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Mr. Chairman, I thank you for the opportunity.

Mr. Rich. You say it is unconstitutional. Can you cite your reasons why it is unconstitutional ?

Mr. STINSON. Mr. Chairman, I was reading Mr. Green's telegram, or at least his letter.

Mr. Rich. He has access to legal talent and anyone that says a thing is unconstitutional-I am no lawyer-I would like to know why it is unconstitutional. I swore to uphold the Constitution of the United States, and I do not want to do anything that is unconstitutional. If Mr. Green has any legal talent in his organization, they ought to submit a small brief on that as to why it is unconstitutional.

Mr. STINSON. I, like yourself, am not a lawyer. We had an illustration this morning of where one member of the Judiciary Committee appeared before this committee and expressed an opinion in behalf of said committee that this provision was illegal. Mr. Whittington, however, takes exception. You would not expect me as a layman to attempt to defend this particular provision.

Mr. Rich. I would expect you to have business ability enough to ask Mr. Green to give us their legal reasons why it is unconstitutional

Mr. STINSON. I think that can be done. Thank you very kindly. Mr. WHITTINGTON. We are glad to have had your statement.

I think the chairman of that Commission is one of the most efficient persons in the Government.

Mr. STINSON. We agree with you on that.

Mr. WHITTINGTON. The next witness is Mr. Twait, railway asso. ciation clerk.

STATEMENT OF OLE TWAIT, VICE PRESIDENT, RAILWAY MAIL

ASSOCIATION Mr. Twait. My name is Ole Twait, vice president of the Railway Mail Association.

Mr. Chairman and gentlemen of the committee, our association has a membership of 23,297 railway postal clerks who perform service in traveling railway post office cars, highway post offices, transfer offices, air mail field and terminal railway post offices and in offices of field officials.

The railway mail service may be defined as the arteries of the postal service, embracing the distribution of transit mail carried over the railway systems, highway post office routes and air routes. It is an around-the-clock job as continuous distribution must be performed during each 24-hour period. A total of 13,970 railway postal clerks perform service on railroad trains where the element of hazard to injury while on duty is always present.

The United States Employees' Compensation Act was approved September 7, 1916, and provides for the payment of compensation for disability or death of an employee resulting from a personal injury sustained while in the performance of his duty.

The Commission is an independent agency of the Government and is administered by three bipartisan members who exercise and perform quasi-judicial functions. It has operated efficiently, capably and economically for a period of approximately 30 years. The interests of

the Government and the welfare of the employees have been zealously protected and administered during all of this period of time.

It is not proposed under the provisions of Reorganization Plan No. 2, to abolish the three-member bipartisan commission and place the administration of this independent agency of the Government under the jurisdiction of a Federal Security Administrator who would set up a Board of Appeals composed of three members who would make final decisions on appeals from determinations and awards in Government employees' compensation cases.

Why is it desirable to abolish this independent agency which has functioned so efficiently since its creation by the Congress! No economy in cost of operation is involved. No elimination of overlapping functions between the existing agency and other departments of the Government would take place because none exist at the present time. The Commission handles only cases involving compensation resulting from injuries sustained while on duty. By what process of reasoning can it be asumed that this agency will function more efficiently under a Federal Security Administrator and a three-member Board of Appeals, when the record clearly shows competent, capable and economical administration during the past 29 years?

It has been the experience of railway postal clerks throughout the years that have elapsed since September 7, 1916, that the United States Employees' Compensation Commission has administered this law in a fair, equitable and impartial manner.

We, therefore, respect fully request that the proposal in plan No. 2 to abolish the three-member bipartisan Commission be not concurred in by the Committee on Expenditures in the Executive Departments and that Senate Concurrent Resolution 65 or House Concurrent Resolution 151 be approved.

Mr. WHITTINGTON. We are glad to have had your statement.

Mr. WHITTINGTON. Mr. Howard M. Starling, Association of Casualty and Surety Executives. Mr. Starling.

STATEMENT OF HOWARD M. STARLING, MANAGER, WASHINGTON

OFFICE, ASSOCIATION OF CASUALTY AND SURETY EXECUTIVES

Mr. STARLING. I am manager of the Washington office, Association of Casualty and Surety Executives, an organization composed of 68 stock casualty and surety companies, practically all of whom are licensed by the United States Employees' Compensation Commission to write insurance under the Longshoremen's and Harbor Workers' Act and the District of Columbia Compensation Act. We wish to submit a statement in opposition to the President's Reorganization Plan No. 2 and in support of House Concurrent Resolution No. 151.

Mr. WHITTINGTON. You object to the whole works, or just some part of it?

Mr. STARLING. We object only to the transfer of United States Employees' Compensation Commission. I may be laboring under a misapprehension, but I understood the President's plan was not subject to amendment.

Mr. WHITTINGTON. I want to know if you object to the whole works or just some part of it!

Mr. STARLING. Only section 3.

Mr. Rich. If the plan No. 2 is not in accordance with your views in one particular, it has to be rejected as a whole in order that the President may have the complaints that you register here, and if he wants to submit another plan, then he has that privilege.

Mr. STARLING. That is correct.

Mr. WHITTINGTON. If we just make one mistake in that plan, you will not think too hard of us?

Mr. STARLING. One mistake can be an awfully bad mistake sometimes.

Plan No. 2 transfers the functions of the United States Employees' Compensation Commission to the Federal Security Agency. It also makes certain other changes in the powers and functions of that agency, including abolition of the Social Security Board and the transfer of its functions to the Federal Security Administrator. .

The United States Employees' Compensation Commission, largely through Deputy Commissioners, administers the Longshoremen's and Harbor Workers' Compensation Act, the District of Columbia Compensation Act, and the compensation act covering outlying defense bases. As part of its duties under these acts, it determines what employers shall be authorized to self-insure their compensation liability and what insurance companies shall be permitted to write insurance under these acts. It also administers the United States Employees' Compensation Act covering Government employees.

The plan makes no specific provision concerning the hearing of cases under the first-named acts before Deputy Commissioners and does not make clear whether such Deputy Commissioners will be retained, and if so, under whose jurisdiction they will function. Since the functions of the United States Employees' Compensation Commission are transferred to the Federal Security Agency, presumably all administrative duties now carried on under the jurisdiction of the Commission would be transferred.

The Reorganization Act of 1945 gave the President broad powers to reorganize agencies of the Government, but primarily for the purpose of reducing expenditures, increasing efficiency and facilitating orderly transition from war to peace.

Plan No. 2 would be detrimental to efficiency. Compensation administration is a specialized field which requires long years of study and experience. The United States Compensation Commission created in 1916 possesses this experience and has done an eminently satisfactory job from the standpoint of the injured employee, the employer, and the insurance carrier. The Federal Security Agency, however, has performed no functions in the field of workmen's compensation. At least temporarily, confusion is bound to result in the administration of these laws during reorganization. The plan does not indicate whether deputy commissioners, before whom claims are now heard, shall be retained. Possibly, the Security Agency may wish to transfer their duties to its existing branch offices. Adjudications of claims, therefore, is bound to be delayed to the detriment of employers and employees. Whether ultimately the Federal Security Agency, which has so many other interests and no experience in this field, will be able to accomplish efficient administration of these compensation laws, may be seriously questioned.

Delay in the adjudication of these compensation claims would tend to delay final adjustment of cost-plus-fixed-fee contracts, since such liability is a proper item of .cost. Thus, orderly transition from war to peace would tend to be delayed rather than facilitated.

Plan No. 2 would not promote economy either. The plan provides for the creation of an Appeal Board of three persons to make final decisions on claims by Government employees. Since this is an Appeal Board, presumably claims will originally be heard by hearing officers. Moreover, other administrative functions will, presumably, have to be performed by the Federal Security Administrator or some other person to whom such duties would be delegated. Thus, with respect to Government employees' claims, the duties of a three-man commission, which now hears all claims and makes final decisions, would be split up among five or more persons.

Such a division of function does not seem to be consistent with economy.

The plan is not sufficiently definite with respect to claims under the other acts within the Commission's jurisdiction to permit its accurate appraisal as an economy move. Administrative costs under these acts, however, are largely determined by the number of claims presented and these would not be affected by the proposed change. It is unlikely, moreover, that an agency inexperienced in the field of workmen's compensation could administer the laws more economically than a Commission whose functions have for many years been exclusively devoted to this field.

The message which tells how the plan is to be implemented, and describes the object of the plan, states that

By abolishing the Commission, the plan eliminates a small agency and lightens the burden on the President.

The message further states that the Federal Security Administrator is in the best position to guide and further the program of the Commission (as the Commission is abolished reference to "the Commission" is not clear), because such Administrator isthe head of the Federal agency with the greatest experience in insurance administration.

The reason for abolishing the Commission because it is a "small agency” apparently is insufficient reason of itself under section 2(a) of the act because the reduction of agencies rests upon the consolidation of those having similar functions. No other agency in the Government performs similar functions to that of the Commission and its functions do not overlay those of any other agency, and as above pointed out, no assumption of reduced expenditures appears. The reference to lightening the burden on the President as the reason for abolishing the Commission is not an assigned statutory reason and what those burdens are does not appear.

Plan No. 2 is a step in placing workmen's compensation within the Federal Security system. This plan would for the first time bring workmen's compensation within the scope of the Federal Security Agency. It would place within that Agency authority over self-insured employers and insurance companies since such Agency would have the power to determine what employers are to be permitted to self-insure and what insurance companies would be permitted to write such workmen's compensation insurance. This agency up to the

pres

ent has not exercised such supervision and is not fitted either through experience or organization to exercise it.

Plan No. 2 contravenes the provisions of the Reorganization Act of 1945. This plan contravenes subsection 6a of section 5 of the Reorganization Act of 1945. This subsection prohibits, in reorganization. plans, any "greater limitation upon the exercise of independent judgment and discretion, to the full extent authorized by law,” in carrying out quasi-judicial functions than that which existed with respect to the exercise of such functions by the agency in which it was vested prior to the reorganization.

The United States Employees' Compensation Commission is required by law to be a three-member governing bipartisan body. The transfer of its functions to a single administrator, head of the Federal Security Agency, constitutes a greater limitation on the exercise of independent judgment than is authorized under present law, since it would not represent bipartisan judgment.

With respect to claims by Government employees, the present Com mission passes on the merits of individual original claims. Under the plan the independent judgment and discretion of the three members will be abolished and the judgment of a single hearing officer be substituted therefor and this judgment would be further subject to the views of the three-man appeal board which is not specified to be bipartisan and provision for which is not made in the law.

The plan does not specify who shall pass on claims under the Longshoremen's Act over which the Commission now has direct supervision, such as lump-sum settlements. However, the elimination of bipartisan judgment with respect thereto would seem, in itself, to constitute a greater limitation upon the exercise of independent judgment than is now provided by law.

It is respectfully submitted that for the foregoing reasons Reorganization Plan No. 2 of 1946 should be disapproved.

Mr. WHITTINGTON. The committee stands adjourned subject to the call of the chairman.

(Whereupon, at 11:50 a. m., the committee adjourned, to reconvene at the call of the Chair.)

(The following was submitted for the record :) STATEMENT OF WILLIAM GREEN, OF THE AMERICAN FEDERATION OF LABOR, IN

SUPPORT OF A PERMANENT UNIFIED NATIONAL HOUSING AGENCY PRESENTED TO THE HOUSE COMMITTEE ON EXPENDITURES IN THE EXECUTIVE DEPARTMENTS JUNE 13, 1946

The American Federation of Labor strongly and wholeheartedly supports the proposal to establish a permanent National Housing Agency responsible for the coordination and general supervision of the main activities of the Government relating to housing. Congress must not retreat to the confusion and diffusion of Government housing activities which existed prior to the establishment of the temporary National Housing Agency in February 1942. Before consolidation, prompted at that time by the emergency of war, a multiplicity of Federal agencies concerned in housing engaged in rivalry, competition, and open strife. Housing administration was in a state of chaos. Wartime reorganization, placing the various Federal bureaus dealing with housing under a single National Housing Agency, brought harmony in place of confusion, economy in place of waste, and efficiency in place of disorderly government. To destroy the unity of administration and to return the administrative conflict bred of multiplicity will indefinitely postpone the solution of our present housing emergency and make impossible the postwar housing goal of a decent home for every American family

Wartime housing experience taught us the vital need for the coordination of

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