Benefits under the old age and survivors insurance system are financed by equal taxes on the employer and the employee. They are based on the employee's wages (exclusive of amounts in excess of $3,000 received in any one year). The rates for both the employer and the employee are 1 per cent of the employee's wages until 1943 when the rate is increased one per cent for each. It will be increased an additional one-half per cent each three years thereafter until the maximum of 3 percent for the employer and 3 per cent for the employee is reached in 1949.

The Act as amended in 1939 establishes a Federal Old-Age and Survivors Insurance Trust Fund in the Federal Treasury to be supervised by a board of trustees consisting of the Secretary of the Treasury, the Secretary of Labor and the Chair

man of the Social Security Board. All funds collected from the old-age and survivors insurance taxes are appropriated to this trust fund.

Administration of old-age and survivors insurance necessitates maintaining a continuous wage record, under a separate account number, for each employee until he is eligible for benefits, in order to determine his average monthly wage received in covered employment. Every three months employers report the amount of each employee's wages, with his name and account number, to the Bureau of Internal Revenue, when they pay the employer's and employee's taxes. The Bureau forwards these reports to the Social Security Board where each employee's wages are recorded to his account Wage record accounts had been estabHished for approximately 56,000,000 persons by the end of the 1941 fiscal year.

The employment security program for which the Social Security Board is the Federal administrative agency combines the two functions of placement of workers through the public employment service and the payment of unemployment compensation benefits to unemployed workers qualified under their State unemployment compensation laws.

The Social Security Act provides for Federal cooperation in the establishment and mantenance of State unemployment compensation systems. This cooperation is manifested in two ways: provision is made for grants to the States to cover the cost of administering State laws; and employers are allowed credit for their contributions to a State unemployment fund against the Federal unemployment tax.

The Federal unemployment tax is an excise tax levied on the payroll of employers with eight or more employees. It amounts to 3 percent of wages paid (exclusive of amounts in excess of $3.000 paid to one employee in one year). Wages paid for certain types of employment are exempted from this tax. The exceptions include: agricultural labor; domestic service; casual labor not in the course of the employer's trade or business; services on both American and foreign vessels; service in the employ of a foreign government or its instrumentalities; employment for Federal, State and local governments and certain of their instrumentalities; family employment; service by insurance agents; service by newsboys under 18: certain part-time itinerant employment providing only nominal wages such as service for fraternal, and beneficiary associations and for schools and colleges by regular students; and services for certain charitable, religious, educational and scientific organizations not organized or conducted for profit.

Employers subject to the Federal unemployment tax are allowed credit (up to 90 per cent of the amount of the tax) for their contributions to State unemployment funds.

The establishment and administration of State unemployment compensation systems is wholly within the province of the State. The Social Security Act merely sets certain minimum standards which the State law must meet if the State is to receive Federal cooperation. By July 31, 1937, all States and Territories had enacted unemployment insurance laws and qualified for Federal cooperation. As of June 30, 1941, more than 32.000,000 employees had wage credits under state systems. By July. 1939. unemployment benefits were payable in every State.

Total unemployment benefits paid out by States since the program first started amounted to $1,540.346,539 by June, 1941. The employment service was established by the Wagner-Peyser Act of 1933 and provides for Federal cooperation in the establishment and maintenance of State employment services; the Federal Government paying part of the administrative costs of the State agency.

The employment service is not restricted to employers and employees covered by unemployment compensation. Its facilities are available to all employers and employees in the State. All States and Territories now have employment service and are receiving Federal cooperation under the terms of the Wagner-Peyser Act. By June, 1941, more than 1,500 full-time public employment offices had been established in cities and towns throughout the country. In addition there were more than 3.000 part-time and itinerant offices serving workers in less populous areas.

The Social Security Act makes provision for granting Federal funds to the States to aid them in giving financial assistance to three groups of needy persons-the needy aged, the needy blind and dependent children. The Federal grant in each case is based on the amount the State spends for its program up to a maximum assistance payment per individual. The amendments of 1939 increased the maximum for Federal contributions.

The States adopt and administer their own public assistance plans. Each State plan is submitted to the Social Security Board, and if found to meet certain standards set forth in the Federal act it is approved by the Board, and the State becomes eligible for Federal grants. Standards for State plans specified by the Federal act are designated to assure efficient administration and equitable distribution of assistance.

lent; forestry practices, including the planting of trees, maintenance or improvement of stands, restoration of nongrazing, and woodland rehabilitation, on nearly 525,000 acres; erosion-control practices, including terracing and contour ridging, on nearly 42,000,000 acres-among others, these practices consisted of strip cropping and fallowing on almost 6,000,000 acres, contour listing on about 8,000,000 acres, protecting summer fallow on almost 8,000,000 acres, and contour farming intertilled crops on nearly 8,000,000 acres. In addition, almost 75,000 dams and reservoirs were constructed. A special practice to encourage the growing of home gardens was adopted on more than 661,000 farms.

Early in 1941, the organization and methods developed by farmers during the last eight years provided the means by which the Ever-Normal Granary program could immediately be expanded into a food program to meet the increased demands of national defense and aid to nations resisting aggression. Chairmen of AAA State and county committees were appointed to head up the defense boards which the U. S. Department of Agriculture established in each State and county to correlate farmers' efforts with the national defense program.

Farmers were encouraged to use existing large supplies of feed stocks to increase production of high-protein foods such as livestock, dairy products, and poultry. In line with its integral principle of adapting the program to fit national needs, provisions of the AAA program were amended to stimulate production of tomatoes for canning; corn, peas, and snap beans grown for processing: flax. dry edible beans, soybeans, and peanuts for oil. Likewise, the 1942 AAA program has been drafted to encourage the necessary production of the needed foods. The principal methods used in accomplishing the purposes of the AAA program are: Acreage allotments to insure a production of major food, feed, and fiber crops adequate to meet domestic, export, and reserve requirements; payments to assist farmers in meeting the costs of practices which prevent erosion and maintain soil fertility: parity payments to help bridge the gap between market price and parity price for basic farm products; loans on crops stored in the Ever-Normal Granary; and marketing quotas when needed and approved by producers.

The program seeks to promote soil conservation by adjusting acreages of highly exploitative and intertilled crops and by encouraging farm practices that check erosion and improve the soil.

National goals for soil-depleting crops are established and allotted among individual farms. The 1941 goal for total soil-depleting crops was set at 270,000,000 to 285,000,000 acres. National goals for principal soil-depleting crops were as follows: Cotton, 27,000,000 to 29,000,000 acres; corn, 88,000,000 to 90,000,000 acres; wheat, 60,000,000 to 65,000,000 acres; tobacco, flue-cured, 750,000 to 800,000 acres; burley, 370.000 to 390,000 acres; firecured, 80,000 to 90,000 acres; dark air-cured, 32,000 to 36,000 acres; Virginia sun-cured, 3,000 to 3.200 acres; cigar filler and binder (except types 41 and 45), 60,000 to 63,000 acres; type 41, 30,000 to 31,000 acres: Georgia-Florida type 62, 2,500 to 3,000 acres: Puerto Rican, type 46, 35,000 acres; potatoes, 3.1 million to 3.3 million acres; peanuts, 1.58 million to 1.63 million acres; and rice, 880,000 to 900,000 Conservation practices carried out under the 1940 AAA program included: New seedings of legumes and grasses on over 41,000,000 acres; green manure and cover crops, over 21,000,000 acres; reseeding of pasture and range land by deferred grazing and the application of seeds. more than 31,000,000 acres; application of about 936,000 tons of 16percent superphosphate or its equivalent and over 12,000,000 tons of ground limestone or its equiva

acres.

The agricultural conservation program is financed by appropriations by Congress, as authorized by the Soil Conservation and Domestic Allotment Act. Section 303 of the Agricultural Adjustment Act of 1938 authorizes price adjustment or "parity" payments on the five crops named as basic in the actcotton, corn, wheat, tobacco, and rice-if and when appropriations are made therefor. Such payments are made to supplement and bring nearer to parity levels the income of producers.

Estimated payments under the 1940 agricultural conservation program total nearly $443,000,000, and

be made, amount to nearly $197,000,000.

Under the Ever-Normal Granary plan, the AAA is charged, through the Secretary of Agriculture, with the maintenance of continuous and stable supplies of major agricultural commodities at prices fair to both farmers and consumers. This is accomplished through acreage goals based on market requirements, and by maintaining reserves of staple crops stored under loans from the Commodity Credit Corporation. Loans on 1941 basic crops were made at average rates of 98 cents per bushel on wheat; 14.02 cents per pound on cotton; 92 cents per bushel on rice; corn rates not yet announced; tobacco rates which, like loans on the other basic crops, are made at 85 percent of parity, vary by types but are higher than for 1940. Loans were also made available on non-basic crops such as flax, barley, and rye.

When the supply of cotton, corn, wheat, tobacco, or rice, reaches the level specified in the act of 1938, thus threatening glutted markets and a collapse of farm prices, the Secretary of Agriculture must proclaim a marketing quota for that commodity, subject to approval of two-thirds of the affected farmers voting in a referendum. Quotas for peanuts must be proclaimed each year. If the required majority of farmers vote in favor of using quotas, they go into effect for the ensuing marketing year and a penalty is applied for marketing in excess of the quota.

During the 1940-41 marketing year, quotas were in effect for cotton and flue-cured and burley tobacco; farmers also voted in favor of using quotas during 1941-42 in marketing cotton and wheat, as well as for the following crops for which the use of marketing quotas has been approved for a 3-year period: Flue-cured, burley, dark air-cured, and fire-cured tobacco; and peanuts.

The sugar program was authorized by the Sugar Act of 1937, the principal provisions of which terminate Dec. 31, 1941, unless extended by the Congress. The program's primary purposes are to promote the welfare of persons engaged in the domestic sugar-producing industry, to protect the consumer, and to promote foreign trade. These ends are accomplished through a quota system regulating imports of sugar into and the marketing of sugar in the United States, and through an excise-tax. conditional-payment structure designed to bring about a more equitable distribution of income among growers, processors, and laborers.

Closely allied to the AAA wheat program is the insurance program of the Federal Crop Insurance Corporation against unavoidable losses of the wheat crop. Beginning with the 1942 crop, insurance may also be applied to the cotton crop. "All-risk" insurance on the 1940 wheat crop was taken out by nearly 361,000 growers; for 1941, this number increased to over 421,000. Over 14,000,000 bushels were paid as insurance premiums for an estimated guaranteed production of nearly 111,000,000 bushels. Also allied to the AAA farm program, but carried out under the supervision of other offices of the United States Department of Agriculture, are the marketing agreements program; the distribution of surplus agricultural commodities, including the Food Order Stamp Plan; the naval stores conservation program; and programs to encourage the export of farm products.