who argue that functions, which are logically and properly a part of the Labor Department, should be withheld from it because it is a "labor" department do not follow their arguments to a logical conclusion. If we are to have a Labor Department at all, then it seems obvious to me that it should be entrusted to perform its proper functions.

We have, in our Federal Government, a Labor Department created to protect the rights of the workingman as we have a Federal Security Agency to protect the indigent, the helpless, and to improve the public health. We have a Department of Commerce to help the merchant and manufacturer in their problems of production, sales, and management, and a Department of State to represent us in foreign relations. Are we to assume that all these Departments are so occupied with their appointed tasks as to exclude the general public interest from consideration? The assumption is so ridiculous that it should not be dignified by denial.

The declared purpose of our Federal-State employment security program has as its primary aim the securing of employment for the unemployed workman and the payment of alternative benefits to him if he continues to be involuntarily unemployed. The corrolary effect of this basic aim, upon the employer and upon the public generally, is well known to all of us who directly administer the program in the States. None of us have forgotten that we are public officers engaged in the public interest. Many of us work within the structure of a State labor department. There is no reason to assume that the Federal partner in this program is any less objective or more apt to forget his public duty. It therefore appears sensible to allocate these duties to the Federal department where they logically fall and to ignore a specious argument based on a manufactured fear and distrust of anything with the word "labor" attached to it.

With respect to the second objection, that no action to unify these functions should be taken now because the Hoover committee is studying the whole question of administrative organization, I suggest that those who raise it are not entirely sincere or at best do not fully understand the proposal. Earlier in this statement I briefly indicated the existing areas of trouble and confusion caused by the present separation of these functions. There is common agreement among all State and Federal people who have a direct concern with this program that these problems can be and should be resolved by unifying the functions in a single department. Since all the authorities in this field agree, why should we endure the curses of the present situation a moment longer than necessary. At best, Congress may not act on the recommendations of the Hoover committee within 2 years.

I favor this reorganization plan as an immediate and satisfactory solution to a trying situation and urge that this committee recommend against the resolution to defeat it.

STATEMENT OF W. 0. HAKE, COMMISSIONER OF THE TENNESSEE DEPARTMENT OF EMPLOYMENT SECURITY

Senator BALL. The next witness is Mr. W. O. Hake, commissioner of the department of employment security, Nashville, Tenn.

Mr. HAKE. Mr. Chairman, I have a statement which I would prefer just to file for the record.

Senator BALL. Very well. It will follow your testimony.

Mr. HAKE. I am the administrator of the employment security program in Tennessee and speak not only as such but for the Governor of the State.

I am opposed to the plan as presented by the President to the Congress. I would like to take up some of the points that have been raised by the proponents of the plan in order to develop the thoughts which I have put in the record.

I take the position that a program should not be placed in the Department of Labor because the Department of Labor is an advocate of the workingman, and when I say that I don't mean to have any of the connotations that may have been mentioned by proponents of the

plan. I think that by the very creation of the Department of Labor, the Department must be a protagonist of the workingman.

I look at the set-up there, if the whole program went to the Department of Labor, similar to the situation between an attorney and his client. I think by any reasoning we may put on the Department of Labor's authority and responsibility, it must promote, foster, and develop the interests of the worker.

Now before the unemployment-compensation part of the program came into the picture, we have to consider that in 1933 in order to give the workingman a chance, Congress saw fit to create the United States. Employment Service through the Wagner-Peyser Act so they would have a service that wouldn't cost exorbitant fees as private service at that time and had for many years before charged people for assistance in getting a job.

At that time and at any time I would say that the lone function of the United States Employment Service could well have been put, as it was, and could have remained in the Department of Labor because it was a service they were rendering.

Now the Department of Labor we all know, doesn't create jobs. Now through the United States Employment Service it did attempt to find jobs for the idle worker. It makes no difference where the United States Employment Service is located. So far as that Service is concerned, it would still have the responsibility and obligation of trying to find jobs for unemployed workers.

We must remember that the unemployment compensation part of this program, which involves money-and it now involves approximately $8,000,000,000 of money-has never at any time been under any department other than the Social Security Board and Federal Security Agency.

At the time that the Social Security Act was being discussed in 1935 I find in the record that there was a great deal of debate as to whether it should be put in the Department of Labor, and because of the fact, and many other factors, perhaps, that it involved the payment of money and that it was primarily an insurance program, Congress in its wisdom finally did not place it in the Department of Labor but put it in the Social Security Board, and it is now in the Federal Security Agency.

So for the first time we are now asked to take an insurance program and place it over in a department that has for its primary duty to promote and develop and foster the interests of the workingman; and I certainly am not biased in my approach because in our State we have a completely integrated program in the department of employment security, and it has no other function with it but that.

The question of getting people jobs, of course, is the first and foremost thing, and I would like to touch this idea, this program's relationship to other parts of the social-security program, and I am not a social worker or social minded. I am a lawyer by profession, so I can say this without any feeling that I am inclined in one direction; but there has been a great deal said about the nonrelationship between this program and other parts of the social-security program.

To me it seems very closely related. When you take the first thing that happens in this program, to try to find a person a job, that is what we try to do in the States. In the absence of getting a job, if

they qualify we pay them benefits for a short period of time to sort of bridge the gap of their unemployment difficulty at that time.

Now then, it goes right on into other parts of the program. Certainly at a certain stage the old-age and survivors insurance picks up many, many of our so-called "clients" as they reach the age of 65. Many of those are going out of our program now because they work beyond the age of 65, or did during the war.

Then the next line of defense, of course, after the old-age and survivors, if they don't have that, is the public-assistance program which is a part of the welfare program, so as a scheme of social program they are all tied together very closely.

I want to touch just a moment on our relationship with the OASI. It was indicated here that there was no use, that we had no use for the OASI. Actually in our State our use for the OASI records and information is so great that all of their files are located in our building and not in the social security building at all, because we have at least a hundred calls for those records, where they themselves have only one; so we have a tremendous use for and a close association with and collaboration with OASI in our State.

Senator BALL. May I ask you, do you mean that in Tennessee you use the OASI wage records as the basis for determining benefits under UC?

Mr. HAKE. No, sir.

Senator BALL. You have your own wage records?

Mr. HAKE. That's right.

Senator BALL. Why do you use them so much?

Mr. HAKE. We use them because we get letters from many people in the State and from the Senators and the Congressmen about John Doe having trouble and complaining about his not getting his check. Senator BALL. You mean his Federal check?

Mr. HAKE. No. That is the check from the State, the unemployment compensation. He doesn't get his check, so we are set up as most States are, with social-security numbers which are the numbers of the OSI, so we have to go to the records of the OSI to find that person, because we have no social-security number. We use them to find the people about whom you may write to our office, to give them the answer on the question as to whether or not they are entitled to their check on unemployment compensation.

Senator BALL. Don't your own records show that?

Mr. HAKE. Yes. The letter comes in without a social-security number. We have to find it then by a devious process which is too complicated for me to try to explain to you, because I don't know it well enough myself, but a good clerk finds it from the OASI records.

We appreciate the service. We have many dozens of files of the OASI in our building that we use for that purpose. It is just one of the services that are closely allied with us. That is the reason I bring it up.

Going back to the question of advocating that the Department of Labor is, of necessity, biased, I just want to say that when you are subject to certain conditions in a courtroom, an advocate is charged with the responsibility of doing all he can within his authority and power to serve his client. When it involves money like this is now going to do, if and when it should go over to the Labor Department,

he has nothing to do with making the decision final as to what he is going to get in the case.

That is determined finally, as we all know, by an impartial tribunal, and that is the court; and I am firmly convinced that we should not put a program in a department that that could be brought up that they would be biased to the extent where they would want to properly advance the interests of people involved.

Senator BALL. Can you tell me how they could do it at the Federal level, how they could force the payment of excessive benefits out of this fund, or somehow or other gum it up? I have been trying to figure out how they could do it.

Mr. HAKE. Well, I won't try to figure out how we can keep them from doing it. It is very difficult, Senator, to put your finger on what might happen on something that has not existed. I am not frightened, but at the same time when you know the power of rules and regulations, they can become very persuasive in certain States.

Even in the Federal Security Administration we have resisted a good many things that they have asked us to do, and they are supposed to be a neutral agency for the 9 years that I have been in the program, on legislative matters. They come in with a lot of pressure.

Rules and regulations are things that become quite persuasive, especially when you can be held out of conformity because you don't do a certain thing as you should and your grants will be cut off; and to some of us weaker administrators, they scare us at some time.

I want to mention at this stage, when you ask how they can do it, I can't give you the modus operandi, but Congress gave us the WagnerPeyser Act. It is included in this little pamphlet here, but that is what was passed by Congress.

Now what we have got from the United States Employment Service since November 15, 1946, when we got them back, is this. Here is the plan of operation which we are obliged to take. That is a rather big plan there that the States are required to take. We struggled with that a long time before the return to the Employment Service.

Then we have rules and regulations which come out in large volumes like this. As to what might happen to the fund, that is problematical, but there is the ability

Senator BALL. This is the plan of operations submitted by the State of Maryland.

Mr. HAKE. That's right. Every State had to submit and had to be approved. Now that is the State of Maryland.

Senator BALL. Most of this is just picking up your statutes and your own rules and that sort of thing.

Mr. HAKE. That takes in the entire program. There is some deviation in different States.

Senator BALL. You had to do that with the Security Agency too?

Mr. HAKE. No plan of operation as such for the Security Agency, but we have many rules and regulations. I am not trying to low-rate the USES in favor of the Security Agency. We had lots of rules and regulations from them that would pile up just about as big as this, but we don't want two of them.

Senator BALL. To tell you the truth, I never could discern great difference in policy and viewpoint between the Federal Security Agency and the Department of Labor. Could you?

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Mr. HAKE. Well, excepting that they revolve around a series of programs.

Senator BALL. Is there any real difference in viewpoint on such things as merit rating, suitable employment? Those are the two that are really bothering anybody. Is there any real difference in viewpoint?

Mr. HAKE. Not that I know of. I know they are both against experience rating, as far as I know.

Now, of course, if this Bureau of Employment Security goes over to the Labor Department, then the rules and regulations concerning that, of course, will be prepared by the Labor Department. What might come out of there, I don't know.

Senator BALL. You are familiar with the rules that you have been operating under since November 15, 1946, in the Employment Service? Mr. HAKE. That's right.

Senator BALL. And in many ways the Employment Service is the key to unemployment compensation, referral standards, suitable work definitions and all that sort of thing.

I was looking over those rules and regulations. Is there anything in the rules and regulations that have been put out, formulated by the Department of Labor since the service was returned to the States that in your opinion is attempting to push the States into modifying their own laws and operations?

Mr. HAKE. Well, I would have to answer that by saying, of course, up to the present moment the Labor Department has had no jurisdiction over the benefit side, the unemployment compensation. They stayed out of that field entirely and could not get into it until it comes over. That was all on placement and things of that kind, which is their field at the moment and will be until this is settled.

Senator BALL. Well, have you any specific complaint about the rules and regulations in the Employment Service, at the Federal level? Mr. HAKE. I had a lot of them before we finally ironed some of them out. I will agree to that, without being specific. We have a great many now, I think, that are in conflict with our law, and a great many we are not paying attention to because as a matter of practical operations you can't.

Do you know in the State level we have one program, and now we have this? It is irritating the way we have to do it with two budgets, and I agree with John Davis and all the others that we hope to get this thing in one place where we can have one budget.

I was a little frightened yesterday when Robert Goodwin indicated that there would be coordination of these two programs in the Labor Department. We don't want coordination. We need some integration. Now as far as my office is concerned, I coordinate with your office when you ask for some information down there, but that lacks a lot of being integration; and if you are going to have to have two budgets, two auditors-and you mention they are not in teams. The auditors of the two programs do come in teams, two auditors, two fiscal men, two trainers. They come from these regional offices from two small offices in far parts of the city there, and I was frightened when I thought that they didn't plan on changing that.

Senator BALL. Did you have a single budget from—when was it— 1939 to 1942 ?