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for all economic risks in the hands of a single government institution. Says the report:

"The abolition of the employment injury compensation, which is based on legislation, and the introduction of a single scheme of social insurance, requires ample practical preparation, as well as effective propaganda setting forth the advantages offered by such a course. It is also necessary to carry out a detailed work of investigation and orientation. Nothing could better serve this purpose than a collective study, which enables the different countries concerned to show, by specific examples, the advantages of various methods and procedures in overcoming the difficulties that present themselves and in facilitating practical achievement.

“The work of the second session of the Inter-American Conference on Social Security may be decisive in this respect, since the Permanent Inter-American Committee on Social Security instituted a study in order that, with full knowledge of the subject, the conference might pass a recommendation concerning the much needed systematization of social insurance in accordance with facts and practices. The adoption of the principle of unification and the desire to achieve it on our continent should place the American countries in the vanguard of the social security movement and on the road towards the attainment of perfection in this sphere."

The foregoing paragraphs indicate quite clearly the authors' intent to use the influence of the Rio conference—for whatever it may be worth-to advance the cause of a single, complete social insurance system (including workmen's compensation) for all countries of the Western Hemisphere.

In Brazil, the private insurance companies are gravely concerned about the possible effect of the adoption by the conference of any recommendation for socialized workmen's compensation. While, as mentioned, there is already a law on the books calling for such socialization in the future, the private company officials are still hopeful of having the effective date postponed, or possibly, of having the law eventually repealed. The present administration of President Dutra is fundamentally conservative, giving hope that the law-passed by the predecessor Vargas regime-may never become effective. What the effect of the proposed recommendation by the inter-American conference would be on the Dutra government is problematical, but it could hardly be beneficial for private insurance.

POSITION OF UNITED STATES DELEGATION

Consideration of a recommendation for socialized workmen's compensation insurance places the United States delegation in a very unusual position. The delegation consists of Mr. Altmeyer; his adviser in the Social Security Administration, Mr. Wilbur Cohen; and Mrs. Clara Beyer of the United States Department of Labor-all of whom have given indications of strongly favoring government monopoly in th eworkmen's compensation field. Yet is would be most incongruous for the United Statse delegation, by vote, by debate, or by other action to use its immense influence in favor of a resolution contrary to predominant theory and practice in the United States.

Before leaving for Rio, Mr. Altmeyer was asked by the author if he would be willing to oppose the adoption of the proposed resolution. In reply, Mr. Altmeyer, while agreeing that the United States Government should not attempt to influence social legislation the other countries of the Western Hemisphere, nevertheless declined to give any assurance that he would use his influence in opposition to the adoption of the proposed recommendation by the Conference. Yet the proposal's avowed purpose is the advancement of the socialization process in all countries of the Western Hemisphere--indeed, the Mexican report says that the work of the Rio conference “may be decisive” in this respect.

The entire situation raises some interesting questions concerning the right of government officials to participate in such activities of a definitely propagandistic nature, having objectives alien to those generally sought in the United States. Congress is the policy-making branch of the Federal Government; it may become necessary for Congress to specify more clearly the policy to be followed in such cases by Government officials. Even a further question may be raised as to whether American officials should be permitted to participate at all in international conferences the objectives of which are clearly opposed to our social concepts and to our practices.

Mr. MANASCO. Of course, you knew that the Social Security Board also sent representatives to Japan to tell the Japanese the

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advantages of socialized medicine over the present system it had over there?

Mr. KIRKPATRICK. Yes.

The CHAIRMAN. Will the gentleman yield? Now, did they send them or did they forget that when one of our subcommittees called attention to it?

Mr. MANASCO. One of them got over there.
The CHAIRMAN. They didn't all go; did they?

Mr. MANASCO. That is what amazes me. The chamber of commerce and all these industry organizations coming out and being so strongly-for our strongest New Deal agency.

The CHAIRMAN. Do you have anything more to say on this?
Mr. KIRKPATRICK. No.

The CHAIRMAN. The committee desires to thank you for your contribution here.

Mr. KIRKPATRICK. Thank you very much for the opportunity.

STATEMENT OF F. M. PORTER, PRESIDENT, MID-CONTINENT OIL

AND GAS ASSOCIATION, TULSA, OKLA.

Mr. PORTER. Mr. Chairman, I have nothing further to offer except this statement:

*

STATEMENT OF F. M. PORTER, PRESIDENT, MID-CONTINENT OIL AND GAS

ASSOCIATION, Tulsa 3, OKLA. My name is F. M. Porter. I am president of the Mid-Continent Oil and Gas Association. This association, with its general headquarters at Tulsa, Oklahoma, is an oil-trade association with approximately 4,000 members. It represents all branches of the petroleum industry and the majority of the oil and gas producers in the States of Kansas, Nebraska, Oklahoma, Texas, New Mexico, Arkansas, Louisiana, Mississippi, and Alabama. Within the borders of these States, threefourths of the Nation's natural gas and over two-thirds of the Nation's crude petroleum is produced, and approximately one-half of the Nation's petroleum products are refined.

In the first place, I would like to point out to this committee the inconsistency of the Reorganization Plan No. 1 of January 19, 1948, and a certain portion of the President's message on the state of the Nation. The reorganization plan provides, among other things, for the transfer of the United States Employment Service and the Bureau of Employment Security to the Department of Labor; while in the President's message to Congress, it was stated: “The Government's program for health, education, and security

we should now establish an executive department for their administration.” Thus in one instance it is proposed to put the services in the Labor Department, and in the next instance, they should be placed together in a new executive department.

But our opposition to the reorganization plan goes to a more fundamental point than merely pointing out the administration's inconsistency in this vital matter. It is our basic belief that the social-security program of this Nation was established and must be administered in the interest of the general public. If any other belief were held, then there would be no reason for the program. Consistent with the general public's interest, this program has been administered by an officially neutral agency—the Federal Security Agency. Of course, employees and employers are interested in the program; yet here we have a proposal to transfer this program to the Labor Department, which was created admittedly to help the cause of labor. We, therefore, contend that a neutral agency should continue to administer this program.

The Federal Security Agency has not greatly hampered the growth of experiencerating laws through restrictive interpretations and rulings. These experiencerating laws have saved millions of dollars to the employers in the States covered by our association. It is quite certain that a continued attack would be made on these laws if the functions of the Federal Security Agency were transferred to the Department of Labor. Thus these savings to our employers will be greatly jeopardized if this reorganization plan is allowed to become operative.

We are faced in this country with a growth in the number and extensiveness of sickness-compensation laws; we have experienced a still greater growth in the past of old-age and survivors' insurance programs. These matters will and have become related in the eyes of many. Therefore, if the USES and UC are allowed to be transferred, this will tend to prejudge the issue of whether or not these programs should not likewise go to the Labor Department. It is our opinion that all of these programs should most assuredly be administered by a neutral agency, yet there would be a strong argument to put them in the Labor Department, if this reorganization plan becomes effective.

Therefore, it is respectfully urged by the members of our association that House Concurrent Resolution 131 receive favorable consideration in order that the Reorganization Plan No. 1 of January 19, 1948, should not become law.

The CHAIRMAN. Is there anyone else here who just wants to put a statement in the record?

The committee will adjourn until 9 o'clock tomorrow morning.

(Thereupon, at 5 p. m., an adjournment was taken until Friday, February 6, 1948, at 9 a. m.)

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REORGANIZATION PLAN NO. 1 OF 1948

FRIDAY, FEBRUARY 6, 1948

HOUSE OF REPRESENTATIVES,
COMMITTEE ON EXPENDITURES IN THE

EXECUTIVE DEPARTMENTS,

Washington, D. C. The committee met at 9:05 a. m., in the committee room of the Committee on Ways and Means, New House Office Building, Hon. Clare E. Hoffman (chairman) presiding.

Present: Representatives Hoffman, Judd, Harness, Rizley, Chenoweth, Busbey, Boggs, Riehlman, Harvey, Manasco, Holifield, Lanham, Hardy, Karsten, and Wilson.

The CHAIRMAN. Will you please identify yourself Mr. Williamson?

Mr. WILLIAMSON. I am C. J. S. Williamson of the California State Chamber of Commerce. I filed our report, Mr. Chairman, so I do not wish to take any more time so long as the report can be put into the record. I filed it yesterday morning.

The CHAIRMAN. And you say there is nothing that you wish to add to your statement?

Mr. WILLIAMSON. Nothing.

The CHAIRMAN. Have any other members of the committee any desire to question the witness?

I hear no such request.

Thank you.

(The statement submitted by Mr. Williamson is as follows:)

CALIFORNIA STATE CHAMBER OF COMMERCE,

San Francisco 4, Calif., January 28, 1948. Hon. CLARE E. HOFFMAN,

The House of Representatives, Washington, D. C. DEAR MR. HOFFMAN: We respectfully submit for the consideration of your committee that President Truman's reorganization plan No. 1 of January 19, 1948, which the concurrent resolution before you opposes, is on its face basically unsound and cannot possibly accomplish the purposes set forth by the President.

May I briefly examine with you the President's plan which transfers the United States Employment Service and the Bureau of Employment Security to the Department of Labor.

The President states, and I quote, “that the proposed reorganization is necessary to accomplish the following purposes:

(1) To group, coordinate, and consolidate agencies and functions of the Government according to major purposes."

We submit that it is perfectly obvious that one of the major purposes of the Department of Labor is not to administer any part of our Social Security System. The Department of Labor was created by the Congress to represent the interests of labor in this country. The Department has no responsibility to do anything but this. It is also perfectly obvious that businessmen in this country who actually pay unemployment insurance taxes have, at the very least, a parallel interest with labor in the proper administration and spending of unemployment insurance funds which at the present time involves roughly $8,000,000,000.

Clearly, therefore, transferring the United States Employment Service and the Bureau of Employment Security to the Department of Labor certainly does not,

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