in our contention that the expenditure of moneys in this trust fund must be administered impartially. By action of this Congress in the Labor-Management Relations Act of 1947, controls were established for employer payments held in trust for medical, hospital care, unemployment benefits, pensions, and life insurance. The provisions of such controls require written agreement with the employer, equal representation between employers and employees in the administration of such funds, together with such neutral persons as representatives of employers and representatives of employees may agree upon (sec. 302 of title 3, Labor-Management Relations Act, 1947). We sincerely believe that if these safeguards and requirements of equal representation are deemed necessary in this law, it is equally logical and necessary that the public interest in the trust funds of the State unemployment compensation programs be likewise safeguarded. From every test of equity and justice it is our belief that Reorganization Plan No. 1 of 1948 should be disapproved and to this end it is our sincere hope that this committee will recommend House Concurrent Resolution 131 for passage. MEMBERS OF NATIONAL ASSOCIATION OF STATE CHAMBERS OF COMMERCE SUBSCRIBING TO THIS STATEMENT BY SPECIFIC AUTHORIZATION Alabama State Chamber of Commerce, Montgomery, Ala. Arkansas Economic Council-State Chamber of Commerce, Little Rork, Ark. Chamber of Commerce, Delaware, Inc., Wilmington, Del. New Jersey State Chamber of Commerce, Newark, N. J. Pennsylvania State Chamber of Commerce, Harrisburg, Pa. Senator BALL. The next witness is Paul F. Gorby, representative, Illinois State Chamber of Commerce, Chicago, Ill. STATEMENT OF PAUL F. GORBY, REPRESENTATIVE, ILLINOIS STATE CHAMBER OF COMMERCE, CHICAGO, ILL. Mr. GORBY. Mr. Chairman, I would like to submit my prepared statement for the record. Senator BALL. It will be received. Mr. GORBY. For the record, I think I have a few remarks I would like to make in addition to those that are in the record. I seem to be that odd individual, and the only one so far, that is an employer. So far, the employer has been quoted and cited, and here at last we have one. I would like to point out that back in my State, I am considered by about a maximum of maybe 15 or 20 other gentlemen an expert in the field of unemployment compensation. Now that doesn't mean an awful lot, because in this field of complex legislation, you can almost become an expert if you will read the law. Now I really believe I am normally a kind of a studious sort of fellow. As a matter of fact, I have been considered a theorist in some areas. But as I have studied this testimony, and in view of these statements, and have tried to sort out from all of the things that have been said the things that are important, I am frankly confused. Now I want to say this, since I have claimed I am an expert, that if I get lost in this stuff, in this maze of technicalities, what about my associates at home, my businessmen friends, whom I am representing? He doesn't have time to read the law. He is working pretty hard to try to pay the bill of this thing. He doesn't even know that we are down here discussing this. How can he have an opinion? How, in fact, can a Congressman or a Senator know all of the merits of this complex, technical statutory law? I really marvel at the insight and devotion of our Congressmen and Senators who sit here week in and week out listening to this deluge of technical information, not only with respect to this law, but hundreds of others. I really don't see how you can really have the grasp that you do. Now the question has come up all along-this is an introduction to this one question: What has the businessman to fear in this change? Without going into all the technicalities which I have cited, I would like to just point out to you that I think this businessman worries about the fact that all of this is so technical. It is so technical that he doesn't know what is happening to him. He is worried that if he entrusts his interests to a department which, by law, does not consider him an equal pleader, that he wouldn't even know when his interests are being tossed aside. Frankly, he is worried about those powers that have already been cited by Mr. Carroll and Mr. Atkinson. He is worried about those powers which are in the present statute and which the other State administrators have said have not been invoked. He is worried that he will be misunderstood if he pleads his case on technical matters with the Department of Labor. Now he is worried about what some of the proponents of this bill have said that they want, at some other times, and Mr. Atkinson cited those. Frankly, he is worried about what he thinks may go on behind the scenes when the program gets out of the hands of an independent agency, and he is fearful that Congress will be lost in the maze of technicalities, because he knows that Congress has already had such fears when they moved other services-if I am correct in my information such as the Conciliation Service away from the department which represented one of the two specially interested parties. Now I think the issues are very simple. Does the businessman have these worries or doesn't he? Regardless of the merits of the points of difference between the two parties, whether they are correct or not, does he have that feeling? If he does, then I think that should be recognized as a very important fact. For that reason, we recommend that the Bureau of Employment Security and the USES, if that is to be joined with it, remain permanently in the Federal Security Agency and that concurrent resolution be passed rejecting the Reorganization Plan No. 1 of 1948. Senator BALL. Thank you very much. (Mr. Gorby submitted the following brief:) STATEMENT OF THE ILLINOIS STATE CHAMBER OF COMMERCE ON REORGANIZATION PLAN NO. 1 OF 1948, TO BE PRESENTED BY PAUL F. GORBY, FERBUARY 28, 1948 Mr. Chairman and gentlemen, I am Paul F. Gorby, manager, central personnel services, Marshall Field & Co., Chicago, Ill. My appearance here is on behalf of the Illinois State Chamber of Commerce. My firm is a member of that organization and I am a member of its social security committee. The Illinois State Chamber of Commerce is a commercial organization composed of approximately 7,000 members representing practically all fields of business and industry in 240 towns and cities throughout the State of Illinois. A major part of the work of the chamber is carried out by committees of its members; the social security committee is one of these groups. That committee is concerned with problems in the field of unemployment compensation, employment service, old-age and survivors insurance, and other activities relating to our social-security laws, both State and Federal. The State chamber has long been interested in the development of social security on a sound basis. My own interest in the entire social-security structure and specifically in the Illinois Unemployment Compensation Act extends back to 1936, actually before Illinois had such a statute. At that time my company had assigned me full time to analyze the impact of the security program on our business. It is important that it be understood the members of our committee feel most strongly the need for a social-security program. It is because we feel so strongly the need for protecting the good that is in the present program that I am testifying today. Since President Truman's announced intention in December of 1947 to permanently transfer the Employment Service and the Bureau of Employment Security to the Department of Labor, the chamber's social security committee has been studying this matter. As a result of this study, it is the best judgment of this committee that Reorganization Plan No. 1 of 1948, if put into effect, would impair sound development and administration of the Nation's social-security program. The Illinois State Chamber of Commerce adopted as its own, along with other Illinois employer groups, in the spring of 1947, long before the present proposal was an issue, the following statement of policy which they believe should guide them in evaluating all proposals for developing or altering the social-security structure: "Unemployment compensation, as a phase of social security, was established and developed on insurance principles and should be considered only on that basis. Employees, employers, and the public, the parties in interest, should participate in all determinations affecting their interests and facts on which decisions are reached should be made available to them. A separate, impartial, and independent department should administer the act. Standards should be exact and audited. Acknowledging the employer's interest in a stable labor force and the employee's interest in obtaining a job and not benefits, any action taken should in no manner decrease the employer's incentive to maintain employment or the unemployed's incentive to accept job offers." It is our feeling that the present bill to place the Bureau of Employment Security and the Employment Service in the Department of Labor should be scrutinized in the light of this policy statement. The social-security program cannot be developed on a sound basis if its administration is especially representative of either of the two major interested groups who are primarily represented by the Department of Labor or by the Department of Commerce. The Department of Labor was created for the purpose of fostering, promoting, and developing the welfare of wage earners; and it is right that this should be so. We expect our democracy to operate in such a fashion as to make it right that certain departments of Government be set up to plead the needs of special groups in our society. And from these special pleadings, sifted and compromised by an independent judiciary, come the answers which are for the best public interest. We feel strongly the need and place for a Department of Labor. But with a program as vast and comprehensive as social security, established for the public interest, we feel equally as strongly the need for independent and impartial administration. Certainly it is not illogical to expect employers to be concerned when it is proposed that the Department of Labor be handed the administration of these important parts of the social-security program. The very fact that spokesmen for labor interests are advocating, in many instances, policies which are directly contrary to those policies earnestly advocated by employers, convince us, without discussing the merits of the individual disagreements, that administration must be in a department not representative of either of these groups. Is it not a matter of common knowledge that these spokesmen advocate— (1) Elimination of State administration of unemployment compensation in favor of Federal control. (2) Elimination of experience rating. (3) Opening the way to pay benefits to individuals unemployed and engaged in a labor dispute and individuals unwilling to work or not manifestly a part of the labor market. And yet, employers generally believe that these goals are neither in the employer, employee, nor public interest. In our estimation, experience rating under the Department of Labor's jurisdiction might be crippled or eliminated. Similarly, the power to write jobreferral standards could erase present qualifying provisions which keep the benefits from becoming a dole. Finally, the power and control over the purse strings of the States could by the setting of minimum standards give complete domination of State operation. Would not the Department of Labor be obligated to promote such policies if it desires to fulfill its rightfully prescribed functions when such policies are so strongly advocated by spokesmen for the special group that Department represents? Because of the dangers inherent in this proposal, Illinois businessmen are demonstrating an unprecedented concern. They do not want this move. To summarize: (1) It is proper that departments of Government be set up to promote the welfare of special groups. (2) The public interest is best served when these important phases of social security are administered by an agency which is neither labor- nor employer-dominated. We, therefore, recommend passage of House Concurrent Resolution 131, which would reject reorganization plan No. 1 of 1948. Respectfully submitted for the Illinois State Chamber of Commerce. PAUL F. GORBY, Member, Social Security Committee. Chicago, Ill., February 26, 1948. Senator BALL. The next witness is Thomas H. Bride, Jr., chairman, Unemployment Compensation Board of Rhode Island. STATEMENT OF THOMAS H. BRIDE, JR., CHAIRMAN, UNEMPLOYMENT COMPENSATION BOARD OF RHODE ISLAND, PROVIDENCE, R. I. Mr. BRIDE. Mr. Chairman and members of the committee, I, too, have a prepared statement which I will submit for inclusion in the record. Senator BALL. It will be received, to follow your testimony. Mr. BRIDE. I would like to make a few observations, particularly with respect to some of the comments that have already been made, in the hope that because of my experience, I might be able to clarify the correctness or incorrectness of those particular statements. I would like to say, in the first instance, that my experience with this program has been over a period of 15 years. I am presently chairman of the unemployment compensation board in Rhode Island, which is not only administering both the placement functions and the unemployment-insurance functions, but we are in addition administering a cash sickness program, a program of temporary disability. In fact, we are the first who have ever undertaken such a program. I would like to say that I am, as chairman of the board, representative of the public. I have had no attachments either with industry or with labor, and in all of my previous experience as head of the employment service, and in handling both of these functions, I have always tried to appreciate and do things that would be in the interest of the general public and in the interest of either of the particular groups mentioned. In reflecting these opinions, I am also speaking not only for myself in support of this reorganization plan, but I am reflecting the unanimous opinion of our unemployment compensation board, which includes, in addition to myself, a representative of labor and a representative of industry. The gist of the remarks which I have made in the prepared statement might be summed up in this sense, that it seems to me that a student of administration or organization who is concerned with the administration of any particular function would make a basic attempt to determine the relationship between functions with a view toward coordinating them and including them in a particular section for the sound and efficient administration. I dare say, separated from all of these other interests and observations that have been made, that any student studying this type of organization and the type which should be adopted would come to the conclusion which the President of the United States has come to. I think, too, that we should emphasize the point that time is of the essence. I have heard suggestions made that we might postpone consideration of a piece of legislation such as this until such time as further studies are made by other commissions. I think, from the point of view of the State administrator, we all would certainly agree that to avoid the confusion and the problems which have existed for the past year and a half, due to the separation of these functions and administration in two agencies, it would warrant immediate action, and I think time is of the essence in having such a program as this adopted. I want to first refer to a reference made to the resentment or reputation of the Employment Service as a result of its activities during the war program, when it was in the War Manpower Commission agency. At that time, I was director of the War Manpower agency in Rhode Island. The point I want to make is that any resentment which grew out of the fact that in a period of stress and strain in which we found ourselves-special interests, whether they be on the part of labor or management-had to take second place to the general interest of the public as a whole. I would like to have in the record, too, the fact that the war manpower program was one which was applied and put into effect at the local level with a minimum of domination or interference by the Federal section of the War Manpower Commission and with the complete cooperation of labor and management. In other words, it was done at the local level through labor-management committees, and whatever reactions were received by the people that were affected by this program, at least in our State and I think in the bulk of the States, they were satisfied that it was something that had to be done, and the determination to do it was on the part of management and labor, as well as the Government. There was reference made at one point-which I think needs to be corrected-to the policies and rules and regulations of the committee |