the replacement of some of these with legal contract workers, provided through the Farm Placement Service. Due to the absence of cheap wetback labor, employers are offering more attractive wages to domestic workers. As a result, there has been a significant increase in the use of domestic labor in the border areas of all States contiguous to Mexico. An outstanding example is the Rio Grande Valley of Texas where the employment of domestic labor increased by 75 percent, from 20,000 in 1953 to 35,000 in 1954.

BUREAU OF EMPLOYEES' COMPENSATION

I am requesting an increase for this Bureau of $227,000. The purpose of this increase is twofold. We must remember that the benefit payments made under this program are made primarily to Federal civilian employees who have been cut off from their regular income because of injury or disease arising from their employment; or to their families if the injury or disease should result in death. In one respect, they are very similar to payments under the unemployment compensation program-they are to enable individuals and families to continue to meet their living expenses in the face of suddenly discontinued income. It is obvious, therefore, that they must be made promptly if they are to meet this need. Two years ago, as you know, a pilot decentralization project was set up in San Francisco to test the advantages of handling claims in the geographic area in which they arise. One of the results has been that in 70 percent of the cases received in the San Francisco office, the first payment is made within 1 week of receipt of the claim as contrasted with 1 percent of claims processed in the central office. Complete decentralization is not sought at this time because of the preliminary cost involved. However, we are planning to reorganize the claims-proccessing operation into a series of units on a geographic basis which we are convinced will produce some, but not all, of the advantages apparent in the San Francisco operation. It will involve some initial additional cost, but, at the same time, it will make for easy transition to complete decentralization when that goal finally can be achieved. This change to the unit system is in line with the most modern and efficient procedures worked out in the States.

An improvement in the reporting practices of the employing agencies is another step which can contribute to the speedy handling of claims, and funds are included in the increase for a campaign to accomplish this result.

The second part of the twofold purpose of the increase is to assure that, despite the need for speed in processing claims, Federal funds are not dissipated through improper payments. This can be accomplished only by investigation of doubtful claims and by checking continuing liability in certain cases already on the rolls. This phase of the operation has been woefully weak in the recent past through lack of funds, and we propose to strengthen it at least to the point where we feel that reasonable protection is afforded. The savings to the Government should offset the cost many times over.

Rehabilitation of the permanently disabled is another of our authorized functions which has not received its proper emphasis. When we consider that one permanent disability case can cost the Government as much as $100,000, it becomes evident that we can no longer afford this neglect. Just one of these cases returned to gainful employment would cover several times the increase requested. Private insurance companies which have made substantial investments in rehabilitation report that the outlay is much more than offset by the decrease in medical and benefit payments.

Funds for the operation of the Employees' Compensation Appeals Board are included in this section of the budget and no increase is requested for 1956. However, I would like to say that this Board has made considerable progress during the current fiscal year in reducing both the number of cases on hand and the average time required for processing a case. The additional legal services which are being requested for the Solicitor of the Department will make further improvement in this situation possible despite a still increasing caseload.

BUREAU OF LABOR STATISTICS

The Department of Labor in its program for 1956 has placed great emphasis on better factfinding for Government and for the public. This involves new statistics, improvement of existing statistics, and more detailed analysis of these reports so that we can apply them more effectively to action programs and to policy decisions. I have been much impressed during the past year with the fact that we did not have the information we needed to answer certain critical

questions on unemployment, wages, and other important problems. For 1956 I am asking for an increase of $1,495,000 which will enable us to fill some very important statistical gaps that became apparent during the economic adjustments of 1953-54, and that have been the subject of special requests of the Council of Economic Advisers and of the hearings of the Joint Committee on the Economic Report. Further, this increase is a part of a government wide effort to get a balanced statistical system, and increases have been provided in other agencies of Government having activities in this field for this purpose.

In carrying out this statistical program, especially in the fields of unemployment, employment, and labor turnover statistics, and of industrial injuries and workmen's compensation, the Bureau of Labor Statistics will work in close cooperation with other Bureaus of the Department, other Federal agencies and State agencies. The Bureau of Labor Statistics has long had a policy of collecting its statistics jointly with the States, wherever this is practicable, to avoid duplication and to improve both State and Federal studies. It is proposed in fiscal 1956 to strengthen and build this system. The Department of Labor has set up a central statistical committee to see to it that all the statistical activities in the Department are utilized most efficiently, coordinated with each other, and so planned as to avoid duplication.

You will note, in reviewing the Department's proposals, that I am stressing the development of better facts on employment and unemployment. I feel that this Government and, indeed, the public generally have been handicapped this past year by lack of information on who the unemployed are, how people move about from job to job and into and out of the labor market, the varying impacts of unemployment in local labor market areas, the extent to which unemployment insurance benefits are inadequate in emergencies, and the like.

WOMEN'S BUREAU

It will

The Women's Bureau program for next year is a comprehensive one. include studies on the critical shortages in teaching and nursing; the improvement and extension of State minimum wage programs; the problem of older-woman workers; equal pay; the social and economic problems of married women working; and employment opportunities for women.

To insure the coordination of the work of the Women's Bureau and that of other bureaus, the Director of the Women's Bureau has been appointed Assistant to the Secretary for Women's Affairs.

The Assistant to the Secretary for Women's Affairs will provide leadership and coordination of the Department's activities which relate to women's affairs, and will plan and review Bureau and Office programs to make certain that programs and materials are developed which will contribute to the improvement of the status of women.

WAGE AND HOUR DIVISION

Enforcement of the Federal wages-and-hours laws contributes directly to the maintenance of a stable and prosperous economy. This is accomplished by preventing depressed wage scales among sizable groups of unorganized workers in particular and all labor in general, insuring the judicious use of child labor in industry and agriculture, discouraging unsafe and insanitary working conditions, and generally contributing to the maintenance of fair competitive conditions among employers. The results of the past year indicate the need for continuing a vigorous investigation program. During 1954, investigations were made in 39,430 nonagricultural establishments, and 52 percent of these were found in violation of one or more of the basic provisions of the Fair Labor Standards or the Public Contracts Acts. The investigations disclosed that 141,368 employees were underpaid in the total amount of $13,774,248, of which employers have agreed to pay $6,485,545. During the same year, 3,592 farms were visited, and of these, 1,193 were found to be employing 4,389 children illegally.

The number of investigations completed during 1954 was at the same level as 1953 even though there was a sizable reduction in staff. This was possible because of the introduction of simplified and improved investigation procedures. The results of the first 6 months of the current fiscal year indicate that approximately the same level of program will be attained in fiscal 1955.

The increase of $45,500 requested for 1956 is primarily to provide for 2 additional industry committees to be held in Puerto Rico and the Virgin Islands for the purpose of reviewing wage rates in several industries. The increased program is necessary in order to counteract the effects of the considerable lag in these Islands' wages compared to the wage changes on the mainland, which has resulted

Not

from convening annually only 1 or 2 committees during the past few years. only is this situation reacting to the detriment of workers in Puerto Rico and the Virgin Islands, but it is also resulting in serious competitive problems for industries on the mainland.

An active program of making wage determinations under the Walsh-Healey Act has been planned for 1955 and 1956. The budget provides for 6 industry hearings to be held during 1955 and during 1956, and it is anticipated that during the current fiscal year wage determinations will be issued in at least 3 industries, including paper and pulp, metal business furniture and storage equipment, and envelopes.

AUTHORITY TO TRANSFER FUNDS

I want to say a special word about our request to restore limited authority to transfer funds between appropriations. This authority was eliminated by the joint conferees last year. We had this authority for several years and I understand our record has been good in the use of it. Annual reports to Congress were made whenever it was used and all transfers were subject to approval by the Bureau of the Budget. Thus, techniques were available which afforded good protection against abuse, yet it also made possible the handling of small unforeseen emergency items which otherwise would result in the processing of small supplemental budgets.

OFFICE OF THE SECRETARY

This budget designation is a misnomer. It includes salaries and expenses for the Secretary's Office, the international labor program, and centralized services to all Bureaus.

One of the weaknesses that I have found in the Department, with respect to the staff available in my own immediate office, is that I am unable to provide necessary leadership in labor legislation, policy formulation, and program direction. To remedy this defect, I am requesting one position to assist me in the development of legislation and a professional assistant and clerk for the Under Secretary and similar assistance for the Assistant Secretary for Standards and Statistics.

Funds are requested to develop a new program affecting the skills of the work force. Maintaining a strong growing economy and effective preparedness for national defense will depend largely upon the skill and versatility of our work force. Increased productivity resulting from technological progress has made possible employment of workers of limited skills at wage levels adequate to maintain high consumption levels. The introduction of automatic processes will limit employment possibilities of unskilled and semiskilled workers at the same time it increases the requirements for skilled workers to produce and maintain the complex machinery necessary for such processes.

Further needs for skill and versatility in the work force will be imposed by such factors as shifts in employment from manufacturing to service occupations and by the adoption of more complex extractive processes for basic materials. The combination of these evident trends results in a requirement that for the future there must be greater attention given to the training of the work force not only of those entering employment but those already employed.

Dean J. Douglas Brown of Princeton has recently emphasized the changing character of the demands on our manpower resources as follows:

"The new problem is that of adjusting our manpower resources to the pattern of demand required by the mass production of a rapidly changing stream of complex goods. We have come to the painful realization that mass production of such goods places pressure upon our manpower resources not so much at the rank-and-file level of fabricators, assemblers, and distributors but, most of all, upon the far scarcer manpower which creates the ideas, designs, processes, and equipment which in turn makes thousandfold duplication desirable and possible." The Nation then has the problem of

1. Guiding and motivating capable individuals to enter the skilled trades and the scientific, technical and professional fields in sufficient numbers,

2. Seeing that training and education have proper content and that the cumulation of training and education produces a skilled and versatile work force,

3. Seeing that on-the-job and related training is done and is accomplished with the most effective methods.

It is not being proposed that these problems are for the Federal Government to solve. These problems are those which parents, elementary and secondary schools and institutions of higher learning, and employers and labor must face and solve.

The Federal Government, including the Department of Labor, can provide assistance to these groups in solving the Nation's problem of developing a skilled and versatile work force. Many things are being done, additional steps need to be taken and particularly there is need for the pieces of program to be placed in proper and effective relationship to each other in order to achieve our goals.

The Department of Labor develops and publishes occupational outlook material to assist individuals in making sound occupational choices; the Department develops counseling techniques and through the Federal-State employment offices provides counseling services to individuals to help them in selecting training or educational programs in line with their capacities and interests and with the Nation's needs for trained workers; the Department promotes apprenticeship programs in industry to meet the needs of the growing economy and national security.

Funds are requested to provide for 5 positions at a total cost of $40,000 to prepare a new program in the development of the skills of the work force. This will involve

1. Developing programs and techniques for studying the current and longrange trends in economic and technological developments and preparing information which will be helpful to all groups in dealing with the problem of developing required skills,"

2. Developing new devices for coordinating the Department's programs and for seeing that the Department's programs deal with the right problems, 3. Developing new ideas for strengthening the Department's occupationai outlook, counseling, and apprenticeship programs,

4. Developing new programs to assist industry and labor in improving on-the-job training.

In the field of international labor, an increase of $100,000 is requested to enable the Department to discharge its responsibilities. International discussion of fair labor standards, trade-union rights, forced labor, international trade, opportunities for productive employment, all have basic implications for the well-being of American workers. The admission of Russia and its satellites to the ILO, improvement of the labor attaché program, increasing calls for providing qualified experts for interagency committees, are all recent developments which place increasing demands on the Department. The requested increase is for 15 new positions.

For centralized administrative services to all bureaus, I am also requesting a small increase for three additional duplicating-machine operators necessary because of the increase in Department programs.