paid by the taxpayer under any State unemployment compensation law certified by the Social Security Board as provided in section 903. The latter section reads in part as follows:

"SEC. 903. (a) The Social Security Board shall approve any State law submitted to it, within thirty days of such submission, which it finds provides that

"(5) Compensation shall not be denied in such State to any otherwise eligible individual for refusing to accept new work under any of the following conditions: (A) If the position offered is vacant due directly to a strike, lockout, or other labor dispute; (B) if the wages, hours, or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality; (C) if as a condition of being employed the individual would be required to join a company union or to resign from or refrain from joining any bona fide labor organization.

*

"(b) On December 31 in each taxable year the Board shall certify to the Secretary of the Treasury each State whose law it has previously approved, except that it shall not certify any State which, after reasonable notice and opportunity for hearing to the State agency, the Board finds has changed its law so that it no longer contains the provisions specified in subsection (a) or has with respect to such taxable year failed to comply substantially with any such provision."

On December 19, 1938, the Social Security Board, after prior notice to the State of Oregon, held a hearing on the question whether the adoption by the voters of that State on November 8, 1938, of a bill proposed by initiative petition, entitled "An Act Regulating Picketing and Boycotting by Labor Groups and Organizations," changed the State's Unemployment Compensation Law so that it no longer contained the provisions set forth in section 903 (a) (5) of the Federal law.

The Oregon Act of November 8, 1938, makes it unlawful to hinder any person from seeking employment, or to picket or to boycott any employer except under specified and severely restricted conditions. It also regulates the purposes for which a labor organization may collect funds, prescribes the books of account which it shall keep, and confers upon any member the right to inspect these books and to have an accounting.

The Oregon Unemployment Compensation Law (Laws 1935, Special Sess., pp. 155-156; Laws 1937, p. 588) provides in language substantially similar to that of the Federal statute that compensation shall not be denied to any otherwise eligible individual for refusing to accept new work under the conditions described in section 903 (a) (5), supra, except that the meaning of the term "labor dispute" in the Unemployment Compensation Law has been narrowed by a definition in the act of November 8, 1938, with an effect necessarily involved and for consideration by the Social Security Board. That precise question has not been submitted to me and is not treated in the opinion of the General Counsel for the Social Security Board accompanying its letter. I therefore refrain from passing upon it.

The Chairman of the Board in his letter to you of January 10, states, respecting the hearing of December 19, 1938: "At that hearing, it was urged upon the Board that compliance with the standards of section 903 (a), and particularly section 903 (a) (5) (A) and (C) thereof, preclude a State from in any way circumscribing the freedom of individuals to engage in a strike, lockout, or other labor dispute, or to resign from or refrain from joining any bona fide labor organization, within the meaning of those terms as used in that subsection. In other words, it is urged that if a State by legislation made specifically inapplicable to its unemployment compensation statute, circumscribes or prohibits the right of individuals to engage in a strike, lockout, or other labor dispute, or regulates what shall constitute a bona fide labor organization or prescribes the conditions under which individuals may join a bona fide labor organization, as those

terms are used in section 903 (a) (5) of the Social Security Act, such State's unemployment compensation law may not be found to provide for the matters prescribed in section 903 (a) of the Social Security Act."

In the first place, it seems obvious that no State law will meet the requirements if it fails to provide against denial of compensation for refusing to accept new work under the conditions specified in clauses (A), (B), and (C) of section 903 (a) (5). It was urged upon the Board, however, that the Federal requirement goes further and makes it obligatory upon the State to refrain from interfering with the existence of those "conditions"-the argument apparently contemplating in particular the right to strike, to engage in labor disputes, etc. Such a construction would appear to require the conclusion that the statute also obligates the State to refrain from interfering with the existence of the other conditions mentioned in the three clauses-(1) the prohibition against denial of compensation for refusing work if the position offered is vacant due directly to a lockout indicating that the State should not interfere with the right of employers to maintain lockouts; (2) the prohibition against denial of compensation for refusing work if the wages, hours, or other conditions of the work offered are substantially less favorable than those prevailing for similar work in the locality contemplating that the State should not interfere with the conditions under which this can happen; and (3) the prohibition against denial of compensation for refusing to accept new work if joining a company union is a condition of the employment suggesting the conclusion that the State should not interfere with the existence of company unions.

Such a construction, thus carried to the end which logic seems to require, would produce paradoxical results clearly not contemplated by the Congress and beyond the ordinary import of the language used. Certainly, for example, there was no intention on the part of the Congress to inhibit a State from outlawing so-called "yellow dog contracts"-with the necessary effect of striking down, in part at least, the applicability of clause (C)-when by the Norris-LaGuardia Act

(c. 90, 47 Stat. 70), such contracts are made unenforceable in the Federal courts. Quite clearly in so far as concerns clause (C), and apparently no less so with reference to clauses (A) and (B), the Congress merely has taken cognizance of factual situations which exist or may exist in the States and has provided against denying compensation for refusing to accept work under the specified "conditions," but has not attempted in the Social Security Act either to preserve or to eliminate the existence of such conditions.

It also appears to have been urged upon the Board that the rights to organize and to strike are conferred by other Federal legislation, such as the Norris-LaGuardia Act and the National Labor Relations Act (c. 372, 49 Stat. 449), and that the Social Security Act was designed to conform to the same legislative policy. The Congress has recognized the right of labor to organize for its protection, etc., within specified spheres of Federal power; likewise it has provided for the safeguarding of such rights, but only within the scope of that power. For example, the National Labor Relations Act provides that "employees shall have the right to selforganization, to form, join, or assist labor organizations," etc., in the field of interstate and foreign commerce; the Norris-LaGuardia Act declares and protects certain rights of labor within the scope of the Federal judicial power-and the Social Security Act provides for such protection within the domain of its operation. None of these acts attempts to confer or protect such rights within a State generally and without regard to the constitutional division of powers between the Federal and State Governments.

Nothing in the reports of the congressional committees which considered the bill or in the debates in the Congress, indicates that any one regarded the provisions of the section under consideration as doing more than insuring that State laws shall be "genuine unemployment compensation laws" (H. Rept. 615, pp. 8-9, S. Rept. 628, p. 13, 74th Cong. 1st Sess.). That this is the purpose and effect of section 903 (a), moreover, was urged upon the Supreme Court by Government counsel, and apparently was accepted by the Court, in

Steward Machine Co. v. Davis, 301 U. S. 548, 590-591, 593594, which upheld the constitutionality of the Social Security Act.

For the foregoing reasons I agree with the conclusion of the General Counsel of the Social Security Board that the provisions of section 903 (a) (5) of the Social Security Act require only that a State Unemployment Compensation Law shall provide against denial of compensation for refusing to accept new work under the conditions stated in clauses (A), (B), and (C) thereof, and that they do not mean that a State, in order to obtain certification of its unemployment compensation law, must protect the maintenance of these conditions or the right of employees and employers to bring about or participate in strikes, lockouts, etc.

Respectfully,

FRANK MURPHY.

COMPROMISE OF LOANS TO RAILROADS

The Secretary of the Treasury is authorized to accept a cash offer in compromise on account of a loan to a railroad company under the Transportation Act, 1920.

Opinion of Feb. 25, 1924, distinguished.

The SECRETARY OF THE TREASURY.

*

FEBRUARY 7, 1939.

MY DEAR MR. SECRETARY: In your letter of February 1 you state that the * railway owes the United States $44,304.67 principal and approximately $17,000 accrued interest on account of a loan made under section 210 of the Transportation Act, 1920 (41 Stat. 468, 946), and that the carrier offers by way of compromise to pay the principal without interest. You ask my opinion concerning your authority to accept this offer "in view of the language in the opinions of the Attorney General" of January 18, 1923, February 25, 1924, and April 14, 1922 (33 Op. 423; 34 Op. 108, 151).

The Transportation Act authorized the making of loans to carriers by railroad, within 2 years after the termination