Mr. EWING. Well, we felt that undoubtedly the Labor Department was presenting its side of the case, and we wanted to present the other. When the judge had ruled, that was the end of it so far as we were concerned. We would go along with the decision wholeheartedly.

Senator DONNELL. Mr. Ewing, you say you did not have the whole picture. Was not this matter thoroughly considered at the session of Congress last year?

Mr. EWING. I was not in office then, Senator.

Senator DONNELL. Well, you are not accustomed to signing letters here over your official signature without some investigation of what goes into those letters, are you?

Mr. EWING. No; you are right on that.

Senator MURRAY. That was not in the letter, he said.

Senator DONNELL. I understand that.

Mr. EWING. You asked me about what went on last year. That is what your referred to.

Senator DONNELL. You did not study what went on last year, then? Mr. EWING. No.

Senator DONNELL. You were undertaking to advise or to give to the Director of the Budget, Mr. Webb, your opinion and your feelings and your statements of fact, without having studied the record which was available to you, is that correct?

Mr. EWING. No; I did not go back to the hearings of Congress, as to what happened on this matter.

Senator DONNELL. Well, did you go into the debates in Congress? Mr. EWING. No.

Senator DONNELL. You made no study either as to the hearings or the debates, at all?

Mr. EWING. No.

Senator DONNELL. Was there anything that was concealed from you that you know of?

Mr. EWING. No.

Senator DONNELL. You could have ascertained the fact, could you not? You could have ascertained the whole picture?

Mr. EWING. Yes, sir.

Senator DONNELL. All the facts, the position that the Labor Department took last year, when the matter was up before Congress; that was available to you, was it not?

Mr. EWING. I was sure that they presented that.

Senator DONNELL. Of course you were.

Mr. EWING. And I was presenting our side.

Senator DONNELL. And there is not one word in this letter that says "Mr. President, or Mr. Director of the Budget, we are saying this, but after all we are putting up an argument here," you did not say this in your letter?

Mr. EWING. No.

Senator DONNELL. Did you not send this to the Director of the Budget to accept as 100 percent as your view, and as being a correct and honest opinion?

Mr. EWING. I certainly did.

Senator DONNELL. That is your opinion, even after you learned all the facts, is it not?

Mr. EWING. No, Senator; that is not.

Senator DONNELL. Excuse me?

Mr. EWING. That is not my position. My position is that I still do not know those other facts. I have not gone into them. I gave him our side of the case, and the President is the one that had both sides. It was not my job to present the Labor Department's side of the case. I was trying to give a full presentation of our side. Now, the President had both; I did not, and in the light of his knowing both sides, he came to a conclusion, and I am sure it was the right one.

Senator DONNELL. Well, with all the facts which you today have in your possession, and your knowledge, you are still of the same opinion that you were when you wrote this letter of December 5?

Mr. EWING. There is one important fact that has happened since that; the President has made his decision, and that changes me very much because I respect his judgment.

Senator DONNELL. I have observed that, and that seems to have changed quite materially your position on this matter.

Mr. EWING. That is right.

Senator DONNELL. Now, you do not regard officially the opinion of any individual, no matter how it has altered your position with regard to the Government, as being absolutely infallible, do you?

Mr. EWING. No; but I am sure the President's judgment in this matter is better than mine.

Senator DONNELL. Well, you are an eminent lawyer; you practiced law for a good many years, in the firm of which Chief Justice Hughes was a member in New York.

Mr. EWING. That is right.

Senator DONNELL. And later in the firm of which his son was a member, is that right?

Mr. EWING. That is right.

Senator DONNELL. You have served in your practice of the law as counsel in numerous important matters under appointment and others, have you not?

Mr. EWING. Yes, sir.

Senator DONNELL. Mr. Ewing, without debating this question further, the fact remains, and I submit very respectfully but very clearly, I trust, that this letter nowhere from the beginning to the end of it, insofar as I can see, qualifies it by any statement to anybody expressly or impliedly, that either you did not think you had all the facts or that you are merely presenting an argument which was not intended. to be a correct statement of what you believe.

Mr. EWING. Well, Senator, I think the letter itself states as forcefully as possible what I was presenting; it was obvious that it was a partisan letter, and certainly when I write a letter I do not point to it and say, "Don't pay any attention to it."

Senator DONNELL. You say is obviously is a partisan letter?

Mr. EWING. Certainly.

Senator DONNELL. Well, I do not observe that it is. I observe in this letter there appear to be arguments which you thought were sound, and you still think are sound, do you not?

Mr. EWING. Yes, but I did not think of trying to argue both sides of the case in the letter. I was arguing one side.

Senator DONNELL. I understand that you are only presenting what you thought were the ultimate conclusions as to what the facts were that were within your knowledge.

Mr. EWING. Yes.

Senator MURRAY. The facts within your department.

Mr. EWING. The facts in my bailiwick.

Senator MURRAY. You are not taking into consideration the facts within the knowledge of the Labor Department?

Mr. EWING. No.

Senator DONNELL. You did not take into consideration the facts in the Labor Department at all?

Mr. EWING. I did not know them.

Senator DONNELL. How does it happen, then, Mr. Ewing, that you refer to the fact here, as I stated, that you understand that let's just see where that is here-that "because of certain comments that appear regarding proposals to transfer elsewhere certain units of this agency, particularly the Bureau of Employment Security, it might be well to emphasize again the relationship of this program to other programs of this agency

Mr. EWING. Yes.

Senator DONNELL. That was referring to the Labor Department? Mr. EWING. That is right.

Senator DONNELL. Were you not undertaking and advising the Director of the Budget frankly and honestly what your opinion was as to what ought to be done with respect to those proposals to transfer that to the Labor Department, and you did not say in that letter or by any supplement, oral or written, or by secret gesture of any kind that Mr. Webb was not to take this as an outright statement?

Mr. EWING. No, I did not.

Senator DONNELL. You did not tell him it was just a lawyer's letter?

Mr. EWING. No.

Senator DONNELL. Do you not think a lawyer, generally speaking, is reasonably frank in the presentation of matters? Mr. EWING. Well, I think I was quite frank.

Senator MURRAY. You were more than frank.

Senator DONNELL. I do not think that I care to argue it any more, Mr. Chairman. The facts, I think, speak for themselves very clearly. Senator MURRAY. I think the matter is very clear. The letter was written upon the advice and assistance of the men in his department, and undertook to place before those who were considering this prob lem the arguments in support of having it in that department, and without taking into consideration the arguments that could be made in support of the other agency having it.

So, I think it is a very simple matter. I do not think we need to get confused about the matter at all.

Senator DONNELL. I have just one further question. I do not observe in this leter anywhere, where you say, Mr. Ewing, to Mr. Webb, that this is merely an argument or a brief presentation of an advocate. You did not say that?

Mr. EWING. No.

Senator DONNELL. Or anything like that.

Mr. EWING. No, I did not say that.

Senator DONNELL. Thank you.

Mr. EWING. Thank you, sir.

Senator BALL. Mr. Sifton.

STATEMENT OF PAUL SIFTON, NATIONAL LEGISLATIVE

REPRESENTATIVE, UAW-CIO

Mr. SIFTON. My name is Paul Sifton. I am the national legislative representative of the UAW-CIO. I am appearing here at the request of Mr. Nathan Cowan, chairman of the CIO legislative committee, of which I am a member.

CIO President Philip Murray has endorsed the President's Reorganization Plan No. 1 of 1948.

His statement reads:

The Congress of Industrial Organizations is supporting the President's Reorganization Plan No. 1 of 1948. This plan provides for leaving the United States Employment Service permanently in the United States Department of Labor where it is now located. It also transfers to that Department the Bureau of Employment Security of the Federal Security Agency, and its unemploymentcompensation functions.

The Congress of Industrial Organizations is, therefore, opposed to the House Concurrent Resolution 131 which has as its purpose the defeat of Reorganization Plan No. 1.

The United States Employment Service has been administered by the United States Department of Labor for 9 of the 15 years of its operation. As a part of that Department, the United States Employment Service has been able to establish itself in the confidence of workers and employers alike, and has contributed increasingly to the economic well-being of this country. This has been due, in a large measure, to the fact that in the Department of Labor the Employment Service has been able to use the services of other bureaus in the Department which contribute, to maximizing and stabilizing employment. The continuation of the United States Employment Service in the Department of Labor is necessary to assure that the most effective service will be provided to employers, workers, veterans, handicapped workers, and the general public.

We recognize that there is a very close relationship between the Federal activities and functions of the United States Employment Service and the Bureau of Employment Security. A basic objective of our economy is the creation of employment opportunities and the placement of workers in jobs. The necessity for payment of unemployment benefits arises from the failure to achieve this objective. Coordination of these functions is essential and should be carried out through the Government department most directly concerned with this objective.

Since its creation in 1913, the United States Department of Labor has been most intimately concerned with providing services to employers and workers so as best to promote opportunities and profitable employment, and in this connection has developed resources and facilities concerning labor-market conditions, labor turn-over, and other problems affecting employment and working conditions. It is, therefore, especially important that these two programs, dealt with in Reorganization Plan No. 1, be coordinated federally in the Department of Labor. In contrast, we do not believe that these two programs can be similarly advanced in an agency such as the Federal Security Agency which is concerned primarily with welfare, health, and education programs.

In passing, I would like perhaps to belabor the point in view of the record. The question now arises on this charge of bias-which is the biased agency? [Reading:]

The principles involved in the President's Reorganization Plan No. 1 of 1948 cannot be regarded as a political issue. The plan conforms with the objective

set forth in the Republican platform of 1944 which states:

"Labor bureaus, agencies, and committees are scattered far and wide, in Washington and throughout the country, and have no semblance of systematic or responsible organization. All governmental labor activities must be placed under the direct authority and responsibility of the Secretary of Labor.

The second session of the Eightieth Congress now has an opportunity to act in conformance with the expressed objectives of both parties.

Approval of Reorganization Plan No. 1 of 1948 will result in increased administrative efficiency. We, therefore, urge you to vote against House Concurrent Resolution 131 which would defeat this plan.

We should like to make a few statements regarding the opposition to this Reorganization Plan No. 1. It appears to fall principally under these headings:

1. Fear that the United States Department of Labor, created in 1913 by a Republican Congress and President to promote the welfare of wage earners, cannot be trusted with the interrelated and inadvisable functions of administering the United States Employment Service and Unemployment Compensation;

2. Fear that the Unemployment Compensation benefit trust funds will be depleted if the plan becomes effective;

3. Fear that merit-rating reductions in tax rates paid by some employers will be wiped out if plan No. 1 becomes effective;

4. Fear that eligibility and amount and duration of benefits would be changed to make eligibility broader, amounts greater, and duration longer;

5. Fear that the provisions of the Unemployment Insurance Tax Act and of State unemployment-compensation acts protecting unemployed workers against being referred to unsuitable jobs or jobs vacant because of a labor dispute would be changed in the workers' favor;

6. Fear that adoption of Reorganization Plan No. 1 would interfere with plans for amending the Unemployment Insurance Tax Act to provide a 100-percent tax offset to the States.

We should like to discuss each of these points.

First, it should be noted that all the objections cited have one thing in common: Fear. Reorganization Plan No. 1 is being fought with scare propaganda not based on facts.

The first objection, that because its statutory functions include the promotion of the welfare of labor, the Department of Labor cannot be trusted with the job of finding jobs for unemployed wage earners and with paying them earned benefits amounting to less than 50 percent of their normal wages while they are unemployed, seems to us to be the most serious and disturbing objection.

We feel that the USES and Unemployment Compensation are functionally two hands of the same body and that if either is to function as it was intended to function, they must be operated together in a single agency and that the Labor Department is the natural location for the reasons set forth by CIO President Murray.

In all the talk of "neutrality," we are disturbed by the unsupported charges of bias against the Labor Department. Employer confidence in the Labor Department is demonstrated by the fact that USES placements have risen from 12 percent, prewar, to 18 percent of all placements at the present time. Employer confidence is demonstrated by the general acceptance and use of Bureau of Labor Statistics findings in collective bargaining and, I believe, in making industrial, business, and market decisions.

The charge that, because of alleged bias the Labor Department is unsuited for this, that or the other function has become a common argument against this and other legislative proposals. It is one that labor challenges, as applied to this plan and generally.