Robert C. Goodwin Oral History Interview

Notice
This is a transcript of a tape-recorded interview conducted for the Harry S. Truman Library. A draft of this transcript was edited by the interviewee but only minor emendations were made; therefore, the reader should remember that this is essentially a transcript of the spoken, rather than the written word.

Numbers appearing in square brackets (ex. [45]) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.

RESTRICTIONS
This oral history transcript may be read, quoted from, cited, and reproduced for purposes of research. It may not be published in full except by permission of the Harry S. Truman Library.

Opened October, 1985
Harry S. Truman Library
Independence, Missouri

[1]

FUCHS: Mr. Goodwin, to start, scholars might be interested in a bit of your background; when and where you were born, your education and your experiences until you came into the Truman administration.

GOODWIN: Well, I was born in Idaho and had my early education there. I graduated from Whitman College in the State of Washington. I took graduate work in public administration at the University of Cincinnati and went from there to work with the city of Cincinnati. I was in charge of the State-City Employment Service then for a short time; part of it was when I was still in school. It was a co-op course in the school -- University of Cincinnati -- and I worked with the city during that period.

[2]

FUCHS: Were you studying public administration?

GOODWIN: Yes, public administration. I ended up as the Welfare Director for Cincinnati and Hamilton County. I was in that for a couple of years. Then I went with the Social Security Board in 1937. I went as regional representative of the Bureau of Public Assistance, and then a couple of years later was promoted to Regional Director in Cleveland for the Social Security Board. From that I became Regional Director of the War Manpower Commission. The Executive Director of the War Manpower Commission died in 1944, and I came to Washington as Executive Director of the War Manpower Commission.

FUCHS: This was directly under McNutt?

GOODWIN: That's right. The war only lasted about six months after that, and I stayed on as Director of the Public Employment Service. It, of course, had been the operating arm of the War Manpower Commission during the war. Then in 1948 we were

[3]

transferred to the Federal Security Agency from the Department of Labor. The agency was combined with Unemployment insurance, and I was made Director of the newly-combined agency.

FUCHS: Did you favor that move of the Labor Department?

GOODWIN: We were in the Federal Security Agency only one year, and President Truman transferred us back to the Labor Department by Executive order. We stayed in the Labor Department.

FUCHS: That transfer to the Federal Security Agency of this new bureau, known as the Bureau of Employment Security, occurred right after Schwellenbach died. Do you think it would have happened if he had lived or was this all in the works at the time?

GOODWIN: Well, my guess is it would have happened because our transfer to the Federal Security Agency was done by the Congress and it was -- I think I'm right in this -- a Republican Congress at that time.

FUCHS: Yes, that was the 80th Congress -- the one that

[4]

Mr. Truman castigated.

GOODWIN: That was a very conservative Congress. They were responding to pressures to get as many agencies as they could out of the Department of Labor. There was a lot of feeling at that time that the Department of Labor was representing organized labor and that this brought undesirable results from their point of view. Of course, President Truman met the challenge by transferring the whole thing back the following year. We were in the Federal Security Agency just one year. We went back into the Labor Department in '49. And we came back with the Unemployment Insurance program as well.

FUCHS: This was rather strange in a way although I understand the President had made a definite effort, along with Judge Schwellenbach, to get agencies back into Labor after the war. Then two or three years later Congress was doing the opposite.

GOODWIN: Yes, that's right. This was an issue with the Congress.

[5]

FUCHS: Did you discuss this with anyone such as the President or with your superior? Did you report directly to the Secretary of Labor?

GOODWIN: Yes. At that time the Labor Department was not highly structured. We didn't have an Under Secretary at that time. We had an Assistant Secretary and actually it would be fair to say I reported to both. In those days Bureau directors had a good deal more authority, responsibility, and freedom than they have now. I mean they're much more highly structured now with Assistant Secretary and Under Secretary and so on. The Labor Department was a pretty small outfit in those days.

FUCHS: Around the time they appointed the Under Secretary, whom I believe was Keen Johnson, three Assistant Secretaries were also appointed. From the AFL-CIO I believe there was [Philip] Hanna and [John] Gibson. Then David Morse came in from the Office of International Labor Affairs. Did you work directly with one of those Assistant Secretaries?

[6]

GOODWIN: Let's see, was Morse Secretary...

FUCHS: He came in as an Assistant Secretary in '46 and then in 1948, about the time you were being transferred out of Labor, he went to the ILO as Director General. He had come over from NLRB in '46 and was an Assistant Secretary of Labor for two years.

GOODWIN: This was the period when they were trying to do something about building Labor up, and part of that, of course, was getting more policy officials and creating the Under Secretary position. I'm not entirely clear on the timing of this. I know that when we went to the Department of Labor they didn't have an Under Secretary.

FUCHS: No, they didn't under Francis Perkins. There was a reorganization movement that Schwellenbach instituted, and that's when they got an Under Secretary and the three Assistant Secretaries. What were your views of Judge Schwellenbach as a Secretary of Labor?

GOODWIN: Well, I didn't think he was very effective.

[7]

Of course, he was ill during part of that time. He'd been a judge, and he continued to operate pretty much as a judge during the time he was Secretary of Labor. I can remember that the Employment Service had been Federalized during World War II as part of the War Manpower Commission. One of the things that Congress wanted to do immediately was to turn the Employment Service over to the states. The President was in favor of keeping it in the Federal system. We fought this battle out with the Congress and we lost; they returned the Employment Service to the states and set it up on much the same basis as it had been before the war. In other words, it became part of a Federal-state system.

FUCHS: As I understand it, the states accepted the provisions of the various acts of Congress on the Employment Service, including the provisions on taxation. How was it different when it was operated by the states, as against being operated by the Federal Government?

GOODWIN: Prior to the war and at the present time it

[8]

is a Federal-state system, which incorporates a grant-in-aid program. The Federal Government sets broad policies and they are responsible largely for financing.

Originally the Employment Service was set up on a matching basis, 50-50. Then when unemployment insurance came along there was a tremendous workload involved in that for the Employment Service. The Social Security Board made the decision that the Employment Service could be financed from unemployment insurance administrative money. The source of that was a tax on employers, and it was financed that way. During the war it was financed from general funds. But at the end of the war it reverted to a payroll tax. There is still a little money that comes from the general fund of the Treasury -- about 15 percent; but the remaining 85 percent of funding for the Employment Service comes from the unemployment insurance administrative money.

Well, with the grant-in-aid system, we had extensive control over the fiscal operations and

[9]

state policies. We have authority to decide in general terms at least, how the money could be used. But the states were responsible for administration. They hired the people and fired them. We required that they do that through a merit system, but we could not substitute our judgment for theirs in the selection of people or getting rid of people. In those areas they had full control.

Well, after the Employment Service went back to the administration of the states the basic organizational structure has continued since that time. There've been differences in the program, changes in the program, but the Federal-state character of it has remained the same since it went back to the states in 1946.

FUCHS: What are your personal views? Is it better to have it federalized or is it better to have a system of Federal-state cooperation?

GOODWIN: Well, I have been on record over the years

[10]

for a Federal system. I think you can have a good Federal-state system. But the economy is largely a national economy. It's influenced by what happens on a national basis. You get more problems, I think, in unemployment insurance than you do in the Employment Service, under the Federal-state setup. You get differences that are not justified; differences in benefits and other things. I think that a Federal system can be more efficient. I think it can be adjusted to the local differences that do exist. But I doubt that any change is in the cards politically in the near future.

The thing that may bring a change in unemployment insurance is the financial situation. The '74 recession really bankrupted the funds of a good many states; 24 states had to borrow money from the Federal Government in order to run their benefit structure. Although some important steps have been taken to bolster the fiscal system, if we got another recession like

[11]

'74 in the next year or two why we'd be in a very bad way. I think that if federalization comes, it's likely to come through the fiscal failures of the state systems, rather than anything else. I think it's more likely that we'll get some Federal standards rather than out-and-out federalization of the system.

Congress last year passed a new unemployment insurance bill that was pretty important. It extended coverage and now we have almost universal coverage. It mandated a tax base that was almost a 50 percent increase in what was required on the tax base, and it also increased the tax rate to a small extent. And it passed a number of other important amendments to the law.

Congress also set up a commission to study additional changes that might be made in the system. That commission hasn't gotten off the ground yet. President Ford, in his last couple of hours in office, appointed members to

[12]

the commission. Most of them come from management. The law requires that the com