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It is the Congress which determines the decisive policies about housing through the enactment of legislation and the appropriation of money. It is the Housing Agency which should carry out and administer those policies. The advantage both to Congress and to the Executive of having one agency which can be held responsible is very great. One agency is also more comprehensible to the citizen than an assortment of agencies. The League believes the administration of housing should not be returned to the confusion, overlapping, and antagonisms which result from competing agencies.


Washington 1, D. C., May 23, 1946. Hon. CARTER MANASCO, Chairman, Committee on Expenditures in the Executive Departments,

House of Representatives, Washington, D. C. MY DEAR CONGRESSMAN: The executive council of the American Federation of Labor considered Reorganization Plan No. 2, and expressed disappointment and great regret that the recommendations continue the dismemberment of the Department of Labor begun by the reorganization plan of 1939. We had sincerely hoped that instead of dismembering the Department of Labor, that it would be strengthened and expanded and made a basic Government service paralleling the service given to farmers and employers by their respective departments.

The Department of Labor should, in fact, be broad enough to promote the welfare of all citizens, directly and indirectly. Wage earners, with their de pendents, as you know, constitute at least 80 percent of the population. The Children's Bureau and the Office of Education primarily serve the wage earners of the country and other citizens only indirectly. It would be well if, instead of building up a welfare department, all of these labor and welfare services were integrated in the Department of Labor, with policies formulated to improve the economic and social environment of wage earners and their families.

The executive council adopted a statement proposing that present agencies be retained within the Department of Labor and to add social insurance and all other Government services which are the immediate concern of wage earners, making possible integrated administration to improve labor conditions and relations as well as the welfare of wage earners and small salaried persons. Copy of these recommendations are enclosed herein. Sincerely yours,

WM. GREEN, President, American Federation of Labor.




This plan makes the Federal Security Agency an executive department. It is understood the Agency will be headed by a Cabinet member. The basic purpose of the Agency is the conservation and development of the human resources of the Nation, with these principal functions: child care and development, education, health, social insurance, welfare (care for the needy and defective) and recreation. The Federal Security Agency created in 1939 includes:

United States Public Health Service
Oflice of Education
Social Security Board
Federal Advisory Board for Vocational Education
Office of Vocational Rehabilitation
Food and Drug Administration
Columbia Institute for the Deaf
American Printing House for the Blind
Freedmen's Hospital
St. Elizabeths Hospital
Howard University

The reorganization plan transfers to the Agency the Children's Bureau from the Department of Labor and the vital statistical functions of the Census Bureau. It abolishes the United States Employees Compensation Commission and transfers its functions to the Federal Security Administrator and creates a threeman appeal board. It abolishes the three-man Social Security Board and transfers its functions to the Federal Security Administrator to tie them into the welfare program; the functions of the Office of Education with respect to the vendingstand program are also transferred to the Federal Security Administrator; the office of Assistant Commissioner of Education is abolished and the Federal Board for Vocational Education; also the Board of Visitors of St. Elizabeths Hospital and its functions.

We protest this proposal as directly and indirectly undermining the Department of Labor. The American Federation of Labor worked many long years to secure legislation authorizing a Department of Labor, with its Secretary a member of the President's Cabinet, in order to have labor representation in this policymaking agency as well as to assure the formulation of national labor policy at the highest level so that it will be effective in the national as well as the international field, which is rapidly developing. Congress surely recognizes the imperative needs for strengthening our democratic institutions in this great world crisis. Labor policies lie at the heart of democratic practices.

We protest further dismemberment of the Department of Labor by the proposed transfer of the Children's Bureau. The American Federation of Labor helped in the establishment of this Bureau with understanding that the children's welfare is inseparable from family welfare which has an economic foundation. Economic forces condition and undergird social and political well being. Any other basis tends to sentiment and philanthrophy which, despite good intent, are not sound bases on which to organize a living.

The American Federation of Labor is unalterably opposed to the provision of the President's reorganization plan dismembering the Children's Bureau as the agency responsible for the health and welfare of the children and mothers of America. The reorganization plan transfers the health and welfare functions of the Children's Bureau to the Federal Security Administrator and permits him to parcel them out among various branches of the Federal Security Agency.

Labor insists that the integrity of the programs safeguarding the health, the welfare and the lives of American mothers and children be preserved within the Children's Bureau and that the Children's Bureau exclusively retain the powers it now has over such programs, including the power to set standards and their administration.

The President's message suggests that the functions of the Bureau relating to child-labor administration be transferred to the Wage and Hour Division of the Department of Labor. This would make the administration of vital child labor standards unworkable. We want these child services administered with understanding of the problems of self-supporting wage earners.

The American Federation of Labor has urged a social insurance system on a contributory basis which earns rights for the individuals covered. We have urged that the Federal Government administer this insurance as a service to wage earners. These social insurance provisions accrue from contributions based on pay rolls, provide income for the periods during which workers are involuntarily unemployed, and are in essence deferred wage payments. Such insurance in administration should be integrated with the work lives of workers, planned and administered with understanding of the workers' contributions to production and compensation therefor as well as of the broad fiscal policies of the Nation. The Department of Labor was established to foster, promote, and develop the welfare of the workers of the United States and the various agencies promoting these purposes should be lodgnd in this Department so that adequate and comprehensive plans can be effectively and economically administered.

Not only should the Children's Bureau be kept in that Department of Labor, but old age and survivors' insurance and unemployment compensation should be transferred to the Department and placed under the supervision of the Secretary of Labor.

The American Federation of Labor would have gladly advised the President along these lines had we been consulted.

Since the Department of Labor is our distinctive agency in the Federal Govern. ment we feel assured Congress wishes to consider our views which grow out of practical experience.

Workers coming under the coverage of the United States workmen's compensation law wish to have it administered by an independent agency. The convention of the American Federation of Labor realizing te independent nature of administration of workmen's compensation in the District of Columbia, has approved this position. We hope the agency can retain its present status.

May we take this occasion to urge constructive substantive legislation to strengthen the Department of labor, authorizing a Labor Extension Service, im

ng and expanding the conciliation service and the health and safety devices of the Department and adding social insurance for short and long-time disability. Larger appropriations are necessary to accomplish these purposes.





Washington, D.C. The committee met at 10 a. m., Hon. Carter Manasco (chairman) presiding.

The CHAIRMAN. The committee will come to order. Our first witness this morning is Mrs. Eugene Meyer.


Mrs. MEYER. With your permission, Mr. Chairman, I would like to give my argument without questioning.

I am very grateful to you, Mr. Chairman, for giving me permission to appear here today.

Gentlemen, there is, in my opinion, no single measure which the Congress has had presented to it that would be more constructive in a period of social upheaval than the President's Reorganization Plan No. 2 to reorganize and coordinate the Federal agencies concerned with health, education, and welfare. I do not make this statement lightly. I base this judgment of the President's proposal on 3 years' observations of our war and postwar social chaos in almost every State, in our cities large and small, as well as in rural areas. There are two parts to the President's message, the plan for reorganization of Federal education, health, and welfare agencies and the indication that legislation will be introduced in the Congress to establish a new department of welfare. Your committee is considering only the merits of the reorganization plan but, with your permission, I shall include both aspects of the President's proposals in my argument, as the one leads logically to the other.

The plan for the reorganization and coordination of health, education, and welfare agencies in the Federal Government is purely an administrative reform. But the abstract question of administrative reform has no compelling appeal unless the need for it grows out of reality and is understood as a necessary response to immediate and pressing problems. We must keep our minds firmly fixed upon the fact that the greater efficiency which the President seeks in the Federal Government is desirable not for its own sake, but for the sake, as he puts it, “of conserving our human resources. It is aimed at creating an orderly society where the individual can exercise both his rights and his duties as a citizen through the more effective integration of the efforts of Federal, State, and local governments. There


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