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go into, or be lumped with other activities in relation.to the Government.

Mr. HARDY. I appreciate your development of that point.

Mr. Wilson. I want to say, while I do not agree with you entirely, I think you have presented your side of the case in an intelligent manner.

Mr. SNYDER. I think he has presented it very forceably and intelligently. I do not know whether you said you had been in the Department of Labor or the Federal Security Agency, but I think that I am thoroughly in accord with eliminating duplications and overlapping functions. I believe in getting things where they properly belong.

I do appreciate your very fair statement, and I say that it is a very forceful statement you have made. You have made quite an impression on this committee.

Mr. HARDY. I would also like to add to that that you have expressed a very good argument, and have displayed a fine attitude all through your presentation.

The CHAIRMAN. Thank you very much, Mr. Cruikshank.

We will adjourn at this time to reconvene tomorrow morning at 10 o'clock. There will be five witnesses here from the Department of Labor to tell about their activities in connection with this program.

(Whereupon, at 5:25 p. m., the committee adjourned.)

REORGANIZATION PLAN NO. 1 OF 1948

SATURDAY, FEBRUARY 7, 1948
HOUSE OF REPRESENTATIVES,

COMMITTEE ON EXPENDITURES
IN THE EXECUTIVE DEPARTMENTS,

Washington, D. C. The committee met, pursuant.to adjournment, at 10:15 a. m., in the committee room of the Committee on Ways and Means, New House Office Building, Hon. Clare E. Hoffman (chairman) presiding.

The CHAIRMAN. The committee will come to order, gentlemen. Mr. Davis.

STATEMENT OF JOHN D, DAVIS, COMMISSIONER, EMPLOYMENT

SECURITY DEPARTMENT, OLYMPIA, WASH. Mr. Davis. I am appearing to support the President's reorganization plan. In my opinion, it proposes a sound and efficient method of administering the two closely related programs of unemployment insurance and a Nation-wid system of free public employment offices.

The reorganization plan under consideration will bring the Federal part of the structure for administering this joint program into an organizational pattern similar to that adopted by almost every State. În practically all States the Unemployment Insurance and Employment Service administrations are both responsible to a commission, or a commissioner who is directly under the Governor or in one of the major executive departments of the State government. This reorganization plan provides that the administration in the Federal Government of both Unemployment Insurance and the Employiuent Service will be directly under a Commissioner of Employment, with responsibilities in the Federal Government closely comparable to similar administrators in the State governments. It seems obvious that a similarity in organizational structure between Federal and State governments will promote more efficient administration, and I point out again that almost all States have adopted an organization quite like that proposed by this plan.

Contrast this to the Federal organization existing before the warand to which the Federal Government will soon revert if this plan is rejected-with both the Employment Service and Unemployment Insurance the responsibility of a bureau chief who was responsible to an assistant executive director who was responsible to an executive director who was responsible to a commissioner who was responsible to an administrator. A State agency never had a final decision until a matter was carried through successive layers to the administratorand even he was a Federal official without Cabinet rank. Surely this important program affecting every working man and woman in the country is of sufficient importance to not again be submerged under four or five layers of Federal officials.

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Some of those opposed to this plan have said or implied that the Labor Department should not administer the Federal part of this program because it is the protagonist of organized labor. I can see no merit or reality in this claim, and in my experience there is not a shred of evidence to indicate that the Department of Labor has been or will be any more subject to having its judgments influenced by labor pressures in administering this program than has been the Federal Security Administration. In this connection it should be noted that in twenty-some States-including the States of many who have raised this false cry—the State agency controlling both unemployment insurance and the employment service has other responsibilities closely analogous to those of the Federal Department. of Labor.

Another reason offered to reject.this reorganization plan is that determination of "suitable work under unemployment compensation claims would be differently and less properly administered if the Federal organization of this program were in the Department of Labor. In my opinion such reasoning is ridiculous. "Suitable work” is defined by State laws, subject to administration by State officials, to review by State boards of review, and to appeal to State courts. This reorganization plan has absolutely no effect on the authority of State governments in this regard. Assurance of complete State responsibility for determining "suitable work” is provided by Federal statutes and the reorganization plan under consideration does not and cannot change the basic Federal laws.

The Federal-State system of administering both the Unemployment Compensation and Employment Service programs was restored on November 15, 1946, with the resumption of State control over the operation of the employment services. Since that time, the Federal Department of Labor has had complete authority over the Federal responsibilities of the Employment Service part of the joint program. The officials of the Department of Labor have given definite evidence that they are excellently qualified to administer the Federal part of this program and have done a fine job in promoting harmonious Federal-State relations.

Mr. Davis. Mr. Christgau, president of the Interstate Conference, will present for the record polls of the States on this issue of this specific reorganization plan, a poll which was taken a few days ago.

He will give you the specific figures, but I point out to you that there are some 20 States which do not oppose the President's Reorganization plan. There are fewer than half of them which oppose it.

I favor integration at the Federal level immediately, because in the current situation, where we have divided responsibility in two Federal agencies, in a single program, we have a substantial lack of correlation.

The CHAIRMAN. If you want it integrated, why do you want the Labor Department to have it?

Mr. Davis. To begin with, Mr. Chairman, it offers us immediate relief from what I consider an intolerable condition. We have a separate administration. That is number one. That is of a single program at the Federal level.

The CHAIRMAN. You have heard these other witnesses testify that in some of these States the State agencies handle them together, have

you not?

Mr. Davis. We handle them together in our State.
The CHAIRMAN. What is that?
Mr. Davis. We have a single operation in our own State, sir.

The CHAIRMAN. I thought just a moment ago you said they were handled under separate agencies. Did you not just make that statement?

Mr. Davis. At the Federal level; yes, sir. The USES is the Department of Labor, and the Bureau of Employment Security is in the Federal Security Administration.

My first point is that that should be put together immediately.

The CHAIRMAN. Do you not then know that we transferred these to the States?

Mr. Davis. Yes. We perform the operations, sir. I know that very well. However, we must of necessity deal with the Federal agencies on budgets and other matters. Dealing with two is not at all satisfactory.

The CHAIRMAN. You mean you and the State have to go to both the Labor Department and the Federal Security Agency?

Mr. Davis. We do, now; and we do not like it.

The CHAIRMAN. You have been going to the Federal Security Agency for some time, have you not? Mr. Davis. Yes, sir; for a matter of some 10 or 11 years.

You asked me my reasons for preferring the integration in the Labor Department under the President's Reorganization Plan.

It seems to me, as an administrator, charged with operations that the Labor Department has shown

The CHAIRMAN. You, out there on the west coast, in Washington. Is that where Beck holds forth?

Mr. Davis. Yes, sir.
The CHAIRMAN. Down below you is Harry Bridges?
Ms. Davis. Down in California; yes, sir.
The CHAIRMAN. They are south of you?

Mr. Davis. The Labor Department, it seems to me, has demonstrated a very practical, businesslike, down-to-earth realism in its administration.

The CHAIRMAN. Just moment. Let me interrupt you right there. I noticed in the paper last night that some legislative committee out there had Bridges' former wife before them. She testified that he was a Communist. Did you see that item?

Mr. Davis. Yes, sir. I think I read that in the Post this morning. The CHAIRMAN. All right.

Mr. Davis. I submit to you that a very practical, businesslike administration is sorely needed in the administration of our unemployment compensation program at the Federal level as well.

I have heard much the last 2 or 3 days about some theoretical reasons why the Bureau of Employment Security should not be in the Labor Department. It seems to me that the entire test boils down to the question of whether or not the Labor Department is a neutral agency or is just a protagonist of labor.

The CHAIRMAN. Just a moment. Right there, you say "theoretical reasons.

Mr. Davis. Yes, sir.

The CHAIRMAN. Do you not know that the present administration has the support of organized labor, both Murray and Green?

Mr. Davis. Well, I do not know that, sir.

The CHAIRMAN. You do not? Do you not know that in the last few years organized labor politically has supported the administration, and the Labor Department particularly?

Mr. Davis. That is generally true, sir, I think, from observation.
The CHAIRMAN. Surely. Go ahead.
Mr. Davis. I say theoretically, Mr. Chairman-

The CHAIRMAN. There has been no theory about that political support, has there?

Mr. DAVIS. I do not know, sir.

The CHAIRMAN. If you had been a Member of Congress and had heard the opposition in the various districts you would know it is not a matter of theory. It is a matter of corrupt politics.

Mr. Davis. As a matter of practical administration I do know this: No public administrator can be unneutral or biased and perform his proper function.

The CHAIRMAN. Some of us could give you some practical illustrations on this matter.

Mr. Davis. I should like to speak to the point of the responsibility of the public administrator. Any of us who work in public life are working in a directed area, whether it be in unemployment compensation, in labor relations, or in employer associations of one kind or another.

It seems obvious to me that no public administrator who is going to do his job properly is going to operate in that directed area to the detriment of the public generally. To me the argument is pretty ridiculus. I have been in public administration for a good many years. In my own experience I have an unemployment compensation law which, by direction in its preamble, indicates that it is established for the benefit of the unemployed workmen. In my 11 years in this program I have never forgotten that the employer and the general public has just as much interest and a very substantial interest--as much as the unemployed worker—in this program of unemployment compensation.

Mr. MANASCO. Mr. Davis, it is my understanding that you have one of the best laws of any State in the Union. Probably it is one of the best administered laws, on unemployment compensation.

There has been some fear that the Labor Department here in Washington will dominate this if it is turned over to the Labor Department, and that you will have everybody drawing unemployment compensation.

Would it be possible, under the law in the State of Washington, for the Labor Department or the Federal Security Agency, either to dominate this program out there?

Mr. Davis. No, sir. Neither Department has ever told me, nor can either Department ever tell me, as a matter of law, to whom we shall pay benefits. That is under the State law.

Mr. LANHAM. On how much it is?

Mr. Davis. That is correct, sir. Our own State legislature determines that.

Mr. Manasco. And if it ever becomes possible for the Secretary of Labor of the United States to dominate your department, it would

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