Interview #2

Interview with Arthur Altmeyer
by Peter A. Coming

Washington. D. C.
March 23, 1966

Q: My first question is this: Could you describe FDR's attitude toward health insurance?

Altmeyer: I don't think he had any attitude at the time we set up the Committee on Economic Security. If he had any attitude, I think it would have been a favorable one, saying, "Of course we ought to include health insurance." But then when questions were raised by the medical profession; and I think Dr. Cushing, the father-in-law of Jimmy Roosevelt, talked with the President about the attitude and the fears of the American Medical Association. And I have a feeling--in fact, more than a feeling--that Mrs. Roosevelt was concerned about the effect on the quality of medical care under a government health insurance plan. That came about because she had a very close friend named Esther Leahy, who was a medical technician, and had expressed fears to Mrs. Roosevelt about the effect on the quality of medical care. And maybe Ross McIntyre had been approached by doctors and indicated the doctors were disturbed. I don't know for sure about that. But soon after we started functioning, it appeared that we were going to get considerable opposition from the doctors, and the President indicated he wanted us to proceed very carefully and avoid a clash. He never at any time, up until the time for decision as to what should be included in the Committee on Economic Security report, indicated that he wanted it excluded. I think the opinion to exclude it was an opinion reached by the Committee itself, not because of any attitude or direction from the President.

Q: I see. The President then relied of the Committee's judgment in making his decision about whether or not to include health insurance in the Economic Security bill.

Altmeyer: Yes.

Q: Then I take it that you have in effect already answered my next question, which was whether or not Miss Perkins, Mr. Witte and yourself agreed with the decision that it be postponed.

Altmeyer: Yes, we certainly did, because we wanted to get through a bill without delay and the Congress would be adjourning in July perhaps or August at the latest. We didn't want the bill to be hung up because of any big row on health insurance. But your question is about Roosevelt's attitude in '34-'35. There was an episode after the report of the committee and after the bill was introduced and while it was under consideration in Congress that involved the question of health insurance--that is, whether the committee should send up a supplemental report dealing with health insurance, as it indicated that it would in its original report. And that is covered in my book on The Formative Years. You'll find it on pages 57-58 where the President then decided he did not want the report released to the public or sent to Congress, and the letter of transmittal of the committee was altered so as to indicate that it was recommending further research by the Social Security Board before specific recommendations or before action would be taken.

Q: And this is what led to the Interdepartmental Committee. Is that correct?

Altmeyer: No. I think it probably was one of the big factors in the creation of the Interdepartmental Committee, but I think it was certainly not the sole factor. There was a desire to coordinate the various health activities throughout the government. Now that you ask the question, I'm trying to think: probably we did have in mind that that would keep the subject alive, the issue alive.

Q: I take it then that it was not true that a definite decision was made to postpone submitting a health insurance proposal until very late in the game. No decision was made to put off health insurance early in the work of the Committee on Economic Security?

Altmeyer: No, and no decision was made even after the bill was introduced. We were hoping that we'd get agreement on the part of the medical advisory committee for some sort of a beginning on health insurance, and the big question was whether the government officials would be satisfied with a catastrophe insurance type of approach or cash benefits paid after a certain expenditure had been made instead of a service approach where the insurance system would pay for the cost of the services and guarantee the provision of services rather than merely paying a cash benefit to the insured who would then apply that cash benefit to whatever hospital and medical bill he might have incurred. The people who were most interested in health insurance were very loathe to settle for this catastrophe cash benefit approach. As I look back, I think we might have been able to get that type of bill included in the original bill even.

Q: You think even before '38?

Altmeyer: Yes, I think if we had pushed it strongly and felt that we were satisfied with that sort of compromise, we might have gotten that much into the original bill. Whether it would have survived on the Hill, I don't know.

Q: Was it ever discussed at all in any Congressional committee? No one ever even suggested it?

Altmeyer: No.

Q: I think you've answered my next question then. In retrospect you don't feel that it was necessary to back down completely, without a fight in 1934-'35.

Altmeyer: No, not at all.

Q: Can you add anything to what has already been written by various people about the role of the AMA in blocking health insurance in '34 and '35 ?

Altmeyer: No. I think it's obvious that they were the main factor. The commercial insurance companies didn't show their hand--at any rate, at that time. It was just the AMA and Dr. Fishbein in particular who took the lead.

Q: And also organized labor at that time wasn't in a position to serve as a counterweight to the opposition of the AMA.

Altmeyer: No, they didn't indicate any interest.

Q: Do you know if there were any attempts subsequent to 1935 to induce FDR to endorse health insurance and were you a party to any specific discussions with the President which you could recall?

Altmeyer: There was this second report of the Committee on Economic Security, to which I've already referred. And then of course after the 1938 health conference we met with the President and he was very enthusiastic about the support that had been shown for health insurance and felt that it ought to be a good campaign issue for the 1938 campaign. Then almost immediately he said, "Well, maybe we ought to wait till the 1940 Residential campaign." That's when Miss Roche and I met with him to discuss the next step after this 1938 health conference.

Q: Why in your judgment did Roosevelt never publicly espouse health insurance under Social Security?

Altmeyer: Well, he had so many things on his mind that he really didn't give too much attention to any phase of Social Security. It's just one of the things he was interested in but he couldn't concentrate on it to the exclusion of other problems, although I think he was very proud of the passage of the Social Security Act and always thought that it was one of the things in which he could take great satisfaction.

Q: I wonder if you could describe what part you played in the 1938 national conference on health and the events leading up to it and surrounding it.

Altmeyer: Well, Miss Roche and I were the two most interested and we devoted more time to it than any of the other members of this interdepartmenta1 committee. We induced Ernest Lindley to handle the publicity, public relations, and the three of us were the ones who discussed who should be invited and how the conference should be conducted. And then of course, as chairman of the Social Security Board, I arranged to have the research work done by our division of research and statistics--I think with the cooperation and help of Dr. Parrot, the statistician in the Public Health Service.

Q: What was Roosevelt's position on the 1939 Wagner bill? Did he express a view on that?

Altmeyer: Well, he didn't express a view on the bill. He expressed a view later on in the fall of 1938 when a question came up as to what sort of recommendation he would make in his various messages to Congress that he only specifically wanted to advocate hospital construction.

Q: How was it that Roosevelt was finally induced to support disability insurance?

Altmeyer: He never had to be finally induced. It was the same character of social insurance as old age insurance, or unemployment insurance or workmen's compensation insurance, covering wage loss--a perfectly familiar concept to him. We never even had to raise the question with him.

Q: And there was no concern on his part that it would be as controversial as health insurance would be?

Turning now to the Wagner-Murray-Dingell bill . . .

Altmeyer: Let's finish with that question on permanent disability. I think the delay in pushing for permanent disability, the blame for that delay rests on the Social Security Board and on me; because while we recommended it as a part of the amendments of 1939, we also at the same time indicated that there ought to be a lag of six months or a year before that part would be put into effect because of the administrative problems that were involved. And that gave the opportunity to the opponents--who were by that time the commercial insurance companies, supported by the AMA, which had previously endorsed cash benefits for permanent disability, but they made common cause then--that gave them the opportunity to induce the Congressional committees to keep it up. I always felt that that was a very serious error on my part, to indicate any serious reservations about putting it into effect at the same time as the other amendments. If you'll look at my testimony, you'll see that I was pressed on it and I really didn't take a forthright position. A big mistake.

Q: Perhaps we could turn then to Wagner-Murray-Dingell bill. The health insurance system envisaged in some of the preliminary proposals in 1934 and '35 differed in several ways from he provisions of the Wagner-Murray-Dingell bill in the '40s. And I wonder whether these changes reflect the experience that the Social Security Board had had in administering the unemployment insurance and public assistance during the intervening years.

Altmeyer: Yes. Unquestionably, we felt that the federal government would have to play a much larger role than we contemplated in 1934 and '35 if there was going to be any action taken. That feeling came about not only because we were disappointed in the progress made by the state in the field of unemployment insurance and public assistance, but because of the very strong opposition that had developed on the part of the AMA and the commercial insurance companies and employers. We realized that unless the federal government took a large part and responsibility in the development and progress of health insurance, nothing would be likely to happen by the states.

Q: Perhaps you could describe your own personal role in the development of the Wagner-Murray-Dingell bill and the role of some of your principal subordinates, Mr. Falk and Mr. Cohen.

Altmeyer: Well, first we were inhibited from taking an official position supporting the Wagner-Murray-Dingell bill or a program like the Wagner-Murray-Dingell bill because the President wasn't prepared to underwrite a specific comprehensive program, not that he wouldn't have if he could have been given the time to study it and make up his mind. But, at any rate, it wasn't possible to get his attention to the extent of getting his specific support. Therefore, we had to function in the role of providing technical assistance to members of Congress who were prepared to take the responsibility. I as Chairman discussed the matter with the other members of the Board, and they were all agreeable to having the division of research and statistics provide the data and draft the bill. And I testified in favor of the subject matter and the programs, but I never, as I recall, specifically endorsed the bill itself in all of its details. I was never pressed to do so, as I recall. And I think our report to Congress indicated our general support but did not endorse the bill specifically.

Q: You would not have excluded discussing this from public speeches you made and so on.

Altmeyer: No, I think that my public speeches endorse all of the things included in the Wagner-Murray-Dingell bill. But I didn't say that I was supporting or the Administration was advocating the passage of the Wagner-Murray-Dingell bill because I wasn't officially in a position to do so. You see, you have to get clearance from the Bureau of the Budget and we never got clearance from the Bureau of the Budget. We never pressed for clearance, as I recall.

Q: How do you explain the fact that President Truman gave his strong support to the Wagner-Murray-Dingell bill, and to the principle of health insurance in contrast to Franklin Roosevelt?

Altmeyer: Well, he didn't realize all of the opposition, the strong opposition, that existed. And if he did, he didn't give a damn, as he would say. And furthermore, his close adviser was Sam Rosenman, Judge Rosenman, who was very strongly in favor of health insurance and all the other things contained in the Wagner-Murray-Dingell bill and wrote President Truman's speeches and messages, with our help. I assigned Wilbur Cohen to work with Sam Rosenman during the first year of Mr. Truman's administration.

Q: Would the end of the war have been one factor in this?

Altmeyer: That he could give his attention, but of course there were a lot of post-war problems just as complex. I think it was partly because Mr. Truman's temperament was one that he wanted to carry on the New Deal and he conceived of the New Deal as including the Wagner-Murray-Dingell bill type of legislation--I mean, if he thought about it--and he therefore was perfectly willing to go all out.

Q: What is your explanation for the success of the American Medical Association and other opponents in blocking the Wagner-Murray-Dingell bill?

Altmeyer: Well, they had the money; they had the prestige; they had the local contacts, and there was no counterweight. The labor groups helped somewhat, provided some money, for this committee which Mike Davis managed and which was very active, not only in the drafting of the Wagner-Murray-Dingell bill but also in supporting it. But there was no strong support by labor, and the top officials of labor, while in favor, gave no active attention or support.

Q: Very much in contrast to the situation with medicare in the '50s.

Altmeyer: Yes.

Q: Is it true that Falk's head became the price for the AMA's support of the proposal to establish a Department of Health, Education and Welfare?

Altmeyer: No. I think the reason that they opposed the establishment of the Department was Oscar Ewing's presence as Federal Security Administrator. Remember, Taft introduced a bill for a health department and they gave tepid support. First, you must remember, that the AMA looked with suspicion upon any governmental activity, to say nothing about individual medical service. They just felt that the government couldn't be trusted to get into the business of doctoring people. So they weren't enthusiastic even about Taft's bill. I don't recall that they ever specifically supported it. Maybe they did. But when it came to having a Health, Education and Welfare Department and came to making the Federal Security Agency a department, then they focused upon Ewing as the big bad wolf. I suppose they didn't care for Falk, but nobody ever said that if he was retired, they would support a health department.

Q: Do you know at what point the decision was made to drop the effort for national health insurance?

Altmeyer: There never was a decision to drop it. We continued to recommend it--"we" meaning the Social Security Administration--year after year after year, all right down to the end of my term of office. Who said that we dropped it? We recommended specific beginnings such as hospital benefits. We started recommending hospital benefits in 1942. That was before the first Wagner-Murray-Dingell bill. By hospital benefits, I mean not simply construction of hospitals, but payment of hospital benefits not only to the beneficiaries of old age and survivors' insurance or those insured, but to all who would be insured under old age and survivors' insurance. That is, not simp1y to active beneficiaries but all the insured workers and their families under old-age and survivors' insurance. I think we continued to recommend that approach until Mr. Truman--I think in 1943 or l944 we recommended a comprehensive Social Security program including health insurance. Then later on again we renewed the recommendation for hospital benefits to beneficiaries. That was in 1952, as I recall. We narrowed it down to just the active beneficiaries. That would include not only the aged, but widows and orphans. At the same time we were still recommending a total program but also proposing a specific beginning in the field of hospitalization. And later on that was narrowed still further to include only the aged beneficiaries, the widows and orphans and the disabled were still left out, even the beneficiaries.

Q: In over words, then, there was no decision to drop one proposal completely, but to narrow down your demands to what you felt was politically possible.

Altmeyer: That's right.

Q: I shouldn't say "demands;" your recommendations. Can you reconstruct any of the specifics of this change in strategy? Do you know who was responsible, for example, for formulating the idea of narrowing the scope of the bill down to just beneficiaries?

Altmeyer: I suppose I was.

Q: Can you recall any of the discussions during that period?

Altmeyer: No, except that we realized we only could get a very limited beginning and so we looked for the sort of beginning that would be attractive enough to overcome the opposition of the AMA.

Q: Did the welfare groups or the professional or hospital associations play any role at all?

Altmeyer: They were more or less neutral. The one effect of all this agitation of 1938 was really to give a great push to voluntary health insurance, particularly Blue Cross. Just before 1938 there were just a handful of localities that had anything of what we now call Blue Cross. It started out at Baylor University covering the teachers. That was the only demonstration of any consequence that was in existence at the time of the 1938 conference.

Q: Is it your feeling in retrospect that the political timing of the Wagner-Murray-Dingell bill was inappropriate? I'm thinking now of the fact that it was a period of rabid anti-communism and anxiety. This was the beginning of the McCarthy era.

Altmeyer: It wasn't the beginning of the McCarthy era.

Q: Well, in the late '40s. . .

Altmeyer: But the Wagner-Murray-Dingell bill came into existence in 1943 or '44.

Q: When it was first espoused. But later in the '40s--'I'm thinking of the climactic years of 1949 and '50. The political climate was against the bill at that time.

Altmeyer: Of course you couldn't have envisaged what the temperament would be later on, but I don't think that the temperament of the American people was much different up until just recently, coming with the Kennedy administration. I don't think at any time from way back to war days down to 1960 there was much difference. The point is that in 1942-'43, we had the Beveridge cradle to the grave report which created a great deal of excitement and attracted a great deal of attention. And it looked as if the fervor of a brave new world, envisaged after the war was won, would carry over to this country and lead to great social changes and progress, and it looked like a very propitious time. As I look back, it's still amazing to me that we didn't catch the fervor such as Britain did. Don't forget that it was Churchill and the conservative government that appointed Beveridge to do the study, and Churchill and the conservative government before they went out of office endorsed the proposal enthusiastically and announced that it be put into effect immediately upon the cessation of the war. There was every reason to believe at that time that we would have the same fervor. And as a matter of fact, there was included in the Atlantic Charter, as part of the principles for which we were fighting, health insurance.

Q: How much consideration to that was given in that interdepartmental group that studied the problems of the post-war period? Remember, it began with the State Department and then other groups were added into it, of which you were a member. Was there any thought given to medicare?

Altmeyer: I don't remember that group.

Q: You remember that during the war the State Department instituted, and then other agencies--I think the Labor Department saw its opportunity to get its foot into the planning for postwar America. And then of course there was a sub-committee on Social Security and other related problems.

Altmeyer: I must say I don't remember it at all. It couldn't have amounted to a damn. It must have been just a paper committee that never got off the ground. Did they ever make a report?

Q: Just draft reports. I don't think anything was made public.

Altmeyer: It doesn't stick in my mind. I don't recall that I ever went to a meeting. I wish you'd go and get me a reference to that. I'd like to see what it's all about.

Q: Can we turn then to the administrative problems and policies? Would you like to start with the first question then?

The Social Security Board, as I understand it, was the first major governmental agency to begin life under the Civil Service system. What problems did this pose for you? For example, did it make recruitment easier or more difficult, and on balance would you say that the advantages outweighed the disadvantages?

Altmeyer: I would say that it was a lifesaver for us, given the circumstances of widespread unemployment and the hungry demand for patronage on the part of members of Congress who were besieged by unemployed constituents. It did create a problem in the sense that there were no rosters of persons who were qualified for specific duties under the new program. But that was met in part by permitting exemption of experts and lawyers from civil service. We still had to secure the approval of the Civil Service Commission for the appointment of specific individuals as experts or lawyers, and that created a problem since the question was who was as expert? And the Civil Service Commission couldn't understand my explanation that an insurance agent, for example, or experience in a private insurance company, did not quality a person as an expert in social insurance. I never was able to get across the considerable distinction between private insurance and social insurance. Therefore, I found it difficult to induce the Civil Service Commission to approve as experts people who had a background in the social sciences, even though they didn't have any specific experience in private insurance. But, on the whole, they were very understanding in the Civil Service Commission, and I think it was a lifesaver that we did not have to take unqualified people because of patronage pressures. There were difficulties later on with patronage, but I guess we can take that up next.

Q: There were several problems during the early days of the life of the Board that have been mentioned by various people I've interviewed. Could you comment on some of them? First, the fact that a rather large number of people were fired.

Altmeyer: I don't believe that's true, and I wonder whether there's any statistical evidence to support that statement. Have you come across any evidence?

Q: No, I haven't quite frankly, although this was told to me by somebody who should know.

There were some problems with the political, you'll remember. You had trouble over in Baltimore for a while, but other than that, certainly no large. . .

Altmeyer: There were two or three top officials--maybe not two or three--just one I can remember specifically who was fired because of political motivations.

Q: Also one of Seideman's people.

Altmeyer: That's the man I'm thinking of, but I don't recall there was any great number fired.

Q: Second, what about the problem of establishing procedures for review? I'm told that at first you relied upon auditors and then switched to administrative review.

Altmeyer: The point is that there weren't enough social workers in existence that we could obtain to carry on an administrative review in state public assistance administration. That's what the reference is to. And then perforce we had to rely upon auditors who would check finance activities and actual payments in individual cases to see whether they were made in the proper manner and whether they were made to people who met the eligibility requirements under the federal and State laws. In the beginning we realized that was a very negative, unsatisfactory approach. So as soon as we were able to recruit enough social workers to carry on an affirmative administrative review in cooperation with state and local officials, we switched to that type of review, but we continued to rely upon auditors to help the states to set up accounting systems so that it would be possible to keep surveillance of the expenditures.

Q: Talk about the problem of communists at the Social Security Administration?

Altmeyer: The only problem that I recall of alleged communists was over in Baltimore where we exhausted the only available list there was of an entrance examination to federal Civil Service--I forgot what it was called. But there were a great many young people--college graduates--who took the examination, and it was alleged that a number of them were communists. I don't know whether they were communists or not. I do know that they gave us a lot of trouble under the procedures we had set up for protecting employees from dismissal without cause. They took advantage of our procedures, which were very elaborate, had various steps for initial action and review of initial action and so on up the ladder. Several of these chaps undertook to exhaust that procedure indefinitely. I recall one case that my associates told me cost us somewhere between $5- and $10,000 because we had to furnish transcripts and an opportunity to reply to the accusations and all of that sort of thing and take up the time of the supervisors who were put on trial by these young people for their having dismissed a subordinate employee. That' s the only problem I remember. That was a problem for at least a year and a half or two.

Q: What about the jurisdictional conflicts between bureau directors and regional directors over the control of program people in the regional offices?

Altmeyer: That's a perennial, pervasive, persistent problem in any form of organization, governmental or non-governmental. The relationship between line and staff people, even at headquarters, is very difficult. But then when you add to that the complication of the relationship between headquarter and the field, you get that sort of situation. It has never been resolved in any organization that I know of, governmental or non-governmental.

Q: It's simply inherent.

Altmeyer: It's inherent in an administration, any administration.

Q: I wonder if you could discuss also the personnel crisis that the Board underwent in Congress 1937 when personnel with salaries over $5000 had to be confirmed.

Altmeyer: Well, that did create a very unhappy situation because the top officials felt uncertain and insecure. If they were going to have to be approved by members of Congress, they envisaged the necessity of obtaining political support and they had been hired on the basis of their technical abilities. But actually in the course of a year, the Senate approved every single one of the persons who had been employed. That washed out.

Q: Except Mr. Bane had to take a cut.

Altmeyer: The Executive Director had to take a cut below $5000. I don't know why he did.

Q: I think it was 95 and they cut it to nine.

Altmeyer: They put that in the law?

Q: Well, they cut his salary.

Altmeyer: The Congress did in the appropriations bill?

Q: Yes.

Altmeyer: I didn't remember that. I remembered something special about Mr. Bane, but I didn't realize it was a cut.

Q: One participant has spoken of friction during the early days between the social workers and the lawyers. He claims that the general counsel was not at first invited to the meetings of the Board with other bureau directors and that he was required to take initiative on his own to find out when the meetings were held and to appear. Can you affirm this or comment on this?

Altmeyer: I wasn't aware of that. It certainly wasn't a policy of the Board. Whether the Executive Director or someone on his staff failed to invite them, I wasn't conscious that they were absent, at any rate, or that they felt resentful. No one ever spoke to me about it. I think it became a sort of a joke. I was always putting the lawyers on the defensive to support a position that they might have take or which would have restricted what I considered to be desirable action, and whether they were irritated or amused, I don't know. But that's the only thing I can think of in connection with the lawyers. Of course there were a couple of cases where we overruled the lawyers on their legal opinion, and they gradually adopted the philosophy, I think you'd call it, that there was an area of administrative discretion in which we could function. That area was where at one extreme it was certain we had authority; at the over extreme, it was certain that we didn't have authority. But there was a gray area in which the question of whether we were exceeding our authority was not clear-cut, and so they were not obliged to object--that's the expression of the general counsel's office--about the use when it was a question of whether there was actual authority to act.

Q: The training program of the Social Security Administration has frequently been singled out for praise. Were you responsible for its creation and could you explain then the thinking behind it?

Altmeyer: I don't know that I was responsible. I certainly felt the necessity--not only the desirability but the necessity--right from the very beginning, and I imagine we all shared that feeling. I think I was probably more active in pushing it because of my university relationships in the past. I don't know whether Karl deSchweinitz was the first one to head it or not, but he gave it quite a lift forward. I think it has justly been looked upon as probably the first and the best government training program that we've had.

Q: As I recall there were Sweet and Schultz before deSchweinitz.

Altmeyer: That's right.

Q: But this idea of bringing in outside experts was rather unique.

Altmeyer: Yes.

Q: Even by comparison with private enterprise in those days, a formal training program was quite an unusual thing. Was there any objection to the length of the training from Congress?

Altmeyer: No. We did spend an awful lot of time even on training subordinates down the line because we had the opportunity to take the time since the old age and survivors' insurance--the old benefits, as they were called--didn't go into effect for several years. We didn't have pressure on us, and so that gave us a chance to really dig in and set up an effective and comprehensive program. I think it's unquestionably been the major reason why Social Security became so popular. There was little mal-administration or whatever you want to call it. But, more importantly, the people who came into contact with the public had been so thoroughly drilled in their attitudes--not simply in the law itself--toward the public that it has carried on to this day. I'm sure that it's these myriad contacts with the public and the way the telephone operators and girls at the desk and the interviewers approach their job that has been responsible.

Q: Were you responsible for the decision to carry out the unemployment insurance program in cooperation the USES, and if so, what was your reasoning?

Altmeyer: Well, we wrote that into the original bill. It wasn't my decision. It was unquestionably the decision on the part of the Committee on Economic Security and Mr. Witte and everybody else connected with the development of the law. Then when they struck out the specific requirement in the bill, I carried on the plan that we had all felt was absolutely necessary--that you have to have what they call "a work test" as part of an administration of a system of unemployment insurance benefits. You have to be able to establish that this person is involuntarily unemployed and that means that if there's a job available, that he be given the opportunity to accept or reject that job.

Q: While we're on this subject, what was your attitude toward the ultimate decision to place the unemployment insurance under the Department of Labor?

Altmeyer: It broke my heart, but I could not argue against it. I took the position at that time--and I think it's logical--that the two should be kept together. And while there were arguments about whether they should be kept together in the Social Security Board or in the Labor Department, and I naturally would like to see them together in the Social Security Board, I couldn't very well object if the decision was to transfer it.

Q: Was there any deal made?

Altmeyer: No, I don't think so. There was an attempted deal with me by a fellow who had great influence with the state administrators that he would undertake to keep the two together in the Social Security Administration if I wanted him to do so and I refused to cooperate or connive or whatever you want to call it in that sort of thing. That's the only approach to a deal that I know of. But Mr. Ewing, undoubtedly as a Truman appointee, would feel absolutely bound to abide by the President's executive order transferring it. I never discussed it with him because I knew that he would feel bound, and I felt bound, too. You couldn't have a government official trying to prevent a President from carrying out his wishes.

Q: Why were the decisions made successively to strip from the Bureau of Research and Statistics responsibility for collecting statistics on unemployment insurance and pubic assistance?

Altmeyer: Well, there were two reasons. The immediate one probably was that the appropriations committees of Congress could never understand why we spent so much money on research and statistics. And so I thought that the more research and statistics could be placed in the operating bureaus, the better chance there was of getting adequate financing. Secondly, I felt, I think correctly, the operating statistics that flow out of day-to-day operations can best be collected and analyzed by the operating bureaus; that if the Bureau of Research and Statistics has that available and are relieved of the responsibility of the mass job of collecting them, they can do a better job of basic research.

Q: The reason generally given for Governor Winant's leaving the Board was that he wished to campaign for Franklin Roosevelt in 1936. Were there to your knowledge any other factors? For example, could it also be that he wasn't particularly happy with the job of administration?

Altmeyer: I think that while he did leave to campaign for Roosevelt, he did come back, you know, after the election and then left again to become director of the International Labor Office; and the reason probably was that he didn't really care for administration. He left that pretty largely to me when he was the Chairman of the Board.

Q: There was, I believe, a six month period in which there were only two Board members, you and Mr. Miles. Did this lead to any special difficulties during that period?

Altmeyer: Oh, yes. Yes, of course, there were any number of decisions, usually personnel decisions, where he disagreed, and you couldn't break the deadlock because there wasn't a third member, and so either a compromise was reached or no action was taken.

Q: Going back to when you had three, were there many actual formal votes taken or was it merely a matter of talking out with everybody agreeing?

Altmeyer: I think we talked it out and reached agreement. I don't think there was ever any split vote. I don't recall any case where there was a recorded split vote, either when there were three members or when there were two members. You simply deferred action.

Q: How would you characterize and compare the support that Social Security received from Presidents Roosevelt, Truman and Eisenhower? Can you illustrate their relationships to Social Security with any specific example?

Altmeyer: Well, I think Truman, as I said at the very beginning, gave more overt and forthright support than Roosevelt did because he felt he was carrying out the Roosevelt New Deal. Roosevelt, while he was for Social Security, relied largely upon Miss Perkins and later upon me. As long as it didn't give him any trouble, he was perfectly happy.

Q: How about Eisenhower?

Altmeyer: I don't think President Eisenhower had the faintest idea of what Social Security amounted to, what it was. I think he more or less equated it with socialism, at least government intervention, which he didn't think was too good.

Q: Can you illustrate their relationships with any specific examples? Can you recall any specific occasions when you had dealings with them and needed their support or in which they withheld support?

Altmeyer: The distinction between Roosevelt and Truman was most apparent in connection with this health insurance program. Roosevelt felt that we ought to try to come to terms with the doctors if possible and be careful that we didn't precipitate a tremendous row. Truman shot the works and stayed with his guns. Now, so far as Eisenhower was concerned, before he was elected he made speeches to indicate that if all a person wants is security, why he can go to jail and get a roof over his head and three meals a day--that sort of thing. I don't think he wrote the speech probably, but at any rate, if he thought of it at all, he thought that the government we making life too easy for the individual.

Q: What was the background of the close relationship during the early days between the Business Advisory Council of the Secretary of Commerce and the Social Security Board?

Altmeyer: Well, it so happened that the Business Advisory Council in those days was made up largely of what now the columnists are calling the "establishment," that is, very important industrial financial leaders with an Ivy League background--some of them at any rate, and a social conscience--at least a public conscience. They were men like Marion Folsom, for example, and Gerard Swope, head General Electric, and Teagle, head of Standard Oil of New Jersey, and Henry Harrison. He wasn't on the advisory council but he was president of the U.S. Chamber of Commerce. He was in utilities in New England. They were men that really believed that there was an important role that government should play in this field that we now call Social Security. So they gave complete support to the Social Security program, both when it was being developed and after it came into existence.

Q: Is it true that several key decisions that were made in the early days in the life of the Board were at the suggestion of the Business Advisory Council or in consultation with them, including specifically the issue over the dog-tags?

Altmeyer: I don't recall that there where any key decisions that were made at the suggestion of the Business Advisory Council. I'd put it the other way around--that I probably discussed key decisions with the Business Advisory Council or people that were members of the Business Advisory Council. I'm sure I never discussed this question of the issuance of the so-called dog tags; that is, the proposal of the Addressograph Corporation to have these metal tags that could be used for imprinting the name and account number of insured workers. I don' t think they ever discussed that. I think there was a member of the Business Advisory Council, Walter Wheeler of the Pitney-Bowles, who developed a very inexpensive postal meter that he thought could be used by employers in making reports to the Social Security Board, covering the wages that they paid to their workers. The idea was good and I advocated it and fought for it and it was rejected by the Internal Revenue Bureau--to permit large employers to use their mechanized equipment for reporting and the small employers could utilize this postal meter and a stamp book, a mixed system in other words, payroll reporting for large employers and stamp book system for the smaller employers. I felt it would be much easier for small employers to report through the stamp method and there'd be a much more effective police mechanism because a worker would know whether his employer had turned over to the government not only the employer's contributions but the worker's contributions. I still think that it was a good idea, and I don't know, but I think there is today widespread failure to comply with the law on the part of small employers, including housewives who don't report their domestic help's wages. Now they have developed a very simple envelope reporting system, which largely fills the role that I envisaged for the stamp book, but I think the stamp book might have achieved greater compliance on the part of small employers than the present system has.

Q: One participant credited the Council with being instrumental in winning the cooperation of businessmen. Would you agree with that?

Altmeyer: Oh, yes. I think so.

Q: What about the Board's relationship to other business groups such as the NAM and the Chamber of Commerce?

Altmeyer: The NAM was never reconciled--I don' t think it's reconciled today--to Social Security. But the U.S. Chamber of Commerce in the late '30s--'35 to '40 at any rate--was under the influence of people like Marion Folsom, and they supported Social Security. Later on they became a little jaundiced.

Q: While we're on this subject of outside support, Miss. Merriam has mentioned to me a labor advisory council which I wasn't aware of before. Could you perhaps comment on that?

Wasn't that in the '30s? It called in labor representatives and they'd have meetings periodically or quarterly. I think she headed the group.

Altmeyer: Well, I don't recall the labor advisory council. My guess is that it would be made up of their brain trusters, their intellectuals, rather than the labor leaders themselves; whereas the Business Advisory Council consisted of the cream of the business executives of the United States--very influential group.

Q: In any case, you would not rate as equal in importance the efforts that were made to enlist the support of the business community versus labor.

Altmeyer: I'd have to make direct contact with Mr. Green, for example, George Harrison and other labor leaders who had indicated an interest in Social Security. I don't remember a labor advisory council.

Q: When did they take a more active role--labor as a whole?

Altmeyer: Not until they established a Social Security division headed by Cruikshank.

Q: I think there was somebody before him. Watts was one. Of course that had been up in Massachusetts.

Altmeyer: Yes, Bob Watts--I forget what his position was in the AFL--was very much interested, and I maintained a close relationship with him. Then there was Marion Hedges who was on our payroll later on in public relations work from Electrical Workers. He was editor of their journal. And so it was the maintenance of relations with individuals in the labor organizations rather than any labor advisory group that would be comparable to the Business Advisory Council.

Q: How about John L. Lewis and the CIO?

Altmeyer: My contact with Mr. Lewis came about largely because of his problem with the creation of the welfare fund. I was instrumental in bringing about a settlement of the 1946 strike, I think it was, which was on the question of the establishment of the welfare fund. It may have been '47. So through that relationship I had this contact with Mr. Lewis.

Q: How about earlier in the advisory council when you had Lee Pressman?

Altmeyer: Lee Pressman--that was after the AFL-CIO split--was general counsel of the CIO. But he came over on the West Virginia unemployment compensation matter. He demanded that we compel the West Virginia unemployment compensation agency to pay strike benefits. I don't think Mr. Lewis had a hand in that. He may have had. He never spoke to me about it himself. Pressman, whom I had known when he was over in the Agriculture Department and subsequently on various occasions we'd have some dealings with later matters, but the only instance I recall is this time when he came over to make this demand. I said there was no authority in the law for us to compel a state agency to pay benefits to a person that was unemployed because he was out on strike. He said by God I'd better do that or he'd see to it that I was kicked out. He lost his temper. Nothing ever came of it.

Q: Could you perhaps describe the relationship of the Board to Congress over the years, particularly with the Senate Finance Committee and the Ways and Means Committee? In particular, could you discuss your dealings with Senators Harrison and Vandenburg?

Altmeyer: Why do you concentrate on Senators Harrison and Vandenburg?

Q: Well, they're two people in particular that I understand you had extensive dealings with over a period of several years?

Altmeyer: Yes, but there were personalities in the Ways and Means Committee that I think were important. But I'll take them up.

Q: Well, you're welcome to discuss it.

Altmeyer: I'll take up these first two. Senator Harrison was a great statesman, not simply a politician. He was a good politician, of course, but I considered him one of the great statesman. I think most people would put him down as the stereotype of the Deep South type of Senator, a reactionary and all that. But so far as Social Security was concerned, he was our great savior I would say--not only when the original bill was under consideration, but also throughout the years so long as he lived. He had implicit confidence in the Social Security Board, he as an individual, and he undertook to win the support of his colleagues on the Senate Finance Committee on any matter that we had discussed with him and that he felt was important. So I have great admiration and affection for him.

Now, so far as Senator Vandenberg was concerned, I would say equally that I consider him to have been a great statesman as well as a very good politician. He became hyped on this question of the reserve. A man named Albert Linton, president of a private insurance company of Philadelphia, convinced him that that was a bad thing, that big reserve; it would lead to extravagance on the part of the government and it was not necessary. Linton never said it was a fraud, but he just as an actuary didn't believe that it served a useful purpose. He was a Quaker with a very high moral attitude and so I would say that there were never any shenanigans as far as Linton was concerned. His position was very clear and forceful, and he convinced Senator Vandenberg that the reserve was a bad idea. I personally never thought much of the big reserve and the original bill didn't call for it, but Morgenthau convinced the President that the only way to maintain a self-sustaining system was to have higher contributions, during the early years, the result of which would be a large reserve.

It became a political issue in the 1936 Presidential campaign and I think a major factor in the size of the defeat of Landon because he called the Social Security system a hoax. Nobody made a distinction. Nobody knew what he was talking about. Maybe he thought he was talking about the whole system. Somebody else wrote the speech. But actually what was back of this expression of a fraud and a hoax was this large reserve under the old age benefit. As I say, the popular reaction was--and I think the Democratic reaction was--that he was attacking the whole Social Security program as a fraud and a hoax, and of course the campaign proceeded on that basis.

Well, after the campaign was over, Vandenberg and the Republicans generally continued to hammer away at this big reserve. The Senate Finance Committee called me before the committee in 1937 to discuss a joint resolution that Vandenberg and Senator Townsend had joined in and the two Republican leaders in the House had joined in presenting. The upshot of the hearings on this joint resolution--which I don't think was ever passed, it was dropped because I agreed that we set up an advisory committee--but I think I made it clear at that time (I certainly did at the time the committee was set up) that the committee would consider the whole question of benefits, not simply the question of the reserve. I did that deliberately because I thought I could use this concern about the size of the reserve to get a better benefit schedule in the Social Security Act. The advisory committee was a very fine one consisting of persons who had taken an interest in Social Security previously. Some of them served on the advisory committee to the Committee on Economic Security. So the upshot was that we got the proposal to Congress in 1939 to improve the benefits, start them sooner, include survivors' benefits and dependents' benefits as well as the primary beneficiaries. The effect was--and I made a point of that--to cut down the size of the reserve by paying out more money in the early years and less money in the later years. I used the illustration of a seesaw to indicate the curve of benefit payment instead of going up steeply like that would start at a higher level and go up less steeply. The net result would be a system that would not cost any more but would use up the reserve enough in the early years to keep it from building up to an unconscionable level. At that time it was considered it would be unconscionable for it to be $47 billion. I remember my friend Vandenberg said, "What in heavens name are you going to do with $47 billion?" The government debt at that time was around $17 or $18 billion. He said, "What will you do with that money?" Off the record I said to him, "You could invest it in U.S. Steel and some of the large corporations." He just threw up his hands in holy horror and said that that would be socialism with a vengeance. But, at any rate, I think the problem of the reserve helped us to get the amendments of 1939. It certainly didn't hurt us. It didn't completely solve the problem of the reserve because any reserve was considered to be bad even though it was going to be only under the new plan much less, maybe $20 billion or some such figure as that. They considered that was unnecessary. I think right down to the present day you'll hear recrudescence of this business of how many IOU's are in the till and Congress has spent all your money and you'll have to pay it all over again. I'm sure that the Reader's Digest and U.S. News and so on said so.

Q: It came up in the last election. What role did he play, Mr. Altmeyer, in influencing others on the tax freeze?

Altmeyer: Well, the Democrats are just as much to blame as the Republicans are on the tax freeze. If there's anything that Congress likes to do it's to avoid levying new taxes or increase taxes.

Q: I noticed you had a lot of correspondence with him on that.

Altmeyer: I felt that if I could influence him, he would influence the others. I never convinced him. Even if I had convinced him, I doubt whether it would have stopped the freezing of the taxes.

Q: What about your relations over in the House?

Altmeyer: Oh, in the Ways and Means Committee I had trouble so far as patronage was concerned that I didn't have over in the Senate. The two members in the Ways and Means Committee mostly concerned were Fred Vinson, who became Chief Justice of the United States Supreme Court later, and Jere Cooper, who was the ranking member of the Ways and Means Committee next to Vinson, who was the next to the chairman. But at any rate, those two were the most influential members of the Ways and Means Committee. Congressman Doughton, the Chairman, introduced the bill at the request of the administration, but I don't think he necessarily understood what the bill was about. But these men, who worked at it very conscientiously and understood every bit of the report and every bit of the bill as it was hammered out in the committee, so they were very important then and later. It was unfortunate that I wasn't very adept in my dealings with them or other members of Congress on this matter of patronage. I just didn't realize how strongly members of Congress felt they should be consulted in making appointments. I failed to discuss key appointments with members of Congress, with the result that I found I had deeply offended these two men. I had to spend a considerable amount of time assuaging their injured feelings. I never did completely satisfy Fred Vinson I'm afraid, and perhaps didn't satisfy Jere Cooper, because in the case of Fred Vinson I had to refuse to appoint a man as personnel director who had no qualifications for the position. We offered him a position as office manager in Louisville, Kentucky, but he declined that; so Mr. Vinson was never satisfied that I had given him appropriate consideration to his views. And he felt as one of the influential supporters of the legislation, his view should have been taken more seriously.

Q: Are you familiar with his role in the Clark amendments? Someone suggested that his adamant stand helped prevent the passage of it in conference.

Altmeyer: It may very well be. He and Guffy had supported what was known as the Guffy Act, which was sort of IRA type of control of the coal industry to stabilize it. So he may very well have been influential in preventing it. The Clark amendment never did get over to the House, though. It never went to conference.

Q: Didn't it go to conference and he held out against it?

Altmeyer: I guess it did go to conference.

Q: It was passed in one House but not in the other.

Altmeyer: It was passed in the Senate, I guess. I thought it had been dropped on our agreement to make a study. But it did possibly go as far as the conference. Then we agreed to make our study and report back, but our study was made and we made an informal report to the members of the Senate Finance Committee who were most interested in it, but by that time the insurance companies were not any longer interested or the employers were no longer interested in contracting out from the old age benefit provisions, so it was never taken up.

Q: Would you provide some insight into the relationship between the professionals in the field of social welfare and in particular what part did Frank Bane and Loula Dunn play in the development of Social Security? I'm referring in Bane's case to his work outside, his job as executive director of the APWA.

Altmeyer: He was quite soon superseded by Fred Hoehler as head of the APWA.

Q: He later went to the Council of State Governments.

Altmeyer: Frank Bane went to the Council of State Governments and Hoehler took his position as executive director of the American Public Welfare

Q: The point is how much influence did such groups have in policy? Perhaps in general, apart from the people we have mentioned here, you could discuss this question of the relationship of professionals...

Altmeyer: Well, I think the American Public Welfare Association had considerable influence on the policies that were adopted. I think that, as with all associations of that kind, they became sort of protective associations representing the interests of the members, who in this case were state welfare directors. But this APWA performed a very important function and still does in affording an opportunity for the state officials and the federal officials to discuss and come to terms on policies. I think they have played an essential role throughout the years and a constructive role. In that respect they are quite different than the Interstate Conference of Employment Security Agencies or whatever it's called.

Q: The old Employment Security Agency.

Altmeyer: Yes. The Interstate Conference of Employment Security Agencies was very negative in its attitude. They were, to my mind, paranoic in feeling that the federal government was trying to take over the administration of the state unemployment compensation act. I think that was largely due to the influence of Paul Raushenbush of Wisconsin, who felt strongly that the law was intended to leave the states entirely free. That stems from the feeling on his part that he was really the prime force in the adoption of the type of law that was adopted. It was called the Wagner-Lewis tax-offset type, where you have a federal tax against which offsets will be permitted for contributions made under approved state laws. But, in any event, throughout the years that association of unemployment compensation administrators has prevented effective federal standards so far as benefits are concerned. And to my mind, it's been a very destructive influence preventing our unemployment compensation system to grow and develop adequate protection against involuntary unemployment.

Q: Would you discuss your relations with the press and its attitude toward Social Security over the years?

Altmeyer: I don't know what you mean by the press. The press, insofar as news stories are concerned, I don't think had much influence one way or another. There were these columnists that thrive on disagreement or mal-administration or worse that they suspect or it's alleged exists in government. Drew Pearson and Robert Allen ran some stories that there was disagreement between me and Paul McNutt, for example, as there was, it so happened.

Q: They went after the John Doe thing.

Altmeyer: Some employees, disgruntled employees, even in such an immaculate organization as Social Security was and is, leaked stories that there were millions of so-called John Doe items. Well, that was the name that was used for items where the employer failed to give the proper name or identifying number so that you could not post (the earnings report). It didn't mean that there were that many employers' reports. It meant that there were that many individual employees--and there were; it ran into the millions in the first two or three years--individual employees not reported correctly. And they were put in what we called a suspense account, and eventually 90% were posted after the required correspondence, contacts with employers, to identify the reporting. These stories were to the effect that this meant that millions of workers wouldn't get their proper benefits. But that was kind of a six-day run. I think it faded out after a few months. It worried us at the time because everything worried us. We were very insecure. The benefits hadn't started. This was in the late '30s, and as a result we were on trial. The cost of administration, for example--nobody seemed to get on that, but they could have really taken us apart on that because the cost of administration of old age benefits before anything except a small lump sum of benefits were paid probably did exceed the benefits. I was always shivering in my boots that someone would come along--and I had built up in my mind what I was going to say. I was going to point out we were building a basement and you don't get excited about the cost of the basement except if it exceeds the proper proportion of the cost of the house when it's completed. But I never had to use that analogy. I was always a little sorry because I thought it was probably a good one.

Q: But I imagine you preferred it the way things turned out.

Could you also discuss your relations with other government departments such as the Treasury and the Internal Revenue Service ?

Altmeyer: I'm sure that any head of a department or agency of the federal or state government look upon the other departments, such as the budget department, civil services, as simply pains in the neck. They are in their very nature something in the nature of a check upon actions, your freewheeling actions, which you feel are in the public interest and in the interest of good administration. So you always have arguments with the Bureau of the Budget as to whether they understand the necessity of allowing enough of your requests and argue with the Civil Service as to whether they understand the kind of people you need and the kind of examination that should be given, and most particularly, the classification that you should give to this, that or the other position. They always want to have a lower classification and you always want a higher classification and pay a higher salary. That's in the nature of things. I wouldn't say any of that was serious at all. The only incident that I recall between the Social Security Board and the Internal Revenue Service was this: In the early days the Internal Revenue Service, which was independent, as we were, were concerned with the collection of taxes and we were concerned with the payment of benefits. We had exactly the same definition of employer, employee. It was absolutely essential that we have the same definition and interpret these definitions identically. Otherwise, employers would either not be paying contributions on employment that we would take into account for the payment of benefits or vice versa. We would not be paying benefits on employment that the Internal Revenue had taken into account for tax purposes. The second possibility is remote. But the first possibility existed and was an actuality in a considerable proportion of cases. That is to say, as a tax collecting agency, the Internal Revenue Service developed a policy over the years of being absolutely sure that a tax payer was liable because they were subject to court review and that sort of thing before they really bore down. Therefore, they were inclined to be restrictive in the interpretation of coverage because really it was for a purpose that they didn't understand, that is, a social insurance purpose. They weren't so aware of the benefit implications as we were.

Q: You mean the nature of their function...

Altmeyer: Their attitude was what difference did it make if they gave the benefit of the doubt to an employer, especially if he was a small employer, so far as the tax collecting was concerned? It was a chore anyway. They didn't look upon it as a revenue measure really. They were inclined to be restrictive and limit the coverage. We were unhappy about that. We worked along and tried to resolve our differences, but there was always a considerable amount of difference. I think in the course of the years we've narrowed that down probably so that there's no serious difference at the present time. But it was the nature of the establishment, set up for constitutional reasons, that it was possible to have these differences. As a matter of fact, in the first year or two the Internal Revenue wanted to turn the job of collecting over to us, and when the law was declared constitutional and where it seemed it might be possible to do so, they urged we take it over. But the Bureau of the Budget didn't think that was a good idea, and the Secretary of the Treasury didn't, so it never was consummated. And I suppose we weren't too enthusiastic because at that time we had such a small staff that we thought we would have made a mess of collecting the revenue. That's about the only thing I can think of that was important in our relationships.

Q: Mr. Altmeyer, how would you characterize your relations with Mr. McNutt?

Altmeyer: Well, I would say they were fairly good. Mr. McNutt was, I think, a very kind gentleman and I had to disagree with him on a number of occasions; but he never bore any animus that I could discover, although our disagreement was such that he could have insisted upon my dismissal really. One was the instance where he had told the Ohio Public Assistance officials that he would support reimbursing them for $1,300,000 that had been withheld on the grounds of mal-administration, and I induced the President to veto the bill.

Q: Did that cut the ground from under him? Did it embarrass him?

Altmeyer: Of course it did because he had said that he would support it. Then the other occasion was in 1940 when he was giving a speech where he came out for a universal draft on old age pensions and I had to raise a question with the President as to whether he was prepared to support that. He said he was not and I asked Mrs. Woodward, a member of the Board, to go up to New York and call him off the platform and give him another speech to read.

I feel that both of these occurrences, if he hadn't been such a kind sort of person, would have made our relationships very uncomfortable, but they didn't seem to.

Q: Did this inhibit your relationship at all with the President--this super-imposition of the FSA?

Altmeyer: No, it did not.

Q: How about Mr. Ewing?

Altmeyer: Mr. Ewing came in as an appointee of the President. The President was very aware of straight line administrative procedures, and Mr. Ewing on his part was very sensitive to his prerogatives as head of the Department, so I was unable to continue a direct relationship with the President as I had in the case of President Roosevelt.

Q: Would you say there was a difference also in attitude toward the job itself--in the case of McNutt?

Altmeyer: Well, Mr. McNutt was permissive. He relied upon the constituent units of the agency. Mr. Ewing felt that his authority and responsibility meant that he should make all decisions, even minor decisions, and if he got any repercussions because of some decision made by one of his subordinates, he became furious. If he didn't get any repercussions, he didn't know about it; but he felt that every single decision when there were repercussions should have been taken up with him in advance, which was an administrative impossibility, there being so many decisions that had to be made every day.

Q: How about your relations with Mrs. Hobby?

Altmeyer: They were nonexistent. As a matter of fact, she was very suspicious of all of the carryover policy-making officials throughout the agency, and that included me.

Q: Did you ever meet with her?

Altmeyer: I met with her several times, but they were always standoffish conferences. There was no real trust displayed by her in me, confidence in me.

Q: Suppose we skip to nine. Would you care to appraise members of your staff and associates?

Altmeyer: I don't think that in the time now left it would be possible.

Q: How about going over to the '39 amendments? What influence, if any did such groups as the Townsendites have on the '39 amendments?

Altmeyer: I think the Townsendites had some influence, but I'm positive that the Social Security Board would have proceeded with the 1939 proposals if there had been no pressure from the outside.

Q: How much credit would you give to the advisory council as far as bringing about the proposals?

Altmeyer: I would say that they helped greatly in the acceptance by Congress of the proposals made, but we would have made exactly the same proposals even if there'd been no pressure and even if there'd been no advisory council because it was obvious what the defects in the 1935 act were. And as I said previously, the controversy relative to the large reserve helped and the creation of the advisory council helped in getting support for the proposals that we did make.

Q: Was there a full realization at the time the amendments were considered of the really revolutionary change that was being made in Social Security in the sense of instead of limiting it to individual wage earner, making it a survivor insurance?

Altmeyer: Yes. But I don't think it was revolutionary.

Q: Do you think this is a normal evolutionary process?

Altmeyer: Yes, because in other countries they have dependent and survivor benefits. It's clear that we would be moving along the same lines. Any student would not consider it revolutionary. It would be considered revolutionary in the thinking of the layman because they thought in terms of old age pensions pure and simple.

Q: Were you fully satisfied with the amendments?

Altmeyer: Yes.

Q: The reason I raise that is that Mr. Witte seems to have had a number of misgivings about them.

Altmeyer: I disagree Mr. Witte on practically everything he said in criticism. I think he didn't understand.

Q: He felt that it narrowed it, for one thing.

Altmeyer: I think he was somewhat mistaken in his analysis. Even when he was correct in his analysis I think he was wrong in his conclusions, both as regards the narrowing of coverage and the more restrictive eligibility requirements. I just think he had too much pride of authorship in the original bill to thoroughly and impartially appraise the improvements, as I see them, that were made.

This question of Mills' opposition to the proposed changes: I don't understand who suggested that. I don't recall that he did.

Q: How about the last question. I think we just touched on it a little bit. In general, what value do you feel that the advisory councils have played in the evolution of Social Security?

Altmeyer: I think advisory councils are very helpful. They do give you the opportunity to understand what the reaction is of interested groups. This particular advisory council in connection with 1939, there were so many people who had been in contact with us and knew what our joint thinking was so that it was already pretty well developed.

Q: You're speaking now of these people being in a sense propagandists with their own groups.

Altmeyer: Yes

Q: How about their influence on Congress? Would you say it played a major role?

Altmeyer: I think it was helpful. I don't think it was necessary in the 1939 amendments to call upon them to exercise any direct influence. I think the fact that we did have this advisory council and they did make this report and the members of the committees of Congress realized that there had been this review and agreement on the part of the advisory council, helped greatly.

Q: Of course this was the second one really, although the first one had played a role in it. Would you say the institution of this had a greater influence as additional advisory councils were appointed through the years, looking ahead to '47-'48?

Altmeyer: I think that when you came to the later ones, they had even more influence because at that time we had a Republican Congress, you see, at one time and a Democratic President. And the next advisory council was appointed by the Republican majority in the Senate Finance Committee. So I think there they probably had an even greater influence for favorable consideration with Congress.

Q: How about themselves with their own groups?

Altmeyer: Oh, unquestionably they influenced acceptance on the part of their groups. I'm very strong for advisory councils.

Q: How about the selection of them?

Altmeyer: I think that's always a problem, that you don't just pick people that you know agree with you in advance. I think that would be a mistake. While we certainly tried to pick people that were informed and whom we thought were friendly, I don't think that we deliberately excluded people that we thought would disagree, and it would have been a mistake. You don't get rid of a thorn by not including persons who might disagree. Mr. Linton was on and he didn't agree. He wasn't on the first one, I guess, but he was on the second. We didn't raise any objections. I don't think it would have made any difference if we had because the Republican majority appointed him.

Q: Did you have any instances of being turned down because of opposition to the idea--in other words, making an offer to somebody and then their turning you down?

Altmeyer: No, we didn't. We weren't proposing anything revolutionary--but nevertheless they thought it was going to be important and they'd be playing an important part.