certain date unless the workers submitted to his demand; whether the employer actually stopped operations; whether the employees were willing to continue working on the old terms though not at the new terms offered by the employer; whether the employer materially changed the terms and conditions of his employees' work and refused to allow his employees to work under their previous terms of employment. The merits of the controversy are not pertinent. In each case, the issue is who took the action that stopped the work at the plant, the employer or the employees. The decision rendered by the tribunal is based on facts elicited at the hearing. Either party, if he disagrees with the result, may appeal the decision to a higher authority including the State court. EXHIBIT I At present, 11 States apply approximately the same rule that is proposed in H. R. 8059. Laws of the following eight States accomplish this by making an express exception for lock-outs. Arkansas Connecticut 1 Kentucky Minnesota Ohio The laws of Utah, West Virginia, and California accomplish somewhat the same result by different means. Utah applies the labor-dispute disqualification only when there is a strike. West Virginia specifies that there will be no labor-dispute disqualification if the employer offers wages less than those prevailing, or denies the right of collective bargaining, or shuts his plant to force wage reduction. The Supreme Court of Appeals of West Virginia has said: 16* * * the petitioner required its employees, including the respondent, if he were taken back at all, to accept conditions of employment less favorable than those prevailing for similar work in the locality within the terms of the statute. This action on its part operated to prevent any disqualification of the respondent for unemployment benefits" [under the labor-dispute disqualification provision]. (Homer Laughlin China Co. v. Hix, 37 SE (2d) 649, 10761-W. Va. Court Decision, Ben. Ser., vol. 9/8, p. 119). * * California, by interpretation of its law, holds that whether an individual is disqualified under its labor dispute disqualification provision depends on "whether the worker left his job of his own free will or was forced to do so because of the acts of others." (McKinley v. E. S. C., 209 P. (2d) 602 (1949), BSSUI, LD465.3-1). While in the McKinley case the unemployment was held to be due to the worker's own action, the court added that if an association of employers "acted first by closing down one of the member plants and the union followed with a strike against all of the remaining plants, it would be * clear that the volitional act causing unemployment was the initial shut-down." Connecticut, 1950: "Where an employer materially changes the terms and conditions of his employees' work and refuses to allow his employees to work under their previous terms of employment and the purpose of the change is to gain a concession from the employees and to dictate the employer's terms, there is by such a change of terms a withholding of work and a lock-out." Quoted with approval in Shaheen Assif v. Administrator (Conn. Sup'r. Ct., BSSUI, 125.1-1). Kentucky, 1940: "Strike is cessation of work by employees in an effort to get for the employees more desirable terms. A lock-out is a cessation of the furnishing of work to employees in an effort to get for the employer more desirable terms * * *" (Iron Molders Union No. 125 v. Allis-Chalmers Company (166 Fed. 45 (7th Cir., 1908)), quoted with approval in Barnes et al v. Hall (Kentucky Court of Appeals; cert. den. U. S. Sup. Ct., October 31, 1941; Ben. Ser., vol. 4/11, p. 128). Minnesota, 1949: The union called a strike against 3 out of 12 members of an employers association, whereupon the other 9 closed their plants. Benefits were allowed to the employees of those nine employers. The court said that 11* * * the employers themselves have recognized the fact that the employees of the nine establishments were unemployed as the result of a lock-out" (Bucko v. Quest Co. (Minn. Sup. Ct. 13775-Minn., Ben. Ser., vol. 12/10, p. 94)). 1 Under sec. 7508 (3) of the Connecticut unemployment compensation law the exception is limited. It provides in part that "any individual whose unemployment is due to a lock-out shall not be disqualified, unless the lock-out results from demands of the employees, as distinguished from an effort on the part of the employer to deprive employees of some advantage they already possess.' a cessa Ohio, 1948: Workers engaged in a slow-down whereupon the employer shut down his plant. Held this was a strike, not a lockout which is "* * tion of the furnishing of work to employees in an effort to get for the employer more desirable terms" (Decision of Board of Review, 13242-Ohio R, Ben. Ser., vol. 12/3, p. 106.) For other decisions on slow-downs see 12413.-(Calif. R, Ben. Ser., vol. 11/9, p. 22 (1947) and 11030-Ill. R, Ben. Ser. vol. 9/12, p. 66 (1945)). Mr. FORAND. And while we have an interruption here, I notice that throughout your brief you make reference to the staff of the Ways and Means Committee and the Senate advisory staff and the Federal Advisory Council. Would it be possible for you to also provide for the record the names of the individuals that compose those several groups, so that if the committee wants to refer back to them we will have them handy? Mr. GOODWIN. Yes, sir. Mr. FORAND. I think it would be very important for us to have that. Mr. GOODWIN. Very well. (The information was supplied as follows:) SOCIAL SECURITY TECHNICAL STAFF OF COMMITTEE ON WAYS AND MEANS, 1945 Leonard J. Calhoun, commander, United States Naval Reserve. Rainard B. Robbins, vice president, Teachers Insurance and Annuity Association. Fedele F. Fauri, director, Michigan State Department of Social Welfare. William R. Curtis, chief, Administrative Standards Division, Bureau of Employ. ment Security, Social Security Board. MEMBERSHIP OF ADVISORY COUNCIL ON SOCIAL SECURITY TO SENATE COMMITTEE ON FINANCE, 1948 Edward R. Stettinius, Jr., rector, University of Virginia, chairman. Sumner H. Slichter, Lamont University professor, Harvard University, associate chairman. Frank Bane, executive director, Council of State Governments. J. Douglas Brown, dean of the faculty, Princeton University. Malcolm Bryan, vice chairman of board, Trust Company of Georgia. Nelson H. Cruikshank, director of social insurance activities, American Federation of Labor. Mary H. Donlon, chairman, New York State Workmen's Compensation Board. Adrien J. Falk, president, S & W Fine Foods, Inc. Marion B. Folsom, treasurer, Eastman Kodak Co. M. Albert Linton, president, Provident Mutual Life Insurance Co. John Miller, assistant director, National Planning Association. William I. Myers, dean, New York State College of Agriculture. Emil Rieve, president, Textile Workers' Union, and vice president, Congress of Industrial Organizations. Florence R. Sabin, scientist. S. Abbott Smith, president, Thomas Strahan Co. Delos Walker, vice president, R. H. Macy & Co. Ernest C. Young, dean of the graduate school, Purdue University. MEMBERS OF THE FEDERAL ADVISORY COUNCIL PUBLIC REPRESENTATIVES Dr. William Haber, professor of economics, university of Michigan, Ann Arbor, Mich., chairman of the council. John J. Corson, circulation director, Washington Post, 1337 E. Street NW., Washington 4, D. C. Mrs. Saidie Orr Dunbar, executive secretary, Oregon Tuberculosis and Health Association, 605 Woodlark Building, Portland, Oreg. Dr. Merle E. Frampton, principal, the New York Institute for the Education of the Blind, 999 Pelham Parkway, New York 67, N. Y. Fred K. Hoehler, executive director, department of public welfare, 1500, 160 North La Salle Street, Chicago 1, Ill. Mrs. Henry A. Ingraham, chairman, executive committee, National Social Welfare Assembly, Two Montague Terrace, Brooklyn 2, N. Y. Roscoe C. Martin, Maxwell Graduate School, Syracuse University, Syracuse 10, N. Y. Dr. Ira De. Reid, professor, Haverford College, Haverford, Pa. Mrs. Anna M. Rosenberg, room 1121, 444 Madison Avenue, New York 22, N. Y. Max F. Baer, national director, B'nai B'rith Vocational Service Bureau, 1746 M Street NW., Washington, D. C. Dr. Sumner Slichter, professor of economics, Lamont University Professor, 229 Littauer Center, Harvard University, Cambridge 38, Mass. Dr. Edwin E. Witte, department of economics, University of Wisconsin, Madison 6, Wis. VETERANS' REPRESENTATIVES Robert S. Allen, author, member of American Veterans Committee, 1204 National Press Building, Washington 4, D. C. Lawrence J. Fenlon, chairman, National Economic Commission, American Legion, 6747 Olmsted Avenue, Chicago 31, Ill. Omar B. Ketchum, director, national legislative service, Veterans of Foreign Wars, Defense Building, 1026 Seventeenth Street NW., Washington D. C. Millard W. Rice, Disabled American Veterans Service Foundation, 808 Seventeenth Street NW., Washington 9, D. C. Edgar C. Corry, Jr., corporation counsel, office of secretary of state, State of Iowa, Des Moines, Iowa. EMPLOYER REPRESENTATIVES Miss Bess Bloodworth, 143 East Nineteenth Street, New York 3, N. Y. John Lovett, general manager, Michigan Manufacturers' Association, 1900 H. S. Vance, chairman and president, the Studebaker Corp., South Bend 27, Ind. Frank de Vyver, vice president, Erwin Cotton Mills Co., Duke University, Durham, N. C. Marion Folsom, treasurer, Eastman Kodak Co., Rochester 4, N. Y. John A. Hall, Route 2, Ruhlman Road, Lockport, N. Y. C. V. Maddux, 4457 Alcott Street, Denver, Colo. Joseph A. Dunn, Capitol Contracting Co., 120 Bayswater Street, East Boston, Mass. James H. Schuler, vice president and director, Crown Drug Co., Kansas City, Mo. LABOR REPRESENTATIVES John Brophy, director, Industrial Union Councils, CIO, 718 Jackson Place NW., Washington 6, D. C. Harry Boyer, president, Pennsylvania CIO Council, Dauphin Building, Harrisburg, Pa. Nelson H. Cruikshank, director, Social Insurance Activities, AFL, 901 Massachusetts Ave NW., Washington 4, D. C. James L. McDevitt, president, Pennsylvania Federation of Labor, Federation Building, Front and Pine Streets, Harrisburg, Pa. H. L. Mitchell, president, National Farm Labor Union, AFL, 512 Victor Building, Washington, D. C. Paul Sifton, national legislative representative, UAW, CIO, 1129 Vermont Avenue NW., Washington 5, D. C. Mrs. Katherine Ellickson, assistant director of research, CIO, 718 Jackson Place NW., Washington 6, D. C. James Brownlow, secretary-treasurer of the Metal Trades Department, AFL, 901 Massachusetts Ave NW., Washington, D. C. Joseph M. Rourke, secretary-treasurer, Connecticut State Federation of Labor, room 405-408, Johnson Building, 1024 Main Street, Bridgeport 3, Conn. Frank Hoffman, legislative director, United Steelworkers of America, 718 Jackson Place NW., Washington 6, D. C. Mr. BYRNES. For the use of the members of the committee, I wonder if we could not also have copies of those various reports? Mr. FORAND. The clerk will try to get those for us. You may continue, Mr. Goodwin. Mr. GOODWIN. The standard also introduces some changes in the conditions that render work unsuitable. These conditions are found in all State laws in order to meet the existing requirements of section 1603 (a) (5) of the Internal Revenue Code, without which a State law may not be approved for an offset against the Federal tax. The most significant of these changes is that the conditions which render work unsuitable apply not merely to "new work," as at present, but to any work. This change is obviously necessary if the disqualification for leaving work is to apply to leaving work that is not "suitable." The standard also expands and clarifies the conditions which make work unsuitable. Thus, the prevailing wage standard of the present law is made applicable specifically to wage rates and weekly earnings. It also prohibits the denial of benefits if wages, hours, or other conditions. of work are in violation of law. Finally, it prohibits the denial of benefits to claimants who refuse work which will force them to resign from a bona fide labor organization or to join a company union, whether the condition is imposed by the employer or results from the operation of a union rule. The proposed standard authorizes disqualifications for gross misconduct connected with the last work which has resulted in conviction of a crime. This is somewhat narrower than the corresponding provision found in many State laws. It also permits a disqualification for claimants who wilfully make false statements or misrepresentations to obtain benefits and requires that State laws shall provide criminal penalties for such fraudulent claims. This is in recognition of the seriousness of fraud in a program of this kind. The restriction of disqualifications to the issues listed would prevent the States from denying benefits to or disqualifying claimants for other reasons. As a result, the right of claimants to benefits will be determined under the usual eligibility and disqualification provisions. If they have withdrawn from the labor market and are devoting their time to their homes and families, they will be unavailable for work. Thus, denials of benefits to those claimants will be based on the facts in each case rather than on an arbitrary disqualification. The proposed standards would authorize deductions for specified reasons from the amount of benefit otherwise payable. These conditions include the receipt of benefits under another unemployment compensation law and previous overpayments of benefits resulting from deliberate false statements. One of the most important aspects of the standards is that they limit the disqualifications which may be imposed for the specified causes. They prohibit any reduction or cancellation of benefit rights. for any reason. This standard thus is on all fours with the recommendation of the Advisory Council on Social Security to the Senate Committee on Finance of the Eightieth Congress that this type of disqualification be prohibited. Secondly, they limit the period for which the payment of benefits may be postponed. The maximum period of postponement varies, however, with the grounds for imposing the disqualification. In the cases of workers who are disqualified because they left suitable work without good cause, are discharged for misconduct connected with their last work, or refuse suitable work without good cause, the maximum postponement permitted is 6 weeks. A 6-week postponement under these conditions is probably the longest period during which it is reasonable to presume that the original disqualifying act continues to be the main cause of unemployment, as the Council on Social Security to the Senate Committee on Finance of the Eightieth Congress pointed out in its report. If a worker is unemployed at the end of 6 weeks from the date of the disqualifying act, it is reasonable to assume that if he is trying to get work his continued unemployment is due to industrial conditions which make it difficult for him to find another job. This standard not only limits the maximum postponement in these cases to 6 weeks, but it also specifies that the 6-week period must be the 6 weeks immediately following the disqualifying act. A 6-week postponement, however, is inappropriate when unemployment is due to a stoppage of work due to a labor dispute, other than a lock-out. On the one hand, unemployment due to this cause may be very brief; on the other hand, it may extend beyond 6 weeks. The postponement for this disqualification, therefore, should be flexible. Accordingly, the standard permits for the postponement of benefits for the period that the worker continues to be unemployed due to the stoppage of work. This period, in some circumstances, may be more limited than when benefits are postponed for the period that the dispute is "in active progress," as in 13 States, or for the period that the dispute is "in existence" in 2 States. Although in most cases, these varying periods are identical, in some instances a dispute may continue "in active progress" or "in existence," after the stoppage of work has ceased. A longer period of postponement is contemplated in those relatively few cases in which a worker has been disqualified for a discharge for gross misconduct connected with his last work that has resulted in a conviction of a crime or for deliberate misrepresentation to obtain benefits. A longer postponement of benefits in such cases should be permitted as a means of discouraging fraud, especially in the case of those who have attempted to obtain benefits, through deliberate misrepresentation. During the 13 years of its operation, the unemployment insurance program has been characterized by wide variations from State to State in (1) the degree of unemployment, (2) benefit payment provisions, (3) contribution rates of employers in the same industry with similar employment records, and (4) total benefit costs as a percentage of taxable wages. These variations have emphasized (1) the competitive advantages or disadvantages of the employers of one State in relation to those of another State, and (2) the differences in benefits received by workers in one State as compared with benefits received by workers with similar earnings in other States. At the inception of the unemployment insurance program it was believed that a tax rate of 3 percent of taxable payrolls would tend to act as an equalization factor with respect to costs and adequate benefits. The development of the program, however, has tended to accentuate rather than reduce differences among the States. The sharp rise in unemployment and the resulting benefit expenditure experience during 1949 gave rise to Federal and State concern with respect to the solvency of unemployment insurance funds in a |