to express the wholehearted support of the American Legion of Reorganization Plan No. 2, which would transfer the Bureau of Employment Security from the Federal Security Agency to the Department of Labor and vest in the Secretary of Labor the functions of the Veterans' Placement Board and of its Chairman. The position of the American Legion in this respect is stated in the resolution presented to the national executive committee by the national economic commission and the national employment committee and adopted by the national executive committee during its last meeting in May of this year in Indianapolis. I should like to read this resolution:

"Whereas the Bureau of Employment Security is now a part of the Federal Security Agency and its functions are properly a part of other bureaus and agencies embraced within the Department of Labor, and the American Legion has heretofore urged the placing of the Employment Security Services in the Department of Labor: Now, therefore, be it

Resolved by the national executive committee of the American Legion, Indianapolis, Ind., May 4-6, 1949, That we urge that the Bureau of Employment Security, now a part of the Federal Security Agency, be transferred to the Department of Labor, and that the American Legion support whatever administrative measures or legislative actions necessary to effect this objective."

I might add, at this time, that a resolution urging the placing of the Employment Service functions within the Department of Labor was adopted by the American Legion at the last national convention, held in Miami, in October 1948. The American Legion, of course, is primarily interested in this matter from the standpoint of the veteran. Our principal concern, therefore, is the location of the Veterans' Employment Service in the agency of the Federal Government where the employment interests of veterans are most likely to be advanced. We feel that the Department of Labor is that agency. In taking this position we have a record to rely on; for 9 of the 16 years since the enactment of the Wagner-Peyser Act the United States Employment Service, of which the Veterans' Employment Service is a part, has been administered by the Department of Labor, and we consider that during those years the employment interests of veterans were best promoted. That is said with no intention to reflect upon the good intentions or efficiency of the other agencies which at other times have administered the Employment Service. It is reasonable to expect the Employment Service to prosper when located in the agency of Government where it appropriately belongs the agency which has been created for the purpose, among other things, of advancing the opportunities of wage earners for profitable employment.

In the Department of Labor the Employment Service would have the advantage of close relationship with other bureaus and agencies which are also concerned with employment matters. The Department of Labor, furthermore, contains the Bureau of Veterans' Reemployment Rights. Certainly this function is closely related to the job of providing employment for veterans and I am sure that both the Employment Service and the Bureau of Veterans' Reemployment Rights would benefit by the closer liaison which would be made possible by the relocation of the USES in the Department of Labor.

We note with approval the provision of the reorganization plan which would transfer the functions of the Veterans' Placement Service Board and those of its chairman to the Secretary of Labor and abolish the Board. We consider it desirable that the power of appointment of the chief of the Veterans' Employment Service be vested in the head of the agency in which the service is located rather than in the chairman of a board who, by law, is the head of another agency primarily concerned with other matters. We consider that the concentration of the responsibility for the administration of the Veterans' Employment Service in one official is a vast improvement, from an administrative standpoint, over the previous arrangement whereby this responsibility was vested in a board which was largely inactive.

Because of our greater interest in the Veterans' Employment Service and the United States Employment Service, we have not referred to the transfer of the unemployment-insurance function. There seems to be unanimous agreement, however, that this function should be lodged in the same agency which includes the USES. Since both are Federal-State programs dealing with labor-force conditions, the appropriate agency is the Department of Labor.

To summarize, it is the position of the American Legion, expressed by resolution of its last national convention and of its national executive committee, that Reorganization Plan No. 2 of 1949 should be approved. That position is based upon the belief that the employment interests of veterans will best be served by the location in the Department of Labor of the Bureau of Employment Security.

I appear before this committee to express the wholehearted support of the American Legion of Reorganization Plan No. 2, which would transfer the Bureau of Employment Security from the Federal Security Agency to the Department of Labor, and vest in the Secretary of Labor the functions of the Veterans' Placement Board. The position of the American Legion in this respect is clearly stated in a resolution which was passed at the last meeting of the national executive committee. This resolution reads as follows:

Whereas the Bureau of Employment Security is now a part of the Federal Security Agency and its functions are properly a part of other bureaus and agencies embraced within the Department of Labor, and the American Legion has heretofore urged the placing of the Employment Security Services in the Department of Labor: Now, therefore, be it

Resolved by the National Executive Committee of the American Legion, Indianapolis, Ind., May 4-6, 1949, That we urge that the Bureau of Employment Security, now a part of the Federal Security Agency, be transferred to the Department of Labor, and that the American Legion support whatever administrative measures or legislative actions necessary to effect this objective.

A similar resolution was adopted by the Legion at the last national convention, held at Miami in October 1948.

The Legion is, of course, primarily interested in this matter from the standpoint of the veteran. Our principal concern, therefore, is the location of the Veterans' Employment Service in the agency of the Federal Government where the employment interests of veterans are most likely to be advanced. We feel that the Department of Labor is that agency.

In the Department of Labor, the Employment Service would have the advantage of close relationship with other bureaus and agencies which are also concerned with employment matters. The Department of Labor, furthermore, contains the Bureau of Veterans' Reemployment Rights. Certainly this function is closely related to the job of providing employment for veterans, and I am sure that both the Employment Service and the Bureau of Veterans' Reemployment Rights would benefit by the closer liaison which would be made possible by the relocation of the USES in the Department of Labor.

To summarize, it is the position of the American Legion, expressed by resolution at its last national convention and of its national executive committee, that Reorganization Plan No. 2 of 1949 should be approved. That position is based upon the belief that the employment interests of veterans will best be served by the location in the Department of Labor of the Bureau of Employment Security.

The CHAIRMAN. You speak, now, for veterans; but can you tell the committee why it would be in the interest of the public? Let us get away from the group, for a minute, if we can. Can you tell the committee why it would be in the public interest to transfer this function to the Department of Labor?

Mr. SMITH. We believe, sir, that when the work load is heavy there is a tendency in the present agency to emphasize the payment of claims, whereas the Department of Labor is primarily interested in seeing that a maximum employment level is maintained. In other words, employment would be primary rather than secondary.

The CHAIRMAN. You think if it was placed in the Department of Labor, there would be more effort placed on finding jobs for the unemployed than there is at present?

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Mr. SMITH. We do, sir.

The CHAIRMAN. You believe that?

Mr. SMITH. We think that the past history of the 9 of the 16 years when it was under that Department indicates that that would be true. The CHAIRMAN. Does that not conflict with the general idea that prevails, at least, that if it is placed in the Department of Labor the merit-rating system would go out of the program? Does it not conflict with that?

Mr. SMITH. I don't believe so, sir.

The CHAIRMAN. Senator Long?

Senator LONG. I take it that you do not agree with the attitude expressed by quite a few witnesses that the Department of Labor is necessarily prejudiced against the employer.

Mr. SMITH. We do not share that view, Senator.

Senator LONG. Did your organization appoint a committee and study this matter, in making these recommendations, at your national convention?

Mr. SMITH. Yes, sir; this was the result of committee action.

Senator LONG. In other words, this was very thoroughly studied, and gone into. Your organization does not represent only veterans seeking jobs. There are a lot of your members who have very good jobs in their own right.

Mr. SMITH. That is right.

Senator LONG. So your organization is in a position to view it more or less impartially, from both sides of the fence.

Mr. SMITH. I think that is true. I might say that this organization is represented on the committee that was referred to yesterday, as to labor, management, and the public.

The CHAIRMAN. Senator McCarthy?

Senator MCCARTHY. Let me ask you this question. Does the American Legion favor the enactment of all of the Hoover Commission recommendations insofar as the Department of Labor is concerned? The President, in his plan No. 2, does put into effect some of the Hoover Commission recommendations. I would like to know: Does the Legion favor the adoption of all of those recommendations? Maybe you would like to have me first enumerate them.

Let me first enumerate the deviations, if I may, because I would like to get the Legion's position. Reorganization Plan No. 2 provides for the transfer of the Bureau of Employment Security, of course, to the Department of Labor, but it does not merge the Veterans' Employment Service with the Bureau of Employment Security after this transfer. That is a deviation from the Hoover Commission recommendation. Has the Legion studied that, and have you taken a position?

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Mr. SMITH. I will go back to the resolution, which has been acted on. Senator MCCARTHY. You have the resolution before us. All right. Second, it does not transfer from the Federal Security Agency to the Department of Labor the Bureau of Employees' Compensation and the Employees' Compensation Appeals Board. Do you know of your own knowledge whether the Legion has taken a position on that?"

Mr. SMITH. No; it has not.

Senator MCCARTHY. No. 3, it does not transfer from the United States Maritime Commission to the Department of Labor the functions

relating to seaman's minimum wage determination on privately operated vessels. Do you know if the Legion has taken any position on that?

Mr. SMITH. We have taken no position on that.

Senator MCCARTHY. No. 4, it does not transfer the Selective Service System, including the Appeals Board, to the Department of Labor, as the Department has recommended.

Mr. SMITH. It has taken no action on that, Senator.

Senator MCCARTHY. No. 5, it does not include the recommendations of the Hoover Commission that the authority of the Department of Labor with respect to enforcement of labor standards in Government contracts and prevailing wage studies be fixed in the Department, and that authority therefor be clarified.

Mr. SMITH. The Legion has taken no action on that.

Senator MCCARTHY. In other words, the Legion has taken no action on the over-all Hoover Commission recommendations, as far as the Department of Labor is concerned.

Mr. SMITH. That is right, sir.

The CHAIRMAN. Senator Ives?

Senator IVES. Do you happen to know if the position taken by the Legion is the same as that taken by the VFW?

Mr. SMITH. I do not, Senator.

Senator IVES. The reason I raise that question is that a gentleman who was here the other day, who presumably was not representing the VFW as such, indicated that the VFW was opposed to this proposal.

Mr. SMITH. I am not familiar with the position of the VFW.

Senator IVES. It occurs to me that the historic position of the American Legion, of which I happen to be a member, as well as of the VFW, has always been in favor of keeping all matters pertaining to veterans separate. Is that not correct? A separate veterans' organization integrated right straight up through; is that not correct? That is the historic position of the Legion, as I recall, over the years. General TAYLOR. We have always been in favor of keeping all matters related to veterans in one agency, under one tent; yes.

Senator IVES. That was my recollection. This, then, is a departure from that previous policy. Is that right?

General TAYLOR. This was placed in the Department of Labor, as has been brought out by other witnesses, under the Wagner-Peyser Act; and when the Veterans' Placement Service was established, it was an independent agency placed over in the Department of Labor. And as a result of our study of the matter, we consider that they have done a thoroughly good job, and that it is there that all matters dealing with veteran employment should now be concentrated.

Senator IVES. Do not get me wrong. I am not criticizing. I am just inquiring. I am curious about this change in policy.

General TAYLOR. Yes, sir.

Senator IVES. One more thing: Assuming that the Employment Service were anywhere else than in the Department of Labor, would the American Legion still be in favor of merging the Veterans' Employment Service with it?

General TAYLOR. Yes, sir.

Senator IVES. Is it a question of the merger of the employment services, or is it a question of having all of these in the Department of Labor? Which is it?

General TAYLOR. The question of having all matters dealing with the employment of veterans and the finding of employment for veterans in the Department of Labor.

Senator IVES. Then it is because of the Department of Labor primarily. Is that it?

General TAYLOR. Yes, sir.

The CHAIRMAN. Senator Smith?

Senator SMITH. No questions.

The CHAIRMAN. Thank you, gentlemen.

General TAYLOR. Thank you very much, Mr. Chairman, and members of the committee.

The CHAIRMAN. Mr. Hatton, will you come forward, please?

The committee will continue in session until we receive a quorum call. We will give you as much time as that will permit, and you may use it as you think is to your best advantage. We are sorry, but that is the best we can do.

STATEMENT OF ROBERT E. HATTON, CHAIRMAN, UNEMPLOYMENT COMPENSATION ADVISORY COMMITTEE, DEPARTMENT OF ECONOMIC SECURITY, STATE OF KENTUCKY

Mr. HATTON. I am Robert E. Hatton, a practicing lawyer in Louisville, Ky. I am speaking now as chairman of the advisory council of the Kentucky commission. Also, I am authorized to present to this committee a resolution of the Kentucky commission itself.

The CHAIRMAN.. Would you like to file your prepared statement and let it be incorporated in the record?

Mr. HATTON. I would like, if the committee please, to file these two resolutions.

The CHAIRMAN. They may be filed, and placed in the record at this point, and you may proceed.

(The resolutions referred to are as follows:)

RESOLUTION

Whereas the President of the United States by Reorganization Plan No. 2 poses the transfer of the unemployment-compensation and the employment-service programs from the Federal Security Agency to the Department of Labor; and Whereas such transfer will become effective unless such plan is rejected by the Congress of the United States; and

Whereas the Kentucky Unemployment Insurance Commission, after having carefully considered such proposed transfer, is of the opinion that

1. Such programs are now being efficiently and impartially administered by the Federal Security Agency;

2. It would not be in the best interest of such programs, which were enacted in the interest of the general public, to be administered by a special-interest agency such as the Department of Labor;

3. Such transfer would be a long stride in the direction of the ultimate. federalization of such programs and the complete elimination of the present Federal-State system of administration;

4. Such transfer would materially weaken and result in the ultimate total elimination of employer-experience rating;

5. The transfer of such programs to the Department of Labor would ultimately result in complete subordination to the interests of labor at the Federal level,