Mr. GOODWIN. I have the absolute figures on the placements, Sen

ator.

The CHAIRMAN. Would you supply that for the record? We will not take the time now.

Mr. GOODWIN. Yes.

If you will, I will appreciate it.

The CHAIRMAN. It will be published as a part of your statement

at this point.

(The material referred to is as follows:)

TOTAL UNITED STATES NONAGRICULTURAL PLACEMENTS

Using the fiscal year 1941 as a base, nonagricultural placements in fiscal 1946 increased 41.7 percent over 1941; fiscal year 1947 increased 16.5 percent over 1941 ; fiscal year 1948 increased 18.8 percent over 1941; fiscal 1949 increased 6 percent over 1941.

The war years are not shown as the United States Employment Service at that time was a part of the War Manpower Commission.

Agricultural placements are not shown as agricultural placement responsibility was transferred to the Department of Agriculture during the war years and was located there until January 1, 1948.

Mr. GOODWIN. For those years I mentioned it was about 17 percent higher than at any previous time.

The allegation of nonconfidence on the part of employers in the Bureau, if housed in the Department of Labor, is I think further refuted by a su survey made in 1947, at a time when the Employment Service was in the Department of Labor. This survey was made by two Northwestern University faculty members, and has been published by the American Management Association. It showed that of the companies covered by the survey, only 6 percent used the Employment Service in 1940, while there were 56 percent using the Employment Service in 1947. That is due in part to the natural growth of the Service, but it certainly refutes the allegation that the employers wont use the Service if it is in the Department of Labor.

The opinion has been expressed by several witnesses that costs of operating the program would increase if the Bureau of Employment Security is transferred to the Department of Labor. This testimony has been based upon the assumption that an entirely new regional office organization would have to be established. The facts are that the Bureau of Employment Security now has its own regional employees, housed in Federal Security Agency regional offices. If we were transferred, the same personnel would be required to operate the program regardless of the agency to which the Bureau was attached, and the same amount of space would be required.

If the Bureau of Employment Security regional personnel were to move from the Federal Security Agency regional offices, it is reasonable to assume that the Federal Security Agency could get along without the space vacated by this personnel.

The point has been made that in the transfer of the United States Employment Service to the Federal Security Agency in July 1948 approximately a half million dollars was saved in that transfer. That is approximately correct. All of these savings, however, were a direct result of merging the two separate functions, the United States Employment Service and the Unemployment Insurance Service which previously had been separated.

It is my judgment on this cost question, gentlemen, that given the same work loads, the cost of operating the program would be approximately the same in either department. Certainly it can't be expected that an agency that has been transferred as frequently as this one can save money every time it is transferred simply because it is transferred.

Senator Ives. Well, in that connection, I think you would agree that with the Security Agency established as it now is, with its various branch offices and regional offices, there would be a saving. I mean, let us be fair about it. There would be a saving if these two services were left there, as they are at the present time, rather than to place them somewhere else, where presumably additional offices would have to be established. I mean, I can't see how anybody can very well avoid that conclusion.

Mr. GOODWIN. Well, I don't believe so. And part of this is based on our experience in making the transfer this last year, Senator. You see, we have the personnel now.

be transferred over.

That same personnel will

Senator Ives. The same personnel; yes. But it is the offices I am talking about.

Mr. GOODWIN. But it would require the same amount of space. If we vacate a certain amount of space with the Federal Security Agency, they will get along with that much less space. There won't be any greater over-all cost to the Federal Government.

Senator Ives. What do you think about Mr. Atkinson's statement that there was $131,000 or $132,000 involved in the closing of those branch offices?

Mr. GOODWIN. I don't know where Mr. Atkinson got his figures. I don't think he got them from official sources. The savings that we made last year were all the result of bringing the employment service and unemployment insurance together. And we made about a half million dollar saving in that merger. The savings were not made by transferring our regional offices into the Federal Security Agency regional offices.

Mr. Chairman, that concludes what I wanted to say. I merely wanted to end by giving my wholehearted endorsement to the plan, and I want to recommend it to the members of the committee.

Senator IVES. I would like to ask a question, if I may, right off the bat.

Mr. GOODWIN. Yes, sir.

Senator IVES. I may be wrong, but it is my impression that heretofore your agency has not been in favor of having this transfer made; but rather you have been inclined to favor retaining these two services in your administration. Am I wrong about that? Somewhere I have gotten the idea that at one time or another you strongly favored their retention in the Social Security Administration.

Mr. GOODWIN. Not me, Senator.

Senator Ives. I do not mean you. I am not accusing you of anything. I think it is on the record some place that that was the situation. I stand to be corrected, however.

Mr. GOODWIN. Last year I testified in favor of the reorganization plan, and the year before that I testified in favor of the plan, which would have kept the Employment Service in the Department of Labor. Last year there was some testimony introduced indicating opposition by the Federal Security Agency to the plan. I do not recall whether Mr. Ewing testified, but my recollection is that he did

not.

Senator Ives. Somebody representing the administration I think, did.

Mr. GOODWIN. Yes. Well, I am not sure who that was.
Senator IVES. I seem to recall it.

Mr. GOODWIN. Yes; there was something of that kind, I know. My recollection is that there had been a letter written by the Agency to the Bureau of the Budget, when the Bureau of the Budget was trying to get the views of the various agencies, and that that letter was introduced into the record. That was followed by testimony of some of the officials in the Department.

Senator IVES. Do you know what occasioned the change, in part? Mr. GOODWIN. Well, I suspect it has something to do with Mr. Ewing's position this year, which is wholeheartedly in favor of the plan.

Senator Ives. You mean his proposed status?

Mr. GOODWIN. No; I mean his position on plan 2.

Senator Ives. Well, I have the testimony here, and apparently I

am correct. I will not take the time to read it in.

Senator Schoeppel, have you any questions?

Senator SCHOEPPEL. No questions.

Senator Ives. Thank you very much, Mr. Goodwin.
Mr. GOODWIN. Thank you.

Senator Ives. Is Mr. Kenneth C. Patty here?

STATEMENT OF KENNETH C. PATTY, ASSISTANT ATTORNEY GENERAL, STATE OF VIRGINIA, RICHMOND, VA.

Mr. PATTY. Mr. Chairman, I have a prepared statement, but I have decided that I will merely read the first three paragraphs and ask the reporter to insert the balance of it in the record, and then discuss one or two points in it.

My name is Kenneth C. Patty. I am assistant attorney general of Virginia and have been assigned to the Unemployment Compensation Commission of Virginia, as its counsel, since December 1, 1937.

I appear, on my own responsibility and as representative of the Unemployment Compensation Commission of Virginia, in opposition to President Truman's Reorganization Plan No. 2 of 1949. I am authorized by the Governor of Virginia, Hon. William M. Tuck, to state that he is in complete accord with the views expressed in this statement. I had the opportunity to appear before the Executive Expenditures Committee of the House in opposition to similar plans proposed by Mr. Truman in 1947 and 1948, both of which each branch of Congress defeated.

The situation has not changed since the plan was defeated the last time. The same reasons that prompted the Senate to reject the pending proposal twice before exist now. These reasons have been stated by various individuals from time to time, and it is my desire to summarize them in this statement.

The balance of the statement is a summary, set off in 14 different paragraphs. I have furnished the clerk, I believe, with a copy of my

statement.

Senator IVES. Without objection, if you are not going to read them, they will be incorporated in this record.

Mr. PATTY. Thank you, sir.

(The material referred to follows:)

money nor the interests who dip into the fund should supervise the expenditure of the fund. It is unsound to permit those who are after a public fund to be the judges of who is eligible for a slice of it.

I wish to call attention to the following statement contained in the report filed by the Brookings Institution with the Hoover Commission, appearing on page 19 of the report.

"The nature of this issue regarding the proper location of the Federal agency administering the Employment Service and Unemployment Compensation precludes its settlement on a purely factual basis. A decision must be arrived at on the basis of judgment, and in last analysis this judgment must be exercised by the duly elected representatives of the people. The Brookings Institution is not submitting any formal recommendations on the subject because detailed facts alone do not determine the issue." [Emphasis supplied.]

The Senators have exercised their judgment three times by rejecting the proposals contained in the plan now under consideration by this committee and the Senate. If the Senators allow this plan to become effective, it will be a long step in the direction of the ultimate establishment of a labor government in this country. You cannot afford to turn these agencies over to a Federal agency whose top officials are virtually selected by the two major labor organizations.

Mr. PATTY. I would like to elaborate a little on paragraph 4, in which I state that the unemployment-compensation system, and by that I mean the Employment Service and the payment of benefits, should be operated on the principle that those who receive unemployment-compensation benefits are willing and eager applicants for suitable work.

I think that that is one of the fundamental principles of the whole unemployment-compensation system, and that if that principle is abused, it will lead to a condition that would be unhealthy for the economy of the country.

We have taken the position all along, in Virginia, that the personal views, or the union views, the union regulations, with respect to what a worker should be willing to accept in the nature of a job, should not be controlling when an individual is out of work and can't find a job, and comes down and applies for benefits. Up to the time that he applies for benefits, we have no jurisdiction or control, and no interest in the matter except to interest him in locating a job, and if he comes down and merely registers for a job, and does not apply for benefits, then we confine our efforts to find for him a job that he seems to think is most preferable, or that he desires. But if he wants to cause a drain on the public fund, then we think he has to relax and be willing to make some sacrifice in order to find a job.

Senator SCHOEPPEL. Might I ask you, sir: Do you not think that he ought to be allowed some reasonable degree of latitude, though?

Mr. PATTY. We do think that. It is not written into the law, but it is an administrative policy, that those who are in skilled work, the professions, or work such as that of a steelworker or carpenter, if they are out of work, should have a reasonable time, at least 5 or 6 weeks, within which to try to locate themselves in similar jobs, if they can possibly do so. But we do take the position that if a job is offered an individual where there is an open shop, for instance, at the same rate of pay that he could get in the closed shop, but he refuses to take the job merely because of a union requirement that he not to take an open-shop job, we then take the position that he is not justified in the stand that he has taken. That is, assuming that the wage paid by the open-shop man is on a parity with the wage that would be paid by the other prospective employer, the open-shop employer.

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