Third, while there are limitations of coverage, these result from Federal action rather than from State action. There are two great groups of people not covered by State statutes-the military services and the Federal civilian employees.

The ex-serviceman is the Federal Government's responsibility, and the Congress no doubt will meet this responsibility.

Temporary civilian wartime employees of the Federal Government would probably be covered by State laws today were it not that the States are barred from demanding contributions from Federal agencies.

All you have to do is remove the prohibition. Provide a way for the Federal agency to contribute as an employer and the States will do the rest, as the State officials who have preceded me have indicated on various occasions.

While I do not not share the view that national uniformity is necessary or desirable from State to State, I do believe that neighborhood uniformity of treatment is desirable. Two factory employees, living side by side, should be covered under the same formula-the State formula.

Fourth, I should dislike very much at this stage of the development of this character of legislation to put at an end all State experimentation which would eventuate as soon as nationalization takes place. Another decade of State administration and control is bound to develop experimentation out of which will come improvements in the law not likely otherwise to occur. Each State has conditions, policies and I might even say politics peculiar to itself. This diversity makes for experimentation which we believe is highly desirable. Fifth, in the relatively short time that these laws have been operative in the States, there have been many improvements made by each successive State legislature, but always in consonance with State conditions and always with a view to strengthening the law without injury to those who finance it. Where the law has been liberalized, where, for instance, waiting periods have been shortened and benefit payment periods have been lengthened and benefits increased, which has been done in practically every State in the Union, these changes have been brought about without economic disturbance.

Finally, may I reiterate: On this question of federalization, Federal subsidy, or Federal control, our manufacturing groups in these 32 States are of one mind.

We recognize unemployment compensation as a State responsibility and that is a responsibility we intend to meet.

Acting Chairman HAWKES. In other words, Mr. Kull, you feel that the States are better able to take care of the people who live within the borders of the States than some agencies of the Government. That is looking at the picture over-all, and that has many varying and different conditions.

Mr. KULL. Unquestionably, Senator, this is a situation which runs more distinctly, more accurately, into the grass roots of any community than almost any other piece of legislation that we have on the books, and unless the administrative agency has a pretty close touch with the situation that it is trying to adjudicate you are very likely to have chaos.

Mr. RUSSELL. Mr. Kull, the original Federal act setting up unemployment compensation did set up certain standards that the States had to meet in their administration.

Mr. KULL. Yes.

Mr. RUSSELL. They left the administration entirely to the States, with which I am 100 percent in accord. But what valid distinction is there between the setting up of certain standards in the original act and, by legislative action, setting up certain additional standards as a condition to the credit against the Federal tax as long as it is purely a congressional action that does not affect the State administration? Mr. KULL. In the first place, I would say we are looking too far ahead.

Mr. RUSSELL. I am not talking at all about the necessities of it. We have had a lot of argument here on the theory of Federal interference, to which I am just as much opposed as you, but I haven't had any staisfactory answer as to where the line should be drawn in the setting up of legislative standards as distinguished from administrative standards.

Mr. KULL. Well, of course, the legislative standards that were established in the first place, as has been brought out here innumerable times in the last few days, were a minimum. They were so carefully selected and so carefully constructed that there was not much danger of their being injurious to any State in the Union.

Now, if you turn them high, wide, and fancy to the Congress there is no telling what may happen.

Mr. RUSSELL. The Federal Government brought unemployment compensation into being in the United States, except in the State of Wisconsin, by Federal act which assessed a 3-percent tax and then granted a 90-percent credit. Certain standards were set which mustbe followed by the States before they can get the 90-percent credit. Now, it does not seem to me any greater extension of Federal control, certainly in administration, if Congress itself decides that those standards ought to be a little more rigid. I probably go too far in making that statement, but it does not seem to me that it interferes any further with your administration.

Mr. KULL. Yes; I think it would. I think it is an encroachment that we should guard against. If the situation that you cite as an illustration were true, there might be some justification, but that condition does not exist in many States.

Mr. RUSSELL. What condition is that?

Mr. KULL. The condition of the improvement of the law and bringing the standards of the act up to a required minimum. There are no State laws now that you can criticise very severely for being below a workable minimum on any of their standards.

Mr. RUSSELL. There has been a good deal of argument before this committee on that score.

Acting Chairman HAWKES. Of course, your position is each time the Federal Government takes another step in the picture it is that much further in the picture.

Mr. KULL. That is right.

Acting Chairman HAWKES. They first take one step, then they take another step, and then another, and then they finally have gotten the whole thing from the States and unless the people rise to protect their rights they have lost their power of action.

Mr. KULL. That is true. It is the whole story of the camel sticking his nose in the tent until he gets in.

91183-44-pt. 3-20

Acting Chairman HAWKES. Thank you very much. The meeting will be adjourned until 2 o'clock.

(Whereupon, at 12:10 p. m., a recess was taken until 2 p. m., of the same day.)

(The hearing was resumed at 2 p. m., pursuant to recess.)

The CHAIRMAN. The committee will come to order.

Mr. Beers, I do not think the other members of the committee will be able to attend the hearing this afternoon. Perhaps one or two other members of the committee will come in during the course of your statement. However, there will be a record of it and we will read it. I am very sorry but quite number of members of the committee are not in town this week and other members have pressing matters on other committees.

We will be very glad to hear you now on this general subject of supplementing or utilizing State unemployment compensation funds in this transition from war economy to peace economy.

STATEMENT OF HENRY S. BEERS, CHAIRMAN, CONNECTICUT UNEMPLOYMENT COMPENSATION ADVISORY COUNCIL

Mr. BEERS. I appreciate your courtesy in allowing me to make this statement today instead of on a later day, which would be very inconvenient or impossible.

I am Henry S. Beers, chairman of the Connecticut Unemployment Compensation Advisory Council. Governor Baldwin, of Connecticut, has asked me to appear on his behalf to state his views.

The CHAIRMAN. I will be very glad to put his telegram into the record.

Mr. BEERS. Thank you.

In business life I am a life-insurance actuary.

Our Connecticut unemployment compensation law now provides a maximum of $22 a week for a maximum of 18 weeks, a total of $396 in any one benefit year. This is, however, not the absolute maximum a worker can get after being laid off at the end of the war. As in many other States, such a worker in Connecticut will probably have wage credits for two different benefit years. After exhausting his rights in the benefit year in which he is laid off, he can on the ensuing April 1, when the new benefit year starts, start drawing benefits again and draw an amount of benefits during this second benefit year, depending upon his wage credits for that year. He might be able to draw another $396 or a large fraction of that amount.

The CHAIRMAN. Mr. Beers, let me ask you right there, your benefit year begins April 1?

Mr. BEERS. Yes, sir.

The CHAIRMAN. Is there any uniformity as to the benefit years in the States, so far as you know?

Mr. BEERS. There are quite a few States that have fixed benefit. years beginning about April 1.

I do not know how many, sir, quite a few.

The CHAIRMAN. I thought perhaps you might know.

Mr. BEERS. I do not remember the number. There are charts of comparison available at the Social Security Board on matters of that kind.

The result of the above-described feature is that a war worker laid off in Connecticut who never again engages in insured employment in

Connecticut may have aggregate benefits from Connecticut of $600 or $700, possibly $500 or $600 on the average.

Mr. RUSSELL. Mr. Beers, what would be the effect of the worker drawing his benefits, say, up to the 15th of March, then not making any effort to get a job in the meantime and starting over again on the 1st of April?

Mr. BEERS. He would be entitled to his benefits as of April 1, provided he were not disqualified by refusal to accept suitable employment or some other disqualifying reason.

Mr. RUSSELL. Do you try to keep any control over the acceptance of employment after you stop paying him benefits? What I mean is this: Suppose he has drawn his 18 weeks of benefits. Then his benefits stop. He knows they are going to start again the 1st of April, dependent on the fact that he does not take a job. Suppose he declines a job in those 2 weeks. Would your commission have any control over that or any supervision over that?

Mr. BEERS. That is a $32 question or something; I do not remember about that. I might say that the first week in April would be a waiting-period week in which he could not refuse an offer of suitable employment without being disqualified.

If, in the last week of March, he refuses an offer of suitable employment, I am afraid I do not remember exactly what the situation would be. I hope that would disqualify him but I am not sure that our law reads that way. I could check it for you.

Mr. RUSSELL. That is a little off the track but I was just curious. Mr. BEERS. We think our Connecticut benefit rate and number of weeks are about right, and we do not want them increased by the imposition of Federal standards our law would have to meet or by the superimposition of Federal benefits for additional weeks or additional dollars per week.

Our benefit fund exceeds $100,000,000, which is pretty good for a State of our size.

In normal times we have 400,000 insured workers in Connecticut. Right now we have about 700,000. That means, on reconversion to production for sale to civilians, there will be an awful strain on our funds; but we have made some calculations and we hope to squeeze by. We certainly do not want to give up now and decide we must have Federal help. We do believe that we in Connecticut ought to find a way to handle by ourselves, without outside assistance, whatever emergencies may arise.

We recognize, of course, that our law does not cover all employees. This matter has been discussed at some length this morning. With respect to agricultural labor, domestic employees, employees of charitable, educational, and religious organizations, we do not believe the reconversion period poses any new problems. We do not think there is anything special about those employees that should be considered during the reconversion period. On the contrary, we feel that any coverage of those employees should be deferred until things have settled down a little.

With respect to governmental employees who will be laid off at the end of the war, we think it exceedingly unfortunate that provision has not already been made to give them benefits. Of course, hindsight is easier than foresight, and it is very easy to say now that arrangements.

should have been made to cover those employees under the State laws. We do think it unfortunate those arrangements were not made. If they had been made, the Federal Government could have paid contributions to our fund like any other employer in Connecticut. The employees would have been entitled to Connecticut benefits if they were employed by the Federal Government in Connecticut, or they would be entitled to District of Columbia benefits if they had been employed in the District of Columbia. Probably if they had been employed abroad, they could be paid under the District of Columbia law.

It seems to us you should prepare some basis whereby those employees, when they are laid off, will be entitled to unemployment benefits according to the law of the State or district in which they were employed. Those benefits should be paid at Federal expense. We hope you will provide that the benefits will be administered by the State unemployment compensation agencies, and we hope that you will also see that the State employment offices, which were turned over to the Federal Government at the beginning of the war, are turned back to the States just as soon as possible.

I, myself, would say that the function of the Federal Employment Service in supervising employment offices ought to end when recruiting for war production ends because it seems to me very clear that, however you may feel about the efficiency of the Federal employment offices in the matter of recruiting for war employment, certainly in the matter of handling reemployment for production for sale to civilians, the States are going to be in a very much better position to supervise those offices efficiently.

Conditions are going to change and rechange with the utmost rapidity in the reconversion period.

The local offices must not be tied down waiting for Washington directives; they should be supervised locally.

Before the employment offices were turned over to the Federal Government, facilities existed, and can be reestablished, for exchanging job information among the States. It seems to us that Statesupervised employment offices will have all the facilities of federally supervised offices, plus the advantage of local responsibility and local information as to needs.

Governor Baldwin suggested that I say a few things about some of the reasons that we hear have been given you as to why Federal legislation is now needed to supplement or change the present State unemployment compensation laws. We are told that some persons say there will be a lot of long-continued employment in the reconversion period, that this proves workers should be covered for unemployment compensation benefits of more dollars per week for more weeks, that the States will not or cannot increase their benefit scales much, and that there should therefore be a Federal law.

In the first place, please note that this is an old story in a new cover. A group of experts, many of them on the Federal pay roll, have long been shouting for larger and longer unemployment compensation benefits. When the claim rate is high, they say the claimants need larger and longer benefits. When the claim rate is low, they point to the increasing funds and say we can afford to increase the benefits. When we entered war they foresaw cataclysmic unemployment and