THE U.C.C. QUARTERLY
VOLUME 3, NO. 3 SUMMER, 1945
Transportation on North Carolina Highways.
PUBLISHED BY
UNEMPLOYMENT COMPENSATION COMMISSION OF NORTH CAROLINA
THE U. C. C. QUARTERLY SUMMER, 1945
The U. C. C. Quarterly
Volume 3 ; Number 3 Summer, 1945
Issued four times a year at Raleigh, N. C, by the
UNEMPLOYMENT COMPENSATION COMMISSION OF
NORTH CAROLINA
Commissioners : Mrs. W. T. Bost, Raleigh ; Judge C. E. Cowan,
Morganton; C. A. Fink, Spencer; R. Dave Hall, Belmont;
R. Grady Rankin, Charlotte; Dr. Harry D. Wolf, Chapel Hill.
State Advisory Council: Capus Waynick, High Point, Chair-man;
Wiilard 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. Emil Rosenthal, Goldsboro; W. Cedric
Stallings, Charlotte.
A. L. FLETCHER Chairman
R. FULLER MARTIN Director
MRS. FRANCES T. HILL Editor
Cover illustrations represent typical North Carolina
industries under the unemployment compensation
program.
Cover for Summer 19Jt5—Transportation on North Carolina
Highways. Illustration from the N. C. Department of Con-servation
and Development. The operation of transportation
facilities comprises one of our most important industrial
enterprises. This issue of the Quarterly contains as its
feature an article on the development of our bus system of
transportation by the Traffic Manager of the Carolina Coach
Company, and two articles dealing with trucking. These are
the two most important branches of the transportation
system which are embraced by the Unemployment Compen-sation
program. The rail carriers have a separate unem-ployment
insurance program administered by the Railroad
Retirement Board.
Sent free and upon request to responsible individuals, agencies.
Organizations and libraries. Address: U. C. G. Informational
Service, Raleigh, N. C.
All material published in the U. C. C. Quarterly may be re-printed
without special permission.
CONTENTS
Colonel Fletcher 58
President Truman's U. C. Program, by A. L.
Fletcher 59
Facts Worth Knowing about Unemployment
Compensation 60
North Carolina's Economic Loss 61
1945 Amendments to U. C. Law 62
Social Insurance—Present Status, by Frank T.
DeVyver ._ 63
Cash Sickness and Disability Benefits 65
History Follows The Highways, by W. G.
Humphreys 66
Transportation Sketch, by Jay C. Steadman 68
Roll On, Motor Carriers 71
State Jobless Payments Low 73
Scientists of Duke and Three States Perfect
Growing of Turkish Tobacco, etc 73
Notes on U. C. C. Operations 75
New Benefit Formula
Trend in Funds Available for Benefit Payments
Veterans Who Work for Themselves
Industrial Shifts in Employment
North Carolina as "Liable" and as "Agent" State
Effect of War Production on Industry
Exhaustion of Benefit Rights
North Carolina Business Trends 79
Employer, Jr. 83
COLONEL FLETCHER
The re-appointment of Lt.-Col. A. L. Fletcher as
Chairman of the U. C. C. has been announced, and a
period of uncertainty as to pilotage of the agency has
ended. The action of Governor R. Gregg Cherry in
asking Colonel Fletcher to remain in command as-sures
experienced control during a difficult period in
the service.
Intermittently during the war the U. C. C. man-agement
has been disturbed as emergency drafts on
its important personnel occurred. During most of
this period, however, the seasoned and able director,
Dr. W. R. Curtis, or Chairman Fletcher himself was
with the agency. From the infra-mural view, the re-appointment
of Colonel Fletcher became more im-portant
when Dr. Curtis resigned recently to go to
Washington. It is likely that the services of the Un-employment
Compensation system will be tested
severely in the period immediately ahead of us, and
the agency should be shipshape against the day of
special pressure which partial or general demobili-zation
of Armed Forces will bring upon it. Exp 2-
rienced leadership is of special value now.
This may be an appropriate time and place to say
something more about the man who is Chairman of
the Commission. He is not so far from the age when
the public servant can retire with the feeling that
his period of service is naturally ended, but Colonel
Fletcher is a young man in physical vigor and in the
richness of his emotional and mental life. He has
a rugged inheritance. Son of a living and active
Baptist minister, native himself of Ashe County, an
area in which long life seems to be somewhat more
common than the average, Colonel Fletcher ca.me to
the beginning of the second World War, seasoned
veteran of the first, but competent to respond to a
new military call.
He has been a military man all of his adult life.
He has served as an officer in two great wars. Those
who served under him attest that he was a com-mander
of firmness and efficiency but one of ready
human understandings, and quick sympathies.
Colonel Fletcher graduated from Wake Forest
College and became a lawyer. He moved from news-paper
work with the Raleigh Times and then the
Durham Sun and the Lexington Dispatch into the
practice of law with his brother in Raleigh. About
that time he became a National Guardsman. He
served with his company on the Mexican border in
the fracas which briefly preceded the first World
War, and the war itself quickly thereafter drew him
into more serious military service. He went to
France as a Captain of his company, ending his brief
career as a practicing lawyer.
He never surrendered his affiliation with the
military forces. He was commissioned Major and
retained the rank and kept up his military contacts
as a National Guard officer.
Colonel Fletcher entered public service in civil
life after the war. He was Deputy Insurance Com-missioner
for some years, and then in 1932 was
elected State Commissioner of Labor. He held that
office in the period of the greatest adventure in re-forming
the American labor policy. Both in Raleigh
SUMMER, 1945 THE U. C. C. QUARTERLY PAGE 59
Lt.-Col. A. L. Fletcher
and in Washington, Colonel Fletcher's influence was
constantly operating in the interest of practical
social security measures of state and national gov-ernments.
He was a sane liberal in these matters
with his feet solidly on the ground. The soundness
of his judgment and the fineness of his spirit won
him recognition in national councils and resulted in
frequent drafts upon his time and energies. For a
while he served in the emergency days of NRA in an
important capacity with the national office of en-forcement.
He surrendered the State commissionership of
labor at Washington's call, giving up a work which
he loved and an office in which he had entrenched
himself solidly, by his policies winning the confi-dence
of both management and labor.
Colonel Fletcher's original identification with the
U. C. C. was a natural continuation of his service to
the State's industrial forces. He was appointed by
Governor J. M. Broughton as the successor to the
first chairman, Charles G. Powell. He has made a
good record in building up and maintaining the or-ganization
under trying conditions. The administra-tion
of the North Carolina U. C. C. compares most
favorably with that of the best operated of similar
state agencies. In his chairmanship he has worked
constantly for reasonable liberalization of statutes
and regulations under which the agency operates.
He has sought unchangingly to extend the benefits
of the agency to more North Carolina workers.
Colonel Fletcher possesses an unusual sense of re-sponsibility
in his public service. His fine combina-tion
of emotional concern for his fellow man and a
soldier-like sense of the importance of firm discipline
gives the U. C. C. the kind of commander it needs for
the emergency. He has indicated a desire to retire
after another year's service. Whether he retires
then or later, there can be little doubt of the wisdom
of the Governor in inviting him to stay on the job
for the tasks immediately ahead in U. C. C. manage-ment.
CAPUS M. WAYNICK,
Chairman, State Advisory Council, Unemployment
Compensation Commission of North Carolina.
President Truman's U. C. Program
By A. L. Fletcher, Chairman, U. C. C.
The recent recommendation of the President that
Congress provide unemployment compensation of
$25.00 a week, with a potential duration of 26 to 52
weeks for all eligible claimants, is not the first, but
a very important step toward complete federalization
of unemployment compensation.
Once attained, such a result would form the basic
argument for adequacy and uniformity which it
would be claimed could only be maintained through
Federal administration. Such a course does not look
to the inequities that would follow such a policy. The
fact that employees in all States would receive
weekly benefits based on the same schedule would
not make it equitable either between employes in
different industries or as between States producing
different types of products.
In States such as North Carolina, a large percent-age
of whose manufactures is confined to low grade
production where unskilled labor is essential to
profitable manufacture, the weekly benefit amount
would be raised to the point where extended idleness
would be encouraged.
No State interested in fair treatment to its em-ployers
and the protection of its funds against ex-travagant
benefit payments knowingly would adopt
a system whereby the weekly benefit payments
would exceed the average weekly wage of the covered
workers in that State.
The suggested course does not look to the fact that
many States through large rate reductions, if their
potential obligations be considered, have seriously
weakened their reserve funds, while other States
with more conservative rate reductions have built up
a reserve fund adequate to meet extreme postwar
conditions. While such funds are on deposit with
the Federal treasury, the employers and the workers
under a State-administered system have a vested in-terest
in such funds which they would lose under a
PAGE 60 THE U. C. C. QUARTERLY SUMMER, 1945
Federally administered plan ; for, under it, the funds
in a State which had an efficient system would be-come
available for the payment of benefits in those
States where the contribution rates of many em-ployers
had teen reduced to zero as a result of exten-sive
rate reductions. This would mean the payment
of benefits in those States out of funds contributed
by employers in other States who paid a higher rate
and where adequate reserves had been created.
Any schedule provided at the national level that
would pay benefits equivalent to half the weekly
wage in States with specialized industries and high
wage levels would produce payments high enough to
equal if not exceed the average weekly wage in
States engaged in low-grade manufacture and ser-vices
requiring semi-skilled or unskilled labor. This
could only encourage rather than prevent unemploy-ment.
It is unlikely that wages will maintain the war-time
level indefinitely. The tendency in most States
will be toward the pre-war level. It is not difficult
to foresee the effect upon unemployment if the aver-age
wage in North Carolina should return to the 1939
level of $17.44 with a weekly benefit amount of
$25.00. Nor is it difficult to estimate the effect up-on
moral tone of the labor force, especially seasonal
workers of which there are more than 30,000 in this
State who work in covered employment only for a
few weeks in the year, if the duration of benefit pay-ments
is extended from 16 to 26 weeks, or even to 52
weeks within the discretion of the Social Security
Board, as provided by the Wagner Bill.
The experience in this State has been that more
than 50 percent of our seasonal workers, particularly
those in the tobacco processing industry, draw the
maximum of 16 weeks benefits. Without some re-strictions
they would doubtless draw 26 weeks and
more if permitted to do so, especially since the bene-fits
provided by this Bill are on the average as much
as this class of worker consistently earns in non-cov-ered
employment.
For instance, a Negro woman, usually a household
worker, with two children, works for nine weeks
during the tobacco-processing season in a warehouse
at the minimum wage of 40c an hour on a 44-hour
week basis. Her earnings for that period of $158.40
would qualify her under the Wagner Bill to receive a
weekly benefit of $11.20, which she might draw (at
the discretion of the board) for 42 weeks, allowing
one week as a waiting period. This, together with
the wages earned during the nine weeks, would give
her an annual income of $628.80, or more than
$50.00 a month, which few workers in this group are
able to earn. By doing laundry work one day a week
for $3.00 she could, without reducing her weekly
benefits, increase her income to $63.15 a month and
remain idle five days a week.
This Commission shares the chagrin of all for-ward
looking people who had hoped for a moderate
liberalization of our State program by the last Legis-lature.
While our aims were not fully realized, some
progress was made in that direction by increasing
the level of benefit payments. As between the ultra-conservative
action of our Legislature and the ex-travagant
views of some of the Federal administra-tors,
the Commission is disposed to stand by our
General Assembly, with the fervent hope that our
next act toward liberalization will aim, instead of
paying more benefits to those now covered, to pro-vide
a reasonable benefit to all workers in subject
employment, whether the employer has one or eight
employees, a liberalization which not even the Fed-eral
Law now provides, although many State laws do.
It is entirely possible, therefore, that the adminis-tration
could better serve the ends of social security
by centering its efforts upon a national extension of
coverage to one or more employees rather than by
suggesting an immediate appropriation for the bene-fit
of war workers which would make the neglect of
this important segment of our labor force all the
more shameful.
FACTS WORTH KNOWING
ABOUT
Unemployment Compensation In North Carolina
More Than—
800,00 North Carolinians have protection
against wage-loss.
More Than—
$105,000,000 is available for benefit payments
when needed.
More Than—
10,000 employers pay the taxes that support
this fund.
More Than—
3,800,000 claims have been paid.
More Than—
300,000 individuals have received unemploy-ment
compensation checks.
More Than—
100 percent of covered workers currenly em-ployed
could be paid an average benefit amount
for the duration of 16 weeks.
AND
NATIONALLY
More Than—
Six billions have been accumulated in state
unemployment compensation reserves.
More Than—
18,000,000 workers could be supported by
these state funds with average benefits for
maximum durations.
NEVERTHELESS
More—
Workers in North Carolina are without un-employment
insurance protection than those
who have it—including workers for small firms,
for non-profit institutions, in government (state,
city and county) and domestic service, and farm
workers.
More—
In Benefits could be paid from the North
Carolina fund without endangering its solvency
in the postwar period, when the unemployed
may face more than 16 weeks without employ-ment.
Summer, i 945 THE U. C C QUARTERLY PAGE 61
Unemployment Compensation
Commission — Members of the
North Carolina Unemployment
Compensation Commission, ap-pointed
by Gov. R. Gregg Cherry,
meet with the governor in the capi-tol
at Raleigh. The governor is
seated and beside him sits Justice
M. V. Barnhill. Standing, left to
right: C. A. Fink, Spencer; A. L.
Fletcher, Raleigh ; R. Dave Hall,
Belmont; Dr. Harry Wolf, Chapel
Hill; Mrs. W. T. Bost, Raleigh, and
C. E. Cowan, Morganton. R. Grady
Rankin, Gastonia, was not present.
NORTH CAROLINA'S ECONOMIC LOSS
Should everyone of the 321,000 servicemen from
North Carolina be killed in action the loss would
be less in number than the state has sustained since
1930 by the migration of North Carolina workers to
other states, and the loss since April 1, 1940 has been
greater than for any other state except Oklahoma.
How can this be when the 1940 census gave an in-crease
over 1930 of 12.7 percent? Deduct the net
increase in population for the period from the excess
of births over deaths and you have the answer.
This exodus of North Carolina workers, which
was greatly accelerated by the war has been going
on since 1920, increasing progressively each decade.
These are human values. They represent a tre-mendous
economic loss. The investment in their
education and training through the years of their
non-productivity appears to have prepared them
only to take their places in the industrial progress of
other states in which North Carolina has no share.
Doubtless most of them have at one time or another,
perhaps many times, been on the registers of our
State Employment Service without finding a job. No
opportunity has been afforded them to use their
skills in the state which has been so solicitous for
their health, and their education, but which appar-ently
loses interest in them when they reach the
age of productivity and useful citizenship. It is hard
to believe that many of them left the state to find
a more agreeable climate, more congenial friends, or
hospitable neighbors. This would be difficult to do
if we may accept the judgment of non-residents who
tarry in their journey across our state.
There is only one reason for it; there can be but
one answer to it. The state, though committing it-self
to a policy of industrialization, has waited for
outside capital, brains and progressiveness to do the
job. The result is that virtually every major in-dustrial
development of the last two decades is in
foreign hands. And, in such achievement, in too
many instances, their foresightedness has so tied
up our material resources, in options, leases and
other operational agreements that little opportunity
in those particular fields for further development is
left for North Carolina capital, even if we had the
industrial acumen, aggressiveness and interest in our
kith and kin to employ it for the good of all.
We are not, however, entirely circumscribed. There
are many attractive fields as yet untouched. We
need to take a lesson from the farmer and the brood
of the larks in his wheat-field, to get rid of the in-cubus
of foreign controls, of propaganda advertising
for foreign capital, and to put North Carolina capital
to work where it will not only yield a dividend in
money, but no less in North Carolina talent, charac-ter
and citizenship.
North Carolina has a birth rate 76 percent higher
than England or Wales, and 19 percent higher than
the average of this country. Unless we are willing
to assume the responsibility here suggested, we may
expect to continue to educate and train our youth
for the benefit of other states. We may also expect
to continue to sell our agricultural and low-grade
manufactured products in an unprotected world mar-ket
and to buy with low-wage money its manufac-tured
goods at prices supported by protective tariffs.
With the removal of freight rate discrimination,
and with the industrial opportunities that lie im-mediately
before us neither of these eventualities
need be permitted in our postwar program.
S. F. Campbell, Chief
Bureau of Research and Statistics
Unemployment Compensation Commission
PAGE 62 THE U. C. C. QUARTERLY Summer, 1945
1945 Amendments to U. C. Law
The 1945 General Assembly devoted some of its
committee time to debating amendments to our un-employment
compensation law which affect some
million North Carolina workers—past, present and
future—and over ten thousand employers. A few
important changes were made.
BENEFIT FORMULA
A new benefit formula was adopted, replacing the
one formerly in the Law, under which North Caro-lina's
unemployment benefit payments have averaged
the lowest of any state in the country. This new
formula is designed to bring payments in this state
more nearly in line with those being paid to unem-ployed
workers elsewhere, particularly in view of
higher living costs. It is based on a detailed study
made by the Commission and was constructed with
regard to several factors. Among these was the de-sire
to produce an average weekly payment for total
unemployment bearing approximately the same rela-tionship
to 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 propor-tion
to earnings 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.
The Commission's study of alternate benefit
formulas showed that, even with severe and wide-
Benefit Schedule Which Became Effective
On March 13, 1945
COLUMN I COLUMN II
Wages Paid During Weekly Benefit
Base Period Amount
Under $130.00 Ineligible
$ 130.00 to $ 152.99 $ 4.00
153.00 to 178.00 4.00
179.00 to 207.99 5.00
208.00 to 239.99 5.50
240.00 to 275.99 6.00
276.00 to 316.99 6.50
317.00 to 362.99 ] __, 7.00
363.00 to 415.99 7.50
416.00 to 464.99 8.00
465.00 to 519.99 8.50
520.00 to 580.99 9.00
581.00 to 649.99 9.50
650.00 to 727.99 10.00
728.00 to 788.99 10.50
789.00 to 853.99 11.00
854.00 to 923.99 11.50
924.00 to 999.99 12.00
1,000.00 to 1,081.99 12.50
1,082.00 to 1,169.99 L 13.00
1,170.00 to 1,265.99 : 13.50
1,266.00 to 1,370.99 14.00
1,371.00 to 1,485.99 : 14.50
1,486.00 to 1,611.99 ; 15.00
1,612.00 to 1,663.99 15.50
1,664.00 to 1.715.99 16.00
1,716.00 to 1,767.99 16.50
1,768.00 to 1,819.99 17.00
1,820.00 to 1,871.99 17.50
1,872.00 to 1,923.99 18.00
1,924.00 to 1,975.99 18.50
1,976.00 to 2,027.99 19.00
2,028.00 to 2,079.99 19.50
2,080.00 and over 20.00
spread post-war unemployment in North Carolina,
the unemployment compensation fund could finance
benefits at the new rates and still have a fully ade-quate
balance to meet all potential liabilities. The
new benefit formula carries a minimum weekly pay-ment
of $4.00, a maximum weekly payment of $20.00,
allowing for a maximum duration of 20 weeks. Un-der
this plan, about half of North Carolina payments
should be between $10.00 and $15.00 ; whereas in the
past over 80 per cent of all weekly benefits paid have
been less than $10.00 in amount.
. However, the Legislative committees vetoed the
proposal to extend maximum duration from 16 to 20
weeks.
VETERANS
A new definition of "veteran" and further provi-sions
regarding veterans' benefit rights were made
part of the Law, in order to preserve and carry for-ward
the insurance protection of those who had
established wage credits available. It was considered
that regardless of provisions made by the Federal
Government for unemployed veterans, the State also
has an obligation of its own to those whose employ-ment
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. Where a
veteran, by means of subsequent earnings, estab-lishes
a new set of wage credits to his account prior
to his unemployment, he is allowed to choose whether
to draw compensation against these or against his
previous "frozen" wage credits.
The general effect of the amendment is to extend
the period of time during which veterans may draw
unemployment compensation to two years beyond
the date of exhaustion of their readpustment al-lowance
rights. Furthermore the maximum dura-tion
of benefits under the "freezing" provision was
extended from 16 to 20 weeks. This means that a
qualified veteran with "frozen" base year credits
yielding a $20.00 weekly benefit amount, may, if un-employed
for 20 weeks after using up his federal re-adjustment
allowances, receive $400.00 from the Un-employment
Compensation Fund.
TOTAL AND PARTIAL UNEMPLOYMENT
The amended law defines total unemployment
as: "An individual shall be deemed totally unem-ployed
in any week with respect to which no wages
are payable to him and during which he performs
no services." This means that if a claimant has any
earnings with respect to any week, he is not totally
unemployed but is partially unemployed. Partial un-employment
is defined as : :"An individual shall be
deemed partially unemployed in any week in which,
because of lack of work, he worked less than 60 per-cent
of the customary scheduled full-time hours of
the industry or plant in which he is employed, and
with respect to which the wakes payable to him are
Summer, 1945 THE U. C. C. QUARTERLY PAGE 63
less than his weekly benefit amount plus two dollars."
This means that if a claimant has earnings with re-spect
to any week during which his scheduled work
hours are reduced to less than 60 percent of full-time,
that such earnings must be less than his
weekly benefit amount plus $2.00 before he can be
considered partially unemployed. It also means that
all earnings of claimants must be considered in de-termining
their eligibility for partial benefits.
SEASONAL UNEMPLOYMENT
A new "seasonal" provision has been inserted in
the Law which somewhat simplifes the method of
determining a seasonal worker and of computing the
benefit rights of such workers. By eliminating the
requirement of an offer of work from season to sea-son,
this new provision should make it easier for em-ployers
to qualify as "seasonal" employers.
The purpose of the provision is to limit the bene-fit
rights of workers for seasonal employers to the
period which is established as the "season" for such
particular employers. This means that an individ-ual's
claim for benefits will be limited to the seasonal
period if he has worked only for an employer who,
because of the nature of the business, has been
listed by the Unemployment Compensation Commis-sion
as a seasonal employer. A claim for benefits
which is based on wage credits builts up solely from
seasonal employment, thus becomes compensable
only during the period established for the seasonal
work.
However, if the claimant has some wage credits
reported to his account within his base period, that is
within one of the last two years, which are from an
employer whose business is non-seasonal, he may be
eligible to claim compensation for unemployment in
the off-season against such non-seasonal credits.
CONTRACTORS AND SUBCONTRACTORS
The general effect of another amendment is to
consider together for liability purposes under the U.
C. Law the principal contractor and any subcontrac-tor
engaged in employment which is a part of the
usual trade, occupation, profession, or business of
such contractor. Each contractor and subcontractor
are to report and be liable only for contributions on
the wages of their own respective workers. Former-ly,
the Law held primary contractors liable for taxes
on sub-contractors' payrolls. The ultimate effect of
the 1945 amendment is to transfer the responsibility
for contributions for workers of sub-contractors to
the sub-contractors themselves and relieve the prin-cipal
of responsibility for such payments and re-ports.
Where liability is extended to a sub-contrac-tor
through the contractual relationship, the number
of workers in his employ is not a material factor. He
is a liable employer if he has one or more workers.
CASUAL LABOR
By means of another section added to the U. C.
Law, casual labor not in the course of an employ-ing
unit's trade or business is now specifically exempt
from the unemployment compensation tax. This
exclusion, however, does not extend to labor which is
occasional, incidental, or irregular, when it is of a
nature that promotes or advances the trade or busi-ness
of the employer.
Social Insurance—Present Status
By Frank T. DeVyver, Professor of Economics, Duke University, and Supervisor,
North Carolina Merit System Council
A talk delivered to the Durham Branch of the American Association of University Women in May I!)'/-'
The present Social Security Law contains a great
many miscellaneous provisions for meeting various
social problems. There are, for example, provisions
for the care of crippled children, the care of the
blind, and the care of the dependent aged through
federal and state cooperation, and there is another
section which provides for the appropriation of
money for public health. These provisions are not
truly social insurance, and I, therefore, will not dis-cuss
them this evening but will limit myself to dis-cussion
of the unemployment compensation and the
old age retirement features of the law.
UNEMPLOYMENT COMPENSATION
Actually the federal social security law makes no
provision for the payment of unemployment com-pensation.
The law does, however, have provisions
which tempt the states into setting up adequate un-employment
compensation laws. All employers of
eight or more in the United States, with certain ex-ceptions,
are subject to a tax of three percent on
their pay roll. Pay roll is described as all wages and
salaries up to and including $3,000 a year. The law
further provides that if a state passes a compensa-tion
law satisfactory to the Social Security Board,
the employers may subtract 90 percent of their
liability to the Federal Government. The social
security law establishes certain basic requirements
for the state laws designed to insure minimum
standards and the protection of the tax money for
use in the payment of unemployment benefits. One
of the necessary provisions for a satisfactory state
law is that the employees of the state compensation
commission be selected through a merit system.
If a state does not have a satisfactory law or if
it does not administer its law properly, the employers
of the state are liable to the Federal Government for
the entire 100 percent of the tax, but no unemployed
person in the state receives any benefits. Such pro-visions
have meant that all of the states have passed
unemployment compensation laws. In practice',
therefore, the employers of the nation pay .3 percent
of their tax liability to the Federal Government and
approximately 2.7 percent to the state government.
PAGE 64 THE U. C. C. QUARTERLY Summer, 1945
I say approximately 2.7 percent because many of the
states have what is called "experience rating," mak-ing
it possible for an employer who has very little
unemployment to get his tax rate for a particular
year reduced.
Out of the funds which the Federal Government
collects, appropriations are made to the Social
Security Board which allocates the money to pay all
of the administrative expenses of the state unem-ployment
compensation agencies.
Because of their common origin, state laws are
very similar. All of them provide for payment of
approximately 50 percent of a man's earnings if he
is unemployed through no fault of his own and if
the employment service cannot find him a job. All
of them provide for a maximum payment of $15 to
$22 a week and for a limitation on the number of
weeks the benefits are to be received. All of the laws
provide for disqualification if the worker is out be-cause
of a strike and for disqualification for vary-ing
lengths of time if the worker is discharged for
cause.
The federal-state cooperation in carrying out these
laws has meant that the states have been able to ex-periment
with different administrative procedures
and with different provisions regarding the payment
of benefits. Various problems of interstate coopera-tion
for the payment of benefits have been worked
out satisfactorily. In my judgment, there is nothing
fundamentally wrong with the individual state sys-tems
under some federal jurisdiction to insure the
certain amount of uniformity. I feel sure, never-theless,
that during the next period of severe unem-ployment,
if if does not happen before, the Federal
Government will provide a uniform system. The ac-tion
of the North Carolina Legislature at its last ses-sion
in turning down most of the moderate amend-ments
proposed by the Commission for the improve-ment
of the law, particularly as to extended coverage
and duration, is typical of the type of action which
may be expected from some of our state legislators.
This refusal to improve the laws substantially is
practically asking for federal interference.
OLD AGE & SURVIVORS INSURANCE
That part of the social security law which is usual-ly
referred to as social insurance and which most
people seem to think of as social security has to do
with old age retirement. These old age retirement
provisions should be clearly distinguished from the
old age assistance. Old age assistance is a provision
whereby the Federal Government matches the pay-ments
which a state government makes up to $20
a month for dependent men and women over 65 years
of age. Sometimes these payments are called pen-sions.
They are based entirely upon need and vary
in amount from state to state and even from indi-vidual
to individual. The old age annuities are a
matter of insurance and, therefore, a matter of right.
They are entirely federal and the amounts paid vary
according to the previous earnings and according to
the number of dependents.
The law provides that every employer in the
United States, with specified exceptions which I will
explain later, must pay 1 percent of his pay roll to
the Federal Government, and he* must collect 1 per-cent
of every individual's salary or wage which he
pays up to $3,000 from the employee and pay that to
the Federal Government. Each worker receives a
social security card and the tax money paid by his
employer for him and that paid by his employer is
credited to the individual worker's account. When
a worker reaches the age of 65, he is eligible to retire
and receive the annuity payment from the Social
Security Board. If he does not retire, he does not
receive the annuity until he does stop work. The
amount of this annuity varies with the length of time
that the man has worked in covered employment
and the amount of his earnings during that period.
There is a rather complicated formula for establish-ing
this basic payment of annuity. Because this is
social insurance, the law makes further provision for
extra payments if there are dependents, either old or
young. If a man's wife is 65, the so-called primary
benefit is increased by one-half. If a man has
children under 18, a specified proportion of the bene-fit
is paid for each child below that age. The law
makes the further provision that if a man dies before
reaching the age of 65, his wife will receive a bene-fit
payment so long as she has children under 18 or
as soon as she reaches the age of 65.
EXCLUSIONS
Those excluded from the provisions of this law
are employees of any division of government, domes-tic
help, agricultural workers, and employees of
eleemosynary institutions. These exclusions mean
that all teachers are omitted; all employees of hos-pitals
and universities are excluded ; and, most im-portant,
all independent business men, such as the
owner of a small store or service shop.
It seems to me that gradually this law must be
extended to cover those not now included. There are
very real administrative difficulties connected with
any attempt to cover domestic servants or farm
workers, but the old Negro servant will need the re-tirement
allowance just as much as the person work-ing
in the tobacco plant. It is true that including
employees of education and charitable institutions
would increase the costs of operating these institu-tions
but there is certainly no logical reason why a
stenographer at a cotton mill should be included and
a stenographer at Duke University excluded. Fed-eral
employees have a separate retirement system
which is probably adequate. North Carolina and
many other states have retirement systems, but the
county and state workers have no organized way of
providing a retirement annuity except through
private insurance. Independent merchants and busi-ness
men should have some way of getting into the
system if they so desire.
SICKNESS INSURANCE
One of our greatest lacks in the social security
program is a provision for health insurance. Some
of my friends and colleagues at Duke University re-fer
to this as socialized medicine. I do not have the
time tonight to discuss the pros and cons of the pro-posed
addition to the social security program, but I
do want to point out that there are two phases of
SUMMER, 1946 THE U. C. C. QUARTERLY PAGE 65
health insurance. One of these would involve the
setting up of medical care on an insurance basis.
This is the type of thing to which many in the medi-cal
profession are opposed. The other aspect of so-called
health insurance provides a method for the
continuation of part of a man's income if he is in-capacitated
through non-industrial sickness or acci-dent.
Failure to insure this risk is the greatest lack
in our present social insurance program. Private in-surance
in this field is not adequate because it is too
expensive for the average worker.
It seems to me that our social security program
could well be expanded to include temporary disa-bility
insurance and that the law be amended to pro-vide
for the payment of the annuity before 65 if the
worker is permanently disabled. We may not have
all of the necesssary actuarial facts on such disa-bility,
and it would not be something which should be
rushed into, but at least some start should be made
in the direction of expansion.
CONCLUSIONS
I have already stated earlier that it seems to me
that the present federal-state plan for administering
unemployment compensation can work although I
have expressed the doubt that state legislatures will
improve their unemployment compensation laws
sufficiently. Unless the states stay pretty close to-gether
on their laws and keep them modern, the Fed-eral
Government may yet have to provide uniform
administration for a uniform law.
In my judgment, the centralized administration of
the old age annuity plan is the most satisfactory
way of carrying out the provisions of that part of the
law. The administration of a law such as the old
age annuity part of the social security program can
best be done by central organization. Most of the
calculation and record keeping are done by machin-ery.
To be sure, field offices such as we have in
Durham are necessary to keep the public informed
and to help even the most intelligent old worker fill
out the blanks necessary to get his money from the
Federal Government.
CASH SICKNESS AND DISABILITY BENEFITS
It is a familiar experience with the Commission's
claims-takers to receive claims from many appli-cants
who are unable to work, but fully believe they
are entitled to insurance benefits. This is a recurring
illustration of one of the most important limitations
to the present unemployment compensation pro-gram.
Wage loss incurred for enforced idleness due
to economic reasons has been made compensable;
but the wage loss workers suffer during periods of
temporary idleness because of sickness or disability
has not. Appealed cases throughout the country are
largely concerned with the "able and available"
clauses in the state laws. An analysis of North
Carolina claimants during one week in 1943 indicated
that a quarter of them were workers either dis-charged
on account of illness, or physically unable to
take other work at the time. None of these could
be paid benefits.
The advisability of a cash sickness and disability
insurance program, paralleling unemployment com-pensation
and allied to it, has been recognized in
many quarters. It has been included in many of the
bills introduced into the national Congress, such
as the Wagner-Murray-Dingell Bill, proposing to ex-tend
the social security program by federal action.
Its promotion is the subject of a resolution adopted
by the Interstate Conference of Employment
Security Agencies. Its enactment into law has been
debated in many state legislatures,* studied by com-missions
appointed in others, and in one of these
states, Rhode Island, cash sickness and disability in-surance
has already become law, now in operation
over two years. In North Carolina, the State
Federation of Labor has gone on record as seeking a
similar law.
With medical care proposals, unemployment com-pensation
agencies are only indirectly concerned, but
in systems designed to provide wage-earners with
cash sickness benefits, unemployment compensation
agencies have a definite interest, since any such sys-tem
must closely parallel the unemployment com-pensation
programs. Considerations of economic
efficiency dictate that when and where there are both
systems, they be jointly operated, as in Rhode Island.
Administrative studies on this subject of sickness
insurance made by staff members for the Commis-sion,
indicate from a history of its development and
an analysis of current legislative proposals else-where,
the kind of program that might be considered
for North Carolina.
This would be a law, providing cash compensation
for unemployment in any week in which, because of
his physical condition, a worker is unable to perform
services for wages. A separate sickness compensa-tion
fund would be established from tax contribu-tions,
at a rate of no less than 1.5 percent, on work-ers'
wages up to $3,000 a year. Employers would be
responsible for withholding contributions from
wages and transmitting these to the fund. An
appropriation from the state for administrative costs
would be advisable. The program would cover em-ployees
of all employers subject to the Unemploy-ment
Compensation Law, and would be administered
by the Unemployment Compensation Commission.
Requirements as to waiting period, wage credits,
duration of payments, and probably also the benefit
schedule, as well as the manner in which claims are
filed and payments made, would follow unemploy-ment
compensation practice. Reasonable physical
examinations might be required for certification. A
policy would need to be established with regard to
maternity cases.
The trend of the times is toward the enactment of
*1939—California. Wisconsin and New York; 1940—
New York, Pennsylvania, Rhode Island, and South Carolina;
1941—California, Massachusetts, New York, and Rhode Is-land;
19 42—New York and Rhode Island; 1943—Washing-ton,
New York, New Hampshire, Massachusetts, Maine,
Illinois, Connecticut, and California; 1944—New Hamp-shire,
New Jersey, and New York.
PAGE 66 THE U. C. C. QUARTERLY SUMMER, 1945
such laws. Government, either state or federal, is
being required to do more rather than less to under-write
human hazards, destroy human fears, com-pensate
human wants. The decision, however, as to
whether there shall be a federal, or state systems
of sickness insurance, is still open. For the present,
in the absence of federal legislation, state govern-ments
have the opportunity to investigate the possi-bilities
of sickness benefit insurance for workers on
their own initiative. It has been one of the principal
themes of North Carolina's Governor Broughton,
that if the states are to maintain their sovereignty in
administering public programs, they must recognize
and seize such opportunities.
History Follows The Highways
By W. G. Humphreys, Traffic Manager, Carolina Coach Co.
When our forefathers slashed the first wagon
roads through the wilderness, little did they dream
that they were blazing the trail for a form of trans-portation
which would vitally serve America in a
great world war. But as their axes carved path-ways
for pioneer travel, they also laid the foundation
for America's present system of motor bus lines.
Along these primitive roads, settlers cleared land
for their farms. Here they built their first mills and
blacksmith shops, their schools, their churches and
homes. For generations these roads were little more
than rutted trails but, in a period of living that was
geared to the tempo of the stagecoach and the
leisurely pace of the horse and buggy, they served
the needs of the times.
As pioneer communities grew and prospered, as
natural resources were tapped and trade increased,
new roads reached out and still other communities
were born ... a pattern that has been followed in
the progress of our country even to this day.
Then, at the turn of the century, a strange con-traption
called the "Gasoline Buggy" chugged into
the scene. With it came new vision and a new era of
expansion. Thousands of miles of improved and
hard-surfaced roads began to stretch through the
country. On these highways, just about 26 years
ago, the first motor buses made their appearance.
These first buses or "stages" bore but little re-semblance
to the luxurious motor coaches of today.
Modern Bus Terminal.—Station at Raleigh.
Like most enterprises in this country, bus transpor-tation
started its climb to success the hard way. It
began as a venture by men who had both courage
and resourcefulness. Usually, their equipment con-sisted
of converted automobiles, often cut in two and
lengthened, with a tell-tale sag in the middle The
owner was also the driver, the ticket agent, the dis-patcher,
and the maintenance man. His working
capital was the silver he carried in his pocket.
But with more and more communities adopting
highway programs and pulling "out of the mud",
with millions of people eager to use the new high-ways
being built, bus transportation began a period
of growth that has never been equalled by any other
form of public travel. Each year, new and improved
buses were developed and placed in operation. New
stations were erected, new companies were formed,
new standards of comfort, service, safety and con-venience
were achieved.
Soon, the chief problem for bus lines was to keep
pace with demand. People everywhere found that
this new transportation fitted their needs. It car-ried
them to and from profitable employment, to
recreation centers and to the nation's scenic wonders.
The unequalled economy of bus transportation
opened a new world of travel to those of even the
most modest means.
Filling a fundamental need of all the people, bus
transportation has continued to grow with each pass-ing
year. With public support, it has surmounted
all obstacles in the path of its advancement With
the people it serves, it has enjoyed long periods of
national prosperity . . . with them, too, it has met
the trials of national depression and emerged even
stronger for the experience.
Sunday, December 7, 1941 ! The Axis struck
!
Swiftly, America settled down to the grim job ahead.
That very afternoon, military authorities called on
the intercity bus lines to assist in getting men to ac-tion
posts. Selected for this task because of their
ability to go anywhere, everywhere, over any route,
great fleets of buses rolled down the highways to
mobilization centers. Aboard these buses artillery-men
were rushed to gun emplacements in secluded
spots along our Pacific Coast. Other troops were
dispatched to shoreline cities and towns. Coast
guards were hurried to patrol duty along stretches of
remote and unguarded beach.
That was the first day of wartime service for in-tercity
motor buses. And here was the beginning
SUMMER, 1945 THE U. C. C. QUARTERLY PAGE 67
of a new era in the annals of motor bus transporta-tion.
Everyone connected with the industry, drivers,
mechanics, supervisors, agents, executives, all
realized that the days of carefree travel were over
for the duration. Clearly, they saw that the great
transportation system they had built in peacetime
would now become an indispensable instrument of
war—that the intercity bus lines must take the lead
in keeping our highways at work for victory.
And just as peace-loving people all over America
quickly adapted themselves to the ways of war, so
did the bus lines. Faced with the greatest transpor-tation
problems in their history, bus lines that form-erly
competed with each other, loyally joined forces
in the common cause. Working and planning to-gether,
they changed a great peacetime transporta-tion
force into one geared to the needs of a nation
whose very existence was challenged.
Today, most bus passengers are making trips
essential to the conduct of the war. There are fewer
long distance journeys. 32 miles is the average dis-tance
traveled—and as passengers get off at various
stops along the highways, new passengers get on.
Bus passengers traveling more than 250 miles repre-sent
approximately four percent of the total passen-gers
carried.
Without question, all public carriers have received
their greatest increase in wartime passenger traffic
as a result of the curtailment of civilian automobile
travel. In normal times, about eighty-five per cent
of all people traveling from one city to another did
so by private automobile. Transfer of millions of
these passengers to public transportation is taxing
the capacity of bus and rail carriers alike.
Actually, the total volume of wartime intercity
passenger traffic is so great that it cannot be
handled by any one form of public transportation.
But, working together, the bus lines and the rail-roads
are succeeding in preventing a transportation
breakdown that might seriously affect the move-ment
of manpower and the outcome of the war.
In the five years preceding Pearl Harbor, the
average number of buses manufactured yearly for
the intercity bus industry was 2,277. During 1941,
the industry had experienced a tremendous expan-sion
of traffic and foresaw that the trend would
continue. Therefore, plans were made and materials
were assembled to permit the manufacture of 3,968
intercity buses in 1942. In 1943, however, no new
intercity buses were produced and, as a result, the
1942 production had to take care of two years' re-placement
needs.
Because of the lack of sufficient new equipment,
the nation's bus operators have rebuilt and pressed
into service hundreds of retired buses. Outmoded
buses that formerly served only on week-ends of
heavy travel and were driven not more than 10,000
miles a year now are being operated 75,000 to 100,-
000 miles annually.
The Honor Rolls so proudly displayed in bus termi-nals
throughout the land reflect the contribution
in manpower being made to the armed forces by the
intercity bus lines. The industry provided a great
reservoir of experienced transportation personnel.
Standard Equipment.—This bus carries 41 passengers.
Three-fourths of all bus line employees are drivers or
garage workers, and they are particularly well quali-fied
to render service in today's mechanized warfare.
Other bus line employees know the intricacies of dis-patching,
routing and scheduling.
Many of the drivers and mechanics who kept buses
rolling just a few months ago are now manning
tanks and "half tracks". Others are strengthening
the supply lines to invasion points. Still others are
working as skilled mechanics in defense plants on
the home front. Thus, today, the vital wartime
needs of the nation are being served in many ways
by the specialized transportation knowledge of bus
line men who served highway travelers so well in the
past.
The bus lines' operating personnel must be able-bodied,
trustworthy, and reliable. Selected only after
rigid tests to determine these natural qualifications,
both drivers and mechanics are given the added
benefits of thorough training. Courses in public
safety are repeated time and again as members of
the operating personnel learn elementary mechanics,
tariffs and rates. For a driver, particularly, this
training is most intensive because it is recognized
that once he gets behind the wheel of an intercity
bus, he is literally "The Captain of the Ship". The
safety and comfort of a great number of people
are in his hands.
While the intercity bus lines' honor rolls tell a
story of patriotism, they also give an indication of
the manpower problems encountered in maintaining
and expanding their operations to serve wartime
needs. The loss of any driver with a safety record
Colored Draftees assemble for trip to camp.
PAGE 68 THE U. C. C. QUARTERLY SUMMER, 1945
of hundreds of thousands of accident-free miles
obviously means much more than the need to replace
an ordinary employee.
From the early days of the intercity bus industry,
proper maintenance has been a paramount consid-eration.
Now, in time of war, with replacement
parts extremely difficult to obtain, preservation and
conservation are more important than ever. Ac-cordingly,
every sound practice of motor bus mainte-nance
is being given the most intensive application.
Among the many steps taken to conserve critical
metals was the further development of the "metal-lizing"
process within the industry. This is a method
of building up worn surfaces of used parts to a point
where they can be re-machined to their original
size. Pistons, crankshafts and many other parts
previously discarded when a certain point of wear
was reached are now reclaimed through this process.
The success of the bus industry in utilizing
"metallized" parts and materials has attracted wide
attention. In fact, the Automotive Branch of the
War Production Board requested samples of the in-dustry's
"metallizing" work for display purposes and
such a collection is exhibited by that government
agency in Washington.
Just as the industry advanced the process of
"metallizing", so has it developed new welding
techniques. Crankshafts and axle shafts—to name
two parts previously considered unsuitable for re-use
when cracked or broken—are now welded with
saisfactory results.
The Intercity Bus Industry is more than essential
in the war effort—it is irreplaceable. In step with
wartime economy, leaders of the industry imposed
many self-regulating measures early in the war. The
important role buses were to play in the war effort
quickly became evident to men of the industry when
they saw terminals crowded with servicemen, war
workers and others whose lives were devoted to end-ing
Axis aggression. Bus operators have done every-thing
in their power to assure accommodations for
these war-essential travelers. Complying with orders
from Office of Defense Transportation, sightseeing
tours were eliminated. Fast express schedules and
other non-essential services were discontinued. Runs
carrying less than forty percent of full seating ca-pacity
were dropped so that equipment could be
pressed into use on busier routes. No phase of bus-line
operation has been overlooked in the drive to
increase the wartime efficiency of bus transporta-tion.
America will win this war. The days of care-free
peacetime travel will come again. Those days
will bring new comfort and convenience in bus travel,
and a host of new scenic wonders to explore on the
highways.
New streamlined and air-conditioned buses for
post-war service are already taking form on design-ers'
drawing boards, and in the minds of engineers.
The pilot model of Greyhound's post war bus, which
is being built by General Motors, is scheduled to be
on the road the early part of 1947. The pilot model
of Trailways post war bus, which is being built by
Henry Kyser, the man who did the impossible in
building ships, will be on the road by fall. These
two buses, pioneered by the two national highway
transportation organizations, are entirely different
in design and will offer the public a transportation
vehicle beyond their expectations. Plans are being
made for spacious new terminals and garages
throughout the country—a program of expansion
that will provide post-war employment for thou-sands.
With these new facilities, an hour's trip to
a nearby city or a transcontinental sightseeing tour
will offer added pleasures in travel.
When that time comes, the present difficulties
and inconveniences of wartime travel will be for-gotten.
Today, the intercity bus industry is devot-ing
its every effort to solving its part of the nation's
transportation problems in order to assure the
restoration of our normal American way of life.
Transportation Sketch
Notes prepared by Jay C. Steadman, District Supervisor, Raleigh, N. C, Interstate Commerce
Commission, Bureau of Motor Carriers.
Man was the first method of transportation. He
used his feet for motivation and his arms, shoulders
and head for transporting things. To make his task
easier he used protection for his feet such as sandals,
then moccasins, boots and shoes.
King Solomon's Temple was a giant undertaking
in construction. 70,000 men were used for the pur-pose
of transporting the material used in its con-struction.
80,000 men were used in the adjoining
forests to cut and hew the timber used in the con-struction
of the Temple.
100,000 men were used in transporting the mate-rial
for the construction of the Pyramids. About
1,600 B. C. man began to use animals as beasts of
burden. About 1,500 B. C. there came into use the
sedan chair. It was carried by two men by means of
horizontal poles which passed through sockets fixed
at each side.
It is not clear as to when man conceived a wheel,
for motivation, but there is reference to wheeled
chariots in Babylonia as early as 300 B. C. It is
generally accepted that wheels first were used be-tween
4,000 and 1,500 B. C.
In the early ages when man had a heavy stone to
move he conceived the use of tree trunks for rollers.
These wooden rollers were placed in front of the
sledge and as the sledge was pushed forward they
continued to rotate the rollers, thus moving the
loads. It is believed that the thought occurred to
man to take two slices out of the tree trunk and
Summer, 1945 THE U. C C. QUARTERLY PAGE 69
attach it to the sides of the sledge, thus creating the
first wheels.
King Solomon had a unique method of obtaining
chariots. He would declare war on a neighboring
country, take its chariots and other loot, bring them
back home and sell them to his subjects for $250.00
each—making him the first used car salesman.
Coaches were introduced in England in the 12th
century, but it appears that the first over-the-road
long haul was made in England by wagon in 1564.
The maximum distance traveled was 15 miles a day.
It was not until 1634 that coaches for transporting
passengers became popular. This popularity was fol-lowed
by the levying of $25.00 taxes per coach yearly
by the Government.
From time to time complaints are made that the
big trucks are tearing up our highways. It appears
in Hawk's "Romance of Transport" that similar ac-cusations
were made in England in 1564 by those
charged with the responsibility of maintaining roads —that the weight of vehicles with their narrow
wheels were destroying the roads. The matter be-came
so heated Parliament passed laws requiring
larger wheels and as an inducement to comply, per-mitted
those vehicles with larger wheels to travel
over the roads toll free. Those who persisted in the
use of small wheels were fined. This reference stated
there was much evasion. Perhaps some operated
when inspectors were thought to be asleep.
In 1661 springs were used on coaches and in the
same year glass was put in the windows. Up to this
time the coach bodies had rested on the axles.
Imagine the comfort of a ride in such a vehicle
!
The first resilient tires were used on an Egyptian
chariot of 1400 B. C. The wheel had a triple tire
consisting of two inner rings of coarse leather and
an outer covering of dressed leather, laced in tension
and threaded by a thong. The pneumatic tire was
invented in 1945 by R. W. Thomson and first used in
England. It did not become popular until 1888 when
it was re-patented and revived by J. B. Dunlop.
The first steam locomotive was introduced in Eng-land
in 1804. The transportation costs in this period
were $5.00 per ton for 20 miles. It was not until
1825 that there was a common carrier rail service by
steam locomotive and this was in England.
In the infant country of America, for 150 years
after settlers established themselves on the Atlantic
Coast there was no effort to improve land travel
other than to improve old Indian trails or the turn-ing
of pack train trails into wagon roads. Most travel
was confined to North and South. The territory
west of the Atlantic Coast was travelled only by ad-venturers.
Until as late as 1806 the six million
people in America were contentedly visiting their
friends or moving about on business in flat boats,
dogsleds, stage coaches, wagons and canoes. To go
from the settled East Coast to such places as Losan-tiville
(Cincinnati), Ft. Dearborn (Chicago) or St.
Louis, took many weeks of weary travel and one
stood an excellent chance of losing his scalp.
It was about 1800 that pole boats came into use
in this country. In 1732 some enterprising young
man started a stage service between Philadelphia
and New York but his efforts were unsuccessful, as
were several others who made such attempts. It was
not until 1771 that a regular service was inaugurated.
The schedule was one and one-half days. In 1778 the
fare between Philadelphia and Susquehanna, Pa., a
distance of 66 miles, was $6.25. The passenger paid
for his own meals and lodging and not infrequently
assisted in pushing the stage out of mud holes.
In 1750 the pack horse train was the popular
method of transportation.
John Fitch invented and operated the first steam-boat
on American waters, in 1786. He built a second
steamboat and operated it on the Delaware River in
1787, but to Robert Fulton goes the credit of operat-ing
the first steamboat in regular service, which was
begun in 1807 between New York City and Albany,
160 miles, which was traveled in 30 hours. In 1811
steamboat service was inaugurated on the Ohio and
Mississippi.
In Hoboken, N. J., in 1824, John Stevens operated
the first steam locomotive built in America. The
first locomotive used in the United States for com-mercial
use was purchased in England and was oper-ated
on the Delaware and Hudson Railroad in 1829.
In Boston, Mass., in 1847, there was built the first
railroad car for commercial use.
In 1794 an Englishman named Street patented an
internal compustion engine, but the first practical
engine of this kind was built by a French engineer
named Lenoir in 1862. The internal combustion en-gine
up to this time had been burning turpentine and
illuminating gas. Col. Edwin Drake drilled the first
oil well at Titusville, Pa., in 1859 and not long there-after
we had gasoline.
In 1885 Karl Benz installed a 4-cycle gasoline
burning internal combustion engine on a tricycle and
then the auto became a reality. Benz later developed
a car he called a Mercedes, after his daughter. This
name is familiar to many. Chas. and Franklin
Duryea built the first American made car in 1892,
followed by Henry Ford in 1893, Haynes in 1894 and
Olds, in 1895.
The Duryea's set themselves up in business in
Springfield, Mass., in 1895, under the trade name of
Duryea Mtoor Wagon Co. and as far as it is known
this was the first sales agency for autos in this coun-try.
History tells, though, that the first auto sale
was made by Alexander Winton to Robert Allison of
a 2-passenger, 1-cylinder Winton, for $1,000. The
maximum speed of the vehicle was 10 miles per hour
and it had an iced cooled engine.
The AutoCar has the distinction of building the
first gasoline motor powered truck in 1899.
In 1901 the state of New York passed a license
tax law requiring the operators of horseless car-riages
to pay a fee of $1.00 for a license tag.
For for first 10 years of the 20th century, there
were only 8,000 trucks built. There are no records
of any sales of trucks until 1904, when there were
700 sold. During the first two years of World War
I only 99,000 trucks were manufactured. For the en-tire
four years of World War I only 546,437 trucks
PAGE 70 THE U. C. C. QUARTERLY Summer, 1945
were manufactured, while in 1941 there were 1,094,-
261 trucks manufactured. Trucking did not get
started in this country until about 1920. The regis-tration
for that year exceeded a million for the first
time. There was a gradual increase in registration
each year until 1941, which shows a figure of 4,911,-
500.
*
The first thought among most people is that the
preponderance of trucks are operated for hire. How-ever,
only 12.2% of the truck registrations are for-hire
trucks. The remaining 87.8% are divided as
follows: 21.4% farm trucks and 66.4% used in
commerce and industry. 56%. of trucks are owned
by persons with only one truck. 25%- of all trucks
are on farms and one-third of them are over 10
years old.
It was about 1930 when over-the-road common
carriers by truck got started. It is debatable as to
what caused the advent of the truck into the long-haul
field. Some are inclined to believe the depres-sion
of the 30's, which put so many people out of
work, played a signficant part. Everyone was re-trenching,
looking for the cheapest way to do every-thing.
The truck manufacturing companies had to
dispose of their trucks or curtail operations. Many
a trucking business was started on its way by some
truck sales manager letting a good prospect have a
truck to haul for hire and gambled on getting the
truck payments out of what was left after the
trucker had paid expenses. Very few people had any
confidence in the over-the-road trucks in the early
30's. The truckers had up uphill fight. Most of them
charged what they could get. As the business grew
men with transportation experience were sought.
About the only experienced transportation men
available were rail and boat employees. Therefore
the trend of charges made for services performed
were usually rail level rates.
There was no authority. Everyone charged what
he thought he could get and frequently did not
charge enough and consequently went broke. There
were literally thousands of truckers who started in
business and as soon as the truck was worn out or
wrecked were out of business, because they didn't
have enough business ability to make a charge which
would provide a fair profit.
There were rate wars between truckers. The
traffic managers of shippers played no small part
in these rate wars. Any person who is in the truck-ing
business now and who was in the business in the
30's up to 1935 can tell you that many a traffic mana-ger
and shipping clerk was the cause of the grey
hairs or loss of hair. It was a common practice for
a traffic manager who was paying a rate of 25c per
100 pounds for a given commodity to ask the trucker
to come to see him. When he arrived the Traffic
Manager would take him into his office and tell
him very confidentially that as much as he regretted
it, he would have to take his business away and give
it to his competitor. The trucker would want to
know why and the traffic manager would then tell
him that this trucker's competitor had offered the
traffic manager a rate of 23c per 100 pounds. All
truckers utterly distrusted all other truckers in the
beginning of this business, so without checking the
truthfulness of the traffic manager's statement, and
in order to hold the business, the trucker would offer
to handle the business for 21c per 100 pounds. If
you didn't take the shipping clerk a quart now and
then you didn't get any business and in some cases
the trucker had to pay outright the shipping clerk
or traffic manager a percentage of the freight
revenue which he received for hauling his freight
to retain the business.
Many efforts were made by some of the progres-sive
truckers to organize state trucking associations.
Their efforts along these lines were very discour-aging
because of the lack of interest of other truck-ers
and the lack of confidence on the part of all
truckers toward each other. There were some state
associations organized but they did not function
well.
Finally in 1933, a group of progressive truckers or-ganized
a national association which they called the
American Trucking Association, Inc. They set up
headquarters in Washington," D. C, and elected as
their president a dynamic little Irishman named Ted
Rodgers. Mr. Rodgers surrounded himself with a
few volunteer strong-thinking, two-fisted, hard-fighting
truckers. Through the efforts of this group,
Congress passed the Motor Carrier Act in 1935,
which is known today as Part II of the Interstate
Commerce Act. Its passage was the salvation of the
for-hire motor carrier industry and a boon to the
shipping public.
The Act provided, among other things, for per-sons
who had operated as for hire carriers prior to
June 1, 1935, that an application should be filed with
the I.C.C. showing what they had hauled and where
to. The Act provided that they could continue to
do what they had been doing where they filed such
applications until such time as a hearing was had
on the application and authorization obtained by
the applicant to do that which he could prove by
documentary evidence, oral testimony, and through
witnesses. This is known as the "grandfather"
clause. The Act contains other definite desires of
Congress, one of which was the delegation of Con-gress
that the I.C.C. should administer the Act.
The I.C.C. is composed of 11 Commissioners ap-pointed
by the President to serve for 7 years. They
administer the affairs of the Commission through
its various bureaus. The Bureau of Motor Carriers is
vested with the responsibility of administering the
Act and the various regulations which the Commis-sion
has promulgated and prescribed, as these apply
to truckers.
There are established throughout the United
States 16 field offices to aid and assist the motor
carriers and shipping public in their many prob-lems.
Trucks play a very important part in the eco-nomics
of the nation. There are 54,000 communities
in the United States which depend entirely on motor
vehicles for their needs. 43%- of the communities
in the United States have no railroad service. In
1941 for hire trucks on rural roads operated 6,982
Summer, 1945 THE U. C. C. QUARTERLY PAGE 71
millions of miles and transported 26,674 millions of
tons of freight. Do the trucks pay their way ? This
is a moot question, but statistics show that the oper-ating
taxes for each for hire truck for 1941
amounted to $1,090.00 . This is based on the report
of 1,176 for-hire Class I motor carriers making re-ports
to the I.C.C. In 1941 motor truck taxes ex-ceeded
one-half billion dollars.
Trucks are here to stay. They have done a good
job, they are doing a good job. Today there are
many trials and tribulations confronting the motor
carriers. New trucks are not readily available. Few
trucks have been available for rationing. Good me-chanics
are hard to get and hard to keep. Labor ap-pears
to be indifferent toward its job. Claims are
mounting. The ratio of operation is bordering
perilously close to a hundred and in quite a few in-stances
over 100. Unless something is done to
alleviate this condition, the future of over-the-road
truckers is in the balance. The trucker is of a sturdy
class. He has overcome what appears to be insur-mountable
objects before and he'll overcome this
one.
The future of trucking will probably depend on
the truckers' efforts to get better roads. The pres-ent
day roads in the southeast are wholly inadequate
and are improperly built to accommodate the mod-ern
automobile. The tendency of construction of
automobiles after the war will be toward stream-lines.
Engines will be more powerful. 100 octane
gas is now produced at the rate of 400,000 barrels per
day. High octane gas means more power, more
speed. Trucks will be streamlined, built to carry
heavier loads. California has some of the finest
roads in the world. Its roads will safely permit the
operation of a truck and trailer or a tractor-semi-trailer
and another trailer attached with a gross load
of 73,600 pounds. Its laws permit these combina-tions
of vehicles and these loads. It permits a com-bination
of vehicles a maximum over all distance of
60 feet in length. Proper road conditions in this
territory would permit the transportation of larger
loads and would qualify the trucker to more readily
adjust to lower freight rates for the South.
The airplane is coming in for its share of freight
after the war but a mass of trucks will still be needed
to distribute air-delivered freight.
The trucks have an important place in the trans-portation
system. They are here and they are going
to stay for many, many years to come.
Roll On, Motor Carriers!
Over our highways and often over our by-ways
too, move the trucks ! We see them everyday com-ing
and going—big ones, little ones, square ones,
round ones—shuttling cargo back and forth. They
are so much a part of the everyday scene that we
tend to take them very much for granted, except
perhaps to mutter a gripe when one has had to stop
and bar the bath of our own progress through
traffic. But pause to think a moment—where would
we, the citizens of North Carolina, be without those
trucks ?
They bring us meat and milk and vegetables and
all manner of foodstuffs. They bring us things to
wear and the means of shelter, fuel to keep us warm
and run our cars and businesses. Their freight loads
contain vital necessities, as well as the commodities
and materials essentially desired for both comfort
and commerce. They carry most of our farm produce
and many of our manufactured goods to market.
Should the motor carriers stop rolling, lives would
be imperiled and business brought to a standstill, for
more and more our economy depends on trucking.
There are in fact, some 3,544 communities in North
Carolina, as well as more rural districts, where
freight transportation needs are served only by
motor carriers, for both incoming supplies and out-going
products.
Last year the State Department of Motor Ve-hicles
licensed 94,106 trucks. Through June of 1945,
registrations numbered 93,174—exclusive of those
operated by the State of North Carolina. Out of these
thousands, a relatively small group are the for-hire
trucks, run by the trucking companies. It is these
companies and their for-hire trucks with which we
are concerned when considering the trucking branch
of the transportation industry.
Investigate a little and it appears from an inside
view that trucking is a fascinating business—fasci-nating
because of the many puzzles to be solved in
how to get this from here to there and that from
there to here quickly and by the shortest route.
The transfer of freight by motor carrier, essential-ly
a door to door proposition, some years ago grew up
into the status of big business, with the larger and
more progressive companies handling their intra-state
and interstate business with full parapherna-lia
of modern offices, big terminals at central points,
machine shops, printed time-tables and trained dis-patchers,
legal staffs, schools for personnel, com-pany
publications, employee hospital and medical
care plans, and an active trade organization of which
the state branch is the North Carolina Truck Owners
Association with offices and a secretary, Mr. J. T.
Outlaw, located in Raleigh.
Last year, 245 different trucking companies, em-ploying
eight or more workers, reported to the Un-employment
Compansation Commission. The N. C.
Truck Owners Association which more widely repre-sents
the smaller independent truckers, has a mem-bership
of 438.
Average employment in the trucking industry, as
reported to the U. C. C, totalled 6,990 for 1944. The
majority of these by far are the drivers.
Driving a modern truck is not just a matter of
getting behind the wheel and stepping on the gas. It
has become a profession in itself. Many companies
spend over $1,000 in training before a new man gets
on the road. Each man is given full instruction on
PAGE 72 THE U. C. C. QUARTERLY SUMMER, 1945
correct driving, the care of his vehicle, highway
rules and safety regulations. Drivers' manuals are
full textbooks covering such subjects as "Accelera-tor—
efficient application of", and "Accessories (and
parts) necessary for safe operation," and "Accident,
duties of driver in case of" to "Water, driving
through," Weight, distribution," "Winterfront," and
"Wiring."
Over and above company training courses, motor
vehicle driving has now gone to college. At State
College in Raleigh this year was held the first of a
series of Motor Vehicle Fleet Supervisors Training
Courses. Over 60 supervisors attended as students,
representing 3,618 trucks, 6,183 bussses, 793 passen-ger
cars, 15 trackless trolleys and altogether 11,657
drivers.
Trucking as a big business with progressive trends
in management is exemplified by Associated Trans-port,
Inc., one of the largest trucking concernes in
the world, with head offices located in Burlington,
N. C.
Roy Wilkins, Personnel Manager for the company,
is extremely proud right now of the large number
of safe driving awards he is distributing among As-sociated's
drivers. These include gold emblem pins,
with jewels, and wrist watches. The highest award
of all—a pin with the largest diamond—goes to a
man with a 15-year record of safe driving.
Some idea of the extent and nature of Associated
Transport's business may be gained from the lat-est
annual report, published in the May-June 1945
issue of Transport, the company's monthly maga-zine.
The 1944 payroll of $10,491,794, of which 98
percent was received by wage earners and salaried
employees as distinguished from officers and general
executives, took 55 cents out of every dollar of reve-nue.
The average ATer earned $2,548, or $49.00 a
week, during last year. Road drivers alone made
$2,848,266, or an average of $3,200 for every driver.
It requires trucks and terminals and shops and
offices to operate a trucking company. Associated
Transport trucks, tractors and trailers cost over $6,-
000,000; terminals over $1,500,000; shop and garage
equipment, $220,000 ; office equipment $400,000. With
other items, the total output for tangible property
amounted to more than nine and a half millions, by
virtue of which the company figures that the crea-tion
of each employee's job required an expenditure
of $2,225.
Other statistics in Associated Transport's report
are impressive too. The company paid over $1,300,-
000 in taxes, over $1,100,000 in insurance costs, over
$1,300,000 for gas and oil, and its telephone bill came
to a quarter of a million dollars.
In Charlotte, AT maintains one of its large termi-nals,
with divisional offices and a truck manufactur-ing
plant as well. The Charlotte Terminal is a mod-ern
building at which 38 trucks can be loaded and
unloaded at once. It is presided over by a terminal
supervisor and three platform supervisors. There
are three long-line dispatches, a local dispatcher, two
special department heads, a cashier and a shop fore-man
all on the job. Each day and night these men
and their 191 workers, including nine crews of 50
stevedores, dispatch 60 trucks for a weekly outbound
tonnage of 4,500,000 pounds.
The terminal buildings also include a service shop
and a conservation, maintenance, tire unit. At the
Brown Equipment Co., AT's truck-manufacturing
subsidiary, engines, tractors and trailers are built
and rebuilt. Mechanics, machinists, metalsmiths,
woodworkers, using the most modern machinery,
some of it designed right in the shop, turn out some
of the finest equipment on the highway.
.Charlotte exchanges freight with virtually the
same cities, most of the outbound going to and the
inbound coming from Baltimore, Philadelphia, Pat-erson,
New York and Pittsburgh.
Charlotte's importance as a terminal point lies not
alone in its manufacturing but also in its distribu-tion
set-up. North Carolina's largest city is a gate-way,
through which much traffic passes to and
from the north, south and west. It is an important
warehousing and wholesaling center, with ample
transportation facilities, being served by four rail-roads
and 46 common carrier motor truck companies.
This means that competition is keen and each com-pany
strives to best serve the various shippers and
consignees.
A new type of competition which the trucking
companies expect to encounter more and more, is
the movement of freight by air lines. This is why
Associated Transport was delighted recently to be
able to point out that it had moved a shipment from
Rome, Georgia, to Paterson, New Jersey, on a regu-lar
run, within 40 hours—actually less time than it
had taken for a shipment by air to be delivered be-tween
the same points.
Of course the trucking companies have more than
proved themselves essential during the war. It has
been said many times that this recent and greatest
of wars, was a war of supply, which has been equally
true on the domestic as well as the foreign fronts. As
a measure of the service rendered by the trucking
companies, we may take Associated Transport's cal-culation
that in the transporting of 50 million pounds
of freight each month, 90 percent of it has been war
freight.
NEW MILL FOR N. C.
Purchase of the Durham Hosiery Mill building at
Carrboro by the Pacific Mills of Boston, Massachu-setts,
for the purpose of establishing a worsted and
woolen weaving plant has been announced by the
Department of Conservation and Development.
Originally the plant was built as a hosiery knitting
operation but has been used for storage purposes for
several years. The main building is two stories and
contains more than 53,000 square feet of manufac-turing
space. The site is located on the Southern
Railway and contains about five acres.
The decision of the Pacific Mills to locate this unit
in North Carolina helps to diversify the industrial
structure of the state. The company is one of the
largest and oldest in the woolen and worsted field.
Summer, i 945 THE U. C. C. QUARTERLY PAGE 73
STATE JOBLESS PAYMENTS LOW
North Carolina faces the prospective postwar un-employment
problem with a comparatively unfavor-able
unemployment compensation record, Dr. Rich-ard
A. Lester, associate professor of economics in
Duke University, declares in a significant book en-titled
"Providing for Unemployed Workers in the
Transition," published as one in a series sponsored
by the Committee for Economic Development, Wash-ington,
D. C.
Published by McGraw-Hill, the CED series of
economic studies is being widely heralded.
Since benefit payments began under unemploy-ment
compensation in the late 1930's, the weekly
checks paid to unemployed persons have been small-er,
on the average, in North Carolina than any other
state, Dr. Lester points out. Average weekly bene-fit
payments in North Carolina have consistently
been the lowest year after year, he declares.
Citing figures, the Duke economist states that an
unemployed worker eligible for a benefit of $12 a
week in North Carolina would, for the same wage
credits, receive $18 in Louisiana.
"Low benefit scales explain why in 1942, when
weekly benefit payments for the country as a whole
averaged $13.84, the average was $7.10 for North
Carolina, $9.09 for Maine, $9.31 for Kentucky,
$9.94 for South Dakota, and $9.57 for Delaware.
Those were the only five states with average bene-fit
payments below $10 a week.
Dr. Lester points out that states with the most
ample or excessive reserves for unemployment com-pensation,
North Carolina being one of them, tend to
provide the least adequate benefits. On the other
hand, states whose reserves are among the least
ample tend to offer the largest weekly and total
benefits.
"Such unjustified differences among states should
be reduced before the nation is faced with the prob-lem
of postwar unemployment," Dr. Lester declares.
The general opinion of current unemployment
compensation laws is that North Carolina will face a
possible postwar unemployment era with somewhat
the same problems as are present now. The greatest
bone of contention is that this state has been paying,
Dr. Richard A. Lester, associate professor of economics at
Duke University, author of Providing for Unemployed Workers
in the Transition. Photo by Kefauver of The Raleigh Times.
on an average, the lowest unemployment benefits of
any state in the nation.
According to Dr. Lester, the recently enacted
minimum and maximum weekly benefits for unem-ployed
workers in North Carolina of $4 and $20 re-spectively,
is still too weak, and the scale of pay-ments
has not been liberalized enough to affect
benefits more than slightly.
The economist is further of the opinion that the
exhaustion ratio for benefit payments in North
Carolina would not necessarily be improved. He con-tends
that the exhaustion ratio is highly important
to the success of a program of unemployment in-surance.
Advocating a 20 to 26 week maximum payment
period for unemployed workers, Dr. Lester asserts
that "in order to provide more adequate protection
benefit scales and durations in the low benefit states
should be raised to approximate those offered by the
top five or six states."
SCIENTISTS OF DUKE AND THREE STATES
PERFECT GROWING OF TURKISH TOBACCO;
NOW TESTING TO DETERMINE LABOR-COSTS
Successful culture of high quality Turkish tobacco
in this country, a feat hitherto considered impossi-ble,
has been anounced simultaneously at Duke Uni-versity
and at agricultural experiment stations in
North Carolina, Virginia and South Carolina.
Import of Turkish tobacco by cigarette manufac-turers
for blending with domestic tobaccos amounts
to 50 to 75 million pounds a year. Manufacturers
attribute the quadrupling of cigarette smoking in
the United States during the past 25 years largely to
the skillful blending of Turkish with domestic to-baccos.
The diminutive aromatic leaf is being grown this
summer under the supervision of Duke and state
experiment station researchers on some 55 small
farms in three states. If the raising of Turkish in
this region can now be proved economically feasible,
it may prove a boon to thousands of small growers in
the Piedmont and mountain areas of the South, and
mark one of the most important developments in
tobacco growing since the bright domestic and burley
tobaccos were developed nearly a century ago.
Strangely enough, the Turkish plant thrives and
produces best quality on comparatively poor soil and
PAGE 74 THE U. C. C. QUARTERLY Summer, 1945
fortunately does not overlap areas of domestic leaf.
A principal consideration in the growth and cur-ing
of Turkish tobacco is the large amount of hand
labor involved, since the more numerous leaves are
but a tenth the size of domestic tobacco leaves and
require considerable handling. Continuation of the
research program in subsequent seasons will include
attempts to solve the labor-cost problem. Turkish
brings a substantially higher price per pound than
does domestic leaf, and once the operation is under
way, an income of $600 an acre is considered proba-ble.
Duke's announcement is the culmination of an
intensive program of research of over five years.
For decades it had been contended that Turkish
would thrive only in certain areas bordering the
Mediterranean and Black Seas, and numerous at-tempts
to produce it successfully in other areas have
failed. Now Duke claims American Turkish is as
good if not better than the overseas tobacco.
Credit for the successful experiments goes to a
small group of Duke and agricultural scientists of
the three states, who have been supported in their
work by Duke University, the General Education
Board, the Agricultural agencies of the three states
and four of the major tobacco companies
:
Dr. F. R. Darkis of the Duke Department of Chem-istry
has been in charge of the Turkish tobacco ex-perimental
laboratory and field research, a task
which involved the responsibility of coordinating the
project between the participating agencies and in-dividuals.
Dr. F. A. Wolf of the Duke Department
of Botany has been in charge of the breeding and
genetic experiments. The program as a whole has
been under the general dirction of Dr. Paul Gross,
chairman of the Department of Chemistry.
One interesting revelation of this cooperative re-search
program has been the demonstration that it
is not necessary to import fresh seed from the Euro-pean
growing regions each year. It had previously
been thought that seed grown in the United States
would not continue to produce plants which are true
to type.
Turkish tobaccos are grown under greatly differ-ent
conditions from those of the familiar flue-cured
tobacco of the Southeastern region. The plants are
planted very close together (from five to six inches
apart) and in rows 20 inches apart. Under these
crowded conditions the stalks produce a large num-ber
of small leaves. There are 55 to 60 thousand
Turkish plants per acre as compared to five to six
thousand domestic plants per acre.
While this process increases the labor of planting,
there is compensation in the fact that the crop while
growing needs very little weeding or cultivation.
Production in small plots of one to two acres or
less has been found most desirable. Many small
farms in the upper Piedmont regions of the Eastern
slope of the Blue Ridge from Virginia to South
Carolina are considered to be the most favorable
sites for growing this type of tobacco.
For the past 20 years these small farms more and
more have become marginal. An increasing prefer-ence
by American smokers for lighter eastern flue-cured
types of tobacco has reduced the demands for
the heavier types formerly grown on the farms of
the western Piedmont in Virginia so that a new
cash crop is needed as a source of income in this
area. Due to his higher production costs, the same
situation prevails for the small cotton farmer in
western South Carolina.
Another factor of economic significance is that
these tobaccos thrive better with organic types of
fertilizer than with artificial fertilizers, such as are
commonly used for flue-cured tobacco production.
The widespread introduction of such a profitable
crop as Turkish tobacco to these farms would require
the production of more animal manures and thereby
encourage the keeping of livestock. A more balanced
agriculture on these farms might result.
The harvesting of Turkish is by the "priming"
method. Leaves are harvested as they mature, be-ginning
with the lower and going toward the top
of the stalk, and when they are much greener than
those of flue-cured tobacco, the lower being removed
about seven weeks after transplanting. From six to
nine primings, at intervals of from five to nine days,
are required.
Leaves then are strung on a twine by the use of a
long, thin needle. Since the priming and stringing
are done by hand, the handling of some million and
a half leaves is required for each acre.
The strings of leaves are suspended between sticks
and left to wilt in a cool humid place for 36 to 72
hours, allowing certain desirable chemical changes to
take place.
After wilting, the strung leaves are placed on
racks and put in the sun to cure for a period of five
to 15 days, the time varying according to the com-pactness
and density of the leaves and the intensity
of the sunshine.
The sun decreases the moisture from 80 to less
than 10 percent and turns the leaves from green to
yellow, red or brown. Afterwards the leaves are
stored and the colors become clearer and more uni-form.
The tobacco is graded, compressed in bales of
75 to 125 pounds each, and is sewed in burlap covers.
Afterwards it is stored for two or more years to per-mit
development of the aroma. The American-grown
Turkish then is in a proper condition to be blended
with domestic tobaccos to produce what is regarded
the world over as mankind's best smoke—the Ameri-can
cigarette.
"E" AWARD
The Army and Navy Departments have announced
the award of another "E" for excellence in the pro-duction
of war materials earned by a North Carolina
firm. The Corbitt Company of Henderson is the
latest addition to our Honor Roll of plants which
have won this award.
SUMMER, 1945 THE U. C. C. QUARTERLY PAGE 75
Notes on U. C. C. Operations
NEW BENEFIT FORMULA
The Commission has been processing unemploy-ment
compensation claims received since March 13th
according to the new liberalized benefit schedule
adopted by the General Assembly. However, it is
too soon, and the number of claimants too few, for
current reports to reflect any appreciable difference
in size of total payments.
The new benefit formula which the Commission is
now using was substituted by the General Assembly
for the one formerly in use under which North Caro-lina's
unemployment benefit payments averaged the
lowest of any state in the country. The new formula
was designed 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 carries a minimum weekly payment
of $4.00 and a maximum weekly payment of $20.00.
It is estimated that under the new plan about half of
North Carolina payments will be between $10.00 and
$15.00; whereas in the past over 80 percent of all
weekly benefits paid have been less than $10.00 in
amount.
While recent claim loads reflect somewhat more
unemployment among workers throughout the state
than there has been at any time since June of last
year, the increase is not thought to be significant.
Such unemployment as has developed has been
spotty and of short duration, and much of it has
been partial. Claims will come in from one com-munity
for a few weeks, then drop off, while new
claims are reported from another locality. General-ly,
current claims result from lay-offs at particular
plants which close down temporarily because of ma-terial
shortages, and are continued for only a week
or two.
For instance, a number of pulp mills had to shut
down in the winter months when it was too wet for
lumber to be cut and hauled to them. Several textile
mills throughout the state have experienced diffi-culty
in maintaining operations because of freezing
of raw materials. Recently, there have been a num-ber
of partial lay-offs in some tobacco processing
establishments. Also, the Commission receives many
claims when there is a work stoppage in some area
because of a labor dispute, but such claims are
usually not compensable.
TREND IN FUNDS AVAILABLE
FOR BENEFIT PAYMENTS
When unemployment benefits first became pay-able
in North Carolina on January 1, 1938, the total
fund available for the purpose was $9,289,422.08.
This represented contributions from employers cov-ered
by the law for employment in 1936 and 1937.
Although employment was at a low level in 1938 and
benefits paid this first year were 87 percent greater
than in the following year of 1939, the initial reserve
proved sufficient to assure the payment of all claims
allowed. Only in June, July, and August of 1938 was
it necessary, in fact, to resort to this reserve for the
payment of benefits. At all other times, current
contributions have been ample to pay current claims.
With improved economic conditions, the margin
of safety has increased. By the end of 1938, con-tributions
for the year exceeded benefit payments
by $1,564,691.74. The excess of contributions over
benefit payments has continued in an
increasing ratio until on June 30, 1945
the total fund available for benefit
payments amounted to more than
$100,000,000.00. The trend in contri-butions,
including interest increment,
in benefit payments and in funds
available is graphically presented in
the chart.
VETERANS WHO WORK FOR
THEMSELVES
From the battlefields of Europe
and Asia, from actions at sea in At-lantic
and Pacific waters, and from
service in territory in all parts of the
world, North Carolina's veterans are
returning to take up pursuits of their
own choosing which cater to a variety
of every-day needs. From ex-G. I.'s,
Tarheels may have their shoes re-paired,
their dogs cared for, their
houses built and painted, their pic-tures
taken, satisfy a yen for food,
soft drinks and ice cream, and
PAGE 76 THE U. C. C. QUARTERLY SUMMER, 1945
purchase many items from poultry to insurance.
Many services are now available from men who, fol-lowing
discharge from the armed forces, have gone
into business for themselves.
Reports to the Unemployment compensation Com-mission
also show that veterans who have applied for
readjustment allowances provided for the self-em-ployed
under Title V of the G. I. Bill of Rights have
set themselves up as cabinet-makers, lumber dealers,
service station operators and merchants. But by far
the largest number of these veterans have gone into
agriculture. During the month of May, of some 500
claims for allowances filed by self-employed veterans,
478 were from farmers.
Readjustment allowances payable to ex-servicemen
are based upon the length of military or naval
service. To qualify, a veteran must have been en-gaged
in self-employment throughout the full cal-endar
month and have net earnings that amount to
less than $100. His potential allowance is the differ-ence
between net earnings and $100 a month. The
Veterans Representative for North Carolina reports
that on 459 of the May claims, $45,569.00 was paid.
It is apparent that for veterans who need supple-mental
backing to become established in their own
work, the readjustment allowance program is par-ticularly
advantageous to the farmers.
A veteran's period of entitlement to allowances is
measured in weeks and based upon the length of his
active military service. The maximum period of
entitlement is 52 weeks—within two years after dis-charge
or two years after the end of the war, which-ever
is the later date. The payment of a monthly
self-employed allowance is based on five weeks of
entitlement. In drawing a cash payment for the
difference between his net earnings and $100 in any
month, a veteran would use up five weeks of entitle-ment
to allowance payments ; whereas if he were
seeking work and totally unemployed, his allowance
would amount to $20 for each of the five weeks.
Whether to draw a self-employed allowance for any
given month, or whether to reserve his weeks of
entitlement against a possible greater need later on,
is a decision each self-employed veteran must make
for himself.
On the other hand, a self-employed veteran en-gaged
in a business such as farming, might be in a
position to claim a full allowance for every month
during his period of entitlement, except the month
or months in which he sold off his major crops.
Claims from veterans for readjustment allowances
are taken by representatives of the Unemployment
Compensation Commission at any of the local em-ployment
offices throughout the state. Claims from
self-employed veterans should be filed before the
20th of the month following the one for which they
report earnings.
INDUSTRIAL SHIFTS IN EMPLOYMENT
It will be of interest to those with responsibility
for planning postwar readjustments to observe the
industrial character of increases in employment dur-ing
the war years.
The industrial character of this increase in em-ployment
is indicated by the following compilation
which gives a distribution of gains and losses by
major industry groups. It is significant that de-clines
in employment have occurred in eight of the
industry groups. In tobacco and utilities these de-clines
did not result so much from the impact of the
war as from the substitution of machines for hand
labor in the case of tobacco, and of mechanical im-provements,
consolidations and a tightening up of
the organization in the case of utilities.
It is also significant that employment in textiles,
which represents the chief contribution of North
Carolina to the war effort, increased by only 16.33
Industrial Shift In Covered Employment In North Carolina
1940-1942
"
Increases
More than
50%
25 to
so';
10 to
25%
Le?s than
10%
Declines
Per Cent
Miniug . ... 67.55
Construction .. 131.87
Manufacture. ... _ _ _ 21.05
Food 21. 84
Tobacco . 10.86
Textiles.. 16.33
Apparel 35.13
Saw Mills and Logging 40.07
Furniture _ _ 21.52
Paper and Pulp. .. 21.10 , .
Printing and Publishing.. 0.32
Chemicals - .. ... 30.55
Leather . 27.16
Stone, Clay, Glass 3.21
14.01
Non-ferrous Metal. _ 39.96
fili. 70
Auto Equipment 80.28
Rubber. _. 26.37
Transportation Comm. and Utilities
08.38
51.57
73.62
26.96
Other
Water Transportation . 74.30
Communication . ... 21.95
Utilities 4.41
15.01
21.82
12.17
Wholesale..
Retail . . _
Finance Insurance and Real Estate- 8.63
Business and Repair Service.. 35.30
0.96
Hotels 30.68
22.76
7.71
133.02
percent although in volume this is the largest in-crease
of any industry, and means an addition to the
textile labor force of more than 35,000 workers since
December 1940.
Phenomenal increases occurred also in general con-struction
and in ship building. Approximately 32,-
000 workers were added by the former, increasing
the number employed in 1940 by 131.87 percent. In
1940 there was practically no covered employment
in the manufacture of transportation equipment. By
1942 approximately 18,000 workers were so em-ployed,
and by the second quarter of 1943 the num-ber
had increased to 34,839.
These increases, practically all of which resulted
SUMMER, 1945 THE U. C. C. QUARTERLY PAGE 77
NUMBER OF CLAIMS
. 6 000,
;:num8.er" of ci*,
m<i»mr}»)m
WSSSSBSm.
llifipc^
ifiiiSii^^^^ S| N | J F M Ifl M J IJ A SlO N D | j F M iA M J |J A S lO N D | J F M lA M J U A S IP N | J F M lA M J IJ A S [0 N D-
\
J F M |A M J
I938 I
' I939 I I940 I I94I .I
^"~
I942 I IS
INITIAL AND CONTINUED CLAIMS
'. - Received as Liable and as Agent State Sept. 1938-June I944.
F -M | A M'j
- -I 944- -
from war production, will indicate in some measure
the character of necessary postwar readjustments,
the magnitude of which will depend upon the extent
to which these increases represent out-of-state labor
and others who may retire from the North Carolina
labor market at the end of the war. Interstate labor
shifts are indicated in a following section.
NORTH CAROLINA AS "LIABLE" AND AS
"AGENT" STATE ON INTERSTATE CLAIMS
Workers who become unemployed in other states
and later come to North Carolina for work may file
claims for unemployment in this state, in which case
North Carolina acts as the agent state for the pur-pose
of transmitting the claim to the liable state.
The accompanying chart illustrates the trend in the
volume of claims, both initial and continued, as be-tween
North Carolina as the "Liable" and as the
"Agent" state.
From September 1938 until May 1939 continued
claims filed against North Carolina as the liable
state exceeded those filed against it as the agent
state. The same was true from September 1939 un-til
February 1940, and from August 1940 until Oc-tober
1942. It is significant that for all months
since October 1942 for continued claims and since
May 1942 for initial claims, the number handled by
North Carolina in which other states were liable has
exceeded the number referred by them to North
Carolina for payment. This reflects an influx of
workers from other states to North Carolina either
for employment, or, in the case of many women, be-cause
of the attachment of their husbands to mili-tary
bases in this state.
EFFECT OF WAR PRODUCTSON ©N INDUSTRY
It has been claimed by some that war production
was proving disastrous to small business, because
of the concentration of war contracts in large plants,
attended by priorities and restrictions which forced
many smaller plants without war contracts into liqui-dation.
While Unemployment Compensation records
do not reflect fully the impact of war on employers
of fewer than eight workers it will be of interest to
examine the changes in employment since 1940
among the more than 10,000 employers who are cov-ered
by the law. It is noticeable that 29.36 percent
of the 10,181 covered employers had fewer than
eight workers during the fourth quarter of 1942, and
that 69.61 percent had fewer than 25 workers. There-fore,
a comparison of their employment in 1940 and
1942 presents a realistic picture of the effect of war
contracts which were generally supposed to have
been concentrated in larger plants. It is true that
except for ship and camp construction, North Caro-lina's
participation in war production has been
limited chiefly to textiles, less than 50 plants being
reported as devoted wholly to war production other
than textiles ; yet the volume of sub-contract produc-tion
and the increase in demand for consumer goods
in general by the military forces have had a sustain-ing
effect that has on the whole kept the small em-ployers
pretty much in the vanguard of the proces-sion.
During the period January 1940 to December 1942,
there were 3,617 establishments dropped from ac-tive
status, due to liquidations, consolidations or re-tirement
from the state. Their places were taken
by 4,781 concerns which became subject to the law
PAGE 78 THE U. C. C. QUARTERLY Summer, 1945
during the same period, and resulted in a net increase
of covered employers of 12.91 percent during the 36
months. The percentage of increase among em-ployers
of fewer than eight workers was but slightly
less (10.05 percent) than the average for the entire
group. Actually in the aggregate, 301 employers in-cluded
in the net increase of 1,164, or 25.86 percent
of all added employers, had fewer than eight work-ers.
It is apparent, therefore, that war production
acted as no deterrent in so far as small enterprises
were concerned.
While the distribution does not indicate increases
in employment for identical firms, the ratio of in-crease
among smaller firms compares favorably with
that of the larger units, except for the few large
plants established solely for war construction. The
increase in employment among all concerns employ-ing
fewer than eight workers was 33.90 percent com-pared
to an average of 34.98 percent for all em-ployers.
It is of interest to note, however, that increases in
wages among small employers were relatively far
less than among larger plants. The increase among
employers of fewer than eight workers was 78.54
percent, while the average increase for all employers
was 115.49 percent. Deducting rate of increase in
employment from rate of increase in wages it may
be assumed roughly that wages for identical employ-ment
increased by 44.64 percent among employers of
seven or less and by 80.51 percent on an average
among all employers.
EXHAUSTION OF BENEFIT RIGHTS
For benefit years which began after February 15,
1939, all eligible claimants were entitled to draw
benefits for 16 weeks if unemployed and eligible. A
claimant who exhausted his benefit rights by draw-ing
benefits for 16 weeks could not draw additional
benefits until the beginning of a new benefit year,
or one year after he filed the first claim in his pre-ceeding
benefit year. Inasmuch as these exhaustions
indicate the extent to which the benefit formula fails
to meet the needs of the claimants involved, it is of
interest to observe the relation between the number
of exhaustions and the number who become eligible
for benfits.
The ratio of the number who exhausted their
benefit rights to the number of different bene-ficiaries
during the year 1939 was 34.97 percent.
This means that for every 100 different claimants
who drew benefits during that year there were 35
claimants who drew benefits for the maximum of 16
weeks. In 1940 this ratio rose to 37.55 percent; in
1941 to 43.42 percent; in 1942 to 43.72 percent, and
in 1943 declined to 38.55 percent. During the first
six months of 1944, the exhaustion ratio was 40.20
percent. It will probably be less when data for the
second half of 1944 becomes available. The highest
rate of exhaustions now occurs in the early months
of the year, whereas, the reverse was true for 1939,
1940, and also for 1942. The highest ratio of ex-haustions
for 1939 occurred in September at 60.48
percent; for 1940, in November at 127.62 percent;
for 1941, in February at 55.03 percent; for 1942, in
November at 84.48 percent; for 1943, in April at
119.47 percent; and for the first half of 1944, in
March at 105.64 percent.
This upward trend in the ratio of exhaustions dur-ing
a period of high employment levels, with a sharp-ly
declining claim load, seems paradoxical. However,
as has been pointed out in special studies, war pro-duction
has not overcome the factor of seasonality
in many of North Carolina's industrial activities
such as tobacco processing, food products and ferti-lizer
manufacture which are dependent upon the
availability of raw material.
A duration study made in May 1944 covering bene-fits
paid in 1943 indicated that while the average
ratio of exhaustions for all industries was 43.72 per-cent,
it was 56.34 percent, or 28.87 percent higher,
for the tobacco processing industry. While the ratio
of exhaustions in 1943 was slightly below 1942, when
employment was at a higher level, it is above the
ratio for either 1939 or 1940. Also while the ratio of
exhaustions in the tobacco processing group declined
from 72.21 percent in 1942 to 56.34 percent in 1943,
and in the food products group declined from 45.12
percent to 42.86 percent, the number of claimants
from the seasonal groups who exhaust their benefit
rights remains sufficiently constant to produce an
upward trend in the ratio of exhaustions to new
claims in the benefit year.
At the present high level of employment, it may
be assumed that the number of exhaustions has
reached an irreducible minimum which will reflect
most significantly the effect of seasonality on the
adequacy of the present benefit formula. The num-ber
exhausting benefit rights during the last nine
months of 1939 was 18,446. For the year 1940 the
number was 31,915. It dropped in 1941 to 23,770; in
1942 to 16,395 ; in 1943 to 4,447, and in the first half
of 1944 to 1,043.
Data on exhaustions for the first three months
of 1939 are not available. Comparing the last nine
months of 1939 with the same period in 1940, and the
first six months of 1944 with the first six months
of 1943, the annual percentage change in the num-ber
of new claimants and in exhaustions is as fol-lows:
EXHAUSTION RATIOS OF N. C. UNEMPLOYMENT
BENEFIT PAYMENTS
Percentage Change in:
Ratio of Exhaustion
to New Claimants
Exhaustions
or
New Claimants
% Of
1939 34.97
1939-1940 41.01 2.99 1940 37.55
1940-1941 25.52 35.99 1941 43.42
1941-1942 31.03 23.89 1942 43.72
1942-1943 72.88 . 84.36 1943 38.55
1943-1944.. 71.89 46.70 1944 40.20
Summer, 1945 THE U. C. C. QUARTERLY PAGE 79
North Carolina Business Trends
The department of research and
statistics of North Carolina's Un-employment
Compensation Com-mission
maintains a monthly in-dex
of business activity for the
purpose of viewing current trends
throughout the state. This index
is constructed from data contain-ed
in the reports of the Federal
Reserve Board, the U. S. Bureau
of the Census, the Federal Power
Commission, the U. S. Bureau of
Mines, Life Insurance Sales Re-search
Bureau, the N. C. Depart-ment
of Labor, the N. C. Depart-ment
of Revenue, Southern Furni-ture
Manufacturers Association,
and in the Survey of Current
Business of the U. S. Department
of Commerce.
REVIEW OF 19
U
General business conditions in
the state during 1944 were 4.7
percent below 1943, according to
the North Carolina Business
Index which is prepared by Silas
F. Campbell, Chief of the Bureau of Research and
Statistics of the Unemployment Compensation Com-mission
of North Carolina.
Campbell points out, however, that the average for
the year was 62.8 percent above the average for the
five-year period 1935-1939, and that the downward
trend in North Carolina during 1944 was less than
for the nation at large, as indicated by national in-dexes
of industrial production.
The accompanying chart illustrates business trends
in the more important of the series included in the
index during the last 20 years, the first 16 years
giving the annual trend and the last four giving the
monthly trend. All index numbers used in the
various analyses are based on the monthly volume
of activity in the respective series for a period of
years varying with the different types of activity
and these indexes have been adjusted for trend and
seasonal variation. The trend period for the several
indicators included in the composite index are as
follows
:
Active Spindle Hours 1913-1939
Bank Debits 1923-1940
Cement Shipments 1934-1940
Cigarette Production 1924-1939
Construction Contracts 1924-1940
Cotton Consumption 1913-1939
Department Store Sales 1934-1941
Electrical Energy Production, 1920-1939
Gasoline Consumption 1925-1939
Hours per Spindle in Place___ 1922-1939
New Car Sales . 1925-1939
Ordinary Life Insurance Sales 1923-1940
Campbell
Except for the state of Ala-bama,
whose University, through
its Business Research Depart-ment,
compiles a business index
for that state, North Carolina is
the only state, so far as known,
that provides an index of indus-trial
production and general busi-ness
conditions comparable to the
federal indexes at the national
level.
The monthly relatives on em-ployment
and payrolls are not in-cluded
in the composite index up-on
the assumption that fluctua-tions
therein are adequately re-flected
in the data on industrial
production.
The calculated trend in each
series covers the entire period for
which monthly data have been
available. The trend increment
is stated for each series and this
is taken as 100 for the purpose of
determining current monthly in-dexes.
Fluctuations above and
below 100 indicate the extent to
which the series has departed from the trend as cal-culated
for the trend period.
It will be seen from the accompanying chart that
except for 1938, the trend was consistently upward
from 1933 to 1940 and that it was greatly accelerated
with the beginning of 1941, nearly a year before this
country entered the War.
It will also be noted that except for bank debits
and electrical energy production, the peak was reach-ed
in this state in 1942, (construction in 1941), al-though,
for the country as a whole, the peak appears
to have been in 1943. This is due to the fact that
this state had a large concentration of construction
at military camps and was the beneficiary under gov-ernment
contracts for clothing the Army which
The recent appointment of Silas F. Campbell as Director
of the U. C. C.'s Bureau of Research and Statistics comes
as a recognition of 27 years service to the State of North
Carolina.
With an experience of more than 25 years in industrial
auditing and actuarial work, he was called into the State
Employment Service in 1933 to set up a statistical program.
He was appointed Supervisor of Statistics, and later served
as Fiscal Supervisor and as Assistant Director.
Upon the consolidation of the Service with the U. C. C. he
was made Senior Statistician, and later appointed as Super-visor
of the Bureau. Upon the appointment of Dr. W. R.
Curtis, former Director of the Bureau, as Director of the
U. C. Division in 1941, Mr. Campbell assumed direction of
the statistical program, and the present appointment comes
as an adjustment of the title to the job in hand.
In his present position Mr. Campbell has developed and
issued monthly an index of business conditions and indus-trial
production in North Carolina which has received na-tional
recognition and favorable comment from such men as
Roger W. Babson and the leading economists of many of our
larger universities, including Duke, the University of North
Carolina, Princeton and Columbia.
PAGE 80 THE U. C. C. QUARTERLY Summer, 1945
reached a peak long before the maximum production
of durable goods was affected.
This concentration of manufacture in production
of consumer goods in North Carolina has been re-sponsible
for a higher level in business conditions
generally ever since the upward trend from the de-pression
of the 30's got underway. This higher level
will be discernable by comparison of the indexes of
national and North Carolina bank debits, and it will
be seen that the North Carolina level remained high-er
than the national level until the effect of war
production in the durable goods field was reflected in
the national index during February 1943, when for
the first time since 1930 the national index of bank
debits was above that of North Carolina. The North
Carolina index of bank debits (March 1945) is 218.30
compared to 205.42 for the nation.
While the bank debits are at present heavily
weighted with government transactions, such as the
purchase of bonds and the transfer of funds for the
maintenance of military forces, the index is affected
in like manner in other states and for comparative
purposes it may be seen that the tremendous up-swing
in the manufacture of consumer goods has
more than offset the state's lack of durable goods
manufacture.
Reviewing conditions during 1944, Campbell pre-faces
his report with the reminder that "It is not
enough that the combined business index be high in
order to insure economic stability. Today the index
of bank transactions is the highest in history, while
the index of construction is the lowest since the de-pression
years of the thirties, as is the index of gas-oline
sales. The index of employment is also lower
than the scarcity of labor would indicate. Today the
combined business index is at the highest level of a
century ; yet, who would say that with less money
in circulation, but more gasoline, more production
for civilian use, with fewer restrictions on construc-tion
and travel, life for most of us would not assume
a brighter and more prosperous aspect, though the
general business index remained the same.
As long as there are areas of depression within the
business cycle, no matter how high certain of the
indexes may soar, these areas will indicate a derange-ment
of the economy that introduces a sour note into
the song of prosperity.
While the war period has put more money into
circulation than ever before, and has raised the busi-ness
index to unprecedented heights, our real era of
prosperity will arrive when all the measured indica-tors
of business trends come into greater harmony
and closer correlation with each other. This lack
of correlation was especially apparent among the
various indexes in the late twenties and the result
was the disastrous collapse which followed in the
early thirties. Just as no trade is a good one in
which both parties do not profit, so no economy is
wholesome in which only one segment of the working
some measure compensate for the inequality of sacri-fice
that has of necessity characterized this period
of emergency.
CONSTRUCTION
According to Campbell's index the most depressing
effect upon the 1944 business trend was caused by
the decline in construction, concerning which he com-ments
as follows: "Few activities are more respon-sive
to cyclical influences than construction, yet on
a monthly basis it is misleading as a unit of measure-ment
because of the "carry-over." Contracts let
during a given month may be reflected in increased
employment for many months or even years ; and,
while this distortion is at a minimum during periods
of normal business, it is especially violent during
periods of transition or economic upheaval. The
buoyant effect of the war program on construction
in North Carolina was reflected in our business index
six months before Pearl Harbor, when in May and
June 1941, 60 million dollars in war contracts were
let covering hydro-electric plants and military can-tonments,
some of which are not even yet completed.
During 1941 more than $200 million in contracts
were let; in 1942, 170.6 million; in 1943, $91 million,
and in 1944, $46.3 million. During these four years
more contracts were let than in the preceding eleven
years beginning with 1930, although a considerable
volume of contracts for hydro-electric development
was being executed in 1940.
The peak in volume of contracts was reached in
1941, also the peak in employment, when in February
more than 100,000 were employed in construction
work in North Carolina. Accordingly the construc-tion
index, on a basis of the 1924-1941 trend, reached
a peak of 706.34 in May 1941, with an average for
the year 278.89, from which it has since steadily
declined, being 239.35 for 1942, 127.12 for 1943, and
63.39 for 1944. This means that during 1944 con-struction
activity was 36.61 percent below the gen-eral
trend from 1924 to 1941. During 1944 the
monthly average of contracts let was $3,858,000.,
which is 1.1 percent more than the monthly average
for the eleven year period 1930-1940. The $46,293,-
000. in contracts let during 1944 represents a decline
of 49.37 percent from 1943, and is 14.95 percent be-low
the average for 1935-1939.
The present outlook is for an extremely low level
in construction work until the end of the war; and,
while there is considerable optimism concerning post-war
construction, few people realize the extent to
which forests have been denuded of high grade tim-ber,
and the source of supply exhausted to meet war
needs. Except for highway, steel and concrete build-ing
construction, this factor is likely to retard seri-ously
the resumption of private construction on a
scale comparable with post-war needs.
While it is too early to make any specific prediction
concerning post-war construction, it is possible that
repair, alteration and modernization work may go
far towards restoring construction to a high level of
employment. Much will depend upon whether the
post-war cost of insulation, combination heating and
air-conditioning systems and other mechanical items
is such as to limit their introduction to the luxury
market. It is not generally believed by those with
most experience in producing building material and
equipment that the radical changes in construction
predicted by some which involve the extensive use
of plastics, plywood and fabricated units, will mate-rialize
except as a gradual evolution covering many
years of experimentation and study, although off-site
Summer, 1945 THE U. C. C. QUARTERLY PAGE 8
1
COTTON CONSUMPTION
?no ANNUAL i RE N OS HON
175
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225 ELECTRICAL ENERGY PRODUCTION
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CIGARETTE PRODUCTION
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1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 L942 1943 1944
TWENTY YEAR TREND INDEX OF LEADING INDICATORS
In Relation To Composite Trend
Detail'- -Composite 5
processing and assembling may be considerably ex-panded
as a result of post-war demands.
COTTON TEXTILES
According to Campbell's analysis, North Carolina
cotton mills have 2.5 percent of all the world's cotton
spindles, numbering nearly 150,000,000., and 24.7
percent of the nation's total. "In the manufacture
of cotton textiles," his report states, "North Caro-lina
ranks first among all the states in employment,
in payrolls and in number of bales consumed. Its
cotton textile plants employ 32.7 percent of the total
number employed in cotton textiles in the United
States, although the cotton consumption in North
Carolina is only 25.6 percent of the country's total.
It leads the next highest state, (Georgia) in cotton
consumption by approximately half a million bales
annually. Its position in relation to total textile em-ployment
in the United States has deteriorated
slightly in the past decade, but has somewhat im-proved
since 1939.
In 1942 there were 503,000 workers employed in
cotton textiles in the United States, of whom 164,000
or 32.6 percent were employed in North Carolina
mills. The total cotton consumption that year was
11.4 million bales, of which North Carolina plants
consumed 2.9 million bales, or 25.4 percent of the
total.
In 1943 there were 486,000 workers employed in all
PAGE 82 THE U. C. C. QUARTERLY Summer, i 945
of the cotton textile plants of the country, of whom
160,000, or 32.9 percent, were employed in North
Carolina. The cotton consumption for the year 1943
was 10.7 million bales, of which North Carolina
plants consumed 2.8 million bales, or 26.1 percent of
the total. The above figures as to North Carolina
do not include employment in hosiery mills, rayon,
worsted or silk mills. Data for the United States
are said to represent the entire cotton textile indus-try,
and may or may not include employment in
plants manufacturing cotton hosiery.
The volume of cotton consumption in North Caro-lina
during 1944, 2,789,988 bales, was 189,000 bales
under 1943, a decline of 6.77 percent, while spindle
activity declined in about the same ratio, active spin-dle
hours by 6.65 percent, and hours per spindle by
6.76 percent. The average index of cotton consump-tion
for 1944, of 140.08, based on the 1913-1939
trend, represents a decline from the 1943 index of
8.34 percent. The index based on the 1935-1939
average, which includes the trend increment, is
152.65, or 9.61 percent under the 1943 index on this
base. The index of spindle activity remains at a
higher level than for cotton consumption, due appar-ently
to a larger production of finer market yarns.
During the period 1913 to 1939 cotton consumed by
North Carolina textiles increased at an average an-nual
rate of 2.80 percent, while the number of active
spindle hours increased at an average annual rate
of only 0.01 percent, and hours per spindle actually
declined at an average annual rate of 0.37 percent,
indicating that during that period the trend was to-wards
coarser yarns, while the reverse has been true
since 1939. The outlook for 1945 is an increase in
production which may equal the 1943 level in order
to meet the revised demands of the military forces.
Apparently the avail