Governor Charles A. Sprague's Administration

Governor's Unemployment Message, 1939


To the Honorable President and Members of the Senate and To the Honorable Speaker and Members of the House of Representatives of the Fortieth Legislative Assembly:

Following the enactment by the people at the last election of the initiative measure regulating picketing and defining labor disputes, Oregon’s Unemployment Compensation Law was challenged before the Federal Social Security Board as being to out of conformity with the requirements of the Federal Act, the assertion being made that the new definition given to the term “labor dispute” in the initiated law impaired the definition in the Unemployment Compensation statute. Representatives of the State of Oregon appeared at a hearing before the Social Security Board in Washington, D.C., on December 19, 1938. While the Board has rendered no decision holding that the Oregon law is out of conformity with the Federal law, it has through agents indicated that grave doubts exist over the sufficiency of the Oregon statute. The effect of a ruling that the Oregon law fails to conform with the Federal law would be to expose employers in this state to an additional Federal tax of two and seven tenths (2.7) per cent on payrolls for the year 1938 (which additional tax and would amount to between five and six million dollars); and would deprive unemployed workers in Oregon of all benefits under the Act since the funds heretofore raised are deposited in trust in the Federal Treasury and under the present state of the law can be used only for the payment of benefits. However, such fund could not be paid to the worker for the reason that Federal grants for administrative expenses would be shut off and the administrative agency could not function.

It seems to me wise that Oregon should move to remove doubts as to the conformity of its Unemployment Compensation law and that any defect which may now exist may be cured through the re-enactment of the appropriate section of the Unemployment Compensation Law. I am, therefore, submitting to the Legislative Assembly for attention and consideration a bill which is intended to accomplish this result. I wish to make it clear that the legislation here suggested would not in any way affect the validity of the operation of the initiative bill passed by the voters of this State on November 8, 1938, and to assure you that by this message I have no intention or desire to amend, nor am I in any way suggesting amending or otherwise affecting the law recently enacted by the people of this State.

I believe that the remedy that I propose will be adequate because I regard the Federal Act as a Social Security Act and not a labor dispute act. I think officials in Washington and legislators and citizens in Oregon should keep in mind the purpose of the Unemployment Compensation Law, which is to provide a flow of money to workers who lose their jobs. This flow amounted to approximately six million dollars ($6,000,000.000) in the year 1938. I am anxious that there be no interruption of this flow, the supply of which has been and is being furnished by the employers of this state.

If any groups or citizens are disposed to interfere with the enactment of this simple remedial legislation or with its certification by the Federal Social Security Board, the responsibility will be on them and not on me for the denial of benefits to unemployed workers in Oregon.

Having clearly stated my position and my recommendations, I urge you to give favorable and early consideration to the passage of this bill, the text of which has been drawn by the attorney for the Oregon Unemployment Compensation Commission.


Charles A. Sprague,


January 16, 1939.

State Archives • 800 Summer St. NE • Salem, OR 97310

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