UNEMPLOYMENT IN THE UNITED STATES 117 
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to quote the bill, “conducted in accordance with the rules and 
regulations and the standards of efficiency prescribed by the director 
general.” So at this point it is proposed that the Federal appro- 
priation shall be given ‘to the State for the operation of its local 
exchanges on a 50-50 basis, or for the establishment of new ex- 
changes where none existed before, in return for which the State 
agrees, through its legislature, that it will operate the public agen- 
cles in accordance with the rules and regulations which the director 
general prescribes. Whenever such agencies do not conform to 
the Federal director’s regulations, or when, in the opinion of the 
director general, the State agency does not properly expend itself 
either the Federal aid or the moneys appropriated out of its own 
State treasury, he may revoke the certificate and withdraw the 
aid, subject to an appeal to the Secretary of Labor. 
Now, since it may appear that I am quoting from other than 
the bill, let me turn to the provisions of the bill itself, section 9: 
it shall be the duty of the director general to ascertain whether the system of 
public employment offices maintained in each State is conducted in accordance 
with the rules and regulations and the standards of efficiency prescribed by the 
director general in accordance with the provisions of this act. The director 
general may revoke any existing certificates or withhold any further certificate 
brovided for in section 7, whenever he shall determine, as to any State, that the 
cooperating State agency has not properly expended the moneys paid to it or the 
moneys herein required to be appropriated by such State, in accordance with 
nlans approved under this act. 
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You perceive that goes directly to approval or disapproval of the 
expenditure of the State’s own funds, as well as the expenditure of 
the Federal aid in conformity with the rules and regulations prescribed 
by the director general. 
Mr. Sumners. Mr. Emery, would it interrupt you there to ask a 
question? 
Mr. Emery. Not at all. 
Mr. Sumners. The result of the action of the Federal officer, 
however, is merely to withdraw from use in the States the Federal 
funds, is it not? 
Mr. Emery. Yes, sir. If you will permit me, I think I will antici- 
pate your thought there. 
Mr. Sumners. I will withdraw the question then and not clutter 
up the record. 
Mr. Emery. If you will permit me to conclude my statement with 
respect to the form of the bill, I think I will anticipate just what you 
have in mind. 
The plan of control does not stop, however, with financial persua- 
sion. That, I think, we may appropriately call the plan up to this 
point. It goes much further. There is a balance of $1,000,000 
Per year within the proposed appropriation, and this is available for 
two major purposes to be found in section 10 of the bill. These are 
to be expended: First, to establish a system of public employment 
offices subject to Federal control within the States which have not 
established such offices; and second, to establish and maintain such 
offices in States which already possess a system of public employ- 
ment offices but which, in the naive language of the bill “have not 
complied with the provisions of section 4,” that is, have not, through 
their legislatures, accepted Federal aid upon the terms upon which it 
1s offered—that is, the section throuech which this control is ac-