their experience will only be preserved to the service if the service is permanently and fully federalized.

We make this statement in full recognition of the fact that S. 1510, the Murray bill, attempts to set standards for Federal-State operation of the Employment Service which will continue the progress made under Federal operation, and also attempts to protect the present USES employees in the course of the transference.

Mr. Carey of the CIO has told you why we in the labor movement believe that S. 1510 will not succeed in its aims so far as standards and levels of service are concerned. The staff problem further emphasizes the difficulty.

A review of the status of all USES employees was made by the War Manpower Commission as of December 31, 1944. At that time there were 21,668 employees, 9,257 of whom had no State status at all. The group having the largest number with State status was the administrative group. Among the interviewers, who comprise about 50 percent of all personnel, nearly 35 percent had no State status. In the clerical group, the percentage rose to 63 percent, making the overall total of USES personnel without State status about 42 percent.

Since that time the total number in the Service has increased to approximately 23,000 nearly 50 percent of whom have no State status. This includes 48 percent of personnel in New York, 56 percent in Ohio, 58 percent in Kentucky, 39 percent in Indiana, 54 percent in Tennessee, 58 percent in Minnesota, 48 percent in Texas, 74 percent in northern California and 72 percent in southern California. These people without State status include many veterans, like Mr. Egnal, who is here with me today. Mr. Egnal entered the Service about 6 months ago. He is a veterans' counselor-an important job. Will he keep that job if a transfer occurs?

Senator TUNNELL. You say at that time there were 21,668 employees, 9,257 of whom had no status at all; do you mean they had no State status when they were working for the State?

Mr. FLAXER. No, sir. These employees were hired and never were State employees. They had no State status in any of the State classifications; they were war service indefinites.

Senator TUNNELL. What was your statement?

Mr. FLAXER. They were hired subsequent to the time when the State offices were taken over by the Federal Government.

Senator TUNNELL. What happens if the same person resigns and is hired over, one who had a State status at the time he resigned?

Mr. FLAXER. I do not believe I fully understand the question. Do you mean a State employee who was transferred to USES and retained his State status?

Senator TUNNELL. Yes.

Mr. FLAXER. And suppose he resigns?

Senator TUNNELL. Yes.

Mr. FLAXER. In some States, if he resigned to take a war production job or to go into the service, there were provisions made for that employee to return to his former status.

Senator TUNNELL. But since it has been taken over by the Federal organization, suppose he resigns; does he retain the State status if he comes back?

Mr. FLAXER. No, sir; he comes back as a new employee.

Senator TUNNELL. I supposed that.

Excuse me; go right ahead.

Mr. FLAXER. But the question of jobs per se is not the only question causing low morale in the Employment Service today. Four years have gone by. In that time many shifts and promotions have occurred. The staff has demonstrated, on the job, its ability to do more responsible work of a supervisory and professional nature. In general, vacancies above the entrance level of clerical and interviewing positions have been filled almost entirely by promotion. In the 3-year period ending in December 1944, about 8,600 promotions occurred among the employees who were transferred to the Federal pay roll under Executive Order 8990. Slightly more than 1,800 of these promotions were from clerk to interviewer or administrative status. This is sound personnel practice. There would doubtless have been even more such instances if transfer across State lines had been feasible. In all, 11,980 promotions occurred during the 3-year period among personnel who are not eligible under State regulations.

Shall the clerks who have been promoted return to their State jobs as clerks? Shall the new appointees who have proved their worth to the tune of nearly 12,000 promotions lose out entirely?

One of the purposes of S. 1510 is to provide for the security of these workers. It accepts the fact that the experience gained by USES workers during the war years and since is the property of the whole staff, whether they were people appointed from State lists, former State employees, or workers qualifying under Federal civil-service mechanism, and that from the point of view of staffing a national public-employment system, this experience is the only valid argument in favor of their continuing employment.

Under title III, S. 1510 requires that the States must make provision for the transfer to employment in the State systems without adverse adjustment in their classification or compensation status of all employed in the Service on the date of transfer, the retention of such employees in State service on the basis of qualifying examinations, and the extension of those employees of the USES who left for service in the armed forces of the same employment rights and privileges as those provided for Federal and former State employees. The bill also provides that if these provisions are not lived up to, the Secretary of Labor shall withdraw funds from the State in question and operate there an employment service under Federal supervision.

These are worthy objectives. They are not, however, very realistic. If the State of New York does not take care of its 48 percent, or Michigan its 56 percent, or northern California its 74 percent, will it, in fact, be possible for the Secretary of Labor to step in and take over? Will it be possible in the first instance for the Secretary of Labor to police each State legislature and each State civil-service commission to see that what is supposed to be done is done? And what about the States with no civil-service laws? It would be a difficult if not an impossible job.

In the State of Illinois, for example, there is no provision for qualifying examinations under the State law. The only right that USES employees have under the law in the State of Illinois is to return to the positions they held on December 31, 1941. Unless such a provision

is passed by the State legislature, it will be legally impossible for the State to follow the mandate of S. 1510.

In the event that Illinois does not pass such a law, is it not likely that the Secretary of Labor will take over the running of the employment service in Illinois? We think not. And we think further that even if he did, the procedure of the legislation subjects USES employees to loss, by back-and-forth transfer, of retirement and sick leave rights, and promotional opportunity.

If the problem of transfer is so great in Illinois, a State where the Employment Service has a long and tolerably good history and where the industrial character of the community enhances the probability of just and equitable treatment of personnel, what of smaller, less progressive States? In view of the fact that most State legislatures will not even meet in regular session until 1947, it is pretty much a foregone conclusion that the fate of 50 percent of USES personnel is far from a hopeful one.

The point we make again here is that no matter how much the Federal Government and the States might wish to operate a proper service on the basis of Federal-State cooperation, it cannot in practice be done. This does not in any way detract from our support of S. 1510 over H. R. 4437, if a choice between these two bills becomes necessary. S. 1510 must be the choice of all friends of the Public Employment Service. The Murray bill at least attempts to protect standards and the employees' welfare. However, in this connection it should be pointed out that S. 1510 omits, apparently by accident, a provision under which employees transferred from Federal to State service can obtain refunds from their Federal retirement accounts. Such a provision, for which suitable language has been suggested by the Labor Department, on page 66 of the Senate hearings on the bill in November, is only fair if such transfer is to be effected.

Finally, provided that transfer back to State control is the will of the majority in this Congress, we want to emphasize as strongly as possible the vital necessity of postponing that transfer until at least June 30, 1947. When the transfer occurs, all of the difficulties which we have already envisioned and tried to sketch for you this morning are going to arise; in all probability there will be still more. It would be defeating the purposes of any employment service program to allow these difficulties to come up just at the time when the USES is facing its most crucial period.

The peak period in the demobilization of the armed forces is expected to come in the latter part of 1946. Hundreds of thousands of returning veterans will flood the labor market in the ensuing months. Our reconversion will not be effected until well into 1947. Congress, by designating June 30, 1947 as the expiration date of the War Mobilization and Reconversion Act has itself admitted that we will not pass the hump of reconversion and reemployment until that date. It would be disastrous indeed to delay and obstruct reaching that goal by setting the Employment Service, one of the key factors in its achievement, into a turmoil by returning it to State control in the midst of the endeavor. Our union strongly urges your committee to report favorably on S. 1848. At the same time, we wish to be placed on record as unequivocally opposed to the provisions of H. R. 4437 which has been referred to your committee by the House of Representatives. As we have

previously indicated, S. 1510 more nearly approximates the only valid basis on which any transfer could be effected.

Mr. Chairman, we thought it might be of value to the committee to have the opportunity of discussing with some of the members of the personnel in some of the USES offices throughout the States, and I thought it would be helpful to the committee to hear what Mr. Egnal has to say from the veterans' point of view on that particular problem. Senator TUNNELL. Let us hear from Mr. Egnal. We cannot take very much time because we have another witness.

STATEMENT OF NATHAN N. EGNAL, VICE PRESIDENT, PHILADELPHIA LOCAL, STATE, COUNTY, AND MUNICIPAL WORKERS OF AMERICA, CIO (TAKING IN THE USES EMPLOYEES WHO ARE AFFILIATED WITH THE STATE, COUNTY, AND MUNICIPAL WORKERS OF AMERICA)

Mr. EGNAL. I am employed in Philadelphia in the Germantown office of the United States Employment Service as office counselor.

We favor permanent federalization of the United States Employment Service, and I hope to show that in order to render the best possible service to the veterans of this war that a Federal employment service is necessary.

At the outset it might be well to mention that Congress has provided, and very wisely, that there shall be set up within the United States Employment Service an effective veterans' job placement and counseling service to give all possible aid to the veterans in solving their employment problems.

By doing this Congress took recognition of the fact that the securing of job information and a job is the veteran's No. 1 problem.

In my opinion, a Federal employment service is better able to render maximum service to the veteran, for several reasons:

(1) Veterans who seek information about jobs in other parts of the country, and there are at least three types of veterans who would require this kind of information, and in seeking employment would of necessity cross State lines.

Under that is (a), veterans who must seek employment due to health. We already have veterans who are returning to our office who have contracted tuberculosis and malaria and other diseases, who must of necessity, in order to earn a livelihood, seek emplyoment in more favorable climates.

Then we have the veterans who married while in the service and planned to settle in the wife's home town in some other State.

Then we have the veteran who learned new skills while in the service, and the young veteran who went into the service without any previous work experience.

These veterans would want factual information as to where employment could be found where they could utilize these new skills. An instance in our own State would be those people who while in the service became quite proficient in the handling of aircraft, who worked around airfields in the various services. In Pennsylvania at the present time, unfortunately, there is no such available employment, and we continually refer them to LaGuardia Field in New York or

the Kansas City air terminus operated by the TWA and other lines. In order to adequately serve the aforementioned problems, a united Federal employment service is necessary, in my opinion.

Then there is my own personal case. I am employed in Philadelphia and have always wanted to move to California. My wife every winter comes down with a case of grippe. We wanted to get out of the bad weather in Philadelphia, and if the United States Employment Service remained Federal, the possibility of transfer to California might be possible. There certainly must be others within the United States Employment Service who would also like to take advantage of the same opportunities.

If we agree the veteran must receive the very best service, he must be taken care of by qualified personnel when he goes to the United States Employment Service for job information and for a job. In order to get the best personnel obtainable, the wages must be attrac tive. With wages tied to State levels, experience has shown the United States Employment Service cannot, at least in every case, hold men of experience.

In Pennsylvania, where wages are comparatively high, the United States Employment Service has lost many of their best men to the Veterans' Bureau, where wages are more attractive.

As an example, I came into the Service in March 1945. About 14 others and I were hired as assistant interviewers at $2,080 per year. At the present time, of the original 15 who came in with me, there are 4 men left.

Further, we had within the United States Employment Service veterans of World War I who had State status as State employees when the Employment Service was being operated by the State of Pennsylvania. These men who remained in their jobs within the United States Employment Service have resigned from the United States Employment Service and have gone to the Veterans' Administration for higher salaries. As a result, it has required the retraining of new personnel at considerable expense and the hiring of new men and women lacking the experience of the men who had resigned from the United States Employment Service.

One of the most important features of the GI bill provides for "on the job and apprentice training." In S. 1848 they have also provided for pretty much the same service.

Under the GI bill, a veteran may secure a job as trainee when he is brought in on the "on the job" program or as an apprentice under the apprenticeship program. This permits him to receive the trainee rates of wages plus a Government subsistence allowance through the Veterans' Administration.

We have found, unfortunately, many employers are not familiar with that particular provision of the GI bill. As a result, we are now contacting employers in our area to inform them of that provision. That requires qualified personnel, and the only way we can obtain the qualified personnel would be by offering them wages that would be attractive enough, which we do not think would be the case if wages were tied to State levels.

For these reasons, in my opinion, if we are to give the veterans the effective job placement and job service Congress said he should have,