Section 3 (a), page 14, line 1, requires only 90 days' employment during the base year for qualification for benefits. The Social Security Board report recommended a 5 to 6 months' qualifying period as appropriate. If such a qualifying period were adopted the offshore industry would be protected from the influx of the Great Lakes seamen previously referred to, and would be required only to take care of the unemployment of those men really engaged in the seamen's trade. The steamship industry should not be called upon to support by itself unemployment compensation for men who are primarily engaged in shore-side employment but who occasionally take a trip to sea. Tightening up the bill on such points as these and thereby reducing the unwarranted expense is the only possible way to achieve a workable, reasonably self-supporting plan.

Section 3 (b), page 14, line 3, provides for a 14-day waiting period since the last employment. It would seem more appropriate to have this period commence to run from the time a seaman registers with the Board at a registration office, thus indicating his desire to receive benefits under the bill.

Section 4 (a) (i), page 14, line 23, extends the period of disqualification for a man who refuses to accept suitable work from 7 days, as provided in H. R. 9798, to 30 days after such refusal. This disqualification is so expressed that it merely results in a postponement of the receipt of benefits by such a seaman. As pointed out with respect to men voluntarily quitting, the industry believes that even a 30-day system of suspension of rights to benefits is inadequate and that the disqualification should be complete.

Section 4 (a) (iii) provides for a disqualification from the receipt of benefits for any days of unemployment due to a strike, provided that the disqualification applies only to the first 35 days of the stoppage of work. Since a 2-week waiting period is enforced against all, the effect of this provision is to merely disqualify strikers for an extra period of 21 days. According to our understanding, State employment insurance laws uniformly refuse benefits to strikers. The Government should not be put in the position of aiding either side to a strike. It should not subsidize the strikers, and, aside from its conciliatory and mediatory services, should assist neither side. In this connection the Social Security Board report pointed out that "the financial condition of any single industry system might be seriously impaired if unemployment resulting from widespread labor disputes was compensated in any manner." It may again be seen here how the actual language of the bill departs from the basis on which the public has been convinced of the desirability of unemployment insurance. Government subsidization of strikes is a long step further than providing assistance to a man who has lost his job through no fault of his own.

If the absolute one-sidedness of the bill is not otherwise apparent, it may be clearly demonstrated by the disparity in punishment for certain offenses under the bill. Thus, any employer who merely fails to furnish any information required by the Board is subject to a $10,000 fine or 1 year in prison or both (sec. 9 (a), p. 31, line 5). On the other hand, any applicant for benefits "who has knowingly made or aided in causing to be made any false or fraudulent statement or claim for the purpose of securing benefits to be paid" is

subject merely to the penalty of disqualification from the receipt of benefits for 75 days (sec. 4 (a) (iv), p. 16, line 15.)

This disparity between the offenses and penalties was pointed out to the committee last year, but the authors of the bill have ignored it. Persons who make fraudulent claims against the Government should be forever barred from receiving benefits as well as be subject to criminal prosecution.

Section 4 (b), page 17, line 20, further conditions the disqualification of employees on strike by providing that if the employee is not directly participating in the strike against a particular "establishment, premises, or enterprise," he shall be eligible for benefits. The proviso is added, however, that if separate types of work are commonly conducted in separate departments of a single enterprise, each such department shall be deemed "a separate establishment, enterprise, or other premises." The effect of this condition upon the disqualification for strikers is that a union may effect a general strike by calling out the employees of a particular department thus tying up the whole operation without losing benefits to its members who are employed in other departments.

For example, the cooks only on a ship might strike. Since a ship cannot sail without cooks to feed the crew, the result is to tie up the whole ship. The cooks, of course, would receive. no benefits, but all the other members of the crew would receive benefits, even though, as is the case, they belong to the same union as that which called the cooks out on strike.

With all except a few employees receiving unemployment benefits, there is no incentive to the union to attempt an early termination of the work stoppage, and the Government is, in effect, subsidizing the prolongation of the strike.

Section 5 (f), page 23, line 23, permits any labor union, of which a claimant is a member, to appeal an adverse decision of the Board. A labor union itself is not a party in interest in such a dispute, and should be given no standing to contest the decisions of the Board. Now, I think, Mr. Chairman, you asked why, or made the comment, during the testimony of one of the earlier witnesses, as to why does not the shipping industry do something about this instead of sitting back.

The CHAIRMAN. I did.

Mr. WALKER. I submit we have already done something in the way of pointing out that we believe to be grevious errors in the bill. The bill comes back again, and it is worse than it was before.

The CHAIRMAN. Why do you not suggest something constructive then in its place?

Mr. WALKER. I would be very pleased to take that up and try to come back with what we think is a fair bill.

The CHAIRMAN. They have had 17 months in which to do it since the hearings were held before.

Mr. WALKER. For example, we said we do not think you should pay men who walk off the job. Well, we said it at that time and nobody paid any attention to it. If the committee would like to have me do so, I would be very much pleased to draft a bill which we think is fair and reasonable.

Mr. WELCH. Just what do you mean by "men who walk off the job," Mr. Walker?

Mr. WALKER. In this bill, a man can quit the ship when an employer wants him to stay on, and he will receive benefits just the same as the man who was laid off through no fault of his own.

Mr. WELCH. Otherwise it would be pretty close to involuntary servitude, would it not, if a man could not quit his job?

Mr. WALKER. No; there is no objection to his quitting his job; but why should we support him in idleness? I understand the object of unemployment insurance is to alleviate hardship.

Mr. WELCH. It would depend upon the reason for his leaving the ship or his employment.

Mr. WALKER. I might point out, and I think you came in after I had said it, that there is no unemployment-insurance law in this country in any of the States or under Federal law which provides for the granting of benefits to the man who quits his job on the same basis that it is granted to a man who is laid off through no fault of his own. I think it might be helpful to just read the New York law on that. The New York law is famous for its liberality on such matters as these. It is section 506 of the Labor Laws of New York, and it says:

2. In the case of any employee who leaves his employment voluntarily, (a) if such leaving be under circumstances which shows a bona fide withdrawal, temporarily or permanently from the labor market, such employee shall be disqualified from receiving any benefits or from being credited with serving any part of the waiting period provided in subsection 1 of section 504 until certification of a bona fide return to the labor market by such employee and his renewed availability for employment.

Here is the answer to the question, perhaps, that you have in mind, Mr. Welch:

If such leaving be for good cause the benefit rights of such employee shall in no way be affected thereby, provided he shall not be disqualified by reason of paragraph (a)

which I just read

and in addition to other circumstances that may be found to constitute good cause. Voluntary leaving of employment shall not in itself disqualify an employee if circumstances have developed in the course of such employment that would have justified such employee in refusing such employment in the first instancethat is, being forced to join a company-dominated union, because of a strike being in progress and others.

Then it further provides:

If such leaving was without such good cause no benefits shall be payable to any such employee, nor shall he be credited with serving any part of the waiting period provided by division 1 of section 504 until six weeks have elapsed after his registration for benefits subsequent to such voluntary leaving where there was no withdrawal from the labor market, or until six weeks have elapsed after the certification of his bona fide return to the labor market and his renewed availability for employment where there had been a withdrawal from the labor market by such voluntary leaving until six weeks have elapsed.

I will amend my earlier statements and make a correction there. The difference between H. R. 5446 and the New York law is that H. R. 5446 provides for no waiting period and the New York law provides for a 9 weeks' waiting period, because after he comes back then he has to serve a 3 weeks' waiting period. Now, many States have much more restrictive provisions than that provision, and it is grossly unfair to saddle any industry or all industry collectively with the burden

of paying taxes to pay unemployment benefits to a man who will not work.

That is all I have to say. Now, I understand, Mr. Chairman, that we have until October 25 in which to submit briefs?

The CHAIRMAN. Yes. Are there any further questions?

Mr. OLIVER. Is it your understanding, Mr. Walker, that the maritime industry cannot support an unemployment-insurance plan?

Mr. WALKER. It certainly cannot support it on any 3-percent-tax rate on pay rolls. It cannot support this bill. I think we might work out an unemployment-insurance bill and might support it.

Mr. OLIVER. Have you any figures available to indicate the basis of that statement that you just made?

Mr. WALKER. No; except this Social Security Board report which was made in 1938. That was a published investigation of this Board. They investigated that matter and, of the total separations from service for any reason, they found that 80 percent were voluntary withdrawals. If you take Mr. Latimer's figures-and I hope he is right and we are wrong in our estimates-if you do not give any benefits to those men and just give them to the men who are laid off, I would think that there would be every probability that it could be supported and that the funds would remain solvent if it were restricted to men who were laid off through no fault of their own.

Mr. OLIVER. I understand you now state that the maritime industry could afford to pay a tax to support those who were involuntarily laid off from their work?

Mr. WALKER. That is my opinion.

Mr. OLIVER. You have no way of substantiating that opinion any further with figures?

Mr. WALKER. Yes; I can.

Mr. OLIVER. That is to support that?

Mr. WALKER. Yes.

Mr. O'BRIEN. Are you in collaboration with or associated with Mr. Ewers?

Mr. WALKER. No. I see him frequently, but I am not associated with him.

Mr. O'BRIEN. The maritime industry has no objection to a bill that would meet the requirements that you suggested?

Mr. WALKER. Yes. We think that we should be covered into some equalization fund. In other words, it is our thought that the maritime industry ought not to have to stand alone. The only other industry that stands alone is the railroad industry, and the railroads provide stable employment; and if a man is laid off on the railroad, he stays laid off until his seniority position brings him back; and if there is a general recession of business, the man who is laid off receives benefits for the whole period; but then he is through, and the senior men stay at work. The way it works now is that every man will be getting the same benefits, and they will be sharing the work that is available.

Mr. O'BRIEN. Have you any other group or any other industry in mind that you think the maritime industry should be associated with to reduce the pressure or the burden that would be placed on that particular industry?

Mr. WALKER. I am not an expert on the equalization fund, and Mr. Latimer can tell you what his plan is; but, as I understand it, it is to take the various States' unemployment-insurance funds and to have a reinsurance account with which they will reinsure. Then if any one State has a heavy run of unemployment they can draw on this reinsurance fund.

Mr. O'BRIEN. That is administered by the States?

Mr. WALKER. No; not administered by the States. You see, all of the States could reinsure there. Now, if we could get in on something like that, I think it would be all right.

Mr. OLIVER. Do I understand, Mr. Latimer, that this martime unemployment-insurance account would not be liable for any funds which it withdrew from this so-called equalization fund?

Mr. LATIMER. There would be a premium payable by each State, and that premium payment would be covered into the reinsurance fund, and that reinsurance fund would be contributed to by all of the participants in it; but it would not be available for payment in extrahazardous risks.

Mr. OLIVER. Where would the funds come from in that case originally? Who would pay the premiums that go into that fund?

Mr. LATIMER. There would be set aside a portion of the taxes which are now available to go into a reinsurance fund.

Mr. OLIVER. So, as a matter of fact, other industries would be helping to support the maritime industry?

Mr. LATIMER. Yes.

Mr. OLIVER. Would not that mean you were depleting the funds in a way that other industries have accumulated?

Mr. LATIMER. No, sir; I think not, because it has been the point of view that the existing benefits under State laws as a whole can be supported with the existing amount of taxation.

Mr. OLIVER. Is it not true that you have had a terrific strain thrown upon these unemployment-insurance accounts?

Mr. LATIMER. Yes, but at the worst imagination you could conjure, the fund would be more than self-supporting, even during a period of depression.

Mr. OLIVER. Then, instead of reducing the taxes on other industries, would you keep them where they are on those industries that are able to support themselves?

Mr. LATIMER. Yes; that would be the result.

Mr. O'BRIEN. You are not experiencing a great deal of difficulty with unemployment insurance as far as the railroads are concerned, are you Mr. Latimer?

Mr. LATIMER. No, sir; we are having a very light load of unemploy

ment.

Mr. O'BRIEN. You are having a light load of unemployment?
Mr. LATIMER. Yes, sir.

Mr. O'BRIEN. In case the maritime industry was able to build up and maintain a fund great enough, could it be worked out along the lines applicable to the railroads?

Mr. LATIMER. In this bill the attempt is made to make those principles apply just the same as to the railroad unemployment insur