which by the Organization Act of 1913 2 had the responsibility "to foster, promote, and develop the welfare of the wage earners of the United States, to improve their working conditions, and to advance their opportunities for profitable employment." While this action served as a genu• ine inducement to the States to estab• lish public employment offices, State systems could not be created immedi• ately since State legislative action was required. Meanwhile the inaugu• ration of a Nation-wide program of public works and expansion of work relief projects, which called for the selection and placement of several million unemployed workers, necessi• tated the establishment of employ• Reorganization Plan No. 1 of 1948: ment offices throughout the country. The National Reemployment Service, Legislative History and Background financed completely by Federal funds, was therefore established in the De• By Gladys R. Friedman* partment of Labor to place workers in Because of the considerable amount of interest in the rela• relief and public works jobs in areas tionship between the employment service and the unemploy• where no State service existed. In ment insurance program at the Federal level, the Bulletin be• June 1935, 2 months before the enact• lieves that this brief outline of the legislative background of ment of the Social Security Act, only Reorganization Plan No. 1 of 1948 will be of aid to persons 25 State services with 184 local offices who wish to study this phase of employment security had affiliated with the U. S. Employ• developments. ment Service.3 At the same time the National Reemployment Service was ON MARCH 16, 1948, the Senate, follow• dling the problem of unemployment operating 1,769 local offices,3 and Fed• ing action by the House, approved was the establishment of a national eral expenditures for the Service House Concurrent Resolution 131, system of public employment offices amounted to about two-thirds of the which provided for the disapproval of where workers could go to find suitable total expenditures for all employment the President's Reorganization Plan jobs and employers could obtain service activities in the country. No. 1 of 1948. This plan would have needed labor. This Federal legisla• transferred Federal unemployment in• The Committee on Economic Secu• tion preceded by 2 years the enact• rity, in its report4 to the President in surance functions to the Department ment of the Social Security Act. January 1935, recommended estab• of Labor and kept the United States The Wagner-Peyser Act,1 enacted in Employment Service permanently in June 1933, set up a national system of lishing a Federal-State system of that Department. The Social Security public employment offices to be ad• unemployment insurance and a Fed• Administration, in the Federal Se• ministered by the States with the eral system of old-age benefits to be curity Agency, thus retains the Fed• financial assistance of the Federal administered by a Social Insurance eral unemployment insurance func• Government. The United States Em• Board in the Department of Labor. tions that it has had since the passage ployment Service was created as a The Economic Security Bill, as intro• of the Social Security Act, and 6 separate Bureau in the Department of duced in both Houses on January 17, months after the official termination Labor; $1.5 million was appropriated 1935 (S. 1130, H. R. 4120 and 4142), of the war the U. S. Employment for the first year of operation and $4 embodied those recommendations. Service is scheduled to revert to the million for each of the next 4 fiscal The House Ways and Means Commit• Federal Security Agency, where it was years, $3 million of which was to be tee, after conducting public hearings, lodged from July 1939 to September used to match State appropriations reported out a new bill, H. R. 7260, the 1942. for State services and $1 million for Social Security Act, in which admin• the operation of the Federal arm, the istrative responsibility was lodged in Prewar Congressional Considera• U. S. Employment Service. At that an independent Social Security Board. tion time there was no question but that 2 37 Stat. 736, approved Mar. 4, 1913. The Federal Government's first at• the Employment Service should be lo• 3Annual Report of the Secretary of tempt at permanent provision for han- cated in the Department of Labor, Labor, Fiscal Year Ended June 30, 1935, p. 33. * Bureau of Employment Security, Pro• 4 Published also as H. Doc. 81, 74th Cong., gram Division. 1 48 Stat. 113. 1st sess. H. R. 7260, as reported by the Senate Many States during 1933-35 had A contrary view, however, was taken Finance Committee5 and as passed by placed administration of their public in the preliminary report of the Sen• the Senate, called for administration employment offices in the State labor ate Special Committee to Investigate by the Social Security Board but department. They now amended Unemployment and Relief, of which placed it in the Department of Labor. their laws to place these offices in the Senator James F. Byrnes was chair• In conference the Senate yielded, and same State agency that administered man. That report8 stated: the final act lodged administration of the unemployment insurance pro• "One of the greatest sources of com• both the social insurance and the pub• gram, because the division of author• plaint regarding the new system of lic assistance programs6 in an inde• ity, especially at the local employment unemployment compensation is the pendent Social Security Board. office servicing both programs, was fact that the all-important employ• The passage of the Social Security creating confusion and inefficiency. ment service which is to a large extent Act in 1935 and the enactment of State It soon became apparent that avail• responsible for the administration of unemployment insurance laws added able Wagner-Peyser funds could not unemployment compensation in most to our statutes the second permanent adequately finance the expanded sys• States is under the control, not of the provision for handling the problem of tem of public employment offices made Social Security Board, which has gen• unemployment. The administrative necessary by the unemployment in• eral supervision over State unemploy• expenses of the State unemployment surance program. As long as funds ment compensation, but of the Fed• insurance laws were to be met wholly were available, however, the Board eral Department of Labor . . . The from Federal grants derived indirectly required that the States appropriate Committee recommends in the inter• from the proceeds of the 0.3-percent money to match Wagner - Peyser est of efficiency and economy that the Federal unemployment tax collected grants before they could receive funds employment service now in the De• by the Federal Government. under title III of the Social Security partment of Labor be transferred to Administration of the unemploy• Act for the expansion of their employ• the Social Security Board in order ment insurance provisions of the So• ment services. As each State estab• that its work may be coordinated with cial Security Act had a tremendous lished a public employment service, the work of the Unemployment Com• effect in expanding and strengthening the National Reemployment Service pensation Division of the Board." the public employment services. Titles passed out of existence in that area In 1939 the need for unification at III and IX of the Social Security Act and, eventually, disappeared com• the Federal level was stressed in much specified that, to be approved by the pletely. of the testimony at the hearings of the Board for administrative grants and During the fiscal years 1936, 1937, House Ways and Means Committee, tax-offset credit, a State unemploy• and 1938, both the Social Security then considering changes in the Social ment insurance law had to provide Board and the Department of Labor Security Act, as well as at the hearings that all compensation is to be paid made Federal funds available for the of the Senate Special Committee to through public employment offices or operation of State public employment Investigate Unemployment and Relief. such other agencies as the Board may services. The fact that two Federal Finally, under President Roosevelt's approve. The Social Security Board agencies administered two separate Reorganization Plan No. 1, effective therefore had to decide immediately Federal laws affecting a single State July 1, 1939, the U. S. Employment whether the State agencies could use agency hampered administration of Service was transferred from the De• other agencies in addition to public the State systems and the smooth op• partment of Labor to the Social Se• employment offices in administering eration of the employment security curity Board and the Board was trans• their unemployment insurance laws. program. To avoid duplication, an ferred to the newly created Federal To strengthen the Nation-wide sys• agreement for coordination of the Security Agency. In his message9 tem of public employment offices, Federal functions was made on March transmitting his first plan on Govern• which the Board felt was imperative 30, 1937, between the Department of ment reorganization, President Roose• if the unemployment insurance pro• Labor and the Social Security Board. velt said: gram was to function effectively and Despite these efforts, however, the "I find it necessary and desirable to unemployment benefits were to be paid lack of integration at the Federal level group in a Federal Security Agency only when suitable jobs were not avail• became a matter of public concern. those agencies of the Government, the able, the Board took the position that A study of the structure and function major purposes of which are to pro• unemployment benefits should be paid of the Federal Government, published mote social and economic security, only through public employment of• in 1937 7 by the President's Committee fices. As a result, every unemploy• on Administrative Management, pro• educational opportunity, and the ment insurance law enacted by the posed that the Department of Labor health of the citizens of the Na• States provided for establishing a should "administer employment offices tion . . . The Social Security Board system of public employment offices and the Federal aspects of Federal- is placed under the Federal Security as an integral part of the program. State programs of social security 8 S. Rept. 1625, 75th Cong., 3d sess., Apr. where right rather than need is the 20, 1938, p. 10. 9H. Doc. 262, 76th Cong., 1st sess. 5 S. Rept. 628, 74th Cong., 1st sess. basis of payment to beneficiaries." These paragraphs also appear in Issues in 6 Except grants-in-aid for maternal and Social Security, a report to the House child welfare services, which were to be 7 Administrative Management in the Committee on Ways and Means by the administered by the Children's Bureau, Government of the United States, Janu• Committee's Social Security Technical then in the Department of Labor. ary 1937, p. 32. Staff, 1946, p. 683. Agency and at the same time the The War and Immediate Postwar functions of the Children's Bureau United States Employment Service is from the Department of Labor to the transferred from the Department of Period Federal Security Agency and abol• Labor and consolidated with the un• The period of administration of both ished the Social Security Board. employment compensation functions the U. S. Employment Service and Thus, all the grant-in-aid functions of the Social Security Board in order the unemployment insurance func• of the Social Security Act were con• that their similar and related func• tions by the Social Security Board was solidated in the Federal Security tions of social and economic security interrupted by the war. Twelve days Agency. may be placed under a single head and after Pearl Harbor, President Roose• their internal operations simplified velt 10 asked the States to transfer vol• Reorganization Plan No. 2 of 1947 and integrated. untarily their employment services to Under the terms of existing law, the "The unemployment compensation Federal operation for the duration of U. S. Employment Service was sched• functions of the Social Security Board the war. All States complied with the uled to revert to the Federal Security and the employment service of the President's request. Agency 6 months after the official ter• Department of Labor are concerned On January 1, 1942, when the States mination of the war. On May 1, 1947, with the same problem, that of the turned over the operation of their the President sent to Congress Reor• employment, or the unemployment, of State employment services to the Fed• ganization Plan No. 2 of 1947, pursu• the individual worker. eral Government, the Wagner-Peyser ant to the provisions of the Reorgan• Act with its matching grant provisions ization Act of 1945 approved Decem• "Therefore, they deal necessarily became inoperative, and the service ber 20, 1945. This plan placed the with the same individual. These par• was financed by direct Federal appro• U. S. Employment Service perma• ticular services to the particular in• priations. It remained federally op• nently in the Department of Labor, dividual also are bound up with the erated by the Social Security Board where it had been located temporarily public assistance activities of the So• until September 17, 1942, when by Ex• by Executive order under the First cial Security Board. Not only will ecutive Order No. 924711 under title War Powers Act. The plan thus pro• these similar functions be more effi• I of the First War Powers Act it was vided for permanent separation of ciently and economically adminis• transferred to the newly created War the employment service and unem• tered at the Federal level by such Manpower Commission; it remained ployment insurance at the Federal grouping and consolidation, but this there until September 19, 1945, when level. In his message14 to Congress transfer and merger also will be to again by Executive order (9617) 12 un• transmitting the plan, the President the advantage of the administration der title I of the First War Powers declared that he was deeply inter• of State social security programs and Act the War Manpower Commission ested in the continued development result in considerable saving of money was abolished and the United States of the Department of Labor, and he in the administrative costs of the gov• Employment Service was transferred went on to say: ernments of the 48 States as well as to the Department of Labor. The those of the United States. In addi• Service continued to function as a fed• "The provision of a system of public tion to this saving of money there will erally operated organization until No- employment offices is directly related be a considerable saving of time and vember 16, 1946. At that time, under to the major purpose of the Depart• energy not only on the part of ad• the terms of the 1947 Labor-Federal ment of Labor. Through the activi• ministrative officials concerned with Security Appropriation Act,13 the field ties of the employment office system this program in both Federal and operations were returned to the States. the Government has a wide and con• State Governments, but also on the The same legislation also provided for tinuous relationship with workers and part of employers and workers, per• a separate Federal appropriation to employers concerning the basic ques• mitting through the simplification of meet 100 percent of the expenses of tion of employment. To a rapidly in• procedures a reduction in the number the State services and specified that a creasing degree, the employment of• of reports required and the elimina• State need not make any appropri• fice system has become the central tion of unnecessary duplication in ation to match Wagner-Peyser grants exchange for workers and jobs and the contacts with workers and with em• until after July 1, 1948. primary national source of informa• ployers." tion on labor market conditions. In Meanwhile, on July 16, 1946, pursu• the calendar year 1946 it filled 7,140,- From July 1, 1939, to September ant to the Reorganization Act of 1945, 000 jobs, and millions of workers used 1942, the U. S. Employment Service President Truman's Reorganization its counsel on employment opportuni• was administered by the Social Se• Plan No. 2 of 1946 became effective. ties and on the choice of occupations. curity Board. To reflect the expanded Among its provisions the plan trans• "The Labor Department obviously activities of job placement as well as ferred the maternal and child welfare should continue to play a leading role benefit payments, the name of the 10 See Issues in Social Security, pp. 693- in the development of the labor mar• Board's Bureau that was responsible 694, for text of the President's telegram ket and to participate in the most basic for both the unemployment insurance of December 19, 1941, to the Governors. and employment service functions was u Ibid., pp. 694-695, for text of Executive of all labor activities—assisting work• changed from Bureau of Unemploy• order. ers to get jobs and employers to obtain 12 Ibid., pp. 695-697. labor. Policies and operations of the ment Compensation to Bureau of Em• 13 Public, 549, 79th Cong., 2d sess. (H. R. ployment Security. 6739). 14 H. Doc. 231, 80th Cong., 1st sess. Employment Service must be deter• Agency, the job-placement function "It is true that at the State level mined in relation to over-all labor would be subordinated to the payment the unemployment compensation and standards, labor statistics, labor train• of unemployment benefits. employment services are generally ad• ing, and labor law—on all of which "No other witnesses concurred in ministered by the same personnel in the Labor Department is the center this fear. The fact of the matter is the same office. It is desirable that of specialized knowledge in the Gov• that such subordination would have they do so, for their services are com• ernment. Accordingly, the reorgani• to take place at the operating level— plementary. The worker comes to zation plan transfers the United in the States—in any event. those offices to secure a job or to ob• States Employment Service to the De• "The great weight of the evidence tain compensation while finding work. partment of Labor." is to the effect that social security ac• No such reasons prevail at the Fed• The House Committee on Expendi• tivities, which concern all the people— eral level. Congress has provided tures in the Executive Departments employers, employees, and generally separate Federal grants for employ• held hearings on the plan from May the public—should be consolidated in ment service and unemployment com• 21 to 27. Mr. Hoffman, for the Com• one neutral agency. The committee pensation, and the costs of the two mittee, reported favorably on House believes it would be as great a mistake programs must be segregated to de• Concurrent Resolution 49, "that the to place the Employment Service un• termine grants. Congress does not favor Reorganiza• der the jurisdiction of the Department "Obviously, the objective should be tion Plan No. 2 . . .," on the ground of Labor as to place it under the De• to find the unemployed worker a job that the reorganization plan would partment of Commerce." rather than to pay benefits. With the provide for separation of employment On June 10, after a 3-hour debate, Employment Service in the Labor De• service and unemployment insur• the House upheld the concurrent reso• partment and solely concerned with ance at the Federal level and that lution disapproving the President's re• the development of placement serv• turning down the plan would mean organization plan. ices, that program is more certain to that the employment service would The Senate Subcommittee on La• receive vigorous leadership than if it eventually revert to the Federal bor of the Committee on Labor and were supervised by a Federal agency Security Agency, where it should be Public Welfare held hearings on June mainly interested in the administra• lodged. The report15 stated: 16 and 17 and reported unfavorably on tion of social insurance. Also, there "1. The Bureau of the Budget, the concurrent resolution on June 20, is less possibility of neglecting the while favoring the recommendation of thus supporting the President's reor• placement needs of the large groups the President, indicated that its pro• ganization plan.16 The Subcommittee of workers who are not covered by fessional staff differed as to the solu• based its action on the grounds that unemployment compensation. tion of this organization problem. the employment service was a labor "The State administrators who tes- "2. The Department of Labor's function and should remain with other tified before the committee recom• representatives favored the consolida• such functions in the Department of mended that the United States Em• tion of the two functions in one Labor. Senator Ball for the Commit• ployment Service be permanently agency and expressed the opinion that tee declared: placed in the Federal Security Agency. the Department of Labor could ad• "Employment service is a labor All admitted, however, that there had minister more efficiently the two func• function and clearly comes within the been excellent cooperation in the tions than any other agency of the basic purposes of the Department of working out of uniform regulations Government because of the related Labor as defined by its organic act. No between the Department of Labor and programs having to do with labor sta• governmental activity is more directly the Federal Security Agency, and no tistics and other labor laws. designed to 'foster, promote, and de• complaint with respect to either was "3. The representatives of the velop the welfare of the wage earners advanced." Federal Security Agency believed that of the United States and advance their Three members of the Subcommit• the administration of the unemploy• opportunities for profitable employ• tee (Senators Ives, Jenner, and Don- ment compensation laws should re• ment' than the maintenance of a nell) issued a minority report. The main, as at present, related to the placement service to assist them in report held that the employment serv• administration of social security laws. finding jobs and employers in obtain• ice and unemployment insurance pro• "4. The representatives of the ing workers. grams should be administered by a State bodies administering these two "The work of the Employment Serv• single Federal agency, declaring: programs expressed the belief that ice ties in with that of a number of "It appears obvious that every pur• more efficiency and economy would be other units of the Labor Department, pose would be best served by consoli• obtained by consolidating the two and there is a two-way flow of tech• dation of the two services under one functions. . . . nical information and assistance be• head. The chief argument of the "The chief argument of the Federal tween them. The Division of Labor Federal officials urging the permanent officials urging the permanent trans• Standards, the Women's Bureau, and transfer of United States Employment fer to the Department of Labor was the Bureau of Labor Statistics all per• Service to the Department of Labor form functions which require coopera• was apprehension that in the Federal the fear that, in the Federal Security tion with the Employment Service. Security Agency the job-placement 15 H. Rept. 499, 80th Cong., 1st sess., to function would be subordinated to the accompany H. Con. Res. 49. 16S. Rept. 320, 80th Cong., 1st sess. payment of unemployment benefits. The minority agrees that in any con• programs and provide for a single Fed• should await the report of the Com• solidation emphasis should, and could, eral review with respect to such re• mission on Organization of the Execu• be placed upon the work of the Em• quirements." tive Branch of the Government." ployment Service." In his message17 transmitting the Eight members of the Committee After debate, the Senate on June 30 plan, President Truman said: issued a minority report holding that upheld the concurrent resolution and "This plan will place the adminis• the proper place to lodge both func• turned down the reorganization plan tration of the employment service and tions is in the Department of Labor by the close vote of 42-40. unemployment compensation func• because other functions of that De• Congressional consideration of Re• tions of the Federal Government in partment are closely related to em• organization Plan No. 2 clearly indi• the most appropriate location within ployment service and unemployment cated that it was the intent of Con• the executive establishment and will insurance functions. The report gress that both the unemployment provide for their proper coordina• stated: insurance and employment service tion. ... functions should be lodged in the same "Both the Employment Service and "Both the majority and the minor• Federal agency. It did not settle defi• the unemployment compensation sys• ity agree that both these programs nitely what Federal agency that tem are concerned with the worker as should be together in the same de• should be, although disapproval of a member of the labor force. Both are partment of Government. They fur• the reorganization plan left the U. S. concerned with shortening the periods ther agree that finding an unemployed Employment Service scheduled to re• of unemployment and with promoting worker a job is more important than vert to the Federal Security Agency 6 continuity of employment. When the to pay him unemployment benefits. months after the termination of the worker becomes unemployed, the al• No one questions that the job-finding war. ternatives are either to assist him in function is a proper responsibility of obtaining new employment or to pay the Department of Labor. In fact, Reorganization Plan No. 1 of 1948 him benefits. The proper emphasis is the basic legislation creating the President Truman on January 19, on employment rather than on benefit United States Department of Labor 1948, sent to Congress Reorganization payments. This emphasis can best be states that 'the purposes of the De• Plan No. 1 of 1948. This plan pro• achieved by having the two programs partment of Labor shall be ... to vided that the United States Employ• administered in the agency most con• advance their [workers'] opportuni• ment Service be retained permanently cerned with the employment process— ties for profitable employment.' in the Department of Labor and that the Labor Department." "It should be perfectly apparent to the functions of the Federal Security The following day, January 20, Rep• everyone that the Department of La• Administrator in relation to unem• resentative Hoffman introduced House bor cannot effectively carry out its ployment insurance be transferred to Concurrent Resolution 131 turning statutory obligation without some re• the Secretary of Labor. It also pro• down the reorganization plan. It was sponsibility for the only Nation-wide vided for transfer of the Bureau of referred to the Committee on Expend• agency established specifically for the Employment Security from the Fed• itures in the Executive Departments, purpose of bringing workers and jobs eral Security Agency to the Depart• which held hearings on the plan on together. There was not the slightest ment of Labor and for integration February 5-7. On February 9 the shred of evidence presented in the of the employment service and unem• Committee reported favorably on the hearings to refute the well-substanti• ployment insurance programs in one concurrent resolution—in other words, ated fact that both the unemployment Federal agency. The order went fur• disapproving the reorganization plan. compensation and the employment ther, however. It called for the crea• Its report,18 signed by 15 Committee service programs are directly related tion of the position of Commissioner members, stated: to other functions conducted by the of Employment, who would be ap• "Because the Department of Labor United States Department of Labor, pointed by the Secretary of Labor was created to and must, of necessity, such as the programs of Apprentice and perform such of the transferred be an advocate of labor, and because a Training Service, the Division of La• functions as the Secretary of Labor nonpartisan commission, on which the bor Standards, the Women's Bureau, should designate. It extended the public, the executive departments, and and the Bureau of Labor Statistics. jurisdiction of the Federal Advisory the legislative departments are ade• The minority fails to find any rela• Council created by the Wagner-Pey• quately and competently represented, tionship whatsoever between either ser Act to cover unemployment insur• is now engaged in spending almost a the unemployment compensation or ance matters. It also provided that million dollars in a study involving the the United States Employment Service "in order to coordinate more fully the same subject outlined in Reorganiza• program and education, public health, grant-in-aid programs under the tion Plan No. 1 of 1948, that plan cancer control, public assistance, in• functions transferred by the provi• should be rejected. The Congress fant and child care, food and drug sions of this plan the Secretary of administration, St. Elizabeths Hospi• Labor shall, insofar as practicable, 17 H. Doc. 499, 80th. Cong., 2d sess. Re• tal, and similar programs adminis• establish or cause to be established printed in Hearings Before the House tered by the Federal Security uniform standards and procedures re• Committee on Expenditures in the Execu• lating to fiscal, personnel, and other tive Departments, 80th Cong., 2d sess., on Agency. . . . requirements common to both such H. Con. Res. 131, pp. 1-2 (1948). "The view has been expressed by 18 H. Rept. 1368, 80th Cong., 2d sess. members of the majority that no ac- tion should be taken on the reorgan• It recommended that the reorganiza• tee realizes that the Commission's de• ization of Government agencies until tion plan pass, on the ground that, liberations will not be completed until such time as the report of the Hoover since there was agreement that both 1949 and that considerable additional Commission becomes available. It unemployment compensation and the time must necessarily elapse before was stated that the President's reor• employment service should be ad• its recommendations could be imple• ganization plan is a usurpation by the ministered by the same Federal mented. The committee believe it de• Executive of legislative responsibili• agency, they should be lodged in the sirable, and it was so testified to by ties. Such a view fails to take account Department of Labor where they both State and Federal officials, that of the fact that the President's reor• would be more directly related to the employment service and unem• ganization plan conforms with the ob• other labor functions than they would ployment compensation programs be ligations specifically placed upon him in any other department of Govern• brought together in the Federal Gov• by the action of the Congress in the ment. In so reporting, the Senate ernment without further delay. Reorganization Act of 1945. And, Committee, like the House, followed Finally, the committee would point furthermore, it is significant to note, the same action it had taken the pre• out that in rejecting Reorganization as was pointed out in the testimony ceding year on Reorganization Plan Plan No. 2 last year, the principal ob• on the Reorganization Plan No. 2, of No. 2 of 1947. jection to placing the United States last year, that in 1937 there was a The Committee report19 made the Employment Service permanently in President's Committee of Administra• following points: the Department of Labor was that the tive Management, comparable to the "The unemployment compensation two programs were not placed to• Hoover Commission, which studied the and employment service programs are gether in the same department. This functions and proper organization of more directly related to other func• position obviously is no longer tenable the Federal Government. That com• tions of the Department of Labor than and the committee finds no basis for mittee in its report drew a sharp dis• to the functions of any other depart• further procrastination." tinction between governmental func• ment of the Government. . . . Three members of the Committee tions based upon needs and those con• "In essence, therefore, the principal (Senators Jenner, Ives, and Taft) dis• cerned with rights. That committee opposition to the reorganization plan sented, on the ground that both pro• stated that programs based upon boils down to an expression of fear grams should be lodged in a depart• rights, such as unemployment com- that the Department of Labor, ment that has the confidence of em• pensation and the employment service, through the Secretary of Labor, ployers as well as labor, that the un• properly belong in the Department of would be biased and prejudiced in its employment insurance and employ• Labor, while programs dealing with actions. It has also been alleged by ment service functions are more di• need, such as old-age pensions, pub• opponents of the plan that because of rectly related to other activities of lic relief, child care, and public health alleged bias of the Department of the Federal Security Agency than to properly belong in a department of Labor, employers will not use the pub• those of the Department of Labor, welfare. . . . lic employment offices of the Employ• and that greater economies would re• "All State administrators who tes• ment Service. There is no basis of sult by location in the Agency. Their tified were agreed that in the inter• fact to support this position. No tes• minority report declared: ests of a sound, well-functioning sys• timony before the committee reveals a "The Department of Labor was cre• tem of public employment offices and single instance, or any other concrete ated for the express purpose of foster• unemployment compensation, it is de• evidence, to support the fear that ing, promoting, and developing the in• sirable and necessary that the two pro• prejudice would govern the ac• terests of labor and, accordingly, is a grams be brought together in the Fed• tions of the Department of Labor protagonist of labor. It does not pro• eral Government without further in administration of the subject fess to give official recognition or rep• delay." programs. . . . resentation of the employer's view• "In light of the foregoing considera• point. . . . After debate in the House on Febru• tions, it is the view of the committee ary 25 the concurrent resolution was that Reorganization Plan No. 1 of "It is the opinion of the minority agreed to and the President's reor• 1948 should be approved, and that that the subject programs are related ganization plan disapproved. The House Concurrent Resolution 131 to a larger number of activities cur• opponents and proponents of the re• should be rejected. In coming to this rently under the jurisdiction of the organization plan made arguments conclusion, recognition has been given Federal Security Agency than is true similar to those incorporated in the to the existence of the Commission on of their relationship to activities report of the Committee. Organization of the Executive Branch under the Department of Labor. . . . A subcommittee of the Senate Com• of the Government, established under "Evidence before the committee mittee on Labor and Public Welfare, provisions of Public Law 162, Eigh• does not, in the opinion of the minor• to which House Concurrent Resolu• tieth Congress, first session. With all ity, indicate that the reorganization tion 131 was referred, conducted hear• due regard to the purposes and pro• plan, if effectuated, would 'reduce ex• ings on it on February 27 and 28. Its gram of the Commission, the commit- penditures and promote economy to report, issued on March 4, was against the fullest extent.' . . . adoption of the concurrent resolution. 19 S. Rept. 967, 80th Cong., 2d Bess. "There is another compelling rea- son why Reorganization Plan No. 1 of would be required should the Com• 1948 should not be approved at this mission make any recommendations time. The whole question of the or• further affecting the location and op• ganization of the executive branch of eration of these agencies." the Government is now being studied On March 16 the Senate debated by a commission specifically created House Concurrent Resolution 131, ap• for that purpose by Public Law 162, proving it by a vote of 58 to 25 and of the first session of the Eightieth thus defeating the President's Reor• Congress. . . . ganization Plan No. 1. Under existing "Any loss of economy or efficiency statute the U. S. Employment Serv• resulting from continued separation ice is scheduled to revert to the Fed• of the United States Employment eral Security Agency 6 months after Service and the Bureau of Employ• the official termination of the war, ment Security for the next few months when the unemployment insurance would be more than offset by the ex• and employment service functions will pense and confusion of a later re• once more be lodged in the Federal shuffling of these functions, which Security Agency.