Evening star., 1947-04-13
Federal En,pl yfnent
Service Undermined
State Commissioners Lobbying
Blamed for Threatened Cut
n, f.er0rd n Pci1Ju
Bu Gerard d. Reilly.


One of the least publicized but most
successful Hobbies IN Washington is that
maintained by the State Unemploy-
ment Compensation Commissioners. 1t
has the rare distinction OF being sub
/ sidized with Federal funds to carry on
Its principal activity which ironically
enough Is to work against the Federal
interest. Its most recent accomplish
iment has been to persuade the House
Appropriations Committee to destroy
the effectiveness Of the United States
Employment Service at time when
the problem OF coping with labor short
ages in some areas and unemployment
in others makes imperative the con-
tinuance OF q truly national system OF
public employment exchanges.
This is not the first blow this agency
has suffered from the activities of this
group. Created in 1888. pursuant to an
act of Congress sponsored by Senator
Wagner, the United States Employment
Service was one of the first noteworthy
, measures undertaken by the Roosevelt
administration to combat the depression.
It was established as bureau in the
Department of Labor and given author
ity to match appropriations made in the
States for public employment Offices
which conformed to certain standards
OF operation and personnel prescribed
by the director. 1t was also authorized
to operate on a Federal basis farm
placement service and veterans place
ment service. The first director, w.
Frank Persons, strong and resource
full administrator, was able to get the
new agency organized in sufficient time
to handle the placement Of millions of
unemployed workers on PWA and WPA
projects. The high personnel standards
which he imposed on the States were
entirely free from political considera-
tions, and until he relinquished the
helm, the service managed to keep re-
ferrals to relief projects relatively free
from patronage.
When the Social Security Act was
passed, it left the States free to admin
lister their own State unemployment
compensation systems, although all pay
foil taxes were levied and collected by
the Bureau of Internal Revenue. The
statute did require, however, that pay
ments be made through the public en-
ployment Offices then under Persons
jurisdiction A move then got under
way to make the Social Security Board
the co-ordinator of the employment
services as well as the relatively auton-
omous State unemployment compensa-
ton agencies. The move was resisted
by Persons who realized that the pri-
mary purpose of his agency, that of
finding jobs. would be overlooked if the
State employment offices were placed
under agencies whose duty was merely to
certify claims.
OF course, the underlying motive OF
the State agencies was to free themselves
of the tight controls exercised by Per-
sons and thereby acquire vast amount
of political patronage. 1t was at this
stage of the contest that the Social Sc
curity Board created Frankenstein
which it has since had cause to regret.
The unemployment compensation COM
missioners were formed into a commit
tee, given Government travel vouchers
and permitted to swarm into Washing
ton. In 1889 the Employment Service
was taken out of the Department of
Labor and transferred to the Social Sc
curity Board. There its identity as an
autonomous bureau was completely
shattered. The local Offices were made
subordinate to the State unemployment
compensation commissions and the CO.
ordinating officials in Washington were
placed under new bureau" which
Congress had never created, called the
Bureau of Employment Security.
Personnel standards were Immediately
relaxed and the placement function was
completely submerged in the routine
duties of taking claims. The Social Sc
curity Board soon realized Its mistake
for it discovered that its sporadic efforts
to maintain some semblance of decent
administration at the local level encoun-
tered fierce resistance. The appearance
of this lobby before the House Sub
committee on Appropriations to protest
any Federal interference with how they
spent Federal money became an annual
event. On these occasions it was inti-
mated by the subcommittee that the
Social Security Board should authorize
travelling expenses of the delegation even
Al -, t.o TTv,if al
Code forbids the expenditures of any
Federal money to influence the action
of Congress with respect to an appro-
priation.
With the impact Of the war and the
necessity of mobilizing the industrial
manpower of the Nation for production,
it became apparent that the United
States, had no effective agency for
carrying out the task. Although the
Wagner-Peyser Act was still on the
books, the old United States Employ
ment Service had been broken sup into
48 insulated compartments, oblivious
and indifferent to what the other COM
partments were doing. 1t therefore be-
came necessary for the President to issue
a reorganization order under the War
Powers Act re-establishing the Employ
ment Service and transferring it to the
War Manpower Commission. The lobby
was again on the job, however, and sue
ceeded in making the resuscitation of the
agency only partial by getting the House
subcommittee to attach rider which
kept in effect the State salary classifica-
tions. Since most of these were far
below the level of the war agencies as
we'll as war industries, the turnover in