to employees of small businesses.
This proposal of the Commission is in line with
recommendations of such organizations as the Coun-cil
of State Governments, the National Planning
Association, the Interstate Conference of Employ-ment
Security Agencies, and the United States
Chamber of Commerce, as well as both Senate and
House Committees of the National Congress which
have urged that the states act on this coverage
matter.
Besides giving unemployment protection to an
estimated additional 80,000 workers, such a revision
of the N. C. law respecting coverage would remove
the tax inequity now existing between a business
operated with eight and one with seven employees.
It would relieve the Commission of many employer
liability problems. And it should not unduly burden
small business with extra reports, since the Commis-sion
is instituting a system of list reporting with
1945 whereby employers need send to the state
agency only a carbon copy of the social security
report they are required to make to the Federal
Government for old age and survivors' insurance.
North Carolina is now one of a minority among
the states in still retaining the minimum unemploy-ment
compensation coverage of employers of eight
or more workers. The Commission studied the ex-perience
of other states which have the full coverage
of one or more and which shows that : (a) adminis-trative
difficulties are overshadowed by administra-tive
advantages ; (b) on the whole, contributions
from employers of fewer than eight more than meet
the benefit liability of their workers; (c) a higher
proportion of small employers are likely to become
eligible for reduced tax rates under employer ex-perience
rating plans; (d) no evidence appears of
any unwholesome economic effect on small firms be-cause
of the unemployment tax. Rather, it has
proven to be especially beneficial to them in removing
any charge of discrimination among employers, in
enabling small employers to obtain a better class of
workers, and, as unemployment compensation oper-ates
to maintain consumer purchasing power, it has
a greater practical value to the smaller employers.
(3) Benefits. The Commission proposes the sub-stitution
of a new benefit formula for the one now
in the law under which North Carolina's unemploy-ment
benefit payments have averaged the lowest of
any state in the country. This new formula is de-signed
to bring payments in this state more nearly
in line with those being paid to unemployed workers
elsewhere, particularly in view of higher living costs.
It is based on a detailed study made by the Commis-sion
and was constructed with regard to several fac-tors.
Among these was the desire to produce an av-erage
weekly payment for total unemployment bear-ing
approximately the same relationship to such
national average weekly payments as the North
Carolina wage level bears to the national wage level
;
the intention to retain $130 as minimum qualifying
wages and weight the schedule in proportion to earn-ings
in favor of the lower-paid workers who, it is
assumed, are more irregularly employed ; and the
purpose of safeguarding the solvency of the fund.
North Carolina's present maximum weekly pay-ment
allowable is $15 for a maximum duration of 16
weeks. In other states which have already liberaliz-ed
their benefit formulas, maximum weekly pay-ments
range up to $22, and 29 states have maximums
in excess of North Carolina's $15. Readjustment al-lowances
for veterans under the G. I. Bill are a uni-form
weekly payment of $20. Under the Workmen's
Compensation Act in this state, the maximum
weekly payment is $21.00.
The Commission believes that the present rate of
North Carolina's unemployment compensation bene-fits
is too little and continues for too short a time
to provide workers adequate insurance protection
against wage loss due to unemployment. Likewise,
if the fund is to serve the State as a check against
a deflationary drop in purchasing power, it must
be utilized more fully.
The Commission's study of alternate benefit form-ulas
shows that, even with severe and widespread
post-war unemployment in North Carolina, the un-employment
compensation fund could finance bene-fits
at the proposed new rates and still have a fairly
adequate balance to meet all potential liabilities. The
proposed new benefit formula carries a minimum
weekly payment of $4.00, a maximum weekly pay-ment
of $20.00, and allows for a maximum duration
of 20 weeks.
Under this new plan, about half of North Carolina
payments will be between $10 and $15; whereas in
the past over 80 per cent of all weekly benefits paid
have been less than $10 in amount.
(4) Disqualifications. The Commission also
recommends that the clause in the present law dis-qualifies
an unemployed worker from receiving bene-fits
if that worker voluntarily quit a previous job
without good cause "attributable to the employer"
be amended by striking out the last phrase. This
restrictive provision in some state laws has resulted
PAGE 8 THE U. C. C QUARTERLY WINTER, 1945
in severe criticism of state systems of unemployment
compensation as being virtually a denial of the pur-pose
of the program.
The Commission feels strongly that as an adminis-trative
agency it should have discretion in determin-ing
good cause with respect to voluntary quits and
not be barred from paying benefits to otherwise
deserving claimants—such as a worker who cannot
find a new job after having had to leave the last one
to nurse a sick child, or care for a relative who was
dangerously ill at the time.
In many cases the Commission has to inflict a
penalty on unemployed workers, by denying them
benefits, where it is found that they had good cause
for leaving their last employment, although it was in
no way "attributable to the employer."
(5) Sickness Compensation. The Commission
further agreed to again recommend that the General
Assembly undertake a study looking to the establish-ment
in this state of an insurance program designed
to compensate workers for wage loss during periods
of unemployment when they are physically unable to
work.
The present unemployment compensation program
issues payments based on past earnings in covered
employment to a worker, by way of stand-by income,
if he is out of work because there is no work for him.
But the worker who has to be out of work tempo-rarily
because of illness or other disability is barred
from receiving unemployment benefits. This is
recognized by the Commission as a serious gap in
its insurance system.
In another state, a plan providing workers with
cash compensation for unemployment due to sick-ness
is already in operation by its unemployment
compensation board; while many other states, and
the Federal Government as well, have considered and
are considering similar plans. These generally con-template
a separate cash sickness compensation fund
built up from taxes withheld from workers' wages
by their employers, to be administered by the unem-ployment
compensation agency which already has
the records, machinery and other facilities required.
Benefit payments to covered workers when they are
unemployed because of sickness or disability then
parallel unemployment compensation practice.
The Unemployment Compensation Commission of
North Carolina believes that consideration by the
General Assembly of a plan to indemnify workers
for wage-loss incurred through illness is more than
timely, in view of the attention it is receiving
throughout the country, and especially in view of the
recent recommendation of our State Hospital and
Medical Care Commission for more insurance. It is
impossible for the poorer half of the population to
pay the cost of sickness without insurance. The cash
sickness compensation program for unemployed
workers carries the approval of welfare groups in
the state, and has the support of the State Federa-tion
of Labor.
RECENT PLANT AWARDS
The most recent awards of the coveted Army-
Navy "E" to plants in this state have been bestowed
upon two steel companies. The first of these to re-ceive
the flag of merit was the Peden Steel Company
at ceremonies held in Raleigh on October 25, 1944.
The Dave Steel Company, Inc. of Asheville received
the award early in December. The addition of these
two plants to North Carolina's honor roll of firms
which have won war production awards, brings the
total to an even two dozen.
In 1906 the Navy instituted in the Fleet an award
for excellence which has been known ever since as
the Navy "E". First awarded for excellence in gun-nery,
this was later extended to include outstanding
performance in engineering and communications. An
honor not easily won nor lightly bestowed, it became
and has remained a matter of deep pride to the men
of the Service who receive it.
When the rising tide of war in Europe placed a
premium on the production of war equipment, the
Navy "E" award was extended to embrace those
plants and organizations which showed excellence in
producing ships, weapons, and equipment for the
Navy. Then came Pearl Harbor—and with it a de-mand
for war production such as the world has never
known, an awareness that our fighting forces and
the men and women of American industry are part-ners
in the great struggle for human freedom, and on
the part of all Americans a grim and enduring re-solve
to work and fight together until victory in that
struggle is final and complete.
From that high resolve was born the Army-Navy
Production Award—which stands today as our fight-ing
forces' joint recognition of exceptional per-formance
on the production front, of the determined,
persevering, unbeatable American spirit which can
be satisfied only by achieving today what yesterday
seemed impossible.
The Army-Navy "E" which the Peden Steel Com-pany
and its employees received was the first award
to an industry of this kind in the state. In 1943, a
prime contract was given them by the Federal
Government to construct landing barges of a type re-
Winter, 1945 THE U. C. C. QUARTERLY PAGE 9
quired for amphibious operation. The all-steel
barges when assembled are 104 feet in length. Three
railroad cars are required to transport the various
parts to embarkation ports for shipment overseas.
The barges are assembled at foreign ports or beaches
from which our forces take off for landing operations
on enemy soil. The contract required the Peden
Steel Company to construct and ship the barges in
accordance with a fixed schedule. Not only has the
schedule been maintained, but in most instances ad-vance
deliveries have been made.
In commenting upon the accomplishment which
earned the award of excellency for the company, Mr.
James M. Peden said, "There was never a doubt in
my mind as to whether or not we would be able to
meet every requirement. We had the plant facilities
and a corps of experienced and loyal craftsmen
—
that's all it takes to do a job in time of war or peace."
The Peden Steel Company and its predecessors
have the unique record of having served five wars
during the 118 years of the plant's existence. Dur-ing
each war munitions or other items of supplies
have been shipped direct to fronts where the enemy
was engaged.
The Dave Steel Company, Inc., was the first
Asheville firm to win the Army-Navy "E". Since
the company was organized in 1929 with two em-ployees,
it has expanded until now its activities ex-tend
from the Gulf of Mexico to the Great Lakes.
Earlier in the war, the firm fabricated steel for war
plants, later it manufactured parts for cargo vessels
and sub-assemblies for destroyer escort vessels, and
in 1944 it chiefly turned out large sections of LSM's
(Landing Ships Medium) for the Navy.
"We are not so large as plants go, "President Dave
said, in accepting the "E" on behalf of his firm and
employees. "Our entire plant is made up mostly of
Western North Carolina folks, from those who have
really earned this award—the boys right here
through the various departments in the plant. Every
one of us has had a hand in the production record.
We will wear the "E" pins as proudly as any service-man
wears a decoration, for they mean that we have
contributed our best." And Superintendent Center
in accepting the pins on behalf of the employees,
added, "Every man has worked—really worked—and
at new things with added speed and determination.
He was the man behind the man behind the gun
and he knew it. We'll not rest on our laurels and
keep the same old production records—we'll beat
anything we have done before."
The Asheville Branch of the American Optical
Company has received its third star to the parent
company's "E" for war production. A star is
awarded a firm winning the original award each six
months that production is maintained.
The National Munitions Corporation of Carrboro
has been awarded its third star following the Army-
Navy "E" award. This plant was also one of the
first in the state to receive the National Security
Award.
Photo by U. S. Army Signal Corps.
Scenes taken during award ceremonies at the Peden Steel Co. plant.
Above : Mr. James M. Peden addresses the gathering of officials and
employees.
The pictures immediately above and below illustrate the construction and
the type of landing barge produced by the Peden Steel Co. Four railroad
cars are required to transport each barge to the port of embarkation. They
are assembled at foreign ports or beachis.
PAGE 10 THE U. C. C. QUARTERLY Winter, 1945
Merit System Administration and Operation
By Frank T. de Vyver, Supervisor Merit Examinations
The Merit System in North Carolina first became
effective July 1938 when the present supervisor was
appointed Supervisor of Examinations for the Ad-visory
Committee on Personnel of the North Caro-lina
Unemployment Compensation Commission. In
the six and one-half years that have passed, the
agencies, the Merit System Supervisor, and Council
have learned a great deal about merit system ad-ministration.
We have learned that there are cer-tain
fundamental changes in thinking that must take
place if a merit system is to operate successfully.
We have also learned that even after this funda-mental
change in thinking has taken place there may
still remain certain areas of conflict between the
merit system and the agencies which it serves. It
is the purpose of this article to examine briefly both
these fundamental changes in thinking that accom-pany
a successful merit system and also to examine
some of the areas of conflict that arise in the ad-ministration
of a merit system.
APPOINTMENT BY EXAMINATION
In the first place must come the realization that for
better or worse, employees are to be chosen on the
basis of a public examination rather than on the
basis of the recommendation of some person of
political importance. Certainly not all political ap-pointments
are bad, nor are they necessarily good.
Where thousands of political appointments are made,
the law of averages would certainly result in many
good appointments. Nevertheless, when an agency
of government has accepted the principles of the
merit system, it is saying that however poorly an
examination system selects the best people, the
chances are 100 to one that it will select better people
on the average than could be selected by not using
an examination system. The examination system is
not perfect, but it is better than no system at all.
Briefly, then, if an agency is to accept the principles
of a merit system, it must put aside any thought
that a congressman or senator can select better than
it can, or that it can select a stenographer only by
her looks.
Recently this problem was brought to my atten-tion
by a letter received from one of North Carolina's
congressmen urging the appointment of a superin-tendent
of welfare in his home county. In this letter
the congressman advised that this young man had
all the qualities necessary to make a good superin-tendent
and he felt that his appointment should be
approved. As is customary when such letters are
received, the young man's qualifications were care-fully
examined and compared with the minimum
qualifications which must be met even before a per-son
is admitted to a written examination. A superin-tendent
of welfare in North Carolina must be a
college graduate and have completed some graduate
training in an accredited school of social work. He
must also have had some experience in social case
work. This young man whom the congressman
claimed had all of the qualifications for a superin-tendent
of welfare was a high school graduate with
about three years of clerical experience. The young
man may have belonged to the right political party
in a close county, but with all modesty, we were
better able to select a qualified person for that posi-tion
than this congressman was. Perhaps the
congressman was merely asking us to say "no"
rather than having to tell the young man himself.
PERSONNEL POLICIES
Another point which the administrators must
accept when they deal with a civil service system or
state merit system is that they will be restricted on
some of their internal policies such as promotions,
salary increases, transfers and dismissals. An ad-ministrator
of a governmental agency must remem-ber
that he is administering public funds for a public
purpose and that, therefore, he must expect to be
regulated in what the public at that time feels is to
the public's interest. Perhaps the administrator
longs to be as free as a man in industry in carrying
out the policies which he feels are wise, but the man
in industry is not free either. When he gets through
arguing with the trade union, he still has a board of
directors and eventually stockholders to please. The
state merit systems are established to represent the
public interest in giving each citizen equal rights for
jobs and security on those jobs with every other
citizen and to attempt to provide satisfactory work-ing
conditions.
In carrying out these policies, the Merit System
may have to say "no" to something the adminis-trator
feels is extremely important to him. In
North Carolina, for example, the rules require that
promotions must be made from the first three names
on a promotional register. The grade which the
person has received that places him on this promo-tional
register is a combination of the usual factors
in the grade plus the service rating factor. If a job
opens in one of the agencies we serve, we are asked
to send a promotional register and we expect the
agency to appoint from among the first three on that
register. (The agency may, of course, select from
the names on a competitive register.) In this way,
we feel that we are protecting the right of each
employee to be considered for promotion on the basis
of merit rather than on the basis of being the most
proficient "apple polisher." The "apple polishing"
may find a place in the system, of course, in that part
of the grade which comes from the service rating,
but our agencies cannot dip to the bottom of the
promotional register for whom they think is better
qualified. This is a very controversial matter and
it is one point on which we differ from the United
States Civil Service, but we feel we are right. If
selection of individuals for appointment is made on
the basis of merit, then promotions should be made
on the same basis. There is no more reason to
suspect that a senator's judgment is correct on the
Winter, 1945 THE U. C. C. QUARTERLY PAGE 1 1
selection for promotion than there is to suspect that
he is correct on the original appointment. He may
be or he may not be, but if we are going to have a
merit system in government, it must be carried
through and not confused with a merit system for
selection and some other system for promotion.
We have found that we have to control transfers.
We adopted this policy several years ago when we
found that one of our agencies appointed on an area
basis and immediately transferred to some other
area with the obvious intent of circumventing the
principle of selection on the basis of merit. The man
they wanted to appoint couldn't be reached on the
Asheville area register so they appointed him from
the Gastonia area register and had him up in Ashe-ville
the next Monday. The man who did that had
not accepted the principles of the Merit System, and,
therefore, found himself tied up with what he un-doubtedly
thought was more red tape.
With reference to dismissals, the Merit System
must see that each individual gets a fair and im-partial
hearing on any charges brought against him.
In some ways, the Merit System is taking the place
of a labor union in this. When a person is discharged
from an organized industry today, the union ex-amines
the circumstances and if it feels an injustice
has been done, raises the point with the manage-ment.
The Merit System in North Carolina merely
provides for a public hearing if the person discharged
so wishes. The agencies have the final say, but as
one administrator expressed it, if you discharge a
man now you are the one that is on trial, not he.
Because of this a person is not discharged unless the
agency is quite sure that the discharge is justified
or else is perfectly willing to accept any publicity
that arises from it.
ACCEPTANCE OF CONTROLS
These are several illustrations of the type of con-trol
that must be accepted when the very funda-mentals
of a merit system are accepted. A bachelor
is free to go and come as he pleases, to tell someone
where he is going or not to as he pleases, to spend
his money as he pleases, and to do pretty much as
he pleases. The married man finds that there are
certain restrictions imposed not necessarily by his
wife, but which are a part of the state of marriage.
The courteous thing to do is at least to tell your wife
that you are going out and that you expect to be back
at approximately a certain time unless you meet
somebody on the way. A married man also takes
on some financial obligations. It is much the same
when a merit system is added to a government
agency. There are very few married men, however,
who object to the new restrictions of marriage. If
they did, they would never have gotten married.
They believe that marriage is a proper state and that
it is not good for man to live alone. Therefore, the
restrictions are not obnoxious and are accepted
graciously. From the point of view of the public
interest, it is not good for any government agency
to live without some civil service system. When
that fact is recognized, the added restrictions will not
be obnoxious either. Of course, to many states this
marriage with the Merit System has been a shot-gun
wedding, for it was an act of Congress amending
the Social Security Law that made state merit
systems necessary where federal social security
funds were being administered. Perhaps, however,
love will grow.
Even after the Merit System has been accepted
by the agencies, there are likely to remain a number
of problems which the sociologists might call areas
of conflict. These areas of conflict are in reality
areas of administration in which the interest of the
agency and the best interest of the public as seen by
the Merit System may not coincide.
TECHNICAL PROBLEMS
Ona of these problems is that of speeding up the
procedure. Certainly all administrators have used
rather strong language at times, referring to the red
tape of the civil service system or the merit system
under which they operate. Perhaps there is an
opening for a claims taker in some area, and the
Merit System Council has no one on the rolls who is
willing to go there. Perhaps the agency has received
the names of three prospective candidates for the
job, and when these three prospects were approached
they were really not interested in taking the job.
Perhaps the agency has made a provisional appoint-ment
to some job and when the examination is given,
finds that the person who has the job failed the test
and must be replaced. All of this upsets the agency
because it has spent time and money training him.
Recently one of the agencies served by the Merit
System Council has grown critical about that par-ticular
matter and has urged us to give make-up
examinations to some of the provisional incumbents
who failed, on the theory that time and effort have
been spent training them and they should, there-fore,
be kept on the job. The agency was unim-pressed
when we have pointed out to them that
several hundred people who had received no training
were able to pass the examination.
If the agencies have worried over the red tape in-volved
in civil service, so have those who are ad-ministering
the system. Unless a merit system
supervisor is feeling too important and trying to im-press
the agencies with how much power the Merit
System does have, he worries just as much about the
possible slowness of the procedure as the agencies.
In many ways the supervisor can speed up the activi-ties
by getting names to the agencies the day after
the request is received, and by constantly checking
on registers to make sure that the people on them
are willing to take the jobs which are offered. After
this is done, however, there still remain a number
of problems which slow up the procedure.
It is not the purpose of this article to defend
merit system administration but rather to explain
it, for if the agencies did understand a few of these
difficulties of red tape, they would be somewhat more
tolerant with merit system administrators. Giving
an examination takes a considerable amount of time.
Regulations require at least 30 days' notice to the
entire public that an examination is to be given.
Then, following the closing date for receipt of appli-cations
for the examination, the applications must be
processed, that is, someone decides whether the
PAGE 12 THE U. C. C. QUARTERLY Winter, 1945
applicant is eligible. The appropriate number of
examinations must be sent to the proctors in the
various centers and notices of the examinations are
sent to the individual applicants. All of this takes
time. We must then wait for the proctors to send
the test papers back. These days it takes a long
time for express packages to be returned from cities
a hundred miles from the center of our activities.
When the papers are back, they must be graded. All
merit systems have used various methods for
shortening this process, but it still takes time and
accuracy is essential. If the examination is to have
an oral test as well as written, arrangements must
be made for all those who passed the written to
appear before one or more oral boards that must go
from place to place in the area.
Then there are any number of people who swear as
often as they are asked that they are interested in a
job. Hopefully, we send their names to the agen-cies
requesting names from that register only to be
told by the agency and to have it confirmed by the
individual that he or she could not accept that job
at that time. No amount of circularizing the people
on the registers can possibly do away with that
difficulty. It is simply one of those things which is
going to slow up the procedure for selection of per-sonnel.
Apparently each person who takes an exami-nation
hopes against hope that the right job will
come at the right time, and insists that his name be
retained on the active register. Of course, if he
refuses several times, his name may be taken from
the active register, but for every name dropped
there are two or three others added with whom we
have the same difficulty.
COOPERATION
The agency may ask, "How can the agency help
in speeding up this whole process ?" One suggestion
would be that in so far as possible, the agency budget
the needs for employees in the same way it budgets
its needs for funds. By this time each agency should
know what its possible turnover is for any particular
job. Let the Merit System know about that ; it will
help them plan an examination program. Of course,
the need may be more or less than budgeted, but
that is true even with a financial budget.
Another thing which an agency can do is to ask
for the type of person it wants. Recently one of the
agencies asked for a junior general clerk register.
In North Carolina, a junior general clerk is not re-quired
to be a typist or a stenographer, yet the
persons when interviewed for the job were asked
whether they could take dictation and type; then
they were told they were not satisfactory for the
job. In such cases, we write to the individual to get
his side of the case and in that way find out what
the agency has done. We do not think that the
agency was trying to get around the regulations for
they could just as easily have asked for a typist clerk
or a stenographer; but either through ignorance of
the requirements of the job or carelessness, the
wrong register had been requested. All this delayed
the procedure.
Another thing which the agency can do to help a
merit system which is serving more than one oper-ating
unit is to get the certificates back as quickly
as possible. If we send the Unemployment Compen-sation
Commission the names of three senior general
clerks, we do not like to send the same three names
to the State Board of Health, but we have found that
some of our agencies keep a certificate for the full 30
days allowed under the rules. Meanwhile, the Super-visor
is faced with the dilemma of sending the names
to a second agency, thus involving competition be-tween
the agencies for an applicant, or digging
deeper into the barrel for the second agency that
makes its request, whereas a better person might
have been secured from the rejects of the first
agency's list. It takes time for the agencies to get
the names they request and it takes time for them
actually to hire the person involved. In dealing with
the state agencies served, since we both realize that
time is of the essence, this problem has been worked
out fairly satisfactorily.
CHECK-UPS
Another item involved in the merit system rule is
the monthly audit of the payroll for merit system
status of those on the payroll. This has great possi-bility
as an area of conflict because this is the en-forcement
procedure of the Merit System. The
possibilities of any conflict are greatly reduced by
proper records being kept both in the Merit System
office and in the office of the agency, and by a will to
abide by the merit system regulations. If an agency
does not try to circumvent the merit system rule, the
Supervisor will not find anything the matter; but if
an agency insists on sneaking a person in now and
then contrary to merit system rules, the Merit
System is going to locate it by the payroll audit and
file objections. Of course, we do not have as much
trouble with state agencies in this as we do with a
few county departments, who sometimes must stay
awake nights thinking up ways to get around the
regulations.
Of fundamental importance in merit system-agency
cooperation is the administration of salaries
and personnel regulations. It has always seemed
that, unless the Merit System Supervisor is the
Personnel Director for the state, the Merit System's
job is to advise and counsel the agencies in the de-velopment
of salaries and personnel regulations.
Each agency with whom we deal has different
problems in this matter and we have, therefore,
merely advised. With the county agencies which we
serve we try to keep an administrative check to see
that the regulations are followed. Obviously, in-vestigators
cannot be sent into each of the hundred
counties of North Carolina to see that the vacation
rule is followed or that petty leave is not abused, but
these things are kept constantly before the minds of
the local administrators by asking for periodic re-ports
on the hours worked or leave taken.
SERVICE RATINGS
Another problem with which the Merit System has
dealt is the rating of employees. Here we have
cooperated with the Unemployment Compensation
Commission and will help the other agencies by de-veloping
with them adequate methods for periodic
rating of employees and making that rating amount
to something by incorporating it as a part of the
WINTER, 1945 THE U. C. C. QUARTERLY PAGE 1 3
promotional grade of each employee. Thus, when
the Chairman of the Unemployment Compensation
Commission gets a promotional register for any job,
he knows that the estimate of his own supervisors
of the various people involved is an important part
of the grade. Ratings are naturally a difficult thing
to administer in attempting to get uniformity as
between individual raters and fairness to all the
people who are rated. This fact is recognized; but
we feel that these ratings should be dignified by being
made part of the promotional grade and that a
constant effort should be made to eliminate insofar
as possible any personal prejudices on the part of
the person doing the rating.
DISMISSALS
Possibly the area in which the greatest amount of
conflict is likely to occur between the agencies and
the Merit System is with respect to dismissal of an
employee. The Merit System is supposed to protect
employees from dismissal for trival causes or politi-cal
reasons. The Merit System Council is supposed
to be a group of judges in all such cases. We feel
that the public service should not be a sinecure for
incumbents, and certainly no Merit System Council
would think of giving any aid to the obviously unfit.
There is a six months' probationary period during
which time the employing agency is supposed to find
out whether the person is competent. If the agency,
by lax administration retains some incompetents
because it did not have the courage to discharge
them before the six months' period was up, that
agency owes the incompetents some consideration.
CIGARETTE PAPER PLANT
MADE INDUSTRY INDEPENDENT
(By Bill Sharpe)
Smokers inclined to grumble a bit because they
can't always get their favorite cigarettes, might
more logically join in an obscure little 5th Anniver-sary
celebration on the banks of the Davidson River.
Because without some shrewd foresight, or luck, or
something, which established the Ecusta (cigar-ette)
Paper Plant, you probably wouldn't be smoking
a cigarette at all—at least, not one rolled in a thin,
tasteless paper.
When the Nazis marched into Poland, 90 percent
of the cigarette paper used in this country was being
imported from France. But, meantime, Harry H.
Straus, who helped develop the French industry, had
been hunting for pure, chemically-free water in this
country. His search ended on the banks of the
Davidson River, which comes tumbling out of Pisgah
National Forest. Happily, it was also located near
the center of tobacco manufacturing.
In August 1939, the first cigarette paper was
made in the new plant, and it was just in time. Sub-sequent
expansion of the original plant has made
American smokers virtually free of paper imports.
The paper is now used to wrap Camels, Chester-fields,
Philip Morris, Old Gold, Lucky Strikes, and
many other well-known brands.
Of course, people step down as well as step up and
when that occurs, every agency must use the right
of discharge. The Merit System Council is not an
organization designed to keep poor workers on the
job, but we are supposed to see that every change in
the political wind does not bring about an upheaval
in the working forces of government. Unless the
protection of publicity, at least, is given, a person
may be discriminated against either because he votes
for the wrong candidate or because the successful
candidate has a friend who wants the incumbent's
position. In North Carolina, we have not had any
cases of appeals from discharge under the present
Merit System Council, but if we do, we will try to
give the incumbent a fair hearing. We will not try
to defend incompetent incumbents ; but we will try
to give full publicity to any arbitrary discharge.
BETTER PUBLIC SERVICE
In conclusion, it should be reemphasized that only
when governmental administrators understand that
merit systems are designed to promote better govern-ment,
can any merit system function properly. On
the other hand, merit system administrators must
constantly remember that they can serve the public
best by serving the agencies best. We have, to be
sure, certain powers and duties; but we should use
these as state police used to when they drove around
in white cars that could be seen for miles. They
weren't trying to make arrests ; they were trying to
cut down speeding. We are not trying to catch or
badger an agency. We are trying to help the agen-cies
and we exist only to serve the public interest as
every government agency does.
In saving the tobacco industry from a fate worse
than death—and by a pretty terrifying margin
—
the infant industry had to solve many technical
problems. Cigarette paper must be pure white and
opaque; completely tasteless—directly and when
burning ; must burn at the same rate as the tobacco
;
must be thinner than the diameter of human hair,
yet elastic and strong ; must not stick to the lip, yet
must be sufficiently moisture resistant so the cigar-ette
will not become soggy.
As early as 1934, experiments with flax had been
started in South Carolina. Now native flax is flow-ing
to Ecusta and turning out what President Straus
says is a product superior to that formerly imported
from France.
The use of flax also has created a source of income
for farmers to whom it was a waste product. In
some sections, flax had been such a nuisance that
farmers paid $1.50 an acre to have it removed. Much
of Ecusta's flax comes from Minnesota and Cali-fornia.
A year's supply is now in storage. The
industry has brought 1,500 jobs into this mountain
community, with an annual payroll of more than
$2,500,000.
One bobbin of paper will make 85,000 cigarettes,
and Ecusta's capacity is 20,000 bobbins a day. That
adds up to 1,700,000,000 cigarettes, and U. S. con-sumption
currently is only around 257 billions a year.
PAGE 14 THE U. C. C QUARTERLY Winter, 1945
Timber Cropping Destined to Replace
Mining of North Carolina's Forests
By C. F. Korstian, Dean Duke School of Forestry and President, North Carolina Forestry Association
For over 200 years we have "mined" our forests.
Forest products were abundant and cheap and the
United States attained a per-capita consumption of
forest products far greater than that of any country
in the world. The use of this forest heritage con-tributed
largely to maintaining the living standards
of our American people. But the pioneer belief that
the plow would surely follow the axe was not always
borne out, for many areas unsuited for agriculture
were denuded of their forests even though they
could best serve the nation for timber growing.
A change in the attitude of the forest-products
industries toward their raw material and of forest
owners toward their lands is under way. Within the
last decade forest management has come to the fore,
involving a stabilizing of the forest industries in
place of migratory mills and plants, and the develop-ment
of a permanent interest in forest lands and the
growing of new timber crops on a permanent basis
instead of looking for additional virgin forests to cut.
This evolution has really just gotten off to a good
start and many years will be required to bring all
forest lands in the United States under adequate
protection and wise use. It is too much to expect
that under the old, commonly accepted American
system of free enterprise, in which the economic law
of supply and demand and immediate financial re-turns
rather than deferred income are dominant
factors, reasonably good forestry will be practiced on
a sufficiently large proportion of the privately owned
forest lands of the country soon enough to obviate
the necessity for some reasonably effective and yet
practicable form of public supervision or control over
cutting on these lands in order to keep them con-tinuously
productive of future timber crops.
North Carolina, with over 17 million acres of
privately owned forest land and hundreds of thou-sands
of ownerships is no exception to the general
situation found in a recent study to prevail in the
important forest regions of the country.1 Less than
one-third of this area is being handled and managed
for the growth of timber, most of which (4.8 million
acres) only receives extensive management prac-tices
involving fire protection and provisions for re-stocking
such as the reservation of seed trees or
partial cuttings.2 The remainder of this area under
management, in addition to receiving extensive
forestry practices, is handled under planned cutting
programs or forest improvement operations aimed
at the continuous growth of timber crops under
technical forestry practices.
RESOURCES
Of the area under extensive forest management
600,000 acres are industrially owned, over 1.8 million
acres are in farms, and the remainder (over 2.4
million acres) is in other forms of ownership.
Of the area under intensive forest management,
60,000 acres are industrially owned, 100,000 acres
are in farms and the remaining 260,000 acres are in
other forms of ownership.
Forests comprise important and integral parts of
North Carolina farms. The 278,276 farms in the
state, aggregating 18,845,000 acres, have a total of
9,093,000 acres in farm forests or an average of 33
acres of forest per farm. The total value of forest
products sold from farms in 1937 was nearly 8.7
million dollars, ranking sixth in order of total sales
of various farm products, being exceeded by tobacco,
corn, cotton, hay, and peanuts. However, by adding
to the value of forest products sold from farms that
Cutting of short leaf pine leaving scattered seed
Korstian, C. F., "Forestry on private lands in the United
States." (1944.) Duke School of Forestry Bui. 8. 234 pp.
These and other figures in this article are from "Forest
Facts for North Carolina" reported May 18, 1944 by the
Committee on Forestry Policy, North Carolina Forestry
Association and compiled from data supplied by the Forest
Survey, Appalachian Forest Experiment Station, AsheTllle,
N. C, and by the Division of Forestry, State Department
of Conservation and Development, Raleigh, N. C.
Winter, 1945 THE U. C. C. QUARTERLY PAGE 1 5
* *
*
clear cutting to be followed by planting.
of forest products used on farms (nearly 15.6 million
dollars) the total value of forest products produced
on farms displaces cotton in third place.
There are about 3,850 sawmills in North Carolina,
four pulp mills, approximately 65 veneer mills, 12
cooperage plants, nine tanning extract plants, five
excelsior mills, 48 shuttle-block, handle and dimen-sion
mills, and 41 other primary wood-using plants.
Almost 2,900 of the sawmills operating in North
Carolina in 1937 had a capacity of less than 10,000
board feet per day. These small mills cut two-thirds
of all the lumber. The greatest concentration of
these mills is in the Piedmont. Of 1,600 sawmills
operating in this section of the state only 28 had a
daily cutting capacity of more than 10,000 boara
feet. All six of the largest mills—with a daily
capacity of 40,000 or more board feet—were located
in the Coastal Plain.
These primary commercial forest industries afford
approximately 8,039,000 man-days of employment
per year. Only the textile industry provided the
workers of North Carolina with more employment
than did the primary forest industries. The secon-dary
forest industries such as furniture factories
provided an additional 9,395,500 man-days of em-ployment,
bringing the total to about 17,434,500
man-days per year for the forest products industries.
The total value of the primary forest products
produced in North Carolina averages about 55 million
dollars per year. The annual production of forest
products in the state is approximately 1.7 billion
board feet of lumber, 870,000 cords of pulpwood, 5.8
million cords of fuelwood, 612,500 hewn crossties,
151,000 poles and piling, 150 million square feet of
veneer, and 100,000 cords of other products.
To obtain a true picture of the forest resource
situation it is necessary to determine not only the
quantity of wood removed from the sound-tree grow-ing
stock in the forests of the state by the forest
industries and domestic users, but also the amount of
growth in these forests for the same period. For
1937 the Forest Survey found that the pine stands in
the state as a whole were being over-cut in the saw-timber
sizes and were barely holding their own when
all sizes were considered. The hardwood situation
.Shelter wood cutting, when pine reproduction has become established in the
openings, the remaining large trees will be cut.
was more satisfactory as there was a small gain in
saw-timber volume.
This over-all picture does not, however, accurately
portray conditions in the different parts of the state.
For example, the mills and other users over-cut the
pine stands of the Piedmont in 1937 by 184 million
board feet. During the period from 1937 to 1944 the
Forest Survey calculates that the volume of saw-timber
in these Piedmont pine stands was reduced
by 16 percent.
Thus in certain areas of the state the drain ex-ceeds
the current growth, in others the supply of
large, high-quality trees is limited, and in still others
the preponderance of cull trees in the forest stands
hinders profitable timber growing. Moreover, on a
large percentage of the forest land the volume of
growing stock is not over one-half of what it could
be under good forestry practices. Under present
conditions the wood-using industries can continue
to operate for a considerable time without losing
their high rank in the industrial economy of North
Carolina. However, if they are to remain perma-nently
in business, and expansion rather than con-traction
of these industries is anticipated, the neces-sary
steps must be taken to build up the annual
Thinning. Short leaf pine following thinning for fuel wood, pens of which
are in foreground.
PAGE 1 6 THE U. C C. QUARTERLY Winter, 1945
forest growth, in the most useful sizes and species,
to more nearly the productive capacity of the land.
FIRE PROTECTION
To bring about this objective several approaches
are desirable. First of all adequate fire protection
must be considered as a prerequisite to timber grow-ing
and the efforts of public and private fire control
agencies must be strengthened and given whole-hearted
support. Forest fire control should be ex-tended
and expanded to a state-wide basis. Only
about two-thirds of the counties of the state have
organized fire control and most of this is inadequate-ly
financed. The $169,000 recommended by the
State Advisory Budget Commission for the fiscal
year 1945-1946, although almost $66,000 above that
for 1944-1945, is only about three percent of the 3.5
million dollars of annual tax income to the State
Treasury from the forests and forest industries of
North Carolina. This amount is still inadequate to
protect the state's forests, the stumpage of which,
exclusive of land value and of the forest products
industries, is estimated at 188 million dollars.
The increased recognition by the State Budget
Bureau and by the Advisory Budget Commission of
the importance of adequate forest fire control and
certain other phases of the state's forestry program
is indicated by the following excerpt from the fore-word
of the Commission's report to the 1945 Legis-lature
:
"The appropriations for Forest Fire Control
have been increased very materially. The pres-ent
war emergency has definitely brought the
Nation face to face with a realization that the
forest products of the country are very vital,
and that war uses have depleted these products
to a very great extent and that, in order to have
sufficient forest products to meet the needs dur-ing
peace time, it will be necessary to preserve
and to encourage forest production. With this
in mind, it has been recommended that addi-tional
funds be appropriated for forest fire con-trol
and for certain other forestry work in order
to preserve and to provide ample planning for
future needs."
HARVEST CONTROL
Even though adequate control of forest fires is the
first essential requirement for successful timber
cropping, it alone will not necessarily keep forest
lands continuously productive. Cutting methods
that will assure perpetuation of well-stocked stands
of desirable timber species should be more widely
practiced. Many tree species now infrequently
utilized, particularly of hardwoods, should be cut
and marketed. This may involve a more extensive
development of wood conversion or secondary wood-using
industries, possibly at the expense of a de-crease
in lumber production. More control must be
exercised over cutting practices on privately owned
forest lands to guard against stripping them with-out
regard to their future productivity. Measures
such as these will go far toward making the forests
of North Carolina a growing permanent natural re-source,
capable of supporting more forest products
industries and a larger part of the state's population.
The greater natural wealth thus created will not
only support enlarged permanent forest industries
and supply more permanent jobs, but will also pro-vide
a wider tax base for equitable taxation.
For a number of years the North Carolina Fores-try
Association has sought to encourage, in coopera-tion
with lumbermen, the pulp and paper industry,
and other users of forest products, the more exten-sive
adoption of a system of timber harvest that will
provide for a sustained timber yield and make for
better land use on a permanent basis. Pursuant to
resolution of the Association adopted at its Septem-ber,
1944 meeting and with the concurrence of the
Forestry and Parks Committee of the State Board
of Conservation and Development, a conference was
held in Asheville on November 14 and 15 to explore
the possibilities of drafting a state bill for the con-trol
of cutting practices which may reasonably be
expected to be practicable of administration and to
attain the objectives of increased and sustained yield
of forest products. This conference was attended
by representatives of forest owners and the ma~jor
forest industries and by state and federal forestry
officials. It reached a common accord to the extent
of approving the context of a bill which it felt would
be deserving of support in the State Legislature.
Another important decision reached at the Asheville
conference was that practical and yet reasonably
effective forest cutting practices can be drafted for
the more important groups of forest types in North
Carolina. Such cutting practices have since been
drafted by a committee of the Appalachian Section
of the Society of American Foresters.
It is uncertain whether a bill, patterned along the
general lines of the recommendations of the Ashe-ville
conference or of some other form, will be intro-duced
in the 1945 session of the General Assembly.
Some of our statesmen, however, have indicated that
they believe that North Carolina's forest situation is
sufficiently critical to demand the most thoughtful
attention and remedial action by the State Legis-lature.
FORESTRY SURVEY
An independent survey of forestry administration
and practice has been under way in North Carolina,
the first state selected for this study which is being
conducted as a joint project of the Society of Amer-ican
Foresters—the national organization of profes-sional
foresters in this country—and of the Charles
Lathrop Pack Forestry Foundation. Made possible
by a grant of funds from the Foundation, the project
will subsequently be extended to other states in
which administration of forest resources will be
studied. The project is designed to render a service
to the states by providing them with an objective
professional analysis of their forestry problems, and
to submit recommendations as to how those prob-lems
might be solved for the states' social and eco-nomic
welfare. The survey is being made in North
Carolina with the cooperation of the State Depart-ment
of Conservation and Development, and other
state, federal and private agencies.
Winter, 1945 THE U. C. C. QUARTERLY PAGE 1 7
Workmens Compensation in North Carolina
By T. A. Wilson, Chairman, Industrial Commission
Insofar as the comforts of life may be purchased
in the open market, the people of the United States
have made more progress in their mode of living
since 1900 than all other people in the history of
civilization, and most of this has taken place since
the First World War. In the past we of the United
States have felt that we could solve most of our
social problems due to modern industry by our high
standard of living as compared with many other
industrial countries, but the severe and long eco-nomic
depression of the late twenties and early
thirties taught us that the individual is helpless
when his limited savings are rapidly consumed
through unemployment, whether caused by accident,
sickness, a lack of opportunity to secure employment,
or any other cause.
Modern industry has solved many of the problems
of supplying the needs of mankind in our complex
civilization, but as we solve one problem others are
created. Thus the need for a broad comprehensive
social security program.
The United States has been somewhat behind
many other nations in trying to alleviate certain
social problems through legislation. With the ex-ception
of the Workmen's Compensation Laws, en-acted
by individual states beginning in 1911, very
little progress was made in this country until the
present national administration took office in 1933.
Since the Workmen's Compensation Law was the
fore-runner in the United States of the broader
social security program, of which we are now so
proud, it probably will be of interest to briefly sketch
its origin and history in Europe, in the United States,
and here in North Carolina.
HISTORY
The modern Workmen's Compensation Law had its
origin in Germany, and was offered by Chancellor
Bismarck as a means of preventing the further
spread of the socialistic doctrines of Marx and La-
Salle. The first bill was introduced in the Reichstag
in 1881, but because of objectionable amendments
the bill was withdrawn by the Government. In 1882
a second essay was made with two bills : a revised
compulsory accident insurance bill, and another bill
providing for compulsory insurance of workmen
against sickness. However, both bills dealt with the
industrial accident problem, for it was contemplated
that compensation benefits would be paid from the
sickness funds during the first 13 weeks of disability
resulting from accidental injuries, and that the acci-dent
funds should be used to provide benefits only in
case of serious injury that caused either death or
disablement extending beyond the 13-week period.
The committee considered the sickness bill first and
it was enacted in 1883, effective December 1st, 1884.
No action was taken on the accident bill, but a third
bill was introduced in March, 1884, providing for a
system of mutual accident insurance associations
which was enacted effective October 1st, 1885. Its
THURSTON ADGER WILSON
Better known as "T. A." Like our Governor Cherry, born
in South Carolina, but has developed into a fine North Caro-linian.
Able, conscientious, honest, modest, hard-working.
In every sense, a useful public servant.
Leader of organized labor for many years. President of the
North Carolina Federation of Labor, 1927-1930.
Appointed member of the North Carolina Industrial Com-mission
when it was set up, May 1, 1929. Chairman since
March 1, 1939. National authority on industrial safety and
member of all of the important national and international
societies operating in this field.
T. A. is presently the President of the International Asso-ciation
of Industrial Accident Boards and Commissions, hav-ing
been elected to that position at the international conven-tion
of this organization at Boston, Massachusetts, last year.
Previously he had served on important committees of this
association and as one of its vice-presidents.
With his state-wide, national and international interests,
T. A. finds time to be one of Raleigh's most useful citizens.
Member American Legion, 40 & 8, Lions Club, Junior Order,
Masons, Typographical Union, Lutheran Church. Active in
all.
The Unemployment Compensation Commission is proud of
its older sister organization, the North Carolina Industrial
Commission, and we who are responsible for its administra-tion,
are grateful to T. A. and his associates for their unfailing
interest and their help in the stormy days of 1936-37, when
we were launching our new agency. The relation between
our agencies has been close and cordial and should so remain,
because we are both in the same field, the Industrial Commis-sion
bringing cash benefits when the worker is disabled by
industrial accident or occupational disease, and the Unemploy-ment
Compensation Commission providing income for him
when he loses his job through no fault of his own.
The Unemployment Compensation Commission salutes the
Industrial Commission and its worthy Chairman. We are
proud to present his story of "Workmen's Compensation in
North Carolina."- —A. L. F.
PAGE 18 THE U. C. C. QUARTERLY Winter, 1945
coverage was limited to manufacturing, mining and
transportation. Later its scope was increased to
cover employees in agriculture, forestry and public
service in 1886; building trades in 1887, and in 1911
all Workmen's Compensation Laws were brought
together. Previously in 1871 Germany had enacted
the Employers Liability Law.
Great Britain, too, had her problems. Prior to
1846 there was no right of action in England under
the common law for wrongful death. The Lord
Campbell's Act remedied this situation by permitting
the personal representative to bring action within 12
months. The Employers Liability Act of 1880 modi-fied
the fellow servant rule but did not stop the
agitation for a broader reform. Amendments were
offered to abrogate the fellow servant rule in its
entirety, the defense of assumption of risk, and to
limit the practice of contracting out. The situation
in Great Britain became increasingly worse until a
Workmen's Compensation Law was enacted in 1897,
which was of an experimental nature, covering only
hazardous employments such as railways, factories,
mines, quarries, engineering work, and on buildings
more than 30 feet high. The employer paid the en-tire
cost. It was enacted over the opposition of both
employers and employees—some employees feeling
that somehow they would have to bear the cost. In
1900 its scope was extended to cover agricultural
laborers and in 1906 it was further extended to cover
most employments and the benefits were revised.
Other European countries enacted compensation
laws prior to the United States.
The industrial accident problem in the United
States was left to the individual states, and, of
course, the early Compensation Laws had to hurdle
the favorite legal question, to wit : constitutionality,
both state and federal. And then there was the
question of competition, that one state would have
an advantage over another.
However, in 1891 the United States Bureau of
Labor studied the German system and published its
findings in 1893. A similar study was made in 1898
by the Bureau of Labor Statistics in Massachusetts
at the request of the Legislature.
The first American Workmen's Compensation Law,
modeled after the British Act, was introduced in the
New York Assembly in 1898. It did not come out of
the Committee.
Maryland passed an Act in 1902 covering clay and
coal mining, quarrying, operation of steam and street
railways, and certain construction work for munici-palities.
It was crude and limited death benefits to
$1,000. It was declared unconstitutional in 1904 for
the reason that it deprived parties of the right of
trial by jury.
Massachusetts in 1903 appointed a committee of
five which the following year recommended a law
modeled after the British Act of 1897. It was re-jected
by the Legislature because it would impose too
great a burden on industry. In Illinois it was op-posed
in 1907 by both employers and employees, the
former objecting to increased legal responsibility,
and the latter to abrogating their common law rights
and the limited benefits. Many other states ap-pointed
committees to study the laws and make
recommendations.
In 1908 the United States Congress, upon request
of President Theodore Roosevelt, passed a law with
limited benefits for certain government employees.
Finally the constitutional problem was solved by
a system of elective laws. That is, the employer is
presumed to have accepted the law and provide in-surance
if he has a given number of employees and
if his industry is not exempted. If he fails to provide
insurance or if he rejects the compensation law his
common law defenses are abrogated. Thus, if there
is any negligence on his part and he is solvent it is
only a question for the jury to say the amount of the
monetary damages. Usually if the employer has
failed to reject or provide insurance the injured em-ployee
has the right to elect to sue at law or accept
compensation.
Thus there were investigations and experiments
which ultimately resulted in 47 state compensation
laws (Mississippi being the remaining exception),
several territorial laws, the United States Long-shoremen's
and Harbor Workers' Act, which was ex-tended
to cover United States Government employees
and civilian employees in the District of Columbia.
New York amended its constitution to provide a
compensation law. North Carolina in 1929 was the
44th state.
NEED
Why the necessity for Workmen's Compensation
Laws? The common law system was slow, cumber-some,
expensive, and many abuses developed. Good
employer-employee relations could not be main-tained,
which modern industry now realizes is most
important for efficient production. Court trials with
attendant witnesses interrupted production, and the
employer, not infrequently, was held up to public
abuse before the jury of 12, a crowded courtroom,
and the press. On the other hand many sociologists
estimate that only one injured worker out of eight
(and some times less) ever recovered under the com-mon
law system, and, therefore, they frequently
became a charge first on their relatives and friends,
and then on society as a whole. I have frequently
said that no worker would roll dice with the pay-master
to determine if he were to be paid off or the
company keep his wages. Certainly he should not
expect his widow and orphans to play a game of
cards with the paymaster knowing that the cards
will be stacked against them eight to one to de-termine
as to whether they will be taken care of or
not.
"And judgment is turned away backward, and
justice standeth afar off: for truth is fallen in the
street, and equity cannot enter." (Isaiah, 59 Chap.,
14 verse.)
The late Justice Adams in Conrad vs. Foundry
Company, (198 N. C. pp. 725-6) quoting from Stertz
vs. Industrial Insurance Commissioner (91 Wash.,
588, 158 Pac, 256) said:
"Both had suffered under the old system, the employer
by heavy judgments, * * * the employee through old de-fenses
or exhaustion in wasteful litigation. Both wanted
peace. The master in exchange for limited liability was
willing to pay on some claims in the future where in the past
Winter, 1945 THE U. C. C QUARTERLY PAGE 19
there had been no liability at all. The servant was willing
not only to give up trial by jury, but to accept far less than
he had often won in court, provided he was sure to get the
small sum without having to fight for it."
Justice Adams then said
:
"The result was that the compensation law discarded the
theory of fault as the basis of liability and conferred an
absolute right of compensation on every employee who is
injured by an 'accident arising out of and in the course of
the employment'."
Justice Seawell in Barber vs. Miyiges (223 N. C,
p. 216) says:
"The primary purpose of legislation of this kind (Work-men's
Compensation) is to compel industry to take care of
its own wreckage. It is said to be acceptable to both em-ployer
and employee, because it reduces the cost of settle-ment
and avoids delay. To the employee, it means a cer-tainty
of some sort of compensation for an injury received
in the course of business; and to the employer, it reduces
unpredictability of loss and puts it on an actuarial basis,
permitting it to be treated as 'overhead', absorbed in the
sales price, and thus transferred to that universal beast of
economic burden, the consumer. * * * It is said to be
permitting it to be treated as 'overhead,' absorbed in the
conduct of the enterprise, and is referred to the propriety
of keeping loss by accident incidental to employment
'chargeable to the industry where it occurs.' * * * It is
called 'an economic system of trade risk.'
"
The North Carolina Supreme Court, like others,
has said on many occasions that the law must be
interpreted liberally in favor of the injured worker.
As to delays in courts under the old system, in
Rhode Island a certain case was tried before a jury
five times, went to the Supreme Court five times, and
finally a verdict for $22,895 was sustained eight
years after the accident. A Missouri boy, age 18,
lost his leg in 1872, 18 years later in 1890 he re-covered
$12,000 with interest after three jury trials
and three appeals. He was then 36 years old, mar-ried,
and the father of three children.
And then there is the famous old English case that
Dickens portrayed of Jarndyce vs. Jarndyce, which
remained in litigation for approximately 40 years.
ACTION
The Legislative history leading up to the enact-ment
of the North Carolina Workmen's Compensa-tion
Law ran true to form. The common law system
was unsatisfactory. As North Carolina emerged
from an agricultural state to an industrial state the
dissatisfaction with the common law system of
establishing liability for personal injury to employees
increased, yet little was done until the Workmen's
Compensation Law was enacted March 11th, 1929,
upon the urgent request of Governor O. Max Gardner
in his first message to the General Assembly
(January 11th, 1929) in which he said:
"North Carolina has grown so rapidly in industry during
recent years that the state is passing through a transition
period. Changing from an almost wholly agricultural state
to a well advanced and almost evenly divided industrial
state, this condition suggests the crying need for a fair and
just workmen's compensation law, which I believe should
be provided by the General Assembly. This would serve
the needs of labor in providing a quick, economical, and
efficient method of adjusting the claims for injuries, loss of
time, and damages and would relieve the claimants of a
large part of the expense and delay incident to court trials.
It would relieve them of the burden of proving the negli-gence
of the industry, and at the same time would tend to
relieve some of the congestion now prevailing on the dockets
of our courts. It would also be more satisfactory to in-dustry
because it would mean fixed and stated standards
for determining compensation, and would not leave the
question open to the speculative determination of court
trial. This law should be fair to the employee and not
oppressive or unjust to the employer."
In 1897 the North Carolina General Assembly
abrogated the fellow servant rule, modified the doc-trine
of contributory negligence and assumption of
risk when due to defective machinery, but it only
applied to railroads. From 1911 to 1921, 20 bills
were introduced in the Legislature, including eight
in 1913, and five in 1915, to modify the employers
liability, but all failed of passage except three, and
these applied only to railroads, including logging and
tram roads.
As to workmen's compensation, 17 bills were in-troduced
in the North Carolina Legislature from
1913 through 1927, including three in 1913, and five
in 1921, but only two passed. One passed the extra
session of 1920 to appoint a special joint committee
of the Senate and House to investigate and report
upon workmen's compensation, and at the next
regular session a bill passed to pay the expenses of
this committee. With the exception of 1919 one or
more bills were introduced at every regular biennial
session of the Legislature from 1913 to 1929 to create
a workmen's compensation law. Yet it was not until
1923 that a committee gave a compensation bill a
favorable report, and this did not recur until 1927
when a bill was amended and placed on the favorable
calendar.
During this time the North Carolina State Federa-tion
of Labor had gone on record in 1915 for a work-men's
compensation law and at subsequent conven-tions.
Also, Commissioner of Insurance, James R.
Young, in 1914 and his successor, Stacy Wade,
recommended the passage of a Workmen's Compen-sation
Law; M. L. Shipman, State Commissioner of
Labor and Printing, in 1916 and biennially there-after,
while in office, recommended the passage of a
law, as did his successor, Frank D. Grist, who aided
in its passage in 1929.
During the 19 years, 1911 to 1929, six governors
held office, five of whom were elected upon a Demo-cratic
platform pledged to the passage of a work-men's
compensation law, but it was not until O. Max
Gardner was elected that a governor really pressed
for its passage.
Not only did Governor Gardner vigorously recom-mend
its passage but he was instrumental in getting
representatives of employers and employees together
outside of the legislative halls to agree upon a bill to
the end that there would be unanimity of support
from the two principally interested parties, and thus
substantially reduce and narrow the opposition. The
legislative action proved the wisdom of his strategy
for after a lengthy public hearing before the 1929
Joint Senate-House Insurance Committee the bill
was reported favorably to the Senate but re-referred
to the committee for further hearing upon motion of
Senator Walter Clark of Mecklenburg to hear certain
of his constituents in opposition to its passage. Upon
the bill being given a second favorable report there
was a lengthy debate in the Senate extending over
two days but the end result was its passage with
PAGE 20 THE U. C. C. QUARTERLY Winter, 1945
only four votes being cast in opposition, and in the
House there was not even a roll call.
Among the leaders in the 1929 Legislative fight
for passage of the Compensation Law were Governor
J. M. Broughton, then State Senator ; Senator Claude
C. Canaday of Johnston, both of whom introduced
bills ; and Representatives W. E. Price of Mecklen-burg
and Robert M. Hanes of Forsyth.
The non-legislative committee, which agreed upon
the terms of the bill passed in 1929 with minor
amendments, included the following: For the Em-ployers,
Stacy W. Wade, former Insurance Commis-sioner;
V. P. Loftis, representing the contractors,
and Frank S. Spruill, Sr., Attorney, representing the
Yellow Pine Lumber Association. For the Em-ployees:
T. A. Wilson, President, and James Ride-out,
Secretary, North Carolina State Federation of
Labor; J. E. Baumberger, representing the Brother-hood
of Firemen and Engineers.
However, the principal negotiations were carried
on between Spruill and Wilson who agreed upon the
benefits embodied in the bill that passed, except that
the Senate increased the total compensation from
$5,500 to $6,000.
PROVISIONS
Thus, the legislative history of Workmen's Com-pensation
in North Carolina is not unlike that of
Germany, England and the 43 States that preceded
it. The Compensation Law was finally enacted, and
became effective July 1st, 1929. The law provided
for a Commission of three, who "shall devote their
entire time to the duties of the Commission." The
Governor shall appoint the members of the Commis-sion
and "not more than one appointee shall be a
person who, on account of his previous vocation, em-ployment,
or affiliation, can be classed as a repre-sentative
of employers, and not more than one ap-pointee
shall be a person who, on account of his
previous vocation, employment, or affiliations, can be
classed as a representative of employees."
The original members of the Commission were
Matt H. Allen, Chairman, representing the public;
J. Dewey Dorsett, representing the employers; and
T. A. Wilson, then President of the North Carolina
State Federation of Labor, as Labor's representative.
Harry McMullan, now Attorney General, succeeded
Matt H. Allen as Chairman and served for a short
while. The present members of the Commission are
T. A. Wilson, Chairman, Buren Jurney, Commis-sioner
and Pat Kimzey, Commissioner.
The 1929 law was modeled after the provisions of
the Virginia, Georgia and Indiana Workmen's Com-pensation
Laws. It provided for compensation at the
rate of 60 % of the average weekly wage, but not less
than $7.00 per week, nor more than $18.00 per week.
In case of death, 350 weeks compensation; total
disability not to exceed 400 weeks; for partial disa-bility
(except for partial loss of or loss of use of
members) 300 weeks, but in no case to exceed $6,000,
including burial expense not to exceed $200 ; the em-ployer
to pay the cost of medical, surgical and
hospital expenses for 10 weeks, and thereafter upon
order of the Commission when it "will tend to lessen
the period of disability." There was a schedule of
weeks to be paid for loss of members ranging from
200 weeks for loss of an arm to 10 weeks for loss of
a toe, which was in keeping with other state laws in
the South. However, as to percentage, total compen-sation
and medical benefits, the 1929 law was then
the most liberal in the South.
OPERATION
From 1929 to July 1st, 1944, a total of 650,812
cases have been reported to the Industrial Commis-sion,
in which compensation has been paid in the
amount of $18,511,060, and medical expenses paid in
the amount of $9,217,842. Included in the 650,812
cases are 1,528 deaths, 62 permanent disability,
14,369 permanent partial disability, 122,080 tempo-rary
total disability, and 512,773 medical only cases.
With the beginning of the Compensation Act, the
Commission realized that something should be done
in the field of industrial safety to improve working
conditions and create a safety minded attitude on the
part of employers and employees. With this thought
in mind the First Annual Statewide Industrial
Safety Conference was organized in 1930, with the
first meeting held in High Point. This was the first
such Safety Conference in the entire South. Since
that time, several southern states have started
similar programs. The Statewide Safety Conference
has been held each year since the beginning, and has
increased in size and interest each year.
In 1936 it appeared to the Commission that the
textile industry of the state could make an improve-ment
in its accident record. The present Chairman
conferred with the late J. A. Long, then President
of the North Carolina Cotton Manufacturers' Asso-ciation,
and suggested a Statewide Textile Safety
Contest might be of some value. This contest was
begun that year with 173 textile mills participating,
working 59,977 employees for a total of 33,187,587
hours. The Ninth Annual (1944) Contest had an
enrollment of 395 mills employing 135,616 employees
working 190,412,498 hours. During the time this
contest has been operating the compensation in-surance
rate for cotton spinning and weaving has
been reduced from 72c to 56c—a savings of 16c on
each $100 annual payroll of the industry. The con-test
has grown to such size that now almost 97% of
the textile mills in the state participate.
The Textile Safety Contest created so much favor-able
comment that the hosiery and furniture indus-tries
requested the Commission to start a similar
contest for their industries. This was done in 1942,
and each year has shown a decided increase in size
and interest.
Realizing that safety training was the foundation
of any good safety program, the Commission in July,
1942, began offering supervisory personnel of in-dustry
of the state a 10-hour Industrial Safety
Course. This was an immediate success. To date
more than 3,600 persons have been enrolled in this
course.
The Commission engages in many other safety
activities, all from the standpoint of educating em-ployees
and employers in safe working methods.
Winter, 1945 THE U. C. C. QUARTERLY PAGE 2
1
Some of these activities are: Organizing plant
safety committees ; assisting in plant safety con-tests
; showing and loaning of safety film ; individual
accident surveys for those plants making poor safety
records; speaking before safety committees, plant
executives, civic organizations ; publishing the
monthly "Safety Bulletin," and other educational
safety work.
According to Keech On Workmen's Compensation
in North Carolina, the ratio of rural to urban popu-lation
in North Carolina in 1900 was nine to one. In
1930 this ratio had been reduced to three to one, and
the state's population increased 43.7 percent between
1910 and 1930, with a gain of 73 percent for those
employed in business establishments.
According to the World Almanac there was an in-crease
in the number of industrial wage earners of
4,970 from 1929 to 1939 in the states of South Caro-lina,
Alabama, Tennessee, Mississippi, Virginia,
Florida, Georgia and Kentucky, while in North Caro-lina
during the same period there was an increase of
61,974—from 208,068 in 1929 to 270,042 in 1939—
or an increase of a little more than 12 times the
other eight southern states.
The Industrial Commission cooperates very closely
with the State Vocational Rehabilitation Division of
the Department of Public Instruction by referring
to the division all requests for lump sum settlements
and the seriously permanently injured cases. Out-standing
results have been obtained in many cases.
Widows have been assisted in buying homes.
Through rehabilitation some permanently injured
workers are actually earning more today than before
being injured.
In 1935 the Compensation Law was amended to
cover a comprehensive list of 25 occupational dis-eases,
North Carolina became the first state in the
South to incorporate occupational diseases and the
first in the United States to specifically cover sili-cosis
and asbestosis.
In 1943 the maximum weekly compensation was
increased from $18.00 to $21.00 per week and the
number of weeks increased for the loss of certain
members.
The following tabulation shows the amount of
compensation allowed for certain members of the
body before and after March 6th, 1943, at the maxi-mum
rate, the difference in amounts and the per-centage
increase of money to the injured worker:
MAXIMUM COMPENSATION
Hand
Arm
Foot
Leg
Eye
Thumb
First Finger..
Second Finger
$18.00 $21.00
Difference
Number Compen- Number Compen-
Weeks sation Weeks sation
150 $ 2,700 170 $ 3,570 $ 870.00
200 3,600 220 4,620 1,020.00
125 2,250 144 3,024 774.00
175 3,150 200 4,200 1,050.00
100 1,800 120 2,520 720.00
60 1,080 65 1,365 285.00
35 630 40 840 210.00
30 540 35 735 195.00
Percent
Money
Increase
32.2
28.3
34.4
33.3
40.0
26.4
33.3
36.1
In conclusion, the Industrial Commission started
a campaign July 1st, 1944, to bring about the prompt
payment of compensation. In November 46.92 per-cent
of the compensable claims were paid within 21
days from the date of the accident, and 23.88 percent
were paid within 14 days. Contrast this with the
annual report of one casualty company a few years
ago showing 15 common law cases pending nine years
or longer, 107 for six years and 327 for five years, 561
for four years, 1,213 for three years and 2,436 for
two years.
SAFETY NOTES
1. New Publication
American industry has exhausted practically every
source of manpower save one, and that is the re-serve
now wasted by industrial accidents, war plant
management was told with the announcement of a
new publication, Safety Through Management Lead-ership,
issued in connection with the United States
Labor Department's drive for a million fewer job
accidents.
Directed to smaller war plants which can seldom
afford—and now cannot hire—trained safety engi-neers,
the publication cites actual experience in
plants of varying sizes in organizing for safety.
Copies may be secured from the Division of Labor
Standards, U. S. Department of Labor, Washington
25, D. C.
2. Industrial Safety Chart Series
The Division of Labor Standards is cooperating
with Mill & Factory on a series of industrial safety
charts designed to promote safe working practices
around common types of industrial equipment. The
first of the series which has already been issued is
on drill presses. Subsequent issues published month-ly
and to be continued indefinitely, are planned to
cover circular saws, power trucks, lathes and other
types of industrial equipment.
These charts should be particularly useful in em-ployee
training and educational programs, for mount-ing
on bulletin boards, for reproduction in house
organs and trade pbulications, in safety training
manuals and other related ways. Copyright restric-tions
have been waived so that the charts may be
reproduced, enlarged or used in any way that will
make them more effective. They may be obtained
from either Mill & Factory, 205 E. 42nd St., New
York 17, N. Y. (with the name of any other organ-ization
on them as desired) ; or the Superintendent
of Documents, Government Printing Office, Wash-ington
25, D. C.
A CORRECTION
In the article on page 29 of this issue, "Manpower
Priorities Referral Plan in Operation in State," the
by-line was omitted through error. The article was
written by Dr. J. S. Dorton, State Director, War
Manpower Commission.
PAGE 22 THE U. C C QUARTERLY Winter, 1945
Post War Unemployment
By Silas F. Campbell, Supervisor, U. C. C. Bureau of Research and Statistics
Looking more directly at the problems of post-war
employment all sorts of predictions have been made
as to the volume of unemployment expected to re-sult
from the termination of war contracts. Such
estimates have ranged from 6 to 19 million. Since
North Carolina has 2.52 percent of the national labor
force it might also be expected to sustain 2.52 per-cent
of the unemployment burden.
However, it must be borne in mind that North
Carolina occupies a specially favorable position with
respect to stability of employment. Being a pro-ducer
largely of consumer goods, the purchase of
which is mandatory, employment, both during de-pression
and prosperity, has been at a higher level
than in those areas devoted largely to the manu-facture
of durable goods, the replacement of which
is in large measure optional. Official records indicate
that during the depression years of the thirties, and
since, unemployment in North Carolina has been
relatively 20 percent below the national level.
It may be expected, therefore, that the effect of
cut-backs in industrial production will strike North
Carolina business with less severity than is predicted
for the country as a whole, and that, within the
limits of its own products, if freed from continued
restrictions, the degree of inflation may depend
largely upon the ability of industry to satisfy the
accumulated consumer demand, except perhaps for
cotton textiles which may be supplanted to an un-known
extent by materials born in the laboratory.
Localization of the problem of post-war unemploy-ment,
both as to volume and industrial characteris-tics,
will be needful for those charged with the
responsibility of hastening post-war readjustments.
For workers in war plants, or in expanded indus-tries,
this presents no special difficulties since they
are regularly reported by areas to the Commission in
the usual course of business. However, the most
important segment of the labor force from the stand-point
of reemployment will be the discharged service
men from North Carolina who will exceed 45 percent
of the entire non-agricultural labor force of the state,
and more than 55 percent of the number engaged in
covered employment in 1943. Without some knowl-edge
of where they came from and a general under-standing
of their industrial background it will be
difficult to plan intelligently for their reorientation
into the industrial life of the state.
It is known what percent of the labor force, based
on the 1940 census, was engaged in covered employ-ment;
what percent in agricultural work and what
percent in schools, professions or other non-covered
employment. By taking the 1940 labor force by
counties it has also been possible to make an allo-cation
of the probable number to be released after
the war from covered employment in each county.
In the table these percentages are also used for
making an arbitrary distribution of the men to be
released from military service. When information
becomes available as to the number discharged for
any county it will be possible, by applying the per-centages
given, to estimate the number who may be
expected to return to agriculture, the number who
would probably seek employment in covered indus-tries,
and the probable number from schools, pro-fessions,
personal service or non-covered employ-ment.
In the meantime this table will serve as the
best estimate it is now possible to make, since it is
generally known that more than 300,000 have been
inducted from North Carolina.
The result of this arbitrary interpolation of per-centages
with aggregates to arrive at a final estimate
of unemployment may be summed up on a state-wide
basis upon the hypothesis that 28.98 percent of
the unemployment will represent agriculture, 42.86
percent covered industries, and 28.16 percent schools,
professions, personal service and other non-covered
activities. The percentages for each county are
indicated in columns two, three and four.
In column five of the table is an estimate of the
number who may be released from covered employ-ment
due to a cessation of war production. This
represents the actual increase in employment in each
county since 1940, and it will be noted that in 13
counties employment was less in 1943 than in 1940.
To the figures in column five has been added an
estimate of the number of service men who may be
expected to seek non-agricultural employment. This
is shown in column six as the total estimate of non-agricultural
unemployment in the first post-war year,
based on simultaneous demobilization. Gradual de-mobilization,
or the extension of the war in one area
for a longer period than in another area would
obviously reduce this number.
It will be seen that the problem will be more acute
in some areas than others, and that the character of
the problem changes with the industrial charac-teristics
of the area. For instance, in the mountain
county of Transylvania, an area not usually asso-ciated
with extensive industrialization, it will be
noted that 78.76 percent of all men who may be dis-charged
from military service presumably come from
covered employment, and only 19.65 percent from
agriculture, whereas, in Johnston County with its
extensive commerce, textile plants, and numerous
small towns, only 13.15 percent of its service men are
presumed to have come from covered employment,
and more than 60 percent from agriculture. Another
striking contrast in the same industrial area is
furnished in the counties of Durham and Wake.
With a difference in the estimated number to be
released from non-agricultural employment (includ-ing
service men in that category) of only 374, it is
estimated that as to Durham County more than 70
percent will have come from covered employment,
and only 23.64 percent from schools, professions and
non-covered employments ; whereas, in Wake County,
only about 35 percent will have come from covered
employment, and nearly half from schools, pro-fessions,
and non-covered employment.
Winter, 1945 THE U. C. C. QUARTERLY PAGE 23
ESTIMATE OF MAXIMUM UNEMPLOYMENT SN FIRST POST- YEAR—NORTH CAROLINA*
Average
Covered
Employment
1943
Estimated Distribution Releases
Fkom Military Service
Estimated No.
Workers Released
From Covered
Employment 1945 2
Total Estimate
Non-Agricultural
Unemployment
Ratio to 1940
Percentage of Total From Non-Agricultural
Agriculture
Covered
Employment Other
(923028)
STATE TOTALS ._._ 577,020 28.981 42.861 28.16i 107,844 335,209 36 32
Mountain Region. 69,052 29.64 32.69 37.67 12,938 54,485 38.00
19,831 16.43 39.67 43.90 3,566 15,370 37.86
19,683
148
10.35
65.94
44.29
1.98
45.30
32.18
3.513
53
14,791
579
3,248 36,28 13.21 50.51 539 5,409 <
374
794
509
335
1,144
92
29.74
38.26
41.58
28.79
32.64
53.83
23.36
13.01
10.17
9.52
16.79
5.78
46.90
48.73
48.25
61.69
50.57
40.39
51
3
105
131
252
8
557
1,130
943
1,057
1,464
Clay 258
5,858 28.17 38.30 33.53 1,098 5,233 9
2,296
2,879
683
28.36
19.65
38.24
25.88
78.76
17.68
45.76
1.59
44.18
188
910
3
2,303
2,152
Polk - 77S
8,450 14.76 62.14 23.10 1,953 5,079 47.59
Caldwell 8,450 14.76 62.14 23.10 1,953 5,079
11,868 16.15 49.70 34.15 2,060 7,243 39 20
7,755
4,113
15.73
16.74
49.54
49.92
34.73
33.34
1,178
882
4,251
2,992
7,903 49.92 30.09 19.99 1,500 4,801 35 98
7,689
111
103
37.42
75.55
61.30
49.30
1.61
1.92
13.28
22.84
26.78
1,500
3
8
3,957
322
Yadkin . 1 522
5.374 46.14 16. IS 37.68 1,091 5,212 28 87
1,248
153
260
359
3,354
46.74
54.21
52.64
52.18
39.22
28.49
3.51
3.31
6.04
23.47
24.77
42.28
43.05
41.78
37.31
397
S3
34
s
577
981
310
668
709
Wilkes, 2,544
2,328 41.48 14.87 43.65 436 2,486 29.77
527
1,413
388
39.74
32.08
52.13
11.30
25.41
8.00
48.96
42.51
39.87
199
97
140
873
892
721
Mitchell .
4,192 24.87 35.83 39.29 695 3,652 43 . 79
4,192 24.88 35.83 39.29 695 3,652
Piedmont Plateau. 377,987 20.45 53.95 25.60 50,726 189,598 33.94
9,869 . 23.55 52.58 23.87 1,643 5,272 36.57
2,316
7,553
30.31
20.19
42.83
57.43
26.84
22.38
516
1,127
1,615
Stanlv 3,657
10,410 28.81 41.43 29.76 1,034 4,787 25.95
2,011
8,399
43.65
22.74
24.06
48.53
, 22.29
28.73
118
916
978
Randolph 3,809
Burlington ______ __ _ 19,764 13.43 77.14 9.43 69 5,677 25.71
19,764 13.43 77.14 9.43 69 5,677
Charlotte.. __ 49,737 12.67 60.72 26.61 11,058 30,133 43.05
Mecklenburg _._ _ 47,737
2,000
6.44
51.83
68.08
14.46
25.48
33.71
10,669
3S9
28,300
1 , S33
25,805 9.23 90.77 6,226 24.77
Cabarrus : ____ 25,805 9.23 90. 773 » 6,226
PAGE 24 THE U. C. C. QUARTERLY Winter, 1945
ESTIMATE OF MAXIMUM UNEMPLOYMENT IN FIRST POST-WAR YEAR—NORTH CAROLINA-(Con.)
Average
Covered
Employment
1943
Estimated Distribution Releases
From Military Service
i
Estimated No.
Workers Released
From Covered
Employment 1945
Total Estimate
Non-Agricultural
Unemployment
Ratio to 1940
Non-Agricultura
Labor Force
(923028)
Percentage of Total From
Agriculture
Covered
Employment Other
28,389 19.87 55.81 24.32 4,908 15,198 35.41
22,807
2,964
2,618
5.99
30.20
70.20
70.37
26.28
29.80*
23.64
43.52
3,321
1,422
165
11,270
3,227
701
35,853 13.87 79.21 6.92 7,569 18,554 46.89
32,315
3,538
7.94
42.39
87.36
40.05
4.70
17.56
6,891
678
16,611
1,943
43,924 8.66 65.35 25.99 2,397 18,314 29.07
Guilford___ . , __ 43,924 8.66 65.35 25.99 2,397 18,314
Henderson _ 6,160 47.97 22.71 29.32 839 3,696 25.49
Granville. _ 1,300
3,994
866
57.50
33.02
60.87
14.27
36.46
10.35
28.23
30.52
28.78
228
339
272
1,018
1,893
785
Vance.. ..
Warren
Hickory 14,953 16.83 71.79 11.39 2,358 7,069 39.89
Catawba 14,953 16.82 71.79 11.39 2,358 7,069
Lexington-Thomasville.. .. 12,166 17.55 58.57 23.89 1,807 6,045 35.60
Davidson . 12,166 17.54 58.57 23.89 1,807 6,045
Raleigh 19,014 35.22 27.32 37.46 3,271 14,118 37.80
Franklin _ 1,284
15,036
2,694
61.13
21.40
60.79
10.88
35.28
13.15
27.99
43.32
26.16
530
2,342
399
1,139
10,896
2,083
Wake
Johnston
Reidsville-Spray.. 11,977 34.77 39.94 25.29 2,405 6,731 36 55
Caswell. . . 203
11,774
70.86
26.19
4.14
48.45
25.00
25.36
8
2,405
371
Rockingham 6,360
Rockingham. 11,442 33.08 36.39 30.53 2,419 7,209 33 49
Anson 2,025
6,080
3,337
46.08
20.09
43.18
21.37
41.05
44.76
32.55
38.86
12.06
348
1,202
869
1,439
3,907
1,863
Richmond
Scotland
Rutherfordton 7,364 29.87 43.29 26.83 1,204 4,181 »
Rutherford.. 7,364 29.88 43.29 26.83 1,204 4,181
Salisbury 11,775 16.70 36.45 46.85 1,246 8,507 30 16
Davie 1,608
10,167
41.44
12.34
34.31
36.82
24.25
50.84
271
975
1,036
Rowan 7,471
San ford 6,283 29.84 31.68 38.48 1,743 4,598 36 12
Lee 2,645
3,638
35.04
25.97
34.64
29.48
30.32
44.55
1,020
723
2,144
Moore 2,454
Shelby 8,743 34.34 39.31 26.35 652 4,203 29 57
Cleveland 8,743 34.34 39.31 26.35 652 4,203
Statesville. _ ... 11,005 27.48 57.31 15.20 3,293 6,636 47 68
Iredell 11,005 27.49 57.31 15.20 3,293 6,636
Winston-Salem. 33,354 6.79 57.24 35.97 811 12,444 23.29
Forsyth 33,354 6.79 57.24 35.97 811 12,444
Coastal Area... 114,076 45.74 27.41 26.85 44.180 91,126 41.23
Elizabeth City. 7,330 35.79 26.82 37.39 3,102 6,775 43 50
Camden 14
2,214
150
232
97
56.43
48.54
54.73
19.79
64.02
1.14
44.51
7.75
11.24
4.63
42.43
6.95
37.52
68.97
31.35
8
1,461
26
99
8
139
1,838
249
842
241
Chowan
Currituck
Dare
Yates.
Winter, 1945 THE U. C. C QUARTERLY PAGE 25
ESTIMATE OF MAXIMUM UNEMPLOYMENT IN FIRST POST-WAR YEAR—NORTH CAROLINA-(Con)
• Based on Complete Demobilization and simultaneous conclusion of War in European and Pacific Areas.
1 Based on ratio of employment in this category in 1940 to total labor force in 1940.
2 Total increase in covered employment from 1940 to 1943.
' Actual percentage 103.58.
* Actual percentage 31.28.
8 Actual percentage 83.44.
8 Actual percentage 198.98.
' Actual percentage 125.60.
8 Declined from 1940.
1 Coverage not comparable because of shift in area served.
Average
Covered
Employment
1943
Estimated Distribution Releases
Fbom Military Service
Estimated No.
Workers Released
From Covered
Employment 1945 •
Total Estimate
Non-Agricultural
Unemployment
Ratio to 1940
Percentage of Total From Non-Agricultural
Agriculture
Covered
Employment Other
(923028)
4,270
353
17.28
52.02
46.91
12.11
35.81
34.87
1,499
17
3,206
260
13,036 42.07 24.94 32.99 851 7,886 24 07
7,685
3,748
422
1,181
19.72
49.91
62.56
69.80
33.24
29.14
8.83
7.95
47.04
20.95
28.61
22.25
a
500
82
209
4,190
2,296
416
984
Hoke...
Goldsboro 7,515 52.51 22.35 25.14 2,544 5,839 25.15
1,048
6,467
67.42
43.14
7.59
31.65
25.49
25.21
318
2,226
1,191
4,648
3,075 52.53 14.81 22.66 86 2,066 18.94
Pitt 3,075 52.53 14.81 22.66 86 2,066
4,170 50.81 18.74 30.45 1,013 3,081 29.97
25
4,145
80.42
42.34
0.52
23.98
19.06
33.68
s
1,013
184
2,897
Lumberton ..: 6,377 57.01 18.34 24.65 1,803 5,015 32.95
1,977
4,400
52.35
58.29
22.41
17.21
25.24
24.50
564
1,239
1,335
3,680
11,751 46.19 33.57 20.24 7,231 11,632 73.74
Carteret 1,020
6,912
56
4,594
169
34.23
32.79
70.08
68.36
53.10
17.34
67.21*
1.09
31.64"
6.27
48.43
28.83
40.63
219
2,543
21
4,375
73
1,672
4,325
269
4,894
472
Jones
Onslow
Pamlico.
Roanoke Rapids 9,291 46.10 29.18 24.73 1,242 4.571 24.68
Halifax. 7,370
1,367
564
39.10
50.85
62.24
39.52
19.66
7.41
21.38
29.49
30.35
943
216
83
3,240
751
580
Hertford
Northampton
Rocky Mount 10,412 45.96 28.67 25.37 1,605 5,525 26.99
Edgecombe 4.253
6,159
43.27
48.15
24.49
32.09
32.24
19.76
410
1,195
2,255
Nash 3,270
Washington .. _ . 5,678 63.57 16.49 29.94 926 4,651 25.49
Beaufort.. 1,988
812
1,325
118
1,436
46.76
61.79
100.00
57.31
36.21
33.70
16.68
8.20
17.30
9.51
38.83
26.56
30.01
25.39
44.28
27.47
281
239
222
a
184
1,839
777
894
261
880
Bertie
Hyde
Martin
Tyrrell...
Wilmington 32,589 33.90 49.26 16.84 23,318 31,494 100.00
364
1,898
29,714
613
47.05
61.32
6.27
60.99
8.33
13.69
93.73'
7.66
44.62
24.99
31.35
13
194
21,905
206
917
1,606
27,257
714
Cnliitnhns
New Hanover
Pender ,
Wilson . 3,852 44.82 20.13 35.05 459 2,591 25.55
Wilson 3,852 44.82 20.13 35.05 459 2,591
Out-of-State... ._ 14,905
PAGE 26 THE U. C. C. QUARTERLY WINTER, 1945
U. C. C. Operations
1945 TAX SAVINGS TO EMPLOYERS OF 8,479 active accounts, 1,592, or 19 percent, have been
FOUR AND ONE-HALF MILLION DOLLARS paying contributions for less than three years and
consequently were ineligible.
Because of rate reductions allowable under our While there is no present basis for estimating the
state law, North Carolina employers will save over effective average rate for 1946, it appears likely,
four and a half million dollars this year. The tabu- should payrolls remain at their present level and no
lation of employer accounts which will benefit by the severe cut-backs occur to increase the claim load,
plan of experience rating shows that 5,022 em- that the average rate for 1946 may fall to 1.5 per-ployers—
or nearly three-quarters of all accounts cent> producing savings to employers of approxi-which
could be considered for rate reduction—will mately $8.9 millions. '
share in an estimated saving of $4,596,012. Because The classification of employer accounts for ex-of
rate reductions, the average effective rate of pay- perience rating in 1945 listed 8,479 active reserve
roll tax supporting the unemployment compensation accounts, of which 1,592 were not rated because of
fund will be 2.08 percent for this year, instead of shortness of operation under the law. Of the 6,532
the standard rate of 2.7 percent. accounts rated, 5,022 received reduced rates. The
The largest group to effect a saving are those total number of accounts, both rated and unrated,
1,124 employers who will pay a rate of 1.39 percent which will pay at the standard rate of 2.7 percent
for 1945. Their payrolls, which average $105,000, during 1945 is 3,457. Seventy employers will pay
represent 15.9 percent of the total payroll. This more this year than in 1944, although all but seven
group will save $1,551,988 in 1945 or a third of the of them will do so at rates below the standard.
total saving. The number who will pay the maxi- There are 500 accounts with reserve overdrafts.
mum rate this year dropped from 4,402 in 1944 to The number of employer reserve accounts by 1945
3,457 for 1945, notwithstanding an increase in the rate classes is as follows:
number of experience rating accounts. The number , 7 . T7 .. „„ .. ' , _ . . m ..
,
„ . • , i • , ^ ^ «-, i Number of Units Effective Rate Percent of Total
of employers paying the minimum tax of 0.27 percent
g 479 2 08 100
of payroll for 1945 is 277, or 224 more than in 1944.
"" " —
An employer is eligible for consideration as to 755 25 8 9
rate reduction if contributions have been payable to 927 _. 2.13 10.93
his account for the three preceding years, but can 940 — !- 76 n- 09
obtain a reduction only if his reserve balance ex- '
695
"" {Q2 g^o
ceeds 2.5 percent of his payroll for the last three 304 65 3.59
years and is five times the largest amount of benefits 277 - ------ — 27 3 - 26
paid from such account within any one of the three
preceding years. Experience rating will have been COMPENSABLE AND
in effect in North Carolina for three years with the NON-COMPENSABLE CLAIMS
close of the present year While the annual decline Not aU CQvered workerg who become unemployed
in average rate has not been.Precipitate> employers and fi ,e claimg fm compensation are eligible for
have effected savings amounting to $7,000 000. This
benefits _ There are reagons fQr tM the mogt
is the difference between what they did pay and
important from a numerical point of view being an
what they would have paid if all tax contributions
insufficient amount of wage credits reported for the
to the Unemployment Compensation Fund were
claimant>s base.period year, that is earnings of less made at the standard rate of 2.7 percent of payroll. ,, ,, 81on . . • _ , A1 . • ^ K J than the $130 minimum requirement. Also, since a
During 1943, the first year experience rating was claimant's first week of unemployment is not com-
111 effect, 1,559 firms obtained a reduced rate and the pensable, it is necessary for the Commission to
average for the state was 2.63 percent. This pro- handle a considerable number of claims which do not
duced a net saving to employers of $448,251. Al- resuit in benefit payments.
most 20 percent of all active reserve accounts shared Initial ciaimS( although not compensable, are
in this amount, and 25 percent of all accounts which necessary to establish the claimant's benefit year, the
were eligible for classification. base-period year, and the amount of the weekly
In