Mr. GRAHAM. Are the benefits in any State as great as the Federal benefits?

Mr. LESLIE. Yes; they are greater in New York. I believe New York's maximum is $40. I would want to check that before I make that as an absolutely categorical statement.

Mr. GRAHAM. I will check it for you.

New York is $36.

Mr. LESLIE. I think maybe you are right. It had been $32, and it went to $36, and there is a bill now in the legislature to go to $40.

Mr. GRAHAM. In other words, just a dollar more than the Federal. Mr. LESLIE. Yes.

Mr. GRAHAM. And yet the rate is almost double. I would say it is five-ninths.

Mr. LESLIE. In New York, for just the Federal coverage on shipbuilding, the rate is $5.20. And then beyond that, the coverage under the New York State act costs $3.90; so that the total is $9.10.

Mr. MCDOWELL. The State benefits are higher than the Federal. Mr. LESLIE. Slightly higher; yes.

I think in fairness you would have to say roughly comparable. There is only a dollar difference. The two laws are quite similar laws. Mr. BAILEY. Do you have any additional testimony now? Mr. LESLIE. No, sir; I have none.

I would like to say once again what I said at the outset, that if there are questions in this area that the committee feels my organization could furnish the answers to, we would certainly be more than delighted to do so, either submitting to you in memorandum form or by personal appearance, whichever would be preferable to you gentle

men.

Mr. MCDOWELL. Do you have any factor at all that would reflect the difference between the State or Federal, principally State, I suppose, whatever they may call them, industrial accident boards or industrial accident commissions, as to the severity of those boards themselves in allowing and adjusting claims?

I mean in one State they might be particularly tough. In another State they might be more lenient. That could make a difference in the final outcome of the rates.

Mr. LESLIE. Yes, sir. There is no question at all but that it would have a very substantial effect on rates. And I am sure that those differences do, in fact, exist. But I don't know of any very good way of getting at a precise figure which says it is thus and so in this State and thus and so in that one.

Incidentally, we used to, for quite a long time, put out an exhibit that compared the benefits of various State compensation laws, using much the same techniques that we used, in order to today say what would be the change in one particular law. But we have not been doing that now for some little time, because there are so many factors that differ from State to State beyond just the pure words of the statutes. And we found that the information was either not good at all for the purposes to which it would normally be put, or was quite misleading. We did feel that that was almost entirely due to the differences in administrative philosophy in the various States, which we knew of no way to measure, nor do we know of any way to go about investigating it.

Mr. BAILEY. Mr. Leslie, we thank you very much for your visit down here from New York, taking your time to come down and give us this information. I just do not know how we are going to evaluate some of it because there seem to be some other angles on which we do not have information, and it is, going to be somewhat difficult. Nevertheless, we appreciate your efforts to clarify our thinking along this ratemaking line.

Mr. LESLIE. Thank you very much, Mr. Bailey. It has been a pleasure to be here, gentlemen. Thank you.

Mr. BAILEY. Has Mr. McCauley returned to the committee room? Mr. WARD. Mr. Chairman, Mr. McCauley had an appointment at 11 o'clock and he was going to try to return.

Mr. BAILEY. I will discuss this briefly with the committee and see what should go in the record, if somebody will so move.

Mr. McCauley, as you recall, is the Director of the Bureau of Employees' Compensation in the Department of Labor.

This communication is addressed to Kennedy W. Ward, assistant general counsel, House Committee on Education and Labor.

This is quite an extensive table here and it breaks down these injuries that we have been wondering about, as to what caused them, breaks them down as to different parts of the body; for instance, head, neck, and eyes, and so on.

If there is no objection, I am going to ask that this letter of transmittal and two tables be placed in the record. (The material referred to follows:)

MARCH 23, 1956.

I am attaching a statement showing the anatomical location and nature of injury in 10,274 nonfatal lost-time injuries to longshoremen. This analysis covers cases closed during the fiscal year 1954. One of the significant items is the high proportion of fracture cases which represent about 20 percent of the total. Hernias represent less than 11⁄2 percent.

I am also attaching a similar statement covering nearly 6,000 lost-time injuries to shipyard repairmen. These also show a high proportion of fractures (15+ percent) and about 21⁄2 percent hernia cases.

74524-56- 12

Compiled by Statistical Branch, Bureau of Employees' Compensation, U. S. Department of Labor, Washington, D. C., Mar. 23, 1956.

Mr. HUSSEY. Mr. Chairman, I have a statement here from the American Mutual Alliance, submitted by Wallace M. Smith, 425 13th Street NW, Washington, D. C. They would like to have that inserted. Mr. BAILEY. If there is no objection, we will accept that for insertion in the record. And if there is no objection, we will ask to have just the memorandum and not the details of their proposal made of record. (The statement referred to follows:)

STATEMENT OF THE AMERICAN MUTUAL ALLIANCE, SUBMITTED BY WALLACE M. SMITH, WASHINGTON, D. C.

This statement is being submitted on behalf of the American Mutual Alliance, of Chicago, Ill., an organization representing 116 mutual fire and casualty insurance companies. Many of these companies provide insurance for employers under the Longshoremen's and Harbor Workers' Compensation Act and have had extensive experience in the writing of workmen's compensation insurance generally. The views expressed herein are intended to reflect this experience.

SPECIAL FUND

Section 44 of the Longshoremen's and Harbor Workers' Compensation Act creates a special fund which makes compensation benefits available under certain specified conditions. This special fund is built up by payments of employers of $1,000 in fatal-injury cases where there are no dependent survivors entitled to death benefits. Fines and penalties collected for infractions of the act also go into this special fund. A fund of this type is known generally as a “second injury" fund.

The purpose of a “second injury” fund is to encourage the employment of disabled and handicapped persons. In cases of total disability, resulting from a second injury, compensation for disability attributable to a previous injury is payable from the fund and not by the employer. It is obvious that if the total cost of the combined injuries were to be imposed upon the last employer, handicapped persons may be refused employment. The policy behind the creation of the special fund is that of encouraging employment of the physically handicapped without working a hardship on the part of either the employer or the employee. The function of the fund is not to increase compensation benefits payable but to provide an equitable distribution of liability. A properly established fund should provide for adequate methods of accounting which permit forecast of future liabilities and which prevent the accumulation of large surpluses and reserves placing an unwarranted burden on the participating employers. Provisions under consideration by this committee would depart from this basic policy.

Proposed amendments to the Longshoremen's and Harbor Workers' Act under consideration would liberalize utilization of the special fund to provide the following:

(1) Increase the expense allowance for employees undergoing rehabilitation from $10 to $15 weekly.

(2) Pay the administrative costs of rehabilitation cases where adequate relief is not available under the Vocational Rehabilitation Act of 1954.

(3) Payment of claims against uninsured or insolvent employers. Utilization of the special fund as enumerated above would detract from its primary function and could possibly jeopardize its solvency.

Provisions (1) and (2) above relate to rehabilitation services. For many years a Vocational Rehabilitation Act has been in existence which provides rehabilitation service for employees under the Longshoremen's and Harbor Workers' Act. To enact the above legislation into law would be to create overlapping functions and authorities with resulting jurisdictional conflicts and confusion. Decentralized programs with scattered functions and authorities throughout the agencies and departments of the Government caused piecemeal legislation, are ineffective, and should be avoided.

No one will deny the importance, desirability, and humaneness of rehabilitation efforts. However, systematic planning and the manner in which a planned program is conducted will determine its effectiveness. A Federal rehabilitation program is in effect at present under the Vocational Rehabilitation Act. It is only natural and logical that if there are any deficiencies in that program they should be met by changes in that act rather than saddling the second-injury fund