UNITED STATES SENATE, Hon. WALTER F. GEORGE, May 25, 1944. Chairman, Post-war Economic Policy and Planning Committee, DEAR SENATOR GEORGE: Enclosed is a letter from Governor Griswold, of Nebraska, which is self-explanatory. Inasmuch as he has stated, "I trust you will submit this statement to the committee in my behalf," I am submitting the original letter with the request that you use it in any way you choose. A copy of Governor Griswold's letter has been made for our files. Thanking you, I remain United States Senator. KENNETH S. WHERRY, STATE OF NEBRASKA, Hon. KENNETH WHERRY, Senate Office Building, Washington, D. C. DEAR SENATOR: On May 31, June 1 and 2, Senator George's Committee on Post-War Economic Policy and Planning is holding hearings to consider "Human Demobilization." One of the subjects to be considered is whether or not a Federal system should be set up to pay unemployment insurance benefits to former war workers. The main argument for a Federal system briefly is that unemployment, resulting from the end of hostilities, is a national problem, and therefore the Federal Government should finance the payment of unemployment insurance benefits. In answer to this argument, employers of Nebraska who have been paying into the State fund have always assumed that the burden of paying unemployment insurance benefits to war workers would fall upon them. They have never anticipated Federal assistance and to the best of my knowledge have never asked for it. Because they felt that this was a burden they would have to carry, they have asked that their tax rate, which is set by the Commissioner of Labor, be maintained at a relatively high rate during these prosperous times so there would be sufficient money in the State fund to meet this problem. Another argument advanced in favor of a Federal system is that the State unemployment insurance funds are not large enough to pay benefits to all who may become unemployed. We do not believe that such an argument applies to this State. Because of the fact that employers have been agreeable to pay relatively high rates during this period, the Nebraska fund has reached approximately $20,000,000, which in our opinion is sufficient to pay all benefits which might be claimed and still leave a substantial balance. A third argument advanced is to the effect that the weekly benefit amounts paid by the State and the duration of benefit payments is not adequate. Whether or not Nebraska's weekly benefit amount and the duration of benefits is adequate is a relative question depending upon the cost of living, opportunities for employment and similar matters. It has never been demonstrated that the State systems are inadequate. If subsequent events should demonstrate that more liberal payments are necessary it would appear that the liberalization of these benefits is the proper function of our State Legislature which can give this subject proper consideration at its next or any succeeding session. A specific example of a bill which could ultimately result in a Federal unemployment insurance system is title IV, Kilgore bill, S. 1893. While this bill does not directly set up a Federal system it chooses a less obvious way of accomplishing this result. It provides that the Federal Government shall furnish money to the States to be used in paying unemployment insurance benefits. This money would be turned over to any State unemployment insurance agency which agrees to cooperate with the Federal agency administering the law. It further provides that if a State does not agree to cooperate with the administrator of the Federal act then an individual living in that State can draw unemployment insurance benefits direct from the Federal fund. This would mean that if a State would refuse to agree to the standards set up by the Federal administrator a Federal system would be set up in that State. We do not have any exact knowledge as to what the Federal standards would be but they could be so stringent that all States would refuse to cooperate and thus a national system set up. We understand that after these hearings, Senator George's committee will make some recommendations as to specific laws that should be enacted to protect the workers in the post-war area. We are interested in seeing that this committee does not recommend a Federal unemployment insurance system or a law such as the Kilgore bill, which might ultimately result in a Federal system. The following figures support our contention that the Nebraska unemployment insurance fund is large enough to pay benefits to all workers who might file claims: Average monthly employment covered by the law in 1943. Average monthly employment covered by the law in 1938_ Addition due to war.. 144, 660 117, 303 27, 357 An unemployed individual during a year may draw a maximum of $240. Taking the worst possible view-that all 27,357 workers draw the maximumthe fund would pay out $6,565,680 per year. There is approximately $20,000,000 in the fund at the present time. I trust you will submit this statement to the committee in my behalf. Sincerely yours, DWIGHT GRISWOLD, Governor. Hon. WALTER F. GEORGE, THE CLEVELAND CHAMBER OF COMMERCE, Chairman, Special Committee on Post-war Economic Policy and Planning, Senate Office Building, Washington, D. C. DEAR SENATOR GEORGE: Since you are chairman of the special committee considering S. 1823 by Mr. O'Mahoney (for Mr. Kilgore) we desire to assist you in consideration of that bill by expressing the views of the Cleveland Chamber of Commerce. it For the past 5 years this chamber has sought to maintain State control for its unemployment compensation bureau and a continuance of the merit-rating provisions of the Ohio Unemployment Compensation Act. With this in view, has consistently opposed efforts to nationalize unemployment compensation, as well as efforts to discredit, curtail, or eliminate merit rating. We feel that section 506 of the bill, giving Federal interim placement benefits to civilian workers, contains all the elements necessary to bring about the early nationalization of unemployment insurance and the elimination of merit rating. We cannot believe that the Congress would vote for outright nationalization or elimination of State merit rating systems if the question were presented to it by a separate bill for those purposes. Woven into such a bill as this, however, we are fearful that the true purpose of section 506 may not be fully understood. We trust you will give careful consideration to these views. WALTER I. BEAM, Executive Vice President. OKLAHOMA EMPLOYMENT SECURITY COMMISSION, Hon. WALTER F. GEORGE, United States Senator, Chairman, Special Committee on Post-war Economic Policy and Planning, Washington, D. C. DEAR SENATOR: We thank you for your letter of May 12 advising that the dates, May 31, June 1 and 2, have been set aside to hear those in opposition to changes in the present unemployment compensation laws. It has not yet been determined as to whether we wish to be heard in person. E. J. O'Connor, one of our Commissioners, has just returned from Washington after a stay of several days. He was delegated by the Commission to secure whatever information he could concerning this proposal. In view of the developments so far, the Commission has instructed me to submit to you the enclosed statement for the information of your committee. Yours very truly, H. E. PENDERGAST, Executive Director. OKLAHOMA EMPLOYMENT SECURITY COMMISSION, Hon. WALTER F. GEORGE, United States Senator, Chairman, Special Committee on Post-war Economic Policy and Planning, Washington, D. C. DEAR SENATOR: At the regular meeting of the Oklahoma Employment Security Commission on May 11, the Commission discussed at length the pending proposal of United States Senator James E. Murray concerning human demobilization which in effect provides for the subsidization of State unemployment compensation funds and indirectly, by regulations, possible Federalization of State unemployment compensation agencies. It was the opinion of the Commission that in their considered judgment the Oklahoma unemployment compensation fund is entirely adequate to meet any post-war unemployment in Oklahoma and that Federal subsidy of the fund is unnecessary, and any further Federal participation, directly or indirectly, through regulations and benefit standards which the proposal indicates, is undesirable. For your information they directed me to supply you with the following figures: 1. The unemployment compensation fund reserve at this time amounts to $38,134, 137, and based on the experience of the last 24 months a conservative estimate would indicate a reserve of $42,000,000 at the end of 1944, with an additional $2,000,000 due from fourth-quarter reports which will be collected immediately after the first of the year. 2. That since the beginning of benefit payments in December 1938 there has been paid out of the fund as unemployment benefits $14,229,408, broken down by years as follows: December, 1938-$71,231; 1939-$4,244,197; 1940—$3,713,074; 1941-$2,623,598; 1942-$2,795,344; 1943-$567,478; 1944-$214,486; payments for April 1944 being $44,607 paid to 1,107 persons. 3. That the average payment per week for each individual during the past several months has been approximately $14 and that on this basis the fund at the end of 1944 would permit the payment of $14 per week to 196,400 claimants for the full duration of 16 weeks, which is the maximum duration for any claimant within a 12-month period, or $16 per week for 16 weeks to 171,875 claimants, the latter being the maximum amount of $256 that can be drawn by any claimant within a 12-month period. 4. That the number of covered workers currently employed is approximately 275,000 as compared to 180,000 in 1940. From which we conclude that the postwar unemployment will not reach such proportions in Oklahoma as to bring about insolvency of the fund. Trusting that this information will be of interest to you, I am, H. E. PENDERGAST, Executive Director. COMMONWEALTH OF VIRGINIA, Hon. WALTER F. GEORGE, UNEMPLOYMENT COMPENSATION COMMISSION, Richmond, May 27, 1944. Chairman, Special Committee on Post-war Economic Policy and Planning, Senate Office Building, Washington, D. C. MY DEAR SENATOR GEORGE: I am enclosing herewith in duplicate a statement which is made by me on behalf of the State of Virginia at the request of Governor Darden, which I desire you to place in the record at your hearings on May 31, 1944. I shall not appear personally as I think the statement which I am enclosing covers our attitude in full and presents our position on the proposals and it is not necessary for me to take up the time of your committee. I shall appreciate your seeing that this statement is placed in the record. Very sincerely yours, JNO. Q. RHODES, Jr., Commissioner. STATEMENT OF JOHN Q. RHODES, Jr., UNEMPLOYMENT COMPENSATION COMMISSIONER OF VIRGINIA, REPRESENTING THE STATE OF VIRGINIA AT THE REQUEST OF HON. COLGATE W. DARDEN, Jr., GOVERNOR OF THE STATE OF VIRGINIA As I understand, proposals are being considered by your committee which have as their purpose the authorization of Federal appropriations to supplement the unemployment compensation reserve funds of the States so as to enable them to increase the unemployment benefits now authorized under State laws. Such proposals, if enacted into law, would involve large Federal subsidies and more Federal control and interference with State laws and administration. Experience shows that whenever the Federal Government puts up funds to subsidize any State activity, it imposes controls with reference to such funds. The State of Virginia does not desire any Federal legislation imposing on the State the necessity of revamping its State unemployment_compensation law in order to meet the conditions that would be attached to Federal grants. This would be another step toward centralization of power in the Federal Government and would eventually result in the federalization of the Unemployment Compensation System. Virginia is unalterably opposed to the federalization of the Unemployment Compensation System, or to any plan that would lead or tend to such federalization. The very fact that the proposals now being considered would tend toward federalization, in my opinion, is a fatal objection to such proposals. I feel that the reserve in the unemployment compensation fund now to the credit of Virginia is ample to enable the State to meet any reasonable contingency that may result on account of the transition from war industry to peacetime industry. The State systems of unemployment insurance must remain more or less stabilized and not subject to change every time we are confronted with an unusual or transitory problem. We have built up the system to cover us in difficult times and emergencies and it should be allowed to continue without further interference from the Federal Government. If it is necessary to take care of emergencies or special situations, these should be taken care of, but not by harming or tending to harm our present State systems. The fund has been accumulated under a sound actuarial basis after analysis by each of the States of the potential needs of the workers who may become involuntarily unemployed. A Federal supplement would break down and destroy the insurance feature of the system and result in the payment of benefits from moneys not collected into the fund by the process of imposing a tax on the employer. The strength of the system lies in the fact that premiums (taxes) have been paid in advance for the purpose of creating a reserve to meet the situations now under consideration. When payments are made out of funds not already in reserve, such payments may be termed outright relief gifts rather than unemployment benefits. The States should be allowed, free from Federal pressure, through their duly elected lawmakers, to liberalize their laws when in their judgment the need becomes urgent. Senator WALTER F. GEORGE WEST VIRGINIA CHAMBER OF COMMERCE, Chairman, the Post-war Economic Policy and Planning Committee, the Senate Office Building, Washington, D. C. DEAR, SENATOR GEORGE: Attached please find a written statement of the position of the West Virginia Chamber of Commerce which deals with the human demobilization features of the measure which is before your committee. We respectfully request that this statement be inserted in the record of the hearings and we will be glad to be apprised of your decision on this request. Very sincerely yours, H. A. STANSBURY, Managing Director. STATEMENT OF THE WEST VIRGINIA CHAMBER OF COMMERCE PRESENTED TO THE SENATE COMMITTEE ON POST-WAR ECONOMIC POLICY AND PLANNING, CHARLESTON, W. Va., MAY 31, 1944 The West Virginia Chamber of Commerce desires to register with your committee its opposition to that provision of the so-called human demobilization bill which provides for unemployment compensation payments in any form from the Federal Treasury. It is the contention of our organization that the present surpluses in the trust funds of the States are adequate to meet all bona fide claims of beneficiaries, whether the claimants are discharged servicemen or disemployed war production workers. This is particularly true of returning soldiers, or sailors who, in addition to aid from their "frozen" unemployment benefits under the various State laws, will be substantially provided for by the discharge pay and other generous features of proposals already adopted or in course of adoption by the Congress. In West Virginia there is a present accumulation in the trust fund of the department of unemployment compensation exceeding $56,000,000. The adequacy of this surplus becomes evident when we consider the fact that it is 4.7 times the largest amount of benefits paid in any one year since the fund was established 9 years ago. Twelve million dollars were paid out in benefits during 1938 when it is estimated that 23 percent of our entire force of industrially employed workers was unemployed for a substantial portion of the year. This was a year, incidentally, when bituminous coal production, an industry engaging onethird of all of West Virginia's industrial workers, was operating at only 71 percent of its 8-year average. We unequivocally assert the solvency of our unemployment insurance fund under any and all conceivable conditions, this despite the facts (1) that 170,000 West Virginians are currently serving in the armed forces, and (2) that we now have 65,000 more nonagricultural workers than were employed in the State during 1938. We do not feel that it is necessary to make here a labored explanation of the basis for this confidence, except to point out as an example that our bituminous coal mines can actually increase present employment 35 percent by restoring pre-war hours of work, and by requiring over-age men and other pensioners to accept the status freely provided for them. If, however, the entire body of 170,000 West Virginia servicemen are discharged during the next year and not one of this group secured employment; and if, as a result of closed mines and factories, the 65,000 excess nonagricultural workers now employed should become unemployed, the surplus in our reserve fund will be ample, during the next year to give to each and every one of this vast army of 235,000 citizens, their maximum benefits for the maximum number of weeks provided in our law. It is our belief furthermore, that if management, labor, and Government are so inept as to permit unemployment of such an extensive nature to persist for as much as 1 year in the post-war period, then our entire present economic system must be scrapped in favor of the corporate State, collectivism, fascism, or communism, call it what you will. We oppose the presently proposed, and all other forms of federalization of the unemployment compensation systems of the States. We believe in the first place that it is a most significant and damaging invasion of the rights of the States, and, we believe secondly that a realistic appraisal of the existing scale of benefit amounts and duration, provided by the States, all considered in the light of the varying economic conditions within the States, will prove to fair-minded Senators that there is no occasion for a Federal subsidy. It is the hope of West Virginia businessmen who are so comprehensively represented in the membership of the State chamber, that the Congress will bear carefully in mind the tremendous financial impacts on the Federal Treasury which will be unavoidable in the post-war period, and that this totally unnecessary and unjustifiable further burden will not be assumed. Respectfully submitted. THE WEST VIRGINIA CHAMBER OF COMMERCE. STATEMENT OF WILLIAM J. PETERSEN, EXECUTIVE SECRETARY, WISCONSIN STATE I am submitting this statement to your committee on behalf of the Wisconsin State Chamber of Commerce and of the thousands of Wisconsin citizens and businessmen who, we know, agree with the views which we express. Some of the individuals who have appeared before your committee representing labor organizations and Washington agencies have urged that the whole unemployment compensation set-up be revamped, by imposing more Federal control on the State programs and legislation, and by diverting some of the contributions, now being paid into State unemployment funds, into a Federal reinsurance pool. Others who have appeared before your committee have recommended a special program of supplementary Federal benefits, to be paid in addition to the benefits provided in State laws. The avowed long-run aim of most of these people is the complete centralization of all unemployment compensation funds and authority in Washington. Wo |