Our position is very simply stated. For reasons which have never been successfully refuted, the Federal unemployment compensation functions and employment-service functions have been integrated with other Federal social-security functions and placed in a neutral agency. Transfer from that agency in the absence of compelling reasons could not be justified in view of the public interest of the programs. If farmers are suspicious of the farm placement functions of this service and do not utilize it, the agricultural placement program will be a failure. If employers in general fear that the employment service is to be used as a special vehicle for furthering labor union objectives, it is understandable why the usefulness of the employment service will largely disappear. Another consideration which I should like to bring to your attention is the fact that if unemployment compensation is dominated by any one group it is extremely likely that there will be a lack of public confidence in the integrity of its decisions. As members of this committee know, it is necessary in administering unemployment compensation to make many determinations as to whether an individual is without work through no fault of his own, whether a profferred job amounts to suitable employment, whether or not the individual is disqualified because of a strike, lock-out, or other labor dispute, and similar matters. These decisions involve huge sums, and the very integrity of the $8,000,000,000 reserve. Determinations of this type should not be made by an organization which is a protagonist either of business or labor or any other special group. The committee will remember that the basis of taking the Conciliation Service from the Department of Labor and of making the Wage and Hour Administration autonomous was the fact that these agencies were required to deal with employers as well as employees and were required to make decisions affecting the interests of both groups. Certainly in the field of unemployment compensation it is of basic importance that the important decisions in this field should be made by a neutral agency and not one which may be suspected of furthering the special aims of any one group. In conclusion, might I point out by way of summary that the only arguments which have been advanced for transferring unemployment compensation and employment service functions to the Department of Labor are based on the assumption that these programs are to be considered as part and parcel of the labor laws, labor standards, and labor policies administered by the United States Department of Labor. This in itself can but shake the confidence of farmers and businessmen in the neutral administration of these very important public programs. The very fact that labor, without pointing to any derelictions of the Federal Security Agency, is insistent upon the transfer of these functions to a department dominated by it can but disturb other groups whose cooperation is highly important for the success of the programs. Businessmen and farmers, I feel, have a right to ask that these public programs, like Caesar's wife, shall be above suspicion. Mr. PHILIP R. RODGERS, MID-CONTINENT OIL & GAS ASSOCIATION, Washington, D. C., February 26, 1948. Committee Clerk, Committee on Labor and Public Welfare, United States Senate, Washington, D. C. DEAR MR. RODGERS: Thank you for your letter of February 25, 1948, in which you advised me that my written statement in regard to the President's Reorganization Plan No. 1 of 1948 would be received and included in the official records of the hearings. I am enclosing three copies of this statement. Thank you for your courtesy in this matter. Sincerely yours, F. M. PORTER. STATEMENT OF F. M. PORTER, PRESIDENT, MID-CONTINENT OIL AND GAS ASSOCIATION, TULSA, OKLA., BEFORE THE SUBCOMMITTEE ON LABOR OF THE SENATE COMMITTEE ON LABOR AND PUBLIC WELFARE IN OPPOSITION TO THE PRESIDENT'S REORGANIZATION PLAN No. 1 OF JANUARY 19, 1948 My name is F. M. Porter. I am president of the Mid-Continent Oil and Gas Association. This association, with its general headquarters at Tulsa, Okla., is an oil-trade association with approximately 4,000 members. It represents all branches of the petroleum industry and the majority of the oil and gas producers in the States of Kansas, Nebraska, Oklahoma, Texas, New Mexico, Arkansas, Louisiana, Mississippi, and Alabama. Within the borders of these States, threefourths of the Nation's natural gas and over two-thirds of the Nation's crude petroleum is produced, and approximately one-half of the Nation's petroleum products are refined. In the first place, I would like to point out to this committee the inconsistency of the Reorganization Plan No. 1 of January 19, 1948, and a certain portion of the President's message on the State of the Nation. The reorganization plan provides, among other things, for the transfer of the United States Employment Service and the Bureau of Employment Security to the Department of Labor; while in the President's message to Congress, it was stated, "The Government's program for health, education, and security-we should now establish an executive department for their administration." Thus in one instance it is proposed to put the services in the Labor Department, and in the next instance, they should be placed together in a new executive department. But our opposition to the reorganization plan goes to a more fundamental point than merely pointing out the administration's inconsistency in this vital matter. It is our basic belief that the social-security program of this Nation was established and must be administered in the interest of the general public. If any other belief were held, then there would be no reason for the program. Consistent with the general public's interest, this program has been administered by an officially neutral agency-the Federal Security Agency. Of course, employees and employers are interested in the program, yet here we have a proposal to transfer this program to the Labor Department, which was created admittedly to help the cause of labor. We therefore contend that a neutral agency should continue to administer this program. The Federal Security Agency has not greatly hampered the growth of experience-rating laws through restrictive interpretations and rulings. These experience-rating laws have saved millions of dollars to the employers in the States covered by our association. It is quite certain that a continued attack would be made on these laws if the functions of the Federal Security Agency were transferred to the Department of Labor. Thus these savings to our employers will be greatly jeopardized of this reorganization plan is allowed to become operative. We are faced in this country with a growth in the number and extensiveness of sickness-compensation laws; we have experienced a still greater growth in the past of old-age and survivors insurance programs. These matters will and have become related in the eyes of many. Therefore, if the USES and unemployment compensation are allowed to be transferred, this will tend to prejudice the issue of whether or not these programs should not likewise go to the Labor Department. It is our opinion that all of these programs should most assuredly be administered by a neutral agency, yet there would be a strong argument to put them in the Labor Department, if this reorganization plan becomes effective. Therefore, it is respectfully urged by the members of our association that House Concurrent Resolution 131 receive favorable consideration in order that the Reorganization Plan No. 1 of January 19, 1948, should not become law. GREATER SOUTH DAKOTA ASSOCIATION, Senator JOSEPH H. BALL, Chairman, Senate Subcommittee on Labor and Public Welfare, Senate Office Building, Washington, D. C. DEAR SENATOR BALL: This statement pertaining to House Concurrent Resolution 131 condenses the thinking of our membership, which is representative of the rank and file of the businessmen of this State. We are taking the liberty of mailing a copy to each member of your subcommittee, and request that it be made a part of the record in your committee hearings. We would like to call the attention of your committee to the following reasons why we are opposed to the President's Reorganization Plan No. 1 for 1948 and favor House Concurrent Resolution 131. 1. The President truly stated that the Department of Labor is primarily conconcerned with the labor market and the problems of labor. For this very reason, the United States Employment Service and the Bureau of Employment Security should not be transferred to the Department of Labor any more than to the Department of Commerce, which is primarily concerned with the problems of industry. The United States Employment Service and the Bureau of Employment Security should be combined and administered by a department that is wholly neutral with regard to labor and management. The department to which these programs are transferred should be concerned not only with the well-being of labor, but also the problems of industry and the general public. Employment service offices not only endeavor to find employment for workers, but also to find efficient workers for employers. This program cannot be efficiently administered if the department administering it is primarily concerned with only one group. 2. The Department of Labor is and always has been greatly influenced by the desires of organized labor; in fact, two of the Under Secretaries of Labor have been chosen from the ranks of organized labor. Organized labor has always been opposed to the experience-rating provisions in employment-security laws. In South Dakota the unemployment-compensation trust fund aggregates in excess of $8,000,000 and is 20 times the amount paid out in benefits during any 1 year. This fund has accumulated in spite of the fact that this State has an experiencerating provision and in spite of the fact that all eligible claimants have been paid benefits. The experience-rating law in South Dakota has saved taxpayers approximately 45 percent of the tax that would have been imposed had not experience rating been enacted. We are confident that organized labor working through the Department of Labor would use every effort to abolish experience rating to the end that the trust funds would increase to such magnitude that labor would be continually pressing for such large weekly benefit amounts and so long a duration of benefits that incentive would be removed for workers to seek employment or to accept it when offered. 3. We agree with the President's statement that the proper emphasis should be on employment rather than on the payment of benefits. If we interpret the President's statement correctly, it means simply that it is better to have a job than to receive unemployment benefits. Organized labor and the Department of Labor have always stressed the employment of individuals in their highest skills and have opposed the provisions in unemployment-compensation laws which permitted the administrators to determine what work was suitable for an applicant. The Department of Labor has always maintained that suitable work is that work only which utilizes the worker's highest skills, and is contrary to the President's statement that it is better to have a job than to be receiving unemployment benefits. By interpreting the terms "suitable work" to mean work that employs the individual's highest skills, or if such employment is not immediately available, such employment for which the individual is educated, trained, and physcally capable, he is enabling the employment security department in South Dakota to fill the needs of many employers and to obtain jobs for many of the unemployed workers, thereby maintaining a high level of employment and a low level of benefit payments. 4. The Bureau of Employment Security inaugurated one of the most businesslike systems of governing administration in the departments throughout the various States. It has provided funds for an association of State administrators to plan with it for the improvement of the law and improvement in administration. This association is known as the Interstate Conference of Employment Security Agencies. If the United States Employment Service and the Bureau of Employment Security are transferred to the Department of Labor, funds will in all probability be withheld to prevent any organized efforts on the part of the States to maintain provisions for experience rating in the Federal law and to prevent an interpretation of "suitable work" clause which is uniformly opposed by organized labor. 5. The employment-security program was adopted by Congress and by each State not for the welfare of any one group but for the welfare of the public at large in the promotion of a stabilized employment and a more stabilized economy in the Nation. It is a law for the general public welfare and therefore should be administered by an agency that has the interests of the public paramount and not an interest for any specific group. Harmony in the administration of the law has been attained and can only be maintained if the administration is unbiased. The interests of employers should receive as much consideration as the interests of labor. This can only be accomplished if the administration of the law is under the jurisdiction of a neutral body such as the present Bureau of Employment Security. One of the weakest spots in the President's proposed reorganization plan is the provision that the Secretary of Labor need not administer the program but that he may farm it out to such officers as he may designate and that the administration of both services shall be carried on under such rules as the Secretary may prescribe. Whom would he select to administer the program for him? The Secretary of Labor is all-powerful under the reorganization plan and is bound by no rules or regulations other than those he chooses to adopt in the administration of the program. This places too great a power in the hands of one man. Trusting that the foregoing will receive favorable consideration by your committee, I am, Respectfully, SUBTITLE B-LABOR REGULATIONS GEO. A. STARRING, CHAPTER I-UNITED STATES EMPLOYMENT SERVICE, DEPARTMENT OF LABOR PART 21-COOPERATION OF UNITED STATES EMPLOYMENT SERVICE AND STATES IN ESTABLISHING AND MAINTAINING A NATIONAL SYSTEM OF PUBLIC EMPLOYMENT OFFICES Pursuant to the authority vested in me by the Act approved June 6, 1933, as amended (48 Stat. 113), Title IV of the Servicemen's Readjustment Act of 1944, as amended, (58 Stat. 284), the Labor-Federal Security Appropriation Act, 1947 (Pub. L. 549, 79th Cong., 2nd Sess.), and Executive Order No. 9617, (10 F. R. 11929), and for the purpose of maintaining an effective national system of public employment offices, Title 29, Chapter I, Part 21, Section 21.1 to 21.14, inclusive, of the Code of Federal Regulations, entitled "Cooperation of the Social Security Board and States in Establishing and Maintaining a National System of Public Employment Offices" is hereby rescinded and the following new regulation promulgated. 21.10 21. 11 21.12 21. 13 Fiscal Affairs. 21. 14 21. 15 21.16 21. 17 21. 18 21.19 Services and Facilities. Organization. Arrangements between United States Employment Service and Related Federal Employment Service Manual. Personnel Administration. Advisory Councils. Confidential Character of Records. Reports and Studies. State Plans of Operations. Delegation of Authority. Amounts and Purposes of Grants. 21. 20 Notice and Opportunity for Hearing to State Agency Prior to Withdrawal of Federal Funds. Authority Sections 21.1 to 21.20, inclusive, issued under the Act of June 6, 1933, as amended, 48 Stat. 113, Title IV of the Servicemen's Readjustment Act of 1944, as amended, 58 Stat. 284, and the Labor-Federal Security Appropriation Act, 1947, Public Law 549, 79th Congress, 2d Session. Section 21.1 Definitions. In this part, the following words shall, unless the context requires otherwise, have the following meanings: (a) "Wagner-Peyser Act" means the Act of June 6, 1933, as amended, (48 Stat. 113), and all rules, regulations, and standards promulgated thereunder. (b) "State" includes the several States, the District of Columbia and the Territories of Alaska and Hawaii. (c) "State agency" means the agency designated under Section 4 of the Wagner-Payser Act as the agency to cooperate with the United States Employment Service. (d) "State Director" means the individual responsible, subject to the overall direction and supervision of the chief official of the State agency or department in which the State service is located, for the proper and efficient administration of the State-wide system of public employment offices. (e) "The United States Employment Service" means the Bureau in the Department of Labor established pursuant to the Wagner-Peyser Act. (f) "Director of the United States Employment Service" means the chief official of the United States Employment Service, responsible, subject to the supervision of the Secretary of Labor, for the administration of the Bureau in the Department of Labor known as the United States Employment Service. (g) "State Veterans' Employment Representative" means the individual assigned by the United States Employment Service to each State public employment service system, who is administratively responsible to the Chief of the Veterans Employment Service of the United States Employment Service, for the execution, through the public employment service in the State, of the policies of the Veterans Placement Service Board. Section 21.2 Placement Services. (a) Functions. Each State agency shall maintain, through its State and local employment offices, a placement service for the free use of employers, workers, and veterans and for the purpose of assisting employers to secure the number of workers possessing the occupational qualifications such employers require, and of assisting all workers to find promptly, jobs for which they are occupationally qualified and which are most advantageous to them. The State service shall promote the full use of its placement facilities, for the purpose of assuring the maximum of job opportunities for veterans and other workers and the maximum recruitment and placement assistance for employers. (b) Referrals in Labor Dispute Situations. No person shall be referred to a position the filling of which will aid directly or indirectly in filling a job which (a) is vacant because the former occupant is on strike or is being locked out in the course of a labor dispute, or (b) the filling of which is an issue in a labor dispute. With respect to positions not covered by clause (a) or (b) above, any individual may be referred to a place of employment in which a labor dispute exists, provided he is given written notice of such dispute prior to or at the time of his referral. (c) Inter-area and Interstate Clearance of Labor. Each State agency shall cooperate with the United States Employment Service in the interstate recruitment and transfer of workers. Each State agency shall maintain an adequate system for the recruitment and transfer of workers between areas within the State. (d) Multi-State Labor Market Areas. With respect to any single labor market area covering parts of two or more States, the State agencies involved shall establish and maintain adequate arrangements and procedures to assure that workers and employers have full access to job opportunities and the available labor supply within the area, without regard to State boundaries. Section 21.3. Employment Counseling and Selective Placement Services. Each State agency shall maintain an adequate local office employment counseling service for veterans and other applicants of employable age. Such employment counseling service shall assist the applicant to evaluate his potential abilities in relation to job requirements and employment opportunities. Local employment offices shall provide such special services and utilize such selective placement techniques as may be necessary to assist handicapped veterans and other applicants to secure employment in occupations which are suited to their physical capacities, interest, and abilities. Local offices shall establish and maintain cooperative relationships with other community and State agencies and organizations for the coordination and mutual improvement of vocational adjustment services. In those States where State boards, departments, or agencies exist which are charged with the administration of State laws for the vocational rehabilitation of handicapped persons, the State agency shall make provision for cooperation with such boards, departments, or agencies. Section 21.4. Occupational Analysis and Industrial Services. Each State agency shall maintain, through its State administrative office and local employment offices, an adequate occupational analysis and industrial service to render assistance in connection with problems which involve the recruitment, selection, assignment, transfer, and promotion of workers, with a view to promoting stability of employment and the most effective use of workers' skills and abilities. In connection therewith, each State agency shall cooperate with the United States Employment Service in the development and use of the occupational analysis and related materials of the United States Employment Service. Section 21.5. Special Service for Veterans. Each State agency shall maintain, through its State administrative office and local employment offices, effective placement and counseling services for veterans, to carry out the provisions of the Wagner-Peyser Act and of Title IV of the Servicemen's Readjustment Act |