to find a better arrangement, in the hope that we would find a way get greater efficiency and some economy out of it.

to

Senator SMITH. During the 9 or 10 years I have been here it seems to me that when anything isn't satisfactory in a department, you wake up the next morning and find some agency transferred out or some agency set up or created into a new bureau altogether, a new agency. I think it is about time that Congress took this into their hands and reorganized and really streamlined it and got down to the 10 departments that you suggested. I am very much impressed by what you said about streamlining,

Thank you, Mr. Chairman.

Mr. RowE. Thank you, Mr. Chairman.

STATEMENT OF RUDOLF F. VOGELER, MANAGER, INDUSTRIAL COUNCIL, CHAMBER OF COMMERCE OF PHILADELPHIA

The CHAIRMAN. Mr. Vogeler, will you come forward, sir? Do you have a prepared statement?

Mr. VOGELER. I do have, Mr. Chairman, which I have submitted, and I would appreciate it if it were introduced into the record. Í I will refrain from reading it and will merely comment on a few points. The CHAIRMAN. Your statement may be printed in full in the record.

Mr. VOGELER. Thank you.

(Mr. Vogeler's prepared statement follows:)

STATEMENT SUBMITTED BY RUDOLF F. VOGELER, MANAGER, INDUSTRIAL COUNCIL, CHAMBER OF COMMERCE OF PHILADELPHIA

I am here today to submit the following statement in behalf of the Chamber of Commerce of Philadelphia, which represents some 2,000 business firms, urgently opposing Reorganization Plan No. 2 which proposes to transfer the Bureau of Employment Security and its jurisdiction over the unemployment compensation and employment service programs, from the Federal Security Agency to the United States Department of Labor.

DOES PRESIDENT'S PLAN REDUCE ADMINISTRATIVE COSTS?

That business is vitally interested in reducing the cost of administering the Federal Government goes without saying. But, we raise the question, "Why Reorganization Plan No. 2?", which no one has justified, factually, on the basis that it will reduce such costs. To the contrary, it has unquestionably already been called to your attention that the proposed transfer might be more expensive than at present, by virtue of the fact that a new set of regional offices might be set up by the United States Department of Labor to take care of this activity. It occurs to us that among the various recommendations made by the Hoover Commission there must be a number, which if put into effect, virtually assure substantial savings. We would urge therefore, greater emphasis on those recommendations rather than on this one in which the savings at best have only been referred to as "probable."

INTERRELATION OF UC-ES AND OASI

It would appear that the maximum opportunity for administrative economy would lie in continuing the consolidation of those basically complementary functions of the Bureau of Empolyment Security and the Bureau of Old-Age and Survivors Insurance within the Federal Security Agency. It should be noted that the basic records of these two bureaus are the "wage records." It would seem therefore, that splitting these two bureaus whose reports and records are interrelated would hardly result in savings.

THE SOCIAL SECURITY PROGRAM DESIGNED TO BENEFIT THE PUBLIC

We submit that it was clearly the intent of Congress in designing the Social Security Act, to establish a program for the benefit of the public and not in the interest of any one group. This consideration makes administrative and fiscal control of any part of this program, by an agency traditionally dedicated to the interests of organized labor, obviously illogical.

There seems to be little question that the proposed transfer would give the United States Department of Labor certain controls over the more than $7,000,000,000 deposited in the Federal Treasury from pay-roll taxes, to pay benefits to eligible, unemployed workers. As a special interest agency, the United States Department of Labor would also receive some authority in making rules, including those determining eligibility of claimants to receive benefits within the States, to allocate funds for administration of the unemployment compensation and employment service systems within the States, with some power to withold such funds under specified conditions, and to approve and certify the unemployment compensation laws of the various States. We cannot help but feel that with such authority supplemented by the potent pressure of organized labor, increasing emphasis would be placed on bringing about uniformity or standardization on such matters as benefit amounts, duration of benefits, relaxation of disqualification provisions, and possibly, eventual elimination of experience rating plans.

As an example of the thinking which might be considered merely a prelude to future action, I refer you to a recommendation from one of the annual conferences of labor officials called by the Secretary of Labor, namely, that "In testing the unemployed worker's availability for work no general requirements for actively seeking work outside of registration at the public employment office be incorporated in State laws." This recommendation almost implies that an unemployed worker need take no personal responsibility for finding a job. We sincerely hope that this committee will agree with us that this emphasis is morally wrong, and that it is high time it was changed to one encouraging individual responsibility. This country became great because its citizens were "doers"-not "leaners."

It is obvious to us that continued pressure to standardize the provisions of the various State unemployment compensation laws would unquestionably result in eventual federalization of the entire program. We are unalterably opposed to any steps that might be taken in this direction. We are interested in a more effective Federal Government, and not a bigger one.

THE PUBLIC EMPLOYMENT SERVICE REQUIRES SUPPORT OF BUSINESS

The Public Employment Service requires the support of business. With reference to the Public Employment Service, we submit that to be effective, such a service must enjoy the confidence and cooperation of businessmen. This relationship cannot be the product of coercion. Such confidence and cooperation is most likely to obtain when ultimate administrative control is vested in an agency at least technically neutral in its attitude toward labor and management. This is more nearly the position of the Federal Security Agency-certainly, it is not that of the United States Department of Labor.

There is additional evidence to convince us that incorporation of the Bureau of Employment Security in the Department of Labor would not reduce administrative costs. The United States Employment Service, during its temporary residence in the Department of Labor, virtually thrust upon the various State agencies all manner of auxiliary "services" of an allegedly technical nature which their representatives have tried to "sell" to indifferent employers. Some of these services, such as the counseling and testing of applicants, and the collection of labor market information are justifiable. Others, such as developing job descriptions and introducing work simplification techniques for employers are not. These latter are quasi-engineering services, which an employer should obtain for himself.

CONCLUSION

We submit that the justification for any reorganization, transfer, or shuffle of functions of Federal departments, bureaus, or agencies should be measured against one criterion-namely, "Will this move result in more effective and efficient operation or service?" We do not feel that the desire merely to "build up" any department meets this criterion. Consequently, we respectfully urge your opposition to Reorganization Plan No. 2.

Mr. VOGELER. Business, it goes without saying, is vitally interested in reducing the cost of administering the Federal Government. Consequently, we raise the question, why Reorganization Plan No. 2? In all the testimony that I have heard so far I fail to find any factual justification which would point to any great saving. On the other hand, it occurs to us that there are or must be among all the recommendations made by the Hoover Commission some recommendations which virtually assure some savings. Consequently, we question whether the emphasis might not be a little distorted at this time, and perhaps we ought to pay more attention to those recommendations which would assure a saving rather than to this one which merely is referred to as resulting in possible or probable saving.

The CHAIRMAN. Can you indicate any Hoover Commission recommendation that would you think actually result in a saving?

Mr. VOGELER. It occurs to me in reading some of the summaries that there were some recommendations made in connection with the Veterans' Administration.

The CHAIRMAN. I was just trying to determine if you had in mind some recommendation that would actually result in saving.

Mr. VOGELER. I am not going to go beyond this particular point at this time, Mr. Senator.

The CHAIRMAN. All right.

Mr. VOGELER. I am going to try to avoid the use of words like “distrust" and "apprehension."

The CHAIRMAN. The chairman takes full responsibility for the use of those words. I did not know how to interpret a lot of this testimony we have been hearing in any other language. That is the way it seemed

to me.

Mr. VOGELER. Maybe this is just a synonym for the same._We are concerned over the possibility that with the transfer of the Employment Security Bureau to the Department of Labor, it might be considered a step in the direction of eventual federalization of the Service. I think we can say that the officials of the Department of Labor are more vulnerable to the pressures of organized labor, and consequently we feel that there will be continued pressure in the direction of standardizing such provisions as the weekly benefit amounts and the duration of benefits. We have a concrete example in an entirely different field of labor's attitude toward wiping out differentials in our strike in Hawaii, the dock strike, where they are attempting to establish the same rate as on the west coast. The same thing in a little different way, might occur to weekly benefit amounts, which now vary but which might ultimately become standardized. That we consider to be a step in the direction of federalization of the entire program, to which we are opposed. We are interested in a more effective Government. We are not interested in a bigger one.

There is some reason to be concerned, based upon what occurred when the Employment Service was temporarily residing in the United States Department of Labor not too long ago, about the establishment of certain alleged technical services in the State employment service programs. These technical services are such things as counseling, testing, and so on. Some of these services we feel might be justifiable. There are others which we do not feel are justifiable. For example, representatives of an employment service going into an employer's

plant and developing job descriptions for him and introducing work simplification techniques we don't consider justifiable. These are quasi-engineering techniques, if you will, which we feel the employer ought to obtain for himself, and he should not be going to some Federal agency to get them.

The CHAIRMAN. Did that occur while it was in the Department of Labor?

Mr. VOGELER. Yes, it did occur. Their representatives went out to the State agencies and as some of them put it virtually thrust these services upon the State agencies. They established a four- or fivepoint program and requested them to incorporate those services within their State programs.

We submit that the justification for any reorganization, transfer, or shuffle of Federal departments, agencies, or bureaus should meet one criterion, namely, will the move result in more effective and efficient operation or service? We feel that merely trying to build up a department doesn't meet that criterion, and consequently we urgently oppose this Reorganization Plan No. 2.

The CHAIRMAN. You say the policy they pursued when it was under the Department of Labor indicated that they were very effective policies. Is that not what you indicated?

Mr. VOGELER. No. I said when they were in the Department of Labor they instituted in the State services certain types of technical services that we don't think were justified.

The CHAIRMAN. I understood you to say they did it in a rather effective way.

Mr. VOGELER. You mean they sold it to the States in an effective way? Is that what you mean, sir?

The CHAIRMAN. I understood they got results.

Mr. VOGELER. They established the services but strangely enough, employers were very indifferent. They haven't used those services very extensively, although the opportunity to use them is still there. Most employers are very indifferent to them. A good employer doesn't go to the outside to get engineering work done inside his plant.

I would like at this point to add a personal supplement to our prepared statement. I am very anxious to establish before this committee that I have a personal interest in the Employment Service, and that I am very friendly toward it. I had the privilege of being associated with the public Employment Service for over 10 years in such varying capacities as a State director, as director of a research center, as an associate regional representative when the Employment Service was under the Social Security Board, and, last, as the Philadelphia director of the War Manpower Commission. During those years we went through the trials and tribulations of many reorganizations and shifts. I can assure the committee that that was not conducive to building up esprit de corps on the part of the personnel in the Employment Service. I am confident that the Employment Service has lost many people who at one time thought they might make a career of that type of work. I would make just one plea, that the Employment Service be allowed to settle in one spot for a while and not be used as a political football.

That is all, Mr. Chairman.

The CHAIRMAN. Do you think this proposed plan to transfer the service back to the Department of Labor is influenced in some way by political considerations?

Mr. VOGELER. I would say there are such implications in the transfer, Mr. Chairman, in that I believe one of the campaign promises was to build up the Department of Labor, and certainly this would be in that direction.

The CHAIRMAN. Any questions?

Senator SMITH. Mr. Chairman, I think that suggestion that it settle somewhere is a good one. That is what we are trying to do through these reorganization plans. You speak about economy. Would you not think economy would come from efficiency, and efficiency would come by doing away with so much overlapping and duplication of Government activities?

Mr. VOGELER. Unquestionably. It would also come about if you would permit this permit this poor little agency that should be doing a good job just to remain in one place for a while and not be badgered by periodic shifts and reorganizations and new administrations, and all that sort of thing.

There is one point that Senator Mundt made before that I would like to comment on with reference to the Employment Service being an agency operating in the interest of workers and probably therefore of particular interest to the Department of Labor. I don't think we should overlook the fact that the Employment Service is also supposed to be of service to employers. After all, employers do occasionally have to go to the outside to find workers, and the Employment Service should function there. So it isn't purely a service to workers as such. It performs a dual function.

The CHAIRMAN. Thank you, Mr. Vogeler.

Mr. VOGELER. Thank you.

The CHAIRMAN. Mr. Smith, will you come around, please, sir? You have a prepared statement?

STATEMENT OF RAYMOND C. SMITH, DIRECTOR, MICHIGAN MANUFACTURERS' UNEMPLOYMENT COMPENSATION BUREAU, INC., DETROIT, MICH.

Mr. SMITH. Yes, I do have, Mr. Chairman. I should like to have it introduced in the record, but I should like to make about 3 minutes of remarks, if I may, please.

The CHAIRMAN. Yes, sir; you say. Your statement will be printed in the hearings, and you may proceed.

(Mr. Smith's prepared statement follows:)

STATEMENT SUBMITTED BY RAYMOND C. SMITH, MICHIGAN MANUFACTURERS' UNEMPLOYMENT COMPENSATION BUREAU, INC., DETROIT, MICH.

My name is Raymond C. Smith. I am the director of the Michigan Manufacturers' Unemployment Compensation Bureau, Inc., of Detroit, Mich. Our organization is an employers' association organized as a nonprofit corporation under Michigan law. Our members include some 450 firms in all lines of industry in practically every county of the State and our board of directors, which is active in our management, includes representation of the three largest automobile manufacturers in the world, as well as in furniture, paper and many other industries.

We appeared before a subcommittee of the Senate Committee on Labor and Public Welfare when it was considering Reorganization Plan No. 1 of 1948 and House Concurrent Resolution 131. The date was February 28, 1948, and our complete testimony was recorded beginning on page 160 of the Government's official report on the subcommittee's hearings. The proposal presently before