rank is an essential to the importance of the task at the Federal level. The association recommends the prompt establishment of such a Cabinet Department to be set up in a simple and flexible manner, allowing wide latitudes for the adaptation of administrative structure of scientific advance. We would prefer that this Cabinet Department be designated as the Department of Health, Education, and Security, since it would comprise functions not ordinarily included under the term "welfare." The association believes that the Federal Security Agency should have departmental status in view of its broad scope and its character. This seems true whether it is regarded in terms of financial involvement, in terms of the numbers of persons concerned, or the importance of the functions of health, education, and welfare. It seems appropriate to us that the agency dealing with health, education, and security at the Federal level should be thoroughly coordinated at the top because corresponding agencies at the local and State level are so generally separate and distinct. A first-rate example of coordination in the proposed Federal Department would be useful. The association believes it sound to transfer the powers and duties of the Agency to a new Department and to its Secretary. The matter of transferring any additional functions or units of other governmental agencies performing related services should be left, we believe, for subsequent legislative action. The association believes that the functional operating divisions or other units of the Department should be headed by career officers of high professional and administrative competence in their particular fields. These latter positions should be nonpolitical in character. It is imperative, we believe, that suitable steps should be taken to insure freedom of State and local agencies, both public and voluntary. Of equal importance, however, it should be clear that this legislation permits the administration of Federal funds in an orderly and nonpolitical manner, as provided, for example, by the 1939 amendments to title V of the Social Security Act. In summary, the American Public Health Association supports the idea of Cabinet status for the Federal Security Agency. Faithfully yours, REGINAL M. ATWATER, M. D., AMERICAN FEDERATION OF LABOR, Hon. JOHN L. MCCLELLAN, Washington 1, D. C., July 21, 1949. Chairman, Committee on Expenditures in the Executive Departments, United States Senate, Washington, D. C. DEAR SENATOR MCCLELLAN: The American Federation of Labor advocates the elevation to Cabinet status of the Federal Government's activities in the fields of health, education, and social security. As president of the American Federation of Labor, I respectfully urge that reorganization plan No. 1 of 1949 be allowed to become effective and ask that this letter be incorporated in the record of the hearings now being held on this subject. This plan constitutes the Federal Security Agency a Department of Welfare, giving proper recognition in the highest councils of the Government to Federal programs for the preservation and development of the Nation's human resources. Such recognition is long overdue. The American Federation of Labor has always insisted that equality of opportunity in education, a high standard of health for all, and assurance of some protection against the unpredictable hazards of insecurity are essential to the maintenance of the American system of free enterprise and free institutions. Enlightened management also has come to accept this view, the validity of which becomes increasingly evident as our industrial society becomes more and more complex. These are the objectives of the Federal Security Agency which would be administered by the proposed Department of Welfare. They are far too vital, too important to the preservation of our way of life, to relegate them any longer to a secondary rank in the Government. Sincerely yours, WILLIAM GREEN, President. Hon. JOHN L. MCCLELLAN, CONGRESS OF INDUSTRIAL ORGANIZATIONS, Chairman, Expenditures Committee, United States Senate, Washington, D. C. DEAR SENATOR MCCLELLAN: The CIO supports Reorganization Plan No. 1 of 1949 to establish a Department of Public Welfare. The reasons for the recommendation have been adequately explained in the President's proposal. Such a department would strengthen the ability of the Federal Government to bring security to American workers. Would you kindly have this communication put in the record? Sincerely, NATHAN E. COWAN, REORGANIZATION PLAN NO. 2 OF 1949-TRANSFERRING THE BUREAU OF EMPLOYMENT SECURITY THURSDAY, JULY 21, 1949 UNITED STATES SENATE, COMMITTEE ON EXPENDITURES IN THE EXECUTIVE DEPARTMENTS, Washington, D. C. The committee met at 11:30 a. m., pursuant to call, in room 357, Senate Office Building, Senator John L. McClellan (chairman) presiding. Present: Senators McClellan (chairman), Eastland, Long, Ives, Smith, and Schoeppel. Present also: Walter L. Reynolds, chief clerk. The CHAIRMAN. We will now proceed to take up Reorganization Plan No. 2, in order to give Mr. Pace and Mr. Ewing, who testified this morning as to Reorganizaton Plan No. 1, an opportunity to present their comments on Reorganization Plan No. 2, without having to return for that purpose on Monday, when that plan is scheduled to be considered by the committee. I believe you would prefer that; would you not, Mr. Pace? Mr. PACE. Yes; I would. Thank you very much, Mr. Chairman. The CHAIRMAN. At this point we will print in the record a copy of the President's message transmitting plan No. 2, and also the plan itself. (The President's message of transmittal, together with Reorganization Plan No. 2, is as follows:) [H. Doc. No. 223, 81st Cong., 1st sess.] MESSAGE FROM THE PRESIDENT OF THE UNITED STATES TRANSMITTING REORGANIZATION PLAN No. 2 of 1949, TRANSFERRING THE BUREAU OF EMPLOYMENT SECURITY, NOW IN THE FEDERAL SECURITY AGENCY, TO THE DEPARTMENT OF LABOR AND VESTING IN THE SECRETARY OF LABOR THE FUNCTIONS OF THE FEDERAL SECURITY ADMINISTRATOR To the Congress of the United States: I transmit herewith Reorganization Plan No. 2 of 1949, prepared in accordance with the provisions of the Reorganization Act of 1949. This plan transfers the Bureau of Employment Security, now in the Federal Security Agency, to the Department of Labor and vests in the Secretary of Labor the functions of the Federal Security Administrator with respect to employment services and unemployment compensation, the latter of which is now more commonly referred to as unemployment insurance. The plan also transfers to the Secretary of Labor the functions of the Veterans' Placement Service Board and of its Chairman and abolishes that Board. These changes are in general accord with recommendations made by the Commission on Organization of the Executive Branch of the Government. After investigation, I have found and hereby declare that each reorganization included in Reorganization Plan No. 2 of 1949 is necessary to accomplish one or more of the purposes set forth in section 2 (a) of said act. The primary benefits from these reorganizations will take the form of improvements in administration and service. It is probable that a significant reduction in expenditures will result from the taking effect of the plan as compared with the current estimates and work-load assumptions contained in the 1950 budget as amended, but an itemization of such savings is not possible in advance of the transfer. One of the major needs of the executive branch is a sound and effective organization of labor functions. More than 35 years ago the Federal Government's labor functions were brought together in the Department of Labor. In recent years, however, the tendency has been to disperse such functions throughout the Government. New labor programs have been placed outside of the Department and some of its most basic functions have been transferred from the Department to other agencies. In my judgment, this course has been fundamentally unsound and should be reversed. The labor programs of the Federal Government constitute a family of interrelated functions requiring generally similar professional training and experience, involving numerous overlapping problems, and calling for strong, unified leadership. Together they form one of the most important areas of Federal activity. It is imperative that the Labor Department be strengthened and restored to its original position as the central agency of the Government for dealing with labor problems. BUREAU OF EMPLOYMENT SECURITY One of the most essential steps in improving the organization of labor functions is the transfer of the Bureau of Employment Security to the Department of Labor. This Bureau administers the activities of the Federal Government with respect to employment services and unemployment insurance. These activities mainly involve the review and apportionment of grants-in-aid, approval of State plans and grants, the conduct of research and developmental activities, and the provision of advice and assistance to the State agencies which actually conduct the services. Public employment services and unemployment insurance are companion programs inextricably interrelated both in purpose and operation. The first assists workers in finding jobs and employers in obtaining workers; the second provides cash benefits for the support of workers and their families when suitable jobs cannot be obtained. Thus, each complements the other. At the local operating level the two programs are almost invariably carried on in the same unit— the local employment office. At the State level they are administered by the same agency in nearly every State. As a result, an unusually high degree of coordination at the Federal level is essential. There can be no question as to the basic consideration which must govern the administration of both of these programs. From the standpoint of all interested parties-the worker, the employer, and the public-the primary concern is employment. Essential as they are, unemployment benefits at a fraction of regular wages are a poor substitute for the earnings from a steady job. In the administration of these programs, therefore, primary attention must be focused on achieving the maximum effectiveness of the employment service. On them depend the prosperity and well-being of the worker and the extent of the unemployment-compensation burden on the employer and the public. I have long been convinced that the Department of Labor is the agency which can contribute most to the development of sound and efficient employment service. It has the understanding of employment problems and of the operation of the labor market which is essential in this field. It possesses the necessary specialists and the wealth of information on occupations, employment trends, wage rates, working conditions, labor legislation, and other matters essential to employment counseling and placement. Close working relations between the United States Employment Service and most of the agencies of the Labor Department are vital to the success of both. The Bureau of Labor Statistics has a fund of information on employment and occupations which is basic to the planning and operation of the Service. The Women's Bureau and the Child Labor Branch of the Wage and Hour Division afford expert advice on employment problems relating to women and adolescents. The Bureau of Labor Standards can assist the Service on questions of working conditions and other labor standards, and the Bureau of Apprenticeship on occu |