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(The names referred to above are as follows:) Dr. A. G. Blazey, Washington, Ind.; E. A. McCord, president, Illinois Mutual Casualty Co., Peoria, Ill.; and Mr. Burton P. Sears, vice president and general counsel, Washington National Insurance Co., Evanston, Ill.

Senator SMITH. Telegrams were received from the American Public Welfare Association groups located in Austin, Tex.; Chicago, Ill.; Raleigh, N. C.; and Harrisburg, Pa., in support of the plan.

Without objection, a letter from the American Parents Committee, Inc., signed by Mrs. Ada Barnett Stough, executive director, will be included in the record. (The letter above referred to is as follows:)

THE AMERICAN PARENTS COMMITTEE, INC.,

Washington, D. C., March 17, 1953. SENATOR MARGARET CHASE SMITH,

Chairman, Subcommittee on Reorganization, of Senate Committee on

Government Operations. DEAR SENATOR SMITH: The American Parents Committee would like to register its support of Reorganization Plan No. 1 of 1953, creating a Department of Health Education, and Welfare. We believe the plan will enable the new Department to improve services to citizens in these three important fields.

We would like to say further, that we hope the Children's Bureau will be given more status in the new Department than it has had under the Federal Security Agency. We believe the Chief of the Children's Bureau should be made directly responsible to the Secretary of the Department and the Bureau placed on a level with the United States Office of Education, the Public Health Service, and the Office of Vocational Rehabilitation, all of which are concerned with children. Any extra administrative layer which is placed between the Children's Bureau and the other agencies concerned with children adds unnecessary difficulties to the function of the Bureau as prescribed by law_"to investigate and report upon all matters pertaining to the welfare of children and child life among all classes of people.” The Bureau needs to be strengthened so that it may better perform this function together with its function in administering grants to States to strengthen State and local child-health and child-welfare services.

The Nation needs more knowledge as to the cause of child problems as a key to their prevention. It needs greater resources for research, more facilities for dissemination of findings, and for advising on ways the findings may be applied in communities. We realize that such details cannot be spelled out in any plan of reorganization but we sincerely hope they will be seriously considered by the head of the new Department when she gets the authority to coordinate activities within her scope. Cordially,

ADA BARNETT STOUGH,

Executive Director. Senator SMITH. Marjorie Shearon? Is Marjorie Shearon ready to be heard? It is 10 minutes before 12, and we are quite anxious to conclude the testimony of those who have already said they would like to be heard. Dr. Shearon, do you have copies of your statement ?

Dr. SHEARON. I am sorry, the time was too short; it was impossible to prepare copies, and furthermore I think in testimony off the cuff, you hold the interest of the listeners better than if you present something in writing. Anyway, if I could have, I would have; I have always done that in the past.

Senator Smith. The rules of the committee, may the chairman say, under the Reorganization Act, are that copies of statements should be available to the committee before the hearing. Therefore, Dr. Shearon, if you will, tell us something about whom you are representing, your name, your title, and the amount of time that you think will be required to give us your testimony.

STATEMENT OF MARJORIE SHEARON, EDITOR, CHALLENGE TO

SOCIALISM

Dr. SHEARON. The name is Marjorie Shearon. I am the editor of Challenge to Socialism. I think I should give a little of my background to show my competence in this field.

I have 3 degrees from Columbia, including my Ph. D., and I have 40 years of professional and business experience, including 20 years in this field of public administration.

I served nearly 9 years in the Federal Security Agency itself, and am considered an expert on their programs, their legislation, the administration, and the various agencies.

I then served 3 years with the Senate as a consultant to Senator Taft and the Republicans in the field of compulsory health insurance and social-security legislation.

I began in 1947 to publish my own independent paper for the purpose of getting out the facts which I had gleaned from living through the programs here in Washington. I felt there was no other way of getting them out to the public, so I publish a weekly paper. I have subscribers in all States, a cross section of the country, Republicans and Democrats.

I think that will give my qualifications to speak as an expert in this field, and to bring you something, perhaps, that you could not get from other witnesses.

I speak for myself alone, although I may say that I have my fingers on the pulse of people throughout the country, through the letters I receive, telegrams, and so forth, through the public speaking that I do and have done in all States and in Hawaii.

I, therefore, think that I express opinions of persons who, perhaps, cannot get in here, have not the time or money; the time is very short.

Before going on, I would like to lodge with the committee a protest on the shortness of time. These were 2 week-end moves, and I might say that when the bill, the reorganization plan, was introduced on March 12, I had predicted 5 or 6 days beforehand that that would be done to pressure the AMA. It was done, after I spoke on March 11 to a group, and they thought I was wrong, and within 24 hours the reorganization plan was in.

I was down in Texas

Senator SMITH. Pardon me, I wanted to get an idea about how much time you would need.

Dr. SHEARON. I think it will take half an hour, and that is very short. I could, as a matter of fact, speak on this all day and night. It is a very big and important field.

Senator SMITH. If you will proceed, we will do the best we can. The Senate goes into session at 12 o'clock, and it is now 6 minutes before 12.

Dr. SHFARON. I cannot do it in 6 minutes.
Senator SMITH. I would not expect that.
Dr. SHEARON. I will do my best.

Senator SMITH. I hope you will keep the time in mind in view of the shortness of time. Do you feel there is any basic difference, any difference in principle, between this 1953 plan and the 1949 plan?

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Dr. SHEARON. There is very little difference and, of course, Mr. Dodge said that in the testimony—you will find that on page 57 of the testimony-he said that they were essentially the same and that, of course, is one of the difficulties.

I opposed the plan then, as other witnesses have said, and it is not a question of which party is in power. It is a question of basic principles, and I opposed then and I opposed Oscar Ewing's own plan way back in 1949 in H. R. 782.

Senator KENNEDY. I think the chairman said the 1950 plan.
Dr. SHEARON. Yes, but there also was a bill by Oscar Ewing.

Senator KENNEDY. But Mr. Dodge on page 57 talks about the 1950 plan; he makes that comparison. Dr. SHEARON. Yes. I am just going back to the bill

, H. R. 782, and one I opposed for the same reason, which he wrote himself.

I have no personal feeling against Mr. Ewing and against Mrs. Hobby. I do not know either one of them, and I have not met them, but I have heard Mr. Ewing.

Senator SMITH. Dr. Shearon, are your objections to the 1953 plan the same as they were to the 1949 plan? Dr. SHEARON. No, they are much stronger now.

With respect to what it would do in the matter of strengthening the built-in plan for state socialism in the Social Security Act itself-and that is the thing--you are really elevating the Social Security Administration; the other two little divisions do not count very much. Eighty percent of the money goes to the Social Security Administration, and health and education have always been subordinated, and that is one of the things I wanted to speak about.

Senator SMITH. I asked that question because I noticed in 1950 you testified at quite some length.

Mrs. SHEARON. Yes, I did; that is right.

Senator SMITH. I had read that, and I wanted to know if you would follow along those lines.

Mrs. SHEARON. I have come to have a great deal more reason to be alarmed about this because of the revelations with respect to communism and socialism in this country, and the fact that the Social Security Act itself is a straight Socialist law. It was not even American in origin, but came through as an import from Geneva from the ILO. That is quite a little story. I have written it up, but it is basic to my objections to this proposal, because in the Social Security Act you have a straight Socialist law, which is the basis of the welfare state, and that program has now expanded with extreme rapidity.

Just before that act was passed on August 14, 1935, the Federal Government was spending about $100 million a year for health, welfare, and related programs, $100 million in grants-in-aid.

The Federal Government is now spending over $2 billion a year, $2.2 billion a year-more than they spent at the depths of the depression. This is a social-security program which, after all, is in its youth, and just getting underway. It is not, as they call it, a mature program; it is just getting a start.

The Federal Security Agency was, of course, created as a purely political move in 1939 in order to boost the status of Paul V. McNutt, who was thinking about the presidency. They threw together these three separate functions in Government, and there was no common denominator-even Senator Taft himself, who has had his own bill in, says there was no common denominator, except they all give away money to the States. That is not a very good reason for associating three separate functions of Government, particularly since the Social Security Administration has so much more money, so much more power, and has a predatory attitude toward the subordinate agencies, particularly the Public Health Service.

I served for 5 years in the Social Security Administration, and then went to the staff of Surgeon General Parran, and was there nearly 4 years, and I recall very well before I left-I resigned at the beginning of 1945—I recall the pressure that was put upon Parran, who did not believe in compulsory health insurance.

Senator Hory. May I ask you a question?
Mrs. SHEARON. Yes.

Senator Howy. Does not this bill, though, preserve somewhat the autonomy of the Health Department more than it is now under Social Security ?

Mrs. SHEARON. No; I should not say any more than it is now, and they are

Senator Howy. Does it not give a direct appeal to the President or to the Cabinet member?

Dr. SHEARON. Well, you know, I could not help thinking that the AMA sold out, or the profession sold itself out, for very little return. They said they wanted an under secretary of health, and they did not get even that. All they got in the organization box was just a little assistant for health and medical services, just dangling in the air.

Senator Hory. Does it not give a direct route from the Health Department right into the Cabinet member without having to confer with any of these other departments?

Dr. SHEARON. That individual has to work through the Secretary, who is a lay political appointee, not a medical person.

Senator Hory. The point I was talking about is, Would they not have more independence under this bill than they now have here under social security ?

Dr. SHEARON. I do not see how. Now, after all, the Surgeon General can go directly to the Federal Security Administrator. What happens when he gets there is he is knocked down because the social security is the dominating program in that Agency, and, as a matter of fact, in 1939 what did they do, but elevate the key people from social security into the holding corporation of the FSA, and that gave more strength to the social-security people.

Senator HOEY. I am talking about that now.
Dr. SHEARON. That is right.

Senator Hory. Here is a Cabinet member, and he represents these
agencies, each one having direct appeal to him.
Dr. SHEARON. To the Secretary.
Senator Hory. That is right.

Dr. SHEARON. Yes. The Secretary; what good does that do? The Secretary is no different from the Federal Security Administrator; and, as a matter of fact, I understand they expect to elevate the Federal Security Administrator into the Cabinet post. It is simply that what you are doing is not a reorganization plan, as has been said; it is just a lifting-up process, an increasing of the expenditures, and a

giving of greater prestige and authority to the Federal Security Administrator and to the lower echelons, who are just stepped up a little bit and get a few more secretaries, and so forth, and expand their power; but I cannot see where you are improving the status or the protection of the health profession at all; and let me give you one illustration.

In 1944 I was working on the 10-year postwar program for health for Dr. Parran. He was called in by Paul V. McNutt and told to get on the bandwagon for compulsory health insurance, in which the Surgeon General did not believe. Mr. McNutt, I understand, was a very fine gentleman, and I did lots of work for him. He said he was not going to have diverse views in his agencies, and the weak, little Public Health Service, that did not dare open its mouth, had better get along on the bandwagon because the social-security people said, "We are going to have compulsory health insurance." Parran did not believe in it.

I said, “Dr. Parran, what does it mean that the social-security lay group, which does not know anything about medicine, is dictating the health program of this country?". And he threw up his hands and said, “If the Federal Security Administrator says he wants health insurance, that is what it is going to be."

That is when I left. I was not going to have any part of this thing, because I had seen what the score was, and Parran himself was eased out of the Public Health Service. He was an old-line health official, and it was a shame. He was eased out, and a more pliable man was put into his place.

Senator DWORSHAK. Doctor, I do not see that any of this has any relevance to this.

Dr. SHEARON. I was asked about this.

Senator DWORSHAK. We are confronted with a realistic situation. You indicate this would involve an expansion, would raise the echelons, and would involve greater costs and higher costs.

Dr. SHEARON. Yes.

Senator DWORSHAK. Do you not still realize that Congress, through its appropriations committees, has authority and control over this agency, as any other agency, and that there cannot be that expansion without the tacit approval of the Congress?

Dr. SHEARON. Well, it has been more than tacit. Congress has put up the money for the expansion. That has been the disturbing factor, as a matter of fact. As you know, the Appropriations Committee each year gives them everything their little hearts desire. We were told in 1939, when this reorganization took place, it was going to save money and reduce duplication and that there would be less personnel

From that time on to the present FSA has expanded by leaps and bounds as to personnel and as to expenditures, and the end is not in sight. There has been no type of reorganization, even partial reorganization; when they took away one little function and moved it to someone else, there was no lessening of expenditure of money.

The budget of the Federal Security Agency has gone up to $2.2 billion in 1953.

Senator DWORSHAK. That is, the new administration approved this increase?

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