(4) Personnel management services to employers and labor organizations to assist them in the use of personnel tools and techniques developed by the Employment Service for effective selection, assignment, and transfer of workers. (5) Labor market analysis and information to assist workers in choosing among various employment opportunities in planning their vocational careers, and for the use of employers, training authorities, community groups, and other agencies whose programs are affected by manpower considerations. (6) Cooperation with schools, other community organizations, and Government agencies for increasing economic activity and maintaining high levels of stabilized employment. B. The committee recommends that this program be continued in all States and strengthened through Federal-State cooperation; that reasonably uniform standards and procedures be followed by all States in order that this country shall continue to have a Nation-wide network of public-employment offices. C. The committee recommends that the referral standards of the Employment Service provide (1) Equal referral opportunities to all individuals on the basis of their occupational qualifications for the job, regardless of sex, creed, or color. (2) No referral will be made to a job in which wages, hours, or other conditions of work offered are less favorable to the individual than those prevailing for similar work in the locality. (3) No referral be made to a job not utilizing the applicant's highest skill until a reasonable effort has been made over a reasonable period of time to place the individual in a job which utilizes his highest skill. (4) Assurance that referrals will not be made to positions left vacant because of labor disputes. (5) Provision for interstate arrangements for referring workers to the most suitable and desirable job openings without regard to State boundaries. D. The committee recommends that in carrying out their activities, the public employment offices cooperate with hiring channels developed by employers and employees. E. The committee recommends that the Farm Placement Service be restored to the United States Employment Service and operated as part of the public employment offices' system, and that sufficient funds for its administration, in addition to those for operation, be appropriated. F. The committee recommends, where there is a large minority group such as Negroes in the State, that the State employment services employ qualified Negro personnel to serve on their staffs. Senator BALL. Is there anyone else who has a statement to file? STATEMENT OF B. A. KRAWCZYK, WISCONSIN STATE CHAMBER OF COMMERCE AND WISCONSIN MANUFACTURERS ASSOCIATION Mr. KRAWCZYK. My name is B. A. Krawczyk. I am an attorney and supervisor of the compensation department of Allis-Chalmers Manufacturing Co. I am appearing, on behalf of the Wisconsin State Chamber of Commerce and the Wisconsin Manufacturers' Association, in opposition to the plan. I would like to present my statement for the record. Senator BALL. Very well. It will be received. STATEMENT SUBMITTED TO THE SUBCOMMITTEE ON LABOR OF THE SENATE LABOR AND IDENTIFICATION B. A. Krawczyk, attorney and supervisor of the compensation department of Allis-Chalmers Manufacturing Co., Milwaukee, Wis., charged with the responsibility of full company compliance with the Social Security Act and the 44 State unemployment compensation laws to which the company is currently subject; engaged in this work for more than 10 years. OTHER ACTIVITIES 1. Member of the Wisconsin Unemployment Compensation Advisory Committee, which consists of an equal number of labor and business representatives. 2. Member of the social security committee of the Wisconsin State Chamber of Commerce. 3. Also engaged in similar committee work in other States. APPEARANCE AUTHORIZED BY THE 1. Wisconsin State Chamber of Commerce, which consists of some 2,000 members, representing many types of businesses as well as local chambers of commerce and various trade associations, and the 2. Wisconsin Manufacturers' Association, which consists of approximately 1,200 members, representing manufacturing firms employing 83 percent of all employees of manufacturing enterprises in Wisconsin. STATEMENT On behalf of my employer and the two above-named employer organizations, I am submitting this statement to your subcommittee in opposition to the President's Reorganization Plan No. 1, of January 19, 1948. Since those who have had the privilege of appearing before your subcommittee have already given their detailed views in opposition to the current reorganization plan, and in order to avoid repetition and further in the interests of brevity, I am merely summarizing the reasons for our position against the plan: 1. The employment and unemployment compensation services should be served by a neutral agency. The Labor Department is, necessarily, a protagonist of labor (established as such by law with two assistant-secretaries from labor organizations, CIO and AFL; the Commerce Department, of business. The functions of both, the employment and unemployment-compensation services, should be permanently placed in one agency representing the public, namely: The Federal Security Agency. 2. The transfer of those two functions to the Labor Department would tend to break down the necessary coordination between social security, welfare, and other insurance programs. It is generally recognized that all of these insurance phases should be coordinated under one agency. In 1939, President Roosevelt recommended and Congress approved the establishment of the Federal Security Agency to handle these measures and the President further recommended that this Department be given Cabinet status. 3. The administration of the Employment Service must be such as to attract the support of employers. The belief is, on the basis of past experience, that employers will not use the Employment Service as extensively as it is, or might be, if placed under the control of the Labor Department. 4. Through purse-string controls, the Department of Labor could, if a State agency refused to comply with pro-labor administrative rules and regulations, either withhold or limit allocations for administrative funds-thus seriously impairing efficient State administration. 5. The provisions for reduced employer contributions under experience rating in State laws are specific and well defined; the Federal law, setting up the standards in this connection, are general and subject to interpretation by the Federal administrative agency charged with the responsibility of carrying out this function. Interpretation by a department serving only one group, generally known to be an opponent of experience rating, could seriously impair, if not nullify these State experience rating provisions, resulting in a loss of the incentive to stabilize employment. 6. The adoption of the President's plan is the opening wedge for the elimination of experience rating and ultimate federalization of State unemployment compensation systems. 7. The reorganization plan, as proposed, makes no showing of any economy to be effected. We urge you to report against the President's Reorganization Plan No. 1. STATEMENT OF WESLEY K. LUNT, REPRESENTING THE CHICAGO ASSOCIATION OF COMMERCE AND INDUSTRY AND THE ASSOCIATED EMPLOYERS OF ILLINOIS Mr. LUNT. I am associated with W. F. Howall Printing Co. I left my statement covering three organizations in the office downstairs, not knowing that there would be this type of call. Senator BALL. That is all right. All those statements that have been furnished to the committee will go into the record. (The statement referred to is as follows:) STATEMENT BY W. K. LUNT, OF CHICAGO, REPRESENTING THE CHICAGO ASSOCIATION At the time of the passage of the Social Security Act, considerable attention was given by the Administration, as well as the Congress, to placing the administrative control in the Department of Labor. Extensive hearings were held at this time, and on the President's recommendations the Congress agreed that a separate department should be created for the administration of Social Security and a board should be placed in control of the policies of such department. This was provided for in the act, and the Social Security Board came into existence. The reasons back of this determination are clear from the discussions and hearings of that time. The Social Security act encompasses the interests of three separate groups: (1) the employer, who, in the case of unemployment compensation, is responsible for the financing of the program, and in the case of Old-Age and Survivors Insurance, pays 50 percent of the financial obligation; (2) the worker, who is the individual who draws benefits in accordance with the provisions of the act and the State laws supplementing it; (3) the public in general, who benefits by the social aspects of the legislation and the maintenance of buying power and welfare which it provides. It was recognized that it would be a mistake to have a fund running into many billions of dollars administered by one of the parties in interest or a representative thereof. As in many cases, at the time of claim for benefits such parties are antagonistic in their interest thereunder, and such antagonism must exist for proper policing and administration of the funds. To do otherwise would throw open the Treasury to raids, frauds, and payments to individuals ineligible under the provisions of the statute. This system has thrived and grown. It has become well established and recognized over a period of the last 10 years. It is no longer an experiment. Model bills or patterns based on pro forma statistical concepts are no longer necessary. Our country has had experience under these laws and today can proceed on an actuarially sound basis. It is inconceivable that, at this point in the development of social security, the President wants to substitute for this independent agency a department of Government which was pledged and created for the purpose of representing one of the parties litigant to the social-security system itself. In every State in the Union the employers and the labor unions have acted as a check and balance on each other (1) to secure the proper benefits for the claimant, and (2) to prevent the payment of benefits out of this fund to parties who were not eligible to receive them. As a result, these funds have been preserved; the right of the individuals have been preserved. The incentive to work still exists. These were the very purposes for which the act was created. To abandon them, as would be done under this proposal, would set back the administration of social security at least 10 years, and the concepts upon which it was founded and has developed would be undermined and destroyed. And yet it is quite evident that the President is not sure that he wants this plan of organization, for in his speech to this very Congress at the opening of its session last month the President emphasized the necessity of a separate department for the administration of social security. Why, then, within a matter of weeks, did he introduce a reorganization plan which is at sword's point with the proposal contained in his message to this Congress? The Social Security Board has testified before you as to its operation, organization, and administration of the act. The State administrators have or will explain to you their very basic reasons for their desire to continue the administration in a specialized, qualified, and unprejudiced department. Businessmen from all States in the Union are asking that the Social Security Board be maintained; that this Congress refuse to place millions of dollars for control of the destinies of the people in the hands of a department charged with the representation of one organized group. The foundations of American Government are predicated upon checks and balances-upon administration of matters of interest to various groups by unprejudiced tribunals. To destroy this precept in a field so vital to such a tremendous segment of the population is to destroy one of the basic protections of the American Government. We ask this committee to charge themselves with the maintenance of free unprejudiced government by reporting favorably on House Concurrent Resolution 131 and declaring to the Congress as a whole that this reorganization plan must be defeated. STATEMENT OF C. G. CAFFREY, WASHINGTON REPRESENTATIVE, AMERICAN COTTON MANUFACTURERS ASSOCIATION, WASHINGTON, D. C. Mr. CAFFREY. My name is C. G. Caffrey. I represent the American Cotton Manufacturers Association here in Washington. I have a statement that I would like to file with the Committee in opposition to the President's Reorganization Plan No. 1. Senator BALL. Very well. It will be received. (The statement referred to follows:) STATEMENT OF C. G. CAFFREY, WASHINGTON REPRESENTATIVE, AMERICAN COTTON MANUFACTURERS ASSOCIATION, BEFORE THE LABOR AND PUBLIC WELFARE COMMITTEE, UNITED STATES SENATE The American Cotton Manufacturers Association desires to go on record in opposition to the request of the President of the United States for the approval of Reorganization Plan No. 1 of 1948 under the Reorganization Act of 1945. This association represents the southern textile mills, consuming approximately 85 percent of the cotton consumed in the United States. The membership includes something over 600 different units. The total number of spindles operating in the South is 17,000,000 out of a total of 23,000,000 in the United States. The southern mills represent an important part in the economy of the South, and they furnish a weekly pay roll and employment for over 400,000 employees. These employees represent families totaling more than 2,000,000 people. It is our firm belief that the United States Employment Service and the Bureau of Employment Security should be made a permanent part of, and administered by, the Federal Security Agency along with other educational, health, and security programs. The Nation's social-security program is one that was created and established in the interest of the general public. It was so conceived and so represented, and consistent with this thought, its administration should thus be lodged in a Federal agency representing neither management nor labor. We feel that these two phases of our security program must be administered together, and that the administration be in the Federal Security Agency. We also feel that the emergency which temporarily seemed to justify the operation of the United States Employment Service by the United States Department of Labor has now passed, and that normally this type of service fits better into the pattern of the social-security program. Therefore, we urge the disapproval of Reorganization Plan No. 1 of 1948. STATEMENT OF EDWARD F. CONNELLY, CHAIRMAN, SOCIAL SECURITY COMMITTEE, ASSOCIATED INDUSTRIES OF MASSACHUSETTS Mr. CONNELLY. Mr. Chairman, my name is Edward F. Connelly, a practicing attorney and chairman of the social-security committee of Associated Industries of Massachusetts. I wish to file a statement in opposition to the Reorganization Plan No. 1 of 1948, and I am authorized to present a similar position for some 17 other business organizations in the State of Massachusetts, including chambers of commerce, metal-trades associations, cottonmanufacturers associations. Senator BALL. Very well. It will be received. (The statement referred to follows:) STATEMENT OF EDWARD F. CONNELLY, CHAIRMAN, SOCIAL SECURITY COMMITTEE, ASSOCIATED INDUSTRIES OF MASSACHUSETTS My name is Edward F. Connelly. My home is in Newton Highlands, Mass. I am a practicing attorney and chairman of the social-security committee of the Associated Industries of Massachusetts. The latter association is an employer organization, having a membership of over 1,500 companies employing over 90 percent of the industrial employees of the Commonwealth of Massachusetts. I am here to register the opposition of the Associated Industries of Massachusetts to Reorganization Plan No. 1 of 1948. I am also authorized to register a similar position in behalf of the following organizations: The Boston Chamber of Commerce. The Worcester County Metal and Employers' Association. The New England Manufacturing Confectioners Association. The New England Shoe and Leather Association. The Massachusetts Warehousemen's Association. The Blue Print and Photo Copy Association of Boston. The Shoe Pattern Manufacturers' Association. The Retail Trade Board of Boston. The Massachusetts Council of Retail Merchants. The Massachusetts Laundryowners' Association, Inc. The Boston Linen Club, Inc. The New England Linen Supply Association, Inc. If both Houses of Congress do not reject Reorganization Plan No. 1 of 1948, it would mean that both the Bureau of Economic Security and the United States Employment Service would be permanently administered by the United States Department of Labor rather than the Federal Security Agency, as would otherwise be the case. We are opposed to the administration of these two latter Federal functions by the United States Department of Labor. This does not mean that we favor a continuance of the existing Federal powers over the operation of the State unemployment-compensation systems and the State public-employment offices. We feel that these powers should be substantially reduced or repealed. Whatever powers do exist or remain, however, should be administered by the Federal Security Agency and not by the United States Department of Labor. Our opposition to Reorganization Plan No. 1 of 1948 is based on these reasons: That the administration of unemployment compensation and public employment offices are integrally related and, therefore, on the Federal level the Bureau of Economic Security and the United States Employment Service should be administered by the same Federal agency; that the functions of the Bureau of Economic Security are, by far, more important and complicated and need more greatly the background of experience than is the case with the United States Employment Service and that, therefore, the Federal agency to administer both functions |