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The presence of the mother in the home is essential for the proper care and guidance of young children. Yet disability insurance bears no relation to the number of dependents, and mothers in such families frequently must go to work. The bill provides for increasing the funds for grants to the States for child welfare from the present $3,500,000 to $7,000,000 a year, and increasing the present $20,000 allotment for each State to $40,000 a year.

With the increase in child population in the United States we can expect a proportionate increase in the problems of child welfare. I hope the committee will further increase to $12,000,000 the authorization for child-welfare grants, to permit the States to expand their programs and employ additional trained staff experts.

There is no duplication of services in the programs provided under the Social Security Act and the other health and medical legislation which I have joined in sponsoring. All of the programs are essential to the health and welfare of our people.

The local public health units bill passed by the Senate will help local and county health offices to strengthen and expand their health services and preventive medicine.

The school health services bill provides for research into child life and the child's social and emotional development.

S. 2591 provides for research into the causes of certain crippling diseases such as multiple sclerosis, cerebral palsy, epilepsy, eye diseases, and others.

Our amendments last year to the Hospital and Health Center Construction Act are enabling the States to build more hospitals and health centers and provide more adequate facilities for the care of mothers and children.

As coauthor of these measures I can say that none of them will fulfill the need for specialized services in the field of maternal and child health and the care of crippled children.

The growth of child population and the increase in births, and the progressive curtailment of the State programs makes it urgent that we fill the gaps in H. R. 6000, broaden and strengthen the services our social-security program provides, and meet the developing need for the care of America's mothers and children.

STATEMENT OF HON. ARTHUR V. WATKINS, UNITED STATES SENATOR FROM UTAH

I have received considerable correspondence from my constituents in Utah as well as from people in other sections of the country on various sections of H. R. 6000. Many of my Utah constituents have found it impracticable to appear before the committee to present their views on many provisions of the proposed law; and, therefore, I am taking this opportunity to present to the committee for their consideration some of the ideas which have been expressed in my correspondence as well as some of my own ideas relating to this proposal. Let me cite specifically some objections in connection with H. R. 6000:

MINING INDUSTRY

Section 210 (k) (3) (F) and 206 (d) (3) (F) and 210 (k) (4) and 206 (4) (2), if passed by the Congress, will result in the cessation of a large amount of mining in my State as well as in other States.

The changes in these sections would place mine lessors and mine lessees in an employer-employee classification which would be a direct reversal of present laws which recognize the independent status of the parties involved. Now why am I so sure that the adoption of this legislation will result in the cessation of a large segment of the western mining industry?

The mining industry in the State of Utah has gone through just such a period. From 1900 to 1940 mine leasing in the State of Utah flourished. Then the various social agencies in the State of Utah determined that the mine lessees would be better off as employees of the various mining companies rather than as independent businessmen; and, therefore, in 1940 by administrative action all mine lessees in the State of Utah were determined to be employees for the sake of various social-legislation purposes. The result is history. From 1940 until 1944 mine leasing in the State of Utah not only was terminated but almost the entire activity carried on formerly by these groups ceased. Some mining companies endeavored to continue their operation under the employer-employee relationship but found that it was totally uneconomical. Other witnesses before

this committee testifying on this problem have documented these facts, and I subscribe fully to the testimony of Mr. James K. Richardson, Mr. Robert M. Searls and Mr. Ralph Hopes.

The mine lessees themselves oppose their classification as employees. It is my understanding that neither the mine operators nor lessees are opposed to the inclusion of the lessees activity under social security if it is made possible for them to be included voluntarily on the basis of the self-employed category. This is not a situation where people are opposed to a practice, such as was the case of home workers under the wage and hour law, but is merely a question of how to insure the future of a segment of our people. The method contained in the cited sections of H. R. 6000 will not give security to this mine-lessee segment. Quite to the contrary, it will cause instability and unemployment. The farreaching effect of the approval of the above-cited sections in my State of Utah would be that a number of men now making a very comfortable living would be throw on relief with an immediate loss in excess of $1,000,000 in new capital in the State plus the loss this would occasion to the farmers, grocers, and other merchants right on down the line.

At this point I wish to quote for the record a letter from the self-styled mayor of Alta, Utah, formerly one of the richest mining areas in the State, and the petition mentioned in Mayor Watson's letter:

CITY OF ROMANTIC ALTA, UTAH

EXECUTIVE DEPARTMENT

Mr. JAMES RICHARDSON,

Manager of Utah Mining Association,

Salt Lake City, Utah

DEAR MR. RICHARDSON: I address you at this time to admonish you of the great worry the leasers of this old famous mining camp have.

A few of them came to me today with the enclosed papers and asked me if there wasn't something I could do to help out in not having them put out of business, which they know will happen if our Federal Government passes a law making them employees of the owner or mining company owning the mineral land or mine in which they are leasing.

Therefore I would be much pleased if you would plead their case for them to the powers that be.

I, myself, know hundreds of these old leasers and most of them are expert miners, but many of them cannot qualify to work on company account because of age in many cases and in other cases they have slight disabilities, so they will not only be out of business, but they will have to go on relief. Trusting you can do something for these men, I am

Sincerely yours,

To Whom It May Concern:

GEORGE H. WATSON, Mayor of Romantic Alta.

We, the undersigned leasers, prefer leasing because we save thousands of tons of ore, and prospect for new veins and bodies of ore, also old cave-ins that the companies would leave that would never be recovered if it wasn't for a leaser. Also, we feel free working for ourselves as a leaser which is no more than right in a free country as ours.

Steve Basta, Francis Coupens, Louie Chesnick, Ray Lofthouse, K
Lewis Fields, Bob Basta, Ash Jacobson, Ivan R. Hansen.

This committee and the Congress cannot escape the issue that the mining dustry at the present time is a sick industry. An attempt was made by various Members in Congress in which I joined, to assist this industry by the passage of S. 2105, which was defeated just recently in the House. All those who testified in support of this measure stressed the fact that our mining industry was in a very precarious economic condition. Many of the mines are shut down; two of the largest mining areas in the State of Utah-Park City and the West Tintic area are almost 100 percent closed. Foreign imports of cheap concentrates in connection with the so-called reciprocal trade program tave contributed to this drastic situation. However, the mining industry is doug its utmost to maintain its properties in workable condition. The products of this industry are vital to our national defense. The mine lessee activity is

insuring, at least, that these mines are kept in stand-by condition. The passage of H. R. 6000 with the above-cited sections included would contribute much toward the complete collapse of our mining industry.

I think it is important, also, to keep in mind that the Advisory Council to the Senate Finance Committee did not recommend enactment of these sections. I, therefore, urge upon the Senate Finance Committee that the amendments sponsored by the American Mining Congress be included in the bill which will be reported to the Senate floor.

PROPRIETOR AND INDEPENDENT CONTRACTOR

Another proposed change included in H. R. 6000 is included in section 210 (K) (2), to specifically change the effect of the United States Supreme Court's holding in Bartels v. Birmingham (332 U. S. 126). The particular language referred to reads as follows:

"For purposes of this paragraph, if an individual (either alone or as a member of a group) performs service for any other person under a written contract expressly reciting that such person shall have complete control over the performance of such service and that such individual is an employee, such individual with respect to such service shall, regardless of any modification not in writing, be deemed an employee of such person (or, if such person is an agent or employee with respect to the execution of such contract, the employee of the principal or employer of such person)."

In analyzing this problem I should like to quote a portion of a statement submitted to me by the Ballroom Operators' Association of Utah:

"I believe that a little history of what has happened in this relationship between the traveling band leader and the ballroom operator will help to clarify the matter in your mind.

"Prior to 1941, the ballroom operator signed a contract with the orchestra leader through a booker or agent representing the orchestra leader for his services and the members of his orchestra at the particular ballroom. This contract was called the Form A contract and under its terms, the musicians union contended that the operator was the employer of the orchestra leader and the members of his orchestra. This matter was contested by the ballroom operators and the matter was tried in a Federal court in Chicago. The issue involved was whether or not the Griff Williams orchestra were employees of a Chicago hotel. It is known as the Griff Williams case and inasmuch as I am anxious for you to get this information, I have not taken the time to look it up but could provide it if you deem it necessary. The circuit court of appeals for that area decided that the hotel was not the employer of the Griff Williams orchestra but that Griff Williams was an independent contractor and hence, the employer of the members in his orchestra. The matter was appealed to the Supreme Court who refused to review the case. As a result of this case, the musicians' union then prepared the Form B contract which supplanted the Form A contract. The only difference in the Form A and the Form B was that the ballroom operator agreed that he was the employer and he was referred to as the employer and he signed the contract over the word 'employer.' This contract went into effect in June or July 1941 and we have had to sign it whether we liked it or not in order to get bands-it was what you might call 'economic pressure.' [Italics supplied.] We would have to sign the contract whether or not it cited in the contract that we were the mayors of our respective cities but that fact would, of course, not have made us the mayors any more than it made us the employers.

"Immediately after the Griff Williams case, a few ballroom operators, under the name of Midwestern Ballroom Operators Association started the Bartels v. Birmingham case in Des Moines, Iowa. The United States Supreme Court in June 1947 handed down its decision affirming the point that name bands 'were not the employees of the dance hall or amusement hall operators.' Unbeknown to us and more or less surreptitiously, Mr. Petrillo included in H. R. 6000 the paragraph to which you refer in your letter of February 7 to Mr. Freed which would in effect make null and void the Supreme Court ruling in our favor referred to above and would compel us to pay the tax as employers of these orchestras simply because the contract recited that we had complete control when, as a matter of fact, we do not, and have never had control over these crchestras. Exhibit A contained herein will clarify this matter.

"This H. R. 6000 passed the House before we were even aware of the fact that this particular paragraph was in the bill, hence, we made no attempt to

stop it in the House because we knew nothing of it but we are attempting to see that the matter is properly clarified in the Senate.

"There are two types of orchestras which we employ as ballroom operators. Type 1 is what is known as a local band. This is an orchestra made up of musicians who live in the city or in the area close to the ballroom where they work; generally, they have day jobs and work in the ballroom from time to time when traveling bands are not available or deemed advisable not to use. These orchestras generally play for scale and on this particular type of orchestra, I have always paid title VIII and title IX of the Social Security Act and Unemployment Compensation to the State of Utah. By 'always,' I mean before the Bartels case and after although it is clear that I would not be compelled to under the terms of the Bartels case because the local orchestra leader is also the employer of his musicians. However, because the boys are not getting over scale, from a practical standpoint, it meant that the union would have to raise the scale of the orchestra enough to pay this tax, therefore, arrangements were made with the local union that I would pay the tax on these local bands and the scale was not raised as a result. This is handled similarly by other ballroom operators and where it is not, we, the National Ballroom Operators Association, could very easily see that it was handled this way. These local orchestras do not play any other place, except in their own vicinity and they are not musicians but are organized just as a side-line as their day jobs are their main livelihood and ambitions.

"Type 2 is what is known as the name, or traveling orchestras. This group represents themselves as going concerns and available to anyone who would like to hire them. They travel from one part of the country to the other on annual or semiannual tours. They are represented by a booker who contacts the ballroom operator; they are represented by a personal manager or agent who contacts the bookers for them; they furnish us with publicity; they tell us what type music they play; what radio stations they have played on and what records they have recorded. They inform us on how well they are known and what a big crowd they will draw. This type is broken down into two classes (1) the class that has not yet reached the top and these orchestras receive several hundred to a thousand dollars or so over the scale, and, (2) the class that at one time was in class (1) and has now reached the top and they, of course, receive thousands of dollars in excess of scale.”

A similar problem arose in the State of Utah and a brief was filed for refund of unemployment compensation contribution paid under protest on name and traveling bands. I have attached copies of the brief and form contract as exhibits A and B, respectively, for inclusion at this point.

It is also interesting in this case to note that no recommendations of the Advisory Council were included covering this situation. I, therefore, suggest that the second paragraph of the cited section be deleted from the bill when the Senate committee reports it to the floor of the Senate.

TEACHER RETIREMENT

The various school teacher associations in my State have requested that I present their views in connection with the proposed amendments to H. R. 600 which they feel will jeopardize the established teacher retirement systems which have been operating for nearly 15 years in Utah. These amendments are as follows:

"1. In section 218 under definition strike out (C) of paragraph (5).

"2. In section 218 strike out (d) (1) (line 10, p. 82, through line 17, p. 83) and substitute:‘(7) Such agreement shall exclude all public employees in posttions covered by a retirement system, as previously defined in subsections (bi (4) of this section.'"

The Utah State Teachers' Retirement Board's spokesman requested me to state as follows:

"This expression represents the almost unanimous opinion of the 8,000 members of our system:

"It is not our intention to deny anyone the benefits of a retirement syst We feel, however, that inasmuch as there is a State-wide teacher retirement system in each State, which systems can, and do meet the requirements of the members of the system better than would social security, these State systems should be protected. We feel, further, that if the door is opened by permissive agreement, some State governments will withdraw their support from the State

system, and transfer the obligation to the Federal Government. The ultimate cost to the taxpayer for a certain benefit is exactly the same, whether it be a Federal system or a State system. However, if one State should discontinue its teacher retirement system, and transfer to social security, other States would be inclined to do the same thing, in order to be on an equal basis."

In addition to the above quotation, the following is a summary of the objections the Utah State Teachers' Retirement Board, which represents all the teachers in the State of Utah, raised to inclusion of teachers under the social security program. They are fully cognizant of the fact that H. R. 6000 provides for voluntary arrangements between the State government and the Social Security Board for social security benefits to be made available to State and local employees. At the present time Utah State Teachers' Retirement System in about nine cases out of ten provides for more liberal benefits at more commensurable rates than contemplated in H. R. 6000. In addition, the social security benefits are not particularly attractive to unmarried workers or to workers without dependents. A large percentage, estimated between 60 to 70 percent of teachers in Utah are women and an even greater percentage have few or no dependents. The social-security system provisions of H. R. 6000 are not as beneficial to these classes as is the State retirement system.

I am informed that there is a State-wide teacher retirement system in every State and Alaska and Hawaii and that the same analysis above set forth is applicable in those States.

At this point I wish to quote a letter from Ray L. Lillywhite, secretary-director of the Utah State Teachers' Retirement Board:

"In Utah, our members contribute an average of 8 percent of their salary to our system. Under social security they would have to pay only 11⁄2 percent, graduated up to approximately 4 percent by 1970. It appears, then, that social security gives more for the money than do the State systems. Perhaps it does at the present time, but a pension on teacher retirement allowance of $100 per month will cost just as much if it comes from the Federal Government as it does from a State or local system. Someone will have to pay the difference if the burden is shifted to Federal social security.

"We know that, at the present time, the members of our retirement system would not vote to go into social security, unless they could also keep the benefits of the present State Teacher Retirement Act. However, we feel that State legislatures would be very much inclined to drop the benefits of the State system, or eliminate them entirely if there was a possibility of shifting the burden, or part of it to the Federal Government. Our teachers would then be forced to vote for social-security coverage, in order to have protection. This agitation would be accelerated as more States transferred from their own State systems to Federal social security.

"Our proposed amendment to H. R. 6000 would exclude our public employees who are in positions now covered by a retirement system, and would thereby prevent any threat by State legislature, as indicated in the paragraph above. "The teachers of Utah would greatly appreciate your efforts along the lines suggested."

MANUFACTURERS' AGENTS

I have received extensive correspondence from manufacturers' agents, both within and without the State of Utah, calling my attention to the drastic impact of section 210 (A) (1) (8) and section 210 (K) (4) of H. R. 6000. It seems to me that the language in these sections is arbitrary and impractical of application. I recognize that some of these standards have been used in various court decisions to determine the employee-employer relationships for purposes of other social legislation. Many years of litigation would be required to determine all the various implications of such an amendment. It seems to me that if it is to be determined that old-age benefits as well as the other benefits anticipated in H. R. 6000 are necessary for these particular independent merchant classifications that a more satisfactory solution could be reached by permitting them to voluntarily come within the scope of the act as self-employed individuals. This problem is also one closely tied in with the discussion above set forth in connection with mining lessons; and it is interesting to note that the Advisory Council made no recommendation regarding the definition of the term "employee" as contained in H. R. 6000.

Another item I wish to call to the attention of the committee relates to the inclusion of funeral benefits and disability insurance. Section 107 and related

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