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ment Service." The Council is composed of men and women representing employers and employees in equal numbers and the public. I should like to submit for your information a list of the outstanding public, management, labor, and veterans representatives who serve on this Council. As you can see, they are 33 of the leading citizens of the United States.

The CHAIRMAN. Do you have that list?

Secretary TOBIN. It is attached to the statement presented to the committee.

The CHAIRMAN. This may be incorporated in the record at this

point.

(The list referred to follows:)

MEMBERS OF THE FEDERAL ADVISORY COUNCIL

PUBLIC REPRESENTATIVES

Dr. William Haber, professor of economics, University of Michigan, Ann Arbor, Mich., chairman of the Council.

Mr. John J. Corson, circulation director, Washington Post, Washington, D. C. Mrs. Saidie Orr Dunbar, past president, Federated Women's Clubs, Portland, Oreg.

Dr. Merle E. Frampton, principal, New York Institute for the Education of the Blind, New York City.

Mr. Fred K. Hoehler, executive director, Community Fund of Chicago, Inc., Chicago, Ill.

Mrs. Henry A. Ingraham, former president, national board, YWCA, Brooklyn, N. Y.

Mr. Roscoe C. Martin, bureau of public administration, University of Alabama,
University, Ala.

Mr. Ira D. Reid, professor, Haverford College, Haverford, Pa.
Mrs. Anna M. Rosenberg, New York City.

Mr. Max F. Baer, national director, B'nai B'rith Vocational Service Bureau,
Washington, D. C.

Dr. Sumner Slichter, professor of economics, Harvard University, Cambridge, Mass.

Dr. Edwin E. Witte, department of economics, University of Wisconsin, Madison, Wis.

MANAGEMENT REPRESENTATIVES

Miss Bess Bloodworth, vice president, the Namm Store, Brooklyn, N. Y.

Mr. Prentiss L. Coonley, business consultant, Washington, D. C.

Mr. John Lovett, general manager, Michigan Manufacturers' Association, De

troit, Mich.

Mr. George Mead, president, the Mead Corp., Dayton, Ohio.

Mr. H. S. Vance, chairman of the board, Studebaker Corp., South Bend, Ind.

Mr. Frank DeVyver, Duke University, Durham, N. C.

Mr. Marion Folsom, treasurer, Eastman Kodak Co., Rochester, N. Y.

Note: At the moment there are two vacancies.

LABOR REPRESENTATIVES

Mr. John Brophy, director, industrial union councils, Congress of Industrial Organizations, Washington, D. C.

Mr. Harry Boyer, president, Pennsylvania Industrial Union Council, Harrisburg, Pa.

Mr. Nelson H. Cruikshank, director, social insurance activities, American Federation of Labor, Washington, D. C.

Mr. James L. McDevitt, president, Pennsylvania Federation of Labor, Harrisburg, Pa.

Mr. H. L. Mitchell, president, National Farm Labor Union, American Federation of Labor, Washington, D. C.

Mr. Paul Sifton, national legislative representative, UAW, Congress of Industrial Organizations, Washington, D. C.

Mrs. Katherine Ellickson, assistant director of research, Congress of Industrial Organizations, Washington, D. C.

Mr. James Brownlow, secretary-treasurer of the metal trades department, AFL, Washington, D. C.

Mr. Joseph M. Rourke, secretary-treasurer, Connecticut State Federation of Labor, Bridgeport, Conn.

VETERANS REPRESENTATIVES

Mr. Robert S. Allen, author, member of American Veterans' Committee, Washington, D. С.

Mr. Lawrence J. Fenlon, chairman, national economic commission, American Legion, Chicago, Ill.

Mr. Omar B. Ketchum, director, national legislative service, Veterans of Foreign Wars, Washington, D. С.

Mr. Millard W. Rice, executive secretary, Disabled American Veterans' Service. Foundation, Washington, D. C.

Mr. Edgar Corry, Jr., past national commander, American Veterans of World War II, Washington, D. С.

Secretary TOBIN. I want the advice of these men and women on the administration of this Bureau, and I will consider very carefully the advice of these men and women in the administration of this Bureau, if the Congress sees fit to transfer the Bureau to the Department of Labor.

I am not going to attempt to discuss the fact that this is a FederalState program, or the desirability of a united administration of the Employment Service and the Unemployment Compensation Service as both of these points have already been covered adequately by the Director of the Bureau of the Budget and the Federal Security Administrator in their statements to this committee.

I do want to point out to you that this plan was the unanimous recommendation of the Hoover Commission. That Commission was established on a bipartisan basis. It had as its chairman the Honorable Herbert Hoover. It had among its members distinguished Members of the Senate and the House of Representatives, namely, you yourself, Mr. Chairman, Senator George D: Aiken, of Vermont, Representative Clarence J. Brown of Ohio, and former Representative Carter Manasco, of Alabama. It also listed among its members high Government officials and distinguished private citizens. The Commission put in almost 2 years of intensive study and spent almost $2,000,000 of the taxpayers' money on its studies. This expenditure of time and money should not be lightly disregarded. It seems clear to me that there is a heavy burden of proof upon any special interests opposing this plan to prove that all of these distinguished men were wrong and that the plan is wrong.

The plan has the support of the very people in the Federal Government who are charged with its administration and with the responsibility of making the Bureau of Employment Security operate most effectively and efficiently for the benefit of the people of the country. It has the unqualified support of the Chief Executive of the United States, the President. It has the wholehearted support of the Federal Security Administrator, who is now charged with its administration. It is strongly supported by the Director of the Bureau of Employment Security, who actually administers the program on a day-to-day basis. I believe that the judgment of these gentlemen is entitled to the greatest weight in your determinations. If the Congress approves this plan, the President of the United States, the Secretary of Labor, and the Di

rector of the Bureau of Employment Security will have the opportunity and the responsibility of proving that the Hoover Commission was right. We will welcome this opportunity and this responsibility.

There are five points that I want to discuss today which I understand are of special interest to the committee. They are: (1) The experience rating system; (2) the question of bias; (3) the cost of the program in the Labor Department; (4) The interdependence of the program with other Department of Labor programs; and (5) the nature of the program.

Experience rating system: I have been advised by the Solicitor of Labor that under the statute the administrator of the program is limited in the exercise of his judgment in approving State statutes pertaining to unemployment compensation, including experience rating systems set up in those statutes; and that for all practical purposes any State can read the Federal statute and enact a State statute pertaining to experience rating which will comply with the very specific statutory standards set out in the Federal act.

The policy of the Labor Department with respect to the retention or abolition of the experience rating system has not been determined, and I should not care to give a decision on this matter until I have studied the facts more fully. I do know that the Federal Security Agency has advocated the abolition of the system, but I have absolutely an open mind on the matter. When and if the question does arise as to whether the Federal statute should be changed, I shall consider very carefully the advice of the Federal Advisory Council on this subject. As you will note from section 3 of the plan, we have deliberately set up the Federal Advisory Council not only to render advice on the employment service, which was its original duty under the Wagner-Peyser Act, but we have also set it up to render advice in connection with the unemployment compensation service, which will include advice on any change in the experience rating system. You have in mind, of course, that any decision making a change in the experience rating system is a matter for the Congress to determine and not a matter for me, or any other officer of the Executive Department, to determine.

The question of bias: I understand, Mr. Chairman, that the question has been asked concerning the advisability of placing the Bureau of Employment Security in the Department of Labor on the ground that employers, who now utilize its services, would lose confidence in the Bureau if it is placed in the Department of Labor.

The first point I want to make is that the administration of the Bureau of Employment Security is and must be governed solely by the provisions of the Wagner-Peyser Act, the Servicemen's Readjustment Act, the Social Security Act, and the Federal Unemployment Tax Act. In the Department of Labor presently we administer other similar labor statutes. We administer the Davis-Bacon Act, the Walsh-Healey Act, and certain child-labor provisions of the Fair Labor Standards Act. Each of these statutes contains within its own four corners its own mandate and must be interpreted by me in the light of the specific language of the particular statute. For example, under the Davis-Bacon Act, I am required to determine the minimum wages to be paid to workers and mechanics employed on certain Government construction contracts. The Davis-Bacon Act itself prescribes the standards which I must follow in making these determinations. My determinations are governed solely by the provisions of the Davis-Bacon Act. Under the Walsh-Healey Public Contracts Act I am required to make determinations of the minimum wages to be specified in certain Government supply contracts. Here again the act specifies the standards which I must follow in making my determinations, and again my determinations are governed solely by the provisions of the Walsh-Healey Public Contracts Act. Under the Fair Labor Standards Act, I am required to make determinations which affect the question of whether the employment of children between the ages of 14 and 16 in certain occupations constitute oppressive child labor. Here again the act prescribes what I must determine, and again my determination is governed solely by the provisions of the Fair Labor Standards Act.

There are other similar acts, the administration of which is outside the Department of Labor, but under which I am required to make determinations concerning labor matters. For instance, under the Hospital Survey and Construction Act, under the Federal Airport Act, and under the National Housing Act of 1949, I am required to determine the prevailing wages. Here again the act in each case prescribes the standards which I must follow in making my determinations, and again my determinations are based solely upon the provisions of each particular act.

Each of these statutes vests discretion in the Secretary of Labor. But each of them, I point out again, prescribes the standards by which he is to be guided in exercising his discretion. It is these statutes themselves by which he must be guided in making the determinations to which I have referred, rather than by the general statement of the purposes of the Department of Labor set forth in the 1913 act.

So, too, it must and will be with respect to the programs administered by the Bureau of Employment Security. The purposes and standards which are to guide the administration of the United States Employment Service are clearly specified in the Wagner-Peyser Act and the Servicemen's Readjustment Act. Those which are to guide the administration of the Unemployment Compensation Service are clearly set forth in the Social Security Act and the Federal Unemployment Tax Act. In administering the Bureau of Employment Security, the administrator of the programs is governed solely by the provisions of these acts.

The Department of Labor, like all other departments and agencies of the Government, is bound by the Constitution of the United States to perform all of its functions in a manner consistent with the welfare of all the people of the United States. In this connection, it is worth noting the record of cooperation with and assistance to employers that has been achieved by the Department of Labor under the 1913 act itself. No evidence has ever been produced that employers refuse to use the facilities of the Department. On the contrary, the evidence is clear that employers have used its facilities and on a constantly increasing scale. Hundreds of thousands of employers regularly cooperate with the Department by supplying it with information necessary to its Bureau of Labor Statistics' programs. In addition, many management associations, labor organizations, colleges, and universities have requested and received special study data from the Bureau of Labor Statistics at cost. Thousands of persons from all walks of life have served without compensation as volunteer veterans' reemployment rights committeemen to help the Department perform efficiently and economically its functions of assisting veterans with respect to reemployment rights problems.

More than 40,000 employers, from the largest corporations down to the smallest, have cooperated with the Bureau of Apprenticeship in the establishment of more than 40,000 apprentice programs having approximately 250,000 apprentices under training. During the war period the Bureau of Labor Standards carried on an accident-prevention program, utilizing primarily hundreds of safety engineers lent from private industry and paid by their private employers. During the 24 years when the Employment Service was in the Department of Labor, employers did use it and on a constantly increasing scale. As a matter of fact, employers used the Employment Service more, as shown by job orders and placements in the official records of the Employment Service in the years 1945 to 1948, when the Employment Service was in the Department of Labor, than at any other peacetime year since the Wagner-Peyser Act was enacted in 1933. This, to my mind, is a complete refutation of the specious allegation that employers will not use the Employment Service in the Department of Labor.

The Bureau of Employment Security will be operated in the Department of Labor in the same impartial manner as it now operates and by the same impartial personnel who now operate it.

I might say that also the Department of Labor prepares the cost of living index. This cost of living index is the basis of the wage for over 4,000,000 workers in the United States as a result of contracts arrived at between workers and employers. I think that is one of the greatest evidences of the confidence of the employers of the United States in the Department of Labor and the impartiality of the Department, because when they will trust the Department of Labor to practically set the wage rate of employees through the index that is established through our Department, I think it is an indication that they do feel and do know that the Department of Labor handles that very important function in an impartial, honest manner.

The cost of the program: I know that the question comes to mind when a reorganization plan is proposed as to what will be the eventual

outcome as to costs.

It will be possible, when the Bureau of Employment Security is placed in the Department of Labor, to achieve greater assurance that in its administration primary emphasis will be placed not only on obtaining jobs for unemployed workers but also on developing maximum job opportunities. This will be made possible through coordination of the employment service functions with those of other bureaus of the Department on a day-to-day basis. Achievement of this result will, in my opinion, make a sizable reduction in the amounts which have to be paid out to unemployed workers in the form of unemployment compensation. If there were no other justification for this plan, these savings alone would warrant its approval.

I can assure you that it will not cost any more to administer this Bureau in the Department of Labor for the present work load, but one of the most serious questions here, in my opinion, is whether the Government is getting the most out of every dollar invested. It is my belief that with the close day-to-day working of the interdepend

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