Background
He was born in McRae, Georgia, the son of William Bryant Folsom, a merchant, and Margaret Jane McRae.
https://www.amazon.com/Our-economic-policy-home-abroad/dp/B0007FHV0U?SubscriptionId=AKIAJRRWTH346WSPOAFQ&tag=prabook-20&linkCode=sp1&camp=2025&creative=165953&creativeASIN=B0007FHV0U
He was born in McRae, Georgia, the son of William Bryant Folsom, a merchant, and Margaret Jane McRae.
He was educated in the local schools and graduated from the University of Georgia at Athens with a B. A. in 1912; he then entered the Harvard Graduate School of Business Administration and was awarded an M. B. A. with distinction in 1914.
Folsom was hired by Eastman Kodak in Rochester, New York, in 1914; since he had taken a course in business statistics at Harvard, one of his first assignments at Eastman was in the statistical field.
His employment was temporarily interrupted in World War I, when he served overseas in the United States Army as a captain in the Quartermaster Corps with the Twenty-sixth Division of the American Expeditionary Force. On his return from the war, he became a staff assistant to George Eastman and was asked to organize a statistical department to forecast sales and business conditions.
He quickly rose from this position to be assistant to the president (Eastman) in 1921, assistant to the chairman of the board in 1925, assistant treasurer in 1930, treasurer from 1935 to 1953, and member of the board of directors from 1947 to 1952, and from 1958 to 1969. Folsom's most enduring achievement at Kodak was in the area of pensions and retirement benefits.
George Eastman, whom Folsom described as a rugged individualist who did not believe in pension plans, had devised a wagedividend plan in 1912, paying bonuses based on profits. By 1927 these reached the equivalent of six to eight weeks' pay for employees with at least five years of service. Inefficient older workers lacking resources had to be kept on the company payroll, so Folsom took the lead in developing a pension plan for Kodak that enabled the firm to retire such workers without creating a burden for society.
The company agreed upon Folsom's group annuity plan, the costs of which were paid from the bonus fund, which included life insurance and total disability as well. This work brought Folsom into contact with developments for a national social security program.
As more companies failed in the Great Depression, he came to feel that the federal government could not stand idly by. Following the 1929 stock market crash, Folsom began a study at Kodak (later expanded to include thirteen other firms) of the problem of stabilizing production and employment that became known as the Rochester Unemployment Benefit Plan, a precursor of unemployment insurance.
Because of Folsom's interest in old-age pension plans, President Franklin D. Roosevelt appointed him to the President's Advisory Board of the Committee on Economic Security (1934 - 1935) and as a United States employer delegate to the International Labor Conference at Geneva, Switzerland (1936).
His role in the former was pivotal, and earned him the sobriquet "Chief architect of the Social Security Act of 1935. " Edwin Witte, Executive director of the United States Committee on Economic Security, which drafted the Social Security Act, remarked that Folsom's testimony to the Senate committee was particularly influential. In addition, as a member of the Federal Advisory Council on Social Security (1937 - 1938), Folsom had the major responsibility for convincing his business colleagues that government sponsored old-age insurance would increase productivity and help to stabilize the economy.
Folsom was one of the original trustees of the Committee on Economic Development (CED), organized by Paul G. Hoffman (later administrator of the Marshall Plan) in 1942. A nonprofit, nonpartisan group of some of the nation's leading businessmen, the CED was formed to help business plan for quick reconversion and expanded production, distribution, and employment after the war, and to help determine through objective research economic policies that would encourage the attainment and maintenance of high production and employment.
Folsom chaired the CED field development division from 1942 to 1944 and helped establish 2, 900 local committees with 60, 000 volunteer workers to maintain contacts with 2 million employers about jobs and opportunities in the postwar period. Folsom resigned from this post in March 1944 to become staff director of the House of Representatives' Special Committee on Postwar Economic Policy and Planning (the Colmer Committee), designed to facilitate orderly demobilization and reconversion after the war. Just one year after the war's end, 90 percent of contract settlements and 95 percent of plant clearances had been completed.
When the work of this body was finished in 1946, with eleven reports that would become the basis for legislation concerning postwar problems, Folsom returned to the CED.
He was elected one of its six vice-chairmen and was chairman from 1950 to 1953. Folsom was then under secretary of the Treasury from January 1953 to July 1955. During this period he represented the Treasury on a cabinet committee to determine how federal employee benefits compared with those of "progressive industrial concerns" in private industry, finding the lack of group life insurance and group health insurance as serious gaps in coverage.
He therefore sponsored a group life insurance program for federal employees underwritten by private industry. Federal employees paid the rate generally contributed by workers in the private sector, with the federal government making up the difference. As under secretary, Folsom also helped revise the federal income tax law (the Income Tax Revision Act of 1954) by recommending some twenty principle revisions of the tax code in order to encourage private capital investment and to remove some of the inequities.
Folsom next worked with the Department of Health, Education, and Welfare on a study of old-age and survivors' insurance that resulted in extension of coverage and liberalization of benefits under the 1954 amendments to the Social Security Act. President Dwight D. Eisenhower appointed Folsom secretary of health, education, and welfare on Aug. 1, 1955. He espoused an activist philosophy: under Folsom, medical research activities were expanded and important new health legislation was enacted, including programs for construction of research facilities, training more public-health personnel and nurses, and a continuing national survey of the extent and nature of illness among the population.
He supported the Salk polio vaccine program instituted in 1955 and helped coordinate efforts to reduce the shortage of doses. He also broadened efforts to control air and water pollution. Although Folsom argued against lowering women's age of eligibility for Social Security benefits to age sixty-two (along with women's organizations, the United States Chamber of Commerce, and Catholic charities), the law was changed in 1956. Folsom was an advocate of Medicare.
Along with other cabinet secretaries, he served on the cabinet committee that investigated narcotics traffic during 1956. The body recommended that the states develop treatment programs and increase penalties for drug pushers. A record number of persons were rehabilitated under the expanding vocational rehabilitation program.
The appearance of Sputnik in October 1957 gave great impetus to the movement to strengthen the teaching of science and mathematics, and bolstered education generally. Folsom, believing that the United States lagged behind other nations in the sciences and languages, lobbied from 1955 to 1957 for the passage of the National Defense Education Act (passed in 1958).
When the bill passed, he deemed it "the most comprehensive federal-aid-to-education bill since the land-grant college act was passed in 1862. "
It proposed turning eleven state teachers' colleges into liberal arts colleges and establishing a revitalized university. Throughout his business and federal careers, Folsom was active in local civic affairs, serving on school and college boards, bank boards, chambers of commerce, and entities in the Rochester, New York, area.
He also published a number of articles on old age insurance, economic security, economic policy, higher education, and industrial relations.
Folsom died in Rochester, New York, and was buried in Arlington National Cemetery.
After resigning the secretaryship on August 1, 1958, Folsom, with the presidents of the Ford and Carnegie foundations, served on the New York State Committee on Higher Education, recommending in 1959 to Governor Nelson Rockefeller that the state increase funding for public undergraduate and graduate education, limit expenditures for private institutions, and discontinue tuition-free higher education.
In his writings, Folsom compared and contrasted the system of utilizing staff assistants in both business and government, noting that in the former the staff was personally selected and tended to remain in that company, whereas government staffers were short-term newcomers.
Quotations:
Folsom published his findings as "Old Age on the Balance Sheet" (Atlantic Monthly, September 1929): "Good management cannot keep employees when they are no longer needed. . The solution lies in the inauguration of a sound and adequate pension plan. "
Funds for the services of the Office of Education were more than doubled during his tenure, educational research was expanded, and he streamlined the department's bureaucracy. In general, as he put it, "I had to avoid programs that would run counter to the President's strong views that the federal government should not interfere with the functions of state and local governments. "
He served as a captain in the U. S. Army during World War I and was a member of the American Academy of Arts and Sciences.
He married Mary Davenport on November 16, 1918; they had three children.
