ments. These States and Territories do not merge these functions with public assistance, health or education.

Nothing could be more basic to the economic health of employers, workers, and the public than doing the best possible job of finding job openings and matching them with qualified workers, or failing that, of helping workers maintain their purchaing power with unemployment compensation to meet their own minimum needs and to buy the products of industry. That, I submit, under our free enterprise system, is a labor job, an economic job, not a welfare service handed down by a beneficent Government. We don't find workers jobs to give them charity. We find them jobs because American business and the Nation need their skills to produce the goods and services all of us must have. Matching men and jobs and unemployment compensation— with the emphasis on job placement-are economically and administratively interrelated and must be operated together. The relationship between unemployment insurance and the other social insurances is largely theoretical and superficial.

To carry this dual role of placement and unemployment compensation properly, it should have access to all the data and experience which the Labor Department, under its congressional mandate, possesses. It needs the information on employment and earnings that the Bureau of Labor Statistics collects, the experience with working conditions, State labor law and administration, employment problems of youth, and Federal-State cooperation that the Bureau of Labor Standards has, the knowledge of special women's problems that the Women's Bureau possesses and the experience with apprentice-training that the Bureau of Apprenticeship has collected. And I want to say too, that in my opinion, this contention that the Labor Department will administer this program with some sort of labor bias is nonsense. I have been a State labor commissioner for the past 10 years and have been in this general field for more years than I care to admit to you gentlemen. I have yet to see a labor law enacted or an administrative order sustained that promoted a special interest at the expense of the public welfare. There may be a lot of discussion but when the chips are down, the public interest is sustained. You just don't get labor law enacted or administered any other way.

As a State labor commissioner-duly jealous of States' rights-I hope you will uphold this transfer to the Labor Department because it recognizes the rightful place of State agencies in labor-law administration and works to strengthen their effectiveness. The same cannot be said of all Federal agencies. Indeed it has been experience with these other Federal agencies that has sometimes led State administrators to fear that even the Labor Department might some day infringe on States' rights. Few if any charges of such infringement have ever been sustained against the Labor Department. The necessity to work closely with the States both in the employment service and in unemployment-compensation administration makes me look forward to their transfer to the Labor Department.

In closing, gentlemen, let me say this reorganization plan is a step in the right direction, long approved by our association, of coordinating labor functions in one agency, the Labor Department. Such coordination was also recommended by the Hoover Commission which foresaw, as we have, the increased efficiency and service to management,

labor, State and Federal officials, and the public. I hope very much that this reorganization plan will not be opposed by Congress. Senator IVES. Any questions, Senator Schoeppel?

Senator SCHOEPPEL. No questions.

Senator IVES. Thank you very much, sir.

Mr. SATTLER. Thank you.

Senator IVES. Is Mr. Omar Ketchum here? Can you do your job in about 7 minutes, Mr. Ketchum? I know you can be brief when you want to be.

STATEMENT OF OMAR KETCHUM, DIRECTOR, LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS, WASHINGTON, D. C.

Mr. KETCHUM. I want to be this morning.

Senator IVES. You represent the Veterans of Foreign Wars?
Mr. KETCHUM. I do.

Mr. Chairman and gentlemen of the committee, I am not on too solid ground this morning, in the absence of a national mandate from our organization, because this Reorganization Plan No. 2 has arisen, of course, between our national conventions. We have one coming up this coming August in Miami, Fla.

But as director of the legislative service and as supervisor of our employment division, it is my own considered judgment that the organization would approve this transfer of the Bureau of Employment Security, the Veterans' Employment Service, and the Federal Advisory Council to the Department of Labor.

We have had some apprehension as some of these other witnesses have had, concerning bias or influence in the Department of Labor, but we have satisfied ourselves, due to the individuals who are presently in charge, that there will be no bias in the operation of this. We have had assurances, due to repeated conferences in the Department, that insofar as the Veterans' Employment Service is concerned, in which we are primarily interested, there will certain be enough autonomy and authority there, so that we are not apprehensive that the interests of veterans will in any way be damaged or injured by reason of this transfer to the Department of Labor. And I believe, as the previous witness has said, that certainly there is a direct relationship between the operation of the Department of Labor and the Employment Service in all of its ramifications, and it seems to be a logical place for the administration of the Bureau of Employment Security and the Veterans' Employment Service.

So all I wanted to do, Mr. Chairman, was to assure you that so far as our organization is concerned, to the best of my knowledge and belief, we would have no objection to this transfer, and at the present time we have confidence, particularly, as another speaker has said about Mr. Robert Goodwin, as the Director of the Bureau of Employment Security, and in Mr. Galvin, who is Under Secretary of Labor, and Maurice Tobin, the present Secretary of Labor. We feel that the interests of the veterans will in nowise be jeopardized by this transfer, particularly the Veteran's Employment Service, under the Department of Labor. At the present time we are ready and willing to go along with this transfer, believing it to be a sound and reasonable proposition.

Then, too, Mr. Chairman, I think we can all agree that the Hoover Commission has expended a lot of time and a lot of the taxpayers' money in making special studies of these various reorganization plans, and it was my understanding that the Commission was unanimous in its recommendation on this Reorganization Plan No. 2. We have a great deal of confidence in the caliber of the Hoover task force that made the report on this particular matter

Senator IVES. The task force made no recommendations, you know. Mr. KETCHUM. As I understand it, it is a recommendation, though, of the Commission.

Senator IVES. Of the Commission. But the recommendation the Commission made is not this identical plan. However, the task force itself made no recommendation.

Mr. KETCHUM. I understood that the Hoover Commission itself, however, had approved this general idea.

Senator IVES. They made a recommendation, but it was not exactly this recommendation. This is included in their recommendation. Mr. KETCHUM. I see.

Mr. Chairman, that is about all I have to say, unless any of the members of the committee would like to ask any questions.

Senator IVES. Senator Schoeppel?

Senator SCHOEPPEL. I have no questions.

Senator IVES. I have; because this thing is rather intriguing to me, inasmuch as I have been more or less active at one time or another in the Veterans of Foreign Wars and the American Legion. I am interested in this historic change of policy in our veterans' organizations.

As you recall, we have always been very insistent that we be set apart, and that the department of veterans be separate and apart in government, both Federal and State. Now this thing comes along, and we are suddenly swinging over. I am just wondering why the change in policy and whether it is indicative of anything.

Mr. KETCHUM. Let me give you this brief explanation. I would not say it is necessarily a change in policy. We do not have a separate Veterans' Employment Service now. The Veterans' Employment Service is a part of the Federal Security Agency, so we have no separate set-up as it is. At the present time, the Employment Service is under the Veterans' Placement Service Board, and that has been, in my opinion, very unsatisfactory, because the Board either has not had the time or would not take the time properly to function.

Senator IVES. Was that done upon the recommendation of the veterans' organization? I mean was it placed there upon their recommendation?

Mr. KETCHUM. Well, to some extent. Actually there was a recommendation made to put the Employment Service under the Veterans' Administration. But I think you can appreciate, Mr. Chairman, that we recognize that it would be a very expensive and a duplicating operation if you attempted to set up a veterans' employment service completely separate and apart from the United States Employment Service. As a matter of fact, when the recommendation was made that the Veterans' Employment Service be made a part of the Veterans' Administration, our organization raised a serious question as to the advisability of establishing a completely separate employment service for veterans. Of course, we want an employment service that

is devoted exclusively to the interest of the veterans, but we think it should be operated in cooperation with the regular United States Employment Service of the Bureau of Employment Security.

Now, it was set up under a Veterans' Placement Service board. To a large extent, though, it was operated as a part of the United States Employment Service, correlating its activities from the standpoint of personnel, offices, equipment, and so forth. What we will have, as I understand it, in the Department of Labor will be almost identical with what we have at the present time under the Federal Security Agency. For example, if you will read the plan, you will note that in transferring the functions of the Veterans' Employment Service Board to the Secretary of Labor, he will then act in lieu of the Board, or he will delegate-not to just anyone in the Labor Department, but he will delegate that authority to the Chief of the Veterans' Employment Service. In other words, the policy of the Veterans' Employment Service will stem directly from the Secretary or the Under Secretary, or will be transferred to the Chief of the Veterans' Employment Service, and not through any of the other officers, or functions of the Department of Labor.

There is a very direct tie-in between the Veterans' Employment Service, from the standpoint of administrative policy matters and personnel matters, and the Secretary of Labor; and not through all of the other subordinates in the Labor Department.

So I think they have safeguarded it pretty well, to give us as closely as possible almost a separate identifiable employment service, but maintaining at the same time the necessary coordination and liaison with the Bureau of Employment Security.

Senator IVES. Then I take it your principal interest here is to make sure that the Veterans' Employment Service is merged with the United States Employment Service wherever that service may be, and that you prefer that it rest in the Labor Department. Is that it?

Mr. KETCHUM. At the present time, yes.

Senator IVES. The principal interest of the VFW is in getting it into the United States Employment Service.

Mr. KETCHUM. That is right; working in coordination with the United States Employment Service, and yet preserving sufficient autonomy of the Veterans' Employment Service so that it will not become completely a creatude of the whims of any of the subordinates in whatever department it is in which it rests. And we think under the manner in which it is set up, those safeguards are there.

Senator IVES. Assuming such safeguards were set up anywhere else, I take it you would be satisfied..

Mr. KETCHUM. Oh, yes. The only thing is, Mr. Chairman, that we feel, as many of the other speakers have said, that there does seem to be a very direct relationship between the functions and operation of the Department of Labor, and the Employment Service. Of course, time alone will determine whether some of the apprehensions that have been expressed here will materialize. I don't know. As for some of the gentlemen who have objected to this thing, maybe within a year or two it may be determined that they were right in their apprehensions or fears. But I think that is something that only time can determine. I think you will appreciate that, Mr. Chairman.

Senator IVES. Thank you very much, Mr. Ketchum. I am sorry you had to hurry.

Before this hearing adjourns, I should like to enter into the record a telegram from Mr. William Green, president of the American Federation of Labor, and another telegram from Mr. Nelson Cruikshank, director of social insurance activities of the American Federation of Labor, together with a statement by Mr. Cruikshank, which will be entered in full. Mr. Cruikshank was supposed to be here this morning, but for reasons which he could not avoid, he was detained and could not be. Without objection that will be done. (The material referred to is as follows:)

Hon. JOHN L. MCCLELLAN,

WASHINGTON, D. C., July 15, 1949.

Chairman, Senate Committee on Expenditures in the Executive Departments, Senate Office Building, Washington, D. C.

Am informed your committee plans hearings on July 25 on subject of President's Reorganization Plan No. 2. On behalf American Federation of Labor am requesting opportunity to present our views on this important subject. If you will kindly notify me as to the time we can be heard I will designate a representative.

Hon. JOHN J. MCCLELLAN,

WILLIAM GREEN, President,
American Federation of Labor.

WASHINGTON, D. C., July 27, 1949.

Chairman, Senate Committee on Expenditures in the Executive Departments, Senate Office Building, Washington, D. C.

Regret unable to appear before your committee as scheduled Thursday morning July 28 to present in person position of American Federation of Labor in support President's Reorganization Plan No. 2. At President William Green's request am asking that my statement sent to Committee Clerk Reynolds last Friday be incorporated in record of hearings together with brief material which will follow by mail.

We fully appreciate that the necessity to postpone the time of my appearance from that originally scheduled on the 26th could not be avoided by your committee. The time set for today, however, ran into other previous commitments and after discussion with President Green and in consideration of the pressure of time under which your committee is operating it was thought best that we make the request contained in this telegram.

After the original arrangements for hearings were made I had a communication from Mr. A. E. Lyon, executive secretary of the Railway Labor Executives' Association, asking that I indicate to you and the members of your committee that the position taken by the American Federation of Labor on Reorganization Plan No. 2 was also the position of his organization. I had intended to ask that this letter be incorporated in the record of the hearings when I appeared. This letter is enclosed and I respectfully ask now that it be included in the record.

While I was attending the hearings on the morning of the 26th I heard the presentation of the statement of Mr. Robert E. Hatton, an employer representative of the Kentucky Unemployment Insurance Advisory Council. Mr. Hatton's statement included the presentation to your committee of a resolution which as I recall he stated was adopted unanimously by the members of the Kentucky Unemployment Insurance Advisory Council including the employee representatives. Inquiry has revealed that of the four employee members of this advisory council one has resigned, another was not present at the meeting where the resolution was adopted and the two remaining employee representaitves dissented. There is enclosed a copy of this original resolution indicating the dissenting votes of the two employee representatives who were present. It will be noted that the correctness of the copy of this resolution is certified to by Agnes S. Wheat, notary public. The notary is employed in the office of the Kentucky Department of Economic Security. I believe it is only fair that the impression left on the members of the committee by Mr. Hatton's statement