tion law so that benefit payments could be allowed or denied pursuant to union rules was not in the public interest and was an unconstitutional discrimination in favor of union membership. Organized labor also prosecuted a similar case to the highest State court in Pennsylvania and was met with the same decision denying benefits. This Chambers case is illustrative of the energy and ultimate objectives with which organized labor pursues its programs.

Men or women imbued with the righteousness of such programs, who hold high office at the Federal level in the Department of Labor, can be expected to use every possible device available under their purse-string control over the State unemployment-compensation systems in order to gain objectives which are not in the public interest. Conflict over the broad objectives of a program is bound to breed inefficiency in administration when the issues involved are not settled in the public interest at the top or policy-making level.

The Presidential message stresses that employers are now using the facilities of the State employment services more than ever before. The inference is that this comes about because they are now operated by the Department of Labor. We are persuaded that the reasons are much more fundamental. A strong contributing factor to employer use of State employment offices is the fact that the employment services were returned to greater State control after the war, but only after strenuous objection by the Department of Labor. The strongest reason which can be cited in support of the present increased activity of State employment offices is the existing labor shortage and present high levels of employment rather than any particular virtue or efficiency on the part of the United States Employment Service.

The Presidential message would have you think that because the Department of Labor already has within its organization the Apprentice Training Service, the transfer of the employment and the unemployment compensation systems to that Department will promote efficiency. It is generally conceded that the Apprentice Training Service through its efforts to require joint labor-management approval. or agreement in matters pertaining to apprentice training has in fact driven many employers away from participation in such programs sponsored by the Department of Labor. Employers who have not bargained with unions on the subject matter of apprentice training consider that the activity of the Department of Labor in this respect is an unwarranted invasion of their right to manage and direct their own working forces How can it be said then that a Department which has already alienated employer cooperation in apprentice programs will operate efficiently other programs in which employers have a vital interest and in which employer cooperation is necessary?.


The President's statement says that the transfer of these services to the Department of Labor will promote economy. Recently under the present divided budgetary procedure by which the Department of Labor has been budgeting the Employment Service funds and the Federal Security Agency has been allocating unemployment compensation administrative funds, evidence of the failure on the part of the Department of Labor to promote economy in the administration of

the Employment Service has come from many parts of the country. A specific case in point is the statement of Mr. Dale Dunifon, appearing as administrator of the Ohio Bureau of Unemployment Compensation on May 24, 1947, before the House Taxation Committee of the Ohio House of Representatives:

Ohio has more than it needs to operate its employment service division, the bureau has been seriously hampered by insufficient grants for its unemployment compensation division.

It is reasonable to assume that the prounion heads of the Department of Labor will make available ample funds where prounion policies may be fostered, promoted, and developed, at the expense of protecting the employer's interest in the unemployment compensation and employment service programs.



Throughout the Presidential message, there is the contention that the Department of Labor is the proper place to locate the unemployment compensation systems and the employment services because the Department of Labor “is the agency primarily concerned with the labor market and problems of employment.” Nowhere does the message state that employers are primarily concerned with the labor market and problems of employment. Never before has the attention of the employer been so occupied with those problems as he is today. We have seen the growing expansion of industrial relations departments and personnel departments in all business organizations to the point where they now are considered as one of the most important functions of business management, not only with respect to the hiring of workers, but also with respect to the improvement of the normal development of the employer-employee relationship on the job. Such an omission of reference to employer interest in the problems of employment gives an antiemployer color to the Presidential message. There may be some aspects of the problems of employment in which the employer does not have such a primary interest that they may be assigned to the prounion heads of the Department of Labor but neither the unemployment compensation nor the employment service systems can be properly so identified.


The problem before you narrows itself to a balancing of the various interests of our economy in such a manner as to best promote the public interest and in this respect it becomes an extremely practical problem in which it is necessary to recognize conflicting interests, and in the solution, to supply the proper checks and balances. The necessity for having proper checks and balances between opposing interests in our Government has occupied the attention of our lawmakers since the formation of our Republic. In discussing the checks and balances provided in our form of government, we find this statement in No. 51 of the Federalist Papers: But what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great


difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. * * This policy of supplying, by opposite and rival interests, the defect of better motives, might be traced through the whole system of human affairs, private as well as public. We see it particularly displayed in all the subordinate distributions of power, where the constant aim is to divide and arrange the several offices in such a manner as that each may be a check on the other—that the private interest of every individual may be a sentinel over the public rights. These inventions of prudence cannot be less requisite in the distribution of the supreme powers of the state.

In many respects the issue which is before this committee closely parallels the question which arises when Executive nominations for key governmental jobs are submitted to the Congress for approval. In this instance, however, you are called upon to weigh and determine the qualifications, point of view, and prior activities of a department rather than an individual. It is our belief that the great weight of the evidence lies in the direction of nonapproval. Employers are not satisfied' with what they have many times termed the prounion objectives of the Social Security Board and its successor, the Federal Security Agency. When it is proposed that the functions now lodged with the Federal Security Agency be transferred to a department which is admitted to be more pro-organized labor or an outright advocate of organized labor, employers register a vigorous protest. We respectfully request that you recommend House Concurrent Resolution 131 for passage and that Presidential Reorganization Plan No. 1, 1948, be rejected as being against the public interest.

(The list of organizations represented by Mr. Manak are as follows:) MEMPERS OF NATIONAL ASSOCIATION OF STATE CHAMPERS OF COMMERCE DESIR

Ohio Chamber of Commerce, Columbus, Ohio.
Indiana Chamber of Commerce, Indianapolis, Ind.
South Texas Chamber of Commerce, Inc., San Antonio, Tex.
Pennsylvania Chamber of Commerce, Harrisburg, Pa.
Idaho State Chamber of Commerce, Boise, Idaho.
Chamber of Commerce, Delaware, Inc., Wilmington, Del.
Montana Chamber of Commerce, Helena, Mont.
Virginia State Chamber of Commerce, Richmond, Va.
Arkansas Economic Council-State Chamber of Commerce, Little Rock, Ark.
Greater South Dakota Association, Huron, S. Dak.
South Carolina State Chamber of Commerce, Columbia, S. C.
Ohio Manufacturers' Association, Columbus, Ohio.
West Virginia Chamber of Commerce, Charleston, W. Va.
Others have made separate statements.
Mr. MANAK. I appreciate this opportunity to appear here.

The CHAIRMAN. If you have something in addition to the prepared statement, we will be very glad to have it.

Mr. MANAK. One or two points I do not believe have been touched on. I believe this Congress has already decided last year that such a transfer as this would not accomplish a consolidation according to major purposes. The major purpose of the Department of Labor appears to be the promotion, fostering, development of the interests of labor.

The major purposes of the unemployment compensation systems-functions of the Federal Government and the Employment Service functions are to give an impartial administration of those functions, recognizing also the interests of employers.

This Congress divorced the Conciliation Administration Service from the Department of Labor, and I believe the same reasons are persuasive for the prevention of the transfer of these services to that Department.

The CHAIRMAN. You and other witnesses have made the statement that the Department of Labor is especially favorable to labor. I guess that may be assumed, because that is what it was created for. That is your idea, is it not, and it is their duty?

Mr. MANAK. Organized labor, yes, sir.
The CHAIRMAN. Well, all labor?

Mr. MANAK. All labor and particularly organized labor, and I am referring to the Secretary of Labor's statement last year before the Senate in which he was asked by, I believe, Senator Donnell, who his top assistants were, and he testified that of the three principal assistants, one is chosen from the AFL, one from the CIO and the third has charge of his foreign contracts, and in one case, I know, Mr. Philip Hannah, formerly of Cleveland, now of Columbus, who was appointed as Assistant Secretary of Labor from his position as director of AFL activity in Ohio, and upon his resignation returned to the job of directing the AFL activities in Ohio.

We feel that there is a definite pro-organized-labor color to the top administration and policy-level decisions of that Department.

We do not feel that this transfer will promote economy.
The CHAIRMAN. You are going back to your statement.
Mr. MANAK. No, sir; I have something more, sir.
The CHAIRMAN. All right.

Mr. MANAK. We feel that if the President seeks economy, he can accomplish it tomorrow by returning the Employment Service to the Federal Security Agency. A unification of those functions will certainly accomplish economy.

The CHAIRMAN. Mr. Wilson?
Mr. Wilson. No questions.
The CHAIRMAN. Mr. Harvey? Mr. Riehlman? Mr. Snyder?

Mr. LANHAM. You would like to see the Department of Labor destroyed, I take it?

Mr. MANAK. No, sir. There may be functions which the Department of Labor is qualified to perform.

Mr. LANHAM. What functions?

Mr. MANAK. I am directing my attention only to the fact that it is our considered judgment that they are not able to perform in the public interests the functions of unemployment compensation and the Employment Service.

Mr. LÀNHAM. What functions do you think the Department of Labor ought to perform if it does not try to find jobs for men?

Mr. MANAK. There are many functions that they perform now. Mr. LANHAM. Tell me some of them.

Mr. MANAK. Well, they have statistical duties. They can secure information which will be helpful in their program of encouraging organization, organized labor, and so on.

Mr. KARSTEN. You don't think they should have very much power-just in name only?

Mr. MANAK. Not where the employers' interest is directly affected, sir.

I am speaking also as a former member of the board of review of the Ohio Bureau of Unemployment Compensation, where it was my responsibility to make decisions in the public interest, and there is a very definite interest which the employers have in these programs. They should not have any advantage. They must be administered in the public interest.

Mr. LANHAM. Well, now, you have not answered my question. Don't you think that the Department of Labor is better adapted to securing jobs or channeling Tabor into jobs than any other instrumentality of the Government?

Mr. MANAK. No, sir; I think the States in their functions and I can speak principally from my observation in Ohio—are able to do the job much better.

Mr. LANAHM. The States may be doing it now. Some of them probably are, but don't you think if there is any function of the Department of Labor it is to try to help find jobs for people?

Mr. BENDER. In line with that thought, they have not been very successful in pursuing that, or at least they were not before the war broke out, because we had so much unemployment here and the Department of Labor surely wasn't doing anything about it.

Mr. KARSTEN. They were in 1938.

Mr. BENDER. There may be 14,000,000 jobs more than there were, but before the war broke out we had the testimony of the American Federation of Labor that 9,000,000 men were out of work. The Department of Labor wasn't doing very much about it. If the war had not broken out, where would you have been?

Mr. HARNESS. Will the gentleman yield?
The CHAIRMAN. Mr. Harness.

Mr. HARNESS. I think the gentleman must be confused who asked the question over there. It is not the function of the Labor Department to find jobs for the unemployed under the employment program. It would not be a function of the Labor Department if this Reorganization Act was carried out. That is a function of the State offices. Isn't that true?

Mr. Manak. Yes, sir.

Mr. HARNESS. The function of the Labor Department, if they get this agency transferred, would be to make the rules and regulations under which you in the State get the jobs for the people.

Mr. MANAK. Budgetary control and administrative powers overall on a policy-making level.

Mr. HARNESS. You didn't criticize any of the activities of the Labor Department; did you?

Mr. MANAK. No, sir. I am criticizing activities which will probably be adopted if this transfer is accomplished, and I am referring particularly to the programs of organized labor in these fields, and they are constant agitation for higher benefit levels and relaxation of disqualifications which are placed in the laws which encourage men and women to be actively seeking work.

Mr. HARNESS. What you mean, then, is you are fearful if the Labor Department gets control of this activity they will make rules and regulations that will conflict with the rules and regulations or the laws of the State so that you can't carry out the program according to the State law?

Mr. MANAK. It certainly will destroy the efficiency of both programs.

Mr. HOLIFIELD. Mr. Chairman, now the gentleman is fearful of something which seems to me is groundless in view of the fact that the

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