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will make any change in those regulations dealing with placement in the Employment Service, assuming this transfer were to be made.

Secretary TOBIN. I cannot say whether I would or not; but I will state my primary objective would be to place just as many people as possible, and I honestly believe that by placing the Bureau of Employment Service in the Labor Department, you will be placing it in a Department where tremendous helps can be given by so many other bureaus in the placement of people. In the Federal Security Agency, it stands alone by itself; there are no other agencies that can contribute to a more efficient job by the present Director. But our Bureau of Labor Statistics, with its very accurate measurement throughout the country by classes and by skills, can make a great contribution. The Women's Bureau can make a contribution. The Bureau of Labor Standards can make a contribution. The Veterans' Reemployment Rights Bureau can make a contribution. All of them tied together can make contributions towards, in my opinion, the placing of people. All of the information will then be under one roof and a much better labor marketing job can be done, because we will have more information about unemployment and the unemployment situation. If there is one function that I do believe belongs in the Department of Labor, it is job placement.

Senator IVES. I cannot quarrel with you on that in principle at all. However, I do want to ask you this in that connection. Do you expect, assuming this transfer were to be made, to leave as much authority as is possible with the States in the administration of it?

Secretary TOBIN. I will carry out whatever law the Congress has in effect, and at the present time the States have great power under the Federal law.

Senator IVES. They certainly have now, and I think the regulations that have been promulgated have been relatively satisfactory, and I assume that you will be guided more or less by the State requests and State conditions, would you not?

Secretary TOBIN. As long as they conform to the law, and as long as I feel that they are doing a really efficient job in the placement of unemployed people, and then I would have constantly as my guide this large and impartial board of advisers, representing management, labor, and the public.

Senator IVES. Thank you very much, Mr. Secretary, for letting me bother you with some of my questions, but these are questions that are posed to me. I simply pass them on to you.

Secretary TOBIN. Senator, every question you asked was a very fair question, and I want to say I learned something by them.

The CHAIRMAN. Senator Smith, do you have a question?

Senator SMITH. Yes, Mr. Chairman. I was interested in what the Secretary said about mail, because I feel, generally speaking, as you do, that a great deal of our mail comes about by organization and pressure, as we say; but this seems to be a different mail, Mr. Secretary. I have had a good deal of it from Maine, and I have figured that it comes from lack of confidence in the Labor Department. The general feeling seems to be that labor controls the Labor Department, and if I may, I would like at this time to commend you for talking as you have about the advisory committee, and urge you above all else to have them active, with special emphasis on the public. If you can publicize

it, and have the people know that we do have an advisory committee made up of labor, management, and the public, and the public after all is the group that is greatly affected, I believe you can bring about a confidence in the Labor Department, bringing all the functions together, and getting the service that we want and need.

Thank you, Mr. Chairman.

Secretary TOBIN. I might say, Senator Smith, that the Labor Department probably has more committees on which management is represented and I mean top-flight management-than any executive agency of the Federal Government, but that is not known generally. Senator SMITH. But the public does not know that, and what it does not know is that the public is also represented on this advisory committee. If you had some way of having meetings, that is, if you had them meet day in and day out for awhile, and have the meetings properly publicized, and have an agenda worthy of publicity, I believe you could do something toward building up one of the very, very needed departments in the Government.

Secretary TOBIN. Thank you, Senator.

The CHAIRMAN. Senator Schoeppel, do you have a question?

Senator SCHOEPPEL. I would like to make one observation, Mr. Secretary, with reference to your query about the type of letters that we are getting.

I might indicate that from my State these letters with the sole exception of one, have been from small-business concerns, employing say from 25 to 325 people, and in those letters some of them very candidly say that big-business concerns of the country as well as big labor can well take care of themselves. They can afford to have people on the job year-around in Washington, and that the small-business men are not able to do that. They say, "We are concerned about what standards are going to be set up, what new regulations are going to follow, what changes of policy are going to be confronting us if we go on in our business enterprise here." With the one exception that I mentioned, the Beechcraft industry in my own State, in the city of Wichita, Kans., these letters are coming from people who are operating in many sections of my State and who were concerned about what the change will do. That is what causes me to try to clear up some of these things in the interest of these small-business people. The type of business letter that I am getting now on this proposition is not from the propagandists-the writers are genuinely sincere in their desire to find out what will happen to them and most honest in their approach.

Secretary TOBIN. Senator, in 1946 I had the State advisory board, representing public, management, and labor, comparable to the one that will be set up in the Department, go through the entire State of Massachusetts, holding public hearings, meeting with the employers of the State to get their side of the story, meeting with workers, and holding open hearings available to the public, to get the best advice and experience in the local areas of the State or the operation of the law; and I can assure you that if the B. E. S. comes to the Department I would want to encourage every State in the Union to do the same, because in the main the administration of this law is at one State level and operations are under a State law within the confines of the statute that has been passed by the Congress.

Senator SCHOEPPEL. That is fine, and I concur with Senator Smith in her suggestion that one of the factors to dispel this fear is the fact

that you have this kind of a committee, which, if utilized, can do a tremendous good in presenting this question, and dispel some of these fears.

That is all, Mr. Chairman.

The CHAIRMAN. Senator Long, do you have any questions?

Senator LONG. Mr. Secretary, I would just like to state that I am very happy to see you here this morning, and that the Labor Department in my State has found that your Department has worked and cooperated with them most harmoniously, and they are happy to see this program come down. We certainly hope it goes into effect. Thank you, Mr. Chairman.

The CHAIRMAN. Thank you very much, Mr. Secretary.

Secretary TOBIN. Thank you, Mr. Chairman, and members of the' committee.

The CHAIRMAN. Is Mr. Findley present? If so, will you come around, please?

STATEMENT OF A. R. FINDLEY, VICE PRESIDENT OF WIEBOLDT STORES, INC., CHICAGO, ILL., AND CHAIRMAN OF THE SOCIAL SECURITY COMMITTEE FOR THE NATIONAL RETAIL DRY GOODS ASSOCIATION, CHICAGO, ILL.

Mr. FINDLEY. Mr. Chairman, I shall endeavor to be brief, because I know the time is short.

My name is Ray Findley, and I am vice president and treasurer of the Wieboldt Stores, Inc., who operate department stores in Chicago.

I represent the National Retail Dry Goods Association, an association of some 7,000 or 8,000 stores, also the Illinois Federation of Retail Associations, as well as the local Chicago Retail Merchants' Association, and I am appearing in opposition to the President's Reorganization Plan No. 2, of 1949.

Others will appear before you to argue the matter of whether there are or are not actual savings to be realized through the institution of this particular reorganization plan. I want to confine most of my remarks to the matter of experience rating which has been discussed here in questions and answers propounded to the Secretary of Labor. Every State in the Union, as well as all the Territories, that has this particular kind of law, unemployment compensation laws, has experience rating. It seems rather strange that there can be any question about experience rating when the legislatures of all the States have decided that experience rating is something that is desirable. Experience rating itself is in the first place reasonable and logical. I will not go into the discussion, but I believe you will agree that a highly seasonable organization or business such as a cannery or perhaps construction in some of our northern latitudes should pay either wages sufficient to carry their employees through a period of unemployment, or else they should be required to pay unemployment compensation taxes and levies sufficient to carry them through if they do not do it direct.

On the other hand, we have certain steady types of employment, such as insurance, banking, public utilities, where the employment is very steady. In those cases, it does not seem reasonable that they should have to pay for the period of time when other employees are off of the pay rolls.

But this question of reasonableness is not the only virtue to be found in experience rating. The big point in experience rating is that if it were not for experience rating there is no one responsible for a reasonable consideration of claims. That to me is the big thing. The employer, who is going to have charged up against his experience figures and have to pay if an employee is permitted to file an unfair claim and collect thereby, is vitally concerned, and he makes it his business to find out whether that employee really has a claim, and if it is not a just claim, to fight it out and to attempt to have the claim denied. If it were not for this particular fact or factor, I wonder just who would police these unemployment compensation claims? The question might well be raised, and I think it has been probably answered to some extent, as to who desires to knock out experience rating. Of course, our answer is the Department of Labor.

This annual conference of labor officials, consisting of the labor and industrial commissioners from the respective States, meets each year in December in Washington. Along with these State officials are invited the top officials of the American Federation of Labor and the CIO in each State. This conference is supervised by high officials of the Department of Labor.

In conducting this conference, presumably the Secretary is carrying out the purposes that were stated in the act which provided for the Department of Labor.

If you will permit me, I will just read those purposes here:

The purpose of the Department of Labor shall be to foster, promote and develop the welfare of the wage earners of the United States, to improve their working conditions, and to advance their opportunities for profitable employment.

That talks about one side-the wage earners themselves—it does not talk about the public, nor does it talk about the employers; and I agree with the one remark that has been made here; that the public generally is very, very much concerned in this whole problem.

If we do away with experience rating, I think we will find that the scandals that we had some years ago that developed with WPA and also with the distribution of surplus foods, are going to fade into insignificance, because there will be no one at all to object to the unfair claims. Who is going to object if some of these individuals, even as they now do, take their vacations in Florida and in southern California and other places that are desirable, and then file claims with their home States, as they do in the case of Illinois, for unemployment compensation, because they are not able to find employment in these particular cases where they would like to have their vacations? Again, who is going to object if a bricklayer moves from the place where he has found employment out to a rural area where there is no construction and proceeds to file a claim for unemployment because he is not able to get employment at that particular place in a field in which his highest skill can be employed? Or, if a coal miner leaves a coal area and goes somewhere else and he is unable to find employment in his highest skill, who is going to police that? If it were not for the experience rating, there would be nobody to police it.

At the present time, the employer is concerned because the claims, where the payments are made on that claim to the particular individual, are charged up against his experience. We have many cases

in our own stores of married women who come to us for the purpose of making money for a while to pay off the accumulated bills. They only want temporary work. In some cases, they tell us in advance that they only want temporary work, but very frequently after they acquire the amount of money they desire, they quit, go back to the primary duty of a housewife, and then proceed to file a claim for unemployment compensation. All right, we are immediately notified under the Illinois law about these claims, and we do something about it. If they worked only for the purpose of temporary employment, we bring that to the attention of the department and the department very frequently will deny the claim. It was not for those that the unemployment compensation laws were established in the first instance.

I am wondering whether or not these are the individuals that the Thirteenth Annual Conference of Labor Leaders had in mind when they concluded in their recommendations as follows:

The experience rating provisions in State laws have proven to be powerful incentives to the adding of disqualifications and restrictive eligibility provisions to the State laws and to narrow interpretation of these provisions, with the result that many persons in need of protection of unemployment insurance are deprived of their benefits.

I do not think any employer is trying to deprive any person of his benefits, who actually and properly is entitled thereto; but what we are trying to stop is the raiding of the funds that have been built up by payments from the employers.

The unemployment compensation laws have been established for the country as a whole. They were intended to benefit all classes, not only the employees themselves, but the employers; but above all else, the public was supposed to be benefited thereby. These laws do benefit the employee, they benefit the employer, they benefit us in retailing. The payments made under these laws have a tendency to level out the business cycles. To that extent they are good.

The American people generally are not accustomed to having an umpire or referee chosen from the participants in the game. The arbiter in all cases should be unbiased. This leads to confidence on both sides, and also, and very important in this particular respect, it leads to confidence on the part of the spectators. In this particular instance, I think that we can determine that the spectators are the public generally. The Department of Labor, in our opinion, is not unbiased. It is not unbiased because of the very object in mind when the Department was established. We know that the Secretary is invariably chosen after consultation with high officials of both the American Federation of Labor and the CIO. We also know that the Under Secretaries of Labor are practically designated by the American Federation of Labor and the CIO. One of the Under Secretaries, I think, invariably comes from the American Federation of Labor official staff and the other one from the official staff of the CIO.

In conclusion, I think it very significant that the highly respected task force which made the study for the Hoover Commission relating to these particular functions failed to make any recommendation to the Commission, but submitted the following language:

The nature of this issue regarding the proper location of the Federal Agency administering the employment service and unemployment compensation precludes

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